Continental Micronesia, Inc. v. Basso, G.R Nos. 178382-83, September 23, 2015 G.R. Nos.

178382-83;
September 23, 2015 CONTINENTAL MICRONESIA, INC., Petitioner, vs. JOSEPH BASSO, Respondent.
JARDELEZA, J.:

DOCTRINE:

FACTS:

Petitioner Continental Micronesia, Inc. (CMI) is a foreign corporation organized and existing under the
laws of and domiciled in the United States of America (US). It is licensed to do business in the
Philippines. Basso, a US citizen, resided in the Philippines prior to his death. Mr. Braden, Managing
Director-Asia of Continental Airlines (Continental), offered Basso the position of General Manager of the
Philippine Branch of Continental. Basso accepted the offer. It was not until much later that Mr. Braden,
who had since returned to the US, sent Basso the employment contract8 dated February 1, 1991, which
Mr. Braden had already signed. Basso then signed the employment contract and returned it to Mr.
Braden as instructed.

CMI took over the Philippine operations of Continental, with Basso retaining his position as General
Manager. Basso received a letter from Mr. Schulz, who was then CMI's Vice President of Marketing and
Sales, informing Basso that he has agreed to work in CMI as a consultant on an "as needed basis” Basso
wrote another letter addressed to Ms. Woodward of CMI's Human Resources Department inquiring
about the status of his employment. Ms. Woodward responded that pursuant to the employment
contract dated February 1, 1991, Basso could be terminated at will upon a thirty-day notice. Ms.
Woodward also reminded Basso of the telephone conversation between him, Mr. Schulz and Ms.
Woodward where they informed him of the company's decision to relieve him as General Manager. CMI
offered Basso a severance pay, in consideration of the Php1, 140,000.00 housing advance that CMI
promised him.

Basso filed a Complaint for Illegal Dismissal with Moral and Exemplary Damages against CMI CMI filed a
Motion on the ground of lack of jurisdiction over the person of CMI and the subject matter of the
controversy Labor Arbiter granted the Motion to Dismiss. Applying the doctrine of lex loci contractus,
the Labor Arbiter held that the terms and provisions of the employment contract show that the parties
did not intend to apply our Labor Code.

The Labor Arbiter also held that no employer-employee relationship existed between Basso and the
branch office of CMI in the Philippines, but between Basso and the foreign corporation itself.

On appeal, the NLRC REMANDED the case to the Labor Arbiter for the determination of certain facts to
settle the issue on jurisdiction.

Labor Arbiter's Ruling: Labor Arbiter dismissed the case for lack of merit and jurisdiction. The Labor
Arbiter agreed with CMI that the employment contract was xecuted in the US "since the letter-offer was
under the Texas letterhead and the acceptance of Complainant was returned there." Thus, applying the
doctrine of lex loci celebrationis, US laws apply. Also, applying lex loci contractus, the Labor Arbiter
ruled that the parties did not intend to apply Philippine laws, thus:

NLRC's Ruling: Reversed and Set aside LA ruling. It ruled that the Labor Arbiter acquired jurisdiction over
the case when CMI voluntarily submitted to his office's jurisdiction. On the merits, the NLRC agreed with
the Labor Arbiter that Basso was dismissed for just and valid causes on the ground of breach of trust and
loss of confidence.

The Court of Appeal's Decision: Denied and Dismissed Continental’s petition. Granted Basso’s petition
and declared the dismissal illegal.

ISSUE:

1. Whether or not the COURT OF APPEALS erred in ruling that the LABOR ARBITER and the NLRC had
jurisdiction to hear and try the illegal dismissal case.

2. Whether or not the court of appeals erred in finding that basso was not validly dismissed on the
ground of loss of trust or confidence

RULING:

1. No. The Labor Arbiter and NLRC had jurisdiction to hear and try the illegal dismissal case.

The Supreme Court held that in the judicial resolution of conflict-of-laws problems, three consecutive
phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments.

In resolving the conflicts problem, courts should ask the following questions: A. "Under the law, do I
have jurisdiction over the subject matter and the parties to this case? B. "If the answer is yes, is this a
convenient forum to the parties, in light of the facts? C. "If the answer is yes, what is the conflicts rule
for this particular problem? D. "If the conflicts rule points to a foreign law, has said law been properly
pleaded and proved by the one invoking it? E. "If so, is the application or enforcement of the foreign law
in the forum one of the basic exceptions to the application of foreign law?

In short, is there any strong policy or vital interest of the forum that is at stake in this case and which
should preclude the application of foreign law?

A. This case stemmed from an illegal dismissal complaint. The Labor Code, under Article 217, clearly
vests original and exclusive jurisdiction to hear and decide cases involving termination disputes to the
Labor Arbiter. Hence, the Labor Arbiter and the NLRC have jurisdiction over the subject matter of the
case. As regards jurisdiction over the parties, the SC agreed with the Court of Appeals that the Labor
Arbiter acquired jurisdiction over the person of Basso, notwithstanding his citizenship, when he filed his
complaint against CMI. On the other hand, jurisdiction over the person of CMI was acquired through the
coercive process of service of summons. The SC noted that CMI never denied that it was served with
summons B. Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-laws case
may assume jurisdiction if it chooses to do so, provided, that the following requisites are met: (1) that
the Philippine Court is one to which the parties may conveniently resort to; (2) that the Philippine Court
is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine
Court has or is likely to have power to enforce its decision.46 All these requisites are present here. Basso
may conveniently resort to our labor tribunals as he and CMI lad physical presence in the Philippines
during the duration of the trial. CMI has a Philippine branch, while Basso, before his death, was residing
here. The labor tribunals can make an intelligent decision as to the law and facts. The incident subject of
this case (i.e. dismissal of Basso) happened in the Philippines, the surrounding circumstances of which
can be ascertained without having to leave the Philippines C. In Saudi Arabian Airlines v. Court of
Appeals, the SC emphasized that an essential element of conflict rules is the indication of a "test" or
"connecting factor" or "point of contact". Choice-of-law rules invariably consist of a factual relationship
(such as property right, contract claim) and a connecting fact or point of contact, such as the situs of the
res, the place of celebration, the place of performance, or the place of wrongdoing. Pursuant to Saudi
Arabian Airlines, the "test factors," "points of contact" or "connecting factors" in this case are the
following: (1) The nationality, domicile or residence of Basso; (2) The seat of CMI; (3) The place where
the employment contract has been made, the locus actus; (4) The place where the act is intended to
come into effect, e.g., the place of performance of contractual duties; (5) The intention of the
contracting parties as to the law that should govern their agreement, the lex loci intentionis; and (6) The
place where judicial or administrative proceedings are instituted or done. Applying the foregoing in this
case, the SC concluded that Philippine law the applicable law. Basso, though a US citizen, was a resident
here from the time he was hired by CMI until his death during the pendency of the case. CMI, while a
foreign corporation, has a license to do business in the Philippines and maintains a branch here, where
Basso was hired to work. The contract of employment was negotiated in the Philippines. A purely
consensual contract, it was also perfected in the Philippines when Basso accepted the terms and
conditions of his employment as offered by CMI. The place of performance relative to Biasso's
contractual duties was in the Philippines. The alleged prohibited acts of Basso that warranted his
dismissal were committed in the Philippines. Clearly, the Philippines is the state with the most significant
relationship to the problem. Thus, we hold that CMI and Basso intended Philippine law to govern,
notwithstanding some references made to US laws and the fact that this intention was not expressly
stated in the contract. If the foreign law is not properly pleaded or proved, the presumption of identity
or similarity of the foreign law to our own laws, otherwise known as processual presumption, applies.
Here, US law may have been properly pleaded but it was not proved in the labor tribunals.

2. No. Basso was illegally dismissed.

The dismissal of Basso was not founded on clearly established facts and evidence sufficient to warrant
dismissal from employment. While proof beyond reasonable doubt is not required to establish loss of
trust and confidence, substantial evidence is required and on the employer rests the burden to establish
it. There must be some basis for the loss of trust, or that the employer has reasonable ground to believe
that the employee is responsible for misconduct, which renders him unworthy of the trust and
confidence demanded by his position. The SC found that CMI failed to discharge its burden to prove the
above acts. CMI merely submitted affidavits of its officers, without any other corroborating evidence (1)
Basso delegated too much responsibility to the General Sales Agent and relied heavily on its judgments.
(2) Basso excessively issued promotional tickets to his friends who had no direct business with CMI. (3)
The advertising agency that CMI contracted had to deal directly with Guam because Basso was hardly
available.72 Mr. Schulz discovered that Basso exceeded the advertising budget by $76,000.00 in 1994
and by $20,000.00 in 1995 (4) Basso spent more time and attention to his personal businesses and was
reputed to own nightclubs in the Philippines.74 (5) Basso used free tickets and advertising money to
promote his personal business, such as a brochure that jointly advertised one of Basso's nightclubs with
CMI.

Moreover, CMI violated procedural due process in terminating Basso.

Sunripe Coconut Products v. CIR, 83 Phil. 518

DOCTRINE:

FACTS:

The instant case concerns an appeal from a decision of the Court of Industrial Relations. The latter ruled
that the “parers” and “shellers” of petitioner are its laborers entitled to12 day-sick leave (1 day for
each month of service),notwithstanding the fact that they are piece-workersunder the"pakiao"
system.2.CIR held that when a worker possesses someattributes of an employee and others of an
independent contractor,which make him fall within an intermediate area, he may beclassified
under the category of an employee when the economic facts of the relation make it more nearly
one of employment thanone of independent business enterprise with respect to the endssought to be
accomplished.3.Petitioner contends the following:a)That the economic factscharacteristic ofthe
independent contractor far outweighs theeconomic facts indicative of an employee.b)That the CIR
departed from the definition of the word "employee" or"laborer" found in the Workmen's
Compensation Law.c)That the principal test in determining whether a workeris an employee or an
independent contractor is the employer's rightof control over the work, and not merely the right to
control theresult, it being intimated that the "parers" and "shellers" arecontrolled by the petitioner only
to the extent "that the nuts are paredwhole or that there is not much meat wasted."d)That the “parers”
and “shellers” are piece-workers under the “pakiao” system.

ISSUE:

Whether the “parers” and “shellers” are independent contractors and do not fall within the category of
employees or laborers.

RULING:

As to the first contention, SC upheld the CIR ruling that the “parers” and “shellers” work under some
degree of control or supervision of the company, if not under its absolute direction; that said
"parers” and "shellers" form stable groups composed of matured men and women who regularly work
at shelling and paring nuts; that for the most part they depend on their work in Sunripe for their
livelihood; that they are admittedly working in the factory of said company, alongside persons who are
indisputably employed by said company.As to the second contention, SC upheld CIR. The Workmen’s
Compensation Law defines a laborer or employee as a person who has entered the employment of, or
works under a service or apprenticeship contract for, an employer.On the other hand, CIR defined it as
an employee is any person inthe service of another under a contract for hire, express or implied, oral or
written. In essence, CIR ruling does not run counter tothe legal definition.As to the third contention,
SC held that the requirement imposed on the "parers" and "shellers" to the effect that "the nuts are
pared whole or that there is not much meat wasted," in effect limits or controls the means or details by
which said workers are to accomplish their services. It is inconceivable that the "parers" and
"shellers," in orderto meet the requirement of the petitioner, would not follow a uniform
standard in the performance of their work.As to the fourth and last contention, SC made reference
to C.A. 103, the organic law of the CIR. It provides that a minimum wage or share shall be
determined and fixed for laborers working by the hours,day or month, or by piece-work,and for tenants
sharing in the crop or paid by measurement unit. Thus, the organic law of the CIR even orders that
laborers may be paid by piece-work; and the fact that the "parers" and "shellers" are paid a fixed
amount for a fixed number of nuts pared or shelled, does not certainly take them out of the purview of
CA 103.On a final note, SC made a general remark that in cases of this kind, wherein laborers are usually
compelled to work under conditions and terms dictated by the employer, a reasonably wide latitude
ofaction and judgment should be given to theCIR with a view to settling industrial disputes
conformably to the intents and purposes of its organic law.To decide this case otherwise would set a
precedent that may tend to encourage other employers to adopt this strategy or scheme to deprive
their laborers of benefits under the law (SC pointed out na by saying this last sentence, hindi nila
ini-imply na si petitioner ay knowingly pinipilit na yung mga parers and shellers ay independent
contractors just to deprive them of their benefits).

G.R. NO. 162401; January 31, 2006

CORAZON ALMIREZ, Petitioner,

vs.

INFINITE LOOP TECHNOLOGY CORPORATION, EDWIN R. RABINO and COURT OF APPEALS, Respondents.

CARPIO MORALES, J.:

DOCTRINE:

FACTS:

Under the control test, an employer-employee relationship exists where the person for whom
the services are performed reserves the right to control not only the end achieved, but also the manner
and means to be used in reaching that end.

Petitioner Corazon Almirez was hired by respondent Infinite Loop Technology Corporation
(Infinite Loop) to be a Refinery Senior Process Design Engineer for a specific project starting October
18, 1999 with a guaranty of 12 continuous months of service or until a mutually agreed date.

However, Almirez was later on suspended. Hence, she filed an action before the National
Labor Relations Commission (NLRC) against Infinite Loop and its General Manager/President/co-
petitioner Edwin R. Rabino on the ground of breach of contract of employment.
Both the Labor Arbiter and the NLRC ruled that there is an existing employer- employee relationship
between Almirez and Infinite Loop since the latter exercises control over the means and methods used
by Almirez in the performance of her duties.

The Court of Appeals ruled that there was no existing employer-employee relationship
between the parties since Almirez was hired to render her professional service only for a
specific project.

ISSUE:

Whether or not there is employee-employer relationship between Almirez and Infinite Loop.

RULING:

To ascertain the existence of an employer-employee relationship, jurisprudence has invariably

applied the four-fold test, to wit: (1) the manner of selection and engagement; (2) the payment of
wages; (3) the presence or absence of the power of dismissal; and (4) the presence or absence of the
power of control. Of these four, the last one, the so called "control test" is commonly regarded as the
most crucial and determinative indicator of the presence or absence of an employer- employee
relationship.

Under the control test, an employer-employee relationship exists where the person for whom the
services are performed reserves the right to control not only the end achieved, but also the manner and
means to be used in reaching that end. From the earlier-quoted scope of Almirez’ professional
services, there is no showing of a power of control over petitioner. The services to be performed by
her specified what she needed to achieve but not on how she was to go about it. Contrary to the finding
of the Labor Arbiter, as affirmed by the NLRC, paragraph No. 6 of the "Scope of [Almirez’] Professional
Services" requiring her to "[m]ake reports and recommendations to the company management team
regarding work progress, revisions and improvement of process design on a regular basis as
required by company management team" does not "show that the company’s management
team exercises control over the means and methods in the performance of her duties as
Refinery Process Design Engineer." Having hired Almirez’ professional services on account of her
"expertise and qualifications" as Almirez herself proffers in her Position Paper, the company naturally
expected to be updated regularly of her "work progress," if any, on the project for which she was
specifically hired.

The deduction from Almirez’ remuneration of amounts representing SSS premiums, Philhealth
contributions and withholding tax, was made in the only pay slip issued to Almirez, that for the
period of January 16-31, 2000, the other amounts of remuneration having been documented by
cash vouchers. Such pay slip cannot prove the existence of an employer-employee relationship between
the parties.
As for the designation of the payments to Almirez as "salaries," it is not determinative of
the existence of an employer-employee relationship. "Salary" is a general term defined as "a
remuneration for services given." It is the above-quoted contract of engagement of services-letter
dated September 30, 1999, together with its attachments, which is the law between the parties.
Even Almirez concedes rendering service "based on the contract," which, as reflected earlier, is bereft of
a showing of power of control, the most crucial and determinative indicator of the presence of an
employer-employee relationship.

Sonza v. ABS-CBN Broadcasting, 431 SCRA 583

DOCTRINE:

FACTS: Respondent ABS-CBN Broadcasting Corporation (“ABS-CBN”) signed an Agreement with the Mel
and Jay Management and Development Corporation (“MJMDC”). ABS-CBN was represented by its
corporate officers while MJMDC was represented by SONZA. Referred to in the Agreement as “AGENT,”
MJMDC agreed to provide SONZA’s services exclusively to ABS-CBN as talent for radio and television.

Later on, SONZA wrote a letter to ABS-CBN’s President, about the recent event concerning his program
and career, and that the said violation of the company has breached the agreement, thus, the notice of
rescission of the Agreement was sent.

SONZA filed a complaint against ABS-CBN before the Department of Labor and Employment, National
Capital Region in Quezon City complaining that ABS-CBN did not pay his salaries, separation pay, service
incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the
Employees Stock Option Plan (“ESOP”).

In reply, ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship
existed between the parties. SONZA filed an Opposition to the motion.

ISSUE: Whether or not Sonza was an employee or independent contractor.

RULING: Applying the control test to the present case, the court find that SONZA is not an employee but
an independent contractor. First, SONZA contends that ABS-CBN exercised control over the means and
methods of his work. SONZA protests the Labor Arbiter’s finding that he is a talent of MJMDC, which
contracted out his services to ABS-CBN. The Labor Arbiter ruled that as a talent of MJMDC, SONZA is not
an employee of ABS-CBN. SONZA insists that MJMDC is a “labor-only” contractor and ABS-CBN is his
employer. In a labor-only contract, there are three parties involved: (1) the “labor-only” contractor; (2)
the employee who is ostensibly under the employ of the “labor-only” contractor; and (3) the principal
who is deemed the real employer. Under this scheme, the “labor-only” contractor is the agent of the
principal. The law makes the principal responsible to the employees of the “labor-only contractor” as if
the principal itself directly hired or employed the employees. These circumstances are not present in
this case.

Manila Golf & Country Club v. IAC, 237 SCRA 207

DOCTRINE:

FACTS:

The question before the Court here is whether or not persons rendering caddying services for members
of golf clubs and their guests in said clubs' courses or premises are the employees of such clubs and
therefore within the compulsory coverage of the Social Security System (SSS).

That question appears to have been involved, either directly or peripherally, in three separate
proceedings, all initiated by or on behalf of herein private respondent and his fellow caddies. That which
gave rise to the present petition for review was originally filed with the Social Security Commission (SSC)
via petition of seventeen (17) persons who styled themselves "Caddies of Manila Golf and Country Club-
PTCCEA" for coverage and availment of benefits under the Social Security Act as amended, "PTCCEA"
being the acronym of a labor organization, the "Philippine Technical, Clerical, Commercial Employees
Association," with which the petitioners claimed to be affiliated.

In the case before the SSC, the respondent Club filed answer praying for the dismissal of the petition,
alleging in substance that the petitioners, caddies by occupation, were allowed into the Club premises to
render services as such to the individual members and guests playing the Club's golf course and who
themselves paid for such services; that as such caddies, the petitioners were not subject to the direction
and control of the Club as regards the manner in which they performed their work; and hence, they
were not the Club's employees.

Subsequently, all but two of the seventeen petitioners of their own accord withdrew their claim for
social security coverage, avowedly coming to realize that indeed there was no employment relationship
between them and the Club. The case continued, and was eventually adjudicated by the SSC after
protracted proceedings only as regards the two holdouts, Fermin Llamar and Raymundo Jomok.

ISSUE:

Whether or not the private respondents are employees of the petitioner club.

RULING:
No. The Court does not agree that said facts necessarily or logically point to such a relationship, and to
the exclusion of any form of arrangements, other than of employment, that would make the
respondent's services available to the members and guest of the petitioner.

As long as it is, the list made in the appealed decision detailing the various matters of conduct, dress,
language, etc. covered by the petitioner's regulations, does not, in the mind of the Court, so
circumscribe the actions or judgment of the caddies concerned as to leave them little or no freedom of
choice whatsoever in the manner of carrying out their services. In the very nature of things, caddies
must submit to some supervision of their conduct while enjoying the privilege of pursuing their
occupation within the premises and grounds of whatever club they do their work in. For all that is made
to appear, they work for the club to which they attach themselves on sufference but, on the other hand,
also without having to observe any working hours, free to leave anytime they please, to stay away for as
long they like. It is not pretended that if found remiss in the observance of said rules, any discipline may
be meted them beyond barring them from the premises which, it may be supposed, the Club may do in
any case even absent any breach of the rules, and without violating any right to work on their part. All
these considerations clash frontally with the concept of employment.

The IAC would point to the fact that the Club suggests the rate of fees payable by the players to the
caddies as still another indication of the latter's status as employees. It seems to the Court, however,
that the intendment of such fact is to the contrary, showing that the Club has not the measure of
control over the incidents of the caddies' work and compensation that an employer would possess.

The Court agrees with petitioner that the group rotation system so-called, is less a measure of employer
control than an assurance that the work is fairly distributed, a caddy who is absent when his turn
number is called simply losing his turn to serve and being assigned instead the last number for the day.

Eastern Shipping Lines v. POEA, 166 SCRA 523

G.R. No. 76633; October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,

vs.

PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND

EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:
DOCTRINE:

FACTS:

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

ISSUE:

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

RULING:

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

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

The reasons given above for the delegation of legislative powers in general are particularly applicable to
administrative bodies. With the proliferation of specialized activities and their attendant peculiar
problems, the national legislature has found it more and more necessary to entrust to administrative
agencies the authority to issue rules to carry out the general provisions of the statute. This is called the
“power of subordinate legislation.”
With this power, administrative bodies may implement the broad policies laid down in a statute by
“filling in’ the details which the Congress may not have the opportunity or competence to provide. This
is effected by their promulgation of what are known as supplementary regulations, such as the
implementing rules issued by the Department of Labor on the new Labor Code. These regulations have
the force and effect of law.

There are two accepted tests to determine whether or not there is a valid delegation of legislative
power:

1. Completeness test – the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate the only thing he will have to do is enforce it.

2. Sufficient standard test – there must be adequate guidelines or stations in the law to map out the
boundaries of the delegate’s authority and prevent the delegation from running riot.

Both tests are intended to prevent a total transference of legislative authority to the delegate, who is
not allowed to step into the shoes of the legislature and exercise a power essentially legislative.

G.R. No. 174585; October 19, 2007

FEDERICO M. LEDESMA, JR., Petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION (NLRC-SECOND DIVISION) HONS. RAUL T. AQUINO,

VICTORIANO R. CALAYCAY and ANGELITA A. GACUTAN ARE THE COMMISSIONERS, PHILIPPINE NAUTICAL
TRAINING INC., ATTY. HERNANI FABIA, RICKY TY, PABLO MANOLO, C. DE LEON and TREENA CUEVA,
Respondents.

CHICO-NAZARIO, J.:

DOCTRINE:

Before the burden of proof shifts to the employer to prove the validity of the employee's dismissal, the
employee must first sufficiently establish that he was indeed dismissed from employment.

FACTS:
Petitioner was employed as a bus/service driver by the private respondent on a probationary basis. As
such, he was required to report at a private respondent’s training site in Dasmariñas, Cavite, under the
direct supervision of its site administrator, Pablo Manolo de Leon.

Petitioner filed a complaint against de Leon for allegedly abusing his authority as site administrator by
using the private respondent’s vehicles and other facilities for personal ends. In the same complaint,
petitioner also accused de Leon of immoral conduct allegedly carried out within the private
respondent’s premises. In turn, De Leon filed a written report against the petitioner citing his suspected
drug use. In view of de Leon’s report, the private respondent’s Human Resource Manager served a copy
of a Notice to petitioner requiring him to explain within 24 hours why no disciplinary action should be
imposed on him for allegedly violating the private respondent’s Code of Conduct. Petitioner then filed a
complaint for illegal dismissal against the private respondent before the Labor Arbiter.

The Labor Arbiter rendered a decision in favor of the petitioner declaring illegal his separation from
employment, which the NLRC reversed. On appeal, the Court of Appeals affirmed the NLRC decision
giving more credence to the private respondent’s stance that the petitioner was not dismissed from
employment.

ISSUE:

Whether or not the petitioner was illegally dismissed from employment.

RULING:

NO. In cases of illegal dismissal, the employer bears the burden of proof to prove that the termination
was for a valid or authorized cause in the case at bar, however, the facts and the evidence did not
establish a prima facie case that the petitioner was dismissed from employment.Before the private
respondent must bear the burden of proving that the dismissal was legal, petitioner must first establish
by substantial evidence the fact of his dismissal from service. Logically, if there is no dismissal, then
there can be no question as to the legality or illegality thereof.

The law in protecting the rights of the employees, authorizes neither oppression nor self-destruction of
the employer. It should be made clear that when the law tilts the scales of justice in favor of labor, it is in
recognition of the inherent economic inequality between labor and management. The intent is to
balance the scales of justice; to put the two parties on relatively equal positions. There may be cases
where the circumstances warrant favoring labor over the interests of management but never should the
scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est -- justice is to be
denied to none.

Thus, the petition was denied.

Luz v. Enopia, et. al., G.R No. 197899, March 6, 2017

DOCTRINE:

In determining the existence of an employer-employee relationship, the Four-Fold Test is used. It should
be remembered that the control test merely calls for the existence of the right to control, and not
necessarily the exercise thereof. It is not essential that the employer actually supervises the
performance of duties by the employee. It is enough that the former has aright to wield the power.

FACTS:

Respondents were hired as crew members of the fishing mother boat owned by petitioner Joaquin Lu,
who is the sole proprietor of Mommy Gina Tuna Resources based in General Santos City. Respondents
and Lu had an income-sharing arrangement wherein 55% goes to Lu, 45% to the crew members, with an
additional 4% as "backing incentive” and equal share of expenses for the maintenance and repair of the
mother boat, and for the purchase of nets, ropes and payaos.

Lu proposed the signing of a Joint Venture Fishing Agreement between them, but petitioners refused to
sign the same as they opposed the one-year term provided in the agreement. According to petitioners,
Lu terminated their services right there and then because of their refusal to sign the agreement. On the
other hand, Lu alleged that the master fisherman (piado) Ruben Salili informed him that petitioners still
refused to sign the agreement and have decided to return the vessel.

Petitioners then filed their complaint for illegal dismissal, monetary claims and damages, alleging that
their refusal to sign the Joint Venture Fishing Agreement is not a just cause for their termination.

On the other hand, Lu denied having dismissed petitioners, claiming that their relationship was one of
joint venture where he provided the vessel and other fishing paraphernalia, while petitioners, as
industrial partners, provided labor by fishing in the high seas. Lu alleged that there was no employer-
employee relationship as its elements were not present.

The LA dismissed the case for lack of merit, which was affirmed by the NLRC. On appeal, the CA reversed
the NLRC decision.

ISSUE:

Whether or not an employer-employee relationship existed between petitioner and respondents.

RULING:
Yes.The doctrine that the existence of an employer-employee relationship is ultimately a question of
fact. In dealing with factual issues in labor cases, substantial evidence or that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion is sufficient.

In determining the existence of an employer-employee relationship, the following elements are

considered: (1) the selection and engagement of the workers; (2) the power to control the worker's
conduct; (3) the payment of wages by whatever means; and (4) the power of dismissal. These elements
were all present in this case.

It is settled that no particular form of evidence is required to prove the existence of an employer-
employee relationship. Any competent and relevant evidence to prove the relationship may be
admitted.

In this case, it was shown by the respondent’s evidence that the employer stated in their Social Security
System (SSS) online inquiry system printouts was MGTR, which is owned by the petitioner. Printouts of
their individual sss contribution sheet that the date of the SSS remitted contributions coincided with the
date of respondents' employment with petitioner. Petitioner failed to rebut such evidence. Thus, the
fact that the petitioner had registered the respondents with SSS is proof that they were indeed his
employees. The coverage of the Social Security Law is predicated on the existence of an employer-
employee relationship. Moreover, the records show that these fishermen obtain vale or cash advance
from petitioner and not from the piado who allegedly hired and had control over them.

It should be remembered that the control test merely calls for the existence of the right to control, and
not necessarily the exercise thereof. It is not essential that the employer actually supervises the
performance of duties by the employee. It is enough that the former has a right to wield the power.

Expedition Construction Corp. et. al., v. Africa, G.R No. 228671, December 14, 2017

DOCTRINE: Jurisprudence has adhered to the four-fold test in determining the existence of an
employer-employee relationship, to wit: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or
the so- called ‘control test.

FACTS:
Petitioner Expedition is a domestic corporation engaged in garbage collection/hauling. It engaged the
services of respondents as garbage truck drivers to collect garbage from different cities and transport
the same to the designated dumping site.

Respondents alleged that they were illegally terminated from employment when they were prevented
from entering the premises of Expedition without cause or due process.

Expedition countered that respondents were not illegally dismissed. It averred that it entered into
separate contracts with the cities of Quezon, Mandaluyong, Caloocan, and Muntinlupa for the collection
and transport of their garbage to the dump site; that it engaged the services of respondents, as dump
truck drivers, who were oftentimes dispatched in Quezon City and Caloocan City; that the need for
respondents’ services significantly decreased sometime in 2013 after its contracts with Quezon City and
Caloocan City were not renewed; and, that it nonetheless tried to accommodate respondents by giving
them intermittent trips whenever the need arose.

Respondents insisted that they worked under Expedition’s control and supervision considering that: (1)
Expedition owned the dump trucks; (2) Expedition expressly instructed that the trucks should be used
exclusively to collect garbage in their assigned areas and transport the garbage to the dump site; (3)
Expedition directed them to park the dump trucks in the garage located at Group 5 Area Payatas,
Quezon City after completion of each delivery; and (4) Expedition determined how, where, and when
they would perform their tasks.

LA dismissed the complaints, ruling that there was no employer-employee relationship and there was no
illegal dismissal. NLRC ruled in favor of the respondents, ruling that they are employees of Exploration
and were illegally dismissed. affirmed LA ruling. Later on, however, NLRC partly granted respondents’
MR. It ruled that respondents were employees of Expedition in view of Expedition’s admission that it
hired and paid respondents for their services. The NLRC was also persuaded that Expedition exercised
control on when and how respondents would collect garbage. Upon appeal to the CA, Expedition’s
petition was dismissed.

ISSUES:

1) Whether respondents are regular employees of petitioners.

2) Whether respondents were illegally dismissed from service.

RULING:
1) YES. Jurisprudence has adhered to the four-fold test in determining the existence of an employer-
employee relationship, to wit: (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so- called
‘control test.’ All elements are present here.

First, as clearly admitted, respondents were engaged by Expedition as garbage truck drivers. Second, it is
undeniable that respondents received compensation from Expedition for the services that they
rendered to the latter. The fact that respondents were paid on a per trip basis is irrelevant in
determining the existence of an employer-employee relationship because this was merely the method
of computing the proper compensation due to respondents. Third, Expedition’s power to dismiss was
apparent when work was withheld from respondents as a result of the termination of the contracts with
Quezon City and Caloocan City. Finally, Expedition has the power of control over respondents in the
performance of their work. It was held that “the power of control refers merely to the existence of the
power and not to the actual exercise thereof.

As aptly observed by the CA, the agreements for the collection of garbage were between Expedition and
the various LGUs, and respondents needed the instruction and supervision of Expedition to effectively
perform their work in accordance with the stipulations of the agreements.

Moreover, the trucks driven by respondents were owned by Expedition. There was an express
instruction that these trucks were to be exclusively used to collect and transport garbage. Respondents
were mandated to return the trucks to the premises of Expedition after the collection of garbage.
Expedition determined the clients to be served, the location where the garbage is to be collected and
when it is to be collected. Indeed, Expedition determined how, where, and when respondents would
perform their tasks.

Respondents should be accorded the presumption of regular employment pursuant to Article 280 of the
Labor Code which provides that “employees who have rendered at least one year of service, whether
such service is continuous or broken x x x shall be considered [as] regular employees with respect to the
activity in which they are employed and their employment shall continue while such activity exists.
Having gained regular status, respondents were entitled to security of tenure and could only be
dismissed for just or authorized cause after they had been accorded due process.

2) NO. In this case, there was no positive or direct evidence to substantiate respondents’ claim that
they were dismissed from employment. Aside from mere assertions, the record is bereft of any
indication that respondents were barred from Expedition’s premises. If at all, the evidence on record
showed that Expedition intended to give respondents new assignments as a result of the termination of
the garbage hauling contracts with Quezon City and Caloocan City where respondents were regularly
dispatched. Despite the loss of some clients, Expedition tried to accommodate respondents and offered
to engage them in other garbage hauling projects with other LGUs, a fact which respondents did not
refute. However, instead of returning and waiting for their next assignments, respondents instituted an
illegal dismissal case against Expedition.

Note that even during the mandatory conciliation and mediation conference between the parties,
Expedition manifested its willingness to accept respondents back to work. Unfortunately, it was
respondents who no longer wanted to return to work.

As a measure of social justice, the award of separation pay/financial assistance has been upheld in some
cases even if there is no finding of illegal dismissal. Here, Expedition expressed willingness to extend
gratuitous assistance to respondents and to pay them the amounts equivalent to the separation pay
awarded to each respondent in the NLRC’s Resolution. In view of this and taking into account
respondents’ long years of service ranging from four to 15 years, the Court finds that the grant of
separation pay at the rate of ½ month’s salary for every year of service, as adjudged in the NLRC
Resolution, is proper.

De la Salle Araneta University vs Bernardo, GR No. 190809, February 13, 2017

G.R. No. 190809; February 13, 2017

DE LA SALLE ARANETA UNIVERSITY, Petitioner

vs.

JUANITO c. BERNARDO, Respondent.

LEONARDO-DE CASTRO, J.:

DOCTRINE:

It is undisputed that in administrative law, contemporaneous and practical interpretation of law by

administrative officials charged with its administration and enforcement carries great weight and should
be respected, unless contrary to law or manifestly erroneous.

The Implementing Rules and Secretary Quisumbing's Labor Advisory that Republic Act No. 7641 applies
to even part-time employees are consistent with Article 4 of the Labor Code, which expressly mandates
that "all doubts in the implementation and interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of labor." The Court held the legality and
validity of the Implementing Rules and Secretary Quisumbing's Labor Advisory, and likewise applied the
same to Bernardo's case.
FACTS:

The case was about the denial of the retirement benefits of an employee by its employer. Bernardo was
a part-time lecturer for DLSU. He has been an employee of DLSU from 1974 up to 2003. In the year
2003, Bernardo received a letter from DLSU that his services were no longer required. Bernardo being a
75 years old teacher, did not protest the decision of DLSU not to rehire him. Bernardo, later, then asked
his employer for his retirement benefits, which the latter then refused to pay and allege that Bernardo is
only a part time employee and is not allowed to avail the retirement benefits agreed by the labor union,
and that; he’s action has already prescribe, stating that he should have filed for his claim 3 years after he
turned 65 years old. Aggrieved, Bernardo filed a claim against DLSU.

ISSUE:

Whether or not part-time employees are entitled to retirement benefits. (YES)

RULING:

R.A. No 7641 is a curative social legislation. It precisely intends to give minimum retirement benefits to
employees not entitled to the same under Collective Bargaining and other agreements. It also applies to
establishments with existing collective bargaining or other agreements or voluntary retirement plans
whose benefits are less than those prescribed in said law.

Qualified workers shall be entitled to the retirement benefit under RA 7641 in the absence of any
individual or collective agreement, company policy or practice. Republic Act No. 7641 states that "any
employee may be retired upon reaching the retirement age;" and "in case of retirement, the employee
shall be entitled to receive such retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements." The Implementing Rules provide that Republic
Act No. 7641 applies to "all employees in the private sector, regardless of their position, designation or
status and irrespective of the method by which their wages are paid, except to those specifically
exempted." And Secretary Quisumbing's Labor Advisory further clarifies that the employees covered by
Republic Act No. 7641 shall "include part-time employees, employees of service and other job
contractors and domestic helpers or persons in the personal service of another."

Based on Republic Act No. 7641, its Implementing Rules, and Secretary Quisumbing's Labor Advisory,
Bernardo, as a part-time employee of DLS-AU, is entitled to retirement benefits. The general coverage of
Republic Act No. 7641 is broad enough to encompass all private sector employees, and part-time
employees are not among those specifically exempted from the law. The provisions of Republic Act No.
7641 and its Implementing Rules are plain, direct, unambiguous, and need no further elucidation. Any
doubt is dispelled by the unequivocal statement in Secretary Quisumbing's Labor Advisory that Republic
Act No. 7641 applies to even part-time employees.
Under the rule of statutory construction of expressio unius est exclusio alterius, Bernardo's claim for
retirement benefits cannot be denied on the ground that he was a part-time employee as part-time
employees are not among those specifically exempted under Republic Act No. 7641 or its Implementing
Rules. Said rule of statutory construction is explained thus, it is a settled rule of statutory construction
that the express mention of one person, thing, or consequence implies the exclusion of all others.

Moreover, as a matter of contemporaneous interpretation of law, Secretary Quisumbing's Labor

Advisory has persuasive effect. It is undisputed that in administrative law, contemporaneous and
practical interpretation of law by administrative officials charged with its administration and
enforcement carries great weight and should be respected, unless contrary to law or manifestly
erroneous.

Lastly, the Implementing Rules and Secretary Quisumbing's Labor Advisory are consistent with Article 4
of the Labor Code, which expressly mandates that "all doubts in the implementation and interpretation
of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor
of labor." The Court held the legality and validity of the Implementing Rules and Secretary Quisumbing's
Labor Advisory, and likewise applied the same to Bernardo's case.

Marsman & Company, Inc. vs Rodil STa. Rita, G.R. No. 194765, April 23, 2018

G.R. No. 194765; April 23, 2018

MARSMAN & COMPANY, INC., Petitioner,

vs.

RODIL C. STA. RITA, Respondent.

LEONARDO-DE CASTRO, J.:

DOCTRINE:

FACTS:

Marsman is engaged in the business of distribution/sale of pharmaceutical and consumer products.

Marsman purchased Metro Drug Distribution, which is now named Consumer Products Distribution
Services Inc. (CPDSI). The transition from Marsman to CPDSI brought confusion as to who the employer
of Rodil at the time of his dismissal.

Marsman hired Rodil (under a contract) as a warehouse helper in 1993. After his contract expired in
1994, Marsman rehired him on a probationary status, and he eventually became a regular employee.
Rodil joined Marsman Employees Union. In 1995, Marsman purchased Metro Drug Distribution, which is
engaged in the same business. This led to the integration of their employees as formalized in a
Memorandum of Agreement (MOA) dated June 1996. Marsman became the holding company while
Metro Drug became the operating company. In 1997, Metro Drug changed its corporate name to CPDSI.
CPDSI entered into a contract with EAC wherein the former would provide warehousemen to the latter
in its Libis Warehouse. Marsman appointed Rodil as one of the warehousemen for EAC-Libis Warehouse
stating that the transfer is part of its cross-training Program. EAC’s use of the Libis Warehouse is
dependent on its lease contract with Valiant Distribution (Valiant). When Valiant terminated EAC’s lease
contract, CPDSI likewise terminated the employees assigned at EAC-Libis Warehouse, including Rodil on
the ground of redundancy.

Rodil filed an illegal dismissal complaint against Marsman. The Labor Arbiter found Marsman guilty of
illegally dismissal. On appeal, Marsman argued that the Labor Arbiter has no jurisdiction over the
complaint alleging that there is no employer-employee relationship (E-ER) between it and Rodil. The
NLRC ruled that there is no E-ER between Marsman and Rodil. In a petition for certiorari, the Court of
Appeals reversed the NLRC Decision.

ISSUE:

Whether or not an employer-employee relationship existed between Marsman and Rodil at the time of
his dismissal

RULING:

No, Rodil was not able to prove that there is an E-ER between him and Marsman.

In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an
employee was for a valid cause. However, before a case for illegal dismissal can prosper, an E-ER must
first be established. It is incumbent upon Rodil as the complainant to prove the E-ER by substantial
evidence, which he failed to do.

This is a case of a corporate spin-off, which brought about the integration and transfer of employees
from Marsman to CPDSI. Under the MOA, Marsman’s function was limited to a holding company and
made CPDSI as the main operating company. A corporate spin-off occurs when a department, division or
portions of the corporate business enterprise is sold-off or assigned to a new corporation that will arise
by the process which may constitute it into a subsidiary of the original corporation.

The spin-off and the attendant transfer of employees are legitimate business interests of Marsman. The
transfer of employees through the MOA was proper and did not violate any existing law or
jurisprudence. The Court has upheld the transfer/absorption of employees from one company to
another, as successor employer, as long as the transferor was not in bad faith and the employees
absorbed by a successor-employer enjoy the continuity of their employment status and rights and
privileges with their former employer.

To assert that Marsman remained as Rodil’s employer even after the corporate spin-off disregards the
separate personality of Marsman and CPDSI. A corporation has a personality that is separate and distinct
from that composing it as well as from any other legal entity to which it may be related.

Rodil failed to support his claim that Marsman and CPDSI were managed and operated by the same
persons or that Marsman had complete control over CPDSI’s operations. The existence of interlocking
directors, corporate officers and shareholders, without more, is not enough to pierce the veil of
corporate fiction. No bad faith can be imputed to Marsman since the MOA guaranteed the tenure of
employees, honored the CBA signed in 1995 and maintain the salaries and benefits of the affected
employees.

Rodil also failed to satisfy the four-fold test which determines the existence of E-ER, the elements of
which are: 1) selection and engagement of employees; 2) payment of wages; 3) power of dismissal; and
4) power to control the employee’s conduct.

There is nothing in the MOA which negate CPDSI’s power to select its employees and when to engage
them. Rodil also failed to submit pay slips, salary vouchers, payrolls, certificate of withholding tax on
compensation income, SSS records (not just ID) or testimonies from witnesses to prove the element of
payment of wages. As to the power of dismissal, it was evident in the notice of termination that CPDSI,
and not Marsman terminated Rodil’s services by reason of redundancy. The power of control over his
employment at the time of his dismissal was also not proven.

Thus, there being no E-ER between Marsman and Rodil, the latter’s complaint must be dismissed for lack
of jurisdiction on the part of the Labor Arbiter.

MONSANTO PHILIPPINES, Inc. v NATIONAL LABOR RELATIONS COMMISSION, MARTIN B. GENEROSO, JR.
et al. G.R. No. 230609-10, August 27, 2020

DOCTRINE: Moreover, an employee's prayer for separation pay is an indication of the strained relations
between the parties. Under the doctrine of strained relations, the payment of separation pay is
considered an acceptable alternative to reinstatement when the latter option is no longer desirable or
viable.

FACTS: Monsanto is a domestic corporation engaged in agricultural business, East Star is a domestic
corporation engaged in providing services with agricultural production, processing, packaging,
warehousing, and distribution. It is an accredited job contractor with the Department of Labor and
Employment (DOLE).

Private respondents were agricultural crop technicians of East Star and were tasked to promote
Monsanto's products. Later on, private respondents were told that their position and function were
redundant. East Star formally terminated their employment, prompting private respondents to file a
complaint against Monsanto, East Star, and its corporate officers, for illegal dismissal with claim for
backwages, separation pay, incentives/commission, and tax refund.

The LA issued a Decision in private respondents' favor ruling out that East Star acted as a labor-only
contractor, because there is no showing that it hired private respondents and that it has no control over
their work. The NLRC rendered a Decision dismissing the appeal for lack of merit and affirming the LA's
Decision. The CA rendered a consolidated Decision partially granting both petitions. CA ruled that the
NLRC erred in affirming the LA's Decision that private respondents were Monsanto's employees. The
records reveal that private respondents did not present any evidence, such as an employment contract
showing that Monsanto employed them prior to the date when the service agreement was signed.

ISSUE: Whether or not the CA erred in ruling that private respondents were illegally dismissed for lack of
just or authorized cause.

RULING: The private respondents are entitled to backwages, separation pay, damages, and attorney's
fees under the law. Law and jurisprudence laid down the monetary awards that an illegally dismissed
employee is entitled to. First, the renumbered Article 294[42] of the Labor Code, formerly Article 279,
states that an illegally dismissed employee is entitled to backwages from the time compensation was
withheld.

Second, separation pay is warranted when the cause for termination is not attributable to the
employee's fault, such as those provided in Articles 298 to 299 of the renumbered Labor Code, as well as
in cases of illegal dismissal where reinstatement is no longer feasible.

While the general rule is that an illegally dismissed employee is entitled to reinstatement, and
separation pay is awarded only in exceptional circumstances, the court find that the exception applies in
this case. Reinstatement is not likely to be feasible as 13 years had passed since their dismissal from the
service on May 16, 2007. It is unlikely that the positions they once held were still available for them to
occupy again.

Moreover, an employee's prayer for separation pay is an indication of the strained relations between
the parties. Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or viable.

Here, private respondents prayed for separation pay and not reinstatement, which signifies that they do
not wish to work again with their employer due to strained relations. In fact, the NLRC considered the
approved compromise agreement between East Star and the private respondents before the DOLE
Regional Office. Monsanto presented a receipt that private respondents received their separation pay.
Consequently, the NLRC ruled that whatever amount they previously received should be deducted from
the separation pay ordered herein. We sustain the NLRC's ruling considering the Court's finding that East
Star is a labor-only contractor. Here, East Star and Monsanto are solidarity liable to pay all the private
respondents' money claims.
The compromise agreement is proof that the private respondents had cut their ties with their employer.
Otherwise, they would have prayed and fought for reinstatement.

ARNULFO M. FERNANDEZ v. KALOOKAN SLAUGHTERHOUSE INCORPORATED/ERNESTO CUNANAN, G.R.

No. 225075, June 19, 2019

DOCTRINE:

FACTS:According to petitioner Arnulfo Fernandez, he was hired in 1994 as a butcher by Kalookan

Slaughterhouse, a single proprietorship owned by respondent Emesto Cunanan. He claimed that he
worked from Monday to Sunday, from 6:30P.M. to 7:30A.M., with a daily wage of P700.00, which was
later reduced to P500.00. He further claimed that he met an accident while driving Kalookan
Slaughterhouse’s truck in December 2013 and deductions were made from his wages. He questioned
these deductions in July 2014, and thereafter he was treated unreasonably. Petitioner further claimed
that on July 21, 2014, he suffered from a headache and did not report for work. The next day, however,
he was shocked when he only received P200.00 due to his previous under time and was informed that
he could no longer report for work due to his old age.

Kalookan Slaughterhouse, on the other hand, asserted that petitioner is an independent butcher
working under its Operation Supervisor. He received payment based on the number of hogs he
butchered and was only required to be in the slaughterhouse when customers brought hogs to be
slaughtered. Kalookan Slaughterhouse alleged that it imposed policies on the entry to the premises,
which applied to employees, dealers, independent butchers, hog and meat dealers and trainees.
According to Kalookan Slaughterhouse, petitioner violated the policies and he misconstrued the
disallowance to enter the slaughterhouse as an act of dismissal.

The Labor Arbiter rendered a decision that complainant has been illegally dismissed by respondent as a
regular employee because there is an employer-employee relationship between them.

However, the NLRC ruled that petitioner was an independent contractor and not an employee of
Kalookan Slaughterhouse because there was no regular payroll showing his name and the legal
deductions made from his salary.

Likewise, the CA ruled that petitioner's claim of the existence of an employer employee relationship is
not supported by substantial evidence as he failed to submit salary vouchers, pay slips, daily work
schedule and even a certificate of withholding tax on compensation income.

ISSUE: Whether or not the petitioner was illegally dismissed?

RULING:The Court finds that the NLRC and the CA committed a grave error and agrees with the
LA.Petitioner was an employee of Kalookan Slaughterhouse.
It is settled that to determine the existence of an employer-employee relationship, four elements
generally need to be considered, namely:

(1)the selection and engagement of the employee;

(2)the payment of wages;

(3)the power of dismissal; and

(4)the power to control the employee's conduct.

These elements or indicators comprise the so-called 'four-fold' test of employment relationship."
Kalookan Slaughterhouse, through Tablit, was the one who engaged petitioner, paid for his salaries, and
in effect had the power to dismiss him. Further, Kalookan Slaughterhouse exercised control over
petitioner's conduct through De Guzman. To the mind of the Court, Kalookan Slaughterhouse was
petitioner's employer and it exercised its rights as an employer through Tablit and De Guzman, who
were its employees.

Petitioner was illegally dismissed and entitled to his money claims.

Having been illegally dismissed, the LA was correct in awarding back wages and separation pay.

German Marine Agencies, Inc. vs Teodolah Caro, G.R. No. 200774, February 13, 2019

GERMAN MARINE AGENCIES, INC., ET AL. PETITIONERS,

vs.

TEODOLAH R. CARO, IN BEHALF OF HER HUSBAND EDUARDO V. CARO, RESPONDENT.

JARDELEZA, J.:

DOCTRINE:

FACTS:

Petitioners German Marine Agencies, Inc., (German Marine) and/or Baltic Marine Mgt., Ltd. (Baltic
Marine), or Carlos Anacta [collectively referred to as German Marine, et al.] were sued by respondent
Teodolah R. Caro (Teodolah) for the death benefits and burial expenses in accordance with the 2000
Philippine Overseas Employment Administration-Standard Employment Contract6 (2000 POEA-SEC) for
the death of her husband Eduardo V. Caro (Eduardo).
German Marine is a domestic corporation which recruited Eduardo for and in behalf of its foreign
principal, Baltic Marine. Since May 1996, German Marine had continuously hired Eduardo until he
signed his last employment contract with them as Second Officer for a period of nine months.

Prior to the signing of this contract, Eduardo underwent the Pre-Employment Medical Examination and
was declared “fit to work.” Eduardo thereafter boarded the vessel “Pacific Senator”.

On January 3, 2006, Eduardo finished his contract of employment and was repatriated. On June 25,
2007, Eduardo died of “acute respiratory failure” while he was confined at the National Kidney and
Transplant Institute.

Teodolah filed a complaint with the Labor Arbiter for death benefits, medical expenses, and attorney’s
fees. Teodolah alleged that: (1) during Eduardo’s employment, he suffered dry cough and experienced
difficulty in breathing and urinating; (2) Eduardo’s illness, which he tried to address by self-medication, is
attributed to exposure to chemicals on board the vessel; (3) Eduardo felt very ill at the time of his
repatriation but he merely endured it in the hopes of getting another contract; and (4) Eduardo
consulted a physician at the Lung Center of the Philippines who diagnosed him to be suffering from
bronchial asthma induced by chemicals.

LA RULING:

The Labor Arbiter dismissed Teodolah’s complaint for lack of merit. He ruled that Eduardo’s death is not
compensable because it occurred after the expiration of his employment contract. The Labor Arbiter
further reasoned that even assuming Eduardo died during the term of the contract, it was not clearly
and sufficiently established that the cause of death was work-related or considered an occupational
disease.

NLRC RULING:

The NLRC affirmed the Labor Arbiter’s Decision. It held that Teodolah would be entitled to death
benefits only if Eduardo died during the term of his employment contract. Since Eduardo died one (1)
year, five (5) months, and twenty-three (23) days after the expiration of the contract, the employer-
employee relationship already ceased to exist prior to his death; thus, Teodolah cannot be granted
death benefits. The NLRC likewise denied the motion for reconsideration filed by Teodolah.

CA RULING:

The CA reversed the ruling of the NLRC. It held that a perusal of the record reveals that Teodolah was
able to present substantial evidence to show her entitlement to death benefits. The CA found that
Eduardo acquired bronchial asthma, an occupational disease under Section 32-A of the 2000 POEA-SEC,
within the period of his service with Baltic Marine. For the CA, there was at least a reasonable
connection between Eduardo’s job as a Second Officer and his bronchial asthma, which eventually
developed into acute respiratory failure. It likewise held that it is of no moment that Eduardo died after
the expiration of his last contract, because what is controlling is the fact that he acquired his lung
disease while he was still rendering sea services.

Such disease was further aggravated by continued exposure to chemicals while on board. The CA held
that the NLRC gravely abused its discretion in affirming the Labor Arbiter’s dismissal of the complaint
considering that there was substantial evidence showing a causal connection between Eduardo’s lung
illness and his work as a seaman. It thus ordered German Marine, et al. to pay Teodolah death benefits
and burial expenses in accordance with the 2000 POEA-SEC.

The CA denied as well German Marine, et al.’s motion for reconsideration.

ISSUE:

Whether or not death of the seafarer that occurred after the end of contract is compensable where
causal connection legally exists between the illness contracted during his employment and the cause of
death

RULING:

The SC found the petition unmeritorious. When a party claims benefits for the death of a seafarer due to
a work-related illness, one must be able to establish that: (1) the death occurred during the term of his
employment; and (2) the illness is work-related.

Under the given definition of the 2000 POEA-SEC, a work-related illness is “any sickness resulting to
disability or death as a result of an occupational disease listed under Section 32-A of this contract with
the conditions set therein satisfied.” The 2000 POEA-SEC creates a disputable presumption that illnesses
not mentioned therein are work-related.

However, on the ground of due process, the claimant may still prove by substantial evidence, or that
amount of relevant evidence which a person might accept as adequate to justify a conclusion, that the
seafarer’s work conditions caused or, at least, increased the risk of contracting the disease. This is
because awards of compensation cannot rest entirely on bare assertions and presumptions; substantial
evidence is required to prove the concurrence of the conditions that will merit compensability,
consistent with the liberal interpretation accorded the provisions of the Labor Code and the social
justice guarantee in favor of the workers.

The SC held that Teodolah was able to prove through substantial evidence the causal connection
between Eduardo’s work as a seafarer and his cause of death. Evidence substantiating the same
included an enumeration of Eduardo’s exposure to chemicals, noise and whole-body vibrations, strong
draft winds and stormy weather, cold stress and heat stress, excessive heat from burners and steam
pipes, and ultraviolet radiation during welding operations while on board and in the exercise of his
duties as a Second Officer for German Marine, et al.

Teodolah already established the causal link between the nature of Eduardo’s work and the cause of the
deterioration of his health leading to his repatriation at the first instance in her complaint before the
Labor Arbiter. There, she contended, among others, that after his repatriation, a physician at the Lung
Center of the Philippines diagnosed him then to have been suffering from bronchial asthma, which was
chemical-induced. These claims were not dispelled by the Labor Arbiter but were merely disregarded on
the reasoning that Eduardo’s death was not compensable because it occurred after the expiration of his
employment contract.

In the early case of lloilo Dock & Engineering Co. vs. Workmen’s Compensation Commission, it was held
that the question of compensation coverage necessarily revolves around the core requirement of work-
connection, and the corresponding evidence that establishes it. When it comes to evaluating work-
relatedness with respect to its guiding provisions in labor laws and their implementing rules, the same
must always be construed fairly, reasonably, or liberally in favor, or for the benefit, of employees and
their dependents, with all doubts as to the right to compensation being resolved, and all presumptions
indulged in their favor.

The application of the liberal construction in favor of labor in our jurisdiction and settled jurisprudence
requires only that a reasonable connection between the nature of the occupation and the cause of
death be established to entitle claimants to accountability, as aptly defined in the case of Wallem
Maritime Services, Inc. vs. NLRC. In this case, it was held that it is enough that the employment had
contributed, even in a small degree, to the development of the disease and in bringing about his death.

Veritably, if the illness which caused the employee’s death was either contracted in the course of his
employment or aggravated during the same period, the clear causal connection between such illness
and the employee’s eventual death already legally exists, making the death compensable regardless of
when such subsequent death occurred.
It is not even required that the illness contracted during the course of employment be the exact same
illness that caused the eventual death, for as long as it can be established that the work-related ailment
he contracted during the course of his employment be that which triggered the deterioration of his
body’s resistance against the said illness, any related condition, or any other affliction that he may have
subsequently had.

In the present case, Eduardo’s causes of death included acute respiratory failure which was diagnosed as
secondary to pulmonary thromboembolism. It does not demand a stretch of the imagination to
reasonably presume that the conditions to which Eduardo was exposed to during the fulfillment of his
duties as Second Officer aboard German Marine, et al.’s vessel at the very least contributed to either the
contracting of said respiratory illness or the aggravation thereof.

Hubilla, et. al., vs. HSY Marketing, LTD., Co., et. al., GR No. 207354, January 10, 2018 (equipoise rule)

G.R. No. 207354; January 10, 2018

CHARLIE HUBILLA, JOEL NAYRE, NENITA A. TAN, PEDRO MAGALLANES, JR., ARNEL YUSON, JANICE
CABATBAT, JUDY PAPINA, VANESSA ESPIRITU, NOEMI YALUNG, GENALYN RESCOBILLO, FIDEL ZAQUITA,
NYL B. CALINGASAN, JANICE MIRADORA, EVANGELINE CHUA, ROSCHELLE MISSION, MELANIE
BALLESTEROS, MARILYN BACALSO, RENALYN ALCANTARA, FEDERICO B. VIERNES, CHRISTOPHER B.
YARES, ANA MARY R. AGUILAR, MELANIE SAN MARCOS, EMERLOVE MONTE, CHONALYN LUCAS,
THERESA MALI COSIO, MA. FE CERCARES, RUBELYN R. CLARO, JONALYN M. YALUNG, MARY ANN V.
MACANAG, RESLYN L. FLORES, CRISTEL C. ROQUE, TERESA G MUNAR, SUSAN A. DELA CRUZ, SHEENA KAY
P. DE VERA, ARLENE R. ANES, GINA B. BINIBINI, CHERINE V. ZORILLA, MA. CRISTINE MAGTOTO, FRANCIS
MARIE O. DE CASTRO, VANESSA R. ESPIRITU, RACHELLE V. QUISTORIA, JULIE ANN ILAN, ANGELIE F.
PANOTES, ANABEL PAYOS, MELISSA M. PERLAS, MELANIE B. BERSES, BARVI ROSE PERALTA, RESIE AQUE,
ROWENA RIVERA, MELANIE M. DY, CHERYLYN CORO, RANELYN SUBONG, ANGELA SUBILLAGA, THELMA
BARTOLABAC, MICHELLE C. ILAGAN, PRECIOUS MAE DE GUZMAN, MARY CAROLINE COLINA, FRELYN
HIPOLITO, MYLINE A. CALLOS, JANETH B. SEMBILLO, LEA LYN F. FERRANCO, MAY C. SANTOS, ROSELLE A.
NOBLE, JENNIFER D. SUYOM, WARREN PETCHIE C. CAJES, ROWELYN F. CATALAN, RIEZEL ANN A. ALEGRE,
DEMETRIA B. PEREZ, GENALYN OSOC, JUVILYN N. NERI, JOY B. PIMENTEL, AIRENE LAYON, MARY JOY
TURQUEZA, MARY ANN VALENTIN, ROSIE L. NIEBRES, MELCA MALLORCA, JOY CAGATCAGAT, DIANA
CAMARO, MARIVEL DIJUMO, SHEILA DELA CRUZ, ELIZABETH ARINGO, JENALYN G. DISMAYA, MELANIE G.
TRIA, GRETCHEN D. MEJOS, and JANELIE R. JIMENEZ, Petitioners

vs.

HSY MARKETING LTD., CO., WANTOFREE ORIENTAL TRADING, INC., COEN FASHION HOUSE AND
GENERAL MERCHANDISE, ASIA CONSUMER VALUE TRADING, INC., FABULOUS JEANS & SHIRT &
GENERAL MERCHANDISE, LSG MANUFACTURING CORPORATION, UNITE GENERAL MERCHANDISE,
ROSARIO Q. CO, LUCIA PUN LING YEUNG, and ALEXANDER ARQUEZA, Respondents

LEONEN, J.:
DOCTRINE:

No evidence has been presented proving that each and every petitioner received a copy of the First
Notice of Termination of Employment. On the other hand, respondents have not presented any proof
that petitioners intended to abandon their employment.

Where both parties in a labor case have not presented substantial evidence to prove their allegations,
the scales of justice are tilted in favor of labor. Thus, petitioners are hereby considered to have been
illegally dismissed. (equipoise doctrine)

FACTS:

Respondents are engaged in manufacturing and selling goods under the brand Novo Jeans & Shirt &
General Merchandise (Novo Jeans). Sometime in May and June 2010, several of its employees went to
Raffy Tulfo's radio program to air their grievances against their employers for alleged labor violations.

Petitioners allege that they were illegally dismissed and barred from entering their work premises. On
the other hand, respondents deny this allegation and state that petitioners were never dismissed from
employment. In addition, they claimed that these employees voluntarily severed their employment
since the airing of their grievances on Raffy Tulfo's radio program. Petitioners filed their complaints
before the Labor Arbiter.

The LA dismissed the complaints of petitioners ruling out that they did not present sufficient evidence in
proving that their employment was terminated and that they were prevented from reporting for work.
The NLRC reversed LA’s finding that the employees were illegally dismissed. The CA affirmed LA’s
decision.

ISSUE:

Whether or not the petitioners were illegally dismissed by respondents.

RULING:

Yes, petitioners were illegally dismissed by respondents. It is ruled out that, where both parties in a
labor case have not presented substantial evidence to prove their allegations, the evidence is considered
to be in equipoise. In such a case, the scales of justice are tilted in favor of labor. Thus, petitioners are
hereby considered to have been illegally dismissed.

There is likewise no proof that petitioners abandoned their employment. To constitute abandonment,
the employer must prove that "first, the employee must have failed to report for work or must have
been absent without valid or justifiable reason; and second, that there must have been a clear intention
on the part of the employee to sever the employer-employee relationship manifested by some overt
act."

Petitioners were not dismissed under any of the causes mentioned in Article 279 [282] of the Labor
Code. They were not validly informed of the causes of their dismissal. Thus, their dismissal was illegal.

Sunripe Coconut Products v. CIR, 83 Phil. 518

DOCTRINE:

FACTS:

The instant case concerns an appeal from a decision of the Court of Industrial Relations. The latter ruled
that the “parers” and “shellers” of petitioner are its laborers entitled to12 day-sick leave (1 day for
each month of service),notwithstanding the fact that they are piece-workersunder the"pakiao"
system.2.CIR held that when a worker possesses someattributes of an employee and others of an
independent contractor,which make him fall within an intermediate area, he may beclassified
under the category of an employee when the economicfacts of the relation make it more nearly
one of employment thanone of independent business enterprise with respect to the endssought to be
accomplished.3.Petitioner contends the following:a)That the economic factscharacteristic ofthe
independent contractor far outweighs theeconomic facts indicative of an employee.b)That the CIR
departed from the definition of the word "employee" or"laborer" found in the Workmen's
Compensation Law.c)That the principal test in determining whether a workeris an employee or an
independent contractor is the employer's rightof control over the work, and not merely the right to
control theresult, it being intimated that the "parers" and "shellers" arecontrolled by the petitioner only
to the extent "that the nuts are paredwhole or that there is not much meat wasted."d)That the “parers”
and “shellers” are piece-workers under the “pakiao” system.

ISSUE:

Whether the “parers” and “shellers” are independent contractors and do not fall within the category of
employees or laborers.

RULING:

As to the first contention, SC upheld the CIR ruling that the “parers” and “shellers” work under some
degree of control or supervision of the company, if not under its absolute direction; that said
"parers” and "shellers" form stable groups composed of matured men and women who regularly work
at shelling and paring nuts; that for the most part they depend on their work in Sunripe for their
livelihood; that they are admittedly working in the factory of said company, alongside persons who are
indisputably employed by said company.As to the second contention, SC upheld CIR. The Workmen’s
Compensation Law defines a laborer or employee as a person who has entered the employment of, or
works under a service or apprenticeship contract for, an employer.On the other hand, CIR defined it as
an employee is any person inthe service of another under a contract for hire, express or implied, oral or
written. In essence, CIR ruling does not run counter tothe legal definition.As to the third contention,
SC held that the requirement imposed on the "parers" and "shellers" to the effect that "the nuts are
pared whole or that there is not much meat wasted," in effect limits or controls the means or details by
which said workers are to accomplish their services. It is inconceivable that the "parers" and
"shellers," in orderto meet the requirement of the petitioner, would not follow a uniform
standard in the performance of their work.As to the fourth and last contention, SC made reference
to C.A. 103, the organic law of the CIR. It provides that a minimum wage or share shall be
determined and fixed for laborers working by the hours,day or month, or by piece-work,and for tenants
sharing in the crop or paid by measurement unit. Thus, the organic law of the CIR even orders that
laborers may be paid by piece-work; and the fact that the "parers" and "shellers" are paid a fixed
amount for a fixed number of nuts pared or shelled, does not certainly take them out of the purview of
CA 103.On a final note, SC made a general remark that in cases of this kind, wherein laborers are usually
compelled to work under conditions and terms dictated by the employer, a reasonably wide latitude
ofaction and judgment should be given to theCIR with a view to settling industrial disputes
conformably to the intents and purposes of its organic law.To decide this case otherwise would set a
precedent that may tend to encourage other employers to adopt this strategy or scheme to deprive
their laborers of benefits under the law (SC pointed out na by saying this last sentence, hindi nila
ini-imply na si petitioner ay knowingly pinipilit na yung mga parers and shellers ay independent
contractors just to deprive them of their benefits).

Manila Golf & Country Club v. IAC, 237 SCRA 207

DOCTRINE:

FACTS:

The question before the Court here is whether or not persons rendering caddying services for members
of golf clubs and their guests in said clubs' courses or premises are the employees of such clubs and
therefore within the compulsory coverage of the Social Security System (SSS).

That question appears to have been involved, either directly or peripherally, in three separate
proceedings, all initiated by or on behalf of herein private respondent and his fellow caddies. That which
gave rise to the present petition for review was originally filed with the Social Security Commission (SSC)
via petition of seventeen (17) persons who styled themselves "Caddies of Manila Golf and Country Club-
PTCCEA" for coverage and availment of benefits under the Social Security Act as amended, "PTCCEA"
being the acronym of a labor organization, the "Philippine Technical, Clerical, Commercial Employees
Association," with which the petitioners claimed to be affiliated.
In the case before the SSC, the respondent Club filed answer praying for the dismissal of the petition,
alleging in substance that the petitioners, caddies by occupation, were allowed into the Club premises to
render services as such to the individual members and guests playing the Club's golf course and who
themselves paid for such services; that as such caddies, the petitioners were not subject to the direction
and control of the Club as regards the manner in which they performed their work; and hence, they
were not the Club's employees.

Subsequently, all but two of the seventeen petitioners of their own accord withdrew their claim for
social security coverage, avowedly coming to realize that indeed there was no employment relationship
between them and the Club. The case continued, and was eventually adjudicated by the SSC after
protracted proceedings only as regards the two holdouts, Fermin Llamar and Raymundo Jomok.

ISSUE:

Whether or not the private respondents are employees of the petitioner club.

RULING:

No. The Court does not agree that said facts necessarily or logically point to such a relationship, and to
the exclusion of any form of arrangements, other than of employment, that would make the
respondent's services available to the members and guest of the petitioner.

As long as it is, the list made in the appealed decision detailing the various matters of conduct, dress,
language, etc. covered by the petitioner's regulations, does not, in the mind of the Court, so
circumscribe the actions or judgment of the caddies concerned as to leave them little or no freedom of
choice whatsoever in the manner of carrying out their services. In the very nature of things, caddies
must submit to some supervision of their conduct while enjoying the privilege of pursuing their
occupation within the premises and grounds of whatever club they do their work in. For all that is made
to appear, they work for the club to which they attach themselves on sufference but, on the other hand,
also without having to observe any working hours, free to leave anytime they please, to stay away for as
long they like. It is not pretended that if found remiss in the observance of said rules, any discipline may
be meted them beyond barring them from the premises which, it may be supposed, the Club may do in
any case even absent any breach of the rules, and without violating any right to work on their part. All
these considerations clash frontally with the concept of employment.

The IAC would point to the fact that the Club suggests the rate of fees payable by the players to the
caddies as still another indication of the latter's status as employees. It seems to the Court, however,
that the intendment of such fact is to the contrary, showing that the Club has not the measure of
control over the incidents of the caddies' work and compensation that an employer would possess.

The Court agrees with petitioner that the group rotation system so-called, is less a measure of employer
control than an assurance that the work is fairly distributed, a caddy who is absent when his turn
number is called simply losing his turn to serve and being assigned instead the last number for the day.
Orozco v. Court of Appeals, 562 SCRA 36

DOCTRINE: The determination of whether or not an employer-employee relationship exists is on a case-

to-case basis. In determining however, the four-fold test has been consistently used. The most
important element in the four-fold test is control. Control not only means control over the end product
but also the means and methods in accomplishing the work. Where certain limitations are inherent in
the industry or business involved, such inherent limitations cannot be considered in determining the
presence of control.

FACTS:Wilhelmina Orozco was engaged by the Philippine Daily Inquirer (PDI) to write a weekly column
for its Lifestyle Section.Wilhelmina continuously submitted an article every week, except for a 6-month
period when she was in New York. Even then, she still sent her article through mail and received 250 and
later 300 pesos per published article.November 7, 1992 was the last time her articles were
published.Petitioner claims that she was told by her editor that respondent Magsanok wanted to stop
publishing for no reason, but when brought up to Magsanok herself claimed that the PDI chairperson
found that there were too many articles published in the Lifestyle section. PDI claims that the reason
why it had stopped publication of Wilhelmina’s articles was because it failed to improve and was
superficially and poorly written; failing to meet the high standards of the newspaper.Wilhelmina then
filed a complaint for illegal dismissal, backwages, moral and exemplary damages before the NLRC.The
Labor Arbiter ruled in favor of Wilhelmina on the ground that the essential element of control was
present and thus the latter was an employee of PDC. The Labor Arbiter bases his findings on the fact
that PDC had control over the subject of the article, length, and even perspective in that Wilhelmina’s
articles had to be written on matters of feminine interest. The fact that Wilhelmina did not have to
report to work is of no matter because her tasks were mainly mental. This was supported by the
occasion when PDI refused to publish petitioner’s article about death for All Saints Day.

On appeal, the NLRC affirmed the Labor Arbiter’s decision. 9. The CA, however, reversed the decision of
the NLRC. The CA found that no employment contract existed. This is supported by the fact that
Wilhelmina did not report 8 hours a day and left for New York for 6 months without PDI’s permission;
with no repercussions. With regard to the element of control, the CA found it to be lacking as well. The
length is only a concern of practicality was to properly fit the page, while the claimed control over the
topic is not really such since she could write about anything that would match a lifestyle section. PDI
could control the result but not the means.

ISSUE:WON petitioner Wilhelmina is an employee of PDI?

RULING: No. Although Wilhelmina herself admitted that she "was not, and had never been considered
respondent’s employee because the terms of works were arbitrarily decided upon by the respondent," it
is the law and not the will of the parties that defines the status of employment in this jurisdiction.
The “four-fold test” has constantly been used by the court to determine the existence of an employer-
employee relationship. The test is whether or not the four elements of employment exist; namely,

a)the selection and engagement of the employee;

b)the payment of wages;

c)the power of dismissal; and

d)the employer’s power to control the employee’s conduct.

The element of control, or whether the employer controls or may control the means and methods in
accomplishing the work as well as the end product, is the most important in determining said
relationship.The Court found that the “control” that PDI exerted on Wilhelmina are inherent conditions
in every newspaper and such restrictions are dictated by the nature of the business and not the
“employer.” Petitioner in the present case was proven to be able to write in the style she was
accustomed to as well as use whatever method of research. In fact, the title “Feminist Reflections” was
chosen by her.

Spectrum Security Services, Inc. vs David Grave, et.al., G.R. No. 196650, June 7, 2017

DOCTRINE:

FACTS:

The petitioner - a domestic corporation engaged in the business of providing security services -
employed and posted the respondents at the premises of Ibiden Philippines, Inc. (Ibiden) located in the
First Philippine Industrial Park in Sto. Tomas, Batangas. The controversy started when the petitioner
implemented an action plan as part of its operational and manpower supervision enhancement program
geared towards the gradual replacement of security guards at Ibiden. 3Pursuant to the action plan, it
issued separate "Notice(s) to Return to Unit" to the respondents directing them to report to its head
office and to update their documents for re-assignment.

Respondents filed their complaint against the petitioner for constructive dismissal in Regional
Arbitration Branch No. IV of the NLRC, claiming that the implementation of the action plan was a
retaliatory measure against them for bringing several complaints5 along with other employees of the
petitioner to recover unpaid holiday pay and 13th month pay.

ISSUE:

Whether or not respondents were illegally dismissed by the petitioner.

RULING:

No. Security guards, like other employees in the private sector, are entitled to security of tenure.
However, their situation should be differentiated from that of other employees or workers. The
employment of security guards generally depends on their employers' contracts with clients who are
third parties to the employment relationship, and the requirements of the latter for security services
and what will be beneficial to them dictate the posting of the security guards. It is also relevant to
mention that their employers retain the management prerogative to change their assignments and
postings, and to decide to temporarily relieve them of their assignments. In other words, their security
of tenure, though it shields them from demotions in rank or diminutions of salaries, benefits and other
privileges, does not vest them with the right to their positions or assignments that will prevent their
transfers or re-assignments (unless the transfers or re-assignments are motivated by discrimination or
bad faith, or effected as a form of punishment or demotion without sufficient cause). Such peculiar
conditions of their employment render inevitable that some of them just have to undergo periods of
reserved or off-detail status that should not by any means equate to their dismissal. Only when the
period of their reserved or off-detail status exceeds the reasonable period of six months without re-
assignment should the affected security guards be regarded as dismissed.

Indeed, there should be no indefinite lay-offs. After the period of six months, the employers should
either recall the affected security guards to work or consider them permanently retrenched pursuant to
the requirements of the law; otherwise, the employers would be held to have dismissed them, and
would be liable for such dismissals.