LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

CASE NO.1
LVN PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild (FFW) & COURT
OFINDUSTRIALRELATIONS ; SAMPAGUITA PICTURES, INC. vs. PHILIPPINE
MUSICIANS Guild (FFW) & COURT OFINDUSTRIALRELATIONS
FACTS:
Respondent Philippine Musicians Guild (FFW) is a duly registered legitimate labor organization. LVN
Pictures, Inc., Sampaguita Pictures, Inc., and PremiereProductions, Inc. are corporations, duly
organized under the Philippine laws,engaged in the making of motion pictures and in the processing
and distributionthereof. Petitioner companies employ musicians for the purpose of making
musicrecordings for title music, background music, musical numbers, finale music andother incidental
music, without which a motion picture is incomplete. Ninety-five(95%) percent of all the musicians
playing for the musical recordings of saidcompanies are members of the Guild. The Guild has no
knowledge of the existence of any other legitimate labororganization representing musicians in said
companies. Premised upon theseallegations, the Guild prayed that it be certified as the sole and
exclusive bargainingagency for all musicians working in the aforementioned companies. In
theirrespective answers, the latter denied that they have any musicians as employees,and alleged
that the musical numbers in the filing of the companies are furnishedby independent contractors. The
lower court sustained the Guilds theory. Areconsideration of the order complained of having been
denied by the Court enbanc,LVN Pictures, inc., and Sampaguita Pictures, Inc., filed these petitions
forreview for certiorari.
ISSUE: Whether the musicians in question(Guild members) are employees of thepetitioner film
companies.
RULING:
YES The Court agreed with the lower courts decision, to wit:
Lower court resorted to apply R.A. 875 and US Laws and jurisprudence from whichsaid Act was
patterned after. (Since statutes are to be construed in the light of purposes achieved and the evils
sought to be remedied). It ruled that the work of the musical director and musicians is a functional and
integral part of the enterpriseperformed at the same studio substantially under the direction and
control of thecompany.
In other words, to determine whether a person who performs work for another isthe latter's employee
or an independent contractor, the National Labor Relations relies on 'the right to control' test . Under
this test an employer-employee relationship exist where the person for whom the services are
performed reservesthe right to control not only the end to be achieved, but also the manner and
means to be used in reaching the end. (Alabama Highway Express Co. vs Local)
Notwithstanding that the employees are called independent contractors', the Board will hold them to
be employees under the Act where the extent of the employer'scontrol over them indicates that the
relationship is in reality one of employment.(John Hancock Insurance Co., 2375-D, 1940, Teller,
Labor Dispute CollectiveBargaining, Vol.).

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

The right of control of the film company over the musicians is shown (1) by callingthe musicians
through 'call slips' in 'the name of the company; (2) by arrangingschedules in its studio for recording
sessions; (3) by furnishing transportation andmeals to musicians; and(4) by supervising and directing
in detail, through themotion picture director, the performance of the musicians before the camera,
inorder to suit the music they are playing to the picture which is being flashed on thescreen. The
musical directors have no such control over the musicians involved in thepresent case. Said musical
directors control neither the music to be played, nor themusicians playing it. The Premier Production
did not appeal the decision of theCourt en banc (thats why its not one of the petitioners in the case)
film companiessummon the musicians to work, through the musical directors. The film
companies,through the musical directors, fix the date, the time and the place of work. The
filmcompanies, not the musical directors, provide the transportation to and from thestudio. The film
companies furnish meal at dinner time. It is well settled that "anemployer-employee relationship exists
. . .where the person for whom the services are performed reserves a right to control not only the end
to be achieved but alsothe means to be used in reaching such end . . . ."
The decisive nature of said control over the "means to be used", is illustrated in thecase of Gilchrist
Timber Co., et al., in which, by reason of said control, the employer-employee relationship was held
to exist between the management and the workers,notwithstanding the intervention of an alleged
independent contractor, who had,and exercise, the power to hire and fire said workers. The
aforementioned control over the means to be used" in reading the desired endis possessed and
exercised by the film companies over the musicians in the cases before us.
CASE No. 2
Dy Keh Beng vs International Labor and Marine Union of the Philippines, Et Al.
No. L-32245 May 25, 1979
FACTS:
A charge of unfair labor practice was filed against Petitioner, proprietor of a basket factory for
discriminatory acts in dismissing Carlos Solano and Ricardo Tudla for their union activities. After
Preliminary investigation, a case was filed in the Court of industrial relations(CIR). Petitioner contends
that he did not know Solano and that Tudla was not an employee because the latter came only when
there was work for which he did on pakiaw basis, each piece of work being done under a separate
contract.
The CIR found that there existed an employer-employee relationship.
Petitioner claims that the private respondents did not meet the control test in relation to the defeinition
of an employer/employee because there was no evidence to show that petitioner had the right to
direct the manner and method of respondents work.
ISSUE: Whether there was an employer-employee relationship between petitioner and private
respondents.
RULING:
Yes there was an employer-employee relationship between petitioners and private respondents. It
should be borne in mind that the control test calls merely for the exercise of the right to control the
manner of doing this work, not the actual exercise of the right. Considering the finding that Dy is
engaged in the manufacture of baskets, it is natural to expect that those working under Dy would

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

have to observe, among others, Dys requirements of size and quality of the basket. Some control
would necessarily be exercised by Dy as the making of the Kaing would be subject to Dys
specifications.Parenthetically, since the work on the baskets is done at Dys establishments, it can be
inferred that the proprietor Dy could easily exercise control on the men he employed.
As to the contention that Solano was not an employee because he worked on piece basis, The Court
agrees with the Hearing Examiner that: circumstances must be construed to determine indeed if
payment by the piece is just a method of compensation and does not define the essence of the
relation.
Justice Perfecto in a SC decision opined that judicial notice of the fact that the so-called pakyaw
system mentioned in this case as generally practiced in our country, is, in fact, a labor contract
between employers and employees, between capitalists and laborers. Thus, petiiton is denied.
CASE NO. 3
Corporal Sr. vs NLRC
GR NO 129315 October 2, 2000
FACTS:
The 5 male petitioners worked as barbers while the 2 female petitioners worked as manicurists in the
New Look Barber Shop located in Quiapo. The shop is owned by private respondent, Lao Enteng Co.
Petitioners claim that at the beginning of their employment with the barber shop, it was just a single
proprietorship. But in January 1982, Vicente Lao organized a corporation registered with SEC. All the
equipments, assets and properties of the shop was transferred to the corporation. They continued
working in the said company until April 15,1995 when respondent Trinidad Ong, President of the
corporation, informed them that their services were no longer needed because the building where the
shop was located was already sold.
Petitioners then filed with NLRC, a complaint for illegal dismissal, illegal deduction, separation pay,
non-payment of 13th month pay and slaay differentials.
Private respondents claimed that the petitioners were joint venture partners and were receiving 50%
commission of the amount charged to customers. Thus, there was no employer-employee
relationship between them and petiitoners. And that assuming arguendo that there was such
relationship, petitioners are not entitled to separation pay because the cessation of operations was
due to serious business losses.
ISSUE: Was there an employer-employee relationship between the petitioners and private
respondent corporation?
RULING: Yes, there was an employer-employee relationship between petitioners and private
respondent.
The following must be present for an E-E relationship to exist:
a. the selection and engagement of the workers
b. power of dismissal

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

c. payment of wages by whatever means

d. power to control the workers conduct, with the latter assuming primacy in the overall
consideration.
Records show that VIcente Lao engaged the services of the petitioners to work as barbers and
manicurists in the New Look Barber Shop, which was then a single proprietorship. When the
respondent company took over, it continued the business and retained the services of all the
petitioners. Thus, the first 3 elements are present.
With respect to the 4th, the power to control refers to the existence of the power and not necessarily
the actual exercise thereof, nor is it eseential for the employer to actually supervise the performance
of duties of the employee. It is enough that employer has the right to wield that power.
The ff facts reveal that respondent company wielded control over the work performance of the
petitioners:
a. they worked in the shop owned and operated by respondents
b. they were required to report daily and observe definite number of hours of work
c. they were not free to accept other employment elsehwere but devoted their full time working
with the shop for 15 years
d. that petitioner Nas was tasked to watch over the other petitioners in their daily task.
Clearly, respondent was clothed with the power to dismiss any or all of them for just and valid cause.
They were unarguably performing work necessary and desirable in the business of respondent
company.
Thus, being employees of respondent company, the petitioners are entitled to the benefits provided
under the Labor Code.
CASE NO. 4
Alejandro Maraguinot, Jr. vs NLRC 2nd Division
GR NO 120969 January 22, 1998
FACTS:
Petitioner maintains that he was employed by respondents as part of the filming crew. He was
laterpromoted as an electrician. Petitioners tasks contained of loading movie equipment in the
shoothing area.Petitioners sought the assistance of their supervisor, Cesario, to facilitate their request
that respondents adjusttheir salary in accordance with the minimum wage law. Mrs. Cesario informed
petitioners that del Rosario wouldagree to increase their salary only if they signed a blank
employment contract.
As petitioner refused to sign,respondents forced Enero (the other petitioner who worked as a crew
member) to go on leave. However, when he reported to work, respondent refused to take him back.
Maraguinot was dropped from the company payroll butwhen he returned, he was again asked to sign
a blank employment contract, and when he still refused,respondents terminated his services.
Petitioners thus sued for illegal dismissal.Private respondents assert that they contract persons called
producers to produce or make movies forprivate respondents and contend that petitioners are project
employees of the associate producers, who act asindependent contractors. Thus, there is no ER-EE
relationship. However, petitioners cited that their performance of activities is necessary in the usual
trade or business of respondents and their work in continuous.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

ISSUE: Was there an Employer-employee relationship?

RULING:
With regards to VIVAs contention that it does not make movies but merely distributes motion
pictures,there is no sufficient proof to prove this contention.In respect to respondents allegation that
petitioners are project employees, it is a settled rule that thecontracting out of labor is allowed only in
case of job contracting. However, assuming that the associate producersare job contactors, they
must then be engaged in the business of making motion pictures. Associate producersmust have
tools necessary to make motion pictures. However, the associate producers in this case have none of
these. The movie-making equipment are supplied to the producers and owned by VIVA. Thus, it is
clear that the associate producer merely leases the equipment from VIVA.In addition, the associate
producers of VIVA cannot be considered labor-only contractors as they did notsupply, recruit nor hire
the workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew members. Thus,
the relationship between VIVA and its producers or associate producers seems to be that of agency.
With regards to the issue of illegal dismissal, petitioners assert that they were regular employees who
wereillegally dismissed. Petitioners in this case had already attained the status of regular employees
in view of VIVAsconduct. Thus, petitioners are entitled to back wages.A project employee or a
member of a work pool may acquire the status of a regular employee when: a.there is a continuous
rehiring of project employees even after a cessation of projectb.the tasks performed by the alleged
project employee are vital and necessary to the business of employer The tasks of petitioners in
loading movie equipment and returning it to VIVAs warehouse and fixing thelighting system were
vital, necessary and indispensable to the usual business or trade of the employer.

CASE NO. 5
WPP MARKETING COMMUNICATIONS, INC. v. GALERA
G.R. No. 169207; March 25, 2010
Carpio, Acting C.J.
FACTS: The case is a consolidation of cases springing from petitioner's WPP Marketing
Communications alleged termination of private respondent Jocelyn Galera. Galera is an American
citizen who was recruited from the United States of America by private respondent John Steedman,
chairman of petitioner company, to work in the Philippines.
Employment of Galera with petitioner WPP became effective on September 1, 1999 solely on the
instruction of the CEO and upon signing of the contract, without any further action from the Board of
Directors of private respondent WPP.
Four months had passed when private respondent WPP filed before the Bureau of Immigration an
application for Galera to receive a working visa, wherein she was designated as Vice President of
WPP.
Galera alleged that she was constrained to sign the application in order that she could remain in the
Philippines and retain her employment.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

On December 14, 2000, Galera alleged she was verbally notified by Steedman that her services had
been terminated from private respondent WPP. A termination letter followed the next day. Thus, a
complaint for illegal dismissal was filed against WPP.
The Labor Arbiter Edgardo Madriaga held that petitioner was liable for illegal dismissal and damages.
The Arbiter stated that Galera was not only illegally dismissed but was also not accorded due
process. The NLRC reversed the LA decision.
On appeal, the CA sided with Galera and reversed the NLRC decision. Hence, the petition.
ISSUES:
1. Whether or not Galera is an employee of WPP.
2. Whether or not Galera was illegally dismissed.
2. Whether or not unpaid wages should be made to Galera.
RULING: Court partially grants WPP's petition to not pay Galera backwages.
HELD:
1. On the first issue, the Court ruled in the AFFIRMATIVE. Applying the four-fold test, the Court ruled
that Galera is an employee not a corporate officer because Sections 1 and 4 of the employment
contract mandate where and how often she is to perform her work; sections 3, 5, 6 and 7 show that
wages she receives are completely controlled by x x x WPP; and sections 10 and 11 clearly state that
she is subject to the regular disciplinary procedures of x x x WPP.
Another indicator that she was a regular employee and not a corporate officer is Section 14 of the
contract, which clearly states that she is a permanent employee not a Vice-President or a member of
the Board of Directors.
2. As to the second issue, the Court ruled in the affirmative: Galera was ILLEGALLY DISMISSED.
WPPs dismissal of Galera lacked both substantive and procedural due process.
WPP failed to prove any just or authorized cause for Galeras dismissal. Steedman's letter to Galera
reads: I believe your priorities are mismanaged. The recent situation where you felt an internal
strategy meeting was more important than a new business pitch is a good example. You failed to lead
and advise on the two new business pitches. The quality output is still not to an acceptable standard,
which was also part of my directive that you needed to focus on back in July.
The law requires that the employer must furnish the worker sought to be dismissed with two written
notices before termination of employment can be legally effected: (1) notice which apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent
notice which informs the employee of the employers decision to dismiss him. Failure to comply with
the requirements taints the dismissal with illegality. WPPs acts clearly show that Galeras dismissal
did not comply with the two-notice rule.
3. As to the third issue, the Court ruled in the NEGATIVE. Galera is not entitled to backwages
because she is an alien. Galera worked in the Philippines without a proper work permit but now wants
to claim employees benefits under Philippine labor laws.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

Employment of Galera with petitioner WPP became effective on September 1, 1999 solely on the
instruction of the CEO and upon signing of the contract, without any further action from the Board of
Directors of private respondent WPP.
Four months had passed when private respondent WPP filed before the Bureau of Immigration an
application for Galera to receive a working visa, wherein she was designated as Vice President of
WPP.
The law and the rules are consistent in stating that the employment permit must be acquired prior to
employment. The Labor Code states: "Any alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who desires to engage an alien for employment in
the Philippines shall obtain an employment permit from the Department of Labor."
Galera cannot come to this Court with unclean hands. To grant Galera's prayer is to sanction the
violation of the Philippine labor laws requiring aliens to secure work permits before their employment.

CASE NO.6
PHILIPPINE BANK OF COMMUNICATIONS v. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. L-66598; December 19, 1986
Feliciano, J.
FACTS: Petitioner Philippine Bank of Communications (PBCom) and Corporate Executive Search
Inc. (CESI) entered into a letter agreement wherein CESI will provide Temporary Services to
petitioner. Attached to the letter was a list of messengers, assigned to work with the petitioner,
including private respondent Ricardo Orpiada. Orpiada rendered services within the premises of the
bank June 25, 1975. On October 1976, petitioner PBCom requested CESI to withdraw Orpiadas
assignment because Orpiadas services were no longer needed. Thus, Orpiada filed a complaint
against petitioner for illegal dismissal and failure to pay 13th-month pay.
Labor Arbiter Teodorico Dogelio ruled in favor of Orpiada and asked PBCom to reinstate him. Such
finding was also made by respondent National Labor Relations Commission on appeal by PBCom.
Hence, the petition.
ISSUE:
Whether or not CESI is a mere labor-only contractor, making petitioner PBCom the employer of
Orpiada.
RULING: Supreme Court denied the petition of PBCom and found that it is the employer of Orpiada.
HELD:
The Court ruled in the AFFIRMATIVE. CESI is a mere labor-only contractor. Hence, PBCom is the
direct employer of Orpiada because CESI is a mere intermediary of PBCom in the hiring process of
Orpiada as messenger.
Job contracting v Labor-only contracting: CESI is a labor-only contractor which is prohibited
by law

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

PBCom and CESI argued that CESI is not properly regarded as a "labor-only" contractor upon the
ground that CESI is possessed of substantial capital or investment in the form of office equipment,
tools and trained service personnel. We are unable to agree with the bank and CESI on this score.
In the present case, the letter-undertaking between PBCom and CESI was to provide the bank with a
certain number of persons able to carry out the work of messengers. Such undertaking of CESI was
complied with when the requisite number of persons were assigned or seconded to the petitioner
bank.
Both PBCom and CESI argued that there is, of course, nothing illegal about hiring persons to carry
out a specific project or undertaking the completion or termination of which [was] determined at the
time of the engagement of [the] employee, or where the work or service to be performed is seasonal
in nature and the employment is for the duration of the season.
Under the Labor Code, any employee who has rendered at least one year of service, whether such
service is continuous or not, shall be considered a regular employee (Article 281, Second paragraph).
Assuming, therefore, that Orpiada could properly be regarded as a casual (as distinguished from a
regular) employee of the bank, he became entitled to be regarded as a regular employee of the
bank as soon as he had completed one year of service to the bank.
We hold that CESI was engaged in "labor-only" or attracting vis-a-vis the petitioner and in respect to
Ricardo Orpiada, and that consequently, the petitioner bank is liable to Orpiada as if Orpiada had
been directly, employed not only by CESI but also by the bank. It may well be that the bank may in
turn proceed against CESI to obtain reimbursement of, or some contribution to, the amounts which
the bank will have to pay to Orpiada; but this it is not necessary to determine here.
Succinctly put, CESI is not a parcel delivery company as its name indicates. It is a recruitment and
placement corporation placing bodies, as it were, in different client companies for longer or shorter
periods of time. The Court ruled that CESI is a labor-only contractor and as such, PBCom is, by law,
the employer of Orpiada as provided for in Art. 106 of the Labor Code.

CASE NO. 7
NERI and CABELIN v. NATIONAL LABOR RELATIONS COMMISSION
G.R. Nos. 97008-09; July 23, 1993
Bellosillo, J.
FACTS: Petitioners Virginia Neri and Jose Cabelin instituted complaints against private respondents
Far East Bank & Trust Company (FEBTC) and Building Care Corp. (BCC). This is to compel FEBTC
to accept them as regular employees and for it to pay the differential between the wages being paid
them by BCC and those received by the banks employees with similar length of service.
Petitioners contended that BCC in engaged in labor-only contracting because it failed to adduce
evidence purporting to show that it invested in the form of tools, equipment, machineries, work
premises and other materials which are necessary in theconduct of its business. Moreover,
petitioners argue that they perform duties which are directly related to the principal business or
operation of FEBTC.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

The Labor Arbiter dismissed the case for lack of merit, as it was shown that BCC was the employer of
petitioners. BCC has sufficient capital to pass as an independent contractor. The same findings was
arrived at by respondent National Labor Relations Commission. Hence, the petition.
ISSUE: Whether or not BCC is engaged in a labor-only contracting in employing Neri and Cabelin.
RULING: Supreme Court dismissed the petition of Neri and Cabelin, and found that BCC is their
employer; not the bank.
HELD:
The Supreme Court ruled in the NEGATIVE. BCC is an independent contractor; not a labor-only
contractor.
Preliminarily, the Court said held that there is "labor-only" contracting where: (a) the person supplying
workers to an employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others; and, (b) the workers recruited and placed by
such person are performing activities which are directly related to the principal business of the
employer.
BCC cannot be considered a "labor-only" contractor because it has substantial capital. While there
may be no evidence that it has investment in the form of tools, equipment, machineries, work
premises, among others, it is enough that it has substantial capital. The law does not require both
substantial capital and investment in the form of tools, equipment, machineries, etc. This is clear from
the use of the conjunction "or". If the intention was to require the contractor to prove that he has
both capital and the requisite investment, then the conjunction "and" should have been used. But,
having established that it has substantial capital, it was no longer necessary for BCC to further
adduce evidence to prove that it does not fall within the purview of "labor-only" contracting. There is
even no need for it to refute petitioners' contention that the activities they perform are directly related
to the principal business of respondent bank.
Secondarily, under the "right of control" test they must still be considered employees of BCC. A
cursory reading of the job description of Neri shows that what was sought to be controlled by FEBTC
was actually the end-result of the task, e.g., that the daily incoming and outgoing telegraphic transfer
of funds received and relayed by her, respectively, tallies with that of the register. The guidelines
were laid down merely to ensure that the desired end-result was achieved. It did not, however, tell
Neri how the radio/telex machine should be operated.
Petitioners do not deny that they were selected and hired by BCC before being assigned to work in
the Cagayan de Oro Branch of FFBTC. BCC likewise acknowledges that petitioners are its
employees. The record is replete with evidence disclosing that BCC maintained supervision and
control over petitioners through its Housekeeping and Special Services Division: petitioners
reported for work wearing the prescribed uniform of BCC; leaves of absence were filed
directly with BCC; and, salaries were drawn only from BCC.
Neri even secured a certification from BCC that she was employed by the latter. Meanwhile,
Cabelin filed a complaint for underpayment of wages, non-integration of salary adjustments as well
as for illegal deduction against BCC alone.
Also, BCC alone had the power to reassign petitioners. Their deployment to FEBTC was not subject
to the bank's acceptance. BCC was to be paid in lump sum unlike in the PBCom case where the

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

contractor CESI was to be paid at a daily rate on a per person basis. Lastly, Neri and Cabelin were to
perform specific special services. Petitioners cannot be held to be employees of FEBTC as BCC
"carries an independent business" and undertaken the performance of its contract with
various clients according to its "own manner and method, free from the control and supervision"
of its principals in all matters "except as to the results thereof."
Contrast PBCom case and Neri case
In PBCom case, CESI was a "labor-only" contractor because upholding the contract between the
contractor and the bank would in effect permit employers to avoid the necessity of hiring regular or
permanent employees and would enable them to keep their employees indefinitely on a temporary or
casual basis, thus denying them security of tenure in their jobs. This of course violates the Labor
Code. In the Neri case, BCC has not committed any violation.
In PBCom case, it is for illegal dismissal; the Neri case, on the other hand, is for conversion of
employment status so that petitioners can receive the same salary being given to regular employees
of FEBTC. But, as herein determined, petitioners are not regular employees of FEBTC but of BCC.

CASE NO. 8
PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY v. NATIONAL LABOR RELATIONS
COMMISSION
G.R. No. 118978; May 23, 1997
Regalado, J.
FACTS: Petitioner Philippine Telegraph & Telephone Co. (PT&T) initially hired Grace de Guzman
specifically as Supernumerary Project Worker, for a fixed period from November 21, 1990 until April
20, 1991 as reliever. She was again invited for employment as replacement from June 10, 1991 to
July 1, 1991 and July 19, 1991 to August 8, 1991.
On September 2, 1991, de Guzman was again asked to join PT&T as a probationary employee where
probationary period will cover 150 days. She indicated in the portion of the job application form under
civil status that she was single although she had contracted marriage a few months earlier. When
petitioner learned later about the marriage, its branch supervisor, Delia Oficial, sent de Guzman a
memorandum requiring her to explain the discrepancy. Included in the memorandum, was a
reminder about the companys policy of not accepting married women for employment. She was
dismissed from the company on January 29, 1992.
Labor Arbiter handed down decision on November 23, 1993 declaring that petitioner illegally
dismissed De Guzman, who had already gained the status of a regular employee. Respondent
National Labor Relations Commission (NLRC) upheld such ruling but provided a three-month
suspension against de Guzman for dishonesty which it did not condone. Hence, the petition.
ISSUE: Whether the alleged concealment of civil status can be grounds to terminate the services of
an employee.
RULING: Supreme Court dismissed the petition of PT&T, but upheld the three-month suspension
against de Guzman

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

HELD:
Article 136 (now Art. 134) of the Labor Code, one of the protective laws for women, explicitly prohibits
discrimination merely by reason of marriage of a female employee. It is recognized that company is
free to regulate manpower and employment from hiring to firing, according to their discretion and best
business judgment, except in those cases of unlawful discrimination or those provided by law.
PT&Ts policy of not accepting or disqualifying from work any woman worker who contracts marriage
is afoul of the right against discrimination provided to all women workers by our labor laws and by our
Constitution. The record discloses clearly that de Guzmans ties with PT&T were dissolved principally
because of the companys policy that married women are not qualified for employment in the
company, and not merely because of her supposed acts of dishonesty.
The government abhors any stipulation or policy in the nature adopted by PT&T. The Labor Code
provides that it is unlawful for a woman to not get married, or to stipulate expressly or tacitly that
upon getting married, a woman employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of
marriage.
The policy of PT&T is in derogation of the provisions stated in Art.134 of the Labor Code on the right
of a woman to be free from any kind of stipulation against marriage in connection with her
employment and it likewise is contrary to good morals and public policy, depriving a woman of her
freedom to choose her status, a privilege that is inherent in an individual as an intangible and
inalienable right. Such policy must be prohibited in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land not only for order but also imperatively
required.
Verily, private respondents act of concealing the true nature of her status from PT&T could not be
properly characterized as willful or in bad faith as she was moved to act the way she did mainly
because she wanted to retain a permanent job in a stable company. In other words, she was
practically forced by that very same illegal company policy into misrepresenting her civil status for
fear of being disqualified from work.
CASE NO. 9
APEX MINING COMPANY, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents.
G.R. No. 94951 April 22, 1991
FACTS:
Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May
18, 1973 to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In
the beginning, she was paid on a piece rate basis. However, on January 17, 1982, she was paid on a
monthly basis at P250.00 a month which was ultimately increased to P575.00 a month.
On December 18, 1987, while she was attending to her assigned task and she was hanging her
laundry, she accidentally slipped and hit her back on a stone. She reported the accident to her
immediate supervisor Mila de la Rosa and to the personnel officer, Florendo D. Asirit. As a result of
the accident she was not able to continue with her work. She was permitted to go on leave for

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

medication. De la Rosa offered her the amount of P 2,000.00 which was eventually increased to
P5,000.00 to persuade her to quit her job, but she refused the offer and preferred to return to work.
Petitioner did not allow her to return to work and dismissed her on February 4, 1988.
On March 11, 1988, private respondent filed a request for assistance with the Department of Labor
and Employment. After the parties submitted their position papers as required by the labor arbiter
assigned to the case on August 24, 1988 the latter rendered a decision, ordering the respondent,
Apex Mining Company, Inc., to pay the complainant a total amount of P55,161.42.
Not satisfied therewith, petitioner appealed to NLRC. NLRC dismissed the appeal for lack of merit
and affirmed the appealed decision. A subsequent motion for reconsideration was likewise denied.
Hence, the herein petition for review by certiorari, with the main thrust that private respondent should
be treated as a mere househelper or domestic servant and not as a regular employee of petitioner.
ISSUE:
Whether or not the househelper in the staff houses of an industrial company a domestic helper or a
regular employee of the said firm.
HELD:
The petition is devoid of merit.
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or
"domestic servant" are defined as follows:
The term "househelper" as used herein is synonymous to the term "domestic servant" and
shall refer to any person, whether male or female, who renders services in and about the
employer's home and which services are usually necessary or desirable for the maintenance
and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the
employer's family.
The foregoing definition covers family drivers, domestic servants, laundry women, yayas, gardeners,
houseboys and other similar househelps. Hence, the definition cannot be interpreted to include
househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the
needs of the company's guest and other persons availing of said facilities.
The criteria is the personal comfort and enjoyment of the family of the employer in the home of said
employer. While it may be true that the nature of the work of a househelper, domestic servant or
laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually serving the family while in the latter
case, whether it is a corporation or a single proprietorship engaged in business or industry or any
other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises
of the business of the employer. In such instance, they are employees of the company or employer in
the business concerned entitled to the privileges of a regular employee.
Private respondent Candida is therefore, entitled to appropriate relief as a regular employee of
petitioner. Inasmuch as private respondent appears not to be interested in returning to her work for
valid reasons, the payment of separation pay to her is in order.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public
respondent NLRC are hereby AFFIRMED. No pronouncement as to costs.

CASE NO. 10
BRENT SCHOOL, INC.DIMACHE vs. RONALDO ZAMORA and DOROTEO R. ALEGRE
G.R. No. L-48494 February 5, 1990 en banc
FACTS
1. In virtue of an employment contract Doroteo R. Alegre was engaged as athletic director by Brent
School, Inc. at a yearly compensation of P20,000 .00.
2. The contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date
of execution of the agreement, to July 17,1976.
3. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14,
1974 reiterated the same terms and conditions, including the expiry date, as those contained in the
original contract of July 18, 1971.
4. When the employment contract was signed between Brent School and Alegre (before the Labor
Code was Passed) it was perfectly valid for them to enter into stipulations fixing the duration thereof.
5. Some three months before the expiration of the stipulated period, or more precisely on April 20,
1976, Alegre was given a copy of the report filed by Brent School with the Department of Labor
advising of the termination of his services effective on July 16, 1976. The stated ground for the
termination was, "completion of contract, expiration of the definite period of employment."
6. However, at the investigation conducted by a Labor Conciliator of said report of termination of his
services, Alegre protested the announced termination of his employment. He argued that although his
contract did stipulate that the same would terminate on July 17,1976, since his services were
necessary and desirable in the usual business of his employer, and his employment had lasted for
five years, he had acquired the status of a regular employee and could not be removed except for
valid cause.
ISSUE Whether or not Alegre was lawfully terminated and that he is entitled to reinstatement.
HELD
NO. Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust
the gamut of employment contracts to which the lack of a fixed period would be an anomaly, but
would also appear to restrict, without reasonable. distinctions, the right of an employee to freely
stipulate with his employer the duration of his engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to
preclude absurdity in its application. Outlawing the whole concept of term employment and subverting
to boot the principle of freedom of contract to remedy the evil of employers' using it as a means to
prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face
or, more relevantly, curing a headache by lopping off the head.
Article 280 does not proscribe or prohibit an employment contract with a fixed period, provided the
same is entered into by the parties without any force, duress or improper pressure being brought to
bear upon the employee and absent any other circumstance vitiating consent. It does not necessarily

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

follow that where the duties of the employee consist of activities usually necessary or desirable in the
usual business of the employer, the parties are forbidden from agreeing on a period of time for the
performance of such activities. There is thus nothing essentially contradictory between a definite
period of employment and the nature of the employees duties

CASE NO. 11
ZOSIMO CIELO, petitioner,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, HENRY LEI and/or HENRY
LEI TRUCKING respondents.
FACTS
1. Petitioner was engaged as a truck driver of private respondent Henry Lei Trucking Company.
2. They entered into an agreement and it provides under paragraph 1 That the term of this
Agreement is six (6) months from and after the execution hereof, unless otherwise earlier terminated
at the option of either party. It also provides under paragraph 2 that there is no employer/employee
relationship between the parties, the nature of this Agreement being contractual.
3. The agreement was supposed to have commenced on June 30 1984, and to end on December 31,
1984.
4. On December 22, 1984: however, the petitioner was formally notified by the private respondent of
the termination of his services on the ground of expiration of their contract.
5. Soon thereafter, on January 22, 1985, the petitioner filed his complaint with the Ministry of Labor
and Employment.
6. The private respondent rests its case on the agreement and maintains that the labor laws are not
applicable because the relations of the parties are governed by their voluntary stipulations. The
contract having expired, it was the prerogative of the trucking company to renew it or not as it saw fit.
ISSUE Whether or not the petitioner was a regular employee.
HELD
YES. The private respondent's intention is obvious. There is no question that the purpose behind
these individual contracts was to evade the application of the labor laws by making it appear that the
drivers of the trucking company were not its regular employees.
Under these arrangements, the private respondent hoped to be able to terminate the services of the
drivers without the inhibitions of the Labor Code. All it had to do was refuse to renew the agreements,
which, significantly, were uniformly limited to a six-month period. No cause had to be established
because such renewal was subject to the discretion of the parties. In fact, the private respondent did
not even have to wait for the expiration of the contract as it was there provided that it could be "earlier
terminated at the option of either party." By this clever scheme, the private respondent could also
prevent the drivers from becoming regular employees and thus be entitled to security of tenure and
other benefits, such as a minimum wage, cost-of-living allowances, vacation and sick leaves, holiday
pay, and other statutory requirements. The private respondent argues that there was nothing wrong

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

with the affidavit because all the affiant acknowledged therein was full payment of the amount due
him under the agreement.
The petitioner was a regular employee of the private respondent. The private respondent is engaged
in the trucking business as a hauler of cattle, crops and other cargo for the Philippine Packing
Corporation. This business requires the services of drivers, and continuously because the work is not
seasonal, nor is it limited to a single undertaking or operation. Even if ostensibly hired for a fixed
period, the petitioner should be considered a regular employee of the private respondent,
conformably to the 1st paragraph of Article 280 of the Labor Code providing as follows:
Art. 280. Regular and Casual Employment. -The provision of written agreement to the contrary
notwithstanding and regardless: of the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

CASE NO. 12
PURE FOODS CORPORATON, petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION, RODOLFO CORDOVA, VIOLETA
CRUSIS, ET AL.,* respondents.
FACTS:
The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to
work for a fixed period of five months at its tuna cannery plant in Tambler, General Santos City. After
the expiration of their respective contracts of employment in June and July 1991, their services were
terminated. They forthwith executed a Release and Quitclaim stating that they had no claim
whatsoever against the petitioner.
On 29 July 1991, the private respondents filed before the National Labor Relations Commission
(NLRC) Sub-Regional Arbitration Branch No. XI, General Santos City, a complaint for illegal dismissal
against the petitioner and its plant manager, Marciano Aganon. [1]
On 23 December 1992, Labor Arbiter Arturo P. Aponesto handed down a decision [2] dismissing
the complaint on the ground that the private respondents were mere contractual workers, and not
regular employees; hence, they could not avail of the law on security of tenure. The termination of
their services by reason of the expiration of their contracts of employment was, therefore, justified.
Besides, by executing a Release and Quitclaim, the private respondents had waived and
relinquished whatever right they might have against the petitioner.
ISSUE: whether employees hired for a definite period and whose services are necessary and
desirable in the usual business or trade of the employer are regular employees.
HELD:

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

the two kinds of regular employees are (1) those who are engaged to perform activities which
are necessary or desirable in the usual business or trade of the employer; and (2) those casual
employees who have rendered at least one year of service, whether continuous or broken, with
respect to the activity in which they are employed.[6]
In the instant case, the private respondents activities consisted in the receiving, skinning, loining,
packing, and casing-up of tuna fish which were then exported by the petitioner. Indisputably, they
were performing activities which were necessary and desirable in petitioners business or trade.
Contrary to petitioner's submission, the private respondents could not be regarded as having
been hired for a specific project or undertaking. The term specific project or undertaking under Article
280 of the Labor Code contemplates an activity which is not commonly or habitually performed or
such type of work which is not done on a daily basis but only for a specific duration of time or until
completion; the services employed are then necessary and desirable in the employers usual business
only for the period of time it takes to complete the project.[7]
This Court has upheld the legality of fixed-term employment. It ruled that the decisive
determinant in term employment should not be the activities that the employee is called upon to
perform but the day certain agreed upon by the parties for the commencement and termination of
their employment relationship.
This scheme of the petitioner was apparently designed to prevent the private respondents and
the other casual employees from attaining the status of a regular employee. It was a clear
circumvention of the employees right to security of tenure and to other benefits like minimum wage,
cost-of-living allowance, sick leave, holiday pay, and 13th month pay. [11] Indeed, the petitioner
succeeded in evading the application of labor laws. Also, it saved itself from the trouble or burden of
establishing a just cause for terminating employees by the simple expedient of refusing to renew the
employment contracts.
The five-month period specified in private respondents employment contracts having been
imposed precisely to circumvent the constitutional guarantee on security of tenure should, therefore,
be struck down or disregarded as contrary to public policy or morals.[12]
The execution by the private respondents of a Release and Quitclaim did not preclude them from
questioning the termination of their services. Generally, quitclaims by laborers are frowned upon as
contrary to public policy and are held to be ineffective to bar recovery for the full measure of the
workers rights. [14] The reason for the rule is that the employer and the employee do not stand on the
same footing.[15]
The NLRC was, thus, correct in finding that the private respondents were regular employees and
that they were illegally dismissed from their jobs. They are entitled reinstatement without loss of
seniority rights and other privileges, with full back wages computed from the time of dismissal up to
the time of actual reinstatement, without deducting the earnings derived elsewhere pending the
resolution of the case.
However, since reinstatement is no longer possible because the petitioner's tuna cannery plant
had, admittedly, been closed in November 1994,[18] the proper award is separation pay equivalent to
one month pay or one-half month pay for every year of service, whichever is higher, to be computed
from the commencement of their employment up to the closure of the tuna cannery plant. The amount
of back wages must be computed from the time the private respondents were dismissed until the time
petitioner's cannery plant ceased operation.[19]

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

CASE NO. 13
JOAQUIN T. SERVIDAD, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
INNODATA PHILIPPINES, INC./ INNODATA CORPORATION, TODD SOLOMON, respondents.
1998 March 18, GR No 128682

Facts: Servidad was employed on 9 May 1994 by respondent INNODATA as Data Control Clerk,
under a contract of employment. Section 2 of such contract states: This Contract shall be effective
for a period of one (1) year commencing on 10 May1994 until 10 May 1995 unless sooner terminated
pursuant to the provisions hereof.
Petitioner was a contractual employee for six months or from the period of May 10, 1994 to
November 10, 1994 during which, the employer can terminate with due notice. The contract also
states that should the employee continue his employment beyond the 6-month period, he shall
become a regular employee upon demonstration of sufficient skill. On November 9, 1995 or one day
before his contractual terms ends, he was made to sign a three-month probationary employment and
later, an extended three-month employment good until 9 May 1995.Petitioner was terminated on May
9, 1995 and filed an illegal dismissal complaint before the Labor Arbiter.
The Labor Arbiter found the respondent INNODATA guilty of the charge and was ordered to pay
backwages and reinstatement of petitioner. On appeal thereto by INNODATA, the NLRC reversed the
decision declaring that the contract between petitioner and private complainant was for a fixed term
and the dismissal, at the end of one year, was valid.
Issue: WON the contract entered into by the petitioner and respondent is valid and enforceable.
Held: NO.
The NLRC found that the contract in question is for a fixed term. The said contract provides for two
periods. The first period was for six months terminable at the option of private respondent, while the
second period was also for six months but probationary in character. In both cases, the private
respondent did not specify the criteria for the termination or retention of the services of petitioner. It is
violative of the right of the employee against unwarranted dismissal. By the provisions of the very
contract itself, petitioner has become a regular employee of private respondent.
As to the private respondent statement that the one-year period stipulated in subject contract was to
enable petitioner to acquire the skill necessary for the job. In effect, what respondent employer
theorized upon is that the one-year term of employment is probationary. If the nature of the job did
actually necessitate at least one year for the employee to acquire the requisite training and
experience, the same could not be a valid probationary employment as it falls short of the
requirement of Article 281[10] of the Labor Code. It was not brought to light that the petitioner was
duly informed at the start of his employment, of the reasonable standards under which he could
qualify as a regular employee.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

WHEREFORE, the petition is GRANTED, the questioned decision of NLRC is SET ASIDE, and the
decision of the Labor Arbiter, dated August 20, 1996, in NLRC-NCR-00-055-03471-95 REINSTATED,
with the modification that the award of backwages be computed from the time of the dismissal of
petitioner to his actual or payroll reinstatement. Costs against the private respondent.
CASE NO. 14
Joeb Aliviado, et al. vs. Procter & Gamble Philippines, Inc., et al.
G.R. No. 160506, March 9, 2010
Facts:
Petitioners worked as merchandisers of Procter & Gamble Phils. Inc. (P&G). They all individually signed
employment contracts with either Promm-Gem, Inc. (Promm-Gem) or Sales and Promotions Services
(SAPS). To enhance consumer awareness and acceptance of the products, P&G entered into contracts with
Promm-Gem and SAPS for the promotion and merchandising of its products. In December 1991, petitioners
filed a complaint against P&G for regularization, service incentive leave pay and other benefits with
damages. The complaint was later amended to include the matter of their subsequent dismissal.
The Labor Arbiter dismissed the complaint for lack of merit and ruled that there was no employeremployee relationship between petitioners and P&G. He found that the selection and engagement of
the petitioners, the payment of their wages, the power of dismissal and control with respect to the
means and methods by which their work was accomplished, were all done and exercised by PrommGem/SAPS. He further found that Promm-Gem and SAPS were legitimate independent job
contractors. On appeal to the NLRC, the NlRC affirmed the decision of the labor arbiter. Petitioners
then filed a petition for certiorari with the CA, alleging grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the Labor Arbiter and the NLRC. However, said petition was also
denied by the CA.
Issues:
1.) Is P&G the employer of petitioners?
2.) Were petitioners illegally dismissed?
Held:
1. No for the workers from Promm-Gem, Yes for the works from SAPS.
For In order to determine whether P&G is the employer of petitioners, it is necessary to first
determine whether Promm-Gem and SAPS are labor-only contractors or legitimate job contractors.
There is "labor-only" contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are performing activities which are
directly related to the principal business of such employer. In such cases, the person or intermediary
shall be considered merely as an agent of the employer who shall be responsible to the workers in
the same manner and extent as if the latter were directly employed by him. (ART 106 Labor Code).
The Court held that Promm-Gem cannot be regarded as labor-only contractor but a legitimate
independent contractor because the financial statement of Promm-Gem shows that it has authorized
capital stock of P1 million and a paid-in capital, or capital available for operations, of P500,000.00 as
of 1990. It also has long term assets worth P432, 895.28 and current assets of P719, 042.32. PrommGem has also proven that it maintained its own warehouse and office space with a floor area of 870
square meters. It also had under its name three registered vehicles which were used for its
promotional/merchandising business. Promm-Gem also has other clients aside from P&G.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in capital of only
P31, 250.00. There is no other evidence presented to show how much its working capital and assets
are. Furthermore, there is no showing of substantial investment in tools, equipment or other assets.
Considering that SAPS has no substantial capital or investment and the workers it recruited are
performing activities which are directly related to the principal business of P&G, the court held that
SAPS is engaged in "labor-only contracting". The contractor is considered merely an agent of the
principal employer and the latter is responsible to the employees of the labor-only contractor as if
such employees had been directly employed by the principal employer.
2. With regard to the termination letters given by Promm-Gem to its employees uniformly
specified the cause of dismissal as grave misconduct and breach of trust. The court held that
there were no valid causes for the dismissal of petitioners-employees of Promm-Gem.
Misconduct to be valid just cause for dismissal, such misconduct (a) must be serious; (b) must relate
to the performance of the employees duties; and (c) must show that the employee has become unfit
to continue working for the employer. In the case, petitioners-employees of Promm-Gem may have
committed an error of judgment in claiming to be employees of P&G, but it cannot be said that they
were motivated by any wrongful intent in doing so. As such, they are guilty of only simple misconduct
for assailing the integrity of Promm-Gem as a legitimate and independent promotion firm. A
misconduct which is not serious or grave, as that existing in the instant case, cannot be a valid basis
for dismissing an employee.
Meanwhile, loss of trust and confidence, as a ground for dismissal,
must be based on the willful breach of the trust reposed in the employee by his employer. Ordinary
breach will not suffice. Loss of trust and confidence, as a cause for termination of employment, is
premised on the fact that the employee concerned holds a position of responsibility or of trust and
confidence. And, in order to constitute a just cause for dismissal, the act complained of must be workrelated and must show that the employee is unfit to continue to work for the employer. In the case at
bar, In the instant case, the petitioners-employees of Promm-Gem have not been shown to be
occupying positions of responsibility or of trust and confidence. Neither is there any evidence to show
that they are unfit to continue to work as merchandisers for Promm-Gem. Hence, no valid cause for
dismissal by Promm-Gem against petitioner-employees.
With regard to the petitioners placed with P&G by SAPS, they were given no written notice of
dismissal. The records show that upon receipt by SAPS of P&Gs letter terminating their
"Merchandising Services Contact", they in turn verbally informed the concerned petitioners not to
report for work anymore. It must be emphasized that the onus probandi to prove the lawfulness of the
dismissal rests with the employer. In termination cases, the burden of proof rests upon the employer
to show that the dismissal is for just and valid cause. In the instant case, P&G failed to discharge the
burden of proving the legality and validity of the dismissals of those petitioners who are considered its
employees. Hence, the dismissals necessarily were not justified and are therefore illegal.
The petition is granted and the decision of the CA is set aside.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

CASE NO. 15
MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners,
vs.
HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and
Employment judgment, and JOAQUIN A. DEQUILA, respondents.
G.R. No. 74246 January 26, 1989
Facts:
Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing, Inc. as a general
utility worker on January 10, 1979. After 6 months, he was informed that his work was unsatisfactory
and had failed to meet the required standards. To give him another chance, and with Dequilas written
consent, Mariwasa extended Dequilas probationary period for another three months: from July 10 to
October 9, 1979. Dequilas performance, however, did not improve and Mariwasa terminated his
employment at the end of the extended period.
Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for Administration, Angel T.
Dazo, and violation of Presidential Decrees Nos. 928 and 1389.
DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified. Thus,
Dequila appeals to the Minister of Labor.
MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a
regular employee at the time of his dismissal, thus, he was illegally dismissed. (Initial order:
Reinstatement with full backwages. Later amended to direct payment of Dequilas backwages from
the
date
of
his
dismissal
to
December
20,
1982
only.)
Issue:
WON employer and employee may, by agreement, extend the probationary period of employment
beyond
the
six
months
prescribed
in
Art.
282
of
the
Labor
Code?
Held:
YES, agreements stipulating longer probationary periods may constitute lawful exceptions to the
statutory prescription limiting such periods to six months.
The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that Generally, the probationary period
of employment is limited to six (6) months. The exception to this general rule is when the parties to an
employment contract may agree otherwise, such as when the same is established by company policy
or when the same is required by the nature of work to be performed by the employee. In the latter
case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of
probationary employment, such as in the present case where the probationary period was set for
eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee
must learn a particular kind of work such as selling, or when the job requires certain qualifications,
skills
experience
or
training.
In this case, the extension given to Dequila could not have been pre-arranged to avoid the legal
consequences of a probationary period satisfactorily completed. In fact, it was ex gratia, an act of
liberality on the part of his employer affording him a second chance to make good after having initially
failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said
employers account to compel it to keep on its payroll one who could not perform according to its work
standards.
By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any
benefit attaching to the completion of said period if he still failed to make the grade during the period
of extension. By reasonably extending the period of probation, the questioned agreement actually

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

improved the probationary employees prospects of demonstrating his fitness for regular employment.
Petition granted. Order of Deputy Minister Leogardo reversed.
CASE NO. 16
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners,
vs. GLAXO WELLCOME PHILIPPINES, INC. respondent
G.R. No.162994. September 17, 2004
Facts:
Pedro A. Tecson was hired by Glaxo Wellcome Philippines, Inc.) as medical representative on
October 1995,after Tecson had undergone training and orientation. Tecson signed a contract of
employment whichstipulates, among others, that he agrees to study and abide by existing company
rules; to disclose tomanagement any existing or future relationship by consanguinity or affinity with
co-employees or employees ofcompeting drug companies. The Employee Code of Conduct of Glaxo
similarly provides that if management perceives a conflict of interest or a potential conflict between
such relationship and the employees employment with the company, the management and the
employee will explore the possibility of a transfer to another department in a non- counterchecking
position or preparation for employment outside the company after six months.Tecson was initially
assigned to market Glaxos products in the Camarines Sur -Camarines Norte sales
area.Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra
Pharmaceuticals (Astra), a competitor of Glaxo. Bettsy was Astras Branch Coordinator in Albay.
Despite of warnings, Tecson married Bettsy. The superiors of Tecson reminded him of the company
policy and suggested that either him o rBettsy shall resign from their respective companies. Tecson
requested more time to resolve the issue. In November of 1999, Glaxo transferred Tecson to
Mindanao area involving the provinces of Butuan, Surigao andAgusan del Sur. Tecson did not agree
to the reassignment and referred this matter to the grievance committee.It was resolved and was
submitted to voluntary arbitration.
Issue:
Is the policy of a pharmaceutical company prohibiting its employees from marrying employees of
anycompetitor company valid?
Held:
Glaxos policy prohibiting an employee from having a relationship with an employee of a competitor
company is a valid exercise of management prerogative. Glaxo has a right to guard its trade secrets,
manufacturingformulas, marketing strategies and other confidential programs and information
from competitors, especially sothat it and Astra are rival companies in the highly competitive
pharmaceutical industry.
The prohibition against personal or marital relationships with employees of competitor companies
upon Glaxos employees is reasonable under the circumstances because relationships of that nature
might compromise theinterests of the company. In laying down the assailed company policy, Glaxo
only aims to protect its interestsagainst the possibility that a competitor company will gain access to
its secrets and procedures.
That Glaxopossesses the right to protect its economic interests cannot be denied.No less than the
Constitution recognizes the right of enterprises to adopt and enforce such a policy to protectits right to
reasonable returns on investments and to expansion and growth.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

Indeed, while our laws endeavor togive life to the constitutional policy on social justice and the
protection of labor, it does not mean that everylabor dispute will be decided in favor of the workers.
The law also recognizes that management has rightswhich are also entitled to respect and
enforcement in the interest of fair play.
CASE NO. 17
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents
G.R. No. 164774
April 12, 2006
Facts:
Petitioner Star Paper Corporation is a corporation engaged in trading principally of paper products.
Josephine Ongsitco is its Manager of the Personnel and Administration Department while Sebastian
Chua is its Managing Director. Respondents Ronaldo D. Simbol , Wilfreda N. Comia and Lorna E.
Estrella were all regular employees of the company.
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an employee
of the company, whom he married on June 27, 1998. Prior to the marriage, Ongsitco advised the
couple that should they decide to get married, one of them should resign pursuant to a company
policy. Simbol resigned on June 20, 1998 pursuant to the company policy.
Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee,
whom she married on June 1, 2000. Ongsitco likewise reminded them that pursuant to company
policy, one must resign should they decide to get married. Comia resigned on June 30, 2000.
Estrella was hired on July 29, 1994. She met Luisito Zuiga , also a co-worker. Petitioners stated that
Zuiga, a married man, got Estrella pregnant. The company allegedly could have terminated her
services due to immorality but she opted to resign on December 21, 1999.
Respondents offer a different version of their dismissal. Simbol and Comia allege that they did not
resign voluntarily; they were compelled to resign in view of an illegal company policy. As to
respondent Estrella, she alleges after returning to the company from a 21-day leave due to
hospitalization, she was dismissed. She resigned because she was in dire need of money and
resignation could give her the thirteenth month pay.
They averred that the aforementioned company policy is illegal and contravenes Article 136 of the
Labor Code. The Labor Arbiter dismissed the complaint for lack of merit. On appeal to the NLRC, the
Commission affirmed the decision of the Labor Arbiter. Respondents filed a Motion for
Reconsideration but was denied by the NLRC. They appealed to the Court of Appeals which reversed
the NLRC decision declaring illegal.
Issue:
Whether the policy of the employer banning spouses from working in the same company violates the
rights of the employee under the Constitution and the Labor Code or is a valid exercise of
management prerogative.
Held:
YES
The Labor Code is the most comprehensive piece of legislation protecting labor. The case at bar
involves Article 136 of the Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuation
of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that
upon getting married a woman employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her
marriage.

LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

It is true that the policy of petitioners prohibiting close relatives from working in the same company
takes the nature of an anti-nepotism employment policy. Companies adopt these policies to prevent
the hiring of unqualified persons based on their status as a relative, rather than upon their ability.
These policies focus upon the potential employment problems arising from the perception of
favoritism exhibited towards relatives. With more women entering the workforce, employers are also
enacting employment policies specifically prohibiting spouses from working for the same company.
We note that two types of employment policies involve spouses: policies banning only spouses from
working in the same company (no-spouse employment policies), and those banning all immediate
family members, including spouses, from working in the same company (anti-nepotism employment
policies).
A requirement that a woman employee must remain unmarried could be justified as a bona fide
occupational qualification, or BFOQ, where the particular requirements of the job would justify the
same, but not on the ground of a general principle, such as the desirability of spreading work in the
workplace. A requirement of that nature would be valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance.
We do not find a reasonable business necessity in the case at bar. It is significant to note that in the
case at bar, respondents were hired after they were found fit for the job, but were asked to resign
when they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a
Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be
detrimental to its business operations. Neither did petitioners explain how this detriment will happen in
the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who married
Howard Comia, then a helper in the cutter-machine.
The policy is premised on the mere fear that employees married to each other will be less efficient. If
we uphold the questioned rule without valid justification, the employer can create policies based on
an unproven presumption of a perceived danger at the expense of an employees right to security of
tenure. Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction
cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive
that we cannot prudently draw inferences from the legislatures silence that married persons are not
protected under our Constitution and declare valid a policy based on a prejudice or stereotype.
Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, we
rule that the questioned policy is an invalid exercise of management prerogative.