LABOR CASE DIGESTS

Labor Standards and Social Legislation

Arellano University School of Law

5:30-8:30 pm, Thursday

Dean Porfirio DG. Panganiban, Jr.

KAREN CAMILLE SATIADA

LIST OF CASES

Article 1-6: Labor in General

1. Maternity Children’s Hospital vs. Secretary of Labor

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

22. Rizal Empire Insurance Group vs. NLRC

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

25. National Housing Corporation vs. Juco

26. National Service Corp vs. NLRC
27. Republic vs. CA
28. Luzon Development Bank vs . Association of Luzon Development Bank
et.al.
29. Social Security System Employees Association vs. CA
Article 7-11: Emancipation of Tenants

30. Association of Small Landowners of the Philippines vs. Secretary of

Agrarian Reform
31. Acuna vs. Arroyo
32. Pabico vs. Juico
 33. Maanay vs. Juico
34. Alita vs. CA
35. Gonzales vs. CA
36. Luz farms vs. Secretary of Agrarian Report
Article 13: Recruitment and Placement

37. People vs. Panis

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

Article 19-24: Overseas Employment

40. Eastern Shipping Lines vs. POEA

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

Article 20: National Seamen Board

55. Phil.International Shipping Corporation vs. NLRC

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

60. Finman General Assurance vs. Inocencio

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

63.Soriano vs. offshore Shipping and Marketing corp.

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

65. Catan vs. NLRC

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

68. People of the Philippines vs. Bulu Chowdry

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

83. Almodiel vs. NLRC, et al.

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

86.Nitto Enterprises vs. NLRC and R. Capili

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

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

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

114. National Sugar Refineries Corp. vs. NLRC

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

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

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

Article 84: Hours Worked

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

140. Jose Rizal College vs. NLRC and NATOW

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

Article 97: Wages and Salary

151. Songco et. al vs.NLRC

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

Article 99-101: Minimum Wage

156. Atok Big Wedge Mining Co. Inc vs. Atok Big Wedge Mutual Benefit
Association
157. De Racho vs. Municipality of Iligan
158. Planas Commercial vs. NLRC, A. Ofialda et.al

Article 100: Elimination or Diminution of Benefits

159. Davao Integrated Ports Stevedoring Services vs. Abarquez

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

206. Philippine Global Communication Inc

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

Article 280: Regular and Casual Employment

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

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

248.Labor Congress of the Phil. v. NLRC

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

303.International Catholic Migration Commission vs. NLRC

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

388. Habana v. NLRC

389.Azcor Manufacturing, Inc. v. NLRC
390. Metro Transit Organization, Inc. v. NLRC
391. Reyes v. CA
392. Wilt Hahn Enterprises v. Maghuyop
393. Cheniver Deco Print Technics Corporation v. NLRC
394. Admiral Realty Co., Inc. v. NLRC
395. Phil. Wireless Inc. v. NLRC
396. Pascua v. NLRC
397. Intertrod Maritime Inc. v. NLRC
398.Manila Broadcasting Co. v. NLRC
399. Valdez v. NLRC
MATERNITY CHILDREN’S HOSPITAL VS. SECRETARY OF LABOR
G.R. NO. 78909
JUNE 30 1984

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

On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of
Labor and Employment, Region X, for underpayment of their salaries and
ECOLAS, which was docketed as ROX Case No. CW-71-86.

The Regional Director issued and order based on the reports of the Labor
Standard and Welfare Officers, directing payment of P723, 888.58 representing
underpayment of wages and ECOLAs to all the petitioner’s employees. Petitioner
appealed to the Minister of Labor and Employment which modified the decision
as to the period for the payment ECOLAs only. A motion for reconsideration was
filed by petitioner and was denied by the Secretary of Labor.

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

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

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

FACTS:

The National Traffic Commission resolved that animal-drawn vehicles be

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

ISSUE:

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

HELD:

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

PEOPLE VS. VERA REYES

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

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

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

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

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

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

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

PHIL. ASSOCIATION OF SERVICE EXPORTERS INC VS DRILON

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

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

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

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

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

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

The consequence the deployment ban has on the right to travel does not impair
the right. The right to travel is subject, among other things, to the requirements
of "public safety," "as may be provided by law. Neither is there merit in the
contention that Department Order No. 1 constitutes an invalid exercise of
legislative power. It is true that police power is the domain of the legislature, but
it does not mean that such an authority may not be lawfully delegated. As we
have mentioned, the Labor Code itself vests the Department of Labor and
Employment with rule-making powers in the enforcement whereof.
The non-impairment clause of the Constitution, invoked by the petitioner, must
yield to the loftier purposes targeted by the Government. Freedom of contract
and enterprise, like all other freedoms, is not free from restrictions, more so in
this jurisdiction, where laissez faire has never been fully accepted as a controlling
economic way of life.

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

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

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

On November 20, 1981, private respondents filed a complaint against the

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

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

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

It is well-settled that in the implementation and interpretation of the provisions

of the Labor Codeand its implementing regulations, the workingman's welfare
should be the primordial and paramount consideration.

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

EURO-LINEA PHIL, INC. VS. NLRC

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

Laborer’s Welfare: Liberal Approach

Facts:

Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping

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

Issue:

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

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

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

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

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

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

MANILA ELECTRIC COMPANY VS. NLRC

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

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

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

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

HELD: The SC sustained the decision of the NLRC. Well-established is the

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

SOSITO VS. AGUINALDO DEVELOPMENT CORPORATION

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

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

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

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

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

Issue:
Whether the Minister of Labor correctly certified the respondent as the
petitioner’s union.

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

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

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

MENDOZA VS. RURAL BANK OF LUCBAN

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

Facts:

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

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

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

Held:
The Petition has no merit.

Constructive dismissal is defined as an involuntary resignation resorted to when

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

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

GELMART INDUSTRIES PHILS., INC. VS. NLRC

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

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

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

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

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

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

LAGATIC VS. NLRC

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

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

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

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

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

HELD:
The petition lacks merit.

To constitute a valid dismissal from employment, two requisites must be met,

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

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

Facts:

Respondent Mariano Borromeo was Assistant Vice-President of the Branch

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

Mariano resigned from the Bank and apologized “for all the trouble I have caused
because of the Maniwan case.” The respondent, however, vehemently denied
benefitting therefrom. His acts having constituted violation of the Bank’s Code of
Ethics, the respondent was directed to restitute the amount of P1,507,736.79
representing 90% of the total loss of P1,675,263.10 incurred by the Bank.
However, in view of his resignation and considering the years of service in the
Bank, the management earmarked only P836,637.08 from the respondent’s total
separation benefits or pay. The said amount would be released upon recovery of
the sums demanded from Maniwan in a civil case filed against him by the bank
with the RTC in Cagayan de Oro City.

The respondent made a demand on the bank for the payment of his separation
pay and other benefits, but the bank maintained its position to withhold the sum
of P836,637.08. Thus, Mariano filed with the NLRC a complaint for payment of
separation pay, mid-year bonus, profit share and damages against the bank.

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

Issue:

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

Held:

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

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

Significantly, the respondent is not wholly deprived of his separation benefits. As

the Labor Arbiter stressed in his decision, “the separation benefits due the
complainant were merely withheld. Even the petitioner bank itself gives “the
assurance that as soon as the bank has satisfied a judgment in the civil case, the
earmarked portion of his benefits will be released without delay.

WHEREFORE, the petition is granted. The decision of the CA is reversed and set
aside. The Resolution of the NLRC is reinstated.

ASSOCIATED WATCHMEN AND SECURITY UNION VS. LANTING

G.R. NO. L – 14120
FEBRUARY 29, 1960
LABRADOR, J.

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

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

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

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

Therefore, the Court affirms the decision of the CIR and costs are imposed
against the petitioner.

PAMPANGA BUS COMPANY, INC., VS. PAMBUSCO EMPLOYEES'

UNION, INC.
G.R. NO. 46739
SEPTEMBER 23, 1939
FACTS:
On May 31, 1939, the Court of Industrial Relations issued an order, directing the
petitioner herein, Pampanga Bus Company, Inc., to recruit from the respondent,
Pambusco Employees'Union, Inc., new employees or laborers it may need to
replace members of the union who may be dismissed from the service of the
company, with the proviso that, if the union fails to provide employees possessing
the necessary qualifications, the company may employ any other persons it may
desire. This order, in substance and in effect, compels the company, against its
will, to employ preferentially, in its service, the members of the union.

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

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

GREGORIO ARANETA EMPLOYEES UNION VS. ROLDAN

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

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

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

The reorganization of the Agricultural Division was adopted by unanimous

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

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

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

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

It should be noted that the retrenchment policy was adopted before even the
organization of the petitioning union. It was not, therefore, aimed at the Union or
any of its members for union or labor activities. It was not an unfair labor
practice.
In view of the foregoing, the petition is denied, without pronouncement as to
costs. It is so ordered.
PHILIPPINE STEEL METAL WORKERS’ UNION V. CIR
G.R. NO. L-2028
APRIL 28, 1949
REYES, J.

Facts:

This is a petition for certiorari to review an order of the Court of Industrial

Relations on the ground that the same was rendered in excess of jurisdiction and
with grave abuse of discretion.

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

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

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

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

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

Issue:

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

Ruling:

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

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

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

TIONG KING VS. COURT OF INDUSTRIAL RELATIONS

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

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

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

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

RIZAL EMPIRE INSURANCE GROUP V NLRC

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

Facts:

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

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

Issue:

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

of jurisdiction in dismissing petitioner’s appeal on a technicality.

Held:

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

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

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

period within which to perfect an appeal shall be entertained.

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

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

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

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

WHEREFORE, this petition is DISMISSED.

SO ORDERED.

PASEI VS. DRILON

163 SCRA 386
JUNE 30, 1988
SARMIENTO, J.

FACTS:

The Department of Labor and Employment issued an order suspending the

deployment of Filipino domestic and household workers, in view of the
heightened abuses committed against OFWs abroad. The petitioner, a local
recruitment agency, petitioned for the invalidation of such order for alleged
violation of equal protection clause.
ISSUE:
Whether or not the deployment ban a valid exercise of police power? What is
police power?

HELD:

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

CBTC EMPLOYERS UNION VS. CLAVE

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

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

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

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

NATIONAL HOUSING CORP. V. JUCO

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

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

ISSUE: Are employees of the National Housing Corporation, a GOCC without

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

NATIONAL SERVICE CORPORATION VS NLRC

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

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

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

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

REPUBLIC OF THE PHILIPPINES VS. COURT OF APPEALS

G.R. NO. 87676
DECEMBER 20, 1989
GRINO-AQUINO, J.
FACTS
NPDC was originally created in 1963 under Executive Order No. 30, as the
Executive Committee for the development of the Quezon Memorial, Luneta and
other national parks, and later renamed as the National Parks Development
Committee under Executive Order No. 68, on September 21, 1967, it was
registered in the Securities and Exchange Commission (SEC) as a non-stock and
non-profit corporation, known as "The National Parks Development Committee,
Inc.
On March 20, 1988, NPDCEA (TUPAS local Chapter No. 967) and NPDCSA
(TUPAS Chapter No. 1206), labor unions of employees of National Parks
Development Committee ,staged a stake at the Rizal Park, Fort Santiago, Paco
Park, and Pook ni Mariang Makiling at Los Banos, Laguna, alleging unfair labor
practices.
On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch III,
a complaint against the union to declare the strike illegal and to restrain it on the
ground that the strikers, being government employees, have no right to strike
although they may form a union.
Lower court dismissed the case for lack of jurisdiction as the case should be
under the jurisdiction of Department of Labor as there exist an Employer-
Employee Relationship.
Court of appeals affirmed the order of the trial court, hence, this petition for
review.

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

Ruling
Since NPDC is a government agency, its employees are covered by civil service
rules and regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are
civil service employees (Sec. 14, Executive Order No. 180).
While NPDC employees are allowed under the 1987 Constitution to organize and
join unions of their choice, there is as yet no law permitting them to strike. In
case of a labor dispute between the employees and the government, Section 15 of
Executive Order No. 180 dated June 1, 1987 provides that the Public Sector
Labor- Management Council, not the Department of Labor and Employment,
shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in
holding that the labor dispute between the NPDC and the members of the NPDSA
is cognizable by the Department of Labor and Employment.
WHEREFORE, the petition for review is granted. The decision of the Court of
Appeals in CA-G.R. SP No. 14204 is hereby set aside. The private respondents'
complaint should be filed in the Public Sector Labor-Management Council as
provided in Section 15 of Executive Order No. 180. Costs against the private
respondents.
LUZON DEVELOPMENT BANK VS. ASSOCIATION OF LUZON
DEVELOPMENT BANK, ET AL.
G.R. NO. 120319
OCTOBER 6, 1995
ROMERO, J.

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

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

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

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

SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA)

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

Facts:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a
complaint for damages with a prayer for a writ of preliminary injunction against
petitioners, alleging that on June 9, 1987, the officers and members of SSSEA
staged an illegal strike and baricaded the entrances to the SSS Building,
preventing non-striking employees from reporting for work and SSS members
from transacting business with the SSS; that the strike was reported to the Public
Sector Labor - Management Council, which ordered the strikers to return to
work; that the strikers refused to return to work; and that the SSS suffered
damages as a result of the strike. The complaint prayed that a writ of preliminary
injunction be issued to enjoin the strike and that the strikers be ordered to return
to work; that the defendants (petitioners herein) be ordered to pay damages; and
that the strike be declared illegal.
It appears that the SSSEA went on strike after the SSS failed to act on the union's
demands, which included: implementation of the provisions of the old SSS-
SSSEA collective bargaining agreement (CBA) on check-off of union dues;
payment of accrued overtime pay, night differential pay and holiday pay;
conversion of temporary or contractual employees with six (6) months or more of
service into regular and permanent employees and their entitlement to the same
salaries, allowances and benefits given to other regular employees of the SSS; and
payment of the children's allowance of P30.00, and after the SSS deducted
certain amounts from the salaries of the employees and allegedly committed acts
of discrimination and unfair labor practices.

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

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

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

ASSOCIATION OF SMALL LANDOWNERS O F THE PHILIPPINES VS.

SECRETARY OF DAR
G.R. No. 78742
JULY 14, 1989
CRUZ, J.

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

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

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

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

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

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

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

The Constitution of 1987 was not to be outdone. Besides echoing these

sentiments, it also adopted one whole and separate Article XIII on Social Justice
and Human Rights, containing grandiose but undoubtedly sincere provisions for
the uplift of the common people. These include a call in the following words for
the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded
on the right of farmers and regular farmworkers, who are landless, to own
directly or collectively the lands they till or, in the case of other farmworkers, to
receive a just share of the fruits thereof. To this end, the State shall encourage
and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking
into account ecological, developmental, or equity considerations and subject to
the payment of just compensation. In determining retention limits, the State shall
respect the right of small landowners. The State shall further provide incentives
for voluntary land-sharing.

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

P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21,

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

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

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

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

This should counter-balance the express provision in Section 6 of the said law
that "the landowners whose lands have been covered by Presidential Decree No.
27 shall be allowed to keep the area originally retained by them thereunder,
further, that original homestead grantees or direct compulsory heirs who still
own the original homestead at the time of the approval of this Act shall retain the
same areas as long as they continue to cultivate said homestead."

R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in
fact is one of its most controversial provisions.

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

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

ACUÑA VS. ARROYO

G.R. NO. 79310
JULY 14, 1989

Facts:

RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of

1988 was signed into law by then President Corazon Aquino. There were a
number of legal questions challenging the constitutionality of the several
measures enacted to implement the CARL.

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

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

Agrarian Reform Fund.- There is hereby created a special fund, to be known as

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

Petitioners contend that taking must be simultaneous with payment of just

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

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

Issue:

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

Held:

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

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

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

The expropriation in the instant case affects all private agricultural lands
whenever found and of whatever kind as long as they are in excess of the
maximum retention limits allowed their owners. This kind of expropriation is
intended for the benefit not only of a particular community but of the entire
Filipino nation.

Such a program will involve not mere million of pesos. The cost will be
tremendous. Considering the vast areas of land subject to expropriation under
the laws before us, we estimate that hundreds of billions of pesos will be needed,
far more indeed that the amount of P50 billion initially appropriated, which is
already staggering as it is by our present standards.

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

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

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

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

Facts:

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

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

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

Issue:

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

an approved residential subdivision.

Held:

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

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

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

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

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

We deny the petition for review for lack of merit.

PEOPLE VS. PANIS

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

Facts:

Four informations were filed on January 9, 1981, in the Court of First Instance of
Zambales and Olongapo City alleging that Serapio Abug, private respondent
herein, "without first securing a license from the Ministry of Labor as a holder of
authority to operate a fee-charging employment agency, did then and there
wilfully, unlawfully and criminally operate a private fee-charging employment
agency by charging fees and expenses (from) and promising employment in Saudi
Arabia" to four separate individuals named therein, in violation of Article 16 in
relation to Article 39 of the Labor Code.
V
i Abug filed a motion to quash on the ground that the informations did not charge
an offense because he was accused of illegally recruiting only one person in each
of the four informations. Under the proviso in Article 13(b), he claimed, there
would be illegal recruitment only "whenever two or more persons are in any

r manner promised or offered any employment for a fee."

The posture of the petitioner is that the private respondent is being prosecuted
under Article 39 in relation to Article 16 of the Labor Code; hence, Article 13(b) is

J not applicable. However, as the first two cited articles penalize acts of
recruitment and placement without proper authority, which is the charge
embodied in the informations, application of the definition of recruitment and
placement in Article 13(b) is unavoidable.

e Issue:

Whether or not the petitioner is guilty of violating Article 13(b) of P. D. 442,

n
otherwise known as the Labor Code.

Held:

S
Article 13(b) of P. D. 442, otherwise known as the Labor Code, states that, "(b)
'Recruitment and placement' refers to any act of canvassing, 'enlisting,
contracting, transporting, hiring, or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad,

h
whether for profit or not: Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement."

As we see it, the proviso was intended neither to impose a condition on the basic

i rule nor to provide an exception thereto but merely to create a presumption. The
presumption is that the individual or entity is engaged in recruitment and
placement whenever he or it is dealing with two or more persons to whom, in
consideration of a fee, an offer or promise of employment is made in the course of

p
the "canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
(of) workers."

At any rate, the interpretation here adopted should give more force to the

p
campaign against illegal recruitment and placement, which has victimized many
Filipino workers seeking a better life in a foreign land, and investing hard-earned
savings or even borrowed funds in pursuit of their dream, only to be awakened to
the reality of a cynical deception at the hands of their own countrymen.

i Acknowledgement: Peter De Guzman

n
MILLARES AND LAGDA VS. NLRC
G.R. NO. 110524
JULY 29, 2002
KAPUNAN, J.

FACTS:
Douglas Millares was employed by ESSO International Shipping Company
through its local manning agency,Trans-Global MaritimeAgency, as a machinist
he was promoted as Chief Engineer which position Millares applied for a leave of
absence for almost 1month. The Trans-Global, approved the request for leave of
absence. Millares wrote to the Operations Manager of Exxon
InternationalCo.informing him of his intention to avail of the optional retirement
plan under the Consecutive Enlistment Incentive Plan (CEIP)considering that he
had already rendered more than twenty (20) years of continuous service. Esso
International, denied the requestfor optional retirement on the following
grounds, to wit: (1) he was employed on a contractual basis; (2) his contract of
enlistment(COE) did not provide for retirement before the age of sixty (60) years;
and (3) he did not comply with the requirement for claimingbenefits under the
CEIP, i.e., to submit a written advice to the company of his intention to terminate
his employment within thirty (30)days from his last disembarkation date Millares
requested for an extension of his leave of absence for another 15days. TheCrewing
Manager, Ship Group A, Trans-Global, wrote petitioner Millares advising him
that respondent Esso International "hascorrected the deficiency in its manpower
requirements specifically in the Chief Engineer rank by promoting a First
AssistantEngineer to this position as a result of (his) previous leave of absence
which expired last August 8, 1989. The adjustment in saidrank was required in
order to meet manpower schedules as a result of (his) inability.Esso International
advised Millares that hisabsence without leave, which is equivalent to
abandonment of his position,On the other hand Lagda was employed by Esso
International as wiper/oiler He was promoted as Chief Engineer in 1980, a
positionhe continued to occupy until his last COE expired on April 10,
1989.Lagda applied for a leave of absence from June 19,1989 up tothe whole
month of August 1989. Then the Trans-Global’s approved petitioner Lagda’s
leave of absence from June 22, 1989 to July20, 1989[7] and advised him to report
for re-assignment on July 21, 1989. Lagda wrote a letter to Operations Manager
of EssoInternational, through Trans-Global’s President informing him of his
intention to avail of the optional early retirement plan in view of his twenty (20)
years continuous service in the company Trans-Global denied petitioner Lagda’s
request for availment of theoptional early retirement scheme on the same
grounds upon which petitioner Millares’ request was denied.he requested for
anextension of his leave of absence up to August 26, 1989 and the same was
approved. However Esso International throughPersonnel Administrator,adise
petitioner Lagda that in view of his "unavailability for contractual sea service,"
he had beendropped from the roster of crew members effective September 1,
1989.Millares and Lagda filed a complaint-affidavit, for illegal dismissal and non-
payment of employee benefits against privaterespondents Esso International and
Trans-Global, before the POEA. POEA: dismissing the complaint for lack
of merit. NLRCdismissing petitioners’ appeal and denying their motion for new
trial for lack of merit.

ISSUE: WHETHER OR NOT THEY ARE REGULAR EMPLOYEES.

RULING:SC: Art. 280. Regular and casual employment. - The provisions of

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

DITAN VS. POEA ADMINISTRATOR

G.R. NO. 79560
DECEMBER 3, 1990

Facts:

Andres E. Ditan was recruited by private respondent Intraco Sales Corporation,

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

Arriving on November 30, 1984, in Luanda, capital of Angola, the petitioner was
assigned as an ordinary welder in the INTRACO central maintenance shop from
December 2 to 25, 1984. On December 26, 1984, he was informed, to his distress
that would be transferred to Kafunfo, some 350 kilometers east of Luanda. This
was the place where, earlier that year, the rebels had attacked and kidnapped
expatriate workers, killing two Filipinos in the raid. Naturally, Ditan was
reluctant to go. However, he was assured by the INTRACO manager that Kafunfo
was safe and adequately protected by government troops; moreover — and this
was more persuasive — he was told he would be sent home if he refused the new
assignment. In the end, with much misgiving, he relented and agreed.

On December 29, 1984, his fears were confirmed. The Unita rebels attacked the
diamond mining site where Ditan was working and took him and sixteen other
Filipino hostages, along with other foreign workers. The rebels and their captives
walked through jungle terrain for 31 days to the Unita stronghold near the
Namibian border.

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

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

All these claims were dismissed by POEA Administrator Tomas D. Achacoso in a

decision dated January 27, 1987. 2 This was affirmed in toto by respondent NLRC
in a resolution dated July 14, 1987, 3 which is now being challenged in this
petition.

Issue:

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

Held:

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

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

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

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

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

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

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

WHEREFORE, the challenged resolution of the NLRC is hereby MODIFIED. The

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

VINTA MARITIME COMPANY V NLRC

G.R. NO. 113911
JANUARY 23, 1998

Facts:

Leonides Basconsillo, private respondent, filed a complaint with the Philippine

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

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

Issue:

Whether or not private respondent is illegally dismissed.

Held:

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

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

Illegally dismissed workers are entitled to the payment of their salaries

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

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

resolution are affirmed.
MARSAMAN MANNING AGENCY VS. NLRC
G.R. NO. 127195
AUGUST 25, 1999
R.A. 8042 (Migrant Workers Act)

Facts:

Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the

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

Private respondent Cajeras filed a complaint for illegal dismissal against

petitioners with the NLRC alleging that he was dismissed illegally, denying that
his repatriation was by mutual consent, and asking for his unpaid wages,
overtime pay, damages, and attorney's fees.

On 29 January 1996 Labor Arbiter resolved the dispute in favor of private

respondent Cajeras ruling that the latter's discharge from the MV Prigipos
allegedly by "mutual consent" was not proved by convincing evidence.

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

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

Issue:

Whether or not the NLRC committed grave abuse of discretion

Ruling:

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

Sec. 10. In case of termination of overseas employment without just, valid or

authorized cause as defined by law or contract, the worker shall be entitled to the
full reimbursement of his placement fee with interest at twelve percent (12%) per
annum, plus his salaries for the unexpired portion of the employment contract or
for three (3) months for every year of the unexpired term whichever is less.

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

To follow petitioners' thinking that private respondent is entitled to three (3)

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

The questioned Decision and Resolution of public respondent National Labor

Relations Commission are AFFIRMED.

ASIAN CENTER FOR CAREER AND EMPLOYMENT SYSTEM AND

SERVICES, INC. (ACCESS),VS. NATIONAL LABOR RELATIONS
COMMISSION AND IBNO MEDIALES
G.R. NO. 131656
OCTOBER 12, 1998

Facts:

petitioner hired respondent IBNO MEDIALES to work as a mason in Jeddah,

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

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

Held:

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

ATHENNA INTERNATIONAL MANPOWER SERVICES, INC. vs.

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

Facts:

The petitioner is a domestic corporation engaged in recruitment and placement

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

Issue:

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

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

Held:

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

EASTERN SHIPPING LINES V POEA

G.R. NO. 76633
OCTOBER 18, 1988

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

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

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

It is true that legislative discretion as to the substantive contents of the law

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

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

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

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

NORSE MANAGEMENT CO. VS. NATIONAL SEAMEN BOARD

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

Facts:

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

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

Issue:

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

Held:

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

NFD INTERNATIONAL MANNING AGENTS VS. NLRC

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

Facts:

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

Issue:

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

Held:

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

VIRJEN SHIPPING AND MARINE SERVICES VS. NLRC

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

Facts:
Certain seamen entered into a contract of employment for a 12-month
period. Some three months after thecommencement of their employment, the
seamen demanded a 50% increase of their salaries and benefits. Theseamen
demanded this increase while their vessel was on route to a port in Australia
controlled by the InternationalTransport Federation (ITP) where the ITF could
detain the vessels unless it paid its season ITF rates.The agent of the owner of the
vessel agreed to a 25% increase, but when the vessel arrived in Japan
shortly afterwards, the seamen were repatriated to Manila and their contract
terminated.Two motions for reconsideration filed with Second Division were
denied by said Division. Another motion forreconsideration was filed with the
Supreme Court en banc which gave its due course, after finding that there was
aneed to reconcile the decision of the Second Division with that of the First
Division with the Wallen Decision. In thatdecision, the First Division had
ruled that the termination of the seamen was illegal.

Issue:
Whether or not the termination of the seamen was illegal.

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

SUZARA VS. BENIPAYO

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

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

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

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

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

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

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

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

ISSUE: Whether or not Chavez is entitled to relief.

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

It is understood that the terms and conditions stated in this Employment

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

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

FINMAN GENERAL ASSURANCE CORP. vs. INOCENCIO

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

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

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

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

Further, Article 31 of the Labor Code provides:

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

EASTERN ASSURANCE & SURETY CORPORATION VS. SECRETARY

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

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

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

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

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

Though some of the cases were filed after the expiration of the surety bond
agreement between J&B and Eastern Assurance, notice was given to J&B of such
anomalies even before said expiration. In this connection, it may be stressed that
the surety bond provides that notice to the principal is notice to the surety.
Besides, it has been held that the contract of a compensated surety like
respondent Eastern Assurance is to be interpreted liberally in the interest of the
promises and beneficiaries rather than strictly in favor of the surety.

SALAZAR VS. ACHACOSO

G.R. NO. 81510
MARCH 14, 1990
SARMIENTO, J.

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

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

SORIANO VS. OFFSHORE SHIPPING AND MARKETING CORP.

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

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

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

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

SEAGULL MARITIME CORP. VS BALATONGAN, NLRC & POEA

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

Facts:

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

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

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

Balatongan demanded payment for his claim for total disability insurance in the
amount of US $ 50,000.00 as provided for in the contract of employment but his
claim was denied for having been submitted to the insurers beyond the
designated period for doing so.

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

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

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

Issue:

W/N the supplementary contract of employment entered into between

petitioners and respondent is a prohibited practice to afford greater benefits to
the employee

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

The Court finds that the respondent NLRC did not commit a grave abuse of
discretion in denying petitioners, motion for leave to file third-party complaint
and substitution inclusion of party respondent. Such motion is largely addressed
to the discretion of the said Commission. Inasmuch as the alleged transfer of
interest took place only after the POEA had rendered its decision, the denial of
the motion so as to avoid further delay in the settlement of the claim of private
respondent was well-taken. At any rate, petitioners may pursue their claim
against their alleged successor-in-interest in a separate suit.
 

CATAN VS. NLRC

G.R. NO. 77279
APRIL 15, 1988
CORTES, J.

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

RULING
1.The court said that there is no merit in petitioner’s contention. A private
employment agency may be sued jointly and solidarily with its foreign principal
for violations of the recruitment agreement and the contracts of employment.
2.Even if indeed petitioner and the Saudi principal had already severed their
agency agreement at the time private respondent was injured, petitioner may still
be sued for a violation of the employment contract because no notice of the
agency agreement's termination was given to the private respondent:

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

ROYAL CROWNE INTERNATIONAL VS. NLRC

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

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

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

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

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

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

FACILITIES MANAGEMENT CORPORATION VS. DE LA ROSA

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

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

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

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

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

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

PEOPLE VS. CHOWDURY

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

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

For his defense Chowdury testified that he worked as interviewer at Craftrade

from 1990 until 1994. His primary duty was to interview job applicants for
abroad. As a mere employee, he only followed the instructions given by his
superiors, Mr. Emmanuel Geslani, the agency's President and General Manager,
and Mr. UtkalChowdury, the agency's Managing Director.
Issue: Whether or not accused-appellant knowingly and intentionally
participated in the commission of the crime charged.

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

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

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

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

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

PEOPLE OF THE PHILIPPINES VS. LUZ GONZALES-FLORES

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

Facts:
The accused, conspiring together, confederating with several persons whose true
names and whereabouts have not as yet been ascertained and helping one
another, did then and there wilfully, unlawfully and feloniously defraud LARRY
TIBOR Y MABILANGAN in the following manner, to wit: the said accused, by
means of false manifestations and fraudulent representations which they made to
said complainant to the effect that they had the power and capacity to recruit and
employ complainant abroad as [a] seaman and could facilitate the processing of
the pertinent papers if given the necessary amount to meet the requirements
thereof, and by means of other similar deceits, induced and succeeded in
inducing said complainant to give and deliver, as in fact gave and delivered to
said accused the amount of P38,000.00 on the strength of said manifestations
and representations, said accused well knowing that the same were false and
fraudulent and were made solely to obtain, as in fact they did obtain the amount
of P38,000.00 which amount once in possession, with intent to defraud LARRY
TIBOR Y MABILANGAN wilfully, unlawfully and feloniously mis-appropriated
misapplied and converted to their own personal use and benefit) to the damage
and prejudice of said complainant in the amount of P38,000.00, Phi1ippine
Currency.

On the other hand, in Criminal Case No. Q-94-59473, the information for illegal
recruitment in large scale charged:

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

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

Two days later, Baloran and Domingo went to the compound where Felixberto
and accused-appellant were residing and called Felixberto, Cloyd, and Jojo to a
meeting. Domingo told the applicants that he was the chief engineer of the luxury
ocean liner where they would embark and repeated to them the salaries and other
benefits which they would receive. He told them not to get impatient.

Accused-appellant later saw complainant to collect the balance of P35,000.00.

Complainant was told to give the money to accused-appellant at Wendy's in
Cubao, Quezon.City on August 12, 1994.

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

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

On August 18, 1994, accused-appellant saw complainant again to collect the P

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

Issue: Whether the accused is guily of illegal recruitment.

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

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

PEOPLE V. SAGAYDO
G.R. NOS. 124671-75
SEPTEMBER 29, 2000
PARDO, J.

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

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

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

The absence of receipts cannot defeat a criminal prosecution for illegal

recruitment. As long as the witnesses can positively show through their respective
testimonies that the accused is the one involved in prohibited recruitment, he
may be convicted of the offense despite the absence of receipts.

PEOPLE V BENZON ONG

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

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

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

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

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

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

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

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

The evidence shows that he made misrepresentations to them concerning his

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

PEOPLE V. CALONZO
G.R. NOS. 115150-55
SEPTEMBER 27, 1996
BELLOSILLO, J.
Facts:
Firstly, he deluded complainants into believing that jobs awaited them in Italy by
distinctly impressing upon them that he had the facility to send them for work
abroad. He even showed them his passport to lend credence to his claim. To top
it all, he brought them to Bangkok and not to
Italy. Neither did he have any arrangements in Bangkok for the transfer of
his recruits to Italy. Secondly, POEA likewise certified that neither Calonzo
nor R. A. C. Business Agency was licensed to recruit workers for employment
abroad. Appellant admitted this fact himself. Thirdly, appellant recruited five (5)
workers thus making the crime illegal recruitment in large scale constituting
economic sabotage.
Complainants were all united in pointing to the Calonzo as the person who
enticed them to apply for employment abroad. Of course, Calonzo could not
explain what motivated the complaining witnesses to file these cases against
him. The most that Calonzo could do on the witness stand was to deny all the
charges against him. Alas, his denial is at most lame and cannot prevail over the
positive assertions of the complaining witnesses.

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

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

Calonzo defrauded complainants through deceit. They were obviously misled

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

PEOPLE V. DE REICHL
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS.
FRANCISCO HERNANDEZ (AT LARGE), KARL REICHL, AND
YOLANDA GUTIERREZ DE REICHL, ACCUSED.
KARL REICHL AND YOLANDA GUTIERREZ DE REICHL, ACCUSED-
APPELLANTS.
G.R. NOS. 141221-36
MARCH 7, 2002
PUNO, J.

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

Held: They cannot be convicted of illegal recruitment committed in large scale.

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

PEOPLE V. TOMMY TAN

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

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

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

large scale.

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

PEOPLE V ARABIA AND TOMAS

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

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

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

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

Held: Undoubtedly, accused Arabia and Tomas were engaged in recruiting

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

These essential elements are present in this case. Accused-appellants recruited at

least four persons, giving them the impression that they had the capability to
send them to Taiwan for employment. They collected various amounts allegedly
for recruitment and placement fees without license or authority to do so. It is
settled that the fact that an accused in an illegal recruitment case did not issue
the receipts for amounts received from the complainants has no bearing on his
culpability so long as complainants show through their respective testimonies
and affidavits that the accused was involved in the prohibited recruitment. Thus,
the accused-appellants were guilty of illegal recruitment in large scale.

PEOPLE V VERANO
G.R. NO. 110109
NOVEMBER 21, 1996
ROMERO, J.

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

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

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

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

Held: The court found the accused guilty beyond reasonable doubt of the crime
illegal recruitment in large scale and sentenced her to suffer the penalty of life
imprisonment to pay fine of P100,000 and ordered to pay the offended parties,
Arturo and Alfonso plus interest at the legal rate from February 22, 1988, the
date of the filing of the information. In addition to the foregoing, the accused was
also found guilty beyond reasonable doubt of the crime estafa.
PEOPLE V. ESPANOL
G.R. NO. 105676
APRIL 10, 1996
KAPUNAN, J.

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

On several occasions, complainants talked to the accused, who kept promising

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

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

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

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

Facts:
Accused FC Roxas, doing business under the name and style of FC Roxas
Construction, with office address at Rm. 212 Manufacturers Building, Sta Cruz,
Manila, was a licensed private recruitment entity (Service contractor) whose
authority was issued on February 20, 1984 and expired on March 25, 1988. (A
service contractor acts as the employer of its recruits with respect to projects it
contracted to service abroad).
As a service contractor, it is not allowed to charge, directly or indirectly, any fee
from the workers except the authorized documentation fee of P1,500.
During the period of January 1984 to july 1986, the accused FC Construtction Co.
demanded and received from its applicants, herein private complainants
numbering about 22, various sums of money ranging from P1,500 to P8,500 in
excess of the limits set forth by law. The complainants, furthermore, were not
able to work abroad, were no able to issue travel documents and despite efforts,
were not refunded the money paid to and received by the accused.

The accused Roxas did not deny the receipts covering the different sums of
money paid by the private complainants. He reasoned out that the amount paid
to and received by him were for “passporting and ticketing” of the private
complainants

Issue: Whether or not the accused is guilty of illegal recruitment.

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

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

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

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

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

Other complainants averred that they went to appellant’s house sometime in

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

Issue: whether or not Remullo is guilty of the crime charged against her.

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

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

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

In the face of evidence pointing to her wrongdoing, appellant only offers denials,
while pointing to an alleged ill motive on the part of private complainants that
prompted them to testify against her. According to appellant, private
complainants failed to find the responsible parties, namely Steven Mah and his
companion Lani Platon, and so are now going after her.
Appellant’s arguments fail to persuade us of her innocence. The defense of denial
is intrinsically weak, a self-serving negative evidence that cannot prevail over the
testimony of credible witnesses who testified on affirmative matter.
Anent appellant’s conviction for estafa in Criminal Cases Nos. 95-654 to 95-656,
we find no error committed by the trial court. Their conviction and sentence are
fully supported by the evidence on record. For charges of estafa to prosper, the
following elements must be present: (1) that the accused defrauded another by
abuse of confidence or by means of deceit, and (2) that damage or prejudice
capable of pecuniary estimation is caused to the offended party or third person.
In this case, appellant clearly defrauded private complainants by deceiving them
into believing that she had the power and authority to send them on jobs
abroad. By virtue of appellant’s false representations, private complainants each
parted with their hard-earned money. Each complainant paid P15,000 as
recruitment fee to appellant, who then appropriated the money for her own use
and benefit, but failed utterly to provide overseas job placements to the
complainants. In a classic rigmarole, complainants were provided defective
visas, brought to the airport with their passports and tickets, only to be offloaded
that day, but with promises to be booked in a plane flight on another day. The
recruits wait in vain for weeks, months, even years, only to realize they were
gypped, as no jobs await them abroad. No clearer cases of estafa could be
imagined than those for which appellant should be held criminally responsible.

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

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

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

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

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

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

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

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

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

Clearly, Samina Angeles defrauded complainants by falsely pretending to possess

the power and capacity to process their travel documents.

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

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

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

Raytheon Philippines, Inc. As such, his major duties were (1) plan, coordinate,
and carry out year-end physical inventory; (2) formulate and issue out hard
copies of standard product costing and other cost/pricing analysis if needed and
required; and set up the written cost accounting system for the whole company.
However, when the standard cost accounting system for Raytheon plans
worldwide was adopted and installed in the Philippine operations, the services of
the petitioner was reduced to only the submission of period reports that would
use computerized forms prescribed and designed by the international head office
of the company in California, USA.
On January 27, 1989, petitioner was told of the abolition of his position on the
ground of redundancy. He was constrained to file the complaint for illegal
dismissal after his request to have him transferred to another department was
denied. He also alleged that the functions of his position were absorbed by the
Payroll/MIS/Finance Department which is headed by a resident alien without
working permit from the DOLE.

ISSUE: Whether or not the termination of the petitioner on the ground of

redundancy was tainted with malice, bad faith and irregularity.

Held: Termination of an employee's services because of redundancy is governed

by Article 283 of the Labor Code which provides as follows:

Art. 283. Closure of establishment and reduction of personnel. — The employer

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

There is no dispute that petitioner was duly advised, one (1) month before, of the
termination of his employment on the ground of redundancy in a written notice
by his immediate superior
Raytheon had a broad latitude of discretion in abolishing his position. An
employer has a much wider discretion in terminating employment relationship of
managerial personnel compared to rank and file employees. The reason
obviously is that officers in such key positions perform not only functions which
by nature require the employer's full trust and confidence but also functions that
spell the success or failure of an enterprise.
Article 40 of the Labor Code which requires employment permit refers to non-
resident aliens. The employment permit is required for entry into the country for
employment purposes and is issued after determination of the non-availability of
a person in the Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is desired. Since Ang Tan
Chai is a resident alien, he does not fall within the ambit of the provision.
Finding no grave abuse of discretion on the part of the National Labor Relations
Commission in reversing and annulling the decision of the Labor Arbiter and that
on the contrary, the termination of petitioner's employment was anchored on a
valid and authorized cause under Article 283 of the Labor Code, the instant
petition for certiorari must fail.

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

85 PHIL 431
JANUARY 31, 1950
TUASON, J.

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

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

RULING:
Yes. Costs against petitioners. Ratio. An alien may question the constitutionality
of a statute (or court order) only when and so far as it is being, or is about to be,
applied to his disadvantage. (16 C.J.S. 157 et seq.) The prospective employees
whom the petitioner may contemplate employing have not come forward to seek
redress; their identity has not even been revealed. Clearly the petitioner has no
case in so far as it strives to protect the rights of others, much less others who are
unknown and undetermined. We are of the opinion that the order under
consideration meets the test of reasonableness and public interest. The passage of
Commonwealth Act No. 103 was "in conformity with the constitutional objective
and . . . the historical fact that industrial and agricultural disputes have given rise
to disquietude, bloodshed and revolution in our country." (Antamok Goldfields
Mining Co. vs. Court of Industrial Relations, 40 Off. Gaz., 8th Supp., 173.)
NITTO ENTERPRISES VS. NLRC AND R. CAPILI
G.R. NO. 114337
SEPT. 29, 1995
KAPUNAN, J.

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

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

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

FILAMER CHRISTIAN INSTITUTE VS. HON. INTERMEDIATE

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

FACTS: Daniel Funtecha was a working student of Filamer. He was assigned as

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

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

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

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

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

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

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

BROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILIPPINES

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

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

ISSUES: San Miguel refused to bargain with the petitioner union

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

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

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

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

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

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

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

petitioners and California Manufacturing Company

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

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

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

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

On November 24, 1961 the Tourist World Service, Inc. appears to have been
informed that Lina Sevilla was connected with a rival firm, the Philippine Travel
Bureau, and, since the branch office was anyhow losing, the Tourist World
Service considered closing down its office. On June 17,1963, appellant Lina
Sevilla refiled her case against the herein appellees and after the issues were
joined, the reinstated counterclaim of Segundina Noguera and the new complaint
of appellant Lina Sevilla were jointly heard following which the court ordered
both cases dismiss for lack of merit.
In her appeal, Lina Sevilla claims that a joint bussiness venture was entered into
by and between her and appellee TWS with offices at the Ermita branch office
and that she was not an employee of the TWS to the end that her relationship
with TWS was one of a joint business venture appellant made declarations.
ISSUE: Whether or not the padlocking of the premises by the Tourist World
Service, Inc. without the knowledge and consent of the appellant Lina Sevilla
entitled the latter to the relief of damages prayed for and whether or not the
evidence for the said appellant supports the contention that the appellee Tourist
World Service, Inc. unilaterally and without the consent of the appellant
disconnected the telephone lines of the Ermita branch office of the appellee
Tourist World Service, Inc.?

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

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

CONTINENTAL MARBLE CORPORATION VS. NLRC

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

FACTS: Private respondent Rodito Nasayao claimed that sometime in May 1974,
he was appointed plant manager of the petitioner corporation, with an alleged
compensation of P3,000.00, a month, or 25% of the monthly net income of the
company, whichever is greater, and when the company failed to pay his salary for
the months of May, June, and July 1974, Rodito Nasayao filed a complaint with
the National Labor Relations Commission, Branch IV, for the recovery of said
unpaid varies. Petitioners denied that Rodito Nasayao was employed in the
company as plant manager with a fixed monthly salary of P3,000.00. They
claimed that the undertaking agreed upon by the parties was a joint venture, a
sort of partnership, wherein Rodito Nasayao was to keep the machinery in good
working condition and, in return, he would get the contracts from end-users for
the installation of marble products, in which the company would not interfere. In
addition, private respondent Nasayao was to receive an amount equivalent to
25% of the net profits that the petitioner corporation would realize, should there
be any. Petitioners alleged that since there had been no profits during said
period, private respondent was not entitled to any amount.
The case was submitted for voluntary arbitration and the parties selected the
herein respondent Jose T. Collado as voluntary arbitrator. In the course of the
proceedings, however, the herein petitioners challenged the arbitrator’s capacity
to try and decide the case fairly and judiciously and asked him to desist from
further hearing the case.
But, the respondent arbitrator refused. In due time, or on 29 December 1975, he
rendered judgment in favor of the complainant, ordering the herein petitioners to
pay Rodito Nasayao the amount of P9,000.00, within 10 days from notice.

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

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

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

ENCYCLOPEDIA BRITANNICA INC. VS. NLRC

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

FACTS: Private respondent was a sales division manager of private petitioner

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

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

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

HELD: No. Control of employee’s conduct is commonly regarded as the most

crucial and determinative indicator of the presence or absence of an employer-
employee relationship. Under this, an employer-employee relationship exists
where the person for whom the services are performed reserves the right to
control not only the end to be achieved, but also the manner and means to be
used in reaching that end. The fact that petitioner issued memoranda to private
respondent and to other division sales managers did not prove that petitioner had
actual control over them. The different memoranda were merely guidelines on
company policies which the sales managers follow and impose on their respective
agents.

DY KEH BENG VS. INTERNATIONAL LABOR AND MARINE UNION

ET., AL.
G.R NO. L-32245
MAY 25, 1979
DE CASTRO, J.

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

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

petitioner Dy Keh Beng and respondents Solano and Tudla.

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

ZANOTTE SHOES VS. NLRC

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

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

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

petitioners and private respondents.

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

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

AIR MATERIAL WING SAVINGS AND LOAN ASSOCIATION INC., VS.

NLRC
G.R. NO. L -11870
JUNE 30, 1994
CONCEPCION, J.

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

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

company?

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

HYDRO RESOURCES CONTRACTORS CORP. VS. PAGALILAUAN

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

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

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

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

the petitioner corporation and Aban.

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

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

INSULAR ASSURANCE CO. VS. NLRC

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

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

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

Basiao and Insular Life?

HELD: The SC ruled in favor of Insular Life.

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

ANGELINA FRANCISCO VS. NLRC, KASEI CORP. ETC.

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

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

In 1996, Petitioner was designated as Acting Manager. She was assigned to

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

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

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

HELD:
Petitioner is an employee of Kasei Corporation.

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

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

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

OPULENCIA ICE PLANT VS. NLRC

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

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

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

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

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

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

DOMASIG VS. NLRC

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

FACTS:

Domasig filed a complained against CATA Garments Corporation for illegal

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

ISSUE:

Whether or not there exist an employee-employer relationship.

HELD:

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

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

FACTS:
Atty. Sadac was appointed as VP for the Legal Department of Equitable. Nine
lawyers, members of the said department, filed a letter-petition for Sadac’s
abusive conduct, mismanagement, ineffectiveness and indecisiveness. They
warned that they would resign en masse if Atty. Sadac were retained in his
position. The Board asked Sadac to voluntarily resign rather than conduct a
formal hearing to terminate him. Atty. Sadac filed a complaint for illegal
dismissal and damages.
ISSUE:
Whether or not there is employee-employer relationship.

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

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

ZAMUDIO VS. NLRC

G.R. NO. 76723
MARCH 25, 1990

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

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

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

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

PAGUIO VS. NLRC

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

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

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

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

GREAT PACIFIC LIFE ASSURANCE CORP. VS. JUDICO

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

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

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

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

HELD:
One salient point in the determination of employer-employee relationship which
cannot be easily ignored is the fact that the compensation that these agents on
commission received is not paid by the insurance company but by the investor (or
the person insured). The test is whether the “employer” controls or has reserved
the right to control the “employee” not only as to the result of the work to be done
but also as to the means and methods by which the same is to be accomplished.

The private respondent received a definite minimum amount per week as his
wage known as “sales reserve”. He was assigned a definite place in the office to
work on when he is not in the field; and in addition to his canvassing work he was
burdened with the job of collection. Conversely, he was promoted to Zone
Supervisor with additional allowance of a definite amount aside from the regular
weekly “allowance”. His contract of services was neither for a piece of work nor
for a definite period.

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

The appealed decision is AFFIRMED.

FEATI UNIVERSITY VS. HON. JOSE S. BAUTISTA AND FEATI

UNIVERSITY FACULTY CLUB
G.R. NO. L-21278
DECEMBER 27, 1966
ZALDIVAR, J.

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

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

HELD:
The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term
employer include any person acting in the interest of an employer, directly or
indirectly, but shall not include any labor organization (otherwise than when
acting as an employer) or any one acting in the capacity or agent of such labor
organization.
In this case, the University is operated for profit hence included in the term of
employer. Professors and instructors, who are under contract to teach particular
courses and are paid for their services, are employees under the Industrial Peace
Act.

Professors and instructors are not independent contractors. University controls

the work of the members of its faculty; that a university prescribes the courses or
subjects that professors teach, and when and where to teach; that the professors’
work is characterized by regularity and continuity for a fixed duration; that
professors are compensated for their services by wages and salaries, rather than
by profits; that the professors and/or instructors cannot substitute others to do
their work without the consent of the university; and that the professors can be
laid off if their work is found not satisfactory. All these indicate that the
university has control over their work; and professors are, therefore, employees
and not independent contractors.

The principal consideration in determining whether a workman is an employee

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

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

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

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

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

Consequently, the petitioners filed a complaint of unfair labor practice against

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

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

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

VILLAMARIA VS. CA AND BUSTAMANTE

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

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

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

HELD:
Yes. The juridical relationship of employer-employee between petitioner and
respondent was not negated by the foregoing stipulation in the Kasunduan,
considering that petitioner retained control of respondent’s conduct as driver of
the vehicle. Even if the petitioner was allowed to let some other person drive the
unit, it was not shown that he did so; that the existence of an employment
relation is not dependent on how the worker is paid but on the presence or
absence of control over the means and method of the work; that the amount
earned in excess of the “boundary hulog” is equivalent to wages; and that the fact
that the power of dismissal was not mentioned in the Kasunduan did not mean
Villamaria never exercised such power, or could not exercise such power. Hence,
the employer- employee relationship exists.

SY ET. AL., VS. HON. COURT OF APPEALS AND J. SAHOT

G.R. NO. 142293
FEBRUARY 27, 2003
QUIZUMBING, J.

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

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

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

The elements to determine the existence of an employment relationship are: (a)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Fundamental considerations of substantial justice persuade Us to decide the

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

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

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

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

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

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

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

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

questioned resolution of the National Labor Relations Commission dated May
30,1985 is hereby REVERSED and SET ASIDE. Private respondent is ordered to
reinstate petitioners to their former positions or any equivalent positions with 3-
year backwages and other monetary benefits under the law. No pronouncement
as to costs.
SO ORDERED.

MARAGUINOT AND P. ENERO VS NLRC AND VIVA FILMS

GR NO. 120969
JANUARY 22, 1998

FACTS:

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

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

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

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

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

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

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

Issues:

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

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

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

Held:

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

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

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

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

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

work on his own account under his own responsibility according to his own
manner and method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work except as to
the results thereof. The said producer has a fix time frame and budget to make
the movies.

b. The contractor should have substantial capital and materials necessary to

conduct his business. The said producer, Del Rosario, does not have his own
tools, equipment, machinery, work premises and other materials to make motion
pictures. Such materials were provided by VIVA.

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

ORLANDO FARM GROWERS ASSOCIATION/GLICERIO AÑOVER VS.

NLRC
GR NO. 129076
NOVEMBER 25, 1998

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

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

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

Ratio:
The law does not require an employer to be registered before he may considered
as one within the definition of the Labor Code.

Art 212 (e) of the Labor Code defines an employer as any person acting inthe
interest of an employer, directly or indirectly.
To determine the existence of employer – employee relationship (Filipinas
Broadcasting Network v. NLRC):1.The manner of selection and
engagement2.Payment of wages3.Presence or absence of the power
of dismissal4.Presence or absence of the power of control (most important
element. Evidence to support existence of employer – employee relationship.

During the subsistence of the association, several circulars andmemoranda

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

NATIONAL SUGAR REFINERIES CORP. VS. NLRC

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

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

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

Private respondent union represents the former supervisors of the NASUREFCO

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

On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program

affecting all employees, from rank-and-file to department heads which was
designed to rationalized the duties and functions of all positions, reestablish
levels of responsibility, and recognize both wage and operational structures. Jobs
were ranked according to effort, responsibility, training and working conditions
and relative worth of the job. As a result, all positions were re-evaluated, and all
employees including the members of respondent union were granted salary
adjustments and increases in benefits commensurate to their actual duties and
functions.
The Courts glean from the records that for about ten years prior to the JE
Program, the members of respondent union were treated in the same manner as
rank-and file employees. As such, they used to be paid overtime, rest day and
holiday pay pursuant to the provisions of Articles 87, 93 and 94 of the Labor
Code as amended. On May 11, 1990, petitioner NASUREFCO recognized herein
respondent union, which was organized pursuant to Republic Act NO. 6715
allowing supervisory employees to form their own unions, as the bargaining
representative of all the supervisory employees at the NASUREFCO Batangas
Sugar Refinery. Two years after the implementation of the JE Program,
specifically on June 20, 1990, the members of herein respondent union filed a
complainant with the executive labor arbiter for non-payment of overtime, rest
day and holiday pay allegedly in violation of Article 100 of the Labor Code.

Issue: Whether or not the members of respondent union are entitled to

overtime, rest day and holiday pay.

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

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

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

It is not disputed that the members of respondent union are supervisory

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

Article 82 of the Labor Code states: “The provisions of this title shall apply to
employees in all establishments and undertakings whether for profit or not, but
not to government employees, managerial employees, field personnel, members
of the family of the employer who are dependent on him for support, domestic
helpers, persons in the personal service of another, and workers who are paid by
results as determined by the Secretary of Labor in Appropriate regulations.”

As used herein, 'managerial employees' refer to those whose primary duty

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

In other words, for purposes of forming and joining unions, certification

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

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

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

PENARANDA VS. BAGANGA PLYWOOD CORP.

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

Facts: in June 1999, Petitioner Charlito Peñaranda was hired as an employee of

Baganga Plywood Corporation (BPC) to take charge of the operations and
maintenance of its steam plant boiler. In May 2001, Peñaranda filed a Complaint
for illegal dismissal with money claims against BPC and its general manager,
Hudson Chua, before the NLRC. Due to the fact that the parties failed to settle
amicably, the labor arbiter directed the parties to file their position papers.

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

"Upon the other hand, respondent [BPC] is a domestic corporation duly

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

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

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

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

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

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

AUTO BUS TRANSPORT SYSTEMS, INC., VS. BAUTISTA

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

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

Issue: Whether the private respondent is considered as field personel in which

case, he is exempted from incentive leave pay under Book III, Rule V, Section
1(d).

Held:
No.
According to the Implementing Rules, Service Incentive Leave shall not apply to
employees classified as "field personnel." The phrase "other employees whose
performance is unsupervised by the employer" must not be understood as a
separate classification of employees to which service incentive leave shall not be
granted. Rather, it serves as an amplification of the interpretation of the
definition of field personnel under the Labor Code as those "whose actual hours
of work in the field cannot be determined with reasonable certainty."8

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

Therefore, petitioner’s contention that respondent is not entitled to the grant of

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

As a general rule, [field personnel] are those whose performance of their

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

UNION OF FILIPINO EMPLOYEES VS VIVAR

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

Facts:

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

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

Issue:

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

Held:

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

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

SAN MIGUEL BREWERY V. DEMOCRATIC LABOR ORGANIZATION

8 SCRA 613
JULY 31, 1963

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

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

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

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

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

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

FACTS

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

ISSUE

Whether or not the claim of the plaintiffs-appellants for overtime compensation

under the Eight-Hour Labor Law is valid.

RULING

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

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

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

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

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision of

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

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

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

The watchmen are not entitled to night differential pay for past services, and
therefore the decision should be reversed with the respect thereto.
The petitioner has filed a present petition for certiorari.

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

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

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

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

FACTS:

Interphil Laboratories Employees Union-FFW is the sole and exclusive

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

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

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

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

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

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

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

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

"On 05 September 1995, Labor Arbiter Caday submitted his recommendation to

the then Secretary of Labor Leonardo A. Quisumbing.8Then Secretary
Quisumbing approved and adopted the report in his Order, dated 13 August 1997.

Hence, the present recourse where petitioner alleged

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

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

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

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

WHEREFORE, the petition is DENIED DUE COURSE and the 29 December

1999 decision of the Court of Appeals is AFFIRMED.SO ORDERED.

PAN AMERICAN WOLRD AIRWAYS SYSTEM VS. PAN AMERICAN

EMPLOYEES ASSOC.
G.R. NO.:L – 16275
FEBRUARY 23, 1961
J. REYES, J.B.L.

FACTS: Appeal by certiorari from the decision of the Court of Industrial

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

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

UNIVERSITY OF PANGASINAN FACULTY UNION V. UNIVERSITY OF

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

LABOR AND SOCIAL LEGISLATIONS; LABOR LAWS; PRESIDENTIAL

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

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

The petitioner’s members are full-time professors, instructors, and teachers of

respondent University. The teachers in the college level teach for a normal
duration of ten (10) months a school year, divided into two (2) semesters of five
(5) months each, excluding the two (2) months summer vacation. These teachers
are paid their salaries on a regular monthly basis.

In November and December, 1981, the petitioner’s members were fully paid their
regular monthly salaries. However, from November 7 to December 5, during the
semestral break, they were not paid their ECOLA. The private respondent claims
that the teachers are not entitled thereto because the semestral break is not an
integral part of the school year and there being no actual services rendered by the
teachers during said period, the principle of "No work, no pay" applies.

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

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

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

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

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

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

Finally, disposing of the respondent’s charge of petitioner’s lack of legal capacity

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

WHEREFORE the petition for certiorari is hereby GRANTED. The private

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

LUZON STEVEDORING CO. INC., VS. LUZON MARINE

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

Facts:

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

Issue:

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

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

CAGAMPAN, ET. AL. VS. NLRC

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

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

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

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

NATIONAL DEVELOPMENT COMPANY VS. CIR

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

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

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

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

SIME DARBY PILIPINAS INC. VS NLRC

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

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

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

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

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

MERCURY DRUG CO., INC., VS. DAYAO

G.R. NO. L-30452
SEPTEMBER 30, 1982
GUTIERREZ, JR., J.

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

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

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

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

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

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

PHILIPPINE NATIONAL BANK VS. PHILIPPINE NATIONAL BANK

EMPLOYEES ASSOCIATION (PEMA)
G.R. NO. L-30279
JULY 30, 1982
BARREDO, J.

FACTS: PNB and PNB Employees Association (PEMA) had a dispute regarding
the proper computation of overtime pay. PEMA wanted the cost of living
allowance (granted in 1958) and longevity pay (granted in 1961) to be included in
the computation. PNB disagreed and the 2 parties later went before the CIR to
resolve the dispute. CIR decided in favor of PEMA and held that PNB should
compute the overtime pay of its employees on the basis of the sum total of the
employee’s basic salary or wage plus cost of living allowance and longevity pay.
The CIR relied on the ruling in NAWASA v NAWASA Consolidated Unions, which
held that “for purposes of computing overtime compensation, regular wage
includes all payments which the parties have agreed shall be received during the
work week, including differentiated payments for working at undesirable times,
such as at night and the board and lodging customarily furnished the employee.”
This prompted PNB to appeal, hence this case.

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

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

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

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

As regards cost of living allowance, there is nothing in Commonwealth Act 444

[or “the 8-hour Labor Law,” now Art. 87 Labor Code] that could justify PEMA’s
posture that it should be added to the regular wage in computing overtime pay.
C.A. 444 prescribes that overtime work shall be paid “at the same rate as their
regular wages or salary, plus at least 25% additional.” The law did not define what
is a regular wage or salary. What the law emphasized is that in addition to
“regular wage,” there must be paid an additional 25% of that “regular wage” to
constitute overtime rate of pay. Parties were thus allowed to agree on what shall
be mutually considered regular pay from or upon which a 25% premium shall be
based and added to makeup overtime compensation.

No rule of universal application to other cases may be justifiably extracted from

the NAWASA case. CIR relies on the part of the NAWASA decision where the SC
cited American decisions whose legislation on overtime is at variance with the
law in this jurisdiction. The US legislation considers work in excess of forty hours
a week as overtime; whereas, what is generally considered overtime in the
Philippines is work in excess of the regular 8 hours a day. It is understandably
material to refer to precedents in the US for purposes of computing weekly wages
under a 40-hour week rule, since the particular issue involved in NAWASA is the
conversion of prior weekly regular earnings into daily rates without allowing
diminution or addition.

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

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

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

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

Disposition decision appealed from is REVERSED

NATIONAL WATERWORKS & SEWERAGE AUTHORITY VS. NWSA

CONSOLIDATED UNION, JESUS CENTENO, ET AL.,
G.R. NO. L-26894-96
FEBRUARY 28, 1969
FERNANDO, J.

Facts: Domingo, discharged the function of a supervisor. Likewise, coordinating

engineer, Zurban since September 13, 1955 until the date of his retirement was
corporate legal counsel, and Fabregas, was the chief of the administrative division
during the period of his claim were concerned. They were required to work
overtime but was not paid overtime pay, the peititioer contending that the fall
within the category “managerial employee” which is exempted from being paid of
overtime pay. The Court of Industrial Relations decided the case in their favour.

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

Held: No. "The most obvious distinction of a 'managerial employee' is his

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

DE LEON V PAMPANGA SUGAR DEVELOPMENT CO.

20 SCRA 628
SEPTEMBER 30, 1969
CASTRO, J.

Facts: The respondent Pampanga Sugar Development Company (PASUDECO)

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

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

JOSE RIZAL COLLEGE VS. NLRC AND NATOW

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

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

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

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

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

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

PREMISES CONSIDERED, the decision of respondent National Labor Relations

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

SAN MIGUEL CORPORATION V. COURT OF APPEALS ET AL

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

Facts:

The Department of Labor and Employment conducted a routine inspection in

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

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

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

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

It was said also that the The Court of Appeals did not err in sustaining
Undersecretary Español who stated: “Assuming arguendo that the respondent’s
position is correct, then by the same token, Muslims throughout the Philippines
are also not entitled to holiday pays on Christian holidays declared by law as
regular holidays. We must remind the respondent-appellant that wages and other
emoluments granted by law to the working man are determined on the basis of
the criteria laid down by laws and certainly not on the basis of the worker’s faith
or religion.”

INSULAR BANK OF ASIA AND AMERICA EMPLOYEE’S UNION VS.

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

FACTS:

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

Issue:

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

Held:

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

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

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

THE CHARTERED BANK EMPLOYEES ASSOCIATION

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

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

FACTS:

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

Issue:

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

Held:

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

CEZAR ODANGO VS. NLRC

G.R. NO. 147420
JUNE 10, 2004

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

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

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

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

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

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

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

UNION OF FILIPRO EMPLOYEES V. BENIGNO VIVAR, JR.

G.R. NO. 79255
JANUARY 20, 1992

Facts:

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.)

filed with the National Labor Relations Commission (NLRC) a petition for
declaratory relief seeking a ruling on its rights and obligations respecting claims
of its monthly paid employees for holiday pay in the light of the Court's decision
in
Chartered Bank Employees Association v Ople.

Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the
case for voluntary arbitration and appointed respondent Benigno Vivar, Jr. as
voluntary arbitrator. On January 2, 1980, Arbitrator Vivar rendered a decision
directing Filipro to pay its monthly paid employees holiday pay pursuant to
Article 94 of the Code, subject only to the exclusions and limitations specified in
Article 82 and such other legal restrictions as are provided for in the Code.

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

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

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

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

The respondent arbitrator's order to change the divisor from 251 to 261 days
would result in a lower daily rate which is violative of the prohibition on non-
diminution of benefits found in Article 100 of the Labor Code. To maintain the
same daily rate if the divisor is adjusted to 261 days, then the dividend, which
represents the employee's annual salary, should correspondingly be increased to
incorporate the holiday pay. There is thus no merit in respondent Nestle's claim
of overpayment of overtime and night differential pay and sick and vacation leave
benefits, the computation of which are all based on the daily rate, since the daily
rate is still the same before and after the grant of holiday pay.

Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to

its use of 251 days as divisor must fail in light of the Labor Code mandate that "all
doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations, shall be resolved in favor of labor." (Article
4). Nevertheless, in order to fully settle the issues, the Court resolved to take up
the matter of effectivity of the holiday pay award raised by Nestle.

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

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

WELLINGTON INVESTMENT AND MANUFACTURING

CORPORATION VS. TRAJANO, ET AL.
G.R. NO. 114698
JULY 3, 1995
NARVASA, CJ.

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

Officer, Wellington Flour Mills owned by the petitioner-company was found non-
payment of regular holidays falling on a Sunday for monthly-paid employees.
Wellington argued that the monthly-paid employees already includes holiday pay
for all regular holidays and there is no legal basis for the finding of alleged non-
payment of regular holidays falling on a Sunday. It further contends that it pays
its monthly paid employees a fixed monthly compensation using the “314 factor”
which undeniably covers and already includes payment for all the working days
in a month as well as all the 10 un-worked regular holidays within a year. The
Regional Director ordered the petitioner to pay the employees additional
compensation corresponding to 4 extra working days. However, the petitioner
argued that the company, using the “314 factor” already gave complete payment
of all compensation due to its workers. Petitioner appealed and was acted on by
the respondent Undersecretary. But still, Regional Director’s decision was
affirmed. Hence, this petition.
ISSUE: Whether or not a monthly-paid employees, receiving a fixed monthly
compensation, is entitled to an additional pay aside from his usual holiday pay
whenever a regular holiday falls on a Sunday.

HELD: Regional Director’s decision, affirmed by the Undersecretary, is nullified

and set aside. Every worker should be paid his regular daily wage during regular
holidays; except in retail and service establishments regularly employing less
than 10 workers, even if the worker does not work on these regular holidays. The
Wellington had been paying its employees a salary of not less than the statutory
minimum wage and that the monthly salary, thus, paid was not less than the
statutory minimum wage multiplied by 365 days divided by 12. Apparently the
monthly salary was fixed by Wellington to provide for compensation for every
working day of the year including holidays specified by law and excluding only
Sundays. Wellington leaves no day unaccounted for, it is paying for all the days of
a year with the exception only of 51 Sundays.

JOSE RIZAL COLLEGE VS. NLRC

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

FACTS
Petitioner is a non-stock, non-profit educational institution duly organized and
existing under the laws of the Philippines. It has three groups of employees
categorized as follows: (a) personnel on monthly basis, who receive their monthly
salary uniformly throughout the year, irrespective of the actual number of
working days in a month without deduction for holidays; (b) personnel on daily
basis who are paid on actual days worked and they receive unworked holiday pay
and (c) collegiate faculty who are paid on the basis of student contract hour.
Before the start of the semester they sign contracts with the college undertaking
to meet their classes as per schedule.
Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977,
private respondent National Alliance of Teachers and Office Workers (NATOW)
in behalf of the faculty and personnel of Jose Rizal College filed with the Ministry
of Labor a complaint against the college for said alleged non-payment of holiday
pay, docketed as Case No. R04-10-81-72. Due to the failure of the parties to settle
their differences on conciliation, the case was certified for compulsory
arbitration.
The Labor Arbiter rendered a decision that the faculty who are paid per student
compensation per student contract hour are not entitled to unworked regular
holiday pay. On appeal, respondent National Labor Relations Commission in a
decision promulgated on June 2, 1982, modified the decision appealed from, in
the sense that teaching personnel paid by the hour are declared to be entitled to
holiday pay.

ISSUE
Whether or not the school faculty who according to their contracts are paid per
lecture hour are entitled to unworked holiday pay.

RULING
Regular holidays specified as such by law are known to both school and faculty
members as no class days;" certainly the latter do not expect payment for said
unworked days, and this was clearly in their minds when they entered into the
teaching contracts. On the other hand, both the law and the Implementing Rules
governing holiday pay are silent as to payment on Special Public Holidays.
It is readily apparent that the declared purpose of the holiday pay which is the
prevention of diminution of the monthly income of the employees on account of
work interruptions is defeated when a regular class day is cancelled on account of
a special public holiday and class hours are held on another working day to make
up for time lost in the school calendar. Otherwise stated, the faculty member,
although forced to take a rest, does not earn what he should earn on that day. Be
it noted that when a special public holiday is declared, the faculty member paid
by the hour is deprived of expected income, and it does not matter that the school
calendar is extended in view of the days or hours lost, for their income that could
be earned from other sources is lost during the extended days. Similarly, when
classes are called off or shortened on account of typhoons, floods, rallies, and the
like, these faculty members must likewise be paid, whether or not extensions are
ordered.

BALTAZAR VS SAN MIGUEL INC.

G.R. NO. L-23076
FEBRUARY 27,1969
DIZON, J.

FACTS:
The petitioner is the salesman-in-charge of San Miguel Brewery, Inc. in
Dagupan warehouse with a monthly pay of P240.00, P5.00 per diem and a
commission of P0.75 per case sold. On October 9, 1956, 8 days after Baltazar
was appointed as the salesman-in-charge, the regular employees in
Dagupan warehousewent on strike because of unjust treatment. Baltazar was
recalled to appellants Manila Office on the 13th of October, 1956 upon theorder
of his superior and conduct an investigation. The investigationfound that the
employees’ grievances were well founded. The next day, the strikers returned to
their work voluntarily. On October 15, the petitioner was informed that he was
not to return to Dagupan anymore but he still reported to work at the main office
from October 16 to November 2, 1956 waiting for assignment. From November 3
to December 19 on the same year, he absented himself from work without
consent from his superiors and without advising them or anybody else of the
reason for his prolonged absence. He was dismissed from work because of
petitioner’s unauthorized absence and if the company would consider its health,
welfare and retirement plan requiring sick leave, still the petitioner did
inexcusable actions since sick leave, to be considered authorized and excusable,
must be certified to by the company physician and the appellant-company
informed that Baltazar was dismissed effective November 30, 1956. Baltazar
initiated a complaint which the trial court ruled that Baltazar’s dismissal was
justified but, however, ordering San Miguel Brewery Inc. to pay Baltazar one
month separation pay, plus the cash value of 6 months accumulated sick leave.

Issue:
Whether or not the petitioner is entitled to one month separation pay and the
cash value of 6 months accumulated sick leave.

Held:
No, the petitioner is not entitled to one month separation pay and the cash value
of 6 months accumulated sick leave. Under the Marcaida vs. Philippine
Education Company 53 O.G. No. 23, RA 1052 makes reference to termination of
employment, instead of dismissal, to exclude employees separated from the
service for causes attributable to their own fault. It is limited in its operation, to
cases of employment without definite period. When the employment is for a fixed
duration, the employer may terminate it even before the expiration of a stipulated
period, should there be a substantial breach of obligations by the employee; in
which event the latter is not entitles to advance notice or separation pay. it would
patently, be absurd to grant a right thereto to an employee guilty of the same
breach of obligation, when the employment is without a definite period, as if he
were entitled to greater protection than employees engaged for a fixed duration.
In connection with the question of whether or not petitioner is entitled to the
cash value of 6 months accumulated sick leave, it appears that while under the
last paragraph of Article 5 of appellant’s Rules and Regulations of Health,
Welfare and Retirement Plan, unused sick leave may be accumulated up to a
maximum of 6 months, the same is not commutable or payable in cash upon the
employees’ option.

KWOK VS. PHILIPPINE CARPET MANUFACTURING CORPORATION

G.R. NO. 149252
APRIL 28, 2005
CALLEJO, SR., J.

FACTS:
Petitioner filed a complaint against the respondent corporation for the recovery
of accumulated vacation and sick leave credits before the NLRC. Petitioner clung
to the verbal contract with Mr. Lim, the President of the respondent corporation
and his father-in-law for his claims. Petitioner obtained favorable judgment. In
their appeal, respondent averred that the position the petition held was not
entitled cash conversions of vacation and sick leave credits. The decision of the
Labor Arbiter was reversed. The Court of Appeals affirmed the reversed decision.

Issue:
Whether the verbal contract in favor of petitioner is valid.

Held:
No. It is true that for a contract to be binding on the parties thereto, it need not
be in writing unless the law requires that such contract be in some form in order
that it may be valid or enforceable or that it be executed in a certain way, in which
case that requirement is absolute and independent. (Art. 1356, NCC) But the
court disbelieved petitioner’s testimony and gave credence and probative weight
to the collective testimonies of the employees and officers of the respondent
corporation, including Mr. Lim, whom the petitioner presented as a hostile
witness. Even assuming that the petitioner was entitled of such benefits, there
was no record to show the record of absences to arrive at the actual number of
leave credits. There was no conformity of such agreement with the Board and if
so, such claim was already barred by prescription under Article 291 of the Labor
Code.

SONGCO, ET AL. VS. NATIONAL LABOR RELATIONS COMMISSION

G.R. NO. L-50999
MARCH 23, 1990
MEDIALDEA, J.

FACTS: Zuelig filed an application for clearance to terminate the services of

Songco, and others, on the ground of retrenchment due to financial losses.
During the hearing, the parties agreed that the sole issue to be resolved was the
basis of the separation pay due. The salesmen received monthly salaries of at
least P400.00 and commission for every sale they made.

The Collective Bargaining Agreements between Zuelig and the union of which
Songco, et al. were members contained the following provision: "Any employee
who is separated from employment due to old age, sickness, death or permanent
lay-off, not due to the fault of said employee, shall receive from the company a
retirement gratuity in an amount equivalent to one (1) month's salary per year of
service."

The Labor Arbiter ordered Zuelig to pay Songco et al., separation pay equivalent
to their one month salary (exclusive of commissions, allowances, etc.) for every
year of service with the company.

The National Labor Relations Commission sustained the Arbiter.

ISSUE: Whether or not earned sales commissions and allowances should be

included in the monthly salary of Songco, et al. for the purpose of computing
their separation pay.
RULING:

In the computation of backwages and separation pay, account must be taken not
only of the basic salary of the employee, but also of the transportation and
emergency living allowances.

Even if the commissions were in the form of incentives or encouragement, so that

the salesman would be inspired to put a little more industry on jobs particularly
assigned to them, still these commissions are direct remunerations for services
rendered which contributed to the increase of income of the employee.
Commission is the recompense compensation or reward of an agent, salesman,
executor, trustee, receiver, factor, broker or bailee, when the same is calculated as
a percentage on the amount of his transactions or on the profit to the principal.
The nature of the work of a salesman and the reason for such type of
remuneration for services rendered demonstrate that commissions are part of
Songco, et al's wage or salary.

The Court takes judicial notice of the fact that some salesmen do not receive any
basic salary, but depend on commissions and allowances or commissions alone,
although an employer-employee relationship exists.

STATES MARINE CORPORATION vs. CEBU SEAMEN'S

ASSOCIATION, INC.

FACTS
Petitioners States Marine Corporation and Royal Line, Inc. were engaged in the
business of marine coastwise transportation, employing therein several
steamships of Philippine registry. They had a collective bargaining contract with
the respondent Cebu Seamen's Association, Inc. On September 12, 1952, the
respondent union filed with the Court of Industrial Relations (CIR), a petition
(Case No. 740-V) against the States Marine Corporation, later amended on May
4, 1953, by including as party respondent, the petitioner Royal Line, Inc. The
Union alleged unfair labor practices which includes non-payment of overtime
pay, sick leave, vacation leave, reduction of salaries, requirement of payment of
P.40 per meal when employees are on board their vessels and illegal dismissal for
Captain Asensi. Petitioner claim that very much below 30 members were
members of the said union and they cannot be held liable as there is no law which
provides for the payment of sick leave or vacation leave to employees or workers
of private firms. With the payment of meals, they claimed that the Congress had
in mind that the amount of P.40 per meal, furnished the employees should be
deducted from the daily wages. And no illegal dismissal happened to Captain
Asensi as such had his working contract ended. A decision was rendered on
February 21, 1957 in favor of the respondent union. The motion for
reconsideration thereof, having been denied, the companies filed the present writ
of certiorari, to resolve legal question involved.
Issue
Whether or not States Marine Corporation and Royal Line, Inc is liable for the
following unfair labor practices against the respondent union

Ruling
"Supplements", constitute extra remuneration or special privileges or benefits
given to or received by the laborers over and above their ordinary earnings or
wages. "Facilities", on the other hand, are items of expense necessary for the
laborer's and his family's existence and subsistence so that by express provision
of law (Sec. 2[g]), they form part of the wage and when furnished by the employer
are deductible therefrom, since if they are not so furnished, the laborer would
spend and pay for them just the same. Meals were freely given to crew members
prior to August 4, 1951, while they were on the high seas "not as part of their
wages but as a necessary matter in the maintenance of the health and efficiency
of the crew personnel during the voyage", the deductions therein made for the
meals given after August 4, 1951, should be returned to them, and the operator of
the coastwise vessels affected should continue giving the same benefit..

When the work is not continuous, the time during which the laborer is not
working and can leave his working place and can rest completely shall not be
counted", find no application in his case. Petitioner should be bound to pay
overtime pay for hours beyond 8 hours of work

Considering, however, that Captain Asensi had been laid-off for a long time and
that his failure to report for work is not sufficient cause for his absolute dismissal,
respondents are hereby ordered to reinstate him to his former job without back
salary but under the same terms and conditions of employment existing prior to
his lay-off, without loss of seniority and other benefits already acquired by him
prior to March 20, 1952.

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS VS. HON.

LEONARDO QUISUMBING, ET AL.
G.R. NO. 128845
JUNE 1, 2000
KAPUNAN, J.
Facts: Private respondent International School, Inc. (the School, for short),
pursuant to Presidential Decree 732, is a domestic educational institution
established primarily for dependents of foreign diplomatic personnel and other
temporary residents.1 To enable the School to continue carrying out its
educational program and improve its standard of instruction, Section 2(c) of the
same decree authorizes the School to employ its own teaching and management
personnel selected by it either locally or abroad, from Philippine or other
nationalities, such personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have been or will be
enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its
faculty, classifying the same into two: (1) foreign-hires and (2) local-hires.
The School grants foreign-hires certain benefits not accorded local-hires
includeing housing, transportation, shipping costs, taxes, and home leave travel
allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%)
more than local-hires. The School justifies the difference on two "significant
economic disadvantages" foreign-hires have to endure, namely: (a) the
"dislocation factor" and (b) limited tenure. The School explains:

When negotiations for a new collective bargaining agreement were held on June
1995, petitioner International School Alliance of Educators, "a legitimate labor
union and the collective bargaining representative of all faculty members"4 of the
School, contested the difference in salary rates between foreign and local-hires.

On September 7, 1995, petitioner filed a notice of strike. DOLE Acting Secretary,

Crescenciano B. Trajano, issued an Order resolving the parity and representation
issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing
subsequently denied petitioner's motion for reconsideration in an Order dated
March 19, 1997.

Petitioner now seeks relief in this Court.

Issue: Whether the principle of “equal pay for equal work” shall be applied in the
case at bar.

Held: Yes.
School contends that petitioner has not adduced evidence that local-hires
perform work equal to that of foreign-hires. The Court finds this argument a
little cavalier. If an employer accords employees the same position and rank, the
presumption is that these employees perform equal work. This presumption is
borne by logic and human experience. If the employer pays one employee less
than the rest, it is not for that employee to explain why he receives less or why the
others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the
employee is treated unfairly. The employer in this case has failed to discharge this
burden. There is no evidence here that foreign-hires perform 25% more
efficiently or effectively than the local-hires. Both groups have similar functions
and responsibilities, which they perform under similar working conditions. The
School cannot invoke the need to entice foreign-hires to leave their domicile to
rationalize the distinction in salary rates without violating the principle of equal
work for equal pay. Salary means a recompense or consideration made to a
person for his pains or industry in another man's business. Whether it be derived
from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it
carries with it the fundamental idea of compensation for services rendered. While
we recognize the need of the School to attract foreign-hires, salaries should not be
used as an enticement to the prejudice of local-hires. The local-hires perform the
same services as foreign-hires and they ought to be paid the same salaries as the
latter. For the same reason, the "dislocation factor" and the foreign-hires' limited
tenure also cannot serve as valid bases for the distinction in salary rates. The
dislocation factor and limited tenure affecting foreign-hires are adequately
compensated by certain benefits accorded them which are not enjoyed by local-
hires, such as housing, transportation, shipping costs, taxes and home leave
travel allowances. The Constitution enjoins the State to "protect the rights of
workers and promote their welfare," "to afford labor full protection." The State,
therefore, has the right and duty to regulate the relations between labor and
capital.

CEBU INSTITUTE OF TECHNOLOGY (CIT) VS. HON. BLAS OPLE

G.R. NO. L-58870
DECEMBER 18, 1987
CORTES, J.

FACTS:
The case was originated from a complaint filed with the Regional Office No. VII
of the Ministry of Labor on February 11, 1981 against petitioner Cebu Institute of
Technology (CIT) by private respondents, Panfilo Canete, et al., teachers of CIT,
for non-payment of: a) cost of living allowances (COLA) under Pres. Dec. Nos.
525, 1123, 1614, 1678 and 1713, b) thirteenth (13th) month pay differentials and c)
service incentive leave. By virtue of an Order issued by the then Deputy Minister
of Labor Carmelo C. Noriel, a labor-management committee composed of one
representative each from the Ministry of Labor and Employment (MOLE), the
Minister of Education, Culture and Sports (MECS), and two representatives each
from CIT and from the teachers was created. Said committee was to ascertain
compliance with the legal requirements for the payment of COLA, thirteenth
(13th) month pay and service incentive leave.
On September 29, 1981 the Ministry of labor and employment ordered the CIT
pay its teaching staff their COLA and Service incentive leave and further directed
to integrate into the basic salaries of its teachers.

Issue:
WON the claimed of the petitioner that the payment of COLA by way of salary
increases is in line with Pres. Dec. No. 451 and that the payment of the thirteenth
month pay to its employees was exempt from the payment of service incentive
leave to its teachers who were employed on contract basis.

Ruling:
The Order of respondent Minister of Labor and Employment dated September
29, 1981 is sustained insofar as it ordered petitioner Cebu Institute of Technology
to pay its teaching staff the following:

Cost of living allowance under Pres. Dec.Nos.525 and 1123 from February 1978
up to 1981;

Cost of living allowance under Pres. Dec. Nos. 1614, 1634, 1678 and 1713; and
Service incentive leave due them from 1978.

ASOK BIG WEDGE MINING CO. INC V ASOK BIG WEDGE MUTUAL
BENEFIT ASSOCIATION
G.R. L-3276
MARCH 3, 1953

Facts: On September 4, 1950, demand was submitted to petitioner by

respondent union through its officers for various concession, among which were
(a) an increase of P0.50 in wages, (b) commutation of sick and vacation leave if
not enjoyed during the year, (c) various privileges, such as free medical care,
medicine, and hospitalization, (d) right to a closed shop, check off, etc., (e) no
dismissal without prior just cause and with a prior investigation, etc. Some of the
demands, were granted by the petitioner, and the other were rejected, and so
hearings were held and evidence submitted on the latter. After the hearing the
respondent court rendered a decision, the most important provisions of which
were those fixing the minimum wage for the laborers at P3.20, declaring that
additional compensation representing efficiency bonus should not be included as
part of the wage.

Issue: Whether or not additional compensation representing efficiency bonus

should not be part of the minimum wage, and the wage increase is valid?

Held: Yes, that the P3 minimum wage fixed in the law is still far below what is
considered a fair and just minimum is shown by the fact that this amount is only
for the year after the law takes effect, as thereafter the law fixes it at P4. Neither
may it be correctly contended that the demand for increase is due to an alleged
pernicious practice. Frequent demands for increase are indicative of a healthy
spirit of wakefulness to the demands of a progressing and an increasingly more
expensive world. We, therefore, find no reason or ground for disturbing the
finding contained in the decision fixing the amount of P3.20 as the minimum
wage. if it is an additional compensation which the employer promised and
agreed to give without any conditions imposed for its payment, such as success of
business or greater production or output, then it is part of the wage. But if it is
paid only if profits are realized or a certain amount of productivity achieved, it
cannot be considered part of the wages. In the case at bar, it is not payable to all
but to laborers only. It is also paid on the basis of actual production or actual
work accomplished. If the desired goal of production is not obtained or the
amount of actual work accomplished, the bonus does not accrue. It is evidence
that under the circumstances it is paid only when the labor becomes more
efficient or more productive. It is only an inducement for efficiency, a prize there
for, not a part of the wage.

DE RACHO VS. MUNICIPALITY OF ILIGAN

G.R. NO. L-23542
JANUARY 2, 1968
BENGZON, J.P., J.

FACTS:
Plaintiff Juana T. Vda. de Racho and the decedent, Manuel Racho, were spouses
and had five minor children. On July 1, 1954 the decedent was appointed as
market cleaner in the Municipality of Ilagan, Isabela, at the rate of P660.00 per
annum (P55.00 monthly) which amount he received up to June 30, 1958. On July
1, 1958, decedent's salary was increased to P720.00 per annum (P60.00 monthly)
by virtue of a promotional appointment extended to him by the Municipal Mayor.
Decedent was then paid the money value of his accumulated leaves. Decedent
died intestate at Ilagan. Plaintiff then filed on December 9, 1960 a claim for
salary differentials with the Regional Office of the Department of Labor, which
dropped the case later for lack of jurisdiction. Based on the foregoing facts, the
Court of First Instance of Isabela ruled that defendant Municipality of Ilagan
must pay P1,766.00 to plaintiff representing the wage differentials and adjusted
terminal leave of the decedent from December 9, 1957 to May 23, 1960, based on
the monthly wage rate of P120.00 pursuant to the Minimum Wage Law.

ISSUE:
Whether or not the shortage and lack of available funds and expected revenue of
a municipality validly exempt from complying with the Minimum Wage Law.

HELD:
The appealed judgment is affirmed. Lack of funds of a municipality does not
excuse it from paying the statutory minimum wages to its employees, which, after
all, is a mandatory statutory obligation of the municipality. To uphold such
defense of lack of available funds would render the Minimum Wage Law futile
and defeat its purpose. This also disposes of the implication appellant is trying to
make that its duty to pay minimum wages is not a statutory obligation which
would command preference in the municipal budget and appropriation
ordinance.

Moreover, we cannot sanction appellant's proposition that it would eventually

and gradually implement the Minimum Wage Law, "if and when its revenues can
afford." The law — insofar as it affects government employees — took effect in
1952. It should have been implemented — or at least steps to implement it should
have been taken — right then. To excuse the defendant municipality now would
be to permit it to benefit from its non-feasance. It would also make the effectivity
of the law dependent upon the will and initiative of said municipality without
statutory sanction. Defendant's remedy, therefore, is not to seek an excuse from
implementing the law but, as the lower court suggested, to upgrade and improve
its tax collection machinery with a view towards realizing more revenues. Or, it
could for the present forego all non-essential expenditures.

PLANAS COMMERCIAL V. NLRC, A. OFIALDA, ET AL

NOV. 11, 2005
G.R. NO. 144619

FACTS:
In September 1993, Morente, Allauigan and Ofialda and others filed a complaint
for underpayment of wages, non payment of overtime pay, holiday pay, service
incentive leave pay, and premium pay for rest day and holiday and night shift
differential against petitioners in the Arbitration Branch of NLRC. It alleged that
Cohu is engaged in the business of wholesale of plastic products and fruits of
different kinds with more than 24 employees. Respondents were hired on
January 1990, May 1990 and July 19991 as laborers and were paid below the
minimum wage for the past 3 years. They were required to work for more than 8
hours a day and never enjoyed the minimum benefits. Petitioners filed their
comment stating that the respondents were their helpers. The Labor Arbiter
rendered a decision dismissing the money claims. Respondents filed an appeal
with the NLRC where it granted the money claims of Ofialda, Morente and
Allaguian. Petitioners appealed with the CA but it was denied. It said that the
company having claimed of exemption of the coverage of the minimum wage
shall have the burden of proof to the claim. In the present petition, the
Petitioners insist that C. Planas Commercial is a retail establishment principally
engaged in the sale of plastic products and fruits to the customers for personal
use, thus exempted from the application of the minimum wage law; that it merely
leases and occupies a stall in the Divisoria Market and the level of its business
activity requires and sustains only less than ten employees at a time. Petitioners
contend that private respondents were paid over and above the minimum wage
required for a retail establishment, thus the Labor Arbiter is correct in ruling that
private respondents’ claim for underpayment has no factual and legal basis.
Petitioners claim that since private respondents alleged that petitioners employed
24 workers, it was incumbent upon them to prove such allegation which private
respondents failed to do.

Issue:
Whether or not petitioner is exempted from the application of minimum wage
law

Held:
The contention of the petitioners that they are exempted by the law must be
proven. The petitioners have not successfully shown that they had applied for the
exemption. R.A. No. 6727 known as the Wage Rationalization Act provides for
the statutory minimum wage rate of all workers and employees in the private
sector. Section 4 of the Act provides for exemption from the coverage, thus: Sec.
4. (c) Exempted from the provisions of this Act are household or domestic
helpers and persons employed in the personal service of another, including
family drivers. Also, retail/service establishments regularly employing not more
than ten (10) workers may be exempted from the applicability of this Act upon
application with and as determined by the appropriate Regional Board in
accordance with the applicable rules and regulations issued by the Commission.
Whenever an application for exemption has been duly filed with the appropriate
Regional Board, action on any complaint for alleged non-compliance with this
Act shall be deferred pending resolution of the application for exemption by the
appropriate Regional Board. In the event that applications for exemptions are not
granted, employees shall receive the appropriate compensation due them as
provided for by this Act plus interest of one percent (1%) per month retroactive to
the effectivity of this Act. Clearly, for a retail/service establishment to be
exempted from the coverage of the minimum wage law, it must be shown that the
establishment is regularly employing not more than ten (10) workers and had
applied for exemptions with and as determined by the appropriate Regional
Board in accordance with the applicable rules and regulations issued by the
Commission.

DAVAO INTEGRATED PORT STEVEDORING SERVICES VS. RUBEN

ABARQUEZ
G.R. NO. 102132
MARCH 19, 1993
ROMERO, J.

Facts:
Petitioner-company and respondent-union entered into a collective bargaining
agreement which includes provisions on sick leave with pay benefits each year to
employees who have rendered at least one year of service with the former.
Unused sick leaves shall then be converted into cash by the end of the year. Said
CBA provision covers both intermittent and non-intermittent employees but with
differences in the manner of computing the pay. Upon renewing the CBA, the
petitioner-company’s new assistant manager discontinued the intermittent
employee’s unused sick leave cash conversion on the basis that the last sentence
of the CBA disqualifies them to enjoy such benefits. Further, said assistant
manager stated that his predecessor committed a wrongfully understood and
applied the said CBA. Eventually, Voluntary Arbitrator Ruben Abarquez decided
on the matter and ruled in favor of the respondent-union. Petitioner-company
disagreed with Abarquez.
Issue:
Whether or not petitioner-company has the right to remove the existing benefits
of the employees?

Ruling:
No. The Supreme Court finds two applicable legal basis: (1) the essence of the
terms and conditions of a CBA which is more than regular contract but which is
the law that regulates the relationship between labor and capital. It is impressed
with public interest which requires it to yield to the common good; (2) Article 100
of the Labor Code which prohibits the construction of labor provision which
would lead to the elimination, or in any way diminution of the supplements or
other employee benefits.

In the instant case, and after careful scrutiny of the CBA between the parties, it
was clarified that the cash conversion of the unused sick leaves are applicable to
employees who have complied with the following requirements: (1) the employee
should be regular and at least rendered one year of service with the company; and
(2) said claim should be certified by a company-designated physician. From the
said requirements, it is quite obvious that both intermittent and non-intermittent
employees could qualify to receive the unused sick leaves as long as they have met
the requirements of the CBA. The contention of the petitioner-company, as to the
last sentence of the CBA, only applies to those employees who have not
successfully satisfied the said provisions above.
Therefore, the Court dismissed the petition and affirmed the decision of
Abarquez.

NESTLÉ PHILIPPINES, INC. VS. NLRC

G.R. NO. 91231
FEBRUARY 4, 1991
GRIÑO-AQUINO, J.

FACTS:
Nestlé Philippines, Inc., by this petition for certiorari, seeks to annul, on the
ground of grave abuse of discretion, the decision dated August 8, 1989 of the
National Labor Relations Commission (NLRC), Second Division, in Cert. Case
No. 0522 entitled, "In Re: Labor Dispute of Nestlé Philippines, Inc." insofar as it
modified the petitioner's existing non-contributory Retirement Plan.
Four (4) collective bargaining agreements separately covering the petitioner's
employees in its:

Alabang/Cabuyao factories;
Makati Administration Office. (Both Alabang/Cabuyao factories and Makati
office were represented by the respondent, Union of Filipro Employees [UFE]);
Cagayan de Oro Factory represented by WATU; and
Cebu/Davao Sales Offices represented by the Trade Union of the Philippines and
Allied Services (TUPAS),
all expired on June 30, 1987.
Thereafter, UFE was certified as the sole and exclusive bargaining agent for all
regular rank-and-file employees at the petitioner's Cagayan de Oro factory, as
well as its Cebu/Davao Sales Office.
In August, 1987, while the parties, were negotiating, the employees at Cabuyao
resorted to a "slowdown" and walk-outs prompting the petitioner to shut down
the factory. Marathon collective bargaining negotiations between the parties
ensued.
On September 2, 1987, the UFE declared a bargaining deadlock. On September 8,
1987, the Secretary of Labor assumed jurisdiction and issued a return to work
order. In spite of that order, the union struck, without notice, at the
Alabang/Cabuyao factory, the Makati office and Cagayan de Oro factory on
September 11, 1987 up to December 8, 1987. The company retaliated by
dismissing the union officers and members of the negotiating panel who
participated in the illegal strike. The NLRC affirmed the dismissals on November
2, 1988.

On January 26, 1988, UFE filed a notice of strike on the same ground of CBA
deadlock and unfair labor practices. However, on March 30, 1988, the company
was able to conclude a CBA with the union at the Cebu/Davao Sales Office, and
on August 5, 1988, with the Cagayan de Oro factory workers. The union assailed
the validity of those agreements and filed a case of unfair labor practice against
the company on November 16, 1988.

After conciliation efforts of the National Conciliation and Mediation Board

(NCMB) yielded negative results, the dispute was certified to the NLRC by the
Secretary of Labor on October 28, 1988.
After the parties had filed their pleadings, the NLRC issued a resolution on June
5, 1989, whose pertinent disposition regarding the union's demand for
liberalization of the company's retirement plan for its workers, provides as
follows:
xxx xxx xxx
Retirement Plan
The company shall continue implementing its retirement plan modified as
follows:
for fifteen years of service or less — an amount equal to 100% of the employee's
monthly salary for every year of service;
more than 15 but less than 20 years — 125% of the employee's monthly salary for
every year of service;
20 years or more — 150% of the employee's monthly salary for every year of
service. (pp. 58-59,Rollo.)

Both parties separately moved for reconsideration of the decision.

On August 8, 1989, the NLRC issued a resolution denying the motions for
reconsideration. With regard to the Retirement Plan, the NLRC held:
Anent management's objection to the modification of its Retirement Plan, We
find no cogent reason to alter our previous decision on this matter.

While it is not disputed that the plan is non-contributory on the part of the
workers, tills does not automatically remove it from the ambit of collective
bargaining negotiations. On the contrary, the plan is specifically mentioned in the
previous bargaining agreements (Exhibits "R-1" and "R-4"), thereby integrating
or incorporating the provisions thereof to the agreement. By reason of its
incorporation, the plan assumes a consensual character which cannot be
terminated or modified at will by either party. Consequently, it becomes part and
parcel of CBA negotiations.

However, We need to clarify Our resolution on this issue. When we increased the
emoluments in the plan, the conditions for the availment of the benefits set forth
therein remain the same. (p. 32, Rollo.)

On December 14, 1989, the petitioner filed this petition for certiorari,

ISSUE:
1 Whether or not the retirement plan being non-contributory,a non-issue in the
CBA negotiations?
2 Whether or not there was a grave abuse of discretion on the part of the NLRC in
resolving the issue?

HELD:
1 Since the retirement plan has been an integral part of the CBA since 1972, the
Union's demand to increase the benefits due the employees under said plan, is a
valid CBA issue. The deadlock between the company and the union on this issue
was resolvable by the Secretary of Labor, or the NLRC, after the Secretary had
assumed jurisdiction over the labor dispute (Art. 263, subparagraph [i] of the
Labor Code).
2 The NLRC's resolution of the bargaining deadlock between Nestlé and its
employees is neither arbitrary, capricious, nor whimsical. The benefits and
concessions given to the employees were based on the NLRC's evaluation of the
union's demands, the evidence adduced by the parties, the financial capacity of
the Company to grant the demands, its longterm viability, the economic
conditions prevailing in the country as they affect the purchasing power of the
employees as well as its concommitant effect on the other factors of production,
and the recent trends in the industry to which the Company belongs (p.
57, Rollo). Its decision is not vitiated by abuse of discretion.

R. TIANGCO AND V. TIANGCO V. HON. VICENTE LEOGARDO, JR.

G.R. NO. L-57636
MAY 16, 1983
CONCEPCION, JR., J.

Facts:
Petitioner R. Tiangco was a fishing operator engaged in deep-sea fishing while V.
Tiangco was a fishbroker.

Mr. Ilustrisimo and 26 others were batillios engaged by petitioners to unload

fishcatch from the vessels and take them to the fish stall. The work of these
batillios was limited to days of arrival of the fishing vessels, hence, they work only
a few days in a month averaging 4 hours a day.

In April 1980, Mr. Illustrisimo, and others filed a complaint against the Tiangcos
for (1) nonpayment of legal holiday pay, (2) service incentive leave pay, as well as
(3) underpayment of emergency cost-of-living allowances [ECOLA] which used to
be paid in full irrespective of their work days.

The Tiangcos denied the laborers; contentions. But as regards the claim for
emergency allowance differentials, they admitted that they discontinued their
practice of paying a fixed monthly allowance, and allowances for nonworking
days. They invoked the principle of “No work, no pay.”

Ruling:

The workers’ claim is valid. Since the Tiangcos had been paying the workers a
fixed monthly emergency allowance since November 1976 to February 1980, as a
matter of practice and/or verbal agreement between the parties, the
discontinuance of the practice and/or verbal agreement between the petitioners
and the private respondents contravened the provisions of the Labor Code,
particularly Article 100. It prohibits the elimination or diminution of existing
benefits such as the ECOLA. [Note that the monthly allowance was initiated in
November 1976, two years after the Labor Code was promulgated in 1974.]

Section 15 of the rules on P.D. No. 525 and Sec. 16 of the rules on P.D. No. 1123
also prohibit the diminution of any benefit granted to the employees under
existing laws, agreements and voluntary employer practice.

GLOBE MACKAY CABLE AND RADIO CORPORATION VS. NLRC,FFW

G.R. NO. 74156
JUNE 29, 1988
MELENCIO-HERRERA, J.,

FACTS: Wage Order No. 6 increased the cost-of -living allowance of non-
Agricultural workers in the private sector. Petitioner corporation (GMCR)
complied with the said Wage Order by paying its monthly-paid employees the
mandated P3.00 per day COLA. However, in computing said COLA, GMCR
multiplied the P3.00 daily COLA by 22days, which is the number of working days
in the company.
Respondent Union disagreed with the computation of the monthly COLA
claiming that the daily COLA rate of P3.00 should be multiplied by 30 days to
arrive at the monthly COLA rate. The union alleged furthermore that prior to the
effectivity of Wage Order No. 6, GMCR had been computing and paying the
monthly COLA on the basis of thirty (30) days per month and that this
constituted an employer practice, which should not be unilaterally withdrawn.

ISSUE: Whether or not petitioner, in computing COLA based on the number of

working days of the company , violated Article100 of the Labor Code of the
Philippines

HELD: There is no violation of Article 100 of the Labor Code on prohibition of

wage diminution. The primordial consideration for entitlement to COLA is that
basic wage is being paid. In other words, the payment of COLA is mandated only
for the days that the employees are paid their basic wage, even if said days are un
worked. So that, on the days that employees are not paid their basic wage, the
payment of COLA is not mandated. Peculiar to this case, however, is the
circumstance that pursuant to the Collective Bargaining Agreement (CBA)
between Petitioner and Respondent Union, the monthly basic pay is computed on
the basis of five (5) days a week, or twenty two(22) days a month. In determining
the hourly rate of monthly paid employees for purposes of computing overtime
pay, the monthly wage is divided by the number of actual work days in a month
and then, by eight (8) working hours. If a monthly-paid employee renders
overtime work, he is paid his basic salary rate plus one-half thereof. Thus, where
the company observes a 5-day work week, it will have to be held that the COLA
should be computed on the basis of twenty two (22) days, which is the period
during which the employees of petitioner receive their basic wage. The CBA is the
law between the parties and, if not acceptable, can be the subject of future re-
negotiation.

Payment in full by petitioner of the COLA before the execution of the CBA
incompliance with Wage Orders Nos. 1 to 5, should not be construed as
constitutive of voluntary employer practice, which cannot now be unilaterally
withdrawn by petitioner. To be considered as such, it should have been practiced
over a long period of time, and must be shown to have been consistent and
deliberate. Adequate proof is wanting in this respect. The test of long practice has
been enunciated in Oceanic Pharmaceutical Employees Union vs. Inciong such
that “respondent company agreed to continue giving holiday pay knowing fully
well that said employees are not covered by the law requiring payment of holiday
pay."Absent clear administrative guidelines, petitioner cannot be faulted for
erroneous application of the law. Payment may be said to have been made by
reason of a mistake in the construction or application of a "doubtful or difficult
question of law."Since it is a past error that is being corrected, no vested right
may be said to have arisen nor any diminution of benefit under Article 100 of the
Labor Code may be said to have resulted by virtue of the correction.
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING
UNITED WORKERS OF THE PHILIPPINES (SMTFM-UWP VS. NLRC.
G.R. NO. 113856
SEPTEMBER 7, 1998
ROMERO, J.

FACTS
Petitioner Samahang Manggagawa sa Top Form Manufacturing — United
Workers of the Philippines (SMTFM) was the certified collective bargaining
representative of all regular rank and file employees of private respondent Top
Form Manufacturing Philippines, Inc.
he charge arose from the employer's refusal to grant across-the-board increases
to its employees in implementing Wage Orders Nos. 01 and 02 of the Regional
Tripartite Wages and Productivity Board of the National Capital Region
(RTWPB-NCR). Such refusal was aggravated by the fact that prior to the issuance
of said wage orders, the employer allegedly promised at the collective bargaining
conferences to implement any government-mandated wage increases on an
across-the-board basis.

ISSUE
Whether or not the employer committed unfair labor practice by bargaining in
bad faith and discriminating against its employees.

RULING
The basic premise of this argument is definitely untenable. To start with, if there
was indeed a promise or undertaking on the part of private respondent to
obligate itself to grant an automatic across-the-board wage increase, petitioner
union should have requested or demanded that such "promise or undertaking" be
incorporated in the CBA. After all, petitioner union has the means under the law
to compel private respondent to incorporate this specific economic proposal in
the CBA. It could have invoked Article 252 of the Labor Code defining "duty to
bargain," thus, the duty includes "executing a contract incorporating such
agreements if requested by either party." Petitioner union's assertion that it had
insisted on the incorporation of the same proposal may have a factual basis
considering the allegations in the aforementioned joint affidavit of its members.
However, Article 252 also states that the duty to bargain "does not compel any
party to agree to a proposal or make any concession." Thus, petitioner union may
not validly claim that the proposal embodied in the Minutes of the negotiation
forms part of the CBA that it finally entered into with private respondent.

The Court likewise finds unmeritorious petitioner union's contention that by its
failure to grant across-the-board wage increases, private respondent violated the
provisions of Section 5, Article VII of the existing CBA as well as Article 100 of
the Labor Code.
We agree with the Labor Arbiter and the NLRC that no benefits or privileges
previously enjoyed by petitioner union and the other employees were withdrawn
as a result of the manner by which private respondent implemented the wage
orders. Granted that private respondent had granted an across-the-board
increase pursuant to Republic Act No. 6727, that single instance may not be
considered an established company practice. Petitioner union's argument in this
regard is actually tied up with its claim that the implementation of Wage Orders
Nos. 01 and 02 by private respondent resulted in wage distortion.

PAG-ASA STEEL WORKS, INC. VS. CA AND PAG-ASA STEEL

WORKERS UNION
G.R. NO.166647
MARCH 31, 2006

FACTS:
Petitioner Pag-Asa Steel Works, Inc. is a corporation duly organized and existing
under Philippine laws and is engaged in the manufacture of steel bars and wire
rods. Pag-Asa Steel Workers Union is the duly authorized bargaining agent of the
rank-and-file employees.

RTWPB of NCR issued a wage order which provided for a P 13.00 increase of the
salaries receiving minimum wages. The Petitioner and the union negotiated on
the increase. Petitioner forwarded a letter to the union with the list of
adjustments involving rank and file employees. In September 1999, the petitioner
and union entered into an collective bargaining agreement where it provided
wage adjustments namely P15, P25, P30 for three succeeding year. On the first
year, the increase provided were followed until RTWPB issued another wage
order where it provided for a P25.50 per day increase in the salary of employees
receiving the minimum wage and increased the minimum wage to P223.50 per
day. Petitioner paid the P25.50 per day increase to all of its rank-and-file
employees.

On November 2000, Wage Order No. NCR-08 was issued where it provided the
increase of P26.50 per day. The union president asked that the wage order be
implemented where petitioner rejected the request claiming that there was no
wage distortion and it was not obliged to grant the wage increase. The union
submitted the matter for voluntary arbitration where it favored the position of
the company and dismissed the complaint. The matter was elevated to CA where
it favored the respondents. Hence, this petition.

Issue:
Whether or not the company was obliged to grant the wage increase under Wage
Order No. NCR-08 as a matter of practice.

Held:
The Court favors the petitioner that wage increase shall not be granted by virtue
of CBA or matter of practice by the company. It is submitted that employers
unless exempt are mandated to implement the said wage order but limited to
those entitled thereto. There is no legal basis to implement the same across-the-
board. A perusal of the record shows that the lowest paid employee before the
implementation of Wage Order #8 is P250.00/day and none was receiving below
P223.50 minimum. This could only mean that the union can no longer demand
for any wage distortion adjustment. The provision of wage order #8 and its
implementing rules are very clear as to who are entitled to the P26.50/day
increase, i.e., "private sector workers and employees in the National Capital
Region receiving the prescribed daily minimum wage rate of P223.50 shall
receive an increase of Twenty-Six Pesos and Fifty Centavos (P26.50) per day,"
and since the lowest paid is P250.00/day the company is not obliged to adjust the
wages of the workers.
The provision in the CBA that "Any Wage Order to be implemented by the
Regional Tripartite Wage and Productivity Board shall be in addition to the wage
increase adverted above" cannot be interpreted in support of an across-the-board
increase. If such were the intentions of this provision, then the company could
have simply accepted the original demand of the union for such across-the-board
implementation, as set forth in their original proposal. The fact that the company
rejected this proposal can only mean that it was never its intention to agree, to
such across-the-board implementation. Wage Order No. NCR-08 clearly states
that only those employees receiving salaries below the prescribed minimum wage
are entitled to the wage increase provided therein, and not all employees across-
the-board as respondent Union would want petitioner to do. Considering
therefore that none of the members of respondent Union are receiving salaries
below the P250.00 minimum wage, petitioner is not obliged to grant the wage
increase to them.

Moreover, to ripen into a company practice that is demandable as a matter of

right, the giving of the increase should not be by reason of a strict legal or
contractual obligation, but by reason of an act of liberality on the part of the
employer. Hence, even if the company continuously grants a wage increase as
mandated by a wage order or pursuant to a CBA, the same would not
automatically ripen into a company practice.

NATIONAL SUGAR REFINERIES CORP V. NLRC

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

Facts:
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation
which is fully owned and controlled by the Government, operates three (3) sugar
refineries located at Bukidnon, Iloilo and Batangas. Private respondent union
represents the former supervisors of the NASUREFCO Batangas Sugar Refinery.
In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all
employees, from rank-and-file to department heads. We glean from the records
that for about ten years prior to the JE Program, the members of respondent
union were treated in the same manner as rank-and file employees. As such, they
used to be paid overtime, rest day and holiday pay pursuant to the provisions of
Articles 87, 93 and 94 of the Labor Code as amended with the implementation of
the JE Program, members of respondent union were re-classified under levels S-5
to S-8 which are considered managerial staff for purposes of compensation and
benefits.

In June 1990, the members of herein respondent union filed a complainant with
the executive labor arbiter for non-payment of overtime, rest day and holiday pay
allegedly in violation of Article 100 of the Labor Code.

In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages
complained of. On appeal, in a decision promulgated on July 1991, respondent
National Labor Relations Commission (NLRC) affirmed the decision of the labor
arbiter on the ground that the members of respondent union are not managerial
employees, and, therefore, they are entitled to overtime, rest day and holiday pay.
Respondent NLRC declared that these supervisory employees are merely
exercising recommendatory powers subject to the evaluation, review and final
action by their department heads.

Issue:
Whether the Supervisors are considered Managerial Employees and should no
longer receive overtime, rest day and holiday pay.

Held:
Yes. Under Art. 82 Coverage. — The provisions of this title shall apply to
employees in all establishments and undertakings whether for profit or not, but
not to government employees, managerial employees, field personnel, members
of the family of the employer who are dependent on him for support, domestic
helpers, persons in the personal service of another, and workers who are paid by
results as determined by the Secretary of Labor in Appropriate regulations. As
used herein, 'managerial employees' refer to those whose primary duty consists of
the management of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or members of the
managerial staff. It is the submission of petitioner that while the members of
respondent union, as supervisors, may not be occupying managerial positions,
they are clearly officers or members of the managerial staff because they meet all
the conditions prescribed by law and, hence, they are not entitled to overtime,
rest day.
Quintessentially, with the promotion of the union members, they are no longer
entitled to the benefits which attach and pertain exclusively to their positions.
Entitlement to the benefits provided for by law requires prior compliance with
the conditions set forth therein. With the promotion of the members of
respondent union, they occupied positions which no longer met the requirements
imposed by law. Their assumption of these positions removed them from the
coverage of the law, ergo, their exemption there from. As correctly pointed out by
petitioner, if the union members really wanted to continue receiving the benefits
which attach to their former positions, there was nothing to prevent them from
refusing to accept their promotions and their corresponding benefits. As the
saying goes by, they could not, as a simple matter of law and fairness, get the best
of both worlds at the expense of NASUREFCO.

Promotion of its employees is one of the jurisprudentially-recognized exclusive

prerogatives of management, provided it is done in good faith. In the case at bar,
private respondent union has miserably failed to convince this Court that the
petitioner acted implementing the JE Program. There is no showing that the JE
Program was intended to circumvent the law and deprive the members of
respondent union of the benefits they used to receive.

AMERICAN WIRE & CABLE DAILY RATED EMPLOYEES UNION VS.

AMERCAN WIRE & CABLE CO., INC., & THE COURT OF APPEALS
G.R. NO. 155059
APRIL 29, 2005

Facts: American Wire and Cable Co., Inc., is a corporation engaged in the
manufacture of wires and cables. There are two unions in this company, the
American Wire and Cable Monthly-Rated Employees Union and the American
Wire and Cable Daily-Rated Employees Union.

On 16 February 2001, an original action was filed before the NCMB of the
Department of Labor and Employment by the two unions for voluntary
arbitration. They alleged that the private respondent, without valid cause,
suddenly and unilaterally withdrew and denied certain benefits and entitlements
which they have long enjoyed. These are Service Award, 35% premium pay of an
employee’s basic pay for the work rendered during Holy Monday, Holy Tuesday,
Holy Wednesday, December 23, 26, 27, 28 and 29, Christmas Party and
Promotional Increase.

Issue: Whether or not the respondent company violated Article 100 of the Labor
Code.

Ruling: The Court ruled that company is not guilty of violating Art. 100 of the
Labor Code.

Article 100 of the Labor Code provides:

PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. –

Nothing in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code.

The certain benefits and entitlements are considered bonuses. A bonus can only
be enforceable and demandable if it has ripened into a company practice. It must
also be expressly agreed by the employer and employee or it must be on a fixed
amount.
The assailed benefits were never subjects of any agreement between the union
and the company. It was never incorporated in the CBA. Since all these benefits
are in the form of bonuses, it is neither enforceable nor demandable.

TRADERS ROYAL BANK VS. NLRC

G.R. NO. 88168
AUGUST 30, 1990

FACTS
On November 1986, TRB employees union filed a complaint with the NLRC for
diminution of benefits regarding holiday pay, mid-year and year-end
bonuses.2.NLRC ordered the Bank to pay the employees holiday pay differentials
for 1983-1986, as well as mid-year and year-end bonus differential for 1986.

ISSUE
Did the NLRC abuse its discretion in ordering the payment of mid-year and year-
end bonus differentials?

HELD
YES. A bonus is a gratuity or an act of liberality of the giver which the recipient
has no right to demand as a matter of right. The granting of bonus is basically a
management prerogative which cannot be forced upon the employer. In the case
at bar, the matter of giving bonuses over and above lawful salaries and allowances
is entirely on the profits realized by the Bank. In 1986, the Bank weakened
considerably due to suspicions that it was a Marcos-owned and controlled bank,
and was placed under sequestration by the PCGG.The union contention that the
granting of bonuses has ripened into a company practice that may not be
adjusted to the prevailing financial condition of the Bank, has no legal or moral
bases. Its fiscal condition having declined, the Bank may not be forced to give
bonuses it cannot pay, and in effect, be penalized for its past generosity to its
employees. There can be no diminution of benefits because bonuses are not part
of labor standards in the same class as salaries, cost of living allowances, holiday
pay and leave benefits. The NLRC is modified by deleting the award for bonus
differentials for 1986

NATIONAL FEDERATION OF SUGAR WORKERS (NFSW) VS.

OVAJERA
G.R. NO. L- 59743
MAY 31, 1982
PLANA, J.

FACTS:
In 1981, NFSW struck allegedly to compel the payment of the 13th month pay
under PD 851, in addition to the Christmas, milling and amelioration bonuses
being enjoyed by CAC workers. The decision having become final and executory
entry of judgment was made. After the Marcopper decision had become final,
NFSW renewed its demand that CAC give the 13th month pay. CAC refused,
NFSW filed with the Ministry of Labor and Employment (MOLE) Regional Office
in Bacolod City a notice to strike based on non-payment of the 13th month pay.
Six days after, NFSW struck.

ISSUE:
Whether or not under Presidential Decree 851 (13th Month Pay Law), CAC is
obliged to give its workers a 13th month salary in addition to Christmas, milling
and amelioration bonuses, the aggregate of which admittedly exceeds by far the
disputed 13th month pay?

HELD:
CAC is obliged to give its workers a 13th month salary in addition to Christmas,
milling and amelioration bonuses stipulated in a collective bargaining agreement
amounting to more than a month’s pay. When this agreement was forged on
November 30,1981, the original decision dismissing the petition in the aforecited
Marcopper case had already been promulgated by this Court. On the votes of only
7Justices, including the distinguished Chief Justice, the petition of Marcopper
Mining Corp. seeking to annul the decision of Labor Deputy Minister Amado
Inciong granting a 13th month pay to Marcopper employees (in addition to mid-
year and Christmas bonuses under a CBA) had been dismissed. But amotion for
reconsideration filed by Marcopper was pending as of November 30, 1981. In
December 1981,the original decision was affirmed when this Court finally denied
the motion for reconsideration. But theresolution of denial was supported by the
votes of only 5 Justices. The Marcopper decision is therefore a Court decision but
without the necessary eight votes to be doctrinal. This being so, it cannot be said
that the Marcopper decision "clearly held" that "the employer is liable to pay a
13th month pay separate and distinct from the bonuses already given," within the
meaning of the NFSW-CAC compromise agreement. At any rate, in view of the
rulings made herein, NFSW cannot insist on its claim that its members are
entitled to a 13th month pay in addition to the bonuses already paid by CAC.
WHEREFORE, the petitionis dismissed for lack of merit. No costs.

UNIVERSAL CORN PRODUCTS VS. NLRC

G.R. NO.L-60337
AUG. 21, 1987
SARMIENTO, J.

FACTS:
In 1972, the petitioner and the Universal Corn Products Workers Union entered
into a collective bargaining agreement. The COMPANYagrees to grant all
regular workers within the bargaining unit with at least one (1) year of
continuous service, a Christmas bonusequivalent to the regular wages for seven
(7) working days. The agreement had a duration of three years. On account
however of differences between the parties with respect to certain economic
issues, the collective bargaining agreement in question expired withoutbeing
renewed. In 1979, the parties entered into an "addendum" stipulating certain
wage increases covering the years from 1974 to1977.Simultaneously, they entered
into a collective bargaining agreement for the years from 1979 to 1981. Like the
"addendum," the newcollective bargaining agreement did not refer to the
"Christmas bonus" theretofore paid but dealt only with salary
adjustments.According to the petitioner, the new agreements deliberately
excluded the grant of Christmas bonus with the enactment of PresidentialDecree
No. 851.It further claims that since 1975, it had been paying its employees 13th-
month pay pursuant to the Decree. For failure of the petitioner topay the seven-
day Christmas bonus for 1975 to 1978 inclusive, in accordance with the 1972 CBA,
the union went to the labor arbiter forrelief. In his decision, the labor arbiter
ruled that the payment of the 13th month pay precluded the payment of further
Christmas bonus.The union appealed to NLRC. The NLRC set aside the decision
of the labor arbiter appealed from and entered another one, "directingrespondent
company now the petitioner to pay the members concerned of complainants
union their 7-day wage bonus in accordancewith the 1972 CBA from 1975 to 1978.

ISSUE:
Whether or not the Christmas bonus can be considered as 13th month pay

HELD:
The collective bargaining agreement accords a reward, in this case, for loyalty, to
certain employees. This is evident from the stipulationgranting the bonus in
question to workers "with at least one (1) year of continuous service is a purpose
not found in P.D. 851. It isclaimed, however, that as a consequence of the impasse
between the parties beginning 1974 through 1979, no collective
bargainingagreement was in force during those intervening years. Hence, there is
allegedly no basis for the money award granted by therespondent labor body.The
fact, therefore, that the new agreements are silent on the seven-day bonus
demanded should not preclude the private respondents'claims thereon. The 1972
agreement is basis enough for such claims for the whole writing is instinct with
an obligation, imperfectlyexpress.WHEREFORE, premises considered, the
petition is hereby DISMISSED. The Decision of the public respondent NLRC
promulgated onFebruary 11, 1982, and its Resolution dated March 23, 1982, are
hereby AFFIRMED. The temporary restraining order issued on May 19,1982 is
LIFTED

PHILIPPINE AIRLINES, INC. (PAL) VS. NLRC

G.R. NO. 114280
JULY 26, 1996
FRANCISCO, J.

FACTS: Refusing to pay its pilots their thirteenth month pay for unfair labor
practice was filed against Philippine Airlines by the Airline Pilots Association of
the Philippines. The Labor Arbiter ruled in favor of ALPAP and ordered PAL to
pay its pilots belonging to ALPAP their thirteenth month pay from 1988 to1990.
Disputing PAL's contention, ALPAP argued that the payment of the year-end
bonus cannot be equated within the thirteenth month pay since the payment of
the former is conditional in character andnot fixed in its amount, while that of
the thirteenth month pay is mandatory in character and definite in its. Both
parties appealed to the National Labor Relations Commission which in turn
affirmed with modifications the decision of the Labor Arbiter.

ISSUE: Whether or not PAL can claim the exception provided under the law by
equation the year-endbonus with the payment of the thirteenth month pay
deserves a very close scrutiny in this case?

HELD: It appears that the rationale for the grant of the year-end bonus by PAL
coincides with the natureof the bonus which can be equated with the payment of
a thirteenth month pay. However, notwithstandingthe above disquisitions, the
peculiar circumstances in this case wavers against the outright application ofthe
rule preventing the imposition of a double burden against the employer who is
already paying theequivalent of the thirteenth month pay, and hereby exempt
PAL from granting both benefits of a year-endbonus and a thirteenth month pay
to its pilots. The inclusion of a provision for the continued payment ofthe year-
end bonus in the 1988-1991 CBA of ALPAP and PAL belies the latter contention
that the grant ofthe year-end bonus was intended to be credited as compliance
with the mandate to pay the pilots athirteenth month pay.As early as said date,
PAL was therefore fully aware that it was legally obliged togrant all its rank and
file employees a thirteenth month pay. Moreover, there is no rational basis
forwithholding from the members of ALPAP the benefit of a year-end bonus is
addition to the thirteenthmonth pay, while the same being granted to the other
rank and field employees of PAL. WHEREFORE,finding no merit in the petitions,
the same are hereby DENIED and the Resolutions of public respondentNLRC
promulgated on November 23, 1993 and February 28, 1994 are hereby
AFFIRMED.

SAN MIGUEL CORPORATION (CAGAYAN COCA-COLA PLANT) VS.

INCIONG
G.R. NO. L-49774
FEBRUARY 24, 1981
DE CASTRO, J.

Facts: On January 3, 1977, Cagayan Coca-Cola Free Workers Union, private

respondent herein, filed a complaint against San Miguel Corporation (Cagayan
Coca-Cola Plant), petitioner herein, alleging failure or refusal of the latter to
include in the computation of 13th- month pay such items as sick, vacation or
maternity leaves, premium for work done on rest days and special holidays,
including pay for regular holidays and night differentials.

An Order 3 dated February 15, 1977 was issued by Regional Office No. X where
the complaint was filed requiring herein petitioner San Miguel Corporation
(Cagayan Coca-Cola Plant) "to pay the difference of whatever earnings and the
amount actually received as 13th month pay excluding overtime premium and
emergency cost of living allowance. "
Herein petitioner appealed from that Order to the Minister of Labor in whose
behalf the Deputy Minister of Labor Amado G. Inciong issued an Order 4 dated
June 7, 1978 affirming the Order of Regional Office No. X and dismissing the
appeal for lack of merit. Petitioner's motion for reconsideration having been
denied, it filed the instant petition.

Issue: Whether in the computation of the 13th-month pay under Presidential

Decree 851, payments for sick, vacation or maternity leaves, premium for work
done on rest days and special holidays, including pay for regular holidays and
night differentials should be considered.

Held: No.
The provision in dispute is Section 1 of Presidential Decree 851 and provides: All
employers are hereby required to pay all their employees receiving a basic salary
of not more than Pl,000 a month, regardless of the nature of the employment, a
13th-month pay not later than December 24 of every year.

Section 2 of the Rules and Regulations for the implementation of Presidential

Decree 851 provides:

b) Basic salary shall include all remunerations on earnings paid by an employer

to an employee for services rendered but may not include cost-of-living
allowances granted pursuant to Presidential Decree No. 525 or Letter of
Instructions No. 174, profit sharing payments and all allowances and monetary
benefits which are not considered or integrated as part of the regular or basic
salary of the employee at the time of the promulgation of the Decree on
December 16, 1975.

Under Presidential Decree 851 and its implementing rules, the basic salary of an
employee is used as the basis in the determination of his 13th-month pay. Any
compensations or remunerations which are deemed not part of the basic pay is
excluded as basis in the computation of the mandatory bonus. Under a later set of
Supplementary Rules and Regulations Implementing Presidential Decree 851
issued by the then Labor Secretary Blas Ople, overtime pay, earnings and other
remunerations are excluded as part of the basic salary and in the computation of
the 13th-month pay.

The all-embracing phrase "earnings and other renumeration" which are deemed
not part of the basic salary includes within its meaning payments for sick,
vacation, or maternity leaves. Maternity premium for works performed on rest
days and special holidays pays for regular holidays and night differentials. As
such they are deemed not part of the basic salary and shall not be considered in
the computation of the 13th-month they, were not so excluded, it is hard to find
any "earnings and other remunerations" expressly excluded in the computation
of the 13th-month pay. Then the exclusionary provision would prove to be Idle
and with no purpose.
PHILIPPINE DUPLICATORS, INC. VS. NLRC
G.R. NO. 110068
FEBRUARY 15, 1995

Facts:
On 11 November 1993, this Court, through its Third Division, rendered a decision
dismissing the petition for certiorari filed by petitioner Philippine Duplicators,
Inc. (Duplicators) in G.R. No. 110068. The Court upheld the decision of public
respondent National Labor Relations Commission (NLRC), which affirmed the
order of Labor Arbiter Felipe T. Garduque II directing petitioner to pay 13th
month pay to private respondent employees computed on the basis of their fixed
wages plus sales commissions.
The Third Division also denied with finality on 15 December 1993 the Motion for
Reconsideration filed (on 12 December 1993) by petitioner. On 17 January 1994,
petitioner Duplicators filed (a) a Motion for Leave to Admit Second Motion for
Reconsideration and (b) a Second Motion for Reconsideration to set aside the
rendered decision to them.

Issue:
Is the Motion for Leave to Admit Second Motion for Reconsideration and
Second Motion for Reconsideration filed by the petitioner is valid and has a merit
to set aside the rendered decision in Duplicators?

Ruling:
The Motions for Leave to File a Second Motion for Reconsideration and the
aforesaid Second Reconsideration are denied by the court for lack of merit.

ISALAMA MACHINE WORKS V NLRC ET AL

G.R. NO. 100167
MARCH 2, 1995

Facts: On 25 March 1987, petitioner Isalama Machine Works Corporation and

private respondent Isalama Machine Works Corporation Labor Union-Workers
Alliance Trade Union entered into a collective bargaining agreement ("CBA")
covering the period from 01 November 1986 to 03 October 1989. Following the
signing of the CBA, the union made repeated demands on the corporation,
allegedly to no avail, for it to comply with the CBA provisions. On 21 December
1987, the corporation paid the workers the 13th month pay based on the average
number of days actually worked during the year. The union, through its
president, private respondent Henry Baygan, demanded that the 13th month pay
should, instead, be made on the basis of a full one month basic salary. The
corporation countered that its own computation of the 13th month pay accorded
with the CBA provisions and Presidential Decree No. 851. On 05 January 1988,
the union filed a notice of strike with the Department of Labor and Employment,
Region X, Cagayan de Oro, alleging the commission of unfair labor practice and
CBA violation by the corporation. On 16 May 1988, the Executive Labor Arbiter
rendered a decision holding the strike to be illegal and declaring Baygan and the
"participating" union members to have thereby lost their employment status.
After several conferences, the National Conciliation and Mediation Board
("NCMB") succeeded in having the dispute amicably settled except for the 13th
month pay differential which remained in contention. The union insisted that the
failure of the corporation to implement fully the 13th month pay provision of the
CBA amounted to unfair labor practice.

Issue: Whether or not the workers should have a 13th month pay???

Held: Yes, In this case, the real reason for the strike is clearly traceable to the
unresolved dispute between the parties on 13th month pay differentials under
Presidential Decree No. 851, the proper manner of its application and
computation. The Court does not see this issue, given the quoted provisions of
the law and its implementing rules, to be constitutive of unfair labor practice.
Section 9 of Rules and Regulations Implementing Presidential Decree No. 851, in
fact, specifically states that "nonpayment of the thirteenth-month pay provided
by the Decree and (the) rules shall be treated as money claims cases and shall be
processed in accordance with the Rules Implementing the Labor Code of the
Philippines and the Rules of the National Labor Relations Commission." Private
respondents, indeed, showed little prudence, if at all, in their precipitate and ill-
considered strike.

The NLRC likewise found private respondents to have violated Art. 264 of the
Labor Code when they blocked and barricaded the entrance of petitioner's
premises preventing free ingress and egress. Unfortunately for petitioner,
however, the identity of those who committed those illegal acts during the strike,
except for Baygan, had not been adequately established. Specifically, the NLRC
said that no sufficient evidence could be found "to pin down the afore-named 16
respondents as having committed illegal acts during the strike," that could
warrant a loss of their employment status. The dismissal of Baygan, however,
was warranted. Being the union president and leader of the strike, his liability
was greater than that of mere members, and he had the responsibility to ensure
that his followers respected the law. Article 248 of the Labor Code, in turn,
provides: Unfair labor practices of employers. — It shall be unlawful for an
employer to commit any of the following unfair labor practice: (i) To violate a
collective bargaining agreement. This case arose in 1988 or prior to the effectivity
of Republic Act No. 6715; accordingly, the back salaries of the dismissed
employee should be limited to three years, without deduction or qualification,
following the rule in Maranaw Hotels and Resorts Corporation vs. Court of
Appeals.

ALLIANCE OF GOVERNMENT WORKERS ET. AL. VS MINISTER OF

LABOR AND EMPLOYMENT
G.R. NO. L-60403
AUGUST 3, 1983
GUTIERREZ, JR. J.
FACTS:
The Philippine Government Employees Association (PGEA) filed a motion
pursuant to P.D. No. 851 in 1983. P.D. No. 851 requires all employers to pay 13th
month pay to their employees with a single exception that is found in Sec. 2
which provides that employers who are already paying their employees 13th
month pay or its equivalent are not covered by this Decree. It is contended by the
petitioners that the Sec. 3 of the IRR of P.D. 851 also includes other types of
employers who are not exempted by the decree. They aver that the secretary, now
Minister of Labor and Employment, is not included in the decree or is not given
authority by the decree to exempt from the requirement other types of employers.

ISSUE:
Whether or not the private sectors or of government-owned and controlled
corporations and government agencies, are thereunder obligated to pay their
employees, receiving a basic salary of not more than P1,000 a month, a 13th-
month pay not later than December 24th of every year?

HELD:
It is the legislature or, in proper cases, the administrative heads of government
and not the collective bargaining process nor the concessions wrung by labor
unions from management that determine how much the workers in government-
owned or controlled corporations may receive in terms of salaries, 13th month
pay, and other conditions or terms of employment. There are government
institutions, which can afford to pay two weeks, three weeks, or even 13th-month
salaries to their personnel from their budgetary appropriations. Here as in other
countries, government salaries and wages have always been lower than salaries,
wages, and bonuses in the private sector. However, civil servants have no cause
for despair. Service in the government may at times be a sacrifice but it is also a
welcome privilege. Section
3 of the Rules and Regulations Implementing Presidential Decree No. 851 is,
therefore, a correct interpretation of the decree. It has been implemented and
enforced from December 22, 1975 to the present; the petitioners have shown no
valid reason why it should be nullified because of their petition filed six and a half
years after the issuance and implementation of the rule. WHEREFORE, the
petition is hereby DISMISSED for lack of merit.

TAN V.LAGRAMA
G.R. NO. 151228
AUGUST 15, 2002
MENDOZA, J.

Facts: Lagrama works for Tan as painter of billboards and murals for the motion
pictures shown at the theaters managed by Tan for more than 10years. He was
dismissed for having urinated in his working area. Aggrieved, Lagrama filed a
complaint for illegal dismissal and non payment of benefits. Tan asserted that
Lagrama was an independent contractor as he was paid in piece-work basis
Issue:
Whether or not Lagrama is an independent contractor or an employee of Tan?

Held:
Lagrama is an employee, not an independent contractor
Four Fold Test

Power of Control - Evidence shows that the Lagrama performed his work as
painter and under the supervision and control of Tan.
Lagrama worked in a designated work area inside the theater of Tan for the use of
which petitioner prescribed rules, which rules included the observance of
cleanliness and hygeine and prohibition against urinating in the work area and
any other place other than rest rooms and Tan's control over Lagrama's work
extended not only the use of work area but also the result of Lagrama;s work and
the manner and means by which the work was to be accomplished. Lagrama is
not an independent contractor because he did not enjoy independence and
freedom from the control and supervision of Tan and he was subjected to Tan's
control over the means and methods by which his work is to be performed and
accomplished

Payment of Wages - Lagrama worked for Tan on a fixed piece work basis is of no
moment. Payment by result is a method of compensation and does not define the
essence of the relation. Tat Lagrama was not reported as an employee to the SSS
is not conclusive, on the question whether he was an employee, otherwise Tan
would be rewarded for his failure or even neglect to perform his obligation.
Power of Dismissal– By Tan stating that he had the right to fire Lagrama, Tan in
effect acknowledged Lagrama to be his employee

Power of Selection and Engagement of Employees– Tan engaged the services of

Lagrama without the intervention of third party.

AVELINO LAMBO AND VICENTE BELOCURA VS. NLRC

G.R. NO. 111042
OCTOBER 26, 1999
MENDOZA, J.

Facts:
Petitioners were employed as tailors by private respondents. They worked from
8AM to 7PM daily with a regular income of Php 64.00. Eventually, petitioners
filed a complaint against private respondents for illegal dismissal. Petitioners
sought to recover overtime pay, holiday pay, premium pay on holidays and rest
days, service incentive leave pay, separation pay, 13th month pay, and attorney’s
fees. Adter hearing the case, the Labor Arbiter decided in favor of the petitioners.
However, upon appeal with NLRC, it was found out that petitioners were not
actually dismissed but were threatened with a closure of the business if they
insisted to demand their “straight payment of minimum wage.” Afterwards, the
petitioners walked-out from the meeting. Thus, NLRC set aside the Labor
Arbiter’s decision and instead held the petitioners guilty of abandonment of work
which resulted to the dismissal of the said monetary claims.

Issue:
Are petitioners entitled to the monetary claims and benefits?

Ruling:
Yes. The Court finds merit in the contentions of the petitioners that they were
illegally dismissed and, therefore, should be entitled to all the monetary benefits
that they are claiming for. Such decision is based on the following grounds:
There is an existing employer-employee relationship between the two parties
because of the capacity of the private respondents to control the employee’s work
conduct. It is established that the petitioners were required to regularly report for
work within the premises on the private-respondent’s establishment at a specific
schedule for more than a year.
Due to the establishment of the employer-employee relationship, and that it was
further seen that the employees were illegally dismissed, it is just right to award
them the said pays.

Therefore, the Court decided in favor of the petitioners and affirmed the Labor
Arbiter’s decision with the exception of including the attorney’s fees in the
computation.

MAKATI HABERDASHERY VS NLRC

G.R. NO. 83380-81
NOVEMBER 15, 1989

FACTS: Petition for certiorari to review the decision of the NLRC which affirmed
the decision of the Labor Arbiter who jointly heard and decided two cases filed by
the Union in behalf of the private respondents. Individual complainants are
working for Makati Haberdashery Inc as tailors, seamstress, sewers, basters, and
“plantsadoras” and are paid on a piece-rate basis (except two petitionerswho are
paid on a monthly basis)• In addition, they are given a daily allowance of P 3.00
provided they report before 9:30 a.m.everyday. Work schedule: 9:30-6 or 7 p.m.,
Mondays to Saturdays and even on Sundays and holidays during peak periods.
The Sandigan ng Manggagawang Pilipino filed a complaint for underpayment of
the basic wages, underpayment of living allowance, nonpayment of overtime
work, nonpayment of holiday pay, and other money claims. The Labor Arbiter
rendered judgment in favor of complainants which the NLRC affirmed but
limited back wages to one year. Petitioner urged that the NLRC erred in
concluding that an employer-employee relationship existed between the
petitioner and the workers.

Issue: 1. WON employees paid on piece-rate basis are entitled to service

incentive pay?
WON there is an Employer-Employee Relationship?
Held:
No, fall under exceptions set forth in the implementing rules (this will be
reexamined under Article 101).
Yes, evident in a Memorandum issued by the Assistant Manager.

Ratio:
As to the service incentive leave pay: as piece-rate workers being paid at a fixed
amount for performing work irrespective of time consumed in the performance
thereof, they fall under the exceptions stated in Sec1(d), Rule V, IRR, Book III,
Labor Code. Service Incentive Leave SECTION 1. Coverage. — This rule shall
apply to all employees except:(d) Field personnel and other employees whose
performance is unsupervised by the employer including those who are engaged
on task or contract basis, purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time consumed in the
performance thereof;
Employer-Employee Relationship. There is such relationship because in the
application of the four-fold test, it was found that petitioners had control over the
respondents not only as to the result but also as to the means and method by
which the same is to be accomplished.

LABOR CONGRESS OF THE PHILIPPINES (LCP) VS. NLRC AND

EMPIRE FOOD PRODUCTS
G.R. NO. 123938
MAY 21, 1998
DAVIDE, JR., J.

In this special civil action for certiorari under Rule 65, petitioners seek to reverse
the 29 March 1995 resolution 1of the National Labor Relations Commission
(NLRC) in NLRC RAB III Case No. 01-1964-91 which affirmed the Decision 2 of
Labor Arbiter Ariel C. Santos dismissing their complaint for utter lack of merit.

FACTS:
The 99 persons named as petitioners in this proceeding were rank-and-file
employees of respondent Empire Food Products, which hired them on various
dates (Paragraph 1, Annex "A" of Petition, Annex "B;" Page 2, Annex "F" of
Petition).
Petitioners filed against private respondents a complaint for payment of money
claim[s] and for violation of labor standard[s] laws (NLRC Case No. RAB-111-10-
1817-90). They also filed a petition for direct certification of petitioner Labor
Congress of the Philippines as their bargaining representative (Case No. R0300-
9010-RU-005).
On October 23, 1990, petitioners represented by LCP President Benigno B.
Navarro, Sr. and private respondents Gonzalo Kehyeng and Evelyn Kehyeng in
behalf of Empire Food Products, Inc. entered into a Memorandum of Agreement
which provided, among others, the following:
That in connection with the pending Petition for Direct Certification filed by the
Labor Congress with the DOLE, Management of the Empire Food Products has
no objection [to] the direct certification of the LCP Labor Congress and is now
recognizing the Labor Congress of the Philippines (LCP) and its Local Chapter as
the SOLE and EXCLUSIVE Bargaining Agent and Representative for all rank and
file employees of the Empire Food Products regarding "WAGES, HOURS Of
WORK, AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT;"
That with regards [sic] to NLRC CASE NO. RAB-III-10-1817-90 pending with the
NLRC parties jointly and mutually agreed that the issues thereof, shall be
discussed by the parties and resolve[d] during the negotiation of the Collective
Bargaining Agreement;
That Management of the Empire Food Products shall make the proper
adjustment of the Employees Wages within fifteen (15) days from the signing of
this Agreement and further agreed to register all the employees with the SSS;
That Employer, Empire Food Products thru its Management agreed to deduct
thru payroll deduction UNION DUES and other Assessment[s] upon submission
by the LCP Labor Congress individual Check-Off Authorization[s] signed by the
Union Members indicating the amount to be deducted and further agreed all
deduction[s] made representing Union Dues and Assessment[s] shall be remitted
immediately to the LCP Labor Congress Treasurer or authorized representative
within three (3) or five (5) days upon deductions [sic], Union dues not deducted
during the period due, shall be refunded or reimbursed by the
Employer/Management. Employer/Management further agreed to deduct Union
dues from non-union members the same amount deducted from union members
without need of individual Check-Off Authorizations [for] Agency Fee;
That in consideration [of] the foregoing covenant, parties jointly and mutually
agreed that NLRC CASE NO. RAB-III-10-1817-90 shall be considered
provisionally withdrawn from the Calendar of the National Labor Relations
Commission (NLRC), while the Petition for direct certification of the LCP Labor
Congress parties jointly move for the direct certification of the LCP Labor
Congress;
That parties jointly and mutually agreed that upon signing of this Agreement, no
Harassments [sic], Threats, Interferences [sic] of their respective rights under the
law, no Vengeance or Revenge by each partner nor any act of ULP which might
disrupt the operations of the business;
Parties jointly and mutually agreed that pending negotiations or formalization of
the propose[d] CBA, this Memorandum of Agreement shall govern the parties in
the exercise of their respective rights involving the Management of the business
and the terms and condition[s] of employment, and whatever problems and
grievances may arise by and between the parties shall be resolved by them, thru
the most cordial and good harmonious relationship by communicating the other
party in writing indicating said grievances before taking any action to another
forum or government agencies;
That parties [to] this Memorandum of Agreement jointly and mutually agreed to
respect, abide and comply with all the terms and conditions hereof. Further
agreed that violation by the parties of any provision herein shall constitute an act
of ULP. (Annex "A" of Petition).
In an Order dated October 24, 1990, Mediator Arbiter Antonio Cortez approved
the memorandum of agreement and certified LCP "as the sole and exclusive
bargaining agent among the rank-and-file employee of Empire Food Products for
purposes of collective bargaining with respect to wages, hours of work and other
terms and conditions of employment" (Annex "B" of Petition).

On November 9, 1990, petitioners through LCP President Navarro submitted to

private respondents a proposal for collective bargaining (Annex "C" of Petition).
On January 23, 1991, petitioners filed a complaint docketed as NLRC Case No.
RAB-III-01-1964-91 against private respondents for:
 Unfair Labor Practice by way of Illegal Lockout and/or Dismissal;
 Union busting thru Harassments [sic], threats, and interfering with the
rights of employees to self-organization;
 Violation of the Memorandum of Agreement dated October 23, 1990;
 Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727,
such as Wages promulgated by the Regional Wage Board;
 Actual, Moral and Exemplary Damages. (Annex "D" of Petition)

After the submission by the parties of their respective position papers and
presentation of testimonial evidence, Labor Arbiter Ariel C. Santos absolved
private respondents of the charges of unfair labor practice, union busting,
violation of the memorandum of agreement, underpayment of wages and denied
petitioners' prayer for actual, moral and exemplary damages. Labor Arbiter
Santos, however, directed the reinstatement of the individual complainants:

The undersigned Labor Arbiter is not oblivious to the fact that respondents have
violated a cardinal rule in every establishment that a payroll and other papers
evidencing hours of work, payments, etc. shall always be maintained and
subjected to inspection and visitation by personnel of the Department of Labor
and Employment. As such penalty, respondents should not escape liability for
this technicality, hence, it is proper that all individual complainants except those
who resigned and executed quitclaim[s] and releases prior to the filing of this
complaint should be reinstated to their former position[s] with the admonition
to respondents that any harassment, intimidation, coercion or any form of
threat as a result of this immediately executory reinstatement shall be dealt
with accordingly.

SO ORDERED. (Annex "G" of petition)

On appeal, the National Labor Relations Commission vacated the Decision dated
April 14, 1972 [sic] and remanded the case to the Labor Arbiter for further
proceedings for the following reasons:

The Labor Arbiter, through his decision, noted that ". . . complainant did not
present any single witness while respondent presented four (4) witnesses in the
persons of Gonzalo Kehyeng, Orlando Cairo, Evelyn Kehyeng and Elvira
Bulagan . . ." (p. 183, Records), that ". . . complainant before the National Labor
Relations Commission must prove with definiteness and clarity the offense
charged. . . ." (Record, p. 183); that ". . . complainant failed to specify under what
provision of the Labor Code particularly Art. 248 did respondents violate so as to
constitute unfair labor practice . . ." (Record, p. 183); that "complainants failed to
present any witness who may describe in what manner respondents have
committed unfair labor practice . . ." (Record, p. 185); that ". . . complainant LCP
failed to present anyone of the so-called 99 complainants in order to testify who
committed the threats and intimidation . . ." (Record, p. 185).
Upon review of the minutes of the proceedings on record, however, it appears
that complainant presented witnesses, namely, BENIGNO NAVARRO, JR. (28
February 1991, RECORD, p. 91; 8 March 1991, RECORD, p. 92, who adopted its
POSITION PAPER AND CONSOLIDATED AFFIDAVIT, as Exhibit "A" and the
annexes thereto as Exhibit "B", "B-1" to "B-9", inclusive. Minutes of the
proceedings on record show that complainant further presented other
witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD,
p. 93; LOURDES PANTILLO, MARIFE PINLAC, LENIE GARCIA (16 April 1991,
Record, p. 96, see back portion thereof ; 2 May 1991, Record, p. 102; 16 May
1991, Record, p. 103, 11 June 1991, Record, p. 105). Formal offer of
Documentary and Testimonial Evidence was made by complainant on June 24,
1991 (Record, p. 106-109)
The Labor Arbiter must have overlooked the testimonies of some of the
individual complainants which are now on record. Other individual
complainants should have been summoned with the end in view of receiving their
testimonies. The complainants should be afforded the time and opportunity to
fully substantiate their claims against the respondents. Judgment should be
rendered only based on the conflicting positions of the parties. The Labor Arbiter
is called upon to consider and pass upon the issues of fact and law raised by the
parties.

Toward this end, therefore, it is Our considered view [that] the case should be
remanded to the Labor Arbiter of origin for further proceedings. (Annex "H" of
Petition)
In a Decision dated July 27, 1994, Labor Arbiter Santos made the following
determination:

Complainants failed to present with definiteness and clarity the particular act or
acts constitutive of unfair labor practice.

It is to be borne in mind that a declaration of unfair labor practice connotes a

finding of prima facieevidence of probability that a criminal offense may have
been committed so as to warrant the filing of a criminal information before the
regular court. Hence, evidence which is more than a scintilla is required in order
to declare respondents/employers guilty of unfair labor practice. Failing in this
regard is fatal to the cause of complainants. Besides, even the charge of illegal
lockout has no leg to stand on because of the testimony of respondents through
their guard Orlando Cairo (TSN, July 31, 1991 hearing; p. 5-35) that on January
21, 1991, complainants refused and failed to report for work, hence guilty of
abandoning their post without permission from respondents. As a result of
complainants['] failure to report for work, the cheese curls ready for repacking
were all spoiled to the prejudice of respondents. Under cross-examination,
complainants failed to rebut the authenticity of respondents' witness testimony.

As regards the issue of harassments [sic], threats and interference with the rights
of employees to self-organization which is actually an ingredient of unfair labor
practice, complainants failed to specify what type of threats or intimidation was
committed and who committed the same. What are the acts or utterances
constitutive of harassments [sic] being complained of? These are the specifics
which should have been proven with definiteness and clarity by complainants
who chose to rely heavily on its position paper through generalizations to prove
their case.

Insofar as violation of [the] Memorandum of Agreement dated October 23, 1990

is concerned, both parties agreed that:

2 — That with regards [sic] to the NLRC Case No. RAB III-10-1817-90 pending
with the NLRC, parties jointly and mutually agreed that the issues thereof shall
be discussed by the parties and resolve[d] during the negotiation of the CBA.
The aforequoted provision does not speak of [an] obligation on the part of
respondents but on a resolutory condition that may occur or may not happen.
This cannot be made the basis of an imposition of an obligation over which the
National Labor Relations Commission has exclusive jurisdiction thereof.

Anent the charge that there was underpayment of wages, the evidence points to
the contrary. The enumeration of complainants' wages in their consolidated
Affidavits of merit and position paper which implies underpayment has no leg to
stand on in the light of the fact that complainants' admission that they are piece
workers or paid on a pakiao [basis] i.e. a certain amount for every thousand
pieces of cheese curls or other products repacked. The only limitation for piece
workers or pakiao workers is that they should receive compensation no less than
the minimum wage for an eight (8) hour work [sic]. And compliance therewith
was satisfactorily explained by respondent Gonzalo Kehyeng in his testimony
(TSN, p. 12-30) during the July 31, 1991 hearing. On cross-examination,
complainants failed to rebut or deny Gonzalo Kehyeng's testimony that
complainants have been even receiving more than the minimum wage for an
average workers [sic]. Certainly, a lazy worker earns less than the minimum wage
but the same cannot be attributable to respondents but to the lazy workers.

Finally, the claim for moral and exemplary damages has no leg to stand on when
no malice, bad faith or fraud was ever proven to have been perpetuated by
respondents.
WHEREFORE, premises considered, the complaint is hereby DISMISSED for
utter lack of merit. (Annex "I" of Petition). 4
On appeal, the NLRC, in its Resolution dated 29 March 1995, 5 affirmed in
toto the decision of Labor Arbiter Santos. In so doing, the NLRC sustained the
Labor Arbiter's findings that: (a) there was a dearth of evidence to prove the
existence of unfair labor practice and union busting on the part of private
respondents; (b) the agreement of 23 October 1990 could not be made the basis
of an obligation within the ambit of the NLRC's jurisdiction, as the provisions
thereof, particularly Section 2, spoke of a resolutory condition which could or
could not happen; (c) the claims for underpayment of wages were without basis
as complainants were admittedly"pakiao" workers and paid on the basis of their
output subject to the lone limitation that the payment conformed to the
minimum wage rate for an eight-hour workday; and (d) petitioners were not
underpaid.
Their motion for reconsideration having been denied by the NLRC in its
Resolution of 31 October 1995, 6petitioners filed the instant special civil action
for certiorari.

ISSUES:
1 Whether or not the petitioners have been illegally dismissed by private
respondents.
Whether or not the petitioners are entitled to full back wages and other
privileges, and separation pay in lieu of reinstatement.

HELD:
1 Private respondents, moreover, in considering petitioners' employment to have
been terminated by abandonment, violated their rights to security of tenure and
constitutional right to due process in not even serving them with a written notice
of such termination. 12 Section 2, Rule XIV, Book V of the Omnibus Rules
Implementing the Labor Code provides:

Sec. 2. Notice of Dismissal — Any employer who seeks to dismiss a worker shall
furnish him a written notice stating the particular acts or omission constituting
the grounds for his dismissal. In cases of abandonment of work, the notice shall
be served at the worker's last known address.

2 Petitioners are therefore entitled to reinstatement with full back wages

pursuant to Article 279 of the Labor Code, as amended by R.A. No. 6715.
Nevertheless, the records disclose that taking into account the number of
employees involved, the length of time that has lapsed since their dismissal, and
the perceptible resentment and enmity between petitioners and private
respondents which necessarily strained their relationship, reinstatement would
be impractical and hardly promotive of the best interests of the parties. In lieu of
reinstatement then, separation pay at the rate of one month for every year of
service, with
a fraction of at least six (6) months of service considered as one (1) year, is in
order. 13
That being said, the amount of back wages to which each petitioner is entitled,
however, cannot be fully settled at this time. Petitioners, as piece-rate workers
having been paid by the piece, 14 there is need to determine the varying degrees
of production and days worked by each worker. Clearly, this issue is best left to
the National Labor Relations Commission.

As to the other benefits, namely, holiday pay, premium pay, 13th month pay and
service incentive leave which the labor arbiter failed to rule on but which
petitioners prayed for in their complaint, 15 we hold that petitioners are so
entitled to these benefits. Three (3) factors lead us to conclude that petitioners,
although piece-rate workers, were regular employees of private respondents.
First, as to the nature of petitioners' tasks, their job of repacking snack food was
necessary or desirable in the usual business of private respondents, who were
engaged in the manufacture and selling of such food products; second,
petitioners worked for private respondents throughout the year, their
employment not having been dependent on a specific project or season; and
third, the length of time 16that petitioners worked for private respondents. Thus,
while petitioners' mode of compensation was on a "per piece basis," the status
and nature of their employment was that of regular employees.

The Rules Implementing the Labor Code exclude certain employees from
receiving benefits such as nighttime pay, holiday pay, service incentive
leave 17 and 13th month pay, 18 inter alia, "field personnel and other employees
whose time and performance is unsupervised by the employer, including those
who are engaged on task or contract basis, purely commission basis, or those who
are paid a fixed amount for performing work irrespective of the time consumed in
the performance thereof." Plainly, petitioners as piece-rate workers do not fall
within this group. As mentioned earlier, not only did petitioners labor under the
control of private respondents as their employer, likewise did petitioners toil
throughout the year with the fulfillment of their quota as supposed basis for
compensation. Further, in Section 8 (b), Rule IV, Book III which we quote
hereunder, piece workers are specifically mentioned as being entitled to holiday
pay.

Sec. 8. Holiday pay of certain employees. —

Where a covered employee is paid by results or output, such as payment on piece
work, his holiday pay shall not be less than his average daily earnings for the last
seven (7) actual working days preceding the regular holiday: Provided, however,
that in no case shall the holiday pay be less than the applicable statutory
minimum wage rate.
In addition, the Revised Guidelines on the Implementation of the 13th Month Pay
Law, in view of the modifications to P.D. No. 851 19 by Memorandum Order No.
28, clearly exclude the employer of piece rate workers from those exempted from
paying 13th month pay, to wit:

EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851:
d. Employers of those who are paid on purely commission, boundary or task
basis, and those who are paid a fixed amount for performing specific work,
irrespective of the time consumed in the performance thereof, except where the
workers are paid on piece-rate basis in which case the employer shall grant the
required 13th month pay to such workers. (emphasis supplied)

The Revised Guidelines as well as the Rules and Regulations identify those
workers who fall under the piece-rate category as those who are paid a standard
amount for every piece or unit of work produced that is more or less regularly
replicated, without regard to the time spent in producing the same. 20

As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule
I, Book III of the Implementing Rules, workers who are paid by results including
those who are paid on piece-work, takay, pakiao, or task basis, if their output
rates are in accordance with the standards prescribed under Sec. 8, Rule VII,
Book III, of these regulations, or where such rates have been fixed by the
Secretary of Labor in accordance with the aforesaid section, are not entitled to
receive overtime pay. Here, private respondents did not allege adherence to the
standards set forth in Sec. 8 nor with the rates prescribed by the Secretary of
Labor. As such, petitioners are beyond the ambit of exempted persons and are
therefore entitled to overtime pay. Once more, the National Labor Relations
Commission would be in a better position to determine the exact amounts owed
petitioners, if any.

JIMENEZ ET. AL. V. NLRC AND JUANATAS

G.R. NO. 116960
APRIL 2, 1996

Facts:

On June 29, 1990, private respondents Pedro and Fredelito Juanatas, father and
son, filed aclaim for unpaid wages/commissions, separation pay and damages
against JJ's Trucking and/or Dr. Bernardo Jimenez. Said respondents, as
complainants therein, alleged that in December,1987, they were hired by herein
petitioner Bernardo Jimenez as driver/mechanic and helper,respectively, in his
trucking firm, JJ Trucking. They were assigned to a ten-wheeler truck to haulsoft
drinks of Coca-Cola Bottling Company and paid on commission basis, initially
fixed at 17%but later increased to 20% in 1988.

Private respondents further alleged that for the years 1988 and 1989 they
received only a partialcommission of P84,000.00 from petitioners' total gross
income of almost P1,000,000.00 for thesaid two years. Consequently, with their
commission for that period being computed at 20% of said income, there was an
unpaid balance to them of P106,211.86; that until March, 1990 whentheir
services were illegally terminated, they were further entitled to P8,050.00 which
added upto a grand total of P114,261.86 due and payable to them.
Disputing the complaint, petitioners contend that respondent Fredelito Juanatas
was not anemployee of the firm but was merely a helper of his father Pedro; that
all commissions for 1988and 1989, as well as those up to March, 1990, were duly
paid; and that the truck driven byrespondent Pedro Juanatas was sold to one
Winston Flores in 1991 and, therefore, privaterespondents were not illegally
dismissed.

After hearings duly conducted, and with the submission of the parties'
position/supportingpapers, Labor Arbiter Rogue B. de Guzman rendered a
decision ordering respondents JJ'sTrucking and/or Dr. Bernardo Jimenez to pay
jointly and severally complainant Pedro Juanatasa separation pay of P15,050.00,
plus attorney's fee equivalent to 10% of the award. Thecomplaint of Fredelito
Juanatas is hereby dismissed for lack of merit.On appeal filed by private
respondents, the NLRC modified the decision of the labor arbiter declaring
Fredelito Juanatas as respondents' employee and shares in the commission
andseparation pay awarded to complainant Pedro Juanatas, his father. Further,
respondent JJ'sTrucking and Dr. Bernardo Jimenez are jointly and severally
liable to pay complainants their unpaid commissions in the total amount of
P84,387.05. Hence, this petition for certiorari, seeking the annulment of the
decision of respondent NLRCdenying petitioners' motion for reconsideration.

Issue:
Whether or not respondent NLRC committed grave abuse of discretion in ruling
(a) that private respondents were not paid their commissions in full, and (b) that
respondent Fredelito Juanatas was an employee of JJ's Trucking.

Ruling:
On the first issue, there is no reason to disturb the findings of respondent NLRC
that the entire amount of commissions was not paid, because of the evident
failure of petitioners to present evidence that full payment thereof has been
made.

As a general rule, one who pleads payment has the burden of proving it. Even
where the plaintiff (herein private respondent) must allege non-payment, the
burden of evidence rests on the defendant (herein petitioners) to prove payment,
rather than on the plaintiff to prove non-payment.

In the instant case, the right of respondent Pedro Juanatas to be paid a

commission equivalent to 17%, later increased to 20%, of the gross income is not
disputed by petitioners. Although private respondents admit receipt of partial
payment, petitioners still have to present proof of full payment.

The testimony of petitioners which merely denied the claim of private

respondents, unsupported by documentary evidence, is not sufficient to establish
payment. Although petitioners submitted a notebook showing the alleged vales of
private respondents for the year 1990, the same is inadmissible and cannot be
given probative value considering that it is not properly accomplished, is undated
and unsigned, and is thus uncertain as to its origin and authenticity.

Hence, for failure to present evidence to prove payment, petitioners defaulted in

their defenseand in effect admitted the allegations of private respondents.With
respect to the second issue, NLRC erred in holding that the son, Fredelito, was an
employee of petitioners. In the case at bar, the elements of an employer-employee
relationship, are not present. The agreement was between petitioner JJ's
Trucking and respondent Pedro Juanatas. The hiring of a helper was
discretionary on the part of Pedro. Hence, Fredelito was not an employee of
petitioners.

WHEREFORE, the judgment of respondent National Labor Relations

Commission is AFFIRMED, with the MODIFICATION that declaring
Fredelito Juanatas is not an employee of petitioners and not entitled to share in
the award for commission and separation pay.

VIRGINIA G. NERI VS. NLRC

224 SCRA 717
JULY 23, 1993

FACTS: Petitioners instituted complaints against FEBTC and BCC to compel the
bank to accept them as regular employeesand for it to pay the differential
between the wages being paid them by BCC and those received by FEBTC
employeeswith similar length of service. They contended that BCC in engaged in
labor-only contracting because it failed toadduce evidence purporting to show
that it invested in the form of tools, equipment, machineries, work premisesand
other materials which are necessary in the conduct of its business. Moreover,
petitioners argue that they performduties which are directly related to the
principal business or operation of FEBTC.

ISSUE: Whether or not BCC was engaged in labor-only contracting.

HELD: It is well-settled that there is labor-only contracting where: (a) the

person supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises, among
others; and, (b) the workers recruited and placed by such person are performing
activities which are directly related o the principal business of the employer.BCC
need not prove that it made investments in the form of tools, equipment,
machineries, work premises, among others, because it has established that it has
sufficient capitalization. This fact was both determined by the Labor Arbiter and
the NLRC as BCC had a capital stock of P1 million fully subscribed and paid for.
BCC is therefore a highly capitalized venture and cannot be deemed engaged in
labor-only contracting.
While there may be no evidence that it has investment in the form of tools,
equipment, machineries, work premises, among others, it is enough that it has
substantial capital, as was established before the Labor Arbiter as well as the
NLRC. The law does not require both substantial capital and investment in the
form of tools, equipment, machineries, etc. This is clear from the use of the
conjunction "or" instead of ‚and‛. Having established that it has substantial
capital, it was no longer necessary for BCC to further adduce evidence to prove
that it does not fall within the purview of "labor-only" contracting. There is even
no need for it to refute petitioners' contention that the activities they perform are
directly related to the principal business of respondent bank. On the other hand,
the Court has already taken judicial notice of the general practice adopted in
several government and private institutions and industries of hiring independent
contractors to perform special services. These services range from janitorial,
security and even technical or other specific services such as those performed by
petitioners Neri and Cabelin. While these services may be considered directly
related to the principal business of the employer, nevertheless, they are not
necessary in the conduct of the principal business of the employer.

MANILA WATER COMPANY, INC. VS. PENA

G.R. NO. 158255
JULY 8, 2004

FACTS
Petitioner Manila Water Company, Inc. is one of the two private concessionaires
contracted by the Metropolitan Waterworks and Sewerage System (MWSS) to
manage the water distribution system in the East Zone of Metro Manila, pursuant
to Republic Act No. 8041, otherwise known as the National Water Crisis Act of
1995. Under the Concession Agreement, petitioner undertook to absorb former
employees of the MWSS whose names and positions were in the list furnished by
the latter, while the employment of those not in the list was terminated on the
day petitioner took over the operation of the East Zone, which was on August 1,
1997. Private respondents, being contractual collectors of the MWSS, were among
the 121 employees not included in the list; nevertheless, petitioner engaged their
services without written contract from August 1, 1997 to August 31, 1997.
Thereafter, on September 1, 1997, they signed a three-month contract to perform
collection services for eight branches of petitioner in the East Zone.
Before the end of the three-month contract, the 121 collectors incorporated the
Association Collectors Group, Inc. (ACGI), which was contracted by petitioner to
collect charges for the Balara Branch. Subsequently, most of the 121 collectors
were asked by the petitioner to transfer to the First Classic Courier Services, a
newly registered corporation. Only private respondents herein remained with
ACGI. Petitioner continued to transact with ACGI to do its collection needs until
February 8, 1999, when petitioner terminated its contract with ACGI.
Private respondents filed a complaint for illegal dismissal and money claims
against petitioner, contending that they were petitioner’s employees as all the
methods and procedures of their collections were controlled by the latter. On the
other hand, petitioner asserts that private respondents were employees of ACGI,
an independent contractor. It maintained that it had no control and supervision
over private respondents’ manner of performing their work except as to the
results. Thus, petitioner did not have an employer-employee relationship with the
private respondents, but only a service contractor-client relationship with ACGI.

ISSUE
Whether or not there exists an employer-employee relationship between
petitioner and private respondents.

RULING
We agree with the Labor Arbiter that ACGI was not an independent contractor.
First, ACGI does not have substantial capitalization or investment in the form of
tools, equipment, machineries, work premises, and other materials, to qualify as
an independent contractor. While it has an authorized capital stock of
P1,000,000.00, only P62,500.00 is actually paid-in, which cannot be considered
substantial capitalization. The 121 collectors subscribed to four shares each and
paid only the amount of P625.00 in order to comply with the incorporation
requirements. Further, private respondents reported daily to the branch office of
the petitioner because ACGI has no office or work premises. In fact, the corporate
address of ACGI was the residence of its president, Mr. Herminio D.
Peña. Moreover, in dealing with the consumers, private respondents used the
receipts and identification cards issued by petitioner. Second, the work of the
private respondents was directly related to the principal business or operation of
the petitioner. Lastly, ACGI did not carry on an independent business or
undertake the performance of its service contract according to its own manner
and method, free from the control and supervision of its principal, petitioner.
Prior to private respondents’ alleged employment with ACGI, they were already
working for petitioner, subject to its rules and regulations in regard to the
manner and method of performing their tasks. This form of control and
supervision never changed although they were already under the seeming employ
of ACGI. These are indications that ACGI was not left alone in the supervision
and control of its alleged employees. Consequently, it can be concluded that ACGI
was not an independent contractor since it did not carry a distinct business free
from the control and supervision of petitioner.

Under this factual milieu, there is no doubt that ACGI was engaged in labor-only
contracting, and as such, is considered merely an agent of the petitioner. In
labor-only contracting, the statute creates an employer-employee relationship for
a comprehensive purpose: to prevent a circumvention of labor laws. The
contractor is considered merely an agent of the principal employer and the latter
is responsible to the employees of the labor-only contractor as if such employees
had been directly employed by the principal employer. Since ACGI is only a
labor-only contractor, the workers it supplied should be considered as employees
of the petitioner.

SAN MIGUEL CORPORATION V. PROSPERO ABALLA

G.R. NO. 149011
JUNE 28, 2005
CARPIO-MORALES,J

Facts:
Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose
Cooperative(Sunflower) entered into a one-year Contract of Service and such
contract is renewed on amonthly basis until terminated. Pursuant to this,
respondent Prospero Aballa rendered servicesto SMC.After one year of service,
Aballa filed a complaint before NLRC praying that they be declared asregular
employees of SMC. On the other hand, SMC filed before the DOLE a Notice of
Closuredue to serious business losses. Hence, the labor arbiter dismissed
the complaint and ruled infavor of SMC. Aballa then appealed before the NLRC.
The NLRC dismissed the appeal findingthat Sunflower is an independent
contractor.On appeal, the Court of Appeals reversed NLRC·s decision on the
ground that the agreementbetween SMC and Sunflower showed a clear intent
to abstain from establishing an employer-employee relationship.

Issue:
Whether or not Aballa and other employees of Sunflower are employees of SMC?

Held:
The test to determine the existence of independent contractorship is whether
oneclaiming to be an independent contractor has contracted to do the work
according to his ownmethods and without being subject to the control of the
employer, except only as to the resultsof the work. In legitimate labor
contracting, the law creates an employer-employee relationshipfor a limited
purpose, to ensure that the employees are paid their wages. The principal
employer becomes jointly and severally liable with the job contractor, only for the
payment of theemployees wages whenever the contractor fails to pay the same.
Other than that, the principalemployer is not responsible for any claim made by
the employees. In labor-only contracting, thestatute creates an employer-
employee relationship for a comprehensive purpose: to prevent acircumvention
of labor laws. The contractor is considered merely an agent of the
principalemployer and the latter is responsible to the employees of the labor-only
contractor as if suchemployees had been directly employed by the principal
employer.The Contract of Services between SMC and Sunflower shows that the
parties clearly disavowedthe existence of an employer-employee relationship
between SMC and private respondents.The language of a contract is not,
however, determinative of the parties· relationship; rather it isthe totality of the
facts and surrounding circumstances of the case. A party cannot dictate, bythe
mere expedient of a unilateral declaration in a contract, the character of its
business,whether as labor-only contractor or job contractor, it being crucial that
its character be measuredin terms of and determined by the criteria set by
statute. What appears is that Sunflower doesnot have substantial
capitalization or investment in the form of tools, equipment, machineries,work
premises and other materials to qualify it as an independent contractor. On the
other hand,it is gathered that the lot, building, machineries and all other working
tools utilized by Aballa etal. in carrying out their tasks were owned and provided
by SMC.And from the job description provided by SMC itself, the work assigned
to Aballa et al.
wasdirectly related to the aquaculture operations of SMC. As for janitorial and m
essengerialservices, that they are considered directly related to the principal
business of the employer hasbeen jurisprudentially recognized. Furthermore,
Sunflower did not carry on an independent business or undertake the
performance of its service contract according to its own manner andmethod, free
from the control and supervision of its principal, SMC, its apparent role
havingbeen merely to recruit persons to work for SMC.All the foregoing
considerations affirm by more than substantial evidence the existence of
anemployer- employee relationship between SMC and Aballa. Since Aballa who
were engaged inshrimp processing performed tasks usually necessary or
desirable in the aquaculture businessof SMC, they should be deemed regular
employees of the latter and as such are entitled to allthe benefits and rights
appurtenant to regular employment. They should thus be awardeddifferential pay
corresponding to the difference between the wages and benefits given them
andthose accorded SMC·s other regular employee

TABAS VS. CALIFORNIA MANUFACTURING CO.

GR NO. 80680
JANUARY 26, 1989
SARMIENTO, J.

Facts:
Petitioners filed a petition in the NLRC for reinstatement and payment of various
benefits against California Manufacturing Company. The respondent company
then denied the existence of an employer-employee relationship between the
company and the petitioners. Pursuant to a manpower supply agreement, it
appears that the petitioners prior their involvement with California
Manufacturing Company were employees of Livi Manpower service, an
independent contractor, which assigned them to work as “promotional
merchandisers.” The agreement provides that:
California has no control or supervisions whatsoever over Livi's workers with
respect to how they accomplish their work or perform, Californias obligation” It
was further expressly stipulated that the assignment of workers to California shall
be on a “seasonal and contractual basis” that cost of living allowance and the 10
legal holidays will be charged directly to California at cost and that payroll for the
preceding week shall be delivered by Livi at California's premises.”
Issue:
Whether principal employer is liable.
Held:
Yes. The existence of an employer-employee relation cannot be made the subject
of an agreement.

Based on Article 106, “labor-only” contractor is considered merely as an agent of

the employer, and the liability must be shouldered by either one or shared by
both. There is no doubt that in the case at bar, Livi performs “manpower
services”, meaning to say, it contracts out labor in favor of clients. We hold that it
is one notwithstanding its vehement claims to the contrary, and notwithstanding
the provision of the contract that it is “an independent contractor.” The nature of
one’s business is not determined by self-serving appellations one attaches thereto
but by the tests provided by statute and prevailing case law. The bare fact that
Livi maintains a separate line of business does not extinguish the equal fact that
it has provided California with workers to pursue the latter’s own business. In
this connection, we do not agree that the petitioners had been made to perform
activities ‘which are not directly related to the general business of
manufacturing,” California’s purported “principal operation activity.” Livi, as a
placement agency, had simply supplied California with the manpower necessary
to carry out its California merchandising activities, using its California premises
and equipment.

MAFINCO TRADING CORP. VS. OPLE

G.R. NO. L-37790
MARCH 25, 1976
AQUINO, J.

FACTS:
Cosmos Aerated Water Factory, a firm based at Malabon, Rizal, appointed
petitioner Mafinco as its sole distributor of Cosmos soft drinks in Manila.
Rodrigo Repomanta and Mafinco executed a peddling contract whereby
Repomanta agreed to buy and sell Cosmos soft drinks. Rey Moralde entered into
a similar contract. Months later, Mafinco terminated the peddling contract with
Repomanta and Moralde. Consequently, Repomanta and Moralde, through their
union, filed a complaint with the NLRC, charging the general manager of Mafinco
for illegally dismissing them.4.Mafinco filed a motion to dismiss the complaint on
the ground that the NLRC had no jurisdiction because Repomanta and Moralde
were not its employees but were independent contractors. It stressed that there
was termination of the contract not a dismissal of an employee.

ISSUE:
Whether or not there exist an employer-employee relationship between
petitioner Mafinco and private respondents Repomanta and Moralde.

HELD:
The Supreme Court held that under the peddling contracts, Repomanta and
Moralde were not employees of Mafinco but were independent contractors as
found by the NLC and its fact finder and by the committee appointed by the
Secretary of Labor to look into the status of Cosmos and Mafinco peddlers. A
contract whereby one engages to purchase and sell soft drinks on trucks supplied
by the manufacturer but providing that the other party (peddler) shall have the
right to employ his own workers, shall post a bond to protect the manufacturer
against losses, shall be responsible for damages caused to third persons, shall
obtain the necessary licenses and permits and bear the expenses incurred in the
sale of the soft drinks is not a contract of employment.

INSULAR LIFE INSURANCE CO. LTD VS NLRC

G.R. NO. 84484
NOVEMBER 15, 1989
NARVASA, J.

FACTS:
Insular Life (company) and Basiao entered into a contract by which Basiao was
authorized to solicit forinsurance in accordance with the rules of the company.
He would also receive compensation, in the form of commissions. The contract
also contained the relations of the parties, duties of the agent and the acts
prohibited tohim including the modes of termination.After 4 years, the parties
entered into another contract – an Agency Manager’s Contact – and to
implementhis end of it, Basiao organized an agency while concurrently fulfilling
his commitment under the first contract. The company terminated the Agency
Manager’s Contract. Basiao sued the company in a civil action. Thus,the company
terminated Basiao’s engagement under the first contract and stopped payment of
his commissions.

ISSUE:
W/N Basiao had become the company’s employee by virtue of the contract,
thereby placing his claim forunpaid commissions

HELD:
No.Rules and regulations governing the conduct of the business are provided for
in the Insurance Code. Theserules merely serve as guidelines towards the
achievement of the mutually desired result without dictating themeans or
methods to be employed in attaining it. Its aim is only to promote the result,
thereby creating noemployer-employee relationship. It is usual and expected for
an insurance company to promulgate a set of rules toguide its commission agents
in selling its policies which prescribe the qualifications of persons who may be
insured.None of these really invades the agent’s contractual prerogative to adopt
his own selling methods or to sellinsurance at his own time and convenience,
hence cannot justifiable be said to establish an employer-employeerelationship
between Basiao and the company. The respondents limit themselves to pointing
out that Basiao’s contract with the company bound him toobserve and conform to
such rules. No showing that such rules were in fact promulgated which
effectivelycontrolled or restricted his choice of methods of selling insurance.
Therefore, Basiao was not an employee of the petitioner, but a commission agent,
an independent contractwhose claim for unpaid commissions should have been
litigated in an ordinary civil action.Wherefore, the complain of Basiao is
dismissed.

RHONE-POULENC AGROCHEMICALS PHILIPPINES, INC. VS. NLRC

G.R. NOS. 102633-35
JANUARY 19, 1993

FACTS
The petitioner is a domestic corporation engaged in the manufacture of agro-
chemicals. Its business operations involve the formulation, production,
distributionand sale in the local market of its agro-chemical products.On January
1, 1988, as a consequence of the sale by Union Carbide, Inc. of all itsagricultural-
chemical divisions worldwide in favor of Rhone-Poulenc Agrochemie,France, the
petitioner's mother corporation, the petitioner acquired from UnionCarbide
Philippines Far East, Inc. the latter's agro-chemical formulation plant
inNamayan, Mandaluyong, Metro Manila.In 1987, prior to the sale, Union
Carbide had entered into a contract with CSI for thelatter's supply of janitorial
services. During the transition period, Union Carbidecontinued to avail itself of
CSI's janitorial services. Thus, petitioner Rhone-Poulencfound itself sharing the
Namayan plant with Union Carbide while the factory wasbeing serviced and
maintained by janitors supplied by CSI.Midway through the transition period,
Union Carbide instructed CSI to reduce thenumber of janitors working at the
plant from eight (8) to seven (7).Private respondent Paulino Roman, one of the
janitors, was recalled by CSI onFebruary 15, l988 for reassignment. However,
Roman refused to acknowledgereceipt of the recall memorandum.On March 9,
1988, Union Carbide formally notified CSI of the termination of their janitorial
service agreement, effective April 1, 1988, citing as reason the global buy-out by
Rhone-Poulenc, Agrochemie, France of Union Carbides Inc.'s agro-
chemicalbusiness.CSI thereafter issued a memorandum dated March 20, 1988 to
the seven remaining janitors assigned to the Namayan plant, including
respondent Urcisio Orain, recallingand advising them to report to the CSI office
for reassignment. Like Roman, the janitors refused to acknowledge receipt of the
recall memorandum.Meanwhile, in anticipation of the March 31, 1988 pull-out by
Union Carbide, thepetitioner started screening proposals by prospective service
contractors. Rhone-Poulenc likewise invited CSI to submit to its Bidding
Committee a cost quotation ofits janitorial services. However, another contractor,
the Marilag Business andIndustrial Services, Inc. passed the bidding committee's
standards and obtained the janitorial services contract.On April 1, 1988, the eight
janitors reported for work at the Namayan plant but wererefused admission and
were told that another group of janitors had replaced them.These janitors then
filed separate complaints for illegal dismissal, payment of 13thmonth salary,
service leave and overtime pay against Union Carbide, Rhone-Poulenc and CSI.
ISSUES
1.Whether or not the janitors were employees of Union Carbide
2.Whether or not the CSI is a labor only contractor
3.Whether or not petitioner absorbed the janitors in its workforce

RULING
The court held that the petition is meritorious. In determining the existence of
employer-employee relationship, the following elements are generally
considered, namely: (1) the selection and engagement of employees (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct — although the latter is the most important element. There is
no employer-employee relationship between Union Carbide and the respondent
janitors. The respondents themselves admitted that they were selected and hired
by CSI and were assigned to Union Carbide. CSI likewise acknowledged that the
two janitors were its employees. The janitors drew their salaries from CSI and not
from Union Carbide. CSI exercised control over these janitors through Richard
Barroga, also a CSI employee, who gave orders and instructions to CSI janitors
assigned to the Namayan

ESCARIO ET.AL. VS. NLRC

G.R. NO. 124055
JUNE 8, 2000
J.GUTTIERREZ, JR.

Facts:
Petitioners are merchandisers of respondent company. They withdraw stocks
from the warehouse, fix the prices, price-tagging, displaying the products and
inventory. They were paid by the company through an agent to avoid liability.
They claim that they were under the control and supervision of the company.
They asked for regularization of their status. They were then given notice of their
termination. The company denied any employer-employee relationship. They
claim that they used an agent or independent contractors to sell the merchandise.
The Labor Arbiter ruled that there was an employer-employee relationship. The
NLRC set aside the decision and said that there was no such relationship. The
agent was a legitimate independent contractor.

Issue:
Whether or not the petitioners are employees of the company.

Held:
The Court ruled that there is no employer-employee relationship and that
petitioners are employees of the agent. The agent is a legitimate independent
contractor. Labor-only contractor occurs only when the contractor merely
recruits, supplies or places workers to perform a job for a principal. The labor-
only
contractor doesn’t have substantial capital or investment and the workers
recruited perform activities
directly related to the principal business of the employer. There is permissible
contracting only when the contractor carries an independent business and
undertakes the contract in his own manner and method, free from the control of
the principal and the contractor has substantial capital or investment. The
agent ,and not the company, also exercises control over the petitioners. No
documents were submitted to prove that the company exercised control over
them. The agent hired the petitioners. The agent also pays the petitioners, no
evidence was submitted showing that it was the company paying them and not
the agent. It was also the agent who terminated their services. By petitioning for
regularization, the petitioners concede that they are not regular employees.

RADIO COMMUNICATION OF THE PHILIPPINES INC. VS.

SECRETARY OF LABOR
G.R. NO. 77959
JANUARY 9, 1989

Facts: On May 4, 1981, petitioner, a domestic corporation engaged in the

telecommunications business, filed with the National Wages Council
an application for exemption from the coverage of Wage Order No. 1.
The application was opposed by respondent United RCPI Communications Labor
Association (URCPICLA-FUR), a labor organization affiliated with the Federation
of Unions of Rizal (FUR).

On May 22, 1981, the National Wages Council disapproved saidapplication and
ordered petitioner to pay its covered employees the mandatory living allowance
of P2.00 daily effective March 22, 1981.

As early as March 13, 1985, before the aforesaid case was elevated to this Court,
respondent union filed a motion for the issuance of a writ of execution, asserting
therein its claim to 15% of the total backpay due to all its members as "union
service fee" for having successfully prosecuted the latter's claim for payment of
wages and for reimbursement of expenses incurred by FUR and prayed for the
segregation and remittance of said amount to FUR thru its NationalPresident.

On October 24, 1985, without the knowledge and consent of respondent union,
petitioner entered into a compromise agreementwith Buklod ng Manggagawa sa
RCPI-NFL (BMRCPI-NFL) as the new bargaining agent of oppositors
RCPI employees. Thereupon, the parties filed a joint motion praying for the
dismissal of the decision of the National Wages Council for it had already been
novated by the Compromise Agreement re-defining the rights and obligations of
the parties. Respondent Union on November 7, 1985, countered by opposing the
motion and alleging that one of the signatories thereof - BMRCPI-NFL is not a
party in interest in the case but that it was respondent Union which represented
oppositors RCPI employees all the way from the level of the National Wages
Council up the Supreme Court. Respondent Union, therefore, claimed that
the Compromise Agreement is irregular and invalid, apart from the fact that
there was nothing to compromise in the face of a final and executory decision.

Director Severo M. Pucan issued an Order dated November 25, 1985 awarding to
URCPICLA-FUR and FUR 15% of the total backpay of RCPI employees as their
union service fees, and directing RCPI to deposit said amount with the cashier of
the Regional Office for proper disposition to said awardees. Despite said order,
petitioner paid in full the covered employees on November 29, 1985, without
deducting the union service fee of 15%. In an order dated May 7, 1986, NCR
officer-in-charge found petitioner RCPI and its employees jointly and severally
liable for the payment of the 15% union service fee amounting to P427,845.60 to
private respondent URCPICLA-FUR and consequently ordered the garnishment
of petitioner's bank account to enforce said claim.

Secretary of Labor and Employment issued an order on August 18, 1986

modifying the order appealed from by holding petitioner solely liable to
respondent union for 10% of the awarded amounts as attorney's fees.

Issue: Whether or not public respondents acted with grave abuse of discretion
amounting to lack of jurisdiction in holding the petitioner solely liable for "union
service fee” to respondent URCPICLA-FUR.

Held: No. Attorney's fee due the oppositor is chargeable against RCPI. The
defaulting employer or government agency remains liable for attorney's fees
because it compelled the complainant to employ the services of counsel by
unjustly refusing to recognize the validity of the claim. (Cristobal vs. ECC)

It is undisputed that oppositor (private respondent herein) was the counsel on

record of the RCPI employees in their claim for EC0LA under Wage Order No. 1
since the inception of the proceedings at the National Wages Council up to
the Supreme Court. It had, therefore, a valid claim for attorney's fee which it
called union service fee.

As is evident in the compromise agreement, petitioner was bound to pay only

30% of the amount due each employee on November 30, 1985, while the balance
of 70% would still be the subject of renegotiation by the parties. Yet, despite such
conditions beneficial to it, petitioner paid in full the backpay of its employees on
November 29, 1985, ignoring the service fee due the private respondent. Worse,
petitioner supposedly paid to one Atty. Rodolfo M. Capocyan the 10% fee that
properly pertained to herein private respondent, an unjustified and baffling
diversion of funds.

Finally, petitioner cannot invoke the lack of an individual written authorization

from the employees as a shield for its fraudulent refusal to pay the service fee of
private respondent. Be that as it may, the lack thereof was remedied and supplied
by the execution of thecompromise agreement whereby the employees, expressly
approved the 10% deduction and held petitioner RCPI free from any claim, suit or
complaint arising from the deduction thereof. When petitioner was thereafter
again ordered to pay the 10% fees to respondent union, it no longer had any legal
basis or subterfuge for refusing to pay the latter.

We agree that the Labor Code in requiring an individual written authorization as

a prerequisite to wage deductions seeks to protect the employee against
unwarranted practices that would diminish his compensation without his
knowledge and consent. However, for all intents and purposes, the deductions
required of the petitioner and the employees do not run counter to the express
mandate of the law since the same are not unwarranted or without their
knowledge and consent. Also, the deductions for the union service fee in question
are authorized by law and do not require individual check-off authorizations

APODACA VS. NLRC

G.R. NO. 80039
APRIL 18, 1989

FACTS:
Petitioner was employed in respondent corporation. He was persuaded by
respondent Mirasol to subscribe to 1,500 shares or for a total of P150,000.00. He
paid P37,500.00. On September 1, 1975, petitioner was appointed President and
General Manager of the respondent corporation. However, on January 2, 1986,
he resigned. Petitioner instituted with the NLRC a complaint against private
respondents for the payment of his unpaid wages, his cost of living allowance, the
balance of his gasoline and representation expenses and his bonus compensation
for 1986. Private respondents admitted that there is due to petitioner the amount
of P17,060.07 but this was applied to the unpaid balance of his subscription in
the amount of P95,439.93. Petitioner questioned the set-off alleging that there
was no call or notice for the payment of the unpaid subscription and that,
accordingly, the alleged obligation is not enforceable.

ISSUES:
Whether or not NLRC has jurisdiction to resolve a claim for non-
payment of stock subscriptions to a corporation. (2) If so, whether or not an
obligation arising there from be offset against a money claim of an employee
against the employer.

RULING:
NLRC has no jurisdiction to determine such intra-corporate
disputebetween the stockholder and the corporation as in the matter of unpaidsu
bscriptions. This controversy is within the exclusive jurisdiction of the Securities
and Exchange Commission.(2) No. the unpaid subscriptions are not due and
payable until a call is made by the corporation for payment. Private respondents
have not presented a resolution of the board of directors of Respondent
Corporation calling for the payment of the unpaid subscriptions. It does not even
appear that a notice of such call has been sent to petitioner by the respondent
corporation. As there was no notice or call for the payment of unpaid
subscriptions, the same is not yet due and payable. Even if there was a call for
payment, the NLRC cannot validly set it off against the wages and other benefits
due petitioner. Article 113 of the Labor Code allows such
adeduction from the wages of the employees by the employer, only in threeinstan
ces

NATIONAL FEDERATION OF LABOR VS. NLRC

G.R. NO. 103586
JULY 21, 1994

Facts: Several Wage Orders were promulgated by the then President Ferdinand
E. Marcos. This allegedly resulted to a wage distortion between the regular and
the casual employees. Grievance meetings were held by petitioner National
Federation of Labor ("NFL") and private respondent Company addressing the
impact which implementation of the various Wage Orders had on the wage
structure of the Company. On 21 June 1984, all the casual or non-regular
employees of private respondent Company (at least in its Davao Plant) were
"regularized," or converted into regular employees, pursuant to the request of
petitioner NFL. On 1 July 1984, the effectivity date of the 1984 Collective
Bargaining Agreement between NFL and the Company, all regular employees of
the Company received an increase of P1.84 in their daily wage; the regular daily
wage of the regular employees thus became P35.84 as against P34.00 per day for
non-regular employees. As a result of the implementation of Wage Order No. 6,
casual employees received an increase of their daily wage from P34.00 to P36.00.
At the same time, the Company unilaterally granted an across-the-board increase
of P2.00 in the daily rate of all regular employees, thus increasing their daily
wage from P35.84 to P37.84. Further, on 1 July 1985, the anniversary date of the
increases under the CBA, all regular employees who were members of the
collective bargaining unit got a raise of P1.76 in their basic daily wage, which
pushed that daily wage from P37.84 to P39.60, as against the non-regular's basic
wage of P36.00 per day. Finally, by November 1987, the lowest paid regular
employee had a basic daily rate of P64.64, or P10.64 more than the statutory
minimum wage paid to a non-regular employee. On 11 November 1987, the
NLRC En Banc rendered a decision which in effect found the existence of wage
distortion and required the Company to pay a P1.00 wage increase effective 1
May 1984. In the computation submitted by the Union, there is a need to restore
the P2.56 gap between non-regulars or "casuals" and "regular workers." This
difference in the basic wage of these workers was existing at the time of the
conclusion of the collective bargaining agreement and before the implementation
of Wage Orders No. 4 & 5. The imprecise claim of respondent that there is P3.60
gap between non-regular and regulars may not be sustained because as
aforestated, this amount represents negotiated wage increase which should not
be considered covered and in compliance with the wage orders. Considering,
however, the present economic conditions and the outlay involved in correcting
the distortion in the wages of respondent's workers, this Commission, in the
exercise of its arbitral powers, feels that an increase of P1.00 on the present basic
wage of regular workers would significantly rectify or minimize the distortion in
the wage structure of respondent company caused by the implementation of the
various wage orders. Respondent is, therefore, required to implement the P1.00
wage increase effective May 1, 1984 when Wage Order 4 took effect. On motion
for partial reconsideration filed by the Company, the above quoted portion of the
NLRC En Banc'sdecision was reconsidered and set aside by the NLRC Fifth
Division. 3 The Fifth Division of the NLRC in effect found that while a wage
distortion did exist commencing 16 June 1984, the distortion persisted only for a
total of fifteen (15) days and accordingly required private respondent company to
pay "a wage increase of P2.00 per day to all regular workers effective June 16,
1984 up to June 30, 1984 or a total of fifteen (15) days." 4 The rest of the decision
of 11 November 1987 was left untouched.

Issue: Whether there existed a wage distortion

Held: Yes.
As used in Article 124 of the Labor Code, a wage distortion shall mean a situation
where an increase in prescribed wage rates results in the elimination or
severe contraction of intentional quantitative differences in wage or salary rates
between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based on skills,
length of service, or other logical bases of differentiation. The concept of wage
distortion assumes an existing grouping or classification of employees which
establishes distinctions among such employees on some relevant or legitimate
basis. This classification is reflected in a differing wage rate for each of the
existing classes of employees. The wage distortion anticipated in Wage Orders
Nos. 3, 4, 5 and 6 was a "distortion" (or "compression") which ensued from the
impact of those Wage Orders upon the different wage rates of the several classes
of employees. Thus distortion ensued where the result of implementation of one
or another of the several Wage Orders was the total elimination or the severe
reduction of the differential or gap existing between the wage rates of the
differing classes of employees. There did exist a two-fold classification of
employees within the private respondent Company: regular employees on the one
hand and casual (or non-regular) employees on the other. As can be seen from
the figures referred to earlier, the differential between these two (2) classes of
employees existing before Wage Order No. 3 was reduced to zero upon the
effectivity of Wage Order No. 5 on 16 June 1984. Obviously, distortion —
consisting of complete elimination of the wage rate differential — had occurred. It
is equally clear, however, that fifteen (15) days later, on 1 July 1984, upon
effectivity of the wage increase stipulated in the collective bargaining agreement
between the parties, a gap or differential of P1.84 was re-created. This restored
differential persisted after the effectivity of Wage Order No. 6 on 1 November
1984. By operation of the same CBA, by 1 July 1985, the wage differential had
grown to P3.60.

MANILA MANDARIN EMPLOYEES UNION VS. NLRC

GR 108556
NOVEMBER 19, 1996

FACTS:
The union filed with the NLRC arbitration branch a complaint on wage
distortion. The labor arbiter ruled in favor of the Union while the NRLC
Commissioner Zapanta reversed the same. The Union contends that the
Mandarin Hotel filed its appeal three days beyond the prescribed period.

ISSUES:
Whether or not NLRC acquired jurisdiction to take cognizance of Mandarin’s
appeal from Labor Arbiter
.
RULING:
The Court ruled that the Commission acted correctly in accepting and
acting on Mandarin’s appeal. The employee who was authorized to receive
payment was not around so the respondent was allowed to pay docketing fee on
the next business day which was February 4, 1991. In view of the considerations
and in the interest of justice was quite served when Mandarin’s appeal was given
due course despite delayed payment of fees the reglamentary period confers a
directory, not a mandatory, power to dismiss an appeal.

CAGAYAN SUGAR MILLING CO., V SECRETARY OF LABOR ET AL.,

G.R. NO. 128399
JANUARY 15, 1998

Facts: On November 16, 1993, Regional Wage Order No. RO2-02 was issued by
the Regional Tripartite Wage and Productivity Board, Regional Office No. II of
the Department of Labor and Employment (DOLE). It provided, inter alia, that:
Sec. 1. Upon effectivity of this Wage Order, the statutory minimum wage rates
applicable to workers and employees in the private sector in Region II shall be
increased as follows: P 14.00 per day . . . Cagayan. On September 12 and 13, 1994,
labor inspectors from the DOLE Regional Office examined the books of petitioner
to determine its compliance with the wage order. They found that petitioner
violated the wage order as it did not implement an across the board increase in
the salary of its employees.

Issue: Whether or not the petitioner violates the Wage Oder that mandates the
increase of minimum wage, and Regional Wage Order No. RO2-02 is valid, and
violates Article 123 of the Labor Code?

Held: No, Article 123 of the Labor Code provides: Wage Order. - Whenever
conditions in the region so warrant, the Regional Board shall investigate and
study all pertinent facts, and, based on the standards and criteria herein
prescribed, shall proceed to determine whether a Wage Order should be issued.
Any such Wage Order shall take effect after (15) days from its complete
publication in at least one (1) newspaper of general circulation in the region. In
the performance of its wage-determining functions, the Regional Board shall
conduct public hearings/consultations giving notices to employees' and
employers' groups and other interested parties. In sum, we hold that RO2-02-A is
invalid for lack of public consultations and hearings and non-publication in a
newspaper of general circulation, in violation of Article 123 of the Labor Code.
We likewise find that public respondent Secretary of Labor committed grave
abuse of discretion in upholding the findings of Regional Director Ricardo S.
Martinez, Sr. that petitioner violated Wage Order RO2-02. Decision of the
Secretary of Labor, dated October 8, 1996, is set aside for lack of merit.

ECOP VS. NWPC

G.R. NO. 96169
SEPTEMBER 24, 1991
J. SARMIENTO

FACTS:
Petitioners ECOP questioned the validity of the wage order issued by the RTWPB
dated October 23, 1990 pursuant to the authority granted by RA 6727. The wage
order increased the minimum wage by P17.00 daily in the National Capital
Region.

The wage order is applied to all workers and employees in the private sector of an
increase of P 17.00 including those who are paid above the statutory wage rate.
ECOP appealed with the NWPC but dismissed the petition.

The Solicitor General in its comment posits that the Board upon the issuance of
the wage order fixed minimum wages according to the salary method. Petitioners
insist that the power of RTWPB was delegated, through RA 6727, to grant
minimum wage adjustments and in the absence of authority, it can only adjust
floor wages.

ISSUE:
Whether or not the wage order issues by RTWPB dated October 23, 1990 is valid.

HELD:
The Court agrees with the Solicitor General. It noted that there are two ways in
the determination of wage, these are floor wage method and salary ceiling
method. The floor wage method involves the fixing of determinate amount that
would be added to the prevailing statutory minimum wage while the salary
ceiling method involves where the wage adjustment is applied to employees
receiving a certain denominated salary ceiling.

RA 6727 gave statutory standards for fixing the minimum wage.

The Commission noted that the increasing trend is toward the salary-cap method,
which has reduced disputes arising from wage distortions (brought about,
apparently, by the floor-wage method). Precisely, Republic Act No. 6727 was
intended to rationalize wages, first, by providing for full-time boards to police
wages round-the-clock, and second, by giving the boards enough powers to
achieve this objective. The Court is of the opinion that Congress meant the boards
to be creative in resolving the annual question of wages without labor and
management knocking on the legislature's door at every turn. The petition is
DENIED.

MEYCAUAYAN COLLEGE V. DRILON

G.R. NO. 81122
MAY 7, 1990

Facts: Petitioner is a private educational institution operating in Meycauayan,

Bulacan. On January 16, 1987, its board of trustees recognized the Meycauayan
College Faculty and Personnel Association as the employees' union in the
Meycauayan College. Prior to said recognition or on July 17, 1983, petitioner and
the union, then headed by Mrs. Teresita V. Lim, entered into a collective
bargaining agreement for 1983-1986. Article IV thereof provided the salary scale
for teachers. Later on the union discovered that provisions of said article were not
implemented. Consequently, on March 27, 1987, the union filed with the
Department of Labor and Employment, Regional Office No. III in San Fernando,
Pampanga, a notice of strike on the ground of unfair labor practice. Petitioner's
contention is that an agreement on a salary scale should be distinguished from an
agreement on a salary increase. Thus, it argues in fine that an agreement on a
salary scale should be considered as an addition to the salary increase imposed by
law and viceversa.

Issue:
Whether or not increases in employees' salaries resulting from the
implementation of presidential decrees and wage orders, which are over and
above the agreed salary scale contracted for between the employer and the
employees in a collective bargaining agreement, preclude the employees from
claiming the difference between their old salaries and those provided for under
said salary scale.

Held:
Increments to the laborers’ financial gratification, be they in the form of salary
increases or changes in the salary scale are aimed at one thing - improvement of
the economic predicament of the laborers. As such they should be viewed in the
light of the States avowed policy to protect labor. Thus, having entered into an
agreement with its employees, an employer may not be allowed to renege on its
obligation under a collective bargaining agreement should, at the same time, the
law grant the employees the same or better terms and conditions of employment.
Employee benefits derived from law are exclusive of benefits arrived at through
negotiation and agreement unless otherwise provided by the agreement itself or
by law.
The one-year prescriptive period is inapplicable in this case because of peculiar
factual circumstances which petitioner has not denied. Although the collective
bargaining agreement covers school years 1983 to 1986, a copy of the agreement
was only made available to the union in 1987. Immediately thereafter, the union
sought its implementation. The union members might have been aware of the
existence of the collective bargaining agreement but that fact that their president
was actually a management employee being petitioner's registrar, they must have
been deterred from demanding its implementation earlier. Hence, to apply the
provisions of Article 290 (Art. 291) would be unfair and prejudicial to the union
members particularly those who have served petitioner for a number of years
who stand to benefit most from the salary scale.

ST. JOSEPH’S COLLEGE VS. ST. JOSEPH’S COLLEGE WORKERS’

ASSOCIATION (SAMAHAN)
G.R. NO. 155609
JANUARY 9, 2005

Facts:
Petitioner and respondent has discrepancies in computing the incremental
proceeds of the tuition fee that is to be used for the payment in payment of
personnel benefits. Respondent’s figures are higher than that of the petitioner’s.
The discrepancy was due to the differences in the income received by the school
in the previous year and the present year. Petitioner avers that the base figure for
computing the previous year’s income should be based on the previous school
year’s number of enrollees. Further, petitioner defends that it could not give the
amount computed by the respondent because for them the school has not gained
income but losses caused by the drop in the enrollment rate. On the other hand,
respondents contend that petitioner’s computations would result in to a sharp
reduction of incremental proceeds. Thus, a small share of the proceeds shall be
given to the respondents. Eventually, this leads both parties to undergo voluntary
arbitration. The Voluntary Arbiters decided in favor of the respondents and
ordered the petitioner to pay the respondents back wages, allowance and other
benefits retroactively. The Court of Appeals likewise sided with the petitioners.

Issue:
Whether or not the petitioner’s computations of incremental proceeds are with
merit and in accordance with the law?

Ruling:
No, the Court ruled in accordance with Section 5(2) of Republic Act 6728 which
allows tuition fee increases in private school given that 70% of the said increase
should be disbursed as salaries, wages, allowances, and other benefits for the
teaching and non-teaching personnel. Thus, despite the petitioner’s contention
that it could not grant the computation of the respondent due to losses, the
former should comply with this said rule. The Court could not change what the
legislature has laid down. Moreover, as to the contention of the school that it has
incurred losses, the petitioner has failed to actually show the actual losses it has
suffered.
Therefore, the Court denies the petition and affirms the decisions rendered by the
lower courts.

COCOFED ET. AL., VS. HON. CRESENCIANO B. TRAJANO

G.R. NO. 982767
FEBRUARY 15, 1995
ROMERO, J.

FACTS: Philippine Coconut Producers Federation operates petitioner COCOFED

(Kalamansig), a coconut plantation utilized as a demonstration farm for
replanting and/or training area for coconut farmers, located in Kalamansig,
Sultan Kudarat.
On November 15, 1988, a complaint inspection was conducted by the Department
of Labor and Employment, Region XII, Cotabato City in response to complaints
filed by two of petitioner's employees, Alex Edicto and Delia Pahuwayan. The
inspection revealed that petitioner was guilty of underpayment of wages,
emergency cost of living allowance (ECOLA) and 13th month pay. Accordingly,
notice of inspection results was issued: requiring petitioner to effect restitution or
correction within five (5) days from notice.

Summary Petitioner submitted its position paper claiming that it should be

classified as an establishment with less than 30 employees and with a paid-up
capital of P500,000.00 or less as evidenced by the assessment of the municipal
treasurer. Moreover, complainants worked for less than eight hours, a minimum
of four and maximum of six.
. . . A three (3) year actual payrolls from March 1985 to February 1989 showing
the daily actual payment made by the respondent to involved workers are
substantial evidence against the mere memorandum issued by the respondents
on the matter. Further, such payrolls submitted by respondents are not mere
summaries of daily efforts of workers but these are daily records showing workers
actual daily rate.

ISSUE: Whether or not the petitioner was justified in paying an amount less
than the statutory minimum wage.

HELD: Petitioner would have us overturn the factual finding of public

respondents that its employees are daily paid workers. This we are unable to do
for the payrolls submitted by it support the latters' position. Findings of
administrative agencies which have acquired expertise because their jurisdiction
is confined to specific matters are generally accorded not only respect but finality.
Moreover, there is absolutely nothing in the records which show that petitioner's
employees worked for less than eight hours. Finally, there would have been no
need for petitioner to make an offer increasing the wage to P45.00 per day if
complainants were indeed piece rate workers, as it claimed and if their wages
were not underpaid, as found by public respondents.
WHEREFORE, the petition is DISMISSED

ODIN SECURITY AGENCY V. HON. DIONISIO DELA SERNA ET. AL,

G.R. NO. 87439
FEB. 21, 1990

Facts:
The private respondents (employees) filed with the DOLE a complaint charging
the petitioner (employer) with underpayment of wages, illegal deductions, non
payment of night shift differential, overtime pay, etc. When conciliation efforts
failed, the parties were required to submit their position papers. Based on the
position papers, the Regional Director issued an order directing the employer to
pay the employees the benefits prayed for.

Claiming that he was denied due process, the petitioner filed a motion for
reconsideration which was treated as an appeal. The Undersecretary affirmed
with modification the order of the Regional Director.

Hence, this petition for certiorari and prohibition

Ruling:
Requirement of the process is satisfied when the parties are given an
opportunity to submit position papers; what the fundamental law abhors is not
absence of previous notice but the absolute lack of opportunity to be heard. –
The petitioner was not denied due process, for several hearings were in fact
conducted by the hearing officer of the Regional Office of the DOLE and the
parties submitted position papers upon which the Regional Director based his
decision in the case. The requirements of due process are satisfied when the
parties are given an opportunity to submit position papers.
Principle of jurisdiction by estoppel. – The petitioner is estopped from
questioning the alleged lack of jurisdiction of the Regional Director over the
private respondents’ claims. Petitioner submitted to the jurisdiction of the
Regional Director by taking part in the hearings before him and by submitting a
position paper. This act of participation amounts to estoppel, [that is, action
speaks louder than words: the law does not allow a person to speak against his
own act or deed.]

URBANES, JR. VS. SEC. OF LABOR

GR NO. 122791
FEBRUARY 19, 2003

FACTS: Petitioner Placido O. Urbanes, Jr., doing business under the name and
style of Catalina Security Agency, entered into an agreement to provide security
services to respondent Social Security System (SSS). During the effectivity of the
agreement, petitioner, by letter of May 16, 1994, requested the SSS for the
upward adjustment of their contract rate in view of Wage Order No. NCR-03
which was issued by the Regional Tripartite Wages and Productivity Board-NCR
pursuant to Republic Act 6727 otherwise known as the Wage Rationalization
Act .On June 24, 1994, petitioner pulled out his agency's services from the
premises of the SSS and another security agency, Jaguar, took over. On June 29,
1994, petitioner filed a complaint with the DOLE-NCR against the SSS seeking
the implementation of Wage Order No. NCR-03.The Regional Director of the
DOLE-NCR rendered judgment in favor of the petitioner. SSS appealed to the
Secretary of Labor. The Secretary of Labor set aside the order of the Regional
Director and the Secretary held petitioner's security agency "JOINTLY AND
SEVERALLY liable for wage differentials, the amount of which should be paid
DIRECTLY to the security guards concerned.

ISSUE: Whether or not the Secretary of Labor have jurisdiction to review

appeals from decisions of the Regional Directors in complaints filed under Article
129 of the Labor Code.

RULING: In the case at bar, even if petitioner filed the complaint on his and also
on behalf of the security guards, the relief sought has to do with the enforcement
of the contract between him and the SSS which was deemed amended by virtue of
Wage Order No. NCR-03. The controversy subject of the case at bar is thus a civil
dispute, the proper forum for the resolution of which is the civil courts. But even
assuming arguendo that petitioner's complaints were filed with the proper
forum, for lack of cause of action it must be dismissed. Articles 106, 107 and 109
of the Labor Code provide:

ART. 106. CONTRACTOR OR SUBCONTRACTOR. — Whenever an employer

enters into contract with another person for the performance of the former's
work, the employees of the contractor and of the latter's subcontractor, if any,
shall be paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wage of his
employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
xxx xxx xxx (Emphasis and underscoring)
ART. 107.INDIRECT EMPLOYER. — The provisions of the immediately
preceding Article shall likewise apply to any person, partnership, association or
corporation which, not being an employer, contracts with an independent
contractor for the performance of any work, task, job or project.

ART. 109.SOLIDARY LIABILITY. — The provisions of existing laws to the

contrary notwithstanding, every employer or indirect employer shall be held
responsible with his contractor or subcontractor for any violation of any
provision of this Code. For purposes of determining the extent of their civil
liability under this Chapter, they shall be considered as direct employers. In fine,
the liability of the SSS to reimburse petitioner arises only if and when petitioner
pays his employee-security guards "the increases" mandated by Wage Order No.
NCR-03. The records do not show that petitioner has paid the mandated
increases to the security guards. The security guards in fact have filed a complaint
with the NLRC against petitioner relative to, among other things, underpayment
of wages.

VICENTE ATILANO/ROSE SHIPPING LINES VS. DE LA SERNA

G.R. NO. 82488
FEBRUARY 28, 1990

FACTS
On 20 May 1985, private respondents filed a letter-complaint in the Regional
Office of the then Ministry of Labor and Employment, Cebu City, against
petitioner Rose Shipping Lines and its Proprietor/Manager Vicente Atilano
docketed as LSED Case No. 055-85. The letter-complaint alleged violations by
petitioner of labor standard laws on minimum wages, allowances, 13th month
pay and overtime pay.

Acting on the letter-complaint, the Office of the Regional Director ordered a

Labor Standards and Welfare Officer (LSW officer, hereinafter) to conduct a
complaint inspection on 22 July 1985 at the establishment of petitioner in Cebu
City.
Several conciliation conferences on the motion to dismiss were subsequently held
and both parties agreed that they would submit their respective position papers
after which petitioner's motion to dismiss would be deemed submitted for
resolution.

On 24 April 1986, public respondent Regional Director denied petitioner's

motion to amiss for lack of merit. A motion for reconsideration or appeal was
filed with the Secretary of the Department of Labor and Employment on 19 May
1986. Petitioner more than a year later filed a Manifestation and Motion with the
Secretary dated 23 July 1987, enclosing therein a different set of quitclaims
and/or a also prepared by petitioner but allegedly signed by private respondents
dated 9 July 1986 (i.e., different from those earlier referred to by petitioner in
his ex-partemotion to dismiss filed with the Regional Director On 3 March 1988,
public respondent Under of Labor rendered the questioned order dismissing
petitioner's motion for reconsideration or appeal for lack of merit.

ISSUE
Whether or not the public respondents, Regional Director and Undersecretary of
Labor, have jurisdiction over the subject matter of the case.

RULING
We do not find petitioner's argument persuasive. We believe that the question of
the authenticity or genuineness of the quitclaims, releases and waivers
supposedly signed by private respondents, but vehemently denied by the latter,
could be verified by the Regional Director in the course of, and in connection
with, examination of the petitioner's books and records of which such supposed
quitclaims, etc. (if at all genuine) must have fanned part. We note also that after
petitioner on 19 May 1986 filed a motion for reconsideration or appeal from the
Regional Director's order of 16 January 1986, with the Secretary of Labor, the
Secretary of Labor requested the Regional Director to conduct conferences or
hearings for the purpose of verifying the genuineness and authenticity of private
respondents' signatures on the quitclaim papers submitted by petitioner.The
quitclaim papers which petitioner alleges embodied a compromise or settlement
agreement were in any case not duly executed, that is, they were not signed in the
presence of the Regional Director or his duly authorized representative, in
disregard of the requirements of Section 8, Rule II of the Rules on the Disposition
of Labor Standards Cases in the Regional Offices. We note that petitioner did not
submit any rebuttal evidence before the Regional Director or his representatives.
Thus, the lack of inspection was cured when the Regional Director called the
parties to several conferences, at which conferences, petitioner could have
presented whatever he had in his books and records to refute the claims of
private respondents; petitioner did not do so and his failure must be deemed a
waiver of his right to contest the conclusions of the Regional Director on the basis
of the evidence and records actually made available to him.

BROKENSHIRE MEMORIAL HOSPITAL VS. HON. MINISTER OF

LABOR AND EMPLOYMENT
G.R. NO. 74621
FEBRUARY 7, 1990
PARAS, J.

Facts:
This case originated from a complaint filed by private respondents against
petitioner on September 21, 1984 with the Regional Office of the MOLE, Region
XI, Davao City for non-compliance with the provisions of Wage Order No. 5.
After due healing the Regional Director rendered a decision dated November 16,
1984 in favor of private respondents. Judgment having become final and
executory, the Regional Director issued a Writ of Execution whereby some
movable properties of the hospital (petitioner herein) were levied upon and its
operating expenses kept with the bank were garnished. The levy and garnishment
were lifted when petitioner hospital paid the claim of the private respondents
(281 hospital employees) directly, in the total amount of P163,047.50 covering
the period from June 16 to October 15, 1984. After making said payment,
petitioner hospital failed to continue to comply with Wage Order No. 5 and
likewise, failed to comply with the new Wage Order No. 6 which took effect on
November 1, 1984, prompting private respondents to file against petitioner
another complaint docketed as ROXI-LSED-14-85, which is now the case at bar.
Issue:
Whether the Regional Director has jurisdiction over money claims of workers
concurrent with the Labor Arbiter.

Held:
Regional Director has no jurisdiction over workers' money claims, the Court in
the three (3) cases above-mentioned ruled that in view of the promulgation of
Executive Order No. 111, the ruling in the earlier case of Zambales Base Metals is
already abandoned. In accordance with the rulings in Briad Agro, L.M. Camus,
and Maternity Children's Hospital, the Regional Director exercises concurrent
jurisdiction with the Labor Arbiter over money claims. Thus, Executive Order No.
111 is in the character of a curative law, that is to say, it was intended to remedy a
defect that, in the opinion of the legislative (the incumbent Chief Executive in this
case, in the exercise of her lawmaking power under the Freedom Constitution)
had attached to the provision subject of the amendment. This is clear from the
proviso: "The provisions of Article 217 to the contrary notwithstanding . . ."
Plainly, the amendment was meant to make both the Secretary of Labor (or the
various Regional Directors) and the Labor Arbiter share jurisdiction.

RA 6715 amended Art. 129 and Art. 217 of the Labor Code, to read as follows:

ART. 129.Recovery of wages, simple money claims and other benefits.—Upon

complaint of any interested party, the Regional Director of the Department of
Labor and Employment or any of the duly authorized hearing officers of the
Department is empowered, through summary proceeding and after due notice, to
hear and decide any matter involving the recovery of wages and other monetary
claims and benefits, including legal interest, owing to an employee or person
employed in domestic or household service or househelper under this code,
arising from employer-employee relations, Provided, That such complaint does
not include a claim for reinstatement; Provided, further, That the aggregate
money claims of each employee or househelper do not exceed five thousand pesos
(P5,000.00). The Regional Director or hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from the date of the filing of the same.

Viewed in the light of RA 6715 and read in consonance with the case of Briad
Agro Development Corp., as reconsidered, We hold that the instant case falls
under the exclusive original jurisdiction of the Labor Arbiter RA 6715 is in the
nature of a curative statute. Curative statutes have long been considered valid in
our jurisdiction, as long as they do not affect vested rights. In this case, We do not
see any vested right that will be impaired by the application of RA 6715.
Inasmuch as petitioner had already paid the claims of private respondents in the
amount of P163,047.50 pursuant to the decision rendered in the first complaint,
the only claim that should be deliberated upon by the Labor Arbiter should be
limited to the second amount given by the Regional Director in the second
complaint together with the proposal to offset the obligations.

SEAFDEC – AQD V. NLRC

G.R. NO. 86773
FEBRUARY 14, 1992
NOCON, J.

Facts:
Southeast Asian Fisheries Development Center-Aquaculture Department
(SEAFDEC-AQD) is a department of an international organization, the Southeast
Asian Fisheries Development Center, organized through an agreement entered
into in Bangkok, Thailand. Juvenal Lazaga was employed as a Research
Associate. Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of
termination to private respondent informing him that due to the financial
constraints being experienced by the department, his services shall be
terminated. SEAFDEC-AQD's failure to pay Lazaga his separation pay forced him
to file a case with the NLRC. The LA and NLRC ruled in favor of Lazaga.
SEAFDEC-AQD claimed that the NLRC has no jurisdiction over the case.

Issue: W/N NLRC has jurisdiction over the case? NO

Held:
Petition Granted. Southeast Asian Fisheries Development Center-Aquaculture
Department (SEAFDEC-AQD) is an international agency beyond the jurisdiction
of public respondent NLRC. Being an intergovernmental organization, SEAFDEC
including its Departments (AQD), enjoys functional independence and freedom
from control of the state in whose territory its office is located.

ZIALCITA, ET AL. V. PAL,

RO4-3-3398-76, 20
FEBRUARY 1977

Facts:
Complainant Zialcita, an international flight stewardess of PAL, wasdischarged
from the service on account of her marriage. In separating Zialcita, PALinvoked
its policy which stated that flight attendants must be single, and shall
beautomatically separated from employment in the event they subsequently
getmarried. They claimed that this policy was in accordance with Article 132 of
theLabor Code. On the other hand, Zialcita questioned her termination on
account of her marriage, invoking Article 136 of the same law.

Issue:
W/N Zialcita was validly terminated on account of her marriage.

Ruling
NO. When Presidential Decree No. 148, otherwise known as theWomen and
Child Labor Law, was promulgated in 13 March 1973, PAL’s policy hadmet its
doom. However, since no one challenged its validity, the said policy wasable to
obtain a momentary reprieve. Section 8 of PD148 is exactly the same provision
reproduced verbatim in Article 136 of the Labor Code, which waspromulgated on
1 May 1974 and took effect six months later.Although Article 132 enjoins the
Secretary of Labor to establish standardsthat will ensure the safety and health of
women employees and in appropriatecases shall by regulation require employers
to determine appropriate minimumstandards for termination in special
occupations, such as those of flight attendants,it is logical to presume that, in the
absence of said standards or regulations whichare yet to be established, the policy
of PAL against marriage is patently illegal.
Article 136 is not intended to apply only to women employed in
ordinaryoccupations, or it should have categorically expressed so. The
sweepingintendment of the law, be it on special or ordinary occupations, is
reflected inthe whole text and supported by Article 135 that speaks of non-
discriminationon the employment of women.

PHILIPPINE GLOBAL COMMUNICATIONS, INC. vs. RICARDO DE

VERA
G.R. No. 157214
June 7, 2005

FACTS: De Vera and petitioner company entered into a contract where

respondent was to attend to the medical needs of petitioner’s employees while
being paid a retainer fee of P4,000 per month. Later, De Vera was informed y
petitioner that the retainership will be discontinued. Respondent filed a case for
illegal dismissal.

ISSUE: Whether or not de Vera is an employee of PhilComm or an independent

contractor.

HELD: Applying the four fold test, de Vera is not an employee. There are several
indicators apart from the fact that the power to terminate the arrangement lay on
both parties:

from the time he started to work with petitioner, he never was included in its
payroll; was never deducted any contribution for remittance to the Social Security
System (SSS);
he was subjected by petitioner to the ten (10%) percent withholding tax for his
professional fee, in accordance with the National Internal Revenue Code, matters
which are simply inconsistent with an employer-employee relationship;
the records are replete with evidence showing that respondent had to bill
petitioner for his monthly professional fees. It simply runs against the grain of
common experience to imagine that an ordinary employee has yet to bill his
employer to receive his salary.
Finally, the element of control s absent. Petition granted
JOSE B. SARMIENTO VS. EMPLOYEES' COMPENSATION
COMMISSION & GOVERNMENT SERVICE INSURANCE SYSTEM
(NATIONAL POWER CORPORATION)
G.R. NO. L-65680
MAY 11, 1989

Facts:

Flordeliza Sarmiento was employed by the National Power Corporation in

Quezon City as accounting clerk in May 1974. At the time of her death on August
12, 1981 she was manager of the budget division. History of the deceased's illness
showed that symptoms manifested as early as April 1980 as a small wound over
the external auditory canal and mass over the martoid region. Biopsy of the mass
revealed cancer known as "differentiated squamous cell carcinoma." The
employee sought treatment in various hospitals, namely, Veterans Memorial
Hospital, United Doctors Medical Hospital and Makati Medical Center. In March
1981, a soft tissue mass emerged on her left upper cheek as a result of which her
lips became deformed and she was unable to close her left eye. She continued
treatment and her last treatment at the Capitol Medical Center on July 12, 1 981
was due to her difficulty of swallowing food and her general debility. On August
12, 1981, she succumbed to cardiorespiratory arrest due to parotid carcinoma.
She was 40 years old.

On August 25, 1983, the respondent Commission affirmed the GSIS' decision. It
found that the deceased's death causation by parotid carcinoma is not
compensable because she did not contract nor suffer from the same by reason of
her work but by reason of embryonic rests and epithelial growth.
It may be noted that the petitioner was earlier paid GSIS benefits in the amount
of P142,285.03 but the claim for employee's compensation was disallowed.

Issue:
Whether or not the petitioner is entitled to the employee’s compensation.

Held:
The wisdom of the present scheme of workmen's compensation is a matter that
should be addressed to the President and Congress, not to this Court. Whether or
not the former workmen's compensation program with its presumptions,
controversions, adversarial procedures, and levels of payment is preferable to the
present scheme must be decided by the political departments. The present law
was enacted in the belief that it better complies with the mandate on social justice
and is more advantageous to the greater number of working men and women.
Until Congress and the President decide to improve or amend the law, our duty is
to apply it.
WHEREFORE, the petition is DISMISSED. The decisions of the Government
Service Insurance System and the Employees' Compensation Commission
denying the claim are AFFIRMED.
SO ORDERED.

ZAIDA G. RARO VS EMPLOYEES' COMPENSATION COMMISSION

AND GOVERNMENT SERVICE INSURANCE SYSTEM (BUREAU OF
MINES AND GEO-SCIENCES)
G.R. NO. L-58445
APRIL 27, 1989

Facts:
On March 17, 1975 the petitioner states that she was in perfect health when
employed as a clerk by the Bureau of Mines and Geo-Sciences at its Daet,
Camarines Norte regional office. Four years later, she began suffering from
severe and recurrent headaches coupled with blurring of vision. Forced to take
sick leaves every now and then, she sought medical treatment in Manila. She was
then a Mining Recorder in the Bureau. The petitioner was diagnosed at the
Makati Medical Center to be suffering from brain tumor. A claim for disability
benefits filed by her husband with the Government Service Insurance System
(GSIS) was denied. A motion for reconsideration was similarly denied. An appeal
to the Employees' Compensation Commission resulted in the Commission's
affirming the GSIS decision.

Issue:
1. Whether brain tumor which causes are unknown but contracted during
employment is compensable under the present compensation laws.
2. Whether the presumption of compensability is absolutely inapplicable
under the present compensation laws when a disease is not listed as
occupational disease. (p. 17, Rollo)

Held:
Jurisprudence on the compensability of cancer ailments has of late become a
source of confusion among the claimants and the government agencies enforcing
the employees' compensation law. The strongly lingering influence of the
principles of 94 presumption of compensability" and "aggravation" found in the
defunct Workmen's Compensation Act but expressly discarded under the present
compensation scheme has led to conflict and inconsistency in employees'
compensation decisions.
Employees' compensation is based on social security principles. All covered
employers throughout the country are required by law to contribute fixed and
regular premiums or contributions to a trust fund for their employees. Benefits
are paid from this trust fund. At the time the amount of contributions was being
fixed, actuarial studies were undertaken. The actuarially determined number of
workers who would probably file claims within any given year is important in
insuring the stability of the said fund and making certain that the system can pay
benefits when due to all who are entitled and in the increased amounts fixed by
law.

BELARMINO VS. EMPLOYEES' COMPENSATION COMMISSION

G.R. NO. 90204
MAY 11, 1990

Facts:
This case involves a claim for benefits for the death of a lady school teacher which
the public respondents disallowed on the ground that the cause of death was not
work-connected.
Petitioner's wife, Oania Belarmino, was a classroom teacher of the Department of
Education, Culture and Sports at the Buracan Elementary School in Dimasalang,
Masbate .She had been teacher since October 18, 1971. Her husband, the
petitioner, is also a public school teacher.

That on January 14, 1982, at nine o'clock in the morning, while performing her
duties as a classroom teacher, Mrs. Belarmino who was in her 8th month of
pregnancy, accidentally slipped and fell on the classroom floor. Moments later,
she complained of abdominal pain and stomach cramps. For several days, she
continued to suffer from recurrent abdominal pain and a feeling of heaviness in
her stomach, but, heedless of the advice of her female co-teachers to take a leave
of absence, she continued to report to the school because there was much work to
do. On January 25, 1982, eleven (11) days after her accident, she went into labor
and prematurely delivered a baby girl at home.

Her abdominal pains persisted even after the delivery, accompanied by high fever
and headache. She was brought to the Alino Hospital in Dimasalang, Masbate on
February 11, 1982. Dr. Alfonso Alino found that she was suffering from
septicemia post partum due to infected lacerations of the vagina. She was
discharged from the hospital after five (5) days on February 16, 1982, apparently
recovered but she died three (3) days later. The cause of death was septicemia
post partum. She was 33 years old, survived by her husband and four (4)
children, the oldest of whom was 11 years old and the youngest, her newborn
infant.

Issue:
Whether or not that there is no merit in the public respondents' argument that
the cause of the decedent's post partum septicemia "was the infected vaginal
lacerations resulting from the decedent's delivery of her child at home" for the
incident in school could not have caused septicemia post partum.

Held:
After a careful consideration of the petition and the annexes thereof, as well as
the comments of the public respondents, we are persuaded that the public
respondents' peremptory denial of the petitioner's claim constitutes a grave abuse
of discretion.

Rule III, Section 1 of the Amended Rules on Employees' Compensation

enumerates the grounds for compensability of injury resulting in disability or
death of an employee, as follows:

Sec. 1. Grounds — (a) For the injury and the resulting disability or death to be
compensable, the injury must be the result of an employment accident satisfying
all of the following conditions:

The employee must have been injured at the place where his work requires him to
be;

The employee must have been performing his official functions; and

If the injury is sustained elsewhere, the employee must have been executing an
order for the employer.

For the sickness and the resulting disability or death to be compensable, the
sickness must be the result of an occupational disease listed under Annex "A" of
these Rules with the conditions set therein satisfied; otherwise, proof must be
shown that the risk of contracting the disease is increased by the working
conditions.

Only injury or sickness that occurred on or after January 1, 1975 and the resulting
disability or death shall be compensable under these Rules.

The argument is unconvincing. It overlooks the fact that septicemia post partum
is a disease of childbirth, and premature childbirth would not have occurred if
she did not accidentally fall in the classroom.

It is true that if she had delivered her baby under sterile conditions in a hospital
operating room instead of in the unsterile environment of her humble home, and
if she had been attended by specially trained doctors and nurses, she probably
would not have suffered lacerations of the vagina and she probably would not
have contracted the fatal infection. Furthermore, if she had remained longer than
five (5) days in the hospital to complete the treatment of the infection, she
probably would not have died. But who is to blame for her inability to afford a
hospital delivery and the services of trained doctors and nurses? The court may
take judicial notice of the meager salaries that the Government pays its public
school teachers. Forced to live on the margin of poverty, they are unable to afford
expensive hospital care, nor the services of trained doctors and nurses when they
or members of their families are in. Penury compelled the deceased to scrimp by
delivering her baby at home instead of in a hospital.
The Government is not entirely blameless for her death for it is not entirely
blameless for her poverty. Government has yet to perform its declared policy "to
free the people from poverty, provide adequate social services, extend to them a
decent standard of living, and improve the quality of life for all (Sec. 7, Art. II,
1973 Constitution and Sec. 9, Art. II, 1987 Constitution). Social justice for the
lowly and underpaid public school teachers will only be an empty shibboleth until
Government adopts measures to ameliorate their economic condition and
provides them with adequate medical care or the means to afford it. "Compassion
for the poor is an imperative of every humane society" (PLDT v. Bucay and
NLRC, 164 SCRA 671, 673). By their denial of the petitioner's claim for benefits
arising from the death of his wife, the public respondents ignored this imperative
of Government, and thereby committed a grave abuse of discretion.

HINOGUIN VS EMPLOYEES COMPENSATION COMMISSION

G.R. 84307
APRIL 17, 1989
FELICIANO, J.

Facts:

Sgt. Lemick Hinoguin was a sergeant in “A” company, 14th Infantry Battalion,
5th Infantry Division, Philippine Army. On August 1, 1985, Sgt. Hinoguin, Cpl.
Rogelio Clavo and Dft. Nicomedes Alibuyog sought permission from Capt.
Frankie Besas, to go on overnight pass to Aritao, Nueva Viscaya. Capt. Besas
orally granted them permission to go to Aritao and to take their issued firearms
with them considering that Aritao was regarded as “a critical place.”

The three soldiers went to Dft. Alibuyog’s home for a meal and some drinks. At
around 7:00 PM, the soldiers headed back to the headquarters. They boarded a
tricycle. When they reached the poblacion, Alibuyog dismounted from the
tricycle. Not noticing that his rifle’s safety lever was on “semi-automatic,” he
accidentally touched the trigger, firing a single shot in the process and hitting Sgt.
Hinoguin in the left lower abdomen. Sgt. Hinoguin died a few days after the
incident.

In the investigation conducted by the 14th Infantry Battalion, it was found that
the shooting of Sgt. Hinoguin was purely accidental in nature and that he died in
the line of duty. The Life of Duty Board of Officers recommended that all benefits
due the legal dependents of the late Sgt. Hinoguin be given.

However, when the father of the deceased made a claim from GSIS, the same was
denied on the ground that the deceased was neither at his work place nor
performing his duty as a soldier of the Philippine Army at the time of his death.
This denial was confirmed by the respondent ECC.

Issue: WON the death of Sgt. Hinoguin is compensable.

Held:
Article 167 (k) of the Labor Code as amended defines a compensable “injury”
quite simply as “any harmful change in the human organism from any accident
arising out of and in the course of the employment.” The Amended
(Implementing) Rules have, however, elaborated considerably on the simple and
succinct statutory provision. Rule III, Section 1 (a) reads:

SECTION 1. Grounds. (a) For the injury and the resulting disability or death to be
compensable, the injury must be the result of an employment accident satisfying
all of the following grounds:

The employee must have been injured at the place work requires him to be;

The employee must have been performing his official functions; and

If the injury is sustained elsewhere, the employee must have been executing an
order for the employer.

The concept of a “work place” referred to in Ground 1, for instance, cannot always
be literally applied to a soldier on active duty status, as if he were a machine
operator or a worker in an assembly line in a factory or a clerk in a particular
fixed office. Obviously, a soldier must go where his company is stationed. In the
instant case, Aritao, Nueva Viscaya was not, of course, Carranglan, Nueva Ecija.
Aritao being approximately 1-1/2 hours away from the latter by public
transportation. But Sgt. Hinoguin, Cpl. Clavo and Dft. Alibuyog had permission
from their Commanding Officer to proceed to Aritao, and it appears to us that a
place which soldiers have secured lawful permission to be at cannot be very
different, legally speaking, from a place where they are required to go by their
commanding officer. They were not on vacation leave.

It may be noted in this connection that a soldier on active duty status is really on
24 hours a day official duty status and is subject to military discipline and
military law 24 hours a day. He is subject to call and to the orders of his superior
officers at all times, 7 days a week, except, of course, when he is on vacation leave
status (which Sgt. Hinoguin was not). Indeed, it appears to us that a soldier
should be presumed to be on official duty unless he is shown to have clearly and
unequivocally put aside that status or condition temporarily by, e.g., going on an
approved vacation leave.

Thus, we think that the work-connected character of Sgt. Hinoguins injury and
death was not effectively precluded by the simple circumstance that he was on an
overnight pass to go to the home of Dft. Alibuyog, a soldier under his own
command. Sgt. Hinoguin did not effectively cease performing “official functions”
because he was granted a pass. While going to a fellow soldier’s home for a few
hours for a meal and some drinks was not a specific military duty, he was
nonetheless in the course of performance of official functions.
GSIS VS CA & F. ALEGRE
G.R. NO. 128524
APRIL 20, 1999

Facts:

Private respondent Felonila Alegre’s deceased husband, SPO2 Florencio A.

Alegre, was a police officer assigned to the Philippine National Police station in
the town of Vigan, Ilocos Sur. On December 6, 1994, he was driving his tricycle
and ferrying passengers within the vicinity of Imelda Commercial Complex when
SPO4 Alejandro Tenorio, Jr., Team/Desk Officer of the Police Assistance Center
located at said complex, confronted him regarding his tour of duty. SPO2 Alegre
allegedly snubbed SPO4 Tenorio and even directed curse words upon the latter.
A verbal tussle then ensued between the two which led to the fatal shooting of the
deceased police officer.

Private respondent seasonably filed a claim for death benefits with petitioner
Government Service Insurance System (GSIS) pursuant to Presidential Decree
No. 626. In its decision on August 7, 1995, the GSIS, however, denied the claim
on the ground that at the time of SPO2 Alegre’s death, he was performing a
personal activity which was not work-connected. Subsequent appeal to the
Employees’ Compensation Commission (ECC) proved futile as said body, in a
decision dated May 9, 1996, merely affirmed the ruling of the GSIS.

Issue:
Whether or not a moonlighting policeman’s death be considered compensable?

Held:
The private respondent finally obtained a favorable ruling in the Court of Appeals
when on February 28, 1997, the appellate court reversed the ECC’s decision and
ruled that SPO2 Alegre’s death was work-connected and, therefore, compensable.
Citing Nitura v. Employees’ Compensation Commission and Employees’
Compensation Commission v. Court of Appeals,[4] the appellate court explained
the conclusion arrived at, thus:

“The Supreme Court held that the concept of a ‘workplace’ cannot always be
literally applied to a person in active duty status, as if he were a machine operator
or a worker in an assembly line in a factory or a clerk in a particular fixed office.

The deceased was driving his tricycle, with passengers aboard, when he was
accosted by another police officer. This would lend some semblance of viability
to the argument that he was not in the performance of official duty at the time.
However, the argument, though initially plausible, overlooks the fact that
policemen, by the nature of their functions, are deemed to be on a round-the-
clock duty.”
Aggrieved, GSIS comes to us on petition for review on certiorari reiterating its
position that SPO2 Alegre’s death lacks the requisite element of compensability
which is, that the activity being performed at the time of death must be work-
connected.

Under the pertinent guidelines of the ECC on compensability, it is provided that

“for the injury and the resulting disability or death to be compensable, the injury
must be the result of an employment accident satisfying all of the following
conditions:

The employee must have been injured at the place where his work requires him to
be;

The employee must have been performing his official functions; and

If the injury is sustained elsewhere, the employee must have been executing an
order for the employer.”[5]

As to the question of whether or not he was performing an official function at the

time of the incident, it has been held that a soldier on active duty status is really
on a 24 hours a day official duty status and is subject to military discipline and
military law 24 hours a day. He is subject to call and to the orders of his superior
officers at all times, seven (7) days a week, except, of course, when he is on
vacation leave status. Thus, a soldier should be presumed to be on official duty
unless he is shown to have clearly and unequivocally put aside that status or
condition temporarily by going on approved vacation leave.”

The Court did not justify its grant of death benefits merely on account of the rule
that soldiers or policemen, as the case may be, are virtually working round-the-
clock. Note that the Court likewise attempted in each case to find a reasonable
nexus between the absence of the deceased from his assigned place of work and
the incident that led to his death. In other words, the 24-hour duty doctrine
should not be sweepingly applied to all acts and circumstances causing the death
of a police officer but only to those which, although not on official line of duty, are
nonetheless basically police service in character.

ILOILO DOCK AND ENGINEERING CORP VS WCC

G.R. NO. L-26341
NOVEMBER 27, 1968

Facts:
An appeal by the Iloilo Dock and Engineering Company (hereinafter referred to
as the IDECO) from the decision dated February 28, 1966 of the Workmen's
Compensation Commission (hereinafter referred to as the Commission) affirming
the decision of the Regional Office VII in Iloilo City, and ordering the IDECO to
pay to the widow and children of Teodoro G. Pablo (Irenea M. Pablo and the
minors Edwin, Edgar and Edna, all surnamed Pablo) the sum of P4,000, to pay
to the widow P89 as reimbursement for burial expenses and P300 as attorney's
fees, and to pay to the Commission the amount of P46 as fees pursuant to section
55 of the Workmen's Compensation Act, as amended.

On January 29, 1960, Pablo, who was employed as a mechanic of the IDECO,
while walking on his way home, was shot to death in front of, and about 20
meters away from, the main IDECO gate, on a private road commonly called the
IDECO road. The slayer, Martin Cordero, was not heard to say anything before or
after the killing. The motive for the crime was and still is unknown as Cordero
was himself killed before he could be tried for Pablo's death. At the time of the
killing, Pablo's companion was Rodolfo Galopez, another employee, who, like
Pablo, had finished overtime work at 5:00 p.m. and was going home. From the
main IDECO gate to the spot where Pablo was killed, there were four
"carinderias" on the left side of the road and two "carinderias" and a residential
house on the right side. The entire length of the road is nowhere stated in the
record.

Issue:
Whether Pablo's death comes within the meaning and intendment of that
"deceptively simple and litigiously prolific.

Held:
The statute is not intended to relieve completely an employee from the burden of
showing that accidental injuries suffered by him actually were sustained in the
course of his employment. "It is not the law that mere proof of an accident,
without other evidence, creates the presumption under section 21 of the
Workmen's Compensation Law (Consol. Law, c. 67) that the accident arose out of
and in the course of the employment. On the contrary, it has been frequently
held, directly and indirectly, that there must be some evidence from which the
conclusion can be drawn that the injuries did arise out of and in the course of the
employment." Proof of the accident will give rise to the statutory presumption
only where some connection appears between the accident and the employment.

But even without the foregoing pronouncement, the employer should still be held
liable in view of our conclusion that that portion of the road where Pablo was
killed, because of its proximity, should be considered part of the IDECO's
premises. Hence, the injury was in the course of employment, and there
automatically arises the presumption — invoked in Rivera — that the injury by
assault arose out of the employment, i. e., there is a causal relation between the
assault and the employment.

We do say here that the circumstances of time, two minutes after dismissal from
overtime work, and space, twenty meters from the employer's main gate, bring
Pablo's death within the scope of the course factor. But it may logically be asked:
Suppose it were three minutes after and thirty meters from, or five minutes after
and fifty meters from, would the "proximity" rule still apply? In answer, we need
but quote that portion of the decision in Jean vs. Chrysler Corporation, supra,
which answered a question arising from an ingenious hypothetical question put
forth by the defendant therein:

We could, of course, say "this is not the case before us" and utilize the old saw,
"that which is not before us we do not decide." Instead, we prefer to utilize the
considerably older law: "Sufficient unto the day is the evil thereof" (Matthew
1:34), appending, however, this admonition: no statute is static; it must remain
constantly viable to meet new challenges placed to it. Recovery in a proper case
should not be suppressed because of a conjectural posture which may never arise
and which if it does, will be decided in the light of then existing law.

Since the Workmen's Compensation Act is basically a social legislation designed

to afford relief to workmen, it must be liberally construed to attain the purpose
for which it was enacted. Liberally construed, sec. 2 of the Act comprehends
Pablo's death. The Commission did not err in granting compensation.

ALANO VS ECC
G.R. NO. L-48594
MARCH 16, 1988

Facts:
That on June 27, 1977, Generoso C. Alano, brother of the deceased, filed the
instant claim for in come benefit with the GSIS for and in behalf of the decedent's
children. The claim was, however, denied on the same date on the ground that
the "injury upon which compensation is being claimed is not an employment
accident satisfying all the conditions prescribed by law." On July 19, 1977
appellant requested for a reconsideration of the system's decision, but the same
was denied and the records of the case were elevated to this Commission for
review.

A government employee during her lifetime, Dedicacion de Vera, worked as

principal of Salinap Community School in San Carlos City, Pangasinan. Her tour
of duty was from 7:30 a.m. to 5:30 p.m. On November 29, 1976, at 7:00 A.M.,
while she was waiting for a ride at Plaza Jaycee in San Carlos City on her way to
the school, she was bumped and run over by a speeding Toyota mini-bus which
resulted in her instantaneous death. She is survived by her four sons and a
daughter.

Issue:
Whether or not the injury sustained by the deceased Dedicacion de Vera resulting
in her death is compensable under the law as an employment accident.
Held:
In this case, it is not disputed that the deceased died while going to her place of
work. She was at the place where, as the petitioner puts it, her job necessarily
required her to be if she was to reach her place of work on time. There was
nothing private or personal about the school principal's being at the place of the
accident. She was there because her employment required her to be there.

As to the Government Service Insurance System's manifestation, we hold that it

is not fatal to this case that it was not impleaded as a party respondent. As early
as the case of La O v. Employees' Compensation Commission, (97 SCRA 782) up
to Cabanero v. Employees' Compensation Commission (111 SCRA 413) and
recently, Clemente v. Government Service Insurance System (G.R. No. L-47521,
August 31,1987), this Court has ruled that the Government Service Insurance
System is a proper party in employees' compensation cases as the ultimate
implementing agency of the Employees' Compensation Commission. We held in
the aforecited cases that "the law and the rules refer to the said System in all
aspects of employee compensation including enforcement of decisions (Article
182 of Implementing Rules)."

LAZO VS EMPLOYEES COMPENSATION COMMISSION

G.R. NO. 78617
JUNE 18, 1990

Facts:
At about 6:00 o'clock in the morning of 19 June 1986, on his way home, the
passenger jeepney the petitioner was riding on turned turtle due to slippery road.
As a result, he sustained injuries and was taken to the Angono Emergency
Hospital for treatment. He was later transferred to the National Orthopedic
Hospital where he was confined until 25 July 1986.

Petitioner, Salvador Lazo, is a security guard of the Central Bank of the

Philippines assigned to its main office in Malate, Manila. His regular tour of duty
is from 2:00 o'clock in the afternoon to 10:00 o'clock in the evening. On 18 June
1986, the petitioner rendered duty from 2:00 o'clock in the afternoon to 10:00
o'clock in the evening. But, as the security guard who was to relieve him failed to
arrive, the petitioner rendered overtime duty up to 5:00 o'clock in the morning of
19 June 1986, when he asked permission from his superior to leave early in order
to take home to Binangonan, Rizal, his sack of rice.

Issue:
Whether or not the accident which involved the petitioner occurred far from his
work place and while he was attending to a personal matter.
Held:
In the case at bar, it can be seen that petitioner left his station at the Central Bank
several hours after his regular time off, because the reliever did not arrive, and so
petitioner was asked to go on overtime. After permission to leave was given, he
went home. There is no evidence on record that petitioner deviated from his
usual, regular homeward route or that interruptions occurred in the journey.

While the presumption of compensability and theory of aggravation under the

Workmen's Compensation Act (under which the Baldebrin case was decided)
may have been abandoned under the New Labor Code, 8 it is significant that the
liberality of the law in general in favor of the workingman still subsists. As agent
charged by the law to implement social justice guaranteed and secured by the
Constitution, the Employees Compensation Commission should adopt a liberal
attitude in favor of the employee in deciding claims for compensability, especially
where there is some basis in the facts for inferring a work connection to the
accident.

This kind of interpretation gives meaning and substance to the compassionate

spirit of the law as embodied in Article 4 of the New Labor Code which states that
'all doubts in the implementation and interpretation of the provisions of the
Labor Code including its implementing rules and regulations shall be resolved in
favor of labor.'

The policy then is to extend the applicability of the decree (PD 626) to as many
employees who can avail of the benefits thereunder. This is in consonance with
the avowed policy of the State to give maximum aid and protection to labor. 9

There is no reason, in principle, why employees should not be protected for a

reasonable period of time prior to or after working hours and for a reasonable
distance before reaching or after leaving the employer's premises.

VICENTE VS. ECC

G.R. NO. 85024
JANUARY 23, 1991
SARMIENTO, J.

FACTS:

[P]etitioner was formerly employed as a nursing attendant at the Veterans

Memorial Medical Center in Quezon City. At the age of forty-five, and after
having rendered more than twenty-five years of government service, he applied
for optional retirement under the provisions of Section 12(c) of Republic Act No.
1616, giving as reason therefor his inability to continue working as a result of his
physical disability. The petitioner likewise filed with the Government Service
Insurance System (GSIS) an application for “income benefits claim for payment”
under Presidential Decree (PD) No. 626, as amended. Both applications were
accompanied by the necessary supporting papers, among them being a
“Physician’s Certification” issued by the petitioner’s attending doctor. The
petitioner’s application for income benefits claim payment was granted but only
for permanent partial disability (PPD) compensation or for a period of nineteen
months

ISSUE:

Whether or not the petitioner suffers from permanent total disability.

HELD:

YES. The decision of the respondent Employees’ Compensation Commission

(ECC) was set aside.

RATIO:

[T]he petitioner’s permanent total disability is established beyond doubt by

several factors and circumstances. Noteworthy is the fact that from all available
indications, it appears that the petitioner’s application for optional retirement on
the basis of his ailments had been approved. Considering that the petitioner was
only 45 years old when he retired and still entitled, under good behavior, to 20
more years in service, the approval of his optional retirement application proves
that he was no longer fit to continue in his employment. For optional retirement
is allowed only upon proof that the employee-applicant is already physically
incapacitated to render sound and efficient service.

The sympathy of law on social security is towards its beneficiaries and the law by
its own terms, requires a construction of utmost liberality in its favor.

PEREZ VS EMPLOYEES COMPENSATION COMMISSION

G.R. NO. L-48488
APRIL 25, 1980

Facts:
On October 21, 1976, petitioner filed a claim for disability benefits under
Presidential Decree No. 626, as amended, with respondent Government Service
Insurance System (p. 1, ECC rec.).

On October 25, 1976, respondent GSIS denied said claim on the ground that
petitioner's ailments, rheumatoid arthritis and pneumonitis, are not occupational
diseases taking into consideration the nature of her particular work. In denying
aforesaid claim, respondent GSIS thus resolved:

Upon evaluation based on general accepted medical authorities, your ailments

are found to be the least causally related to your duties and conditions of work.
We believe that our ailments are principally traceable to factors which are
definitely not work-connected. Moreover, the evidences you have, submitted have
not shown that the said ailments directly resulted from your occupation as
Teacher IV of Raja Soliman High School, Manila (Letter-Resolution, p. 4, ECC
Case No. 0462).

Petitioner now maintains that her ailments arose in the course of employment
and were aggravated by the condition and nature of her work. Specifically, she
asserts that "pneumonitis or baby pneumonia which has become chronic that led
to bronchiectasis which is irreversible and permanent in nature is compensable
under No. 21 of compensable diseases (Resolution No. 432 dated July 20, 1977)
as conditions were present as attested to by doctor's affidavits and certifications."

Issue:

Whether or not petitioner’s claims she contracted pneumonitis and/or

bronchiectasis with hemoptysis and rheumatoid arthritis on January 27, 1975
after wetting and chilling during the course of employment which are permanent
and recurring in nature and work-connected.

Held:

Article 167 (1) of the new Labor Code provides that —

'Sickness' means any illness definitely accepted as an occupational disease listed
by the Commission, or any illness caused by employment subject to proof by the
employee that the risk of contracting the same is increased by working
conditions. ...

Rule 111, Section 1 (b) of the Amended Rules on Employees' Compensation thus
provides:

(b) For the sickness and the resulting disability or death to be compensable, the
sickness must be the result of an occupational disease listed under Annex 'A' of
these Rules with the conditions set therein satisfied; otherwise, proof must be
shown that the risk of contracting the disease is increased by working conditions.

Rule III, Section 1 (c) of said Rules states:

Only inqiury or sickness that occurred on or after January 1, 1975 and the
resulting disability or death shall be compensable under these Rules.

The aforequoted provisions clearly establish that for an illness to be

compensable, it must either be:

An illness definitely accepted as an occupational disease; or

An illness caused by employment subject to proof by the employee that the risk of
contracting the same is increased by working conditions.
Significantly, also, the Employees' Compensation Commission, in its Resolutions
Nos. 233 and 432, respectively dated March 16, 1977 and July 20, 1977, adopted a
more realistic construction of the provisions of the New Labor Code by including
in the list of compensable ailments and diseases, cardiovascular disease which
comprehends myocardial infarction, pneumonitis and bronchial asthma
(Sepulveda vs. WCC, et al., L-46290, Aug. 25,1978).

Furthermore, it must be stressed that "the approval of petitioner's application for

retirement is a clear indication that she was physically incapacitated to render
efficient service (Sudario vs. Republic, L-44088, Oct. 6, 1977; Dimaano vs. WCC,
et al., supra). Petitioner was allowed to retire under the disability retirement plan
on August 31, 1975 at the age of 54 which is way below the compulsory retirement
age of 65. Under Memorandum Circular No. 133 issued by the retirement shall be
recommended for approval only when "the employee applicant is below 65 years
of age and is physically incapacitated to render further efficient service."
Obviously, petitioner thus retired by reason of her ailments.

Finally, Republic Act 4670, otherwise known as the Magna Charta for Public
School Teachers, recognized the enervating effects of these factors (duties and
activities of a school teacher certainly involve physical, mental and emotional
stresses) on the health of school teachers when it directed in one of its provisions
that "Teachers shall be protected against the consequences of employment injury
in accordance with existing laws. The effects of the physical and nervous strain on
the teachers's health shall be recognized as compensable occupational diseases in
accordance with laws" (Pantoja vs. Republic, et al.. L-43317, December 29, 1978.)