2G- LABOR LAW 2

MAKATI HABERDASHERY, INC., JORGE LEDESMA and CECILIO G. INOCENCIO, petitioner,

v.
NLRC, CEFERINA J. DIOSANA (Labor Arbiter, Department of Labor and Employment, National
Capital Region), SANDIGAN NG MANGGAGAWANG PILIPINO (SANDIGAN) - TUCP and its
members, respondents

Facts:
 Individual complainants are working for Makati Haberdashery Inc as tailors, seamstress,
sewers, basters, and “plantsadoras” and are paid on a piece-rate basis (except two petitioners
who are paid on a monthly basis)
 In addition, they are given a daily allowance of P 3.00 provided they report before 9:30 a.m.
everyday.
 Work schedule: 9:30-6 or 7 p.m., Mondays to Saturdays and even on Sundays and holidays
during peak periods.
 The Sandigan ng Manggagawang Pilipino filed a complaint for underpayment of the basic
wages, underpayment of living allowance, nonpayment of overtime work, nonpayment of
holiday pay, and other money claims.
 During the pendency of the case, private respondent Dioscoro Pelobello left a package with
Salvador Rivera, a salesman of petitioner Haberdashery, containing a “jusi” barong tagalog.
 Pelobello replied that the same was ordered by respondent Casimiro Zapata for his customer.
Zapata allegedly admitted that he copied the design of petitioner Haberdashery.
 Consequently a memorandum was issued to each of them to explain but both failed to make
their statements and did not report for work. Hence, they were dismissed by the employer.
 Petitioner urged that the NLRC erred in concluding that an employer-employee relationship
existed between the petitioner and the workers.

Issues:
1. W/N there is an Employer-Employee Relationship (YES)
2. W/N employees entitled to monetary claims despite the finding that they are not
entitled to minimum wage (YES)
3. W/N respondent is guilty of illegal dismissal (NO)

Ruling:
1. Yes, there is an Er-Ee relationship.
 4-FOLD TEST: selection and engagement, payment of wages, power of dismissal, power of
control
 There is such relationship because in the application of the four-fold test, it was found that
petitioners had control over the respondents not only as to the result but also as to the means
and method by which the same is to be accomplished.
 Such control is proven by a memorandum which enumerates procedures and instructions
regarding job orders, alterations, and their behavior inside the shop issued by the Assistant
Manager which reads in part:
"Effective immediately, new procedures shall be followed:
o To follow instruction and orders from the undersigned…
o Before accepting the job orders, tailors must check the materials, job orders, due dates,
and other things to maximize efficiency…
2G- LABOR LAW 2

o Effective immediately, all job orders must be finished one day before the due date. This
can be done by proper scheduling of job order and if you will cooperate with your
supervisors. Xxxx
o If there is any problem regarding supervisors or co-tailor inside our shop, consult with
me at once to settle the problem. Fighting inside the shop is strictly prohibited. Any tailor
violating this memorandum will be subject to disciplinary action.”
 Private respondents did not exercise independence in their own methods and they do not rely
on their own resources and equipment. They are totally dependent on petitioners in all these
aspects.
2. YES, they are entitled to monetary claims
 There is no dispute that respondents are entitled to the minimum wage as mandated by Section
2(g) of Letter of Instruction No. 829, Rules Implementing Presidential Decree No. 1614 and
reiterated in Section 3(f), Rules Implementing Presidential Decree 1713:
o "All employees paid by the result shall receive not less than the applicable new
minimum wage rates for eight (8) hours work a day”
 HOWEVER, the Court dismissed the issue because of lack of sufficient evidence to support claim
that there was in fact underpayment and which the private respondents did not appeal to in the
NLRC nor in the SC.
 Well-settled is the rule that “an appellee who has not himself appealed cannot obtain from the
appellate court any affirmative relief other than the ones granted in the decision of the court
below”.
 COLA (Cost-Of-Living Allowance)- ENTITLED
o They are regular employees. IRR of Wage No. 1, 2, and 5 provide that “all workers in
the private sector, regardless of their position, designation of status, and
irrespective of the method by which their wages are paid” are entitled to such
allowance.

 13th Month pay- ENTITLED

o Entitled under Sec. 3(e) of the IRR of PD 851 which is an exception to the exception
of such provision which states that employers whose workers are paid on piece-rate
basis in which are covered by such issuance in so far as such workers are concerned.

3. NO, respondent company is not guilty of illegal dismissal.

 It does show that a violation of the employer's rules has been committed and the evidence of
such transgression, the copied barong tagalog, was in the possession of Pelobello who pointed
to Zapata as the owner.
 They not only failed to give their explanations but they also went AWOL.
 their blatant disregard of their employer's memorandum is undoubtedly an open defiance
which is among the justifiable grounds for termination of employment provided for in the Labor
Code.
 The right to dismiss or otherwise impose disciplinary sanctions upon an employee for just and
valid cause, pertains to the employer.

Notes:
 Article 297 of the Labor Code, as amended, the following are deemed just causes to
terminate an employee:
2G- LABOR LAW 2

1. Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work
2. Gross and habitual neglect by the employee of his duties:
3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
4. Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorize representative; and
5. Other causes analogous to the foregoing.