FIRST DIVISION

[G.R. No. 119930. March 12, 1998]

INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. NATIONAL LA OR RELATIONS COMMISSION !Fo"r#h D$%$&$o', C()" C$#*+, LA OR AR ITER NICASIO ,. ANINON a'- ,ANTALEON DE LOS RE.ES, respondents. DECISION ELLOSILLO, J./ On 17 June 1994 respondent Labor Arbiter dismissed for a!" of #urisdi!tion NLR$ RA%&VII $ase No' ()&()(9&94 fi ed b* pri+ate respondent ,anta eon de os Re*es a-ainst petitioner Insu ar Life Assuran!e $o'. Ltd' /INS0LAR LIF12. for i e-a dismissa and nonpa*ment of sa aries and ba!" 3a-es after findin-s no emp o*er&emp o*ee re ations4ip bet3een De os Re*es and petitioner INS0LAR LIF1'[1] On appea b* pri+ate respondent. t4e order of dismissa 3as re+ersed b* t4e Nationa Labor Re ations $ommission /NLR$2 34i!4 ru ed t4at respondent De os Re*es 3as an emp o*ee of petitioner'[2] ,etitioner5s motion for re!onsideration 4a+in- been denied. t4e NLR$ remanded t4e !ase to t4e Labor Arbiter for 4earin- on t4e merits' See"in- re ief t4rou-4 t4is spe!ia !i+i a!tion for certiorari 3it4 pra*er for a restrainin- order and6or pre iminar* in#un!tion. petitioner no3 !omes to us pra*in- for annu ment of t4e de!ision of respondent NLR$ dated ) 7ar!4 1998 and its Order dated 9 Apri 1998 den*in- t4e motion for re!onsideration of t4e de!ision' It fau ts NLR$ for a!tin- 3it4out #urisdi!tion and6or 3it4 -ra+e abuse of dis!retion 34en. !ontrar* to estab is4ed fa!ts and pertinent a3 and #urispruden!e. it re+ersed t4e de!ision of t4e Labor Arbiter and 4e d instead t4at t4e !omp aint 3as proper * fi ed as an emp o*er&emp o*ee re ations4ip e:isted bet3een petitioner and pri+ate respondent'

,etitioner reprises t4e stand it assumed be o3 t4at it ne+er 4ad an* emp o*er&emp o*ee re ations4ip 3it4 pri+ate respondent. t4is bein- an e:press a-reement bet3een t4em in t4e a-en!* !ontra!ts. parti!u ar * reinfor!ed b* t4e stipu ation t4erein de os Re*es 3as a o3ed dis!retion to de+ise 3a*s and means to fu fi 4is ob i-ations as a-ent and 3ou d be paid !ommission fees based on 4is a!tua output' It furt4er insists t4at t4e nature of t4is 3or" status as des!ribed in t4e !ontra!ts 4ad a read* been s;uare * reso +ed b* t4e $ourt in t4e ear ier !ase of Insular Life Assurance Co., Ltd. v. NLRC and Basiao [3]34ere t4e !omp ainant t4erein. 7e e!io %asiao. 3as simi ar * situated as respondent De os Re*es in t4at 4e 3as appointed first as an a-ent and t4en promoted as a-en!* mana-er. and t4e !ontra!ts under 34i!4 4e 3as appointed !ontained terms and !onditions Identi!a to t4ose of De os Re*es' ,etitioner !on! udes t4at sin!e %asiao 3as de! ared b* t4e $ourt to be an independent !ontra!tor and not an emp o*ee of petitioner. t4ere s4ou d be no reason 34* t4e status of De os Re*es 4erein vis--vis petitioner s4ou d not be simi ar * determined' <e re#e!t t4e submissions of petitioner and 4o d t4at respondent NLR$ a!ted appropriate * 3it4in t4e bounds of t4e a3' T4e re!ords of t4e !ase are rep ete 3it4 te ta e indi!ators of an e:istin- emp o*er&emp o*ee re ations4ip bet3een t4e t3o parties despite 3ritten !ontra!tua disa+o3a s' T4ese fa!ts are undisputed= on >1 Au-ust 199> petitioner entered into an a-en!* !ontra!t 3it4 respondent ,anta eon de os Re*es [0] aut4ori?int4e atter to so i!it 3it4in t4e ,4i ippines app i!ations for ife insuran!e and annuities for 34i!4 4e 3ou d be paid !ompensation in t4e form of !ommissions' T4e !ontra!t 3as prepared b* petitioner in its entiret* and De os Re*es mere * si-ned 4is !onformit* t4ereto' It !ontained t4e stipu ation t4at no emp o*er&emp o*ee re ations4ip s4a be !reated bet3een t4e parties and t4at t4e a-ent s4a be free to e:er!ise 4is o3n #ud-ment as to time. p a!e and means of so i!itin- insuran!e' De os Re*es 4o3e+er 3as pro4ibited b* petitioner from 3or"in- for an* ot4er ife insuran!e !ompan*. and +io ation of t4is stipu ation 3as suffi!ient -round for termination of t4e !ontra!t' Aside from so i!itin- insuran!e for t4e petitioner. pri+ate respondent 3as re;uired to submit to t4e former a !omp eted app i!ations for insuran!e 3it4in ninet* /9(2 !onse!uti+e da*s. de i+er po i!ies. re!ei+e and !o e!t initia premiums and ba an!es of first *ear premiums. rene3a premiums. deposits on app i!ations and pa*ments

on po i!* oans' ,ri+ate respondent 3as a so bound to turn o+er to t4e !ompan* immediate * an* and a sums of mone* !o e!ted b* 4im' In a 3ritten !ommuni!ation b* petitioner to respondent De os Re*es. t4e atter 3as ur-ed to re-ister 3it4 t4e So!ia Se!urit* S*stem as a se f& emp o*ed indi+idua as pro+ided under ,D No' 19)9'[1] On 1 7ar!4 199) petitioner and pri+ate respondent entered into anot4er !ontra!t[2]34ere t4e atter 3as appointed as A!tin- 0nit 7ana-er under its offi!e @ t4e $ebu DSO V /1872' As su!4. t4e duties and responsibi ities of De os Re*es in! uded t4e re!ruitment. trainin-. or-ani?ation and de+e opment 3it4in 4is desi-nated territor* of a suffi!ient number of ;ua ified. !ompetent and trust3ort4* under3riters. and to super+ise and !oordinate t4e sa es efforts of t4e under3riters in t4e a!ti+e so i!itation of ne3 business and in t4e furt4eran!e of t4e a-en!*5s assi-ned -oa s' It 3as simi ar * pro+Ided in t4e mana-ement !ontra!t t4at t4e re ation of t4e a!tin- unit mana-er and6or t4e a-ents of 4is unit to t4e !ompan* s4a be t4at of independent !ontra!tor' If t4e appointment 3as terminated for an* reason ot4er t4an for !ause. t4e a!tin- unit mana-er 3ou d be re+erted to a-ent status and assi-ned to an* unit' As in t4e pre+ious a-en!* !ontra!t. De os Re*es to-et4er 3it4 4is unit for!e 3as -ranted freedom to e:er!ise #ud-ment as to time. p a!e and means of so i!itin- insuran!e' Aside from bein- -ranted o+erride !ommissions. t4e a!tin- unit mana-er 3as -i+en produ!tion bonus. de+e opment a o3an!e and a unit de+e opment finan!in- s!4eme eup4emisti!a * termed Afinan!ia assistan!eB !onsistinof pa*ment to 4im of a free portion of ,)(('(( per mont4 and a +a Idate portion of ,1.>(('((' <4i e t4e atter amount 3as deemed as an ad+an!e a-ainst e:pe!ted !ommissions. t4e former 3as not and 3ou d be free * -i+en to t4e unit mana-er b* t4e !ompan* on * upon fu fi ment b* 4im of !ertain manpo3er and premium quota re;uirements' T4e a-ents and under3riters re!ruited and trained b* t4e a!tin- unit mana-er 3ou d be atta!4ed to t4e unit but petitioner reser+ed t4e ri-4t to determine if su!4 assi-nment 3ou d be made or. for an* reason. to reassi-n t4em e se34ere' Aside from so i!itin- insuran!e. De os Re*es 3as a so e:press * ob i-ed to parti!ipate in t4e !ompan*5s !onser+ation pro-ram. i'e'. preser+ation and maintenan!e of e:istin- insuran!e po i!ies. and to a!!ept mone*s du * re!eipted on a-ent5s re!eipts pro+ided t4e same 3ere turned o+er to t4e !ompan*' As on- as 4e 3as unit mana-er in an a!tin- !apa!it*. De os Re*es 3as pro4ibited from 3or"in- for ot4er ife insuran!e

!ompanies or 3it4 t4e -o+ernment' Ce !ou d not a so a!!ept a mana-eria or super+isor* position in an* firm doin- business in t4e ,4i ippines 3it4out t4e 3ritten !onsent of petitioner' ,ri+ate respondent 3or"ed !on!urrent * as a-ent and A!tin- 0nit 7ana-er unti 4e 3as notified b* petitioner on 1D No+ember 199) t4at 4is ser+i!es 3ere terminated effe!ti+e 1D De!ember 199)' On 7 7ar!4 1994 4e fi ed a !omp aint before t4e Labor Arbiter on t4e -round t4at 4e 3as i e-a * dismissed and t4at 4e 3as not paid 4is sa aries and separation pa*' ,etitioner fi ed a motion to dismiss t4e !omp aint of De os Re*es for a!" of #urisdi!tion. !itin- t4e absen!e of emp o*er&emp o*ee re ations4ip' it reasoned out t4at based on t4e !riteria for determinin- t4e e:isten!e of su!4 re ations4ip or t4e so&!a ed Afour&fo d test.B i'e'. /a2 se e!tion and en-a-ement of emp o*ee. /b2 pa*ment of 3a-es. /!2 po3er of dismissa . and. /d2 po3er of !ontro . De os Re*es 3as not an emp o*ee but an independent !ontra!tor' On 17 June 1994 t4e motion of petitioner 3as -ranted b* t4e Labor Arbiter and t4e !ase 3as dismissed on t4e -round t4at the element of control was not sufficiently esta lished since the rules and !uidelines set y "etitioner in its a!ency a!reement with res"ondent #e los Reyes were formulated only to achieve the desired result without dictatin! the means or methods of attainin! it. Respondent NLR$ 4o3e+er appre!iated t4e e+iden!e from a different perspe!ti+e' It determined t4at respondent De os Re*es was under the effective control of "etitioner in the critical and most im"ortant as"ects of his wor$ as %nit &ana!er' T4is !on! usion 3as deri+ed from t4e pro+isions in t4e !ontra!t 34i!4 appointed pri+ate respondent as A!tin- 0nit 7ana-er. to 3it= /a2 De os Re*es 3as to ser+e e:! usi+e * t4e !ompan*. t4erefore. 4e 3as not an independent !ontra!torE /b2 4e 3as re;uired to meet !ertain manpo3er and produ!tion quotaE and. /!2 petitioner !ontro ed t4e assi-nment to and remo+a of so i!itin- a-ents from 4is unit' T4e NLR$ a so too" into a!!ount ot4er !ir!umstan!es s4o3in- t4at petitioner e:er!ised emp o*er5s prero-ati+es o+er De os Re*es. e'-'. /a2 imitin- t4e 3or" of respondent De os Re*es to se in- a ife insuran!e

po i!* "no3n as ASa ar* Dedu!tion Insuran!eB only to members of t4e ,4i ippine Nationa ,o i!e. pub i! and pri+ate s!4oo tea!4ers and ot4er emp o*ees of pri+ate !ompaniesE /b2 assi-nin- pri+ate respondent to a parti!u ar p a!e and tab e 34ere 4e 3or"ed 34ene+er 4e 4as not in t4e fie dE /!2 pa*in- pri+ate respondent durin- t4e period of t3e +e /1>2 mont4s of 4is appointment as A!tin- 0nit 7ana-er t4e amount of ,1.8(('(( as 0nit De+e opment Finan!in- of 34i!4 >(F formed 4is sa ar* and t4e rest. i'e'. D(F. as ad+an!e of 4is e:pe!ted !ommissionsE and /d2 promisin- t4at upon !omp etion of !ertain re;uirements. 4e 3ou d be promoted to 0nit 7ana-er 3it4 t4e ri-4t of petitioner to re+ert 4im to a-ent status 34en 3arranted' ,arent4eti!a *. bot4 petitioner and respondent NLR$ treated t4e a-en!* !ontra!t and t4e mana-ement !ontra!t entered into bet3een petitioner and De os Re*es as !ontra!ts of a-en!*' <e 4o3e+er 4o d ot4er3ise' 0n;uestionab * t4ere e:ist ma#or distin!tions bet3een t4e t3o a-reements' <4i e t4e first 4as t4e earmar"s of an a-en!* !ontra!t. t4e se!ond is far remo+ed from t4e !on!ept of a-en!* in t4at pro+ided t4erein are !onditiona ities t4at indi!ate an emp o*er&emp o*ee re ations4ip' t4e NLR$ t4erefore 3as !orre!t in findin- t4at pri+ate respondent 3as an emp o*ee of petitioner. but t4is 4o ds true on * insofar as t4e mana-ement !ontra!t is !on!erned' In +ie3 t4ereof. 4e Labor Arbiter 4as #urisdi!tion o+er t4e !ase' It is a:iomati! t4at t4e e:isten!e of an emp o*er&emp o*ee re ations4ip !annot be ne-ated b* e:press * repudiatin- it in t4e mana-ement !ontra!t and pro+idin- t4erein t4at t4e Aemp o*eeB is an independent !ontra!tor 34en t4e terms of a-reement ! ear * s4o3 ot4er3ise' For. t4e emp o*ment status of a person is defined and pres!ribed b* a3 and not b* 34at t4e parties sa* it s4ou d be'[3] In determinin- t4e status of t4e mana-ement !ontra!t. t4e Afour&fo d testB on emp o*ment ear ier mentioned 4as to be app ied' ,etitioner !ontends t4at De os Re*es 3as ne+er re;uired to -o t4rou-4 t4e pre&emp o*ment pro!edures and t4at t4e probationar* emp o*ment status 3as reser+ed on * to emp o*ees of petitioner' On t4is s!ore. it insists t4at t4e first re;uirement of se e!tion and en-a-ement of t4e emp o*ee 3as not met'

A oo" at t4e pro+isions of t4e !ontra!t s4o3s t4at pri+ate respondent 3as appointed as A!tin- 0nit 7ana-er on * upon re!ommendation of t4e Distri!t 7ana-er'[8] T4is indi!ates t4at pri+ate respondent 3as 4ired b* petitioner be!ause of t4e fa+orab e endorsement of its du * aut4ori?ed offi!er' %ut. t4is approbation !ou d on * 4a+e been based on t4e performan!e of De os Re*es 3it4 petitioner 3as not4in- more t4an a tria or probationar* period for 4is e+entua appointment as A!tin- 0nit 7ana-er of petitioner' T4en. a-ain. t4e +er* desi-nation of t4e appointment of pri+ate respondent as Aa!tin-B unit mana-er ob+ious * imp ies a temporar* emp o*ment status 34i!4 ma* be made permanent on * upon !omp ian!e 3it4 !ompan* standards su!4 as t4ose enumerated under Se!' 9 of t4e mana-ement !ontra!t'[9] On t4e matter of pa*ment of 3a-es. petitioner points out t4at respondent 3as !ompensated stri!t * on !ommission basis. t4e amount of 34i!4 3as tota * dependent on 4is tota output' %ut. t4e mana-er5s !ontra!t spea"s different *' T4us @ 4' 'erformance Requirements.& To maintain *our appointment as A!tin- 0nit 7ana-er *ou must meet t4e fo o3in- manpo3er and produ!tion re;uirements= Guarter A!ti+e $a endar Hear ,rodu!tion A-ents $umu ati+e FH, ,rodu!tion > ) 4 8 ,1>8.((( >8(.((( )78.((( 8((.(((

1 > ) 4

ST ND RD TC

8'4 %nit #evelo"ment (inancin! )%#(*. @ As an A!tin- 0nit 7ana-er *ou s4a be -i+en durin- t4e first 1> mont4s of *our appointment a finan!ia assistan!e 34i!4 is !omposed of t3o parts= 8'4'1 Free ,ortion amountin- to ,)(( per mont4. sub#e!t to *our meetin- pres!ribed minimum performan!e re;uirement on manpo3er and premium produ!tion' T4e free portion is not pa*ab e

b* *ou' 8'4'> Va idate ,ortion amountin- to ,1.>(( per mont4. a so sub#e!t to meetin- t4e same pres!ribed minimum performan!e re;uirements on manpo3er and premium produ!tion' T4e +a Idated portion is an ad+an!e a-ainst e:pe!ted !ompensation durin- t4e 0DF period and t4ereafter as ma* be ne!essar*' T4e abo+e pro+isions un;uestionab * demonstrate t4at t4e performan!e re;uirement imposed on De os Re*es 3as app i!ab e quarterly 34i e 4is entit ement to t4e free portion /,)((2 and t4e +a idated portion /,1.>((2 3as monthly startin- on t4e first mont4 of t4e t3e +e /1>2 mont4s of t4e appointment' T4us. it 4as to be admitted t4at e+en before t4e end of t4e first ;uarter and prior to t4e so&!a ed ;uarter * performan!e e+a uation. pri+ate respondent 3as a read* entit ed to be paid bot4 t4e free and +a idated portions of t4e 0DF e+er* mont4 be!ause 4is produ!tion performan!e !ou d not be determined unti after t4e apse of t4e ;uarter in+o +ed' T4is indi!ates ;uite ! ear * t4at t4e unit mana-er5s ;uarter * performan!e 4ad no bearin- at a on 4is entit ement at east to t4e free portion of t4e 0DF 34i!4 for a intents and purposes !omprised t4e sa ar* re-u ar * paid to 4im b* petitioner' T4us it !annot be +a id * ! aimed t4at t4e finan!ia assistan!e !onsistin- of t4e free portion of t4e 0DF 3as pure * dependent on t4e premium produ!tion of t4e a-ent' %e t4at as it ma*. it is 3ort4 !onsiderin- t4at t4e pa*ment of !ompensation b* 3a* of !ommission does not mi itate a-ainst t4e !on! usion t4at pri+ate respondent 3as an emp o*ee of petitioner' 0nder Art' 97 of t4e Labor $ode. A3a-eB s4a mean A4o3e+er desi-nated. !apab e of bein- e:pressed in terms of mone*. 34et4er fi:ed or as!ertained on a time. tas". pri!e or !ommission basis : : : :B [10] As to t4e matter in+o +in- t4e po3er of dismissa and !ontro b* t4e emp o*er. t4e atter of 34i!4 is t4e most important of t4e test. petitioner asserts t4at its termination of De os Re*es 3as but an e:er!ise of its in4erent ri-4t as prin!ipa under t4e !ontra!ts and t4at t4e ru es and -uIde ines it set fort4 in t4e !ontra!t !annot. b* an* stret!4 of ima-ination. be deemed as an e:er!ise of !ontro o+er t4e pri+ate respondent as t4ese 3ere mere * dire!ti+es t4at fi:ed t4e desired resu t 3it4out di!tatin- t4e means or met4od to be emp o*ed in attainin- it' T4e fo o3in- fa!tua findin-s of t4e NLR$[11] 4o3e+er !ontradi!t su!4 ! aims=

A perusa of t4e appointment of !omp ainant as A!tin- 0nit 7ana-er re+ea s t4at= 1' $omp ainant 3as to Ae:! usi+e *B ser+e respondent !ompan*' T4us it is pro+Ided= : : : 7''7 Ot4er !auses of Termination= T4is Appointment ma* i"e3ise be terminated for an* of t4e fo o3in!auses= : : : 7''7''>' Hour enterin- t4e ser+i!e of t4e -o+ernment or anot4er ife insuran!e !ompan*E 7''7'')' Hour a!!eptin- a mana-eria or super+isor* position in an* firm doin- business in t4e ,4i ippines 3it4out t4e 3ritten !onsent of t4e $ompan*E : : : >' $omp ainant 3as re;uired to meet !ertain manpo3er and produ!tion quotas' )' Respondent /4erein petitioner2 !ontro ed t4e assi-nment and remo+a of so i!itin- a-ents to and from !omp ainant5s unit. t4us= : : : 7''>' Assi-nment of A-ents= A-ents re!ruited and trained b* *ou s4a be atta!4ed to *our unit un ess for reasons of $ompan* po i!*. no su!4 assi-nment s4ou d be made' T4e $ompan* retains t4e e:! usi+e ri-4t to assi-n ne3 so i!itin- a-ents appointed and assi-ned to t4e saId unit :::: It 3ou d not be amiss to state t4e respondent5s dut* to !o e!t t4e !ompan*5s premiums usin- !ompan* re!eipts under Se!' 7'4 of t4e mana-ement !ontra!t is furt4er e+Iden!e of petitioner5s !ontro o+er respondent. t4us= :::: 7'4 Acce"tance and Remittance of 'remiums' @ : : : : t4e $ompan* 4ereb* aut4ori?es *ou to a!!ept and re!ei+e sums of mone* in pa*ment of premiums. oans. deposits on app i!ations. 3it4 or 3it4out interest. due from po i!* 4o ders and app i!ants for insuran!e. and t4e i"e. spe!ia * from po i!*4o ders of business so i!ited and so d b* t4e a-ents atta!4ed to *our unit pro+Ided 4o3e+er. t4at a su!4 pa*ments s4a be du * re!eipted b* *ou on t4e !orrespondin- $ompan*5s AA-ents5 Re!eiptB to be pro+Ided *ou for t4is purpose and to be !o+ered b* su!4 ru es and a!!ountinre-u ations t4e $ompan* ma* issue from time to time on t4e matter' ,a*ments re!ei+ed b* *ou s4a be turned o+er to t4e $ompan*5s desi-nated Distri!t or Ser+i!e Offi!e ! er" or dire!t * to t4e Come Offi!e not ater t4an t4e ne:t 3or"in- da* from re!eipt t4ereof : : : :

,etitioner 3ou d 4a+e us app * our ru in- in Insular Life Assurance Co., Ltd. v. NLRC and Basiao [12] to t4e instant !ase under t4e do!trine of stare decisis. postu atin- t4at bot4 !ases in+o +e parties simi ar * situated and fa!ts 34i!4 are a most Identi!a ' %ut 3e are not !on+in!ed t4at t4e !ited !ase is on a fours 3it4 t4e !ase at bar' In Basiao. t4e a-ent 3as appointed A-en!* 7ana-er under an A-en!* 7ana-er $ontra!t' To imp ement 4is end of t4e a-reement. 7e e!io %asiao or-ani?ed an a-en!* offi!e to 34i!4 4e -a+e t4e name 7' %asiao and Asso!iates' T4e A!ency &ana!er Contract pra!ti!a * !ontained t4e same terms and !onditions as t4e A-en!* $ontra!t ear ier entered into. and t4e $ourt obser+ed t4at Adra3n from t4e terms of t4e !ontra!t t4e* 4ad entered into. /34i!42 eit4er e:press * or b* ne!essar* imp i!ation. %asiao /3as2 made t4e master of 4is o3n time and se inmet4ods. eft to 4is o3n #ud-ment t4e time. p a!e and means of so i!itininsuran!e. set no a!!omp is4ment quotas and !ompensated 4im on t4e bases of resu ts obtained' Ce 3as not bound to obser+e an* s!4edu e of 3or"in- 4ours or report to an* re-u ar stationE 4e !ou d see" and 3or" on 4is prospe!ts an*34ere and an*time 4e !4ose to and 3as free to adopt t4e se in- met4ods 4e deemed most effe!ti+e'B 0pon t4ese premises. %asiao 3as !onsidered as a-ent @ an independent !ontra!tor @ of petitioner INS0LAR LIF1' 0n i"e %asiao. 4erein respondent De os Re*es 3as appointed Actin! %nit &ana!er. not a-en!* mana-er' T4ere is not e+iden!e t4at to imp ement 4is ob i-ations under t4e mana-ement !ontra!t. De os Re*es 4ad or-ani?ed an offi!e' ,etitioner in fa!t 4as admitted t4at it pro+Ided De os Re*es a p a!e and a tab e at its offi!e 34ere 4e reported for and 3or"ed 34ene+er 4e 3as not out in t4e fie d' , a!ed under petitioner5s $ebu Distri!t Ser+i!e Offi!e. t4e unit 3as -i+en a name b* petitioner @ De os Re*es and Asso!iates @ and assi-ned $ode No' 1178) and Re!ruitment No' 1(9)9D' 0nder t4e mana-ers4ip !ontra!t. De os Re*es 3as ob i-ed to 3or" e:! usi+e * for petitioner in ife insuran!e so i!itation and 3as imposed premium produ!tion quotas' Of !ourse. t4e a!tin- unit mana-er !ou d not under3rite ot4er ines of insuran!e be!ause 4is ,ermanent $ertifi!ate of Aut4orit* 3as for ife insuran!e on * and for no ot4er' Ce 3as pros!ribed from a!!eptin- a mana-eria or super+isor* position in an* ot4er offi!e in! udin- t4e -o+ernment 3it4out t4e 3ritten !onsent of petitioner' De os Re*es !ou d on * be promoted to permanent

unit mana-er if 4e met !ertain re;uirements and 4is promotion 3as re!ommended b* t4e petitioner5s Distri!t 7ana-er and Re-iona 7ana-er and appro+ed b* its Di+ision 7ana-er' As A!tin- 0nit 7ana-er. De os Re*es performed fun!tions be*ond mere so i!itation of insuran!e business for petitioner' As found b* t4e NLR$. 4e e:er!ised administrati+e fun!tions 34i!4 3ere ne!essar* and benefi!ia to t4e business of INS0LAR LIF1' In +reat 'acific Life Insurance Com"any v. NLRC [13] 34i!4 is ! oser in app i!ation t4at Basiao to t4is present !ontro+ers*. 3e found t4at At4e re ations4ips of t4e Rui? brot4ers and Irepa ife 3ere t4ose of emp o*er& emp o*ee' First. t4eir 3or" at t4e time of t4eir dismissa as ?one super+isor and distri!t mana-er 3as ne!essar* and desirab e to t4e usua business of t4e insuran!e !ompan*' T4e* 3ere entrusted 3it4 super+isor*. sa es and ot4er fun!tions to -uard Irepa ife5s business interests and to brin- in more ! ients to t4e !ompan*. and e+en 3it4 administrati+e fun!tions to ensure t4at a !o e!tions. reports and data are fait4fu * brou-4t to t4e !ompan* : : : : A !ursor* readin- of t4eir respe!ti+e fun!tions as enumerated in t4eir !ontra!ts re+ea s t4at t4e !ompan* pra!ti!a * di!tates t4e manner b* 34i!4 t4eir #obs are to be !arried out : : : :B <e need e aborate no furt4er' 1:! usi+it* of ser+i!e. !ontro of assi-nments and remo+a of a-ents under pri+ate respondent5s unit. !o e!tion of premiums. furnis4in- of !ompan* fa!i ities and materia s as 3e as !apita des!ribed as 0nit De+e opment Fund are but 4a mar"s of t4e mana-ement s*stem in 34i!4 4erein pri+ate respondent 3or"ed' T4is obtainin-. t4ere is no es!apin- t4e !on! usion t4at pri+ate respondent ,anta eon de os Re*es 3as an emp o*ee of 4erein petitioner' 45EREFORE. t4e petition of Insu ar Life Assuran!e $ompan*. Ltd'. is D1NI1D and t4e De!ision of t4e Nationa Labor Re ations $ommission dated ) 7ar!4 1998 and its Order of 9 Apri 1999 sustainin- it are AFFIR71D' Let t4is !ase be R17AND1D to t4e Labor Arbiter a quo 34o is dire!ted to 4ear and dispose of t4is !ase 3it4 de iberate dispat!4 in i-4t of t4e +ie3s e:pressed 4erein' SO ORDERED. #avide, ,,., !on!ur. ,r. )Chairman*, -itu!, 'an!ani an and .uisum in!,

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 84484 November 15, 1989 INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION !" MELECIO BASIAO, respondents. Tirol & Tirol for petitioner. Enojas, Defensor & Teodosio Cabado Law Offices for private respondent. NAR#ASA, J.: On ul! ", #$%&, Insular 'ife (ssurance )o., 'td. *hereinafter si+pl! called the )o+pan!, and Melecio T. -asiao entered into a contract 1 b! .hich/ #. -asiao .as 0authori1ed to solicit .ithin the Philippines applications for insurance policies and annuities in accordance .ith the e2istin3 rules and re3ulations0 of the )o+pan!4 ". he .ould receive 0co+pensation, in the for+ of co++issions ... as provided in the Schedule of )o++issions0 of the contract to 0constitute a part of the consideration of ... *said, a3ree+ent40 and 5. the 0rules in ... *the )o+pan!6s, Rate -oo7 and its (3ent6s Manual, as .ell as all its circulars ... and those .hich +a! fro+ ti+e to ti+e be pro+ul3ated b! it, ...0 .ere +ade part of said contract. The contract also contained, a+on3 others, provisions 3overnin3 the relations of the parties, the duties of the (3ent, the acts prohibited to hi+, and the +odes of ter+ination of the a3ree+ent, viz./ R8'(TION 9IT: T:8 )OMP(N;. The (3ent shall be free to e2ercise his o.n <ud3+ent as to ti+e, place and +eans of solicitin3 insurance. Nothin3 herein contained shall therefore be construed to create the relationship of e+plo!ee and e+plo!er bet.een the (3ent and the )o+pan!. :o.ever, the (3ent shall observe and confor+ to all rules and re3ulations .hich the )o+pan! +a! fro+ ti+e to ti+e prescribe.

I''8=(' (ND >N8T:I)(' PR()TI)8S. The (3ent is prohibited fro+ 3ivin3, directl! or indirectl!, rebates in an! for+, or fro+ +a7in3 an! +isrepresentation or over?sellin3, and, in 3eneral, fro+ doin3 or co++ittin3 acts prohibited in the (3ent6s Manual and in circulars of the Office of the Insurance )o++issioner. T8RMIN(TION. The )o+pan! +a! ter+inate the contract at .ill, .ithout an! previous notice to the (3ent, for or on account of ... *e2plicitl! specified causes,. ... 8ither part! +a! ter+inate this contract b! 3ivin3 to the other notice in .ritin3 to that effect. It shall beco+e ipso facto cancelled if the Insurance )o++issioner should revo7e a )ertificate of (uthorit! previousl! issued or should the (3ent fail to rene. his e2istin3 )ertificate of (uthorit! upon its e2piration. The (3ent shall not have an! ri3ht to an! co++ission on rene.al of pre+iu+s that +a! be paid after the ter+ination of this a3ree+ent for an! cause .hatsoever, e2cept .hen the ter+ination is due to disabilit! or death in line of service. (s to co++ission correspondin3 to an! balance of the first !ear6s pre+iu+s re+ainin3 unpaid at the ter+ination of this a3ree+ent, the (3ent shall be entitled to it if the balance of the first !ear pre+iu+ is paid, less actual cost of collection, unless the ter+ination is due to a violation of this contract, involvin3 cri+inal liabilit! or breach of trust. (SSI=NM8NT. No (ssi3n+ent of the (3enc! herein created or of co++issions or other co+pensations shall be valid .ithout the prior consent in .ritin3 of the )o+pan!. ... So+e four !ears later, in (pril #$@", the parties entered into another contract A an (3enc! Mana3er6s )ontract A and to i+ple+ent his end of it -asiao or3ani1ed an a3enc! or office to .hich he 3ave the na+e M. -asiao and (ssociates, .hile concurrentl! fulfillin3 his co++it+ents under the first contract .ith the )o+pan!. $ In Ma!, #$@$, the )o+pan! ter+inated the (3enc! Mana3er6s )ontract. (fter vainl! see7in3 a reconsideration, -asiao sued the )o+pan! in a civil action and this, he .as later to clai+, pro+pted the latter to ter+inate also his en3a3e+ent under the first contract and to stop pa!+ent of his co++issions startin3 (pril #, #$&B. % -asiao thereafter filed .ith the then Ministr! of 'abor a co+plaint 4 a3ainst the )o+pan! and its president. 9ithout contestin3 the ter+ination of the first contract,

the co+plaint sou3ht to recover co++issions alle3edl! unpaid thereunder, plus attorne!6s fees. The respondents disputed the Ministr!6s <urisdiction over -asiao6s clai+, assertin3 that he .as not the )o+pan!6s e+plo!ee, but an independent contractor and that the )o+pan! had no obli3ation to hi+ for unpaid co++issions under the ter+s and conditions of his contract. 5 The 'abor (rbiter to .ho+ the case .as assi3ned found for -asiao. :e ruled that the under.ritin3 a3ree+ent had established an e+plo!er?e+plo!ee relationship bet.een hi+ and the )o+pan!, and this conferred <urisdiction on the Ministr! of 'abor to ad<udicate his clai+. Said official6s decision directed pa!+ent of his unpaid co++issions 0... eCuivalent to the balance of the first !ear6s pre+iu+ re+ainin3 unpaid, at the ti+e of his ter+ination, of all the insurance policies solicited b! ... *hi+, in favor of the respondent co+pan! ...0 plus #BD attorne!6s fees. & This decision .as, on appeal b! the )o+pan!, affir+ed b! the National 'abor Relations )o++ission. ' :ence, the present petition for certiorari and prohibition. The chief issue here is one of <urisdiction/ .hether, as -asiao asserts, he had beco+e the )o+pan!6s e+plo!ee b! virtue of the contract invo7ed b! hi+, thereb! placin3 his clai+ for unpaid co++issions .ithin the ori3inal and e2clusive <urisdiction of the 'abor (rbiter under the provisions of Section "#@ of the 'abor )ode, 8 or, contraril!, as the )o+pan! .ould have it, that under said contract -asiao6s status .as that of an independent contractor .hose clai+ .as thus co3ni1able, not b! the 'abor (rbiter in a labor case, but b! the re3ular courts in an ordinar! civil action. The )o+pan!6s thesis, that no e+plo!er?e+plo!ee relation in the le3al and 3enerall! accepted sense e2isted bet.een it and -asiao, is dra.n fro+ the ter+s of the contract the! had entered into, .hich, either e2pressl! or b! necessar! i+plication, +ade -asiao the +aster of his o.n ti+e and sellin3 +ethods, left to his <ud3+ent the ti+e, place and +eans of solicitin3 insurance, set no acco+plish+ent Cuotas and co+pensated hi+ on the basis of results obtained. :e .as not bound to observe an! schedule of .or7in3 hours or report to an! re3ular station4 he could see7 and .or7 on his prospects an!.here and at an!ti+e he chose to, and .as free to adopt the sellin3 +ethods he dee+ed +ost effective. 9ithout den!in3 that the above .ere indeed the e2pressed i+plicit conditions of -asiao6s contract .ith the )o+pan!, the respondents contend that the! do not constitute the decisive deter+inant of the nature of his en3a3e+ent, invo7in3 precedents to the effect that the critical feature distin3uishin3 the status of an e+plo!ee fro+ that of an independent contractor is control, that is, .hether or not

the part! .ho en3a3es the services of another has the po.er to control the latter6s conduct in renderin3 such services. Pursuin3 the ar3u+ent, the respondents dra. attention to the provisions of -asiao6s contract obli3in3 hi+ to 0... observe and confor+ to all rules and re3ulations .hich the )o+pan! +a! fro+ ti+e to ti+e prescribe ...,0 as .ell as to the fact that the )o+pan! prescribed the Cualifications of applicants for insurance, processed their applications and deter+ined the a+ounts of insurance cover to be issued as indicative of the control, .hich +ade -asiao, in le3al conte+plation, an e+plo!ee of the )o+pan!. 9 It is true that the 0control test0 e2pressed in the follo.in3 pronounce+ent of the )ourt in the #$E% case of Viana vs. Alejo Al-La adan 1( ... In deter+inin3 the e2istence of e+plo!er?e+plo!ee relationship, the follo.in3 ele+ents are 3enerall! considered, na+el!/ *#, the selection and en3a3e+ent of the e+plo!ee4 *", the pa!+ent of .a3es4 *5, the po.er of dis+issal4 and *F, the po.er to control the e+plo!ees6 conduct A althou3h the latter is the +ost i+portant ele+ent *5E (+. ur. FFE,. ... has been follo.ed and applied in later cases, so+e fairl! recent. 11 Indeed, it is .ithout Cuestion a valid test of the character of a contract or a3ree+ent to render service. It should, ho.ever, be obvious that not ever! for+ of control that the hirin3 part! reserves to hi+self over the conduct of the part! hired in relation to the services rendered +a! be accorded the effect of establishin3 an e+plo!er? e+plo!ee relationship bet.een the+ in the le3al or technical sense of the ter+. ( line +ust be dra.n so+e.here, if the reco3ni1ed distinction bet.een an e+plo!ee and an individual contractor is not to vanish alto3ether. Realisticall!, it .ould be a rare contract of service that 3ives untra++elled freedo+ to the part! hired and esche.s an! intervention .hatsoever in his perfor+ance of the en3a3e+ent. 'o3icall!, the line should be dra.n bet.een rules that +erel! serve as 3uidelines to.ards the achieve+ent of the +utuall! desired result .ithout dictatin3 the +eans or +ethods to be e+plo!ed in attainin3 it, and those that control or fi2 the +ethodolo3! and bind or restrict the part! hired to the use of such +eans. The first, .hich ai+ onl! to pro+ote the result, create no e+plo!er?e+plo!ee relationship unli7e the second, .hich address both the result and the +eans used to achieve it. The distinction acCuires particular relevance in the case of an enterprise affected .ith public interest, as is the business of insurance, and is on that account sub<ect to re3ulation b! the State .ith respect, not onl! to the relations bet.een insurer and insured but also to the internal affairs of the insurance co+pan!. 1$ Rules and re3ulations 3overnin3 the conduct of the business are

provided for in the Insurance )ode and enforced b! the Insurance )o++issioner. It is, therefore, usual and e2pected for an insurance co+pan! to pro+ul3ate a set of rules to 3uide its co++ission a3ents in sellin3 its policies that the! +a! not run afoul of the la. and .hat it reCuires or prohibits. Of such a character are the rules .hich prescribe the Cualifications of persons .ho +a! be insured, sub<ect insurance applications to processin3 and approval b! the )o+pan!, and also reserve to the )o+pan! the deter+ination of the pre+iu+s to be paid and the schedules of pa!+ent. None of these reall! invades the a3ent6s contractual prero3ative to adopt his o.n sellin3 +ethods or to sell insurance at his o.n ti+e and convenience, hence cannot <ustifiabl! be said to establish an e+plo!er? e+plo!ee relationship bet.een hi+ and the co+pan!. There is no dearth of authorit! holdin3 persons si+ilarl! placed as respondent -asiao to be independent contractors, instead of e+plo!ees of the parties for .ho+ the! .or7ed. In !afinco Tradin Corporation vs. Ople,1% the )ourt ruled that a person en3a3ed to sell soft drin7s for another, usin3 a truc7 supplied b! the latter, but .ith the ri3ht to e+plo! his o.n .or7ers, sell accordin3 to his o.n +ethods sub<ect onl! to prearran3ed routes, observin3 no .or7in3 hours fi2ed b! the other part! and obli3ed to secure his o.n licenses and defra! his o.n sellin3 e2penses, all in consideration of a peddler6s discount 3iven b! the other part! for at least "EB cases of soft drin7s sold dail!, .as not an e+plo!ee but an independent contractor. In "nvest#ent $lannin Corporation of t%e $%ilippines &s. 'ocial 'ec&rit( '(ste# 14 a case al+ost on all fours .ith the present one, this )ourt held that there .as no e+plo!er?e+plo!ee relationship bet.een a co++ission a3ent and an invest+ent co+pan!, but that the for+er .as an independent contractor .here said a3ent and others si+ilarl! placed .ere/ *a, paid co+pensation in the for+ of co++issions based on percenta3es of their sales, an! balance of co++issions earned bein3 pa!able to their le3al representatives in the event of death or re3istration4 *b, reCuired to put up perfor+ance bonds4 *c, sub<ect to a set of rules and re3ulations 3overnin3 the perfor+ance of their duties under the a3ree+ent .ith the co+pan! and ter+ination of their services for certain causes4 *d, not reCuired to report for .or7 at an! ti+e, nor to devote their ti+e e2clusivel! to .or7in3 for the co+pan! nor to sub+it a record of their activities, and .ho, finall!, shouldered their o.n sellin3 and transportation e2penses. More recentl!, in 'ara vs. )L*C, 15 it .as held that one .ho had been en3a3ed b! a rice +iller to bu! and sell rice and pala! .ithout co+pensation e2cept a certain percenta3e of .hat he .as able to bu! or sell, did .or7 at his o.n pleasure

.ithout an! supervision or control on the part of his principal and relied on his o.n resources in the perfor+ance of his .or7, .as a plain co++ission a3ent, an independent contractor and not an e+plo!ee. The respondents li+it the+selves to pointin3 out that -asiao6s contract .ith the )o+pan! bound hi+ to observe and confor+ to such rules and re3ulations as the latter +i3ht fro+ ti+e to ti+e prescribe. No sho.in3 has been +ade that an! such rules or re3ulations .ere in fact pro+ul3ated, +uch less that an! rules e2isted or .ere issued .hich effectivel! controlled or restricted his choice of +ethods A or the +ethods the+selves A of sellin3 insurance. (bsent such sho.in3, the )ourt .ill not speculate that an! e2ceptions or Cualifications .ere i+posed on the e2press provision of the contract leavin3 -asiao 0... free to e2ercise his o.n <ud3+ent as to the ti+e, place and +eans of solicitin3 insurance.0 The 'abor (rbiter6s decision +a7es reference to -asiao6s clai+ of havin3 been connected .ith the )o+pan! for t.ent!?five !ears. 9hatever this is +eant to i+pl!, the obvious repl! .ould be that .hat is 3er+ane here is -asiao6s status under the contract of ul! ", #$%&, not the len3th of his relationship .ith the )o+pan!. The )ourt, therefore, rules that under the contract invo7ed b! hi+, -asiao .as not an e+plo!ee of the petitioner, but a co++ission a3ent, an independent contractor .hose clai+ for unpaid co++issions should have been liti3ated in an ordinar! civil action. The 'abor (rbiter erred in ta7in3 co3ni1ance of, and ad<udicatin3, said clai+, bein3 .ithout <urisdiction to do so, as did the respondent N'R) in affir+in3 the (rbiter6s decision. This conclusion renders it unnecessar! and pre+ature to consider -asiao6s clai+ for co++issions on its +erits. 9:8R8FOR8, the appealed Resolution of the National 'abor Relations )o++ission is set aside, and that co+plaint of private respondent Melecio T. -asiao in R(- )ase No. VI?BB#B?&5 is dis+issed. No pronounce+ent as to costs. SO ORD8R8D. Cr&z, +anca(co, +ri,o-A-&ino, and !edialdea, ..., conc&r. Republic of the Philippines SUPREME COURT Manila S8)OND DIVISION G.R. No). 1&9$95*9& November $(, $((&

REMINGTON INDUSTRIAL SALES CORPORATION, Petitioner, vs. ERLINDA CASTANEDA, Respondent. D8)ISION PUNO, J.: -efore this )ourt is the Petition for Revie. on )ertiorari1 filed b! Re+in3ton Industrial Sales )orporation to reverse and set aside the Decision > of the Fourth Division of the )ourt of (ppeals in )(?=.R. SP Nos. %FE@@ and %&F@@, dated anuar! 5#, "BBE, .hich dis+issed petitionerGs consolidated petitions for certiorari, and its subseCuent Resolution, ) dated (u3ust ##, "BBE, .hich denied petitionerGs +otion for reconsideration. The antecedent facts of the case, as narrated b! the )ourt of (ppeals, are as follo.s/ The present controvers! be3an .hen private respondent, 8rlinda )astaneda *08rlinda0, instituted on March ", #$$& a co+plaint for ille3al dis+issal, underpa!+ent of .a3es, non?pa!+ent of overti+e services, non?pa!+ent of service incentive leave pa! and non?pa!+ent of #5th +onth pa! a3ainst Re+in3ton before the N'R), National )apital Re3ion, Hue1on )it!. The co+plaint i+pleaded Mr. (ntonio Tan in his capacit! as the Mana3in3 Director of Re+in3ton. 8rlinda alle3ed that she started .or7in3 in (u3ust #$&5 as co+pan! coo7 .ith a salar! of Php F,BBB.BB for Re+in3ton, a corporation en3a3ed in the tradin3 business4 that she .or7ed for si2 *%, da!s a .ee7, startin3 as earl! as %/BB a.+. because she had to do the +ar7etin3 and .ould end at around E/5B p.+., or even later, after +ost of the e+plo!ees, if not all, had left the co+pan! pre+ises4 that she continuousl! .or7ed .ith Re+in3ton until she .as uncere+oniousl! prevented fro+ reportin3 for .or7 .hen Re+in3ton transferred to a ne. site in 8dsa, )aloocan )it!. She averred that she reported for .or7 at the ne. site in )aloocan )it! on anuar! #E, #$$&, onl! to be infor+ed that Re+in3ton no lon3er needed her services. 8rlinda believed that her dis+issal .as ille3al because she .as not 3iven the notices reCuired b! la.4 hence, she filed her co+plaint for reinstate+ent .ithout loss of seniorit! ri3hts, salar! differentials, service incentive leave pa!, #5th +onth pa! and #BD attorne!Gs fees. Re+in3ton denied that it dis+issed 8rlinda ille3all!. It posited that 8rlinda .as a do+estic helper, not a re3ular e+plo!ee4 8rlinda .or7ed as a coo7 and this <ob had nothin3 to do .ith Re+in3tonGs business of tradin3 in construction or

hard.are +aterials, steel plates and .ire rope products. It also contended that contrar! to 8rlindaGs alle3ations that the *sic, she .or7ed for ei3ht *&, hours a da!, 8rlindaGs dut! .as +erel! to coo7 lunch and 0+erienda0, after .hich her ti+e .as hers to spend as she pleased. Re+in3ton also +aintained that it did not e2ercise an! de3ree of control andIor supervision over 8rlindaGs .or7 as her onl! concern .as to ensure that the e+plo!eesG lunch and 0+erienda0 .ere available and served at the desi3nated ti+e. Re+in3ton li7e.ise belied 8rlindaGs assertion that her .or7 e2tended be!ond E/BB p.+. as she could onl! leave after all the e+plo!ees had 3one. The truth, accordin3 to Re+in3ton, is that 8rlinda did not have to punch an! ti+e card in the .a! that other e+plo!ees of Re+in3ton did4 she .as free to roa+ around the co+pan! pre+ises, read +a3a1ines, and to even nap .hen not doin3 her assi3ned chores. Re+in3ton averred that the ille3al dis+issal co+plaint lac7ed factual and le3al bases. (lle3edl!, it .as 8rlinda .ho refused to report for .or7 .hen Re+in3ton +oved to a ne. location in )aloocan )it!. In a Decision4 dated anuar! #$, #$$$, the labor arbiter dis+issed the co+plaint and ruled that the respondent .as a do+estic helper under the personal service of (ntonio Tan, findin3 that her .or7 as a coo7 .as not usuall! necessar! and desirable in the ordinar! course of trade and business of the petitioner corporation, .hich operated as a tradin3 co+pan!, and that the latter did not e2ercise control over her functions. On the issue of ille3al dis+issal, the labor arbiter found that it .as the respondent .ho refused to 3o .ith the fa+il! of (ntonio Tan .hen the corporation transferred office and that, therefore, respondent could not have been ille3all! dis+issed. >pon appeal, the National 'abor Relations )o++ission *N'R), rendered a Decision,8 dated Nove+ber "5, "BBB, reversin3 the labor arbiter, rulin3, vi1/ 9e are not inclined to uphold the declaration belo. that co+plainant is a do+estic helper of the fa+il! of (ntonio Tan. There .as no alle3ation b! respondent that co+plainant had ever .or7ed in the residence of Mr. Tan. 9hat is clear fro+ the facts narrated b! the parties is that co+plainant continuousl! did her <ob as a coo7 in the office of respondent servin3 the needed food for lunch and +erienda of the e+plo!ees. Thus, her .or7 as coo7 inured not for the benefit of the fa+il! +e+bers of Mr. Tan but solel! for the individual e+plo!ees of respondent. )o+plainant as an e+plo!ee of respondent co+pan! is even bolstered b! no less than the certification dated Ma! "5, #$$@ issued b! the corporate secretar! of the co+pan! certif!in3 that co+plainant is their bonafide e+plo!ee. This is a solid evidence .hich the 'abor (rbiter si+pl! brushed aside. -ut, such error .ould not be co++itted here as it .ould be at the hei3ht of in<ustice if .e are to declare that

co+plainant is a do+estic helper. )o+plainantGs .or7 schedule and bein3 paid a +onthl! salar! of PF,BBB.BB are clear indication that she is a co+pan! e+plo!ee .ho had been e+plo!ed to cater to the food needed b! the e+plo!ees .hich .ere bein3 provided b! respondent to for+ part of the benefit 3ranted the+. 9ith re3ard to the issue of ille3al dis+issal, .e believe that there is +ore reason to believe that co+plainant .as not dis+issed because alle3edl! she .as the one .ho refused to .or7 in the ne. office of respondent. :o.ever, co+plainantGs refusal to <oin the .or7force due to poor e!esi3ht could not be considered abandon+ent of .or7 or voluntar! resi3nation fro+ e+plo!+ent. >nder the 'abor )ode as a+ended, an e+plo!ee .ho reaches the a3e of si2t! !ears old *%B !ears, has the option to retire or to separate fro+ the service .ith pa!+ent of separation pa!Iretire+ent benefit. In this case, .e notice that co+plainant .as alread! %B !ears old at the ti+e she filed the co+plaint pra!in3 for separation pa! or retire+ent benefit and so+e +one! clai+s. -ased on (rticle "&@ of the 'abor )ode as a+ended, co+plainant is entitled to be paid her separation pa!Iretire+ent benefit eCuivalent to one?half *#I", +onth for ever! !ear of service. The a+ount of separation pa! .ould be based on the prescribed +ini+u+ .a3e at the ti+e of dis+issal since she .as then underpaid. In as +uch as co+plainant is underpaid of her .a3es, it behooves that she should be paid her salar! differential for the last three !ears prior to separationIretire+ent. 222 222 222 9:8R8FOR8, pre+ises considered, the assailed decision is hereb!, S8T (SID8, and a ne. one is hereb! entered orderin3 respondents to pa! co+plainant the follo.in3/ #. Salar! differential ? P#",B"#.#" ". Service Incentive 'eave Pa! ? ",%EB.BB 5. #5th Month Pa! differential ? #,BB#.@% F. Separation Pa!Iretire+ent benefit ? 5%,B@E.BB Total ? PE#,@F@.&& SO ORD8R8D. Petitioner +oved to reconsider this decision but the N'R) denied the +otion. This denial of its +otion pro+pted petitioner to file a Petition for )ertiorari 9 .ith the )ourt of (ppeals, doc7eted as )(?=.R. SP No. %FE@@, on Ma! F, "BB#, i+putin3 3rave abuse of discretion a+ountin3 to lac7 or e2cess of <urisdiction on the part of

the N'R) in *#, reversin3 in toto the decision of the labor arbiter, and *", a.ardin3 in favor of respondent salar! differential, service incentive leave pa!, #5th +onth pa! differential and separation benefits in the total su+ of PE#,@F@.&&. 9hile the petition .as pendin3 .ith the )ourt of (ppeals, the N'R) rendered another Decision7 in the sa+e case on (u3ust "$, "BB#. :o. and .h! another decision .as rendered is e2plained in that decision as follo.s/ On Ma! #@, "BB#, co+plainant filed a Manifestation pra!in3 for a resolution of her Motion for Reconsideration and, in support thereof, alle3es that, so+eti+e Dece+ber #&, "BBB, she +ailed her Manifestation and Motion for Reconsideration re3istered as Re3istered )ertificate No. #&&&FF4 and that the said +ail .as received b! the N'R), throu3h a certain Roland :ernande1, on Dece+ber "%, "BBB. )ertifications to this effect .as issued b! the Post+aster of the Sta. Mesa Post Office bearin3 the date Ma! ##, "BB# *(nne2es ( and -, )o+plainantGs Manifestation,. 8vidence in support of co+plainantGs havin3 actuall! filed a Motion for Reconsideration .ithin the re3le+entar! period havin3 been sufficientl! established, a deter+ination of its +erits is thus, in order. On the +erits, the N'R) found respondentGs +otion for reconsideration +eritorious leadin3 to the issuance of its second decision .ith the follo.in3 dispositive portion/ 9:8R8FOR8, pre+ises considered, the decision dated Nove+ber "5, "BBB, is MODIFI8D b! increasin3 the a.ard of retire+ent pa! due the co+plainant in the total a+ount of SIJT; T9O T:O>S(ND FO>R :>NDR8D T:IRT;?S8V8N and EBI#BB *P%",F5@.EB,. (ll other +onetar! relief so ad<ud3ed therein are +aintained and li7e.ise +ade pa!able to the co+plainant. SO ORD8R8D. Petitioner challen3ed the second decision of the N'R), includin3 the resolution den!in3 its +otion for reconsideration, throu3h a second Petition for )ertiorariD filed .ith the )ourt of (ppeals, doc7eted as )(?=.R. SP No. %&F@@ and dated anuar! &, "BB", this ti+e i+putin3 3rave abuse of discretion a+ountin3 to lac7 of or e2cess of <urisdiction on the part of the N'R) in *#, issuin3 the second decision despite losin3 its <urisdiction due to the pendenc! of the first petition for certiorari .ith the )ourt of (ppeals, and *", assu+in3 it still had <urisdiction to issue the second decision not.ithstandin3 the pendenc! of the first petition for certiorari .ith the )ourt of (ppeals, that its second decision has no basis in la. since respondentGs +otion for reconsideration, .hich .as +ade the

basis of the second decision, .as not filed under oath in violation of Section #F, Rule VII9 of the Ne. Rules of Procedure of the N'R) and that it contained no certification as to .h! respondentGs +otion for reconsideration .as not decided on ti+e as also reCuired b! Section #B, Rule VI 1( and Section #E, Rule VII11 of the afore+entioned rules. >pon petitionerGs +otion, the )ourt of (ppeals ordered the consolidation of the t.o *", petitions, on anuar! "F, "BB", pursuant to Section @, par. b*5,, Rule 5 of the Revised Rules of the )ourt of (ppeals. It su++ari1ed the principal issues raised in the consolidated petitions as follo.s/ #. 9hether respondent is petitionerGs re3ular e+plo!ee or a do+estic helper4 ". 9hether respondent .as ille3all! dis+issed4 and 5. 9hether the second N'R) decision pro+ul3ated durin3 the pendenc! of the first petition for certiorari has basis in la.. On anuar! 5#, "BBE, the )ourt of (ppeals dis+issed the consolidated petitions for lac7 of +erit, findin3 no 3rave abuse of discretion on the part of the N'R) in issuin3 the assailed decisions. On the first issue, it upheld the rulin3 of the N'R) that respondent .as a re3ular e+plo!ee of the petitioner since the for+er .or7ed at the co+pan! pre+ises and catered not onl! to the personal co+fort and en<o!+ent of Mr. Tan and his fa+il!, but also to that of the e+plo!ees of the latter. It a3reed that petitioner en<o!s the prero3ative to control respondentGs conduct in underta7in3 her assi3ned .or7, particularl! the nature and situs of her .or7 in relation to the petitionerGs .or7force, thereb! establishin3 the e2istence of an e+plo!er?e+plo!ee relationship bet.een the+. On the issue of ille3al dis+issal, it ruled that respondent has attained the status of a re3ular e+plo!ee in her service .ith the co+pan!. It noted that the N'R) found that no less than the co+pan!Gs corporate secretar! certified that respondent is a bonafide co+pan! e+plo!ee and that she had a fi2ed schedule and routine of .or7 and .as paid a +onthl! salar! of PF,BBB.BB4 that she served .ith petitioner for #E !ears startin3 in #$&5, bu!in3 and coo7in3 food served to co+pan! e+plo!ees at lunch and #erienda4 and that this .or7 .as usuall! necessar! and desirable in the re3ular business of the petitioner. It held that as a re3ular e+plo!ee, she en<o!s the constitutionall! 3uaranteed ri3ht to securit! of tenure and that petitioner failed to dischar3e the burden of provin3 that her dis+issal on anuar! #E, #$$& .as for a <ust or authori1ed cause and that the +anner of dis+issal co+plied .ith the reCuire+ents under the la..

Finall!, on petitionerGs other ar3u+ents relatin3 to the alle3ed irre3ularit! of the second N'R) decision, i.e., the fact that respondentGs +otion for reconsideration .as not under oath and had no certification e2plainin3 .h! it .as not resolved .ithin the prescribed period, it held that such violations relate to procedural and non?<urisdictional +atters that cannot assu+e pri+ac! over the substantive +erits of the case and that the! do not constitute 3rave abuse of discretion a+ountin3 to lac7 or e2cess of <urisdiction that .ould nullif! the second N'R) decision. The )ourt of (ppeals denied petitionerGs contention that the N'R) lost its <urisdiction to issue the second decision .hen it received the order indicatin3 the )ourt of (ppealsG initial action on the first petition for certiorari that it filed. It ruled that the N'R)Gs action of issuin3 a decision in install+ents .as not prohibited b! its o.n rules and that the need for a second decision .as <ustified b! the fact that respondentGs o.n +otion for reconsideration re+ained unresolved in the first decision. Further+ore, it held that under Section @, Rule %E of the Revised Rules of )ourt,1> the filin3 of a petition for certiorari does not interrupt the course of the principal case unless a te+porar! restrainin3 order or a .rit of preli+inar! in<unction has been issued a3ainst the public respondent fro+ further proceedin3 .ith the case. Fro+ this decision, petitioner filed a +otion for reconsideration on Februar! "", "BBE, .hich the )ourt of (ppeals denied throu3h a resolution dated (u3ust ##, "BBE. :ence, the present petition for revie.. The petitioner raises the follo.in3 errors of la./ *#, the )ourt of (ppeals erred in affir+in3 the N'R)Gs rulin3 that the respondent .as petitionerGs re3ular e+plo!ee and not a do+estic helper4 *", the )ourt of (ppeals erred in holdin3 that petitioner .as 3uilt! of ille3al dis+issal4 and *5, the )ourt of (ppeals erred .hen it held that the issuance of the second N'R) decision is proper. The petition +ust fail. 9e affir+ that respondent .as a re3ular e+plo!ee of the petitioner and that the latter .as 3uilt! of ille3al dis+issal. -efore 3oin3 into the substantive +erits of the present controvers!, .e shall first resolve the propriet! of the issuance of the second N'R) decision. The petitioner contends that the respondentGs +otion for reconsideration, upon .hich the second N'R) decision .as based, .as not under oath and did not contain a certification as to .h! it .as not decided on ti+e as reCuired under the Ne. Rules of Procedure of the N'R). 1) Further+ore, the for+er also raises for the first ti+e the contention that respondentGs +otion .as filed be!ond the ten

*#B,?calendar da! period reCuired under the sa+e Rules, 14 since the latter received a cop! of the first N'R) decision on Dece+ber %, "BBB, and respondent filed her +otion onl! on Dece+ber #&, "BBB. Thus, accordin3 to petitioner, the respondentGs +otion for reconsideration .as a +ere scrap of paper and the second N'R) decision has no basis in la.. 9e do not a3ree. It is .ell?settled that the application of technical rules of procedure +a! be rela2ed to serve the de+ands of substantial <ustice, particularl! in labor cases. 18 'abor cases +ust be decided accordin3 to <ustice and eCuit! and the substantial +erits of the controvers!.19 Rules of procedure are but +ere tools desi3ned to facilitate the attain+ent of <ustice.17 Their strict and ri3id application, .hich .ould result in technicalities that tend to frustrate rather than pro+ote substantial <ustice, +ust al.a!s be avoided.1D This )ourt has consistentl! held that the reCuire+ent of verification is for+al, and not <urisdictional. Such reCuire+ent is +erel! a condition affectin3 the for+ of the pleadin3, non?co+pliance .ith .hich does not necessaril! render it fatall! defective. Verification is si+pl! intended to secure an assurance that the alle3ations in the pleadin3 are true and correct and not the product of the i+a3ination or a +atter of speculation, and that the pleadin3 is filed in 3ood faith.19 The court +a! order the correction of the pleadin3 if verification is lac7in3 or act on the pleadin3 althou3h it is not verified, if the attendin3 circu+stances are such that strict co+pliance .ith the rules +a! be dispensed .ith in order that the ends of <ustice +a! thereb! be served.>( (nent the ar3u+ent that respondentGs +otion for reconsideration, on .hich the N'R)Gs second decision .as based, .as filed out of ti+e, such issue .as onl! brou3ht up for the first ti+e in the instant petition .here no ne. issues +a! be raised b! a part! in his pleadin3s .ithout offendin3 the ri3ht to due process of the opposin3 part!. Nonetheless, the petitioner asserts that the respondent received a cop! of the N'R)Gs first decision on Dece+ber %, "BBB, and the +otion for reconsideration .as filed onl! on Dece+ber #&, "BBB, or t.o *", da!s be!ond the ten *#B,? calendar da! period reCuire+ent under the Ne. Rules of Procedure of the N'R) and should not be allo.ed.>1 This contention +ust fail. >nder (rticle ""5>> of the 'abor )ode, the decision of the N'R) shall be final and e2ecutor! after ten *#B, calendar da!s fro+ the receipt thereof b! the parties.

9hile it is an established rule that the perfection of an appeal in the +anner and .ithin the period prescribed b! la. is not onl! +andator! but <urisdictional, and failure to perfect an appeal has the effect of renderin3 the <ud3+ent final and e2ecutor!, it is eCuall! settled that the N'R) +a! disre3ard the procedural lapse .here there is an acceptable reason to e2cuse tardiness in the ta7in3 of the appeal.>) (+on3 the acceptable reasons reco3ni1ed b! this )ourt are *a, counsel6s reliance on the footnote of the notice of the decision of the 'abor (rbiter that 0the a33rieved part! +a! appeal. . . .ithin ten *#B, .or7in3 da!s04 >4 *b, funda+ental consideration of substantial <ustice4>8 *c, prevention of +iscarria3e of <ustice or of un<ust enrich+ent, as .here the tard! appeal is fro+ a decision 3rantin3 separation pa! .hich .as alread! 3ranted in an earlier final decision4 >9 and *d, special circu+stances of the case co+bined .ith its le3al +erits >7 or the a+ount and the issue involved.>D 9e hold that the particular circu+stances in the case at bar, in accordance .ith substantial <ustice, call for a liberali1ation of the application of this rule. Notabl!, respondentGs last da! for filin3 her +otion for reconsideration fell on Dece+ber #%, "BBB, .hich .as a Saturda!. In a nu+ber of cases, >9 .e have ruled that if the tenth da! for perfectin3 an appeal fell on a Saturda!, the appeal shall be +ade on the ne2t .or7in3 da!. The reason for this rulin3 is that on Saturda!s, the office of the N'R) and certain post offices are closed. 9ith all the +ore reason should this doctrine appl! to respondentGs filin3 of the +otion for reconsideration of her cause, .hich the N'R) itself found to be i+pressed .ith +erit. Indeed, technicalit! should not be per+itted to stand in the .a! of eCuitabl! and co+pletel! resolvin3 the ri3hts and obli3ations of the parties for the ends of <ustice are reached not onl! throu3h the speed! disposal of cases but, +ore i+portantl!, throu3h a +eticulous and co+prehensive evaluation of the +erits of a case. Finall!, as to petitionerGs ar3u+ent that the N'R) had alread! lost its <urisdiction to decide the case .hen it filed its petition for certiorari .ith the )ourt of (ppeals upon the denial of its +otion for reconsideration, suffice it to state that under Section @ of Rule %E)( of the Revised Rules of )ourt, the petition shall not interrupt the course of the principal case unless a te+porar! restrainin3 order or a .rit of preli+inar! in<unction has been issued a3ainst the public respondent fro+ further proceedin3 .ith the case. Thus, the +ere pendenc! of a special civil action for certiorari, in connection .ith a pendin3 case in a lo.er court, does not interrupt the course of the latter if there is no .rit of in<unction.)1 )learl!, there .as no 3rave abuse of discretion on the part of the N'R) in issuin3 its second decision .hich +odified the first, especiall! since it failed to consider the respondentGs +otion for reconsideration .hen it issued its first decision.

:avin3 resolved the procedural +atters, .e shall no. delve into the +erits of the petition to deter+ine .hether respondent is a do+estic helper or a re3ular e+plo!ee of the petitioner, and .hether the latter is 3uilt! of ille3al dis+issal. Petitioner relies heavil! on the affidavit of a certain Mr. (ntonio Tan and contends that respondent is the latterGs do+estic helper and not a re3ular e+plo!ee of the co+pan! since Mr. Tan has a separate and distinct personalit! fro+ the petitioner. It +aintains that it did not e2ercise control and supervision over her functions4 and that it operates as a tradin3 co+pan! and does not en3a3e in the restaurant business, and therefore respondentGs .or7 as a coo7, .hich .as not usuall! necessar! or desirable to its usual line of business or trade, could not +a7e her its re3ular e+plo!ee. This contention fails to i+press. In (pe2 Minin3 )o+pan!, Inc. v. N'R),)> this )ourt held that a househelper in the staff houses of an industrial co+pan! .as a re3ular e+plo!ee of the said fir+. 9e ratiocinated that/ >nder Rule JIII, Section #*b,, -oo7 5 of the 'abor )ode, as a+ended, the ter+s 0househelper0 or 0do+estic servant0 are defined as follo.s/ 0The ter+ KhousehelperG as used herein is s!non!+ous to the ter+ Kdo+estic servantG and shall refer to an! person, .hether +ale or fe+ale, .ho renders services in and about the e+plo!erGs ho+e and .hich services are usuall! necessar! or desirable for the +aintenance and en<o!+ent thereof, and +inisters e2clusivel! to the personal co+fort and en<o!+ent of the e+plo!erGs fa+il!.0 The fore3oin3 definition clearl! conte+plates such househelper or do+estic servant .ho is e+plo!ed in the e+plo!erGs ho+e to +inister e2clusivel! to the personal co+fort and en<o!+ent of the e+plo!erGs fa+il!. Such definition covers fa+il! drivers, do+estic servants, laundr! .o+en, !a!as, 3ardeners, housebo!s and si+ilar househelps. 222 222 222 The criteria is the personal co+fort and en<o!+ent of the fa+il! of the e+plo!er in the ho+e of said e+plo!er. 9hile it +a! be true that the nature of the .or7 of a househelper, do+estic servant or laundr!.o+an in a ho+e or in a co+pan! staffhouse +a! be si+ilar in nature, the difference in their circu+stances is that in the for+er instance the! are actuall! servin3 the fa+il! .hile in the latter case, .hether it is a corporation or a sin3le proprietorship en3a3ed in business or industr! or an! other a3ricultural or si+ilar pursuit, service is bein3 rendered in the staffhouses or .ithin the pre+ises of the business of the e+plo!er. In such

instance, the! are e+plo!ees of the co+pan! or e+plo!er in the business concerned entitled to the privile3es of a re3ular e+plo!ee. Petitioner contends that it is onl! .hen the househelper or do+estic servant is assi3ned to certain aspects of the business of the e+plo!er that such househelper or do+estic servant +a! be considered as such an e+plo!ee. The )ourt finds no +erit in +a7in3 an! such distinction. The +ere fact that the househelper or do+estic servant is .or7in3 .ithin the pre+ises of the business of the e+plo!er and in relation to or in connection .ith its business, as in its staffhouses for its 3uest or even for its officers and e+plo!ees, .arrants the conclusion that such househelper or do+estic servant is and should be considered as a re3ular e+plo!ee of the e+plo!er and not as a +ere fa+il! househelper or do+estic servant as conte+plated in Rule JIII, Section #*b,, -oo7 5 of the 'abor )ode, as a+ended. In the case at bar, the petitioner itself ad+its in its position paper )) that respondent .or7ed at the co+pan! pre+ises and her dut! .as to coo7 and prepare its e+plo!eesG lunch and #erienda. )learl!, the situs, as .ell as the nature of respondentGs .or7 as a coo7, .ho caters not onl! to the needs of Mr. Tan and his fa+il! but also to that of the petitionerGs e+plo!ees, +a7es her fall sCuarel! .ithin the definition of a re3ular e+plo!ee under the doctrine enunciated in the (pe2 Minin3 case. That she .or7s .ithin co+pan! pre+ises, and that she does not cater e2clusivel! to the personal co+fort of Mr. Tan and his fa+il!, is reflective of the e2istence of the petitionerGs ri3ht of control over her functions, .hich is the pri+ar! indicator of the e2istence of an e+plo!er?e+plo!ee relationship. Moreover, it is .ron3 to sa! that if the .or7 is not directl! related to the e+plo!er6s business, then the person perfor+in3 such .or7 could not be considered an e+plo!ee of the latter. The deter+ination of the e2istence of an e+plo!er?e+plo!ee relationship is defined b! la. accordin3 to the facts of each case, re3ardless of the nature of the activities involved. )4 Indeed, it .ould be the hei3ht of in<ustice if .e .ere to hold that despite the fact that respondent .as +ade to coo7 lunch and #erienda for the petitionerGs e+plo!ees, .hich .or7 ulti+atel! redounded to the benefit of the petitioner corporation, she .as +erel! a do+estic .or7er of the fa+il! of Mr. Tan. 9e note the findin3s of the N'R), affir+ed b! the )ourt of (ppeals, that no less than the co+pan!Gs corporate secretar! has certified that respondent is a bonafide co+pan! e+plo!ee4)8 she had a fi2ed schedule and routine of .or7 and .as paid a +onthl! salar! of PF,BBB.BB4)9 she served .ith the co+pan! for #E !ears startin3 in #$&5, bu!in3 and coo7in3 food served to co+pan! e+plo!ees at lunch and #erienda, and that this service .as a re3ular feature of e+plo!+ent

.ith the co+pan!.)7 Indubitabl!, the )ourt of (ppeals, as .ell as the N'R), correctl! held that based on the 3iven circu+stances, the respondent is a re3ular e+plo!ee of the petitioner./0wp%i/ :avin3 deter+ined that the respondent is petitionerGs re3ular e+plo!ee, .e no. proceed to ascertain the le3alit! of her dis+issal fro+ e+plo!+ent. Petitioner contends that there .as abandon+ent on respondentGs part .hen she refused to report for .or7 .hen the corporation transferred to a ne. location in )aloocan )it!, clai+in3 that her poor e!esi3ht .ould +a7e lon3 distance travel a proble+. Thus, it cannot be held 3uilt! of ille3al dis+issal. On the other hand, the respondent clai+s that .hen the petitioner relocated, she .as no lon3er called for dut! and that .hen she tried to report for .or7, she .as told that her services .ere no lon3er needed. She contends that the petitioner dis+issed her .ithout a <ust or authori1ed cause and that she .as not 3iven prior notice, hence renderin3 the dis+issal ille3al. 9e rule for the respondent. (s a re3ular e+plo!ee, respondent en<o!s the ri3ht to securit! of tenure under (rticle "@$)D of the 'abor )ode and +a! onl! be dis+issed for a <ust )9 or authori1ed4( cause, other.ise the dis+issal beco+es ille3al and the e+plo!ee beco+es entitled to reinstate+ent and full bac7.a3es co+puted fro+ the ti+e co+pensation .as .ithheld up to the ti+e of actual reinstate+ent. (bandon+ent is the deliberate and un<ustified refusal of an e+plo!ee to resu+e his e+plo!+ent.41 It is a for+ of ne3lect of dut!4 hence, a <ust cause for ter+ination of e+plo!+ent b! the e+plo!er under (rticle "&" of the 'abor )ode, .hich enu+erates the <ust causes for ter+ination b! the e+plo!er. 4> For a valid findin3 of abandon+ent, these t.o factors should be present/ *#, the failure to report for .or7 or absence .ithout valid or <ustifiable reason4 and *", a clear intention to sever e+plo!er?e+plo!ee relationship, .ith the second as the +ore deter+inative factor .hich is +anifested b! overt acts fro+ .hich it +a! be deduced that the e+plo!ee has no +ore intention to .or7. 4) The intent to discontinue the e+plo!+ent +ust be sho.n b! clear proof that it .as deliberate and un<ustified.44 This, the petitioner failed to do in the case at bar. (lon3side the petitionerGs contention that it .as the respondent .ho Cuit her e+plo!+ent and refused to return to .or7, 3reater stoc7 +a! be ta7en of the respondentGs i++ediate filin3 of her co+plaint .ith the N'R). Indeed, an e+plo!ee .ho loses no ti+e in protestin3 her la!off cannot b! an! reasonin3 be

said to have abandoned her .or7, for it is .ell?settled that the filin3 of an e+plo!ee of a co+plaint for ille3al dis+issal .ith a pra!er for reinstate+ent is proof enou3h of her desire to return to .or7, thus, ne3atin3 the e+plo!erGs char3e of abandon+ent.48 In ter+ination cases, the burden of proof rests upon the e+plo!er to sho. that the dis+issal is for a <ust and valid cause4 failure to do so .ould necessaril! +ean that the dis+issal .as ille3al.49 The e+plo!erGs case succeeds or fails on the stren3th of its evidence and not on the .ea7ness of the e+plo!eeGs defense. 47 If doubt e2ists bet.een the evidence presented b! the e+plo!er and the e+plo!ee, the scales of <ustice +ust be tilted in favor of the latter.4D IN VI89 9:8R8OF, the petition is D8NI8D for lac7 of +erit. The assailed Decision dated anuar! 5#, "BBE, and the Resolution dated (u3ust ##, "BBE, of the )ourt of (ppeals in )(?=.R. SP Nos. %FE@@ and %&F@@ are (FFIRM8D. )osts a3ainst petitioner. SO ORD8R8D. RE+NATO S. PUNO (ssociate ustice Republic of the Philippines SUPREME COURT Manila T,IRD DI#ISION G.R. No. 155'%1 Se-.ember %, $((' LOLITA LOPE/, petitioner, vs. BODEGA CIT+ 0#1"eo*D1)2o 31.24e! o5 .4e P4161--1!e)7 !"8or ANDRES C. TORRES*+AP, respondents. DECISION AUSTRIA*MARTINE/, J.9 -efore the )ourt is a Petition for Revie. on Certiorari under Rule FE of the Rules of )ourt assailin3 the ul! #&, "BB" Decision 1 of the )ourt of (ppeals *)(, in )(?=.R. SP No. %%&%#, dis+issin3 the petition for certiorari filed before it and affir+in3 the Decision of the National 'abor Relations )o++ission *N'R), in N'R)?N)R )ase No. BB?B5?B#@"$?$E4 and its Resolution dated October #%, "BB",> den!in3 petitioner6s Motion for Reconsideration. The N'R) Decision set aside the Decision of the 'abor (rbiter findin3 that 'olita 'ope1 *petitioner, .as

ille3all! dis+issed b! -ode3a )it! andIor (ndres ). Torres?;ap *respondents,. Respondent -ode3a )it! *-ode3a )it!, is a corporation dul! re3istered and e2istin3 under and b! virtue of the la.s of the Republic of the Philippines, .hile respondent (ndres ). Torres?;ap *;ap, is its o.nerI +ana3er. Petitioner .as the 0lad! 7eeper0 of -ode3a )it! tas7ed .ith +annin3 its ladies6 co+fort roo+. In a letter si3ned b! ;ap dated Februar! #B, #$$E, petitioner .as +ade to e2plain .h! the concessionaire a3ree+ent bet.een her and respondents should not be ter+inated or suspended in vie. of an incident that happened on Februar! 5, #$$E, .herein petitioner .as seen to have acted in a hostile +anner a3ainst a lad! custo+er of -ode3a )it! .ho infor+ed the +ana3e+ent that she sa. petitioner sleepin3 .hile on dut!. In a subseCuent letter dated Februar! "E, #$$E, ;ap infor+ed petitioner that because of the incident that happened on Februar! 5, #$$E, respondents had decided to ter+inate the concessionaire a3ree+ent bet.een the+. On March #, #$$E, petitioner filed .ith the (rbitration -ranch of the N'R), National )apital Re3ion, Hue1on )it!, a co+plaint for ille3al dis+issal a3ainst respondents contendin3 that she .as dis+issed fro+ her e+plo!+ent .ithout cause and due process. In their ans.er, respondents contended that no e+plo!er?e+plo!ee relationship ever e2isted bet.een the+ and petitioner4 that the latter6s services rendered .ithin the pre+ises of -ode3a )it! .as b! virtue of a concessionaire a3ree+ent she entered into .ith respondents. The co+plaint .as dis+issed b! the 'abor (rbiter for lac7 of +erit. :o.ever, on appeal, the N'R) set aside the order of dis+issal and re+anded the case for further proceedin3s. >pon re+and, the case .as assi3ned to a different 'abor (rbiter. Thereafter, hearin3s .ere conducted and the parties .ere reCuired to sub+it +e+oranda and other supportin3 docu+ents. On Dece+ber "&, #$$$, the 'abor (rbiter rendered <ud3+ent findin3 that petitioner .as an e+plo!ee of respondents and that the latter ille3all! dis+issed her.) Respondents filed an appeal .ith the N'R). On March "", "BB#, the N'R) issued a Resolution, the dispositive portion of .hich reads as follo.s/ 9:8R8FOR8, pre+ises dul! considered, the Decision appealed fro+ is hereb! ordered S8T (SID8 and V()(T8D, and in its stead, a ne. one entered DISMISSIN= the above?entitled case for lac7 of +erit.4

Petitioner filed a +otion for reconsideration of the above?Cuoted N'R) Resolution, but the N'R) denied the sa+e. (33rieved, petitioner filed a Petition for Certiorari .ith the )(. On ul! #&, "BB", the )( pro+ul3ated the presentl! assailed Decision dis+issin3 her special civil action for certiorari. Petitioner +oved for reconsideration but her +otion .as denied. :ence, herein petition based on the follo.in3 3rounds/ #. 9IT: D>8 R8SP8)T, P>-'I) R8SPOND8NT )O>RT OF (PP8('S )OMMITT8D =R(V8 (->S8 OF DIS)R8TION (MO>NTIN= TO '()L OR IN 8J)8SS OF >RISDI)TION IN R>'IN= T:(T T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION DID NOT )OMMIT =R(V8 (->S8 OF DIS)R8TION IN R8V8RSIN= T:8 D8)ISION OF T:8 '(-OR (R-IT8R FINDIN= P8TITION8R TO :(V8 -88N I''8=(''; DISMISS8D -; PRIV(T8 R8SPOND8NTS. ". 9IT: D>8 R8SP8)T, P>-'I) R8SPOND8NT )O>RT OF (PP8('S )OMMITT8D =R(V8 (->S8 OF DIS)R8TION (MO>NTIN= TO '()L OR IN 8J)8SS OF >RISDI)TION IN R>'IN= T:(T P8TITION8R 9(S NOT (N 8MP'O;88 OF PRIV(T8 R8SPOND8NTS.8 Petitioner contends that it .as .ron3 for the )( to conclude that even if she did not si3n the docu+ent evidencin3 the concessionaire a3ree+ent, she i+pliedl! accepted and thus bound herself to the ter+s and conditions contained in the said a3ree+ent .hen she continued to perfor+ the tas7 .hich .as alle3edl! specified therein for a considerable len3th of ti+e. Petitioner clai+s that the concessionaire a3ree+ent .as onl! offered to her durin3 her tenth !ear of service and after she or3ani1ed a union and filed a co+plaint a3ainst respondents. Prior to all these, petitioner asserts that her <ob as a 0lad! 7eeper0 .as a tas7 assi3ned to her as an e+plo!ee of respondents. Petitioner further ar3ues that her receipt of a special allo.ance fro+ respondents is a clear evidence that she .as an e+plo!ee of the latter, as the a+ount she received .as eCuivalent to the +ini+u+ .a3e at that ti+e. Petitioner also contends that her identification card clearl! sho.s that she .as not a concessionaire but an e+plo!ee of respondents4 that if respondents reall! intended the ID card issued to her to be used si+pl! for havin3 access to the pre+ises of -ode3a )it!, then respondents could have clearl! indicated such intent on the said ID card.

Moreover, petitioner sub+its that the fact that she .as reCuired to follo. rules and re3ulations prescribin3 appropriate conduct .hile she .as in the pre+ises of -ode3a )it! is clear evidence of the e2istence of an e+plo!er?e+plo!ee relationship bet.een her and petitioners. On the other hand, respondents contend that the present petition .as filed for the sole purpose of dela!in3 the proceedin3s of the case4 the 3rounds relied upon in the instant petition are +atters that have been e2haustivel! discussed b! the N'R) and the )(4 the present petition raises Cuestions of fact .hich are not proper in a petition for revie. on certiorari under Rule FE of the Rules of )ourt4 the respective decisions of the N'R) and the )( are based on evidence presented b! both parties4 petitioner6s co+pliance .ith the ter+s and conditions of the proposed concessionaire contract for a period of three !ears is evidence of her i+plied acceptance of such proposal4 petitioner failed to present evidence to prove her alle3ation that the sub<ect concessionaire a3ree+ent .as onl! proposed to her in her #Bth !ear of e+plo!+ent .ith respondent co+pan! and after she or3ani1ed a union and filed a labor co+plaint a3ainst respondents4 petitioner failed to present co+petent docu+entar! and testi+onial evidence to prove her contention that she .as an e+plo!ee of respondents since #$&E. The +ain issue to be resolved in the present case is .hether or not petitioner is an e+plo!ee of respondents. The issue of .hether or not an e+plo!er?e+plo!ee relationship e2ists in a 3iven case is essentiall! a Cuestion of fact.9 9hile it is a settled rule that onl! errors of la. are 3enerall! revie.ed b! this )ourt in petitions for revie. oncertiorari of )( decisions,7 there are .ell? reco3ni1ed e2ceptions to this rule, as in this case, .hen the factual findin3s of the N'R) as affir+ed b! the )( contradict those of the 'abor (rbiter. D In that event, it is this )ourt6s tas7, in the e2ercise of its eCuit! <urisdiction, to re?evaluate and revie. the factual issues b! loo7in3 into the records of the case and re?e2a+inin3 the Cuestioned findin3s.9 It is a basic rule of evidence that each part! +ust prove his affir+ative alle3ation.1( If he clai+s a ri3ht 3ranted b! la., he +ust prove his clai+ b! co+petent evidence, rel!in3 on the stren3th of his o.n evidence and not upon the .ea7ness of that of his opponent.11 The test for deter+inin3 on .ho+ the burden of proof lies is found in the result of an inCuir! as to .hich part! .ould be successful if no evidence of such +atters .ere 3iven.1>

In an ille3al dis+issal case, the on&s probandi rests on the e+plo!er to prove that its dis+issal of an e+plo!ee .as for a valid cause. 1) :o.ever, before a case for ille3al dis+issal can prosper, an e+plo!er?e+plo!ee relationship +ust first be established.14 In filin3 a co+plaint before the 'abor (rbiter for ille3al dis+issal based on the pre+ise that she .as an e+plo!ee of respondent, it is incu+bent upon petitioner to prove the e+plo!ee?e+plo!er relationship b! substantial evidence.18 The N'R) and the )( found that petitioner failed to dischar3e this burden, and the )ourt finds no co3ent reason to depart fro+ their findin3s. The )ourt applies the four?fold test e2pounded in Abante v. La#adrid 1earin and $arts Corp.,19 to .it/ To ascertain the e2istence of an e+plo!er?e+plo!ee relationship, <urisprudence has invariabl! applied the four?fold test, na+el!/ *#, the +anner of selection and en3a3e+ent4 *", the pa!+ent of .a3es4 *5, the presence or absence of the po.er of dis+issal4 and *F, the presence or absence of the po.er of control. Of these four, the last one is the +ost i+portant. The so?called 0control test0 is co++onl! re3arded as the +ost crucial and deter+inative indicator of the presence or absence of an e+plo!er?e+plo!ee relationship. >nder the control test, an e+plo!er? e+plo!ee relationship e2ists .here the person for .ho+ the services are perfor+ed reserves the ri3ht to control not onl! the end achieved, but also the +anner and +eans to be used in reachin3 that end.17 To prove the ele+ent of pa!+ent of .a3es, petitioner presented a pett! cash voucher sho.in3 that she received an allo.ance for five *E, da!s. 1D The )( did not err .hen it held that a solitar! pett! cash voucher did not prove that petitioner had been receivin3 salar! fro+ respondents or that she had been respondents6 e+plo!ee for #B !ears. Indeed, if petitioner .as reall! an e+plo!ee of respondents for that len3th of ti+e, she should have been able to present salar! vouchers or pa! slips and not <ust a sin3le pett! cash voucher. The )ourt a3rees .ith respondents that petitioner could have easil! sho.n other pieces of evidence such as a contract of e+plo!+ent, SSS or Medicare for+s, or certificates of .ithholdin3 ta2 on co+pensation inco+e4 or she could have presented .itnesses to prove her contention that she .as an e+plo!ee of respondents. Petitioner failed to do so. (nent the ele+ent of control, petitioner6s contention that she .as an e+plo!ee of respondents because she .as sub<ect to their control does not hold .ater.

Petitioner failed to cite a sin3le instance to prove that she .as sub<ect to the control of respondents insofar as the +anner in .hich she should perfor+ her <ob as a 0lad! 7eeper0 .as concerned. It is true that petitioner .as reCuired to follo. rules and re3ulations prescribin3 appropriate conduct .hile .ithin the pre+ises of -ode3a )it!. :o.ever, this .as i+posed upon petitioner as part of the ter+s and conditions in the concessionaire a3ree+ent e+bodied in a #$$" letter of ;ap addressed to petitioner, to .it/ anuar! %, #$$" Dear Ms. 'olita 'ope1, The ne. o.ners of -ode3a )it!, ##"# Food Service )orporation offers to !our 3oodself the concessionaireIcontract to provide independentl!, custo+er co+fort services to assist users of the ladies co+fort roo+ of the )lub to further enhance its business, under the follo.in3 ter+s and conditions/ #. ;ou .ill provide at !our o.n e2pense, all toilet supplies, useful for the purpose, such as toilet papers, soap, hair pins, safet! pins and other related ite+s or thin3s .hich in !our opinion is beneficial to the services !ou .ill underta7e4 ". For the entire duration of this concessionaire contract, and durin3 the )lub6s operatin3 hours, !ou shall +aintain the cleanliness of the ladies co+fort roo+. Provided, that 3eneral cleanliness, sanitation and ph!sical +aintenance of said co+fort roo+s shall be underta7en b! the o.ners of -ode3a )it!4 5. ;ou shall at all ti+es ensure satisfaction and 3ood services in the dischar3e of !our underta7in3. More i+portantl!, !ou shall al.a!s observe ut+ost courtes! in dealin3 .ith the personsIindividuals usin3 said co+fort roo+ and shall refrain fro+ doin3 acts that +a! adversel! affect the 3ood.ill and business standin3 of -ode3a )it!4 F. (ll re+unerations, tips, donations 3iven to !ou b! individualsIpersons utili1in3 said co+fort roo+s andIor 3uests of -ode3a )it! shall be .aived b! the latter to !our benefit provided ho.ever, that if concessionaire receives tips or donations per da! in an a+ount e2ceedin3 "BBD the prevailin3 +ini+u+ .a3e, then, she shall re+it fift! percent *EBD, of said a+ount to -ode3a )it! b! .a! of ro!alt! or concession fees4

E. This contract shall be for a period of one !ear and shall be auto+aticall! rene.ed on a !earl! basis unless notice of ter+ination is 3iven thirt! *5B, da!s prior to e2piration. (n! violation of the ter+s and conditions of this contract shall be a 3round for its i++ediate revocation andIor ter+ination. %. It is hereb! understood that no e+plo!er?e+plo!ee relationship e2ists bet.een -ode3a )it! andIor ##"# FoodService )orporation and !our 3oodself, as !ou are an independent contractor .ho has represented to us that !ou possess the necessar! Cualification as such includin3 +anpo.er co+pli+ent, eCuip+ent, facilities, etc. and that an! person !ou +a! en3a3e or e+plo! to .or7 .ith or assist !ou in the dischar3e of !our underta7in3 shall be solel! !our o.n e+plo!ees andIor a3ents. ##"# FoodService )orporation -ode3a )it! -!/ *S3d., (NDR8S ). TORR8S?;(P )onfor+e/ MMMMMMMMMMMMMMM 'O'IT( 'OP8N19 Petitioner does not dispute the e2istence of the letter4 neither does she den! that respondents offered her the sub<ect concessionaire a3ree+ent. :o.ever, she contends that she could not have entered into the said a3ree+ent .ith respondents because she did not si3n the docu+ent evidencin3 the sa+e. Settled is the rule that contracts are perfected b! +ere consent, upon the acceptance b! the offeree of the offer +ade b! the offeror. >( For a contract, to arise, the 6uent acts of the contractin3 parties. >> ( contract .ill be upheld as lon3 as there is proof of consent, sub<ect +atter and cause4 it is 3enerall! obli3ator! in .hatever for+ it +a! have been entered into.>) In the present case, the )ourt finds no co3ent reason to disre3ard the findin3s of both the )( and the N'R) that .hile petitioner did not affi2 her si3nature to the docu+ent evidencin3 the sub<ect concessionaire a3ree+ent, the fact that she perfor+ed the tas7s indicated in the said a3ree+ent for a period of three !ears .ithout an! co+plaint or Cuestion onl! 3oes to sho. that she has 3iven her

i+plied acceptance of or consent to the said a3ree+ent. Petitioner is li7e.ise estopped fro+ den!in3 the e2istence of the sub<ect concessionaire a3ree+ent. She should not, after en<o!in3 the benefits of the concessionaire a3ree+ent .ith respondents, be allo.ed to later diso.n the sa+e throu3h her alle3ation that she .as an e+plo!ee of the respondents .hen the said a3ree+ent .as ter+inated b! reason of her violation of the ter+s and conditions thereof. The principle of estoppel in pais applies .herein ?? b! one6s acts, representations or ad+issions, or silence .hen one ou3ht to spea7 out ?? intentionall! or throu3h culpable ne3li3ence, induces another to believe certain facts to e2ist and to ri3htfull! rel! and act on such belief, so as to be pre<udiced if the for+er is per+itted to den! the e2istence of those facts.>4 Moreover, petitioner failed to dispute the contents of the affidavit >8 as .ell as the testi+on!>9 of Feli+on :abitan *:abitan,, the concessionaire of the +en6s co+fort roo+ of -ode3a )it!, that he had personal 7no.led3e of the fact that petitioner .as the concessionaire of the ladies6 co+fort roo+ of -ode3a )it!. Petitioner also clai+s that the concessionaire a3ree+ent .as offered to her onl! in her #Bth !ear of service, after she or3ani1ed a union and filed a co+plaint a3ainst respondents. :o.ever, petitioner6s clai+ re+ains to be an alle3ation .hich is not supported b! an! evidence. It is a basic rule in evidence that each part! +ust prove his affir+ative alle3ation,>7 that +ere alle3ation is not evidence.>D The )ourt is not persuaded b! petitioner6s contention that the 'abor (rbiter .as correct in concludin3 that there e2isted an e+plo!er?e+plo!ee relationship bet.een respondents and petitioner. ( perusal of the Decision >9 of the 'abor (rbiter sho.s that his onl! basis for arrivin3 at such a conclusion are the bare assertions of petitioner and the fact that the latter did not si3n the letter of ;ap containin3 the proposed concessionaire a3ree+ent. :o.ever, as earlier discussed, this )ourt finds no error in the findin3s of the N'R) and the )( that petitioner is dee+ed as havin3 3iven her consent to the said proposal .hen she continuousl! perfor+ed the tas7s indicated therein for a considerable len3th of ti+e. For all intents and purposes, the concessionaire a3ree+ent had been perfected. Petitioner insists that her ID card is sufficient proof of her e+plo!+ent. In Do#asi v. )ational Labor *elations Co##ission,)( this )ourt held that the co+plainant6s ID card and the cash vouchers coverin3 his salaries for the +onths indicated therein .ere substantial evidence that he .as an e+plo!ee of respondents, especiall! in li3ht of the fact that the latter failed to den! said

evidence. This is not the situation in the present case. The onl! evidence presented b! petitioner as proof of her alle3ed e+plo!+ent are her ID card and one pett! cash voucher for a five?da! allo.ance .hich .ere disputed b! respondents. (s to the ID card, it is true that the .ords 08MP'O;886S N(M80 appear printed belo. petitioner6s na+e.)1:o.ever, she failed to dispute respondents6 evidence consistin3 of :abitan6s testi+on!,)> that he and the other 0contractors0 of -ode3a )it! such as the sin3ers and band perfor+ers, .ere also issued the sa+e ID cards for the purpose of enablin3 the+ to enter the pre+ises of -ode3a )it!. The )ourt Cuotes, .ith approval, the rulin3 of the )( on this +atter, to .it/ Nor can petitioners identification card i+prove her cause an! better. It is undisputed that non?e+plo!ees, such as Feli+on :abitan, an ad+itted concessionaire, +usicians, sin3ers and the li7e at -ode3a )it! are also issued identification cards. =iven this pre+ise, it appears clear to >s that petitioner6s I.D. )ard is inco+petent proof of an alle3ed e+plo!er?e+plo!ee relationship bet.een the herein parties. Vie.ed in the conte2t of this case, the card is at best a 0passport0 fro+ +ana3e+ent assurin3 the holder thereof of his un+olested access to the pre+ises of -ode3a )it!.)) 9ith respect to the pett! cash voucher, petitioner failed to refute respondent6s clai+ that it .as not 3iven to her for services rendered or on a re3ular basis, but si+pl! 3ranted as financial assistance to help her te+poraril! +eet her fa+il!6s needs. :ence, 3oin3 bac7 to the ele+ent of control, the concessionaire a3ree+ent +erel! stated that petitioner shall +aintain the cleanliness of the ladies6 co+fort roo+ and observe courtes! 3uidelines that .ould help her obtain the results the! .anted to achieve. There is nothin3 in the a3ree+ent .hich specifies the +ethods b! .hich petitioner should achieve these results. Respondents did not indicate the +anner in .hich she should 3o about in +aintainin3 the cleanliness of the ladies6 co+fort roo+. Neither did respondents deter+ine the +eans and +ethods b! .hich petitioner could ensure the satisfaction of respondent co+pan!6s custo+ers. In other .ords, petitioner .as 3iven a free hand as to ho. she .ould perfor+ her <ob as a 0lad! 7eeper.0 In fact, the last para3raph of the concessionaire a3ree+ent even allo.ed petitioner to en3a3e persons to .or7 .ith or assist her in the dischar3e of her functions.)4 Moreover, petitioner .as not sub<ected to definite hours or conditions of .or7. The fact that she .as e2pected to +aintain the cleanliness of respondent co+pan!6s ladies6 co+fort roo+ durin3 -ode3a )it!6s operatin3 hours does not

indicate that her perfor+ance of her <ob .as sub<ect to the control of respondents as to +a7e her an e+plo!ee of the latter. Instead, the reCuire+ent that she had to render her services .hile -ode3a )it! .as open for business .as dictated si+pl! b! the ver! nature of her underta7in3, .hich .as to 3ive assistance to the users of the ladies6 co+fort roo+. In Cons&lta v. Co&rt of Appeals,)8 this )ourt held/ It should, ho.ever, be obvious that not ever! for+ of control that the hirin3 part! reserves to hi+self over the conduct of the part! hired in relation to the services rendered +a! be accorded the effect of establishin3 an e+plo!er? e+plo!ee relationship bet.een the+ in the le3al or technical sense of the ter+. ( line +ust be dra.n so+e.here, if the reco3ni1ed distinction bet.een an e+plo!ee and an individual contractor is not to vanish alto3ether. Realisticall!, it .ould be a rare contract of service that 3ives untra++eled freedo+ to the part! hired and esche.s an! intervention .hatsoever in his perfor+ance of the en3a3e+ent. 'o3icall!, the line should be dra.n bet.een rules that +erel! serve as 3uidelines to.ards the achieve+ent of the +utuall! desired result .ithout dictatin3 the +eans or +ethods to be e+plo!ed in attainin3 it, and those that control or fi2 the +ethodolo3! and bind or restrict the part! hired to the use of such +eans. The first, .hich ai+ onl! to pro+ote the result, create no e+plo!er?e+plo!ee relationship unli7e the second, .hich address both the result and the +eans used to achieve it.)9 'astl!, the )ourt finds that the ele+ents of selection and en3a3e+ent as .ell as the po.er of dis+issal are not present in the instant case. It has been established that there has been no e+plo!er?e+plo!ee relationship bet.een respondents and petitioner. Their contractual relationship .as 3overned b! the concessionaire a3ree+ent e+bodied in the #$$" letter. Thus, petitioner .as not dis+issed b! respondents. Instead, as sho.n b! the letter of ;ap to her dated Februar! #E, #$$E,)7 their contractual relationship .as ter+inated b! reason of respondents6 ter+ination of the sub<ect concessionaire a3ree+ent, .hich .as in accordance .ith the provisions of the a3ree+ent in case of violation of its ter+s and conditions. In fine, the )( did not err in dis+issin3 the petition for certiorari filed before it b! petitioner. :,EREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the )ourt of (ppeals areAFFIRMED. )osts a3ainst petitioner.

SO ORDERED. 2nares-'antia o, C%airperson, C%ico-)azario, )ac%&ra, *e(es, ..., concur. FIRST DI#ISION

)O)( )O'( -OTT'8RS *P:I'S.,, IN).I8RI) MONTINO'(, Mana3er, Petitioners,

=.R. No. #F%&&# Present/ P>NO, C..., C%airperson, S(NDOV('?=>TI8RR8N, )ORON(, (N)>N(, and =(R)I(, ... Pro+ul3ated/ Februar! E, "BB@

versus ?

DR. D8(N N. )'IM()O, Respondent.

2 ???????????????????????????????????????????????????????????????????????????????????????? 2 DECISION A/CUNA, J.9 This is a petition for revie. on certiorari of the Decision of the )ourt of (ppealsO#P pro+ul3ated on ul! @, "BBB, and its Resolution pro+ul3ated on anuar! 5B, "BB#, den!in3 petitionerGs +otion for reconsideration. The )ourt of (ppeals ruled that an e+plo!er?e+plo!ee relationship e2ists bet.een respondent Dr. Dean N. )li+aco and petitioner )oca?)ola -ottlers Phils., Inc. *)oca?)ola,, and that respondent .as ille3all! dis+issed. Respondent Dr. Dean N. )li+aco is a +edical doctor .ho .as hired b! petitioner

)oca?)ola -ottlers Phils., Inc. b! virtue of a Retainer (3ree+ent that stated/ 9:8R8(S, the )OMP(N; desires to en3a3e on a retainer basis the services of a ph!sician and the said DO)TOR is acceptin3 such en3a3e+ent upon ter+s and conditions hereinafter set forth4 NO9, T:8R8FOR8, in consideration of the pre+ises and the +utual a3ree+ent hereinafter contained, the parties a3ree as follo.s/ #. This (3ree+ent shall onl! be for a period of one *#, !ear be3innin3 anuar! #, #$&& up to Dece+ber 5#, #$&&. The said ter+ not.ithstandin3, either part! +a! ter+inate the contract upon 3ivin3 a thirt! *5B,?da! .ritten notice to the other. ". The co+pensation to be paid b! the co+pan! for the services of the DO)TOR is hereb! fi2ed at P8SOS/ Three Thousand 8i3ht :undred *P5,&BB.BB, per +onth. The DO)TOR +a! char3e professional fee for hospital services rendered in line .ith his speciali1ation. (ll pa!+ents in connection .ith the Retainer (3ree+ent shall be sub<ect to a .ithholdin3 ta2 of ten percent *#BD, to be .ithheld b! the )OMP(N; under the 82panded 9ithholdin3 Ta2 S!ste+. In the event the .ithholdin3 ta2 rate shall be increased or decreased b! appropriate la.s, then the rate herein stipulated shall accordin3l! be increased or decreased pursuant to such la.s. 5. That in consideration of the above +entioned retainerGs fee, the DO)TOR a3rees to perfor+ the duties and obli3ations enu+erated in the )OMPR8:8NSIV8 M8DI)(' P'(N, hereto attached as (nne2 Q(R and +ade an inte3ral part of this Retainer (3ree+ent. F. That the applicable provisions in the Occupational Safet! and :ealth Standards, Ministr! of 'abor and 8+plo!+ent shall be follo.ed. E. That the DO)TOR shall be directl! responsible to

the e+plo!ee concerned and their dependents for an! in<ur! inflicted on, har+ done a3ainst or da+a3e caused upon the e+plo!ee of the )OMP(N; or their dependents durin3 the course of his e2a+ination, treat+ent or consultation, if such in<ur!, har+ or da+a3e .as co++itted throu3h professional ne3li3ence or inco+petence or due to the other valid causes for action. %. That the DO)TOR shall observe clinic hours at the )OMP(N;GS pre+ises fro+ Monda! to Saturda! of a +ini+u+ of t.o *", hours each da! or a +a2i+u+ of T9O *", hours each da! or treat+ent fro+ @/5B a.+. to &/5B a.+. and 5/BB p.+. to F/BB p.+., respectivel! unless such schedule is other.ise chan3ed b! the )OMP(N; as OtheP situation so .arrants, sub<ect to the 'abor )ode provisions on Occupational Safet! and :ealth Standards as the )OMP(N; +a! deter+ine. It is understood that the DO)TOR shall sta! at least t.o *", hours a da! in the )OMP(N; clinic and that such t.o *", hours be devoted to the .or7shift .ith the +ost nu+ber of e+plo!ees. It is further understood that the DO)TOR shall be on call at all ti+es durin3 the other .or7shifts to attend to e+er3enc! caseOsP4 @. That no e+plo!ee?e+plo!er relationship shall e2ist bet.een the )OMP(N; and the DO)TOR .hilst this contract is in effect, and in case of its ter+ination, the DO)TOR shall be entitled onl! to such retainer fee as +a! be due hi+ at the ti+e of ter+ination.O"P The )o+prehensive Medical Plan,O5P .hich contains the duties and responsibilities of respondent, adverted to in the Retainer (3ree+ent, provided/ (. O- 8)TIV8

These ob<ectives have been set to 3ive full consideration to OtheP e+plo!eesG and dependentsG health/ #. Pro+pt and adeCuate treat+ent of occupational and non?occupational in<uries and diseases.

". To protect e+plo!ees fro+ an! occupational health ha1ard b! evaluatin3 health factors related to .or7in3 conditions. 5. To encoura3e e+plo!ees OtoP +aintain 3ood personal health b! settin3 up e+plo!ee orientation and education on health, h!3iene and sanitation, nutrition, ph!sical fitness, first aid trainin3, accident prevention and personnel safet!. F. To evaluate other +atters relatin3 to health such as absenteeis+, leaves and ter+ination. E. -. To 3ive fa+il! plannin3 +otivations. )OV8R(=8 #. (ll e+plo!ees and their dependents are e+braced b! this pro3ra+. ". The health pro3ra+ shall cover pre?e+plo!+ent and annual p.e., h!3iene and sanitation, i++uni1ations, fa+il! plannin3, ph!sical fitness and athletic pro3ra+s and other activities such as 3roup health education pro3ra+, safet! and first aid classes, or3ani1ation of health and safet! co++ittees. 5. Periodicall!, this pro3ra+ .ill be revie.ed and ad<usted based on e+plo!eesG needs. ). #. ()TIVITI8S (nnual Ph!sical 82a+ination.

". )onsultations, dia3nosis and treat+ent of occupational and non?occupational illnesses and in<uries. 5. I++uni1ations necessar! for <ob conditions.

F. Periodic inspections for food services and rest roo+s. E. )onduct health education pro3ra+s and present education +aterials. %. )oordinate .ith Safet! )o++ittee in developin3 specific studies and pro3ra+ to +ini+i1e environ+ental health ha1ards. @. =ive fa+il! plannin3 +otivations.

&. )oordinate .ith Personnel Depart+ent re3ardin3 ph!sical fitness and athletic pro3ra+s. $. Visitin3 and follo.?up treat+ent of )o+pan! e+plo!ees and their dependents confined in the hospital. The Retainer (3ree+ent, .hich be3an on anuar! #, #$&&, .as rene.ed annuall!. The last one e2pired on Dece+ber 5#, #$$5. Despite the non?rene.al of the Retainer (3ree+ent, respondent continued to perfor+ his functions as co+pan! doctor to )oca?)ola until he received a letterOFP dated March $, #$$E fro+ petitioner co+pan! concludin3 their retainership a3ree+ent effective 5B da!s fro+ receipt thereof. It is noted that as earl! as Septe+ber #$$", petitioner .as alread! +a7in3 inCuiries re3ardin3 his status .ith petitioner co+pan!. First, he .rote a letter addressed to Dr. 9illie S!, the (ctin3 President and )hairperson of the )o++ittee on Me+bership, Philippine )olle3e of Occupational Medicine. In response, Dr. S! .rote a letterOEP to the Personnel Officer of )oca?)ola -ottlers Phils., -acolod )it!, statin3 that respondent should be considered as a re3ular part? ti+e ph!sician, havin3 served the co+pan! continuousl! for four *F, !ears. :e li7e.ise stated that respondent +ust receive all the benefits and privile3es of an e+plo!ee under (rticle #E@ *b,O%P of the 'abor )ode. Petitioner co+pan!, ho.ever, did not ta7e an! action. :ence, respondent +ade

another inCuir! directed to the (ssistant Re3ional Director, -acolod )it! District Office of the Depart+ent of 'abor and 8+plo!+ent *DO'8,, .ho referred the inCuir! to the 'e3al Service of the DO'8, Manila. In his letterO@P dated Ma! #&, #$$5, Director Dennis P. (ncheta, 'e3al Service, DO'8, stated that he believed that an e+plo!er?e+plo!ee relationship e2isted bet.een petitioner and respondent based on the Retainer (3ree+ent and the )o+prehensive Medical Plan, and the application of the Qfour?foldR test. :o.ever, Director (ncheta e+phasi1ed that the e2istence of e+plo!er?e+plo!ee relationship is a Cuestion of fact. :ence, ter+ination disputes or +one! clai+s arisin3 fro+ e+plo!er?e+plo!ee relations e2ceedin3 PE,BBB +a! be filed .ith the National 'abor Relations )o++ission *N'R),. :e stated that their opinion is strictl! advisor!. (n inCuir! .as li7e.ise addressed to the Social Securit! S!ste+ *SSS,. Thereafter, Mr. Ro+eo R. Tupas, OI)?FID of SSS?-acolod )it!, .rote a letterO&P to the Personnel Officer of )oca?)ola -ottlers Phils., Inc. infor+in3 the latter that the le3al staff of his office .as of the opinion that the services of respondent parta7e of the nature of .or7 of a re3ular co+pan! doctor and that he .as, therefore, sub<ect to social securit! covera3e. Respondent inCuired fro+ the +ana3e+ent of petitioner co+pan! .hether it .as a3reeable to reco3ni1in3 hi+ as a re3ular e+plo!ee. The +ana3e+ent refused to do so. On Februar! "F, #$$F, respondent filed a )o+plaintO$P before the N'R), -acolod )it!, see7in3 reco3nition as a re3ular e+plo!ee of petitioner co+pan! and pra!ed for the pa!+ent of all benefits of a re3ular e+plo!ee, includin3 #5th Month Pa!, )ost of 'ivin3 (llo.ance, :olida! Pa!, Service Incentive 'eave Pa!, and )hrist+as -onus. The case .as doc7eted as R(- )ase No. B%?B"?#B#5&?$F. 9hile the co+plaint .as pendin3 before the 'abor (rbiter, respondent received a letter dated March $, #$$E fro+ petitioner co+pan! concludin3 their retainership a3ree+ent effective thirt! *5B, da!s fro+ receipt thereof. This pro+pted respondent to file a co+plaint for ille3al dis+issal a3ainst petitioner co+pan! .ith the N'R), -acolod)it!. The case .as doc7eted as R(- )ase No. B%?BF?#B#@@? $E. In a DecisionO#BP dated Nove+ber "&, #$$%, 'abor (rbiter esus N. Rodri3ue1, r.

found that petitioner co+pan! lac7ed the po.er of control over respondentGs perfor+ance of his duties, and reco3ni1ed as valid the Retainer (3ree+ent bet.een the parties. Thus, the 'abor (rbiter dis+issed respondentGs co+plaint in the first case, R(- )ase No. B%?B"?#B#5&?$F. The dispositive portion of the Decision reads/ 9:8R8FOR8, pre+ises considered, <ud3+ent is hereb! rendered dis+issin3 the instant co+plaint see7in3 reco3nition as a re3ular e+plo!ee. SO ORD8R8D.O##P In a DecisionO#"P dated Februar! "F, #$$@, 'abor (rbiter -en<a+in Pelae1 dis+issed the case for ille3al dis+issal *R(- )ase No. B%?BF?#B#@@?$E, in vie. of the previous findin3 of 'abor (rbiter esus N. Rodri3ue1, r. in R()ase No. B%?B"?#B#5&?$F that co+plainant therein, Dr. Dean )li+aco, is not an e+plo!ee of )oca?)ola -ottlers Phils., Inc. Respondent appealed both decisions to the N'R), Fourth Division, )ebu )it!. In a DecisionO#5P pro+ul3ated on Nove+ber "&, #$$@, the N'R) dis+issed the appeal in both cases for lac7 of +erit. It declared that no e+plo!er?e+plo!ee relationship e2isted bet.een petitioner co+pan! and respondent based on the provisions of the Retainer (3ree+ent .hich contract 3overned respondentGs e+plo!+ent. RespondentGs +otion for reconsideration .as denied b! the N'R) in a ResolutionO#FP pro+ul3ated on (u3ust @, #$$&. Respondent filed a petition for revie. .ith the )ourt of (ppeals. In a Decision pro+ul3ated on ul! @, "BBB, the )ourt of (ppeals ruled that an e+plo!er?e+plo!ee relationship e2isted bet.een petitioner co+pan! and respondent after appl!in3 the four?fold test/ *#, the po.er to hire the e+plo!ee4 *", the pa!+ent of .a3es4 *5, the po.er of dis+issal4 and *F, the e+plo!erGs po.er to control the e+plo!ee .ith respect to the +eans and +ethods b! .hich the .or7 is to be acco+plished.

The )ourt of (ppeals held/ The Retainer (3ree+ent e2ecuted b! and bet.een the parties, .hen read to3ether .ith the )o+prehensive Medical Plan .hich .as +ade an inte3ral part of the retainer a3ree+ents, coupled .ith the actual services rendered b! the petitioner, .ould sho. that all the ele+ents of the above test are present. First, the a3ree+ents provide that Qthe )OMP(N; desires to en3a3e on a retainer basis the services of a ph!sician and the said DO)TOR is acceptin3 such en3a3e+ent 2 2 2R *Ro66o, - ;e $5,. This clearl! sho.s that )oca?)ola e2ercised its po.er to hire the services of petitioner. Secondl!, para3raph *", of the a3ree+ents sho.ed that petitioner .ould be entitled to a final co+pensation of Three Thousand 8i3ht :undred Pesos per +onth, .hich a+ount .as later raised to Seven Thousand Five :undred on the latest contract. This .ould represent the ele+ent of pa!+ent of .a3es. Thirdl!, it .as provided in para3raph *#, of the a3ree+ents that the sa+e shall be valid for a period of one !ear. QThe said ter+ not.ithstandin3, either part! +a! ter+inate the contract upon 3ivin3 a thirt! *5B, da! .ritten notice to the other.R 0Ro66o, - ;e $57. This .ould sho. that )oca?)ola had the po.er of dis+issin3 the petitioner, as it later on did, and this could be done for no particular reason, the sole reCuire+ent bein3 the for+erGs co+pliance .ith the 5B?da! notice reCuire+ent. 'astl!, para3raphs *5, and *%, of the a3ree+ents reveal that )oca?)ola e2ercised the +ost i+portant ele+ent of all, that is, control, over the conduct of petitioner in the latterGs perfor+ance of his duties as a doctor for the co+pan!. It .as stated in para3raph *5, that the doctor a3rees to perfor+ the duties and obli3ations enu+erated in the )o+prehensive Medical Plan referred to above. In para3raph *%,, the fi2ed and definite hours durin3 .hich the petitioner +ust render service to the co+pan! is laid do.n.

9e sa! that there e2ists )oca?)olaGs po.er to control petitioner because the particular ob<ectives and activities to be observed and acco+plished b! the latter are fi2ed and set under the )o+prehensive Medical Plan .hich .as +ade an inte3ral part of the retainer a3ree+ent. Moreover, the ti+es for acco+plishin3 these ob<ectives and activities are li7e.ise controlled and deter+ined b! the co+pan!. Petitioner is sub<ect to definite hours of .or7, and due to this, he perfor+s his duties to )oca?)ola not at his o.n pleasure but accordin3 to the schedule dictated b! the co+pan!. In addition, petitioner .as desi3nated b! )oca?)ola to be a +e+ber of its -acolod PlantGs Safet! )o++ittee. The +inutes of the +eetin3 of the said co++ittee dated Februar! #%, #$$F included the na+e of petitioner, as plant ph!sician, as a+on3 those co+prisin3 the co++ittee. It .as averred b! )oca?)ola in its co++ent that the! e2ercised no control over petitioner for the reason that the latter .as not directed as to the procedure and +anner of perfor+in3 his assi3ned tas7s. It .ent as far as sa!in3 that Qpetitioner .as not told ho. to i++uni1e, in<ect, treat or dia3nose the e+plo!ees of the respondent *Ro66o, - ;e $$8,. 9e believe that if the Qcontrol testR .ould be interpreted this strictl!, it .ould result in an absurd and ridiculous situation .herein .e could declare that an entit! e2ercises control over anotherGs activities onl! in instances .here the latter is directed b! the for+er on each and ever! sta3e of perfor+ance of the particular activit!. (n!thin3 less than that .ould be tanta+ount to no control at all. To our +inds, it is sufficient if the tas7 or activit!, as .ell as the +eans of acco+plishin3 it, is dictated, as in this case .here the ob<ectives and activities .ere laid out, and the specific ti+e for perfor+in3 the+ .as fi2ed b! the controllin3 part!.O#EP Moreover, the )ourt of (ppeals declared that respondent should be classified as a re3ular e+plo!ee havin3 rendered si2 !ears of service as plant ph!sician b! virtue of several rene.ed retainer a3ree+ents. It underscored the provision in (rticle "&BO#%P of the 'abor )ode statin3 that Qan! e+plo!ee .ho has rendered at least

one !ear of service, .hether such service is continuous or bro7en, shall be considered a re3ular e+plo!ee .ith respect to the activit! in .hich he is e+plo!ed, and his e+plo!+ent shall continue .hile such activit! e2ists.R Further, it held that the ter+ination of respondentGs services .ithout an! <ust or authori1ed cause constituted ille3al dis+issal. In addition, the )ourt of (ppeals found that respondentGs dis+issal .as an act oppressive to labor and .as effected in a .anton, oppressive or +alevolent +anner .hich entitled respondent to +oral and e2e+plar! da+a3es. The dispositive portion of the Decision reads/ :,EREFORE, in vie. of the fore3oin3, the Decision of the National 'abor Relations )o++ission dated Nove+ber "&, #$$@ and its Resolution dated (u3ust @, #$$& are found to have been issued .ith 3rave abuse of discretion in appl!in3 the la. to the established facts, and are hereb! RE#ERSED !" SET ASIDE, and private respondent )oca?)ola -ottlers, Phils.. Inc. is hereb! ordered to/ #. Reinstate the petitioner .ith full bac7.a3es .ithout loss of seniorit! ri3hts fro+ the ti+e his co+pensation .as .ithheld up to the ti+e he is actuall! reinstated4 ho.ever, if reinstate+ent is no lon3er possible, to pa! the petitioner separation pa! eCuivalent to one *#, +onthGs salar! for ever! !ear of service rendered, co+puted at the rate of his salar! at the ti+e he .as dis+issed, plus bac7.a3es. ". Pa! petitioner +oral da+a3es in the a+ount of PEB,BBB.BB. 5. Pa! petitioner e2e+plar! da+a3es in the a+ount of PEB,BBB.BB. F. =ive to petitioner all other benefits to .hich a re3ular e+plo!ee of )oca?)ola is entitled fro+ the ti+e petitioner beca+e a re3ular e+plo!ee *one !ear fro+ effectivit! date of e+plo!+ent, until the ti+e of actual pa!+ent.

SO ORD8R8D.O#@P Petitioner co+pan! filed a +otion for reconsideration of the Decision of the )ourt of (ppeals. In a Resolution pro+ul3ated on anuar! 5B, "BB#, the )ourt of (ppeals stated that petitioner co+pan! noted that its Decision failed to +ention .hether respondent .as a full?ti+e or part?ti+e re3ular e+plo!ee. It also Cuestioned ho. the benefits under their )ollective -ar3ainin3 (3ree+ent .hich the )ourt a.arded to respondent could be 3iven to hi+ considerin3 that such benefits .ere 3iven onl! to re3ular e+plo!ees .ho render a full da!Gs .or7 of not less that ei3ht hours. It .as ad+itted that respondent is onl! reCuired to .or7 for t.o hours per da!. The )ourt of (ppeals clarified that respondent .as a Qre3ular part?ti+e e+plo!ee and should be accorded all the proportionate benefits due to this cate3or! of e+plo!ees of OpetitionerP )orporation under the )-(.R It sustained its decision on all other +atters sou3ht to be reconsidered. :ence, this petition filed b! )oca?)ola -ottlers Phils., Inc. The issues are/ #. T:(T T:8 :ONOR(-'8 )O>RT OF (PP8('S )OMMITT8D R8V8RSI-'8 8RROR, -(S8D ON ( S>-ST(NTI(' H>8STION OF '(9, IN R8V8RSIN= T:8 FINDIN=S OF T:8 '(-OR (R-IT8RS (ND T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION, )ONTR(R; TO T:8 D8)ISIONS OF T:8 :ONOR(-'8 S>PR8M8 )O>RT ON T:8 M(TT8R. ". T:(T T:8 :ONOR(-'8 )O>RT OF (PP8('S )OMMITT8D R8V8RSI-'8 8RROR, -(S8D ON ( S>-ST(NTI(' H>8STION OF '(9, IN R8V8RSIN= T:8 FINDIN=S OF T:8 '(-OR (R-IT8RS (ND T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION, (ND :O'DIN= INST8(D T:(T T:8 9ORL OF ( P:;SI)I(N IS N8)8SS(R; (ND D8SIR(-'8 TO T:8 ->SIN8SS OF

SOFTDRINLS M(N>F()T>RIN=, )ONTR(R; TO T:8 R>'IN=S OF T:8 S>PR8M8 )O>RT IN (N('O=O>S )(S8S. 5. T:(T T:8 :ONOR(-'8 )O>RT OF (PP8('S )OMMITT8D R8V8RSI-'8 8RROR, -(S8D ON ( S>-ST(NTI(' H>8STION OF '(9, IN R8V8RSIN= T:8 FINDIN=S OF T:8 '(-OR (R-IT8RS (ND T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION, (ND :O'DIN= INST8(D T:(T T:8 P8TITION8RS 8J8R)IS8D )ONTRO' OV8R T:8 9ORL OF T:8 R8SPOND8NT. F. T:(T T:8 :ONOR(-'8 )O>RT OF (PP8('S )OMMITT8D R8V8RSI-'8 8RROR, -(S8D ON ( S>-ST(NTI(' H>8STION OF '(9, IN R8V8RSIN= T:8 FINDIN=S OF T:8 '(-OR (R-IT8RS (ND T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION, (ND FINDIN= T:(T T:8R8 IS 8MP'O;8R?8MP'O;88 R8'(TIONS:IP P>RS>(NT TO (RTI)'8 "&B OF T:8 '(-OR )OD8. E. T:(T T:8 :ONOR(-'8 )O>RT OF (PP8('S )OMMITT8D R8V8RSI-'8 8RROR, -(S8D ON ( S>-ST(NTI(' H>8STION OF '(9, IN R8V8RSIN= T:8 FINDIN=S OF T:8 '(-OR (R-IT8RS (ND T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION, (ND FINDIN= T:(T T:8R8 8JIST8D I''8=(' DISMISS(' 9:8N T:8 8MP'O;8NT OF T:8 R8SPOND8NT 9(S T8RMIN(T8D 9IT:O>T >ST )(>S8. %. T:(T T:8 :ONOR(-'8 )O>RT OF (PP8('S )OMMITT8D R8V8RSI-'8 8RROR, -(S8D ON ( S>-ST(NTI(' H>8STION OF '(9, IN R8V8RSIN= T:8 FINDIN=S OF T:8 '(-OR (R-IT8RS (ND T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION, (ND FINDIN= T:(T T:8 R8SPOND8NT IS ( R8=>'(R P(RT TIM8 8MP'O;88 9:O IS 8NTIT'8D TO PROPORTION(T8 -8N8FITS (S ( R8=>'(R P(RT TIM8

8MP'O;88 ())ORDIN= TO T:8 P8TITION8RSG )-(. @. T:(T T:8 :ONOR(-'8 )O>RT OF (PP8('S )OMMITT8D R8V8RSI-'8 8RROR, -(S8D ON ( S>-ST(NTI(' H>8STION OF '(9, IN R8V8RSIN= T:8 FINDIN=S OF T:8 '(-OR (R-IT8RS (ND T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION, (ND FINDIN= T:(T T:8 R8SPOND8NT IS 8NTIT'8D TO MOR(' (ND 8J8MP'(R; D(M(=8S.

The +ain issue in this case is .hether or not there e2ists an e+plo!er?e+plo!ee relationship bet.een the parties. The resolution of the +ain issue .ill deter+ine .hether the ter+ination of respondentGs e+plo!+ent is ille3al. The )ourt, in deter+inin3 the e2istence of an e+plo!er?e+plo!ee relationship, has invariabl! adhered to the four?fold test/ *#, the selection and en3a3e+ent of the e+plo!ee4 *", the pa!+ent of .a3es4 *5, the po.er of dis+issal4 and *F, the po.er to control the e+plo!eeGs conduct, or the so?called Qcontrol test,R considered to be the +ost i+portant ele+ent.O#&P The )ourt a3rees .ith the findin3 of the 'abor (rbiter and the N'R) that the circu+stances of this case sho. that no e+plo!er?e+plo!ee relationship e2ists bet.een the parties. The 'abor (rbiter and the N'R) correctl! found that petitioner co+pan! lac7ed the po.er of control over the perfor+ance b! respondent of his duties. The 'abor (rbiter reasoned that the )o+prehensive Medical Plan, .hich contains the respondentGs ob<ectives, duties and obli3ations, does not tell respondent Qho. to conduct his ph!sical e2a+ination, ho. to i++uni1e, or ho. to dia3nose and treat his patients, e+plo!ees of OpetitionerP co+pan!, in each case.R :e li7ened this case to that of )eri v. )ational Labor *elations Co##ission,O#$P .hich held/ In the case of petitioner Neri, it is ad+itted that F8-T) issued a <ob description .hich detailed her functions as a radioItele2 operator. :o.ever, a cursor! readin3 of the <ob description sho.s that .hat .as sou3ht to be controlled b! F8-T) .as actuall! the end result of the tas7, e.3., that the dail! inco+in3 and out3oin3 tele3raphic

transfer of funds received and rela!ed b! her, respectivel!, tallies .ith that of the re3ister. The 3uidelines .ere laid do.n +erel! to ensure that the desired end result .as achieved. It did not, ho.ever, tell Neri ho. the radioItele2 +achine should be operated. In effect, the 'abor (rbiter held that petitioner co+pan!, throu3h the )o+prehensive Medical Plan, provided 3uidelines +erel! to ensure that the end result .as achieved, but did not control the +eans and +ethods b! .hich respondent perfor+ed his assi3ned tas7s. The N'R) affir+ed the findin3s of the 'abor (rbiter and stated that it is precisel! because the co+pan! lac7s the po.er of control that the contract provides that respondent shall be directl! responsible to the e+plo!ee concerned and their dependents for an! in<ur!, har+ or da+a3e caused throu3h professional ne3li3ence, inco+petence or other valid causes of action. The 'abor (rbiter also correctl! found that the provision in the Retainer (3ree+ent that respondent .as on call durin3 e+er3enc! cases did not +a7e hi+ a re3ular e+plo!ee. :e e2plained, thus/ 'i7e.ise, the alle3ation of co+plainant that since he is on call at an!ti+e of the da! and ni3ht +a7es hi+ a re3ular e+plo!ee is off? tan3ent. )o+plainant does not dispute the fact that outside of the t.o *", hours that he is reCuired to be at respondent co+pan!Gs pre+ises, he is not at all further reCuired to <ust sit around in the pre+ises and .ait for an e+er3enc! to occur so as to enable hi+ fro+ usin3 such hours for his o.n benefit and advanta3e. In fact, co+plainant +aintains his o.n private clinic attendin3 to his private practice in the cit!, .here he services his patients, bills the+ accordin3l! ?? and if it is an e+plo!ee of respondent co+pan! .ho is attended to b! hi+ for special treat+ent that needs hospitali1ation or operation, this is sub<ect to a special billin3. More often than not, an e+plo!ee is reCuired to sta! in the e+plo!erGs .or7place or pro2i+atel! close thereto that he cannot utili1e his ti+e effectivel! and 3ainfull! for his o.n purpose. Such is not the prevailin3 situation here.

In addition, the )ourt finds that the schedule of .or7 and the reCuire+ent to be on call for e+er3enc! cases do not a+ount to such control, but are necessar! incidents to the Retainership (3ree+ent. The )ourt also notes that the Retainership (3ree+ent 3ranted to both parties the po.er to ter+inate their relationship upon 3ivin3 a 5B?da! notice. :ence, petitioner co+pan! did not .ield the sole po.er of dis+issal or ter+ination. The )ourt a3rees .ith the 'abor (rbiter and the N'R) that there is nothin3 .ron3 .ith the e+plo!+ent of respondent as a retained ph!sician of petitioner co+pan! and upholds the validit! of the Retainership (3ree+ent .hich clearl! stated that no e+plo!er?e+plo!ee relationship e2isted bet.een the parties. The (3ree+ent also stated that it .as onl! for a period of # !ear be3innin3 anuar! #, #$&& to Dece+ber 5#, #$$&, but it .as rene.ed on a !earl! basis. )onsiderin3 that there is no e+plo!er?e+plo!ee relationship bet.een the parties, the ter+ination of the Retainership (3ree+ent, .hich is in accordance .ith the provisions of the (3ree+ent, does not constitute ille3al dis+issal of respondent. )onseCuentl!, there is no basis for the +oral and e2e+plar! da+a3es 3ranted b! the )ourt of (ppeals to respondent due to his alle3ed ille3al dis+issal. :,EREFORE, the petition is GRANTED and the Decision and Resolution of the )ourt of (ppeals are RE#ERSED and SET ASIDE. The Decision and Resolution dated Nove+ber "&, #$$@ and (u3ust @, #$$&, respectivel!, of the National 'abor Relations )o++ission are REINSTATED. No costs. SO ORDERED. ADOLFO S. A/CUNA (ssociate ustice

SECOND DI#ISION <EROMIE D. ESCASINAS !" G.R. No. 1'88$'

E#AN RIGOR SINGCO, Pe.1.1o!e r), , ? versus ?

Present/ H>IS>M-IN=, .., C%airperson )(RPIO MOR('8S, N():>R(,S -RION, and P8R('T(,SS ...

S,ANGRI*LA=S MACTAN Pro+ul3ated/ ISLAND RESORT !" DR. <ESSICA <.R. March F, "BB$ PEPITO, Re)-o!"e!. ). 2 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?2 DECISION CARPIO MORALES, J.9 Re3istered nurses ero+ie D. 8scasinas and 8van Ri3or Sin3co *petitioners, .ere en3a3ed in #$$$ and #$$%, respectivel!, b! Dr. essica o!ce R. Pepito *respondent doctor, to .or7 in her clinic at respondent Shan3ri?laGs Mactan Island Resort *Shan3ri?la, in )ebu of .hich she .as a retained ph!sician. In late "BB", petitioners filed .ith the National 'abor Relations )o++ission *N'R), Re3ional (rbitration -ranch No. VII *N'R)?R(- No. VII, a co+plaintO#P for re3ulari1ation, underpa!+ent of .a3es, non?pa!+ent of holida! pa!, ni3ht shift differential and #5th +onth pa! differential a3ainst respondents, clai+in3 that the! are re3ular e+plo!ees of Shan3ri?la. The case .as doc7eted as R(- )ase No. B@?##?"B&$?B". Shan3ri?la clai+ed, ho.ever, that petitioners .ere not its e+plo!ees but of respondent doctor .ho+ it retained via Me+orandu+ of (3ree+ent *MO(, O"P pursuant to (rticle #E@ of the 'abor )ode, as a+ended. Respondent doctor for her part clai+ed that petitioners .ere alread! .or7in3 for

the previous retained ph!sicians of Shan3ri?la before she .as retained b! Shan3ri? la4 and that she +aintained petitionersG services upon their reCuest. -! DecisionO5P of Ma! %, "BB5, 'abor (rbiter 8rnesto F. )arreon declared petitioners to be re3ular e+plo!ees of Shan3ri?la. The (rbiter thus ordered Shan3ri?la to 3rant the+ the .a3es and benefits due the+ as re3ular e+plo!ees fro+ the ti+e their services .ere en3a3ed. In findin3 petitioners to be re3ular e+plo!ees of Shan3ri?la, the (rbiter noted that the! usuall! perfor+ .or7 .hich is necessar! and desirable to Shan3ri?laGs business4 that the! observe clinic hours and render services onl! to Shan3ri?laGs 3uests and e+plo!ees4 that pa!+ent for their salaries .ere reco++ended to Shan3ri?laGs :u+an Resource Depart+ent *:RD,4 that respondent doctor .as Shan3ri?laGs Qin?houseR ph!sician, hence, also an e+plo!ee4 and that the MO( bet.een Shan3ri?la and respondent doctor .as an Qinsidious +echanis+ in order to circu+vent Othe doctorGsP tenurial securit! and that of the e+plo!ees under her.R Shan3ri?la and respondent doctor appealed to the N'R). Petitioners appealed too, but onl! .ith respect to the non?a.ard to the+ of so+e of the benefits the! .ere clai+in3. -! DecisionOFP dated March 5#, "BBE, the N'R) 3ranted Shan3ri?laGs and respondent doctorGs appeal and dis+issed petitionersG co+plaint for lac7 of +erit, it findin3 that no e+plo!er?e+plo!ee relationship e2ists bet.een petitioner and Shan3ri?la. In so decidin3, the N'R) held that the (rbiter erred in interpretin3 (rticle #E@ in relation to (rticle "&B of the 'abor )ode, as .hat is reCuired under (rticle #E@ is that the e+plo!er should provide the services of +edical personnel to its e+plo!ees, but no.here in said article is a provision that nurses are reCuired to be e+plo!ed4 that contrar! to the findin3 of the (rbiter, even if (rticle "&B states that if a .or7er perfor+s .or7 usuall! necessar! or desirable in the business of the e+plo!er, he cannot be auto+aticall! dee+ed a re3ular e+plo!ee4 and that the MO( a+pl! sho.s that respondent doctor .as in fact en3a3ed b! Shan3ri?la on a retainer basis, under .hich she could hire her o.n nurses and other clinic personnel. -rushin3 aside petitionersG contention that since their application for e+plo!+ent .as addressed to Shan3ri?la, it .as reall! Shan3ri?la .hich hired the+ and not respondent doctor, the N'R) noted that the applications for e+plo!+ent .ere +ade b! persons .ho are not parties to the case and .ere not sho.n to have been

actuall! hired b! Shan3ri?la. On the issue of pa!+ent of .a3es, the N'R) held that the fact that, for so+e +onths, pa!+ent of petitionersG .a3es .ere reco++ended b! Shan3ri?laGs :RD did not prove that it .as Shan3ri?la .hich pa!s their .a3es. It thus credited respondent doctorGs e2planation that the reco++endations for pa!+ent .ere based on the billin3s she prepared for salaries of additional nurses durin3 Shan3ri?laGs pea7 +onths of operation, in accordance .ith the retainership a3ree+ent, the 3uestsG pa!+ents for +edical services havin3 been paid directl! to Shanr3i?la. Petitioners thereupon brou3ht the case to the )ourt of (ppeals .hich, b! DecisionOEP of Ma! "", "BB@, affir+ed the N'R) Decision that no e+plo!er? e+plo!ee relationship e2ists bet.een Shan3ri?la and petitioners. The appellate court concluded that all aspects of the e+plo!+ent of petitioners bein3 under the supervision and control of respondent doctor and since Shan3ri?la is not principall! en3a3ed in the business of providin3 +edical or healthcare services, petitioners could not be re3arded as re3ular e+plo!ees of Shan3ri?la. PetitionersG +otion for reconsideration havin3 been denied b! ResolutionO%P of ul! #B, "BB@, the! interposed the present recourse. Petitioners insist that under (rticle #E@ of the 'abor )ode, Shan3ri?la is reCuired to hire a full?ti+e re3istered nurse, apart fro+ a ph!sician, hence, their en3a3e+ent should be dee+ed as re3ular e+plo!+ent, the provisions of the MO( not.ithstandin34 and that the MO( is contrar! to public polic! as it circu+vents tenurial securit! and, therefore, should be struc7 do.n as bein3 void ab initio. (t +ost, the! ar3ue, the MO( is a +ere <ob contract. (nd petitioners +aintain that respondent doctor is a labor?onl! contractor for she has no license or business per+it and no business na+e re3istration, .hich is contrar! to the reCuire+ents under Sec. #$ and "B of the I+ple+entin3 Rules and Re3ulations of the 'abor )ode on sub?contractin3. Petitioners add that respondent doctor cannot be a le3iti+ate independent contractor, lac7in3 as she does in substantial capital, the clinic havin3 been set?up and alread! operational .hen she too7 over as retained ph!sician4 that respondent doctor has no control over ho. the clinic is bein3 run, as sho.n b! the different orders issued b! officers of Shan3ri?la forbiddin3 her

fro+ receivin3 cash pa!+ents and several purchase orders for +edicines and supplies .hich .ere coursed thru Shan3ri?laGs Purchasin3 Mana3er, circu+stances indubitabl! sho.in3 that she is not an independent contractor but a +ere a3ent of Shan3ri?la. In its )o++ent,O@P Shan3ri?la Cuestions the Special Po.ers of (ttorne!s *SP(s, appended to the petition for bein3 inadeCuate. On the +erits, it pra!s for the disallo.ance of the petition, contendin3 that it raises factual issues, such as the validit! of the MO(, .hich .ere never raised durin3 the proceedin3s before the (rbiter, albeit passed upon b! hi+ in his Decision4 that (rticle #E@ of the 'abor )ode does not +a7e it +andator! for a covered establish+ent to e+plo! health personnel4 that the services of nurses is not 3er+ane nor indispensable to its operations4 and that respondent doctor is a le3iti+ate individual independent contractor .ho has the po.er to hire, fire and supervise the .or7 of the nurses under her. The resolution of the case hin3es, in the +ain, on the correct interpretation of (rt. #E@ vis a vis (rt. "&B and the provisions on per+issible <ob contractin3 of the 'abor )ode, as a+ended. The )ourt holds that, contrar! to petitionersG postulation, Ar.. 15' "oe) !o. re>?1re .4e e!; ;eme!. o5 5?66*.1me !?r)e) ) re;?6 r em-6o@ee) o5 2om- !@ em-6o@1!; !o. 6e)) .4 ! 5( AorBer). Thus, the (rticle provides/ (RT. #E@. E#er enc( #edical and dental services. T I. )4 66 be .4e "?.@ o5 ever@ em-6o@er .o 5?r!1)4 41) em-6o@ee) in an! localit! .ith free +edical and dental attendance and facilities consistin3 of/ *a, The )erv12e) o5 5?66*.1me re;1).ere" !?r)e A4e! .4e !?mber o5 em-6o@ee) eC2ee") 515.@ 05(7 b?. !o. more .4 ! .Ao 4?!"re" 0$((7 eC2e-. A4e! .4e em-6o@er "oe) !o. m 1!. 1! 4 D r"o?) AorB-6 2e), in .hich case the services of a 3raduate first?aider shall be provided for the protection of the .or7ers, .here no re3istered nurse is available. The Secretar! of 'abor shall provide b! appropriate re3ulations the services that shall be reCuired .here the nu+ber of e+plo!ees does not e2ceed fift! *EB,

and shall deter+ine b! appropriate order ha1ardous .or7places for purposes of this (rticle4 *b, T4e )erv12e) o5 5?66*.1me re;1).ere" !?r)e, - r.*.1me -4@)121 ! !" "e!.1)., !" ! emer;e!2@ 261!12, A4e! .4e !?mber o5 em-6o@ee) eC2ee") .Ao 4?!"re" 0$((7 b?. !o. more .4 ! .4ree 4?!"re" 0%((74 and *c, The services of a full?ti+e ph!sician, dentist and full?ti+e re3istered nurse as .ell as a dental clinic, and an infir+ar! or e+er3enc! hospital .ith one bed capacit! for ever! one hundred *#BB, e+plo!ees .hen the nu+ber of e+plo!ees e2ceeds three hundred *5BB,. In cases of ha1ardous .or7places, no e+plo!er shall en3a3e the services of a ph!sician or dentist .ho cannot sta! in the pre+ises of the establish+ent for at least t.o *", hours, in the case of those en3a3ed on part?ti+e basis, and not less than ei3ht *&, hours in the case of those e+plo!ed on full?ti+e basis. :4ere .4e ?!"er. B1!; 1) !o!4 D r"o?) 1! ! .?re, .4e -4@)121 ! !" "e!.1). m @ be e!; ;e" o! re. 1!e" b )1), )?bEe2. .o )?24 re;?6 .1o!) ) .4e Se2re. r@ o5 L bor m @ -re)2r1be .o 1!)?re 1mme"1 .e v 16 b161.@ o5 me"12 6 !" "e!. 6 .re .me!. !" ..e!" !2e 1! 2 )e o5 emer;e!2@. *8+phasis and underscorin3 supplied, >nder the fore3oin3 provision, Shan3ri?la, .hich e+plo!s +ore than "BB .or7ers, is +andated to Q5?r!1)4R its e+plo!ees .ith the services of a full?ti+e re3istered nurse, a part?ti+e ph!sician and dentist, and an e+er3enc! clinic .hich +eans that 1. )4o?6" -rov1"e or m Be v 16 b6e )?24 me"12 6 !" 661e" )erv12e) .o 1.) em-6o@ee), !o. !e2e)) r16@ .o 41re or em-6o@ )erv12e -rov1"er. (s held in $%ilippine +lobal Co##&nications vs. De Vera3O&P 2 2 2 A416e 1. 1) .r?e .4 . .4e -rov1)1o! re>?1re) em-6o@er) .o e!; ;e .4e )erv12e) o5 me"12 6 -r 2.1.1o!er) 1! 2er. 1! e). b61)4me!.) "e-e!"1!; o! .4e !?mber o5

.4e1r em-6o@ee), !o.41!; 1) .4ere 1! .4e 6 A A4124 ) @) .4 . me"12 6 -r 2.1.1o!er) )o e!; ;e" be 2.? 66@ 41re" ) em-6o@ee), addin3 that the la., as .ritten, onl! reCuires the e+plo!er Q.o re. 1!R, not e+plo!, a part?ti+e ph!sician .ho needed to sta! in the pre+ises of the non?ha1ardous .or7place for t.o *", hours. *8+phasis and underscorin3 supplied, The ter+ Qfull?ti+eR in (rt. #E@ cannot be construed as referrin3 to the t!pe of e+plo!+ent of the person en3a3ed to provide the services, for (rticle #E@ +ust not be read alon3side (rt. "&BO$P in order to vest e+plo!er?e+plo!ee relationship on the e+plo!er and the person so en3a3ed. So De Vera teaches/ 2 2 2 For, .e ta7e it that an! a3ree+ent +a! provide that one part! shall render services for and in behalf of another, no +atter ho. necessar! for the latterGs business, eve! A1.4o?. be1!; 41re" ) ! em-6o@ee. This set?up is precisel! true in the case of an independent contractorship as .ell as in an a3enc! a3ree+ent. I!"ee", Ar.126e $8( o5 .4e L bor Co"e, >?o.e" b@ .4e --e66 .e 2o?r., 1) !o. .4e @ r").12B 5or "e.erm1!1!; .4e eC1).e!2e o5 ! em-6o@me!. re6 .1o!)41-. A) 1. 1), .4e -rov1)1o! mere6@ "1).1!;?1)4e) be.Aee! .Ao 0$7 B1!") o5 em-6o@ee), i.e., re;?6 r !" 2 )? 6. 2 2 2O#BP *8+phasis and underscorin3 supplied, The phrase Qservices of a full?ti+e re3istered nurseR should thus be ta7en to refer to the 7ind of services that the nurse .ill render in the co+pan!Gs pre+ises and to its e+plo!ees, not the +anner of his en3a3e+ent. (s to .hether respondent doctor can be considered a le3iti+ate independent contractor, the pertinent sections of DO'8 Depart+ent Order No. #B, series of #$$@, illu+inate/ Sec. &. .ob contractin . T There is <ob contractin3 per+issible under the )ode if the follo.in3 conditions are +et/

*#, The contractor carries on an independent business and underta7es the contract .or7 on his o.n account under his o.n responsibilit! accordin3 to his o.n +anner and +ethod, free fro+ the control and direction of his e+plo!er or principal in all +atters connected .ith the perfor+ance of the .or7 e2cept as to the results thereof4 and *", The contractor has substantial capital or invest+ent in the for+ of tools, eCuip+ent, +achineries, .or7 pre+ises, and other +aterials .hich are necessar! in the conduct of his business. Sec. $. Labor-onl( contractin . T *a, (n! person .ho underta7es to suppl! .or7ers to an e+plo!er shall be dee+ed to be en3a3ed in labor?onl! contractin3 .here such person/ *#, Doe) !o. 4 ve )?b). !.1 6 2 -1. 6 or 1!ve).me!. 1! .4e 5orm o5 .oo6), e>?1-me!., m 241!er1e), AorB -rem1)e) !" o.4er m .er1 6)4 and *", T4e AorBer) re2r?1.e" !" -6 2e" b@ )?24 -er)o!) re -er5orm1!; 2.1v1.1e) A4124 re "1re2.6@ re6 .e" .o .4e -r1!21- 6 b?)1!e)) or o-er .1o!) o5 .4e em-6o@er 1! A4124 AorBer) re 4 b1.? 66@ em-6o@e". *b, 'abor?onl! contractin3 as defined herein is hereb! prohibited and the person actin3 as contractor shall be considered +erel! as an a3ent or inter+ediar! of the e+plo!er .ho shall be responsible to the .or7ers in the sa+e +anner and e2tent as if the latter .ere directl! e+plo!ed b! hi+. *c, For cases not fallin3 under this (rticle, the Secretar! of 'abor shall deter+ine throu3h appropriate orders .hether or not the contractin3 out of labor is per+issible in the li3ht of the circu+stances of each case and after considerin3 the operatin3 needs of the e+plo!er and the ri3hts of the .or7ers involved. In such case, he +a! prescribe conditions and restrictions to insure the protection and .elfare of the .or7ers. *8+phasis supplied,

The e2istence of an independent and per+issible contractor relationship is 3enerall! established b! considerin3 the follo.in3 deter+inants/ .hether the contractor is carr!in3 on an independent business4 the nature and e2tent of the .or74 the s7ill reCuired4 the ter+ and duration of the relationship4 the ri3ht to assi3n the perfor+ance of a specified piece of .or74 the control and supervision of the .or7 to another4 the e+plo!er6s po.er .ith respect to the hirin3, firin3 and pa!+ent of the contractor6s .or7ers4 the control of the pre+ises4 the dut! to suppl! the pre+ises, tools, appliances, +aterials and labor4 and the +ode, +anner and ter+s of pa!+ent.O##P On the other hand, e2istence of an e+plo!er? e+plo!ee relationship is established b! the presence of the follo.in3 deter+inants/ *#, the selection and en3a3e+ent of the .or7ers4 *", po.er of dis+issal4 *5, the pa!+ent of .a3es b! .hatever +eans4 and *F, the po.er to control the .or7er6s conduct, .ith the latter assu+in3 pri+ac! in the overall consideration.O#"P (3ainst the above?listed deter+inants, the )ourt holds that respondent doctor is a le3iti+ate independent contractor. That Shan3ri?la provides the clinic pre+ises and +edical supplies for use of its e+plo!ees and 3uests does not necessaril! prove that respondent doctor lac7s substantial capital and invest+ent. -esides, the +aintenance of a clinic and provision of +edical services to its e+plo!ees is reCuired under (rt. #E@, .hich are not directl! related to Shan3ri?laGs principal business T operation of hotels and restaurants. (s to pa!+ent of .a3es, respondent doctor is the one .ho under.rites the follo.in3/ salaries, SSS contributions and other benefits of the staffO#5P4 3roup life, 3roup personal accident insurance and lifeIdeath insuranceO#FP for the staff .ith +ini+u+ benefit pa!able at #" ti+es the e+plo!eeGs last dra.n salar!, as .ell as value added ta2es and .ithholdin3 ta2es, sourced fro+ her P%B,BBB.BB +onthl! retainer fee and @BD share of the service char3es fro+ Shan3ri?laGs 3uests .ho avail of the clinic services. It is unli7el! that respondent doctor .ould report petitioners as .or7ers, pa! their SSS pre+iu+ as .ell as their .a3es if the! .ere not indeed her e+plo!ees.O#EP 9ith respect to the supervision and control of the nurses and clinic staff, it is not disputed that a docu+ent, Q)linic Policies and 8+plo!ee ManualRO#%P clai+ed to

have been prepared b! respondent doctor e2ists, to .hich petitioners 3ave their confor+it!O#@P and in .hich the! ac7no.led3ed their co?ter+inus e+plo!+ent status. It is thus presu+ed that said docu+ent, and not the e+plo!ee +anual bein3 follo.ed b! Shan3ri?laGs re3ular .or7ers, 3overns ho. the! perfor+ their respective tas7s and responsibilities. )ontrar! to petitionersG contention, the various office directives issued b! Shan3ri?laGs officers do not i+pl! that it is Shan3ri?laGs +ana3e+ent and not respondent doctor .ho e2ercises control over the+ or that Shan3ri?la has control over ho. the doctor and the nurses perfor+ their .or7. The letterO#&P addressed to respondent doctor dated Februar! @, "BB5 fro+ a certain Tata '. Re!es 3ivin3 instructions re3ardin3 the replenish+ent of e+er3enc! 7its is, at +ost, ad+inistrative in nature, related as it is to safet! +atters4 .hile the letterO#$P dated Ma! #@, "BBF fro+ Shan3ri?laGs (ssistant Financial )ontroller, 'otlot Da3at, forbiddin3 the clinic fro+ receivin3 cash pa!+ents fro+ the resortGs 3uests is a +atter of financial polic! in order to ensure proper sharin3 of the proceeds, considerin3 that Shan3ri?la and respondent doctor share in the 3uestsG pa!+ents for +edical services rendered. In fine, as Shan3ri?la does not control ho. the .or7 should be perfor+ed b! petitioners, it is not petitionersG e+plo!er. :,EREFORE, the petition is hereb! DENIED. The Decision of the )ourt of (ppeals dated Ma! "", "BB@ and the Resolution dated ul! #B, "BB@ are AFFIRMED. SO ORDERED. CONC,ITA CARPIO MORALES (ssociate ustice 98 )ON)>R/

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 1&415& Se-.ember $&, $((&

ABS*CBN BROADCASTING CORPORATION, petitioner, vs. MARL+N NA/ARENO, MERLOU GER/ON, <ENNIFER DEIPARINE, !" <OSEP,INE LERASAN, respondents. D8)ISION CALLE<O, SR., J.9 -efore us is a petition for revie. on certiorari of the Decision 1 of the )ourt of (ppeals *)(, in )(?=.R. SP No. @%E&" and the Resolution den!in3 the +otion for reconsideration thereof. The )( affir+ed the Decision > and Resolution) of the National 'abor Relations )o++ission *N'R), in N'R) )ase No. V?BBB@%"? "BB# *R(- )ase No. VII?#B?#%%#?"BB#, .hich li7e.ise affir+ed, .ith +odification, the decision of the 'abor (rbiter declarin3 the respondents Marl!n Na1areno, Merlou =er1on, ennifer Deiparine and osephine 'erasan as re3ular e+plo!ees. The (ntecedents Petitioner (-S?)-N -roadcastin3 )orporation *(-S?)-N, is en3a3ed in the broadcastin3 business and o.ns a net.or7 of television and radio stations, .hose operations revolve around the broadcast, trans+ission, and rela! of teleco++unication si3nals. It sells and deals in or other.ise utili1es the airti+e it 3enerates fro+ its radio and television operations. It has a franchise as a broadcastin3 co+pan!, and .as li7e.ise issued a license and authorit! to operate b! the National Teleco++unications )o++ission. Petitioner e+plo!ed respondents Na1areno, =er1on, Deiparine, and 'erasan as production assistants *P(s, on different dates. The! .ere assi3ned at the ne.s and public affairs, for various radio pro3ra+s in the )ebu -roadcastin3 Station, .ith a +onthl! co+pensation of PF,BBB. The! .ere issued (-S?)-N e+plo!eesG identification cards and .ere reCuired to .or7 for a +ini+u+ of ei3ht hours a da!, includin3 Sunda!s and holida!s. The! .ere +ade to perfor+ the follo.in3 tas7s and duties/ a, Prepare, arran3e airin3 of co++ercial broadcastin3 based on the dail! operations lo3 and di3icart of respondent (-S?)-N4 b, )oordinate, arran3e personalities for air intervie.s4 c, )oordinate, prepare schedule of reporters for scheduled ne.s reportin3 and lead?in or inco+in3 reports4 d, Facilitate, prepare and arran3e airti+e schedule for public service

announce+ent and co+plaints4 e, (ssist, anchor pro3ra+ intervie., etc4 and f, Record, lo3 clerical reports, +an based control radio.4 Their respective .or7in3 hours .ere as follo.s/ Na+e Ti+e No. of :ours #. Marlene Na1areno F/5B (.M.?&/BB (.M. @ U &/BB (.M.?#"/BB noon ". ennifer Deiparine F/5B (.M.?#"/BBM.N. *sic, @ U 5. o! Sanche1 #/BB P.M.?#B/BB P.M.*Sunda!, $ hrs. $/BB (.M.?%/BB P.M. *9F, $ hrs. F. Merlou =er1on $/BB (.M.?%/BB P.M. $ hrs.8 The P(s .ere under the control and supervision of (ssistant Station Mana3er Dante . 'u1on, and Ne.s Mana3er 'eo 'asti+osa. On Dece+ber #$, #$$%, petitioner and the (-S?)-N Ran7?and?File 8+plo!ees e2ecuted a )ollective -ar3ainin3 (3ree+ent *)-(, to be effective durin3 the period fro+ Dece+ber ##, #$$% to Dece+ber ##, #$$$. :o.ever, since petitioner refused to reco3ni1e P(s as part of the bar3ainin3 unit, respondents .ere not included to the )-(.9 On ul! "B, "BBB, petitioner, throu3h Dante 'u1on, issued a Me+orandu+ infor+in3 the P(s that effective (u3ust #, "BBB, the! .ould be assi3ned to non? dra+a pro3ra+s, and that the D;(- studio operations .ould be handled b! the studio technician. Thus, their revised schedule and other assi3n+ents .ould be as follo.s/ Monda! T Saturda! F/5B (.M. T &/BB (.M. T Marlene Na1areno. Miss Na1areno .ill then be assi3ned at the Research Dept. Fro+ &/BB (.M. to #"/BB F/5B P.M. T #"/BB MN T ennifer Deiparine Sunda! E/BB (.M. T #/BB P.M. T ennifer Deiparine #/BB P.M. T #B/BB P.M. T o! Sanche1

Respondent =er1on .as assi3ned as the full?ti+e P( of the TV Ne.s Depart+ent reportin3 directl! to 'eo 'asti+osa. On October #", "BBB, respondents filed a )o+plaint for Reco3nition of Re3ular 8+plo!+ent Status, >nderpa!+ent of Overti+e Pa!, :olida! Pa!, Pre+iu+ Pa!, Service Incentive Pa!, Sic7 'eave Pa!, and #5th Month Pa! .ith Da+a3es a3ainst the petitioner before the N'R). The 'abor (rbiter directed the parties to sub+it their respective position papers. >pon respondentsG failure to file their position papers .ithin the re3le+entar! period, 'abor (rbiter ose =. =utierre1 issued an Order dated (pril 5B, "BB#, dis+issin3 the co+plaint .ithout pre<udice for lac7 of interest to pursue the case. Respondents received a cop! of the Order on Ma! #%, "BB#.7Instead of re?filin3 their co+plaint .ith the N'R) .ithin #B da!s fro+ Ma! #%, "BB#, the! filed, on une ##, "BB#, an 8arnest Motion to Refile )o+plaint .ith Motion to (d+it Position Paper and Motion to Sub+it )ase For Resolution.D The 'abor (rbiter 3ranted this +otion in an Order dated une #&, "BB#, and forth.ith ad+itted the position paper of the co+plainants. Respondents +ade the follo.in3 alle3ations/ #. )o+plainants .ere en3a3ed b! respondent (-S?)-N as re3ular and full?ti+e e+plo!ees for a continuous period of +ore than five *E, !ears .ith a +onthl! salar! rate of Four Thousand *PF,BBB.BB, pesos be3innin3 #$$E up until the filin3 of this co+plaint on Nove+ber "B, "BBB. Machine copies of co+plainantsG (-S?)-N 8+plo!eeGs Identification )ard and salar! vouchers are hereto attached as follo.s, thus/ I. ennifer Deiparine/ 82hibit 0(0 ? (-S?)-N 8+plo!eeGs Identification )ard 82hibit 0-0, ? (-S?)-N Salar! Voucher fro+ Nov. 82hibit 0-?#0 V #$$$ to ul! "BBB at PF,BBB.BB 82hibit 0-?"0 Date e+plo!ed/ Septe+ber #E, #$$E 'en3th of service/ E !ears V nine *$, +onths II. Merlou =er1on ? (-S?)-N 8+plo!eeGs Identification )ard 82hibit 0)0 82hibit 0D0 82hibit 0D?#0 V

82hibit 0D?"0 ? (-S?)-N Salar! Voucher fro+ March #$$$ to anuar! "BB# at PF,BBB.BB Date e+plo!ed/ Septe+ber #, #$$E 'en3th of service/ E !ears V #B +onths III. Marlene Na1areno 82hibit 080 ? (-S?)-N 8+plo!eeGs Identification )ard 82hibit 080 ? (-S?)-N Salar! Voucher fro+ Nov. 82hibit 08?#0 V #$$$ to Dece+ber "BBB 82hibit /8?"0 Date e+plo!ed/ (pril #@, #$$% 'en3th of service/ E !ears and one *#, +onth IV. o! Sanche1 'erasan 82hibit 0F0 ? (-S?)-N 8+plo!eeGs Identification )ard 82hibit 0F?#0 ? (-S?)-N Salar! Voucher fro+ (u3. 82hibit 0F?"0 V "BBB to an. "BB# 82hibit 0F?50 82hibit 0F?F0 ? )ertification dated ul! %, "BBB (c7no.led3in3 re3ular status of )o+plainant o! Sanche1 'erasan Si3ned b! (-S?)-N (d+inistrative Officer Ma! Li+a :ife Date e+plo!ed/ (pril #E, #$$& 'en3th of service/ 5 !rs. and one *#, +onth9 Respondents insisted that the! belon3ed to a 0.or7 pool0 fro+ .hich petitioner chose persons to be 3iven specific assi3n+ents at its discretion, and .ere thus under its direct supervision and control re3ardless of no+enclature. The! pra!ed that <ud3+ent be rendered in their favor, thus/ 9:8R8FOR8, pre+ises considered, this :onorable (rbiter is +ost respectfull! pra!ed, to issue an order co+pellin3 defendants to pa! co+plainants the follo.in3/

#. One :undred Thousand Pesos *P#BB,BBB.BB, each and b! .a! of +oral da+a3es4 ". Mini+u+ .a3e differential4 5. Thirteenth +onth pa! differential4 F. >npaid service incentive leave benefits4 E. Sic7 leave4 %. :olida! pa!4 @. Pre+iu+ pa!4 &. Overti+e pa!4 $. Ni3ht shift differential. )o+plainants further pra! of this (rbiter to declare the+ re3ular and per+anent e+plo!ees of respondent (-S?)-N as a condition precedent for their ad+ission into the e2istin3 union and collective bar3ainin3 unit of respondent co+pan! .here the! +a! as such acCuire or other.ise perfor+ their obli3ations thereto or en<o! the benefits due therefro+. )o+plainants pra! for such other reliefs as are <ust and eCuitable under the pre+ises.1( For its part, petitioner alle3ed in its position paper that the respondents .ere P(s .ho basicall! assist in the conduct of a particular pro3ra+ ran b! an anchor or talent. (+on3 their duties include +onitorin3 and receivin3 inco+in3 calls fro+ listeners and field reporters and calls of ne.s sources4 3enerall!, the! perfor+ le3 .or7 for the anchors durin3 a pro3ra+ or a particular production. The! are considered in the industr! as 0pro3ra+ e+plo!ees0 in that, as distin3uished fro+ re3ular or station e+plo!ees, the! are basicall! en3a3ed b! the station for a particular or specific pro3ra+ broadcasted b! the radio station. Petitioner asserted that as P(s, the co+plainants .ere issued talent infor+ation sheets .hich are updated fro+ ti+e to ti+e, and are thus +ade the basis to deter+ine the pro3ra+s to .hich the! shall later be called on to assist. The pro3ra+ assi3n+ents of co+plainants .ere as follo.s/ a. )o+plainant Na1areno assists in the pro3ra+s/ #, Na3ba3an3 -alita *earl! +ornin3 edition, ", Infor :a!upan 5, (ran37ada *+ornin3 edition,

F, Na3ba3an3 -alita *+id?da! edition, b. )o+plainant Deiparine assists in the pro3ra+s/ #, >n1anith ", Serbis!o de (revalo 5, (ran37ada *evenin3 edition, F, -alitan3 L *local version, E, (bante Subu %, Pan3utana 'an3 c. )o+plainant =er1on assists in the pro3ra+/ #, On Monda!s and Tuesda!s/ *a, >n1anith *b, Serbis!o de (revalo *c, (ran37ada *evenin3 edition, *d, -alitan3 L *local version, *e, (bante Su3bu *f, Pan3utana 'an3 ", On Thursda!s Na3ba3an3 -alita 5, On Saturda!s *a, Na3ba3an3 -alita *b, Info :a!upan *c, (ran37ada *+ornin3 edition, *d, Na3ba3an3 -alita *+id?da! edition, F, On Sunda!s/ *a, Siesta Serenata *b, Sunda! )his+isan *c, Ti+ban3an sa :ustis!a *d, Sa!ri an3 'un3sod *e, :aranahan11

Petitioner +aintained that P(s, reporters, anchors and talents occasionall! 0sideline0 for other pro3ra+s the! produce, such as dra+a talents in other productions. (s pro3ra+ e+plo!ees, a P(Gs en3a3e+ent is coter+inous .ith the co+pletion of the pro3ra+, and +a! be e2tendedIrene.ed provided that the pro3ra+ is on?3oin34 a P( +a! also be assi3ned to ne. pro3ra+s upon the cancellation of one pro3ra+ and the co++ence+ent of another. (s such pro3ra+ e+plo!ees, their co+pensation is co+puted on a pro3ra+ basis, a fi2ed a+ount for perfor+ance services irrespective of the ti+e consu+ed. (t an! rate, petitioner clai+ed, as the pa!roll .ill sho., respondents .ere paid all salaries and benefits due the+ under the la..1> Petitioner also alle3ed that the 'abor (rbiter had no <urisdiction to involve the )-( and interpret the sa+e, especiall! since respondents .ere not covered b! the bar3ainin3 unit. On ul! 5B, "BB#, the 'abor (rbiter rendered <ud3+ent in favor of the respondents, and declared that the! .ere re3ular e+plo!ees of petitioner4 as such, the! .ere a.arded +onetar! benefits. The fallo of the decision reads/ 9:8R8FOR8, the fore3oin3 pre+ises considered, <ud3+ent is hereb! rendered declarin3 the co+plainants re3ular e+plo!ees of the respondent (-S?)-N -roadcastin3 )orporation and directin3 the sa+e respondent to pa! co+plainants as follo.s/ I ? Merlou (. =er1on P#",B"E.BB II ? Marl!n Na1areno #",B"E.BB III ? ennifer Deiparine #",B"E.BB IV ? osephine Sanche1 'era1an #",B"E.BB MMMMMMMMM PF&,#BB.BB plus ten *#BD, percent (ttorne!Gs Fees or a TOT(' a33re3ate a+ount of P8SOS/ FIFT; T9O T:O>S(ND NIN8 :>NDR8D T8N *PE",$#B.BB,. Respondent Veneranda ). S! is absolved fro+ an! liabilit!. SO ORD8R8D.1) :o.ever, the 'abor (rbiter did not a.ard +one! benefits as provided in the )-( on his belief that he had no <urisdiction to interpret and appl! the a3ree+ent, as the sa+e .as .ithin the <urisdiction of the Voluntar! (rbitrator as provided in (rticle "%# of the 'abor )ode.

RespondentsG counsel received a cop! of the decision on (u3ust "$, "BB#. Respondent Na1areno received her cop! on (u3ust "@, "BB#, .hile the other respondents received theirs on Septe+ber &, "BB#. Respondents si3ned and filed their (ppeal Me+orandu+ on Septe+ber #&, "BB#. For its part, petitioner filed a +otion for reconsideration, .hich the 'abor (rbiter denied and considered as an appeal, confor+abl! .ith Section E, Rule V, of the N'R) Rules of Procedure. Petitioner forth.ith appealed the decision to the N'R), .hile respondents filed a partial appeal. In its appeal, petitioner alle3ed the follo.in3/ #. That the 'abor (rbiter erred in revivin3 or re?openin3 this case .hich had lon3 been dis+issed .ithout pre<udice for +ore than thirt! *5B, calendar da!s4 ". That the 'abor (rbiter erred in deprivin3 the respondent of its )onstitutional ri3ht to due process of la.4 5. That the 'abor (rbiter erred in den!in3 respondentGs Motion for Reconsideration on an interlocutor! order on the 3round that the sa+e is a prohibited pleadin34 F. That the 'abor (rbiter erred .hen he ruled that the co+plainants are re3ular e+plo!ees of the respondent4 E. That the 'abor (rbiter erred .hen he ruled that the co+plainants are entitled to #5th +onth pa!, service incentive leave pa! and salar! differential4 and %. That the 'abor (rbiter erred .hen he ruled that co+plainants are entitled to attorne!Gs fees.14 On Nove+ber #F, "BB", the N'R) rendered <ud3+ent +odif!in3 the decision of the 'abor (rbiter. The fallo of the decision reads/ 9:8R8FOR8, pre+ises considered, the decision of 'abor (rbiter ose =. =utierre1 dated 5B ul! "BB# is S8T (SID8 and V()(T8D and a ne. one is entered ORD8RIN= respondent (-S?)-N -roadcastin3 )orporation, as follo.s/ #. To pa! co+plainants of their .a3e differentials and other benefits arisin3 fro+ the )-( as of 5B Septe+ber "BB" in the a33re3ate a+ount of T.o Million Five :undred, Si2t!?One Thousand Nine :undred Fort!?8i3ht Pesos and ""I#BB *P",E%#,$F&."",, bro7en do.n as follo.s/ a. Deiparine, ennifer ? P @#%,##5.F$ b. =er1on, Merlou ? @#%,##5.F$ c. Na1areno, Marl!n ? @#%,##5.F$

d. 'era1an, osephine Sanche1 ? F#5,%B@.@E Total ? P ",E%#,$F&."" ". To deliver to the co+plainants T.o :undred Thirt!?Three *"55, sac7s of rice as of 5B Septe+ber "BB" representin3 their rice subsid! in the )-(, bro7en do.n as follo.s/ a. Deiparine, ennifer ? %B Sac7s b. =er1on, Merlou ? %B Sac7s c. Na1areno, Marl!n ? %B Sac7s d. 'era1an, osephine Sanche1 ? E5 Sac7s Total "55 Sac7s4 and 5. To 3rant to the co+plainants all the benefits of the )-( after 5B Septe+ber "BB". SO ORD8R8D.18 The N'R) declared that the 'abor (rbiter acted confor+abl! .ith the 'abor )ode .hen it 3ranted respondentsG +otion to refile the co+plaint and ad+it their position paper. (lthou3h respondents .ere not parties to the )-( bet.een petitioner and the (-S?)-N Ran7?and?File 8+plo!ees >nion, the N'R) nevertheless 3ranted and co+puted respondentsG +onetar! benefits based on the #$$$ )-(, .hich .as effective until Septe+ber "BB". The N'R) also ruled that the 'abor (rbiter had <urisdiction over the co+plaint of respondents because the! acted in their individual capacities and not as +e+bers of the union. Their clai+ for +onetar! benefits .as .ithin the conte2t of (rticle "#@*%, of the 'abor )ode. The validit! of respondentsG clai+ does not depend upon the interpretation of the )-(. The N'R) ruled that respondents .ere entitled to the benefits under the )-( because the! .ere re3ular e+plo!ees .ho contributed to the profits of petitioner throu3h their labor. The N'R) cited the rulin3 of this )ourt in Ne. Pacific Ti+ber V Suppl! )o+pan! v. National 'abor Relations )o++ission.19 Petitioner filed a +otion for reconsideration, .hich the N'R) denied. Petitioner thus filed a petition for certiorari under Rule %E of the Rules of )ourt before the )(, raisin3 both procedural and substantive issues, as follo.s/ *a, .hether the N'R) acted .ithout <urisdiction in ad+ittin3 the appeal of respondents4 *b, .hether the N'R) co++itted palpable error in scrutini1in3 the reopenin3 and revival of the co+plaint of respondents .ith the 'abor (rbiter upon

due notice despite the lapse of #B da!s fro+ their receipt of the ul! 5B, "BB# Order of the 'abor (rbiter4 *c, .hether respondents .ere re3ular e+plo!ees4 *d, .hether the N'R) acted .ithout <urisdiction in entertainin3 and resolvin3 the clai+ of the respondents under the )-( instead of referrin3 the sa+e to the Voluntar! (rbitrators as provided in the )-(4 and *e, .hether the N'R) acted .ith 3rave abuse of discretion .hen it a.arded +onetar! benefits to respondents under the )-( althou3h the! are not +e+bers of the appropriate bar3ainin3 unit. On Februar! #B, "BBF, the )( rendered <ud3+ent dis+issin3 the petition. It held that the perfection of an appeal shall be upon the e2piration of the last da! to appeal b! all parties, should there be several parties to a case. Since respondents received their copies of the decision on Septe+ber &, "BB# *e2cept respondent Na1areno .ho received her cop! of the decision on (u3ust "@, "BB#,, the! had until Septe+ber #&, "BB# .ithin .hich to file their (ppeal Me+orandu+. Moreover, the )( declared that respondentsG failure to sub+it their position paper on ti+e is not a 3round to stri7e out the paper fro+ the records, +uch less dis+iss a co+plaint. (nent the substantive issues, the appellate court stated that respondents are not +ere pro<ect e+plo!ees, but re3ular e+plo!ees .ho perfor+ tas7s necessar! and desirable in the usual trade and business of petitioner and not <ust its pro<ect e+plo!ees. Moreover, the )( added, the a.ard of benefits accorded to ran7?and? file e+plo!ees under the #$$%?#$$$ )-( is a necessar! conseCuence of the N'R) rulin3 that respondents, as P(s, are re3ular e+plo!ees. Findin3 no +erit in petitionerGs +otion for reconsideration, the )( denied the sa+e in a Resolution17 dated une #%, "BBF. Petitioner thus filed the instant petition for revie. on certiorari and raises the follo.in3 assi3n+ents of error/ #. T:8 :ONOR(-'8 )O>RT OF (PP8('S ()T8D 9IT:O>T >RISDI)TION (ND =R(V8'; 8RR8D IN >P:O'DIN= T:8 N(TION(' '(-OR R8'(TIONS )OMMISSION NOT9IT:ST(NDIN= T:8 P(T8NT N>''IT; OF T:8 '(TT8RGS D8)ISION (ND R8SO'>TION. ". T:8 :ONOR(-'8 )O>RT OF (PP8('S =R(V8'; 8RR8D IN (FFIRMIN= T:8 R>'IN= OF T:8 N'R) FINDIN= R8SPOND8NTS R8=>'(R 8MP'O;88S. 5. T:8 :ONOR(-'8 )O>RT OF (PP8('S =R(V8'; 8RR8D IN (FFIRMIN= T:8 R>'IN= OF T:8 N'R) (9(RDIN= )-( -8N8FITS TO R8SPOND8NTS.1D

)onsiderin3 that the assi3n+ents of error are interrelated, the )ourt shall resolve the+ si+ultaneousl!. Petitioner asserts that the appellate court co++itted palpable and serious error of la. .hen it affir+ed the rulin3s of the N'R), and entertained respondentsG appeal fro+ the decision of the 'abor (rbiter despite the ad+itted lapse of the re3le+entar! period .ithin .hich to perfect the sa+e. Petitioner li7e.ise +aintains that the #B?da! period to appeal +ust be rec7oned fro+ receipt of a part!Gs counsel, not fro+ the ti+e the part! learns of the decision, that is, notice to counsel is notice to part! and not the other .a! around. Finall!, petitioner ar3ues that the reopenin3 of a co+plaint .hich the 'abor (rbiter has dis+issed .ithout pre<udice is a clear violation of Section #, Rule V of the N'R) Rules4 such order of dis+issal had alread! attained finalit! and can no lon3er be set aside. Respondents, on the other hand, alle3e that their late appeal is a non?issue because it .as petitionerGs o.n ti+el! appeal that e+po.ered the N'R) to reopen the case. The! assert that althou3h the appeal .as filed #B da!s late, it +a! still be 3iven due course in the interest of substantial <ustice as an e2ception to the 3eneral rule that the ne3li3ence of a counsel binds the client. On the issue of the late filin3 of their position paper, the! +aintain that this is not a 3round to stri7e it out fro+ the records or dis+iss the co+plaint. 9e find no +erit in the petition. 9e a3ree .ith petitionerGs contention that the perfection of an appeal .ithin the statutor! or re3le+entar! period is not onl! +andator!, but also <urisdictional4 failure to do so renders the assailed decision final and e2ecutor! and deprives the appellate court or bod! of the le3al authorit! to alter the final <ud3+ent, +uch less entertain the appeal. :o.ever, this )ourt has ti+e and a3ain ruled that in e2ceptional cases, a belated appeal +a! be 3iven due course if 3reater in<ustice +a! occur if an appeal is not 3iven due course than if the re3le+entar! period to appeal .ere strictl! follo.ed.19 The )ourt resorted to this e2traordinar! +easure even at the e2pense of sacrificin3 order and efficienc! if onl! to serve the 3reater principles of substantial <ustice and eCuit!.>( In the case at bar, the N'R) did not co++it a 3rave abuse of its discretion in 3ivin3 (rticle ""5>1 of the 'abor )ode a liberal application to prevent the +iscarria3e of <ustice. Technicalit! should not be allo.ed to stand in the .a! of eCuitabl! and co+pletel! resolvin3 the ri3hts and obli3ations of the parties. >> 9e have held in a catena of cases that technical rules are not bindin3 in labor cases and are not to be applied strictl! if the result .ould be detri+ental to the .or7in3+an.>)

(d+ittedl!, respondents failed to perfect their appeal fro+ the decision of the 'abor (rbiter .ithin the re3le+entar! period therefor. :o.ever, petitioner perfected its appeal .ithin the period, and since petitioner had filed a ti+el! appeal, the N'R) acCuired <urisdiction over the case to 3ive due course to its appeal and render the decision of Nove+ber #F, "BB". )ase la. is that the part! .ho failed to appeal fro+ the decision of the 'abor (rbiter to the N'R) can still participate in a separate appeal ti+el! filed b! the adverse part! as the situation is considered to be of 3reater benefit to both parties.>4 9e find no +erit in petitionerGs contention that the 'abor (rbiter abused his discretion .hen he ad+itted respondentsG position paper .hich had been belatedl! filed. It bears stressin3 that the 'abor (rbiter is +andated b! la. to use ever! reasonable +eans to ascertain the facts in each case speedil! and ob<ectivel!, .ithout technicalities of la. or procedure, all in the interest of due process.>8 Indeed, as stressed b! the appellate court, respondentsG failure to sub+it a position paper on ti+e is not a 3round for stri7in3 out the paper fro+ the records, +uch less for dis+issin3 a co+plaint. >9 'i7e.ise, there is si+pl! no truth to petitionerGs assertion that it .as denied due process .hen the 'abor (rbiter ad+itted respondentsG position paper .ithout reCuirin3 it to file a co++ent before ad+ittin3 said position paper. The essence of due process in ad+inistrative proceedin3s is si+pl! an opportunit! to e2plain oneGs side or an opportunit! to see7 reconsideration of the action or rulin3 co+plained of. Obviousl!, there is nothin3 in the records that .ould su33est that petitioner had absolute lac7 of opportunit! to be heard.>7 Petitioner had the ri3ht to file a +otion for reconsideration of the 'abor (rbiterGs ad+ission of respondentsG position paper, and even file a Repl! thereto. In fact, petitioner filed its position paper on (pril ", "BB#. It +ust be stressed that (rticle "&B of the 'abor )ode .as encoded in our statute boo7s to hinder the circu+vention b! unscrupulous e+plo!ers of the e+plo!eesG ri3ht to securit! of tenure b! indiscri+inatel! and absolutel! rulin3 out all .ritten and oral a3ree+ents inhar+onious .ith the concept of re3ular e+plo!+ent defined therein.>D 9e Cuote .ith approval the follo.in3 pronounce+ent of the N'R)/ The co+plainants, on the other hand, contend that respondents assailed the 'abor (rbiterGs order dated #& une "BB# as violative of the N'R) Rules of Procedure and as such is violative of their ri3ht to procedural due process. That .hile su33estin3 that an Order be instead issued b! the 'abor (rbiter for co+plainants to refile this case, respondents i+pliedl! sub+it that there is not an! substantial da+a3e or pre<udice upon the refilin3, even so, respondentsG su33estion

ac7no.led3es co+plainants ri3ht to prosecute this case, albeit .ith the burden of repeatin3 the sa+e procedure, thus, entailin3 additional ti+e, efforts, liti3ation cost and precious ti+e for the (rbiter to repeat the sa+e process t.ice. RespondentGs su33estion, betra!s its notion of prolon3in3, rather than pro+otin3 the earl! resolution of the case. (lthou3h the 'abor (rbiter in his Order dated #& une "BB# .hich revived and re? opened the dis+issed case .ithout pre<udice be!ond the ten *#B, da! re3le+entar! period had inadvertentl! failed to follo. Section #%, Rule V, Rules Procedure of the N'R) .hich states/ 0( part! +a! file a +otion to revive or re?open a case dis+issed .ithout pre<udice .ithin ten *#B, calendar da!s fro+ receipt of notice of the order dis+issin3 the sa+e4 other.ise, his onl! re+ed! shall be to re?file the case in the arbitration branch of ori3in.0 the sa+e is not a serious fla. that had pre<udiced the respondentsG ri3ht to due process. The case can still be refiled because it has not !et prescribed. (n!.a!, (rticle ""# of the 'abor )ode provides/ 0In an! proceedin3s before the )o++ission or an! of the 'abor (rbiters, the rules of evidence prevailin3 in courts of la. or eCuit! shall not be controllin3 and it is the spirit and intention of this )ode that the )o++ission and its +e+bers and the 'abor (rbiters shall use ever! and all reasonable +eans to ascertain the facts in each case speedil! and ob<ectivel! and .ithout re3ard to technicalities of la. or procedure, all in the interest of due process.0 The ad+ission b! the 'abor (rbiter of the co+plainantsG Position Paper and Supple+ental Manifestation .hich .ere belatedl! filed <ust onl! sho.s that he acted .ithin his discretion as he is en<oined b! la. to use ever! reasonable +eans to ascertain the facts in each case speedil! and ob<ectivel!, .ithout re3ard to technicalities of la. or procedure, all in the interest of due process. Indeed, the failure to sub+it a position paper on ti+e is not a 3round for stri7in3 out the paper fro+ the records, +uch less for dis+issin3 a co+plaint in the case of the co+plainant. *>niversit! of I++aculate )onception vs. >I) Teachin3 and Non? Teachin3 Personnel 8+plo!ees, =.R. No. #FF@B", ul! 5#, "BB#,. 0In ad+ittin3 the respondentsG position paper albeit late, the 'abor (rbiter acted .ithin her discretion. In fact, she is en<oined b! la. to use ever! reasonable +eans to ascertain the facts in each case speedil! and ob<ectivel!, .ithout technicalities of la. or procedure, all in the interest of due process0. *Panlilio vs. N'R), "&# S)R( E5,.

The respondents .ere 3iven b! the 'abor (rbiter the opportunit! to sub+it position paper. In fact, the respondents had filed their position paper on " (pril "BB#. 9hat is +aterial in the co+pliance of due process is the fact that the parties are 3iven the opportunities to sub+it position papers. 0Due process reCuire+ents are satisfied .here the parties are 3iven the opportunities to sub+it position papers0. *'aurence vs. N'R), "BE S)R( @5@,. Thus, the respondent .as not deprived of its )onstitutional ri3ht to due process of la..>9 9e re<ect, as barren of factual basis, petitionerGs contention that respondents are considered as its talents, hence, not re3ular e+plo!ees of the broadcastin3 co+pan!. PetitionerGs clai+ that the functions perfor+ed b! the respondents are not at all necessar!, desirable, or even vital to its trade or business is belied b! the evidence on record. )ase la. is that this )ourt has al.a!s accorded respect and finalit! to the findin3s of fact of the )(, particularl! if the! coincide .ith those of the 'abor (rbiter and the National 'abor Relations )o++ission, .hen supported b! substantial evidence.)( The Cuestion of .hether respondents are re3ular or pro<ect e+plo!ees or independent contractors is essentiall! factual in nature4 nonetheless, the )ourt is constrained to resolve it due to its tre+endous effects to the le3ions of production assistants .or7in3 in the Philippine broadcastin3 industr!. 9e a3ree .ith respondentsG contention that .here a person has rendered at least one !ear of service, re3ardless of the nature of the activit! perfor+ed, or .here the .or7 is continuous or inter+ittent, the e+plo!+ent is considered re3ular as lon3 as the activit! e2ists, the reason bein3 that a custo+ar! appoint+ent is not indispensable before one +a! be for+all! declared as havin3 attained re3ular status. (rticle "&B of the 'abor )ode provides/ (RT. "&B. R8=>'(R (ND )(S>(' 8MP'O;M8NT.AThe provisions of .ritten a3ree+ent to the contrar! not.ithstandin3 and re3ardless of the oral a3ree+ent of the parties, an e+plo!+ent shall be dee+ed to be re3ular .here the e+plo!ee has been en3a3ed to perfor+ activities .hich are usuall! necessar! or desirable in the usual business or trade of the e+plo!er e2cept .here the e+plo!+ent has been fi2ed for a specific pro<ect or underta7in3 the co+pletion or ter+ination of .hich has been deter+ined at the ti+e of the en3a3e+ent of the e+plo!ee or .here the .or7 or services to be perfor+ed is seasonal in nature and the e+plo!+ent is for the duration of the season. In >niversal Robina )orporation v. )atapan3,)1 the )ourt reiterated the test in

deter+inin3 .hether one is a re3ular e+plo!ee/ The pri+ar! standard, therefore, of deter+inin3 re3ular e+plo!+ent is the reasonable connection bet.een the particular activit! perfor+ed b! the e+plo!ee in relation to the usual trade or business of the e+plo!er. The test is .hether the for+er is usuall! necessar! or desirable in the usual business or trade of the e+plo!er. The connection can be deter+ined b! considerin3 the nature of .or7 perfor+ed and its relation to the sche+e of the particular business or trade in its entiret!. (lso, if the e+plo!ee has been perfor+in3 the <ob for at least a !ear, even if the perfor+ance is not continuous and +erel! inter+ittent, the la. dee+s repeated and continuin3 need for its perfor+ance as sufficient evidence of the necessit! if not indispensabilit! of that activit! to the business. :ence, the e+plo!+ent is considered re3ular, but onl! .ith respect to such activit! and .hile such activit! e2ists.)> (s elaborated b! this )ourt in Ma3salin v. National Or3ani1ation of 9or7in3 Men/)) 8ven .hile the lan3ua3e of la. +i3ht have been +ore definitive, the clarit! of its spirit and intent, i.e., to ensure a 0re3ular0 .or7erGs securit! of tenure, ho.ever, can hardl! be doubted. In deter+inin3 .hether an e+plo!+ent should be considered re3ular or non?re3ular, the applicable test is the reasonable connection bet.een the particular activit! perfor+ed b! the e+plo!ee in relation to the usual business or trade of the e+plo!er. The standard, supplied b! the la. itself, is .hether the .or7 underta7en is necessar! or desirable in the usual business or trade of the e+plo!er, a fact that can be assessed b! loo7in3 into the nature of the services rendered and its relation to the 3eneral sche+e under .hich the business or trade is pursued in the usual course. It is distin3uished fro+ a specific underta7in3 that is divorced fro+ the nor+al activities reCuired in carr!in3 on the particular business or trade. -ut, althou3h the .or7 to be perfor+ed is onl! for a specific pro<ect or seasonal, .here a person thus en3a3ed has been perfor+in3 the <ob for at least one !ear, even if the perfor+ance is not continuous or is +erel! inter+ittent, the la. dee+s the repeated and continuin3 need for its perfor+ance as bein3 sufficient to indicate the necessit! or desirabilit! of that activit! to the business or trade of the e+plo!er. The e+plo!+ent of such person is also then dee+ed to be re3ular .ith respect to such activit! and .hile such activit! e2ists.)4 Not considered re3ular e+plo!ees are 0pro<ect e+plo!ees,0 the co+pletion or ter+ination of .hich is +ore or less deter+inable at the ti+e of e+plo!+ent, such as those e+plo!ed in connection .ith a particular construction pro<ect, and 0seasonal e+plo!ees0 .hose e+plo!+ent b! its nature is onl! desirable for a

li+ited period of ti+e. 8ven then, an! e+plo!ee .ho has rendered at least one !ear of service, .hether continuous or inter+ittent, is dee+ed re3ular .ith respect to the activit! perfor+ed and .hile such activit! actuall! e2ists. It is of no +o+ent that petitioner hired respondents as 0talents.0 The fact that respondents received pre?a3reed 0talent fees0 instead of salaries, that the! did not observe the reCuired office hours, and that the! .ere per+itted to <oin other productions durin3 their free ti+e are not conclusive of the nature of their e+plo!+ent. Respondents cannot be considered 0talents0 because the! are not actors or actresses or radio specialists or +ere cler7s or utilit! e+plo!ees. The! are re3ular e+plo!ees .ho perfor+ several different duties under the control and direction of (-S?)-N e2ecutives and supervisors. Thus, there are t.o 7inds of re3ular e+plo!ees under the la./ *#, those en3a3ed to perfor+ activities .hich are necessar! or desirable in the usual business or trade of the e+plo!er4 and *", those casual e+plo!ees .ho have rendered at least one !ear of service, .hether continuous or bro7en, .ith respect to the activities in .hich the! are e+plo!ed.)8 The la. overrides such conditions .hich are pre<udicial to the interest of the .or7er .hose .ea7 bar3ainin3 situation necessitates the succor of the State. 9hat deter+ines .hether a certain e+plo!+ent is re3ular or other.ise is not the .ill or .ord of the e+plo!er, to .hich the .or7er oftenti+es acCuiesces, +uch less the procedure of hirin3 the e+plo!ee or the +anner of pa!in3 the salar! or the actual ti+e spent at .or7. It is the character of the activities perfor+ed in relation to the particular trade or business ta7in3 into account all the circu+stances, and in so+e cases the len3th of ti+e of its perfor+ance and its continued e2istence. )9 It is obvious that one !ear after the! .ere e+plo!ed b! petitioner, respondents beca+e re3ular e+plo!ees b! operation of la..)7 (dditionall!, respondents cannot be considered as pro<ect or pro3ra+ e+plo!ees because no evidence .as presented to sho. that the duration and scope of the pro<ect .ere deter+ined or specified at the ti+e of their en3a3e+ent. >nder e2istin3 <urisprudence, pro<ect could refer to t.o distin3uishable t!pes of activities. First, a pro<ect +a! refer to a particular <ob or underta7in3 that is .ithin the re3ular or usual business of the e+plo!er, but .hich is distinct and separate, and identifiable as such, fro+ the other underta7in3s of the co+pan!. Such <ob or underta7in3 be3ins and ends at deter+ined or deter+inable ti+es. Second, the ter+ pro<ect +a! also refer to a particular <ob or underta7in3 that is not .ithin the re3ular business of the e+plo!er. Such a <ob or underta7in3 +ust also be identifiabl! separate and distinct fro+ the ordinar! or re3ular business operations

of the e+plo!er. The <ob or underta7in3 also be3ins and ends at deter+ined or deter+inable ti+es.)D The principal test is .hether or not the pro<ect e+plo!ees .ere assi3ned to carr! out a specific pro<ect or underta7in3, the duration and scope of .hich .ere specified at the ti+e the e+plo!ees .ere en3a3ed for that pro<ect.)9 In this case, it is undisputed that respondents had continuousl! perfor+ed the sa+e activities for an avera3e of five !ears. Their assi3ned tas7s are necessar! or desirable in the usual business or trade of the petitioner. The persistin3 need for their services is sufficient evidence of the necessit! and indispensabilit! of such services to petitionerGs business or trade. 4( 9hile len3th of ti+e +a! not be a sole controllin3 test for pro<ect e+plo!+ent, it can be a stron3 factor to deter+ine .hether the e+plo!ee .as hired for a specific underta7in3 or in fact tas7ed to perfor+ functions .hich are vital, necessar! and indispensable to the usual trade or business of the e+plo!er.419e note further that petitioner did not report the ter+ination of respondentsG e+plo!+ent in the particular 0pro<ect0 to the Depart+ent of 'abor and 8+plo!+ent Re3ional Office havin3 <urisdiction over the .or7place .ithin 5B da!s follo.in3 the date of their separation fro+ .or7, usin3 the prescribed for+ on e+plo!eesG ter+inationI dis+issalsIsuspensions.4> (s 3leaned fro+ the records of this case, petitioner itself is not certain ho. to cate3ori1e respondents. In its earlier pleadin3s, petitioner classified respondents as pro3ra+ e+plo!ees, and in later pleadin3s, independent contractors. Pro3ra+ e+plo!ees, or pro<ect e+plo!ees, are different fro+ independent contractors because in the case of the latter, no e+plo!er?e+plo!ee relationship e2ists. PetitionerGs reliance on the rulin3 of this )ourt in Son1a v. (-S?)-N -roadcastin3 )orporation4) is +isplaced. In that case, the )ourt e2plained .h! ose Son1a, a .ell?7no.n television and radio personalit!, .as an independent contractor and not a re3ular e+plo!ee/ (. Selection and 8n3a3e+ent of 8+plo!ee (-S?)-N en3a3ed SONN(GS services to co?host its television and radio pro3ra+s because of SONN(GS peculiar s7ills, talent and celebrit! status. SONN( contends that the 0discretion used b! respondent in specificall! selectin3 and hirin3 co+plainant over other broadcasters of possibl! si+ilar e2perience and Cualification as co+plainant belies respondentGs clai+ of independent contractorship.0 Independent contractors often present the+selves to possess uniCue s7ills, e2pertise or talent to distin3uish the+ fro+ ordinar! e+plo!ees. The specific

selection and hirin3 of SONN(, because of his uniCue s7ills, talent and celebrit! status not possessed b! ordinar! e+plo!ees, is a circu+stance indicative, but not conclusive, of an independent contractual relationship. If SONN( did not possess such uniCue s7ills, talent and celebrit! status, (-S?)-N .ould not have entered into the (3ree+ent .ith SONN( but .ould have hired hi+ throu3h its personnel depart+ent <ust li7e an! other e+plo!ee. In an! event, the +ethod of selectin3 and en3a3in3 SONN( does not conclusivel! deter+ine his status. 9e +ust consider all the circu+stances of the relationship, .ith the control test bein3 the +ost i+portant ele+ent. -. Pa!+ent of 9a3es (-S?)-N directl! paid SONN( his +onthl! talent fees .ith no part of his fees 3oin3 to M MD). SONN( asserts that this +ode of fee pa!+ent sho.s that he .as an e+plo!ee of (-S?)-N. SONN( also points out that (-S?)-N 3ranted hi+ benefits and privile3es 0.hich he .ould not have en<o!ed if he .ere trul! the sub<ect of a valid <ob contract.0 (ll the talent fees and benefits paid to SONN( .ere the result of ne3otiations that led to the (3ree+ent. If SONN( .ere (-S?)-NGs e+plo!ee, there .ould be no need for the parties to stipulate on benefits such as 0SSS, Medicare, 2 2 2 and #5th +onth pa! .hich the la. auto+aticall! incorporates into ever! e+plo!er? e+plo!ee contract. 9hatever benefits SONN( en<o!ed arose fro+ contract and not because of an e+plo!er?e+plo!ee relationship. SONN(Gs talent fees, a+ountin3 to P5#@,BBB +onthl! in the second and third !ear, are so hu3e and out of the ordinar! that the! indicate +ore an independent contractual relationship rather than an e+plo!er?e+plo!ee relationship. (-S?)-N a3reed to pa! SONN( such hu3e talent fees precisel! because of SONN(GS uniCue s7ills, talent and celebrit! status not possessed b! ordinar! e+plo!ees. Obviousl!, SONN( actin3 alone possessed enou3h bar3ainin3 po.er to de+and and receive such hu3e talent fees for his services. The po.er to bar3ain talent fees .a! above the salar! scales of ordinar! e+plo!ees is a circu+stance indicative, but not conclusive, of an independent contractual relationship. The pa!+ent of talent fees directl! to SONN( and not to M MD) does not ne3ate the status of SONN( as an independent contractor. The parties e2pressl! a3reed on such +ode of pa!+ent. >nder the (3ree+ent, M MD) is the (=8NT of SONN(, to .ho+ M MD) .ould have to turn over an! talent fee accruin3 under the (3ree+ent.44 In the case at bar, ho.ever, the e+plo!er?e+plo!ee relationship bet.een petitioner

and respondents has been proven. First. In the selection and en3a3e+ent of respondents, no peculiar or uniCue s7ill, talent or celebrit! status .as reCuired fro+ the+ because the! .ere +erel! hired throu3h petitionerGs personnel depart+ent <ust li7e an! ordinar! e+plo!ee. Second. The so?called 0talent fees0 of respondents correspond to .a3es 3iven as a result of an e+plo!er?e+plo!ee relationship. Respondents did not have the po.er to bar3ain for hu3e talent fees, a circu+stance ne3atin3 independent contractual relationship. Third. Petitioner could al.a!s dischar3e respondents should it find their .or7 unsatisfactor!, and respondents are hi3hl! dependent on the petitioner for continued .or7. Fourth. The de3ree of control and supervision e2ercised b! petitioner over respondents throu3h its supervisors ne3ates the alle3ation that respondents are independent contractors. The presu+ption is that .hen the .or7 done is an inte3ral part of the re3ular business of the e+plo!er and .hen the .or7er, relative to the e+plo!er, does not furnish an independent business or professional service, such .or7 is a re3ular e+plo!+ent of such e+plo!ee and not an independent contractor. 48 The )ourt .ill peruse be!ond an! such a3ree+ent to e2a+ine the facts that t!pif! the partiesG actual relationship.49 It follo.s then that respondents are entitled to the benefits provided for in the e2istin3 )-( bet.een petitioner and its ran7?and?file e+plo!ees. (s re3ular e+plo!ees, respondents are entitled to the benefits 3ranted to all other re3ular e+plo!ees of petitioner under the )-(. 47 9e Cuote .ith approval the rulin3 of the appellate court, that the reason .h! production assistants .ere e2cluded fro+ the )-( is precisel! because the! .ere erroneousl! classified and treated as pro<ect e+plo!ees b! petitioner/ 2 2 2 The a.ard in favor of private respondents of the benefits accorded to ran7? and?file e+plo!ees of (-S?)-N under the #$$%?#$$$ )-( is a necessar! conseCuence of public respondentGs rulin3 that private respondents as production assistants of petitioner are re3ular e+plo!ees. The +onetar! a.ard is not considered as clai+s involvin3 the interpretation or i+ple+entation of the collective bar3ainin3 a3ree+ent. The reason .h! production assistants .ere e2cluded fro+ the said a3ree+ent is precisel! because the! .ere classified and treated as pro<ect e+plo!ees b! petitioner. (s earlier stated, it is not the .ill or .ord of the e+plo!er .hich deter+ines the

nature of e+plo!+ent of an e+plo!ee but the nature of the activities perfor+ed b! such e+plo!ee in relation to the particular business or trade of the e+plo!er. )onsiderin3 that 9e have clearl! found that private respondents are re3ular e+plo!ees of petitioner, their e2clusion fro+ the said )-( on the +isplaced belief of the parties to the said a3ree+ent that the! are pro<ect e+plo!ees, is therefore not proper. Findin3 said private respondents as re3ular e+plo!ees and not as +ere pro<ect e+plo!ees, the! +ust be accorded the benefits due under the said )ollective -ar3ainin3 (3ree+ent. ( collective bar3ainin3 a3ree+ent is a contract entered into b! the union representin3 the e+plo!ees and the e+plo!er. :o.ever, even the non?+e+ber e+plo!ees are entitled to the benefits of the contract. To accord its benefits onl! to +e+bers of the union .ithout an! valid reason .ould constitute undue discri+ination a3ainst non?+e+bers. ( collective bar3ainin3 a3ree+ent is bindin3 on all e+plo!ees of the co+pan!. Therefore, .hatever benefits are 3iven to the other e+plo!ees of (-S?)-N +ust li7e.ise be accorded to private respondents .ho .ere re3ular e+plo!ees of petitioner.4D -esides, onl! talent?artists .ere e2cluded fro+ the )-( and not production assistants .ho are re3ular e+plo!ees of the respondents. Moreover, under (rticle #@B" of the Ne. )ivil )ode/ 0In case of doubt, all labor le3islation and all labor contracts shall be construed in favor of the safet! and decent livin3 of the laborer.0 IN 'I=:T OF ('' T:8 FOR8=OIN=, the petition is D8NI8D for lac7 of +erit. The assailed Decision and Resolution of the )ourt of (ppeals in )(?=.R. SP No. @%E&" are (FFIRM8D. )osts a3ainst petitioner. SO ORD8R8D. $an aniban, C..., C%airperson, 2nares-'antia o, A&stria-!artinez, C%ico)azario, ...., concur. Foo.!o.e) 1 Penned b! (ssociate ustice Mariano ). Del )astillo, .ith (ssociate ustices Rodri3o V. )osic SUPREME COURT Manila T:IRD DIVISION G.R. No. 1'954& Febr? r@ 1%, $((9

COCA*COLA BOTTLERS P,ILS., INC., Petitioner, vs. ALAN M. AGITO, REGOLO S. OCA III, ERNESTO G. ALARIAO, <R., ALFONSO PAA, <R., DEMPSTER P. ONG, URRIFUIA T. AR#IN, GIL ,. FRANCISCO, !" ED:IN M. GOLE/, Respondents. D8)ISION C,ICO*NA/ARIO, J.: This is a Petition for Revie. on )ertiorari, under Rule FE of the Rules of )ourt, assailin3 the Decision1 dated #$ Februar! "BB@, pro+ul3ated b! the )ourt of (ppeals in )(?=.R. SP No. &E5"B, reversin3 the Resolution >rendered on 5B October "BB5 b! the National 'abor Relations )o++ission *N'R), in N'R) N)R )( No. B5%F$F?B5. The )ourt of (ppeals, in its assailed Decision, declared that respondents (lan M. (3ito, Re3olo S. Oca III, 8rnesto =. (lariao, r., (lfonso Paa, r., De+pster P. On3, >rriCuia T. (rvin, =il :. Francisco, and 8d.in M. =ole1 .ere re3ular e+plo!ees of petitioner )oca?)ola -ottlers Phils., Inc4 and that Interserve Mana3e+ent V Manpo.er Resources, Inc. *Interserve, .as a labor?onl! contractor, .hose presence .as intended +erel! to preclude respondents fro+ acCuirin3 tenurial securit!. Petitioner is a do+estic corporation dul! re3istered .ith the Securities and 82chan3e )o++ission *S8), and en3a3ed in +anufacturin3, bottlin3 and distributin3 soft drin7 bevera3es and other allied products. On #E (pril "BB", respondents filed before the N'R) t.o co+plaints a3ainst petitioner, Interserve, Peerless Inte3rated Services, Inc., -etter -uilders, Inc., and 82cellent Partners, Inc. for reinstate+ent .ith bac7.a3es, re3ulari1ation, nonpa!+ent of #5th +onth pa!, and da+a3es. The t.o cases, doc7eted as N'R) N)R )ase No. BF?B"5FE?"BB" and N'R) N)R )ase No. BE?B5#5@?B", .ere consolidated. Respondents alle3ed in their Position Paper that the! .ere sales+en assi3ned at the 'a3ro Sales Office of petitioner. The! had been in the e+plo! of petitioner for !ears, but .ere not re3ulari1ed. Their e+plo!+ent .as ter+inated on & (pril "BB" .ithout <ust cause and due process. :o.ever, the! failed to state the reasonIs for filin3 a co+plaint a3ainst Interserve4 Peerless Inte3rated Services, Inc.4 -etter -uilders, Inc.4 and 82cellent Partners, Inc.) Petitioner filed its Position Paper *.ith Motion to Dis+iss,, 4 .here it averred that respondents .ere e+plo!ees of Interserve .ho .ere tas7ed to perfor+ contracted services in accordance .ith the provisions of the )ontract of Services 8 e2ecuted

bet.een petitioner and Interserve on "5 March "BB". Said )ontract bet.een petitioner and Interserve, coverin3 the period of # (pril "BB" to 5B Septe+ber "BB", constituted le3iti+ate <ob contractin3, 3iven that the latter .as a bona fide independent contractor .ith substantial capital or invest+ent in the for+ of tools, eCuip+ent, and +achiner! necessar! in the conduct of its business. To prove the status of Interserve as an independent contractor, petitioner presented the follo.in3 pieces of evidence/ *#, the (rticles of Incorporation of Interserve49 *", the )ertificate of Re3istration of Interserve .ith the -ureau of Internal Revenue47 *5, the Inco+e Ta2 Return, .ith (udited Financial State+ents, of Interserve for "BB#4D and *F, the )ertificate of Re3istration of Interserve as an independent <ob contractor, issued b! the Depart+ent of 'abor and 8+plo!+ent *DO'8,.9 (s a result, petitioner asserted that respondents .ere e+plo!ees of Interserve, since it .as the latter .hich hired the+, paid their .a3es, and supervised their .or7, as proven b!/ *#, respondentsG Personal Data Files in the records of Interserve41( *", respondentsG )ontract of Te+porar! 8+plo!+ent .ith Interserve411 and *5, the pa!roll records of Interserve.1> Petitioner, thus, sou3ht the dis+issal of respondentsG co+plaint a3ainst it on the 3round that the 'abor (rbiter did not acCuire <urisdiction over the sa+e in the absence of an e+plo!er?e+plo!ee relationship bet.een petitioner and the respondents.1) In a Decision dated "& Ma! "BB5, the 'abor (rbiter found that respondents .ere e+plo!ees of Interserve and not of petitioner. She reasoned that the standard put forth in (rticle "&B of the 'abor )ode for deter+inin3 re3ular e+plo!+ent * i.e., that the e+plo!ee is perfor+in3 activities that are necessar! and desirable in the usual business of the e+plo!er, .as not deter+inative of the issue of .hether an e+plo!er?e+plo!ee relationship e2isted bet.een petitioner and respondents. 9hile respondents perfor+ed activities that .ere necessar! and desirable in the usual business or trade of petitioner, the 'abor (rbiter underscored that respondentsG functions .ere not indispensable to the principal business of petitioner, .hich .as +anufacturin3 and bottlin3 soft drin7 bevera3es and si+ilar products. The 'abor (rbiter placed considerable .ei3ht on the fact that Interserve .as re3istered .ith the DO'8 as an independent <ob contractor, .ith total assets a+ountin3 to P#,F5$,@&E.BB as of 5# Dece+ber "BB#. It .as Interserve that 7ept and +aintained respondentsG e+plo!ee records, includin3 their Personal Data Sheets4 )ontracts of 8+plo!+ent4 and re+ittances to the Social Securities S!ste+

*SSS,, Medicare and Pa3?ibi3 Fund, thus, further supportin3 the 'abor (rbiterGs findin3 that respondents .ere e+plo!ees of Interserve. She ruled that the circulars, rules and re3ulations .hich petitioner issued fro+ ti+e to ti+e to respondents .ere not indicative of control as to +a7e the latter its e+plo!ees. Nevertheless, the 'abor (rbiter directed Interserve to pa! respondents their pro? rated #5th +onth benefits for the period of anuar! "BB" until (pril "BB".14 In the end, the 'abor (rbiter decreed/ 9:8R8FOR8, <ud3+ent is hereb! rendered findin3 that Oherein respondentsP are e+plo!ees of Oherein petitionerP INT8RS8RV8 M(N(=8M8NT V M(NPO98R R8SO>R)8S, IN). )onco+itantl!, respondent Interserve is further ordered to pa! OrespondentsP their pro?rated #5th +onth pa!. The co+plaints a3ainst )O)(?)O'( -OTT'8RS P:I'S., IN). is DISMISMM8D for lac7 of +erit. In li7e +anner the co+plaints a3ainst P88R'8SS INT8=R(T8D S8RVI)8S, IN)., -8TT8R ->I'DIN= IN). and 8J)8''8NT P(RTN8RS )OOP8R(TIV8 are DISMISS8D for failure of co+plainants to pursue a3ainst the+. Other clai+s are dis+issed for lac7 of +erit. The co+putation of the )o+putation and 82a+ination >nit, this )o++ission if *sic, +ade part of this Decision. 18 >nsatisfied .ith the fore3oin3 Decision of the 'abor (rbiter, respondents filed an appeal .ith the N'R), doc7eted as N'R) N)R )( No. B5%F$F?B5. In their Me+orandu+ of (ppeal,19 respondents +aintained that contrar! to the findin3 of the 'abor (rbiter, their .or7 .as indispensable to the principal business of petitioner. Respondents supported their clai+ .ith copies of the Deliver! (3ree+ent17 bet.een petitioner and TRMD Incorporated, statin3 that petitioner .as 0en3a3ed in the +anufacture, distribution and sale of soft drin7s and other related products .ith various plants and sales offices and .arehouses located all over the Philippines.0 Moreover, petitioner supplied the tools and eCuip+ent used b! respondents in their <obs such as for7lifts, pallet, etc. Respondents .ere also reCuired to .or7 in the .arehouses, sales offices, and plants of petitioner. Respondents pointed out that, in contrast, Interserve did not o.n truc7s, pallets cartillas, or an! other eCuip+ent necessar! in the sale of )oca?)ola products. Respondents further averred in their Me+orandu+ of (ppeal that petitioner e2ercised control over .or7ers supplied b! various contractors. Respondents cited

as an e2a+ple the case of Raul (rena<o *(rena<o,, .ho, <ust li7e the+, .or7ed for petitioner, but .as +ade to appear as an e+plo!ee of the contractor Peerless Inte3rated Services, Inc. (s proof of control b! petitioner, respondents sub+itted copies of/ *#, a Me+orandu+1D dated ## (u3ust #$$& issued b! Vicente D! *D!,, a supervisor of petitioner, addressed to (rena<o, suspendin3 the latter fro+ .or7 until he e2plained his disrespectful acts to.ard the supervisor .ho cau3ht hi+ sleepin3 durin3 .or7 hours4 *", a Me+orandu+19 dated #" (u3ust #$$& a3ain issued b! D! to (rena<o, infor+in3 the latter that the co+pan! had ta7en a +ore lenient and tolerant position re3ardin3 his offense despite havin3 found cause for his dis+issal4 *5, Me+orandu+>( issued b! D! to the personnel of Peerless Inte3rated Services, Inc., reCuirin3 the latter to present their ti+el! reCuest for leave or +edical certificates for their absences4 *F, Personnel 9or7ers Schedules, >1 prepared b! R- )hua, another supervisor of petitioner4 *E, Dail! Sales Monitorin3 Report prepared b! petitioner4>> and *%, the )onventional Route S!ste+ Proposed Set?up of petitioner. >) The N'R), in a Resolution dated 5B October "BB5, affir+ed the 'abor (rbiterGs Decision dated "& Ma! "BB5 and pronounced that no e+plo!er?e+plo!ee relationship e2isted bet.een petitioner and respondents. It reiterated the findin3s of the 'abor (rbiter that Interserve .as an independent contractor as evidenced b! its substantial assets and re3istration .ith the DO'8. In addition, it .as Interserve .hich hired and paid respondentsG .a3es, as .ell as paid and re+itted their SSS, Medicare, and Pa3?ibi3 contributions. Respondents li7e.ise failed to convince the N'R) that the instructions issued and trainin3s conducted b! petitioner proved that petitioner e2ercised control over respondents as their e+plo!er. >4 The dispositive part of the N'R) Resolution states/>8 9:8R8FOR8, the instant appeal is hereb! DISMISS8D for lac7 of +erit. :o.ever, respondent Interserve Mana3e+ent V Manpo.er Resources, Inc., is hereb! ordered to pa! the Oherein respondentsP their pro?rated #5th +onth pa!. (33rieved once +ore, respondents sou3ht recourse .ith the )ourt of (ppeals b! filin3 a Petition for Certiorariunder Rule %E, doc7eted as )(?=.R. SP No. &E5"B. The )ourt of (ppeals pro+ul3ated its Decision on $ Februar! "BB@, reversin3 the N'R) Resolution dated 5B October "BB5. The appellate court ruled that Interserve .as a labor?onl! contractor, .ith insufficient capital and invest+ents for the services .hich it .as contracted to perfor+. 9ith onl! PE#B,BBB.BB invested in its service vehicles and P"BB,BBB.BB in its +achineries and eCuip+ent, Interserve .ould be hard?pressed to +eet the de+ands of dail! soft drin7 deliveries of petitioner in the 'a3ro area. The )ourt (ppeals concluded that the respondents

used the eCuip+ent, tools, and facilities of petitioner in the da!?to?da! sales operations. (dditionall!, the )ourt of (ppeals deter+ined that petitioner had effective control over the +eans and +ethod of respondentsG .or7 as evidenced b! the Dail! Sales Monitorin3 Report, the )onventional Route S!ste+ Proposed Set?up, and the +e+oranda issued b! the supervisor of petitioner addressed to .or7ers, .ho, li7e respondents, .ere supposedl! supplied b! contractors. The appellate court dee+ed that the respondents, .ho .ere tas7ed to deliver, distribute, and sell )oca?)ola products, carried out functions directl! related and necessar! to the +ain business of petitioner. The appellate court finall! noted that certain provisions of the )ontract of Service bet.een petitioner and Interserve su33ested that the latterGs underta7in3 did not involve a specific <ob, but rather the suppl! of +anpo.er. The decretal portion of the Decision of the )ourt of (ppeals reads/>9 9:8R8FOR8, the petition is =R(NT8D. The assailed Resolutions of public respondent N'R) are R8V8RS8D and S8T (SID8. The case is re+anded to the N'R) for further proceedin3s. Petitioner filed a Motion for Reconsideration, .hich the )ourt of (ppeals denied in a Resolution, dated 5# (u3ust "BB@.>7 :ence, the present Petition, in .hich the follo.in3 issues are raised>D/ I 9:8T:8R OR NOT T:8 )O>RT OF (PP8('S ()T8D IN ())ORD(N)8 9IT: 8VID8N)8 ON R8)ORD, (PP'I)(-'8 '(9S (ND 8ST(-'IS:8D >RISPR>D8N)8 9:8N IT R>'8D T:(T INT8RS8RV8 IS ( '(-OR?ON'; )ONTR()TOR4 II 9:8T:8R OR NOT T:8 )O>RT OF (PP8('S ()T8D IN ())ORD(N)8 9IT: (PP'I)(-'8 '(9S (ND 8ST(-'IS:8D >RISPR>D8N)8 9:8N IT )ON)'>D8D T:(T R8SPOND8NTS P8RFORM8D 9ORL N8)8SS(R; (ND D8SIR(-'8 TO T:8 ->SIN8SS OF OP8TITION8RP4 III 9:8T:8R OR NOT T:8 )O>RT OF (PP8('S )OMMITT8D

S8RIO>S 8RROR 9:8N IT D8)'(R8D T:(T R8SPOND8NTS 98R8 8MP'O;88S OF OP8TITION8RP, 8V8N (-S8NT T:8 FO>R 8'8M8NTS INDI)(TIV8 OF (N 8MP'O;M8NT R8'(TIONS:IP4 (ND IV 9:8T:8R OR NOT T:8 )O>RT OF (PP8('S S8RIO>S'; 8RR8D 9:8N IT )ON)'>D8D T:(T INT8RS8RV8 9(S 8N=(=8D -; OP8TITION8RP TO S>PP'; M(NPO98R ON';. The )ourt ascertains that the funda+ental issue in this case is .hether Interserve is a le3iti+ate <ob contractor. Onl! b! resolvin3 such issue .ill the )ourt be able to deter+ine .hether an e+plo!er?e+plo!ee relationship e2ists bet.een petitioner and the respondents. To settle the sa+e issue, ho.ever, the )ourt +ust necessaril! revie. the factual findin3s of the )ourt of (ppeals and loo7 into the evidence presented b! the parties on record. (s a 3eneral rule, factual findin3s of the )ourt of (ppeals are bindin3 upon the Supre+e )ourt. One e2ception to this rule is .hen the factual findin3s of the for+er are contrar! to those of the trial court, or the lo.er ad+inistrative bod!, as the case +a! be. This )ourt is obli3ed to resolve an issue of fact herein due to the incon3ruent findin3s of the 'abor (rbiter and the N'R) and those of the )ourt of (ppeals. >9 The relations .hich +a! arise in a situation, .here there is an e+plo!er, a contractor, and e+plo!ees of the contractor, are identified and distin3uished under (rticle #B% of the 'abor )ode/ (rticle #B%. )ontractor or subcontractor. ? 9henever an e+plo!er enters into a contract .ith another person for the perfor+ance of the for+erGs .or7, the e+plo!ees of the contractor and of the latterGs subcontractor, if an!, shall be paid in accordance .ith the provisions of this )ode. In the event that the contractor or subcontractor fails to pa! the .a3es of his e+plo!ees in accordance .ith this )ode, the e+plo!er shall be <ointl! and severall! liable .ith his contractor or subcontractor to such e+plo!ees to the e2tent of the .or7 perfor+ed under the contract, in the sa+e +anner and e2tent that he is liable to e+plo!ees directl! e+plo!ed b! hi+. The Secretar! of 'abor +a!, b! appropriate re3ulations, restrict or prohibit the contractin3 out of labor to protect the ri3hts of .or7ers established under this

)ode. In so prohibitin3 or restriction, he +a! +a7e appropriate distinctions bet.een labor?onl! contractin3 and <ob contractin3 as .ell as differentiations .ithin these t!pes of contractin3 and deter+ine .ho a+on3 the parties involved shall be considered the e+plo!er for purposes of this )ode, to prevent an! violation or circu+vention of an! provision of this )ode. There is 0labor?onl!0 contractin3 .here the person suppl!in3 .or7ers to an e+plo!ee does not have substantial capital or invest+ent in the for+ of tools, eCuip+ent, +achineries, .or7 pre+ises, a+on3 others, and the .or7ers recruited and placed b! such persons are perfor+in3 activities .hich are directl! related to the principal business of such e+plo!er. In such cases, the person or inter+ediar! shall be considered +erel! as an a3ent of the e+plo!er .ho shall be responsible to the .or7ers in the sa+e +anner and e2tent as if the latter .ere directl! e+plo!ed b! hi+. The afore?Cuoted provision reco3ni1es t.o possible relations a+on3 the parties/ *#, the per+itted le3iti+ate <ob contract, or *", the prohibited labor?onl! contractin3. ( le3iti+ate <ob contract, .herein an e+plo!er enters into a contract .ith a <ob contractor for the perfor+ance of the for+erGs .or7, is per+itted b! la.. Thus, the e+plo!er?e+plo!ee relationship bet.een the <ob contractor and his e+plo!ees is +aintained. In le3iti+ate <ob contractin3, the la. creates an e+plo!er?e+plo!ee relationship bet.een the e+plo!er and the contractorGs e+plo!ees onl! for a li+ited purpose, i.e., to ensure that the e+plo!ees are paid their .a3es. The e+plo!er beco+es <ointl! and severall! liable .ith the <ob contractor onl! for the pa!+ent of the e+plo!eesG .a3es .henever the contractor fails to pa! the sa+e. Other than that, the e+plo!er is not responsible for an! clai+ +ade b! the contractorGs e+plo!ees.)( On the other hand, labor?onl! contractin3 is an arran3e+ent .herein the contractor +erel! acts as an a3ent in recruitin3 and suppl!in3 the principal e+plo!er .ith .or7ers for the purpose of circu+ventin3 labor la. provisions settin3 do.n the ri3hts of e+plo!ees. It is not condoned b! la.. ( findin3 b! the appropriate authorities that a contractor is a 0labor?onl!0 contractor establishes an e+plo!er? e+plo!ee relationship bet.een the principal e+plo!er and the contractorGs e+plo!ees and the for+er beco+es solidaril! liable for all the ri3htful clai+s of the e+plo!ees. )1 Section E of the Rules I+ple+entin3 (rticles #B%?#B$ of the 'abor )ode, as a+ended, provides the 3uidelines in deter+inin3 .hether labor?onl! contractin3 e2ists/

Section E. Prohibition a3ainst labor?onl! contractin3. 'abor?onl! contractin3 is hereb! declared prohibited. For this purpose, labor?onl! contractin3 shall refer to an arran3e+ent .here the contractor or subcontractor +erel! recruits, supplies, or places .or7ers to perfor+ a <ob, .or7 or service for a principal, and an! of the follo.in3 ele+ents are OisP present/ i, The contractor or subcontractor does not have substantial capital or invest+ent .hich relates to the <ob, .or7, or service to be perfor+ed and the e+plo!ees recruited, supplied or placed b! such contractor or subcontractor are perfor+in3 activities .hich are directl! related to the +ain business of the principal4 or ii, The contractor does not e2ercise the ri3ht to control the perfor+ance of the .or7 of the contractual e+plo!ee. The fore3oin3 provisions shall be .ithout pre<udice to the application of (rticle "F&*), of the 'abor )ode, as a+ended. 0Substantial capital or invest+ent0 refers to capital stoc7s and subscribed capitali1ation in the case of corporations, tools, eCuip+ent, i+ple+ents, +achineries and .or7 pre+ises, actuall! and directl! used b! the contractor or subcontractor in the perfor+ance or co+pletion of the <ob, .or7, or service contracted out. The 0ri3ht to control0 shall refer to the ri3ht reversed to the person for .ho+ the services of the contractual .or7ers are perfor+ed, to deter+ine not onl! the end to be achieved, but also the +anner and +eans to be used in reachin3 that end. *8+phasis supplied., 9hen there is labor?onl! contractin3, Section @ of the sa+e i+ple+entin3 rules, describes the conseCuences thereof/ Section @. 82istence of an e+plo!er?e+plo!ee relationship.AThe contractor or subcontractor shall be considered the e+plo!er of the contractual e+plo!ee for purposes of enforcin3 the provisions of the 'abor )ode and other social le3islation. The principal, ho.ever, shall be solidaril! liable .ith the contractor in the event of an! violation of an! provision of the 'abor )ode, includin3 the failure to pa! .a3es. The principal shall be dee+ed the e+plo!er of the contractual e+plo!ee in an! of the follo.in3 case, as declared b! a co+petent authorit!/ a. .here there is labor?onl! contractin34 or b. .here the contractin3 arran3e+ent falls .ithin the prohibitions provided in

Section % *Prohibitions, hereof. (ccordin3 to the fore3oin3 provision, labor?onl! contractin3 .ould 3ive rise to/ *#, the creation of an e+plo!er?e+plo!ee relationship bet.een the principal and the e+plo!ees of the contractor or sub?contractor4 and *", the solidar! liabilit! of the principal and the contractor to the e+plo!ees in the event of an! violation of the 'abor )ode. Petitioner ar3ues that there could not have been labor?onl! contractin3, since respondents did not perfor+ activities that .ere indispensable to petitionerGs principal business. (nd, even assu+in3 that the! did, such fact alone does not establish an e+plo!er?e+plo!ee relationship bet.een petitioner and the respondents, since respondents .ere unable to sho. that petitioner e2ercised the po.er to select and hire the+, pa! their .a3es, dis+iss the+, and control their conduct. The ar3u+ent of petitioner is untenable. The la. clearl! establishes an e+plo!er?e+plo!ee relationship bet.een the principal e+plo!er and the contractorGs e+plo!ee upon a findin3 that the contractor is en3a3ed in 0labor?onl!0 contractin3. (rticle #B% of the 'abor )ode cate3oricall! states/ 0There is Klabor?onl!G contractin3 .here the person suppl!in3 .or7ers to an e+plo!ee does not have substantial capital or invest+ent in the for+ of tools, eCuip+ent, +achineries, .or7 pre+ises, a+on3 others, !" the .or7ers recruited and placed b! such persons are perfor+in3 activities .hich are directl! related to the principal business of such e+plo!er.0 Thus, perfor+in3 activities directl! related to the principal business of the e+plo!er is onl! one of the t.o indicators that 0labor?onl!0 contractin3 e2ists4 the other is lac7 of substantial capital or invest+ent. The )ourt finds that both indicators e2ist in the case at bar. Respondents .or7ed for petitioner as sales+en, .ith the e2ception of respondent =il Francisco .hose <ob .as desi3nated as lead+an. In the Deliver! (3ree+ent)> bet.een petitioner and TRMD Incorporated, it is stated that petitioner is en3a3ed in the +anufacture, "1).r1b?.1o! !" ) 6e of softdrin7s and other related products. The .or7 of respondents, constitutin3 distribution and sale of )oca?)ola products, is clearl! indispensable to the principal business of petitioner. The repeated re?hirin3 of so+e of the respondents supports this findin3.))Petitioner also does not contradict respondentsG alle3ations that the for+er has Sales Depart+ents and Sales Offices in its various offices, plants, and .arehouses4 and that petitioner hires Re3ional Sales Supervisors and District Sales Supervisors .ho supervise and control the sales+en and sales route helpers.)4

(s to the supposed substantial capital and invest+ent reCuired of an independent <ob contractor, petitioner calls the attention of the )ourt to the authori1ed capital stoc7 of Interserve a+ountin3 to P",BBB,BBB.BB.)8 It cites as authorit! Filipinas S!nthetic Fiber )orp. v. National 'abor Relations )o++ission )9 and Frondo1o v. National 'abor Relations )o++ission,)7 .here the contractorsG authori1ed capital stoc7 of P#,%BB,BBB.BB and P",BBB,BBB.BB, respectivel!, .ere considered substantial for the purpose of concludin3 that the! .ere le3iti+ate <ob contractors. Petitioner also refers to Neri v. National 'abor Relations )o++ission )D .here it .as held that a contractor ceases to be a labor?onl! contractor b! havin3 substantial capital alone, .ithout invest+ent in tools and eCuip+ent. This )ourt is unconvinced. (t the outset, the )ourt clarifies that althou3h Interserve has an authori1ed capital stoc7 a+ountin3 toP",BBB,BBB.BB, onl! P%"E,BBB.BB thereof .as paid up as of 5# Dece+ber "BB#. The )ourt does not set an absolute fi3ure for .hat it considers substantial capital for an independent <ob contractor, but it +easures the sa+e a3ainst the t!pe of .or7 .hich the contractor is obli3ated to perfor+ for the principal. :o.ever, this is rendered i+possible in this case since the )ontract bet.een petitioner and Interserve does not even specif! the .or7 or the pro<ect that needs to be perfor+ed or co+pleted b! the latterGs e+plo!ees, and uses the dubious phrase 0tas7s and activities that are considered contractible under e2istin3 la.s and re3ulations.0 8ven in its pleadin3s, petitioner carefull! sidesteps identif!in3 or describin3 the e2act nature of the services that Interserve .as obli3ated to render to petitioner. The i+portance of identif!in3 .ith particularit! the .or7 or tas7 .hich Interserve .as supposed to acco+plish for petitioner beco+es even +ore evident, considerin3 that the (rticles of Incorporation of Interserve states that its pri+ar! purpose is to operate, conduct, and +aintain the business of <anitorial and allied services. )9 -ut respondents .ere hired as sales+en and lead+an for petitioner. The )ourt cannot, under such a+bi3uous circu+stances, +a7e a reasonable deter+ination if Interserve had substantial capital or invest+ent to underta7e the <ob it .as contractin3 .ith petitioner. Petitioner cannot see7 refu3e in Neri v. National 'abor Relations )o++ission. >nli7e in Neri, petitioner .as unable to prove in the instant case that Interserve had substantial capitali1ation to be an independent <ob contractor. In San Mi3uel )orporation v. M(8R) Inte3rated Services, Inc., 4( therein petitioner San Mi3uel )orporation si+ilarl! invo7ed Neri, but .as rebuffed b! the )ourt based on the follo.in3 ratiocination41 / Petitioner also ascribes as error the failure of the )ourt of (ppeals to appl! the

rulin3 in Neri v. N'R). In that case, it .as held that the la. did not reCuire one to possess both substantial capital and invest+ent in the for+ of tools, eCuip+ent, +achiner!, .or7 pre+ises, a+on3 others, to be considered a <ob contractor. The second condition to establish per+issible <ob contractin3 .as sufficientl! +et if one possessed either attribute. (ccordin3l!, petitioner alle3ed that the appellate court and the N'R) erred .hen the! declared M(8R) a labor?onl! contractor despite the findin3 that M(8R) had invest+ents a+ountin3 to PF,%B&,B&B.BB consistin3 of buildin3s, +achiner! and eCuip+ent. :o.ever, in Vino!a v. N'R), .e clarified that it .as not enou3h to sho. substantial capitali1ation or invest+ent in the for+ of tools, eCuip+ent, +achiner! and .or7 pre+ises, etc., to be considered an independent contractor. In fact, <urisprudential holdin3s .ere to the effect that in deter+inin3 the e2istence of an independent contractor relationship, several factors +a! be considered, such as, but not necessaril! confined to, .hether the contractor .as carr!in3 on an independent business4 the nature and e2tent of the .or74 the s7ill reCuired4 the ter+ and duration of the relationship4 the ri3ht to assi3n the perfor+ance of specified pieces of .or74 the control and supervision of the .or7ers4 the po.er of the e+plo!er .ith respect to the hirin3, firin3 and pa!+ent of the .or7ers of the contractor4 the control of the pre+ises4 the dut! to suppl! pre+ises, tools, appliances, +aterials and labor4 and the +ode, +anner and ter+s of pa!+ent. In Neri, the )ourt considered not onl! the fact that respondent -uildin3 )are )orporation *-)), had substantial capitali1ation but noted that --) carried on an independent business and perfor+ed its contract accordin3 to its o.n +anner and +ethod, free fro+ the control and supervision of its principal in all +atters e2cept as to the results thereof. The )ourt li7e.ise +entioned that the e+plo!ees of -)) .ere en3a3ed to perfor+ specific special services for their principal. The status of -)) had also been passed upon b! the )ourt in a previous case .here it .as found to be a Cualified <ob contractor because it .as a 0bi3 fir+ .hich services a+on3 others, a universit!, an international ban7, a bi3 local ban7, a hospital center, 3overn+ent a3encies, etc.0 Further+ore, there .ere onl! t.o *", co+plainants in that case .ho .ere not onl! selected and hired b! the contractor before bein3 assi3ned to .or7 in the )a3a!an de Oro branch of F8-T) but the )ourt also found that the contractor +aintained effective supervision and control over the+. Thus, in San Mi3uel )orporation, the invest+ent of M(8R), the contractor therein, in the for+ of buildin3s, tools, and eCuip+ent of +ore than PF,BBB,BBB.BB

did not i+press the )ourt, .hich still declared M(8R) to be a labor?onl! contractor. In another case, Dole Philippines, Inc. v. 8steva, 4> the )ourt did not reco3ni1e the contractor therein as a le3iti+ate <ob contractor, despite its paid?up capital of over PF,BBB,BBB.BB, in the absence of substantial invest+ent in tools and eCuip+ent used in the services it .as renderin3. Insistin3 that Interserve had substantial invest+ent, petitioner assails, for bein3 purel! speculative, the findin3 of the )ourt of (ppeals that the service vehicles and eCuip+ent of Interserve, .ith the values of PE#B,BBB.BB andP"BB,BBB.BB, respectivel!, could not have +et the de+ands of the )oca?)ola deliveries in the 'a3ro area. ;et a3ain, petitioner fails to persuade. The contractor, not the e+plo!ee, has the burden of proof that it has the substantial capital, invest+ent, and tool to en3a3e in <ob contractin3. 4) (lthou3h not the contractor itself *since Interserve no lon3er appealed the <ud3+ent a3ainst it b! the 'abor (rbiter,, said burden of proof herein falls upon petitioner .ho is invo7in3 the supposed status of Interserve as an independent <ob contractor. Noticeabl!, petitioner failed to sub+it evidence to establish that the service vehicles and eCuip+ent of Interserve, valued at PE#B,BBB.BB and P"BB,BBB.BB, respectivel!, .ere sufficient to carr! out its service contract .ith petitioner. )ertainl!, petitioner could have si+pl! provided the courts .ith records sho.in3 the deliveries that .ere underta7en b! Interserve for the 'a3ro area, the t!pe and nu+ber of eCuip+ent necessar! for such tas7, and the valuation of such eCuip+ent. (bsent evidence .hich a le3all! co+pliant co+pan! could have easil! provided, the )ourt .ill not presu+e that Interserve had sufficient invest+ent in service vehicles and eCuip+ent, especiall! since respondentsG alle3ation T that the! .ere usin3 eCuip+ent, such as for7lifts and pallets belon3in3 to petitioner, to carr! out their <obs T .as uncontroverted. In su+, Interserve did not have substantial capital or invest+ent in the for+ of tools, eCuip+ent, +achineries, and .or7 pre+ises4 and respondents, its supposed e+plo!ees, perfor+ed .or7 .hich .as directl! related to the principal business of petitioner. It is, thus, evident that Interserve falls under the definition of a 0labor? onl!0 contractor, under (rticle #B% of the 'abor )ode4 as .ell as Section E*i, of the Rules I+ple+entin3 (rticles #B%?#B$ of the 'abor )ode, as a+ended. The )ourt, ho.ever, does not stop at this findin3. It is also apparent that Interserve is a labor?onl! contractor under Section E*ii, 44 of the Rules I+ple+entin3 (rticles #B%?#B$ of the 'abor )ode, as a+ended, since it did not e2ercise the ri3ht to control the perfor+ance of the .or7 of respondents.

The lac7 of control of Interserve over the respondents can be 3leaned fro+ the )ontract of Services bet.een Interserve *as the )ONTR()TOR, and petitioner *as the )'I8NT,, pertinent portions of .hich are reproduced belo./ 9:8R8(S, the )ONTR()TOR is en3a3ed in the business, a+on3 others, of perfor+in3 andIor underta7in3, +ana3in3 for consideration, varied pro<ects, <obs and other related +ana3e+ent?oriented services4 9:8R8(S, the )ONTR()TOR .arrants that it has the necessar! capital, e2pertise, technical 7no.?ho. and a tea+ of professional +ana3e+ent 3roup and personnel to underta7e and assu+e the responsibilit! to carr! out the above +entioned pro<ect and services4 9:8R8(S, the )'I8NT is desirous of utili1in3 the services and facilities of the )ONTR()TOR for e+er3enc! needs, rush <obs, pea7 product loads, te+porar!, seasonal and other special pro<ect reCuire+ents the e2tent that the available .or7 of the )'I8NT can properl! be done b! an independent )ONTR()TOR per+issible under e2istin3 la.s and re3ulations4 9:8R8(S, the )ONTR()TOR has offered to perfor+ specific <obsI.or7s at the )'I8NT as stated heretofore, under the ter+s and conditions herein stated, and the )'I8NT has accepted the offer. NO9 T:8R8FOR8, for and in consideration of the fore3oin3 pre+ises and of the +utual covenants and stipulations hereinafter set forth, the parties have hereto have stated and the )'I8NT has accepted the offer/ #. The )ONTR()TOR a3rees and underta7es to perfor+ andIor provide for the )'I8NT, on a non?e2clusive basis for tas7s or activities that are considered contractible under e2istin3 la.s and re3ulations, as +a! be needed b! the )'I8NT fro+ ti+e to ti+e. ". To carr! out the underta7in3s specified in the i++ediatel! precedin3 para3raph, the )ONTR()TOR shall e+plo! the necessar! personnel li7e Route :elpers, Sales+en, Drivers, )lericals, 8ncoders V PD .ho are at least TechnicalIVocational courses 3raduates provided .ith adeCuate unifor+s and appropriate identification cards, .ho are .arranted b! the )ONTR()TOR to be so trained as to efficientl!, full! and speedil! acco+plish the .or7 and services underta7en herein b! the )ONTR()TOR. The )ONTR()TOR represents that its personnel shall be in such nu+ber as .ill be sufficient to cope .ith the reCuire+ents of the services and .or7 herein underta7en and that such personnel shall be ph!sicall! fit, of 3ood +oral character and has not been convicted of an! cri+e. The )'I8NT, ho.ever, +a! reCuest for the

replace+ent of the )ONTR()TORGS personnel if fro+ its <ud3+ent, the <obs or the pro<ects bein3 done could not be co+pleted .ithin the ti+e specified or that the Cualit! of the desired result is not bein3 achieved. 5. It is a3reed and understood that the )ONTR()TORGS personnel .ill co+pl! .ith )'I8NT, )'I8NTGS policies, rules and re3ulations and .ill be sub<ected on?the?spot search b! )'I8NT, )'I8NTGS dul! authori1ed 3uards or securit! +en on dut! ever! ti+e the assi3ned personnel enter and leave the pre+ises durin3 the entire duration of this a3ree+ent. F. The )ONTR()TOR further .arrants to +a7e available at ti+es relievers andIor replace+ents to ensure continuous and uninterrupted service as in the case of absences of an! personnel above +entioned, and to e2ercise the necessar! and due supervision over the .or7 of its personnel.48 Para3raph 5 of the )ontract specified that the personnel of contractor Interserve, .hich included the respondents, .ould co+pl! .ith 0)'I8NT0 as .ell as 0)'I8NTGs policies, rules and re3ulations.0 It even reCuired Interserve personnel to sub<ect the+selves to on?the?spot searches b! petitioner or its dul! authori1ed 3uards or securit! +en on dut! ever! ti+e the said personnel entered and left the pre+ises of petitioner. Said para3raph e2plicitl! established the control of petitioner over the conduct of respondents. (lthou3h under para3raph F of the sa+e )ontract, Interserve .arranted that it .ould e2ercise the necessar! and due supervision of the .or7 of its personnel, there is a dearth of evidence to de+onstrate the e2tent or de3ree of supervision e2ercised b! Interserve over respondents or the +anner in .hich it .as actuall! e2ercised. There is even no sho.in3 that Interserve had representatives .ho supervised respondentsG .or7 .hile the! .ere in the pre+ises of petitioner. (lso si3nificant .as the ri3ht of petitioner under para3raph " of the )ontract to 0reCuest the replace+ent of the )ONTR()TORGS personnel.0 True, this ri3ht .as convenientl! Cualified b! the phrase 0if fro+ its <ud3+ent, the <obs or the pro<ects bein3 done could not be co+pleted .ithin the ti+e specified or that the Cualit! of the desired result is not bein3 achieved,0 but such Cualification .as rendered +eanin3less b! the fact that the )ontract did not stipulate .hat .or7 or <ob the personnel needed to co+plete, the ti+e for its co+pletion, or the results desired. The said provision left a 3ap .hich could enable petitioner to de+and the re+oval or replace+ent of an! e+plo!ee in the 3uise of his or her inabilit! to co+plete a pro<ect in ti+e or to deliver the desired result. The po.er to reco++end penalties or dis+iss .or7ers is the stron3est indication of a co+pan!Gs ri3ht of control as direct e+plo!er.49/avvp%il.zw4

Para3raph F of the sa+e )ontract, in .hich Interserve .arranted to petitioner that the for+er .ould provide relievers and replace+ents in case of absences of its personnel, raises another red fla3. (n independent <ob contractor, .ho is ans.erable to the principal onl! for the results of a certain .or7, <ob, or service need not 3uarantee to said principal the dail! attendance of the .or7ers assi3ned to the latter. (n independent <ob contractor .ould surel! have the discretion over the pace at .hich the .or7 is perfor+ed, the nu+ber of e+plo!ees reCuired to co+plete the sa+e, and the .or7 schedule .hich its e+plo!ees need to follo.. (s the )ourt previousl! observed, the )ontract of Services bet.een Interserve and petitioner did not identif! the .or7 needed to be perfor+ed and the final result reCuired to be acco+plished. Instead, the )ontract specified the t!pe of .or7ers Interserve +ust provide petitioner *0Route :elpers, Sales+en, Drivers, )lericals, 8ncoders V PD0, and their Cualifications *technicalIvocational course 3raduates, ph!sicall! fit, of 3ood +oral character, and have not been convicted of an! cri+e,. The )ontract also states that, 0to carr! out the underta7in3s specified in the i++ediatel! precedin3 para3raph, the )ONTR()TOR shall e+plo! the necessar! personnel,0 thus, ac7no.led3in3 that Interserve did not !et have in its e+plo! the personnel needed b! petitioner and .ould still pic7 out such personnel based on the criteria provided b! petitioner. In other .ords, Interserve did not obli3ate itself to perfor+ an identifiable <ob, .or7, or service for petitioner, but +erel! bound itself to provide the latter .ith specific t!pes of e+plo!ees. These contractual provisions stron3l! indicated that Interserve .as +erel! a recruitin3 and +anpo.er a3enc! providin3 petitioner .ith .or7ers perfor+in3 tas7s directl! related to the latterGs principal business. The certification issued b! the DO'8 statin3 that Interserve is an independent <ob contractor does not s.a! this )ourt to ta7e it at face value, since the pri+ar! purpose stated in the (rticles of Incorporation47 of Interserve is +isleadin3. (ccordin3 to its (rticles of Incorporation, the principal business of Interserve is to provide <anitorial and allied services. The deliver! and distribution of )oca?)ola products, the .or7 for .hich respondents .ere e+plo!ed and assi3ned to petitioner, .ere in no .a! allied to <anitorial services. 9hile the DO'8 +a! have found that the capital andIor invest+ents in tools and eCuip+ent of Interserve .ere sufficient for an independent contractor for <anitorial services, this does not +ean that such capital andIor invest+ents .ere li7e.ise sufficient to +aintain an independent contractin3 business for the deliver! and distribution of )oca?)ola products. 9ith the findin3 that Interserve .as en3a3ed in prohibited labor?onl! contractin3,

petitioner shall be dee+ed the true e+plo!er of respondents. (s re3ular e+plo!ees of petitioner, respondents cannot be dis+issed e2cept for <ust or authori1ed causes, none of .hich .ere alle3ed or proven to e2ist in this case, the onl! defense of petitioner a3ainst the char3e of ille3al dis+issal bein3 that respondents .ere not its e+plo!ees. Records also failed to sho. that petitioner afforded respondents the t.in reCuire+ents of procedural due process, i.e., notice and hearin3, prior to their dis+issal. Respondents .ere not served notices infor+in3 the+ of the particular acts for .hich their dis+issal .as sou3ht. Nor .ere the! reCuired to 3ive their side re3ardin3 the char3es +ade a3ainst the+. )ertainl!, the respondentsG dis+issal .as not carried out in accordance .ith la. and, therefore, ille3al.4D =iven that respondents .ere ille3all! dis+issed b! petitioner, the! are entitled to reinstate+ent, full bac7.a3es, inclusive of allo.ances, and to their other benefits or the +onetar! eCuivalents thereof co+puted fro+ the ti+e their co+pensations .ere .ithheld fro+ the+ up to the ti+e of their actual reinstate+ent, as +andated under (rticle "@$ of the 'abor )ode,. IN VI89 OF T:8 FOR8=OIN=, the instant Petition is D8NI8D. The )ourt (FFIRMS 9IT: MODIFI)(TION the Decision dated #$ Februar! "BB@ of the )ourt of (ppeals in )(?=.R. SP No. &E5"B. The )ourt D8)'(R8S that respondents .ere ille3all! dis+issed and, accordin3l!, ORD8RS petitioner to reinstate the+ .ithout loss of seniorit! ri3hts, and to pa! the+ full bac7 .a3es co+puted fro+ the ti+e their co+pensation .as .ithheld up to their actual reinstate+ent. )osts a3ainst the petitioner. SO ORD8R8D. MINITA #. C,ICO*NA/ARIO (ssociate ustice 98 )ON)>R/ CONSUELO +NAR Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L*98%&8 De2ember 15, 199%

OPULENCIA ICE PLANT AND STORAGE AND8OR DR. MELC,OR OPULENCIA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION 0T,IRD DI#ISION7, LABOR ARBITER NUMERIANO #ILLENA AND MANUEL P. ESITA, respondents. "nocentes, De Leon, Leo ardo, Atienza, !a na(e & Az&cena 5"DLA!A6 Law Offices for petitioners. )oli .. De los 'antos for private respondent. BELLOSILLO, J.: M(N>8' P. 8SIT( .as for t.ent! *"B, !ears a co+pressor operator of Tion3son Ice Plant in San Pablo )it!. In #$&B he .as hired as co+pressor operator?+echanic for the ice plants of petitioner Dr. Melchor Opulencia located in Tanauan, -atan3as, and )ala+ba, 'a3una. Initiall! assi3ned at the ice plant in Tanauan, 8sita .ould .or7 fro+ seven o6cloc7 in the +ornin3 to five o6cloc7 in the afternoon receivin3 a dail! .a3e of P5E.BB. In #$&%, 8sita .as transferred to the ice plant in )ala+ba, .hich .as then under3oin3 overhaulin3, ta7in3 the place of co+pressor operator 'oren1o 8seta, .ho .as relieved because he .as alread! old and .ea7. For less than a +onth, 8sita helped in the construction?re+odelin3 of Dr. Opulencia6s house. On % Februar! #$&$, for de+andin3 the correct a+ount of .a3es due hi+, 8sita .as dis+issed fro+ service. )onseCuentl!, he filed .ith Sub?Re3ional (rbitration -ranch IV, San Pablo )it!, a co+plaint for ille3al dis+issal, underpa!+ent, non? pa!+ent for overti+e, le3al holida!, pre+iu+ for holida! and rest da!, #5th +onth, separationIretire+ent pa! and allo.ances a3ainst petitioners. Petitioners den! that 8sita is an e+plo!ee. The! clai+ that 8sita could not have been e+plo!ed in #$&B because the Tanauan ice plant .as not in operation due to lo. volta3e of electricit! and that 8sita .as +erel! a helper 7peon of one of the contractors the! had en3a3ed to do +a<or repairs and renovation of the Tanauan ice plant in #$&%. Petitioners further alle3e that .hen the! had the )ala+ba ice plant repaired and e2panded, 8sita li7e.ise rendered services in a si+ilar capacit!, and thus ad+ittin3 that he .or7ed as a helper 7peon in the repair or re+odelin3 of Dr. Opulencia6s residence in Tanauan. Opulencia li7e.ise +aintains that .hile he refused the insistent pleas of 8sita for

e+plo!+ent in the ice plants due to lac7 of vacanc!, he nonetheless allo.ed hi+ to sta! in the pre+ises of the ice plant for free and to collect fees for crushin3 or loadin3 ice of the custo+ers and dealers of the ice plant. Opulencia clai+s that in addition, 8sita en<o!ed free electricit! and .ater, and .as allo.ed to cultivate crops .ithin the pre+ises of the ice plant to au3+ent his inco+e. Petitioners ho.ever ad+it that 0follo.in3 the tradition of 6pa7i7isa+a6 and as a to7en of 3ratitude of the part of the co+plainant *8sita,, he helps in the cleanin3 of the ice plant pre+ises and en3ine roo+ .henever he is reCuested to do so, and this happens onl! *at, t.ice a +onth.0 On & Dece+ber #$&$, 'abor (rbiter Ne+eriano D. Villena rendered a decision 1 findin3 the e2istence of an e+plo!er?e+plo!ee relationship bet.een petitioners and 8sita and accordin3l! directed the+ to pa! hi+ P55,E#&.B" representin3 separation pa!, underpa!+ent of .a3es, allo.ances, #5th +onth, holida!, pre+iu+ for holida!, and rest da! pa!s. The clai+ for overti+e pa! .as ho.ever dis+issed for lac7 of basis, i.e., 8sita failed to prove that overti+e services .ere actuall! rendered. On "$ Nove+ber #$$B, the Third Division of the National 'abor Relations )o++ission, in )ase No. R(-?IV?"?""B%?&$, affir+ed the decision of 'abor (rbiter Villena but reduced the +onetar! a.ard to P"&,5FF.%B as it .as not proven that 8sita .or7ed ever! da! includin3 rest da!s and on the da!s before the le3al holida!s. On "% March #$$#, petitioners6 +otion for reconsideration .as denied. In this present recourse, petitioners see7 reversal of the rulin3 of public respondents 'abor (rbiter and N'R), raisin3 the follo.in3 ar3u+ents/ that public respondents have no <urisdiction over the instant case4 that 8sita6s .or7 in the repair and construction of Dr. Opulencia6s residence could not have ripened into a re3ular e+plo!+ent4 that petitioners6 benevolence in allo.in3 8sita to sta! inside the co+pan!6s pre+ises free of char3e for hu+anitarian reason deserves co++endation rather than i+position of undue penalt!4 that 8sita6s na+e does not appear in the pa!rolls of the co+pan! .hich necessaril! +eans that he .as not an e+plo!ee4 and, that 8sita6s state+ents are inconsistent and deservin3 of disbelief. On #5 Ma! #$$#, petitioners6 pra!er for a te+porar! restrainin3 order to prevent respondents fro+ enforcin3 the assailed resolutions of N'R) .as 3ranted. The instant petition lac7s +erit, hence, +ust be dis+issed. Petitioners alle3e that there is no e+plo!er?e+plo!ee relationship bet.een the+ and 8sita4 conseCuentl!, public respondents have no <urisdiction over the case. Petitioners even 3o to the e2tent of assertin3 that 0in case li7e the one at bar .here e+plo!er?e+plo!ee relationship has been Cuestioned fro+ the ver! start, 'abor

(rbiters and the N'R) have no <urisdiction and should not assu+e <urisdiction therein.0 9hile the 'abor (rbiter and the N'R) +a! subseCuentl! be found .ithout <urisdiction over a case .hen it .ould later appear that no e+plo!er?e+plo!ee relationship e2isted bet.een the contendin3 parties, such is not the situation in this case .here the e+plo!er?e+plo!ee relationship bet.een the petitioners and 8sita .as clearl! established. If the ar3u+ent of petitioners .ere to be allo.ed, then unscrupulous e+plo!ers could readil! avoid the <urisdiction of the 'abor (rbiters and N'R), and +a! even elude co+pliance .ith labor la.s onl! on the bare assertion that an e+plo!er?e+plo!ee relationship does not e2ist. Petitioners further ar3ue that 0co+plainant +iserabl! failed to present an! docu+entar! evidence to prove his e+plo!+ent. There .as no ti+e sheet, pa! slip andIor pa!rollIcash voucher to spea7 of. (bsence of these +aterial docu+ents are necessar! fatal to co+plainant6s cause.0 9e do not a3ree. No particular for+ of evidence is reCuired to prove the e2istence of an e+plo!er?e+plo!ee relationship. (n! co+petent and relevant evidence to prove the relationship +a! be ad+itted. For, if onl! docu+entar! evidence .ould be reCuired to sho. that relationship, no sche+in3 e+plo!er .ould ever be brou3ht before the bar of <ustice, as no e+plo!er .ould .ish to co+e out .ith an! trace of the ille3alit! he has authored considerin3 that it should ta7e +uch .ei3htier proof to invalidate a .ritten instru+ent. $ Thus, as in this case .here the e+plo!er?e+plo!ee relationship bet.een petitioners and 8sita .as sufficientl! proved b! testi+onial evidence, the absence of ti+e sheet, ti+e record or pa!roll has beco+e inconseCuential. The petitioners6 reliance on 'evilla v. Co&rt of Appeals % is +isplaced. In that case, .e did not consider the inclusion of e+plo!er6s na+e in the pa!roll as an independentl! crucial evidence to prove an e+plo!er?e+plo!ee relation. Moreover, for a pa!roll to be utili1ed to disprove the e+plo!+ent of a person, it +ust contain a true and co+plete list of the e+plo!ees. -ut, in this case, the testi+onies of petitioners6 .itnesses ad+it that not all the na+es of the e+plo!ees .ere reflected in the pa!roll. In their )onsolidated Repl!, petitioners assert that 0e+plo!ees .ho .ere absent .ere naturall! not included in the .ee7l! pa!rolls.0 4 -ut this si+pl! e+phasi1es the obvious. Petitioners6 pa!rolls do not contain the co+plete list of the e+plo!ees, so that the pa!roll slips cannot be an accurate basis in deter+inin3 .ho are and are not their e+plo!ees. In addition, as the Solicitor =eneral observes/ 0. . . . the pa!roll slips sub+itted b! petitioners do not cover the entire period of nine !ears

durin3 .hich private respondent clai+s to have been e+plo!ed b! the+, but onl! the periods fro+ Nove+ber " to Nove+ber "$, #$&% and (pril "% to Ma! 5B, #$&@ . . . . It should be noted that petitioners repeatedl! failed or refused to sub+it all pa!roll slips coverin3 the period durin3 .hich private respondent clai+s to have been e+plo!ed b! the+ despite repeated directives fro+ the 'abor (rbiter . . . .0 5 In this re3ard, .e can aptl! appl! the disputable presu+ption that evidence .illfull! suppressed .ould be adverse if produced. & Petitioners further contend that the clai+ of 8sita that he .or7ed fro+ seven o6cloc7 in the +ornin3 to five o6cloc7 in the afternoon, .hich is presu+ed to be continuous, is hardl! credible because other.ise he .ould not have had the ti+e to tend his crops. ' (s a3ainst this positive assertion of 8sita, it behooves petitioners to prove the contrar!. It is not enou3h that the! raise the issue of probabilit!, na!, i+probabilit!, of the conclusions of public respondents based on the facts bared before the+, for in case of doubt, the factual findin3s of the tribunal .hich had the opportunit! to peruse the conflictin3 pieces of evidence should be sustained. The petitioners point out that even 3rantin3 ar &endo that 8sita .as indeed a +echanic, he could never be a re3ular e+plo!ee because his presence .ould be reCuired onl! .hen there .as a need for repair. 9e cannot sustain this ar3u+ent. This circu+stance cannot affect the re3ular status of e+plo!+ent of 8sita. (n e+plo!ee .ho is reCuired to re+ain on call in the e+plo!er6s pre+ises or so close thereto that he cannot use the ti+e effectivel! and 3ainfull! for his o.n purpose shall be considered as .or7in3 .hile on call. 8 In su+, the deter+ination of re3ular and casual e+plo!+ent 9 is not affected b! the fact that the e+plo!ee6s re3ular presence in the place of .or7 is not reCuired, the +ore si3nificant consideration bein3 that the .or7 of the e+plo!ee is usuall! necessar! or desirable in the business of the e+plo!er. More i+portantl!, 8sita .or7ed for $ !ears and, under the 'abor )ode, 0an! e+plo!ee .ho has rendered at least one !ear of service, .hether such service is continuous or bro7en, shall be considered a re3ular e+plo!ee .ith respect to that activit! in .hich he is e+plo!ed . . . .0 1( The petitioners .ould 3ive the i+pression that the repair of the ice plant and the renovation of the residence of Dr. Opulencia .ere voluntaril! e2tended b! 8sita because 0OrPespondent did it on their *sic, o.n.0 >nfortunatel! for petitioners, .e cannot per+it these baseless assertions to prevail a3ainst the factual findin3s of public respondents .hich .ent throu3h the saniti1in3 process of a public hearin3. The sa+e observation +a! be +ade of the alle3ed inconsistencies in 8sita6s testi+onies. Moreover, on the clai+ that 8sita6s construction .or7 could not ripen into a re3ular e+plo!+ent in the ice plant because the construction .or7 .as onl!

te+porar! and unrelated to the ice?+a7in3 business, needless to sa!, the one +onth spent b! 8sita in construction is insi3nificant co+pared to his nine?!ear service as co+pressor operator in deter+inin3 the status of his e+plo!+ent as such, and considerin3 further that it .as Dr. Opulencia .ho reCuested 8sita to .or7 in the construction of his house. In allo.in3 8sita to sta! in the pre+ises of the ice plant and per+ittin3 hi+ to cultivate crops to au3+ent his inco+e, there is no doubt that petitioners should be co++ended4 ho.ever, in vie. of the e2istence of an e+plo!er?e+plo!ee relationship as found b! public respondents, .e cannot treat hu+anitarian reasons as <ustification for e+asculatin3 or ta7in3 a.a! the ri3hts and privile3es of e+plo!ees 3ranted b! la.. -enevolence, it is said, does not operate as a license to circu+vent labor la.s. If petitioners .ere 3enuinel! altruistic in e2tendin3 to their e+plo!ees privile3es that are not even reCuired b! la., then there is no reason .h! the! should not be reCuired to 3ive their e+plo!ees .hat the! are entitled to receive. Moreover, as found b! public respondents, 8sita .as en<o!in3 the sa+e privile3es 3ranted to the other e+plo!ees of petitioners, so that in thus treatin3 8sita, he cannot be considered an! less than a le3iti+ate e+plo!ee of petitioners. 9:8R8FOR8, there bein3 no 3rave abuse of discretion on the part of public respondents, the instant petition is DISMISS8D. (ccordin3l!, the restrainin3 order .e issued on #5 Ma! #$$# is 'IFT8D. SO ORD8R8D. Cr&z, Davide, .r. and 8&iason, ..., conc&r. Republic of the Philippines SUPREME COURT Manila S8)OND DIVISION G.R. No. 119$&8 Febr? r@ $%, $((( ANGEL <ARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO MARCOS, LUIS DE LOS ANGELES, <OEL ORDENI/A !" AMADO CENTENO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION 0NLRC7 !" GOODMAN TAGI 0P,IL<AMA INTERNATIONAL, INC.7 respondents. FUISUMBING, J.:

This special civil action for certiorari see7s to annul the decision# of public respondent pro+ul3ated on October "&, #$$F, in N'R) N)R )( No. BB5&&5?$", and its resolution" dated Dece+ber #5, #$$F .hich denied petitioners +otion for reconsideration. Petitioners .ere drivers of private respondent, Phil<a+a International Inc., a do+estic corporation en3a3ed in the operation of 0=ood+an Ta2i.0 Petitioners used to drive private respondent6s ta2icabs ever! other da! on a "F?hour .or7 schedule under the boundar! s!ste+. >nder this arran3e+ent, the petitioners earned an avera3e of PFBB.BB dail!. Nevertheless, private respondent ad+ittedl! re3ularl! deducts fro+ petitioners, dail! earnin3s the a+ount of P5B.BB supposedl! for the .ashin3 of the ta2i units. -elievin3 that the deduction is ille3al, petitioners decided to for+ a labor union to protect their ri3hts and interests. >pon learnin3 about the plan of petitioners, private respondent refused to let petitioners drive their ta2icabs .hen the! reported for .or7 on (u3ust %, #$$#, and on succeedin3 da!s. Petitioners suspected that the! .ere sin3led out because the! .ere the leaders and active +e+bers of the proposed union. (33rieved, petitioners filed .ith the labor arbiter a co+plaint a3ainst private respondent for unfair labor practice, ille3al dis+issal and ille3al deduction of .ashin3 fees. In a decision5 dated (u3ust 5#, #$$", the labor arbiter dis+issed said co+plaint for lac7 of +erit. On appeal, the N'R) *public respondent herein,, in a decision dated (pril "&, #$$F, reversed and set aside the <ud3+ent of the labor arbiter. The labor tribunal declared that petitioners are e+plo!ees of private respondent, and, as such, their dis+issal +ust be for <ust cause and after due process. It disposed of the case as follo.s/ 9:8R8FOR8, in vie. of all the fore3oin3 considerations, the decision of the 'abor (rbiter appealed fro+ is hereb! S8T (SID8 and another one entered/ #. Declarin3 the respondent co+pan! 3uilt! of ille3al dis+issal and accordin3l! it is directed to reinstate the co+plainants, na+el!, (lberto (. =on1ales, oel T. Morato, =avino Panahon, De+etrio '. )ala3os, Sonn! M. 'ustado, Ro+eo H. )lari1a, 'uis de los (n3eles, (+ado )entino, (n3el ardin, Rosendo Marcos, >rbano Marcos, r., and oel Ordeni1a, to their for+er positions .ithout loss of seniorit! and other privile3es appertainin3 thereto4 to pa! the co+plainants full bac7.a3es and other benefits, less earnin3s else.here, and to rei+burse the drivers the a+ount paid as .ashin3 char3es4 and

". Dis+issin3 the char3e of unfair OlaborP practice for insufficienc! of evidence. SO ORD8R8D.F Private respondent6s first +otion for reconsideration .as denied. Re+ainin3 hopeful, private respondent filed another +otion for reconsideration. This ti+e, public respondent, in its decisionE dated October "&, #$$F, 3ranted aforesaid second +otion for reconsideration. It ruled that it lac7s <urisdiction over the case as petitioners and private respondent have no e+plo!er?e+plo!ee relationship. It held that the relationship of the parties is leasehold .hich is covered b! the )ivil )ode rather than the 'abor )ode, and disposed of the case as follo.s/ VI898D IN T:8 'I=:T OF ('' T:8 FOR8=OIN=, the Motion under reconsideration is hereb! 3iven due course. (ccordin3l!, the Resolution of (u3ust #B, #$$F, and the Decision of (pril "&, #$$F are hereb! S8T (SID8. The Decision of the 'abor (rbiter sub<ect of the appeal is li7e.ise S8T (SID8 and a N89 ON8 8NT8R8D dis+issin3 the co+plaint for lac7 of <urisdiction. No costs. SO ORD8R8D.% 82pectedl!, petitioners sou3ht reconsideration of the labor tribunal6s latest decision .hich .as denied. :ence, the instant petition. In this recourse, petitioners alle3e that public respondent acted .ithout or in e2cess of <urisdiction, or .ith 3rave abuse of discretion in renderin3 the assailed decision, ar3uin3 that/ I T:8 N'R) :(S NO >RISDI)TION TO 8NT8RT(IN R8SPOND8NT6S S8)OND MOTION FOR R8)ONSID8R(TION 9:I): IS (DMITT8D'; ( P'8(DIN= PRO:I-IT8D >ND8R T:8 N'R) R>'8S, (ND TO =R(NT T:8 S(M8 ON =RO>NDS NOT 8V8N INVOL8D T:8R8IN. II T:8 8JIST8N)8 OF (N 8MP'O;8R?8MP'O;88 R8'(TIONS:IP -8T988N T:8 P(RTI8S IS ('R8(D; ( S8TT'8D ISS>8 )ONSTIT>TIN= *E' .9D"CATA, 9:I): T:8 N'R) :(S NO

MOR8 >RISDI)TION TO R8V8RS8, ('T8R OR MODIF;. III IN (N; )(S8, 8JISTIN= >RISPR>D8N)8 ON T:8 M(TT8R S>PPORTS T:8 VI89 T:(T P8TITION8RS?T(JI DRIV8RS (R8 8MP'O;88S OF R8SPOND8NT T(JI )OMP(N;.@ The petition is i+pressed .ith +erit. The phrase 03rave abuse of discretion a+ountin3 to lac7 or e2cess of <urisdiction0 has settled +eanin3 in the <urisprudence of procedure. It +eans such capricious and .hi+sical e2ercise of <ud3+ent b! the tribunal e2ercisin3 <udicial or Cuasi? <udicial po.er as to a+ount to lac7 of po.er.& In labor cases, this )ourt has declared in several instances that disre3ardin3 rules it is bound to observe constitutes 3rave abuse of discretion on the part of labor tribunal. In +arcia vs. )L*C,$ private respondent therein, after receivin3 a cop! of the labor arbiter6s decision, .rote the labor arbiter .ho rendered the decision and e2pressed dis+a! over the <ud3+ent. Neither notice of appeal .as filed nor cash or suret! bond .as posted b! private respondent. Nevertheless, the labor tribunal too7 co3ni1ance of the letter fro+ private respondent and treated said letter as private respondent6s appeal. In a certiorari action before this )ourt, .e ruled that the labor tribunal acted .ith 3rave abuse of discretion in treatin3 a +ere letter fro+ private respondent as private respondent6s appeal in clear violation of the rules on appeal prescribed under Section 5*a,, Rule VI of the Ne. Rules of Procedure of N'R). In $%ilippine Airlines "nc. vs. )L*C,#B .e held that the labor arbiter co++itted 3rave abuse of discretion .hen he failed to resolve i++ediatel! b! .ritten order a +otion to dis+iss on the 3round of lac7 of <urisdiction and the supple+ental +otion to dis+iss as +andated b! Section #E of Rule V of the Ne. Rules of Procedure of the N'R). In 9nicane :or;ers 9nion-CL9$ vs. )L*C,## .e held that the N'R) 3ravel! abused its discretion b! allo.in3 and decidin3 an appeal .ithout an appeal bond havin3 been filed as reCuired under (rticle ""5 of the 'abor )ode. In !a,ebo vs. )L*C,#" .e declared that the labor arbiter 3ravel! abused its discretion in disre3ardin3 the rule 3overnin3 position papers. In this case, the parties have alread! filed their position papers and even a3reed to consider the case sub+itted for decision, !et the labor arbiter still ad+itted a supple+ental

position paper and +e+orandu+, and b! ta7in3 into consideration, as basis for his decision, the alle3ed facts adduced therein and the docu+ents attached thereto. In +es&l on vs. )L*C,#5 .e held that public respondent 3ravel! abused its discretion in treatin3 the +otion to set aside <ud3+ent and .rit of e2ecution as a petition for relief of <ud3+ent. In doin3 so, public respondent had, .ithout sufficient basis, e2tended the re3le+entar! period for filin3 petition for relief fro+ <ud3+ent contrar! to prevailin3 rule and case la.. In this case before us, private respondent e2hausted ad+inistrative re+ed! available to it b! see7in3 reconsideration of public respondent6s decision dated (pril "&, #$$F, .hich public respondent denied. 9ith this +otion for reconsideration, the labor tribunal had a+ple opportunit! to rectif! errors or +ista7es it +a! have co++itted before resort to courts of <ustice can be had.#F Thus, .hen private respondent filed a second +otion for reconsideration, public respondent should have forth.ith denied it in accordance .ith Rule @, Section #F of its Ne. Rules of Procedure .hich allo.s onl! one +otion for reconsideration fro+ the sa+e part!, thus/ Sec. #F. !otions for *econsideration. A Motions for reconsideration of an! order, resolution or decision of the )o++ission shall not be entertained e2cept .hen based on palpable or patent errors, provided that the +otion is under oath and filed .ithin ten *#B, calendar da!s fro+ receipt of the order, resolution or decision .ith proof of service that a cop! of the sa+e has been furnished .ithin the re3le+entar! period the adverse part! and provided f&rt%er, t%at onl( one s&c% #otion fro# t%e sa#e part( s%all be entertained . O8+phasis suppliedP The rationale for allo.in3 onl! one +otion for reconsideration fro+ the sa+e part! is to assist the parties in obtainin3 an e2peditious and ine2pensive settle+ent of labor cases. For obvious reasons, dela!s cannot be countenanced in the resolution of labor disputes. The dispute +a! involve no less than the livelihood of an e+plo!ee and that of his loved ones .ho are dependent upon hi+ for food, shelter, clothin3, +edicine, and education. It +a! as .ell involve the survival of a business or an industr!.#E (s correctl! pointed out b! petitioner, the second +otion for reconsideration filed b! private respondent is indubitabl! a prohibited pleadin3#% .hich should have not been entertained at all. Public respondent cannot <ust disre3ard its o.n rules on the prete2t of 0satisf!in3 the ends of <ustice0,#@ especiall! .hen its disposition of a le3al controvers! ran afoul .ith a clear and lon3 standin3 <urisprudence in this <urisdiction as elucidated in the subseCuent discussion. )learl!, disre3ardin3 a

settled le3al doctrine enunciated b! this )ourt is not a .a! of rectif!in3 an error or +ista7e. In our vie., public respondent 3ravel! abused its discretion in ta7in3 co3ni1ance and 3rantin3 private respondent6s second +otion for reconsideration as it .rec7s the orderl! procedure in see7in3 reliefs in labor cases. -ut, there is another co+pellin3 reason .h! .e cannot leave untouched the flip? floppin3 decisions of the public respondent. (s +entioned earlier, its October "&, #$$F <ud3+ent is not in accord .ith the applicable decisions of this )ourt. The labor tribunal reasoned out as follo.s/ On the issue of .hether or not e+plo!er?e+plo!ee relationship e2ists, ad+itted is the fact that co+plainants are ta2i drivers purel! on the 0boundar! s!ste+0. >nder this s!ste+ the driver ta7es out his unit and pa!s the o.nerIoperator a fee co++onl! called 0boundar!0 for the use of the unit. No., in the deter+ination the e2istence of e+plo!er?e+plo!ee relationship, the Supre+e )ourt in the case of 'ara, et al., vs. A arrado, et al. *=.R. No. @5#$$, "% October #$&&, has applied the follo.in3 four?fold test/ 0*#, the selection and en3a3e+ent of the e+plo!ee4 *", the pa!+ent of .a3es4 *5, the po.er of dis+issal4 and *F, the po.er of control the e+plo!ees conduct.0 0(+on3 the four *F, reCuisites0, the Supre+e )ourt stresses that 0control is dee+ed the +ost i+portant that the other reCuisites +a! even be disre3arded0. >nder the control test, an e+plo!er?e+plo!ee relationship e2ists if the 0e+plo!er0 has reserved the ri3ht to control the 0e+plo!ee0 not onl! as to the result of the .or7 done but also as to the +eans and +ethods b! .hich the sa+e is to be acco+plished. Other.ise, no such relationship e2ists. *"bid., (ppl!in3 the fore3oin3 para+eters to the case herein obtainin3, it is clear that the respondent does not pa! the drivers, the co+plainants herein, their .a3es. Instead, the drivers pa! a certain fee for the use of the vehicle. On the +atter of control, the drivers, once the! are out pl!in3 their trade, are free to choose .hatever +anner the! conduct their trade and are be!ond the ph!sical control of the o.nerIoperator4 the! the+selves deter+ine the a+ount of revenue the! .ould .ant to earn in a da!6s drivin34 and, +ore si3nificantl! aside fro+ the fact that the! pa! for the 3asoline the! consu+e, the! li7e.ise shoulder the cost of repairs on da+a3es sustained b! the vehicles the! are drivin3. Veril!, all the fore3oin3 attributes si3nif! that the relationship of the parties is +ore of a leasehold or one that is covered b! a charter a3ree+ent under the )ivil )ode rather than the 'abor )ode.#&

The fore3oin3 ratiocination 3oes a3ainst prevailin3 <urisprudence. In a nu+ber of cases decided b! this )ourt,#$ .e ruled that the relationship bet.een <eepne! o.nersIoperators on one hand and <eepne! drivers on the other under the boundar! s!ste+ is that of e+plo!er?e+plo!ee and not of lessor?lessee. 9e e2plained that in the lease of chattels, the lessor loses co+plete control over the chattel leased althou3h the lessee cannot be rec7less in the use thereof, other.ise he .ould be responsible for the da+a3es to the lessor. In the case of <eepne! o.nersIoperators and <eepne! drivers, the for+er e2ercise supervision and control over the latter. The +ana3e+ent of the business is in the o.ner6s hands. The o.ner as holder of the certificate of public convenience +ust see to it that the driver follo.s the route prescribed b! the franchisin3 authorit! and the rules pro+ul3ated as re3ards its operation. No., the fact that the drivers do not receive fi2ed .a3es but 3et onl! that in e2cess of the so?called 0boundar!0 the! pa! to the o.nerIoperator is not sufficient to .ithdra. the relationship bet.een the+ fro+ that of e+plo!er and e+plo!ee. 9e have applied b! analo3! the abovestated doctrine to the relationships bet.een bus o.nerIoperator and bus conductor,"B auto?calesa o.nerIoperator and driver,"# and recentl! bet.een ta2i o.nersIoperators and ta2i drivers."" :ence, petitioners are undoubtedl! e+plo!ees of private respondent because as ta2i drivers the! perfor+ activities .hich are usuall! necessar! or desirable in the usual business or trade of their e+plo!er. (s consistentl! held b! this )ourt, ter+ination of e+plo!+ent +ust be effected in accordance .ith la.. The <ust and authori1ed causes for ter+ination of e+plo!+ent are enu+erated under (rticles "&", "&5 and "&F of the 'abor )ode. The reCuire+ent of notice and hearin3 is set?out in (rticle "@@ *b, of the said )ode. :ence, petitioners, bein3 e+plo!ees of private respondent, can be dis+issed onl! for <ust and authori1ed cause, and after affordin3 the+ notice and hearin3 prior to ter+ination. In the instant case, private respondent had no valid cause to ter+inate the e+plo!+ent of petitioners. Neither .ere there t.o *", .ritten notices sent b! private respondent infor+in3 each of the petitioners that the! had been dis+issed fro+ .or7. These lac7 of valid cause and failure on the part of private respondent to co+pl! .ith the t.in?notice reCuire+ent underscored the ille3alit! surroundin3 petitioners6 dis+issal. >nder the la., an e+plo!ee .ho is un<ustl! dis+issed fro+ .or7 shall be entitled to reinstate+ent .ithout loss of seniorit! ri3hts and other privile3es and to his full bac7.a3es, inclusive of allo.ances, and to his other benefits or their +onetar! eCuivalent co+puted fro+ the ti+e his co+pensation .as .ithheld fro+ hi+ up to

the ti+e of his actual reinstate+ent."5 It +ust be e+phasi1ed, thou3h, that recent <udicial pronounce+ents"F distin3uish bet.een e+plo!ees ille3all! dis+issed prior to the effectivit! of Republic (ct No. %@#E on March "#, #$&$, and those .hose ille3al dis+issals .ere effected after such date. Thus, e+plo!ees ille3all! dis+issed prior to March "#, #$&$, are entitled to bac7.a3es up to three *5, !ears .ithout deduction or Cualification, .hile those ille3all! dis+issed after that date are 3ranted full bac7.a3es inclusive of allo.ances and other benefits or their +onetar! eCuivalent fro+ the ti+e their actual co+pensation .as .ithheld fro+ the+ up to the ti+e of their actual reinstate+ent. The le3islative polic! behind Republic (ct No. %@#E points to 0full bac7.a3es0 as +eanin3 e2actl! that, i.e., .ithout deductin3 fro+ bac7.a3es the earnin3s derived else.here b! the concerned e+plo!ee durin3 the period of his ille3al dis+issal. )onsiderin3 that petitioners .ere ter+inated fro+ .or7 on (u3ust #, #$$#, the! are entitled to full bac7.a3es on the basis of their last dail! earnin3s. 9ith re3ard to the a+ount deducted dail! b! private respondent fro+ petitioners for .ashin3 of the ta2i units, .e vie. the sa+e as not ille3al in the conte2t of the la.. 9e note that after a tour of dut!, it is incu+bent upon the driver to restore the unit he has driven to the sa+e clean condition .hen he too7 it out. )ar .ashin3 after a tour of dut! is indeed a practice in the ta2i industr! and is in fact dictated b! fair pla!."E :ence, the drivers are not entitled to rei+burse+ent of .ashin3 char3es./0wp%i/.n<t 9:8R8FOR8, the instant petition is =R(NT8D. The assailed D8)ISION of public respondent dated October "&, #$$F, is hereb! S8T (SID8. The D8)ISION of public respondent dated (pril "&, #$$F, and its R8SO'>TION dated Dece+ber #5, #$$F, are hereb! R8INST(T8D sub<ect to MODIFI)(TION. Private respondent is directed to reinstate petitioners to their positions held at the ti+e of the co+plained dis+issal. Private respondent is li7e.ise ordered to pa! petitioners their full bac7.a3es, to be co+puted fro+ the date of dis+issal until their actual reinstate+ent. :o.ever, the order of public respondent that petitioners be rei+bursed the a+ount paid as .ashin3 char3es is deleted. )osts a3ainst private respondents. SO ORD8R8D. Republic of the Philippines SUPREME COURT Manila S8)OND DIVISION

G.R. No. &4948 Se-.ember $', 1994 MANILA GOLF H COUNTR+ CLUB, INC., petitioner, vs. INTERMEDIATE APPELLATE COURT !" FERMIN LLAMAR, respondents. 1ito, !isa & Lozada for petitioner. *e#berto =. Evio for private respondent. NAR#ASA, C.J.: The Cuestion before the )ourt here is .hether or not persons renderin3 cadd!in3 services for +e+bers of 3olf clubs and their 3uests in said clubs6 courses or pre+ises are the e+plo!ees of such clubs and therefore .ithin the co+pulsor! covera3e of the Social Securit! S!ste+ *SSS,. That Cuestion appears to have been involved, either directl! or peripherall!, in three separate proceedin3s, all initiated b! or on behalf of herein private respondent and his fello. caddies. That .hich 3ave rise to the present petition for revie. .as ori3inall! filed .ith the Social Securit! )o++ission *SS), via petition of seventeen *#@, persons .ho st!led the+selves 0)addies of Manila =olf and )ountr! )lub?PT))8(0 for covera3e and avail+ent of benefits under the Social Securit! (ct as a+ended, 0PT))8(0 bein3 the acron!+ of a labor or3ani1ation, the 0Philippine Technical, )lerical, )o++ercial 8+plo!ees (ssociation,0 .ith .hich the petitioners clai+ed to be affiliated. The petition, doc7eted as SS) )ase No. EFF5, alle3ed in essence that althou3h the petitioners .ere e+plo!ees of the Manila =olf and )ountr! )lub, a do+estic corporation, the latter had not re3istered the+ as such .ith the SSS. (t about the sa+e ti+e, t.o other proceedin3s bearin3 on the sa+e Cuestion .ere filed or .ere pendin34 these .ere/ *#, a certification election case filed .ith the 'abor Relations Division of the Ministr! of 'abor b! the PT))8( on behalf of the sa+e caddies of the Manila =olf and )ountr! )lub, the case bein3 titled 0Philippine Technical, )lerical, )o++ercial (ssociation vs. Manila =olf and )ountr! )lub0 and doc7eted as )ase No. RF?'RDJ?M?#B?EBF?@&4 it appears to have been resolved in favor of the petitioners therein b! Med?(rbiter Orlando S. Ro<o .ho .as thereafter upheld b! Director

)ar+elo S. Noriel, den!in3 the )lub6s +otion for reconsideration4 1 *", a co+pulsor! arbitration case initiated before the (rbitration -ranch of the Ministr! of 'abor b! the sa+e labor or3ani1ation, titled 0Philippine Technical, )lerical, )o++ercial 8+plo!ees (ssociation *PT))8(,, Fer+in 'a+ar and Ra!+undo o+o7 vs. Manila =olf and )ountr! )lub, Inc., Mi3uel )eldran, :enr! 'i+ and =eroni+o (le<o40 it .as dis+issed for lac7 of +erit b! 'abor (rbiter )ornelio T. 'insan3an, a decision later affir+ed on appeal b! the National 'abor Relations )o++ission on the 3round that there .as no e+plo!er? e+plo!ee relationship bet.een the petitionin3 caddies and the respondent )lub. $ In the case before the SS), the respondent )lub filed ans.er pra!in3 for the dis+issal of the petition, alle3in3 in substance that the petitioners, caddies b! occupation, .ere allo.ed into the )lub pre+ises to render services as such to the individual +e+bers and 3uests pla!in3 the )lub6s 3olf course and .ho the+selves paid for such services4 that as such caddies, the petitioners .ere not sub<ect to the direction and control of the )lub as re3ards the +anner in .hich the! perfor+ed their .or74 and hence, the! .ere not the )lub6s e+plo!ees. SubseCuentl!, all but t.o of the seventeen petitioners of their o.n accord .ithdre. their clai+ for social securit! covera3e, avo.edl! co+in3 to reali1e that indeed there .as no e+plo!+ent relationship bet.een the+ and the )lub. The case continued, and .as eventuall! ad<udicated b! the SS) after protracted proceedin3s onl! as re3ards the t.o holdouts, Fer+in 'la+ar and Ra!+undo o+o7. The )o++ission dis+issed the petition for lac7 of +erit, % rulin3/ . . . that the cadd!6s fees .ere paid b! the 3olf pla!ers the+selves and not b! respondent club. For instance, petitioner Ra!+undo o+o7 averred that for their services as caddies a cadd!6s )lai+ Stub *82h. 0#? (0, is issued b! a pla!er .ho .ill in turn hand over to +ana3e+ent the other portion of the stub 7no.n as )add! Tic7et *82h. 0#0, so that b! this arran3e+ent +ana3e+ent .ill 7no. ho. +uch a cadd! .ill be paid *TSN, p. &B, ul! "5, #$&B,. 'i7e.ise, petitioner Fer+in 'la+ar ad+itted that cadd! .or7s on his o.n in accordance .ith the rules and re3ulations *TSN, p. "F, Februar! "%, #$&B, but petitioner o+o7 could not state an! polic! of respondent that directs the +anner of cadd!in3 *TSN, pp. @%?@@, ul! "5, #$&B,. 9hile respondent club pro+ul3ates rules and re3ulations on the assi3n+ent, deport+ent and conduct of caddies *82h. 0)0, the sa+e are desi3ned to i+pose personal discipline

a+on3 the caddies but not to direct or conduct their actual .or7. In fact, a 3olf pla!er is at libert! to choose a cadd! of his preference re3ardless of the respondent club6s 3roup rotation s!ste+ and has the discretion on .hether or not to pa! a cadd!. (s testified to b! petitioner 'la+ar that their inco+e depends on the nu+ber of pla!ers en3a3in3 their services and liberalit! of the latter *TSN, pp. #B?##, Feb. "%, #$&B,. This lends credence to respondent6s assertion that the caddies are never their e+plo!ees in the absence of t.o ele+ents, na+el!, *#, pa!+ent of .a3es and *", control or supervision over the+. In this connection, our Supre+e )ourt ruled that in the deter+ination of the e2istence of an e+plo!er?e+plo!ee relationship, the 0control test0 shall be considered decisive *Philippine Manufacturin3 )o. vs. =eroni+o and =arcia, $% Phil. "@%4 Mansal vs. P.P. )oheco 'u+ber )o., $% Phil. $F#4 Viana vs. (l?la3adan, et al., $$ Phil. FB&4 Vda, de (n3, et al. vs. The Manila :otel )o., #B# Phil. 5E&, 'VN Pictures Inc. vs. Phil. Musicians =uild, et al., '?#"E&", anuar! "&, #$%#, # S)R( #5". . . . *reference bein3 +ade also to Invest+ent Plannin3 )orporation Phil. vs. SSS "# S)R( $"E,. Records sho. the respondent club had reported for SS covera3e =raciano (.it and Daniel Hui<ano, as bat unloader and helper, respectivel!, includin3 their 3round +en, house and ad+inistrative personnel, a situation indicative of the latter6s concern .ith the ri3hts and .elfare of its e+plo!ees under the SS la., as a+ended. The unrebutted testi+on! of )ol. =eneroso (. (le<o *Ret., that the ID cards issued to the caddies +erel! intended to identif! the holders as accredited caddies of the club and privile3e*d, to pl! their trade or occupation .ithin its pre+ises .hich could be .ithdra.n an!ti+e for loss of confidence. This 3ives us a reasonable 3round to state that the defense posture of respondent that petitioners .ere never its e+plo!ees is .ell ta7en. 4 Fro+ this Resolution appeal .as ta7en to the Inter+ediate appellate )ourt b! the union representin3 'la+ar and o+o7. (fter the appeal .as doc7eted 5 and so+e +onths before decision thereon .as reached and pro+ul3ated, Ra!+undo o+o76s appeal .as dis+issed at his instance, leavin3 Fer+in 'la+ar the lone appellant. & The appeal ascribed t.o errors to the SS)/ *#, refusin3 to suspend the proceedin3s to a.ait <ud3+ent b! the 'abor

Relations Division of National )apital Re3ional Office in the certification election case *R?F?'RD?M?#B?EBF?@&, s&pra, on the precise issue of the e2istence of e+plo!er?e+plo!ee relationship bet.een the respondent club and the appellants, it bein3 contended that said issue .as 0a function of the proper labor office04 and *", ad<udicatin3 that self sa+e issue a +anner contrar! to the rulin3 of the Director of the -ureau of 'abor Relations, .hich 0has not onl! beco+e final but *has been, e2ecuted or *beco+e, res adj&dicata.0 ' The Inter+ediate (ppellate )ourt 3ave short shirt to the first assi3ned error, dis+issin3 it as of the least i+portance. Nor, it .ould appear, did it find an! 3reater +erit in the second alle3ed error. (lthou3h said )ourt reserved the appealed SS) decision and declared Fer+in 'la+ar an e+plo!ee of the Manila =old and )ountr! )lub, orderin3 that he be reported as such for social securit! covera3e and paid an! correspondin3 benefits, 8 it conspicuousl! i3nored the issue of res adj&dicata raised in said second assi3n+ent. Instead, it dre. basis for the reversal fro+ this )ourt6s rulin3 in "nvest#ent $lannin Corporation of t%e $%ilippines vs. 'ocial 'ec&rit( '(ste#,s&pra 9 and declared that upon the evidence, the Cuestioned e+plo!er?e+plo!ee relationship bet.een the )lub and Fer+in 'la+ar passed the so?called 0control test,0 establish+ent in the case A i.e., 0.hether the e+plo!er controls or has reserved the ri3ht to control the e+plo!ee not onl! as to the result of the .or7 to be done but also as to the +eans and +ethods b! .hich the sa+e is to be acco+plished,0 A the )lub6s control over the caddies enco+passin3/ *a, the pro+ul3ation of no less than t.ent!?four *"F, rules and re3ulations <ust about ever! aspect of the conduct that the cadd! +ust observe, or avoid, .hen servin3 as such, an! violation of an! .hich could sub<ect hi+ to disciplinar! action, .hich +a! include suspendin3 or cuttin3 off his access to the club pre+ises4 *b, the devisin3 and enforce+ent of a 3roup rotation s!ste+ .hereb! a cadd! is assi3ned a nu+ber .hich desi3nates his turn to serve a pla!er4 *c, the club6s 0su33estin30 the rate of fees pa!able to the caddies. Dee+ed of title or no +o+ent b! the (ppellate )ourt .as the fact that the caddies .ere paid b! the pla!ers, not b! the )lub, that the! observed no definite .or7in3 hours and earned no fi2ed inco+e. It Cuoted .ith approval fro+ an (+erican decision 1( to the effect that/ 0.hether the club paid the caddies and after.ard collected in the first instance, the caddies .ere still e+plo!ees of the club.0 This,

no +atter that the case .hich produced this rulin3 had a sli3htl! different factual cast, apparentl! havin3 involved a clai+ for .or7+en6s co+pensation +ade b! a cadd! .ho, about to leave the pre+ises of the club .here he .or7ed, .as hit and in<ured b! an auto+obile then ne3otiatin3 the club6s private drive.a!. That sa+e issue of res adj&dicata, i3nored b! the I() be!ond bare +ention thereof, as alread! pointed out, is no. a+on3 the +ain.a!s of the private respondent6s defenses to the petition for revie.. )onsidered in the perspective of the incidents <ust recounted, it illustrates as .ell as an!thin3 can, .h! the practice of foru+?shoppin3 <ustl! +erits censure and punitive sanction. -ecause the sa+e Cuestion of e+plo!er?e+plo!ee relationship has been dra33ed into three different fora, .ill!?nill! and in Cuic7 succession, it has birthed controvers! as to .hich of the resultin3 ad<udications +ust no. be reco3ni1ed as decisive. On the one hand, there is the certification case ORF?'RDJ?M?#B?EBF?@&,, .here the decision of the Med?(rbiter found for the e2istence of e+plo!er?e+plo!ee relationship bet.een the parties, .as affir+ed b! Director )ar+elo S. Noriel, .ho ordered a certification election held, a disposition never thereafter appealed accordin3 to the private respondent4 on the other, the co+pulsor! arbitration case *N)R )ase No. (-?F?#@@#?@$,, instituted b! or for the sa+e respondent at about the sa+e ti+e, .hich .as dis+issed for lac7 of +erit b! the 'abor (rbiter, .hich .as after.ards affir+ed b! the N'R) itself on the 3round that there e2isted no such relationship bet.een the )lub and the private respondent. (nd, as if +atters .ere not alread! co+plicated enou3h, the sa+e respondent, .ith the support and assistance of the PT))8(, sa. fit, also conte+poraneousl!, to initiate still a third proceedin3 for co+pulsor! social securit! covera3e .ith the Social Securit! )o++ission *SS) )ase No. EFF5,, .ith the result alread! +entioned. -efore this )ourt, the petitioner )lub no. contends that the decision of the Med? (rbiter in the certification case had never beco+e final, bein3 in fact the sub<ect of three pendin3 and unresolved +otions for reconsideration, as .ell as of a later +otion for earl! resolution. 11 >nfortunatel!, none of these +otions is incorporated or reproduced in the record before the )ourt. (nd, for his part, the private respondent contends, not onl! that said decision had been appealed to and been affir+ed b! the Director of the -'R, but that a certification election had in fact been held, .hich resulted in the PT))8( bein3 reco3ni1ed as the sole bar3ainin3 a3ent of the caddies of the Manila =olf and )ountr! )lub .ith respect to .a3es, hours of .or7, ter+s of e+plo!+ent, etc. 1$ 9hatever the truth about these opposin3 contentions, .hich the record before the )ourt does not adeCuatel! disclose, the +ore controllin3 consideration .ould see+ to be that, ho.ever, final it +a! beco+e, the decision in a certification case, b! the

ver! nature of that proceedin3s, is not such as to foreclose all further dispute bet.een the parties as to the e2istence, or non?e2istence, of e+plo!er?e+plo!ee relationship bet.een the+. It is .ell settled that for res adj&dicata, or the principle of bar b! prior <ud3+ent, to appl!, the follo.in3 essential reCuisites +ust concur/ *#, there +ust be a final <ud3+ent or order4 *", said <ud3+ent or order +ust be on the +erits4 *5, the court renderin3 the sa+e +ust have <urisdiction over the sub<ect +atter and the parties4 and *F, there +ust be bet.een the t.o cases identit! of parties, identit! of sub<ect +atter and identit! of cause of action.1% )learl! i+plicit in these reCuisites is that the action or proceedin3s in .hich is issued the 0prior ud3+ent0 that .ould operate in bar of a subseCuent action bet.een the sa+e parties for the sa+e cause, be adversarial, or contentious, 0one havin3 opposin3 parties4 *is, contested, as distin3uished fro+ an e> parte hearin3 or proceedin3. . . . of .hich the part! see7in3 relief has 3iven le3al notice to the other part! and afforded the latter an opportunit! to contest it0 14 and a certification case is not such a proceedin3, as this )ourt alread! ruled/ ( certification proceedin3s is not a 0liti3ation0 in the sense in .hich the ter+ is co++onl! understood, but +ere investi3ation of a non? adversar!, fact?findin3 character, in .hich the investi3atin3 a3enc! pla!s the part of a disinterested investi3ator see7in3 +erel! to ascertain the desires of the e+plo!ees as to the +atter of their representation. The court en<o!s a .ide discretion in deter+inin3 the procedure necessar! to insure the fair and free choice of bar3ainin3 representatives b! the e+plo!ees. 15 Indeed, if an! rulin3 or <ud3+ent can be said to operate as res adj&dicata on the contested issue of e+plo!er?e+plo!ee relationship bet.een present petitioner and the private respondent, it .ould lo3icall! be that rendered in the co+pulsor! arbitration case *N)R )ase No. (-?F?@@#?@$, s&pra,, petitioner havin3 asserted, .ithout dispute fro+ the private respondent, that said issue .as there sCuarel! raised and liti3ated, resultin3 in a rulin3 of the (rbitration -ranch *of the sa+e Ministr! of 'abor, that such relationship did not e2ist, and .hich rulin3 .as thereafter affir+ed b! the National 'abor Relations )o++ission in an appeal ta7en b! said respondent. 1& In an! case, this )ourt is not inclined to allo. private respondent the benefit of an! doubt as to .hich of the conflictin3 rulin3 <ust adverted to should be accorded pri+ac!, 3iven the fact that it .as he .ho activel! sou3ht the+ si+ultaneousl!, as it .ere, fro+ separate fora, and even if the 3raver sanctions +ore latel! i+posed

b! the )ourt for foru+?shoppin3 +a! not be applied to hi+ retroactivel!. (ccordin3l!, the I() is not to be faulted for i3norin3 private respondent6s invocation of res adj&dicata4 on contrar!, it acted correctl! in doin3 so. Said )ourtGs holdin3 that upon the facts, there e2ists *or e2isted, a relationship of e+plo!er and e+plo!ee bet.een petitioner and private respondent is, ho.ever, another +atter. The )ourt does not a3ree that said facts necessaril! or lo3icall! point to such a relationship, and to the e2clusion of an! for+ of arran3e+ents, other than of e+plo!+ent, that .ould +a7e the respondent6s services available to the +e+bers and 3uest of the petitioner. (s lon3 as it is, the list +ade in the appealed decision detailin3 the various +atters of conduct, dress, lan3ua3e, etc. covered b! the petitioner6s re3ulations, does not, in the +ind of the )ourt, so circu+scribe the actions or <ud3+ent of the caddies concerned as to leave the+ little or no freedo+ of choice .hatsoever in the +anner of carr!in3 out their services. In the ver! nature of thin3s, caddies +ust sub+it to so+e supervision of their conduct .hile en<o!in3 the privile3e of pursuin3 their occupation .ithin the pre+ises and 3rounds of .hatever club the! do their .or7 in. For all that is +ade to appear, the! .or7 for the club to .hich the! attach the+selves on sufference but, on the other hand, also .ithout havin3 to observe an! .or7in3 hours, free to leave an!ti+e the! please, to sta! a.a! for as lon3 the! li7e. It is not pretended that if found re+iss in the observance of said rules, an! discipline +a! be +eted the+ be!ond barrin3 the+ fro+ the pre+ises .hich, it +a! be supposed, the )lub +a! do in an! case even absent an! breach of the rules, and .ithout violatin3 an! ri3ht to .or7 on their part. (ll these considerations clash frontall! .ith the concept of e+plo!+ent. The I() .ould point to the fact that the )lub su33ests the rate of fees pa!able b! the pla!ers to the caddies as still another indication of the latter6s status as e+plo!ees. It see+s to the )ourt, ho.ever, that the intend+ent of such fact is to the contrar!, sho.in3 that the )lub has not the +easure of control over the incidents of the caddies6 .or7 and co+pensation that an e+plo!er .ould possess. The )ourt a3rees .ith petitioner that the 3roup rotation s!ste+ so?called, is less a +easure of e+plo!er control than an assurance that the .or7 is fairl! distributed, a cadd! .ho is absent .hen his turn nu+ber is called si+pl! losin3 his turn to serve and bein3 assi3ned instead the last nu+ber for the da!. 1' -! and lar3e, there appears nothin3 in the record to refute the petitioner6s clai+ that/ *Petitioner, has no +eans of co+pellin3 the presence of a cadd!. (

cadd! is not reCuired to e2ercise his occupation in the pre+ises of petitioner. :e +a! .or7 .ith an! other 3olf club or he +a! see7 e+plo!+ent a cadd! or other.ise .ith an! entit! or individual .ithout restriction b! petitioner. . . . . . . In the final anal!sis, petitioner has no .as of co+pellin3 the presence of the caddies as the! are not reCuired to render a definite nu+ber of hours of .or7 on a sin3le da!. 8ven the 3roup rotation of caddies is not absolute because a pla!er is at libert! to choose a cadd! of his preference re3ardless of the cadd!6s order in the rotation. It can happen that a cadd! .ho has rendered services to a pla!er on one da! +a! still find sufficient ti+e to .or7 else.here. >nder such circu+stances, he +a! then leave the pre+ises of petitioner and 3o to such other place of .or7 that he .ishes *sic,. Or a cadd! .ho is on call for a particular da! +a! deliberatel! absent hi+self if he has +ore profitable cadd!in3, or another, en3a3e+ent in so+e other place. These are thin3s be!ond petitioner6s control and for .hich it i+poses no direct sanctions on the caddies. . . . 18 9:8R8FOR8, the Decision of the Inter+ediate (ppellant )ourt, revie. of .hich is sou3ht, is reversed and set aside, it bein3 hereb! declared that the private respondent, Fer+in 'la+ar, is not an e+plo!ee of petitioner Manila =olf and )ountr! )lub and that petitioner is under no obli3ation to report hi+ for co+pulsor! covera3e to the Social Securit! S!ste+. No pronounce+ent as to costs. SO ORD8R8D. *e alado and !endoza, ..., conc&r. $adilla, .., is on leave. $&no, .., too; no part. TCIRD DIVISION

[G.R. No. 102199. 6a'"ar* 28, 1993]

AF, MUTUAL

ENEFIT ASSOCIATION, INC., petitioner, vs. NATIONAL

LA OR RELATIONS COMMISSION USTAMANTE,respondents. DECISION ,ANGANI AN, J./

a'-

EUTI7UIO

T4e determination of t4e proper forum is !ru!ia be!ause t4e fi in- of t4e petition or !omp aint in t4e 3ron- !ourt or tribuna is fata . e+en for a patent * meritorious ! aim' 7ore spe!ifi!a *. abor arbiters and t4e Nationa Labor Re ations $ommission 4a+e no #urisdi!tion to entertain and ru e on mone* ! aims 34ere no emp o*er&emp o*ee re ations is in+o +ed' T4us. an* su!4 a3ard rendered 3it4out #urisdi!tion is a nu it*' T4is petition for certiorari under Ru e 98. Ru es of $ourt see"s to annu t4e Reso utionJ1K of t4e Nationa Labor Re ations $ommission. promu -ated September >7. 1991. in NLR$&N$R $ase No' ((&(>&(1199& 9(. entit ed /0utiquio Bustamante vs. A(' &utual Benefit Association, Inc. .L affirmin- t4e de!ision of t4e abor arbiter 34i!4 ordered pa*ment of t4e amount of ,)19.799'(( as insuran!e !ommissions to pri+ate respondent' Th( A'#(c(-('# Fac#& T4e fa!ts are simp e' ,ri+ate respondent 1uti;uio %ustamante 4ad been an insuran!e under3riter of petitioner AF, 7utua %enefit Asso!iation. In!' sin!e 1978' T4e Sa es A-entMs A-reement bet3een t4em pro+ided=J>K

As !ompensation. 4e re!ei+ed !ommissions based on t4e fo o3inper!enta-es of t4e premiums paid=J)K 05BD of pre+iu+ paid .ithin the first !ear4 #BD of pre+iu+ paid .ith the second !ear4 ED of the pre+iu+ paid durin3 the third !ear4 5D of the pre+iu+ paid durin3 the fourth !ear4 and

#D of the pre+iu+ paid durin3 the fifth !ear up?to the tenth !ear.R On Ju * 8. 19D9. petitioner dismissed pri+ate respondent for misrepresentation and for simu taneous * se in- insuran!e for anot4er ife insuran!e !ompan* in +io ation of said a-reement' At t4e time of 4is dismissa . pri+ate respondent 3as entit ed to a!!rued !ommissions e;ui+a ent to t3ent* four />42 mont4s per t4e Sa es A-ent A-reement and as stated in t4e a!!ount summar* dated Ju * 8. 19D9. appro+ed b* Retired %ri-' Ien' Rosa ino A ;ui?a. president of petitioner& !ompan*' Said summar* s4o3ed t4at pri+ate respondent 4ad a tota !ommission re!ei+ab e of ,4)D.D)8'((. of 34i!4 on * ,7D.()9'D9 4ad been paid to 4im' ,ri+ate respondent 3rote petitioner see"in- t4e re ease of 4is !ommissions for said >4 mont4s' ,etitioner. t4rou-4 7ar"etin- 7ana-er Juan $on!ep!ion. rep ied t4at 4e 3as entit ed to on *,78.((('(( to ,1((.((('((' Cen!e. be ie+in- $on!ep!ionMs !omputations. pri+ate respondent si-ned a ;uit! aim in fa+or of petitioner' Sometime in O!tober 19D9. pri+ate respondent 3as informed t4at 4is !4e!" 3as read* for re ease' In !o e!tin- 4is !4e!". 4e dis!o+ered from a do!ument /a!!ount summar*2 atta!4ed to said !4e!" t4at 4is tota !ommissions for t4e >4 mont4s a!tua * amounted to ,)84.799'(9' Said do!ument stated=J4K 0%. The total receivable for Mr. -usta+ante out of the rene.als and old business 3enerated since #$&5 3rosses PF5&,&5E.BB less his outstandin3 obli3ation in the a+ount of P@&,B5$.&$ as of une 5B, #$&$, total e2pected co++ission .ould a+ount to P5EF,@$%.B$. Fro+ that fi3ure at a #ED co+pro+ise settle+ent this .ould +ean PE5,"#$.F# due hi+ to settle his clai+.0 ,ri+ate respondent. 4o3e+er. 3as paid on * t4e amount of ,)8.((('((' On No+ember >). 19D9. pri+ate respondent fi ed a !omp aint 3it4 t4e Offi!e of t4e Insuran!e $ommissioner pra*in- for t4e pa*ment of t4e !orre!t amount of 4is !ommission' Att*' Ierman $' A e#andria. $4ief of t4e ,ub i! Assistan!e and Information Di+ision. Offi!e of t4e Insuran!e $ommissioner. ad+ised pri+ate respondent t4at it 3as t4e Department of Labor and 1mp o*ment t4at 4ad #urisdi!tion o+er 4is !omp aint'

On Februar* >9. 199(. pri+ate respondent fi ed 4is !omp aint 3it4 t4e Department of Labor ! aimin-= /12 !ommission for > *ears from termination of emp o*ment e;ui+a ent to )(F of premiums remitted durinemp o*mentE />2 ,)84.799'(( as !ommission earned from rene3a s and o d business -enerated sin!e 19D)E /)2 ,1((.((('(( as mora dama-esE and /42,1((.((('(( as e:emp ar* dama-es' After submission of position papers. Labor Arbiter Jose I' de Vera rendered 4is de!ision. dated Au-ust >4. 199(. t4e dispositi+e portion of 34i!4 reads=J8K 09:8R8FOR8, all the fore3oin3 pre+ises bein3 considered, <ud3+ent is hereb! rendered declarin3 the dis+issal of the co+plainant as <ust and valid, and conseCuentl!, his clai+ for separation pa! is denied. On his +one! clai+, the respondent co+pan! is hereb! ordered to pa! co+plainant the su+ of P5#$,@$%.BB plus attorne!6s fees in the a+ount of P5#,$@%.%B. (ll other clai+s of the co+plainant are dis+issed for .ant of +erit.0 T4e abor arbiter re ied on t4e Sa es A-entMs A-reement "roviso t4at petitioner !ou d assi-n pri+ate respondent a spe!ifi! area of responsibi it* and a produ!tion ;uota. and read it as si-na in- t4e e:isten!e of emp o*er& emp o*ee re ations4ip bet3een petitioner and pri+ate respondent' On appea . t4e Se!ond Di+isionJ9K of t4e respondent $ommission affirmed t4e de!ision of t4e Labor Arbiter' In t4e assai ed Reso ution. respondent $ommission found no reason to disturb said ru in- of t4e abor arbiter and ru ed=J7K 09:8R8FOR8, in vie. of the fore3oin3 considerations, the sub<ect appeal should be as it is hereb!, denied and the decision appealed fro+ affir+ed. SO ORD8R8D.0 Cen!e. t4is petition' Th( I&&"( ,etitioner !ontends t4at respondent $ommission !ommitted -ra+e abuse of dis!retion in ru in- t4at t4e abor arbiter 4ad #urisdi!tion o+er t4is

!ase' At t4e 4eart of t4e !ontro+ers* is t4e issue of 34et4er t4ere e:isted an emp o*er&emp o*ee re ations4ip bet3een petitioner and pri+ate respondent' ,etitioner ar-ues t4at. despite pro+isions %/12 and />2 of t4e Sa es A-entMs A-reement. t4ere is no emp o*er&emp o*ee re ations4ip bet3een pri+ate respondent and itse f' Cen!e. respondent !ommission -ra+e * abused its dis!retion 34en it 4e d t4at t4e abor arbiter 4ad #urisdi!tion o+er t4e !ase' Th( Co"r#8& R"9$': T4e petition is meritorious' F$r&# I&&"(/ Not All That Glitters Is Control <e &sett ed is t4e do!trine t4at t4e e:isten!e of an emp o*er&emp o*ee re ations4ip is u timate * a ;uestion of fa!t and t4at t4e findin-s t4ereon b* t4e abor arbiter and t4e Nationa Labor Re ations $ommission s4a be a!!orded not on * respe!t but e+en fina it* 34en supported b* substantia e+iden!e'JDK T4e determinati+e fa!tor in su!4 fina it* is t4e presen!e of substantia e+iden!e to support said findin-. ot4er3ise. su!4 fa!tua findin-s !annot bind t4is $ourt' Respondent $ommission !on!urred 3it4 t4e abor arbiterMs findin-s t4at= J9K 02 2 2 The co+plainant6s <ob as sales insurance a3ent is usuall! necessar! and desirable in the usual business of the respondent co+pan!. >nder the Sales (3ents (3ree+ent, the co+plainant .as reCuired to solicit e2clusivel! for the respondent co+pan!, 6and he .as bound b! the co+pan! policies, +e+o circulars, rules and re3ulations .hich .ere issued fro+ ti+e to ti+e. -! such reCuire+ent to follo. strictl! +ana3e+ent policies, orders, circulars, rules and re3ulations, it onl! sho.s that the respondent had control or reserved the ri3ht to control the co+plainant6s .or7 as solicitor. )o+plainant .as not an independent contractor as he did not carr! on an independent business other than that of the co+pan!6s 2 2 2.0

To t4is. respondent $ommission added t4at t4e Sa es A-entMs A-reement spe!ifi!a * pro+ided t4at petitioner ma* assi-n pri+ate respondent a spe!ifi! area of responsibi it* and a produ!tion ;uota' From t4ere. it !on! uded t4at apparent * t4ere is t4at e:er!ise of !ontro b* t4e emp o*er 34i!4 is t4e most important e ement in determinin- emp o*er& emp o*ee re ations4ip'J1(K <e 4o d. 4o3e+er. t4at respondent $ommission misappre!iated t4e fa!ts of t4e !ase' Time and a-ain. t4e $ourt 4as app ied t4e Lfour&fo dL test in determinin- t4e e:isten!e of emp o*er&emp o*ee re ations4ip' T4is test !onsiders t4e fo o3in- e ements= /12 t4e po3er to 4ireE />2 t4e pa*ment of 3a-esE /)2 t4e po3er to dismissE and /42 t4e po3er to !ontro . t4e ast bein- t4e most important e ement'J11K T4e diffi!u t* ies in !orre!t * assessin- if !ertain fa!tors or e ements proper * indi!ate t4e presen!e of !ontro ' Anent t4e issue of e:! usi+it* in t4e !ase at bar. t4e fa!t t4at pri+ate respondent 3as re;uired to so i!it business e:! usi+e * for petitioner !ou d 4ard * be !onsidered as !ontro in abor #urispruden!e' 0nder 7emo $ir!u ars No' >&D1J1>K and >&D8. dated De!ember 17. 19D1 and Au-ust 7. 19D8. respe!ti+e *. issued b* t4e Insuran!e $ommissioner. insuran!e a-ents are barred from ser+in- more t4an one insuran!e !ompan*. in order to prote!t t4e pub i! and to enab e insuran!e !ompanies to e:er!ise e:! usi+e super+ision o+er t4eir a-ents in t4eir so i!itation 3or"' T4us. t4e e:! usi+it* restri!tion ! ear * sprin-s from a re-u ation issued b* t4e Insuran!e $ommission. and not from an intention b* petitioner to estab is4 !ontro o+er t4e met4od and manner b* 34i!4 pri+ate respondent s4a a!!omp is4 4is 3or"' T4is feature is not meant to !4an-e t4e nature of t4e re ations4ip bet3een t4e parties. nor does it ne!essari * imbue su!4 re ations4ip 3it4 t4e ;ua it* of !ontro en+isioned b* t4e a3' So too. t4e fa!t t4at pri+ate respondent 3as bound b* !ompan* po i!ies. memo6!ir!u ars. ru es and re-u ations issued from time to time is a so not indi!ati+e of !ontro ' In its Rep * to $omp ainantMs ,osition ,aper. J1)K petitioner a e-es t4at t4e po i!ies. memo6!ir!u ars. and ru es and re-u ations referred to in pro+ision %/12 of t4e Sa es A-entMs A-reement are on * t4ose pertainin- to pa*ment of a-entsM a!!ountabi ities. a+ai ment b* sa es a-ents of !as4 ad+an!es for sorties. !ir!u ars on in!enti+es and a3ards to be -i+en based on produ!tion. and ot4er matters !on!ernin- t4e

se in- of insuran!e. in a!!ordan!e 3it4 t4e ru es promu -ated b* t4e Insuran!e $ommission' A!!ordin- to t4e petitioner. insuran!e so i!itors are ne+er affe!ted or !o+ered b* t4e ru es and re-u ations !on!ernin- emp o*ee !ondu!t and pena ties for +io ations t4ereof. 3or" standards. performan!e appraisa s. merit in!reases. promotions. absenteeism6attendan!e. ea+es of absen!e. mana-ement&union matters. emp o*ee benefits and t4e i"e' Sin!e pri+ate respondent fai ed to rebut t4ese a e-ations. t4e same are deemed admitted. or at east pro+en. t4ereb* ea+in- not4in- to support t4e respondent $ommissionMs !on! usion t4at t4e fore-oin- e ements si-nified an emp o*ment re ations4ip bet3een t4e parties' In re-ard to t4e territoria assi-nments -i+en to sa es a-ents. t4is too !annot be 4e d as indi!ati+e of t4e e:er!ise of !ontro o+er an emp o*ee' First of a . t4e p a!e of 3or" in t4e business of so i!itininsuran!e does not fi-ure prominent * in t4e e;uation' And more si-nifi!ant *. pri+ate respondent fai ed to rebut petitionerMs a e-ation t4at it 4ad ne+er issued 4im an* territoria assi-nment at a ' Ob+ious *. t4is $ourt !annot dra3 t4e same inferen!e from t4is feature as did t4e respondent $ommission' To restate. t4e si-nifi!ant fa!tor in determinin- t4e re ations4ip of t4e parties is t4e presen!e or absen!e of super+isor* aut4orit* to !ontro t4e met4od and t4e detai s of performan!e of t4e ser+i!e bein- rendered. and t4e de-ree to 34i!4 t4e prin!ipa ma* inter+ene to e:er!ise su!4 !ontro ' T4e presen!e of su!4 po3er of !ontro is indi!ati+e of an emp o*ment re ations4ip. 34i e absen!e t4ereof is indi!ati+e of independent !ontra!tors4ip' In ot4er 3ords. t4e test to determine t4e e:isten!e of independent !ontra!tors4ip is 34et4er one ! aimin- to be an independent !ontra!tor 4as !ontra!ted to do t4e 3or" a!!ordin- to 4is o3n met4ods and 3it4out bein- sub#e!t to t4e !ontro of t4e emp o*er e:!ept on * as to t4e resu t of t4e 3or"'J14K Su!4 is e:a!t * t4e nature of t4e re ations4ip bet3een petitioner and pri+ate respondent' Furt4er. not e+er* form of !ontro t4at a part* reser+es to 4imse f o+er t4e !ondu!t of t4e ot4er part* in re ation to t4e ser+i!es bein- rendered ma* be a!!orded t4e effe!t of estab is4in- an emp o*er&emp o*ee re ations4ip' T4e fa!ts of t4is !ase fa s;uare * 3it4 t4e !ase of Insu ar Life Assuran!e $o'. Ltd' +s' NLR$' In said !ase. 3e 4e d t4at=

0'o3icall!, the line should be dra.n bet.een rules that +erel! serve as 3uidelines to.ards the achieve+ent of the +utuall! desired result .ithout dictatin3 the +eans or +ethods to be e+plo!ed in attainin3 it, and those that control or fi2 the +ethodolo3! and bind or restrict the part! hired to the use of such +eans. The first, .hich ai+ onl! to pro+ote the result, create no e+plo!er?e+plo!ee relationship unli7e the second, .hich address both the result and the +eans used to achieve it. The distinction acCuires particular relevance in the case of an enterprise affected .ith public interest, as is the business of insurance, and is on that account sub<ect to re3ulation b! the State .ith respect, not onl! to the relations bet.een insurer and insured but also to the internal affairs of the insurance co+pan!. Rules and re3ulations 3overnin3 the conduct of the business are provided for in the Insurance )ode and enforced b! the Insurance )o++issioner. It is, therefore, usual and e2pected for an insurance co+pan! to pro+ul3ate a set of rules to 3uide its co++ission a3ents in sellin3 its policies that the! +a! not run afoul of the la. and .hat it reCuires or prohibits. 2222 None of these reall! invades the a3ent6s contractual prero3ative to adopt his o.n sellin3 +ethods or to sell insurance at his o.n ti+e and convenience, hence cannot <ustifiabl! be said to establish an e+plo!er?e+plo!ee relationship bet.een hi+ and the co+pan!.0O#EP ,ri+ate respondentMs !ontention t4at 4e 3as petitionerMs emp o*ee is be ied b* t4e fa!t t4at 4e 3as free to se insuran!e at an* time as 4e 3as not sub#e!t to definite 4ours or !onditions of 3or" and in turn 3as !ompensated a!!ordin- to t4e resu t of 4is efforts' %* t4e nature of t4e business of so i!itin- insuran!e. a-ents are norma * eft free to de+ise 3a*s and means of persuadin- peop e to ta"e out insuran!e' T4ere is no pro4ibition. as !ontended b* petitioner. for pri+ate respondent to 3or" for as on- as 4e does not +io ate t4e Insuran!e $ode' As petitioner e:p ains= 0*Private respondent, .as free to solicit life insurance an!.here he .anted and he had free and unfettered ti+e to pursue his business. :e did not have to punch in and punch out the bund! cloc7 as he .as not reCuired to report to the *petitioner6s, office re3ularl!. :e .as not covered b! an! e+plo!ee policies or re3ulations and not sub<ect to the disciplinar! action of +ana3e+ent on the basis of the 8+plo!ee )ode of )onduct. :e could 3o out and sell insurance at his o.n chosen ti+e. :e .as entirel! left to his o.n choices of areas or territories, .ith no definite, +uch less supervised, ti+e schedule. *Private respondent, had co+plete control over his occupation and *petitioner, did not e2ercise an! ri3ht of )ontrol and Supervision over his perfor+ance e2cept as

to the pa!+ent of co++ission the a+ount of .hich entirel! depends on the sole efforts of *private respondent,. :e .as free to en3a3e in other occupation or practice other profession for as lon3 as he did not co++it an! violation of the ethical standards prescribed in the Sales (3ent6s (3ree+ent.0O#%P A t4ou-4 petitioner !ou d 4a+e. t4eoreti!a *. disappro+ed an* of pri+ate respondentMs transa!tions. 34at !ou d be disappro+ed 3as on * t4e resu t of t4e 3or". and not t4e means b* 34i!4 it 3as a!!omp is4ed' T4e L!ontro L 34i!4 t4e abo+e fa!tors indi!ate did not sum up to t4e po3er to !ontro pri+ate respondentMs !ondu!t in and mode of so i!itininsuran!e' On t4e !ontrar*. t4e* ! ear * indi!ate t4at t4e #uridi!a e ement of !ontro 4ad been absent in t4is situation' T4us. t4e $ourt is !onstrained to ru e t4at no emp o*ment re ations4ip 4ad e+er e:isted bet3een t4e parties' S(co'- I&&"(/ Jurisdiction of Respondent Commission & Labor Arbiter 0nder t4e !ontra!t in+o"ed. pri+ate respondent 4ad ne+er been petitionerMs emp o*ee. but on * its !ommission a-ent' As an independent !ontra!tor. 4is ! aim for unpaid !ommission s4ou d 4a+e been iti-ated in an ordinar* !i+i a!tion'J17K T4e #urisdi!tion of abor arbiters and respondent $ommission is set fort4 in Arti! e >17 of t4e Labor $ode'J1DK T4e unif*in- e ement runnin- t4rou-4 para-rap4s /12 & /92 of said pro+ision is t4e !onsistent referen!e to !ases or disputes arisin- out of or in !onne!tion 3it4 an emp o*er&emp o*ee re ations4ip' ,rior to its amendment b* %atas ,ambansa % -' >>7 on June 1. 19D>. t4is point 3as ! ear as t4e arti! e in! uded La ot4er !ases arisinfrom emp o*er&emp o*ee re ation un ess e:press * e:! uded b* t4is $ode'LJ19K <it4out t4is !riti!a e ement of emp o*ment re ations4ip. t4e abor arbiter and respondent $ommission !an ne+er a!;uire #urisdi!tion o+er a dispute' As in t4e !ase at bar' It 3as serious error on t4e part of t4e abor arbiter to 4a+e assumed #urisdi!tion and ad#udi!ated t4e ! aim' Li"e3ise. t4e respondent $ommissionMs affirman!e t4ereof' Su!4 a!" of #urisdi!tion of a !ourt or tribuna ma* be raised at an* sta-e of t4e pro!eedin-s. e+en on appea ' T4e do!trine of esto""el !annot be

proper * in+o"ed b* respondent $ommission to !ure t4is fata defe!t as it !annot !onfer #urisdi!tion upon a tribuna t4at to be-in 3it4. 3as bereft of #urisdi!tion o+er a !ause of a!tion'J>(K 7oreo+er. in t4e pro!eedin-s be o3. petitioner !onsistent * !4a en-ed t4e #urisdi!tion of t4e abor arbiter J>1K and respondent $ommission'J>>K It remains a basi! fa!t in a3 t4at t4e !4oi!e of t4e proper forum is !ru!ia as t4e de!ision of a !ourt or tribuna 3it4out #urisdi!tion is a tota nu it*'J>)K A +oid #ud-ment for 3ant of #urisdi!tion is no #ud-ment at a ' It !annot be t4e sour!e of an* ri-4t nor t4e !reator of an* ob i-ation' A a!ts performed pursuant to it and a ! aims emanatin- from it 4a+e no e-a effe!t' Cen!e. it !an ne+er be!ome fina ' L: : : /I2t ma* be said to be a a3 ess t4in- 34i!4 !an be treated as an out a3 and s ain at si-4t. or i-nored 34ere+er and 34ene+er it e:4ibits its 4ead'LJ>4K T4e 3a* t4in-s stand. it be!omes unne!essar* to !onsider t4e merits of pri+ate respondentMs ! aim for unpaid !ommission' %e t4at as it ma*. t4is ru in- is 3it4out pre#udi!e to pri+ate respondentMs ri-4t to fi e a suit for !o e!tion of unpaid !ommissions a-ainst petitioner 3it4 t4e proper forum and 3it4in t4e proper period' 45EREFORE. t4e petition is 4ereb* +RAN10#. and t4e assai ed Reso ution is 4ereb* 201 A2I#0. SO ORDERED. Narvasa, ,,., !on!ur. C.,., )Chairman*, #avide, ,r., &elo, and (rancisco,

S1$OND DIVISION

[G.R. No. 121103. 6a'"ar* 21, 1993]

,URIFICACION G. TA ANG, petitioner, vs. NATIONAL LA OR RELATIONS COMMISSION a'- ,AMANA GOLDEN CARE MEDICAL CENTER FOUNDATION, INC., respondents.

DECISION REGALADO, J./

On O!tober )(. 199(. t4e %oard of Trustees issued a memorandum appointin- petitioner as 7edi!a Dire!tor and Cospita Administrator of pri+ate respondent5s ,amana Io den $are 7edi!a $enter in $a amba. La-una' A t4ou-4 t4e memorandum 3as si ent as to t4e amount of remuneration for t4e position. petitioner ! aims t4at s4e re!ei+ed a mont4 * retainer fee of fi+e t4ousand pesos /,8.((('((2 from pri+ate respondent. but t4e pa*ment t4ereof 3as a e-ed * stopped in No+ember. 1991' As medi!a dire!tor and 4ospita administrator. petitioner 3as tas"ed to run t4e affairs of t4e aforesaid medi!a !enter and perform a a!ts of administration re ati+e to its dai * operations' On 7a* 1. 199). petitioner 3as a e-ed * informed persona * b* Dr' 1rnesto Na+a t4at in a spe!ia meetin- 4e d on Apri )(. 199). t4e %oard of Trustees passed a reso ution re ie+in- 4er of 4er position as 7edi!a Dire!tor and Cospita Administrator. and appointin- t4e atter and Dr' %en#amin Donas!o as a!tin- 7edi!a Dire!tor and a!tin- Cospita Administrator. respe!ti+e *' ,etitioner a+erred t4at s4e t4ereafter re!ei+ed a !op* of said board reso ution' On June 9. 199). petitioner fi ed a !omp aint for i e-a dismissa and non&pa*ment of 3a-es. a o3an!es and 1)t4 mont4 pa* before t4e abor arbiter' Respondent !orporation mo+ed for t4e dismissa of t4e !omp aint on t4e -round of a!" of #urisdi!tion o+er t4e sub#e!t matter' It ar-ued t4at petitioner5s position as 7edi!a Dire!tor and Cospita Administrator 3as inter in"ed 3it4 4er position as member of t4e %oard of Trustees. 4en!e. 4er dismissa is an intra&!orporate !ontro+ers* 34i!4 fa s 3it4in t4e e:! usi+e #urisdi!tion of t4e Se!urities and 1:!4an-e $ommission /S1$2' ,etitioner opposed t4e motion to dismiss. !ontendin- t4at 4er position

as 7edi!a Dire!tor and Cospita Administrator 3as separate and distin!t from 4er position as member of t4e %oard of Trustees' S4e ! aimed t4at t4ere is no intra&!orporate !ontro+ers* in+o +ed sin!e s4e fi ed t4e !omp aint in 4er !apa!it* as 7edi!a Dire!tor and Cospita Administrator. or as an emp o*ee of pri+ate respondent' On Apri >9. 1994. t4e abor arbiter issued an order dismissin- t4e !omp aint for a!" of #urisdi!tion' Ce ru ed t4at t4e !ase fa s 3it4in t4e #urisdi!tion of t4e S1$. pursuant to Se!tion 8 of ,residentia De!ree No' 9(>&A' J1K ,etitioner5s motion for re!onsideration 3as treated as an appea b* t4e abor arbiter 34o !onse;uent * ordered t4e e e+ation of t4e entire re!ords of t4e !ase to pub i! respondent NLR$ for appe ate re+ie3' J>K On appea . respondent NLR$ affirmed t4e dismissa of t4e !ase on t4e additiona -round t4at At4e position of a 7edi!a Dire!tor and Cospita Administrator is a"in to t4at of an e:e!uti+e position in a !orporate adder stru!ture.B 4en!e. petitioner5s remo+a from t4e said position 3as an intra& !orporate !ontro+ers* 3it4in t4e ori-ina and e:! usi+e #urisdi!tion of t4e S1$' J)K A--rie+ed b* t4e de!ision. petitioner fi ed t4e instant petition 34i!4 3e find. 4o3e+er. to be 3it4out merit' <e a-ree 3it4 t4e findin-s of t4e NLR$ t4at it is t4e S1$ 34i!4 4as #urisdi!tion o+er t4e !ase at bar' T4e !4ar-es a-ainst 4erein pri+ate respondent parta"e of t4e nature of an intra&!orporate !ontro+ers*' Simi ar *. t4e determination of t4e ri-4ts of petitioner and t4e !on!omitant iabi it* of pri+ate respondent arisin- from 4er ouster as a medi!a dire!tor and6or 4ospita administrator. 34i!4 are !orporate offi!es. is an intra&!orporate !ontro+ers* sub#e!t to t4e #urisdi!tion of t4e S1$' $ontrar* to t4e !ontention of petitioner. a medi!a dire!tor and a 4ospita administrator are !onsidered as !orporate offi!ers under t4e b*& a3s of respondent !orporation' Se!tion >/i2. Arti! e I t4ereof states t4at one of t4e po3ers of t4e %oard of Trustees is A/t2o appoint a 7edi!a Dire!tor. $omptro er6Administrator. $4iefs of Ser+i!es and su!4 ot4er offi!ers as it ma* deem ne!essar* and pres!ribe t4eir po3ers and duties'B J4K

T4e president. +i!e&president. se!retar* and treasurer are !ommon * re-arded as t4e prin!ipa or e:e!uti+e offi!ers of a !orporation. and modern !orporation statutes usua * desi-nate t4em as t4e offi!ers of t4e !orporation'J8K Co3e+er. ot4er offi!es are sometimes !reated b* t4e !4arter or b*& a3s of a !orporation. or t4e board of dire!tors ma* be empo3ered under t4e b*& a3s of a !orporation to !reate additiona offi!es as ma* be ne!essar*'J9K It 4as been 4e d t4at an Aoffi!eB is !reated b* t4e !4arter of t4e !orporation and t4e offi!er is e e!ted b* t4e dire!tors or sto!"4o ders'J7K On t4e ot4er 4and. an Aemp o*eeB usua * o!!upies no offi!e and -enera * is emp o*ed not b* a!tion of t4e dire!tors or sto!"4o ders but b* t4e mana-in- offi!er of t4e !orporation 34o a so determines t4e !ompensation to be paid to su!4 emp o*ee'JDK In t4e !ase at bar. !onsiderin- t4at 4erein petitioner. un i"e an ordinar* emp o*ee. 3as appointed b* respondent !orporation5s %oard of Trustees in its memorandum of O!tober )(. 199(.J9Ks4e is deemed an offi!er of t4e !orporation' ,erfor!e. Se!tion 8/!2 of ,residentia De!ree No' 9(>&A. 34i!4 pro+ides t4at t4e S1$ e:er!ises e:! usi+e #urisdi!tion o+er !ontro+ersies in t4e e e!tion or appointment of dire!tors. trustees. offi!ers or mana-ers of !orporations. partners4ips or asso!iations. app ies in t4e present dispute' A!!ordin- *. #urisdi!tion o+er t4e same is +ested in t4e S1$. and not in t4e Labor Arbiter or t4e NLR$' 7oreo+er. t4e a e-ation of petitioner t4at 4er bein- a member of t4e %oard of Trustees 3as not one of t4e !onsiderations for 4er appointment is be ied b* t4e tenor of t4e memorandum itse f' It states= A<e 4ope t4at *ou 3i up4o d and promote t4e mission of our foundation.BJ1(K and t4is !annot be !onstrued ot4er t4an in referen!e to 4er position or !apa!it* as a !orporate trustee' A !orporate offi!er5s dismissa is a 3a*s a !orporate a!t. or an intra& !orporate !ontro+ers*. and t4e nature is not a tered b* t4e reason or 3isdom 3it4 34i!4 t4e %oard of Dire!tors ma* 4a+e in ta"in- su!4 a!tion' J11K A so. an intra&!orporate !ontro+ers* is one 34i!4 arises bet3een a sto!"4o der and t4e !orporation' T4ere is no distin!tion. ;ua ifi!ation. nor an* e:emption 34atsoe+er' T4e pro+ision is broad and !o+ers a "inds of !ontro+ersies bet3een sto!"4o ders and !orporations' J1>K

<it4 re-ard to t4e amount of ,8.((('(( former * re!ei+ed b* 4erein petitioner e+er* mont4. t4e same !annot be !onsidered as !ompensation for 4er ser+i!es rendered as 7edi!a Dire!tor and Cospita Administrator' T4e +ou!4ersJ1)K submitted b* petitioner s4o3 t4at t4e said amount 3as paid to 4er b* ,A7ANA. In!'. a sto!" !orporation 34i!4 is separate and distin!t from 4erein pri+ate respondent' A t4ou-4 t4e pa*ments 3ere !onsidered ad+an!es to ,amana Io den $are. $a amba bran!4. t4ere is no e+iden!e to s4o3 t4at t4e ,amana Io den $are stated in t4e +ou!4ers refers to 4erein respondent ,amana Io den $are 7edi!a $enter Foundation. In!' ,amana Io den $are is a di+ision of ,amana. In!'. 34i e respondent ,amana Io den $are 7edi!a $enter Foundation. In!' is a non&sto!". non& profit !orporation' It is stated in t4e memorandum of petitioner t4at ,amana. In!' is a sto!" and profit !orporation se in- pre&need p an for edu!ation. pension and 4ea t4 !are' T4e 4ea t4 !are p an is !a ed ,amana Io den $are , an and t4e 4o ders are !a ed ,amana Io den $are $ard Co ders or. simp *. ,amana 7embers' J14K It is an admitted fa!t t4at 4erein petitioner is a retained p4*si!ian of ,amana. In!'. 34ose patients are 4o ders of t4e ,amana Io den $are $ard' In fa!t. in 4er !omp aintJ18K fi ed before t4e Re-iona Tria $ourt of $a amba. 4erein petitioner is as"in-. amon- ot4ers. for professiona fees and6or retainer fees earned for 4er treatment of ,amana Io den $are !ard 4o ders'J19K T4us. at most. said +ou!4ers !an on * be !onsidered as proof of pa*ment of retainer fees made b* ,amana. In!' to 4erein petitioner as a retained p4*si!ian of ,amana Io den $are' 7oreo+er. e+en assumin- t4at t4e mont4 * pa*ment of ,8.((('(( 3as a +a id ! aim a-ainst respondent !orporation. t4is 3ou d not operate to effe!ti+e * remo+e t4is !ase from t4e #urisdi!tion of t4e S1$' In t4e !ase of $a-a*an de Oro $o iseum. In!' vs. Offi!e of t4e 7inister of Labor and 1mp o*ment. et!'. et al'.J17K 3e ru ed t4at A/a2 t4ou-4 t4e re iefs sou-4t b* $4a+e? appear to fa under t4e #urisdi!tion of t4e abor arbiter as t4e* are ! aims for unpaid sa aries and ot4er remunerations for ser+i!es rendered. a ! ose s!rutin* t4ereof s4o3s t4at said ! aims are a!tua * part of t4e per;uisites of 4is position in. and t4erefore inter in"ed 3it4. 4is re ations 3it4 t4e !orporation' In D*. et al'. vs. NLR$. et al'. t4e $ourt said= N/t24e ;uestion of remuneration in+o +in- as it does. a person 34o is not a mere

emp o*ee but a sto!"4o der and offi!er. an inte-ra part. it mi-4t be said. of t4e !orporation. is not a simp e abor prob em but a matter t4at !omes 3it4in t4e area of !orporate affairs and mana-ement and is in fa!t a !orporate !ontro+ers* in !ontemp ation of t4e $orporation $ode'5B 45EREFORE. t4e ;uestioned reso ution of t4e NLR$ is 4ereb* AFFIR71D. 3it4out pre#udi!e to petitioner5s ta"in- re!ourse to and see"in- re ief t4rou-4 t4e appropriate remed* in t4e proper forum' SO ORDERED. Romero, 'uno, &endo3a, and 1orres, ,r., ,,., !on!ur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 88(11 <?6@ %(, 199( GREAT PACIFIC LIFE ASSURANCE CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION !" ROSA ALLADO, respondents. +.A. ?ort&n & Associates for petitioner. Carlito A. Corp&z for private respondent. MEDIALDEA, J.: The +ain issue, in this petition is .hether private respondent, Rosa (llado voluntaril! resi3ned fro+ her .or7 at petitioner corporation, =reat Pacific 'ife (ssurance )orporation, or .hether the corporation constructivel! dis+issed her or forced her to resi3n. Ms. Rosa (llado alle3ed that she .as hired b! =R8P('IF8 as cler7 in its re3ional office in 'aoa3, Ilocos Norte so+eti+e in anuar!, #$%$. (fter onl! three *5, +onths on the <ob, she .as pro+oted to Re3ional )ashier at the sa+e station. In #$@#, she .as transferred to -a3uio )it!, follo.in3 the transfer of the corporation6s re3ional office to that cit!, .here she re+ained .ith the co+pan! until Ma! "E, #$&F. (t the ti+e of her separation she .as receivin3 P","5B.BB a +onth.

She further alle3ed that on (pril F, #$&F, Ms. Rosa ;. )hoa, the corporation6s (ssistant Vice President, issued an inter?office +e+orandu+ to Ms. (na Marie -arredo, head of the :u+an Resources (d+inistration Depart+ent, instructin3 the latter to i+ple+ent the decision ta7en b! the co+pan! to transfer (llado to 0I' (ccountin3 Depart+ent?Pre+iu+ Section0 at Metro Manila to ta7e the place of one Ms. Pa1 Francisco .ho resi3ned March 5B, #$&F. The reason 3iven for the transfer, as stated in the +e+orandu+, .as for the co+pan! to cut do.n on its e2penses at its -a3uio office the function of (llado as Re3ional )ashier to be assu+ed b! the Re3ional (d+inistrator. -arredo notified (llado of the fore3oin3 statin3 that thou3h the corporation .as 0.ell a.are of OherP reservation about relocatin3 to Manila0 0present circu+stances leave the co+pan! no other recourse,0 and infor+ed her that she .as entitled to a 0relocation e2pense0 of P#,BBB.BB sub<ect to liCuidation. (llado .rote the president of the corporation reCuestin3 reconsideration of the decision of her transfer. She reasoned that .ith the salar! she .as receivin3 she could not afford to live in a hi3hl! urbani1ed area as Metro Manila. and 0+ore i+portantl!,0 she .rote, she has 06dependents .ho are stud!in3 in -a3uio )it! .ho+ she cannot si+pl! leave0 behind. The corporation6s president, throu3h -arredo, denied reconsideration e2plainin3 that +ana3e+ent has decided to abolished her ite+ since the volu+e of the business in her station 0can +ore than adeCuatel! be handled b! the Re3ional (d+inistrator.0 It .as e+phasi1ed that 0the onl! e2istin3 vacanc! in the co+pan! suitable at present to OherP Cualification .ill be one at the I' (ccountin3 Depart+ent0 and that there 0.ill be no de+otion in ran7 or pa!.0 She .as ur3ed to 0please understand that Othe corporation hasP no other recourse but to assi3n OherP to OtheP vacanc! since there O.asP no other suitable position .here Othe corporationP can acco+odate OherP at present.0 She .as assured that 0once a vacanc! for a re3ional cashier arises in the future OsheP .ill be 3iven first priorit!.0 There .as no +ention of .hat position (llado .as to assu+e but .as told +erel! that 0the duties and functions OsheP .ill be perfor+in3 .ill be discussed .ith her in detail b! OherP +ana3er on the da! OsheP reportOsP for .or7.0 :er 0relocation e2pense +oreover, .as increased to P#,EBB.BB. She .as 3iven until Ma! #%, #$&F to report to her ne. assi3n+ent on the pain of bein3 ter+inated fro+ the service. >pon receivin3 the letter of denial, (llado repaired to the corporation6s head office in Ma7ati to plead her case to -arredo and Mr. )ar+elo Valera, an attorne! in the corporation6s le3al depart+ent, but to no avail. On Ma! #E, #$&F she tendered her resi3nation effective Ma! "E, #$&F. She also si3ned a Cuitclai+ and release in

favor of =R8P('IF8 renouncin3 an! clai+ or action she +i3ht have a3ainst the corporation. Thereafter, she .as paid 3ratuit! pa! and other e+plo!ee benefits. On Nove+ber "$, #$&F, (llado instituted a co+plaint .ith the Sub? Re3ional (rbitration -ranch of the N'R) in -a3uio )it! a3ainst the corporation doc7eted as N'R) )ase No. R(-?#?B5B@?&F, char3in3 ille3al dis+issal. (llado contends that durin3 her +eetin3 .ith -arredo she .as told that her ne. position is t.o 3rades lo.er than her present status althou3h there .ould be no decrease in her salar!. She continued that Valera advised her to accept her ne. assi3n+ent even if it be lo.er in ran7, but if she .as not a+enable to this, that she resi3n. Valera supposedl! told (llado that should she choose to resi3n he .ould .or7 it out for her to receive one?+onth pa! for ever! !ear of service as her separation pa! provided she +a7es it appear that her resi3nation .as voluntar!. (s it turned out she .as onl! 3iven one?half +onth pa! for ever! !ear of service. She concluded that she .as 0.a!laid0 or 0trapped,0 her transfer bein3 an elaborate sche+e for her to resi3n. To this, the corporation ans.ered that the ter+ination of (llado .as not a result of her dis+issal but rather of her o.n voluntar! act of resi3nin3, as in fact she si3ned a Cuitclai+ in its favor. On ul! "&, #$&% the labor arbiter pro+ul3ated his decision findin3 that Rosa (llado .as ille3all! dis+issed and ordered her reinstate+ent to her for+er position in -a3uio )it! .ithout loss of seniorit! ri3hts and for the pa!+ent to her of bac7.a3es eCuivalent to one !ear pa! +inus the a+ount she alread! received fro+ the corporation as a conseCuence of her 0resi3nation.0 The labor arbiter found that the transfer of (llado .ould cause her and her fa+il! 0financial dislocation0 and, therefore, 0such transfer ... a+ounts to constructive dis+issal.0 The contention of =R8P('IF8 that (llado voluntaril! resi3ned .as re<ected, the labor arbiter reasonin3 that (llado .anted to continue to .or7 for the co+pan!, as sho.n b! her repeated pleas, but, forced to accept a position t.o?3rades lo.er than her present status and at a place inconvenient for her, and presented .ith Valero6s representation that he could .or7 it out for (llado to receive one +onth pa! for ever! !ear of service as her separation pa!. This, to the +ind of the labor arbiter, 3ave (llado no choice but to resi3n and si3n the Cuitclai+ for her to receive her separation pa!. Fro+ this decision both parties appealed, (llado as7in3 for full bac7 .a3es .hile the corporation disputed the rulin3 that co+plainant .as constructivel! dis+issed. On anuar! #&, #$&$, the N'R) affir+ed the decision of the labor arbiter a3reein3 that/

>nder the circu+stances, O(lladoP had no choice. :ers .as one of adherence. She had no better alternative. Faced b! the harsh realities of bein3 rendered <obless, she had to accept the to7en 3ratuit! bein3 proferred to her even if it .as +uch less than .hat .as e2pected b! her earlier. She had to +a7e so+ethin3 under the circu+stances or else she .ould have nothin3 at hand and .ith dependents to support at that. Pa!+ent of her severance pa! .as conditional, hence, she had to si3n the release and Cuitclai+ papers and thereafter her services .ere ter+inated b! respondent on account of 0resi3nation.0 222 222 222 9hen an e+plo!ee is bein3 transferred, a+ountin3 to a de+otion in ran7 or 3rade co+pared .ith his actual position and on the prete2t that his present position is abolished, this is certainl! an arbitrar! e2ercise of +ana3e+ent prero3ative, O(llado6sP Cuittin3 her <ob is of no +o+ent because under the circu+stances, she had no choice since her present position .as deleted or abolished even before she could accept or ob<ect to her transfer to the head office of respondent co+pan!. :ence the 'abor (rbiter .as perfectl! correct in rulin3 that co+plainant .as constructivel! dis+issed. *pp. 55?5F, Rollo, The N'R) +odified, ho.ever, the a.ard 3iven b! the labor arbiter in this .ise/ ... .ith +odification b! hereb! orderin3 and directin3 respondent co+pan! to pa! co+plainant full bac7.a3es .ithout Cualification effective fro+ her date of separation fro+ the service on Ma! "F, #$&F up to her actual reinstate+ent to her for+er position or to an eCuivalent or co+parable position .ithout loss of seniorit! ri3hts, sub<ect to the three *5, !ears li+itation. In the event that co+plainant6s reinstate+ent beco+es i+practical due to a la.ful supervenin3 event, ... co+plainant is entitled to one *#, +onth separation pa! based on her latest salar!, in addition to her bac7.a3es as herein decreed, but deductin3 therefro+ the benefits she had earlier received as decreed b! the 'abor (rbiter, ... *p. 5$, Rollo, =R8P('IF8 +oved for reconsideration pointin3 out, inter a alia, that there is nothin3 in the records .hich .ould sho. that the abolition of the position of Re3ional )ashier .as contrived to ease or force (llado out of e+plo!+ent, but this .as denied. :ence, this petition for certiorari. For initial consideration is the Cuestion of .hether the decision of the N'R) had

+atured into finalit! considerin3 that, as private respondent (llado points out, =R8P('IF8 received the order of the N'R) den!in3 its +otion for reconsideration on March #5, #$&$ .hereas the instant petition .as filed onl! after fift!?seven *E@, da!s therefro+ or onl! on Ma! $, #$&$. It is basic, ho.ever, that a special civil action of certiorari +a! be filed .ithin a reasonable ti+e and there is no ti+e fra+e fi2ed b! Rule %E of the Rules of )ourt *)ubar v. Mendo1a, No. EEB5E, Februar! "5,#$&5,#"B S)R( @%&4 Ma3na Rubber Manufacturin3 )orporation v. Drilon, =.R. No. &#@@#, Dece+ber "$, #$&&, #%& S)R( @"%,. Thus, in Santos V. N'R), =.R. No. @%$$#, October "&, #$&&, #%% S)R( @E$, 9e entertained a petition for certiorari not.ithstandin3 the fact that it .as filed onl! after seven *@, +onths fro+ the pro+ul3ation of the N'R) decision considerin3 that it has not !et been e2ecuted and the substantial issues raised +erited this )ourt6s attention. (nd after a careful readin3 of this case, 9e are of the opinion that the instant petition has +erit. Much has been said re3ardin3 the transfer of (llado to Ma7ati, Metro Manila disre3ardin3 the reason for such transfer .hich is the abolition of (llado6s position of Re3ional )ashier in -a3uio )it!. That it has in fact been abolished is not disputed. It is also not disputed that the Re3ional (d+inistrator had assu+ed the function of Re3ional )ashier and =R8P('IF8 had not hired an!one in (llado6s stead. In fact, there is no serious challen3e at all to the decision of =R8P('IF8 deletin3 (llado6s ite+. It is, of course, a +ana3e+ent prero3ative to abolish a position .hich it dee+s no lon3er necessar! and this )ourt, absent an! findin3s of +alice on the part of +ana3e+ent, cannot erase that initiative si+pl! to protect the person holdin3 that office. (nd 9e do not see an!thin3 that .ould indicate that (llado6s position .as abolished to ease her out of e+plo!+ent. The deletion of (llado6s office, therefore, should be accepted as a valid e2ercise of +ana3e+ent prero3ative. -ut =R8P('IF8 sou3ht to acco++odate (llado b! orderin3 her to transfer to a position recentl! vacated. 9hether that position is t.o 3rades lo.er than a Re3ional )ashier is i++aterial because =R8P('IF8 could have then ter+inated (llado6s services .hen it abolished her position. :er proposed transfer .as +erel! an acco++odation. It is erroneous, therefore, to conclude that a situation .as created b! =R8P('IF8 to force (llado to resi3n. -ased on his pre+ise, ho.ever, that (llado6s services could have been ter+inated after her position as Re3ional )ashier .as abolished, 9e adopt b! analo3! (rticle "&5 of the 'abor )ode .hich provides that in case of ter+ination of e+plo!+ent due to installation of labor?savin3 devices or redundanc!, the .or7er affected shall

be entitled to a separation pa! of at least one *#, +onth pa! or to at least one *#, +onth pa! for ever! !ear of service .hichever is hi3her. 9e too7 consideration of the fact that (llado6s proposed transfer to Ma7ati, Metro Manila .ould indeed entail +uch sacrifice on her part and the findin3 of the N'R) that the position (llado .as to assu+e is t.o 3rades lo.er than a Re3ional )ashier so +uch so that =R8P('IF86s acco++odation to her is al+ost illusor!. Thus, in the interest of <ustice, (llado should be entitled to receive one *#, +onth pa! for ever! !ear of service as her separation pa!. Since (llado .as alread! paid one?half *U, +onth pa! for ever! !ear of service she is onl! entitled to the balance. ())ORDIN=';, the decision of the N'R), dated anuar! #&, #$&$, and its order, dated Februar! "&, #$&$, are S8T (SID8 and a ne. one entered findin3 no case of ille3al dis+issal on the part of petitioner =R8P('IF8 but holdin3 it liable for the balance of Rosa (llado6s separation pa! as above decreed. SO ORD8R8D. )arvasa, Cr&z, +anca(co and +ri,o-A-&ino, ..., conc&