VILLANUEVA, Samantha Agnes Labor Law Review

20170630 Thursday (6:00 – 9:00 PM)

ASSIGNMENT
001-2021

1. Provide proper definition: Employee, Employer, Social Legislation, Labor

standards, Labor Relations, Unemployment, Capital, and Work.

Employee – includes any individual employed by an employer. (Art. 97, Labor Code) as a natural
person who is hired, directly or indirectly, by a natural or juridical person to perform activities
related to the business of the “hirer: who, directly or through an agent, supervises or controls the
work performance and pays the salary or wage of the “hiree”. (Azucena)

Employer – includes any person acting directly or indirectly in the interest of an employer in
relation to an employee and shall include the government and all its branches, subdivisions and
instrumentalities, all government-owned or controlled corporations and institutions, as well as
non-profit private institutions, or organizations.

Social Legislation – all laws passed by the State to promote public welfare. Laws that provide
particular kinds of protection or benefits to society or segments thereof in furtherance of social
justice. It includes statutes intended to enhance the welfare of the people even where there is no
employer-employee relationship.

Labor Standards – the minimum requirements prescribed by existing laws; rules and
regulations as to the terms and conditions of employment relating to wages, hours of work, cost-
of-living allowance, and other monetary and welfare benefits, including occupational, safety and
health standards.

Labor Relations – defines and regulates the status, rights and duties, and the institutional
mechanisms that govern the individual and collective interactions of employers, employees or
their representatives.

Unemployment - it occurs when workers want to work and unable to find jobs, which lower
economic output.

Capital - money available to a business to pay for its day-to-day operations and fund for its future
growth.

Work - it is an activity which requires a physical or mental effort for an individual to achieve a
certain purpose or result.

2. Explain the kinds of unemployment.

Seasonal Unemployment: Seasonal unemployment occurs when workers lose their jobs due
to the time of year. Life guards getting laid off in the winter and temporary store retail clerks
getting laid off after the holiday shopping season are two examples. Seasonal unemployment is a
natural part of a healthy economy.

Frictional Unemployment: This type of unemployment is characterized by movement

between jobs. When a college graduate is looking for her first job, a cook quits his restaurant job,
or a brick mason is fired from construction company, all three of these people are now frictionally
unemployed.
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

Structural Unemployment: This type of unemployment is most often characterized by a skills

mismatch; meaning the skills unemployed workers have do not match the skills needed for the
jobs available. These workers must go back to school or be retrained to get the skills they need.
This type of unemployment can be caused by technological changes like ATM machines replacing
banking tellers.

Cyclical Unemployment: This is unemployment caused by the business cycle. People

unemployed as a result of the great depression of the 1930’s and the recent great recession were
cyclically unemployed.

3. Explain the difference between UNEMPLOYMENT and

UNDEREMPLOYMENT.

Underemployed persons are employed persons who express the desire to have additional hours
of work in their present job or an additional job, or have a new job with longer working hours.

The unemployed consists of working-age persons who are (1) without work, (2) currently
available for work, and (3) seeking work or not seeking work because of the belief that no work is
available, or awaiting results of previous job application, or because of temporary illness or
disability, bad weather or waiting for rehire or job recall. Those who are not in the labor force (i.e.,
who are neither employed or unemployed) include stay-home spouses, students, persons with
disability, retired persons, and seasonal workers, as well as discouraged workers not actively
seeking employment.

4. What are the conventional test’s in determining the existence of employer

employee relationship?
Four-Fold Test

1. the selection and engagement of the employee;

2. the payment of wages;
3. the power of dismissal; and,
4. the employer’s power to control the employee on the means and methods by which the work
is accomplished.

5. Define Economic realities test?

The proper standard of economic dependence is whether the worker is dependent on the alleged
employer for his continued employment in that line of business

6. Explain the Two-tiered test or multi-factor test?

The two-tiered test enunciated in Francisco vs. NLRC, is composed of:

- The putative employer’s power to control the employee with respect to the means and methods
by which the work is to be accomplished [control test]; and
- The underlying economic realties of the activity or relationship [broader economic reality
test]
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

7. How do you establish Employee Employer Relation on the following: to

wit:

a. Salaried Insurance Agents

Control over the performance of the task of one providing service both with respect to the means
and manner, and the results of the service is the primary element in determining whether an
employment relationship exists. The Supreme Court ruled petitioners Motion against his favor
since he failed to show that the control Manulife exercised over him was the control required to
exist in an employer-employee relationship; Manulifes control fell short of this norm and carried
only the characteristic of the relationship between an insurance company and its agents, as
defined by the Insurance Code and by the law of agency under the Civil Code.

In the Supreme Courts June 29, 2010 Resolution, they noted that there are built-in elements of
control specific to an insurance agency, which do not amount to the elements of control that
characterize an employment relationship governed by the Labor Code. The Insurance Code
provides definite parameters in the way an agent negotiates for the sale of the company’s
insurance products, his collection activities and his delivery of the insurance contract or policy.
They do not reach the level of control into the means and manner of doing an assigned task that
invariably characterizes an employment relationship as defined by labor law. To reiterate,
guidelines indicative of labor law "control" does not merely relate to the mutually desirable result
intended by the contractual relationship; they must have the nature of dictating the means and
methods to be employed in attaining the result. Tested by this norm, Manulifes instructions
regarding the objectives and sales targets, in connection with the training and engagement of
other agents, are among the directives that the principal may impose on the agent to achieve the
assigned tasks. They are targeted results that Manulife wishes to attain through its agents.
Manulifes codes of conduct, likewise, do not necessarily intrude into the insurance agents means
and manner of conducting their sales. Codes of conduct are norms or standards of behavior rather
than employer directives into how specific tasks are to be done. (Tongko vs Manulife)

b. School Teachers
Professors and instructors are not independent contractors but are employees in that their work
is controlled by their employer – the university – which prescribes the courses or subjects that
they teach and the time and place for teaching; their work is on a regular basis and continuous for
a certain fixed period; they are compensated for their services by salaries and wages rather than
by share in the profits; they cannot substitute others to perform their work without the consent of
the university; and they can be laid off if their work is not satisfactory. (Feafi University vs.
Bautista)

c. Jeepney Drivers
As early as 3 March 1956, in National Labor Union v. Dinglasan, this Court ruled that the
relationship between jeepney owners/operators on one hand and jeepney drivers on the other
under the boundary system is that of employer-employee and not of lessor-lessee. Therein we
explained that in the lease of chattels the lessor loses complete control over the chattel leased
although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for
the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former
exercise supervision and control over the latter. The fact that the drivers do not receive fixed wages
but get only that in excess of the so-called "boundary" they pay to the owner/operator is not
sufficient to withdraw the relationship between them from that of employer and
employee. (Jardin vs NLRC)
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

d. Taxi Drivers
We have applied by analogy the above stated doctrine to the relationships between bus
owner/operator and bus conductor,20 auto-calesa owner/operator and driver,21 and recently
between taxi owners/operators and taxi drivers. (Jardin vs NLRC)

e. Bus Drivers
In the case at bar, the labor arbiter, the NLRC and the Court of Appeals were unanimous in finding
that private respondent worked as a driver of one of the buses of petitioner and was paid on a 10%
commission basis.

We have no reason to disturb all these factual findings because they are amply supported by
substantial evidence. (R Transport Corporation Vs. Rogelio Ejandra)

f. Truck Trailer/Lorry Drivers

It ruled 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. (Felicilda vs Uy)

g. UV Express Driver
The SC reiterated National Labor Union v. Dinglasan which distinctly identifies the boundary
system to be an employer-employee relationship as opposed to a lessor-lessee relationship. It also
provided other supporting analogies, found in Magboo v. Bernardo and Lantaco, Sr. v. Llamas, to
highlight that an employer-employee relationship likewise existed in relationships between an
auto-calesa owner/operator and driver, a bus owner/operator and conductor, and a taxi
owner/operator and driver (Villamaria v. CA)

h. Barbers
Absent a clear showing that petitioners and private respondent had intended to pursue a
relationship of industrial partnership, we entertain no doubt that private respondent was
employed by petitioners as caretaker-barber. Initially, petitioners, as new owners of the
barbershop, hired private respondent as barber by absorbing the latter in their employ.
Undoubtedly, the services performed by private respondent as barber is related to, and in the
pursuit of the principal business activity of petitioners. Later on, petitioners tapped private
respondent to serve concurrently as caretaker of the shop. Certainly, petitioners had the power to
dismiss private respondent being the ones who engaged the services of the latter. In fact, private
respondent sued petitioners for illegal dismissal, albeit contested by the latter. As a caretaker,
private respondent was paid by petitioners wages in the form of honorarium, originally, at the
rate of one-third (1/3) of the shop's net income but subsequently pegged at a fixed amount per
month. As a barber, private respondent earned two-thirds (2/3) of the fee paid per haircut or
shaving job done. Furthermore, the following facts indubitably reveal that petitioners controlled
private respondent's work performance, in that: (1) private respondent had to inform petitioners
of the things needed in the shop; (2) he could only recommend the hiring of barbers and
masseuses, with petitioners having the final decision; (3) he had to be at the shop at 9:00 a.m.
and could leave only at 9:00 p.m. because he was the one who opened and closed it, being the one
entrusted with the key.7 These duties were complied with by the private respondent upon
instructions of petitioners. Moreover, such task was far from being negligible as claimed by
petitioners. On the contrary, it was crucial to the business operation of petitioners as shown in the
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

preceding discussion. Hence, there was enough basis to declare private respondent an employee
of petitioners. (Jo vs NLRC)

i. Street – Hired Cargadores

The Court considers the cargadores as regular employees. Basing from the facts, the Court has
deemed that the Unionmembers had worked as cargadores for Corfarm. They loaded, unloaded
and piled sacks of palay from the warehouses tothe cargo trucks and from the cargo trucks to the
buyers.- This work is directly related, necessary and vital to the operations of Corfarm.- Moreover,
Corfarm did not even allege, much less prove, that the Union members have substantial capital
oinvestment in the form of tools, equipment, machineries, [and] work premises, among others.-
Lastly, Corfarm had wielded the power of dismissal over the Union members (an important
element of the four-foldtest). Hence, the workers are not independent contractors and an
employer-employee relationship exists betweenthe Union and Corfarm. (CPWU vs Laguesma
And Corfarm Grains, Inc)

j. Fisherman
Fishermen-crew who rendered services in various capacities (patron/pilot, master fisherman,
second fisherman, chief engineer, and fisherman) aboard the fishing vessels of a company
engaged in “trawl” fishing and whose compensation was paid in cash on percent commission
basis, are employees following the right-of-control test, it being established that the conduct of
the fishing operations such as the schedule of the fishing trips and the time to return to the fishing
port, was under the control and supervision of the company’s operations manager.

k. Workers in Movie Projects

The employer-employee relationship between petitioners and VIVA can further be established by
the "control test." While four elements are usually considered in determining the existence of an
employment relationship, namely: (a) the selection and engagement of the employee; (b)... the
payment of wages; (c) the power of dismissal; and (d) the employer's power to control the
employee's conduct, the most important element is the employer's control of the employee's
conduct, not only as to the result of the work to be done but also as to the means and methods...
to accomplish the same.

Lest it be misunderstood, this ruling does not mean that simply because an... employee is a project
or work pool employee even outside the construction industry, he is deemed, ipso jure, a regular
employee. All that we hold today is that once a project or work pool employee has been: (1)
continuously, as opposed to intermittently, re-hired by the same... employer for the same tasks or
nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or
trade of the employer, then the employee must be deemed a regular employee, pursuant to Article
280 of the Labor Code and jurisprudence. (Alejandro Maraguinot V. NLRC)

l. TV Host
Applying the control test to the present case, we find that SONZA is not an employee but an
independent contractor. The control test is the most important test our courts apply in
distinguishing an employee from an independent Contractor. This test is based on the extent of
control the hirer exercises over a worker. The greater the supervision and control the hirer
exercises, the more likely the worker is deemed an employee. The converse holds true as well –
the less control the hirer exercises, the more likely the worker is considered an independent
contractor.

We find that ABS-CBN was not involved in the actual performance that produced the finished
product of SONZA’s work. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

merely reserved the right to modify the program format and airtime schedule “for more effective
programming.” ABS-CBN’s sole concern was the quality of the shows and their standing in the
ratings. Clearly, ABS-CBN did not exercise control over the means and methods of performance
of SONZA’s work.

In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is
an employee of the former. In this case, SONZA failed to show that these rules controlled his
performance. We find that these general rules are merely guidelines towards the achievement of
the mutually desired result, which are top-rating television and radio programs that comply with
standards of the industry.

Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even
an independent contractor can validly provide his services exclusively to the hiring party. In the
broadcast industry, exclusivity is not necessarily the same as control. (Sonza vs ABS-CBN)

m. News Anchor
The most crucial test — the control test — demonstrates all too clearly the absence of an employer-
employee relationship. No one at the DZRC had the power to regulate or control private
respondents' activities or inputs. Unlike the regular reporters, he was not subject to any
supervision by petitioner or its officials. Regular reporters "are required by the petitioner to
adhere to a program schedule which delineates the time when they are to render their reports, as
well as the topic to be reported upon. The substance of their reports are [sic] oftentimes screened
by the station prior to [their] actual airing. In contrast, volunteer reporters are never given such
a program schedule but are merely advised to inform the station of the reports they would make
from time to time."
In Encyclopedia Britannica (Philippines) Inc., v. NLRC, we reiterated that there could be no
employer-employee relationship where "the element of control is absent; where a person who
works for another does so more or less at his own pleasure and is not subject to definite hours or
conditions of work[;] and in turn is compensated according to the result of his efforts and not the,
amount thereof, we should not find that the relationship of employer-employee exists." In the
present case, private respondent worked at his "own pleasure and [was] not subject to definite
hours or conditions of work." (Filipinas Broadcasting Network vs. NLRC)

8. What are the relationships created in a subcontracting arrangement?

The following relationships are created:

a. The principal which decides to farm out a job or service to a subcontractor;

b. The subcontractor which has the capacity to independently undertake the performance of the
job or service; and
c. The employees engaged by the subcontractor to accomplish the job or service.

In subcontracting, the four-fold test of employer-employee relationship should be satisfied by the

subcontractor in relation to the employees it engages to accomplish the subcontracted job or
service. In such cases, the subcontractor is also referred to as independent contractor.
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

9. What are the other prohibited acts that may be considered as similar to
labor-only contracting?

The following are other prohibited acts that may be considered as similar to labor-only contracting
- when the principal farms out work to a “Cabo”
- Contracting out of job or work through an in-house agency
- Contracting out of job or work through an in-house cooperative which merely supplies
workers to the principal
- Contracting out of a job or work by reason of a strike or lockout whether actual or imminent
- Contracting out of a job or work being performed by union members and such will interfere
with, restrain or coerce employees in the exercise of their rights to self-organization as
provided in Article 259 of the Labor Code, as amended
- Requiring the contractor’s/subcontractor’s employees to perform functions which are
currently being performed by the regular employees of the principal.
- Requiring the contractor’s/subcontractor’s employees to sign, as a precondition to
employment or continued employment, an antedated resignation letter; a blank payroll, a
waiver of labor standards including minimum wages and social or welfare benefits; or a
quitclaim releasing the principal or contractor from liability as to payment of future claims;
or require the employee to become member of a cooperative
- Repeated hiring by the contractor/subcontractor of employees under an employment contract
of short duration
- Requiring employees under a contracting/subcontracting arrangement to sign a contract
fixing the period of employment to a term shorter than the term of the Service Agreement,
unless the contract is divisible into phases for which substantially different skills are required
and this is made known to the employee at the time of engagement.
- Such other practices, schemes or employment arrangements designed to circumvent the right
of workers to security of tenure

10. What is labor-only contracting? What is the effect of labor-only

contracting?

Labor-only contracting refers to arrangement where the contractor or subcontractor merely

recruits, supplies or place workers to perform a job or work for a principal, and the elements
enumerated in Section 5 hereunder are present.

The following are the effects:

a. The subcontractor will be treated as the agent of the principal. Since the act of an agent is the
act of the principal, representations made by the subcontractor to the employees will bind the
principal.
b. The principal will become the employer as if it directly employed the workers engaged to
undertake the subcontracted job or service. It will be responsible to them for all their
entitlements and benefits under the labor laws.
c. The principal and the subcontractor will be solidarily treated as the employer.
d. The employees will become employees of the principal, subject to the classifications of
employees under Article 28 of the Labor Code.

If the labor-only contracting activity is undertaken by a legitimate labor organization, a petition

for cancellation of union registration may be filed against it, pursuant to Article 239(e).
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

11. Is the contractor allowed to just supply workers who will do the work, to
the principal?

No, this would fall under labor-only contracting which is prohibited

12. Explain exhaustively the term Social Justice.

Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be approximated. Social
justice means the promotion of the welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the competent elements of society, through
the maintenance of a proper economic and social equilibrium in the interrelations of the members
of the community, constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all governments on
the time-honored principle of salus populi est suprema lex.

13. How is Social Justice exemplified in Labor Laws?

The State shall:

a. Promote the principle of shared responsibility between workers and employers
b. Promote the preferential use of voluntary modes in settling disputes
c. Regulate the relations between workers and employers,
d. Recognize the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to expansion and growth.

14. What is the basic policy of labor laws in the Philippines?

The State shall:

a. Afford protection to labor,
b. Promote full employment,
c. Ensure equal work opportunities regardless of sex, race or creed, and
d. Regulate the relations between workers and employers.

The State shall assure the rights of workers to:

a. Self-organization,
b. Collective bargaining,
c. Security of tenure, and
d. Just and humane conditions of work.

15. Explain the principle followed in the construction of labor laws.

Art. 4 of the Labor Code mandates that all doubts in the implementation and interpretation of the
provisions thereof shall be resolved in favor of labor. This is merely in keeping with the spirit
of our Constitution and laws which lean over backwards in favor of the working class, and
mandate that every doubt must be resolved in their favor. (Hocheng Philippines Corporation v.
Farrales)
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

16. Is the relationship between employee and employer contractual in nature?

The relations between employer and employee are not merely contractual. They are so impressed
with public interest that labor contracts must yield to the common good. Therefore, such contracts
are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of labor and similar subjects

17. Is a Contract necessary to create an employer-employee relationship?

Explain with credible legal basis.

No, the employment contract is not the sole indicator of an employer employee relationship.

The four-fold test is usually applied:

1. the selection and engagement of the employee;
2. the payment of wages;
3. the power of dismissal; and,
4. the employer’s power to control the employee on the means and methods by which the
work is accomplished.

And in the case of Victor Meteoro et. al. vs Creative Creatures, Inc., the court stated that to
establish the 4 elements of employer employee relationship, any competent and relevant evidence
may be considered including but not limited to:

- Identification Cards;
- Cash Vouchers;
- Social Security Registration;
- Appointment Letters;
- Employment Contracts;
- Payrolls;
- Organization Charts; and
- Personnel List.

18. Explain the individual and collective rights of employees under existing
Philippine Laws.

The following are the individual rights under existing Philippine laws:

a. Right to security of tenure

b. Right to regular working hours
c. Right to regular working days Right to Regular meal periods
d. Right to weekly rest periods Right to overtime work pay
e. Right to Night-shift differential pay
f. Right to Compensation for holiday work
g. Right to Additional Compensation on scheduled rest day, Sunday or
h. special holiday work
i. Right to Service Incentive leave
j. Right to a share in the collective service charge
VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

The following are the collective rights under existing Philippine laws:

a. Right to Self-Organization
b. Right to engage in collective bargaining
c. Right to participate in policy and decision-making processes
d. Right to engage in peaceful concerted activities including strike

19. Discuss the cardinal rights of Labor.

Cardinal Rights to Labor:

1. right to self-organization;
2. collective bargaining and negotiations;
3. peaceful concerted activities including the right to strike in accordance with law;
4. security of tenure;
5. humane conditions of work;
6. living wage; and
7. participate in policy and decision-making processes affecting their rights and benefits as
may be provided by law.

20. Discuss the case of Calalang vs. Williams

In the case of Calalang v. Williams, Maximo Calalng brought before the Supreme Court a petition
for a writ of prohibition against respondents. Respondents are, the Chairman of National Traffic
Commission (Williams), Director of Public Works (Fragrante), Acting Secretary of Public Works
and COmmunications (Bayan), Mayor of the City of Manila (Rodriguez) and Acting Chief of Police
of Manila (Dominguez).

On July 17, 1940, the National Traffic Commission, recommended to the Director of PUblic Works
and to the Secretary of Public Works and Communications that animal-drawn vehicles be
prohibited from passing along certain national roads for a period of 1 year from the date of the
opening of the Colgante Bridge.

Williams, the Chairman of National Traffic Commission, recommended the Director of PUblic
Works the adoption of the measure proposed in the resolution.

On August 2, 1940, Fragante, the Director of Public Works recommended to the Secretary of
Public Works and Communications (Bayan) the approval of the recommendation made by the
Chairman of the National Traffic Commission with some modifications.

On August 10, 1940, Secretary Bayan, approved the recommendation of the Director of Public
Works. And as a result, the Mayor of Manila and the Acting Chief of Police of Manila have enforced
and caused to be enforced the rules and regulations thus adopted.

One of the averments of the petitioner was that the rules and regulations complained of infringe
upon the constitutional precept regarding the promotion of social justice to insure the well-being
and economic security of all the people.

Supreme Court ruled that Calalang’s contention is UNTENABLE.

VILLANUEVA, Samantha Agnes Labor Law Review
20170630 Thursday (6:00 – 9:00 PM)

Justice Laurel in ruling in the case, defined social justice, “.. is neither communism, nor
despotism, not atomism, nor anarchy but the humanization of laws and the equalization of social
and economic forces by the State so that justice in its rational and objectively secular conception
may at least be approximated”.

Commonwealth Act 548, where the power to create rules and regulations on traffic was derived,
aims to promote safe transit upon and avoid obstructions on national roads, in the interest and
convenience of the public.

The enactment of said law was inspired by a desire to relieve congestion of traffic, which is to say
the least is a menace of public safety.