(LOGO) 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON M.
MARQUEZ | FIRST SEMESTER | 2020-2021
LABOR LAW REVIEW 2020-2021
EH403 CASE DIGESTS
TOPIC 2: BASIC PRINCIPLES
01 JOAQUIN LU, Petitioner, vs
TIRSO ENOPIA ET. AL.,
GR NO 197899, March 6, 2017, PERALTA, J..
Control test (4-fold test) - actual control not
required.
It should be remembered that the control test merely
calls for the existence of the right to control, and not
necessarily the exercise thereof.
Respondents were hired by a piado (master fishermen)
as crew member for fishing operations of a Mommy Gina
Tuna Resources whose sole proprietor is the petitioner.
The arrangement was 55% for respondents, 45% for
petitioners and 4% backing incentive based on the catch
of the fishing operations. Petitioner never controlled
their day to day operations but kept radio
communications. Petitioner’s SSS submission listed
respondents as employees. Respondent also acquired
cash advances or Vales from the petitioner directly.
After 2 years, petitioner refused to sign another
agreement. Respondents filed a case for illegal
dismissal. Petitioner’s defense was the lack of employer-
employee relationship. He never controlled the day to
day operations.
Was there an employer-employee relationship? YES.
In this case, petitioner contends that it was the piado
who hired respondents. However, it was shown by the
latter's evidence that the employer stated in their Social
Security System (SSS) online inquiry system printouts
was MGTR, which is owned by petitioner. We have gone
over these printouts and found that the date of the SSS
remitted contributions coincided with the date of
respondents' employment with petitioner. Petitioner
failed to rebut such evidence. Thus, the fact that
petitioner had registered the respondents with SSS is
proof that they were indeed his employees. The
coverage of the Social Security Law is predicated
on the existence of an employer-employee
relationship.
Moreover, the records show that the 4% backing
incentive fee which was divided among the fishermen
engaged in the fishing operations approved by petitioner
was paid to respondents after deducting the latter's
respective vale or cash advance. Notably, even the
piado's name was written in the backing incentive fee
sheet with the corresponding vale which was deducted
from his incentive fee. If indeed a joint venture was
agreed upon between petitioner and respondents,
why would these fishermen obtain vale or cash
advance from petitioner and not from the piado
who allegedly hired and had control over them.
1
It was established that petitioner exercised control over
respondents. It should be remembered that the
control test merely calls for the existence of the
right to control, and not necessarily the exercise
thereof. It is not essential that the employer actually
supervises the performance of duties by the employee.
It is enough that the former has a right to wield the
power.
Petitioner admitted in his pleadings that he had contact
with respondents at sea via the former's radio operator
and their checker. He claimed that the use of the radio
was only for the purpose of receiving requisitions for the
needs of the fishermen in the high seas and to receive
reports of fish catch so that they can then send service
boats to haul the same. However, such
communication would establish that he was
constantly monitoring or checking the progress of
respondents' fishing operations throughout the duration
thereof, which showed their control and supervision
over respondents' activities.
02 JOHN E.R. REYES and MERWIN JOSEPH
REYES, Petitioners, vs.
ORICO DOCTOLERO, ROMEO AVILA, GRANDEUR
SECURITY AND SERVICES CORPORATION, and
MAKATI CINEMA SQUARE,
GR NO 185597, August 2, 2017,
JARDELEZA, J.
Client of Security Agency - NOT employers of
security guards
Similarly, we find no employer-employee relationship
between MCS and respondent guards. The guards were
merely assigned by Grandeur to secure MCS' premises
pursuant to their Contract of Guard Services. Thus, MCS
cannot be held vicariously liable for damages caused by
these guards' acts or omissions
MCS is mall company. Grandeur is their security agency
under Guard Services Contract. Doctolero and Avila are
security guards hired by Granduer to be on duty for
MCS’s parking lot.
Petitioners John and Merwin were injured by the security
guards and filed a case for damages against the guards,
the security agency and the mall. Because the guards
didn’t file an answer despite service of summons, they
were on default. The security agency’s defense was on
due diligence. The mall’s defense was lack of employer-
employee relationship.
While Doctolero was on duty at the ramp of the exit
driveway of MCS's basement parking, John took over
the left lane and insisted entry through the basement
parking's exit driveway. Knowing that this is against
traffic rules, Doctolero stopped John, prompting the
latter to alight from his vehicle and confront Doctolero.
With his wife unable to pacify him, John punched and
kicked Doctolero, hitting the latter on his left face and
(LOGO) 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON M. MARQUEZ | FIRST SEMESTER | 2020-2021
stomach. Doctolero tried to step back to avoid his
aggressor but John persisted, causing Doctolero to draw
his service firearm and fire a warning shot. John ignored
this and continued his attack.
He caught up with Doctolero and wrestled with him to
get the firearm. This caused the gun to fire off and hit
John's leg. Mervin then ran after Doctolero but was shot
on the stomach by security guard Avila.
Is there employee-employer relationship between the
mall and the guards? NO.
As a general rule, one is only responsible for his
own act or omission. This general rule is laid down in
Article 2176 of the Civil Code, which provides:
Art. 2176. Whoever by act or omission causes
damage to another, there being fault or
negligence, is obliged to pay for the damage
clone. Such fault or negligence, if there is no
pre-existing contractual relation between the
parties, is called a quasi-delict and is governed
by the provisions or this Chapter.
The law, however, provides for exceptions when it
makes certain persons liable for the act or
omission of another. One exception is an employer
who is made vicariously liable for the tort committed by
his employee under paragraph 5 of Article 2180.25
Here, although the employer is not the actual tortfeasor,
the law makes him vicariously liable on the basis of the
civil law principle of paterfamilias for failure to exercise
due care and vigilance over the acts of one's
subordinates to prevent damage to another.
It must be stressed, however, that the above rule
is applicable only if there is an employer-
employee relationship. This employer-employee
relationship cannot be presumed but must be
sufficiently proven by the plaintiff. The plaintiff must
also show that the employee was acting within the scope
of his assigned task when the tort complained of was
committed. It is only then that the defendant, as
employer, may find it necessary to interpose the
defense of due diligence in the selection and supervision
of 29 employees.
In Mamaril v. The Boy Scout of the Philippines, we
found that there was no employer-employee
relationship between Boy Scout of the Philippines
(BSP) and the security guards assigned to it by an
agency pursuant to a Guard Service Contract. In
the absence of such relationship, vicarious liability under
Article 2180 of the Civil Code cannot apply as against
BSP. 31 Similarly, we find no employer-employee
relationship between MCS and respondent guards. The
guards were merely assigned by Grandeur to secure
MCS' premises pursuant to their Contract of Guard
Services. Thus, MCS cannot be held vicariously liable for
damages caused by these guards' acts or omissions.
2
03 THE PROVINCIAL BUS OPERATORS
ASSOCIATION OF THE PHILIPPINES et. al. vs.
DOLE et. al.,
GR NO 202275, July 17, 2018, EN BANC,
LEONEN J.
The relations between capital and labor are not
merely contractual but impressed with public
interest
The relations between capital and labor are not merely
contractual as provided in Article 1700 of the Civil Code.
By statutory declaration, labor contracts are impressed
with public interest and, therefore, must yield to the
common good. Labor contracts are subject to special
laws on wages, working conditions, hours of labor, and
similar subjects. In other words, labor contracts are
subject to the police power of the State.
Provincial Bus Operators Association of the Philippines
et al. assails the constitutionality of various issuances,
to wit: Department of Labor and Employment (DOLE)
Department Order No. 118-12 (Rules and Regulations
Governing the Employment and Working Conditions of
Drivers and Conductors in the Public Utility Bus
Transport Industry); National Wages and Productivity
Commission's Guidelines No. 1, series of 2012,
(Operational Guidelines on Department Order No. 118-
12); and LTFRB Memorandum Circular No. 2012-001,
on the ground that such issuances violate the
constitutional rights of public utility bus operators to due
process of law, equal protection of the laws, and non-
impairment of obligation of contracts.
Specifically, they argued that it will impair existing
obligations under their collective bargaining agreements
wherein they agreed with their bus drivers and
conductors on a commission or boundary basis.
The subject issuances were issued in order to ensure
road safety and address the risk-taking behavior of bus
drivers brought about by the existing compensation
system (commission or boundary system) and the lack
of social welfare benefits accorded to the bus drivers
and conductors.
Provided therein that all public utility operators are
mandated to adopt part-fixed-part-performance-based
compensation system under the pain of revocation or
non-issuance or non-renewal of their respective
franchises.
Whether or not the subject issuances are
unconstitutional.
NO. First, the subject issuances are not violative of the
due process clause—procedural and substantive.
Procedural due process requires prior notice and hearing
however, such is not required when an administrative
agency exercises its quasi-legislative power. Here,
(LOGO) 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON M. MARQUEZ | FIRST SEMESTER | 2020-2021
Department Order No. 118-12 and Memorandum
Circular No. 2012-001 were issued in the exercise of
quasi-legislative powers of the DOLE and the LTFRB,
respectively. As such, notice and hearing are not
required for their validity.
Substantive due process on the other hand requires that
laws be grounded on reason and be free from
arbitrariness. Such requirement is satisfied if the
deprivation is done in the exercise of the police power
of the State. And it has been declared by courts that
laws requiring the payment of minimum wage, security
of tenure, and traffic safety are not violative of due
process for being valid police power legislations.
Moreover, the subject issuances are not unreasonable
for the objective of such issuances was to enhance the
economic status of bus drivers and conductors and to
protect the general welfare of the riding public. Lastly,
Certificates of public convenience are franchises which
are always subject to amendment, repeal, or
cancellation. Thus, the subject issuances do not violate
substantive due process.
Second, the subject issuances does not violate the non-
impairment clause.
Similar to the right to due process, the right to non-
impairment yields to the police power of the State.
In this case, the petitioners argued that the subject
issuances would force them to abandon their ‘time-
honored’ employment contracts or arrangement with
their drivers. However, the relations between
capital and labor are not merely contractual as
provided in Article 1700 of the Civil Code. By
statutory declaration, labor contracts are
impressed with public interest and, therefore,
must yield to the common good. Labor contracts are
subject to special laws on wages, working conditions,
hours of labor, and similar subjects. In other words,
labor contracts are subject to the police power of the
State.
04 COUNCIL OF TEACHERS AND STAFF OF
COLLEGES AND UNIVERSITIES OF THE
PHILIPPINES et al v. SECRETARY OF EDUCATION
et al.,
GR No. 216930, October 9, 2018, CAGUIOA, J
Section 3, Article XIII of the 1987 Constitution is
not self-executory
Section 3, Article XIII, on the protection of labor and
security of tenure is not self-executory. It does not
automatically confer judicially demandable and
enforceable rights and cannot, on its own, be a basis for
a declaration of unconstitutionality.
To be at par with international standards and in line with
the country's commitment in EFA (Education for All)
3
2015 Goals, the Philippine Congress, on May 15, 2013,
passed the K to 12 Law. Related issuances was
thereafter enacted for the implementation of the said
law.
In this case, the K to 12 Law and all related issuances
were assailed as unconstitutional by petitioners.
One of the many argument raised was that the K to 12
Law was incomplete for it failed to provide sufficient
standards by which the DepEd, CHED and TESDA, might
be guided in addressing the possible impact of the
implementation of the K to 12 Law on labor in
contravention with the constitutional provisions on right
of labor to full protection.
Whether or not K to 12 Law and related issuances are
unconstitutional.
NO. The fact that the K to 12 Law did not have any
provision on labor does not make said law incomplete.
In Manila Prince Hotel v. Government Service Insurance
System, it was ruled that all provisions of the
Constitution are presumed self-executing.
This pronouncement notwithstanding, however, the
Court has, in several cases, had occasion to already
declare several Constitutional provisions as not self-
executory.
Section 3, Article XIII, on the protection of labor and
security of tenure, was declared by the Court in Agabon
v. National Labor Relations Commission, as not self-
executory. Reiterating Agabon, the Court explained in
Serrano v. Gallant Maritime Services, Inc., that Section
3, Article XIII, does not automatically confer judicially
demandable and enforceable rights and cannot, on its
own, be a basis for a declaration of unconstitutionality.
Section 3 of Article XIII cannot, on its own, be a
source of a positive enforceable right for the
provisions on social justice require legislative
enactments for their enforceability. Otherwise, it
may unwittingly risk opening the floodgates of litigation
to every worker or union over every conceivable
violation of so broad a concept as social justice for labor.
Thus, it must be stressed that Section 3, Article XIII
does not directly bestow on the working class any actual
enforceable right, but merely clothes it with the
status of a sector for whom the Constitution urges
protection through executive or legislative action
and judicial recognition.
Here, the petitioners did not provide any other legal
bases other than invoking the said constitutional
provision. Thus, K to 12 Law and related issuance
cannot be declared unconstitutional on such ground.
(LOGO) 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON M. MARQUEZ | FIRST SEMESTER | 2020-2021
05 APELANIO V. ARCANYS, INC.
G.R. NO. 227098, NOVEMBER 14, 2018
THIRD DIVISION, PERALTA
Employer-employee relationship; Illegal
dismissal; Contract of Adhesion
It is a basic rule in evidence that each party must prove
his affirmative allegations. In this case, Apelanio failed
to prove that he was made to work as an employee
beyond his probationary period. He cannot claim to be
illegally dismissed if he was not an employee in the first
place.
Apelanio was hired by respondents Arcanys, Inc. as a
Usability/Web Design Expert. He was placed on a
"probationary status" for a period of six months. During
his 6th month evaluation, petitioner was served a letter
informing him that respondents were not converting his
status into a regular employee since his performance fell
short of the stringent requirements and standards set
by respondent corporation.
When his probationary contract was terminated,
petitioner claimed that he was immediately offered a
retainership agreement lasting from October 10, 2012
until October 24, 2012, which involved a similar scope
of work and responsibilities.
After the lapse of the retainership agreement, petitioner
was offered another retainership agreement, from
October 25, 2012 to November 12, 2012, again with an
identical scope of work but at a reduced daily rate.
He then refused to sign the second retainership
agreement and filed a complaint for illegal dismissal. He
claims that he is a regular employee since he was made
to continue working beyond his probationary period.
Was Apelanio’s dismissal valid?
YES. Employment contracts are contracts of adhesion,
defined as one in which one of the parties imposes a
ready-made form of contract, which the other party may
accept or reject, but which the latter cannot modify.
These types of contracts have been declared as binding
as ordinary contracts, the reason being that the party
who adheres to the contract is free to reject it entirely.
However, in this case, in the retainership agreements
provided by petitioner, his signature or "adherence" is
notably absent. As a result, said retainership
agreements remain ineffectual and cannot be used as
evidence against respondents.
4
Furthermore, a review of the retainership agreements
indicates that petitioner was merely engaged as a
consultant, in relation to hacking incidents endured by
respondents. Petitioner merely alleged that he was hired
as an employee under said retainership agreements, but
has yet to provide evidence to support such claim. It is
a basic rule in evidence that each party must prove his
affirmative allegations.
06 Dr. Loreche-Amit v. Cagayan De Oro Medical
Center
G.R. NO. 216635, JUNE 3, 2019
SECOND DIVISION, REYES, JR.
Four-fold Test; Economic Reality Test; Jurisdiction
of Labor Tribunals
The power to control the work of the employee is
considered the most significant determinant of the
existence of an employer-employee relationship. This
test is premised on whether the person for whom the
services are performed reserves the right to control both
the end achieved and the manner and means used to
achieve that end.
The rule is that where a person who works for another
performs his job more or less at his own pleasure, in the
manner he sees fit, not subject to definite hours or
conditions of work, and is compensated according to the
result of his efforts and not the amount thereof, no
employer-employee relationship exists.
Dr. Mary Jean P. Loreche-Amit started working with
Cagayan De Oro Medical Center, Inc. (CDMC), sometime
in May 1996 as Associate Pathologist. Later, CDMC's
Board of Directors formally appointed petitioner as Chief
Pathologist for five years or until May 15, 2011.
On June 13, 2007, (CDMC's) Board of Directors passed
a resolution, recalling petitioner's appointment as Chief
Pathologist. This prompted petitioner to file a complaint
for illegal dismissal, contending that she was dismissed
by CDMC from her work without just cause and due
process.
The Labor Arbiter, NLRC, and the CA all found that
petitioner is a corporate officer of the hospital because
of her appointment by the Board of Directors through a
resolution; thus, matters relating to the propriety of her
dismissal is under the jurisdiction of the Regional Trial
Court.
Is petitioner an employee of CDMC?
NO. First, to be considered as a corporate officer, the
designation must be either provided by the Corporation
Codeor the by-laws of the corporation.
(LOGO) 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON M. MARQUEZ | FIRST SEMESTER | 2020-2021

In this case, nowhere in the records could the by-laws
of CDMC be found. An appointment through the
issuance of a resolution by the Board of Directors does
not make the appointee a corporate officer. It is
necessary that the position is provided in the
Corporation Code or in the by-laws.
However, this is not an automatic declaration that
petitioner is an employee of CDMC. The four-fold test,
to wit: 1) the selection and engagement of the
employees; 2) the payment of wages; 3) the power of
dismissal; and 4) the power to control the employee's
conduct, must be applied to determine the existence of
an employer-employee relationship.
In this case, it is apparent that CDMC exercised the
power to select and supervise petitioner as the
Pathologist. She was likewise paid compensation which
is at 4% of the gross receipts of the Clinical Section of
the laboratory.
However, CDMC does not exercise the power of control
over petitioner. Petitioner was working for two other
hospitals aside from CDMC, not to mention those other
hospitals which she caters to when her services are
needed. Such fact evinces that petitioner controls her
working hours.
On this note, relevant is the economic reality test which
this Court has adopted in determining the existence of
employer-employee relationship. Under this test, the
economic realities prevailing within the activity or
between the parties are examined, taking into
consideration the totality of circumstances surrounding
the true nature of the relationship between the parties.
The fact that petitioner continued to work for other
hospitals strengthens the proposition that petitioner was
not wholly economically dependent on CDMC.
employee relationship exists between the parties. This
was reversed by the NLRC and the CA.
Is there an employer-employee relationship between
the parties?
YES. Based on the totality of petitioner’s evidence as
well as respondent’s admissions, there exists such
relationship.
To determine the existence of an employer-employee
relationship, four elements generally need to be
considered, namely: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the
employee's conduct.
The court found the ID, gate passes, logsheets and trip
ticket presented by petitioner and respondent’s
admission that uniforms were given to petitioner, as
sufficient evidence of the relationship. Tablit cannot also
be considered as the employer for not having the
sufficient capital to pay petitioner’s salaries and not
having the power of control over him. It was
respondent, through its employee which exercised the
power of control over petitioner’s means and methods
when Fernandez was reprimanded when he failed to
properly store his butchering knives, came to work in
dirty clothes, reported for work drunk and not having an
ID. This shows that Kalookan Slaughterhouse, through
Tablit, was the one who engaged the petitioner, paid for
his salaries, and in effect had the power to dismiss him.
Further, the respondent exercised control over
petitioner's conduct through its employee. Kalookan
Slaughterhouse was the petitioner's employer and it
exercised its rights as an employer through its
employees.

07 Fernandez vs. Kalookan SlaughterHouse Inc

GR No. 225075, June 19, 2019
SECOND DIVISION, CAGUIOA

Four-Fold Test of employment relationship

To determine the existence of an employer-employee

relationship, four elements generally need to be
considered, namely: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the
employee's conduct.

Petitioner Fernandez, a butcher of respondent filed a

complaint for illegal dismissal against the latter.
Respondent denied the existence of employer-employee
relationship and asserted that petitioner was an
independent butcher working under its Operations
Supervisor, Tablit; that he was paid based on the hogs
he butchered; and only required to be in the
slaughterhouse when customers brought hogs for
slaughtering. The Labor Arbiter held that employer-
5