TINGA, 
J.: to the concessionaire, are not entitled to severance pay.10 Petitioners' claims for retirement
Take not from the mouth of labor the bread it has earned.
-Thomas Jefferson
The constitutional protection to labor, a uniform feature of the last three Constitutions
including the present one, is outstanding in its uniqueness and as a mandate for judicial
activism.
This petition asks for the review of the Court of Appeals' DECISION 1 in C.A.-G.R. SP NO.
55263 entitled Alexander R. Lopez, et al. v. Metropolitan Waterworks and Sewerage
System, which affirmed in toto the Civil Service Commission's Resolutions2 denying
petitioners' claim for severance, retirement and terminal leave pay.
By virtue of an Agreement,3 petitioners were engaged by the Metropolitan Waterworks and
Sewerage System (MWSS) as collectors-contractors, wherein the former agreed to collect
from the concessionaires of MWSS, charges, fees, assessments of rents for water, sewer
and/or plumbing services which the MWSS bills from time to time.4
In 1997, MWSS entered into a Concession Agreement with Manila Water Service, Inc. and
Benpress-Lyonnaise, wherein the collection of bills was transferred to said private
concessionaires, effectively terminating the contracts of service between petitioners and
MWSS. Regular employees of the MWSS, except those who had retired or opted to remain
with the latter, were absorbed by the concessionaires. Regular employees of the MWSS were
paid their retirement benefits, but not petitioners. Instead, they were refused said benefits,
MWSS relying on a resolution5 of the Civil Service Commission (CSC) that contract-collectors
of the MWSS are not its employees and therefore not entitled to the benefits due regular
government employees.
Petitioners filed a complaint with the CSC. In its Resolution dated 1 July 1999,6 the CSC
denied their claims, stating that petitioners were engaged by MWSS through a contract of
service, which explicitly provides that a bill collector-contractor is not an MWSS
employee.7 Relying on Part V of CSC Memorandum Circular No. 38, Series of 1993, the CSC
stated that contract services/job orders are not considered government services, which do not
have to be submitted to the CSC for approval, unlike contractual
and plantilla appointments.8 Moreover, it found that petitioners were unable to show that they
have contractual appointments duly attested by the CSC.9 In addition, the CSC stated that
petitioners, not being permanent employees of MWSS and not included in the list .submitted
benefits and terminal leave pay were likewise denied.
Petitioners sought reconsideration of the CSC Resolution, which was however denied by the
CSC on 17 September 1999.11 According to the CSC, petitioners failed to present any proof
that their appointments were contractual appointments submitted to the CSC for its
approval.12 The CSC held, thus:
WHEREFORE, the motion for Reconsideration of Alexander Lopez, et al. is hereby denied.
Accordingly, CSC Resolution No. 99-1384 dated July 1, 1999 stands. However, this is not
without prejudice to whatever rights and benefits they may have under the New Labor Code
and other laws, if any.13
Aggrieved, petitioners filed a Petition for Review under Rule 43 of the Rules of Court with the
Court of Appeals.14 In its DECISION, the Court of Appeals narrowed down the issues
presented by petitioners as follows: Whether or not the CSC erred in finding that petitioners
are not contractual employees of the government and, hence, are not entitled to retirement
and separation benefits.15
Affirming and generally reiterating the ruling of the CSC, the Court of Appeals held that
the Agreement entered into by petitioners and MWSS was clear and unambiguous, and
should be read and interpreted according to its literal sense.16 Hence, as per the terms of the
agreement, petitioners were not MWSS employees. The Court of Appeals held that no other
evidence was adduced by petitioners to substantiate their claim that their papers were
forwarded to the CSC for attestation and approval.17 It added that in any event, as early as 26
June 1996, the CSC specifically stated that "contract collectors are not MWSS employees
and therefore not entitled to severance pay."18
The Court of Appeals held that petitioners are not similarly situated as the petitioner in the
case of Chua v. Civil Service Commission19 since the contractual appointment was submitted
to and approved by the CSC, while the former were not. 20 Further, petitioners do not have
creditable service for purposes of retirement, since their services were not supported by duly
approved appointments.21 Lastly, the Court of Appeals held that petitioners were exempt from
compulsory membership in the GSIS. Having made no monthly contributions remitted to the
said office, petitioners are not entitled to the separation and/or retirement benefits that they
are claiming.22
1
Petitioners now assert that the Court of Appeals rendered a decision not in accord with law
and applicable jurisprudence, based on misapprehension of facts, and/or contrary to the
evidence on record.23
Petitioners allege that while their hiring was made to appear to be on contractual basis, the
contracts evidencing such hiring were submitted to and approved by the CSC. Later
contracts, however, do not appear to have been submitted to the CSC for approval. To
support its claim, petitioners presented two (2) sample agreements, 24 both stamped
"approved" and signed by CSC Regional Directors. While styled as individual
contracts/agreements, petitioners insist that the same were actually treated by the MWSS as
appointment papers.25
Petitioners claim that they were employees of the MWSS, and that the latter exercised control
over them. They cite as manifestations of control the training requirements, the mandated
procedures to be followed in making collections, MWSS' close monitoring of their
performance, as well as the latter's power to transfer collectors from one branch to another.26
Moreover, they add that with the nature and extent of their work at the MWSS, they served as
collectors of MWSS only.27 They stress that they have never provided collection services to
customers as an independent business. In fact, they applied individually and were hired by
MWSS one by one.28 They were provided with uniforms and identification cards, and received
basic pay termed as "commissions" from which MWSS deducted withholding tax.29 The
"commissions" were determined or computed by MWSS and paid to the collectors by payroll
every fifteenth (15th) and last day of every month. In addition to the commission, collectors
were given, among others, performance, mid-year and anniversary bonuses, hazard pay,
thirteenth (13th) month pay, traveling allowance, cash gift, meal allowance and productivity
pay.30
Petitioners claim that bill collectors were historically regarded as employees of National
Waterworks and Sewerage Authority (NAWASA), the forerunner of MWSS.31 They cite the
case of National Waterworks and Sewerage Authority v. NWSA Consolidated Labor Unions,
et al.,32 wherein this Court supposedly declared the bill collectors of NAWASA as its
employees and the commissions received by said collectors as salary.33 Likewise, they claim
that by MWSS' own acts, petitioners were its employees. To support this contention, they
point to the identification cards (I.D.s) and certifications of employment issued by MWSS in
their favor.34 There were also "Records of Appointment", which referred to the contract-
collectors as employees with corresponding service records.35
In view of the cited documents, petitioners assert that MWSS is estopped from denying their
employment with the agency.36 Should there be doubt as to their status as employees,
petitioners invoke the rule of liberal construction in favor of labor, and the constitutional policy
of protection to labor.37
To further strengthen their case, petitioners refer to CSC Resolution 92-2008 dated 8
December 1992, which states in part:
. . . . The fact that they were being hired directly and paid on commission basis by MWSS
itself is indicative that they are government employees and should be entitled to the incentive
awards.
WHEREFORE, foregoing premises considered, the Commission resolves to rule that the
Contractual-Collectors of the Metropolitan Waterworks and Sewerage System (MWSS) are
entitled to loyalty awards.38
The same resolution was made the basis of the MWSS' memorandum declaring contract-
collectors government employees or personnel entitled to salary increases pursuant to the
Salary Standardization Law I & II.39
Thus, petitioners claim that by MWSS' and CSC's own acts and declarations, they were made
to believe that they were employees of MWSS and as such were government employees.40
Petitioners invoke the case of Chua v. Civil Service Commission, et al.41 wherein Chua, a co-
terminus employee of the National Irrigation Administration, sought to recover early retirement
benefits but was denied the same. This Court, having observed that Chua was hired and re-
hired in four (4) successive projects during a span of fifteen (15) years, was deemed a regular
employee for purposes of retirement pay. Petitioners argue that in the same manner, in view
of their considerable length of service to MWSS, they are entitled to their claimed benefits.42
In addition to the retirement/separation/terminal leave pay prayed for, petitioners claim moral
damages for the alleged serious disturbance they suffered as a result of the denial of their
claims. They also pray for the award of attorney's fees.43
For its part, the MWSS avers that the Court of Appeals did not err in sustaining the
resolutions of the CSC denying petitioners' claim for entitlement to severance, retirement and
terminal leave pay.
2
MWSS denies the existence of employer-employee relationship between itself and
petitioners. Citing CSC Memorandum Circular No. 38 Series of 1993, MWSS avers that it has
the authority to contract the services of another who is considered not its employee.44 With
respect to the matter of payment of wages, MWSS states that the commission given to
petitioners does not fall within the definition of compensation as provided in Presidential
Degree No. 1146 (P.D. 1146),45 or in the definition of the term under the Revised
Administrative Code either.46
It adds that the issuance of I.D.s., certificates of recognition and loyalty awards as well as the
grounds for termination of the Agreement could hardly be considered as control as the same
had no relation to the means and methods to be employed by petitioners in collecting
payments for MWSS.47 As for the training and orientation undergone by petitioners, MWSS
claims that it is but logical for any entity which has contracted the services of another to orient
the latter before actual performance of the service, more so if the entity's function is
impressed with public service. The fact that collectors were given a regular time for
remittance should likewise not be considered as a form of control. MWSS states that none of
these requirements invades the collector's prerogative to adopt their own method/strategy in
the matter of collection.48
On the grant of thirteenth (13th) month pay and other benefits to petitioners, MWSS claims
that these were mere acts of benevolence and generosity.49
Pertinently, therefore, the issue to be resolved is whether or not petitioners were employees
of the MWSS and, consequently, entitled to the benefits they claim.
We find for the petitioners.
The Court has invariably affirmed that it will not hesitate to tilt the scales of justice to the labor
class for no less than the Constitution dictates that "the State . . . shall protect the rights of
workers and promote their welfare."50 It is committed to this policy and has always been quick
to rise to defense in the rights of labor, as in this case.51
Protection to labor, it has been said, extends to all of labor local and overseas, organized and
unorganized, in the public and private sectors.52 Besides, there is no reason not to apply this
principle in favor of workers in the government. The government, including government-
owned and controlled corporations, as employers, should set the example in upholding the
rights and interests of the working class.
The MWSS is a government owned and controlled corporation with its own charter, Republic
Act No. 6234.53 As such, it is covered by the civil service54 and falls under the jurisdiction of
the Civil Service Commission.55
CSC Memorandum Circular No. 38, Series of 1993, categorically made the distinction
between contract of services/job orders and contractual and plantilla appointment, declaring
that services rendered under contracts of services and job orders are non-government
services which do not have to be submitted to the CSC for approval. This was followed by
CSC Memorandum Circular No. 4, Series of 1994, which allowed the crediting of services for
purposes of retirement only for such services supported by duly approved appointments.
Subsequently, the CSC issued other resolutions applying the above-mentioned circulars,
stating that while some functions may have been contracted out by a government agency, the
persons contracted are not entitled to the benefits due to regular government employees.56
For purposes of determining the existence of employer-employee relationship, the Court has
consistently adhered to the four-fold test, namely: (1) whether the alleged employer has the
power of selection and engagement of an employee; (2) whether he has control of the
employee with respect to the means and methods by which work is to be accomplished; (3)
whether he has the power to dismiss; and (4) whether the employee was paid wages. 57 Of the
four, the control test is the most important element.
A review of the circumstances surrounding the case reveals that petitioners are employees of
MWSS. Despite the obvious attempt of MWSS to categorize petitioners as mere service
providers, not employees, by entering into contracts for services, its actuations show that they
are its employees, pure and simple. MWSS wielded its power of selection when it contracted
with the individual petitioners, undertaking separate contracts or agreements. The same goes
true for the power to dismiss. Although termed as causes for termination of the Agreement, a
review of the same shows that the grounds indicated therein can similarly be grounds for
termination of employment.
Under the Agreement, MWSS may terminate it if the "Collector-Contractor" does or fails to do
any of the following:
Article VII - Duration, Termination and Penal Clauses.
....
3
 (a) Fails to collect at least eighty percent (80%) of bills issued within three
(3) months from commencement of this Agreement or ninety percent (90%)
within six (6) months after effectivity of this Agreement;
(b) Erases, alters, or changes any figure on the bills or remittance receipt
for purposes of defrauding either the concessioner or the MWSS. In case of
termination of his services for any irregularity, there shall be no prejudice
against any criminal action for which he may be liable;
(c) Is discourteous, dishonest, arrogant or his conduct is inimial [sic] to the
good name or image of the MWSS;
(d) Fails to remit collections daily or to return uncollected bills daily;
andcralawlibrary
(e) Fails to comply with any of the undertakings as provided for in this
Agreement, and the Manual of Procedures mentioned in Article II
hereof.58 (Emphasis Supplied)
On the other hand, the Labor Code enumerates the just causes for termination of
employment, thus:
Art.282. Termination by Employer. 'An employer may terminate an employment for any of the
following causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by
his employer or duly authorized representative;
(d) 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
authorized representative; andcralawlibrary
(e) Other causes analogous to the foregoing.
Obviously, failure to collect the payments of customers or remit the collections constitutes
neglect of duty. Making erasures, alterations or changing of figures in the fees or collection
receipts amounts to fraud. Lack of courtesy, dishonesty and arrogance are practically the
same as misconduct.
On the issue of remuneration, MWSS claims that the compensation received by petitioners
does not fall under the definition of wages as provided in Section 2(i) of P.D. 1146,59 which is
"the basic pay or salary received by an employee, pursuant to his employment appointments,
excluding per diems, bonuses, overtime pay and allowances;" thus petitioners are not its
employees. This assertion, however, simply begs the question. The provision is a simple
statement of meaning, operating on the a priori premise or presumption that the recipient is
already classified as an employee, and does not lay down any basis or standard for
determining who are employees and who are not.
On the other hand, relevant and appropriate is the definition of wages in the Labor Code,
namely, that it is the remuneration, however designated, for work done or to be done, or for
services rendered or to be rendered.60 The "commissions" due petitioners were based on the
bills collected as per the schedule indicated in the Agreement.61 Significantly, MWSS granted
petitioners benefits usually given to employees, to wit: COLA, meal, emergency, and traveling
allowances, hazard pay, cash gift, and other bonuses.62 In an unabashed bid to claim credit
for itself, MWSS professes that these additional benefits were its acts of benevolence and
generosity.63 We are not impressed.
Petitioners rendered services to MWSS for which they were paid and given similar benefits
due the other employees of MWSS. It is hard to imagine that MWSS was simply moved by
the spirit of benevolence and generosity when it granted liberal benefits to petitioners. More
so since MWSS is a government owned and controlled corporation created for the "proper
operation and maintenance of waterworks system to insure an uninterrupted and adequate
supply and distribution of potable water for domestic and other purposes and the proper
operation and maintenance of sewerage systems."64 Its main function is to provide basic
services to the public. The disposition of MWSS' income is limited to the payment of its
contractual and statutory obligations, expansion and development, and for the enhancement
of its efficient operation.65 It was not in a position to distribute hard-earned income of the State
merely to give expression to its supposed altruistic impulse, or to disburse funds not
otherwise authorized by law or its charter. If MWSS was impelled by some force to give the
benefits to petitioners, it must have been the force of good business sense. Obviously, the
additional benefits were granted with the same motivation as good managers anywhere else
have to foster a good working relationship with the bill-collectors and incentivize them to raise
the high level of their performance even higher.
4
Now the aspect of control. MWSS makes an issue out of the proviso in the Agreement that
specifically denies the existence of employer-employee relationship between it and
petitioners. It is axiomatic that the existence of an employer-employee relationship cannot be
negated by expressly repudiating it in an agreement and providing therein that the employee
is "not an MWSS employee"66 when the terms of the agreement and the surrounding
circumstances show otherwise. The employment status of a person is defined and prescribed
by law and not by what the parties say it should be.67
In addition, the control test merely calls for the existence of the right to control, and not the
exercise thereof. It is not essential for the employer to actually supervise the performance of
duties of the employee, it is enough that the former has a right to wield the power. 68 While
petitioners were contract-collectors of MWSS, they were under the latter's direction as to
where and how to perform their collection and were even subject to disciplinary measures.
Trainings were in fact conducted to ensure that petitioners are conversant of the procedures
of the MWSS.
Contrary to MWSS' assertion that petitioners were "free to adopt (their) own method/strategy
in the matter of collection",69 the Agreement clearly provided that the procedure and/or
manner of the collection of bills to be followed shall be in accordance with the provisions of
the Manual of Procedures. Art. VI of the Agreement states:
Art. II - Procedure of Collection
The procedure and/or manner of the collection of bills to be followed shall be in accordance
with Provisions of the Manual of Procedures adopted on November 1, 1968, which is made
an integral part of this Agreement as Annex "A." 70
Other manifestations of control are evident from the records. The power to transfer or
reassign employees is a management prerogative exclusively enjoyed by employers. In this
case, MWSS had free reign over the transfer of bill collectors from one branch to
another.71 MWSS also monitored the performance of the petitioners and determined their
efficiency ratings.72
MWSS contends that petitioners were free to engage in other occupations and were not
limited by the Agreement. Suffice it to say, however, that the control measures installed by
MWSS were restrictive enough to limit or even render illusory the other employment options
of petitioners as their tasks took up most of their time, they being required to report and remit
to MWSS almost twice daily. Interestingly in that regard, under the Agreement petitioners
were "allowed" to render overtime work, and were given additional "incentive commission" for
work so rendered as long as the same was authorized.73 Verily, the need to secure MWSS'
authorization before petitioners can render overtime work debunks its claim that they were
allowed to work as and when they please. All these indicate that MWSS controlled the
working hours of petitioners.
Furthermore, petitioners did not have their own offices nor their own supplies and equipment.
MWSS provides them with company stationeries, office space and equipment.74 Likewise,
MWSS comported itself as the employer of petitioners, providing them with I.D.s. and
certifications which declared them as employees of MWSS.75 It also deducted and remitted
petitioners' withholding taxes and Medicare contributions.76
Presaging and lending precedental lift to the present adjudication is the recent ruling in Manila
Water Company, Inc. v. Peña.77 In that case, Manila Water Company (Manila Water), a
concessionaire of MWSS, individually hired some of the former MWSS bill collectors to
perform collection services for three (3) months. Subsequently, the bill collectors formed a
corporation, Association Collectors Group, Inc. (ACGI) which was contracted by Manila Water
to collect charges. Later, Manila Water asked the collectors to transfer to a newly formed
corporation, First Classic Courier Services. Manila Water later terminated its contract with
ACGI, as a result of which collectors who opted to remain with ACGI became unemployed.
These bill collectors filed a complaint for illegal dismissal and money claims against Manila
Water, claiming that they were its employees since all the methods and procedures of their
collection were controlled by the latter. On the other hand, Manila Water contended that the
bill collectors were employees of AGCI, an independent contractor.78
The Court ruled that the bill collectors were regular employees of Manila Water, debunking
the latter's claim that they worked for an independent contractor corporation, thus:
First, ACGI does not have substantial capitalization or investment in the form of tools,
equipment, machineries, work premises, and other materials, to qualify as an independent
contractor. While it has an authorized capital stock of P1,000,000.00, only P62,500.00 is
actually paid-in, which cannot be considered substantial capitalization. The 121 collectors
subscribed to four shares each and paid only the amount of P625.00 in order to comply with
the incorporation requirements. Further, private respondents reported daily to the branch
office of the petitioner because ACGI has no office or work premises. In fact, the corporate
address of ACGI was the residence of its president, Mr. Herminio D. Peña. Moreover, in
dealing with the consumers, private respondents used the receipts and identification cards
issued by petitioner.
5
Second, the work of the private respondents was directly related to the principal business or
operation of the petitioner. Being in the business of providing water to the consumers in the
East Zone, the collection of the charges therefor by private respondents for the petitioner can
only be categorized as clearly related to, and in the pursuit of the latter's business.
Lastly, ACGI did not carry on an independent business or undertake the performance of its
service contract according to its own manner and method, free from the control and
supervision of its principal, petitioner. Prior to private respondents' alleged employment with
ACGI, they were already working for petitioner, subject to its rules and regulations in regard to
the manner and method of performing their tasks. This form of control and supervision never
changed although they were already under the seeming employ of ACGI. Petitioner issued
memoranda regarding the billing methods and distribution of books to the collectors; it
required private respondents to report daily and to remit their collections on the same day to
the branch office or to deposit them with Bank of the Philippine Islands; it monitored strictly
their attendance as when a collector cannot perform his daily collection, he must notify
petitioner or the branch office in the morning of the day that he will be absent; and although it
was ACGI which ultimately disciplined private respondents, the penalty to be imposed was
dictated by petitioner as shown in the letters it sent to ACGI specifying the penalties to be
meted on the erring private respondents. These are indications that ACGI was not left alone
in the supervision and control of its alleged employees. Consequently, it can be concluded
that ACGI was not an independent contractor since it did not carry a distinct business free
from the control and supervision of petitioner.79
Even under the "four-fold test", the bill collectors proved to be employees of Manila Water.
Thus, the Court held that:
Even the "four-fold test" will show that petitioner is the employer of private respondents. The
elements to determine the existence of an employment relationship are: (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 it.
We agree with the Labor Arbiter that in the three stages of private respondents' services with
the petitioner, i.e., (1) from August 1, 1997 to August 31, 1997; (2) from September 1, 1997 to
November 30, 1997; and (3) from December 1, 1997 to February 8, 1999, the latter exercised
control and supervision over the formers' conduct.
Petitioner contends that the employment of private respondents from August 1, 1997 to
August 30, 1997 was only temporary and done to accommodate their request to be absorbed
since petitioner was still undergoing a transition period. It was only when its business became
settled that petitioner employed private respondents for a fixed term of three months.
Although petitioner was not obliged to absorb the private respondents, by engaging their
services, paying their wages in the form of commission, subjecting them to its rules and
imposing punishment in case of breach thereof, and controlling not only the end result but the
manner of achieving the same as well, an employment relationship existed between them.
Notably, private respondents performed activities which were necessary or desirable to its
principal trade or business. Thus, they were regular employees of petitioner, regardless of
whether the engagement was merely an accommodation of their request'.80 (Emphasis Ours)
In fine, the Court found that the so-called independent contractor did not have substantial
capitalization or investment in the form of tools, equipment, machineries, work premises and
other material to qualify as an independent contractor. Moreover, respondents therein
reported daily to the Manila Water branch office and dealt with the consumers through
receipts and I.D.s. issued by the latter. Likewise, their work was directly related to and in the
pursuit of Manila Water's principal business. More importantly, the Court noted that ACGI did
not carry a distinct business free from the control and supervision of Manila Water.
The similarity between this case and the instant petition cannot be denied. For one, the
respondents in said case are petitioners in this case. 81 Second, the work set-up was
essentially the same. While the bill collectors were individually hired, or eventually engaged
through ACGI, they were under the direct control and supervision of the concessionaire,
much like the arrangement between herein petitioners and MWSS. Third, they performed the
same vital function of collection in both cases. Fourth, they worked exclusively for their
employers. Hence, the bill collectors in the Manila Water case were declared employees of
Manila Water despite the existence of a sham labor contractor. In the present case,
petitioners were directly and individually hired by MWSS, the latter not resoting to the
intermediary labor contractor artifice, but a mere a scrap of paper impudently declaring the bill
collectors to be not employees of MWSS. With greater reason, therefore, should the actuality
of the employer-employee relationship between MWSS and petitioners be recognized.
The CSC, as well as the Court of Appeals, makes much of CSC Memorandum Circular No.
38, Series of 1993, which distinguishes between contract of services/job services and
contractual appointment. The Circular provides:
6
Contract of Services and Job Orders are different from Contractual appointment and Plantilla
appointment of casual employees, respectively, which are required to be submitted to CSC
for approval.
Contracts of Services and Job Orders refer to employment described as follows:
1. The contract covers lump sum work or services such as janitorial,
security or consultancy services where no employer-employee relationship
exist;
2. The job order covers piece of work or intermittent job of short duration
not exceeding six months on a daily basis;
3. The contract of services and job orders are not covered by Civil Service
Law, Rules and Regulations; [sic] but covered by COA rules;
4. The employees involved in the contracts or job orders do not enjoy the
benefits enjoined by government employees, such as PERA, COLA and
RATA.
5. As the services rendered under contracts of services and job orders are
not considered government services, they do not have to be submitted to
the Civil Service Commission for approval.82
Clinging to its tenuous denial of petitioners' employee status, the CSC avers that contractual
employees are those with contractual appointment submitted to and attested by the CSC,
unlike petitioners who failed to show that their appointments were duly attested by the CSC.
The Court recognizes the authority of the CSC in promulgating circulars and memoranda
concerning the civil service sector in line with its function as the central personnel agency of
the Government.83 Nevertheless, it cannot turn a blind eye to a rather haphazard application
and interpretation by the CSC of its own issuance, such as in this case.
A careful review of the above-quoted circular shows that the relationship defined by
the Agreement cannot fall within the purview of contract of services or job orders. Payments
made by MWSS' subscribers are the lifeblood of the company. Viewed in that context the
work rendered by the petitioners is essential to the company's survival and growth. Alongside
its public service thrust, the MWSS is an income-generating entity for the Government. It
relies for the most part on the bill collections in order to sustain its operations. The task of
collecting payments for the water supplied by the MWSS to its consumers does not deserve
to be compared with mere janitorial, security or even consultancy work. It is not intermittent
and seasonal, but rather continuous and increasing by reason of its indisputable essentiality.
To lump petitioners with the run-of-the-mill service providers is to ignore the vital role they
perform for the MWSS. Rightly so, as clearly indicated in the circular, employees involved in
the contracts or job orders do not enjoy the benefits enjoyed by the petitioners which are the
same benefits given to government employees.
Petitioners are indeed regular employees of the MWSS. The primary standard of determining
regular employment is the reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the employer. The connection can
be determined by considering the nature of the work performed and its relation to the scheme
of the particular business or trade in its entirety. Likewise, the repeated and continuing need
for the performance of the job has been deemed sufficient evidence of the necessity, if not
indispensability of the activity to the business.84 Some of the petitioners had rendered more
than two decades of service to the MWSS. The continuous and repeated rehiring of these bill
collectors indicate the necessity and desirability of their services, as well as the importance of
the role of bill collectors in the MWSS.
We agree with the CSC when it stated that the authority of government agencies to contract
services is an authority recognized under civil service rules.85 However, said authority cannot
be used to circumvent the laws and deprive employees of such agencies from receiving what
is due them.
The CSC goes further to say that petitioners were unable to present proof that their
appointments were contractual in nature and submitted to the CSC for its approval, and that
submission to and approval of the CSC are important as these show that their services had
been credited as government service.86 The point is of no moment. Petitioners were able to
attach only two of such Agreements which bore the stamp of approval by the CSC and these
are simply inadequate to prove that the other agreements were similarly approved. Even
petitioners admit that subsequently such Agreements were no longer submitted to the CSC
for its approval. Still, the failure to submit the documents for approval of the CSC cannot
militate against the existence of employer-employee relationship between petitioners and
MWSS. MWSS cannot raise its own inaction to buttress its adverse position.
MWSS committed itself to pay severance and terminal leave pay to its regular
employees.87 The guidelines88 thereof states that regular employees who have rendered at
least a year of service and not eligible for retirement are entitled to severance pay equivalent
to one (1) month basic pay for every full year of service. 89 In view of the Court's finding that
petitioners were employees of MWSS, the corresponding severance pay, in accordance with
7
the guidelines, should be given to them. Terminal leave pay are likewise due petitioners,
provided they meet the requirements therefor.
However, petitioners in this case cannot avail of retirement benefits from the GSIS. When
their services were engaged by MWSS, they were not reported as its employees and hence
no deductions were made against them for purpose of the GSIS contributions. It would be
unjust to grant petitioners retirement benefits when there was no remittance of the
employees' or the employer's share of contributions.
The case of Chua v. Civil Service Commission90 relied upon by petitioners is not in point.
There was no question that Chua was an employee, specifically a contractual/project
employee of the National Irrigation Administration (NIA). The CSC's denial of her request for
early retirement benefits was based on the CSC's conclusion that contractual employees are
not covered by the Early Retirement Law.91 This Court held that co-terminus employees who
have rendered years of continuous service such as Chua -who was continuously hired and
rehired for four (4) successive times in a span of fifteen (15) years-should be included in the
coverage of the Early Retirement Law as long as they comply with CSC regulations
promulgated for such purpose. Underlying this grant of retirement benefits to Chua is the
finding that her work with the NIA was recognized and accredited by the CSC as government
service, that she paid her GSIS contributions throughout her service, and the fact that she
applied for the benefit within the prescribed period.92
The differences between Chua and petitioners are readily apparent. The ruling
in Chua concerns claims based on the Early Retirement Law. On the other hand, this case
involves bill collectors who were hired by virtue of individual agreements, and who are now
claiming payment of retirement, separation and terminal leave benefits. Petitioners' services,
admittedly, were not credited/recognized by the CSC. Likewise, the parties still dispute the
nature of their relationship when petitioners made the claim for the benefits, unlike in the case
of Chua where there was no question as to her status as an employee of the NIA. Moreover,
unlike Chua, petitioners in this case did not give any contribution for GSIS coverage,
especially since retirement benefits come from the monthly contributions of GSIS members.
Petitioner's claim for damages and attorney's fees are similarly untenable. MWSS cannot be
made liable for moral damages for the "serious moral disturbance"93 petitioners allegedly
suffered as a result of the denial of the requested benefits because it was merely following
the earlier resolution94 of the CSC. MWSS' adherence to the position of the CSC is but logical.
It is after all, the central personnel agency of the government, and its resolution at the time
was valid and binding on MWSS.
WHEREFORE, the petition is GRANTED IN PART. The DECISION of the Court of Appeals in
C.A. G.R. SP No. 55263, as well as the Civil Service Commission's Resolutions Nos. 991384
and 992074, are hereby REVERSED and SET ASIDE. MWSS is ordered to pay terminal
leave pay and separation pay and/or severance pay to each of herein petitioners on the basis
of remunerations/commissions, allowances and bonuses each were actually receiving at the
time of termination of their employment as contract collectors of MWSS. Let the case be
remanded to the Civil Service Commission for the computation of the above awards and the
appropriate disposition in accordance with the pronouncements in this DECISION .
No pronouncement as to costs.
SO ORDERED.
CALAMBA MEDICAL CENTER, INC., petitioner
vs.
NATIONAL LABOR RELATIONS COMMISSION, RONALDO LANZANAS AND
MERCEDITHA* LANZANAS, respondents.
DECISION
CARPIO MORALES, J.:
The Calamba Medical Center (petitioner), a privately-owned hospital, engaged the services of
medical doctors-spouses Ronaldo Lanzanas (Dr. Lanzanas) and Merceditha Lanzanas (Dr.
Merceditha) in March 1992 and August 1995, respectively, as part of its team of resident
physicians. Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents
were paid a monthly "retainer" of P4,800.00 each.1 It appears that resident physicians were
also given a percentage share out of fees charged for out-patient treatments, operating room
assistance and discharge billings, in addition to their fixed monthly retainer.2
The work schedules of the members of the team of resident physicians were fixed by
petitioner's medical director Dr. Raul Desipeda (Dr. Desipeda). And they were issued
identification cards3 by petitioner and were enrolled in the Social Security System
(SSS).4 Income taxes were withheld from them.5
On March 7, 1998, Dr. Meluz Trinidad (Dr. Trinidad), also a resident physician at the hospital,
inadvertently overheard a telephone conversation of respondent Dr. Lanzanas with a fellow
employee, Diosdado Miscala, through an extension telephone line. Apparently, Dr. Lanzanas
and Miscala were discussing the low "census" or admission of patients to the hospital.6
8
Dr. Desipeda whose attention was called to the above-said telephone conversation issued to
Dr. Lanzanas a Memorandum of March 7, 1998 reading:
As a Licensed Resident Physician employed in Calamba Medical Center since several years
ago, the hospital management has committed upon you utmost confidence in the
performance of duties pursuant thereto. This is the reason why you were awarded the
privilege to practice in the hospital and were entrusted hospital functions to serve the interest
of both the hospital and our patients using your capability for independent judgment.
Very recently though and unfortunately, you have committed acts inimical to the interest of
the hospital, the details of which are contained in the hereto attached affidavit of witness.
You are therefore given 24 hours to explain why no disciplinary action should be taken
against you.
Pending investigation of your case, you are hereby placed under 30-days [sic] preventive
suspension effective upon receipt hereof.7 (Emphasis, italics and underscoring supplied)
Inexplicably, petitioner did not give respondent Dr. Merceditha, who was not involved in the
said incident, any work schedule after sending her husband Dr. Lanzanas the
memorandum,8 nor inform her the reason therefor, albeit she was later informed by the
Human Resource Department (HRD) officer that that was part of petitioner's cost-cutting
measures.9
Responding to the memorandum, Dr. Lanzanas, by letter of March 9, 1998,  admitted that he
10
spoke with Miscala over the phone but that their conversation was taken out of context by Dr.
Trinidad.
On March 14, 1998,11 the rank-and-file employees union of petitioner went on strike due to
unresolved grievances over terms and conditions of employment.12
On March 20, 1998, Dr. Lanzanas filed a complaint for illegal suspension13 before the
National Labor Relations Commission (NLRC)-Regional Arbitration Board (RAB) IV. Dr.
Merceditha subsequently filed a complaint for illegal dismissal.14
In the meantime, then Sec. Cresenciano Trajano of the Department of Labor and
Employment (DOLE) certified the labor dispute to the NLRC for compulsory arbitration
and issued on April 21, 1998 return-to-work Order to the striking union officers and
employees of petitioner pending resolution of the labor dispute.15
In a memorandum16 of April 22, 1998, Dr. Desipeda echoed the April 22, 1998 order of the
Secretary of Labor directing all union officers and members to return-to-work "on or April 23,
1998, except those employees that were already terminated or are serving disciplinary
actions." Dr. Desipeda thus ordered the officers and members of the union to "report for work
as soon as possible" to the hospital's personnel officer and administrator for "work
scheduling, assignments and/or re-assignments."
Petitioner later sent Dr. Lanzanas a notice of termination which he received on April 25, 1998,
indicating as grounds therefor his failure to report back to work despite the DOLE order and
his supposed role in the striking union, thus:
On April 23, 1998, you still did not report for work despite memorandum  issued by the CMC
Medical Director implementing the Labor Secretary's ORDER. The same is true on April 24,
1998 and April 25, 1998,--you still did not report for work [sic].
You are likewise aware that you were observed (re: signatories [sic] to the Saligang Batas of
BMCMC-UWP) to be unlawfully participating as member in the rank-and-file union's
concerted activities despite knowledge that your position in the hospital is managerial in
nature (Nurses, Orderlies, and staff of the Emergency Room carry out your orders using your
independent judgment) which participation is expressly prohibited by the New Labor Code
and which prohibition was sustained by the Med-Arbiter's ORDER dated February 24, 1998.
(Emphasis and italics in the original; underscoring partly in the original and partly supplied)
For these reasons as grounds for termination, you are hereby terminated for cause from
employment effective today, April 25, 1998, without prejudice to further action for revocation
of your license before the Philippine [sic] Regulations [sic] Commission.17 (Emphasis and
underscoring supplied)
Dr. Lanzanas thus amended his original complaint to include illegal dismissal.18 His and Dr.
Merceditha's complaints were consolidated and docketed as NLRC CASE NO. RAB-IV-3-
9879-98-L.
By Decision19 of March 23, 1999, Labor Arbiter Antonio R. Macam dismissed the spouses'
complaints for want of jurisdiction upon a finding that there was no employer-employee
relationship between the parties, the fourth requisite or the "control test" in the determination
of an employment bond being absent.
On appeal, the NLRC, by Decision20 of May 3, 2002, reversed the Labor Arbiter's findings,
disposing as follows:
9
WHEREFORE, the assailed decision is set aside. The respondents are ordered to pay the
complainants their full backwages; separation pay of one month salary for every year of
service in lieu of reinstatement; moral damages of P500,000.00 each; exemplary damages
of P250,000.00 each plus ten percent (10%) of the total award as attorney's fees.
SO ORDERED.21
Petitioner's motion for reconsideration having been denied, it brought the case to the Court of
Appeals on certiorari.
The appellate court, by June 30, 2004 Decision,22 initially granted petitioner's petition and set
aside the NLRC ruling. However, upon a subsequent motion for reconsideration filed by
respondents, it reinstated the NLRC decision in an Amended Decision23 dated September 26,
2006 but tempered the award to each of the spouses of moral and exemplary damages
to P100,000.00 and P50,000.00, respectively and omitted the award of attorney's fees.
In finding the existence of an employer-employee relationship between the parties, the
appellate court held:
x x x. While it may be true that the respondents are given the discretion to decide on how to
treat the petitioner's patients, the petitioner has not denied nor explained why its Medical
Director still has the direct supervision and control over the respondents. The fact is the
petitioner's Medical Director still has to approve the schedule of duties of the respondents.
The respondents stressed that the petitioner's Medical Director also issues instructions or
orders to the respondents relating to the means and methods of performing their duties , i.e.
admission of patients, manner of characterizing cases, treatment of cases, etc., and  may
even overrule, review or revise the decisions of the resident physicians. This was not
controverted by the petitioner. The foregoing factors taken together are sufficient to constitute
the fourth element, i.e. control test, hence, the existence of the employer-employee
relationship. In denying that it had control over the respondents, the petitioner alleged that the
respondents were free to put up their own clinics or to accept other retainership agreement
with the other hospitals. But, the petitioner failed to substantiate the allegation with substantial
evidence. (Emphasis and underscoring supplied)24
The appellate court thus declared that respondents were illegally dismissed.
x x x. The petitioner's ground for dismissing respondent Ronaldo Lanzanas was based on his
alleged participation in union activities, specifically in joining the strike and failing to observe
the return-to-work order issued by the Secretary of Labor. Yet, the petitioner did not adduce
any piece of evidence to show that respondent Ronaldo indeed participated in the strike. x x
x.
In the case of respondent Merceditha Lanzanas, the petitioner's explanation that "her
marriage to complainant Ronaldo has given rise to the presumption that her sympat[hies] are
likewise with her husband" as a ground for her dismissal is unacceptable. Such is not one of
the grounds to justify the termination of her employment.25 (Underscoring supplied)
The fallo of the appellate court's decision reads:
WHEREFORE, the instant Motion for Reconsideration is GRANTED, and the Court's decision
dated June 30, 2004, is SET ASIDE. In lieu thereof, a new judgment is entered, as follows:
WHEREFORE, the petition is DISMISSED. The assailed decision dated May 3, 2002 and
order dated September 24, 2002 of the NLRC in NLRC NCR CA No. 019823-99 are
AFFIRMED with the MODIFICATION that the moral and exemplary damages are reduced
to P100,000.00 each and P50,000.00 each, respectively.
SO ORDERED.26 (Emphasis and italics in the original; underscoring supplied)
Preliminarily, the present petition calls for a determination of whether there exists an
employer-employee relationship27 between petitioner and the spouses-respondents.
Denying the existence of such relationship, petitioner argues that the appellate court, as well
as the NLRC, overlooked its twice-a-week reporting arrangement with respondents who are
free to practice their profession elsewhere the rest of the week. And it invites attention to the
uncontroverted allegation that respondents, aside from their monthly retainers, were entitled
to one-half of all suturing, admitting, consultation, medico-legal and operating room
assistance fees.28 These circumstances, it stresses, are clear badges of the absence of any
employment relationship between them.
This Court is unimpressed.
Under the "control test," an employment relationship exists between a physician and a
hospital if the hospital controls both the means and the details of the process by which the
physician is to accomplish his task.29
10
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 is compensated according to the result of
his efforts and not the amount thereof, the element of control is absent.30
As priorly stated, private respondents maintained specific work-schedules, as determined by
petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight
hours each week and which were strictly to be observed under pain of administrative
sanctions.
That petitioner exercised control over respondents gains light from the undisputed fact that in
the emergency room, the operating room, or any department or ward for that matter,
respondents' work is monitored through its nursing supervisors, charge nurses and orderlies.
Without the approval or consent of petitioner or its medical director, no operations can be
undertaken in those areas. For control test to apply, it is not essential for the employer to
actually supervise the performance of duties of the employee, it being enough that it has the
right to wield the power.31
With respect to respondents' sharing in some hospital fees, this scheme does not sever the
employment tie between them and petitioner as this merely mirrors additional form or another
form of compensation or incentive similar to what commission-based employees receive as
contemplated in Article 97 (f) of the Labor Code, thus:
"Wage" paid to any employee shall mean the remuneration or earning, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for work done
or to be done, or for services rendered or to be rendered and includes the fair and reasonable
value, as determined by the Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee. x x x (Emphasis and underscoring
supplied),
Respondents were in fact made subject to petitioner-hospital's Code of Ethics, 32 the
provisions of which cover administrative and disciplinary measures on negligence of duties,
personnel conduct and behavior, and offenses against persons, property and the hospital's
interest.
More importantly, petitioner itself provided incontrovertible proof of the employment status of
respondents, namely, the identification cards it issued them, the payslips33 and BIR W-2 (now
2316) Forms which reflect their status as employees, and the classification as "salary" of their
remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth)
program. It bears noting at this juncture that mandatory coverage under the SSS Law34 is
premised on the existence of an employer-employee relationship,35 except in cases of
compulsory coverage of the self-employed. It would be preposterous for an employer to
report certain persons as employees and pay their SSS premiums as well as their wages if
they are not its employees.36
And if respondents were not petitioner's employees, how does it account for its issuance of
the earlier-quoted March 7, 1998 memorandum explicitly stating that respondent is
"employed" in it and of the subsequent termination letter indicating respondent Lanzanas'
employment status.
Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an
employer-employee relationship exists between the resident physicians and the training
hospitals, unless there is a training agreement between them, and the training program is
duly accredited or approved by the appropriate government agency. In respondents' case,
they were not undergoing any specialization training. They were considered non-
training general practitioners,37 assigned at the emergency rooms and ward sections.
Turning now to the issue of dismissal, the Court upholds the appellate court's conclusion that
private respondents were illegally dismissed.
Dr. Lanzanas was neither a managerial nor supervisory employee but part of the rank-and-
file. This is the import of the Secretary of Labor's Resolution of May 22, 1998 in OS A-05-15-
98 which reads:
xxxx
In the motion to dismiss it filed before the Med-Arbiter, the employer (CMC) alleged that 24
members of petitioner are supervisors, namely x x x Rolando Lanzonas [sic] x x x.
A close scrutiny of the job descriptions of the alleged supervisors narrated by the employer
only proves that except for the contention that these employees allegedly supervise, they do
not however recommend any managerial action. At most, their job is merely routinary in
nature and consequently, they cannot be considered supervisory employees.
They are not therefore barred from membership in the union of rank[-]and[-]file, which the
petitioner [the union] is seeking to represent in the instant case. 38 (Emphasis and
underscoring supplied)
11
xxxx
Admittedly, Dr. Lanzanas was a union member in the hospital, which is considered
indispensable to the national interest. In labor disputes adversely affecting the continued
operation of a hospital, Article 263(g) of the Labor Code provides:
ART. 263. STRIKES, PICKETING, AND LOCKOUTS.–
xxxx
(g) x x x x
x x x x. In labor disputes adversely affecting the continued operation of such hospitals, clinics
or medical institutions, it shall be the duty of the striking union or locking-out employer to
provide and maintain an effective skeletal workforce of medical and other health personnel,
whose movement and services shall be unhampered and unrestricted, as are necessary to
insure the proper and adequate protection of the life and health of its patients, most especially
emergency cases, for the duration of the strike or lockout. In such cases, the Secretary of
Labor and Employment is mandated to immediately assume, within twenty-four hours from
knowledge of the occurrence of such strike or lockout, jurisdiction over the same or certify to
the Commission for compulsory arbitration. For this purpose, the contending parties are
strictly enjoined to comply with such orders, prohibitions and/or injunctions as are issued by
the Secretary of Labor and Employment or the Commission, under pain of immediate
disciplinary action, including dismissal or loss of employment status or payment by the
locking-out employer of backwages, damages and other affirmative relief, even criminal
prosecution against either or both of them.
x x x x (Emphasis and underscoring supplied)
An assumption or certification order of the DOLE Secretary automatically results in a return-
to-work of all striking workers, whether a corresponding return-to-work order had been
issued.39 The DOLE Secretary in fact issued a return-to-work Order, failing to comply with
which is punishable by dismissal or loss of employment status.40
Participation in a strike and intransigence to a return-to-work order must, however, be duly
proved in order to justify immediate dismissal in a "national interest" case. As the appellate
court as well as the NLRC observed, however, there is nothing in the records that would bear
out Dr. Lanzanas' actual participation in the strike. And the medical director's
Memorandum41 of April 22, 1998 contains nothing more than a general directive to all union
officers and members to return-to-work. Mere membership in a labor union does not ipso
facto mean participation in a strike.
Dr. Lanzanas' claim that, after his 30-day preventive suspension ended on or before April 9,
1998, he was never given any work schedule42 was not refuted by petitioner. Petitioner in fact
never released any findings of its supposed investigation into Dr. Lanzanas' alleged "inimical
acts."
Petitioner thus failed to observe the two requirements,before dismissal can be effected ─
notice and hearing ─ which constitute essential elements of the statutory process; the first to
apprise the employee of the particular acts or omissions for which his dismissal is sought, and
the second to inform the employee of the employer's decision to dismiss him. 43 Non-
observance of these requirements runs afoul of the procedural mandate.44
The termination notice sent to and received by Dr. Lanzanas on April 25, 1998 was the first
and only time that he was apprised of the reason for his dismissal. He was not afforded,
however, even the slightest opportunity to explain his side. His was a "termination upon
receipt" situation. While he was priorly made to explain on his telephone conversation with
Miscala,45 he was not with respect to his supposed participation in the strike and failure to
heed the return-to-work order.
As for the case of Dr. Merceditha, her dismissal was worse, it having been effected without
any just or authorized cause and without observance of due process. In fact, petitioner never
proferred any valid cause for her dismissal except its view that "her marriage to [Dr.
Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband; [and
that when [Dr. Lanzanas] declared that he was going to boycott the scheduling of their
workload by the medical doctor, he was presumed to be speaking for himself [and] for his wife
Merceditha."46
Petitioner's contention that Dr. Merceditha was a member of the union or was a participant in
the strike remained just that. Its termination of her employment on the basis of her conjugal
relationship is not analogous to
any of the causes enumerated in Article 28247 of the Labor Code. Mere suspicion or belief, no
matter how strong, cannot substitute for factual findings carefully established through orderly
procedure.48
12
The Court even notes that after the proceedings at the NLRC, petitioner never even
mentioned Dr. Merceditha's case. There is thus no gainsaying that her dismissal was both
substantively and procedurally infirm.
Adding insult to injury was the circulation by petitioner of a "watchlist" or "watch out
list"49 including therein the names of respondents. Consider the following portions of Dr.
Merceditha's Memorandum of Appeal:
3. Moreover, to top it all, respondents have circulated a so called "Watch List" to other
hospitals, one of which [was] procured from Foothills Hospital in Sto. Tomas, Batangas [that]
contains her name. The object of the said list is precisely to harass Complainant and malign
her good name and reputation. This is not only unprofessional, but runs smack of oppression
as CMC is trying permanently deprived [sic] Complainant of her livelihood by ensuring that
she is barred from practicing in other hospitals.
4. Other co-professionals and brothers in the profession are fully aware of these "watch out"
lists and as such, her reputation was not only besmirched, but was damaged, and she
suffered social humiliation as it is of public knowledge that she was dismissed from work.
Complainant came from a reputable and respected family, her father being a retired full
Colonel in the Army, Col. Romeo A. Vente, and her brothers and sisters are all professionals,
her brothers, Arnold and Romeo Jr., being engineers. The Complainant has a family
protection [sic] to protect. She likewise has a professional reputation to protect, being a
licensed physician. Both her personal and professional reputation were damaged as a result
of the unlawful acts of the respondents.50
While petitioner does not deny the existence of such list, it pointed to the lack of any board
action on its part to initiate such listing and to circulate the same, viz:
20. x x x. The alleged watchlist or "watch out list," as termed by complainants, were merely
lists obtained by one Dr. Ernesto Naval of PAMANA Hospital. Said list was given by a
stockholder of respondent who was at the same time a stockholder of PAMAN[A] Hospital.
The giving of the list was not a Board action.51 (Emphasis and underscoring supplied)
The circulation of such list containing names of alleged union members intended to prevent
employment of workers for union activities similarly constitutes unfair labor practice, thereby
giving a right of action for damages by the employees prejudiced.52
A word on the appellate court's deletion of the award of attorney's fees. There being no basis
advanced in deleting it, as exemplary damages were correctly awarded, 53 the award of
attorney's fees should be reinstated.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 75871
is AFFIRMED with MODIFICATION in that the award by the National Labor Relations
Commission of 10% of the total judgment award as attorney's fees is reinstated. In all other
aspects, the decision of the appellate court is affirmed.
SO ORDERED.
R TRANSPORT CORPORATION, Petitioner, v. ROGELIO EJANDRA, Respondent.
DECISION
CORONA, J.:
Before us is a Petition for Review of the decision 1 of the Court of Appeals2 dated December
22, 2000 dismissing the Petition for Certiorari of the decision of the National Labor Relations
Commission3 (NLRC) dated May 30, 1997. The latter affirmed the decision4 of the labor
arbiter dated February 27, 1997 holding petitioner liable for illegal dismissal and directing
private respondents reinstatement.
Private respondent Rogelio Ejandra alleged that, for almost six years, from July 15, 1990 to
January 31, 1996, he worked as a bus driver of petitioner R Transport Corporation. He plied
the route Muntilupa-Alabang-Malanday-Monumento-UE-Letre-Sangandaan from 5:00 a.m. up
to 2:00 a.m. the next day and was paid 10% of his daily earnings.
On January 31, 1996, an officer of the Land Transportation Office (LTO), Guadalupe Branch,
Makati City, apprehended him for obstruction of traffic for which his license was confiscated.
Upon his arrival at petitioners garage, he immediately reported the incident to his manager,
Mr. Oscar Pasquin, who gave him P500 to redeem his license. The following day, he went to
LTO, Guadalupe Branch, to claim it but he was told that it had not yet been turned over by the
officer who apprehended him. He was able to retrieve his license only after a week.
On February 8, 1996, private respondent informed Mr. Pasquin that he was ready to report for
work. However, he was told that the company was still studying whether to allow him to drive
again. Private respondent was likewise accused of causing damage to the bus he used to
drive. Denying the charge, private respondent blamed the person who drove the said bus
13
during his absence, considering that the damage was sustained during the week that he did
not drive the bus. Mr. Pacquin nonetheless told him Magpahinga ka muna at tatawagin ka na
lang namin kung kailangan ka na para magmaneho. Magbakasyon ka muna, bata. When
respondent asked how long he had to rest, the manager did not give a definite time.
Petitioner denied private respondents allegations and claimed that private respondent, a
habitual absentee, abandoned his job. To belie private respondents allegation that his license
had been confiscated, petitioner asserted that, had it been true, he should have presented an
apprehension report and informed petitioner of his problems with the LTO. But he did not.
Petitioner further argued that private respondent was not an employee because theirs was a
contract of lease and not of employment, with petitioner being paid on commission basis.
In disputing petitioners claim that private respondent was not its employee and was not
therefore entitled to notice and hearing before termination, the NLRC held
that:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
It is very clear that (sic) from no less than appellants admission, that complainant was not
afforded his right to due process prior to the severance of his employment with respondents.
(First par. p.3, respondents Appeal Memorandum, p. 45, Rollo)
Appellants defense of denying the existence of employer-employee relationship with the
complainant based on the manner by which complainant was being paid his salary, cannot
hold water.

On February 23, 1997, labor arbiter Rogelio Yulo rendered his decision in favor of private x    x    x
respondent. The dispositive portion of the decision read:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
While employees paid on piece-rate and commission basis are not covered by the provisions
PREMISES CONSIDERED, judgment is hereby rendered finding the dismissal of Rogelio of the Labor Code, as amended, on hours of work, these employees however, for all intents
Ejandra to be without just cause and, therefore, illegal and ORDERING R-Transport to and purposes, are employees of their employers.
REINSTATE him to his former position without loss of seniority and other benefits and to pay
him backwages from the time of his dismissal until actual reinstatement. xxxxxxxxx7 ςrνll

SO ORDERED.5 ςrνll Petitioner filed in the Court of Appeals a Petition for Certiorari on the ground that the NLRC
committed grave abuse of discretion in affirming the decision of the labor arbiter. On
Labor arbiter Yulo gave no weight to petitioners claim that private respondent abandoned his December 22, 2000, the Court of Appeals rendered a decision, the dispositive portion of
work. His one-week absence did not constitute abandonment of work considering that it took which read:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
him the whole week to reclaim his license. Private respondent could not retrieve it unless and
until the apprehending officer first transmitted it to their office. His inability to drive for WHEREFORE, the instant petition is hereby DENIED for lack of merit.
petitioner that whole week was therefore not his fault and petitioner could be held liable for
illegal dismissal. Due process was not accorded to private respondent who was never given SO ORDERED.8 ςrνll
the opportunity to contest the charge of abandonment.Moreover, assuming actual
abandonment, petitioner should have reported such fact to the nearest employment office of Categorizing the issues raised by petitioner as factual, the appellate court held that the
the Department of Labor and Employment. But no such report was ever made. findings of fact of the labor arbiter (affirmed by the NLRC) were entitled to great respect
because they were supported by substantial evidence. The Court of Appeals also ruled that
On May 30, 1997, the NLRC rendered a decision affirming the decision of the labor petitioner was barred from denying the existence of an employer-employee relationship
arbiter:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ because petitioner invoked its rights under the law and jurisprudence as an employer in
dismissing private respondent.
WHEREFORE, premises considered, the appeal is hereby DISMISSED and the appealed
decision AFFIRMED in toto. Hence, this appeal based on the following assignments of
errors:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
SO ORDERED.6 ςrνll
14
A respondents rights to notice and hearing; and, that private respondents affidavit was hearsay
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS, TENTH DIVISION
COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT AFFIRMED/ADOPTED IN TOTO
THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC) BASED
PURELY ON A SPECULATION, SURMISE OR CONJECTURE.
B a general rule, conclusive upon and binding on this Court.10 This doctrine applies with greater
THE FINDINGS OF FACTS ARE MERE CONCLUSIONS WITHOUT CITATION OR
SPECIFIC EVIDENCE ON WHICH THEY ARE BASED.
C
FURTHER, THE HONORABLE COURT OF APPEALS, TENTH DIVISION COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT
RULING THAT THE RELATIONSHIP IN LAW OCCURRING BETWEEN THE PETITIONER
R TRANSPORT CORPORATION AND THE PRIVATE RESPONDENT WAS IN A NATURE
OF LESSOR AND LESSEE.
D dismissed, private respondent filed a complaint for illegal dismissal against petitioner.
MOREOVER, THERE IS A NEED BY THIS HONORABLE COURT TO GIVE A SECOND
LOOK ON THE RECORDS OF NLRC NCR CASE RAB NO. IV-2-7910-R / NLRC NCR CA-
012-605-97 TO AVOID MISCARRIAGE OF JUSTICE AND FURTHERANCE OF THE
STATUTORY REQUIREMENTS OF DUE PROCESS.
E the existence of an employer-employee relationship. In its petition filed before this Court,
FINALLY, THE HONORABLE COURT OF APPEALS, TENTH DIVISION GRAVELY ERRED
IN DENYING THE PETITION IN CA-G.R. SP. NO. 51962 IN ITS DECISION
PROMULGATED ON DECEMBER 22, 2000 (ANNEXES G AND G-1) AND IN ITS
RESOLUTION DATED JUNE 4, 2001 (ANNEX B), HAS ACTED CONTRARY TO LAW AND
THE RULES OF COURT.9 ςrνll
According to the petitioner, the appellate court erred in not finding that private respondent
abandoned his work; that petitioner was not the lessor of private respondent; that, as such,
the termination of the contract of lease of services did not require petitioner to respect private
and self-serving.
We deny the appeal.
Under Section 1, Rule 45 of the 1997 Rules of Civil Procedure, a Petition for Review shall
only raise questions of law considering that the findings of fact of the Court of Appeals are, as
force in labor cases where the factual findings of the labor tribunals are affirmed by the Court
of Appeals. The reason is because labor officials are deemed to have acquired expertise in
matters within their jurisdiction and therefore, their factual findings are generally accorded not
only respect but also finality, and are binding on this Court.11 ςrνll
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. After he was apprehended for a traffic violation, his license
was confiscated. When he informed petitioners general manager of such fact, the latter gave
him money to redeem his license. He went to the LTO office everyday but it was only after a
week that he was able to get back his license. When he reported back to work, petitioners
manager told him to wait until his services were needed again. Considering himself
We have no reason to disturb all these factual findings because they are amply supported by
substantial evidence.
Denying the existence of an employer-employee relationship, petitioner insists that the parties
agreement was for a contract of lease of services. We disagree. Petitioner is barred to negate
petitioner invoked our rulings on the right of an employer to dismiss an employee for just
cause.12 Petitioner maintained that private respondent was justifiably dismissed due to
abandonment of work. By adopting said rulings, petitioner impliedly admitted that it was in fact
the employer of private respondent. According to the control test, the power to dismiss an
employee is one of the indications of an employer-employee relationship.13 Petitioners claim
that private respondent was legally dismissed for abandonment was in fact a negative
pregnant:14 an acknowledgement that there was no mutual termination of the alleged contract
of lease and that private respondent was its employee. The fact that petitioner paid private
respondent on commission basis did not rule out the presence of an employee-employer
relationship. Article 97(f) of the Labor Code clearly provides that an employees wages can be
in the form of commissions.
15
We now ask the next question: was private respondent, an employee of petitioner, dismissed
for just cause? We do not think so.
According to petitioner, private respondent abandoned his job and lied about the confiscation
of his license. To constitute abandonment, two elements must concur: (1) the failure to report
for work or absence without valid or justifiable reason and (2) a clear intention to sever the
employer-employee relationship. Of the two, the second element is the more determinative
factor and should be manifested by some overt acts. Mere absence is not sufficient. It is the
employer who has the burden of proof to show a deliberate and unjustified refusal of the
employee to resume his employment without any intention of returning.15 ςrνll
In the instant case, petitioner fell short of proving the requisites. To begin with, petitioners
absence was justified because the LTO, Guadalupe Branch, did not release his license until
after a week. This was the unanimous factual finding of the labor tribunals and the Court of
Appeals. As aptly held by labor arbiter Yulo, the process of redeeming a confiscated license,
based on common experience, depended on when the apprehending officer turned over the
same. Second, private respondent never intended to sever his employment as he in fact
reported for work as soon as he got his license back. Petitioner offered no evidence to rebut
these established facts. Third, labor arbiter Yulo correctly observed that, if private respondent
really abandoned his work, petitioner should have reported such fact to the nearest Regional
Office of the Department of Labor and Employment in accordance with Section 7, Rule XXIII,
Book V of Department Order No. 9, series of 199716 (Rules Implementing Book V of the Labor
Code). Petitioner made no such report.
In addition to the fact that petitioner had no valid cause to terminate private respondent from
work, it violated the latters right to procedural due process by not giving him the required
notice and hearing. Section 2, Rule XXIII, Book V of Department Order No. 9 provides for the
procedure for dismissal for just or authorized cause:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
SEC. 2. Standards of due process; requirement of notice. In all cases of termination of
employment, the following standards of due process shall be substantially
observed:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
I. For termination of employment based on just causes as defined in Article 282 of the
Code:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
(a) A written notice served on the employee specifying the ground or grounds for termination,
and giving to said employee reasonable opportunity within which to explain his
side;chanroblesvirtuallawlibrary
(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; andcralawlibrary
(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination. In case of termination, the foregoing notices shall be served on the employees
last known address.
II. For termination of employment as based on authorized causes defined in Article 283 of the
Code, the requirements of due process shall be deemed complied with upon service of a
written notice to the employee and the appropriate Regional Office of the Department at least
thirty days before the effectivity of the termination, specifying the ground or grounds for
termination.
III. If termination is brought about by the completion of the contract or phase thereof, no prior
notice is required. If the termination is brought about by the failure of an employee to meet the
standards of the employer in case of probationary employment, it shall be sufficient that a
written notice is served the employee within a reasonable time from the effective date of
termination.
WHEREFORE, premises considered, the petition is hereby DENIED. Costs against the
petitioner.
SO ORDERED.
TONGKO V. THE MANUFACTURERS LIFE (G.R. NO. 167622; JANUARY 25, 2011)
CASE DIGEST: GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE
CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS
FACTS: Taking from the November 2008 decision, the facts are as follows:
Manufacturers Life Insurance, Co. is a domestic corporation engaged in life insurance
business. De Dios was its President and Chief Executive Officer. Petitioner Tongko started
his relationship with Manulife in 1977 by virtue of a Career Agent's Agreement.
16
Pertinent provisions of the agreement state that:
It is understood and agreed that the Agent is an independent contractor and nothing
contained herein shall be construed or interpreted as creating an employer-employee
relationship between the Company and the Agent.
a) The Agent shall canvass for applications for Life Insurance, Annuities, Group policies and
other products offered by the Company, and collect, in exchange for provisional receipts
issued by the Agent, money due or to become due to the Company in respect of applications
or policies obtained by or through the Agent or from policyholders allotted by the Company to
the Agent for servicing, subject to subsequent confirmation of receipt of payment by the
Company as evidenced by an Official Receipt issued by the Company directly to the
policyholder.
b) The Company may terminate this Agreement for any breach or violation of any of the
provisions hereof by the Agent by giving written notice to the Agent within fifteen (15) days
from the time of the discovery of the breach. No waiver, extinguishment, abandonment,
withdrawal or cancellation of the right to terminate this Agreement by the Company shall be
construed for any previous failure to exercise its right under any provision of this Agreement.
c) Either of the parties hereto may likewise terminate his Agreement at any time without
cause, by giving to the other party fifteen (15) days notice in writing.
Sometime in 2001, De Dios addressed a letter to Tongko, then one of the Metro North
Managers, regarding meetings wherein De Dios found Tongko's views and comments to be
unaligned with the directions the company was taking. De Dios also expressed his concern
regarding the Metro North Managers' interpretation of the company's goals. He maintains that
Tongko's allegations are unfounded. Some allegations state that some Managers are
unhappy with their earnings, that they're earning less than what they deserve and that these
are the reasons why Tonko's division is unable to meet agency development objectives.
However, not a single Manager came forth to confirm these allegations. Finally, De Dios
related his worries about Tongko's inability to push for company development and growth.
De Dios subsequently sent Tongko a letter of termination in accordance with Tongko's Agents
Contract. Tongko filed a complaint with the NLRC against Manulife for illegal dismissal,
alleging that he had an employer-employee relationship with De Dios instead of a revocable
agency by pointing out that the latter exercised control over him through directives regarding
how to manage his area of responsibility and setting objectives for him relating to the
business. Tongko also claimed that his dismissal was without basis and he was not afforded
due process. The NLRC ruled that there was an employer-employee relationship as
evidenced by De Dios's letter which contained the manner and means by which Tongko
should do his work. The NLRC ruled in favor of Tongko, affirming the existence of the
employer-employee relationship.
The Court of Appeals, however, set aside the NLRC's ruling. It applied the four-fold test for
determining control and found the elements in this case to be lacking, basing its decision on
the same facts used by the NLRC. It found that Manulife did not exert control over Tongko,
there was no employer-employee relationship and thus the NLRC did not have jurisdiction
over the case.
The Supreme Court reversed the ruling of the Court of Appeals and ruled in favor of Tongko.
However, the Supreme Court issued another Resolution dated June 29, 2010, reversing its
decision. Tongko filed a motion for reconsideration, which is now the subject of the instant
case.
ISSUE: Did the Supreme Court err in issuing the June 29, 2010 resolution, reversing its
earlier decision that an employer-employee relationship existed?
HELD: The Supreme Court finds no reason to reverse the June 29, 2010 decision. 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.
17

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
companys 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" do 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.
In sum, the Supreme Court found absolutely no evidence of labor law control. DENIED.
DISSENT by Justice Presbitero J. Velasco, Jr.: GREGORIO V. TONGKO, petitioner, vs. THE
MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE
DIOS, respondents. (G.R. No. 167622, January 25, 2011)
FACTS: The facts are culled from the main case.
ISSUE: Whether or not Tongko during all the time he was directly or indirectly connected with
the company, first as an agent, pursuant to a Career Agents Agreement (Agreement), and
then as unit, branch and eventually regional sales manager of Manulife's Sales Agency
Organization was an employee of Manulife.
HELD: The petition is meritorious.
In resolving the issue of whether an employer-employee tie obtains, attention was focused, as
jurisprudential trend dictates, on the four-fold test on employment developed and invariably
invoked by labor officials and this Court as a guiding, if not governing norm, to determine,
based on the facts and circumstances involved in a given situation, whether such relationship
exists. These four elements are:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the control test.
The control test meaning whether or not the employer controls or has reserved the right to
control the employee not only as to the result of the work to be done but also the means and
methods employed in reaching that end constitutes the most important index of the existence
of an employer-employee relationship.
From the evidence on record, it appears that Manulife had control over the work of Tongko
after his appointment as manager of the company's insurance sales force, indubitably
implying the existence of an employer-employee relationship between them.
In the case of Great Pacific Life Assurance Corporation v. NLRC, Ernesto Ruiz and Rodrigo
Ruiz (the Grepalife case), as Justice Velasco cites, it was held that the employer company
practically dictated the manner by which jobs were to be carried out. The functions of the then
district managers are similar to the functions of Tongko in the present case. Thus, if the
district managers in the Grepalife case were held by the court to be employees then Tongko
who is in the same situation, according to Justice Velasco, should also be deemed an
employee of Manulife.
Also, he maintains that, similar to the respondent in the Grepa case who was an insurance
agent but also had a management contract, the fact that the Agents Agreement was
subsisting even after Tongko's appointment as manager does not militate against a
conclusion that Tongko was Manulife's employee during his stint as a manager. While there
was perhaps no written management contract whence Tongko's rights, duties and functions
18
as unit/branch manager may easily be fleshed out as a prelude to determining if an employer- were reprimanded accordingly. It denied the employees' claim that they were
dismissed and maintained they were only placed on floating status for lack of
employee relationship with Manulife did exist, other evidence was adduced to show such available work assignments.
duties and responsibilities.
During the pendency of the case, Ubalubao, on her own behalf, filed a Motion to
Dismiss/Withdraw Complaint and Waiver.
The petition is partially granted such that Tongko may only be considered an employee of
Manulife from the time of his appointment as manager. Issue:
Whether or not Lapastora was illegally dismissed.
Olympia Housing, Inc. vs. Lapasora, et al.,
Facts:
Ruling:
A complaint for illegal dismissal, payment of backwages and other benefits, and
The court ruled in the affirmative.
regularization of employment filed by Allan Lapastora (Lapastora) and Irene Ubalubao
(Ubalubao) against Olympic Housing, Inc. (OHI), the entity engaged in the
Indisputably, Lapastora was a regular employee of OHI. As found by the LA, he has
management of the Olympia Executive Residences (OER), a condominium hotel
been under the continuous employ of OHI since March 3, 1995 until he was placed on
building situated in Makati City. Lapastora and Ubalubao alleged that they worked as
floating status in February 2000. His uninterrupted employment by OHI, lasting for
room attendants of OHI from March 1995 and June 1997, respectively, until they were
more than a year, manifests the continuing need and desirability of his services,
placed on floating status on February 24, 2000, through a memorandum sent by Fast
which characterize regular employment.
Manpower.chanroblesvirtuallawlibrary
By the nature of its petitioner’s business, it is necessary that it maintains a pool of
To establish employer-employee relationship with OHI, Lapastora and Ubalubao
housekeeping staff to ensure that the premises remain an uncluttered place of
alleged that they were directly hired by the company and received salaries directly
comfort for the occupants. It is no wonder why Lapastora, among several others, was
from it. They also claimed that OHI exercised control over them as they were issued
continuously employed by OHI precisely because of the indispensability of their
time cards, disciplinary action reports and checklists of room assignments. It was also
services to its business.
OHI which terminated their employment after they petitioned for regularization. Prior
to their dismissal, they were subjected to investigations for their alleged involvement
The argument that formal notices of investigation were not complied with since he
in the theft of personal items and cash belonging to hotel guests and were summarily
was not an employee of OHI but of Fast Manpower does not hold because Lapastora
dismissed by OHI despite lack of evidence.chanroblesvirtuallawlibrary
was under the effective control and supervision of OHI through the company
supervisor. She gave credence to the pertinent records of Lapastora's employment,
For their part, OHI and Limcaoco alleged that Lapastora and Ubalubao were not
i.e., timecards, medical records and medical examinations, which all indicated OHI as
employees of the company but of Fast Manpower, an independent contractor with
his employer. That there is an existing contract of services between OHI and Fast
which it had a contract of services, particularly, for the provision of room attendants.
Manpower where both parties acknowledged the latter as the employer of the
housekeeping staff, including Lapastora, did not alter established facts proving the
Reinforcing OHI's claims, Fast Manpower reiterated that it is a legitimate manpower
contrary.
agency and that it had a valid contract of services with OHI, pursuant to which
Lapastora and Ubalubao were deployed as room attendants. Lapastora and
To justify fully the dismissal of a regular employee, the employer must, as a rule,
Ubalubao were, however, found to have violated house rules and regulations and
prove that the dismissal was for a just cause and that the employee was afforded due
19
process prior to dismissal. As a complementary principle, the employer has the
burden of proving with clear, accurate, consistent, and convincing evidence the
validity of the dismissal.

It appears that OHI failed to prove that Lapastora's dismissal was grounded on a just
or authorized cause. While it claims that it had called Lapastora's attention several
times for his infractions, it does not appear from the records that the latter had been
notified of the company's dissatisfaction over his performance and that he was not
given an opportunity to explain. In the same manner, allegations regarding
Lapastora's involvement in the theft of personal items and cash belonging to hotel
guests remained unfounded suspicions as they were not proven despite OHI's probe
into the incidents.

In the present case, Lapastora was not informed of the charges against him and was
denied the opportunity to disprove the same. He was summarily terminated from
employment.

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