Case Digests:

WACK WACK GOLF & COUNTRY CLUB (petitioner) vs NATIONAL LABOR RELATIONS
COMMISSION (NLRC; respondents)
(G.R. No. 149793; April 15, 2005); CALLEJO, SR., J.
Facts:
A fire broke out in the clubhouse of the Wack Wack Golf & Country Club on
November 29, 1996. In view of the reconstruction, Wack Wacks management
suspends the operation of its Food & Beverage Dept (F&B). The Wack Wack Golf
Empolyees Union branded the suspension of work as a form of union-busting,
prompting them to file a notice of strike with DOLE. Several meetings between the
officers of Wack Wack and the Union were held until the parties entered into an
amicable settlement.
An agreement was forged between management and the union, whereby a special
retirement package for interested Wack Wack employees, was offered. One of the
stipulations in the agreement (Sec. 4) was that those employees who opted for this
retirement package was to be given priority in employment by concessionaires or
contractors, upon full resumption of operations by the Club. Union president
Crisanto Baluyot Sr. and private respondents Carmencita Dominguez and Martina
Cagasan were few of the employees who availed the retirement package.
On October 15, 1997, Wack Wack entered into a Management Contract with private
respondent Business Staffing and Management, Inc. (BSMI), which was to provide
management services in different areas of operation within Wack Wack. Pursuant to
the agreement between the Union and Wack Wack Management, the former
employees of Wack Wack were given priority in employment with BSMI. Baluyot,
Dominguez and Cagasan subsequently applied and was probationally hired by BSMI.
However, when Wack Wack contracted several other management companies to
handle other areas of operations, BSMI undertook a manpower evaluation to
streamline its operations. Upon assessment, BSMI found that the positions taken by
Dominguez and Cagasan (Administration Dept. and Personnel Officer) were
redundant, while the position of Baluyot (Chief Porter) was one of the positions that
were recommended to be abolished. Thus, the services of the three were
terminated. In response, the three employees filed their respective complaints with
the National Labor Relations Commission (NLRC) for illegal dismissal and damages
against Wack Wack and BSMI. NLRC found that the dismissal of Dominguez and
Cagasan was for a valid and authorized cause, and dismissed their complaints;
however, the NLRC found that Baluyots termination was illegal.
Dominguez, Cagasan and BSMI appealed the NLRCs decision. On September 27,
2000, NLRC, in its decision, orders the reinstatement of Dominguez and Cagasan to
their positions in Wack Wack, with backwages, positing that BSMI is a contractor

who merely supplies labor to Wack Wack. NLRC also upheld its decision with regards
to BSMI illegally terminating Baluyot.
Wack Wack and BSMI filed a motion for reconsideration (MR), which was denied by
the NLRC. In response to this, Both Wack Wack and BSMI filed a petition for
certiorari to the Court of Appeals (CA). CA dismisses the peitions, and subsequent
MRs were denied. Now, Wack Wack, as petitioner in this case, assailed the
decisions of the CA, averring that when BSMI filed one day late, the CAs 4 th Division
allowed such technical infirmity; but when the CAs 12 th Division found lack of proof
of Wack Wacks general managers authority to sign the Certificate of Non-Forum
Shopping, they denied Wack Wacks petition. Hence, Wack Wacks petition to the
Supreme Court.
Issues:
1) Whether or not the General Manager of Wack Wack has sufficient authority
to act on behalf of the company.
2) Whether BSMI is an independent contractor or a labor-only contractor.
3) Whether or not there was a valid employer-employee relationship between
Wack Wack and private respondents Dominguez and Cagasan after the
latter opted for the package.
Held:
1.) Yes, the General Manager has authority. In a separate case, Novelty
Philippines, Inc. v. Court of Appeals, the Court recognized the authority of
the general manager to sue on behalf of the corporation and to sign the
requisite verification and certification of non-forum shopping. The general
manager is also one person who is in the best position to know the state
of affairs of the corporation.
2.) BSMI is an independent contractor. An independent contractor is one who
undertakes job contracting, i.e., a person who:
a. Carries on an independent business and undertakes the contract
work on his own account under his own responsibility according to
his own manner and method, free from the control and direction of
his employer or principal in all matters connected with the
performance of the work except as to the results thereof; and
b. Has substantial capital or investment in the form of tools,
equipment, machineries, work premises and other materials which
are necessary in the conduct of the business.
There is indubitable evidence showing that BSMI is an independent
contractor, engaged in the management of projects and has sufficient
capital and resources to undertake its principal business. BSMI admitted
that it employed the respondents, giving them some degree of priority
merely because of their work experience with the petitioner.

3.) No, there was no valid employer-employee relationship. When the

respondents voluntarily signed their quitclaims and accepted the
separation package offered by the petitioner, they, thenceforth, already
ceased to be employees of the petitioner. Nowhere does it appear in the
Agreement that the petitioner assured the respondents of continuous
employment in Wack Wack.

VICENTE SY, TRINIDAD PAULINO, 6BS TRUCKING CORPORATION, and SBT TRUCKING
CORPORATION (petitioners) vs CA and JAIME SAHOT (respondents)
(G.R. No. 142293; February 27, 2003); QUISUMBING, J.
Facts:
In 1958, Jaime Sahot (private respondent) started working for petitioner Vicente Sy
Trucking Corp. as a truck helper. In 1965, he became a truck driver with the
company, which was renamed T. Paulino Trucking Service, and later renamed as 6Bs
Trucking Corp. in 1985 and thereafter known as SBT Trucking Corp in 1994.
Throughout these changes of company names and 36 years, Sahot continuously
served the petitioners trucking business.
In April 1994, Sahot was already 59 years old and is suffering from various ailments,
particularly in his left thigh, which greatly affected his performance as a driver and
made him incur absences from his job. Consequence to this, he inquired with the
SSS about his medical and retirement benefits, but discovered that his premium
payments had not been remitted by his employer.
Sahot filed a week long leave sometime in May 1994, and on May 27 had been
medically examined and treated for various ailments. At the end of his week-long
leave, he asked for an extension for the whole month of June; however the
petitioners already threatened Sahot that he will be dismissed from his job if refuses
to go back to work. Then petitioners eventually dismissed Sahot, effective June 30,
1994.
Sahot then filed with the NLRC NCR Arbitration Branch a complaint for illegal
dismissal against petitioners. In their answer, petitioners admitted they had a
trucking business in the 1950s but denied employing helpers and drivers. They
contend that Sahot was not illegally dismissed as a driver because he was in fact
petitioners industrial partner; it was only in 1994 that he became an employee of
the company. Furthermore, petitioners contend that Sahot went on leave for a week
and asked a further 30 day extension of his leave. At the end of his leave, averred
the petitioners, he never reported back to work and filed an illegal dismissal
complaint against them. Furthermore, petitioners contend that due to Sahots

refusal to work after the expiration of his authorized leave of absence, he should be
deemed to have voluntarily resigned from his work.
NLRC NCR Arbitation Branch, through Labor Arbiter Santos ruled that there was no
illegal dismissal in Sahots case since he abandoned his job and that Sahot was an
industrial partner before January 1994. On appeal, the NLRC modified the judgment
of the Labor Arbiter. It declared that private respondent was an employee, not an
industrial partner, since the start and that Sahot did not abandon his job but his
employment was terminated on account of his illness, pursuant to Article 284 of the
Labor Code.
Petitioners assailed the decision of the NLRC before the CA, but the Appellate Court
affirms the NLRC decision, with modifications. Thus this petition before the SC.

Issues:
(1) Whether or not an employer-employee relationship existed between
petitioners and respondent Sahot.
(2) Whether or not there was valid dismissal.
(3) Whether or not respondent Sahot is entitled to separation pay.
Held:
(1) YES, an employer-employee relationship existed. The elements to
determine the existence of an employment relationship are: (a) the
selection and engagement of the employee, (b) the payment of wages, (c)
the power of dismissal and (d) the employers power to control the
employees conduct. The CA found that petitioners owned and operated a
trucking business since the 1950s and by their own allegations, they
determined private respondents wages and rest day. Records show that
private respondent actually engaged in work as an employee. During the
entire course of his employment, he did not have the freedom to
determine where he would go, what he would do, and how he would do it;
he merely followed instructions of petitioners and was content to do so, as
long as he was paid his salary.
(2) NO, there was no valid dismissal. In termination cases, the burden is upon
the employer to show by substantial evidence that the termination was for
lawful cause and validly made. Article 277(b) of the Labor Code puts the
burden of proving that the dismissal of an employee was for a valid or
authorized cause on the employer, without distinction whether the
employer admits or does not admit the dismissal. For an employees

dismissal to be valid, (a) the dismissal must be for a valid cause; and (b)
the employee must be afforded due process. Article 284 of the Labor Code
authorizes an employer to terminate an employee on the ground of
disease, however, in order to validly terminate employment on this
ground, Book VI, Rule I, Section 8 of the Omnibus Implementing Rules of
the Labor Code requires that there is a certification by a competent public
health authority that the disease is of such nature or at such a stage that
it cannot be cured within a period of six (6) months even with proper
medical treatment. In the case at bar, the employer clearly did not comply
with the medical certificate requirement before Sahots dismissal was
effected.
(3) YES, respondent Jaime Sahot is entitled to separation pay. An employee
who is terminated because of disease is entitled to separation pay
equivalent to at least one month salary or to one-half month salary for
every year of service, whichever is greater. Finding neither reversible error
nor grave abuse of discretion on the part of appellate court, the Court is
constrained to sustain its decision. To avoid further delay in the payment
due the separated worker, whose claim was filed way back in 1994, this
decision is immediately executory.

CASES CONTENDING RA8042

This is a consolidation of the following cases: G.R. No. 152642, G.R. No. 152710,
G.R. No. 167590, G.R. Nos. 182978-79, and G.R. Nos. 184298-99. All pertain to the
constitutionality of certain provisions of RA 8042, or the Migrant Workers and
Overseas Filipino Act of 1995.
BACKGROUND OF THESE CASES: The Congress, on June 7, 1995, passed RA 8042
that, among other things, sets the Governments policies regarding overseas
employment. Furthermore, the statute aims to establish a higher standard of
protection and welfare promotion of overseas Filipinos, migrant workers, their
families, especially those in distress.

(Hon. Patricia Sto. Tomas vs Rey Salac, et al. [G.R. No. 152642] and Hon. Patricia
Sto. Tomas vs Hon. Judge Jose Paneda [G.R. No. 152710])
FACTS: In January 8, 2002, Rey Salac, Willie Espiritu, Mario Montenegro, Dodgie
Belonio, Lolit Salinel, and Buddy Bonnevie (Salac, et al; respondents), who are labor
recruiters deploying workers abroad, filed before Quezon City RTC a petition for
certiorari, prohibition and mandamus with application of TRO and preliminary
injunction, seeking to enjoin the DOLE Secretary, Patricia Sto. Tomas (petitioner),

the POEA Administrator, and the TESDA Secretary-General, from regulating the
activities of private recruiters. Respondents invoked Sections 29 and 30 of the
Republic Act 8042 or the Migrant Workers Act, which provides that recruitment
agencies in the Philippines shall be deregulated one year from the passage of the
said law; that 5 years thereafter, recruitment of migrant workers should be fully
deregulated. Respondents aver that since RA 8042 was passed in June 1995, then
therefore, as early as 2000, the DOLE, POEA and TESDA should have stopped
issuing memorandums and circulars that regulates the recruitment of Filipino
workers for overseas work. Petitioner, in response, then questioned the validity of
Sections 29 and 30 of RA 8045.
ISSUE: Whether or not Sections 29 and 30 of RA 8045 are constitutional.
HELD: The SC rules that the issue became moot and academic. During the
pendency of this case in 2007, a new law, RA 9422 (An Act to Strengthen the
Regulatory Functions of the POEA) was passed which repealed Sections 29 and 30 of
RA 8042. With the issue becoming moot and academic, then therefore the petition,
according to the SC, should be dismissed.

(Republic of the Philippines vs PASEI [G.R. 167590])

FACTS: Philippine Association of Service Exporters, Inc. (PASEI; respondent), in their
petition for declaratory relief and prohibition filed before the Manila RTC, questioned
the validity of the following provisions of RA 8042:
(a) Section 6, which defines the term illegal recruitment in RA 8042.
Respondent contends that the definition provided for by the law is vague, on
the ground that it fails to distinguish between licensed and non-licensed
recruiters.
(b) Section 7, which penalizes violations against RA 8042. Respondent
contends that the penalties for simple violations against RA 8042 (i.e., mere
failure to render report or obstructing inspection) are unreasonable, being
that such simple violations are already punishable by imprisonment with a
minimum period of 6 years and 1 day and imposing a fine of at least Php
200,000.
(c) Section 9, which allows the victims of illegal recruitment to have the
option to either file the criminal case where he/she resides or at the place of
the commission of the crime. Respondent argues that this provision is void,
on the ground for being contrary to Rule 110 of the Rules of Criminal
Procedure, which provides that criminal cases must be prosecuted in the
place where the crime or any of its essential elements were committed.
(d) Section 10, which provides that corporate officers and directors of a
company found to be in violation of RA 8042 shall be themselves be jointly

and solidarily liable with the corporation or partnership for the aforesaid
claims and damages. Respondent avers that this automatic liability imposed
upon corporate officers and directors is void, on the ground that said
provision is violative of the right to due process of the law, thus is
unconstitutional.
Manila RTC, in its decision, held that the assailed provisions of RA 8042 are void for
being unconstitutional. Hence this petition.
ISSUE: Whether or not Sections 6, 7, 9, and 10 of RA 8042 are null and void for
being unconstitutional.
HELD: The Supreme Court held that the contended provisions of RA 8042 they are
valid provisions.
(a) Section 6: The SC held that RA 8042 clearly distinguished between licensed and
non-licensed recruiters. By its terms, persons who engage in canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers without license are
guilty of illegal recruitment, regardless of committing or not the illegal acts
enumerated in section 6. Conversely, recruiters who engage in the canvassing,
enlisting, etc. of OFWs, although they have government license, are only guilty of
illegal recruitment if they commit any of the wrongful acts enumerated in Section 6.
(b) Section 7: The SC held that penalties provided in Sec. 7 are valid; being that the
legislature has the prerogative to determine what individual acts are equally
reprehensible, consistent with the State policy of according full protection to labor,
and deserving of the same penalties. Moreover, it is not the duty of the courts to
inquire into the wisdom behind the law. In fixing such penalties, the statute
considered the unsettling fact that OFWs must work outside the country, and thus
are beyond its immediate protection. Therefore, the statute must make an effort to
somehow protect these OFWs from conscienceless and greedy individuals within its
jurisdiction who are willing to ship them out without clear assurance that their
contracted principals would treat such OFWs fairly and humanely.
(c) Section 9: The Supreme Court points out that the Rules on Criminal Procedure,
particularly Section 15(a) of Rule 110, itself, provides an exception to the general
rule on venue when it comes to criminal cases, subject to existing laws. Therefore,
there is nothing arbitrary when Congress provided an alternative venue for
violations of a special penal law like RA 8042. The assailed provision, as an
exception to the rule on venue of criminal actions, is consistent with that laws
declared policy of providing a criminal justice system that protects and serves the
best interests of victims of illegal recruitment.
(d) Section 10: The SC held that the liability of corporate officers and directors is not
automatic. In order to make the officers and directors jointly and solidarily liable
with their company, there must be a finding that they were remiss in directing the
affairs of that company, such as tolerating or even sponsoring the commission of
illegal activities.

(Becmen Services Exporter and Promotion vs Sps. Cuaresma [G.R. 182978-79] and
Sps. Cuaresma vs White Falcon Services [G.R. 184298-99])
FACTS: Jasmin Cuaresma, a nurse working in Saudi Arabia, was found dead. Her
parents, Spouses Simplicio and Mila Cuaresma, received from the OWWA (Overseas
Workers Welfare Administration) insurance benefits. However, when they found out
that Jasmin was raped and killed, based on an autopsy conducted in the Philippines,
the spouses filed for death and insurance benefits with damages from the
recruitment and placement agency which handled Jasmin (Becmen Service Exporter
and Promotion and White Falcon Services).
The Labor Arbiter (LA) dismissed the claim on the ground that besides the fact that
the spouses had already received insurance benefits from the OWWA, the LA also
gave credence to Saudi Arabian authorities findings that Jasmin committed suicide.
However, the NLRC found Becmen and White Falcon jointly and severally liable for
Jasmins death and ordered them to pay the Cuaresmas for damages. The NLRC
based its decision on the findings of the autopsy conducted by the Cabanatuan City
Health Office.
Becmen and White Falcon appealed to the Court of Appeals (CA). In its June 28,
2006 decision, the CA held Becmen and White Falcon jointly and severally liable
with their Saudi Arabian employer for actual damages, with Becmen having a right
of reimbursement from White Falcon. In response to the decision by the Appellate
Court, Becmen and White Falcon appealed the CA Decision to the Supreme Court.
The Supreme Court held that since Becmen was negligent in investigating Jasmin
Cuaresmas true cause of death, in itself a violation of RA 8042, Becmen shall be
held liable for damages. The Supreme Court also ruled that pursuant to Section 10
of RA 8042, the directors and officers of Becmen are themselves jointly and
solidarily liable with Becmen. In response, the officers of Becmen, led by Euforcina
Gumabay, filed a motion for leave to intervene, averring that the 2 nd paragraph of
Section 10, RA 8042 is unconstitutional.
ISSUE: Whether or not the assailed Section 10 of RA 8042 is unconstitutional.
HELD: The SC held that Section 10 is valid. The liability of the companys officers or
directors is not automatic. However, the SC reconsidered its earlier ruling that
Gumabay et al are solidarily and jointly liable with Becmen, on the ground that
there is no evidence on record to show that Gumabay, et al were personally
involved in their companys particular actions or omissions in Jasmins case.

PHILIPPINE GEOTHERMAL, INC. vs. NATIONAL LABOR RELATIONS COMMISSION,

TEODULO CUEBILLAS, ARMANDO CILOT, MARIANO CORULLO, YOLANDA CAL, EFREN
CLERIGO, FELICISSIMO VARGAS, et al.,

(G.R. Nos. 82643-67; August 30, 1990); PARAS, J.

FACTS: Petitioner Philippine Geothermal, Inc. is a U.S. corporation authorized to
engage in business in the Philippines and is engaged in the exploration and
development of geothermal energy resources as an alternative source of energy.
Private respondents, on the other hand, are employees of Philippine Geothermal Inc.
occupying various positions, ranging from carpenter to Clerk II who had worked with
the company under contractual employment, for a period ranging from fifteen (15)
days to three (3) months. These contracts were regularly renewed, so much so that
the private respondents had rendered service from three (3) to five (5) years until
1983 and 1984, when petitioner decided not to renew their individual contracts.
In July 1983, after being excluded in the bargaining unit of the regular rank and file
employees, private respondents decided to form their own, separate labor union. A
month later, they filed a petition for certification election with the Ministry of Labor
and Employment, NCR. In response to this, petitioner allegedly started harassing
them and replaced them with so called "contract workers". Thus, complainant union
and herein respondent employees filed a case for illegal lock-out and unfair labor
practice. On March 1987, the Labor Arbiter renders a decision, declaring the
respondents regular employees and orders to petitioner to reinstate and pay the
respondents. On appeal, NLRC on November 1987 affirms the Labor Arbiters
decision. A subsequent MR filed on March 1988 was denied for lack of merit. Hence
this petition.

ISSUE: Whether or not private respondents may be considered regular and

permanent employees, due to their length of service in the company, despite that
they were employed on contractual basis.

HELD: The SC classified the two kinds of regular employees, as (a) those who are
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; and (b) those who have rendered at least 1 year
of service, whether continuous or broken with respect to the activity in which they
are employed.
While the actual regularization of these employees entails the mechanical act of
issuing regular appointment papers and compliance with other operating
procedures that an employer may adopt, it is more in keeping with the spirit of the
law to rule that the status of regular employment attaches to the casual employee
on the day immediately after the end of his first year of service with the company.
Assuming therefore that a worker could properly be regarded as a casual employee,
as distinguished from a regular or permanent employee, he becomes entitled to be
considered a regular employee as soon as he has completed one year of service

with the employer. Thusly said, employers may not terminate the service of a
regular employee except for a just cause, or when authorized under the Labor Code.
ILUMINADA VER BUISER, et al vs. HON. VICENTE LEOGARDO, JR and GENERAL
TELEPHONE DIRECTORY CO.
(G.R. No. L-63316 July 31, 1984); GUERRERO, J.
FACTS: Petitioners Iluminada Buiser, Ma. Cecilia Rilloacua, and Ma. Mercedes
Intengan all entered into an eighteen-month probationary employment contract
with private respondent General Telephone Directory Company (GTPD), as sales
representatives charged with soliciting advertisements to include in the telephone
directories. All petitioners were terminated after the provisionary period (May 1981),
on the ground of failing to meet their sales quotas that were set by respondent
company. In response to their termination, petitioners filed before the NCR Ministry
of Labor of and Employment a complaint for illegal dismissal with claims for
backwages. However, the petition was denied in a decision by the Regional Director
and the same was affirmed by herein respondent Deputy Minister of Labor Vicente
Leogardo, ruling that (a) they have not attained regular status; (b) the stipulated
probationary period was valid; and (c), that the termination was valid because they
have not reached their required sales quotas set by the GTPD.
Petitioners filed before the Supreme Court a petition for certiorari, contending that
respondent Deputy Minister Leogardo committed grave abuse of discretion in
rendering the decision in favor of the private respondent and that as provided for by
the Labor Code, probationary period cannot exceed 6 months, therefore the
probationary period of GTPD was illegal.

ISSUE: Whether or not the stipulated eighteen month probationary period is

violative of the Labor Code.

HELD: The Supreme Court rejects the petitioners contentions. While the Labor
Code, specifically Article 282, provides that probationary periods cannot exceed 6
months, it still allows the both employer and employee to stipulate the terms of the
employment, provided that they can come into agreement. Given that both
petitioner and private respondent came into agreement (by signing and agreeing)
that the 18 month probationary period is the law between them, petitioners cannot
impugn this by invoking the provision of the Labor Code in their favor. Additionally,
the grounds for their dismissal were just, because it was proven in the records that
they did in fact failed to meet their sales quotas set by private respondent GTPD in
the employment contract. Hence, petition is dismissed for lack of merit.