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Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of beer, shandy, bottled
water and glass products. ABI entered into a Collective Bargaining Agreement (CBA), with Bisig at Lakas ng mga
Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining representative of ABIs rank-and-
file employees. On October 3, 2000, ABI and BLMA-INDEPENDENT signed a renegotiated CBA.

Article I of the CBA defined the scope of the bargaining unit, as follows:

Section 1. Recognition. The COMPANY recognizes the UNION as the sole and exclusive
bargaining representative of all the regular rank-and-file daily paid employees within the scope of
the appropriate bargaining unit with respect to rates of pay, hours of work and other terms and
conditions of employment. The UNION shall not represent or accept for membership
employees outside the scope of the bargaining unit herein defined.

Section 2. Bargaining Unit. The bargaining unit shall be comprised of all regular rank-
and-file daily-paid employees of the COMPANY. However, the following jobs/positions as herein
defined shall be excluded from the bargaining unit, to wit:

6. Confidential and Executive Secretaries
12. Purchasing and Quality Control Staff[6] [EMPHASIS SUPPLIED.]

Subsequently, a dispute arose when ABIs management stopped deducting union dues from eighty-one (81)
employees, believing that their membership in BLMA-INDEPENDENT violated the CBA. Eighteen (18) of these
affected employees are QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who formed part of
the Quality Control Staff. Twenty (20) checkers are assigned at the Materials Department of the Administration
Division, Full Goods Department of the Brewery Division and Packaging Division. The rest are secretaries/clerks
directly under their respective division managers.

BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right to self-organization and brought the
matter to the grievance machinery. As the parties failed to amicably settle the controversy, BLMA-INDEPENDENT
lodged a complaint before the National Conciliation and Mediation Board (NCMB).

Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT after finding that the records submitted
by ABI showed that the positions of the subject employees qualify under the rank-and-file category because their
functions are merely routinary and clerical.

On appeal, the CA reversed the Voluntary Arbitrator. Hence the petition.

1. Whether or not the 81 employees are confidential employees and are not eligible for the inclusion
in the bargaining unit.

2. Whether or not the 81 employees are deprived of their right to self organization.


1. NO.

We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file employees and not
confidential employees.

the twenty (20) checkers are not confidential employees being quality control staff entrusted with the handling and
custody of company properties and sensitive information assigned in the storeroom section of the Materials
Department, finishing section of the Packaging Department, and the decorating and glass sections of the Production
Department plainly showed that they perform routine and mechanical tasks preparatory to the delivery of the
finished products. While it may be argued that quality control extends to post-production phase -- proper packaging
of the finished products -- no evidence was presented by the respondent to prove that these daily-paid checkers
actually form part of the companys Quality Control Staff who as such were exposed to sensitive, vital and confidential
information about [companys] products or have knowledge of mixtures of the products, their defects, and even their
formulas which are considered trade secrets.

Consequently, we hold that the twenty (20) checkers may not be considered confidential employees under the
category of Quality Control Staff who were expressly excluded from the CBA of the rank-and-file bargaining unit.

Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations. The two (2) criteria
are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the
confidential relationship must exist between the employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations.

There is no showing in this case that the secretaries/clerks and checkers assisted or acted in a confidential
capacity to managerial employees and obtained confidential information relating to labor relations policies. And
even assuming that they had exposure to internal business operations of the company, respondent claimed,
this is not per se ground for their exclusion in the bargaining unit of the daily-paid rank-and-file employees.

2. NO.

Considering that the herein dispute arose from a simple disagreement in the interpretation of the CBA provision on
excluded employees from the bargaining unit, respondent cannot be said to have committed unfair labor practice
that restrained its employees in the exercise of their right to self-organization, nor have thereby demonstrated an
anti-union stance.
Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts are related to the
workers right to self organization and to the observance of a CBA. For a charge of unfair labor practice to prosper, it
must be shown that ABI was motivated by ill will, bad faith, or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings
or grave anxiety resulted x x xfrom ABIs act in discontinuing the union dues deduction from those employees it
believed were excluded by the CBA.



In 2005, Arlene S. Espiritu ("Arlene") was engaged by Fuji Television Network, Inc. ("Fuji") as a news
correspondent/producer4 "tasked to report Philippine news to Fuji through its Manila Bureau field office." Arlenes
employment contract initially provided for a term of one (1) year but was successively renewed on a yearly basis with
salary adjustment upon every renewal. Sometime in January 2009, Arlene was diagnosed with lung cancer. She
informed Fuji about her condition. In turn, the Chief of News Agency of Fuji, Yoshiki Aoki, informed Arlene "that the
company will have a problem renewing her contract"8 since it would be difficult for her to perform her job. She
"insisted that she was still fit to work as certified by her attending physician."

After several verbal and written communications, Arlene and Fuji signed a non-renewal contract where it was
stipulated that her contract would no longer be renewed after its expiration. The contract also provided that the
parties release each other from liabilities and responsibilities under the employment contract.

On May 6, 2009, the day after Arlene signed the non-renewal contract, she filed a complaint for illegal dismissal and
attorneys fees with the National Capital Region Arbitration Branch of the National Labor Relations Commission. She
alleged that she was forced to sign the nonrenewal contract when Fuji came to know of her illness and that Fuji
withheld her salaries and other benefits for March and April 2009 when she refused to sign.

In the decision, Labor Arbiter Corazon C. Borbolla dismissed Arlenes complaint applying the four-fold test, the Labor
Arbiter held that Arlene was not Fujis employee but an independent contractor.

The National Labor Relations Commission reversed the Labor Arbiters decision. It held that Arlene was a regular
employee with respect to the activities for which she was employed since she continuously rendered services that
were deemed necessary and desirable to Fujis business.


1. Whether or not an employer-employee relationship existed between Fuji and Arlene.

2. Whether or not Arlene is a regular employee.


1. Yes.

This court has often used the four-fold test to determine the existence of an employer-employee relationship.
Under the four-fold test, the "control test" is the most important.134 As to how the elements in the four-fold test
are proven, this court has discussed that:
[t]here is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant
evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security
registration, appointment letters or employment contracts, payrolls, organization charts, and personnel lists,
serve as evidence of employee status.

Fujis argument that Arlene was an independent contractor under a fixed-term contract is contradictory. Employees
under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an employer-
employee relationship exists. The test in this kind of contract is not the necessity and desirability of the employees
activities, "but the day certain agreed upon by the parties for the commencement and termination of the
employment relationship."

For regular employees, the necessity and desirability of their work in the usual course of the employers business are
the determining factors. On the other hand, independent contractors do not have employer-employee relationships
with their principals. Hence, before the status of employment can be determined, the existence of an employer-
employee relationship must be established.

The four-fold test can be used in determining whether an employeremployee relationship exists. The elements of the
four-fold test are the following: (1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power of control, which is the most important element.

Thus, the Court of Appeals did not err when it upheld the findings of the National Labor Relations Commission that
Arlene was not an independent contractor.


The test for determining regular employment is whether there is a reasonable connection between the employees
activities and the usual business of the employer. Article 280 provides that the nature of work must be "necessary or
desirable in the usual business or trade of the employer" as the test for determining regular employment.

Article 280 of the Labor Code provides that:

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.

This provision classifies employees into regular, project, seasonal, and casual. It further classifies regular employees
into two kinds: (1) those "engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer"; and (2) casual employees who have "rendered at least one year of service,
whether such service is continuous or broken."

The Court of Appeals affirmed the finding of the National Labor Relations Commission that the successive renewals of
Arlenes contract indicated the necessity and desirability of her work in the usual course of Fujis business. Because of
this, Arlene had become a regular employee with the right to security of tenure.

Further, an employee can be a regular employee with a fixed-term contract. The law does not preclude the possibility
that a regular employee may opt to have a fixed-term contract for valid reasons.