JOSE Y. SONZA vs. ABS-CBN BROADCASTING CORPORATION GR NO.

138051
JUNE 10, 2004
CARPIO

INDEPENDENT CONTRACTOR
DOCTRINE: Being an exclusive talent does not by itself mean that one is an
employee. In the broadcast

industry, exclusivity is not necessarily the same as control.

FACTS: ABS-CBN signed an Agreement with Mel and Jay Management and
Development Corporation (MJMDC), as “AGENT” of Sonza, as President and GM, and
Carmela Tiangco, as EVP and Treasurer. MJMDC agreed to provide Sonza’s services
exclusively to ABS-CBN as talent for radio and television.

On April 1, 1996, Sonza wrote to ABS-CBN’s President Eugenio Lopez III serving a
notice of rescission of the Agreement at their instance effective as of date thereby
waiving and renouncing recovery of the remaining amount stipulated but reserving the
right to seek recovery to other benefits pursuant to Sonza’s resignation in view of
recent events concerning his programs and career due to ABS-CBN’s act and breach
violative of the Agreement.

Sonza filed a complaint against ABS-CBN before the DOLE, NCR in QC on the ground
that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay,
13th month pay, signing bonus, travel allowance, and amounts due under the
Employees Stock Option Plan (ESOP). ABS-CBN filed a Motion to Dismiss on the
ground that no employer-employee relationship existed between the parties.
Meanwhile ABS-CBN continued to remit Sonza’s monthly talent fees.

LA DECISION: Denied the motion to dismiss and directed the parties to file their
position papers ruling that Sonza, for having invoked a claim that he was an employee
and was not paid certain claims, is sufficient enough to confer jurisdiction over the
case. On February 24, 1997, the position papers were submitted.

Sonza filed a Reply with Motion to Expunge the affidavits of ABS-CBN’s witnesses
Soccoro Vidanes and Rolando Cruz which stated that the prevailing practice in the tv
and broadcast industry is to treat talents as independent contractors. LA dismissed the
complaint for lack of jurisdiction on the ground that a talent cannot be considered as an
employee by reason of the peculiar circumstances surrounding the engagement of his
services: (1) He was free to perform the services he undertook to render in accordance
with his own style, his benefits were very much higher than those given to employees,
and he was not bound to render 8 hours of work per day. (2) Whatever benefits Sonza
enjoyed arose from specific agreement by the parties and not by reason of the
employer-employee relationship. All these benefits are merely talent fees and other
contractual benefits and should not be deemed as salaries, wages, and/or other
remuneration accorded to an employee, notwithstanding the nomenclature appended
to these benefits. Apropos to this is the rule that the term or nomenclature given to a
stipulated benefit is not controlling, but the intent of parties to the Agreement
conferring such benefit. (3) The fact that Sonza was made subject to ABS-CBN’s
Rules and Regulations does not detract from the absence of employer-employee
relationship as such merely served as guidelines toward the achievement of the
mutually desired result without dictating the means or methods to be employed in
attaining it.

NLRC DECISION: Affirmed the LA’s decision. ISSUE: Is Sonza an employee of ABS-
CBN? RULING: NO.

Independent contractors often present themselves to possess unique skills, expertise,

or talent to distinguish them from ordinary employees. The specific selection and hiring
of Sonza because of his unique skills, talent, and celebrity status not possessed by
ordinary employees is a circumstance indicative, but not conclusive, of an independent
contractual relationship. If SONZA did not possess such unique skills, talent and
celebrity status, ABS- CBN would not have entered into the Agreement with SONZA
but would have hired him through its personnel department just like any other
employee.

All the talent fees and benefits paid to Sonza were the result of negotiations that led to
the Agreement. If Sonza were ABS-CBN’s employee, there would be no need for the
parties to stipulate on the benefits as such are automatically incorporated into every
employer-employee contract by the law. Whatever benefits Sonza enjoyed arose from
contract and not because of an employer-employee relationship. The payment of talent
fees directly to SONZA and not to MJMDC does not negate the status of SONZA as an
independent contractor. The parties expressly agreed on such mode of payment.

Sonza failed to show that ABS-CBN could terminate his services on grounds other
than breach of contract, such as retrenchment to prevent losses as provided under
labor laws. During the life of the Agreement, even if it suffered severe business losses,
ABS-CBN could not retrench Sonza because it remained obligation to pay Sonza’s
talent fees. This circumstance indicates an independent contractual relationship
between Sonza and ABS-CBN. Even after ABS-CBN ceased broadcasting his
programs, ABS-CBN still paid him his talent fees. Furthermore, while Sonza did
actually resign from ABS-CBN, he also, as president of MJMDC, rescinded the
Agreement.

The control test is the most important test the courts apply in distinguishing an
employee from an independent contractor. It is based on the extent of control the hirer
exercises over a worker. The greater the supervision and control the hirer exercises,
the more likely the worker is deemed an employee. The converse holds true as well –
the less control the hirer exercises, the more likely the worker is considered as an
independent contractor.
 5. (5) Control over the means and methods of work. ABS-CBN engaged SONZA’s
services specifically to co- host the “Mel & Jay” programs. ABS-CBN did not
assign any other work to SONZA. To perform his work, SONZA only needed his
skills and talent. How SONZA delivered his lines, appeared on television, and
sounded on radio were outside ABS-CBN’s control. SONZA did not have to
render eight hours of work per day. The Agreement required SONZA to attend
only rehearsals and tapings of the shows, as well as pre- and post-production
staff meetings, as well as pre- and post-production staff meetings. ABS-CBN
could not dictate the contents of SONZA’s script. However, the Agreement
prohibited SONZA from criticizing in his shows ABS-CBN or its interests. The
clear implication is that SONZA had a free hand on what to say or discuss in his
shows provided he did not attack ABS-CBN or its interests. ABS-CBN was not
involved in the actual performance that produced the finished product of Sonza’s
work. ABS-CBN merely reserved the right to modify the program format and
airtime schedule “for more effective programming.” ABS-CBN’s sole concern
was the quality of the shows and their standing in the ratings. Clearly, ABS-
CBN did not exercise control over the means and methods of performance
of SONZA’s work. A radio broadcast specialist who works under minimal
supervision is an independent contractor.
6. (6) Subjected to rules and standards of performance. The Agreement stipulates
the Sonza shall abide with the rules and standards of performance covering
talents of ABS-CBN. One could still be an independent contractor although the
hirer reserved certain supervision to insure the attainment of the desired result.
The hirer, however, must not deprive the one hired from performing his services
according to his own initiative.
7. (7) Exclusivity clause. Being an exclusive talent does not by itself mean that
SONZA is an employee of ABS-CBN. In the broadcast industry, exclusivity is not
necessarily the same as control. The hiring of exclusive talents is a widespread
and accepted practice in the entertainment industry since the broadcast station
normally spends substantial amounts of money, time and effort in building up its
talents and programs they appear in.

Sonza’s claim that the practice to treat talents as independent contractors is void for
violating the right of labor to security of tenure. The right of labor to security of
tenure as guaranteed in the Constitution arises only if there is an employer-
employee relationship under labor laws. Not every performance of services for a
fee creates an employer- employee relationship. To hold that every person who
renders services to another for a fee is an employee - to give meaning to the
security of tenure clause - will lead to absurd results. The Court will not interpret
the right of labor to security of tenure to compel artists and talents to render their
services only as employees. If radio and television program hosts can render their
services only as employees, the station owners and managers can dictate to the radio
and television hosts what they say in their shows. This is not conducive to freedom of
the press.
BEGINO V. ABS-CBN
 G.R. No. 199166 April 20, 2015 PEREZ, J.:

Doctrine:

Exclusivity Clause and Prohibitions in talent contracts are indicative of control by the
employer if it does not concern well-known television and radio personality who can
legitimately be considered as talent and compensated as such.

FACTS:

ABS-CBN employed Begino and Del Valle sometime in 1996 as Cameramen/Editors

for TV Broadcasting. Sumayao Avila-Llorin were similarly engaged as reporters
sometime in 1996 and 2002, respectively. [hereinafter referred to as petitioners]
Petitioner were engaged through Talent Contracts which, though regularly renewed
over the years, provided terms ranging from three (3) months to one (1) year.
Petitioners were given Project Assignment Forms which detailed, among other matters,
the duration of a particular project as well as the budget and the daily technical
requirements thereof. In the aforesaid capacities, petitioners were tasked with
coverage of news items for subsequent daily airings in respondents’ TV Patrol Bicol
Program.

The Talent Contract specified the absence of employer-employee relationship between

the parties and mandated compliance with the professional standards of ABS-CBN and
its policies and guidelines as well as the rules of KBP. It also prohibited the petitioners
from engaging in similar work for persons or entities in direct or indirect competition
with ABS-CBN. Petitioners’ compensation were termed as Talent Fee’s and were
results oriented in nature, thus petitioners were not required to observe normal working
hours.

Claiming that they were regular employees, petitioners filed a complaint against ABS-
CBN before the NLRC S- RAB Naga City. Petitioners claimed that they performed
functions necessary and desirable in ABS-CBN's business. Petitioners averred that
they worked under the direct control and supervision of Villafuerte, ABS- CBN’s
manager, because they were mandated to wear company IDs and the latter provided
all the equipment they needed, and, at the end of each day, were informed about the
news to be covered the following day, the routes they were to take and, whenever the
subject of their news coverage is quite distant, even the start of their workday.
Moreover, noncompliance with the company policies will merit dismissal. Petitioners
were constantly evaluated and were subjected to annual competency assessment
alongside other ABS-CBN employees.

As a result of their denomination as talents, they merely earned an average of

P7,000.00 to P8,000.00 per month, or decidedly lower than the P21,773.00 monthly
salary ABS-CBN paid its regular rank-and-file employees.

ABS-CBN contends that, due to the lack of manpower to produce its own programs, it
is necessary to hire independent contractors who offered their services in relation to a
particular program. Due to the unpredictability of viewer preferences, their payment
usually depends on the budget allocation for a project.
It argued that its control is limited to the imposition of general guidelines on conduct
and performance, simply for the purpose of upholding the standards of the company
and the strictures of the industry. There is no control or restrictions over the means and
methods by which they performed or discharged the tasks for which their services were
engaged. Petitioners were, at most, briefed whenever necessary regarding the general
requirements of the project to be executed.
LA RULING: The LA ruled that petitioners were regular employees having rendered
services necessary and related to ABS-CBN’s business for more than a year. It ruled
that the exclusivity and prohibitions in the contract showed ABS-CBN’s control over
petitioners.

NLRC RULING: The NLRC affirmed LA decision.

CA RULING: The CA discounted the existence of an employer-employee relation
between the parties upon the following findings and conclusions: (a) petitioners, were
engaged by respondents as talents for periods, work and the program specified in the
Talent Contracts and/or Project Assignment Forms concluded between them; (b)
petitioners were paid talent fees depending on the budget allocated for the program to
which they were assigned; (c) being respondents did not exercise control over the
manner and method by which petitioner accomplished their work but only ensured that
they complied with the standards of the company, the KBP and the industry; and, (d)
the existence of an employer-employee relationship is not necessarily established by
the exclusivity clause and prohibitions which are but terms and conditions on which the
parties are allowed to freely stipulate.

ISSUE: Whether an employer-employee relationship exists between petitioners and

ABS-CBN.
SC RULING:
 Yes. Notwithstanding the nomenclature of their Talent Contracts and/or
Project Assignment Forms and the terms and condition embodied therein, petitioners
are regular employees of ABS-CBN because they perform functions necessary and
essential to ABS-CBN’s business. Respondents’ repeated hiring of petitioners for its
long-running news program positively indicates that the latter were ABS-CBN’s regular
employees.
Petitioners were subject to the control and supervision of respondents which, first and
foremost, provided them with the equipments essential for the discharge of their
functions. The talent contracts specifically provide that ABS-CBN shall retain “all
creative, administrative, financial and legal control” of the programs which were
assigned to petitioners. They were likewise required “to attend and participate in all
promotional or merchandising campaigns, activities or events for the Program,” and to
perform their functions “at such locations and Performance/Exhibition Schedules.”
Such terms demonstrate the control over petitioners not only over the results but also
over the means employed to achieve the same.
While it is true that in Sonza, where similar exclusivity clause and restrictions were held
not to be indicative of control and lead to the conclusion that Sonza was an
independent contractor, such cannot be applied in this case. The said case enunciated
that guidelines for the achievement of mutually desired results are not tantamount to
control. It cannot not be applied in this case because Sonza case involved a well-
known television and radio personality who was legitimately considered a talent and
amply compensated as such. While possessed of skills for which they were modestly
recompensed by respondents, petitioners lay no claim to fame and/or unique talents
for which talents like actors and personalities are hired and generally compensated in
the broadcast industry

WILHELMINA S. OROZCO v. C.A.

G.R. No. 155207 August 13, 2008

NACHURA, J.

A COLUMNIST IN A NEWSPAPER IS NOT A REGULAR EMPLOYEE OF THE

NEWSPAPER WHICH PUBLISHES THE COLUMN.
DOCTRINE: The newspaper’s power to approve or reject publication of any specific
article she wrote for her column cannot be the control contemplated in the "control
test," as 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.

...the so-called control as to time, space, and discipline are dictated by the very nature
of the newspaper

business itself.

FACTS:

In March 1990, PDI engaged the services of petitioner to write a weekly column for its
Lifestyle section. She religiously submitted her articles every week, except for a six-
month stint in New York City when she,

nonetheless, sent several articles through mail.

After two years, petitioner’s column was terminated by PDI. Petitioner filed a complaint
for illegal dismissal. Petitioner argues that PDI exercised control over her work as
evidenced by the fact that she had to strictly follow deadlines, her column must strictly
be related to the Lifestyle section and her article must conform to the space

allotted in the said section.

ISSUE: Whether a columnist in a newspaper subjected to the afore-stated conditions is

a regular employee of

the newspaper?
HELD: NO.

Not all rules imposed by the hiring party on the hired party indicate that the latter is an
employee of the former. Rules which serve as general guidelines towards the
achievement of the mutually desired result are not indicative of the power of control.

It should, however, be obvious that not every form of control that the hiring party
reserves to himself over the conduct of the party hired in relation to the services
rendered may be accorded the effect of establishing an employer-employee
relationship between them in the legal or technical sense of the term. A line must be
drawn somewhere, if the recognized distinction between an employee and an
individual contractor is not to vanish altogether. Realistically, it would be a rare contract
of service that gives untrammelled freedom to the party hired and eschews any
intervention whatsoever in his performance of the engagement.

Logically, the line should be drawn between rules that merely serve as guidelines
towards the achievement of the mutually desired result without dictating the means or
methods to be employed in attaining it, and those that control or fix the methodology
and bind or restrict the party hired to the use of such means. The first, which aim only
to promote the result, create no employer-employee relationship unlike the second,
which address both the result and the means used to achieve it.

A careful examination reveals that the factors enumerated by the petitioner are
inherent conditions in running a newspaper. In other words, the so-called control as to
time, space, and discipline are dictated by the very nature of the newspaper business
itself.

The newspaper’s power to approve or reject publication of any specific article she
wrote for her column cannot be the control contemplated in the "control test," as 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.
In contrast, a regular reporter is not as independent in doing his or her work for the
newspaper. We note the common practice in the newspaper business of assigning its
regular reporters to cover specific subjects, geographical locations, government
agencies, or areas of concern, more commonly referred to as "beats." A
Petitioner has misconstrued the "control test," as did the Labor Arbiter and the NLRC.
reporter must produce stories within his or her particular beat and cannot switch to
another beat without permission from the editor. In most newspapers also, a reporter
must inform the editor about the story that he or she is working on for the day. The
story or article must also be submitted to the editor at a specified time. Moreover, the
editor can easily pull out a reporter from one beat and ask him or her to cover another
beat, if the need arises.
This is not the case for petitioner. Although petitioner had a weekly deadline to meet,
she was not precluded from submitting her column ahead of time or from submitting
columns to be published at a later time. More importantly, respondents did not dictate
upon petitioner the subject matter of her columns, but only imposed the general
guideline that the article should conform to the standards of the newspaper and the
general tone of the particular section.

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.

TELEVISION AND PRODUCTION EXPONENTS, INC. and/or ANTONIO P.

TUVIERA, petitioners, vs.

ROBERTO C. SERVAÑA

G.R. No. 167648 January 28, 2008

TINGA, J.:
Doctrine:

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.

FACTS:

TAPE is a domestic corporation engaged in the production of television programs while

Antonio Tuviera serves as its president. Roberto Servaña served as security guard for
TAPE from 1987 until his services were termitated on 3 March 2000. Servaña filed a
complaint for illegal dismissal agianst TAPE.He alleged that he was first connected
with Agro-Commercial Security Agency but was later on absorbed by TAPE as a
regular company guard. His services were terminated on account of TAPE’s decision
to contract the services of a professional security agency. Tape, on the other hand,
alleged that Servaña was an independent contractor falling under the talent group
category and was working under a special arrangement. It alleged that it was agreed
that Servaña would render his services unitil such time that the company shall have
engaged the

services of a professional security agency.

ISSUE: Whether or not there is an Employer-Employee relationship between TAPE
and Servaña?

LA RULING: Yes. The Labor Arbiter ruled that Servaña was a regular employee of
Tape on account of the nature of the work of Servaña, which is securing and
maintaining order in the studio, as necessary and desirable in the usual business of
TAPE. However, the Labor Aribter ruled the termination valid on the ground of

redundancy.

NLRC RULING: No. The NLRC reversed the ruling of the Labor Arbiter on the ground
security services may not

be deemed necessary and desirable in the usual business of TAPE.

CA RULING: Yes. The CA ruled that that Servaña was a regular employee considering
the nature and length of his service.
SC RULING:

Yes. Jurisprudence is abound with cases that recite the factors to be considered in
determining the existence of employer-employee relationship, namely: (a) the selection
and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee with respect to the

means and method by which the work is to be accomplished.

Servaña was hired by TAPE when the latter absorbed him upon the expiration of his
security agency contract with RPN-9. The monthly salary received by Servaña is
considered wages despite being designated as talent fees by TAPE. The
Memorandum informing Servaña of discontinuance of his services also proves that
TAPE had the power to dismiss him. Control is also manifested in the bundy cards
submitted by Servaña. He was required to report daily and observe definite work
hours. He is also considered a regular employee by reason of his 5 year continuous
service regardless of whether or not respondent had been performing work that is
necessary or desirable to the usual business of TAPE. Thus being a regular employee,
his services may not be terminated except for a just or authorized cause. TAPE is
liable for illegal dismissal for it failure to comply the 1

month requirement for termination of services as required by law.

However, with respect to the liability of petitioner Tuviera, president of TAPE, absent
any showing that he acted

with malice or bad faith in terminating respondent, he cannot be held solidarily liable
with TAPE.

ANGELINA FRANCISCO vs. NATIONAL LABOR RELATIONS COMMISSION G.R.

No. 170087 August 31, 2006
 YNARES-SANTIAGO, J.:

Doctrine:

When the control test is not sufficient to give a complete picture of the relationship
between the parties, two- tiered test must be applied.

The proper standard of economic dependence is whether the worker is dependent on

the alleged employer for his continued employment in that line of business.

FACTS:
In 1995, petitioner was hired by Kasei Corporation during its incorporation stage. She
was designated as Accountant and Corporate Secretary and was assigned as Liaison
Officer. In 1996, petitioner was designated as Acting Manager and was assigned to
handle recruitment of all employees and perform management administration
functions; represent the company in all dealings with government agencies, especially
with the BIR, SSS and in the city government of Makati; and to administer all other
matters pertaining to the operation of Kasei Restaurant which is owned and operated
by Kasei Corporation. For five years, petitioner performed the duties of Acting
Manager. Her salary was P27,500.00 plus P3,000.00 housing allowance and a 10%
share in the profit of Kasei Corporation.

In January 2001, petitioner was replaced as Manager and reduced her salary by
P2,500.00 a month. On October 15, 2001, petitioner was informed that she is no longer
connected with the company.

ISSUE: Whether or not there is an employer-employee relationship between petitioner

and Kasei Corp. SC RULING:
YES, there is an employer-employee relationship between petitioner and Kasei
Corporation.
There are instances when, aside from the employers power to control the employee
with respect to the means and methods by which the work is to be accomplished,
economic realities of the employment relations help provide a comprehensive analysis
of the true classification of the individual, whether as employee, independent
contractor, corporate officer or some other capacity.

The better approach would therefore be to adopt a two-tiered test involving: (1) the
putative employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished; and (2) the underlying economic
realities of the activity or relationship.

The determination of the relationship between employer and employee depends upon
the circumstances of the whole economic activity, such as: (1) the extent to which the
services performed are an integral part of the employers business; (2) the extent of the
workers investment in equipment and facilities; (3) the nature and degree of control
exercised by the employer; (4) the workers opportunity for profit and loss; (5) the
amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; (6) the permanency and duration of the relationship between
the worker and the employer; and (7) the degree of dependency of the worker upon the
employer for his continued employment in that line of business.

The proper standard of economic dependence is whether the worker is dependent on

the alleged employer for his continued employment in that line of business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura,
the corporations Technical Consultant.

Under the broader economic reality test, the petitioner can likewise be said to be an
employee of respondent corporation because she had served the company for six
years before her dismissal, receiving check vouchers indicating her salaries/wages,
benefits, 13th month pay, bonuses and allowances, as well as deductions and Social
Security contributions from August 1, 1999 to December 18, 2000. It is therefore
apparent that petitioner is economically dependent on respondent corporation for her
continued employment in the latter’s line of business.

Based on the foregoing, there can be no other conclusion that petitioner is an

employee of respondent Kasei Corporation. She was selected and engaged by the
company for compensation, and is economically dependent upon respondent for her
continued employment in that line of business.

WPP Marketing v. Galera (G.R. No. 169207; March 25, 2010)

CASE DIGEST: WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN,

MARK WEBSTER, and NOMINADA LANSANG, Petitioners, v. JOCELYN M.
GALERA, Respondent.

FACTS: Petitioner is Jocelyn Galera (GALERA), an American citizen who was

recruited from the United States of America by private respondent John Steedman,
Chairman-WPP Worldwide and Chief Executive Officer of Mindshare, Co., a
corporation based in Hong Kong, China, to work in the Philippines for private
respondent WPP Marketing Communications, Inc. (WPP), a corporation registered and
operating under the laws of Philippines.

Employment of GALERA with private respondent WPP became effective on

September 1, 1999 solely on the instruction of the CEO and upon signing of the
contract, without any further action from the Board of Directors of private respondent
WPP.

Four months had passed when private respondent WPP filed before the Bureau of
Immigration an application for petitioner GALERA to receive a working visa, wherein
she was designated as Vice President of WPP. Petitioner alleged that she was
constrained to sign the application in order that she could remain in the Philippines and
retain her employment.

On December 14, 2000, petitioner GALERA alleged she was verbally notified by
private respondent STEEDMAN that her services had been terminated from private
respondent WPP. A termination letter followed the next day. Thus, a complaint for
illegal dismissal was filed against WPP.

The LA held that WPP, Steedman, Webster, and Lansang liable for illegal dismissal
and damages. Arbiter Madriaga stated that Galera was not only illegally dismissed but
was also not accorded due process. The NLRC reversed the LA decision. The NLRC
stressed that Galera was WPPs Vice-President, and therefore, a corporate officer at
the time she was removed by the Board of Directors. Such being the case, the
imperatives of law require that we hold that the Arbiter below had no jurisdiction over
Galeras case as, again, she was a corporate officer at the time of her removal.

On appeal, the CA reversed the NLRC decision. It ruled that a person could be
considered a "corporate officer" only if appointed as such by a corporations Board of
Directors, or if pursuant to the power given them by either the Articles of Incorporation
or the By-Laws.

ISSUE:

Does the LA have jurisdiction over the case?

HELD: Under Section 25 of the Corporation Code, the corporate officers are the
president, secretary, treasurer and such other officers as may be provided in the by-
laws.

An examination of WPPs by-laws resulted in a finding that Galeras appointment as a

corporate officer (Vice-President with the operational title of Managing Director of
Mindshare) during a special meeting of WPP's Board of Directors is an appointment to
a non-existent corporate office. WPPs by-laws provided for only one Vice-President. At
the time of Galeras appointment on 31 December 1999, WPP already had one Vice-
President in the person of Webster. Galera cannot be said to be a director of WPP also
because all five directorship positions provided in the by-laws are already occupied.
Finally, WPP cannot rely on its Amended By-Laws to support its argument that Galera
is a corporate officer. The Amended By-Laws provided for more than one Vice-
President and for two additional directors. Even though WPPs stockholders voted for
the amendment on 31 May 2000, the SEC approved the amendments only on 16
February 2001. Galera was dismissed on 14 December 2000. WPP, Steedman,
Webster, and Lansang did not present any evidence that Galeras dismissal took effect
with the action of WPP's Board of Directors.

Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over
the present case.

***

WPPs dismissal of Galera lacked both substantive and procedural due process. Apart
from Steedman's letter dated 15 December 2000 to Galera, WPP failed to prove any
just or authorized cause for Galeras dismissal.

The law further requires that the employer must furnish the worker sought to be
dismissed with two written notices before termination of employment can be legally
effected: (1) notice which apprises the employee of the particular acts or omissions for
which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employers decision to dismiss him. Failure to comply with the
requirements taints the dismissal with illegality. WPPs acts clearly show that Galeras
dismissal did not comply with the two-notice rule.

***

The employment permit must be acquired prior to employment.

The law and the rules are consistent in stating that the employment permit must be
acquired prior to employment. The Labor Code states: "Any alien seeking admission to
the Philippines for employment purposes and any domestic or foreign employer who
desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor."

Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to
sanction the violation of the Philippine labor laws requiring aliens to secure work
permits before their employment. We hold that the status quo must prevail in the
present case and we leave the parties where they are. Hence, Galera is not entitled to
monetary awards. This ruling, however, does not bar Galera from seeking relief from
other jurisdictions.

GRANTED

. VIRGILIO KAWACHI, et al. v. DOMINIE DEL QUERO GR No. 163768 March 27,
2007
 TINGA, J.:
LA STILL HAS JURISDICTION OVER CLAIMS FOR DAMAGES ARISING FROM
INCIDENTS WITH REASONABLE CAUSAL CONNECTION WITH EMPLOYEE-
EMPLOYER RELATIONSHIP

FACTS:
Kawachi hired Del Quero as a clerk of A/J Raymundo Pawnshop, Inc. On August 10,
2002, Kawachi scolded Del Quero in front of many people about the way she treated
the customers of the pawnshop and afterwards terminated Del Quero from
employment without affording her due process. Del Quero charged Virgilio Kawachi,
Julius Kawachi and A/J Raymundo Pawnshop, Inc., with illegal dismissal, non-
execution of a contract of employment, violation of minimum wage law, and non-
payment of overtime pay. A few months after, Del Quero filed an action for damages
against Virgilio and Julius Kawachi before the MeTC of Quezon City. Del Quero
claimed that the August 10, 2002 incident had caused her to suffer serious
embarrassment and shame so that she could not do anything but cry because of the
shameless way by which she was terminated from the service. The Kawachis then
moved for the dismissal of the complaint on the grounds of lack of jurisdiction and
forum- shopping or splitting causes of action.

MeTC RULING: DENIED the Motion for Dismissal

It ruled that no causal connection appeared between Del Quero’s cause of action and
the employer-employee relations between the parties.

The Kawachis filed a petition for certiorari.

RTC RULING: AFFIRMED the MeTC

It upheld the jurisdiction of the MeTC over Del Quero’s complaint for damages. The
employees’ action for damages based on slanderous remarks uttered by the employer
was within the regular courts jurisdiction since the complaint did not allege any unfair
labor practice on the part of the employer.

ISSUE: Do the regular courts have jurisdiction over the claim for damages?
SC RULING:
 NO. The NLRC has jurisdiction over Del Quero’s complaint for illegal
dismissal and damages arising therefrom. She cannot be allowed to file separate or
independent civil action for damages where the alleged injury has a reasonable
connection to her termination from employment. Consequently, the action for damages
filed before the MeTC must be dismissed.

Jurisprudence has developed the reasonable causal connection rule. Under this rule, if
there is a reasonable causal connection between the claim asserted and the employer-
employee relations, then the case is within the jurisdiction of the labor courts; in the
absence of such nexus, it is the regular courts that have jurisdiction. In the instant
case, the allegations of Del Quero in her complaint for damages show that her injury
was the offshoot of Kawachi’s immediate harsh reaction as her administrative superior
to the supposedly sloppy manner by which she had discharged her duties. The
allegations in Del Quero’s complaint unmistakably relate to the manner of her alleged
illegal dismissal.
The Court further notes that for a single cause of action, the dismissed employee
cannot be allowed to sue in two forums: one, before the labor arbiter for reinstatement
and recovery of back wages; and two, before a court of justice for recovery of
damages. Suing in the manner described is known as splitting a cause of action, a
practice engendering multiplicity of actions.
BITOY JAVIER vs. FLY ACE CORPORATION/FLORDELYN CASTILLO G.R. No.
192558 February 15, 2012
 MENDOZA, J.:
Doctrine:

Whoever claims entitlement to the benefits provided by law should establish his or her
right thereto. Hence, a person who claims to be an employee must establish such
claim.

FACTS:

Javier filed a complaint before the NLRC for underpayment of salaries and other labor
standard benefits. He alleged that he was an employee of Fly Ace since September
2007, performing various tasks at the respondents warehouse such as cleaning and
arranging the canned items before their delivery to certain locations, except in
instances when he would be ordered to accompany the company’s delivery vehicles,
as pahinante; that he reported for work from Monday to Saturday from 7:00 oclock in
the morning to 5:00 oclock in the afternoon; that during his employment, he was not
issued an identification card and payslips by the company; that thereafter, Javier was
terminated from his employment without notice; and that he was neither given the
opportunity to refute the cause/s of his dismissal from work.
For its part, Fly Ace denied that Javier is its employee and averred that it was engaged
in the business of importation and sales of groceries. Javier was contracted by its
employee, Mr. Ong, as extra helper on a pakyaw basis. Mr. Ong contracted Javier
roughly 5 to 6 times only in a month whenever the vehicle of its contracted hauler,
Milmar Hauling Services, was not available.

ISSUE: Whether or not the petitioner is a an employee of Fly Ace Corporation.

RULING IN LA: Petitioner is not an employee of Fly Ace Corporation. It ruled that
Javier has no employee ID showing his employment with the Respondent nor any
document showing that he received the benefits accorded to regular employees of the
Respondents. Respondent Fly Ace is not engaged in trucking business but in the
importation and sales of groceries. Since there is a regular hauler to deliver its
products, we give credence to Respondents claim that complainant was contracted on
pakiao basis.
RULING IN NLRC: The NLRC reversed the decision of the LA and ruled that the LA
skirted the argument of Javier and immediately concluded that he was not a regular
employee simply because he failed to present proof. It was of the view that a pakyaw-
basis arrangement did not preclude the existence of employer-employee relationship.
Payment by result x x x is a method of compensation and does not define the essence
of the relation. It is a mere method of computing compensation, not a basis for
determining the existence or absence of an employer-employee relationship.

RULING IN CA:The CA annulled the NLRC findings that Javier was indeed a former
employee of Fly Ace and reinstated the dismissal of Javier’s complaint as ordered by
the LA.
SC RULING:
 NO, petitioner is not an employee of Fly Ace Corporation.

No particular form of evidence is required to prove the existence of such employer-

employee relationship. Any competent and relevant evidence to prove the relationship
may be admitted. The rule of thumb remains: the onus probandi falls on petitioner to
establish or substantiate such claim by the requisite quantum of evidence. Whoever
claims entitlement to the benefits provided by law should establish his or her right
thereto x x x. Sadly, Javier failed to adduce substantial evidence as basis for the grant
of relief.

In this case, the LA and the CA both concluded that Javier failed to establish his
employment with Fly Ace. By way of evidence on this point, all that Javier presented
were his self-serving statements purportedly showing his activities as an employee of
Fly Ace. Clearly, Javier failed to pass the substantiality requirement to support his
claim. Hence, the Court sees no reason to depart from the findings of the CA.

TENAZAS ET.AL v. R. VILLEGAS TAXI TRANSPORTATION G.R. No. 192998 April

2, 2014
 REYES, J.:
Doctrine:

The employee must present evidence to establish the existence of employer-employee

relationship.
FACTS:

Tenazas, Francisco and Edraca were complainants in a consolidated case for illegal
dismissal against R. Villegas Taxi Transport and Romualdo Villegas before the Labor
Arbiter of. In their positions papers, they alleged they were hired as taxi drivers on a
boundary system by the respondents.
1. The taxi Tenazas was driving was sideswiped by another vehicle. When he
reported the matter to the company, he was scolded by the respondents and told
to leave the garage as he was already fired.

2. Francisco alleged that he was terminated on suspicion that he was organising a

labor union, hence he was terminated without due process.

3. Isidro alleged that he was terminated when he fell short of the required boundary
after he brought his unit to an auto repair shop for an urgent repair. When he
returned to the garage his driver’s license was confiscated and he was no longer
allowed to drive a taxi despite his pleas.

In their defense, the company admitted Tenazas and Edraca were regular and spare
drivers respectively, but denied employing Francisco as a driver. Tenzas was never
terminated by the company. He was informed that his unit was due for overhaul and
advised to wait for further notice from the company if his unit was already fixed.
Despite being informed on July 8, 2007 that his unit was ready for release, Tenazas
did not return. On Edraca, the company alleged he was a spare driver of the company
from 2001, substituting whenever a driver is not around. They could not have
terminated him in 2006 since he stopped reporting for work in 2003.
LA RULING: The LA dismissed their complaint, finding no employer-employee
relationship between them and the company. The company having denied the
existence thereof, it was incumbent upon complainants to prove the existence of the
employer-employee relationship.

NLRC RULING: On appeal to the NLRC, however, the commission, relying on the
newly discovered evidence submitted by the complainant Tenazas, ruled them illegally
dismissed. It ordered payment of their back wages from the time of dismissal, as well
as payment of separation pay and attorneys fees.
CA RULING: On petition for certiorari with the CA, the latter affirmed the NLRC
judgment but deleted the award of separation pay and ordered their reinstatement. It
also deleted the award in favour of Francisco, who, the CA averred, failed to prove that
he was an employee of the respondent. Thus, the petitioners elevated their case to the
Supreme Court to review the CA decision dismissing Francisco’s complaint and
deleting the award of separation pay to the other petitioners.
ISSUE: Whether or not employer-employee relations exist between the Jaime
Francisco and the company.

SC RULING:

The petition lacks merit.Pivotal to the resolution of the instant case is the determination
of the existence of employer-employee relationship and whether there was an illegal
dismissal.
Unlike the other complainant, Tenazas who submitted proof of SSS contribution,
affidavit of co-drivers and pictures wearing company shirt, Francisco failed to present
sufficient evidence to prove regular employment such as company ID, SSS
membership, withholding tax certificates or similar articles.

The Court ruled that in determining the presence or absence of an employer-employee

relationship the following requisites must be present;

(a) (b) (c) (d)

the selection and engagement of the employee;
 the payment of

wages;
 thepowerofdismissal;and
 the employer’s power to control the employee on
the means and methods by which the work is accomplished. The last element, the so-
called control test, is the most important element.

There is no hard and fast rule designed to establish the aforesaid elements. Any
competent and relevant evidence to prove the relationship may be admitted.
Identification cards, cash vouchers, social security registration, appointment letters or
employment contracts, payrolls, organization charts, and personnel lists, serve as
evidence of employee status.
In this case, however, Francisco failed to present any proof substantial enough to
establish his relationship with the respondents.

• He failed to present any attendance logbook, payroll, SSS record or any personnel
file that could somehow depict his status as an employee;

• 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.

• There's no testimonial evidence showing the respondents’ exercise of control over

the means and methods by which he undertakes his work.

• The employment was being claimed by Emmanuel who executed an affidavit alleging
that Francisco was employed as a spare driver in his taxi garage, a fact that the
latter failed to deny or question in any of the pleadings attached to the records of
this case. 
 In Opulencia Ice Plant and Storage v. NLRC, the Court emphasized,
that there's no particular form of evidence is required to prove the existence of an
employer-employee relationship. However in this case, Francisco simply relied
on his allegation that he was an employee of the company without any other
evidence supporting his claim. 
 Hence, CA correctly ruled that Francisco could
not be considered an employee of the respondents. 
 THE CASE ALSO
DISCUSS THE APPLICATION OF BACKWAGES AND REINSTATEMENT.

 The CA’s order of reinstatement of Tenazas and Endraca, instead of the
payment of separation pay, is also well in accordance with prevailing
jurisprudence. In Macasero v. Southern Industrial Gases Philippines,14 the Court
reiterated, thus: 
 [A]n illegally dismissed employee is entitled to two reliefs:
backwages and reinstatement. The two reliefs provided are separate and distinct.
In instances where reinstatement is no longer feasible because of strained
relations between the employee and the employer, separation pay is granted. In
effect, an illegally dismissed employee is entitled to either reinstatement, if viable,
or separation pay if reinstatement is no longer viable, and backwages. 
 The
normal consequences of respondents’ illegal dismissal, then, are reinstatement
without loss of seniority rights, and payment of backwages computed from the
time compensation was withheld up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent to one
(1) month salary for every year of service should be awarded as an alternative.
The payment of separation pay is in addition to payment of backwages.
(Emphasis supplied) 
 Clearly, it is only when reinstatement is no longer feasible
that the payment of separation pay is ordered in lieu thereof. For instance, if
reinstatement would only exacerbate the tension and strained relations between
the parties, or where the relationship between the employer and the employee
has been unduly strained by reason of their irreconcilable differences, it would be
more prudent to order payment of separation pay instead of reinstatement.16

 This doctrine of strained relations, however, should not be used recklessly or
 applied loosely17 nor be based on impression alone. “It bears to stress that
reinstatement is the rule and, for the exception of strained relations to apply, it
should be proved that it is likely that if reinstated, an atmosphere of antipathy and
antagonism would be generated as to adversely affect the efficiency and
productivity of the employee concerned.”18 
 Moreover, the existence of strained
relations, it must be emphasized, is a question of fact. In Golden Ace Builders v.
Talde, the Court underscored: 
 Strained relations must be demonstrated as a
fact, however, to be adequately supported by evidence— substantial evidence to
show that the relationship between the employer and the employee is indeed
strained as a necessary consequence of the judicial controversy (Citations
omitted and emphasis ours) After a perusal of the NLRC decision, this Court
failed to find the factual basis of the award of separation pay to the petitioners.
The NLRC decision did not state the facts which demonstrate that reinstatement
is no longer a feasible option that could have justified the alternative relief of
granting separation pay instead.

The petitioners themselves likewise overlooked to allege circumstances which may

have rendered their reinstatement unlikely or unwise and even prayed for
reinstatement alongside the payment of separation pay in their position paper. A bare
claim of strained relations by reason of termination is insufficient to warrant the
granting of separation pay. Likewise, the filing of the complaint by the petitioners does
not necessarily translate to strained relations between the parties. As a rule, no
strained relations should arise from a valid and legal act asserting one’s right. Although
litigation may also engender a certain degree of hostility, the understandable strain in
the parties’ relation would not necessarily rule out reinstatement which would,
otherwise, become the rule rather the exception in illegal dismissal cases. Thus, it was
a prudent call for the CA to delete the award of separation pay and order for
reinstatement instead, in accordance with the general rule stated in Article 279 of the
Labor Code.
Finally, the Court finds the computation of the petitioners’ backwages at the rate of
P800.00 daily reasonable and just under the circumstances. The said rate is consistent
with the ruling of this Court in Hyatt Taxi Services, Inc. v. Catinoy, which dealt with the
same matter.

WHEREFORE, in view of the foregoing disquisition, the petition for review on certiorari
is DENIED. The Decision dated March 11, 2010 and Resolution dated June 28, 2010
of the Court of Appeals.
ALBERT TENG, doing business under the firm name ALBERT TENG FISH
TRADING, and EMILIA TENG- CHUA, vs. ALFREDO S. PAHAGAC, EDDIE D. NIPA,
ORLANDO P. LAYESE, HERNAN Y. BADILLES and ROGER S. PAHAGAC
 G.R.
No. 169704

November 17, 2010 BRION, J.:

FACTS: Albert Teng Fish Trading is engaged in deep sea fishing and, for this purpose,
owns boats (basnig), equipment, and other fishing paraphernalia. As owner of the
business, Teng claims that he customarily enters into joint venture agreements with
master fishermen (maestros) who are skilled and are experts in deep sea fishing; they
take charge of the management of each fishing venture, including the hiring of the
members of its complement. He avers that the maestros hired the respondent workers
as checkers to determine the volume of the fish caught in every fishing voyage

Respondent workers filed a complaint for illegal dismissal against Albert Teng Fish
Trading, Teng, and Chua before the NCMB alleging that Teng hired them, without any
written employment contract, to serve as his "eyes and ears" aboard the fishing boats;
to classify the fish caught by bañera; to report to Teng via radio communication the
classes and volume of each catch; to receive instructions from him as to where and
when to unload the catch; to prepare the list of the provisions requested by the
maestro and the mechanic for his approval; and, to procure the items as approved by
him. They also claimed that they received regular monthly salaries, 13th month pay,
Christmas bonus, and incentives in the form of shares in the total volume of fish
caught.

VA: in Teng’s favor; declared that no employer-employee relationship existed between

Teng and the respondent workers; all other claims are likewise dismissed for lack of
merit

Respondent workers received filed a motion for reconsideration.

VA: MR denied; Section 6, Rule VII of the 1989 Procedural Guidelines in the Conduct
of Voluntary Arbitration Proceedings (1989 Procedural Guidelines) does not provide
the remedy of a motion for reconsideration to the party adversely affected by the VA’s
order or decision.

CA: reversed the VA’s decision after finding sufficient evidence showing the existence
of employer-employee relationship
Teng moved to reconsider the CA’s decision, but the CA denied.

ISSUE/S: Can respondent workers file an MR from the VA's decision?

RULING: We resolve to deny the petition for lack of merit.

Yes. Article 262-A of the Labor Code does not prohibit the filing of a motion for
reconsideration. As amended, Article 263 is now Article 262-A, which states:

Art. 262-A. x x x [T]he award or decision x x x shall contain the facts and the law on
which it is based. It shall be final and executory after ten (10) calendar days from
receipt of the copy of the award or decision by the parties.

Notably, Article 262-A deleted the word "unappealable" from Article 263. The deliberate
selection of the language in the amendatory act differing from that of the original act
indicates that the legislature intended a change in the law, and the court should
endeavor to give effect to such intent.
[U]nder Section 6, Rule VII of the same guidelines implementing Article 262-A of the
Labor Code, this Decision, as a matter of course, would become final and executory
after ten (10) calendar days from receipt of copies of the decision by the parties x x x
unless, in the meantime, a motion for reconsideration or a petition for review to the
Court of Appeals under Rule 43 of the Rules of Court is filed within the same 10-day
period. We consequently rule that the respondent workers seasonably filed a motion
for reconsideration of the VA’s judgment, and the VA erred in denying the motion
because no motion for reconsideration is allowed. A contrary provision can be found in
Section 7, Rule XIX of the Department of Labor’s Department Order (DO) No. 40,
series of 2003:
 Rule XIX
 Section 7. Finality of Award/Decision. – The decision, order,
resolution or award of the voluntary arbitrator or panel of voluntary arbitrators shall be
final and executory after ten (10) calendar days from receipt of the copy of the award
or decision by the parties and it shall not be subject of a motion for reconsideration.

Presumably on the basis of DO 40-03, the 1989 Procedural Guidelines was revised in
2005 (2005 Procedural Guidelines),33 whose pertinent provisions provide that:
Rule VII – DECISIONS
 Section 6. Finality of Decisions. – The decision of the
Voluntary Arbitrator shall be final and executory after ten (10) calendar days from
receipt of the copy of the decision by the parties.
 Section 7. Motions for
Reconsideration. – The decision of the Voluntary Arbitrator is not subject of a Motion
for Reconsideration.

In the exercise of its power to promulgate implementing rules and regulations, an

implementing agency, such as the Department of Labor is restricted from going beyond
the terms of the law it seeks to implement.
By allowing a 10-day period, the obvious intent of Congress in amending Article 263 to
Article 262-A is to provide an opportunity for the party adversely affected by the VA’s
decision to seek recourse via a motion for reconsideration or a petition for review under
Rule 43 of the Rules of Court filed with the CA. Indeed, a motion for reconsideration is
the more appropriate remedy in line with the doctrine of exhaustion of administrative
remedies. Exhaustion of available remedies as a condition precedent to a petition
under that Rule.
ENCYCLOPAEDIA BRITANNICA (PHILIPPINES), INC. v. NATIONAL LABOR
RELATIONS

COMMISSION, HON. LABOR ARBITER TEODORICO L. ROGELIO and BENJAMIN

LIMJOCO
G.R. No. 87098 November 4, 1996

TORRES, JR., J.:

Doctrine:

The mere issuance of memoranda does not establish an Employer-Employee

relationship.
FACTS:

Respondent Benjami Limjoco was a Sales Division Manager of petitioner

Encyclopaedia Britannica. He was in charge of selling its products through some sales
represenatives and received commisions from the products sold by his agents. His
office expenses were deducted from his commissions and he was informed by
petitioner of appointment, promotions and transfers of employees in his district. He
resigned from the said office on 14 June 1974 to pursue his private business but on 30
October 1975, he filed a complaint against petitioner for

non-payment of separation pay and other benefits and also illegal deduction form his
sales commision.

Petitioner alleged that respondent is not its employee but an independent dealer. He
did not have any salary and his income from petitioner is depended on the volume of
sales accomplished. He also maintained his own office and his expenses are
chargeable to his commissions. Petitioner further alleges that it had no control and
supervision over the respondent. Respondent, on the other hand, alleges that he was
hired by petitioner and was assigned in the sales department with an average of Php
4,000.00 monthly as earnings. He was under the supervision of petitioner through the
issuances of memoranda, guidelines on company policies, instructions and other
orders.

ISSUE: Whether or not there is an Employer-Employee Relationship between

Encyclopaedia Britannica and Limjoco?
LA RULING:

Yes. The Labor Arbiter ruled that Limjoco was under the control of the petitioner since
he was required to make periodic reports of his sales activities to the company and all
transactions were subject to the final approval of the petitioner.
NLRC RULING:
Yes. The NLRC found no evidence supporting the allegation that Limjoco was an
independent contractor or dealer. The petitioner dictated Limjoco how and where to
sell its products.
SC RULING:
 No. The fact that petitioner issued memoranda to Limjoco and to other
division sales managers did not prove that petitioner had actual control over them.
These were merely guidelines on company policies, which the sales managers follow
and impose on their respective agents. Independent authorized agents who did not
receive regular compensations but commissions based on the sale of products
primarily conducted the sales operation. They also financed their own expenses and
maintained their own staff.

The prices of the products may have been fixed but the independent agents still had
free rein in the means and methods for conducting the marketing operations. He was
free to conduct his work and he was free to engage in other means of livelihood. In
fact, he was also a director and later president of the Farmers Rural Bank while he was
connected with the petitioner.
COCA-COLA BOTTLERS PHILS., INC. v. CLIMACO G.R. No. 146881 February 5,
2007 AZCUNA, J.

Doctrine:
The Court, in determining the existence of an employer-employee relationship, has
invariably adhered to the four-fold test: (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, or the so-called “control test”, considered to be the
most important element. The issuance by the principal of guidelines does not establish
control by principal.

FACTS:
Dr. Climaco is a medical doctor who was hired by the petitioner by virtue of retainer
agreement. The agreement states that there is no employer-employee relationship
between the parties. The retainer agreement was renewed annually. The last one
expired on Dec. 31, 1993. Despite of the non-renewal of the agreement, respondent
continued to perform his functions as company doctor until he received a letter in
March 1995 concluding their retainer agreement.

Respondent filed a complaint before the NLRC seeking recognition as a regular

employee of the petitioner company and prayed for the payment of all benefits of a
regular employee.
ISSUE: Whether or not an employer-employee relationship existed between petitioner
Coca-Cola Bottlers and respondent Dr. Climaco.

LA AND NLRC RULING: The Labor Arbiter and the NLRC found that the company
lacked the power of control over Dr. Climaco, therefore no employer-employee
relationship existed.

CA RULING: Court of Appeals ruled that there existed an employer-employee

relationship. It held that Coca- Cola’s power to control petitioner is present because the
particular objectives and activities to be observed and accomplished by the latter are
fixed and set under the Comprehensive Medical Plan which was made an integral part
of the retainer agreement. Moreover, the times for accomplishing these objectives and
activities are likewise controlled and determined by the company. Petitioner is subject
to definite hours of work, and due to this, he performs his duties to Coca-Cola not at
his own pleasure but according to the schedule dictated by the company.”

The CA added that Dr. Climaco should be classified as a regular employee having
rendered 6 years of service as plant physician by virtue of several renewed retainer
agreements.

SC RULING:
The court held no, upholding the decisions of both the LA and the NLRC. The Court, in
determining the existence of an employer-employee relationship, has invariably
adhered to the four-fold test: (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, or the so-called "control test," considered to be the most
important element.

The Labor Arbiter and the NLRC correctly found that Coca Cola lacked the power of
control over the performance by respondent of his duties. The petitioner company,
through the Comprehensive Medical Plan, provided guidelines merely to ensure that
the end result was achieved, but did not control the means and methods by which
respondent performed his assigned tasks.
The NLRC affirmed the findings of the Labor Arbiter and stated that it is precisely
because the company lacks the power of control that the contract provides that
respondent shall be directly responsible to the employee concerned and their
dependents for any injury, harm or damage caused through professional negligence,
incompetence or other valid causes of action.
In addition, the Court finds that the schedule of work and the requirement to be on call
for emergency cases do not amount to such control, but are necessary incidents to the
Retainership Agreement.
The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with
the employment of respondent as a retained physician of petitioner company and
upholds the validity of the Retainership Agreement which clearly stated that no
employer-employee relationship existed between the parties.

ANGEL JARDIN vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and

GOODMAN TAXI (PHILJAMA INTERNATIONAL, INC.)
 G.R. No. 119268 February
23, 2000
 QUISUMBING, J.

FACTS:
Petitioners were drivers of private respondent, Philjama International Inc., a domestic
corporation engaged in the operation of "Goodman Taxi." Petitioners used to drive
private respondent's taxicabs every other day on a 24-hour work schedule under the
boundary system. Under this arrangement, the petitioners earned an average of
P400.00 daily. Nevertheless, private respondent admittedly regularly deducts from
petitioners, daily earnings the amount of P30.00 supposedly for the washing of the taxi
units. Believing that the deduction is illegal, petitioners decided to form a labor union to
protect their rights and interests.

Upon learning about the plan of petitioners, private respondent refused to let
petitioners drive their taxicabs when they reported for work on August 6, 1991, and on
succeeding days. Petitioners suspected that they were singled out because they were
the leaders and active members of the proposed union. Aggrieved, petitioners filed
with the labor arbiter a complaint against private respondent for unfair labor practice,
illegal dismissal and illegal deduction of washing fees.

ISSUE: Whether or not petitioners are employees of the respondent.

LA RULING: Dismissed the complaint for lack of merit.

NLRC RULING: At first, the NLRC reversed and set aside the judgment of the LA and
declared that petitioners are employees of private respondent, and as such, their
dismissal must be for just cause and after due process.
However, after TWO motions for reconsideration, the NLRC ruled that it lacks
jurisdiction over the case as petitioners and private respondent have NO employer
employee relationship. It held that the relationship of the parties is leasehold which is
covered by the Civil Code rather than the Labor Code.

SC RULING:

The petition is impressed with merit. The SC declared that the NLRC should not have
entertained the respondent's second motion for reconsideration, the same being a
prohibited pleading under the NLRC rules.
As to the substantive issue, the SC ruled as follows:

In a number of cases decided by this Court, we ruled that the relationship between
jeepney owners/operators on one hand and jeepney drivers on the other under the
boundary system is that of employer-employee and not of lessor-lessee. We explained
that in the lease of chattels, the lessor loses complete control over the chattel leased
although the lessee cannot be reckless in the use thereof, otherwise he would be
responsible for the damages to the lessor.

In the case of jeepney owners/operators and jeepney drivers, the former exercise
supervision and
control over the latter. The management of the business is in the owner's hands. The
owner as holder of the certificate of public convenience must see to it that the driver
follows the route prescribed by the franchising authority and the rules promulgated as
regards its operation. Now, the fact that the drivers do not receive fixed wages but get
only that in excess of the so-called "boundary" they pay to the owner/operator is not
sufficient to withdraw the relationship between them from that of employer and
employee. We have applied by analogy the abovestated doctrine to the relationships
between bus owner/operator and bus conductor,auto-calesaowner/operator and driver,
and recently between taxi owners/operators and taxi drivers. Hence, petitioners are
undoubtedly employees of private respondent because as taxi drivers they perform
activities which are usually necessary or desirable in the usual business or trade of
their employer.

SOUTH EAST INTERNATIONAL RATTAN, INC. and/or ESTANISLAO AGBAY,

Petitioners, v. JESUS J. COMING, Respondent.

VILLARAMA, JR., J.:

FACTS:

Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation

engaged in the business of manufacturing and exporting furniture to various countries
with principal place of business at Paknaan, Mandaue City, while petitioner
EstanislaoAgbay, as per records, is the President and General Manager of SEIRI.

Respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of

wages, non-payment of holiday pay, 13th month pay and service incentive leave pay,
with prayer for reinstatement, back wages, damages and attorney fees against
Petitioner.

Respondent alleged that on March 17, 1984, petitioners hired him as Sizing Machine
Operator. He worked from 8:00 a.m. to 5:00 p.m. At first, his compensation was on
span class="SpellE">pakiaobasis but sometime in June 1984, it was fixed at P150.00
per day paid to him on a weekly basis. In 1990, without any apparent reason, his
employment was interrupted as he was told by petitioners to resume work in two
months time. Being an uneducated person, respondent was persuaded by the
management as well as his brother not to complain, as otherwise petitioners might
decide not to call him back for work. Fearing such consequence, respondent accepted
his fate. Nonetheless, after two months he reported back to work upon order of
management.

Despite being an employee for many years with his work performance never
questioned by petitioners, respondent was dismissed on January 1, 2002 without
lawful cause. He was told that he will be terminated because the company is not doing
well financially and that he would be called back to work only if they need his services
again. Respondent waited for almost a year but petitioners did not call him back to
work. He filed the complaint before the regional arbitration branch.

As their defense, petitioners denied having hired respondent asserting that SEIRI was
incorporated only in 1986, and that respondent actually worked for SEIRI furniture
suppliers because when the company started in 1987 it was engaged purely in buying
and exporting furniture and its business operations were suspended from the last
quarter of 1989 to August 1992. They stressed that respondent was not included in the
list of employees submitted to the Social Security System (SSS). Moreover,
respondent brother, Vicente Coming, executed an affidavit8 in support of
petitionersposition while Allan Mayol and Faustino Apondarissued notarized
certifications9 that respondent worked for them instead.

The Labor Arbiter ruled that respondent is a regular employee of SEIRI and that the
termination of his employment was illegal.

Petitioners appealed to the National Labor Relations Commission (NLRC)-Cebu City.

The NLRC set aside the decision of the LA compelling the respondent to file a petition
for certiorari under Rule 65 before the Court of Appeals. The CA ruled in favor of the
respondent and declared that there existed an employer-employee relationship
between petitioners and respondent who was dismissed without just and valid cause.
Petitioners moved for reconsideration but the same was denied. Hence, the present
petition for review on certiorari.

ISSUE: Whether or not there exists an employer-employee relationship between the

petitioners and the respondent?

HELD: The Court sustains that Decision of the Court of Appeals.

LABOR LAW: employer-employee relationship

In order to establish the existence of an employer-employee relationship, the four-fold

test is used, to wit: (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
conduct, or the so-called ontrol test.

In resolving the issue of whether such relationship exists in a given case, substantial
evidence or that amount of relevant evidence, which a reasonable mind might accept,
as adequate to justify a conclusion is sufficient.

The petitioners presented the following to support their stance that respondent is not
their employee: (1) Employment Reports to the SSS from 1987 to 2002; (2) the
Certifications issued by Mayol and Apondar; (3) two affidavits of Vicente Coming; (4)
payroll sheets (1999-2000); (5) individual pay envelopes and employee earnings
records (1999-2000); (6) and affidavit of Angelina Agbay(Treasurer and Human
Resources Officer).

The respondent, on the other hand, submitted the affidavit executed by Eleoterio
Brigoli, Pedro Brigoli, Napoleon Coming, EfrenComing and Gil Coming who all attested
that respondent was their co-worker at SEIRI.

The Court in Tan v. Lagrama, 436 Phil. 190, held that the fact that a worker was not
reported as an employee to the SSS is not conclusive proof of the absence of
employer-employee relationship. Otherwise, an employer would be rewarded for his
failure or even neglect to perform his obligation. Nor does the fact that respondent
name does not appear in the payrolls and pay envelope records submitted by
petitioners negate the existence of employer-employee relationship.

As a regular employee, respondent enjoys the right to security of tenure under Article
279 of the Labor Code and may only be dismissed for just or authorized causes.
Otherwise, the dismissal becomes illegal.

Since respondent dismissal was without valid cause, he is entitled to reinstatement

without loss of seniority rights and other privileges and to his full back wages, inclusive
of allowances and other benefits of their monetary equivalent, computed from the time
his compensation was withheld from him up to the time of his actual reinstatement.

However, where reinstatement is no long feasible as an option, back wages shall be

computed from the time of the illegal termination up to the finality of the decision. As an
alternative to this, separation pay equivalent to one month salary for every year of
service should likewise be awarded in case reinstatement is not possible.

The present petition for review on certiorari is DENIED

LVN PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild (FFW) & COURT
OFINDUSTRIALRELATIONSSAMPAGUITA PICTURES, INC. vs. PHILIPPINE
MUSICIANS Guild (FFW) & COURT OFINDUSTRIALRELATIONSFACTS:Respondent
Philippine Musicians Guild (FFW) is a duly registered legitimate labororganization. LVN
Pictures, Inc., Sampaguita Pictures, Inc., and PremiereProductions, Inc. are corporations,
duly organized under the Philippine laws,engaged in the making of motion pictures and in
the processing and distributionthereof. Petitioner companies employ musicians for the
purpose of making musicrecordings for title music, background music, musical
numbers, finale music andother incidental music, without which a motion picture is
incomplete. Ninety-five(95%) percent of all the musicians playing for the musical
recordings of saidcompanies are members of the Guild. The Guild has no knowledge
of the existence of any other legitimate labororganization representing musicians in
said companies. Premised upon theseallegations, the Guild prayed that it be certified
as the sole and exclusive bargainingagency for all musicians working in the
aforementioned companies. In theirrespective answers, the latter denied that they have
any musicians as employees,and alleged that the musical numbers in the filing of the
companies are furnishedby independent contractors. The lower court sustained the Guild’s theory.
Areconsideration of the order complained of having been denied by the Court
enbanc,LVN Pictures, inc., and Sampaguita Pictures, Inc., filed these petitions forreview
for certiorari.ISSUE:Whether the musicians in question(Guild members) are “employees
“of thepetitioner film companies.RULING: YES The Court agreed with the lower court’s
decision, to wit:Lower court resorted to apply R.A. 875 and US Laws and jurisprudence from
whichsaid Act was patterned after. (Since statutes are to be construed in the light
of purposes achieved and the evils sought to be remedied). It ruled that the work of the
musical director and musicians is a functional and integral part of the enterpriseperformed at the
same studio substantially under the direction and control of thecompany.In other words,
to determine whether a person who performs work for another isthe latter's employee
or an independent contractor, the National Labor Relations

relies on 'the right to control' test . Under this test an employer-employeerelationship

exist where the person for whom the services are performed reservesthe right to
control not only the end to be achieved, but also the manner and meansto be used in
reaching the end. (United InsuranceCompany, 108, NLRB No. 115.).Notwithstanding
that the employees are called independent contractors', the Boardwill hold them to be
employees under the Act where the extent of the employer'scontrol over them indicates
that the relationship is in reality one of employment.(John Hancock Insurance Co.,
2375-D, 1940, Teller, Labor Dispute CollectiveBargaining, Vol.). The right of control of
the film company over the musicians is shown (1) by callingthe musicians through 'call
slips' in 'the name of the company; (2) by arrangingschedules in its studio for recording
sessions; (3) by furnishing transportation andmeals to musicians; and(4) by supervising and
directing in detail, through themotion picture director, the performance of the musicians
before the camera, inorder to suit the music they are playing to the picture which is
being flashed on thescreen. The “musical directors” have no such control over the
musicians involved in thepresent case. Said musical directors control neither the music
to be played, nor themusicians playing it. The Premier Production did not appeal the
decision of theCourt en banc (that’s why it’s not one of the petitioners in the case) film
companiessummon the musicians to work, through the musical directors. The film
companies,through the musical directors, fix the date, the time and the place of work.
The filmcompanies, not the musical directors, provide the transportation to and from
thestudio. The film companies furnish meal at dinner time. It is well settled that
"anemployer-employee relationship exists . . .where the person for whom the
servicesare performed reserves a right to control not only the end to be achieved but
alsothe means to be used in reaching such end . . . ." The decisive nature of said control
over the "means to be used", is illustrated in thecase of Gilchrist Timber Co., et al., in
which, by reason of said control, the employer-employee relationship was held to exist
between the management and the workers,notwithstanding the intervention of an
alleged independent contractor, who had,and exercise, the power to hire and fire said
workers. The aforementioned control over the means to be used" in reading the
desired endis possessed andexercised by the film companies over the musicians in the
casesbefore us.WHEREFORE, the order appealed from is hereby affirmed, with costs
againstpetitioners herein. It is so ordere

G.R. No. L-32245 May 25, 1979

DY KEH BENG, petitioner,

vs.
INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL.,
respondents.

Facts:

A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket
factory, for discriminatory acts within the meaning of Section 4(a), sub-paragraph (1)
and (4). Republic Act No. 875, by dismissing on September 28 and 29, 1960,
respectively, Carlos N. Solano and Ricardo Tudla for their union activities.

After preliminary investigation was conducted, a case was filed in the Court of
Industrial Relations for in behalf of the International Labor and Marine Union of the
Philippines and two of its members, Solano and Tudla In his answer, Dy Keh Beng
contended that he did not know Tudla and that Solano was not his employee because
the latter came to the establishment only when there was work which he did on pakiaw
basis, each piece of work being done under a separate contract. Moreover, Dy Keh
Beng countered with a special defense of simple extortion committed by the head of
the labor union, Bienvenido Onayan.

According to Dy Keh Beng, however, Solano was not his employee for the following
reasons:

(1) Solano never stayed long enought at Dy's establishment;

(2) Solano had to leave as soon as he was through with the
(3) order given him by Dy;
(4) When there were no orders needing his services there was nothing for him to do;
(5) When orders came to the shop that his regular workers could not fill it was then that
Dy went to his address in Caloocan and fetched him for these orders; and
(6) Solano's work with Dy's establishment was not continuous.

Issue:

Whether there existed an employee-employer relation between petitioner Dy Keh Beng

and the respondents Solano and Tudla.

Ruling:

The Hearing Examiner prepared a report which was subsequently adopted in toto by
the Court of Industrial Relations. An employee-employer relationship was found to
have existed between Dy Keh Beng and complainants Tudla and Solano, although
Solano was admitted to have worked on piece basis. According to the Hearing
Examiner, the evidence for the complainant Union tended to show that Solano and
Tudla became employees of Dy Keh Beng from May 2, 1953 and July 15, 1955,
respectively, and that except in the event of illness, their work with the establishment
was continuous although their services were compensated on piece basis. Evidence
likewise showed that at times the establishment had eight (8) workers and never less
than five (5); including the complainants, and that complainants used to receive P5.00
a day. Sometimes less.

The award of backwages granted by the Court of Industrial Relations is herein modified
to an award of backwages for three years without qualification and deduction at the
respective rates of compensation the employees concerned were receiving at the time
of dismissal. The execution of this award is entrusted to the National Labor Relations
Commission. Costs against petitioner.

Insular Life Assurance v. NLRC and Melecio Basiao (G.R. No. 84484)
Date: August 12, 2016Author: jaicdn 0 Comments

Facts:

Petitioner Insular Life entered into a contract with respondent Basiao where the latter is
authorized to solicit for insurance policies. Sometime later, the parties entered into
another contract which caused Basiao to organize an agency in order to fulfill its terms.
The contract being subsequently terminated by petitioner, Basiao sued the latter which
prompted also for the termination of their engagement under the first contract. Basiao
thus filed before the Ministry of Labor seeking to recover alleged unpaid commissions.
Petitioner contends that Basiao is not an employee but an independent contractor for
which they have no obligation to pay said commissions. The Labor Arbiter found for
Basiao ruling that there exists employer-employee relationship between him and
petitioner. NLRC affirmed.
Issue:

Whether or not employer-employee relationship existed between petitioner and Basiao.

Ruling: NO.

In determining the existence of employer-employee relationship, the following elements

are generally considered, namely: (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
employees’ conduct — although the latter is the most important element. It should,
however, be obvious that not every form of control that the hiring party reserves to
himself over the conduct of the party hired in relation to the services rendered may be
accorded the effect of establishing an employer-employee relationship between them
in the legal or technical sense of the term.

Rules and regulations governing the conduct of the business are provided for in the
Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual
and expected for an insurance company to promulgate a set of rules to guide its
commission agents in selling its policies that they may not run afoul of the law and
what it requires or prohibits. None of these really invades the agent’s contractual
prerogative to adopt his own selling methods or to sell insurance at his own time and
convenience, hence cannot justifiably be said to establish an employer-employee
relationship between him and the company.

The Court, therefore, rules that under the contract invoked by him, Basiao was not an
employee of the petitioner, but a commission agent, an independent contractor whose
claim for unpaid commissions should have been litigated in an ordinary civil action

Tongko v. Manufacturers’ Life Insurance & De Dios

Facts:
The contractual relationship between Tongko and Manulife had two basic phases. The
first or initial phase began on July 1, 1977, under a Career Agent’s Agreement that
provided:
It is understood and agreed that the Agent is an independent contractor and nothing
contained herein shall be construed or interpreted as creating an employer-employee
relationship between the Company and the Agent.
a) The Agent shall canvass for applications for Life Insurance, Annuities, Group
policies and other products offered by the Company, and collect, in exchange for
provisional receipts issued by the Agent, money due to or become due to the Company
in respect of applications or policies obtained by or through the Agent or from
policyholders allotted by the Company to the Agent for servicing, subject to subsequent
confirmation of receipt of payment by the Company as evidenced by an Official Receipt
issued by the Company directly to the policyholder.
The Company may terminate this Agreement for any breach or violation of any of the
provisions hereof by the Agent by giving written notice to the Agent within fifteen (15)
days from the time of the discovery of the breach. No waiver, extinguishment,
abandonment, withdrawal or cancellation of the right to terminate this Agreement by
the Company shall be construed for any previous failure to exercise its right under any
provision of this Agreement.
Either of the parties hereto may likewise terminate his Agreement at any time without
cause, by giving to the other party fifteen (15) days notice in writing.

Tongko additionally agreed (1) to comply with all regulations and requirements of
Manulife, and (2) to maintain a standard of knowledge and competency in the sale of
Manulife’s products, satisfactory to Manulife and sufficient to meet the volume of the
new business, required by his Production Club membership.

The second phase started in 1983 when Tongko was named Unit Manager in
Manulife’s Sales Agency Organization. In 1990, he became a Branch Manager. Six
years later, Tongko became a Regional Sales Manager.

Tongko’s gross earnings consisted of commissions, persistency income, and

management overrides. Since the beginning, Tongko consistently declared himself
self-employed in his income tax returns. Thus, under oath, he declared his gross
business income and deducted his business expenses to arrive at his taxable business
income. Manulife withheld the corresponding 10% tax on Tongko’s earnings.

De Dios addressed a letter to Tongko stating that the former found the latter’s views
and comments unaligned with the directions the company was taking. The allegations
stated that some Managers were unhappy with their earnings. However, no Managers
confirmed the said allegations. De Dios worried about Tongko’s inability to push for the
company’s development and growth.

Subsequently, de Dios wrote Tongko another letter terminating Tongko’s services.

Tongko responded by filing an illegal dismissal complaint with the NLRC Arbitration
Branch. He essentially alleged – despite the clear terms of the letter terminating his
Agency Agreement – that he was Manulife’s employee before he was illegally
dismissed.

Tongko asserted that as Unit Manager, he was paid an annual over-rider not
exceeding ₱50,000.00, regardless of production levels attained and exclusive of
commissions and bonuses. He also claimed that as Regional Sales Manager, he was
given a travel and entertainment allowance of ₱36,000.00 per year in addition to his
overriding commissions; he was tasked with numerous administrative functions and
supervisory authority over Manulife’s employees, aside from merely selling policies and
recruiting agents for Manulife; and he recommended and recruited insurance agents
subject to vetting and approval by Manulife. He further alleges that he was assigned a
definite place in the Manulife offices when he was not in the field for which he never
paid any rental. Manulife provided the office equipment he used, and paid for the
electricity, water and telephone bills. As Regional Sales Manager, Tongko additionally
asserts that he was required to follow at least three codes of conduct.

Manulife argues that Tongko had no fixed wage or salary. Under the Agreement,
Tongko was paid commissions of varying amounts, computed based on the premium
paid in full and actually received by Manulife on policies obtained through an agent. As
sales manager, Tongko was paid overriding sales commission derived from sales
made by agents under his unit/structure/branch/region. Manulife also points out that it
deducted and withheld a 10% tax from all commissions Tongko received; Tongko even
declared himself to be self-employed and consistently paid taxes as such—i.e., he
availed of tax deductions such as ordinary and necessary trade, business and
professional expenses to which a business is entitled.

Manulife asserts that the labor tribunals have no jurisdiction over Tongko’s claim as he
was not its employee as characterized in the four-fold test.

The labor arbiter decreed that no employer-employee relationship existed between the
parties. However, the NLRC reversed the labor arbiter’s decision on appeal; it found
the existence of an employer-employee relationship and concluded that Tongko had
been illegally dismissed. In the petition for certiorari with the CA, the appellate court
found that the NLRC gravely abused its discretion in its ruling and reverted to the labor
arbiter’s decision that no employer-employee relationship existed between Tongko and
Manulife.

In the Supreme Court’s Decision of November 7, 2008, the Court reversed the CA
ruling and found that an employment relationship existed between Tongko and
Manulife for the following reasons:
1. Our ruling in the first Insular case did not foreclose the possibility of an insurance
agent becoming an employee of an insurance company; if evidence exists showing
that the company promulgated rules or regulations that effectively controlled or
restricted an insurance agent’s choice of methods or the methods themselves in selling
insurance, an employer-employee relationship would be present. The determination of
the existence of an employer-employee relationship is thus on a case-to-case basis
depending on the evidence on record.

2. Manulife had the power of control over Tongko, sufficient to characterize him as an
employee, as shown by the following indicators:

2.1 Tongko undertook to comply with Manulife’s rules, regulations and other
requirements, i.e., the different codes of conduct such as the Agent Code of Conduct,
the Manulife Financial Code of Conduct, and the Financial Code of Conduct
Agreement;
2.2 The various affidavits of Manulife’s insurance agents and managers, who occupied
similar positions as Tongko, showed that they performed administrative duties that
established employment with Manulife;12 and

2.3 Tongko was tasked to recruit some agents in addition to his other administrative
functions. De Dios’ letter harped on the direction Manulife intended to take, viz.,
greater agency recruitment as the primary means to sell more policies; Tongko’s
alleged failure to follow this directive led to the termination of his employment with
Manulife.

Manulife disagreed filed the present motion for reconsideration for the following
grounds:
1. The November 7[, 2008] Decision violates Manulife’s right to due process by: (a)
confining the review only to the issue of "control" and utterly disregarding all the other
issues that had been joined in this case; (b) mischaracterizing the divergence of
conclusions between the CA and the NLRC decisions as confined only to that on
"control"; (c) grossly failing to consider the findings and conclusions of the CA on the
majority of the material evidence, especially [Tongko’s] declaration in his income tax
returns that he was a "business person" or "self-employed"; and (d) allowing [Tongko]
to repudiate his sworn statement in a public document.

2. The November 7[, 2008] Decision contravenes settled rules in contract law and
agency, distorts not only the legal relationships of agencies to sell but also
distributorship and franchising, and ignores the constitutional and policy context of
contract law vis-à-vis labor law.

3. The November 7[, 2008] Decision ignores the findings of the CA on the three
elements of the four-fold test other than the "control" test, reverses well-settled
doctrines of law on employer-employee relationships, and grossly misapplies the
"control test," by selecting, without basis, a few items of evidence to the exclusion of
more material evidence to support its conclusion that there is "control."

4. The November 7[, 2008] Decision is judicial legislation, beyond the scope authorized
by Articles 8 and 9 of the Civil Code, beyond the powers granted to this Court under
Article VIII, Section 1 of the Constitution and contravenes through judicial legislation,
the constitutional prohibition against impairment of contracts under Article III, Section
10 of the Constitution.

5. For all the above reasons, the November 7[, 2008] Decision made unsustainable
and reversible errors, which should be corrected, in concluding that Respondent
Manulife and Petitioner had an employer-employee relationship, that Respondent
Manulife illegally dismissed Petitioner, and for consequently ordering Respondent
Manulife to pay Petitioner backwages, separation pay, nominal damages and
attorney’s fees.

Issue:
Whether or not there is an existing employer-employee relationship.

Held:
The primary evidence in the present case is the July 1, 1977 Agreement that governed
and defined the parties’ relations until the Agreement’s termination in 2001. This
Agreement stood for more than two decades and, based on the records of the case,
was never modified or novated. It assumes primacy because it directly dealt with the
nature of the parties’ relationship up to the very end; moreover, both parties never
disputed its authenticity or the accuracy of its terms.

By the Agreement’s express terms, Tongko served as an "insurance agent" for

Manulife, not as an employee. To be sure, the Agreement’s legal characterization of
the nature of the relationship cannot be conclusive and binding on the courts; the
characterization of the juridical relationship the Agreement embodied is a matter of law
that is for the courts to determine. At the same time, though, the characterization the
parties gave to their relationship in the Agreement cannot simply be brushed aside
because it embodies their intent at the time they entered the Agreement, and they
were governed by this understanding throughout their relationship. At the very least,
the provision on the absence of employer-employee relationship between the parties
can be an aid in considering the Agreement and its implementation, and in
appreciating the other evidence on record.

Evidence shows that Tongko’s role as an insurance agent never changed during his
relationship with Manulife. If changes occurred at all, the changes did not appear to be
in the nature of their core relationship. Tongko essentially remained an agent, but
moved up in this role through Manulife’s recognition that he could use other agents
approved by Manulife, but operating under his guidance and in whose commissions he
had a share. For want of a better term, Tongko perhaps could be labeled as a "lead
agent" who guided under his wing other Manulife agents similarly tasked with the
selling of Manulife insurance.
Evidence suggests that these other agents operated under their own agency
agreements. Thus, if Tongko’s compensation scheme changed at all during his
relationship with Manulife, the change was solely for purposes of crediting him with his
share in the commissions the agents under his wing generated. As an agent who was
recruiting and guiding other insurance agents, Tongko likewise moved up in terms of
the reimbursement of expenses he incurred in the course of his lead agency, a
prerogative he enjoyed pursuant to Article 1912 of the Civil Code. Thus, Tongko
received greater reimbursements for his expenses and was even allowed to use
Manulife facilities in his interactions with the agents, all of whom were, in the strict
sense, Manulife agents approved and certified as such by Manulife with the Insurance
Commission.

There case is the lack of evidence on record showing that Manulife ever exercised
means-and-manner control, even to a limited extent, over Tongko during his ascent in
Manulife’s sales ladder. In 1983, Tongko was appointed unit manager. Inexplicably,
Tongko never bothered to present any evidence at all on what this designation meant.
This also holds true for Tongko’s appointment as branch manager in 1990, and as
Regional Sales Manager in 1996. The best evidence of control – the agreement or
directive relating to Tongko’s duties and responsibilities – was never introduced as part
of the records of the case. The reality is, prior to de Dios’ letter, Manulife had
practically left Tongko alone not only in doing the business of selling insurance, but
also in guiding the agents under his wing.

The mere presentation of codes or of rules and regulations, however, is not per se
indicative of labor law control as the law and jurisprudence teach us.

Insurance Code imposes obligations on both the insurance company and its agents in
the performance of their respective obligations under the Code, particularly on licenses
and their renewals, on the representations to be made to potential customers, the
collection of premiums, on the delivery of insurance policies, on the matter of
compensation, and on measures to ensure ethical business practice in the industry.

The general law on agency, on the other hand, expressly allows the principal an
element of control over the agent in a manner consistent with an agency relationship.
In this sense, these control measures cannot be read as indicative of labor law control.
Foremost among these are the directives that the principal may impose on the agent to
achieve the assigned tasks, to the extent that they do not involve the means and
manner of undertaking these tasks. The law likewise obligates the agent to render an
account; in this sense, the principal may impose on the agent specific instructions on
how an account shall be made, particularly on the matter of expenses and
reimbursements. To these extents, control can be imposed through rules and
regulations without intruding into the labor law concept of control for purposes of
employment.

According to the Insular Life case, a commitment to abide by the rules and regulations
of an insurance company does not ipso facto make the insurance agent an employee.
Neither do guidelines somehow restrictive of the insurance agent’s conduct necessarily
indicate "control" as this term is defined in jurisprudence. Guidelines indicative of labor
law "control," as the first Insular Life case tells us, should not merely relate to the
mutually desirable result intended by the contractual relationship; they must have the
nature of dictating the means or methods to be employed in attaining the result, or of
fixing the methodology and of binding or restricting the party hired to the use of these
means. In fact, results-wise, the principal can impose production quotas and can
determine how many agents, with specific territories, ought to be employed to achieve
the company’s objectives. These are management policy decisions that the labor law
element of control cannot reach.

Aside from these affidavits however, no other evidence exists regarding the effects of
Tongko’s additional roles in Manulife’s sales operations on the contractual relationship
between them.

A "coordinative" standard for a manager cannot be indicative of control; the standard

only essentially describes what a Branch Manager is – the person in the lead who
orchestrates activities within the group. To "coordinate," and thereby to lead and to
orchestrate, is not so much a matter of control by Manulife; it is simply a statement of a
branch manager’s role in relation with his agents from the point of view of Manulife
whose business Tongko’s sales group carries.

The following portions of the affidavit of Regional Sales Manager John Chua, with
counterparts in the other affidavits, were not brought out in the Decision of November
7, 2008, while the other portions suggesting labor law control were highlighted.
Specifically, the following portions of the affidavits were not brought out:
1.a. I have no fixed wages or salary since my services are compensated by way of
commissions based on the computed premiums paid in full on the policies obtained
thereat;

1.b. I have no fixed working hours and employ my own method in soliticing insurance
at a time and place I see fit;

1.c. I have my own assistant and messenger who handle my daily work load;

1.d. I use my own facilities, tools, materials and supplies in carrying out my business of
selling insurance;

xxxx

6. I have my own staff that handles the day to day operations of my office;

7. My staff are my own employees and received salaries from me;

xxxx

9. My commission and incentives are all reported to the Bureau of Internal Revenue
(BIR) as income by a self-employed individual or professional with a ten (10) percent
creditable withholding tax. I also remit monthly for professionals.
These statements, read with the above comparative analysis of the Manulife and
the Grepalife cases, would have readily yielded the conclusion that no employer-
employee relationship existed between Manulife and Tongko.

Even de Dios’ letter is not determinative of control as it indicates the least amount of
intrusion into Tongko’s exercise of his role as manager in guiding the sales agents.
Strictly viewed, de Dios’ directives are merely operational guidelines on how Tongko
could align his operations with Manulife’s re-directed goal of being a "big league
player." The method is to expand coverage through the use of more agents. This
requirement for the recruitment of more agents is not a means-and-method control as it
relates, more than anything else, and is directly relevant, to Manulife’s objective of
expanded business operations through the use of a bigger sales force whose members
are all on a principal-agent relationship. Tongko was not supervising regular full-time
employees of Manulife engaged in the running of the insurance business; Tongko was
effectively guiding his corps of sales agents, who are bound to Manulife through the
same Agreement that he had with Manulife, all the while sharing in these agents’
commissions through his overrides. This is the lead agent concept mentioned above
for want of a more appropriate term, since the title of Branch Manager used by the
parties is really a misnomer given that what is involved is not a specific regular branch
of the company but a corps of non-employed agents, defined in terms of covered
territory, through which the company sells insurance. Tongko was not even setting
policies in the way a regular company manager does; company aims and objectives
were simply relayed to him with suggestions on how these objectives can be reached
through the expansion of a non-employee sales force.

What happened in Tongko’s case was the grant of an expanded sales agency role that
recognized him as leader amongst agents in an area that Manulife defined.

Under this legal situation, the only conclusion that can be made is that the absence of
evidence showing Manulife’s control over Tongko’s contractual duties points to the
absence of any employer-employee relationship between Tongko and Manulife. In the
context of the established evidence, Tongko remained an agent all along; although his
subsequent duties made him a lead agent with leadership role, he was nevertheless
only an agent whose basic contract yields no evidence of means-and-manner control.

The the sufficiency of Tongko’s failure to comply with the guidelines of de Dios’ letter,
as a ground for termination of Tongko’s agency, is a matter that the labor tribunals
cannot rule upon in the absence of an employer-employee relationship. Jurisdiction
over the matter belongs to the courts applying the laws of insurance, agency and
contracts.
Reso: Tongko vs Manulife (GR No. 167622 January 25, 2011)

Tongko vs Manufacturer’s Life Insurance Co.

GR No. 167622 January 25, 2011

Issue: Whether or not petitioner as insurance agent is an employee of respondent

company.

Held: No. Based on the evidence on record, the petitioner’s occupation was to sell
Manulife’s insurance policies and products from 1977 until the termination of the career
agent’s agreement. The evidence also shows that through the years, Manulife
permitted him to exercise guiding authority over other agents who operate under their
own agency agreements with Manulife and whose commissions he shared. Under this
scheme — an agreement that pervades the insurance industry — petitioner in effect
became a “lead agent” and his own commissions increased as they included his share
in the commissions of the other agents; he also receive greater reimbursement for
expenses and was allowed to use Manulife’s facilities. His designation also changed
from unit manager to branch manager and then to regional sales manager, to reflect
the increase in the number of agents he recruited and guided, as well as the increase
in the area where these agents operated.

In our June 29, 2010 resolution, we noted that there are built in elements of control
specific to an insurance agency, which do not amount to the elements of control that
characterizes an employment relationship governed by the labor code. The insurance
code provides definite parameters in the way an agent negotiates for the sale of the
company’s insurance products, his collection activities and his delivery of the insurance
contract or policy. In addition, the civil code defines an agent as a person who binds
himself to do something in behalf of another, with the consent or authority of the latter.
Article 1887 of the civil code also provides that in the execution of the agency, the
agent shall act in accordance with the instructions of the principal.

AFP Mutual Benefit Association v. NLRC (G.R. No. 102199)

Date: August 12, 2016Author: jaicdn 0 Comments

Facts:

Private respondent Eutiquio Bustamante was an insurance underwriter of petitioner

AFP Mutual Benefit Association until he was dismissed for misrepresentation and for
simultaneously selling insurance for another life insurance company in violation of their
agreement. Respondent signed a quitclaim after receiving his commissions but later on
discovered that he was entitled to more than the received amount. Thus, he filed a
complaint with the Office of the Insurance Commissioner but was advised to file before
the Department of Labor, which then ruled in his favor citing that employer-employee
relationship exists between him and petitioner. NLRC tribunal affirmed.
Issue:

Whether or not employer-employee relationship existed between the parties.

Ruling: NO.

The significant factor in determining the relationship of the parties is the presence or
absence of supervisory authority to control the method and the details of performance
of the service being rendered, and the degree to which the principal may intervene to
exercise such control. The presence of such power of control is indicative of an
employment relationship, while absence thereof is indicative of independent
contractorship. In other words, the test to determine the existence of independent
contractorship is whether one claiming to be an independent contractor has contracted
to do the work according to his own methods and without being subject to the control of
the employer except only as to the result of the work. Such is exactly the nature of the
relationship between petitioner and private respondent.

Private respondent was free to sell insurance at any time as he was not subject to
definite hours or conditions of work and in turn was compensated according to the
result of his efforts. By the nature of the business of soliciting insurance, agents are
normally left free to devise ways and means of persuading people to take out
insurance. There is no prohibition, as contended by petitioner, for private respondent to
work for as long as he does not violate the Insurance Code. Although petitioner could
have, theoretically, disapproved any of private respondent’s transactions, what could
be disapproved was only the result of the work, and not the means by which it was
accomplished.

The “control” which the above factors indicate did not sum up to the power to control
private respondent’s conduct in and mode of soliciting insurance. On the contrary, they
clearly indicate that the juridical element of control had been absent in this situation.
Thus, the Court is constrained to rule that no employment relationship had ever existed
between the parties.

CORPORAL SR. VS. NLRC

341 SCRA 658
[G.R. No. 129315. October 2, 2000]
Facts: 5 male barbers and 2 female manicurists (Petitioners) worked at New Look
Barbershop, a sole proprietorship owned and managed by Vicente Lao which in 1982
was taken over by Lao Enteng Co., Inc., (respondent corporation) a corporation formed
by Vicente Lao’s children. The petitioners were allowed to work there until April 1985
when they were told that the barbershop building was sold and their services are no
longer needed.

Petitioners filed with the Arbitration branch of NLRC a complaint for illegal dismissal,
illegal deduction, separation pay, non-payment of 13th month pay and salary
differential. Also they seek for refund of P1.00 collected from each of them daily as
salary of the barbershop’s sweeper.

Respondent Corporation alleged that petitioners were Joint Venture (JV) partners
receiving 50% commission (Petitioners admitted in receiving 50-60%), therefore no
employer-employee relationship existed. And assuming arguendo that employer-
employee relationship existed, petitioners were not entitled to separation pay since
cessation of the business was due to serious business losses. Also, they allege that
the barbershop had always been a JV partnership with the operation and management
left entirely to petitioners and that the former had no control over the latter who could
freely come and go as they wish. Lastly, they allege that some of the petitioners were
allowed to register in SSS only as an act of accommodation.

The Labor Arbiter dismissed the complaint and found that there was a JV and no
employer-employee relationship. Also that the business was closed due to serious
business losses or financial reverses and the law does not compel the establishment to
pay separation pay to whoever were its employees. On appeal, NLRC affirmed the
decision but held that petitioners were considered independent contractors and not
employees. The MR was also denied by NLRC, hence, this petition on certiorari.

Issue: WON there was an employer-employee relationship.

Held: YES. Petitioners are employees of Respondent Corporation and shall be

accorded the benefits given in Art. 283 of the Labor Code granting separation pay
equivalent to 1 month pay for every year of service and also to 13th month pay. The
other claims of petitioners are found to be without basis.
 No documentary evidence of the existence of JV other than the self-serving
affidavit of the company president.
 The power of control in the 4-fold test (employer-employee relationship) refers to
the EXISTENCE and NOT THE EXERCISE of such power – the following
elements must be present for an employer-employee relationship to exist: (1) the
selection and engagement of the workers; (2) power of dismissal; (3) the
payment of wages by whatever means; and (4) the power to control the worker's
conduct, with the latter assuming primacy in the overall consideration.

The records show that Vicente Lao engaged the petitioners to work for the
barbershop and retained them after it was taken over by the respondent
corporation who continuously paid their wages. Also, the fact that the petitioners
worked in the barbershop owned and operated by respondents, and that they
were required to report daily, observing definite hours of work, they were not free
to accept employment elsewhere and devoted their full time working in the
barbershop proves the existence of the power of control.
  The petitioners are not independent contractors. – 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. Petitioners have neither of the above since the tools used such as
scissors, razors, nail cutters, polishes, etc. cannot be considered “substantial
capital or investment”.

 While it is no longer true that membership to SSS is predicated on the existence

of an employee-employer relationship since the policy is now to encourage even
the self-employed dressmakers, manicurists and jeepney drivers to become SSS
members, we could not agree with private respondents that petitioners were
registered with the Social Security System as their employees only as an
accommodation. As we have earlier mentioned private respondent showed no
proof to their claim that petitioners were the ones who solely paid all SSS
contributions. It is unlikely that respondents would report certain persons as their
workers, pay their SSS premium as well as their wages if it were not true that
they were indeed their employee.

Maraguinot vs. NLCR, Del Rosario & Viva Films

Chester Cabalza recommends his visitors to please read the original & full text of the
case cited. Xie xie!

ALEJANDRO MARAGUINOT, JR. AND PAUILINO ENERO v. NLRC, VIC DEL

ROSARIO, VIVA FILMS
GR No. 120969

Facts:

Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as
part of the filming crew. Sometime in May 1992, sought the assistance of their
supervisor to facilitate their request that their salary be adjusted in accordance with the
minimum wage law.

On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would
agree to their request only if they sign a blank employment contract. Petitioners
refused to sign such document. After which, the Mr. Enero was forced to go on leave
on the same month and refused to take him back when he reported for work. Mr.
Maraguinot on the other hand was dropped from the payroll but was returned days
after. He was again asked to sign a blank employment contract but when he refused,
he was terminated.

Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The
private respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA
PRODUCTIONS, INC. and that it was primarily engaged in the distribution & exhibition
of movies- but not then making of movies; (b) That they hire contractors called
“producers” who act as independent contractors as that of Vic Del Rosario; and (c) As
such, there is no employee-employer relation between petitioners and private
respondents.

The Labor Arbiter held that the complainants are employees of the private
respondents. That the producers are not independent contractor but should be
considered as labor-only contractors and as such act as mere agent of the real
employer. Thus, the said employees are illegally dismissed.

The private respondents appealed to the NLRC which reversed the decision of the
Labor Arbiter declaring that the complainants were project employees due to the ff.
reasons: (a) Complainants were hired for specific movie projects and their employment
was co-terminus with each movie project; (b)The work is dependent on the availability
of projects. As a result, the total working hours logged extremely varied; (c) The
extremely irregular working days and hours of complainants work explains the lump
sum payment for their service; and (d) The respondents alleged that the complainants
are not prohibited from working with other movie companies whenever they are not
working for the independent movie producers engaged by the respondents.

A motion for reconsideration was filed by the complainants but was denied by NLRC.
In effect, they filed an instant petition claiming that NLRC committed a grave abuse of
discretion in: (a) Finding that petitioners were project employees; (b) Ruling that
petitioners were not illegally dismissed; and (c) Reversing the decision of the Labor
Arbiter.

In the instant case, the petitioners allege that the NLRC acted in total disregard of
evidence material or decisive of the controversy.

Issues:

(a) W/N there exist an employee- employer relationship between the petitioners and
the private respondents.

(b) W/N the private respondents are engaged in the business of making movies.

(c) W/N the producer is a job contractor.

Held:

There exist an employee- employer relationship between the petitioners and the
private respondents because of the ff. reasons that nowhere in the appointment slip
does it appear that it was the producer who hired the crew members. Moreover, it was
VIVA’s corporate name appearing on heading of the slip. It can likewise be said that it
was VIVA who paid for the petitioners’ salaries.

Respondents also admit that the petitioners were part of a work pool wherein they
attained the status of regular employees because of the ff. requisites: (a) There is a
continuous rehiring of project employees even after cessation of a project; (b) The
tasks performed by the alleged “project employees” are vital, necessary and
indispensable to the usual business or trade of the employer; and (c) However, the
length of time which the employees are continually re-hired is not controlling but merely
serves as a badge of regular employment.

Since the producer and the crew members are employees of VIVA and that these
employees’ works deal with the making of movies. It can be said that VIVA is engaged
of making movies and not on the mere distribution of such.

The producer is not a job contractor because of the ff. reasons: (Sec. Rule VII, Book III
of the Omnibus Rules Implementing the Labor Code.)

a. A contractor 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. The said
producer has a fix time frame and budget to make the movies.

b. The contractor should have substantial capital and materials necessary to conduct
his business. The said producer, Del Rosario, does not have his own tools, equipment,
machinery, work premises and other materials to make motion pictures. Such materials
were provided by VIVA.

It can be said that the producers are labor-only contractors. Under Article 106 of the
Labor Code (reworded) where the contractor does not have the requisites as that of
the job contractors.

CALAMBA MEDICAL CENTER

VS
 NATIONAL LABOR RELATIONS COMMISSION
571 SCRA 585 (2008)

An employment relationship exists between a physician and a hospital if the hospital

controls both the means and the details of the process by which the physician is to
accomplish his task.

Petitioner Calamba Medical Center (CMC), engaged the services of medical doctors-
spouses Ronaldo Lanzanas (Dr. Ronaldo) and Merceditha Lanzanas (Dr. Merceditha)
as part of its team of resident physicians. They were given, among others, identification
cards and work schedules; and were paid a monthly retainer. They were likewise
enrolled in the Social Security System (SSS). Subsequently, CMC’s medical director
issued a Memorandum to Dr. Ronaldo after a resident physician overheard Dr.
Ronaldo and a fellow employee discussing the low admission in the hospital. After the
incident involving her husband, Dr. Merceditha was no longer given any work
assignments.

Afterwards, the rank and file employees union of Calamba Medical Center went on a
strike. Dr. Ronaldo and Dr. Merceditha meanwhile filed a complaint for illegal
suspension and illegal dismissal, respectively before the National Labor Relations
Commission Regional Arbitration Board (NLRC-RAB). Consequently, the Department
of Labor and Employment (DOLE) issued a return to work order. Dr. Ronaldo, on the
other hand, received a notice of termination indicating his failure to return for work. Dr.
Ronaldo thus amended his complaint to illegal dismissal. The CMC contends that the
doctors-spouses are not employees of the same, so that they cannot be illegally
dismissed.

ISSUES:
Whether or not an employee-employer relationship does not exist between Calamba
Medical Center and the doctors-spouses Lanzanas

HELD:
Under the ―control test,‖ an employment relationship exists between a physician and
a hospital if the hospital controls both the means and the details of the process by
which the physician is to accomplish his task.

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 is compensated according to
the result of his efforts and not the amount thereof, the element of control is absent.

As priorly stated, the spouses-doctors maintained specific work-schedules, as

determined by petitioner through its medical director, which consisted of 24-hour shifts
totaling forty-eight hours each week and which were strictly to be observed under pain
of administrative sanctions.
That CMC exercised control over spouses-doctors gains light from the undisputed fact
that in the emergency room, the operating room, or any department or ward for that
matter, spouses-doctors’ work is monitored through its nursing supervisors, charge
nurses and orderlies. Without the approval or consent of CMC or its medical director,
no operations can be undertaken in those areas. For control test to apply, it is not
essential for the employer to actually supervise the performance of duties of the
employee, it being enough that it has the right to wield the power.

With respect to spouses-doctors sharing in some hospital fees, this scheme does not
sever the employment tie between them and CMC as this merely mirrors additional
form or another form of compensation or incentive similar to what commission-based
employees receive as contemplated in Article 97 (f) of the Labor Code.
The spouses-doctors were in fact made subject to petitioner-hospital’s Code of Ethics,
the provisions of which cover administrative and disciplinary measures on negligence
of duties, personnel conduct and behavior, and offenses against persons, property and
the hospital’s interest.

More importantly, the CMC itself provided incontrovertible proof of the employment
status of respondents, namely, the identification cards it issued them, the payslips and
BIR W-2 (now 2316) Forms which reflect their status as employees, and the
classification as ―salary‖ of their remuneration. Moreover, it enrolled respondents in
the SSS and Medicare (Philhealth) program. It bears noting at this juncture that
mandatory coverage under the SSS Law is premised on the existence of an employer-
employee relationship,[35] except in cases of compulsory coverage of the self-
employed. It would be preposterous for an employer to report certain persons as
employees and pay their SSS premiums as well as their wages if they are not its
employees.

And if the spouses-doctors were not CMC’s employees, how does it account for its
issuance of the earlier-quoted March 7, 1998 memorandum explicitly stating that
respondent is ―employed‖ in it and of the subsequent termination letter indicating Dr.
Ronaldo’s employment status.

Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor
Code, an employer-employee relationship exists between the resident physicians and
the training hospitals, unless there is a training agreement between them, and the
training program is duly accredited or approved by the appropriate government
agency. In the spouses-doctors’ case, they were not undergoing any specialization
training. They were considered non-training general practitioners, assigned at the
emergency rooms and ward sections

Republic v. Asiapro Cooperative (G.R. No. 172101)

Date: August 27, 2016Author: jaicdn 0 Comments
Facts:

Respondent Asiapro Cooperative is composed of owners-members with primary

objectives of providing them savings and credit facilities and livelihood services. In
discharge of said objectives, Asiapro entered into several service contracts with
Stanfilco. Sometime later, the cooperative owners-members requested Stanfilco’s help
in registering them with SSS and remitting their contributions. Petitioner SSS informed
Asiapro that being actually a manpower contractor supplying employees to Stanfilco, it
must be the one to register itself with SSS as an employer and remit the contributions.
Respondent continuously ignoring the demand of SSS the latter filed before the SSC.
Asiapro alleges that there exists no employer-employee relationship between it and its
owners-members. SSC ruled in favor of SSS. On appeal, CA reversed the decision.

Issue:

Whether or not there is employer-employee relationship between Asiapro and its

owners-members.

Ruling: YES.

In determining the existence of an employer-employee relationship, the following

elements are considered: (1) the selection and engagement of the workers; (2) the
payment of wages by whatever means; (3) the power of dismissal; and (4) the power to
control the worker‘s conduct, with the latter assuming primacy in the overall
consideration. All the aforesaid elements are present in this case.

First. It is expressly provided in the Service Contracts that it is the respondent

cooperative which has the exclusive discretion in the selection and engagement of the
owners-members as well as its team leaders who will be assigned at Stanfilco.

Second. It cannot be doubted then that those stipends or shares in the service surplus
are indeed wages, because these are given to the owners-members as compensation
in rendering services to respondent cooperative‘s client, Stanfilco.

Third. It is also stated in the above-mentioned Service Contracts that it is the

respondent cooperative which has the power to investigate, discipline and remove the
owners-members and its team leaders who were rendering services at Stanfilco.

Fourth. In the case at bar, it is the respondent cooperative which has the sole control
over the manner and means of performing the services under the Service Contracts
with Stanfilco as well as the means and methods of work. Also, the respondent
cooperative is solely and entirely responsible for its owners-members, team leaders
and other representatives at Stanfilco. All these clearly prove that, indeed, there is an
employer-employee relationship between the respondent cooperative and its owners-
members
EDUARDO G. EVIOTA, petitioner, vs. THE HON. COURT OF APPEALS, THE HON.
JOSE BAUTISTA, Presiding Judge of Branch 136, Regional Trial Court of Makati,
and STANDARD CHARTERED BANK, respondents.

FACTS

Sometime on January 26, 1998, the respondent Standard Chartered Bank and
petitioner Eduardo G. Eviota executed a contract of employment under which the
petitioner was employed by the respondent bank as Compensation and Benefits
Manager, VP (M21). Petitioner came up with many proposals which the bank approved
and made preparations of. He was also given privileges like car, renovation of the
office, and even a trip to Singapore at the company’s expense. However, the petitioner
abruptly resigned from the respondent bank barely a month after his employment and
rejoined his former employer. On June 19, 1998, the respondent bank filed a complaint
against the petitioner with the RTC of Makati City for damages brought about his
abrupt resignation.

Though petitioner reimbursed part of the amount demanded by Standard, he was not
able to pay it full.

Standard alleged that assuming arguendo that Eviota had the right to terminate his
employment with the Bank for no reason, the manner in and circumstances under
which he exercised the same are clearly abusive and contrary to the rules governing
human relations, governed by the Civil Code.

Further, Standard alleged that petitioner also violated the Labor Code when he
terminated his employment without one (1) notice in advance. This stipulation was also
provided in the employment contract of Eviota with Standard, which would also
constitute breach of contract.

The petitioner filed a motion to dismiss the complaint on the ground that the action for
damages of the respondent bank was within the exclusive jurisdiction of the Labor
Arbiter under paragraph 4, Article 217 of the Labor Code of the Philippines, as
amended. The petitioner averred that the respondent bank’s claim for damages arose
out of or were in connection with his employer-employee relationship with the
respondent bank or some aspect or incident of such relationship. The respondent
bank opposed the motion, claiming that its action for damages was within the exclusive
jurisdiction of the trial court. Although its claims for damages incidentally involved an
employer-employee relationship, the said claims are actually predicated on the
petitioner’s acts and omissions which are separately, specifically and distinctly
governed by the New Civil Code.
ISSUE

Whether or not the RTC had jurisdiction over the case.

HELD

The SC held that the RTC has jurisdiction. Case law has it that the nature of an action
and the subject matter thereof, as well as which court has jurisdiction over the same,
are determined by the material allegations of the complaint and the reliefs prayed for in
relation to the law involved. Not every controversy or money claim by an employee
against the employer or vice-versa is within the exclusive jurisdiction of the labor
arbiter. A money claim by a worker against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter only if there is a “reasonable causal
connection” between the claim asserted and employee-employer relation. Absent such
a link, the complaint will be cognizable by the regular courts of justice.

Actions between employees and employer where the employer-employee relationship

is merely incidental and the cause of action precedes from a different source of
obligation is within the exclusive jurisdiction of the regular court. The jurisdiction of the
Labor Arbiter under Article 217 of the Labor Code, as amended, is limited to disputes
arising from an employer-employee relationship which can only be resolved by
reference to the Labor Code of the Philippines, other labor laws or their collective
bargaining agreements.

Jurisprudence has evolved the rule that claims for damages under paragraph 4 of
Article 217, to be cognizable by the Labor Arbiter, must have a reasonable causal
connection with any of the claims provided for in that article. Only if there is such a
connection with the other claims can the claim for damages be considered as arising
from employer-employee relations.

In this case, the private respondent’s first cause of action for damages is anchored on
the petitioner’s employment of deceit and of making the private respondent believe that
he would fulfill his obligation under the employment contract with assiduousness and
earnestness. The petitioner volte face when, without the requisite thirty-day notice
under the contract and the Labor Code of the Philippines, as amended, he abandoned
his office and rejoined his former employer; thus, forcing the private respondent to hire
a replacement. The private respondent was left in a lurch, and its corporate plans and
program in jeopardy and disarray. Moreover, the petitioner took off with the private
respondent’s computer diskette, papers and documents containing confidential
information on employee compensation and other bank matters. On its second cause
of action, the petitioner simply walked away from his employment with the private
respondent sans any written notice, to the prejudice of the private respondent, its
banking operations and the conduct of its business. Anent its third cause of action, the
petitioner made false and derogatory statements that the private respondent reneged
on its obligations under their contract of employment; thus, depicting the private
respondent as unworthy of trust.

The primary relief sought is for liquidated damages for breach of a contractual
obligation. The other items demanded are not labor benefits demanded by workers
generally taken cognizance of in labor disputes, such as payment of wages, overtime
compensation or separation pay. The items claimed are the natural consequences
flowing from breach of an obligation, intrinsically a civil dispute.

It is evident that the causes of action of the private respondent against the petitioner do
not involve the provisions of the Labor Code of the Philippines and other labor laws but
the New Civil Code. Thus, the said causes of action are intrinsically civil. There is no
causal relationship between the causes of action of the private respondent’s causes of
action against the petitioner and their employer-employee relationship. The fact that
the private respondent was the erstwhile employer of the petitioner under an existing
employment contract before the latter abandoned his employment is merely incidental.

Petition is denied

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, ET AL vs. HON.

JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH
166, RTC, PASIG, and SAN MIGUEL CORP.
 G.R. No. 87700 June 13,
1990
 MELENCIO-HERRERA, J.

Doctrine:

A labor dispute can nevertheless exist regardless of whether the disputants stand in
the proximate relationship of employer and employee. The existence of a labor dispute
is not negative by the fact that the plaintiffs and defendants do not stand in the
proximate relation of employer and employee.
FACTS:

Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services
with Lipercon and D'Rite. These companies are independent contractors duly licensed
by the DOLE. In said contracts, it was expressly understood and agreed that the
workers employed by the contractors were to be paid by the latter and that none of
them were to be deemed employees or agents of SanMig. There was to be no
employer-employee relation between the contractors and/or its workers, on the one
hand, and SanMig on the other.

Petitioner SMCEU is the duly authorized representative of the monthly paid rank-and-
file employees of SanMig with whom the latter executed a CBA.

In a letter, the Union advised SanMig that some Lipercon and D'Rite workers had
signed up for union membership and sought the regularization of their employment
with SMC. The Union alleged that this group of employees, while appearing to be
contractual workers supposedly independent contractors, have been continuously
working for SanMig for a period ranging from 6 months to 15 years and that their work
is neither casual nor seasonal as they are performing work or activities necessary or
desirable in the usual business or trade of SanMig. Thus, it was contended that there
exists a "labor-only" contracting situation. It was then demanded that the employment
status of these workers be regularized.

SMC filed a verified Complaint for Injunction and Damages before respondent Court.
The Union filed a Motion to Dismiss SanMig's Complaint on the ground of lack of
jurisdiction over the case/nature of the action, which motion was opposed by SanMig.

ISSUE: Whether or not there the Respondent Court has jurisdiction in issuing the
injunction.
RULING IN THE RTC: The respondent Court issued injunction. The absence of
employer-employee relationship negates the existence of labor dispute. Verily, this
court (RTC) has jurisdiction to take cognizance of Sanmig's grievance.
The evidence so far presented indicates that plaintiff has contracts for services with
Lipercon and D'Rite. The application and contract for employment of the defendants'
witnesses are either with Lipercon or D'Rite. What could be discerned is that there is
no employer-employee relationship between plaintiff and the contractual workers
employed by Lipercon and D'Rite. This, however, does not mean that a final
determination regarding the question of the existence of employer-employee
relationship has already been made. To finally resolve this dispute, the court must
extensively consider and delve into the manner of selection and engagement of the
putative employee; the mode of payment of wages; the presence or absence of a
power of dismissal; and the Presence or absence of a power to control the putative
employee's conduct.
SC RULING:
 NO, the respondent Court has no jurisdiction in issuing the injunction.
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any
controversy or matter concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing,
or arranging the terms and conditions of employment, regardless of whether the
disputants stand in the proximate relation of employer and employee." A labor dispute,
as defined by the law, does exist herein is evident.
Whether or not the Union demands are valid; whether or not SanMig's contracts with
Lipercon and D'Rite constitute "labor-only" contracting and, therefore, a regular
employer-employee relationship may, in fact, be said to exist; whether or not the Union
can lawfully represent the workers of Lipercon and D'Rite in their demands against
SanMig in the light of the existing CBA; whether or not the notice of strike was valid
and the strike itself legal when it was allegedly instigated to compel the employer to
hire strangers outside the working unit; — those are issues the resolution of which call
for the application of labor laws, and SanMig's causes of action in the Court below are
inextricably linked with those issues.
As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor
tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to its
amendment by R.A. No. 6715 on 21 March 1989, since the suit below was instituted on
6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear and
decide the following cases involving all workers.
CITIBANK, N. A. v. CA (Third Division), AND CITIBANK INTEGRATED GUARDS
LABOR ALLIANCE

(CIGLA) SEGATUPAS/FSM LOCAL CHAPTER No. 1394

G.R. No. 108961 November 27, 1998

PARDO, J.:

DOCTRINE:

Non-renewal of Security Guard Service agreement is a civil dispute and not a labor
dispute.

FACTS:
Citibank and El Toro Security Agency, Inc. (hereafter El Toro) entered into a contract
for the latter to provide

security and protective services. In 1990, the contract between Citibank and El Toro
expired.

Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (hereafter CIGLA) filed with the

National Conciliation and Mediation Board (NCMB) a request for preventive mediation
citing Citibank as respondent therein giving as issues for preventive mediation the
following: (1) Unfair labor practice (2) Dismissal of union officers/members;
and (3) Union busting.

Three days after, Citibank served on El Toro a written notice that the bank would not
renew anymore the service agreement with the latter. Simultaneously, Citibank hired
another security agency, the Golden Pyramid Security

Agency, to render security services at Citibank's premises.

Hence, CIGLA filed a manifestation with the NCMB that it was converting its request
for preventive mediation into a notice of strike for failure of the parties to reach a
mutually acceptable settlement of the issues, which it followed with a supplemental
notice of strike alleging as supplemental issue the mass dismissal of all union

officers and members.

The following day the guards of El Toro were replaced by guards of the Golden
Pyramid Security Agency. They threatened to go on strike against Citibank and picket
its premises. CIGLA filed a notice of strike directed at the

premises of the Citibank main office.

Citibank filed with the Regional Trial Court, Makati, a complaint for injunction and
damages to which respondent CIGLA filed with the trial court a motion to dismiss the
complaint. The motion alleged that the Court had no

jurisdiction, this being labor dispute.

RTC RULING

The trial court denied respondent CIGLA's motion to dismiss because plaintiff's
complaint there

are allegations, which negate any employer-employee relationship between it and the
CIGLA members. Respondent CIGLA filed with the Court of Appeals a petition for
certiorari with preliminary injunction assailing

the validity of the proceedings had before the regional trial court.
:

CA RULING: It declared the proceedings before the RTC null and void.
ISSUE:

(1) The basic issue involved is whether it is the labor tribunal or the regional trial court
that has jurisdiction over

the subject matter of the complaint filed by Citibank with the trial court.

(2) Is there a labor dispute between Citibank and the security guards, members of
respondent CIGLA,

regardless of whether they stand in the relation of employer and employees?

SC RULING:

(1) Yes.
The Court sustained the petitioner's contention. This Court has held in many cases
that "in determining the existence of an employer-employee relationship, the following
elements are generally considered: 1) the selection and engagement of the employee;
2) the payment of wages; 3) the power of dismissal; and 4) the employer's power to
control the employee with respect to the means and methods by which the work is to
be accomplished".6 It has been decided also that the Labor Arbiter has no jurisdiction
over a claim filed where no employer-employee relationship existed between a
company and the security guards assigned to it by a security service contractor.7 In
this case, it was the security agency El Toro that recruited, hired and assigned the
watchmen to their place of work. It was the security agency that was answerable to
Citibank for the conduct of its guards.

2. No. It is a civil dispute.

Article 212, paragraph l of the Labor Code provides the definition of a "labor dispute".
It "includes any controversy or matter concerning terms or conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment,

regardless of whether the disputants stand in the proximate relation of employer and
employee."

If at all, the dispute between Citibank and El Toro security agency is one regarding the
termination or non- renewal of the contract of services. This is a civil dispute8. El Toro
was an independent contractor. Thus, no employer-employee relationship existed
between Citibank and the security guard members of the union in the security agency
who were assigned to secure the bank's premises and property. Hence, there was no
labor

dispute and no right to strike against the bank.

It is a basic rule of procedure that "jurisdiction of the court over the subject matter of
the action is determined by the allegations of the complaint, irrespective of whether or
not the plaintiff is entitled to recover upon all or some of the claims asserted therein.
The jurisdiction of the court can not be made to depend upon the defenses set up in
the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction
would almost entirely depend upon the defendant."9 "What determines the jurisdiction
of the court is the nature of the action pleaded as appearing from the allegations in the
complaint. The averments therein and the character of the relief sought

are the ones to be consulted."

In the complaint filed with the trial court, petitioner alleged that in 1983, it entered into a
contract with El Toro, a security agency, for security and protection service. The parties
renewed the contract yearly until April 22, 1990. Petitioner further alleged that from
June 11, 1990, until the filing of the complaint, El Toro security guards formerly
assigned to guard Citibank premises loitered around the bank's premises in large
groups and threatened to stage a strike, which would hamper its operations and the
normal conduct of its business and that
the bank would suffer damages should a strike push through.

On the basis of the allegations of the complaint, it is safe to conclude that the dispute
involved is a civil one, not a labor dispute. Consequently, we rule that jurisdiction over
the subject matter of the complaint lies with the

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

FERDINAND PINEDA and GODOFREDO CABLING
 G.R. No. 120567 20 March
1998
 Martinez, J.:

DEFINITION OF A LABOR DISPUTE

DOCTRINE:
The power of the NLRC to issue an injunctive writ originates from "any labor dispute.”
The term "labor dispute" is defined as "any controversy or matter concerning terms and
conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and conditions of
employment regardless of whether or not the disputants stand in the proximate relation
of employers and employees. There is no labor dispute when there has yet been no
complaint for illegal dismissal filed with the labor arbiter.
FACTS:

Ferdinand Pineda and Godofredo Cabling, flight stewards of PAL, were dismissed by
the latter from the service for their alleged involvement in the currency smuggling in
Hong Kong. Aggrieved by said dismissal, they went directly to the NLRC and filed a
petition for injunction with the object of making PAL withhold its orders of dismissal and
reinstate them to work. The NLRC granted their petition.

Displeased, PAL challenged the NLRC through a motion for reconsideration

questioning its jurisdiction to issue an injunction or restraining order since this may be
issued only under Article 218 of the Labor Code if the case involves or arises from
labor disputes.

NLRC RULING: It denied PAL’s motion for reconsideration and upheld its jurisdiction
to issue the mandatory injunctive writ ordering PAL to withhold the enforcement of the
orders of dismissal and reinstate Pineda and Cabling.

ISSUE: Can the NLRC, even without a complaint for illegal dismissal filed before the
labor arbiter, entertain an action for injunction and issue such writ?
SC RULING:
 NO. Generally, injunction is not a cause of action in itself but merely a
provisional remedy, an adjunct to a main suit. Relative to this, the power of the NLRC
to issue an injunctive writ originates from "any labor dispute.”
The term "labor dispute" is defined as "any controversy or matter concerning terms and
conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and conditions of
employment regardless of whether or not the disputants stand in the proximate relation
of employers and employees."

The term "controversy" is likewise defined as "a litigated question; adversary

proceeding in a court of law; a civil action or suit, either at law or in equity; a justiciable
dispute."

A "justiciable controversy" is "one involving an active antagonistic assertion of a legal

right on one side and a denial thereof on the other concerning a real, and not a mere
theoretical question or issue."

From the foregoing definitions, it is therefore an essential requirement that there must
first be a labor dispute between the contending parties before the labor arbiter.

In the present case, there is no labor dispute between PAL and respondents Pineda
and Cabling as there has yet been no complaint for illegal dismissal filed with the labor
arbiter by them against the PAL. The petition for injunction directly filed before the
NLRC is in reality an action for illegal dismissal. This is clear from the allegations in the
petition which prays for their reinstatement; award of full backwages, moral and
exemplary damages; and attorney's fees. As such, the petition should have been filed
with the labor arbiter who has the original and exclusive jurisdiction to hear and decide
the following cases involving all workers, whether agricultural or non-agricultural.

7K CORPORATION v. EDDIE ALBARICO G.R. No. 182295 June 26, 2013 SERENO,
C.J.:

JURISDICTION OF THE VOLUNTARY ARBITRATOR

DOCTRINES:

A voluntary arbitrator may, by agreement of the parties, assume jurisdiction over any of
the labor disputes enumerated under Article 223 of the Labor Code or those which
could fall under the jurisdiction of the Labor Arbiter. He has plenary jurisdiction and
authority to interpret an agreement to arbitrate and to determine the scope of his own
authority when the said agreement is vague — subject only, in a proper case, to the
certiorari jurisdiction of this Court.

In deciding a case, the voluntary arbitrator may award backwages upon a finding of
illegal dismissal, even though the issue of entitlement thereto is not explicitly claimed in
the Submission Agreement. Backwages, in general, are awarded on the ground of
equity as a form of relief that restores the income lost by the terminated employee by
reason of his illegal dismissal.

Aside from illegal dismissal cases, separation pay may also be awarded in the
following instances:

4. when employees have been terminated for authorized causes, such as

redundancy, retrenchment or 
 installation of labor-saving devices;

5. when employees have been terminated for a just cause other than serious
misconduct or an act 
 reflecting on moral character and social justice calls for
the awarding of separation pay;

6. when it has become an established practice of the company to pay the said
benefit to voluntarily 
 resigning employees; or

7. when an employee has been validly dismissed for non-membership in a union as

required in a closed- 
 shop agreement

FACTS:

When he was dismissed on 5 April 1993, Albarico was a regular employee of 7K

Corporation, a company selling water purifiers. He started working for the company in
1990 as a salesman. Because of his good performance, his employment was
regularized. He was also promoted several times: from salesman, he was promoted to
senior sales representative and then to acting team field supervisor. In 1992, he was
awarded the President’s Trophy for being one of the company’s top water purifier
specialist distributors.

In April of 1993, the chief operating officer of 7K Corporation terminated Albarico’s

employment allegedly for his poor sales performance. Albarico had to stop reporting for
work, and he subsequently submitted his money claims against 7K Corporation for
arbitration before the National Conciliation and Mediation Board (NCMB). The issue for
voluntary arbitration before the NCMB, according to the parties’ Submission
Agreement was whether Albarico was entitled to the payment of separation pay and
the sales commission reserved for him by the corporation.
As for its defense, 7K Corporation claimed Albarico had voluntarily stopped reporting
for work after receiving a verbal reprimand for his sales performance; hence, it was he
who was guilty of abandonment of employment

While the case was pending before the NCMB, Albarico filed a complaint for illegal
dismissal before the LA. The latter ruled in favor of Albarico. However, the NLRC, on
appeal, vacated the decision of the LA on the ground of forum-shopping, without
prejudice to the pending NCMB arbitration case. The decision of the NLRC became
final.

NCMB RULING: Albarico was ILLEGALLY DISMISSED

The arbitrator explained that the promotions, increases in salary, and awards received
by respondent belied the claim that the latter was performing poorly. It was also found
that Albarico could not have abandoned his job, as the abandonment should have
been clearly shown. The VA also found that Albarico was dismissed from his work
without due process.
However, it was found that reinstatement was no longer possible because of the
strained relationship of the parties. Thus, in lieu of reinstatement, the VA ordered 7K
Corporation to pay separation pay for two years at P4,456 for each year, or a total
amount of P8,912. The VA also ordered 7K Corporation to pay backwages in the
amount of P90,804.19, plus attorney’s fees since Albarico had been compelled to file
an action for illegal dismissal.

7K Corporation appealed to the CA, imputing grave abuse of discretion on the part of
VA for ruling on the issue of illegal dismissal and for awarding payment of backwages
and attorney’s fees. 7K Corporation contended that the issue of the legality of
dismissal was not explicitly included in the Submission Agreement.

CA RULING: AFFIRMED VA; Deleted Attorney’s Fees for lack of factual

basis.
 ISSUE: Did the VA properly assume jurisdiction to decide the issue of the
legality of the dismissal of Albarico as

well as the latter’s entitlement to backwages?

SC RULING:
 YES. The circumstances of the instant case lead to no other conclusion
than that the claim of Albarico for separation pay was premised on his allegation of
illegal dismissal. Thus, the VA properly assumed jurisdiction over the issue of the
legality of his dismissal
Moreover, it should be noted that even the NLRC was of the understanding that the
NCMB arbitration case sought to resolve the issue of the legality of the dismissal of the
Albarico. In fact, the identity of the issue of the legality of his dismissal, which was
previously submitted to the NCMB, and later submitted to the NLRC, was the basis of
the latter’s finding of forum shopping and the consequent dismissal of the case before
it. In fact, 7K Corporation also implicitly acknowledged this when it filed before the
NLRC its Motion to Dismiss Albarico’s Complaint on the ground of forum shopping.
Thus, it is now estopped from claiming that the issue before the NCMB does not
include the issue of the legality of the dismissal of respondent. Besides, there has to be
a reason for deciding the issue of respondent’s entitlement to separation pay. To think
otherwise would lead to absurdity, because the voluntary arbitrator would then be
deciding that issue in a vacuum. The arbitrator would have no basis whatsoever for
saying that Albarico was entitled to separation pay or not if the issue of the legality of
Albarico’s dismissal was not resolve first.

ATLAS FARMS, INC. v. NLRC
 G.R. No. 142244 November 18, 2002
QUISUMBING, J.:
JURISDICTION OF LABOR ARBITER

DOCTRINE:

Where the dispute is just in the interpretation, implementation or enforcement stage, it

may be referred to the grievance machinery set up in the CBA, or brought to voluntary
arbitration. But, where there was already actual termination, with alleged violation of
the employees rights, it is already cognizable by the labor arbiter.
FACTS:

Private respondent Jaime O. dela Pea was employed as a veterinary aide by

petitioner. He was among several employees terminated in July 1989. On July 8, 1989,
he was re-hired by petitioner and given the additional job of feedmill operator. He was
instructed to train selected workers to operate the feedmill.
In 1993, Pea was allegedly caught urinating and defecating on company premises not
intended for the purpose. The farm manager of petitioner issued a formal notice
directing him to explain within 24 hours why disciplinary action should not be taken
against him. Pea refused, however, to receive the formal notice. He never bothered to
explain. Thus, a notice of termination with payment of his monetary benefits was sent
to him.

Co-respondent Marcial I. Abion was a carpenter/mason and a maintenance man

whose employment by petitioner. Allegedly, he caused the clogging of the fishpond
drainage resulting in damages worth several hundred thousand pesos when he
improperly disposed of the cut grass and other waste materials into the ponds drainage
system. Petitioner sent a written notice to Abion, requiring him to explain what
happened, otherwise, disciplinary action would be taken against him. He refused to
receive the notice and give an explanation, according to petitioner. Consequently, the
company terminated his services. He acknowledged receipt of a written notice of
dismissal, with his separation pay.

Pea and Abion filed separate complaints for illegal dismissal that were later
consolidated. Both claimed that their termination from service was due to petitioners
suspicion that they were the leaders in a plan to form a union to compete and replace
the existing management-dominated union.

LA RULING: The labor arbiter dismissed their complaints on the ground that the
grievance machinery in the collective bargaining agreement (CBA) had not yet been
exhausted. Private respondents availed of the grievance process, but later on refiled
the case before the NLRC in Region IV. They alleged lack of sympathy on petitioners
part to engage in conciliation proceedings.

NLRC RULING: NLRC reversed the labor arbiter’s decision.

CA RULING: The appellate court denied the petition and affirmed the NLRC resolution
with some modifications, thus: 1) The private respondents can not be reinstated, due to
their acceptance of the separation pay offered by the petitioner; 2) The private
respondents are entitled to their full back wages; and, 3) The amount of the separation
pay received by private respondents from petitioner shall not be deducted from their
full back wages.

ISSUE: Does the LA and NLRC have jurisdiction over the case?

SC RULING:
 YES. Coming to the merits of the petition, the NLRC found that
petitioner did not comply with the requirements of a valid dismissal. For a dismissal to
be valid, the employer must show that: (1) the employee was accorded due process,
and (2) the dismissal must be for any of the valid causes provided for by law. No
evidence was shown that private respondents refused, as alleged, to receive the
notices requiring them to show cause why no disciplinary action should be taken
against them. Without proof of notice, private respondents who were subsequently
dismissed without hearing were also deprived of a chance to air their side at the level
of the grievance machinery. Given the fact of dismissal, it can be said that the cases
were effectively removed from the jurisdiction of the voluntary arbitrator, thus placing
them within the jurisdiction of the labor arbiter. Where the dispute is just in the
interpretation, implementation or enforcement stage, it may be referred to the
grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where
there was already actual termination, with alleged violation of the employees rights, it is
already cognizable by the labor arbiter
AUSTRIA v. NLRC
 G.R. No. 124382 August 16, 1999 KAPUNAN, J.:

JURISDICTION OF LABOR ARBITER

DOCTRINE:
Under the Labor Code, the provision which governs the dismissal of employees, is
comprehensive enough to include religious corporations, such as the SDA, in its
coverage.

The active participation of a party against whom the action was brought, coupled with
his failure to object to the jurisdiction of the court or quasi-judicial body where the
action is pending, is tantamount to an invocation of that jurisdiction and a willingness to
abide by the resolution of the case and will bar said party from later on impugning the
court or body’s jurisdiction.
FACTS:

Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day

Adventists (SDA) is a religious corporation. Petitioner, on the other hand, was a Pastor
of the SDA until 31 October 1991, when his services were terminated.
petitioner received several communications from Mr. Eufronio Ibesate, the treasurer of
the Negros Mission asking him to admit accountability and responsibility for the church
tithes and offerings collected by his wife, Mrs. Thelma Austria, in his district which
amounted to P15,078.10, and to remit the same to the Negros Mission. Petitioner
reasoned out that he should not be made accountable since it was private respondents
Pastor Gideon Buhat and Mr. Eufronio Ibesate who authorized his wife to collect the
tithes and offerings since he was very sick to do the collecting at that time.
On 16 October 1991,Petitioner went to the office of Pastor Buhat, the president of the
Negros Mission. During said call, petitioner tried to persuade Pastor Buhat to convene
the Executive Committee for the purpose of settling the dispute between him and the
private respondent, Pastor David Rodrigo. The dispute between Pastor Rodrigo and
petitioner arose from an incident in which petitioner assisted his friend, Danny
Diamada, to collect from Pastor Rodrigo the unpaid balance for the repair of the latters
motor vehicle which he failed to pay to Diamada. Due to the assistance of petitioner in
collecting Pastor Rodrigos debt, the latter harbored ill-feelings against petitioner. When
news reached petitioner that Pastor Rodrigo was about to file a complaint against him
with the Negros Mission, he immediately proceeded to the office of Pastor Buhat on
the date abovementioned and asked the latter to convene the Executive Committee.
Pastor Buhat denied the request of petitioner since some committee members were
out of town and there was no quorum. Thereafter, the two exchanged heated
arguments.

A fact-finding committee was created to investigate petitioner. Subsequently, petitioner

received a letter of dismissal citing misappropriation of denominational funds, willful
breach of trust, serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employers duly authorized
representative, as grounds for the termination of his services.
Reacting against the adverse decision of the SDA, petitioner filed a complaint before
the Labor Arbiter for illegal dismissal against the SDA and its officers and prayed for
reinstatement with backwages and benefits, moral and exemplary damages and other
labor law benefits.

Private respondents contend that by virtue of the doctrine of separation of church and
state, the Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint
filed by petitioner. Since the matter at bar allegedly involves the discipline of a religious
minister, it is to be considered a purely ecclesiastical affair to which the State has no
right to interfere.
LA RULING: The Labor Arbiter RENDERED DECISION IN FAVOR OF
PETITIONER.
 NLRC RULING: sustained the argument posed by private respondents
and, accordingly, dismissed the
complaint of petitioner.

ISSUE: Does the LA have jurisdiction over the case?

SC RULING:
 YES. Under the Labor Code, the provision which governs the dismissal
of employees, is comprehensive enough to include religious corporations, such as the
SDA, in its coverage. Article 278 of the Labor Code on post- employment states that
the provisions of this Title shall apply to all establishments or undertakings, whether for
profit or not. Obviously, the cited article does not make any exception in favor of a
religious corporation. This is made more evident by the fact that the Rules
Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the
Termination of Employment and Retirement, categorically includes religious institutions
in the coverage of the law, to wit:

Section 1. Coverage. This Rule shall apply to all establishments and undertakings,
whether operated for profit or not, including educational, medical, charitable and
religious institutions and organizations, in cases of regular employment with the
exception of the Government and its political subdivisions including government-owned
or controlled corporations.

With this clear mandate, the SDA cannot hide behind the mantle of protection of the
doctrine of separation of church and state to avoid its responsibilities as an employer
under the Labor Code.
Finally, as correctly pointed out by petitioner, private respondents are estopped from
raising the issue of lack of jurisdiction for the first time on appeal. It is already too late
in the day for private respondents to question the jurisdiction of the NLRC and the
Labor Arbiter since the SDA had fully participated in the trials and hearings of the case
from start to finish. The Court has already ruled that the active participation of a party
against whom the action was brought, coupled with his failure to object to the
jurisdiction of the court or quasi-judicial body where the action is pending, is
tantamount to an invocation of that jurisdiction and a willingness to abide by the
resolution of the case and will bar said party from later on impugning the court or bodys
jurisdiction. Thus, the active participation of private respondents in the proceedings
before the Labor Arbiter and the NLRC mooted the question on jurisdiction.

ARSENIO LOCSIN v. NISSAN CAR LEASE PHILS., INC. (NCLPI) and LUIS
BANSON G.R. No. 185567 October 20, 2010
 BRION, J.:
LA HAS NO JURISDICTION OVER INTRA-CORPORATE CONTROVERSY

DOCTRINE:
Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the
NLRC, has jurisdiction to hear the legality of the termination of his relationship with
Nissan. A corporate officers dismissal is always a corporate act, or an intra-corporate
controversy which arises between a stockholder and a corporation so that RTC should
exercise jurisdiction based on Section 5(c) of PD 902-A.

FACTS:

Locsin was elected Executive Vice President and Treasurer (EVP/Treasurer) of NCLPI.
Locsin held this position for 13 years until he was nominated and elected Chairman. A
few months thereafter, an election was held and Locsin was neither re-elected
Chairman nor reinstated to his previous position as EVP/Treasurer. Locsin filed a
complaint for illegal dismissal before the Labor Arbiter against NCLPI. NCLPI filed a
Motion to Dismiss on the ground that the Labor Arbiter did not have jurisdiction over
the case since the issue of Locsins removal as EVP/Treasurer involves an intra-
corporate dispute. Locsin maintained that he is an employee of NCPI.
LA RULING: LA denied the Motion to Dismiss, holding that its office-acquired
jurisdiction to arbitrate and/or decide the instant complaint finding extant in the case an
employer-employee relationship. Article 280 of the Labor Code, the receipt of salaries
by Locsin, SSS deductions on that salary, and the element of control in the
performance of work duties were used by LA to conclude that Locsin was a regular
employee.

CA RULING: NCLPI elevated the case to the CA through a Petition for Certiorari under
Rule 65 of the Rules of Court. CA ruled that Locsin was a corporate officer; hence the
issue of his removal as EVP/Treasurer is an intra- corporate dispute under the RTCs
jurisdiction. The fact that the position of EVP/Treasurer is specifically enumerated as
an office in the corporations by-laws makes him a corporate officer.

ISSUE: Whether Locsin’s position as EVP/Treasurer makes him a corporate officer

thereby excluding him from the coverage of the Labor Code?
SC RULING:
 YES. Locsin was undeniably Chairman and President, and was elected
to these positions by the Nissan board pursuant to its By-laws. As such, he was a
corporate officer, not an employee. Section 25 of the Corporation Code provides that
corporate officers are the president, secretary, treasurer and such other officers as
may be provided for in the by-laws.

Even as EVP/Treasurer, Locsin already acted as a corporate officer because such

position is provided for in Nissans By-Laws. An office is created by the charter of the
corporation and the officer is elected by the directors or stockholders. On the other
hand, an employee usually occupies no office and generally is employed by the
managing officer of the corporation who also determines the compensation to be paid
to such employee. Locsin was elected by the NCLPI Board, in accordance with the
Amended By-Laws of the corporation.

Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the
NLRC, has jurisdiction to hear the legality of the termination of his relationship with
Nissan. A corporate officers dismissal is always a corporate act, or an intra-corporate
controversy which arises between a stockholder and a corporation so that RTC should
exercise jurisdiction based on Section 5(c) of PD 902-A.

GILDA G. LUNZAGA v. ALBAR SHIPPING AND TRADING CORP. AND/OR AKIRA

KATO, AND DARWIN, VENUS, ROMEO ULYSSES, MARIKIT ODESSA, ALL
SURNAMED LUNZAGA (Lunzaga Siblings) G.R. No. 200476 April 18, 2012

RELAXATION OF THE TECHNICAL RULES (1-DAY LATE IN FILING AN APPEAL)

DOCTRINE:

It has been said this time and again that the perfection of an appeal within the period
fixed by the rules is mandatory and jurisdictional. But, it is always in the power of this
Court to suspend its own rules, or to except a particular case from its operation,
whenever the purposes of justice require it. Strong compelling reasons such as serving
the ends of justice and preventing a grave miscarriage thereof warrant the suspension
of the rules.

FACTS:
Romeo Lunzaga was a seaman working for Albar Shipping. On June 11, 2008, Romeo
was assigned as Chief Engineer on board Albar's Philippine vessel MV Lake Aru. One
month later, Romeo suffered a heart attack and was repatriated to the Philippines only
to die on September 5, 2008.
Sometime in early 2009, Gilda, claiming to be the surviving spouse of Romeo, filed
with the NLRC a complaint against Albar Shipping for payment of death benefits,
damages and attorney's fees. It should be noted that Gilda was the designated heir in
Romeo's Overseas Filipino Worker Verification Sheet and PhilHealth Information
Sheet. The Lunzaga sibling, children of Romeo from his first marriage that was
judicially declared null and void, opposed the complaint through a complaint-in-
intervention. The Lunzaga siblings claimed that Gilda is not entitled to the death
benefits of Romeo, as she had a subsisting marriage when she married him. They
claim that her marriage with Romeo was, therefore, bigamous. . During the mandatory
conferences of the parties before the Labor Arbiter, Albar Shipping signified its
willingness to pay Romeo's death benefits in the amount of USD 55,547.44. However,
Gilda and the Lunzaga siblings could not agree as to the sharing of the benefits.
LA RULING:
The Labor Arbiter issued an Order temporarily dismissing the complaint and directing
the parties to file their case with the regular courts.

Gilda appealed to the NLRC, however, the same was made one day past the 10-day
period for filing an appeal from the decision of the Labor Arbiter

NLRC RULING: DISMISSED for filing beyond the regalamentary period.

CA RULING: AFFIRMED the decision of the NLRC
 The CA ruled that despite the fact
that the appeal to the NLRC was filed only one day beyond the reglementary period,
Gilda failed to present any reason for the liberal application of the rule on filing of
appeals.
ISSUE: Did the NLRC and the CA err in not giving due course to the appeal due to a
one (1)-day delay of its filing?
SC RULING:
 YES. Considering that the issue on whether the heirs of Romeo are
entitled to receive his death benefits from Albar Shipping properly falls under the
jurisdiction of the LA, the NLRC and the CA should have had relaxed the rigid
application of the rules of procedure to afford the parties the opportunity to fully
ventilate their cases on the merits. This is in line with the time honored principle that
cases should be decided only after giving all parties the chance to argue their causes
and defenses. Technicality and procedural imperfections should thus not serve as
bases of decisions. In that way, the ends of justice would be better served. For indeed,
the general objective of procedure is to facilitate the application of justice to the rival
claims of contending parties, bearing always in mind that procedure is not to hinder but
to promote the administration of justice.

Verily, Albar Shipping is liable to the heirs of Romeo for the amount of USD 55,547.44.
Albar hereby is ordered to deposit this amount in an escrow account under the control
of the NLRC in order to protect the interests of Romeo's heirs. The parties claiming to
be the beneficiaries of Romeo are directed to file the appropriate action with a trial
court.

MA. ISABEL T. SANTOS, represented by ANTONIO P. SANTOS, v. SERVIER

PHILIPPINES, INC. and NATIONAL LABOR RELATIONS COMMISSION
 G.R. No.
166377 November 28, 2008
 NACHURA, J.:

DOCTRINE:

The issue of deduction for tax purposes is intertwined with the main issue of whether or
not petitioners benefits have been fully given her. It is, therefore, a money claim arising
from the employer-employee relationship, which clearly falls within the
jurisdictionhttp://sc.judiciary.gov.ph/jurisprudence/2008/november2008/166377.htm -
_ftn41 of the Labor Arbiter and the NLRC.

FACTS:
Ma. Isabel T. Santos was the Human Resource Manager of respondent Servier
Philippines, Inc., Isabel attended a meeting of all human resource managers of
respondent, held in Paris, France. Since the last day of the meeting coincided with the
graduation of Santos’ only child, she arranged for a European vacation with her family
right after the meeting.
Isabel together with her husband Antonio P. Santos, her son, and some friends, had
dinner at Leon des Bruxelles, a Paris restaurant known for mussels as their specialty.
While having dinner, petitioner complained of stomach pain, then vomited. Eventually,
she was brought to the hospital where she fell into coma for 21 days; and later stayed
at the Intensive Care Unit (ICU) for 52 days.
During the time that petitioner was confined at the hospital, her husband and son
stayed with her in Paris. Petitioners hospitalization expenses, as well as those of her
husband and son, were paid by respondent.

She went back to the Philippines and was then confined at the St. Lukes Medical
Center for rehabilitation. During the period of petitioners rehabilitation, respondent
continued to pay the formers salaries; and to assist her in paying her hospital bills.

Petitioners physician concluded that the Santos had not fully recovered mentally and
physically. Hence, respondent was constrained to terminate petitioners services.

Respondent offered a retirement package.

Of the promised retirement benefits amounting to P1,063,841.76, only P701,454.89

was released to petitioners husband, the balance thereof was withheld allegedly for
taxation purposes. Respondent also failed to give the other benefits. Petitioner,
represented by her husband, instituted the instant case for unpaid amounts.

LA RULING: Labor Arbiter dismissed petitioners complaint. The Labor Arbiter stressed
that respondent had been generous in giving financial assistance to the petitioner. The
arbiter refused to rule on the legality of the deductions made by respondent from
petitioners total retirement benefits for taxation purposes, as the issue was beyond the
jurisdiction of the NLRC.
NLRC RULING: NLRC set aside the Labor Arbiters decision.

The NLRC emphasized that petitioner was not retired from the service pursuant to law,
collective bargaining agreement (CBA) or other employment contract; rather, she was
dismissed from employment due to a disease/disability under Article 284. The NLRC
therefore ordered the payment of the other benefits promised by the respondent.

CA RULING: affirmed the NLRC decision.

ISSUE: Whether the benefits are taxable and thus, it was proper for Servier to deduct
P362,386.87 for taxation benefits. (Court ruled that petitioners belatedly claimed
entitlement to retirement benefits which issues are not raised in the pleading, thus
deemed abandoned.)

SC RULING:
 YES. As she was dismissed on the ground of Disease, the law gives the
petitioner the right to demand separation pay. However, respondent established a
retirement plan in favor of all its employees.The receipt of retirement benefits does not
bar the retiree from receiving separation pay. Separation pay is a statutory right
designed to provide the employee with the wherewithal during the period that he/she is
looking for another employment. On the other hand, retirement benefits are intended to
help the employee enjoy the remaining years of his life, lessening the burden of
worrying about his financial support, and are a form of reward for his loyalty and
service to the employer.[34] Hence, they are not mutually exclusive. However, this is
only true if there is no specific prohibition against the payment of both benefits in the
retirement plan and/or in the Collective Bargaining Agreement (CBA).[35]

In the instant case, the Retirement Plan bars the petitioner from claiming additional
benefits on top of that provided. Section 2, Article XII of the Retirement Plan provides:

Section 2. NO DUPLICATION OF BENEFITS

Petitioners claim for illegal deduction (for tax purposes) falls within the tribunals
jurisdiction. It is noteworthy that petitioner demanded the completion of her retirement
benefits, including the amount withheld by respondent for taxation purposes. The issue
of deduction for tax purposes is intertwined with the main issue of whether or not
petitioners benefits have been fully given her. It is, therefore, a money claim arising
from the employer- employee relationship, which clearly falls within the jurisdiction[41]
of the Labor Arbiter and the NLRC.

Section 32 (B) (6) (a) of the New National Internal Revenue Code (NIRC) provides for
the exclusion of retirement benefits from gross income.
Thus, for the retirement benefits to be exempt from the withholding tax, the taxpayer is
burdened to prove the concurrence of the following elements: (1) a reasonable private
benefit plan is maintained by the employer; (2) the retiring official or employee has
been in the service of the same employer for at least ten (10) years; (3) the retiring
official or employee is not less than fifty (50) years of age at the time of his retirement;
and (4) the benefit had been availed of only once.[43]

Petitioner was qualified for disability retirement. At the time of such retirement,
petitioner was only 41 years of age; and had been in the service for more or less eight
(8) years. As such, the above provision is not applicable for failure to comply with the
age and length of service requirements. Therefore, respondent cannot be faulted for
deducting from petitioners total retirement benefits the amount of P362,386.87, for
taxation purposes.

HALGUENA v. PAL
 G.R. No. 172013 October 2, 2009 PERALTA, J.:

JURISDICTION OF LABOR ARBITER
DOCTRINE:

Not every controversy or money claim by an employee against the employer or vice-
versa is within the exclusive jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is
within the exclusive jurisdiction of the regular court.
FACTS:

Petitioners were employed as female flight attendants of PAL. They are members of
the Flight Attendants and Stewards Association of the Philippines (FASAP), the
exclusive exclusive bargaining representative of the flight attendants.Section 144, Part
A of the PAL-FASAP CBA, provides that: “3. Compulsory Retirement. Subject to the
grooming standards provisions of this Agreement, compulsory retirement shall be fifty-
five (55) for females and sixty (60) for males. x x x.” petitioners and several female
cabin crews manifested that the aforementioned CBA provision on compulsory
retirement is discriminatory, and demanded for an equal treatment with their male
counterparts. This demand was reiterated in a letter. On July 12, 2004, Robert D.
Anduiza, President of FASAP submitted their 2004-2005 CBA proposals[6] and
manifested their willingness to commence the collective bargaining negotiations
between the management and the association, at the soonest possible time.

In 2004, petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the
Issuance of TRO and Writ of Preliminary Injunction with the Regional Trial Court (RTC)
of Makati Cityagainst respondent for the invalidity of Section 144, Part A of the PAL-
FASAP CBA.

RTC RULING: The RTC issued an Order upholding its jurisdiction over the present
case. The RTC reasoned that: The allegations in the Petition do not make out a labor
dispute arising from employer-employee relationship as none is shown to exist. This
case is not directed specifically against respondent arising from any act of the latter,
nor does it involve a claim against the respondent. Rather, this case seeks a
declaration of the nullity of the questioned provision of the CBA, which is within the
Court's competence, with the allegations in the Petition constituting the bases for such
relief sought.

The RTC issued a TRO on August 10, 2004, enjoining the respondent for
implementing Section 144, Part A of the PAL-FASAP CBA.

CA RULING: declared RTC to have NO JURISDICTION OVER THE CASE
 ISSUE:

Does the RTC have jurisdiction over the petitioners' action challenging the legality or
constitutionality of

the provisions on the compulsory retirement age contained in the CBA between
respondent PAL and FASAP?
SC RULING:
 YES. The subject of litigation is incapable of pecuniary estimation,
exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg.
129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of
labor tribunals.
The said issue cannot be resolved solely by applying the Labor Code. Rather, it
requires the application of the Constitution, labor statutes, law on contracts and the
Convention on the Elimination of All Forms of Discrimination Against Women, and the
power to apply and interpret the constitution and CEDAW is within the jurisdiction of
trial courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani,
this Court held that not every dispute between an employer and employee involves
matters that only labor arbiters and the NLRC can resolve in the exercise of their
adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC
under Article 217 of the Labor Code is limited to disputes arising from an employer-
employee relationship which can only be resolved by reference to the Labor Code,
other labor statutes, or their collective bargaining agreement.

Not every controversy or money claim by an employee against the employer or vice-
versa is within the exclusive jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is
within the exclusive jurisdiction of the regular court. Here, the employer-employee
relationship between the parties is merely incidental and the cause of action ultimately
arose from different sources of obligation, i.e., the Constitution and CEDAW.

Thus, where the principal relief sought is to be resolved not by reference to the Labor
Code or other labor relations statute or a collective bargaining agreement but by the
general civil law, the jurisdiction over the dispute belongs to the regular courts of
justice and not to the labor arbiter and the NLRC. In such situations, resolution of the
dispute requires expertise, not in labor management relations nor in wage structures
and other terms and conditions of employment, but rather in the application of the
general civil law. Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting
jurisdiction over such claims to these agencies disappears.

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its

Plant General Manager
ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA
v. HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA,
WILFREDO CABAÑAS &

FULGENCIO LEGO

G.R. No. 89621 September 24, 1991

CRUZ, J.:

DOCTRINE: Not every controversy involving workers and their employers can be
resolved only by the labor arbiters. This will be so only if there is a "reasonable causal
connection" between the claim asserted and employee-employer relations to put the
case under the provisions of Article 217. Absent such a link, the
complaint will be cognizable by the regular courts of justice in the exercise of their civil
and criminal jurisdiction.
FACTS: The private respondents were employees of the Pepsi who were suspected of
complicity in the irregular disposition of empty Pepsi Cola bottles. Pepsi filed a criminal
complaint for theft against them but this was later withdrawn and substituted with a
criminal complaint for falsification of private documents. After a preliminary
investigation, the complaint was dismissed. The dismissal was affirmed by the Office of
the

Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents were
dismissed by the

petitioner company As a result, they lodged a complaint for illegal dismissal with NLRC
in Tacloban City.

NLRC RULING: mandated reinstatement with damages.

In addition, they instituted in the Regional Trial Court of Leyte, a separate civil
complaint against the petitioners

for damages arising from what they claimed to be their malicious prosecution.
Pepsi moved to dismiss the civil complaint on the ground that the trial court had no
jurisdiction over the case

because it involved employee-employer relations.

RTC RULING: the respondent judge, acting on the motion for reconsideration,
reinstated the complaint, saying

it was "distinct from the labor case for damages now pending before the labor courts.

Pepsi invoke Article 217 of the Labor Code and a number of decisions of this Court to
support their position that

the private respondents civil complaint for damages falls under the jurisdiction of the
labor arbiter.
ISSUE: Whether the RTC has jurisdiction over the case?

SC RULING:

YES. Not every controversy involving workers and their employers can be resolved
only by the labor arbiters. This will be so only if there is a "reasonable causal
connection" between the claim asserted and employee- employer relations to put the
case under the provisions of Article 217. Absent such a link, the complaint will be

cognizable by the regular courts of justice in the exercise of their civil and criminal
jurisdiction.

EXAMPLES OF CASES:

In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First Instance of

Rizal a civil complaint for damages against their employer for slanderous remarks
made against them by the company president. Theirs is a simple action for damages
for tortious acts allegedly committed by the defendants. Such being the case, the
governing statute is the Civil Code and not the Labor Code. It

results that the orders under review are based on a wrong premise.
1.)
2.)

3.)
In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for damages for
alleged violation by the defendant of an "Agreement for a Course of Conversion
Training at the Expense of Singapore Airlines Limited. Petitioner seeks protection
under the civil laws and claims no benefits under the Labor

Code. The primary relief sought is for liquidated damages for breach of a contractual
obligation.

In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the claim of
the plaintiff against its sales manager for payment of certain accounts pertaining to his
purchase of vehicles and automotive parts, repairs of such vehicles, and cash
advances from the corporation was properly cognizable by the Regional Trial Court
because "although a controversy is between an employer and an employee, the
Labor Arbiters have no jurisdiction if the Labor Code is not involved."

4.)
The latest ruling on this issue is found in San Miguel Corporation v. NLRC. That case
involved a claim of an employee for a P60,000.00 prize for a proposal made by him
which he alleged had been accepted

and implemented by the defendant corporation.

Where the claim to the principal relief sought is to be resolved not by reference to the
Labor Code or other labor relations statute or a collective bargaining agreement but by
the general civil law, the jurisdiction over the dispute belongs to the regular courts of
justice and not to the Labor Arbiter and the NLRC. While paragraph 3 above refers to
"all money claims of workers," it is not necessary to suppose that the entire universe of
money claims that might be asserted by workers against their employers has been
absorbed into the original and

exclusive jurisdiction of Labor Arbiters.

The case now before the Court involves a complaint for damages for malicious
prosecution which was filed with the Regional Trial Court of Leyte by the employees of
the defendant company. It does not appear that there is a "reasonable causal
connection" between the complaint and the relations of the parties as employer and
employees. The complaint did not arise from such relations and in fact could have
arisen independently of an employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the employees are alleging is
that the petitioners acted with bad faith when they filed the criminal complaint which the
Municipal Trial Court said was intended "to harass the poor employees" and the
dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to
establish even a slightest probability that all the respondents herein have committed
the crime imputed against them." This is a matter which the labor arbiter
has no competence to resolve as the applicable law is not the Labor Code but the
Revised Penal Code.

BEBIANO M. BAÑEZ v. HON. DOWNEY C. VALDEVILLA and ORO MARKETING,

INC. G.R. No. 128024 May 9, 2000
 GONZAGA-REYES, J.:

DOCTRINE:
By the designating clause "arising from the employer-employee relations" Article 217
should apply with equal force to the claim of an employer for actual damages against
its dismissed employee, where the basis for the claim arises from or is necessarily
connected with the fact of termination, and should be entered as a counterclaim in the
illegal dismissal case.
This is, of course, to distinguish from cases of actions for damages where the
employer-employee relationship is merely incidental and the cause of action proceeds
from a different source of obligation. Thus, the jurisdiction of regular courts was upheld
where the damages, claimed for were based on tort, malicious prosecution, or breach
of contract, as when the claimant seeks to recover a debt from a former employee or
seeks liquidated damages in enforcement of a prior employment contract.

FACTS:
Bebiano Baez was the sales operations manager of Oro Marketing in its branch in
Iligan City Oro "indefinitely suspended" petitioner and the latter filed a complaint for
illegal dismissal with NLRC.

Baez alleged a modus operandi used by Oro Marketing. herein: Defendant canvassed
customers personally or through salesmen of plaintiff which were hired or recruited by
him. If said customer decided to buy items from plaintiff on installment basis,
defendant, without the knowledge of said customer and plaintiff, would buy the items
on cash basis at ex-factory price, a privilege not given to customers, and thereafter
required the customer to sign promissory notes and other documents using the name
and property of plaintiff, purporting that said customer purchased the items from
plaintiff on installment basis. Thereafter, defendant collected the installment payments
either personally or through Venus Lozano, a Group Sales Manager of plaintiff but also
utilized by him as secretary in his own business for collecting and receiving of
installments, purportedly for the plaintiff but in reality on his own account or business.
The collection and receipt of payments were made inside the Iligan City branch using
plaintiffs facilities, property and manpower. That accordingly plaintiffs sales decreased
and reduced to a considerable extent the profits which it would have earned.

LA RULING: Labor Arbiter found petitioner to have been illegally dismissed.

NLRC RULING: dismissed the same for having been filed out of time.

Elevated by petition for certiorari before the Supreme Court, the case was dismissed
on technical grounds[3]; and that even if all the procedural requirements for the filing of
the petition were met, it would still be dismissed for failure to show grave abuse of
discretion on the part of the NLRC.

Oro filed a complaint for damages before RTC Misamis Oriental which prayed for the
payment of loss of profit and/or unearned income and expenses of litigation.

Baez filed a motion to dismiss the above complaint. He interposed in the court below
that the action for damages, having arisen from an employer-employee relationship,
was squarely under the exclusive original jurisdiction of the NLRC. He accused Oro
Marketing of splitting causes of action, stating that the latter could very well have
included the instant claim for damages in its counterclaim before the Labor Arbiter. He
also pointed out that the civil action of private respondent is an act of forum-shopping.

RTC RULING: A perusal of the complaint which is for damages does not ask for any
relief under the Labor Code. The Court believes such cause of action is within the
realm of civil law, and jurisdiction over the controversy belongs to the regular courts.

ISSUE: Whether RTC has jurisdiction over the case.

SC RULING:
 NO. Article 217(a), paragraph 4 of the Labor Code,

ART. 217. Jurisdiction of Labor Arbiters and the Commission.

4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
The above provisions are a result of the amendment by Section 9 of R.A. No. 6715,
which put to rest the earlier confusion as to who between Labor Arbiters and regular
courts had jurisdiction over claims for damages as between employers and employees.
By the designating clause "arising from the employer-employee relations" Article 217
should apply with equal force to the claim of an employer for actual damages against
its dismissed employee, where the basis for the claim arises from or is necessarily
connected with the fact of termination, and should be entered as a counterclaim in the
illegal dismissal case.
In the case before us, private respondent's claim against petitioner for actual damages
arose from a prior employer-employee relationship. In the first place, private
respondent would not have taken issue with petitioner's "doing business of his own"
had the latter not been concurrently its employee.
Second, and more importantly, to allow respondent court to proceed with the instant
action for damages would be to open anew the factual issue of whether petitioner's
installment sale scheme resulted in business losses and the dissipation of private
respondent's property. This issue has been duly raised and ruled upon in the illegal
dismissal case. The Labor Arbiter, however, found to the contrary ---that no business
losses may be attributed to petitioner as in fact, it was by reason of petitioner's
installment plan that the sales of the Iligan branch reached its highest record level.

Evidently, the lawmaking authority had second thoughts about depriving the Labor
Arbiters and the NLRC of the jurisdiction to award damages in labor cases because
that setup would mean duplicity of suits, splitting the cause of action and possible
conflicting findings and conclusions by two tribunals on one and the same claim.

This is, of course, to distinguish from cases of actions for damages where the
employer-employee relationship is merely incidental and the cause of action proceeds
from a different source of obligation. Thus, the jurisdiction of regular courts was upheld
where the damages, claimed for were based on tort, malicious prosecution, or breach
of contract, as when the claimant seeks to recover a debt from a former employee or
seeks liquidated damages in enforcement of a prior employment contract.

Furthermore, the Labor Arbiter has jurisdiction to award not only the reliefs provided by
labor laws, but also damages governed by the Civil Code.
EX-BATAAN VETERANS SECURITY AGENCY, INC., (EBVSAI) v. THE SECRETARY
OF LABOR BIENVENIDO E. LAGUESMA
 G.R. No. 152396 November 20,
2007
 CARPIO, J.:

THE VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL

DIRECTOR CAN BE

EXERCISED EVEN WHERE THE INDIVIDUAL CLAIM EXCEEDS P5,000

DOCTRINE:
While it is true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction
to hear and decide cases where the aggregate money claims of each employee exceeds
P5,000.00, said provisions of law do not contemplate nor cover the visitorial and
enforcement powers of the Secretary of Labor or his duly authorized representatives.
Rather, said powers are defined and set forth in Article 128 of the Labor Code.
FACTS:

Private respondents are EBVSAI's employees who instituted a complaint for

underpayment of wages against EBVSAI before the Regional Office (RO) of DOLE.
Consequently, RO conducted a complaint inspection of EBVSAI’s Plant where several
labor law violations were noted. On the same day, the RO issued a notice of hearing
requiring EBVSAI and private respondents to attend. After the hearing, the Regional
Director (RD) ordered EBVSAI to pay Php 763,927.85 to the affected employees.

EBVSAI filed a motion for reconsideration and alleged that under Articles 129 and 217(6)
of the Labor Code, the Labor Arbiter, not the Regional Director, has exclusive and
original jurisdiction over the case because the individual monetary claim of private
respondents exceeds P5,000. RD denied the motion stating that, pursuant to RA 7730,
the limitations under Articles 129 and 217(6) of the Labor Code no longer apply to the
Secretary of Labor's visitorial and enforcement powers under Article 128(b). The
Secretary of Labor or his duly authorized representatives are now empowered to hear
and decide, in a summary proceeding, any matter involving the recovery of any amount
of wages and other monetary claims arising out of employer-employee relations at the
time of the inspection.

DOLE SECRETARY RULING: It affirmed the Director’s decision on the ground that
pursuant to RA 7730, the Court's decision in the Servando case is no longer controlling
insofar as the restrictive effect of Article 129 on the visitorial and enforcement power of
the Secretary of Labor is concerned.
CA RULING: affirmed DOLE Secretary ruling
 ISSUE: Whether the Secretary of Labor
or his duly authorized representatives have jurisdiction over the money

claims of private respondents which exceed P5,000?

SC RULING:
 YES. In Allied Investigation Bureau, Inc. v. Sec. of Labor, SC ruled that
while it is true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction
to hear and decide cases where the aggregate money claims of each employee exceeds
P5,000.00, said provisions of law do not contemplate nor cover the visitorial and
enforcement powers of the Secretary of Labor or his duly authorized representatives.
Rather, said powers are defined and set forth in Article 128 of the Labor Code (as
amended by R.A. No. 7730) thus: (b) Notwithstanding the provisions of Article[s] 129 and
217 of this Code to the contrary, and in cases where the relationship of employer-
employee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to [the
labor standards provisions of this Code and other] labor legislation based on the findings
of labor employment and enforcement officers or industrial safety engineers made in the
course of inspection.

However, if the labor standards case is covered by the exception clause in Article 128(b)
of the Labor Code, then the RD will have to endorse the case to the appropriate
Arbitration Branch of the NLRC. In order to divest the RD or his representatives of
jurisdiction, the following elements must be present: (a) that the employer contests the
findings of the labor regulations officer and raises issues thereon; (b) that in order to
resolve such issues, there is a need to examine evidentiary matters; and (c) that such
matters are not verifiable in the normal course of inspection. The rules also provide that
the employer shall raise such objections during the hearing of the case or at any time
after receipt of the notice of inspection results.

In this case, the RD validly assumed jurisdiction over the money claims of private
respondents even if the claims exceeded P5,000 because such jurisdiction was
exercised in accordance with Article 128(b) of the Labor Code and the case does not
fall under the exception clause. EBVSAI did not contest the findings of the labor
regulations officer during the hearing or after receipt of the notice of inspection results.
It was only in its supplemental motion for reconsideration before the RD that EBVSAI
questioned the findings of the labor regulations officer and presented documentary
evidence to controvert the claims of private respondents. But even if this was the case,
the RD and the Secretary of Labor still looked into and considered EBVSAI's
documentary evidence and found that such did not warrant the reversal of the order.

PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.) vs. SECRETARY OF

DOLE G.R. No. 179652 May 8, 2009
 TINGA, J.:
Doctrine:
The Department of Labor and Employment is fully empowered to make a determination
as to the existence of an employer-employee relationship in the exercise of its visitorial
and enforcement power.
FACTS:

Private respondent Jandeleon Juezan filed a complaint against petitioner before

(DOLE) Regional Office, for illegal deduction, nonpayment of service incentive leave,
13th month pay, premium pay for holiday and rest day and illegal diminution of
benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and
Philhealth. After summary investigation, DOLE found that private respondent was an
employee of petitioner, and was entitled to his money. Bombo Radyo appealed the
decision, but the DOLE dismissed the same. The Court of Appeals (CA) afirmed such
dismissal.
When the matter reached the Supreme Court, the CA decision was reversed and set
aside. The Court found that there was no employer-employee relationship between
Bombo Radyo and Juezan. It was held that while the DOLE may make a determination
of the existence of an employer-employee relationship, this function could not be co-
extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor
Code, as amended by RA 7730. The National Labor Relations Commission (NLRC)
was held to be the primary agency in determining the existence of an employer-
employee relationship. From this decision, the Public Attorney’s Ofice (PAO) filed a
Motion for Clariication of Decision (with Leave of Court). The PAO sought to clarify as
to when the visitorial and enforcement power of the DOLE can be considered as co-
extensive with the power to determine the existence of an employer-employee
relationship. The Court treated the Motion for Clarification as a second motion for
reconsideration, granting said motion and reinstating the petition.

ISSUE: Whether or not the Department of Labor and Employment has the power to
determine the existence of employer-employee relationship in its exercise of its
visitorial and its enforcement power.

RULING:

No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer- employee relationship. No procedure was laid down where
the DOLE would only make a preliminary inding, that the power was primarily held by
the NLRC. The law did not say that the DOLE would first seek the NLRC’s
determination of the existence of an employer-employee relationship, or that should
the existence of the employer-employee relationship be disputed, the DOLE would
refer the matter to the NLRC. The DOLE must have the power to determine whether or
not an employer-employee relationship exists, and from there to decide whether or not
to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as
amended by RA 7730.
The determination of the existence of an employer-employee relationship by the DOLE
must be respected. The expanded visitorial and enforcement power of the DOLE
granted by RA 7730 would be rendered nugatory if the alleged employer could, by the
simple expedient of disputing the employer- employee relationship, force the referral of
the matter to the NLRC. The Court issued the declaration that at least a prima facie
showing of the absence of an employer-employee relationship be made to oust the
DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence,
and it is the DOLE that will weigh it, to see if the same does successfully refute the
existence of an employer-employee relationship.

PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) vs. THE

SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN
 G.R. No.
179652 March 6, 2012

VELASCO, JR., J.:

DOCTRINE:
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power, subject to judicial
review, not review by the NLRC.
FACTS:

Jandeleon Juezan filed a complaint against Peoples Broadcasting Service (Bombo)

with the DOLE Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of
service incentive leave, 13th month pay, among others. After the conduct of summary
investigations, and after the parties submitted their position papers, the DOLE
Regional Director found that Juezan was an employee of Bombo, and was entitled to
his money claims. Bombo sought reconsideration of the Directors Order, but failed.

The Acting DOLE Secretary dismissed Bombo’s appeal. When the matter was brought
before the CA, where Bombo claimed that it had been denied due process, it was held
that Bombo was accorded due process as it had been given the opportunity to be
heard, and that the DOLE Secretary had jurisdiction over the matter, as the
jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the
DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No.
(RA) 7730.

SC reversed the CA Decision and the complaint against Bombo was dismissed. The
Court found that there was no employer-employee relationship between Bombo and
Juezan. It was held that while the DOLE may make a determination of the existence of
an employer-employee relationship, this function could not be co-extensive with the
visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as
amended by RA 7730. The NLRC was held to be the primary agency in determining
the existence of an employer-employee relationship. From this Decision, the Public
Attorneys Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court).
The PAO sought to clarify as to when the visitorial and enforcement power of the
DOLE be not considered as co-extensive with the power to determine the existence of
an employer-employee relationship. The SC revisits its former conclusion.

ISSUE: Whether DOLE can make a determination of the existence of employer-

employee relationship.

SC RULING:
 YES. No limitation in the law was placed upon the power of the DOLE to
determine the existence of an employer-employee relationship. No procedure was laid
down where the DOLE would only make a preliminary finding, that the power was
primarily held by the NLRC. The law did not say that the DOLE would first seek the
NLRC’s determination of the existence of an employer-employee relationship, or that
should the existence of the employer-employee relationship be disputed, the DOLE
would refer the matter to the NLRC. The DOLE must have the power to determine
whether or not an employer-employee relationship exists, and from there to decide
whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor
Code, as amended by RA 7730.

The determination of the existence of an employer-employee relationship by the DOLE

must be respected. The expanded visitorial and enforcement power of the DOLE
granted by RA 7730 would be rendered nugatory if the alleged employer could, by the
simple expedient of disputing the employer-employee relationship, force the referral of
the matter to the NLRC. If the DOLE makes a finding that there is an existing
employer-employee relationship, it takes cognizance of the matter, to the exclusion of
the NLRC. The DOLE would have no jurisdiction only if the employer-employee
relationship has already been terminated, or it appears, upon review, that no employer-
employee relationship existed in the first place.
If a complaint is brought before the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor legislation, and there is a finding by the
DOLE that there is an existing employer-employee relationship, the DOLE exercises
jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-
employee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed
with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is
properly with the Labor Arbiter, under Art. 217(3) of the Labor Code. If a complaint is
filed with the NLRC, and there is still an existing employer-employee relationship, the
jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.

SANTIAGO vs. CF SHARP CREW MANAGEMENT INC. G.R. No. 162419 July 10,
2007
 Tinga, J.:
Doctrine:

The jurisdiction of labor arbiters is not limited to claims arising from employer-employee
relationships. Under Section 10 of R.A. No. 8042 the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall also have the original and exclusive
jurisdiction to hear and decide, the claims arising xxx by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
FACTS:

On 3 February 1998, Paul Santiago signed a new contract of employment with CF

Sharp Crew Mgmt., Inc., with the duration of nine (9) months. He was assured of a
monthly salary of US$515.00, overtime pay and other benefits. Santiago was to be
deployed on board the "MSV Seaspread" which was scheduled to leave the port of
Manila for Canada on 13 February 1998.

A week before the scheduled date of departure, Capt. Pacifico Fernandez, CF Sharp’s
Vice President, sent a fax to the captain of "MSV Seaspread telling the latter that he
received calls from various individuals about the possibility that Santiago may jump
ship in Canada like his brother did before him. On 9 February 1998, Santiago was thus
told that he would not be leaving for Canada anymore, but he was reassured that he
might be considered for deployment at some future date.
Consequently, Santiago filed a complaint for illegal dismissal, damages, and attorney's
fees against CF Sharp and its foreign principal. In defense, CF Sharp contends that
there is no employer-employee relationship between petitioner and respondent
because under the POEA Standard Contract, the employment contract shall
commence upon actual departure of the seafarer from the airport or seaport at the
point of hire. In the absence of an employer-employee relationship between the
parties, the claims for illegal dismissal, actual damages, and attorney’s fees should be
dismissed as the NLRC does not have jurisdiction over the same.

ISSUE: WON the failure of CF Sharp to deploy Santiago without a valid contract
entitles the latter to relief sought despite the non-commencement of the employer-
employee relationship?

SC RULING:
 YES. The jurisdiction of labor arbiters is not limited to claims arising
from employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers
Act), provides that the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide, the claims
arising xxx by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.

Here, since the present petition involves the employment contract entered into by
petitioner for overseas employment, his claims are cognizable by the labor arbiters of
the NLRC.

Even before the start of any employer-employee relationship, contemporaneous with

the perfection of the employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of action against the erring
party. Thus, if the reverse had happened, that is the seafarer failed or refused to be
deployed as agreed upon, he would be liable for damages.

PONDOC vs. NLRC FACTS:

Andres Pondoc was employed by Eulalio Pondoc as a laborer. However, in the
exercise of his duty, he is constantly asked to render work on his rest days and
holidays, and is not paid of his premium pay as required by law. Natividad Pondoc, on
behalf of her husband, filed a complaint for salary differential, overtime pay, 13th
month pay, holiday pay and other money claims before the NLRC. In his position
paper, private respondent now questions the existence of EE relationship. The Labor
Arbiter (LA) ruled that EE relationship exist. On his last day to perfect an appeal, the
private respondent filed a manifestation before the LA praying that his liabilities be set-
off against petitioners’ alleged
indebtedness. The LA denied it and issued a writ of execution. Before the writ could be
implemented, private respondent was able to obtain a restraining order from the NLRC
pursuant to the Injunction and Damages that he filed. Then the NLRC allowed the off-
setting. Hence this petition.
ISSUE:
May a division of the NLRC defeat a final judgment of the LA by entertaining a petition
for injunction and damages and by receiving evidence to recover alleged indebtedness
that will offset a monetary award to the employee?
RULING:
No. The NLRC should not have entertained the private respondents petition for
Injunction and Damages considering that the same was just a scheme to defeat or
obstruct the enforcement the writ of execution Article 218(e) of the Labor Code does
not provide blanket authority to the NLRC or any of its divisions to issue writs of
injunction, while Rule XI of the New Rules of Procedure of the NLRC makes injunction
only an Ancillary remedy in ordinary labor disputes such as the one brought by the
petitioner in NLRC Case Secondly, the appeal of the private respondent was not from
the decision therein, but from the order of the Labor Arbiter denying the off-setting.,
therefore, the private respondent admitted the final and executory character of the
judgment. As correctly contended by the OSG, there is a complete want of evidence
that the indebtedness asserted by the private respondent against Andres Pondoc
arose out of or was incurred in connection with the EE relationship between them. The
LA did not then have jurisdiction over the claim because their exclusive and original
jurisdictions are those specified under paragraph (a) of Article 217 of the Labor Code.
The conclusion then is inevitable that the NLRC was without jurisdiction, either original
or appellate, to receive evidence on the alleged indebtedness, render judgment
thereon, and direct that its award be set-off against the final judgment of the Labor
Arbiter

Villamaria v CA (Labor Standards)

Villamaria v CA & Bustamante GR No. 165881 April 19, 2006

FACTS:
- Oscar Villamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship
engaged in assembling passenger jeepneys with a public utility franchise to operate
along the Baclaran-Sucat route. By 1995, Villamaria stopped assembling jeepneys and
retained only nine, four of which operated by employing drivers on a “boundary basis.”
One of those drivers was respondent Bustamante.
- Bustamante remitted 450 a day to Villamaria as boundary and kept the residue of his
daily earnings as compensation for driving the vehicle. In August 1997, Villamaria
verbally agreed to sell the jeepney to Bustamante under a “boundary-hulog scheme”,
where Bustamante would remit to Villamaria P550 a day for a period of 4 years;
Bustamane would then become the owner of the vehicle and continue to drive the
same under Villamaria’s franchise, but with Php 10,000 downpayment.
- August 7, 1997, Villamaria executed a contract entitled “Kasunduan ng Bilihan ng
Sasakyan sa Pamamagitan ng Boundary Hulog”. The parties agreed that if
Bustamante failed to pay the boundary- hulog for 3 days, Villamaria Motors would hold
on to the vehicle until Bustamante paid his arrears, including a penalty of 50 a day; in
case Bustamante failed to remit the daily boundary-hulog for a period of one week, the
Kasunduan would cease to have the legal effect and Bustamante would have to return
the vehicle to Villamaria motors.
- In 1999, Bustamante and other drivers who also had the same arrangement failed to
pay their respective boundary-hulog. The prompted Villamaria to serve a “Paalala”. On
July 24, 2000. Villamaria took back the jeepney driven by Bustamante and barred the
latter from driving the vehicle.
- Bustamante filed a complaint for Illegal Dismissal.

DECISION OF LOWER COURTS:

*Labor Arbiter: petition dismissed.
*NLRC: dismissed appeal.
*CA: reversed NLRC, awarded Bustamante separation pay and backwages.
Hence, this petition for review on certiorari.

ISSUES:
(1) WON the existence of a boundary-hulog agreement negates the employer-
employee relationship between the vendor and vendee
(2) WON the Labor Arbiter has jurisdiction over a complaint for illegal dismissal in such
a case.
HELD:
(1) NO. Under the boundary-hulog scheme, a dual juridical relationship is created; that
of employer- employee and vendor-vendee. The Kasanduan did not extinguish the
employer employee relationship of the parties existing before the execution of said
deed.
a. Under this system the owner/operator exercises control and supervision over the
driver. It is unlike in lease of chattels where the lessor loses complete control over the
chattel leased but the lessee is still ultimately responsible for the consequences of its
use. The management of the business is still in the hands of the owner/operator, who,
being the holder of the certificate of public convenience, must see to it that the driver
follows the route prescribed by the franchising and regulatory authority, and the rules
promulgated with regard to the business operations.
b. The driver performs activities which are usually necessary or desirable in the usual
business or trade of the owner/operator. Under the Kasunduan, respondent was
required to remit Php 550 daily to petitioner, an amount which represented the
boundary of petitioner as well as respondent’s partial payment (hulog) of the purchase
price of the jeepney. Thus, the daily remittances also had a dual purpose: that of
petitioner’s boundary
and respondent’s partial payment (hulog) for the vehicle.
c. The obligation is not novated by an instrument that expressly recognizes the old
one,
changes only the terms of payment and adds other obligations not incompatible with
the old
provisions or where the contract merely supplements the previous one.
d. The existence of an employment relation is not dependent on how the worker is paid
but on the presence or absence of control over the means and method of the work.
The amount earned in excess of the “boundary hulog” is equivalent to wages and the
fact that the power of dismissal was not mentioned in the Kasunduan did not mean that
private respondent never exercised such power, or could not exercise such power.

(2) YES. The Labor Arbiter and the NLRC has jurisdiction under Article 217 of the
Labor Code is limited to disputes arising from an employer-employee relationship
which can only be resolved by reference to the Labor Code, other labor statues of their
collective bargaining agreement.

OTHER NOTES:
(1) The rule is that the nature of an action and subject matter thereof, as well as, which
court or agency of the government has jurisdiction and the character of the reliefs
prayed for, whether or not the complainant/plaintiff is entitled to any or all of such
reliefs.
(2) Not every dispute between an employer and employee involves matters that only
the Labor Arbiter and the NLRC can resolve in the exercise of their adjudicatory or
quasi-judicial powers. Actions between employers and employees where the employer-
employee relationship is merely incidental is within the exclusive original jurisdiction of
the regular courts

VICENTE SAN JOSE,

petitioner, vs
. NATIONAL LABOR RELATIONS COMMISSION and OCEAN TERMINAL
SERVICES, INC.,
respondents
. [G.R. No. 121227. August 17, 1998] DELA CRUZ FACTS
:

Vicente San Jose, in his position paper, states that he was hired sometime in July 1980 as a
stevedore continuously until he was advised in April 1991 to retire from service considering that he
already reached 65 years old.

That accordingly, he did apply for retirement and was paid P3,156.39 for retirement pay.

Contentions of Ocean Terminal Services:

o

San Jose only worked on rotation basis and not seven days a week due to numerous stevedores
who cannot all be given assignments at the same time;
o

That he performed stevedoring job only on call, so while he was connected with the company for
the past 11 years, he did not actually render 11 years of service;
o

That the burden of proving that San Jose

’
s latest salary was P200.00 rests upon him;
o

That he already voluntarily signed a waiver of quitclaim.

The Labor Arbiter decided the case solely on the merits of the complaint.

LA arrived at the computation that the retirement differential is P25,443.70.

NLRC reversed LA on the ground that the differential being claimed by San Jose is
based on their CBA and as provided under the Labor Code, interpretation or implementation of
CBA should be referred by the LA to the grievance machinery or voluntary arbitrator.
ISSUE
: Who has jurisdiction over the dispute? VA
HELD
:
VA has exclusive jurisdiction over unresolved grievances
As provided under the Labor Code, the NLRC correctly ruled that the Labor Arbiter had no
jurisdiction to hear and decide petitioners
money-claim
u
nderpayment of retirement benefits
, as the controversy between the parties involved an issue arising from the interpretation or
implementation of a provision of the collective bargaining agreement. The Voluntary Arbitrator or
Panel of Voluntary Arbitrators has original and exclusive jurisdiction over the controversy under
Article 261 of the Labor Code, and not the Labor Arbiter.
The court, however, will no longer order the remand of the case
The Court will not remand the case to the Voluntary Arbitrator or Panel of Voluntary Arbitrators for
hearing. This case has dragged on far too long - eight
(8)
years. Any further delay would be a denial of speedy justice to an aged retired stevedore. There is
further the possibility that any Decision by the Voluntary Arbitrator or Panel of Voluntary Arbitrators
will be appealed to the CA, and finally to this Court. Formula adopted by LA will be followed. To
recapitulate; the Court hereby rules -
1.

That the NLRC correctly ruled that the LA had no jurisdiction over the case, because the case
involved an issue arising from the interpretation or implementation of a Collective Bargaining
Agreement;
2.

That we adopt the computation formula for the retirement benefits by the LA, and the basis thereof.
The respondent must therefore pay the petitioner the additional amount of Twenty-Five
Thousand Four Hundred Forty-Three and Seventy Centavos P25,443.70) Peso

DEL MONTE PHILIPPINES, INC. and WARFREDO C. BALANDRA, vs. Petitioners,

MARIANO SALDIVAR, NENA TIMBAL, VIRGINIO VICERA, ALFREDO AMONCIO
and NAZARIO S. COLASTE, Respondents.

FACTS

The Associated Labor Union (ALU) is the exclusive bargaining agent of plantation
workers of petitioner Del Monte Philippines, Inc. (Del Monte) in Bukidnon where
respondent is an employee and a member of the said union. Timbal was charged by
ALU for disloyalty to the union, particularly for encouraging defections to a rival union.

Timbal filed an Answer before the Disloyalty Board, denying the allegations in the
complaint and the averments in Artajo’s Affidavit. Nevertheless, the ALU Disloyalty
Board concluded that Timbal was guilty of acts or conduct inimical to the interests of
ALU. It found that the acts imputed to Timbal were partisan activities, prohibited since
the “freedom period” had not yet commenced as of that time. Thus, the Disloyalty
Board recommended the expulsion of Timbal from membership in ALU, and likewise
her dismissal from Del Monte in accordance with the Union Security Clause in the
existing CBA between ALU and Del Monte. The Disloyalty Board also reached the
same conclusions as to the co-employees, expressed in separate resolutions also
recommending their expulsion from ALU. Del Monte, then, terminated Timbal noting
that the termination was upon demand of ALU pursuant to Sections 4 and 5 of Article
III of the current Collective Bargaining Agreement.

Timbal filed a complaint against Del Monte and ALU with the NLRC-RAB for illegal
dismissal, unfair labor practice and damages.

ISSUE
Whether or not there is a sufficient cause for the dismissal of a rank-and-file employee
through the enforcement of a Collective Bargaining Agreement between the employer
and the union.

HELD

The SC held that even if the dismissal of an employee is conditioned not on the
grounds for termination under the Labor Code, but pursuant to the provisions of a CBA,
it still is necessary to observe substantive due process in order to validate the
dismissal. As applied to the Labor Code, adherence to substantive due process is a
requisite for a valid determination that just or authorized causes existed to justify the
dismissal. As applied to the dismissals grounded on violations of the CBA, observance
of substantial due process is indispensable in establishing the presence of the cause
or causes for dismissal as provided for in the CBA.

Substantive due process, as it applies to all forms of dismissals, encompasses the

proper presentation and appreciation of evidence to establish that cause under law
exists for the dismissal of an employee. This holds true even if the dismissal is
predicated on particular causes for dismissal established not by the Labor Code, but by
the CBA. Further, in order that any CBA-mandated dismissal may receive the warrant
of the courts and labor tribunals, the causes for dismissal as provided for in the CBA
must satisfy to the evidentiary threshold of the NLRC and the courts.

It is necessary to emphasize these principles since the immutable truth under our
constitutional and labor laws is that no employee can be dismissed without cause. The
Agabon case may have tempered the procedural due process requirements if just
cause for dismissal existed, but in no way did it eliminate the existence of a legally
prescribed cause as a requisite for any dismissal. The fact that a CBA may provide for
additional grounds for dismissal other than those established under the Labor Code
does not detract from the necessity to duly establish the existence of such grounds
before the dismissal may be validated. And even if the employer or, in this case, the
collective bargaining agent, is satisfied that cause has been established to warrant the
dismissal, such satisfaction will be of no consequence if, upon legal challenge, they are
unable to establish before the NLRC or the courts the presence of such causes.

The Court sees the danger to jurisprudence and the rights of workers in acceding to
Del Monte’s position. The dismissal for cause of employees must be justified by
substantial evidence, as appreciated by an impartial trier of facts.

The Disloyalty Board may have appreciated Piquero’s testimony in its own finding that
Timbal was guilty, yet the said board cannot be considered as a wholly neutral or
dispassionate tribunal since it was constituted by the very organization that stood as
the offended party in the disloyalty charge. Without impugning the integrity of ALU and
the mechanisms it has employed for the internal discipline of its members, we
nonetheless hold that in order that the dismissal of an employee may be validated by
this Court, it is necessary that the grounds for dismissal are justified by substantial
evidence as duly appreciated by an impartial trier of facts. The existence of Piquero’s
testimony was appreciated only by the Disloyalty Board, but not by any of the impartial
tribunals which heard Timbal’s case. The appreciation of such testimony by the
Disloyalty Board without any similar affirmation or concurrence by the NLRC-RAB, the
NLRC, or the Court of Appeals, cannot satisfy the substantive due process
requirement as a means of upholding Timbal’s dismissal.

All told, The SC sees no error on the part of the Court of Appeals when it held that
Timbal was illegally dismissed.

Petition is denied

MENDOZA vs OFFICERS OF MWEU

G.R. No. 201595 | January 25, 2016 | Del Castillo, J.
Facts:
Petitioner Allan Mendoza was a member of the Manila Water Employees Union
(MWEU), a DOLE-registered labor organization consisting of rank-and-file employees
within Manila Water Company (MWC) while the respondents were MWEU officers. In
2007, petitioners were approved to be suspended for 30 days by the MWEU Executive
Board's through a "unanimous approval" due to the non-payment of union dues. Due
notice was made to the petitioners to attend a scheduled hearing. Petitioners have
repeatedly indicated their intention to appeal the same to the General Membership
Assembly
; however, petitioner’s appeal had been
repeatedly denied.

Meanwhile, MWEU scheduled an election of officers. Petitioner filed his certificate of

candidacy for Vice-President, but he was disqualified for not being a member in good
standing on account of his suspension. In addition, petitioner was charged with non-
payment of union dues for the third time. He did not attend the scheduled hearing;
hence, he was later on expelled from the union. In 2008, during the freedom period
and negotiations for a new CBA with MWC, petitioner joined another union, the
Workers Association for Transparency, Empowerment and Reform, All-Filipino
Workers Confederation (WATER-AFWC). He was elected union President. Other
MWEU members were inclined to join WATER-AFWC, but MWEU director Torres
threatened that they would not get benefits from the new CBA. The MWEU leadership
submitted a proposed CBA which contained provisions to the effect that in the event of
retrenchment, non-MWEU members shall be removed first, and that upon the signing
of the CBA, only MWEU members shall receive a signing bonus. On 13 October 2008,
petitioner filed a Complaint
against respondents for unfair labor practices, damages, and attorney's fees and
accused the respondents of illegal termination from MWEU in connection with the
events relative to his non-payment of union dues; unlawful interference, coercion, and
violation of the rights of MWC employees to self-organization
–
in connection with the proposed CBA submitted by MWEU leadership, which petitioner
claims contained provisions that discriminated against non-MWEU members. Petitioner
claims that he was suspended and expelled from MWEU illegally as a result of the
denial of his right to appeal his case to the general membership assembly in
accordance with the union’s constitution and by
-laws. On the other hand, respondents counter that such charge is intra-union in
nature, and that petitioner lost his right to appeal when he failed to petition to convene
the general assembly through the required signature of 30% of the union membership
in good standing.
Issue:
WON the Respondents are guilty of unfair labor practice under Article 249 (a) and (b)
of the Labor Code
Held:
Yes. Respondents are guilty of unfair labor practices under Article 249 (a) and (b)
–
that is,
violation of petitioner’s right to self
-organization, unlawful discrimination, and illegal termination of his union membership.
Guaranteed to all employees or workers is the ‘right to self
-organization and to form, join,
or assist labor organizations of their own choosing for purposes of collective
bargaining.’
The right of self-organization includes the right to organize or affiliate with a labor union
or determine which of two or more unions in an establishment to join, and to engage in
concerted activities with co-workers for purposes of collective bargaining through
representatives of their own choosing, or for their mutual aid and protection, i.e., the
protection, promotion, or enhancement of their rights and interests. As members of the
governing board of MWEU, respondents are presumed to know,
observe, and apply the union’s constitution and by
-laws. Thus, their repeated violations
thereof and their disregard of petitioner’s rights as a union member –
their inaction on his two appeals which resulted in his suspension, disqualification from
running as MWEU officer, and subsequent expulsion without being accorded the full
benefits of due process
–
connote willfulness and bad faith, a gross disregard of his rights thus causing untold
suffering, oppression and, ultimately, ostracism from MWEU. "Bad faith implies breach
of faith and willful failure to respond to plain and well understood obligation."
WESLEYAN UNIVERSITY-PHILIPPINES vs. GUILLERMO T. MAGLAYA, SR.
G.R. No. 212774
January 23, 2017

“For this Court's resolution is a petition for review on certiorari filed by petitioner
Wesleyan University-Philippines (WUP) assailing the Resolution1 dated January 20,
2014 of the Court of Appeals (CA) which denied its petition for certiorari.”

FACTS:

WUP is a non-stock, non-profit, non-sectarian educational corporation duly organized

and existing under the Philippine laws. Respondent Atty. Guillermo T. Maglaya, Sr.
was appointed as a corporate member and was elected as a member of the Board of
Trustees, both for a period of five (5) years. He was elected as President of the
University for a five-year term. He was re-elected as a trustee.

In a Memorandum, the incumbent Bishops of the United Methodist Church apprised all
the corporate members of the expiration of their tenns on December 31, 2008, unless
renewed by the former. The said members, including Maglaya, sought the renewal of
their membership in the WUP's Board, and signified their willingness to serve the
corporation.

Dr. Dominador Cabasal, Chairman of the Board, informed the Bishops of the cessation
of corporate terms of some of the members and/or trustees since the by-laws provided
that the vacancy shall only be filled by the Bishops upon the recommendation of the
Board. Maglaya learned that the Bishops created an Ad Hoc Committee to plan the
efficient and orderly turnover of the administration of the WUP in view of the alleged
"gentleman's agreement", and that the Bishops have appointed the incoming corporate
members and trustees. He clarified that there was no agreement and any discussion of
the turnover because the corporate members still have valid and existing corporate
terms.

In this case, the Bishops, through a formal notice to all the officers, deans, staff, and
employees of WUP, introduced the new corporate members, trustees, and officers. In
the said notice, it was indicated that the new Board met, organized, and elected the
new set of officers. Manuel Palomo, the new Chairman of the Board, informed Maglaya
of the termination of his services and authority as the President of the University.

Thereafter, Maglaya and other fonner members of the Board filed a Complaint for
Injunction and Damages before the Regional Trial Court of Cabanatuan City.The RTC
dismissed the case declaring the same as a nuisance or harassment suit prohibited
under Section l(b), Rule 1 of the Interim Rules for Intra-Corporate Controversies. The
RTC observed that it is clear from the by-laws of WUP that insofar as membership in
the corporation is concerned, which can only be given by the College of Bishops of the
United Methodist Church, it is a precondition to a seat in the WUP Board.
Consequently, the expiration of the terms of the plaintiffs, including Maglaya, as
corporate members carried with it their termination as members of the Board.
Moreover, their continued stay in their office beyond their terms was only in hold-over
capacities, which ceased when the Bishops appointed new members of the corporation
and the Board.

The CA affirmed the decision of the RTC, and dismissed the petition for certiorari filed
by the plaintiffs for being the improper remedy.

Thereafter, Maglaya filed the present illegal dismissal case against WUP, Palomo,
Bishop Lito C. Tangonan and Bishop Leo A. Soriano. He claimed that he was
unceremoniously dismissed in a wanton, reckless, oppressive and malevolent manner.

The Labor Arbiter ruled in favor of WUP. The LA held that the action between
employers and employees where the employer-employee relationship is merely
incidental is within the exclusive and original jurisdiction of the regular courts.

The National Labor Relations Commission reversed and set aside the Decision of the
LA ruling that the illegal dismissal case falls within the jurisdiction of the labor tribunals.
Since the reasons for his termination cited by WUP were not among the just causes
provided under Article 282 (now Article 297) of the Labor Code, Maglaya was illegally
dismissed.
Thereafter, the NLRC denied the motion for reconsideration filed by WUP and the CA
dismissed the petition for certiorari filed by WUP. The CA noted that the decision and
resolution of the NLRC became final and executor.

ISSUE:

The Court of Appeals committed an error of law when it summarily dismissed the
special civil action for certiorari raising lack of jurisdiction of the NLRC filed by [WUP]
where it was very clear that the NLRC had no jurisdiction over the case involving a
corporate officer and where the nature of the controversy is an intra-corporate dispute.

RULING:

The Court find the instant petition impressed with merit.

WUP alleges that while the NLRC decision became final and executory, it did not mean
that the said decision had become immutable and unalterable as the CA ruled. WUP
maintains that the remedy of the aggrieved party against a final and executory decision
of the NLRC is the filing of the petition for certiorari under Rule 65 of the Rules of
Court. As such, it was able to meet the conditions set forth in filing the said remedy
before the CA.
"Corporate officers" in the context of Presidential Decree No. 902- A are those officers
of the corporation who are given that character by the Corporation Code or by the
corporation's by-laws. There are three specific officers whom a corporation must have
under Section 25 of the Corporation Code. These are the president, secretary and the
treasurer. The number of officers is not limited to these three. A corporation may have
such other officers as may be provided for by its by-laws like, but not limited to, the
vice-president, cashier, auditor or general manager. The number of corporate officers
is thus limited by law and by the corporation's by-laws.

Since this Court is now reversing the challenged decision of the CA and affirming the
decision of the LA in dismissing the case for want of jurisdiction, Maglaya is not entitled
to collect the amount of ₱2,505,208.75 awarded from the time the NLRC decision
became final and executory up to the time the CA dismissed WUP's petition for
certiorari.

In sum, this Court finds that the NLRC erred in assuming jurisdiction over, and
thereafter in failing to dismiss, Maglaya's complaint for illegal dismissal against WUP,
since the subject matter of the instant case is an intra-corporate controversy which the
NLRC has no jurisdiction.

Paredes v. Feed the Children Philippines, Inc.

Facts:
Respondent Feed the Children Philippines, Inc. (FTCP) is a non-stock, non-profit, and
non-government organization duly incorporated under the Philippine laws in 1989.
Respondents Dr. Virginia Lao, Hercules Paradiang and Benjamin Escobia were
members of the FTCP Board of Trustees (Board) and Executive Committee (Execom)
of FTCP.

Petitioner Rosalinda Paredes was FTCP's National Director. Her functions and duties
include project management, fund accessing, income generation, financial
management, and administration of the organization. She also signed all the FTCP
checks and approved all requisitions and disbursements of FTCP funds. As per
FTCP's By-laws, it was also her duty to execute all resolutions and/or decisions of the
Board.

Petitioner was first hired by FTCP in 1999 as Country Director. Her contract was
renewed several times until her last contract for the period from October 1, 2004 to
September 30, 2007. Her initial salary was US$1000.00 and then later, she was paid
70,000.00 aside from other benefits and allowances.

On August 12, 2005, forty-two (42) FTCP employees signed a petition letter addressed
to the Board expressing their complaints against alleged detestable practices of
petitioner, to wit: seeking exemption from policies which she herself had approved;
withholding organization funds despite approval of its release; procuring health
insurance for herself without paying her share of the premium; and receiving additional
fees contrary to the terms of her contract.

The next day, August 13, 2005, the staff of FTCP called Lao to a meeting to submit
their petition. The group was edgy and demanded for outright solution. However, the
three Board members told them that they should follow a process.

Petitioner learned from Atty. Chatto that Program Manager Primitivo Fostanes and his
co-employees prepared a petition questioning her leadership and management of
FTCP. She filed an administrative complaint against Fostanes on August 24, 2005, but
the same was not acted upon.

When the Board convened for a meeting on August 28, 2005, petitioner was not
allowed to participate. She was only allowed to join the meeting after three hours. As
ex officio member of the Board and as head of the secretariat, she was always present
in every meeting to discuss her reports, programs and proposals.

The Board resolved to suspend petitioner because of her indifferent attitude and
unjustified refusal to submit to an audit. Before it could be implemented, respondent
FTCP received her resignation letter.

Petitioner filed a Complaint for illegal dismissal, claiming that she was forced to resign,
thus, was constructively dismissed. LA ruled in favor of the respondents.
Petitioner appealed the decision to the NLRC. The NLRC reversed and set aside the
decision of the LA and ruled in her favor.

Issues:
I. W/N the CA contravenes the law and jurisprudence when it granted the petition for
certiorari that raised questions factual in nature and when it sweepingly applied the
ruling in St. Martin Funeral Homes to justify its act of delving into the findings of the
NLRC which were outside the scope of extraordinary remedy of certiorari.

II. W/N the CA grossly contradicts the law and jurisprudence on constructive dismissal
and ignored, misunderstood or misinterpreted cogent facts and circumstances which, if
considered, would change the outcome of the case when it ruled that petitioner
voluntarily resigned and was not constructively dismissed.
III. W/N the CA effectively reverses the law and jurisprudence on damages and
recognized money claims in labor cases when it condemned petitioner to pay
respondents' claims for damages that were not duly proven by the latter and that
clearly did not arise from an employer-employee relationship.
IV. W/N the CA violates the Constitution, the law and the prevailing jurisprudence when
it resolved the lingering doubts that remain in the present case, as those arising from
evidence and from interpretation of agreements and writings, against labor.

Held:
Partly meritorious.

Judicial review of labor cases does not go beyond the evaluation of the sufficiency of
the evidence upon which its labor officials' findings rest. As such, the findings of facts
and conclusion of the NLRC are generally accorded not only great weight and respect
but even clothed with finality and deemed binding on this Court as long as they are
supported by substantial evidence.

After judicious review on the records of the case, this Court deems it proper to
disregard the findings of fact of the NLRC. This Court finds that the NLRC committed
grave abuse of discretion when it ruled for the petitioner without substantial evidence to
support its findings of facts and conclusion.

Since petitioner admittedly resigned, it is incumbent upon her to prove that her
resignation was involuntary and that it was actually a case of constructive dismissal
with clear, positive and convincing evidence.

Case law holds that constructive dismissal occurs when there is cessation of work
because continued employment is rendered impossible, unreasonable or unlikely;
when there is a demotion in rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee. The test is whether a reasonable person in the employee's position would
have felt compelled to give up his position under the circumstances.
In this case, petitioner cannot be deemed constructively dismissed. She failed to
present clear and positive evidence that respondent FTCP, through its Board of
Trustees, committed acts of discrimination, insensibility, or disdain towards her which
rendered her continued employment unbearable or forced her to terminate her
employment from the respondent. As settled, bare allegations of constructive
dismissal, when uncorroborated by the evidence on record, cannot be given credence.

There was no urgency for petitioner to submit her resignation letter. In fact, the day
before it was given, she and other management staff requested for a dialogue with the
Board to address the issue regarding the management and financial audit. It is,
therefore, improbable that her continued employment is rendered impossible or
unreasonable.

We are not persuaded that her exclusion to the meeting constituted discrimination or
harassment. A careful perusal of the minutes would reveal that the Board convened to
deliberate on the solution to the apparent conflict between petitioner and the staff since
they have insufficient grievance mechanism for issues involving top management. She
could not fault the Board to not include her in that particular meeting since she was a
party involved and to avoid possible influence that she could have exerted.

We held that the act of the employer moving the effectivity of the resignation is not an
act of harassment. The 30-day notice requirement for an employee’s resignation is
actually for the benefit of the employer who has the discretion to waive such period. Its
purpose is to afford the employer enough time to hire another employee if needed and
to see to it that there is proper turn-over of the tasks which the resigning employee
may be handling.

Such rule requiring an employee to stay or complete the 30-day period prior to the
effectivity of his resignation becomes discretionary on the part of management as an
employee who intends to resign may be allowed a shorter period before his resignation
becomes effective.
Applying the rule of noscitur a sociis in clarifying the scope of Article 217, it is evident
that paragraphs 1 to 5 refer to cases or disputes arising out of or in connection with an
employer-employee relationship. In other words, the money claims within the original
and exclusive jurisdiction of labor arbiters are those which have some reasonable
causal connection with the employer-employee relationship.

This claim is distinguished from cases of actions for damages where the employer-
employee relationship is merely incidental and the cause of action proceeds from a
different source of obligation. Thus, the regular courts have jurisdiction where the
damages claimed for were based on: tort, malicious prosecution, or breach of contract,
as when the claimant seeks to recover a debt from a former employee or seeks
liquidated damages in the enforcement of a prior employment contract.

It is settled that the law serves to equalize the unequal. The labor force is a special
class that is constitutionally protected because of the inequality between capital and
labor. This constitutional protection presupposes that the labor force is weak. However,
the level of protection to labor should vary from case to case; otherwise, the state
might appear to be too paternalistic in affording protection to labor.

WHEREFORE, the petition for review on certiorari, dated October 23, 2008, of
petitioner Rosalinda G. Paredes is hereby PARTLY GRANTED. Accordingly, the ruling
of the Court of Appeals in its Decision dated March 25, 2008, that petitioner was not
constructively dismissed, is hereby AFFIRMED. However, the awards of P34,438.37
and Pl09,208.36 for the unpaid debt of petitioner and reimbursement of the FTCP
Provident Fund, respectively, are hereby SET ASIDE.

Paredes v. Feed the Children Philippines, Inc.

Facts:
Respondent Feed the Children Philippines, Inc. (FTCP) is a non-stock, non-profit, and
non-government organization duly incorporated under the Philippine laws in 1989.
Respondents Dr. Virginia Lao, Hercules Paradiang and Benjamin Escobia were
members of the FTCP Board of Trustees (Board) and Executive Committee (Execom)
of FTCP.

Petitioner Rosalinda Paredes was FTCP's National Director. Her functions and duties
include project management, fund accessing, income generation, financial
management, and administration of the organization. She also signed all the FTCP
checks and approved all requisitions and disbursements of FTCP funds. As per
FTCP's By-laws, it was also her duty to execute all resolutions and/or decisions of the
Board.

Petitioner was first hired by FTCP in 1999 as Country Director. Her contract was
renewed several times until her last contract for the period from October 1, 2004 to
September 30, 2007. Her initial salary was US$1000.00 and then later, she was paid
70,000.00 aside from other benefits and allowances.

On August 12, 2005, forty-two (42) FTCP employees signed a petition letter addressed
to the Board expressing their complaints against alleged detestable practices of
petitioner, to wit: seeking exemption from policies which she herself had approved;
withholding organization funds despite approval of its release; procuring health
insurance for herself without paying her share of the premium; and receiving additional
fees contrary to the terms of her contract.

The next day, August 13, 2005, the staff of FTCP called Lao to a meeting to submit
their petition. The group was edgy and demanded for outright solution. However, the
three Board members told them that they should follow a process.

Petitioner learned from Atty. Chatto that Program Manager Primitivo Fostanes and his
co-employees prepared a petition questioning her leadership and management of
FTCP. She filed an administrative complaint against Fostanes on August 24, 2005, but
the same was not acted upon.

When the Board convened for a meeting on August 28, 2005, petitioner was not
allowed to participate. She was only allowed to join the meeting after three hours. As
ex officio member of the Board and as head of the secretariat, she was always present
in every meeting to discuss her reports, programs and proposals.

The Board resolved to suspend petitioner because of her indifferent attitude and
unjustified refusal to submit to an audit. Before it could be implemented, respondent
FTCP received her resignation letter.
Petitioner filed a Complaint for illegal dismissal, claiming that she was forced to resign,
thus, was constructively dismissed. LA ruled in favor of the respondents.

Petitioner appealed the decision to the NLRC. The NLRC reversed and set aside the
decision of the LA and ruled in her favor.

Issues:
I. W/N the CA contravenes the law and jurisprudence when it granted the petition for
certiorari that raised questions factual in nature and when it sweepingly applied the
ruling in St. Martin Funeral Homes to justify its act of delving into the findings of the
NLRC which were outside the scope of extraordinary remedy of certiorari.

II. W/N the CA grossly contradicts the law and jurisprudence on constructive dismissal
and ignored, misunderstood or misinterpreted cogent facts and circumstances which, if
considered, would change the outcome of the case when it ruled that petitioner
voluntarily resigned and was not constructively dismissed.
III. W/N the CA effectively reverses the law and jurisprudence on damages and
recognized money claims in labor cases when it condemned petitioner to pay
respondents' claims for damages that were not duly proven by the latter and that
clearly did not arise from an employer-employee relationship.
IV. W/N the CA violates the Constitution, the law and the prevailing jurisprudence when
it resolved the lingering doubts that remain in the present case, as those arising from
evidence and from interpretation of agreements and writings, against labor.

Held:
Partly meritorious.

Judicial review of labor cases does not go beyond the evaluation of the sufficiency of
the evidence upon which its labor officials' findings rest. As such, the findings of facts
and conclusion of the NLRC are generally accorded not only great weight and respect
but even clothed with finality and deemed binding on this Court as long as they are
supported by substantial evidence.

After judicious review on the records of the case, this Court deems it proper to
disregard the findings of fact of the NLRC. This Court finds that the NLRC committed
grave abuse of discretion when it ruled for the petitioner without substantial evidence to
support its findings of facts and conclusion.

Since petitioner admittedly resigned, it is incumbent upon her to prove that her
resignation was involuntary and that it was actually a case of constructive dismissal
with clear, positive and convincing evidence.

Case law holds that constructive dismissal occurs when there is cessation of work
because continued employment is rendered impossible, unreasonable or unlikely;
when there is a demotion in rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer becomes unbearable to the
employee. The test is whether a reasonable person in the employee's position would
have felt compelled to give up his position under the circumstances.
In this case, petitioner cannot be deemed constructively dismissed. She failed to
present clear and positive evidence that respondent FTCP, through its Board of
Trustees, committed acts of discrimination, insensibility, or disdain towards her which
rendered her continued employment unbearable or forced her to terminate her
employment from the respondent. As settled, bare allegations of constructive
dismissal, when uncorroborated by the evidence on record, cannot be given credence.

There was no urgency for petitioner to submit her resignation letter. In fact, the day
before it was given, she and other management staff requested for a dialogue with the
Board to address the issue regarding the management and financial audit. It is,
therefore, improbable that her continued employment is rendered impossible or
unreasonable.

We are not persuaded that her exclusion to the meeting constituted discrimination or
harassment. A careful perusal of the minutes would reveal that the Board convened to
deliberate on the solution to the apparent conflict between petitioner and the staff since
they have insufficient grievance mechanism for issues involving top management. She
could not fault the Board to not include her in that particular meeting since she was a
party involved and to avoid possible influence that she could have exerted.

We held that the act of the employer moving the effectivity of the resignation is not an
act of harassment. The 30-day notice requirement for an employee’s resignation is
actually for the benefit of the employer who has the discretion to waive such period. Its
purpose is to afford the employer enough time to hire another employee if needed and
to see to it that there is proper turn-over of the tasks which the resigning employee
may be handling.

Such rule requiring an employee to stay or complete the 30-day period prior to the
effectivity of his resignation becomes discretionary on the part of management as an
employee who intends to resign may be allowed a shorter period before his resignation
becomes effective.
Applying the rule of noscitur a sociis in clarifying the scope of Article 217, it is evident
that paragraphs 1 to 5 refer to cases or disputes arising out of or in connection with an
employer-employee relationship. In other words, the money claims within the original
and exclusive jurisdiction of labor arbiters are those which have some reasonable
causal connection with the employer-employee relationship.

This claim is distinguished from cases of actions for damages where the employer-
employee relationship is merely incidental and the cause of action proceeds from a
different source of obligation. Thus, the regular courts have jurisdiction where the
damages claimed for were based on: tort, malicious prosecution, or breach of contract,
as when the claimant seeks to recover a debt from a former employee or seeks
liquidated damages in the enforcement of a prior employment contract.

It is settled that the law serves to equalize the unequal. The labor force is a special
class that is constitutionally protected because of the inequality between capital and
labor. This constitutional protection presupposes that the labor force is weak. However,
the level of protection to labor should vary from case to case; otherwise, the state
might appear to be too paternalistic in affording protection to labor.

WHEREFORE, the petition for review on certiorari, dated October 23, 2008, of
petitioner Rosalinda G. Paredes is hereby PARTLY GRANTED. Accordingly, the ruling
of the Court of Appeals in its Decision dated March 25, 2008, that petitioner was not
constructively dismissed, is hereby AFFIRMED. However, the awards of P34,438.37
and Pl09,208.36 for the unpaid debt of petitioner and reimbursement of the FTCP
Provident Fund, respectively, are hereby SET ASIDE.

AMECOS INNOVATIONS, INC.& ANTONIO MATEO

v.
ELIZA LOPEZ G.R. No. 178055, 2 July 2014, SECOND DIVISION, (Del Castillo,
J
.)
Under Article 217(a)(4) of the Labor Code, claims for actual, moral, exemplary and
other forms of damages arising from employer-employee relationship are under the
jurisdiction of the Labor Arbiters or the National Labor Relations Commission.
Amecos Innovations, Inc. (Amecos) was complained by the Social Security System
(SSS) for alleged delinquency in the remittance of SSS contributions. Amecos attributed its
failure to remit the SSS contributions to Eliza R. Lopez (Lopez) claiming that it hired Lopez
but she refused to provide Amecos with her SSS Number. Hence, Amecos no longer enrolled
Lopez with the SSS and did not deduct her corresponding contributions up to the time of her
termination. The complaint was withdrawn upon settlement of the obligation by Amecos. Lopez did
not heed the demands of Amecos, thus, the latter filed a complaint for sum of money and
damages against Lopez before the Regional Trial Court (RTC). Amecos claimed that because of
Lopez
’s misrepresentation, they
suffered actual damages by way of settlement and payment of its obligations with
the SSS. Amecos’ c
ontention is that the employer-employee relationship between Amecos and Lopez is merely
incidental, and does not necessarily place their dispute within the exclusive jurisdiction
of the labor tribunals
but the true source of Lopez’s
obligation is derived from Articles 19, 22, and 2154 of the Civil Code.
ISSUE:
Do the regular civil court have the jurisdiction over claim(s) for reimbursement arising from
employer-employee relation?
RULING: No.
SSS contributions and recovery of damages arising from employee-employer relationship is under
the jurisdiction of the Labor Arbiters. This Court holds that as between the parties, Article 217(a)(4)
of the Labor Code is applicable. Said provision bestows upon the Labor Arbiter original and
exclusive jurisdiction over claims for damages arising from employer-employee relations. The
observation that the matter of SSS contributions necessarily flowed from the employer-employee
relationship between the parties
–
shared by the lower courts and the Court of Appeals (CA)
–
is correct; thus, Amecos
’
claims should have been referred to the
labor tribunals. In this connection, it is noteworthy to state that “the Labor Arbiter
has jurisdiction to award not only the reliefs provided by labor laws, but also
damages governed by the Civil Code.”
At the same time, it cannot be assumed that since the dispute concerns the payment of
SSS premiums, Amecos
’ claim should be referred to the Social Security
Commission (SSC) pursuant to Republic Act No. 1161, as amended by Republic Ac

G.R. No. 112940 November 21, 1994

Dai-Chi Electronics Manufacturing Corp.
vs Hon. Martin Villarama, Jr. and Adonis Limjuco
Ponente: Quiason

Facts:
July 1993, petitioner filed a complaint for damages with RTC Pasig against Limjuco, a
former employee. Dai-Chi alleged that Limjuco violated their contract of employment.
Dai-Chi claimed that Limjuco became an employee of Angel Sound Philippines Corp.
engaged in the same business as Dai-Chi. Dai-Chi alleged also that Limjuco was the
head of material management control department at the competing corporation while
employed in Dai-Chi.

Dai-Chi sought to recover liquidated damages in the amount of 100,000 as provided in

their contract. Then Judge Villarama, ruled that it had no jurisdiction over the subject
matter of the controversy because the complaint is arising from employer-employee
relations. Dai-Chi contends that the action did not arise from employer-employee
relations, even though the claim is based on the employment contract.

Issue: Is petitioner's claim for damages one arising from employer-employee relations?
Ruling:
No. Petitioner does not ask for any relief under the Labor Code, it seeks to recover
damages agreed upon in the contract as redress for private respondent’s breach of his
contractual obligation to its "damage and prejudice".

On appeal to this court, we held that jurisdiction over the controversy belongs to the
civil courts. We stated that the action was for breach of a contractual obligation, which
is intrinsically a civil dispute. We further stated that while seemingly the cause of action
arose from employer-employee relations, the employer's claim for damages is
grounded on "wanton failure and refusal" without just cause to report to duty coupled
with the averment that the employee "maliciously and with bad faith" violated the terms
and conditions of the contract to the damage of the employer. Such averments
removed the controversy from the coverage of the Labor Code of the Philippines and
brought it within the purview of Civil Law.

Jurisprudence has evolved the rule that claims for damages under paragraph 4 of
Article 217, to be cognizable by the Labor Arbiter, must have a reasonable causal
connection with any of the claims provided for in that article. Only if there is such a
connection with the other claims can the claim for damages be considered as arising
from employer-employee relations.

Trial Court is ordered to continue with the proceedings

PHILIPPINE NATIONAL BANK v. FLORENCE O. CABANSAG G.R. No. 157010
June 21, 2005
 PANGANIBAN, J.:
 DOCTRINE:

Philippine government requires non-Filipinos working in the country to first obtain a

local work permit in order to be legally employed here. That permit, however, does not
automatically mean that the non-citizen is thereby bound by local laws only, as averred
by petitioner. It does not at all imply a waiver of ones national laws on labor. Absent
any clear and convincing evidence to the contrary, such permit simply means that its
holder has a legal status as a worker in the issuing country.
All Filipino workers, whether employed locally or overseas, enjoy the protective mantle
of Philippine labor and social legislations. Our labor statutes may not be rendered
ineffective by laws or judgments promulgated, or stipulations agreed upon, in a foreign
country.
FACTS:

Florence Cabansag] arrived in Singapore as a tourist. She applied for employment,

with the Singapore Branch of the Philippine National Bank. At the time, too, the Branch
Office had two (2) types of employees: (a) expatriates or the regular employees, hired
in Manila and assigned abroad including Singapore, and (b) locally (direct) hired.
Tobias, General Manager found her eminently qualified recommending the
appointment of Florence O. Cabansag, for the position which was approved.

She then filed an Application, with the Ministry of Manpower of the Government of
Singapore, for the issuance of an Employment Pass as an employee of the Singapore
PNB Branch. Her application was approved for a period of two (2) years.
Cabansag submitted to Ruben C. Tobias, her initial Performance Report. Ruben C.
Tobias was so impressed with the Report that he made a notation and, on said Report:
GOOD WORK. However, in the evening, she was told by two (2) co-employees that
Ruben C. Tobias has asked them to tell Florence O. Cabansag to resign from her job.
Tobias confirmed the veracity of the information, with the explanation that her
resignation was imperative as a cost-cutting measure of the Bank. She then asked
Ruben C. Tobias that she be furnished with a Formal Advice from the PNB Head Office
in Manila. However, Tobias flatly refused. Florence O. Cabansag did not submit any
letter of resignation.

Tobias again summoned Florence O. Cabansag to his office and demanded that she
submit her letter of resignation. For failure thereof, she received a letter from Ruben C.
Tobias terminating her employment with the Bank.
LA RULING: rendered finding respondents guilty of Illegal dismissal. NLRC RULING:
the NLRC affirmed that Decision.

CA RULING: CA noted that petitioner bank had failed to adduce in evidence the
Singaporean law supposedly governing the latters employment Contract with
respondent. CA found that the Contract had actually been processed by the Philippine
Embassy in Singapore and approved by POEA, which then used that Contract as a
basis for issuing an Overseas Employment Certificate in favor of respondent.
Even though respondent secured an employment pass from the Singapore Ministry of
Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the
labor arbiter or the NLRC over her Complaint for illegal dismissal. Finally, the CA held
that PNB had failed to establish a just cause for the dismissal of respondent.

ISSUE:Whether or not the arbitration branch of the NLRC in the National Capital
Region has jurisdiction over the instant controversy;
SC RULING:
 YES. The jurisdiction of labor arbiters and the NLRC is specified in
Article 217.
More specifically, Section 10 of RA 8042 reads in part:
 SECTION 10. Money Claims.
Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction
to hear and decide, within ninety (90) calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages.
Based on the foregoing provisions, labor arbiters clearly have original and exclusive
jurisdiction over claims arising from employer-employee relations, including termination
disputes involving all workers, among whom are overseas Filipino workers (OFW).

Prior to employing respondent, petitioner had to obtain an employment pass for her
from the Singapore Ministry of Manpower.

Similarly, the Philippine government requires non-Filipinos working in the country to

first obtain a local work permit in order to be legally employed here. That permit,
however, does not automatically mean that the non- citizen is thereby bound by local
laws only, as averred by petitioner. It does not at all imply a waiver of ones national
laws on labor. Absent any clear and convincing evidence to the contrary, such permit
simply means that its holder has a legal status as a worker in the issuing country.

Under Philippine law, this document authorized her working status in a foreign country
and entitled her to all benefits and processes under our statutes. Thus, even assuming
arguendo that she was considered at the start of her employment as a direct hire
governed by and subject to the laws, common practices and customs prevailing in
Singapore[17] she subsequently became a contract worker or an OFW who was
covered by Philippine labor laws and policies upon certification by the POEA.

Undeniably, respondent was employed by petitioner in its branch office in Singapore.

Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within
the category of migrant worker or overseas Filipino worker.
As such, it is her option to choose the venue of her Complaint against petitioner for
illegal dismissal. The law gives her two choices: (1) at the Regional Arbitration Branch
(RAB) where she resides or (2) at the RAB where the principal office of her employer is
situated. Since her dismissal by petitioner, respondent has returned to the Philippines -
- specifically to her residence at Filinvest II, Quezon City. Thus, in filing her Complaint
before the RAB office in Quezon City, she has made a valid choice of proper venue.

Notice and Hearing Not Complied With; No Valid Cause for Dismissal. Cabansag
was Illegally Dismissed.
DEPARTMENT OF FOREIGN AFFAIRS v.NATIONAL LABOR RELATIONS
COMMISSION, HON. LABOR ARBITER NIEVES V. DE CASTRO and JOSE C.
MAGNAYI
 G.R. No. 113191 September 18, 1996
 VITUG, J.:

ART. 217

DOCTRINE:
The stipulations of both the Charter and Headquarters Agreement should be able, may
well enough, to establish that, except in the specified cases of borrowing and
guarantee operations, as well as the purchase, sale and underwriting of securities, the
ADB enjoys immunity from legal process of every form. Thus, the decision of the Labor
Arbiter is rendered vacant for being null and void.
FACTS:

Jose Magnayi initiated case for his alleged illegal dismissal by ADB and the latter's
violation of the "labor-only" contracting law. Two summonses were served, one sent
directly to the ADB and the other through DFA, both with a copy of the complaint.
Forthwith, the ADB and the DFA notified respondent Labor Arbiter that the ADB, as
well as its President and Officers, were covered by an immunity from legal process
except for borrowings, guaranties or the sale of securities pursuant to its Charter in
relation to Headquarters Agreement of ADB and the Government.

LA RULING: The Labor Arbiter took cognizance of the complaint on the impression
that the ADB had waived its diplomatic immunity from suit. Labor Arbiter concluded
(that there Magnayi is illegally dismissed): The ADB did not appeal. Instead, the DFA
sought a "formal vacation of the void judgment from NLRC.
NLRC CHAIRMAN: The defense of immunity could have been raised before the Labor
Arbiter by a special appearance which, naturally, may NOT be considered as a waiver
of the very defense being raised. Except where an appeal is seasonably and properly
made, neither the Commission nor the NLRC Chairman may review, or even question,
the propriety of any decision by a Labor Arbiter. Incidentally, the Commission sits en
banc (all fifteen Commissioners) only to promulgate rules of procedure or to formulate
policies (Art. 213, Labor Code).
"If the Department of Foreign Affairs feels that the action of Labor Arbiter Nieves de
Castro constitutes misconduct, malfeasance or misfeasance, it is suggested that an
appropriate complaint be lodged with the Office of the Ombudsman.
Dissatisfied, the DFA lodged the instant petition for certiorari.

OSG in its comment initially assailed the claim of immunity by the ADB. Subsequently,
however, it submitted a Manifestation stating, that ADB, indeed, was correct in invoking
its immunity from suit under the Charter and the Headquarters Agreement.

ISSUE: Is ADB covered by immunity rendering NLRC without jurisdiction?

SC RULING:
 YES. The stipulations of both the Charter and Headquarters Agreement
should be able, may well enough, to establish that, except in the specified cases of
borrowing and guarantee operations, as well as the purchase, sale and underwriting of
securities, the ADB enjoys immunity from legal process of every form. The Banks
officers, on their part, enjoy immunity in respect of all acts performed by them in their
official capacity.
Diplomatic immunity is essentially a political question and courts should refuse to look
beyond a determination by the executive branch of the government, and where the
plea of diplomatic immunity is recognized and affirmed by the executive branch of the
government x x x it is then the duty of the courts to accept the claim of immunity upon
appropriate suggestion by the principal law officer of the government, x x x or other
officer acting under his direction.
Being an international organization that has been extended a diplomatic status, the
ADB is independent of the municipal law.
 The Office of the President, likewise, has
issued a letter to the Secretary of Labor

"Despite information from DFA, the labor arbiter in question persisted to send
summons. Courts should respect diplomatic immunities of foreign officials recognized
by the Philippine government.”
 There are two conflicting concepts of sovereign
immunity, each widely held and firmly established. According to the classical or
absolute theory, a sovereign cannot, without its consent, be made a respondent in the
Courts of another sovereign. According to the newer or restrictive theory, the immunity
of the sovereign is recognized only with regard to public acts or acts jure imperii of a
state, but not with regard to private act or acts jure gestionis.

The service contracts referred to by private respondent have not been intended by the
ADB for profit or gain but are official acts over which a waiver of immunity would not
attach.
The DFA must be allowed to plead its case whenever necessary or advisable to enable
it to help keep the credibility of the Philippine government before the international
community.
"In the United States, the procedure followed is the process of 'suggestion,' where the
foreign state or the international organization sued in an American court requests the
Secretary of State to make a determination as to whether it is entitled to immunity.
"In the Philippines, the practice is for the foreign government or the international
organization to first secure an executive endorsement of its claim of sovereign or
diplomatic immunity.
 Decision of the Labor Arbiter is VACATED for being NULL AND
VOID.

INDUSTRIAL PERSONNEL v. JOSE G. DE VERA, GR No. 205703, 2016-03-07

Facts:

Petitioner SNC Lavalin Engineers & Contractors, Inc. (SNC-Lavalin) is the principal of
IPAMS, a Canadian company with business interests in several countries. On the other
hand, respondent... is a licensed general surgeon in the Philippines.

Arriola was offered by SNC-Lavalin... the position of Safety Officer... in Madagascar.

Arriola was then hired... and his overseas employment contract was processed with
the Philippine Overseas Employment Agency (POEA)

According to Arriola, he signed the contract of employment in the Philippines.

Arriola started working in Madagascar.

After three months, Arriola received a notice of pre-termination of employment... due to

diminishing workload in the area of his expertise and the unavailability of alternative
assignments. Consequently,... Arriola was repatriated. SNC-Lavalin deposited in
Arriola's bank account his pay amounting to Two Thousand Six Hundred Thirty Six
Dollars and Eight Centavos (CA$2,636.80), based on Canadian labor law.

Aggrieved, Arriola filed a complaint against the petitioners for illegal dismissal and non-
payment of overtime pay, vacation leave and sick leave pay before the Labor Arbiter
(LA). He claimed that SNC-Lavalin still owed him unpaid salaries equivalent to the
three-month unexpired portion of his contract, amounting to, more or less, One Million
Sixty-Two Thousand Nine Hundred Thirty-Six Pesos (P1,062,936.00). He asserted that
SNC-Lavalin never offered any valid reason for his early termination and that he was
not given sufficient notice regarding the same. Arriola also insisted that the petitioners
must prove the applicability of Canadian law before the same could be applied to his
employment contract.

Issues:

When can a foreign law govern an overseas employment contract?

Ruling:

.A. No. 8042, or the Migrant Workers Act, was enacted to institute the policies on
overseas employment and to establish a higher standard of protection and promotion
of the welfare of migrant workers.

It emphasized that while recognizing the significant contribution of Filipino migrant

workers to the national economy through their foreign exchange remittances, the State
does not promote overseas employment as a means to sustain economic growth and
achieve national development.

Although it acknowledged claims arising out of law or contract involving Filipino

workers,... it does not categorically provide that foreign laws are absolutely and
automatically applicable in overseas employment contracts.

A contract freely entered into should, of course, be respected, as PIA argues, since a
contract is the law between the parties. The principle of party autonomy in contracts is
not, however, an absolute principle. The rule in Article 1306, of our Civil Code is that
the contracting parties may establish such stipulations as they may deem convenient,
"provided they are not contrary to law, morals, good customs, public order or public
policy." Thus, counterbalancing the principle of autonomy of contracting parties is the
equally general rule that provisions of applicable law, especially provisions relating to
matters affected with public policy, are deemed written into the contract. Put a little
differently, the governing principle is that parties may not contract away applicable
provisions of law especially peremptory provisions dealing with matters heavily
impressed with public interest. The law relating to labor and employment is clearly
such an area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with
each other.

the general rule is that Philippine laws apply even to overseas employment contracts.
This rule is rooted in the constitutional provision of Section 3, Article XIII that the State
shall afford full protection to labor, whether local or overseas. Hence, even if the OFW
has his employment abroad, it does not strip him of his rights to security of tenure,
humane conditions of work and a living wage under our Constitution.

As an exception, the parties may agree that a foreign law shall govern the employment
contract. A synthesis of the existing laws and jurisprudence reveals that this exception
is subject to the following requisites:That it is expressly stipulated in the overseas
employment contract that a specific foreign law shall govern;That the foreign law
invoked must be proven before the courts pursuant to the Philippine rules on
evidence;That the foreign law stipulated in the overseas employment contract must not
be contrary to law, morals, good customs, public order, or public policy of the
Philippines; andThat the overseas employment contract must be processed through
the POEA.The Court is of the view that these four (4) requisites must be complied with
before the employer could invoke the applicability of a foreign law to an overseas
employment contract.

With these requisites, the State would be able to abide by its constitutional obligation to
ensure that the rights and well-being of our OFWs are fully protected.

If the first requisite is absent, or that no foreign law was expressly stipulated in the
employment contract which was executed in the Philippines, then the domestic labor
laws shall apply in accordance with the principle of lex loci contractus.

If the second requisite is lacking, or that the foreign law was not proven pursuant to
Sections 24 and 25 of Rule 132 of the Revised Rules of Court, then the international
law doctrine of processual presumption operates. The said doctrine declares that
"[w]here a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as ours."

If the third requisite is not met, or that the foreign law stipulated is contrary to law,
morals, good customs, public order or public policy, then Philippine laws govern. This
finds legal bases in the Civil Code, specifically: (1) Article 17, which provides that laws
which have, for their object, public order, public policy and good customs shall not be
rendered ineffective by laws of a foreign country; and (2) Article 1306, which states that
the stipulations, clauses, terms and conditions in a contract must not be contrary to
law, morals, good customs, public order, or public policy.

Finally, if the fourth requisite is missing, or that the overseas employment contract was
not processed through the POEA, then Article 18 of the Labor Code is violated. Article
18 provides that no employer may hire a Filipino worker for overseas employment
except through the boards and entities authorized by the Secretary of Labor. In relation
thereto, Section 4 of R.A. No. 8042, as amended, declares that the State shall only
allow the deployment of overseas Filipino workers in countries where the rights of
Filipino migrant workers are protected. Thus, the POEA, through the assistance of the
Department of Foreign Affairs, reviews and checks whether the countries have existing
labor and social laws protecting the rights of workers, including migrant workers

Unless processed through the POEA, the State has no effective means of assessing
the suitability of the foreign laws to our migrant workers. Thus, an overseas
employment contract that was not scrutinized by the POEA definitely cannot be
invoked as it is an unexamined foreign law.

In other words, lacking any one of the four requisites would invalidate the application of
the foreign law, and the Philippine law shall govern the overseas employment contract.
Ace Navigation vs. Fernandez GR 197309, Oct. 10, 2012

Fact: On October 9, 2008, seaman Respondent filed with the NLRC a complaint for
disability benefits, with prayer for moral and exemplary damages, plus attorney’s fees,
against petitioners. The petitioners moved to dismiss the complaint, contending that
the labor arbiter had no jurisdiction over the dispute. They argued that exclusive
original jurisdiction is with the voluntary arbitrator or panel of voluntary arbitrators,
pursuant to Section 29 of the POEA Standard Employment Contract (POEA-SEC),
since the parties are covered by the CBA. Under Section 14 of the CBA, a dispute
between a seafarer and the company shall be settled through the grievance machinery
and mandatory voluntary arbitration. Fernandez opposed the motion. He argued that
inasmuch as his complaint involves a money claim, original and exclusive jurisdiction
over the case is vested with the labor arbiter. Labor Arbiter denied the motion to
dismiss, holding that under Section 10 of Republic Act (R.A.) No. 8042, the Migrant
Workers and Overseas Filipinos Act of 1995, the labor arbiter has original and
exclusive jurisdiction over money claims arising out of an employer-employee
relationship or by virtue of any law or contract, notwithstanding any provision of law to
the contrary. The petitioners appealed to the NLRC, but the labor agency denied the
appeal. The petitioners moved for reconsideration, but the NLRC denied the motion,
prompting the petitioners to elevate the case to the CA which was also denied, Hence
the petition.

Issue: Whether the Mandatory Arbitration can be waived?

Held: No, Contrary to the CA’s reading of the CBA’s Article 14, there is unequivocal or
unmistakable language in the agreement which mandatorily requires the parties to
submit to the grievance procedure any dispute or cause of action they may have
against each other. Any Dispute, grievance, or misunderstanding concerning any
ruling, practice, wages or working conditions in the COMPANY or any breach of the
Contract of Employment, or any dispute arising from the meaning or application of the
provisions of this Agreement or a claim of violation thereof or any complaint or cause of
action that any such Seaman may have against the COMPANY, as well as complaints
which the COMPANY may have against such Seaman shall be brought to the attention
of the GRIEVANCE RESOLUTION COMMITTEE before either party takes any action,
legal or otherwise. Bringing such a dispute to the Grievance Resolution Committee
shall be unwaivable prerequisite or condition precedent for bringing any action, legal or
otherwise, in any forum and the failure to so refer the dispute shall bar any and all legal
or other actions. If by reason of the nature of the Dispute, the parties are unable to
amicably settle the dispute, either party may refer the case to a MANDATORY
ARBITRATION COMMITTEE. The MANDATORY ARBITRATION COMMITTEE shall
consist of one representative to be designated by the UNION, and one representative
to be designated by the COMPANY and a third member who shall act as Chairman
and shall be nominated by mutual choice of the parties
ESTATE OF NELSON R. DULAY, represented by his wife MERRIDY JANE P. DUL
AY ABOITIZ JEBSEN MARITIME, INC. and GENERAL CHARTERERS, INC.
G.R. No. 172642, 13 June 2012

FACTS:

Nelson R. Dulay was employed by General Charterers Inc. (GCI), a subsidiary of co-
petitioner Aboitiz Jebsen Maritime Inc. 25 days after the completion of his employment
contract, Nelson died due to acute renal failure secondary to septicemia. At the time of
his death, Nelson was a bona fide member of the Associated Marine Officers and Sea
man’s Union of the Philippines (AMOSUP), GCI’s collective bargaining agent. Nelson’s
widow, Merridy Jane, thereafter claimed for death benefits through the grievance proc
edure of the CBA between AMOSUP and GCI. However, the grievance procedure was
“declared deadlocked” as petitioners refused to grant the benefits sought by the widow.
The wife then filed a complaint with the NLRC Sub-
Regional Arbitration against GCI for death and medical benefits and damages. Nelson’
s brother, only received P20,000.00 from respondents pursuant to the CBA. Merridy Ja
ne contended that she is entitled to the aggregate sum of $90,000.00 instead.

The CA ruled that while the suit filed by Merridy Jane is a money claim, the same basic
ally involves the interpretation and application of the provisions in the subject CBA. As
such, jurisdiction belongs to the voluntary arbitrator and not the labor arbiter.

ISSUE:

Whether or not claim for death benefits of an overseas employee should be with the La
bor Arbiter considering that such granting involves interpretation and application of the
provisions in the CBA.

RULING:

No. The Supreme Court held that it is true that R.A. 8042 is a special law governing ov
erseas Filipino workers. However, a careful reading of this special law would readily sh
ow that there is no specific provision thereunder which provides for jurisdiction over dis
putes or unresolved grievances regarding the interpretation or implementation of a CB
A. Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in general, of “cl
aims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers for o
verseas deployment including claims for actual, moral, exemplary and other forms of d
amages.” On the other hand, Articles 217(c) and 261 of the Labor Code are very specif
ic in stating that voluntary arbitrators have jurisdiction over cases arising from the inter
pretation or implementation of collective bargaining agreements. Stated differently, the
instant case involves a situation where the special statute (R.A. 8042) refers to a subje
ct in general, which the general statute (Labor Code) treats in particular.

Furthermore, Article 13.1 of the CBA provides that in case of dispute or conflict in the i
nterpretation or application of any of the provisions of this Agreement, or enforcement
of Company policies, the same shall be settled through negotiation, conciliation or volu
ntary arbitration. Therefore, it is clear that the parties, in the first place, really intended t
o bring to conciliation or voluntary arbitration any dispute or conflict in the interpretation
or application of the provisions of their CBA. It is settled that when the parties have val
idly agreed on a procedure for resolving grievances and to submit a dispute to voluntar
y arbitration then that procedure should be strictly observed

Friday, June 08, 2018

Case Digest: GSIS v. NLRC, et al.

G.R. No. 180045: November 17, 2010

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, v. NATIONAL LABOR

RELATIONS COMMISSION (NLRC), DIONISIO BANLASAN, ALFREDO T.
TAFALLA, TELESFORO D. RUBIA, ROGELIO A. ALVAREZ, DOMINADOR A.
ESCOBAL, and ROSAURO PANIS, Respondents.

NACHURA, J.:

FACTS:

Respondents were hired DNL Security Agency. By virtue of the service contract
entered into by DNL Security and petitioner Government Service Insurance System on
May 1, 1978, respondents were assigned to petitioners Tacloban City office, each
receiving a monthly income of P1,400.00. Sometime in July 1989, petitioner voluntarily
increased respondents monthly salary to P3,000.00.

In February 1993, DNL Security informed respondents that its service contract with
petitioner was terminated. This notwithstanding, DNL Security instructed respondents
to continue reporting for work to petitioner. Respondents worked as instructed until
April 20, 1993, but without receiving their wages; after which, they were terminated
from employment.

Respondents filed with the NLRC a complaint against DNL Security and petitioner for
illegal dismissal, separation pay, salary differential, 13th month pay, and payment of
unpaid salary.
The LA found that respondents were not illegally terminated from employment because
the employment of security guards is dependent on the service contract between the
security agency and its client. However, considering that respondents had been out of
work for a long period, and consonant with the principle of social justice, the LA
awarded respondents with separation pay equivalent to one (1) month salary for every
year of service, to be paid by DNL Security. Because DNL Security instructed
respondents to continue working for petitioner from February 1993 to April 20, 1993,
DNL Security was also made to pay respondents wages for the period.

DNL Security filed a motion for reconsideration, while petitioner appealed to the NLRC.
NLRC treated DNL Securitys motion for reconsideration as an appeal, but dismissed
the same, as it was not legally perfected. It likewise dismissed petitioners appeal,
having been filed beyond the reglementary period.

Undaunted, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court
before the CA. The CA affirmed the NLRC decision. Petitioner filed a motion for
reconsideration but the same was denied. Hence, this petition.
ISSUE:
Whether or not the CA erred in ruling that the appeal was not filed on time and in ruling
that petitioner GSIS is jointly and severally liable with DNL Security Agency for
payment of the unsubstantiated amounts of Salary Differentials
HELD:

REMEDIAL LAW

Under Section 3, Rule 13 of the Rules of Court, where the filing of pleadings,
appearances, motions, notices, orders, judgments, and all other papers with the
court/tribunal is made by registered mail, the date of mailing, as shown by the post
office stamp on the envelope or the registry receipt, shall be considered as the date of
filing.

Thus, the date of filing is determinable from two sources: from the post office stamp on
the envelope or from the registry receipt, either of which may suffice to prove the
timeliness of the filing of the pleadings. If the date stamped on one is earlier than the
other, the former may be accepted as the date of filing. This presupposes, however,
that the envelope or registry receipt and the dates appearing thereon are duly
authenticated before the tribunal where they are presented.

REMEDIAL LAW

In exceptional cases, a belated appeal may be given due course if greater injustice will
be visited upon the party should the appeal be denied

In any case, even if the appeal was filed one day late, the same should have been
entertained by the NLRC. Indeed, the appeal must be perfected within the statutory or
reglementary period. This is not only mandatory, but also jurisdictional. Failure to
perfect the appeal on time renders the assailed decision final and executory and
deprives the appellate court or body of the legal authority to alter the final judgment,
much less entertain the appeal. However, this Court has, time and again, ruled that, in
exceptional cases, a belated appeal may be given due course if greater injustice will be
visited upon the party should the appeal be denied. The Court has allowed this
extraordinary measure even at the expense of sacrificing order and efficiency if only to
serve the greater principles of substantial justice and equity.

Technicality should not be allowed to stand in the way of equitably and completely
resolving the rights and obligations of the parties. We have consistently held that
technical rules are not binding in labor cases and are not to be applied strictly if the
result would be detrimental to the working man.

The Court notes, however, that while the CA affirmed the dismissal by the NLRC of
petitioners appeal for being filed out of time, it nonetheless delved into the merits of the
case. This notwithstanding, we do not entirely agree with the appellate courts
conclusion affirming in toto the LA decision.

LABOR LAW

The fact that there is no actual and direct employer-employee relationship between
petitioner and respondents does not absolve the former from liability for the latters
monetary claims. When petitioner contracted DNL Securitys services, petitioner
became an indirect employer of respondents, pursuant to Article 107 of the Labor
Code

ART. 107. Indirect employer. The provisions of the immediately preceding Article shall
likewise apply to any person, partnership, association or corporation which, not being
an employer, contracts with an independent contractor for the performance of any
work, task, job or project.

After DNL Security failed to pay respondents the correct wages and other monetary
benefits, petitioner, as principal, became jointly and severally liable, as provided in
Articles 106 and 109 of the Labor Code, which state:
ART. 106. Contractor or subcontractor. Whenever an employer enters into a contract
with another person for the performance of the formers work, the employees of the
contractor and of the latter's subcontractor, if any, shall be paid in accordance with the
provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such employees to the extent of the work
performed under the contract, in the same manner and extent that he is liable to
employees directly employed by him.
ART. 109. Solidary liability. The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any provision of this Code. For
purposes of determining the extent of their civil liability under this Chapter, they shall
be considered as direct employers.
Petitioners liability covers the payment of respondent's salary differential and 13th
month pay during the time they worked for petitioner. In addition, petitioner is solidarily
liable with DNL Security for respondents unpaid wages from February 1993 until April
20, 1993. While it is true that respondents continued working for petitioner after the
expiration of their contract, based on the instruction of DNL Security, petitioner did not
object to such assignment and allowed respondents to render service. Thus, petitioner
impliedly approved the extension of respondents services.

Accordingly, petitioner is bound by the provisions of the Labor Code on indirect

employment. Petitioner cannot be allowed to deny its obligation to respondents after it
had benefited from their services. So long as the work, task, job, or project has been
performed for petitioners benefit or on its behalf, the liability accrues for such services.
The principal is made liable to its indirect employees because, after all, it can protect
itself from irresponsible contractors by withholding payment of such sums that are due
the employees and by paying the employees directly, or by requiring a bond from the
contractor or subcontractor for this purpose.

Petitioner's liability, however, cannot extend to the payment of separation pay. An

order to pay separation pay is invested with a punitive character, such that an indirect
employer should not be made liable without a finding that it had conspired in the illegal
dismissal of the employees.

It should be understood, though, that the solidary liability of petitioner does not
preclude the application of Article 1217 of the Civil Code on the right of reimbursement
from its co-debtor.

PARTLY GRANTED

[G.R. No. 166365 September 30, 2005]

DUTY FREE PHILIPPINES, Petitioner, vs. ROSSANO J. MOJICA, Respondent

FACTS

The Discipline Committee of petitioner Duty Free rendered a decision finding

respondent Mojica guilty Neglect of Duty by causing considerable damage to or loss of
materials, assets and property of Duty Free. Thus, Mojica was considered forcibly
resigned from the service with forfeiture of all benefits except his salary and the
monetary value of the accrued leave credits.

Mojica was formally informed of his forced resignation and thereupon, he filed a
complaint for illegal dismissal with prayer for reinstatement, payment of full back
wages, damages, and attorney’s fees, against DFP before the NLRC.

ISSUE

Whether or not NLRC has jurisdiction over the controversy.

HELD

The SC held that respondent Mojica is a civil service employee; therefore, jurisdiction
is lodged not with the NLRC, but with the Civil Service Commission.

Duty Free was created under Executive Order No. 46 on September 4, 1986 primarily
to augment the service facilities for tourists and to generate foreign exchange and
revenue for the government. In order for the government to exercise direct and
effective control and regulation over the tax and duty free shops, their establishment
and operation was vested in the Ministry, now Department of Tourism, through its
implementing arm, the Philippine Tourism Authority (PTA). All the net profits from the
merchandising operations of the shops accrued to the DOT.

As provided under Presidential Decree (PD) No. 564, PTA is a corporate body
attached to the DOT. As an attached agency, the recruitment, transfer, promotion and
dismissal of all its personnel was governed by a merit system established in
accordance with the civil service rules. In fact, all PTA officials and employees are
subject to the Civil Service rules and regulations.

Accordingly, since Duty Free is under the exclusive authority of the PTA, it follows that
its officials and employees are likewise subject to the Civil Service rules and
regulations. Clearly then, Mojica’s recourse to the Labor Arbiter was not proper. He
should have followed the procedure laid down in Duty Free’s merit system and the Civil
Service rules and regulations.

The decision of the CA was set aside.

Pakistan International Airlines Corporation vs. Hon. Blas F. Ople

G.R. No. 61594, September 28, 1990

190 SCRA 90
Petition for certiorari to review the order of the Minister of Labor.

FACTS:

On 2 December 1978, petitioner Pakistan International Airlines Corporation (PIA), a

foreign corporation licensed to do business in the Philippines, executed in Manila two
(2) separate contracts of employment, one with private respondent Ethelynne B.
Farrales and the other with private respondent Ma. M.C. Mamasig. The contracts
became effective on 9 January 1979 and provided for the duration of employment and
penalty, termination and the applicable law which is of Pakistan’s. They were trained in
Pakistan and worked as flight attendants with base station in Manila and flying
assignments to different parts of the Middle East and Europe.

A year and four (4) months prior to the expiration of the contracts of employment, they
received separate letters informing them that their services would be terminated.

Private respondents Farrales and Mamasig jointly instituted a complaint for illegal
dismissal and non-payment of company benefits and bonuses, against PIA with the
then Ministry of Labor and Employment. Several attempts at conciliation were not
fruitful.

ISSUES:

1. Whether or not the Regional Director, MOLE, had jurisdiction over the subject
matter of the complaint initiated by private respondents for illegal dismissal,
jurisdiction over the same being lodged in the Arbitration Branch of the National
Labor Relations Commission (“NLRC”).
2. Whether or not the order of the Regional Director had been issued in violation of
petitioner’s right to procedural due process.
3. Whether or not the employment contract is the governing law between the parties
and not the provisions of the Labor Code.
4. ADR ISSUE: WON the provision in the contract that the venue for settlement of
any dispute arising out of or in connection with the agreement is to be resolved
only in courts of Karachi Pakistan is valid.

RULING:

1. At the time the complaint was initiated in September 1980 and at the time the Orders
assailed were rendered on January 1981 (by Regional Director Francisco L. Estrella)
and August 1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional Director had
jurisdiction over termination cases. Art. 278 of the Labor Code, as it then existed,
forbade the termination of the services of employees with at least one (1) year of
service without prior clearance from the Department of Labor and Employment.
2. No. Petitioner was given an opportunity to submit its position paper and evidence
they had.
3. The principle of party autonomy in contracts is not an absolute principle. The rule in
Article 1306 of the Civil Code is that the contracting parties may establish such
stipulations as they may deem convenient, “provided they are not contrary to law,
morals, good customs, public order or public policy.” Thus, counter-balancing the
principle of autonomy of contracting parties is the equally general rule that provisions
of applicable law, especially provisions relating to matters affected with public policy,
are deemed written into the contract. The law relating to labor and employment are
impressed with public interest. Paragraph 5 of that employment contract was
inconsistent with Articles 280 and 281 of the Labor Code and thus, cannot be given
effect.

4. These circumstances – the employer-employee relationship between the parties; the

contract being not only executed in the Philippines, but also performed here, at least
partially; private respondents are Philippine citizens and petitioner, although a foreign
corporation, is licensed to do business and actually doing business and hence resident
in the Philippines; lastly, private respondents were based in the Philippines in between
their assigned flights to the Middle East and Europe – show that the Philippine courts
and administrative agencies are the proper fora for the resolution of contractual
disputes between the parties. The employment agreement cannot be given effect so as
to bar Philippine agencies and courts vested with jurisdiction by Philippine law.
Moreover, PIA failed to plead and proved the contents of Pakistan law on the matter, it
is therefore presumed that the applicable provisions of the law of Pakistan are the
same as the applicable provisions of Philippine law. Hence, the provision in the
contract that the venue for settlement of any dispute arising out of or in connection with
the agreement is to be resolved only in courts of Karachi Pakistan is not valid.

NOTES:

Labor Relations; Due Process; Petitioner’s right to procedural due process was not
violated even if no formal or oral hearing was conducted, considering that it had ample
opportunity to explain its side. – The second contention of petitioner PIA is that, even if
the Regional Director had jurisdiction, still his order was null and void because it had
been issued in violation of petitioner’s right to procedural due process . This claim,
however, cannot be given serious consideration. Petitioner was ordered by the
Regional Director to submit not only its position paper but also such evidence in its
favor as it might have. Petitioner opted to rely solely upon its position paper; we must
assume it had no evidence to sustain its assertions. Thus, even if no formal or oral
hearing was conducted, petitioner had ample opportunity to explain its side. Moreover,
petitioner PIA was able to appeal his case to the Ministry of Labor and Employment.

Contracts; Parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest. The
principle of party autonomy in contracts is not absolute. – A contract freely entered into
should, of course, be respected, as PIA argues, since a contract is the law between the
parties. The principle of party autonomy in contracts is not, however, an absolute
principle. The rule in Article 1306, of our Civil Code is that the contracting parties may
establish such stipulations as they may deem convenient, “provided they are not
contrary to law, morals, good customs, public order or public policy.” Thus, counter-
balancing the principle of autonomy of contracting parties is the equally general rule
that provisions of applicable law, especially provisions relating to matters affected with
public policy, are deemed written into the contract. Put a little differently, the governing
principle is that parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest. The
law relating to labor and employment is clearly such an area and parties are not at
liberty to insulate themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other. It is thus necessary to appraise the
contractual provisions invoked by petitioner PIA in terms of their consistency with
applicable Philippine law and regulations.

Labor Law; A contract providing for employment with a fixed period was not necessary
unlawful. – In Brent School, Inc., et.al. v. Ronaldo Zamora, etc., et.al. the Court had
occasion to examine in detail the question of whether employment for a fixed term has
been outlawed under the above quoted provisions of the Labor Code. After an
extensive examination of the history and development of Articles 280 and 281, the
Court reached the conclusion that a contract providing for employment with a fixed
period was not necessarily unlawful: “There can of course be no quarrel with the
proposition that where from the circumstances it is apparent that periods have been
imposed to preclude acquisition of tenurial security by the employee, they should be
struck down or disregarded as contrary to public policy, morals, etc. But where no such
intent to circumvent the law is shown, or stated otherwise, where the reason for the law
does not exist e.g. where it is indeed the employee himself who insists upon a period
or where the nature of the engagement is such that, without being seasonal or for a
specific project, a definite date of termination is a sine qua non would an agreement
fixing a period be essentially evil or illicit, therefore anathema Would such an
agreement come within the scope of Article 280 which admittedly was enacted “to
prevent the circumvention of the right of the employee to be secured in . . . (his)
employment?” As it is evident from even only the three examples already given that
Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to
exhaust the gamut of employment contracts to which the lack of a fixed period would
be an anomaly, but would also appear to restrict, without reasonable distinctions, the
right of an employee to freely stipulate with his employer the duration of his
engagement, it logically follows that such a literal interpretation should be eschewed or
avoided. The law must be given reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment and subverting to boot
the principle of freedom of contract to remedy the evil of employers” using it as a
means to prevent their employees from obtaining security of tenure is like cutting off
the nose to spite the face or, more relevantly, curing a headache by lopping off the
head. xxx xxx xxx Accordingly, and since the entire purpose behind the development of
legislation culminating in the present Article 280 of the Labor Code clearly appears to
have been, as already observed, to prevent circumvention of the employee’s right to be
secure in his tenure, the clause in said article indiscriminately and completely ruling out
all written or oral agreements conflicting with the concept of regular employment as
defined therein should be construed to refer to the substantive evil that the Code itself
has singled out: agreements entered into precisely to circumvent security of tenure. It
should have no application to instances where a fixed period of employment was
agreed upon knowingly and voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent, or where it satisfactorily appears that the employer
and employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the latter. Unless thus limited
in its purview, the law would be made to apply to purposes other than those explicitly
stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and
apt to lead to absurd and unintended consequences. (emphasis supplied)

Contracts; Conflicts of Law; When the relationship between the parties is much
affected by public interest, the otherwise applicable Philippine laws and regulations
cannot be rendered illusory by the parties agreeing upon some other law to govern
their relationship. – Petitioner PIA cannot take refuge in paragraph 10 of its
employment agreement which specifies, firstly, the law of Pakistan as the applicable
law of the agreement and, secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement “only [in] courts of Karachi Pakistan”.
The first clause of paragraph 10 cannot be invoked to prevent the application of
Philippine labor laws and regulations to the subject matter of this case, i.e., the
employer-employee relationship between petitioner PIA and private respondents. We
have already pointed out that the relationship is much affected with public interest and
that the otherwise applicable Philippine laws and regulations cannot be rendered
illusory by the parties agreeing upon some other law to govern their relationship.
Neither may petitioner invoke the second clause of paragraph 10, specifying the
Karachi courts as the sole venue for the settlement of dispute; between the contracting
parties. Even a cursory scrutiny of the relevant circumstances of this case will show the
multiple and substantive contacts between Philippine law and Philippine courts, on the
one hand, and the relationship between the parties, upon the other: the contract was
not only executed in the Philippines, it was also performed here, at least partially;
private respondents are Philippine citizens and respondents, while petitioner, although
a foreign corporation, is licensed to do business (and actually doing business) and
hence resident in the Philippines; lastly, private respondents were based in the
Philippines in between their assigned flights to the Middle East and Europe. All the
above contacts point to the Philippine courts and administrative agencies as a proper
forum for the resolution of contractual disputes between the parties. Under these
circumstances, paragraph 10 of the employment agreement cannot be given effect so
as to oust Philippine agencies and courts of the jurisdiction vested upon them by
Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead
and prove the contents of Pakistan law on the matter; it must therefore be presumed
that the applicable provisions of the law of Pakistan are the same as the applicable
provisions of Philippine law.

MHC AND MHICL vs. NLRC et al

G.R. No. 120077
October 13, 2000

FACTS: private respondent Santos was an overseas worker employed as a printer at

the Mazoon Printing Press, Sultanate of Oman. Subsequently he was directly hired by
the Palace Hotel, Beijing, People’s Republic of China and later terminated due to
retrenchment.

Petitioners are the Manila Hotel Corporation (“MHC”) and the Manila Hotel
International Company, Limited (“MHICL”).

When the case was filed in 1990, MHC was still a government-owned and controlled
corporation duly organized and existing under the laws of the Philippines. MHICL is a
corporation duly organized and existing under the laws of Hong Kong. MHC is an
“incorporator” of MHICL, owning 50% of its capital stock.

By virtue of a “management agreement” with the Palace Hotel, MHICL trained the
personnel and staff of the Palace Hotel at Beijing, China.

Now the facts.

During his employment with the Mazoon Printing Press, respondent Santos received a
letter from Mr. Shmidt, General Manager, Palace Hotel, Beijing, China. Mr. Schmidt
informed respondent Santos that he was recommended by one Buenio, a friend of his.
Mr. Shmidt offered respondent Santos the same position as printer, but with a higher
monthly salary and increased benefits. Respondent Santos wrote to Mr. Shmidt and
signified his acceptance of the offer.

The Palace Hotel Manager, Mr. Henk mailed a ready to sign employment contract to
respondent Santos. Santos resigned from the Mazoon Printing Press. Santos wrote the
Palace Hotel and acknowledged Mr. Henk’s letter. The employment contract stated
that his employment would be for a period of two years. He then started to work at the
Palace Hotel.

Subsequently, respondent Santos signed an amended “employment agreement” with

the Palace Hotel. In the contract, Mr. Shmidt represented the Palace Hotel. The Vice
President (Operations and Development) of petitioner MHICL Cergueda signed the
employment agreement under the word “noted”.

After working in the Palace hotel for less than 1 year, the Palace Hotel informed
respondent Santos by letter signed by Mr. Shmidt that his employment at the Palace
Hotel print shop would be terminated due to business reverses brought about by the
political upheaval in China. The Palace Hotel terminated the employment of Santos
and paid all benefits due him, including his plane fare back to the Philippines. Santos
was repatriated to the Philippines.

Santos filed a complaint for illegal dismissal with the Arbitration Branch, NCR, NLRC.
He prayed for an award of AD, ED and AF for. The complaint named MHC, MHICL, the
Palace Hotel and Mr. Shmidt as respondents. The Palace Hotel and Mr. Shmidt were
not served with summons and neither participated in the proceedings before the LA.

The LA decided the case against petitioners. Petitioners appealed to the NLRC,
arguing that the POEA, not the NLRC had jurisdiction over the case. The NLRC
promulgated a resolution, stating that the appealed Decision be declared null and void
for want of jurisdiction

Santos moved for reconsideration of the afore-quoted resolution. He argued that the
case was not cognizable by the POEA as he was not an “overseas contract worker.
The NLRC granted the motion and reversed itself. The NLRC directed another LA to
hear the case on the question of whether private respondent was retrenched or
dismissed. The La found that Santos was illegally dismissed from employment and
recommended that he be paid actual damages equivalent to his salaries for the
unexpired portion of his contract. The NLRC ruled in favor of private respondent.
Petitioners filed an MR arguing that the LA’s recommendation had no basis in law and
in fact, however it was denied. Hence, this petition.

ISSUE: Is the NLRC a proper forum to decide this case?

HELD: petition granted; the orders and resolutions of the NLRC are annulled.

NO

Forum Non-Conveniens

The NLRC was a seriously inconvenient forum.

We note that the main aspects of the case transpired in two foreign jurisdictions and
the case involves purely foreign elements. The only link that the Philippines has with
the case is that Santos is a Filipino citizen. The Palace Hotel and MHICL are foreign
corporations. Not all cases involving our citizens can be tried here.

The employment contract. — Respondent Santos was hired directly by the Palace
Hotel, a foreign employer, through correspondence sent to the Sultanate of Oman,
where respondent Santos was then employed. He was hired without the intervention of
the POEA or any authorized recruitment agency of the government.

Under the rule of forum non conveniens, a Philippine court or agency may assume
jurisdiction over the case if it chooses to do so provided: (1) that the Philippine court is
one to which the parties may conveniently resort to; (2) that the Philippine court is in a
position to make an intelligent decision as to the law and the facts; and (3) that the
Philippine court has or is likely to have power to enforce its decision. The conditions
are unavailing in the case at bar.

Not Convenient. — We fail to see how the NLRC is a convenient forum given that all
the incidents of the case — from the time of recruitment, to employment to dismissal
occurred outside the Philippines. The inconvenience is compounded by the fact that
the proper defendants, the Palace Hotel and MHICL are not nationals of the
Philippines. Neither .are they “doing business in the Philippines.” Likewise, the main
witnesses, Mr. Shmidt and Mr. Henk are non-residents of the Philippines.

No power to determine applicable law. — Neither can an intelligent decision be made

as to the law governing the employment contract as such was perfected in foreign soil.
This calls to fore the application of the principle of lex loci contractus (the law of the
place where the contract was made).

The employment contract was not perfected in the Philippines. Santos signified his
acceptance by writing a letter while he was in the Republic of Oman. This letter was
sent to the Palace Hotel in the People’s Republic of China.

No power to determine the facts. — Neither can the NLRC determine the facts
surrounding the alleged illegal dismissal as all acts complained of took place in Beijing,
People’s Republic of China. The NLRC was not in a position to determine whether the
Tiannamen Square incident truly adversely affected operations of the Palace Hotel as
to justify Santos’ retrenchment.

Principle of effectiveness, no power to execute decision. — Even assuming that a

proper decision could be reached by the NLRC, such would not have any binding
effect against the employer, the Palace Hotel. The Palace Hotel is a corporation
incorporated under the laws of China and was not even served with summons.
Jurisdiction over its person was not acquired.

This is not to say that Philippine courts and agencies have no power to solve
controversies involving foreign employers. Neither are we saying that we do not have
power over an employment contract executed in a foreign country. If Santos were an
“overseas contract worker”, a Philippine forum, specifically the POEA, not the NLRC,
would protect him. He is not an “overseas contract worker” a fact which he admits with
conviction.

__
Even assuming that the NLRC was the proper forum, even on the merits, the NLRC’s
decision cannot be sustained.

II. MHC Not Liable

Even if we assume two things: (1) that the NLRC had jurisdiction over the case, and (2)
that MHICL was liable for Santos’ retrenchment, still MHC, as a separate and distinct
juridical entity cannot be held liable.

True, MHC is an incorporator of MHICL and owns 50% of its capital stock. However,
this is not enough to pierce the veil of corporate fiction between MHICL and MHC. In
Traders Royal Bank v. CA, we held that “the mere ownership by a single stockholder or
by another corporation of all or nearly all of the capital stock of a corporation is not of
itself a sufficient reason for disregarding the fiction of separate corporate personalities.”

It is basic that a corporation has a personality separate and distinct from those
composing it as well as from that of any other legal entity to which it may be related.
Clear and convincing evidence is needed to pierce the veil of corporate fiction. In this
case, we find no evidence to show that MHICL and MHC are one and the same entity.

III. MHICL not Liable

Santos predicates MHICL’s liability on the fact that MHICL “signed” his employment
contract with the Palace Hotel. This fact fails to persuade us.

First, we note that the Vice President (Operations and Development) of MHICL,
Cergueda signed the employment contract as a mere witness. He merely signed under
the word “noted”.

When one “notes” a contract, one is not expressing his agreement or approval, as a
party would. In Sichangco v. Board of Commissioners of Immigration, the Court
recognized that the term “noted” means that the person so noting has merely taken
cognizance of the existence of an act or declaration, without exercising a judicious
deliberation or rendering a decision on the matter.
Second, and more importantly, there was no existing employer-employee relationship
between Santos and MHICL. In determining the existence of an employer-employee
relationship, the following elements are considered:

“(1) the selection and engagement of the employee;

“(2) the payment of wages;
“(3) the power to dismiss; and
“(4) the power to control employee’s conduct.”

MHICL did not have and did not exercise any of the aforementioned powers. It did not
select respondent Santos as an employee for the Palace Hotel. He was referred to the
Palace Hotel by his friend, Buenio. MHICL did not engage respondent Santos to work.
The terms of employment were negotiated and finalized through correspondence
between Santos, Mr. Schmidt and Mr. Henk, who were officers and representatives of
the Palace Hotel and not MHICL. Neither did Santos adduce any proof that MHICL had
the power to control his conduct. Finally, it was the Palace Hotel, through Mr. Schmidt
and not MHICL that terminated respondent Santos’ services.

Likewise, there is no evidence to show that the Palace Hotel and MHICL are one and
the same entity. The fact that the Palace Hotel is a member of the “Manila Hotel
Group” is not enough to pierce the corporate veil between MHICL and the Palace
Hotel.

Considering that the NLRC was forum non-conveniens and considering further that no
employer-employee relationship existed between MHICL, MHC and Santos, the LA
clearly had no jurisdiction over respondent’s claim in the NLRC case. In all the cases
under the exclusive and original jurisdiction of the LA, an employer-employee
relationship is an indispensable jurisdictional requirement.

SAUDI ARABIAN AIRLINES v. MA. JOPETTE M. REBESENCIO, GR No. 198587,

2015-01-14

Facts:

1. Petitioner SAUDIA is a foreign corporation established and existing under the

Royal Decree No. M/24 of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of
Saudi Arabia ("KSA"). Its Philippine Office is located at 4/F Metro House Building,
Sen, Gil J. Puyat Avenue,... Makati City (Philippine Office).

Respondents... were recruited and hired by Saudia as Temporary Flight Attendants

with the accreditation and approval of the Philippine Overseas Employment
Administration.

after working as Temporary Flight Attendants, respondents became Permanent Flight

Attendants.

Respondents continued their employment with Saudia until they were separated from
service on various dates in 2006.

Respondents were told that if they did not resign, Saudia would terminate them all the
same. The threat of termination entailed the loss of benefits, such as separation pay
and ticket discount entitlements.

if the Air Hostess becomes pregnant at any time during the term of this contract, this
shall render her employment contract as void and she... will be terminated due to lack
of medical fitness.

Issues:

whether respondents' voluntarily resigned or were illegally terminated

Ruling:

we emphasize the glaringly discriminatory nature of Saudia's policy. As argued by

respondents, Saudia's policy entails the termination of employment of flight attendants
who become pregnant. At the risk of stating the obvious, pregnancy is an... occurrence
that pertains specifically to women. Saudia's policy excludes from and restricts
employment on the basis of no other consideration but sex.

We do not lose sight of the reality that pregnancy does present physical limitations that
may render difficult the performance of functions associated with being a flight
attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a
disability so permanent... and immutable that, it must entail the termination of one's
employment. It is clear to us that any individual, regardless of gender, may be subject
to exigencies that limit the performance of functions. However, we fail to appreciate
how pregnancy could be such an impairing... occurrence that it leaves no other
recourse but the complete termination of the means through which a woman earns a
living.

As the present dispute relates to (what the respondents allege to be) the illegal
termination of respondents' employment, this case is immutably a matter of public
interest and public policy. Consistent with clear pronouncements in law and
jurisprudence, Philippine laws properly... find application in and govern this case.

Applying the cited standards on resignation and constructive dismissal, it is clear that
respondents were constructively dismissed. Hence, their termination was illegal.

The termination of respondents' employment happened when they were pregnant and
expecting to incur costs on account of child delivery and infant rearing.

It is clear that respondents intended to remain employed with Saudia. All they did was
avail of their maternity leaves. Evidently, the very nature of a maternity leave means
that a pregnant employee will not report for work only temporarily and that she will
resume the... performance of her duties as soon as the leave allowance expires.

It is also clear that respondents exerted all efforts to' remain employed with Saudia.
Each of them repeatedly filed appeal letters (as much as five [5] letters in the case of
Rebesencio[109]) asking Saudia to reconsider the ultimatum that they resign or be...
terminated along with the forfeiture of their benefits. Some of them even went to
Saudia's office to personally seek reconsideration

Respondents also adduced a copy of the "Unified Employment Contract for Female
Cabin Attendants."[111] This contract deemed void the employment of a flight
attendant who becomes pregnant and threatened termination due to lack of medical
fitness.[112] The threat of termination (and the forfeiture of benefits that it entailed) is
enough to compel a reasonable person in respondents' position to give up his or her
employment.

Stripped of all unnecessary complexities, respondents were dismissed for no other

reason than simply that they were pregnant. This is as wanton, oppressive, and tainted
with bad faith as any reason for termination of... employment can be. This is no
ordinary case of illegal dismissal. This is a case of manifest gender discrimination. It is
an affront not only to our statutes and policies on employees' security of tenure, but
more so, to the Constitution's dictum of fundamental equality between... men and
women

Principles:

Lasco Vs UNITED NATIONS REVOLVING FUND FOR NATURAL RESOURCES

EXPLORATION (UNRFNRE)

G.R. Nos. 109095-109107 February 23, 1995 ELDEPIO LASCO, RODOLFO ELISAN,
URBANO BERADOR, FLORENTINO ESTOBIO, MARCELINO MATURAN, FRAEN
BALIBAG, CARMELITO GAJOL, DEMOSTHENES MANTO, SATURNINO BACOL,
SATURNINO LASCO, RAMON LOYOLA, JOSENIANO B. ESPINA, all represented by
MARIANO R. ESPINA, petitioner, vs. UNITED NATIONS REVOLVING FUND FOR
NATURAL RESOURCES EXPLORATION (UNRFNRE) represented by its operations
manager, DR. KYRIACOS LOUCA, OSCAR N. ABELLA, LEON G. GONZAGA, JR.,
MUSIB M. BUAT, Commissioners of National Labor Relations Commission (NLRC),
Fifth Division, Cagayan de Oro City and IRVING PETILLA, Labor Arbiter of Butuan
City, respondents.

Facts: Petitioners were dismissed from their employment with privaterespondent, the
United Nations Revolving Fund for NaturalResourcesExploration (UNRFNRE), which is
a special fund and subsidiary organ of theUnited Nations.The UNRFNRE is involved in
a joint project of thePhilippineGovernment and the United Nations for exploration work
in Dinagat Island.Petitioners are thecomplainants for illegal dismissal and
damages.Private respondent alleged that respondent Labor Arbiter had no jurisdiction
over its personality since itenjoyed diplomatic immunity.

Issue:WON specialized agencies enjoy diplomatic immunity

Held:Petition is dismissed. This is not to say that petitioner have no recourse.Section

31 of the Convention on the Privileges and Immunitiesof the SpecializedAgencies of
the United Nations states that ³each specialized agency shall makea provision for
appropriate modes of settlement of (a) disputes arising out of contracts or other
disputes of private character to which thespecialized agencyisa party.´ Private
respondent is not engaged in a commercial venture in thePhilippines.Its presence is by
virtue of a joint project entered into by thePhilippine Government and theUnited
Nations for mineral exploration in DinagatIsland
USA v. Guinto, 182 S 644 (1990)

FACTS:

USA vs. Guinto. On February 24, 1986, the U.S. Air Force stationed in Clark Air Base
solicited bids for barbershop concessions. Ramon Dizon won the bidding.
Respondents objected, claiming that Dizon had made a bid for four facilities which
includes an area not included in the bidding. The petitioners explained that Dizon was
already operating the concession, and informed the respondents that solicitation for the
barber service contracts would be available by the end of June before which the
respondents would be notified. On June 30, 1986, the private respondents filed a
complaint in court to compel the Philippine Area Exchange (PHAX) and the petitioners
to cancel the award to Dizon, to conduct a rebidding for the barbershop concessions,
and to allow the respondents through a writ of preliminary injunction to continue
operating the concessions pending litigation. The court issued an ex parte order
directing the individual petitioners to maintain the status quo. Petitioners then filed a
motion to dismiss and opposed the petition for preliminary injunction, stating that the
action was in effect a suit against the United States of America which had not waived
its non-suability. The defendants who are official employees of the U.S. Air Force were
also immune from suit. The trial court denied the application for a writ of preliminary
injunction.

USA v. Rodrigo. Fabian Genove who worked as a cook in the U.S. Air Force
Recreation Center at the John Hay Air Station in Baguio City, filed a complaint for
damages against petitioners Anthony Lamachia, Wilfredo Belsa, Rose Cartalla and
Peter Orascion for his dismissal from work. Belsa, Cartalla, and Orascion had testified
during an investigation that Genove had poured urine into the soup stock used in
cooking the vegetables served to the club customers. As club manager, Lamachia
suspended Genove and referred the case to a board of arbitrators. The board
unanimously found Genove guilty and recommended his dismissal. Lamachia, et. al.,
joined by the United States of America moved to dismiss the complaint, alleging that
Lamachia was an officer of the U.S. Air Force and was thus immune from suit. They
argued that the suit was in effect against the United States which had not given its
consent to be sued. The trial court denied the motion, saying that the defendants went
beyond their functions that brought them out of the protective mantle of whatever
immunities they may have initially had such that the plaintiff’s allegation that the acts
complained of were illegal, done with extreme bad faith and with preconceived sinister
plan to harass and finally dismiss the plaintiff gains significance.

USA v. Ceballos. Luis Bautista, who was employed as a barracks boy in Camp O’
Donnell, was arrested following a buy-bust operation conducted by the petitioners who
were special agents of the Air Force Office of Special Investigators (AFOSI). A charge
was filed against Bautista in violation of R.A. 6425 or the Dangerous Drugs Act which
caused his dismissal from employment. Bautista thus filed a complaint for damages
against the petitioners who filed an answer without the assistance of counsel or
authority from the U.S. Department of Justice. The petitioners alleged that they had
only done their duty in enforcing the laws of the Philippines inside the American bases
pursuant to the RP-US Military Bases Agreement. The law firm representing the
defendants filed a motion to withdraw the answer and dismiss the complaint on the
ground that the defendants were just acting in their official capacity and that the
complaint against them was in effect a suit against the United States which did not give
its consent to be sued. The motion was denied by the trial court which stated that the
claimed immunity under the Military Bases Agreement covered only criminal and not
civil cases and that the defendants had come under the jurisdiction of the court when
they submitted their answer.

USA v. Vergara. Plaintiffs alleged that they were beaten up by the defendants,
handcuffed, and allowed to be bitten by dogs which caused extensive injuries to the
plaintiffs. The defendants denied the claim and asserted that the plaintiffs were
arrested for theft and were bitten by the dogs because they struggled and resisted
arrest. The defendants claimed that the dogs were called off and the plaintiffs were
immediately taken to the medical center where they were treated for their wounds. The
defendants filed a motion to dismiss the complaint, and argued that the suit was in
effect a suit against the United States which had not given its consent to be sued. The
defendants stated that there were immune from suit under the RP-US Military Bases
Agreement for acts they did in performing their official functions. The motion to dismiss
was denied by the trial court.

ISSUE:

Are the defendants right in invoking the State’s immunity from suit for acts done by
them in the performance of their official duties?

HELD:

USA v. Guinto. The Supreme Court ruled that the barbershop concessions granted by
the United States government are commercial enterprises operated by private persons
and are not agencies of the United States Armed Forces. All the barbershop
concessionaires were under the terms of their contracts and were required to remit
fixed commissions to the United States government. Thus, the petitioners cannot plead
any immunity from the complaint filed by the private respondents. The Court though
could not directly resolve the claims against the defendants because the evidence of
the alleged irregularity in the grant of the barbershop concessions is lacking. This
means that the Court must receive the evidence first so it can later determine if the
plaintiffs are entitled to the relief they seek.
USA v. Rodrigo. The restaurant services offered at the John Hay Air Station is of the
nature of a business enterprise undertaken by the United States government in its
proprietary capacity. Thus, the petitioners cannot invoke the doctrine of state immunity
to justify the dismissal of the damage suit against them by Genove even if it is
established that they were acting as agents of the United States when they
investigated and later dismissed Genove. Not even the United States government itself
can claim such immunity because by entering into an employment contract with
Genove, it impliedly divested itself of its sovereign immunity from suit. But still, the
Court dismissed the complaint against the petitioners since, while suable, the
petitioners were found to be not liable. A thorough investigation established beyond
doubt that Genove had in fact polluted the soup stock with urine.

USA v. Ceballos. The court found that the petitioners were only exercising their official
functions when they conducted the buy-bust operation. The petitioners were connected
with the Air Force Office of Special Investigators and were assigned to prevent the
distribution, possession and use of prohibited drugs and to prosecute those guilty of
such acts. As such, the petitioners were not acting in their private or unofficial capacity
when they apprehended and later testified against the complainant. For discharging
their duties as agents of the United States, they cannot be directly prosecuted for acts
imputable to their principal which has not given its consent to be sued.

USA v. Vergara. The Supreme Court found the factual allegations in this case
contradictory and recommended a closer study of what actually happened to the
plaintiffs. The Court found the record scant of information to indicate if the defendants
were really discharging their official duties or had actually exceeded their authority
when the incident in question occurred. The Court then could not directly decide this
case and ruled that the required inquiry must first be made by the lower court to assess
and resolve the conflicting claims of the parties based on the evidence yet to be
presented at the trial. The Court will determine, if it is still necessary, if the doctrine of
state immunity is applicable only after the determination of what capacity the
petitioners were acting at the time of the incident in question

PERPETUAL HELP CREDIT COOPERATIVE, INC. (PHCCI) v. BENEDICTO

FABURADA G.R. No. 121948. October 8, 2001
 SANDOVAL-GUTIERREZ, J.:

JURISDICTION OF LABOR ARBITER

DOCTRINE:
The dispute is about payment of wages, overtime pay, rest day and termination of
employment. Under Art. 217 of the Labor Code, these disputes are within the original
and exclusive jurisdiction of the Labor Arbiter.

FACTS:

Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay, private
respondents, filed a complaint against petitioner, with the Arbitration Branch, DOLE for
illegal dismissal, premium pay on holidays and rest days, separation pay, wage
differential, moral damages, and attorneys fees.
Petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no
employer-employee relationship between them as private respondents are all
members and co-owners of the cooperative and they have not exhausted the remedies
provided in the cooperative by-laws. Petitioner filed a supplemental motion to dismiss
alleging that Article 121 of R.A. No. 6939 or the Cooperative Development Authority
Law which took effect on March 26, 1990, requires conciliation or mediation within the
cooperative before a resort to judicial proceeding.

LA RULING: The Labor Arbiter denied petitioner's motion to dismiss, holding that the
case is impressed with employer-employee relationship and that the law on
cooperatives is subservient to the Labor Code.

NLRC RULING: NLRC affirmed the Labor Arbiter's decision

CA RULING: The appellate court denied the petition and affirmed the NLRC resolution
with some modifications, thus: 1) The private respondents cannot be reinstated, due to
their acceptance of the separation pay offered by the petitioner; 2) The private
respondents are entitled to their full back wages; and, 3) The amount of the separation
pay received by private respondents from petitioner shall not be deducted from their
full back wages.

ISSUE: Does the LA have jurisdiction over the case?

SC RULING:
 YES. As aptly stated by the Solicitor General in his comment, P.D. 175
(strengthening the Cooperative Movement) does not provide for a grievance machinery
where a dispute or claim may first be submitted. LOI 23 refers to instructions to the
Secretary of Public Works and Communications to implement immediately the
recommendation of the Postmaster General for the dismissal of some employees of
the Bureau of Post. Obviously, this LOI has no relevance to the instant case.
Article 121 of Republic Act No. 6938 (Cooperative Code of the Philippines) provides
the procedure how cooperative disputes are to be resolved, thus:

ART. 121. Settlement of Disputes.- Disputes among members, officers, directors, and
committee members, and intra-cooperative disputes shall, as far as practicable, be
settled amicably in accordance with the conciliation or mediation mechanisms
embodied in the bylaws of the cooperative, and in applicable laws.
Should such a conciliation/mediation proceeding fail, the matter shall be settled in a
court of competent jurisdiction.

Complementing this Article is Section 8 of R.A. No. 6939 (Cooperative Development

Authority Law) which reads:
SEC. 8 Mediation and Conciliation.- Upon request of either or both parties, the
Authority shall mediate and conciliate disputes within a cooperative or between
cooperatives: Provided, That if no mediation or conciliation succeeds within three (3)
months from request thereof, a certificate of non-resolution shall be issued by the
Commission prior to the filing of appropriate action before the proper courts.

The above provisions apply to members, officers and directors of the cooperative
involved in disputes within a cooperative or between cooperatives.

There is no evidence that private respondents are members of petitioner PHCCI and
even if they are, the dispute is about payment of wages, overtime pay, rest day and
termination of employment. Under Art. 217 of the Labor Code, these disputes are
within the original and exclusive jurisdiction of the Labor Arbiter.

EX-BATAAN VETERANS SECURITY AGENCY, INC., (EBVSAI) v. THE SECRETARY

OF LABOR BIENVENIDO E. LAGUESMA
 G.R. No. 152396 November 20,
2007
 CARPIO, J.:
THE VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL
DIRECTOR CAN BE

EXERCISED EVEN WHERE THE INDIVIDUAL CLAIM EXCEEDS P5,000

DOCTRINE:

While it is true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction
to hear and decide cases where the aggregate money claims of each employee exceeds
P5,000.00, said provisions of law do not contemplate nor cover the visitorial and
enforcement powers of the Secretary of Labor or his duly authorized representatives.
Rather, said powers are defined and set forth in Article 128 of the Labor Code.

FACTS:

Private respondents are EBVSAI's employees who instituted a complaint for

underpayment of wages against EBVSAI before the Regional Office (RO) of DOLE.
Consequently, RO conducted a complaint inspection of EBVSAI’s Plant where several
labor law violations were noted. On the same day, the RO issued a notice of hearing
requiring EBVSAI and private respondents to attend. After the hearing, the Regional
Director (RD) ordered EBVSAI to pay Php 763,927.85 to the affected employees.
EBVSAI filed a motion for reconsideration and alleged that under Articles 129 and 217(6)
of the Labor Code, the Labor Arbiter, not the Regional Director, has exclusive and
original jurisdiction over the case because the individual monetary claim of private
respondents exceeds P5,000. RD denied the motion stating that, pursuant to RA 7730,
the limitations under Articles 129 and 217(6) of the Labor Code no longer apply to the
Secretary of Labor's visitorial and enforcement powers under Article 128(b). The
Secretary of Labor or his duly authorized representatives are now empowered to hear
and decide, in a summary proceeding, any matter involving the recovery of any amount
of wages and other monetary claims arising out of employer-employee relations at the
time of the inspection.
DOLE SECRETARY RULING: It affirmed the Director’s decision on the ground that
pursuant to RA 7730, the Court's decision in the Servando case is no longer controlling
insofar as the restrictive effect of Article 129 on the visitorial and enforcement power of
the Secretary of Labor is concerned.

CA RULING: affirmed DOLE Secretary ruling
 ISSUE: Whether the Secretary of Labor
or his duly authorized representatives have jurisdiction over the money
claims of private respondents which exceed P5,000?

SC RULING:
 YES. In Allied Investigation Bureau, Inc. v. Sec. of Labor, SC ruled that
while it is true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction
to hear and decide cases where the aggregate money claims of each employee exceeds
P5,000.00, said provisions of law do not contemplate nor cover the visitorial and
enforcement powers of the Secretary of Labor or his duly authorized representatives.
Rather, said powers are defined and set forth in Article 128 of the Labor Code (as
amended by R.A. No. 7730) thus: (b) Notwithstanding the provisions of Article[s] 129 and
217 of this Code to the contrary, and in cases where the relationship of employer-
employee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to [the
labor standards provisions of this Code and other] labor legislation based on the findings
of labor employment and enforcement officers or industrial safety engineers made in the
course of inspection.

However, if the labor standards case is covered by the exception clause in Article 128(b)
of the Labor Code, then the RD will have to endorse the case to the appropriate
Arbitration Branch of the NLRC. In order to divest the RD or his representatives of
jurisdiction, the following elements must be present: (a) that the employer contests the
findings of the labor regulations officer and raises issues thereon; (b) that in order to
resolve such issues, there is a need to examine evidentiary matters; and (c) that such
matters are not verifiable in the normal course of inspection. The rules also provide that
the employer shall raise such objections during the hearing of the case or at any time
after receipt of the notice of inspection results.

In this case, the RD validly assumed jurisdiction over the money claims of private
respondents even if the claims exceeded P5,000 because such jurisdiction was
exercised in accordance with Article 128(b) of the Labor Code and the case does not
fall under the exception clause. EBVSAI did not contest the findings of the labor
regulations officer during the hearing or after receipt of the notice of inspection results.
It was only in its supplemental motion for reconsideration before the RD that EBVSAI
questioned the findings of the labor regulations officer and presented documentary
evidence to controvert the claims of private respondents. But even if this was the case,
the RD and the Secretary of Labor still looked into and considered EBVSAI's
documentary evidence and found that such did not warrant the reversal of the order.
PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.) vs. SECRETARY OF
DOLE G.R. No. 179652 May 8, 2009
 TINGA, J.:

Doctrine:

The Department of Labor and Employment is fully empowered to make a determination

as to the existence of an employer-employee relationship in the exercise of its visitorial
and enforcement power.
FACTS:

Private respondent Jandeleon Juezan filed a complaint against petitioner before

(DOLE) Regional Office, for illegal deduction, nonpayment of service incentive leave,
13th month pay, premium pay for holiday and rest day and illegal diminution of
benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and
Philhealth. After summary investigation, DOLE found that private respondent was an
employee of petitioner, and was entitled to his money. Bombo Radyo appealed the
decision, but the DOLE dismissed the same. The Court of Appeals (CA) afirmed such
dismissal.
When the matter reached the Supreme Court, the CA decision was reversed and set
aside. The Court found that there was no employer-employee relationship between
Bombo Radyo and Juezan. It was held that while the DOLE may make a determination
of the existence of an employer-employee relationship, this function could not be co-
extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor
Code, as amended by RA 7730. The National Labor Relations Commission (NLRC)
was held to be the primary agency in determining the existence of an employer-
employee relationship. From this decision, the Public Attorney’s Ofice (PAO) filed a
Motion for Clariication of Decision (with Leave of Court). The PAO sought to clarify as
to when the visitorial and enforcement power of the DOLE can be considered as co-
extensive with the power to determine the existence of an employer-employee
relationship. The Court treated the Motion for Clarification as a second motion for
reconsideration, granting said motion and reinstating the petition.

ISSUE: Whether or not the Department of Labor and Employment has the power to
determine the existence of employer-employee relationship in its exercise of its
visitorial and its enforcement power.
RULING:

No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer- employee relationship. No procedure was laid down where
the DOLE would only make a preliminary inding, that the power was primarily held by
the NLRC. The law did not say that the DOLE would first seek the NLRC’s
determination of the existence of an employer-employee relationship, or that should
the existence of the employer-employee relationship be disputed, the DOLE would
refer the matter to the NLRC. The DOLE must have the power to determine whether or
not an employer-employee relationship exists, and from there to decide whether or not
to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as
amended by RA 7730.

The determination of the existence of an employer-employee relationship by the DOLE

must be respected. The expanded visitorial and enforcement power of the DOLE
granted by RA 7730 would be rendered nugatory if the alleged employer could, by the
simple expedient of disputing the employer- employee relationship, force the referral of
the matter to the NLRC. The Court issued the declaration that at least a prima facie
showing of the absence of an employer-employee relationship be made to oust the
DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence,
and it is the DOLE that will weigh it, to see if the same does successfully refute the
existence of an employer-employee relationship.

PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) vs. THE

SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN
 G.R. No.
179652 March 6, 2012

VELASCO, JR., J.:

DOCTRINE:
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power, subject to judicial
review, not review by the NLRC.
FACTS:
Jandeleon Juezan filed a complaint against Peoples Broadcasting Service (Bombo)
with the DOLE Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of
service incentive leave, 13th month pay, among others. After the conduct of summary
investigations, and after the parties submitted their position papers, the DOLE
Regional Director found that Juezan was an employee of Bombo, and was entitled to
his money claims. Bombo sought reconsideration of the Directors Order, but failed.
The Acting DOLE Secretary dismissed Bombo’s appeal. When the matter was brought
before the CA, where Bombo claimed that it had been denied due process, it was held
that Bombo was accorded due process as it had been given the opportunity to be
heard, and that the DOLE Secretary had jurisdiction over the matter, as the
jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the
DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No.
(RA) 7730.

SC reversed the CA Decision and the complaint against Bombo was dismissed. The
Court found that there was no employer-employee relationship between Bombo and
Juezan. It was held that while the DOLE may make a determination of the existence of
an employer-employee relationship, this function could not be co-extensive with the
visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as
amended by RA 7730. The NLRC was held to be the primary agency in determining
the existence of an employer-employee relationship. From this Decision, the Public
Attorneys Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court).
The PAO sought to clarify as to when the visitorial and enforcement power of the
DOLE be not considered as co-extensive with the power to determine the existence of
an employer-employee relationship. The SC revisits its former conclusion.

ISSUE: Whether DOLE can make a determination of the existence of employer-

employee relationship.
SC RULING:
 YES. No limitation in the law was placed upon the power of the DOLE to
determine the existence of an employer-employee relationship. No procedure was laid
down where the DOLE would only make a preliminary finding, that the power was
primarily held by the NLRC. The law did not say that the DOLE would first seek the
NLRC’s determination of the existence of an employer-employee relationship, or that
should the existence of the employer-employee relationship be disputed, the DOLE
would refer the matter to the NLRC. The DOLE must have the power to determine
whether or not an employer-employee relationship exists, and from there to decide
whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor
Code, as amended by RA 7730.

The determination of the existence of an employer-employee relationship by the DOLE

must be respected. The expanded visitorial and enforcement power of the DOLE
granted by RA 7730 would be rendered nugatory if the alleged employer could, by the
simple expedient of disputing the employer-employee relationship, force the referral of
the matter to the NLRC. If the DOLE makes a finding that there is an existing
employer-employee relationship, it takes cognizance of the matter, to the exclusion of
the NLRC. The DOLE would have no jurisdiction only if the employer-employee
relationship has already been terminated, or it appears, upon review, that no employer-
employee relationship existed in the first place.

If a complaint is brought before the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor legislation, and there is a finding by the
DOLE that there is an existing employer-employee relationship, the DOLE exercises
jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-
employee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed
with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is
properly with the Labor Arbiter, under Art. 217(3) of the Labor Code. If a complaint is
filed with the NLRC, and there is still an existing employer-employee relationship, the
jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.

SANTIAGO vs. CF SHARP CREW MANAGEMENT INC. G.R. No. 162419 July 10,
2007
 Tinga, J.:

Doctrine:

The jurisdiction of labor arbiters is not limited to claims arising from employer-employee
relationships. Under Section 10 of R.A. No. 8042 the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall also have the original and exclusive
jurisdiction to hear and decide, the claims arising xxx by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.

FACTS:
On 3 February 1998, Paul Santiago signed a new contract of employment with CF
Sharp Crew Mgmt., Inc., with the duration of nine (9) months. He was assured of a
monthly salary of US$515.00, overtime pay and other benefits. Santiago was to be
deployed on board the "MSV Seaspread" which was scheduled to leave the port of
Manila for Canada on 13 February 1998.

A week before the scheduled date of departure, Capt. Pacifico Fernandez, CF Sharp’s
Vice President, sent a fax to the captain of "MSV Seaspread telling the latter that he
received calls from various individuals about the possibility that Santiago may jump
ship in Canada like his brother did before him. On 9 February 1998, Santiago was thus
told that he would not be leaving for Canada anymore, but he was reassured that he
might be considered for deployment at some future date.
Consequently, Santiago filed a complaint for illegal dismissal, damages, and attorney's
fees against CF Sharp and its foreign principal. In defense, CF Sharp contends that
there is no employer-employee relationship between petitioner and respondent
because under the POEA Standard Contract, the employment contract shall
commence upon actual departure of the seafarer from the airport or seaport at the
point of hire. In the absence of an employer-employee relationship between the
parties, the claims for illegal dismissal, actual damages, and attorney’s fees should be
dismissed as the NLRC does not have jurisdiction over the same.
ISSUE: WON the failure of CF Sharp to deploy Santiago without a valid contract
entitles the latter to relief sought despite the non-commencement of the employer-
employee relationship?

SC RULING:
 YES. The jurisdiction of labor arbiters is not limited to claims arising
from employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers
Act), provides that the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide, the claims
arising xxx by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.

Here, since the present petition involves the employment contract entered into by
petitioner for overseas employment, his claims are cognizable by the labor arbiters of
the NLRC.

Even before the start of any employer-employee relationship, contemporaneous with

the perfection of the employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of action against the erring
party. Thus, if the reverse had happened, that is the seafarer failed or refused to be
deployed as agreed upon, he would be liable for damages.

VICTOR METEORO v. CREATIVE CREATURES, GR No. 171275, 2009-07-13

Facts:

Respondent is a domestic corporation engaged in the business of producing,

providing, or procuring the production of set designs and set construction services

On the other hand, petitioners were hired by respondent on various dates as artists,
carpenters and welders.

petitioners filed their respective complaints for non-payment of night shift differential
pay, overtime pay, holiday pay, 13th month pay, premium pay for Sundays and/or rest
days, service incentive leave pay, paternity... leave pay, educational assistance, rice
benefits, and illegal and/or unauthorized deductions from salaries against respondent,
before the Department of Labor and Employment

In its position paper, respondent argued that the DOLE-NCR had no jurisdiction over
the complaint of the petitioners because of the absence of an employer-employee
relationship. It added that petitioners were free-lance individuals, performing special
services with skills and... expertise

DOLE Regional Director Maximo Baguyot Lim issued an Order... directing respondent
to pay petitioners

The Regional Director sustained petitioners' claim on the existence of an employer-

employee relationship using the determinants set forth by the Labor Code, specifically,
the elements of control and supervision, power of dismissal, payment of wages, and
the selection and... engagement of employees. He added that since the petitioners had
worked for more than one year doing the same routine work, they were regular
employees with respect to the activity in which they were employed.
respondent elevated the matter to the Court of Appeal... s... the instant petition is
GRANTED. For lack of jurisdiction... the Orders... issued by respondent Secretary are
hereby declared NULL and VOID.

Issues:

Whether or not the Court of Appeals committed an error when it ruled that the instant
case falls within the exception clause of Article 128 (b) of the Labor Code... whether or
not petitioners were independent contractors/project employees/free lance workers

Ruling:

We sustain the appellate court's conclusion that the instant case falls within the
exclusive jurisdiction of the NLRC.

The DOLE Secretary and her authorized representatives, such as the DOLE-NCR
Regional Director, have jurisdiction to enforce compliance with labor standards laws
under the broad visitorial and enforcement powers conferred by Article 128 of the
Labor Code

The last sentence of Article 128 (b) of the Labor Code, otherwise known as the
"exception clause," provides an instance when the Regional Director or his...
representatives may be divested of jurisdiction over a labor standards case.

Under prevailing jurisprudence, the so-called "exception clause" has the following
elements, all of which must concur:

(a) that the employer contests the findings of the labor regulations officer and raises
issues thereon;

(b) that in order to resolve such issues, there is a need to examine evidentiary matters;
and

(c) that such matters are not verifiable in the normal course of inspection.

In the present case, the CA aptly applied the "exception clause."

To resolve the issue raised by respondent, that is, the existence of an employer-
employee relationship, there is need to examine evidentiary matters.

Some businessmen, however, try to avoid an employer-employee relationship from

arising in their enterprises, because that juridical relation spawns obligations
connected with workmen's compensation, social security, medicare, termination pay,
and unionism.
The most important index of an... employer-employee relationship is the so-called
"control test," that is, whether the employer controls or has reserved the right to control
the employee, not only as to the result of the work to be done, but also as to the means
and methods by which the same is to be... accomplished.

the petition is DENIED for lack of merit.

PHILIPPINE AIRLINES v. AIRLINE PILOTS ASSOCIATION OF PHILIPPINES, GR No.

200088, 2018-02-26

Facts:

The present case arose from a labor dispute between petitioner Philippine Airlines, Inc.
(PAL) and respondent Airline Pilots' Association of the Philippines (ALPAP), a duly
registered labor organization and the exclusive bargaining agent of all commercial
pilots of PAL.

9 December 1997, ALPAP filed with the Department of Labor and Employment (DOLE)
a notice of strike alleging that PAL committed unfair labor practice.

23 December 1997, the Secretary of DOLE (SOLE) assumed jurisdiction over the
dispute and thereafter prohibited ALPAP from staging a strike and committing any act
that could exacerbate the dispute

SOLE, ALPAP staged a strike on 5 June 1998. A return-to-work order[7] was issued by
the SOLE on 7 June 1998, but ALPAP defied the same and went on with their strike.

SOLE issued a resolution... which declared the illegality of the strike staged by ALPAP
and the loss of employment status of the officers who participated in the strike.

22 April 2003, or almost eight (8) months :from the finality of the Court's 10 April 2002
Resolution, PAL filed before the LA a complaint[12] for damages against ALPAP, as
well as some of its officers and members.

PAL alleged,... that on 6 June 1998, the second day of the illegal strike... its striking
pilots abandoned three (3) PAL aircraft... bound for Paris, France, at Bangkok,
Thailand;... k, Thailand;... bound for Manila, at San Francisco, California, U.S.A.

Because of the... abandonment of the said flights, its passengers were stranded, and
rendered PAL liable for violation of its contract of carriage.

PAL was compelled to incur expenses by way of hotel accommodations, meals for the
stranded passengers, airport parking fees, and other operational expenses.
its operation was crippled by the illegal strike resulting in several losses from ticket
refunds, extraordinary expenses to cope with the shutdown situation, and lost income
from the cancelled domestic and international flights.

it suffered actual damages in the amount of P731,078,988.59.

LA dismissed PAL's complaint.

it had no jurisdiction to resolve the issue on damages.

It noted that the SOLE did not certify the controversy for compulsory arbitration to the
NLRC nor in any occasion did the parties agree to refer the same to voluntary
arbitration under Article 263(h) of the Labor Code.

jurisdiction to resolve all issues arising from the labor dispute, including the claim for
damages arising from the illegal strike, was left with the SOLE to the exclusion of all
other fora.

PAL's cause of action had already been barred by prescription.

PAL's 22 April 2003 complaint was filed beyond the 3-year prescriptive period set forth
in Article 291 of the Labor Code.

NLRC affirmed with modification the LA's 22 April 2008 decision.

the reliefs prayed for by PAL should have been ventilated before the regular courts
considering that they are based on the tortuous acts allegedly committed by the
respondents.

constitutes breach of contractual obligation which is intrinsically a civil dispute.

CA partially granted PAL's petition.

The appellate court concurred with the NLRC's opinion that exclusive jurisdiction over
PAL's claim for damages lies with the regular courts and not with the SOLE.

Stated differently, causes of action based on an obligation or duty not provided under
the labor laws are beyond the SOLE's jurisdiction.

those issues that arise from the assumed labor dispute, which has a direct causal
connection to the employer-employee relationship between the parties, will fall under
the jurisdiction of the SOLE.

Issues:
WHETHER THE NLRC AND THE LABOR ARBITER HAVE JURISDICTION OVER
PAL'S CLAIMS AGAINST THE RESPONDENTS FOR DAMAGES INCURRED AS A
CONSEQUENCE OF THE LATTER'S ACTIONS DURING THE ILLEGAL STRIKE.

Ruling:

partially meritorious.

Labor tribunals have jurisdictionover actions for damages arisingfrom a labor strike.

Article 217 [now Article 224] of the Labor Code, as amended by Section 9 of R.A. No.
6715, the LA and the NLRC have jurisdiction to resolve cases involving claims for
damages arising from employer-employee relationship

ART. 217. Jurisdiction of Labor Arbiters and the Commission-- (a) Except as otherwise
provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether agricultural or
nonagricultural

Unfair labor practice cases;Termination disputes;If accompanied with a claim for

reinstatement, those cases that workers may file involving wages, rates of pay, hours
of work and other terms and conditions of employmentClaims for actual, moral,
exemplary and other forms of damages arising from employer-employee
relations;Cases arising from any violation of Article 264 of this Code including
questions involving the legality of strikes and lockouts; andExcept claims for
Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement.

[emphases supplied]

It is settled, however, that not every controversy or money claim by an employee

against the employer or vice-versa falls within the jurisdiction of the labor arbiter.

Intrinsically, civil disputes, although involving the claim of an employer against its
employees, are cognizable by regular courts.

To determine whether a claim for damages under paragraph 4 of Article 217 is properly
cognizable by the labor arbiter, jurisprudence has evolved the "reasonable connection
rule" which essentially states that the claim for damages must have reasonable causal
connection with any of the claims provided for in that article.
Only if there is such a connection with the other claims can the claim for damages be
considered as arising from employer-employee relations

Absent such a link, the complaint will be cognizable by the regular courts.

elevant connection whatsoever to the employer-employee relationship between the

parties.

Thus, the claim is within the exclusive jurisdiction of the regular courts.

Article 217 of the Labor Code does not include a claim for damages wherein the
employer-employee relation is merely incidental, and where the claim is largely civil in
character.

The appellate court is mistaken.

Court agrees with PAL that its claim for damages has reasonable connection with its
employer-employee relationship with the respondents.

PAL's cause of action is not grounded on mere acts of quasi-delict. The claimed
damages arose from the illegal strike and acts committed during the same which were
in tum closely related and intertwined with the respondents' allegations of unfair labor
practices against PAL

CA made the following statements:

The damages caused by the willful act of the striking pilots in abandoning their
aircrafts, together with the passengers and cargo, which resulted in injury to petitioner's
business is recoverable under civil law.

1. The complaint for damages arising from the illegal strike claimed by petitioner
lies not within the jurisdiction of the DOLE Secretary or the Labor Arbiter but with
the regular courts; xxx

Since the loss and injury from which PAL seeks compensation have reasonable causal
connection with the alleged acts of unfair labor practice, a claim provided for in Article
217 of the Labor Code, the question of damages becomes a labor controversy and is
therefore an employment relationship dispute

. GILDA G. LUNZAGA v. ALBAR SHIPPING AND TRADING CORP. AND/OR AKIRA

KATO, AND DARWIN, VENUS, ROMEO ULYSSES, MARIKIT ODESSA, ALL
SURNAMED LUNZAGA (Lunzaga Siblings)
 G.R. No. 200476 April 18, 2012
RELAXATION OF THE TECHNICAL RULES (1-DAY LATE IN FILING AN APPEAL)
DOCTRINE:
It has been said this time and again that the perfection of an appeal within the period
fixed by the rules is mandatory and jurisdictional. But, it is always in the power of this
Court to suspend its own rules, or to except a particular case from its operation,
whenever the purposes of justice require it. Strong compelling reasons such as serving
the ends of justice and preventing a grave miscarriage thereof warrant the suspension
of the rules.

FACTS:

Romeo Lunzaga was a seaman working for Albar Shipping. On June 11, 2008, Romeo
was assigned as Chief Engineer on board Albar's Philippine vessel MV Lake Aru. One
month later, Romeo suffered a heart attack and was repatriated to the Philippines only
to die on September 5, 2008.

Sometime in early 2009, Gilda, claiming to be the surviving spouse of Romeo, filed
with the NLRC a complaint against Albar Shipping for payment of death benefits,
damages and attorney's fees. It should be noted that Gilda was the designated heir in
Romeo's Overseas Filipino Worker Verification Sheet and PhilHealth Information
Sheet. The Lunzaga sibling, children of Romeo from his first marriage that was
judicially declared null and void, opposed the complaint through a complaint-in-
intervention. The Lunzaga siblings claimed that Gilda is not entitled to the death
benefits of Romeo, as she had a subsisting marriage when she married him. They
claim that her marriage with Romeo was, therefore, bigamous. . During the mandatory
conferences of the parties before the Labor Arbiter, Albar Shipping signified its
willingness to pay Romeo's death benefits in the amount of USD 55,547.44. However,
Gilda and the Lunzaga siblings could not agree as to the sharing of the benefits.

LA RULING:

The Labor Arbiter issued an Order temporarily dismissing the complaint and directing
the parties to file their case with the regular courts.
Gilda appealed to the NLRC, however, the same was made one day past the 10-day
period for filing an appeal from the decision of the Labor Arbiter

NLRC RULING: DISMISSED for filing beyond the regalamentary period.

CA RULING: AFFIRMED the decision of the NLRC
 The CA ruled that despite the fact
that the appeal to the NLRC was filed only one day beyond the reglementary period,
Gilda failed to present any reason for the liberal application of the rule on filing of
appeals.
ISSUE: Did the NLRC and the CA err in not giving due course to the appeal due to a
one (1)-day delay of its filing?

SC RULING:
 YES. Considering that the issue on whether the heirs of Romeo are
entitled to receive his death benefits from Albar Shipping properly falls under the
jurisdiction of the LA, the NLRC and the CA should have had relaxed the rigid
application of the rules of procedure to afford the parties the opportunity to fully
ventilate their cases on the merits. This is in line with the time honored principle that
cases should be decided only after giving all parties the chance to argue their causes
and defenses. Technicality and procedural imperfections should thus not serve as
bases of decisions. In that way, the ends of justice would be better served. For indeed,
the general objective of procedure is to facilitate the application of justice to the rival
claims of contending parties, bearing always in mind that procedure is not to hinder but
to promote the administration of justice.
Verily, Albar Shipping is liable to the heirs of Romeo for the amount of USD 55,547.44.
Albar hereby is ordered to deposit this amount in an escrow account under the control
of the NLRC in order to protect the interests of Romeo's heirs. The parties claiming to
be the beneficiaries of Romeo are directed to file the appropriate action with a trial
court.

69. AMECOS INNOVATIONS, INC. and ANTONIO F. MATEO v. ELIZA R. LOPEZ

G.R. No.178055 July 2, 2014

LA HAS JURISDICTION OVER CASES INVOLVING REIMBURSEMENT OF SSS

CONTRIBUTION
FACTS:
 Amecos is a corporation engaged in the business of selling assorted
products. In 2003, a complaint was filed by the SSS against Amecos for an alleged
delinquency in the remittance of SSS contributions and penalty liabilities in violation of
Section 22(a) and 22(d) in relation to Section 28(e) of the SSS law, as amended.
By way of explanation, Amecos claimed that it hired Lopez as Marketing Assistant to
promote its products; that upon hiring, Lopez refused to provide Amecos with her SSS
Number and to be deducted her contributions; that on the basis of the foregoing,
Amecos no longer enrolled Lopez with the SSS and did not deduct her corresponding
contributions up to the time of her termination in February 2002.
Amecos eventually settled its obligations with the SSS; consequently, SSS filed a
Motion to Withdraw Complaint, which was approved by the Office of the City
Prosecutor.
Thereafter, Amecos sent a demand letter to Lopez for P27,791.65 representing her
share in the SSS contributions and expenses for processing, but to no avail. Thus,
Amecos filed a complaint for sum of money and damages against Lopez before the
MeTC.
Lopez filed her Answer with Motion to Dismiss claiming, among others, that the regular
courts do not have jurisdiction over the instant case as it arose out of their employer-
employee relationship.

MeTC RULING: DISMISSED for lack of jurisdiction

RTC RULING: AFFIRMED the MeTC

CA RULING: AFFIRMED the RTC

ISSUE: Does the LA have jurisdiction over cases involving the reimbursement of SSS
contribution paid by the Amecos in behalf of Lopez?

SC RULING:
 YES. The LA has original and exclusive jurisdiction over the matter,
since the same necessarily flowed from the employer-employee relationship between
Amecos and Lopez. In this connection, it is noteworthy to state that "the Labor Arbiter
has jurisdiction to award not only the reliefs provided by labor laws, but also damages
governed by the Civil Code."
At the same time, it cannot be assumed that since the dispute concerns the payment of
SSS premiums, Amecos’ claim should be referred to the Social Security Commission
(SSC). As far as SSS is concerned, there is no longer a dispute with respect to
Amecos’ accountability to the System; Amecos already settled their pecuniary
obligations to it. Since there is no longer any dispute regarding coverage, benefits,
contributions and penalties to speak of, the SSC need not be unnecessarily dragged
into the picture. Besides, it cannot be made to act as a collecting agency for
petitioners’ claims against the respondent; the Social Security Law should not be so
interpreted, lest the SSC be swamped with cases of this sort.
At any rate, the complaint shall be dismissed for lack of cause of action. Since Amecos
did not remit the full SSS contributions of Lopez, the latter was never covered by and
protected under the System. If she was never covered by the System, certainly there is
no sense in making her answerable for the required contributions during the period of
her employment. And it follows as a matter of consequence that claims for other
damages founded on the foregoing non-existent cause of action should likewise fail.

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant

General Manager
ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA v.
HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA,
WILFREDO CABAÑAS &
FULGENCIO LEGO

G.R. No. 89621 September 24, 1991

CRUZ, J.:
DOCTRINE: Not every controversy involving workers and their employers can be
resolved only by the labor arbiters. This will be so only if there is a "reasonable causal
connection" between the claim asserted and employee-employer relations to put the
case under the provisions of Article 217. Absent such a link, the complaint

will be cognizable by the regular courts of justice in the exercise of their civil and
criminal jurisdiction.
FACTS: The private respondents were employees of the Pepsi who were suspected of
complicity in the irregular disposition of empty Pepsi Cola bottles. Pepsi filed a criminal
complaint for theft against them but this was later withdrawn and substituted with a
criminal complaint for falsification of private documents. After a preliminary
investigation, the complaint was dismissed. The dismissal was affirmed by the Office of
the Provincial Prosecutor. Meantime, allegedly after an administrative investigation, the
private respondents were dismissed by the petitioner

company As a result, they lodged a complaint for illegal dismissal with NLRC in
Tacloban City.

NLRC RULING: mandated reinstatement with damages.

In addition, they instituted in the Regional Trial Court of Leyte, a separate civil
complaint against the petitioners

for damages arising from what they claimed to be their malicious prosecution.

Pepsi moved to dismiss the civil complaint on the ground that the trial court had no
jurisdiction over the case

because it involved employee-employer relations.

RTC RULING: the respondent judge, acting on the motion for reconsideration,
reinstated the complaint, saying it

was "distinct from the labor case for damages now pending before the labor courts.

Pepsi invoke Article 217 of the Labor Code and a number of decisions of this Court to
support their position that

the private respondents civil complaint for damages falls under the jurisdiction of the
labor arbiter.

ISSUE: Whether the RTC has jurisdiction over the case?

1.)

2.)

3.)
4S (A.Y. 2015-2016)

That in all things, God may be glorified!

102

SC RULING:

YES. Not every controversy involving workers and their employers can be resolved
only by the labor arbiters. This
will be so only if there is a "reasonable causal connection" between the claim asserted
and employee-employer relations to put the case under the provisions of Article 217.
Absent such a link, the complaint will be cognizable

by the regular courts of justice in the exercise of their civil and criminal jurisdiction.
EXAMPLES OF CASES:

In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First Instance of

Rizal a civil complaint for damages against their employer for slanderous remarks
made against them by the company president. Theirs is a simple action for damages
for tortious acts allegedly committed by the defendants. Such being the case, the
governing statute is the Civil Code and not the Labor Code. It results that the

orders under review are based on a wrong premise.

In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for damages for
alleged violation by the defendant of an "Agreement for a Course of Conversion
Training at the Expense of Singapore Airlines Limited. Petitioner seeks protection
under the civil laws and claims no benefits under the Labor Code.
The primary relief sought is for liquidated damages for breach of a contractual
obligation.

In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the claim of
the plaintiff against its sales manager for payment of certain accounts pertaining to his
purchase of vehicles and automotive

parts, repairs of such vehicles, and cash advances from the corporation was properly
cognizable by the Regional Trial Court because "although a controversy is between an
employer and an employee, the

Labor Arbiters have no jurisdiction if the Labor Code is not involved."

The latest ruling on this issue is found in San Miguel Corporation v. NLRC. That case
involved a claim of an employee for a P60,000.00 prize for a proposal made by him
which he alleged had been accepted and

implemented by the defendant corporation.

Where the claim to the principal relief sought is to be resolved not by reference to the
Labor Code or other labor relations statute or a collective bargaining agreement but by
the general civil law, the jurisdiction over the dispute belongs to the regular courts of
justice and not to the Labor Arbiter and the NLRC. While paragraph 3 above refers to
"all money claims of workers," it is not necessary to suppose that the entire universe of
money claims that might be asserted by workers against their employers has been
absorbed into the original and exclusive
jurisdiction of Labor Arbiters.

The case now before the Court involves a complaint for damages for malicious
prosecution which was filed with the Regional Trial Court of Leyte by the employees of
the defendant company. It does not appear that there is a "reasonable causal
connection" between the complaint and the relations of the parties as employer and
employees. The complaint did not arise from such relations and in fact could have
arisen independently of an employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the employees are alleging is
that the petitioners acted with bad faith when they filed the criminal complaint which the
Municipal Trial Court said was intended "to harass the poor employees" and the
dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to
establish even a slightest probability that all the respondents herein have committed
the crime imputed against them." This is a matter which the labor arbiter has

no competence to resolve as the applicable law is not the Labor Code but the Revised
Penal Code.