BITOY VS FLY ACE (ONUS PROBANDI OF EMPLOYER EMPLOYEE RELATIONSHIP)

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

On appeal with the NLRC, Javier was favored. It ruled that the LA skirted the
argument of Javier and immediately concluded that he was not a regular
employee simply because he failed to present proof. It was of the view that
a pakyaw-basis arrangement did not preclude the existence of employeremployee relationship. Payment by result x x x is a method of
compensation and does not define the essence of the relation. It is a mere
method of computing compensation, not a basis for determining the
existence or absence of an employer-employee relationship.
Finding Javier to be a regular employee, the NLRC ruled that he was entitled
to a security of tenure. For failing to present proof of a valid cause for his
termination, Fly Ace was found to be liable for illegal dismissal of Javier who
was likewise entitled to backwages and separation pay in lieu of
reinstatement.
Ruling of the Court of Appeals
On March 18, 2010, the CA annulled the NLRC findings that Javier was indeed
a former employee of Fly Ace and reinstated the dismissal of Javiers
complaint as ordered by the LA. The CA exercised its authority to make its
own factual determination anent the issue of the existence of an employeremployee relationship between the parties. According to the CA:
xxx
In an illegal dismissal case the onus probandi rests on the employer to prove
that its dismissal was for a valid cause. However, before a case for illegal
dismissal can prosper, an employer-employee relationship must first be
established. x x x it is incumbent upon private respondent to prove the
employee-employer relationship by substantial evidence.
xxx
It is incumbent upon private respondent to prove, by substantial evidence,
that he is an employee of petitioners, but he failed to discharge his burden.
The non-issuance of a company-issued identification card to private
respondent supports petitioners contention that private respondent was not
its employee.[12]
The CA likewise added that Javiers failure to present salary vouchers,
payslips, or other pieces of evidence to bolster his contention, pointed to the
inescapable conclusion that he was not an employee of Fly Ace. Further, it
found that Javiers work was not necessary and desirable to the business or
trade of the company, as it was only when there were scheduled deliveries,
which a regular hauling service could not deliver, that Fly Ace would contract
the services of Javier as an extra helper. Lastly, the CA declared that the facts
alleged by Javier did not pass the control test.

He contracted work outside the company premises; he was not required to

observe definite hours of work; he was not required to report daily; and he
was free to accept other work elsewhere as there was no exclusivity of his
contracted service to the company, the same being co-terminous with the
trip only.[13] Since no substantial evidence was presented to establish an
employer-employee relationship, the case for illegal dismissal could not
prosper.
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
THE PETITIONER WAS NOT A REGULAR EMPLOYEE OF FLY ACE.
II.
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
THE PETITIONER IS NOT ENTITLED TO HIS MONETARY CLAIMS.[14]
The Court affirms the assailed CA decision.
It must be noted that the issue of Javiers alleged illegal dismissal is anchored
on the existence of an employer-employee relationship between him and Fly
Ace. This is essentially a question of fact. Generally, the Court does not
review errors that raise factual questions. However, when there is conflict
among the factual findings of the antecedent deciding bodies like the LA, the
NLRC and the CA, it is proper, in the exercise of Our equity jurisdiction, to
review and re-evaluate the factual issues and to look into the records of the
case and re-examine the questioned findings.[26] In dealing with factual
issues in labor cases, substantial evidence that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a
conclusion is sufficient.[27]
As the records bear out, the LA and the CA found Javiers claim of
employment with Fly Ace as wanting and deficient. The Court is constrained
to agree. Although Section 10, Rule VII of the New Rules of Procedure of the
NLRC[28] allows a relaxation of the rules of procedure and evidence in labor
cases, this rule of liberality does not mean a complete dispensation of
proof. Labor officials are enjoined to use reasonable means to ascertain the
facts speedily and objectively with little regard to technicalities or formalities
but nowhere in the rules are they provided a license to completely discount
evidence, or the lack of it. The quantum of proof required, however, must still
be satisfied. Hence, when confronted with conflicting versions on factual
matters, it is for them in the exercise of discretion to determine which party
deserves credence on the basis of evidence received, subject only to the
requirement that their decision must be supported by substantial
evidence.[29] Accordingly, the petitioner needs to show by substantial
evidence that he was indeed an employee of the company against which he
claims illegal dismissal.

In sum, the rule of thumb remains: the onus probandi falls on petitioner to
establish or substantiate such claim by the requisite quantum of evidence.
[32] Whoever claims entitlement to the benefits provided by law should
establish his or her right thereto x x x.[33] Sadly, Javier failed to adduce
substantial evidence as basis for the grant of relief.
In this case, the LA and the CA both concluded that Javier failed to establish
his employment with Fly Ace. By way of evidence on this point, all that Javier
presented were his self-serving statements purportedly showing his activities
as an employee of Fly Ace. Clearly, Javier failed to pass the substantiality
requirement to support his claim. Hence, the Court sees no reason to depart
from the findings of the CA.
While Javier remains firm in his position that as an employed stevedore of Fly
Ace, he was made to work in the company premises during weekdays
arranging and cleaning grocery items for delivery to clients, no other proof
was submitted to fortify his claim. The lone affidavit executed by one Bengie
Valenzuela was unsuccessful in strengthening Javiers cause. In said
document, all Valenzuela attested to was that he would frequently see Javier
at the workplace where the latter was also hired as stevedore.[34] Certainly,
in gauging the evidence presented by Javier, the Court cannot ignore the
inescapable conclusion that his mere presence at the workplace falls short in
proving employment therein. The supporting affidavit could have, to an
extent, bolstered Javiers claim of being tasked to clean grocery items when
there were no scheduled delivery trips, but no information was offered in this
subject simply because the witness had no personal knowledge of Javiers
employment status in the company. Verily, the Court cannot accept Javiers
statements, hook, line and sinker.
The Court is of the considerable view that on Javier lies the burden to pass
the well-settled tests to determine the existence of an employer-employee
relationship, viz: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control
the employees conduct. Of these elements, the most important criterion is
whether the employer controls or has reserved the right to control the
employee not only as to the result of the work but also as to the means and
methods by which the result is to be accomplished.[35]
In this case, Javier was not able to persuade the Court that the above
elements exist in his case. He could not submit competent proof that Fly Ace
engaged his services as a regular employee; that Fly Ace paid his wages as
an employee, or that Fly Ace could dictate what his conduct should be while
at work. In other words, Javiers allegations did not establish that his
relationship with Fly Ace had the attributes of an employer-employee

relationship on the basis of the above-mentioned four-fold test. Worse, Javier

was not able to refute Fly Aces assertion that it had an agreement with a
hauling company to undertake the delivery of its goods. It was also baffling
to realize that Javier did not dispute Fly Aces denial of his services
exclusivity to the company. In short, all that Javier laid down were bare
allegations without corroborative proof.
Fly Ace does not dispute having contracted Javier and paid him on a per
trip rate as a stevedore, albeit on a pakyaw basis. The Court cannot fail to
note that Fly Ace presented documentary proof that Javier was indeed paid
on a pakyaw basis per the acknowledgment receipts admitted as competent
evidence by the LA. Unfortunately for Javier, his mere denial of the
signatures affixed therein cannot automatically sway us to ignore the
documents because forgery cannot be presumed and must be proved by
clear, positive and convincing evidence and the burden of proof lies on the
party alleging forgery.[36]
While the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every labor
dispute will be automatically decided in favor of labor. Management also has
its rights which are entitled to respect and enforcement in the interest of
simple fair play. Out of its concern for the less privileged in life, the Court has
inclined, more often than not, toward the worker and upheld his cause in his
conflicts with the employer. Such favoritism, however, has not blinded the
Court to the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the applicable law and
doctrine.[39]
PIGCAULAN VS SECURITY AND CREDIT (ONUS PROBANDI OF LEGALITY OF
DISMISSAL)
Canoy and Pigcaulan were both employed by SCII as security guards and
were assigned to SCIIs different clients. Subsequently, however, Canoy and
Pigcaulan filed with the Labor Arbiter separate complaints[7] for
underpayment of salaries and non-payment of overtime, holiday, rest day,
service incentive leave and 13th month pays. These complaints were later
on consolidated as they involved the same causes of action.
Canoy and Pigcaulan, in support of their claim, submitted their
respective daily time records reflecting the number of hours served and their
wages for the same
Respondents, however, maintained that Canoy and Pigcaulan were paid their
just salaries and other benefits under the law; that the salaries they received
were above the statutory minimum wage and the rates provided by the
Philippine Association of Detective and Protective Agency Operators
(PADPAO) for security guards; that their holiday pay were already included in
the computation of their monthly salaries; that they were paid additional

premium of 30% in addition to their basic salary whenever they were

required to work on Sundays and 200% of their salary for work done on
holidays; and, that Canoy and Pigcaulan were paid the corresponding
13th month pay for the years 1998 and 1999. In support thereof, copies of
payroll listings[8] and lists of employees who received their 13th month pay
for the periods December 1997 to November 1998 and December 1998 to
November 1999[9] were presented. In addition, respondents contended that
Canoys and Pigcaulans monetary claims should only be limited to the past
three years of employment pursuant to the rule on prescription of claims.
Ruling of the Labor Arbiter
The Labor Arbiter held that the payroll listings presented by the respondents
did not prove that Canoy and Pigcaulan were duly paid as same were not
signed by the latter or by any SCII officer. The 13th month payroll was,
however, acknowledged as sufficient proof of payment, for it bears Canoys
and Pigcaulans signatures. Thus, without indicating any detailed
computation of the judgment award, the Labor Arbiter ordered the payment
of overtime pay, holiday pay, service incentive leave pay and proportionate
13th month pay for the year 2000 in favor of Canoy and Pigcaulan.
Ruling of the National Labor Relations Commission
Accordingly, the Labor Arbiters Decision was sustained. The motion for
reconsideration thereto was likewise dismissed by the NLRC in a
Resolution[15] dated June 14, 2004.
Ruling of the Court of Appeals
The CA, in its Decision[17] dated February 24, 2006, set aside the rulings of
both the Labor Arbiter and the NLRC after noting that there were no factual
and legal bases mentioned in the questioned rulings to support the
conclusions made. Consequently, it dismissed all the monetary claims of
Canoy and Pigcaulan on the following rationale:
Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied
by the CA in a Resolution[19] dated June 28, 2006.
Issues
The petition ascribes upon the CA the following errors:
I. The Honorable Court of Appeals erred when it dismissed the complaint on
mere alleged failure of the Labor Arbiter and the NLRC to observe the
prescribed form of decision, instead of remanding the case for reformation of
the decision to include the desired detailed computation.
II. The Honorable Court of Appeals erred when it [made] complainants suffer
the consequences of the alleged non-observance by the Labor Arbiter and

NLRC of the prescribed forms of decisions considering that they have

complied with all needful acts required to support their claims.
III. The Honorable Court of Appeals erred when it dismissed the complaint
allegedly due to absence of legal and factual [bases] despite attendance of
substantial evidence in the records.[20]
Our Ruling
The assailed CA Decision is considered final as
to Canoy.
Canoy cannot now simply incorporate in his affidavit a verification of the
contents and allegations of the petition as he is not one of the petitioners
therein. Suffice it to state that it would have been different had the said
petition been filed in behalf of both Canoy and Pigcaulan. In such a case,
subsequent submission of a verification may be allowed as non-compliance
therewith or a defect therein does not necessarily render the pleading, or the
petition as in this case, fatally defective.[24] The court may order its
submission or correction, or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be
dispensed with in order that the ends of justice may be served
thereby. Further, a verification is deemed substantially complied with when
one who has ample knowledge to swear to the truth of the allegations in the
complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct.[25] However,
even if it were so, we note that Canoy still failed to submit or at least
incorporate in his affidavit a certificate of non-forum shopping.
The filing of a certificate of non-forum shopping is mandatory so much so
that non-compliance could only be tolerated by special circumstances and
compelling reasons.[26] This Court has held that when there are several
petitioners, all of them must execute and sign the certification against forum
shopping; otherwise, those who did not sign will be dropped as parties to the
case.[27] True, we held that in some cases, execution by only one of the
petitioners on behalf of the other petitioners constitutes substantial
compliance with the rule on the filing of a certificate of non-forum shopping
on the ground of common interest or common cause of action or defense.
[28] We, however, find that common interest is not present in the instant
petition. To recall, Canoys and Pigcaulans complaints were consolidated
because they both sought the same reliefs against the same
respondents. This does not, however, mean that they share a common
interest or defense. The evidence required to substantiate their claims may
not be the same. A particular evidence which could sustain Canoys action
may not effectively serve as sufficient to support Pigcaulans claim.
Having declared the present petition as solely filed by Pigcaulan, this Court
shall consider the subsequent pleadings, although apparently filed under his
and Canoys name, as solely filed by the former.

There was no substantial evidence to support the grant of overtime pay.

The Labor Arbiter ordered reimbursement of overtime pay, holiday pay,
service incentive leave pay and 13th month pay for the year 2000 in favor of
Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized
computations they submitted which he considered as representative daily
time records to substantiate the award of salary differentials. The NLRC then
sustained the award on the ground that there was substantial

evidence of underpayment of salaries and benefits.

We find nothing in the records which could substantially support Pigcaulans
contention that he had rendered service beyond eight hours to entitle him to
overtime pay and during Sundays to entitle him to restday pay. Hence, in the
absence of any concrete proof that additional service beyond the normal
working hours and days had indeed been rendered, we cannot affirm the
grant of overtime pay to Pigcaulan.
Pigcaulan is entitled to holiday pay, service incentive leave pay and
proportionate 13th month pay for year 2000.
However, with respect to the award for holiday pay, service incentive leave
pay and 13th month pay, we affirm and rule that Pigcaulan is entitled to
these benefits.
Article 94 of the Labor Code provides that:
ART. 94. RIGHT TO HOLIDAY PAY. (a) Every worker shall be paid his regular
daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers;
While Article 95 of the Labor Code provides:
ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. (a) Every employee who has
rendered at least one year of service shall be entitled to a yearly service
incentive of five days with pay.
Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays
even if he does not work.[30] Likewise, express provision of the law entitles
him to service incentive leave benefit for he rendered service for more than a
year already. Furthermore, under Presidential Decree No. 851,[31] he should
be paid his 13th month pay. As employer, SCII has the burden of proving that
it has paid these benefits to its employees.[32]
To repeat, the burden of proving payment of these monetary claims rests on
SCII, being the employer. It is a rule that one who pleads payment has the
burden of proving it. Even when the plaintiff alleges non-payment, still the
general rule is that the burden rests on the defendant to prove payment,
rather than on the plaintiff to prove non-payment.[33] Since SCII failed to
provide convincing proof that it has already settled the claims, Pigcaulan
should be paid his holiday pay, service incentive leave benefits and
proportionate 13th month pay for the year 2000.
The CA erred in dismissing the claims instead of remanding the case to the
Labor Arbiter for a detailed computation of the judgment award.

Indeed, the Labor Arbiter failed to provide sufficient basis for the
monetary
awards granted. Such failure, however, should not result in prejudice to the
substantial rights of the party. While we disallow the grant of overtime pay
and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter
of right, to his holiday pay, service incentive leave pay and 13th month pay
for year 2000. Hence, the CA is not correct in dismissing Pigcaulans claims
in its entirety.
Consistent with the rule that all money claims arising from an
employer-employee relationship shall be filed within three years from the
time the cause of action accrued,[34] Pigcaulan can only demand the
amounts due him for the period within three years preceding the filing of the
complaint in 2000. Furthermore, since the records are insufficient to use as
bases to properly compute Pigcaulans claims, the case should be remanded
to the Labor Arbiter for a detailed computation of the monetary benefits due
to him.
WHEREFORE, the petition is GRANTED.
The case is REMANDED to the Labor Arbiter for further proceedings to
determine the exact amount and to make a detailed computation of the
monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit
Investigation Inc. should pay without delay.
PALEA
Pacific Consultants v. Schonfeld
Callejo, 2007,
Third Respondent Klaus Schonfeld, a Canadian citizen, had been a consultant in the fieldof
environmental engineering and water supply and sanitation. Pacicon Philippines Inc., a subsidiary
of Pacific Consultants International of Japan, is a corporation with the primary purpose to engage
in the business of providing specialty andtechnical services both in and out of the Philippines.
The president of PPI, JensPeter Henrichsen, who was also the director of PCIJ, was based in
Tokyo, Japan. Respondent was employed by PCIJ, through Henrichsen, as Sector Manager
of PPIin its Water and Sanitation Department. However, PCIJ assigned him as PPI sector manager
in the Philippines. Respondent arrived in the Philippines and assumed his position as PPI Sector
Manager. He was accorded the status of a resident alien.PPI applied for an Alien Employment
Permit for respondent before the DOLE and the DOLE granted the application and issued
the Permit to respondent. Respondent later received a letter from Henrichsen informing him that
his employment had been terminated for the reason that PCIJ and PPI had not been successful in
the water and sanitation sector in the Philippines. Respondent filed with PPI several money
claims. PPI partially settled some of his claims, but refused to pay the rest. Respondent filed a
Complaint for Illegal Dismissal. Petitioners aver that since respondent is a Canadian citizen, the
CA erred in ignoring their claim that the principles of forum non conveniens and lex loci

contractus are applicable. They also point out that the contract of employment of respondent was
executed in Tokyo. Moreover, under Section 21 of the General
Conditions for Employment incorporated in respondents letter of employ
ment, the dispute between respondent and PCIJ should be settled by the court of arbitration of
London. Petitioners insist that the U.S. Labor-Management Act applies only to U.S. workers and
employers, while the Labor Code applies only to Filipino employers and Philippine-based
employers and their employees, not to PCIJ. In fine, the jurisdictions of the NLRC and Labor
Arbiter do not extend to foreign workers who executed employment agreements with foreign
employers abroad, although "seconded" to the Philippines.SC: The petition is denied for lack of
merit.The settled rule on stipulations regarding venue, as held by this Court in thevintage case of
Philippine Banking Corporation v. Tensuan, is that while they are considered valid and
enforceable, venue stipulations in a contract do not, as a rule, supersede the general rule set forth
in Rule 4 of the Revised Rules of Court in the
absence of qualifying or restrictive words. They should be considered merely
as an agreement or additional forum, not as limiting venue to the specified
place. They are not exclusive but, rather permissive. If the intention of
the parties were to restrict venue, there must be accompanying language
clearly and categorically expressing their purpose and design that actions
between them be litigated only at the place named by them.
Petitioners insistence on the application of the principle of forum non
conveniens
must be rejected. The bare fact that respondent is a Canadian citizen and
was are patriate does not warrant the application of the principle for the
following reasons: First. The Labor Code of the Philippines does not include
forum non conveniens as a ground for the dismissal of the complaint.
Second. The proprietyof dismissing a case based on this principle requires a
factual determination; hence,it is properly considered as defense. Third.
In Bank of America, NT&SA, Bank ofAmerica International, Ltd. v. Court of
Appeals, this Court held that: [a] PhilippineCourt may assume jurisdiction
over the case if it chooses to do so; provided, thatthe following requisites are
met: (1) that the Philippine Court is one to which the parties
may conveniently resort to; (2) that the Philippine Court is in a position to
make an intelligent decision as to the law and the facts; and, (3) that
the Philippine Court has or is likely to have power to enforce its decision
Coca Cola Bottlers (Phils.) vs. Climaco
[GR. No. 146881, Feb. 5, 2007]
Facts:
Coca-Cola hired Dr. Climaco by virtue of a Retainer Agreement with a
compensation fixed at
P3,000.00 per month. Dr. Climaco may charge professional fee for hospital
services rendered in line with his specialization. He is to observe clinic hours
at the company premises from Monday to Saturday at least two (2) hours
each day unless such schedule is otherwise changed by the company as the

situation so warrants, subject to the labor Code provisions on Occupational

Safety and Health Standards as the Company may determine. It was also
expressly stated in the contract that no employer-employee relationship shall
exist between the retainer and the company. The doctor also agrees to
perform the duties and obligations enumerated in the Comprehensive
Medical Plan. After the expiration of the 1-year retainer agreement,
respondent continued to perform his functions as a company doctor to CocaCola until he received a letter from the latter concluding their retainership
agreement effective 30 days from receipt thereof. In turn, he filed a
complaint before the NLRC, seeking recognition as a regular employee and
prayed for the payment of all benefits of a regular employee.
Issue:
Whether or not Dr. Climaco was Coca-Colas employee
Held:
The circumstances of this case show that no employer-employee relationship
exists between the
parties because the company lacked the power of control over the
performance by respondent of his duties. The company in providing a
Comprehensive Medical Plan, merely issued guidelines in order to ensue that
the end result was achieved, but did not control the means and methods by
which respondent performed his assigned tasks. The company lacks the
power of control that the contract provides that the respondent shall be
directly responsible to the employee concerned and their dependents for any
injury, harm or damage caused through professional negligence,
incompetence, or other valid causes of action.
The schedule of work and the requirement to be on call for emergency cases
do not amount to such control, but are necessary incidents to the
Retainership Agreement.
The Retainership Agreement granted to both parties the power to terminate
their relationship upon giving a 30-day notice. Hence, petitioner company did
not wield the sole power of dismissal or termination. There is nothing wrong
with the employment of respondent as a retained physician of petitioner
company and upholds the validity of the retainership agreement which
clearly states that no employer-employee relationship existed between the
parties.
Dumpit-Murillo vs. CA
[GR. No. 164652.June 8, 2007]
Facts:
Murillowas hired under a talent contract, as a newscaster and co-anchor for
ABCs early evening
news program. The contract was for a period of three months. It was
renewed fifteen times within four years. Upon the expiration of her last talent
contract, she informed ABC of her desire to renew. Not having received a
reply, she considered the companys inaction as constructive dismissal of her
services.

Held:
Murillo was not a fixed term employee. An employer-employee relationship
was created when the private respondents started to merely renew the
contracts repeatedly fifteen times or for four consecutive years. Petitioner
was a regular employee. The practice of having fixed-term contracts in the
industry does not automatically make all talent contracts valid and compliant
with labor law. In the case at bar, it does not appear that the employer and
employee dealt with each other on equal terms. Being one of the numerous
newscasters/broadcasters of ABC and desiring to keep her job as a
broadcasting practitioner, petitioner was left with no choice but to affix her
signature of conformity on each renewal of her contract as already prepared
by private respondents; otherwise, private respondents would have simply
refused to renew her contract. Patently, the petitioner occupied a position of
weakness vis--vis the employer. Moreover, private respondents practice of
repeatedly extending petitioners 3-month contract for four years is a
circumvention of the acquisition of regular status. Hence, there was no valid
fixed-term employment between petitioner and private respondents. Sonza
case is not applicable [i.e. absence of employer-employee relationship
between a talent and the media entity which engaged the talents services
on a per talent contract basis] In Sonza, the television station did not instruct
Sonza how to perform his job. How Sonza delivered his lines, appeared on
television, and sounded on radio were outside the television stations control.
In the case at bar, ABC had control over the performance of petitioners work.
Noteworthy too, is the comparatively low P28,000 monthly pay of petitioner
vis the P300,000 a month salary of Sonza ,that all the more bolsters the
conclusion that petitioner was not in the same situation as Sonza. The duties
of petitioner as enumerated in her employment contract indicate that ABC
had control over the work of petitioner. Aside from control, ABC also dictated
the work assignments and payment of petitioners wages. ABC also had
power to dismiss her. Murillo was a regular employee
The assertion that a talent contract exists does not necessarily prevent a
regular employment status.
Petitioners work was necessary or desirable in the usual business or trade of
the employer which
includes, as a pre-condition for its enfranchisement, its participation in the
governments news and public information dissemination. In addition, her work was
continuous for a period of four years. This repeated engagement under contract of
hire is indicative of the necessity and desirability of the petitioners work in private
respondent ABCs business.
CONSOLIDATED BROADCASTING SYSTEM VS OBERIO

Sometime in August 1998, petitioner reduced the number of its drama productions from 14 to 11, but was
opposed by respondents. After the negotiations failed, the latter sought the intervention of the
Department of Labor and Employment (DOLE), which on November 12, 1998, conducted through its
Regional Office, an inspection of DWYB station. The results thereof revealed that petitioner is guilty of
violation of labor standard laws, such as underpayment of wages, 13 th month pay, non-payment of service
incentive leave pay, and non-coverage of respondents under the Social Security System.

Petitioner contended that respondents are not its employees and refused to submit the
payroll and daily time records despite the subpoena duces tecum issued by the DOLE Regional
Director. Petitioner further argued that the case should be referred to the NLRC because the
Regional Director has no jurisdiction over the determination of the existence of employeremployee relationship which involves evidentiary matters that are not verifiable in the normal
course of inspection.
Vexed by the respondents complaint, petitioner allegedly pressured and intimidated
respondents. Respondents Oberio and Delta were suspended for minor lapses and the payment of their
salaries were purportedly delayed. Eventually, on February 3, 1999, pending the outcome of the
inspection case with the Regional Director, respondents were barred by petitioner from reporting for
work; thus, the former claimed constructive dismissal. [5]
On

April

8,

1999,

the

DOLE

Regional

directing petitioner to pay respondents a total of P318,986.74

payment/underpayment of the salary and benefits due them.

[6]

Director

issued

representing

an

order
non-

However, on July 8, 1999, the Regional

Director reconsidered the April 8, 1999 order and certified the records of the case to the NLRC, Regional
Arbitration Branch VI, for determination of employer-employee relationship. [7] Respondents appealed
said order to the Secretary of Labor.
On October 12, 1999, respondents filed a case for illegal dismissal, underpayment/nonpayment of wages and benefits plus damages against petitioner. On April 10, 2000, the Labor
Arbiter dismissed the case without prejudice while waiting for the decision of the Secretary of
Labor on the same issue of the existence of an employer-employee relationship between
petitioner and respondents.

On appeal to the NLRC, respondents raised the issue of employer-employee relationship

and submitted the following to prove the existence of such relationship, to wit: time cards,
identification cards, payroll, a show cause order of the station manager to respondent Danny
Oberio and memoranda either noted or issued by said manager. Petitioner, on the other hand, did
not present any documentary evidence in its behalf and merely denied the allegations of
respondents. It claimed that the radio station pays for the drama recorded by piece and that it has
no control over the conduct of respondents.
On December 5, 2001, the NLRC rendered a decision holding that respondents were
regular employees of petitioner who were illegally dismissed by the latter. It further held that
respondents complied with the requirements of the rule on forum shopping. The decretal portion
thereof, provides:
WHEREFORE, premises considered, the decision of Labor Arbiter Ray Alan T.
Drilon dated 10 April 2000 is SET ASIDE and VACATED and a new one entered.
Ordering respondent Consolidated Broadcasting System, Inc. (Bombo Radyo
Philippines), DYWB to reinstate the complainants without loss of seniority rights wi[th]
full back wages computed from February 1999 up to the time of actual reinstatement.
SO ORDERED.[8]
Hence, petitioner filed the instant recourse.
The issues for resolution are as follows: (1) Did respondents violate the rule on forum
shopping; (2) whether the NLRC correctly ruled on the merits of the case instead of remanding
the case to the Labor Arbiter; (3) whether respondents were employees of petitioner; and (4)
whether their dismissal was illegal.
Respondents complaint in the inspection case before the DOLE Regional Director alleged that they
were under the employ of petitioner at the time of the filing of said complaint. Pending the resolution
thereof, they claimed to have been dismissed; hence, the filing of the present illegal dismissal case before
the Labor Arbiter. The causes of action in these two complaints are different, i.e., one for violation of
labor standard laws, and the other, for illegal dismissal, but the entitlement of respondents to the reliefs
prayed for hinges on the same issue of the existence of an employer-employee relationship. While the
decision on the said issue by one tribunal may operate as res judicata on the other, dismissal of the

present illegal dismissal case on the ground of forum shopping, would work injustice to respondents
because it is the law itself which provides for two separate remedies for their distinct causes of action.
Under Article 217[9] of the Labor Code, termination cases fall under the jurisdiction of
Labor Arbiters. Whereas, Article 128[10] of the same Code vests the Secretary of Labor or his duly
authorized representatives with the power to inspect the employers records to determine and
compel compliance with labor standard laws. The exercise of the said power by the Secretary or
his duly authorized representatives is exclusive to cases where employer-employee relationship
still exists. Thus, in cases where the complaint for violation of labor standard laws preceded the
termination of the employee and the filing of the illegal dismissal case, it would not be in
consonance with justice to charge the complainants with engaging in forum shopping when the
remedy available to them at the time their causes of action arose was to file separate cases before
different fora. Besides, in the instant case, respondent Danny Oberio disclosed in the verification
the pendency of the case regarding wage differential. [11] In addition, said case was discussed in
detail in the position paper,[12] evincing the absence of any intention on the part of respondents to
mislead the Labor Arbiter.
Similarly, in Benguet Management Corporation v. Court of Appeals,[13] petitioner filed separate
actions to enjoin the foreclosure of real estate mortgages before the Regional Trial Courts of San Pablo
City and Zambales which has jurisdiction over the place where the properties were located. In both
cases, petitioner contended, among others, that the loan secured by said mortgages imposed unauthorized
penalties, interest and charges. The Court did not find the mortgagors guilty of forum shopping
considering that since injunction is enforceable only within the territorial limits of the trial court, the
mortgagor is left without remedy as to the properties located outside the jurisdiction of the issuing court,
unless an application for injunction is made with another court which has jurisdiction over the latter
properties.
By parity of reasoning, it would be unfair to hold respondents in the instant case guilty of forum
shopping because the recourse available to them after their termination, but pending resolution of the
inspection case before the DOLE, was to file a case for illegal dismissal before the Labor Arbiter who has
jurisdiction over termination disputes.
More importantly, substantial justice dictates that this case be resolved on the merits considering
that the NLRC and the Court of Appeals correctly found that there existed an employer-employee

relationship between petitioner and respondents and that the latters dismissal was illegal, as will be
discussed hereunder.
In the same vein, the NLRC correctly ruled on the merits instead of remanding the case to the
Labor Arbiter. Respondents specifically raised the issue of the existence of employer-employee
relationship but petitioner refused to submit evidence to disprove such relationship on the erroneous
contention that to do so would constitute a waiver of the right to question the jurisdiction of the NLRC to
resolve the case on the merits. [14] This is rather odd because it was the stand of petitioner in the
inspection case before the DOLE that the case should be certified to the NLRC for the resolution of the
issue of employer-employee relationship. But when the same issue was proffered before the NLRC, it
refused to present evidence and instead sought the dismissal of the case invoking the pendency of the
inspection case before the DOLE. Petitioner refused to meet head on the substantial aspect of this
controversy and resorted to technicalities to delay its disposition. It must be stressed that labor tribunals
are not bound by technical rules and the Court would sustain the expedient disposition of cases so long as
the parties are not denied due process. [15] The rule is that, due process is not violated where a person is
given the opportunity to be heard, but chooses not to give his or her side of the case. [16] Significantly,
petitioner never claimed that it was denied due process. Indeed, no such denial exists because it had all
the opportunities to present evidence before the labor tribunals below, the Court of Appeals, and even
before this Court, but chose not to do so for reasons which will not warrant the sacrifice of substantial
justice over technicalities.
On the third issue, respondents employment with petitioner passed the four-fold test on
employer-employee relations, namely: (1) the selection and engagement of the employee, or the power to
hire; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control the employee.
Petitioner failed to controvert with substantial evidence the allegation of respondents that
they were hired by the former on various dates from 1974 to 1997. If petitioner did not hire
respondents and if it was the director alone who chose the talents, petitioner could have easily
shown, being in possession of the records, a contract to such effect. However, petitioner merely
relied on its contention that respondents were piece rate contractors who were paid by results.
[17]

Note that under Policy Instruction No. 40, petitioner is obliged to execute the necessary

contract specifying the nature of the work to be performed, rates of pay, and the programs in
which they will work. Moreover, project or contractual employees are required to be apprised of
the project they will undertake under a written contract. This was not complied with by the

petitioner, justifying the reasonable conclusion that no such contracts exist and that respondents
were in fact regular employees.
In ABS-CBN v. Marquez,[18] the Court held that the failure of the employer to produce the contract
mandated by Policy Instruction No. 40 is indicative that the so called talents or project workers are in
reality, regular employees. Thus
Policy Instruction No. 40 pertinently provides:
Program employees are those whose skills, talents or services are
engaged by the station for a particular or specific program or undertaking
and who are not required to observe normal working hours such that on
some days they work for less than eight (8) hours and on other days
beyond the normal work hours observed by station employees and are
allowed to enter into employment contracts with other persons, stations,
advertising agencies or sponsoring companies. The engagement of
program employees,including those hired by advertising or sponsoring
companies, shall be under a written contract specifying, among other
things, the nature of the work to be performed, rates of pay, and the
programs in which they will work. The contract shall be duly
registered by the station with the Broadcast Media Council within
three days from its consummation. (Emphasis supplied)
Ironically, however, petitioner failed to adduce an iota proof that the
requirements for program employment were even complied with by it. It is basic that
project or contractual employees are appraised of the project they will work under a
written contract, specifying, inter alia, the nature of work to be performed and the rates
of pay and the program in which they will work. Sadly, however, no such written contract
was ever presented by the petitioner. Petitioner is in the best of position to present these
documents. And because none was presented, we have every reason to surmise that no
such written contract was ever accomplished by the parties, thereby belying petitioners
posture.
Worse, there was no showing of compliance with the requirement that after every
engagement or production of a particular television series, the required reports were filed
with the proper government agency, as provided no less under the very Policy Instruction
invoked by the petitioner, nor under the Omnibus Implementing Rules of the Labor Code
for project employees. This alone bolsters respondents contention that they were indeed
petitioners regular employees since their employment was not only for a particular
program.
Moreover, the engagement of respondents for a period ranging from 2 to 25 years and the
fact that their drama programs were aired not only in Bacolod City but also in the sister stations
of DYWB in the Visayas and Mindanao areas, undoubtedly show that their work is necessary and
indispensable to the usual business or trade of petitioner. The test to determine whether

employment is regular or not is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. Also, if the
employee has been performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability of that activity to the
business. Thus, even assuming that respondents were initially hired as project/contractual
employees who were paid per drama or per project/contract, the engagement of their services
for 2 to 25 years justify their classification as regular employees, their services being deemed
indispensable to the business of petitioner.[19]
As to the payment of wages, it was petitioner who paid the same as shown by the payroll
bearing the name of petitioner company in the heading with the respective salaries of respondents
opposite their names. Anent the power of control, dismissal, and imposition of disciplinary
measures, which are indicative of an employer-employee relationship, [20] the same were duly
proven by the following: (1) memorandum[21] duly noted by Wilfredo Alejaga, petitioners station
manager, calling the attention of the Drama Department to the late submission of scripts by
writers and the tardiness and absences of directors and talents, as well as the imposable fines
of P100 to P200 for future infractions; (2) the memorandum[22] of the station manager directing
respondent Oberio to explain why no disciplinary action should be taken against him for
punching the time card of a certain Mrs. Fe Oberio who was not physically present in their office;
and (3) the station managers memorandum[23] suspending respondent Oberio for six days for the
said infraction which constituted violation of petitioners network policy. All these, taken
together, unmistakably show the existence of an employer-employee relationship. Not only did
petitioner possess the power of control over their work but also the power to discipline them
through the imposition of fines and suspension for violation of company rules and policies.
Finally, we find that respondents were illegally dismissed. In labor cases, the employer has the
burden of proving that the dismissal was for a just cause; failure to show this would necessarily mean that
the dismissal was unjustified and, therefore, illegal. To allow an employer to dismiss an employee based
on mere allegations and generalities would place the employee at the mercy of his employer; and the right
to security of tenure, which this Court is bound to protect, would be unduly emasculated. [24] In this case,
petitioner merely contended that it was respondents who ceased to report to work, and never presented
any substantial evidence to support said allegation. Petitioner therefore failed to discharge its burden,
hence, respondents were correctly declared to have been illegally dismissed.

Furthermore, if doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter the employer must
affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. It
is a time-honored rule that in controversies between a laborer and his master, doubts reasonably
arising from the evidence should be resolved in the formers favor. The policy is to extend the
doctrine to a greater number of employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and protection of labor.[25]
When a person is illegally dismissed, he is entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages. In the event, however, that
reinstatement is no longer feasible, or if the employee decides not to be reinstated, the employer
shall pay him separation pay in lieu of reinstatement. Such a rule is likewise observed in the case
of a strained employer-employee relationship or when the work or position formerly held by the
dismissed employee no longer exists. In sum, an illegallydismissed employee is entitled to: (1)
either reinstatement if viable or separation pay if reinstatement is no longer viable, and
(2) backwages. In the instant controversy, reinstatement is no longer viable considering the
strained relations between petitioner and respondents. As admitted by the latter, the complaint
filed before the DOLE strained their relations with petitioner who eventually dismissed them
from service. Payment of separation pay instead of reinstatement would thus better promote the
interest of both parties.
Respondents separation pay should be computed based on their respective one (1) month
pay, or one-half (1/2) month pay for every year of service, whichever is higher,reckoned from
their first day of employment up to finality of this decision. Full backwages, on the other hand,
should be computed from the date of their dismissal until the finality of this decision. [26]
WHEREFORE, the petition is DENIED. The July 30, 2004 Decision of the Court of Appeals in
CA-G.R. SP No. 77098, finding respondents to be regular employees of petitioner and holding them to be
illegally

dismissed

and

directing

petitioner

to

pay

full

backwages,

is AFFIRMED with

the MODIFICATION that petitioner is ordered to pay respondents their separation pay instead of
effecting their reinstatement.
Lakas sa Industriya ng Kapatirang Haligi ng Alyansa-Pinagbuklad ng Promo ng
Burlingame (LIKHA-PMPB) v.Burlingame Corporation
Facts:LIKHA-PMPB filed a petition for certification electionbefore the DOLE which they
sought to represent the rank-and-file promo employees of Burlingame Corporation.They
prayed to be recognized to the CBA agent or inalternative a certification consent election

be held amongthe rank-and-file promo employees. Respondents filed amotion to dismiss and
averred that there is no employeremployee relationship between it and the petitioners
members. They further alleged that the petitioners areemployees of F. Garil Manpower
Services (F. Garil) whichthey presented a copy of its contract for manpowerservices with
F. Garil. Med-Arbiter Parungo dismissed thepetition for the lack of employer-employee
relationship.The petitioners filed the appeal to the secretary of Laborwhich ordered the
immediate conduct of a certification of election. A motion for reconsideration was filed by
therespondent but was denied. The respondent filed anothercomplaint before the CA
which reversed the decision of the Secretary. The petitioners filed a motion
forreconsideration but CA denied and hence this petition.Issue: Whether or not there is
employer-employeerelationship between the petitioners and Burlingame Co.?W/N F. Garil is
an independent contractor or a labor-onlycontractor?Held:Yes
The four fold test will show that respond
ent is theemployer of the petitioner members. The elements todetermine existence of
employment relationship: a. theselection and engagement of the employees; b. thepayment
of wages; c. the power of dismissal; and the
employers power to
control the em
ployees conduct. Themost important is the control of the employers control of the
employees conduct, not only as to the result of the
work to be done, but also as to the means and methods toaccomplish it.The contractual
stipulations between Burlington and F.
Garil shows that any personnel found to be inefficient,
troublesome, uncooperative, and not observing the rulesand regulations set forth by
Burlingame shall be reported
to F. Garil and may be replaced upon request. This
circumstance shows that Burlingame has control andsupervision over workers supplied by F.
Garil. There is alsoan implied provision on the replacement of personnelcarried upon the
request by Burlingame is the power tofire personnel. F. Garil is not an independent
contractorsince it did not carry a distinct business free from thecontrol and supervision
of Burlingame.The contractual stipulation of between Burlingame andpersonnel provided by
F. Garil on the nonexistence of employer-employee relationship has no legal effectbecause
it is contrary to law, morals, good customs, publicorder or public policy. F.Garil was engage
only in labor-only contracting and considered merely as an agent of Burlingame.Decision:
Challenged decision of CA and Resolution isreversed and set aside.The decision of
Secretary of Laboris reinstated.
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9.
Far East Agricultural Supply, Inc. and/ or Alexander Uy,
petitioners
vs. Jimmy Lebatique and the Court of AppealsFacts:Far East hired Lebatique as a truck
driver. Lebatiquecomplained or non-payment or overtime work when hewas required of
make a second delivery on Novaliches,QC. On the same day, Manuel Uy, the brother
of Alexander Uy, suspended Lebatique for illegal use of company vehicle. Though
suspended, Lebatique reportedfor work the next day but was prohibited from enteringthe
premises of the petitioner.Lebatique asked help from the DOLE Public Assistanceand
Complaints Unit concerning the nonpayment of hisovertime pay. Two days later, he
received a telegramrequiring him to go to work. When he did, Alexanderasked why he was
claiming overtime pay. Lebatiqueexplained that he never received any overtime pay sincehe
worked for the company and that Manuel fired him.After talking to Manuel, Alexander
then told Lebatiquethat he was terminated and should look for another job.The LA found
that Lebatique was illegally dismissed. Onappeal, the NLRC reversed the LA and dismissed
thecomplaint. It held that there was no dismissal sinceLebatique was merely suspended. It
also held thatLebatique was a field personel and was not entitled toovertime and service
incentive pay. Lebatique filed apetition for certiorati with the CA. The CA reversed
theNLRC decision and held that Lebatique was illegallydismissed.Issue:1.
Whether Lebatique was illegally dismissed2.
Whether Lebatique was a field personnel,not entitled to overtime pay.Decision:Petition is
Denied.The petitioners have the burden of proof to show thatLebatique was not illegally
dismissed. The latter contendthat Lebatique abandoned his job. To
constituteabandonment, (1) the absence must be without justifiablereason and (2) there
must be a clear intention, asmanifested by some overt act, to sever the employeremployee relationship. In this case, the petitioners failedto prove that Lebatique
abandoned his job. WhenAlexander told Lebatique to look for another job, thelatter was in
effect dismissed.Lebatique is not a field personel as contemplated inSec.2 of the Labor
Code. As company drivers, (1) they aredirected to deliver the goods at a specified time and
place;(2) they are not given the discretion to solicit, elect andcontact prospective clients;
and (3) Far East issued a
directive requiring the drivers to stay at the clients
premises durng truck-ban. Hence, they are under thecontrol and supervision of the
management.
PNOC-energy Development Corporation, SouthernNegros Geothermal Project,
petitioner,
vs

.
National LaborRelations Commission, et. al.Petitioner PNOC-Energy Development
Corporation is agovernmentowned and controlled corporation. Its
Southern Negros Geothermal Production Field in NegrosOriental is divided into two
phases: Palinpinon I (PAL I)and Panlinpinon II (PAL II). Due to the increase in thenumber
of activities in PAL II, PNOC hired the respondentsin the Administration and Maintenance
Section. After theexpiration of their initial employment contracts, the samewere renewed
and extended.On May 29, 1998, PNOC submitted reports to the DOLEstating that 6 of its
employees were being terminated.PNOC also furnished the respondents with notices
of termination, stating that they were being terminated dueto the substantial completion
of PAL II.The respondents filed with the NLRC a complaint forillegal dismissal against
PNOC. According to them, theyrendered continuous and satisfactory services from
thedate of their employment until they were illegallydismissed. In addition, the
respondents claimed that thedismissal was a clear case of union busting. PNOC on theother
hand argued that the respondents were contractualemployees and cannot claim that they
were illegallydismissed since their contracts have already expired dueto the completion of
the PAL II.The Labor Arbiter dismissed the complaint for lack of legal and factual basis.
The LA ruled that respondentswere not dismissed from work and the employer-employee
relationship was terminated upon theexpiration of the employment contracts. The
respondentsappealed to the NLRC which reve
rsed the LAs decision.
The NLRC ruled that the respondents were regular non-employment employees having
worked for more than oneyear. The respondents filed a Motion for Reconsiderationwhich
the NLRC denied. The PNOC field a petition forcertiorari before the CA. the CA dismissed
the petition andaffirmed the decision of the NLRC.Issue:1.
Whether the respondents were project orregular employees2.
Whether or not they were illegallydismissed.Petition is denied.On the first issue, the
respondents were considered asregular employees. Article 280 of the Labor Code
definesregular and contractual employees. To be considered as aproject employee, the
workers hired must be (1) for aspecific project of undertaking, and (2) the completion
ortermination of such project has been determined at thetime of the engagement of the
employee. In this case,PNOC failed to prove that the respondents were hired asmerely
project employees. The employment contracts
were too vague to be considered as a specific
undertaking contemplated by law. Moreover, PNOCs act
of repeatedly and continuously hiring respondents beliesthe contention that the
respondents were hired for aspecific project.The length of service is not the controlling
test of employment. To determine whether the employee washired for a specific

undertaking, it is necessary to know if the employee was hired for a specific purpose or
toperform functions vital, necessary, and indispensable tothe usual business of the
employer. However, in this case,the respondents are not considered as project
employeessince they were consistently re-hired by PNOC. With this,they are removed
from the scope of project employees.On the second issue, since the respondents
aredeemed regular employees, they are entitled to securityof tenure as provided in Article
279 of the Labor Code.PNOC bears the burden of proof to prove that therespondents
were not illegally dismissed. In this case, theyfailed to do so. There was no proof that the
projects towhich the respondents were assigned to were alreadycompleted. The PNOC only
contends that the same were
substantially completed, contrary to the notices of
termination which stated that the respondents wereterminated due to the completion of
the project.
Olongapo Maintenance Vs. Chantengco
June 21, 2007
Facts:Olongapo maintenance Services Inc. (OMSI) is engaged inthe business of providing
janitorial and maintenanceservices to various clients, one of which was Manilainternational
airport authority (MIAA). Respondents are janitors, grass cutters and degreasers who
were assignedat the airport by OMSI. On January 1999, OMSI terminatedrespondents on
the ground that latter are projectemployees. According to OMSI, their employment
beingcotermin
ous with OMSIs contract with MIAA, when saidcontract ended, the respondents tenures are over.
Respondents claim of illegal dismissal.Issue: W/N respondents are project based or
regularemployees.HELD:Respondents are regular employees. The principal test
indetermining whether an employee is a project employeeis whether:1.
He/she is
assigned to carry out a specific
project or undertaking
, the
duration andscope of which are specified at the timethe employee is engaged
in the project,
OR
2.
Where the
work
or service to beperformed
is seasonal in nature

and theemployment is for the duration of theseason.A true project employee should be
assigned to a projectwhich begins and ends at determined or determinabletimes, and be
informed thereof at the time of hiring.In the instant case, there is no proof that
respondents
engagement as project employees has beenpredetermined, as required by law. OMSI did
not provideevidence that respondents were informed that they were
to be assigned to a specific project or undertaking
at thetime they were hired.
The employment contracts for thespecific project signed by the respondents were
neverpresented.
All that OMSI submitted are the servicecontracts between OMSI and
the MIAA. Clearly, OMSIfailed to establish their case by substantial evidence.
Neither could the belated submission of respondents
application forms to the CA via a motion forreconsideration benefit OMSI, said practice
defeatsspeedy administration of justice.In termination cases, the burden of proof rests
on theemployer to show that the dismissal is for a just cause.
Thus, employers who hire project employees aremandated to state and prove the
actual basis for thelatter's dismissal.
Unfortunately for OMSI, it failed todischarge the burden.
All that we have is OMSIs self
-serving assertion that the respondents were hired asproject employees.
Tongko vs. Manufacturers LifeNovember 7, 2008
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) isa corporation engaged in life
insurance business. De Dioswas, during the period material, its President and
Chief Executive Officer. Petitioner Gregorio V. Tongko startedhis professional
relationship with Manulife on July 1, 1977by virtue of a Career Agent's Agreement
[2]
(Agreement) heexecuted with Manulife.In the Agreement, it is providedthat:It is
understood and agreed that the Agent is anindependent contractor and nothing
containedherein shall be construed or interpreted ascreating an employer-employee
relationshipbetween the Company and the Agent.x x x xa) The Agent shall canvass for
applications for LifeInsurance, Annuities, Group policies and otherproducts offered by the
Company, and collect, inexchange for provisional receipts issued by theAgent, money due
or to become due to theCompany in respect of applications or policiesobtained by or
through the Agent or frompolicyholders allotted by the Company to theAgent for
servicing, subject to subsequentconfirmation of receipt of payment by theCompany as
evidenced by an Official Receiptissued by the Company directly to thepolicyholder.x x
xEither of the parties hereto may likewiseterminate his Agreement at any time
withoutcause, by giving to the other party fifteen (15)days notice in writing. x x xIn 1983,
Tongko was named as a Unit Manager inManulife's Sales Agency Organization. In 1990, he
becamea Branch Manager. In 2001, Manulife instituted manpowerdevelopment programs in
the regional sales managementlevel. Tongko received a letter from De Dios, criticizing

the poor performance of Tongkos branch. The said

letter
also criticized Tongkos stubbornness in implementing thecompanys objective of becoming an
agent driven
company. At the end of the letter, De Dios ordered Tongkoto do the following:1.
You will hire at your expense a competentassistant who can unload you of much of
theroutine tasks which can be easily delegated. x x x x2.
Effective immediately, Kevin and the rest of theAgency Operations will deal with the
North StarBranch (NSB) in autonomous fashion. x x xI have decided to make this change
so as toreduce your span of control and allow you toconcentrate more fully on overseeing
theremaining groups under Metro North, yourCentral Unit and the rest of the Sales
Managers inMetro North. I will hold you solely responsible formeeting the objectives of
these remaining groups.When Tongko failed to comply with said directive,Manulife
exercised the termination clause in the 1977agreement. Tongko then filed a case
for illegal dismissal.Manulife argues that the company did not exercise controlo
ver Tongkos manner of doing his job. It further argues
that, even assuming arguendo that there exists anemployer-employee relationship, that
the termination of
Tongkos employment was for just cause, i.e. his
stubbornness to follow company directives.Issue: W/N Tongko, being an insurance agent
andadministrative officer, is an employee of the company.Held: Yes. When it comes to
Insurance agents, thedetermination of the existence of an employer-employeerelationship
is on a case-to-case basis. Control, one of thefour and perhaps the most important
determinant of said
relationship, does not only refer to the employers control
over the result but also the means and methods to beused in attaining it.It is usual and
expected for insurance companies topromulgate set of rules to guide commission so that
theymay not run afoul of the law and what it requires orprohibits in selling policies.
However, if the specific rulesand regulations enforced against insurance agents
ormanagers are such that
would directly affect the meansand methods by which such agents
or managers wouldachieve the objectives set by the insurance company, theyare employees
of the insurance company.In the instant case, Manulife had the power of controlover
Tongko that would make him its employee. Severalfactors contribute to this conclusion:
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1.
the Agreement dated July 1, 1977executed between Tongko and Manulifeprovided that an
agent of Manulife mustcomply with three requirements: (1)compliance with the regulations
andrequirements of the company; (2)maintenance of a level of knowledge of the company's
products that issatisfactory to the company; and (3)compliance with a quota of
newbusinesses.2.
Among the company regulations of Manulife are the different codes of conduct such as
the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial
Code of Conduct Agreement, which demonstratethe power of control exercised by
thecompany over Tongko.Thus, with the company regulations and requirementsalone, the
fact that Tongko was an employee of Manulifemay already be established. Certainly, these
requirementscontrolled the means and methods by which Tongko wasto achieve the
company's goals.More importantly, being a manager, Tongko was tasked toperform
administrative duties. In addition, Tongko wastasked to recruit certain number of agents,
in addition tohis other administrative functions. In fact, it is his alleged
failure to follow the companys principle of recruitment
that led to his termination. These lead to no otherconclusion that he was an employee of
Manulife.Manulife also argued that even if Tongko is to beconsidered as its employee, his
employment was validlyterminated due to gross and habitual neglect of duties,inefficiency,
as well as willful disobedience of the lawfulorders of Manulife. However, Manulife's
petition failed tocite a single iota of evidence to support its claims.Manulife did not even
point out which order or rule thatTongko disobeyed or a specific act that Tongko was
guiltyof or would constitute gross and habitual neglect of dutyor disobedience.Manulife
merely cited Tongko's alleged "laggardperformance," without substantiating such claim.
Whenthere is no showing of a clear, valid and legal cause forthe termination of
employment, the law considers thematter a case of illegal dismissal and the burden is
on theemployer to prove that the termination was for a valid orauthorized cause.
Thus, for not following the two (2)notice rule prior to termination, which would
have givenTongko the opportunity to defend himself, there wasillegal dismissal.
Orozco v. 5
th
division of the CA | Nachura
G.R. No. 155207, August 13, 2008 | 562 SCRA 36
FACTS

Wilhelmina Orozco was a columnist for Philippine DailyInquirer.

She started work in March 1990 to write a weekly

column entitled the Feminist Reflection in its lifestyle
section. She submitted her articles every week exceptfor a 6 month stint in New York
where she still sentseveral articles through mail. She receivedcompensation of P250 which
was raised to P 300 perarticle.

Sometime 1992, Petitioner claims that her editorLogarta told her that the PDI editor in
chief, Magsanocwanted to stop publishing her column for no reason atall. She later on
found out that it was the PDIchairperson, Apostol, who had asked to stop thepublication
but in a phone conversation with Apostol,she was told that Magsanoc informed her
(APostol)that the lifestyle section had many columnists already.

According to PDI sometime 1991, Magsanoc met withthe lifestyle section editor to discuss
how to improve
section and in their judgement, Orozcos column failed
to improve and continued to be superficially and poorlywritten,and failed to meet the high
standards of thepaper. Hence they decided to terminate her column.

Labor Arbiter and NLRC ruled in favor of Orozco, CAruled otherwise.

ISSUES and ARGUMENTS
W/N Orozco was an employee of PDI .
W/N Orozco was illegally dismissed.
Petitioner:
She was an employee since PDI controls thecontents of her column, has to observe
deadlines and spaceconstraint.No, she was not an employee of PDI.
No, she was not illegally dismissed.

Petitioner believes that respondents acts are meant to

control how she executes her work. The SC does notagree. A careful examination reveals
that the factorsenumerated by the petitioner are inherent conditionsin running a
newspaper. In other words, the so-calledcontrol as to time, space, and discipline are
dictated bythe very nature of the newspaper business itself.

the employment status of a person is defined andprescribed by law and not by what the
parties say itshould be.

This Court has constantly adhered to the four

-fold
test to determine whether there exists an employer
-employee relationship between parties. The fourelements of an employment relationship
are: (a) theselection and engagement of the employee; (b) thepayment of wages; (c) the
power of dismissal; and (d)
the employers power to control the employees
conduct.
Petitioner has miscons
trued the control test, as did
the Labor Arbiter and the NLRC.
Not all rules imposed by the hiring party on the hiredparty indicate that the latter is
an employee of theformer. Rules which serve as general guidelines towards the
achievement of the mutually desired resultare not indicative of the power of control.
The newspapers power to approve or reject
publication of any specific article a columnist writes forher column cannot be the control
contemplated in the control test, as it is but logical
that one whocommissions another to do a piece of work should havethe right to accept or
reject the product. A regularreporter is different. A regular reporter is not
asindependent in doing his or her work for thenewspaper.
Where a person who works for another performs his job more or less at his own pleasure,
in the manner hesees fit, not subject to definite hours or conditions of work, and is
compensated according to the result of hisefforts and not the amount thereof, no
employer-employee relationship exists.
Aside from the control test, this Court has also used theeconomic reality test. The
economic realities prevailingwithin the activity or between the parties areexamined, taking
into consideration the totality of circumstances surrounding the true nature of
therelationship between the parties. This is especiallyappropriate when, as in this case,
there is no writtenagreement or contract on which to base therelationship. In our
jurisdiction, the benchmark of economic reality in analyzing possible
employmentrelationships for purposes of applying the Labor Codeought to be the economic
dependence of the worker

on his employer. Orozcos main occupation is not as acolumnist for respondent but as
a womens rights
advocate working in various wom
ens organizations.
Likewise, she herself admits that she also contributesarticles to other publications. Thus,
it cannot be saidthat petitioner was dependent on respondent PDI for
her continued employment in respondents line of
business.
The inevitable conclusion is that petitioner was not
respondent PDIs employee but an independent
contractor, engaged to do independent work.
Bisig Manggagawa sa Tryco v. NLRC | Nachura
G.R. No.151309, October 15, 2008 |569 SCRA 122
Facts
Tryco Pharma Corporation (Tryco) is a manufacturer of veterinary medicines and its
principal office is located in Caloocan City. Petitioners Joselito Lario, Vivencio Barte,
Saturnino Egera and Simplicio Aya-ay are its regular employees, occupying the positions of
helper, shipment helper and factory workers, respectively, assigned to the Production
Department. They are members of Bisig Manggagawa sa Tryco (BMT), the exclusive
bargaining representative of the rank-and-file employees.
Tryco and petitioners signed separate Memoranda of Agreement providing for a
compressed workweek schedule. This MOA was in pursuant of the DOLE Department
Order No. 21, Series of 1990, Guidelines on the Implementation of Compressed workweek.
In the MOA, 8 am to 6:12 pm from Mondays to Fridays, shall be considered as the regular
working hours, andno overtime pay shall be due and payable to the employee for work
rendered during those hours. Should an employee be permitted to or required to work
beyond 6:12 pm, such employee will be entitled to overtime pay.
In Jan 1997, BMT and Tryco negotiated for the renewal of the CBA but failed to arrive at
a new agreement. Sometime March 1997 Tryco received a letter from the Bureau of
Animal Industry of the Dep. Of Agriculture reminding it that its production should be
conducted in San Rafael, Bulacan and not in Caloocan City. Accordingly, Tryco issued a
Memorandum directing petitioners to report to the companys plant site in Bulacan. The
petitioners refused to obey. BMT claims that this isunfair labor practice.
August that same year, the petitioners filed separate complaints for illegal dismissal,
underpayment of wages, non-payment of overtime pay and service incentive leave and
refusal to bargain against Tryco and its President. In Trycos defense, the averred that
the petitioners were not dismissed but they refused to comply with the managements
directive for them to report to the companys plant in Bulacan. They also said that
evenlong before the start of the negotiations, the company had already been planning to
decongest the Caloocan office to comply with the government policy to shift the
concentration of manufacturing activities from the metropolis to the countryside. The

decision to transfer the companys production activities to San Rafael, Bulacan was
precipitated by the letter-reminder of the Bureau of Animal Industry.
ISSUES and ARGUMENTS
W/N the petitioners were constructively dismissed.
HELD
Trycos decision to transfer its production activities to
San Rafael, Bulacan, regardless of whether it was madepursuant to the letter of the
Bureau of Animal Industry,was within the scope of its inherent right to control andmanage
its enterprise effectively. While the law issolicitous of the welfare of employees, it must
alsoprotect the right of an employer to exercise what areclearly management
prerogatives. The free will of management to conduct its own business affairs to achieve
its purpose cannot be denied. This prerogative extends to the managements right to
regulate, according to its own discretion and judgment, all aspects of employment,
including the freedom to transfer and reassign employees according to the
requirements of its business. Managements prerogative of transferring and reassigning
employees from one area of operation to another in order to meet the requirements of the
business is, therefore, generally not constitutive of constructive dismissal. Thus, the
consequent transfer of Trycos personnel, assigned to the Production Department was well
within the scope of its management prerogative. When the transfer is not unreasonable, or
inconvenient, or prejudicial to the employee, and it does not involve a demotion in rank or
diminution of salaries, benefits, and other privileges, the employee may not complain that
it amounts to a constructive dismissal. However, the employer has the burden of proving
that the transfer of an employee is for valid and legitimate grounds. The employer must
show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee;
nor does it involve a demotion in rank or a diminution of his salaries, privileges and other
benefits.
Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or
diminution of salaries, benefits and other privileges of the petitioners. Petitioners,
therefore, anchor their objection solely on the ground that it would cause them great
inconvenience since they are all residents of Metro Manila and they would incur
additional expenses to travel daily from Manila to Bulacan. The Court has previously
declared that mere incidental inconvenience is not sufficient to warrant a claim
of constructive dismissal. Objection to a transfer that is grounded solely upon the
personal inconvenience or hardship that will be caused to the employee by reason of the
transfer is not a valid reason to disobey an order of transfer.
Unfair labor practice refers to acts that violate the
workers right to organize. Without that element, the
acts, no matter how unfair, are not unfair labor practices. There was no showing or any
indication that the transfer orders were motivated by an intention to

interfere with the petitioners right to organize.

Equipment Technical Services vs. CA
Facts: Petitioner Equipment Technical Services (ETS) is engaged in the business of
subcontracting plumbing works, one of its clients is Uniwide Sales, Inc. (Uniwide).
Petitioner Joseph Dequito was the manager of ETS although CA referred to him as
ETS President. On different occasions ETS hired the services of the private respondents
as pipe filters, plumbers or threaders. When ETS experienced financial difficulties with
Uniwide and failed to pay for the plumbing work and they were only able to pay 13Th month
pay equivalent to 2 weeks salary. Respondents (Albino et. Al) unhappy with the said pay
filed a case before the NLRC. Another 2 cases was filed for illegal dismissal and payment
of money claims were ETS refused to hire them for another project and the cases were
consolidated before the labor arbiter. Labor Arbiter Cuyuca issued a decision that
respondents were ETS regular and not project employees and ETS was adjudged liable for
illegal dismissal and directed to pay respondent their money claims
plus 10% total award for attorneys
fees.ETS appeal and NLRC rendered a resolution reversing labor arbiters decision about
respondents status of employments and upheld the validity of the monetary award which
included backwages.ETS elevated the case to CA via petition for certiorari with the
contention that NLRC committed grave abuse of discretion in affirming monetary reward
in favor of respondents despite on its findings that there was no illegal dismissal. CA
rendered judgment that NLRC resolutions are annulled and set aside and ordering ETS to
pay respondents holiday pay and service incentive leave pay for the year of 1998 and the
balance on their 13th month pay for the year of 1999. The case was remanded to Labor
Arbiter for the computation. Respondents filed a
MR for the CAs decision.
Issue: W/N respondents are project employees?
Held: No. Service of project employees is coterminus(linked that both expire at the
same time) with the project and they may be terminated upon the end or completion of
that project or project phase for which they were hired. Regular employees enjoy security
of tenure and entitled to hold on to their work or position until their services are
terminated by any of the modes recognized under the labor code. The principal test for
determined whether an employee is
a project employee
assigned to carry out a specific
project or undertaking while a regular employee
defined in Art 280 of the Labor Code.CA find that not a single contract of employment
fixing the terms of employment or duration of Uniwide project, or any other project
submitted by ETS to the Labor Arbiter which contrary to its allegations that the
respondents were merely contractual employees. Records of payroll and other documents
such as contracts by ETS showing that respondent were hired for specific projects was
not submitted. Also if respondents were project employees, are port of termination of
employment must be submitted by ETS. ETS has failed to support their claim that

respondent are project employees. Respondent were initially hired as project employees
but their repeated rehiring to perform necessary tasks to the usual trade or business of
ETS changed their legal situation to regular employees. Security of tenure covers both
regular and project employees. The termination must be lawful cause and must be done in a
way which affords them proper notice and hearing. The burden of proving that an
employee had been dismissed for a lawful cause under the Labor Codelies with the
employer. Decision: Reinstating decision of Labor Arbiter Cuyuca is Affirmed with
modification that petitioners are joint and severally ordered to reinstate private
respondents with backwages.