1. From: Mr.

Bartolome

ARLENE N. LAPASARAN, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

Facts:
In September 2001, private complainant Menardo Villarin
(Menardo) and his sister Vilma Villarin (Vilma) met petitioner Arlene N.
Lapasaran, who worked at Silver Jet Travel Tours Agency (Silver Jet)
at SIMCAS Building, Makati. For a fee of P85,000.00, petitioner
undertook the processing of the papers necessary for the deployment
(under a tourist visa) and employment of Menardo in South
Korea. Petitioner informed Menardo that he would be employed as
factory worker, which was, subsequently, changed to bakery
worker. Thereafter, Menardo paid the said fee in installments, the
first in September 2001 in the amount of P10,000.00, which was
received by a certain Pastor Paulino Cajucom; the second installment
was P35,000.00; while the third and last payment was P40,000.00;
the last two installments were delivered to the petitioner.

After two postponements in his flight schedule, Menardo finally
left for South Korea on November 25, 2001. Unfortunately, he was
incarcerated by South Korean immigration authorities and was
immediately deported to the Philippines because the travel documents
issued to him by the petitioner were fake. He immediately contacted
petitioner and informed her of what happened. Thereupon, petitioner
promised to send him back to South Korea, but the promise was
never fulfilled. Consequently, Menardo and his sister Vilma
demanded the return of the money they paid, but petitioner refused
and even said, Magkorte na lang tayo. It was later found out that
petitioner was no longer connected with Silver Jet.

Hence, the separate charges for illegal recruitment and estafa
against petitioner before the RTC of Manila. When arraigned, she
pleaded not guilty to both charges.

In her defense, petitioner testified that she owned a travel
agency named A&B Travel and Tours General Services, engaged in
the business of visa assistance and ticketing. She averred that it was
Vilma who solicited her assistance to secure a tourist visa for
Menardo. She admitted transacting with the Villarins, but committed
only to securing a tourist visa and a two-way airplane ticket for
Menardo, for which she received P70,000.00 as payment. She
denied having recruited Menardo Villarin; she likewise denied having
promised him employment in South Korea. On February 15, 2005, the
RTC rendered a Decision finding petitioner guilty beyond reasonable
doubt of illegal recruitment and estafa. The CA affirmed with
modifications.


Issue:
WHETHER OR NOT THE LAWS ON ILLEGAL
RECRUITMENT AND ESTAFA ARE APPLICABLE IN THIS CASE.


Held:
Both laws are affirmative on both accounts. In the first case,
petitioner was charged with illegal recruitment, defined and penalized
by the Labor Code as amended R.A. No. 8042. Illegal recruitment is
committed when it is shown that petitioner gave the complainant the
distinct impression that she had the power or ability to send the
complainant abroad for work, such that the latter was convinced to
part with his money in order to be employed. Petitioners
misrepresentations concerning her purported power and authority to
recruit for overseas employment, and the collection from Menardo of
various amounts, clearly indicate acts constitutive of illegal
recruitment. In the second case, petitioner was charged with violation
of Article 315(2)(a) of the Revised Penal Code which punishes estafa.
The elements of the crime are: (a) the accused defrauded another by
abuse of confidence or by means of deceit; and (b) damage or
prejudice capable of pecuniary estimation is caused to the offended
party. Here, it has been sufficiently proven that petitioner represented
herself to Menardo as capable of sending him to South Korea for
employment, even if she did not have the authority or license for the
purpose. Undoubtedly, it was this misrepresentation that induced
Menardo to part with his hard-earned money in exchange for what he
thought was a promising future abroad. The act of petitioner clearly
constitutes estafa under the above-quoted provision. It is well
established in jurisprudence that a person may be convicted of both
illegal recruitment and estafa. The reason, therefore, is not hard to
discern: illegal recruitment is malum prohibitum, while estafa
is malum in se. In the first, the criminal intent of the accused is not
necessary for conviction. In the second, such intent is imperative.
Petition denied. CA decision affirmed.































































2. From: Mr. Bartolome

PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First
Instance of Zambales & Olongapo City, Branch III and SERAPIO
ABUG, respondents.

Facts:
Four informations were filed on January 9, 1981, in the Court
of First Instance of Zambales and Olongapo City alleging that Serapio
Abug, private respondent herein, "without first securing a license from
the Ministry of Labor as a holder of authority to operate a fee-charging
employment agency, did then and there wilfully, unlawfully and
criminally operate a private fee charging employment agency by
charging fees and expenses (from) and promising employment in
Saudi Arabia" to four separate individuals named therein, in violation
of Article 16 in relation to Article 39 of the Labor Code.

Abug filed a motion to quash on the ground that the
informations did not charge an offense because he was accused of
illegally recruiting only one person in each of the four informations.
Under the proviso in Article 13(b), he claimed, there would be illegal
recruitment only "whenever two or more persons are in any manner
promised or offered any employment for a fee. " . Denied at first, the
motion was reconsidered and finally granted in the Orders of the trial
court dated June 24 and September 17, 1981. The prosecution is now
before us on certiorari.


Issue:
Whether or not the act should involve two or more
persons to constitute recruitment and placement.




Held:
Negative. The proviso was intended neither to impose a
condition on the basic rule nor to provide an exception thereto but
merely to create a presumption. The presumption is that the individual
or entity is engaged in recruitment and placement whenever he or it is
dealing with two or more persons to whom, in consideration of a fee,
an offer or promise of employment is made in the course of the
"canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring (of) workers."The number of persons dealt with is not an
essential ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article 13(b)
win constitute recruitment and placement even if only one prospective
worker is involved. The proviso merely lays down a rule of evidence
that where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual or
entity dealing with them shall be deemed to be engaged in the act of
recruitment and placement. The words "shall be deemed" create that
presumption. The four informations are reinstated.




















3. From: Mr. Miranda

ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION
CO., INC., Respondents

Facts:
Petitioner Antonio Serrano was hired by respondents Gallant
Maritime Services, Inc. and Marlow Navigation Co., Inc., under a
POEA-approved contract of employment for 12 months, as Chief
Officer, with the basic monthly salary of US$1,400, plus $700/month
overtime pay, and 7 days paid vacation leave per month.

On March 19, 1998, the date of his departure, Serrano was
constrained to accept a downgraded employment contract for the
position of Second Officer with a monthly salary of US$1,000 upon the
assurance and representation of respondents that he would be Chief
Officer by the end of April 1998.

Respondents did not deliver on their promise to make Serrano
Chief Officer. Hence, Serrano refused to stay on as second Officer
and was repatriated to the Philippines on May 26, 1998, serving only
two (2) months and seven (7) days of his contract, leaving an
unexpired portion of nine (9) months and twenty-three (23) days.

Serrano filed with the Labor Arbiter (LA) a Complaint against
respondents for constructive dismissal and for payment of his money
claims in the total amount of US$26,442.73 (based on the
computation of $2590/month from June 1998 to February 199,
$413.90 for March 1998, and $1640 for March 1999) as well as moral
and exemplary damages.

The LA declared the petitioners dismissal illegal and awarded
him US$8,770, representing his salary for three (3) months of the
unexpired portion of the aforesaid contract of employment, plus $45
for salary differential and for attorneys fees equivalent to 10% of the
total amount; however, no compensation for damages as prayed was
awarded.

On appeal, the NLRC modified the LA decision and awarded
Serrano $4669.50, representing three (3) months salary at
$1400/month, plus 445 salary differential and 10% for attorneys fees.
This decision was based on the provision of RA 8042, which was
made into law on July 15, 1995.

Serrano filed a Motion for Partial Reconsideration, but this time
he questioned the constitutionality of the last clause in the 5th
paragraph of Section 10 of RA 8042, which reads:

Sec. 10. Money Claims. x x x In case of termination of overseas
employment without just, valid or authorized cause as defined by law
or contract, the workers shall be entitled to the full reimbursement of
his placement fee with interest of twelve percent (12%) per annum,
plus his salaries for the unexpired portion of his employment contract
or for three (3) months for every year of the unexpired term,
whichever is less.

The NLRC denied the Motion; hence, Serrano filed a Petition
for Certiorari with the Court of Appeals (CA), reiterating the
constitutional challenge against the subject clause. The CA affirmed
the NLRC ruling on the reduction of the applicable salary rate, but
skirted the constitutional issue raised by herein petitioner Serrano.


Issue:
Whether or not it is in violation of Article III, Section 1 of
the 1987 Philippine Constitution.


Held:
YES, VIOLATIVE OF ARTICLE III SECTION 1 OF THE
PHILIPPINE CONSTITUTION. The Court concludes that the subject
clause contains a suspect classification in that, in the computation of
the monetary benefits of fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of one year or more in their contracts, but none on
the claims of other OFWs or local workers with fixed-term
employment. The subject clause singles out one classification of
OFWs and burdens it with a peculiar disadvantage. There being a
suspect classification involving a vulnerable sector protected by the
Constitution, the Court now subjects the classification to a strict
judicial scrutiny, and determines whether it serves a compelling state
interest through the least restrictive means. When the challenge to a
statute is premised on the perpetuation of prejudice against persons
favored by the Constitution with special protectionsuch as the
working class or a section thereofthe Court may recognize the
existence of a suspect classification and subject the same to a strict
judicial scrutiny.



























































4. From: Mr. Miranda

CLAUDIO S. YAP, petitioner
vs
THENAMARIS SHIPS MANAGEMENT
and INTERMARE MARITIME AGENCIES, INC., respondent

Facts
Claudio Yap was employed as an electrician of the vessel
M/T Seascout by Intermare on August 14 2001 in behalf of its
principal, Vulture Shipping Ltd. for a duration of 12 months. While
Yaps contract was still effective on November 8 2001, the ship was
sold for scrapping. The employees including Yap, were informed that
they had a choice whether to be transferred to other vessels or just go
home. Yap received seniority bonus, vacation bonus, extra bonus,
along with scrapping bonus, but with respect to the payment of his
wage, he refused to accept the payment of one-month basic wage,
insisting that he was entitled to the payment of the unexpired portion
of his contract because he was illegally dismissed. He also stated that
the opted for immediate transfer but none was made. Intermare and
Thenamaris alleged that Yaps employment contract was validly
terminated due to the sale of the vessel and no arrangement was
made for Yaps transfer to Thenamaris other vessels. Thus, Yap filed
with the Labor Arbiter a complaint for illegal dismissal with damages
and attorneys fees. The LA ruled in Yaps favor, finding that he was
constructively and illegally dismissed, and that Thenamaris and
Intermare were in bad faith when they assured Yap of re-embarkation.
It then stated that Yap was entitled to the unexpired portion of his
contract, which was a period of nine months. The NLRC affirmed the
LA s findings of constructive and illegal dismissal, and on the bad
faith on the part of Thenamaris and Intermare, but it held that instead
of an award of salaries corresponding to nine months, Yap was only
entitled to salaries for three months as provided under Section 10 of
RA 8042. Upon Yaps motion for partial reconsideration, the NLRC
modified its ruling, stating that Yap was indeed entitled to his salary
corresponding to the unexpired portion of his contract. The CA then
modified the NLRCs ruling, stating that Yap was only entitled to three
months worth of basic salary. While the case was pending on appeal
with the Supreme Court, the Supreme Court ruled on Serrano v.
Gallant Maritime Services that the clause or for three months for
every year of the expired term, whichever is less is unconstitutional.

Issue:
Whether or not Serrano ruling should be applied to the
present case.


Held:
YES. As a general rule, an unconstitutional act is not a law; it
confers no rights; it imposes no duties; it affords no protection; it
creates no office; it is inoperative as if it had not been passed at all.
The general rule is supported by Article 7 of the Civil Code, which
provides: Art. 7. Laws are repealed only by subsequent ones, and
their violation or non-observance shall not be excused by disuse or
practice to the contrary. The doctrine of operative fact serves as an
exception to the aforementioned general rule. It only applies as a
matter of equity and fair play. It nullifies the effects of an
unconstitutional law by recognizing that the existence of a statute prior
to a determination of unconstitutionality is an operative fact and may
have consequences which cannot always be ignored. The past cannot
always be erased by a new judicial declaration. This doctrine is
applicable when a declaration of unconstitutionality will impose an
undue burden on those who have relied on the invalid law. Following
Serrano, this case should not be included in the aforementioned
exception. After all, it was not the fault of Yap that he lost his job due
to an act of illegal dismissal committed by Thenamaris and Intermare.
To rule otherwise would be iniquitous to Yap and other OFWs, and
would, in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFW s security of
tenure which an employment contract embodies and actually profit
from such violation based on an unconstitutional provision of law. Yap
awarded salaries for the entire unexpired portion of his employment
contract consisting of nine months.
5. From: Ms. Roxas




































6. From: Ms. Roxas






























7. From: Ms. De Gracia

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC.
petitioner
vs
NLRC, respondent

Facts:
Petitioner, Sunace International Management Services, a
corporation duly organized and existing under the laws of the
Philippines, deployed to Taiwan Divina A. Montehermozo as a
domestic helper under a 12-month contract effective February 1,
1997. The deployment was with the assistance of a Taiwanese
broker, Edmund Wang, President of Jet Crown International Co., Ltd.

After her 12-month contract expired on February 1, 1998,
Divina continued working for her Taiwanese employer, Hang Rui
Xiong, for two more years, after which she returned to the Philippines
on February 4, 2000.

On February 14, 2000, Divina filed a complaint before the
NLRC against Sunace, one Adelaide Perez, the Taiwanese broker,
and the employer-foreign principal alleging that she was jailed for
three months and that she was underpaid.

Sunace, by its Proprietor/General Manager Maria Luisa Olarte,
filed its Verified Answer and Position Paper, claiming as follows,
quoted verbatim:
COMPLAINANT IS NOT ENTITLED FOR THE REFUND OF HER 24
MONTHS SAVINS

Complainant could not anymore claim nor entitled for the
refund of her 24 months savings as she already took back her saving
already last year and the employer did not deduct any money from her
salary, in accordance with a Fascimile Message from the respondent
SUNACEs employer, Jet Crown International Co. Ltd.,

Reacting to Divinas Position Paper, Sunace filed an answer to
complainants position paper alleging that Divinas 2-year extension of
her contract was without its knowledge and consent, hence, it had no
liability attaching to any claim arising therefrom, and Divina in fact
executed a Waiver/Quitclaim and Release of Responsibility and an
Affidavit of Desistance.

Labor Arbiter: decided in favor of Divina, rejected Sunaces
claim that the extension of Divinas contract for two more years was
without its knowledge and consent in this wise. Sunace and Edmund
Wang have not stopped communicating with each other and yet the
matter of the contracts extension and Sunaces alleged non-consent
thereto has not been categorically established. Also rejected Sunaces
argument that it is not liable on account of Divinas execution of a
Waiver and Quitclaim and an Affidavit of Desistance. Observed the
Labor Arbiter: Should the parties arrive at any agreement as to the
whole or any part of the dispute, the same shall be reduced to writing
and signed by the parties and their respective counsels, if any, before
the Labor Arbiter. The settlement shall be approved by the Labor
Arbiter after being satisfied that it was voluntarily entered into by the
parties and after having explained to them the terms and
consequences thereof.
NLRC: affirmed the Labor Arbiters decision.
Court of Appeals: petition for certiorari faces outright dismissal.
The petition failed to allege facts constitutive of grave abuse of
discretion on the part of the public respondent amounting to lack of
jurisdiction when the NLRC affirmed the Labor Arbiters. Subsequently
denied also the Motion for reconsideration.




Issue:
Whether or not the 2-year extension of Montehermozos
employment was made with the knowledge and consent of
Sunace.


Held:
NO. There is an implied revocation of an agency relationship
when after the termination of the original employment contract, the
foreign principal directly negotiated with the employee and entered
into a new and separate employment contract.

Contrary to the Court of Appeals finding, the alleged
continuous communication was with the Taiwanese broker Wang, not
with the foreign employer.

The February 21, 2000 telefax message from the Taiwanese broker to
Sunace, the only basis of a finding of continuous communication,
reads verbatim:
x x x x
Regarding to Divina, she did not say anything about her saving
in police station. As we contact with her employer, she took
back her saving already last years. And they did not deduct
any money from her salary. Or she will call back her employer
to check it again. If her employer said yes! we will get it back
for her.

Thank you and best regards.
(Sgd.)
Edmund Wang
President
19


The finding of the Court of Appeals solely on the basis of the
telefax message written by Wang to Sunace, that Sunace continually
communicated with the foreign "principal" (sic) and therefore was
aware of and had consented to the execution of the extension of the
contract is misplaced. The message does not provide evidence that
Sunace was privy to the new contract executed after the expiration on
February 1, 1998 of the original contract. That Sunace and the
Taiwanese broker communicated regarding Montehermozos
allegedly withheld savings does not necessarily mean that Sunace
ratified the extension of the contract.

As can be seen from that letter communication, it was just an
information given to Sunace that Montehermozo had taken already
her savings from her foreign employer and that no deduction was
made on her salary. It contains nothing about the extension or
Sunaces consent thereto.

Parenthetically, since the telefax message is dated February
21, 2000, it is safe to assume that it was sent to enlighten Sunace
who had been directed, by Summons issued on February 15, 2000, to
appear on February 28, 2000 for a mandatory conference following
Montehermozos filing of the complaint on February 14, 2000.

Respecting the decision of Court of Appeals following as agent
of its foreign principal, [Sunace] cannot profess ignorance of such an
extension as obviously, the act of its principal extending
[Montehermozos] employment contract necessarily bound it, it too is
a misapplication, a misapplication of the theory of imputed
knowledge.

The theory of imputed knowledge ascribes the knowledge of
the agent, Sunace, to the principal, employer, not the other way
around. The knowledge of the principal-foreign employer cannot,
therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and
consented to be bound under the 2-year employment contract
extension, it cannot be said to be privy thereto. As such, it and its
"owner" cannot be held solidarily liable for any of Montehermozos
claims arising from the 2-year employment extension. As the New
Civil Code provides, Contracts take effect only between the parties,
their assigns, and heirs, except in case where the rights and
obligations arising from the contract are not transmissible by their
nature, or by stipulation or by provision of law. Furthermore, as
Sunace correctly points out, there was an implied revocation of its
agency relationship with its foreign principal when, after the
termination of the original employment contract, the foreign principal
directly negotiated with Montehermozo and entered into a new and
separate employment contract in Taiwan. Article 1924 of the New Civil
Code states that the agency is revoked if the principal directly
manages the business entrusted to the agent, dealing directly with
third persons.

The petition is GRANTED. The challenged resolutions of the
Court of Appeals are REVERSED and SET ASIDE. The complaint of
Divina A. Montehermozo against petitioner is DISMISSED.






























8. From: Ms. De Gracia

MAKATI HABERDASHERY, INC., petitioner
vs
NLRC, respondent

Facts:
Individual complainants, private respondents herein, have
been working for petitioner Makati Haberdashery, Inc. as tailors,
seamstress, sewers, basters (manlililip) and "plantsadoras". They are
paid on a piece-rate basis except Maria Angeles and Leonila Serafina
who are paid on a monthly basis. In addition to their piece-rate, they
are given a daily allowance of three pesos provided they report for
work before 9:30 a.m. every day. Private respondents are required to
work from or before 9:30 a.m. up to 6:00 or 7:00 p.m. from Monday to
Saturday and during peak periods even on Sundays and holidays.

The Sandigan ng Manggagawang Pilipino, a labor
organization of the respondent workers, filed a complaint for (a)
underpayment of the basic wage; (b) underpayment of living
allowance; (c) non-payment of overtime work; (d) non-payment of
holiday pay; (e) non-payment of service incentive pay; (f) 13th month
pay; and (g) benefits provided for under Wage Orders
During the pendency of the case, private respondent Dioscoro
Pelobello left with Salvador Rivera, a salesman of petitioner
Haberdashery, an open package which was discovered to contain a
"jusi" barong tagalog. When confronted, Pelobello replied that the
same was ordered by respondent Casimiro Zapata for his customer.
Zapata allegedly admitted that he copied the design of petitioner
Haberdashery. But in the afternoon, when again questioned about
said barong, Pelobello and Zapata denied ownership of the same.
Consequently a memorandum was issued to each of them to
explain why no action should be taken against them for accepting a
job order which is prejudicial and in direct competition with the
business of the company. Both respondents allegedly did not submit
their explanation and did not report for work. Hence, they were
dismissed by petitioners. They countered by filing a complaint for
illegal dismissal.
Labor Arbiter: rendered judgment, finding respondents guilty of
illegal dismissal and ordering them to reinstate Dioscoro Pelobello
and Casimiro Zapata to their respective or similar positions without
loss of seniority rights, with full backwages. The charge of unfair labor
practice is dismissed for lack of merit. the complainants' claims for
underpayment re violation of the minimum wage law is hereby
ordered dismissed for lack of merit. Respondents are hereby found to
have violated the decrees on the cost of living allowance, service
incentive leave pay and the 13th Month Pay.
NLRC: affirmed the decision of LA but limited the backwages
awarded to Dioscoro Pelobello and Casimiro Zapata to only 1 year.
Motion for reconsideration was denied.

Issue:
Whether or not the employees paid on piece-rate basis are
entitled to service incentive pay.


Held:
On the other hand, while private respondents are entitled to
Minimum Wage, COLA and 13th Month Pay, they are not entitled to
service incentive leave pay because as piece-rate workers being paid
at a fixed amount for performing work irrespective of time consumed
in the performance thereof, they fall under one of the exceptions
stated in Section 1(d), Rule V, Implementing Regulations, Book III,
Labor Code. For the same reason private respondents cannot also
claim holiday pay (Section 1(e), Rule IV, Implementing Regulations,
Book III, Labor Code).

Service Incentive Leave SECTION 1. Coverage.
This rule shall apply to all employees except:
(d) Field personnel and other employees whoseperformance is unsup
ervised by the employer includingthose who are engaged on task or
contract basis, purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time consumed in the
performance thereof .

Employer-Employee Relationship; Four-Fold Test of
Employer-Employee Relationship; Control Test, Defined.We have
repeatedly held in countless decisions that the test of employer-
employee relationship is four-fold: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employees conduct. It is
the so-called control test that is the most important element. This
simply means the determination of whether the employer controls or
has reserved the right to control the employee not only as to the result
of the work but also as to the means and method by which the same
is to be accomplished.

Dismissal of Employees; An employer has the right to dismiss
an employee whose continuance in the service is inimical to the
employers interest.Assuming that such acts do not constitute
abandonment of their jobs as insisted by private respondents, their
blatant disregard of their employers memorandum is undoubtedly an
open defiance to the lawful orders of the latter, a justifiable ground for
termination of employment by the employer expressly provided for in
Article 283(a) of the Labor Code as well as a clear indication of guilt
for the commission of acts inimical to the interests of the employer,
another justifiable ground for dismissal under the same Article of the
Labor Code, paragraph (c). Well established in our jurisprudence is
the right of an employer to dismiss an employee whose continuance
in the service is inimical to the employers interest.

Right to dismiss for just and valid cause pertains in the first
place to the employer.Finally, it has been established that the right
to dismiss or otherwise impose disciplinary sanctions upon an
employee for just and valid cause, pertains in the first place to the
employer, as well as the authority to determine the existence of said
cause in accordance with the norms of due process. There is no
evidence that the employer violated said norms. On the contrary,
private respondents who vigorously insist on the existence of
employer-employee relationship, because of the supervision and
control of their employer over them, were the very ones who exhibited
their lack of respect and regard for their employers rules.































9. From: Ms. Alota

LABOR CONGRESS OF THE PHILIPPINES (LPC), petitioner
vs
NLRC, respondent

Facts:
Petitioners seek to reverse the 29 March 1995 resolution of
the National Labor Relations Commission (NLRC) in NLRC RAB III
Case No. 01-1964-91 which affirmed the Decision of Labor Arbiter
Ariel C. Santos dismissing their complaint for utter lack of merit.

The 99 persons named as petitioners in this proceeding were
rank-and-file employees of respondent Empire Food Products

Petitioners filed against private respondents a complaint for
payment of money claim[s] and for violation of labor standard[s] laws.
They also filed a petition for direct certification of petitioner Labor
Congress of the Philippines as their bargaining representative.

On October 23, 1990, petitioners represented by LCP President
Benigno B. Navarro, Sr. and private respondents Gonzalo Kehyeng
and Evelyn Kehyeng in behalf of Empire Food Products, Inc. entered
into a Memorandum of Agreement

In an Order dated October 24, 1990, Mediator Arbiter Antonio Cortez
approved the memorandum of agreement and certified LCP as the
sole and exclusive bargaining agent among the rank-and-file
employees of Empire Food Products for purposes of collective
bargaining with respect to wages, hours of work and other terms and
conditions of employment

On January 23, 1991, petitioners filed a complaint docketed as
against private respondents for:
a. Unfair Labor Practice by way of Illegal Lockout and/or
Dismissal;
b. Union busting thru Harassments [sic], threats, and
interfering with the rights of employees to self-
organization;
c. Violation of the Memorandum of Agreement dated
October 23, 1990;
d. Underpayment of Wages in violation of R.A. No. 6640
and R.A. No. 6727, such as Wages promulgated by the
Regional Wage Board;
e. Actual, Moral and Exemplary Damages.

Labor Arbiter Ariel C. Santos absolved private respondents of the
charges of unfair labor practice, union busting, violation of the
memorandum of agreement, underpayment of wages and denied
petitioners prayer for actual, moral and exemplary damages. Labor
Arbiter Santos, however, directed the reinstatement of the individual
complainants

On appeal, the National Labor Relations Commission vacated the
Decision dated April 14, 1972 [sic] and remanded the case to the
Labor Arbiter for further proceedings

The NLRC, in its Resolution dated 29 March 1995, affirmed in toto the
decision of Labor Arbiter Santos. In so doing, the NLRC sustained
the Labor Arbiters findings that:
(a) there was a dearth of evidence to prove the existence of
unfair labor practice and union busting on the part of private
respondents;
(b) the agreement of 23 October 1990 could not be made
the basis of an obligation within the ambit of the NLRCs
jurisdiction, as the provisions thereof, particularly Section 2,
spoke of a resolutory condition which could or could not
happen;
(c) the claims for underpayment of wages were without
basis as complainants were admittedly pakiao workers
and paid on the basis of their output subject to the lone
limitation that the payment conformed to the minimum wage
rate for an eight-hour workday; and
(d) petitioners were not underpaid.


Issue:
Whether or not the petitioners are considered as pakiao
workers and paid on the basis of their output hence they cannot
claim for the underpayment of wages.


Held:
The amount of back wages to which each petitioner is entitled,
however, cannot be fully settled at this time. Petitioners, as piece-rate
workers having been paid by the piece, there is need to determine the
varying degrees of production and days worked by each
worker. Clearly, this issue is best left to the National Labor Relations
Commission.
As to the other benefits, namely, holiday pay, premium pay,
13
th
month pay and service incentive leave which the labor arbiter
failed to rule on but which petitioners prayed for in their complaint, we
hold that petitioners are so entitled to these benefits. Three (3)
factors lead us to conclude that petitioners, although piece-rate
workers, were regular employees of private respondents. First, as to
the nature of petitioners tasks, their job of repacking snack food was
necessary or desirable in the usual business of private respondents,
who were engaged in the manufacture and selling of such food
products; second, petitioners worked for private respondents
throughout the year, their employment not having been dependent on
a specific project or season; and third, the length of time that
petitioners worked for private respondents. Thus, while petitioners
mode of compensation was on a per piece basis, the status and
nature of their employment was that of regular employees.
The Rules Implementing the Labor Code exclude certain
employees from receiving benefits such as nighttime pay, holiday pay,
service incentive leave and 13th month pay, inter alia, field personnel
and other employees whose time and performance is unsupervised by
the employer, including those who are engaged on task or contract
basis, purely commission basis, or those who are paid a fixed amount
for performing work irrespective of the time consumed in the
performance thereof. Plainly, petitioners as piece-rate workers do
not fall within this group. As mentioned earlier, not only did petitioners
labor under the control of private respondents as their employer,
likewise did petitioners toil throughout the year with the fulfillment of
their quota as supposed basis for compensation.
In Section 8 (b), Rule IV, Book III which we quote hereunder,
piece workers are specifically mentioned as being entitled to holiday
pay.
SEC. 8. Holiday pay of certain employees.-
(b) Where a covered employee is paid by results or output, such
as payment on piece work, his holiday pay shall not be less than his
average daily earnings for the last seven (7) actual working days
preceding the regular holiday: Provided, however, that in no case
shall the holiday pay be less than the applicable statutory minimum
wage rate.
In addition, the Revised Guidelines on the Implementation of the
13
th
Month Pay Law, in view of the modifications to P.D. No. 851 by
Memorandum Order No. 28, clearly exclude the employer of piece
rate workers from those exempted from paying 13
th
month pay, to wit:
2. EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851:
d. Employers of those who are paid on purely commission,
boundary or task basis, and those who are paid a fixed amount
for performing specific work, irrespective of the time consumed in
the performance thereof, except where the workers are paid on
piece-rate basis in which case the employer shall grant the
required 13th month pay to such workers. (italics supplied)
The Revised Guidelines as well as the Rules and Regulations
identify those workers who fall under the piece-rate category as those
who are paid a standard amount for every piece or unit of work
produced that is more or less regularly replicated, without regard to
the time spent in producing the same.
As to overtime pay, the rules, however, are different. According
to Sec. 2(e), Rule I, Book III of the Implementing Rules, workers who
are paid by results including those who are paid on piece-
work, takay, pakiao, or task basis, if their output rates are in
accordance with the standards prescribed under Sec. 8, Rule VII,
Book III, of these regulations, or where such rates have been fixed by
the Secretary of Labor in accordance with the aforesaid section, are
not entitled to receive overtime pay. Here, private respondents did
not allege adherence to the standards set forth in Sec. 8 nor with the
rates prescribed by the Secretary of Labor. As such, petitioners are
beyond the ambit of exempted persons and are therefore entitled to
overtime pay. Once more, the National Labor Relations Commission
would be in a better position to determine the exact amounts owed
petitioners, if any.





















































10. From: Ms. Alota

AVELINO LAMBO, petitioner
vs
NLRC, respondent

Facts:
This is a petition for certiorari to set aside the decision of the
National Labor Relations Commission (NLRC) which reversed the
awards made by the Labor Arbiter in favor of petitioners, except one
for P4,992.00 to each, representing 13th month pay.

Petitioners Avelino Lambo and Vicente Belocura were
employed as tailors by private respondents J.C. Tailor Shop and/or
Johnny Co on September 10, 1985 and March 3, 1985,
respectively. They worked from 8:00 a.m. to 7:00 p.m. daily, including
Sundays and holidays. As in the case of the other 100 employees of
private respondents, petitioners were paid on a piece-work basis,
according to the style of suits they made. Regardless of the number
of pieces they finished in a day, they were each given a daily pay of at
least P64.00.

On January 17, 1989, petitioners filed a complaint against
private respondents for illegal dismissal and sought recovery of
overtime pay, holiday pay, premium pay on holiday and rest day,
service incentive leave pay, separation pay, 13th month pay, and
attorneys fees.

Labor Arbiter Jose G. Gutierrez found private respondents
guilty of illegal dismissal and accordingly ordered them to pay
petitioners claims.

On appeal by private respondents, the NLRC reversed the
decision of the Labor Arbiter. It found that petitioners had not been
dismissed from employment but merely threatened with a closure of
the business if they insisted on their demand for a straight payment
of their minimum wage, after petitioners, on January 17, 1989,
walked out of a meeting with private respondents and other
employees. According to the NLRC, during that meeting, the
employees voted to maintain the company policy of paying them
according to the volume of work finished at the rate of P18.00 per
dozen of tailored clothing materials. Only petitioners allegedly
insisted that they be paid the minimum wage and other benefits. The
NLRC held petitioners guilty of abandonment of work and accordingly
dismissed their claims except that for 13th month pay.

Petitioners allege that they were dismissed by private
respondents as they were about to file a petition with the Department
of Labor and Employment (DOLE) for the payment of benefits such as
Social Security System (SSS) coverage, sick leave and vacation
leave. They deny that they abandoned their work.


Issue:
Whether or not petitioners are workers paid by results
hence they are not covered by the minimum wage and other
benefits.


Held:
There is no dispute that petitioners were employees of private
respondents although they were paid not on the basis of time spent
on the job but according to the quantity and the quality of work
produced by them. There are two categories of employees paid by
results: (1) those whose time and performance are supervised by the
employer. (Here, there is an element of control and supervision over
the manner as to how the work is to be performed. A piece-rate
worker belongs to this category especially if he performs his work in
the company premises.); and (2) those whose time and performance
are unsupervised. (Here, the employers control is over the result of
the work. Workers on pakyao and takay basis belong to this
group.) Both classes of workers are paid per unit
accomplished. Piece-rate payment is generally practiced in garment
factories where work is done in the company premises, while payment
on pakyao and takay basis is commonly observed in the agricultural
industry, such as in sugar plantations where the work is performed in
bulk or in volumes difficult to quantify. Petitioners belong to the first
category, i.e., supervised employees.

In determining the existence of an employer-employee
relationship, the following elements must be considered: (1) the
selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the
employees conduct. Of these elements, the most important criterion
is whether the employer controls or has reserved the right to control
the employee not only as to the result of the work but also as to the
means and methods by which the result is to be accomplished.

In this case, private respondents exercised control over the
work of petitioners. As tailors, petitioners worked in the companys
premises from 8:00 a.m. to 7:00 p.m. daily, including Sundays and
holidays. The mere fact that they were paid on a piece-rate basis
does not negate their status as regular employees of private
respondents. The term wage is broadly defined in Art. 97 of the
Labor Code as remuneration or earnings, capable of being expressed
in terms of money whether fixed or ascertained on a time, task, piece
or commission basis. Payment by the piece is just a method of
compensation and does not define the essence of the relations. Nor
does the fact that petitioners are not covered by the SSS affect the
employer-employee relationship.

Indeed, the following factors show that petitioners, although
piece-rate workers, were regular employees of private
respondents: (1) within the contemplation of Art. 280 of the Labor
Code, their work as tailors was necessary or desirable in the usual
business of private respondents, which is engaged in the tailoring
business; (2) petitioners worked for private respondents throughout
the year, their employment not being dependent on a specific project
or season; and, (3) petitioners worked for private respondents for
more than one year.

The Labor Arbiter awarded backwages, overtime pay, holiday
pay, 13th month pay, separation pay and attorneys fees,
corresponding to 10% of the total monetary awards, in favor of
petitioners.

As petitioners were illegally dismissed, they are entitled to
reinstatement with backwages. Considering that petitioners were
dismissed from the service on January 17, 1989, i.e., prior to March
21, 1989, the Labor Arbiter correctly applied the rule in the Mercury
Drug case, according to which the recovery of backwages should be
limited to three years without qualifications or deductions. Any award
in excess of three years is null and void as to the excess.

The Labor Arbiter correctly ordered private respondents to
give separation pay. Considerable time has lapsed since petitioners
dismissal, so that reinstatement would now be impractical and hardly
in the best interest of the parties. In lieu of reinstatement, separation
pay should be awarded to petitioners at the rate of one month salary
for every year of service, with a fraction of at least six (6) months of
service being considered as one (1) year.

The awards for overtime pay, holiday pay and 13th month pay
are in accordance with our finding that petitioners are regular
employees, although paid on a piece-rate basis.













11. From: Ms. Talay
AUTOBUS TRANSPORT SYSTEM, INC., petitioner
vs
ANTONIO BAUTISTA, respondent

Facts:
Since 24 May 1995, respondent Antonio Bautista has been
employed by Autobus Transport Systems Inc. as driver- conductor
with travel routes Manila- Tuguegarao via Baguio, Baguio-
Tuguegarao via Manila and Manila- Tabuk via Baguio. Antonio was
paid on commission basis, 7% of the total gross income per travel, on
a twice a month basis. In January 2000, while he was driving his bus
he bumped another bus owned by Autobus. He claimed that he
accidentally bumped the bus as he was so tired and that he has not
slept for more than 24 hours because Autobus required him to return
to Isabela immediately after arriving at Manila. Damages were
computed and 30% or 75,551.50 pesos of it was being charged to
Bautista. Bautista refused payment. After a month, management sent
him a letter of termination. Autobus terminated Bautista after due
hearing as part of Autobus management prerogative. Bautista sued
Autobus for illegal dismissal with money claims for non-payment of
13
th
month pay and service incentive leave. Labor Arbiter Tabingan
found that the complaint for illegal dismissal has no leg to stand on
but ruled that Autobus is liable to pay Bautista his 13
th
month pay and
his service incentive leave pay. Petitioner appealed the decision to the
National Labor Relations Commission which rendered its decision
deleting the award of 13
th
month pay and that the award of service
incentive leave pay was maintained. Petitioner argued that
respondent is a field personnel not entitled to the grant of service
incentive leave because he was paid only on purely commission
basis. Not satisfied again with the ruling of the NLRC, petitioner
sought the review of said decision with the Court of Appeals which
was subsequently denied by the appellate court and affirmed the
decision of the NLRC.

Issue:
Whether or not Bautista is entitled to service incentive
leave pay.


Held:
The Supreme Court ruled that Bautista is entitled to service
incentive leave pay. Article 95 of the Labor Code states that every
employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay. Book
III, Rule V of the Implementing Rules and Regulation of the said
service incentive leave however provides a list of employees who are
not entitled to the grant of service incentive leave and one of which is
those field personnel and other employees whose performance is
unsupervised by the employer including those who are engaged on a
task or contract basis, purely commission basis, or those who are paid
in a fixed amount for performing work irrespective of the time
consumed in the performance thereof. Petitioners contention that
respondent is not entitled to service intensive leave pay just because
he was paid in purely commission basis is misplaced. The court ruled
that Bautista is not field personnel as contemplated by the labor code.
In order to conclude whether an employee is a field employee, it is
also necessary to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer. Citing the
decision of the Labor Arbiter concurred on by the Court of Appeals the
Supreme Court ruled that it is of judicial notice that along the routes
that are plied by these bus companies there are its inspectors
assigned at strategic places who board the bus and inspect the
passengers, the punched tickets, and the conductors reports. There is
also a mandatory once a week can barn or sheep day where the bus
is regularly checked as to its mechanical, electrical and hydraulic
aspects. They too, must be at specific place as specified time as they
generally observed prompt departure and arrival from their point of
origin to their point of destination. In each and every depot there is
always the dispatcher whose function is precisely to see to it that the
bus and its crew leave the premises at specific time and arrived at the
estimated proper time .The driver was therefore under constant
supervision while in the performance of this work. He cannot be
considered field personnel.






















































12. From: Ms. Talay
UNION OF FILIPRO EMPLOYEES., petitioner
vs
NLRC and NESTLE PHILIPPINES., respondent

Facts:
Members of the Union of Filipino Employees composed of
salesman, sales representatives, truck drivers, merchandisers and
medical representatives working under Nestle Philippines contest that
they are not considered field personnel and as such, they are entitled
to holiday pay. Union of Filipro Employees argued that they are not
field personnel because their field work starts at 8:00am after having
reported to the office and come back to the office at 4:00pm or
4:30pm. They maintained that the period between 8:00am to 4:00pm
or 4:30pm comprises the sales personnels working hours which can
be determined with reasonable certainty. However Arbitrator Vivar
rendered its decision denying such sales representatives, truck
drivers, merchandisers, and medical representatives to holiday pay.

Issue:
Whether or not Nestles sales personnel are entitled to
holiday pay.


Held:
The Supreme Court ruled that Nestles sales personnel are not
entitled to holiday pay for they are considered field personnel. Article
82 of the Labor Code states that field personnel shall refer to non-
agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and
whose actual hours of work cannot be determined with reasonable
certainty. The law requires that the actual hours of work in the field be
reasonably ascertained. The company has no way of determining
whether or not these sales personnel, even if they report to office
before 8:00am prior to the field work and come back at 4:30pm, really
spend the hours in between in actual field of work. The requirement
for the salesman and other similarly situated employees to report for
work at 8:00am and return at 4:00pm or 4:30pm is not within the
realm of work in the field as defined in the code but an exercise of
purely management prerogative of providing administrative control
over such personnel.































13. From: Ms. Salvador

MERCIDAR FISHING CORPORATION, petitioner
vs
NLRC, respondent

Facts:
Petition for certiorari to set aside the decision, dated August
30, 1993, of the National Labor Relations Commission
dismissing the appeal of petitioner Mercidar Fishing
Corporation from the decision of the Labor Arbiter in NLRC
NCR as well as the resolution dated of the NLRC denying
reconsideration.
This case originated from a complaint filed on September 20,
1990 by private respondent Fermin Agao, Jr. against petitioner
for illegal dismissal, violation of P.D. No. 851, and non-
payment of five days service incentive leave for 1990.
Fermin Agao, Jr., private respondent had been employed as a
bodegero or ships quartermaster on February 12, 1988.
Fermin Agao alleged that due to sickness, he was allowed to
go on leave without pay for one month but when he reported
back to work after such period with a health clearance he was
told to come back another time as he could not be reinstated
immediately.
When he was not given any job, Fermin Agao asked for a
certificate of employment but petitioner refused to issue the
certificate unless he submitted his resignation. Since private
respondent refused to submit such letter unless he was given
separation pay, petitioner prevented him from entering the
premises.
Petitioner, on the other hand, alleged that it was private
respondent who actually abandoned his work. It claimed that
the latter failed to report for work after his leave had expired
and was, in fact, absent without leave for three months.
Petitioner further claims that, nonetheless, it assigned private
respondent to another vessel, but the latter was left behind on
September 1, 1990. Thereafter, private respondent asked for
a certificate of employment on September 6 on the pretext that
he was applying to another fishing company. On September
10, 1990, he refused to get the certificate and resign unless he
was given separation pay
February 18, 1992, Labor Arbiter Arthur L. Amansec rendered
a decision in favour of the private respondent granting him
reinstatement with backwages, pay him his 13th month pay
and incentive leave pay for 1990
Petitioner appealed to the NLRC which, on August 30, 1993,
dismissed the appeal for lack of merit. The NLRC dismissed
petitioners claim that it cannot be held liable for service
incentive leave pay by fishermen in its employ as the latter
supposedly are field personnel and thus not entitled to such
pay under the Labor Code


Issue:
Whether or not private respondent Fermin Agao can be
considered as field personnel as provided in the Labor Code of
the Philippines, as amended which will entitle him for service
incentive leave pay?


Held:
The petition has no merit.
ART. 82. Coverage. - The provisions of this Title [Working
Conditions and Rest Periods] shall apply to employees in all
establishments and undertakings whether for profit or not, but
not to government employees, field personnel, members of the
family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another,
and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.
. . . . . . . . . .
Field personnel shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual
hours of work in the field cannot be determined with
reasonable certainty.
Union of Filipro Employees (UFE) v. Vicar
Court explained the meaning of the phrase whose actual
hours of work in the field cannot be determined with
reasonable certainty in Art. 82 of the Labor Code, as follows:
Moreover, the requirement that actual hours of work in
the field cannot be determined with reasonable certainty
must be read in conjunction with Rule IV, Book III of the
Implementing Rules which provides:
Rule IV Holidays with Pay
Section 1. Coverage - This rule shall apply to all
employees except:
. . .
(e) Field personnel and other employees whose
time and performance is unsupervised by the
employer xxx (Italics supplied)
While contending that such rule added another element
not found in the law (Rollo, p. 13), the petitioner
nevertheless attempted to show that its affected members
are not covered by the abovementioned rule. The
petitioner asserts that the companys sales personnel are
strictly supervised as shown by the SOD (Supervisor of
the Day) schedule and the company circular dated March
15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).
Contrary to the contention of the petitioner, the Court
finds that the aforementioned rule did not add another
element to the Labor Code definition of field
personnel. The clause whose time and performance is
unsupervised by the employer did not amplify but merely
interpreted and expounded the clause whose actual
hours of work in the field cannot be determined with
reasonable certainty. The former clause is still within the
scope and purview of Article 82 which defines field
personnel. Hence, in deciding whether or not an
employees actual working hours in the field can be
determined with reasonable certainty, query must be
made as to whether or not such employees time and
performance is constantly supervised by the employer.
In contrast, in the case at bar, during the entire course of
their fishing voyage, fishermen employed by petitioner
have no choice but to remain on board its
vessel. Although they perform non-agricultural work away
from petitioners business offices, the fact remains
that throughout the duration of their work they are under
the effective control and supervision of petitioner through
the vessels patron or master as the NLRC correctly held





















14. From: Ms. Salvador

ROQUE DUTERTE, petitioner
vs
KINGSWOOD TRADING CO., INC., respondent

Facts:
Petitioner Roque S. Duterte seeks the review and setting aside
of the decisionof the Court of Appeals (CA) in CA-G.R. SP No.
71729, as reiterated in its resolution affirming an earlier
resolution of the National Labor Relations Commission (NLRC)
which ruled that petitioner was not illegally dismissed from
employment due to disease under Article 284 of the Labor
Code.
In September 1993, petitioner was hired as truck/trailer driver
by respondent Kingswood Trading Company, Inc. (KTC) of
which co-respondent Filemon Lim is the President.
Petitioner was on the 6:00 a.m. 6:00 p.m. shift. He averaged
21 trips per month, getting P700 per trip. When not driving,
petitioner was assigned to clean and maintain respondent
KTCs equipment and vehicles for which he was paid P125 per
day. Regularly, petitioner would be seconded by respondent
Filemon Lim to drive for one of KTCs clients, the Philippine
National Oil Corporation, but always subject to respondents
convenience.
Petitioner, Roque Duterte, suffered two heart attacks. On his
first heart attack he was confined for two weeks at the
Philippine Heart Center (PHC). This was confirmed by
respondent KTC which admitted that petitioner was declared
on sick leave with corresponding notification. Then petitioner
suffered a second heart attack and was again confined at the
PHC. Upon release, he stayed home and spent time to
recuperate.
Petitioner attempted to report back to work but was told to look
for another job because he was unfit. Respondents refused to
declare petitioner fit to work unless physically examined by the
company physician. Respondents promise to pay petitioner
his separation pay turned out to be an empty one. Instead,
petitioner was presented, for his signature, a document as
proof of his receipt of the amount of P14,375.00 as first
installment of his Social Security System (SSS) benefits.
Having received no such amount, petitioner refused to affix his
signature thereon and instead requested for the necessary
documents from respondents to enable him to claim his SSS
benefits, but the latter did not heed his request.
November 11, 1999, petitioner filed against his employer a
complaint for illegal dismissal and damages.
In a decision dated September 26, 2000, the labor arbiter
found for the petitioner. However, while categorically declaring
that petitioners dismissal was illegal, the labor arbiter, instead
of applying Article 279 of the Labor Code on illegal dismissals,
applied Article 284 on Disease as ground for termination on
the rationale that since the respondents admitted that
petitioner could not be allowed back to work because of the
latters disease, the case fell within the ambit of Article 284
The NLRC, in its Resolution of April 24, 2002, set aside the
labor arbiters decision, ruling that Article 284 of the Labor
Code has no application to this case, there being no illegal
dismissal to speak of. The NLRC accordingly dismissed
petitioners complaint for illegal dismissal.
The CA upheld the NLRC Resolution, saying that the
Commission committed no grave abuse of discretion in holding
that petitioner was not illegally dismissed and could not be
granted any relief. With his motion for a reconsideration having
been denied by the CA in its resolution of October 5, 2003,
petitioner is now with this Court via the present recourse.


Issue:
Whether or not Roque Duterte can be considered as field
personnel and therefore cannot avail of the holiday pay and
service incentive leave pay.

Whether or not Art. 284 on disease as ground for
termination is the basis for the illegal dismissal or Art. 279.

Whether or not there was illegal dismissal.


Ruling:
The Court notes that the NLRC, as sustained by the CA,
considered the petitioner as a field worker and, on that basis,
denied his claim for benefits under Articles 94 to 95 of the
Labor Code, such as holiday pay and service incentive leave
pay. Article 82 of the Code lists personnel who are not entitled
to the benefits aforementioned. Among the excluded group are
field personnel, referring to non-
agricultural employees who regularly perform their duties
away from the principal place of business or branch office of
the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty.
As a general proposition, field personnel are those whose
job/service are not or cannot be effectively monitored by the
employer
or his representative, their workplace being away from the
principal office and whose hours and days of work cannot be
determined with reasonable certainty. Field personnel are paid
specific amount for rendering specific service or performing
specific work.
If required to be at specific places at specific times,
employees, including drivers, cannot be said to be field
personnel despite the fact that they are performing work away
from the principal office of the employer. Thus, to determine
whether an employee is a field employee, it is also necessary
to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer. In so
doing, an inquiry must be made as to whether or not the
employees time and performance are constantly supervised
by the employer
Petitioner was definitely a regular employee of respondent
company and not its field personnel, as the term is used in the
Labor Code. As it were, he was based at the principal office of
the respondent company. His actual work
hours, i.e., from 6:00 a.m. to 6:00 p.m.,
were ascertainable with reasonable certainty. He
averaged 21 trips per month. And if not driving for the
company, he was paid P125.00 per day for cleaning and
maintaining KTCs equipment. Not falling under the category of
field personnel, petitioner is consequently entitled to both
holiday pay and service incentive leave pay, as mandated by
Articles 94 and 95 of the Labor Code.
To both the NLRC and the CA, a dismissal on the ground of
disease under Article 284 of the Code is illegal only if
the employee himself presents the required certification from
the proper health authority. Since, as in this case, petitioner
failed to produce such certification, his dismissal could not be
illegal. The Court disagrees with the NLRC and CA.
Article 284 of the Labor Code explicitly provides:
o Art. 284. DISEASE AS GROUND FOR
TERMINATION. -- An employer may terminate the
services of an employee who has been found to be
suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his
health as well as to the health of his co-
employees: Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-
half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6)
months being considered as one (1) whole year.
Corollarily, in order to validly terminate employment on the
basis of disease, Book VI, Rule I, Section 8 of the Omnibus
Implementing Rules of the Labor Code requires:
Disease as a ground for dismissal. -- Where the
employee suffers from a disease and his continued
employment is prohibited by law or prejudicial to his
health or to the health of his co-employees, the
employer shall not terminate his employment unless
there is a certification by a competent public health
authority that the disease is of such nature or at such
a stage that it cannot be cured within a period of six
(6) months even with proper medical treatment. If the
disease or ailment can be cured within the period, the
employer shall not terminate the employee but shall
ask the employee to take a leave. The employer shall
reinstate such employee to his former position
immediately upon the restoration of his normal health.
(Book VI, Rule 1, Sec. 8 of the Implementing Rules)
Triple Eight Integrated Services, Inc. v. NLRC
The Court explains why the submission of the requisite
medical certificate is for the employers compliance, thus:
The requirement for a medical certificate under Article 284 of
the Labor Code cannot be dispensed with; otherwise, it would
sanction the unilateral and arbitrary determination by the
employer of the gravity or extent of the employees illness and
thus defeat the public policy on the protection of labor.
In thus ruling out an illegal dismissal situation in the instant
case, the CA effectively agreed with the NLRCs view that the
fact of dismissal must be evidenced by positive and overt acts
Even assuming, in gratia argumenti, that petitioner committed
what may be considered an act of insubordination for refusing
to present a medical certificate, such offense, without more,
certainly did not warrant the latters placement in a floating
status, a veritable dismissal, and deprived of his only source of
livelihood.
The court is not unmindful of the connection between the
nature of petitioners disease and his job as a truck/trailer
driver. We are also fully aware that petitioners job places at
stake the safety of the public. However, the court does not
agree with the NLRC that petitioner was validly dismissed
because his continued employment was prohibited by the
basic legal mandate that reasonable diligence must be
exercised to prevent prejudice to the public, which justified
respondents in refusing work to petitioner. Petitioner could
have been admitted back to work performing other tasks, such
as cleaning and maintaining respondent companys machine
and transportation assets.
All told, the court ruled that petitioners dismissal did not
comply with both the substantive and procedural aspects of
due process. Clearly, his dismissal is tainted with invalidity.































15. From: Mr. Bacalso









































































16. From: Mr. Bacalso

DUNCAN ASSOCICATION OF DETAILMAN-PTGWO., petitioner
vs
GLAXO WELLCOME PHILIPPINES, INC., respondent

Facts:
Pedro A. Tecson (Tecson) was hired by respondent
GlaxoWellcome Philippines, Inc. (Glaxo) as medical representative on
October 24, 1995, after Tecson had undergone training and
orientation.Thereafter, Tecson signed a contract of employment which
stipulates, among others, that he agrees to study and abide by
existing company rules; to disclose to management any existing or
future relationship by consanguinity or affinity with co-employees or
employees of competing drug companies and should management
find that such relationship poses a possible conflict of interest, to
resign from the company.

Subsequently, Tecson entered into a romantic relationship
with Bettsy, an employee of Astra Pharmaceuticals3 (Astra), a
competitor of Glaxo. Despite being reminded by his supervisor about
the conflict of interest that might stem from his relationship with
Bettsy, the two eventually got married. Respondent then informed
Tecson on January 1999 that the couple should decide who between
them would resign because of the conflict of interest. Respondent also
expressed their preference that Tecson should remain with the
company. Tecson asked for additional time to comply with the
company policy saying that Bettsy would be availing of the
redundancy package that Astra would offer as soon as the merger
with Zeneca is done. On Sept 1999 Tecson applied for transfer to
Glaxos milk division, he claims that his transfer would end the conflict
of interest since Astra had no similar division. His request was denied
due to Glaxos least movement possible policy. On Nov 1999 Tecson
was transferred to the Butuan City- Surigao City- Agusan Del Sur
sales area.

Tecson sought reconsideration for the transfer. Glaxo,
however, did not reconsider. Tecson defied the transfer order. During
the pendency of the grievance proceedings, Tecson was paid his
salary, but was not issued samples of products which were competing
with similar products manufactured by Astra. He was also not included
in product conferences regarding such products. Because Tecson and
Glaxo failed to resolve the issue, Tecson was offered a separation
pay of months salary for every year of service which he declined.
On November 15, 2000, the National Conciliation and Mediation
Board (NCMB) rendered its Decision declaring as valid Glaxos policy
on relationships between its employees and persons employed with
competitor companies, and affirming Glaxos right to transfer Tecson
to another sales territory. Tecson filed a petition for review in the
Court of Appeals but the said court affirmed the decision of NCMB.
The appellate court held that Glaxos policy prohibiting its employees
from having personal relationships with employees of competitor
companies is a valid exercise of its management prerogatives.
Tecson then filed a motion for reconsideration but was denied by the
Court of Appeals.


Issue:
Whether or not Glaxos policy prohibiting its employees
from marrying an employee of a competitor company is valid.


Held:
YES. That Glaxo possesses 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 protect
its right to reasonable returns on investments and to expansion and
growth. Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the protection of labor, it
does not mean that every labor dispute will be decided in favor of the
workers. The law also recognizes that management has rights which
are also entitled to respect and enforcement in the interest of fair play.
As explained by the Court of Appeals:

The policy being questioned is not a policy against marriage.
An employee of the company remains free to marry anyone of his or
her choosing. The policy is not aimed at restricting a personal
prerogative that belongs only to the individual. However, an
employees personal decision does not detract the employer from
exercising management prerogatives to ensure maximum profit and
business success.

The Court of Appeals also correctly noted that the assailed
company policy which forms part of respondents Employee Code of
Conduct and of its contracts with its employees, such as that signed
by Tescon, was made known to him prior to his employment. Tecson,
therefore, was aware of that restriction when he signed his
employment contract and when he entered into a relationship with
Bettsy. Since Tecson knowingly and voluntarily entered into a contract
of employment with Glaxo, the stipulations therein have the force of
law between them and, thus, should be complied with in good faith."
He is therefore estopped from questioning said policy.

The challenged policy has been implemented by Glaxo
impartially and disinterestedly for a long period of time.Glaxo gave
him time to resolve the conflict by either resigning from the company
or asking his wife to resign from Astra. Glaxo even expressed its
desire to retain Tecson in its employ because of his satisfactory
performance and suggested that he ask Bettsy to resign from her
company instead. Glaxo likewise acceded to his repeated requests for
more time to resolve the conflict of interest. When the problem could
not be resolved after several years of waiting, Glaxo was constrained
to reassign Tecson to a sales area different from that handled by his
wife for Astra. Notably, the Court did not terminate Tecson from
employment but only reassigned him to another area where his home
province, Agusandel Sur, was included. In effecting Tecsons transfer,
Glaxo even considered the welfare of Tecsons family. Clearly, the
foregoing dispels any suspicion of unfairness and bad faith on the part
of Glaxo.






































17. From: Ms. Laingan

MA. LOURDES T. DOMINGO, petitioner
vs
ROGELIO I. RAYALA, respondent

Facts:
On November 16,1998, Ma. Lourdes T. Domingo
thenStenographic Reporter III at the NLRC, filed a Complaint for
sexual harassment against Rogelio Rayalain the Department of Labor
and Employment (DOLE).The committee found Rayala guilty of the
offense charged by Laguesmaand recommended that thepenalty
should be a suspension for six (6) months and one (1) day,
inaccordance with Administrative Order 250. To support her
Complaint, Domingo executed an affidavit narrating the incidence of
the sexual harassment.

Upon receipt of the Complaint, the DOLE Secretary referred
the Complaint to the OP, Rayala being a presidential appointee. The
OP, through then Executive Secretary Ronaldo Zamora, ordered
Secretary Laguesma to investigate the allegations in the Complaint
and create a committee for such purpose. On December 4, 1998,
Secretary Laguesma issued Administrative Order (AO) No. 280,
Series of 1998, constituting a Committee on Decorum and
Investigation (Committee) in accordance with Republic Act (RA) 7877,
the Anti-Sexual Harassment Act of 1995.

The Committee heard the parties and received their respective
evidence. On March 2, 2000, the Committee submitted its report and
recommendation to Secretary Laguesma. It found Rayala guilty of the
offense charged and recommended the imposition of the minimum
penalty provided under AO 250, which it erroneously stated as
suspension for six (6) months.

The following day, Secretary Laguesma submitted a copy of
the Committee Report and Recommendation to the OP, but with the
recommendation that the penalty should be suspension for six (6)
months and one (1) day, in accordance with AO 250.
On June 28, 2004, the court directed the consolidation of the three
petitions.

G.R. No. 155831
Domingo assails the CAs resolution modifying the penalty
imposed by the Office of the President. She raises this issue:
The President has the prerogative to determine the proper penalty to
be imposed on an erring Presidential appointee. The President was
well within his power when he fittingly used that prerogative in
deciding to dismiss the respondent from the service.

G.R. No. 155840
In his petition, Rayala raises the following issues:

G.R. No. 158700
In his petition, Rayala raises the following issues:
1. His act does not constitute sexual harassment;
A. demand, request, or requirement of a sexual favor;
B. the same is made a pre-condition to hiring, re-employment, or
continued employment; or
C. the denial thereof results in discrimination againstthe employee.
2. Intent is an element of sexual harassment; and
3. Misapplication of the expanded definition of sexualharassment in
RA 7877 by applying DOLE AO 250.
The Republic raises this issue:
Whether or not the President of the Philippines may validly dismiss
respondent Rayala as Chairman of the NLRC for committing acts of
sexual harassment.
The Republic argues that Rayalas acts constitute sexual harassment
under AO 250. His acts constitute unwelcome or improper gestures of
affection and are acts or conduct of a sexual nature, which are
generally annoying or offensive to the victim.



Issue:
Whether or not Rayala commit sexual harassment and the
penalty be imposed to him if guilty of the act.


Held:
The law penalizing sexual harassment in our jurisdiction is RA
7877.Section 3 thereof defines work-related sexual harassment in this
wise:

Sec.3. Work, Education or Training-related SexualHarassment
Defined. Work, education or training-relatedsexual harassment is
committed by an employer, manager,supervisor, agent of the
employer, teacher, instructor,professor, coach, trainer, or any other
person who, havingauthority, influence or moral ascendancy over
another in awork or training or education environment,
demands,requests or otherwise requires any sexual favor from
theother, regardless of whether the demand, request or requirement
for submission is accepted by the object of said Act.(a) In a work-
related or employment environment, sexualharassment is committed
when:(1) The sexual favor is made as a condition in the hiring or in
the employment, re-employment or continued employment of said
individual, or in granting said individual favorablecompensation, terms,
conditions, promotions, or privileges;or the refusal to grant the sexual
favor results in limiting,segregating or classifying the employee which
in a waywould discriminate, deprive or diminish
employmentopportunities or otherwise adversely affect said
employee;(2) The above acts would impair the employees rights or
privileges under existing labor laws; or (3) The above acts would
result in an intimidating, hostile, or offensive environment for the
employee.

The CA, thus, correctly ruled that Rayalas culpability is not to
bedetermined solely on the basis of Section 3, RA 7877, because he
ischarged with the administrative offense, not the criminal infraction,
of sexual harassment.

It should be enough that the CA, along with theInvestigating
Committee and the Office of the President, foundsubstantial evidence
to support the administrative charge.Yet, even if we were to test
Rayalas acts strictly by the standards setin Section 3, RA 7877, he
would still be administratively liable. It is truethat this provision calls
for a "demand, request or requirement of asexual favor." But it is not
necessary that the demand, request or requirement of a sexual favor
be articulated in a categorical oral or written statement. It may be
discerned, with equal certitude, from theacts of the offender. Holding
and squeezing Domingos shoulders,running his fingers across her
neck and tickling her ear, havinginappropriate conversations with her,
giving her money allegedly for school expenses with a promise of
future privileges, and makingstatements with unmistakable sexual
overtones all these acts of Rayala resound with deafening clarity the
unspoken request for asexual favor.

Rayala alleged that CA erred in holding that sexual
harassment is an offense malumphohibitum. The SC reiterated that
what is before us is an administrative case for sexual harassment.
Thus whether the crime of sexual harassment is malum in se or
malumprohibitum is immaterial. The SC also rejected Rayalas
allegations that the charges were filedbecause of a conspiracy to get
him out of office and thus constitutemerely political harassment.

With the foregoing disquisitions affirming the finding that
Rayalacommitted sexual harassment, we now determine the proper
penalty tobe imposed.Rayala attacks the penalty imposed by the OP.
He alleges that under the pertinent Civil Service Rules, disgraceful
and immoral conduct ispunishable by suspension for a period of six
(6) months and one (1)day to one (1) year. He also argues that since
he is chargedadministratively, aggravating or mitigating circumstances
cannot beappreciated for purposes of imposing the penalty.Under AO
250, the penalty for the first offense is suspension for six (6)months
and one (1) day to one (1) year, while the penalty for thesecond
offense is dismissal.

On the other hand, Section 22(o), RuleXVI of the Omnibus
Rules Implementing Book V of the Administrative Code of 1987 and
Section 52 A (15) of the Revised Uniform Rules on Administrative
Cases in the Civil Service both provide that the firstoffense of
disgraceful and immoral conduct is punishable bysuspension of six (6)
months and one (1) day to one (1) year. Asecond offense is
punishable by dismissal.Under the Labor Code, the Chairman of the
NLRC shall holdoffice during good behavior until he or she reaches
the age of sixty-five, unless sooner removed for cause as provided by
law or becomes incapacitated to discharge the duties of the office.
In this case, it is the President of the Philippines, as the proper
disciplining authority, who would determine whether there is a valid
cause for the removal of Rayala as NLRC Chairman.

Wherefore, the foregoing premises considered, the October
18,2002 Resolution of the Court of Appeals in CA-G.R. SP No. 61026
is AFFIRMED (Modification of Penalty).Consequently, the petitionsin
G.R. Nos. 155831, 155840, and 158700 are DENIED.
Nopronouncement as to costs























































18. From: Ms. Laingan

PHILIPPINE GRAPHIC ARTS, petitioner, IGMIDIO R. SILVERIO
AND CARLOS CABAL, private petitioners
vs
NLRC, respondent

Facts:
In October, 1984, the petitioner corporation was forced by
economic circumstances to require its workers to go on mandatory
vacation leave in batches of seven or nine for periods ranging from
15, 30, to 45 days. The workers were paid while on leave but the pay
was charged against their respective earned leaves.

As a result, the private respondents filed a complaint for unfair
labor practice and discrimination.

On April 9, 1986, the Labor Arbiter rendered a decision. The
complaint of the private respondents on unfair labor practice and
discrimination was DISMISSED due to lack of merit. Respondents
were hereby ordered to restore and grant all its employees the
company policy regarding the groceries previously enjoyed by them.

The private respondents filed a partial appeal with the
National Labor Relations Commission (NLRC) questioning the Labor
Arbiters dismissal of their complaint for unfair labor practice and the
resultant forced vacation leaves which were actually without pay.

On June 19, 1986, the NLRC affirmed the arbiters decision
with modification.


Issue
Whether or not it is unfair labor practice and if not an
unfair labor practice, whether or not it was tainted with
arbitrariness.

Held:
After considering the petition and treating the comments of the
private respondents and the Solicitor General as Answers, the Court
resolved to give due course to the petition and decide it on the basic
merits.

The court was convinced that there was no unfair labor
practice. As found by the NLRC, the private respondents themselves
never questioned the existence of an economic crisis but, in fact,
admitted its existence.

The Court therefore agrees with the Solicitor General that
there is also no showing that the imposition of forced leave was
exercised for the purpose of defeating the rights of the employees
under special laws and agreements.

As stressed by the Solicitor General: The statutory law on
grievance procedure provides that:

ART. 261. Grievance machinery. Whenever a grievance
arises from the interpretation or implementation of a collective
agreement, including disciplinary actions imposed on members of the
bargaining unit, the employer and the bargaining representative shall
meet to adjust the grievance. Where the grievance procedure as
provided herein does not apply, grievances shall be subject to
negotiation, conciliation or arbitration as provided elsewhere in this
Code.

As the law stands, both employers and bargaining
representative of the employees are required to go through the
grievance machinery in case a grievance arises. And though the law
does not provide who, as between labor and capital, should initiate
that said grievance be brought first to the grievance machinery, it is
only logical, just and equitable that whoever is aggrieved should
initiate settlement of the grievance through the grievance machinery.
To impose the compulsory procedure on employers alone would be
oppressive of capital, notwithstanding the fact that in most cases the
grievance is of the employees.

In the case at bar, when petitioners sent notice to
complainants, no grievance between petitioners and private
respondents that need be threshed out before the grievance
machinery has yet materialized. But then, private respondents, who
received such notice and being aggrieved thereof, instituted a case
before the Labor Arbiter for unfair labor practices and discrimination,
prior to any referral to the grievance machinery, which they are
equally mandated to go through and under the circumstances they
were better situated to initiate; likewise, petitioners even prayed
before the Labor Arbiter that the complaint be dismissed and/or
referred to the grievance machinery.

WHEREFORE, the Petition is hereby GRANTED. The June
19, 1987 resolution of the National Labor Relations Commission is set
aside and the April 9, 1986 Decision of the Labor Arbiter is
REINSTATED.























































19. From: Mr. Tariga

LINTON COMMERCIAL CO., petitioner
vs
ALEX A. HELLERA, et al., respondent

Facts:
Linton is a domestic corporation engaged in the business of
importation of steel. On Dec. 17, 1997, through its VP, Desiree Ong,
Linton Inc issued a memorandum addressed to its employees
informing them of the companys decision to suspend its operations
from 18 December 1997 to 5 January 1998 due to the currency crisis
that affected its business operations. Linton submitted an
establishment termination report to the Department of Labor and
Employment (DOLE) regarding the temporary closure of the
establishment covering the said period. The companys operation was
to resume on 6 January 1998.

On 7 January 1998, Linton issued another memorandum
informing them that effective 12 January 1998, wherein each worker
would be working on a rotation basis for three working days only
instead for six days a week.

On the same day, Linton submitted an establishment
termination report concerning the rotation of its workers. Linton
proceeded with the implementation of the new policy without waiting
for its approval by DOLE.

Aggrieved, 68 workers filed a Complaint for illegal reduction of
workdays with the NLRC on 17 July 1998. They pointed out that
Linton implemented the reduction of work hours without observing
Article 283 of the Labor Code, which required submission of notice
thereof to DOLE one month prior to the implementation of reduction of
personnel.

Linton, on the other hand, contended that the devaluation of
the peso created a negative impact in international trade and affected
their business because a majority of their raw materials were imported
thus, they suffered a net loss of P3,569,706.57 primarily due to
currency devaluation and the slump in the market. Consequently,
Linton decided to reduce the working days of its employees to three
(3) days on a rotation basis as a cost-cutting measure.

On 28 January 2000, the Labor Arbiter rendered a Decision
finding petitioners guilty of illegal reduction of work hours and directing
them to pay each of the workers.

Petitioners appealed to the NLRC. The NLRC reversed the
decision of the Labor Arbiter. The NLRC held that an employer has
the prerogative to control all aspects of employment. The NLRC took
judicial notice of the Asian currency crisis in 1997 and 1998 thus
finding Lintons decision to implement a compressed workweek as a
valid exercise of management prerogative. Moreover, the NLRC ruled
that Article 283 of the Labor Code, which requires an employer to
submit a written notice to DOLE one (1) month prior to the closure or
reduction of personnel, is not applicable to the instant case because
no closure was undertaken and no reduction of employees was
implemented by Linton.

The workers then filed before the Court of Appeals a petition
for certiorari under Rule 65 assailing the decision of the NLRC and its
resolution that denied their Motion for Reconsideration.


Issue:
Whether or not there was an illegal reduction of work
when Linton implemented a compressed workweek by reducing
from six to three the number of working days with the employees
working on a rotation basis.


Ruling:
The Bureau of Working Conditions of the DOLE, moreover,
released a bulletin providing for in determining when an employer can
validly reduce the regular number of working days. The said bulletin
states that a reduction of the number of regular working days is valid
where the arrangement is resorted to by the employer to prevent
serious losses due to causes beyond his control, such as when there
is a substantial slump in the demand for his goods or services or
when there is lack of raw materials. Although the bulletin stands more
as a set of directory guidelines than a binding set of implementing
rules, it has one main consideration, consistent with the ruling in
Philippine Graphic Arts Inc., in determining the validity of reduction of
working hours that the company was suffering from losses.

Petitioners attempt to justify their action by alleging that the
company was suffering from financial losses owing to the Asian
currency crisis. Was petitioners' claim of financial losses supported by
evidence? A close examination of petitioners' financial reports for
1997-1998 shows that, while the company suffered a loss of
P3,645,422.00 in 1997, it retained a considerable amount of earnings
and operating income. Clearly then, while Linton suffered from losses
for that year, there remained enough earnings to sufficiently sustain
its operations. In business, sustained operations in the black is the
ideal but being in the red is a cruel reality. However, a year of financial
losses would not warrant the immolation of the welfare of the
employees, which in this case was done through a reduced workweek
that resulted in an unsettling diminution of the periodic pay for a
protracted period. Permitting reduction of work and pay at the slightest
indication of losses would be contrary to the State's policy to afford
protection to labor and provide full employment.Lintons financial
statements for 1997-1998 showed no indication of financial losses,
and the alleged loss of P3,645,422.00 in 1997 was considered
insubstantial considering its total asset ofP1,065,948,601.00.Hence,
the appellate court considered Lintons losses as de minimis.

Certainly, management has the prerogative to come up with
measures to ensure profitability or loss minimization. However, such
privilege is not absolute. Management prerogative must be exercised
in good faith and with due regard to the rights of labor. As previously
stated, financial losses must be shown before a company can validly
opt to reduce the work hours of its employees. However, to date, no
definite guidelines have yet been set to determine whether the alleged
losses are sufficient to justify the reduction of work hours. If the
standards set in determining the justifiability of financial losses under
Article 283 (i.e., retrenchment) or Article 286 (i.e., suspension of work)
of the Labor Code were to be considered, petitioners would end up
failing to meet the standards. On the one hand, Article 286 applies
only when there is a bona fide suspension of the employer's operation
of a business or undertaking for a period not exceeding six (6)
months. Records show that Linton continued its business operations
during the effectivity of the compressed workweek, which spanned
more than the maximum period. On the other hand, for retrenchment
to be justified, any claim of actual or potential business losses must
satisfy the following standards: (1) the losses incurred are substantial
and not de minimis; (2) the losses are actual or reasonably imminent;
(3) the retrenchment is reasonably necessary and is likely to be
effective in preventing the expected losses; and (4) the alleged
losses, if already incurred, or the expected imminent losses sought to
be forestalled, are proven by sufficient and convincing evidence.
Linton failed to comply with these standards.

All taken into account, the compressed workweek
arrangement was unjustified and illegal. Thus, petitioners committed
illegal reduction of work hours. Petitioners are ordered to pay
respondents, except the aforementioned 21 workers who executed
waivers and quitclaims, the monetary award as computed, pursuant to
the decision of the Labor Arbiter with interest at the rate of 6% per
annum from 12 December 2003, the date of promulgation of the Court
of Appeals' decision, until the finality of this decision, and thereafter at
the rate of 12% per annum until full payment.







20. From: Mr. Tariga

BISIG MANGGAGAWA SA TRYCO, petitioner
vs
NATIONAL LABOR RELATIONS COMMISSION, respondent

Facts:
Tryco Pharma Corp. is a manufacturer of veterinary
medicines. Tryco and BMT (rank-in-file union) signed separate MOA,
providing for a compressed workweek. The MOA was entered into
pursuant to DO No. 21, Series of 1990, Guidelines on the
Implementation of Compressed Workweek. As provided in the MOA,
8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be considered as
the regular working hours, and no overtime pay shall be due and
payable to the employee for work rendered during those hours.
However, should an employee be permitted or required to work
beyond 6:12 p.m., such employee shall be entitled to overtime pay.

Tryco informed the BWC of the DOLE of the implementation of
a compressed workweek in the company. Meantime, Tryco received a
Letter from the Bureau of Animal Industry of the Department of
Agriculture reminding it that its production should be conducted in San
Rafael, Bulacan, not in its main office in Caloocan City. The
concerned employees were directed to report at the companys plant
site. BMT opposed the transfer of its members to San Rafael,
Bulacan, contending that it constitutes unfair labor practice. In protest,
BMT declared a strike, claiming that the transfer was inconvenient
and amounts to ULP.

Issue:
Whether or not Tryco guilty of unfair labor practice.

Held:
Absent any evidence that the Bureau of Animal Industry
conspired with Tryco, the allegation is not onlyhighly irresponsible but
is grossly unfair to the government agency concerned.
The transfer of its production activities to San Rafael, Bulacan,
regardless of whether it was made pursuant to the letter of the Bureau
of Animal Industry, was within the scope of its inherent right to control
and manage its enterprise effectively.

Managements prerogative of transferring and reassigning
employees from one area of operation to another in order to meet the
requirements of the business is, therefore, generally not constitutive of
constructive dismissal. Indisputably, in the instant case, the transfer
orders do not entail a demotion in rank or diminution of salaries,
benefits and other privileges of the petitioners.

Mere incidental inconvenience is not sufficient to warrant a
claim of constructive dismissal. Personal inconvenience or hardship
that will be caused to the employee by reason of the transfer is not a
valid reason to disobey an order of transfer. Moreover, the adoption of
a compressed workweek scheme in the company will help temper any
inconvenience that will be caused the petitioners by their transfer to a
farther workplace.

The transfer orders do not amount to ULP. Contrary to BMTs
claim, mere transfer of its members will not paralyze and render the
union ineffective. The union was not deprived of the membership of
the petitioners whose work assignments were only transferred to
another location. There was no showing or any indication that the
transfer orders were motivated by an intention to interfere with the
petitioners right to organize.

The MOA is enforceable and binding against the petitioners
(esp. waiver of overtime). Where it is shown that the person making
the waiver did so voluntarily, with full understanding of what he was
doing, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and binding
undertaking. Notably, the MOA complied with the following conditions
set by the DOLE, under D.O. No. 21.

Notably, the MOA complied with the following conditions set by the
DOLE, under D.O. No. 21, to protect the interest of the employees in
the implementation of a compressed workweek scheme:

1. The employees voluntarily agree to work more than eight (8) hours
a day the total in a week of which shall not exceed their normal
weekly hours of work prior to adoption of the compressed workweek
arrangement;

2. There will not be any diminution whatsoever in the weekly or
monthly take-home pay and fringe benefits of the employees;

3. If an employee is permitted or required to work in excess of his
normal weekly hours of work prior to the adoption of the compressed
workweek scheme, all such excess hours shall be considered
overtime work and shall be compensated in accordance with the
provisions of the Labor Code or applicable Collective Bargaining
Agreement (CBA);

4. Appropriate waivers with respect to overtime premium pay for work
performed in excess of eight (8) hours a day may be devised by the
parties to the agreement.

5. The effectivity and implementation of the new working time
arrangement shall be by agreement of the parties.

PESALA v. NLRC,[28] cited by the petitioners, is not
applicable to the present case. In that case, an employment contract
provided that the workday consists of 12 hours and the employee will
be paid a fixed monthly salary rate that was above the legal minimum
wage. However, unlike the present MOA which specifically states that
the employee waives his right to claim overtime pay for work rendered
beyond eight hours, the employment contract in that case was silent
on whether overtime pay was included in the payment of the fixed
monthly salary. This necessitated the interpretation by the Court as to
whether the fixed monthly rate provided under the employment
contract included overtime pay. The Court noted that if the employee
is paid only the minimum wage but with overtime pay, the amount is
still greater than the fixed monthly rate as provided in the employment
contract. It, therefore, held that overtime pay was not included in the
agreed fixed monthly rate.

Considering that the MOA clearly states that the employee
waives the payment of overtime pay in exchange of a five-day
workweek, there is no room for interpretation and its terms should be
implemented as they are written.

WHEREFORE, the petition is DENIED. The Court of Appeals
Decision dated July 24, 2001 and Resolution dated December 20,
2001 are AFFIRMED.
























21. From: Mr. Agorilla

HONDA PHILIPPINES, INC., petitioner
vs
SAMAHAN NG MALAYANG MANGAGAWA SA HONDA.,
respondent

Facts:
The case stems from the Collective Bargaining Agreement
(CBA) forged between petitioner Honda and respondent union
Samahan ng Malayang Manggagawa sa Honda (respondent union)
which contained the following provisions:

Section 3. 13th Month Pay
The COMPANY shall maintain the present practice in the
implementation [of] the 13th month pay.

Section 6. 14th Month Pay
The COMPANY shall grant a 14th Month Pay, computed on
the same basis as computation of 13th Month Pay.

Section 7.
The COMPANY agrees to continue the practice of granting, in
its discretion, financial assistance to covered employees in December
of each year, of not less than 100% of basic pay.

This CBA was effective until the year 2000. Re-negotiations
were made in 1998 for the fourth and fifth year but resulted to the
union filing a Notice of Strike on the ground of bargaining deadlock.
Thereafter, Honda filed a Notice of Lockout. On March 31, 1999, the
DOLE secretary assumed jurisdiction over the labor dispute and
ordered the parties to cease and desist from commiting acts that
would aggravate the situation which was complied with by the parties.

May 11, 1999 The union filed a second Notice of Strike on
the ground of unfair labor practice alleging that Honda illegally
contracted out work to the detriment of the workers. The union went
on strike and picketed outside the Honda premises. The DOLE
assumed jurisdiction and certified the same to the NLRC for
compulsory arbitration. The workers were told to return to work and
was accepted back under the same terms prior to the strike staged.

November 22, 1999 Honda issued a memo announcing its
new computation of the 13
th
and 14
th
month pay to be granted to all its
employees whereby the thirty-one (31)-day long strike shall be
considered unworked days for purposes of computing said benefits.
As per the companys new formula, the amount equivalent to 1/12 of
the employees basic salary shall be deducted from these bonuses,
with a commitment however that in the event that the strike is
declared legal, Honda shall pay the amount deducted.

The union opposed the pro-rated computation of the bonuses.
Honda sought the opinion of the Bureau of Working Conditions (BWC)
on the issue. Which the latter agreed with the pro-rata payment of the
13
th
month pay as proposed by Honda. The matter was brought to the
grievance machinery as stipulated in the CBA but remained unsolved,
which was then submitted for voluntary arbitration which the latter
decided that Hondas implementation of pro-rated 13
th
month pay, 14
th

month pay, and financial assistance is invalid. Honda is thus ordered
to compute each provision in full month basic pay and pay amounts in
question.

Honda file an MPR but was denied. It filed a petition to the CA
but was dismissed.


Issue:
Whether the pro-rated computation of the 13th month pay and
the other bonuses in question is valid and lawful in the CBA.


Held:
The petition lack merit. A collective bargaining agreement
refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and
all other terms and conditions of employment in a bargaining unit.
Honda wanted to implement a pro-rated computation of the
benefits based on the "no work, no pay" rule. According to the
company, the phrase "present practice" as mentioned in the CBA
refers to the manner and requisites with respect to the payment of the
bonuses, i.e., 50% to be given in May and the other 50% in December
of each year. Respondent union, however, insists that the CBA
provisions relating to the implementation of the 13th month pay
necessarily relate to the computation of the same.

The provisions show that they did not state categorically
whether the computation of the 13th month pay, 14th month pay and
the financial assistance would be based on one full months basic
salary of the employees, or pro-rated based on the compensation
actually received.

Presidential Decree No. 851, otherwise known as the 13th
Month Pay Law, which required all employers to pay their employees
a 13th month pay, was issued to protect the level of real wages from
the ravages of worldwide inflation. It was enacted on December 16,
1975 after it was noted that there had been no increase in the
minimum wage since 1970 and the Christmas season was an
opportune time for society to show its concern for the plight of the
working masses so that they may properly celebrate Christmas and
New Year.

The "basic salary" of an employee for the purpose of
computing the 13th month pay shall include all remunerations or
earnings paid by his employer for services rendered but does not
include allowances and monetary benefits which are not considered
or integrated as part of the regular or basic salary, such as the cash
equivalent of unused vacation and sick leave credits, overtime
premium, night differential and holiday pay, and cost-of-living
allowances.

For employees receiving regular wage, we have interpreted
"basic salary" to mean, not the amount actually received by an
employee, but 1/12 of their standard monthly wage multiplied by their
length of service within a given calendar year. Thus, we exclude from
the computation of "basic salary" payments for sick, vacation and
maternity leaves, night differentials, regular holiday pay and premiums
for work done on rest days and special holidays.

The revised guidelines also provided for a pro-ration of this
benefit only in cases of resignation or separation from work. As the
rules state, under these circumstances, an employee is entitled to a
pay in proportion to the length of time he worked during the year,
reckoned from the time he started working during the calendar year.

The computation of the 13th month pay should be based on
the length of service and not on the actual wage earned by the
worker. In the present case, there being no gap in the service of the
workers during the calendar year in question, the computation of the
13th month pay should not be pro-rated but should be given in full.

WHEREFORE, the instant petition is DENIED.
















22. From: Mr. Agorilla

STATES MARINE CORPORATION and ROYAL LINE, INC.,
petitioners
vs
CEBU SEAMENS ASSOCIATION, INC., respondent

Facts:
Petitioners were engaged in the business of marine coastwise
transportation, employing therein several steamships of Philippine
registry. They had a collective bargaining contract with the
respondent. On September 12, 1952, the respondent union filed with
the Court of Industrial Relations (CIR), a petition against the States
Marine Corporation, later amended on May 4, 1953, by including as
party respondent, the petitioner Royal Line, Inc. The Union alleged
that the officers and men working on board the petitioners' vessels
have not been paid their sick leave, vacation leave and overtime pay;
that the petitioners threatened or coerced them to accept a reduction
of salaries, observed by other ship owners; that after the Minimum
Wage Law had taken effect, the petitioners required their employees
on board their vessels, to pay the sum of P.40 for every meal, while
the masters and officers were not required to pay their meals and that
because Captain Carlos Asensi had refused to yield to the general
reduction of salaries, the petitioners dismissed said captain who now
claims for reinstatement and the payment of back wages from
December 25, 1952, at the rate of P540.00, monthly.

The petitioners, averred that very much below 30 of the men
and officers in their employ were members of the respondent union;
that the work on board a vessel is one of comparative ease; that
petitioners have suffered financial losses in the operation of their
vessels and that there is no law which provides for the payment of
sick leave or vacation leave to employees or workers of private firms;
that as regards the claim for overtime pay, the petitioners have always
observed the provisions of Comm. Act No. 444, (Eight-Hour Labor
Law), notwithstanding the fact that it does not apply to those who
provide means of transportation; that the ship owners and operators in
Cebu were paying the salaries of their officers and men, depending
upon the margin of profits they could realize and other factors or
circumstances of the business; that in enacting Rep. Act No. 602
(Minimum Wage Law), the Congress had in mind that the amount of
P.40 per meal, furnished the employees should be deducted from the
daily wages; that Captain Asensi was not dismissed for alleged union
activities, but with the expiration of the terms of the contract between
said officer and the petitioners, his services were terminated.

All the crew of their vessels have been signing "shipping
articles" in which are stated opposite their names, the salaries or
wages they would receive. All seamen, whether members of the crew
or deck officers or engineers, have been furnished free meals by the
ship owners or operators. All the shipping articles signed by the
master and the crew members, contained, among others, a
stipulation, that "in consideration of which services to be duly
performed, the said master hereby agrees to pay to the said crew, as
wages, the sums against their names respectively expressed in the
contract; and to supply them with provisions as provided herein ..."
,and during the duration of the contract "the master of the vessel will
provide each member of the crew such daily subsistence as shall be
mutually agreed daily upon between said master and crew; or, in lieu
of such subsistence the crew may reserve the right to demand at the
time of execution of these articles that adequate daily rations be
furnished each member of the crew.". It is, therefore, apparent that,
aside from the payment of the respective salaries or wages, set
opposite the names of the crew members, the petitioners bound
themselves to supply the crew with daily subsistence or daily rations,
which include food.

This was the situation before August 4, 1951, when the
Minimum Wage Law became effective. After this date, however, the
companies began deducting the cost of meals from the wages or
salaries of crew members; but no such deductions were made from
the salaries of the deck officers and engineers in all the boats of the
petitioners. Under the existing laws, therefore, the query converges on
the legality of such deductions. While the petitioners herein contend
that the deductions are legal and should not be reimbursed to the
respondent union, the latter, however, claims that same are illegal and
reimbursement should be made.

The CIR ruled in favour of the union, denying the MR of the
petitioner.


Issue:
Whether or not the CIR erred in holding that inasmuch as
with regard to meals furnished to crew members of a vessel,
section 3(f) of Act No. 602 is the general rule, which section 19
thereof is the exception, the cost of said meals may not be
legally deducted from the wages or salaries of the aforesaid crew
members by the herein petitioners.


Held:
We hold that such deductions are not authorized. In the
coastwise business of transportation of passengers and freight, the
men who compose the complement of a vessel are provided with free
meals by the shipowners, operators or agents, because they hold on
to their work and duties, regardless of "the stress and strain
concomitant of a bad weather, unmindful of the dangers that lurk
ahead in the midst of the high seas."

Section 3, par. f, of the Minimum Wage Law, (R.A. No. 602), provides
as follows
(f) Until and unless investigations by the Secretary of Labor on his
initiative or on petition of any interested party result in a different
determination of the fair and reasonable value, the furnishing of meals
shall be valued at not more than thirty centavos per meal for
agricultural employees and not more than forty centavos for any other
employees covered by this Act, and the furnishing of housing shall be
valued at not more than twenty centavos daily for agricultural workers
and not more than forty centavos daily for other employees covered
by this Act.

Section 3, par. f, of the Minimum Wage Law, (R.A. No. 602), provides
as follows
(f) Until and unless investigations by the Secretary of Labor on his
initiative or on petition of any interested party result in a different
determination of the fair and reasonable value, the furnishing of meals
shall be valued at not more than thirty centavos per meal for
agricultural employees and not more than forty centavos for any other
employees covered by this Act, and the furnishing of housing shall be
valued at not more than twenty centavos daily for agricultural workers
and not more than forty centavos daily for other employees covered
by this Act.

However, section 19, same law, states
SEC. 19. Relations to other labor laws and practices. Nothing in this
Act shall deprive an employee of the right to seek fair wages, shorter
working hours and better working conditions nor justify an employer in
violating any other labor law applicable to his employees, in reducing
the wage now paid to any of his employees in excess of the minimum
wage established under this Act, or in reducing supplements furnished
on the date of enactment.

Sec 3 is the general rule and sec 19 is the exception. There is no
conflict; the two provisions could, as they should be harmonized. And
even if there is such a conflict, the respondent CIR should resolve the
same in favor of the safety and decent living laborers (Art. 1702, new
Civil Code).

It is argued that the food or meals given to the deck officers,
marine engineers and unlicensed crew members in question, were
mere "facilities" which should be deducted from wages, and not
"supplements".

"Supplements", therefore, constitute extra remuneration or
special privileges or benefits given to or received by the laborers over
and above their ordinary earnings or wages. "Facilities", on the other
hand, are items of expense necessary for the laborer's and his
family's existence and subsistence so that by express provision of law
(Sec. 2[g]), they form part of the wage and when furnished by the
employer are deductible therefrom, since if they are not so furnished,
the laborer would spend and pay for them just the same.

In short, the benefit or privilege given to the employee which
constitutes an extra remuneration above and over his basic or
ordinary earning or wage, is supplement; and when said benefit or
privilege is part of the laborers' basic wages, it is a facility. The
criterion is not so much with the kind of the benefit or item (food,
lodging, bonus or sick leave) given, but its purpose.

IN VIEW HEREOF, the petition is dismissed.





























































23. From: Mr. Martin

ATOK BIG WEDGE MINING CO., INC., petitioner
vs
ATOK BIGWEDGE MUTUAL BENEFIT ASSOCIATION,
respondent

Facts:
On September 4, 1950, a demand was submitted
to petitionerby respondent union through its officers for variousconces
sions, among which were (a) an increase
of P0.50 inwages, (b) commutation of sick and vacation leave if notenj
oyed during the year, (c) various privileges, such as free medical care,
medicine, and hospitalization, (d) right to a closed shop, check off,
etc., (e) no dismissal without prior just cause and with a prior
investigation, etc.- Some of the demands, were granted by
the petitioner, and the others were rejected. Hearings were held in the
respondent court (CIR).

After the hearings the respondent court rendered a decision
fixing the minimum wage for the laborers at P3.20,
declaringthat additional compensation representing efficiency bonuss
hould not be included as part of the wage, and making
theaward effective from September 4, 1950 (the date of thepresentati
on of the original demand, instead of from April 5,1951, the date of the
amended demand.


Issues:
WON the Court of Industrial Relations erred in fixing the
minimum wage at P3.20.

WON the Court of Industrial Relations erred in declaring
that the additional compensation representing the efficiency
bonus should not be included as part of the wage.

WON the Court of Industrial Relations erred in making the
award effective from September 4, 1950


Held:
1. NO. Petitioner contends that the laborer and his family need only
the amount of P2.58 for food so this should be the basis for
thedetermination of his wage, not what he actually spends.Furthermor
e, that it is not justifiable to fix a wage higher than that provided
by Republic Act No. 602 and
that respondentunion made the demand in accordance with a pernicio
uspractice of claiming more after an original demand is granted.

The respondent court found that P2.58 is the minimum amount
actually needed by the laborer and his family. But this does not mean
that it is his actual expense. A person's needs increase as his means
increase. This is true not only as to food but as to everything else-
education, clothing, entertainment, etc.

The law guarantees the laborer a fair and just wage.
The minimum must be fair and just. The "minimum wage" can by no
means imply only the actual minimum. Some margin or leeway
must be provided, over and above the minimum, to take care of
contingencies, such as increase of prices of commodities and
increase inwants, and to provide means for a desirableimprovement in
his mode of living.

That the P3 minimum wage fixed in the law is still far below
what is considered a fair and just minimum is shown by the fact that
this amount is only for the year after the law takes effect, as thereafter
the law fixes it at P4. Neither may it be correctly contended that the
demand for increase is due to an alleged pernicious practice.
Frequent demands for increase are indicative of a healthy spirit
of wakefulness to the demands of a progressing and an increasingly
more expensive world.

2. NO. Petitioner contends that the efficiency bonus paid the laborer
should have been included in his minimum wage, in the same manner
as the value of living quarters.

Whether or not bonus forms part of wages depends upon the
circumstances
or conditions for its payment. If it is an additional compensation which
the employer promised and agreed to give without any conditions
imposed for its payment, such as success of business or greater
production or output, and then it is part of the wage. But if it is paid
only if profits are realized or a certain amount of productivity achieved,
it cannot be considered part of the wages.

In the case at bar, it is not payable to all but to laborers only. It
is also paid on the basis of actual production or actual work
accomplished. If the desired goal of production is not obtained, or the
amount of actual work accomplished, the bonus does not accrue. It is
evident that under the circumstances it is paid only when the labor
becomes more efficient or more productive. It is only an inducement
for efficiency, a prize therefore, not a part of the wage.

3. NO. Both parties agreed that any award should be retroactive to
the date of the presentation of the demands, which is September
4, 1950. The terms of the stipulation are clearly against petitioner's
contention. There being no question as to its agreement, the same
must be given force and effect.
















































24. From: Mr. Martin

EQUITABLE- PCI BANK, petitioner
vs
RICARDO SADAC, respondent

Facts:
Ricardo Sadac was appointed Vice President of the Legal
Department of petitioner Bank effective 1 August 1981, and
subsequently General Counsel thereof on 8 December 1981. On June
1989, nine lawyers of petitioner Banks Legal Department, in a letter-
petition to the Chairman of the Board of Directors, accused
respondent Sadac of abusive conduct and ultimately, petitioned for a
change in leadership of the department. On the ground of lack of
confidence in Sadac, under the rules of client and lawyer relationship,
petitioner Bank instructed respondent Sadac to deliver all materials in
his custody in all cases in which the latter was appearing as its
counsel of record. In reaction thereto, Sadac requested for a full
hearing and formal investigation but the same remained unheeded.
On 9 November 1989, respondent Sadac filed a complaint for illegal
dismissal with damages against petitioner Bank and individual
members of the Board of Directors thereof. After learning of the filing
of the complaint, petitioner Bank terminated the services of
respondent Sadac. Finally, on 10 August 1989, Sadac was removed
from his office.

Labor Arbiter rendered decision that Sadacs termination was
illegal and entitled to reinstatement and payment of full back wages.
NLRC affirmed the decision upon appeal by the Bank. Sadac filed for
execution of judgment where it gave its computation which amounted
to P 6.03 M representing his back wages and the increases he should
have received during the time he was illegally dismissed. The Bank
opposed to Sadacs computation. The Labor Arbiter favor Sadacs
computation. NLRC, upon appeal by the bank, reversed the decision.
CA reversed the decision of NLRC. Hence, this petition.


Issue:
Whether or not the computation of back wages shall
include the general increases.


Ruling:
To resolve the issue, the court revisits its pronouncements on
the interpretation of the term backwages. Backwages in general are
granted on grounds of equity for earnings which a worker or employee
has lost due to his illegal dismissal. It is not private compensation or
damages but is awarded in furtherance and effectuation of the public
objective of the Labor Code. Nor is it a redress of a private right but
rather in the nature of a command to the employer to make public
reparation for dismissing an employee either due to the formers
unlawful act or bad faith.

In the case of Bustamante v. National Labor Relations
Commission, It said that the Court deems it appropriate to reconsider
such earlier ruling on the computation of back wages by now holding
that conformably with the evident legislative intent as expressed in
Rep. Act No. 6715, back wages to be awarded to an illegally
dismissed employee, should not, as a general rule, be diminished or
reduced by the earnings derived by him elsewhere during the period
of his illegal dismissal. The underlying reason for this ruling is that the
employee, while litigating the legality (illegality) of his dismissal, must
still earn a living to support himself and family, while full backwages
have to be paid by the employer as part of the price or penalty he has
to pay for illegally dismissing his employee. The clear legislative intent
of the amendment in Rep. Act No. 6715 is to give more benefits to
workers than was previously given them. Thus, a closer adherence to
the legislative policy behind Rep. Act No. 6715 points to "full
backwages" as meaning exactly that, i.e., without deducting from
backwages the earnings derived elsewhere by the concerned
employee during the period of his illegal dismissal.

There is no vested right to salary increases. Sadac may have
received salary increases in the past only proves fact of receipt but
does not establish a degree of assuredness that is inherent in
backwages. The conclusion is that Sadacs computation of his full
backwages which includes his prospective salary increases cannot be
permitted.






































































25. From: Mr. Rivera

MEYCAUAYAN COLLEGE, petitioner
vs
HON. FRANKLIN DRILON and MEYCAUAYAN FACULTY
ASSOCIATION, respondent

Facts:
The herein petitioner is an educational institution organized
and existing under the Philippine law. On the other hand, the herein
respondent is the recognized employees union by the petitioner.

Sometime in July 16,1987 the parties entered into a CBA and
portion thereof refers to the increase in the faculty members salary
based on the length or period of service which ranges from Php.
51.00 to Php. 70.00.

During the existence of the CBA several wage orders were
issued increasing the daily rates of all employees and even there cost
of living allowances which the petitioner properly observed and
provided to their employees.

However, the union members found out that Art. IV of their
CBA which refers to the increase in their salary rates remains
unimplemented resulting for them to file a case of unfair competition.

The petitioners argument is that, compliance with the wage
scale orders is ipso facto compliance to the CBA. Furthermore, if
they will insist the provision of the CBA where the rates therein are
different from the rates given by the wage scale orders, it would lead
to salary distortion or alteration of salary scale.


Issue:
Whether or not increase in salary under CBA is separate
and distinct from the increase in salary rate under wage scale
orders.
Held:
The court ruled that, even though increase in salary under
CBA and increase in salary under wage orders are of the same
purpose, they are still separate and distinct from one to another.

Compliance in the CBA is not ipso facto compliance with the
wage order and vice versa. According to the court, each rates must be
given separately and simultaneously to the employees because these
are their rights arising from different sources, one as statutory right
and the other is a contractual right.



























26. From: Mr. Rivera

PHILIPPINE TELEGRAPH and TELEPHONE CORPORATION
(PT&T), petitioner
vs
NLRC and PT&T EMPLOYEES UNION, respondent

Facts:
The herein respondent filed a case of unfair labor practice,
under payment of statutory and contractual benefits. During the
existence of their CBA, several wage orders were issued increasing
the salary of all employees.

The union claimed that they should be paid separately by the
increase in salary as provided by the wage orders and as provided in
their CBA.

Issue:
Can the PT&T Corp. be compelled to pay simultaneously
the wage increase as provided in the wage orders and CBA?


Held:
The court ruled in negative. The CBA provision in this case
shall prevail. The CBA provides that, The parties agree that in the
event of additional wage increases, bonuses, or allowances which
during the life of this agreement being made mandatory as a matter of
law, such that the minimum wage including bonuses and allowances
shall be greater than the wage provided therein, then such wages
shall ipso facto become the total remunerations under such
agreement in lieu of all other remuneration and increase herein
provided.



































27. From: Mr. Olores

WILHEMINA S. OROZCO, petitioner
vs
FIFTH of COURT OF APPEALS, respondent

WILHELMINA OROZCO filed a complaint of illegal dismissal,
back wages, moral and exemplary damages and other monetary
claims before the NLRC
NATURE OF THE ACTION
Petition of Review under Rule 45
Facts:
March 1990, Orozco was a lifestyle Columnist of PDI. He
writes on a weekly basis for the said Newspaper November 1992
which was his last appearance of Orozcos column at PDI. According
to her, he was informed by her editor LitaLogarta that according to
Leticia Jimenez Magsanoc, the PDI editor, that Eugenia Apostol, the
PDI Chairperson, that it was her last column for the PDI. Orozco
called Eugenia Apostol. And, she was informed that PDI had already
many columnists and that her column is poorly written.

Issue:
Whether or not Orozco, being a columnist, is an
employeed of the Philippine Daily Inquirer.


LABOR ARBITERS DECISION
Orozco is an employee of PDI. PDI, according to the Labor
Arbiter, exercises control over Orozco because it has the prerogative
to reject any article submitted by Orozco for publication. Other indicia
of control is the fact that the column is entitled: Feminist Reflection
such that Orozcos writing is controlled and limited to a womans
perspective and she was in fact obligated to produce an article a
week.
APPEAL TO NLRC
On Technicalities.PDI failed to post a cash or surety bond as required
under Article 223. PDI reasoned that Labor Arbiter did not specify the
amount of Judgment award. This argument failed.
On the Merits, NLRC found no error in the Decision of the Labor
Arbiter.
SUPREME COURT
PDI went to the Supreme Court for a petition for review but the Court
remanded the case to the Court of Appeals pursuant to the
pronouncement in St. Martins Funeral Homes v. NLRC (356 Phil 811;
295 SCRA 494(1998)).
COURT OF APPEALS
The Court of Appeals reversed the decision of the NLRC. The
Court of Appeals states that NLRC misappreciated the facts:
1. Orozco admitted that she was not considered by PDI as an
employee
2. Orozco had no employment contract with PDI
3. With regard to Control, PDIs guidelines as to space allocation
and length of Article do not constitute Control.
According to the Court of Appeals, in deciding to publish Orozcos
article PDI only controls the result of the work and not the means by
which said article are written. Orozco files a Motion for
Reconsideration. Denied.
SUPREME COURT: Is Orozco an employee of PDI?
On Technicalities
Notwithstanding the fact that PDI did not post a bond the
Supreme Court gave due course to PDIs claim and ordered Labor
Arbiter Amansec to clarify the amount for purposes of the bond in
compliance with Article 223.
On the Merits
a. The Control Test
Orozco is NOT an employee of PDI. In deciding the case the court
cites the four-fold test to determine the employer-employee
relationship:
1. Selection and Management
2. Payment of Wages
3. Power of Dismissal
4. Power of Control.
Of these four, the Court says that it is the power of control that is
the most important.
Argument of Orozco: PDI has control by virtue of the content of
the column, as to time, space and as to discipline. But, the Court says
that it is not the control that the law envisions. The so called control as
to time, space, and discipline are dictated by the very nature of the
newspaper.
According to the Court, the main determinant of the power of
control is whether or not the rules set by the employer are meant to
control not just the result but also the means and method to be used
by the hired party in order to achieve success such result.
The facts leading to the conclusion that there was no power of
control over Orozco are as follows:
1. She failed to show that she was dictated how she was to write
or produce her articles each week.
2. There was no restraint in her creativity
3. She was free to write her column in the manner and style she
was accustomed to and to use whatever research method she
deemed suitable for her purpose.



b. The Economic Reality test
In our jurisdiction, the benchmark of economic reality in analysing
possible employment relationships for purposes of applying the Labor
Code ought to be the economic dependence of the worker on his
employer.
The facts belie that Orozco was economically dependent on her work
at PDI:
1. Orozcos main occupation is not as a columnist for PDI but as
womens rights advocate working in various womens
organizations.
2. She also contributes articles to other publications.
Conclusion reached by the Court with regard to Orozcos
employment: She is an Independent Contractor




















28. From: Mr. Olores
JOSE Y. SONZA, petitioner
Vs
ABS-CBN, respondent

Issue:
Whether or not Sonza, being a broadcaster, an employee
of ABS-CBN.

Facts:
May 1994. ABS-CBN signed an agreement with MJMDC, Mel
and Jay Management and Development Corporation. Jay Sonza is
the President and General Manager and Carmela Tiangco as EVP
and Treasurer.

April 30, 1996. Sonza filed a complaint against ABS-CBN before
the Department of Labor and Employment, NCR, in Quezon City.
Sonza complained that ABS-CBN did not pay his:
1. Salaries
2. Separation Pay
3. Service Incentive Leave
4. 13
th
Month Pay
5. Signing Bonus
6. Travel Allowance
7. Amounts due under the Employees Stock Option Plan.
ABS-CBN filed a motion to dismiss on the ground that there was
no employer-employee relationship between Sonza and ABS-CBN but
ABS continued to pay Sonzas monthly talent fees and other fees due
him under the agreement.
DECISION OF THE LABOR ARBITER
While Philippine Jurisdiction has not yet, with certainty,
touched on the true nature of the contract of a talent, it stands to
reason that a talent xxx cannot be considered as an employee by
reason of the peculiar circumstances surrounding the engagement of
his services.
It must be noted that complainant was engaged by respondent
by reason of his peculiar skills and talent as a TV host and a radio
broadcaster. Unlike an ordinary employee, he was free to perform the
services he undertook to render in accordance with his own style.
The fact that per the May 1994 Agreement complainant was
accorded some benefits normally given to an employee is
inconsequential. Whatever benefits complainant enjoyed arose from
specific agreement by the parties and not by reason of employer-
employee relationship
The fact that complainant was made subject to respondents
Rules and Regulations, likewise, does not detract from the absence of
employer-employee relationship.
DECISION OF THE NLRC
Appeal by Sonza, denied. NLRC affirmed the Labor Arbiters
Decision. Motion for Reconsideration, also, denied.
DECISION OF THE COURT OF APPEALS
Quoting the findings of the NLRC, CA says that: The May
1994 agreement will readily reveal that MJMDC entered into the
contract merely as an agent of complainant Sonza, the principal.
Clearly, the relations of principal and agent only accrues
between complainant Sonza and MJMDC and not between ABS-CBN
and MJMDC
RULING OF THE SUPREME COURT
The Court affirmed the decision of the Court of Appeals, NLRC
and the Labor Arbiter.Sonza is not an employee but an independent
contractor.
SONZA maintains that all essential elements of an employer-
employee relationship are present in this case:
1. The selection and engagement of the employee
2. The payment of wages
3. The power of dismissal
4. The employers power to control the employee on the means
and methods by which the work is accomplished.
The power of control is the most important element. Applying the
control test, we find that Sonza is not an employee but an
independent contractor.
First.Sonza contends that ABS-CBN exercised control over the
means and methods of his work. Sonzas argument is misplaced.
ABS did not assign any other work to Sonza; ABS only needed
his talent and skills. How Sonza delivered his lines, appeared on
Television and sounded on Radio were outside of ABSs control.
Sonza did not have to render eight (8) hours of work per day. ABS
could not dictate the contents of Sonzas script. ABS was not involved
in the actual performance that produced the finished product of
Sonzas work. ABS did not instruct Sonza how to perform his job.
Sonza claims that ABSs power not to broadcast his shows
proves ABSs power over the means and methods of the performance
of his work. But ABS right not to broadcast Sonzas show, burdened
as it was by the obligation to continue paying in full Sonzas talent
fees, did not amount to control over the means and methods of the
performance of Sonzas work. ABS could not terminate or discipline
Sonza even if the means and methods of performance of his work
how he delivered his lines and appeared on televisiondid not meet
ABSs approval. This proves that ABSs control was limited only to the
result of Sonzas work.
Sonza further contends that ABS exercised control over his
work by supplying all the equipment and crew. But the equipment,
crew and airtime are not the tools and instrumentalities Sonza needed
to perform his job. What Sonzaprincipally needed were his talent or
skills and the costumes necessary for his appearance.
Second,Sonza urges us to rule that he was ABS-CBNs
employee because ABS subjected him to its rules ad standard
of performance. But what applies to Broadcasters is the KBP
code, not to employees of radio and television stations.
Broadcasters are not necessarily employees of radio and
television stations. Clearly the rules and standards of
performance referred to in the agreement are those applicable
to talents and not to employees
Lastly, Sonza insists that the exclusivity clause in his agreement is the
most extreme form of control which ABS-CBN exercised over him.
This argument is futile. Being an exclusive talent does not by itself
mean that Sonza is an employee of ABS-CBN. Even an independent
contractor can validly provide his services exclusively to the hiring
party.
Finally, the Court resolves the nature of Sonzas claims.We agree with
the findings of the Labor Arbiter and the Court of Appeals that Sonzas
claims are all based on the May 1994 agreeent and stock option plan,
and not on the Labor Code. Clearly, the present case does not call for
an application of the Labor Code provisions but an interpretation and
implementation of the May 1994 agreement. In effect, Sonzas cause
of action is for breach of contract which is intrinsically a civil dispute
cognizable by the regular court.






29. From: Bartolome
INSULAR LIFE ASSURANCE, petitioner
vs
NLRC and Basiao, respondent

Facts:
Since 1968, respondent Basiao has been an agent for
petitioner company, and is authorized to solicit within the Philippines
applications for insurance policies and annuities in accordance with
the existing rules and regulations of the company. In return, he would
receive compensation, in the form of commissions.

Some four years later, in April 1972, the parties entered into
another contract an Agency Manager's Contract and to
implement his end of it Basiao organized an agency or office to which
he gave the name M. Basiao and Associates, while concurrently
fulfilling his commitments under the first contract with the Company. In
May, 1979, the Company terminated the Agency Manager's Contract.
After vainly seeking a reconsideration, Basiao sued the Company in a
civil action and this, he was later to claim, prompted the latter to
terminate also his engagement under the first contract and to stop
payment of his commissions starting April 1, 1980.

Basiao thereafter filed with the then Ministry of Labor a
complaint against the Company and its president. The complaint
sought to recover commissions allegedly unpaid thereunder, plus
attorney's fees. The respondents disputed the Ministry's jurisdiction
over Basiao's claim, asserting that he was not the Company's
employee, but an independent contractor.

Issue:
Whether there exists an employer-employee relationship.


Held:
Not every form of control that the hiring party reserves to
himself over the conduct of the party hired in relation to the services
rendered may be accorded the effect of establishing an employer-
employee relationship between them in the legal or technical sense of
the term. A line must be drawn somewhere, if the recognized
distinction between an employee and an individual contractor is not to
vanish altogether.

Logically, the line should be drawn between rules that merely
serve as guidelines towards the achievement of the mutually desired
result without dictating the means or methods to be employed in
attaining it, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first, which aim
only to promote the result, create no employer-employee relationship
unlike the second, which address both the result and the means used
to achieve it. The distinction acquires particular relevance in the case
of an enterprise affected with public interest, as is the business of
insurance, and is on that account subject to regulation by the State
with respect, not only to the relations between insurer and insured but
also to the internal affairs of the insurance company. Rules and
regulations governing the conduct of the business are provided for in
the Insurance Code and enforced by the Insurance Commissioner. It
is, therefore, usual and expected for an insurance company to
promulgate a set of rules to guide its commission agents in selling its
policies that they may not run afoul of the law and what it requires or
prohibits. Of such a character are the rules which prescribe the
qualifications of persons who may be insured, subject insurance
applications to processing and approval by the Company, and also
reserve to the Company the determination of the premiums to be paid
and the schedules of payment. None of these really invades the
agent's contractual prerogative to adopt his own selling methods or to
sell insurance at his own time and convenience, hence cannot
justifiably be said to establish an employer-employee relationship
between him and the company.

The respondents limit themselves to pointing out that Basiao's
contract with the Company bound him to observe and conform to such
rules and regulations as the latter might from time to time prescribe.
No showing has been made that any such rules or regulations were in
fact promulgated, much less that any rules existed or were issued
which effectively controlled or restricted his choice of methods or
the methods themselves of selling insurance. Absent such
showing, the Court will not speculate that any exceptions or
qualifications were imposed on the express provision of the contract
leaving Basiao "..free to exercise his own judgment as to the time,
place and means of soliciting insurance." The Court, therefore, rules
that under the contract invoked by him, Basiao was not an employee
of the petitioner, but a commission agent, an independent contractor
whose claim for unpaid commissions should have been litigated in an
ordinary civil action. NLRC Decision set aside.
























































30. From: Mr. Miranda

FRANCISCO, petitioner
vs
NLRC, respondent

Facts:
Angelina Francisco was hired by the Kasei Corporation during
the incorporation stage. She was designated as Accountant and
Corporate Secretary. She was assigned to handle all accounting
needs . She was also a liaison officer to the City of Makati. She
performed the work of Acting Manager for five years but later she was
replaced by Liza R. Fuentes as Manager. Then, Kasei Corporation
reduced her salary and was not paid her mid-year bonus allegedly
because the company was not earning well. She made repeated
follow-ups with the company cashier but she was advised that the
company was not earning well. Ultimately, she did not report for work
and filed an action for constructive dismissal before the labor arbiter.


Issue:
Whether or not she was considered as an employee.


Held:
In certain cases where the control test is not sufficient to give a
complete picture of the relationship between the parties, owing to the
complexity of such a relationship where several positions have been
held by the worker. There are instances when, aside from the
employers power to control the employee with respect to the means
and methods by which the work is to be accomplished, economic
realities of the employment relations help provide a comprehensive
analysis of the true classification of the individual, whether as
employee, independent contractor, corporate officer or some other
capacity.

The better approach would therefore be to adopt a two-tiered
test involving: (1)the putative employerspower to control the
employee with respect to the means and methods by which the work
is to be accomplished; and (2)the underlying economic realities of the
activity or relationship. This two-tiered test would provide us with a
framework of analysis, which would take into consideration the totality
of circumstances surrounding the true nature of the relationship
between the parties.This is especially appropriate in this case where
there is no written agreement or terms of reference to base the
relationship on; and due to the complexity of the relationship based on
the various positions and responsibilities given to the worker over the
period of the latters employment.Thus, the determination of the
relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as:

1. the extent to which the services performed are an integral part of
the employers business; 2. the extent of the workers investment in
equipment and facilities;3. the nature and degree of control exercised
by the employer; 4. the workers opportunity for profit and loss; 5. the
amount of initiative, skill, judgment or foresight required for the
success of the claimed independent enterprise;6. the permanency
and duration of the relationship between the worker and the employer;
and 7. the degreeof dependency of the worker upon the employer for
his continued employment in that line of business. The proper
standard of economic dependence is whether the worker is
dependent on the alleged employer for his continued employment in
that line of business.

By applying the control test, there is no doubt that petitioner is
an employee of Kasei Corporation because she was under the direct
control and supervision of Seiji Kamura, the corporations Technical
Consultant. She reported for work regularly and served in various
capacities, with substantially the same job functions, that is, rendering
accounting and tax services to the company and performing functions
necessary and desirable for the proper operation of the corporation
such as securing business permits and other licenses over an
indefinite period of engagement. There can be no other conclusion
that she is an employee of respondent Kasei Corporation. She was
selected and engaged by the company for compensation, and is
economically dependent upon respondent for her continued
employment in that line of business. Her main job function involved
accounting and tax services rendered to the corporation on a regular
basis over an indefinite period of engagement. The corporation hired
and engaged her for compensation, with the power to dismiss for
cause. More importantly, the corporation had the power to control her
with the means and methods by which the work is to be
accomplished.
































































31. From: Ms. Roxas




































































32. From: Ms. De Gracia

ALU-TUCP, petitioner
vs
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL
STEEL CORPORATION, respondents
Facts:
This case is a Petition for Certiorari, assailing the Resolution of
the NLRC which declared petitioners to be project employees of
private respondent National Steel Corporation. Petitioners plead that
they had been employed by respondent NSC in connection with its
Five Year Expansion Program for varying lengths of time when they
were separated from NSC's service:
Name of Employees/ Petitioners
1. Alan Barinque
2. Jerry Bontilao
3. Edgar Bontuyan
4. Osias Dandasan
5. Leonido Echavez
6. Darrell Eltagonde
7. Gerry Fetalvero
8. Eduard Fookson
9. Russell Gacus
10. Jose Garguena
11. Eusebio Mejos
12. Bonifacio Mejos
13. Romeo Saron
Petitioners filed separate complaints for unfair labor practice,
regularization and monetary benefits with the NLRC.
Labor Arbiter: declared petitioners "regular project employees who
shall continue their employment as such for as long as such [project]
activity exists," but entitled to the salary of a regular
employee pursuant to the provisions in the collective bargaining
agreement. It also ordered payment of salary differentials.
3

Both parties appealed to the NLRC from that decision.
Petitioners argued that they were regular, not project, employees.
Private respondent, on the other hand, claimed that petitioners are
project employees as they were employed to undertake a specific
project NSC's Five Year Expansion Program.
NLRC: It affirmed the Labor Arbiter's holding that petitioners
were project employees since they were hired to perform work in a
specific undertaking the Five Years Expansion Program, the
completion of which had been determined at the time of their
engagement and which operation was not directly related to the
business of steel manufacturing. however, set aside the award to
petitioners of the same benefits enjoyed by regular employees for lack
of legal and factual basis.
Petitioners argue that they are "regular" employees of NSC
because: (i) their jobs are "necessary, desirable and work-related to
private respondent's main business, steel-making"; and (ii) they have
rendered service for six (6) or more years to private respondent NSC.


Issue:
Whether or not petitioners are properly characterized as
"project employees" rather than "regular employees" of NSC.


Held:
YES. Art. 280. Regular and Casual Employment The
provisions of the written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, and 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.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any employee
who has rendered at least one year service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such actually exists.
It is evidently important to become clear about the meaning
and scope of the term project in the present context. The project
for the carrying out of which project employees are hired would
ordinarily have some relationship to the usual business of the
employer. Exceptionally, the project undertaking might not have an
ordinary or normal relationship to the usual business of the employer.
In this latter case, the determination of the scope and parameters of
the project becomes fairly easy. It is unusual (but still conceivable)
for a company to undertake a project which has absolutely no
relationship to the usual business of the company; thus, for instance,
it would be an unusual steel-making company which would undertake
the breeding and production of fish or the cultivation of vegetables.
From the viewpoint, however, of the legal characterization problem
here presented to the Court, there should be no difficulty in
designating the employees who are retained or hired for the purpose
of undertaking fish culture or the production of vegetables as project
employees, as distinguished from ordinary or regular employees, so
long as the duration and scope of the project were determined or
specified at the time of engagement of the project employees. For,
as is evident from the provisions of Article 280 of the Labor Code,
quoted earlier, the principal test for determining whether particular
employees are properly characterized as project employees as
distinguished from regular employees, is whether or not the project
employees were assigned to carry out a specific project or
undertaking, the duration (and scope) of which were specified at the
time the employees were engaged for that project.
In the realm of business and industry, we note that project
could refer to one or the other of at least two (2) distinguishable types
of activities:

Firstly, a project could refer to a particular job or undertaking that is
within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other
under-takings of the company. Such job or undertaking begins and
ends at determined or determinable times. Example: a particular
construction job or project of a construction company. A construction
company ordinarily carries out two or more discrete identifiable
construction projects: e.g., a twenty-five-storey hotel in Makati; a
residential condominium building in Baguio City; and a domestic air
terminal in Iloilo City. Employees who are hired for the carrying out of
one of these separate projects, the scope and duration of which has
been determined and made known to the employees at the time of
employment, are properly treated as project employees, and their
services may be lawfully terminated at completion of the project.
Secondly: a particular job or undertaking that is not within the regular
business of the corporation. Such a job or undertaking must also be
identifiably separate and distinct from the ordinary or regular business
operations of the employer. The job or undertaking also begins and
ends at determined or determinable times. The case at bar presents
what appears to our mind as a typical example of this kind of project.
Whichever type of project employment is found in a particular
case, a common basic requisite is that the designation of named
employees as project employees and their assignment to a specific
project, are effected and implemented in good faith, and not merely as
a means of evading otherwise applicable requirements of labor laws.
The employment of each project worker is dependent and co-
terminous with the completion or termination of the specific activity or
undertaking [for which] he was hired which has been predetermined at
the time of engagement. Since, there is no showing that they (13
complainants) were engaged to perform work-related activities to the
business of respondent which is steel-making, there is no logical and
legal sense of applying to them the proviso under the second
paragraph of Article 280 of the Labor Code, as amended.
The present case therefore strictly falls under the definition of
project employees on paragraph one of Article 280 of the Labor
Code, as amended. Moreover, it has been held that the length of
service of a project employee is not the controlling test of employment
tenure but whether or not 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.
Petitioners next claim that their service to NSC of more than
six (6) years should qualify them as regular employees. We believe
this claim is without legal basis. The simple fact that the employment
of petitioners as project employees had gone beyond one (1) year,
does not detract from, or legally dissolve, their status as project
employees. The second paragraph of Article 280 of the Labor Code,
quoted above, providing that an employee who has served for at least
one (1) year, shall be considered a regular employee, relates to
casual employees, not to project employees.
ACCORDINGLY, in view of the foregoing, the Petition
for Certiorari is hereby DISMISSED for lack of merit. The Resolutions
of the NLRC dated 8 January 1993 and 15 February 1993 are hereby
AFFIRMED. No pronouncement as to costs.
33. From: Ms. Alota

ABESCO CONSTRUCTION and DEVELOPMENT
CORPORATION, petitioner
vs
ALBERTO RAMIREZ, respondent

Facts:
Petitioner company was engaged in a construction business
where respondents were hired on different dates from 1976 to 1992
either as laborers, road roller operators, painters or drivers

In 1997, respondents filed two separate complaints

for illegal
dismissal against the company and its General Manager, Oscar
Banzon, before the Labor Arbiter (LA). Petitioners allegedly dismissed
them without a valid reason and without due process of law. The
complaints also included claims for non-payment of the 13th month
pay, five days' service incentive leave pay, premium pay for holidays
and rest days, and moral and exemplary damages.

LA declared respondents as regular employees because they
belonged to a "work pool" from which the company drew workers for
assignment to different projects, at its discretion. He ruled that
respondents were hired and re-hired over a period of 18 years, hence,
they were deemed to be regular employees. He likewise found that
their employment was terminated without just cause.

National Labor Relations Commission (NLRC) which affirmed
the LA's decision.

Subsequently, petitioners filed a petition for review in the Court
of Appeals (CA) arguing that they were not liable for illegal dismissal
since respondents' services were merely put on hold until the
resumption of their business operations. They also averred that they
had paid respondents their full wages and benefits as provided by
law, hence, the latter had no more right to further benefits.
The CA was not convinced and dismissed petitioners' appeal.


Issue:
Whether or not the respondents are regular employees.


Held:
The court ruled that respondents were regular employees.
However, we take exception to the reasons cited by the LA (which
both the NLRC and the CA affirmed) in considering respondents as
regular employees and not as project employees.

Contrary to the disquisitions of the LA, employees (like
respondents) who work under different project employment contracts
for several years do not automatically become regular employees;
they can remain as project employees regardless of the number of
years they work. Length of service is not a controlling factor in
determining the nature of one's employment.

Moreover, employees who are members of a "work pool" from
which a company (like petitioner corporation) draws workers for
deployment to its different projects do not become regular employees
by reason of that fact alone. The Court has enunciated in some
cases that members of a "work pool" can either be project employees
or regular employees.

The principal test for determining whether employees are "project
employees" or "regular employees" is whether they are assigned to
carry out a specific project or undertaking, the duration and scope of
which are specified at the time they are engaged for that
project.
10
Such duration, as well as the particular work/service to be
performed, is defined in an employment agreement and is made clear
to the employees at the time of hiring.

In this case, petitioners did not have that kind of agreement
with respondents. Neither did they inform respondents of the nature of
the latter's work at the time of hiring. Hence, for failure of petitioners to
substantiate their claim that respondents were project employees, we
are constrained to declare them as regular employees.

Furthermore, petitioners cannot belatedly argue that
respondents continue to be their employees (so as to escape liability
for illegal dismissal). Before the LA, petitioners staunchly postured
that respondents were only "project employees" whose employment
tenure was coterminous with the projects they were assigned to.
However, before the CA, they took a different stance by insisting that
respondents continued to be their employees. Petitioners' inconsistent
and conflicting positions on their true relation with respondents make
it all the more evident that the latter were indeed their regular
employees.





































34. From: Ms. Talay

D.M. CONSUJI, INC., and/or DAVID M. CONSUJI, petitioner
vs
ESTELITO JAMIN, respondent

Facts:
On December 17, 1968, petitioner DM Consunji Inc. (DMCI) a
construction company, hired respondent EstelitoJamin as a laborer.
Sometime in 1975, Jamin became a helper carpenter. Since his initial
hiring, Jamins employment contract had been renewed a number of
times. On Maech 20, 1999 his work at DMCI was terminated due to
the completion of the SM Manila project and was not rehired again.
On April 1999, he filed a complaint for illegal dismissal against DMCI
and its President David Consunji. Jamin alleged that DMCI terminated
his contact without just and authorized cause. He claimed that he
rendered service to DMCI continuously for almost 31 years but DMCI
denied liability. It argued that it hired Jamin on a project-to-project
basis from the start of his engagement in 1968 until the completion of
its SM Manila project. Labor Arbiter Robles ruled in favor of DMCI and
declared that Jamin was a project employee whose services had been
terminated due to the completion of the project where he was
assigned. On appeal by Jamin, the NLRC dismissed the appeal and
affirmed labor arbiters finding that Jamin was a project employee.
Unsatisfied with the decision of the NLRC, Jamin brought his appeal
to the Court of Appeals. CA rendered its decision reversing the
arbitration rulings. It based its conclusion on 1. Jamins repeated and
successive rehiring in DMCIs various projects and 2. the nature of his
work in the projects- he was performing activities necessary and
desirable in DMCIs construction business.

Issue:
Whether or not J amin is a project employee.


Held:
The Supreme Court held that Jamin is a regular employee.
Jamins employment history with DMCI stands out for his continuous,
repeated and successive rehiring in the companys construction
business. In all the 38 projects where DMCI engaged Jamins
services, the task he performed as a carpenter were indisputably
necessary and desirable in the DMCIs construction business. Citing
the case of Maraguinot, the court held that once a project or work pool
employee has been 1. continuously, as opposed to intermittently,
rehired by the same employer for the same task or nature of task and
2. these tasks are vital, necessary and indispensable to the usual
business or trade of the employer, then the employee must be
deemed a regular employee.
























35. From: Ms. Salvador

FORTUNATO MERCADO, SR., petitioner
vs
NATIONAL LABOR RELATIONS COMMISSION, respondent

Facts:
A petition for certiorari is the decision of the respondent
National Labor Relations Commission (NLRC) which affirmed
the decision of respondent Labor Arbiter Luciano P. Aquino
with the slight modification of deleting the award of financial
assistance to petitioners, and the resolution of the respondent
NLRC denying petitioners' motion for reconsideration.
This petition originated from a complaint for illegal dismissal,
underpayment of wages, non-payment of overtime pay,
holiday pay, service incentive leave benefits, emergency cost
of living allowances and 13th month pay, filed by above-
named petitioners against private respondents Aurora L. Cruz,
Francisco Borja, Leticia C. Borja and Sto. Nio Realty
Incorporated, with Regional Arbitration Branch No. III, National
Labor Relations Commission in San Fernando, Pampanga.
Petitioners alleged in their complaint that they were agricultural
workers utilized by private respondents in all the agricultural
phases of work on the 7 1/2 hectares of ace land and 10
hectares of sugar land owned by the latter; that Fortunato
Mercado, Sr. and Leon Santillan worked in the farm of private
respondents since 1949, Fortunato Mercado, Jr. and Antonio
Mercado since 1972 and the rest of the petitioners since 1960
up to April 1979, when they were all allegedly dismissed from
their employment; and that, during the period of their
employment, petitioners received the following daily wages:
From 1962-1963 P1.50
1963-1965 P2.00
1965-1967 P3.00
1967-1970 P4.00
1970-1973 P5.00
1973-1975 P5.00
1975-1978
P6.00
1978-1979
P7.00
Private respondent Aurora Cruz in her answer to petitioners'
complaint denied that said petitioners were her regular
employees and instead averred that she engaged their
services, through Spouses Fortunato Mercado, Sr. and Rosa
Mercado, their "mandarols", that is, persons who take charge
in supplying the number of workers needed by owners of
various farms, but only to do a particular phase of agricultural
work necessary in rice production and/or sugar cane
production, after which they would be free to render services
to other farm owners who need their services.
Respondent Labor Arbiter Luciano P. Aquino ruled in favor of
private respondents and held that petitioners were not regular
and permanent workers of the private respondents, for the
nature of the terms and conditions of their hiring reveal that
they were required to perform phases of agricultural work for a
definite period of time after which their services would be
available to any other farm owner. Respondent Labor Arbiter
deemed petitioners' contention of working twelve (12) hours a
day the whole year round in the farm, an exaggeration, for the
reason that the planting of lice and sugar cane does not entail
a whole year as reported in the findings of the Chief of the
NLRC Special Task Force. Even the sworn statement of one
of the petitioners, Fortunato Mercado, Jr., the son of spouses
Fortunato Mercado, Sr. and Rosa Mercado, indubitably show
that said petitioners were hired only as casuals, on an "on and
off" basis, thus, it was within the prerogative of private
respondent Aurora Cruz either to take in the petitioners to do
further work or not after any single phase of agricultural work
had been completed by them.
Both parties filed their appeal with the National Labor
Relations Commissions (NLRC). Petitioners questioned
respondent Labor Arbiter's finding that they were not regular
and permanent employees of private respondent Aurora Cruz
while private respondents questioned the award of financial
assistance granted by respondent Labor Arbiter.
The NLRC ruled in favor of private respondents affirming the
decision of the respondent Labor Arbiter, with the modification
of the deletion of the award for financial assistance to
petitioners.
Petitioners filed a motion for reconsideration of the Decision of
the Third Division of the NLRC dated 8 August 1984; however,
the NLRC denied tills motion in a resolution dated 17 August
1987.


Issue:
Whether or not the petitioners are regular and permanent
workers and therefore entitled to benefits they pray for.


Held:
The case was dismissed.
The contention of petitioners that the second paragraph of
Article 280 of the Labor Code should have been applied in
their case presents an opportunity to clarify the afore-
mentioned provision of law.
Article 280 of the Labor Code reads in full:
Article 280. Regular and Casual Employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
performed is seasonal in nature and the employment is
for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That,
any employee who has rendered at least one year of
service whether such service is continuous or broken,
shall be considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such actually exists.
The first paragraph answers the question of who are
employees. It states that, regardless of any written or oral
agreement to the contrary, an employee is deemed regular
where he is engaged in necessary or desirable activities in the
usual business or trade of the employer, except for project
employees.
A project employee has been defined to be one whose
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 service to be performed is seasonal in
nature and the employment is for the duration of the season
The second paragraph of Art. 280 demarcates as "casual"
employees, all other employees who do not fan under the
definition of the preceding paragraph. The proviso, in said
second paragraph, deems as regular employees those
"casual" employees who have rendered at least one year of
service regardless of the fact that such service may be
continuous or broken
The general rule is that the office of a proviso is to qualify or
modify only the phrase immediately preceding it or restrain or
limit the generality of the clause that it immediately
follows. The only exception to this rule is where the clear
legislative intent is to restrain or qualify not only the phrase
immediately preceding it (the proviso) but also earlier
provisions of the statute or even the statute itself as a whole.
Policy Instruction No. 12 of the Department of Labor and
Employment discloses that the concept of regular and casual
employees was designed to put an end to casual employment
in regular jobs, which has been abused by many employers to
prevent called casuals from enjoying the benefits of regular
employees or to prevent casuals from joining unions. The
same instructions show that the proviso in the second
paragraph of Art. 280 was not designed to stifle small-scale
businesses nor to oppress agricultural land owners to further
the interests of laborers, whether agricultural or industrial.
What it seeks to eliminate are abuses of employers against
their employees and not, as petitioners would have us believe,
to prevent small-scale businesses from engaging in legitimate
methods to realize profit. Hence, the proviso is applicable only
to the employees who are deemed "casuals" but not to the
"project" employees nor the regular employees treated in
paragraph one of Art. 280.
Clearly, therefore, petitioners being project employees, or, to
use the correct term, seasonal employees, their employment
legally ends upon completion of the project or the season. The
termination of their employment cannot and should not
constitute an illegal dismissal.


















































36. From: Mr. Bacalso

HACIENDA FATIMA, petitioner
vs
NATIONAL FEDERATION OF SUGARCANE WORKERS,
respondent

Facts:
It would appear that respondents did not look with favor
workers' having organized themselves into a union. Thus, when
complainant union was certified as the collective bargaining
representative in the certification elections, respondents under the
pretext that the result was on appeal, refused to sit down with the
union for the purpose of entering into a collective bargaining
agreement. Moreover, the workers including complainants herein
were not given work for more than one month. In protest,
complainants staged a strike which was however settled upon the
signing of a Memorandum of Agreement. However, because the
petitioners were unable to comply with one of the stipulation in the
MOA, respondents reneged on its commitment to sit down and
bargain collectively. Moreover, starting September 1991, respondents
did not any more give work assignments to the complainants forcing
the union to stage a strike on January 2, 1992. But due to the
conciliation efforts by the DOLE, another Memorandum of Agreement
was signed by the complainants and respondents.

The National Labor Relations Commission ruled in favour of
the workers which was affirmed by the Court of Appeals. The CA
affirmed that while the work of respondents was seasonal in nature,
they were considered to be merely on leave during the off-season and
were therefore still employed by petitioners. Moreover, the workers
enjoyed security of tenure. Any infringement upon this right was
deemed by the CA to be tantamount to illegal dismissal.The appellate
court found neither "rhyme nor reason in petitioner's argument that it
was the workers themselves who refused to or were choosy in their
work." As found by the NLRC, the record of this case is "replete with
complainants' persistence and dogged determination in going back to
work."


Issue:
Whether or not the workers are considered regular
employees.


Held:
YES. Article 280 of the Labor Code, as amended, states:
Art. 280. Regular and Casual Employment. The provisions
of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to
be performed is seasonal in nature and the employment is for
the duration of the season.

An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, that, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while
such activity exist.

For respondents to be excluded from those classified as
regular employees, it is not enough that they perform work or services
that are seasonal in nature. They must have also been employed only
for the duration of one season. The evidence proves the existence of
the first, but not of the second, condition.

The CA did not err when it ruled that Mercado v. NLRC was
not applicable to the case at bar. In the earlier case, the workers were
required to perform phases of agricultural work for a definite period of
time, after which their services would be available to any other farm
owner. They were not hired regularly and repeatedly for the same
phase/s of agricultural work, but on and off for any single phase
thereof. On the other hand, herein respondents, having performed the
same tasks for petitioners every season for several years, are
considered the latter's regular employees for their respective tasks.

Where there is no showing of clear, valid and legal cause for
the termination of employment, the law considers the matter a case of
illegal dismissal and the burden is on the employer to prove that the
termination was for a valid and authorized cause. In the case at bar,
petitioners failed to prove any such cause for the dismissal of
respondents who, as discussed above, are regular employees.

























































37. From: Ms. Laingan

HACIENDA BINO/ HORTENCIA STARKE, INC., petitioners
vs
CANDIDO CUENCA, respondent

Facts:
Hacienda Bino is a 236-hectare sugar plantation located at
Barangay Orong, Kabankalan City, Negros Occidental, and
represented in this case by Hortencia L. Starke, owner and operator
of the said hacienda.

The 76 respondents were part of the 220 employees of the
Hacienda Bino performing various works sucha s cultivation, planting
of cane points, fertilization, watering, weeding, harvesting and loading
of harvested sugarcanes to cargo trucks.

On July 18, 1996, during the off-milling season, Starke issued
an Order of Notice which states that those employees who are in
favor of CARP means that they are expressing their desire to get out
of employment on their own volition. That beginning that day, those
employees who did not sign for CARP will be given employment by
Hacienda Bino.

The respondents regarded such notice as termination of their
employment. As a consequence, the respondents filed a complaint
against illegal dismissal, wage differentials, 13
th
month pay, holiday
pay, premium pay for holiday, service incentive leave pay, moral and
exemplary damages with the NLRC.

In their Joint Sworn Statement, the respondents as
complainants alleged inter alia that they are regular and permanent
workers of the hacienda and that they were dismissed without just and
lawful cause. They further alleged that they were dismissed because
they applied as beneficiaries under the Comprehensive Agrarian
Reform Program (CARP) over the land owned by petitioner Starke.
On October 6, 1997, Labor Arbiter Ray Allan T. Drilon rendered a
Decision, finding that petitioner Starkes notice dated July 18, 1996
was tantamount to a termination of the respondents services, and
holding that the petitioner company was guilty of illegal dismissal.


Issues:
Whether or not the ruling in the case of Mercado Sr. v.
NLRC, following the Doctrine of Stare Decisis should be applied
in the case.

Whether or not the seasonal natures of the performance
of work or services by respondents exclude them from
thoseclassified as regular employees.


Held:
In the case of Mercado Sr. v. NLRC , the petitioners, who were
sugar workers, were classified as seasonal employees and not
regular employees because: (a) they worked only for a definite period
for the farm owner; (b) they were free to contract their services with
other farm owners, which they did; (c) they were not hired regularly
and repeatedly for the same phase/s of agricultural work, but on and
off for any single phase thereof; and (d) considering that the area of
the land in question (17hectares) was comparatively small, the
planting of rice and sugar cane thereon could not possibly entail a
whole year operation. Notwithstanding the ruling in the Mercado case,
the Supreme Court held that the same does not operate to abandon
the settled doctrine that sugar workers are considered regular and
permanent farm workers of a sugar plantation owner, the reason
being that the facts involved in this case are different from the case of
Mercado. The disparity in facts between the Mercado case and the
instant case is best exemplified by the fact that the decision in the
former ruled on the status of employment of farm laborers while the
latter presents a different factual condition as the enormity of the size
of the sugar hacienda of petitioner (236 hectares) simply do not allow
for private respondents to render work only for a definite period.The
Doctrine of Stare Decisis, therefore, finds no relevance in the case at
bar.
The CA correctly found that the facts involved in this case are different
from the Mercado case; therefore, the ruling in that case cannot be
applied to the case at bar, thus:

We do not find the concept of stare decisis relevant in the case at
bench. For although in the Mercado case, the Supreme Court held the
petitioners who were sugar workers not to be regular but seasonal
workers, nevertheless, the same does not operate to abandon the
settled doctrine of the High Court that sugar workers are considered
regular and permanent farm workers of a sugar plantation owner, the
reason being that there are facts present that are peculiar to the
Mercado case. The disparity in facts between the Mercado case and
the instant case is best exemplified by the fact that the former
decision ruled on the status of employment of farm laborers, who, as
found by the labor arbiter, work only for a definite period for a farm
worker, after which they offer their services to other farm owners,
considering the area in question being comparatively small,
comprising of seventeen and a half (17) hectares of land, such that
the planting of rice and sugar cane thereon could not possibly entail a
whole year operation. The herein case presents a different factual
condition as the enormity of the size of the sugar hacienda of
petitioner, with an area of two hundred thirty-six (236) hectares,
simply do not allow for private respondents to render work only for a
definite period.

For respondents to be excluded from those classified as
regular employees, it is not enough that they perform work orservices
that are seasonal in nature. They must have been employed only for
the duration of one season. While the recordssufficiently show that the
respondents work in the hacienda was seasonal in nature, there was,
however, no proof that they were hired for the duration of one season
only. The petitioners did not present any evidence that the
respondents wererequired to perform certain phases of agricultural
work for a definite period of time. The payrolls, submitted in evidence
bythe petitioners, show that they availed the services of the
respondents since 1991. Absent any proof to the contrary, thegeneral
rule of regular employment should therefore stand. It bears stressing
that the employer has the burden of proving the lawfulness of his
employees dismissal. The primary standard for determining regular
employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or
business of the employer. There is no doubt that the respondents
were performing work necessary and desirable in the usual trade or
business of an employer. Hence, they can properly be classified as
regular employees.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.
The Decision of the Court of Appeals, dated July 31, 2001, and its
Resolution dated September 24, 2001 are hereby AFFIRMED.