LABOR LAW 1

SUMMARY OF CASES
REVIEWER
CASES TOPIC RULING
1. Maternity Children’s Hospital v. Labor Standards Labor standards refer to the minimum requirements prescribed by existing laws,
Secretary of Labor rules, and regulations relating to wages, hours of work, cost of living allowance
and other monetary and welfare benefits, including occupational, safety, and
health standards.

The Regional Director had jurisdiction over the case. Executive Order No. 111,
amending Article 128(b) of the Labor Code, authorizes a Regional Director to
order compliance by an employer with labor standards provisions of the Labor
Code and other legislation.

Social justice legislation, to be truly meaningful and rewarding to our workers,

must not be hampered in its application by long-winded arbitration and litigation.

The Regional Director correctly applied the award with respect to

those employees who signed the complaint, as well as those who did not sign the
complaint, but were still connected with the hospital at the time the complaint was
filed.

The petition was DISMISSED, as regards all persons still employed in the hospital
at the time of the filing of the complaint, but GRANTED as regards those
employees no longer employed at that time.

2. Sameer Overseas Placement Labor Relations It is an elementary rule in the law on labor relations that even a probationary
Agency Inc. v. NLRC employee is entitled to security of tenure. 9 A probationary employee can not be
terminated, except for cause. 10

In this case, the employment contract was for a definite period of one (1) year,
with six (6) months probationary period. After only eleven days of work, the
employer dismissed private respondent without just cause.

"Under Article 281 of the Labor Code, a probationary employee may be terminated
on two grounds: (a) for just cause or (b) when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer
to the employee at the time of his engagement." 11 Under the contract of
employment, the employer may terminate the services of private respondent
during the probationary period for "being found losing ability to work." However,
"the power of the employer to terminate a probationary employment contract is
subject to limitations. First, it must be exercised in accordance with the specific
requirements of the contract. Secondly, the dissatisfaction of the employer must be
 real and in good faith, not feigned so as to circumvent the contract or the law; and
thirdly, there must be no unlawful discrimination in the dismissal." 12 In
termination cases, the burden of proving just or valid cause for dismissing an
employee rests on the employer. 13 In this case, petitioner was not able to present
convincing proof establishing respondent Endozo's alleged incompetence. "Due
process dictates that an employee be apprised beforehand of the conditions of his
employment and of the terms of advancement therein." 14 "Precisely, implicit in
Article 281 of the Code is the requirement that reasonable standards be previously
made known by the employer to the probationary employee at the time of his
engagement." 15 Thus, the termination of respondent Endozo's employment was
not justified 16 and hence, illegal. 17 Consequently, private respondent is entitled
to payment of her salaries corresponding to the unexpired portion of her contract
of employment for a period of one year.

3. People v. Vera Police Power as the Basis of the Labor Law We hold that the last part of section 1 of Act No. 2549, as last amended by section
1 of Act No. 3958, is valid, and we reverse the appealed order with instructions to
the lower court to proceed with the trial of the criminal case until it is terminated,
without special pronouncement as to costs in this instance.

We do not believe that this constitutional provision has been correctly applied in
this case;

Its language refers only to the employer who, being able to make payment, shall
abstain or refuse to do so, without justification and to the prejudice of the laborer
or employee;

An employer so circumstanced is not unlike a person who defrauds another, by

refusing to pay his just debt; deceit or fraud is the essential element constituting
the offense;
Police power is the power inherent in a government to enact laws, within
constitutional limits, to promote the order, safety, health, morals, and general
welfare of society;

PURPOSE OF LAW: is to suppress possible abuses on the part of

employers who hire laborers or employees without paying them the salaries agreed
upon for their services, thus causing them financial difficulties;

WITHOUT THIS LAW: laborers would be compelled to institute civil actions

which is more costly.

4. ECOP v. NWCP Labor Code It is the Court's thinking, reached after the Court's own study of the Act, that the
Act is meant to rationalize wages, that is, by having permanent boards to decide
wages rather than leaving wage determination to Congress year after year and law
after law. The Court is not of course saying that the Act is an effort of Congress to
pass the buck, or worse, to abdicate its duty, but simply, to leave the question of
wages to the expertise of experts. As Justice Cruz observed, "[w]ith the

5. Manila Electric Company v. NLRC Construction in Favor of Labor
Interpretation and Construction of Labor
Laws
proliferation of specialized activities and their attendant peculiar problems, the
national legislature has found it more necessary to entrust to administrative
agencies the power of subordinate legislation' as it is caned."23
The Labor Code defines "wage" as follows:
"Wage" paid to any employee shall mean the remuneration or earnings,
however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or commission basis,
or other method of calculating the same, which is payable by an employer
to an employee under a written or unwritten contract of employment for
work done or to be done, or for services rendered or to be rendered and
includes the fair and reasonably value, as determined by the Secretary of
Labor, of board, lodging, or other facilities customarily furnished by the
employer to the employee. "Fair and reasonable value" shall not include
any profit to the employer or to any person affiliated with the employer. 24
The concept of "minimum wage" is, however, a different thing, and certainly, it
means more than setting a floor wage to upgrade existing wages, as ECOP takes
it to mean. "Minimum wages" underlies the effort of the State, as Republic Act
No. 6727 expresses it, "to promote productivity-improvement and gain-sharing
measures to ensure a decent standard of living for the workers and their families;
to guarantee the rights of labor to its just share in the fruits of production; to
enhance employment generation in the countryside through industry dispersal; and
to allow business and industry reasonable returns on investment, expansion and
growth,"25 and as the Constitution expresses it, to affirm "labor as a primary social
economic force."26 As the Court indicated, the statute would have no need for a
board if the question were simply "how much". The State is concerned, in addition,
that wages are not distributed unevenly, and more important, that social justice is
subserved.
It is found out that private respondent is working with Meralco for over 20 years
and without record of any previous derogatory record and with two
commendations for honesty There is no question that herein respondent is guilty
of breach of trust but because of its previous record, the severe penalty of dismissal
shall not be proper, it was also found out that it is the Power Sales Division’s fault.
The court also ruled “As repeatedly been held by this Court, an employer cannot
legally be compelled to continue with the employment of a person who admittedly
was guilty of breach of trust towards his employer and whose continuance in the
service of the latter is patently inimical to its interest. The law in protecting the
rights of the laborers, authorized neither oppression nor self-destruction of the
employer.”
 However, taking into account private respondent’s `twenty-three (23) years of
service which undisputedly is unblemished by any previous derogatory record’ as
found by the respondent Commission itself, and since he has been under
preventive suspension during the pendency of this case, in the absence of a
showing that the continued employment of private respondent would result in
petitioner’s oppression or self destruction, We are of the considered view that his
dismissal is a drastic punishment.

The power to dismiss is the normal prerogative of the employer. An employer,

generally, can dismiss or lay-off an employee for just and authorized causes
enumerated under Articles 282 and 283 of the Labor Code. However, the right of
an employer to freely discharge his employees is subject to regulation by the State,
basically in the exercise of its paramount police power. This is so
because the preservation of the lives of the citizens is a basic duty of the State,
more vital than the preservation of corporate profits

Further, in carrying out and interpreting the Labor Code’s provisions and its
implementing regulations, the workingman’s welfare should be the primordial and
paramount consideration. This kind of interpretation gives meaning and substance
to the liberal and compassionate spirit of the law as provided for in Article 4 of the
New Labor Code which states that "all doubts in the implementation and
interpretation of the provisions of the Labor Code including its implementing rules
and regulations shall be resolved in favor of labor"

6. China Banking Corp. v. Borromeo Right to Prescribe Rules Since the respondent had already resigned, the only valid recourse of the petitioner
bank was to withhold the separation pay.

It was held that the respondent was not deprived of due process
(a) The memorandum served to the respondent served as a valid
investigation
(b) Since the LA and the NLRC are administrative bodies, are not bound by
the technical niceties of the law and procedure and the rules obtaining in
courts of law.

7. Roldan v. Cebu Portland Cement Right to Transfer or Discharge Employees

Co.
8. Luzon Development Bank v. Non-Applicability to Government YES. The decision or award of the voluntary arbitrator or panel of arbitrators IS
Association of Luzon Development Agencies appealable to the Court of Appeals. The jurisdiction conferred by law on a
Bank Employees voluntary arbitrator or a panel of such arbitrators is limited compared to the
original jurisdiction of the labor arbiter and the appellate jurisdiction of the
National Labor Relations Commission (NLRC).

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that
the Court of Appeals shall exercise:
 (B) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the Securities and Exchange
Commission…

In Oceanic Bic Division (FFW), et al. v. Romero, et al., the

Court had the chance to rule that voluntary arbitrators, by the nature of her
functions, acts in a quasi-judicial capacity.

The terms governmental "agency" or "instrumentality" are synonymous in the

sense that either of them is a means by which a government acts, or by which a
certain government act or function is performed.

The word "instrumentality," with respect to a state, contemplates an authority to

which the state delegates governmental power for the performance of a state
function.

Assuming arguendo that voluntary arbitrators may not be considered as a quasi-

judicial agency, they still fall within the concept of a “quasi-judicial
instrumentality.”

Voluntary arbitrator no less performs a state function pursuant to a governmental

power delegated to him under the provisions in the Labor Code.

9. Republic v. CA In Jesus P. Perlas, Jr. vs. People (G.R. Nos. 84637-39, August 2, 1989), it was
ruled that the NPDC was a government agency, not a government-owned or
controlled corporation. As a government agency, NPDC is covered by civil service
rules and regulations. Its employees may form unions, but there are no laws
allowing them to strike.

Both the RTC and the CA erred in deciding that the case was cognizable by the
Department of Labor and Employment. It should have been filed in the Public
Sector – Labor Management Council instead.

10. Wallem Shipping Inc. v. Ministry of Art. 20 National Seamen Board Yes, Wallem Shipping is liable. The Supreme Court ruled that there is no logic in
Labor the statement made by the Secretariat's Hearing Officer that the private
respondents are liable for breach of their employment contracts for accepting
salaries higher than their contracted rates;

It is the petitioner who is guilty of breach of contract when they dismissed the
respondents without just cause and prior to the expiration f the employment
contracts;

Petitioner voluntarily entered into the Special Agreement with ITF and by virtue
thereof the crew men were actually given their salary differentials in view of the
new rates; and

11. Sameer Overseas Placement v.
Cabiles
12. Maunlad Trans. Inc. v. Camoral
13. Kestrel Shipping Co., Inc. v. Munar
Protection of OFWs; Lex loci contactus
Disability Benefits for Injury or Illness
POEA-SEC, Labor Code, and Amended
Rules on Employee Compensation (AREC)
Harmonized
It cannot be said that it was because of respondents' fault that petitioner made a
sudden turn-about and refused to honor the special agreement.
Respondents are not signatories to the Special Agreement, nor was there any
showing that they instigated the execution thereof;
Respondents should not be blamed for accepting higher salaries since it is but
human for them to grab every opportunity which would improve their working
conditions and earning capacity;
The Constitution itself guarantees the promotion of social welfare and protection
to labor;
It is the petitioner who is guilty of breach of contract when they dismissed the
respondents without just cause and prior to the expiration f the employment
contracts;
Petitioner voluntarily entered into the Special Agreement with ITF and by virtue
thereof the crew men were actually given their salary differentials in view of the
new rates; and
It cannot be said that it was because of respondents' fault that petitioner made a
sudden turn-about and refused to honor the special agreement.
The provision of the Constitution as well as the Labor Code which afford
protection to labor apply to Filipino employees whether working within the
Philippines or abroad. Moreover, the principle of lex loci contractus (the law of
the place where the contract is made) governs in this jurisdiction.
In the present case, it is not disputed that the Contract of Employment entered into
by and between petitioners and private respondent was executed in the Philippines
with the approval of the POEA. Hence, the Labor Code together with its
implementing rules and regulations and other laws affecting labor apply in this
case. By our laws, overseas Filipino workers (OFWs) may only be terminated for
a just or authorized cause and after compliance with procedural due process
requirements.
Yes. Munar can claim his totally and permanent disability.
Indeed, under Section 3229 of the POEA-SEC, only those injuries or disabilities
that are classified as Grade 1 may be considered as total and permanent. However,
if those injuries or disabilities with a disability grading from 2 to 14, hence, partial
and permanent, would incapacitate a seafarer from performing his usual sea duties
for a period of more than 120 or 240 days, depending on the need for further
medical treatment, then he is, under legal contemplation, totally and permanently
disabled. In other words, an impediment should be characterized as partial and
permanent not only under the Schedule of Disabilities found in Section 32 of the
POEA-SEC but should be so under the relevant provisions of the Labor Code and
the Amended Rules on Employee Compensation (AREC) implementing Title II,
Book IV of the Labor Code. That while the seafarer is partially injured or disabled,
he is not precluded from earning doing the same work he had before his injury or
disability or that he is accustomed or trained to do. Otherwise, if his illness or
injury prevents him from engaging in gainful employment for more than 120 or
240 days, as the case may be, he shall be deemed totally and permanently disabled.

Moreover, the company-designated physician is expected to arrive at a definite

assessment of the seafarer’s fitness to work or permanent disability within the
period of 120 or 240 days. That should he fail to do so and the seafarer’s medical
condition remains unresolved, the seafarer shall be deemed totally and
permanently disabled.
It is settled that the provisions of the Labor Code and AREC on disabilities are
applicable to the case of seafarers such
that the POEA-SEC is not the sole issuance that governs their rights in the event
of work-related death, injury or illness.
As ruled in Remigio v. NLRC:

Second. Is the Labor Code’s concept of permanent total disability applicable to the
case at bar? Petitioner claims to have suffered from permanent total disability as
defined under Article 192(c)(1) of the Labor Code, viz:

Art. 192 (c). The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one hundred
twenty days, except as otherwise provided in the Rules; x x

The standard employment contract for seafarers was formulated by the POEA
pursuant to its mandate under E.O. No. 247 to "secure the best terms and
conditions of employment of Filipino contract workers and ensure compliance
therewith" and to "promote and protect the well-being of Filipino workers
overseas." Section 29 of the 1996 POEA SEC itself provides that "all rights and
obligations of the parties to the Contract, including the annexes thereof, shall be
governed by the laws of the Republic of the Philippines, international conventions,
treaties and covenants where the Philippines is a signatory." Even without this
provision, a contract of labor is so impressed with public interest that the New
Civil Code expressly subjects it to "the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects."

Thus, the Court has applied the Labor Code concept of permanent total disability
to the case of seafarers. In Philippine Transmarine Carriers v. NLRC, seaman
Carlos Nietes was found to be suffering from congestive heart failure and
 cardiomyopathy and was declared as unfit to work by the company-accredited
physician. The Court affirmed the award of disability benefits to the seaman, citing
ECC v. Sanico, GSIS v. CA, and Bejerano v. ECC that "disability should not be
understood more on its medical significance but on the loss of earning capacity.
Permanent total disability means disablement of an employee to earn wages in the
same kind of work, or work of similar nature that he was trained for or accustomed
to perform, or any kind of work which a person of his mentality and attainment
could do. It does not mean absolute helplessness." It likewise cited Bejerano v.
ECC, that in a disability compensation, it is not the injury which is compensated,
but rather it is the incapacity to work
resulting in the impairment of one’s earning capacity.

It must be noted, however, that when Munar filed his complaint, Dr. Chua had not
yet determined the nature and extent of Munar’s disability. Also, Munar was still
undergoing physical therapy and his spine injury had yet been fully addressed.
Furthermore, when Munar filed a claim for total and permanent disability benefits,
more than 120 days had gone by and the prevailing rule then was that enunciated
by this Court in Crystal Shipping, Inc. v. Natividad that total and permanent
disability refers to the seafarer’s incapacity to perform his customary sea duties
for more than 120 days. Particularly:

Permanent disability is the inability of a worker to perform his job for more than
120 days, regardless of whether or not he loses the use of any part of his body. As
gleaned from the records, respondent was unable to work from August 18, 1998
to February 22, 1999, at the least, or more than 120 days, due to his medical
treatment. This clearly shows that his disability was permanent.

Total disability, on the other hand, means the disablement of an employee to earn
wages in the same kind of work of similar nature that he was trained for, or
accustomed to perform, or any kind of work which a person of his mentality and
attainments could do. It does not mean absolute helplessness. In disability
compensation, it is not the injury which is compensated, but rather it is the
incapacity to work resulting in the impairment of one’s earning capacity.

14. C.F. Sharp Crew Management, Inc. Seafarer’s Death Need Not have Occurred Godofredo is entitled to the benefits they are claiming. Godofredo
v. Legal Heirs of the Late During Term of Employment contracted the illness which eventually caused his death during the term of his
Godofredo Repiso contract or in the course of his employment.

In Inter-Orient Maritime, Inc. v. Candava, the Court ruled that eventual death of
seafarer need not be shown to be work-related in order to be compensable, but
must be proven to have been contracted during the term of the contract;

Respondents alleged, and petitioners did not refute, that Godofredo’s employment
with petitioner C.F. Sharp started way back in 1990. From then til the present,
there were no records of hypertension.

15. GBMLT Manpower Services v.
Malinao
16. Equi-Asia Placement, Inc. v. DFA
Valid Employment-at-will Not Valid in
Local Employment
OFW cannot be left stranded
Godofredo had no previous record of hypertension and/or heart disease before he
boarded but when he was repatriated at a port in Manila he was already diagnosed
to be suffering from Essential Hypertension.
Three days after, Godofredo died and the underlying cause for his death was
identified as "Hypertensive Heart Disease
Court is convinced that Godofredo contracted hypertension and/or heart disease
during his term of employment with petitioners beginning May 20, 2002 until his
repatriation on March 16, 2003.
The phrase "death of the seafarer during the term of his contract" in Section
20(A)(1) of the 1996 POEA-SEC should not be strictly and literally construed to
mean that the seafarer’s death should have occurred during the term of his
employment
It is enough that the seafarer’s work-related injury or illness which eventually
caused his death occurred during the term of his employment.
No, the respondent was not illegally dismissed. Hence, she could not claim seek
payment of the unexpired portion of her contract and damages. The Contract of
Employment signed by respondent is first and foremost a contract, which has the
force of law between the parties as long as its stipulations are not contrary to law,
morals, public order, or public policy. We had occasion to rule that stipulations
providing that either party may terminate a contract even without cause are
legitimate if exercised in good faith. Thus, while either party has the right to
terminate the contract at
will, it cannot not act purposely to injure the other.
It cannot be denied that when respondent accepted the post offered at the Internal
Audit Department, the parties had decided to revert to the status quo ante of
harmonious employment relationship.
Here, the respondent made a belated unilateral declaration to terminate her second
contract. Therefore, it was she who terminated the Contract of Employment, and
she cannot now claim that she was illegally dismissed.
The repatriation of remains and transport of the personal belongings of a deceased
worker and all costs attendant thereto shall be borne by the principal and/or the
local agency.” The mandatory nature of said obligation is characterized by the
legislature’s use of the word “shall.” That the concerned government agencies
opted to demand the performance of said responsibility solely upon petitioner does
not make said directives invalid as the law plainly obliges a local placement
agency such as herein petitioner to bear the burden of repatriating the remains of
a deceased OFW with or without recourse to the principal abroad. In this regard,
we see no reason to invalidate Section 52 of the omnibus rules as Republic Act
 No. 8042 itself permits the situation wherein a local recruitment agency can be
held exclusively responsible for the repatriation of a deceased OFW.

Repatriation is in effect an unconditional responsibility of the agency and/or its

principal that cannot be delayed by an investigation of why the worker was
terminated from employment.

To be left stranded in a foreign land without the financial means to return home
and being at the mercy of unscrupulous individuals is a violation of the OFW's
dignity and his human rights. These are the same rights R.A. No. 8042 seeks to
protect.

17. Seagull Maritime Corp. v. Article 34. Prohibited Practices There is no prohibition against stipulating in a contract more benefits to the
Balatingan employee than those required by law. Thus, in this case wherein a "supplementary
contract" was entered into affording
greater benefits to the employee than the previous one, and
although the same was not submitted for the approval of the POEA,
the said agency and NLRC properly considered said contract to be valid and
enforceable. Indeed, said pronouncements of POEA and NLRC have the effect of
an approval of said contract.

It was not possible for Balatongan to file a claim for permanent

disability with the insurance company within the one-year period
from the time of the injury, as his disability was ascertained to be
permanent only thereafter. Philmate and Seagull did not exert any
effort to assist Balatongan to recover payment of his claim from the
insurance company. They did not even care to dispute the finding of the insurer
that the claim was not flied on time. Philmate and Seagull must, therefore, be held
responsible for its omission, if not
negligence, by requiring them to pay the claim of Balatongan.

18. Royal Crown Internationale v. Solidary Liability Assumed by Recruitment Petitioner had voluntarily assumed solidary liability under the various contractual
NLRC Agent undertakings it submitted to the Bureau of Employment Services. In applying for
its license to operate, petitioner was required to submit the following:
1) a document or verified undertaking whereby it assumed all responsibilities for
the proper use of its license and the implementation of the contracts of employment
with the workers it recruited and deployed for overseas employment;
2) a formal appointment or agency contract executed by the foreign-based
employer in its favor to recruit and hire personnel for the former, which contained
a provision empowering it to sue and be sued jointly and solidarily with the foreign
principal for any of the violations of the recruitment agreement and the contracts
of employment; and
3) to post such cash and surety bonds to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms and conditions of
employment as appropriate.

19. Sunace International Management
Services, Inc. v. NLRC
20. Becmen Service Exporter and
Promotion, Inc. v. Cuaresma
Extension of Employment Unknown to the
Agency, “Imputed Knowledge Rule” Does
Not Apply
Liability for Moral Damages
The contractual undertakings constitute the legal basis for holding petitioner liable
jointly and severally with its principal, the foreign-based employer, for all claims
filed by recruited workers which may arise in connection with the implementation
of the service
agreements or employment.
The Court holds that the NLRC committed no grave abuse of discretion amounting
to lack or excess of jurisdiction in declaring petitioner jointly and severally liable
with its foreign principal ZAMEL for all claims which have arisen in connection
with the
implementation of private respondent's employment contract.
NO, Sunace is not liable to Montehermozo.
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to
the principal, employer Xiong, not the other way around. The knowledge of the
principal-foreign employer cannot, therefore, be imputed to its agent Sunace.
The continuous communication of Sunace with foreign broker Wang was not
about the extension of Montehermozo’s contract but it was regarding the fact that
Montehermozo already took her savings from Xiong and that nothing was
deducted from her salary.
There being no substantial proof that Sunace knew of and consented to be bound
under the 2-year employment contract extension, it cannot be said to be privy
thereto. As such, it and its owner cannot be held solidarily liable for any of
Montehermozo's claims arising from the 2-year employment extension.
Furthermore, as Sunace correctly points out, there was an implied revocation of
its agency relationship with its foreign principal when, after the termination of the
original employment contract, the foreign principal directly negotiated with
Montehermozo and entered into a new and separate employment contract in
Taiwan.
Article 1924 of the New Civil Code states that: The agency is revoked if the
principal directly manages the business entrusted to the agent, dealing directly
with third persons.
The Court held that evidence on record does not support that Jasmine’s death was
work-related. At the time of her death, she was not on duty, or else evidence to the
contrary would have been adduced. Neither was she within hospital premises at
the time. Instead, she was at her dormitory room on personal time when she died.
Neither has it been shown, nor does the evidence suggest, that at the time she died,
Jasmin was performing an act reasonably necessary or incidental to her
employment as nurse, because she was at her dormitory room. It is reasonable to
 suppose that all her work is performed at the Al-birk Hospital, and not at her
dormitory room.

While the "employer's premises" may be defined very broadly not only to include
premises owned by it, but also premises it leases, hires, supplies or uses, we are
not prepared to rule that the dormitory wherein Jasmin stayed should constitute
employer's premises as would allow a finding that death or injury therein is
considered to have been incurred or sustained in the course of or arose out of her
employment. There are certainly exceptions, but they do not appear to apply here.

The Court cited Article 21 of the New Civil Code in justifying the award for moral
damages to the Cuaresmas. The grant of moral damages to the employee by reason
of misconduct on the part of the employer is sanctioned by Article 2219 (10) of
the Civil Code, which allows recovery of such damages in actions referred to in
Article 21.
“Rajab, Becmen and White Falcon's acts and omissions are against public policy
because they undermine and subvert the interest and general welfare of our OFWs
abroad, who are entitled to full protection under the law. They set an awful
example of how foreign employers and recruitment agencies should treat and act
with respect to their distressed employees and workers abroad. Their shabby and
callous treatment of
Jasmin's case; their uncaring attitude; their unjustified failure and refusal to assist
in the determination of the true circumstances surrounding her mysterious death,
and instead finding satisfaction in the unreasonable insistence that she committed
suicide just so they can conveniently avoid pecuniary liability; placing their own
corporate interests above of the welfare of their employee's - all these are contrary
to morals, good customs and public policy, and constitute taking advantage of the
poor employee and her family's ignorance, helplessness, indigence and lack of
power and resources to seek
the truth and obtain justice for the death of a loved one.”

21. Hon. Patricia A. Sto. Tomas, et al. The Court held:

v. Salac
Section 6 - But "illegal recruitment" as defined in Section 6 is clear and
unambiguous and, contrary to the RTC's finding, actually makes a distinction
between licensed and non-licensed recruiters. By its terms, persons who engage in
"canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers" without the appropriate government license or authority are guilty of
illegal recruitment whether or not they commit the wrongful acts enumerated in
that section.

On the other hand, recruiters who engage in the canvassing, enlisting, etc. of
OFWs, although with the appropriate government license or authority, are guilty
of illegal recruitment only if they commit any of the wrongful acts enumerated in
Section 6.
Section 7 - Congress was within its prerogative to determine what individual acts
are equally reprehensible, consistent with the State policy of according full
protection to labor, and deserving of the same penalties.

It is not within the power of the Court to question the wisdom of this kind of
choice.

Section 9 - There is nothing arbitrary or unconstitutional in Congress fixing an

alternative venue for violations of Section 6 of R.A. 8042 that differs from the
venue established by the Rules on Criminal Procedure. Indeed, Section 15(a), Rule
110 of the latter Rules allows exceptions provided by laws. Thus:

SEC. 15. Place where action is to be instituted. (a) Subject to existing laws, the
criminal action shall be instituted and tried in the court of the municipality or
territory where the offense was committed or where any of its essential ingredients
occurred.

Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is,
consistent with that law's declared policy of providing a criminal justice system
that protects and serves the best interests of the victims of illegal recruitment.

G.R. 167590, G.R. 182978-79, and G.R. 184298-99 are consolidated cases

The Spouses Cuaresmas filed a claim for death and insurance benefits and
damages against petitioners Becmen Service Exporter and Promotion, Inc.
(Becmen) and White Falcon Services, Inc. (White Falcon) for the death of their
daughter Jasmin Cuaresma
while working as staff nurse in Riyadh, Saudi Arabia. The LA dismissed the claim
on the ground that the Cuaresmas. The Labor Arbiter (LA) dismissed the claim on
the ground that the Cuaresmas had already received insurance benefits arising
from their daughter's death from the Overseas Workers Welfare Administration
(OWWA). The LA also gave due credence to the findings of the Saudi Arabian
authorities that Jasmin committed suicide. On appeal to the NLRC, it found
Becmen and White Falcon jointly and severally liable for Jasmin's death. The
NLRC relied on the Cabanatuan City Health Office's autopsy finding
that Jasmin died of criminal violence and rape.

Becmen and White Falcon appealed the NLRC Decision to the Court of Appeals
(CA). The CA held Becmen and White Falcon jointly and severally liable with
their Saudi Arabian employer for actual damages, with Becmen having a right of
reimbursement from White Falcon. Becmen and White Falcon appealed the CA
Decision to the Supreme Court.

The Court found Jasmin's death not work-related or work connected since her rape
and death did not occur while she was on duty at the hospital or doing acts
incidental to her employment. It ruled that Becmen's corporate directors and
 officers are solidarily liable with their company for its failure to investigate the
true nature of her death. Becmen and White Falcon abandoned their legal, moral,
and social duty to assist the Cuaresmas in obtaining justice for their daughter.
Consequently, the Court held the foreign employer Rajab and Silsilah, White
Falcon, Becmen, and the latter's corporate directors and officers jointly and
severally liable to the Cuaresmas.

The officers and directors of Becmen, Gumabay et al., filed a motion to intervene
and questioned the constitutionality of the last sentence of the second paragraph
of Section 10, R.A. 8042 which holds the corporate directors, officers and partners
jointly and solidarily liable with their company for money claims filed by OFWs
against their employers and the recruitment firms.

Consequently:

The Court HOLDS the last sentence of the second paragraph of

Section 10 of Republic Act 8042 valid and constitutional.

The Court, however, RECONSIDERS and SETS ASIDE the portion of its
Decision in G.R. 182978-79 and G.R. 184298-99 that held intervenors Gumabay
et al. jointly and solidarily liable with respondent Becmen Services Exporter and
Promotion, Inc. to spouses Cuaresma for lack of a finding in those cases that such
intervenors had a part in the act or omission imputed to their corporation.

22. People v. F. Hernandez Article 38 of the Labor Code defines illegal recruitment as "any
recruitment activities, to be undertaken by non-licensees or non-holders of
authority.“ It refers to any act of procuring workers, promising or advertising for
employment, locally or abroad, whether for profit or not, provided that any person
or entity which, in any manner, offers or promises for a fee employment to two or
more persons shall be deemed engaged in recruitment and placement.

The law imposes a higher penalty when the illegal recruitment is

committed by a syndicate or in large scale as they are considered
an offense involving economic sabotage. Illegal recruitment is
deemed committed by a syndicate if carried out by a group of 3 or
more persons conspiring with one another in carrying out any unlawful or illegal
enterprise or schemes. It is deemed committed in large scale if committed against
3 or more persons individually
or as a group.

Accused-appellants assert that they merely undertook to secure Austrian visas for
private complainants, which did not constitute illegal recruitment. However,
Private complainants categorically stated that spouses Reichl told them that they
would provide them overseas employment and promised them that they would be
able to leave the country on a specified date.

23. People v. Laogo Essential Element as Criminal Offense;
Illegal Recruitment as a Criminal Offense
Presupposes Deceit or Misrepresentation
Accused-appellants argue that the trial court erred in convicting accused-
appellants of illegal recruitment in large scale by cummulating the individual
informations filed by private complainants. We agree with accused-appellants that
they could not be convicted for illegal recruitment committed in large scale based
on several informations filed by only one complainant, a conviction for large scale
illegal recruitment must be based on a finding in each case of illegal recruitment
of three or more persons whether individually or as a group.
This, however, does not serve to lower the penalty imposed upon accused-
appellants. The charge was not only for illegal recruitment committed in large
scale but also for illegal recruitment committed by a syndicate.
Illegal recruitment is deemed committed by a syndicate if carried out by a group
of three (3) or more persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme defined
under the first paragraph of Article 38 of the Labor Code.
It has been shown that Karl Reichl, Yolanda Reichl andFrancisco Hernandez
conspired with each other in convincing private complainants to apply for an
overseas job and giving them the guaranty that they would be hired as domestic
helpers in Italy although they were not licensed to do so.
YES, the Appellants where guilty of illegal recruitment
Recruitment and placement refers to the act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for
profit or
not. When a person or entity, in any manner, offers or promises for a fee
employment to two or more persons, that person or entity shall be deemed engaged
in recruitment and placement
Article 38(a) of the Labor Code, as amended, specifies that recruitment activities
undertaken by non-licensees or non-holders of authority are deemed illegal and
punishable by law. And when the illegal recruitment is committed against three or
more persons,
individually or as a group, then it is deemed committed in large scale and carries
with it stiffer penalties as the same is deemed a form of economic sabotage
To prove Illegal Recruitment
Accused was without being duly authorized by law.
1. the distinct impression that he had the power or ability to send them
abroad for work.
 2. promise or offer of an employment from the person posing as a recruiter,
whether locally or abroad.

The lower and appellate courts found that the transaction entered into by the
complainants an appellant were followed up through appellant office. Also, the
receipts issued to the complainants were from appellant company. The fact that
she eventually changed the company name in an attempt to dissociate herself from
Navarro deserves scant consideration. Appellant engaged in recruitment activities
when she promised complainants employment abroad in exchange for
consideration. She is guilty of illegal recruitment as she was unlicensed to
undertake said act.

24. People v. Sagaydo Lack of Receipts Illegal recruitment has been defined to include the act of engaging
in any of the activities mentioned in Article 13 (b) of the Labor Code without the
required license or authority from the POEA. Under the aforesaid provision, any
of the following activities would constitute recruitment and placement:
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, including referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not.

Article 13 (b) further provides that any person or entity which, in any manner,
offers or promises for a fee employment to two (2) or more persons shall be
deemed engaged in recruitment and placement. Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons,
individually or as a group.

This crime requires proof that the accused:

(1) engaged in the recruitment and placement of workers defined under

Article 13 or in any of the prohibited activities under Article 34 of the Labor
Code;

(2) does not have a license or authority to lawfully engage in the

recruitment and placement of workers; and

(3) committed the infraction against three or more persons, individually or

as a group.

All the aforementioned requisites were present in this case. The

accused-appellant made representations to each of the private complainants that
she could send them to Korea to work as factory workers, constituting a promise
of employment which amounted to recruitment as defined under Article 13 (b) of
the Labor Code. From the testimonies of the private complainants that the trial
court
found to be credible and untainted with improper motives, there is no denying that
accused-appellant gave the complainants the distinct impression that she had the
 power or ability to send them abroad for work such that the latter were convinced
to part with their money in order to be employed. As against the positive and
categorical testimonies of the complainants, mere denial of accused-appellant
cannot prevail.

We thus defer to the factual findings of the trial court on the

credibility of the complainants as there is no showing that any of them had ill
motives against accused-appellant other than to bring her to justice for the crime
of illegal recruitment and estafa. Their testimonies were straightforward, credible
and convincing.

WHEREFORE, we AFFIRM the conviction of accused-appellant LINDA

SAGAYDO for illegal recruitment and estafa.

25. People v. Remullo Illegal Recruitment Private complainant Mejia inquired from Jamila and Co. regarding
their application papers. However, the vice president and general
manager to Jamila, denied any knowledge of such papers. They
further certified that appellant was not authorized to receive
payments on behalf of Jamila.

Appellant insisted that private complainants did not hand their

placement fees to her but to Steven Mah and to a certain Lani
Platon. 19 She presented in evidence photocopies of receipts
allegedly signed by Platon.

Trial court found appellant guilty as charged.

ART. 13 of the Labor Code:

(b) "Recruitment and placement" refers to any act of canvassing, enlisting,

contracting, transporting, utilizing, hiring or procuring workers, and includes
referrals, contact services, promising or advertising for employment, locally or
abroad, whether for profit or
not: Provided, That any person or entity which, in any manner, offers or promises
for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement.

The three private complainants filled up application forms at appellant’s house,

and each paid appellant the amount of P15,000 as placement fee. However, she
acted without license or lawful authority to conduct recruitment of workers for
overseas placement. The POEA’s licensing branch issued a certification stating
that appellant, in her personal capacity, was not authorized to engage in
recruitment activities. 34 Evelyn Landrito, general manager of the placement
agency where appellant used to work,
denied that the scope of appellant’s work included recruiting workers and
receiving placement fees. Such lack of authority to recruit is also apparent from a
 reading of the job description of a marketing consultant, 35 the post that appellant
occupied at Jamila
and Co.

In the face of evidence pointing to her wrongdoing, appellant only offers denials,
while pointing to an alleged ill motive on the part of private complainants that
prompted them to testify against her. According to appellant, private complainants
failed to find the
responsible parties, namely Steven Mah and his companion Lani Platon, and so
are now going after her. Appellant’s arguments fail to persuade us of her
innocence. The defense of denial is intrinsically weak, a self-serving negative
evidence that cannot prevail over the testimony of credible witnesses who testified
on affirmative matters.

Wherefore, the appealed decision of the Regional Trial Court, was AFFIRMED.
In Criminal Case, for illegal recruitment in large scale, appellant NIMFA
REMULLO is found guilty and sentenced to life imprisonment and to pay a fine
of P100,000; and in Criminal Cases for estafa, she is declared guilty sentenced in
each case to two (2) years, four (4) months and one (1) day of prisioncorreccional
to six (6) years and one (1) day of prision mayor, and to pay by way of restitution
P15,000 to each of the private complainants, Jenelyn Quinsaat, Rosario Cadacio
and Honorina Mejia, together with the costs.

26. WPD Marketing, et al. v. Jocelyn Effect of Lack of Work Permit Galera could not claim the employees benefits she is entitled under
M. Galera Philippine Labor Laws. The law and the rules are consistent in stating that the
employment permit must be acquired prior to employment.

Article 40 of 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. Section 4, Rule XIV, Book 1
of the Implementing Rules and Regulations provides, among others, that if an alien
enters the country under a non-working visa and wishes to be employed thereafter,
he may only be allowed to be employed upon presentation of a duly approved
employment permit.

Galera cannot come to this Court with unclean hands. To grant Galera’s 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. This ruling, however,
does not bar Galera from seeking relief from other jurisdictions.

27. Nitto Enterprises v. NLRC Article 60. Employment of Apprentices Capili is a regular employee. Apprenticeship needs DOLE’s prior approval, or
apprentice becomes regular employee.
 Petitioner did not comply with the requirements of the law. It is mandated that
apprenticeship agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment. Prior approval by the Department of Labor
and Employment of the proposed apprenticeship program is, therefore, a condition
sine quo non before an apprenticeship agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of
Labor and Employment is a preliminary step towards its final approval and does
not instantaneously give rise to an employer-apprentice relationship.

Hence, since the apprenticeship agreement between petitioner and private

respondent has no force and effect in the absence of a valid apprenticeship program
duly approved by the DOLE, private respondent’s assertion that he was hired not
as an apprentice but as a delivery boy (“kargador” or “pahinante”) deserves
credence. He should rightly be considered as a regular employee of petitioner as
defined by Article 280 of the Labor Code and pursuant to the constitutional
mandate to protect the rights of workers and
promote their welfare.

28. Filamer Christian Institute v. Hon. Working Scholar: Liability of School The Court held that since the acts of Futencha were in furtherance of the interest
IAC and for the benefit of the petitioner, it is still liable for the acts of the former.

It was also held that it was the responsibility of the petitioner as the employer to
create proper rules and regulations to prevent such accidents from happening.
29. San Miguel Brewery Sales v. Ople Legal Character of the Employment THE CDS IS A VALID EXERCISE OF MANAGEMENT PREROGATIVE.
Relationship THE PETITION FOR CERTIORARI IS DISMISSED FOR LACK OF MERIT.

EXCEPT AS LIMITED BY SPECIAL LAWS, AN EMPLOYER IS FREE TO

REGULATE, ACCORDING TO HIS OWN DISCRETION AND JUDGMENT,
ALL ASPECTS OF EMPLOYMENT, INCLUDING HIRING, WORK
ASSIGNMENTS, WORKING METHODS, TIME, PLACE AND MANNER OF
WORK, TOOLS TO BE USED, PROCESSES TO BE FOLLOWED,
SUPERVISION OF WORKERS, WORKING REGULATIONS, TRANSFER OF
EMPLOYEES, WORK SUPERVISION, LAY-OFF OF WORKERS AND THE
DISCIPLINE, DISMISSAL AND RECALL OF WORK. EVERY BUSINESS
ENTERPRISE ENDEAVORS TO INCREASE ITS PROFITS. IN THE
PROCESS, IT MAY ADOPT OR
DEVISE MEANS DESIGNED TOWARDS THAT GOAL. EVEN AS THE LAW
IS SOLICITOUS OF THE WELFARE OF THE EMPLOYEES, IT MUST ALSO
PROTECT THE RIGHT OF AN EMPLOYER TO EXERCISE WHAT ARE
CLEARLY MANAGEMENT PREROGATIVES.

THE FREE WILL OF MANAGEMENT TO CONDUCT ITS OWN BUSINESS

AFFAIRS TO ACHIEVE ITS PURPOSE

30. Insular Hotel Employees Union-
NFL v. Waterfront Insular Hotel
Davao
31. SSS v. Debbie Ubana
Nature of Employment Relationship and
Causes of Dispute
Economic Character of Employment
Relationship
Abuse of Right by Employer
CANNOT BE DENIED. SO LONG AS A COMPANY'S MANAGEMENT
PREROGATIVES ARE EXERCISED IN GOOD FAITH FOR THE
ADVANCEMENT OF THE EMPLOYER'S INTEREST AND NOT FOR THE
PURPOSE OF DEFEATING OR CIRCUMVENTING THE RIGHTS OF THE
EMPLOYEES UNDER SPECIAL LAWS OR UNDER VALID
AGREEMENTS, THIS COURT WILL UPHOLD THEM SAN MIGUEL
CORPORATION'S OFFER TO COMPENSATE THE MEMBERS OF ITS
SALES FORCE WHO WILL BE ADVERSELY AFFECTED BY THE
IMPLEMENTATION OF THE CDS BY PAYING THEM A SO-CALLED
"BACK
ADJUSTMENT COMMISSION" TO MAKE UP FOR THE COMMISSIONS
THEY MIGHT LOSE AS A RESULT OF THE
CDS PROVES THE COMPANY'S GOOD FAITH AND LACK OF INTENTION
TO BUST THEIR UNION.
Pertinent portion of the CBA states that in case of any dispute arising from the
interpretation or implementation of the said MOA, only the union and the company
shall exhaust all the possibilities of conciliation. Petitioners, however, have not
been duly authorized to represent the union. It is the DIHFEU-NFL that is
recognized by the agreement as the exclusive bargaining representative. And as to
the second question, even granting that the petitioner was affiliated with NFL, their
relationship is still understood to be that of agency. Hence, NFL still has no
standing.
To uphold the validity of the MOA would mean the continuance of the hotel's
operation and financial viability. Otherwise, the eventual permanent closure of the
hotel would only result to prejudice of the employees, as a consequence thereof,
will necessarily lose their jobs. While the terms of the MOA undoubtedly reduced
the salaries and certain benefits previously enjoyed by the members of the Union,
it cannot escape this Court's attention that it was the execution of the MOA which
paved the way for the re-opening of the hotel, notwithstanding its financial
distress. More importantly, the execution of the MOA allowed respondents to keep
their jobs. It would certainly be iniquitous for the members of the Union to
sign new contracts prompting the re-opening of the hotel only to later on renege
on their agreement on the fact of the non-ratification of the MOA.
Petitioner denied the existence of an employer-employee relationship between it
and respondent; in fact, it insists on the validity of its service agreements with DBP
Service Corporation and SSS Retirees Association – meaning that the latter, and
not SSS, are respondent's true employers.
Since both parties admit that there is no employment relation between them, then
there is no dispute cognizable by the NLRC.
Respondent's case is premised on the claim that in paying her only P229.00 daily
- or P5,038.00 monthly - as against a monthly salary of P18,622.00, or P846.45

32. Roque Benitez and Santa Fe Labor
Union-FFW v. Santa Fe Moving
and Relocation Services, Vedit
Kurangil
Serious Misconduct of Union Officer:
Valid Dismissal
daily wage, paid to a regular SSS Processor at the time, petitioner exploited her,
treated her unfairly, and unjustly enriched itself at her expense.
Article 217 of the Labor Code as amended vests upon the labor arbiters exclusive
original jurisdiction only over the following:
xxxxxx
4.Claims for actual, moral, exemplary and other forms of damages arising
from employer-employee relations;
Since there is no employer-employee relationship between the parties herein, then
there is no labor dispute cognizable by the Labor Arbiters or the NLRC.
There being no employer-employee relation or any other definite or direct contract
between respondent and petitioner, the latter being responsible to the former only
for the proper payment of wages, respondent is thus justified in filing a case against
petitioner, based on Articles 19 and 20 of the Civil Code, to recover the proper
salary due her as SSS Processor. The "long honored legal truism of 'equal pay for
equal work'" has been "impregnably institutionalized;" "[p]ersons who work with
substantially equal
qualifications, skill, effort and responsibility, under similar conditions, should be
paid similar salaries."
Serious misconduct is a just cause for termination of employment under the law.
Article 282 of the Labor Code provides: "An employer may terminate an
employment for any of the following causes: (a) Serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or
representative in connection with his work, x x x."
Despite Benitez’s denial, there is substantial evidence that Benitez maligned
Kurangil and the company during their Christmas Party.
The testimony of the employees presented by Benitez were belied by their co-
employees Afos and Atienza, stating that Benitez was seated with them at a
different table and that they witnessed him going to the stage where he lost his
temper and verbally abused Kurangil in connection with the conduct of the
Christmas raffle.
With regard to the contention of Benitez of the non-involvement of the company
guards, the SC said that this argument is not persuasive. There was no need for the
guards to intervene because Benitez was restrained by people near the stage and
who escorted him outside the premises where the party was going on as attested
to by Kurangil, Afos and Atienza.
 SC believes that Benitez's tirade against Kurangil, the company and other
company officers indeed happened. The Christmas Party was attended not only by
company officers and employees but also their families and company clients and
guests. With such a big audience, SC cannot imagine how Benitez could get away
with his claim that he did not malign and disrespect Kurangil and the others.

The ruling in Samson v. NLRC do not apply in the present case. In Samson v.
NLRC, the alleged offensive words were not uttered by petitioner in the presence
of respondent company's president and general manager. Samson's outburst
occurred during an informal Christmas gathering of company sales officials and
staff and his
maligned superior was not present during the gathering. While in the present case,
Benitez was with Mr. Kurangil when he uttered the foul words in the presence of
the employees, their families and guests. More so, Benitez went up the stage and
confronted his superior with a verbal abuse.

SC is convinced that Benitez's offense constituted a serious misconduct as defined

by law. His display of insolent and disrespectful behavior, in utter disregard of the
time and place of its occurrence, had very much to do with his work. He set a bad
example as a union officer and as a crew leader of a vital division of the company.

Further, SC agreed with the NLRC ruling that the company failed to observe the
two-notice requirement in employee dismissals as Benitez was dismissed on the
same day that the memorandum was served on him. The verbal directive for him
to explain why he should not be dismissed, assuming that there was indeed such a
directive, clearly was not in compliance with the law. Nonetheless, it is reasonable
to award Benitez P30,000.00 in nominal damages for violation of his right to
procedural due process.

The petition is DISMISSED. SO ORDERED.

33. Samonite, et al. v. La Salle Legal Character: Regular Employment may Contracts don’t define empoyment status
Greenhills, Inc., et. al arise even id there is a “Retainer”
stipulation in the contract Art. 280. Regular and casual employment. The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties…

From the wording of Article 280 of the Labor Code, that the
nomenclature of contracts, especially employment contracts, does
not define the employment status of a person: Such is defined and
prescribed by law and not by what the parties say it should be.
Equally important to consider is that a contract of employment is
impressed with public interest such that labor contracts must yield to the common
good. Thus, provisions of applicable statutes are
deemed written into the contract, and the 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.
Fixed-term employment requires equal terms

A fixed-term employment is allowable under the Labor Code only if the term was
voluntarily and knowingly entered into by the parties who must have dealt with
each other on equal terms not one exercising moral dominance over the other.

Repeated engagement under contract of hire is indicative of the necessity and

desirability of the [employee's] work in respondent's business and where
employee's contract has been continuously extended or renewed to the same
position, with the same duties and
remained in the employ without any interruption, then such employee is a regular
employee.

The uniform one-page Contracts of Retainer signed by

petitioners were prepared by LSGI alone. Petitioners,
medical professionals as they were, were still not on equal
footing with LSGI as they obviously did not want to lose
their jobs that they had stayed in for 15 years. There is no
specificity in the contracts regarding terms and conditions
of employment that would indicate that petitioners and
LSGI were on equal footing in negotiating it.

Notably, without specifying what are the tasks assigned to

petitioners, LSGI "may upon prior written notice to the retainer, terminate [the]
contract should the retainer fail in any way to perform his assigned job/task to the
satisfaction of La Salle Greenhills, Inc. or for any other just cause. “While vague
in its sparseness, the Contract of Retainer very clearly spelled out that LSGI had
the power of control over petitioners.

The power of control refers to the existence of the power and not
necessarily to the actual exercise thereof, nor is it essential for the
employer to actually supervise the performance of duties of the
employee. It is enough that the employer has the right to wield
that power.

In all, given the following:

(1) repeated renewal of petitioners' contract for fifteen years, interrupted only by
the close of the school year;
(2) the necessity of the work performed by petitioners as school physicians and
dentists; and
(3) the existence of LSGI's power of control over the means and method pursued
by petitioners in the performance of their job,

Petitioners attained regular employment, entitled to security of tenure who could

only be dismissed for just and authorized causes.
 Consequently, petitioners were illegally dismissed and are entitled to the twin
remedies of payment of separation pay and full back wages.

34. Phil. Global Communications, Inc.
v. De Vera
Core Jobs and Non-Core Jobs
Applying the four fold test, de Vera is not an employee. According to the erring
of the court, from the time he started to work with petitioner, he never was included
in its payroll and was never deducted any contribution for remittance to the Social
Security
System (SSS). The power to terminate the relationship of the parties was mutually
vested on both and may terminate either with or without cause. Petitioner also had
no control over the means and methods by which respondent went about in
performing his
work at the company premises in determining the existence of an employer-
employee relationship, has invariably
adhered to the four-fold test, 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's conduct, or the so-called "control test"
considered to be the most important element.

35. Sevilla v. CA Tests of Employment Relationship The Supreme Court ruled that no employee-employer relationship existed between
Lina and TWS. There is no uniform test to determine the evidence of an employer-
employee relation. In
general, we have relied on the so-called right of control test, "where the person for
whom the services are performed reserves a right to control not only the end to be
achieved but also the
means to be used in reaching such end.“
In addition to the standard of right-of control, the existing economic conditions
prevailing between the parties, like the inclusion of the employee in the payrolls,
in determining the existence of an employer-employee relationship;

The records will show that the petitioner, Lina Sevilla, was not subject to control
by the private respondent Tourist World Service, Inc., either as to the result of the
enterprise or as to the means used in connection therewith.

Under the contract of lease covering the Tourist Worlds Ermita office, she had
bound herself in solidum as and for rental payments, an arrangement that would
be like claims of a master-servant relationship. True the respondent Court would
later minimize her participation in the lease as one of mere guaranty, that does not
make her an employee of Tourist World, since in any case, a true employee cannot
be made to part with his own money in pursuance of his employer's business, or
 otherwise, assume any liability thereof. In that event, the parties must be bound by
some other relation, but certainly not employment;

In the second place, when the branch office was opened, the same was run by the
herein appellant Lina O. Sevilla payable to Tourist World Service, Inc. by any
airline for any fare brought in on the effort of Mrs. Lina Sevilla. Under these
circumstances, it cannot be said that Sevilla was under the control of Tourist World
Service, Inc. "as to the means used." Sevilla in pursuing the business, obviously
relied on her own gifts and capabilities;

It is further admitted that Sevilla was not in the company's payroll. For her efforts,
she retained 4% in commissions from airline bookings, the remaining 3% going to
Tourist World. Unlike an
employee then, who earns a fixed salary usually, she earned compensation in
fluctuating amounts depending on her booking successes; and

The fact that Sevilla had been designated 'branch manager" does not make her,
ergo, Tourist World's employee. As we said, employment is determined by the
right-of-control test and certain economic parameters. But titles are weak
indicators.

36. Angelina Francisco v. NLRC,, Two-tiered Approach: Economic We held in Sevilla v. Court of Appeals 18 that in this jurisdiction, there has been no
Kasei Group Dependence Test uniform test to determine the existence of an employer-employee relation.
Generally, courts have relied on the so-called right of control test where the person
for whom the services are performed reserves a right to control not only the end to
be achieved but also the means to be used in reaching such end. However, in
certain cases the control test is not sufficient to give a complete picture of the
relationship between the parties, owing to the complexity of such a relationship
where several positions have been held by the worker.
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.

This two-tiered test would provide us with a framework of analysis, which would
take into consideration the totality of circumstances surrounding the true nature of
the relationship between the parties. This is especially appropriate in this case
where there is no written agreement or terms of reference to base the relationship
on; and due to the complexity of the relationship based on the various positions
and responsibilities given to the worker over the period of the latter’s employment.

Thus, the determination of the relationship between employer and employee

depends upon the circumstances of the whole economic activity, 22 such as:
(1) the extent to which the services performed are an integral part of the employer’s
business;
(2) the extent of the worker’s investment in equipment and facilities;
 (3) the nature and degree of control exercised by the employer;
(4) the worker’s 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. 24 In the United States, the touchstone of economic reality in analyzing
possible employment relationships for purposes of the Federal Labor Standards
Act is dependency. 25By analogy, the benchmark of economic reality in analyzing
possible employment relationships for purposes of the Labor Code ought to be the
economic dependence of the worker on his employer.

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 corporation’s Technical Consultant. She reported for work
regularly and served in various capacities as Accountant, Liaison Officer,
Technical Consultant, Acting Manager and Corporate Secretary, with substantially
the same job functions, that is, rendering accounting and tax services to the
company and performing functions necessary and desirable for the proper
operation of the corporation such as securing business permits and other licenses
over an indefinite period of engagement.

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. 26 When petitioner was designated General Manager, respondent
corporation made a report to the SSS signed by Irene Ballesteros. Petitioner’s
membership in the SSS as manifested by a copy of the SSS specimen signature
card which was signed by the President of Kasei Corporation and the inclusion of
her name in the on-line inquiry system of the SSS evinces the existence of an
employer-employee relationship between petitioner and respondent corporation. 27

It is therefore apparent that petitioner is economically dependent on respondent

corporation for her continued employment in the latter’s line of business.

37. Paguio v. NLRC Existence of Employment Relationship A "regular employment” is aptly gauged from the concurrence, or the
Determined by Law, Not by Contract non-concurrence, of the following factors:
 The manner of selection and engagement of the putative employee;

The mode of payment of wages;

The presence or absence of the power of dismissal; and

The presence or absence of the power to control the conduct of the

putative employee or the power to control the employee with respect to the means
or methods by which his work is to be accomplished.

Respondent cannot seek refuge under the terms of the agreement it has entered
into with petitioner.

The law affords protection to an employee, and it will not countenance any attempt
to subvert its spirit and intent. A stipulation in an agreement can be ignored as and
when it is utilized to deprive the employee of his security of tenure.

A lawful dismissal must meet both substantive and procedural

requirements. The dismissal must be for:

A just or authorized cause; and

Must comply with the rudimentary due process of notice and hearing.

It is not shown that respondent bothered complying with the. The

notice of termination recites no valid or just cause for the dismissal of petitioner
nor does it appear that he has been given an opportunity to be heard in his defense.

38. Villamaria v. CA and Bustamante Boundary-hulog Conytract between the YES. The existence of employer-employee relationship is not dependent on how
Jeepney Owner and the Jeepney Driver the worker is paid but on the presence or absence of control/supervision over the
means of the work.

Originally, Villamaria and Bustamante made use of the boundary system wherein
Bustamante would not receive fixed wages, but only keep for himself the excess
of the Php450 “boundary” earned per day.

When they entered into the “boundary-hulog” contract, the Php550/day remitted
by Bustamante to Villarama represented daily installments to the purchase price
of the jeepney. Although this situation created a vendor-vendee relationship, the
employer-employee relationship was not terminated.

The directives in the “Kasunduan” clearly showed the exercise of control and
supervision by Villamaria as the employer of Bustamante.
 Moreover, in a business establishment, an identification card is usually provided
not just as a security measure but to mainly identify the holder thereof as a bona
fide employee of the firm who issues it.

Bustamante had to display his ID in such a way that it would be easily visible on
the windshield of the jeepney. This requirement was for Villamaria to determine
if the driver was indeed authorized.

**No police report regarding vehicular accident; no affidavit of gasoline station

security guard about Bustamante leaving the jeepney there (credence given to
Bustamante’s version of events)

Since Bustamante was illegally dismissed, Villamaria was ordered to give

Bustamante separation pay and back wages.

39. Sy, et. al v. CA Truck Driver: Employee, Not Partner A computation of the age of complainant shows that he was only twenty-three (23)
years when he started working with respondent as truck helper. How can we
entertain in our mind that a twenty-three (23) year old man, working as a truck
helper, be considered an industrial partner. Hence we rule that complainant was
only an employee, not a partner of respondents from the time complainant started
working for respondent.

Under Article 1767 of the Civil Code states that in a contract of partnership two
or more persons bind themselves to contribute money, property or industry to a
common fund, with the intention of dividing the profits among themselves. Not
one of these circumstances is present in this case. No written agreement exists to
prove the partnership between the parties. Private respondent did not contribute
money, property or industry for the purpose of engaging in the supposed business.
There is no proof that he was receiving a share in the profits as a matter of course,
during the period when the trucking business was under operation. Neither is there
any proof that he had actively participated in the management, administration and
adoption of policies of the business. Thus, the NLRC and the CA did not err in
reversing the finding of the Labor Arbiter that private respondent was an industrial
partner from 1958 to 1994.

Thus, the NLRC and the CA did not err in reversing the finding of the Labor
Arbiter that private respondent was an industrial partner from 1958 to 1994.

On this point, we affirm the findings of the appellate court and the NLRC. Private
respondent Jaime Sahot was not an industrial partner but an employee of
petitioners from 1958 to 1994. The existence of an employer-employee
relationship is ultimately a question of fact and the findings thereon by the NLRC,
as affirmed by the Court of Appeals, deserve not only respect but finality when
supported by substantial evidence. Substantial evidence is such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion
 Time and again this Court has said that "if doubt exists between the evidence
presented by the employer and the employee, the scales of justice must be tilted in
favor of the latter." Here, we entertain no doubt. Private respondent since the
beginning was an employee of, not an industrial partner in, the trucking business.

“Article 1767 of the Civil Code states that in a contract of partnership two or more
persons bind themselves to contribute money, property or industry to a common
fund, with the intention of dividing the profits among themselves. Not one of these
circumstances is present in this case. No written agreement exists to prove the
partnership between the parties. Private respondent did not contribute money,
property or industry for the purpose of engaging in the supposed business. There
is no proof that he was receiving a share in the profits as a matter of course, during
the period when the trucking business was under operation. Neither is there any
proof that he had actively participated in the management, administration and
adoption of policies of the business. Thus, the NLRC and the CA did not err in
reversing the finding of the Labor Arbiter that private respondent was an industrial
partner from 1958 to 1994.”

40. Bankard Employees Union- General Right of Employer Over Prubankers Association v. Prudential Bank and Trust Company laid down the
Workers Alliance Trade Union v. Conditions of Employment four elements of wage distortion to wit:
NLRC and Bankard, Inc.
(1.) An existing hierarchy of positions with corresponding salary rates;

(2) A significant change in the salary rate of a lower pay class without a
concomitant increase in the salary rate of a higher one;

(3) The elimination of the distinction between the two levels; and

(4) The existence of the distortion in the same region of the country.

The employees of private respondent have been “historically” classified into

levels, i.e. I to V, and not on the basis of their length of service. Put differently,
the entry of new employees to the company ipso facto places them under any of
the levels mentioned in the new salary scale which private respondent adopted
retroactive to April 1, 1993.

Petitioner cannot make a contrary classification of private respondent’s employees

without encroaching upon recognized management prerogative of formulating a
wage structure, in this case, one based on level.

It is thus clear that there is no hierarchy of positions between the newly hired and
regular employees of Bankard, hence, the first element of wage distortion provided
in Prubankers is wanting. While seniority may be a factor in determining the wages
of employees, it cannot be made the sole basis in cases where the nature of their
work differs.

41. Autobus Transport System Inc. v.
Bautista
Outside or Field Sales Personnel
As National Federation of Labor v. NLRC, et al. teaches, the formulation of a wage
structure through the classification of employees is a matter of management
judgment and discretion. Whether or not a new additional scheme of classification
of employees for compensation purposes should be established by the Company
(and the legitimacy or viability of the bases of distinction there embodied) is
properly a matter of management judgment and discretion, and ultimately,
perhaps, a subject matter for bargaining negotiations between employer and
employees. It is assuredly something that falls outside the concept of “wage
distortion.”
Even assuming that there is a decrease in the wage gap between the pay of the old
employees and the newly hired employees, to Our mind said gap is not significant
as to obliterate or result in severe contraction of the intentional quantitative
differences in the salary rates between the employee group. As already stated, the
classification under the wage structure is based on the rank of an employee, not on
seniority. For this reason, wage distortion does not appear to exist.
If the compulsory mandate under Article 124 to correct “wage distortion” is
applied to voluntary and unilateral increases by the employer in fixing hiring rates
which is inherently a business judgment prerogative, then the hands of the
employer would be completely tied even in cases where an increase in wages of a
particular group is justified due to a re-evaluation of the high productivity of a
particular group, or as in the present case, the need to increase the competitiveness
of Bankard’s hiring rate. An employer would be discouraged from adjusting the
salary rates of a
particular group of employees for fear that it would result to a demand by all
employees for a similar increase, especially if the financial conditions of the
business cannot address an across-the-board increase.
In fine, absent any indication that the voluntary increase of salary rates by an
employer was done arbitrarily and illegally for the purpose of circumventing the
laws or was devoid of any legitimate purpose other than to discriminate against
the regular employees, the Court will not step in to interfere with this management
prerogative.
The respondent is entitled to service incentive leave.
The disposition of the issue revolves around the proper interpretation of Article 95
of the Labor Code vis-à-vis Section 1(D), Rule V, Book III of the Implementing
Rules and Regulations of the Labor Code which provides: RIGHT TO SERVICE
INCENTIVE LEAVE, (a) Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of five days with pay.
According to the Implementing Rules, Service Incentive
Leave shall not apply to employees classified as "field
personnel."
 The phrase "other employees whose performance is unsupervised by the
employer" must not be understood as a separate classification of employees to
which service incentive leave shall not be granted

Rather, it serves as an amplification of the interpretation of the definition of field

personnel under the Labor Code as those "whose actual hours of work in the field
cannot be determined with
reasonable certainty."

The same is true with respect to the phrase "those who are engaged on task or
contract basis, purely commission basis." Said phrase should be related with "field
personnel," applying the rule on ejusdem generis that general and unlimited terms
are restrained and
limited by the particular terms that they follow.

Hence, employees engaged on task or contract basis or

paid on purely commission basis are not automatically
exempted from the grant of service incentive leave,
unless, they fall under the classification of field
personnel.

According to Article 82 of the Labor Code, "field personnel" shall refer to non-
agricultural employees who regularly perform their duties away from the principal
place of business or branch office of the employer and whose actual hours of work
in the field cannot be
determined with reasonable certainty Field personnel are those who regularly
perform their duties away from the principal place of business of the employer and
whose actual hours of work in the field cannot be determined with reasonable
certainty. Thus, in order to conclude whether an employee is a field employee, it
is also
necessary to ascertain if actual hours of work in the field can be determined with
reasonable certainty by the employer.

The clear policy of the Labor Code is to grant service incentive leave pay to
workers in all establishments, subject to a few exceptions. Section 2, Rule V, Book
III of the Implementing Rules and Regulations provides that "every employee who
has rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay."

An employee who has served for one year is entitled to service incentive leave .
He may use it as leave days or he may collect its monetary value.

42. San Juan de Dios Hospital R.A No. 5901- An Act Prescribing 40 The policy instruction is not valid.
Employees Association-AFW, et.al., Hours a Week of Labor for Government anf
Private Hospitals or Clinic Personnel
 v. NLRC and San Juan de Dios
Hospital
43. Pan American World Airways
System v. Pan American Employees
Association
44. University of Pangasinan Faculty
Union v. University of Pangasinan
Working while Eating/ On Call
Semestral Break
Reliance on Republic Act No. 5901, however, is misplaced for the said statute, as
correctly ruled by respondent NLRC, and has long been repealed with the passage
of the Labor Code on May 1, 1974.
A cursory reading of Article 83 of the Labor Code betrays petitioners’ position
that “hospital employees” are entitled to “a full weekly salary with paid two (2)
days’ off if they have completed the 40-hour/5-day workweek”.
What Article 83 merely provides are: (1) the regular office hour of eight hours a
day, five days per week for health personnel, and (2) where the exigencies of
service require that health personnel work for six days or forty-eight hours then
such health personnel shall be entitled to an additional compensation of at least
thirty percent of their regular wage for work on the sixth day.
There is nothing in the law that supports then Secretary of Labor’s assertion that
“personnel in subject hospitals and clinics are entitled to a full weekly wage for
seven (7) days if they have completed the 40-hour/5-day workweek in any given
workweek”.
Needless to say, the Secretary of Labor exceeded his authority by including a two
days off with pay in contravention of the clear mandate of the statute.
During the so called meal period, the mechanics were required to
stand by for emergency work, and that if they happened not to be
available when called, they were reprimanded by the lead man. The
Industrial Court’s order for a permanent adoption of a straight 8-hour shift
including the meal period was but a consequence of its finding that the meal hour
was not one of complete rest, but was actually a work hour.
PD’s 1614, 1634, 1678 and 1713, provide on "Allowances of Fulltime Employees
. . ." that "Employees shall be paid in full the required monthly allowance
regardless of the number of their regular working days if they incur no absences
during the month. If they incur absences without pay, the amounts corresponding
to the absences may be deducted from the monthly allowance . . ." ; and on "Leave
of Absence Without Pay", that "All covered employees shall be entitled to the
allowance provided herein when they are on leave of absence with pay."
It is beyond dispute that the petitioner’s members are full-time employees
receiving their monthly salaries irrespective of the number of working days or
teaching hours in a month. However, they find themselves in a most peculiar
situation whereby
they are forced to go on leave during semestral breaks. These semestral breaks are
in the nature of work interruptions beyond the employees’ control. The duration
of the semestral break varies from year to year dependent on a variety of
circumstances affecting at times only the private respondent but at other times all
educational institutions in the country. As such, these breaks cannot be considered
as absences within the meaning of the law for which deductions may be made from
monthly allowances.

45. National Development Company v.
CIR
When Meal Time Worked; Continuous
Shifts
The "No work, no pay" principle does not apply in the instant case. The petitioner’s
members received their regular salaries during this period. It is clear from the
aforequoted provision of law that it contemplates a "no work" situation where the
employees voluntarily absent themselves. Petitioners, in the case at bar, certainly
do not, ad voluntatem, absent themselves during semestral breaks. Rather, they are
constrained to take mandatory leave from work. For this they cannot be faulted
nor can they be begrudged that which is due them under the law. To a certain
extent, the private respondent can specify dates when no classes would be held.
Surely, it was not the intention of the framers of the law to allow employers to
withhold employee benefits by the simple expedient of unilaterally imposing "no
work" days and consequently avoiding compliance with the mandate of the law
for those days.
These semestral breaks are in the nature of work interruptions beyond the
employees’ control. The duration of the semestral break varies from year to year
dependent on a variety of circumstances affecting at times only the private
respondent but at other times all
educational institutions in the country. As such, these breaks cannot be considered
as absences within the meaning of the law for which deductions may be made from
monthly allowances. The "No work, no pay" principle does not apply in the instant
case. The petitioner’s members received their regular salaries during this period.
It is clear from the aforequoted provision of law that it contemplates a "no work"
situation where the employees voluntarily absent themselves. Petitioners, in the
case at bar, certainly do not, ad voluntatem, absent themselves during semestral
breaks. Rather, they are constrained to take mandatory leave from work. For this
they cannot be faulted nor can they be begrudged that which is due them under the
law.
Sec. 1, Com. Act No. 444, as amended:
“The legal working day for any person employed by another shall be of not more
than eight hours daily. When the work is not continuous, the time during which
the laborer is not working and can leave his working place and can rest completely
shall not be counted.”
Under the law, the idle time that an employee may spend for resting and during
which he may leave the spot or place of work though not the premises of his
employer, is not counted as working time only where the work is broken or is not
continuous.
The determination as to whether work is continuous or not is mainly one of fact.
In this case, the CIR's finding that work in the NDC was continuous and did not
permit employees and laborers to rest completely is not without basis in evidence.
Therefore the mealtime breaks should be counted as working time for purposes of
overtime compensation.
46. Mercury Drug Co. v. Nardo Dayao Night Shift Differential Not Waivable CIR’s ruling on additional compensation for work done at night is therefore, not
without evidence, as night time services could well be seen on their respective
daily time records. Moreover, Mercury Drug did not deny that the private
respondents rendered night time work.

The “waiver rule” is not applicable in the case at bar. Additional compensation for
night time work is founded on public policy, hence the same cannot be waived.
On this matter, the Supreme Court believes that the respondent court acted
according to justice and equity and the substantial merits of the case, without
regard to technicalities or legal forms and should be sustained.

After the passage of R.A. 875, the Supreme Court has not only upheld the
industrial court’s assumption of jurisdiction over cases for payment of additional
compensation for word rendered on Sundays and holidays and for night work but
has also supported such court’s ruling that work performed at night should be paid
more than work done at daytime, and that if that work is done beyond the worker’s
regular hours of duty, he should also be paid additional compensation for overtime
work. Besides, to hold otherwise would amount to further curtailment of the
jurisdiction of industrial court to an extent which may defeat the purpose of the
Magna Carta to prejudice Labor.

47. Odango v. NLRC Paid Unworked Days of a Monthly-paid The Court has long ago declared void Section 2, Rule IV of Book III of the
Employee Omnibus Rules Implementing the Labor Code. In Insular Bank of Asia v. Inciong,
the court ruled as follows:

Section 2, Rule IV, Book III of the Implementing Rules and Policy Instructions
No. 9 are null and void since in the guise of clarifying the Labor Codes provisions
on holiday pay, they in effect amended them by enlarging the scope of their
exclusion.

The Labor Code is clear that monthly-paid employees are not excluded from the
benefits of holiday pay. However, the implementing rules on holiday pay
promulgated by the then Secretary of Labor excludes monthly-paid employees
from the said benefits by inserting, under Rule IV, Book III of the implementing
rules, Section 2 which provides that monthly-paid employees are presumed to be
paid for all days in the month whether worked or not.

Even assuming that Section 2, Rule IV of Book III is valid, petitioners claim will
still fail. The basic rule in this jurisdiction is no work, no pay. The right to be paid
for un-worked days is generally limited to the ten legal holidays in a year.
Petitioners claim is based on a mistaken notion that Section 2, Rule IV of Book III
gave rise to a right to be paid for un-worked days beyond the ten legal holidays.
In effect, petitioners demand that ANTECO should pay them on Sundays, the un-
 worked half of Saturdays and other days that they do not work at all. Petitioners
line of reasoning is not only a violation of the no work, no pay principle, it also
gives rise to an invidious classification, a violation of the equal protection clause.
Sustaining petitioners argument will make monthly-paid employees a privileged
class who are paid even if
they do not work.

48. Pigcaulan v. Security and Credit Substantial Evidence; Burden of Proof THERE WAS NO SUBSTANTIAL EVIDENCE TO SUPPORT THE GRANT
Investigation OF OVERTIME PAY.

The Labor Arbiter relied heavily on the itemized computations they submitted
which he considered as representative daily time records to substantiate the award
of salary differentials. The NLRC then sustained the award on the ground that
there was substantial evidence of underpayment of salaries and benefits.

We find that both the Labor Arbiter and the NLRC erred in this regard. The
handwritten itemized computations are self-serving, unreliable and unsubstantial
evidence to sustain the grant of salary differentials, particularly overtime pay.
Unsigned and unauthenticated as they are, there is no way of verifying the truth
of the handwritten entries stated therein. Written only in pieces of paper and solely
prepared by Canoy and Pigcaulan, these representative daily time records, as
termed by the Labor Arbiter, can hardly be considered as competent evidence to
be used as basis to prove that the two were underpaid of their salaries.

Hence, in the absence of any concrete proof that additional service beyond the
normal working hours and days had indeed been rendered, we cannot affirm the
grant of overtime pay to Pigcaulan.

However, with respect to the award for holiday pay, service incentive leave pay
and 13th month pay, we affirm and rule that
Pigcaulan is entitled to these benefits [under the Labor Code, Article 94-95].

SCII failed to show any other concrete proof by means of records, pertinent files
or similar documents reflecting that the specific claims have been paid. With
respect to 13th month pay, SCII presented proof that this benefit was paid but only
for the years 1998 and 1999. To repeat, the burden of proving payment of these
monetary claims rests on SCII, being the employer.

The CA erred in dismissing the claims instead of remanding the case to the Labor
Arbiter for a detailed computation of the
judgment award.

PETITION GRANTED. Pigcaulan is hereby declared entitled to holiday pay and

serviceincentive leave pay for the years 1997-2000 and proportionate 13th month
pay for the year 2000. The case is REMANDED to the Labor Arbiter for further
 proceedings to determine the exact amount and to make a detailed computation of
the monetary benefits due.
49. Bahia Shipping v. Chua Overtime Work of Seaman (1) Chua was illegally dismissed. No other evidence to substantiate that Chua was
forewarned for the first and second time for any infraction or offense.

(2) In Stolt-Nielsen vs NLRC, where the NLRC was questioned for awarding to
an illegally dismissed overseas worker fixed overtime pay equivalent to the
unexpired portion of the latter's contract. In resolving the question, the Court held
that: although an overseas employment contract may guarantee the right to
overtime pay, entitlement to such benefit MUST FIRST BE ESTABLISHED,
otherwise the same cannot be allowed; a seaman, by the very nature of his job,
stays on board a ship or vessel beyond the regular 8hr duty. For the employer to
give him overtime pay for the extra hours when he might be not working would
be unreasonable and unfair.

Hence, it being improbable that respondent rendered overtime work during

the unexpired term of his contract, the inclusion of his "guaranteed
overtime" pay into his monthly salary as basis in the computation of his
salaries for the entire unexpired period of his contract has no factual or legal
basis and the same should have been disallowed.

Decision of the Court of Appeals are AFFIRMED.

50. Eastern Telecomm. V. Telecomm A bonus is a gratuity or act of liberality of the giver which the recipient has no
Employees’ Union right to demand as a matter of
right. The grant of a bonus is basically a management prerogative which cannot
be forced upon the employer
who may not be obliged to assume the onerous burden of granting bonuses or other
benefits aside from the
employee's basic salaries or wages.

A bonus becomes a demandable or enforceable obligation when it is made part of

the wage or salary or
compensation of the employee.

In the case at bench, it is indubitable that ETPI and ETEU agreed on the inclusion
of a provision for the grant of
14th, 15th and 16th month bonuses in the 1998-2001 CBA Side Agreement, as
well as in the 2001-2004 CBA
Side Agreement. The provision states:

Employment-Related Bonuses

The Company confirms that the 14th, 15th and 16th month bonuses (other than the
13th month
pay)
are granted.
The above provision clearly provides for the giving of 14th, 15th and 16th month
bonuses without
qualification. The wording of the provision does not allow any other interpretation.
There were no
conditions specified in the CBA Side Agreements for the grant of the benefits
contrary to the
claim of ETPI that the same is justified only when there are profits earned by the
company. Terse and
clear, the said provision does not state that the subject bonuses shall be made to
depend on the
ETPI's financial standing or that their payment was contingent upon the realization
of profits. Neither
does it state that if the company derives no profits, no bonuses are to be given to
the employees. In
fine, the payment of these bonuses was not related to the profitability of business
operations. In the absence of any proof that ETPI’s consent was vitiated by fraud,
mistake or duress, it is presumed that
it entered into the Side Agreement voluntarily, that it had full knowledge of the
contents thereof and that it
was aware of its commitment under the contract. Verily, by virtue of its
incorporation in the CBA Side
Agreements, the grant of 14th, 15th and 16th month bonuses has become more
than just an act of generosity
on the part of ETPI but a contractual obligation it has undertaken. ETPI cannot
insist on business losses
as a basis for disregarding its undertaking.

The Court finds that its act of granting the same has become an established
company practice such that it
has virtually become part of the employee’s salary or wage.

To be considered a regular practice, the giving of the bonus should have been done
over a long period of
time, and must be shown to have been consistent and deliberate. The test or
rationale of this rule requires
an indubitable showing that the employer agreed to continue giving the benefits
knowing fully well that said
employees are not covered by the law requiring payment thereof.

Records show that ETPI, aside from complying with the regular 13th month bonus,
has been further giving its
employees 14th month bonus every April as well as 15th and 16th month bonuses
every December of the
year, without fail, from 1975 to 2002 or for 27 years whether it earned profits or
not. The considerable length

51. Manila Bnaking Corp. v. NLRC
52. Neri v. NLRC
of time ETPI has been giving the special grants to its employees indicates a
unilateral and voluntary act on its
part to continue giving said benefits knowing that such act was not required by
law. Accordingly, a company
practice in favor of the employees has been established and the payments made by
ETPI pursuant thereto
ripened into benefits enjoyed by the employees.
Therefore, the giving of the subject bonuses cannot be peremptorily
withdrawn by ETPI without violating Article 100 of the Labor Code:
Art. 100. Prohibition against elimination or diminution of benefits.
Nothing in this Book shall be construed to eliminate or in any way
diminish supplements, or other employee benefits being enjoyed at the
time of promulgation of this Code.
The rule is settled that any benefit and supplement
being enjoyed by the employees cannot be
reduced, diminished, discontinued or eliminated by
the employer. The principle of non-diminution of
benefits is founded on the constitutional mandate to
protect the rights of workers and to promote their
welfare and to afford labor full protection.
The Court held that the respondents were not entitled to the said benefits as they
were in the nature of bonuses.
a. Not a demandable and enforceable obligation
-Act of Liberality from the employer to the employee
-Management prerogative
b. Poor Performance
-Bonuses may be seen as rewards for a commendable performance
Art. 106. Contractor or subcontractor. — . . . There is "labor-only"
contracting where the person supplying workers to an employer does
not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the
workers recruited by such persons are performing activities which
are directly related to the principal business of such employer
BCC is an independent contractor. One is not required to possess
BOTH a) substantial capital and b) investment in the form of tools,
equipment, machinery, work premises, among others, to be
considered a job contractor. Possession of either attribute is
sufficient for the purposes of complying with one of the conditions
for the establishment of permissible job contracting. In this case,
BCC proved it had substantial capital of P1M.
On the issue of control, petitioners do not deny that they were
selected and hired by BCC before being deployed in FEBTC.

53. AFP Mutual Benefit Assoc. v.
NLRC
BCC likewise acknowledges that petitioners are its employees.
The record is replete with evidence disclosing the BCC
maintained supervision and control over petitioners through its
Housekeeping and Special Services Division.
Petitioners reported for work wearing the prescribed uniform
of BCC: leaves for absence were filed directly with the BCC
and salaries were drawn only from BCC. As a matter of fact,
Neri even secured a certificate from BCC that she was
employed by the latter. More importantly, under the terms and
conditions of the contract, it was BCC alone which had the
power to reassign petitioners. These are indications that BCC
carries an independent business according to its own manner
and method, free from the control and supervision of its
principal in all matters except as to the results thereof.
The Court has already taken judicial notice of the general
practice adopted in several government and private
institutions and industries of hiring independent
contractors to perform special services ranging from
janitorial, security and even technical or other specific
services such as those performed by Neri and Cabelin.
While these services may be considered directly related to
the principal business of the employer, nevertheless they
are not necessary in the conduct of the principal business
of the employer.
Court has applied the "four-fold" test in determining
the existence of employer-employee relationship.
This test considers the following elements: (1) the
power to hire; (2) the payment of wages; (3) the
power to dismiss; and (4) the power to control.
Under Memo Circulars No. 2-81 and 2-85, dated December 17, 1981
and August 7, 1985, respectively, issued by the Insurance
Commissioner, insurance agents are barred from serving more than
one insurance company, in order to protect the public and to enable
insurance companies to exercise exclusive supervision over their
agents in their solicitation work.
Thus, the exclusivity restriction clearly springs from a regulation issued
by the Insurance Commission, and not from an intention by petitioner
to establish control over the method and manner by which private
respondent shall accomplish his work. This feature is not meant to
change the nature of the relationship between the parties, nor does it
necessarily imbue such relationship with the quality of control
envisioned by the law.
Insurance solicitors are never affected or covered by the rules and
 regulations concerning employee conduct and penalties for violations
thereof, work standards, performance appraisals, merit increases,
promotions, absenteeism/attendance, leaves of absence,
management-union matters, employee benefits and the like.

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.
54. Phil. Bank of Communications v. YES. The eleven (11) messengers were thus supposed to
NLRC render “temporary” services for an indefinite or unstated
period of time. Ricardo Orpiada himself was assigned to
the bank’s offices from June 25, 1975 and rendered
services to the bank until sometime in October 1976, or
a period of about sixteen months. Under the Labor
Code, however, any employee who has rendered at least
one year of service, whether such service is continuous
or not, shall be considered a regular employee (Article
281, second paragraph). Assuming that Orpiada could properly
be regarded as a casual (as
distinguished from a regular)
employee of the bank, he becomes
entitled to be regarded as a regular
employee of the bank as soon as he
had completed one year of service to
the bank.
55. Tabas v. California Manufacturing The existence of an employer-employee relationship is a
Co. question of law and cannot be made subject to agreement. The
stipulations in the manpower supply agreement will not erase either
party’s obligations as an employer. Livi is a labor-only contractor,
notwithstanding the provisions in the agreement. The nature of one’s
business is not determined by self-serving appellations but by test
provided by statute and the prevailing case law.

California’s contention that the workers are not performing

activities which are directly related to its general business of
manufacturing is untenable. The promotion or sale of products,
including the task of occasional price tagging, is an integral part of the
manufacturing business. Livi as a placement agency had simply
supplied the manpower necessary for California to carry out its
merchandising activities, using the latter’s premises and equipment.
Merchandising is likewise not a specific project because it is an
activity related to the day-to-day operations of California. Based on
Article 106 of the Labor Code, the labor-only contractor is considered
merely an agent of the employer and liability must be shouldered by
either one or by both. Petitioners are ordered reinstated as regular
employees.