1.

LVN
PICTURES,
INC.,
vs.
PHILIPPINE
MUSICIANS Guild G.R. No. L-12582 January
28, 1961
Facts: The Philippine Musicians Guild filed a petition
before the CIR that sought to be certified as the sole
and exclusive bargaining agency of all musicians
working at LVN Pictures, Inc., Sampaguita Pictures, Inc.,
and Premiere Productions, Inc. The latter are
corporations, duly organized under the Philippine laws,
engaged in the making of motion pictures and in the
processing and distribution thereof. That said
companies employ musicians for the purpose of
making music recordings for title music, background
music, musical numbers, finale music and other
incidental music, without which a motion picture is
incomplete; that ninety-five (95%) percent of all the
musicians playing for the musical recordings of said
companies are members of the Guild
In their answers, LVN and Premiere denied that they
have any musicians as employees, and alleged that the
musical numbers in the filing of the companies are
furnished by independent contractors.
The lower court, however, rejected this pretense and
sustained the theory of the Guild. A reconsideration of
the order complained of having been denied by the
Court en banc, LVN Pictures, inc., and Sampaguita
Pictures, Inc., (Premiere has not appealed) filed these
petitions for review for certiorari.
Issue: WON the musicians are employees of the film
companies.
Held: Yes. To determine whether a person who
performs work for another is the latter's employee or
an independent contractor, the National Labor
Relations relies on 'the right to control' test. Under this
test an employer-employee relationship exist where
the person for whom the services are performed
reserves the right to control not only the end to be
achieved, but also the manner and means to be used
in reaching the end.
'Notwithstanding that the employees are called
independent contractors', the Board will hold them to
be employees where the extent of the employer's
control over them indicates that the relationship is in
reality one of employment.
The right of control of the film company over the
musicians is shown (1) by calling the musicians
through 'call slips' in 'the name of the company; (2) by
arranging schedules in its studio for recording sessions;
(3) by furnishing transportation and meals to
musicians; and (4) by supervising and directing in
detail, through the motion picture director, the
performance of the musicians before the camera, in
order to suit the music they are playing to the picture
which is being flashed on the screen.
Thus, in the application of Philippine statutes and
pertinent decisions of the United States Courts on the
matter to the facts established in this case, we cannot
but conclude that to effectuate the policies of the Act
and by virtue of the 'right of control' test, the members
of the Philippine Musicians Guild are employees of the
three film companies and, therefore, entitled to right of
collective bargaining under Republic Act No. 875.
In view of the fact that the three (3) film companies did
not question the union's majority, the Philippine
Musicians Guild is hereby declared as the sole
collective bargaining representative for all the
musicians employed by the film companies."

2. LEGEND HOTEL vs. REALUYO

Facts: This labor case for illegal dismissal involves a
pianist employed to perform in the restaurant of a
hotel. On August 9, 1999, respondent, whose stage
name was Joey R. Roa, filed a complaint for alleged
unfair labor practice, constructive illegal dismissal, and
the underpayment/nonpayment of his premium pay for
holidays, separation pay, service incentive leave pay,
and 13111 month pay.

Respondent averred that he had worked as a pianist at

the Legend Hotels Tanglaw Restaurant from
September 1992 with an initial rate of P400.00/night
that was given to him after each nights performance;
that his rate had increased to P750.00/night; and that
during his employment, he could not choose the time
of performance, which had been fixed from 7:00 pm to
10:00 pm for three to six times/week. He added that
the Legend Hotels restaurant manager had required
him to conform with the venues motif; that he had
been subjected to the rules on employees
representation checks and chits, a privilege granted to
other employees; that on July 9, 1999, the
management had notified him that as a cost-cutting
measure his services as a pianist would no longer be
required effective July 30, 1999; that he disputed the
excuse, insisting that Legend Hotel had been
lucratively operating as of the filing of his complaint;
and that the loss of his employment made him bring
his complaint.
LAs Decision: DISMISSED. No E-E relationship. Reason:
respondent was receiving TALENT FEE and not salary.
Also, there was absence of POWER TO CONTROL with
respect to the means and methods by which his work
was to be accomplished.
NLRCs Decision: AFFIRMED LAs decicion. CAs
Decision: SET ASIDE the decision of NLRC. Reason: the
four elements of E-E Relationship are present and well
settled is the rule that the power of control is more
decisive. As to the status of petitioner, he is a regular
employee although initially a contractual employee, by
the sheer length of service he had rendered for private
respondents, he had been converted into a regular
employee.
Issue: Whether there exists an employer-employee
relationship.
Ruling:
Employer-employee
relationship
existed
between the parties. The issue of whether or not an
employer-employee relationship existed between
petitioner and respondent is essentially a question off
act. The factors that determine the issue include who
has the power to select the employee, who pays the
employees wages, who has the power to dismiss the
employee, and who exercises control of the methods
and results by which the work of the employee is
accomplished. Although no particular form of evidence
is required to prove the existence of the relationship,
and any competent and relevant evidence to prove the
relationship may be admitted, a finding that the
relationship exists must nonetheless rest on substantial
evidence, which is that amount of relevant evidence
that a reasonable mind might accept as adequate to
justify a conclusion.
A review of the circumstances reveals that respondent
was, indeed, petitioners employee. Hewas undeniably
employed as a pianist in petitioners Madison Coffee
Shop/Tanglaw Restaurant from September 1992 until
his services were terminated on July 9, 1999.
First of all, petitioner actually wielded the power of
selection at the time it entered into the service
contract dated September 1, 1992 with respondent.
This is true, notwithstanding petitioners insistence that
respondent had only offered his services to provide live
music at petitioners Tanglaw Restaurant, and despite
petitioners position that what had really transpired
was a negotiation of his rate and time of availability.
The power of selection was firmly evidenced by, among
others, the express written recommendation dated
January 12, 1998 by Christine Velazco, petitioners
restaurant manager, for the increase of his
remuneration.
Secondly,
petitioner
argues
that
whatever
remuneration was given to respondent were only his
talent fees that were not included in the definition of
wage under the Labor Code. Respondent was
paidP400.00 per three hours of performance from 7:00
pm to 10:00 pm, three to six nights a week. Such rate
of remuneration was later increased to P750.00 upon
restaurant manager Velazcos recommendation.
There is no denying that the remuneration
denominated as talent fees was fixed on the basis of

his talent and skill and the quality of the music he

played during the hours of performance each night,
taking into account the prevailing rate for similar
talents in the entertainment industry.
Respondents remuneration, albeit denominated as
talent fees, was still considered as included in the term
wage in the sense and context of the Labor Code,
regardless of how petitioner chose to designate the
remuneration.
Thirdly, the power of the employer to control the work
of the employee is considered the most significant
determinant of the existence of an employer-employee
relationship. This is the so-called control test, and is
premised on whether the person for whom the services
are performed reserves the right to control both the
end achieved and the manner and means used to
achieve that end. A review of the records shows,
however, shows that respondent performed his work as
a pianist under petitioners supervision and control.
Specifically, petitioners control of both the end
achieved and the manner and means used to achieve
that end was demonstrated by the following, to wit:
a. He could not choose the time of his performance,
which petitioners had fixed from 7:00 pm to 10:00pm,
three to six times a week;
b. He could not choose the place of his performance;
c. The restaurants manager required him at certain
times to perform only Tagalog songs or music, orto
wear barong Tagalog to conform to the Filipiniana
motif; and
d. He was subjected to the rules on employees
representation check and chits, a privilege granted to
other employees.
Lastly, the memorandum informing respondent of the
discontinuance of his service because of the present
business or financial condition of petitioner showed
that the latter had the power to dismiss him from
employment.
CAs decision is AFFIRMED.

and
(6) Solano's work with Dy's establishment was not
continuous. ,
Court of Industrial Relations Ruling: An employeeemployer relationship was found to have existed
between Dy Keh Beng and complainants Tudla and
Solano, although Solano was admitted to have worked
on piece basis.
ISSUE: Whether there existed an employee employer
relation between petitioner Dy Keh Beng and the
respondents Solano and Tudla .
RULING: Yes. While this Court upholds the control test
under which an employer-employee relationship exists
"where the person for whom the services are
performed reserves a right to control not only the end
to be achieved but also the means to be used in
reaching such end, " it finds no merit with petitioner's
arguments as stated above. It should be borne in mind
that the control test calls merely for the existence of
the right to control the manner of doing the work, not
the actual exercise of the right. Considering the finding
by the Hearing Examiner that the establishment of Dy
Keh Beng is "engaged in the manufacture of baskets
known as kaing, it is natural to expect that those
working under Dy would have to observe, among
others, Dy's requirements of size and quality of the
kaing. Some control would necessarily be exercised by
Dy as the making of thekaing would be subject to Dy's
specifications. Parenthetically, since the work on the
baskets is done at Dy's establishments, it can be
inferred that the proprietor Dy could easily exercise
control on the men he employed.
As to the contention that Solano was not an employee
because he worked on piece basis, this Court agrees
with the Hearing Examiner that circumstances must be
construed to determine indeed if payment by the piece
is just a method of compensation and does not define
the essence of the relation. Units of time ... and units of
work are in establishments like respondent (sic) just
yardsticks whereby to determine rate of compensation,
to be applied whenever agreed upon. We cannot
construe payment by the piece where work is done in
such an establishment so as to put the worker
completely at liberty to turn him out and take in
another at pleasure.

3. G.R. No. L-32245 May 25, 1979

DY KEH BENG vs. INTERNATIONAL LABOR and
MARINE UNION OF THE PHILIPPINES, ET AL.
FACTS: Petitioner Dy Keh Beng is a proprietor of a
basket factory who was charged with unfair labor
practice. Respondents Tudla and Solano alleged that
they were terminated because of their union activities.
Petitioner Dy Keh Beng contended that the respondent
Tudla was never his employee and that Solano was
only hired on pakiaw basis.
After preliminary investigation was conducted, a case
was filed in the Court of Industrial Relations for in
behalf of the International Labor and Marine Union of
the Philippines and two of its members, Solano and
Tudla. According to the Hearing Examiner, the evidence
for the complainant Union tended to show that except
in the event of illness, Tudal and Solano's work with the
establishment was continuous although their services
were compensated on piece basis. Evidence likewise
showed that at times the establishment had eight (8)
workers and never less than five (5); including the
complainants, and that complainants used to receive ?
5.00 a day. sometimes less.
According to Dy Keh Beng, however, Solano was not his
employee for the following reasons:
(1) Solano never stayed long enought at Dy's
establishment;
(2) Solano had to leave as soon as he was through
with the
(3) order given him by Dy;
(4) When there were no orders needing his services
there was nothing for him to do;
(5) When orders came to the shop that his regular
workers could not fill it was then that Dy went to his
address in Caloocan and fetched him for these orders;

5.

Philippine

Society

for

the

Prevention

of

Cruelty to Animals v Commission on Audit

Facts: PSPCA was incorporated as a juridical entity by
virtue of Act No. 1285 by the Philippine Commission in
order to enforce laws relating to the cruelty inflicted
upon animals and for the protection of and to perform
all things which may tend to alleviate the suffering of
animals and promote their welfare.
In order to enhance its powers, PSPCA was initially
imbued with (1) power to apprehend violators of
animal welfare laws and (2) share 50% of the fines
imposed and collected through its efforts pursuant to
the violations of related laws.
However, Commonwealth Act No. 148 recalled the said
powers. President Quezon then issued Executive Order
No. 63 directing the Commission of Public Safety,
Provost Marshal General as head of the Constabulary
Division of the Philippine Army, Mayors of chartered
cities and every municipal president to detail and
organize special officers to watch, capture, and
prosecute offenders of criminal-cruelty laws.
On December 1, 2003, an audit team from the
Commission on Audit visited petitioners office to
conduct a survey. PSPCA demurred on the ground that
it was a private entity and not under the CoAs
jurisdiction, citing Sec .2(1), Art. IX of the Constitution.
Issues: WON the PSPCA is subject to CoAs Audit
Authority.

Held: No.
The charter test cannot be applied. It is predicated on
the legal regime established by the 1935 Constitution,
Sec.7, Art. XIII. Since the underpinnings of the charter
test had been introduced by the 1935 Constitution and
not earlier, the test cannot be applied to PSPCA which
was incorporated on January 19, 1905. Laws, generally,
have no retroactive effect unless the contrary is
provided. There are a few exceptions: (1) when
expressly provided; (2) remedial statutes; (3) curative
statutes; and (4) laws interpreting others.
None of the exceptions apply in the instant case.

The court takes a judicial notice that a university

controls the work of the members of its faculty; that
the university prescribes the courses or subjects that
professors teach, and when and where to teach; that
professors work is characterized by regularity and
continuity for a fixed duration; that professors are
compensated for their services by wages and salaries,
rather than profits; that professor and/or instructors
cannot substitute other to do their work without the
consent of the university; and that the professors can
be laid off if their work is found not satisfactory. All
these indicate that the university has control over their
work.

The mere fact that a corporation has been created by a

special law doesnt necessarily qualify it as a public
corporation. At the time PSPCA was formed, the
Philippine Bill of 1902 was the applicable law and no
proscription similar to the charter test can be found
therein. There was no restriction on the legislature to
create private corporations in 1903. The amendments
introduced by CA 148 made it clear that PSPCA was a
private corporation, not a government agency.

Thus, professors and/or instructors of the university are

employees and not independent contractors of the
university.

PSPCAs charter shows that it is not subject to control

or supervision by any agency of the State. Like all
private corporations, the successors of its members are
determined voluntarily and solely by the petitioner,
and may exercise powers generally accorded to private
corporations.
PSPCAs employees are registered and covered by the
SSS at the latters initiative and not through the GSIS.
The fact that a private corporation is impressed with
public interest does not make the entity a public
corporation. They may be considered quasi-public
corporations which are private corporations that render
public service, supply public wants and pursue other
exemplary objectives. The true criterion to determine
whether a corporation is public or private is found in
the totality of the relation of the corporate to the
State. It is public if it is created by the latters own
agency or instrumentality, otherwise, it is private.
6. FEATI VS BAUTISTA
FACTS: A strike was declared by the members of FEATI
University Faculty Club (PAFLU) resulting in the
disruption of classes in the University. Despite further
efforts of the officials from the Department of Labor to
effect a settlement of the differences between the
management of the University and the striking faculty
members, no satisfactory agreement was arrived at.
Later, the President of the Philippines certified to the
CIR the dispute between the management of the
University and the faculty club pursuant to the
provisions of Sec.10 of RA 875.
In connection with the above dispute, various cases
were filed with the CIR.
On the strength of the presidential certification, Judge
Bautista set the case for hearing. During the hearing,
the judge endeavored to reconcile the part and it was
agreed upon that the striking faculty members would
return to work and the University would readmit them
under a status quo arrangement.
However, the University filed a motion to dismiss the
case upon the ground that the CIR has no jurisdiction
over the case because the Industrial Peace Act is not
applicable to the University, it being an educational
institution nor to the members of the faculty club, they
being an independent contractors.
Issue: WON professor and instructors are not
independent contractors, hence er-ee relationship
exist.
Held: the contention of the university that the
professor and instructors are independent contractors,
because the University does not exercise control over
their work, is likewise UNTENABLE.

7. Associated Labor Union vs Borromeo

By. Llana Marie
FACTS: Petitioner ALU is a duly registered labor
organization and among its members are the
employees of SUGECO. ALU and SUGECO entered into a
CB contract. While negotiations for the renewal of the
contract were going on, 12 employees resigned from
ALU. ALU then requested SUGECO that those 12
employees be not allowed to report for work unless
they produced a clearance from ALU. However, this
request was turned down by SUGECO.
ALU then charged SUGECO of bargaining in bad faith
and that SUGECO campaigned for the resignation of
ALU members. ALU then served notice that unless
these unfair labor practice acts were stopped and a
CBA be entered into, ALU would declare a strike and
establish picket lines in any place where your business
may be found. SUGECO replied that with the
resignation of the 12 employees, ALU no longer
represented the majority of the SUGECO employees for
purposes of negotiation and recognition.
Thus, ALU struck and picketed SUGECOs plant in
Mandaue and thereafter picketed the house of Mrs. Lua
SUGECOs manager and the store of Cebu Home which
belongs to and is managed by Mr. Lua which deals in
general merchandise, among which are the oxygen,
acetylene and cooking gas produced by SUGECO. Cebu
Home and Mr. Lua then filed a complaint before the
lower court to restrain ALU from picketing the store and
residence of Mr, Lua. ALU then questioned the
jurisdiction of the court to hear the case on the ground
that it had grown out of a labor dispute-CIR has
jurisdiction.
Respondents argue that the issue in the lower court
does not fall within the jurisdiction of the CIR there
being no employee employer relationship, thus no
labor dispute between the ALU members and the Cebu
Home.
ISSUE: Whether or not it is necessary that the
disputants stand in the proximate relation of employer
and employee to partake the nature of a labor dispute
for the CIR to have jurisdiction
RULING: No.
The CIR is vested with the exclusive jurisdiction over
the prevention of any unfair labor practices. Moreover,
for an issue concerning terms, tenure or conditions of
employment, or concerning the association or
representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange terms or
conditions of employment to partake the nature of a
labor dispute, it is not necessary that the disputants
stand in the proximate relation of employer-employee.
Furthermore, for Sec. 9 of Republic Act No. 875,
governing the conditions under which "any restraining
order" or "temporary or permanent injunction" may
issue in any "case involving or growing out of a labor
dispute", it is dispensable that the persons involved in
the case be "employees of the same employer",
although this is the usual case. Sec. 9, likewise,
governs cases involving persons: 1) "who are engaged
in the same industry, trade, craft, or occupation"; or 2)
"who ... have direct or indirect interests therein", or 3)

"who are members of the same or an affiliated

organization of employers or employees"; or 4) "when
the case involves any conflicting or competing
interests in a "labor dispute" or "persons participating
or interested" therein". Furthermore, "a person or
association shall be held to be a person participating or
interested in a labor dispute if relief is sought against
him or it" and "he or it is engaged in the same
industry, trade, craft, or occupation in which such
dispute occurs, or has a direct or indirect interest
therein, or is a member, officer, or agent of any
association composed in whole or in part of employees
or employers engaged in such industry, trade, craft, or
occupation.
In the case at bar, Mrs. Lua, is the wife of the owner
and manager of Cebu Home, Antonio Lua; and that
Cebu Home is engaged in the marketing of SUGECO
products. It is, likewise, clear that as managing
member of the conjugal partnership between him and
his wife, Mr. Lua has an interest in the management by
Mrs. Lua of the business of SUGECO and in the success
or failure of her controversy with the ALU, considering
that the result thereof may affect the condition of said
conjugal partnership. Similarly, as a distributor of
SUGECO products, theCebu Home has, at least, an
indirect interest in the labor dispute between SUGECO
and the ALU. In other words, respondents herein have
an indirect interest in said labor dispute.
An employer may be brought into bargaining and
economic relationship with persons not in his actual
employ; such persons are given the status and rights of
employees in relation to him, in order to accord to
them the protection of the Act. Thus, the nature of a
labor dispute does not require that the disputants
should stand in the proximate relation of employer and
employee, with consequent protection of concerted
activities carried out by many persons belonging to
several employers.
7. G.R. No. L-26461
November 27, 1968
ASSOCIATED LABOR UNION vs. JUDGE JOSE C.
BORROMEO and ANTONIO LUA
BY: CRINGGY VERSION NO 2.0
FATCS: ALU is a duly registered labor organization;
among the members thereof are employees of Superior
Gas and Equipment Company.
On January 1, 1965 ALU and SUGECO entered into a
collective bargaining contract effective up to January 1,
1966. There was an ongoing negotiation for renewal of
contract
late
in
February 1966
then 12
SUGECO members resigned from ALU. Thereupon
negotiations stopped. ALU requested that 12
employees not be allowed to report to work, SUGECO
rejected the request due to irreparable injury and that
the contract lapsed. SUGECO stated that the 12
employees should rejoin ALU to resume the
negotiations. ALU wrote to SUGECO of bargaining in
bad faith. ALU struck and picketed in the SUGECO plant
in Mandaue.
SUGECO filed a case against ALU with CFI Cebu to
restrain the same from picketing in the said plant and
offices elsewhere in the Philippines. CFI Cebu issued a
preliminary injunction prayed for by SUGECO.
ALU filed charges of ULP against SUGECO with CIR, ALU
filed a motion for reconsideration on the issuance of
the injunction. CFI denied the motion. ALU filed a
petition for certiorari and prohibition against Judge
Gomez and Borromeo and SUGECO, prayed that CFI of
Cebu has no jurisdiction over the case. SC annulled
the preliminary injunction issued by CFI Cebu and
directed to dismiss the case.
The writ of injunction sought by ALU was granted May
16, 1966. ALU resumed picketing and began to picket
at the house of SUGECO's General Manager Mr. & Mrs.
Lua and Cebu Home store. Mr. Lua filed a complaint
with CFI Cebu to restrain ALU from picketing the store
and residence and recover damages. Judge Borromeo
issued an order requiring ALU to show cause order why
the writ should not be issued. ALU filed a motion to
dismiss assailed the jurisdiction of CFI Cebu to hear the
case on the ground that it has grown out from a labor
dispute. The judge denied the motion to dismiss and to
reconsider his order and dissolve the writ of injunction
of June 30 1966. ALU commenced the present action

for certiorari and prohibition with preliminary injunction

to annul the writs dated June 30 and July 22 1966 and
to restrain the lower court from hearing the case.
ISSUE:
WON
there
is
no
employer-employee
relationship and "no labor dispute" between the ALU
members and Cebu Home
HELD: NO.
To begin with, Section 5 (a) of Republic Act No.
875 vests in the CIR exclusive jurisdiction over the
prevention of any unfair labor practice. Moreover, for
an issue "concerning terms, tenure or conditions of
employment, or concerning the association or
representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange terms or
conditions of employment" to partake of the nature of
a "labor dispute", it is not necessary that "the
disputants stand in the proximate relation of employer
and employee."
Then, again, in order to apply the provisions of Sec. 9
of Republic Act No. 875, governing the conditions
under which "any restraining order" or "temporary or
permanent injunction" may issue in any "case involving
or growing out of a labor dispute", it is not
indispensable that the persons involved in the case be
"employees of the same employer", although this is the
usual case. Sec. 9, likewise, governs cases involving
persons:
1) "who are engaged in the same industry, trade, craft,
or occupation"; or
2) "who ... have direct or indirect interests therein", or
3) "who are members of the same or an affiliated
organization of employers or employees"; or
4) "when the case involves any conflicting or
competing interests in a "labor dispute" (as
hereinbefore defined) or "persons participating or
interested" therein (as hereinafter defined)".
Furthermore, "a person or association shall be held to
be a person participating or interested in a labor
dispute if relief is sought against him or it" and "he or it
is engaged in the same industry, trade, craft, or
occupation in which such dispute occurs, or has
a direct or indirect interest therein, or is a member,
officer, or agent of any association composed in whole
or in part of employees or employers engaged in such
industry, trade, craft, or occupation."
Now, then, there is no dispute regarding the existence
of a labor dispute between the ALU and SUGECO-Cebu;
that SUGECO's general manager, Mrs. Lua, is the wife
of the owner and manager of Cebu Home, Antonio Lua;
and that Cebu Home is engaged in the marketing of
SUGECO products. It is, likewise, clear that as
managing member of the conjugal partnership
between him and his wife, Mr. Lua has an interest in
the management by Mrs. Lua of the business of
SUGECO and in the success or failure of her
controversy with the ALU, considering that the result
thereof may affect the condition of said conjugal
partnership. Similarly, as a distributor of SUGECO
products, the Cebu Home has, at least, an indirect
interest in the labor dispute between SUGECO and the
ALUand in Case No. R-9221. In other words,
respondents herein have an indirect interest in said
labor dispute, for which reason, we find that Section 9
of Republic Act No. 875 squarely applies to Case No. R9414.
Besides, the ALU introduced evidence to the effect that
the SUGECO products had been brought to Cebu Home
and were being distributed in the latter, as a means to
circumvent, defeat or minimize the adverse effects of
the picketing conducted in the SUGECO plant and
offices in Mandaue and Cebu City respectively by ALU.
It is true that respondents averred that said products
were purchased by Cebu Home before the strike was
declared against SUGECO and that some of said
products were obtained from SUGECO in other parts of
the country; but, even if true, these circumstances did
not place the picketing of the Cebu Home beyond the
pale of the aforesaid Section 9 of Republic Act No. 875
because, as distributor of SUGECO products, Cebu
Home was engaged in the same trade as SUGECO.
Neither does the claim that some SUGECO products
marketed by Cebu Home had come, not from the
Mandaue plant, but from other parts of the Philippines,

detract from the applicability of said provisions,

considering that ALU had struck against SUGECO and
had announced, as early as March 1, 1966 or three
(3) days before it struck its intent to picket "any
place where your business may be found" and that
SUGECO in Cebu is a sister company of SUGECO
elsewhere in the Philippines.
Apart from the foregoing, it will be recalled that, prior
to the expiration of the collective bargaining contract
between ALU and SUGECO, negotiations had started for
the renewal of said contract; that during said
negotiations, 12 SUGECO employees resigned from
ALU, owing according to charges preferred by ALU
and confirmed by a complaint filed by a CIR prosecutor
to unfair labor practices allegedly committed by
SUGECO and its supervisors who, it was also claimed,
had induced and coerced said employees to quit the
ALU, which they did; that, thereupon, SUGECO stopped
negotiating with ALU alleging that, with the resignation
of said 12 members, ALU no longer represented a
majority of the SUGECO employees; that on March 4,
1966, ALU declared a strike and picketed the SUGECO
plant in Mandaue; that the next day, SUGECO filed
Case No. R-9221 of the CFI of Cebu, which forthwith
issued a writ of preliminary injunction restraining ALU
from picketing, not only the plant, but, also, the
SUGECO offices elsewhere in the Philippines; that said
injunction was dissolved by the Supreme Court on May
16, 1966;18 and that the premises of respondents
herein were not picketed until after our injunction was
enforced, subsequently to May 16, 1966.
8. BAUTISTA vs INCIONG
FACTS:
Petitioner Bautista was employed by ALU as 'Organizer'
in 1972.
As such he paid his monthly SSS
contributions, with the respondent as his employer. He
went on sick leave for ten (10) days and his SSS
sickness benefit application form signed by ALU's
physician was given to ALU for submission to the SSS.
When he reported back for work upon expiration of his
leave, he was informed by ALU's Area Vice-President
for Luzon of his termination on the ground of
abandonment of work.
Petitioner filed a complaint to which the Director
favored and ordered the reinstatement of petitioner
and payment of full backwages. Respondent ALU
appealed and got a favorable ruling. The Deputy
Minister found that the petitioner was merely
accomodated by the respondent union after he was
dismissed by his former employer sometime in 1972
and that his membership coverage with the SSS which
shows that respondent ALU is the one paying the
employer's share in the premiums is not conclusive
proof that respondent is the petitioner's employer
because such payments were performed by the
respondent as a favor for all those who were
performing full time union activities with it to entitle
them to SSS benefits. It further ruled that the nonexistence of an employer-employee relationship
between the parties is bolstered by the fact that
respondent ALU is not an entity for profit but a duly
registered labor union whose sole purpose is the
representation of its bona fide organization units where
it is certified as such, thus, he is not entitled to the
benefits.
ISSUE:
Whether
relationship exist

or

not

employee-

employer

RULING: YES
The mere fact that the respondent is a labor union
does not mean that it cannot be considered as an
employer of the persons who work for it. Much less
should it be exempted from the very labor laws which it
espouses as labor organization.
In determining the existence of an EE-ER relationship,
the elements that are generally considered are the
following : (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the
employee with respect to the means and methods by

which the work is to be accomplished. It is the socalled 'control test' that is the most important element.
In the case at bar, petitioner was an employee of the
respondent union as reflected in the latter's individual
payroll sheets and shown by the petitioner's
membership with the Social Security System (SSS) and
the respondent union's share of remittances in the
petitioner's favor. Even more significant, is the
respondent union's act of filing a clearance application
with the MOL to terminate the petitioner's services.
Bautista was selected and hired by the Union. He was
paid wages by the Union. ALU had the power to dismiss
him as indeed it dismissed him. And definitely, the
Union tightly controlled the work of Bautista as one of
its organizers.
9. G.R. No. 129315

October 2, 2000

OSIAS I. CORPORAL vs. NLRC

FACTS: Petitioners are employed by the New Look
Barber Shop, a single proprietorship owned and
managed by Mr. Vicente Lao. In or about January 1982,
the children of Vicente Lao organized a corporation
which was registered with the Securities and Exchange
Commission as Lao Enteng Co. Inc. with Trinidad Ong
as President of the said corporation. Upon its
incorporation, the respondent company took over the
assets, equipment, and properties of the New Look
Barber Shop and continued the business. All the
petitioners were allowed to continue working with the
new company until April 15, 1995 when respondent
Trinidad Ong informed them that the building wherein
the New Look Barber Shop was located had been sold
and that their services were no longer needed. 2
On April 28, 1995, petitioners filed with the Arbitration
Branch of the NLRC, a complaint for illegal dismissal,
illegal deduction, separation pay, non-payment of 13th
month pay, and salary differentials.
Private respondent in its position paper averred that
the petitioners were joint venture partners and were
receiving fifty percent commission of the amount
charged to customers. Thus, there was no employeremployee relationship between them and petitioners.
And assuming arguendo, that there was an employeremployee relationship, still petitioners are not entitled
to separation pay because the cessation of operations
of the barber shop was due to serious business losses.
Trinidad explained that some of the petitioners were
allowed to register with the Social Security System as
employees of Lao Enteng Company, Inc. only as an act
of accommodation. All the SSS contributions were
made by petitioners.
Labor Arbiter: Petitioners and the respondents were
engaged in a joint venture and that there existed no
employer-employee relation between them. The Labor
Arbiter also found that the barber shop was closed due
to serious business losses or financial reverses and
consequently declared that the law does not compel
the establishment to pay separation pay to whoever
were its employees.
NLRC: Affirmed the findings of the Labor Arbiter and
dismissed the complaint for want of merit. The NLRC
concluded that the petitioners were independent
contractors. The barbers maybe characterized as
independent contractors because they are under the
control of the barber shop owner only with respect to
the result of the work, but not with respect to the
details or manner of performance. The barbers are
engaged in an independent calling requiring special
skills available to the public at large.
ISSUE: Whether or not an employer-employee
relationship existed between petitioners and private
respondent Lao Enteng Company, Inc.
RULING: Yes. Records of the case show that the late
Vicente Lao engaged the services of the petitioners to
work as barbers and manicurists in the New Look
Barber Shop, then a single proprietorship owned by
him; that in January 1982, his children organized a
corporation which they registered with the Securities
and Exchange Commission as Lao Enteng Company,
Inc.; that upon its incorporation, it took over the assets,
equipment, and properties of the New Look Barber
Shop and continued the business; that the respondent
company retained the services of all the petitioners

and continuously paid their wages. Clearly, all three

elements exist in petitioners' and private respondent's
working arrangements.
Private respondent claims it had no control over
petitioners. The power to control refers to the
existence of the power and not necessarily to the
actual exercise thereof, nor is it essential for the
employer to actually supervise the performance of
duties of the employee. It is enough that the employer
has the right to wield that power. As to the "control
test", the following facts indubitably reveal that
respondent company wielded control over the work
performance of petitioners, in that: (1) they worked in
the barber shop owned and operated by the
respondents; (2) they were required to report daily and
observe definite hours of work; (3) they were not free
to accept other employment elsewhere but devoted
their full time working in the New Look Barber Shop for
all the fifteen (15) years they have worked until April
15, 1995; (4) that some have worked with respondents
as early as in the 1960's; (5) that petitioner Patricia
Nas was instructed by the respondents to watch the
other six (6) petitioners in their daily task. Certainly,
respondent company was clothed with the power to
dismiss any or all of them for just and valid cause.
Petitioners
were
unarguably
performing
work
necessary and desirable in the business of the
respondent company.
While it is no longer true that membership to SSS is
predicated on the existence of an employee-employer
relationship since the policy is now to encourage even
the self-employed dressmakers, manicurists and
jeepney drivers to become SSS members, we could not
agree with private respondents that petitioners were
registered with the Social Security System as their
employees only as an accommodation. As we have
earlier mentioned private respondent showed no proof
to their claim that petitioners were the ones who solely
paid all SSS contributions. It is unlikely that
respondents would report certain persons as their
workers, pay their SSS premium as well as their wages
if it were not true that they were indeed their
employees.
11. Locsin v PLDT
Facts: On November 1, 1990, respondent Philippine
Long Distance Telephone Company (PLDT) and the
Security and Safety Corporation of the Philippines
(SSCP) entered into a Security Service Agreement
whereby SSCP would provide army security guards to
PLDT to be assigned to its various offices. Pursuant to
such agreement, petitioners Raul Locsin and Eddie
Tomaquin, among other security guards, were posted
at PLDT office.
On August 30, 2001, respondent issued a Letter dated
August 30, 2001 terminating the Agreement effective
October 1, 2001. Despite the termination of the
Agreement, however, petitioners continued to secure
the premises of their assigned office. They were
allegedly directed to remain at their post by
representatives of respondent. In support of their
contention, petitioners provided the Labor Arbiter with
copies of petitioner Locsins pay slips for the period of
January to September 2002.
Then, on September 30, 2002, petitioners services
were terminated. Thus, petitioners filed a complaint
before the Labor Arbiter for illegal dismissal and
recovery of money claims such as overtime pay,
holiday pay, premium pay for holiday and rest day,
service incentive leave pay, Emergency Cost of Living
Allowance, and moral and exemplary damages against
PLDT.
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 PLDTs 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
employerfrom the termination of the Agreement
onwardsas 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.

RECENT CASES
JAVIER vs. FLY ACE CORPORATION
192558 February 15, 2012

G.R.

No.

Facts: Bitoy Javier filed a complaint before the NLRC

for underpayment of salaries and other labor standard
benefits. He alleged that he was an employee of Fly
Ace since September 2007, performing various tasks at
the respondents warehouse such as cleaning and
arranging the canned items before their delivery to
certain locations, except in instances when he would
be ordered to accompany the companys delivery
vehicles, as pahinante; that he reported for work from
Monday to Saturday from 7:00 oclock in the morning
to 5:00 oclock in the afternoon; that during his
employment, he was not issued an identification card
and payslips by the company; that on May 6, 2008, he
reported for work but he was no longer allowed to
enter the company premises by the security guard
upon the instruction Mr. Ong, his superior; he
approached Mr. Ong and asked why he was being
barred from entering the premises; that Ong replied by
saying, "Tanungin mo anak mo;". Thereafter, Javier was
terminated from his employment without notice; and
that he was neither given the opportunity to refute the
cause/s of his dismissal from work.
To support his allegations, Javier presented an affidavit
of one Bengie Valenzuela who alleged that Javier was a
stevedore or pahinante of Fly Ace from September
2007 to January 2008.
Fly Ace denied that Javier was their employee, and
insisted that there was no illegal dismissal. Fly Ace
submitted a copy of its agreement with Milmar Hauling
Services and copies of acknowledgment receipts
evidencing payment to Javier for his contracted
services bearing the words, "daily manpower
(pakyaw/piece
rate
pay)"
and
the
latters
signatures/initials.
Ruling of the LA: LA dismissed the complaint for lack
of merit on the ground that Javier failed to present
proof that he was a regular employee of Fly Ace.
Ruling of the NLRC: On appeal with the NLRC, Javier
was favored. It ruled that the LA skirted the argument
of Javier and immediately concluded that he was not a
regular employee simply because he failed to present
proof. It was of the view that a pakyaw-basis
arrangement did not preclude the existence of
employer-employee relationship. "Payment by result x
x x is a method of compensation and does not define
the essence of the relation.
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 cause for his termination, Fly
Ace was found to be liable for illegal dismissal of Javier
who was likewise entitled to backwages and separation
pay in lieu of reinstatement.
Issue: WON employee-employer exists.
Held: No EE-ER relationship. The Court is of the
considerable view that on Javier lies the burden to pass
the well-settled tests to determine the existence of an
employer-employee relationship, viz:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employees conduct.
Of these elements, the most important criterion is
whether the employer controls or has reserved the
right to control the employee not only as to the result
of the work but also as to the means and methods by
which the result is to be accomplished.
In this case, Javier was not able to persuade the Court
that the above elements exist in his case. He could not
submit competent proof that Fly Ace engaged his
services as a regular employee; that Fly Ace paid his
wages as an employee, or that Fly Ace could dictate

what his conduct should be while at work. In other

words, Javiers allegations did not establish that his
relationship with Fly Ace had the attributes of an
employer-employee relationship on the basis of the
above-mentioned four-fold test. Worse, Javier was not
able to refute Fly Aces assertion that it had an
agreement with a hauling company to undertake the
delivery of its goods. It was also baffling to realize that
Javier did not dispute Fly Aces denial of his services
exclusivity to the company. In short, all that Javier laid
down were bare allegations without corroborative
proof.
LIRIO vs. GENOVIA
Facts: Respondent Wilmer D. Genovia filed a
complaint against petitioner Cesar Lirio and/or Celkor
AdSonicmix Recording Studio for illegal dismissal, nonpayment of commission and award of moral and
exemplary damages.
Respondent Genovia alleged in his position
paper that on August 15, 2001, he was hired as studio
manager by petitioner Lirio, owner of Celkor Ad
Sonicmix Recording Studio (Celkor). He was employed
to manage and operate Celkor and to promote and sell
the recording studio's services to music enthusiasts
and other prospective clients. He received a monthly
salary of P7,000.00. They also agreed that he was
entitled to an additional commission of P100.00 per
hour as recording technician whenever a client uses
the studio for recording, editing or any related work. He
was made to report for work from Monday to Friday
from 9:00 a.m. to 6 p.m. On Saturdays, he was
required to work half-day only, but most of the time, he
still rendered eight hours of work or more. All the
employees of petitioner, including respondent,
rendered overtime work almost everyday, but
petitioner never kept a daily time record to avoid
paying the employees overtime pay.
He also alleged that petitioner approached him
and told him about his project to produce an album for
his daughter, Celine Mei Lirio. Petitioner asked
respondent to compose and arrange songs for Celine
and promised that he (Lirio) would draft a contract to
assure respondent of his compensation for such
services. As agreed upon, the additional services that
respondent would render included composing and
arranging musical scores only, while the technical
aspect in producing the album, such as digital editing,
mixing and sound engineering would be performed by
respondent in his capacity as studio manager for which
he was paid on a monthly basis. Petitioner instructed
respondent that his work on the album as composer
and arranger would only be done during his spare time,
since his other work as studio manager was the
priority. Respondent then started working on the
album.
After the album was completed and released, r
espondent again reminded petitioner about the
contracton his compensation as composer and
arranger of the album. Petitioner told respondent that
since he was practically a nobody and had proven
nothing yet in the music industry, respondent did not
deserve a high compensation, and he should be
thankful that he was given a job to feed his family.
Petitioner informed respondent that he was entitled
only to 20% of the net profit, and not of the gross sales
of the album, and that the salaries he received and
would continue to receive as studio manager of Celkor
would be deducted from the said 20% net profit share.
Respondent objected and insisted that he be properly
compensated. On March 14, 2002, petitioner verbally
terminated respondents services, and he was
instructed not to report for work.
Respondent asserts that he was illegally
dismissed as he was terminated without any valid
grounds, and no hearing was conducted before he was
terminated, in violation of his constitutional right to
due process. Having worked for more than six months,
he was already a regular employee. Although he was a
so called studio manager, he had no managerial
powers, but was merely an ordinary employee.
Respondents evidence consisted of the Payroll
dated July 31, 2001 to March 15, 2002, which was

certified correct by petitioner, and Petty Cash Voucher

evidencing receipt of payroll payments by respondent
from Celkor.

to use the studio equipment. In such case, petitioner

certainly had the power to check on the progress and
work of respondent.

In defense, petitioner stated in his Position

Paper that respondent was not hired as studio
manager, composer, technician or as an employee in
any other capacity of Celkor. Respondent could not
have been hired as a studio manager, since the
recording
studio
has
no
personnel
except
petitioner. According to petitioner, respondent had no
track record as a composer, and he was not known in
the field of music. Nevertheless, after some discussion,
respondent verbally agreed with petitioner to coproduce the album. Petitioner asserted that his
relationship with respondent is one of an informal
partnership under Art. 1767, CC. and that he had no
control over the time and manner by which respondent
composed or arranged the songs, except on the result
thereof. Respondent reported to the recording studio
between 10:00 a.m. and 12:00noon. Hence, petitioner
contended that no employer-employee relationship
existed between him and the respondent, and there
was no illegal dismissal to speak of.

On the other hand, petitioner failed to prove

that his relationship with respondent was one of
partnership. Such claim was not supported by any
written agreement. The Court notes that in the payroll
dated July 31, 2001 to March 15, 2002, there were
deductions from the wages of respondent for his
absence from work, which negates petitioners claim
that the wages paid were advances for respondents
work in the partnership.

LA rendered a decision,6 finding that an

employer-employee relationship existed between
petitioner and respondent, and that respondent was
illegally dismissed. The NLRC reversed and set aside
the decision of the Labor Arbiter, stating that
respondent failed to prove with substantial evidence
that he was selected and engaged by petitioner, that
petitioner had the power to dismiss him, and that they
had the power to control him not only as to the result
of his work, but also as to the means and methods of
accomplishing his work. CA reversed and set aside the
NLRCs decision and reinstated the LAs decision.
Issue: Whether respondent is an employee of the
petitioner, which in turn determines whether
respondent was illegally dismissed.
Ruling:
The Supreme Court affirmed the
assailed decision of the Court of Appeals. Before a case
for illegal dismissal can prosper, it must first be
established that an employer-employee relationship
existed between petitioner and respondent.
The elements to determine the existence of an
employment relationship are: (a) the selection and
engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the
employers power to control the employees conduct.
The most important element is the employers control
of the employees conduct, not only as to the result of
the work to be done, but also as to the means and
methods to accomplish it.
It is settled that no particular form of evidence
is required to prove the existence of an employeremployee relationship. Any competent and relevant
evidence to prove the relationship may be admitted.
In this case, the documentary evidence
presented by respondent to prove that he was an
employee of petitioner are as follows: (a) a document
denominated as "payroll" (dated July 31, 2001 to March
15, 2002) certified correct by petitioner, which showed
that respondent received a monthly salary of P7,000.00
(P3,500.00 every 15th of the month and another
P3,500.00 every 30th of the month) with the
corresponding deductions due to absences incurred by
respondent; and (2) copies of petty cash vouchers,
showing the amounts he received and signed for in the
payrolls.
The said documents showed that petitioner
hired respondent as an employee and he was paid
monthly wages of P7,000.00. Petitioner wielded the
power to dismiss as respondent stated that he was
verbally dismissed by petitioner, and respondent,
thereafter, filed an action for illegal dismissal against
petitioner. The power of control refers merely to
the existence of the power. It is not essential for the
employer to actually supervise the performance of
duties of the employee, as it is sufficient that the
former has a right to wield the power. Nevertheless,
petitioner stated in his Position Paper that it was
agreed that he would help and teach respondent how

The Court agrees with the Court of Appeals

that the evidence presented by the parties showed that
an employer-employee relationship existed between
petitioner and respondent.
In termination cases, the burden is upon the
employer to show by substantial evidence that the
termination was for lawful cause and validly made.
Article 277 (b) of the Labor Code puts the burden of
proving that the dismissal of an employee was for a
valid or authorized cause on the employer, without
distinction whether the employer admits or does not
admit the dismissal. For an employees dismissal to be
valid, (a) the dismissal must be for a valid cause, and
(b) the employee must be afforded due process.
Procedural due process requires the employer to
furnish an employee with two written notices before
the latter is dismissed:
(1) the notice to apprise the employee
of the particular acts or omissions for which his
sought, which is the equivalent of a charge;
and
(2) the notice informing the employee
of his dismissal, to be issued after the
employee
has
been
given
reasonable
opportunity to answer and to be heard on his
defense.
Petitioner failed to comply with these legal
requirements; hence, the Court of Appeals correctly
affirmed the Labor Arbiters finding that respondent
was illegally dismissed, and entitled to the payment of
back wages, and separation pay in lieu of
reinstatement.