Justin Dominic P.

Manaog Labor Law 1 – Block C September 14, 2020

Soriano v. Offshore Shipping and Manning Corp., et. Al.

G.R. No. 78409; September 14, 1989
Fernan, C.J.

Issue: Whether or not the NLRC validly ruled in favor of the employer in a case where the
employee is claiming that there were alterations made on his employment regarding the salary
but was found that the alterations were corrections made only to specify the salary and the
overtime pay to which petitioner is entitled under the contract.

Complainant’s Argument: Petitioner argues that the alteration by private respondent of his salary
and overtime rate which is evidenced by the Crew Agreement and the exit pass constitutes a
violation of Article 34 of the Labor Code of the Philippines.

Respondent’s Argument: Public respondent through the Solicitor General, contends that, as
explained by the POEA: "Although the employment contract seems to have corrections, it is in
conformity with the Wage Scale submitted to said office.

Instruction Learned / Court Decision: The court ruled in favor of the respondent employer as
follows: “A careful examination of the records shows that there is in fact no alteration made in
the Crew Agreement or in the Exit Pass. As the original data appear, the figures US$800.00 fall
under the column salary, while the word "inclusive" is indicated under the column overtime rate.
With the supposed alterations, the figures US$560.00 were handwritten above the figures
US$800.00 while the figures US$240.00 were also written above the word "inclusive".”

Ratio: “As recently laid down by this Court, the rule that there should be concern, sympathy and
solicitude for the rights and welfare of the working class, is meet and proper. That in
controversies between a laborer and his master, doubts reasonably arising from the evidence or
in the interpretation of agreements and writings should be resolved in the former's favor, is not
an unreasonable or unfair rule. But to disregard the employer's own rights and interests solely on
the basis of that concern and solicitude for labor is unjust and unacceptable.”
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PAMBUSCO Employees Union v. CIR

G.R. No. 46727; September 27, 1939
Laurel, J.

Issue: Whether or not employees who are asking for readjustment of their salaries in view of the
newly passed Eight Hour Labor Law are entitled to payment of back wages when both them and
the employer agreed to not observe or enforce the law.

Complainant’s Argument: Petitioner argues that they are entitled to back wages in view of the
Eight Hour Labor Law which were not observed by the company.

Respondent’s Argument: Respondent CIR argues that the drivers are not entitled to the overtime
pay demanded for the whole period the law was not observed or enforced in the company. They
are entitled to payment of wages for hours worked in excess of the legal hours only beginning
May 1, 1938.

Instruction Learned / Court Decision: The court ruled that the employees are not entitled to back
wages and the decision of the CIR was correct. “The evidence permits no other conclusion than
that the employees were not coerced not intimidated by the respondent on the repeated occasions
they signed and presented to the Department of Labor their petitions for non-enforcement of the
Eight Hour Labor Law…Without need of passing on the question as to whether the provisions of
the law are mandatory or not, in the light of the above facts and applying the rules of equity
invoked by the union, we are constrained to hold that the petitioners are not rightly entitled to the
payment sought.”

Ratio: We are not, to be sure insensible to the argument that industrial disputes should be
decided with an eye on the welfare of the working class, who, in the inter-play of economic
forces, is said to find itself in the "end of the stick." In the case at bar, however, we find no
reason for disturbing the action taken by the respondent Court of Industrial Relations, which is a
special court enjoined to "act according to justice and equity and substantial merits of the case,
without regard to technicalities or legal forms and shall not be bound by any technical rules of
legal evidence but may inform its mind in such manner as it may deem just and equitable" (sec.
20, Commonwealth Act No. 103).
Justin Dominic P. Manaog Labor Law 1 – Block C September 14, 2020

Felicilda v. Uy
G.R. No. 221241; September 14, 2016
Perlas – Bernabe, J.

Issue: Whether or not an employer-employee relationship exists where an employee is (a)

engaged for his services without the aid of a third party or a manpower agency; and (b) paid
wages on a percentage basis; and the employer (a) has the power to dismiss inherent in his
selection and engagement of the latter as truck driver; and (b) exercised control and supervision
over petitioner's work as shown in the former's determination of the latter's delivery areas and
schedules.

Complainant’s Argument: Petitioner argues that an employer-employee relationship existed

between the parties, considering that: (a) respondent engaged petitioner's services without the aid
of a third party or a manpower agency; (b) the payment of wages on a percentage basis did not
negate such existence; (c) respondent's power to dismiss petitioner was inherent in his selection
and engagement of the latter as truck driver; and (d) respondent exercised control and
supervision over petitioner's work as shown in the former's determination of the latter's delivery
areas and schedules.

Respondent’s Argument: Respondent argues that an employer-employee relationship does not

exist since petitioner was: (a) paid merely on a per trip "percentage" basis and was not required
to regularly report for work; (b) free to offer his services to other companies; and (c) not under
respondent's control with respect to the means and methods by which he performed his job as a
truck driver. Respondent added that petitioner's company ID did not indicate that the latter was
his employee, but only served the purpose of informing the GPT's clients that petitioner was one
of respondent's authorized drivers.

Instruction Learned / Court Decision: The court ruled that an employer-employee relationship
existed since First. It is undisputed that respondent hired petitioner to work as a truck driver for
his private enterprise, GPT. Second. Petitioner received compensation from respondent for the
services he rendered. Third. Respondent's power to dismiss was inherent in the selection and
engagement of petitioner as truck driver. Fourth. The presence of the element of control, which is
the most important element to determine the existence or absence of employment relationship,
can be safely deduced from the fact that: (a) respondent owned the trucks that were assigned to
petitioner; (b) the cargoes loaded in the said trucks were exclusively for respondent's clients; and
(c) the schedule and route to be followed by petitioner were exclusively determined by
respondent.

Ratio: To ascertain the existence of an employer-employee relationship, jurisprudence 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." Verily, the power of the employer to control
the work of the employee is considered the most significant determinant of the existence of an
employer-employee relationship. This is the so-called "control test," and 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. It must, however, be stressed that
Justin Dominic P. Manaog Labor Law 1 – Block C September 14, 2020

the "control test" merely calls for the existence of the right to control, and not necessarily the
exercise thereof.

Allied Banking Corp. v. Calumpang

G.R. No. 219435; January 17, 2018
Velasco, J.
Issue: Whether or not there exists an employer-employee relationship exists between a company
and laborer where the company obtained the services of the laborer from a corporation engaged
in the business of janitorial and manpower services, had entered into a Service Agreement
whereby the latter provided the former with messengerial, janitorial, communication, and
maintenance services and the personnel therefor.

Petitioner’s Argument: Petitioner alleged that respondent was not its employee, but that of RCI,
with which it had entered into a Service Agreement to provide "messengerial, janitorial,
communications and maintenance services and the personnel therefor."

Respondent’s Argument: Respondent asserted that the four-fold test of employer-employee

relationship is present between him and the Bank. First, he averred that he was a regular
employee of the Bank assigned as a Janitor of the Branch with a salary of ₱4,200 payable every
15 days each month, and assigned such other tasks essential and necessary for the Bank's
business.

Instruction Learned / Court Decision: A finding that a contractor is a labor-only contractor, as

opposed to permissible job contracting, is equivalent to declaring that there is an employer-
employee relationship between the principal and the employees of the supposed contractor, and
the labor-only contractor is considered as a mere agent of the principal, the real employer.

Ratio: As a general rule, a contractor is presumed to be a labor-only contractor, unless such

contractor overcomes the burden of proving that it has the substantial capital, investment, tools
and the like.

In the present case, petitioner failed to establish that RCI is a legitimate labor contractor as
contemplated under the Labor Code.
Justin Dominic P. Manaog Labor Law 1 – Block C September 14, 2020

Asian Steel Corporation v. WCC

G.R. No. L-7636; June 27, 1955
Bengzon, J.

Issue: Whether or not an employee-employer relationship exists when a laborer was verbally
taken on as an apprentice by the officer-in-charge.

Complainant’s Argument: Petitioner argues that the officer-in-charge’s acts could not bind the
corporation since only the president was authorized by its by-laws to hire employees for the
manufacturing establishment.

Respondent’s Argument: Respondent argued that the president allowed the officer-in-charge to
employ the laborer as an apprentice and thus an employer-employee relationship existed.

Instruction Learned/Court Decision: The Supreme Court ruled that an employee-employer

relationship did exist and “that as president and manager Yu Kong Tiong could legally employ,
by himself, manual laborers to work in the factory…there was apparent authority of Kim,
sufficiently ample to create the relationship of employer and employee for the purposes of the
Workmen's Compensation Law.”

Ratio: "It may be stated as a general rule that an agent, who with authority express, implied,
apparent or actual, employs help for the benefit of his principal's business, thereby creates the
relationship of employer and employee between such help and his principal."
Justin Dominic P. Manaog Labor Law 1 – Block C September 14, 2020

Iloilo Chinese Commercial School v. Fabrigar

G.R. No. L-16600; December 27, 1961
Paredes, J.

Issue: Whether or not an employer-employee relationship exists where the laborer whose
services were furnished by the Iloilo Chinese Chamber of Commerce bur the alleged employer
supervised his work and had control over the manner he performed the same.

Complainant’s Argument: Petitioner argues that there exists no employer-employee relationship

since the laborer was not an employee of the petitioner, but by the Iloilo Chinese Chamber of
Commerce which was the one that furnished the janitor service in the premises of its buildings,
including the part thereof occupied by the petitioner.

Respondent’s Argument: Respondent argues that there is substantial proof to the effect that the
laborer was employed by and rendered service for the petitioner and was an employee within the
purview of the Workmen's Compensation Law.

Instruction Learned / Court Decision: The court ruled that there exists an employee-employer
relationship exists in this case. The records disclose that the person in charge (encargado) of the
respondent school supervised the deceased in his work and had control over the manner he
performed the same.

Ratio: “The most important test of employer-employee relation is the power to control the
employee's conduct.”