EMPLOYER-EMPLOYEE RELATIONSHIP employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative,
rkers opportunity for profit and loss; (5) the amount of initiative, skill,
1) ANGELINA FRANCISCO vs. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 170087 August 31, 2006 YNARES-SANTIAGO, J.:
Doctrine: When the control test is not sufficient to give a complete picture of the relationship
between the parties, two-tiered test must be applied. The proper standard of economic
dependence is whether the worker is dependent on the alleged employer for his continued
employment in that line of business.
FACTS:
In 1995, petitioner was hired by Kasei Corporation during its incorporation stage. She was
designated as Accountant and Corporate Secretary and was assigned as Liaison Officer. In
1996, petitioner was designated as Acting Manager and was assigned to handle recruitment
of all employees and perform management administration functions; represent the company
in all dealings with government agencies, especially with the BIR, SSS and in the city
government of Makati; and to administer all other matters pertaining to the operation of
Kasei Restaurant which is owned and operated by Kasei Corporation. For five years, petitioner
performed the duties of Acting Manager. Her salary was P27,500.00 plus P3,000.00 housing
allowance and a 10% share in the profit of Kasei Corporation.
In January 2001, petitioner was replaced as Manager and reduced her salary by P2,500.00 a
month. On October 15, 2001, petitioner was informed that she is no longer connected with
the company.
ISSUE: WON there is an employer-employee relationship between petitioner and Kasei Corp.
SC RULING:
YES, there is an employer-employee relationship between petitioner and Kasei Corporation.
There are instances when, aside from the employers power to control the employee with
respect to the means and methods by which the work is to be accomplished, economic
realities of the employment relations help provide a comprehensive analysis of the true
classification of the individual, whether as employee, independent contractor, corporate
officer or some other capacity. The better approach would therefore be to adopt a two-tiered
test involving: (1) the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished; and (2) the underlying
economic realities of the activity or relationship.
The determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services
performed are an integral part of the employers business; (2) the extent of the workers
investment in equipment and facilities; (3) the nature and degree of control exercised by the
judgment or foresight required for the success of the claimed independent enterprise; (6)
the permanency and duration of the relationship between the worker and the employer;
and (7) the degree of dependency of the worker upon the employer for his continued
employment in that line of business. The proper standard of economic dependence is
whether the worker is dependent on the alleged employer for his continued employment in
that line of business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura, the
corporations Technical Consultant.
Under the broader economic reality test, the petitioner can likewise be said to be an
employee of respondent corporation because she had served the company for six years
before her dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th
month pay, bonuses and allowances, as well as deductions and Social Security contributions
from August 1, 1999 to December 18, 2000. It is therefore apparent that petitioner is
economically dependent on respondent corporation for her continued employment in the
latter’s line of business.
Based on the foregoing, there can be no other conclusion that petitioner is an employee of
respondent Kasei Corporation. She was selected and engaged by the company for
compensation, and is economically dependent upon respondent for her continued
employment in that line of business.
2) JOSE Y. SONZA vs. ABS-CBN BROADCASTING CORPORATION G.R. No. 138051 June 10,
2004
Doctrine: The control test is the most important test our courts apply in distinguishing an
employee from an independent contractor. This test is based on the extent of control the hirer
exercises over a worker. The greater the supervision and control the hirer exercises, the more
likely the worker is deemed an employee, and the less control the hirer exercises, the more
likely the worker is considered an independent contractor.
FACTS:
In May 1994, respondent ABS-CBN signed an Agreement with the Mel and Jay Management
and Development Corporation (MJMDC). ABS-CBN was represented by its corporate officers
while MJMDC was represented by SONZA, as President and General Manager, and Tiangco,
as EVP and Treasurer. Referred to in the Agreement as AGENT, MJMDC agreed to provide
SONZAs services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to
pay for SONZAs services a monthly talent fee of P310,000 for the first year and P317,000 for
the second and third year of the Agreement. ABS-CBN would pay the talent fees on the 10th
and 25th days of the month.
On 30 April 1996, SONZA filed a complaint against ABS-CBN before the DOLE. SONZA
complained that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay,
13th month pay, signing bonus, travel allowance and amounts due under the Employees
Stock Option Plan (ESOP). ABS-CBN filed a Motion to Dismiss on the ground that no employer-
employee relationship existed between the parties.
ISSUE: WON there is an employer-employee relationship between petitioner and ABS-CBN.
LA RULING: There is no employer-employee relationship between petitioner and ABS-CBN.
It must be noted that complainant was engaged by respondent by reason of his peculiar skills
and talent as a TV host and a radio broadcaster. Unlike an ordinary employee, he was free to
perform the services he undertook to render in accordance with his own style. The fact that
per the May 1994 Agreement complainant was accorded some benefits normally given to an
employee is inconsequential. Whatever benefits complainant enjoyed arose from specific
agreement by the parties and not by reason of employer-employee relationship. The fact that
complainant was made subject to respondents Rules and Regulations, likewise, does not
detract from the absence of employer-employee relationship.
NLRC and CA RULING: same same
SC RULING: NO, there is no employer-employee relationship between petitioner and ABS-
CBN.
Case law has consistently held that the elements of an employer-employee relationship are:
(a) the selection and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer’s power to control the employee on the means and
methods by which the work is accomplished. The last element, the so-called control test, is
the most important element. SePaDisCo
As to the selection and engagement of the employee: ABS-CBN engaged SONZAs services to
co-host its television and radio programs because of SONZAs peculiar skills, talent and
celebrity status. Independent contractors often present themselves to possess unique skills,
expertise or talent to distinguish them from ordinary employees. The specific selection and
hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by
ordinary employees, is a circumstance indicative, but not conclusive, of an independent
contractual relationship. As to payment of wages: All the talent fees and benefits paid to
SONZA were the result of negotiations that led to the Agreement. If SONZA were ABS-CBNs
employee, there would be no need for the parties to stipulate on benefits such as SSS,
Medicare, x x x and 13th month pay which the law automatically incorporates into every
employer-employee contract. Whatever benefits SONZA enjoyed arose from contract and
not because of an employer-employee relationship. As to power of dismissal: For violation
of any provision of the Agreement, either party may terminate their relationship. SONZA
failed to show that ABS-CBN could terminate his services on grounds other than breach of
contract, such as retrenchment to prevent losses as provided under labor laws. As to power
of control, which is the most important: Applying the control test to the present case, we find
that SONZA is not an employee but an independent contractor. This test is based on the
extent of control the hirer exercises over a worker. The greater the supervision and control
the hirer exercises, the more likely the worker is deemed an employee. The converse holds
true as well the less control the hirer exercises, the more likely the worker is considered an
independent contractor. ABS-CBN did not assign any other work to SONZA. How SONZA
delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs
control. SONZA did not have to render eight hours of work per day. The clear implication is
that SONZA had a free hand on what to say or discuss in his shows provided he did not attack
ABS-CBN or its interests.
3) BITOY JAVIER vs. FLY ACE CORPORATION/FLORDELYN CASTILLO G.R. No. 192558
February 15, 2012 MENDOZA, J.:
Doctrine: Whoever claims entitlement to the benefits provided by law should establish his or
her right thereto. Hence, a person who claims to be an employee must establish such claim.
FACTS: 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 company’s 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 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.
For its part, Fly Ace denied that Javier is its employee and averred that it was engaged in the
business of importation and sales of groceries. Javier was contracted by its employee, Mr.
Ong, as extra helper on a pakyaw basis. Mr. Ong contracted Javier roughly 5 to 6 times only
in a month whenever the vehicle of its contracted hauler, Milmar Hauling Services, was not
available.
ISSUE: WON the petitioner is an employee of Fly Ace Corporation.
RULING IN LA: Petitioner is not an employee of Fly Ace Corporation. It ruled that Javier has
no employee ID showing his employment with the Respondent nor any document showing
that he received the benefits accorded to regular employees of the Respondents.
Respondent Fly Ace is not engaged in trucking business but in the importation and sales of
groceries. Since there is a regular hauler to deliver its products, we give credence to
Respondents claim that complainant was contracted on pakiao basis.
RULING IN NLRC: The NLRC REVERSED the decision of the LA and 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. It is a mere method
of computing compensation, not a basis for determining the existence or absence of an
employer-employee relationship.
RULING IN CA: The CA ANNULLED the NLRC findings that Javier was indeed a former employee
of Fly Ace and reinstated the dismissal of Javier’s complaint as ordered by the LA.
SC RULING:
NO, petitioner is not an employee of Fly Ace Corporation. No particular form of evidence is
required to prove the existence of such employer-employee relationship. Any competent and
relevant evidence to prove the relationship may be admitted. The rule of thumb remains: the
onus probandi falls on petitioner to establish or substantiate such claim by the requisite
quantum of evidence. Whoever claims entitlement to the benefits provided by law should
establish his or her right thereto x x x. Sadly, Javier failed to adduce substantial evidence as
basis for the grant of relief.
In this case, the LA and the CA both concluded that Javier failed to establish his employment
with Fly Ace. By way of evidence on this point, all that Javier presented were his self-serving
statements purportedly showing his activities as an employee of Fly Ace. Clearly, Javier failed
to pass the substantiality requirement to support his claim. Hence, the Court sees no reason
to depart from the findings of the CA.
4) SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, ET AL vs. HON. JESUS G.
BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, RTC, PASIG, and SAN
MIGUEL CORP. G.R. No. 87700 June 13, 1990 MELENCIO-HERRERA, J.
Doctrine: A labor dispute can nevertheless exist regardless of whether the disputants stand
in the proximate relationship of employer and employee. The existence of a labor dispute is
not negative by the fact that the plaintiffs and defendants do not stand in the proximate
relation of employer and employee.
FACTS: Sometime in 1983 and 1984, SanMig entered into contracts for merchandising
services with Lipercon and D'Rite. These companies are independent contractors duly
licensed by the DOLE. In said contracts, it was expressly understood and agreed that the
workers employed by the contractors were to be paid by the latter and that none of them
were to be deemed employees or agents of SanMig. There was to be no employer-employee
relation between the contractors and/or its workers, on the one hand, and SanMig on the
other.
Petitioner SMCEU is the duly authorized representative of the monthly paid rank-and-file
employees of SanMig with whom the latter executed a CBA. In a letter, the Union advised
SanMig that some Lipercon and D'Rite workers had signed up for union membership and
sought the regularization of their employment with SMC. The Union alleged that this group
of employees, while appearing to be contractual workers supposedly independent
contractors, have been continuously working for SanMig for a period ranging from 6 months
to 15 years and that their work is neither casual nor seasonal as they are performing work or
activities necessary or desirable in the usual business or trade of SanMig. Thus, it was
contended that there exists a "labor-only" contracting situation. It was then demanded that
the employment status of these workers be regularized.
SMC filed a verified Complaint for Injunction and Damages before respondent Court. The
Union filed a Motion to Dismiss SanMig's Complaint on the ground of lack of jurisdiction over
the case/nature of the action, which motion was opposed by SanMig.
ISSUE: WON there the Respondent Court has jurisdiction in issuing the injunction.
RULING IN THE RTC: The respondent Court issued injunction. The absence of employer-
employee relationship negates the existence of labor dispute. Verily, this court (RTC) has
jurisdiction to take cognizance of Sanmig's grievance.
The evidence so far presented indicates that plaintiff has contracts for services with Lipercon
and D'Rite. The application and contract for employment of the defendants' witnesses are
either with Lipercon or D'Rite. What could be discerned is that there is no employer-
employee relationship between plaintiff and the contractual workers employed by Lipercon
and D'Rite. This, however, does not mean that a final determination regarding the question
of the existence of employer-employee relationship has already been made. To finally resolve
this dispute, the court must extensively consider and delve into the manner of selection and
engagement of the putative employee; the mode of payment of wages; the presence or
absence of a power of dismissal; and the Presence or absence of a power to control the
putative employee's conduct. SePaDisCo
SC RULING:
NO, the respondent Court has no jurisdiction in issuing the injunction. A "labor dispute" as
defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning
terms and conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the proximate relation of
employer and employee." A labor dispute, as defined by the law, does exist herein is evident.
Whether or not the Union demands are valid; whether or not SanMig's contracts with
Lipercon and D'Rite constitute "labor-only" contracting and, therefore, a regular employer-
employee relationship may, in fact, be said to exist; whether or not the Union can lawfully
represent the workers of Lipercon and D'Rite in their demands against SanMig in the light of
the existing CBA; whether or not the notice of strike was valid and the strike itself legal when
it was allegedly instigated to compel the employer to hire strangers outside the working unit;
— those are issues the resolution of which call for the application of labor laws, and SanMig's
causes of action in the Court below are inextricably linked with those issues. As the case is
indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. As
explicitly provided for in Article 217 of the Labor Code, prior to its amendment by R.A. No.
6715 on 21 March 1989, since the suit below was instituted on 6 March 1989, Labor Arbiters
have original and exclusive jurisdiction to hear and decide the following cases involving all
workers.
5) RAUL G. LOCSIN and EDDIE B. TOMAQUIN v. PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY G.R. No. 185251 October 2, 2009 VELASCO, JR., J.:
Doctrine: The power of control, in this case, has been explained as the “right to control not
only the end to be achieved but also the means to be used in reaching such end.” With the
conclusion that respondent directed petitioners to remain at their posts and continue with
their duties, it is clear that respondent exercised the power of control over them; thus, the
existence of an employer-employee relationship.
FACTS: Respondent PLDT and the Security and Safety Corporation of the Philippines entered
into a Security Services Agreement whereby SSCP would provide armed 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 a PLDT office.
Then respondent issued a Letter terminating the Agreement. 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
Locsin’s pay slips for the period after the said termination of Agreement.
Then, after a year, petitioners’ services were terminated. Thus, petitioners filed a complaint
before the Labor Arbiter for illegal dismissal and recovery of money claims.
ISSUE: WON there is an employer-employee relationship between the petitioners and PLDT.
RULING IN LA: 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. The Labor Arbiter held that
respondent failed to observe such due process requirements.
RULING IN NLRC: The NLRC affirmed the decision of the LA.
RULING IN CA: The CA REVERSED the decision of LA and NLRC. The CA applied the four-fold
test in order to determine the existence of an employer-employee relationship between the
parties but did not find such relationship. It determined that SSCP was not a labor-only
contractor and was an independent contractor having substantial capital to operate and
conduct its own business. The CA further bolstered its decision by citing the Agreement
whereby it was stipulated that there shall be no employer-employee relationship between
the security guards and PLDT.
SC RULING:
YES, there is employer-employee relationship between the petitioners and PLDT. 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.
Such power of control has been explained as the right to control not only the end to be
achieved but also the means to be used in reaching such end. With the conclusion that
respondent directed petitioners to remain at their posts and continue with their duties, it is
clear that respondent exercised the power of control over them; thus, the existence of an
employer-employee relationship. 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.
6) PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.) vs. SECRETARY OF DOLE G.R. No.
179652 May 8, 2009 TINGA, J.:
Doctrine: The Department of Labor and Employment is fully empowered to make a
determination as to the existence of an employer-employee relationship in the exercise of its
visitorial and enforcement power.
FACTS: Private respondent Jandeleon Juezan filed a complaint against petitioner before
(DOLE) Regional Office, for illegal deduction, nonpayment of service incentive leave, 13th
month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed
payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth. After summary
investigation, DOLE found that private respondent was an employee of petitioner,and was
entitled to his money. Bombo Radyo appealed the decision, but the DOLE dismissed the same.
CA affirmed such dismissal.
When the matter reached the SC, the CA decision was reversed and set aside. The Court
found that there was no employer-employee relationship between Bombo Radyo and
Juezan. It was held that while the DOLE may make a determination of the existence of an
employer-employee relationship, this function could not be co-extensive with the visitorial
and enforcement power provided in Art. 128(b) of the Labor Code, as
amended by RA 7730. The (NLRC) was held to be the primary agency in determining the
existence of an employer-employee relationship. From this decision, the PAO filed a Motion
for Clarification of Decision (with Leave of Court). The PAO sought to clarify as to when the
visitorial and enforcement power of the DOLE can be considered as co-extensive with the
power to determine the existence of an employer-employee relationship. The Court treated
the Motion for Clarification as a second motion for reconsideration, granting said motion and
reinstating the petition.
ISSUE: WON the DOLE has the power to determine the existence of employer-employee
relationship in its exercise of its visitorial and its enforcement power.
RULING: No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer- employee relationship. No procedure was laid down where the
DOLE would only make a preliminary finding, that the power was primarily held by the NLRC.
The law did not say that the DOLE would first seek the NLRC’s determination of the existence
of an employer-employee relationship, or that should the existence of the employer-
employee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE
must have the power to determine whether or not an employer-employee relationship exists,
and from there to decide whether or not to issue compliance orders in accordance with Art.
128(b) of the Labor Code, as amended by RA 7730.
The determination of the existence of an employer-employee relationship by the DOLE must
be respected. The expanded visitorial and enforcement power of the DOLE granted by RA
7730 would be rendered nugatory if the alleged employer could, by the simple expedient of
disputing the employer- employee relationship, force the referral of the matter to the NLRC.
The Court issued the declaration that at least a prima facie showing of the absence of an
employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely
the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if
the same does successfully refute the existence of an employer-employee relationship.
7) ERNESTO G. YMBONG vs. ABS-CBN BROADCASTING CORPORATION G.R. No. 184885
March 7, 2012 VILLARAMA, JR., J.:
Doctrine: A company is estopped from denying the existence of employer- employee
relationship after applying a company policy to all its employees including those under
talent contracts.
FACTS: Ernesto G. Ymbong worked for ABS-CBN Broadcasting Corporation (ABS-CBN at its
regional station in Cebu as a television talent which extended to radio when ABS-CBN Cebu
launched its AM station DYAB where he worked as drama and voice talent, spinner,
scriptwriter and public affairs program anchor. Leandro Patalinghug also worked for ABS-CBN
Cebu as talent, director and scriptwriter for various radio programs aired over DYAB.
ABS-CBN head office issued Policy No. HR-ER-016 (Policy on Employees Seeking Public
Office) requiring an employee (1) to resign if he intends to run for a public position (2) to file
a leave of absence if he intends to join political group/party or even with no political
affiliation but who intends to openly and aggressively campaign for a candidate or group of
candidates (e.g. publicly speaking/endorsing candidate, recruiting campaign workers, etc.)
Dante Luzon, Assistant Station Manager of DYAB issued a memorandum stating that those
who intend to run shall file a leave of absent not consonance with the Policy.
Ymbong then file a leave of absence although he ran for a public office. Patalinghug filed a
resignation. Unfortunately, both lost in the election. They then tried to go back to work with
the ABS. However, they were only allowed to wind up their programs. After such, they were
informed of their automatic termination because of the policy.
Ymbong filed complaint for illegal dismissal, in contrast contended that
• after the expiration of his leave of absence, he reported back to work as a regular talent
and in fact continued to receive his salary;
• The ground cited by ABS-CBN for his dismissal was not among those enumerated in the
Labor Code, as amended; and
• The company policy violates his constitutional right to suffrage.
In their defense, complaints arguing that there is no employer-employee relationship
between the company and Ymbong and Patalinghug. ABS-CBN contended that they are not
employees but talents as evidenced by their talent contracts.
LA RULING: There exists employer-employee relationship based on the appointment
letters/talent contracts imposed conditions in the performance of their work, specifically on
attendance and punctuality, which effectively placed them under the control of ABS-CBN.
Also, the policy was not made known to them and superseded by the memo of Luzon.
NLRC RULING: The NLRC held that ABS-CBN wielded the power of control over Ymbong and
Patalinghug thereby proving the existence of an employer-employee relationship between
them. However, the two were treated differently (1) Patalinghug was considered resigned
while (2) Ymbong was not considered resigned. In the latter, it was ruled that the
memorandum of Luzon shall prevail ever the policy under the principle of social justice.
CA RULING: The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its
employee after applying the provisions of Policy No. HR-ER-016 to him. The CA likewise held
that the subject company policy is the controlling guideline and therefore, Ymbong should be
considered resigned from ABS-CBN.
ISSUES: 1) Whether or not Ymbong and Patalinghug were employees of ABS-CBN.
2) Whether or not Ymbong was terminated.
SC RULING:
1) Yes. They were employees. The Court upheld the decision of CA as to employment issue.
2) Ymbong was not terminated. He resigned.
a) The Policy was a valid exercise of management prerogative. In the instant case, ABS-CBN
validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to
ensure that it maintains its objectivity and credibility and freeing itself from any appearance
of impartiality so that the confidence of the viewing and listening public in it will not be in
any way eroded.
b) Ymbong’s overt act of running for councilor of Lapu-Lapu City is tantamount to resignation
on his part. He was separated from ABS-CBN not because he was dismissed but because he
resigned. Since there was no termination to speak of, the requirement of due process in
dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to
explain why he did not tender his resignation before he ran for public office as mandated by
the subject company policy.
8) PROFESSIONAL SERVICES, INC. vs. COURT OF APPEALS and NATIVIDAD and ENRIQUE
AGANA G.R. No. 126297 February 11, 2008 SANDOVAL-GUTIERREZ, J.:
Doctrine: "Consultant" physicians can be considered as employee of the hospital if there is
an actual control over their selection, hiring and termination.
FACTS: Dr. Fuentes and Dr. Ampil performed and completed the hysterectomy upon
Natividad Agana who was suffering from "cancer of the sigmoid." However, the operation
appeared to be flawed. Natividad complained of excruciating pain in her anal region. She
consulted both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural
consequence of the surgical operation. She then sought treatment at the Polymedic General
Hospital wherein Dr. Ramon Gutierrez detected the presence of a foreign object in her vagina
-- a foulsmelling gauze which badly infected her vaginal vault. Two surgeries were performed
to remedy the infection.
Natividad and her husband filed with the RTC QC a complaint for damages against
Professional Service Inc (PSI) (owner of Medical City), Dr. Ampil and Dr. Fuentes. Pending the
outcome of the above case, Natividad died. She was duly substituted by her above-named
children (the Aganas).
RTC RULING: PSI, Dr. Ampil and Dr. Fuentes are severally liable.
CA RULING: The court affirmed the assailed judgment with modification in the sense that the
complaint against Dr. Fuentes was dismissed.PSI, Dr. Ampil and the Aganas filed with this
Court separate petitions for review on certiorari.
SUPREME COURT FIRST DIVISION:
The Court, through its First Division, rendered a Decision holding that PSI is jointly and
severally liable;
1. there is an employer-employee relationship between Medical City and Dr. Ampil for
purposes of apportioning responsibility in medical negligence cases;
2. PSI’s act of publicly displaying in the lobby of the Medical City the names and
specializations of its accredited physicians, including Dr. Ampil, estopped it from denying
the existence of an employer-employee relationship between them under the doctrine of
ostensible agency or agency by estoppel;
3. PSI’s failure to supervise Dr. Ampil and its resident physicians and nurses and to take an
active step in order to remedy their negligence rendered it directly liable under the doctrine
of corporate negligence.
Arguments of PSI in the MR:
1. PSI contends that there's no employer-employee relationship between it and its
consultant, Dr. Ampil. PSI stressed that the Court’s Decision in Ramos holding that "an
employer-employee relationship in effect exists between hospitals and their attending and
visiting physicians for the purpose of apportioning responsibility".
2. PSI maintains that consultants, like Dr. Ampil, are "independent contractors," not
employees of the hospital.
ISSUES:
1. Whether or not there's an employee - employer relationship for solidary liability to attach.
2. Whether or not Dr. Ampil an independent contractor-physician hence liability is personal.
SC RULING:
Yes, employer-employee relationship "in effect" exists between the Medical City and Dr.
Ampil. Consequently, both are jointly and severally liable to the Aganas.
First, hospitals exercise significant control in the hiring and firing of consultants and in the
conduct of their work within the hospital premises. The applicant for "consultant" required
to submit;
1. proof of completion of residency;
2. their educational qualifications;
3. generally, evidence of accreditation by the appropriate board (diplomate);
4. evidence of fellowship in most cases, and
5. references.
After a physician is accepted, either as a visiting or attending consultant, he is normally
required to attend clinico-pathological conferences, rounds and patient audits. In addition
to these, the physician’s performance as a specialist is generally evaluated by a peer review
committee on the basis of mortality and morbidity statistics, and feedback from patients,
nurses, interns and residents.
Hence, private hospitals hire, fire and exercise real control over their attending and visiting
"consultant" staff. While "consultants" are not, technically employees, a point which
respondent hospital asserts in denying all responsibility for the patient’s condition, the
control exercised, the hiring, and the right to terminate consultants all fulfill the important
hallmarks of an employer-employee relationship, with the exception of the payment of
wages. In assessing whether such a relationship in fact exists, the control test is determining.
Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating
responsibility in medical negligence cases, an employer-employee relationship in effect exists
between hospitals and their attending and visiting physicians.
Second, even assuming that Dr. Ampil is not an employee of Medical City, but an independent
contractor, still the said hospital is liable to the Aganas based on the "doctrine of apparent
authority." There are two factors to consider:
1. Whether the hospital acted in a manner which would lead a reasonable person to conclude
that the individual who was alleged to be negligent was an employee or agent of the hospital;
and
2. Whether the plaintiff acted in reliance upon the conduct of the hospital or its agent,
consistent with ordinary care and prudence.
In this case, PSI is estopped from passing the blame solely to Dr. Ampil. Its act of displaying
his name and those of the other physicians in the public directory at the lobby of the hospital
amounts to holding out to the public that it offers quality medical service through the listed
physicians. This justifies Atty. Agana’s belief that Dr. Ampil was a member of the hospital’s
staff. It must be stressed that under the doctrine of apparent authority, the question in every
case is whether the principal has by his voluntary act placed the agent in such a situation that
a person of ordinary prudence, conversant with business usages and the nature of the
particular business, is justified in presuming that such agent has authority to perform the
particular act in question.
9) SOUTH EAST INTERNATIONAL RATTAN INC. v. COMING G.R. No. 126297 February 11,
2008 VILLARAMA, JR., J.:
Doctrine: Payroll not conclusive proof of existence or absence of ER-EE relationship.
FACTS: Respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of
wages, non-payment of holiday pay, 13th month pay and service incentive leave pay, with
prayer for reinstatement, back wages, damages and attorney’s fees against South East
International Rattan Inc (SEIRI). He alleged that he was hired by petitioners as Sizing Machine
Operator on March 17, 1984. His work schedule is from 8:00 a.m. to 5:00 p.m. Initially, his
compensation was on "pakiao" basis but sometime in June 1984, it was fixed at P150.00 per
day which was paid weekly. In 1990, he was told not to work for two months for no reason.
After two months, he reported back to work only to be later on terminated because the
company is not doing well financially and that he would be called back to work only if they
need his services again. Respondent waited for almost a year but petitioners did not call him
back to work. Hence, he filed a complaint before the regional arbitration branch. To bolster
his claim, respondent submitted an affidavit signed by five former co-workers stating that
respondent was one of the pioneer employees who worked in SEIRI for almost twenty years.
In their defense, petitioners denied having hired respondent. They stressed that respondent
was not included in the list of employees submitted to the Social Security System (SSS).
There's also an affidavit of Comings's brother attesting that he worked for another employer.
LA RULING: Respondent is a regular employee of SEIRI and that the termination of his
employment was illegal. Labor Arbiter Carreon found that respondent’s work as sizing
machine operator is usually necessary and desirable to the rattan furniture business of
petitioners and their failure to include respondent in the employment report to SSS is not
conclusive proof that respondent is not their employee.
NLRC RULING: SET ASIDE the decision of LA ruling that, complainant failed to present a single
payslip, voucher or a copy of a company payroll showing that he rendered service during the
period indicated therein. The appeal to (NLRC)-Cebu City submitted the following additional
evidence:
(1) copies of SEIRI’s payrolls and individual pay records of employees;
(2) affidavit15 of SEIRI’s Treasurer, Angelina Agbay; and
(3) second affidavit of Vicente Coming.
CA RULING: REINSTATED the decision of LA. The CA gave more credence to the declarations
of the five former employees of petitioners that respondent was their co-worker in SEIRI. As
to the absence of respondent’s name in the payroll and SSS employment report, the CA
observed that the payrolls submitted were only from January 1, 1999 to December 29, 2000
and not the entire period of eighteen years when respondent claimed he worked for SEIRI. It
further noted that the names of the five affiants, whom petitioners admitted to be their
former employees, likewise do not appear in the aforesaid documents. According to the CA,
it is apparent that petitioners maintained a separate payroll for certain employees or
willfully retained a portion of the payroll.
As to the control test, records show that:
(1) they required him to work within the company premises;
(2) they obliged petitioner to report every day of the week and tasked him to usually perform
the same job;
(3) they enforced the observance of definite hours of work from 8 o’clock in the morning to
5 o’clock in theafternoon;
(4) the mode of payment of petitioner’s salary was under their discretion, at first paying him
on pakiao basis and thereafter, on daily basis;
(5) they implemented company rules and regulations;
(6) [Estanislao] Agbay directly paid petitioner’s salaries and controlled all aspects of his
employment and
(7) petitioner rendered work necessary and desirable in the business of the respondent
company.
ISSUE: Whether or not an employer-employee relationship exists.
SC RULING:
Yes. The Court affirmed the ruling of the CA. To ascertain the existence of an employer-
employee relationship jurisprudence has invariably adhered to the four-fold test, to wit:
(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power
of dismissal; and (4) the power to control the employee’s conduct, or the so-called "control
test." SePaDisCo
[Evidence] In resolving the issue of whether such relationship exists in a given case,
substantial evidence – that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion – is sufficient. 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.
As to the SSS or payroll list:
The Court reiterated that in Tan v. Lagrama, the fact that a worker was not reported as an
employee to the SSS is not conclusive proof of the absence of employer-employee
relationship. Otherwise, an employer would be rewarded for his failure or even neglect to
perform his obligation. For a payroll to be utilized to disprove the employment of a person,
it must contain a true and complete list of the employee. In this case, the exhibits offered by
petitioners before the NLRC consisting of copies of payrolls and pay earnings records are only
for the years 1999 and 2000; they do not cover the entire 18-year period during which
respondent supposedly worked for SEIRI.
As to the certifications issued by Mayol and Apondar asserting that respondent worked for
them and not for SEIRI:
The Court ruled that the certifications did not prove any fact that respondent was not an
employee of SEIRI. The certifications only claimed that (1) respondent worked under Mayor
on his own discretion and (2) under Apondar as his sideline but only after regular working
hours and "off and on" basis. Even assuming the truth of the foregoing statements, these do
not foreclose respondent’s regular or full-time employment with SEIRI.
As to the affidavit of former co-workers submitted by respondent:
The petitioner claimed that the affiants were employees of their suppliers Mayol and
Apondar. However, they did not submit proof that the latter were indeed independent
contractors; clearly, petitioners failed to discharge their burden of proving their own
affirmative allegation.
Hence, respondent Coming was a regular employee and unlawfully dismissed.
Decision regarding BACKWAGES and reinstatement
Respondent, whose employment was terminated without valid cause by petitioners, is
entitled to reinstatement without loss of seniority rights and other privileges and to his full
back wages, inclusive of allowances and other benefits or their monetary equivalent,
computed from the time his compensation was withheld from him up to the time of his actual
reinstatement. Where reinstatement is no longer viable as an option, back wages shall be
computed from the time of the illegal termination up to the finality of the decision.
Separation pay equivalent to one month salary for every year of service should likewise be
awarded as an alternative in case reinstatement in not possible.
10) TENAZAS ET.AL v. R. VILLEGAS TAXI TRANSPORTATION G.R. No. 192998 April 2, 2014
REYES, J.:
Doctrine: The employee must present evidence to establish the existence of employer-
employee relationship.
FACTS: Tenazas, Francisco and Edraca were complainants in a consolidated case for illegal
dismissal against R. Villegas Taxi Transport and Romualdo Villegas before the Labor Arbiter
of. In their positions papers, they alleged they were hired as taxi drivers on a boundary
system by the respondents.
1. The taxi Tenazas was driving was sideswiped by another vehicle. When he reported the
matter to the company, he was scolded by the respondents and told to leave the garage as
he was already fired.
X 2. Francisco alleged that he was terminated on suspicion that he was organising a labor
union, hence he was terminated without due process.
3. Isidro alleged that he was terminated when he fell short of the required boundary after
he brought his unit to an auto repair shop for an urgent repair. When he returned to the
garage his driver’s license was confiscated and he was no longer allowed to drive a taxi
despite his pleas.
In their defense, the company admitted Tenazas and Edraca were regular and spare drivers
respectively, but denied employing Francisco as a driver. Tenzas was never terminated by
the company. He was informed that his unit was due for overhaul and advised to wait for
further notice from the company if his unit was already fixed. Despite being informed on July
8, 2007 that his unit was ready for release, Tenazas did not return. On Edraca, the company
alleged he was a spare driver of the company from 2001, substituting whenever a driver is
not around. They could not have terminated him in 2006 since he stopped reporting for work
in 2003.
LA RULING: The LA dismissed their complaint, finding no employer-employee relationship
between them and the company. The company having denied the existence thereof, it was
incumbent upon complainants to prove the existence of the employer-employee
relationship.
NLRC RULING: On appeal to the NLRC, however, the commission, relying on the newly
discovered evidence submitted by the complainant Tenazas, ruled them illegally dismissed.
It ordered payment of their back wages from the time of dismissal, as well as payment of
separation pay and attorneys fees.
CA RULING: On petition for certiorari with the CA, the latter affirmed the NLRC judgment but
deleted the award of separation pay and ordered their reinstatement. It also deleted the
award in favour of Francisco, who, the CA averred, failed to prove that he was an employee
of the respondent. Thus, the petitioners elevated their case to the Supreme Court to review
the CA decision dismissing Francisco’s complaint and deleting the award of separation pay to
the other petitioners.
ISSUE: Whether or not employer-employee relations exist between the Jaime Francisco and
the company.
SC RULING: The petition lacks merit. Pivotal to the resolution of the instant case is the
determination of the existence of employer-employee relationship and whether there was
an illegal dismissal. Unlike the other complainant, Tenazas who submitted proof of SSS
contribution, affidavit of co-drivers and pictures wearing company shirt, Francisco failed to
present sufficient evidence to prove regular employment such as company ID, SSS
membership, withholding tax certificates or similar articles.
The Court ruled that in determining the presence or absence of an employer-employee
relationship the following requisites must be present;
(a) the selection and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer’s power to control the employee on the means and
methods by which the work is accomplished. The last element, the so-called control test, is
the most important element. There is no hard and fast rule designed to establish the
aforesaid elements. SePaDisCo. Any competent and relevant evidence to prove the
relationship may be admitted. Identification cards, cash vouchers, social security registration,
appointment letters or employment contracts, payrolls, organization charts, and personnel
lists, serve as evidence of employee status.
In this case, however, Francisco failed to present any proof substantial enough to establish
his relationship with the respondents.
• He failed to present any attendance logbook, payroll, SSS record or any personnel file that
could somehow depict his status as an employee;
• He was not issued with employment records, he could have, at least, produced his social
security records which state his contributions, name and address of his employer, as his co-
petitioner Tenazas did.
• There's no testimonial evidence showing the respondents’ exercise of control over the
means and methods by which he undertakes his work.
• The employment was being claimed by Emmanuel who executed an affidavit alleging that
Francisco was employed as a spare driver in his taxi garage, a fact that the latter failed to
deny or question in any of the pleadings attached to the records of this case.
In Opulencia Ice Plant and Storage v. NLRC, the Court emphasized, that there's no particular
form of evidence is required to prove the existence of an employer-employee relationship.
However in this case, Francisco simply relied on his allegation that he was an employee of
the company without any other evidence supporting his claim.
Hence, CA correctly ruled that Francisco could not be considered an employee of the
respondents.
WHEREFORE, in view of the foregoing disquisition, the petition for review on certiorari is
DENIED. The
Decision dated March 11, 2010 and Resolution dated June 28, 2010 of the Court of Appeals.
11) GREGORIO V. TONGKO, petitioner vs. THE MANUFACTURERS LIFE INSURANCE CO.
(PHILS.), INC. G.R. No. 167622 November 7, 2008 VELASCO, JR., J.:
Doctrines: 1. An employer-employee relationship exists where the person for whom the
services are performed reserves the right to control not only the end to be achieved but also
the means to be used in reaching such end.
2. An employer may terminate the services of an employee for just cause and this must be
supported by substantial evidence.
FACTS: Manufacturer’s Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation
engaged in life insurance business. It executed a Career Agents Agreement with Gregorio
Tongko whereby the latter agreed to be an independent contractor for the canvass of
insurance policies and other products offered by the company. Tongko was promoted to Unit
Manager in 1983 and Branch Manager in 1990. However, Tongko received a letter in 2001
from Manulife President and Chief Executive Officer, Ranato Vergel De Dios, regarding a
Metro North Sales Managers Meeting. The said letter stated that the region of Tongko is the
lowest performer in terms of recruiting and provided for measures to address such issue.
Subsequently, Tongko received another letter form De Dios terminating his Agent’s Contract
for his failure to align his directions with the Management’s avowed agency growth policy.
Tongko then filed a complaint for illegal dismissal against Manulife before the NLRC.
ISSUES
1. Whether or not an Employer-Employee relationship exist between Tongko and Manulife.
2. Whether or not Tongko was illegaly dismissed.
LA RULING: No. The LA ruled that no Employer-Employee relationship was found in applying
the four-fold test.
NLRC RULING: Yes. The NLRC ruled that an Employer-Employee relationship existed because
Manulife exercised control over Tongko as evidence by a letter of De Dios, which contained
various directives to Tongko.
The NLRC also held Manulife liable for illegal Dismissal.
CA RULING: No. The CA ruled that no Employer-Employee relationship existed because
Manulife did not exercise control over Tongko that would render the latter an employee of
the former.
SC RULING:
1. Yes. Manulife had the power of control over Tongko. Under the Agreement executed
between Tongko and Manulife in 1977, the former must comply with the following
requirements: (1) compliance with the regulations and requirements of the company; (2)
maintenance of a level of knowledge of the company’s products that is satisfactory to the
company; and (3) compliance with a quota of new businesses. Tongko was required to
comply with the different codes of conduct of Manulife and he was also tasked to perform
administrative duties that established his employment.
2. Yes. Manulife failed to cite a single iota of evidence to support its claims that there was
gross and habitual neglect of duties, inefficiency as well as willful disobedince of the lawful
order of Manulife on the part of Tongko. An employer may only terminate the services of an
employee for a just cause which must be supported by substantial evidence.
12) TELEVISION AND PRODUCTION EXPONENTS, INC. and/or ANTONIO P. TUVIERA,
petitioners, vs. ROBERTO C. SERVAÑA G.R. No. 167648 January 28, 2008 TINGA, J.:
Doctrine: There is an employer-employee relationship when the person for whom the
services are performed reserves the right to control not only the end achieved but also the
manner and means used to achieve that end.
FACTS: TAPE is a domestic corporation engaged in the production of television programs
while Antonio Tuviera serves as its president. Roberto Servaña served as security guard for
TAPE from 1987 until his services were terminated on 3 March 2000. Servaña filed a
complaint for illegal dismissal against TAPE. He alleged that he was first connected with Agro-
Commercial Security Agency but was later on absorbed by TAPE as a regular company guard.
His services were terminated on account of TAPE’s decision to contract the services of a
professional security agency. Tape, on the other hand, alleged that Servaña was an
independent contractor falling under the talent group category and was working under a
special arrangement. It alleged that it was agreed that Servaña would render his services
unitil such time that the company shall have engaged the services of a professional security
agency.
ISSUE: WON there is an Employer-Employee relationship between TAPE and Servaña?
LA RULING: Yes. The Labor Arbiter ruled that Servaña was a regular employee of Tape on
account of the nature of the work of Servaña, which is securing and maintaining order in the
studio, as necessary and desirable in the usual business of TAPE. However, the Labor Aribter
ruled the termination valid on the ground of redundancy.
NLRC RULING: No. The NLRC reversed the ruling of the Labor Arbiter on the ground security
services may not be deemed necessary and desirable in the usual business of TAPE.
CA RULING: Yes. The CA ruled that that Servaña was a regular employee considering the
nature and length of his service.
SC RULING: Yes. Jurisprudence is abound with cases that recite the factors to be considered
in determining the existence of employer-employee relationship, namely: (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 method by
which the work is to be accomplished. SePaDisCo
Servaña was hired by TAPE when the latter absorbed him upon the expiration of his security
agency contract with RPN-9. The monthly salary received by Servaña is considered wages
despite being designated as talent fees by TAPE. The Memorandum informing Servaña of
discontinuance of his services also proves that TAPE had the power to dismiss him. Control
is also manifested in the bundy cards submitted by Servaña. He was required to report daily
and observe definite work hours. He is also considered a regular employee by reason of his
5 year continuous service regardless of whether or not respondent had been performing
work that is necessary or desirable to the usual business of TAPE. Thus being a regular
employee, his services may not be terminated except for a just or authorized cause. TAPE is
liable for illegal dismissal for it failure to comply the 1month requirement for termination of
services as required by law. However, with respect to the liability of petitioner Tuviera,
president of TAPE, absent any showing that he acted with malice or bad faith in terminating
respondent, he cannot be held solidarily liable with TAPE.
13) ENCYCLOPAEDIA BRITANNICA (PHILIPPINES), INC. v. NATIONAL LABOR RELATIONS
COMMISSION, HON. LABOR ARBITER TEODORICO L. ROGELIO and BENJAMIN LIMJOCO G.R.
No. 87098 November 4, 1996 TORRES, JR., J.:
Doctrine: The mere issuance of memoranda does not establish an Employer-Employee
relationship.
FACTS: Respondent Benjami Limjoco was a Sales Division Manager of petitioner
Encyclopaedia Britannica. He was in charge of selling its products through some sales
represenatives and received commisions from the products sold by his agents. His office
expenses were deducted from his commissions and he was informed by petitioner of
appointment, promotions and transfers of employees in his district. He resigned from the
said office on 14 June 1974 to pursue his private business but on 30 October 1975, he filed a
complaint against petitioner for non-payment of separation pay and other benefits and also
illegal deduction form his sales commision.
Petitioner alleged that respondent is not its employee but an independent dealer. He did not
have any salary and his income from petitioner is depended on the volume of sales
accomplished. He also maintained his own office and his expenses are chargeable to his
commissions. Petitioner further alleges that it had no control and supervision over the
respondent.
Respondent, on the other hand, alleges that he was hired by petitioner and was assigned in
the sales department with an average of Php 4,000.00 monthly as earnings. He was under
the supervision of petitioner through the issuances of memoranda, guidelines on company
policies, instructions and other orders.
ISSUE: Whether or not there is an Employer-Employee Relationship between Encyclopaedia
Britannica and Limjoco?
LA RULING: Yes. The Labor Arbiter ruled that Limjoco was under the control of the petitioner
since he was required to make periodic reports of his sales activities to the company and all
transactions were subject to the final approval of the petitioner.
NLRC RULING: Yes. The NLRC found no evidence supporting the allegation that Limjoco was
an independent contractor or dealer. The petitioner dictated Limjoco how and where to sell
its products.
SC RULING: No. The fact that petitioner issued memoranda to Limjoco and to other division
sales managers did not prove that petitioner had actual control over them. These were
merely guidelines on company policies, which the sales managers follow and impose on
their respective agents. Independent authorized agents who did not receive regular
compensations but commissions based on the sale of products primarily conducted the sales
operation.
They also financed their own expenses and maintained their own staff.
The prices of the products may have been fixed but the independent agents still had free
rein in the means and methods for conducting the marketing operations. He was free to
conduct his work and he was free to engage in other means of livelihood. In fact, he was also
a director and later president of the Farmers Rural Bank while he was connected with the
petitioner.
14) ATOK BIG WEDGE COMPANY, INC. vs. JESUS P. GISON G.R. No. 169510 August 8, 2011
PERALTA, J.:
Doctrine: Article 280 of the Labor Code, is not the yardstick for determining the existence of
an employment relationship because it merely distinguished two kinds of employees that is
regular and casual employees.
FACTS: Atok Big Wedge Company, Inc. through it then Asst. Vice-President and Acting
Manager, Rutillo Torres engaged Jesus Gison as part-time consultant on retainer basis. He
assisted Atok with matters pertaining to the prosecution of cases against illegal surface
occupants within the area covered by the company’s mineral claims. He likewise performed
liaison work with several government agencies. He was not required to report to office on a
regular basis except when requested by the management. He received Php 3,000.00 a month
as retainer fee, which was delivered to him in his residence or in a local restaurant.
Gison requested Atok to cause his registration with the SSS considering he was getting old.
Atok, however, ignored his request, which prompted him to file a complaint against Atok
before the SSS. Afterwards, his services was terminated by Atok on the ground his services
were no longer necessary. This prompted Gison to file a complaint for illegal dismissal before
the NLRC against Atok.
ISSUE: Whether or not there is an Employer-Employee Relationship between Atok and Gison?
LA RULING: No. The Labor Arbiter ruled that there is no Employer-Employee relationship.
NLRC RULING: No. The NLRC affirmed the ruling of the Labor Arbiter.
CA RULING: Yes. The CA annulled and set aside the decision of the NLRC. The CA opined that
applying Article 280 of the Labor Code Gison is deemed a regular employee of the petitioner
after the lapse of one year from his employment.
SC RULING: No. There is the absence of the element of control on the part of Atok, which
results to the conclusion of an Employer-Employee relationship. He was not required to
report everyday during regular office hours and his monthly retainer fees were paid to him
either at his residence or a local restaurant. He was also assigned tasks to perform but Atok
did not control the manner and methods by which Gison performed these tasks.
Article 280 of the Labor, which was used by the CA to support its findings, is not applicable in
the case at bar.
The said provision merely distinguishes between two kinds of employment, i.e., regular
employees and casual employees, for the purposes of determining the right of an employee
to certain benefits. It does not apply where the existence of an employment relationship is in
dispute. Therefore, it was erroneous for the CA to rely on the said provision in determining
whether an Employer-Employee relationship exists between Atok and Gison.
15) DUMPIT-MURILLO vs. COURT OF APPEALS G.R. No. 164652 June 8, 2007 QUISUMBING,
J.:
Doctrine: The assertion that a talent contract exists does not necessarily prevent a regular
employment status.
FACTS: Associated Broadcasting Company (ABC) hired Thelma Dumpit-Murillo as a
newscaster and co-anchor for Balitang-Balita under a Talent Contract for a period of three-
months. The said contract was renewed multiple times. When the last contract expired,
Dumpit-Murillo sent a letter to Jose Javire, Vice President for News and Public Affairs of ABC,
informing the latter of her interest in renewing her contract. She sent another letter stating
that she was not able to receive any reply from her previous letter. She also stated that she
considered thefailure of a formal response on the part of the company as her constructive
dismissal. She then sent a demand letter requesting her reinstatement and payment of
unpaid wages and other benefits. ABC replied that the checks for her talent fees are being
processed but claimed that the other claims hand no basis. Dumpit-Murillo filed a complaint
against ABC for illegal dismissal before the NLRC.
ISSUES:
1. Whether or not there is an employer-employee relationship between ABC and Dumpit-
Murillo?
2. Whether or not Dumpit-Murillo is a regular employee?
LA RULING: No. The Labor Arbiter dismissed the Complaint.
NLRC RULING: Yes. The NLRC held that an employer-employee relationship existed between
Dumpit-Murillo and ABS; that the subject talent contract was void; and that she was a regular
employee illegally dismissed.
CA RULING: No. The CA reversed the decision of the NLRC. It ruled that Dumpit-Murillo was
a fixed-term
employee and not a regular employee and should not be allowed to renege from the
stipulation she had voluntarily and knowingly executed.
SC RULING:
1. Yes. The practice of having fixed-term contracts in the industry does not automatically
make all talent contracts valid and compliant with labor law. The assertion that a talent
contract exists does not necessarily prevent a regular employment status. The duties of
Dumpit-Murillo as enumerated in her employment contract indicate that ABC had control
over the work of petitioner. Aside from control, ABC also dictated the work assignments and
payment of her wages. ABC also had the power to dismiss.
2. Yes. Dumpit-Murillo’s work was necessary or desirable in the usual business or trade of
the employer, which includes its participation in the government’s news and public
information dissemination. Her work was continuous for a period of four years and her
repeated engagement under contract of hire is indicative of the necessity and desirability of
her work in ABC’s business. There is no valid fixed-term employment between Dumpit-
Murillo and ABC. Fixed-term employment will not be considered valid where, from the
circumstances, it is apparent that periods have been imposed to preclude acquisition of
tenurial security by the employee. It should satisfactorily appear that the employer and the
employee dealt with each other on more or less equal terms with no moral dominance being
exercised by the employer over the employee. Patently, Dumpit-Murillo occupied a position
of weakness vis-à-vis the employer. She was merely one of the numerous
newscasters/broadcasters of ABC and she was left with no choice but to affix her signature
of conformity on each renewal of her contract or risk the loss of her job.
16) JOSE MEL BERNARTE vs. PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EMMANUEL
M. EALA, and PERRY MARTINEZ G.R. No. 192084 September 14, 2011 CARPIO, J
FACTS: Complainants Jose Mel Bernarte and Renato Guevara were referees of the PBA. They
claim that they had been made to sign contracts on a year to year basis until 2003, when
Bernarte was made to sign a one and a half month contract for the period of July 1st to
August 5th 2003. In January 2004, Bernarte Received a letter advising him that his contract
would not be renewed citing his unsatisfactory performance on and off the court. Bernarte
was shocked, and felt that the dismissal was caused by his refusal to fix a game upon order
of Ernie De Leon.
Complainant Guevarra, a referee since 2001, was likewise no longer made to sign a contract
beginning February 2004. Complainants aver that they were employees of the PBA and were
illegally dismissed.
Respondents PBA aver that the complainants entered into contracts of retainer with the PBA
which after the lapse of their respective periods, were not renewed. Respondents argue that
complainants were not illegally dismissed because they were not employees of the PBA, that
their respective contracts were simply not renewed, and that the PBA had the prerogative of
whether or not to renew their contracts.
ISSUE: Whether or not complainants are employees of the PBA.
LA RULING: In her 31 March 2005 Decision, the Labor Arbiter declared petitioner an employee
whose dismissal by respondents was illegal. Accordingly, the Labor Arbiter ordered the
reinstatement of petitioner and the payment of backwages, moral and exemplary damages
and attorney's fees.
NLRC RULING: Affirmed the decision of the LA.
CA RULING: The Court of Appeals found petitioner 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. The Court of Appeals held:
While the NLRC agreed that the PBA has no control over the referees acts of blowing the
whistle and making calls during basketball games, it, nevertheless, theorized that the said
acts refer to the means and methods employed by the referees in officiating basketball games
for the illogical reason that said acts refer only to the referees skills. How could a skilled
referee perform his job without blowing a whistle and making calls? Worse, how can the PBA
control the performance of work of a referee without controlling his acts of blowing the
whistle and making calls?
SC RULING:
The Petition is bereft of merit. To determine the existence of an employer-employee
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 dismissal; and (d)
the employers’ power to control the employee on the means and methods by which the work
is accomplished. The so-called control test is the most important indicator of the presence or
absence of an employer-employee relationship. SePaDisCo
The contractual stipulations do not pertain to, much less dictate, how and when petitioner
will blow the whistle and make calls. On the contrary, they merely serve as rules of conduct
or guidelines in order to maintain the integrity of the professional basketball league. As
correctly observed by the Court of Appeals, how could a skilled referee perform his job
without blowing a whistle and making calls? x x x [H]ow can the PBA control the performance
of work of a referee without controlling his acts of blowing the whistle and making calls?
We agree with respondents that once in the playing court, the referees exercise their own
independent judgment, based on the rules of the game, as to when 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
the playing court. The referees are the only, absolute, and final authority on the playing court.
Respondents or any of the PBA officers cannot and do not determine which calls to make or
not to make and cannot control the referee when he blows the whistle because such
authority exclusively belongs to the referees. The very nature of petitioners job of officiating
a professional basketball game undoubtedly calls for freedom of control by respondents.
Further, unlike regular employees who ordinarily report for work eight hours per day for five
days a week, petitioner is required to report for work only when PBA games are scheduled
or three times a week at two hours per game. In addition, there are no deductions for
contributions to the Social Security System, Philhealth or Pag- Ibig, which are the usual
deductions from employees salaries. These undisputed circumstances buttress the fact that
petitioner is an independent contractor, and not an employee of respondents.
In addition, the fact that PBA repeatedly hired petitioner does not by itself prove that
petitioner is an employee of the former. For a hired party to be considered an employee, the
hiring party must have control over the means and methods by which the hired party is to
perform his work, which is absent in this case. The continuous rehiring by PBA of petitioner
simply signifies the renewal of the contract between PBA and petitioner, and highlights the
satisfactory services rendered by petitioner warranting such contract renewal. Conversely, if
PBA decides to discontinue petitioners services at the end of the term fixed in the contract,
whether for unsatisfactory services, or violation of the terms and conditions of the contract,
or for whatever other reason, the same merely results in the non-renewal of the contract, as
in the present case. The non-renewal of the contract between the parties does not constitute
illegal dismissal of petitioner by respondents.
17) ANGEL JARDIN vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and GOODMAN
TAXI (PHILJAMA INTERNATIONAL, INC.) G.R. No. 119268 February 23, 2000 QUISUMBING, J.
FACTS: Petitioners were drivers of private respondent, Philjama International Inc., a domestic
corporation engaged in the operation of "Goodman Taxi." Petitioners used to drive private
respondent's taxicabs every other day on a 24-hour work schedule under the boundary
system. Under this arrangement, the petitioners earned an average of P400.00 daily.
Nevertheless, private respondent admittedly regularly deducts from petitioners, daily
earnings the amount of P30.00 supposedly for the washing of the taxi units. Believing that
the deduction is illegal, petitioners decided to form a labor union to protect their rights and
interests.
Upon learning about the plan of petitioners, private respondent refused to let petitioners
drive their taxicabs when they reported for work on August 6, 1991, and on succeeding days.
Petitioners suspected that they were singled out because they were the leaders and active
members of the proposed union. Aggrieved, petitioners filed with the labor arbiter a
complaint against private respondent for unfair labor practice, illegal dismissal and illegal
deduction of washing fees.
ISSUE: Whether or not petitioners are employees of the respondent.
LA RULING: Dismissed the complaint for lack of merit.
NLRC RULING: At first, the NLRC reversed and set aside the judgment of the LA and declared
that petitioners are employees of private respondent, and as such, their dismissal must be
for just cause and after due process. However, after TWO motions for reconsideration, the
NLRC ruled that it lacks jurisdiction over the case as petitioners and private respondent have
NO employer employee relationship. It held that the relationship of the parties is leasehold
which is covered by the Civil Code rather than the Labor Code.
SC RULING: The petition is impressed with merit. The SC declared that the NLRC should not
have entertained the respondent's second motion for reconsideration, the same being a
prohibited pleading under the NLRC rules. As to the substantive issue, the SC ruled as follows:
In a number of cases decided by this Court, we ruled that the relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary system
is that of employer-employee and not of lessor-lessee. We explained that in the lease of
chattels, the lessor loses complete control over the chattel leased although the lessee cannot
be reckless in the use thereof, otherwise he would be responsible for the damages to the
lessor.
In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision
and control over the latter. The management of the business is in the owner's hands. The
owner as holder of the certificate of public convenience must see to it that the driver follows
the route prescribed by the franchising authority and the rules promulgated as regards its
operation. Now, the fact that the drivers do not receive fixed wages but get only that in excess
of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. We have applied by analogy
the abovestated doctrine to the relationships between bus owner/operator and bus
conductor, auto-calesa owner/operator and driver, and recently between taxi
owners/operators and taxi drivers. Hence, petitioners are undoubtedly employees of private
respondent because as taxi drivers they perform activities which are usually necessary or
desirable in the usual business or trade of their employer.
18) PROFESSIONAL SERVICES v. CA same same
19) LOCSIN v. PLDT same same
20) YMBONG v. ABS-CBN same same
21) CHAVEZ v. NLRC G.R. No. 146530 January 17, 2005 CALLEJO, SR., J.
Doctrine: Of the four elements of the employer-employee relationship, the control test is the
most important.
FACTS: The respondent company, Supreme Packaging, Inc., is in the business of
manufacturing cartons and other packaging materials for export and distribution. On 1984,
it engaged the services of the petitioner, Pedro Chavez, as truck driver and as such, he was
tasked to deliver the respondent company’s products from its factory to its various
customers, mostly in Metro Manila.
Sometime in 1992, Chavez asked respondent company’s plant manager his desire to avail
himself of the benefits that regular employees were receiving such as overtime pay, nightshift
differential pay, and 13th month pay, among others but the same was never given.
On 1995, Chavez filed a complaint for regularization with the Regional Arbitration Branch 3
but before the case could be heard, respondent company terminated the services of Chavez
prompting Chavez to amend the complaint against the respondents for illegal dismissal,
unfair labor practice and non-payment of overtime pay, nightshift differential pay, 13th
month pay, among others.
The respondents, for their part, denied the existence of an employer-employee relationship
between the respondent company and the petitioner. They averred that the petitioner was
an independent contractor as evidenced by the contract of service which he and the
respondent company entered into.
ISSUE: WON Chavez was respondent company’s employee or was a private contractor.
LA RULING: The LA found Chavez to be respondent company’s employee thus finding
respondent guilty of illegal dismissal. It held that the petitioner was a regular employee of
the respondent company as he was performing a service that was necessary and desirable to
the latters business. Moreover, it was noted that the petitioner had discharged his duties as
truck driver for the respondent company for a continuous and uninterrupted period of more
than ten years.
NLRC RULING: The NLRC initially affirmed the LA’s decision but later on reversed it decision
declaring that no employer-employee relationship existed. The NLRC stated that the
respondents did not exercise control over the means and methods by which the petitioner
accomplished his delivery services. It upheld the validity of the
contract of service as it pointed out that said contract was silent as to the time by which the
petitioner was to make the deliveries and that the petitioner could hire his own helpers
whose wages would be paid from his own account.
CA RULING: Initially, the CA reversed the NLRC’s decision ruling in favor of Chavez but later
reconsidered the same ruling in favor of respondent company. In reconsidering its decision,
the CA explained that the extent of control exercised by the respondents over the petitioner
was only with respect to the result but not to the means and methods used by him. The CA
cited the following circumstances: (1) the respondents had no say on how the goods were to
be delivered to the customers; (2) the petitioner had the right to employ workers who would
be under his direct control; and (3) the petitioner had no working time.
The fact that the petitioner had been with the respondent company for more than ten years
was, according to the CA, of no moment because his status was determined not by the length
of service but by the contract of service. This contract, not being contrary to morals, good
customs, public order or public policy, should be given the force and effect of law as between
the respondent company and the petitioner. Consequently, the CA reinstated the July 10,
1998 Decision of the NLRC dismissing the petitioners complaint for illegal dismissal.
SC RULING: The court held that an employer-employee relationship existed and that Chavez
was not a mere private contractor.
Applying the four-fold test, the SC found: SePaDisCo
First. Undeniably, it was the respondents who engaged the services of the petitioner without
the intervention of a third party.
Second. That the petitioner was paid on a per trip basis is not significant. This is merely a
method of computing compensation and not a basis for determining the existence or
absence of employeremployee relationship. One may be paid on the basis of results or time
expended on the work, and may or may not acquire an employment status, depending on
whether the elements of an employeremployee relationship are present or not. In this case,
it cannot be gainsaid that the petitioner received compensation from the respondent
company for the services that he rendered to the latter.
Third. The respondents power to dismiss the petitioner was inherent in the fact that they
engaged the services of the petitioner as truck driver. They exercised this power by
terminating the petitioners services albeit in the guise of severance of contractual relation
due allegedly to the latters breach of his contractual obligation.
Fourth. As earlier opined, of the four elements of the employer-employee relationship, the
control test is the most important. Compared to an employee, an independent contractor is
one who carries on a distinct and independent business and undertakes to perform the job,
work, or service on its own account and under its own responsibility according to its own
manner and method, free from the control and direction of the principal in all matters
connected with the performance of the work except as to the results thereof. Hence, while
an independent contractor enjoys independence and freedom from the control and
supervision of his principal, an employee is subject to the employers power to control the
means and methods by which the employees work is to be performed and accomplished.
22) COCA-COLA BOTTLERS PHILS., INC. v. CLIMACO G.R. No. 146881 February 5, 2007
AZCUNA, J.
Doctrine: The Court, in determining the existence of an employer-employee relationship, has
invariably adhered to the four-fold test: (1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct, or the so-called “control test”, considered to be the most important
element. The issuance by the principal of guidelines does not establish control by principal.
FACTS: Dr. Climaco is a medical doctor who was hired by the petitioner by virtue of retainer
agreement. The agreement states that there is no employer-employee relationship between
the parties. The retainer agreement was renewed annually. The last one expired on Dec. 31,
1993. Despite of the non-renewal of the agreement, respondent continued to perform his
functions as company doctor until he received a letter in March 1995 concluding their
retainer agreement.
Respondent filed a complaint before the NLRC seeking recognition as a regular employee of
the petitioner company and prayed for the payment of all benefits of a regular employee.
ISSUE: Whether or not an employer-employee relationship existed between petitioner Coca-
Cola Bottlers and respondent Dr. Climaco.
LA AND NLRC RULING: The Labor Arbiter and the NLRC found that the company lacked the
power of control over Dr. Climaco, therefore no employer-employee relationship existed.
CA RULING: Court of Appeals ruled that there existed an employer-employee relationship. It
held that Coca- Cola’s power to control petitioner is present because the particular objectives
and activities to be observed and accomplished by the latter are fixed and set under the
Comprehensive Medical Plan which was made an integral part of the retainer agreement.
Moreover, the times for accomplishing these objectives and activities are likewise controlled
and determined by the company. Petitioner is subject to definite hours of work, and due to
this, he performs his duties to Coca-Cola not at his own pleasure but according to the
schedule dictated by the company.”
The CA added that Dr. Climaco should be classified as a regular employee having rendered 6
years of service as plant physician by virtue of several renewed retainer agreements.
SC RULING: The court held no, upholding the decisions of both the LA and the NLRC. The
Court, in determining the existence of an employer-employee relationship, has invariably
adhered to the four-fold test: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s
conduct, or the so-called "control test," considered to be the most important element.
The Labor Arbiter and the NLRC correctly found that Coca Cola lacked the power of control
over the performance by respondent of his duties. The petitioner company, through the
Comprehensive Medical Plan, provided guidelines merely to ensure that the end result was
achieved, but did not control the means and methods by which respondent performed his
assigned tasks. The NLRC affirmed the findings of the Labor Arbiter and stated that it is
precisely because the company lacks the power of control that the contract provides that
respondent shall be directly responsible to the employee concerned and their dependents
for any injury, harm or damage caused through professional negligence, incompetence or
other valid causes of action.
In addition, the Court finds that the schedule of work and the requirement to be on call for
emergency cases do not amount to such control, but are necessary incidents to the
Retainership Agreement.
The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the
employment of respondent as a retained physician of petitioner company and upholds the
validity of the Retainership Agreement which clearly stated that no employer-employee
relationship existed between the parties.
23) GABRIEL v. BRILON G.R. No. 146989 February 7, 2007 AZCUNA, J.:
Doctrine: The relationship between jeepney owners/operators and jeepney drivers under
the boundary system is that of employer-employee and not of lessor-lessee because in the
lease of chattels the lessor loses complete control over the chattel leased although the lessee
cannot be reckless in the use thereof, otherwise he would be responsible for the damages to
the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercises
supervision and control over the latter.
FACTS: Petitioner, represented by his surviving spouse, Flordeliza V. Gabriel, was the owner-
operator of a public transport business, "Gabriel Jeepney," with a fleet of 54 jeepneys plying
the Baclaran-Divisoria-Tondo route. Petitioner had a pool of drivers, which included
respondents, operating under a "boundary system" of P400 per day.
Respondents alleged that they were regular drivers of Gabriel Jeepney under a boundary
system of P400 per day, plying Baclaran to Divisoria via Tondo, and vice versa. They added
that despite the fact that there is no law providing that the operator can require the drivers
to pay police protection, deposit, washing, and garage fees, they were forced to pay
additional P55.00 per day for the following: a) P20.00 police protection; b) P20.00 washing;
c) P10.00 deposit; and [d)] P5.00 garage fees. Respondents further alleged that on April
1995, petitioner told them not to drive anymore, and when they went to the garage to
report for work the next day, they were not given a unit to drive.
Based on the foregoing, respondents filed an action for illegal dismissal, illegal deductions,
and separation pay against petitioner Gabriel with the NLRC.
ISSUE: WON an employer-employee relationship existed between Gabriel and its jeepney
drivers considering that the latter worked for the former under a boundary system.
LA RULING: The Labor Arbiter ruled in favor of the respondents-jeepney drivers declaring the
illegality of respondent’s dismissal and ordered Melencio Gabriel to pay the respondents the
sum of PHP1,034,000 representing respondents’ backwages and separation pay.
NLRC RULING: The NLRC Division reversed and set aside the LA’s decision for lack of
employer-employee relationship.
CA RULING: The CA reversed the NLRC’s decision and held that an employer-employee
relationship existed between Gabriel and the respondent-jeepney drivers. The CA iterated
that the NLRC’s decision is egregiously wrong insofar as it was anchored on the absence of an
employer-employee relationship. Well-settled is the rule that the boundary system used in
jeepney and (taxi) operations presupposes an employer-employee relationship (National
Labor Union v. Dinglasan, 98 Phil. 649)
SC RULING: In the case of jeepney owners/operators and jeepney drivers, the former
exercises supervision and control over the latter. The fact that the drivers do not receive
fixed wages but get only that in excess of the so-called "boundary" that they pay to the
owner/operator is not sufficient to withdraw the relationship between them from that of
employer and employee. Thus, private respondents were employees … because they had
been engaged to perform activities which were usually necessary or desirable in the usual
business or trade of the employer. The Court also agrees with the labor arbiter and the CA
that respondents were illegally dismissed by petitioner. Respondents were not accorded
due process. Moreover, petitioner failed to show that the cause for termination falls under
any of the grounds enumerated in Article 282 of the Labor Code. Consequently, respondents
are entitled to reinstatement without loss of seniority rights and other privileges and to their
full backwages computed from the date of dismissal up to the time of their actual
reinstatement in accordance with Article 279 of the Labor Code.
The SC also awarded reinstatement if favor of the respondents ruling that Reinstatement is
obtainable in this case because it has not been shown that there is an ensuing "strained
relations" between petitioner and respondents. This is pursuant to the principle laid down in
Globe-Mackay Cable and Radio Corporation v. NLRC as quoted earlier in the CA decision.
24) FELIX VS. BUENSANEDA G.R. No. 109704 January 17, 1995 KAPUNAN, J.:
Doctrine: A residency or resident physician position in a medical specialty is never a
permanent one. Residency connotes training and temporary status. It is the step taken by a
physician right after post-graduate internship (and after hurdling the Medical Licensure
Examinations) prior to his recognition as a specialist or sub-specialist in a given field.
FACTS: Petitioner Dr. Alfredo Felix, after passing the Physician's Licensure Examinations given
by the Professional Regulation Commission in June of 1979, joined the National Center for
Mental Health (then the National Mental Hospital) on May 26, 1980 as a Resident Physician.
He was later on promoted to the position of Senior Resident Physician in a temporary
capacity immediately after he and other employees of the NCMH allegedly tendered their
courtesy resignations to the Secretary of Health on January 1983 pursuant to a reorganization
act, EO 119. He was again promoted to the position of Medical Specialist I (Temporary
Status), which position was renewed the following year on August 1988.
In the same year, 1988, the DOH subsequently issued DO 347 which required board
certification as a prerequisite for renewal of specialist positions in various medical centers,
hospitals and agencies of the said department. Petitioner was one of the hundreds of
government medical specialist who was subjected to such certification requirement for them
to enable to continue to work in their present positions.
On 1991, after reviewing petitioner's service record and performance, the Medical
Credentials Committee of the National Center for Mental Health recommended non-renewal
of his appointment as Medical Specialist I. He was, however, allowed to continue in the
service, and receive his salary, allowances and other benefits even after being informed of
the termination of his appointment. A subsequent meeting took place and discussed the
Dr. Felix’s status. Dr. Felix’s immediate supervisor, pointed out his poor performance,
frequent tardiness and inflexibility as among the factors responsible for the
recommendation not to renew his appointment. With one exception, other department
heads present in the meeting expressed the same opinion, and the overwhelming concensus
was for non-renewal.
After having been issued a memorandum ordering Dr. Felix to vacate his cottage, he filed a
petition with the Merit System Protection Board (MSPB) complaining about the alleged
harassment by respondents and questioning the non-renewal of his appointment.
MSPB RULING: The MPSB dismissed Dr. Felix’s complaint for lack of merit finding that as an
apparent incident of the power to appoint, the renewal of a temporary appointment upon or
after its expiration is a matter largely addressed to the sound discretion of the appointing
authority. Complainant therefore, has no basis in law to assail the non-renewal of his expired
temporary appointment much less invoke the aid of this Board cannot substitute its judgment
to that of the appointing authority nor direct the latter to issue an appointment in the
complainant's favor. Dr. Felix then appealed to the Civil Service Commission.
CSC DECISION: The CSC dismissed the appeal and denied Dr. Felix’s motion for
reconsideration.
ISSUE: Whether or not Dr. Alfredo Felix’s dismissal was illegal and violative of the
constitutional provision on security of tenure allegedly because his removal was made
pursuant to an invalid reorganization.
SC DECISION: The court held no. The court held that the patent absurdity of petitioner's
posture is readily obvious. Petitioner's insistence on being reverted back to the status quo
prior to the reorganizations made pursuant to EO 119 would therefore be akin to a college
student asking to be sent back to high school and staying there. From the position of senior
resident physician, which he held at the time of the government reorganization, the next
logical step in the stepladder process was obviously his promotion to the rank of Medical
Specialist I, a position which he apparently accepted not only because of the increase in salary
and rank but because of the prestige and status which the promotion conferred upon him in
the medical community. Such status, however, clearly carried with it certain professional
responsibilities including the responsibility of keeping up with the minimum requirements of
specialty rank, the responsibility of keeping abreast with current knowledge in his specialty
rank, the responsibility of completing board certification requirements within a reasonable
period of time. The evaluation made by the petitioner's peers and superiors clearly showed
that he was deficient in a lot of areas, in addition to the fact that at the time of his non-
renewal, he was not even board certified.
The court also took notice of the fact that petitioner made no attempt to oppose earlier
renewals of his temporary Specialist I contracts, clearly demonstrating his acquiescence to
— if not his unqualified acceptance of the promotion (albeit of a temporary nature) made in
1988. Whatever objections petitioner had against the earlier change from the status of
permanent senior resident physician to temporary senior physician were neither pursued nor
mentioned at or after his designation as Medical Specialist I (Temporary).
The court ruled then that he is therefore estopped from insisting upon a right or claim which
he had plainly abandoned when he, from all indications, enthusiastically accepted the
promotion. His negligence to assert his claim within a reasonable time, coupled with his
failure to repudiate his promotion to a temporary position, warrants a presumption, in the
words of this Court in Tijam vs. Sibonghanoy, that he "either abandoned (his claim) or
declined to assert it."
25) AUTO BUS TRANSPORT SYSTEM, INC. VS. BAUTISTA G.R. No. 156367 May 16, 2005
CHICO-NAZARIO, J.:
Doctrine: The term “field personnel” is not merely concerned with the location where the
employee regularly performs his duties but also with the fact that the employee’s
performance is unsupervised by the employer. Thus, in order to conclude whether an
employee is a field employee, it is also necessary to ascertain if actual hours of work in the
field can be determined with reasonable certainty by the employer.
FACTS: Respondent Antonio Bautista was employed with petitioner Auto Bus Transport
System, Inc. since May 24, 1995 as a driver-conductor of the latter’s bus. Bautista was paid
on commission basis per travel on a twice a month basis. On January 3, 2000, the bus driven
by Bautista accidentally bumped another bus owned by the respondent. As a result, Auto
Bus did not allow Bautista to work until he paid the cost of the repair of the damaged bus.
Bautista failed to pay and after given the opportunity to explain his side, Auto Bus sent him a
letter for termination. Bautista then instituted a Complaint for Illegal Dismissal with Money
Claims for nonpayment of 13th month pay and service incentive leave pay (SILP) against
Auto Bus.
ISSUE: Whether or not Antonio Bautista is considered a field personnel thus determinative of
his service incentive leave pay entitlement.
LA RULING: Labor Arbiter Tabingan decided on the case in favor of Auto Bus, dimissing the
Complaint of Bautista. However, the LA ordered Auto Bus to pay Bautista his 13th month pay
from the date of his hiring to the date of his dismissal and his SILP for all the years he has
been in service for the former.
NLRC RULING: The NLRC affirmed with modification the LA’s decision. It held that Bautista,
being an employee paid on commission basis, was not entitled for 13th month pay in
accordance with Section 3 of the Rules and Regulations Implementing PD No. 851, leaving
Bautista with a claim for his SILP.
The NLRC also denied petitioners motion for reconsideration in which petitioner denied their
liability to pay Bautista of his SILP contending that that Bautista, being a “field personnel”,
was an exception to the rule that employees are entitled to SILP. As a legal basis, petitioner
cited Section 1(d), Rule V, Book 3 of the Implementing Rules and Regulations of the Labor
Code which delimits the grant of the SIL, excluding among others “field personnel and other
employees whose performance is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis, or those who are paid in a fixed
amount for performing work irrespective of the time consumed in the performance thereof”.
CA RULING: The CA affirmed the NLRC’s decision.
SC RULING: The Court held no. According to Article 82 of the Labor Code, “field personnel”
shall refer to non-agricultural employees who regularly perform their duties away from the
principal place of business or branch office of the employer and whose actual hours of work
in the field cannot be determined with reasonable certainty. The term “field personnel” is
not merely concerned with the location where the employee regularly performs his duties
but also with the fact that the employee’s performance is unsupervised by the employer.
Thus, in order to conclude whether an employee is a field employee, it is also necessary to
ascertain if actual hours of work in the field can be determined with reasonable certainty by
the employer.
In the case of Bautista, it was observed in the facts found by the LA that he must be at a
specific place in a specified time to be able to observe prompt departure and arrival from his
point of origin to his point of destination. In each and every depot, there is always a
dispatcher whose function is to see to it that Bautista’s bus and its crew leave the premises
at specific time and arrive at the estimated proper time. Therefore, Bautista was under
constant supervision while in the performance of his work. In conclusion, he was not a field
personnel but a regular employee who performs tasks usually necessary and desirable to the
usual trade of Auto Bus. Thus, being a regular employee, he has the right to claim service
incentive leave pay under Article 95 of the Labor Code.
26) ARIEL L. DAVID, doing business under the name and style "YIELS HOG DEALER vs. JOHN
G. MACASIO G.R. No. 195466 July 2, 2014 BRION, J.:
Doctrine: Engagement in a “pakyaw” or task basis does not negate the existence of
employer-employee relationship.
FACTS: Macasio filed a complaint against David, doing business under the name and style
“Yiels Hog Dealer,” for nonpayment of overtime pay, holiday pay, 13th month pay, and SIL
plus moral and exemplary damages and attorney’s fees.
Macasio alleged that he has been working as a butcher for David. Macasio claimed that David
exercised control and supervision over his work because David:
1. Set the work day, reporting time and hogs to be chopped, as well as the manner by which
he was to perform his work;
2. Daily paid his salary of P700.00;
3. Approved and disapproved his leaves; and
4. Owned the hogs delivered for chopping, as well as the work tools and implements and also
rented the workplace.
On the other hand, David claimed that he hired Macasio on “pakyaw” or task basis thus he is
not entitled to the benefits claimed. David pointed out that Macasio’s work starts at
10:00pm-2:00am depending on the volume of hogs delivered. Macasio was paid a fixed
amount regardless of the number of hogs chopped but was not engaged to work, and
accordingly not paid, when no hogs are delivered.
To support his claims, Macasio presented the Certificate of Employment (COE) issued to him
by David and likewise faulted David for not presenting as evidence the DTR’s and payrolls
which could have easily established Macasio’s claims. David, however, insists that Macasio
was not his employee, as he was engaged in a “pakyaw” or task basis and that the COE was
issued only for overseas employment purposes.
LA RULING: The LA dimissed the complaint banking on the argument of David that Macasio
was merely engaged in a “pakyaw” or task basis. Accordingly, Macasio is not entitled to the
monetary awards.
NLRC RULING: Affirmed LA ruling. It ruled that Macasio was not covered by the Labor
Standards on the awards claimed because he was paid by results.
CA RULING: The CA modified the NLRC ruling. While agreeing that Macasio was paid by
results, this did not preclude the award of the benefits sought by Macasio. The CA ruled that
he will only be excluded from the coverage of the holiday, SIL, 13th month pay only if he is a
field personnel, which are lacking in Macasio’s case.
On appeal to the SC, David alleges, among others, engagement on a “pakyaw” or task basis
precludes the creation of employer-employee relationship.
ISSUE: Whether engagement on “pakyaw” or task basis negates the existence of employer-
employee relationship between them the parties involved.
SC RULING: No. Engagement in “pakyaw” or task basis does not characterize the relationship
between the parties whether employment or independent contractorship. It only determines
the manner of calculation of the wages due to the employee which, is in this case, is the
quantity or quality of work done.
Moreover, employing the control test, employer-employee relationship exists in this case as
shown by the
following circumstances:
1. David engaged the services of Macasio;
2. David paid Macasio’s wages;
3. David had been setting the day and time when Macasio should report for work;
4. David rents the place where Macasio had been performing his tasks;
5. Macasio would leave the workplace only after he had finished chopping all of the hog
meats given to him for the day’s task; and
6. David would still engage Macasio’s services and have him report for work even during the
days when only few hogs were delivered for butchering.
The totality of the surrounding circumstances of the present case sufficiently points to an
employer- employee relationship existing between David and Macasio.
27) BEGINO V. ABS-CBN G.R. No. 199166 April 20, 2015 PEREZ, J.:
Doctrine: Exclusivity Clause and Prohibitions in talent contracts are indicative of control by
the employer if it does not concern well-known television and radio personality who can
legitimately be considered as talent and compensated as such.
FACTS: ABS-CBN employed Begino and Del Valle sometime in 1996 as Cameramen/Editors
for TV Broadcasting. Sumayao Avila-Llorin were similarly engaged as reporters sometime in
1996 and 2002, respectively. [hereinafter referred to as petitioners] Petitioner were engaged
through Talent Contracts which, though regularly renewed over the years, provided terms
ranging from three (3) months to one (1) year. Petitioners were given Project Assignment
Forms which detailed, among other matters, the duration of a particular project as well as
the
budget and the daily technical requirements thereof. In the aforesaid capacities, petitioners
were tasked with coverage of news items for subsequent daily airings in respondents’ TV
Patrol Bicol Program. The Talent Contract specified the absence of employer-employee
relationship between the parties and mandated compliance with the professional standards
of ABS-CBN and its policies and guidelines as well as the rules of KBP. It also prohibited the
petitioners from engaging in similar work for persons or entities in direct or indirect
competition with ABS-CBN. Petitioners’ compensation were termed as Talent Fee’s and
were results oriented in nature, thus petitioners were not required to observe normal
working hours.
Claiming that they were regular employees, petitioners filed a complaint against ABS-CBN
before the NLRC SRAB Naga City. Petitioners claimed that they performed functions
necessary and desirable in ABS-CBN's business. Petitioners averred that they worked under
the direct control and supervision of Villafuerte, ABSCBN’s manager, because they were
mandated to wear company IDs and the latter provided all the equipment they needed, and,
at the end of each day, were informed about the news to be covered the following day, the
routes they were to take and, whenever the subject of their news coverage is quite distant,
even the start of their workday. Moreover, noncompliance with the company policies will
merit dismissal. Petitioners were constantly evaluated and were subjected to annual
competency assessment alongside other ABS-CBN employees.
As a result of their denomination as talents, they merely earned an average of P7,000.00 to
P8,000.00 per month, or decidedly lower than the P21,773.00 monthly salary ABS-CBN paid
its regular rank-and-file employees.
ABS-CBN contends that, due to the lack of manpower to produce its own programs, it is
necessary to hire independent contractors who offered their services in relation to a
particular program. Due to the unpredictability of viewer preferences, their payment usually
depends on the budget allocation for a project. It argued that its control is limited to the
imposition of general guidelines on conduct and performance, simply for the purpose of
upholding the standards of the company and the strictures of the industry. There is no control
or restrictions over the means and methods by which they performed or discharged the tasks
for which their services were engaged. Petitioners were, at most, briefed whenever necessary
regarding the general requirements of the project to be executed.
LA RULING: The LA ruled that petitioners were regular employees having rendered services
necessary and related to ABS-CBN’s business for more than a year. It ruled that the exclusivity
and prohibitions in the contract showed ABS-CBN’s control over petitioners.
NLRC RULING: The NLRC affirmed LA decision.
CA RULING: The CA discounted the existence of an employer-employee relation between the
parties upon the following findings and conclusions: (a) petitioners, were engaged by
respondents as talents for periods, work
and the program specified in the Talent Contracts and/or Project Assignment Forms
concluded between them; (b) petitioners were paid talent fees depending on the budget
allocated for the program to which they were assigned; (c) being respondents did not exercise
control over the manner and method by which petitioner accomplished their work but only
ensured that they complied with the standards of the company, the KBP and the industry;
and, (d) the existence of an employer-employee relationship is not necessarily established by
the exclusivity clause and prohibitions which are but terms and conditions on which the
parties are allowed to freely stipulate.
ISSUE: Whether an employer-employee relationship exists between petitioners and ABS-
CBN.
SC RULING: Yes. Notwithstanding the nomenclature of their Talent Contracts and/or Project
Assignment Forms and the terms and condition embodied therein, petitioners are regular
employees of ABS-CBN because they perform functions necessary and essential to ABS-
CBN’s business. Respondents’ repeated hiring of petitioners for its long-running news
program positively indicates that the latter were ABS-CBN’s regular employees. Petitioners
were subject to the control and supervision of respondents which, first and foremost,
provided them with the equipment essential for the discharge of their functions. The talent
contracts specifically provide that ABS-CBN shall retain “all creative, administrative, financial
and legal control” of the programs which were assigned to petitioners. They were likewise
required “to attend and participate in all promotional or merchandising campaigns,
activities or events for the Program,” and to perform their functions “at such locations and
Performance/Exhibition Schedules.” Such terms demonstrate the control over petitioners
not only over the results but also over the means employed to achieve the same.
While it is true that in Sonza, where similar exclusivity clause and restrictions were held not
to be indicative of control and lead to the conclusion that Sonza was an independent
contractor, such cannot be applied in this case. The said case enunciated that guidelines for
the achievement of mutually desired results are not tantamount to control. It cannot not be
applied in this case because Sonza case involved a well-known television and radio
personality who was legitimately considered a talent and amply compensated as such.
While possessed of skills for which they were modestly recompensed by respondents,
petitioners lay no claim to fame and/or unique talents for which talents like actors and
personalities are hired and generally compensated in the broadcast industry.
ART 218
A) DEFINITION OF LABOR DISPUTE
1) CITIBANK, N. A. v. CA (Third Division), AND CITIBANK INTEGRATED GUARDS LABOR
ALLIANCE
(CIGLA) SEGATUPAS/FSM LOCAL CHAPTER No. 1394
G.R. No. 108961 November 27, 1998
PARDO, J.:
DOCTRINE: Non-renewal of Security Guard Service agreement is a civil dispute and not a labor
dispute.
FACTS: Citibank and El Toro Security Agency, Inc. (hereafter El Toro) entered into a contract
for the latter to provide security and protective services. In 1990, the contract between
Citibank and El Toro expired. Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (hereafter
CIGLA) filed with the National Conciliation and Mediation Board (NCMB) a request for
preventive mediation citing Citibank as respondent therein giving as issues for preventive
mediation the following: (1) Unfair labor practice (2) Dismissal of union officers/members;
and (3) Union busting.Three days after, Citibank served on El Toro a written notice that the
bank would not renew anymore the service agreement with the latter. Simultaneously,
Citibank hired another security agency, the Golden Pyramid Security Agency, to render
security services at Citibank's premises.
Hence, CIGLA filed a manifestation with the NCMB that it was converting its request for
preventive mediation into a notice of strike for failure of the parties to reach a mutually
acceptable settlement of the issues, which it followed with a supplemental notice of strike
alleging as supplemental issue the mass dismissal of all union officers and members. The
following day the guards of El Toro were replaced by guards of the Golden Pyramid Security
Agency. They threatened to go on strike against Citibank and picket its premises. CIGLA filed
a notice of strike directed at the premises of the Citibank main office.
Citibank filed with the Regional Trial Court, Makati, a complaint for injunction and damages
to which respondent CIGLA filed with the trial court a motion to dismiss the complaint. The
motion alleged that the Court had no jurisdiction, this being labor dispute.
RTC RULING: The trial court denied respondent CIGLA's motion to dismiss because plaintiff's
complaint there are allegations, which negate any employer-employee relationship between
it and the CIGLA members.Respondent CIGLA filed with the Court of Appeals a petition for
certiorari with preliminary injunction assailing the validity of the proceedings had before the
regional trial court.
CA RULING: It declared the proceedings before the RTC null and void.
ISSUE:
(1) The basic issue involved is whether it is the labor tribunal or the regional trial court that
has jurisdiction over
the subject matter of the complaint filed by Citibank with the trial court.
(2) Is there a labor dispute between Citibank and the security guards, members of respondent
CIGLA,
regardless of whether they stand in the relation of employer and employees?
SC RULING:
(1) Yes.
The Court sustained the petitioner's contention. This Court has held in many cases that "in
determining the existence of an employer-employee relationship, the following elements are
generally considered: 1) the selection and engagement of the employee; 2) the payment of
wages; 3) the power of dismissal; and 4) the employer's power to control the employee with
respect to the means and methods by which the work is to be accomplished".6 It has been
decided also that the Labor Arbiter has no jurisdiction over a claim filed where no employer-
employee relationship existed between a company and the security guards assigned to it by
a security service contractor.7 In this case, it was the security agency El Toro that recruited,
hired and assigned the watchmen to their place of work. It was the security agency that was
answerable to Citibank for the conduct of its guards.
2. No. It is a civil dispute.
Article 212, paragraph l of the Labor Code provides the definition of a "labor dispute". It
"includes any controversy or matter concerning terms or conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether the disputants
stand in the proximate relation of employer and employee."
If at all, the dispute between Citibank and El Toro security agency is one regarding the
termination or nonrenewal of the contract of services. This is a civil dispute8. El Toro was an
independent contractor. Thus, no employer-employee relationship existed between Citibank
and the security guard members of the union in the security agency who were assigned to
secure the bank's premises and property. Hence, there was no labor dispute and no right to
strike against the bank. It is a basic rule of procedure that "jurisdiction of the court over the
subject matter of the action is determined by the allegations of the complaint, irrespective
of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted
therein. The jurisdiction of the court can not be made to depend upon the defenses set up in
the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would
almost entirely depend upon the defendant."9 "What determines the jurisdiction of the court
is the nature of the action pleaded as appearing from the allegations in the complaint. The
averments therein and the character of the relief sought are the ones to be consulted."
In the complaint filed with the trial court, petitioner alleged that in 1983, it entered into a
contract with El Toro, a security agency, for security and protection service. The parties
renewed the contract yearly until April 22, 1990.
Petitioner further alleged that from June 11, 1990, until the filing of the complaint, El Toro
security guards formerly assigned to guard Citibank premises loitered around the bank's
premises in large groups and threatened to stage a strike, which would hamper its operations
and the normal conduct of its business and that the bank would suffer damages should a
strike push through.
On the basis of the allegations of the complaint, it is safe to conclude that the dispute involved
is a civil one, not a labor dispute. Consequently, we rule that jurisdiction over the subject
matter of the complaint lies with the regional trial court.
2) PHILIPPINE AIRLINES, INC. vs. NATIONAL LABOR RELATIONS COMMISSION, FERDINAND
PINEDA and GODOFREDO CABLING
G.R. No. 120567 20 March 1998
Martinez, J.:
DEFINITION OF A LABOR DISPUTE
DOCTRINE: The power of the NLRC to issue an injunctive writ originates from "any labor
dispute.” The term "labor dispute" is defined as "any controversy or matter concerning terms
and conditions of employment or the association or representation of persons in negotiating,
fixing, maintaining, changing, or arranging the terms and conditions of employment
regardless of whether or not the disputants stand in the proximate relation of employers and
employees. There is no labor dispute when there has yet been no complaint for illegal
dismissal filed with the labor arbiter.
FACTS: Ferdinand Pineda and Godofredo Cabling, flight stewards of PAL, were dismissed by
the latter from the service for their alleged involvement in the currency smuggling in Hong
Kong. Aggrieved by said dismissal, they went directly to the NLRC and filed a petition for
injunction with the object of making PAL withhold its orders of dismissal and reinstate them
to work. The NLRC granted their petition. Displeased, PAL challenged the NLRC through a
motion for reconsideration questioning its jurisdiction to issue an injunction or restraining
order since this may be issued only under Article 218 of the Labor Code if the case involves
or arises from labor disputes.
NLRC RULING: It denied PAL’s motion for reconsideration and upheld its jurisdiction to issue
the mandatory injunctive writ ordering PAL to withhold the enforcement of the orders of
dismissal and reinstate Pineda and Cabling.
ISSUE: Can the NLRC, even without a complaint for illegal dismissal filed before the labor
arbiter, entertain an action for injunction and issue such writ?
SC RULING: NO. Generally, injunction is not a cause of action in itself but merely a provisional
remedy, an adjunct to a main
suit. Relative to this, the power of the NLRC to issue an injunctive writ originates from "any
labor dispute.”
The term "labor dispute" is defined as "any controversy or matter concerning terms and
conditions of employment or the association or representation of persons in negotiating,
fixing, maintaining, changing, or arranging the terms and conditions of employment
regardless of whether or not the disputants stand in the proximate relation of employers and
employees."
The term "controversy" is likewise defined as "a litigated question; adversary proceeding in a
court of law; a civil action or suit, either at law or in equity; a justiciable dispute."
A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right
on one side and a denial thereof on the other concerning a real, and not a mere theoretical
question or issue."
From the foregoing definitions, it is therefore an essential requirement that there must first
be a labor dispute between the contending parties before the labor arbiter.
In the present case, there is no labor dispute between PAL and respondents Pineda and
Cabling as there has yet been no complaint for illegal dismissal filed with the labor arbiter by
them against the PAL. The petition for injunction directly filed before the NLRC is in reality an
action for illegal dismissal. This is clear from the allegations in the petition which prays for
their reinstatement; award of full backwages, moral and exemplary damages; and attorney's
fees. As such, the petition should have been filed with the labor arbiter who has the original
and exclusive jurisdiction to hear and decide the following cases involving all workers,
whether agricultural or non-agricultural.
B) MANAGERIAL EMPLOYEE
28) CHARLITO PEÑARANDA v. BAGANGA PLYWOOD CORPORATION and HUDSON CHUA
G.R. No. 159577 3 May 2006
Panganiban, C.J.:
MEMBERS OF THE MANAGERIAL STAFF
DOCTRINE: Members of the managerial staff are those who customarily and regularly
exercise discretion and independent judgment. Members of the managerial staff are
exempted from the provisions of the Labor Code on labor standards.
FACTS: Charlito Peñaranda was hired as an employee of Baganga Plywood Corporation (BPC)
to take charge of the operations and maintenance of its steam plant boiler. Subsequently,
Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its
general manager, Hudson Chua, before the NLRC. Peñaranda claims, among others, that he
was not a managerial employee, and therefore, entitled to the award granted by the labor
arbiter.
LA RULING: There was no illegal dismissal and that petitioner’s Complaint was premature
because he was still employed by BPC. The temporary closure of BPC’s plant did not terminate
his employment; hence, he need not reapply when the plant reopened. Nevertheless, the
labor arbiter found Peñaranda entitled to overtime pay, premium pay for working on rest
days
NLRC RULING: Deleted the award of overtime pay and premium pay for working on rest days.
According to the Commission, petitioner was not entitled to these awards because he was a
managerial employee.
CA RULING: Denied Peñaranda’s petition on purely procedural grounds, which prompted him
to seek recourse with the SC.
ISSUE: Is Peñaranda a managerial employee?
SC RULING: NO. He was a member of the managerial staff. The Implementing Rules of the
Labor Code define members of a managerial staff as those who customarily and regularly
exercise discretion and independent judgment.
As borne out by the facts, Peñaranda supervised the engineering section of the steam plant
boiler. His work involved overseeing the operation of the machines and the performance of
the workers in the engineering section. This work necessarily required the use of discretion
and independent judgment to ensure the proper functioning of the steam plant boiler. As
supervisor, he is deemed a member of the managerial staff. Members of the managerial staff
are exempted from the provisions of the Labor Code on labor standards. Since Peñaranda
belongs to this class of employees, he is not entitled to overtime pay and premium pay for
working on rest days.
29) SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY
VICTORIO Union President v. CHARTER CHEMICAL and COATING CORPORATION
G.R. No. 169717 16 March 2011
Del Castillo, J.:
MANAGERIAL EMPLOYEES
DOCTRINE: After a labor organization has been registered, it may exercise all the rights and
privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-
file employees in its membership cannot affect its legitimacy for that is not among the
grounds for cancellation of its registration, unless such mingling was brought about by
misrepresentation, false statement or fraud under Article 239 of the Labor Code.
FACTS: Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines
for Empowerment and Reforms (petitioner union) filed a petition for certification election
among the regular rank-and-file employees of Charter Chemical and Coating Corporation
(respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital
Region.
Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner
union is not a legitimate labor organization because of (1) failure to comply with the
documentation requirements set by law, and (2) the inclusion of supervisory employees
within petitioner union.
MED-ARBITER RULING: Sided with the company.
DOLE RULING: Granted the union’s petition for a certification election.
CA RULING: Reversed the DOLE and upheld the Med-Arbiter’s Ruling.
ISSUE: Does the commingling of supervisory and rank-and-file employees in a union divest it
of its personality as a legitimate labor organization?
SC RULING: NO. After a labor organization has been registered, it may exercise all the rights
and privileges of a legitimate labor organization. Any mingling between supervisory and rank-
and-file employees in its membership cannot affect its legitimacy for that is not among the
grounds for cancellation of its registration, unless such mingling was brought about by
misrepresentation, false statement or fraud under Article 239 of the Labor Code.
Applying this principle to the case at bar, petitioner union was not divested of its status as a
legitimate labor organization even if some of its members were supervisory employees. It
had the right to file the subject petition for certification election. Besides, the legal
personality of the union cannot be collaterally attacked by the company in the certification
election proceedings the latter being – in the eyes of the law – a mere bystander in such
proceedings.
30) PAMELA FLORENTINA JUMUAD, Petitioner v. HI-FLYER FOOD, INC. and/or JESUS R.
MONTEMAYOR
G.R. No. 187877 September 2011
Mendoza, J.:
MANAGERIAL EMPLOYEES
DOCTRINE: As long as there is some basis for loss of confidence, such as when the employer
has reasonable ground to
believe that the employee concerned is responsible for the purported misconduct, and the
nature of his participation therein renders him unworthy of the trust and confidence
demanded of his position, a managerial employee may be dismissed.
FACTS: Pamela Florentina Jumuad was employed as Area Manager in Visayas by Hi-Flyer, Inc.,
the company managing Kentucky Fried Chicken stores throughout the country. Later on, the
company discovered lapses on the part of Jumuad in doing her job. Jumuad was given the
opportunity to explain the reason these. Nonetheless, the company still terminated her
employment on the ground of neglect of duty and breach of trust and confidence. This
prompted Jumuad to file a complaint against Hi-Flyer for illegal dismissal.
LA RULING: After finding that no serious cause for termination existed, the LA ruled that
Jumuad was illegally dismissed.
NLRC RULING: Affirmed the LA
CA RULING: Reversed the NLRC. CA was of the opinion that the requirements of substantive
and procedural due process were complied with affording Jumuad an opportunity to be heard
first, when she submitted her written explanation and then, when she was informed of the
decision and the basis of her termination.
ISSUE: Was Jumuad Illegally dismissed?
SC RULING: NO. As long as there is some basis for loss of confidence, such as when the
employer has reasonable ground to believe that the employee concerned is responsible for
the purported misconduct, and the nature of his participation therein renders him unworthy
of the trust and confidence demanded of his position, a managerial employee may be
dismissed.
Here, there is ample evidence that Jumuad indeed committed acts justifying loss of trust and
confidence of Hi- Flyer, which resulted to her dismissal from service. Her mismanagement
and negligence in supervising the effective operation of KFC branches in the span of less than
a year, resulting in the closure of KFC-Gaisano due to deplorable sanitary conditions, cash
shortages in KFC-Bohol, in which the said branch, at the time of discovery, was only several
months into operation, and the poor sanitation at KFC-Cocomall. The glaring fact that three
(3) out of the seven (7) branches under her area were neglected cannot be glossed over by
her explanation that there was no negligence on her part as the sanitation problem was
structural, that she had been usually busy conducting management team meetings in several
branches of KFC in her area or that she had no participation whatsoever in the alleged cash
shortages.
As the employer, Hi-Flyer has the right to regulate, according to its discretion and best
judgment, all aspects of employment, including work assignment, working methods,
processes to be followed, working regulations, transfer of employees, work supervision, lay-
off of workers and the discipline, dismissal and recall of workers.
ART 224
JURISDICTION OF LABOR ARBITER
1) PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) v. THE SECRETARY OF
THE
DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII,
and JANDELEON JUEZAN
G.R. No. 179652 6 March 2012
Velasco, Jr., J.:
JURISDICTION OF THE LABOR ARBITER
DOCTRINE: If a complaint is brought before the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that
there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the
jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter,
under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other
terms and conditions of employment, if accompanied by a claim for reinstatement. If a
complaint is filed with the NLRC, and there is still an existing employer-employee relationship,
the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.
FACTS: Jandeleon Juezan filed a complaint against petitioner with the Department of Labor
and Employment (DOLE), for illegal deduction, nonpayment of service incentive leave, 13th
month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed
payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth. The DOLE Regional
Director found that private respondent was an employee of petitioner, and was entitled to
his money claims.
When the matter was brought before the CA it was held that PBS was accorded due process
as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction
over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on
the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic
Act No. (RA) 7730. However, the SC found that there was no employer-employee relationship
between PBS and private respondent. It was held that while the DOLE may make a
determination of the existence of an employer-employee relationship, this function could not
be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the
Labor Code, as amended by RA 7730. The National Labor Relations Commission (NLRC) was
held to be the primary agency in determining the existence of an employer-employee
relationship. This was the interpretation of the Court of the clause in cases where the
relationship of employer-employee still exists in Art. 128(b).
From this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification of
Decision. The PAO sought to clarify as to when the visitorial and enforcement power of the
DOLE be not considered as coextensive with the power to determine the existence of an
employer-employee relationship. The DOLE also sought the same clarification.
ISSUE: Is the NLRC the sole body with jurisdiction to determine the existence of an employer-
employee relationship?
SC RULING: NO. No procedure was laid down where the DOLE would only make a preliminary
finding, that the power was primarily held by the NLRC. The law did not say that the DOLE
would first seek the NLRCs determination of the existence of an employer-employee
relationship, or that should the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to
determine whether or not an employer-employee relationship exists, and from there to
decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor
Code, as amended by RA 7730. The determination of the existence of an employer-employee
relationship by the DOLE must be respected. The expanded visitorial and enforcement power
of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could,
by the simple expedient of disputing the employer-employee relationship, force the referral
of the matter to the NLRC.
If the DOLE makes a finding that there is an existing employer-employee relationship, it takes
cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction
only if the employer-employee relationship has already been terminated, or it appears, upon
review, that no employer-employee relationship existed in the first place.
It must also be remembered that the power of the DOLE to determine the existence of an
employer-employee relationship need not necessarily result in an affirmative finding. The
DOLE may well make the determination that no employer-employee relationship exists, thus
divesting itself of jurisdiction over the case. It must not be precluded from being able to reach
its own conclusions, not by the parties, and certainly not by the SC.
To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that
there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the
jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter,
under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other
terms and conditions of employment, if accompanied by a claim for reinstatement. If a
complaint is filed with the NLRC, and there is still an existing employer-employee relationship,
the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.
2) EX-BATAAN VETERANS SECURITY AGENCY, INC., (EBVSAI) v. THE SECRETARY OF LABOR
BIENVENIDO E. LAGUESMA
G.R. No. 152396 November 20, 2007
CARPIO, J.:
THE VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL DIRECTOR CAN BE
EXERCISED EVEN WHERE THE INDIVIDUAL CLAIM EXCEEDS P5,000
DOCTRINE: While it is true that under Articles 129 and 217 of the Labor Code, the LA has
jurisdiction to hear and decide cases where the aggregate money claims of each employee
exceeds P5,000.00, said provisions of law do not contemplate nor cover the visitorial and
enforcement powers of the Secretary of Labor or his duly authorized representatives. Rather,
said powers are defined and set forth in Article 128 of the Labor Code.
FACTS: Private respondents are EBVSAI's employees who instituted a complaint for
underpayment of wages against EBVSAI before the Regional Office (RO) of DOLE.
Consequently, RO conducted a complaint inspection of EBVSAI’s Plant where several labor
law violations were noted. On the same day, the RO issued a notice of hearing requiring
EBVSAI and private respondents to attend. After the hearing, the Regional Director (RD)
ordered EBVSAI to pay Php 763,927.85 to the affected employees.
EBVSAI filed a motion for reconsideration and alleged that under Articles 129 and 217(6) of
the Labor Code, the Labor Arbiter, not the Regional Director, has exclusive and original
jurisdiction over the case because the individual monetary claim of private respondents
exceeds P5,000. RD denied the motion stating that, pursuant to RA 7730, the limitations
under Articles 129 and 217(6) of the Labor Code no longer apply to the Secretary of Labor's
visitorial and enforcement powers under Article 128(b). The Secretary of Labor or his duly
authorized representatives are now empowered to hear and decide, in a summary
proceeding, any matter involving the recovery of any amount of wages and other monetary
claims arising out of employer-employee relations at the time of the inspection.
DOLE SECRETARY RULING: It affirmed the Director’s decision on the ground that pursuant to
RA 7730, the Court's decision in the Servando case is no longer controlling insofar as the
restrictive effect of Article 129 on the visitorial and enforcement power of the Secretary of
Labor is concerned.
CA RULING: affirmed DOLE Secretary ruling
ISSUE: Whether the Secretary of Labor or his duly authorized representatives have
jurisdiction over the money claims of private respondents which exceed P5,000?
SC RULING: YES. In Allied Investigation Bureau, Inc. v. Sec. of Labor, SC ruled that while it is
true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction to hear and
decide cases where the aggregate money claims of each employee exceeds P5,000.00, said
provisions of law do not contemplate nor cover the visitorial and enforcement powers of the
Secretary of Labor or his duly authorized representatives. Rather, said powers are defined
and set forth in Article 128 of the Labor Code (as amended by R.A. No. 7730) thus: (b)
Notwithstanding the provisions of Article[s] 129 and 217 of this Code to the contrary, and in
cases where the relationship of employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have the power to issue compliance
orders to give effect to [the labor standards provisions of this Code and other] labor
legislation based on the findings of labor employment and enforcement officers or industrial
safety engineers made in the course of inspection. However, if the labor standards case is
covered by the exception clause in Article 128(b) of the Labor Code, then the RD will have to
endorse the case to the appropriate Arbitration Branch of the NLRC. In order to divest the RD
or his representatives of jurisdiction, the following elements must be present: (a) that the
employer contests the findings of the labor regulations officer and raises issues thereon; (b)
that in order to resolve such issues, there is a need to examine evidentiary matters; and (c)
that such matters are not verifiable in the normal course of inspection. The rules also provide
that the employer shall raise such objections during the hearing of the case or at any time
after receipt of the notice of inspection results. In this case, the RD validly assumed
jurisdiction over the money claims of private respondents even if the claims exceeded P5,000
because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code
and the case does not fall under the exception clause. EBVSAI did not contest the findings of
the labor regulations officer during the hearing or after receipt of the notice of inspection
results. It was only in its supplemental motion for reconsideration before the RD that EBVSAI
questioned the findings of the labor regulations officer and presented documentary evidence
to controvert the claims of private respondents. But even if this was the case, the RD and the
Secretary of Labor still looked into and considered EBVSAI's documentary evidence and found
that such did not warrant the reversal of the order.
3) ARSENIO LOCSIN v. NISSAN CAR LEASE PHILS., INC. (NCLPI) and LUIS BANSON
G.R. No. 185567 October 20, 2010
BRION, J.:
LA HAS NO JURISDICTION OVER INTRA-CORPORATE CONTROVERSY
DOCTRINE: Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the
NLRC, has jurisdiction to hear the legality of the termination of his relationship with Nissan.
A corporate officers dismissal is always a corporate act, or an intra-corporate controversy
which arises between a stockholder and a corporation so that RTC should exercise jurisdiction
based on Section 5(c) of PD 902-A.
FACTS: Locsin was elected Executive Vice President and Treasurer (EVP/Treasurer) of NCLPI.
Locsin held this position for 13 years until he was nominated and elected Chairman. A few
months thereafter, an election was held and Locsin was neither re-elected Chairman nor
reinstated to his previous position as EVP/Treasurer. Locsin filed a complaint for illegal
dismissal before the Labor Arbiter against NCLPI. NCLPI filed a Motion to Dismiss on the
ground that the Labor Arbiter did not have jurisdiction over the case since the issue of Locsins
removal as EVP/Treasurer involves an intra-corporate dispute. Locsin maintained that he is
an employee of NCPI.
LA RULING: LA denied the Motion to Dismiss, holding that its office-acquired jurisdiction to
arbitrate and/or decide the instant complaint finding extant in the case an employer-
employee relationship. Article 280 of the Labor Code, the receipt of salaries by Locsin, SSS
deductions on that salary, and the element of control in the performance of work duties were
used by LA to conclude that Locsin was a regular employee.
CA RULING: NCLPI elevated the case to the CA through a Petition for Certiorari under Rule 65
of the Rules of Court. CA ruled that Locsin was a corporate officer; hence the issue of his
removal as EVP/Treasurer is an intracorporate dispute under the RTCs jurisdiction. The fact
that the position of EVP/Treasurer is specifically enumerated as an office in the corporations
by-laws makes him a corporate officer.
ISSUE: Whether Locsin’s position as EVP/Treasurer makes him a corporate officer thereby
excluding him from the coverage of the Labor Code?
SC RULING: YES. Locsin was undeniably Chairman and President, and was elected to these
positions by the Nissan board pursuant to its By-laws. As such, he was a corporate officer, not
an employee. Section 25 of the Corporation Code provides that corporate officers are the
president, secretary, treasurer and such other officers as may be provided for in the by-laws.
Even as EVP/Treasurer, Locsin already acted as a corporate officer because such position is
provided for in Nissans By-Laws. An office is created by the charter of the corporation and
the officer is elected by the directors or stockholders. On the other hand, an employee usually
occupies no office and generally is employed by the managing officer of the corporation who
also determines the compensation to be paid to such employee. Locsin was elected by the
NCLPI Board, in accordance with the Amended By-Laws of the corporation.
Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the NLRC, has
jurisdiction to hear the legality of the termination of his relationship with Nissan. A corporate
officers dismissal is always a corporate act, or an intra-corporate controversy which arises
between a stockholder and a corporation so that RTC should exercise jurisdiction based on
Section 5(c) of PD 902-A.
4) OSCAR C. REYES vs. HON. REGIONAL TRIAL COURT OF MAKATI, Branch 142, ZENITH
INSURANCE CORPORATION, and RODRIGO C. REYES
G.R. No. 165744 August 11, 2008
BRION, J.:
JURISDICTION OF SPECIAL COMMERCIAL COURTS
DOCTRINE: Without the settlement of Anastacia’s estate, there can be no definite partition
and distribution of the estate to the heirs. Without the partition and distribution, there can
be no registration of the transfer. And without the registration, we cannot consider the
transferee-heir a stockholder who may invoke the existence of an intracorporate relationship
as premise for an intra-corporate controversy within the jurisdiction of a special commercial
court.
FACTS: Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are the children of the
spouses Pedro and Anastacia
Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance
Corporation (Zenith). Pedro died in 1964, while Anastacia died in 1993. Although Pedro’s
estate was judicially partitioned among his heirs sometime in the 1970s, no similar settlement
and partition appear to have been made with Anastacia’s estate, which included her
shareholdings in Zenith. Zenith and Rodrigo filed a derivative suit with SEC (now RTC) against
Oscar in order to obtain an accounting of the funds and assets of Zenith which are now in the
possession of Oscar and to determine the shares of stock of deceased spouses that were
arbitrarily and fraudulently appropriated by Oscar for himself and which were not collated
and taken into account in the partition, distribution, and/or settlement of the estate.
Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit. He claimed that
the complaint is a mere nuisance or harassment suit and should be dismissed; and that it is
not a bona fide derivative suit as it partakes of the nature of a petition for the settlement of
estate of the Anastacia that is outside the jurisdiction of a RTC.
RTC RULING: RTC denied the motion as to the action for determination of the shares of stock
of deceased allegedly taken by Oscar, its accounting and the corresponding delivery of these
shares since it is not a derivative suit and should properly be threshed out in a petition for
settlement of estate. However, the action with respect to the derivative suit for accounting
of the funds and assets of the corporation which are in the control, custody, and/or
possession of the Oscar was not dismissed and was taken cognizance of by RTC.
CA RULING: affirmed the RTC order
ISSUE: Whether the special commercial court (RTC) have jurisdiction over the subject matter
of Rodrigo’s complaint?
SC RULING: NO. While Rodrigo holds shares of stock in Zenith, he holds them in two
capacities: in his own right with respect to the 4,250 shares registered in his name, and as
one of the heirs of Anastacia Reyes with respect to the 136,598 shares registered in her name.
What is material in resolving the issues of this case under the allegations of the complaint is
Rodrigo’s interest as an heir since the subject matter of the present controversy centers on
the shares of stocks belonging to Anastacia, not on Rodrigo’s personally-owned shares nor
on his personality as shareholder owning these shares.
Hence, Rodrigo must first prove that there are shareholdings that will be left to him and his
co-heirs, and this can be determined only in a settlement of the decedent’s estate. No such
proceeding has been commenced to date. Without the settlement of Anastacia’s estate,
there can be no definite partition and distribution of the estate to the heirs. Without the
partition and distribution, there can be no registration of the transfer. And without the
registration, we cannot consider the transferee-heir a stockholder who may invoke the
existence of an intracorporate relationship as premise for an intra-corporate controversy
within the jurisdiction of a special commercial court.
5) LESLIE OKOL v. SLIMMERS WORLD INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC.,
and
RONALD JOSEPH MOY
G.R. No. 160146 DECEMBER 11, 2009
CARPIO, J.:
LA HAS NO JURISDICTION OVER INTRA-CORPORATE CONTROVERSY
DOCTRINE: In a number of cases, SC held that a corporate officer’s dismissal is always a
corporate act, or an intra-corporate controversy which arises between a stockholder and a
corporation. The question of remuneration involving a stockholder and officer, not a mere
employee, is not a simple labor problem but a matter that comes within the area of corporate
affairs and management and is a corporate controversy in contemplation of the Corporation
Code.
FACTS: Respondent Slimmers World International operating under the name Behavior
Modifications, Inc. (Slimmers World) employed petitioner Leslie Okol (Okol) as a
management trainee. Okol was promoted as Head Office Manager and then Director and Vice
President. Okol’s services was terminated by Slimmers World due to the seizure by the
Bureau of Customs of machines and treadmills to or consigned to Slimmers World but the
shipment of the equipment was placed under the name of Okol.
Okol filed an illegal dismissal complaint with the LA. Respondents filed a Motion to Dismiss
asserting that the NLRC had no jurisdiction over the subject matter of the complaint. Okol
argued that even as vice-president, the work that she performed conforms to that of an
employee rather than a corporate officer. Mere title or designation in a corporation will not,
by itself, determine the existence of an employer-employee relationship.
LA RULING: LA granted the motion to dismiss ruling that Okol was the vice-president of
Slimmers World at the time of her dismissal. Since it involved a corporate officer, the dispute
was an intra-corporate controversy falling outside the jurisdiction of the Arbitration branch.
NLRC RULING: It reversed the LA decision
CA RULING: It affirmed LA’s ruling holding that being an intra-corporate dispute, the case falls
within the jurisdiction of the regular courts pursuant to Republic Act No. 8799.
ISSUE: Does NLRC have jurisdiction over the illegal dismissal case filed by petitioner?
SC RULING: NO. Section 25 of the Corporation Code enumerates corporate officers as the
president, secretary, treasurer and such other officers as may be provided for in the by-laws.
An office is created by the charter of the corporation and the officer is elected by the directors
or stockholders. On the other hand, an employee usually occupies no office and generally is
employed not by action of the directors or stockholders but by the managing officer of the
corporation who also determines the compensation to be paid to such employee.
The Amended By-Laws of Slimmers World which enumerate the power of the board of
directors as well as the officers of the corporation clearly shows that Okol was a director and
officer of Slimmers World. In a number of cases, SC held that a corporate officer’s dismissal
is always a corporate act, or an intra-corporate controversy which arises between a
stockholder and a corporation. The question of remuneration involving a stockholder and
officer, not a mere employee, is not a simple labor problem but a matter that comes within
the area of corporate affairs and management and is a corporate controversy in
contemplation of the Corporation Code.
6) RURAL BANK OF CORON (PALAWAN), INC., EMPIRE COLD STORAGE AND DEVELOPMENT
CORPORATION, CITIZENS DEVELOPMENT INCOPRORATED (CDI), CARIDAD B. GARCIA,
SANDRA G. ESCAT, LORNA GARCIA, and OLGA G. ESCAT v. ANNALISA CORTES
G.R. No. 164888 December 6, 2006
CARPIO MORALES, J.:
JURISDICTION OF LA; POSTING A BOND IS A REQUIREMENT FOR PERFECTION OF APPEAL TO
NLRC
DOCTRINES:
1. While respondent was the Corporate Secretary of the Rural Bank of Coron, she was also its
Financial Assistant and the Personnel Officer of the two other petitioner corporations. A
corporation can engage its corporate officers to perform services under a circumstance which
would make them employees. The Labor Arbiter has thus jurisdiction over respondent’s
complaint.
2. All that is required to perfect the appeal is the posting of a bond to ensure that the award
is eventually paid should the appeal be dismissed. Petitioners should thus have posted a
bond, even if it were only partial, but they did not.
FACTS: Respondent was the Financial Assistant, Personnel Officer and Corporate Secretary of
The Rural Bank of Coron, Personnel Officer of CDI, and also Personnel Officer and Disbursing
Officer of The Empire Cold Storage Development Corporation (ECSDC). She simultaneously
received salaries from these corporations.
On examination of the financial books of the corporations, it was discovered that respondent
was involved in several anomalies, drawing petitioners to terminate respondent’s services.
Respondent filed a complaint for illegal dismissal and non-payment of salaries and other
benefits before the LA. Petitioners moved for the dismissal of the complaint on the ground
of lack of jurisdiction, contending that the case was an intra-corporate controversy involving
the removal of a corporate officer, respondent being the Corporate Secretary of the Rural
Bank of Coron, Inc., hence, cognizable by the Securities and Exchange Commission (SEC) (now
RTC) pursuant to Section 5 of PD 902-A.
LA RULING: LA assumed jurisdiction ruling that aside from her being Corporate Secretary of
Rural Bank of Coron, complainant was likewise appointed as Financial Assistant & Personnel
Officer, which is not a corporate officer of petitioners. LA ordered petitioners to pay
respondent P1,168,090.00.
NLRC RULING: On the tenth or last day of the period of appeal, petitioners filed a Notice of
Appeal and Motion for Reduction of Bond to which they attached a Memorandum on Appeal.
In their Motion for Reduction of Bond, petitioners alleged that the corporations were under
financial distress and the Rural Bank of Coron was under receivership. NLRC, while noting that
petitioners timely filed the appeal, held that the same was not accompanied by an appeal
bond, a mandatory requirement under Article 223 of the Labor Code and Section 6, Rule VI
of the NLRC New Rules of Procedure. It also noted that the Motion for Reduction of Bond was
"premised on self-serving allegations." It accordingly dismissed the appeal.
ISSUES:
1. Whether LA has jurisdiction over the case?
2. Whether petitioners’ appeal before NLRC was perfected?
SC RULING:
1. YES. While respondent was the Corporate Secretary of the Rural Bank of Coron, she was
also its Financial Assistant and the Personnel Officer of the two other petitioner corporations.
Mainland Construction Co., Inc. v. Movilla instructs that a corporation can engage its
corporate officers to perform services under a circumstance which would make them
employees. The Labor Arbiter has thus jurisdiction over respondent’s complaint.
2. NO. All that is required to perfect the appeal is the posting of a bond to ensure that the
award is eventually paid should the appeal be dismissed. Petitioners should thus have posted
a bond, even if it were only partial, but they did not. In the case at bar, petitioner did not post
a full or partial appeal bond within the prescribed period, thus, no appeal was perfected from
the decision of the LA. For this reason, the decision sought to be appealed to the NLRC had
become final and executory and therefore immutable. No relaxation of the Rule may thus be
considered. Clearly then, the NLRC has no authority to entertain the appeal, much less to
reverse the decision of the LA.
7) HALGUENA v. PAL
G.R. No. 172013 October 2, 2009
PERALTA, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE: Not every controversy or money claim by an employee against the employer or
vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions between employees
and employer where the employer-employee relationship is merely incidental and the cause
of action precedes from a different source of obligation is within
the exclusive jurisdiction of the regular court.
FACTS: Petitioners were employed as female flight attendants of PAL. They are members of
the Flight Attendants and Stewards Association of the Philippines (FASAP), the exclusive
exclusive bargaining representative of the flight attendants. Section 144, Part A of the PAL-
FASAP CBA, provides that: “3. Compulsory Retirement. Subject to the grooming standards
provisions of this Agreement, compulsory retirement shall be fifty-five (55) for females and
sixty (60) for males. x x x.” petitioners and several female cabin crews manifested that the
aforementioned CBA provision on compulsory retirement is discriminatory, and demanded
for an equal treatment with their male counterparts. This demand was reiterated in a letter.
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their 2004-2005 CBA
proposals[6] and manifested their willingness to commence the collective bargaining
negotiations between the management and the association, at the soonest possible time.
In 2004, petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the
Issuance of TRO and Writ of Preliminary Injunction with the Regional Trial Court (RTC) of
Makati City against respondent for the invalidity of Section 144, Part A of the PAL-FASAP CBA.
RTC RULING: The RTC issued an Order upholding its jurisdiction over the present case. The
RTC reasoned that: The allegations in the Petition do not make out a labor dispute arising
from employer-employee relationship as none is shown to exist. This case is not directed
specifically against respondent arising from any act of the latter, nor does it involve a claim
against the respondent. Rather, this case seeks a declaration of the nullity of the questioned
provision of the CBA, which is within the Court's competence, with the allegations in the
Petition constituting the bases for such relief sought.
The RTC issued a TRO on August 10, 2004, enjoining the respondent for implementing Section
144, Part A of the PAL-FASAP CBA.
CA RULING: declared RTC to have NO JURISDICTION OVER THE CASE
ISSUE: Does the RTC have jurisdiction over the petitioners' action challenging the legality or
constitutionality of the provisions on the compulsory retirement age contained in the CBA
between respondent PAL and FASAP?
SC RULING: YES. The subject of litigation is incapable of pecuniary estimation, exclusively
cognizable by the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended.
Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. The said
issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application
of the Constitution, labor statutes, law on contracts and the Convention on the Elimination
of All Forms of Discrimination Against Women, and the power to apply and interpret the
constitution and CEDAW is within the jurisdiction of trial courts, a court of general
jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not every dispute
between an employer and employee involves matters that only labor arbiters and the NLRC
can resolve in the exercise of their adjudicatory or quasi-judicial powers.
The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited
to disputes arising from an employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or their collective bargaining agreement.
Not every controversy or money claim by an employee against the employer or vice-versa is
within the exclusive jurisdiction of the labor arbiter. Actions between employees and
employer where the employer-employee relationship is merely incidental and the cause of
action precedes from a different source of obligation is within the exclusive jurisdiction of the
regular court. Here, the employer-employee relationship between the parties is merely
incidental and the cause of action ultimately arose from different sources of obligation, i.e.,
the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by reference to the Labor Code
or other labor relations statute or a collective bargaining agreement but by the general civil
law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the
labor arbiter and the NLRC. In such situations, resolution of the dispute requires expertise,
not in labor management relations nor in wage structures and other terms and conditions of
employment, but rather in the application of the general civil law. Clearly, such claims fall
outside the area of competence or expertise ordinarily ascribed to labor arbiters and the
NLRC and the rationale for granting jurisdiction over such claims to these agencies
disappears.
8) SANTIAGO v. CF SHARP CREW MANAGEMENT
G.R. No. 162419 July 10, 2007
TINGA, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE: The jurisdiction of labor arbiters is not limited to claims arising from employer-
employee relationships.
FACTS: In 1998, Paul Santiago signed a new contract of employment with CF Sharp Crew
Mgmt., Inc., with the duration of nine (9) months. He was assured of a monthly salary of
US$515.00, overtime pay and other benefits. Santiago was to be deployed on board the "MSV
Seaspread". A week before the scheduled date of departure,
Capt. Pacifico Fernandez, CF Sharp‘s Vice President, sent a fax to the captain of "MSV
Seaspread telling the latter that he received calls from various individuals about the
possibility that Santiago may jump ship in Canada like his brother did before him. Santiago
was thus told that he would not be leaving for Canada anymore, but he was reassured that
he might be considered for deployment at some future date.
Consequently, Santiago filed a complaint for illegal dismissal, damages, and attorney's fees
against CF Sharp and its foreign principal. In defense, CF Sharp contends that there is no
employer-employee relationship between petitioner and respondent because under the
POEA Standard Contract, the employment contract shall commence upon actual departure
of the seafarer from the airport or seaport at the point of hire. In the absence of an employer-
employee relationship between the parties, the claims for illegal dismissal, actual damages,
and attorney‘s fees should be dismissed as the NLRC does not have jurisdiction over the same.
LA RULING: The labor arbiter held respondent liable
NLRC RULING: (NLRC) ruled that there is no employer-employee relationship between
petitioner and respondent because under the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard Contract),
the employment contract shall commence upon actual departure of the seafarer from the
airport or seaport at the point of hire and with a POEA-approved contract. In the absence of
an employer-employee relationship between the parties, the claims for illegal dismissal,
actual damages, and attorneys fees should be dismissed.
CA RULING: It agreed with the NLRCs finding that petitioners non-deployment was a valid
exercise of respondents management prerogative.
ISSUE: Does the NLRC have jurisdiction over the case?
SC RULING: YES. The jurisdiction of labor arbiters is not limited to claims arising from
employer-employee relationships.
Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that: Sec. 10. Money Claims.
Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral, exemplary and
other forms of damages. x x x
Since the present petition involves the employment contract entered into by petitioner for
overseas employment, his claims are cognizable by the labor arbiters of the NLRC.
9) ATLAS FARMS, INC. v. NLRC
G.R. No. 142244 November 18, 2002
QUISUMBING, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE: Where the dispute is just in the interpretation, implementation or enforcement
stage, it may be referred to the
grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there
was already actual termination, with alleged violation of the employees rights, it is already
cognizable by the labor arbiter.
FACTS: Private respondent Jaime O. dela Pea was employed as a veterinary aide by petitioner.
He was among several employees terminated in July 1989. On July 8, 1989, he was re-hired
by petitioner and given the additional job of feedmill operator. He was instructed to train
selected workers to operate the feedmill.
In 1993, Pea was allegedly caught urinating and defecating on company premises not
intended for the purpose. The farm manager of petitioner issued a formal notice directing
him to explain within 24 hours why disciplinary action should not be taken against him. Pea
refused, however, to receive the formal notice. He never bothered to explain. Thus, a notice
of termination with payment of his monetary benefits was sent to him.
Co-respondent Marcial I. Abion was a carpenter/mason and a maintenance man whose
employment by petitioner. Allegedly, he caused the clogging of the fishpond drainage
resulting in damages worth several hundred thousand pesos when he improperly disposed
of the cut grass and other waste materials into the ponds drainage system. Petitioner sent a
written notice to Abion, requiring him to explain what happened, otherwise, disciplinary
action would be taken against him. He refused to receive the notice and give an explanation,
according to petitioner. Consequently, the company terminated his services. He
acknowledged receipt of a written notice of dismissal, with his separation pay.
Pea and Abion filed separate complaints for illegal dismissal that were later consolidated.
Both claimed that their termination from service was due to petitioners suspicion that they
were the leaders in a plan to form a union to compete and replace the existing management-
dominated union.
LA RULING: The labor arbiter dismissed their complaints on the ground that the grievance
machinery in the collective bargaining agreement (CBA) had not yet been exhausted. Private
respondents availed of the grievance process, but later on refiled the case before the NLRC
in Region IV. They alleged lack of sympathy on petitioners part to engage in conciliation
proceedings.
NLRC RULING: NLRC reversed the labor arbiter’s decision.
CA RULING: The appellate court denied the petition and affirmed the NLRC resolution with
some modifications, thus: 1) The private respondents can not be reinstated, due to their
acceptance of the separation pay offered by the petitioner; 2) The private respondents are
entitled to their full back wages; and, 3) The amount of the separation pay received by private
respondents from petitioner shall not be deducted from their full back wages.
ISSUE: Does the LA and NLRC have jurisdiction over the case?
SC RULING: YES. Coming to the merits of the petition, the NLRC found that petitioner did not
comply with the requirements of a valid dismissal. For a dismissal to be valid, the employer
must show that: (1) the employee was accorded due process, and (2) the dismissal must be
for any of the valid causes provided for by law. No evidence was shown that private
respondents refused, as alleged, to receive the notices requiring them to show cause why no
disciplinary action should be taken against them. Without proof of notice, private
respondents who were subsequently dismissed without hearing were also deprived of a
chance to air their side at the level of the grievance machinery. Given the fact of dismissal, it
can be said that the cases were effectively removed from the jurisdiction of the voluntary
arbitrator, thus placing them within the jurisdiction of the labor arbiter. Where the dispute is
just in the interpretation, implementation or enforcement stage, it may be referred to the
grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there
was already actual termination, with alleged violation of the employees rights, it is already
cognizable by the labor arbiter.
10) PERPETUAL HELP CREDIT COOPERATIVE, INC. (PHCCI) v. BENEDICTO FABURADA
G.R. No. 121948. October 8, 2001
SANDOVAL-GUTIERREZ, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE: The dispute is about payment of wages, overtime pay, rest day and termination
of employment. Under Art. 217 of the Labor Code, these disputes are within the original and
exclusive jurisdiction of the Labor Arbiter.
FACTS: Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay, private
respondents, filed a complaint against petitioner, with the Arbitration Branch, DOLE for illegal
dismissal, premium pay on holidays and rest days, separation pay, wage differential, moral
damages, and attorneys fees. Petitioner PHCCI filed a motion to dismiss the complaint on the
ground that there is no employer-employee relationship between them as private
respondents are all members and co-owners of the cooperative and they have not exhausted
the remedies provided in the cooperative by-laws. Petitioner filed a supplemental motion to
dismiss alleging that Article 121 of R.A. No. 6939 or the Cooperative Development Authority
Law which took effect on March 26, 1990, requires conciliation or mediation within the
cooperative before a resort to judicial proceeding.
LA RULING: The Labor Arbiter denied petitioner's motion to dismiss, holding that the case is
impressed with employer-employee relationship and that the law on cooperatives is
subservient to the Labor Code.
NLRC RULING: NLRC affirmed the Labor Arbiter's decision
CA RULING: The appellate court denied the petition and affirmed the NLRC resolution with
some modifications, thus: 1) The private respondents cannot be reinstated, due to their
acceptance of the separation pay offered by the petitioner; 2) The private respondents are
entitled to their full back wages; and, 3) The amount of the separation pay received by private
respondents from petitioner shall not be deducted from their full back wages.
ISSUE: Does the LA have jurisdiction over the case?
SC RULING: YES. As aptly stated by the Solicitor General in his comment, P.D. 175
(strengthening the Cooperative Movement) does not provide for a grievance machinery
where a dispute or claim may first be submitted. LOI 23 refers to instructions to the Secretary
of Public Works and Communications to implement immediately the recommendation of the
Postmaster General for the dismissal of some employees of the Bureau of Post.
Obviously, this LOI has no relevance to the instant case.
Article 121 of Republic Act No. 6938 (Cooperative Code of the Philippines) provides the
procedure how cooperative disputes are to be resolved, thus: ART. 121. Settlement of
Disputes.- Disputes among members, officers, directors, and committee members, and intra-
cooperative disputes shall, as far as practicable, be settled amicably in accordance with the
conciliation or mediation mechanisms embodied in the bylaws of the cooperative, and in
applicable laws. Should such a conciliation/mediation proceeding fail, the matter shall be
settled in a court of competent jurisdiction.
Complementing this Article is Section 8 of R.A. No. 6939 (Cooperative Development Authority
Law) which reads: SEC. 8 Mediation and Conciliation.- Upon request of either or both parties,
the Authority shall mediate and conciliate disputes within a cooperative or between
cooperatives: Provided, That if no mediation or conciliation succeeds within three (3) months
from request thereof, a certificate of non-resolution shall be issued by the Commission prior
to the filing of appropriate action before the proper courts.
The above provisions apply to members, officers and directors of the cooperative involved in
disputes within a cooperative or between cooperatives. There is no evidence that private
respondents are members of petitioner PHCCI and even if they are, the dispute is about
payment of wages, overtime pay, rest day and termination of employment. Under Art. 217
of the Labor Code, these disputes are within the original and exclusive jurisdiction of the
Labor Arbiter.
11) AUSTRIA v. NLRC
G.R. No. 124382 August 16, 1999
KAPUNAN, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE: Under the Labor Code, the provision which governs the dismissal of employees,
is comprehensive enough to include religious corporations, such as the SDA, in its coverage.
The active participation of a party against whom the action was brought, coupled with his
failure to object to the jurisdiction of the court or quasi-judicial body where the action is
pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the
resolution of the case and will bar said party from later on impugning the court or body’s
jurisdiction.
FACTS: Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day
Adventists (SDA) is a religious corporation. Petitioner, on the other hand, was a Pastor of the
SDA until 31 October 1991, when his services were terminated. petitioner received several
communications from Mr. Eufronio Ibesate, the treasurer of the Negros Mission asking him
to admit accountability and responsibility for the church tithes and offerings collected by his
wife, Mrs. Thelma Austria, in his district which amounted to P15,078.10, and to remit the
same to the Negros Mission.
Petitioner reasoned out that he should not be made accountable since it was private
respondents Pastor Gideon Buhat and Mr. Eufronio Ibesate who authorized his wife to collect
the tithes and offerings since he was very sick to do the collecting at that time.
On 16 October 1991,Petitioner went to the office of Pastor Buhat, the president of the Negros
Mission. During said call, petitioner tried to persuade Pastor Buhat to convene the Executive
Committee for the purpose of settling the dispute between him and the private respondent,
Pastor David Rodrigo. The dispute between Pastor Rodrigo and petitioner arose from an
incident in which petitioner assisted his friend, Danny Diamada, to collect from Pastor
Rodrigo the unpaid balance for the repair of the latters motor vehicle which he failed to pay
to Diamada. Due to the assistance of petitioner in collecting Pastor Rodrigos debt, the latter
harbored ill-feelings against petitioner. When news reached petitioner that Pastor Rodrigo
was about to file a complaint against him with the Negros Mission, he immediately proceeded
to the office of Pastor Buhat on the date abovementioned and asked the latter to convene
the Executive Committee. Pastor Buhat denied the request of petitioner since some
committee members were out of town and there was no quorum. Thereafter, the two
exchanged heated arguments.
A fact-finding committee was created to investigate petitioner. Subsequently, petitioner
received a letter of dismissal citing misappropriation of denominational funds, willful breach
of trust, serious misconduct, gross and habitual neglect of duties, and commission of an
offense against the person of employers duly authorized representative, as grounds for the
termination of his services. Reacting against the adverse decision of the SDA, petitioner filed
a complaint before the Labor Arbiter for illegal dismissal against the SDA and its officers and
prayed for reinstatement with backwages and benefits, moral and exemplary damages and
other labor law benefits.
Private respondents contend that by virtue of the doctrine of separation of church and state,
the Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint filed by
petitioner. Since the matter at bar allegedly involves the discipline of a religious minister, it
is to be considered a purely ecclesiastical affair to which the State has no right to interfere.
LA RULING: The Labor Arbiter RENDERED DECISION IN FAVOR OF PETITIONER.
NLRC RULING: sustained the argument posed by private respondents and, accordingly,
dismissed the complaint of petitioner.
ISSUE: Does the LA have jurisdiction over the case?
SC RULING: YES. Under the Labor Code, the provision which governs the dismissal of
employees, is comprehensive enough to include religious corporations, such as the SDA, in
its coverage. Article 278 of the Labor Code on postemployment states that the provisions of
this Title shall apply to all establishments or undertakings, whether for profit or not.
Obviously, the cited article does not make any exception in favor of a religious corporation.
This is made more evident by the fact that the Rules Implementing the Labor Code,
particularly, Section 1, Rule 1, Book VI on the Termination of Employment and Retirement,
categorically includes religious institutions in the coverage of the law, to wit:
Section 1. Coverage. This Rule shall apply to all establishments and undertakings, whether
operated for profit or not, including educational, medical, charitable and religious institutions
and organizations, in cases of regular employment with the exception of the Government and
its political subdivisions including government-owned or controlled corporations.
With this clear mandate, the SDA cannot hide behind the mantle of protection of the doctrine
of separation of church and state to avoid its responsibilities as an employer under the Labor
Code. Finally, as correctly pointed out by petitioner, private respondents are estopped from
raising the issue of lack of jurisdiction for the first time on appeal. It is already too late in the
day for private respondents to question the jurisdiction of the NLRC and the Labor Arbiter
since the SDA had fully participated in the trials and hearings of the case from start to finish.
The Court has already ruled that the active participation of a party against whom the action
was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial
body where the action is pending, is tantamount to an invocation of that jurisdiction and a
willingness to abide by the resolution of the case and will bar said party from later on
impugning the court or body’s jurisdiction. Thus, the active participation of private
respondents in the proceedings before the Labor Arbiter and the NLRC mooted the question
on jurisdiction.
12) DEPARTMENT OF FOREIGN AFFAIRS v. NATIONAL LABOR RELATIONS COMMISSION,
HON. LABOR ARBITER NIEVES V. DE CASTRO and JOSE C. MAGNAYI
G.R. No. 113191 September 18, 1996
VITUG, J.:
ART. 217
DOCTRINE:
The stipulations of both the Charter and Headquarters Agreement should be able, may well
enough, to establish that, except in the specified cases of borrowing and guarantee
operations, as well as the purchase, sale and underwriting of securities, the ADB enjoys
immunity from legal process of every form. Thus, the decision of the Labor Arbiter is rendered
vacant for being null and void.
FACTS: Jose Magnayi initiated case for his alleged illegal dismissal by ADB and the latter's
violation of the "labor-only" contracting law. Two summonses were served, one sent directly
to the ADB and the other through DFA, both with a copy of the complaint. Forthwith, the ADB
and the DFA notified respondent Labor Arbiter that the ADB, as well as its President and
Officers, were covered by an immunity from legal process except for borrowings, guaranties
or the sale of securities pursuant to its Charter in relation to Headquarters Agreement of ADB
and the Government.
LA RULING: The Labor Arbiter took cognizance of the complaint on the impression that the
ADB had waived its diplomatic immunity from suit. Labor Arbiter concluded (that there
Magnayi is illegally dismissed): The ADB did not appeal. Instead, the DFA sought a "formal
vacation of the void judgment from NLRC.
NLRC CHAIRMAN: The defense of immunity could have been raised before the Labor Arbiter
by a special appearance which, naturally, may NOT be considered as a waiver of the very
defense being raised. Except where an appeal is seasonably and properly made, neither the
Commission nor the NLRC Chairman may review, or even question, the propriety of any
decision by a Labor Arbiter. Incidentally, the Commission sits en banc (all fifteen
Commissioners) only to promulgate rules of procedure or to formulate policies (Art. 213,
Labor Code).
"If the Department of Foreign Affairs feels that the action of Labor Arbiter Nieves de Castro
constitutes misconduct, malfeasance or misfeasance, it is suggested that an appropriate
complaint be lodged with the Office of the Ombudsman. Dissatisfied, the DFA lodged the
instant petition for certiorari.
OSG in its comment initially assailed the claim of immunity by the ADB. Subsequently,
however, it submitted a Manifestation stating, that ADB, indeed, was correct in invoking its
immunity from suit under the Charter and the Headquarters Agreement.
ISSUE: Is ADB covered by immunity rendering NLRC without jurisdiction?
SC RULING: YES. The stipulations of both the Charter and Headquarters Agreement should be
able, may well enough, to establish that, except in the specified cases of borrowing and
guarantee operations, as well as the purchase, sale and underwriting of securities, the ADB
enjoys immunity from legal process of every form. The Banks officers, on their part, enjoy
immunity in respect of all acts performed by them in their official capacity. Diplomatic
immunity is essentially a political question and courts should refuse to look beyond a
determination by the executive branch of the government, and where the plea of diplomatic
immunity is recognized and affirmed by the executive branch of the government x x x it is
then the duty of the courts to accept the claim of immunity upon appropriate suggestion by
the principal law officer of the government, x x x or other officer acting under his direction.
Being an international organization that has been extended a diplomatic status, the ADB is
independent of the municipal law.
The Office of the President, likewise, has issued a letter to the Secretary of Labor. "Despite
information from DFA, the labor arbiter in question persisted to send summons. Courts
should respect diplomatic immunities of foreign officials recognized by the Philippine
government.”
There are two conflicting concepts of sovereign immunity, each widely held and firmly
established. According to the classical or absolute theory, a sovereign cannot, without its
consent, be made a respondent in the Courts of another sovereign. According to the newer
or restrictive theory, the immunity of the sovereign is recognized only with regard to public
acts or acts jure imperii of a state, but not with regard to private act or acts jure gestionis.
The service contracts referred to by private respondent have not been intended by the ADB
for profit or gain but are official acts over which a waiver of immunity would not attach. The
DFA must be allowed to plead its case whenever necessary or advisable to enable it to help
keep the credibility of the Philippine government before the international community.
"In the United States, the procedure followed is the process of 'suggestion,' where the foreign
state or the international organization sued in an American court requests the Secretary of
State to make a determination as to whether it is entitled to immunity.
"In the Philippines, the practice is for the foreign government or the international
organization to first secure an executive endorsement of its claim of sovereign or diplomatic
immunity. Decision of the Labor Arbiter is VACATED for being NULL AND VOID.
13) PHILIPPINE NATIONAL BANK v. FLORENCE O. CABANSAG
G.R. No. 157010 June 21, 2005
PANGANIBAN, J.:
DOCTRINE: Philippine government requires non-Filipinos working in the country to first
obtain a local work permit in order to be legally employed here. That permit, however, does
not automatically mean that the non-citizen is thereby bound by local laws only, as averred
by petitioner. It does not at all imply a waiver of ones national laws on labor. Absent any clear
and convincing evidence to the contrary, such permit simply means that its holder has a legal
status as a worker in the issuing country. All Filipino workers, whether employed locally or
overseas, enjoy the protective mantle of Philippine labor and social legislations. Our labor
statutes may not be rendered ineffective by laws or judgments promulgated, or stipulations
agreed upon, in a foreign country.
FACTS: Florence Cabansag] arrived in Singapore as a tourist. She applied for employment,
with the Singapore Branch of
the Philippine National Bank. At the time, too, the Branch Office had two (2) types of
employees: (a) expatriates or the regular employees, hired in Manila and assigned abroad
including Singapore, and (b) locally (direct) hired. Tobias, General Manager found her
eminently qualified recommending the appointment of Florence O. Cabansag, for the
position which was approved. She then filed an Application, with the Ministry of Manpower
of the Government of Singapore, for the issuance of an Employment Pass as an employee of
the Singapore PNB Branch. Her application was approved for a period of two (2) years.
Cabansag submitted to Ruben C. Tobias, her initial Performance Report. Ruben C. Tobias was
so impressed with the Report that he made a notation and, on said Report: GOOD WORK.
However, in the evening, she was told by two (2) co-employees that Ruben C. Tobias has
asked them to tell Florence O. Cabansag to resign from her job. Tobias confirmed the veracity
of the information, with the explanation that her resignation was imperative as a cost-cutting
measure of the Bank. She then asked Ruben C. Tobias that she be furnished with a Formal
Advice from the PNB Head Office in Manila. However, Tobias flatly refused. Florence O.
Cabansag did not submit any letter of resignation. Tobias again summoned Florence O.
Cabansag to his office and demanded that she submit her letter of resignation. For failure
thereof, she received a letter from Ruben C. Tobias terminating her employment with the
Bank.
LA RULING: rendered finding respondents guilty of Illegal dismissal.
NLRC RULING: the NLRC affirmed that Decision.
CA RULING: CA noted that petitioner bank had failed to adduce in evidence the Singaporean
law supposedly governing the latters employment Contract with respondent. CA found that
the Contract had actually been processed by the Philippine Embassy in Singapore and
approved by POEA, which then used that Contract as a basis for issuing an Overseas
Employment Certificate in favor of respondent.
Even though respondent secured an employment pass from the Singapore Ministry of
Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the labor
arbiter or the NLRC over her Complaint for illegal dismissal. Finally, the CA held that PNB had
failed to establish a just cause for the dismissal of respondent.
ISSUE: Whether or not the arbitration branch of the NLRC in the National Capital Region has
jurisdiction over the instant controversy;
SC RULING: YES. The jurisdiction of labor arbiters and the NLRC is specified in Article 217.
More specifically, Section 10 of RA 8042 reads in part: SECTION 10. Money Claims.
Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral, exemplary and
other forms of damages.
Based on the foregoing provisions, labor arbiters clearly have original and exclusive
jurisdiction over claims arising from employer-employee relations, including termination
disputes involving all workers, among whom are overseas Filipino workers (OFW).
Prior to employing respondent, petitioner had to obtain an employment pass for her from
the Singapore Ministry of Manpower. Similarly, the Philippine government requires non-
Filipinos working in the country to first obtain a local work permit in order to be legally
employed here. That permit, however, does not automatically mean that the noncitizen is
thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of
ones national laws on labor. Absent any clear and convincing evidence to the contrary, such
permit simply means that its holder has a legal status as a worker in the issuing country.
Under Philippine law, this document authorized her working status in a foreign country and
entitled her to all benefits and processes under our statutes. Thus, even assuming arguendo
that she was considered at the start of her employment as a direct hire governed by and
subject to the laws, common practices and customs prevailing in Singapore[17] she
subsequently became a contract worker or an OFW who was covered by Philippine labor laws
and policies upon certification by the POEA. Undeniably, respondent was employed by
petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal
resident of that state. She thus falls within the category of migrant worker or overseas Filipino
worker. As such, it is her option to choose the venue of her Complaint against petitioner for
illegal dismissal. The law gives her two choices: (1) at the Regional Arbitration Branch (RAB)
where she resides or (2) at the RAB where the principal office of her employer is situated.
Since her dismissal by petitioner, respondent has returned to the Philippines -- specifically to
her residence at Filinvest II, Quezon City. Thus, in filing her Complaint before the RAB office
in Quezon City, she has made a valid choice of proper venue.
Notice and Hearing Not Complied With; No Valid Cause for Dismissal. Cabansag was Illegally
Dismissed.
14) BEBIANO M. BAÑEZ v. HON. DOWNEY C. VALDEVILLA and ORO MARKETING, INC.
G.R. No. 128024 May 9, 2000
GONZAGA-REYES, J.:
DOCTRINE: By the designating clause "arising from the employer-employee relations" Article
217 should apply with equal force to the claim of an employer for actual damages against its
dismissed employee, where the basis for the claim arises from or is necessarily connected
with the fact of termination, and should be entered as a counterclaim in the illegal dismissal
case.
This is, of course, to distinguish from cases of actions for damages where the employer-
employee relationship is merely incidental and the cause of action proceeds from a different
source of obligation. Thus, the jurisdiction of regular courts was upheld where the damages,
claimed for were based on tort, malicious prosecution, or breach of contract, as when the
claimant seeks to recover a debt from a former employee or seeks liquidated damages in
enforcement of a prior employment contract.
FACTS: Bebiano Baez was the sales operations manager of Oro Marketing in its branch in
Iligan City Oro "indefinitely suspended" petitioner and the latter filed a complaint for illegal
dismissal with NLRC. Baez alleged a modus operandi used by Oro Marketing. herein:
Defendant canvassed customers personally or through salesmen of plaintiff which were hired
or recruited by him. If said customer decided to buy items from plaintiff on installment basis,
defendant, without the knowledge of said customer and plaintiff, would buy the items on
cash basis at ex-factory price, a privilege not given to customers, and thereafter required the
customer to sign promissory notes and other documents using the name and property of
plaintiff, purporting that said customer purchased the items from plaintiff on installment
basis. Thereafter, defendant collected the installment payments either personally or through
Venus Lozano, a Group Sales Manager of plaintiff but also utilized by him as secretary in his
own business for collecting and receiving of installments, purportedly for the plaintiff but in
reality on his own account or business. The collection and receipt of payments were made
inside the Iligan City branch using plaintiffs facilities, property and manpower. That
accordingly plaintiffs sales decreased and reduced to a considerable extent the profits which
it would have earned.
LA RULING: Labor Arbiter found petitioner to have been illegally dismissed.
NLRC RULING: dismissed the same for having been filed out of time. Elevated by petition for
certiorari before the Supreme Court, the case was dismissed on technical grounds[3]; and
that even if all the procedural requirements for the filing of the petition were met, it would
still be dismissed for failure to show grave abuse of discretion on the part of the NLRC.
Oro filed a complaint for damages before RTC Misamis Oriental which prayed for the payment
of loss of profit and/or unearned income and expenses of litigation.
Baez filed a motion to dismiss the above complaint. He interposed in the court below that
the action for damages, having arisen from an employer-employee relationship, was squarely
under the exclusive original jurisdiction of the NLRC. He accused Oro Marketing of splitting
causes of action, stating that the latter could very well have included the instant claim for
damages in its counterclaim before the Labor Arbiter. He also pointed out that the civil action
of private respondent is an act of forum-shopping.
RTC RULING: A perusal of the complaint which is for damages does not ask for any relief under
the Labor Code. The Court believes such cause of action is within the realm of civil law, and
jurisdiction over the controversy belongs to the regular courts.
ISSUE: Whether RTC has jurisdiction over the case.
SC RULING: NO. Article 217(a), paragraph 4 of the Labor Code, ART. 217. Jurisdiction of Labor
Arbiters and the Commission. 4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
The above provisions are a result of the amendment by Section 9 of R.A. No. 6715, which put
to rest the earlier confusion as to who between Labor Arbiters and regular courts had
jurisdiction over claims for damages as between employers and employees. By the
designating clause "arising from the employer-employee relations" Article 217 should apply
with equal force to the claim of an employer for actual damages against its dismissed
employee, where the basis for the claim arises from or is necessarily connected with the fact
of termination, and should be entered as a counterclaim in the illegal dismissal case.
In the case before us, private respondent's claim against petitioner for actual damages arose
from a prior employer-employee relationship. In the first place, private respondent would
not have taken issue with petitioner's "doing business of his own" had the latter not been
concurrently its employee.
Second, and more importantly, to allow respondent court to proceed with the instant action
for damages would be to open anew the factual issue of whether petitioner's installment sale
scheme resulted in business losses and the dissipation of private respondent's property. This
issue has been duly raised and ruled upon in the illegal dismissal case. The Labor Arbiter,
however, found to the contrary ---that no business losses may be attributed to petitioner as
in fact, it was by reason of petitioner's installment plan that the sales of the Iligan branch
reached its highest record level.
Evidently, the lawmaking authority had second thoughts about depriving the Labor Arbiters
and the NLRC of the jurisdiction to award damages in labor cases because that setup would
mean duplicity of suits, splitting the cause of action and possible conflicting findings and
conclusions by two tribunals on one and the same claim.
This is, of course, to distinguish from cases of actions for damages where the employer-
employee relationship is merely incidental and the cause of action proceeds from a different
source of obligation. Thus, the jurisdiction of regular courts was upheld where the damages,
claimed for were based on tort, malicious prosecution, or breach of contract, as when the
claimant seeks to recover a debt from a former employee or seeks liquidated damages in
enforcement of a prior employment contract.
Furthermore, the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor
laws, but also damages governed by the Civil Code.
15) MA. ISABEL T. SANTOS, represented by ANTONIO P. SANTOS, v. SERVIER PHILIPPINES,
INC. and NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 166377 November 28, 2008
NACHURA, J.:
DOCTRINE: The issue of deduction for tax purposes is intertwined with the main issue of
whether or not petitioners benefits have been fully given her. It is, therefore, a money claim
arising from the employer-employee relationship, which clearly falls within the jurisdiction
of the Labor Arbiter and the NLRC.
FACTS: Ma. Isabel T. Santos was the Human Resource Manager of respondent Servier
Philippines, Inc., Isabel attended a meeting of all human resource managers of respondent,
held in Paris, France. Since the last day of the meeting coincided with the graduation of
Santos’ only child, she arranged for a European vacation with her family right after the
meeting. Isabel together with her husband Antonio P. Santos, her son, and some friends, had
dinner at Leon des Bruxelles, a Paris restaurant known for mussels as their specialty. While
having dinner, petitioner complained of stomach pain, then vomited. Eventually, she was
brought to the hospital where she fell into coma for 21 days; and later stayed at the Intensive
Care Unit (ICU) for 52 days. During the time that petitioner was confined at the hospital, her
husband and son stayed with her in Paris. Petitioners hospitalization expenses, as well as
those of her husband and son, were paid by respondent. She went back to the Philippines
and was then confined at the St. Lukes Medical Center for rehabilitation. During the period
of petitioners rehabilitation, respondent continued to pay the formers salaries; and to assist
her in paying her hospital bills. Petitioners physician concluded that the Santos had not fully
recovered mentally and physically. Hence, respondent was constrained to terminate
petitioners services.
Respondent offered a retirement package. Of the promised retirement benefits amounting
to P1,063,841.76, only P701,454.89 was released to petitioners husband, the balance thereof
was withheld allegedly for taxation purposes. Respondent also failed to give the other
benefits. Petitioner, represented by her husband, instituted the instant case for unpaid
amounts.
LA RULING: Labor Arbiter dismissed petitioners complaint. The Labor Arbiter stressed that
respondent had been generous in giving financial assistance to the petitioner. The arbiter
refused to rule on the legality of the deductions made by respondent from petitioners total
retirement benefits for taxation purposes, as the issue was beyond the jurisdiction of the
NLRC.
NLRC RULING: NLRC set aside the Labor Arbiters decision.
The NLRC emphasized that petitioner was not retired from the service pursuant to law,
collective bargaining agreement (CBA) or other employment contract; rather, she was
dismissed from employment due to a disease/disability under Article 284. The NLRC
therefore ordered the payment of the other benefits promised by the respondent.
CA RULING: affirmed the NLRC decision.
ISSUE: Whether the benefits are taxable and thus, it was proper for Servier to deduct
P362,386.87 for taxation benefits. (Court ruled that petitioners belatedly claimed entitlement
to retirement benefits which issues are not raised in the pleading, thus deemed abandoned.)
SC RULING: YES. As she was dismissed on the ground of Disease, the law gives the petitioner
the right to demand separation pay. However, respondent established a retirement plan in
favor of all its employees. The receipt of retirement benefits does not bar the retiree from
receiving separation pay. Separation pay is a statutory right designed to provide the
employee with the wherewithal during the period that he/she is looking for another
employment. On the other hand, retirement benefits are intended to help the employee
enjoy the remaining years of his life, lessening the burden of worrying about his financial
support, and are a form of reward for his loyalty and service to the employer.[34] Hence, they
are not mutually exclusive. However, this is only true if there is no specific prohibition against
the payment of both benefits in the retirement plan and/or in the Collective Bargaining
Agreement (CBA).[35]
In the instant case, the Retirement Plan bars the petitioner from claiming additional benefits
on top of that provided. Section 2, Article XII of the Retirement Plan provides: Section 2. NO
DUPLICATION OF BENEFITS
Petitioners claim for illegal deduction (for tax purposes) falls within the tribunals jurisdiction.
It is noteworthy that petitioner demanded the completion of her retirement benefits,
including the amount withheld by respondent for taxation purposes. The issue of deduction
for tax purposes is intertwined with the main issue of whether or not petitioners benefits
have been fully given her. It is, therefore, a money claim arising from the employer-employee
relationship, which clearly falls within the jurisdiction[41] of the Labor Arbiter and the NLRC.
Section 32 (B) (6) (a) of the New National Internal Revenue Code (NIRC) provides for the
exclusion of retirement benefits from gross income. Thus, for the retirement benefits to be
exempt from the withholding tax, the taxpayer is burdened to prove the concurrence of the
following elements: (1) a reasonable private benefit plan is maintained by the employer; (2)
the retiring official or employee has been in the service of the same employer for at least ten
(10) years; (3) the retiring official or employee is not less than fifty (50) years of age at the
time of his retirement; and (4) the benefit had been availed of only once.[43]
Petitioner was qualified for disability retirement. At the time of such retirement, petitioner
was only 41 years of age; and had been in the service for more or less eight (8) years. As such,
the above provision is not applicable for failure to comply with the age and length of service
requirements. Therefore, respondent cannot be faulted for deducting from petitioners total
retirement benefits the amount of P362,386.87, for taxation purposes.
16) PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant General
Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA v.
HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAÑAS
& FULGENCIO LEGO
G.R. No. 89621 September 24, 1991
CRUZ, J.:
DOCTRINE: Not every controversy involving workers and their employers can be resolved only
by the labor arbiters. This will be so only if there is a "reasonable causal connection" between
the claim asserted and employee-employer relations to put the case under the provisions of
Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice
in the exercise of their civil and criminal jurisdiction.
FACTS: The private respondents were employees of the Pepsi who were suspected of
complicity in the irregular disposition of empty Pepsi Cola bottles. Pepsi filed a criminal
complaint for theft against them but this was later withdrawn and substituted with a criminal
complaint for falsification of private documents. After a preliminary investigation, the
complaint was dismissed. The dismissal was affirmed by the Office of the Provincial
Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents were
dismissed by the petitioner company As a result, they lodged a complaint for illegal dismissal
with NLRC in Tacloban City.
NLRC RULING: mandated reinstatement with damages.
In addition, they instituted in the Regional Trial Court of Leyte, a separate civil complaint
against the petitioners for damages arising from what they claimed to be their malicious
prosecution. Pepsi moved to dismiss the civil complaint on the ground that the trial court had
no jurisdiction over the case because it involved employee-employer relations.
RTC RULING: the respondent judge, acting on the motion for reconsideration, reinstated the
complaint, saying it was "distinct from the labor case for damages now pending before the
labor courts.
Pepsi invoke Article 217 of the Labor Code and a number of decisions of this Court to support
their position that the private respondents civil complaint for damages falls under the
jurisdiction of the labor arbiter.
ISSUE: Whether the RTC has jurisdiction over the case?
SC RULING: YES. Not every controversy involving workers and their employers can be resolved
only by the labor arbiters.
This will be so only if there is a "reasonable causal connection" between the claim asserted
and employee-employer relations to put the case under the provisions of Article 217. Absent
such a link, the complaint will be cognizable by the regular courts of justice in the exercise of
their civil and criminal jurisdiction.
EXAMPLES OF CASES:
1.) In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First Instance of Rizal
a civil complaint for damages against their employer for slanderous remarks made against
them by the company president. Theirs is a simple action for damages for tortious acts
allegedly committed by the defendants. Such being the case, the governing statute is the Civil
Code and not the Labor Code. It results that the orders under review are based on a wrong
premise.
2.) In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for damages for alleged
violation by the defendant of an "Agreement for a Course of Conversion Training at the
Expense of Singapore Airlines Limited. Petitioner seeks protection under the civil laws and
claims no benefits under the Labor Code. The primary relief sought is for liquidated damages
for breach of a contractual obligation.
3.) In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the claim of the
plaintiff against its sales manager for payment of certain accounts pertaining to his purchase
of vehicles and automotive parts, repairs of such vehicles, and cash advances from the
corporation was properly cognizable by the Regional Trial Court because "although a
controversy is between an employer and an employee, the Labor Arbiters have no jurisdiction
if the Labor Code is not involved."
4.) The latest ruling on this issue is found in San Miguel Corporation v. NLRC. That case
involved a claim of an employee for a P60,000.00 prize for a proposal made by him which he
alleged had been accepted and implemented by the defendant corporation.
Where the claim to the principal relief sought is to be resolved not by reference to the Labor
Code or other labor relations statute or a collective bargaining agreement but by the general
civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to
the Labor Arbiter and the NLRC. While paragraph 3 above refers to "all money claims of
workers," it is not necessary to suppose that the entire universe of money claims that might
be asserted by workers against their employers has been absorbed into the original and
exclusive jurisdiction of Labor Arbiters.
The case now before the Court involves a complaint for damages for malicious prosecution
which was filed with the Regional Trial Court of Leyte by the employees of the defendant
company. It does not appear that there is a "reasonable causal connection" between the
complaint and the relations of the parties as employer and employees. The complaint did not
arise from such relations and in fact could have arisen independently of an employment
relationship between the parties. No such relationship or any unfair labor practice is asserted.
What the employees are alleging is that the petitioners acted with bad faith when they filed
the criminal complaint which the Municipal Trial Court said was intended "to harass the poor
employees" and the dismissal of which was affirmed by the Provincial Prosecutor "for lack of
evidence to establish even a slightest probability that all the respondents herein have
committed the crime imputed against them." This is a matter which the labor arbiter has no
competence to resolve as the applicable law is not the Labor Code but the Revised Penal
Code.
17) CORPORATION v. EDDIE ALBARICO
G.R. No. 182295 June 26, 2013
SERENO, C.J.:
JURISDICTION OF THE VOLUNTARY ARBITRATOR
DOCTRINES:
A voluntary arbitrator may, by agreement of the parties, assume jurisdiction over any of the
labor disputes enumerated under Article 223 of the Labor Code or those which could fall
under the jurisdiction of the Labor Arbiter. He has plenary jurisdiction and authority to
interpret an agreement to arbitrate and to determine the scope of his own authority when
the said agreement is vague — subject only, in a proper case, to the certiorari jurisdiction of
this Court.
In deciding a case, the voluntary arbitrator may award backwages upon a finding of illegal
dismissal, even though the issue of entitlement thereto is not explicitly claimed in the
Submission Agreement. Backwages, in general, are awarded on the ground of equity as a
form of relief that restores the income lost by the terminated employee by reason of his
illegal dismissal.
Aside from illegal dismissal cases, separation pay may also be awarded in the following
instances:
a. when employees have been terminated for authorized causes, such as redundancy,
retrenchment or installation of labor-saving devices;
b. when employees have been terminated for a just cause other than serious misconduct or
an act reflecting on moral character and social justice calls for the awarding of separation
pay;
c. when it has become an established practice of the company to pay the said benefit to
voluntarily resigning employees; or
d. when an employee has been validly dismissed for non-membership in a union as required
in a closedshop agreement
FACTS: When he was dismissed on 5 April 1993, Albarico was a regular employee of 7K
Corporation, a company selling water purifiers. He started working for the company in 1990
as a salesman. Because of his good performance, his employment was regularized. He was
also promoted several times: from salesman, he was promoted to senior sales representative
and then to acting team field supervisor. In 1992, he was awarded the President’s Trophy for
being one of the company’s top water purifier specialist distributors.
In April of 1993, the chief operating officer of 7K Corporation terminated Albarico’s
employment allegedly for his poor sales performance. Albarico had to stop reporting for
work, and he subsequently submitted his money claims against 7K Corporation for arbitration
before the National Conciliation and Mediation Board (NCMB). The issue for voluntary
arbitration before the NCMB, according to the parties’ Submission Agreement was whether
Albarico was entitled to the payment of separation pay and the sales commission reserved
for him by the corporation. As for its defense, 7K Corporation claimed Albarico had voluntarily
stopped reporting for work after receiving a verbal reprimand for his sales performance;
hence, it was he who was guilty of abandonment of employment
While the case was pending before the NCMB, Albarico filed a complaint for illegal dismissal
before the LA. The latter ruled in favor of Albarico. However, the NLRC, on appeal, vacated
the decision of the LA on the ground of forum-shopping, without prejudice to the pending
NCMB arbitration case. The decision of the NLRC became final.
NCMB RULING: Albarico was ILLEGALLY DISMISSED
The arbitrator explained that the promotions, increases in salary, and awards received by
respondent belied the claim that the latter was performing poorly. It was also found that
Albarico could not have abandoned his job, as the abandonment should have been clearly
shown. The VA also found that Albarico was dismissed from his work without due process.
However, it was found that reinstatement was no longer possible because of the strained
relationship of the parties. Thus, in lieu of reinstatement, the VA ordered 7K Corporation to
pay separation pay for two years at P4,456 for each year, or a total amount of P8,912. The
VA also ordered 7K Corporation to pay backwages in the amount of P90,804.19, plus
attorney’s fees since Albarico had been compelled to file an action for illegal dismissal.
7K Corporation appealed to the CA, imputing grave abuse of discretion on the part of VA for
ruling on the issue of illegal dismissal and for awarding payment of backwages and attorney’s
fees. 7K Corporation contended that the issue of the legality of dismissal was not explicitly
included in the Submission Agreement.
CA RULING: AFFIRMED VA; Deleted Attorney’s Fees for lack of factual basis.
ISSUE: Did the VA properly assume jurisdiction to decide the issue of the legality of the
dismissal of Albarico as well as the latter’s entitlement to backwages?
SC RULING: YES. The circumstances of the instant case lead to no other conclusion than that
the claim of Albarico for separation pay was premised on his allegation of illegal dismissal.
Thus, the VA properly assumed jurisdiction over the issue of the legality of his dismissal
Moreover, it should be noted that even the NLRC was of the understanding that the NCMB
arbitration case sought to resolve the issue of the legality of the dismissal of the Albarico. In
fact, the identity of the issue of the legality of his dismissal, which was previously submitted
to the NCMB, and later submitted to the NLRC, was the basis of the latter’s finding of forum
shopping and the consequent dismissal of the case before it. In fact, 7K Corporation also
implicitly acknowledged this when it filed before the NLRC its Motion to Dismiss Albarico’s
Complaint on the ground of forum shopping. Thus, it is now estopped from claiming that the
issue before the NCMB does not include the issue of the legality of the dismissal of
respondent. Besides, there has to be a reason for deciding the issue of respondent’s
entitlement to separation pay. To think otherwise would lead to absurdity, because the
voluntary arbitrator would then be deciding that issue in a vacuum. The arbitrator would have
no basis whatsoever for saying that Albarico was entitled to separation pay or not if the issue
of the legality of Albarico’s dismissal was not resolve first.
18) VIRGILIO KAWACHI, et al. v. DOMINIE DEL QUERO
GR No. 163768 March 27, 2007
TINGA, J.:
LA STILL HAS JURISDICTION OVER CLAIMS FOR DAMAGES ARISING FROM INCIDENTS WITH
REASONABLE CAUSAL CONNECTION WITH EMPLOYEE-EMPLOYER RELATIONSHIP
FACTS: Kawachi hired Del Quero as a clerk of A/J Raymundo Pawnshop, Inc. On August 10,
2002, Kawachi scolded Del Quero in front of many people about the way she treated the
customers of the pawnshop and afterwards terminated Del Quero from employment without
affording her due process. Del Quero charged Virgilio Kawachi, Julius Kawachi and A/J
Raymundo Pawnshop, Inc., with illegal dismissal, non-execution of a contract of employment,
violation of minimum wage law, and non-payment of overtime pay. A few months after, Del
Quero filed an action for damages against Virgilio and Julius Kawachi before the MeTC of
Quezon City. Del Quero claimed that the August 10, 2002 incident had caused her to suffer
serious embarrassment and shame so that she could not do anything but cry because of the
shameless way by which she was terminated from the service.
The Kawachis then moved for the dismissal of the complaint on the grounds of lack of
jurisdiction and forum shopping or splitting causes of action.
MeTC RULING: DENIED the Motion for Dismissal
It ruled that no causal connection appeared between Del Quero’s cause of action and the
employer-employee relations between the parties. The Kawachis filed a petition for
certiorari.
RTC RULING: AFFIRMED the MeTC
It upheld the jurisdiction of the MeTC over Del Quero’s complaint for damages. The
employees’ action for damages based on slanderous remarks uttered by the employer was
within the regular courts jurisdiction since the complaint did not allege any unfair labor
practice on the part of the employer.
ISSUE: Do the regular courts have jurisdiction over the claim for damages?
SC RULING: NO. The NLRC has jurisdiction over Del Quero’s complaint for illegal dismissal and
damages arising therefrom.
She cannot be allowed to file separate or independent civil action for damages where the
alleged injury has a reasonable connection to her termination from employment.
Consequently, the action for damages filed before the MeTC must be dismissed.
Jurisprudence has developed the reasonable causal connection rule. Under this rule, if there
is a reasonable causal connection between the claim asserted and the employer-employee
relations, then the case is within the jurisdiction of the labor courts; in the absence of such
nexus, it is the regular courts that have jurisdiction. In the instant case, the allegations of Del
Quero in her complaint for damages show that her injury was the offshoot of Kawachi’s
immediate harsh reaction as her administrative superior to the supposedly sloppy manner by
which she had discharged her duties. The allegations in Del Quero’s complaint unmistakably
relate to the manner of her alleged illegal dismissal.
The Court further notes that for a single cause of action, the dismissed employee cannot be
allowed to sue in two forums: one, before the labor arbiter for reinstatement and recovery
of back wages; and two, before a court of justice for recovery of damages. Suing in the
manner described is known as splitting a cause of action, a practice engendering multiplicity
of actions.
19) GILDA G. LUNZAGA v. ALBAR SHIPPING AND TRADING CORP. AND/OR AKIRA KATO,
AND DARWIN, VENUS, ROMEO ULYSSES, MARIKIT ODESSA, ALL SURNAMED LUNZAGA
(Lunzaga Siblings)
G.R. No. 200476 April 18, 2012
RELAXATION OF THE TECHNICAL RULES (1-DAY LATE IN FILING AN APPEAL)
DOCTRINE: It has been said this time and again that the perfection of an appeal within the
period fixed by the rules is mandatory and jurisdictional. But, it is always in the power of this
Court to suspend its own rules, or to except a particular case from its operation, whenever
the purposes of justice require it. Strong compelling reasons such as serving the ends of
justice and preventing a grave miscarriage thereof warrant the suspension of the rules.
FACTS: Romeo Lunzaga was a seaman working for Albar Shipping. On June 11, 2008, Romeo
was assigned as Chief Engineer on board Albar's Philippine vessel MV Lake Aru. One month
later, Romeo suffered a heart attack and was repatriated to the Philippines only to die on
September 5, 2008.
Sometime in early 2009, Gilda, claiming to be the surviving spouse of Romeo, filed with the
NLRC a complaint against Albar Shipping for payment of death benefits, damages and
attorney's fees. It should be noted that Gilda was the designated heir in Romeo's Overseas
Filipino Worker Verification Sheet and PhilHealth Information Sheet. The Lunzaga sibling,
children of Romeo from his first marriage that was judicially declared null and void, opposed
the complaint through a complaint-in-intervention. The Lunzaga siblings claimed that Gilda is
not entitled to the death benefits of Romeo, as she had a subsisting marriage when she
married him. They claim that her marriage with Romeo was, therefore, bigamous. . During
the mandatory conferences of the parties before the Labor Arbiter, Albar Shipping signified
its willingness to pay Romeo's death benefits in the amount of USD 55,547.44. However, Gilda
and the Lunzaga siblings could not agree as to the sharing of the benefits.
LA RULING: The Labor Arbiter issued an Order temporarily dismissing the complaint and
directing the parties to file their case with the regular courts. Gilda appealed to the NLRC,
however, the same was made one day past the 10-day period for filing an appeal from the
decision of the Labor Arbiter
NLRC RULING: DISMISSED for filing beyond the regalamentary period.
CA RULING: AFFIRMED the decision of the NLRC
The CA ruled that despite the fact that the appeal to the NLRC was filed only one day beyond
the reglementary period, Gilda failed to present any reason for the liberal application of the
rule on filing of appeals.
ISSUE: Did the NLRC and the CA err in not giving due course to the appeal due to a one (1)-
day delay of its filing?
SC RULING: YES. Considering that the issue on whether the heirs of Romeo are entitled to
receive his death benefits from Albar Shipping properly falls under the jurisdiction of the LA,
the NLRC and the CA should have had relaxed the rigid application of the rules of procedure
to afford the parties the opportunity to fully ventilate their cases on the merits. This is in line
with the time honored principle that cases should be decided only after giving all parties the
chance to argue their causes and defenses. Technicality and procedural imperfections should
thus not serve as bases of decisions. In that way, the ends of justice would be better served.
For indeed, the general objective of procedure is to facilitate the application of justice to the
rival claims of contending parties, bearing always in mind that procedure is not to hinder but
to promote the administration of justice.
Verily, Albar Shipping is liable to the heirs of Romeo for the amount of USD 55,547.44. Albar
hereby is ordered to deposit this amount in an escrow account under the control of the NLRC
in order to protect the interests of Romeo's heirs. The parties claiming to be the beneficiaries
of Romeo are directed to file the appropriate action with a trial court.
20) Continental Micronesia v. Basso GR No. 178382-83; September 23, 2015
FACTS:
● Petitioner Continental Micronesia is a foreign corporation organized and existing
under the laws of and domiciled in the United States of America. It is licensed to do
business in the Philippines. Respondent Basso, a US citizen residing in the
Philippines, accepted an offer to be a General Manager by Mr. Braden, Managing
Director-Asia of Continental Airlines. On November 7, 1992, CMI took over the
Philippine operations of Continental, with respondent retaining his position as
General Manager. Thereafter, respondent received a letter from Mr. Schulz, who
was then CMI’s Vice President of Marketing and Sales, informing him that he was
now only agreed to work in CMI as a consultant on an “as needed basis.” Respondent
wrote a counter-proposal that was rejected by CMI.
● Respondent then filed a complaint for illegal dismissal against the petitioner
corporation. Alleging the presence of foreign elements, CMI filed a Motion to
Dismiss on the ground of lack of jurisdiction over the person of CMI and the subject
matter of the controversy.
● The Labor Arbiter agreed with CMI that the employment contract was executed in
the US “since the letter-offer was under the Texas letterhead and the acceptance of
Complainant was returned there.” Thus, applying the doctrine of lex loci
celebrationis, US laws apply. Also, applying lex loci contractus, the Labor Arbiter
ruled that the parties did not intend to apply Philippine laws.
● The NLRC ruled that the Labor Arbiter acquired jurisdiction over the case when CMI
voluntarily submitted to his office’s jurisdiction by presenting evidence, advancing
arguments in support of the legality of its acts, and praying for reliefs on the merits
of the case.
● The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over
the subject matter of the case and over the parties.
ISSUE: Whether labor tribunals have jurisdiction over the case.
HELD:
● Yes. The Court ruled that the labor tribunals had jurisdiction over the parties and the
subject matter of the case. The employment contract of Basso was replete with
references to US laws, and that it originated from and was returned to the US, do
not automatically preclude our labor tribunals from exercising jurisdiction to hear
and try this case.
● On the other hand, jurisdiction over the person of CMI was acquired through the
coercive process of service of summons. CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and participated in the proceedings
before the courts. Though a foreign corporation, CMI is licensed to do business in
the Philippines and has a local business address here. The purpose of the law in
requiring that foreign corporations doing business in the country be licensed to do
so, is to subject the foreign corporations to the jurisdiction of our courts.
● Where the facts establish the existence of foreign elements, the case presents a
conflicts-of-laws issue. Under the doctrine of forum non conveniens, a Philippine
court in a conflict-of-laws case may assume jurisdiction if it chooses to do so,
provided, that the following requisites are met: (1) that the Philippine Court is one
to which the parties may conveniently resort to; (2) that the Philippine Court is in a
position to make an intelligent decision as to the law and the facts; and (3) that the
Philippine Court has or is likely to have power to enforce its decision. All these
requisites are present here.

21) WORLD'S BEST GAS, INC., v. HENRY VITAL G.R. No. 211588, September 09, 2015
FACTS:
● Vital was one of the incorporators of WBGI, holding P500,000.00 worth of shares of
stocks therein. Vital was appointed as Internal Auditor and Personnel Manager by
WBGI's President/CEO and continued to serve as such until his mandatory
retirement.
● Vital claimed that the unpaid salaries and separation pay due him amounted to
P845,000.00 and P250,000.00, respectively, leaving a net amount of P671,156.41
payable to him. WBGI rejected Vital's claim and contended that after offsetting, Vital
actually owed it P369,156.19
● Vital filed a complaint before the NLRC Regional Arbitration for non-payment of
separation and retirement benefits, underpayment of salaries/wages and 13thmonth
pay, illegal reduction of salary and benefits, and damages.
● For its part, WBGI averred that the Labor Arbiter (LA) had no jurisdiction over the
complaint because Vital is not an employee, but a mere incorporator and stockholder
of WBGI, hence, no employer-employee relationship exists between them
● LABOR ARBITER: the LA found that the issues between Vital and WBGI are intra-
corporate in nature as they arose between the relations of a stockholder and the
corporation, and not from an employee and employer relationship. Thus, the LA
dismissed the case for lack of jurisdiction
● RTC: the RTC, acting as a special commercial court, oppositely found that Vital was
an employee of WBGI and thereby, upheld his claim. The RTC ratiocinated that since
the positions of Internal Auditor and Personnel Manager were not provided for in
WBGI's By-Laws, Vital was not a corporate officer but an employee entitled to
employment benefits. It also maintained that it had jurisdiction to rule on the main
intra-corporate controversy, together with the question of damages and
employment benefits (SC Issue: Is Vital an employee of WBGI? Held: YES)
● Aggrieved, WBGI elevated the case to the CA on appeal
● CA: CA dismissed the appeal, agreeing with the RTC's finding that Vital was an
employee of WGBI.
Issue: Who has jurisdiction?
Held: The Labor Arbiter has jurisdiction.
● the instant case actually involves three (3) distinct causes of action, but the most
important cause of action is Vital's claim for P845,000.00 and P250,000.00 in unpaid
salaries and separation pay;
○ the RTC's adjudication of the first cause of action was improper since the
same is one which arose from Vital and WBGI's employer-employee
relations, involving an amount exceeding P5,000.00, hence, belonging to
the jurisdiction of the labor arbiters pursuant to Article 217 of the Labor
Code:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
(a) Except as otherwise provided under this Code, the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-
agricultural:chanRoblesvirtualLawlibrary
XXX
�6. Except claims for Employees' Compensation, Social Security, Medicare
and maternity benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5,000.00) regardless
of whether accompanied with a claim for reinstatement.
xxxx
● Having no subject matter jurisdiction to resolve claims arising from employer-
employee relations, the RTC's ruling on Vital's claim of P845,000.00 and P250,000.00
in unpaid salaries and separation pay is, thus, null and void, and therefore, cannot
perpetuate even if affirmed on appeal.
23) MENDOZA v. OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU) G.R. No. 201595
Doctrine: Unfair Labor Practices falls within the original and exclusive jurisdiction of the Labor
Arbiters
FACTS:
● Petitioner was a member of the Manila Water Employees Union (MWEU), a DOLE-
registered labor organization consisting of rank-and-file employees within Manila
Water Company (MWC). The respondents were MWEU officers during the period
material to this Petition
● Petitioner was warned that his failure to pay the union dues would result in sanctions
upon him. A notice of hearing was sent to petitioner, who attended the scheduled
hearing. The MWEU grievance committee recommended that petitioner be
 suspended for 30 days. Petitioner appealed such decision to the General HELD: Yes, unfair labor practices falls within the original and exclusive jurisdiction of the Labor
Membership Assembly as required by their by-laws. Such appeal was not heeded Arbiters
upon for alleged petitioner lost his right to appeal . Petitioner was once more
● It is true that some of petitioner’s causes of action constitute intra-union cases
charged with non-payment of union dues and was again penalized with a 30-day
cognizable by the BLR under Article 226 of the Labor Code. However, petitioner’s
suspension. petitioner was charged with non-payment of union dues for the third
charge of unfair labor practices falls within the original and exclusive jurisdiction of
time. This time, he was meted the penalty of expulsion from the union. His pleas for
the Labor Arbiters, pursuant to Article 217 of the Labor Code. In addition, Article 247
an appeal to the General Membership Assembly were once more unheeded.
of the same Code provides that "the civil aspects of all cases involving unfair labor
● petitioner filed a Complaint against respondents for unfair labor practices, damages,
practices, which may include claims for actual, moral, exemplary and other forms of
and attorney’s fees before the NLRC and accused the respondents of illegal
damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction
termination from MWEU in connection with the events relative to his non-payment
of the Labor Arbiters."
of union dues
● Contrary to respondents’ argument that petitioner lost his right to appeal when he
● LA: case is still premature; referred the case to the General Membership Assembly
failed to petition to convene the general assembly through the required signature
● NLRC: the case involves an Inter-Intra-Union disputes which is outside the jurisdiction
of 30% of the union membership in good standing pursuant to MWEU’s Constitution
of LA and NLRC
and By-Laws or by a petition of the majority of the general membership in good
● CA: Petitioner’s causes of action against MWEU are inter/intra-union disputes
standing. this Court finds that petitioner was illegally suspended for the second time
cognizable by the BLR whose functions and jurisdiction are largely confined to union
and thereafter unlawfully expelled from MWEU due to respondents’ failure to act
matters, collective bargaining registry, and labor education.
on his written appeals.
○ "Inter-Union Dispute" refers to any conflict between and among legitimate
● For these, respondents are guilty of unfair labor practices under Article 249 (a) and
labor unions involving representation questions for purposes of collective
(b) – that is, violation of petitioner’s right to self-organization, unlawful
bargaining or to any other conflict or dispute between legitimate labor
discrimination, and illegal termination of his union membership – which case falls
unions.
within the original and exclusive jurisdiction of the Labor Arbiters, in accordance
○ "Intra-Union Dispute" refers to any conflict between and among union
with Article 217 of the Labor Code.
members, including grievances arising from any violation of the rights and
● "In essence, [unfair labor practice] relates to the commission of acts that transgress
conditions of membership, violation of or disagreement over any provision
the workers’ right to organize.""[A]ll the prohibited acts constituting unfair labor
of the union’s constitution and by-laws, or disputes arising from chartering
practice in essence relate to the workers’ right to self-organization." "[T]he term
or affiliation of union.
unfair labor practice refers to that gamut of offenses defined in the Labor Code
○ the issues arising from petitioner’s right to information on the increased
which, at their core, violates the constitutional right of workers and employees to
membership dues, right to appeal his suspension and expulsion according
self-organization.
to CBL provisions, and right to vote and be voted on are essentially intra-
union disputes; these involve violations of rights and conditions of union
24) Hijo Resources Corporation vs Mejares
membership. a determination of validity or illegality of the alleged acts
necessarily touches on union matters, not ULPs, and are outside the scope Facts:
of the labor arbiter’s jurisdiction. ● Respondents Mejares, et al. were among the complainants, represented by their
● In the instant petition, petitioner contends that respondents committed acts labor union (NAMABDJERAHRC), who filed with the NLRC an illegal dismissal case
constituting unfair labor practices – which charge was particularly laid out in his against petitioner Hijo Resources Corporation (HRC).
pleadings, but that the Labor Arbiter, the NLRC, and the CA ignored it and simply ● Complainants alleged that petitioner HRC, formerly known as Hijo Plantation
dismissed his complaint on the ground that his causes of action were intra- or inter- Incorporated (HPI), is the owner of agricultural lands in Madum, Tagum, Davao del
union in nature. Norte, which were planted primarily with Cavendish bananas. In 2000, HPI was
ISSUE: WON the LA has jurisdiction over the case? (another issue but not the main one: WON renamed as HRC. Complainants claimed that they were employed by HPI as farm
MWEU committed unfair labor practices against petitioner?)
 workers in HPI's plantations occupying various positions as area harvesters, packing case does not foreclose further dispute as to the existence or nonexistence of an
house workers, loaders, or labelers. In 2001, complainants were absorbed by HRC, employer-employee relationship between HRC and the complainants.
but they were working under the contractor-growers: Bit Farm, Djevon Farm, ISSUE: whether or not the Labor Arbiter, in the illegal dismissal case, is bound by the ruling of
Raquilla Farm. the Med-Arbiter regarding the existence or nonexistence of employer-employee relationship
● When HRC learned that complainants formed a union, the three contractor-growers between the parties in the certification election case
filed with the DOLE a notice of cessation of business operations. In September 2007, RULING OF SC:
complainants were terminated from their employment on the ground of cessation
● NO. (Ruling of CA is affirmed)
of business operations by the contractor-growers of HRC. On 19 September 2007,
● Under Article 226 of the Labor Code, as amended, the Bureau of Labor Relations
complainants, represented by NAMABDJERAHRC, filed a case for unfair labor
(BLR), of which the med-arbiter is an officer BLR has the original and exclusive
practices, illegal dismissal, and illegal deductions with prayer for moral and
jurisdiction to inter alia, decide all disputes, grievances or problems arising from or
exemplary damages and attorney's fees before the NLRC.
affecting labor-management relations in all workplaces whether agricultural or non-
● November 2007, DOLE Med-Arbiter issued an Order dismissing NAMABDJERAHRC's
agricultural. Necessarily, in the exercise of this jurisdiction over labor-management
petition for certification election on the ground that there was no employer-
relations, the med-arbiter has the authority, original and exclusive, to determine the
employee relationship between complainants and HRC. Complainants did not
existence of an employer-employee relationship between the parties.
appeal the Order of Med-Arbiter but pursued the illegal dismissal case they filed.
● Once there is a determination as to the existence of such a relationship, the med-
● HRC filed a motion to inhibit Labor Arbiter and moved to dismiss the complaint for
arbiter can then decide the certification election case. As the authority to determine
illegal dismissal alleging that the Order of the Med-Arbiter finding that complainants
the employer- employee relationship is necessary and indispensable in the exercise
were not employees of HRC, which complainants did not appeal, had become final
of jurisdiction by the med-arbiter, his finding thereon may only be reviewed and
and executory.
reversed by the Secretary of Labor who exercises appellate jurisdiction under Article
● Ruling of LA: the decision of the Med-Arbiter in a certification election case, by the
259 of the Labor Code, as amended,
nature of that proceedings, does not foreclose further dispute between the parties
● The Med-Arbiter's order in this case dismissing the petition for certification election
as to the existence or nonexistence of employer-employee relationship between
on the basis of nonexistence of employer-employee relationship was issued after
them. Thus, the finding of Med- Arbiter that no employment relationship exists
the members of the respondent union were dismissed from their employment. The
between HRC and complainants does not bar the Labor Arbiter from making his own
purpose of a petition for certification election is to determine which organization
independent finding on the same issue. Thus, Labor Arbiter denied the motion to
will represent the employees in their collective bargaining with the employer. The
dismiss and ordered the parties to file their position papers.
respondent union, without its member- employees, was thus stripped of its
● Ruling of NLRC: The NLRC granted the petition, holding that Labor Arbiter gravely
personality to challenge the Med-Arbiter's decision in the certification election case.
abused her discretion in denying HRC's motion to dismiss. It ruled that the Med-
Thus, the members of the respondent union were left with no option but to pursue
Arbiter exercises quasi-judicial power and the Med-Arbiter's decisions and orders
their illegal dismissal case filed before the Labor Arbiter. To dismiss the illegal
have, upon their finality, the force and effect of a final judgment within the purview
dismissal case filed before the Labor Arbiter on the basis of the pronouncement of
of the doctrine of res judicata.
the Med- Arbiter in the certification election case that there was no employer-
● Ruling of CA: Court of Appeals held that the certification proceedings before the
employee relationship between the parties, which the respondent union could not
Med-Arbiter are non-adversarial and merely investigative. On the other hand, under
even appeal to the DOLE Secretary because of the dismissal of its members, would
Article 217 of the Labor Code, the Labor Arbiter has original and exclusive jurisdiction
be tantamount to denying due process to the complainants in the illegal dismissal
over illegal dismissal cases. Although the proceedings before the Labor Arbiter are
case.
also described as non-litigious, the Court of Appeals noted that the Labor Arbiter is
given wide latitude in ascertaining the existence of employment relationship. Thus,
unlike the Med-Artbiter, the Labor Arbiter may conduct clarificatory hearings and 25) MILAN v. NLRC
even avail of ocular inspection to ascertain facts speedily. Facts:
● Hence, the Court of Appeals concluded that the decision in a certification election
● Petitioners are respondent Solid Mills, Inc.’s (Solid Mills) employees. They are
represented by the National Federation of Labor Unions (NAFLU), their collective
bargaining agent. Petitioners and their families were allowed to occupy SMI Village,
a property owned by Solid Mills out of liberality and for convenience of its
employees, and on the condition that the employees would vacate the premises
anytime the Company deems fit.
● In Sept 2003, petitioners were informed that Solid Mills would cease its operations
due to serious business losses and all employees of the company will be dismissed
from employment. A MOA was provided for Solid Mills’ grant of separation pay less
accountabilities, accrued sick leave benefits, vacation leave benefits, and 13th
month pay to the employees. Later, Solid Mills sent to petitioners individual notices
to vacate SMI Village. Employees who signed the MOA were considered to have
agreed to vacate SMI Village, and to the demolition of the constructed houses inside
as condition for the release of their termination benefits and separation pay.
Petitioners refused to sign the documents and demanded to be paid their benefits
and separation pay.
● Hence, petitioners filed complaints before the Labor Arbiter for alleged non-
payment of separation pay, accrued sick and vacation leaves, and 13th month pay.
They argued that their accrued benefits and separation pay should not be withheld
because their payment is based on company policy and practice. Moreover, the 13th
month pay is based on law, specifically, Presidential Decree No. 851.
● Ruling of LA: ruled in favor of petitioners. Solid Mills illegally withheld petitioners’
benefits and separation pay. Petitioners’ right to the payment of their benefits and
separation pay was vested by law and contract. The MOA stated no condition to the
effect that petitioners must vacate Solid Mills’ property before their benefits could
be given to them.
● Solid Mills appealed to the National Labor Relations Commission. It prayed for,
among others, the dismissal of the complaints against it and the reversal of the Labor
Arbiter's decision
● Ruling of NLRC: because of petitioners' failure to vacate Solid Mills' property, Solid
Mills was justified in withholding their benefits and separation pay. Solid Mills
granted the petitioners the privilege to occupy its property on account of
petitioners' employment. It had the prerogative to terminate such privilege. The
termination of Solid Mills and petitioners' employer-employee relationship made it
incumbent upon petitioners to turn over the property to Solid Mills.
● Ruling of CA: dismissed petitioners’ petition. Solid Mills' act of allowing its employees
to make temporary dwellings in its property was a liberality on its part. It may be
revoked any time at its discretion. As a consequence of Solid Mills' closure and the
resulting termination of petitioners, the employer-employee relationship between
them ceased to exist. There was no more reason for them to stay in Solid Mills'
property.
● On appeal to the SC, petitioners point out that the National Labor Relations
Commission and the Court of Appeals have no jurisdiction to declare that
petitioners' act of withholding possession of respondent Solid Mills' property is
illegal. The regular courts have jurisdiction over this issue. It is independent from the
issue of payment of petitioners' monetary benefits.
HELD:
● (The National Labor Relations Commission may preliminarily determine issues related
to rights arising from an employer-employee relationship.)
● The National Labor Relations Commission has jurisdiction to determine,
preliminarily, the parties' rights over a property, when it is necessary to determine
an issue related to rights or claims arising from an employer-employee relationship.
● Article 217 provides that the Labor Arbiter, in his or her original jurisdiction, and the
National Labor Relations Commission, in its appellate jurisdiction, may determine
issues involving claims arising from employer-employee relations.
● Petitioners' claim that they have the right to the immediate release of their benefits
as employees separated from respondent Solid Mills is a question arising from the
employer- employee relationship between the parties. Claims arising from an
employer-employee relationship are not limited to claims by an employee.
Employers may also have claims against the employee, which arise from the same
relationship.
● In Bañez v. Valdevilla, this court ruled that Article 217 of the Labor Code also applies
to employers' claim for damages, which arises from or is connected with the labor
issue. Thus:
● As a general rule, therefore, a claim only needs to be sufficiently connected to the
labor issue raised and must arise from an employer-employee relationship for the
labor tribunals to have jurisdiction.
● In this case, respondent Solid Mills claims that its properties are in petitioners'
possession by virtue of their status as its employees. Respondent Solid Mills allowed
petitioners to use its property as an act of liberality. Put in other words, it would not
have allowed petitioners to use its property had they not been its employees. The
return of its properties in petitioners' possession by virtue of their status as
employees is an issue that must be resolved to determine whether benefits can be
released immediately. The issue raised by the employer is, therefore, connected to
petitioners' claim for benefits and is sufficiently intertwined with the parties'
employer-employee relationship. Thus, it is properly within the labor tribunals'
jurisdiction.
●
26) Saudia Arabian Airlines v. Rebesencio
Facts:
● In this case, Respondents (complainants before the Labor Arbiter) were recruited
and hired by Saudia as Temporary Flight Attendants with the accreditation and
approval of the Philippine Overseas Employment Administration. After undergoing
seminars required by the Philippine Overseas Employment Administration for
deployment overseas, as well as training modules offered by Saudia (e.g., initial flight
attendant/training course and transition training), and after working as Temporary
Flight Attendants, respondents became Permanent Flight Attendants. They then
entered into Cabin Attendant contracts with Saudia: Ma. Jopette M. Rebesencio
(Ma. Jopette) on May 16, 1990; Montassah B. Sacar-Adiong (Montassah) and Rouen
Ruth A. Cristobal (Rouen Ruth) on May 22, 1993; and Loraine Schneider-Cruz
(Loraine) on August 27, 1995.
● Respondents continued their employment with Saudia until they were separated
from service on various dates in 2006. Respondents contended that the termination
of their employment was illegal. They alleged that the termination was made solely
because they were pregnant.
● Saudia anchored its disapproval of respondents’ maternity leaves and demand for
their resignation on its “Unified Employment Contract for Female Cabin Attendants”
(Unified Contract). Under the Unified Contract, the employment of a Flight
Attendant who becomes pregnant is rendered void. It provides:
● (H) Due to the essential nature of the Air Hostess functions to be physically fit on
board to provide various services required in normal or emergency cases on both
domestic/international flights beside her role in maintaining continuous safety and
security of passengers, and since she will not be able to maintain the required
medical fitness while at work in case of pregnancy, accordingly, if the Air Hostess
becomes pregnant at any time during the term of this contract, this shall render her
employment contract as void and she will be terminated due to lack of medical
fitness.(Emphasis supplied)
● On November 8, 2007, respondents filed a Complaint against Saudia and its officers
for illegal dismissal and for underpayment of salary, overtime pay, premium pay for
holiday, rest day, premium, service incentive leave pay, 13th month pay, separation
pay, night shift differentials, medical expense reimbursements, retirement benefits,
illegal deduction, lay-over expense and allowances, moral and exemplary damages,
and attorney’s fees.
Issue: Whether or not there was an illegal dismissal of the respondents?
Held: Yes, the respondents were illegally dismissed.
● The initial issue here was whether or not the Philippine courts have jurisdiction over
the case. Petitioner Saudia states that the Philippine courts have no jurisdiction and
that the law that should be applied in the instant case is Saudi Arabia law. The Court
stated that this is incorrect. The Court has jurisdiction in this case.
● The Court stated in the case;
● Saudia asserts that stipulations set in the Cabin Attendant contracts require the
application of the laws of Saudi Arabia. It insists that the need to comply with these
stipulations calls into operation the doctrine of forum non conveniens and, in turn,
makes it necessary for Philippine tribunals to refrain from exercising jurisdiction.
Forum non conveniens, like the rules of forum shopping, litis pendentia, and res
judicata, is a means of addressing the problem of parallel litigation. While the rules
of forum shopping, litis pendentia, and res judicata are designed to address the
problem of parallel litigation within a single jurisdiction, forum non conveniens is a
means devised to address parallel litigation arising in multiple jurisdictions.
● On the matter of pleading forum non conveniens, we state the rule, thus: Forum non
conveniens must not only be clearly pleaded as a ground for dismissal; it must be
pleaded as such at the earliest possible opportunity. Otherwise, it shall be deemed
waived.
● It further stated:
● Forum non conveniens finds no application and does not operate to divest Philippine
tribunals of jurisdiction and to require the application of foreign law. Saudia invokes
forum non conveniens to supposedly effectuate the stipulations of the Cabin
Attendant contracts that require the application of the laws of Saudi Arabia.
xxx
● So informed and animated, we emphasize the glaringly discriminatory nature of
Saudia’s policy. As argued by respondents, Saudia’s policy entails the termination of
employment of flight attendants who become pregnant. At the risk of stating the
obvious, pregnancy is an occurrence that pertains specifically to women. Saudia’s
policy excludes from and restricts employment on the basis of no other
consideration but sex.
● We do not lose sight of the reality that pregnancy does present physical limitations
that may render difficult the performance of functions associated with being a flight
attendant. Nevertheless, it would be the height of iniquity to view pregnancy as a
disability so permanent and immutable that it must entail the termination of one’s
employment. It is clear to us that any individual, regardless of gender, may be
subject to exigencies that limit the performance of functions. However, we fail to
appreciate how pregnancy could be such an impairing occurrence that it leaves no
other recourse but the complete termination of the means through which a woman
earns a living.
 ● Oddly enough, the petitioner Saudia themselves stated that the Saudi law does not
allow the termination of employment of women who take maternity leaves;
● Consistent with lex loci intentionis, to the extent that it is proper and practicable
(i.e., “to make an intelligent decision”), Philippine tribunals may apply the foreign
law selected by the parties. In fact, (albeit without meaning to make a
pronouncement on the accuracy and reliability of respondents’ citation) in this case,
respondents themselves have made averments as to the laws of Saudi Arabia. In
their Comment, respondents write:
● Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful
to terminate the employment of any woman by virtue of pregnancy. The law in Saudi
Arabia is even more harsh and strict [sic] in that no employer can terminate the
employment of a female worker or give her a warning of the same while on
Maternity Leave, the specific provision of Saudi Labor Laws on the matter is hereto
quoted as follows: “An employer may not terminate the employment of a female
worker or give her a warning of the same while on maternity leave.” (Article 155,
Labor Law of the Kingdom of Saudi Arabia, Royal Decree No. M/51.)
27) AMECOS INNOVATIONS, INC. and ANTONIO F. MATEO v. ELIZA R. LOPEZ G.R. No.178055 July
2, 2014
LA HAS JURISDICTION OVER CASES INVOLVING REIMBURSEMENT OF SSS CONTRIBUTION
FACTS: Amecos is a corporation engaged in the business of selling assorted products. In 2003,
a complaint was filed by the SSS against Amecos for an alleged delinquency in the remittance
of SSS contributions and penalty liabilities in violation of Section 22(a) and 22(d) in relation to
Section 28(e) of the SSS law, as amended. By way of explanation, Amecos claimed that it hired
Lopez as Marketing Assistant to promote its products; that upon hiring, Lopez refused to
provide Amecos with her SSS Number and to be deducted her contributions; that on the basis
of the foregoing, Amecos no longer enrolled Lopez with the SSS and did not deduct her
corresponding contributions up to the time of her termination in February 2002. Amecos
eventually settled its obligations with the SSS; consequently, SSS filed a Motion to Withdraw
Complaint, which was approved by the Office of the City Prosecutor. Thereafter, Amecos sent
a demand letter to Lopez for P27,791.65 representing her share in the SSS contributions and
expenses for processing, but to no avail. Thus, Amecos filed a complaint for sum of money and
damages against Lopez before the MeTC. Lopez filed her Answer with Motion to Dismiss
claiming, among others, that the regular courts do not have jurisdiction over the instant case
as it arose out of their employer-employee relationship. MeTC RULING: DISMISSED for lack of
jurisdiction RTC RULING: AFFIRMED the MeTC CA RULING: AFFIRMED the RTC
ISSUE: Does the LA have jurisdiction over cases involving the reimbursement of SSS
contribution paid by the Amecos in behalf of Lopez?
SC RULING: YES. The LA has original and exclusive jurisdiction over the matter, since the same
necessarily flowed from the employer-employee relationship between Amecos and Lopez. In
this connection, it is noteworthy to state that "the Labor Arbiter has jurisdiction to award not
only the reliefs provided by labor laws, but also damages governed by the Civil Code." At the
same time, it cannot be assumed that since the dispute concerns the payment of SSS
premiums, Amecos’ claim should be referred to the Social Security Commission (SSC). As far
as SSS is concerned, there is no longer a dispute with respect to Amecos’ accountability to the
System; Amecos already settled their pecuniary obligations to it. Since there is no longer any
dispute regarding coverage, benefits, contributions and penalties to speak of, the SSC need
not be unnecessarily dragged into the picture. Besides, it cannot be made to act as a collecting
agency for petitioners’ claims against the respondent; the Social Security Law should not be so
interpreted, lest the SSC be swamped with cases of this sort. At any rate, the complaint shall
be dismissed for lack of cause of action. Since Amecos did not remit the full SSS contributions
of Lopez, the latter was never covered by and protected under the System. If she was never
covered by the System, certainly there is no sense in making her answerable for the required
contributions during the period of her employment. And it follows as a matter of consequence
that claims for other damages founded on the foregoing non-existent cause of action should
likewise fail.
28) CACHO v. BALAGTAS [G.R. No.202974; February 7, 2018]
Petitioners: Norma D. Cacho and North Star International Travel, Inc.
Respondents: Virginia D. Balagtas
FACTS:
● Respondent Virginia D. Balagtas filed a complaint of constructive dismissal against
petitioners North Star International Travel, Inc. (North Star) and its President Norma
D. Cacho (Cacho) before the Labor Arbiter.
● Balagtas after 14 years of service in the said corporation, was placed under 30 days
preventive suspension pursuant to a Board Resolution passed by the Board of
Directors of the respondent Corporation due to her alleged questionable
transactions.
● While under preventive suspension, she wrote a letter to Norma Cacho informing
the latter that she was assuming her position as Executive Vice-President/Chief
Executive Officer effective on that date; however, she was prevented from re-
assuming her position. Consequently, she filed a complaint claiming that she was
constructively and illegally dismissed effective on April 12, 2004. In their defense,
Cacho and North Star averred that preventive suspension was meant to prevent
Balagtas from influencing potential witnesses and to protect the respondent
corporation's property. Subsequently, the Board of Directors constituted an
investigation committee tasked with the duty to impartially assess the charges
against petitioner. Cacho, et al. alleged that Balagtas violated her suspension when,
 on several occasions, she went to the corporation's office and insisted on working
despite respondent Norma Cacho's protestation. They asserted that petitioner was
not illegally dismissed but was merely placed under preventive suspension.
● The Labor Arbiter found that Balagtas was illegally dismissed from North Star but the
latter appealed to the NLRC for lack of jurisdiction. They contend that Balagtas was
never dismissed and alleged that she was a corporate officer, incorporator, and
member of the North Star's Board of Directors. Thus, the NLRC cannot take
cognizance of her illegal dismissal case, the same being an intra-corporate
controversy, which properly falls within the original and exclusive jurisdiction of the
ordinary courts.
● The NLRC ruled in favor of the petitioners. The Decision of the Labor Arbiter is
REVERSED and SET ASIDE and the complaint is DISMISSED for lack of jurisdiction.
● However, the CA affirmed the Labor Arbiter’s Decision and set aside the Decision of
the NLRC.
ISSUE:
Whether or not the present case is an intra-corporate controversy within the jurisdiction of
the regular courts or an ordinary labor dispute that the Labor Arbiter may properly take
cognizance of.
HELD:
1. Respondent Balagtas's dismissal is an intra-corporate controversy.
● A two-tier test must be employed to determine whether an intra-corporate
controversy exists in the present case, viz.: (a) the relationship test, and (b) the
nature of the controversy test.
● A dispute is considered an intra-corporate controversy under the relationship test
when the relationship between or among the disagreeing parties is any one of the
following: (a) between the corporation, partnership, or association and the public;
(b) between the corporation, partnership, or association and its stockholders,
partners, members, or officers; ( c) between the corporation, partnership, or
association and the State as far as its franchise, permit or license to operate is
concerned; and ( d) among the stockholders, partners, or associates themselves. We
must now determine whether or not the Executive Vice President position is a
corporate office so as to establish the intra-corporate relationship between the
parties.
● One shall be considered a corporate officer only if two conditions are met, viz.: ( 1)
the position occupied was created by charter/by-laws, and (2) the officer was
elected (or appointed) by the corporation's board of directors to occupy said
position.
● The Executive Vice President position is one of the corporate offices provided in
petitioner North Star's By-laws. Section 25 of the Corporation Code32 explicitly
provides for the election of the corporation's president, treasurer, secretary, and
such other officers as may be provided for in the by-laws. In interpreting this
provision, the Court has ruled that if the position is other than the corporate
president, treasurer, or secretary, it must be expressly mentioned in the bylaws in
order to be considered as a corporate office.
● North Star’s by-laws provides that there may be one or more vice president positions
in petitioner North Star and, by virtue of its by-laws, all such positions shall be
corporate offices. The next question is whether or not the phrase "one or more vice
president" in the above-cited provision of the by-laws includes the Executive Vice
President position held by respondent Balagtas.
● The use of the phrase "one or more" in relation to the establishment of vice
president positions without particular exception indicates an intention to give
petitioner North Star's Board ample freedom to make several vice president
positions available as it may deem fit and in consonance with sound business
practice. To require that particular designation/variation of each vice-president (i.e.,
executive vice president) be specified and enumerated is to invalidate the by-laws'
true intention and to encroach upon petitioner North Star's inherent right and
authority to adopt its own set of rules and regulations to govern its internal affairs.
By name, the Executive Vice President position is embraced by the phrase "one or
more vice president" in North Star's by-laws.
2. Respondent Balagtas was appointed by the Board as petitioner North Star's
Executive Vice President
● While a corporate office is created by an express provision either in the Corporation
Code or the By-laws, what makes one a corporate officer is his election or
appointment thereto by the board of directors. Thus, there must be documentary
evidence to prove that the person alleged to be a corporate officer was appointed
by action or with approval of the board. Petitioners Cacho and North Star assert that
respondent Balagtas was elected as Executive Vice President by the Board as
evidenced by the Secretary's Certificate dated April 22, 2003.
● The above-cited Secretary's Certificate overcomes respondent Balagtas's contention
that she was merely the Executive Vice President by name and was never
empowered to exercise the functions of a corporate officer. Notably, she did not
offer any proof to show that her duties, functions, and compensation were all
determined by petitioner Cacho as petitioner North Star's President.
● Respondent Balagtas also denies her status as one of petitioner North Star's
corporate officers because she was not listed as such in petitioner North Star's 2003
General Information Sheet (GIS). But the GIS neither governs nor establishes
whether or not a position is an ordinary or corporate office. At best, if one is listed
 in the GIS as an officer of a corporation, his/her position as indicated therein could
only be deemed a regular office, and not a corporate office as it is defined under the
Corporation Code.
● To be considered an intra-corporate controversy, the dismissal of a corporate officer
must have something to do with the duties and responsibilities attached to his/her
corporate office or performed in his/her official capacity.
● The termination complained of is intimately and inevitably linked to respondent
Balagtas's role as petitioner North Star's Executive Vice President: first, the alleged
misappropriations were committed by respondent Balagtas in her capacity as vice
president, one of the officers responsible for approving the disbursements and
signing the checks. And, second, these alleged misappropriations breached
petitioners Cacho's and North Star's trust and confidence specifically reposed m
respondent Balagtas as vice president. That all these incidents are adjuncts of her
corporate office lead the Court to conclude that respondent Balagtas's dismissal is
an intra-corporate controversy, not a mere labor dispute.
● All told, the issue in the present case is an intra-corporate controversy, a matter
outside the Labor Arbiter's jurisdiction.
29) PAL v. ALPAP [G.R. No. 200088; February 26, 2018]
Petitioner: Philippine Airlines, Inc. Respondent: Airline Pilots Association of the Philippines
FACTS:
● Airline Pilots Association of the Philippines (ALPAP) filed with DOLE a notice of strike
alleging that PAL committed unfair labor practice. The Secretary of DOLE (SOLE)
assumed jurisdiction over the matter and they were prohibited from staging the
strike. Despite the prohibition by the SOLE, ALP AP staged a strike on 5 June 1998. A
return-to-work order7 was issued by the SOLE on 7 June 1998, but ALPAP defied the
same and went on with their strike. Consequently, on 1 June 1999, the SOLE issued
a resolution which declared the illegality of the strike staged by ALP AP and the loss
of employment status of the officers who participated in the strike.
● After almost eight (8) months from the finality of the Court's 10 April 2002
Resolution, PAL filed before the LA a complaint for damages against ALP AP, as well
as some of its officers and members. PAL alleged, among others, that on the second
day of the illegal strike conducted by ALPAP, its striking pilots abandoned three (3)
PAL aircraft. Because of the deliberate and malicious abandonment of the said
flights, its passengers were stranded, and rendered PAL liable for violation of its
contract of carriage. PAL further alleged that its operation was crippled by the illegal
strike resulting in several losses from ticket refunds, extraordinary expenses to cope
with the shutdown situation, and lost income from the cancelled domestic and
international flights. PAL claimed that, as a result of the illegal strike, it suffered
actual damages in the amount of P731,078,988.59. PAL further prayed that it be
awarded P300,000,000.00 and P3,000,000.00 as exemplary damages and attorney's
fees, respectively.
● The LA dismissed PAL's complaint. It ruled that it had no jurisdiction to resolve the
issue on damages. The NLRC affirmed with modification the LA's 22 April 2008
decision. It ruled that labor tribunals have no jurisdiction over the claims interposed
by PAL. It opined that the reliefs prayed for by PAL should have been ventilated
before the regular courts considering that they are based on the tortuous acts
allegedly committed by the respondents.
● The CA partially granted PAL' s petition. It ruled that while the NLRC correctly
sustained the LA's dismissal of the complaint for lack of jurisdiction, it declared that
the NLRC gravely abused its discretion when it affirmed the LA's pronouncement
that PAL's cause of action had already prescribed. It ratiocinated that while Article
263(g) of the Labor Code vests in the SOLE the authority to resolve all questions and
controversies arising from a labor dispute over which it assumed jurisdiction, said
authority must be interpreted to cover only those causes of action which are based
on labor laws
ISSUE: Whether the NLRC and the labor arbiter have jurisdiction over PAL's claims against the
respondents for damages incurred as a consequence of the latter's actions during the illegal
strike.
HELD:
Labor tribunals have jurisdiction over actions for damages arising from a labor strike.
● Under Article 21 7 [now Article 224] of the Labor Code, as amended by Section 9 of
R.A. No. 6715, the LA and the NLRC have jurisdiction to resolve cases involving claims
for damages arising from employer-employee relationship.
● A money claim by a worker against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relations. Only if there is such
a connection with the other claims can the claim for damages be considered as
arising from employer-employee relations.18 Absent such a link, the complaint will
be cognizable by the regular courts.
● The Court agrees with PAL that its claim for damages has reasonable connection with
its employer-employee relationship with the respondents. The claimed damages
arose from the illegal strike and acts committed during the same which were in tum
closely related and intertwined with the respondents' allegations of unfair labor
practices against PAL.
 ● Since the loss and injury from which PAL seeks compensation have reasonable causal
connection with the alleged acts of unfair labor practice, a claim provided for in
Article 21 7 of the Labor Code, the question of damages becomes a labor
controversy and is therefore an employment relationship dispute. The regular courts
do not have jurisdiction over PAL's claim of damages, the same being intertwined
with its labor dispute with the respondents over which the SOLE had assumed
jurisdiction. 1t is erroneous, therefore, for the CA to even suggest that PAL's
complaint should have been ventilated before the trial court.
A separate complaint for damages runs counter to the rule against split jurisdiction.
● While there is merit in the contention that regular courts do not have jurisdiction
over claims for damages arising from a labor controversy, the Court opines that PAL
could no longer recover the alleged damages.
● It must be recalled that the SOLE assumed jurisdiction over the labor dispute
between PAL and the respondents on 23 December 1997. In this regard, it is settled
that the authority of the SOLE to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to national interest
includes and extends to all questions and controversies arising therefrom. It has also
been opined that when the very reason for the SOLE's assumption of jurisdiction is
the declaration of strike, any issue regarding the strike is not merely incidental to
but is essentially involved in the labor dispute itself. When the SOLE assumed
jurisdiction over the labor dispute, the claim for damages was deemed included
therein. Thus, the issue on damages was also deemed resolved when the SOLE
decided the main controversy in its 1 June 1999 resolution declaring the illegality of
the strike and the loss of employment status of the striking officers of ALP AP, as well
as when the case was finally settled by this Court in its 10 April 2002 Resolution in
G.R. No. 152306. This is true even if the respective resolutions of the SOLE, CA, and
this Court were silent with respect to the damages.
● PAL's claim for damages is barred under the doctrine of immutability of final
judgment. Under the said doctrine, a decision that has acquired finality becomes
immutable and unalterable, and may no longer be modified in any respect, even if
the modification is meant to correct erroneous conclusions of fact and law, and
whether it is made by the court that rendered it or by the Highest Court of the land.
Any act which violates this principle must immediately be struck down.
● Whether the damages claimed by PAL are recoverable and to what extent would
depend on the evidence in the illegal strike case which had long attained finality.
PAL's recovery, therefore, would entail a relitigation of the illegal strike case. The
subject claim for damages would ultimately require the modification of a final
judgment. This cannot be done. The dismissal of the present petition as well as the
complaint for damages is therefore in order.
● PAL did not assert its claim during the proceedings before the SOLE and, instead,
acted on it only after the decision on the main case attained finality. This is a grave
error on the part of PAL. The proper recourse for PAL should have been to assert its
claim for damages before the SOLE and, as aptly stated by the LA, to elevate the case
to the CA when the SOLE failed to rule on the matter of damages.
● In sum, the Court finds meritorious PAL's claim that the CA erred in its decision.
Indeed, the CA erred when it ruled that regular courts have jurisdiction to entertain
claims for damages arising from strike as the same violates the proscription against
splitting of jurisdiction. The Court, however, also finds that the LA was already
divested of its jurisdiction to entertain PAL's claim for damages as such issue was
deemed included in the issue of legality of strike of which the SOLE had assumed
jurisdiction, pursuant to the rule against splitting of jurisdiction. Unfortunately, for
PAL's failure to raise the claim during the pendency of the illegal strike case before
the SOLE, the same is deemed waived.
30) LRTA v. ALVAREZ
FACTS:
● LRTA is a GOCC created by virtue of EO 603, for the purpose of the construction,
operation, maintenance, and/or lease of light rail transit system in the Philippines.
Private respondents Bienvenido R. Alvarez, Carlos S. Velasco, Ascencion A.
Gargalicano, Marlon E. Aguinaldo, Petronilo T. Legaspi, Bonifacio A. Estopia, Andre
A. Dela Merced, Jose Novier D. Bayot, Rolando C. Amazona and Marlino G. Herrera
are former employees of Meralco Transit Organization, Inc. (METRO).
● -On June 8, 1984, METRO and LRTA entered into an agreement called "Agreement
for the Management and Operation of the Light Rail Transit System" (AMO-LRTS) for
the operation and management of the light rail transit system. LRTA shouldered and
provided for all the operating expenses of METRO. Also, METRO signed a Collective
Bargaining Agreement (CBA) with its employees wherein provisions on wage
increases and benefits were approved by LRTA's Board of Directors.
● -On April 7, 1989, the Commission on Audit (COA) nullified and voided the AMO-
LRTS.To resolve the issue, LRTA decided to acquire METRO by purchasing all of its
shares of stocks on June 8, 1989. METRO, thus, became a wholly-owned subsidiary
of LRTA. Since then, METRO has been renamed to Metro Transit Organization, Inc.
LRTA and METRO declared and continued the implementation of the AMO-LRTS and
the non-interruption of employment relations of the employees of METRO. They
likewise continued the establishment and funding of the Metro, Inc. Employees
Retirement Plan which covers the past services of all METRO regular employees from
the date of their employment. They confirmed that all CBAs remained in force and
 effect. LRTA then sanctioned the CBA's of the union of rank and file employees and
the union of supervisory employees.
● -On November 17, 1997, the METRO general manager (who was appointed by LRTA)
announced in a memorandum that its board of directors approved the
severance/resignation benefit of METRO employees at one and a half (1 1/2) months
salaries for every year of service.
● -On July 25, 2000, the union of rank and file employees of METRO declared a STRIKE
over a retirement fund dispute. By virtue of its ownership of METRO, LRTA assumed
the obligation to update the Metro, Inc. Employees Retirement Fund with the
Bureau of Treasury.
● -On September 30, 2000, LRTA stopped the operation of METRO. On April 5, 2001,
METRO's Board of Directors approved the release and payment of the first fifty
percent (50%) of the severance pay to the displaced METRO employees, including
private respondents, who were issued certifications of eligibility for severance pay
along with the memoranda to receive the same.
● LRTA earmarked an amount of P271,000,000.00 for the severance pay of METRO
employees in its approved corporate budget for the year 2002. However, METRO
only paid the first fifty percent (50%) of the severance pay of private respondents.
● Private respondents repeatedly and formally asked LRTA, being the principal owner
of METRO, to pay the balance of their severance pay, but to no avail.Thus, they filed
a complaint before the Arbitration Branch of the NLRC praying for the payment of
13th month pay, separation pay, and refund of salary deductions.
● LA: ruled in favor of private respondents. LA adopted the ruling in LRTA v. NLRC,
Ricardo B. Malanao, et al. Malanao ordered respondents LRTA and METRO to jointly
and severally pay the balance of the severance pay of the complainants therein.
● On September 29, 2005, LRTA and METRO separately appealed the LA's Decision
before the NLRC.
● NLRC: dismissed METRO's appeal for failure to file the required appeal bond and
sustained the Decision of the LA in toto, and therefore dismissed LRTA's appeal for
lack of merit.
● LRTA filed a Petition for Certiorari with the CA.
● CA: since LRTA failed to comply with the mandatory appeal bond, it lost its right to
appeal. On the merits of the case, the CA noted that the monetary claims emanated
from the CBA; hence, the controversy must be settled in light of the CBA. As the CBA
controls, it is clear that LRTA has to pay the remaining fifty percent (50%) of the
retirement benefits due to the private respondents. The CA held that whether the
NLRC has jurisdiction to hear the case, the result would be the same: that LRTA has
financial obligations to private respondents.
● Finally, on the issue of jurisdiction, the CA found that METRO, even if it is a subsidiary
of LRTA, remains a private corporation. This being the case, the money claim brought
against it falls under the original and exclusive jurisdiction of the LA. Also, the CA
agreed with the NLRC that the principle of stare decisis applies to this case. The NLRC
applied the CA's Decision in Malanao, ruling that LRTA is liable for the fifty percent
(50%) balance of the separation pay of the private respondents therein.
ISSUE: WON CA erred in ruling that the LA and NLRC have jurisdiction over LRTA
HELD: The LA and the NLRC have jurisdiction over private respondents' money claims.
● LRTA's reliance on LRTA v. Venus is misplaced. Venus involves the illegal dismissal of
the complainants. The proceedings a quo is not for an illegal dismissal case, but for
the monetary claims of respondents against METRO and LRTA. Thus, unlike in Venus,
this case does not involve the issue of respondents' employment with METRO or
LRTA. In fact, in Mendoza, this Court held, "[a]s we see it, the jurisdictional issue
should not have been brought up in the first place because the respondents' claim
does not involve their employment with LRTA. There is no dispute on this aspect of
the case. The respondents were hired by METRO and, were, therefore its
employees."
● The only issue, therefore, as in LRTA v. Mendoza, is whether LRTA can be made liable
by the labor tribunals for private respondents' money claim despite the absence of
an employer-employee relationship, and though LRTA is a GOCC.
● We rule in the affirmative. In Mendoza, this Court upheld the jurisdiction of the labor
tribunals over LRTA, citing PNB v. Pabalan:
● x x x By engaging in a particular business thru the instrumentality of a corporation,
the government divests itself pro hac vice of its sovereign character, so as to render
the corporation subject to the rules of law governing private corporations.
● This Court further ruled that LRTA must submit itself to the provisions governing
private corporations, including the Labor Code, for having conducted business
through a private corporation, in this case, METRO.
● In this case, the NLRC accordingly declared, "[LRTA's] contractual commitments with
[METRO] and its employees arose out of its business relations with [METRO] which
is private in nature. Such private relation was not changed notwithstanding the
subsequent acquisition by [LRTA] of full ownership of [METRO] and take-over of its
business operations at LRT."
● PETITION DENIED.