Labor Law I: Labor Standards
Part I - Introduction to Labor Law
1. Brief History of Labor and Labor Legislations 2. Classification of Labor Legislation
3. Legal Framework of Labor Legislations / Sources of Rights of Labor and Employment
Police Power of the State
St. Luke’s Medical Center Employees Foundation – AFW vs. NLRC G.R. No. 162053
ST. LUKE'S MEDICAL CENTER EMPLOYEE'S ASSOCIATION-AFW (SLMCEA-AFW) AND MARIBEL S. SANTOS vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND ST. LUKE'S MEDICAL CENTER, INC.
March 7, 2007
Facts: Maribel S. Santos has been working for St. Luke's Medical Center for almost eight years. On 1992, Republic Act No. 7431 known as the Radiologic Technology Act of 1992 was passed. R.A. 7431 requires individuals who work as radiologists or x-ray technologists in the Philippines to acquire a legal certificate of registration from the Board of Radiologic Technology. Upon the law’s passage, St. Luke's Medical Center notified all its employees practicing Radiologic Technology to comply with the law’s requirements. Its notice also warned employees that their failure to comply with the requirements would result to their transfer to an area which doesn’t require a license, that is if there are still available slots. Santos, despite receiving several notices failed to comply and was notified by St. Luke's Medical Center that she will be compelled to retire if they are left with no other available positions for her in the hospital. Not only did Santos refuse the offer to retire, but she also was unqualified for any other vacant positions in the hospital. She also failed the board examination, afterwards. The events that transpired caused St. Luke's Medical Center to issue Santos with a notice of separation. Santos, who found her employer’s action unfair, filed a case against her employer for illegal dismissal, non-payment of salaries, allowances, and other monetary benefits.
The Labor Arbiter ruled in favour of Santos. Santos, however, was dissatisfied with the decision and filed an appeal before the National Labor
Relations Commission which agreed with the Labor Arbiter’s decision. The National Labor Relations Commission denied Santos’ motion for reconsideration. This motivated Santos to file a petition before the Court of Appeals which agrred with the Commission’s decision. Thus, the petitioners filed a petition before the Supreme Court.
Issue: Whether or not Santos was illegally dismissed by her employer on the basis of her inability to secure a certificate of registration from the Board of Radiologic Technology.
Held: No. Section 2 of R.A. 7431 states: “It is the policy of the State to upgrade the practice of radiologic technology in the Philippines for the purpose of protecting the public from the hazards posed by radiation as well as to ensure safe and proper diagnosis, treatment and research through the application of machines and/or equipment using radiation.” One of the state’s inherent powers is police power. Through the state’s police power, it can lay down some regulations in order to improve the health, morals, educations, good order, safety or general welfare of the people. The state is justified in prescribing the specific requirements for x-ray technicians and/or any other professions connected with the health and safety of its citizens. Santos, being a practitioner in the medical field, must follow the law and cannot come above the law and override public interest.
Collective Bargaining Agreements (CBA) DOLE Philippines vs. Pawis ng Makabayang Obrero G.R. No. 146650
DOLE PHILIPPINES, INC., petitioner vs.
PAWIS NG MAKABAYANG OBRERO (PAMAO-NFL) January 13, 2003
Facts: Dole Philippines Inc. and Pawis ng Makabayang Obrero entered into a collective bargaining agreement which was supposed to last for five years. The collective bargaining agreement provides that Dole will give its employees a meal allowance of 10.00 pesos who will render actual overtime work for at least 2 hours, not exceeding 25.00 pesos after 3 hours of actual overtime work.
Despite the agreement pertained in the collective bargaining agreement , some of Dole’s departments granted free meals after exactly three hours while other departments only give free meals after employees have rendered more than 3 hours of actual overtime work. Both parties decided
to submit the dispute to voluntary arbitration. The arbitrator ruled in favour of Pawis ng Makabayang Obrero, prompting Dole to file a motion for reconsideration, but was denied. After going to the Court of Appeals to seek a more favourable decision, the petitioners filed. Thus, it filed a petition for review before the Supreme Court.
Issue: Whether or not a Dole employee is entitled to free meal after rendering three hours of actual overtime work.
Held: Yes. The collective bargaining agreement, containing the intent of both parties, clearly states that free meal is granted to a Dole employee who renders exactly or no less than three hours of overtime work, and not only after more than three hours of overtime work. Exercise of management prerogative is not unlimited but subject to the limitations found in law, a collective bargaining agreement or the general principles of fair play and justice. The CBA is the norm of conduct between petitioner and private respondent and compliance therewith is mandated by the express policy of the law.
Chapter I – General Provisions
4. Name of Decree – Labor Code Article 1 5. Date of Effectivity – Labor Code Article 2 6. Declarations of Policy – Labor Code Article 3
7. Construction of Labor Code – Labor Code Article 4 Interpretation of Labor Law, Rationale and Intent Abella vs. NLRC
G.R. No. 71818
ROSALINA PEREZ/HDA. DANAO-RAMONA vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, ROMEO QUITCO AND RICARDO DIONELE, SR.
July 20, 1987
Facts: On June 27, 1960 the petitioner, Rosalina Perez Abella leased a farm land known as Hacienda Danao-Ramona, for a period of ten (10) years. She opted to extend the leased contract for another ten (10) years. During the existence of the lease, she employed the private respondents Ricardo Dionele, Sr., and Romeo Quitco. Upon the expiration of her leasehold rights, petitioner dismissed private respondents and turned over the hacienda to the owners thereof on October 5, 1981, who continued the management, cultivation and operation of the farm.
On November 20, 1981, private respondents filed a complaint against the petitioner at the Ministry of Labor and Employment, Bacolod City District Office, for overtime pay, illegal dismissal and reinstatement with backwages. After the parties had presented their respective evidence, the Labor Arbiter ruled that the dismissal is warranted by the cessation of business, but granted the private respondents separation pay. Petitioner appealed. The National Labor Relations Commission affirmed the decision
and dismissed the appeal for lack of merit. Petitioner filed a Motion for Reconsideration, but the same was denied. Hence, the present petition. Issue: Whether or not private respondents are entitled to separation pay. Held: Yes. Article 284 of the Labor Code, as amended by B.P. Blg. 130, is the law applicable in this case. The purpose of Article 284, as amended, is obvious – the protection of the workers whose employment is terminated because of the closure of establishment and reduction of personnel. Without said law, employees like private respondents in the case at bar will lose the benefits to which they are entitled – for the thirty three years of service in the case of Dionele, and fourteen years in the case of Quitco. Although they were absorbed by the new management of the hacienda, in the absence of any showing that the latter has assumed the responsibilities of the former employer, they will be considered as new employees and the years of service behind them would amount to nothing.
It is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. It is the kind of interpretation which gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of this Code including its implementing rules and regulations shall be resolved in favor of labor." The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor.
The instant petition is hereby dismissed and decision of the Labor Arbiter and the resolution of the Ministry of Labor and Employment are hereby affirmed.
Manaya vs. Alabang Country Club G.R. No. 168988
FERNANDO G. MANAYA vs.
ALABANG COUNTRY CLUB INCORPORATED June 19, 2007
Facts: Petitioner alleged that on 21 August 1989, he was initially hired by the respondent as a maintenance helper receiving a salary of P198 per day. He was later designated as company electrician. He continued to
work for the respondent until 22 August 1998 when the latter, through its Engineering and Maintenance Department Manager, Engr. Ronnie B. de la Cruz, informed him that his services were no longer required by the company. Petitioner alleged that he was forcibly and illegally dismissed without cause and without due process on August 22, 1998. Hence, he filed a Complaint before the Labor Arbiter. He claimed that he had not committed any infraction of company policies or rules and that he was not paid his service incentive leave pay, holiday pay and 13th month pay. He further asserted that with his more or less nine years of service with the respondent, he had become a regular employee. He, therefore, demanded his reinstatement without loss of seniority rights with full backwages and all monetary benefits due him.
In its Answer, respondent denied that petitioner was its employee. It countered by saying that petitioner was employed by First Staffing Network Corporation (FSNC), with which respondent had an existing Memorandum of Agreement dated 21 August 1989. Thus, by virtue of a legitimate job contracting, petitioner, as an employee of FSNC, came to work with respondent, first, as a maintenance helper, and subsequently as an electrician. Respondent prayed for the dismissal of the complaint insisting that petitioner had no cause of action against it.
The Labor Arbiter held the complainant Fernando G. Manaya is found to be a regular employee of respondent Alabang Country Club, Inc. His dismissal from the service having been effected without just and valid cause and without the due observance of due process is hereby declared illegal. Consequently, respondent Alabang Country Club, Inc. is hereby ordered to reinstate complainant to his former position without loss of seniority rights and other benefits appurtenant thereto with full backwages.
Furthermore, respondent Alabang Country Club, Inc. and First Staffing Network Corporation are hereby ordered to pay complainant, jointly and severally the service incentive leave, 13th month pay and attorney’s fees of the 10% of the total monetary award. Respondent filed an Appeal with the NLRC which dismissed the same. The NLRC held that the appeal from the Decision of November 20, 2000 is dismissed for failure to perfect appeal within the statutory period of appeal. The Decision is now final and executory.
The NLRC found that respondent’s counsel of record Atty. Angelina A. Mailon of Monsod, Valencia and Associates received a copy of the Labor Arbiter’s Decision on or before 11 December 2000 as shown by the postal stamp or registry return card. Said counsel did not file a withdrawal of appearance. Instead, a Memorandum of Appeal dated 26 December 2000 was filed by the respondent’s new counsel, Atty. Arizala of Tierra and Associates Law Office. Reckoned from 11 December 2000, the date of receipt of the Decision by respondent’s previous counsel, the filing of the Memorandum of Appeal by its new counsel on 26 December 2000 was clearly made beyond the reglementary period. The NLRC held that the failure to perfect an appeal within the statutory period is not only mandatory but jurisdictional. The appeal having been belatedly filed, the Decision of the Labor Arbiter had become final and executory.
Respondent filed a Motion for Reconsideration, which the NLRC denied the same. Respondent filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals. In a Decision, the Court of Appeals granted the petition and ordered the NLRC to give due course to respondent’s appeal of the Labor Arbiter’s Decision. Petitioner filed a Motion for Reconsideration which was denied by the Court of Appeals in a Resolution dated 21 July 2005. Not to be dissuaded, petitioner filed the instant petition before this Court.
Issue: Whether or not the court of appeals committed an error when it ordered the NLRC to give due course to the appeal of respondent Alabang Country Club, incorporated even if the said appeal was filed beyond the reglementary period of ten (10) days for perfecting an appeal.
Held: Yes. Remarkably, in highly exceptional instances, we have allowed the relaxing of the rules on the application of the reglementary periods of appeal. We pronounced in those cases that technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. In all these, the Court allowed liberal interpretation given the extraordinary circumstances that justify a deviation from an otherwise stringent rule. Clearly, emphasized in these cases is that the policy of liberal interpretation is qualified by the requirement that there must be exceptional circumstances to allow the relaxation of the rules.
The rules, particularly the requirements for perfecting an appeal within the reglementary period specified in the law, must be strictly followed as they are considered indispensable interdictions against needless delays and for orderly discharge of judicial business. Furthermore, the perfection of an appeal in the manner and within the period permitted by law is not only mandatory but also jurisdictional and the failure to perfect the appeal renders the judgment of the court final and executory. Just as a losing party has the right to file an appeal within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of his/her case.
In this particular case, we adhere to the strict interpretation of the rule. In the case of Bunagan v. Sentinel we declared that:
That the perfection of an appeal within the statutory or reglementary period is not only mandatory, but jurisdictional, and failure to do so renders the questioned decision final and executory and deprives the appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal. The underlying purpose of this principle is to prevent needless delay, a circumstance which would allow the employer to wear out the efforts and meager resources of the worker to the point that the latter is constrained to settle for less than what is due him. This Court has declared that although the NLRC is not bound by the technical rules of procedure and is allowed to be liberal in the interpretation of the rules in deciding labor cases, such liberality should not be applied where it would render futile the very purpose for which the principle of liberality is adopted. The liberal interpretation stems from the mandate that the workingman’s welfare should be the primordial and paramount consideration. We see no reason in this case to waive the rules on the perfection of appeal.
This Court has repeatedly ruled that delay in the settlement of labor cases cannot be countenanced. Not only does it involve the survival of an employee and his loved ones who are dependent on him for food, shelter, clothing, medicine and education; it also wears down the meager resources of the workers to the point that, not infrequently, they either give up or compromise for less than what is due them. Without doubt, to allow the appeal of the respondent as what the Court of Appeals had done and remand the case to the NLRC would only result in delay to the detriment of the petitioner.
Nothing is more settled in our jurisprudence than the rule that when the conflicting interest of loan and capital are weighed on the scales of social justice, the heavier influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the under-privileged worker.
Clemente vs. GSIS G.R. No. L-47521
CAROLINA CLEMENTE vs.
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), DEPARTMENT OF HEALTH (DAGUPAN CITY) AND EMPLOYEE’S COMPENSATION COMMISSION
July 31, 1987
Facts: Petitioner’s husband, Pedro Clemente, was for ten (10) years a janitor in the Department of Health (Dagupan City), assigned at the Ilocos Norte Skin Clinic, Laoag City. On November 14, 1976, Pedro Clemente died of uremia due to nephritis. GSIS denied the claim of benefits because they found the cause of death not an occupational disease. Petitioner requested for reconsideration of the GSIS’ decision, contending that the ailments of her husband were contracted in the course of his employment and were aggravated by the nature of his work, as he was exposed to persons suffering with different skin diseases. The Employee’s Compensation Commission affirmed the GSIS’ decision stating that Pedro’s ailments were not listed as an occupational disease. The GSIS concurs with the views of the respondent Commission. However, it argues that it should be dropped as a party respondent in this case.
Issue: Whether or not the petitioner can claim death benefits from GSIS. Held: Yes. Carolina Clemente may claim benefits from the GSIS. The GSIS maintains that Pedro had the diseases even before his employment with the Department of Health. The fallacy in this theory lies in the failure to explain how a sick person was able to enter the government service more than ten years before he became too ill to work and at a time when aggravation of a disease was compensable. There is no evidence that Mr. Clemente was hired inspite of having and existing disease liable to become worse. When there are two or more possible explanations regarding an issue of compensability that which forms the claimant must be chosen.
Colgate Palmolive Philippines, Inc. vs. Ople G.R. No. 73681
HON. BLAS OPLE, AND COLGATE PALMOLIVE SALES UNION June 30, 1988
Facts: The respondent union filed a notice of strike with the Bureau of Labor Relations on ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of union officers/members, and coercing employees to retract their membership with the union and restraining non-union members from joining the union. The petitioner pointed out that Mejia, Sayson and Reynante’s suspension and eventual dismissal from the company were due to violation of company rules and are therefore carried out pursuant to the inherent right and prerogative of the management. In addition, petitioner contends that the union is not the certified agent of the company salesmen. In fact, according to petitioner, majority of salesmen not in favor of the notice of strike.
he Minister, Blas Ople, rendered a decision which found no merit in the union’s complaint. He also found that the three salesmen are not without fault, therefore, the company has grounds to dismiss the salesmen. But despite that, he ordered the reinstatement of the three on the ground that the employees were first offenders. In addition, the Minister directly certified the union as the collective bargaining agent for the sales force in petitioner company. Petitioner filed a motion for reconsideration.
Issues: Whether or not the Minister committed grave abuse of discretion when he directly certified the union, and whether or not the same happened when he ordered the reinstatement of the salesmen.
Held: Yes. The Minister committed grave abuse of discretion in both cases contended in the petitioner’s motion for reconsideration. The procedure of a representation case is outlined in the Labor Code. When the Minister directly certified the Union, he in fact disregarded this procedure and its legal requirements. There was therefore failure to determine with legal certainty whether the union indeed enjoyed majority representation.
Regarding the employees, reinstatement is simply incompatible with a finding of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the employees, the law warrants their dismissal without making any distinction between a first offender and a habitual delinquent. The Minister is duly mandated to equally protect and respect not only the labor or worker’s side but also the management and/or employer’s side. As stated in the case of San Miguel Brewery vs. National Labor Union, an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of misfeasance or malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to his interest.
G.R. No. 125340 EMELITA NICARIO vs.
NATIONAL LABOR RELATIONS COMMISSION, MANCAO
SUPERMARKET, INC. AND/OR MANAGER, ANTONIO MANCAO September 17, 1998
Facts: Petitioner, Emelita Nicario, was employed with respondent company Mancao Supermarket, on June 6, 1986 as a salesgirl and was later on promoted as sales supervisor. However, private respondent terminated her services on February 7, 1989. A complaint for illegal dismissal with prayer for backwages, wage differential, service incentive leave pay, overtime pay, 13th month pay and unpaid wages was filed by petitioner before the National Labor Relations Commission, Sub-Regional Arbitration Branch X in Butuan City.
On July 25, 1989, Labor Arbiter Amado M. Solamo dismissed the complaint for lack of merit. Petitioner appealed to the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro City. In a resolution dated July 25, 1989, the NLRC set aside the labor arbiters decision for lack of due process. It ruled that since petitioner assailed her supposed signatures appearing on the payrolls presented by the company as a forgery, the labor arbiter should not have merely depended on the xerox copies of the payrolls, as submitted in evidence by the private respondent but ordered a formal hearing on the issue. Thus, the Commission ordered the case remanded to the arbitration branch for appropriate proceedings. In a decision dated May 23, 1994, Labor Arbiter Macaraig-Guillen awarded petitioners claims for unpaid service incentive leave pay, 13th month pay, overtime pay and rest day pay for the entire period of her employment, but dismissed her claims for holiday premium pay and unpaid salaries from February 3 to 5, 1989. Not satisfied with the decision, private respondent appealed to the NLRC, and in a resolution dated August 16, 1995, the Commission affirmed in toto Labor Arbiter Macaraig-Guillens decision. Private respondent then filed a motion for reconsideration. In a resolution dated December 21, 1995, public respondent NLRC modified its earlier resolution by deleting the award for overtime pay and ruling that private respondent Antonio Mancao is not jointly and severally liable with Mancao Supermarket to pay petitioner the monetary award adjudged. Issue: Whether or not public respondent NLRC erred in ruling that petitioner is not entitled to overtime pay.
Held: The Court, in previously evaluating the evidentiary value of daily time records, especially those which show uniform entries with regard to the hours of work rendered by an employee, has ruled that such unvarying recording of a daily time record is improbable and contrary to
human experience. It is impossible for an employee to arrive at the workplace and leave at exactly the same time, day in day out. The uniformity and regularity of the entries are badges of untruthfulness and as such indices of dubiety. The observations made by the Solicitor General regarding the unreliability of the daily time records would therefore seem more convincing. On the other hand, respondent company failed to present substantial evidence, other than the disputed DTRs, to prove that petitioner indeed worked for only eight hours a day.
It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence or in the interpretation of agreements and writing should be resolved in the formers favor. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. This rule should be applied in the case at bar, especially since the evidence presented by the private respondent company is not convincing. Accordingly, we uphold the finding that petitioner rendered overtime work, entitling her to overtime pay.
Interpretation of Employment Contract
St. Theresa’s School of Novaliches Foundation, et al. vs. NLRC G.R. No. 122955
ST. THERESA'S SCHOOL OF NOVALICHES FOUNDATION and ADORACION ROXAS vs.
NATIONAL LABOR RELATIONS COMMISSION and ESTHER REYES April 15, 1998
Facts: Petitioner Adoracion Roxas is the president of St. Theresas School of Novaliches Foundation. She hired private respondent, Esther Reyes, on a contract basis, for the period from June 1, 1991 to March 31, 1992. However, private respondent commenced work on May 2, 1991. During the said period of employment, private respondent became ill. She went on a leave of absence from February 17 to 21 and from February 24 to 28, 1992, such leave of absence having been duly approved by petitioner Roxas. On March 2, 1992, private respondent reported for work, but she only stayed in her place of work from 6:48 to 9:38 a.m. Thereafter, she never returned. For what reason did private respondent stop working. Petitioners theorize that the private respondent abandoned her work. On the other hand, the latter maintains that she was replaced. When she went back to work on February 20, 1992, she found
out that her table, chair, and other belongings were moved to a corner of their office, and she was replaced by Annie Roxas, daughter of petitioner Adoracion Roxas. She tried to contact her employer but the latter could not be found within the school premises.
On March 25, 1992, petitioners sent private respondent a letter by registered mail, informing her that her contract, due to expire on March 31, 1992, would not be renewed. Prior thereto, or on March 3, 1992, to be precise, the private respondent instituted NLRC NCR Case No. 00-03-01481-92 against the herein petitioners for unfair labor practice based on harassment, illegal dismissal, 13th month pay, allowances, removal of desk and chair form place of work, and refusal to communicate, moral and exemplary damages.
The Labor Arbiter rendered a decision declaring the complainant’s dismissal from the service illegal. Petitioners appealed the aforesaid decision to the NLRC whereby it reversed and set aside the Labor Arbiter’s decision and rendered another decision declaring the separation of Esther Reyes from service legal and valid.
Issue: Whether or not the employment contract is valid.
Held: Yes. Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating consent. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employees’ duties. It goes without saying that contracts of employment govern the relationship of the parties. In this case, private respondents contract provided for a fixed term of nine (9) months, from June 1, 1991 to March 31, 1992. Such stipulation, not being contrary to law, morals, good customs, public order and public policy, is valid, binding and must be respected.
Technical Rules Not Binding – Labor Code Article 221 Bantolino, et al. vs. Coca Cola Bottlers Philippines
G.R. No. 153660
PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE LADICA, ARMAN QUELING, ROLANDO NIETO, RICARDO
MANALASTAS vs.
COCA-COLA BOTTLERS PHILS., INC. June 10, 2003
Facts: On 15 February 1995 sixty-two (62) employees of respondent Coca-Cola Bottlers, Inc., and its officers, Lipercon Services, Inc., Peoples Specialist Services, Inc., and Interim Services, Inc., filed a complaint against respondents for unfair labor practice through illegal dismissal, violation of their security of tenure and the perpetuation of the Cabo System. They thus prayed for reinstatement with full back wages, and the declaration of their regular employment status. For failure to prosecute as they failed to either attend the scheduled mandatory conferences or submit their respective affidavits, the claims of fifty-two (52) complainant-employees were dismissed. Thereafter, Labor Arbiter Jose De Vera conducted clarificatory hearings to elicit information from the ten (10) remaining complainants (petitioners herein) relative to their alleged employment with respondent firm.
On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision ordering respondent company to reinstate complainants to their former positions with all the rights, privileges and benefits due regular employees, and to pay their full back wages which, with the exception of Prudencio Bantolino whose back wages must be computed upon proof of his dismissal as of 31 May 1998, already amounted to an aggregate of P1,810,244.00.
On appeal, the NLRC sustained the finding of the Labor Arbiter that there was indeed an employer-employee relationship between the complainants and respondent company when it affirmed in toto the latter’s decision. Respondent Coca-Cola Bottlers appealed to the Court of Appeals which, although affirming the finding of the NLRC that an employer-employee relationship existed between the contending parties, nonetheless agreed with respondent that the affidavits of some of the complainants, namely, Prudencio Bantolino, Nestor Romero, Nilo Espina, Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and Nelson Manalastas, should not have been given probative value for their failure to affirm the contents thereof and to undergo cross-examination. As a consequence, the appellate court dismissed their complaints for lack of sufficient evidence. In the same Decision however, complainants Eddie Ladica, Arman Queling and Rolando Nieto were declared regular employees since they were the only ones subjected to cross-examination.
Issue: Whether or not the Court of Appeals erred in giving weight to respondent’s claim of failure to cross-examine the petitioners?
Held: Yes. Administrative bodies like the NLRC are not bound by the technical niceties of law and procedure and the rules obtaining in courts of law. Indeed, the Revised Rules of Court and prevailing jurisprudence may
be given only stringent application, i.e., by analogy or in a suppletory character and effect. The submission by respondent, citing People v. Sorrel, that an affidavit not testified to in a trial, is mere hearsay evidence and has no real evidentiary value, cannot find relevance in the present case considering that a criminal prosecution requires a quantum of evidence different from that of an administrative proceeding. Under the Rules of the Commission, the Labor Arbiter is given the discretion to determine the necessity of a formal trial or hearing. Hence, trial-type hearings are not even required as the cases may be decided based on verified position papers, with supporting documents and their affidavits. Pfizer Inc., et al. vs. Galan
G.R. No. 143389
PFIZER INC., MA. ANGELICA B. LLEANDER and SANDRA WEBB vs. EDWIN V. GALAN
May 25, 2001
Facts: Respondent Edwin V. Galan was an employee of petitioner Pfizer, Inc., a drug manufacturer. He was initially hired in August 1982 as a professional sales representative, commonly known as a medical representative. He was a recipient of several company awards, which eventually resulted in his promotion as District Manager for Mindanao in 1996. He continued to reap more awards as he exceeded sales targets. In September 1997, respondent was recalled to Manila to meet with his superiors. In the meeting, the sales manager of Pfizer, Inc., issued a memorandum requiring him to explain his alleged unauthorized use of, and questionable expense claims made on, the company vehicle, as well as the doubtful liquidation of his cash advance of US$5,000 for a recent official trip to Indonesia. After the submission of his explanation, a formal hearing on the charges was set. In the meantime, respondent was placed under preventive suspension and was advised to seek legal assistance. On October 1998, after the conclusion of the hearing, respondent received a notice of termination signed by Pfizers co-petitioner Ma. Angelica B. Lleander. The cause for his dismissal was loss of trust and confidence. Respondent then filed a complaint for illegal dismissal against petitioners before the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. 9 in Zamboanga City. He demanded his reinstatement or separation pay; the payment of back wages, thirteenth-month pay, and bonuses; the reimbursement of expenses and incentives; and the payment of moral and exemplary damages and attorneys fees. Sandra Webb and Ma. Angelica Lleander were impleaded as respondents in their capacities as Country Manager and Employee Resources Director, respectively, of Pfizer, Inc.
Labor Arbiter Rhett Julius Plagata declared that respondent was illegally dismissed and ordered Pfizer, Inc., to pay him back wages, separation pay, thirteenth month pay, incentives and bonuses, reimbursement of expenses and attorneys fees. Respondents monetary award totalled P2,052,013.50. Petitioners appealed from the decision to the NLRC in Cagayan de Oro City where it affirmed the decision of the Labor Arbiter. Petitioners also filed with the Court of Appeals but was their motion for reconsideration was denied. Hence, the petition.
Issue: Whether or not the Court of Appeals erred in dismissing the appeal for being filed beyond the reglementary period.
Held: In Systems Factors Corporation v. NLRC, the Court declared that the amendment introduced under A.M. No. 00-2-03-SC is procedural or remedial in character, as it does not create new or remove vested rights, but only operates in furtherance of the remedy or confirmation of rights already existing. It is settled that procedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage, there being no vested rights in the rules of procedure. Thus, the said amendment may be given a retroactive effect.
Thus, by virtue of the retroactive effect of the amendment of Section 4, Rule 65 of the 1997 Rules of Civil Procedure introduced by our Resolution in A.M. No. 00-2-03-SC, which allows the filing of a petition for certiorari within sixty days from notice of the denial of a motion for reconsideration, the filing of petitioners petition before the Court of Appeals was on time. Indeed, there is no dispute that their petition was filed on the sixtieth day from notice of the denial of their motion for reconsideration.
8. Rule Making Power – Labor Code Article 5 Limitations
Sonza vs. ABS-CBN Broadcasting Corporation G.R. No. 138051
JOSE Y. SONZA vs.
ABS-CBN BROADCASTING CORPORATION June 10, 2004
Facts: In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN) signed an Agreement (Agreement) with the Mel and Jay Management and Development Corporation (MJMDC). ABS-CBN was
represented by its corporate officers while MJMDC was represented by SONZA, as President and General Manager, and Carmela Tiangco (TIANGCO), as EVP and Treasurer. On 30 April 1996, SONZA filed a complaint against ABS-CBN before the Department of Labor and Employment, National Capital Region in Quezon City. SONZA complained that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP). ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties. SONZA filed an Opposition to the motion on 19 July 1996.
Meanwhile, ABS-CBN continued to remit SONZA’s monthly talent fees through his account at PCIBank, Quezon Avenue Branch, Quezon City. In July 1996, ABS-CBN opened a new account with the same bank where ABS-CBN deposited SONZAs talent fees and other payments due him under the Agreement. The Labor Arbiter rendered his decision dismissing the petition for lack of jurisdiction. SONZA appealed to the NLRC. On 24 February 1998, the NLRC rendered a Decision affirming the Labor Arbiters decision. SONZA filed a motion for reconsideration, which the NLRC denied in its Resolution dated 3 July 1998.
On 6 October 1998, SONZA filed a special civil action for certiorari before the Court of Appeals assailing the decision and resolution of the NLRC. On 26 March 1999, the Court of Appeals rendered a Decision dismissing the case. Hence, this petition.
Issues:
1. Whether or not an employer-employee relationship exists between the parties.
2. Whether or not Sonza can be considered as a regular employee. Held:
1. No. Case law has consistently held that the elements of an employer-employee 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 on the means and methods by which the work is accomplished. The last element, the so-called control test, is the most important element.
Selection and Engagement of Employee
Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered
into the Agreement with SONZA but would have hired him through its personnel department just like any other employee.
Payment of Wages
ABS-CBN agreed to pay SONZA such huge talent fees precisely because of SONZAs unique skills, talent and celebrity status not possessed by ordinary employees. Obviously, SONZA acting alone possessed enough bargaining power to demand and receive such huge talent fees for his services. The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractual relationship.
Power of Dismissal
During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent fees as long as AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement. Even if it suffered severe business losses, ABS-CBN could not retrench SONZA because ABS-CBN remained obligated to pay SONZAs talent fees during the life of the Agreement. This circumstance indicates an independent contractual relationship between SONZA and ABS-CBN.
Power of Control
The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time.Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity, as in the present case. 2. Applying the control test to the present case, the Court held that SONZA is
not an employee but an independent contractor. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor. In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. In this case, SONZA failed to show that these rules controlled his performance. The Court finds that these general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating television and radio programs that comply with standards of the industry.
National Service Corp. vs. NLRC G.R. No. L-69870
NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ vs.
THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND EUGENIA C. CREDO
November 29, 1988
G.R. No. 70295
EUGENIA C. CREDO vs.
NATIONAL LABOR RELATIONS COMMISSION, NATIONAL SERVICES CORPORATION AND ARTURO L. PEREZ
November 29, 1988
Facts: Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a domestic corporation which provides security guards as well as messengerial, janitorial and other similar manpower services to the Philippine National Bank (PNB) and its agencies. She was first employed with NASECO as a lady guard on 18 July 1975. Through the years, she was promoted to Clerk Typist, then Personnel Clerk until she became Chief of Property and Records, on 10 March 1980. Sometime before 7 November 1983, Credo was administratively charged by Sisinio S. Lloren, Manager of Finance and Special Project and Evaluation Department of NASECO, stemming from her non-compliance with Lloren's memorandum, dated 11 October 1983, regarding certain entry procedures in the company's Statement of Billings Adjustment. Said charges alleged that Credo "did not comply with Lloren's instructions to place some corrections/additional remarks in the Statement of Billings Adjustment; and when [Credo] was called by Lloren to his office to explain further the said instructions, [Credo] showed resentment and behaved in a scandalous manner by shouting and uttering remarks of disrespect in the presence of her co-employees."
On 7 November 1983, Credo was called to meet Arturo L. Perez, then Acting General Manager of NASECO, to explain her side before Perez and NASECO's Committee on Personnel Affairs in connection with the administrative charges filed against her. After said meeting, on the same
date, Credo was placed on "Forced Leave" status for 1 5 days. Before the expiration of said 15-day leave, Credo filed a complaint for placing her on forced leave, without due process. She also filed a supplemental complaint for illegal dismissal in alleging absence of just or authorized cause for her dismissal and lack of opportunity to be heard.
The labor arbiter rendered a decision, dismissing Credo's complaint, and directing NASECO to pay Credo separation pay equivalent to one half month's pay for every year of service. Both parties appealed which was denied by the NLRC. Hence, the present recourse.
Issue: Whether or not NLRC has jurisdiction to order Credo's reinstatement.
Held: Under the 1973 Constitution, it was provided that: The civil service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or controlled corporation. On the other hand, the 1987 Constitution provides that: The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter. Thus, the situations sought to be avoided by the 1973 Constitution and expressed by the Court in the National Housing appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil Service embraces government-owned or controlled corporations with original charter; and, therefore, by clear implication, the Civil Service does not include government-owned or controlled corporations which are organized as subsidiaries of government-owned or controlled corporations under the general corporation law.
On the premise that it is the 1987 Constitution that governs the instant case because it is the Constitution in place at the time of decision thereof, the NLRC has jurisdiction to accord relief to the parties. As an admitted subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a government-owned or controlled corporation without original charter. Juco vs. NLRC and National Housing Corp.
G.R. No. 98107
BENJAMIN C. JUCO vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL HOUSING CORPORATION
August 18, 1997
Facts: Juco was an employee of the NHA. He filed a complaint for illegal dismissal w/ MOLE but his case was dismissed by the labor arbiter on the
ground that the NHA is a govt-owned corp. and jurisdiction over its employees is vested in the CSC. On appeal, the NLRC reversed the decision and remanded the case to the labor arbiter for further proceedings. NHA in turn appealed to the SC.
Issue: Whether or not the employees of the National Housing Corporation, a government-owned and/or controlled corporation without original charter, covered by the Labor Code or by laws and regulations governing the civil service.
Held: Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service embraces every branch, agency, subdivision and instrumentality of the Government, including every government owned and controlled corporation. The inclusion of government-owned and/or controlled corporation within the embrace of the civil service shows a deliberate effort at the framers to plug an earlier loophole which allowed government-owned and/or controlled corporation to avoid the full consequences of the civil service system. All offices and firms of the government are covered. This constitutional provision has been implemented by statute PD 807 is unequivocal that personnel of government-owned and/or controlled corporation belong to the civil service and subject to civil service requirements. "Every" means each one of a group, without exception. This case refers to a government-owned and/or controlled corporation. It does not cover cases involving private firms taken over by the government in foreclosure or similar proceedings. For purposes of coverage in the Civil Service, employees of government-owned and/or controlled corporation whether created by special law or formed as subsidiaries are covered by the Civil Service Law, not the Labor Code, and the fact that private corporations owned or controlled by the government may be created by special charter does not mean that such corps. not created by special law are not covered by the Civil Service. The infirmity of the respondent’s position lies in its permitting the circumvention or emasculation of Sec. 1, Art. XII-B [now Art IX, B, Sec. 2 (1)] of the Constitution. It would be possible for a regular ministry of government to create a host of subsidiary corporation under the Corp. Code funded by a willing legislature. A government-owned corp. could create several subsidiary corps. These subsidiary corporations would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Dec. and the regulations of the COA. Their incomes would not be subject to the competitive restraint in the open market nor to the terms and conditions of civil service employment.
Conceivably, all government-owned and/or controlled corporations could be created, no longer by special charters, but through incorporation under the general law. The Constitutional amendment including such corporation
in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed.
Austria vs. NLRC
G.R. No. 124382
PASTOR DIONISIO V. AUSTRIA vs.
HON. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division), CEBU CITY, CENTRAL PHILIPPINE UNION MISSION
CORPORATION OF THE SEVENTH-DAY ADVENTISTS, ELDER HECTOR V. GAYARES, PASTORS REUBEN MORALDE, OSCAR L. ALOLOR,
WILLIAM U. DONATO, JOEL WALES, ELY SACAY, GIDEON BUHAT, ISACHAR GARSULA, ELISEO DOBLE, PORFIRIO BALACY, DAVID RODRIGO, LORETO MAYPA, MR. RUFO GASAPO, MR. EUFRONIO IBESATE, MRS. TESSIE BALACY, MR. ZOSIMO KARA-AN, and MR. ELEUTERIO LOBITANA
August 16, 1999
Facts: Pastor Dionisio Austria has been serving as a pastor for Seventh Day Adventist, a religious corporation under Philippine Law, for 28 years. His services was later terminated and was asked by the religious corporations’ treasurer to take responsibility for the 15,078.10 worth of church tithe’s offerings which was collected by his wife, Thelma Austria. Austria claimed that he should not be made accountable for the loss since the authorization for his wife to collect the tithes came from Pastor Gideon Buhat and Mr. Eufronio Ibesate since the petitioner was indisposed during that time.
The fact-finding committee created to investigate the anomaly found that Austria misappropriated denominational funds, made a willful breach of trust, performed serious misconduct, did gross and habitual neglect of duties, and committed an offense against the person of employer’s duly authorized representative as grounds for termination of services. Austria, then, filed a complaint before the Labor Arbiter for illegal dismissal, claiming for backwages, damages and other emoluments. The Labor Arbiter favoured Austria. The Seventh Day Adventist, however, appealed to the National Labor Relations Commission which vacated the decision and entered the decision of dismissal of the case for want of merit.
Austria filed a motion for reconsideration where in the National Labor Relations Commission reinstated the Labor Arbiter’s Decision. The Seventh Day Adventist followed with their own motion of reconsideration, claiming that the Labor Arbiter had no jurisdiction and there is a constitutional provision which separated the church and state since the
case is an ecclesiastical affair. The National Labor Relations Commission reversed its decision again, pushing Austria to file this petition before the Supreme Court.
Issue: Whether or not Pastor Dionisio Austria’s termination of services is an ecclesiastical affair and such involves the separation of church and state.
Held: No. The grounds invoked for petitioner’s dismissal, namely: misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties and commission of an offense against the person of his employer’s duly authorized representative, are all based on Article 282 of the Labor Code which enumerates the just causes for termination of employment. By this alone, it is palpable that the reason for petitioner’s dismissal from the service is not religious in nature. Coupled with this is the act of the SDA in furnishing NLRC with a copy of petitioner’s letter of termination. As aptly stated by the OSG, this again is an eloquent admission by private respondents that NLRC has jurisdiction over the case. Aside from these, SDA admitted in a certification issued by its officer, Mr. Ibesate, that petitioner has been its employee for twenty-eight (28) years. SDA even registered petitioner with the Social Security System (SSS) as its employee. As a matter of fact, the worker’s records of petitioner have been submitted by private respondents as part of their exhibits. From all of these it is clear that when the SDA terminated the services of petitioner, it was merely exercising its management prerogative to fire an employee which it believes to be unfit for the job. As such, the State, through the Labor Arbiter and the NLRC, has the right to take cognizance of the case and to determine whether the SDA, as employer, rightfully exercised its management prerogative to dismiss an employee. This is in consonance with the mandate of the Constitution to afford full protection to labor.
Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to include religious corporations, such as the SDA, in its coverage. Article 278 of the Labor Code on post-employment states that “the provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Obviously, the cited article does not make any exception in favor of a religious corporation. This is made more evident by the fact that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of Employment and Retirement, categorically includes religious institutions in the coverage of the law.
Chapter II – Concept of Employer-Employee Relationship
10. Statutory Definitions – Labor Code Articles 97 (a,b,c), 167 (f,g), 212 (e,f)
Elements of Employer-Employee Relationship Ruga vs. NLRC
G.R. No. L-72654-61
ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN, NICANOR FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN vs.
NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES and/or ARSENIO DE GUZMAN
January 22, 1990
Facts: De Guzman Fishing Enterprises is a company which engaged in fishing transactions along the port and offices at Camaligan, Camarines Sur. Alipio R. Ruga, along with other petitioners were fishermen-crew and
members of the vessel 7/B Sandyman II, owned and operated by De Guzman Fishing Enterprises. Ruga and his colleagues were paid on percentage commission basis in cash by the company’s cashier in which an agreed rate wherein petitioners will receive an amount based on the success of the fishing trip.
One day, Ruga and his colleagues were surprised when their employer, Jorge De Guzman, instructed them to participate in an investigation after there were reports that Ruga and his colleagues sold part of their catch to someone else. De Guzman’s claims were denied by the petitioners. The petitioners argue that De Guzman’s act was due to their forming of a labor union and their membership in the Defenders of Industrial Agricultural Labor Organizations and General Workers Union.
No charges were filed against Ruga and his colleagues as the investigation resulted with no conclusive findings. Despite this, the petitioners were disallowed by their employer to resume work. This pushed the petitioners to file a complaint before the Ministry of Labor and Employment on the grounds of illegal dismissal and non-payment of their 13th month pay and emergency cost of living and service incentive pay. The Labor Arbiter dismissed the complaints, stating that there exists no employer-employee relationship. The National Labor Relations Commission affirmed the Labor Arbiters’ decision, causing the petitioners to file a petition before the Supreme Court.
Issue: Whether or not Ruga and his colleagues fall under the category of employer-employee relationship.
Ruling: Yes. In determining the existence of an employer-employee relationship, the elements that are generally considered are the following (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 with respect to the means and methods by which the work is to be accomplished. The employment relation arises from contract of hire, express or implied. In the absence of hiring, no actual employer-employee relation could exist. The right-of-control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end.
Perpetual Help Credit vs. Faburada, et al. G.R. No. 121948
PERPETUAL HELP CREDIT COOPERATIVE, INC vs.
BENEDICTO FABURADA, SISINITA VILLAR, IMELDA TAMAYO, HAROLD CATIPAY, and the NATIONAL LABOR RELATIONS COMMISSION, Fourth Division, Cebu City
Facts: On January 3, 1990, Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay, private respondents, filed a complaint against the Perpetual Help Credit Cooperative, Inc. (PHCCI), petitioner, with the Arbitration Branch, Department of Labor and Employment (DOLE), Dumaguete City, for illegal dismissal, premium pay on holidays and rest days, separation pay, wage differential, moral damages, and attorney's fees.
Forthwith, petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employer-employee relationship between them as private respondents are all members and co-owners of the cooperative. Furthermore, private respondents have not exhausted the remedies provided in the cooperative by-laws.
On September 3, 1990, petitioner filed a supplemental motion to dismiss alleging that Article 121 of R.A. No. 6939, otherwise known as the Cooperative Development Authority Law which took effect on March 26, 1990, requires conciliation or mediation within the cooperative before a resort to judicial proceeding. On the same date, the Labor Arbiter denied petitioner's motion to dismiss, holding that the case is impressed with employer-employee relationship and that the law on cooperatives is subservient to the Labor Code. On November 23, 1993, the Labor Arbiter rendered a decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring complainants illegally dismissed, thus respondent is directed to pay Complainants backwages computed from the time they were illegally dismissed up to the actual reinstatement but subject to the three year backwages rule, separation pay for one month for every year of service since reinstatement is evidently not feasible anymore, to pay complainants 13th month pay, wage differentials and Ten Percent (10%) attorney's fees from the aggregate monetary award. However, complainant Benedicto Faburada shall only be awarded what are due him in proportion to the nine and a half months that he had served the respondent, he being a part-time employee. All other claims are hereby dismissed for lack of merit.
The computation of the foregoing awards is hereto attached and forms an integral part of this decision."
On appeal, the NLRC affirmed the Labor Arbiter's decision. Hence, this petition by the PHCCI.
Issue: Whether or not there is employer-employee relationship between PHCCI and respondents.
Held: Yes, there is. In determining the existence of an employer-employee relationship, the following elements are considered: (1 ) the selection and engagement of the worker or the power to hire; (2) the power to dismiss;
(3) the payment of wages by whatever means; and (4) the power to control the worker's conduct, with the latter assuming primacy in the overall consideration. No particular form of proof is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence may show the relationship.2
The above elements are present here. Petitioner PHCCI, through Mr. Edilberto Lantaca, Jr., its Manager, hired private respondents to work for it. They worked regularly on regular working hours, were assigned specific duties, were paid regular wages and made to accomplish daily time records just like any other regular employee. They worked under the supervision of the cooperative manager. But unfortunately, they were dismissed.
Chavez vs. NLRC
G.R. No. 146530 PEDRO CHAVEZ vs.
NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING, INC. and ALVIN LEE, Plant Manager
January 17, 2005
Facts: The respondent company engaged the services of the petitioner, Pedro Chavez, as truck driver on October 25, 1984. Sometime in 1992, the petitioner expressed to respondent Alvin Lee, respondent company’s plant manager, his (the petitioner’s) desire to avail himself of the benefits that the regular employees were receiving such as overtime pay, nightshift differential pay, and 13th month pay, among others. Although he promised to extend these benefits to the petitioner, respondent Lee failed to actually do so.
On February 20, 1995, the petitioner filed a complaint for regularization with the Regional Arbitration Branch No. III of the NLRC in San Fernando, Pampanga. Before the case could be heard, respondent company terminated the services of the petitioner. Consequently, on May 25, 1995, the petitioner filed an amended complaint against the respondents for illegal dismissal, unfair labor practice and non-payment of overtime pay, nightshift differential pay, 13th month pay, among others. The case was docketed as NLRC Case No. RAB-III-02-6181-95.
The respondents, for their part, denied the existence of an employer-employee relationship between the respondent company and the petitioner. They averred that the petitioner was an independent contractor as evidenced by the contract of service which he and the respondent company entered into.
After the parties had filed their respective pleadings, the Labor Arbiter rendered the Decision dated February 3, 1997, finding the respondents guilty of illegal dismissal. The Labor Arbiter declared that the petitioner was a regular employee of the respondent company as he was performing
a service that was necessary and desirable to the latter’s business. Moreover, it was noted that the petitioner had discharged his duties as truck driver for the respondent company for a continuous and uninterrupted period of more than ten years.
Issue: Whether or not employer-employee relationship exists between petitioner and respondent.
Held: We rule in the affirmative. The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the employee’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. All the four elements are present in this case.
First. Undeniably, it was the respondents who engaged the services of the petitioner without the intervention of a third party.
Second. Wages are defined as "remuneration or earnings, 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 service rendered or to be rendered." That the petitioner was paid on a per trip basis is not significant. This is merely a method of computing compensation and not a basis for determining the existence or absence of employer-employee relationship. One may be paid on the basis of results or time expended on the work, and may or may not acquire an employment status, depending on whether the elements of an employer-employee relationship are present or not. In this case, it cannot be gainsaid that the petitioner received compensation from the respondent company for the services that he rendered to the latter. Moreover, under the Rules Implementing the Labor Code, every employer is required to pay his employees by means of payroll. The payroll should show, among other things, the employee’s rate of pay, deductions made, and the amount actually paid to the employee. Interestingly, the respondents did not present the payroll to support their claim that the petitioner was not their employee, raising speculations whether this omission proves that its presentation would be adverse to their case.
Third. The respondents’ power to dismiss the petitioner was inherent in the fact that they engaged the services of the petitioner as truck driver. They exercised this power by terminating the petitioner’s services albeit in the guise of "severance of contractual relation" due allegedly to the latter’s breach of his contractual obligation.
Fourth. As earlier opined, of the four elements of the employer-employee relationship, the "control test" is the most important. Compared to an employee, an independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work, or service on its own account and under its own responsibility according to its own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. Hence, while an independent contractor enjoys independence and freedom from the control and supervision of his principal, an employee is subject to the employer’s power to control the means and methods by which the employee’s work is to be performed and accomplished.
Although the respondents denied that they exercised control over the manner and methods by which the petitioner accomplished his work, a careful review of the records shows that the latter performed his work as truck driver under the respondents’ supervision and control. Their right of control was manifested by the following attendant circumstances:
1. The truck driven by the petitioner belonged to respondent company;
2. There was an express instruction from the respondents that the truck shall be used exclusively to deliver respondent company’s goods;
3. Respondents directed the petitioner, after completion of each delivery, to park the truck in either of two specific places only, to wit: at its office in Metro Manila at 2320 Osmeña Street, Makati City or at BEPZ, Mariveles, Bataan; and
4. Respondents determined how, where and when the petitioner would perform his task by issuing to him gate passes and routing slips.
a. The routing slips indicated on the column REMARKS, the chronological order and priority of delivery such as 1st drop, 2nd drop, 3rd drop, etc. This meant that the petitioner had to deliver the same according to the order of priority indicated therein.
b. The routing slips, likewise, showed whether the goods were to be delivered urgently or not by the word RUSH printed thereon.
c. The routing slips also indicated the exact time as to when the goods were to be delivered to the customers as, for example, the words "tomorrow morning" was written on slip no. 2776.
These circumstances, to the Court’s mind, prove that the respondents exercised control over the means and methods by which the petitioner accomplished his work as truck driver of the respondent company.
