MANAGERIAL EMPLOYEES V.

MANAGERIAL STAFF/SUPERVISORS interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but requires the use of
Clientlogic Philippines, Inc. v. Castro, G.R. No. 186070, April 11, 2011 independent judgment. All employees not falling within any of the above definitions are
Article 212 (m) of the Labor Code defines a managerial employee as “one who is vested considered rank-and-file employees for purposes of this Book.
with powers or prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to In the pursuit of its legitimate business interest, management has the prerogative to
effectively recommend such managerial actions. transfer or assign employees from one office or area of operation to another – provided
there is no demotion in rank or diminution of salary, benefits, and other privileges; and
Employees are considered occupying managerial positions if they meet all of the the action is not motivated by discrimination, made in bad faith, or effected as a form of
following conditions, namely: punishment or demotion without sufficient cause.
1) Their primary duty consists of management of the establishment in which
they are employed or of a department or subdivision thereof; FIELD PERSONNEL
2) They customarily and regularly direct the work of two or more employees
therein; Mercidar Fishing Corp. v. NLRC, G.R. No. 112574, October 8, 1998
3) They have the authority to hire or fire other employees of lower rank; or Art. 82 - "Field personnel" shall refer to non-agricultural employees who regularly
their suggestions and recommendations as to the hiring and firing and as to perform their duties away from the principal place of business or branch office of the
the promotion or any other change of status of other employees are given employer and whose actual hours of work in the field cannot be determined with
particular weight. reasonable certainty. (The provisions of the Title on Working Conditions & Rest Period –
according to par.1 of Art. 82 – do not apply, among others, to field personnel.)
They are considered as officers or members of a managerial staff if they perform the
Citing Union of Pilipro Employees (UFE) v. Vicar, which sought to explain the meaning of
following duties and responsibilities:
"whose actual hours of work in the field cannot be determined with reasonable
1) The primary duty consists of the performance of work directly related to
certainty", the Court said that, in deciding whether or not an employee's actual working
management of policies of their employer;
hours in the field can be determined with reasonable certainty, query must be made as to
2) Customarily and regularly exercise discretion and independent judgment;
whether or not such employee's time and performance is constantly supervised by the
3) (a) Regularly and directly assist a proprietor or a managerial employee
employer.
whose primary duty consists of management of the establishment in which
he is employed or subdivision thereof; or (b) execute under general
Dasco v. Philtranco, G.R. No. 211141, June 29, 2016
supervision work along specialized or technical lines requiring special
Guided by the foregoing norms, the NLRC properly concluded that the petitioners are not
training, experience, or knowledge; or (c) execute, under general
field personnel but regular employees who perform tasks usually necessary and
supervision, special assignment and tasks xxx.
desirable to the respondents’ business.
The test of “supervisory” or “managerial status” depends on whether a person possesses
In order to monitor their drivers and/or conductors, as well as the passengers and the
authority to act in the interest of his employer and whether such authority is not merely
bus itself, the bus companies put checkers, who are assigned at tactical places along the
routinary or clerical in nature, but requires the use of independent judgment. The
travel routes that are plied by their buses. The drivers and/or conductors are required to
position held by respondent and its concomitant duties failed to hurdle this test.
be at the specific bus terminals at a specified time. In addition, there are always
dispatchers in each and every bus terminal, who supervise and ensure prompt departure
Cruz v. BPI, G.R. No. 173357, February 13, 2013
at specified times and arrival at the estimated proper time. Obviously, these drivers
The basic premise for dismissal on the ground of loss of confidence is that the employees
and/or conductors cannot be considered as field personnel because they are under the
concerned hold a position of trust and confidence.
control and constant supervision of the bus companies while in the performance of their
work.
It is this breach that results in the employer's loss of confidence in the employee.
Petitioner holds a managerial status since she is tasked to act in the interest of her
DOMESTIC HELPERS; PERSONS IN THE PERSONAL SERVICE OF ANOTHER
employer as she exercises independent judgment when she approves pre-terminations
or withdrawals: she was remiss in her duties when she did not call the depositors to
Remington Industrial v. Castañeda, G.R. No. 169295-96, Nov. 20, 2006
appear before her, etc.
“The term ‘househelper’ as used herein is synonymous to the term ‘domestic servant’
and shall refer to any person, whether male or female, who renders services in and about
Echo 2000 Commercial Corp. v. Enriquez, G.R. No. 214092, January 11, 2016
the employer’s home and which services are usually necessary or desirable for the
"Managerial employee" is one who is vested with the powers or prerogatives to lay
maintenance and enjoyment thereof, and ministers exclusively to the personal comfort
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
and enjoyment of the employer’s family.”
discharge, assign or discipline employees. Supervisory employees are those who, in the
The criteria is the personal comfort and enjoyment of the family of the employer in the
home of said employer. While it may be true that the nature of the work of a
househelper, domestic servant or laundrywoman in a home or in a company staffhouse
may be similar in nature, the difference in their circumstances is that in the former
instance they are actually serving the family while in the latter case, whether it is a
corporation or a single proprietorship engaged in business or industry or any other
agricultural or similar pursuit, service is being rendered in the staffhouses or within the
premises of the business of the employer. In such instance, they are employees of the
company or employer in the business concerned entitled to the privileges of a regular
employee.
Atienza v. Saluta, G.R. No. 233413, June 17, 2019
The Kasambahay Law, on the other hand, made no mention of family drivers in the
enumeration of those workers who are covered by the law. This is unlike Article 141 of
the Labor Code.
Thus, Section 4(d) of the Kasambahay Law pertaining to who are included in the
enumeration of domestic or household help cannot also be interpreted to include family
drivers because the latter category of worker is clearly not included.
Section 2. Coverage—This IRR shall apply to all parties to an employment contract for
the services of the following Kasambahay, whether on a live-in or live-out arrangement,
such as but not limited to:
The following are not covered: (a) Service providers; (b) Family drivers;
WORKERS PAID BY RESULTS
Lambo v. NLRC, G.R. No. 111042, October 26, 1999
There is no dispute that petitioners were employees of private respondents although
they were paid not on the basis of time spent on the job but according to the quantity and
the quality of work produced by them. There are two categories of employees paid by
results:
(A) those whose time and performance are supervised by the employer.
(Here, there is an element of control and supervision over the manner as to how the
work is to be performed. A piece-rate worker belongs to this category especially if he
performs his work in the company premises.); and
(B) those whose time and performance are unsupervised.
(Here, the employer’s control is over the RESULT of the work. Workers on pakyao and
takay basis belong to this group.)
Both classes of workers are paid per unit accomplished. Piece-rate payment is generally
practiced in garment factories where work is done in the company premises, while
payment on pakyao and takay basis is commonly observed in the agricultural industry,
such as in sugar plantations where the work is performed in bulk or in volumes difficult
to quantify. Petitioners belong to the first category, i.e., supervised employees.
ENGAGED TO WAIT/IDLE TIME
Luzon Stevedoring Co. v. Luzon Marine Dept. Union, G.R. No. L-9265, April 29, 1957
Section 1 of Commonwealth Act No. 444, known as the Eight-Hour Labor Law, provides:
SEC. 1. 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.
The only thing to be done is to determine the meaning and scope of the term “working
place” used therein. As We understand this term, a laborer need not leave the premises
of the factory, shop or boat in order that his period of rest shall not be counted, it being
enough that he “cease to work”, may rest completely and leave or may leave at his will
the spot where he actually stays while working, to go somewhere else, whether within or
outside the premises of said factory, shop or boat. If these requisites are complied with,
the period of such rest shall not be counted.
National Development Co. v. CIR, G.R. No. L-15422, November 30, 1962, 6 SCRA 763
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. (Sec. 1, Com. Act No. 444)
It will be noted that, 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.
ON CALL
Sime Darby Pilipinas, Inc. v. NLRC, G.R. No. 119205, April 15, 1998
We agree, hence, we sustain petitioner. The right to fix the work schedules of the
employees rests principally on their employer. In the instant case petitioner, as the
employer, cites as reason for the adjustment the efficient conduct of its business
operations and its improved production. 6 It rationalizes that while the old work
schedule included a 30-minute paid lunch break, the employees could be called upon to
do jobs during that period as they were “on call.” Even if denominated as lunch break,
this period could very well be considered as working time because the factory employees
were required to work if necessary and were paid accordingly for working. Since the
employees are no longer required to work during this one-hour lunch break, there is no
more need for them to be compensated for this period. We agree with the Labor Arbiter
that the new work schedule fully complies with the daily work period of eight (8) hours
without violating the Labor Code.
ASSEMBLY TIME
Arica v. NLRC, G.R. No. 78210, February 28, 1989
The 30-minute assembly is a deeply-rooted, routinary practice of the employees, and the
proceedings attendant thereto are not infected with complexities as to deprive the
workers the time to attend to other personal pursuits. They are not new employees as to
require the company to deliver long briefings regarding their respective work
assignments. Their houses are situated right on the area where the farms are located,
such that after the roll call, which does not necessarily require the personal presence,
they can go back to their houses to attend to some chores. In short, they are not subject
to the absolute control of the company during this period, otherwise, their failure to
report in the assembly time would justify the company to impose disciplinary measures.
The evidence of the case demonstrates that the 30-minute assembly time was not
primarily intended for the interests of the employer, but ultimately for the employees to
indicate their availability or non-availability for work during every working day.
SEMESTRAL BREAK
University of Pangasinan Faculty Union v. University of Pangasinan, G.R. No. L-
63122, 127 SCRA 691
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 situation where they are forced to go on leave during semestral
breaks. These semestral breaks are in the nature of work interruptions beyond the
employees’ control. 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 provision of law
that it contemplates a “no work” situation where the employees voluntarily absent
themselves. Petitioners, in the case at bar, do not voluntarily 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.
The intention of the law is to grant ECOLA upon the payment of basic wages. Hence, we
have the principle of “No pay, no ECOLA” the converse of which finds application in the
case at bar. Petitioners cannot be considered to be on leave without pay so as not to be
entitled to ECOLA, for, as earlier stated, the petitioners were paid their wages in full for
the months of November and December of 1981, notwithstanding the intervening
semestral break.
OVERTIME / SEAFARERS
Legahi v. NLRC, G.R. No. 122240, November 18, 1999
Seamen are required to stay on board their vessels by the very nature of their duties, and
it is for this reason that, in addition to their regular compensation, they are given free
living quarters and subsistence allowances when required to be on board. It could not
have been the purpose of our law to require their employers to pay them overtime even
when they are not actually working; otherwise, every sailor on board a vessel would be
entitled to overtime for sixteen hours each a day, even if he spent all those hours resting
or sleeping in his bunk, after his regular tour of duty.
The correct criterion in determining whether or not sailors are entitled to overtime pay
is not, therefore, whether they were on board and cannot leave ship beyond the regular
eight working hours a day, but whether they actually rendered service in excess of said
number of hours.
OVERTIME / EVIDENCE
Lepanto Consolidated Mining v. Mamaril, G.R. No. 225725, January 16, 2019
In G & M (Phils.) Inc. v. Cruz, 496 Phil. 119, 124-125 (2005), we held that the burden of
proving payment of monetary claims rests on the employer since the pertinent
personnel files, payrolls, records, remittances and other similar documents—which will
show that overtime, differentials, service incentive leave, and other claims of workers
have been paid—are not in the possession of the worker but in the custody and absolute
control of the employer. Thus, the burden of showing with legal certainty that the
obligation has been discharged with payment falls on the debtor, in accordance with the
rule that one who pleads payment has the burden of proving it.
Then again the daily time sheets presented by petitioner are not substantial proof that
private respondents did not render overtime work. It can be plainly observed from these
daily time sheets that the number of hours worked by private respondents were uniform
and were written by the same hand. For this reason, these daily time sheets should be
taken with a grain of salt xx x.
NIGHT WORK / RATIONALE
Association of International Shipping Lines, Inc. v. United Harbors’ Pilot
Association, G.R. No. 172029, August 6, 2008
There is no inconsistency between EO No. 1088 and the provisions of PPA AO No. 03-85.
These two orders dwell on entirely different subject matters. EO No. 1088 provides for
uniform and modified rates for pilotage services rendered to foreign and coastwise
vessels in all Philippine ports, public or private. On the other hand, the subject matter of
the provisions of PPA AO No. 03-85 is the payment of the additional charges of nighttime
and overtime pay. Plainly, EO No. 1088 involves the basic compensation for pilotage
service while PPA AO No. 03-85 provides for the additional charges where pilotage
service is rendered under certain circumstances.
It bears pointing out that additional compensation for nighttime work is founded on
public policy. Working at night is violative of the law of nature for it is the period for rest
and sleep. An employee who works at night has less stamina and vigor. Thus, he can
easily contract disease. The lack of sunlight tends to produce anemia and tuberculosis
and predispose him to other ills. Night work brings increased liability to eyestrain and
accident. Serious moral dangers also are likely to result from the necessity of traveling
the street alone at night, and from the interference with normal home life.33 Hygienic,
medical, moral, cultural and socio-biological reasons are in accord that night work has
many inconveniences and when there is no alternative but to perform it, it is but just that
the laborer should earn greater salary than ordinary work so as to compensate the
laborer to some extent for the said inconveniences.
NIGHT WORK / SEAFARERS
Dacut v. CA, G.R. No. 169434, March 28, 2008, 550 SCRA 260
It could not have been the purpose of our law to require their employers to give them
overtime pay or night shift differential, even when they are not actually working. Thus,
the correct criterion in determining whether they are entitled to overtime pay or night
shift differential is not whether they were on board and cannot leave ship beyond the
regular eight working hours a day, but whether they actually rendered service in excess
of said number of hours. In this case, petitioners failed to submit sufficient proof that
overtime and night shift work were actually performed to entitle them to the
corresponding pay.
COMPRESSED WORK WEEK
Bisig Manggagawa sa Tryco v. NLRC, G.R. No. 151309, October 15, 2008
D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the
employees will derive from the adoption of a compressed workweek scheme, thus:
The compressed workweek scheme was originally conceived for establishments
wishing to save on energy costs, promote greater work efficiency and lower the rate of
employee absenteeism, among others. Workers favor the scheme considering that it
would mean savings on the increasing cost of transportation fares for at least one (1) day
a week; savings on meal and snack expenses; longer weekends, or an additional 52 off-
days a year, that can be devoted to rest, leisure, family responsibilities, studies and other
personal matters, and that it will spare them for at least another day in a week from
certain inconveniences that are the normal incidents of employment, such as commuting
to and from the workplace, travel time spent, exposure to dust and motor vehicle fumes,
dressing up for work, etc. Thus, under this scheme, the generally observed workweek of
six (6) days is shortened to five (5) days but prolonging the working hours from Monday
to Friday without the employer being obliged for pay overtime premium compensation
for work performed in excess of eight (8) hours on weekdays, in exchange for the
benefits abovecited that will accrue to the employees.
Notably, the MOA complied with the following conditions set by the DOLE, under D.O. No.
21, to protect the interest of the employees in the implementation of a compressed
workweek scheme:
1. The employees voluntarily agree to work more than eight (8) hours a day the total in a
week of which shall not exceed their normal weekly hours of work prior to adoption of
the compressed workweek arrangement;
2. There will not be any diminution whatsoever in the weekly or monthly take-home pay
and fringe benefits of the employees;
3. If an employee is permitted or required to work in excess of his normal weekly hours
of work prior to the adoption of the compressed workweek scheme, all such excess
hours shall be considered overtime work and shall be compensated in accordance with
the provisions of the Labor Code or applicable Collective Bargaining Agreement (CBA);
4. Appropriate waivers with respect to overtime premium pay for work performed in
excess of eight (8) hours a day may be devised by the parties to the agreement.
5. The effectivity and implementation of the new working time arrangement shall be by
agreement of the parties.
RATIONALE/ENTITLEMENT; TWO (2) REGULAR HOLIDAYS
Asian Transmission Corp. v. CA, G.R. No. 144644, March 15, 2004
“Holiday pay is a statutory benefit demandable under the law. Since a worker is entitled
to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same
date should not operate to reduce to nine the ten holiday pay benefits a worker is
entitled to receive.
It is elementary, under the rules of statutory construction, that when the language of the
law is clear and unequivocal, the law must be taken to mean exactly what it says. In the
case at bar, there is nothing in the law which provides or indicates that the entitlement to
ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.”
TEACHERS PAID BY THE HOUR
Jose Rizal College v. NLRC, G.R. No. L-65482, 156 SCRA 27
Wherefore, the decision of respondent National Labor Relations Commission is hereby
set aside, and a new one is hereby RENDERED:
(a) exempting petitioner from paying hourly paid faculty members their pay for
regular holidays, whether the same be during the regular semesters of the school year or
during semestral, Christmas, or Holy Week vacations;
(b) but ordering petitioner to pay said faculty members their regular hourly
rate on days declared as special holidays or for some reason classes are called off or
shortened for the hours they are supposed to have taught, whether extensions of class
days be ordered or not; in case of extensions said faculty members shall likewise be paid
their hourly rates should they teach during said extensions.
MUSLIM HOLIDAYS
San Miguel Corp. v. CA, G.R. No. 146775, January 30, 2002, 375 SCRA 311
Although Article 3 of Presidential Decree 1083 (Code of Muslim Personal Laws) provides
that the provisions of the code shall be applicable only to Muslims, on which the
petitioner based its defense, the same article provides further that nothing in the code
shall be construed to the prejudice of non-Muslims. The Supreme Court stated that there
should be no distinction between Muslims and non-Muslims as regards the payment of
benefits for Muslim Holidays. The Court, quoting the Court of Appeals, “assuming that the
SMC is correct, then Muslims throughout the Philippines are also not entitled to holiday
pays on Christian holidays declared by law. We must remind (SMC) that wages and other
emoluments granted by law are determined not on the basis of the worker’s faith or
religion”, finds against the petitioner, and dismissed the petition.
SERVICE INCENTIVE LEAVE / WHEN DEMANDABLE; COMMUTATION
Fernandez v. NLRC, G.R. No. 105892, January 28, 1998
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 Regulations39 provides that "[e]very employee who has
rendered at least one year of service shall be entitled to a yearly service incentive leave
of five days with pay." Service incentive leave is a right which accrues to every employee
who has served "within 12 months, whether continuous or broken reckoned from the
date the employee started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of practice or policy,
or that provided in the employment contracts, is less than 12 months, in which case said
period shall be considered as one year."40 It is also "commutable to its money equivalent
if not used or exhausted at the end of the year."41 In other words, an employee who has
served for one year is entitled to it. He may use it as leave days or he may collect its
monetary value. To limit the award to three years, as the solicitor general recommends,
is to unduly restrict such right.
HSY Marketing Ltd., Co. v. Villastique, G.R. No. 219569, August 17, 2016
The Court has already held that company drivers who are under the control and
supervision of management officers — like respondent herein — are regular
employees entitled to benefits including service incentive leave pay.73 "Service
incentive leave is a right which accrues to every employee who has served 'within 12
months, whether continuous or broken, reckoned from the date the employee started
working, including authorized absences and paid regular holidays unless the working
days in the establishment as a matter of practice or policy, or that provided in the
employment contracts, is less than 12 months, in which case said period shall be
considered as one [(1)] year.' It is also commutable to its money equivalent if not used or
exhausted at the end of the year. In other words, an employee who has served for one (1)
year is entitled to it. He may use it as leave days or he may collect its monetary value."
Rodriguez v. Park N’ Ride, G.R. No. 222980, March 20, 2017
Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive
leave, we can conclude that the three (3)-year prescriptive period commences, not at the
end of the year when the employee becomes entitled to the commutation of his service
incentive leave, but from the time when the employer refuses to pay its monetary
equivalent after demand of commutation or upon termination of the employee's services,
as the case may be.
Thus, the prescriptive period with respect to petitioner's claim for her entire service
incentive leave pay commenced only from the time of her resignation or separation from
employment. Since petitioner had filed her complaint on October 7, 2009, or a few days
after her resignation in September 2009, her claim for service incentive leave pay has not
prescribed. Accordingly, petitioner must be awarded service incentive leave pay for her
entire 25 years of service-from 1984 to 2009-and not only three (3) years' worth (2006
to 2009) as determined by the Court of Appeals.
SIL / EMPLOYEES NOT ENTITLED
David v. Macasio, G.R. No. 195466, July 2, 2014
The payment of an employee on task or pakyaw basis alone is insufficient to exclude one
from the coverage of Service Incentive Leave (SIL) and holiday pay.
In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday
and Service Incentive Leave (SIL) pay, the presence (or absence) of employer
supervision as regards the worker’s time and performance is the key.
SIL / AT LEAST ONE YEAR OF SERVICE; RECKONING PERIOD
JPL Marketing Promotions v. CA, G.R. No. 151966, 463 SCRA 136
While computation for the 13th month pay should properly begin from the first day of
employment, the service incentive leave pay should start a year after
commencement of service, for it is only then that the employee is entitled to said
benefit.   Our Haus Realty v. Parian, G.R. No. 204651, August 6, 2014
SERVICE CHARGES; TIPS
Ace Navigation Co. v. CA, G.R. No. 140364, 338 SCRA 70
Payment for overtime was included in the monthly salary, the supposed tips mentioned
in the contract should be deemed included thereat. It is presumed that the parties were
aware of the plain, ordinary and common meaning of the word “tip”. A bartender cannot
feign ignorance on the practice of tipping and that tips are normally paid by customers
and not by the employer.
It has been said that a tip denotes a voluntary act, but whether considered from the
standpoint of the giver or the recipient, a tip lacked the essential element of a gift,
namely, the free bestowing of a gratuity without a consideration, and that despite its
apparent voluntariness, there is an element of compulsion in tipping.
NUWHRAIN v. Phil. Plaza, Inc., G.R. No. 177524, July 23, 2014
Article. 96. Service Charges. x x x In case the service charge is abolished, the share of the
covered employees shall be considered integrated in their wages.
This last paragraph of Article 96 of the Labor Code presumes the practice of collecting
service charges and the employer’s termination of this practice. When this happens,
Article 96 requires the employer to incorporate the amount that the employees had been
receiving as share of the collected service charges into their wages. In cases where no
service charges had previously been collected (as where the employer never had any
policy providing for collection of service charges or had never imposed the collection of
service charges on certain specified transactions), Article 96 will not operate.
FACILITIES V. SUPPLEMENT
SLL International Cables v. NLRC, G.R. No. 172161, March 2, 2011
The Court, at this point, makes a distinction between “facilities” and “supplements.” It is
of the view that the food and lodging, or the electricity and water allegedly consumed by
private respondents in this case were not facilities but supplements. In the case of Atok-
Big Wedge Assn. v. Atok-Big Wedge Co., the two terms were distinguished from one
another in this wise:
“Supplements,” therefore, constitute extra remuneration or special privileges or benefits
given to or received by the laborers over and above their ordinary earnings or wages.
“Facilities,” on the other hand, are items of expense necessary for the laborer’s and his
family’s existence and subsistence so that by express provision of law (Sec. 2[g]), they
form part of the wage and when furnished by the employer are deductible
therefrom, since if they are not so furnished, the laborer would spend and pay for them
just the same.
In short, the benefit or privilege given to the employee which constitutes an extra
remuneration above and over his basic or ordinary earning or wage is supplement; and
when said benefit or privilege is part of the laborers’ basic wages, it is a facility. The
distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick
leave) given, but in the purpose for which it is given.
The employer’s’ argument is a vain attempt to circumvent the minimum wage law by
trying to create a distinction where none exists. There is no substantial distinction
between deducting and charging a facility’s value from the employee’s wage. Hence, the
legal requirements for creditability apply to both. These requirements are
(a) proof must be shown that such facilities are customarily furnished by the trade;
(b) the provision of deductible facilities must be voluntarily accepted in writing by the
employee; and
(c) the facilities must be charged at fair and reasonable value.
13TH MONTH PAY
House of Sara Lee v. Rey, G.R. No. 149013, August 31, 2006
The award of 13th month pay must be deleted. Respondent is not a rank-and-file
employee and is, therefore, not entitled to thirteenth-month pay.
Petroleum Shipping Limited v. NLRC, G.R. No. 148130, June 16, 2006
Again, Tanchico was a contractual, not a regular, employee. Further, PD 851 does not
apply to seafarers. PD 851 contemplates the situation of land-based workers, and not of
seafarers who generally earn more than domestic land-based workers.
BONUS
Producers Bank v. NLRC, 355 SCRA 489
A bonus is an amount granted and paid to an employee for his industry and loyalty which
contributed to the success of the employer’s business and made possible the realization
of profits. It is an act of generosity granted by an enlightened employer to spur the
employee to greater efforts for the success of the business and realization of bigger
profits.12 The granting of a bonus is a management prerogative, something given in
addition to what is ordinarily received by or strictly due the recipient.13 Thus, a bonus is
not a demandable and enforceable obligation,14 except when it is made part of the wage,
salary or compensation of the employee.
However, an employer cannot be forced to distribute bonuses which it can no longer
afford to pay.
EQUAL PAY FOR WORK OF EQUAL VALUE
International School Alliance of Educators v. Quisumbing, G.R. No. 128845, June 1,
2000, 333 SCRA 13
The Labor Code’s and the Constitution’s provisions impregnably institutionalize in this
jurisdiction the long honored legal truism of "equal pay for equal work." Persons who
work with substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries.
If an employer accords employees the same position and rank, the presumption is that
these employees perform equal work. If the employer pays one employee less than the
rest, it is not for that employee to explain why he receives less or why the others receive
more. That would be adding insult to injury.
WITHHOLDING OF WAGES
SHS Perforated Materials v. Diaz, G.R. No. 185814, October 13, 2010
Although management prerogative refers to “the right to regulate all aspects of
employment,” it cannot be understood to include the right to temporarily withhold
salary/wages without the consent of the employee.
Any withholding of an employeeʼs wages by an employer may only be allowed in the
form of wage deductions under the circumstances provided in Article 113 of the Labor
Code, as set forth below:
ART. 113. Wage Deduction. – No employer, in his own behalf or in behalf of any person,
shall make any deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium on the
insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has
been recognized by the employer or authorized in writing by the individual worker
concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor.
Milan v. NLRC, G.R. No. 202961, February 4, 2015
As a general rule, employers are prohibited from withholding wages from employees
(Art. 116, Labor Code). The Labor Code also prohibits the elimination or diminution of
benefits (Art. 100, Labor Code).
However, our law supports the employers’ institution of clearance procedures before the
release of wages.  As an exception to the general rule that wages may not be withheld
and benefits may not be diminished, the Labor Code provides: Art. 113. Wage deduction.
No employer, in his own behalf or in behalf of any person, shall make any deduction from
the wages of his employees, except:
1. In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium
on the insurance;
2. For union dues, in cases where the right of the worker or his union to check-off
has been recognized by the employer or authorized in writing by the individual
worker concerned; and
3. In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor and Employment.
NON-DIMINUTION OF BENEFITS
Coca-Cola Bottlers v. Iloilo Coca-Cola Plant Employees Labor Union, G.R. No.
195297, December 5, 2018
Moreover, the Court with the CA’s ruling that Saturday work ripened into company
practice which is covered by Article 100 of the Labor Code that diminution of benefits is
prohibited. The fact that Saturday work was made subject to a condition and such
condition prevails, i.e., on the basis of operational necessity, negates the application of
Article 100.
In labor law and social legislation, the scales of justice usually tilts in favour of the
workingman, however this has not blinded the Court, for the law does not authorize the
oppression or self-destruction of the employer. Management also has its own rights,
entitled to respect and enforcement in the interest of simple fair play.
PREFERENTIAL RIGHT IN CASE OF BANKRUPTCY
Barayoga v. Asset Privatization Trust, G.R. No. 160073, October 24, 2005
Under Art 2241 and 2242 of the Civil Code, a mortgage credit is a special preferred credit
that enjoys preference with respect to a specific/determinate property of a debtor. On
the other hand, the workers preference under Art 110 of the Labor code is an ordinary
preferred credit. While this provision raises the worker’s money claim to first priority in
the order of preference established in Art 2244 of the Civil Code, the claim has no
preference over special preferred credits. Being a mortgage credit APT’s lien on
BISUDECO’s mortgaged assets is a special preferred lien that must be satisfied first
before the claims of the workers.
WAGE ORDER
Metrobank v. National Wages and Productivity Commission, G.R. No. 144322,
February 6, 2007
Section 1, Wage Order No. R02-03 is void insofar as it grants a wage increase to
employees earning more than the minimum wage rate; and pursuant to the separability
clause of the Wage Order, Section 1 is declared valid with respect to employees earning
the prevailing minimum wage rate.
The powers of NWPC are enumerated in ART. 121. Powers and Functions of the
Commission. - The Commission shall have the following powers and functions: (d) To
review regional wage levels set by the Regional Tripartite Wages and Productivity
Boards to determine if these are in accordance with prescribed guidelines and national
development plans; (f) To review plans and programs of the Regional Tripartite Wages
and Productivity Boards to determine whether these are consistent with national
development plans; (g) To exercise technical and administrative supervision over the
Regional Tripartite Wages and Productivity Boards.
R.A. No. 6727 declared it a policy of the State to rationalize the fixing of minimum wages
and 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 industrial dispersal; and to allow business and industry
reasonable returns on investment, expansion and growth.
In line with its declared policy, R.A. No. 6727 created the NWPC, vested with the power
to prescribe rules and guidelines for the determination of appropriate minimum wage
and productivity measures at the regional, provincial or industry levels; and authorized
the RTWPB to determine and fix the minimum wage rates applicable in their respective
regions, provinces, or industries therein and issue the corresponding wage orders,
subject to the guidelines issued by the NWPC. Pursuant to its wage fixing authority, the
RTWPB may issue wage orders which set the daily minimum wage rates, based on the
standards or criteria set by Article 124 of the Labor Code.
The Court declared that there are two ways of fixing the minimum wage: the "floor-
wage" method and the "salary-ceiling" method. The "floor-wage" method involves
the fixing of a determinate amount to be added to the prevailing statutory
minimum wage rates. On the other hand, in the "salary-ceiling" method, the wage
adjustment was to be applied to employees receiving a certain denominated salary
ceiling. In other words, workers already being paid more than the existing minimum
wage (up to a certain amount stated in the Wage Order) are also to be given a wage
increase.
WAGE DISTORTION
P.I. Manufacturing v. P.P. Manufacturing Supervisors and Foremen Association,
543 SCRA 613
R.A. No. 6727, otherwise known as the Wage Rationalization Act, explicitly defines “wage
distortion” as: “a situation where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences in wage or
salary rates between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation.”
Otherwise stated, wage distortion means the disappearance or virtual disappearance of
pay differentials between lower and higher positions in an enterprise because of
compliance with a wage order. The increase in the wage rates by virtue of R.A. No. 6640
resulted in wage distortion or the elimination of the intentional quantitative differences
in the wage rates of the supervisor employees of petitioner.
Prubankers Association v. Prudential Bank & Trust Company, G.R. No. 131247,
January 25, 1999
Wage distortion = situation where an increase in prescribed wage results in the
elimination or severe contraction of intentional quantitative differences in wage or
salary rates between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation.
Wage distortion. 4 elements:
1) Existing hierarchy of positions w/ corresponding salary rates
2) Significant change in the salary rate of lower pay class w/o a concomitant
increase in the salary rate of a higher one
3) Elimination of the distinction between the 2 levels
4) Existence of the distortion in the same region of the country
VISITORIAL AND ENFORCEMENT POWER
Bay Haven v. Abuan, G.R. No. 160859, July 30, 2008
The DOLE Secretary and her authorized representatives such as the DOLE-NCR Regional
Director, have jurisdiction to enforce compliance with labor standards laws under the
broad visitorial and enforcement powers conferred by Article 128 of the Labor Code, and
expanded by R.A. No. 7730.
The Court has held that the visitorial and enforcement powers of the Secretary, exercised
through his representatives, encompass compliance with all labor standards laws and
other labor legislation, regardless of the amount of the claims filed by workers. This has
been the rule since R.A. No. 7730 was enacted on June 2, 1994, amending Article 128(b)
of the Labor Code, to expand the visitorial and enforcement powers of the DOLE
Secretary. Under the former rule, the DOLE Secretary had jurisdiction only in cases
where the amount of the claim does not exceed P5,000.00.
Under prevailing jurisprudence, the so-called exception clause in Art. 128(b) of the Labor
Code has the following elements, which must all concur to divest the regional director of
jurisdiction over workers’ claims:

(a) that the employer contests the findings of the labor regulations officer and raises
issues thereon;
(b) that in order to resolve such issues, there is a need to examine evidentiary matters;
and
(c) that such matters are not verifiable in the normal course of inspection.
Ex-Bataan Veterans v. Sec. of Labor, G.R. No. 152396, November 20, 2007
This was further affirmed in our ruling in Cirineo Bowling Plaza, Inc. v. Sensing,24 where
we sustained the jurisdiction of the DOLE Regional Director and held that "the visitorial
and enforcement powers of the DOLE Regional Director to order and enforce compliance
with labor standard laws can be exercised even where the individual claim exceeds
P5,000."
However, if the labor standards case is covered by the exception clause in Article 128(b)
of the Labor Code, then the Regional Director will have to endorse the case to the
appropriate Arbitration Branch of the NLRC. In order to divest the Regional Director or
his representatives of jurisdiction, the following elements must be present: (a) that the
employer contests the findings of the labor regulations officer and raises issues thereon;
(b) that in order to resolve such issues, there is a need to examine evidentiary matters;
and (c) that such matters are not verifiable in the normal course of inspection.25 The
rules also provide that the employer shall raise such objections during the hearing of the
case or at any time after receipt of the notice of inspection results.
Ceprado, Jr. v. Nationwide Security and Allied Services, G.R. No. 175198, September
23, 2015
This case is a labor standards case involving "the minimum requirements prescribed by
existing laws, rules and regulations and other issuances relating to wages, hours of work,
cost of living allowances and other monetary and welfare benefits, including those set by
occupational safety and health standards."46 When this case was commenced, the Rules
on the Disposition of Labor Standards Cases in the Regional Offices governed labor
inspections.
HEALTH AND SAFETY
Ocean Builders Construction Corp. v. Sps. Cubcub, G.R. No. 150898, April 13, 2011
ART. 161. Assistance of employer. – It shall be the duty of any employer to provide all
the necessary assistance to ensure the adequate and immediate medical and dental
attendance and treatment to an injured or sick employee in case of emergency.
As found by the trial court and borne by the records, petitioner Hao’s advice for Bladimir
to, as he did, take a 3-day rest and to later have him brought to the nearest hospital
constituted “adequate and immediate medical” attendance that he is mandated, under
Art. 161, to provide to a sick employee in an emergency.
LABOR CODE V. POEA CONTRACT
Ecasinas v. Shangri-La’s Mactan Island Resort, G.R. No. 178827, March 4, 2009
Art. 157 does not require the engagement of full-time nurses as regular employees of a
company employing not less than 50 workers.
Against the above-listed determinants, the Court holds that respondent doctor is a
legitimate independent contractor. That Shangri-la provides the clinic premises and
medical supplies for use of its employees and guests does not necessarily prove that
respondent doctor lacks substantial capital and investment. Besides, the maintenance of
a clinic and provision of medical services to its employees is required under Art. 157,
which are not directly related to Shangri-la’s principal business – operation of hotels and
restaurants.
Orient Hope Agencies v. Jara, G.R. No. 204307, June 6, 2018
The prevailing rule is that a seafarer's mere inability to perform his or her usual work
after 120 days does not automatically lead to entitlement to permanent and total
disability benefits because the 120-day period for treatment and medical evaluation by a
company-designated physician may be extended to a maximum of 240 days.
However, there must be a sufficient justification to extend the medical treatment from
120 days to 240 days. In other words, the 240-day extended period remains to be an
exception, and as such, must be clearly shown to be warranted under the circumstances
of the case before it can be applied.
This Court summarized the following guidelines to be observed when a seafarer claims
permanent and total disability benefits:
1. The company-designated physician must issue a final medical assessment on
the seafarer's disability grading within a period of 120 days from the time the
seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the
period of 120 days, without any justifiable reason, then the seafarer's disability
becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the
period of 120 days with a sufficient justification (e.g., seafarer required further
medical treatment or seafarer was uncooperative), then the period of diagnosis
and treatment shall be extended to 240 days. The employer has the burden to
prove that the company-designated physician has sufficient justification to
extend the period; and
4. If the company-designated physician still fails to give his assessment within the
extended period of 240 days, then the seafarer's disability becomes permanent
and total, regardless of any justification.
Madridejos v. NYK-FIL Shipmanagement, Inc., G.R. No. 204262, June 7, 2017
Madridejos cannot claim disability benefits since he was not medically repatriated. Even
assuming that Madridejos was medically repatriated, he still cannot claim for disability
benefits since his sebaceous cyst was not work-related. Illnesses not listed as an
occupational disease under Section 32 of the 2000 Philippine Overseas Employment
Administration Amended Standard Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean-Going Vessels are disputably presumed to be work-
related. However, seafarers must prove through substantial evidence the correlation
between their illness and the nature of their work for their claim for disability benefits to
prosper. For an illness to be compensable, it is not necessary that the nature of the
employment be the sole and only reason for the illness suffered by the seafarer. It is
enough that there is a reasonable linkage between the disease suffered by the employee
and his work to lead a rational mind to conclude that his work may have contributed to
the establishment or, at the very least, aggravation of any pre-existing condition he might
have had.
Hanseatic Shipping v. Ballon, G.R. No. 212764, September 9, 2015
Before a seafarer can claim permanent and total disability benefits, he must comply with
certain requirements set forth by the 2000 Philippine Overseas Employment
Administration-Standard Employment Contract (POEA-SEC). Section 20 (B) (3) of POEA-
SEC provides:
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
xxxx
3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness
allowance equivalent to his basic wage until he is declared fit to work or the degree of
permanent disability has been assessed by the company-designated physician but in no
case shall this period exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his
return except when he is physically incapacitated to do so, in which case, a written notice
to the agency within the same period is deemed as compliance. Failure of the seafarer to
comply with the mandatory reporting requirement shall result in his forfeiture of the
right to claim the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may
be agreed jointly between the Employer and the seafarer. The third doctor's decision
shall be final and binding on both parties.
PROJECT/SEASONAL EMPLOYEE
Universal Robina Sugar Milling Corporation v. Nagkahiusang Mamumuo sa
URSUMCO-National Federation of Labor, G.R. No. 224558, November 28, 2018
Article 295 of the Labor Code defines seasonal employees as those whose work or
engagement is seasonal in nature and the employment is only for the duration of the
season. Seasonal employment becomes regular seasonal employment when the
employees are called to work from time to time. On the other hand, those who are
employed only for a single season remain as seasonal employees. As a consequence of
regular seasonal employment, the employees are not considered separated from service
during the off-milling season, but are only temporarily laid off or on leave until re-
employed. Nonetheless, in both regular seasonal employment and seasonal employment,
the employee performs no work during the off-milling season.
To reiterate, employment status is primarily determined by the nature of the employer's
business and the duration and connection of the tasks performed by the employee — not
by the intent or motivations of the parties. Thus, the concerned employees cannot be
categorized as regular seasonal employees as defined under the law, jurisprudence or
even the parties' CBA. First, they perform work for URSUMCO even during the off-milling
season and there is no showing that they were free to work for another during the same
period. Second, the tasks done are reasonably necessary and desirable in URSUMCO's
regular operation or business.
CASUAL EMPLOYEE
Gadia v. Sykes Asia, G.R. No. 209499, January 28, 2015
Article 294 (now, Article 195[280]) of the Labor Code provides that an employee is
deemed regular when he has been engaged to perform activities which are deemed
usually necessary and desirable in the usual business or trade of the employer, except (i)
where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement
of the employee or (ii) where the work or services to be performed is seasonal in nature
and the employment if for the duration of the season.
Thus, for an employee to be considered project-based, the employer must show
compliance with two (2) requisites, namely that: (a) the employee was assigned to carry
out a specific project or undertaking; and (b) the duration and scope of which were
specified at the time they were engaged for such project.
Innodata v. Quejada-Lopez, G.R. No. 162839, October 12, 2006
By their very nature, businesses exist and thrive depending on the continued patronage
of their clients. Thus, to some degree, they are subject to the whims of clients who may
decide to discontinue patronizing their products or services for a variety of reasons.
Being inherent in any enterprise, this entrepreneurial risk may not be used as an excuse
to circumvent labor laws; otherwise, no worker could ever attain regular employment
status.
Lacuesta v. Ateneo de Manila, G.R. No. 152777, December 9, 2005
The “Manual of Regulations for Private Schools,” and not the Labor Code, determines
whether or not a faculty member in an educational institution has attained regular or
permanent status. Under Policy Instructions No. 11 issued by DOLE “the probationary
employment of professors, instructors and teachers shall be subject to the standards
established by the Department of Education and Culture.” Said standards are embodied
in paragraph 75 (now Section 93) of the Manual of Regulations for Private Schools.
Section 93 of the 1992 Manual of Regulations for Private Schools provides that full-time
teachers who have satisfactorily completed their probationary period shall be
considered regular or permanent. Moreover, for those teaching in the tertiary level, the
probationary period shall not be more than 6 consecutive regular semesters of
satisfactory service. The requisites to acquire permanent employment, or security of
tenure, are (1) the teacher is a full-time teacher; (2) the teacher must have rendered
three consecutive years of service; and (3) such service must have been satisfactory.
A part-time teacher cannot acquire permanent status. Only when one has served as a
full-time teacher can he acquire permanent or regular status. The petitioner was a part-
time lecturer before she was appointed as a full-time instructor on probation. As a part-
time lecturer, her employment as such had ended when her contract expired. Thus, the
three semesters she served as part-time lecturer could not be credited to her in
computing the number of years she has served to qualify her for permanent status.
Mt. Carmel College, Inc. v. NLRC, G.R. No. 117514, October 4, 1996
Private respondent’s employment contract stipulated that her employment “shall be
deemed to run from SY 1989-1990 to SY 1991-1992 (day to day of month to month). ”
Under Section 48 of the Manual of Regulations for Private Schools, a school year or
academic year begins on the second Monday of June and shall consist of “approximately
forty weeks of normally five school days each, exclusive of approved vacations and
including legal and special holidays, and special activities.”
There is a distinction between a calendar year and a school year. As applied to private
school teachers, the probationary period is 3 years as provided in the Manual of
Regulations for Private Schools. It must be stressed that the law speaks of 3 years not 3
school years. Calendar year consists of 12 months, while a school year consists only of 10
months. A school year begins in June of one calendar year and ends in March of
succeeding calendar year.
Fuji Television v. Espiritu, G.R. No. 204944-45, December 3, 2014
It is the burden of the employer to prove that a person whose services it pays for is an
independent contractor rather than a regular employee with or without a fixed term.
That a person has a disease does not per se entitle the employer to terminate his or her
services. Termination is the last resort. At the very least, a competent public health
authority must certify that the disease cannot be cured within 6 months, even with
appropriate treatment.
An employee can be a regular employee with a fixed-term contract.
As long as the employee is the one requesting, or bargaining, that the contract have a
“definite date of termination,” or that the fixed-term contract be freely entered into by
the employer and the employee, then the validity of the fixed-term contract will be
upheld.
Begino v. ABS-CBN, G.R. No. 199166, April 20, 2015
As cameramen, editors and reporters, it appears that Petitioners were subject to the
control and supervision of Respondents which provided them with the equipment
essential for the discharge of their functions. The exclusivity clause and prohibitions in
their Talent Contract were likewise indicative of Respondents' control over them,
however obliquely worded.
Also,the presumption is that when the work done is an integral part of the regular
business of the employer and when the worker does not furnish an independent
business or professional service, such work is a regular employment of such employee
and not an independent contractor.
LABOR-ONLY V. LEGITIMATE JOB CONTRACTOR
Daguinod v. Southgate Foods, G.R. No. 227795, February 20, 2019
The outsourcing of services is not prohibited in all instances. In fact, Article 106 of the
Labor Code of the Philippines provides the legal basis for legitimate labor contracting.
This provision is further implemented by DOLE Order No. 18, Series of 2002 (DO 18-02).
Under Section 4(a) of DO 18-02, legitimate labor contracting or subcontracting refers to
an arrangement whereby a principal agrees to put out or farm out with a contractor or
subcontractor the performance or completion of a specific job, work or service within a
definite or predetermined period, regardless of whether such job, work or service is to
be performed or completed within or outside the premises of the principal. The
“principal” refers to any employer who puts out or farms out a job, service or work to a
contractor or subcontractor.
Meanwhile, labor-only contracting is prohibited and defined under Section 5 of DO 18-
02:
Section 5. Prohibition against labor-only contracting. Labor-only contracting is hereby
declared prohibited. For this purpose, labor-only contracting shall refer to an
arrangement where the contractor or subcontractor merely recruits, supplies, or places
workers to perform a job, work or service for a principal, and any of the following
elements [is] present:
i) The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and the employees
recruited, supplied or placed by such contractor or subcontractor are performing
activities which are directly related to the main business of the principal; or
ii) The contractor does not exercise the right to control over the performance of
the work of the contractual employee.
The foregoing provisions shall be without prejudice to the application of Article 248 (c)
of the Labor Code, as amended.
“Substantial capital or investment” refers to capital stocks and subscribed capitalization
in the case of corporations, tools, equipment, implements, machineries and work
premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out.
The “right to control” shall refer to the right reserved to the person for whom the
services of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner and means to be used in reaching that end. (Emphasis
supplied)
When there is labor-only contracting, Section 7 of DO 18-02 describes the consequences
thereof:
Section 7. Existence of an employer-employee relationship. The contractor or
subcontractor shall be considered the employer of the contractual employee for
purposes of enforcing the provisions of the Labor Code and other social legislation. The
principal, however, shall be solidarity liable with the contractor in the event of any
violation of any provision of the Labor Code, including the failure to pay wages.
The principal shall be deemed the employer of the contractual employee in any of the
following case, as declared by a competent authority:
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within the prohibitions provided in
Section 6 (Prohibitions) hereof. (Emphasis supplied)
[T]he character of the business, whether as labor-only contractor or as a job contractor,
should be determined by the criteria set by statute and the parties cannot dictate by the
mere expedience of a unilateral declaration in a contract the character of their business.
Alaska Milk Corporation v. Paez, G.R. No. 237277, November 27, 2019