Labor

GENERAL PRINCIPLES!
SONZA, petitioner, vs . ABS-CBN, respondent.

G.R. No. 138051, June 10, 2004
FACTS:
ABS-CBN engaged SONZAs services as manifested in an Agreement between ABS-CBN and MJMDC (Mel
and Jay Management and Development Corporation) - referred to in the agreement as Agent, who agreed to pro-
vide Sonzas services as talent for radio and television exclusively to ABS-CBN.
Sonza wrote a letter to ABS-CBN president for the recession of the agreement through his capacity as president
of the MJMDC.
Sonza filed a complaint against ABS-CBN before the DOLE. In his complaint, ABS-CBN did not pay his
salaries, separation pay, service incentive pay, 13th month pay, signing bonus travel allowance and other amounts
due.
a) Petitioners Arguments (SONZA Lost)

Sonza insists that there existed an employer-employee relationship between him and ABS-CBN because first,
abs-cbn exercised control over the means and methods of his work and second, abs-cbn subjected him to its rules
and standards of performance.
b) Respondents Arguments (ABS-CBN - Win)

ABS-CBN grounded their defense that no employee-employer relationship existed. They engaged SONZAs
services specifically because of his unique skills, talent and celebrity status not possessed by ordinary employees
which is a circumstance indicative of an independent contractual relationship.
ISSUE:
Whether or not there exists an employer-employee relationship between a television station and its talents.
RULING:
There is no employer-employee relationship.
Rule:
Case law has consistently held that 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.
There is no local precedent case law with regards to the EER between a TV station and its talents. The court in
this case cited a foreign case law. This is their findings:
Two factors that classify an independent contractor: First, a television talent is a skilled position requiring talent
and training not available on-the-job. Second, the talent provides the "tools and instrumentalities" necessary for him/
her to perform.
Application:
ABS-CBN was not involved in the actual performance that produced the finished product of Sonzas work.
They did not instruct Sonza on how to perform his job. To perform his work, Sonza only needed his skills and talent.
Sonza had preference over the lines he delivered, how he appeared on television and sounded on the radio. He was
not even required to render 8-hours of work a day. The TV station merely reserved the right to modify program
format and airtime schedule for more effective programming for their sole concern was the ratings. The TV station
merely set guidelines towards the achievement of the mutually desired result without dictating the means or methods
to be employed in attaining it.
CONCLUSION:
Sonza is considered to be an independent contractor whose services were engaged by ABS-CBN by way of an
agreement. His engagement as a talent was covered by a specific contract. Hence, whatever benefits Sonza enjoyed
arose from a specific agreement between the parties and not by reason of employee-employer relationship.
In relation to Sonzas claim for unpaid benefits arising from the agreement, the right cause of action is breach
of contract which is a civil dispute.
GENERAL PRINCIPLES!2
LAZARO, petitioner vs. SOCIAL SECURITY COMMISION defendant.

G.R. No. 138254. July 30, 2004.
FACTS:
Private respondent Laudato filed a petition before the SSC for social security coverage and remittance of unpaid
monthly social security contributions against her three employers. Among the respondents was herein petitioner An-
gelito L. Lazaro (Lazaro), proprietor of Royal Star Marketing (Royal Star), which is engaged in the business of
selling home appliances.
a) Petitioners Arguments
Petitioner states that 1) Laudato was not a sales supervisor of Royal Star, but was a mere sales agent whom he paid
purely on commission basis.2) Laudato was not subjected to definite hours and conditions of work. As such, Lauda-
to could not be deemed an employee of Royal Star.
b) Respondents Arguments
Respondents contended that despite her employment as sales supervisor of the sales agents for Royal Star from April
of 1979 to March of 1986, Lazaro had failed during the said period, to report her to the SSC for compulsory cover-
age or remit Laudatos social security contributions.
SOCIAL SECURITIES COMMISION Applying the "control test," it held that Laudato was an employee of Royal
Star, and ordered Royal Star to pay the unremitted social security contributions of Laudato. CA The appellate court
affirmed the finding that Laudato was an employee of Royal Star, and hence entitled to coverage under the Social
Security Law.
ISSUE:
Whether or not respondent is an employee of Royal Star, bringing her under the coverage of the Social Security Act.
RULING:
The Petition is DENIED and the assailed Decision of the Court of Appeals dated 20 November 1998 is AF-
FIRMED.
Laudato is an employee of Royal Star. It is an accepted doctrine that for the purposes of coverage under the Social
Security Act, the determination of employer-employee relationship warrants the application of the CONTROL
TEST, that is, whether the employer controls or has reserved the right to control the employee, not only as to
the result of the work done, but also as to the means and methods by which the same is accomplished.The fact
that Laudato was paid by way of commission does not preclude the establishment of an employer-employee rela-
tionship. The relevant factor remains, as stated earlier, whether the"employer" controls or has reserved the right to
control the "employee" not only as to the result of the work to be done but also as to the means and methods by
which the same is to be accomplished. Neither does it follow that a person who does not observe normal hours
of work cannot be deemed an employee. A supervisor is exempt from the observance of normal hours of work for
his compensation is measured by the number of sales he makes. Laudato oversaw and supervised the sales agents
of the company, and thus was subject to the control of management as to how she implements its policies and its end
results. Royal Star exercised control over its sales supervisors or agents such as Laudato as to the means and meth-
ods through which these personnel performed their work.
Application:
Employer-Employee Relationship - Control Test
It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the determination of em-
ployer-employee relationship warrants the application of the control test, that is, whether the employer controls or
has reserved the right to control the employee, not only as to the result of the work done, but also as to the means
and methods by which the same is accomplished.
PHIL. GLOBAL COMMUNICATION, petitioner VS. DE VERA, defendant

GR No. 157214, July 7, 2005
Facts:
Philippine Global Communications inc. is a corporation engaged in the business of communication services
and allied activities while Ricardo de Vera is a physician by profession whom petitioner enlisted to attend to the
medical needs of its employees. The controversy rose when petitioner terminated his engagement.
In 1981, Dr. de Vera offered his services to petitioner. The parties agreed and formalized the respondents pro-
posal in a document denominated as retainership contract which will be for a period of one year, subject to renewal
and clearly stated that respondent will cover the retainership the company previously with Dr. Eulau. The agreement
went until 1994, in the years 1995-1996, it was renewed verbally. The turning point of the parties relationship was
when petitioner, thru a letter bearing the subject TERMINATION RETAINERSHIP CONTRACT, informed Dr. de
Vera of its decision to discontinue the latters retainer contract because the management has decided that it would be
more practical to provide medical services to its employees through accredited hospitals near the company premises.
On January 1997, de Vera filed a complaint for illegal dismissal before the NLRC, alleging that he had been
actually employed by the company as its company physician since 1991. The commission rendered decision in favor
of Philcom and dismissed the complaint saying that de Vera was an independent contractor. On appeal to NLRC, it
reversed the decision of the Labor Arbiter stating that de Vera is a regular employee and directed the company to
reinstate him. Philcom appealed to the CA where it rendered decision deleting the award but reinstating de Vera.
Philcom filed this petition involving the difference of a job contracting agreements from employee-employer rela-
tionship.
Petitioners Contention:
He alleged that he had been actually employed by Philcom as its company physician since 1981 and was dis-
missed without due process. He averred that he was designated as a company physician on retainer basis for reasons
allegedly known only to Philcom. He likewise professed that since he was not conversant with labor laws, he did not
give much attention to the designation as anyway he worked on a full-time basis and was paid a basic monthly
salary plus fringe benefits, like any other regular employees of Philcom.
Labor Arbiter:
The Labor Arbiter dismissed De Veras complaint for lack of merit, on the rationale that as a retained physician
under a valid contract mutually agreed upon by the parties, De Vera was an independent contractor and that he was
not dismissed but rather his contract with [PHILCOM] ended when said contract was not renewed after December
31, 1996.
NLRC:
The NLRC reversed that of the Labor Arbiter, on a finding that De Vera is Philcoms regular employee and ac-
cordingly directed the company to reinstate him to his former position without loss of seniority rights and privileges
and with full backwages from the date of his dismissal until actual reinstatement.
CAs Decision:
It modified that of the NLRC by deleting the award of traveling allowance, and ordering payment of separation
pay to De Vera in lieu of reinstatement.
Issue: Whether or not there exists an employee-employer relationship between the parties.
Supreme Courts Ruling: SC ruled that there was no such employer-employee relationship existing between Dr. de
Vera and Phil. Com.
In a long line of decisions, the Court, in determining the existence of an employer-employee relationship,
has invariably adhered to the four-fold test, to wit:
1. the selection and engagement of the employee;
2. the payment of wages;
3. the power of dismissal;
4. the power to control the employees conduct, or the so-called control test, considered to be the most impor-
tant element
Upon reading the contract dated September 6, 1982, signed by the complainant himself , it clearly states that is
a retainership contract. The retainer fee is indicated thereon and the duration of the contract for one year is also
clearly indicated in paragraph 5 of the Retainership Contract. The complainant cannot claim that he was unaware
that the contract was good only for one year, as he signed the same without any objections. The complainant also
accepted its renewal every year thereafter until 1994. As a literate person and educated person, the complainant
cannot claim that he does not know what contract he signed and that it was renewed on a year to year basis.
The labor arbiter added the indicia, not disputed by respondent, that from the time he started to work with peti-
tioner, he never was included in its payroll; was never deducted any contribution for remittance to the Social Securi-
ty System (SSS); and was in fact subjected by petitioner to the ten (10%) percent withholding tax for his profession-
al fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an em-
ployer-employee relationship. The elements of an employer-employee relationship are wanting in this case. The
record are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees. It
simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his em-
ployer to receive his salary.
The power to terminate the parties relationship was mutually vested on both. Either may terminate the
arrangement at will, with or without cause. Remarkably absent is the element of control whereby the employer has
reserved the right to control the employee not only as to the result of the work done but also as to the means and
methods by which the same is to be accomplished.
Petitioner had no control over the means and methods by which respondent went about performing his work at
the company premises. In fine, the parties themselves practically agreed on every terms and conditions of the en-
gagement, which thereby negates the element of control in their relationship.
Principle of Law: Any agreement may provide that one party shall render services for and in behalf of another, no
matter how necessary for the latters business, even without being hired as an employee. There was no employee-
employer relationship in a case where element of control of the employer over the employee is absent.
ABS-CBN Broadcasting Corp.,petitioner vs. Nazareno, et al.,respondent.

G.R. No. 164156. September 26, 2006.
FACTS:
ABS-CBN employed respondents as production assistants (PAs). They were assigned at the news public affairs,
for various radio programs in the Cebu Broadcasting Station, with monthly compensation of P4,000. They were is-
sued identification cards and were required a minimum of eight hours a day, including Sundays and holidays. They
were under the control and supervision of Assistant Station Manager and News Manager. On December 19, 1996,
petitioner and the ABS-CBN Rank-and-File Employees executed aCollective Bargaining Agreement (CBA). How-
ever, since petitioner refused to recognize PAs aspart of the bargaining unit, respondents were not included to the
CBA.Respondents filed a Complaint for Recognition of Regular Employment Status and its respective benefits
against the petitioner before the NLRC.
a) Petitioners Arguments (ABS-CBN Broadcasting Network Corp. Lost)
The respondents were PAs who basically assist in the conduct of a particular program ran by an anchor or talent.
Generally, they perform leg work for the anchors during a program or a particular production. They are considered
in the industry as "program employees." As distinguished from regular or station employees, they are basically en-
gaged by the station for a particular or specific program broadcasted by the radio station.
b) Respondents Arguments (Nazareno Win)

Respondents were engaged by respondent ABS-CBN as regular and fulltime employees for a continuous period of
more than 5 years with amonthly salary rate of P4,000.00 pesos beginning 1995 up until the filing of this complaint.
ISSUE: Whether or not Nazareno, et al. are considered as regular employees of ABS-CBN Broadcasting Corp.?
RULING: Yes, Nazareno, et al. are considered as regular employees of ABS-CBN Broadcasting Corp.
Rule:
There are two kinds of employees:
a. Those engaged to perform activities which are necessary or desirable in the usual business or trade of the em-
ployer:
b. Those casual employees who have rendered at least one year of service, whether continuous or broken, with
respect to the activities in which they are employed.\
Where a person has rendered at least one year of service, regardless of the nature of the activity performed, or
where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the
reason being that a customary appointment is not indispensable before one may formally declared as having attained
regular status.
Project employees and seasonal employees are not considered regular employees. However, any employee who
has rendered at least on year of service, whether continuous or intermittent, is deemed regular with respect to the
activity performed and while such activity exists. Respondents cannot be considered talents. They are regular em-
ployees who performed several different duties under the control and direction of ABS-CBN executives and supervi-
sors.
Application:
In this case, it is undisputed that respondents had continuously performed the same activities for an average of
five years. Their assigned tasks are necessary or desirable in the usual business or trade of the petitioner. While
length of time may not be a sole controlling test for project employment, it can be a strong factor to determine
whether the employee was hired for a specific undertaking or in fact tasked to perform functions which are vital,
necessary and indispensable to the usual trade or business of the employer. In the case at bar, however, the employ-
er-employee relationship between petitioner andrespondents have been proven.
Conclusion:
Thus, the respondents are entitled to the benefits provided for in the existing CBA between petitioner and its rank-
and-file employees. As regular employees, respondents are entitled to the benefits granted to all other regular em-
ployees of petitioner under the CBA. They were erroneously classified and treated as project employees by petition-
er.
ANGELINA FRANCISCO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, KASEI COR-
PORATION, SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENE BALLESTEROS,
TRINIDAD LIZA and RAMON ESCUETA, respondents.
G.R. No. 170087. August 31, 2006.
FACTS:
In 1995, petitioner was hired by Kasei Corporation during its incorporation stage. She was designated as Ac-
countant and Corporate Secretary and was assigned to handle all the accounting needs of the company. She was also
designated as Liaison Officer to the City of Makati to secure business permits, construction permits and other li-
censes for the initial operation of the company.
Although she was designated as Corporate Secretary, she was not entrusted with the corporate documents, never
prepared any legal documents, and never represented the company as its Corporate Secretary.
In 1996, petitioner was designated Acting Manager. As Acting Manager, petitioner was assigned to handle re-
cruitment of all employees and perform management administration functions; represent the company in all dealings
with government agencies; and to administer all other matters pertaining to the operation of Kasei Restaurant which
is owned and operated by Kasei Corporation.
For five years, petitioner performed the duties of Acting Manager. As of December 31, 2000 her salary was
P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation.
In January 2001, petitioner was replaced as Manager. TimoteoAcedo, the designated Treasurer, convened a
meeting of all employees of Kasei Corporation and announced that nothing had changed and that petitioner was still
connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters.
Thereafter, Kasei Corporation reduced her salary by P2,500.00 a month beginning January up to September
2001 for a total reduction of P22,500.00 as of September 2001. Petitioner was not paid her mid-year bonus allegedly
because the company was not earning well. On October 2001, petitioner did not receive her salary from the compa-
ny.
On October 15, 2001, petitioner asked for her salary from Acedo and the rest of the officers but she was in-
formed that she is no longer connected with the company.
Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive
dismissal before thelabor arbiter.
a) Petitioners Arguments (Angelina Francisco Win)

When the petitioner was replaced as Acting Manager, petitioner alleged that she was required to sign a prepared
resolution for her replacement but she was assured that she would still be connected with Kasei Corporation.
b) Private Respondents Arguments (Kasei Corporation - Lost)

Private respondents averred that petitioner is not an employee of Kasei Corporation. They alleged that petitioner
was hired in 1995 as one of its technical consultants on accounting matters and act concurrently as Corporate Secre-
tary. As technical consultant, petitioner performed her work at her own discretion without control and supervision of
Kasei Corporation. Petitioner had no daily time record and she came to the office any time she wanted. The compa-
ny never interfered with her work except that from time to time, the management would ask her opinion on matters
relating to her profession. Petitioner did not go through the usual procedure of selection of employees, but her ser-
vices were engaged through a Board Resolution designating her as technical consultant. The money received by pe-
titioner from the corporation was her professional fee subject to the 10% expanded withholding tax on professionals,
and that she was not one of those reported to the BIR or SSS as one of the company's employees.
ISSUES:
Whether there was an employer-employee relationship between petitioner and private respondent Kasei Corporation.
RULING:
An employer-employee relationship existed between petitioner and private respondent Kasei Corporation.
Rule:
Courts have relied on the so-called right of control test where the person for whom the services are performed
reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In
addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the
inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relation-
ship.
There are instances when, aside from the employer's 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 employer's power
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 is especially appropriate in cases where there is no written agreement or terms of reference to base the rela-
tionship 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 latter's employment.
Under the control test, there is an employer-employee relationship when the person for whom the services are
performed reserves the right to control not only the end achieved but also the manner and means used to achieve that
end.
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 employ-
er's business; (2) the extent of the worker's investment in equipment and facilities; (3) the nature and degree of con-
trol exercised by the employer; (4) the worker's 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 dura-
tion of the relationship between the worker and the employer; and (7) the degree of 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.
Application:
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 corporation's Technical Consultant. She reported
for work regularly and served in various capacities as Accountant, Liaison Officer, Technical Consultant, Acting
Manager and Corporate Secretary, 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 corpora-
tion such as securing business permits and other licenses over an indefinite period of engagement.
Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent
corporation because she had served the company for six years before her dismissal, receiving check vouchers indi-
cating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social Secu-
rity contributions from August 1, 1999 to December 18, 2000. Petitioner's membership in the SSS as manifested by
a copy of the SSS specimen signature card which was signed by the President of Kasei Corporation and the inclu-
sion of her name in the on-line inquiry system of the SSS evinces the existence of an employer-employee relation-
ship between petitioner and respondent corporation.
It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued
employment in the latter's line of business.
Conclusion:
Thus, petitioner is an employee of respondent Kasei Corporation as she was selected and engaged by the com-
pany for compensation, and is economically dependent upon respondent for her continued employment in that line
of business. Respondent corporation hired and engaged petitioner for compensation, with the power to dismiss her
for cause. More importantly, respondent corporation had the power to control petitioner with the means and methods
by which the work is to be accomplished.
NOGALEZ ET AL VS CAPITOL MEDICAL CENTER

G.R. No. 142625, December 19, 2006
Facts:
Pregnant Corazon Nogales ("Corazon") was under the exclusive prenatal care of Dr. Oscar Estrada ("Dr. Estra-
da"). Corazon was admitted at the CMC. Dr. Estrada ordered the injection of 10 grams of magnesium sulfate. How-
ever, Dr. Ely Villaflor ("Dr. Villaflor"), who was assisting Dr. Estrada, administered only 2.5 grams of magnesium
sulfate. Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to extract Corazon's baby. In the process, piece of
cervical tissue was allegedly torn. The baby came out in an apneic, cyanotic, weak and injured condition. Corazon
began to manifest moderate vaginal bleeding which rapidly became profused. Dr. Noe Espinola ("Dr. Espinola"),
head of the Obstetrics-Gynecology Department of the CMC, was apprised of Corazon's condition by telephone.
Upon being informed that Corazon was bleeding profusely, Dr. Espinola ordered immediate hysterectomy. Despite
Dr. Espinola's efforts, Corazon died due to hemorrhage.
Petitioners filed a complaint for damages with the Regional Trial Court. Petitioners mainly contended that de-
fendant physicians and CMC personnel were negligent in the treatment and management of Corazon's condition.
Petitioners charged CMC with negligence in the selection and supervision of defendant physicians and hospital staff.
Petitioner claims thathe knew Dr. Estrada as an accredited physician of CMC, though he discovered later that
Dr. Estrada was not a salaried employee of the CMC. He further claims that he wasdealing with CMC, whose prima-
ry concern was the treatment and management of his wife's condition. Dr. Estrada just happened to be the specific
person he talked to representing CMC. Moreover, the fact that CMC made him sign a Consent on Admission and
Admission Agreement and a Consent to Operation printed on the letterhead of CMC indicates that CMC considered
Dr. Estrada as a member of its medical staff.
On the other hand, CMC disclaims liability by asserting that Dr. Estrada was a mere visiting physician and that
it admitted Corazon because her physical condition then was classified an emergency obstetrics case.CMC alleges
that Dr. Estrada is an independent-contractor "for whose actuations CMC would be a total stranger." CMC maintains
that it had no control or supervision over Dr. Estrada in the exercise of his medical profession.
Trial court rendered judgment finding Dr. Estrada solely liable for damages.
The Court of Appeals upheld the trial court's ruling, finding Dr. Estrada as an independent contractor-physician.
The Court of Appeals applied the "borrowed servant" doctrine considering that Dr. Estrada was an independent con-
tractor who was merely exercising hospital privileges. This doctrine provides that once the surgeon enters the oper-
ating room and takes charge of the proceedings, the acts or omissions of operating room personnel, and any negli-
gence associated with such acts or omissions, are imputable to the surgeon.
Issues:
1) Whether CMC is vicariously liable for the negligence of Dr. Estrada;

2) WON there is employer-employee relationship between Dr. Estrada and CMC
Held:
Dr. Estrada is not an employee of CMC, but an independent-contractor; however, CMC is still vicariously
liable.
The Court finds no single evidence pointing to CMC's exercise of control over Dr. Estrada's treatment and
management of Corazon's condition. It is undisputed that throughout Corazon's pregnancy, she was under the ex-
clusive prenatal care of Dr. Estrada. At the time of Corazon's admission at CMC and during her delivery, it was Dr.
Estrada, assisted by Dr. Villaflor, who attended to Corazon. There was no showing that CMC had a part in diagnos-
ing Corazon's condition. While Dr. Estrada enjoyed staff privileges at CMC, such fact alone did not make him an
employee of CMC. CMC merely allowed Dr. Estrada to use its facilitieswhen Corazon was about to give birth,
which CMC considered an emergency.
Dr. Estrada is not an employee of CMC, but an independent-contractor.

In general, a hospital is not liable for the negligence of an independent-contractor physician. There is, however,
an exception to this principle.The hospital may be liable if the physician is the "ostensible" agent of the hospi-
tal.This exception is also known as the "doctrine of apparent authority."
The doctrine of apparent authority essentially involves two factors to determine the liability of an independent-
contractor physician. The first factor focuses on the hospital's manifestations and is sometimes described as an
inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual
who was alleged to be negligent was an employee or agent of the hospital. In this regard, the hospital need not
make express representations to the patient that the treating physician is an employee of the hospital; rather a repre-
sentation may be general and implied. The doctrine of apparent authority is a specie of the doctrine of estoppel.
Article 1431 of the Civil Code provides that "through estoppel, an admission or representation is rendered conclu-
sive upon the person making it, and cannot be denied or disproved as against the person relying thereon." CMC im-
pliedly held out Dr. Estrada as a member of its medical staff.
Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to
believe that Dr. Estrada was an employee or agent of CMC. CMC cannot now repudiate such authority. First, CMC
granted staff privileges to Dr. Estrada. Second, CMC made petitioner sign consent forms printed on CMC letterhead.
Third, Dr. Estrada's referral of Corazon's profuse vaginal bleeding to Dr. Espinola, who was then the Head of the
Obstetrics and Gynecology Department of CMC, gave the impression that Dr. Estrada, as a member of CMC's med-
ical staff, was collaborating with other CMC-employed specialists in treating Corazon.
Without any indication in these consent forms that Dr. Estrada was an independent-contractor physician, the
Spouses Nogales could not have known that Dr. Estrada was an independent contractor. Significantly, no one from
CMC informed the Spouses Nogales that Dr. Estrada was an independent-contractor.
The second factor focuses on the patient's reliance. It is sometimes characterized as aninquiry on whether the
plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence.
The records show that the Spouses Nogales relied upon a perceived employmentrelationship with CMC in accepting
Dr. Estrada's services. Petitioner testified that he and hiswife specifically chose Dr. Estrada to handle Corazon's de-
livery not only because of theirfriend's recommendation, but more importantly because of Dr. Estrada's "connection
witha reputable hospital, the [CMC]."In other words, Dr. Estrada's relationship with CMCplayed a significant role in
the Spouses Nogales' decision in accepting Dr. Estrada'sservices as the obstetrician-gynecologist for Corazon's de-
livery. Moreover, as earlier stated, there is no showing that before and during Corazon's confinement at CMC, theS-
pouses Nogales knew or should have known that Dr. Estrada was not an employee ofCMC.
WHEREFORE, the Court PARTLY GRANTS the petition. The Court finds respondent Capitol Medical
Center vicariously liable for the negligence of Dr. Oscar Estrada.
Coca-Cola Bottlers Phils., Inc./Eric Montinola, Managerpetitionersvs.Dr. Dean N. Climacoet.a, respondent.

G.R. No. 146881. February 5, 2007.
FACTS:
Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca- Cola Bottlers Phils.,
Inc. by virtue of a Retainer Agreement.
The Comprehensive Medical Plan, which contains the duties and responsibilities of respondent, adverted to in
the Retainer Agreement.
The Retainer Agreement, which began on January 1, 1988, was renewed annually. The last one expired on De-
cember 31, 1993. Despite the non-renewal of the Retainer Agreement, respondent continued to perform his functions
as company doctor to Coca-Cola until he received a letter dated March 9, 1995 from petitioner company concluding
their retainership agreement effective 30 days from receipt thereof.
Respondent inquired from the management of petitioner company whether it was agreeable to recognizing him
as a regular employee. The management refused to do so.
a) Petitioners Arguments (Coca-Cola Bottlers Phils., Inc. Win)

It was averred by Coca-Cola in its comment that they exercised no control over petitioner for the reason that
the latter was not directed as to the procedure and manner of performing his assigned tasks. It went as far as saying
that "petitioner was not told how to immunize, inject, treat or diagnose the employees of the respondent. We believe
that if the "control test" would be interpreted this strictly, it would result in an absurd and ridiculous situation where-
in we could declare that an entity exercises control over another's activities only in instances where the latter is di-
rected by the former on each and every stage of performance of the particular activity. Anything less than that would
be tantamount to no control at all.
b) Respondents Arguments (Dr. Dean N. Climaco - Lost)

It is noted that as early as September 1992, petitioner was already making inquiries regarding his status with
petitioner company. First, he wrote a letter addressed to Dr. Willie Sy, the Acting President and Chairperson of the
Committee on Membership, Philippine College of Occupational Medicine. In response, Dr. Sy wrote a letter to the
Personnel Officer of Coca-Cola Bottlers Phils., Bacolod City, stating that respondent should be considered as a
regular part-time physician, having served the company continuously for four (4) years. He likewise stated that
respondent must receive all the benefits and privileges of an employee under Article 157 (b) of the Labor Code.
On February 24, 1994, respondent filed a Complaint before the NLRC, Bacolod City, seeking recognition as a
regular employee of petitioner company and prayed for the payment of all benefits of a regular employee,
including 13th Month Pay, Cost of Living Allowance, Holiday Pay, Service Incentive Leave Pay, and Christ-
mas Bonus. The case was docketed as RAB Case No. 06-02-10138-94.
While the complaint was pending before the Labor Arbiter, respondent received a letter dated March 9, 1995
from petitioner company concluding their retainership agreement effective thirty (30) days from receipt thereof. This
prompted respondent to file a complaint for illegal dismissal against petitioner company with the NLRC, Bacolod
City. The case was docketed as RAB Case No. 06-04-10177-95.
ISSUE:
Whether or not there exists an employer-employee relationship between the parties. The resolution of the main
issue will determine whether the termination of respondent's employment is illegal.
RULING:
The petition is granted.
The Labor Arbiter and the NLRC correctly found that petitioner company lacked the power of control over the
performance by respondent of his duties. The Labor Arbiter also correctly found that the provision in the Retainer
Agreement that respondent was on call during emergency cases did not make him a regular employee.
In addition, the Court finds that the schedule of work and the requirement to be on call for emergency cases do
not amount to such control, but are necessary incidents to the Retainership Agreement.
The Court also notes that the Retainership Agreement granted to both parties the power to terminate their rela-
tionship upon giving a 30-day notice. Hence, petitioner company did not wield the sole power of dismissal or termi-
nation.
The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the employment of
respondent as a retained physician of petitioner company and upholds the validity of the Retainership Agreement
which clearly stated that no employer-employee relationship existed between the parties. The Agreement also stated
that it was only for a period of 1 year beginning January 1, 1988 to December 31, 1998, but it was renewed on a
yearly basis.
Rule:
The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the
four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dis-
missal; and (4) the power to control the employee's conduct, or the so-called "control test," considered to be the most
important element.
Application:
In effect, the Labor Arbiter held that petitioner company, through the Comprehensive Medical Plan, provided
guidelines merely to ensure that the end result was achieved, but did not control the means and methods by which
respondent performed his assigned tasks.
Considering that there is no employer-employee relationship between the parties, the termination of the Retain-
ership Agreement, which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal
of respondent. Consequently, there is no basis for the moral and exemplary damages granted by the Court of Appeals
to respondent due to his alleged illegal dismissal.
Conclusion:
Therefore, the four-fold test is an important tool to be used in identifying if there is an employer
employee relationship. This test will also help us to determine if such employee will be granted of
regular benefits provided by the company/employer. It is noteworthy that the power to control the
employee's conduct, or the so-called "control test," considered to be the most important element.
CALAMBA MEDICAL CENTER, INC. , petitioner vs. NLRC, ET AL, defendant.

G.R. No. 176484. November 25, 2008.
FACTS:
The respondents, doctors-spouses Dr. Ronaldo and Dr. MercedithaLanzanas are engaged as resident physicians
by the petitioner, Calamba Medical Center. They report to the hospital twice-a-week on twenty-four-hour shifts.
They were paid a monthly "retainer" of P4,800.00 each and were also given a percentage share out of fees charged
for out-patient treatments, operating room assistance and discharge billings.
The work schedules of the resident physicians were fixed by the petitioner's Medical Director Dr. Desipeda, and
they were issued ID, enrolled in the SSS and income taxes were withheld from them.
Dr. Trinidad, also a resident physician, overheard a phone conversation between Dr. Ronaldo and a fellow em-
ployee Diosdado Miscala. Apparently, Dr. Ronaldo and Miscala were discussing about the low "census" or admis-
sion of patients to the hospital. Because of which, the former was given a preventive suspension and his wife Dr.
Merceditha was not given any schedule after sending the Memorandum. On March 1998, Dr. Ronaldo filed a com-
plaint for illegal suspension and Dr. Merceditha for illegal dismissal.
a) Petitioners Arguments (Calamba Medical Center, Inc. Lost)

The petitioner argues that there is no employer-employee relationship because the doctor-spouses were only
engaged twice-a-week, thus giving them freedom to practice their profession elsewhere the rest of the week. Further,
the petitioner contends that aside from their monthly retainers, the respondents were also entitled to one-half of all
suturing, admitting, consultation, medico-legal and operating room assistance fees. These circumstances, according
to them, are badges of the absence of an employment relationship.
b) Respondents Arguments (Dr. Ronaldo and Dr. MercedithaLanzanas- Won)
The respondents maintained that the following factors constitute control, hence, the existence of employment
relationship: (1) the schedule of duties of the respondents is subject to approval by the petitioners Medical Di-
rector; (2) the Medical Director also issues instructions or orders to the respondents relating to the means
and methods of performing their duties, i.e. admission of patients, manner of characterizing cases, treatment
of cases, etc., and may even overrule, review or revise the decisions of the resident physicians . This was
not controverted by the petitioner.
ISSUE:
Whether or not an employer-employee relationship exists between petitioner and spouses respondents
RULING:
The petition for review was denied
Rule:
To determine the existence of employer-employee relationship, one can apply the four-fold test which has the
following elements: a) selection and engagement of the employee; b) payment of wages or salaries; c) exercise
of the power of dismissal; and d) exercise of the power to control the employee's conduct.
Under the "control test", an employment relationship exists between a physician and a hospital if the
hospital controls both the means and the details of the process by which the physician is to accomplish his
task (Nogales v. Capitol Medical Center, G.R. No. 142625, December 19, 2006, 511 SCRA 204, 221 citing
Diggs v. Novant Health, Inc., 628 S.E.2d 851 (2006))
Further, in countering the contention of the respondent hospital of respondents' sharing in hospital fees,
Supreme Court used Article 97 (f) of the Labor Code as the basis, which states that, Wage paid to any em-
ployee shall mean the remuneration or earning, however designated, capable of being expressed in terms of
money, whetherfixed or ascertained on a time, task, piece, or commission basis, or other method of calcu-
lating the same
Application:
The petitioner exercised control over respondents since it is undisputed that respondents' work is monitored
through its nursing supervisors, charge nurses and orderlies in the emergency room, the operating room, or
any department or ward for that matter. Without the approval or consent of petitioner or its Medical Direc-
tor, no operations can be undertaken in those areas. For control test to apply, it is not essential for the
employer to actually supervise the performance of duties of the employee, it being enough that it has the
right to wield the power.
Respondents were in fact made subject to petitioner-hospital's Code of Ethics, the provisions of which
cover administrative and disciplinary measures on negligence of duties, personnel conduct and behavior, and
offenses against persons, property and the hospital's interest.
With respect to respondents' sharing in some hospital fees, this scheme does not sever the employment
tie between them and petitioner as this merely mirrors additional form or another form of compensation or
incentive similar to what commission-based employees receiveas contemplated in Article 97 (f) of the Labor
Code.
Conclusion:
Thus, employer-employee relationship exists between Calamba Medical Center and the doctors-spouses
Jeromie Escasinas and Evan Rigor Singco, petitioners, vs. Shangri-Las Mactan Island Resort and Dr. Jessica
J.R. Pepito, respondents.
FACTS:
Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996,
respectively, by Dr. Jessica Joyce R. Pepito (respondent doctor) to work in her clinic at respondent Shangri-las
Mactan Island Resort (Shangri-la) in Cebu of which she was a retained physician. In late 2002, petitioners filed with
the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. VII (NLRC-RAB No. VII) a
complaint for regularization, underpayment of wages, non-payment of holiday pay, night shift differential and 13th
month pay differential against respondents, claiming that thy are regular employees of Shangri-la. Shangri-la
claimed, however, that petitioners were not its employees but of respondent doctor whom it retained via MOA pur-
suant to Article 157 of the Labor Code, as amended.
Petitioner, et.als contention:

- Petitioners insist that under Article 157 of the Labor Code, Shangri-la is required to hire afull-time regis-
tered nurse, apart from a physician, hence, their engagement should bedeemed as regular employment
- MOA is contrary to public policy as it circumvents tenurial security and, therefore, should be struck down
as being void ab initio
- respondent doctor is a labor-only contractor for she has no license or business permit and no business name
registration, which is contrary to the requirements under Sec. 19 and 20 of the Implementing Rules and
Regulations of the Labor Code on sub-contracting.
- respondent doctor cannot be a legitimate independent contractor, lacking as she does in substantial capital,
the clinic having been set-up and already operational when she took over as retained physician
NLRC Ruling:
Labor Arbiter Ernesto Carreon declared petitioners to be regular employees of Shangri-la. The Arbiter thus or-
dered Shangri-la to grant them the wages and benefits due them as regular employees from the time their services
were engages.
In finding that petitioners to be regular employees of Shangrila, the Arbiter noted that ther ususally perform
work which is necessary and desirable to Shangri-las business; that they observe clinic hours and render services
only to Shangri-las guest and employees; that payment for their salaries were recommended to Shangri-las Human
Resource Department (HRD); that respondent doctor was Shangri-las in-house physician, hence, also an employ-
ee; and that the MOA between Shangri-la and respondent doctor was an insidious mechanism in order to circum-
vent tenurial security and that of the employees under her.
Respondents appealed to the NLRC, likewise dismissed petitioners complaint for lack of merit, it finding that
no employer-employee relationship exists between petitioner and Shangri-la. In so deciding, the NLRC held that the
Arbited erred in interpreting Artice 157 in relation to Article 280 of the Labor Code, as what is required under Arti-
cle 157 is that the employer should provide the services of medical personnel to its employees, but nowhere in said
article is a provision that nurses are required to be employed; that contrary to the finding of the Arbiter, even if Arti-
cle 280 states that if a worker performs work usually necessary or desirable in the business of the employer, he can-
not be automatically deemed a regular employee; and that the MOA amply shows that respondent doctor was in fact
engages by Shangri-la on a retainer basis, under which she could hire her own nurses and other clinic personnel.
On the issue of payment of wages, the NLRC held that the fact that, for some months, payment of petitioners'
wages were recommended by Shangri-la's HRD did not prove that it was Shangri-la which pays their wages. It thus
credited respondent doctor's explanation that the recommendations for payment were based on the billings she pre-
pared for salaries of additional nurses during Shangri-la's peak months of operation, in accordance with the retainer-
ship agreement, the guests' payments for medical services having been
paid directly to Shangri-la.
CA Ruling:
The CA affirmed the NLRC decision that no employer-employee relationship exist between Shangri-la and peti-
tioners. The appellate court concluded that all aspects of the employment of petitioners being under the supervision
and control of respondent doctor and since Shangri-la is not principally engages in the business of providing medical
or healthcare services, petitioners could not be regarded as regular employees of Shangri-la.
ISSUES:
What is the correct interpretation of Article 157 vis--vis Article 280 and the provisions on permissible job con-
tracting of the Labor Code, as amended.
RULING:
The Court holds that, contrary to petitioners' postulation, Art. 157 does not require the engagement of full-time
nurses as regular employees of a company employing not less than 50 workers. (Refer to Article 157 for more de-
tails)
Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to "furnish" its
employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency clin-
ic which means that it should provide or make available such medical and allied services to its employees, not nec-
essarily to hire or employ a service provider.
Rule:
The term "full-time" in Art. 157 cannot be construed as referring to the type of employment of the person en-
gaged to provide the services, for Article 157 must not be read alongside Art. 280 9 in order to vest employer-em-
ployee relationship on the employer and the person so engaged. The phrase "services of a full-time registered nurse"
should thus be taken to refer to the kind of services that the nurse will render in the company's premises and to its
employees, not the manner of his engagement.
As to whether respondent doctor can be considered a legitimate independent contractor, the pertinent sections of
DOLE Department Order No. 10, series of 1997 (Please refer to Sec 8 of the Department Order)
The existence of an independent and permissible contractor relationship is generally established by considering
the following determinants: whether the contractor is carrying on an independent business; the nature and extent of
the work; the skill required; the term and duration of the relationship; the right to assign the performance of a speci-
fied piece of work; the control and supervision of the work to another; the employer's power with respect to the hir-
ing, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises,
tools, appliances, materials and labor; and the mode, manner and terms of payment.
On the other hand, existence of an employer- employee relationship is established by the presence of the follow-
ing determinants: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages
by whatever means; and (4) the power to control the worker's conduct, with the latter assuming primacy in the over-
all consideration
APPLICATION:
Court holds that respondent doctor is a legitimate independent contractor. That Shangri-la provides the clinic
premises and medical supplies for use of its employees and guests does not necessarily prove that respondent doctor
lacks substantial capital and investment. Besides, the maintenance of a clinic and provision of medical services to its
employees is required under Art. 157, which
are not directly related to Shangri-la's principal business operation of hotels and restaurants.
As to payment of wages, respondent doctor is the one who underwrites the following: salaries, SSS contribu-
tions and other benefits of the staff; 13 group life, group personal accident insurance and life/death insurance 14 for
the staff with minimum benefit payable at 12 times the employee's last drawn salary, as well as value added taxes
and withholding taxes, sourced from her P60,000.00 monthly retainer fee and 70% share of the service charges from
Shangri-la's guests who avail of the clinic services. It is unlikely that respondent doctor would report petitioners as
workers, pay their SSS premium as well as their wages if they were not indeed her employees.
With respect to the supervision and control of the nurses and clinic staff, it is not disputed that a document,
"Clinic Policies and Employee Manual" 16 claimed to have been prepared by respondent doctor exists, to which
petitioners gave their conformity 17 and in which they acknowledged their co-terminus employment status. It is thus
presumed that said document, and not the employee manual being followed by Shangri-la's regular workers, governs
how they perform their respective tasks and responsibilities.
CONCLUSION:
Contrary to petitioners' contention, the various office directives issued by Shangri-la's officers do not imply that
it is Shangri-la's management and not respondent doctor who exercises control over them or that Shangri-la has con-
trol over how the doctor and the nurses perform their work. The letter 18 addressed to respondent doctor dated Feb-
ruary 7, 2003 from a certain Tata L. Reyes giving instructions regarding the replenishment of emergency kits is, at
most, administrative in nature, related as it is to safety matters; while the letter 19 dated May 17, 2004 from Shangri-
la's Assistant Financial Controller, Lotlot Dagat, forbidding the clinic from receiving cash payments from the resort's
guests is a matter of financial policy in order to ensure proper sharing of the proceeds, considering that Shangri-la
and respondent doctor share in the guests' payments for medical services rendered. In fine, as Shangri-la does not
control how the work should be performed by petitioners, it is not petitioners employer.
GREGORIO V. TONGKO, petitioner,

vs.
THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS,
respondents.
G.R. No. 167622. June 29, 2010
FACTS:
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance
business. Renato A. Vergel De Dios was, during the period material, its President and Chief Executive Officer. Gre-
gorio V. Tongko started his professional relationship with Manulife on July 1, 1977 by virtue of a Career Agent's
Agreement (Agreement) he executed with Manulife.
In the Agreement, it is provided that:

It is understood and agreed that the Agent is an independent contractor and nothing contained herein
shall be construed or interpreted as creating an employer-employee relationship between the Company
and the Agent.
The Company may terminate this Agreement for any breach or violation of any of the provisions
hereof by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the
discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the
right to terminate this Agreement by the Company shall be construed for any previous failure to exercise
its right under any provision of this Agreement.
Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giv-
ing to the other party fifteen (15) days notice in writing.
In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became
a Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife, consisting of commissions,
persistency income, and management overrides. The problem started sometime in 2001, when Manulife instituted
manpower development programs in the regional sales management level. Relative thereto, De Dios addressed a
letter dated November 6, 2001 to Tongko regarding an October 18, 2001 Metro North Sales Managers Meeting. Stat-
ing that Tongkos Region was the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and, as of
today, continues to remain one of the laggards in this area. Other issues were:"Some Managers are unhappy with
their earnings and would want to revert to the position of agents." And "Sales Managers are doing what the company
asks them to do but, in the process, they earn less." Tongko was then terminated.
Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for illegal
dismissalIn the Complaint. In a Decision dated April 15, 2004, Labor Arbiter dismissed the complaint for lack of an
employer-employee relationship.
The NLRC's First Division, while finding an employer-employee relationship between Manulife and Tongko
applying the four-fold test, held Manulife liable for illegal dismissal. Thus, Manulife filed an appeal with the CA.
Thereafter, the CA issued the assailed Decision dated March 29, 2005, finding the absence of an employer-employee
relationship between the parties and deeming the NLRC with no jurisdiction over the case. Hence, Tongko filed this
petition.
ISSUE:
Wehther or not Tongko was an employee of Manulife and that he was illegally dismissed.
RULING:
Yes. In the instant case, Manulife had the power of control over Tongko that would make him its employee.-
Several factors contribute to this conclusion.
In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that:
The Agent hereby agrees to comply with all regulations and requirements of the Company as herein
provided as well as maintain a standard of knowledge and competency in the sale of the Company's
products which satisfies those set by the Company and sufficiently meets the volume of new business
required of Production Club membership.Under this provision, an agent of Manulife must comply with
three (3) requirements: (1) compliance with the regulations and requirements of the company; (2) main-
tenance of a level of knowledge of the company's products that is satisfactory to the company; and (3)
compliance with a quota of new businesses.
Among the company regulations of Manulife are the different codes of. The fact that Tongko was obliged to
obey and comply with the codes of conduct was not disowned by respondents.
Thus, with the company regulations and requirements alone, the fact that Tongko was an employee of Manulife
may already be established. Certainly, these requirements controlled the means and methods by which Tongko was
to achieve the company's goals.
More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative
duties that establishes his employment with Manulife.
Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain number of
agents, in addition to his other administrative functions, leads to no other conclusion that he was an employee of
Manulife.
Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the burden of proving the
validity of the termination of employment rests on the employer. Failure to discharge this evidential burden would
necessarily mean that the dismissal was not justified, and, therefore, illegal.
The Labor Code provides that an employer may terminate the services of an employee for just cause and this
must be supported by substantial evidence. The settled rule in administrative and quasi-judicial proceedings is that
proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal of an employee,
and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Substantial
evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as ade-
quate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.
Here, Manulife failed to overcome such burden of proof. It must be reiterated that Manulife even failed to iden-
tify the specific acts by which Tongko's employment was terminated much less support the same with substantial
evidence. To repeat, mere conjectures cannot work to deprive employees of their means of livelihood. Thus, it must
be concluded that Tongko was illegally dismissed.
Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its em-
ployee is not entitled to such notices. Since we have ruled that Tongko is its employee, however, Manulife clearly
failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal dismissal.
SEMBLANTE et al. vs. CA, et al.

G.R. No. 196426, August 15, 2011
Facts:
Petitioners Semblante and Pilar assert that they were hired by respondents-spouses Loot, the owners of Gallera
de Mandaue (the cockpit), as the official masiador and sentenciador, respectively, of the cockpit.They work every
Tuesday, Wednesday, Saturday, and Sunday every week, excluding monthly derbies and cockfights held on special
holidays. Their working days start at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning
depending on the needs of the cockpit. Petitioners had both been issued employees' identification cards that they
wear every time they report for duty.
On November 14, 2003, however, petitioners were denied entry into the cockpit upon the instructions of re-
spondents, and were informed of the termination of their services effective that date. This prompted petitioners to
file a complaint for illegal dismissal against respondents.
Respondents denied that petitioners were their employees and alleged that they were associates of respondents'
independent contractor, Tomas Vega and have no regular working time or day. They were only issued identification
cards to indicate that they were free from the normal entrance fee and to differentiate them from the general public.
Labor Arbiter found petitioners to be regular employees of respondents as they performed work that was neces-
sary and indispensable to the usual trade or business of respondents for a number of years. The Labor Arbiter also
ruled that petitioners were illegally dismissed, and so ordered respondents to pay petitioners their back wages and
separation pay.
NLRCheld in its Resolution that there was no employer-employee relationship between petitioners and respon-
dents, respondents having no part in the selection and engagement of petitioners, and that no separate individual
contract with respondents was ever executed by petitioners.
The CA upheld the NLRC decision.
Issue: Whether or not there exists an employer/employee relationship between Semblante, et al. and the spouses
LOOT.
Ruling: Petition denied.
Appellate court found for respondents, noting that referees and bet-takers in a cockfight need to have the kind of
expertise that is characteristic of the game to interpret messages conveyed by mere gestures. Hence, petitioners are
akin to independent contractors who possess unique skills, expertise, and talent to distinguish them from ordinary
employees. Further, respondents did not supply petitioners with the tools and instrumentalities they needed to per-
form work. Petitioners only needed their unique skills and talents to perform their job as masiador and sentenciador.
It is evident, that petitioners are NOT employees of respondents, since their relationship fails to pass muster the
four-fold test of employment. We have repeatedly mentioned in countless decisions: 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 employee's conduct, which is the most important element.
As found by both the NLRC and the CA, respondents had no part in petitioners' selection and management;
petitioners' compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by peti-
tioners; and petitioners performed their functions asmasiador and sentenciador free from the direction and control of
respondents.
Respondents, not being petitioners employers, could never have dismissed, legally or illegally, petitioners,
since respondents were without power or prerogative to do so in the first place.
JOSE MEL BERNARTE, petitioner, vs. PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EM-
MANUEL M. EALA, and PERRY MARTINEZ,respondents.
G.R. No. 192804. September 14, 2011
FACTS:
Complainants were invited to join the PBA as referees and were made to sign contracts on a year-to-year basis
but things changed regarding their terms of employment when Commissioner Ealatook over.
On January 15, 2004, Bernarte, a Referee of the Year awardee in 2003, received a letter stating that his contract
would no longer be renewed due to his unsatisfactory performance on and off the court.This led Bernarte to believe
that this as due to hid refusal to fix a game upon order of Ernie De Leon.
On the other hand, Guevarrawho has regularly signed a yearly contract was issued a memorandum expressing
dissatisfaction over his questioning on the assignment of referees officiating out-of-town games. And on February
2004, he was no longer made to sign a contract.
Petitioners Contentions:
Petitioner asserts that he is an employee since PBA exercise control over the performance of his work. He cites
the following stipulations in the retainer contract which evidence control:
(1) respondents classify or rate a referee;
(2) respondents require referees to attend all basketball games organized or authorized by the PBA, at least
one hour before the start of the first game of each day;
(3) respondents assign petitioner to officiate ballgames, or to act as alternate referee or substitute; (4) refer-
ee agrees to observe and comply with all the requirements of the PBA governing the conduct of the referees
whether on or off the court;
(5) referee agrees (a) to keep himself in good physical, mental, and emotional condition during the life of
the contract; (b) to give always his best effort and service, and loyalty to the PBA, and not to officiate as
referee in any basketball game outside of the PBA, without written prior consent of the Commissioner; (c)
always to conduct himself on and off the court according to the highest standards of honesty or morality;
and
(6) imposition of various sanctions for violation of the terms and conditions of the contract.
Respondents Contentions:
Respondents contend that the petitioners were not illegally dismissed since the petitioners were not employees
of PBA but were simply made to sign a contract of retainer wherein upon the lapse of the time stated in the contract,
PBA had the prerogative of whether or not to renew their contracts.
PBA admits that they repeatedly engaged their services where PBA would pay a retainer fee and that they can
terminate the retainer contract or petitioners violation of its terms and conditions. However, they argue that the ele-
ment of control is lacking in this case making the petitioners independent contractors and not employees.
Ruling of Lower Courts:

Labor Arbiter declared the petitioners as employees whose dismissal was illegal. The LA ordered the reinstate-
ment of petitioner, payment of backwages, moral and exemplary damages and attorneys fees.
NLRC affirmed the LAs judgment but when respondents filed a petition for certiorari wth the CA, the court
annulled LAs and NLRCs decision.
The CA found petitioner an independent contractor since respondents did not exercise any form of control over
the means and methods by which petitioner performed is work as a basketball referee. They disagreed with LAs
finding that the contract of retainer show that PBA had control over Bernarte and Guevarra. Moreover, the CA dis-
agrees with LA and NLRC when they concluded that repeated hiring made them regular employees by operation of
law.
ISSUES:
Whether or not the petitioner is an employee of respondents, which in turn determines whether petitioner was
illegally dismissed.
RULING:
NO. Petitioner is not an employee of PBA, but an independent contractor.
Rule:
Case law has consistently used the four-fold test to determine the existence of employee-employer relationship:
(a) selection and engagement of the employee;(b) the payment of wages;(c) the power of dismissal; (d) the employ-
ers power to control the employee on the means and methods by which the work is accomplished.
SC found the stipulations cited by petitioner as to hardly demonstrate control over the
means and methods by which petitioner performs his work as a referee officiating a PBA basketball game. They
merely serve as rules of conduct or guidelines to maintain the integrity of the professional basketball league.
In Sonza vs ABSCBN, the Court held that not all rules imposed by the hiring party on the hired party indicate
that the latter is an employee of the former. They held further that not every form of control that a party reserves to
himself over the conduct of the other party in relation to the services being rendered ay be accorded the effect of
establishing an employer-employee relationship.
Once the petitioners are in the playing court, the referees are the only, absolute, and final authority therein. The
very nature of their job calls for freedom of control by respondents.
The following circumstances indicate that petitioner is an independent contractor: (1) the referees are required
to report for work only when PBA games are scheduled, which is three times a week spread over an average of only
105 playing days a year, and they officiate games at an average of two hours per game as compared to regular em-
ployees who work for eight hour a day for five days a week; and (2) the only deductions from the fees received by
the referees are withholding taxes as compared to regular employees whose salaries are deducted for contributions to
SSS, Philhealth or Pag-Ibig..
Foreign case law have held that a soccer referee and an umpire are independent contractors since the rules im-
posed upon them do not control the means and method by which they work.
In addition, the fact that PBA repeatedly hired them does not prove that they are employees of the association.
For a hired party to be considered an employee, the hiring party must have control over the means and methods by
which the hired party is to perform his work, which is absent in this case. The repeated hiringsimply signifies re-
newal of the contract between PBA ad Bernante.
APPLICATION:
For a hired party to be considered an employee, the hiring party must have control over the means and methods
by which the hired party is to perform his work, which is absent in this case. The repeated hiring simply signifies
renewal of the contract between PBA and Bernante and if PBA decides to discontinue petitioner's services at the end
of the term fixed in the contract, whether for unsatisfactory services, or violation of the terms and conditions of the
contract, or for whatever other reason, the same merely results in the non-renewal of the contract, as in the present
case. The non-renewal of the contract between the parties does not constitute illegal dismissal of petitioner by re-
spondents.
CONCLUSION:
Petitioner is not an employee of PBA due to the lack of the element of control and therefore, the non-renewal of
the contract did not constitute illegal dismissal.
CESAR C. LIRIO, petitioner vs. WILMER D. GENOVIA, respondent

G.R. No. 169757. November 23, 2011
FACTS:
Respondent Genovia was hired as a studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix Record-
ing Studio (Celkor); He received a monthly salary of P7,000.00 and was entitled to an additional commission of
P100.00 per hour as recording technician whenever a client uses the studio. A few days after he started working,
petitioner approached him about a project to produce an album for his 15-year-old daughter, Celine Mei Lirio, a
former talent of ABS-CBN Star Records. Petitioner asked respondent to compose and arrange songs for Celine and
promised that he (Lirio) would draft a contract to assure respondent of his compensation. After the album was
recorded and released, respondent reminded petitioner about the contract on his compensation as composer and
arranger of the album. Petitioner told respondent that since he was practically a nobody and had proven nothing yet
in the music industry, respondent did not deserve such a high compensation petitioner informed respondent that he
was entitled only to 20% net profit share, and not the gross sales of the album, and that the salaries he received and
would continue to receive as studio manager of Celkor would be deducted from the said 20% net profit share. Re-
spondent objected and insisted that he be properly compensated. On March 14, 2002, petitioner verbally terminated
respondents services, and was instructed not to report for work. On July 9, 2002, respondent filed a complaint
against petitioner for illegal dismissal, non-payment of commission and award of moral and exemplary damages.
On October 31, 2003, Labor Arbiter Ronaldo O. Hernandez rendered a decision in favor of Respondent Gen-
ovia. On appeal to the National Labor Relations Commission (NLRC), said decision was REVERSED and SET
ASIDE. Aggrieved, Respondent filed a petition for certiorari before the Court of Appeals rendered a decision re-
versing and setting aside the resolution of the NLRC and reinstating the decision of the Labor Arbiter, with modifi-
cations
a) Petitioners Arguments (Cesar C. Lirio Lost)

In defense, petitioner states that respondent was not hired as a studio manager, composer, technician or as an
employee in any other capacity of Celkor. Respondent could not have been hired as a studio manager, since the
recording studio has no other personnel except petitioner. Petitioner asserts that he entered into a verbal agreement
with respondent to co-produce the album on certain conditions, among others: (1) petitioner shall have 60% of net
profit, while respondent and Celine Mei Lirio were each entitled to 20% of the net profit; (2) respondent shall be
entitled to draw advances of P7,000 a month, which shall be deductible from his share of the net profits and only
until such time that the album has been produced. Petitioner further asserts that his relationship with respondent is
one of informal partnership under Article 1767 of the New Civil Code and that no employer-employee relationship
existed between them. Petitioner also contends that it was wrong for Respondent to have appealed the decision of
the NLRC to the CA via a petition for certiorari under Rule 65.
b) Respondents Arguments (Wilmer D. Genovia Won)

Respondent asserts that he was illegally dismissed as he was terminated without any valid grounds, and no hear-
ing was conducted before he was terminated, in violation of his Constitutional right of due process. Having worked
for more than six (6) months, he was already a regular employee. Although he was a so called studio manager, he
had no managerial powers, but was merely an ordinary employee.
ISSUE/s:
I. Whether or not the Court of Appeals erred in reversing and setting aside the decision of the NLRC, and reinstating
the decision of the Labor Arbiter with modification.
II. Whether or not there existed an employer-employee relationship between Petitioner and Respondent.
RULING:
The petition is DENIED for lack of merit the decision of the Court of Appeals is AFFIRMED.
Rule:
I. In petitions for review, only errors of law are generally reviewed by the Supreme Court. This rule, however is not
ironclad. Where the issue is shrouded by a conflict of factual perceptions by the lower court or the lower administra-
tive body, in this case, the NLRC, the Court is restrained to review the factual finding of the Court of Appeals
II. The elements to determine the existence of an employment relationship are: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the
employees conduct. The most important element is the employers control over the employees conduct, not only as
to the result of the work to be done, but also as to the means and methods to accomplish it. It is settled that no par-
ticular form of evidence is required to prove the existence of an employer-employee relationship. Any competent
and relevant evidence to prove the relationship may be admitted.
In termination cases, the burden is upon the employer to show substantial evidence that the termination was for law-
ful cause and validly made. For an employees dismissal to be valid, (a) the dismissal must be for a valid cause, and
(b) the employee must be afforded due process which Petitioner failed to comply with these legal requirements.
APPLICATION:
In this case, evidence showed that petitioner hired respondent as an employee and was paid a monthly wage of
P7,000. Petitioner wielded the power to dismiss as respondent stated that he was verbally dismissed by petitioner.
The power of control refers merely to the existence of power. It is not essential for the employer to actually super-
vise the performance of duties of the employee, as it is sufficient that the former has a right to wield the power.
CONCLUSION:
Thus, the Court of Appeals correctly affirmed the Labor Arbiters finding that respondent was illegally dis-
missed, and entitled to payment of backwages, and separation pay in lieu of reinstatement.
Jao vs. BCC Products Sales Inc.

G.R. No. 163700, April 18, 2012
FACTS:
The main issue in this case is whether or not there existan employer-employee relationship. The issue arose that
on October 19, 1995, the security guards of BCC barred petitioner Jao from entering the premises of BCC upon in-
struction of Ty. that his attempts to report to work in November and December 12, 1995 were frustrated because he
continued to be barred from entering the premises of BCC; and that he filed a complaint dated December 28, 1995
for illegal dismissal, reinstatement with full backwages, non-payment of wages, damages and attorney's fees.
a) Petitioners Arguments
Petitioner maintained that respondent BCC Product Sales, Inc. (BCC) and its President, respondent Terrance Ty
(Ty), employed him as comptroller starting from September 1995 with a monthly salary of P20,000.00 to handle the
financial aspect of BCC's business;
b) Respondents Arguments
Respondents countered that petitioner was not their employee but the employee of Sobien Food Corporation
(SFC), the major creditor and supplier of BCC; and that SFC had posted him as its comptroller in BCC to oversee
BCC's finances and business operations and to look after SFC's interests or investments in BCC.
Although Labor Arbiter Felipe Pati ruled in favor of petitioner on June 24, 1996, the NLRC vacated the ruling
and remanded the case for further proceedings. Thereafter, Labor Arbiter Jovencio Ll. Mayor rendered a new
decision on September 20, 2001, dismissing petitioner's complaint for want of an employer-employee relationship
between the parties. On July 31, 2002, the NLRC rendered a decision reversing Labor Arbiter Mayor's decision, and
declaring that petitioner had been illegally dismissed. It ordered the payment of unpaid salaries, backwages and 13th
month pay, separation pay and attorney's fees.
On February 27, 2004, the CA promulgated its assailed decision holdingthat no employer-employee relationship
existed between petitioner BCC and the private respondent. Hence, the instant petition.
ISSUE:
Whether or not an employer-employee relationship existed between petitioner and BCC which will automatically
warrant a finding of illegal dismissal
RULING:
There was no employer-employee relationship
Rule:
The petition lacks merit.
In determining the presence or absence of an employer-employee relationship, the Court has consistently looked
for the following incidents, to wit: (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.
Hereunder are some of the circumstances and incidents occurring while petitioner was supposedly employed by
BCC that debunked his claim against respondents. It can be deduced that respondents did not exercise the power of
control over him, because he acted for the benefit and in the interest of SFC more than of BCC. In addition,
petitioner presented no document setting forth the terms of his employment by BCC. The failure to present such
agreement on terms of employment may be understandable and expected if he was a common or ordinary laborer
who would not jeopardize his employment by demanding such document from the employer, but may not square
well with his actual status as a highly educated professional.
Petitioner's admission that he did not receive his salary for the three months of his employment by BCC, as his
complaint for illegal dismissal and non-payment of wages and the criminal case for estafa he later filed against the
respondents for non-payment of wages indicated, further raised grave doubts about his assertion of employment by
BCC. If the assertion was true, we are puzzled how he could have remained in BCC's employ in that period of time
despite not being paid the first salary of P20,000.00/month. Moreover, his name did not appear in the payroll of
BCC despite him having approved the payroll as comptroller.
With all the grave doubts thus raised against petitioner's claim, we need not dwell at length on the other proofs
he presented, like the affidavits of some of the employees of BCC, the ID, and the signed checks, bills and receipts.
Suffice it to be stated that such other proofs were easily explainable by respondents and by the aforestated
circumstances showing him to be the employee of SFC, not of BCC.
APPLICATION:
In order to determine if an employer-employee exist, you have to consider the four (4) standards in determining
the existence of an employer-employee relationship, namely, (a) the manner of selection and engagement of the pu-
tative employee; (b) the mode of payment of wages; (c) the presence or absence of power of dismissal; and, (d) the
presence or absence of control of the putative employee's conduct." Of these powers the power of control over the
employee's conduct is generally regarded as determinative of the existence of the relationship.
CONCLUSION:
Thus, Jao was not an employee in BCC company First, there is no proof that the services of the private respon-
dent were engaged to perform the duties of a comptroller in the petitioner company. There is no proof that the pri-
vate respondent has undergone a selection procedure as a standard requisite for employment, especially with such a
delicate position in the company. Neither is there any proof of his appointment nor is there any showing that the
parties entered into an employment contract, stipulating thereof that he will receive P20,000.00/month salary as
comptroller, before the private respondent commenced with his work as such. Second, as clearly established on
record, the private respondent was not included in the petitioner company's payroll during the time of his alleged
employment with the former.
LEGEND HOTEL, petitioner vs. REALUYO defendant.

G.R. No. 153511. July 18, 2012.
FACTS:
This labor case for illegal dismissal involves a pianist employed to perform in the restaurant of a hotel. On Au-
gust 9, 1999, respondent, whose stage name was Joey R. Roa, filed a complaint for alleged unfair labor practice,
constructive illegal dismissal, and the underpayment/nonpayment of his premium pay for holidays, separation pay,
service incentive leave pay, and 13th month pay.
a) Respondent's Arguments
Respondent averred that he had worked as a pianist at the Legend Hotel's Tanglaw Restaurant from September
1992 with an initial rate of P400.00/night that was given to him after each night's performance; that his rate had in-
creased to P750.00/night; and that during his employment, he could not choose the time of performance, which had
been fixed from 7:00 pm to 10:00 pm for three to six times/week. He added that the Legend Hotel's restaurant man-
ager had required him to conform with the venue's motif; that he had been subjected to the rules on employees' rep-
resentation checks and chits, a privilege granted to other employees; that on July 9, 1999, the management had noti-
fied him that as a cost-cutting measure his services as a pianist would no longer be required effective July 30, 1999;
that he disputed the excuse, insisting that Legend Hotel had been lucratively operating as of the filing of his com-
plaint; and that the loss of his employment made him bring his complaint.
b) Petitioner's Arguments
In its defense, petitioner denied the existence of an employer-employee relationship with respondent, insisting
that he had been only a talent engaged to provide live music at Legend Hotel's Madison Coffee Shop for three hours/
day on two days each week; and stated that the economic crisis that had hit the country constrained management to
dispense with his services.
LABOR ARBITER:
On December 29, 1999, dismissed the complaint for lack of merit upon finding that the parties had no employ-
er-employee relationship. CA, On February 11, 2002, set aside the decision of the NLRC.
ISSUE:
Whether there exists an employer-employee relationship.
RULING:
We DENY the petition for review on certiorari, and AFFIRM the decision of the Court of Appeals promulgat-
ed on February 11, 2002.
Employer-employee relationship existed between the parties. The issue of whether or not an employer-em-
ployee relationship existed between petitioner and respondent is essentially a question of fact. The factors that de-
termine the issue include who has the power to select the employee, who pays the employees wages, who has
the power to dismiss the employee, and who exercises control of the methods and results by which the work of
the employee is accomplished. A finding that the relationship exists must nonetheless rest on substantial evidence,
which is that amount of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion.
First of all, petitioner actually wielded the power of selection at the time it entered into the service contract
dated September 1, 1992 with respondent. This is true, notwithstanding petitioners insistence that respondent had
only offered his services to provide live music at petitioners Tanglaw Restaurant, and despite petitioners position
that what had really transpired was a negotiation of his rate and time of availability. The power of selection was
firmly evidenced by, among others, the express written recommendation dated January 12, 1998 by Christine Velaz-
co, petitioners restaurant manager, for the increase of his remuneration.
Secondly, There is no denying that the remuneration denominated as talent fees was fixed on the basis of his
talent and skill and the quality of the music he played during the hours of performance each night, taking into ac-
count the prevailing rate for similar talents in the entertainment industry. Respondents remuneration, albeit de-
nominated as talent fees, was still considered as included in the term wage in the sense and context of the La-
bor Code, regardless of how petitioner chose to designate the remuneration.
Thirdly, the power of the employer to control the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship. This is the so-called control test, and is
premised on whether the person for whom the services are performed reserves the right to control both the end
achieved and the manner and means used to achieve that end.
A review of the records, however, shows that respondent performed his work as a Pianist under petitioners su-
pervision and control. Specifically, petitioners control of both the end achieved and the manner and means used to
achieve that end was demonstrated by the following, to wit:
a) He could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm,
three to six times a week;
b) He could not choose the place of his performance;
c) The restaurants manager required him at certain times to perform only Tagalog songs or music, or to wear
barong Tagalog to conform to the Filipiniana motif; and
d) He was subjected to the rules on employees representation check and chits, a privilege granted to other em-
ployees.
WHEREFORE, we DENY the petition for review on certiorari, and AFFIRM the decision of the Court of Ap-
peals promulgated on February 11, 2002, subject to the modification that should reinstatement be no longer fea-
sible, petitioner shall pay to respondent separation pay of one month for every year of service computed from
September 1992 until the finality of this decision, and full backwages from the time his compensation was
withheld until the finality of this decision.
The New Philippine Skylanders, Inc., petitioner vs. Dakila, respondent

G.R. No. 199547, Sept. 24, 2012
Facts:
November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with
the Philippine Association of Free Labor Unions (PAFLU) September (PAFLU), won in the certification election
conducted among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Sky-
landers Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the
Secretary of Labor.
In settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLUs supposed
deliberate and habitual dereliction of duty toward its members. Attached to the notice was a copy of the resolution
adopted and signed by the officers and members of PSEA authorizing their local union to disaffiliate from its mother
federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philip-
pine Skylanders Employees Association -National Congress of Workers (PSEA-NCW), and to maintain continuity
within the organization, allowed the former officers of PSEA-PAFLU to continue occupying their positions as elect-
ed officers in the newly-forged PSEA-NCW.
On 17 March, 1994, PSEA-NCW entered into a collective bargaining agreement with PSI which was immedi-
ately registered with the Department of Labor and Employment.
PAFLU requested for the accounting. PSI through its personnel manager Francisco Dakila denied the request.
PAFLU through SerafinAyroso filed a complaint for unfair labor practice against PSI, its president Mariles Ro-
mulo and personnel manager Francisco Dakila. PAFLU alleged that aside from PSIs refusal to bargain collectively
with its workers, the company through its president and personnel manager, was also liable for interfering with its
employees union activities
Ayroso filed another complaint in behalf of PAFLU for unfair labor practice against Francisco Dakila. Through
Ayroso PAFLU claimed that Dakila was present in PSEAs organizational meeting thereby confirming his illicit par-
ticipation in union activities. Ayroso added that the members of the local union had unwittingly fallen into the ma-
nipulative machinations of PSI and were lured into endorsing a collective bargaining agreement which was detri-
mental to their interests.
PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party respon-
dents. PAFLU averred that the local officers of PSEA-PAFLU, namely MacarioCabanias, PepitoRodillas, Sharon
Castillo, DaniloCarbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, NerisaMor-
tel, TeofiloQuirong, Leonardo Reyes, Manuel Cadiente, and HerminiaRiosa, were equally guilty of unfair labor
practice since they brazenly allowed themselves to be manipulated and influenced by petitioner Francisco Dakila.
Dakila moved for the dismissal of the complaint on the ground that the issue of disaffiliation was an inter-union
conflict which lay beyond the jurisdiction of the Labor Arbiter. PSEA was no longer affiliated with PAFLU, Ayroso
or PAFLU for that matter had no personality to file the instant complaint.
Labor Arbiter declared PSEAs disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respec-
tive officers guilty of unfair labor practice.
As PSEA-NCWs personality was not accorded recognition, its collective bargaining agreement with PSI was
struck down for being invalid.
PSI, PSEA and their respective officers appealed to the National Labor Relations Commission (NLRC). But the
NLRC upheld the Decision ofthe Labor Arbiter.
Issue:
Whether or Not, PAFLU, has the right to self-organize
Ruling:
Local unions have a right to separate from their mother federation on the ground that as separate and voluntary
associations, local unions do not owe their creation and existence to the national federation to which they are affili-
ated but, instead, to the will of their members. The sole essence of affiliation is to increase, by collective action, the
common bargaining power of local unions for the effective enhancement and protection of their interests. Admitted-
ly, there are times when without succor and support local unions may find it hard, unaided by other support groups,
to secure justice for them. Yet the local unions remain the basic units of association, free to serve their own interests
subject to the restraints imposed by the constitution and by-laws of the national federation, and free also to renounce
the affiliation upon the terms laid down in the agreement which brought such affiliation into existence.
There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden
to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. As such, the pen-
dency of an election protest involving both the mother federation and the local union did not constitute a bar to a
valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local
union, or an equivalent of 92.5% of the total union membership supported the claim of disaffiliation and had in fact
disauthorized PAFLU from instituting any complaint in their behalf.
It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As
PSEA had validly severed itself from PAFLU, there would be no restrictions which could validly hinder it from sub-
sequently affiliating with NCW and entering into a collective bargaining agreement in behalf of its members.
The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license
to act independently of the local union.
Tesoro, et al., petitioner vs. Manila Retreaders, Inc., respondent.

G.R. No. 171482. March 12, 2014.
FACTS:
Peitioners used to work as salesmen for respondents Metro Manila Retreaders, Inc. (Bandag). Petitioners quit
their jobs as salesmen and entered into Service Franchise Agreements (SFAs) with Bandagfor the operation of their
respective franchises. Under the SFAs, Bandag would provide funding support to the petitioners subject to regular
or periodic liquidation of their revolving funds. The expenses out of these funds would be deducted from petitioners
sales to determine their incomes. After a length of time, the petitioners began to default on their obligations to sub-
mit periodic liquidations of their operational expenses in relation to the revolving funds. Consequently, Bandag ter-
minated their respective SFA.Aggrieved, petitioners filed a complaint for constructive dismissal, non-payment of
wages, incentive pay, 13th month pay and damages against Bandag with the National Labor Relations Commission
(NLRC).
a) Petitioners Arguments (Tesoro, et al. Lost)

Notwithstanding the execution of the SFAs, they remained to be employees of Bandag. The SFAs are being
circumvention of their status as regular employees.
b) Respondents Arguments (Metro Manila Retreaders, Inc. Win)

Petitioners freely resigned from their employment and decided to avail themselves of the opportunity to be in-
dependent entrepreneurs under the franchise scheme. Thus, no employer-employee relationship existed.
ISSUE:
Whether or not the employer-employee relationship that existed between Tesoro, et al. and Bandagcontinued
during the franchise operation?
RULING:
No, there is no more employer-employee relationship that existed between Tesoro, et al. and Bandagduring the
franchise operation.
Rule:
The tests for determining 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 "control test," the most important element, the employer's power to control the employee with respect to
the means and methods by which the work is to be accomplished.
Application:
In this case, the franchisors may impose guidelines that somehow restrict the petitioners' conduct which do not
necessarily indicate "control." The important factor to consider is still the element of control over how the work it-
self is done, not just its end result. Petitioners cannot use the revolving funds feature of the SFAs as evidence of
theiremployer-employee relationship with Bandag. These funds do not represent wages. Theyare more in the nature
of capital advances for operations that Bandag conceptualized toattract prospective franchisees. Petitioners' incomes
depended on the products they make,controlled by their individual abilities to increase sales and reduce operating
costs.
Conclusion:
The petitioners ceased to become employees of the respondent during the franchise operation. Thus, they are
not entitled to wages, incentive pay, and 13th month pay.
ROYALE HOMES MARKETING CORPORATION, petitioner, vs. FIDEL P. ALCANTARA [deceased], sub-
stituted by his heirs, respondent.
G.R. No. 195190. July 28, 2014.
FACTS:
In 1994, Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara as its Marketing
Director for a fixed period of one year. His work consisted mainly of marketing Royale Homes' real estate invento-
ries on an exclusive basis. Royale Homes reappointed him for several consecutive years, the last of which covered
the period January 1 to December 31, 2003 where he held the position of Division 5 Vice-President-Sales.
On December 17, 2003, Alcantara filed a Complaint for Illegal Dismissal against Royale Homes, alleging that
he is an employee of Royale Homes.
a) Petitioners Arguments (Royale Homes Win)

Royale Homes contends that its contract with Alcantara is clear and unambiguous it engaged his services as
an independent contractor. This can be readily seen from the contract stating that no employer-employee relationship
exists between the parties; that Alcantara was free to solicit sales at any time and by any manner he may deem ap-
propriate; that he may recruit sales personnel to assist him in marketing Royale Homes' inventories; and, that his
remunerations are dependent on his sales performance.
Royale Homes maintains that it is expected to exercise some degree of control over its independent contractors,
but that does not automatically result in the existence of employer-employee relationship. For control to be consid-
ered as a proof tending to establish employer-employee relationship, the same must pertain to the means and method
of performing the work; not on the relationship of the independent contractors among themselves or their persons or
their source of living.
Royale Homes further asserts that it neither hired nor wielded the power to dismiss Alcantara.
b) Private Respondents Arguments (Fidel Alcantara - Lost)

Alcantara alleged that he is a regular employee of Royale Homes since he is performing tasks that are necessary
and desirable to its business; that in 2003 the company gave him P1.2 million for the services he rendered to it; that
in the first week of November 2003, however, the executive officers of Royale Homes told him that they were won-
dering why he still had the gall to come to office and sit at his table; and that the acts of the executive officers of
Royale Homes amounted to his dismissal from work without any valid or just cause and in gross disregard of the
proper procedure for dismissing employees.
ISSUES:
Whether Alcantara was an independent contractor or an employee of Royale Homes.
RULING:
Alcantara was an independent contractor, not an employee, of Royale Homes.
Rule:
While the existence of employer-employee relationship is a matter of law, the characterization made by the par-
ties in their contract as to the nature of their juridical relationship cannot be simply ignored, particularly in cases
where the parties' written contract unequivocally states their intention at the time they entered into it.
In determining the existence of an employer-employee relationship, the Court has generally relied on the four-
fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dis-
missal; and (4) the employer's power to control the employee with respect to the means and methods by which the
work is to be accomplished. Among the four, the most determinative factor in ascertaining the existence of employ-
er- employee relationship is the "right of control test". It is deemed to be such an important factor that the other
requisites may even be disregarded." This holds true where the issues to be resolved is whether a person who per-
forms work for another is the latter's employee or is an independent contractor. For where the person for whom the
services are performed reserves the right to control not only the end to be achieved, but also the means by which
such end is reached, employer-employee relationship is deemed to exist.
However, not every form of control is indicative of employer-employee relationship. A person who performs
work for another and is subjected to its rules, regulations, and code of ethics does not necessarily become an em-
ployee. As long as the level of control does not interfere with the means and methods of accomplishing the assigned
tasks, the rules imposed by the hiring party on the hired party do not amount to the labor law concept of control that
is indicative of employer-employee relationship.
Application:
In this case, the contract, duly signed and not disputed by the parties, conspicuously provides that "no employer-
employee relationship exists between" Royale Homes and Alcantara, as well as his sales agents. It is clear that they
did not want to be bound by employer-employee relationship at the time of the signing of the contract.
Moreover, the Court agreed with Royale Homes that the rules, regulations, code of ethics, and periodic evalua-
tion alluded to by Alcantara do not involve control over the means and methods by which he was to perform his job.
Understandably, Royale Homes has to fix the price, impose requirements on prospective buyers, and lay down the
terms and conditions of the sale, including the mode of payment, which the independent contractors must follow. It
is also necessary for Royale Homes to allocate its inventories among its independent contractors, determine who has
priority in selling the same, grant commission or allowance based on predetermined criteria, and regularly monitor
the result of their marketing and sales efforts. But to the mind of the Court, these do not pertain to the means and
methods of how Alcantara was to perform and accomplish his task of soliciting sales. They do not dictate upon him
the details of how he would solicit sales or the manner as to how he would transact business with prospective clients.
In Tongko, this Court held that guidelines or rules and regulations that do not pertain to the means or methods to be
employed in attaining the result are not indicative of control as understood in labor law.
Alcantara had full control over the means and methods of accomplishing his tasks as he can "solicit sales at any
time and by any manner which [he may] deem appropriate and necessary." He performed his tasks on his own ac-
count free from the control and direction of Royale Homes in all matters connected therewith, except as to the re-
sults thereof.
Lastly, the element of payment of wages is also absent in this case.There is no proof that he received fixed
monthly salary. No payslip or payroll was ever presented and there is no proof that Royale Homes deducted from his
supposed salary withholding tax or that it registered him with the Social Security System, Philippine Health Insur-
ance Corporation, or Pag-Ibig Fund.All of these indicate an independent contractual relationship.
Conclusion:
Thus, since the clear intention of the parties on their relationship that no employer-employee relationship should
exist between them was clearly indicated in their contract, Royale Homes having no control over the means and
methods over which Alcantara should perform his work, and the element of wages being absent, Alcantara is not an
employee, but only an independent contractor of Royale Homes. Being an independent contractor, as such is within
the jurisdiction of regular courts, the complaint was dismissed.
FUJI TELEVISION NETWORK, INC., petitioner, vs. ARLENE S. ESPIRITU, respondent.

G.R. Nos. 204944-45. December 3, 2014
FACTS:
In 2005, Arlene S. Espiritu ("Arlene") was engaged by Fuji Television Network, Inc. ("Fuji") as a news corre-
spondent/producer "tasked to report Philippine news to Fuji through its Manila Bureau field office." Arlene's em-
ployment contract initially provided for a term of one (1) year but was successively renewed on a yearly basis with
salary adjustment upon every renewal.
Sometime in January 2009, Arlene was diagnosed with lung cancer. She informed Fuji about her condition. In
turn, the Chief of News Agency of Fuji, Yoshiki Aoki, informed Arlene "that the company will have a problem re-
newing her contract" since it would be difficult for her to perform her job. She "insisted that she was still fit to work
as certified by her attending physician."
After several verbal and written communications, Arlene and Fuji signed a non-renewal contract on May 5,
2009 where it was stipulated that her contract would no longer be renewed after its expiration on May 31, 2009. The
contract also provided that the parties release each other from liabilities and responsibilities under the employment
contract.In consideration of the non-renewal contract, Arlene "acknowledged receipt of the total amount of US
$18,050.00 representing her monthly salary from March 2009 to May 2009, year-end bonus, mid-year bonus, and
separation pay." However, Arlene affixed her signature on the non-renewal contract with the initials "U.P." for "un-
der protest."
On May 6, 2009, the day after Arlene signed the non-renewal contract, she filed a complaint for illegal dis-
missal and attorney's fees with the National Capital Region Arbitration Branch of the National Labor Relations
Commission. She alleged that she was forced to sign the non-renewal contract when Fuji came to know of her ill-
ness and that Fuji withheld her salaries and other benefits for March and April 2009 when she refused to sign. Arlene
claimed that she was left with no other recourse but to sign the non-renewal contract, and it was only upon signing
that she was given her salaries and bonuses, in addition to separation pay equivalent to four (4) years.
a) Arlenes Arguments:
She was a regular employee because Fuji had control and supervision over her work. The news events that she
covered were all based on the instructions of Fuji. She maintains that the successive renewal of her employment
contracts for four (4) years indicates that her work was necessary and desirable. In addition, Fuji's payment of sepa-
ration pay equivalent to one (1) month's pay per year of service indicates that she was a regular employee. To further
support her argument that she was not an independent contractor, she states that Fuji owns the laptop computer and
mini-camera that she used for work. On her illness, Arlene points out that it was not a ground for her dismissal be-
cause her attending physician certified that she was fit to work.
Arlene admits that she signed the non-renewal agreement with quitclaim, not because she agreed to its terms,
but because she was not in a position to reject the non-renewal agreement.Further, she badly needed the salary with-
held for her sustenance and medication. She posits that her acceptance of separation pay does not bar filing of a
complaint for illegal dismissal.
b) Fujis Arguments:
Arlene was hired as a stringer, and was informed that she would remain one. She was hired as an indepen-
dent contractor. Fuji had no control over her work. The employment contracts were executed and renewed annually
upon Arlene's insistence to which Fuji relented because she had skills that distinguished her from ordinary employ-
ees. Arlene and Fuji dealt on equal terms when they negotiated and entered into the employment contracts. There
was no illegal dismissal because she freely agreed not to renew her fixed-term contract as evidenced by her e-mail
correspondences with Yoshiki Aoki. In fact, the signing of the non-renewal contract was not necessary to terminate
her employment since "such employment terminated upon expiration of her contract." Finally, Fuji had dealt with
Arlene in good faith, thus, she should not have been awarded damages.
Fuji do not need a permanent reporter since the news reported by Arlene could easily be secured from other
entities or from the internet. Fuji "never controlled the manner by which she performed her functions." It was Ar-
lene who insisted that Fuji execute yearly fixed-term contracts so that she could negotiate for annual increases in her
pay.
Arlene reported for work for only five (5) days in February 2009, three (3) days in March 2009, and one (1)
day in April 2009. Despite the provision in her employment contract that sick leaves in excess of 30 days shall not
be paid, Fuji paid Arlene her entire salary for the months of March, April, and May; four (4) months of separation
pay; and a bonus for two and a half months for a total of US$18,050.00. Despite having received the amount of US
$18,050.00, Arlene still filed a case for illegal dismissal.
Circumstances would show that Arlene was not illegally dismissed. The decision to not renew her contract
was mutually agreed upon by the parties as indicated in Arlene's e-mail dated March 11, 2009 where she consented
to the non-renewal of her contract but refused to sign anything. Aoki informed Arlene in an e-mail dated March 12,
2009 that she did not need to sign a resignation letter and that Fuji would pay Arlene's salary and bonus until May
2009 as well as separation pay. Arlene sent an e-mail dated March 18, 2009 with her version of the non-renewal
agreement that she agreed to sign this time. This attached version contained a provision that Fuji shall re-hire her if
she was still interested to work for Fuji. For Fuji, Arlene's e-mail showed that she had the power to bargain.
ISSUE:
Whether or notArlene is a regular employee.
RULING:
The petition for review filed by Fuji is dismissed.
Rule:
The test for determining regular employment is whether there is a reasonable connection between the employ-
ee's activities and the usual business of the employer. Article 280 provides that the nature of work must be "neces-
sary or desirable in the usual business or trade of the employer" as the test for determining regular employment.
Article 280 of the Labor Code provides that:

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 employ-
ment shall be deemed to be regular where the employee has been engaged to perform ac-
tivities which are usually necessary or desirable in the usual business or trade of the em-
ployer, 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 para-

graph; 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.
This provision classifies employees into regular, project, seasonal, and casual. It further classifies regular
employees into two kinds: (1) those "engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer"; and (2) casual employees who have "rendered at least one year of service,
whether such service is continuous or broken."
Another classification of employees, i.e., employees with fixed-term contracts, was recognized in Brent
School, Inc. v. Zamora where this court discussed that:
Logically, the decisive determinant in the term employment should not be
the activities that the employee is called upon to perform, but the day cer-
tain agreed upon by the parties for the commencement and termination of
their employment relationship, a day certain being understood to be "that
which must necessarily come, although it may not be known when."
This court further discussed that there are employment contracts where "a fixed term is an essential and
natural appurtenance" such as overseas employment contracts and officers in educational institutions.
Under the four-fold test, the "control test" is the most important. As to how the elements in the four-fold test are
proven, this court has discussed that: there is no hard and fast rule designed to establish the aforesaid elements. Any
competent and relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, so-
cial security registration, appointment letters or employment contracts, payrolls, organization charts, and personnel
lists, serve as evidence of employee status.
Application:
Arlene's contract indicating a fixed term did not automatically mean that she could never be a regular employee.
This is precisely what Article 280 seeks to avoid. The ruling in Brent remains as the exception rather than the gener-
al rule.
Fuji's argument that Arlene was an independent contractor under a fixed-term contract is contradictory. Employ-
ees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an employer-em-
ployee relationship exists. The test in this kind of contract is not the necessity grid desirability of the employee's
activities, "but the day certain agreed upon by the parties for the commencement and termination of the employment
relationship." For regular employees, the necessity and desirability of their work in the usual course of the employ-
er's business are the determining factors. On the other hand, independent contractors do not have employer-employ-
ee relationships with their principals.
Fuji had the power to dismiss Arlene, as provided for in paragraph 5 of her professional employment
contract. Her contract also indicated that Fuji had control over her work because she was required to work for eight
(8) hours from Monday to Friday, although on flexible time. Sonza was not required to work for eight (8) hours,
while Dumpit-Murillo had to be in ABC to do both on-air and off-air tasks
A news producer "plans and supervises newscast . . . and works with reporters in the field planning and gather-
ing information. . . ." Arlene's tasks included "monitoring and getting news stories, reporting interviewing subjects
in front of a video camera," "the timely submission of news and current events reports pertaining to the Philippines,
and traveling to Fuji's regional office in Thailand." She also had to report for work in Fuji's office in Manila from
Mondays to Fridays, eight (8) hours per day. She had no equipment and had to use the facilities of Fuji to accom-
plish her tasks. Further, the pieces of equipment Arlene used were all owned by Fuji, showing that she was a regular
employee and not an independent contractor.
Conclusion:
Further, an employee can be a regular employee with a fixed-term contract. The law does not preclude the pos-
sibility that a regular employee may opt to have a fixed-term contract for valid reasons. This was recognized
in Brent: For as long as it was the employee who requested, or bargained, that the contract have a "definite date of
termination," or that the fixed-term contract be freely entered into by the employer and the employee, then the valid-
ity of the fixed-term contract will be upheld. The existence of a fixed-term contract should not mean that there can
be no illegal dismissal. Due process must still be observed in the pre-termination of fixed-term contracts of em-
ployment.
Cabaobas et al., petitionersvs.Pepsi Cola et.al, respondent.

G.R. No. 176908. March 25, 2015.
FACTS:
Respondent Pepsi-Cola Products Philippines, Inc. (PCPPI) is a domestic corporation engaged in the manufac-
turing, bottling and distribution of soft drink products, which operates plants all over the country, one of which is the
Tanauan Plant in Tanauan, Leyte.
In 1999, PCPPI's Tanauan Plant allegedly incurred business losses in the total amount of Twenty-Nine Million
One Hundred Sixty-Seven Thousand and Three Hundred Ninety (P29,167,390.00) Pesos. To avert further losses,
PCPPI implemented a company-w ide retrenchment program denominated as Corporate-wide Rightsizing Program
(CRP) from 1999 to 2000, and retrenched forty-seven (47) employees of its Tanauan Plant on July 31, 1999.
On September 24, 1999, twenty-seven (27) of said employees,led by AnecitoMolon(Molon, et al.), filed com-
plaints for illegal dismissal before the NLRC which were docketed as NLRC RAB Cases Nos. VIII-9-0432-99 to 9-
0458-99, entitled "Molon, et al. v. Pepsi-Cola Products, Philippines, Inc."
On January 15, 2000, petitioners, who are permanent and regular employees of the Tanauan Plant, received
their respective letters, informing them of the cessation of their employment on February 15, 2000, pursuant to
PCPPI's CRP.
Petitioners then filed their respective complaints for illegal dismissal before the National Labor Relations
Commission Regional Arbitration Branch No. VIII in Tacloban City. Said complaints were docketed as NLRC RAB
VIII-03-0246-00 to 03-0259-00, entitled "Kempis, et al. v. Pepsi-Cola Products, Philippines, Inc."
a) Petitioners Arguments (Leyte Pepsi-Cola Employees Union-Associated Labor Union LEPCEU-ALU: Lost)
In their Consolidated Position Paper, petitioners alleged that PCPPI was not facing serious financial losses be-
cause after their termination, it regularized four (4) employees and hired replacements for the forty-seven (47) pre-
viously dismissed employees. They also alleged that PCPPI's CRP was just designed to prevent their union, Leyte
Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU), from becoming the certified bargaining
agent of PCPPI's rank-and- file employees.
b) Respondents Arguments (Pepsi-Cola Products Philippines, Inc. - Win)

PCPPI countered that petitioners were dismissed pursuant to its CRP to save the company from total bank-
ruptcy and collapse; thus, it sent notices of termination to them and to the Department of Labor and Employment. In
support of its argument that its CRP is a valid exercise of management prerogative, PCPPI submitted audited finan-
cial statements showing that it suffered financial reverses in 1998 in the total amount of SEVEN HUNDRED MIL-
LION (P700,000,000.00) PESOS, TWENTY-SEVEN MILLION (P27,000,000.00) PESOS of which was allegedly
incurred in the Tanauan Plant in 1999.
In view of the Court's ruling in Pepsi-Cola Products Philippines, Inc. v. Molon, PCPPI contends that the peti-
tion for review on certiorari should be denied and the CA decision should be affirmed under the principle of stare
decisis.
ISSUE:
The three issues raised by petitioners boil down to the legality of their dismissal pursuant to PCPPI's retrench-
ment program.
RULING:
The petition has no merit.
The Court observes that Pepsi had validly implemented its retrenchment program
First, Records disclose that both the CA and the NLRC had already determined that Pepsi complied with the
requirements of substantial loss and due notice to both the DOLE and the workers to be retrenched. The pertinent
portion of the CA's March 31, 2006 Decision reads:
In the present action, the NLRC held that PEPSI-COLA's financial statements are substantial evidence
which carry great credibility and reliability viewed in light of the financial crisis that hit the country which
saw multinational corporations closing shops and walking away, or adapting [sic] their own corporate
rightsizing program. Since these findings are supported by evidence submitted before the NLRC, we re-
solve to respect the same. . . . . The notice requirement was also complied with by PEPSI-COLA when it
served notice of the corporate rightsizing program to the DOLE and to the fourteen (14) employees who
will be affected thereby at least one (1) month prior to the date of retrenchment. (Citations omitted)
It is axiomatic that absent any clear showing of abuse, arbitrariness or capriciousness, the findings of fact
by the NLRC, especially when affirmed by the CA as in this case are binding and conclusive upon
the Court. Thus, given that there lies no discretionary abuse with respect to the foregoing findings, the
Court sees no reason to deviate from the same.
Second, Records also show that the respondents had already been paid the requisite separation pay as evi-
denced by the September 1999 quitclaims signed by them. Effectively, the said quitclaims serve inter alia the pur-
pose of acknowledging receipt of their respective separation pays. Appositely, respondents never questioned that
separation pay arising from their retrenchment was indeed paid by Pepsi to them. As such, the foregoing fact is now
deemed conclusive.
Third, Contrary to the CA's observation that Pepsi had singled out members of the LEPCEU-ALU in imple-
menting its retrenchment program, records reveal that the members of the company union (i.e., LEPCEU-UOEF#49)
were likewise among those retrenched.
All the requisites for a valid retrenchment are extant, the Court finds Pepsi's rightsizing program and the con-
sequent dismissal of respondents in accord with law.
The Court rules in the affirmative: Principle of Stare Decisis
There is no dispute that the issues, subject matters and causes of action between the parties in Pepsi-Cola
Products Philippines, Inc. v. Molonand the present case are identical, namely, the validity of PCPPI's retrenchment
program, and the legality of its employees' termination.
The respondents in Pepsi-Cola Products Philippines, Inc. v. Molonare petitioners' former co-employees and co-
union members of LEPCEU-ALU who were also terminated pursuant to the PCPPI's retrenchment program. The
only difference between the two cases is the date of the employees' termination, i.e., Molon, et al. belong to the first
batch of employees retrenched on July 31, 1999, while petitioners belong to the second batch retrenched on Feb-
ruary 15, 2000.
At any rate, the Court finds that the September 11, 2002 NLRC Decision has exhaustively discussed PCPPI's
compliance with the requirement that for a retrenchment to be valid, such must be reasonably necessary and likely to
prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and
real.
The letter of SGV & Co. was accompanied by a consolidat[ed] statement of Income and Deficit (supplementary
schedule) showing a net loss of P29,167,000, in the company's Tanauan Operations as of June 30, 1999, and
P22,328,000 as of June 2000. This illustrates that the income statements and the balance sheets pertaining to the
Tanauan Plant Operations as prepared by Rodante F. Ramos were audited by SGV & Co. This situation would have
been avoided had the persistent requests for ample opportunity to present evidence made by the respondent were not
persistently denied by the Executive Labor Arbiter.
Rule:
Managements Prerogative or Employers Prerogative to retrench its employees.
Essentially, the prerogative of an employer to retrench its employees must be exercised only as a last resort,
considering that it will lead to the loss of the employees' livelihood. It is justified only when all other less drastic
means have been tried and found insufficient or inadequate. Corollary thereto, the employer must prove the require-
ments for a valid retrenchment by clear and convincing evidence; otherwise, said ground for termination would be
susceptible to abuse by scheming employers who might be merely feigning losses or reverses in their business ven-
tures in order to ease out employees. These requirements are:
(1) That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred,
are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as
perceived objectively and in good faith by the employer;
(2) That the employer served written notice both to the employees and to the Department of Labor and Em-
ployment at least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least
one-half (1/2) month pay for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its
interest and not to defeat or circumvent the employees' right to security of tenure; and
(5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would
be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship
for certain workers.
Application:
Also, as aptly pointed out by the NLRC, Pepsi's Corporate Rightsizing Program was a company-wide program
which had already been implemented in its other plants in Bacolod, Iloilo, Davao, General Santos and Zamboanga.
Consequently, given the general applicability of its retrenchment program, Pepsi could not have intended to deci-
mate LEPCEU-ALU's membership, much less impinge upon its right to self- organization, when it employed the
same.
Records indicate that Pepsi had initiated sit-downs with its employees to review the criteria on which the selec-
tion of who to be retrenched would be based. This is evidenced by the report of NCMB Region VIII Director Juani-
toGeonzon which states that "Pepsi's] [m]anagement conceded on the proposal to review the criteria and to sit down
for more positive steps to resolve the issue."
On the final requirement of fair and reasonable criteria for determining who would or would not be dismissed,
records indicate that Pepsi did proceed to implement its rightsizing program based on fair and reasonable criteria
recommended by the company supervisors.
Conclusion:
Thus, PCPPIs retrenchment program created and implemented by them was in accordance with the
law. They followed all the procedures and all of the requisites of a valid retrenchment are present. The Court finds
Pepsis rightsizing program and the consequent dismissal of respondents in accord with law.
NELSON V. BEGINO, GENER DEL VALLE, MONINA AVILA-LLORIN AND MA. CRISTINA
SUMAYAO, petitioners, vs. ABS-CBN CORPORATION (FORMERLY, ABS-CBN BROADCASTING COR-
PORATION) AND AMALIA VILLAFUERTE, respondents.
G.R. No. 199166. April 20, 2015.
FACTS:
Respondent ABS-CBN Corporation (formerly ABS-CBN Broadcasting Corporation) is a television and radio
broadcasting corporation which, for its Regional Network Group in Naga City, employed respondent Amalia Villa-
fuerte (Villafuerte) as Manager. There is no dispute regarding the fact that, thru Villafuerte, ABS-CBN engaged the
services of petitioners Nelson Begino (Begino) and Gener Del Valle (Del Valle) sometime in 1996 as Cameramen/
Editors for TV Broadcasting. Petitioners Ma. Cristina Sumayao (Sumayao) and Monina Avila-Llorin (Llorin) were
likewise similarly engaged as reporters sometime in 1996 and 2002, respectively. With their services engaged by
respondents thru Talent Contracts which, though regularly renewed over the years, provided terms ranging from
three (3) months to one (1) year, petitioners were given Project Assignment Forms which detailed, among other mat-
ters, the duration of a particular project as well as the budget and the daily technical requirements thereof. In the
aforesaid capacities, petitioners were tasked with coverage of news items for subsequent daily airings in respon-
dents' TV Patrol Bicol Program.
While specifically providing that nothing therein shall be deemed or construed to establish an employer-em-
ployee relationship between the parties, petitioners filed against respondents the complaint 5 docketed as Sub-RAB
05-04-00041-07 before the National Labor Relations Commission's (NLRC) Sub-Regional Arbitration Branch No.
5, Naga City, claiming that they were regular employees of ABS-CBN.
a) Petitioners Argument ( Begino, Del Valle, Avilla-Llorin and Sumayao Win )
Petitioners averred that they worked under the direct control and supervision of Villafuerte and, at the end of
each day, were informed about the news to be covered the following day, the routes they were to take and, whenever
the subject of their news coverage is quite distant, even the start of their workday. Due to the importance of the news
items they covered and the necessity of their completion for the success of the program, petitioners claimed that,
under pain of immediate termination, they were bound by the company's policy on, among others, attendance and
punctuality.
Aside from the constant evaluation of their actions, petitioners were reportedly subjected to an annual compe-
tency assessment alongside other ABS-CBN employees, as condition for their continued employment. Although
their work involved dealing with emergency situations at any time of the day or night, petitioners claimed that they
were not paid the labor standard benefits the law extends to regular employees.
Considering their repeated re-hiring by respondents for ostensible fixed periods, this situation had gone on for
years since TV Patrol Bicol has continuously aired from 1996 onwards.
b) Respondents Aruguments ( ABS-CBN Corporation and Amalia Villafuerte Lost )
ABS-CBN is primarily engaged in the business of broadcasting television and radio content. Not having the full
manpower complement to produce its own program, the company had allegedly resorted to engaging independent
contractors like actors, directors, artists, anchormen, reporters, scriptwriters and various production and technical
staff, who offered their services in relation to a particular program. Known in the industry as talents, such indepen-
dent contractors inform ABS-CBN of their availability and were required to accomplish Talent Information Forms to
facilitate their engagement for and appearance on designated project days. Given the unpredictability of viewer pref-
erences, respondents argued that the company cannot afford to provide regular work for talents with whom it negoti-
ates specific or determinable professional fees on a per project, weekly or daily basis, usually depending on the bud-
get allocation for a project.
Respondents insisted that, pursuant to their Talent Contracts and/or Project Assignment Forms, petitioners were
hired as talents, to act as reporters and/or cameramen for TV Patrol Bicol for designated periods and rates. Fully
aware that they were not considered or to consider themselves as employees of a particular production or film outfit,
petitioners were supposedly engaged on the basis of the skills, knowledge or expertise they already possessed and,
for said reason, required no further training from ABS-CBN. Although petitioners were inevitably subjected to some
degree of control, the same was allegedly limited to the imposition of general guidelines on conduct and perfor-
mance, simply for the purpose of upholding the standards of the company and the strictures of the industry. Never
subjected to any control or restrictions over the means and methods by which they performed or discharged the tasks
for which their services were engaged, petitioners were, at most, briefed whenever necessary regarding the general
requirements of the project to be executed.
ISSUE:
Whether or not there is an employer-employee relationship between the parties.
RULING:
Labor Arbiter Jesus Orlando Quiones
Quionesresolved Sub-RAB 05-04-00041-07 in favor of petitioners who, having rendered services necessary
and related to ABS-CBN's business for more than a year, were determined to be its regular employees. With said
conclusion found to be buttressed by, among others, the exclusivity clause and prohibitions under petitioners' Tal-
ent Contracts and/or Project Assignment Forms which evinced respondents' control over them, Labor Arbiter
Quiones disposed of the case in the following wise:
WHEREFORE, finding merit in the causes of action set forth by the complainants, judgment is
hereby rendered declaring complainants MONINA AVILA-LLORIN, GENER L. DEL VALLE, NEL-
SON V. BEGINO and MA. CRISTINA V. SUMAYAO, as regular employees of respondent company,
ABS-CBN BROADCASTING CORPORATION.
Accordingly, respondent ABS-CBN Broadcasting Corporation is hereby ORDERED to pay
complainants, subject to the prescriptive period provided under Article 291 of the Labor Code, however
applicable, the total amount of Php2,440,908.36, representing salaries/wage differentials, holiday pay,
service incentive leave pay and 13th month pay, to include 10% of the judgment award as attorney's fees
of the judgment award (computation of the monetary awards are attached hereto as integral part of this
decision).
Moreover, respondents are directed to admit back complainants to work under the same terms
and conditions prevailing prior to their separation or, at respondents' option, merely reinstated in the pay-
roll.
Other than the above, all other claims and charges are ordered DISMISSED for lack of merit.
NLRC
NLRC rendered a Decision dated 31 March 2010, affirming said Labor Arbiter's appealed decision.
Court of Appeals
CA rendered decision, reversing the findings of the Labor Arbiter and the NLRC.
Supreme Court
Principles:
To determine the existence of said relation, case law has consistently applied the four-fold test, to wit: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the em-
ployer's power to control the employee on the means and methods by which the work is accomplished. 23 Of these
criteria, the so-called "control test" is generally regarded as the most crucial and determinative indicator of the pres-
ence or absence of an employer-employee relationship. Under this test, an employer-employee relationship is said to
exist where the person for whom the services are performed reserves the right to control not only the end result but
also the manner and means utilized to achieve the same.
Insofar as the nature of one's employment is concerned, Article 280 of the Labor Code of the Philippines also
provides as follows:
ART. 280. Regular and Casual Employment. The provisions of written agreement to the con-
trary 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 service 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 con-
tinuous or broken, shall be considered a regular employee with respect to the activity in which he is em-
ployed and his employment shall continue while such actually exists.
It has been ruled that the foregoing provision contemplates four kinds of employees, namely: (a) regular em-
ployees or those who have been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; (b) project employees or those 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; (c) seasonal employees or those who work or perform services which are seasonal in nature, and the
employment is for the duration of the season; and (d) casual employees or those who are not regular, project, or sea-
sonal employees. To the foregoing classification of employee, jurisprudence has added that of contractual or fixed
term employee which, if not for the fixed term, would fall under the category of regular employment in view of the
nature of the employee's engagement, which is to perform activity usually necessary or desirable in the employer's
business.
The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment
Forms and the terms and condition embodied therein, petitioners are regular employees of ABS-CBN. Time and
again, it has been ruled that the test to determine whether employment is regular or not is the reasonable connection
between the activity performed by the employee in relation to the business or trade of the employer.
As cameramen/editors and reporters, petitioners were undoubtedly performing functions necessary and essential
to ABS-CBN's business of broadcasting television and radio content. Aside from the fact that said program is a regu-
lar weekday fare of the ABS-CBN's Regional Network Group in Naga City, the record shows that, from their initial
engagement in the aforesaid capacities, petitioners were continuously re-hired by respondents over the years. To the
mind of the Court, respondents' repeated hiring of petitioners for its long-running news program positively indicates
that the latter were ABS-CBN's regular employees.
As cameramen/editors and reporters, it also appears that petitioners were subject to the control and supervision
of respondents which, first and foremost, provided them with the equipments essential for the discharge of their
functions. Prepared at the instance of respondents, petitioners' Talent Contracts tellingly provided that ABS-CBN
retained "all creative, administrative, financial and legal control" of the program to which they were assigned. Aside
from having the right to require petitioners "to attend and participate in all promotional or merchandising cam-
paigns, activities or events for the Program," ABS-CBN required the former to perform their functions "at such loca-
tions and Performance/Exhibition Schedules" it provided or, subject to prior notice, as it chose determine, modify or
change. Even if they were unable to comply with said schedule, petitioners were required to give advance notice,
subject to respondents' approval. However obliquely worded, the Court finds the foregoing terms and conditions
demonstrative of the control respondents exercised not only over the results of petitioners' work but also the means
employed to achieve the same.
Application:
In this case, as cameramen/editors and reporters, it appears that petitioners were subject to the control and su-
pervision of respondents which, first and foremost, provided them with the equipments essential for the discharge of
their functions. Prepared at the instance of respondents, petitioners' Talent Contracts tellingly provided that ABS-
CBN retained "all creative, administrative, financial and legal control" of the program to which they were assigned.
Aside from having the right to require petitioners "to attend and participate in all promotional or merchandising
campaigns, activities or events for the Program," ABS-CBN required the former to perform their functions "at such
locations and Performance/Exhibition Schedules" it provided or, subject to prior notice, as it chose determine, modi-
fy or change. Even if they were unable to comply with said schedule, petitioners were required to give advance no-
tice, subject to respondents' approval. However obliquely worded, the Court finds the foregoing terms and condi-
tions demonstrative of the control respondents exercised not only over the results of petitioners' work but also the
means employed to achieve the same.
Conclusion:
Rather than the project and/or independent contractors respondents claim them to be, it is evident from the fore-
going disquisition that petitioners are regular employees of ABS-CBN. Indeed, there is an employer-employee rela-
tion between the parties.
SOCIAL SECURITY SYSTEM, petitioner, vs. DEBBIE UBAA,respondent
(NOTE: Pursuant to the provision of Article 217 of the Labor Code of the Philippines as amended, in governing
arbitration proceedings in the Labor Arbiter and Comission, the NLRC Rules and Procedure 2011 are hereby adopt-
ed and promulgated)
FACTS:
On December 26, 2002, respondent Debbie Ubaa filed a civil case for damages against the DBP Service Cor-
poration, petitioner Social Security System (SSS), and the SSS Retirees Association before the RTC of Daet, Ca-
marines Norte.
In her Complaint, respondent alleged that in July 1995, she applied for employment with the petitioner. After
passing the examinations and accomplishing all the requirements for employment, she was instead referred to DBP
Service Corporation for "transitory employment." She took the pre-employment examination given by DBP Service
Corporation and passed the same. A year later, she was told to report for training to SSS, Naga City branch, for im-
mediate deployment to SSS Daet branch. One month after, she was made to sign a six-month Service Contract
Agreement by DBP Service Corporation, appointing her as clerk for assignment with SSS Daet branch, with a daily
wage of only P171.00. She was also assigned as "Frontliner" of the SSS Members Assistance Section. On December
16, 2001, she was transferred to the SSS Retirees Association as Processor, she was paid only P229.00 daily or
P5,038.00 monthly, while a regular SSS Processor receives a monthly salary of P18,622.00 or P846.45 daily wage.
Her May 28,1996 Service Contract Agreement with DBP Service Corporation was never renewed, but she was re-
quired to work for SSS continuously under different assignments with a maximum daily salary of only P229.00.
Because of the oppressive and prejudicial treatment by SSS, she was forced to resign on August 26, 2002 as she
could no longer stand being exploited, the agony of dissatisfaction, anxiety, demoralization, and injustice.
Respondent prayed for an award of P572,682.67 actual damages representing the difference between the legal
and proper salary she should have received and the actual salary she received during her six-year stint with petition-
er.
Petitioner and its co-defendants SSS Retirees Association and DBP Service Corporation filed their respective
motions to dismiss.
Respondent opposed the motions to dismiss.
Petitioner's argument:
That the subject matter of the case and respondent's claims arose out of employer-employee relations,
which are beyond the RTC's jurisdiction and properly cognizable by the National Labor Relations
Commission (NLRC).
Respondent's argument:
That pursuant to civil service rules and regulations, service contracts such as her Service Contract
Agreement with DBP Service Corporation should cover only: a) lump sum work or services such as
janitorial, security or consultancy services, and b) piece work or intermittent jobs of short duration not
exceeding six months on a daily basis.
RTC Ruling:
The RTC issued an Order (October 1,2003) dismissing respondent's complaint for lack of jurisdiction, stating
that her claim for damages "has a reasonable causal connection with her employer-employee relations with the de-
fendants" and "is grounded on the alleged fraudulent and malevolent manner by which the defendants conspired
with each other in exploiting her, which is a clear case of unfair labor practice," falling under the jurisdiction of the
Labor Arbiter of the NLRC.
Respondent filed a motion for reconsideration.
RTC granted the motion for reconsideration reasoning that SSS having been created under an original charter,
RA No. 1161 as amended by R.A. 8282, otherwise known as the Social Security Act of 1997, it is governed by the
provisions of the Civil Service Commission. However, since the SSS denied the existence of an employer-employee
relationship, and the case is one for Damages, it is not the Civil Service Commission that has jurisdiction to try the
case, but the regular courts.
Petitioner filed a motion for reconsideration but the same was denied by RTC. He filed a petition for certiorari
on the CA insisting that the trial court did not have jurisdiction over respondent's claims for "unrealized salary in-
come" and other damages, which constitute a labor dispute cognizable only by the labor tribunals.
CA Ruling:
CA denied the petition, it held that in determining which body has jurisdiction over a case, the better policy is to
consider not only the status or relationship of the parties but also the nature of the action that is the subject of their
controversy. In this case, Ubanawas claiming damages based on the alleged exploitation by the defendants depriving
her of her rightful income. In asserting that she is entitled to the damages claimed, she invoked not the provisions of
the Labor Code or any other labor laws but the provisions on human relations under the New Civil Code. Evidently,
the determination of the respective rights of the parties herein, and the ascertainment whether there were abuses of
such rights, do not call for the application of the labor laws but of the New Civil Code which the RTC has jurisdic-
tion to hear and decide this case.
Petitioner filed a petition for review in certiorari to SC.
ISSUES:
Whether or not the CA's dispositions are contrary to law and jurisprudence.
RULING:
The Petition is denied. And the assailed Decision and Resolution of the Court of Appeals is hereby af-
firmed.
RULE:
It is well settled in law and jurisprudence that where no employer-employee relationship exists between the par-
ties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any col-
lective bargaining agreement, it is the Regional Trial Court that has jurisdiction. The action is within the realm of
civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the
application of labor laws, reference to the labor code was only for the determination of the solidary liability of the
petitioner to the respondent where no employeremployee relation exists.
Article 217 of the Labor Code as amended vests upon the labor arbiters exclusive original jurisdiction only over
the following:
1. Unfair labor practices;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving legality of strikes
and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employeremployee relations, including those of persons in domestic or household ser-
vice, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
Petitioner being responsible to respondent only for the proper payment of wages, thus, she was justified in filing
a case against petitioner, based on Civil Code, to recover the proper salary due her as SSS Processor.
APPLICATION:
In the case at bar, respondent never became an SSS employee, as she remained an employee of DBP Service
Corporation and SSS Retirees Association, the two being independent contractors with legitimate service contracts
with SSS. In legitimate job contracting, no employer-employee relationship exists. And the fact that respondent did
not seek refuge to the Labor Code but to the Civil Code in claiming for damages againts abused of her rights for the
payment of wages, the proper court that has jurisdiction in this case is the regular courts for it does not involved la-
bor disputes.
CONCLUSION:
Thus, petitioner SSS will pay for the payment of the wages that respondent is asking for in this case. And the
proper court that has jurisdiction over the case that does not involve labor disputes is the regular courts.
CENTURY PROPERTIES, INC., petitioner, v. EDWIN J. BABIANO AND EMMA B. CONCEPCION, re-
spondents
G.R. No. 220978. July 5, 2016
FACTS:
Edwin Babiano was hired by Century Properties, Inc. (CPI) as its Director of Sales but was eventually appoint-
ed as the Vice President of Sales. In view of this, he was granted a commission for completed sales along side his
monthly salary and allowance. In his employment contract which contained a "Confidentiality of Documents and
Non-Compete Clause", he was barred from disclosing confidential information, and from working in any business
enterprise that is in direct competition with CPI "while [he is] employed and for a period of one year from date of
resignation or termination from [CPI]." Should Babiano breach any of the terms thereof, his "forms of compensa-
tion, including commissions and incentives will be forfeited."
Around the same time, Emma Concepcion was hired as a Sales Agent but was eventually promoted as Project
Director. Her employment agreement was titled "Contract of Agency for Project Director" that provided for her
monthly subsidy, commission, other cash incentives, and that she would report directly to Babiano. It is important to
not that in that contract, it was stipulated that no employer-employee relationship exists between Concepcion and
CPI.
It was eventually found out that Babiano was providing a competitor of CPI information regarding its market-
ing strategies. This led to his resignation where he admitted that he had been accepted as Vice President of First
Global BYO Development Corporation (First Global), a competitor of CPI. On her part, Concepcion also resigned
as the Project Director.
The respondents then filed a complaint for the non-payment of commissions and damages against CPI. CPI
claimed that it validly withheld Babianos commissions since he violated the Confidentiality of Documents and
Non-compete Clause that they are deemed forfeited.
On Concepcion's money claims, CPI asserted that the NLRC had no jurisdiction to hear the same because there
was no employer-employee relations between them, and thus, she should have litigated the same in an ordinary civil
action.
ISSUE:
Whether or not CPI is liable for the unpaid commissions of the respondents
RULING:
The Confidentiality of Documents and Non-Compete Clause is clear and unambiguous in providing the prohi-
bition on Babiano to work for a competitor of CPI while he is employed and also for a period of one year from the
date of his resignation.
It was also clear in stating that a breach of the contract would entail the forfeiture of his commissions and in-
centives.
In the present case, the clause was reasonable as it would prejudice CPI to allow Babiano to freely move to
direct competitors during and soon after his employment with CPI would make the latter's trade secrets vulnerable to
exposure, especially in a highly competitive marketing environment.
In his resignation letter, he even revealed that he sought employment with a competitor and was accepted. This
is a glaring violation of the "Confidentiality of Documents and Non-Compete Clause" in his employment contract
with CPI, thus, justifying the forfeiture of his unpaid commissions.
The presence of the following elements evince the existence of an employer-employee relationship: (a) the
power to hire, i.e., the selection and engagement of the employee; (b) the payment of wages; (c) the power of dis-
missal; and (d) the employer's power to control the employee's conduct, or the so called "control test."
Concepcion was an employee of CPI considering that a) they continuously hired her until her resignation, b)
she was given a monthly subsidy and cash incentives in the concept of wages in return for work performed, c) CPI
had the power to discipline and even dismiss her as was stipulated in her engagement contract, and d) CPI had pos-
sessed control over her in the performance of her duties, she did not exercise independent discretion and was even
under the supervision of Babiano.
In view of this, there exists an employer-employee relationship between Concepcion and CPI.
LU vs. ENOPIA
G.R. No. 197899, March 6, 2017
Facts:
Petitioners (now herein respondents) were hired from January 20, 1994 to March 20, 1996 as crew members of
the fishing mother boat owned by respondent Joaquin "Jake" Lu.
Petitioners and Lu had an income-sharing arrangement wherein 55% goes to Lu, 45% to the crew members,
with an additional 4% as "backing incentive." They also equally share the expenses for the maintenance and repair
of the mother boat, and for the purchase of nets, ropes and payaos.
Sometime in August 1997, Lu proposed the signing of a Joint Venture Fishing Agreement between them, but
petitioners refused to sign the same as they opposed the one-year term provided in the agreement. According to peti-
tioners, during their dialogue on August 18, 1997, Lu terminated their services right there and then because of their
refusal to sign the agreement.
On August 25, 1997, petitioners filed their complaint for illegal dismissal. On the other hand, Lu denied having
dismissed petitioners, claiming that their relationship was one of joint venture where he provided the vessel and oth-
er fishing paraphernalia, while petitioners, as industrial partners, provided labor by fishing in the high seas.
Lu alleged that there was no employer-employee relationship as its elements were not present, it was the piado
who hired petitioners; they were not paid wages but shares in the catch, which they themselves determine; they were
not subject to his discipline; and respondent had no control over the day-to-day fishing operations, although they
stayed in contact through respondent's radio operator or checker.
LA rendered a Decision dismissing the case for lack of merit
Respondents appealed to the National Labor Relations Commission (NLRC), which affirmed the LA Decision
in its Resolution.
CA rendered its assailed Decision reversing the NLRC.
The CA found that petitioner exercised control over respondents based on the following:
1. respondents were the fishermen crew members of petitioner's fishing vessel, thus, their services to the latter
were so indispensable and necessary that without them, petitioner's deep-sea fishing industry would not have
come to existence much less fruition;
2. he had control over the entire fishing operations undertaken by the respondents through the master fisherman
(piado) and the assistant master fisherman (assistant piado) employed by him;
3. respondents were paid based on a percentage share of the fish catch did not in any way affect their regular
employment status; and
4. petitioner had already invested millions of pesos in its deep-sea fishing industry, hence, it is highly improba-
ble that he had no control over respondents' fishing operations
Issue: Whether or not an employer-employee relationship existed between petitioner and respondents
Ruling:
In determining the existence of an employer-employee relationship, the following elements are considered:
1. the selection and engagement of the workers;
2. the power to control the worker's conduct;
3. the payment of wages by whatever means; and
4. the power of dismissal.
It is settled that no particular form of evidence is required to prove the existence of an employer-employee rela-
tionship. Any competent and relevant evidence to prove the relationship may be admitted.
Petitioner contends that it was the piado who hired respondents, however, it was shown by the latter's evidence
that the employer stated in their Social Security System (SSS) online inquiry system printouts was MGTR, which is
owned by petitioner. Petitioner failed to rebut such evidence. The coverage of the Social Security Law is predicated
on the existence of an employer-employee relationship.
Moreover, the records show that the 4% backing incentive fee which was divided among the fishermen engaged
in the fishing operations approved by petitioner was paid to respondents after deducting the latter's respective vale or
cash advance. If indeed a joint venture was agreed upon between petitioner and respondents, why would these fish-
ermen obtain vale or cash advance from petitioner and not from the piado who allegedly hired and had control over
them.
It was established that petitioner exercised control over respondents. It should be remembered that the control
test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential
that the employer actually supervises the performance of duties by the employee. It is enough that the former has a
right to wield the power.
Petitioner admitted in his pleadings that he had contact with respondents at sea via the former's radio operator
and their checker. The radio was only for the purpose of receiving requisitions for the needs of the fishermen in the
high seas and to receive reports of fish catch. Such communication would establish that he was constantly monitor-
ing or checking the progress of respondents fishing operations throughout the duration thereof, which showed their
control and supervision over respondents' activities.
CA found out that the private respondent (petitioner) controls the entire fishing operations. For each mother
fishing boat, private respondent assigned a master fisherman (piado) and assistant master fisherman (assistant
piado), who every now and then supervise the fishing operations. Private respondent also assigned a checker and
assistant checker based on the office to monitor and contact every now and then the crew at sea through radio. The
checker and assistant checker advised then the private respondent of the condition. Based on the report of the check-
er, the private respondent, through radio, will then instruct the "piado" how to conduct the fishing operations.
The payment of respondents' wages based on the percentage share of the fish catch would not be sufficient to
negate the employer-employee relationship existing between them.
In Ruga v. NLRC: 22 x x x [I]t must be noted that petitioners received compensation on a percentage commis-
sion based on the gross sale of the fish-catch, i.e., 13% of the proceeds of the sale if the total proceeds exceeded the
cost of the crude oil consumedduring the fishing trip, otherwise, only 10% of the proceeds of the sale. Such compen-
sation falls within the scope and meaning of the term "wage" as defined under Article 97(f) of the Labor Code
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. Respondents' jobs as
fishermen-crew members of F/B MG-28 were directly related and necessary to petitioner's deep-sea fishing business
and they had been performing their job for more than one year.
As respondents were petitioner's regular employees, they are entitled to security of tenure under Section 3, 27
Article XIII of the 1987 Constitution. It is also provided under Article 279 of the Labor Code, that the right to
security of tenure guarantees the right of employees to continue in their employment absent a just or authorized
cause for termination.
Considering that respondents were petitioner's regular employees, the latter's act of asking them to sign the joint
fishing venture agreement which provides that the venture shall be for a period of one year from the date of the
agreement, subject to renewal upon mutual agreement of the parties, and may be pre-terminated by any of the
parties before the expiration of the one-year period, is violative of the former's security of tenure.
And respondents' termination based on their refusal to sign the same, not being shown to be one of those just
causes for termination under Article 282, is, therefore, illegal.
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights
and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstate-
ment. The petition for review on certiorari is DENIED.

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GENERAL PRINCIPLES!

SONZA, petitioner, vs . ABS-CBN, respondent.

a) Petitioners Arguments (SONZA Lost)

b) Respondents Arguments (ABS-CBN - Win)

LAZARO, petitioner vs. SOCIAL SECURITY COMMISION defendant.

PHIL. GLOBAL COMMUNICATION, petitioner VS. DE VERA, defendant

ABS-CBN Broadcasting Corp.,petitioner vs. Nazareno, et al.,respondent.

b) Respondents Arguments (Nazareno Win)

a) Petitioners Arguments (Angelina Francisco Win)

b) Private Respondents Arguments (Kasei Corporation - Lost)

NOGALEZ ET AL VS CAPITOL MEDICAL CENTER

1) Whether CMC is vicariously liable for the negligence of Dr. Estrada;

Dr. Estrada is not an employee of CMC, but an independent-contractor.

Coca-Cola Bottlers Phils., Inc./Eric Montinola, Managerpetitionersvs.Dr. Dean N. Climacoet.a, respondent.

a) Petitioners Arguments (Coca-Cola Bottlers Phils., Inc. Win)

b) Respondents Arguments (Dr. Dean N. Climaco - Lost)

CALAMBA MEDICAL CENTER, INC. , petitioner vs. NLRC, ET AL, defendant.

a) Petitioners Arguments (Calamba Medical Center, Inc. Lost)

Petitioner, et.als contention:

GREGORIO V. TONGKO, petitioner,

In the Agreement, it is provided that:

SEMBLANTE et al. vs. CA, et al.

The CA upheld the NLRC decision.

Ruling: Petition denied.

Ruling of Lower Courts:

CESAR C. LIRIO, petitioner vs. WILMER D. GENOVIA, respondent

a) Petitioners Arguments (Cesar C. Lirio Lost)

b) Respondents Arguments (Wilmer D. Genovia Won)

Jao vs. BCC Products Sales Inc.

LEGEND HOTEL, petitioner vs. REALUYO defendant.

The New Philippine Skylanders, Inc., petitioner vs. Dakila, respondent

Tesoro, et al., petitioner vs. Manila Retreaders, Inc., respondent.

a) Petitioners Arguments (Tesoro, et al. Lost)

b) Respondents Arguments (Metro Manila Retreaders, Inc. Win)

a) Petitioners Arguments (Royale Homes Win)

b) Private Respondents Arguments (Fidel Alcantara - Lost)

FUJI TELEVISION NETWORK, INC., petitioner, vs. ARLENE S. ESPIRITU, respondent.

The petition for review filed by Fuji is dismissed.

Article 280 of the Labor Code provides that:

An employment shall be deemed to be casual if it is not covered by the preceding para-

Cabaobas et al., petitionersvs.Pepsi Cola et.al, respondent.

b) Respondents Arguments (Pepsi-Cola Products Philippines, Inc. - Win)

The Court rules in the affirmative: Principle of Stare Decisis

a) Petitioners Argument ( Begino, Del Valle, Avilla-Llorin and Sumayao Win )

b) Respondents Aruguments ( ABS-CBN Corporation and Amalia Villafuerte Lost )

SOCIAL SECURITY SYSTEM, petitioner, vs. DEBBIE UBAA,respondent

LA rendered a Decision dismissing the case for lack of merit

CA rendered its assailed Decision reversing the NLRC.

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