You are on page 1of 10

HYDRO RESOURCES CONTRACTORS CORP V.

PAGALILAUAN FACTS: Aban was hired by respondent as its Legal Assistant where he received P1,500 salary plus an initial living allowance of P50 which gradually increased to P320. On Sept 4, 1980, he received a letter of termination effective Oct. 4 for alleged failure to perform his duties well. He then filed a complaint for illegal dismissal. The labor arbiter ruled that he was illegally dimissed and was affirmed by NLRC on appeal. ISSUE: WON there was an employer-employee relationship between petitioner and Aban. DECISION: Petition is DISMISSED. Contention is without merit. The four-fold test was passed in this case and there are papers which proved his status as an employee to the company (e.g. appointment paper). Aban worked solely for the petitioner. His acts are not in the exercise of a lawyer as a profession but rather a duty for the benefit of the corporation.

CITIZENS LEAGUE OF FREEWORKERS v. ABBAS FACTS: Respondents-spouses (Geronimo) are owners & operators of auto-calesas in Davao City. A case was filed to restrain the Union and its members from interfering with its operation from committing certain acts complained of in connection thereweith, and to recover damages. It was alleged that the drivers were leasing the auto-calesas. A writ of preliminary injunction was prayed for restraining drivers to commit said acts of violence and intimidation during case and it was granted by the Court. Union filed case of unfair labor practice because of operators refusal to bargain and they filed motion to nullify the writ of preliminary injunction but was denied by the Judge. The ground was non-existence of employer-employee relationship. ISSUE: WON there is an employer-employee relationship; WON Court has jurisdiction over the case DECISION: An employer-employee relationship is present. Drivers who operate under the boundary system are considered employees. Compensation is the excess of the agreed amount of boundary. The Court of Industrial Relations (NLRC) acquires jurisdiction over this case.

AUTO BUS TRANSPORT SYSTEM INC v. BAUTISTA FACTS: Bautista is employed as a driver-conductor for Auto Bus on commission basis (7% of total gross income per travel) on a twice a month basis. While driving, he accidentally bumped the rear portion of another Autobus. He said he was compelled to go back to Isabela although he had not slept for almost 24hrs. He was terminated after a month. Bautista then filed a complaint for illegal dismissal with money claims for nonpayment of 13th month pay and service incentive leave. ISSUE: WON respondent is entitled to service incentive leaves

DECISION: Drivers-Conductors are not considered field personnel. There are ways for the employer to monitor them (e.g. inspectors, car barn, prompt departure & arrival, dispatcher). He is not excluded from the definition in Art. 82 and should therefore be given SIL.

PAMPANGA SUGAR DEVELOPMENT CO., INC. v. COURT OF INDUSTRIAL RELATIONS FACTS: The Union staged a strike against petitioner. The Court ordered the petitioner to reinstate some 88 union members. However, they were discriminated upon. They filed a complaint for unfair labor practice. The CIR found the petitioner guilty thereof. It also granted Atty.Lacsana (counsel for respondent) attorneys fees equivalent to 20% of the total amount of final judgment or whatever recovery or settlement. Petitioner moved for reconsideration. ISSUE: WON the quitclaim is valid DECISION: The petition is without merit. The petitioner did not contest the allegations contained in the respondents petition for attorneys lien before the trial court. This issue has already been resolved by the Court (res judicata). The quitclaims is void ab initio because the waiver is contrary to public policy and the petitioner is freed from obligation.

WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION v. TRAJANO FACTS: A routine inspection of a Labor Enforcement Officer of the Wellington Flour Mills, found non-payment of regular holidays falling on a Sunday for monthly-paid employees, Wellington was using the 314 factor (deduction of 51 Sundays in a year). ISSUE: WON a monthly-paid employee, receiving a fixed monthly compensation, is entitled to an additional pay aside from his usual holiday pay, whenever a regular holiday falls on a Sunday DECISION: DISMISSED. Wellington was and had been paying its employees a salary of not less than the statutory or established minimum wage. The monthly salary covers payment for 314 days, including regular and special holidays as well as days when no work is done by reason of fortuitous cause. There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year.

GLOBE MACKAY CABLE AND RADIO CORPORATION, FREDERICK WHITE and JESUS SANTIAGO,petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION, FFW-GLOBE MACKAY EMPLOYEES UNION and EDA CONCEPCION, respondents. Facts: On October 30, 1984 Wage Order No. 6 mandated an increased in the cost-of-living allowance of nonagricultural workers in the private sector for P3.00. The order was complied by the petitioner Corporation by multiplying the same by 22 days, equivalent to the number of working days in the company. Respondent union alleges that instead of multiplying the COLA by 22 it should be multiplied by 30 representing the number of days in a month, as what the corporation's normal practice prior to the said Wage Order. Thus the union filed a complaint against the Corporation for for illegal deduction, underpayment, unpaid allowances, and violation of Wage Order No. 6. Issue: Whether or not COLA under Wage Order No. 6 should be multiplied by 22 or 30 representing the number of working days in a month. Held: Labor Arbiter Adelaido F. Martinez sustained the position of Petitioner Corporation by holding that since the individual petitioners acted in their corporate capacity they should not have been impleaded; and that the monthly COLA should be computed on the basis of twenty two (22) days, since the evidence showed that there are only 22 paid days in a month for monthly-paid employees in the company. His reasoning, inter alia, was as follows: To compel the respondent company to use 30 days in a month to compute the allowance and retain 22 days for vacation and sick leave, overtime pay and other benefits is inconsistent and palpably unjust. If 30 days is used as divisor, then it must be used for the computation of all benefits, not just the allowance. But this is not fair to complainants, not to mention that it will contravene the provision of the parties' CBA. Section 5 of the Rules Implementing Wage Orders Nos. 2, 3, 5 and 6 uniformly read as follows: Section 5. Allowance for Unworked Days. All covered employees shall be entitled to their daily living allowance during the days that they are paid their basic wage, even if unworked. (Emphasis supplied) ... it is evident that the intention of the law is to grant ECOLA upon the payment of basic wages. Hence, we have the principle of 'No Pay, No ECOLA.

SAN MIGUEL CORPORATION (CAGAYAN COCA-COLA PLANT), petitioner, vs. Hon. AMADO G. INCIONG, Deputy Minister of Labor and CAGAYAN COCA-COLA FREE WORKERS UNION, respondents. FACTS: On January 3, 1977, Cagayan Coca-Cola Free Workers Union, private respondent herein, filed a complaint against San Miguel Corporation (Cagayan Coca-Cola Plant), petitioner herein, alleging failure or refusal of the latter to include in the computation of 13th- month pay such items as sick, vacation or maternity leaves, premium for work done on rest days and special holidays, including pay for regular holidays and night differentials. An Order dated February 15, 1977 was issued by Regional Office No. X where the complaint was filed requiring herein petitioner San Miguel Corporation (Cagayan Coca-Cola Plant) "to pay the difference of whatever earnings and the amount actually received as 13th month pay excluding overtime premium and emergency cost of living allowance." Herein petitioner appealed from that Order to the Minister of Labor in whose behalf the Deputy Minister of Labor Amado G. Inciong issued an Order dated June 7, 1978 affirming the Order of Regional Office No. X and dismissing the appeal for lack of merit. Petitioner's motion for reconsideration having been denied, it filed the instant petition. On February 14, 1979, this Court issued a Temporary Restraining Order enjoining respondents from enforcing the Order dated December 19, 1978. Public respondent's consistent stand on the matter since the effectivity of Presidential Decree 851 is that "payments for sick leave, vacation leave, and maternity benefits, as well as salaries paid to employees for work performed on rest days, special and regular holidays are included in the computation of the 13th-month pay. On its part, private respondent cited innumerable past rulings, opinions and decisions rendered by then Acting Labor Secretary Amado G. Inciong to the effect that, "in computing the mandatory bonus, the basis is the total gross basic salary paid by the employer during the calendar year. Such gross basic salary includes: (1) regular salary or wage; (2) payments for sick, vacation and maternity leaves; (3) premium for work performed on rest days or holidays: (4) holiday pay for worked or unworked regular holiday; and (5) emergency allowance if given in the form of a wage adjustment." Petitioner, on the other hand, assails as erroneous the aforesaid order, ruling and opinions, vigorously contends that Presidential Decree 851 speaks only of basic salary as basis for the determination of the 13thmonth pay; submits that payments for sick, vacation, or maternity leaves, night differential pay, as well as premium paid for work performed on rest days, special and regular holidays do not form part of the basic salary; and concludes that the inclusion of those payments in the computation of the 13th-month pay is clearly not sanctioned by Presidential Decree 851. ISSUE:Whether or not in the computation of the 13th-month pay under Presidential Decree 851, payments for sick, vacation or maternity leaves, premium for work done on rest days and special holidays, including pay for regular holidays and night differentials should be considered. HELD: The Court finds petitioner's contention meritorious. The provision in dispute is Section 1 of Presidential Decree 851 and provides: All employers are hereby required to pay all their employees receiving a basic salary of not more than Pl,000 a month, regardless of the nature of the employment, a 13th-month pay not later than December 24 of every year. Section 2 of the Rules and Regulations for the implementation of Presidential Decree 851 provides: a) Thirteenth-month pay shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year b) Basic salary shall include all remunerations on earnings paid by an employer to an employee for

services rendered but may not include cost-of-living allowances granted pursuant to Presidential Decree No. 525 or Letter of Instructions No. 174, profit sharing payments and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975. Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as the basis in the determination of his 13th-month pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus. Under the Rules and Regulations Implementing Presidential Decree 851, the following compensations are deemed not part of the basic salary: a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instructions No. 174; b) Profit sharing payments; c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975. Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by the then Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th-month pay. All exclusionary phrase "all allowances and monetary benefits which are not considered or integrated as part of the basic salary" shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or "fringe" benefits. Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more emphatic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay. While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically, exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. The all-embracing phrase "earnings and other remuneration" which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves. Maternity premium for works performed on rest days and special holidays pays for regular holidays and night differentials. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay they, were not so excluded, it is hard to find any "earnings and other remunerations" expressly excluded in the computation of the 13th-month pay. Then the exclusionary provision would prove to be Idle and with no purpose. This conclusion finds strong support under the Labor Code of the Philippines. To cite a few provisions: Art. 87. overtime work. Work may be performed beyond eight hours a day provided what the employee is paid for the overtime work, additional compensation equivalent to his regular wage plus at least twenty-five (25%) percent thereof. It is clear that overtime pay is an additional compensation other than and added to the regular wage or basic salary, for reason of which such is categorically excluded from the definition of basic salary under the Supplementary Rules and Regulations Implementing Presidential Decree 851. In Article 93 of the same Code, paragraph

c) work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. It is likewise clear that premium for special holiday which is at least 30% of the regular wage is an additional compensation other than and added to the regular wage or basic salary. For similar reason it shall not be considered in the computation of the 13th- month pay. WHEREFORE, the Orders of the Deputy Labor Minister dated June 7, 1978 and December 19, 1978 are hereby set aside and a new one entered as above indicated. The Temporary Restraining Order issued by this Court on February 14, 1979 is hereby made permanent. No pronouncement as to costs.

Manila Water Company vs Herminio D. Pena, et al. July 8, 2004 G.R. No. 158255 Ynares-Santiago, J,: Facts On August 1, 1997, under the concession agreement, petitioner, Manila Water Company, undertook to absorb former employees of the Metropolitan Waterworks and Sewerage System (MWSS) and positions were in the list furnished by the latter, while the employment of those not in the list was terminated on that day. Private respondents who were contractual collectors of the MWSS, were among the 121 employees not included in the list, but still the petitioner engaged their services without written contract. On September 1, 1997, they signed a three-month contract to perform collection services for eight branches of petitioner in the East Zone. Before the end of the three month contract, the 121 collectors incorporated the Association Collectors Group, Inc. (ACGI) which was contracted by the Petitioner to collect charges for the Balara Branch. Most of the 121 collectors were asked by the petitioner to transfer to the First Class Courier Services, a newly registered corporation. Only private respondents herein remained with ACGI. Petitioner continued to transact with ACGI to do its collection needs until February 8, 1999, when petitioner terminated its contract with ACGI. Private respondents filed a complaint for illegal dismissal and money claims against the petitioner. Issue Whether or not the employment of the respondents was labor-only contracting. Held Labor-Only Contracting refers to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform job, work or service for a principal, and any of the following elements are present: (1) The contractor or the subcontractor does not have substantial capital or investments which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or (2) the contractor does not exercise the right to control over the performance of the work of the contractual employee. There is no doubt that ACGI was engaged in labor-only contracting, and as such, is considered merely an agent of the petitioner. In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. Since ACGI is only a labor-only contractor, the workers it supplied should be considered as employees of the petitioner. As private respondents employer, petitioner has the burden of proving that the dismissal was for a cause allowed under the law and that they were afforded procedural due process. Petitioner failed to discharge this burden by substantial evidence as it maintained the defense that it was not the employer of private respondents. Having established that the schemes employed by petitioner were devious attempts to defeat the tenurial rights of private respondents and that it failed to comply with the requirements of termination under the Labor Code, the dismissal of the private respondent is tainted with illegality.

You might also like