SEPTEMBER 6, 2019 (JAO-TABOADA 58:21-1:17:48)

So, direct employer ha, you read about that. You also read this case Republic of the Phil. Vs Asiapro Cooperative (naa sa
book ni Azucena ang digest sa case).

Kaning Asiapro was created by some bright people in Manila. As I have said before during the time of Pres. Marcos,
janitorial lang jud, messengerial. Now, these bright people created a cooperative whereby they will accept members in the
cooperative and these members will be assigned to different places. So, they created a cooperative in order that this
cooperative, that if you are a member of the cooperative they vouched that they own the cooperative. Ngano? Naa gud kay
contribution. Ingon ana ang idea, diba. Tukod ta cooperative so that the person we will deploy in our clients cannot file
against us because who will file a case against yourself, di ba. In fact there was a case that a member of the cooperative
cannot enter into a Collective Bargaining with the coop, ngano man? Because member man ka sa coop. Coop is
composed of members di ba. And members is the coop. Example ingon ka nga coop I demand that our salary will be
increased to P10,000.00 tapos diri na pud ka , that is absurd. It is as if talking to yourself.

So the coop member ingon ana ilahang ginabuhat. This is also another type of manipulation in order that these members
will not become an employee, they will not have security of tenure, you cannot demand/claim against underpayment of
wages because you are a member. You cannot demand. Imong balay imong gub-on. Imong kaldero imong ilabay. Imoha
man na. So the tendency is, ingon ana ang original plan ana. So, before you are detailed or assigned to different
companies where the coop has a contract, you become a member, seminar pud ka sa coop, associate member ang tawag.
So what about your SSS contributions? Under the law ang SSS, the employee has contribution and also the employer –
naay share ang employee, naay share ang employer. So that’s why there are some employers who do not want to
contribute to SSS. Pwede ba dili i-report sa SSS? Ayaw! In the example that I have read, naa koy client na gisulod
iyahang kamot sa mixer tapos pag gawas putol na. The employer was not able to pay because they did not report. So you
later on, you insist to report to SSS.

So, in this case, kining cooperative, one of the cooperatives they entered into a contract with one of our clients, I think
Marsman or Stanfilco. So, ingon ani, the members will say, we will become members of SSS on voluntary basis, they will
authorize the coop to remit to the SSS their contribution. Kana ba, there is no employer-employee relationship here. Kay
kami ang cooperative, member mi sa cooperative, we will make this cooperative grow by our contribution or services, ana.
Our contribution to PhilHealth, we will authorize the cooperative to remit. Pag-abot ning kasoha ni, ingon ang Supreme
Court: They are employees, they are governed by the provisions of the Labor Code. Why? Wages are paid by the
cooperative to the workers. Cooperative members received their dividends. Dividends na the more you utang, the more you
contribute, the more you receive benefits, not in the form of salary. So you read (I suggest read na lang ang digest sa book
ni Azucena). I think there’s another case involving Asiapro. For purposes of discussion, in this case, they are employees.
(naay reason sa book applying the 4 fold test).

So there are so many ways of killing a cat. Just like entering into a contract. Read D.O. 174. You read also the
consequences of labor-only contracting discussed in the book of Azucena. And then also the extent of employer’s liability in
invalid labor contracting and violations of other prohibitions. In labor-only contracting, the contractor is only a mere agent of
the principal. And his employees will be considered as employees of the principal. So, ingon ani na sya. The employees of
the contractor will be considered as employees of the principal, they will receive the same benefits as that of the principal.
Mao nay nakanindot, that’s the beauty of labor. That is also a form of punishment, if you violate the law, we will make your
employees as employees of the principal. So, in other words, sunod sa balaud. What if, since the relationship between the
principal and the manpower agency is governed by the Civil Code, the principal may ask for reimbursement.

Let’s go to Article 110.

Art. 110. Worker preference in case of bankruptcy. In the event of bankruptcy or liquidation of an employer’s business,
his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the
contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and
other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989)

This was amended during the time of Senator Herrera. So, he introduced some amendments to Article 110 thru Republic
Act No. 6715. He said the employees must be given preference in case of bankruptcy. But unfortunately when DBP cases
were decided by SC, the SC said Article 110 will be read in conjunction with the Civil Code. Businessmen would borrow
money from the bank. And the bank will extend loan to the company, chances are there will be a collateral. What are the
collateral? Real Estate Mortgage or Chattel Mortgage. So, it will be annotated at the back of the title. So, in case of
bankruptcy, kung kinsa ang pinakauna naglista didto mao tong unahon pagbayad. When the money was borrowed from the
bank, wala pa may nakautang wala pa man underpayment of wages. Chances are the account of the underpayment of
wages of the employee will be presented during liquidation proceedings. There must first be a proceeding. When the
company went bankrupt the stockholders are not liable, except when there is unpaid subscription. Ingon ani nang unpaid
subscription, nagsubscribe ka 10M ang gibayad lang nimo 1M. So naa kay 9M unpaid subscription. Pwede ka gukdon sa
creditor for unpaid subscription. So dili ka basta-basta magsubscribe. You will learn that in your corporation law.
So, in this case, kaning DBP cases, the SC said “What Article 110 of the Labor Code establishes is not a lien, but a
preference of credit in favor of employees. This simply means that during bankruptcy, insolvency or liquidation proceedings
involving existing properties of the employer, the employees have the advantage of having their unpaid wages satisfied
ahead of certain claims which may be proved therein.” Dili automatic. Luoy no. Later on when you become lawyers of big
companies, suggest that you create a trust fund for the employees that in case what happened they will also have
something to look forward.

Article 111.

Art. 111. Attorney’s fees. a. In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s
fees equivalent to ten percent of the amount of wages recovered.

b. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of
wages, attorney’s fees which exceed ten percent of the amount of wages recovered.

Article 111 is worded in cases of unlawful withholding of wages lang. Before kining Article 111, walay attorney’s fees sa
illegal dismissal. Underpayment of wages lang. But in this case gi bag-o ni SC, attorney’s fees is not limited to cases of
wage recovery. Eventhough it is a case of illegal dismissal, naa na attorney’s fees.

As to PAO lawyers, there was a time that PAO lawyers are not entitled to attorney’s fees. I think now, there is a new
circular where PAO lawyers are entitled. Please check. I don’t know if PAO lawyers are entitled to attorney’s fees . I-
research daw na kay akong libro karaan ni. I think there is a circular now that PAO lawyers are entitled provided the
attorney’s fees will go to a common fund. They are not supposed to receive compensation outside of their wage. Dili dapat.

Coverage of the Exam from beginning to Article 111.