Serrano v. Gallant Maritime Services, Inc.,

GR No. 167614, 24 March 2009

Facts: Complainant Serrano was hired by Gallant Maritime Services, Inc. and Marlow
Navigation Co., Inc. under a PO!"approved contract as a Chie# O##icer #or $% months. On
the date o# his departure, he was constrained to accept a downgraded employment contract
#or the position o# Second O##icer upon the assurance that he would be made Chie# O##icer
by the end o# the #ollowing month. &ecause he was not made Chie# O##icer as promised, he
re#used to stay on as Second O##icer and was repatriated to the Philippines with ' months
and %( days remaining in his employment contract. )e then #iled a complaint #or
constructive dismissal and #or payment o# money claims with the *abor !rbiter +*!.

-he *! declared Serranos dismissal as illegal and awarded him the amount e/uivalent to (
months worth o# salary #or the une0pired portion o# his term, #ollowing Paragraph 1, Section
$2 o# 3! 425%. On appeal, the N*3C only corrected the *!s computation o# the lump"sum
salary awarded to Serrano, but a##irmed the *! 6udgment in all other respects. Serrano
moved #or partial reconsideration and assailed the constitutionality o# Section $2 o# 3!
425%. -he C! subse/uently a##irmed the N*3C but s7irted the constitutional issue raised by
Serrano.

Issue: 89N the clause :or #or ( months #or every year o# the une0pired term, whichever is
less,; #ound in Section $2 +1 o# 3! 425%, violates Section $4 o# !rticle II +-he State a##irms
labor as a primary social economic #orce.

Ruling: <S, =IO*!-I= O> !3-IC* III SC-ION $ O> -) P)I*IPPIN CONS-I-?-ION.
-he Court concludes that the sub6ect clause contains a suspect classi#ication in that, in the
computation o# the monetary bene#its o# #i0ed"term employees who are illegally discharged,
it imposes a ("month cap on the claim o# O>8s with an une0pired portion o# one year or
more in their contracts, but none on the claims o# other O>8s or local wor7ers with #i0ed"
term employment. -he sub6ect clause singles out one classi#ication o# O>8s and burdens it
with a peculiar disadvantage.

Sonza v. AS!"N roa#castin$ "or%oration

GR No. 1&'0(1, 10 )*ne 2004

Facts: In May $''5, !&S"C&N signed an agreement with the Mel and @ay Management and
Aevelopment Corporation +M@MAC. In the said !greement, M@MAC agreed to provide
SonBas services e0clusively to !&S"C&N as talent #or radio and television.

In $'', SonBa wrote a letter to !&S"C&N, stating that their !greement has been rescinded
because o# !&S"C&Ns breach thereo#. SonBa subse/uently #iled a complaint be#ore the
AO*, complaining that !&S"C&N did not pay his salaries, separation pay, service incentive
leave pay, $( th"month pay, signing bonus, travel allowance, and amounts due under the
mployees Stoc7 Option Plan. -he *! subse/uently dismissed SonBas complaint #or lac7 o# 
 

 6urisdiction, based on the absence o# employer"employee relationship between !&S"C&N

and SonBa. -he N*3C and C!, on appeal, also dismissed SonBas complaint.

Issue: 89N an employer"employee relationship e0isted between !&S"C&N and SonBa.

Ruling: NO. -he elements o# an employer"employee relationship areD

+$ -he selection and engagement o# the employeeE

+% -he payment o# wagesE
+( -he power o# dismissalE and
+5 -he employers power to control the employee on the means and methods by
which the wor7 is accomplished.

-he last element, the so"called :control test,; is the most important element that our courts
apply in distinguishing an employee #rom an independent contractor. -his test is based on
the e0tent o# control the hirer e0ercises over a wor7er. -he greater the supervision and
control the hirer e0ercises, the more li7ely the wor7er is deemed an employee. -he converse
holds true as wellFthe less control the hirer e0ercises, the more li7ely the wor7er is
considered an independent contractor.

+*ncan Association o +etailman!-G/ v. Glao /ellcome -hili%%ines

GR No. 162994, 17 Se%temer 2004

Facts: Pedro !. -ecson, a medical representative hired by Gla0o 8ellcome Philippines,

signed a contract o# employment which stipulates, among others, that he agrees to study
and abide by e0isting company rules and to disclose to management any e0isting or #uture
relationship by consanguinity or a##inity with co"employees or employees o# competing drug
companies and should management #ind that such relationship poses a possible con#lict o# 
interest, to resign #rom the company.

-ecson, however had a romantic relationship with &etsy, a &ranch Coordinator o# !stra
Pharmaceuticals, which is a competitor o# Gla0o. -ecson married &etsy in September $''4.
In $''', -ecsons superiors in#ormed him that his marriage to &etsy gave rise to a con#lict
o# interest. -he NCM& subse/uently declared Gla0os policy on relationships between its
employees and person employed with competitor companies as valid, and a##irmed Gla0os
right to trans#er -ecson to another sales territory. -he C! a##irmed the NCM& decision.

Issues: 89N Gla0os policy against employees marrying employees o# competitor companies

violates the e/ual protection clause o# the Constitution by creating invalid distinctions
among employees on account only o# marriage, thus restricting its employees right to
marry.

RulingD NO. -he challenged company policy does not violate the e/ual protection clause o# 
the Constitution. It is a settled principle that the commands o# the e/ual protection clause
are addressed only to the state or those acting under color o# its authority. -he e/ual
protection clause erects no shield against merely private conduct, however discriminatory or
wrong#ul.
 

-he prohibition against personal or marital relationships with employees o# competitor

companies upon Gla0os employees is reasonable under the circumstances because
relationships o# that nature might compromise the interests o# the company.

rozco vs "A, -+I an# Ma$sanoc,

GR No. 1((207, A*$*st 1&, 200'

FactsD OroBco was hired as a writer by the Philippine Aaily In/uirer in $''2. She writes on a
wee7ly basis and on a per article basis +P%12"(229article. In $''$, Magsanoc as the editor"
in"chie# sought to improve the *i#estyle section o# the paper. She said there were too many
*i#estyle writers and that it was time to reduce the number o# writers. OroBcos column was
eventually dropped.

OroBco #iled #or a case #or Illegal Aismissal against PAI and Magsanoc. OroBco won in the
*abor !rbiter. -he *! ruled that there e0ists an employer"employee relationship between
PAI and OroBco hence OroBco is entitled to receive bac7wages, reinstatement, and
$(th month pay. PAI appealed to the National *abor 3elations Commission. -he N*3C denied
the appeal because o# the #ailure o# PAI to post a surety bond as re/uired by !rticle %%( o# 
the *abor Code. -he C! reversed the N*3C.

Issue: 8hether or not PAIs appeal will prosper.

Ruling:  ?nder !rticle %%( o# the *abor Code :Aecisions, awards or orders o# the *abor
!rbiter are #inal and e0ecutory unless appealed to the Commission by any or both parties
within ten +$2 calendar days #rom receipt o# such decisions, awards, or orders.; 

-he re/uirement that the employer post a cash or surety bond to per#ect its9his appeal is
apparently intended to assure the wor7ers that i# they prevail in the case, they will receive
the money 6udgment in their #avor upon the dismissal o# the employers appeal. It was
intended to discourage employers #rom using an appeal to delay, or even evade, their
obligation to satis#y their employees 6ust and law#ul claims.

-he case is then remanded to the *abor !rbiter #or the computation. -his necessarily
pended the resolution o# the other issue o# whether or not there e0ists an employer"
employee relationship between PAI and OroBco.
 

3mman*el aas et. al. v orenzo Shi%%in$ "or%oration

G.R. No. 1'6091, +ecemer 1( 2010

Facts:  *orenBo Shipping Corporation +*SC is a duly organiBed domestic corporation

engaged in the shipping industry. *SC entered into a General /uipment Maintenance 3epair
and Management Services !greement +!greement with &est Manpower Services, Inc.
+&MSI. ?nder the !greement, &MSI undertoo7 to provide maintenance and repair services
to *SCs container vans, heavy e/uipment, trailer chassis, and generator sets. &MSI #urther
undertoo7 to provide chec7ers to inspect all containers received #or loading to and9or
unloading #rom its vessels.

Simultaneous with the e0ecution o# the !greement, *SC leased its e/uipment, tools, and
tractors to &MSI. -he period o# lease was coterminous with the !greement.

&MSI then hired petitioners on various dates to wor7 at *SC as chec7ers, welders, utility
men, cler7s, #or7li#t operators, motor pool and machine shop wor7ers, technicians, trailer
drivers, and mechanics.

In September %22(, petitioners #iled with the *abor !rbiter +*! a complaint #or
regulariBation against *SC and &MSI. On October $, %22(, *SC terminated the !greement,
e##ective October ($, %22(. Conse/uently, petitioners lost their employment.

-he *abor !rbiter dismissed petitioners complaint on the ground that petitioners were
employees o# &MSI. It was &MSI which hired petitioners, paid their wages, and e0ercised
control over them. -he N*3C reversed the *abor !rbiter

Issue: 8hether or not respondent was engaged in labor"only contracting.

Ruling: <es. In Ae *os Santos v. N*3C, the character o# the business, i.e., whether as labor"
only contractor or as 6ob contractor, should be measured in terms o#, and determined by, the
criteria set by statute. -he parties cannot dictate by the mere e0pedience o# a unilateral
declaration in a contract the character o# their business.