73293565 Labor I Digests

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LABOR STANDARDS LAW

CASE DIGESTS

Employer – Employee

Relationship

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1. Flores v. Nuestro

FLORES V. NUESTRO

160 SCRA 568 YAP, J.

FACTS

1. The petitioner, Herminio Flores and his wife, worked for respondent, Fortunato Nuestro in his funeral parlor since June 1976 as helper-utility man and as bookkeeper and cahier respectively.

2. On October 7, 1980, respondent registered the petitioner spouses with the SSS, as his employee. Thereafter, the spouses received an increase in their respective salaries.

3. On October 30, 1982, Herminio and Nuestro had an altercation, during which the latter physically assaulted the former.

4. Herminio then filed a complaint for physical injuries against Nuestro.

5. As a result of the incident, the Flores family had to leave their quarters at the funeral parlor and seek protection from the Pilar, Bataan Police.

6. Thereafter, petitioners filed illegal dismissal charges against respondent. On the part of the respondent, he denied the existence of employer-employee relationship, and further alleged that petitioners were the ones to voluntarily abandon their work ISSUE

Was there an employee-employer relationship in this case?

HELD

YES. There was an employee-employer relationship. That the respondent registered the petitioners with the Social Security System is proof that they were indeed his employees. The coverage of the Social Security Law is predicated on the existence of an employer-employee relationship.

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2. Brortherhood Labor Unity Movement of the Philippines v. Zamora

BROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILIPPINES V. ZAMORA 147 SCRA 49

GUTIERREZ, J. FACTS

1. On July 11, 1969, Brotherhood Labor Unity Movement of the Philippines (BLUMP), filed a complaint against San Miguel Corporation.

2. It alleged that respondents ordered the individual complainants to disaffiliate from the complainant union, the management then dismissed the individual complainants when they insisted on their union membership.

3. Petitioners are workers who have been employed at the San Miguel Parola Glass Factory for nearly 7 years prior to their dismissal. They worked as cargadores or pahinantes at the SMC plant loading, unloading, piling or palleting empty bottles and wooded shells to and from company trucks and warehouses.

4. Respondents alleged that the complainants have never been their employees and were employees of an independent contractor, Camahort.

5. Petitioners first reported for work to Camahort who signs their gate passes and the respondent company provided them with tools, equipment and paraphernalia used in loading, unloading, piling and hauling operations.

6. Job orders came from Camahort. The orders are then transmitted to an assistant-officer-in-charge. In turn, the assistant informs the warehouseman and checkers regarding the same. The latter, thereafter, relays said orders to the capatazes or group leaders who then give orders to the workers as to where, when and what to load, unload, pile, pallet or clean.

7. Petitioners were pain every 10 days on piece rate. The group leader notes down the number or volume of work that each individual worker has accomplished. Camahort approves the final report.

8. Petitioners also worked exclusively for SMC plnt, never having been assigned to other companies or departments of SMC plant, even when the volume of work is minimum.

ISSUE

Are the petitioners employees of private respondent, San Miguel Corporation?

HELD

YES. In determining the existence of employee-employer relationship, the elements that are generally considered are the following:

1. the selection and engagement of the employee 2. the payment of wages

3. the power of dismissal

4. the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished.

It is the so-called control test that is the most important element.

Applying the above criteria, the evidence strongly indicates the existence of an employer, employee relationship between the petitioner workers and respondent San Miguel

Corporation. The respondent asserts that the petitioners are employees of the Guaranteed Labor Contractor, an independent labor contracting firm.

The facts and evidence on record negate respondent SMC's claim.

The existence of an independent contractor relationship is generally established by the following criteria: "whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of

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the contractor's workers; the control of the premises; the duty to supply the premises tools, appliances, materials and labor; and the mode, manner and terms of payment."

None of the above criteria exists in the case at bar.

Highly unusual and suspect is the absence of a written contract to specify the performance of a specified piece of work, the nature and extent of the work and the term and duration of the relationship. The records fail to show that a large commercial outfit, such as the San Miguel Corporation, entered into mere oral agreements of employment or labor contracting where the same would involve considerable expenses and dealings with a large number of workers over a long period of time. Despite respondent company's allegations not an iota of evidence was offered to prove the same or its particulars. Such failure makes respondent SMC's stand subject to serious doubts.

Uncontroverted is the fact that for an average of seven (7) years, each of the petitioners had worked continuously and exclusively for the respondent company's shipping and

warehousing department. Considering the length of time that the petitioners have worked with the respondent company, there is justification to conclude that they were engaged to perform activities necessary or desirable in the usual business or trade of the respondent, and the petitioners are, therefore regular employees.

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3. Zanotte Shoes v. NLRC

ZANOTTE SHOES V. NLRC

241 SCRA 261 VITUG, J. FACTS

1. Private respondents Joseph Lluz, et. al averred that they started to work for petitioners Zanotte Shoes/ Leonardo Lorenzo between 1975 to 1987. They alleged that they worked for a minimum of 12 hours daily, including Sundays and holidays when needed and that they were paid on piece-work basis.

2. Private respondents claimed that it angered petitioner Lorenzo when they requested to be made members of the SSS and that when they demanded an increase in their pay rates, they were prevented from entering the work premises. Private respondents filed a complaint for illegal discharge against petitioners.

3. Petitioners, in their Answer, claim that their business operations were only seasonal, normally twice a year- one in June and another in December, when heavy job orders would come in. They contend that private respondents were engaged on purely contractual basis and paid the rates conformably with their respective agreements. 4. The Labor Arbiter rendered judgment in favor of private respondents. He declared

that there was an employer-employee relationship between petitioners and private respondents and that the latter were regular employees of the former. The Labor Arbiter concluded that there is neither dismissal nor abandonment, but ordered petitioners to pay the private respondents their separation pay.

5. The NLRC, on appeal, affirmed the Labor Arbiter’s decision ISSUE

Whether or not there is an employer-employee relationship between petitioners and private respondents.

HELD

YES. There is an employer-employee relationship between petitioners and private respondents. The work of private respondents is clearly related to and in the pursuit of the principal activity of the petitioners. The indicia used for determining the existence of an employer-employee relationship, all extant in the case at bench, include: (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 with respect to the result of the work to be done and to the means and methods by which the work is to be accomplished. The last requirement, so herein posed as an issue, refers to the existence of the right to control and not necessarily to the actual exercise of the right.

The Court, however, finds the award of separation pay to be unwarranted.. The Labor Arbiter, sustained by the NLRC, concluded that there was neither dismissal nor abandonment. The fact of the matter is that petitioners have repeatedly indicated their willingness to accept the private respondents, but the latter have steadfastly refused the offer. For being without any clear legal basis, the award of separation pay must thus be set aside. There is nothing, however, that prevents petitioners from voluntarily giving private respondents some amounts on ex gratia basis.

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4. Continental Marble v. NLRC

CONTINENTAL MARBLE V. NLRC

161 SCRA 151 PADILLA, J. FACTS

1. Rodito Nasayao claimed that sometime in May 1974, he was appointed plant

manager of Continental Marble with an alleged compensation of P3,000.00 a month or 25% of the monthly net income of the company, whichever is greater.

2. When the company failed to pay his salary for the months of May, June and July 1974, Nasayao filed a complaint with NLRC.

3. Continental Marble denied that Rodito Nasayao was its employee. They claimed that the undertaking agreed by the parties was a joint venture, a sort of partnership, wherein Nasayao was to keep the machinery in good working condition and in return, he would get the contracts from end-users for the installation of marble products, in which the company would not interfere.

4. In addition, Nasayao was to receive an amount equivalent to 25% of the net profits that the petitioner corporation would realize, should there be any. Since there had been no profits during said period, private respondent was not entitled to any amount.

ISSUE

Whether or not the private respondent Nasayao was employed as plant manager of petitioner Continental Marble Corporation.

HELD

NO. There was nothing in the record which would support the claim of Rodito Nasayao that he was an employee of the petitioner corporation. He was not included in the company payroll nor in the list of company employees furnished by the Social Security System. Most of all the element of control is lacking.

It appears that the petitioner had no control over the conduct of Rodito Nasayao in the performance of his work. He decided for himself on what was to be done and worked at his own pleasure. He was not subject to indefinite hours or conditions of work and in turn was compensated according to the results of his on effort. He has a free hand in running the company and its business, so much so, that the petitioner did not know until very later that Nasayao collected old accounts receivables, not covered by their agreement, which he converted to his personal use.

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5. Sevilla v. Court of Appeals

SEVILLA V. COURT OF APPEALS

160 SCRA 171 SARMIENTO, J. FACTS

1. Mrs. Segundina Noguera leased her premises located at Ermita, Manila to Tourist World Service, Inc. (TWSI), represented by Eliseo Canilao, for the latter’s use as branch office. In the said contract Mrs. Lina Sevilla held herself solidarily liable with TWSI for the prompt payment of the monthly rental agreed on.

2. When the branch office was opened, the same was run by petitioner Mrs. Sevilla, who was designated as branch manager by TWSI. For any fare bought in on the efforts of Mrs. Sevilla,, 4% was to go her and 3% was to be withheld by TWSI 3. In November 1961, TWSI was allegedly informed that Mrs. Sevilla was connected

with a rival travel firm. Since the branch office was losing, TWSI considered closing it down. The firm’s board of directors issued two resolutions; the first abolishing the office of manager of the Ermita Branch Office and the second, authorizing the corporate secretary to receive the property of TWSI in said branch.

4. In January 1962, the lease contract to use the premises as branch office was terminated. In June 1962, the Corporate Secretary went over to the office to comply with the mandate of the resolutions. Finding the premises locked and unable to contact Mrs. Sevilla, he padlocked the premises to protect the interests of TWSI 5. As such, petitioners Spouses Sevilla filed a complaint against respondents TWSI,

Canilao and Noguera, praying for mandatory preliminary injunction. Petitioners claim that Mrs. Sevilla’s relationship with TWSI was one of joint business venture and not one of employment.

6. In its answer, TWSI contend that Mrs. Sevilla was its employee and as such was designated manager.

7. The trial court held for the private respondents. It ruled that TWSI, being the true lessee, has the privilege to terminate the lease and padlock the premises. It also held that Mrs. Sevilla was a mere employee of TWSI and that she was bound by the act of her employer.

8. The Court of Appeals affirmed said decision, Hence, the instant petition.

ISSUE

Whether or not there is an employer-employee relationship between TWSI and Mrs. Sevilla.

HELD

NO. There is no employer-employee relationship between TWSI and Mrs. Sevilla. There has been no uniform test to determine the existence of an employer-employee relation. In

general, The Court has relied in the so-called 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.

The records will show that the petitioner, Lina Sevilla, was not subject to control by the private respondent Tourist World Service, Inc., either as to the result to the means used in connection therewith. In the first place, under the contract of lease covering the Tourist Worlds Ermita office, she had bound herself in solidum as and for rental payments. A true employee cannot be made to part with his own money in pursuance of his employer’s business, or otherwise, assume any liability thereof. In that event, the parties must be bound by some other relation, but certainly not employment. In the second place, when the branch office was opened, the same was run by Mrs. Sevilla payable to TWSI. Thus it cannot be said that she was under the control of TWSI “as to the means used”. She obviously relied on her own capabilities.

It is further admitted that Mrs. Sevilla was not in the company’s payroll. For her efforts, she retained 4% in commissions from airline bookings, the remaining 3% going to TWSI. Unlike

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an employee then, who earns a fixed salary usually, Mrs. Sevilla earned compensation in fluctuating amounts depending on her booking successes.

The fact that Sevilla had been designated “branch manager” does not make her, ergo, TWSI’s employee. Employment is determined by the right of control test and certain economic parameters. Titles are weak indicators.

However, there is no joint venture or partnership between TWSI and Mrs. Sevilla, either. The Court is of the opinion that the relationship of said parties is one that of a principal and an agent. But unlike simple grants of a power of attorney, the agency that the Court hereby declares to be compatible with the intent of the parties cannot be revoked at will. The reason is that it is an agency coupled with an interest. Thus, TWSI is held liable for damages for its unwarranted revocation of the contract of agency.

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6. Feati University v. Bautista

FEATI UNIVERSITY V. BAUTISTA

18 SCRA 1191 ZALDIVAR, J. FACTS

1. On January 14, 1963, the President of the respondent Feati University Faculty Club-PAFLU wrote a letter to the President of petitioner Feati University informing her of the organization of the Faculty Club into a registered labor union.

2. The Faculty Club is composed of members who are professors and/or instructors of the University.

3. The President of the Faculty Club sent another letter containing twenty-six demands that have connection with the employment of the members of the Faculty Club by the University.

4. The University administration refused to bargain collectively and so PAFLU’s president filed a notice of strike with the Bureau of Labor. Thereafter, the members of the Faculty Club declared a strike resulting to disruption of classes.

5. Despite further efforts of the officials of the Department of Labor, no settlement can be reached between the parties. Subsequently, the President of the Philippines certified to the Court of Industrial Relations the dispute between the management of the University and the Faculty Club.

6. The University filed a motion to dismiss the case upon the ground that CIR has no jurisdiction over the case because the Industrial Peace Act is not applicable to the faculty members, they being independent contractors and not employees. The respondent judge denied the motion but ordered the strikers to return to work and the University to take them back.

ISSUE

Whether or not a charitable institution or one organized for profit is included in the definition of employer?

HELD

YES. The term “employer“ encompasses all employers except those specifically excluded in the Industrial Peace Act. The Act itself specifically enumerated those who are not included in term employer namely: (1) labor organization; (2) anyone acting in the capacity of officer or agent of such labor organization (3) the Government and any political subdivision or instrumentality. Among these statutory exemptions, educational institutions are not included; hence they can be included in the term “employer.”

The Industrial Court has jurisdiction over unfair labor practice charges against institutions that are organized, operated and maintained for profit. The Industrial Peace Act is

applicable to any organization or entity – whatever may be its purpose when it was created – that is operated for profit or gain.

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7. San Miguel Brewery Sales Force Union v .Ople

SAN MIGUEL BREWERY SALES FORCE UNION V. OPLE

170 SCRA 25

GRIÑO – AQUINO, J FACTS

1. On April 17, 1978, a collective bargaining agreement (effective on May 1, 1978 until January 31, 1981) was entered into by petitioner San Miguel Corporation Sales Force Union (PTGWO), and the private respondent, San Miguel Corporation, Section 1, of Article IV of which provided as follows:

“Art. IV, Section 1. Employees within the appropriate bargaining unit shall be entitled to a basic monthly compensation plus commission based on their respective sales.”

2. In September 1979, the company introduced a marketing scheme known as the “Complementary Distribution System” (CDS) whereby its beer products were offered for sale directly to wholesalers through San Miguel’s sales offices.

3. The labor union (herein petitioner) filed a complaint for unfair labor practice in the Ministry of Labor, with a notice of strike on the ground that the CDS was contrary to the existing marketing scheme whereby the Route Salesmen were assigned specific territories within which to sell their stocks of beer, and wholesalers bad to buy beer products from them, not from the company.

4. It was alleged that the new marketing scheme violates Section 1, Article IV of the collective bargaining agreement because the introduction of the CDS would reduce the take-home pay of the salesmen and their truck helpers for the company would be unfairly competing with them.

ISSUES

Whether or not the Complementary Distribution System violates the collective bargaining agreement.

Whether it is an indirect way of busting the union. HELD

1. NO. The CDS was a valid exercise of management prerogative. Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment. Including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and the discipline, dismissal and recall of work.

So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them.

2. NO. San Miguel Corporation’s offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS, by paying them a so-called” back adjustment commission” to make up for the commissions they might lose as a result of the CDS, proves the company’s good faith and lack of intention to bust their union.

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8. San Miguel Brewery Inc. v. Democratic Labor Organization

SAN MIGUEL BREWERY V. DEMOCRATIC LABOR ORGANIZATION

8 SCRA 613

BAUTISTA, ANGELO, J. FACTS

1. The Democratic Labor Association filed a complaint against the San Miguel Brewery, Inc., embodying 12 demands for the betterment of the conditions of employment of its members.

2. The company filed its answer to the complaint specifically denying its material averments and answering the demands point by point. The company asked for the dismissal of the complaint.

3. During the hearing, the union manifested its desire to confine its claim to its demands for overtime, night-shift differential pay, and attorney's fees, although it was allowed to present evidence on service rendered during Sundays and holidays, or on its claim for additional separation pay and sick and vacation leave compensation. 4. After the case had been submitted for decision, Presiding Judge Jose S. Bautista,

who was commissioned to receive the evidence, rendered decision expressing his disposition with regard to the points embodied in the complaint on which evidence was presented.

5. The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis, payment of accumulated vacation and sick leave and attorney's fees, as well as the award of additional separation pay, were either dismissed, denied, or set aside.

6. Its motion for reconsideration having been denied by the industrial court en bane, which affirmed the decision of the court a quo with few exceptions, the San Miguel Brewery, Inc. interposed the present petition for review.

ISSUE

Whether or not outside or field sales personnel are entitled to the benefits of the Eight-Hour Labor Law.

HELD

NO. After the morning roll call, the employees leave the plant of the company to go on their respective sales routes and they do not have a daily time record but the sales routes are so planned that they can be completed within 8 hours at most, and they receive monthly salaries and sales commission in variable amounts, so that they are made to work beyond the required eight hours similar to piecework, "pakiao", or commission basis regardless of the time employed, and the employees' participation depends on their industry, it is held that the Eight-Hour Labor Law has no application to said outside or field sales personnel and that they are not entitled to overtime pay.

The Court is in the opinion that the Eight-Hour Labor Law only has application where an employee or laborer is paid in a monthly or daily basis, or is paid a monthly or daily

compensation, in which case, if he is made to work beyond the requisite period of 8 hours, he should be paid the additional compensation prescribed by law. This law has no

application when the employee or laborer is paid on a piece-work, "pakiao", or commission basis, regardless of the time employed. The philosophy behind this exemption is that his earnings are in the form of commission based on the gross receipts of the day. His

participation depends upon his industry so that the more hours he employs in the work the greater are his gross returns and the higher his commission. This philosophy is better explained in Jewel Tea Co. vs. Willams, C.C.A. Okl., 118 F. 2d 202, as follows: "The reasons for excluding an outside salesman are fairly apparent. Such salesman, to a great extent, works individually. There are no restrictions respecting the time he shall work and he can earn as much or as little, within the range of his ability, as his ambition dictates. In lieu of overtime he ordinarily receives commissions as extra compensation. He works away from his employer's place of business, is not subject to the personal supervision of his employer, and his employer has no way of knowing the number of hours he works per day."

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9. Jardin v. NLRC

JARDIN V. NLRC

326 SCRA 299 QUISUMBING, J. FACTS

1. Petitioners were drivers of respondent Philjama International Inc., a domestic corporation engaged in the operation of "Goodman Taxi." Petitioners used to drive private respondent's taxicabs every other day on a 24-hour work schedule under the boundary system.

2. The petitioners earned an average of P400.00 daily from which respondent regularly deducts the amount of P30.00 supposedly for the washing of the taxi units.

3. Believing that the deduction is illegal, petitioners decided to form a labor union to protect their rights and interests.

4. Upon learning about the plan of petitioners, private respondent refused to let petitioners drive their taxicabs when they reported for work on August 6, 1991, and on succeeding days.

5. Petitioners suspected that they were singled out because they were the leaders and active members of the proposed union. Aggrieved, petitioners filed with the labor arbiter a complaint against private respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees.

6. The labor arbiter dismissed said complaint for lack of merit.

7. On appeal, the NLRC reversed and set aside the judgment of the labor arbiter. The labor tribunal declared that petitioners are employees of private respondent, and, as such, their dismissal must be for just cause and after due process.

8. Private respondent's second motion for reconsideration was granted and said court ruled that it lacks jurisdiction over the case as petitioners and private respondent have no employer-employee relationship. Expectedly, petitioners sought

reconsideration of the labor tribunal's latest decision which was denied. Hence, the instant petition.

ISSUE

Whether or not employer-employee relationship exists between the petitioners and respondent Philjama International, Inc.

HELD

YES. In the determination the existence of employer-employee relationship, the Supreme Court has applied the following four-fold test: '(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control the employees conduct.' Under the control test, an employer-employee relationship exists if the 'employer' has reserved the right to control the 'employee' not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. Otherwise, no such relationship exists.

In a number of cases decided by this Court, we ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. We explained that in the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The management of the business is in the owner's hands. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they pay to the owner/operator is

not sufficient to withdraw the relationship between them from that of employer and employee. We have applied by analogy the above-stated doctrine to the relationships

between bus owner/operator and bus conductor, auto-calesa owner/operator and driver, and recently between taxi owners/operators and taxi drivers. Hence, petitioners are undoubtedly

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employees of private respondent because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of their employer.

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10. Stolt-Nielsen Marine Services v. NLRC

STOLT-NIELSEN MARINE SERVICES V. NLRC

258 SCRA 643 ROMERO, J. FACTS

1. Respondent Meynardo J. Hernandez was hired by Stolt-Nielsen Marine Services (Phils.) Inc. as radio officer on board M/T Stolt Condor for a period of ten months. He boarded the vessel on January 20, 1990.

2. On April 26, 1990, the ship captain ordered private respondent to carry the baggage of crew member Lito Loveria who was being repatriated. He refused to obey the order out of fear in view of the utterance of said crew member "makakasaksak ako" and also because he did not perceive such task as one of his duties as radio officer. 3. As a result of such refusal, private respondent was ordered to disembark on April 30,

1990 and was himself repatriated on May 15, 1990. He was paid his salaries and wages only up to May 16, 1990.

4. Private respondent filed before public respondent POEA a complaint for illegal

dismissal and breach of contract paying for, among other things, payment of salaries, wages, overtime and other benefits due him for the unexpired portion of the contract which was six (6) months and three (3) days.

5. Petitioner in its answer alleged that private respondent refused to follow the "request" of the master of the vessel to explain to Lolito Loveria, the reason for the latter's repatriation and to assist him in carrying his baggage, all in violation of Article XXIV, Section I of the Collective Bargaining Agreement (CBA) and the POEA Standard Contract. Hence, private respondent, after being afforded the opportunity to explain his side, was dismissed for gross insubordination and serious misconduct.

6. Respondent denied that the master of the vessel requested him to explain to Loveria the reason for the latter's repatriation.

7. Thereafter, POEA Administrator rendered an award in favor of private respondent. 8. Aggrieved, petitioner Stolt-Nielsen appealed to the National Labor Relations

Commission (NLRC). The NLRC concurred with the POEA Administrator in ruling that private respondent, having been illegally dismissed, was, therefore, entitled to the monetary award.

9. It further stated that private respondent's duty as a radio officer or radio operator does not include the carrying of the luggage of any seaman or explaining to said seaman the reason for his repatriation. Thus, concluded the NLRC, his termination on this ground was not proper and, therefore, he had every right to the monetary award. The NLRC likewise granted private respondent's claim for fixed overtime pay and attorney's fees.

ISSUES

1. Whether or not private respondent was legally dismissed on the ground of gross insubordination and serious misconduct.

2. Whether or not private respondent was entitled to the award of over-time pay.

HELD

1. YES. Willful disobedience of the employer's lawful orders, as a just cause for the dismissal of an employee, envisages the concurrence of at least two (2) requisites. The employee's assailed conduct must have been willful or intentional, the

willfulness being characterized by a "wrongful and perverse attitude", and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. The Court agrees that by virtue of the aforementioned CBA and POEA Standard Contract provisions cited by petitioner, private respondent is indeed bound to obey the lawful commands of the captain of the ship, but only as long as these pertain to his duties. The order to carry the luggage of a crew member, while being lawful, is not part of the duties of a radio officer. Assuming arguendo that lawful commands of a ship captain are

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"act of disobedience" does not warrant the supreme penalty of dismissal. In instant case, the POEA found that private respondent's actuation which led to his dismissal was the first and only act of disobedience during his service with the petitioner, Furthermore, examination of the circumstances surrounding private respondent's disobedience shows that the repatriated seaman's utterance of "makakasaksak ako" so instilled fear in private respondent that he was deterred from carrying out the order of the captain. Hence, his act could not be rightfully characterized as one motivated by a "wrongful and perverse attitude." Besides, said incident posed no serious or substantial danger to the well-being of his other co-employees or of the general public doing business with petitioner employer, neither did such behavior threaten substantial prejudice to the business of his employer.

2. NO. The Court reiterated that the rendition of overtime work and the submission of sufficient proof that said work was actually performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established. Realistically speaking, a seaman, by the very nature of his job, stays on board a ship or vessel beyond the regular eight-hour work schedule. For the employer to give him overtime pay for the extra hours when he might be sleeping or attending to his personal chores or even just lulling away his time would be extremely unfair and unreasonable.

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11. Interphil Laboratories Employees Union – FFW v. Interphil Laboratories

INTERPHIL LABORATORIES EMPLOYEES UNION – FFW V. INTERPHIL

LABORATORIES 372 SCRA 658 KAPUNAN, J. FACTS

1. Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent of the rank-and file employees of Interphil Laboratories, Inc., a company engaged in the business of manufacturing and packaging pharmaceutical products. 2. They had a Collective Bargaining Agreement (CBA) effective from August 1, 1990 to

July 31, 1993.

3. Prior to the expiration of the CBA, Allesandro Salazar, the vice-president of the HR Department and Nestor Ocampo, the union president and Hernando Clemente, a union director had a meeting. The representatives of the union were asking to make the new CBA effective for 2 yeas.

4. Salazar informed them that it was still premature to discuss the new CBA.

5. The following day, all the rank-and-file employees refused to follow their regular two-shift work schedule 6:00am to 6:00pm and from 6:00pm to 6:00am.

6. At 2:00 pm and 2:00 am respectively, the employees stopped working without sealing the containers and securing the raw materials they were working on.

7. Enrico Gonzales, a union director, told Salazar that the employees would only return to their normal work schedule if the company would agree to their demands as to the effectivity and duration of the new CBA.

8. In addition, the employees started to engage in a work slowdown campaign during the time they were working thus substantially delaying the production of the

company.

9. Respondent company filed with the NLRC to declare illegal the petitioner union’s overtime boycott and work slowdown which amounted to illegal strike.

10. The respondent company filed with the NCMB an urgent request for mediation. However the parties failed to arrive at an agreement.

11. Petitioner union then filed with NCMB a notice of strike citing unfair labor practice allegedly committed by respondent company.

12. In the interim, the case before NLRC continued. The labor arbiter then found that the overtime boycott and the work slowdown as illegal strike.

13. Petitioner union contended that according to the provisions of their CBA on working hours clearly state that the normal working hours were from 7:30 am to 4:30pm. The labor arbiter should not have admitted other evidence than that stated in the CBA. ISSUE

Whether or not the working hours of the petitioner is only from 7:30 am to 4:30 pm.

HELD

NO. The parties in the CBA stipulated that: “the schedule of shift work shall be maintained; however the company may change the prevailing work time at its discretion, should change be necessary in the operations of the Company. All employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours.”

It is evident from the foregoing provisions that the working hours may be changed, at the discretion of the company, should such change be necessary for its operations and that the employees shall observe such rules as have been laid down by the company. The company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its

business and the demands of its clients. It was established that the employees adhered to the said work schedule since 1988. The employees are deemed to have waived the eight-hour schedule since they followed, without any question or complain, the two shift schedule while their CBA was still in force and even prior thereto. As the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours.

(21)

12. Pan American World Airways System v.

Pan American Employees Association

PAN AMERICAN WORLD AIRWAYS SYSTEM V. PAN AMERICAN EMPLOYEES ASSOCIATION

1 SCRA 527 REYES, JBL FACTS

1. Petitioner herein claims that the one hour meal period should not be considered as overtime work, because the evidence showed that complainants could rest

completely, and were not in any manner under the control of the company during that period.

2. The court below found, on the contrary, that during the so-called meal period, the mechanics were required to stand by for emergency work; that if they happened not to be available when called, they were reprimanded by the lead man; that as in fact it happened on many occasions, the mechanics had been called from their meals or told to hurry up eating to perform work during this period.

ISSUE

Whether or not the 1 hour meal period of the mechanics is considered working time.

HELD

Yes. The Industrial Court’s order for permanent adoption of a straight 8-hour shift including the meal period was but a consequence of its finding that the meal hour was not one of complete rest but was actually a work hour, since for its duration, the laborers had to be on ready call.

(22)

13. Campangan v. NLRC

CAGAMPAN VS. NLRC

195 SCRA 533 FACTS

1. On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts of employment with the Golden Light Ocean Transport, Ltd., through its local agency, private respondent ACE MARITIME AGENCIES, INC.

2. Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986. Thereafter, petitioners collectively and/or individually filed complaints for

non-payment of overtime pay, vacation pay and terminal pay against private respondent. 3. In addition, they claimed that they were made to sign their contracts in blank.

Likewise, petitioners averred that although they agreed to render services on board the vessel Rio Colorado managed by Golden Light Ocean Transport, Ltd., the vessel they actually boarded was MV "SOIC I" managed by Columbus Navigation.

4. Two (2) petitioners, Jorge de Castro and Juanito de Jesus, charged that although they were employed as ordinary seamen (OS), they actually performed the work and duties of Able Seamen (AB).

5. Private respondent was furnished with copies of petitioners' complaints and summons, but it failed to file its answer within the reglementary period.

6. Thus, on January 12, 1987, an Order was issued declaring that private respondent has waived its right to present evidence in its behalf and that the cases are submitted for decision.

7. On August 5, 1987, the Philippine Overseas Employment Administration (POEA) rendered a Decision dismissing petitioners' claim for terminal pay but granted their prayer for leave pay and overtime pay. On appeal, the NLRC reversed the decision; Hence, the petition. Petitioner contends, inter alia, that they are entitled to leave pay and overtime pay.

ISSUE

Whether or not petitioners are entitled to leave pay and overtime pay

HELD

The court sustains the finding of respondent NLRC that petitioners were actually paid more than the amounts fixed in their employment contracts. Even as the denial of petitioners' terminal pay by the NLRC has been justified, such denial should not have been applied to petitioners Julio Cagampan and Silvino Vicera. For, a deeper scrutiny of the records by the Solicitor General has revealed that the fact of overpayment does not cover the aforenamed petitioners since the amounts awarded them were equal only to the amounts stipulated in the crew contracts. Since petitioners Cagampan and Vicera were not overpaid by the company, they should be paid the amounts of US$583.33 and US$933.33, respectively. As regards the question of overtime pay, the NLRC cannot be faulted for disallowing the

payment of said pay because it merely straightened out the distorted interpretation asserted by petitioners and defined the correct interpretation of the provision on overtime pay

embodied in the contract conformably with settled doctrines on the matter. Notably, the NLRC ruling on the disallowance of overtime pay is ably supported by the fact that

petitioners never produced any proof of actual performance of overtime work. In short, the contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established. Realistically speaking, a seaman, by the very nature of his job, stays on board a ship or vessel beyond the regular eight-hour work schedule. For the employer to give him overtime pay for the extra hours when he might be sleeping or

attending to his personal chores or even just lulling away his time would be extremely unfair and unreasonable.

(23)

14. Mercury Drug Co., Inc. v. Dayao

MERCURY DRUG CO. INC. VS. DAYAO

117 SCRA 99 FACTS

1. This is a verified petition dated March 17, 1964 which was subsequently amended on July 31, 1964 filed by Nardo Dayao and 70 others against Mercury Drug Co., Inc., and/or Mariano Que, President & General Manager, and Mercury Drug Co., Inc. 2. Employees Association praying, with respect to respondent corporation and its

president and general manager: 1) payment of their unpaid back wages for work done on Sundays and legal holidays plus 25c/c additional compensation from date of their employment up to June 30, 1962; 2) payment of extra compensation on work done at night; 3) reinstatement of Januario Referente and Oscar Echalar to their former positions with back salaries; and, as against the respondent union, for its disestablishment and the refund of the money it had collected from petitioners. 3. The CIR sustained the claim of the petitioners for payment of back wages

correspoding to the first four hours work rendered on every other Sunday and first four hours on legal holidays should be denied for lack of merit. The motion for reconsideration was denied.

4. Thus, the instant petition contending that private respondents' claims for 25%

Sunday and Legal Holiday premiums are not supported by substantial evidence, thus infringing upon the cardinal rights of the petitioner, and that assuming it is, such premiums are already included in the salary of private respondents.

ISSUE

Whether or not private respondents are entitled to the 25% Sunday and Legal Holiday premiums.

HELD

The contention is without merit. While an employer may compel his employees to perform service on such days, the law nevertheless imposes upon him the obligation to pay his employees at least 25% additional of their basic or regular salaries. Under Section 4 of C. A. No. 444, no person, firm or corporation, business establishment or place of center of labor shall compel an employee or laborer to work during Sundays and legal holidays unless he is paid an additional sum of at least twenty-five per centum of his regular remuneration: Provided, However, That this prohibition shall not apply to public utilities performing some public service such as supplying gas, electricity, power, water, or providing means of transportation or communication. Although a service enterprise, respondent company's employees are within the coverage of C. A. No. 444, as amended known as the Eight Hour Labor Law, for they do not fall within the category or class of employees or laborers

excluded from its provisions. In not giving weight to the evidence of the petitioner company, the respondent court sustained the private respondents' evidence to the effect that their 25% additional compensation for work done on Sundays and Legal Holidays were not included in their respective monthly salaries. The private respondents presented evidence through the testimonies of Nardo, Dayao, Ernesto Talampas, and Josias Federico who are themselves among the employees who filed the case for unfair labor practice in the respondent court and are private respondents herein. The petitioner- company's contention that the

respondent court's conclusion on the issue of the 25% additional compensation for work done on Sundays and legal holidays during the first four hours that the private respondents had to work under their respective contracts of employment was not supported by

(24)

15. Luzon Stevedoring Co., Inc. v Luzon Marine Department Union

LUZON STEVEDORING Co. v. Luzon Marine department Union

101 SCRA 257 FELIX, J. FACTS

1. On June 21, 1948, Luzon Marine Department Union filed a petition with the Court of Industrial Relations containing several demands against Luzon Stevedoring Co., Inc. 2. While the case was still pending, the union declared a strike which was declared

illegal by the Court,

3. The union filed a “Constancia” with the Court of Industrial Relations praying that the unresolved demands of the union in their original petition be granted.

4. Among the union’s demands is that work performed beyond eight hours be paid overtime pay of 50% the regular pay rate and that work performed on Sundays and legal holidays be paid double the regular rate pay.

5. The trial Judge found that the employees worked from 6:00 AM to 6:00 PM daily and for work performed in excess of 8 hours, the employees were given overtime pay of P4.00 for officers, patrons and radio operators and P2.00 for the rest of the crew. 6. The counsel for the union filed a motion for reconsideration praying that the decision

be modified so as to declare and rule that the members of the Union who had rendered services from 6:00 AM to 6:00 PM were entitled to 4 hours overtime pay and that whatever little time allotted to the taking of their meal should not be deducted from the four hours of overtime rendered by said employees.

7. Luzon Stevedoring also sought for the reconsideration of the decision only insofar as it interpreted that the period during which the seaman is aboard a tugboat shall be considered as working time for the purpose of the 8-hour law.

ISSUE

Is the definition for “hours of work” as presently applied to dryland laborers equally applicable to seamen?

HELD

Section 1 of the Commonwealth Act 444 provides that the legal working day for any person employed by another shall not be more than 8 hours daily. When work is not continuous, the time during which the laborer is not working and can leave his working place and can rest completely, shall not be counted.

For the purposes of this case, the Court need not set aside for seamen a criterion different from that applied to laborers on land, for under the provisions of the law, the only thing to be done is to determine the meaning and scope of the word “working place” used therein. As the Court understand this term, a laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he ceases to work, may rest completely and leave or may leave at his will the spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be counted.

(25)

(26)

16. PAL Employees Savings and Loan Association

PAL EMPLOYEES SAVINGS AND LOAN ASSOCIATION, INC. VS. NLRC 260 SCRA 758

FACTS

1. Private respondent Angel Esquejo started working with petitioner PAL Employees Savings and Loan Association (PESALA) as a company guard and was receiving a monthly basic salary of P 1,900 plus an emergency allowance in the amount of P 510.

2. He was required to work 12 hours a day. That during his entire period of employment with petitioner, herein private respondent was required to perform overtime work without any additional compensation from the latter.

3. Sometime later, private respondent was administratively charged with serious misconduct or disobedience of the lawful orders of petitioner or its officers. As a result, private respondent filed a detailed and itemized computation of his money claims.

4. Thereafter, the labor Arbiter rendered a decision granting private respondent overtime pay.

5. Aggrieved by the decision, petitioner appealed to the NLRC only to be rejected later. 6. In the meantime, petitioner filed the instant special civil action for certiorari citing as

reason that quite recently, the employee payroll sheets which contained the salaries and overtime pay received by private respondent were located in the bodega of the petitioner and based on the payroll sheets, it appears that substantial overtime pay have been paid to private respondent.

ISSUE

Whether or not an employee is entitled to overtime pay for work rendered in excess of the regular eight hour day given the fact that he entered into a contract of labor specifying a work-day of twelve hours at a fixed monthly rate above the legislated minimum wage.

HELD

YES. The Supreme Court held that based on petitioner’s own computation, it appears that the basic salary plus emergency allowance given to private respondent did not actually include the overtime pay claimed by private respondent.

Moreover, there was no meeting of the minds between petitioner and private respondent as to what is covered by the salary stipulated. The said contract was definite only as to the number of hours to be rendered.

Furthermore, the subsequent act of private respondent in filing the money claims negates the theory that there was a clear agreement as to the inclusion of his overtime pay in the contracted salary rate.

(27)

17. Songco v. NLRC

SONGCO V. NLRC

183 SCRA 610 MEDIALDEA, J: FACTS

1. Petitioners were members of the sales force of respondent Zuellig. Zuellig filed with the DOLE an application seeking clearance to terminate the services of petitioners allegedly on the ground of retrenchment due to financial losses. Petitioners opposed said application alleging that the company is not suffering from losses and that they are being dismissed because of their membership in the union.

2. During the last day of hearing of the case, the petitioners manifested that they are no longer contesting their dismissal. The parties agreed that the sole issue to be resolved is the basis of the separation pay due to petitioners.

3. Petitioners, as members of the sales force of Zuellig, received monthly salaries of at least P400 plus commissions for every sale they made.

4. The Collective Bargaining Agreement entered into by Zuellig and Zuellig Employees Association of which the petitioners are members, contains: “Any employee, who is separated from employment due to XXX permanent lay-off not due to the fault of said employee shall receive from the company a retirement gratuity in an amount equivalent to 1 month’s salary per year of service. One month of salary as used in this paragraph shall be deemed equivalent to the salary date of retirement, years of service shall be deemed equivalent to total service credits, a fraction of at least 6 months being considered 1 year, including probationary employment”.

5. Article 284 of the Labor Code then prevailing likewise provides: “The termination of

employment of any employee due to XXX retrenchment to prevent losses XXX shall entitle the employee affected thereby to separation pay. XXX The separation pay shall be equivalent to 1 month pay or at least 1 month pay for every year of service, whichever is higher”.

6. Petitioners argue that their sales commissions and allowances should be included in the monthly salary for the purpose of computing their separation pay.

7. Zuellig contends that if it really were the intention of the Labor Code and its Implementing Rules to include commissions in the computation of separation pay, it could have explicitly said so in clear and equivocal terms. In addition, in the definition of the term “wage” (Article 97), commission is used only as one of the features or designations attached to the word “remuneration” or “earnings”

8. The labor arbiter rendered a decision ordering private respondent to pay the petitioners separation pay equivalent to their 1 month salary (exclusive of commissions allowances, etc) for every year of service. The labor arbiter ruled “wage” as defined in Article 97(f) of the Code is not synonymous with “salary” as provided in the CBA and Article 284.

9. Petitioner’s appeal to the NLRC was dismissed for lack of merit. Hence, the present petition for review.

ISSUE

Whether or nor earned sales commissions and allowances be included in the monthly salary of the petitioners for the purpose of computing their separation pay

(28)

means a recompense or consideration made to a person for his pains and industry in another man’s business. There is eminent authority for holding that the words “wages” (Middle English: wagen) and “salary” (Latin: salarium) are essentially synonymous. Both words are interchangeably used and refer to one and the same meaning: a reward or recompense for services performed. Likewise, “pay” is synonymous with “wage” and “salary”. Inasmuch as the three words have the same meaning and commission is included in the definition of “wage” the logical conclusion is, in the computation of the separation pay of the petitioners, their salary base should also include their earned sales commissions. Granting, for the sake of argument that the commissions were in the form of incentives or encouragement, so that the petitioners would be inspired to put little more industry on the jobs assigned to them, these commissions are still direct remunerations for services rendered which increased the income of Zuellig.

Commission is the recompense, compensation, or reward of an agent, salesman, executor, trustee, receiver, when the same is calculated as a percentage on the amount of his transactions or on the profit of the principal. The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commissions are part of petitioners’ wage or salary. The Court takes judicial notice that some salesmen do not receive basic salary but depend on commissions and allowances alone, although an employer-employee relationship exists. If the opposite view is taken that commissions do not form part of salary or wage, the Court will be saying that such salesmen will not be entitled to separation pay, which is absurd. The workingman’s welfare should be the primordial concern in interpreting the Labor Code and its implementing rules and regulations. All doubts should be resolved in favor of labor.

73293565 Labor I Digests

LABOR STANDARDS LAW

CASE DIGESTS

TABLE OF CONTENTS

Employer – Employee

Relationship

1. Flores v. Nuestro

2. Brortherhood Labor Unity Movement of the Philippines v. Zamora

3. Zanotte Shoes v. NLRC

4. Continental Marble v. NLRC

5. Sevilla v. Court of Appeals

6. Feati University v. Bautista

7. San Miguel Brewery Sales Force Union v .Ople

8. San Miguel Brewery Inc. v. Democratic Labor Organization

9. Jardin v. NLRC

10. Stolt-Nielsen Marine Services v. NLRC

11. Interphil Laboratories Employees Union – FFW v. Interphil Laboratories

12. Pan American World Airways System v.

Pan American Employees Association

13. Campangan v. NLRC

14. Mercury Drug Co., Inc. v. Dayao

15. Luzon Stevedoring Co., Inc. v Luzon Marine Department Union

16. PAL Employees Savings and Loan Association

17. Songco v. NLRC