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Topic 1 Cases
1. [G.R. No. 126383. November 28, 1997.]
SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA.
CONSUELOMAQUILING, LEONARDO MARTINEZ, DOMINGO ELA, JR.,
RODOLFO CALUCIN, JR.,PERLA MENDOZA, REX RAPHAEL REYES, ROGELIO
BELMONTE, AND 375 OTHEREMPLOYEE-UNION MEMBERS, petitioners, vs.
NATIONAL LABOR RELATIONSCOMMISSION, and SAN JUAN DE DIOS
HOSPITAL, respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; REPUBLIC ACT NO. 5901 (AN ACT
PRESCRIBING FORTY HOURS A WEEK OF LABORFOR GOVERNMENT AND
PRIVATE HOSPITALSOR CLINIC PERSONNEL); REPEALED WITH THE PASSAGE
OF THE LABOR CODE ON MAY 1, 1974. Policy Instruction No. 54 relies and
purports to implement Republic Act No. 5901, otherwise known as "An Act
Prescribing Forty Hours a Week of Labor for Government and Private Hospitals
or Clinic Personnel", enacted on June 21, 1969. Reliance on Republic Act
No.5901, however is misplaced for the said statute, as correctly ruled by
respondent NLRC, has long been repealed with the passage of the Labor Code
on May 1, 1974, Article 302 of which explicitly provides: "All labor laws not
adopted as part of this Code either directly or by reference are repealed. All
provisions of existing laws, orders, decrees, rules and regulations inconsistent
herewith are likewise repealed."2. ID.; LABOR CODE; ARTICLE 83 THEREOF
CONSTRUED; ADMINISTRATIVEINTERPRETATION; THE COURT MAY STRIKE
DOWN INTERPRETATION THAT DEVIATES FROMTHE PROVISION OF THE
STATUTE. Only Article 83 of the Labor Code which appears to have
substantially incorporated or reproduced the basic provisions of Republic Act
No. 5901 may support Policy Instructions No. 54 on which the latter's validity
may be gauged. A cursory reading of Article 83 of the Labor Code betrays
petitioners' position that "hospital employees" are entitled to "a full weekly
salary with paid two (2) days' off if they have completed the 40-hours/5-day
work week". What Article 83 merely provides are: (1) the regular office hour
of eight hours a day, five days per week for health personnel, and (2) where
the exigencies of service require that health personnel work for six days or
forty-eight hours then such health personnel shall be entitled to an additional
compensation of at least thirty percent of the irregular wage for work on the
sixth day. There is nothing in the law that supports then Secretary of Labor's
assertion that "personnel in subject hospitals and clinics are entitled to a full
weekly wage for seven (7) days if they have completed the 40-hours/5-day
work week in any given workweek." Needless to say, the Secretary of Labor
exceeded his authority by including a two days off with pay in contravention
of the clear mandate of the statute. Such act the Court shall not
countenance. Administrative interpretation of the law is at best merely
advisory, and the Court will not hesitate to strike down an administrative
interpretation that deviates from the provision of the statute.3. ID.;
SECRETARY OF LABOR'S POLICY INSTRUCTIONS NO. 54; DECLARED VOID BY

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THE COURT; RATIONALE. Even if the Court was to subscribe with
petitioner's erroneous assertion that Republic Act No. 5901 has neither been
amended nor repealed by the Labor Code, we nevertheless find Policy
Instructions No. 54 invalid. A perusal of Republic Act No.5901 reveals nothing
therein that gives two days off with pay for health personnel whocomplete a
40 or 5-day workweek. In fact, the Explanatory Note of House Bill No. 16630
(later passed into law as Republic Act No. 5901) explicitly states that the
bill's sole purpose is to shorten the working hours of health
personnel and not to dole out a two-days off with pay. Further,
petitioners' position is also negated by the very rules and regulations
promulgated by the Bureau of Labor Standards which implement Republic Act
No. 5901. If petitioners are entitled to two days off with pay, then there
appears to be no sense at all why Section 15 of the implementing rules
grants additional compensation equivalent to the regular rate plus at least
twenty-five percent thereof for work performed on Sunday to health
personnel, or an" additional straight-time pay which must be equivalent at
least to the regular rate" "[f]or work performed in excess of forty hours a
week . . . Policy Instructions No. 54 to the Court's mind unduly extended the
statute. The Secretary of Labor moreover erred in invoking the "spirit and
intent" of Republic Act No. 5901 and Article 83 of the Labor Code for it is an
elementary rule of statutory construction that when the language of the law
is clear and unequivocal, the law must be taken to mean exactly what it says.
No additions or revisions may be permitted. Policy Instructions No. 54 being
inconsistent with and repugnant to the provisions of Article 83 of the Labor
Code, as well as to Republic Act No. 5901, should be, as it is hereby; declared
void.
FACTS: The rank-and-file employee-union officers and members of San Juan
De Dios Hospital Employees Association, sent on July 08, 1991, a letter with
attached support signatures requesting and pleading for the expeditious
implementation and payment by respondent" Juan De Dios Hospital "of the
'40-HOURS/5-DAY WORKWEEK' with compensable weekly two (2) days off
provided for by Republic Act 5901 as clarified for enforcement by the
Secretary of Labor's Policy Instructions No. 54 dated April 12, 1988."
Respondent hospital failed to give a favorable response; thus, petitioners filed
a complaint regarding their "claims for statutory benefits under the abovecited law and policy issuance. The Labor Arbiter dismissed the complaint.
Petitioners appealed before public respondent National Labor Relations
Commission (NLRC), which affirmed the Labor Arbiter's decision. Petitioners'
subsequent motion for reconsideration was denied; hence, this petition under
Rule 65 of the Rules of Court ascribing grave abuse of discretion on the part
of NLRC in concluding that Policy Instructions No. 54 "proceeds from a wrong
interpretation of RA 5901" and Article 83 of the Labor Code.
ISSUE: Whether Policy Instructions No. 54 issued by then Labor Secretary
Franklin M. Drilon is valid or not?

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HELD: Content of POLICY INSTRUCTIONS NO. 54 provides personnel in
subject hospital and clinics entitled to a full weekly wage for seven (7) days if
they have completed the 40-hour/5-dayworkweek in any given workweek
which was declared void by SC. We note that Policy Instruction No. 54 relies
and purports to implement Republic Act No. 5901, otherwise known as "An
Act Prescribing Forty Hours a Week of Labor for Government and Private
Hospitals or Clinic Personnel", enacted on June 21, 1969. Reliance on Republic
Act No.5901, however, is misplaced for the said statute, as correctly ruled by
respondent NLRC, has long been repealed with the passage of the Labor Code
on May 1, 1974, Article 302 of which explicitly provides: "All labor laws not
adopted as part of this Code either directly or by reference are hereby
repealed. All provisions of existing laws, orders, decree, rules and regulations
inconsistent herewith are likewise repealed." Accordingly, only Article 83 of
the Labor Code which appears to have substantially incorporated or
reproduced the basic provisions of Republic Act No. 5901 may support Policy
Instructions No. 54 on which the latter's validity may be gauged. A cursory
reading of Article 83 of the Labor Code betrays petitioners' position that
"hospital employees" are entitled to "a full weekly salary with paid two (2)
days' off if they have completed the 40-hour/5-day workweek". What Article
83 merely provides are: (1) the regular office hour of eight hours a day, five
days per week for health personnel, and (2) where the exigencies of service
require that health personnel work for six days or forty-eight hours then such
health personnel shall be entitled to an additional compensation of at least
thirty percent of their regular wage for work on the sixth day. There is nothing
in the law that supports then Secretary of Labor's assertion that "personnel in
subject hospitals and clinics are entitled to full weekly wage for seven (7)
days if they have completed the 40-hour/5-day workweek in any given
workweek". Needless to say, the Secretary of Labor exceeded his authority by
including two days off with pay in contravention of the clear mandate of the
statute. Such act the Court shall not countenance. Administrative
interpretation of the law, we reiterate, is at best merely advisory, and the
Court will not hesitate to strike down an administrative interpretation that
deviates from the provision of the statute. Indeed, even if we were to
subscribe with petitioners' erroneous assertion that Republic Act No.5901 has
neither been amended nor repealed by the Labor Code, we nevertheless find
Policy Instructions No. 54 invalid. A perusal of Republic Act No. 5901 reveals
nothing therein that gives two days off with pay for health personnel who
complete a 40-hour work or 5-dayworkweek. In fact, the Explanatory Note of
House Bill No. 16630 (later passed into law as Republic Act No. 5901)
explicitly states that the bill's sole purpose is to shorten the working hours of
health personnel and not to dole out a two days off with pay. The Secretary of
Labor moreover erred in invoking the "spirit and intent" of Republic Act
No.5901 and Article 83 of the Labor Code for it is an elementary rule of
statutory construction that when the language of the law is clear and
unequivocal, the law must be taken to mean exactly what it says. 9 No
additions or revisions may be permitted. Policy Instructions No. 54 being
inconsistent with and repugnant to the provision of Article 83 of the Labor

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Code, as well as to Republic Act No. 5901, should be, as it is hereby, declared
void.
2. [G.R. No. 101279. August 6, 1992.]
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. petitioner,
vs. HON.RUBEN D. TORRES, as Secretary of the Department of Labor
& Employment, andJOSE N. SARMIENTO, as Administrator of the
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents.
FACTS: DOLE Secretary Ruben D. Torres issued Department Order No. 16
Series of 1991 temporarily suspending the recruitment by private
employment agencies of Filipino domestic helpers going to Hong Kong. As
a result of the department order DOLE, through the POEA took over the
business of deploying Hong Kong bound workers. The petitioner, PASEI, the
largest organization of private employment and recruitment agencies duly
licensed and authorized by the POEA to engage in the business of obtaining
overseas employment for Filipino land-based workers filed a petition for
prohibition to annul the aforementioned order and to prohibit
implementation.
ISSUES:
(1) Whether or not respondents acted with grave abuse of discretion and/or in
excess of their rule-making authority in issuing said circulars;
(2) whether or not the assailed DOLE and POEA circulars are contrary to the
Constitution, are unreasonable, unfair and oppressive; and
(3) Whether or not the requirements of publication and filing with the Office
of the National Administrative Register were not complied with.
HELD: FIRST, the respondents acted well within in their authority and did not
commit grave abuse of discretion. This is because Article 36 (LC) clearly
grants the Labor Secretary to restrict and regulate recruitment and
placement activities, to wit: Art. 36. Regulatory Power. The Secretary of
Labor shall have the power to restrict and regulate the recruitment and
placement activities of all agencies within the coverage of this title
[Regulation of Recruitment and Placement Activities] and is hereby
authorized to issue orders and promulgate rules and regulations to carry out
the objectives and implement the provisions of this title.
SECOND, the vesture of quasi-legislative and quasi-judicial powers in
administrative bodies is constitutional. It is necessitated by the growing
complexities of the modern society.
THIRD, the orders and circulars issued are however, invalid and
unenforceable. The reason is the lack of proper publication and filing in the
Office of the National Administrative Registrar as required in Article 2 of the
Civil Code to wit: Art. 2. Laws shall take effect after fifteen (15) days following
the completion of their publication in the Official Gazette, unless it is
otherwise provided; Article 5 of the Labor Code to wit: Art. 5. Rules and

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Regulations. The Department of Labor and other government agencies
charged with the administration and enforcement of this Code or any of its
parts shall promulgate the necessary implementing rules and regulations.
Such rules and regulations shall become effective fifteen (15) days after
announcement of their adoption in newspapers of general circulation; and
Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987
which provide: Sec. 3. Filing. (1) every agency shall file with the University
of the Philippines Law Center, three (3) certified copies of every rule adopted
by it. Rules in force on the date of effectivity of this Code which are not filed
within three (3) months shall not thereafter be the basis of any sanction
against any party or persons. (Chapter 2, Book VII of the Administrative Code
of 1987.)Sec. 4. Effectivity. In addition to other rule-making requirements
provided by law not inconsistent with this Book, each rule shall become
effective fifteen (15) days from the date of filing as above provided unless a
different date is fixed by law, or specified in the rule in cases of imminent
danger to public health, safety and welfare, the existence of which must be
expressed in a statement accompanying the rule. The agency shall take
appropriate measures to make emergency rules known to persons who may
be affected by them. (Chapter 2, Book VII of the Administrative Code of
1987). Prohibition granted.
3.

[G.R. No. 162308, November 22, 2006]G & M PHILIPPINES, INC.,

PETITIONER, VS. ROMIL V. CUAMBOT, RESPONDENT.
FACTS: Cuambot was an overseas worker who was deployed to Saudi Arabia
to work as a car bodybuilder in Al Waha Workshop in Unaizah City, by
petitioner G & M Philippines. Before his two-year contract was terminated
Cuambot returned to the Philippines where he filed a complaint in the NLRC
against his recruitment agency, herein petitioner, for unpaid wages, withheld
salaries, refund of plane ticket and repatriation bond, later amended to
include illegal dismissal, claim for the unexpired portion of his employment
contract, actual, exemplary and moral damages, and attorneys fees.
Petitioner, in defense, presented copies of 7 pay slips issued in favor of
Cuambot. Cuambot countered that his signatures in the pays lips were forged
and further claims that he never got his salaries except only for the SAR100
as monthly allowance. G&M answered back by saying that there was great
possibility that Cuambot had changed his signature while abroad so that he
could file a complaint or illegal dismissal upon his return.
ISSUES: 1. whether or not the respondents signatures are mere forgeries
2. Whether respondent executed the resignation letter
HELD: After examination of the evidence on record, the petition must fail.
The petitioners attempts at establishing its case are not enough to convince
the court of the veracity of its claims. Amongst other things, the petitioner
failed to submit the original copies of the pay slips and the resignation letter
to prove that they were actually penned by respondent, they failed to submit

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an original copy of the employment contract to prove that they had actually
given a copy of such to respondent for him to sign, and a cursory look at the
resignation letter and the handwritten pays lips show that they were written
by one person. Indeed, the rule is that all doubts in the implementation and
the interpretation of the Labor Code shall be resolved in favor of labor, in
order to give effect to the policy of the State to afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex,
race or creed, and regulate the relations between workers and employers,
and to assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work. It is a well-settled
doctrine, that if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of
the latter. It is a time-honored rule that in controversies between a laborer
and his master, doubts reasonably arising from the evidence, or in the
interpretation of agreements and writing should be resolved in the formers
favor. The policy is to extend the doctrine to a greater number of employees
who can avail of the benefits under the law, which is in consonance with the
avowed policy of the State to give maximum aid and protection of labor.
Moreover, one who pleads payment has the burden of proving it. The reason
for the rule is that the pertinent personnel files, payrolls, records, remittances
and other similar documents which will show that overtime, differentials,
service incentive leave, and other claims of workers have been paid are not
in the possession of the worker but in the custody and absolute control of the
employer. Thus, the burden of showing with legal certainty that the obligation
has been discharged with payment falls on the debtor, in accordance with the
rule that one who pleads payment has the burden of proving it. Only when
the debtor introduces evidence that the obligation has been extinguished
does the burden shift to the creditor, who is then under a duty of producing
evidence to show why payment does not extinguish the obligation In this
case, petitioner was unable to present ample evidence to prove its claim that
respondent had received all his salaries and benefits in full. Petition denied
for lack of merit.
[G.R. No. 138051 June 10, 2004] JOSE Y. SONZA, petitioner,vs. respondent.
FACTS
ABS-CBN BROADCASTINGCORPORATION,
ABS-CBN signed an Agreement with the Mel and Jay Management and
Development Corporation (MJMDC). Referred to as AGENT , MJMDC agreed to
provide Jay Sonza s services exclusively to ABS-CBN as talent. After more
than two years, Sonza as agent of MJMDC wrote a letter to ABS-CBN notifying
them of the former s intention to rescind the agreement. Sonza waived and
renounced the recovery of the remaining amounts stipulated in the
agreement but reserved the right to seek the recovery of other benefits
under the same. Later, SONZA filed a complaint against ABS-CBN before the
DOLE-NCR, alleging that ABS-CBN did not pay his salaries, separation pay,

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service incentive leave pay, 13th month pay, signing bonus, travel allowance
and amounts due under the Employees Stock Option Plan ("ESOP"). In
response ABS-CBN filed a Motion to Dismiss on the ground that no employeremployee relationship existed between the parties. Meanwhile, pursuant to
the Agreement, ABS-CBN continued to remit SONZA s monthly talent fees
through his account at PCIBank. ABS-CBN later opened a new account with
the same bank where ABS-CBN deposited SONZA s talent fees and other
payments due him under the Agreement.
ISSUE : Whether or not there existed an employee-employer relationship
between Sonza and ABS-CBN.
HELD: Applying the four fold test, there is no employee-employer
relationship. The elements of an employer-employee relationship are: (a) the
selection and engagement of the employee; (b)the payment of wages; (c) the
power of dismissal; and (d) the employer s power to control the employee on
the means and methods by which the work is accomplished. The last
element, the so-called "control test", is the most important element.
A. Selection and Engagement of Employee
Sonza says that independent contractors often present themselves as
persons distinguishable form other employees because of their unique
skills, expertise or talent. He however is not such because of the fact that
there are other broadcasters with similar experience and qualification.
This is not independent contractorship therefore because of the presence
of other such capable individuals. The Supreme Court held that the
selection of Sonza because of unique expertise and skills is a
circumstance indicative, but not conclusive of an independent contractual
relationship. Also, if indeed Sonza did not possess such skills, ABS CBN
would not have entered into the Agreement but would have hired him
through the personnel department just like an ordinary employee. In any
event, the method of selecting and engaging does not conclusively
determine his status.
B. Payment of Wages
Sonza claims that because his monthly fees all went to him and not to
MJMDC as well as all the benefits and privileges indicate his status as
employee. The court said that the compensation and the mode of
payment was all a result of negotiations that led to the Agreement. If
indeed Sonza were an employee, there would be no need for negotiation
because these benefits are deemed incorporated into the contract. His
talent fees are likewise so huge and out of the ordinary that they indicate
more an independent contractual relationship rather than an employeremployee relationship. Also, the power to bargain talent fees is a
circumstance indicative, but not conclusive, of an independent
contractual relationship.
C. POWER OF DISMISSAL

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For violation of any provision of the Agreement, either party may
terminate their relationship. Sonza failed to show that ABS CBN could
terminate his services on grounds other than breach of contract, such as
retrenchment to prevent losses as provided under labor laws. In fact,
illustrative of the power of the Agreement, ABS CBN continued to pay
Sonza monthly fees even of they suffered losses because it was what the
stipulations commanded.
D. POWER OF CONTROL
This last test is based on the extent the hirer has control over the worker.
The greater the supervision and control over the hirer exercises, the more
likely the worker is deemed an employee. The converse holds true as well
the less control the hirer exercises, the more likely the worker is
considered an independent contractor.
First, Sonza s argument that ABS CBN exercised control over the means
and methods of his work is misplaced. He was engaged to co-host a TV
program and nothing more. How he delivered is lines, appeared on
television, and sounded on the radio were outside the control of ABS CBN.
He did not have to render 8 hours of work daily. The only prohibition was
that he could not criticize ABS CBN or its interests. Obviously SONZA had
a free hand on what to say or discuss in his shows provided he did not
attack ABS-CBN or its interests. Clearly, ABS-CBN did not exercise control
over the means and methods of performance of SONZA s work. Sonza
also claims that ABS CBN s power not to broadcast his show tells of its
power over the methods and means of his work. The argument fails
because although ABS CBN had this right

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under the agreement, it could not even dismiss nor discipline Sonza because
it still had to continue paying him. This shows that ABS CBN s control
extended only to the result of Sonza s work.
Next, Sonza claims that ABS CBN exercise control by providing him
with all the equipment and crew. However, these are not the tools and
instrumentalities SONZA needed to perform his job. What SONZA principally
needed were his talent or skills and the costumes necessary for his
appearance. SONZA urges us to rule that he was ABS-CBN s employee
because ABS-CBN subjected him to its rules and standards of performance.
The Agreement stipulates that SONZA shall abide with the rules and
standards of performance "covering talents" of ABS-CBN. The Agreement
does not require SONZA to comply with the rules and standards of
performance prescribed for employees of ABS-CBN. In this case, SONZA failed
to show that these rules controlled his performance. We find that these
general rules are merely guidelines towards the achievement of the mutually
desired result, which are top-rating television and radio programs that comply
with standards of the industry. Lastly, SONZA insists that the "exclusivity
clause" in the Agreement is the most extreme form of control which ABS-CBN
exercised over him. This argument is futile. Even an independent contractor
can validly provide his services exclusively to the hiring party. MJMDC as
AGENT of SONZA Sonza says that it is wrong to say that he is a talent of
MJMDC. He insists that MJMDC is a labor-only contractor and ABS CBN is his
employer.
In a labor-only contract, there are three parties involved: (1) the "laboronly" contractor; (2) the employee who is ostensibly under the employ of the
"labor-only" contractor; and (3) the principal who is deemed the real
employer. Under this scheme, the "labor-only" contractor is the agent of the
principal. The law makes the principal responsible to the employees of the
"labor-only contractor" as if the principal itself directly hired or employed the
employees. These circumstances are not present in this case. There are
essentially only two parties involved under the Agreement, namely, SONZA
and ABSCBN. MJMDC merely acted as SONZA s agent. Talents as Independent
Contractors ABS-CBN claims that there exists a prevailing practice in the
broadcast and entertainment industries to treat talents like SONZA as
independent contractors. SONZA argues that if such practice exists, it is void
for violating the right of labor to security of tenure. The right of labor to
security of tenure as guaranteed in the Constitution arises only if there is an
employer employee relationship under labor laws. Not every performance of
services for a fee creates an employer-employee relationship. To hold that
every person who renders services to another for a fee is an employee - to
give meaning to the security of tenure clause - will lead to absurd results.
Individuals with special skills, expertise or talent enjoy the freedom to offer
their services as independent contractors. The right to life and livelihood
guarantees this freedom to contract as independent contractors. The right of
labor to security of tenure cannot operate to deprive an individual, possessed
with special skills, expertise and talent, of his right to contract as an
independent contractor. An individual like an artist or talent has a right to

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render his services without any one controlling the means and methods by
which he performs his art or craft. This Court will not interpret the right of
labor to security of tenure to compel artists and talents to render their
services only as employees. If radio and television program hosts can render
their services only as employees, the station owners and managers can
dictate to the radio and television hosts what they say in their shows. This is
not conducive to freedom of the press. Petition denied.