REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF LABOR AND EMPLOYMENT

NATIONAL LABOR RELATIONS COMMISSION
REGIONAL ARBITRATION BRANCH NO. III
CITY OF MAKATI, METRO MANILA
PETE UY KHO,
ALDAV YU
Complainants,
-versusNLRC CASE NO. RAB-III 03-1648-09MAKATI TILES AND TEXTILES CO.,
SUSSY ABBOTT CHAN
Respondents.
x - - - - - - - - - - - - - - - - - - - - -x
POSITION PAPER
Respondents Makati Titles and Textiles Company (Makati Ti-Te-Co) and Sussy Abott
Chan through undersigned counsel, unto this Honorable Office, most respectfully submit
this Position Paper, and state that:

PRELIMINARY STATEMENT
Complainants causes of action against herein respondents are devoid of any merit both
in fact and in law, hence, the said causes of action are unfounded and frivolous, and
necessarily must fail.
I
THE PARTIES
Complainants Pete Uy Kho and Aldav Yu are Filipinos, of legal age, married and a
resident of 123 Lacson Street Sampaloc Manila, where they may be served with the
processes of this Honorable office.
Respondent Makati Titles and Textiles Company (Makati Ti-Te-Co) is a domestic
corporation engaged in the business manufacturing tiles and textiles with its principal
business address at Door 2, Avidavida Building, Malunggay Street, Makati City and the
respondent Sussy Abott Chan is the owner of said company residing at 1840 Legaspi
Village Makati City where she may be served with processes of this Honorable Office.

III
STATEMENT OF FACTS
Individual complainants herein,were hired by respondent Makati Tiles and Textiles
Company (Makati-Ti-Te-Co) as machine operators. The complainants started working
in the said company since June 17, 2013 in the said company where they are paid on a
piece-rate basis. Since complainants are well versed operators of the machines of the
Company, the means and method of how they operate were subject to their discretion and
they were working without any supervision from the respondents.
On November 20, 2015, the Complainants herein filed a complaint docketed as Case No.
7-2603-84 for (a) non-payment of holiday pay; (b) non-payment of service incentive pay;
(c) 13th month pay.
IV
ISSUES
1. Whether there is an employer-employee relationship between complainants and
respondents.
2. Whether employees paid on piece-rate basis are entitled to service incentive pay,
holiday pay and 13th month pay.
V
DISCUSSION / ARGUMENTS
1.) There was no employer-employee relationship.
In the case of Makati Haberdashery vs NLRC1, the Court ruled that the test of employeremployee relationship is four-fold: (1) the selection and engagement of the employee; (2)
the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct. It is the so called "control test" that is the most important element.
This simply means the determination of whether the employer controls or has reserved
the right to control the employee not only as to the result of the work but also as to the
means and method by which the same is to be accomplished.
There is an absence of the element of the power of the employer to control the
employees conduct in this case because the respondents had no control over the means
and methods as to how the complainants operate the machines because the respondents
fully relied on the expertise of the complainants. Further, the actions of the complainants
with regard to the handling of the machines of the respondents were not supervised.

MAKATI HABERDASHERY versus NATIONAL LABOR RELATIONS COMMISSION (G.R. Nos. 83380-81,
November 15, 1989)

2.) The complainants are not entitled to (a) holiday pay; (b) service incentive pay;
(c) 13th month pay as they are piece-rate workers. [Exhibit A-1]
As ruled by the Supreme Court in the case of Makati Haberdashery, Inc. vs National
Labor Relations Commission, et. al, G.R Nos. 83380-81, November 15, 1989:
On the other hand, while private respondents are entitled to Minimum Wage, COLA and
13th Month Pay, they are not entitled to service incentive leave pay because as piece-rate
workers being paid at a fixed amount for performing work irrespective of time consumed
in the performance thereof, they fall under one of the exceptions stated in Section 1(d),
Rule V, Implementing Regulations, Book III, Labor Code. For the same reason private
respondents cannot also claim holiday pay (Section 1(e), Rule IV, Implementing
Regulations, Book III, Labor Code). (EMPHASIS SUPPLIED)
As it is established that Pete Uy Kho and Aldav Yu were piece-rate workers 2 In Lambo vs
NLRC, the Supreme Court held that piece-rate payment is generally practiced in garment
factories where work is done in the company premises. and were accordingly paid on
such system, they are no longer entitled to payment of service incentive leave pay and
holiday pay.
With regard to the claim of the complainants for 13th Month Pay, such has already been
paid by the respondent as evidenced by receipt forms acknowledged and signed by Kho
and Yu. [Exhibit A ]

PRAYER
WHEREFORE, premises considered, it is respectfully prayed from this Honorable
Office that judgment be rendered in favor of the Respondents with the following terms:
Finding that employer and employee relationship did not exist between complainants and
respondent; and finding that respondent is not liable for payment of (a) of holiday pay, (b)
service incentive pay and (c) 13th month pay.
Other reliefs just and equitable under the premises are likewise prayed for.
Respectfully submitted. Makati City, Philippines, December 11, 2015.

Kim Andaya
Counsel For Respondents
Attorneys Roll No. 67804IBP
No. 876490/2-11-12/Makati
2

Lambo vs NLRC, G.R No. 111042, October 26, 1999,

PTR No. 8966437/2-11-12/Makati

MCLE Comp. Cert. No. III-0008897
Gov. M Roa St., Capitol Site, Makati City

Hazelmer Fernandez
Counsel For Respondents
Attorneys Roll No. 12345IBP
No. 43210/2-11-12/Makati
PTR No. 7891011/2-11-12/Makati
MCLE Comp. Cert. No. III-0009934
Gov. M Roa St., Capitol Site, Makati City

VERIFICATION
I, Sussy Abott Chan, Filipino, of legal age, and with office address at Makati
Tiles and Textiles Company, Door 2, Avidavida Building, Malunggay Street, Makati City,
after having been duly sworn to in accordance with law, depose and state:
1. That I am one of the respondent in the instant case; and
2. That I have caused the preparation of the foregoing Position Paper, have read
the same and the contents thereof are true and correct to the best of my personal
knowledge and based on authentic records.
IN WITNESS WHEREOF, I have hereunto affixed my signature this 3 rd day of
December 2015, in the City of Makati, Philippines.

Sussy Abott Chan

Affiant
CTC No. 87690976
Makati City/03-10-2012

SUBSCRIBED AND SWORN to before me this 3rd day of December 2015, in

the City of Makati, Philippines. Affiant exhibited to me his Community Tax Certificate
above-written.
Hakam Nepomuceno
Notary Public
Until December 31, 2016
Notarial Commission No. 098-10
Roll No. 78998
IBP No. 67897564 : 1-11-11 : Makati City
PTR No. 697578 : 1-11-11 : Makati City
MCLE Exempt

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