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Atok Big Wedge Company vs. Gison, G.R. No.

169510, be only temporary, it clearly disregarded the same by


August 8, 2011 repeatedly giving petitioner several tasks to perform.
Moreover, although the respondent may have waived
Facts: The respondent in this case, Jesus P. Gison, was his right to attain a regular status when he agreed to
engaged as part-time consultant of the petitioner, Atok perform these tasks on a temporary employment status,
Big Wedge Company thorugh its then Asst. VP and still it was the law that recognized and considered him a
Acting Resident Manager, Rutillo A. Torres. As a regular employee after his first year of rendering service
consultant on retainer basis, the former assisted the to petitioner. As such, the waiver is ineffective.
petitioner’s retained legal counsel with matters
pertaining to the prosecution of cases against illegal Petitioner herein posits that CA erred in applying Article
surface occupants within the area covered by the 280 of the Labor Code in determining whether there
company’s mineral claims. He also tasked to perform exists an employer-employee relationship. Petitioner
liason work with government agencies which he said his contends that where the existence of an employer-
expertise. Respondent is not required to report to its employee relationship is in dispute, Article 280 of the
office on a regular basis, except when occassionally Labor Code is inapplicable. The said article only set the
requested by the management to discuss the matters distinction between a casual employee from a regular
which needs of his expertise as a consultant. He is paid a employee for purposes of determining the rights of an
retainer fee of 3,000Php a month and delivered to him employee to be entitled to certain benefits.
either in his residence or in a local restaurant. They have
also executed a retainer agreement however was Issue: Whether or not CA erred in applying Article 280?
misplaced and can no longer be found. This kind of
arrangement continued on for the next 11 years. Since Ruling: Well-entrenched is the doctrine that the
respondent was getting old, he requested petitioner to existence of an employer-employee relationship is
cause his registration with the Social Security System but ultimately a question of fact and that the findings
petitioner did not accede to his request considering the thereon by the Labor Arbiter and the NLRC shall be
former only a retainer/consultant. accorded not only respect but even finality when
supported by substantial evidence. Being a question of
Respondent herein, filed a complaint with SSS against fact, the determination whether such a relationship exists
petitioner’s refusal to cause his registration with the SSS. between petitioner and respondent was well within the
The Resident Manager of the petitioner issued then a province of the Labor Arbiter and the NLRC. Being
Memorandum advising respondent that within 30 days supported by substantial evidence, such determination
from receipt thereof, petitioner’s services as a should have been accorded great weight by the CA in
retainer/consultant will be terminated since his services resolving the issue. To ascertain the existence of an
are no longer necessary. As a result, respondent filed a employer-employee relationship jurisprudence has
complaint for illegal dismissal, unfair labor practice, invariably adhered to the four-fold test, to wit: (1) the
underpayment of wages, non-payment of 13th Month selection and engagement of the employee; (2) the
pay, vacation pay and sick leave with the NLRC, payment of wages; (3) the power of dismissal; and (4)
Regional Arbitration Branch and Cordillera Administrative the power to control the employee's conduct, or the so-
Region against the petitioner. called "control test." The so-called "control test" is
commonly regarded as the most crucial and
The Labor Arbiter rendered a decision in favor of the determinative indicator of the presence or absence of
petitioner ruling that there is no employer-employee an employer-employee relationship
relationship and dismissed the complaint for lack of
merit. An appeal was made before the NLRC but same Applying the aforementioned test, an employer-
was dismissed and affirmed the decision of the Labor employee relationship is apparently absent in the case
Arbiter. A petition for review was filed under Rule 65 at bar. Among other things, respondent was not required
before the Court of Appeals. The Court of Appeals to report everyday during regular office hours of
annuled and has set aside the decision of NLRC. The CA petitioner. Respondent's monthly retainer fees were paid
opined that, both the Labor Arbiter and NLRC to him either at his residence or a local restaurant. More
overlooked Article 280 of the Labor Code, which importantly, petitioner did not prescribe the manner in
distinguishes between the two kinds of employees, i.e., which respondent would accomplish any of the tasks in
regular and casual employees. The respondent is which his expertise as a liaison officer was needed;
deemed a regular employee of the petitioner after the respondent was left alone and given the freedom to
lapse of one year from his employment. Considering also accomplish the tasks using his own means and method.
that the respondent had been performing services for Respondent was assigned tasks to perform, but
the petitioner for the last 11 years entitling him to the petitioner did not control the manner and methods by
rights and privileges of a regular employee. The CA which respondent performed these tasks. Verily, the
added that although there was an agreement between absence of the element of control on the part of the
the parties that the employment of the respondent will petitioner engenders a conclusion that he is not an
employee of the petitioner. Moreover, the absence of AUTO BUS TRANSPORT SYSTEMS, INC. vs ANTONIO
the parties' retainership agreement notwithstanding, BAUTISTA G.R. No. 156367 May 16 2005
respondent clearly admitted that petitioner hired him in Service Incentive Leave Pay
a limited capacity only and that there will be no
employer-employee relationship between them. FACTS: Antonio Bautista was employed by Auto Bus
Transport Systems, Inc. in May 1995. He was assigned to
Respondent was well aware of the agreement that he the Isabela-Manila route and he was paid by
was hired merely as a liaison or consultant of the commission (7% of gross income per travel for twice a
petitioner and he agreed to perform tasks for the month).
petitioner on a temporary employment status only.
However, respondent anchors his claim that he became In January 2000, while he was driving his bus he bumped
a regular employee of the petitioner based on his another bus owned by Auto Bus. He claimed that he
contention that the "temporary" aspect of his job and its bumped the he accidentally bumped the bus as he was
"limited" nature could not have lasted for eleven years so tired and that he has not slept for more than 24 hours
unless some time during that period, he became a because Auto Bus required him to return to Isabela
regular employee of the petitioner by continually immediately after arriving at Manila. Damages were
performing services for the company. computed and 30% or P75,551.50 of it was being
charged to Bautista. Bautista refused payment.
Respondent is not an employee, much more a regular
employee of petitioner. The appellate court's premise Auto Bus terminated Bautista after due hearing as part of
that regular employees are those who perform activities Auto Bus’ management prerogative. Bautista sued Auto
which are desirable and necessary for the business of Bus for Illegal Dismissal. The Labor Arbiter Monroe
the employer is not determinative in this case. In fact, Tabingan dismissed Bautista’s petition but ruled that
any agreement may provide that one party shall render Bautista is entitled to P78,1117.87 13th month pay
services for and in behalf of another, no matter how payments and P13,788.05 for his unpaid service incentive
necessary for the latter's business, even without being leave pay.
hired as an employee. Hence,respondent's length of
service and petitioner's repeated act of assigning The case was appealed before the National Labor
respondent some tasks to be performed did not result to Relations Commission. NLRC modified the LA’s ruling. It
respondent's entitlement to the rights and privileges of a deleted the award for 13th Month pay. The court of
regular employee. Appeals affirmed the NLRC.
Furthermore, despite the fact that petitioner made use
of the services of respondent for eleven years, he still Auto Bus averred that Bautista is a commissioned
cannot be considered as a regular employee of employee and if that is not reason enough that Bautista
petitioner. Article 280 of the Labor Code, in which the is also a field personnel hence he is not entitled to a
lower court used to buttress its findings that respondent service incentive leave. They invoke:
became a regular employee of the petitioner, is not
applicable in the case at bar. Indeed, the Court has Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE
ruled that said provision is not the yardstick for
determining the existence of an employment (a) Every employee who has rendered at least one year
relationship because it merely distinguishes between two of service shall be entitled to a yearly service incentive
kinds of employees, i.e., regular employees and casual leave of five days with pay.
employees, for purposes of determining the right of an
employee to certain benefits, to join or form a union, or Book III, Rule V: SERVICE INCENTIVE LEAVE
to security of tenure; it does not apply where the
existence of an employment relationship is in dispute.It is, SECTION 1. Coverage. ' This rule shall apply to all
therefore, erroneous on the part of the Court of Appeals employees except:
to rely on Article 280 in determining whether an
employer-employee relationship exists between (d) Field personnel and other employees whose
respondent and the petitioner. performance is unsupervised by the employer including
Considering that there is no employer-employee those who are engaged on task or contract basis, purely
relationship between the parties, the termination of commission basis, or those who are paid in a fixed
respondent's services by the petitioner after due notice amount for performing work irrespective of the time
did not constitute illegal dismissal warranting his consumed in the performance thereof; . . .
reinstatement and the payment of full backwages,
allowances and other benefits.
ISSUE: Whether or not Bautista is entitled to Service
Incentive Leave.
If he is, Whether or not the three (3)-year prescriptive after only one month from the time of his dismissal,
period provided under Article 291 of the Labor Code, as necessarily, his money claim was filed within the
amended, is applicable to respondent's claim of service prescriptive period provided for by Article 291 of the
incentive leave pay. Labor Code.

Definition of Service Incentive Leave


HELD: Yes, Bautista is entitled to Service Incentive Leave.
The Supreme Court emphasized that it does not mean Service incentive leave is a right which accrues to every
that just because an employee is paid on commission employee who has served within 12 months, whether
basis he is already barred to receive service incentive continuous or broken reckoned from the date the
leave pay. employee started working, including authorized
absences and paid regular holidays unless the working
The question actually boils down to whether or not days in the establishment as a matter of practice or
Bautista is a field employee. policy, or that provided in the employment contracts, is
less than 12 months, in which case said period shall be
According to Article 82 of the Labor Code, 'field considered as one year. It is also commutable to its
personnel shall refer to non-agricultural employees who money equivalent if not used or exhausted at the end of
regularly perform their duties away from the principal the year. In other words, an employee who has served
place of business or branch office of the employer and for one year is entitled to it. He may use it as leave days
whose actual hours of work in the field cannot be or he may collect its monetary value.
determined with reasonable certainty.

As a general rule, field personnel are those whose NELSON V. BEGINO vs. ABS-CBN CORPORATION
performance of their job/service is not supervised by the G.R. No. 199166, 20 April 2015.
employer or his representative, the workplace being
away from the principal office and whose hours and FACTS: Respondent ABS-CBN, through Respondent
days of work cannot be determined with reasonable Villafuerte, engaged the services of Petitioners as
certainty; hence, they are paid specific amount for cameramen, editors or reporters for TV Broadcasting.
rendering specific service or performing specific work. If Petitioners signed regularly renewed Talent Contracts (3
required to be at specific places at specific times, months - 1 year) and Project Assignment Forms which
employees including drivers cannot be said to be field detailed the duration, budget and daily technical
personnel despite the fact that they are performing work requirements of a particular project. Petitioners were
away from the principal office of the employee. tasked with coverage of news items for subsequent daily
airings in Respondents’ TV Patrol Bicol Program.
Certainly, Bautista is not a field employee. He has a
specific route to traverse as a bus driver and that is a The Talent Contract has an exclusivity clause and
specific place that he needs to be at work. There are provides that nothing therein shall be deemed or
inspectors hired by Auto Bus to constantly check him. construed to establish an employer-employee
There are inspectors in bus stops who inspects the relationship between the parties.
passengers, the punched tickets, and the driver.
Therefore he is definitely supervised though he is away Petitioners filed against Respondents a complaint for
from the Auto Bus main office. regularization before the NLRC's Arbitration branch.

On the other hand, the 3 year prescriptive period ran but In support of their complaint, Petitioners claimed that
Bautista was able to file his suit in time before the they worked under the direct control of Respondent
prescriptive period expired. It was only upon his filing of a Villafuerte - they were mandated to wear company IDs,
complaint for illegal dismissal, one month from the time they were provided the necessary equipment, they were
of his dismissal, that Bautista demanded from his former informed about the news to be covered the following
employer commutation of his accumulated leave day, and they were bound by the company’s policy on
credits. His cause of action to claim the payment of his attendance and punctuality.
accumulated service incentive leave thus accrued from
the time when his employer dismissed him and failed to Respondents countered that, pursuant to their Talent
pay his accumulated leave credits. Contracts and Project Assignment Forms, Petitioners
were hired as talents to act as reporters, editors and/or
Therefore, the prescriptive period with respect to his cameramen. Respondents further claimed they never
claim for service incentive leave pay only commenced imposed control as to how Petitioners discharged their
from the time the employer failed to compensate his duties. At most, they were briefed regarding the general
accumulated service incentive leave pay at the time of requirements of the project to be executed.
his dismissal. Since Bautista had filed his money claim
While the case was pending, Petitioners contracts were Complainant Bernarte, for instance, was not made to
terminated, prompting the latter to file a second sign a contract during the first conference of the All-
complaint for illegal dismissal. Filipino Cup which was from February 23, 2003 to June
2003. It was only during the second conference when he
The Arbitration Branch ruled that Petitioners were regular was made to sign a one and a half month contract for
employees, and ordered Respondents to reinstate the the period July 1 to August 5, 2003.
Petitioners.
On January 15, 2004, Bernarte received a letter from the
The NLRC affirmed the ruling, but the CA overturned the Office of the Commissioner advising him that his
decision. contract would not be renewed citing his unsatisfactory
performance on and off the court. It was a total shock
ISSUE: W/N Petitioners are regular employees of for Bernarte who was awarded Referee of the year in
Respondents. 2003. He felt that the dismissal was caused by his refusal
to fix a game upon order of Ernie De Leon.
RULING: Yes.
On the other hand, complainant Guevarra alleges that
Of the criteria to determine whether there is an he was invited to join the PBA pool of referees in
employer-employee relationship, the so-called "control February 2001. On March 1, 2001, he signed a contract
test" is generally regarded as the most crucial and as trainee. Beginning 2002, he signed a yearly contract
determinative indicator of the said relationship. as Regular Class C referee. On May 6, 2003, respondent
Martinez issued a memorandum to Guevarra expressing
Under this test, an employer-employee relationship is said dissatisfaction over his questioning on the assignment of
to exist where the person for whom the services are referees officiating out-of-town games. Beginning
performed reserves the right to control not only the end February 2004, he was no longer made to sign a
result but also the manner and means utilized to achieve contract.
the same.
Respondents aver, on the other hand, that complainants
Notwithstanding the nomenclature of their Talent entered into two contracts of retainer with the PBA in the
Contracts and/or Project Assignment Forms and the year 2003. The first contract was for the period January 1,
terms and condition embodied therein, petitioners are 2003 to July 15, 2003; and the second was for September
regular employees of ABS-CBN. 1 to December 2003. After the lapse of the latter period,
PBA decided not to renew their contracts.
As cameramen, editors and reporters, it appears that
Petitioners were subject to the control and supervision of Complainants were not illegally dismissed because they
Respondents which provided them with the equipment were not employees of the PBA. Their respective
essential for the discharge of their functions. The contracts of retainer were simply not renewed. PBA had
exclusivity clause and prohibitions in their Talent Contract the prerogative of whether or not to renew their
were likewise indicative of Respondents' control over contracts, which they knew were fixed.
them, however obliquely worded.
Both the Labor Arbiter and NLRC decided that the
Also,the presumption is that when the work done is an petitioners were employees whose dismissals by
integral part of the regular business of the employer and respondents were illegal.
when the worker does not furnish an independent
business or professional service, such work is a regular However, the Court of Appeals overturned the decisions
employment of such employee and not an independent of the NLRC and Labor Arbiter on the ground that the
contractor. petitioner is an independent contractor since
respondents did not exercise any form of control over
the means and methods by which petitioner performed
his work as a basketball referee.
Bernarte vs. Phil. Basketball Assoc., G.R. No. 192084,
September 14, 2011 Issue: Whether petitioner is an employee of respondents,
Facts: Complainants (Jose Mel Bernarte and Renato which in turn determines whether petitioner was illegally
Guevarra) aver that they were invited to join the PBA as dismissed.
referees. During the leadership of Commissioner Emilio
Bernardino, they were made to sign contracts on a year- Ruling: The Supreme Court affirmed the assailed decision
to-year basis. During the term of Commissioner Eala, of the Court of Appeals.
however, changes were made on the terms of their To determine the existence of an employer-employee
employment. relationship, 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 specifically for such position and cannot possibly be
dismissal; and (d) the employer's power to control the controlled by the hiring party.
employee on the means and methods by which the
work is accomplished. The so-called "control test" is the In addition, the fact that PBA repeatedly hired petitioner
most important indicator of the presence or absence of does not by itself prove that petitioner is an employee of
an employer-employee relationship. the former. For a hired party to be considered an
employee, the hiring party must have control over the
In this case, PBA admits repeatedly engaging petitioner's means and methods by which the hired party is to
services, as shown in the retainer contracts. PBA pays perform his work, which is absent in this case. The
petitioner a retainer fee, exclusive of per diem or continuous rehiring by PBA of petitioner simply signifies
allowances, as stipulated in the retainer contract. PBA the renewal of the contract between PBA and
can terminate the retainer contract for petitioner's petitioner, and highlights the satisfactory services
violation of its terms and conditions. rendered by petitioner warranting such contract
renewal. Conversely, if PBA decides to discontinue
However, respondents argue that the all-important petitioner's services at the end of the term fixed in the
element of control is lacking in this case, making contract, whether for unsatisfactory services, or violation
petitioner an independent contractor and not an of the terms and conditions of the contract, or for
employee of respondents. whatever other reason, the same merely results in the
non-renewal of the contract, as in the present case. The
We agree with respondents that once in the playing non-renewal of the contract between the parties does
court, the referees exercise their own independent not constitute illegal dismissal of petitioner by
judgment, based on the rules of the game, as to when respondents.
and how a call or decision is to be made. The referees
decide whether an infraction was committed, and the
PBA cannot overrule them once the decision is made on Chavez v. NLRC
the playing court. The referees are the only, absolute, 448 SCRA 478
and final authority on the playing court. Respondents or
any of the PBA officers cannot and do not determine
DOCTRINE: The elements to determine the existence of
which calls to make or not to make and cannot control
an employment relationship are: (1) the selection and
the referee when he blows the whistle because such
authority exclusively belongs to the referees. The very engagement of the employee; (2) the payment of
nature of petitioner's job of officiating a professional wages; (3) the power of dismissal; and (4) the employer’s
basketball game undoubtedly calls for freedom of power to control the employee’s conduct.
control by respondents.
FACTS:
Moreover, the following circumstances indicate that The respondent Supreme Packaging is in the business of
petitioner is an independent contractor: (1) the referees manufacturing cartons and other packaging materials
are required to report for work only when PBA games are for export and distribution. The petitioner was tasked to
scheduled, which is three times a week spread over an deliver the respondent company’s products from its
average of only 105 playing days a year, and they factory in Mariveles Bataan, to its various customers,
mostly in Metro Manila. The respondent furnished the
officiate games at an average of two hours per game;
and (2) the only deductions from the fees received by petitioner with a truck. Most of the trips of the petitioner
the referees are withholding taxes. were made in nighttime, commencing at 6:00pm from
Mariveles and returning thereto in the afternoon two or
In other words, unlike regular employees who ordinarily three days after.
report for work eight hours per day for five days a week,
In 1992, the petitioner expressed to respondent Alvin Lee,
petitioner is required to report for work only when PBA
games are scheduled or three times a week at two hours respondent company’s plant manager, his desire to
per game. In addition, there are no deductions for avail himself of the benefits that the regular employees
contributions to the Social Security System, Philhealth or were receiving such as overtime pay, nightshift
Pag-Ibig, which are the usual deductions from differential pay, and 13th month pay, among others. Lee
employees' salaries. These undisputed circumstances promised to extend these benefits but later failed to do
so.
buttress the fact that petitioner is an independent
contractor, and not an employee of respondents.
Petitioner filed a complaint for regularization with NLRC
Furthermore, the applicable foreign case law declares and before the case could be heard, the respondent
that a referee is an independent contractor, whose company terminated the services of the petitioner. The
petitioner then filed an amended complaint against the
special skills and independent judgment is required
respondents for illegal dismissal, unfair labor practice
and non-payment of overtime pay, nightshift differential method of computing compensation and not a basis for
pay, 13th month pay, among others. determining the existence or absence of employer-
employee relationship. Interestingly, the respondents did
The respondents denied the existence of an employer- not present the payroll their claim that the petitioner was
employee relationship between them. They claimed that not their employee, this raise the speculation that this
the petitioner was an independent contractor as omission proves that its presentation would be adverse
evidenced by the contract of service which he and the to their case.
company entered into. Which states: “The Principal (3) the power of dismissal; and
(Supreme Packaging) agrees to hire the Contractor -The respondent’s power to dismiss the petitioner was
(Pedro Chavez), by nature of their specialized line of inherent in the fact that they engaged the services of
service jobs… The Contractor shall hold the Principal free the petitioner as truck driver. The exercised this power in
and harmless from any liability or claim…it being clearly the guise of “severance of contractual relation” due
understood that any truck drivers, helpers or men allegedly to the latter’s breach of his contractual
working with and for the Contractor, are not employees obligation.
who will be indemnified by the Principal for any such (4) the employer’s power to control the employee’s
claim, including damages incurred in connection conduct. (THE MOST IMPORTANT ELEMENT)
therewith.” -The employee is subject to the employer’s power to
control the means and methods by which the
The respondents further claims that the petitioner was employee’s work is to be performed and accomplished.
not dismissed, the severance of his contractual relation In this case, the right to control was manifested by the
with the respondent company was due to his violation of following attendant circumstances: (a) the truck driven
the terms and conditions of their contract. by the petitioner belonged to respondent company; (b)
there was an express instruction from the respondents
Labor Arbiter found the respondent company guilty of that the truck shall be used exclusively to deliver
illegal dismissal and that such contract of service was respondent company’s goods; (c) respondents directed
null and void it being a way to circumvent the rights of the petitioner; after completion of each delivery, to park
the petitioner. The respondents appeal and the same the truck in either of two specific places only, to wit: at its
was dismissed. offices in Metro Manila or in Bataan; and (d) respondents
determined how, where and when the petitioner would
Then it was Appealed, and after so many turn-around of perform his task by issuing to him gate passes and routing
decisions, in the end, CA held that the Petitioner was not slips.
illegally dismissed and that the contract of service was 2. The employment relationship having been proven, the
upheld. respondents now bear the burden to prove that the
dismissal was for a valid and just cause. They insinuated
that the petitioner abandoned his job. To constitute
ISSUE: WoN there was an employee-employer abandonment, these two factors must concur: (1) the
relationship between the petitioner and the respondent failure for work or absence without valid or justifiable
company – YES reason; (2) a clear intention to sever employer-employee
relationship. Obviously, the petitioner did not intend to
RULING: Petition is GRANTED sever his relationship with the respondent company for
he just filed a complaint for regularization and even
prayed for reinstatement.
RATIO:
1. Elements to determine the existence of an
employment relationship are: Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No.
(1) the selection and engagement of the employee; 146881, February 15, 2007
- Undeniably, it was the respondents who engaged the
services of the petitioner without the intervention of a Facts: Dr. Dean N. Climaco is a medical doctor who was
third party hired by Coca-Cola Bottlers Phils., Inc. by virtue of a
(2) the payment of wages; Retainer Agreement. The Retainer Agreement, which
-Wages are defined as “remuneration or earnings, began on January 1, 1988, was renewed annually. The
however designated, capable of being expressed in last one expired on December 31, 1993. Despite the non-
terms of money, whether fixed or ascertained on a time, renewal of the Retainer Agreement, respondent
task, piece or commission basis, or other method of continued to perform his functions as company doctor
calculating the same, which is payable by an employer to Coca-Cola until he received a letter dated March 9,
to an employer under a written or unwritten contract of 1995 from the company concluding their retainership
employment for work done or to be done., or for service agreement effective 30 days from receipt thereof. Dr.
rendered or to be rendered. The fact that the petitioner Climaco inquired from the management of the
was paid on a trip basis is not significant. This is merely a company whether it was agreeable to recognizing him
as a regular employee. The management refused to do and if it is an employee of respondent company who is
so. On February 24, 1994, respondent filed a Complaint attended to by him for special treatment that needs
before the NLRC, Bacolod City, seeking recognition as a hospitalization or operation, this is subject to a special
regular employee of the company and prayed for the billing. More often than not, an employee is required to
payment of all benefits of a regular employee. While the stay in the employer’s workplace or proximately close
complaint was pending before the Labor Arbiter, thereto that he cannot utilize his time effectively and
respondent received a letter dated March 9, 1995 from gainfully for his own purpose. Such is not the prevailing
Petitioner Company concluding their retainership situation here. The Retainership Agreement granted to
agreement effective thirty (30) days from receipt both parties the power to terminate their relationship
thereof. upon giving a 30-day notice. Hence, Petitioner
Company did not wield the sole power of dismissal or
Issue: Whether or not there exists an employer-employee termination. Considering that there is no employer-
relationship. employee relationship between the parties, the
termination of the Retainership Agreement, which is in
Ruling: The Court, in determining the existence of an accordance with the provisions of the Agreement, does
employer-employee relationship, has invariably adhered not constitute illegal dismissal of respondent.
to the four-fold test: (1) the selection and engagement Consequently, there is no basis for the moral and
of the employee; (2) the payment of wages; (3) the exemplary damages granted by the Court of Appeals to
power of dismissal; and (4) the power to control the respondent due to his alleged illegal dismissal.
employee’s conduct, or the so-called "control test,"
considered to be the most important element. No David v. Macasio (2014)
employer-employee relationship exists between the
parties. The…company lacked the power of control over Facts:
the performance by respondent of his duties. Macasio filed before the Labor Arbiter a complaint
The…Comprehensive Medical Plan, which contains the against petitioner Ariel L. David, doing business under
respondent’s objectives, duties and obligations, does not the name and style “Yiels Hog Dealer,” for
tell respondent "how to conduct his physical nonpayment of overtime pay, holiday pay, and 13th
examination, how to immunize, or how to diagnose and month pay.
treat his patients, employees of [petitioner] company, in He also claimed payment for moral and exemplary
each case." damages and attorney’s fees; and for payment of
Neri v. National Labor Relations Commission service incentive leave (SIL).
Macasio alleged before the Labor Arbiter that he
“…It is admitted that FEBTC issued a job description had been working as a butcher for David since
which detailed her functions as a radio/telex operator. January 6, 1995.
However, a cursory reading of the job description shows Macasio claimed that David exercised effective
that what was sought to be controlled by FEBTC was control and supervision over his work, pointing out
actually the end result of the task, e.g., that the daily that David:
incoming and outgoing telegraphic transfer of funds (1) set the work day, reporting time and hogs
received and relayed by her, respectively, tallies with to be chopped, as well as the manner by
that of the register. The guidelines were laid down merely which he was to perform his work;
to ensure that the desired end result was achieved. It did (2) daily paid his salary of P700.00, which was
not, however, tell Neri how the radio/telex machine increased from P600.00 in 2007, P500.00 in
should be operated.” 2006 and P400.00 in 2005; and
(3) approved and disapproved his leaves.
Through the Comprehensive Medical Plan, provided Macasio added that David owned the hogs
guidelines merely to ensure that the end result was delivered for chopping, as well as the work tools and
achieved, but did not control the means and methods implements; David also rented the workplace.
by which respondent performed his assigned tasks. Macasio further claimed that David employs about
Likewise, the allegation of complainant that since he is twenty-five (25) butchers and delivery drivers.
on call at anytime of the day and night makes him a David claimed that he started his hog dealer
regular employee is off-tangent. Complainant does not business in 2005, and that he only has ten employees.
dispute the fact that outside of the two (2) hours that he He alleged that he hired Macasio as a butcher or
is required to be at respondent company’s premises, he chopper on “pakyaw” or task basis who is, therefore,
is not at all further required to just sit around in the not entitled to overtime pay, holiday pay and 13th
premises and wait for an emergency to occur so as to month pay.
enable him from using such hours for his own benefit and David pointed out that Macasio:
advantage. In fact, complainant maintains his own (1) usually starts his work at 10:00 p.m. and ends
private clinic attending to his private practice in the city, at 2:00 a.m. of the following day or earlier,
where he services his patients, bills them accordingly -- depending on the volume of the delivered hogs;
(2) received the fixed amount of P700.00 per David confuses engagement on “pakyaw” or task
engagement, regardless of the actual number of basis with the lack of employment relationship.
hours that he spent chopping the delivered hogs; Impliedly, David asserts that their “pakyawan” or task
and basis arrangement negates the existence of
(3) was not engaged to report for work and, employment relationship.
accordingly, did not receive any fee when no The Supreme Court reject this assertion of the
hogs were delivered. petitioner.
Macasio disputed David’s allegations. Engagement on “pakyaw” or task basis does not
He argued that, first, David did not start his business characterize the relationship that may exist between
only in 2005. He pointed to the Certificate of the parties, i.e., whether one of employment or
Employment that David issued in his favor which independent contractorship.
placed the date of his employment, albeit To determine the existence of an employer-
erroneously, in January 2000. employee relationship, four elements generally need
Second, he reported for work every day which the to be considered, namely:
payroll or time record could have easily proved had (1) the selection and engagement of the
David submitted them in evidence. employee;
David claimed that he issued the Certificate of (2) the payment of wages;
Employment, upon Macasio’s request, only for (3) the power of dismissal; and
overseas employment purposes. (4) the power to control the employee’s
The Labor Arbiter dismissed Macasio’s complaint for conduct.
lack of merit. The Labor Arbiter gave credence to These elements or indicators comprise the so-called
David’s claim that he engaged Macasio on “four-fold” test of employment relationship.
“pakyaw” or task basis. Macasio’s relationship with David satisfies this test.
The LA concluded that since Macasio was engaged A distinguishing characteristic of “pakyaw” or task
on “pakyaw” or task basis, he is not entitled to basis engagement, as opposed to straight-hour
overtime, holiday, SIL and 13th month pay. wage payment, is the non-consideration of the time
The NLRC affirmed the Labor arbiter’s ruling. spent in working.
The CA partly granted Macasio’s certiorari petition The payment of an employee on task or pakyaw
and reversed the NLRC’s ruling for having been basis alone is insufficient to exclude one from the
rendered with grave abuse of discretion. coverage of Service Incentive Leave (SIL) and
While the CA agreed with the LA and the NLRC that holiday pay.
Macasio was a task basis employee, it nevertheless In determining whether workers engaged on
found Macasio entitled to his monetary claims. “pakyaw” or task basis is entitled to holiday and
The CA explained that as a task basis employee, Service Incentive Leave (SIL) pay, the presence (or
Macasio is excluded from the coverage of holiday, absence) of employer supervision as regards the
SIL and 13th month pay only if he is likewise a “field worker’s time and performance is the key.
personnel.” The Supreme Court agree with the CA that Macasio
As defined by the Labor Code, a “field personnel” is does not fall under the definition of “field personnel.”
one who performs the work away from the office or The CA’s finding in this regard is supported by the
place of work, and whose regular work hours cannot established facts of this case:
be determined with reasonable certainty. first, Macasio regularly performed his duties at
In Macasio’s case, the elements that characterize a David’s principal place of business;
“field personnel” are evidently lacking as he had second, his actual hours of work could be
been working as a butcher at David’s “Yiels Hog determined with reasonable certainty; and
Dealer” business in Sta. Mesa, Manila under David’s third, David supervised his time and
supervision and control, and for a fixed working performance of duties.
schedule that starts at 10:00 p.m. Since Macasio cannot be considered a “field
Accordingly, the CA awarded Macasio’s claim for personnel,” then he is not exempted from the grant
holiday, SIL and 13th month pay for three years, with of holiday, SIL pay even as he was engaged on
10% attorney’s fees on the total monetary award. “pakyaw” or task basis.
Hence, David filed the present petition. With respect to the payment of 13th month pay
however, the Supreme Court find that the CA legally
Issue: The issue revolves around the proper application erred in finding that the NLRC gravely abused its
and interpretation of the labor law provisions on holiday, discretion in denying this benefit to Macasio.
SIL and 13th month pay to a worker engaged on The governing law on 13th month pay is PD 8 5 1. As
“pakyaw” or task basis. with holiday and SIL pay, 13th month pay benefits
generally cover all employees; an employee must be
Held: one of those expressly enumerated to be exempted.
Section 3 of the Rules and Regulations Implementing Noteworthy too, is the comparatively low P28,000
P.D. 851 enumerates the exemptions from the monthly pay of petitioner vis the P300,000 a month salary
coverage of 13th month pay benefits. Under said of Sonza, that all the more bolsters the conclusion that
law, “employers of those who are paid on task basis, petitioner was not in the same situation as Sonza. The
and those who are paid a fixed amount for duties of petitioner as enumerated in her employment
performing a specific work, irrespective of the time contract indicate that ABC had control over the work of
consumed in the performance thereof” are petitioner. Aside from control, ABC also dictated the
exempted. work assignments and payment of petitioner’s wages.
Note that unlike the IRR of the Labor Code on ABC also had power to dismiss her. All these being
holiday and SIL pay, Section 3(e) of the Rules and present, clearly, there existed an employment
Regulations Implementing PD 851 exempts relationship between petitioner and ABC.
employees “paid on task basis” without any
reference to “field personnel.” This could only mean Concerning regular employment, the requisites for
that insofar as payment of the 13th month pay is regularity of employment have been met in the instant
concerned, the law did not intend to qualify the case. Petitioner’s work was necessary or desirable in the
exemption from its coverage with the requirement usual business or trade of the employer which includes,
that the task worker be a “field personnel” at the as a pre-condition for its enfranchisement, its
same time. participation in the government’s news and public
information dissemination. In addition, her work was
continuous for a period of four years. This repeated
Dumpit-Morillo vs. CA, G.R. No. 164652, June 8, 2007, engagement under contract of hire is indicative of the
citing 2004 Sonza necessity and desirability of the petitioner’s work in
private respondent ABC’s business. As a regular
Facts: Associated Broadcasting Company (ABC) hired employee, petitioner is entitled to security of tenure and can
Thelma Dumpit-Murillo under a talent contract as a be dismissed only for just cause and after due compliance
newscaster and co-anchor for Balitang-Balita, an early with procedural due process. Since private respondents did
evening news program. The contract was for a period of not observe due process in constructively dismissing the
three months. After four years of repeated renewals, petitioner, there was an illegal dismissal.
petitioner’s talent contract expired. Two weeks after the
expiration of the last contract, petitioner sent a letter to
Mr. Jose Javier, Vice President for News and Public Encyclopedia Britanica vs. NLRC, 264 SCRA 4 [1996]
Affairs of ABC, informing the latter that she was still
interested in renewing her contract subject to a salary Facts: Limjoco was a Sales Divison of Encyclopaedia
increase. Thereafter, petitioner stopped reporting for Britannica and was in charge of selling the products
work. She sent a demand letter to ABC, demanding through some sales representatives. As compensation,
reinstatement, payment of unpaid wages and full he would receive commissions from the products sold by
backwages, payment of 13th month pay, his agents. He was also allowed to use the petitioner’s
vacation/sick/service incentive leaves and other name, goodwill and logo. It was agreed that office
monetary benefits due to a regular employee. ABC expenses would be deducted from Limjoco’s
replied that a check covering petitioner’s talent fees commissions. In 1974, Limjoco resigned to pursue his
had been processed and prepared, but that the other private business and filed a complaint against petitioner
claims of petitioner had no basis in fact or in law. The for alleged non-payment of separation pay and other
Labor Arbiter dismissed the complaint for illegal benefits and also illegal deduction from sales
constructive dismissal. NLRC reversed. commissions. Petitioner alleged that Limjoco was not an
employee of the company but an independent dealer
Issue: Whether or not Murillo is an employee of authorized to promote and sell its products and in return,
Associated Broadcasting Company. received commissions therein. Petitioner also claims that
it had no control and supervision over the complainant
Ruling: Thelma Dumpit-Murillo was a regular employee as to the manners and means he conducted his business
under contemplation of law. The practice of having operations. Limjoco maintained otherwise. He alleged
fixed-term contracts in the industry does not he was hired by the petitioner and was assigned in the
automatically make all talent contracts valid and sales department.
compliant with labor law. The assertion that a talent
contract exists does not necessarily prevent a regular The Labor Arbiter ruled that Limjoco was an employee of
employment status. Further, the Sonza case is not the company. NLRC also affirmed the decision and
applicable. In Sonza, the television station did not opined that there was no evidence supporting
exercise control over the means and methods of the allegation that Limjoco was an independent contractor
performance of Sonza’s work. In the case at bar, ABC or dealer. On appeal, petitioner assails that there was no
had control over the performance of petitioner’s work. employee-employer relationship.
was advised by the hospital authorities to vacate his
Ruling: There was no employee-employer relationship. In cottage. The petitioner filed a petition with the Merit
determining the relationship, the following elements must System Protection Board alleging harassment by
be present: selection and engagement of the respondents; however, it was later dismissed for lack of
employee, payment of wages, power of dismissal and merit. Said decision was appealed to the Civil Service
power to control the employee’s conduct. The power of Commission which dismissed the same including the
control is commonly regarded as the most crucial and Motion for Reconsideration the petitioner has filed after
determinative indicator of the presence or absence of which brought this appeal.
an employee-employer relationship. Under the control
test, an employee-employer relationship exists where the ISSUE: Whether or not the petitioner was illegally
person for whom the services are performed reserves a dismissed from his position and that it is not a violative of
right to control not only the end to be achieved, but also his constitutional right of security of tenure.
the manner and means to be employed in reaching that
end. The issuance of guidelines by the petitioner was RULING: NO. The petitioner was not illegally dismissed.
merely guidelines on company policies which sales The Solicitor General is correct in contending that the
managers follow and impose on their respective agents. petitioner’s temporary appointment after the
Limjoco was not an employee of the company since he reorganization were valid and did not violate his
had the free rein in the means and methods for constitutional right of security of tenure. Petitioner is guilty
conducting the marketing operations. He was merely an of estoppels or laches. Stringent standards and
agent or an independent dealer of the petitioner. He requirements for renewal of specialist-rank positions or for
was free to conduct his work and he was free to engage promotion to the next post-graduate residency year are
in other means of livelihood. necessary because lives are ultimately at stake.
Petitioner’s insistence on being reverted back to the
In ascertaining the employee-employer relationship, the status quo prior to the reorganizations would therefore
factual circumstances must be considered. The element be akin to a college student asking to be sent to high
of control is absent where a person who works for school and staying there. He is estopped from insisting
another does so more or less at his own pleasure and is upon a right or claim which he had plainly abandoned
not subject to definite hours or conditions of work, and in when he, from all indications, enthusiastically accepted
turn is compensated in according to the result of his the promotion. It bears emphasis that at the time of
efforts and not the amount thereof. Hence, there was no petitioner's promotion to the position of Medical
employee-employer relationship. Specialist I (temporary) in August of 1988, no objection
was raised by him about the change of position or the
FELIX VS. BUENASEDA temporary nature of designation. The failure to assert a
G.R. No. 109704 January 17, 1995 claim or the voluntary acceptance of another position in
government, obviously without reservation, leads to a
FACTS: This is a petition assailing the petitioner’s dismissal presumption that the civil servant has either given up his
as Medical Specialist I of the National Center for Mental claim of has already settled into the new position. Finally,
Health as illegal and violative of the constitutional it is crystal clear, from the facts of the case at bench,
provision on security of tenure. Petitioner joined the that the petitioner accepted a temporary appointment
NCMH as a Resident Physician in June1979. Shortly, he (Medical Specialist I). As respondent Civil Service
was promoted as Senior Resident Physician until the Commission has correctly pointed out, the appointment
Ministry of Health reorganized the NCMH pursuant toE.O. was for a definite and renewable period which, when it
119. Under the reorganization, he was appointed to the was not renewed, did not involve a dismissal but an
position of Senior Resident Physician in a temporary expiration of the petitioner's term.
capacity. On August 1988, he was elevated to the
position of Medical Specialist I (Temporary Status) which
was renewed the following year. The Dept. of Health
issued Department Order No. 347 which required board
certification as prerequisite for renewal of specialist
positions in various medical centers and it also extend Francisco vs. NLRC, 500 SCRA 690 [2006]
appointments of Medical Specialist positions in cases
where the termination of medical specialist who failed to Facts: Petitoner was hired by Kasei Corporation during
meet the requirements for board certification. On August the incorporation stage. She was designated as
20, 1991, after reviewing petitioner's service record, non- accountant and corporate secretary and was assigned
renewal of petitioner’s appointment as Medical to handle all the accounting needs of the company. She
Specialist I was recommended. He was, however, was also designated as Liason Officer to the City of
allowed to continue in the service, and receive his Manila to secure permits for the operation of the
salary, allowances and other benefits even after being company.In 1996, Petitioner was designated as Acting
informed of the termination of his appointment. Soon, he Manager. She was assigned to handle recruitment of all
employees and perform management administration By applying the control test, there is no doubt that
functions. In 2001, she was replaced by Liza Fuentes as petitioner is an employee of Kasei Corporation because
Manager. Kasei Corporation reduced her salary to she was under the direct control and supervision of Seiji
P2,500 per month which was until September. She asked Kamura, the corporation’s Technical Consultant. It is
for her salary but was informed that she was no longer therefore apparent that petitioner is economically
connected to the company. She did not anymore dependent on Respondent Corporation for her
report to work since she was not paid for her salary. She continued employment in the latter’s line of business.
filed an action for constructive dismissal with the Labor There can be no other conclusion that petitioner is an
Arbiter. The Labor Arbiter found that the petitioner was employee of respondent Kasei Corporation. She was
illegally dismissed. NLRC affirmed the decision while CA selected and engaged by the company for
reversed it. compensation, and is economically dependent upon
respondent for her continued employment in that line of
The following issue is to be discussed, whether there was business. Her main job function involved accounting
an employer-employee relationship. and tax services rendered to Respondent Corporation
on a regular basis over an indefinite period of
Ruling: The court held that in this jurisdiction, there has engagement. Respondent Corporation hired and
been no uniform test to determine the existence of an engaged petitioner for compensation, with the power to
employer-employee relation. Generally, courts have dismiss her for cause. More importantly, Respondent
relied on the so-called right of control test where the Corporation had the power to control petitioner with the
person for whom the services are performed reserves a means and methods by which the work is to be
right to control not only the end to be achieved but also accomplished.
the means to be used in reaching such end. In addition
to the standard of right-of-control, the existing economic GABRIEL V BILON
conditions prevailing between the parties, like the G.R. NO. 146989 FEBRURARY 7, 2007
inclusion of the employee in the payrolls, can help in
determining the existence of an employer-employee FACTS:
relationship. The better approach would therefore be to Petitioner, represented by his surviving spouse,
adopt a two-tiered test involving: (1) the putative Flordeliza V. Gabriel, was the owner-operator of a public
employer’s power to control the employee with respect transport business, “Gabriel Jeepney”. Petitioner had a
to the means and methods by which the work is to be pool of drivers, which included respondents, operating
accomplished; and (2) the underlying economic realities under a “boundary system” of P400 per day. The
of the activity or relationship. In Sevilla v. Court of following issue was raised by the respondents before the
Appeals, the court observed the need to consider the court, they were illegally deducted by the petitioner
existing economic conditions prevailing between the P55.00 per day for the following :(a) 20.00 police
parties, in addition to the standard of right-of-control like protection; (b) 20.00 washing; (c) 10.00 deposit; (d)
the inclusion of the employee in the payrolls, to give a garage fees and they were illegally dismissed . The
clearer picture in determining the existence of an petitioner rose that there is no employer-employee
employer-employee relationship based on an analysis of relationships exists.
the totality of economic circumstances of the worker.
ISSUE:
Thus, the determination of the relationship between Whether there is an employer-employee
employer and employee depends upon the relationship between the parties.
circumstances of the whole economic activity, such as:
(1) the extent to which the services performed are an HELD:
integral part of the employer’s business; (2) the extent of The relationship between jeepney
the worker’s investment in equipment and facilities; (3) owners/operators and jeepney drivers under the
the nature and degree of control exercised by the boundary system is that of employer-employee and not
employer; (4) the worker’s opportunity for profit and loss; of lessor-lessee because in the lease of chattels the lessor
(5) the amount of initiative, skill, judgment or foresight loses complete control over the chattel leased although
required for the success of the claimed independent the lessee cannot be reckless in the use thereof,
enterprise; (6) the permanency and duration of the otherwise he would be responsible for the damages to
relationship between the worker and the employer; and the lessor. In the case of jeepney owners/operators and
(7) the degree of dependency of the worker upon the jeepney drivers, the former exercises supervision and
employer for his continued employment in that line of control over the latter. The fact that the drivers do not
business. The proper standard of economic receive fixed wages but get only that in excess of the so
dependence is whether the worker is dependent on the called boundary they pay to the owner/operator is not
alleged employer for his continued employment in that sufficient to withdraw the relationship between them
line of business. from that of employer and employee. Thus, private
respondents were employees because they had been
engaged to perform activities which were usually ten day requirement to make an appeal is not
necessary or desirable in the usual business or trade of applicable in this situation because Gabriel was not yet
the employer. properly substituted by the wife. The counting of the
The respondents are entitled to reinstatement without period should be made starting from the date when the
loss of seniority rights and other privileges and to their full copy was sent via registered mail. Therefore, the appeal
backwages computed from the date of dismissal up to filed on June 5 was made on time.
the time of their actual reinstatement .
There exists an employer-employee relationship between
the drivers and Gabriel. The fact that the drivers do not
GABRIEL V. BILON receive fixed wages but get only that in excess of the so-
GR 146989, JUNE 2006 called “boundary” [that] they pay to the
owner/operator is not sufficient to withdraw the
FACTS: Bilon, Brazil and Pagaygay are jeepney drivers relationship between them from that of employer and
driving jeepneys owned by Melencio Gabriel. They are employee.
paying P400/day for their boundary. Later, the drivers
were required to pay an additional P50.00 to cover The award of the separation pay is not proper. It was not
police protection, car wash, deposit fee, and garage shown that there was a strained relationship between
fees. Gabriel and the drivers so as to cause animosity if they
are reinstated. The Strained Relations Principle is only
The three drivers refused to pay the additional P50.00. applied if it is shown that reinstatement would only cause
On April 30, 1995, when the drivers reported to work, they antagonism between the employer and the employee;
were not given any jeepney to drive. Eventually, they and that the only solution is separation and the payment
were dismissed. The three drivers sued Gabriel for illegal of separation pay.
dismissal.

The Labor Arbiter ruled in favor of the drivers and JARDIN V. NLRC (G.R. NO. 119268)
ordered Gabriel to pay the drivers their backwages and
their separation pay amounting to about a total of Facts: Petitioners were drivers of Respondent (Philjama
P1.03M. International Inc.) a domestic corporation engaged in
the operation of “Goodman Taxi” under a boundary
On April 18, 1997, the LA promulgated its decision and system. Believing that the deduction for the washing of
on the same day sent a copy thereof to Gabriel but taxi units in their daily earnings is illegal, Petitioners
Flordeliza (wife of Gabriel) refused to receive the copy. decided to form a labor union to protect their rights and
Apparently, Gabriel died on April 4, 1997. The copy was interests.
resent via registered mail on May 28, 1997. Flordeliza Upon learning about the plan of Petitioners, Respondent
appealed to the LA on June 5, 1997. refused to let them drive their taxicabs when they
reported for work, and on succeeding days. Aggrieved,
The LA dismissed the appeal; it ruled that the appeal Petitioners filed with the labor arbiter a complaint
was not on time because the promulgation was made against Respondent for unfair labor practice, illegal
on April 18, 1997 and that the appeal on June 5, 1997 dismissal and illegal deduction of washing fees. In a
was already beyond the ten day period required for decision, the labor arbiter dismissed said complaint for
appeal. lack of merit.
On appeal, the NLRC reversed and set aside the
judgment of the labor arbiter declaring that Petitioners
The National Labor Relations Commission reversed the
are employees of Respondent, and, as such, their
LA. It ruled that there was no employee-employer
dismissal must be for just cause and after due process.
relationship between the drivers and Gabriel. The Court
Respondent’s first motion for reconsideration having
of Appeals reversed the NLRC but it ruled that the
been denied, another motion was filed and was granted
separation pay should not be awarded but rather, the
by the NLRC, ruling that the relationship of the parties is
employees should be reinstated.
not that of an employer-employee but that of leasehold
and thus covered by the Civil Code rather than the
ISSUE: Whether or not the appeal before the LA was
Labor Code. NLRC denied Petitioner’s reconsideration,
made on time. Whether or not there was an employer-
hence the instant petition.
employee relationship between the drivers and Gabriel.
Whether or not there was a strained relation between
Issue:
Gabriel and the drivers.
Whether or not there exists an employer-employee
relationship between petitioner and private respondent.
HELD: The appeal was made on time because when the
promulgation was made Gabriel is already dead. The Ruling:
The petition is impressed with merit. FACTS:
In a number of cases decided by this Court, we ruled Javier an employee of Fly Ace performing various work
that the relationship between jeepney owners/operators for the latter filed a complaint before the NLRC for
on one hand and jeepney drivers on the other under the underpayment of salaries and other labor standard
boundary system is that of employer-employee and not benefits.
of lessor-lessee. We explained that in the lease of He alleged that he reported for work from Monday to
chattels, the lessor loses complete control over the Saturday from 7:00 oclock in the morning to 5:00 oclock
chattel leased although the lessee cannot be reckless in in the afternoon; that during his employment, he was not
the use thereof, otherwise he would be responsible for issued an identification card and pay slips by the
the damages to the lessor. In the case of jeepney company; that he reported for work but he was no
owners/operators and jeepney drivers, the former longer allowed to enter the company premises by the
exercise supervision and control over the latter. The security guard upon the instruction of Ruben Ong (Mr.
management of the business is in the owner’s hands. The Ong), his superior; that after several minutes of begging
owner as holder of the certificate of public convenience to the guard to allow him to enter, he saw Ong whom he
must see to it that the driver follows the route prescribed approached and asked why he was being barred from
by the franchising authority and the rules promulgated entering the premises; that Ong replied by saying,
as regards its operation. Now, the fact that the drivers do Tanungin mo anak mo;that he discovered that Ong had
not receive fixed wages but get only that in excess of been courting his daughter Annalyn after the two met at
the so-called “boundary” they pay to the a fiesta celebration in Malabon City; that Annalyn tried
owner/operator is not sufficient to withdraw the to talk to Ong and convince him to spare her father from
relationship between them from that of employer and trouble but he refused to accede; that thereafter, Javier
employee. We have applied by analogy the above was terminated from his employment without notice;
stated doctrine to the relationships between bus and that he was neither given the opportunity to refute
owner/operator and bus conductor, auto-calesa the cause/s of his dismissal from work.
owner/operator and driver, and recently between taxi
owners/operators and taxi drivers. Hence, petitioners are For its part p, Fly Ace denied the existence of employer-
undoubtedly employees of private respondent because employee relationship between them and Javier as the
as taxi drivers they perform activities which are usually latter was only called roughly 5 to 6 times only in a
necessary or desirable in the usual business or trade of month whenever the vehicle of its contracted hauler,
their employer. Milmar Hauling Services, was not available. Labor Arbiter
With regard to the amount deducted daily by private dismissed the complaint ruling that respondent Fly Ace is
respondent from petitioners for washing of the taxi units, not engaged in trucking business but in the importation
we view the same as not illegal in the context of the law. and sales of groceries. Since there is a regular hauler to
We note that after a tour of duty, it is incumbent upon deliver its products, we give credence to Respondents
the driver to restore the unit he has driven to the same claim that complainant was contracted on pakiao basis.
clean condition when he took it out. Car washing after a
tour of duty is indeed a practice in the taxi industry and is On appeal, NLRC reversed the decisin of the LA. It was
in fact dictated by fair play. Hence, the drivers are not of the view that a pakyaw-basis arrangement did not
entitled to reimbursement of washing charges. preclude the existence of employer-employee
relationship. Payment by result x x x is a method of
WHEREFORE, the instant petition is GRANTED. The assailed compensation and does not define the essence of the
DECISION of NLRC is hereby SET ASIDE. The DECISION and relation. It is a mere method of computing
RESOLUTION of NLRC are hereby REINSTATED subject to compensation, not a basis for determining the existence
MODIFICATION. Respondent is directed to reinstate or absence of an employer-employee relationship. The
Petitioners to their positions held at the time of the NLRC further averred that it did not follow that a worker
complained dismissal. Respondent is likewise ordered to was a job contractor and not an employee, just
pay Petitioners their full backwages, to be computed because the work he was doing was not directly related
from the date of dismissal until their actual reinstatement. to the employers trade or business or the work may be
However, the order of Respondent that Petitioners be considered as extra helper as in this case; and that the
reimbursed the amount paid as washing charges is relationship of an employer and an employee was
deleted. determined by law and the same would prevail
whatever the parties may call it. Finding Javier to be a
regular employee, the NLRC ruled that he was entitled to
a security of tenure. For failing to present proof of a valid
BITOY JAVIER v. FLY ACE CORPORATION and FLORDELYN cause for his termination, Fly Ace was found to be liable
CASTILLO for illegal dismissal of Javier who was likewise entitled to
G.R. No. 192558 : February 15, 2012 backwages and separation pay in lieu of reinstatement.
However, on appeal, CA reversed the ruling of NLRC
The CA ruled thatJaviers failure to present salary Javier failed to pass the substantiality requirement to
vouchers, payslips, or other pieces of evidence to bolster support his claim. Hence, the Court sees no reason to
his contention, pointed to the inescapable conclusion depart from the findings of the CA.
that he was not an employee of Fly Ace. Further, it found
that Javiers work was not necessary and desirable to the While Javier remains firm in his position that as an
business or trade of the company, as it was only when employed stevedore of Fly Ace, he was made to work in
there were scheduled deliveries, which a regular hauling the company premises during weekdays arranging and
service could not deliver, that Fly Ace would contract cleaning grocery items for delivery to clients, no other
the services of Javier as an extra helper. Lastly, the CA proof was submitted to fortify his claim. The lone affidavit
declared that the facts alleged by Javier did not pass executed by one Bengie Valenzuela was unsuccessful in
the control test. strengthening Javiers cause.

He contracted work outside the company premises; he The Court is of the considerable view that on Javier lies
was not required to observe definite hours of work; he the burden to pass the well-settled tests to determine the
was not required to report daily; and he was free to existence of an employer-employee relationship, viz: (1)
accept other work elsewhere as there was no exclusivity the selection and engagement of the employee; (2) the
of his contracted service to the company, the same payment of wages; (3) the power of dismissal; and (4)
being co-terminous with the trip only. Since no the power to control the employees conduct. Of these
substantial evidence was presented to establish an elements, the most important criterion is whether the
employer-employee relationship, the case for illegal employer controls or has reserved the right to control the
dismissal could not prosper. Hence, this appeal. employee not only as to the result of the work but also as
to the means and methods by which the result is to be
ISSUE: Whether or not there exist an employer-employee accomplished.
relationship between Javier and Fly Ace, thereby
holding the latter guilty of illegal dismissal. DENIED.

HELD: The CA's decision was sustained.


Locsin vs. PLDT GR No. 185251, October 2, 2009
LABOR LAW
Facts:
As the records bear out, the LA and the CA found On November 1, 1990, respondent Philippine Long
Javiers claim of employment with Fly Ace as wanting Distance Telephone Company (PLDT) and the Security
and deficient. The Court is constrained to agree. Labor and Safety Corporation of the Philippines (SSCP) entered
officials are enjoined to use reasonable means to into a Security Services Agreement (Agreement)
ascertain the facts speedily and objectively with little whereby SSCP would provide armed security guards to
regard to technicalities or formalities but nowhere in the PLDT to be assigned to its various offices. Pursuant to
rules are they provided a license to completely discount such agreement, petitioners Raul Locsin and Eddie
evidence, or the lack of it. The quantum of proof Tomaquin, among other security guards, were posted at
required, however, must still be satisfied. Hence, when a PLDT office.
confronted with conflicting versions on factual matters, it
is for them in the exercise of discretion to determine On August 30, 2001, respondent issued a Letter dated
which party deserves credence on the basis of evidence August 30, 2001 terminating the Agreement effective
received, subject only to the requirement that their October 1, 2001. Despite the termination of the
decision must be supported by substantial Agreement, however, petitioners continued to secure
evidence.Accordingly, the petitioner needs to show by the premises of their assigned office. They were allegedly
substantial evidence that he was indeed an employee directed to remain at their post by representatives of
of the company against which he claims illegal dismissal. respondent. In support of their contention, petitioners
provided the Labor Arbiter with copies of petitioner
In sum, the rule of thumb remains: the onus probandi falls Locsin’s pay slips for the period of January to September
on petitioner to establish or substantiate such claim by 2002.
the requisite quantum of evidence. Whoever claims
entitlement to the benefits provided by law should Then, on September 30, 2002, petitioners’ services were
establish his or her right thereto x x x. Sadly, Javier failed terminated. Thus, petitioners filed a complaint before the
to adduce substantial evidence as basis for the grant of Labor Arbiter for illegal dismissal and recovery of money
relief. claims such as overtime pay, holiday pay, premium pay
for holiday and rest day, service incentive leave pay,
By way of evidence on this point, all that Javier Emergency Cost of Living Allowance, and moral and
presented were his self-serving statements purportedly exemplary damages against PLDT.
showing his activities as an employee of Fly Ace. Clearly,
The Labor Arbiter rendered a Decision finding PLDT liable
for illegal dismissal. It was explained in the Decision that
petitioners were found to be employees of PLDT and not
of SSCP. Such conclusion was arrived at with the factual
finding that petitioners continued to serve as guards of
PLDT’s offices. As such employees, petitioners were
entitled to substantive and procedural due process
before termination of employment.

Issue:
Is there employer-employee relationship?

Ruling:
Yes. From the foregoing circumstances, reason dictates
that we conclude that petitioners remained at their post
under the instructions of respondent. We can further
conclude that respondent dictated upon petitioners
that the latter perform their regular duties to secure the
premises during operating hours. This, to our mind and
under the circumstances, is sufficient to establish the
existence of an employer-employee relationship.

To reiterate, while respondent and SSCP no longer had


any legal relationship with the termination of the
Agreement, petitioners remained at their post securing
the premises of respondent while receiving their salaries,
allegedly from SSCP. Clearly, such a situation makes no
sense, and the denials proffered by respondent do not
shed any light to the situation. It is but reasonable to
conclude that, with the behest and, presumably,
directive of respondent, petitioners continued with their
services. Evidently, such are indicia of control that
respondent exercised over petitioners.
Evidently, respondent having the power of control over
petitioners must be considered as petitioners’ employer–
–from the termination of the Agreement onwards––as
this was the only time that any evidence of control was
exhibited by respondent over petitioners and in light of
our ruling in Abella. Thus, as aptly declared by the NLRC,
petitioners were entitled to the rights and benefits of
employees of respondent, including due process
requirements in the termination of their services.

Both the Labor Arbiter and NLRC found that respondent


did not observe such due process requirements. Having
failed to do so, respondent is guilty of illegal dismissal.
People’s Broadcasting v. Sec. of DOLE No.
G.R. no. 179652. May 8, 2009 Clearly the law accords a prerogative to the
NLRC over the claim when the employer-employee
Facts: relationship has terminated or such relationship has not
Jandeleon Juezan (respondent) filed a arisen at all. The reason is obvious. In the second
complaint against People’s Broadcasting Service, situation especially, the existence of an employer-
Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal employee relationship is a matter which is not easily
deduction, non-payment of service incentive leave, determinable from an ordinary inspection, necessarily so,
13th month pay, premium pay for holiday and rest day because the elements of such a relationship are not
and illegal diminution of benefits, delayed payment of verifiable from a mere ocular examination. The
wages and non-coverage of SSS, PAG-IBIG and intricacies and implications of an employer-employee
Philhealth before the Department of Labor and relationship demand that the level of scrutiny should be
Employment (DOLE) Regional Office No. VII,Cebu City. far above the cursory and the
mechanical. While documents, particularly docume
On the basis of the complaint, the DOLE nts found in the employer’s office are the primary
conducted a plant level inspection on 23 September source materials, what may prove decisive are
2003. In the Inspection Report Form, the Labor Inspector factors related to the history of the employer’s business
wrote under the heading “Findings/Recommendations” operations, its current state as well as accepted
“non-diminution of benefits” and “Note: Respondent contemporary practices in the industry. More often than
deny employer-employee relationship with the not, the question of employer-employee relationship
complainant- see Notice of Inspection results.” becomes a battle of evidence, the determination of
Petitioner was required to rectify/restitute the which should be comprehensive and intensive and
violations within five (5) days from receipt. No therefore best left to the specialized quasi-judicial body
rectification was effected by petitioner; thus, summary that is the NLRC.
investigations were conducted, with the parties
eventually ordered to submit their respective position It can be assumed that the DOLE in the exercise of
papers. its visitorial and enforcement power somehow has to
make a determination of the existence of an employer-
In his Order dated 27 February 2004, DOLE employee relationship. Such prerogatival determination,
Regional Director Atty. Rodolfo M. Sabulao (Regional however, cannot be coextensive with the visitorial and
Director) ruled that respondent is an employee enforcement power itself. Indeed, such determination is
of petitioner, and that the former is entitled to his money merely preliminary, incidental and collateral to the
claims amounting to P203, 726.30. Petitioner sought DOLE’s primary function of enforcing labor standards
reconsideration of the Order, claiming that the Regional provisions. The determination of the existence of
Director gave credence to the documents offered by employer-employee relationship is still primarily lodged
respondent without examining the originals, but at the with the NLRC. This is the meaning of the clause “in cases
same time he missed or failed to consider where the relationship of employer-employee still exists”
petitioner’s evidence. Petitioner’s motion for in Art. 128 (b).
reconsideration was denied.[ On appeal to the DOLE
Secretary, petitioner denied once more the existence of Thus, before the DOLE may exercise its powers
employer-employee relationship. In its Order dated 27 under Article 128, two important questions must be
January 2005, the Acting DOLE Secretary dismissed the resolved: (1) Does the employer-employee relationship
appeal on the ground that petitioner did not post a cash still exist, or alternatively, was there ever an employer-
or surety bond and instead submitted a Deed of employee relationship to speak of; and (2) Are there
Assignment of Bank Deposit. Petitioner maintained that violations of the Labor Code or of any labor law?
there is no employer-employee relationship had ever
existed between it and respondent because it was the The existence of an employer-employee
drama directors and producers who paid, supervised relationship is a statutory prerequisite to and
and disciplined respondent. It also added that the case a limitation on the power of the Secretary of Labor, one
was beyond the jurisdiction of the DOLE and should which the legislative branch is entitled to impose. The
have been considered by the labor arbiter rationale underlying this limitation is to eliminate the
because respondent’s claim exceeded P5,000.00. prospect of competing conclusions of the Secretary of
Labor and the NLRC, on a matter fraught with questions
Issue: of fact and law, which is best resolved by the quasi-
Does the Secretary of Labor have the power to judicial body, which is the NRLC, rather than an
determine the existence of an employer-employee administrative official of the executive branch of the
relationship? government. If the Secretary of Labor proceeds to
exercise his visitorial and enforcement powers absent the
Held:
first requisite, as the dissent proposes, his office confers SMCEU v. Judge Bersamira (Review, Art. 212)
jurisdiction on itself which it cannot otherwise acquire. G.R. No. 87700 June 13, 1990

Reading of Art. 128 of the Labor Code reveals that The existence of a labor dispute is not negated by the
the Secretary of Labor or his authorized representatives fact that the plaintiff and defendants do not stand in the
was granted visitorial and enforcement powers for the proximate relations of ER-EE. (SMCEU v Bersamira, where
purpose of determining violations of, and enforcing, the dispute was between contracual employees and an
the Labor Code and any labor law, wage order, or rules employer)
and regulations issued pursuant thereto. Necessarily, the
actual existence of an employer-employee relationship Facts: Sometime in 1983 and 1984, SanMig entered into
affects the complexion of the putative findings that the contracts for merchandising services with Lipercon and
Secretary of Labor may determine, since employees are D'Rite. These companies are independent contractors
entitled to a different set of rights under the Labor Code duly licensed by the DOLE. In said contracts, it was
from the employer as opposed to non- expressly understood and agreed that the workers
employees. Among these differentiated rights are those employed by the contractors were to be paid by the
accorded by the “labor standards” provisions of the latter and that none of them were to be deemed
Labor Code, which the Secretary of Labor is mandated employees or agents of SanMig. There was to be no
to enforce. If there is no employer-employee employer-employee relation between the contractors
relationship in the first place, the duty of the employer to and/or its workers, on the one hand, and SanMig on the
adhere to those labor standards with respect to the non- other.
employees is questionable.
Petitioner is the duly authorized representative of the
At least a prima facie showing of such absence monthly paid rank-and-file employees of SanMig with
of relationship, as in this case, is needed to preclude the whom the latter executed a Collective Bargaining
DOLE from the exercise of its power. The Secretary of Agreement effective 1 July 1986 to 30 June 1989. Section
Labor would not have been precluded from exercising 1 of their CBA specifically provides that "temporary,
the powers under Article 128 (b) over petitioner if probationary, or contract employees and workers are
another person with better-grounded claim of excluded from the bargaining unit and, therefore,
employment than that which respondent outside the scope of this Agreement."
had. Respondent, especially if he were an
employee, could have very well enjoined other In a letter dated 20 November 1988, the Union advised
employees to complain with the DOLE, and, at the same SanMig that some Lipercon and D'Rite workers had
time, petitioner could ill-afford to disclaim an signed up for union membership and sought the
employment relationship with all of the people under its regularization of their employment with SMC. The Union
aegis. alleged that this group of employees, while appearing to
be contractual workers supposedly independent
The most important consideration for the contractors, have been continuously working for SanMig
allowance of the instant petition is the opportunity for the for a period ranging from 6 months to 15 years and that
Court not only to set the demarcation between the their work is neither casual nor seasonal as they are
NLRC’s jurisdiction and the DOLE’s prerogative but also performing work or activities necessary or desirable in the
the procedure when the case involves the fundamental usual business or trade of SanMig. Thus, it was contended
challenge on the DOLE’s prerogative based on lack of that there exists a "labor-only" contracting situation. It
employer-employee relationship. As exhaustively was then demanded that the employment status of
discussed here, the DOLE’s prerogative hinges on the these workers be regularized.
existence of employer-employee relationship, the issue On 12 January 1989 and 30 January 1989, the Union filed
is which is at the very heart of this case. And the two notices of strike for unfair labor practice, CBA
evidence clearly indicates private respondent has never violations, and union busting. Conciliatory meetings were
been petitioner’s employee. But the DOLE did not then held before the National Conciliation and
address, while the Court of Appeals glossed over, the Mediation Board of DOLE (NCMB-DOLE).
issue. The peremptory dismissal of the instant petition on
a technicality would deprive the Court of the Beginning 14 February 1989 until 2 March 1989, series of
opportunity to resolve the novel controversy. pickets were staged by Lipercon and D'Rite workers in
various SMC plants and offices.
WHEREFORE, the petition is GRANTED. On 6 March 1989, SMC filed a verified Complaint for
Injunction and Damages before respondent Court
enjoining petitioner from representing and/or acting in
Professional Services v CA behalf of the employees of Lipercon and D’Rite, and of
Feb 11 2008 calling a strike among others.
Respondent Court found the Complaint sufficient in form Facts: In May 1994, ABS-CBN signed an agreement with
and substance and issued a Temporary Restraining the Mel and Jay Management and Development
Order, and subsequently, an Order granting the Corporation (MJMDC). ABS-CBN was represented by its
complaint of SanMig. corporate officers while MJMDC was represented by
Sonza, as President and general manager, and Tiangco
Issue: Whether or not there exists a labor dispute such as its EVP and treasurer. Referred to in the agreement as
that the RTC may not validly assume jurisdiction to the agent, MJMDC agreed to provide Sonza’s services
exclusion of the NCMB-DOLE. exclusively to ABS-CBN as talent for radio and television.
ABS-CBN agreed to pay Sonza a monthly talent fee of
Held: A "labor dispute" as defined in Article 212 (1) of the P310, 000 for the first year and P317, 000 for the second
Labor Code includes "any controversy or matter and third year. On April 1996, Sonza wrote a letter to
concerning terms and conditions of employment or the ABS-CBN where he irrevocably resigned in view of the
association or representation of persons in negotiating, recent events concerning his program and career. After
fixing, maintaining, changing, or arranging the terms and the said letter, Sonza filed with the Department of Labor
conditions of employment, regardless of whether the and Employment a complaint alleging that ABS-CBN did
disputants stand in the proximate relation of employer not pay his salaries, separation pay, service incentive
and employee." pay,13th month pay, signing bonus, travel allowance and
amounts under the Employees Stock Option Plan (ESOP).
While it is SanMig's submission that no employer- ABS-CBN contended that no employee-employer
employee relationship exists between itself, on the one relationship existed between the parties. However, ABS-
hand, and the contractual workers of Lipercon and CBN continued to remit Sonza’s monthly talent fees but
D'Rite on the other, a labor dispute can nevertheless opened another account for the same purpose.
exist "regardless of whether the disputants stand in the
proximate relationship of employer and employee" The Labor Arbiter dismissed the complaint and found
provided the controversy concerns, among others, the that there is no employee-employer relationship. NLRC
terms and conditions of employment or a "change" or affirmed the decision of the Labor Arbiter. CA also
"arrangement" thereof. Put differently, and as defined by affirmed the decision of NLRC.
law, the existence of a labor dispute is not determined
by the fact that the plaintiffs and defendants do not Ruling: Case law has consistently held that the elements
stand in the proximate relation of employer and of an employee-employer relationship are selection and
employee. engagement of the employee, the payment of wages,
the power of dismissal and the employer’s power to
That a labor dispute, as defined by the law, does exist control the employee on the means and methods by
here is evident. What the Union seeks is to regularize the which the work is accomplished. The last element, the
status of the employees contracted by Lipercon and so-called "control test", is the most important element.
D'Rite in effect, that they be absorbed into the working Sonza’s services to co-host its television and radio
unit of SanMig. This matter definitely dwells on the programs are because of his peculiar talents, skills and
working relationship between said employees vis-a-vis celebrity status. Independent contractors often present
SanMig. Terms, tenure and conditions of their themselves to possess unique skills, expertise or talent to
employment and the arrangement of those terms are distinguish them from ordinary employees. The specific
thus involved bringing the matter within the purview of a selection and hiring of SONZA, because of his unique
labor dispute. Further, the Union also seeks to represent skills, talent and celebrity status not possessed by
those workers, who have signed up for Union ordinary employees, is a circumstance indicative, but
membership, for the purpose of collective bargaining. not conclusive, of an independent contractual
SanMig, for its part, resists that Union demand on the relationship. All the talent fees and benefits paid to
ground that there is no employer-employee relationship SONZA were the result of negotiations that led to the
between it and those workers and because the demand Agreement. For violation of any provision of the
violates the terms of their CBA. Obvious then is that Agreement, either party may terminate their relationship.
representation and association, for the purpose of Applying the control test to the present case, we find
negotiating the conditions of employment are also that SONZA is not an employee but an independent
involved. Neither can it be denied that the controversy contractor.
below is directly connected with the labor dispute
already taken cognizance of by the NCMB-DOLE. The control test is the most important test our courts
apply in distinguishing an employee from an
As the case is indisputably linked with a labor dispute, independent contractor. This test is based on the extent
jurisdiction belongs to the labor tribunals. of control the hirer exercises over a worker. The greater
the supervision and control the hirer exercises, the more
Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004 likely the worker is deemed an employee. The converse
holds true as well – the less control the hirer exercises, the
more likely the worker is considered an independent JJ alleged that he was hired by petitioners as Sizing
contractor. To perform his work, SONZA only needed his Machine Operator on March 17, 1984. His work schedule
skills and talent. How SONZA delivered his lines, is from 8:00 a.m. to 5:00 p.m.
appeared on television, and sounded on radio were Initially, his compensation was on “pakiao” basis but
outside ABS-CBN’s control. ABS-CBN did not instruct sometime in June 1984, it was fixed at P150.00 per day
SONZA how to perform his job. ABS-CBN merely reserved which was paid weekly.
the right to modify the program format and airtime In 1990, without any apparent reason, his employment
schedule "for more effective programming." ABS-CBN’s was interrupted as he was told by petitioners to resume
sole concern was the quality of the shows and their work in two months’ time.
standing in the ratings. Clearly, ABS-CBN did not exercise Being an uneducated person, JJ was persuaded by the
control over the means and methods of performance of management as well as his brother not to complain, as
Sonza’s work. A radio broadcast specialist who works otherwise petitioners might decide not to call him back
under minimal supervision is an independent contractor. for work.
Sonza’s work as television and radio program host Fearing such consequence, JJ accepted his fate.
required special skills and talent, which SONZA Nonetheless, after two months he reported back to work
admittedly possesses. ABS-CBN claims that there exists a upon order of management.
prevailing practice in the broadcast and entertainment Despite being an employee for many years with his work
industries to treat talents like Sonza as independent performance never questioned by petitioners,
contractors. The right of labor to security of tenure as respondent was dismissed on January 1, 2002 without
guaranteed in the Constitution arises only if there is an lawful cause.
employer-employee relationship under labor laws. He was told that he will be terminated because the
Individuals with special skills, expertise or talent enjoy the company is not doing well financially and that he would
freedom to offer their services as independent be called back to work only if they need his services
contractors. The right to life and livelihood guarantees again. JJ waited for almost a year but petitioners did
this freedom to contract as independent contractors. not call him back to work.
The right of labor to security of tenure cannot operate to On their part, Rattan denied having hired respondent.
deprive an individual, possessed with special skills, That is, Rattan denied that JJ was their employee:
expertise and talent, of his right to contract as an  JJ alleged that he worked continuously from
independent contractor. March 17, 1984 up to January 21, 2002. Records
reveal however that Rattan Inc. was
SOUTH EAST INT’L RATTAN INC. v. JJ COMING incorporated only last July 18, 1986.
 Moreover, when they started to actually
SUMMARY. JJ Coming filed a complaint for illegal operate in 1987, the company was engaged
dismissal, underpayment of wages, non-payment of purely on “buying and exporting rattan
holiday pay, 13th month pay and service incentive furniture” hence no manufacturing employees
leave pay, with prayer for reinstatement, back wages, were hired.
damages and attorney’s fees. Rattan Inc. denied having  Furthermore, from the last quarter of 1989 up to
hired JJ, showing that he failed to present a single August of 1992, the company suspended
payslip, voucher or a copy of a company payroll operations due to economic reverses as per
showing that he rendered service, nor was he in the list Certification issued by the SEC.
of employees reported to the SSS.  JJ also failed to present a single payslip,
DOCTRINE. In resolving the issue of whether such voucher or a copy of a company payroll
relationship exists in a given case, substantial evidence – showing that he rendered service during the
that amount of relevant evidence which a reasonable period indicated therein.
mind might accept as adequate to justify a conclusion –  Also, JJ’s name does not appear in the list of
is sufficient. Although no particular form of evidence is employees reported to the SSS.
required to prove the existence of the relationship, and  There was also an Affidavit of Vicente Coming,
any competent and relevant evidence to prove the JJ’s full brother, attesting that JJ had never
relationship may be admitted, a finding that the been an employee of Rattan. The only
relationship exists must nonetheless rest on substantial connection was that their employer Faustino
evidence. Apondar supplies finished rattan products to
Rattan Inc.
FACTS: On November 3, 2003, respondent Jesus J. Labor Arbiter rendered decision in favor of JJ.
Coming filed a complaint for illegal dismissal, NLRC reversed the Decision of the Labor Arbiter.
underpayment of wages, non-payment of holiday pay, CA overturned NLRC decision, in favor of JJ.
13th month pay and service incentive leave pay, Rattan Inc. now raised the issue up to the SC.
with prayer for reinstatement, back wages, damages
and attorney’s fees. ISSUES & RATIO.
1. WON an employer-employee relationship existed (3) They enforced the observance of definite hours of
between the company and JJ Coming. – YES. work from 8am to 5am;
(4) The mode of payment of JJ’s salary was under
In resolving the issue of whether such relationship exists in their discretion, at first paying him on “pakiao” basis
a given case, substantial evidence – that amount of and thereafter, on daily basis;
relevant evidence which a reasonable mind might (5) They implemented company rules and regulations;
accept as adequate to justify a conclusion – is sufficient. (6) Agbay directly paid JJ’s salaries and controlled all
aspects of his employment; and
Although no particular form of evidence is required to (7) JJ rendered work necessary and desirable in the
prove the existence of the relationship, and any business of the Rattan Inc.
competent and relevant evidence to prove the
relationship may be admitted, a finding that the DECISION.
relationship exists must nonetheless rest on substantial Petition is denied. The CA Decision (2008) and Resolution
evidence. (2009) are affirmed and upheld. (Setting aside the NLRC
Decision and reinstating the Labor Arbiter Decision which
To ascertain the existence of an employer-employee was in favor of JJ Coming)
relationship jurisprudence has invariably adhered to the
four-fold test, to wit: NOTES.
(1) The selection and engagement of the Lines from Decision:
employee;
(2) The payment of wages; “In any controversy between a laborer and his master,
(3) The power of dismissal; and doubts reasonably arising from the evidence are
(4) The power to control the employee’s resolved in favor of the laborer.
conduct, or the so-called “control test.” As a regular employee, respondent enjoys the right to
security of tenure under Article 279 of the Labor Code
In this case, Rattan Inc. denied the relationship by and may only be dismissed for a just or authorized cause,
arguing that JJ was not reported as their employee in otherwise the dismissal becomes illegal.”
SSS and his name does not appear in the payrolls and in
pay envelope records. Art. 279, Labor Code

In Tan v. Lagrama, the Court held that the fact that a Security of Tenure. — In cases of regular employment,
worker was not reported as an employee to the SSS is the employer shall not terminate the services of an
not conclusive proof of the absence of employer- employee except for a just cause or when authorized by
employee relationship. Otherwise, an employer would this Title. An employee who is unjustly dismissed from work
be rewarded for his failure or even neglect to perform his shall be entitled to reinstatement without loss of seniority
obligation. Nor does the fact that respondent’s name rights and other privileges and to his full backwages,
does not appear in the payrolls and pay envelope inclusive of allowances, and to his other benefits or their
records submitted by petitioners negate the existence monetary equivalent computed from the time his
of employer-employee relationship. For a payroll to be compensation was withheld from him up to the time of
utilized to disprove the employment of a person, it must his actual reinstatement.
contain a true and complete list of the employee.
Television and Production Exponents, Inc. v. Servana
In this case, the exhibits offered by petitioners before the January 28, 2008 G.R. No. 167648 542 SCRA 578
NLRC consisting of copies of payrolls and pay earnings
records are only for the years 1999 and 2000; they do not Facts: Television and Production Exponents (TAPE) is a
cover the entire 18-year period during which respondent domestic corporation engaged in the production of
supposedly worked for SEIRI. television programs, such as the long-running variety
program, “Eat Bulaga”. Servana had served as a security
According to the CA, it was apparent that Rattan Inc. guard for TAPE. Respondent filed a complaint for illegal
maintained a separate payroll for certain employees or dismissal and non-payment of benefits against TAPE. He
willfully retained a portion of the payroll. alleged that he was first connected with Agro-
Commercial Security Agency but was later absorbed by
As to the “control test”, the following facts indubitably TAPE as a regular company guard.
reveal that Rattan Inc. wielded control over the work On March 2, 2000, respondent received a memorandum
performance of JJ: informing him of his impending dismissal on account of
(1) They required him to work within the company TAPE’s decision to contract the services of a professional
premises; security agency. At the time of his termination,
(2) They obliged JJ to report every day of the week respondent was receiving a monthly salary P6,000.
and tasked him to usually perform the same job; Servana contended that his dismissal was undertaken
without due process and violation of existing labor laws, Control is manifested in the bundy cards submitted by
aggravated by non-payment of separation pay. He respondent in evidence. He was required to report daily
insisted that he was a regular employee having been and observe definite work hours.
engaged to perform an activity that is necessary and
desirable to TAPE’s business for 13 years. BERNARD TENAZAS v. R. VILLEGAS TAXI TRANSPORT
TAPE contended that there is no employer-employee G.R. No. 192998 02 APRIL 2014
relationship between the parties. TAPE engaged
respondent’s services, as part of the support group to FACTS:Bernard Tenazas, Jaime Francisco, and Isidro
provide security service and it was agreed that Endraca filed a complaint for illegal dismissal against R.
complainant would render his services until such time Villegas Taxi Transport, and/or Romualdo Villegas and
that respondent company shall have engaged the Andy Villegas.
services of a professional security agency. TAPE started
negotiations for the engagement of a professional PETITIONER’S CLAIM
security agency , the Sun Shield Security Agency.
TAPE averred that respondent was an independent TENAZAS - Taxi unit was sideswiped by another vehicle
contractor falling under the talent group category and (damage = P500); fired after reporting the incident, even
was working under a special arrangement which is threatened w/ physical harm if he was seen on
recognized in the industry. company premises.
FRANCISCO - Dismissed because of the unfounded
Issue: WON the Servana is an independent contractor. suspicion that he was organizing a labor union
EDRACA – Dismissed after falling short of the required
Ruling: boundary for his taxi unit; fell short because of P700 spent
TAPE failed to establish that respondent is an on an urgent repair
independent contractor.
Jurisprudence is abound woith casesn that recite the
factors to be considered in determining the existence of R. VILLEGAS TAXI’S CLAIM
employer-employee relationship, namely:
a. The selection and engagement of the employee TENAZAS- Company admits that Tenazas is an employee
Respondent was first connected with Agro-Commercial – regular driver. Tenazas was never terminated; he failed
Security Agency, which assigned him to assist TAPE in its to report backto work after being told to wait for the
live productions. When the security agency’s contract release of his taxi (overhauled due to mechanical
with RPN-9 expired, respondent was absorbed by TAPE , defects)
or in the latter’s language, “retained as talent”. Clearly, FRANCISCO - Company denies that Francisco is an
respondent was hired by TAPE. Respondent presented employee
his identification card. It has been in held that in ENDRACA - Company admits that Endraca is an
business establishment, an identification card is usually employee – spare driver . Endraca could not have been
provided not just as a security measure but to mainly terminated in March 2006because he stopped reporting
identify the holder thereof as a bona fide employee of for work in July 2003 (but willing to accommodate him
the firm who issues it. again as he was never really dismissed)
b. The payment of wages
Respondent claims to have been receiving P5,444.44 as Tenazas, Francisco, and Endraca also filed a Motion to
his monthly salary while TAPE prefers to designate such Admit Additional Evidence: (a) Joint Affidavit of the
amount as talent fees. Wages, as defined in the Labor petitioners; (b) Affidavit of Good Faith of Aloney Rivera
Code, are remuneration or earnings, however (co-driver); (c) pictures of the petitioners wearing
designated, capable of being expressed in terms of company shirts; (d) Tenazas’ Certification/Record of
money, whether fixed or ascertained on a time, task, Social Security System (SSS) contributions.
piece or commission basis, or other method of
calculating the same, which is payable by an employer LA: No illegal dismissal because no proof of an overt act
to an employee under a written or unwritten contract of of dismissal committed by R. Villegas Taxi; Francisco
employment for work done or to be done, or for service failed to prove he was an employee
rendered or to be rendered.
c. The power of dismissal NLRC: Reversed LA; the additional evidence sufficiently
The Memorandum informing respondent of the established the existence of employer-employee
discontinuance of his service proves that TAPE had the relationship and illegal dismissal (for all three)
power to dismiss respondent.
d. The employer’s power to control the employee CA: Tenazas and Endraca were indeed employees and
with respect to the means and method by which the were illegally dismissed, but Francisco failed to establish
work is to be accomplished. his relationship with the company ISSUES: WON there was
an employer-employee relationship (re: Francisco) – NO
support of this he asserted that as Unit Manager, he was
HELD: The burden of proof rests upon the party who paid an annual over-rider, a travel and entertainment
asserts the affirmative of an issue. As Francisco was allowance in addition to his overriding commissions. He
claiming tobe an employee of R. Villegas Taxi, it is was tasked with numerous administrative functions and
incumbent upon him to proffer evidence to prove the supervisory authority over Manulife’s employees. He was
existence of the relationship. required to follow at least three codes of conduct. On
the other hand, Manulife contended that what existed
There is no hard and fast rule to establish the elements of between them was a mere agency relationship.
employer-employee relationship. Any competent and
relevant evidence may be admitted, e.g., identification Decisions of the Judicial Tribunals
cards, cash vouchers, social security registration,
appointment letters or employment contracts, payrolls, LA: No employer-employee relationship existed
organization charts, personnel lists. between the parties.
NLRC: It found the existence of an employer-employee
Francisco failed to present substantial evidence to relationship. There was illegal dismissal.
establish the relationship. No documentary evidence CA: It reverted to the labor arbiter’s decision that no
submitted, like an attendance logbook, payroll, SSS employer-employee relationship existed between them.
record, or any personnel file that depicts his status as an SC: In reversing the CA ruling, it declared that an
employee. He could also have at least presented his employment relationship existed between them. First,
social security records stating his contributions, name there exists the possibility of an insurance agent
and address of employer (which Tenazas presented). becoming an employee of an insurance company if
Another taxi operator, Emmanuel Villegas, also claimed evidence shows that the company promulgated rules or
to be his employer – a fact not denied or questioned by regulations that effectively controlled or restricted an
Francisco in any of his pleadings. Petition DENIED. SC insurance agent’s choice of methods or the methods
agreed with CA’s order of reinstatement instead of themselves in selling insurance.
separation pay. (*Strained relations must be
demonstrated as a fact. In this case, no facts Second, Manulife had the power of control over Tongko,
demonstrated that the relations were so strained as to sufficient to characterize him as an employee, as shown
make reinstatement no longer a feasible option.) by the fact that he complied with 3 different codes of
conduct and that he performed administrative duties.
Also, Tongko was tasked to recruit some agents in
Tongko v. Manufacturer Life Insurance Co. (MANULIFE) addition to his other administrative functions.
Inc., et al., G.R. No 167622, January 25, 2011
Hence, a Motion for Reconsideration was filed by
Facts: Tongko was, initially an insurance agent of Manulife and was granted by the SC.
Manulife who was promoted to the role of a manager.
The contractual relationship between Tongko and Issue: Whether or not there exists an employer-
Manulife had two basic phases. The initial phase began employee relationship.
on July 1, 1977under a Career Agent’s Agreement which
regarded him as an independent contractor, not an SC Ruling: Rules regarding the desired results (e.g., the
employee. As an agent, his tasks were to canvass for required volume to continue to qualify as a company
applications for insurance products and collect money agent & legal/ ethical rules to be followed) are built-in
due to the Company. The second phase started in 1983 elements of control specific to an insurance agency and
when Tongko was named Unit Manager. In 1990, he should not and cannot be read as elements of control
became a Branch Manager. In 1996, Tongko became a that attend an employment relationship governed by
Regional Sales Manager, where he earned commissions, the Labor Code.
persistency income and management overrides. Since
the beginning, Tongko consistently declared himself self- Based on decided cases, a determination of the
employed in his income tax returns. presence of the Labor Code element of control was
made on the basis of the stipulations of the subsequent
However, in 2001, Manulife instituted manpower contracts. In this case, while Tongko was later on
development programs which directed the managers to designated unit manager in 1983, Branch Manager in
increase the number of agents to at least 1,000 strong for 1990, and Regional Sales Manager in 1996, no formal
a start. It was found that Tongko’s region was the lowest contract regarding these undertakings appears in the
performer in terms of recruiting in 2000. Subsequently, records of the case. Any such contract or agreement,
Tongko received another letter, dated December 18, had there been any, could have at the very least
2001, terminating his services. Tongko then filed an illegal provided the bases for properly ascertaining the juridical
dismissal complaint with the NLRC Arbitration Branch. He relationship established between the parties.
alleged the existence of an employment relationship. In
For this reason, we can take judicial notice that as a when it merely controls the desired results and not the
matter of Insurance Code-based business practice, an means and the manner by which agents are to conduct
agency relationship prevails in the insurance industry for their sales. The directive of De Dios to Tongko (in
the purpose of selling insurance. Significantly, evidence increasing the number of agents) was merely suggestive.
shows that Tongko’s role as an insurance agent never Hence, not indicative of control
changed during his relationship with Manulife. Tongko
essentially remained an agent, but moved up in this role
through Manulife’s recognition that he could use other Ymbong vs. ABS-CBN Broadcasting Corp., G.R. No.
agents approved by Manulife but operating under his 184885, March 7, 2012
guidance. For want of a better term, Tongko perhaps
could be labeled as a "lead agent" who guided under Facts: Petitioner Ernesto G. Ymbong started working for
his wing other Manulife agents. ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at
its regional station in Cebu as a television talent, co-
Evidence indicates that Tongko consistently clung to the anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-
view that he was an independent agent since he CBN later extended to radio when ABS-CBN Cebu
invariably declared himself a business or self-employed launched its AM station DYAB in 1995 where he worked
person in his income tax returns. The concept of estoppel as drama and voice talent, spinner, scriptwriter and
– a legal and equitable concept – necessarily must public affairs program anchor.
come into play. Tongko’s previous admissions in several
years of tax returns as an independent agent, as against Like Ymbong, Leandro Patalinghug also worked for ABS-
his belated claim that he was all along an employee, CBN Cebu. Starting 1995, he worked as talent, director
are too diametrically opposed to be simply dismissed or and scriptwriter for various radio programs aired over
ignored. DYAB.

There was, indeed, lack of evidence on record showing On January 1, 1996, the ABS-CBN Head Office in Manila
that Manulife ever exercised means-and-manner issued Policy No. HR-ER-016 or the "Policy on Employees
control, even to a limited extent, over Tongko during his Seeking Public Office." The pertinent portions read:
ascent in Manulife’s sales ladder. The reality is, prior to
the directives sent by De Dios, Manulife had practically 1.Any employee who intends to run for any public office
left Tongko alone not only in doing the business of selling position, must file his/her letter of resignation, at least
insurance, but also in guiding the agents under his wing. thirty (30) days prior to the official filing of the certificate
In addition, the mere presentation of codes or of rules of candidacy either for national or local election.
and regulations is not per se indicative of labor law
control. The codes of conduct do not intrude into the xxx xxx xxx
insurance agents’ means and manner of conducting
their sales and only control them as to the desired results. 3.Further, any employee who intends to join a political
group/party or even with no political affiliation but who
Guidelines indicative of labor law "control," based on the intends to openly and aggressively campaign for a
case of Insular Life, should not merely relate to the candidate or group of candidates (e.g., publicly
mutually desirable result intended by the contractual speaking/endorsing candidate, recruiting campaign
relationship; they must have the nature of dictating the workers, etc.) must file a request for leave of absence
means or methods to be employed in attaining the subject to management's approval. For this particular
result, or of fixing the methodology and of binding or reason, the employee should file the leave request at
restricting the party hired to the use of these means. least thirty (30) days prior to the start of the planned
leave period.
Hence, the failure of Tongko to comply with the
guidelines & directives of Manulife is recruiting more Because of the impending May 1998 elections and
agents, as a ground for termination of Tongko’s agency, based on his immediate recollection of the policy at that
is a matter that the labor tribunals cannot rule upon in time, Dante Luzon, Assistant Station Manager of DYAB
the absence of an employer-employee relationship. issued the following memorandum:
Jurisdiction over the matter belongs to the courts
applying the laws of insurance, agency and contracts. TO:ALL CONCERNED
FROM:DANTE LUZON
SC: Tongko is just an AGENT. In effect, the SC is telling DATE:MARCH 25, 1998
us that, first, there must be an evidence of a contract SUBJECT:AS STATED
that shows that the relationship has been converted
from contract of agency to that of employment, which is Please be informed that per company policy, any
absent in the case at bar. Secondly, adherence to a employee/talent who wants to run for any position in the
code of conduct is not, per se, indicative of control
coming election will have to file a leave of absence the management prerogatives. The free will of management
moment he/she files his/her certificate of candidacy. to conduct its own business affairs to achieve its purpose
cannot be denied.
The services rendered by the concerned
employee/talent to this company will then be Policy No. HR-ER-016 was not superseded by the March
temporarily suspended for the entire campaign/election 25, 1998 Memorandum
period. The CA correctly ruled that though Luzon, as Assistant
Station Manager for Radio of ABS-CBN, has policy-
After the issuance of the March 25, 1998 Memorandum, making powers in relation to his principal task of
Ymbong got in touch with Luzon. Luzon claims that administering the network's radio station in the Cebu
Ymbong approached him and told him that he would region, the exercise of such power should be in accord
leave radio for a couple of months because he will with the general rules and regulations imposed by the
campaign for the administration ticket. It was only after ABS-CBN Head Office to its employees. Clearly, the
the elections that they found out that Ymbong actually March 25, 1998 Memorandum issued by Luzon which
ran for public office himself at the eleventh hour. only requires employees to go on leave if they intend to
Ymbong, on the other hand, claims that in accordance run for any elective position is in absolute contradiction
with the March 25, 1998 Memorandum, he informed with Policy No. HR-ER-016 issued by the ABS-CBN Head
Luzon through a letter that he would take a few months Office in Manila which requires the resignation, not only
leave of absence from March 8, 1998 to May 18, 1998 the filing of a leave of absence, of any employee who
since he was running for councilor of Lapu-Lapu City. intends to run for public office. Having been issued
beyond the scope of his authority, the March 25, 1998
As regards Patalinghug, Patalinghug approached Luzon Memorandum is therefore void and did not supersede
and advised him that he will run as councilor for Naga, Policy No. HR-ER-016.
Cebu. According to Luzon, he clarified to Patalinghug
that he will be considered resigned and not just on leave Ymbong is deemed resigned when he ran for councilor.
once he files a certificate of candidacy As Policy No. HR-ER-016 is the subsisting company policy
and not Luzon's March 25, 1998 Memorandum, Ymbong
Later, Ymbong and Patalinghug both tried to come is deemed resigned when he ran for councilor.
back to ABS-CBN Cebu. According to Luzon, he Ymbong's overt act of running for councilor of Lapu-
informed them that they cannot work there anymore Lapu City is tantamount to resignation on his part. He
because of company policy. As a result, they filed as was separated from ABS-CBN not because he was
illegal dismissal suit against ABS-CBN. dismissed but because he resigned. Since there was no
termination to speak of, the requirement of due process
Issues: in dismissal cases cannot be applied to Ymbong. Thus,
ABS-CBN is not duty-bound to ask him to explain why he
(1) Whether Policy No. HR-ER-016 is valid; did not tender his resignation before he ran for public
(2) Whether the March 25, 1998 Memorandum issued by office as mandated by the subject company policy.
Luzon superseded Policy No. HR-ER-016; and In addition, we do not subscribe to Ymbong's claim that
(3) Whether Ymbong, by seeking an elective post, is he was not in a position to know which of the two
deemed to have resigned and not dismissed by ABS- issuances was correct. Ymbong most likely than not, is
CBN. fully aware that the subsisting policy is Policy No. HR-ER-
016 and not the March 25, 1998 Memorandum and it
Rulings: was for this reason that, as stated by Luzon in his Sworn
Statement, he only told the latter that he will only
Policy No. HR-ER-016 is valid. campaign for the administration ticket and not actually
We have consistently held that so long as a company's run for an elective post.
management prerogatives are exercised in good faith
for the advancement of the employer's interest and not GENERAL PRINCIPLES
for the purpose of defeating or circumventing the rights Encyclopedia Britanica vs. NLRC, 264 SCRA 4 [1996]
of the employees under special laws or under valid Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004
agreements, this Court will uphold them. In the instant Francisco vs. NLRC, 500 SCRA 690 [2006]
case, ABS-CBN validly justified the implementation of Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No.
Policy No. HR-ER-016. It is well within its rights to ensure 146881, February 15, 2007
that it maintains its objectivity and credibility and freeing Dumpit-Morillo vs. CA, G.R. No. 164652, June 8, 2007,
itself from any appearance of impartiality so that the citing 2004 Sonza
confidence of the viewing and listening public in it will Tongko v. Manufacturer Life Insurance Co. (MANULIFE)
not be in any way eroded. Even as the law is solicitous of Inc., et al., G.R. No 167622, January 25, 2011
the welfare of the employees, it must also protect the Atok Big Wedge Company vs. Gison, G.R. No. 169510,
right of an employer to exercise what are clearly August 8, 2011
Bernarte vs. Phil. Basketball Assoc., G.R. No. 192084,
September 14, 2011

TERMINATION OF EMPLOYMENT
Ymbong vs. ABS-CBN Broadcasting Corp., G.R. No.
184885, March 7, 2012

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