Position Paper in A Labor Case Philippines

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Republic of the Philippines

Department of Labor and Employment
NATIONAL LABOR RELATIONS COMMISSION
RAB-CAR
Baguio City
RALLAIN GANDSTIAGO,
Complainant,
NLRC RAB-CAR Case # 01-23456-18 -

versus-
CDLN GRAPHICS, INCORPORATED,

Respondent.
x-------------------------------------x
POSITION PAPER
(For the Respondent)
RESPONDENT Company, by counsel, most respectfully submits this

Position Paper, for the consideration of the Honorable Office, and states that:
I. PREPARATORY STATEMENT
Complainant Rallain Gandstiago (Complainant, for brevity), is of legal age,

single, and a resident of #7 Brgy. Lualhati, Baguio City.
Respondent CDLN Graphics Incorporated (Respondent for Brevity),

represented by its President/CEO, Mr. Clifford Gates, is a corporation duly
organized under the requirements of the Philippine Laws, which holds its principal
place of business at No. 01 Upper Session Road, Baguio City.
The parties may be served with the notices, orders, and resolution of the
Honorable Office in the above-stated addresses.
II STATEMENT OF FACTS
1. Respondent is a corporation engaged in, among other things,

computer programming business, wherein it process an original
formulation of computing problem to executable computer
programs. Programming involves activities such as analysis,
developing understanding, generating algorithms, and
verifications of requirements of algorithms including their
correctness and resources consumption, and implementation of
algorithms in a target programming language.
2. On the other hand, complainant is an independent contractor,

who possessed a unique skills and talent in graphic arts. His
services were engaged to design, code, and modify websites,
from layout to functions, of the respondent’s contract with
clients. Also, he creates art graphics primarily for publication,
printing, or electronic media, such as brochures and advertising.
Downloaded by AJ Hope Sanchez (ajvillsan09@gmail.com)

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3. That sometime in January 2013, respondent engages the herein

complainant as its Graphic Artist to work on a specific project
and undertaking, wherein the same was to be completed for a
period of five (5) months. A copy of the Project Employment
Contract executed on January 2013 is hereto attached and made
an integral part hereof as Annex “1”;
4. As stipulated on the said contract, the complainant is required to

render his expertise in the graphic arts exclusively for the herein
respondent and/or the latter’s clients. It was also stipulated that
his compensation would be based on the development or
completion of each of the project done. However, the
complainant would be bound by the respondent’s Rules and
Regulations, such as, the complainant will be required to report
for work, although there is no need for him to observe the
regular working hours of the respondent, on the condition that
he would finish his tasked and project before the deadline
comes;
5. It was also agreed that the herein complainant would not be

included in the payroll of the respondent and the complainant
would be personally liable in paying his own contributions with
the Social Security Systems, PhilHealth, Pag-Ibig
Contributions, and his personal income taxes.
6. The complainant, in pursuit of his contract with the respondent,

would only use the certain and the designated computer
software and holographic machines to be provided exclusively
by the respondent. The complainant would independently do his
design or arts for the projects assigned to him, however, each
and every development of the project done by the complainant
would be a subject for approval by the respondent’s design
manager, wherein the latter is given full authority to revise,
reject, or accept the work done by the complainant.
7. On June 2013, the Project Employment Contract executed by

the herein parties had been terminated because of the
completion of project. However, it was later on renewed
because the respondent took note of the good work done by the
complainant, the reason the latter was given another projects to
work on. A copy of the 2nd, 3rd and 4th Project Employment
Contracts dated June 5, 2013,November 30, 2014, December 5,
2016, respectively, are hereto attached as Annexes “2”, “3”,
and “4”;
8. All things went well until the complainant was given his Fifth
Project with the respondent covered under their 5 th Project Employment
Contract. A Copy of the 5th Project Employment Contract is hereto attached
and made an integral part hereof as Annex “5”;
9. In the complainant’s fifth’s project, the respondent entrusted to

the former their very important foreign account and/or client.
When the complainant was given the opportunity to work on the

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same, he was given some strict specifications and was

specifically instructed to use the software and the special
machine of the foreign account/client in finishing his work.
Unfortunately, the herein complainant deliberately violated the
order and specifications, and instead used the software and the
machine of the respondent in finishing his 5th project.
10. As a result thereof, the foreign account/client was dissatisfied

with the project, and for which reason, it filed and sued the
herein respondent allegedly for breach of contract and damages.
11. The complainant received a Notice to Explain sent to him by the

herein respondent to explain in writing within Five (5) days
why he had not followed the specifications directed to him,
which caused irreparable work that he had done in his 5 th
project, and damage and injury to the respondent.
A copy of the Notice to Explain is hereto attached and made a part hereof as
Annex “8”
12. Despite the opportunity given to the complainant, he did not

comply nor file any written explanation. The respondent was
then constrained to send a Notice which terminates their 5th
Project Employment Contract. A Copy of the Notice of
Termination is hereto attached and made an integral part hereof
as Annex “9”;
13. The herein complainant now filed this instant case and alleging
that he was illegally dismissed, and which claim is
preposterous.
III. ISSUES
1. Whether or not there is an employer-employee relationship
2. Whether or not Complainant RALLAIN GANDSTIAGO is

considered a regular employee of the herein respondent;
3. Whether or not Complainant’s act is equivalent to WILLFUL

DISOBEDIENCE as defined under just causes of
termination pursuant to labor code
4. Whether or not due process of termination was observed
5. Whether or not the Complainant is entitled to the reliefs prayed

for in his complaint on the ground of illegal dismissal.
IV. DISCUSSIONS
I. In determining the existence of an employer-employee relationship,

the following elements or the four-fold test are considered:
(1) the selection and engagement of the employee;

(2) the payment of wages;
(3) the power of dismissal; and

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(4) Most determinative among these factors is the so-called

"controltes."
Of the above-mentioned elements, the right of control test is considered as

the most important element in determining the existence of employment relation.
The control test initially found application in the case of Viaña vs. Al-Lagadan and
Piga, where the court held that there is an employer-employee relationship when
the person for whom the services are performed reserves the right to control not
only the end achieved but also the manner and means used to achieve that end.
Control test thus refers to the employer’s power to control the employee’s
conduct not only as to the result of the work to be done but also with respect to the
means and methods by which the work is to be accomplished.
In applying this test, it is the existence of the right, and not the actual
exercise thereof, that is important.
In the instant case, there is no employer-employee relationship. The
complainant would independently do his design or arts for the projects assigned to
him, however, each and every development of the project done by the complainant
would be a subject for approval by the respondent’s design manager.
However, the Court agrees with the disquisition of the REYES vs.
GLAUCOMA RESEARCH FOUNDATION, INC., G.R. No. 189255, June 17,
2015 on this matter, to wit:
[Respondents'] power to approve or reject the organizational plans drawn by

[complainant] cannot be the control contemplated in the "control test." It is but
logical that one who commissions another to do a piece of work should have
the right to accept or reject the product. The important factor to consider in the
"control test" is still the element of control over how the work itself is done, not
just the end result thereof.
Well settled is the rule that where a person who works for another performs his
job more or less at his own pleasure, in the manner he sees fit, not subject to
definite hours or conditions of work, and is compensated according to the result
of his efforts and not the amount thereof, no employer-employee relationship
exists.
xxx
As to the "control test", the following indubitably reveal that respondents

wielded control over the work performance of complainant, to wit: (1) that required
him to work within the company premises; (2) obliged complainant to report every
day of the week and tasked him to usually perform the same job; (3) they enforced
the observance of definite hours of work; (4) the mode of payment of
complainant’s salary was paid in project basis; (5) they implemented company
rules and regulations; (6) that respondent directly paid complainant’s salaries and
controlled all aspects of his employment and (7) petitioner rendered work
necessary and desirable in the business of the company.
Aside from the control test, the Supreme Court has also used the
economic reality test in determining whether an employer-employee
relationship exists between the parties. Under this test, the economic
realities prevailing within the activity or between the parties are examined,

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taking into consideration the totality of circumstances surrounding the true

nature of the relationship between the parties. This is especially appropriate
when, as in this case, there is no written agreement or contract on which to
base the relationship. In our jurisdiction, the benchmark of economic reality
in analyzing possible employment relationships for purposes of applying the
Labor Code ought to be the economic dependence of the worker on his
employer.
There is likewise substantial evidence to support that Complainant

RALLAIN GANDSTIAGO was not an employee of CDLN Graphics Incorporated.
Thus:
1. Complainant’s name does not appear in the list of employees

reportedwith the Social Security Systems, PhilHealth, Pag-Ibig
Contributions, and personal income taxes.
2. Complainant,s name does not also appear in the payrolls of

CDLNGraphics Incorporated’s employees.
The Court does not agree with petitioner's insistence that his
being hired as respondent corporation's administrator and his designation as
such in intra-company correspondence proves that he is an employee of the
corporation. The fact alone that complainant was designated as a graphic
artist does not necessarily mean that he is an employee of respondents. Mere
title or designation in a corporation will not, by itself, determine the
existence of an employer-employee relationship. In this regard, even the
identification card which was issued to petitioner is not an adequate proof of
complainat's claim that he is respondents' employee. In addition,
complainant’s designation as a graphic artist neither disproves respondents'
contention that he was engaged only as a graphic artist.
The NLRC did not gravely abuse its discretion in ruling that
petitioner was respondent's regular employee and, hence, was illegally
dismissed by the latter. In this case, respondent disclaims any liability for
illegal dismissal, considering that, in the first place, no employer-employee
relationship existed between him and petitioner.
As a final point, it bears to reiterate that while the Constitution is committed

to the policy of social justice and the protection of the working class, it should not
be supposed that every labor dispute will be automatically decided in favor of
labor. Management also has its rights which are entitled to respect and
enforcement in the interest of simple fair play. Out of its concern for the less
privileged in life, the Court has inclined, more often than not, toward the worker
and upheld his cause in his conflicts with the employer. Such favoritism, however,
has not blinded the Court to the rule that justice is in every case for the deserving,
to be dispensed in the light of the established facts and the applicable law and
doctrine.
In the case of JESUS G. REYES vs.vGLAUCOMA RESEARCH

FOUNDATION, INC., EYE REFERRAL CENTER and MANUEL B.
AGULTO, G.R. No. 189255, June 17, 2015 the Supreme Court stated:
"x x x

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[Respondents'] power to approve or reject the organizational plans drawn by

[petitioner] cannot be the control contemplated in the "control test." It
is but logical that one who commissions another to do a piece of work should have
the right to accept or reject the product. The important factor to consider in the
"control test" is still the element of control over how the work itself is done, not
just the end result thereof. x x x"
In the case of BERNARD A. TENAZAS, JAIME M. FRANCISCO and

ISIDRO G. ENDRACA vs. R. VILLEGAS TAXI TRANSPORT and
ROMUALDO VILLEGAS the Supreme Court stated:
"In this case, however, Francisco failed to present any proof substantial
enough to establish his relationship with the respondents. He failed to present
documentary evidence like attendance logbook, payroll, SSS record or any
personnel file that could somehow depict his status as an employee. Anent his
claim that he was not issued with
employment records, he could have, at least, produced his social security

records which state his contributions, name and address of his employer, as his
co-petitioner Tenazas did. He could have also presented testimonial evidence
showing the respondents’ exercise of control over the means and methods by
which he undertakes his work. This is imperative in
light of the respondents’ denial of his employment and the claim of another taxi
operator, Emmanuel Villegas (Emmanuel), that he was his employer.
Specifically, in his Affidavit, Emmanuel alleged that Francisco was
employed as a spare driver in his taxi garage from January 2006 to
December 2006, a fact that the latter failed to deny or question in any of the
pleadings attached to the records of this case. The utter lack of evidence is fatal
to Francisco’s case especially in cases like his present
predicament when the law has been very lenient in not requiring any particular
form of evidence or manner of proving the presence of employer-employee
relationship."
Moreover, On the criteria of the selection and engagement of the employee,

complainant never filed any application for employment with respondent.
Complainant was not made to undergo any examination and interview to be
conducted by the respondent before he was finally hired.
For the payment of the wages of the complainant, it was stipulated that his
compensation would be based on the development or completion of each of the
project done. The payroll and pay records did not include the name of complainant
and he was not given the usual pay-slip to show his monthly gross compensation;
neither has the respondent withheld his taxes nor was he enrolled as an employee
of the respondent under the Social Security System Pag-ibig and Philhealth.
As regards the criteria of the power to dismiss, respondent is not in the

position to dismiss or sanction complainant in whatever manner because he is not
its regular employee.
With respect to the criteria of the power of control, respondent does not
exercise the power of control over complainant as to the means and method with
which to accomplish their work. There is no need for the complainant to observe
the regular working hours of the respondent, provided he would finish his tasked
and project before the deadline comes.

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In the case of SSS vs. Court of Appeals, 30 SCRA 210 [1969] the court
ruled that:
“Where the element of control is absent; where a person who works for
another does so more or less at his own pleasure and is not subject to
definite hours or conditions of work, and in turn is compensated according
to the result of his effort, the relationship of employer-employee does not
exist.”
II. Complainant Rallain Gandstiago is NOT a regular

employee of the respondent. He is a project employee.
Article 294 of the Labor Code, as amended, distinguishes a project-based

employee from a regular employee as follows:
“x x x.
“Article 280. Regular and Casual Employment.—the provisions of

written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business and trade of the employer, except where the employment
has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by

the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
x x x.”
In the case of OMNI HAULING SERVICES –versus- BON, G.R. No.

199388, September 3, 2014, the Court extensively discussed how to determine
whether an employee may be properly deemed project-based or regular, to wit:
“x x x.
“A project employee is assigned to a project which begins and ends at

determined or determinable times. Unlike regular employees who may
only be dismissed for just and/or authorized causes under the Labor
Code, the services of employees who are hired as project-based
employees, may be lawfully terminated at the completions of the
project.”
x x x.”
According to jurisprudence, the principal test for

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determining whether particular employees are properly characterised as

“project employees” as distinguished from “regular employees”, is
whether or not employees were assigned to carry out a “Specific
project or undertaking, the duration and scope of which were specified
at the time they were engaged for that project. The project could either
be (1.) a particular job or undertaking that is within the regular or usual
business of the employer company, but which is distinct and separate,
and identifiable as such, from the other undertakings of the company;
or (2.) a particular job or undertaking that is not within the regular
business of the corporation. In order to safeguard the rights of workers
against the arbitrary use of the word “project” to prevent employees
from attaining a regular status, employers claiming that their workers
are project-based employees should not only prove that the duration
and scope of the employment was specified at the time they were
engaged, but also, that there was indeed a project.
Verily, for an employee to be considered project-based, the
employer must show compliance with two (2) requisites, namely that:
(a.) the employee was assigned to carry out a specific project or
undertaking; and (b.) the duration and scope of which were specified at
the time they were engaged for such project.
In the instant case, there are so much evidence to show that the herein
respondent had adequately informed the herein complainant of his employment
status at the time of his engagement, as evidenced by the 1 st, 2nd, 3rd, and 4th, Project
Employment Contracts and herein marked and made an integral part hereof as
Annexes “1”, “2”, “3”, and “4”, respectively.
Also, the complainant was adequately informed of his employment status at

the time of his engagement in the 5 th project, as evidenced by the former’s 5 th
Project Employment Contract, marked and hereto attached as Annex “5”, which
provide that the complainant was hired in connection with the respondent’s very
important Foreign Account/Client, and that his position as a graphic artist was a
“project-based” and as such is co-terminus to the project.
Also in this instant case, the herein respondent had substantially complied
with the requisite when it expressly indicated in the complainant’s 5 th Project
Employment Contract that his position is co-terminus with the project.
On this score, it can ruled that the herein complainant was indeed a
projectbased employee and not a regular employee, considering that he was hired
only to carry out a specific undertaking, i.e. the 5 th Project; and the duration and
scope of such project was made known to him at the time of his engagement, i.e.
coterminus with the project.
Further, the work done by the herein complainant is not necessary and
indispensable in the line of work or operation of the respondent company.
It should be emphasized that the respondent company is a computer programming

company, which is primarily and limited only in making an original formulation of
computing problem to executable computer programs. On the other hand, the
herein complainant who is an independent contractor and who possesses a unique
skills and talent in graphic arts, was only engaged when the respondent’s client

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would request for an artistic product or service. It should be noted that not all of
the respondent’s clients would avail of the services of the complainant, the reason
that every time that the respondent would have a client that would request for an
artistic product, the same was being contracted out by the herein complainant.
Furthermore, although the herein complainant had been contracting with the
respondent for more than a year, when in fact, for five (5) years, his status as a
project employee remains unchanged.
In the case of Judy Dacuital, et.al. vs. L.M. Camus Engineering Corp.,
G.R. No. 176748, September 1, 2010, the Supreme Court held:
“x x x.
“A project employee is assigned to a project which begins and ends at

determined or determinable times. Employees who work under
different project employment contracts for several years DO NOT
automatically become regular employees; they can remain as project
employees regardless of the number of years they work. Length of
service is not a controlling factor in determining the nature of ones
employment. Their rehiring is only a natural consequence of the fact
that experienced construction workers are preferred. In fact,
employees who are members of a work pool from which a company
draws workers for deployment to its different projects do not become
regular employees by reason of that fact alone. The Court has
consistently held that members of a work pool can either be project
employees or regular employee.” x x x.”
In the instant case, there is an evidence that will show that herein parties in
this case had entered into a project employment agreement as evidenced by herein
attached Annexes “1” to “5”. The said Agreements well informed the complainant
of its nature and duration. Further, each and every expiration of the said Project
Agreements, the herein respondent was religiously reporting the said fact to the
Public Employment Office, pursuant to Department Order No. 19. A Copy of the
Certification issued by Public Employment Office is hereto attached and made an
integral part hereof as Annex “6”.
Since the complainant is now determined to be a project-based employee,

there is no ground then for him to claim that he was illegally dismissed as the
contract of the herein respondent with the foreign client in the 5 th project was
already been terminated. A copy of the Termination of Project Agreement Letter
issued by the respondent’ very important foreign account is hereto attached and
made an integral part hereof as Annex “7”;
II. Complainant’s act is equivalent to WILLFUL

DISOBEDIENCE as defined under just causes of termination
pursuant to labor code.
Just Causes for dismissal of employee may be defined as those lawful or

valid grounds for termination of employment which arise from causes directly
attributable to the fault or negligence of the erring employee. Just cause are usually

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serious or grave in nature and attended by wilful or wrongful intent or they

reflected adversely on the moral character of the employees.
Just causes and authorized causes. - As mentioned in Article 279, there are
two (2) kinds of causes or grounds to terminate employment by employer, to wit:
1. “Just causes” which refer to those instances enumerated under

Article 282 [Termination by employer] of the Labor Code.
2. “Authorized causes” which refer to those instances enumerated

under Articles 283 [Closure of establishment and reduction of personnel] and 284
[Disease as ground for termination] of the Labor Code.
Under Article 283, wilful disobedience to lawful orders is that the employees
are bound to follow reasonable and lawful orders of the employer which are in
connection with their work. Failure to do so may be ground for dismissal or other
disciplinary action.
In the case of Billy M. Realda vs. New AGe Graphics Inc and Julian L.
Mirasol, Jr., G.R. No. 192190, April 25, 2012 Supereme Court held:
"x x x.
"Willful disobedience requires the concurrence of at least two requisites: (1)

the employees assailed conduct must have been wilful or intentional, the
willingness being characterised by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee
and must pertain to the duties which he had been engaged to discharge." x x x."
In the instant case, there are so much evidence to show that the herein
complainant intentionally violated the order and specifications. In the
complainant’s fifth’s project, the respondent entrusted to the former their very
important foreign account and/or client. When the complainant was given the
opportunity to work on the same, he was given some strict specifications and was
specifically instructed to use the software and the special machine of the foreign
account/client in finishing his work. Unfortunately, the herein complainant
deliberately violated the order and specifications, and instead used the software and
the machine of the respondent in finishing his 5th project.
As a result thereof, the foreign account/client was dissatisfied with the

project, and for which reason, it filed herein respondent for breach of contract
because of wilful disobedience of the petitioner.
In Manebo vs. NLRC, G.R. No. 107721, January 10, 1994, the court
reiterated that in order that an employer may terminate an employee on the ground
of wilful disobedience to the employe's orders, regulations or instructions, it must
be established that the said orders, regulations or instructions are:
1.) reasonable and lawful;

2.) sufficiently known to the employer; and
3.) in connection with the duties which the employee has been
engaged to discharge.
Further, the termination of an employee was reasonable and lawful. As

stipulated on the said contract, the complainant is required to render his expertise

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in the graphic arts and was given some strict specifications and was specifically
instructed to use the software and the special machine of the foreign account/client.
However, complainant herein used the software and machine of the respondent.
Therefore, respondent has the adequate reason and lawful to terminate the
complainant.
In the case of Nathaniel N. Dongdon vs. Rapid Movers and

Forwarders Co., INC., and/or Nicanor E. Jao, Jr., G.R. No. 163431,
August 28, 2013 cited:
Article 282 of the Labor Code provides:

'Termination by Employer - An employee may terminate an employment for
any of the following cuases:
(a) Serious misconduct or willful disobedience by the employee of the

lawfull orders of his employer or representative in connection with his work;
x x x"
The constitutional protection afforded to labor does not condone wrongdoing
by the employee; and an employer's power to discipline its workers is inherent to
it. As honesty is always the best policy, the court is convinced that the ruling of
the Labor Arbiter is more in accord with the spirit of the Labor Code. "The
Constitutional policy of providing full protection to labor is not intended to
oppress or destroy management (Capili vs. NLRC, 270 SCRA
488[1997]."Also, in Atlas Fertilizer Corporation v. NLRC, 273 CSRA 549
[1997], the Highest Magistrate declared that "The law in protecting the rights
of the labourers, authorises neither oppression nor self-destruction of the
employer."
x x x"
VI. Due process of termination was observed to herein complainant.
Due process as provided Under section 1, Article III [Bill of Rights], 1987
Constitution “no person shall be deprived of life, liberty or property without due
process of law, nor shall any person be denied the equal protection of the laws”
(Section 1, Article III [Bill of Rights], 1987 Constitution), however, the 2004 case
of Agabon vs. NLRC, [G. R. No. 158693 November 17, 2004], distinguished
constitutional due process and statutory due process, to wit:
“To be sure, the Due Process Clause in Article III, Section 1 of the
Constitution embodies a system of rights based on moral principles so
deeply imbedded in the traditions and feelings of our people as to be
deemed fundamental to a civilized society as conceived by our entire
history. Due process is that which comports with the deepest notions
of what is fair and right and just. It is a constitutional restraint on the
legislative as well as on the executive and judicial powers of the
government provided by the Bill of Rights.
“Due process under the Labor Code, like Constitutional due process,
has two aspects: substantive, i.e., the valid and authorized causes of
employment termination under the Labor Code; and procedural, i.e.,
the manner of dismissal. Procedural due process requirements for
dismissal are found in the Implementing Rules of P.D. 442, as

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amended, otherwise known as the Labor Code of the Philippines in

Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and
10. (Department Order No. 9 took effect on 21 June 1997. Department
Order No. 10 took effect on 22 June 1997). Breaches of these due
process requirements violate the Labor Code. Therefore, statutory due
process should be differentiated from failure to comply with
constitutional due process.
“Constitutional due process protects the individual from the government and
assures him of his rights in criminal, civil or administrative proceedings; while
statutory due process found in the Labor Code and Implementing Rules protects
employees from being unjustly terminated without just cause after notice and
hearing.”
For termination based on just causes under Article 282. Due process
under Article 282 means compliance with the following requirements of two (2)
notices and a hearing:
(a) A written notice (first notice) served on the employee specifying

theground or grounds for termination, and giving to said employee reasonable
opportunity to explain his side;
(b) A hearing or conference (or at least an opportunity to be heard)

duringwhich the employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and
(c) A written notice of termination (second notice) served on the

employee indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination. (PNB vs. Cabansag, G. R. No.
157010, June 21, 2005; Millares vs. PLDT, G. R. No. 154078, May 6, 2005).
These requirements are mandatory, non-compliance with which renders any

judgment reached by management void and inexistent. (Skippers Pacific, Inc. vs.
Mira, G. R. No. 144314, Nov. 21, 2002; Concorde Hotel vs. CA, G. R. No.
144089, Aug. 9, 2001).
In the instant case the respondent CDLN Graphics Incorporated sent a letter
to the complainant a Notice to explain in writing within Five (5) days why he had
not followed the specifications directed to him, which caused irreparable work that
he had done in his 5th project, and damage and injury to the respondent, thereby
complying with the first requisite.
Despite the opportunity given to the complainant, he did not comply nor file
any written explanation. The respondent corporation in sending a letter of notice to
the complainant to explain his failure to comply with the instruction given by the
said corporation, indicates an opportunity for the complainant to explain his actions
during the 5th Project Employment Contract which caused the failure of the project
leading to the respondent Corporation to be sued by the foreign company, thus the
2nd requisite was complied with.
And lastly the respondent was then constrained to send a Notice which
terminates their 5th Project Employment Contract. A Copy of the Notice of
Termination provided in Annex “9”serves as a written notice of termination

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(second notice) served on the employee indicating that upon due consideration of
all the circumstances, grounds have been established to justify his termination.
Therefore the termination of employment of herein complainant was done in

accordance with due process.
V. Assuming arguendo that the herein complainant is a Regular

Employee, his termination is legal, hence, he cannot claim that he
was illegally dismissed.
In Bascon vs Court of Appeals, G.R. No. 144899, February 5, 2004, 422

SCRA 122, the Court outlined the elements of gross insubordination, as follows:
“x x x.
“However, wilful disobedience of the employers lawful orders, as a just

cause for dismissal of an employee, envisages the concurrence of at least two
requisite: (1.) The employees assailed conduct must have been wilful, that is,
characterized by a wrongful and perverse attitude; and (2.) The order violated
must have been reasonable, lawful, made known to the employee and must pertain
to the duties which he had been engaged to discharge.” x x x.”
In the instant case, the 5th Project Employment Contract was entered into
between the complainant and the respondent. The same contract contains a proviso,
that in the pursuit of the same, the complainant was given some strict specifications
and was specifically intruacted to use the software and the special machine of the
foreign account/client. The said proviso is reasonable, legal, and had been
expressly made known to the complainant before he was engaged to discharge.
However, for no known reason, the herein complainant deliberately violated

the said strict order and specifications, and instead used the software and the
machine of the respondent in finishing the 5 th project. The said infraction of the
respondent is a ground for dismissal based on the respondent’s employees manual.
Such deliberate act of the herein complainant causes the respondent to lose
its foreign account/client, and worst, it is now facing a lawsuit for damages caused
by the complainant.
Because of the gross insubordination made by the herein complainant, the

respondent sent a Notice to Explain (Annex “8”) addressed to and which was duly
received by the former. He was thus given a period of five (5) days from receipt
thereof to submit his answer thereto why his act should not be considered as gross
insubordination.
Unfortunately for him, and despite the opportunity given to the complainant,
he did not comply nor file any written explanation thereto. That based on the
foregoing, the respondent made a deliberation as to the gross insubordination of the
complainant, wherein a decision was laid finding the complainant to have
committed gross insubordination in dealing with the 5 th project with the foreign
account/client. Thus, a notice which terminates his 5 th Project Employment
Contract was sent and received by him. A copy of the Notice of termination is
hereto attached and made an integral part hereof as Annex “9”.

lOMoARcPSD|31058984
PRAYER
WHEREFORE, premises considered, it is most respectfully prayed unto this

Honorable Tribunal, that judgment be rendered, by DISMISSING the instant case
for lack of merit to wit:
That herein Complainant RALLAIN GANDSTIAGO is Not considered a

regular employee of the herein respondent, hence, a Project Employee.
Furthermore, Due Process and just causes of termination of the Complainant

pursuant to labor code was complied with.
The judgment be issued declaring that the Complainant has been LEGALLY
DISMISSED by herein Respondent.
Other reliefs that are just and equitable are likewise prayed for.
May 4, 2018, Baguio City.
The Law Firm of Group 3, Section 1E

University of the Cordilleras
Gov. Pack Road, Baguio City
Counsel for the Respondent
By:
Atty. Dao Ming Go

Roll No.
XXXXX
IBP No. 12345
PTR No. 678910
MCLE Compliance No.: 54321
The National Labor Relations Commission

Baguio City
Kindly submit the foregoing Position Paper for the consideration of the
Honorable Labor Arbiter immediately upon receipt hereof.
ATTY DMG
Copy furnished:
RALLAIN GANDSTIAGO
Complainant
#7 Brgy. Lualhati, Baguio City.
VERIFICATION AND CERTIFICATION AGAINST FORUM SHOPPING
I, Clifford Gates, of legal age, single, and with office address at CLDN
Graphics Incorporated No. 01, Upper Session Road, Baguio City, after having
sworn to in accordance with the law, do hereby depose and say:
That I am the President and the authorized representative of the respondent

company in the above-entitled case;

lOMoARcPSD|31058984
That I have caused the preparation of the foregoing Position Paper:
That the contents thereof has been read and translated to me in a dialect
known to and understood by me;
That I have read all the allegations contained therein and they are true and
correct according to my personal knowledge and belief;
That I have not commenced any other action or proceedings involving the
same issues to the Supreme Court, The Court of Appeals, or any other Tribunal or
agency;
That to the best of our knowledge, no such other proceeding is or are

pending in the Supreme Court, the Court of Appeals or any other tribunal or
agency;
That if I should there after learned that a similar action or proceedings has
thus been filed, or is pending before the mentioned entities, we undertake to report
the said fact, within five (5) days therefrom to this honorable entity.
Further Affiant sayeth naught.

4 May 2018, Baguio City
CLIFFORD GATES
Affiant
SUBSCRIBED AND SWORN to before me this 6 th day of April 2018. I

certify that I personally examined the herein affiant, after I explained and they have
read and understood the contents of the herein foregoing, as true according to their
personal knowledge, and that the same were signed as voluntarily.
Atty. DAO MING GO

Notary Public
Doc No.:____
Page No. ____
Book No. ____

lOMoARcPSD|31058984
PROJECT CONTRACT OF EMPLOYMENT
This employment agreement (the Agreement) is entered into and executed on

January 2013 at Baguio City, by and between the following:
CLDN Graphics Incorporated, a corporation duly organized and existing

under the laws of the Republic of the Philippines, with principal place of business
at No. 1, Upper Session Road, Baguio City, as represented herein by its President
and CEO, Clifford Gates, hereinafter referred to as the EMPLOYER;
-and-
MR. RALLAIN GANDSTIAGO, of legal age, with address at No. 7, Brgy.

Lualhati, Baguio City, hereinafter referred to as the EMPLOYEE.
WITNESSETH
WHEREAS, the EMPLOYER is engaged in the business of Computer

Programming, and is in need of a Graphic Artist, primarily for the purpose of
complying its obligation, in connection with its specific project and undertaking
with XYZ Corporation, which is to be completed after all the deliverableshave
been made and/or otherwise pre-terminated by the said client, the XYZ
Corporation
WHEREAS the EMPLOYEE guarantees, declares, and warrants that he has

the necessary qualifications and is competent for the said position, as well as
expressly acknowledges and consents to this casual employment arrangement.
WHEREAS due to the above representations, the EMPLOYER offers the

EMPLOYEE the above-mentioned position on a project-based
NOW Therefore, for and in consideration of the foregoing premises, the

parties hereby agree as follows:
• Date of Employment: January 5, 2013;
• Duration of Employment:
This agreement will continue until it terminates on the earliest of any of the
following dates or events:
• On June 5, 2013 or;
• Upon completion of the following project or upon the
completion of the purpose or task.
3.)Job Title: Graphic Artist
• Brief Job Description: To work on the undertaking with

the XYZ Corporation, and would be mostly responsible for designing,
coding, and modifying websites, from layout to functions and
according to the EMPLOYER’s and /or client’s specification.
• Salary/Wage: ___
• Time of Payment: on weekly basis
• Hours of work: the employee’s hours of work shall be”
• Monday to Friday, from 8AM to 5PM
• EMPLOYER Procedures: EMPLOYEE is required to

lOMoARcPSD|31058984
comply with the Employer’s Disciplinary Code and Procedure and

Grievance Procedure, as well as all other rules, polices, and procedures that
may be introduced from time to time. Copies of these documents is
furnished and received by the employee upon execution hereof.
• Termination: Notwithstanding anything to the contrary
and subject to the provisions of the existing labor laws, this contract
may be terminated:
• Without Notice, on expiry of the fixed term of
employment;
• Prior to the expiry of the temporary purpose for which
the employee has been employed is due to come to an end, by either
party giving the other written notice one (1) week during the first six
(6) months of employment,
• Subject to the period above, by the Employer, in the
event of Employee’s incapacity or due to operational requirements.
• Summarily, if the Employee is found guilty of a serious
disciplinary transgression; or
• With or without notice for any reason recognised by law
assufficient.
The EMPLOYEE confirms that these conditions have been explained to him/her
and that he/she understands the contents hereof. The Employee acknowledges
having received a copy of this contract.
IN Witness whereof, the parties to this Agreement, have executed on the days an
dates set out hereinbelow, and certify that they have read, understood, and agrred to
the terms and conditions of this Agreement as set forth herein.
Signed this 5th day of January 2013, in Baguio City.
________________________ _____________________
CLDN Graphics Incorporated Mr. RALLAIN GANDSTIAGO
Rep. by. Pres.CEO Mr. Gates EMPLOYEE
EMPLOYER
2nd PROJECT CONTRACT OF EMPLOYMENT
This employment agreement (the Agreement) is entered into and executed on June
6, 2013 at Baguio City, by and between the following:

-and-

lOMoARcPSD|31058984

WITNESSETH

with Mala Prohibita Corporation, which is to be completed after all the
deliverableshave been made and/or otherwise pre-terminated by the said client, the
Mala Prohibita Corporation.



1.) Date of Employment: June 6, 2013;
2.) Duration of Employment:

a. On November 29, 2014 or;
b. Upon completion of the following project or upon the completion of the
purpose or task.
3.) Brief Job Description: To work on the undertaking with the XYZ
Corporation, and would be mostly responsible for designing, coding, and
modifying websites, from layout to functions and according to the
EMPLOYER’s and /or client’s specification.
4.) Salary/Wage: ___
5.) Time of Payment: on weekly basis
6.) Hours of work: the employee’s hours of work shall be”
a.) Monday to Friday, from 8AM to 5PM
7.) EMPLOYER Procedures: EMPLOYEE is required to comply with the
Employer’s Disciplinary Code and Procedure and Grievance Procedure, as well as
all other rules, polices, and procedures that may be introduced from time to time.
Copies of these documents is furnished and received by the employee upon
execution hereof.
8.) Termination: Notwithstanding anything to the contrary and subject to the
provisions of the existing labor laws, this contract may be terminated: a.) Without
Notice, on expiry of the fixed term of employment;
b.) Prior to the expiry of the temporary purpose for which the employee has
been employed is due to come to an end, by either party giving the other
written notice one (1) week during the first six (6) months of employment,

lOMoARcPSD|31058984
c.) Subject to the period above, by the Employer, in the event of Employee’s
incapacity or due to operational requirements.
d.) Summarily, if the Employee is found guilty of a serious disciplinary
transgression; or
e.) With or without notice for any reason recognised by law as sufficient.
IN Witness whereof, the parties to this Agreement, have executed on the days and
Signed this 6th Day of June 2013 in Baguio City.
________________________ _____________________
EMPLOYER
3rd PROJECT CONTRACT OF EMPLOYMENT
This employment agreement (the Agreement) is entered into and executed on 30 th

November 2014 at Baguio City, by and between the following:

-and-

WITNESSETH

with Bigtime Corporation, which is to be completed after all the deliverableshave
been made and/or otherwise pre-terminated by the said client, the Bigtime
Corporation


lOMoARcPSD|31058984


1.) Date of Employment: November 30, 2014;

a. On December 4, 2016 or;
purpose or task.
execution hereof.
transgression; or
Signed this 30th day of November 2014 in Baguio City.

________________________ _____________________

lOMoARcPSD|31058984

EMPLOYER
4th PROJECT CONTRACT OF EMPLOYMENT
This employment agreement (the Agreement) is entered into and executed on

December 5, 2016 at Baguio City, by and between the following:

-and-

WITNESSETH

with Mother Goose Corporation, which is to be completed after all the
deliverableshave been made and/or otherwise pre-terminated by the said client, the
Mother Goose Corporation



1.) Date of Employment: December 5, 2016;

a. On June 22, 2017 or;
purpose or task.

lOMoARcPSD|31058984

execution hereof.
transgression; or
Signed this 5th day of December 2016 in Baguio City.
______________________ _____________________
EMPLOYER
5th PROJECT CONTRACT OF EMPLOYMENT
This employment agreement (the Agreement) is entered into and executed on June
23, 2017 at Baguio City, by and between the following:


lOMoARcPSD|31058984
-and-

WITNESSETH

with ONE-TWO-THREE Corporation, which is to be completed after all the
deliverables have been made and/or otherwise pre-terminated by the said client, the
ONE-TWO-THREE Corporation.



1.) Date of Employment: June 23, 2017;

a. On February 23, 2018 or;
purpose or task.
execution hereof.

lOMoARcPSD|31058984
transgression; or
Signed this 23rd day of June 2017 in Baguio City.
________________________ _____________________
EMPLOYER
Republic of the Philippines PUBLIC EMPLOYMENT

OFFICE Department of Labor and Employment Baguio City
CERTIFICATION
This is to CERTIFY that based on the available records of this Office and
Department, CDLN GRAPHICS, INCORPORATED, with business address at No.
01, Upper Session Road, Baguio City, had made a report regarding the termination,
among others, of their project based employee, to wit.
Name of the Employee Address Position Date of

Termination/Reporting
1.Rallain Gandstiago # 7 Lualhati, Baguio Graphic Artist June 5, 2013

2. Rallain
Gandstiago # 7
Lualhati, Baguio
Graphic Artist
November
29, 2014
3.Rallain Gandstiago # 7 Lualhati, Baguio Graphic Artist December 4, 2016
4.Rallain Gandstiago # 7 Lualhati, Baguio Graphic Artist June 22, 2017
5.Rallain Gandstiago # 7 Lualhati, Baguio Graphic Artist February 23, 2018

lOMoARcPSD|31058984
This Certification is issued upon the request of Mr. Clifford Gates, President
of Graphics Inc., and for whatever that this certification may serve.
April 3, 2018, Baguio City
RHOME E. ROH
Records Chief
Public Employment Office
ONE-TWO-THREE Corporation
69 Session Road, Baguio City
CLDN Graphics Incorporated

No. 01 Upper Session Road, Baguio City
Rep. by its Pres./CEO Mr. Gates
Subject: NOTICE of TERMINATION OF CONTRACT
Dear CLDN Graphic,
We Inform you that we will no longer require your services as of February

25, 2018. With this notification, we comply with the minimum notice period
required by our agreement. Your company has provided us with good service in the
past, however, we decided to terminate our business contract due your failure to
strictly comply the specifications agreed in our last transaction.
Please confirm the receipt of this letter as terminaton of our contract and the
closing of our account.
Very Truly Yours.
THE PRESIDENT
ONE-TWO-THREE Corporation

February 1, 2018

lOMoARcPSD|31058984
Mr.Rallain Gandstiago
Graphic Artist
No. 7, Brgy. Lualhati, Baguio City
Subject: NOTICE TO EXPLAIN
Dear Mr. GANDSTIAGO,
Please submit your written explanation to the disciplinary matters being

charged against you described and narrated below within FIVE (5) days from the
date that this Notice was served upon you.
Also, please attend the conference to be held on March 1, 2018, at 10:00

o’clock in the morning at the company’s function hall, as this will give you
additional opportunity to verbally explain your side and present your witnesses and
other evidence regarding your gross insubordination.
You have the right to be represented by any of your counsel or person of your
choice to assist you.
In the event that you are found guilty of the said charge, the company may
terminate your from employment and for the imposition of the appropriate
penalties.
This Notice consist of One Page with attachments.
Kindly give this matter your priority attention.
Very truly yours.
MS. Maggie Anda

HR Manager.

March 31, 2018
Mr.Rallain Gandstiago
Graphic Artist
No. 7, Brgy. Lualhati, Baguio City
Subject: NOTICE OF DISMISSAL
Dear Mr. GANDSTIAGO,
After a thorough investigation and examination of all the evidences,

evaluations, and reports submitted, you are found guilty of Gross Insubordination.
The foregoing act constitutes a just cause to terminate your employment.

lOMoARcPSD|31058984
As such, we regret to inform you that your employment with the company is
hereby deemed terminated effective immediately upon receipt of this Notice.
Very truly yours.
MS. Maggie Anda

HR Manager.

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Republic of the Philippines

NLRC RAB-CAR Case # 01-23456-18 -

CDLN GRAPHICS, INCORPORATED,

RESPONDENT Company, by counsel, most respectfully submits this

Complainant Rallain Gandstiago (Complainant, for brevity), is of legal age,

Respondent CDLN Graphics Incorporated (Respondent for Brevity),

1. Respondent is a corporation engaged in, among other things,

2. On the other hand, complainant is an independent contractor,

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3. That sometime in January 2013, respondent engages the herein

4. As stipulated on the said contract, the complainant is required to

5. It was also agreed that the herein complainant would not be

6. The complainant, in pursuit of his contract with the respondent,

7. On June 2013, the Project Employment Contract executed by

9. In the complainant’s fifth’s project, the respondent entrusted to

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same, he was given some strict specifications and was

10. As a result thereof, the foreign account/client was dissatisfied

11. The complainant received a Notice to Explain sent to him by the

12. Despite the opportunity given to the complainant, he did not

1. Whether or not there is an employer-employee relationship

2. Whether or not Complainant RALLAIN GANDSTIAGO is

3. Whether or not Complainant’s act is equivalent to WILLFUL

4. Whether or not due process of termination was observed

5. Whether or not the Complainant is entitled to the reliefs prayed

I. In determining the existence of an employer-employee relationship,

(1) the selection and engagement of the employee;

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(4) Most determinative among these factors is the so-called

Of the above-mentioned elements, the right of control test is considered as

[Respondents'] power to approve or reject the organizational plans drawn by

As to the "control test", the following indubitably reveal that respondents

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taking into consideration the totality of circumstances surrounding the true

There is likewise substantial evidence to support that Complainant

1. Complainant’s name does not appear in the list of employees

2. Complainant,s name does not also appear in the payrolls of

As a final point, it bears to reiterate that while the Constitution is committed

In the case of JESUS G. REYES vs.vGLAUCOMA RESEARCH

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[Respondents'] power to approve or reject the organizational plans drawn by

In the case of BERNARD A. TENAZAS, JAIME M. FRANCISCO and

employment records, he could have, at least, produced his social security

Moreover, On the criteria of the selection and engagement of the employee,

As regards the criteria of the power to dismiss, respondent is not in the

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II. Complainant Rallain Gandstiago is NOT a regular

Article 294 of the Labor Code, as amended, distinguishes a project-based

“Article 280. Regular and Casual Employment.—the provisions of

An employment shall be deemed to be casual if it is not covered by

In the case of OMNI HAULING SERVICES –versus- BON, G.R. No.

“A project employee is assigned to a project which begins and ends at

According to jurisprudence, the principal test for

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determining whether particular employees are properly characterised as

Verily, for an employee to be considered project-based, the

Also, the complainant was adequately informed of his employment status at

It should be emphasized that the respondent company is a computer programming

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“A project employee is assigned to a project which begins and ends at

Since the complainant is now determined to be a project-based employee,

II. Complainant’s act is equivalent to WILLFUL