Labor Law Review |Sobrevinas | August December 2014|Page

LEGEND HOTEL (MANILA) vs.

HERNANI S. REALUYO
July 18, 2012
Ponente: Bersamin, J.
Digest Maker: John Michael Gabriel Vida
SUMMARY:
Realuyo/Roa was a ianist in t!e emloy o" Legen#$ wit! t!e
restaurant manager o" Legen# rovi#ing control over t!e
manner o" wor% o" Realuyo& 'ventually$ Realuyo was
#ismisse#$ w!ic! romte# !im to (le an illegal #ismissal
comlaint& )!e *ourt rule# t!at an 'R+'' relations!i e,ists
an# enumerate# t!e "actors involve# in t!e -our+-ol# test$
w!ic! is t!e yar#stic% use# to #etermine t!e e,istence o" an
'R+'' relations!i use# by t!e *ourt&
DOCTRINE:
)!e *ourt enumerate# t!e -our+-ol# #octrine use# to
#etermine w!et!er or not an 'R+'' relations!i e,ists& )!e
"actors to consi#er are .S/eD'01
a& Selection owers o" t!e emloyer
b& /age ayment o" t!e emloyer
c& Dismissal owers o" t!e emloyer
#& 'mloyee control or t!e control test
FACTS:
)!is is a labor case involving Realuyo$ wit! stage name 2oey Roa$
a ianist emloye# by Legen# 3otel& Realuyo (le# a comlaint "or
allege# 4LP$ constructive illegal #ismissal$ an# un#erayment o"
remium ay "or !oli#ays$ searation ay$ service incentive leave
ay$ an# 15
t!
mont! ay$ wit! "urt!er rayer "or attorney6s "ees
an# moral an# e,emlary #amages&
Realuyo averre# t!at !e !a# wor%e# as a ianist "or t!e Legen#
3otel6s )anglaw Restaurant "rom Setember 1772$ starting wit!
an initial rate o" P400/nig!t$ eventually increasing to P890/nig!t&
3e coul# not c!oose t!e time o" !is er"ormance$ as it was (,e#
"rom 8100 m to 10100 m "or 5+: times er wee%& 3e also state#
t!at t!e Legen# 3otel6s restaurant manager re;uire# !im to
"ollow t!e !otel moti"$ an# t!at !e !a# been sub<ecte# to t!e
rules on emloyees6 reresentation c!ec%s an# c!its =w!ic! was
a rivilege given to emloyees>&
?n 2uly 7$ 1777$ !owever$ !otel management in"orme# Realuyo
t!at$ #ue to cost+cutting measures un#erta%en by t!e !otel$ !is
services woul# no longer be re;uire# e@ective 2uly 50$ 1777 =only
21 #ays a"ter in"orming !im o" !is #ismissal>& Realuyo insiste#$
!owever$ t!at t!e !otel was lucratively oerating at t!e time o"
(ling o" t!e comlaint&
An its #e"ense$ Legen# #enie# t!e e,istence o" any emloyer+
emloyee ='R+''> relations!i wit! Realuyo$ an# t!at !e was only
a talent engage# to rovi#e live music at Legen#6s Ba#ison
*o@ee S!o "or 5 !ours/#ay on 2 #ays/wee%& Legen# also averre#
t!at$ #ue to t!e economic crisis$ management was constraine# to
#isense wit! !is services&
)!e Labor Arbiter =LA> #ismisse# t!e comlaint "or lac% o" merit
uon t!e (n#ing t!at t!ere was no 'R+'' relations!i between
Realuyo an# Legen#& )!is (n#ing was base# on t!e a#mission o"
Realuyo on a letter stating t!at w!at !e receive# "rom Legen# in
e,c!ange "or !is services was a Ctalent "eeD an# not a salary& )!is
was rein"orce# by t!e "act t!at Realuyo receive# !is salary
nig!tly$ unli%e t!e ot!er emloyees w!o receive# t!eir salaries
mont!ly& 4on aeal$ t!e ELR* aFrme# t!e same&
)!e *A$ !owever$ reverse# t!e LA an# ELR*$ stating t!at t!e "our
elements o" 'R+'' relations!i e,ists$ most imortantly t!e
element o" emloyee control in t!e "orm o" t!e suervision an#
control e,ercise# by t!e restaurant manager o" Legen#&
ISSUES/HELD:
1& /?E Realuyo was an emloyee o" Legen# 3otel& YES$ 'R+''
relations!i e,iste# between t!e arties&
1
Labor Law Review |Sobrevinas | August December 2014|Page
2& /?E Realuyo was vali#ly terminate#&
RATIO:
1& )!e *ourt "oun# "or Realuyo in stating t!at an 'R+''
relations!i in#ee# e,iste# between t!e arties& )!e *ourt
enumerate# t!e "our+"ol# test "actors$ namely1
Power to select t!e emloyee
Payment o" emloyee6s wages
Power to #ismiss t!e emloyee
',ercise o" control over t!e met!o#s an# results by
w!ic! t!e wor% o" t!e emloyee is accomlis!e#
=emloyee control>
Alying t!ese "actors to t!e case at !an#$ t!e *ourt "oun#
t!at Realuyo was in#ee# Legen# 3otel6s emloyee& 3e was
emloye# as a ianist in t!e Ba#ison *o@ee S!o an#
)anglaw Restaurant "rom Setember 1772 until 2uly 1777&
Legen# was "oun# to !ave wiel#e# t!e ower o" selection
w!en it entere# into t!e service contract wit! Realuyo$ as well
as e,ress written recommen#ations by t!e restaurant
manager "or increase o" remuneration&
-urt!er to t!is$ t!e *ourt ointe# out t!at$ #esite t!e
#enomination o" t!e receive# remuneration as Ctalent "eesD$
t!ese remunerations were consi#ere# as inclu#e# in t!e term
CwageD in t!e sense an# conte,t o" t!e Labor *o#e$
regar#less o" t!e #esignation& As state# in Article 78="> o" t!e
Labor *o#e1
CG/age ai# to any emloyee s!all mean t!e remuneration or earnings$
!owever #esignate#$ caable o" being e,resse# in terms o" money$
w!et!er (,e# or ascertaine# on a time$ tas%$ iece$ or commission basis$
or ot!er met!o# o" calculating t!e same$ w!ic! is ayable by an
emloyer to an emloyee un#er a written or unwritten contract o"
emloyment "or wor% #one or to be #one$ or "or services ren#ere# or to
be ren#ere#$ an# inclu#es t!e "air an# reasonable value$ as #etermine#
by t!e Secretary o" Labor$ o" boar#$ lo#ging$ or ot!er "acilities
customarily "urnis!e# by t!e emloyer to t!e emloyee&D
-rom t!e case$ it was clear t!at Realuyo in#ee# receive#
comensation "or services ren#ere# as t!e !otel6s ianist&
Also$ t!e "act t!at Realuyo wor%e# "or less t!an H !ours/#ay
was o" no conse;uence an# #i# not #etract "rom (n#ing "or
t!e e,istence o" t!e 'R+'' relations!i& An rovi#ing t!at t!e
Inormal !ours o" wor% o" any emloyee s!all not e,cee# eig!t
=H> !ours a #ay$I Article H5 o" t!e Labor *o#e only set a
ma,imum o" number o" !ours as Inormal !ours o" wor%I but
#i# not ro!ibit wor% o" less t!an eig!t !ours&
)!ir#ly$ t!e ower o" control over t!e wor% o" Realuyo$
consi#ere# as t!e most signi(cant #eterminant o" t!e
e,istence o" an 'R+'' relations!i$ was seen on t!e "ollowing
"acts1
3e coul# not c!oose t!e time o" !is er"ormance$
w!ic! etitioners !a# (,e# "rom 8100 m to 10100 m$
t!ree to si, times a wee%J
3e coul# not c!oose t!e lace o" !is er"ormanceJ
)!e restaurant6s manager re;uire# !im at certain
times to er"orm only )agalog songs or music$ or to
wear barong )agalog to con"orm to t!e -iliiniana
moti"J an#
3e was sub<ecte# to t!e rules on emloyees6
reresentation c!ec% an# c!its$ a rivilege grante# to
ot!er emloyees&
At must be note# t!at t!e emloyer nee# not actually
suervise t!e er"ormance o" #uties by t!e emloyee$ "or it
suFce# t!at t!e emloyer !as t!e rig!t to wiel# t!at ower&
-inally$ t!e *ourt ointe# out t!at Legen# ossesse# t!e
ower to #ismiss Realuyo in t!at t!e memoran#um in"orming
Realuyo o" t!e #iscontinuance o" !is service because o" t!e
resent business or (nancial con#ition o" Legen# s!owe# t!at
t!e latter !a# t!e ower to #ismiss !im "rom emloyment&
2
Labor Law Review |Sobrevinas | August December 2014|Page
2& At must be note# t!at retrenc!ment is one o" t!e aut!oriKe#
causes "or t!e #ismissal o" emloyees recogniKe# by t!e
Labor *o#e& At is a management rerogative resorte# to by
emloyers to avoi# or to minimiKe business losses& Article 2H5
o" t!e Labor *o#e states1
Article 2H5& *losure o" establis!ment an# re#uction o" ersonnel& )!e
emloyer may also terminate t!e emloyment o" any emloyee #ue to
t!e installation o" labor+saving #evices$ re#un#ancy$ retrenc!ment to
revent losses or t!e closing or cessation o" oeration o" t!e
establis!ment or un#erta%ing unless t!e closing is "or t!e urose o"
circumventing t!e rovisions o" t!is )itle$ by serving a written notice on
t!e wor%ers an# t!e Binistry o" Labor an# 'mloyment at least one =1>
mont! be"ore t!e inten#e# #ate t!ereo"& ,,,& An case o" retrenc!ment to
revent losses an# in cases o" closures or cessation o" oerations o"
establis!ment or un#erta%ing not #ue to serious business losses or
(nancial reverses$ t!e searation ay s!all be e;uivalent to one =1>
mont! ay or at least one+!al" =1/2> mont! ay "or every year o" service$
w!ic!ever is !ig!er& A "raction o" at least si, =:> mont!s s!all be
consi#ere# one =1> w!ole year&
)!e *ourt !as rovi#e# t!e stan#ar#s t!at an emloyer
s!oul# meet to <usti"y retrenc!ment$ namely1
=a> )!e e,ecte# losses s!oul# be substantial an# not
merely de minimis in e,tentJ
=b> )!e substantial losses are!en#e# must be
reasonably imminentJ
=c> )!e retrenc!ment must be reasonably necessary an#
li%ely to e@ectively revent t!e e,ecte# lossesJ an#
=#> )!e allege# losses$ i" alrea#y incurre#$ an# t!e
e,ecte# imminent losses soug!t to be "orestalle# must
be rove# by suFcient an# convincing evi#ence&
-rom t!e case itsel"$ t!e *ourt conclu#e# t!at t!e bur#en o"
roo" o" Legen# to rove t!at t!e #ismissal was "or a vali# or
aut!oriKe# cause was not given by Legen#$ as it #i# not
submit evi#ence o" t!e losses to its business oerations an#
t!e economic c!aos it woul# imminently su@er& )!e
statements regar#ing Realuyo6s termination #ue to Cresent
business/(nancial con#itionD were consi#ere# as insuFcient
to s!ow a vali# retrenc!ment& As a result$ t!e *ourt cannot
allow t!e termination o" Realuyo #ue to retrenc!ment&
3owever$ t!e lase o" time since t!e retrenc!ment may !ave
ma#e a return to t!e <ob as un"easible$ t!ere"ore t!e *ourt
or#ere# Legen# to ay searation ay at t!e rate o" 1 mont!
ay "or every year o" service ren#ere#$ as well as "ull
bac%wages&
5