Labstan Cases2

BITOY JAVIER (DANILO P.
JAVIER),
Petitioner,
vs.
FLY ACE CORPORATION/FLORDELYN CASTILLO,
Respondents.
MENDOZA,
J.:
February 15, 2012
FACTS
On May 23, 2008, Javier filed a complaint before the NLRC for underpayment of salaries and other labor standard
benefits. He
alleged that he was an employee of Fly Ace since September 2007, performing various tasks at the respondents
warehouse
such as cleaning and arranging the canned items before their delivery to certain locations, except in instances when he
would
be ordered to accompany the companys delivery vehicles, as
pahinante
; that he reported for work from Monday to Saturday
from 7:00 oclock in the morning to 5:00 oclock in the afternoon; that during his employment, he was not issued an
identific
ation
card and payslips by the company; that on May 6, 2008, he reported for work but he was no longer allowed to enter the
company premises by the security guard upon the instruction of Ruben Ong
(Mr. Ong)
, his superior
;
5
that after several minutes
of begging to the guard to allow him to enter, he saw Ong whom he approached and asked why he was being barred from
entering the premises; that Ong replied by saying, "
Tanungin mo anak mo;
"
6
that he then went home and discussed the matter
with his family; that he discovered that Ong had been courting his daughter Annalyn after the two met at a fiesta
celebration in
Malabon City; that Annalyn tried to talk to Ong and convince him to spare her father from trouble but he refused to
accede; that
thereafter, Javier was terminated from his employment without notice; and that he was neither given the opportunity to
refute the
cause/s of his dismissal from work.
Fly Ace averred that it was engaged in the business of importation and sales of groceries. Sometime in December 2007,
Javier
was contracted by its employee, Mr. Ong, as extra helper on a
pakyaw
basis at an agreed rate of P 300.00 per trip, which was
later increased to P 325.00 in January 2008. Mr. Ong contracted Javier roughly 5 to 6 times only in a month whenever the
vehicle of its contracted hauler, Milmar Hauling Services, was not available. On April 30, 2008, Fly Ace no longer needed
the
services of Javier. Denying that he was their employee, Fly Ace insisted that there was no illegal dismissal
.
8
Fly Ace submitted a
copy of its agreement with Milmar Hauling Services and copies of acknowledgment receipts evidencing payment to Javier
for his
contracted services bearing the words, "daily manpower
(pakyaw/piece rate pay)
" and the latters signatures/initials.
Labor Arbiter
LA dismissed the complaint. Javier failed to present proof that he was a regular employee of Fly Ace. [no ID,
documents, payslips. Fly Ace is not engaged in trucking business but in the importation and sales of groceries. Since
there is a
regular hauler to deliver its products, we give credence to

Respondents claim that complainant was contracted on "pakiao"
basis.
NLRC
It was of the view that a
pakyaw
-basis arrangement did not preclude the existence of employer-employee relationship.
"Payment by result x x x is a method of compensation and does not define the essence of the relation. It is a mere method
of
computing compensation, not a basis for determining the existence or absence of an employer-employee relationship
.
10
"
The
NLRC further averred that it did not follow that a worker was a job contractor and not an employee, just because the work
he
was doing was not directly related to the employers trade or business or the work may be considered as "ext
ra" helper as in this
case; and that the relationship of an employer and an employee was determined by law and the same would prevail
whatever
the parties may call it.
Finding Javier to be a regular employee, the NLRC ruled that he was
entitled to a security of tenure
. For failing to present
proof of a valid cause for his termination, Fly Ace was found to be liable for illegal dismissal of Javier who was likewise
entitled
to backwages and separation pay in lieu of reinstatement.
Court of Appeals
Reinstated dismissal of complaint. Javier failed to prove by substantial evidence er-ee relationship. Did not
pass the control test.
ISSUE:
WON Javier was regular employee of Fly Ace. NO, onus probandi was on Javier and he failed to provide substantial
evidence.
RATIO:
In an illegal dismissal case, the
onus probandi
rests on the employer to prove that its dismissal of an employee was for a valid
cause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be
established.
Existence of an employer-employee relationship between him and Fly Ace is essentially a
question of fact
. In dealing with
factual issues in labor cases, "
substantial evidence
that amount of relevant evidence which a reasonable mind might accept

as adequate to justify a conclusion
is sufficient.
"
27
Pigcaulan vs. security and Credit

DECISION
DEL CASTILLO, J.:
It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the
employer that the burden of proving payment of these claims rests.
This Petition for Review on Certiorari[if !supportFootnotes][1][endif] assails the February 24, 2006 Decision[if
of the Court of Appeals (CA) in CA-G.R. SP No. 85515, which granted the petition for certiorari filed
therewith, set aside the March 23, 2004[if !supportFootnotes][3][endif] and June 14, 2004[if !supportFootnotes][4][endif] Resolutions of the
!supportFootnotes][2][endif]
National Labor Relations Commission (NLRC), and dismissed the complaint filed by Oliver R. Canoy (Canoy) and
petitioner Abduljuahid R. Pigcaulan (Pigcaulan) against respondent Security and Credit Investigation, Inc. (SCII) and its
General Manager, respondent Rene Amby Reyes. Likewise assailed is the June 28, 2006 Resolution[if !supportFootnotes][5][endif]
denying Canoys and Pigcaulans Motion for Reconsideration.[if !supportFootnotes][6][endif]
Factual Antecedents
Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different
clients. Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints[if !supportFootnotes][7][endif]
for underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th month
pays. These complaints were later on consolidated as they involved the same causes of action.
Canoy and Pigcaulan, in support of their claim, submitted their respective daily time records reflecting the number
of hours served and their wages for the same. They likewise presented itemized lists of their claims for the corresponding
periods served.
Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries and other
benefits under the law; that the salaries they received were above the statutory minimum wage and the rates provided by
the Philippine Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holiday
pay were already included in the computation of their monthly salaries; that they were paid additional premium of 30% in
addition to their basic salary whenever they were required to work on Sundays and 200% of their salary for work done on
holidays; and, that Canoy and Pigcaulan were paid the corresponding 13 th month pay for the years 1998 and 1999. In
support thereof, copies of payroll listings[if !supportFootnotes][8][endif] and lists of employees who received their 13th month pay for
the periods December 1997 to November 1998 and December 1998 to November 1999 [if !supportFootnotes][9][endif] were
presented. In addition, respondents contended that Canoys and Pigcaulans monetary claims should only be limited to
the past three years of employment pursuant to the rule on prescription of claims.
Ruling of the Labor Arbiter
Giving credence to the itemized computations and representative daily time records submitted by Canoy and
Pigcaulan, Labor Arbiter Manuel P. Asuncion awarded them their monetary claims in his Decision [if !supportFootnotes][10][endif]
dated June 6, 2002. The Labor Arbiter held that the payroll listings presented by the respondents did not prove that
Canoy and Pigcaulan were duly paid as same were not signed by the latter or by any SCII officer. The 13th month payroll
was, however, acknowledged as sufficient proof of payment, for it bears Canoys and Pigcaulans signatures. Thus,
without indicating any detailed computation of the judgment award, the Labor Arbiter ordered the payment of overtime
pay, holiday pay, service incentive leave pay and proportionate 13th month pay for the year 2000 in favor of Canoy and
Pigcaulan, viz:
WHEREFORE, the respondents are hereby ordered to pay the complainants: 1)
their salary differentials in the amount of P166,849.60 for Oliver Canoy and P121,765.44 for
Abduljuahid Pigcaulan; 2) the sum of P3,075.20 for Canoy and P2,449.71 for Pigcaulan for
service incentive leave pay and; [3]) the sum of P1,481.85 for Canoy and P1,065.35 for
Pigcaulan as proportionate 13th month pay for the year 2000. The rest of the claims are
dismissed for lack of sufficient basis to make an award.
SO ORDERED.[if !supportFootnotes][11][endif]
Ruling of the National Labor Relations Commission

Respondents appealed to the NLRC. They alleged that there was no basis
for the awards made because aside from the self-serving itemized computations, no representative daily time record was
presented by Canoy and Pigcaulan. On the contrary, respondents asserted that the payroll listings they submitted should
have been given more probative value. To strengthen their cause, they attached to their Memorandum on Appeal
payrolls[if !supportFootnotes][12][endif] bearing the individual signatures of Canoy and Pigcaulan to show that the latter have received
their salaries, as well as copies of transmittal letters[if !supportFootnotes][13][endif] to the bank to show that the salaries reflected in
the payrolls were directly deposited to the ATM accounts of SCIIs employees.
The NLRC, however, in a Resolution[if !supportFootnotes][14][endif] dated March 23, 2004, dismissed the appeal and
held that the evidence show underpayment of salaries as well as non-payment of service incentive leave
benefit. Accordingly, the Labor Arbiters Decision was sustained. The motion for reconsideration thereto was likewise
dismissed by the NLRC in a Resolution[if !supportFootnotes][15][endif] dated June 14, 2004.
Ruling of the Court of Appeals
In respondents petition for certiorari with prayer for the issuance of a temporary restraining order and preliminary
injunction[if !supportFootnotes][16][endif] before the CA, they attributed grave abuse of discretion on the part of the NLRC in finding
that Canoy and Pigcaulan are entitled to salary differentials, service incentive leave pay and proportionate 13th month pay
and in arriving at amounts without providing sufficient bases therefor.
The CA, in its Decision[if !supportFootnotes][17][endif] dated February 24, 2006, set aside the rulings of
both the Labor Arbiter and the NLRC after noting that there were no factual and legal bases mentioned in the questioned
rulings to support the conclusions made. Consequently, it dismissed all the monetary claims of Canoy and Pigcaulan on
the following rationale:
First. The Labor Arbiter disregarded the NLRC rule that, in cases involving money awards and at all events, as
far as practicable, the decision shall embody the detailed and full amount awarded.
Second. The Labor Arbiter found that the payrolls submitted by SCII have no probative value for being unsigned
by Canoy, when, in fact, said payrolls, particularly the payrolls from 1998 to 1999 indicate the individual signatures of
Canoy.
Third. The Labor Arbiter did not state in his decision the substance of the evidence adduced by Pigcaulan and
Canoy as well as the laws or jurisprudence that would show that the two are indeed entitled to the salary differential and
incentive leave pays.
Fourth. The Labor Arbiter held Reyes liable together with SCII for the payment of the claimed salaries and
benefits despite the absence of proof that Reyes deliberately or maliciously designed to evade SCIIs alleged financial
obligation; hence the Labor Arbiter ignored that SCII has a corporate personality separate and distinct from Reyes. To
justify solidary liability, there must be an allegation and showing that the officers of the corporation deliberately or
maliciously designed to evade the financial obligation of the corporation. [if !supportFootnotes][18][endif]
Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied by the CA in a Resolution[if
dated June 28, 2006.
Hence, the present Petition for Review on Certiorari.

Issues
The petition ascribes upon the CA the following errors:
I. The Honorable Court of Appeals erred when it dismissed the complaint on
mere alleged failure of the Labor Arbiter and the NLRC to observe the prescribed form of
decision, instead of remanding the case for reformation of the decision to include the desired
detailed computation.
II. The Honorable Court of Appeals erred when it [made] complainants suffer the
consequences of the alleged non-observance by the Labor Arbiter and NLRC of the prescribed
forms of decisions considering that they have complied with all needful acts required to support
their claims.
III. The Honorable Court of Appeals erred when it dismissed the complaint
allegedly due to absence of legal and factual [bases] despite attendance of substantial
evidence in the records.[if !supportFootnotes][20][endif]
It is well to note that while the caption of the petition reflects both the names of Canoy and Pigcaulan as
petitioners, it appears from its body that it is being filed solely by Pigcaulan. In fact, the Verification and Certification of
Non-Forum Shopping was executed by Pigcaulan alone.
In his Petition, Pigcaulan submits that the Labor Arbiter and the NLRC are not strictly bound by the
rules. And even so, the rules do not mandate that a detailed computation of how the amount awarded was arrived at
should be embodied in the decision. Instead, a statement of the nature or a description of the amount awarded and the
specific figure of the same will suffice. Besides, his and Canoys claims were supported by substantial evidence in the
form of the handwritten detailed computations which the Labor Arbiter termed as representative daily time records,
showing that they were not properly compensated for work rendered. Thus, the CA should have remanded the case
instead of outrightly dismissing it.
In their Comment,[if !supportFootnotes][21][endif] respondents point out that since it was only Pigcaulan who filed the
petition, the CA Decision has already become final and binding upon Canoy. As to Pigcaulans arguments, respondents
submit that they were able to present sufficient evidence to prove payment of just salaries and benefits, which bits of
evidence were unfortunately ignored by the Labor Arbiter and the NLRC. Fittingly, the CA reconsidered these pieces of
evidence and properly appreciated them. Hence, it was correct in dismissing the claims for failure of Canoy and
Pigcaulan to discharge their burden to disprove payment.
Pigcaulan, this time joined by Canoy, asserts in his Reply[if !supportFootnotes][22][endif] that his filing of the present
petition redounds likewise to Canoys benefit since their complaints were consolidated below. As such, they maintain that
any kind of disposition made in favor or against either of them would inevitably apply to the other. Hence, the institution of
the petition solely by Pigcaulan does not render the assailed Decision final as to Canoy. Nonetheless, in said reply they
appended Canoys affidavit[if !supportFootnotes][23][endif] where he verified under oath the contents and allegations of the petition
filed by Pigcaulan and also attested to the authenticity of its annexes. Canoy, however, failed to certify that he had not
filed any action or claim in another court or tribunal involving the same issues. He likewise explains in said affidavit that
his absence during the preparation and filing of the petition was caused by severe financial distress and his failure to
inform anyone of his whereabouts.
Our Ruling
The assailed CA Decision is considered final as to Canoy.
We have examined the petition and find that same was filed by Pigcaulan solely on his own behalf. This is very
clear from the petitions prefatory which is phrased as follows:
COMES NOW Petitioner Abduljuahid R. Pigcaulan, by counsel, unto this
Honorable Court x x x. (Emphasis supplied.)
Also, under the heading Parties, only Pigcaulan is mentioned as petitioner and consistent with this, the body of the
petition refers only to a petitioner and never in its plural form petitioners. Aside from the fact that the Verification and
Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly and
particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is the
Counsel for Petitioner Adbuljuahid Pigcaulan only. In view of these, there is therefore, no doubt, that the petition was
brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has already
become final and executory as to him.
Canoy cannot now simply incorporate in his affidavit a verification of the contents and allegations of the petition as
he is not one of the petitioners therein. Suffice it to state that it would have been different had the said petition been filed
in behalf of both Canoy and Pigcaulan. In such a case, subsequent submission of a verification may be allowed as noncompliance therewith or a defect therein does not necessarily render the pleading, or the petition as in this case, fatally
defective.[if !supportFootnotes][24][endif] The court may order its submission or correction, or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice may
be served thereby. Further, a verification is deemed substantially complied with when one who has ample knowledge to
swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct.[if !supportFootnotes][25][endif] However, even if it were so, we note
that Canoy still failed to submit or at least incorporate in his affidavit a certificate of non-forum shopping.
The filing of a certificate of non-forum shopping is mandatory so much so
that non-compliance could only be tolerated by special circumstances and compelling reasons.[if !supportFootnotes][26][endif] This
Court has held that when there are several petitioners, all of them must execute and sign the certification against forum
shopping; otherwise, those who did not sign will be dropped as parties to the case. [if !supportFootnotes][27][endif] True, we held that
in some cases, execution by only one of the petitioners on behalf of the other petitioners constitutes substantial
compliance with the rule on the filing of a certificate of non-forum shopping on the ground of common interest or common
cause of action or defense.[if !supportFootnotes][28][endif] We, however, find that common interest is not present in the instant
petition. To recall, Canoys and Pigcaulans complaints were consolidated because they both sought the same reliefs
against the same respondents. This does not, however, mean that they share a common interest or defense. The
evidence required to substantiate their claims may not be the same. A particular evidence which could sustain Canoys
action may not effectively serve as sufficient to support Pigcaulans claim.
Besides, assuming that the petition is also filed on his behalf, Canoy failed to show any reasonable cause
for his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, to
be prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from financial distress. However,
Canoy failed to advance any justifiable reason why he did not inform anyone of his whereabouts when he knows that he
has a pending case against his former employer. Sadly, his lack of prudence and diligence cannot merit the courts
consideration or sympathy. It must be emphasized at this point that procedural rules should not be ignored simply
because their non-observance may result in prejudice to a partys substantial rights. The Rules of Court should be
followed except only for the most persuasive of reasons.[if !supportFootnotes][29][endif]
Having declared the present petition as solely filed by Pigcaulan, this Court shall consider the subsequent
pleadings, although apparently filed under his and Canoys name, as solely filed by the former.
There was no substantial evidence to support the grant of overtime pay.
The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13 th month
pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computations
they submitted which he considered as representative daily time records to substantiate the award of salary
differentials. The NLRC then sustained the award on the ground that there was substantial evidence of underpayment of
salaries and benefits.
We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are
self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime
pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated
therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time
records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove
that the two were underpaid of their salaries. We find nothing in the records which could substantially support Pigcaulans
contention that he had rendered service beyond eight hours to entitle him to overtime pay and during Sundays to entitle
him to restday pay. Hence, in the absence of any concrete proof that additional service beyond the normal working hours
and days had indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan.
Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13th month pay for year 2000.
However, with respect to the award for holiday pay, service incentive leave
pay and 13th month pay, we affirm and rule that Pigcaulan is entitled to these benefits.
Article 94 of the Labor Code provides that:
ART. 94. RIGHT TO HOLIDAY PAY. (a) Every worker shall be paid his regular
daily wage during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers.
While Article 95 of the Labor Code provides:
ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. (a) Every employee who
has rendered at least one year of service shall be entitled to a yearly service incentive of five
days with pay.
Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work. [if
Likewise, express provision of the law entitles him to service incentive leave benefit for he rendered
service for more than a year already. Furthermore, under Presidential Decree No. 851,[if !supportFootnotes][31][endif] he should be
th
paid his 13 month pay. As employer, SCII has the burden of proving that it has paid these benefits to its employees. [if
SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan received
their salaries as well as benefits which it claimed are already integrated in the employees monthly salaries. However, the
documents presented do not prove SCIIs allegation. SCII failed to show any other concrete proof by means of records,
pertinent files or similar documents reflecting that the specific claims have been paid. With respect to 13th month pay,
SCII presented proof that this benefit was paid but only for the years 1998 and 1999. To repeat, the burden of proving
payment of these monetary claims rests on SCII, being the employer. It is a rule that one who pleads payment has the
burden of proving it. Even when the plaintiff alleges non-payment, still the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove non-payment.[if !supportFootnotes][33][endif] Since SCII failed to
provide convincing proof that it has already settled the claims, Pigcaulan should be paid his holiday pay, service incentive
leave benefits and proportionate 13th month pay for the year 2000.
The CA erred in dismissing the claims instead of remanding the case to the Labor Arbiter for a detailed computation of the
judgment award.
Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary
awards granted. Such failure, however, should not result in prejudice to the substantial rights of the party. While we
disallow the grant of overtime pay and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter of right,
to his holiday pay, service incentive leave pay and 13th month pay for year 2000. Hence, the CA is not correct in
dismissing Pigcaulans claims in its entirety.
Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within
three years from the time the cause of action accrued,[if !supportFootnotes][34][endif] Pigcaulan can only demand the amounts due
him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are
insufficient to use as bases to properly compute Pigcaulans claims, the case should be remanded to the Labor Arbiter for
a detailed computation of the monetary benefits due to him.
WHEREFORE, the petition is GRANTED. The Decision dated
February 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 are
REVERSED and SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared ENTITLED to holiday pay and
service incentive leave pay for the years 1997-2000 and proportionate 13th month pay for the year 2000.
The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and to make
a detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit Investigation Inc.
should pay without delay.
Philippine Airlines (PAL) vs Philippine Airlines Employees Association (PALEA)
.entry-header
Philippine Airlines (PAL) intends to terminate 2,600 regular employees and then rehire them through an outsourcing
company as contractuals retaining only rank-and-file workers. This action will substantially cut PALs salaries expenses
and increase profit margin. However, Philippine Airlines Employees Association (PALEA) opposes this management
decision.
PALEA held a protest inside the airport to show resistance of what they call an illegal termination and implementation of
outsourcing scheme. PALEA claims that PALs action is a manifestation of corporate greed as the Company had
presented P3 billion comprehensive income in the fiscal year of 2011. PALEA established a protest camp located in front
of PAL to express continuing resistance of the illegal termination and contractualization scheme.
In my opinion, the PALEA failed to emphasize a significant fact: PAL which was incorporated in 1941 was suffering from
losses since Cebu Air challenged the Companys market share 1997.
PALEA argued that PALs action is a manifestation of corporate greed because despite a 3 billion net income in 2011,
PAL still aspires for higher profit by cutting employee costs. PALEA failed to emphasize is that PAL has been suffering
with negative or low free cash flows (cash flow from operations less cash flow from investing), and has accumulated a
deficit of 257 million in 2007 and despite the capital restructuring initiated by the company that wiped out these deficit in
2008; the Company still accumulated a deficit of 14 million as of 2011. One may argue that the Company is already in the
course of turning the operations around since in 2011, PAL already presented 3 billion net income. Although the number
is encouraging, the profit margin generated by PAL is only 4% which is less than half of Cebu Airs 9% profit margin. One
unfavorable increase in the prices of fuel will surely drag PAL back to losses.
I recommend that PAL management should encourage teamwork between them and employees before deciding in
terminating and contractualization of the employees. The decision of terminating and rehiring them as contractuals might
substantially decrease costs but employee morale will be greatly compromised. The management should set profit goals
to achieve every quarter and present plans and strategies on how to achieve these goals. The formulation of the plan
should also be in consideration of the employees suggestions to make them feel part in facing the daunting challenge of
turning PALs operation around. To make sure that the Company is on track of these goals and employees stay
motivated, constant monitoring of the progress should be put in place.
Pacific Consultants v. Schonfeld
Callejo, 2007, Third
Respondent Klaus Schonfeld, a Canadian citizen, had been a consultant in the field
of environmental engineering and water supply and sanitation. Pacicon Philippines
Inc., a subsidiary of Pacific Consultants International of Japan, is a corporation
with the primary purpose to engage in the business of providing specialty and
technical services both in and out of the Philippines. The president of PPI, Jens
Peter Henrichsen, who was also the director of PCIJ, was based in Tokyo, Japan.
Respondent was employed by PCIJ, through Henrichsen, as Sector Manager of PPI
in its Water and Sanitation Department. However, PCIJ assigned him as PPI sector
manager in the Philippines. Respondent arrived in the Philippines and assumed his
position as PPI Sector Manager. He was accorded the status of a resident alien.
PPI applied for an Alien Employment Permit for respondent before the DOLE and
the DOLE granted the application and issued the Permit to respondent. Respondent
later received a letter from Henrichsen informing him that his employment had
been terminated for the reason that PCIJ and PPI had not been successful in the
water and sanitation sector in the Philippines. Respondent filed with PPI several
money claims. PPI partially settled some of his claims, but refused to pay the rest.
Respondent filed a Complaint for Illegal Dismissal.
Petitioners aver that since respondent is a Canadian citizen, the CA erred in
ignoring their claim that the principles of forum non conveniens and lex loci
contractus are applicable. They also point out that the contract of employment of
respondent was executed in Tokyo. Moreover, under Section 21 of the General

Conditions for Employment incorporated in respondents letter of employ
ment, the
dispute between respondent and PCIJ should be settled by the court of arbitration
of London. Petitioners insist that the U.S. Labor-Management Act applies only to
U.S. workers and employers, while the Labor Code applies only to Filipino
employers and Philippine-based employers and their employees, not to PCIJ. In
fine, the jurisdictions of the NLRC and Labor Arbiter do not extend to foreign
workers who executed employment agreements with foreign employers abroad,
although "seconded" to the Philippines.
SC: The petition is denied for lack of merit.
The settled rule on stipulations regarding venue, as held by this Court in the
vintage case of Philippine Banking Corporation v. Tensuan, is that while they are
considered valid and enforceable, venue stipulations in a contract do not, as a rule,
supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the absence of qualifying or restrictive
words. They should be considered merely as an
agreement or additional forum, not as limiting venue to the specified place. They
are not exclusive but, rather permissive. If the intention of the parties were to
restrict venue, there must be accompanying language clearly and categorically
expressing their purpose and design that actions between them be litigated only at
the place named by them.
Petitioners insistence on the application of the principle of forum non conveniens
must be rejected. The bare fact that respondent is a Canadian citizen and was a
repatriate does not warrant the application of the principle for the following
reasons: First. The Labor Code of the Philippines does not include forum non
conveniens as a ground for the dismissal of the complaint. Second. The propriety
of dismissing a case based on this principle requires a factual determination; hence,
it is properly considered as defense. Third. In Bank of America, NT&SA, Bank of
America International, Ltd. v. Court of Appeals, this Court held that: [a] Philippine
Court may assume jurisdiction over the case if it chooses to do so; provided, that
the following requisites are met: (1) that the Philippine Court is one to which the
parties may conveniently resort to; (2) that the Philippine Court is in a position to
make an intelligent decision as to the law and the facts; and, (3) that the Philippine
Court has or is likely to have power to enforce its decision.
Coca Cola Bottlers Inc. v. Climaco February 5, 2007 G.R. No. 146881 514 SCRA 164
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Facts:
Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc
(Coca-Cola), by virtue of a Retainer Agreement. The Retainer Agreement, which began on January 1, 1988, was
renewed annually. The last one expired December 31, 1993. Despite the non-renewal of the Retainer Agreement,
respondent continued to perform his functions as company doctor to Coca-Cola until he received a letter from petitioner
company concluding their retainership agreement. It is noted that as early as September 1992, petitioner was already
making inquiries regarding his status with petitioner company. Petitioner company, however, did not take any action.
Respondent inquired from the management of petitioner company whether it was agreeable to recognize him as a regular
employee. The management refused to do so.
Respondent filed a Complaint before the NLRC seeking recognition as a regular employee of petitioner
company and prayed for the payment of all benefits of a regular employee. While the complaint was pending before the
Labor Arbiter, respondent received a letter from petitioner company concluding their retainership agreement effective 30
days from receipt thereof. This prompted respondent to file a complaint for illegal dismissal against petitioner company.
Respondent contend . The Labor Arbiter and NLRC declared that there is no employer-employee relationship existed
between the parties. However, the Court of Appeals declared that respondent should be classified as a regular employee
having rendered 6 years of service as plant physician by virtue of several renewed retainer agreements.
Issue: WON there exist an employer-employee relationship between the parties
Ruling:
The court, in determining the existence of an employer-employee relationship, has invariably adhered to the
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 to control the employees conduct.
The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show
that no employer-employee relationship exist between the parties, they correctly found that petitioner company lacked the
power of control over the performance by respondent of his duties. The Labor Arbiter reasoned that the Comprehensive
Medical Plan, which contains the respondents objectives, duties and obligations, does not tell respondent how to
conduct his physical examination, how to immunize, or how to diagnose and treat his patients, employees of company, in
each case.
In effect, the Labor Arbiter held that petitioner company, through the Comprehensive Medical Plan, provided
guidelines merely to ensure that the end result was achieved, but did not control the means and methods by which
respondent performed his assigned tasks.
The NLRC affirmed the findings of the Labor Arbiter and stated that it is precisely because the company lacks
the power of control that the contract provides that respondent shall be directly responsible to the employee concerned
and their dependents for any injury, harm or damage caused through professional negligence, incompetence or other
valid causes of action.
In addition, the Court finds that the schedule of work and the requirement to be on call for emergency cases do
not amount to such control, but are necessary incidents to the Retainership Agreement. The Court agrees that there is
nothing wrong with the employment of respondent as a retained physician of petitioner company and upholds the validity
of the Retainership Agreement which clearly stated that no employe-employee relationship existed between the parties.
Considering that there is no employer-employee relationship between the parties, the termination of the Retainership
Agreement , which is accordance with the provisions of the Agreement, does not constitute illegal dismissal of
respondent.
DUMPIT MURILLO VS. CA AND ABC
FACTS:
Thelma Dumpit Murillo was employed as
a newscaster and a co-anchor for Balitan-balita
by the Associated Broadcasting Company on
October 2, 1995. The contract was for a period
of three months. On September 30, 1999, after
four years of repeated renewals, Petitioner s
talent contract expired. No contract was again
enteredinto by the parties to the previous
contract. The petitioners then wrote a letter
demanding her reinstatement to her former
position, payment of backwages and services.
On December 30, 1999, petitioner filed a case
against ABC for illegal constructive dismissal.
The labor arbiter ruled in favor of ABC. The
NLRC however reversed the decision and ruled
that an employer-employee relationship existed
between petitioner and respondent and that
the petitioner was a regular employee illegally
dismissed. When the case reached the Court of
Appeals, the latter decided that Petitioner
should not be allowed to renege from the
stipulations she had voluntarily and knowingly
executed by invoking the security of tenure of
the Labor Code, hence this appeal.
ISSUE: WON an employee-employer
relationship existed between ABC and
Petitioner and was she illegally dismissed.
HELD:
The CA committed reversible error when it
held that petitioner was a fixed term employee.
Petitioner was a regular employee under
contemplation of law. The practice of having
fixed term contracts in the industry does not
automatically make all talent contracts valid
and compliant with labor law.

In Manila Water Company vs. Pena, the
elements to determine the existence of an
employer employee relationship are: (a) the
selection and engagement of the employee (b)
the payment of wages, (c) the power of
dismissal, (d) the employers power to control.
The duties of the Petitioner as enumerated in
her employment contract indicate that ABC had control over the work of the Petitioner. Aside
from control, ABC also dictated the work
assignments and payment of Petitioner s wages.
ABC also had the power to dismiss her. All these
being present, clearly there existed an
employer-employee relationship between
Petitioner and ABC.
Concerning regular employment, the Law
provides for two kinds of employees. (1) those
engaged to perform activities which are usually
necessary or desirable to the usual business or
trade of the employer, (2) those who have
rendered at least one year of service, whether
continuous broken.
The Petitioner s work was necessary or
desirable in the usual business or trade of the
employer which includes its participation in the
Government s news and public information
dissemination. In addition, her work was
continuous for four years. Her contract was
renewed for over 15 times. This repetitive
renewal was indicative of Petitioner s work s
desirability and necessity. Hence it is concluded
that she is a regular employee
Consolidated broadcasting vs. oberoi
Assailed in this petition for review is the July 30, 2004 Decision[if !supportFootnotes][1][endif] of the Court of Appeals in CAG.R. SP No. 77098, which affirmed the December 5, 2001 Decision[if !supportFootnotes][2][endif] of the National Labor Relations
Commission (NLRC) holding that respondents were regular employees of petitioner and that they were illegally dismissed.
Respondents alleged that they were employed as drama talents by DYWB-Bombo Radyo, a radio station owned
and operated by petitioner Consolidated Broadcasting System, Inc. They reported for work daily for six days in a week
and were required to record their drama production in advance. Some of them were employed by petitioner since 1974,
while the latest one was hired in 1997.[if !supportFootnotes][3][endif] Their drama programs were aired not only in Bacolod City but
also in the sister stations of DYWB in the Visayas and Mindanao areas. [if !supportFootnotes][4][endif]
Sometime in August 1998, petitioner reduced the number of its drama productions from 14 to 11, but was opposed
by respondents. After the negotiations failed, the latter sought the intervention of the Department of Labor and
Employment (DOLE), which on November 12, 1998, conducted through its Regional Office, an inspection of DWYB
station. The results thereof revealed that petitioner is guilty of violation of labor standard laws, such as underpayment of
wages, 13th month pay, non-payment of service incentive leave pay, and non-coverage of respondents under the Social
Security System.
Petitioner contended that respondents are not its employees and refused to submit the payroll and daily time
records despite the subpoena duces tecum issued by the DOLE Regional Director. Petitioner further argued that the case
should be referred to the NLRC because the Regional Director has no jurisdiction over the determination of the existence
of employer-employee relationship which involves evidentiary matters that are not verifiable in the normal course of
inspection.
Vexed by the respondents complaint, petitioner allegedly pressured and intimidated respondents. Respondents
Oberio and Delta were suspended for minor lapses and the payment of their salaries were purportedly
delayed. Eventually, on February 3, 1999, pending the outcome of the inspection case with the Regional Director,
respondents were barred by petitioner from reporting for work; thus, the former claimed constructive dismissal. [if
On April 8, 1999, the DOLE Regional Director issued an order

directing petitioner to pay respondents a total of P318,986.74 representing non-payment/underpayment of the salary
and benefits due them.[if !supportFootnotes][6][endif] However, on July 8, 1999, the Regional Director reconsidered the April 8, 1999
order and certified the records of the case to the NLRC, Regional Arbitration Branch VI, for determination of employeremployee relationship.[if !supportFootnotes][7][endif] Respondents appealed said order to the Secretary of Labor.
On October 12, 1999, respondents filed a case for illegal dismissal, underpayment/non-payment of wages
and benefits plus damages against petitioner. On April 10, 2000, the Labor Arbiter dismissed the case without prejudice
while waiting for the decision of the Secretary of Labor on the same issue of the existence of an employer-employee
relationship between petitioner and respondents.
On appeal to the NLRC, respondents raised the issue of employer-employee relationship and submitted the
following to prove the existence of such relationship, to wit: time cards, identification cards, payroll, a show cause order of
the station manager to respondent Danny Oberio and memoranda either noted or issued by said manager. Petitioner, on
the other hand, did not present any documentary evidence in its behalf and merely denied the allegations of
respondents. It claimed that the radio station pays for the drama recorded by piece and that it has no control over the
conduct of respondents.
On December 5, 2001, the NLRC rendered a decision holding that respondents were regular employees of
petitioner who were illegally dismissed by the latter. It further held that respondents complied with the requirements of the
rule on forum shopping. The decretal portion thereof, provides:
WHEREFORE, premises considered, the decision of Labor Arbiter Ray Alan T. Drilon dated 10 April 2000 is SET ASIDE
and VACATED and a new one entered.
Ordering respondent Consolidated Broadcasting System, Inc. (Bombo Radyo

Philippines), DYWB to reinstate the complainants without loss of seniority rights wi[th] full back
wages computed from February 1999 up to the time of actual reinstatement.
Hence, petitioner filed the instant recourse.

The issues for resolution are as follows: (1) Did respondents violate the rule on forum shopping; (2) whether
the NLRC correctly ruled on the merits of the case instead of remanding the case to the Labor Arbiter; (3) whether
respondents were employees of petitioner; and (4) whether their dismissal was illegal.
Respondents complaint in the inspection case before the DOLE Regional Director alleged that they were under the
employ of petitioner at the time of the filing of said complaint. Pending the resolution thereof, they claimed to have been
dismissed; hence, the filing of the present illegal dismissal case before the Labor Arbiter. The causes of action in these
two complaints are different, i.e., one for violation of labor standard laws, and the other, for illegal dismissal, but the
entitlement of respondents to the reliefs prayed for hinges on the same issue of the existence of an employer-employee
relationship. While the decision on the said issue by one tribunal may operate as res judicata on the other, dismissal of
the present illegal dismissal case on the ground of forum shopping, would work injustice to respondents because it is the
law itself which provides for two separate remedies for their distinct causes of action.
Under Article 217[if !supportFootnotes][9][endif] of the Labor Code, termination cases fall under the jurisdiction of Labor
Arbiters. Whereas, Article 128[if !supportFootnotes][10][endif] of the same Code vests the Secretary of Labor or his duly authorized
representatives with the power to inspect the employers records to determine and compel compliance with labor standard
laws. The exercise of the said power by the Secretary or his duly authorized representatives is exclusive to cases where
employer-employee relationship still exists. Thus, in cases where the complaint for violation of labor standard laws
preceded the termination of the employee and the filing of the illegal dismissal case, it would not be in consonance with
justice to charge the complainants with engaging in forum shopping when the remedy available to them at the time their
causes of action arose was to file separate cases before different fora. Besides, in the instant case, respondent Danny
Oberio disclosed in the verification the pendency of the case regarding wage differential. [if !supportFootnotes][11][endif] In addition,
said case was discussed in detail in the position paper,[if !supportFootnotes][12][endif] evincing the absence of any intention on the
part of respondents to mislead the Labor Arbiter.
Similarly, in Benguet Management Corporation v. Court of Appeals,[if !supportFootnotes][13][endif] petitioner filed separate
actions to enjoin the foreclosure of real estate mortgages before the Regional Trial Courts of San Pablo City and
Zambales which has jurisdiction over the place where the properties were located. In both cases, petitioner contended,
among others, that the loan secured by said mortgages imposed unauthorized penalties, interest and charges. The Court
did not find the mortgagors guilty of forum shopping considering that since injunction is enforceable only within the
territorial limits of the trial court, the mortgagor is left without remedy as to the properties located outside the jurisdiction of
the issuing court, unless an application for injunction is made with another court which has jurisdiction over the latter
properties.
By parity of reasoning, it would be unfair to hold respondents in the instant case guilty of forum shopping because
the recourse available to them after their termination, but pending resolution of the inspection case before the DOLE, was
to file a case for illegal dismissal before the Labor Arbiter who has jurisdiction over termination disputes.
More importantly, substantial justice dictates that this case be resolved on the merits considering that the NLRC
and the Court of Appeals correctly found that there existed an employer-employee relationship between petitioner and
respondents and that the latters dismissal was illegal, as will be discussed hereunder.
In the same vein, the NLRC correctly ruled on the merits instead of remanding the case to the Labor
Arbiter. Respondents specifically raised the issue of the existence of employer-employee relationship but petitioner
refused to submit evidence to disprove such relationship on the erroneous contention that to do so would constitute a
waiver of the right to question the jurisdiction of the NLRC to resolve the case on the merits. [if !supportFootnotes][14][endif] This is
rather odd because it was the stand of petitioner in the inspection case before the DOLE that the case should be certified
to the NLRC for the resolution of the issue of employer-employee relationship. But when the same issue was proffered
before the NLRC, it refused to present evidence and instead sought the dismissal of the case invoking the pendency of
the inspection case before the DOLE. Petitioner refused to meet head on the substantial aspect of this controversy and
resorted to technicalities to delay its disposition. It must be stressed that labor tribunals are not bound by technical rules
and the Court would sustain the expedient disposition of cases so long as the parties are not denied due process. [if
The rule is that, due process is not violated where a person is given the opportunity to be heard, but
chooses not to give his or her side of the case.[if !supportFootnotes][16][endif] Significantly, petitioner never claimed that it was
denied due process. Indeed, no such denial exists because it had all the opportunities to present evidence before the
labor tribunals below, the Court of Appeals, and even before this Court, but chose not to do so for reasons which will not
warrant the sacrifice of substantial justice over technicalities.
On the third issue, respondents employment with petitioner passed the four-fold test on employer-employee
relations, namely: (1) the selection and engagement of the employee, or the power to hire; (2) the payment of wages; (3)
the power to dismiss; and (4) the power to control the employee.
Petitioner failed to controvert with substantial evidence the allegation of respondents that they were hired by
the former on various dates from 1974 to 1997. If petitioner did not hire respondents and if it was the director alone who
chose the talents, petitioner could have easily shown, being in possession of the records, a contract to such
effect. However, petitioner merely relied on its contention that respondents were piece rate contractors who were paid by
results.[if !supportFootnotes][17][endif] Note that under Policy Instruction No. 40, petitioner is obliged to execute the necessary
contract specifying the nature of the work to be performed, rates of pay, and the programs in which they will
work. Moreover, project or contractual employees are required to be apprised of the project they will undertake under a
written contract. This was not complied with by the petitioner, justifying the reasonable conclusion that no such contracts
exist and that respondents were in fact regular employees.
In ABS-CBN v. Marquez,[if !supportFootnotes][18][endif] the Court held that the failure of the employer to produce the contract
mandated by Policy Instruction No. 40 is indicative that the so called talents or project workers are in reality, regular
employees. Thus
Policy Instruction No. 40 pertinently provides:
Program employees are those whose skills, talents or

services are engaged by the station for a particular or specific
program or undertaking and who are not required to observe
normal working hours such that on some days they work for less
than eight (8) hours and on other days beyond the normal work
hours observed by station employees and are allowed to enter into
employment contracts with other persons, stations, advertising
agencies or sponsoring companies. The engagement of program
employees, including those hired by advertising or sponsoring
companies, shall be under a written contract specifying, among
other things, the nature of the work to be performed, rates of
pay, and the programs in which they will work. The contract
shall be duly registered by the station with the Broadcast
Media Council within three days from its consummation.
(Emphasis supplied)
Ironically, however, petitioner failed to adduce an iota proof that the requirements
for program employment were even complied with by it. It is basic that project or contractual
employees are appraised of the project they will work under a written contract, specifying, inter
alia, the nature of work to be performed and the rates of pay and the program in which they will
work. Sadly, however, no such written contract was ever presented by the petitioner. Petitioner
is in the best of position to present these documents. And because none was presented, we
have every reason to surmise that no such written contract was ever accomplished by the
parties, thereby belying petitioners posture.
Worse, there was no showing of compliance with the requirement that after every
engagement or production of a particular television series, the required reports were filed with
the proper government agency, as provided no less under the very Policy Instruction invoked
by the petitioner, nor under the Omnibus Implementing Rules of the Labor Code for project
employees. This alone bolsters respondents contention that they were indeed petitioners
regular employees since their employment was not only for a particular program.
Moreover, the engagement of respondents for a period ranging from 2 to 25 years and the fact that their
drama programs were aired not only in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanao
areas, undoubtedly show that their work is necessary and indispensable to the usual business or trade of petitioner. The
test to determine whether employment is regular or not is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been
performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that
activity to the business. Thus, even assuming that respondents were initially hired as project/contractual employees who
were paid per drama or per project/contract, the engagement of their services for 2 to 25 years justify their classification
as regular employees, their services being deemed indispensable to the business of petitioner. [if !supportFootnotes][19][endif]
As to the payment of wages, it was petitioner who paid the same as shown by the payroll bearing the name
of petitioner company in the heading with the respective salaries of respondents opposite their names. Anent the power
of control, dismissal, and imposition of disciplinary measures, which are indicative of an employer-employee relationship,[if
the same were duly proven by the following: (1) memorandum [if !supportFootnotes][21][endif] duly noted by
Wilfredo Alejaga, petitioners station manager, calling the attention of the Drama Department to the late submission of
scripts by writers and the tardiness and absences of directors and talents, as well as the imposable fines of P100 to P200
for future infractions; (2) the memorandum[if !supportFootnotes][22][endif] of the station manager directing respondent Oberio to
explain why no disciplinary action should be taken against him for punching the time card of a certain Mrs. Fe Oberio who
was not physically present in their office; and (3) the station managers memorandum [if !supportFootnotes][23][endif] suspending
respondent Oberio for six days for the said infraction which constituted violation of petitioners network policy. All these,
taken together, unmistakably show the existence of an employer-employee relationship. Not only did petitioner possess
the power of control over their work but also the power to discipline them through the imposition of fines and suspension
for violation of company rules and policies.
Finally, we find that respondents were illegally dismissed. In labor cases, the employer has the burden of proving
that the dismissal was for a just cause; failure to show this would necessarily mean that the dismissal was unjustified and,
therefore, illegal. To allow an employer to dismiss an employee based on mere allegations and generalities would place
the employee at the mercy of his employer; and the right to security of tenure, which this Court is bound to protect, would
be unduly emasculated.[if !supportFootnotes][24][endif] In this case, petitioner merely contended that it was respondents who ceased
to report to work, and never presented any substantial evidence to support said allegation. Petitioner therefore failed to
discharge its burden, hence, respondents were correctly declared to have been illegally dismissed.
Furthermore, 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 the employer must affirmatively show rationally adequate evidence that the
dismissal was for a justifiable cause. It is a time-honored rule that in controversies between a laborer and his master,
doubts reasonably arising from the evidence 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.[if !supportFootnotes][25][endif]
When a person is illegally dismissed, he is entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages. In the event, however, that reinstatement is no longer feasible, or if the employee
decides not to be reinstated, the employer shall pay him separation pay in lieu of reinstatement. Such a rule is likewise
observed in the case of a strained employer-employee relationship or when the work or position formerly held by the
dismissed employee no longer exists. In sum, an illegally dismissed employee is entitled to: (1) either reinstatement if
viable or separation pay if reinstatement is no longer viable, and (2) backwages. In the instant controversy, reinstatement
is no longer viable considering the strained relations between petitioner and respondents. As admitted by the latter, the
complaint filed before the DOLE strained their relations with petitioner who eventually dismissed them from
service. Payment of separation pay instead of reinstatement would thus better promote the interest of both parties.
Respondents separation pay should be computed based on their respective one (1) month pay, or one-half
(1/2) month pay for every year of service, whichever is higher, reckoned from their first day of employment up to finality of
this decision. Full backwages, on the other hand, should be computed from the date of their dismissal until the finality of
this decision.[if !supportFootnotes][26][endif]
WHEREFORE, the petition is DENIED. The July 30, 2004 Decision of the Court of Appeals in CA-G.R. SP No.
77098, finding respondents to be regular employees of petitioner and holding them to be illegally dismissed and directing
petitioner to pay full backwages, is AFFIRMED with the MODIFICATION that petitioner is ordered to pay respondents
their separation pay instead of effecting their reinstatement.
Lakas ng Industriya ng Kapatirang Haligi ng Alyansa-Pinagbuklod ng Manggagawang Promo ng
Burlingame v. Burlingame Corporation
G.R. No. 162833. June 15, 2007.
Facts:
Petitioner filed a petition for certification election before the DOLE. Petitioner sought to represent all
rank-and-file employees of respondent, since it claims that there was no existing union representing the
rank-and-file promo employees. Petitioner prays that it be recognized by the respondent to be the
collective bargaining agent, or in the alternative, that a certification/consent election be held among said
regular rank-and-file promo employees. Respondent filed a MTD, arguing that there exists no employeremployee relationship between it and the petitioners members, and in fact, petitioners members are
actually employees of F. Garil Manpower Services (F.Garil), a duly licensed local employment agency.
To prove this, respondent presented a copy of its contract for manpower services with F. Garil.
Med-Arbiter Parungo dismissed the petition for lack of employer-employee relationship. On appeal, the
Sec. of Labor ordered the immediate conduct of a certification election. Respondent filed an MR which
was denied, so it appealed with the CA, which reversed the decision of the Sec. of Labor.
Issue/s:
Whether F. Garil is an independent contractor or a labor-only contractor
Held/Ratio:
F. Garil is not an independent contractor, based on the criteria set out in
Delos Santos vs. NLRC:
Job contracting is permissible only if the following conditions are met:

1) the contractor carries on an independent business and undertakes the contract work on his own
account under his own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected with the performance
of the work except as to the results thereof; and
2) the contractor has substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct of the
business.
According to Sec. 5 of DOLE Dept. Order No. 18-02 s. 2002:

Section 5.
Prohibition against labor-only contracting.
Labor-only contracting is hereby declared

prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal,
and any of the following elements are [is] present:
i) The contractor or sub-contractor does not have substantial capital or investment which
relates to the job, work or service to be performed and the employees recruited, supplied or
placed by such contractor or subcontractor are performing activities which are directly related to
the main business of the principal; or
ii) The contractor does not exercise the right to control over the performance of the work of
the contractual employee.
The foregoing provisions shall be without prejudice to the application of Article 248(C) of the Labor
Code, as amended.
Substantial capital or investment refers to capital stocks and subscribed capitalization i
n the case of
corporations, tools, equipment, implements, machineries and work premises, actually and directly used by
the contractor or subcontractor in the performance or completion of the job, work or service contracted
out The right to control shal
l refer to the right reserved to the person for whom the services of the
contractual workers are performed, to determine not only the end to be achieved, but also the manner and
means to be used in reaching that end.
First
, F. Garil does not have substantial capitalization or investment in the form of tools, equipment,
machineries, work premises, and other materials, to qualify as an independent contractor. No proof was
adduced to
show F. Garils capitalization.
Second
, the work of the promo-girls was directly related to the principal business or operation of
Burlingame. Marketing and selling of products is an essential activity to the main business of the
principal.
Lastly
, F. Garil did not carry on an independent business or undertake the performance of its service
contract according to its own manner and method, free from the control and supervision of its principal,
Burlingame.
The four-fold test
will show that respondent is the employer of petitioners members. The elements to
determine the existence of an employment relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control
the employees conduct. The most important element is the employers control of the employees
conduct, not only as to the result of the work to be done, but also as to the means and methods to
accomplish it.
The contractual stipulations between Burlingame and F. Garil show the following:
The
actual hiring itself was done through the deployment of personnel to establishments by
Burlingame.
o
The involvement of F. Garil in the hiring process was only with respect to the recruitment
aspect, i.e. the screening, testing and pre-selection of the personnel it provided to
Burlingame.
F. Garil merely served as conduit in the payment of wages

to the deployed personnel.
o
Burlingame would pay the workers through F. Garil, stipulating that Burlingame shall
pay F. Garil a certain sum per worker on the basis of eight-hour work every 15th and 30th
of each calendar month.
Burlingame
exercised control and supervision
over workers supplied by F. Garil.
o
The contract also provides that any personnel found to be inefficient, troublesome,
uncooperative and not observing the rules and regulations set forth by Burlingame shall
be reported to F. Garil and
may be replaced upon request.
o
Also implied in the provision on replacement of personnel carried upon request by
Burlingame is the power to fire personnel.
F. Garil was not left alone in the supervision and control of its alleged employees. It can be concluded
that F. Garil was not an independent contractor since it did not carry a distinct business free from the
control and supervision of Burlingame. Therefore, the contractual stipulation on the nonexistence of an
employer-employee relationship between Burlingame and the personnel provided by F. Garil has
no legal
effect
.
F. Garil was engaged in labor-only contracting, and as such, is considered merely an agent of Burlingame.
In labor-only contracting, the law creates an employer-employee relationship to prevent a circumvention
of labor laws. The contractor is considered merely an agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor as if such employees had been directly mployed by the principal
employer.
Since F. Garil is a labor-only contractor, the workers it supplied
should be considered as employees of Burlingame in the eyes of the law.
The decision of the Sec. of Labor ordering the holding of a certification election is reinstated.
Far East vs. Lebatique

Abandonment Service Incentive Leave Field Personnel
In March 1996, Lebatique was hired as a driver by FAR EAST AGRICULTURAL SUPPLY, INC. with a daily wage of
P223.50. His job as a driver includes the delivery of animal feeds to the clients of the company. He must report either in
the morning or in the afternoon to make the deliveries.
On January 24, 2000, Lebatique was suspended by Manuel Uy (brother of FEASIs General Manager Alexander Uy) for
allegedly using the company vehicle illegally.
On the same day, Lebatique filed a complaint for nonpayment of overtime pay against Alexander Uy.
Uy summoned Lebatique and asked why he was claiming overtime pay. Lebatique said since he started working with the
company he has never been paid OT pay. Uy consulted with his brother. On January 29, 2000, Uy told Lebatique to look
for another job.
Lebatique then filed an Illegal Dismissal case against the company.
The Labor Arbiter ruled in favor of Lebatique. Uy was ordered to reinstate Lebatique and at the same time to pay
Lebatique his 13th month pay, back wages (time when case was pending), service incentive leave pay and OT pay all
amounting to P196,659.72.
Uy argued that Lebatique was not dismissed and that he was merely suspended; that he abandoned his job; and that
Lebatique was a field personnel not entitled to overtime pay and service incentive leave.
ISSUE: Whether or not Lebatique is a field personnel.
HELD: No. Lebatique is a regular employee.
Uy illegally dismissed Lebatique when he told him to look for another job. Judging at the sequence of event, Lebatique
earned the ire of Uy when he filed a complaint for nonpayment of OT pay on the day Lebatique was suspended by Manuel
Uy. Such is not a valid reason for dismissing Lebatique.
Uy cannot therefore claim that he merely suspended Lebatique.
Further, Lebatique did not abandon his job. His filing of this case is proof enough that he had no intention to abandon his
job.
To constitute abandonment as a just cause for dismissal, there must be:
(a) absence without justifiable reason; and
(b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship.
None of the above was proven by Uy.
Also, Lebatique is not a field personnel as defined above for the following reasons:
(1) company drivers, including Lebatique, are directed to deliver the goods at a specified time and place;
(2) they are not given the discretion to solicit, select and contact prospective clients; and
(3) Far East issued a directive that company drivers should stay at the clients premises during truck-ban hours which is
from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.
As a regular employee, Lebatique is entitled to service incentive leave and OT pay.
The Supreme Court affirmed the Labor Arbiters decision but remanded the case for properly computing Lebatiques OT
pay taking in to consideration the companys time keeping records.
Field Personnel Defined
Field personnel are those who regularly perform their duties away from the principal place of business of the employer
and whose actual hours of work in the field cannot be determined with reasonable certainty.
PNOC-EDC v NLRC
Facts:
Danilo Mercado, an employee of the Philippine National Oil Company- Energy Development Corporation, was dismissed
on the grounds of serious acts of dishonesty and violation of company rules and regulations allegedly committed as
follows:
1. Withdrew P1680.00 from company funds, appropriated P680.00 for personal use and paid the nipa supplier P1000.00.
2. Withdrew P28.66 as payment for the fabrication of rubber stamp but appropriated the P8.66 for personal use.
3. Absence without leave and without proper turn-over thus disrupting and delaying company work activities.
4. Vacation leave without prior leave.
Mercado filed a complaint against PNOC-EDC before the NLRC Regional Arbitration Branch. After considerations of
position papers presented by both parties, the labor arbiter ruled in favour of Mercado.
Issues:
1. Whether or not matters of employment of PNOC-EDC is within the jurisdiction of the labor arbiter and the NLRC.
2. Whether or not the labor arbiter and the NLRC are justified in ordering the reinstatement of the private respondent,
payment of his savings, 13th month pay, and payment of damages as well as attorneys fees.
Held:
The High Court affirmed the resolution of the respondent NLRC with modification: reducing moral damages to P10000
and exemplary damages to P5000.
1. The test whether a government-owned or controlled corporation is subject to Civil Service Law is the manner of its
creation. Those created by special charter are subject to its provision while those created under General Corporation Law
are not within its coverage. The PNOC-EDC, having been incorporated under General Corporation Law, is subject to the
provisions of the Labor Law.
2. PNOC-EDCs accusations are not supported by evidence. Loss of trust or breach of confidence is a valid ground for
dismissing an employee, but such loss or breach must have some basis.
LABOR LAW: Four-Fold Test to Determine the Existence of an Employer-Employee Relationship

Tongko v. Manufacturers LIfe Insurance Co. (Phils.), Inc.
(570 SCRA 503)
FACTS:
The contractual relationship between Tongko and Manulife had two basic phases. The first phase began on July 1, 1977,
under a Career
Agents Agreement, which provided that the Agent is an independent contractor and nothing contained herein shall be
construed or interpreted as
creating an employer-employee relationship between the Company and the Agent.
The second phase started in 1983 when Tongko was named Unit Manager in Manulifes Sales Agency Organization. In
1990, he became a
Branch Manager. In 1996), Tongko became a Regional Sales Manager. Tongkos gross earnings consisted of
commissions, persistency income, and
management overrides. Since the beginning, Tongko consistently declared himself self-employed in his income tax
returns. Under oath, he declared his
gross business income and deducted his business expenses to arrive at his taxable business income.
Respondent Renato Vergel de Dios, sales manager, wrote Tongko a letter dated November 6, 2001 on concerns that
were brought up during
the Metro North Sales Managers Meeting, expressing dissatisfaction of Tongkos performance in their agent recruiting
business, which resulted in some
changes on how Tongko would conduct his duties, including that Tongko hire at his expense a competent assistant to
unload him of routine tasks, which
he had been complaining to be too taxing for him.
On December 18, 2001, de Dios wrote Tongko another letter which served as notice of termination of his Agency
Agreement with the company
effective fifteen days from the date of the letter. Tongko filed an illegal dismissal complaint with the National Labor
Relations Commission (NLRC),
alleging that despite the clear terms of the letter terminating his Agency Agreement, that he was Manulifes employee
before he was illegally dismissed.
The
labor arbiter
decreed that no employer-employee relationship existed between the parties.
The
NLRC
reversed the labor arbiters decision on appeal; it found the existence of an employer-employee relationship and
concluded that
Tongko had been illegally dismissed.
The
Court of Appeals
found that the NLRC gravely abused its discretion in its ruling and reverted to the labor arbiters decision that no
employer-employee relationship existed between Tongko and Manulife.
ISSUE:
Is there an employer-employee relationship between Tongko and Manulife?
.
HELD:
NO. In the determination of whether an employer-employee relationship exists between 2 parties, this court applies the
four-fold test to
determine the existence of the elements of such relationship. Jurisprudence is firmly settled that whenever the existence
of an employment relationship
is in dispute, four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power
of dismissal; and (d) the employers power to
control
the employees conduct
. IT is the so-called control test which constitutes the most important index
of existence of the employer-employee relationship that is, whether the employer controls or has reserved the right to
control the employee not only as
to the result of the work to be done but also as to the means and methods by which the same is to be accomplished.
Stated otherwise, an employeremployee relationship exists where the person for whom the services are performed reserves the right to control not only
the end to be achieved but
also the means to be used in reaching such end. In the case at bar, the absence of evidence showing Manulifes control
over Tongkos contractual
duties points to the absence of any employer-employee relationship between Tongko and Manulife. In the context of the
established evidence, Tongko
remained an agent all along; although his subsequent duties made him a lead agent with leadership role, he was
nevertheless only an agent whose
basic contract yields no evidence of means-and-manner control. Claimant clearly failed to substantiate his claim of
employment relationship by the
quantum of evidence the Labor Code requires.
Tongkos failure to comply with the guidelines of de Dios letter, as a ground for termination of Tongkos agency, is a
matter that the labor
tribunals cannot rule upon in the absence of an employer-employee relationship. Jurisdiction over the matter belongs to
the courts applying the laws of
insurance, agency and contracts.
Dispositive:
We REVERSE our Decision of November 7, 2008, GRANT Manulifes motion for reconsideration and, accordingly,
DISMISS
Tongkos petition
Orozco vs. CA
Employee-employer Relationship in a Publication Bond Requirement When Employer Appeals in a Labor Case
Orozco was hired as a writer by the Philippine Daily Inquirer in 1990. She was the columnist of Feminist Reflections
under the Lifestyle section of the publication. She writes on a weekly basis and on a per article basis (P250-300/article).
In 1991, Magsanoc as the editor-in-chief sought to improve the Lifestyle section of the paper. She said there were too
many Lifestyle writers and that it was time to reduce the number of writers. Orozcos column was eventually dropped.
Orozco filed for a case for Illegal Dismissal against PDI and Magsanoc. Orozco won in the Labor Arbiter. The LA ruled
that there exists an employer-employee relationship between PDI and Orozco hence Orozco is entitled to receive
backwages, reinstatement, and 13th month pay.
PDI appealed to the National Labor Relations Commission. The NLRC denied the appeal because of the failure of PDI to
post a surety bond as required by Article 223 of the Labor Code. The Court of Appeals reversed the NLRC.
ISSUE: Whether or not there exists an employer-employee relationship between PDI and Orozco. Whether or not PDIs
appeal will prosper.
HELD: Under Article 223 of the Labor Code:
ART. 223. Appeal. Decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders.
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of
a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from.
The requirement that the employer post a cash or surety bond to perfect its/his appeal is apparently intended to assure
the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the
employers appeal. It was intended to discourage employers from using an appeal to delay, or even evade, their obligation
to satisfy their employees just and lawful claims.
But in this case, this principle is relaxed by the Supreme Court considering the fact that the Labor Arbiter, in ruling that the
Orozco is entitled to backwages, did not provide any computation.
The case is then remanded to the Labor Arbiter for the computation. This necessarily pended the resolution of the other
issue of whether or not there exists an employer-employee relationship between PDI and Orozco.
Olongapo maintenance vs. Chantengco
NACHURA, J.:
This Petition for Review on Certiorari assails the July 29, 2002 Decision[if !supportFootnotes][1][endif] of the Court of Appeals
and its Resolution[if !supportFootnotes][2][endif] dated November 14, 2002 in CA-G.R. SP No. 67474, which, respectively, denied the
petition for certiorari and the motion for reconsideration filed by Olongapo Maintenance Services, Inc. (OMSI).
OMSI is a corporation engaged in the business of providing janitorial and maintenance services to various clients,
including government-owned and controlled corporations. On various dates beginning 1986, OMSI hired the respondents
as janitors, grass cutters, and degreasers, and assigned them at the Ninoy Aquino International Airport (NAIA). On
January 14, 1999, OMSI terminated respondents' employment.
Claiming termination without just cause and non-payment of labor standard benefits, respondents filed a complaint
for illegal dismissal, underpayment of wages, and non-payment of holiday and service incentive leave pays, with prayer
for payment of separation pay, against OMSI.
For its part, OMSI denied the allegations in the complaint. It averred that when Manila International Airport
Authority (MIAA) awarded to OMSI the service contracts for the airport, OMSI hired respondents as janitors, cleaners, and
degreasers to do the services under the contracts. OMSI informed the respondents that they were hired for the MIAA
project and their employments were coterminous with the contracts. As project employees, they were not dismissed from
work but their employments ceased when the MIAA contracts were not renewed upon their expiration. The termination of
respondents employment cannot, thus, be considered illegal.
In a Decision[if !supportFootnotes][3][endif] dated November 19, 1999, the Labor Arbiter dismissed the complaint, viz.:
WHEREFORE, premises considered, judgment is hereby rendered DISMISSING for lack of merit the claims for
separation pay, wage differentials and holiday pay except that respondent is hereby ordered to pay the seventy one (71)
complainants listed in pages three and four of the latters position paper their service incentive leave pay.
On appeal by the respondents, the NLRC modified the Labor Arbiters ruling. It held that respondents were regular
and not project employees. Hence, they are entitled to separation pay:
WHEREFORE, the decision appealed from is hereby modified by granting in addition to the grant of service
incentive leave pay, payment of separation pay equivalent to half-month pay per [every] year of service or one month pay,
whichever is higher.
OMSI sought reconsideration of the ruling, but the NLRC denied the motion on July 30, 2001.
Petitioner went up to the Court of Appeals via a petition for certiorari, imputing grave abuse of discretion to the
NLRC for reversing the factual findings and the decision of the Labor Arbiter. However, the Court of Appeals dismissed
the petition. The appellate court agreed with the NLRC that the continuous rehiring of respondents, who performed
tasks necessary and desirable in the usual business of OMSI, was a clear indication that they were regular, not project
employees. The court added that OMSI failed to establish that respondents employment had been fixed for a specific
project or undertaking, the completion or termination of which had been determined at the time of their engagement or
hiring. Neither had it shown that respondents were informed of the duration and scope of their work when they were
hired. Furthermore, OMSI did not submit to the Department of Labor and Employment (DOLE) reports of termination of
the respondents, thereby bolstering respondents claim of regular employment. OMSI filed a motion for reconsideration,
but the Court of Appeals denied it on November 14, 2002.
Aggrieved by the resolutions of the Court of Appeals, OMSI comes to this Court theorizing that:
THE COURT OF APPEALS COMMITTED GRAVE ERROR AND GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN SUSTAINING THE NLRC'S RULING THAT RESPONDENTS ARE NOT
PROJECT EMPLOYEES. CONCOMITANT THERETO, THERE IS NEITHER FACTUAL NOR LEGAL BASIS FOR THE
AWARD OF SEPARATION PAY.[if !supportFootnotes][6][endif]
OMSI insists that respondents were project employees. Respondents, on the other hand, maintain that they
were OMSI's regular employees.
Article 280 of the Labor Code provides:
ART. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season . . . (Italics supplied.)
Without question, respondents, as janitors, grass cutters, and degreasers, performed work necessary or desirable in the
janitorial and maintenance service business of OMSI.
OMSI, however, argues that the respondents' performance of activities necessary and desirable to its business does
not necessarily and conclusively mean that respondents were regular employees. OMSI asserts that respondents were
project employees and their employment was coterminous with OMSIs service contracts with the MIAA. Thus, when the
service contracts were terminated and the respondents were not re-assigned to another project, OMSI cannot be held
liable for illegal dismissal.
The argument does not persuade.
The principal test in determining whether an employee is a project employee is whether he/she is assigned to carry
out a specific project or undertaking, the duration and scope of which are specified at the time the employee is engaged
in the project,[if !supportFootnotes][7][endif] or where the work or service to be performed is seasonal in nature and the employment
is for the duration of the season.[if !supportFootnotes][8][endif] A true project employee should be assigned to a project which
begins and ends at determined or determinable times, and be informed thereof at the time of hiring. [if !supportFootnotes][9][endif]
In the instant case, the record is bereft of proof that the respondents engagement as project employees has
been predetermined, as required by law. We agree with the Court of Appeals that OMSI did not provide convincing
evidence that respondents were informed that they were to be assigned to a specific project or undertaking when OMSI
hired them. Notably, the employment contracts for the specific project signed by the respondents were never
presented. All that OMSI submitted in the proceedings a quo are the service contracts between OMSI and the
MIAA. Clearly, OMSI utterly failed to establish by substantial evidence that, indeed, respondents were project employees
and their employment was coterminous with the MIAA contract.
Evidently cognizant of such neglect, OMSI attempted to correct the situation by attaching copies of the
application forms[if !supportFootnotes][10][endif] of the respondents to its motion for reconsideration of the Court of Appeals'
Decision. Such practice cannot be tolerated. This practice of submitting evidence late is properly rejected as it defeats the
speedy administration of justice involving poor workers. It is also unfair. [if !supportFootnotes][11][endif]
OMSI's reliance on Mamansag v. National Labor Relations Commission,[if !supportFootnotes][12][endif] Cartagenas v. Romago
Electric Company, Inc.,[if !supportFootnotes][13][endif] and Sandoval Shipyards, Inc. v. National Labor Relations Commission[if
is misplaced. Said cases are not on all fours with the case at bench.
In Mamansag, Consumer Pulse Inc. duly presented the contract of employment showing that Mamansag was hired
for a specific project and the completion or termination of said project was determined at the start of the employment. In
Cartagenas, documentary exhibits were offered showing that the employee had been issued appointments from project to
project and was issued a notice of temporary lay-off when the project was suspended due to lack of funds. Finally, in the
case of Sandoval Shipyards, the termination of the project employees was duly reported to the then Ministry of Labor and
Employment. These circumstances are not true in OMSI's case. As mentioned, no convincing evidence was offered to
prove that respondents were informed that they were to be assigned to a specific project or undertaking. Also, OMSI
never reported respondents' termination to the then Department of Labor and Employment (DOLE). In Philippine Long
Distance Telephone Co. v. Ylagan,[if !supportFootnotes][15][endif] we held that the failure of the employee to file termination reports
was an indication that an employee was not a project but a regular employee.
In termination cases, the burden of proof rests on the employer to show that the dismissal is for a just cause. Thus,
employers who hire project employees are mandated to state and, once its veracity is challenged, to prove the actual
basis for the latter's dismissal.[if !supportFootnotes][16][endif] Unfortunately for OMSI, it failed to discharge the burden. All that we
have is OMSIs self-serving assertion that the respondents were hired as project employees.
Having been illegally dismissed, the NLRC cannot be considered to have acted whimsically in granting respondents
separation pay in lieu of their reinstatement. Accordingly, the Court of Appeals committed no reversible error nor grave
abuse of discretion in denying OMSIs petition for certiorari.
WHEREFORE, the petition for review is DENIED and the assailed Decision and Resolution of the Court of Appeals are
AFFIRMED.
G.R. No. 157680
October 8, 2008
EQUIPMENT TECHNICAL SERVICES or JOSEPH JAMES DEQUITO, petitioners,
vs.
COURT OF APPEALS, ALEX ALBINO, REY ALBINO, JULIUS ABANES, MIGUEL ALINAB, CHRISTOPHER BIOL,
NELSON CATONG, RENATO DULOT, FLORO PACUNDO, MARCELITO GAMAS, REYNALDO LIMA, SAMMY
MESAGAL, ERNESTO PADILLA, and CONRADO SULIBAGA, respondents.
DECISION
VELASCO, JR., J.:
This petition for review under Rule 45 assails and seeks the reversal of the Amended Decision and Resolution dated
March 3, 2003 and March 24, 2003, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 67568. The assailed
amended decision and resolution effectively set aside and reversed the consolidated resolutions dated July 30, 2001 and
September 24, 2001 rendered by the National Labor Relations Commission (NLRC) and reinstated the July 24, 2000
Decision of Labor Arbiter Ermita T. Abrasaldo-Cuyuca in NLRC NCR Case Nos. 00-01-00571-99, 00-02-01429-99, and
00-02-01615-99.
Petitioner Equipment Technical Services (ETS) is primarily engaged in the business of sub-contracting plumbing works of
on-going building construction. Among its clients was Uniwide Sales, Inc. (Uniwide). Petitioner Joseph James Dequito
was, during the period material, occupying the position of manager of ETS, 1 albeit the CA referred to him as ETS
president. On various occasions involving different projects, ETS hired the services of private respondents as pipe fitters,
plumbers, or threaders.
In December 1998, ETS experienced financial difficulties when Uniwide, its client at the time, failed to pay for the
plumbing work being done at its Coastal Mall. As a result, ETS was only able to pay its employees 13th month pay
equivalent to two weeks salary.
Unhappy over what they thought was ETS failure to release the balance of their 13th month pay, private respondents
brought their case before the Arbitration Branch of the NLRC, docketed as NLRC NCR Case No. 00-01-00571-99 and
entitled as Alex Albino, Renato Dulot, Miguel Alinab, Marcelito Gamas, Julius Abanes, Christopher Biol, Sammy Mesagal,
Conrado Sulibaga, Floro Pacundo v. Equipment Technical Services or Joseph James Dequito.
Later, two other cases were filed against ETS for illegal dismissal and payment of money claims when the complainants
thereat were refused work in another ETS project, i.e., Richville project, allegedly because they refused to sign individual
employment contracts with ETS. These two other cases were Nelson Catong, Roger Lamayon, Christopher Lamayon v.
Equipment Technical Services or Joseph James Dequito, docketed as NLRC NCR Case No. 00-02-01429-99; and Rey
Albino, Ernesto Padilla, Reynaldo Lima v. Equipment Technical Services or Joseph James Dequito, docketed as NLRC
NCR Case No. 00-02-01615-99.
The three cases were consolidated before the labor arbiter. Following failed conciliation efforts, all concerned, except
Roger and Christopher Lamayon, submitted, as the labor arbiter directed, their respective position papers.
Private respondents position2 is summed up as follows: (1) they are regular employees of ETS; (2) ETS dismissed them
without cause and without due process after they filed cases for money claims against ETS in the arbitration branch of the
NLRC; (3) ETS has not paid them their salaries, 13th month pay, service incentive leave pay, overtime pay, and premium
pay for holidays and rest days; and (4) they are entitled to reinstatement to their former positions with paid backwages in
addition to their money claims and payment of attorneys fees.
ETS position3 may be summed up as follows: (1) private respondents were its contractual/project employees engaged for
different projects of the company; (2) they were not illegally dismissed, having been hired on a per project basis; (3) ETS
was unable to fully release private respondents 13th month pay because Uniwide failed to pay for its contracted plumbing
project; (4) ETS was forced to abandon the Uniwide project and undertake another project, the Richville project, because
the chances of being paid by Uniwide were dim; (5) ETS asked private respondents to sign employment contracts to
formalize their previous agreement but said private respondents refused; and (6) as a result, ETS was constrained to
deny employment to private respondents as it considered the execution of employment contracts part of management
prerogative before employment commences.
On July 24, 2000, Labor Arbiter Abrasaldo-Cuyuca issued a Decision, holding that private respondents were ETS regular,
not merely project, employees. Accordingly, ETS was adjudged liable for illegal dismissal and directed to pay private
respondents their money claims plus 10% of the total award as attorneys fees. The fallo of the subject decision reads as
follows:
WHEREFORE, judgment is hereby rendered declaring the dismissal of the complainants illegal.
Further, respondents are further ordered to pay the complainants their backwages, proportionate 13th month pay, [holiday]
and service incentive leave pay.
Ten percent of the total award as attorneys fees.
Other claims are dismissed for lack of merit.
The complaints of Roger and Christopher all surnamed Lamayon are dismissed without prejudice.
The computation prepared by the Computation Unit, NCR, this Commission is attached [sic] forming part of this decision.
SO ORDERED.4
ETS appealed from the above labor arbiters decision. On July 30, 2001, the NLRC rendered a resolution which, while
reversing the labor arbiters holding with respect to the nature of private respondents employment and the illegality of
their dismissal, nevertheless upheld the validity of the monetary award extended by the labor arbiter, part of which
included the award of backwages. The pertinent portion of the modificatory resolution reads as follows:
ACCORDINGLY, premises considered, the decision appealed from is hereby MODIFIED in that the findings of regularity
of employment and illegal dismissal are hereby VACATED. However, respondents are ordered to give complainants
priority in hiring for present and future projects. All other dispositions are hereby AFFIRMED in toto.
SO ORDERED.
Following the denial on September 24, 2001 of ETS motion for reconsideration, ETS elevated its case to the CA via a
petition for certiorari under Rule 65, the recourse docketed as CA-G.R. SP No. 67568. As its principal contention, ETS
ascribed on the NLRC the commission of grave abuse of discretion in affirming the monetary award in favor of private
respondents, despite its finding that there was no illegal dismissal in this case.
On January 23, 2002, the CA rendered judgment disposing as follows:
WHEREFORE, premises considered, the assailed resolutions of the National Labor Relations Commission dated July 30,
2001 and September 24, 2001 are hereby ANNULLED and SET ASIDE and a new one rendered ORDERING petitioner
Equipment Technical Services to pay private respondents their holiday pay and service incentive leave pay for the year
1998 and the balance of their 13th month pay for the year 1999.
The case is hereby REMANDED to Labor Arbiter Ermita T. Abrasaldo-Cuyuca for the computation of the same.
The complaint against petitioner Joseph James Dequito is hereby DISMISSED, for lack of merit.
No pronouncement as to costs.
SO ORDERED.
Upon motion of private respondents for reconsideration, the CA issued an Amended Decision5 dated March 3, 2003
vacating its earlier January 23, 2002 decision. The CA, in main support of its present disposition, stated that the NLRCs
determination that private respondents are "project workers" is "utterly unsupported by the evidence on record and is
patently erroneous" and, therefore, is tainted with grave abuse of discretion. 6 The fallo of the Amended Decision reads:
WHEREFORE, premises considered, the present motion for reconsideration is hereby GRANTED. The petition is hereby
DENIED DUE COURSE and accordingly DISMISSED, for lack of merit. Our Decision dated January 23, 2002 is hereby
RECONSIDERED and SET ASIDE and a new one is hereby entered REVERSING and SETTING ASIDE the assailed
Resolutions dated July 30, 2001 and September 24, 2001 of public respondent NLRC in NLRC NCR case No. 00-0100571-99 (NLRC CA No. 027203-2001), NLRC NCR Case No. 00-02-01429-99 and NLRC NCR Case No. 00-02-0161599. The Decision dated July 24, 2000 rendered by Labor Arbiter Ermita T. Abrasaldo-Cuyuca is hereby REINSTATED and
AFFIRMED in all respects, including the computation of the monetary awards in favor of private respondents forming part
of and attached to the same.
With costs against the petitioners.
SO ORDERED.
Hence, this petition on the submission that, contrary to the findings of the CA, but conformably with the determination of
the NLRC, private respondents are seasonal or project workers; the duration of their employment is not permanent but
coterminus with the project to which they are assigned and from whose payroll they are paid. As project employees,
private respondents cannot, according to petitioners, validly maintain an action for illegal dismissal with prayer for
reinstatement and payment of backwages, both reliefs being usually accorded following a finding of illegal dismissal.
The petition is without merit. As we see it, as did the CA and the NLRC, the primary question to be resolved and to which
all others must yield is whether or not private respondents are project employees. The CA, siding with the labor arbiter, as
indicated earlier, answered the poser in the affirmative, while the NLRC resolved it in the negative.
As the Court has consistently held, the service of project employees are coterminus with the project and may be
terminated upon the end or completion of that project or project phase for which they were hired. Regular employees, in
contrast, enjoy security of tenure and are entitled to hold on to their work or position until their services are terminated by
any of the modes recognized under the Labor Code.7
The principal test for determining whether an employee is properly characterized as "project employee," as distinguished
from "regular employee," is whether or not "the project employee" was assigned to carry out "a specific project or
undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. 8
And as Article 280 of the Labor Code, defining a regular employee vis--vis a project employee, would have it:
Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee x x x.
It bears to stress at the outset that ETS admits hiring or employing private respondents to perform plumbing works for
various projects. Given this postulate, regular employment may reasonably be presumed and it behooves ETS to prove
otherwise, that is, that the employment in question was contractual in nature ending upon the expiration of the term fixed
in the contract or for a specific project or undertaking. But the categorical finding of the CA, confirmatory for the most part
of that of the labor arbiter, is that not a single written contract of employment fixing the terms of employment for the
duration of the Uniwide project, or any other project, was submitted by ETS despite the latters allegations that private
respondents were merely contractual employees. Records of payroll and other pertinent documents, such as job contracts
secured by ETS showing that private respondents were hired for specific projects, were also not submitted by ETS.9
Moreover, if private respondents were indeed employed as project employees, petitioners should have had submitted a
report of termination every time their employment was terminated owing to the completion of each plumbing project. As
correctly held by the CA in its Amended Decision, citing Tomas Lao Construction v. NLRC,10 ETS failure to report the
employment termination and file the necessary papers after every project completion tends to support the claim of private
respondents about their not being project employees.11 Under Policy Instruction No. 20, Series of 1977,12 the report must
be made to the nearest public office employment.13 The decision in Violeta v. NLRC is also apropos, particularly when it
held:
[The employer] should have filed as many reports of termination as there were construction projects actually finished if
petitioners [employees] were indeed project employees, considering that petitioners were hired and again [hired] for
various projects or phases of work therein. Its failure to submit reports of termination cannot but sufficiently convince us
further that petitioners are truly regular employees. Just as important, the fact that petitioners had rendered more than one
year of service at the time of their dismissal overturns private respondents allegations that petitioners were hired for a
specific or fixed undertaking for a limited period of time.14
The Court can allow that, in the instant case, private respondents may have initially been hired for specific projects or
undertaking of petitioner ETS and, hence, may be classified as project employees. Their repeated rehiring to perform
tasks necessary to the usual trade or business of ETS changed the legal situation altogether, for in the later instance, their
continuous rehiring took them out from the scope of workers coterminus with specific projects and had made them regular
employees. We said as much in Phesco, Inc. v. NLRC that "where the employment of project employees is extended long
after the supposed project had been finished, the employees are removed from the scope of project employees and they
shall be considered regular employees."15
Parenthetically, petitioners assertion that there can be no illegal dismissal of project employees inasmuch as they are not
entitled to security of tenure is inaccurate. The constitutionally-protected right of labor to security of tenure covers both
regular and project workers.16 Their termination must be for lawful cause and must be done in a way which affords them
proper notice and hearing.17
In termination disputes, the burden of proving that an employee had been dismissed for a lawful cause or that the
exacting procedural requirements under the Labor Code had been complied with lies with the employer. 18 Where there is
no showing of a clear, valid, and legal cause for termination of employment, the law considers the case a matter of illegal
dismissal.19
Based on the foregoing criteria, the factual findings of the labor arbiter on the regular nature of private respondents
employment, juxtaposed with ETS failure to support its "project-workers theory," impel us to dismiss the instant petition.
This is as it should be for, to paraphrase Asuncion v. NLRC, if doubt exists between the evidence of the employers and
the employees, the scales of justice must be tilted in favor of the latterthe employers must adequately show rationally
adequate evidence that their case is preponderantly superior.20
As did the CA, the Court holds that private respondents are regular employees whose services were terminated without
lawful cause and effected without the requisite notice and hearing.
In view of the illegality of the dismissal, the fallo of the Decision of Labor Arbiter Abrasaldo-Cuyuca, as reinstated by the
CA in its assailed Amended Decision, has to be modified in the sense that private respondents are entitled to
reinstatement to their previous positions as pipe fitters or threaders, as the case may be, without loss of rank and seniority
rights and with full backwages.
At this juncture, the Court wishes to state that it is taking judicial notice of the fact that no corporation is registered with the
Securities and Exchange Commission under the name "Equipment Technical Services." It is thus but fair that both
petitioners liability under this Decision be joint and several.
WHEREFORE, the Amended Decision dated March 3, 2003 of the CA in CA-G.R. SP No. 67568, reinstating the July 24,
2000 Decision of Labor Arbiter Abrasaldo-Cuyuca, is AFFIRMED with the MODIFICATION that petitioners are jointly and
severally ordered to reinstate private respondents to their former positions, without loss of rank and seniority rights, with
backwages from the date of dismissal until reinstated. As modified, the fallo of the labor arbiters Decision shall read:
WHEREFORE, judgment is hereby rendered declaring the dismissal of private respondents illegal.
Petitioners ETS and Joseph James Dequito are ordered jointly and severally to reinstate private respondents
ALEX ALBINO, REY ALBINO, JULIUS ABANES, MIGUEL ALINAB, CHRISTOPHER BIOL, NELSON CATONG,
RENATO DULOT, FLORO PACUNDO, MARCELITO GAMAS, REYNALDO LIMA, SAMMY MESAGAL, ERNESTO
PADILLA, and CONRADO SULIBAGA to their respective positions without loss of rank and seniority rights with
full backwages from the date of dismissal up to the date of actual reinstatement. Petitioners are likewise jointly
and severally liable to private respondents for proportionate 13th month pay, holiday pay, and service incentive
leave pay.
Ten percent of the total award shall be paid to the counsel of private respondents as attorneys fees.
Other claims are dismissed for lack of merit.
The complaints of Roger and Christopher, both surnamed Lamayon, are dismissed without prejudice.
Costs against petitioners.
SO ORDERED.
BISIG MANGGAGAWA SA TRYCO V. NLRC (LABOR)
The SC had no reason to deviate from the well-entrenched rule that FINDINGS OF FACT OF LABOR OFFICIALS, WHO
ARE DEEMED TO HAVE ACQUIRED EXPERTISE IN MATTERS WITHIN THEIR RESPECTIVE JURISDICTION, ARE
GENERALLY ACCORDED NOT ONLY RESPECT BUT EVEN FINALITY, AND BIND THE SC WHEN SUPPORTED BY
SUBSTANTIAL EVIDENCE. This is particularly true when the findings of the Labor Arbiter, the NLRC, and the CA are in
absolute agreement.
While the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what
are clearly MANAGEMENT PREROGATIVES. The free will of the management to conduct its own business affairs to
achieve its purpose cannot be denied. This prerogative extends to the management's right to regulate, according to its
own discretion and judgment, all aspects of employment, including the freedom to transfer and reassign employees
according to the requirements of its business.
Management prerogative of transferring and reassigning employees from one area of operation to another in order to
meet the requirements of the business is therefore generally not constitutive of constructive dismissal.

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BITOY JAVIER (DANILO P.

regular hauler to deliver its products, we give credence to

that amount of relevant evidence which a reasonable mind might accept

Pigcaulan vs. security and Credit

Ruling of the National Labor Relations Commission

Hence, the present Petition for Review on Certiorari.

While Article 95 of the Labor Code provides:

respondent was executed in Tokyo. Moreover, under Section 21 of the General

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and compliant with labor law.

On April 8, 1999, the DOLE Regional Director issued an order

Ordering respondent Consolidated Broadcasting System, Inc. (Bombo Radyo

Hence, petitioner filed the instant recourse.

Program employees are those whose skills, talents or

Job contracting is permissible only if the following conditions are met:

According to Sec. 5 of DOLE Dept. Order No. 18-02 s. 2002:

Labor-only contracting is hereby declared

F. Garil merely served as conduit in the payment of wages

Far East vs. Lebatique

LABOR LAW: Four-Fold Test to Determine the Existence of an Employer-Employee Relationship

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