Jovan Ace Kevin G. Daganta employee for his union activities and thereby defeat his right of self-organization.
his union activities and thereby defeat his right of self-organization. But the
1. POCKETBELL PHILS. vs NLRC
Facts:
In view of a corporate dispute, Pocketbell Philippines, Inc. was placed under receivership.
During this time, Arthur Alinas continued to report with the EVP Braga. Eventually, the
corporation was given to Telectronics System, Inc. Alinas, who was previously an
Accounting Supervisor, was appointed as staff to the Finance Manager. He was subsequently
informed that he was to be transferred to the Davao City branch as Provincial
Marketing and Sales Supervisor. Alinas refused the offer, stating his reasons in a letter. The
new EVP, Jose Abejo, told him his explanation was unsatisfactory, and that if he does not
assume this new assignment, his services would be terminated. Alinas did not take the
position, and he filed a case of ULP against the company and Abejo. The Labor Arbiter found
his dismissal valid but the NLRC reversed the decision. The Labor Arbiter viewed the
transfer as a chance for Alinas to redeem the lost confidence of his employer, as his continued
reporting to then EVP Braga was considered disloyalty. However, the NLRC viewed that his
transfer to the Davao City branch was a mere subterfuge resorted to by the company to mask
its real intention to remove him because of what it perceived was his personal loyalty to the
Braga.
ISSUES:
1) Does the NLRC commit grave abuse of discretion when it reversed the decision of the
Labor Arbiter by arriving at a conclusion differently but basing it on the same set of facts
determined by the Labor Arbiter?
2) Can the managerial prerogative of transferring an employee to a new assignment be
justified by its view of the latter’s disloyalty to the company?
RULING:
1) No. The NLRC considered the same facts found by the Labor Arbiter. Where the NLRC
differed was as to the conclusion to be drawn from those facts. Otherwise, it acted within its
appellate power and considered no issue which was not raised on the appeal. By contending
that "the decision of the Labor Arbiter had no sufficient basis," private respondent put in
issue the correctness of the Labor Arbiter's conclusion that private respondent was guilty of
insubordination. Nor does the substantial evidence rule require a court to shut out from its
view evidence in the record which fairly detracts from the decisions of a lower body. This is
true of our review of the decisions of the NLRC. It is certainly even truer of the review by the
NLRC of the decisions of the Labor Arbiter.
2) Yes, if it was not exercised as a mere subterfuge by the employer to rid himself of an
undesirable employee. The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion and putting to mind the basic elements of justice and fair
play. Having the right must be exercised. Thus it cannot be used as a subterfuge by the
employer to rid himself of an undesirable worker. Nor then the real reason is to penalize an
transfer can be upheld when there is no showing that it is unnecessary, inconvenient and
prejudicial to the displaced employee.
2. ZANOTTE SHOES V. NLRC
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.
3. MAM Realty Dev’t Corporation v. NLRC
FACTS:
Balbastro filed a complaint against petitioners, MAM realty and its Vice Pres Centeno, for
wage differentials, overtime pay and others. Balbastro alleged that he was employed by
MAM as a pump operator and performed such work at its Rancho Estate. He earned a
monthly salary who worked seven days a week.
Petitioner alleged that Balbastro had previously been employed by Francisco Cancho Inc., the
developer of Rancho Estates. His services were contracted by petitioner for the operation of
the Rancho Estates’ water pump.
Under the agreement, Balbastro was made to open and close daily the water supply system.
He worked for only a maximum of 3 hours a day and used his free times by offering
plumbing services to the residents of the subdivision.
ISSUE: W/N there exists an ER-EE relationship between petitioner and Balbastro
HELD:
Yes. Repeatedly, the issue of the existence of ER-EE relationship is determined by the
following factors:
1.selection and engagement of the employees
2.payment of wages
3.power of dismissal
4.employer’s power to control the employee with respect to the result to be done and to the
means and methods by which the work is to be accomplished. The power of control refers
merely to the existence of the power and not to the actual exercise thereof. It is not essential
for the employer to actually supervise the performance of duties of the employee; it is enough
that the former has a right to wield the power.
With regards to the liability of Centeno, Vice Pres of MAM, he is not jointly and severally
liable with MAM.
A corporation, being a juridical entity, may act only through its directors, officers,
employees. Obligations incurred by them, are not theirs but the direct accountabilities of the
corporation they represent. Solidary liability may at times be incurred but only when
exceptional circumstances warrant, such as:
1.When directors and trustees or the officers of a corporation:
a. vote for or assent to patently unlawful acts of the corporation
b. act in bad faith or with gross negligence. guilty of conflict of interest
2.When a director or officer has consented to the issuance of watered stocks or who, having
knowledge thereof, did not file his written objection thereto
3.When a director, trustee or officer has agreed to hold himself personally and solidarily
liable withcorporation
4.When a director, trustee or officer is made personally liable for his corporate action. In the
case at bench, there is nothing substantial that can justify Centeno’s solidary liability with
corporation.
4. YU vs. NLRC
FACTS:
Private respondents-employees Fernando Duran, Eduardo Paliwan, Roque Estoce, and
Rodrigo Santos were employees of respondent corporation Tanduay Distillery, Inc, (TDI)
who were among the 22 employees who received a memorandum from TDI terminating their
services. for reasons of retrenchment, effective 30 days from receipt thereof or not later than
the close of business hours on April 28, 1988. The 22 employees filed a TRO however, due to
the 20-day lifetime of the temporary restraining order, and because of the on-going
negotiations for the sale of TDI the retrenchment pushed through. Out of the 22 employees
who were retrenched, the instant petition involves only the 4 individual respondents herein.
On June 1, 1988, or after respondents-employees had ceased as such employees, a new buyer
of TDI's assets, Twin Ace Holdings, Inc. took over the business. Twin Ace assumed the
business name Tanduay Distillers. On August 8, 1988, the employees filed a motion to
implead herein petitioners James Yu and Wilson Young, doing business under the name and
style of Tanduay Distillers, as party respondents in said cases. Petitioners filed an opposition
thereto, asserting that they are representatives of Tanduay Distillers an entity distinct and
separate from
TDI, the previous owner, and that there is no employer-employee relationship between
Tanduay Distillers and private respondents. Respondents-employees filed a reply to the
opposition stating that petitioner James Yu as officer-incharge of Tanduay Distillers had
informed the president of TDI labor union of Tanduay Distillers' decision to hire everybody
with a clean slate on a probation basis.
On May 24, 1989, the Labor arbiter rendered a decision declaring the retrenchment illegal
and ordering the respondent Tanduay Distillery, Inc., to reinstate the complainants to their
former position wth backwages up
to the time of change of ownership, if one has taken place. And 'That in the event of change
in management it (Tanduay Distillery, Inc.,) is hereby ordered to pay the complainants their
respective separation benefits computed at the rate of one (1) month for every year of service.
This is without prejudice to the letter of Mr. James Yu as officer-in-charge of Tanduay
Distillers dated June 17, 1988 to the President of the Tanduay Distillery, Inc., Labor Union.'
Thereupon, private respondents-employees on September 16, 1991 filed a motion for
execution praying that NLRC through the labor arbiter, "[i]ssue the necessary writ for the
execution of the entire decision dated May 24, 1989, including the actual reinstatement of the
complainants to their former position without loss of seniority and benefits against Tanduay
Distillery, Inc., and/or Tanduay Distillers, James Yu and Wilson Young." This was opposed
by the petitioners on the ground that "the Motion for Execution is without any basis in so far
as it prays for the issuance of a writ of execution against respondent Tanduay Distillers,
which is an entity separate and distinct from respondent Tanduay Distillery, Inc., and
respondents James Yu and Wilson Young."

ISSUE: Whether or not the respondent NLRC committed grave abuse of discretion in
holding petitioners Yu and Young liable under the decision dated May 24, 1989.
HELD: Yes. Petitioners, for a number of reasons which we shall discuss below, may not be
held answerable and liable under the final judgment of Labor Arbiter Cauton-Barcelona.
1. An examination of the aforequoted dispositive portion of the decision shows that the same
does not in any manner obligate Tanduay Distillers, or even petitioners Yu and Young for
that matter, to reinstate respondents. Only TDI was held liable to reinstate respondents up to
the time of change of ownership, and for separation benefits. However, Labor Arbiter Cueto
went beyond what was disposed by the decision and issued an order dated November
17, 1992 which required". . . Tanduay Distillers, Inc., Wilson Young and James Yu to
immediately reinstate complainants Fernando Duran, Rodrigo Santos, Roque Estoce and
Eduardo Daliwan to heir respective positions."
The order of execution dated November 17, 1992 in effect amended the decision dated May
24, 1989 for the former orders petitioners and Tanduay Distillers to reinstate private
respondents employees whereas the decision dated May 24, 1989, as we have discussed
above, does not so decree, This cannot be done. It is beyond the power and competence of
Labor Arbiter Cueto to amend a final decision, The writ of execution must not go beyond the
scope of the judgment.
2. Neither may be said that petitioners and Tanduay Distillers are one and the same as TDI, as
seems to be the impression of respondents when they impleaded petitioners as party
respondents in their compliant for unfair labor practice, illegal lay off, and separation
benefits. Such a stance is not supported by the facts. The name of the company for whom the
petitioners are working is Twin Ace Holdings Corporation, As stated by the Solicitor
General, Twin Ace is part of the Allied Bank Group although it conducts the rum business
under the name of Tanduay Distillers. The use of a similar sounding or almost identical name
is an obvious device to capitalize on the goodwill which Tanduay Rum has built over the
years. Twin Ace or Tanduay Distillers, on one hand, and Tanduay Distillery Inc. (TDI), on
the other, are distinct and separate corporations. There is nothing to suggest that the owners
of TDI, have any common relationship as to identify it with Allied Bank Group which runs
Tanduay Distillers. It is basic that a corporation is invested by law with a personality separate
and distinct from those of the persons composing it as well as from that of any other legal
entity to which it may be related (Palay, Inc. et al. vs. Clave, et al., 124 SCRA 641 [1983]).
The genuine nature of the sale to Twin Ace is evidenced by the fact that Twin Ace was only a
subsequent interested buyer. At the time when termination notices were sent to its employees,
TDI was negotiating with the First Pacific
Metro Corporation for the sale of its assets. Only after First Pacific gave up its efforts to
acquire the assets did Twin Ace or Tanduay Distillers come into the picture. Respondents-
employees have not presented any proof as to communality of ownership and management to
support their contention that the two companies are one firm or closely related. The doctrine
of piercing the veil of corporate entity applies when the corporate fiction is used to defeat
public convenience, justify wrong, protect fraud, or defend crime or where a corporation is
the mere alter ego or business conduit of a person (Indophil Textile Mill Workers Union vs.
Calica, 205 SCRA 697, 703 (1992]). To disregard the separate juridical personality of a
corporation, the wrong-doing must be clearly and convincingly established. It cannot be
presumed (Del Rosario vs. NLRC, 187 SCRA 777, 7809 [1990]).
Another factor to consider is that TDI as a corporation or its shares of stock were not
purchased by Twin Ace. The buyer limited itself to purchasing most of the assets, equipment,
and machinery of TDI. Thus, Twin Ace or Tanduay Distillers did not take over the corporate
personality of DTI although they manufacture the same product at the same plant with the
same equipment and machinery. Obviously, the trade name "Tanduay" went with the sale
because the new firm does business as Tanduay Distillers and its main product of rum is sold
as Tanduay Rum. There is no showing, however, that TDI itself was absorbed by Twin Ace
or that it ceased to exist as a separate corporation, In point of fact TDI is now herein a party
respondent represented by its own counsel. the fiction of separate and distinct corporate
entities cannot, in the instant case, be disregarded and brushed aside, there being not the least
indication that the second corporation is a dummy or serves as a client of the first corporate
entity.
3. Nor could the order and writ to reinstate be anchored on the vague and seemingly uncalled
for alternative disposition in the Barcelona decision that —
". . . This is without prejudice to the letter of Mr. James Yu as officer-in-charge of Tanduay
Distillers dated June 16, 1988 to the President of the Tanduay Distillery, Inc. labor Union."
The letter of James Yu does not mention any reinstatement. It assures the president of the
labor union that Tanduay
Distillers stood firm on its decision to hire employees with a clean slate on a probationary
basis. The fact that the employees of the former employer (TDI) would be hired on a
probationary basis shows that there was no employer employee relationship between
individual respondents and Twin Ace. Anyone who joins the buyer corporation comes in as
an outsider who is newly hired and who starts on a probationary basis until he proves he
deserves to be on a
permanent status. His application can be rejected in the exercise of the hiring authority's
discretion.
4. . Another factor which militates against the claim for reinstatement of the individual
respondents is their having received separation pay as part of a compromise agreement in the
course of their litigation with TDI.
5. FILAMER CHRISTIAN INSTITUTE VS. CA
FACTS: Daniel Funtecha was a working student at the Filamer Christian Institute. He was 6. PERPETUAL HELP CREDIT COOPERATIVE, INC. (PHCCI) VS. FABURADA
FACTS:
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. Private respondents Faburada et. al. filed a complaint against PHCCI for illegal dismissal,
premium pay, separation pay, wage differential, moral damages and attorney’s fees.
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 PHCCI filed a motion to dismiss on the ground that no employer-employee relationship
exists since private respondents are all members and co-owners of thecooperative. Also,
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 private respondents have not exhausted the remedies provided in the coop by laws.
PHCCI also filed a supplemental motion to dismiss alleging that RA 6939, the Cooperative
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 Development Authority Law, requires conciliation or mediation within the cooperative before
a resort to judicial proceeding.
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 The Labor Arbiter ruled in favor of the private respondents, holding that the case is impressed
with employer-employee relationship and that the laws on cooperatives is subservient to the
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 Labor Code. The NLRC affirmed.
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 ISSUE: WON there is an employer-employee relationship between the parties and WON
private respondents were regular employees
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
HELD: YES. Elements in determining existence of employer-employee relationship:
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 1) Selection and engagement of the worker or the power to hire
2) The power to dismiss
reconsideration.
3) Payment of wages by whatever means
4) Power to control the worker’s conduct the above elements are present here. PHCCI
ISSUE: Whether or not Funtecha is an employee of Filamer.
through its Manager Mr. Edilberto Lantaca, Jr. hired respondents as Computer programmer
and clerks. They worked regular working hours, were assigned specific duties, were paid
HELD: Yes. 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 regular wages, and made to accomplish regular time records, and worked under the
supervision of the manager.
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 That Faburada worked only on a part-time basis does not mean that he is not a regular
employee .Regularity of employment is not determined by the number of hours one works
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 but by the nature and length of time one has been in that particular job.
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.
7. PRINCESS JOY PLACEMENT AND GENERAL SERVICES INC VS. BINALLA
FACTS:German Binalla, a registered nurse, alleged that, he applied for employment with
Princess Joy who referred him to Reginaldo Paguio and Cynthia Latea for processing of his
papers.  After completing his documentary requirements, he was told that he would be
deployed to Al Adwani.  He signed a four-year contract with Al Adwani as staff nurse.  He
paid, although no receipts were issued to him.  Later, he was given a telegram notifying him
of his departure. Binalla further alleged it was only after boarding his Saudi Arabia Airlines
plane that he examined his papers and discovered that CBM was his deploying agency. He
also saw that under the four-year contract he signed, his monthly salary was only 1,500 Saudi
Riyals (SR) equivalent to $400.  Left with no choice as he was then already bound for Saudi
Arabia, he worked under his contract for only two years and returned to the Philippines after
posting a bond, supposedly to guarantee that he would come back to finish his contract.
Upon his return to the Philippines, Binalla verified his employment contract with the POEA.  US$400 a month; whereas, under the POEA- certified two-year contract, he was to be paid
He learned that the POEA indeed certified a different contract for him, with CBM as his
recruiting or deploying agency.  He disowned the contract, claiming that his supposed
signature appearing in the document was a forgery.  Out of frustration, he opted not to return
to Saudi Arabia to complete his four-year contract.
Binalla argued before the labor arbiter that he was “re-processed” – an arrangement where
Princess Joy recruited and deployed him, but made it appear that it was undertaken by CBM
under a different contract submitted to and certified by the POEA.  He complained that he
was made to work under an inferior contract and that Al Adwani itself violated the terms of
his four-year contract.
Binalla filed a complaint against local manning agent CBM Business Management and
Manpower Services and/or Princess Joy/Al Adwani General Hospital  for various money
claims arising from his employment with Al Adwani, in Taif, Saudi Arabia.
Labor Arbiter Aurellano found merit in the complaint. He found credible Binalla’s contention
that Paguio and Lateo, who processed his papers, were working for Princess Joy, taking
special note of the “ticket/telegram/advise” handed by Paguio to Binalla and declared CBM
and Princess Joy jointly and severally liable to pay Binalla.
NLRC ruled that the facts and evidence of the case do not establish “reprocessing” as the
means for Binalla’s deployment to Saudi Arabia.  It declared that, on the contrary, substantial
evidence existed pointing to CBM’s sole liability as the recruiting and deploying agent of
Binalla.  It refused to give credit to the ticket telegram/advice Binalla submitted in evidence
to establish Princess Joy’s liability as it was merely an unsigned and unauthenticated printout
with no indication of its source, purpose, or the entity to whom it is addressed.
CA granted the petition and set aside the NLRC rulings. Princess Joy moved for
reconsideration, but the CA denied the motion; thus the petition.
ISSUE/S:
W/N Princess Joy liable under the complaint.
HELD:
Yes. Binalla was employed by Al Adwani in Saudi Arabia through a fraudulent scheme or
arrangement, called “reprocessing” or otherwise, participated in by Princess Joy and CBM, as
well as by Paguio and Lateo. Although the scheme enabled Binalla to be employed overseas,
his two-year employment was marred from the start by violations of the law on overseas
employment.
Binalla was a victim of contract substitution.  He worked under an employment contract
whose terms were inferior to the terms certified by the POEA.  Under the four-year contract
he signed and implemented by his employer, Al Adwani, he was paid only SR1500.00 or
$550.00. 
Under Article 34 (i) of the Labor Code on prohibited practices, “it shall be unlawful for any
individual, entity, licensee, or holder of authority to substitute or alter employment contracts
approved and verified by the Department of Labor and Employment from the time of actual
signing thereof by the parties up to and including the periods of expiration of the same
without the approval of the Secretary of Labor.”  Further, contract substitution
constitutes “illegal recruitment” under Article 38 (I) of the Code.
Under the circumstances, Princess Joy is as liable as CBM and Al Adwani for the contract
substitution, no matter how it tries to avoid liability by disclaiming any participation in the
recruitment and deployment of Binalla to Al Adwani. Before the labor arbiter, Princess Joy
claimed that Paguio and Lateo were not its employees/representatives or that the principal
piece of evidence relied upon by the labor arbiter, the “ticket/telegram/advise” handed to
Binalla by Paguio had no probative value as it was merely an unsigned and unauthenticated
printout or that the four-year employment contract was signed only by Binalla and there was
no showing that it was the contract implemented by Al Adwani. Princess Joy’s protestations
fail to convince us.  We believe, as the labor arbiter did, that the ticket telegram/advice is
proof enough that Princess Joy recruited Binalla. In the instant case, however, it was
fortunate that the complainant was able to hold onto the ticket telegram/advise handed to him
by Reginaldo Paguio.  Clearly shown thereat, it carried the names “PRINCESS JOY” and
“REGIE.”  It would not be an unreasonable presumption that indeed Princess Joy recruited
complainant and that the latter had been transacting with Reginaldo Paguio.
8. CATAN VS. NLRC
FACTS: This is a special civil action for certiorari. The petitioner alleges grave abuse of
discretion on the part of the NLRC in an effort to nullify the latters resolution and thus free
petitioner from liability for the disability suffered by a Filipino worker it recruited to work in
Saudi Arabia. Petitioner, a duly licensed recruitment agency, as agent of Ali and Fahd
Shabokshi Group, a Saudi Arabian firm, recruited private respondent to work in Saudi Arabia
as a steelman. The term of the contract was for one year, however, the contract provided for
its automatic renewal. The contract was automatically renewed when private respondent was
not repatriated by his Saudi employer but instead was assigned to work as a crusher plant
operator.
While he was working as a crusher plant operator, private respondent's right ankle was
crushed under the machine he was operating. After the expiration of the renewed term,
private respondent returned to the Philippines. His ankle was operated for which he incurred
expenses.
He returned to Saudi Arabia to resume his work, then he was repatriated. Upon his return, he
had his ankle treated for which he incurred further expenses.
Private respondent filed a claim with the POEA, 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. POEA rendered judgment in favor of
private 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.
ISSUE/S:
a. W/N NLRC gravely abused its discretion when it ruled that petitioner was liable to private
respondent for disability benefits since at the time he was injured his original employment
contract, which petitioner facilitated, had already expired.
b. W/N the petitioner can disclaim liability on the ground that its agency agreement with the
Saudi principal had already expired when the injury was sustained.
HELD:
a. No. Private respondents contract of employment cannot be said to have expired as it was
automatically renewed since no notice of its termination was given by either or both of the
parties at least a month before its expiration, as so provided in the contract itself. Therefore,
private respondent's injury was sustained during the lifetime of the contract.
b. No. 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. 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. Under Art 1921 of the CC “If the agency has been entrusted for the
purpose of contra with specified persons, its revocation shall not prejudice the latter if they
were not given notice thereof.”
9. PEOPLE VS. CORAL
FACTS: This is a review of accused-appellant's conviction of crimes of Illegal Recruitment  
and Estafa. The Information in Criminal Case NO. 90-82870 for Illegal Recruitment reads as
follows: The undersigned accuses ELIZABETH CORAL y ADELAN alias "Beth" of
violation of Art. 38 (1), Pres. Decree No. 1412, amending certain provisions of Book 1, Pres.
Decree No. 442 otherwise known as the New Labor Code of the Philippines, in relation to
Art. 13 (b) and (c) of said Code as further amended by Pres. Decree Nos. 1693, 1920 and
2108, committed in large scale, as follows: That on or about December 27, 1989, in the City
of Manila, Philippines, the said accused, representing herself to have the capacity to contract,
enlist and transport Filipino workers for employment abroad, did then and there willfully and
unlawfully, for a fee, recruit and promise employment/job placement abroad to the following
persons, to wit: BELLA BUSTRIA y RIVERA, GLENDA ELEFANTE y RIVERA, JOSSIE
CAYAGA Y FABRIGAS, REMEDIOS CASIANO y CASACLANG, and MILLIARINA
ROMALDO y ANTONIO, without first having secured the necessary license or authority
from the Department of Labor. Contrary to law.
Upon arraignment, accused-appellant pleaded not guilty to the offenses charged. The cases
were tried jointly.
The prosecution presented as principal witnesses, four (4) of the five (5) private
complainants, namely: Glenda Elefante, Bella Bustria, Jossie Cayaga, and Remedios Casiano.
All four witnesses identified accused-appellant as the person who perpetrated the crimes of
Illegal Recruitment and Estafa against them.
The first of the prosecution witnesses to testify was 30-year-old high school graduate and
housewife GLENDA ELEFANTE y RIVERA, a native of San Marcelino, Zambales.
According to her, she met the spouses Nora and Bartolome Rubias through a mutual friend.
During their second meeting, Nora Rubias told Glenda that she (Nora) had already talked to
accused-appellant, and that if Glenda wanted to apply for work abroad, they could go to
accused-appellant's office in Manila.   Glenda was brought by the Rubias spouses to accused-
appellant's office. There, Glenda and accused-appellant discussed the former's application as
a factory worker in Taiwan which purportedly paid between $500 and $700
monthly. Accused-appellant asked Glenda to give an advance payment of P10,000.00 for the
processing of her Taiwanese visa, and P1,500.00 for the preparation of her passport. Glenda
went home to Zambales to borrow the money. She gave it personally to accused-
appellant. Accused-appellant did not issue her any receipt. She was then told to wait a couple
of weeks. When she returned to the office of accused-appellant, her visa was still unavailable
allegedly because of the strictness of the Taiwanese Embassy.
Some days later, Glenda visited accused-appellant in her office. She was offered by accused-
appellant a job as a factory worker in South Korea. Glenda was required by accused-appellant
to pay an additional P15,000.00 as placement fee. Glenda together with two of her co-
complainants, Bella Bustria and Jossie Cayaga, went to accused-appellant's office in Ermita.
Bella and Jossie paid to accused-appellant the amount of P25,000.00 each. The three were
issued one receipt by a certain Jimmy Magno, allegedly a secretary of the accused-appellant.
The receipt was placed in the name of Glenda and covered the amount of P60,000.00. It was
for the payment of Glenda's P10,000.00 and the P25,000.00 payment each of Bella and
Jossie.
Glenda was able to pay to accused-appellant the P15,000.00 additional placement fee for her
job application in South Korea. No receipt was issued to her by accused-appellant. Accused-
appellant then promised Glenda she could leave for South Korea. This promise was broken,
however, because on that date, Glenda was informed that accused-appellant was in Korea.
Even after accused-appellant returned, Glenda was not able to fly to Korea, purportedly
because of the Chinese New Year celebration.
While waiting for her time to leave, Glenda met her co-complainant Remedios Casiano, who
arrived from Korea. Remedios narrated to Glenda and the other complainants how she almost
died in Korea, and how accused-appellant took her salary for one month. Fearing the same
fate, Glenda demanded from accused-appellant the return of her money. Accused-appellant
refused. Glenda then went to the POEA to check if accused-appellant was a duly licensed
recruiter. She found out that accused-appellant had no authority to recruit workers for jobs
abroad. Gllenda went to the police station to file her complaint.   did not directly recruit private complainants, it is abundantly clear from their testimonies that
On cross-examination, Glenda denied she owed accused-appellant the amount of P13,000.00,
but admitted having received the amount of P500.00 from a female secretary of accused-
appellant.
Upon the other hand, the defense of accused-appellant rests mainly on denial and alibi. She
alleged that she is not a recruiter, but an importer/exporter and an authorized travel
agent.  She explained that the charges against her were due to the ill-will of private
complainants. On the other hand, complainants Cayaga and Bustria got angry as she did not
employ them as househelpers. Accused-appellant denied that she had a male secretary, or any
employee by the name of Jimmy Magno, whose signature appeared in the receipt for
P60,000.00.
On the basis of the evidence adduced, the trial court convicted accused-appellant of Illegal
Recruitment and four (4) counts of Estafa.
ISSUE/S:
W/N trial court erred in finding accused Elizabeth coral guilty beyond reasonable doubt of
the crimes of illegal recruitment and on four (4) separate counts of estafa.
HELD:
No. The crime of illegal recruitment has two elements: (1) that the offender is a non-licensee
or non-holder of authority to lawfully engage in the recruitment and placement of workers;
and (2) that the offender undertakes any of the recruitment activities defined under Article 13
(b) of the Labor Code, as amended, or any prohibited practices enumerated under Article 34
of the same Code.
In the case at bench, accused-appellant does not dispute that she is neither a licensee nor a
holder of any authority to engage in recruitment and placement activities. It is likewise
established that private complainants were unaware of accused- appellant's lack of authority
when they transacted business with her. It was only later, when private complainants sought
the assistance of the POEA that they discovered accused-appellant's lack of authority. In fine,
the first element of the crime of illegal recruitment was clearly proved in the case at bench.
We next resolve whether the prosecution established the second element of the offense of
illegal recruitment, i.e., that accused-appellant undertook any of the recruitment activities
defined under Article 13 (b) of the Labor Code, as amended, or any of the prohibited
activities defined under Article 34 of the same code. Accused-appellant urged it was not she
who "recruited" private complainants, but Nora Rubias. She alleged that Rubias brought them
to her and that they pleaded to be given jobs even only as househelpers.
We find the submission of accused-appellant untenable. In the first place, even assuming she
Rubias led them to believe she was acting for, or at least with the tacit consent of accused-
appellant. This belief was buttressed when accused-appellant made no disclaimer to private
complainants of Rubia's authority when the latter accompanied them to accused-appellant's
office in Manila. In the second place, even downgrading the participation of Rubias in the
recruitment scheme, private complainants proved that accused-appellant herself promised
them jobs in Taiwan and Korea. They paid various sums of money to accused-appellant to
take care of the expenses for the processing of their passports and visas. It was even accused-
appellant who accompanied Casiano to South Korea.
10. PEOPLE VS. TAGUBA
FACTS:
Enrique Taguba and Mirafe Taguba were both charged with eight counts of illegal
recruitment and three counts of estafa. The complainants, namely, Jesus Garcia, Gilbert
Fabrigas, Josefina Sarrion, Myrna Roxas, Elena Santiago, Federico Sagurit, Manuel Aquiban,
Violeta Porte, Renelito Cerbito, Danilo Pacheco, narrated almost identical versions of the
deception practiced on them by the accused. These witnesses testified that Enrique an Mirafe
approached them on separate occasions and assured them that upon their payment of a
specified sum of money they would be sent to Korror, Palau, to work variously as a
waiter, fisherman, master cutter, dressmaker, farmer, laborer, mason carpenter or macho
dancer.  The consideration for their recruitment ranged from P2,200.00 to P20,000.00 while
the promised monthly wages ranged from $300.00 top $500.00.
The required payments were made by them from loans they had contracted or from the
proceeds of the sale of their properties. However, no overseas employment materialized. Only
Gilbert Fabrigas and Norman Sarrion, the son of Josefina Sarrion were able to reach Korror
but after three months, during which they were not given any work, they were deported to
Manila for expired visas. The rest of the complainants were never even able to leave the
Philippines. In his defense, Enrique Taguba first claimed that he merely happened to be at
RAY/DECO office when the complainants submitted their papers. RAY/DECO is a
corporation licensed to recruit workers for employment abroad with which he had entered
into a joint venture. From the office, the documents were submitted to the foreign employer,
who brought them to Korror. He later declared that a special power of attorney issued to him
by RAY/DECO authorized him to recruit and hire contract workers. It was by virtue of this
authorization that he recruited the complainants. At the same hearing, however, he retracted
his statement, reiterating his earlier claim that he had no participation in the complainants'
transactions with the company. The sole exception was when he accompanied Gilbert
Fabrigas and Norman Sarrion to Korro upon RAY/DECO's request. Mirafe, on the other
hand, averred that she was working as a domestic helper in Korror when the alleged
irregularities happened. She presented a round-trip Continental Airline ticket issued in her
name on May 3, 1985, for Manila - Korror - Manila and a certification issued by the Manager
of Air Nauru that on March 3, 1986, she was a passenger of Air Nauru Flight No. 420 bound
for Manila from Korror.
After trial, Judge Adoracion C. Angeles of the Regional Trial Court in Caloocan City
declared them guilty of all the charges in a decision dated June 4, 1990.
In their challenged to the decision, the appellants stress that they call the failure of the
prosecution to prove that they were not holders of licenses to engage in the recruitment and
placement of workers abroad; the unrebutted evidence of Marife Taguba's absence in the
Philippines during the commission of the alleged crimes; the imposition of a penalty which
was not yet in effect and the alleged crime of illegal recruitment on a grand scale were
committed; and the lack of sufficient evidence to support their conviction for estafa.
The appellants argue that before one can be held guilty of illegal recruitment, two elements
have to be established, to wit, that (1) the offender is not a licensee or holder of authority to
lawfully engage in the recruitment and placement of workers; and (2) the offender undertook
the recruitment activities defined under Article 13(b) or any of the prohibited practices
enumerated under Article 34 of the Labor Code. Their argument is that the prosecution has
the burden of proving beyond reasonable doubt each of the elements of the offense charged
and that this burden had not been discharged in the cases against them.
ISSUE/S:
a. W/N the prosecution failed to prove that they were not holders of licenses to engage in the
recruitment and placement of workers abroad.
b. W/N they cannot be convicted of illegal recruitment on a large scale.
HELD:
a. No. The record shows that the prosecution indeed failed to establish that the appellants had
not been issued licenses to recruit for overseas employment. Non-possession of a license to
recruit is an essential ingredient of the crime of illegal recruiting. As it is an indispensible
requisite for the conviction of the pretended recruiter, the burden of establishing this element
is upon the prosecution. In the case before us, the prosecution cannot deny its failure to show
that no license had indeed been issued to either of the appellees by the POEA. This would
have been a fatal omission under ordinary circumstances. Fortunately for the prosecution,
however, this flaw was repaired by appellant Enrique Taguba himself when he testified as
follows: “Q. In connection with the operation of your office, do you have the authority to
recruit? A. I have a special power of attorney issued by the general manager of Ray/Deco,
International Development Corporation.” The special power of attorney granted to Enrique
by RAY/DECO did not operate as a license to recruit workers on his own behalf, which is
what he did. Enrique's authority was confined to negotiating with foreign employers for the
appointment of RAY/DECO as their agency in the recruiting of Filipino workers for
employment abroad. What he was supposed to recruit was not Filipino overseas workers but
the foreign employers to which the workers were to be assigned.
b. Yes. The Court agrees that the appellants cannot be convicted of illegal recruitment on a
large scale because only two of the complainants, Jesus Garcia and Elena Santiago,
categorically testified that their recruitment came after February 10, 1986. This was the date
when P.D. 2018, the law defining and penalizing illegal recruitment in a large scale, took
effect. P.D. 2018 cannot apply to the appellants retroactively as it would be an ex post
facto law to them. A law is ex post facto if it refers to a criminal act, punishes an act which
was innocent when done, and retroacts to the disadvantage of the accused. 26 Prior to the said
date, recruiting on a large scale was not yet punished with the penalty imposed in the said
decree. Moreover, each of the eight informations for illegal recruitment charged the
appellants with illegally recruiting only one person.
11. PEOPLE VS. GOCE
FACTS:
An information for illegal recruitment committed by a syndicate and in large scale,
punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No. 442) as
amended by Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan and
Loma Goce and herein accused-appellant Nelly Agustin in the Regional Trial Court of
Manila, Branch 5, alleging: That in or about and during the period comprised between May
1986 and June 25, 1987, both dates inclusive, in the City of Manila, Philippines, the said
accused, conspiring and confederating together and helping one another, representing
themselves to have the capacity to contract, enlist and transport Filipino workers for
employment abroad, did then and there willfully and unlawfully, for a fee, recruit and
promise employment/job placement abroad, to (1) Rolando Dalida y Piernas, (2) Ernesto
Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y Alvarez, (5)
Dionisio Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo,
and (8) Nelson Trinidad y Santos, without first having secured the required license or
authority from the Department of Labor. Four of the complainants testified for the
prosecution. Rogelio Salado was the first to take the witness stand and he declared that he
was introduced by Lorenzo Alvarez, his brother-in-law and a co-applicant, to Nelly Agustin
in the latter's residence. Representing herself as the manager of the Clover Placement
Agency, Agustin showed him a job order as proof that he could readily be deployed for
overseas employment. Salado learned that he had to pay P5,000.00 as processing fee, which
amount he gave sometime in April or May of the same year. He was issued the corresponding
receipt.  nagpapalakad sa Oman" and offered him a job as an ambulance driver at the Royal Hospital
Also, Salado, accompanied by five other applicants who were his relatives, went to the office
of the placement agency at Nakpil Street, Ermita, Manila where he saw Agustin and met the
spouses Dan and Loma Goce, owners of the agency. He submitted his bio-data and learned
from Loma Goce that he had to give P12,000.00, instead of the original amount of P5,000.00
for the placement fee. Although surprised at the new and higher sum, they subsequently
agreed as long as there was an assurance that they could leave for abroad.   Thereafter, a
receipt was issued in the name of the Clover Placement Agency showing that Salado and his
aforesaid co-applicants each paid P2,000.00, instead of the P5,000.00 which each of them
actually paid. Several months passed but Salado failed to leave for the promised overseas
employment. Hence, in October, 1987, along with the other recruits, he decided to go to the
POEA to verify the real status of Clover Placement Agency. They discovered that said
agency was not duly licensed to recruit job applicants. Later, upon learning that Agustin had
been arrested, Salado decided to see her and to demand the return of the money he had paid,
but Agustin could only give him P500.00. Ramona Salado, the wife of Rogelio Salado, came
to know through her brother, Lorenzo Alvarez, about Nelly Agustin. Accompanied by her
husband, Rogelio, Ramona went to see Agustin at the latter's residence. Agustin persuaded
her to apply as a cutter/sewer in Oman so that she could join her husband. Encouraged by
Agustin's promise that she and her husband could live together while working in Oman, she
instructed her husband to give Agustin P2,000.00 for each of them as placement fee, or the
total sum of P4,000.00.
Much later, the Salado couple received a telegram from the placement agency requiring them
to report to its office because the "NOC" (visa) had allegedly arrived. Again, around
February, or March, 1987, Rogelio gave P2,000.00 as payment for his and his wife's
passports. Despite follow-up of their papers twice a week from February to June, 1987, he
and his wife failed to leave for abroad. Complainant Dionisio Masaya, accompanied by his
brother-in-law, Aquiles Ortega, applied for a job in Oman with the Clover Placement Agency
at Parañaque, the agency's former office address. There, Masaya met Nelly Agustin, who
introduced herself as the manager of the agency, and the Goce spouses, Dan and Loma, as
well as the latter's daughter. He submitted several pertinent documents, such as his bio-data
and school credentials. Masaya gave Dan Goce P1,900.00 as an initial downpayment for the
placement fee, and in September of that same year, he gave an additional P10,000.00. He was
issued receipts for said amounts and was advised to go to the placement office once in a while
to follow up his application, which he faithfully did. Much to his dismay and chagrin, he
failed to leave for abroad as promised. Accordingly, he was forced to demand that his money
be refunded but Loma Goce could give him back only P4,000.00 in installments.
As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand on June
7, 1993. He testified that in February, 1987, he met appellant Agustin through his cousin,
Larry Alvarez, at her residence in Parañaque. She informed him that "madalas siyang
in Oman with a monthly salary of about $600.00 to $700.00.
Alvarez gave an initial amount of P3,000.00 as processing fee to Agustin at the latter's
residence. In the same month, he gave another P3,000.00, this time in the office of the
placement agency. Agustin assured him that he could leave for abroad before the end of 1987.
He returned several times to the placement agency's office to follow up his application but to
no avail. Frustrated, he demanded the return of the money he had paid, but Agustin could
only give back P500.00. Thereafter, he looked for Agustin about eight times, but he could no
longer find her. Only herein appellant Agustin testified for the defense. She asserted that Dan
and Loma Goce were her neighbors at Tambo, Parañaque and that they were licensed
recruiters and owners of the Clover Placement Agency. Previously, the Goce couple was able
to send her son, Reynaldo Agustin, to Saudi Arabia. Agustin met the aforementioned
complainants through Lorenzo Alvarez who requested her to introduce them to the Goce
couple, to which request she acceded. Denying any participation in the illegal recruitment and
maintaining that the recruitment was perpetrated only by the Goce couple, Agustin denied
any knowledge of the receipts presented by the prosecution. She insisted that the
complainants included her in the complaint thinking that this would compel her to reveal the
whereabouts of the Goce spouses. She failed to do so because in truth, so she claims, she does
not know the present address of the couple. All she knew was that they had left their
residence in 1987. Although she admitted having given P500.00 each to Rogelio Salado and
Alvarez, she explained that it was entirely for different reasons. Salado had supposedly asked
for a loan, while Alvarez needed money because he was sick at that time. Trial court rendered
judgment finding herein appellant guilty as a principal in the crime of illegal recruitment in
large scale, and sentencing her to serve the penalty of life imprisonment, as well as to pay a
fine of P100,000.00.  would be used in following up the papers of the complainants; later he gave accused
ISSUE/S:
a. W/N appellant’s act of introducing complainants to the Goce couple fall within the
meaning of illegal recruitment and placement under Article 13(b) in relation to Article 34 of
the Labor Code.
b. W/N appellant Agustin merely introduced complainants to the Goce couple or her actions
went beyond that.
HELD:
a. Yes. The 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. 25 On the other hand, referral is the act of passing along or forwarding of an
applicant for employment after an initial interview of a selected applicant for employment to
a selected employer, placement officer or bureau. 
b. Yes. The testimonial evidence hereon show that she indeed further committed acts
constitutive of illegal recruitment. All four prosecution witnesses testified that it was Agustin
whom they initially approached regarding their plans of working overseas. It was from her
that they learned about the fees they had to pay, as well as the papers that they had to submit.
It was after they had talked to her that they met the accused spouses who owned the
placement agency.
As correctly held by the trial court, being an employee of the Goces, it was therefore logical
for appellant to introduce the applicants to said spouses, they being the owners of the agency.
As such, appellant was actually making referrals to the agency of which she was a part. She
was therefore engaging in recruitment activity. 
12. PEOPLE VS. BAUTISTA
FACTS: Anita Bautista approached Romeo Paguio at the latter's restaurant and offered job
openings abroad. At that time, Paguio had relatives who were interested to work abroad.
Accused, who also operated a restaurant nearby at Padre Faura, informed Paguio that she
knew somebody who could facilitate immediate employment in Taiwan for Paguio's relatives.
Accused Anita Bautista introduced Rosa Abrero to Paguio. Abrero informed him that the
applicants could leave for Taiwan within a period of one-month from the payment of
placement fees. They informed Paguio that the placement fee was P40,000.00 for each
person. Paguio contacted his relatives, complainants Remigio Fortes and Dominador Costales
who were his brothers-in-law, and Anastacio Amor, a cousin, who lost no time raising the
needed money and gave the same to Paguio. The three were to work as factory workers and
were to be paid $850.00 monthly salary each. Paguio gave Rosa Abrero P20,000.00, which
P40,000.00 and P60,000.00 in separate amounts, totalling P100,000.00, as the remaining
balance. Abrero and accused Bautista promised Paguio and complainants that the latter could
leave for Taiwan. But accused Bautista informed Paguio and complainants that there was a
delay in the latter's departure because their tickets and visas had not yet been released.
Accused re-scheduled the complainants' departure. Came the date, and complainants were
still not able to leave. Paguio then required accused Bautista to sign the "Acknowledgment
Receipt," in which accused admitted having received the sum of P100,000.00 from Paguio,
representing payment of plane tickets, visas and other travel documents. Paguio asked
accused to return complainants' money; accused, however, promised that complainants could
leave for Taiwan before Christmas. From POEA, Paguio secured a certification, attesting that
Annie Bautista and Rosa Abrero are not licensed or authorized to recruit workers for overseas
employment. Complainants Fortes, Amor and Costales, as well as Paguio, gave their written
statements at the Office of the Assistant Chief Directorial Staff for Intelligence of the WPDC,
complaining about their being victims of illegal recruitment by Rosa Abrero and Annie
Bautista.
ISSUE/S:
W/N reasonable doubt exists to warrant the acquittal of appellant Anita Bautista.
HELD:
No. 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: 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 settled that the essential elements of the crime of illegal
recruitment in large scale are: (1) the accused engages in the recruitment and placement of
workers, as defined under Article 13 (b) or in any prohibited activities under Article 34 of the
Labor Code; (2) 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) accused commits the same
against three (3) or more persons, individually or a group. Appellant's active participation in
the recruitment process of complainants belies her claim of innocence. Complainants'
recruitment was initiated by appellant during her initial meeting with Romeo Paguio. She
gave the impression to Romeo Paguio and the complainants that her cohort, Rosa Abrero,
could send workers for employment abroad. She introduced Rosa Abrero to Romeo Paguio.
Both women assured the departure of complainants to Taiwan within one month from
payment of the placement fee of P40,000.00 per person. They even claimed that complainants
would work as factory workers for a monthly salary of $850.00 per person. Moreover, it was
appellant who informed Romeo Paguio that complainants' scheduled trip to Taiwan, instead
of the original departure date of September 25, 1991, due to some problems on their visas and
travel documents.
13. PEOPLE VS. CABACANG
FACTS:
Illegal Recruitment case was filed against appellant Felicia Mazambique Cabacang for
allegedly committing the following act: That in or about and during the period comprised
from March 22, 1990 to April 27, 1990, both dates inclusive, in the City of Manila,
Philippines, the said accused, representing herself to have the capacity to contract, enlist and
transport Filipino workers for employment abroad, did then and there willfully and
unlawfully, for a fee, recruit and promise employment/job placement abroad to the following
persons: Romeo Eguia, Ronnie Reyes, Armando Castro and Dante Eguia, without first having
secured the required license or authority from the Department of Labor and Employment.  
The prosecution evidence show that appellant who is not a recruiter licensed by the
POEA, handled the processing of the papers of cousins Ramon Eguia and Edgardo Santos.
The two were deployed to Abu Dhabi for employment as janitors.   Private complainants were
encouraged by their employment, and decided to apply for overseas janitorial work as well.   Article 38 (a) of the Labor Code, as amended, as "(a)ny recruitment activities, including the
According to private complainant Ronnie Reyes, he was approached in Lipa by appellant
who represented herself as the Assistant Manager of the Lakas Agency Management
Corporation. Appellant informed him that there would be a second batch of overseas workers
to be deployed to Abu Dhabi. Ronnie relayed the information to Wilma, who made further
inquiries and verifications from appellant about the job opportunity.  Wilma then directly
worked out with appellant, the overseas job applications of private complainants.
Private complainants filed their applications and appellant assured them that they would be
able to leave for Abu Dhabi after the processing of their paper. She instructed them to pay
their processing fees directly to her. Wilma paid appellant a total of P32,500.00.
Appellant assured private complainants they could leave for Abu Dhabi. The date of
departure came without private complainants leaving Philippine soil. Thereafter, appellant
told them to stay put and wait for the arrival in the Philippines of their prospective Middle
Eastern employer. However, no employer arrived, and the four complainants failed to be
deployed by appellant overseas.
Private complainants and Wilma returned to the Lakas Agency to look for appellant. They did
not find her. It was then that they found out from the agency's Manager, MR. NARCISO
DELA FUENTE, that appellant was merely renting a table in the office and was not,
employed with Lakas. The revelation moved private complainants to file a complaint against
appellant with the NBI. 
The NBI was able to work out a settlement between the parties. Appellant agreed in writing
to pay back the processing fees of private complainants. Nonetheless, appellant did not fully
fulfill her obligation under the agreement. She only refunded a total of 6,700.00 to private
complainants. 
At trial's end, appellant was found guilty of illegal recruitment.
ISSUE/S:
a. W/N appellant cannot be held liable for illegal recruitment since she never represented
herself to private complainants as a POEA-licensed recruiter.
b. W/N appellant was not the one responsible for the recruitment of private complainants nor
for their non-deployment for work abroad, since she was merely an employee of the POEA-
licensed Lakas Agency Management Corporation.
HELD:
a. No. It is incorrect to maintain that to be liable for illegal recruitment, one must represent
himself/herself to the victims as a duly-licensed recruiter. Illegal recruitment is defined in
prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-
licensees or non-holders of authority." Article 13 (b) of the same Code defines "recruitment
and placement" as referring to: (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. Clearly, to prove illegal
recruitment, only two elements need to be shown: (1) the person charged with the crime must
have undertaken recruitment activities (or any of the activities enumerated in Article 34 of the
Labor Code, as amended); and (2) said person does not have a license or authority to do so. It
is not required that it be shown that such person wrongfully represented himself as a licensed
recruiter.
b. No. Appellant cannot successfully contend she merely performed her duties as an
employee of a licensed recruitment agency. Apart from her uncorroborated testimony on the
matter, she failed to present credible evidence to buttress her claim of employment.
Clearly, it was appellant who directly recruited private complainants within the meaning of
Article 38 (a) and (b) the Labor Code. Since it is undisputed that appellant is not a holder of a
license or authority to recruit from the Department of Labor, through the POEA, her acts
constitute illegal recruitment.

In the case at bench, since appellant was charged with and convicted of illegally recruiting
four (4) people, her crime is classified as having been committed in large scale,  as such, it is
considered as involving economic sabotage.
14. PEOPLE VS. PANIS
FACTS: Four separate criminal complaints were filed against Abug for operating a free-
charging employment agency without first securing a license. But Abug argued that the
complaints did not charge an offense as he was charged with illegality recruiting only one
person in each of the four informations. Abug claimed that under Article 13(b) there would
be illegal recruitment only when two or more persons in any manner were promised or
offered any employment for a fee.
ISSUE: Whether or not the number of persons is an essential ingredient of the act of
recruitment and placement of workers.
HELD: The court ruled that the number of persons is not an essential ingredient of the act of
recruitment and placement of workers – “As we see it, the proviso was intended neither to
impose a condition on the basic 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 the “canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring of workers.” The number of
persons dealt with is not an essential ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one prospective worker is involved. The proviso
merely lays down a rule of evidence that where a fee is collected in consideration of a
promise or offer of employment to two or more prospective workers, the individual or entity
dealing with them shall be deemed to be engaged in the act of recruitment and placement.
The words ‘shall be deemed’ create that presumption.”
15. People vs. Dela Piedra
Facts: Maria Lourdes Modesto and Nancy Araneta together with her friends Jennelyn Baez,
and Sandra Aquino went to the house of Jasmine Alejandro, after having learned that a
woman is there to recruit job applicants for Singapore. Carol dela Piedra was already briefing
some people when they arrived. Jasmine, on the other hand, welcomed and asked them to sit
down.
They listened to the “recruiter” who was then talking about the breakdown of the fees
involved: P30,000 for the visa and the round trip ticket, and P5,000 as placement fee and for
the processing of the papers. The initial payment was P2,000, while P30,000 will be by salary
deduction. The recruiter said that she was “recruiting” nurses for Singapore.
Araneta, her friends and Lourdes then filed up bio-data forms and were required to submit
pictures and a transcript of records. After the interview, Lourdes gave the initial payment of
P2,000 to Jasmine, who assured her that she was authorized to received money.
Meanwhile, Erlie Ramos, Attorney II of the Philippine Overseas Employment Agency
(POEA), received a telephone call from an unidentified woman inquiring about the
legitimacy of the recruitment conducted by a certain Mrs. Carol Figueroa. Ramos, whose
duties include the surveillance of suspected illegal recruiters, immediately contacted a friend,
a certain Mayeth Bellotindos so they could both go the place where the recruitment was
reportedly being undertaken. Upon arriving at the reported area at around 4:00 pm,
Bellotindos entered the house and pretended to be an applicant. Ramos remained outside and
stood on the pavement, from where he was able to see around 6 persons in the sala. Ramos
even heard a woman, identified as Carol Figueroa, talk about the possible employment she
has to provide in Singapore and the documents that the applicants have to comply with.
Fifteen minutes later, Bellotindos came out with bio-data form in hand.
Thereafter, Ramos conferred with a certain Capt. Mendoza of the Criminal Investigation
Service (CIR) to organize the arrest of the alleged illegal recruiter. A surveillance team was
then organized to confirm the report. After which, a raid was executed.
Consequently, Carol was charged and convicted by the trial court of illegal recruitment.
Upon appeal, accused questions her conviction for illegal recruitment in large scale and
assails, as well, the constitutionality of the law defining and penalizing said crime.
Issue: Whether herein appellant committed the crime of large scale illegal recruitment.
Held: No. A conviction for large scale illegal recruitment must be based on a finding in each
case of illegal recruitment of three or more persons whether individually or as a group. In this
case, only two persons, Araneta and Modesto, were proven to have been recruited by
appellant. The third person named in the complaint as having been promised employment for
a fee, Jennelyn Baez, was not presented in court to testify.
Appellant is accused of recruiting only the three persons named in the information Araneta,
Modesto and Baez. The information does not include Fermindoza or the other persons present
in the briefing as among those promised or offered employment for a fee. To convict
appellant for the recruitment and placement of persons other than those alleged to have been
offered or promised employment for a fee would violate her right to be informed of the nature
and cause of the accusation against her.
16. Hornales vs. NLRC
Facts: Mario Hornales, together with other Filipinos, were sent to Singapore by JEAC
International Management & Contractor Services. Upon arrival, they were met the owner of
Step-Up Employment Agency Victor Lim, and were told that there would be working as
fishermen.
On board the vessel, Hornales and others were subjected to inhuman working conditions,
such as inadequate supply of food and water, maltreatment by the captain, and lack of
medical attendance. They were also required to work 22 hours a day without pay. Unable to
bear the situation, Hornales and some other Filipinos left the vessel. Upon return to the
Philippines, Hornales asked JEAC to pay his salaries. In turn, JEAC required him to
surrender his passport promising that they would procure another job for him, and later gave
him P500.
Hornales filed with POEA a complaint for non-payment of wages and recovery of damages
against JEAC, its owner Canayan, and Country Bankers Insurance Corporation, its surety.
JEAC-Canayan’s defense was Horanales is a total stranger to them and this was supported by
a Joint Affidavit stating that Hornales admitted to them that he didn’t apply to any agency,
that he went to Singapore as a tourist, and that he applied directly to Step-up Agency; and by
a Certification from Step-Up Agency corroborating the statements in the Joint Affidavit. In
Hornales’ supplemental Affidavit, he claimed that he knew Canayan since 1990, and the
latter reminded him of his obligations by sending him photocopies of the PNP Checks
Canayan issue in his favor.
POEA – in favour of Hornales. NLRC – dismissed complaint; no employee-employer
relationship.
Issue: WON JEAC and Canayan were responsible for Hornales’ recruitment and deployment
to Singapore.
Held: Yes. POEA’s decision was more convincing and supported by substantial evidence.
Join Affidavit – It has no provative value because Hornales was not able to cross-examine it
and affiants merely swore as to what Hornales told them, by not as to the truth of the
statements.
PNP Checks and agreements - strongly disprove Canayan’s “total strangers” theory and his
participation in Hornales’ recruitment and deployment.
It is very unlikely for Hornales to go to Singapore as a tourist and then land a job without
knowing anyone. JEAC and Canayan’s argument that they cannot be held liable because
there was no employment contract and that the absence of a Special Power of Attorney and
Affidavit of Responsibility, as required by the POEA rules and regulations only proves that
they did not employ Hornales to Singapore. The Court said that these act of not complying
with POEA Rules and Regulations requirement only made them susceptible to cancellation of
suspension of license as provided by POEA Rules Regulations.
17. Nitto Enterprises vs. NLRC
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 2 for 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 3, 1990, Capili was asked to resign in a letter.
Capili signed the letter and executed a Quitclaim and Release in favor of petitioner for and in
consideration of the sum of P1,912.79. Three days after, he filed a complaint for illegal
dismissal and payment of other monetary benefits.
The Labor Arbiter found the termination valid and dismissed the money claim. But on appeal,
the NLRC reversed the decision and directed Nitto to reinstate Capili with backwages
because he was a regular employee who was illegally dismissed.
The employer assails the NLRC’s finding that Capili cannot be considered an apprentice
since no apprenticeship agreement was executed and Capili was employed on May 28, 1990.
However, the apprenticeship agreement was filed with DOLE only on June 7, 1990. The
approval by DOLE of the apprenticeship agreement came much later.
Issue: WON petitioner comply with the requirements.
Held: NO. Petitioner did not comply with the requirements of the law (see Article 61, Labor
Code) which provides that apprenticeship agreements shall be entered into by the employer
and apprentice only in accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment.
The apprenticeship agreement between Nitto and Capili has no force and effect in the absence
of a valid apprenticeship program duly approved by the DOLE. Hence, Capili’s assertion that
he was hired not as an apprentice but as a delivery boy (kargador of pahinante) deserves
credence. He should be considered a regular employee.
18. Dee C. Chan and Sons vs. CIR
Facts: Pending settlement by the Court of Industrial Relations (Now NLRC) of a labor
dispute between petitioner company and its labor union, petitioner requested for authority to
hire “about 12 more laborers from time to time and on a temporary basis”. This request was
granted by the CIR with the proviso, however, that “the majority of the laborers to be
employed should be native.”
Petitioner assails the constitutionality of the said proviso.
1) Is the petitioner entitled to challenge the constitutionality of the order on the ground
of denial of equal protection of the laws insofar as it restricts the number of aliens
that may be employed in any business?
2) Does the order sustain the petitioner’s right to hire labor?
Held: 1) The petitioner is not entitled to challenge the constitutionality of an order which
does not adversely affect it, in behalf of aliens who are prejudiced thereby. It is the
prospective alien employee who may do so and only when and so far as it is being, or is about
to be, applied to his advantage.
2) The employer’s right to hire labor is not absolute. The Legislature has the power to make
regulations subject only to the condition that they pass the “reasonableness” and “public
interest” test. And under Commonwealth Act No. 103, the CIR may specify that a certain
proportion of the additional laborers to be employed should be Filipinos, if such condition, in
the court’s opinion, is necessary or expedient for the purpose of settling disputes, preventing
further disputes, or doing justice to the parties.
19. University of Pangasinan Faculty Union vs. University of Pangasinan
Facts: 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.
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.
Sec. 4. Principles in Determining Hours Worked. — The following general principles shall
govern in determining whether the time spent by an employee is considered hours worked for
purposes of this Rule:chanrob1es virtual 1aw library
"(d) The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered time either if the imminence of the resumption of
work requires the employee’s presence at the place of work or if the interval is too brief to be
utilized effectively and gainfully in the employee’s own interest."
The petitioner’s members in the case at bar, are exactly in such a situation. The semestral
break scheduled is an interruption beyond petitioner’s control and it cannot be used
"effectively nor gainfully in the employee’s interest’. Thus, the semestral break may also be
considered as "hours worked." For this, the teachers are paid regular salaries and, for this,
they should be entitled to ECOLA. Not only do the teachers continue to work during this
short recess but much less do they cease to live for which the cost of living allowance is
intended. The legal principles of "No work, no pay; No pay, no ECOLA" must necessarily
give way to the purpose of the law to augment the income of employees to enable them to
cope with the harsh living conditions brought about by inflation; and to protect employees
and their wages against the ravages brought by these conditions.
20. Wellington Investment and Manufacturing Corp. vs. Trajano
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.
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.
Particularly as regards employees "who are uniformly paid by the month, "the monthly
minimum wage shall not be less than the statutory minimum wage multiplied by 365 days
divided by twelve." This monthly salary shall serve as compensation "for all days in the
month whether worked or not," and "irrespective of the number of working days therein." In
other words, whether the month is of thirty (30) or thirty-one (31) days' duration, or twenty-
eight (28) or twenty-nine (29) (as in February), the employee is entitled to receive the entire
monthly salary.
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.
21. Cebu Institute Technology vs. Ople
FACTS: Six cases involving various private schools, their teachers and non-teaching school
personnel, and even parents with children studying in said schools, as well as the then
Minister of Labor and Employment, his Deputy, the National Labor Relations Commission,
and the then Minister of Education, Culture and Sports, have been consolidated in this single
Decision in order to dispose of uniformly the common legal issue raised therein, namely, the
allocation of the incremental proceeds of authorized tuition fee increases of private schools
provided for in section 3(a) of Presidential Decree No 451, and thereafter, under the
Education act of 1982 (BP 232).
The position taken by CIT during the conference held by the labor management committee
was that it had paid the allowances mandated by various decrees but the same had been
integrated in the teacher's hourly rate. It alleged that the payment of COLA by way of salary
increases is in line with Pres. Dec. No. 451. It also claimed in its position paper that it had
paid thirteenth month pay to its employees and that it was exempt from the payment of
service incentive leave to its teachers who were employed on contract basis.
After the report and recommendation of the committee, herein public respondent, then
Minister of Labor and Employment issued the assailed Order dated September 29, 1981 and
held that the basic hourly rate designated in the Teachers' Program is regarded as the basic
hourly rate of teachers exclusive of the COLA, and that COLA should not be taken from the
60% incremental proceeds of the approved increase in tuition fee. The dispositive portion of
the Order reads:
PREMISES CONSIDERED, CIT is hereby ordered to pay its teaching staff the following:
1) COLA under P.D.'s 525 and 1123 from February 1978 up to 1981;
2) COLA under P.D.'s l6l4,1634,1678 and l7l3; and
3) Service incentive leave from l978 upto l981.
CIT is further directed to integrate into the basic salaries of its teachers and (sic) COLA under
P.D.'s 525 and 1123 starting on January 1981, pursuant to P.D. 1751. For purposes of
integration, the hourly rate shown in its Teachers' Program for school year 198182 shall be
considered as the basic hourly rate.
SO ORDERED.
Petitioner assails the aforesaid Order in this Special Civil Action of certiorari with
Preliminary Injunction and/or Restraining Order. The Court issued a Temporary Restraining
Order on December 7, 1981 against the enforcement of the questioned Order of the Minister
of Labor and Employment.
ISSUE: public respondent erred in not declaring that petitioner is exempted and/or not
obliged to pay service incentive leave.
HELD: Going now to the matter of service incentive leave benefits, petitioner claims that
private respondents are engaged by the school on a contract basis as shown by the individual
teachers contract which defines the nature, scope and period of their employment; hence, they
are not entitled to the said benefit according to Rule V of the Implementing Rules and
Regulations of the Labor Code to wit:
Sec. 1. Coverage. — This rule [on Service Incentive Leave] 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 in a fixed amount for performing work irrespective of the time consumed in the
performance thereof; (MOLE Rules and Regulations, Rule V, Book III)
The phrase "those who are engaged on task or contract basis" should however, 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, [Vera v. Cuevas, G.R. No.
L-33693, May 31, 1979, 90 SCRA 379]. Clearly, petitioner's teaching personnel cannot be
deemed field personnel which refers "to 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. [Par.
3, Article 82, Labor Code of the Philippines]. Petitioner's claim that private respondents are
not entitled to the service incentive leave benefit cannot therefore be sustained.
22. Oceanic Pharmacal Employees Union vs. Inciong
Facts: Oceanic Pharmacal Employees Union and Oceanic Pharmacal, Inc. had a collective
bargaining agreement (CBA) good from March 1, 1976 to February 28, 1979.
“This is to confirm in writing the agreement made between your panel and our own
panel on April 24, 1976 on the following points:
1) Emergency Allowance — The management of OPI will continue its present practice
of extending emergency allowance to all employees receiving less than P1,000.00 per
month as basic pay.
2) Holiday Pay — OPI management will likewise continue to give holiday pay to
monthly-salaried employees.
On October 25, 1976, the Company posted on its bulletin board the following memorandum:
Ref.: Discontinuance of The Payment to Regular Employees of The Regular
Holidays Pay For Regular Holidays.
This has reference to the payment of the subject benefit forming part of the
supplemental Collective Bargaining Agreement dated April 27, 1976.
This commitment to pay said benefit is being discontinued on account to the proviso
in the said memo of the General Manager dated April 27, 1976, taken in relation to
Section 2, Rule IV, Book Ill of the Implementing Rules, Policy Instruction No. 9 and
the decision of the Secretary of Labor in the Chartered Bank Case dated September 7.
1976
Issue: WON the company may validly withdrew the incentives of its employees.
Facts: Section 2, Rule IV, Book Ill of the Rules and Regulations Implementing the Labor
Code was promulgated on February 16, 1976. On the other hand, Policy Instructions No. 9
was issued on February 23, 1976. Since the said rules and policy instructions were already
existing and effective prior to the execution of the Supplementary Agreement on April 27,
1976, it is clear that respondent company agreed to continue giving holiday pay to its
monthly paid employees knowing fully well that said employees are not covered by the law
requiring payment of holiday pay.
Also nothing in the Act justified an employer in reducing the wage paid to any of his
employees in excess of the minimum wage established under the Act or in reducing
supplements furnished on the date of enactment.
Evidently, there is no legal basis for the withdrawal of holiday benefits by the Company.
Consequently, its violation of the Supplementary Agreement constitutes unfair labor practice.
It shall be unfair labor practice for an employer to violate a collective bargaining agreement
(Art. 248, Labor Code)
23. Ruga et.al vs. NLRC
Facts: Petitioners were the fishermen-crew members of 7/B Sandyman II, one of several
fishing vessels owned and operated by private respondent De Guzman Fishing Enterprises
which is primarily engaged in the fishing business with port and office at Camaligan,
Camarines Sur. Petitioners rendered service aboard said fishing vessel.  of-control test where the person for whom the services are performed reserves a right to
For services rendered in the conduct of private respondent's regular business of "trawl"
fishing, petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de
Guzman, cashier of private respondent. As agreed upon, they received thirteen percent (13%)
of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil
consumed during the fishing trip, otherwise, they received ten percent (10%) of the total
proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a
minimum income of P350.00 per week while the assistant engineer, second fisherman, and
fisherman-winchman received a minimum income of P260.00 per week.  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).
During the investigation, no witnesses were presented to prove the charge against petitioners,
and no criminal charges were formally filed against them.  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. They
uniformly contended that they were arbitrarily dismissed without being given ample time to
look for a new job.  monthly salary of Songco, et. Al. for the purpose of computing their separation pay.
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.  of the basic salary of the employee but also of the transportation and emergency living
Held: Disputing the finding of public respondent that a "joint fishing venture" exists between
private respondent and petitioners, petitioners claim that public respondent exceeded its
jurisdiction and/or abused its discretion when it added facts not contained in the records when
it stated that the pilot-crew members do not receive compensation from the boat-owners
except their share in the catch produced by their own efforts; that public respondent ignored
the evidence of petitioners that private respondent controlled the fishing operations; that
public respondent did not take into account established jurisprudence that the relationship
between the fishing boat operators and their crew is one of direct employer and employee.   of remuneration for services rendered demonstrate that commissions are of Songco, et. Al.’s
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. In the absence of hiring, no actual employer-employee relation could
exist. From the four (4) elements mentioned, we have generally relied on the so-called right-
control not only the end to be achieved but also the means to be used in reaching such end.
The test calls merely for the existence of the right to control the manner of doing the work,
not the actual exercise of the right. The petition is granted.
24. Songco et. Al. vs. NLRC
Facts: Zuelig terminated 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 computation of the separation pay. The salesmen received monthly
salaries of at least P400.00 and commissions for every sale they made.
The Collective Bargaining Agreement 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.
Issue: Whether the earned sales commissions and allowances should be included in the
Held: In the computation of backwages and separation pay, account must be taken not only
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 the jobs particularly assigned to
them, still these commissions are direct remunerations for services rendered which
contributed to the increase of income of the employer. 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
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.
25. Rosario Gaa vs. CA
Facts: Respondent Europhil Industries Corporation was formerly one of the tenants in Trinity
Building at T.M. Kalaw Street, Manila, while petitioner Rosario A. Gaa was then the building
administrator. Europhil Industries commenced an action in the Court of First Instance of
Manila for damages against petitioner "for having perpetrated certain acts that Europhil
Industries considered a trespass upon its rights, namely, cutting of its electricity, and
removing its name from the building directory and gate passes of its officials and employees"
A writ of garnishment was issued pursuant to which Deputy Sheriff Cesar A. Roxas served a
Notice of Garnishment upon El Grande Hotel, where petitioner was then employed,
garnishing her "salary, commission and/or remuneration."
Petitioner then filed with the Court of First Instance of Manila a motion to lift said
garnishment on the ground that her "salaries, commission and, or remuneration are exempted
from execution under Article 1708 of the New Civil Code.
CFI: denied Gaa’s motion and her subsequent MR
CA: dismissed Gaa’s petition on the ground that GAA is not a mere laborer as contemplated
under Article 1708 as the term laborer does not apply to one who holds a managerial or
supervisory position like that of petitioner, but only to those "laborers occupying the lower
strata." It also held that the term "wages" means the pay given" as hire or reward to artisans,
mechanics, domestics or menial servants, and laborers employed in manufactories,
agriculture, mines, and other manual occupation and usually employed to distinguish the
sums paid to persons hired to perform manual labor, skilled or unskilled, paid at stated times,
and measured by the day, week, month, or season,"
Issue: WON Gaa may be considered a laborer as contemplated under Article 1708 of the CC.
Held: No. Gaa is not an ordinary or rank and file laborer but "a responsibly place employee,"
of El Grande Hotel. Considering the importance of petitioner's function in El Grande Hotel, it
is undeniable that Gaa is occupying a position equivalent to that of a managerial or
supervisory position.
The word "laborer" includes everyone who performs any kind of mental or physical labor, but
as commonly and customarily used and understood, it only applies to one engaged in some
form of manual or physical labor.
Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it declared
what are to be exempted from attachment and execution. The term "wages" as distinguished
from "salary", applies to the compensation for manual labor, skilled or unskilled, paid at
stated times, and measured by the day, week, month, or season, while "salary" denotes a
higher degree of employment, or a superior grade of services, and implies a position of office:
by contrast, the term wages " indicates considerable pay for a lower and less responsible
character of employment, while "salary" is suggestive of a larger and more important service.
26. Phil. Duplicators Inc. vs. NLRC
Facts: Phil. Duplicators Inc. pays its salesmen a small fixed or guaranteed wage; the greater
part of the latter’s wages or salaries being composed of the sales or incentive commissions
earned on actual sales of duplicating machines closed by them. Thus the sales commissions
received for every duplicating machine sold constituted part of the basic compensation or
remuneration of the salesmen of the Philippine Duplicators for doing their job.
The Labor Arbiter directed Petitioner Duplicators to pay 13 th month pay to private respondent
employees computed on the basis of their fixed wages plus sales commission.
Sec. 4 of the Supplementary Rules and Regulations Implementing PD No. 851 (Revised
Guidelines Implementing 13th Month Pay) provides that overtime pay, earning and other
remuneration which are not part of the basic salary shall not be included in the computation
of the 13th month pay.
Petitioner Corporation contends that their sales commission should not be included in the
computation of the 13th month pay invoking the consolidated cases of Boie-Takeda
Chemicals, Inc. vs Hon. Dionisio dela Serna and Philippine Fuji Xerox Corp. vs Hon.
Crecencio Trajano, were the so-called commissions of medical representatives of Boie-
Takeda Chemicals and rank-and-file employees of Fuji Xerox Co. were not included in the
term “basic salary” in computing the 13th month pay.
Issue: WON sales commissions comprising a pre-determined percent of the selling price of
the goods are included in the computation of the 13th month pay.
Held: Yes. These commission which are an integral part of the basic salary structure of the
Philippine Duplicator’s employees-salesmen, are not overtime payments, nor profit-sharing
payments nor any other fringe benefit. Thus, salesmen’s commissions comprising a pre-
determined percent of the selling price of the goods were properly included in the term “basic
salary”  for purposes of computing the 13th month pay.
Commissions of medical representatives of Boie-Takeda Chemicals and rank-and-file
employees of Fuji Xerox Co. were not included in the term “basic salary” because these were
paid as “productivity bonuses” which is not included in the computation of 13 th month pay.
27. BOSE – Takeda Chemicals Inc. vs. Hon De La Serna
Facts: A routine inspection was conducted in the premises of petitioner Boie-Takeda
Chemicals, Inc. by Labor and Development Officer Reynaldo B. Ramos. Finding that Boie-
Takeda had not been including the commissions earned by its medical representatives in the
computation of their 13th month pay, Ramos served a Notice of Inspection Results on Boie-
Takeda through its president, Mr. Benito Araneta, requiring Boie-Takeda within ten (10)
calendar days from notice to effect restitution or correction of "the underpayment of 13th
month pay for the years 1986, 1987 and 1988.
Boie-Takeda wrote the Labor Department contesting the Notice of Inspection Results, and
expressing the view "that the commission paid to our medical representatives are not to be
included in the computation of the 13th month pay since thelaw and its implementing rules
speak of REGULAR or BASIC salary and therefore exclude all other remunerations which
are not part of the REGULAR salary." It pointed out that, "if no sales is made under the effort
of a particular representative, there is no commission during the period when no sale was
transacted, so that commissions are not and cannot be legally defined as regular in nature.   decision in favor of private respondent. Petitioners appealed to NLRC, but the same was
Regional Director Luna C. Piezas issued an Order directing Boie-Takeda to pay its medical
representatives and its managers the underpayment of thirteenth (13th) month pay for the
years 1986, 1987, 1988.
A similar Routine Inspection was conducted in the premises of Philippine Fuji Xerox Corp.
where it was found there was was underpayment of 13 month pay since commissions were
not included. In their almost identical-worded petitioner, petitioners, though common
counsel, attribute grave abuse of discretion to respondent labor officials Hon. Dionisio Dela
Serna and Undersecretary Cresencio B. Trajano.
Issue: WON commissions are included in the computation of 13-month pay.
Held: No. The concept of 13th Month Pay as envisioned, defined and implemented under
P.D. 851 remained unaltered, and while entitlement to said benefit was no longer limited to
employees receiving a monthly basic salary of not more than P1,000.00, said benefit was, and
still is, to be computed on the basic salary of the employee-recipient as provided under P.D.
851. Thus, the interpretation given to the term "basic salary" as defined in P.D. 851 applies
equally to "basic salary" under Memorandum Order No. 28.
The term "basic salary" is to be understood in its common, generally-accepted meaning, i.e.,
as a rate of pay for a standard work period exclusive of such additional payments as bonuses
and overtime.
In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed
or guaranteed wage is patently the "basic salary" for this is what the employee receives for a
standard work period. Commissions are given for extra efforts exerted in consummating sales
or other related transactions. They are, as such, additional pay, which this Court has made
clear do not form part of the "basic salary."
28.) JACKSON BUILDING CONDOMINIUM CORPORATION vs. NLRC
FACTS: The private respondent in this case was employed by the petitioner company as a
janitor. On November 15, 1992, private respondent filed a 45-day leave of absence from
November 15, 1991 to December 29, 1991 to undergo an appendectomy (which would
necessitate complete bed rest for about thirty days from the date of operation as shown by his
medical certificate) and was subsequently granted by the petitioner. On January 3, 1992,
private respondent informed petitioner Razul Requesto, president of petitioner corporation,
that he was physically fit to assume his work. However, petitioners refused to accept him
back contending that he had abandoned his work. The private respondent filed with the Labor
Arbiter a complaint against petitioners for illegal dismissal, underpayment of wages and non-
payment of thirteenth-month pay and service-incentive leave pay. Petitioner opposed the
same, wherein they alleged that private respondent was not dismissed but was merely advised
to rest for health reasons until he could procure a medical certificate attesting that he was fit
to work. They further alleged that private respondent failed to return to his workplace or to
submit the required medical certificate. On October 30, 1992, the Labor Arbiter rendered a
affirmed by said agency, thus, the filling of this case.
ISSUE: (1) Whether private respondent abandoned his work; and (2) whether petitioners are
liable for the payment of private respondent's back wages, differential pay, thirteenth-month
pay and service-incentive leave pay for 1991.
HELD: (1) The Court said that in order for abandonment to be a valid ground for dismissal,
two requisites must be compresent: the intention by an employee to abandon coupled with an
overt act from which it may be inferred that the employee had no more intention to resume
his work. Which is not both present in this case. As found by the Labor Arbiter, private
respondent's physician advised him to rest for 30 days before reporting back for work in order
to recuperate. Private respondent heeded this advise and even exceeded the number of days
recommended by his doctor for his recuperation. In fact, he reported back for work 50 days
after his operation. This would clearly show that private respondent was ready to assume his
responsibilities after having fully recovered from the operation.
(2) Yes, private respondent is entitled to the same. Section 31 of R.A. No. 6715 which
amended Article 279 of the Labor Code of the Philippines provides that "an employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges without loss of seniority rights and other privileges and to his full
back wages, inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his actual
reinstatement.". The award of back wages by NLRC to private respondent was predicated on
the ground that he was illegally dismissed and not on his failure to report for work. Private
respondent is likewise entitled to the thirteenth-month pay. Presidential Decree No. 851, as
amended by Memorandum Order No. 28, provides that employees are entitled to the
thirteenth-month pay benefit regardless of their designation and irrespective of the method by
which their wages are paid.
29.) NERI vs. NLRC
FACTS: Petitioners instituted complaints against FEBTC and BCC to compel the bank to
accept them as regular employees and for it to pay the differential between the wages being
paid them by BCC and those received by FEBTC employees with similar length of service.
They contended that BCC in engaged in labor-only contracting because it failed to adduce
evidence purporting to show that it invested in the form of tools, equipment, machineries,
work premises and other materials which are necessary in the conduct of its business.
Moreover, petitioners argue that they perform duties 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 to 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 of Php 1million 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.
30.) PILIPINAS SHELL PETROLEUM CORPORATION vs. CA and CAMACHO
FACTS: Clarita T. Camacho, the operator of a gasoline station in Baguio City wherein she
sells Pilipinas Shell Petroleum Corp.’s (Shell) petroleum products, requested Shell to conduct
a hydropressure test on the underground storage tanks of the said station in order to determine
whether or not the sales losses she was incurring for the past several months were due to
leakages therein. Shell acceded to the said request and one Jesus “Jessie” Feliciano together
with other workers came to Clarita's station with a Job Order from Shell to perform the
hydropressure test. Jessie conducted the necessary procedures to carry out the said test. At
around 5:30 a.m. the next day, Clarita’s husband opened the station and started selling
gasoline. At about 6:00 a.m. however, the customers who had bought gasoline returned to the
station complaining that their vehicles stalled because there was water in the gasoline that
they bought. On account of this, Clarita was constrained to replace the gasoline sold to the
said customers. However, a certain Eduardo Villanueva, one of the customers, filed a
complaint with the police against Camacho for selling the adulterated gasoline. In addition,
he caused the incident to be published in two local newspapers. Shell undertook to settle the
criminal complaint filed by Villanueva. Subsequently, Villanueva filed an Affidavit of
Desistance. Thereafter, Camacho filed before the trial court a complaint for damages against
Shell due to the latter’s alleged negligence in the conduct of the hydropressure test in her
gasoline station. For its part, Shell denied liability because, according to it, the hydropressure
test on the underground storage tanks was conducted by an independent contractor. The trial
court dismissed the complaint which ruling was reversed by the Court of Appeals.
ISSUE: Whether Shell should be held accountable for the damage to Camacho due to the
hydropressure test conducted by Feliciano
HELD: It is a wellentrenched rule that an employeremployee relationship must exist before
an employer may be held liable for the negligence of his employee. Respondent Court of
Appeals coneluded that Feliciano was not an independent contractor but was under the
control and supervision of petitioner in the performance of the hydropressure test, hence, it
held petitioner liable for the former’s acts and omissions. We are not in accord with the above
finding of respondent Court of Appeals. As aptly held by the trial court, petitioner did not
exercise control and supervision over Feliciano with regard to the manner in which he
conducted the hydropressure test. Feliciano is independently maintaining a business under a
duly registered business name “JFS Repair and Maintenance Service,” and is duly registered
with the Bureau of Domestic Trade. He does not enjoy a fixed salary but instead charges a
lump sum consideration for every piece of work he accomplishes. If he is not able to finish
his work, he does not get paid, as what happened in this case. Further, Feliciano utilizes his
own tools and equipment and has a complement of workers. Neither is he required to work on
a regular basis. Instead, he merely awaits calls from clients such as petitioner whenever
repairs and maintenance services are requested. Moreover, Feliciano does not exclusively
service petitioner because he can accept other business but not from other oil companies. All
these are the hallmarks of an independent contractor. Being an independent contractor,
Feliciano is responsible for his own acts and omissions. As he alone was in control over the
manner of how he was to undertake the hydropressure test, he alone must bear the
consequences of his negligence, if any, in the conduct of the same. Anent the issue of
damages, the same has been rendered moot by the failure of private respondent to establish an
employeremployee relationship between petitioner and Feliciano. Absent said relationship,
petitioner cannot be held liable for the acts and omissions of the independent contractor,
Feliciano.
31.) DBP vs. NLRC (1)
FACTS: On November 14, 1986, the private respondents filed with the Provincial Extension
Office of the Department of Labor and Employment (DOLE) in Daet, Camarines Norte
seventeen individual complaints against RHI for unpaid wages and separation pay. These
complaints were thereafter endorsed to the Regional Arbitration Branch (Branch V of
Legaspi City) of the National Labor Relations Commission (NLRC) since the petitioners had
already been terminated from employment. In its position paper dated March 1987, RHI
alleged that it had ceased to operate in 1983 due to the government ban against tree-cutting. It
further alleged that in May 24, 1981, its sawmill was totally burned resulting in enormous
losses and that due to its financial setbacks, RHI failed to pay its loan with the DBP. RHI
contended that since DBP foreclosed its mortgaged assets on September 24, l985, then any
adjudication of monetary claims in favor of its former employees must be satisfied against
DBP. On October 28, 1988, Executive Labor Arbiter Gelacio Rivera rendered a joint decision
on the complaints in favor of the private respondents. DBP appealed to the NLRC which
rendered a decision on April 15, 1991 affirming the labor arbiter's judgment. DBP filed a
motion for reconsideration which was likewise dismissed by the NLRC on May 17, 1991.
ISSUE: Whether or not Executive Labor Arbiter Gelacio L. Rivera and the NLRC correctly
applied Article 110 of the Labor Code in this case.
HELD: Article 110, prior to its amendment by Republic Act No. 6715, reads:
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 wages due them for services rendered during the period prior to the
bankruptcy or liquidation, any provision of law to the contrary notwithstanding.
Unpaid wages shall be paid in full before other creditors may establish any claim to a
share in the assets of the employer.
In Republic v. Peralta, 150 SCRA 37 (1987), the Court held that the term "wages" includes
separation pay. But the Court declared:
Article 110 of the Labor Code, in determining the reach of its terms, cannot be
viewed in isolation. Rather, Article 110 must be read in relation to the provisions of
the Civil Code concerning the classification, concurrence and preference of credits,
which provisions find particular application in insolvency proceedings where the
claims of all creditors, preferred or non-preferred, may be adjudicated in a binding
manner.
We have repeatedly stressed that before the workers' preference provided by Article 110 may
be invoked, there must first be a declaration of bankruptcy or a judicial liquidation of the
employer's business.
The NLRC, therefore, committed grave abuse of discretion when it affirmed the labor
arbiter's ruling that the workers' preference espoused in Article 110 may be applied even in
the absence of a declaration of bankruptcy or a liquidation order.
32.) DBP vs. NLRC (2)
FACTS: Private respondent labor union filed on January 10, 1986, a complaint, which
alleges that they were all employees of respondent Midland Cement Corporation who were
terminated from employment on or about July 30, 1981 by reason of the termination of the
business operations of the Construction and Development Corporation of the Philippines
(CDCP) now PNCC, which was brought about by the expiration of the lease contract between
Midland Cement Corporation and CDCP. After hearing, the Labor Arbiter rendered a
decision on January 5, 1990, finding DBP jointly and severally liable with Midland Cement
for the payment of the separation pay. DBP appealed, contending that its acquisition of the
mortgaged assets of Midland through foreclosure sale did not make it the owner of the
defunct Midland Cement, and that the doctrine of successor-employee is not applicable in this
case, since DBP did not continue the business operations of Midland. The NLRC, while
finding merit in DBP's contention, nonetheless held DBP liable since respondent's claim
"constitutes a first preference with respect to the proceeds of the foreclosure sale" as provided
in Article 110 of the Labor Code. Following the denial of its motion for reconsideration, DBP
filed the instant petition.
ISSUE: Whether or not NLRC erred in holding DBP liable "to the extent of the proceeds of
the foreclosure sale”.
HELD: The Court held in the affirmative. DBP correctly points out that its mortgage lien
should not be classified as a preferred credit. The issue raised was settled in  Republic v.
Peralta and reinforced in DBP v. NLRC wherein we held because of its impact on the entire
system of credit, Article 110 of the Labor Code cannot be viewed in isolation but must be
read in relation to the Civil Code scheme on classification and preference of credits. Making
such liability dependent on a bankruptcy or liquidation proceedings is really beside the point,
for these proceedings are relevant only to preferred credits, which is not the situation in the
case at bar. To equate DBP's mortgage lien with a preferred credit would be to render inutile
the protective mantle of the mortgage in DBP's favor and thus in the process wreak havoc to
commercial transactions.
33.) REPUBLIC vs. PERALTA
FACTS: The Republic of the Philippines seeks the review on certiorari of the Order of the
CFI of Manila in its Civil Case No. 108395 entitled "In the Matter of Voluntary Insolvency of
Quality Tobacco Corporation, Quality Tobacco.”- In its questioned Order, the trial court held
that the above enumerated claims of USTC and FOITAF (hereafter collectively referred to as
the "Unions") for separation pay of their respective members embodied in final awards of the
NLRC were to be preferred over the claims of the Bureau of Customs and the BIR. The trial
court, in so ruling, relied primarily upon Article110 of the Labor Code.- The Solicitor
General, in seeking the reversal of the questioned Orders, argues that Article 110 of the Labor
Code is not applicable as it speaks of "wages," a term which he asserts does not include the
separation pay claimed by the Unions. "Separation pay," the Solicitor General contends: is
given to a laborer for a separation from employment computed on the basis of the number of
years the laborer was employed by the employer; it is a form of penalty or damage against the
employer in favor of the employee for the latter's dismissal or separation from service
ISSUE: Whether or not separation pay of their respective members embodied in final awards
of the NLRC were to be preferred over the claims of the Bureau of Customs and the BIR.
HELD: Yes. For the specific purposes of Article 110 and in the context of insolvency
termination or separation pay is reasonably regarded as forming part of the remuneration or
other money benefits accruing to employees or workers by reason of their having previously
rendered services to their employer; as such, they fall within the scope of "remuneration or
earnings — for services rendered or to be rendered — ." Liability for separation pay might
indeed have the effect of a penalty, so far as the employer is concerned. So far as concerns
the employees, however, separation pay is additional remuneration to which they become
entitled because, having previously rendered services, they are separated from the employer's
service.
34.) TAGANAS vs. NLRC
FACTS: Taganas is a lawyer for several janitors under the employ of Ultra Clean Services
and Philippine Tuberculosis Society, Inc. There was a labor dispute between the said janitors
and their employers. Taganas defended the janitors in the civil case for reinstatement, full
back wages, thirteenth month pay and emergency cost of living allowance. Taganas and his
clients won the case and so Taganas sought to enforce his attorney’s charging lien which
amounted to 50% of the amount awarded to his clients. The 10 out of the 14 clients were
aggrieved for receiving a reduced award due to the attorney’s charging lien and contested the
validity of the contingent fee. The four others agreed to the original amount.
ISSUE: Whether or not Taganas’ contingent fee of 50% of the award to his clients is
excessive.
HELD: A contingent fee arrangement is an agreement between the lawyer and his client in
which the lawyer’s professional fee, usually a fixed percentage of what may be recovered in
the action is made to depend upon the success of the litigation. It should be noted however
that Section 13 of the Canons of Professional Ethics states that “a contract for a contingent
fee where sanctioned by law, should be reasonable under all circumstances of the case
including the risk and uncertainty of the compensation, but should always be the subject to
the supervision of the court, as to its reasonableness.” The reduction of unreasonable
attorney’s fees is within the regulatory powers of the courts. 50% of the judgment award as
attorney’s fees is excessive and unreasonable considering the financial capacity and economic
status of Taganas’s clients. Also, petitioner’s contingent fee falls within Article 111 of the
Labor Code which puts a maximum 10% contingent fee for attorney’s in labor cases. The
decision of the NLRC to disallow the 50% contingent fee is upheld, only 10% should be paid
to Tagarnas.
35.) APODACA vs. NLRC
FACTS: Petitioner was employed in respondent corporation. He was persuaded by
respondent Mirasol to subscribe to 1,5000 shares or a total of Php150,000.00. He paid
Php37,500.00. 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 the representation
expenses and his bonus compensation for 1986. Private respondents admitted that there is due
to petitioner the amount of Php17,060.07 but this was applied to the unpaid balance of his
subscription in the amount Php95,439.93. 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.
ISSUE: (1) 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 therefrom
be offset against a money claim of an employee against the wmployer.
HELD: (1) NLRC has no jurisdiction to determine such intra-corporate dispute between the
stockholder and the corporation in the matter of unpaid subscriptions. This controversy is
within the exclusive jurisdiction of the Securities and Exchange Commission.
(2) No, the unpaid subscription 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 or a 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
deduction from the wages of the employees by the employer, only in 3 instances.
36.) SERVANDO'S INCORPORATED vs. THE SECRETARY OF LABOR
FACTS: The Labor Standards and Welfare Office conducted a routine inspection of
petitioner’s establishment and discovered that there were deficiency in the wages of 54
employees pursuant to 3 Wage Orders. Adopting tthe recommendation made by the Labor
Standards and Welfare Office, the Regional Director issued an order requiring petitioner to
pay its employees the total amount of P964.952.50 as differentials.
ISSUE:.Whether or not the Regional Director has the jurisdiction to hear and decide cases in
volving recovery of wages and other monetary claims and benefits of
workers and employees.
HELD: The power of the Regional Director to adjudicate employees’ money claims is
subject to the concurrence of all the requisites provided under Sec. 2 of RA 6715, to wit: (1)
the claim is presented by an employee or person employed in domestic or household service,
or househelper; (2) the claim arises from employer-employee relations; (3) the claimant does
not seek reinstatement; and (4) the aggregate money claim of each employee or househelper
does not exceed P5,000.00. In the case at bar, the Regional Director has no jurisdiction over
the case. The aggregate claims of each of the fifty four (54) employees of herein petitioner
are over and above the amount of P5,000.00. Under the circumstances, the power to
adjudicate such claims belongs to the Labor Arbiter who has the exclusive jurisdiction over
employees’ claims where the aggregate amount of the claim for each employee exceeds
P5,000.00.
37.) BROKENSHIRE MEMORIAL HOSPITAL, INC. vs. MINISTER OF LABOR
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 ROXILSED-14-85, which is now the
case at bar.
ISSUE: Whether or not the Regional Director has jurisdiction over money claims of workers
concurrent with the Labor Arbiter.
HELD: It will be observed that what in fact conferred upon Regional Directors and other
hearing officers of the Department of Labor (aside from the Labor Arbiters) adjudicative
powers, i.e., the power to try and decide, or hear and determine any claim brought before
them for recovery of wages, simple money claims, and other benefits, is Republic Act 6715,
provided that the following requisites concur, to wit: 1) The claim is presented by an
employee or person employed in domestic or household service, or househelper under the
code; 2) The claimant, no longer being employed, does not seek reinstatement; and 3) The
aggregate money claim of the employee or househelper does not exceed five thousand pesos
(P5,000.00). In the absence of any of the three (3) requisites, the Labor Arbiters have
exclusive original jurisdiction over all claims arising from employer-employee relations,
other than claims for employee's compensation, social security, medicare and maternity
benefits. Petitioner's contention that the constitutionality of Wage Order Nos. 5 and 6 should
be passed upon by the NLRC, lacks merit. The Supreme Court is vested by the Constitution
with the power to ultimately declare a law unconstitutional. Without such declaration, the
assailed legislation remains operative and can be the source of rights and duties especially so
in the case at bar when petitioner complied with Wage Order No. 5 by paying the claimants
the total amount of P163,047.50, representing the latter's minimum wage increases up to
October 16, 1984, instead of questioning immediately at that stage before paying the amount
due, the validity of the order on grounds of constitutionality. The Regional Director is
plainly, without the authority to declare an order or law unconstitutional and his duty is
merely to enforce the law which stands valid, unless otherwise declared by this Tribunal to be
unconstitutional. The labor regulations officers may not be deemed uncontested as to bring
the case at bar within the competence of the Regional Director, as duly authorized
representative of the Secretary of Labor, pursuant to Article 128 of the Labor Code, as
amended. Considering further that the aggregate claims involve an amount in excess of
P5,000.00, We find it more appropriate that the issue of petitioner hospital's liability therefor,
including the proposal of petitioner that the obligation of private respondents to the former in
the aggregate amount of P507,237.57 be used to offset its obligations to them, be ventilated
and resolved, not in a summary proceeding before the Regional Director under Article 128 of
the Labor Code, as amended, but in accordance With the more formal and extensive
proceeding before the Labor Arbiter. Nevertheless, it should be emphasized that the amount
of the employer's liability is not quite a factor in determining the jurisdiction of the Regional
Director. However, the power to order compliance with labor standards provisions may not
be exercised where the employer contends or questions the findings of the labor regulation
officers and raises issues which cannot be determined without taking into account evidentiary
matters not verifiable in the normal course of inspection, as in the case at bar. 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, the court did not see any
vested right that will be impaired by the application of RA 6715.
38.) REYES vs. NLRC
39.) CLAUDINE DE CASTRO ZIALCITA, et. al. vs. PAL
FACTS: Petitioner started teaching in the respondent school in August 1972. She went on
FACTS: Complainant Zialcita, an international flight stewardess of PAL, was discharged
maternity leave effective August 26 up to October 10, 1982. In view of complications
resulting from the delivery of her child, she asked for a leave extension and filed an from the service on account of her marriage. In discharging Zialcita, PAL invoked its policy
that flight attendants must be single, and shall be automatically separated from employment
application for indefinite leave of absence until such time as she would be ready to report for
work. On December 21, 1982, she reported for work but was able to teach for only one day in the event that they subsequently get married. They claimed that this policy was in
accordance with Article 132 of the Labor Code. On the other hand, Zialcita questioned her
because she suffered a nervous breakdown. After the Christmas vacation, she again filed an
application for an indefinite leave of absence because of poor health but this was disapproved termination on account of her marriage, invoking Article 136 of the same law.
by the school. On September 13, 1983, upon the advice of the school principal, she submitted ISSUE: Whether or not Zialcita was validly terminated on account of her marriage.
a letter to get her two months’ vacation salary and to tender her resignation on the promise
that she would be given priority for re-employment. Two weeks later, she sent her husband to HELD: The Court held on the negative. When Presidential Decree No. 148, otherwise known as
the school to claim her vacation pay. Petitioner was then and there paid her two months’ the Women and Child Labor Law, was promulgated on March 133, 1973, PAL’s policy had met
vacation pay by the school. When the school opened in June 1985, the petitioner, who had in its doom. However, since no one challenged its validity, the said policy was able to obtain a
the meantime fully regained her health, applied for reinstatement, but the school refused to momentary reprieve. Section 8 of PD 148 is exactly the same as provision produced verbatim in
Article 136 of the Labor Code, which was promulgated on May 1, 1974 and took effect 6 months
re-hire her. Feeling aggrieved, she filed a complaint for reinstatement, backwages and other
later. Although Article 1132 enjoins the Sec. of Labor to establish standards that will ensure the
benefits with the NLRC in Cagayan de Oro City. The labor arbiter treated her complaint as a
safety and health of women employees and in appropriate cases shall by regulation require
claim for separation pay and dismissed it for lack of merit. Aggrieved by the decision of the employers to determine appropriated minimum standards for termination in special occupations,
Labor Arbiter, petitioner appealed to the NLRC on the sole ground that the labor arbiter erred such as those flight attendants, it is logical to presume that, in the absence of said standards or
in holding that her resignation was voluntary. On April 6, 1987, the NLRC dismissed the regulations which are yet to be established, the policy of PAL against marriage is patently illegal.
appeal holding that since the petitioner had voluntarily resigned from her teaching position Art. 136 is not meant to apply only to women employed in ordinary occupations, or it should have
and thereby severed the employer-employee relationship, she is not entitled to any separation categorically expressed so. The sweeping intendment of the law, be it on ordinary occupations, is
pay. reflected in the whole text and supported by Art. 135 that speaks of non-discrimination on the
employment of women.
ISSUE: Whether or not respondent NLRC committed a grave abuse of discretion.
HELD: The respondent NLRC committed a grave abuse of discretion when it disregarded
facts in the records proving that the petitioner's supposed "resignation" was involuntary, that
it was in fact procured by her employer on the promise that she would be given priority for
re-employment and in consideration of immediately paying her two months’ vacation which
she desperately needed then because she was ill. Article 133(b) of the Labor Code provides:
ART. 133(b). The maternity leave shall be extended without pay on account
of illness medically certified to arise out of the pregnancy, delivery, abortion,
or miscarriage, which renders the woman unfit for work, unless she has
earned unused leave credits from which such extended leave may be charged.
To extricate itself from its promise to re-hire her, the school made her husband sign in her
behalf an unconditional letter of resignation when he went to the school to collect his wife's
vacation pay. That letter is not binding on the petitioner for there is no proof that she
authorized her husband to write it for her and to waive her right to be re-hired as promised by
the school or to abandon her right to separation pay if she would not be reinstated. The
schools refusal in bad faith to re-employ her despite its promise to do so, amounted to illegal
dismissal. Consequently, she is entitled to be reinstated with three years backwages.
40.) APEX MINING COMPANY, INC. vs. NLRC
42.) ZAMORA vs. SY (CA decision)
FACTS: Private respondent Candido was employed by petitioner Apex mining Co., Inc. to
xxx The issue is whether the phrase "medical attendance", as used in this provision, includes
perform laundry services at its staff house. On December 18, 1987, while she was attending
to her assigned task and she was hanging her laundry, she accidentally slipped and hit her "expenses of hospitalization." The question is one of first impression in this jurisdiction,
although the Court of Appeals has decided it in the negative in Zamora v. Sy, 52 Off.
back on a stone. As a result of the accident she was not able to continue with her work. She
was permitted to go on leave for medication. Dela Rosa (her immediate supervisor) offered Gaz., 1513.xxx (G.R. No. L-16298 September 29, 1962, ESTEBAN CUAJAO vs. CHUA LO
TAN, ET AL)
her the amount of Php2,000.00 which was eventually increased to Php5,000.00 to persuade
her to quit her job, but she refused the offer and preferred to return to work. Petitioner did not
allow her to return to work and dismissed her on February 4, 1988, Private respondent filed a
request for assistance with the DOLE, which the latter rendered its Decision by ordering
Apex Mining to pay Candido the total amount of Php55,161.42 for salary differential,
emergency living allowance, 13th month differential and separation pay. Petitioner appealed
before the NLRC, which was subsequently dismissed for lack of merit.
ISSUE: Whether or not private respondent should be treated as househelper or domestic
servant or a regular employee.
HELD: Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the term
“househelper” as used herein is synonymous to the term “domestic servant” and shall refer to
any person, whether male or female, who renders services in and about the employer’s home
and which services are usually necessary or desirable for the maintenance and enjoyment
thereof, and ministers exclusively to the personal comfort and enjoyment of employer’s
family. The definition cannot be interpreted to include househelper or laundrywomen
working on staff houses of a company, like private respondent who attends to the needs of the
company’s guest and other persons availing of said facilities. The mere fact that househelper
or domestic servant is working within the premises of the business of the employer and in
relation to or in connection with its staff houses for its guest or even for its officers and
employees, warrants the conclusion that such househelper or domestic servant is and should
be considered as a regular employee.