FRANCISCO VS. NLRC ET AL
FACTS:
1995, Petitioner was hired by Kasei Corporation during its incorporation stage.
She was designated as Accountant and Corporate Secretary and was assigned to
handle all the accounting needs of the company. She was also designated as
Liaison Officer to the City of Makati to secure business permits, construction
permits and other licenses for the initial operation of the company.
Although she was designated as Corporate Secretary, she was not entrusted with
the corporate documents; neither did she attend any board meeting nor required
to do so. She never prepared any legal document and never represented the
company as its Corporate Secretary. 1996, petitioner was designated Acting
Manager. Petitioner 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.
January 2001, petitioner was replaced by a certain Liza R. Fuentes as Manager.
Kasei Corporation reduced her salary, she was not paid her mid-year bonus
allegedly because the company was not earning well. On October 2001,
petitioner did not receive her salary from the company. She made repeated
follow-ups with the company cashier but she was advised that the company was
not earning well. Eventually she was informed that she is no longer connected
with the company.
Since she was no longer paid her salary, petitioner did not report for work and
filed an action for constructive dismissal before the labor arbiter. Private
respondents averred that petitioner is not an employee of Kasei Corporation.
They alleged that petitioner was hired in 1995 as one of its technical consultants
on accounting matters and act concurrently as Corporate Secretary. As technical
consultant, petitioner performed her work at her own discretion without control
and supervision of Kasei Corporation. Petitioner had no daily time record and
she came to the office any time she wanted and that her services were only
temporary in nature and dependent on the needs of the corporation.
The Labor Arbiter found that petitioner was illegally dismissed, NLRC affirmed
with modification the Decision of the Labor Arbiter. On appeal, CA reversed the
NLRC decision. CA denied petitioner’s MR, hence, the present recourse.
ISSUES:
1. WON there was an employer-employee relationship between petitioner
and private respondent; and if in the affirmative,
BAUTISTA, Coleen Joyce Q. Page 1 of 58
2. Whether petitioner was illegally dismissed.
RULING:
1. Generally, courts have relied on the so-called right of control test where
the person for whom the services are performed reserves a right to
control not only the end to be achieved but also the means to be used in
reaching such end. In addition to the standard of right-of-control, the
existing economic conditions prevailing between the parties, like the
inclusion of the employee in the payrolls, can help in determining the
existence of an employer-employee relationship.
There are instances when, aside from the employer’s power to control the
employee, 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.
It is better, therefore, to adopt a two-tiered test involving: (1) the employer’s
power to control; and (2) the economic realities of the activity or relationship.
The control test means that 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.
There has to be analysis of the totality of economic circumstances of the worker.
Thus, 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 employer’s
business; (2) the extent of the worker’s investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer; (4) the worker’s
opportunity for profit and loss; (5) the amount of initiative, skill, judgment or
foresight required for the success of the claimed independent enterprise; (6) the
permanency and 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, it can be said that petitioner is an employee of
Kasei Corporation because she was under the direct control and supervision of
Seiji Kamura, the corporation’s Technical Consultant. She reported for work
regularly and served in various capacities as Accountant, Liaison Officer,
Technical Consultant, Acting Manager and Corporate Secretary, with
substantially the same job functions, that is, rendering accounting and tax
services to the company and performing functions necessary and desirable for
the proper operation of the corporation such as securing business permits and
other licenses over an indefinite period of engagement. Respondent corporation
had the power to control petitioner with the means and methods by which the
work is to be accomplished.
Under the economic reality test, the petitioner can also be said to be an employee
of respondent corporation because she had served the company for 6 yrs. 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. When petitioner was designated General Manager,
respondent corporation made a report to the SSS. Petitioner’s membership in the
SSS evinces the existence of an employer-employee relationship between
petitioner and respondent corporation. The coverage of Social Security Law is
predicated on the existence of an employer-employee relationship.
2. The corporation constructively dismissed petitioner when it reduced
her. This amounts to an illegal termination of employment, where the
petitioner is entitled to full backwages
A diminution of pay is prejudicial to the employee and amounts to constructive
dismissal. Constructive dismissal is an involuntary resignation resulting in
cessation of work resorted to when continued employment becomes impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution in
pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to an employee. Petition is GRANTED.
SONZA vs. ABS-CBN
Facts: In May 1994, 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 its EVP and treasurer.
Referred to in the agreement as agent, MJMDC agreed to provide Sonza’s
services exclusively to ABS-CBN as talent for radio and television. ABS-CBN
agreed to pay Sonza a monthly talent fee of P310, 000 for the first year and
P317, 000 for the second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned
in view of the recent events concerning his program and career. After the said
letter, Sonza filed with the Department of Labor and Employment a complaint
alleging that ABS-CBN did not pay his salaries, separation pay, service incentive
pay,13th month pay, signing bonus, travel allowance and amounts under the
Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-
employer relationship existed between the parties. However, ABS-CBN
continued to remit Sonza’s monthly talent fees but opened another account for
the same purpose.
BAUTISTA, Coleen Joyce Q. Page 2 of 58
The Labor Arbiter dismissed the complaint and found that there is no employee-
employer relationship. NLRC affirmed the decision of the Labor Arbiter. CA
also affirmed the decision of NLRC.
Issue: Whether or not there was employer-employee relationship between the
parties.
Ruling: Case law has consistently held that the elements of an employee-
employer relationship are selection and engagement of the employee, the
payment of wages, the power of dismissal and 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.
Sonza’s services to co-host its television and radio programs are because of his
peculiar talents, skills 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. All the talent fees and benefits paid to SONZA were the result of
negotiations that led to the Agreement. For violation of any provision of the
Agreement, either party may terminate their relationship. Applying the control
test to the present case, we find that SONZA is not an employee but an
independent contractor.
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. The
converse holds true as well – the less control the hirer exercises, the more likely
the worker is considered an independent contractor. To perform his work,
SONZA only needed his skills and talent. How SONZA delivered his lines,
appeared on television, and sounded on radio were outside ABS-CBN’s control.
ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely
reserved the right to modify the program format and airtime schedule "for more
effective programming." ABS-CBN’s sole concern was the quality of the shows
and their standing in the ratings.
Clearly, ABS-CBN did not exercise control over the means and methods of
performance of Sonza’s work. A radio broadcast specialist who works under
minimal supervision is an independent contractor. Sonza’s work as television
and radio program host required special skills and talent, which SONZA
admittedly possesses.
ABS-CBN claims that there exists a prevailing practice in the broadcast and
entertainment industries to treat talents like Sonza as independent contractors.
The right of labor to security of tenure as guaranteed in the Constitution arises
only if there is an employer-employee relationship under labor laws. Individuals
with special skills, expertise or talent enjoy the freedom to offer their services as
independent contractors. The right to life and livelihood guarantees this freedom
to contract as independent contractors. The right of labor to security of tenure
cannot operate to deprive an individual, possessed with special skills, expertise
and talent, of his right to contract as an independent contractor.
BITOY JAVIER (DANILO P. JAVIER), Petitioner, v. FLY ACE
CORPORATION and FLORDELYN CASTILLO, Respondents.


FACTS: Javier an employee of Fly Ace performing various work for the latter
filed a complaint before the NLRC for underpayment of salaries and other labor
standard benefits.
 the control test.
He alleged 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 pay slips by the company; that he
reported for work but he was no longer allowed to enter the company premises
by the security guard upon the instruction of Ruben Ong (Mr. Ong), his superior;
that after several minutes of begging to the guard to allow him to enter, he saw
Ong whom he approached and asked why he was being barred from entering the
premises; that Ong replied by saying, Tanungin mo anak mo;that he discovered
that Ong had been courting his daughter Annalyn after the two met at a fiesta
celebration in Malabon City; that Annalyn tried to talk to Ong and convince him
to spare her father from trouble but he refused to accede; 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 p, Fly Ace denied the existence of employer-employee relationship
between them and Javier as the latter was only called roughly 5 to 6 times only
in a month whenever the vehicle of its contracted hauler, Milmar Hauling
Services, was not available. Labor Arbiter dismissed the complaint ruling that
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.

On appeal, NLRC reversed the decisin of the LA. 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. The NLRC further averred that it did not
follow that a worker was a job contractor and not an employee, just because the
work he was doing was not directly related to the employers trade or business or
the work may be considered as extra helper as in this case; and that the
BAUTISTA, Coleen Joyce Q. Page 3 of 58
relationship of an employer and an employee was determined by law and the
same would prevail whatever the parties may call it. Finding Javier to be a
regular employee, the NLRC ruled that he was entitled to a security of tenure.
For failing to present proof of a valid cause for his termination, Fly Ace was
found to be liable for illegal dismissal of Javier who was likewise entitled to
backwages and separation pay in lieu of reinstatement. However, on appeal, CA
reversed the ruling of NLRC

The CA ruled that Javiers failure to present salary vouchers, payslips, or other
pieces of evidence to bolster his contention, pointed to the inescapable
conclusion that he was not an employee of Fly Ace. Further, it found that Javiers
work was not necessary and desirable to the business or trade of the company, as
it was only when there were scheduled deliveries, which a regular hauling
service could not deliver, that Fly Ace would contract the services of Javier as an
extra helper. Lastly, the CA declared that the facts alleged by Javier did not pass


He contracted work outside the company premises; he was not required to
observe definite hours of work; he was not required to report daily; and he was
free to accept other work elsewhere as there was no exclusivity of his contracted
service to the company, the same being co-terminous with the trip only. Since no
substantial evidence was presented to establish an employer-employee
relationship, the case for illegal dismissal could not prosper. Hence, this appeal.



ISSUE:



Does an employer-employee relationship exist between Javier and Fly Ace,
thereby holding the latter guilty of illegal dismissal?
HELD: As the records bear out, the LA and the CA found Javiers claim of
employment with Fly Ace as wanting and deficient. The Court is constrained to
agree. Labor officials are enjoined to use reasonable means to ascertain the facts
speedily and objectively with little regard to technicalities or formalities but
nowhere in the rules are they provided a license to completely discount
evidence, or the lack of it. The quantum of proof required, however, must still be
satisfied. Hence, when confronted with conflicting versions on factual matters, it
is for them in the exercise of discretion to determine which party deserves
credence on the basis of evidence received, subject only to the requirement that
their decision must be supported by substantial evidence.Accordingly, the
petitioner needs to show by substantial evidence that he was indeed an employee
of the company against which he claims illegal dismissal.

In sum, 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.

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. Sometime in 1983 and 1984, SanMig entered into contracts for merchandising
Clearly, Javier failed to pass the substantiality requirement to support his claim. services with Lipercon and D'Rite (Annexes K and I, SanMig's Comment,
Hence, the Court sees no reason to depart from the findings of the CA.
 respectively). These companies are independent contractors duly licensed by the

 Department of Labor and Employment (DOLE). SanMig entered into those
While Javier remains firm in his position that as an employed stevedore of Fly contracts to maintain its competitive position and in keeping with the
Ace, he was made to work in the company premises during weekdays arranging imperatives of efficiency, business expansion and diversity of its operation. In
and cleaning grocery items for delivery to clients, no other proof was submitted said contracts, it was expressly understood and agreed that the workers
to fortify his claim. The lone affidavit executed by one Bengie Valenzuela was employed by the contractors were to be paid by the latter and that none of them
unsuccessful in strengthening Javiers cause.
 were to be deemed employees or agents of SanMig. There was to be no
The Court is of the considerable view that on Javier lies the burden to pass the employer-employee relation between the contractors and/or its workers, on the
well-settled tests to determine the existence of an employer-employee one hand, and SanMig on the other.
relationship, viz: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for
employees conduct. Of these elements, the most important criterion is whether brevity) is the duly authorized representative of the monthly paid rank-and-file
the employer controls or has reserved the right to control the employee not only employees of SanMig with whom the latter executed a Collective Bargaining
as to the result of the work but also as to the means and methods by which the Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's
result is to be accomplished.
 Comment). Section 1 of their CBA specifically provides that "temporary,
DENIED probationary, or contract employees and workers are excluded from the
bargaining unit and, therefore, outside the scope of this Agreement."
In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, SanMig that some Lipercon and D'Rite workers had signed up for union
DANIEL S.L. BORBON II, HERMINIA REYES, MARCELA membership and sought the regularization of their employment with SMC. The
PURIFICACION, ET AL., petitioners, 
 Union alleged that this group of employees, while appearing to be contractual
vs.
 workers supposedly independent contractors, have been continuously working
HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING for SanMig for a period ranging from six (6) months to fifteen (15) years and
JUDGE OF BRANCH 166, RTC, PASIG, and SAN MIGUEL that their work is neither casual nor seasonal as they are performing work or
CORPORATION, respondents. 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
MELENCIO-HERRERA, J.: demanded that the employment status of these workers be regularized.
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to On 12 January 1989 on the ground that it had failed to receive any favorable
task by petitioners in this special civil action for certiorari and Prohibition for response from SanMig, the Union filed a notice of strike for unfair labor
having issued the challenged Writ of Preliminary Injunction on 29 March 1989 practice, CBA violations, and union busting (Annex D, Petition).
in Civil Case No. 57055 of his Court entitled "San Miguel Corporation vs.
SMCEU-PTGWO, et als." On 30 January 1989, the Union again filed a second notice of strike for unfair
labor practice (Annex F, Petition).
Petitioners' plea is that said Writ was issued without or in excess of jurisdiction
and with grave abuse of discretion, a labor dispute being involved. Private As in the first notice of strike. Conciliatory meetings were held on the second
respondent San Miguel Corporation (SanMig. for short), for its part, defends the notice. Subsequently, the two (2) notices of strike were consolidated and several
Writ on the ground of absence of any employer-employee relationship between it conciliation conferences were held to settle the dispute before the National
and the contractual workers employed by the companies Lipercon Services, Inc. Conciliation and Mediation Board (NCMB) of DOLE (Annex G, Petition).
(Lipercon) and D'Rite Service Enterprises (D'Rite), besides the fact that the
Union is bereft of personality to represent said workers for purposes of Beginning 14 February 1989 until 2 March 1989, series of pickets were staged
collective bargaining. The Solicitor General agrees with the position of SanMig. by Lipercon and D'Rite workers in various SMC plants and offices.

The antecedents of the controversy reveal that:

BAUTISTA, Coleen Joyce Q. Page 4 of 58
On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages
before respondent Court to enjoin the Union from:
a. representing and/or acting for and in behalf of the employees of LIPERCON
and/or D'RITE for the purposes of collective bargaining;
b. calling for and holding a strike vote, to compel plaintiff to hire the employees
or workers of LIPERCON and D'RITE;
c. inciting, instigating and/or inducing the employees or workers of LIPERCON
and D'RITE to demonstrate and/or picket at the plants and offices of plaintiff
within the bargaining unit referred to in the CBA,...;
d. staging a strike to compel plaintiff to hire the employees or workers of
LIPERCON and D'RITE;
e. using the employees or workers of LIPERCON AND D'RITE to man the
strike area and/or picket lines and/or barricades which the defendants may set up
at the plants and offices of plaintiff within the bargaining unit referred to in the
CBA ...;
f. intimidating, threatening with bodily harm and/or molesting the other
employees and/or contract workers of plaintiff, as well as those persons lawfully
transacting business with plaintiff at the work places within the bargaining unit
referred to in the CBA, ..., to compel plaintiff to hire the employees or workers
of LIPERCON and D'RITE;
g. blocking, preventing, prohibiting, obstructing and/or impeding the free ingress
to, and egress from, the work places within the bargaining unit referred to in the
CBA .., to compel plaintiff to hire the employees or workers of LIPERCON and
D'RITE;
h. preventing and/or disrupting the peaceful and normal operation of plaintiff at
the work places within the bargaining unit referred to in the CBA, Annex 'C'
hereof, to compel plaintiff to hire the employees or workers of LIPERCON and
D'RITE. (Annex H, Petition)
Respondent Court found the Complaint sufficient in form and substance and
issued a Temporary Restraining Order for the purpose of maintaining the status
quo, and set the application for Injunction for hearing.
In the meantime, on 13 March 1989, 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. That Motion was denied by
respondent Judge in an Order dated 11 April 1989.
After several hearings on SanMig's application for injunctive relief, where the
parties presented both testimonial and documentary evidence on 25 March 1989,
BAUTISTA, Coleen Joyce Q. Page 5 of 58
respondent Court issued the questioned Order (Annex A, Petition) granting the
application and enjoining the Union from Committing the acts complained
of, supra. Accordingly, on 29 March 1989, respondent Court issued the
corresponding Writ of Preliminary Injunction after SanMig had posted the
required bond of P100,000.00 to answer for whatever damages petitioners may
sustain by reason thereof.
In issuing the Injunction, respondent Court rationalized:
The absence of employer-employee relationship negates the existence of labor
dispute. Verily, this court has jurisdiction to take cognizance of plaintiff'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. This necessitates
a full-blown trial. If the acts complained of are not restrained, plaintiff would,
undoubtedly, suffer irreparable damages. Upon the other hand, a writ of
injunction does not necessarily expose defendants to irreparable damages.
Evidently, plaintiff has established its right to the relief demanded. (p. 21, Rollo)
Anchored on grave abuse of discretion, petitioners are now before us seeking
nullification of the challenged Writ. On 24 April 1989, we issued a Temporary
Restraining Order enjoining the implementation of the Injunction issued by
respondent Court. The Union construed this to mean that "we can now strike,"
which it superimposed on the Order and widely circulated to entice the Union
membership to go on strike. Upon being apprised thereof, in a Resolution of 24
May 1989, we required the parties to "RESTORE the status quo ante declaration
of strike" (p. 2,62 Rollo).
In the meantime, however, or on 2 May 1989, the Union went on strike.
Apparently, some of the contractual workers of Lipercon and D'Rite had been
laid off. The strike adversely affected thirteen (13) of the latter's plants and
offices.
On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called
the parties to conciliation. The Union stated that it would lift the strike if the
thirty (30) Lipercon and D'Rite employees were recalled, and discussion on their
other demands, such as wage distortion and appointment of coordinators, were
made. Effected eventually was a Memorandum of Agreement between SanMig
and the Union that "without prejudice to the outcome of G.R. No. 87700 (this
case) and Civil Case No. 57055 (the case below), the laid-off individuals ... shall
be recalled effective 8 May 1989 to their former jobs or equivalent positions
under the same terms and conditions prior to "lay-off" (Annex 15, SanMig
Comment). In turn, the Union would immediately lift the pickets and return to
work.
After an exchange of pleadings, this Court, on 12 October 1989, gave due course
to the Petition and required the parties to submit their memoranda
simultaneously, the last of which was filed on 9 January 1990.
The focal issue for determination is whether or not respondent Court correctly
assumed jurisdiction over the present controversy and properly issued the Writ
of Preliminary Injunction to the resolution of that question, is the matter of
whether, or not the case at bar involves, or is in connection with, or relates to a
labor dispute. An affirmative answer would bring the case within the original
and exclusive jurisdiction of labor tribunals to the exclusion of the regular
Courts.
Petitioners take the position that 'it is beyond dispute that the controversy in the
court a quo involves or arose out of a labor dispute and is directly connected or
interwoven with the cases pending with the NCMB-DOLE, and is thus beyond
the ambit of the public respondent's jurisdiction. That the acts complained of
(i.e., the mass concerted action of picketing and the reliefs prayed for by the
private respondent) are within the competence of labor tribunals, is beyond
question" (pp. 6-7, Petitioners' Memo).
On the other hand, SanMig denies the existence of any employer-employee
relationship and consequently of any labor dispute between itself and the Union.
SanMig submits, in particular, that "respondent Court is vested with jurisdiction
and judicial competence to enjoin the specific type of strike staged by petitioner
union and its officers herein complained of," for the reasons that:
A. The exclusive bargaining representative of an employer unit cannot strike to
compel the employer to hire and thereby create an employment relationship with
contractual workers, especially were the contractual workers were recognized by
the union, under the governing collective bargaining agreement, as excluded
from, and therefore strangers to, the bargaining unit.
B. A strike is a coercive economic weapon granted the bargaining representative
only in the event of a deadlock in a labor dispute over 'wages, hours of work and
all other and of the employment' of the employees in the unit. The union leaders
cannot instigate a strike to compel the employer, especially on the eve of
certification elections, to hire strangers or workers outside the unit, in the hope
the latter will help re-elect them.
BAUTISTA, Coleen Joyce Q. Page 6 of 58
C. Civil courts have the jurisdiction to enjoin the above because this specie of
strike does not arise out of a labor dispute, is an abuse of right, and violates the
employer's constitutional liberty to hire or not to hire. (SanMig's Memorandum,
pp. 475-476, Rollo).
We find the Petition of a meritorious character.
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."
While it is SanMig's submission that no employer-employee relationship exists
between itself, on the one hand, and the contractual workers of Lipercon and
D'Rite on the other, a labor dispute can nevertheless exist "regardless of whether
the disputants stand in the proximate relationship of employer and
employee" (Article 212 [1], Labor Code, supra) provided the controversy
concerns, among others, the terms and conditions of employment or a "change"
or "arrangement" thereof (ibid). Put differently, and as defined by law, 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.
That a labor dispute, as defined by the law, does exist herein is evident. At
bottom, what the Union seeks is to regularize the status of the employees
contracted by Lipercon and D'Rite in effect, that they be absorbed into the
working unit of SanMig. This matter definitely dwells on the working
relationship between said employees vis-a-vis SanMig. Terms, tenure and
conditions of their employment and the arrangement of those terms are thus
involved bringing the matter within the purview of a labor dispute. Further, the
Union also seeks to represent those workers, who have signed up for Union
membership, for the purpose of collective bargaining. SanMig, for its part,
resists that Union demand on the ground that there is no employer-employee
relationship between it and those workers and because the demand violates the
terms of their CBA. Obvious then is that representation and association, for the
purpose of negotiating the conditions of employment are also involved. In fact,
the injunction sought by SanMig was precisely also to prevent such
representation. Again, the matter of representation falls within the scope of a
labor dispute. Neither can it be denied that the controversy below is directly
connected with the labor dispute already taken cognizance of by the NCMB-
DOLE (NCMB-NCR- NS-01- 021-89; NCMB NCR NS-01-093-83).
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 cause's of action in the Court below are inextricably linked with those
issues.
The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13
SCRA 738) relied upon by SanMig is not controlling as in that case there was no
controversy over terms, tenure or conditions, of employment or the
representation of employees that called for the application of labor laws. In that
case, what the petitioning union demanded was not a change in working terms
and conditions, or the representation of the employees, but that its members be
hired as stevedores in the place of the members of a rival union, which
petitioners wanted discharged notwithstanding the existing contract of the
arrastre company with the latter union. Hence, the ruling therein, on the basis of
those facts unique to that case, that such a demand could hardly be considered a
labor dispute.
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
including "1. unfair labor practice cases; 2. those that workers may file involving
wages, hours of work and other terms and conditions of employment; ... and 5.
cases arising from any violation of Article 265 of this Code, including questions
involving the legality of striker and lockouts. ..." Article 217 lays down the plain
command of the law.
The claim of SanMig that the action below is for damages under Articles 19, 20
and 21 of the Civil Code would not suffice to keep the case within the
jurisdictional boundaries of regular Courts. That claim for damages is
interwoven with a labor dispute existing between the parties and would have to
be ventilated before the administrative machinery established for the expeditious
settlement of those disputes. To allow the action filed below to prosper would
bring about "split jurisdiction" which is obnoxious to the orderly administration
of justice (Philippine Communications, Electronics and Electricity Workers
Federation vs. Hon. Nolasco, L-24984, 29 July 1968, 24 SCRA 321).
We recognize the proprietary right of SanMig to exercise an inherent
management prerogative and its best business judgment to determine whether it
should contract out the performance of some of its work to independent
contractors. However, the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
BAUTISTA, Coleen Joyce Q. Page 7 of 58
right to strike in accordance with law (Section 3, Article XIII, 1987 Constitution)
equally call for recognition and protection. Those contending interests must be
placed in proper perspective and equilibrium.
WHEREFORE, the Writ of certiorari is GRANTED and the Orders of
respondent Judge of 25 March 1989 and 29 March 1989 are SET ASIDE. The
Writ of Prohibition is GRANTED and respondent Judge is enjoined from taking
any further action in Civil Case No. 57055 except for the purpose of dismissing
it. The status quo ante declaration of strike ordered by the Court on 24 May 1989
shall be observed pending the proceedings in the National Conciliation
Mediation Board-Department of Labor and Employment, docketed as NCMB-
NCR-NS-01-02189 and NCMB-NCR-NS-01-093-83. No costs.
Locsin v PLDT
The Case
This Petition for Review on Certiorari under Rule 45 seeks the reversal of the
May 6, 2008 Decision[1] and November 4, 2008 Resolution[2] of the Court of
Appeals (CA) in CA-G.R. SP No. 97398, entitled Philippine Long Distance
Telephone Company v. National Labor Relations Commission, Raul G. Locsin
and Eddie B. Tomaquin. The assailed decision set aside the Resolutions of the
National Labor Relations Commission (NLRC) dated October 28,
2005 and August 28, 2006 which in turn affirmed the Decision dated February
13, 2004 of the Labor Arbiter. The assailed resolution, on the other hand, denied
petitioners motion for reconsideration of the assailed decision.
The Facts
On November 1, 1990, respondent Philippine Long Distance Telephone
Company (PLDT) and the Security and Safety Corporation of the Philippines
(SSCP) entered into a Security Services Agreement[3] (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.
On August 30, 2001, respondent issued a Letter dated August 30,
2001 terminating the Agreement effective October 1, 2001.[4]
Despite the termination of the Agreement, however, petitioners continued to
secure the premises of their assigned office. They were allegedly directed to
remain at their post by representatives of respondent. In support of their
contention, petitioners provided the Labor Arbiter with copies of petitioner
Locsins pay slips for the period of January to September 2002.[5]
Then, on September 30, 2002, petitioners services were terminated.
Thus, petitioners filed a complaint before the Labor Arbiter for illegal dismissal
and recovery of money claims such as overtime pay, holiday pay, premium pay
for holiday and rest day, service incentive leave pay, Emergency Cost of Living
Allowance, and moral and exemplary damages against PLDT.
The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal.
It was explained in the Decision that petitioners were found to be employees of
PLDT and not of SSCP. Such conclusion was arrived at with the factual finding
that petitioners continued to serve as guards of PLDTs offices. As such
employees, petitioners were entitled to substantive and procedural due process
before termination of employment. The Labor Arbiter held that respondent failed
to observe such due process requirements. The dispositive portion of the Labor
Arbiters Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering
respondent Philippine Long Distance and Telephone Company (PLDT) to pay
complainants Raul E. Locsin and Eddie Tomaquin their separation pay and back
wages computed as follows:
NAME SEPARATION PAY BACKWAGES
1. Raul E. Locsin P127,500.00 P240,954.67
2. Eddie B. Tomaquin P127,500.00 P240,954.67
P736,909.34
All other claims are DISMISSED for want of factual basis.
Let the computation made by the Computation and Examination Unit form part
of this decision.
SO ORDERED.
PLDT appealed the above Decision to the NLRC which rendered a Resolution
affirming in toto the Arbiters Decision.
Thus, PDLT filed a Motion for Reconsideration of the NLRCs Resolution which
was also denied.
Consequently, PLDT filed a Petition for Certiorari with the CA asking for the
nullification of the Resolution issued by the NLRC as well as the Labor Arbiters
Decision. The CA rendered the assailed decision granting PLDTs petition and
dismissing petitioners complaint. The dispositive portion of the CA Decision
provides:
BAUTISTA, Coleen Joyce Q. Page 8 of 58
WHEREFORE, the instant Petition for Certiorari is GRANTED. The
Resolutions dated October 28, 2005 and August 28, 2006 of the National Labor
Relations Commission are ANNULLED and SET ASIDE. Private respondents
complaint against Philippine Long Distance Telephone Company is
DISMISSED.
SO ORDERED.
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.
Anent the pay slips that were presented by petitioners, the CA noted that those
were issued by SSCP and not PLDT; hence, SSCP continued to pay the salaries
of petitioners after the Agreement. This fact allegedly proved that petitioners
continued to be employees of SSCP albeit performing their work at PLDTs
premises.
From such assailed decision, petitioners filed a motion for reconsideration which
was denied in the assailed resolution.
Hence, we have this petition.
The Issues
1. Whether or not; complainants extended services to the respondent for one
(1) year from October 1, 2001, the effectivity of the termination of the contract
of complainants agency SSCP, up to September 30, 2002, without a renewed
contract, constitutes an employer-employee relationship between respondent and
the complainants.
2. Whether or not; in accordance to the provision of the Article 280 of the
Labor Code, complainants extended services to the respondent for another one
(1) year without a contract be considered as contractual employment.
3. Whether or not; in accordance to the provision of the Article 280 of the
Labor Code, does complainants thirteen (13) years of service to the respondent
with manifestation to the respondent thirteen (13) years renewal of its security
contract with the complainant agency SSCP, can be considered only as seasonal
in nature or fixed as [specific projects] or undertakings and its completion or
termination can be dictated as [controlled] by the respondent anytime they
wanted to.
4. Whether or not; complainants from being an alleged contractual employees
of the respondent for thirteen (13) years as they were then covered by a contract,
becomes regular employees of the respondent as the one (1) year extended
services of the complainants were not covered by a contract, and can be
considered as direct employment pursuant to the provision of the Article 280 of
the Labor Code.
5. Whether or not; the Court of Appeals committed grave abuse of discretion
when it set aside and [annulled] the labor [arbiters] decision and of the NLRCs
resolution declaring the dismissal of the complainant as illegal.[6]
The Courts Ruling
This petition is hereby granted.
An Employer-Employee
Relationship Existed Between the Parties
It is beyond cavil that there was no employer-employee relationship between the
parties from the time of petitioners first assignment to respondent by SSCP in
1988 until the alleged termination of the Agreement between respondent and
SSCP. In fact, this was the conclusion that was reached by this Court in Abella v.
Philippine Long Distance Telephone Company,[7] where we ruled that petitioners
therein, including herein petitioners, cannot be considered as employees of
PLDT. It bears pointing out that petitioners were among those declared to be
employees of their respective security agencies and not of PLDT.
The only issue in this case is whether petitioners became employees of
respondent after the Agreement between SSCP and respondent was terminated.
This must be answered in the affirmative.
Notably, respondent does not deny the fact that petitioners remained in the
premises of their offices even after the Agreement was terminated. And it is this
fact that must be explained.
To recapitulate, the CA, in rendering a decision in favor of respondent, found
that: (1) petitioners failed to prove that SSCP was a labor-only contractor; and
(2) petitioners are employees of SSCP and not of PLDT.
In arriving at such conclusions, the CA relied on the provisions of the
Agreement, wherein SSCP undertook to supply PLDT with the required security
guards, while furnishing PLDT with a performance bond in the amount of PhP
707,000. Moreover, the CA gave weight to the provision in the Agreement that
SSCP warranted that it carry on an independent business and has substantial
capital or investment in the form of equipment, work premises, and other
materials which are necessary in the conduct of its business.
BAUTISTA, Coleen Joyce Q. Page 9 of 58
Further, in determining that no employer-employee relationship existed between
the parties, the CA quoted the express provision of the Agreement, stating that
no employer-employee relationship existed between the parties herein. The CA
disregarded the pay slips of Locsin considering that they were in fact issued by
SSCP and not by PLDT.
From the foregoing explanation of the CA, the fact remains that petitioners
remained at their post after the termination of the Agreement. Notably, in its
Comment dated March 10, 2009,[8] respondent never denied that petitioners
remained at their post until September 30, 2002. While respondent denies the
alleged circumstances stated by petitioners, that they were told to remain at their
post by respondents Security Department and that they were informed by SSCP
Operations Officer Eduardo Juliano that their salaries would be coursed through
SSCP as per arrangement with PLDT, it does not state why they were not made
to vacate their posts. Respondent said that it did not know why petitioners
remained at their posts.
Rule 131, Section 3(y) of the Rules of Court provides:
SEC. 3. Disputable presumptions.The following presumptions are satisfactory if
uncontradicted, but may be contradicted and overcome by other evidence:
xxxx
(y) That things have happened according to the ordinary course of nature and the
ordinary habits of life.
In the ordinary course of things, responsible business owners or managers would
not allow security guards of an agency with whom the owners or managers have
severed ties with to continue to stay within the business premises. This is
because upon the termination of the owners or managers agreement with the
security agency, the agencys undertaking of liability for any damage that the
security guard would cause has already been terminated. Thus, in the event of an
accident or otherwise damage caused by such security guards, it would be the
business owners and/or managers who would be liable and not the agency. The
business owners or managers would, therefore, be opening themselves up to
liability for acts of security guards over whom the owners or managers allegedly
have no control.
At the very least, responsible business owners or managers would inquire or
learn why such security guards were remaining at their posts, and would have a
clear understanding of the circumstances of the guards stay. It is but logical that
responsible business owners or managers would be aware of the situation in their
premises.
We point out that with respondents hypothesis, it would seem that SSCP was
paying petitioners salaries while securing respondents premises despite the
termination of their Agreement. Obviously, it would only be respondent that
would benefit from such a situation. And it is seriously doubtful that a security
agency that was established for profit would allow its security guards to secure
respondents premises when the Agreement was already terminated.
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. Certainly, the facts as narrated by petitioners
are more believable than the irrational denials made by respondent. Thus, we
ruled in Lee Eng Hong v. Court of Appeals:[9]
Evidence, to be believed, must not only proceed from the mouth of a credible
witness, but it must be credible in itself such as the common experience and
observation of mankind can approve as probable under the circumstances. We
have no test of the truth of human testimony, except its conformity to our
knowledge, observation and experience. Whatever is repugnant to these belongs
to the miraculous and is outside judicial cognizance (Castaares v. Court of
Appeals, 92 SCRA 568 [1979]).
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.[10] 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.
In Tongko v. The Manufacturers Life Insurance Co. (Phils.) Inc.,[11] we reiterated
the oft repeated rule that control is the most important element in the
determination of the existence of an employer-employee relationship:
In the determination of whether an employer-employee relationship exists
between two parties, this Court applies the four-fold test to determine the
existence of the elements of such relationship. In Pacific Consultants
International Asia, Inc. v. Schonfeld, the Court set out the elements of an
employer-employee relationship, thus:
BAUTISTA, Coleen Joyce Q. Page 10 of 58
Jurisprudence is firmly settled that whenever the existence of an employment
relationship is in dispute, four elements constitute the reliable yardstick: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employers power to control the employees
conduct. It is the so-called control test which constitutes the most important
index of the existence of the employer-employee relationship that is, whether the
employer controls or has reserved the right to control the employee not only as
to the result of the work to be done but also as to the means and methods by
which the same is to be accomplished. Stated otherwise, 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.
Furthermore, Article 106 of the Labor Code contains a provision on contractors,
to wit:
Art. 106. Contractor or subcontractor. Whenever an employer enters into a
contract with another person for the performance of the formers work, the
employees of the contractor and of the latters subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
The Secretary of Labor and Employment may, by appropriate regulations,
restrict or prohibit the contracting-out of labor to protect the rights of
workers established under this Code. In so prohibiting or restricting, he
may make appropriate distinctions between labor-only contracting and job
contracting as well as differentiations within these types of contracting and
determine who among the parties involved shall be considered the employer
for purposes of this Code, to prevent any violation or circumvention of any
provision of this Code.
There is labor-only contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall
be responsible to the workers in the same manner and extent as if the latter were
directly employed by him. (Emphasis supplied.)
Thus, the Secretary of Labor issued Department Order No. 18-2002, Series of
2002, implementing Art. 106 as follows:
Section 5. Prohibition against labor-only contracting.Labor-only contracting is
hereby declared prohibited. For this purpose, labor-only contracting shall refer to
an arrangement where the contractor or subcontractor merely recruits, supplies
or places workers to perform a job, work or service for a principal, and any of
the following elements are present:
(i) The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and the
employees recruited, supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main business of the
principal; or
(ii) the contractor does not exercise the right to control over the
performance of the work of the contractual employee.
The foregoing provisions shall be without prejudice to the application of Article
248 (C) of the Labor Code, as amended.
Substantial capital or investment refers to capital stocks and subscribed
capitalization in the case of corporations, tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job, work or service
contracted out.
The right to control shall refer to the right reserved to the person for whom the
services of the contractual workers are performed, to determine not only the end
to be achieved, but also the manner and means to be used in reaching that end.
On the other hand, Sec. 7 of the department order contains the consequence of
such labor-only contracting:
Section 7. Existence of an employer-employee relationship.The contractor or
subcontractor shall be considered the employer of the contractual employee for
purposes of enforcing the provisions of the Labor Code and other social
legislation. The principal, however, shall be solidarily liable with the contractor
in the event of any violation of any provision of the Labor Code, including the
failure to pay wages.
The principal shall be deemed the employer of the contractual employee in any
of the following cases as declared by a competent authority:
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within the prohibitions provided in
Section 6 (Prohibitions) hereof. (Emphasis supplied.)
Evidently, respondent having the power of control over petitioners must be
considered as petitioners employerfrom the termination of the Agreement
BAUTISTA, Coleen Joyce Q. Page 11 of 58
onwardsas this was the only time that any evidence of control was exhibited by
respondent over petitioners and in light of our ruling in Abella.[12] Thus, as aptly
declared by the NLRC, petitioners were entitled to the rights and benefits of
employees of respondent, including due process requirements in the termination
of their services.
Both the Labor Arbiter and NLRC found that respondent did not observe such
due process requirements. Having failed to do so, respondent is guilty of illegal
dismissal.
WHEREFORE, we SET ASIDE the CAs May 6, 2008 Decision and November
4, 2008 Resolution in CA-G.R. SP No. 97398. We hereby REINSTATE the
Labor Arbiters Decision dated February 13, 2004 and the NLRCs Resolutions
dated October 28, 2005 and August 28, 2006.
No costs.
People’s Broadcasting Service vs Sec of Labor
In a Petition for Certiorari under Rule 65, petitioner Peoples Broadcasting
Service, Inc. (Bombo Radyo Phils., Inc.) questioned the Decision and Resolution
of the Court of Appeals (CA) dated October 26, 2006 and June 26, 2007,
respectively, in C.A. G.R. CEB-SP No. 00855.
Private respondent Jandeleon Juezan filed a complaint against petitioner with the
Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu
City, 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.
[1] After the conduct of summary investigations, and after the parties submitted
their position papers, the DOLE Regional Director found that private respondent
was an employee of petitioner, and was entitled to his money claims.[2] Petitioner
sought reconsideration of the Directors Order, but failed. The Acting DOLE
Secretary dismissed petitioners appeal on the ground that petitioner submitted a
Deed of Assignment of Bank Deposit instead of posting a cash or surety
bond. When the matter was brought before the CA, where petitioner claimed that
it had been denied due process, it was held that petitioner 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.[3]
In the Decision of this Court, the CA Decision was reversed and set aside, and
the complaint against petitioner was dismissed. The dispositive portion of the
Decision reads as follows:
WHEREFORE, the petition is GRANTED. The Decision dated 26 October
2006 and the Resolution dated 26 June 2007 of the Court of Appeals in C.A.
G.R. CEB-SP No. 00855 are REVERSED and SET ASIDE. The Order of the
then Acting Secretary of the Department of Labor and Employment dated 27
January 2005 denying petitioners appeal, and the Orders of the Director, DOLE
Regional Office No. VII, dated 24 May 2004 and 27 February 2004,
respectively, are ANNULLED. The complaint against petitioner
is DISMISSED.[4]
The Court found that there was no employer-employee relationship between
petitioner 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).[5]
From this Decision, the Public Attorneys Office (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 be not considered as
co-extensive with the power to determine the existence of an employer-
employee relationship.[6] In its Comment,[7] the DOLE sought clarification as
well, as to the extent of its visitorial and enforcement power under the Labor
Code, as amended.
The Court treated the Motion for Clarification as a second motion for
reconsideration, granting said motion and reinstating the petition.[8] It is apparent
that there is a need to delineate the jurisdiction of the DOLE Secretary vis--vis
that of the NLRC.
Under Art. 129 of the Labor Code, the power of the DOLE and its duly
authorized hearing officers to hear and decide any matter involving the recovery
of wages and other monetary claims and benefits was qualified by the proviso
that the complaint not include a claim for reinstatement, or that the aggregate
money claims not exceed PhP 5,000. RA 7730, or an Act Further Strengthening
the Visitorial and Enforcement Powers of the Secretary of Labor, did away with
the PhP 5,000 limitation, allowing the DOLE Secretary to exercise its visitorial
and enforcement power for claims beyond PhP 5,000. The only qualification to
this expanded power of the DOLE was only that there still be an existing
employer-employee relationship.
BAUTISTA, Coleen Joyce Q. Page 12 of 58
It is conceded that if there is no employer-employee relationship, whether it has
been terminated or it has not existed from the start, the DOLE has no
jurisdiction. Under Art. 128(b) of the Labor Code, as amended by RA 7730, the
first sentence reads, Notwithstanding the provisions of Articles 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. It is clear and
beyond debate that an employer-employee relationship must exist for the
exercise of the visitorial and enforcement power of the DOLE. The question now
arises, may the DOLE make a determination of whether or not an employer-
employee relationship exists, and if so, to what extent?
The first portion of the question must be answered in the affirmative.
The prior decision of this Court in the present case accepts such answer, but
places a limitation upon the power of the DOLE, that is, the determination of the
existence of an employer-employee relationship cannot be co-extensive with the
visitorial and enforcement power of the DOLE. But even in conceding the power
of the DOLE to determine the existence of an employer-employee relationship,
the Court held that the determination of the existence of an employer-employee
relationship is still primarily within the power of the NLRC, that any finding by
the DOLE is merely preliminary.
This conclusion must be revisited.
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 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 DOLE, in determining the existence of an employer-employee relationship,
has a ready set of guidelines to follow, the same guide the courts themselves
use. The elements to determine the existence of an employment relationship are:
(1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; (4) the employers power to control the employees
conduct.[9] The use of this test is not solely limited to the NLRC. The DOLE
Secretary, or his or her representatives, can utilize the same test, even in the
course of inspection, making use of the same evidence that would have been
presented before the NLRC.
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.
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.
The Court, in limiting the power of the DOLE, gave the rationale that such
limitation would eliminate the prospect of competing conclusions between the
DOLE and the NLRC. The prospect of competing conclusions could just as well
have been eliminated by according respect to the DOLE findings, to the
exclusion of the NLRC, and this We believe is the more prudent course of action
to take.
This is not to say that the determination by the DOLE is beyond question or
review. Suffice it to say, there are judicial remedies such as a petition for
certiorari under Rule 65 that may be availed of, should a party wish to dispute
the findings of the DOLE.
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 this Court.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE 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,
subject to judicial review, not review by the NLRC.
There is a view that despite Art. 128(b) of the Labor Code, as amended by RA
7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor
Code when money claims are involved, i.e., that if it is for PhP 5,000 and below,
BAUTISTA, Coleen Joyce Q. Page 13 of 58
the jurisdiction is with the regional director of the DOLE, under Art. 129, and if
the amount involved exceeds PhP 5,000, the jurisdiction is with the labor arbiter,
under Art. 217. The view states that despite the wording of Art. 128(b), this
would only apply in the course of regular inspections undertaken by the DOLE,
as differentiated from cases under Arts. 129 and 217, which originate from
complaints. There are several cases, however, where the Court has ruled that Art.
128(b) has been amended to expand the powers of the DOLE Secretary and his
duly authorized representatives by RA 7730. In these cases, the Court resolved
that the DOLE had the jurisdiction, despite the amount of the money claims
involved. Furthermore, in these cases, the inspection held by the DOLE regional
director was prompted specifically by a complaint. Therefore, the initiation of a
case through a complaint does not divest the DOLE Secretary or his duly
authorized representative of jurisdiction under Art. 128(b).
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
In the present case, the finding of the DOLE Regional Director that there was an
employer-employee relationship has been subjected to review by this Court, with
the finding being that there was no employer-employee relationship between
petitioner and private respondent, based on the evidence presented. Private
respondent presented self-serving allegations as well as self-defeating evidence.
[10] The findings of the Regional Director were not based on substantial
evidence, and private respondent failed to prove the existence of an employer-
employee relationship. The DOLE had no jurisdiction over the case, as there was
no employer-employee relationship present. Thus, the dismissal of the complaint
against petitioner is proper.
WHEREFORE, the Decision of this Court in G.R. No. 179652 is
hereby AFFIRMED, with the MODIFICATION that in the exercise of the
DOLEs visitorial and enforcement power, the Labor Secretary or the latters
authorized representative shall have the power to determine the existence of an
employer-employee relationship, to the exclusion of the NLRC. SO
ORDERED.
Ymbong vs. ABSCBN
Before us is a Rule 45 Petition seeking to set aside the August 22, 2007
Decision[1] and September 18, 2008 Resolution[2] of the Court of Appeals (CA)
in CA-G.R. SP No. 86206 declaring petitioner to have resigned from work and
not illegally dismissed.
The antecedent facts follow:
Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting
Corporation (ABS-CBN) in 1993 at its regional station in Cebu as a television
talent, co-anchoringHoy Gising and TV Patrol Cebu. His stint in ABS-CBN later
extended to radio when ABS-CBN Cebu launched its AM station DYAB in 1995
where he worked as drama and voice talent, spinner, scriptwriter and public
affairs program anchor.
Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting
1995, he worked as talent, director and scriptwriter for various radio programs
aired over DYAB.
On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No.
HR-ER-016 or the Policy on Employees Seeking Public Office. The pertinent
portions read:
1. Any employee who intends to run for any public office position, must
file his/her letter of resignation, at least thirty (30) days prior to the official
filing of the certificate of candidacy either for national or local election.
xxxx
3. Further, any employee who intends to join a 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.) must file a request for
leave of absence subject to managements approval. For this particular reason,
the employee should file the leave request at least thirty (30) days prior to the
start of the planned leave period.
x x x x[3] [Emphasis and underscoring supplied.]
Because of the impending May 1998 elections and based on his immediate
recollection of the policy at that time, Dante Luzon, Assistant Station Manager
of DYAB issued the following memorandum:
BAUTISTA, Coleen Joyce Q.
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company policy, any employee/talent who wants to
run for any position in the coming election will have to file a leave of
absence the moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to this company will
then be temporarily suspended for the entire campaign/election period.
For strict compliance.[4] [Emphasis and underscoring supplied.]
Luzon, however, admitted that upon double-checking of the exact text of the
policy and subsequent confirmation with the ABS-CBN Head Office, he saw that
the policy actually required suspension for those who intend to campaign for a
political party or candidate and resignation for those who will actually run in the
elections.[5]
After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch
with Luzon. Luzon claims that Ymbong approached him and told him that he
would leave radio for a couple of months because he will campaign for the
administration ticket. It was only after the elections that they found out that
Ymbong actually ran for public office himself at the eleventh hour. Ymbong, on
the other hand, claims that in accordance with the March 25, 1998
Memorandum, he informed Luzon through a letter that he would take a few
months leave of absence from March 8, 1998 to May 18, 1998 since he was
running for councilor of Lapu-Lapu City.
As regards Patalinghug, Patalinghug approached Luzon and advised him that he
will run as councilor for Naga, Cebu. According to Luzon, he clarified to
Patalinghug that he will be considered resigned and not just on leave once he
files a certificate of candidacy. Thus, Patalinghug wrote Luzon the following
letter on April 13, 1998:
Dear Mr. Luzon,
Im submitting to you my letter of resignation as your Drama Production Chief
and Talent due to your companys policy that every person connected to ABS-
CBN that should seek an elected position in the government will be forced to
resigned (sic) from his position. So herewith Im submitting my resignation with
a hard heart. But Im still hoping to be connected again with your prestigious
company after the election[s] should you feel that Im still an asset to your drama
production department. Im looking forward to that day and Im very happy and
Page 14 of 58
proud that I have served for two and a half years the most stable and the most
prestigious Radio and TV Network in the Philippines.
As a friend[,] wish me luck and Pray for me. Thank you.
Very Truly Yours,
(Sgd.)
Leandro Boy Patalinghug[6]
Unfortunately, both Ymbong and Patalinghug lost in the May 1998 elections.
Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu.
According to Luzon, he informed them that they cannot work there anymore
because of company policy. This was stressed even in subsequent meetings and
they were told that the company was not allowing any exceptions. ABS-CBN,
however, agreed out of pure liberality to give them a chance to wind up their
participation in the radio drama, Nagbabagang Langit, since it was rating well
and to avoid an abrupt ending. The agreed winding-up, however, dragged on for
so long prompting Luzon to issue to Ymbong the following memorandum
dated September 14, 1998:
TO : NESTOR YMBONG
FROM : DANTE LUZON
SUBJECT : AS STATED
DATE : 14 SEPT. 1998
Please be reminded that your services as drama talent had already been
automatically terminated when you ran for a local government position last
election.
The Management however gave you more than enough time to end your drama
participation and other involvement with the drama department.
It has been decided therefore that all your drama participation shall be
terminated effective immediately. However, your involvement as drama spinner/
narrator of the drama NAGBA[BA]GANG LANGIT continues until its writer/
director Mr. Leandro Patalinghug wraps it up one week upon receipt of a
separate memo issued to him.[7]
Ymbong 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. On September 14, 1998, he received a memorandum stating that his
BAUTISTA, Coleen Joyce Q. Page 15 of 58
services are being terminated immediately, much to his surprise. Thus, he filed
an illegal dismissal complaint[8]against ABS-CBN, Luzon and DYAB Station
Manager Veneranda Sy. He argued that the ground cited by ABS-CBN for his
dismissal was not among those enumerated in the Labor Code, as amended. And
even granting without admitting the existence of the company policy supposed
to have been violated, Ymbong averred that it was necessary that the company
policy meet certain requirements before willful disobedience of the policy may
constitute a just cause for termination. Ymbong further argued that the company
policy violates his constitutional right to suffrage.[9]
Patalinghug likewise filed an illegal dismissal complaint[10] against ABS-CBN.
ABS-CBN prayed for the dismissal of the 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. However, notwithstanding their status, ABS-
CBN has a standing policy on persons connected with the company whenever
they will run for public office.[11]
On July 14, 1999, the Labor Arbiter rendered a decision[12] finding the dismissal
of Ymbong and Patalinghug illegal, thus:
WHEREFORE, in the light of the foregoing, judgment is rendered finding the
dismissal of the two complainants illegal. An order is issued directing
respondent ABS[-]CBN to immediately reinstate complainants to their former
positions without loss of seniority rights plus the payment of backwages in the
amount of P200,000.00 to each complainant.
All other claims are dismissed.
SO ORDERED.[13]
The Labor Arbiter found that there exists an employer-employee relationship
between ABS-CBN and Ymbong and Patalinghug considering the stipulations in
their appointment letters/talent contracts. The Labor Arbiter noted particularly
that 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. The Labor Arbiter
likewise ruled that although the subject company policy is reasonable and not
contrary to law, the same was not made known to Ymbong and Patalinghug and
in fact was superseded by another one embodied in the March 25, 1998
Memorandum issued by Luzon. Thus, there is no valid or authorized cause in
terminating Ymbong and Patalinghug from their employment.
In its memorandum of appeal[14] before the National Labor Relations
Commission (NLRC), ABS-CBN contended that the Labor Arbiter has no
jurisdiction over the case because there is no employer-employee relationship
between the company and Ymbong and Patalinghug, and that Sy and Luzon
mistakenly assumed that Ymbong and Patalinghug could just file a leave of
absence since they are only talents and not employees. In its Supplemental
Appeal,[15] ABS-CBN insisted that Ymbong and Patalinghug were engaged as
radio talents for DYAB dramas and personality programs and their contract is
one between a self-employed contractor and the hiring party which is a standard
practice in the broadcasting industry. It also argued that the Labor Arbiter should
not have made much of the provisions on Ymbongs attendance and punctuality
since such requirement is a dictate of the programming of the station, the slating
of shows at regular time slots, and availability of recording studios not an
attempt to exercise control over the manner of his performance of the contracted
anchor work within his scheduled spot on air. As for the pronouncement that the
company policy has already been superseded by the March 25,
1998 Memorandum issued by Luzon, the latter already clarified that it was the
very policy he sought to enforce. This matter was relayed by Luzon to
Patalinghug when the latter disclosed his plans to join the 1998 elections while
Ymbong only informed the company that he was campaigning for the
administration ticket and the company had no inkling that he will actually run
until the issue was already moot and academic. ABS-CBN further contended that
Ymbong and Patalinghugs reinstatement is legally and physically impossible as
the talent positions they vacated no longer exist. Neither is there basis for the
award of back wages since they were not earning a monthly salary but paid
talent fees on a per production/per script basis. Attached to the Supplemental
Appeal is a Sworn Statement[16] of Luzon.
On March 8, 2004, the NLRC rendered a decision[17] modifying the labor
arbiters decision. The fallo of the NLRC decision reads:
WHEREFORE, premises considered, the decision of Labor Arbiter Nicasio C.
Aninon dated 14 July 1999 is MODIFIED, to wit:
Ordering respondent ABS-CBN to reinstate complainant Ernesto G. Ymbong
and to pay his full backwages computed from 15 September 1998 up to the time
of his actual reinstatement.
SO ORDERED.[18]
The NLRC dismissed ABS-CBNs Supplemental Appeal for being filed out of
time. The NLRC ruled that to entertain the same would be to allow the parties to
submit their appeal on piecemeal basis, which is contrary to the agencys duty to
facilitate speedy disposition of cases. The NLRC also held that ABS-CBN
wielded the power of control over Ymbong and Patalinghug, thereby proving the
existence of an employer-employee relationship between them.
As to the issue of whether they were illegally dismissed, the NLRC treated their
cases differently. In the case of Patalinghug, it found that he voluntarily resigned
from employment on April 21, 1998 when he submitted his resignation
BAUTISTA, Coleen Joyce Q. Page 16 of 58
letter. The NLRC noted that although the tenor of the resignation letter is
somewhat involuntary, he knew that it is the policy of the company that every
person connected therewith should resign from his employment if he seeks an
elected position in the government. As to Ymbong, however, the NLRC ruled
otherwise. It ruled that the March 25, 1998 Memorandum merely states that an
employee who seeks any elected position in the government will only merit the
temporary suspension of his services. It held that under the principle of social
justice, the March 25, 1998 Memorandum shall prevail and ABS-CBN is
estopped from enforcing the September 14, 1998 memorandum issued to
Ymbong stating that his services had been automatically terminated when he ran
for an elective position.
ABS-CBN moved to reconsider the NLRC decision, but the same was denied in
a Resolution dated June 21, 2004.[19]
Imputing grave abuse of discretion on the NLRC, ABS-CBN filed a petition for
certiorari[20] before the CA alleging that:
I.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION
AND SERIOUSLY MISAPPRECIATED THE FACTS IN NOT HOLDING
THAT RESPONDENT YMBONG IS A FREELANCE RADIO TALENT AND
MEDIA PRACTITIONERNOT A REGULAR EMPLOYEE OF
PETITIONERTO WHOM CERTAIN PRODUCTION WORK HAD BEEN
OUTSOURCED BY ABS-CBN CEBU UNDER AN INDEPENDENT
CONTRACTORSHIP SITUATION, THUS RENDERING THE LABOR
COURTS WITHOUT JURISDICTION OVER THE CASE IN THE ABSENCE
OF EMPLOYMENT RELATIONS BETWEEN THE PARTIES.
II.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION
IN DECLARING RESPONDENT YMBONG TO BE A REGULAR
EMPLOYEE OF PETITIONER AS TO CREATE A CONTRACTUAL
EMPLOYMENT RELATION BETWEEN THEM WHEN NONE EXISTS OR
HAD BEEN AGREED UPON OR OTHERWISE INTENDED BY THE
PARTIES.
III.
EVEN ASSUMING THE ALLEGED EMPLOYMENT RELATION TO EXIST
FOR THE SAKE OF ARGUMENT, RESPONDENT NLRC IN ANY CASE
COMMITTED A GRAVE ABUSE OF DISCRETION IN NOT SIMILARLY
UPHOLDING AND APPLYING COMPANY POLICY NO. HR-ER-016
IN THE CASE OF RESPONDENT YMBONG AND DEEMING HIM AS
RESIGNED AND DISQUALIFIED FROM FURTHER ENGAGEMENT AS A
RADIO TALENT IN ABS-CBN CEBU AS A CONSEQUENCE OF HIS
CANDIDACY IN THE 1998 ELECTIONS, AS RESPONDENT NLRC HAD
DONE IN THE CASE OF PATALINGHUG.
IV.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION
AND DENIED DUE PROCESS TO PETITIONER IN REFUSING TO
CONSIDER ITS SUPPLEMENTAL APPEAL, DATED OCTOBER 18, 1999,
FOR BEING FILED OUT OF TIME CONSIDERING THAT THE FILING OF
SUCH A PLEADING IS NOT IN ANY CASE PROSCRIBED AND
RESPONDENT NLRC IS AUTHORIZED TO CONSIDER ADDITIONAL
EVIDENCE ON APPEAL; MOREOVER, TECHNICAL RULES OF
EVIDENCE DO NOT APPLY IN LABOR CASES.
V.
RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION
IN GRANTING THE RELIEF OF REINSTATEMENT AND BACKWAGES
TO RESPONDENT YMBONG SINCE HE NEVER OCCUPIED ANY
REGULAR POSITION IN PETITIONER FROM WHICH HE COULD HAVE
BEEN ILLEGALLY DISMISSED, NOR ARE ANY OF THE RADIO
PRODUCTIONS IN WHICH HE HAD DONE TALENT WORK FOR
PETITIONER STILL EXISTING. INDEED, THERE IS NO BASIS
WHATSOEVER FOR THE AWARD OF BACKWAGES TO RESPONDENT
YMBONG IN THE AMOUNT OF P200,000.00 CONSIDERING THAT, AS
SHOWN BY THE UNCONTROVERTED EVIDENCE, HE WAS NOT
EARNING A MONTHLY SALARY OF P20,000.00, AS HE FALSELY
CLAIMS, BUT WAS PAID TALENT FEES ON A PER PRODUCTION/PER
SCRIPT BASIS WHICH AVERAGED LESS THAN P10,000.00 PER MONTH
IN TALENT FEES ALL IN ALL.[21]
On August 22, 2007, the CA rendered the assailed decision reversing and setting
aside the March 8, 2004 Decision and June 21, 2004 Resolution of the
NLRC. The CA declared Ymbong resigned from employment and not to have
been illegally dismissed. The award of full back wages in his favor was deleted
accordingly.
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. It
BAUTISTA, Coleen Joyce Q. Page 17 of 58
noted that said policy is entitled Policy on Employees Seeking Public Office and
the guidelines contained therein specifically pertain to employees and did not
even mention talents or independent contractors. It held that it is a complete
turnaround on ABS-CBNs part to later argue that Ymbong is only a radio talent
or independent contractor and not its employee. By applying the subject
company policy on Ymbong, ABS-CBN had explicitly recognized him to be an
employee and not merely an independent contractor.
The CA likewise held that the subject company policy is the controlling
guideline and therefore, Ymbong should be considered resigned from ABS-
CBN. While Luzon has policy-making power as assistant radio manager, he had
no authority to issue a memorandum that had the effect of repealing or
superseding a subsisting policy. Contrary to the findings of the Labor Arbiter, the
subject company policy was effective at that time and continues to be valid and
subsisting up to the present. The CA cited Patalinghugs resignation letter to
buttress this conclusion, noting that Patalinghug openly admitted in his letter that
his resignation was in line with the said company policy. Since ABS-CBN
applied Policy No. HR-ER-016 to Patalinghug, there is no reason not to apply
the same regulation to Ymbong who was on a similar situation as the
former. Thus, the CA found that the NLRC overstepped its area of discretion to a
point of grave abuse in declaring Ymbong to have been illegally terminated. The
CA concluded that there is no illegal dismissal to speak of in the instant case as
Ymbong is considered resigned when he ran for an elective post pursuant to the
subject company policy.
Hence, this petition.
Petitioner argues that the CA gravely erred: (1) in upholding Policy No. HR-
ER-016; (2) in upholding the validity of the termination of Ymbongs services;
and (3) when it reversed the decision of the NLRC 4th Division of Cebu City
which affirmed the decision of Labor Arbiter Nicasio C. Anion.[22]
Ymbong argues that the subject company policy is a clear interference and a
gross violation of an employees right to suffrage. He is surprised why it was
easy for the CA to rule that Luzons memorandum ran counter to an existing
policy while on the other end, it did not see that it was in conflict with the
constitutional right to suffrage. He also points out that the issuance of the March
25, 1998 Memorandum was precisely an exercise of the management power to
which an employee like him must respect; otherwise, he will be sanctioned for
disobedience or worse, even terminated. He was not in a position to know which
between the two issuances was correct and as far as he is concerned, the March
25, 1998 Memorandum superseded the subject company policy. Moreover, ABS-
CBN cannot disown acts of its officers most especially since it prejudiced his
property rights.[23]
As to the validity of his dismissal, Ymbong contends that the ground relied upon
by ABS-CBN is not among the just and authorized causes provided in the Labor
Code, as amended. And even assuming the subject company policy passes the
test of validity under the pretext of the right of the management to discipline and
terminate its employees, the exercise of such right is not without
bounds. Ymbong avers that his automatic termination was a blatant disregard of
his right to due process. He was never asked to explain why he did not tender his
resignation before he ran for public office as mandated by the subject company
policy.[24]
Ymbong likewise asseverates that both the Labor Arbiter and the NLRC were
consistent in their findings that he was illegally dismissed. It is settled that
factual findings of labor administrative officials, if supported by substantial
evidence, are accorded not only great respect but even finality.[25]
ABS-CBN, for its part, counters that the validity of policies such as Policy No.
HR-ER-016 has long been upheld by this Court which has ruled that a media
company has a right to impose a policy providing that employees who file their
certificates of candidacy in any election shall be considered resigned.
[26] Moreover, case law has upheld the validity of the exercise of management
prerogatives even if they appear to limit the rights of employees as long as there
is no showing that management prerogatives were exercised in a manner
contrary to law.[27] ABS-CBN contends that being the largest media and
entertainment company in the country, its reputation stems not only from its
ability to deliver quality entertainment programs but also because of neutrality
and impartiality in delivering news.[28]
ABS-CBN further argues that nothing in the company policy prohibits its
employees from either accepting a public appointive position or from running
for public office. Thus, it cannot be considered as violative of the constitutional
right of suffrage. Moreover, the Supreme Court has recognized the employers
right to enforce occupational qualifications as long as the employer is able to
show the existence of a reasonable business necessity in imposing the questioned
policy. Here, Policy No. HR-ER-016 itself states that it was issued to protect the
company from any public misconceptions and [t]o preserve its objectivity,
neutrality and credibility. Thus, it cannot be denied that it is reasonable under the
circumstances.[29]
ABS-CBN likewise opposes Ymbongs claim that he was terminated. ABS-CBN
argues that on the contrary, Ymbongs unilateral act of filing his certificate of
candidacy is an overt act tantamount to voluntary resignation on his part by
virtue of the clear mandate found in Policy No. HR-ER-016. Ymbong, however,
failed to file his resignation and in fact misled his superiors by making them
believe that he was going on leave to campaign for the administration candidates
but in fact, he actually ran for councilor. He also claims to have fully
BAUTISTA, Coleen Joyce Q. Page 18 of 58
apprised Luzon through a letter of his intention to run for public office, but he
failed to adduce a copy of the same.[30]
As to Ymbongs argument that the CA should not have reversed the findings of
the Labor Arbiter and the NLRC, ABS-CBN asseverates that the CA is not
precluded from making its own findings most especially if upon its own review
of the case, it has been revealed that the NLRC, in affirming the findings of the
Labor Arbiter, committed grave abuse of discretion amounting to lack or excess
of jurisdiction when it failed to apply the subject company policy in Ymbongs
case when it readily applied the same to Patalinghug.[31]
Essentially, the issues to be resolved in the instant petition are: (1) whether
Policy No. HR-ER-016 is valid; (2) whether the March 25, 1998 Memorandum
issued by Luzonsuperseded Policy No. HR-ER-016; and (3) whether Ymbong,
by seeking an elective post, is deemed to have resigned and not dismissed by
ABS-CBN.
Policy No. HR-ER-016 is valid.
This is not the first time that this Court has dealt with a policy similar to Policy
No. HR-ER-016. In the case of Manila Broadcasting Company v. NLRC,[32] this
Court ruled:
What is involved in this case is an unwritten company policy considering any
employee who files a certificate of candidacy for any elective or local office as
resigned from the company. Although 11(b) of R.A. No. 6646 does not require
mass media commentators and announcers such as private respondent to resign
from their radio or TV stations but only to go on leave for the duration of the
campaign period, we think that the company may nevertheless validly require
them to resign as a matter of policy. In this case, the policy is justified on the
following grounds:
Working for the government and the company at the same time is clearly
disadvantageous and prejudicial to the rights and interest not only of the
company but the public as well. In the event an employee wins in an election, he
cannot fully serve, as he is expected to do, the interest of his employer. The
employee has to serve two (2) employers, obviously detrimental to the interest of
both the government and the private employer.
In the event the employee loses in the election, the impartiality and cold
neutrality of an employee as broadcast personality is suspect, thus readily
eroding and adversely affecting the confidence and trust of the listening public to
employers station.[33]
ABS-CBN, like Manila Broadcasting Company, also had a valid justification for
Policy No. HR-ER-016. Its rationale is embodied in the policy itself, to wit:
Rationale:
ABS-CBN BROADCASTING CORPORATION strongly believes that it is to
the best interest of the company to continuously remain apolitical. While it
encourages and supports its employees to have greater political awareness
and for them to exercise their right to suffrage, the company, however,
prefers to remain politically independent and unattached to any political
individual or entity.
Therefore, employees who [intend] to run for public office or accept political
appointment should resign from their positions, in order to protect the
company from any public misconceptions. To preserve its objectivity,
neutrality and credibility, the company reiterates the following policy
guidelines for strict implementation.
x x x x[34] [Emphasis supplied.]
We have consistently held that so long as a companys management prerogatives
are exercised in good faith for the advancement of the employers interest and not
for the purpose of defeating or circumventing the rights of the employees under
special laws or under valid agreements, this Court will uphold them.[35] 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. Even as the law is solicitous of the welfare of the employees, it must
also protect the right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own business affairs to
achieve its purpose cannot be denied.[36]
It is worth noting that such exercise of management prerogative has earned a
stamp of approval from no less than our Congress itself when on February 12,
2001, it enacted Republic Act No. 9006, otherwise known as the Fair Election
Act. Section 6.6 thereof reads:
6.6. Any mass media columnist, commentator, announcer, reporter, on-air
correspondent or personality who is a candidate for any elective public
office or is a campaign volunteer for or employed or retained in any
capacity by any candidate or political party shall be deemed resigned, if so
required by their employer, or shall take a leave of absence from his/her work
as such during the campaign period: Provided, That any media practitioner who
is an official of a political party or a member of the campaign staff of a candidate
or political party shall not use his/her time or space to favor any candidate or
political party. [Emphasis and underscoring supplied.]
Policy No. HR-ER-016 was not superseded by the March 25, 1998
Memorandum
BAUTISTA, Coleen Joyce Q. Page 19 of 58
The CA correctly ruled that though Luzon, as Assistant Station Manager for
Radio of ABS-CBN, has policy-making powers in relation to his principal task
of administering the networks radio station in the Cebu region, the exercise of
such power should be in accord with the general rules and regulations imposed
by the ABS-CBN Head Office to its employees. Clearly, the March 25,
1998 Memorandum issued by Luzon which only requires employees to go on
leave if they intend to run for any elective position is in absolute contradiction
with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila
which requires the resignation, not only the filing of a leave of absence, of any
employee who intends to run for public office. Having been issued beyond the
scope of his authority, the March 25, 1998 Memorandum is therefore void and
did not supersede Policy No. HR-ER-016.
Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy
of his recollection of the company policy when he issued the March 25, 1998
Memorandum and stated therein that upon double-checking of the exact text of
the policy statement and subsequent confirmation with the ABS-CBN Head
Office in Manila, he learned that the policy required resignation for those who
will actually run in elections because the company wanted to maintain its
independence. Since the officer who himself issued the subject memorandum
acknowledged that it is not in harmony with the Policy issued by the upper
management, there is no reason for it to be a source of right for Ymbong.
Ymbong is deemed resigned when he ran for councilor.
As Policy No. HR-ER-016 is the subsisting company policy and not Luzons
March 25, 1998 Memorandum, Ymbong is deemed resigned when he ran for
councilor.
We find no merit in Ymbongs argument that [his] automatic termination x x x
was a blatant [disregard] of [his] right to due process as he was never asked to
explain why he did not tender his resignation before he ran for public office as
mandated by [the subject company policy].[37] Ymbongs 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.
In addition, we do not subscribe to Ymbongs claim that he was not in a position
to know which of the two issuances was correct. Ymbong most likely than not, is
fully aware that the subsisting policy is Policy No. HR-ER-016 and not the
March 25, 1998 Memorandum and it was for this reason that, as stated by Luzon
in his Sworn Statement, he only told the latter that he will only campaign for the
administration ticket and not actually run for an elective post. Ymbong claims he
had fully apprised Luzon by letter of his plan to run and even filed a leave of
absence but records are bereft of any proof of said claim. Ymbong claims that
the letter stating his intention to go on leave to run in the election is attached to
his Position Paper as Annex A, a perusal of said pleading attached to his petition
before this Court, however, show that Annex A was not his letter to Luzon but
the September 14, 1998 Memorandum informing Ymbong that his services had
been automatically terminated when he ran for a local government position.
Moreover, as pointed out by ABS-CBN, had Ymbong been truthful to his
superiors, they would have been able to clarify to him the prevailing company
policy and inform him of the consequences of his decision in case he decides to
run, as Luzon did in Patalinghugs case.
WHEREFORE, the petition for review on certiorari is DENIED for lack of
merit.
With costs against petitioner.
SO ORDERED.
Professional Services v CA
As the hospital industry changes, so must the laws and jurisprudence governing
hospital liability. The immunity from medical malpractice traditionally accorded
to hospitals has to be eroded if we are to balance the interest of the patients and
hospitals under the present setting.
Before this Court is a motion for reconsideration filed by Professional Services,
Inc. (PSI), petitioner in G.R. No. 126297, assailing the Court’s First Division
Decision dated January 31, 2007, finding PSI and Dr. Miguel Ampil, petitioner
in G.R. No. 127590, jointly and severally liable for medical negligence.
A brief revisit of the antecedent facts is imperative.
On April 4, 1984, Natividad Agana was admitted at the Medical City General
Hospital (Medical City) because of difficulty of bowel movement and bloody
anal discharge. Dr. Ampil diagnosed her to be suffering from "cancer of the
sigmoid." Thus, on April 11, 1984, Dr. Ampil, assisted by the medical staff1 of
Medical City, performed an anterior resection surgery upon her. During the
surgery, he found that the malignancy in her sigmoid area had spread to her left
ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil
obtained the consent of Atty. Enrique Agana, Natividad’s husband, to permit Dr.
Juan Fuentes, respondent in G.R. No. 126467, to perform hysterectomy upon
Natividad.
BAUTISTA, Coleen Joyce Q. Page 20 of 58
Dr. Fuentes performed and completed the hysterectomy. Afterwards, Dr. Ampil
took over, completed the operation and closed the incision. However, the
operation appeared to be flawed. In the corresponding Record of Operation dated
April 11, 1984, the attending nurses entered these remarks:
sponge count lacking 2
announced to surgeon searched done (sic) but to no avail continue for closure.
After a couple of days, 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 performed upon
her. Dr. Ampil recommended that Natividad consult an oncologist to treat the
cancerous nodes which were not removed during the operation.
On May 9, 1984, Natividad, accompanied by her husband, went to the United
States to seek further treatment. After four (4) months of consultations and
laboratory examinations, Natividad was told that she was free of cancer. Hence,
she was advised to return to the Philippines.
On August 31, 1984, Natividad flew back to the Philippines, still suffering from
pains. Two (2) weeks thereafter, her daughter found a piece of gauze protruding
from her vagina. Dr. Ampil was immediately informed. He proceeded to
Natividad’s house where he managed to extract by hand a piece of gauze
measuring 1.5 inches in width. Dr. Ampil then assured Natividad that the pains
would soon vanish.
Despite Dr. Ampil’s assurance, the pains intensified, prompting Natividad to
seek treatment at the Polymedic General Hospital. While confined thereat, Dr.
Ramon Gutierrez detected the presence of a foreign object in her vagina -- a
foul-smelling gauze measuring 1.5 inches in width. The gauze had badly
infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive
organ which forced stool to excrete through the vagina. Another surgical
operation was needed to remedy the situation. Thus, in October 1984, Natividad
underwent another surgery.
On November 12, 1984, Natividad and her husband filed with the Regional Trial
Court, Branch 96, Quezon City a complaint for damages against PSI (owner of
Medical City), Dr. Ampil and Dr. Fuentes.
On February 16, 1986, pending the outcome of the above case, Natividad died.
She was duly substituted by her above-named children (the Aganas).
On March 17, 1993, the trial court rendered judgment in favor of spouses Agana
finding PSI, Dr. Ampil and Dr. Fuentes jointly and severally liable. On appeal,
the Court of Appeals, in its Decision dated September 6, 1996, 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. On January 31, 2007, the Court, through its First Division,
rendered a Decision holding that PSI is jointly and severally liable with Dr.
Ampil for the following reasons: first, there is an employer-employee
relationship between Medical City and Dr. Ampil. The Court relied on Ramos v.
Court of Appeals,2 holding that for the purpose of apportioning responsibility in
medical negligence cases, an employer-employee relationship in effect
exists between hospitals and their attending and visiting physicians; second,
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;and third, 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.
In its motion for reconsideration, PSI contends that the Court erred in finding it
liable under Article 2180 of the Civil Code, there being 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" had been reversed in a subsequent
Resolution.3 Further, PSI argues that the doctrine of ostensible agency or
agency by estoppelcannot apply because spouses Agana failed to establish one
requisite of the doctrine, i.e., that Natividad relied on the representation of the
hospital in engaging the services of Dr. Ampil. And lastly, PSI maintains that
the doctrine of corporate negligence is misplaced because the proximate cause
of Natividad’s injury was Dr. Ampil’s negligence.
The motion lacks merit.
As earlier mentioned, the First Division, in its assailed Decision, ruled that an
employer-employee relationship "in effect" exists between the Medical City
and Dr. Ampil. Consequently, both are jointly and severally liable to the Aganas.
This ruling proceeds from the following ratiocination in Ramos:
We now discuss the responsibility of the hospital in this particular incident. The
unique practice (among private hospitals) of filling up specialist staff with
attending and visiting "consultants," who are allegedly not hospital employees,
presents problems in apportioning responsibility for negligence in medical
malpractice cases. However, the difficulty is only more apparent than real.
In the first place, hospitals exercise significant control in the hiring and firing
of consultants and in the conduct of their work within the hospital premises.
Doctors who apply for "consultant" slots, visiting or attending, are required to
submit proof of completion of residency, their educational qualifications;
BAUTISTA, Coleen Joyce Q. Page 21 of 58
generally, evidence of accreditation by the appropriate board (diplomate),
evidence of fellowship in most cases, and references. These requirements are
carefully scrutinized by members of the hospital administration or by a review
committee set up by the hospital who either accept or reject the application. This
is particularly true with respondent hospital.
After a physician is accepted, either as a visiting or attending consultant, he
is normally required to attend clinico-pathological conferences, conduct
bedside rounds for clerks, interns and residents, moderate grand rounds
and patient audits and perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the hospital, and/or for the
privilege of admitting patients into the hospital. 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. A consultant remiss in
his duties, or a consultant who regularly falls short of the minimum
standards acceptable to the hospital or its peer review committee, is
normally politely terminated.
In other words, 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.This being the case, the question
now arises as to whether or not respondent hospital is solidarily liable with
respondent doctors for petitioner’s condition.
The basis for holding an employer solidarily responsible for the negligence of its
employee is found in Article 2180 of the Civil Code which considers a person
accountable not only for his own acts but also for those of others based on the
former’s responsibility under a relationship of partia ptetas.
Clearly, in Ramos, the Court considered the peculiar relationship between a
hospital and its consultants on the bases of certain factors. One such factor is the
"control test" wherein the hospital exercises control in the hiring and firing of
consultants, like Dr. Ampil, and in the conduct of their work.
Actually, contrary to PSI’s contention, the Court did not reverse its ruling
in Ramos. What it clarified was that the De Los Santos Medical Clinic did not
exercise control over its consultant, hence, there is no employer-employee
relationship between them. Thus, despite the granting of the said hospital’s
motion for reconsideration, the doctrine in Ramos stays, i.e., for the purpose of
allocating responsibility in medical negligence cases, an employer-employee
relationship exists between hospitals and their consultants.
In the instant cases, PSI merely offered a general denial of responsibility,
maintaining that consultants, like Dr. Ampil, are "independent contractors," not
employees of the hospital. 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.
In Nograles, et al. v. Capitol Medical Center, et al.,4 through Mr. Justice Antonio
T. Carpio, the Court held:
The question now is whether CMC is automatically exempt from liability
considering that Dr. Estrada is an independent contractor-physician.
In general, a hospital is not liable for the negligence of an independent
contractor-physician. There is, however, an exception to this principle. The
hospital may be liable if the physician is the "ostensible" agent of the hospital.
(Jones v. Philpott, 702 F. Supp. 1210 [1988]) This exception is also known as the
"doctrine of apparent authority." (Sometimes referred to as the apparent or
ostensible agency theory. [King v. Mitchell, 31 A.D.3rd 958, 819 N.Y. S.2d 169
(2006)].
xxx
The doctrine of apparent authority essentially involves two factors to determine
the liability of an independent contractor-physician.
The first factor focuses on the hospital’s manifestations and is sometimes
described as an inquiry whether the hospital acted in a manner which would lead
a reasonable person to conclude that the individual who was alleged to be
negligent was an employee or agent of the hospital. (Diggs v. Novant Health,
Inc., 628 S.E.2d 851 (2006) citing Hylton v. Koontz, 138 N.C. App. 629
(2000). In this regard, the hospital need not make express representations to
the patient that the treating physician is an employee of the hospital; rather
a representation may be general and implied. (Id.)
The doctrine of apparent authority is a specie of the doctrine of estoppel. Article
1431 of the Civil Code provides that "[t]hrough estoppel, an admission or
representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon." Estoppel rests on this
rule: "Whether a party has, by his own declaration, act, or omission,
intentionally and deliberately led another to believe a particular thing true, and to
act upon such belief, he cannot, in any litigation arising out of such declaration,
act or omission, be permitted to falsify it. (De Castro v. Ginete, 137 Phil. 453
BAUTISTA, Coleen Joyce Q. Page 22 of 58
[1969], citing Sec. 3, par. A, Rule 131 of the Rules of Court. See also King v.
Mitchell, 31 A.D.3rd 958, 819 N.Y.S.2d 169 [2006]).
xxx
The second factor focuses on the patient’s reliance. It is sometimes characterized
as an inquiry on whether the plaintiff acted in reliance upon the conduct of the
hospital or its agent, consistent with ordinary care and prudence. (Diggs v.
Novant Health, Inc.)
PSI argues that the doctrine of apparent authority cannot apply to these cases
because spouses Agana failed to establish proof of their reliance on the
representation of Medical City that Dr. Ampil is its employee.
The argument lacks merit.
Atty. Agana categorically testified that one of the reasons why he chose Dr.
Ampil was that he knew him to be a staff member of Medical City, a
prominent and known hospital.
Q Will you tell us what transpired in your visit to Dr. Ampil?
A Well, I saw Dr. Ampil at the Medical City, I know him to be a staff
member there, and I told him about the case of my wife and he asked me to
bring my wife over so she could be examined. Prior to that, I have known Dr.
Ampil, first, he was staying in front of our house, he was a neighbor, second, my
daughter was his student in the University of the East School of Medicine at
Ramon Magsaysay; and when my daughter opted to establish a hospital or a
clinic, Dr. Ampil was one of our consultants on how to establish that hospital.
And from there, I have known that he was a specialist when it comes to that
illness.
Atty. Agcaoili
On that particular occasion, April 2, 1984, what was your reason for choosing to
contact Dr. Ampil in connection with your wife’s illness?
A First, before that, I have known him to be a specialist on that part of the body
as a surgeon; second, I have known him to be a staff member of the Medical
City which is a prominent and known hospital. And third, because he is a
neighbor, I expect more than the usual medical service to be given to us, than his
ordinary patients.5
Clearly, 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.6 In
these cases, the circumstances yield a positive answer to the question.
The challenged Decision also anchors its ruling on the doctrine of corporate
responsibility.7 The duty of providing quality medical service is no longer the
sole prerogative and responsibility of the physician. This is because the modern
hospital now tends to organize a highly-professional medical staff whose
competence and performance need also to be monitored by the hospital
commensurate with its inherent responsibility to provide quality medical care.
8 Such responsibility includes the proper supervision of the members of its
medical staff. Accordingly, the hospital has the duty to make a reasonable
effort to monitor and oversee the treatment prescribed and administered by
the physicians practicing in its premises.
Unfortunately, PSI had been remiss in its duty. It did not conduct an immediate
investigation on the reported missing gauzes to the great prejudice and agony of
its patient. Dr. Jocson, a member of PSI’s medical staff, who testified on whether
the hospital conducted an investigation, was evasive, thus:
Q We go back to the operative technique, this was signed by Dr.
Puruganan, was this submitted to the hospital?
A Yes, sir, this was submitted to the hospital with the record of the
patient.
Q Was the hospital immediately informed about the missing sponges?
A That is the duty of the surgeon, sir.
Q As a witness to an untoward incident in the operating room, was it not
your obligation, Dr., to also report to the hospital because you are under the
control and direction of the hospital?
A I am not in the position to answer that, sir.
Q You never did hear the hospital investigating the doctors involved in
this case of those missing sponges, or did you hear something?
xxxxxx
A I think we already made a report by just saying that two sponges were
missing, it is up to the hospital to make the move.
Atty. Agana
Precisely, I am asking you if the hospital did a move, if the hospital did a
move.
A I cannot answer that.
Court
By that answer, would you mean to tell the Court that you were aware if
there was such a move done by the hospital?
A I cannot answer that, your honor, because I did not have any more
follow-up of the case that happened until now.9
The above testimony obviously shows Dr. Jocson’s lack of concern for the
patients. Such conduct is reflective of the hospital’s manner of supervision.
Not only did PSI breach its duty to oversee or supervise all persons who
practice medicine within its walls, it also failed to take an active step in
fixing the negligence committed. This renders PSI, not only vicariously liable
for the negligence of Dr. Ampil under Article 2180 of the Civil Code, but
also directly liable for its own negligence under Article 2176.
Moreover, there is merit in the trial court’s finding that the failure of PSI to
conduct an investigation "established PSI’s part in the dark conspiracy of
silence and concealment about the gauzes." The following testimony of Atty.
Agana supports such findings, thus:

A The hospital already had the record of the two OS missing, sir.
Q If you place yourself in the position of the hospital, how will you
recover.
A You do not answer my question with another question.
Q Did the hospital do anything about the missing gauzes?
A The hospital left it up to the surgeon who was doing the operation, sir.
Q Did the hospital investigate the surgeon who did the operation?
BAUTISTA, Coleen Joyce Q.
Q You said you relied on the promise of Dr. Ampil and despite the promise
you were not able to obtain the said record. Did you go back to the record
custodian?
A I did not because I was talking to Dr. Ampil. He promised me.
Q After your talk to Dr. Ampil, you went to the record custodian?
A I went to the record custodian to get the clinical record of my wife, and
I was given a portion of the records consisting of the findings, among them,
Page 23 of 58
the entries of the dates, but not the operating procedure and operative regulations; (6) [Estanislao] Agbay directly paid petitioner’s salaries and
report.10 controlled all aspects of his employment and (7) petitioner rendered work
necessary and desirable in the business of the respondent company
In sum, we find no merit in the motion for reconsideration.
WHEREFORE, we DENY PSI’s motion for reconsideration with finality.
BERNARD A. TENAZAS, JAIME M. FRANCISCO and ISIDRO G.
SO ORDERED. ENDRACA, Petitioners,
SOUTH EAST INTERNATIONAL RATTAN INC V. JESUS J. COMING vs.

(G.R. NO. 186621) R. VILLEGAS TAXI TRANSPORT and ROMUALDO
VILLEGAS, Respondents.
Facts:
DECISION
Petitioner South East International Rattan is a domestic corporation engaged in
the business of manufacturing and exporting furniture to various countries. REYES, J.:
Respondent Coming was hired by petitioner as Sizing Machine Operator whose
work is initially compensated on ‘pakiao basis’ but sometime was fixed per day This is a petition for review on certiorari1 filed under Rule 45 of the Rules of
and a work schedule of 8:00am to 5:00pm. Without any apparent reason, his Court, assailing the Decision2 dated March 11, 2010 and Resolution3 dated June
employment was interrupted as he was told by petitioners to resume work in 2 28, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 111150, which
months time but was never called back. Respondent thus filed a complaint affirmed with modification the Decision4 dated June 23, 2009 of the National
before the regional arbitration branch. The Labor Arbiter ruled respondent as a Labor Relations Commission (NLRC) in NLRC LAC Case No. 07-002648-08.
regular employee of petitioner SEIRI but on appeal, was reversed by the NLRC.
CA then reversed the NLRC decision and ruled that there existed an employer- The Antecedent Facts
employee relationship between petitioners and respondent. On July 4, 2007, Bernard A. Tenazas (Tenazas) and Jaime M. Francisco
Issue: (Francisco) filed a complaint for illegal dismissal against R. Villegas Taxi
Transport and/or Romualdo Villegas (Romualdo) and Andy Villegas (Andy)
Whether or not there is employer-employee relationship between petitioner and (respondents). At that time, a similar case had already been filed by Isidro G.
respondent. Endraca (Endraca) against the same respondents. The two (2) cases were
subsequently consolidated.5
Ruling: YES.
In their position paper,6 Tenazas, Francisco and Endraca (petitioners) alleged that
We affirm the CA. they were hired and dismissed by the respondents on the following dates:
To ascertain the existence of employer-employee relationship jurisprudence has
invariably adhered to the four-fold test, to wit: (1) the selection and engagement Name Date of Hiring Date of Dismissal Salary
of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
Bernard A. Tenazas 10/1997 07/03/07 Boundary System
the power to control the employee’s conduct, or the so-called “control test.”
Jaime M. Francisco 04/10/04 06/04/07 Boundary System
x x x As to the “control test”, the following facts indubitably reveal that
respondents wielded control over the work performance of petitioner, to wit: (1) Isidro G. Endraca 04/2000 03/06/06 Boundary System7
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 Relaying the circumstances of his dismissal, Tenazas alleged that on July 1,
same job; (3) they enforced the observance of definite hours of work from 8 2007, the taxi unit assigned to him was sideswiped by another vehicle, causing a
o’clock in the morning to 5 o’clock in the afternoon; (4) the mode of payment of dent on the left fender near the driver seat. The cost of repair for the damage was
petitioner’s salary was under their discretion, at first paying him on pakiao basis estimated at ₱500.00. Upon reporting the incident to the company, he was
and thereafter, on daily basis; (5) they implemented company rules and scolded by respondents Romualdo and Andy and was told to leave the garage for
BAUTISTA, Coleen Joyce Q. Page 24 of 58
he is already fired. He was even threatened with physical harm should he ever be
seen in the company’s premises again. Despite the warning, Tenazas reported for
work on the following day but was told that he can no longer drive any of the
company’s units as he is already fired.8
Francisco, on the other hand, averred that his dismissal was brought about by the
company’s unfounded suspicion that he was organizing a labor union. He was
instantaneously terminated, without the benefit of procedural due process, on
June 4, 2007.9
Endraca, for his part, alleged that his dismissal was instigated by an occasion
when he fell short of the required boundary for his taxi unit. He related that
before he was dismissed, he brought his taxi unit to an auto shop for an urgent
repair. He was charged the amount of ₱700.00 for the repair services and the
replacement parts. As a result, he was not able to meet his boundary for the day.
Upon returning to the company garage and informing the management of the
incident, his driver’s license was confiscated and was told to settle the deficiency
in his boundary first before his license will be returned to him. He was no longer
allowed to drive a taxi unit despite his persistent pleas.10
For their part, the respondents admitted that Tenazas and Endraca were
employees of the company, the former being a regular driver and the latter a
spare driver. The respondents, however, denied that Francisco was an employee
of the company or that he was able to drive one of the company’s units at any
point in time.11
The respondents further alleged that Tenazas was never terminated by the
company. They claimed that on July 3, 2007, Tenazas went to the company
garage to get his taxi unit but was informed that it is due for overhaul because of
some mechanical defects reported by the other driver who takes turns with him
in using the same. He was thus advised to wait for further notice from the
company if his unit has already been fixed. On July 8, 2007, however, upon
being informed that his unit is ready for release, Tenazas failed to report back to
work for no apparent reason.12
As regards Endraca, the respondents alleged that they hired him as a spare driver
in February 2001. They allow him to drive a taxi unit whenever their regular
driver will not be able to report for work. In July 2003, however, Endraca
stopped reporting for work without informing the company of his reason.
Subsequently, the respondents learned that a complaint for illegal dismissal was
filed by Endraca against them. They strongly maintained, however, that they
could never have terminated Endraca in March 2006 since he already stopped
reporting for work as early as July 2003. Even then, they expressed willingness
to accommodate Endraca should he wish to work as a spare driver for the
company again since he was never really dismissed from employment anyway.13
BAUTISTA, Coleen Joyce Q. Page 25 of 58
On May 29, 2008, the petitioners, by registered mail, filed a Motion to Admit
Additional Evidence.14 They alleged that after diligent efforts, they were able to
discover new pieces of evidence that will substantiate the allegations in their
position paper. Attached with the motion are the following: (a) Joint Affidavit of
the petitioners;15 (2) Affidavit of Good Faith of Aloney Rivera, a co-driver;16 (3)
pictures of the petitioners wearing company shirts;17 and (4) Tenazas’
Certification/Record of Social Security System (SSS) contributions.18
The Ruling of the Labor Arbiter
On May 30, 2008, the Labor Arbiter (LA) rendered a Decision,19 which
pertinently states, thus:
In the case of complainant Jaime Francisco, respondents categorically denied the
existence of an employer-employee relationship. In this situation, the burden of
proof shifts to the complainant to prove the existence of a regular employment.
Complainant Francisco failed to present evidence of regular employment
available to all regular employees, such as an employment contract, company
ID, SSS, withholding tax certificates, SSS membership and the like.
In the case of complainant Isidro Endraca, respondents claim that he was only an
extra driver who stopped reporting to queue for available taxi units which he
could drive. In fact, respondents offered him in their Position Paper on record,
immediate reinstatement as extra taxi driver which offer he refused.
In case of Bernard Tenazas, he was told to wait while his taxi was under repair
but he did not report for work after the taxi was repaired. Respondents[,] in their
Position Paper, on record likewise, offered him immediate reinstatement, which
offer he refused.
We must bear in mind that the complaint herein is one of actual dismissal. But
there was no formal investigations, no show cause memos, suspension memos or
termination memos were never issued. Otherwise stated, there is no proof of
overt act of dismissal committed by herein respondents.
We are therefore constrained to rule that there was no illegal dismissal in the
case at bar.
The situations contemplated by law for entitlement to separation pay does [sic]
not apply.
WHEREFORE, premises considered, instant consolidated complaints are hereby
dismissed for lack of merit.
SO ORDERED.20
The Ruling of the NLRC
Unyielding, the petitioners appealed the decision of the LA to the NLRC.
Subsequently, on June 23, 2009, the NLRC rendered a Decision,21 reversing the
appealed decision of the LA, holding that the additional pieces of evidence
belatedly submitted by the petitioners sufficed to establish the existence of
employer-employee relationship and their illegal dismissal. It held, thus:
In the challenged decision, the Labor Arbiter found that it cannot be said that the
complainants were illegally dismissed, there being no showing, in the first place,
that the respondent [sic] terminated their services. A portion thereof reads:
"We must bear in mind that the complaint herein is one of actual dismissal. But
there were no formal investigations, no show cause memos, suspension memos
or termination memos were never issued. Otherwise stated, there is no proof of
overt act of dismissal committed by herein respondents.
We are therefore constrained to rule that there was no illegal dismissal in the
case at bar."
Issue: [W]hether or not the complainants were illegally dismissed from
employment.
It is possible that the complainants’ Motion to Admit Additional Evidence did
not reach the Labor Arbiter’s attention because he had drafted the challenged
decision even before they submitted it, and thereafter, his staff attended only to
clerical matters, and failed to bring the motion in question to his attention. It is
now up to this Commission to consider the complainants’ additional evidence.
Anyway, if this Commission must consider evidence submitted for the first time
on appeal (Andaya vs. NLRC, G.R. No. 157371, July 15, 2005), much more so
must it consider evidence that was simply overlooked by the Labor Arbiter.
Among the additional pieces of evidence submitted by the complainants are the
following: (1) joint affidavit (records, p. 51-52) of the three (3) complainants; (2)
affidavit (records, p. 53) of Aloney Rivera y Aldo; and (3) three (3) pictures
(records, p. 54) referred to by the complainant in their joint affidavit showing
them wearing t-shirts bearing the name and logo of the respondent’s company.
xxxx
WHEREFORE, the decision appealed from is hereby REVERSED. Respondent
Rom[u]aldo Villegas doing business under the name and style Villegas Taxi
Transport is hereby ordered to pay the complainants the following (1) full
backwages from the date of their dismissal (July 3, 2007 for Tena[z]as, June 4,
2004 for Francisco, and March 6, 2006 for Endraca[)] up to the date of the
finality of this decision[;] (2) separation pay equivalent to one month for every
year of service; and (3) attorney’s fees equivalent to ten percent (10%) of the
total judgment awards.
SO ORDERED.22
BAUTISTA, Coleen Joyce Q. Page 26 of 58
On July 24, 2009, the respondents filed a motion for reconsideration but the
NLRC denied the same in its Resolution23 dated September 23, 2009.
The Ruling of the CA
Unperturbed, the respondents filed a petition for certiorari with the CA. On
March 11, 2010, the CA rendered a Decision,24 affirming with modification the
Decision dated June 23, 2009 of the NLRC. The CA agreed with the NLRC’s
finding that Tenazas and Endraca were employees of the company, but ruled
otherwise in the case of Francisco for failing to establish his relationship with
the company. It also deleted the award of separation pay and ordered for
reinstatement of Tenazas and Endraca. The pertinent portions of the decision
read as follows:
At the outset, We declare that respondent Francisco failed to prove that an
employer-employee relationship exists between him and R. Transport. If there is
no employer-employee relationship in the first place, the duty of R. Transport to
adhere to the labor standards provisions of the Labor Code with respect to
Francisco is questionable.
xxxx
Although substantial evidence is not a function of quantity but rather of quality,
the peculiar environmental circumstances of the instant case demand that
something more should have been proffered. Had there been other proofs of
employment, such as Francisco’s inclusion in R.R.
Transport’s payroll, this Court would have affirmed the finding of employer-
employee relationship.1âwphi1 The NLRC, therefore, committed grievous error
in ordering R. Transport to answer for Francisco’s claims.
We now tackle R. Transport’s petition with respect to Tenazas and Endraca, who
are both admitted to be R. Transport’s employees. In its petition, R. Transport
puts forth the theory that it did not terminate the services of respondents but that
the latter deliberately abandoned their work. We cannot subscribe to this theory.
xxxx
Considering that the complaints for illegal dismissal were filed soon after the
alleged dates of dismissal, it cannot be inferred that respondents Tenazas and
Endraca intended to abandon their employment. The complainants for dismissal
are, in themselves, pleas for the continuance of employment. They are
incompatible with the allegation of abandonment. x x x.
For R. Transport’s failure to discharge the burden of proving that the dismissal of
respondents Tenazas and Endraca was for a just cause, We are constrained to
uphold the NLRC’s conclusion that their dismissal was not justified and that
they are entitled to back wages. Because they were illegally dismissed, private
respondents Tenazas and Endraca are entitled to reinstatement and back wages x
x x.
xxxx
However, R. Transport is correct in its contention that separation pay should not
be awarded because reinstatement is still possible and has been offered. It is
well[-]settled that separation pay is granted only in instances where
reinstatement is no longer feasible or appropriate, which is not the case here.
xxxx
WHEREFORE, the Decision of the National Labor Relations Commission dated
23 June 2009, in NLRC LAC Case No. 07-002648-08, and its Resolution dated
23 September 2009 denying reconsideration thereof are AFFIRMED with
MODIFICATION in that the award of Jaime Francisco’s claims is DELETED.
The separation pay granted in favor of Bernard Tenazas and Isidro Endraca is,
likewise, DELETED and their reinstatement is ordered instead.
SO ORDERED.25 (Citations omitted)
On March 19, 2010, the petitioners filed a motion for reconsideration but the
same was denied by the CA in its Resolution26 dated June 28, 2010.
Undeterred, the petitioners filed the instant petition for review on certiorari
before this Court on July 15, 2010.
The Ruling of this Court
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.
Remarkably, the LA, NLRC and the CA had varying assessment on the matters
at hand. The LA believed that, with the admission of the respondents, there is no
longer any question regarding the status of both Tenazas and Endraca being
employees of the company. However, he ruled that the same conclusion does not
hold with respect to Francisco whom the respondents denied to have ever
employed or known. With the respondents’ denial, the burden of proof shifts to
Francisco to establish his regular employment. Unfortunately, the LA found that
Francisco failed to present sufficient evidence to prove regular employment such
as company ID, SSS membership, withholding tax certificates or similar articles.
Thus, he was not considered an employee of the company. Even then, the LA
held that Tenazas and Endraca could not have been illegally dismissed since
there was no overt act of dismissal committed by the respondents.27
On appeal, the NLRC reversed the ruling of the LA and ruled that the petitioners
were all employees of the company. The NLRC premised its conclusion on the
BAUTISTA, Coleen Joyce Q.
additional pieces of evidence belatedly submitted by the petitioners, which it
supposed, have been overlooked by the LA owing to the time when it was
received by the said office. It opined that the said pieces of evidence are
sufficient to establish the circumstances of their illegal termination. In particular,
it noted that in the affidavit of the petitioners, there were allegations about the
company’s practice of not issuing employment records and this was not rebutted
by the respondents. It underscored that in a situation where doubt exists between
evidence presented by the employer and the employee, the scales of justice must
be tilted in favor of the employee. It awarded the petitioners with: (1) full
backwages from the date of their dismissal up to the finality of the decision; (2)
separation pay equivalent to one month of salary for every year of service; and
(3) attorney’s fees.
On petition for certiorari, the CA affirmed with modification the decision of the
NLRC, holding that there was indeed an illegal dismissal on the part of Tenazas
and Endraca but not with respect to Francisco who failed to present substantial
evidence, proving that he was an employee of the respondents. The CA likewise
dismissed the respondents’ claim that Tenazas and Endraca abandoned their
work, asseverating that immediate filing of a complaint for illegal dismissal and
persistent pleas for continuance of employment are incompatible with
abandonment. It also deleted the NLRC’s award of separation pay and instead
ordered that Tenazas and Endraca be reinstated.28
"Well-settled is the rule that the jurisdiction of this Court in a petition for review
on certiorari under Rule 45 of the Revised Rules of Court is limited to reviewing
only errors of law, not of fact, unless the factual findings complained of are
completely devoid of support from the evidence on record, or the assailed
judgment is based on a gross misapprehension of facts."29 The Court finds that
none of the mentioned circumstances is present in this case.
In reviewing the decision of the NLRC, the CA found that no substantial
evidence was presented to support the conclusion that Francisco was an
employee of the respondents and accordingly modified the NLRC decision. It
stressed that with the respondents’ denial of employer-employee relationship, it
behooved Francisco to present substantial evidence to prove that he is an
employee before any question on the legality of his supposed dismissal becomes
appropriate for discussion. Francisco, however, did not offer evidence to
substantiate his claim of employment with the respondents. Short of the required
quantum of proof, the CA correctly ruled that the NLRC’s finding of illegal
dismissal and the monetary awards which necessarily follow such ruling lacked
factual and legal basis and must therefore be deleted.
The action of the CA finds support in Anonas Construction and Industrial Supply
Corp., et al. v. NLRC, et al.,30where the Court reiterated:
Page 27 of 58
[J]udicial review of decisions of the NLRC via petition for certiorari under Rule
65, as a general rule, is confined only to issues of lack or excess of jurisdiction
and grave abuse of discretion on the part of the NLRC. The CA does not assess
and weigh the sufficiency of evidence upon which the LA and the NLRC based
their conclusions. The issue is limited to the determination of whether or not the
NLRC acted without or in excess of its jurisdiction, or with grave abuse of
discretion in rendering the resolution, except if the findings of the NLRC are not
supported by substantial evidence.31 (Citation omitted and emphasis ours)
It is an oft-repeated rule that in labor cases, as in other administrative and quasi-
judicial proceedings, "the quantum of proof necessary is substantial evidence, or
such amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion."32 "[T]he burden of proof rests upon the party
who asserts the affirmative of an issue."33 Corollarily, as Francisco was claiming
to be an employee of the respondents, it is incumbent upon him to proffer
evidence to prove the existence of said relationship.
"[I]n determining the presence or absence of an employer-employee relationship,
the Court has consistently looked for the following incidents, to wit: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employer’s power to control the employee on the
means and methods by which the work is accomplished. The last element, the
so-called control test, is the most important element."34
There is no hard and fast rule designed to establish the aforesaid elements. Any
competent and relevant evidence to prove the relationship may be admitted.
Identification cards, cash vouchers, social security registration, appointment
letters or employment contracts, payrolls, organization charts, and personnel
lists, serve as evidence of employee status.35
In this case, however, Francisco failed to present any proof substantial enough to
establish his relationship with the respondents. He failed to present documentary
evidence like attendance logbook, payroll, SSS record or any personnel file that
could somehow depict his status as an employee. Anent his claim that 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. He could have also presented testimonial
evidence showing the respondents’ exercise of control over the means and
methods by which he undertakes his work. This is imperative in light of the
respondents’ denial of his employment and the claim of another taxi operator,
Emmanuel Villegas (Emmanuel), that he was his employer. Specifically, in his
Affidavit,36 Emmanuel alleged that Francisco was employed as a spare driver in
his taxi garage from January 2006 to December 2006, a fact that the latter failed
to deny or question in any of the pleadings attached to the records of this case.
The utter lack of evidence is fatal to Francisco’s case especially in cases like his
present predicament when the law has been very lenient in not requiring any
BAUTISTA, Coleen Joyce Q. Page 28 of 58
particular form of evidence or manner of proving the presence of employer-
employee relationship.
In Opulencia Ice Plant and Storage v. NLRC,37 this Court emphasized, thus:
No particular form of evidence is required to prove the existence of an
employer-employee relationship. Any competent and relevant evidence to prove
the relationship may be admitted. For, if only documentary evidence would be
required to show that relationship, no scheming employer would ever be brought
before the bar of justice, as no employer would wish to come out with any trace
of the illegality he has authored considering that it should take much weightier
proof to invalidate a written instrument.38
Here, Francisco simply relied on his allegation that he was an employee of the
company without any other evidence supporting his claim. Unfortunately for
him, a mere allegation in the position paper is not tantamount to evidence.
39Bereft of any evidence, the CA correctly ruled that Francisco could not be
considered an employee of the respondents.
The CA’s order of reinstatement of Tenazas and Endraca, instead of the payment
of separation pay, is also well in accordance with prevailing jurisprudence. In
Macasero v. Southern Industrial Gases Philippines,40 the Court reiterated, thus:
[A]n illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement.1âwphi1 The two reliefs provided are separate and distinct. In
instances where reinstatement is no longer feasible because of strained relations
between the employee and the employer, separation pay is granted. In effect, an
illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents’ illegal dismissal, then, are
reinstatement without loss of seniority rights, and payment of backwages
computed from the time compensation was withheld up to the date of actual
reinstatement. Where reinstatement is no longer viable as an option, separation
pay equivalent to one (1) month salary for every year of service should be
awarded as an alternative. The payment of separation pay is in addition to
payment of backwages.41 (Emphasis supplied)
Clearly, it is only when reinstatement is no longer feasible that the payment of
separation pay is ordered in lieu thereof. For instance, if reinstatement would
only exacerbate the tension and strained relations between the parties, or where
the relationship between the employer and the employee has been unduly
strained by reason of their irreconcilable differences, it would be more prudent
to order payment of separation pay instead of reinstatement.42
This doctrine of strained relations, however, should not be used recklessly or
applied loosely43 nor be based on impression alone. "It bears to stress that
reinstatement is the rule and, for the exception of strained relations to apply, it
should be proved that it is likely that if reinstated, an atmosphere of antipathy
and antagonism would be generated as to adversely affect the efficiency and
productivity of the employee concerned."44
Moreover, the existence of strained relations, it must be emphasized, is a
question of fact. In Golden Ace Builders v. Talde,45 the Court underscored:
Strained relations must be demonstrated as a fact, however, to be adequately
supported by evidence—substantial evidence to show that the relationship
between the employer and the employee is indeed strained as a necessary
consequence of the judicial controversy.46 (Citations omitted and emphasis ours)
After a perusal of the NLRC decision, this Court failed to find the factual basis
of the award of separation pay to the petitioners. The NLRC decision did not
state the facts which demonstrate that reinstatement is no longer a feasible option
that could have justified the alternative relief of granting separation pay instead.
The petitioners themselves likewise overlooked to allege circumstances which
may have rendered their reinstatement unlikely or unwise and even prayed for
reinstatement alongside the payment of separation pay in their position paper.
47 A bare claim of strained relations by reason of termination is insufficient to
warrant the granting of separation pay. Likewise, the filing of the complaint by
the petitioners does not necessarily translate to strained relations between the
parties. As a rule, no strained relations should arise from a valid and legal act
asserting one’s right.48 Although litigation may also engender a certain degree of
hostility, the understandable strain in the parties’ relation would not necessarily
rule out reinstatement which would, otherwise, become the rule rather the
exception in illegal dismissal cases.49 Thus, it was a prudent call for the CA to
delete the award of separation pay and order for reinstatement instead, in
accordance with the general rule stated in Article 27950 of the Labor Code.
Finally, the Court finds the computation of the petitioners' backwages at the rate
of ₱800.00 daily reasonable and just under the circumstances. The said rate is
consistent with the ruling of this Court in Hyatt Taxi Services, Inc. v. Catinoy,
51 which dealt with the same matter.
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 in CA-G.R. SP No. 111150 are
AFFIRMED.
SO ORDERED.
Tongko v Manulife
BAUTISTA, Coleen Joyce Q. Page 29 of 58
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic
corporation engaged in life insurance business. Renato A. Vergel De Dios was,
during the period material, its President and Chief Executive Officer. Gregorio
V. Tongko started his professional relationship with Manulife on July 1, 1977 by
virtue of a Career Agent's Agreement2 (Agreement) he executed with Manulife.
In the Agreement, it is provided that:
It is understood and agreed that the Agent is an independent contractor and
nothing contained herein shall be construed or interpreted as creating an
employer-employee relationship between the Company and the Agent.
xxxx
a) The Agent shall canvass for applications for Life Insurance, Annuities, Group
policies and other products offered by the Company, and collect, in exchange for
provisional receipts issued by the Agent, money due or to become due to the
Company in respect of applications or policies obtained by or through the Agent
or from policyholders allotted by the Company to the Agent for servicing,
subject to subsequent confirmation of receipt of payment by the Company as
evidenced by an Official Receipt issued by the Company directly to the
policyholder.
xxxx
The Company may terminate this Agreement for any breach or violation of any
of the provisions hereof by the Agent by giving written notice to the Agent
within fifteen (15) days from the time of the discovery of the breach. No waiver,
extinguishment, abandonment, withdrawal or cancellation of the right to
terminate this Agreement by the Company shall be construed for any previous
failure to exercise its right under any provision of this Agreement.
Either of the parties hereto may likewise terminate his Agreement at any time
without cause, by giving to the other party fifteen (15) days notice in writing. x x
x
In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency
Organization. In 1990, he became a Branch Manager. As the CA found, Tongko's
gross earnings from his work at Manulife, consisting of commissions,
persistency income, and management overrides, may be summarized as follows:

January to December 10, 2002 - P 865,096.07
2001 - 6,214,737.11
2000 - 8,003,180.38
1999 - 6,797,814.05
1998 - 4,805,166.34
1997 - 2,822,620.003
The problem started sometime in 2001, when Manulife instituted manpower
development programs in the regional sales management level. Relative thereto,
De Dios addressed a letter dated November 6, 20014 to Tongko regarding an
October 18, 2001 Metro North Sales Managers Meeting. In the letter, De Dios
stated:
The first step to transforming Manulife into a big league player has been very
clear - to increase the number of agents to at least 1,000 strong for a start. This
may seem diametrically opposed to the way Manulife was run when you first
joined the organization. Since then, however, substantial changes have taken
place in the organization, as these have been influenced by developments both
from within and without the company.
xxxx
The issues around agent recruiting are central to the intended objectives hence
the need for a Senior Managers' meeting earlier last month when Kevin
O'Connor, SVP - Agency, took to the floor to determine from our senior agency
leaders what more could be done to bolster manpower development. At earlier
meetings, Kevin had presented information where evidently, your Region was
the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and,
as of today, continues to remain one of the laggards in this area.
While discussions, in general, were positive other than for certain comments
from your end which were perceived to be uncalled for, it became clear that a
one-on-one meeting with you was necessary to ensure that you and management,
were on the same plane. As gleaned from some of your previous comments in
prior meetings (both in group and one-on-one), it was not clear that we were
proceeding in the same direction.
Kevin held subsequent series of meetings with you as a result, one of which I
joined briefly. In those subsequent meetings you reiterated certain views, the
validity of which we challenged and subsequently found as having no basis.
With such views coming from you, I was a bit concerned that the rest of the
Metro North Managers may be a bit confused as to the directions the company
BAUTISTA, Coleen Joyce Q. Page 30 of 58
was taking. For this reason, I sought a meeting with everyone in your
management team, including you, to clear the air, so to speak.
This note is intended to confirm the items that were discussed at the said Metro
North Region's Sales Managers meeting held at the 7/F Conference room last 18
October.
xxxx
Issue # 2: "Some Managers are unhappy with their earnings and would want to
revert to the position of agents."
This is an often repeated issue you have raised with me and with Kevin. For this
reason, I placed the issue on the table before the rest of your Region's Sales
Managers to verify its validity. As you must have noted, no Sales Manager came
forward on their own to confirm your statement and it took you to name Malou
Samson as a source of the same, an allegation that Malou herself denied at our
meeting and in your very presence.
This only confirms, Greg, that those prior comments have no solid basis at all. I
now believe what I had thought all along, that these allegations were simply
meant to muddle the issues surrounding the inability of your Region to meet its
agency development objectives!
Issue # 3: "Sales Managers are doing what the company asks them to do but, in
the process, they earn less."
xxxx
All the above notwithstanding, we had your own records checked and we found
that you made a lot more money in the Year 2000 versus 1999. In addition, you
also volunteered the information to Kevin when you said that you probably will
make more money in the Year 2001 compared to Year 2000. Obviously, your
above statement about making "less money" did not refer to you but the way you
argued this point had us almost believing that you were spouting the gospel of
truth when you were not. x x x
xxxx
All of a sudden, Greg, I have become much more worried about your ability to
lead this group towards the new direction that we have been discussing these
past few weeks, i.e., Manulife's goal to become a major agency-led distribution
company in the Philippines. While as you claim, you have not stopped anyone
from recruiting, I have never heard you proactively push for greater agency
recruiting. You have not been proactive all these years when it comes to agency
growth.
xxxx
I cannot afford to see a major region fail to deliver on its developmental goals
next year and so, we are making the following changes in the interim:
1. You will hire at your expense a competent assistant who can unload you of
much of the routine tasks which can be easily delegated. This assistant should be
so chosen as to complement your skills and help you in the areas where you feel
"may not be your cup of tea".
You have stated, if not implied, that your work as Regional Manager may be too
taxing for you and for your health. The above could solve this problem.
xxxx
2. Effective immediately, Kevin and the rest of the Agency Operations will deal
with the North Star Branch (NSB) in autonomous fashion. x x x
I have decided to make this change so as to reduce your span of control and
allow you to concentrate more fully on overseeing the remaining groups under
Metro North, your Central Unit and the rest of the Sales Managers in Metro
North. I will hold you solely responsible for meeting the objectives of these
remaining groups.
xxxx
The above changes can end at this point and they need not go any further. This,
however, is entirely dependent upon you. But you have to understand that
meeting corporate objectives by everyone is primary and will not be
compromised. We are meeting tough challenges next year and I would want
everybody on board. Any resistance or holding back by anyone will be dealt
with accordingly.
Subsequently, De Dios wrote Tongko another letter dated December 18,
2001,5 terminating Tongko's services, thus:
It would appear, however, that despite the series of meetings and
communications, both one-on-one meetings between yourself and SVP Kevin
O'Connor, some of them with me, as well as group meetings with your Sales
Managers, all these efforts have failed in helping you align your directions with
Management's avowed agency growth policy.
xxxx
On account thereof, Management is exercising its prerogative under Section 14
of your Agents Contract as we are now issuing this notice of termination of your
Agency Agreement with us effective fifteen days from the date of this letter.
BAUTISTA, Coleen Joyce Q. Page 31 of 58
Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC
against Manulife for illegal dismissal. The case, docketed as NLRC NCR Case
No. 11-10330-02, was raffled to Labor Arbiter Marita V. Padolina.
In the Complaint, Tongko, in a bid to establish an employer-employee
relationship, alleged that De Dios gave him specific directives on how to manage
his area of responsibility in the latter's letter dated November 6, 2001. He further
claimed that Manulife exercised control over him as follows:
Such control was certainly exercised by respondents over the herein
complainant. It was Manulife who hired, promoted and gave various
assignments to him. It was the company who set objectives as regards
productions, recruitment, training programs and all activities pertaining to its
business. Manulife prescribed a Code of Conduct which would govern in minute
detail all aspects of the work to be undertaken by employees, including the sales
process, the underwriting process, signatures, handling of money, policyholder
service, confidentiality, legal and regulatory requirements and grounds for
termination of employment. The letter of Mr. De Dios dated 06 November 2001
left no doubt as to who was in control. The subsequent termination letter dated
18 December 2001 again established in no uncertain terms the authority of the
herein respondents to control the employees of Manulife. Plainly, the
respondents wielded control not only as to the ends to be achieved but the ways
and means of attaining such ends.6
Tongko bolstered his argument by citing Insular Life Assurance Co., Ltd. v.
NLRC (4th Division)7 and Great Pacific Life Assurance Corporation v. NLRC,
8 which Tongko claimed to be similar to the instant case.
Tongko further claimed that his dismissal was without basis and that he was not
afforded due process. He also cited the Manulife Code of Conduct by which his
actions were controlled by the company.
Manulife then filed a Position Paper with Motion to Dismiss dated February 27,
2003,9 in which it alleged that Tongko is not its employee, and that it did not
exercise "control" over him. Thus, Manulife claimed that the NLRC has no
jurisdiction over the case.
In a Decision dated April 15, 2004, Labor Arbiter Marita V. Padolina dismissed
the complaint for lack of an employer-employee relationship. Padolina found
that applying the four-fold test in determining the existence of an employer-
employee relationship, none was found in the instant case. The dispositive
portion thereof states:
WHEREFORE, premises considered, judgment is hereby rendered
DISMISSING the instant complaint for lack of jurisdiction, there being no
employer-employee relationship between the parties.
SO ORDERED.
Tongko appealed the arbiter's Decision to the NLRC which reversed the same
and rendered a Decision dated September 27, 2004 finding Tongko to have been
illegally dismissed.
The NLRC's First Division, while finding an employer-employee relationship
between Manulife and Tongko applying the four-fold test, held Manulife liable
for illegal dismissal. It further stated that Manulife exercised control over
Tongko as evidenced by the letter dated November 6, 2001 of De Dios and
wrote:
The above-mentioned letter shows the extent to which respondents controlled
complainant's manner and means of doing his work and achieving the goals set
by respondents. The letter shows how respondents concerned themselves with
the manner complainant managed the Metro North Region as Regional Sales
Manager, to the point that respondents even had a say on how complainant
interacted with other individuals in the Metro North Region. The letter is in fact
replete with comments and criticisms on how complainant carried out his
functions as Regional Sales Manager.
More importantly, the letter contains an abundance of directives or orders that
are intended to directly affect complainant's authority and manner of carrying
out his functions as Regional Sales Manager.10 x x x
Additionally, the First Division also ruled that:
Further evidence of [respondents'] control over complainant can be found in the
records of the case. [These] are the different codes of conduct such as the Agent
Code of Conduct, the Manulife Financial Code of Conduct, and the Manulife
Financial Code of Conduct Agreement, which serve as the foundations of the
power of control wielded by respondents over complainant that is further
manifested in the different administrative and other tasks that he is required to
perform. These codes of conduct corroborate and reinforce the display of
respondents' power of control in their 06 November 2001 Letter to complainant.
11
The fallo of the September 27, 2004 Decision reads:
WHEREFORE, premises considered, the appealed Decision is hereby reversed
and set aside. We find complainant to be a regular employee of respondent
Manulife and that he was illegally dismissed from employment by respondents.
In lieu of reinstatement, respondent Manulife is hereby ordered to pay
complainant separation pay as above set forth. Respondent Manulife is further
ordered to pay complainant backwages from the time he was dismissed on 02
January 2002 up to the finality of this decision also as indicated above.
BAUTISTA, Coleen Joyce Q. Page 32 of 58
xxxx
All other claims are hereby dismissed for utter lack of merit.
From this Decision, Manulife filed a motion for reconsideration which was
denied by the NLRC First Division in a Resolution dated December 16, 2004.12
Thus, Manulife filed an appeal with the CA docketed as CA-G.R. SP No. 88253.
Thereafter, the CA issued the assailed Decision dated March 29, 2005, finding
the absence of an employer-employee relationship between the parties and
deeming the NLRC with no jurisdiction over the case. The CA arrived at this
conclusion while again applying the four-fold test. The CA found that Manulife
did not exercise control over Tongko that would render the latter an employee of
Manulife. The dispositive portion reads:
WHEREFORE, premises considered, the present petition is hereby GRANTED
and the writ prayed for accordingly GRANTED. The assailed Decision dated
September 27, 2004 and Resolution dated December 16, 2004 of the National
Labor Relations Commission in NLRC NCR Case No. 00-11-10330-2002
(NLRC NCR CA No. 040220-04) are hereby ANNULLED and SET ASIDE. The
Decision dated April 15, 2004 of Labor Arbiter Marita V. Padolina is hereby
REINSTATED.
Hence, Tongko filed this petition and presented the following issues:
A
The Court of Appeals committed grave abuse of discretion in granting
respondents' petition for certiorari.
B
The Court of Appeals committed grave abuse of discretion in annulling and
setting aside the Decision dated September 27, 2004 and Resolution dated
December 16, 2004 in finding that there is no employer-employee relationship
between petitioner and respondent.
C
The Court of Appeals committed grave abuse of discretion in annulling and
setting aside the Decision dated September 27, 2004 and Resolution dated
December 16, 2004 which found petitioner to have been illegally dismissed and
ordered his reinstatement with payment of backwages.13
Restated, the issues are: (1) Was there an employer-employee relationship
between Manulife and Tongko? and (2) If yes, was Manulife guilty of illegal
dismissal?
The Court's Ruling
This petition is meritorious.
Tongko Was An Employee of Manulife
The basic issue of whether or not the NLRC has jurisdiction over the case
resolves itself into the question of whether an employer-employee relationship
existed between Manulife and Tongko. If no employer-employee relationship
existed between the two parties, then jurisdiction over the case properly lies with
the Regional Trial Court.
In the determination of whether an employer-employee relationship exists
between two parties, this Court applies the four-fold test to determine the
existence of the elements of such relationship. In Pacific Consultants
International Asia, Inc. v. Schonfeld, the Court set out the elements of an
employer-employee relationship, thus:
Jurisprudence is firmly settled that whenever the existence of an employment
relationship is in dispute, four elements constitute the reliable yardstick: (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's
conduct. It is the so-called "control test" which constitutes the most important
index of the existence of the employer-employee relationship that is, whether the
employer controls or has reserved the right to control the employee not only as
to the result of the work to be done but also as to the means and methods by
which the same is to be accomplished. Stated otherwise, 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.14
The NLRC, for its part, applied the four-fold test and found the existence of all
the elements and declared Tongko an employee of Manulife. The CA, on the
other hand, found that the element of control as an indicator of the existence of
an employer-employee relationship was lacking in this case. The NLRC and the
CA based their rulings on the same findings of fact but differed in their
interpretations.
The NLRC arrived at its conclusion, first, on the basis of the letter dated
November 6, 2001 addressed by De Dios to Tongko. According to the NLRC,
the letter contained "an abundance of directives or orders that are intended to
directly affect complainant's authority and manner of carrying out his functions
as Regional Sales Manager." It enumerated these "directives" or "orders" as
follows:
1. You will hire at your expense a competent assistant who can unload you of
much of the routine tasks which can be easily delegated. x x x
xxxx
BAUTISTA, Coleen Joyce Q. Page 33 of 58
This assistant should be hired immediately.
2. Effective immediately, Kevin and the rest of the Agency Operations will deal
with the North Star Branch (NSB) in autonomous fashion x x x.
xxxx
I have decided to make this change so as to reduce your span of control and
allow you to concentrate more fully on overseeing the remaining groups under
Metro North, your Central Unit and the rest of the Sales Managers in Metro
North. x x x
3. Any resistance or holding back by anyone will be dealt with accordingly.
4. I have been straightforward in this my letter and I know that we can continue
to work together… but it will have to be on my terms. Anything else is
unacceptable!
The NLRC further ruled that the different codes of conduct that were applicable
to Tongko served as the foundations of the power of control wielded by Manulife
over Tongko that is further manifested in the different administrative and other
tasks that he was required to perform.
The NLRC also found that Tongko was required to render exclusive service to
Manulife, further bolstering the existence of an employer-employee relationship.
Finally, the NLRC ruled that Tongko was integrated into a management structure
over which Manulife exercised control, including the actions of its officers. The
NLRC held that such integration added to the fact that Tongko did not have his
own agency belied Manulife's claim that Tongko was an independent contractor.
The CA, however, considered the finding of the existence of an employer-
employee relationship by the NLRC as far too sweeping having as its only basis
the letter dated November 6, 2001 of De Dios. The CA did not concur with the
NLRC's ruling that the elements of control as pointed out by the NLRC are
"sufficient indicia of control that negates independent contractorship and
conclusively establish an employer-employee relationship between"15 Tongko
and Manulife. The CA ruled that there is no employer-employee relationship
between Tongko and Manulife.
An impasse appears to have been reached between the CA and the NLRC on the
sole issue of control over an employee's conduct. It bears clarifying that such
control not only applies to the work or goal to be done but also to the means and
methods to accomplish it.16 In Sonza v. ABS-CBN Broadcasting Corporation, we
explained that not all forms of control would establish an employer-employee
relationship, to wit:
Further, not every form of control that a party reserves to himself over the
conduct of the other party in relation to the services being rendered may be
accorded the effect of establishing an employer-employee relationship. The facts
of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs.
NLRC. In said case, we held that:
Logically, the line should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and those
that control or fix the methodology and bind or restrict the party hired to
the use of such means. The first, which aim only to promote the result,
create no employer-employee relationship unlike the second, which address
both the result and the means used to achieve it.17 (Emphasis supplied.)
We ruled in Insular Life Assurance Co., Ltd. v. NLRC (Insular) that:
It is, therefore, usual and expected for an insurance company to promulgate a set
of rules to guide its commission agents in selling its policies that they may not
run afoul of the law and what it requires or prohibits. Of such a character are the
rules which prescribe the qualifications of persons who may be insured, subject
insurance applications to processing and approval by the Company, and also
reserve to the Company the determination of the premiums to be paid and the
schedules of payment. None of these really invades the agent's contractual
prerogative to adopt his own selling methods or to sell insurance at his own time
and convenience, hence cannot justifiably be said to establish an employer-
employee relationship between him and the company.18
Hence, we ruled in Insular that no employer-employee relationship existed
therein. However, such ruling was tempered with the qualification that had there
been evidence that the company promulgated rules or regulations that effectively
controlled or restricted an insurance agent's choice of methods or the methods
themselves in selling insurance, an employer-employee relationship would have
existed. In other words, the Court in Insular in no way definitively held that
insurance agents are not employees of insurance companies, but rather made the
same a case-to-case basis. We held:
The respondents limit themselves to pointing out that Basiao's contract with the
Company bound him to observe and conform to such rules and regulations as the
latter might from time to time prescribe. No showing has been made that any
such rules or regulations were in fact promulgated, much less that any rules
existed or were issued which effectively controlled or restricted his choice of
methods or the methods themselves of selling insurance. Absent such
showing, the Court will not speculate that any exceptions or qualifications
were imposed on the express provision of the contract leaving Basiao "...
free to exercise his own judgment as to the time, place and means of
soliciting insurance."19 (Emphasis supplied.)
BAUTISTA, Coleen Joyce Q. Page 34 of 58
There is no conflict between our rulings in Insular and in Great Pacific Life
Assurance Corporation. We said in the latter case:
[I]t cannot be gain said that Grepalife had control over private respondents'
performance as well as the result of their efforts. A cursory reading of their
respective functions as enumerated in their contracts reveals that the
company practically dictates the manner by which their jobs are to be
carried out. For instance, the District Manager must properly account, record
and document the company's funds spot-check and audit the work of the zone
supervisors, conserve the company's business in the district through
‘reinstatements', follow up the submission of weekly remittance reports of the
debit agents and zone supervisors, preserve company property in good condition,
train understudies for the position of district manager, and maintain his quota of
sales (the failure of which is a ground for termination). On the other hand, a zone
supervisor must direct and supervise the sales activities of the debit agents under
him, conserve company property through "reinstatements", undertake and
discharge the functions of absentee debit agents, spot-check the records of debit
agents, and insure proper documentation of sales and collections by the debit
agents.20 (Emphasis supplied.)
Based on the foregoing cases, if the specific rules and regulations that are
enforced against insurance agents or managers are such that would directly
affect the means and methods by which such agents or managers would achieve
the objectives set by the insurance company, they are employees of the insurance
company.
In the instant case, Manulife had the power of control over Tongko that would
make him its employee. Several factors contribute to this conclusion.
In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it
is provided that:
The Agent hereby agrees to comply with all regulations and requirements of the
Company as herein provided as well as maintain a standard of knowledge and
competency in the sale of the Company's products which satisfies those set by
the Company and sufficiently meets the volume of new business required of
Production Club membership.21
Under this provision, an agent of Manulife must comply with three (3)
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.
Among the company regulations of Manulife are the different codes of conduct
such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and
Manulife Financial Code of Conduct Agreement, which demonstrate the power
of control exercised by the company over Tongko. The fact that Tongko was
obliged to obey and comply with the codes of conduct was not disowned by
respondents.
Thus, with the company regulations and requirements alone, the fact that Tongko
was an employee of Manulife may already be established. Certainly, these
requirements controlled the means and methods by which Tongko was to achieve
the company's goals.
More importantly, Manulife's evidence establishes the fact that Tongko was
tasked to perform administrative duties that establishes his employment with
Manulife.
In its Comment (Re: Petition for Review dated 15 April 2005) dated August 5,
2005, Manulife attached affidavits of its agents purportedly to support its claim
that Tongko, as a Regional Sales Manager, did not perform any administrative
functions. An examination of these affidavits would, however, prove the
opposite.
In an Affidavit dated April 28, 2003,22 John D. Chua, a Regional Sales Manager
of Manulife, stated:
4. On September 1, 1996, my services were engaged by Manulife as an Agency
Regional Sales Manager ("RSM") for Metro South Region pursuant to an
Agency Contract. As such RSM, I have the following functions:
1. Refer and recommend prospective agents to Manulife
2. Coach agents to become productive
3. Regularly meet with, and coordinate activities of agents affiliated to my
region.
While Amada Toledo, a Branch Manager of Manulife, stated in her Affidavit
dated April 29, 200323that:
3. In January 1997, I was assigned as a Branch Manager ("BM") of Manulife for
the Metro North Sector;
4. As such BM, I render the following services:
a. Refer and recommend prospective agents to Manulife;
b. Train and coordinate activities of other commission agents;
c. Coordinate activities of Agency Managers who, in turn, train and coordinate
activites of other commission agents;
BAUTISTA, Coleen Joyce Q.
d. Achieve agreed production objectives in terms of Net Annualized
Commissions and Case Count and recruitment goals; and
e. Sell the various products of Manulife to my personal clients.
While Ma. Lourdes Samson, a Unit Manager of Manulife, stated in her Affidavit
dated April 28, 200324that:
3. In 1977, I was assigned as a Unit Manager ("UM") of North Peaks Unit, North
Star Branch, Metro North Region;
4. As such UM, I render the following services:
a. To render or recommend prospective agents to be licensed, trained and
contracted to sell Manulife products and who will be part of my Unit;
b. To coordinate activities of the agents under my Unit in their daily, weekly and
monthly selling activities, making sure that their respective sales targets are met;
c. To conduct periodic training sessions for my agents to further enhance their
sales skills.
d. To assist my agents with their sales activities by way of joint fieldwork,
consultations and one-on- one evaluation and analysis of particular accounts.
e. To provide opportunities to motivate my agents to succeed like conducting
promos to increase sales activities and encouraging them to be involved in
company and industry activities.
f. To provide opportunities for professional growth to my agents by encouraging
them to be a member of the LUCAP (Life Underwriters Association of the
Philippines).
A comparison of the above functions and those contained in the Agreement with
those cited in Great Pacific Life Assurance Corporation25 reveals a striking
similarity that would more than support a similar finding as in that case. Thus,
there was an employer-employee relationship between the parties.
Additionally, it must be pointed out that the fact that Tongko was tasked with
recruiting a certain number of agents, in addition to his other administrative
functions, leads to no other conclusion that he was an employee of Manulife.
In his letter dated November 6, 2001, De Dios harped on the direction of
Manulife of becoming a major agency-led distribution company whereby greater
agency recruitment is required of the managers, including Tongko. De Dios
made it clear that agent recruitment has become the primary means by which
Manulife intends to sell more policies. More importantly, it is Tongko's alleged
failure to follow this principle of recruitment that led to the termination of his
Page 35 of 58
employment with Manulife. With this, it is inescapable that Tongko was an
employee of Manulife.
Tongko Was Illegally Dismissed
In its Petition for Certiorari dated January 7, 200526 filed before the CA,
Manulife argued that even if Tongko is considered as its employee, his
employment was validly terminated on the ground of gross and habitual neglect
of duties, inefficiency, as well as willful disobedience of the lawful orders of
Manulife. Manulife stated:
In the instant case, private respondent, despite the written reminder from Mr. De
Dios refused to shape up and altogether disregarded the latter's advice resulting
in his laggard performance clearly indicative of his willful disobedience of the
lawful orders of his superior. x x x
xxxx
As private respondent has patently failed to perform a very fundamental duty,
and that is to yield obedience to all reasonable rules, orders and instructions of
the Company, as well as gross failure to reach at least minimum quota, the
termination of his engagement from Manulife is highly warranted and therefore,
there is no illegal dismissal to speak of.
It is readily evident from the above-quoted portions of Manulife's petition that it
failed to cite a single iota of evidence to support its claims. Manulife did not
even point out which order or rule that Tongko disobeyed. More importantly,
Manulife did not point out the specific acts that Tongko was guilty of that would
constitute gross and habitual neglect of duty or disobedience. Manulife merely
cited Tongko's alleged "laggard performance," without substantiating such claim,
and equated the same to disobedience and neglect of duty.
We cannot, therefore, accept Manulife's position.
In Quebec, Sr. v. National Labor Relations Commission, we ruled that:
When there is no showing of a clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the
burden is on the employer to prove that the termination was for a valid or
authorized cause. This burden of proof appropriately lies on the shoulders of the
employer and not on the employee because a worker's job has some of the
characteristics of property rights and is therefore within the constitutional mantle
of protection. No person shall be deprived of life, liberty or property without due
process of law, nor shall any person be denied the equal protection of the laws.
Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms
that the burden of proving the validity of the termination of employment rests on
BAUTISTA, Coleen Joyce Q. Page 36 of 58
the employer. Failure to discharge this evidential burden would necessarily mean
that the dismissal was not justified, and, therefore, illegal.27
We again ruled in Times Transportation Co., Inc. v. National Labor Relations
Commission that:
The law mandates that the burden of proving the validity of the termination of
employment rests with the employer. Failure to discharge this evidentiary burden
would necessarily mean that the dismissal was not justified, and, therefore,
illegal. Unsubstantiated suspicions, accusations and conclusions of employers do
not provide for legal justification for dismissing employees. In case of doubt,
such cases should be resolved in favor of labor, pursuant to the social justice
policy of our labor laws and Constitution.28
This burden of proof was clarified in Community Rural Bank of San Isidro
(N.E.), Inc. v. Paez to mean substantial evidence, to wit:
The Labor Code provides that an employer may terminate the services of an
employee for just cause and this must be supported by substantial evidence. The
settled rule in administrative and quasi-judicial proceedings is that proof beyond
reasonable doubt is not required in determining the legality of an employer's
dismissal of an employee, and not even a preponderance of evidence is
necessary as substantial evidence is considered sufficient. Substantial evidence is
more than a mere scintilla of evidence or relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise.29
Here, Manulife failed to overcome such burden of proof. It must be reiterated
that Manulife even failed to identify the specific acts by which Tongko's
employment was terminated much less support the same with substantial
evidence. To repeat, mere conjectures cannot work to deprive employees of their
means of livelihood. Thus, it must be concluded that Tongko was illegally
dismissed.
Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons
that Tongko not being its employee is not entitled to such notices. Since we have
ruled that Tongko is its employee, however, Manulife clearly failed to afford
Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal
dismissal. In Quebec, Sr., we also stated:
Furthermore, not only does our legal system dictate that the reasons for
dismissing a worker must be pertinently substantiated, it also mandates that the
manner of dismissal must be properly done, otherwise, the termination itself is
gravely defective and may be declared unlawful.30
For breach of the due process requirements, Manulife is liable to Tongko in the
amount of PhP 30,000 as indemnity in the form of nominal damages.31
Finally, Manulife raises the issue of the correctness of the computation of the
award to Tongko made by the NLRC by claiming that Songco v. National Labor
Relations Commission32 is inapplicable to the instant case, considering that
Songco was dismissed on the ground of retrenchment.
An examination of Songco reveals that it may be applied to the present case. In
that case, Jose Songco was a salesman of F.E. Zuellig (M), Inc. which terminated
the services of Songco on the ground of retrenchment due to financial losses.
The issue raised to the Court, however, was whether commissions are considered
as part of wages in order to determine separation pay. Thus, the fact that Songco
was dismissed due to retrenchment does not hamper the application thereof to
the instant case. What is pivotal is that we ruled in Songco that commissions are
part of wages for the determination of separation pay.
Article 279 of the Labor Code on security of tenure pertinently provides that:
In cases of regular employment the employer shall not terminate the services of
an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time
of his actual reinstatement.
In Triad Security & Allied Services, Inc. v. Ortega, Jr. (Triad), we thus stated that
an illegally dismissed employee shall be entitled to backwages and separation
pay, if reinstatement is no longer viable:
As the law now stands, an illegally dismissed employee is entitled to two reliefs,
namely: backwages and reinstatement. These are separate and distinct from each
other. However, separation pay is granted where reinstatement is no longer
feasible because of strained relations between the employee and the employer. In
effect, an illegally dismissed employee is entitled to either reinstatement, if
viable, or separation pay if reinstatement is no longer viable and backwages.33
Taking into consideration the cases of Songco and Triad, we find correct the
computation of the NLRC that the monthly gross wage of Tongko in 2001 was
PhP 518,144.76. For having been illegally dismissed, Tongko is entitled to
reinstatement with full backwages under Art. 279 of the Labor Code. Due to the
strained relationship between Manulife and Tongko, reinstatement, however, is
no longer advisable. Thus, Tongko will be entitled to backwages from January 2,
2002 (date of dismissal) up to the finality of this decision. Moreover, Manulife
will pay Tongko separation pay of one (1) month salary for every year of service
that is from 1977 to 2001 amounting to PhP 12,435,474.24, considering that
reinstatement is not feasible. Tongko shall also be entitled to an award of
attorney's fees in the amount of ten percent (10%) of the aggregate amount of the
above awards.
BAUTISTA, Coleen Joyce Q. Page 37 of 58
WHEREFORE, the petition is hereby GRANTED. The assailed March 29,
2005 Decision of the CA in CA-G.R. SP No. 88253 is REVERSED and SET
ASIDE. The Decision dated September 27, 2004 of the NLRC
is REINSTATED with the following modifications:
Manulife shall pay Tongko the following:
(1) Full backwages, inclusive of allowances and other benefits or their monetary
equivalent from January 2, 2002 up to the finality of this Decision;
(2) Separation pay of one (1) month salary for every year of service from 1977
up to 2001 amounting to PhP 12,435,474.24;
(3) Nominal damages of PhP 30,000 as indemnity for violation of the due
process requirements; and
(4) Attorney's fees equivalent to ten percent (10%) of the aforementioned
backwages and separation pay.
Costs against respondent Manulife.
TAPE vs. Servana
Servaña started out as a security for the Agro-Commercial Security Agency
(ACSA) since 1987. The agency had a contract with TV network RPN 9.
On the other hand, Television and Production Exponents, Inc (TAPE). is a
company in charge of TV programming and was handling shows like Eat
Bulaga! Eat Bulaga! was then with RPN 9.
In 1995, RPN 9 severed its relations with ACSA. TAPE retained the services of
Servaña as a security guard and absorbed him.
In 2000, TAPE contracted the services of Sun Shield Security Agency. It then
notified Servaña that he is being terminated because he is now a redundant
employee.
Servaña then filed a case for illegal Dismissal. The Labor Arbiter ruled that
Servaña’s dismissal is valid on the ground of redundancy but though he was not
illegally dismissed he is still entitled to be paid a separation pay which is
amounting to one month pay for every year of service which totals to
P78,000.00.
TAPE appealed and argued that Servaña is not entitled to receive separation pay
for he is considered as a talent and not as a regular employee; that as such, there
is no employee-employer relationship between TAPE and Servaña. The National
Labor Relations Commission ruled in favor of TAPE. It ruled that Servaña is a
program employee. Servaña appealed before the Court of Appeals.
The Court of Appeals reversed the NLRC and affirmed the LA. The CA further
ruled that TAPE and its president Tuviera should pay for nominal damages
amounting to P10,000.00.
ISSUE: Whether or not there is an employee-employer relationship existing
between TAPE and Servaña.
HELD: Yes. Servaña is a regular employee.
In determining Servaña’s nature of employment, the Supreme Court employed
the Four Fold Test:
1. Whether or not employer conducted the selection and engagement of the
employee.
Servaña was selected and engaged by TAPE when he was absorbed as a “talent”
in 1995. He is not really a talent, as termed by TAPE, because he performs an
activity which is necessary and desirable to TAPE’s business and that is being a
security guard. Further, the primary evidence of him being engaged as an
employee is his employee identification card. An identification card is usually
provided not just as a security measure but to mainly identify the holder thereof
as a bona fide employee of the firm who issues it.
2. Whether or not there is payment of wages to the employee by the
employer.
Servaña is definitely receiving a fixed amount as monthly compensation. He’s
receiving P6,000.00 a month.
3. Whether or not employer has the power to dismiss employee.
The Memorandum of Discontinuance issued to Servaña to notify him that he is a
redundant employee evidenced TAPE’s power to dismiss Servaña.
4. Whether or not the employer has the power of control over the employee.
The bundy cards which showed that Servaña was required to report to work at
fixed hours of the day manifested the fact that TAPE does have control over him.
Otherwise, Servaña could have reported at any time during the day as he may
wish.
Therefore, Servaña is entitled to receive a separation pay.
On the other hand, the Supreme Court ruled that Tuviera, as president of TAPE,
should not be held liable for nominal damages as there was no showing he acted
in bad faith in terminating Servaña.
BAUTISTA, Coleen Joyce Q. Page 38 of 58
Regular Employee Defined: One having been engaged to perform an activity
that is necessary and desirable to a company’s business.
ENCYCLOPEDIA BRITANNICA (Philippines), INC. vs. NLRC
264 SCRA 4
Facts: Limjoco was a Sales Divison of Encyclopaedia Britannica and was in
charge of selling the products through some sales representatives. As
compensation, he would receive commissions from the products sold by his
agents. He was also allowed to use the petitioner’s name, goodwill and logo. It
was agreed that office expenses would be deducted from Limjoco’s
commissions.
In 1974, Limjoco resigned to pursue his private business and filed a complaint
against petitioner for alleged non-payment of separation pay and other benefits
and also illegal deduction from sales commissions. Petitioner alleged that
Limjoco was not an employee of the company but an independent dealer
authorized to promote and sell its products and in return, received commissions
therein. Petitioner also claims that it had no control and supervision over the
complainant as to the manners and means he conducted his business operations.
Limjoco maintained otherwise. He alleged he was hired by the petitioner and
was assigned in the sales department.
The Labor Arbiter ruled that Limjoco was an employee of the company. NLRC
also affirmed the decision and opined that there was no evidence supporting
allegation that Limjoco was an independent contractor or dealer.
Issue: Whether or not there was an employee-employer relationship between the
parties.
Ruling: There was no employee-employer relationship. In determining the
relationship, the following elements must be present: selection and engagement
of the employee, payment of wages, power of dismissal and power to control the
employee’s conduct. The power of control is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an employee-
employer relationship. Under the control test, an employee-employer
relationship exists where the person for whom the services are performed
reserves a right to control not only the end to be achieved, but also the manner
and means to be employed in reaching that end.
The issuance of guidelines by the petitioner was merely guidelines on company
policies which sales managers follow and impose on their respective agents.
Limjoco was not an employee of the company since he had the free rein in the
means and methods for conducting the marketing operations. He was merely an
agent or an independent dealer of the petitioner. He was free to conduct his work
and he was free to engage in other means of livelihood.
In ascertaining the employee-employer relationship, the factual circumstances
must be considered. The element of control is absent where a person who works
for another does so more or less at his own pleasure and is not subject to definite
hours or conditions of work, and in turn is compensated in according to the
result of his efforts and not the amount thereof. Hence, there was no employee-
employer relationship.
Atok Big-Wedge Company Inc vs Gison
GR No.169510
Facts:
• Jesus P. Gison was engaged as part-time consultant on retainer basis by
the petitioner Atok. Petitioner did not require respondent to its office on
a regular basis, except when occasionally requested by the management
to discuss matters needing his expertise as a consultant. As payment for
his services, respondent received a retainer fee of P3,000.00 which was
delivered to him at his residence or in a local restaurant. The said
arrangement continued for the next eleven years.
• Since the respondent was getting old he requested that petitioner cause
his registration with the SSS but petitioner did not accede his request.
• Respondent filed a complaint with the SSS against petitioner for the
latter’s refusal to cause his registration with the SSS. On the same date
the petitioner issued a memo advising the termination of the
respondent’s retainer contract. Thus he filed for illegal dismissal.
Issue:
• Whether employer-employee relationship exists?
Held:
• No. 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”.
• The commonly so called control test is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an employer-
BAUTISTA, Coleen Joyce Q. Page 39 of 58
employee relationship exists where the person for whom the services
are performed reserves the right to control not only the end achieved,
but also the manner and means to be used in reaching that end.
• Applying the aforementioned test, an employer-employee relationship
is apparently absent in the case at bar. Among other things, respondent
was not required to report everyday during regular office hours of
petitioner. Respondent’s monthly retainer fees were paid to him either
at his residence or a local restaurant. More importantly, petitioner did
not prescribe the manner in which respondent would accomplish any of
the tasks in which his expertise as a liaison officer was needed;
respondent was left alone and given the freedom to accomplish the
tasks using his own means and methods. Respondent was assigned
tasks to perform, but petitioner did not control the manner and methods
by which respondent performed these tasks. The absence of the element
of control on the part of the petitioner engenders a conclusion that he is
not an employee of the petitioner.
Dumpit Murillo vs. CA
Thelma Dumpit-Murillo was hired by ABC as a newscaster in 1995. Her
contract with the TV station was repeatedly renewed until 1999. She then wrote
Jose Javier (VP for News and Public Affairs of ABC) advising him of her
intention to renew the contract.
Javier did not respond.
Dumpit then demanded reinstatement as well as her backwages, service
incentive leave pays and other monetary benefits.
ABC said they could only pay her backwages but her other claims had no basis
as she was not entitled thereto because she is considered as a talent and not a
regular employee.
Dumpit sued ABC. The Labor Arbiter ruled against Dumpit. The National Labor
Relations Commission reversed the LA. The Court of Appeals reversed the
NLRC and ruled that as per the contract between ABC and Dumpit, Dumpit is a
fixed term employee.
ISSUE: Whether or not Dumpit is a regular employee.
HELD: Yes. Dumpit was a regular employee under contemplation of law. The period January 1, 2003 to July 15, 2003; and the second was for September 1 to
practice of having fixed-term contracts in the industry does not automatically December 2003. After the lapse of the latter period, PBA decided not to renew
make all talent contracts valid and compliant with labor law. The assertion that a their contracts.
talent contract exists does not necessarily prevent a regular employment status.
Complainants were not illegally dismissed because they were not employees of
The duties of Dumpit as enumerated in her employment contract indicate that the PBA. Their respective contracts of retainer were simply not renewed. PBA
ABC had control over the work of Dumpit. Aside from control, ABC also had the prerogative of whether or not to renew their contracts, which they knew
dictated the work assignments and payment of petitioner’s wages. ABC also had were fixed.4
power to dismiss her. All these being present, clearly, there existed an
employment relationship between Dumpit and ABC. In her 31 March 2005 Decision,5 the Labor Arbiter6 declared petitioner an
employee whose dismissal by respondents was illegal. Accordingly, the Labor
In addition, her work was continuous for a period of four years. This repeated Arbiter ordered the reinstatement of petitioner and the payment of backwages,
engagement under contract of hire is indicative of the necessity and desirability moral and exemplary damages and attorneys fees, to wit:
of the Dumpit’s work in ABC’s business
WHEREFORE, premises considered all respondents who are here found to have
Bernarte v PBA illegally dismissed complainants are hereby ordered to (a) reinstate complainants
within thirty (30) days from the date of receipt of this decision and

 to solidarily pay complainants:
The facts, as summarized by the NLRC and quoted by the Court of Appeals, are
as follows:
Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were
  JOSE MEL RENATO
invited to join the PBA as referees. During the leadership of Commissioner
Emilio Bernardino, they were made to sign contracts on a year-to-year basis. BERNARTE GUEVARRA
 
During the term of Commissioner Eala, however, changes were made on the    
terms of their employmen 1. backwages from January 1, 2004 up
to the finality of this Decision, which to    
Complainant Bernarte, for instance, was not made to sign a contract during the
date is
first conference of the All-Filipino Cup which was from February 23, 2003 to P536,250.00 P211,250.00
June 2003. It was only during the second conference when he was made to sign  
a one and a half month contract for the period July 1 to August 5, 2003. 100,000.00  
2. moral damages
On January 15, 2004, Bernarte received a letter from the Office of the 50,000.00 100,000.00
Commissioner advising him that his contract would not be renewed citing his  
unsatisfactory performance on and off the court. It was a total shock  
for Bernarte who was awarded Referee of the year in 2003. He felt that the 3. exemplary damages
dismissal was caused by his refusal to fix a game upon order of Ernie De Leon. 50,000.00

On the other hand, complainant Guevarra alleges that he was invited to join the 4. 10% attorneys fees 68,625.00 36,125.00
PBA pool of referees in February 2001. On March 1, 2001, he signed a contract
as trainee. Beginning 2002, he signed a yearly contract as Regular Class C      
referee. On May 6, 2003, respondent Martinez issued a memorandum TOTAL P754,875.00 P397,375.00
to Guevarra expressing dissatisfaction over his questioning on the assignment of
referees officiating out-of-town games. Beginning February 2004, he was no or a total of P1,152,250.00
longer made to sign a contract.
Respondents aver, on the other hand, that complainants entered into two
contracts of retainer with the PBA in the year 2003. The first contract was for the
BAUTISTA, Coleen Joyce Q. Page 40 of 58
The rest of the claims are hereby dismissed for lack of merit or basis.
SO ORDERED.7
In its 28 January 2008 Decision,8 the NLRC affirmed the Labor Arbiters
judgment. The dispositive portion of the NLRCs decision reads:
WHEREFORE, the appeal is hereby DISMISSED. The Decision of Labor
Arbiter Teresita D. Castillon-Lora dated March 31, 2005 is AFFIRMED.
SO ORDERED.9
Respondents filed a petition for certiorari with the Court of Appeals, which
overturned the decisions of the NLRC and Labor Arbiter. The dispositive portion
of the Court of Appeals decision reads:
WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated
January 28, 2008 and Resolution dated August 26, 2008 of the National Labor
Relations Commission are ANNULLED and SET ASIDE. Private respondents
complaint before the Labor Arbiter is DISMISSED.
SO ORDERED.10
The Court of Appeals 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?
Moreover, this Court disagrees with the Labor Arbiters finding (as affirmed by
the NLRC) that the Contracts of Retainer show that petitioners have control over
private respondents.
xxxx
Neither do We agree with the NLRCs affirmance of the Labor Arbiters
conclusion that private respondents repeated hiring made them regular
employees by operation of law.11
BAUTISTA, Coleen Joyce Q. Page 41 of 58
The Issues
The main issue in this case is whether petitioner is an employee of respondents,
which in turn determines whether petitioner was illegally dismissed.
Petitioner raises the procedural issue of whether the Labor Arbiters decision has
become final and executory for failure of respondents to appeal with the NLRC
within the reglementary period.
The Ruling of the Court
The petition is bereft of merit.
The Court shall first resolve the procedural issue posed by petitioner.
Petitioner contends that the Labor Arbiters Decision of 31 March 2005 became
final and executory for failure of respondents to appeal with the NLRC within
the prescribed period. Petitioner claims that the Labor Arbiters decision was
constructively served on respondents as early as August 2005 while respondents
appealed the Arbiters decision only on 31 March 2006, way beyond
the reglementary period to appeal. Petitioner points out that service of an
unclaimed registered mail is deemed complete five days from the date of first
notice of the post master. In this case three notices were issued by the post
office, the last being on 1 August 2005. The unclaimed registered mail was
consequently returned to sender. Petitioner presents the Postmasters Certification
to prove constructive service of the Labor Arbiters decision on respondents. The
Postmaster certified:
xxx
That upon receipt of said registered mail matter, our registry in charge,
Vicente Asis, Jr., immediately issued the first registry notice to claim on July 12,
2005 by the addressee. The second and third notices were issued on July 21 and
August 1, 2005, respectively.
That the subject registered letter was returned to the sender (RTS) because the
addressee failed to claim it after our one month retention period elapsed. Said
registered letter was dispatched from this office to Manila CPO (RTS) under bill
#6, line 7, page1, column 1, on September 8, 2005.12
Section 10, Rule 13 of the Rules of Court provides:
SEC. 10. Completeness of service. Personal service is complete upon actual
delivery. Service by ordinary mail is complete upon the expiration of ten (10)
days after mailing, unless the court otherwise provides. Service by registered
mail is complete upon actual receipt by the addressee, or after five (5) days from
the date he received the first notice of the postmaster, whichever date is earlier.
The rule on service by registered mail contemplates two situations: (1) actual
service the completeness of which is determined upon receipt by the addressee
of the registered mail; and (2) constructive service the completeness of which is
determined upon expiration of five days from the date the addressee received the
first notice of the postmaster.13
Insofar as constructive service is concerned, there must be conclusive proof that
a first notice was duly sent by the postmaster to the addressee.14 Not only is it
required that notice of the registered mail be issued but that it should also be
delivered to and received by the addressee.15 Notably, the presumption that
official duty has been regularly performed is not applicable in this situation. It is
incumbent upon a party who relies on constructive service to prove that the
notice was sent to, and received by, the addressee.16
The best evidence to prove that notice was sent would be a certification from the
postmaster, who should certify not only that the notice was issued or sent but
also as to how, when and to whom the delivery and receipt was made. The
mailman may also testify that the notice was actually delivered.17
In this case, petitioner failed to present any concrete proof as to how, when and
to whom the delivery and receipt of the three notices issued by the post office
was made. There is no conclusive evidence showing that the post office notices
were actually received by respondents, negating petitioners claim of constructive
service of the Labor Arbiters decision on respondents. The Postmasters
Certification does not sufficiently prove that the three notices were delivered to
and received by respondents; it only indicates that the post office issued the three
notices. Simply put, the issuance of the notices by the post office is not
equivalent to delivery to and receipt by the addressee of the registered mail.
Thus, there is no proof of completed constructive service of the Labor Arbiters
decision on respondents.
At any rate, the NLRC declared the issue on the finality of the Labor Arbiters
decision moot as respondents appeal was considered in the interest of substantial
justice. We agree with the NLRC. The ends of justice will be better served if we
resolve the instant case on the merits rather than allowing the substantial issue of
whether petitioner is an independent contractor or an employee linger and
remain unsettled due to procedural technicalities.
The existence of an employer-employee relationship is ultimately a question of
fact. As a general rule, factual issues are beyond the province of this Court.
However, this rule admits of exceptions, one of which is where there are
conflicting findings of fact between the Court of Appeals, on one hand, and the
NLRC and Labor Arbiter, on the other, such as in the present case.18
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)
BAUTISTA, Coleen Joyce Q. Page 42 of 58
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.19
In this case, PBA admits repeatedly engaging petitioners services, as shown in
the retainer contracts. PBA pays petitioner a retainer fee, exclusive of per diem
or allowances, as stipulated in the retainer contract. PBA can terminate the
retainer contract for petitioners violation of its terms and conditions.
However, respondents argue that the all-important element of control is lacking
in this case, making petitioner an independent contractor and not an employee of
respondents.
Petitioner contends otherwise. Petitioner asserts that he is an employee of
respondents since the latter exercise control over the performance of his work.
Petitioner cites the following stipulations in the retainer contract which evidence
control: (1) respondents classify or rate a referee; (2) respondents require
referees to attend all basketball games organized or authorized by the PBA, at
least one hour before the start of the first game of each day; (3) respondents
assign petitioner to officiate ballgames, or to act as alternate referee or
substitute; (4) referee agrees to observe and comply with all the requirements of
the PBA governing the conduct of the referees whether on or off the court; (5)
referee agrees (a) to keep himself in good physical, mental, and emotional
condition during the life of the contract; (b) to give always his best effort and
service, and loyalty to the PBA, and not to officiate as referee in any basketball
game outside of the PBA, without written prior consent of the Commissioner; (c)
always to conduct himself on and off the court according to the highest standards
of honesty or morality; and (6) imposition of various sanctions for violation of
the terms and conditions of the contract.
The foregoing stipulations hardly demonstrate control over the means and
methods by which petitioner performs his work as a referee officiating a PBA
basketball game. 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?20
In Sonza v. ABS-CBN Broadcasting Corporation,21 which determined the
relationship between a television and radio station and one of its talents, the
Court held that not all rules imposed by the hiring party on the hired party
indicate that the latter is an employee of the former. The Court held:
We find that these general rules are merely guidelines towards the achievement
of the mutually desired result, which are top-rating television and radio
programs that comply with standards of the industry. We have ruled that:
Further, not every form of control that a party reserves to himself over the
conduct of the other party in relation to the services being rendered may be
accorded the effect of establishing an employer-employee relationship. The facts
of this case fall squarely with the case of Insular Life Assurance Co., Ltd. v.
NLRC. In said case, we held that:
Logically, the line should be drawn between rules that merely serve as guidelines
towards the achievement of the mutually desired result without dictating the
means or methods to be employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of such means. The
first, which aim only to promote the result, create no employer-employee
relationship unlike the second, which address both the result and the means used
to achieve it.22
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.
Moreover, the following circumstances indicate that petitioner is an independent
contractor: (1) the referees are required to report for work only when PBA games
are scheduled, which is three times a week spread over an average of only 105
playing days a year, and they officiate games at an average of two hours per
game; and (2) the only deductions from the fees received by the referees are
withholding taxes.
In other words, 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.
Furthermore, the applicable foreign case law declares that a referee is an
independent contractor, whose special skills and independent judgment
BAUTISTA, Coleen Joyce Q. Page 43 of 58
are required specifically for such position and cannot possibly be controlled by
the hiring party
In Yonan v. United States Soccer Federation, Inc.,23 the United States District
Court of Illinois held that plaintiff, a soccer referee, is an independent contractor,
and not an employee of defendant which is the statutory body that governs
soccer in the United States. As such, plaintiff was not entitled to protection by
the Age Discrimination in Employment Act. The U.S. District Court ruled:
Generally, if an employer has the right to control and direct the work of an
individual, not only as to the result to be achieved, but also as to details by
which the result is achieved, an employer/employee relationship is likely to
exist. The Court must be careful to distinguish between control[ling] the conduct
of another party contracting party by setting out in detail his obligations
consistent with the freedom of contract, on the one hand, and the discretionary
control an employer daily exercises over its employees conduct on the other.
Yonan asserts that the Federation closely supervised his performance at each
soccer game he officiated by giving him an assessor, discussing his performance,
and controlling what clothes he wore while on the field and traveling. Putting
aside that the Federation did not, for the most part, control what clothes he wore,
the Federation did not supervise Yonan, but rather evaluated his performance
after matches. That the Federation evaluated Yonan as a referee does not mean
that he was an employee. There is no question that parties retaining independent
contractors may judge the performance of those contractors to determine if the
contractual relationship should continue. x x x
It is undisputed that the Federation did not control the way Yonan refereed his
games. He had full discretion and authority, under the Laws of the Game, to call
the game as he saw fit. x x x In a similar vein, subjecting Yonan to qualification
standards and procedures like the Federations registration and training
requirements does not create an employer/employee relationship. x x x
A position that requires special skills and independent judgment weights in favor
of independent contractor status. x x x Unskilled work, on the other hand,
suggests an employment relationship. x x xHere, it is undisputed that soccer
refereeing, especially at the professional and international level, requires a great
deal of skill and natural ability. Yonan asserts that it was the Federations training
that made him a top referee, and that suggests he was an employee. Though
substantial training supports an employment inference, that inference is dulled
significantly or negated when the putative employers activity is the result of a
statutory requirement, not the employers choice. x x x
In McInturff v. Battle Ground Academy of Franklin,24 it was held that the
umpire was not an agent of the Tennessee Secondary School Athletic
Association (TSSAA), so the players vicarious liability claim against the
association should be dismissed. In finding that the umpire is an
independent contractor, the Court of Appeals of Tennesse ruled:
The TSSAA deals with umpires to achieve a result-uniform rules for all baseball
games played between TSSAA member schools. The TSSAA does not supervise
regular season games. It does not tell an official how to conduct the game
beyond the framework established by the rules. The TSSAA does not, in the
vernacular of the case law, control the means and method by which the umpires
work.
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.
WHEREFORE, we DENY the petition and AFFIRM the assailed decision of
the Court of Appeals.
SO ORDERED.
JARDIN V. NLRC (G.R. NO. 119268)
 of notice and hearing is set-out in Article 277 (b) of the said Code. Hence,
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
BAUTISTA, Coleen Joyce Q. Page 44 of 58
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. The
labor arbiter dismissed said complaint for lack of merit. On appeal, the NLRC
reversed the decision of the labor arbiter. Private Respondent then filed a motion
for reconsideration but was denied. Private Respondent filed another motion for
reconsideration which eventually was granted dismissing the complaint of the
petitioners for lack of jurisdiction on the ground that there was no employer-
employee relationship. Petitioners sought reconsideration of the labor tribunal’s
latest decision which was denied.
ISSUE:
1. WON an employee-employer relationship exists?
2. WON the petitioners were illegally dismissed?
RULING:
1. Yes. On the issue of whether or not employer-employee relationship exists,
admitted is the fact that complainants are taxi drivers purely on the ‘boundary
system’. Under this system the driver takes out his unit and pays the owner/
operator a fee commonly called ‘boundary’ for the use of the unit. 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. The fact that the drivers do not receive fixed wages is
not sufficient to withdraw the relationship from that of employer and employee.
2. Yes. The termination of employment must be effectuated in accordance with
law. The just and authorized causes for termination of employment are
enumerated under Articles 282, 283 and 284 of the Labor Code. The requirement
petitioners, being employees of private respondent, can be dismissed only for
just and authorized cause, and after affording them notice and hearing prior to
termination. In the instant case, private respondent had no valid cause to
terminate the employment of petitioners. Neither were there two (2) written
notices sent by private respondent informing each of the petitioners that they had
been dismissed from work. These lack of valid cause and failure on the part of
private respondent to comply with the twin-notice requirement underscored the
illegality surrounding petitioners’ dismissal.
Under the law, an employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
With regard to the amount deducted for washing of the taxi units, such was not
illegal as such is indeed a practice in the taxi industry and is dictated by fair
play.
Chavez vs NLRC, Supreme Packaging Inc, and Alvin Lee
GR No. 146530 January 17, 2005
Facts:
• The respondent company, Supreme Packaging Inc., is in the business of
manufacturing cartons and other packaging materials for export and
distribution.
• The petitioner, Pedro Chavez, was a truck driver (from October 25,
1984) tasked to deliver the respondent company’s products to its
various customers.
• The respondent furnished petitioner with a truck that all deliveries were
made in accordance with the routing slips issued by the respondent
company indicating the order, time and urgency of delivery.
• On 1992, the petitioner expressed his desire to avail the benefits that a
regular employee were receiving such as overtime pay, nightshift
differential pay, and 13th month pay, among others but nothing was
complied.
• On February 20, 1995, petitioner filed a complaint for regularization
with the Regional Arbitration Branch No. III of NLRC in San
Fernando, Pampanga. Before the case could be heard, respondent
terminated the services of the petitioner.
• Hence, the petitioner filed an amended complaint for illegal dismissal,
unfair labor practice and non-payment of overtime pay, nightshift
differential, and 13th month pay, among others.
Issue: Whether there exists an employer-employee relationship?
Held:
• Yes an employer-employee do exist. The elements to determine the
existence of an employment relationship are: (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’s
conduct. The most important element is the employer’s control of the
employee’s conduct, not only as to the result of the work to be done, but
also as to the means and methods to accomplish it. First. Undeniably, it
BAUTISTA, Coleen Joyce Q. Page 45 of 58
was the respondents who engaged the services of the petitioner without
the intervention of a third party. Second. Wages are defined as
“remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time,
task, piece or commission basis, or other method of calculating the
same, which is payable by an employer to an employee under a written
or unwritten contract of employment for work done or to be done, or for
service rendered or to be rendered. The petitioner is paid on a per trip
basis is not significant. This is merely a method of computing
compensation. Third. The respondent’s 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
petitioner’s services albeit in the guise of severance of contractual
relation due allegedly to the latter’s breach of his contractual obligation.
Fourth. 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
employer’s power to control the means and methods by which the
employee’s work is to be performed and accomplished. A careful
review of the records shows that the latter performed his work under the
respondents’ supervision and control. The existence of an employer-
employee relationship cannot be negated by expressly repudiating it in
a contract and providing therein that the employee is an independent
contractor when the facts clearly show otherwise. Employment status is
defined by law and not by what the parties say it should be.
COCA COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA,
Manager, Petitioners, 

vs.

DR. DEAN N. CLIMACO, Respondent.
FACTS: Respondent Dr. Dean N. Climaco is a medical doctor The Retainer
Agreement, which began on January 1, 1988, was renewed annually (original
contract was only good for one year). The last one expired on December 31,
1993. Despite the non-renewal of the Retainer Agreement, respondent continued
to perform his functions as company doctor to Coca-Cola until he received a
letter4 dated March 9, 1995 from petitioner company concluding their
retainership agreement effective 30 days from receipt thereof.
It is noted that as early as September 1992, petitioner was already making
inquiries regarding his status with petitioner company. Petitioner company,
however, did not take any action. Hence, respondent made another inquiry with
the DOLE and SSS. Thereafter, respondent inquired from the management of
petitioner company whether it was agreeable to recognizing him as a regular
employee. The management refused to do so.
FILED TWO COMPLAINTS IN THE NLRC: (1) seeking recognition as a
regular employee of petitioner company and prayed for the payment of all
benefits of a regular employee, including 13th Month Pay, Cost of Living
Allowance, Holiday Pay, Service Incentive Leave Pay, and Christmas Bonus; (2)
a complaint for illegal dismissal against petitioner company with the NLRC,
Bacolod City.
LABOR ARBITER’S DECISION: Case (1) Dismissed, found that petitioner
company lacked the power of control over respondent’s performance of his
duties, and recognized as valid the Retainer Agreement between the parties; (2)
dismissed the case for illegal dismissal in view of the previous finding of Labor
Arbiter that complainant therein, respondent is not an employee of Coca-Cola
Bottlers Phils., Inc.
Respondent appealed both decisions to the NLRC, Fourth Division, Cebu City;
Dismissed for lack of merit. MR denied.
APPEAL WITH THE CA: that an employer-employee relationship existed
between petitioner company and respondent after applying the four-fold test.
MR BY PETITONER: The Court of Appeals clarified that respondent was a
“regular part-time employee and should be accorded all the proportionate
benefits due to this category of employees of [petitioner] Corporation under the
CBA.” It sustained its decision on all other matters sought to be reconsidered.
Hence, this petition.
ISSUE: whether or not there exists an employer-employee relationship between
the parties; The resolution of the main issue will determine whether the
termination of respondent’s employment is illegal.
HELD: NO employer-employee relationship.
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 Court agrees with the finding of the Labor Arbiter and the NLRC that the
circumstances of this case show that no employer-employee relationship exists
between the parties. The Labor Arbiter and the NLRC correctly found that
petitioner company lacked the power of control over the performance by
BAUTISTA, Coleen Joyce Q. Page 46 of 58
respondent of his duties. The Labor Arbiter reasoned that the
Comprehensive Medical Plan, which contains the respondent’s objectives,
duties and obligations, does not tell respondent “how to conduct his physical
examination, how to immunize, or how to diagnose and treat his patients,
employees of [petitioner] company, in each case.”
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.
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.
Respondent is not at all further required to just sit around in the premises and
wait for an emergency to occur so as to enable him from using such hours for his
own benefit and advantage. In fact, complainant maintains his own private clinic
attending to his private practice in the city, where he services his patients, bills
them accordingly — and if it is an employee of respondent company who is
attended to by him for special treatment that needs hospitalization or operation,
this is subject to a special billing.
An employee is required to stay in the employer’s workplace or proximately
close thereto that he cannot utilize his time effectively and gainfully for his
own purpose. Such is not the prevailing situation here.1awphi1. Court finds
that the schedule of work and the requirement to be on call for emergency cases
do not amount to such control, but are necessary incidents to the Retainership
Agreement.
The Court also notes that the Retainership Agreement granted to both parties the
power to terminate their relationship upon giving a 30-day notice. Hence,
petitioner company did not wield the sole power of dismissal or termination.
Considering that there is no employer-employee relationship between the parties,
the termination of the Retainership Agreement, which is in accordance with the
provisions of the Agreement, does not constitute illegal dismissal of respondent.
PETITION GRANTED.
Gabriel vs. Bilon
Nelson Bilon, Angel Brazil and Ernesto Pagaygay were jeepney drivers
of jeepneys owned by Melencio Gabriel. They are paying P400/day for their
boundary. Later, the drivers were required to pay an additional P50.00 to cover
police protection, car wash, deposit fee, and garage fees.
The three drivers refused to pay the additional P50.00. On April 30, 1995, when
the drivers reported to work, they were not given any jeepney to drive.
Eventually, they were dismissed. The three drivers sued Gabriel for illegal
dismissal.
The Labor Arbiter ruled in favor of the drivers and ordered Gabriel to pay the
drivers their backwages and their separation pay amounting to about a total of
P1.03M.
On April 18, 1997, the LA promulgated its decision and on the same day sent a
copy thereof to Gabriel but Flordeliza (wife of Gabriel) refused to receive the
copy. Apparently, Gabriel died on April 4, 1997. The copy was re-sent via
registered mail on May 28, 1997. Flordeliza appealed to the LA on June 5, 1997.
The LA dismissed the appeal; it ruled that the appeal was not on time because
the promulgation was made on April 18, 1997 and that the appeal on June 5,
1997 was already beyond the ten day period required for appeal.
The National Labor Relations Commission reversed the LA. It ruled that there
was no employee-employer relationship between the drivers and Gabriel. The
Court of Appeals reversed the NLRC but it ruled that the separation pay should
not be awarded but rather, the employees should be reinstated.
ISSUES:
1. Whether or not the appeal before the LA was made on time.
2. Whether or not there was an employer-employee relationship between the
drivers and Gabriel.
3. Whether or not there was a strained relation between Gabriel and the drivers.
HELD:
1. Yes. The appeal was made on time because when the promulgation was made
Gabriel is already dead. The ten day requirement to make an appeal is not
applicable in this situation because Gabriel was not yet properly substituted by
the wife. The counting of the period should be made starting from the date when
the copy was sent via registered mail. Therefore, the appeal filed on June 5 was
made on time.
2. Yes. There exists an employer-employee relationship between the drivers and
Gabriel. The fact that the drivers do not receive fixed wages but get only
whatever exceeds the so-called “boundary” [that] they pay to the owner/operator
BAUTISTA, Coleen Joyce Q. Page 47 of 58
is not sufficient to withdraw the relationship between them from that of
employer and employee.
3. No. The award of the separation pay is not proper. It was not shown that there
was a strained relationship between Gabriel and the drivers so as to cause
animosity if they are reinstated. The Strained Relations Principle is only applied
if it is shown that reinstatement would only cause antagonism between the
employer and the employee; and that the only solution is separation and the
payment of separation pay.
Felix vs. Buenaseda
Taking advantage of this Court's decisions involving the removal of various civil
servants pursuant to the general reorganization of the government after the
EDSA Revolution, petitioner assails his dismissal as Medical Specialist I of the
National Center for Mental Health (formerly the National Mental Hospital) as
illegal and violative of the constitutional provision on security of tenure
allegedly because his removal was made pursuant to an invalid reorganization.
In Mendoza vs. Quisumbing1 and the consolidated cases involving the
reorganization of various government departments and agencies we held:
We are constrained to set aside the reorganizations embodied in these
consolidated petitions because the heads of departments and agencies concerned
have chosen to rely on their own concepts of unlimited discretion and
"progressive" ideas on reorganization instead of showing that they have
faithfully complied with the clear letter and spirit of the two Constitutions and
the statutes affecting reorganization.2
In De Guzman vs. CSC3 , we upheld the principle, laid down by Justice J.B.L.
Reyes in Cruz vs. Primicias4 that a valid abolition of an office neither results in a
separation or removal, likewise upholding the corollary principle that "if the
abolition is void, the incumbent is deemed never to have ceased to hold office,"
in sustaining therein petitioner's right to the position she held prior to the
reorganization.
The instant petition on its face turns on similar facts and issues, which is, that
petitioner's removal from a permanent position in the National Center for Mental
Health as a result of the reorganization of the Department of Health was void.
However, a closer look at the facts surrounding the instant petition leads us to a
different conclusion.
After passing the Physician's Licensure Examinations given by the Professional
Regulation Commission in June of 1979, petitioner, Dr. Alfredo B. Felix, joined
the National Center for Mental Health (then the National Mental Hospital) on
May 26, 1980 as a Resident Physician with an annual salary of P15,264.00.5 In
August of 1983, he was promoted to the position of Senior Resident Physician6 a
position he held until the Ministry of Health reorganized the National Center for
Mental Health (NCMH) in January of 1988, pursuant to Executive Order No.
119.
Under the reorganization, petitioner was appointed 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.7 In August of 1988, petitioner was promoted to the position
of Medical Specialist I (Temporary Status), which position was renewed the
following year.8
In 1988, the Department of Health issued Department Order No. 347 which
required board certification as a prerequisite for renewal of specialist positions in
various medical centers, hospitals and agencies of the said department.
Specifically, Department Order No. 347 provided that specialists working in
various hospitals and branches of the Department of Health be recognized as
"Fellows" of their respective specialty societies and/or "Diplomates" of their
specialty boards or both. The Order was issued for the purpose of upgrading the
quality of specialties in DOH hospitals by requiring them to pass rigorous
theoretical and clinical (bedside) examinations given by recognized specialty
boards, in keeping up with international standards of medical practice.
Upon representation of the Chiefs of Hospitals of various government hospitals
and medical centers, (then) Secretary of Health Alfredo Bengzon issued
Department Order No. 347 providing for an extension of appointments of
Medical Specialist positions in cases where the termination of medical specialist
who failed to meet the requirement for board certification might result in the
disruption of hospital services. Department Order No. 478 issued the following
guidelines:
1. As a general policy, the provision of Department Order No. 347, Sec. 4 shall
apply unless the Chief of Hospital requests for exemption, certifies that its
application will result in the disruption of the delivery service together with the
steps taken to implement Section 4, and submit a plan of action, lasting no more
than 3-years, for the eventual phase out of non-Board certified medical
specialties.
2. Medical specialist recommended for extension of appointment shall meet the
following minimum criteria:
a. DOH medical specialist certified
b. Has been in the service of the Department at least three (3) years prior to
December 1988.
BAUTISTA, Coleen Joyce Q. Page 48 of 58
c. Has applied or taken the specialty board examination.
3. Each recommendation for extension of appointment must be individually
justified to show not only the qualification of the recommendee, but also what
steps he has taken to be board certified.
4. Recommendation for extension of appointment shall be evaluated on a case to
case basis.
5. As amended, the other provisions of Department Order No. 34/s. 1988 stands.
Petitioner was one of the hundreds of government medical specialist who would
have been adversely affected by Department Order No. 347 since he was no yet
accredited by the Psychiatry Specialty Board. Under Department Order No. 478,
extension of his appointment remained subject to the guidelines set by the said
department order. On August 20, 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, informing him of its decision on August 22, 1991. 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.
On November 25, 1991, an emergency meeting of the Chiefs of Service was
held to discuss, among other matters, the petitioner's case. In the said meeting
Dr. Vismindo de Grecia, petitioner's immediate supervisor, pointed out
petitioner's poor performance, frequent tardiness and inflexibility as among the
factors responsible for the recommendation not to renew his appointment.9 With
one exception, other department heads present in the meeting expressed the same
opinion, 10 and the overwhelming concensus was for non-renewal. The matter
was thereafter referred to the Civil Service Commission, which on February 28,
1992 ruled that "the temporary appointment (of petitioner) as Medical Specialist
I can be terminated at any time . . ." and that "[a]ny renewal of such appointment
is within the discretion of the appointing authority." 11 Consequently, in a
memorandum dated March 25, 1992 petitioner was advised by hospital
authorities to vacate his cottage since he was no longer with said memorandum
petitioner 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. In a Decision rendered on July 29, 1992, the
(MSPB) dismissed petitioner'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. In this case, there is no dispute that
Complainant was a temporary employee and his appointment expired on August
22, 1991. This being the case, his re-appointment to his former position or the
renewal of his temporary appointment would be determined solely by the proper
appointing authority who is the Secretary, Department of Health upon the
favorable recommendation of the Chief of Hospital III, NCMH. The Supreme
Court in the case of Central Bank vs. Civil Service Commission G.R. Nos.
80455-56 dated April 10, 1989, held as follows:
The power of appointment is essentially a political question involving
considerations of wisdom which only the appointing authority can decide.
In this light, 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.
Regarding the alleged Department Order secured by the complainant from the
Department of Health (DOH), the Board finds the same inconsequential. Said
Department Order merely allowed the extension of tenure of Medical Specialist I
for a certain period but does not mandate the renewal of the expired
appointment.
The Board likewise finds as baseless complainant's allegation of harassment. It
should be noted that the subsistence, quarters and laundry benefits provided to
the Complainant were in connection with his employment with the NCMH. Now
that his employment ties with the said agency are severed, he eventually loses
his right to the said benefits. Hence, the Hospital Management has the right to
take steps to prevent him from the continuous enjoyment thereof, including the
occupancy of the said cottage, after his cessation form office.
In sum, the actuations of Dr. Buenaseda and Lt. Col. Balez are not shown to
have been tainted with any legal infirmity, thus rendering as baseless, this instant
complaint.
Said decision was appealed to the Civil Service Commission which dismissed
the same in its Resolution dated December 1, 1992. Motion for Reconsideration
was denied in CSC Resolution No. 93-677 dated February 3, 1993, hence this
appeal, in which petitioner interposes the following assignments of errors:
I acceptance to a first year residency program is no guaranty that the physician
THE PUBLIC RESPONDENT CIVIL SERVICE COMMISSION ERRED IN
HOLDING THAT BY SUBMITTING HIS COURTESY RESIGNATION AND
ACCEPTING HIS TEMPORARY APPOINTMENT PETITIONER HAD
EFFECTIVELY DIVESTED HIMSELF OF HIS SECURITY OF TENURE,
CONSIDERING THE CIRCUMSTANCES OF SUCH COURTESY
RESIGNATION AND ACCEPTANCE OF APPOINTMENT.
II
THE RESPONDENT COMMISSION IN NOT DECLARING THAT THE
CONVERSION OF THE PERMANENT APPOINTMENT OF PETITIONER
BAUTISTA, Coleen Joyce Q. Page 49 of 58
TO TEMPORARY WAS DONE IN BAD FAITH IN THE GUISE OF
REORGANIZATION AND THUS INVALID, BEING VIOLATIVE OF THE
PETITIONER'S RIGHT OF SECURITY OF TENURE.
Responding to the instant petition, 12 the Solicitor General contends that 1) the
petitioner's temporary appointment after the reorganization pursuant to E.O. No.
119 were valid and did not violate his constitutional right of security of
tenure; 13 2) petitioner is guilty of estoppel or laches, having acquiesced to such
temporary appointments from 1988 to 1991; 14 and 3) the respondent
Commission did not act with grave abuse of discretion in affirming the
petitioner's non-renewal of his appointment at the National Center for Mental
Hospital.15
We agree.
The patent absurdity of petitioner's posture is readily obvious.
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.
A physician who desires to specialize in Cardiology takes a required three-year
accredited residency in Internal Medicine (four years in DOH hospitals) and
moves on to a two or three-year fellowship or residency in Cardiology before he
is allowed to take the specialty examinations given by the appropriate
accrediting college. In a similar manner, the accredited Psychiatrist goes through
the same stepladder process which culminates in his recognition as a fellow or
diplomate (or both) of the Psychiatry Specialty Board. 16 This upward
movement from residency to specialist rank, institutionalized in the residency
training process, guarantees minimum standards and skills and ensures that the
physician claiming to be a specialist will not be set loose on the community
without the basic knowledge and skills of his specialty. Because acceptance and
promotion requirements are stringent, competitive, and based on merit.
will complete the program. Attribution rates are high. Some programs are
pyramidal. Promotion to the next post-graduate year is based on merit and
performance determined by periodic evaluations and examinations of
knowledge, skills and bedside manner. 17 Under this system, residents, specialty
those in university teaching hospitals 18 enjoy their right to security of tenure
only to the extent that they periodically make the grade, making the situation
quite unique as far as physicians undergoing post-graduate residencies and
fellowships are concerned. While physicians (or consultants) of specialist rank
are not subject to the same stringent evaluation procedures, 19 specialty societies
require continuing education as a requirement for accreditation for good
standing, in addition to peer review processes based on performance, mortality
and morbidity audits, feedback from residents, interns and medical students and
research output. The nature of the contracts of resident physicians meet
traditional tests for determining employer-employee relationships, but because
the focus of residency is training, they are neither here nor there. Moreover,
stringent standards and requirements for renewal of specialist-rank positions or
for promotion to the next post-graduate residency year are necessary because
lives are ultimately at stake.
Petitioner's insistence on being reverted back to the status quo prior to the
reorganizations made pursuant to Executive Order No. 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.
It bears emphasis that at the time of petitioner's promotion to the position of
Medical Specialist I (temporary) in August of 1988, no objection was raised by
him about the change of position or the temporary nature of designation. The
pretense of objecting to the promotion to specialist rank apparently came only as
an afterthought, three years later, following the non-renewal of his position by
the Department of Health.
We lay stress to the fact that petitioner made no attempt to oppose earlier
renewals of his temporary Specialist I contracts in 1989 and 1990, 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). 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, 20that he
"either abandoned (his claim) or declined to assert it."
BAUTISTA, Coleen Joyce Q. Page 50 of 58
There are weighty reasons of public policy and convenience which demand that
any claim to any position in the civil service, permanent, temporary of
otherwise, or any claim to a violation of the constitutional provision on security
of tenure be made within a reasonable period of time. An assurance of some
degree of stability in the civil service is necessary in order to avoid needless
disruptions in the conduct of public business. Delays in the statement of a right
to any position are strongly discouraged. 21 In the same token, the failure to
assert a claim or the voluntary acceptance of another position in government,
obviously without reservation, leads to a presumption that the civil servant has
either given up his claim of has already settled into the new position. This is the
essence of laches which is the failure or neglect, for an unreasonable and
unexplained length of time to do that which, by exercising due diligence, could
or should have been done earlier; it is the negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it. 22
In fine, this petition, on its surface, seems to be an ordinary challenge against the
validity of the conversion of petitioner's position from permanent resident
physician status to that of a temporary resident physician pursuant to the
government reorganization after the EDSA Revolution. What is unique to
petitioner's averments is the fact that he hardly attempts to question the validity
of his removal from his position of Medical Specialist I (Temporary) of the
National Center for Mental Health, which is plainly the pertinent issue in the
case at bench. The reason for this is at once apparent, for there is a deliberate and
dishonest attempt to a skirt the fundamental issue first, by falsely claiming that
petitioner was forced to submit his courtesy resignation in 1987 when he
actually did not; and second, by insisting on a right of claim clearly abandoned
by his acceptance of the position of Medical Specialist I (Temporary), which is
hence barred by laches.
The validity of the government reorganization of the Ministry of Health pursuant
to E.O. 119 not being the real issue in the case at bench, we decline to make any
further pronouncements relating to petitioner's contentions relating to the effect
on him of the reorganization except to say that in the specific case of the change
in designation from permanent resident physician to temporary resident
physician, a change was necessary, overall, to rectify a ludicrous situation
whereby some government resident physicians were erroneously being classified
as permanent resident physicians in spite of the inherently temporary nature of
the designation. The attempts by the Department of Health not only to streamline
these positions but to make them conform to current standards of specialty
practice is a step in a positive direction. The patient who consults with a
physician of specialist rank should at least be safe in the assumption that the
government physician of specialist rank: 1.) has completed all necessary
requirements at least assure the public at large that those in government centers
who claim to be specialists in specific areas of Medicine possess the minimum
knowledge and skills required to fulfill that first and foremost maxim, embodied
in the Hippocratic Oath, that they do their patients no harm. Primium non
nocere.
Finally, it is crystal clear, from the facts of the case at bench, that the petitioner
accepted a temporary appointment (Medical Specialist I). As respondent Civil
Service Commission has correctly pointed out 23, the appointment was for a
definite and renewable period which, when it was not renewed, did not involve a
dismissal but an expiration of the petitioner's term.
ACCORDINGLY, the petition is hereby DISMISSED, for lack of merit.
Auto Bus Transport vs Bautista
G.R. No. 156367. May 16, 2005
Facts:
Bautista, a driver-conductor of the Autobus transport, was dismissed after his
failure to pay an amount demanded by the company for the repair of the bus
damaged in an accident caused by him.
He receives compensation by way of commission per travel.
Bautista complained for illegal dismissal with money claims for nonpayment of
13th month pay and service incentive leave pay against Autobus.
Auto Bus’ Defenses:
1. Bautista’s employment was replete with offenses involving reckless
imprudence, gross negligence, and dishonesty supported with copies of
letters, memos, irregularity reports, warrants of arrest;
2. In the exercise of management prerogative, Bautista was terminated
only after providing for an opportunity to explain:
Labor Arbiter dismissed the complaint however awarded Bautista his 13thmonth
pay and service incentive leave pay.
Auto Bus appealed. NLRC deleted the 13th month pay award. In the CA,
NLRC’s decision was affirmed.
Issue: Whether or not respondent is entitled to service incentive leave pay.
Held: Yes.
Under Article 95 of the Labor Code, every employee who has rendered at least
one year or service shall be entitled to a yearly service incentive leave of five
days with pay. In Section 1, Rule V, Book III of the Implementing Rules and
BAUTISTA, Coleen Joyce Q. Page 51 of 58
Regulations of the Labor Code, the rule shall apply to all, except… (d) 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.
Petitioner’s contention that Bautista is not entitled to service incentive leave
because he is paid on a purely commission basis must fail. The phrase following
“Field personnel” should not be construed as a separate classification of
employees but is merely an amplification of the definition of field personnel
defined under the Labor Code.
Bautista neither falls under the category field personnel. As defined, field
personnel are those whose performance of service is unsupervised by the
employer, the workplace being away from the principal place of business and
whose hours and days of work cannot be determined with reasonable certainty.
Bus companies have ways of determining the hours worked by their drivers and
conductors with reasonable certainty. The courts have taken judicial notice of the
following:
1. Along the routes traveled, there are inspectors assigned at strategic
places who board the bus to inspect the passengers, the punched tickets,
and the conductor’s reports;
2. There is a mandatory once-a week car barn or shop day, where the bus
is regularly checked;
3. The drivers and conductors must be at specified place and time, as they
observe prompt departure and arrival;
4. At every depot, there is always a dispatcher whose function is to see to
it that the bus and crew leaves and arrives at the estimated proper time.
By these reasons, drivers and conductors are therefore under constant
supervision while in the performance of their work.
David vs. Macasio
We resolve in this petition for review on certiorari1 the challenge to the
November 22, 2010 decision2 and the January 31, 2011 resolution3 of the Court
of Appeals (CA) in CA-G.R. SP No. 116003. The CA decision annulled and set
aside the May 26, 2010 decision4 of the National Labor Relations Commission
(NLRC)5 which, in turn, affirmed the April 30, 2009 Decision6 of the Labor
Arbiter (LA). The LA's decision dismissed respondent John G. Macasio's
monetary claims.
The Factual Antecedents
In January 2009, Macasio filed before the LA a complaint7 against petitioner
Ariel L. David, doing business under the name and style "Yiels Hog Dealer," for
non-payment of overtime pay, holiday pay and 13th month pay. He also claimed
payment for moral and exemplary damages and attorney’s fees. Macasio also
claimed payment for service incentive leave (SIL).8
Macasio alleged9 before the LA that he had been working as a butcher for David
since January 6, 1995. Macasio claimed that David exercised effective control
and supervision over his work, pointing out that 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 ₱700.00, which was increased
from ₱600.00 in 2007, ₱500.00 in 2006 and ₱400.00 in 2005; and (3) approved
and disapproved his leaves. Macasio added that David owned the hogs delivered
for chopping, as well as the work tools and implements; the latter also rented the
workplace. Macasio further claimed that David employs about twenty-five (25)
butchers and delivery drivers.
In his defense,10 David claimed that he started his hog dealer business in 2005
and that he only has ten employees. He alleged that he hired Macasio as a
butcher or chopper on "pakyaw" or task basis who is, therefore, not entitled to
overtime pay, holiday pay and 13th month pay pursuant to the provisions of the
Implementing Rules and Regulations (IRR) of the Labor Code. David pointed
out that Macasio: (1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m.
of the following day or earlier, depending on the volume of the delivered hogs;
(2) received the fixed amount of ₱700.00 per engagement, regardless of the
actual number of hours that he spent chopping the delivered hogs; and (3) was
not engaged to report for work and, accordingly, did not receive any fee when no
hogs were delivered.
Macasio disputed David’s allegations.11 He argued that, first, David did not start
his business only in 2005. He pointed to the Certificate of Employment12 that
David issued in his favor which placed the date of his employment, albeit
erroneously, in January 2000. Second, he reported for work every day which the
payroll or time record could have easily proved had David submitted them in
evidence.
Refuting Macasio’s submissions,13 David claims that Macasio was not his
employee as he hired the latter on "pakyaw" or task basis. He also claimed that
he issued the Certificate of Employment, upon Macasio’s request, only for
overseas employment purposes. He pointed to the "Pinagsamang Sinumpaang
Salaysay,"14 executed by Presbitero Solano and Christopher (Antonio Macasio’s
co-butchers), to corroborate his claims.
In the April 30, 2009 decision,15 the LA dismissed Macasio’s complaint for lack
of merit. The LA gave credence to David’s claim that he engaged Macasio on
BAUTISTA, Coleen Joyce Q. Page 52 of 58
"pakyaw" or task basis. The LA noted the following facts to support this finding:
(1) Macasio received the fixed amount of ₱700.00 for every work done,
regardless of the number of hours that he spent in completing the task and of the
volume or number of hogs that he had to chop per engagement; (2) Macasio
usually worked for only four hours, beginning from 10:00 p.m. up to 2:00 a.m.
of the following day; and (3) the ₱700.00 fixed wage far exceeds the then
prevailing daily minimum wage of ₱382.00. The LA added that the nature of
David’s business as hog dealer supports this "pakyaw" or task basis arrangement.
The LA concluded that as Macasio was engaged on "pakyaw" or task basis, he is
not entitled to overtime, holiday, SIL and 13th month pay.
The NLRC’s Ruling
In its May 26, 2010 decision,16 the NLRC affirmed the LA ruling.17 The NLRC
observed that David did not require Macasio to observe an eight hour work
schedule to earn the fixed ₱700.00 wage; and that Macasio had been performing
a non-time work, pointing out that Macasio was paid a fixed amount for the
completion of the assigned task, irrespective of the time consumed in its
performance. Since Macasio was paid by result and not in terms of the time that
he spent in the workplace, Macasio is not covered by the Labor Standards laws
on overtime, SIL and holiday pay, and 13th month pay under the Rules and
Regulations Implementing the 13th month pay law.18
Macasio moved for reconsideration19 but the NLRC denied his motion in its
August 11, 2010 resolution,20 prompting Macasio to elevate his case to the CA
via a petition for certiorari.21
The CA’s Ruling
In its November 22, 2010 decision,22 the CA partly granted Macasio’s certiorari
petition and reversed the NLRC’s ruling for having been rendered with grave
abuse of discretion.
While the CA agreed with the LAand the NLRC that Macasio was a task basis
employee, it nevertheless found Macasio entitled to his monetary claims
following the doctrine laid down in Serrano v. Severino Santos Transit.23 The CA
explained that as a task basis employee, Macasio is excluded from the coverage
of holiday, SIL and 13th month pay only if he is likewise a "field personnel." As
defined by the Labor Code, a "field personnel" is one who performs the work
away from the office or place of work and whose regular work hours cannot be
determined with reasonable certainty. In Macasio’s case, the elements that
characterize a "field personnel" are evidently lacking as he had been working as
a butcher at David’s "Yiels Hog Dealer" business in Sta. Mesa, Manila under
David’s supervision and control, and for a fixed working schedule that starts at
10:00 p.m.
Accordingly, the CA awarded Macasio’s claim for holiday, SIL and 13th month
pay for three years, with 10% attorney’s fees on the total monetary award. The
CA, however, denied Macasio’s claim for moral and exemplary damages for lack
of basis.
David filed the present petition after the CA denied his motion for
reconsideration24 in the CA’s January 31, 2011 resolution.25
The Petition
In this petition,26 David maintains that Macasio’s engagement was on a
"pakyaw" or task basis. Hence, the latter is excluded from the coverage of
holiday, SIL and 13th month pay. David reiterates his submissions before the
lower tribunals27 and adds that he never had any control over the manner by
which Macasio performed his work and he simply looked on to the "end-result."
He also contends that he never compelled Macasio to report for work and that
under their arrangement, Macasio was at liberty to choose whether to report for
work or not as other butchers could carry out his tasks. He points out that Solano
and Antonio had, in fact, attested to their (David and Macasio’s) established
"pakyawan" arrangement that rendered a written contract unnecessary. In as
much as Macasio is a task basis employee – who is paid the fixed amount of
₱700.00 per engagement regardless of the time consumed in the performance –
David argues that Macasio is not entitled to the benefits he claims. Also, he
posits that because he engaged Macasio on "pakyaw" or task basis then no
employer-employee relationship exists between them.
Finally, David argues that factual findings of the LA, when affirmed by the
NLRC, attain finality especially when, as in this case, they are supported by
substantial evidence. Hence, David posits that the CA erred in reversing the
labor tribunals’ findings and granting the prayed monetary claims.
The Case for the Respondent
Macasio counters that he was not a task basis employee or a "field personnel" as
David would have this Court believe.28 He reiterates his arguments before the
lower tribunals and adds that, contrary to David’s position, the ₱700.00 fee that
he was paid for each day that he reported for work does not indicate a "pakyaw"
or task basis employment as this amount was paid daily, regardless of the
number or pieces of hogs that he had to chop. Rather, it indicates a daily-wage
method of payment and affirms his regular employment status. He points out
that David did not allege or present any evidence as regards the quota or number
of hogs that he had to chop as basis for the "pakyaw" or task basis payment;
neither did David present the time record or payroll to prove that he worked for
less than eight hours each day. Moreover, David did not present any contract to
prove that his employment was on task basis. As David failed to prove the
alleged task basis or "pakyawan" agreement, Macasio concludes that he was
David’s employee. Procedurally, Macasio points out that David’s submissions in
BAUTISTA, Coleen Joyce Q. Page 53 of 58
the present petition raise purely factual issues that are not proper for a petition
for review on certiorari. These issues – whether he (Macasio) was paid by result
or on "pakyaw" basis; whether he was a "field personnel"; whether an employer-
employee relationship existed between him and David; and whether David
exercised control and supervision over his work – are all factual in nature and
are, therefore, proscribed in a Rule 45 petition. He argues that the CA’s factual
findings bind this Court, absent a showing that such findings are not supported
by the evidence or the CA’s judgment was based on a misapprehension of facts.
He adds that the issue of whether an employer-employee relationship existed
between him and David had already been settled by the LA29 and the
NLRC30 (as well as by the CA per Macasio’s manifestation before this Court
dated November 15, 2012),31 in his favor, in the separate illegal case that he filed
against David.
The Issue
The issue revolves around the proper application and interpretation of the labor
law provisions on holiday, SIL and 13th month pay to a worker engaged on
"pakyaw" or task basis. In the context of the Rule 65 petition before the CA, the
issue is whether the CA correctly found the NLRC in grave abuse of discretion
in ruling that Macasio is entitled to these labor standards benefits.
The Court’s Ruling
We partially grant the petition.
Preliminary considerations: the Montoya ruling and the factual-issue-bar rule
In this Rule 45 petition for review on certiorari of the CA’s decision rendered
under a Rule 65 proceeding, this Court’s power of review is limited to resolving
matters pertaining to any perceived legal errors that the CA may have committed
in issuing the assailed decision. This is in contrast with the review for
jurisdictional errors, which we undertake in an original certiorari action. In
reviewing the legal correctness of the CA decision, we examine the CA decision
based on how it determined the presence or absence of grave abuse of discretion
in the NLRC decision before it and not on the basis of whether the NLRC
decision on the merits of the case was correct.32 In other words, we have to be
keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of
the NLRC decision challenged before it.33
Moreover, the Court’s power in a Rule 45 petition limits us to a review of
questions of law raised against the assailed CA decision.34
In this petition, David essentially asks the question – whether Macasio is entitled
to holiday, SIL and 13th month pay. This one is a question of law. The
determination of this question of law however is intertwined with the largely
factual issue of whether Macasio falls within the rule on entitlement to these
claims or within the exception. In either case, the resolution of this factual issue
presupposes another factual matter, that is, the presence of an employer-
employee relationship between David and Macasio.
In insisting before this Court that Macasio was not his employee, David argues
that he engaged the latter on "pakyaw" or task basis. Very noticeably, David
confuses engagement on "pakyaw" or task basis with the lack of employment
relationship. Impliedly, David asserts that their "pakyawan" or task basis
arrangement negates the existence of employment relationship.
At the outset, we reject this assertion of the petitioner. Engagement on "pakyaw"
or task basis does not characterize the relationship that may exist between the
parties, i.e., whether one of employment or independent contractorship. Article
97(6) of the Labor Code defines wages as "xxx the remuneration or earnings,
however designated, capable of being expressed in terms of money, whether
fixed or ascertained on a time, task, piece, or commission basis, or other method
of calculating the same, which is payable by an employer to an employee under
a written or unwritten contract of employment for work done or to be done, or
for services rendered or to be rendered[.]"35 In relation to Article 97(6), Article
10136 of the Labor Code speaks of workers paid by results or those whose pay is
calculated in terms of the quantity or quality of their work output which includes
"pakyaw" work and other non-time work.
More importantly, by implicitly arguing that his engagement of Macasio on
"pakyaw" or task basis negates employer-employee relationship, David would
want the Court to engage on a factual appellate review of the entire case to
determine the presence or existence of that relationship. This approach however
is not authorized under a Rule 45 petition for review of the CA decision rendered
under a Rule 65 proceeding.
First, the LA and the NLRC denied Macasio’s claim not because of the absence
of an employer-employee but because of its finding that since Macasio is paid on
pakyaw or task basis, then he is not entitled to SIL, holiday and 13th month pay.
Second, we consider it crucial, that in the separate illegal dismissal case Macasio
filed with the LA, the LA, the NLRC and the CA uniformly found the existence
of an employer-employee relationship.37
In other words, aside from being factual in nature, the existence of an employer-
employee relationship is in fact a non-issue in this case. To reiterate, in deciding
a Rule 45 petition for review of a labor decision rendered by the CA under 65,
the narrow scope of inquiry is whether the CA correctly determined the presence
or absence of grave abuse of discretion on the part of the NLRC. In concrete
question form, "did the NLRC gravely abuse its discretion in denying Macasio’s
claims simply because he is paid on a non-time basis?"
BAUTISTA, Coleen Joyce Q. Page 54 of 58
At any rate, even if we indulge the petitioner, we find his claim that no
employer-employee relationship exists baseless. Employing the control test,38 we
find that such a relationship exist in the present case.
Even a factual review shows that Macasio is David’s employee
To determine the existence of an employer-employee relationship, four elements
generally need to be considered, namely: (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. These elements or indicators comprise
the so-called "four-fold" test of employment relationship. Macasio’s relationship
with David satisfies this test.
First, David engaged the services of Macasio, thus satisfying the element of
"selection and engagement of the employee." David categorically confirmed this
fact when, in his "Sinumpaang Salaysay," he stated that "nag apply po siya sa
akin at kinuha ko siya na chopper[.]"39 Also, Solano and Antonio stated in their
"Pinagsamang Sinumpaang Salaysay"40 that "[k]ami po ay nagtratrabaho sa Yiels
xxx na pag-aari ni Ariel David bilang butcher" and "kilalanamin si xxx Macasio
na isa ring butcher xxx ni xxx David at kasama namin siya sa aming trabaho."
Second, David paid Macasio’s wages.Both David and Macasio categorically
stated in their respective pleadings before the lower tribunals and even before
this Court that the former had been paying the latter ₱700.00 each day after the
latter had finished the day’s task. Solano and Antonio also confirmed this fact of
wage payment in their "Pinagsamang Sinumpaang Salaysay."41 This satisfies the
element of "payment of wages."
Third, David had been setting the day and time when Macasio should report for
work. This power to determine the work schedule obviously implies power of
control. By having the power to control Macasio’s work schedule, David could
regulate Macasio’s work and could even refuse to give him any assignment,
thereby effectively dismissing him.
And fourth, David had the right and power to control and supervise Macasio’s
work as to the means and methods of performing it. In addition to setting the day
and time when Macasio should report for work, the established facts show that
David rents the place where Macasio had been performing his tasks. Moreover,
Macasio would leave the workplace only after he had finished chopping all of
the hog meats given to him for the day’s task. Also, 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.
Under this overall setup, all those working for David, including Macasio, could
naturally be expected to observe certain rules and requirements and David would
necessarily exercise some degree of control as the chopping of the hog meats
would be subject to his specifications. Also, since Macasio performed his tasks
at David’s workplace, David could easily exercise control and supervision over
the former. Accordingly, whether or not David actually exercised this right or
power to control is beside the point as the law simply requires the existence of
this power to control 4243 or, as in this case, the existence of the right and
opportunity to control and supervise Macasio.44
In sum, the totality of the surrounding circumstances of the present case
sufficiently points to an employer-employee relationship existing between David
and Macasio.
Macasio is engaged on "pakyaw" or task basis
At this point, we note that all three tribunals – the LA, the NLRC and the CA –
found that Macasio was engaged or paid on "pakyaw" or task basis. This factual
finding binds the Court under the rule that factual findings of labor tribunals
when supported by the established facts and in accord with the laws, especially
when affirmed by the CA, is binding on this Court.
A distinguishing characteristic of "pakyaw" or task basis engagement, as
opposed to straight-hour wage payment, is the non-consideration of the time
spent in working. In a task-basis work, the emphasis is on the task itself, in the
sense that payment is reckoned in terms of completion of the work, not in terms
of the number of time spent in the completion of work.45 Once the work or task
is completed, the worker receives a fixed amount as wage, without regard to the
standard measurements of time generally used in pay computation.
In Macasio’s case, the established facts show that he would usually start his
work at 10:00 p.m. Thereafter, regardless of the total hours that he spent at the
workplace or of the total number of the hogs assigned to him for chopping,
Macasio would receive the fixed amount of ₱700.00 once he had completed his
task. Clearly, these circumstances show a "pakyaw" or task basis engagement
that all three tribunals uniformly found.
In sum, the existence of employment relationship between the parties is
determined by applying the "four-fold" test; engagement on "pakyaw" or task
basis does not determine the parties’ relationship as it is simply a method of pay
computation. Accordingly, Macasio is David’s employee, albeit engaged on
"pakyaw" or task basis.
As an employee of David paid on pakyaw or task basis, we now go to the core
issue of whether Macasio is entitled to holiday, 13th month, and SIL pay.
On the issue of Macasio’s entitlement to holiday, SIL and 13th month pay
The LA dismissed Macasio’s claims pursuant to Article 94 of the Labor Code in
relation to Section 1, Rule IV of the IRR of the Labor Code, and Article 95 of
the Labor Code, as well as Presidential Decree (PD) No. 851. The NLRC, on the
other hand, relied on Article 82 of the Labor Code and the Rules and Regulations
BAUTISTA, Coleen Joyce Q. Page 55 of 58
Implementing PD No. 851. Uniformly, these provisions exempt workers paid on
"pakyaw" or task basis from the coverage of holiday, SIL and 13th month pay.
In reversing the labor tribunals’ rulings, the CA similarly relied on these
provisions, as well as on Section 1, Rule V of the IRR of the Labor Code and the
Court’s ruling in Serrano v. Severino Santos Transit.46 These labor law
provisions, when read together with the Serrano ruling, exempt those engaged on
"pakyaw" or task basis only if they qualify as "field personnel."
In other words, what we have before us is largely a question of law regarding the
correct interpretation of these labor code provisions and the implementing rules;
although, to conclude that the worker is exempted or covered depends on the
facts and in this sense, is a question of fact: first, whether Macasio is a "field
personnel"; and second, whether those engaged on "pakyaw" or task basis, but
who are not "field personnel," are exempted from the coverage of holiday, SIL
and 13th month pay.
To put our discussion within the perspective of a Rule 45 petition for review of a
CA decision rendered under Rule 65 and framed in question form, the legal
question is whether the CA correctly ruled that it was grave abuse of discretion
on the part of the NLRC to deny Macasio’s monetary claims simply because he
is paid on a non-time basis without determining whether he is a field personnel
or not.
To resolve these issues, we need tore-visit the provisions involved.
Provisions governing SIL and holiday pay
Article 82 of the Labor Code provides the exclusions from the coverage of Title
I, Book III of the Labor Code - provisions governing working conditions and
rest periods.
Art. 82. Coverage.— The provisions of [Title I] shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in
the personal service of another, and workers who are paid by results as
determined by the Secretary of Labor in appropriate regulations.
xxxx
"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. [emphases and underscores ours]
Among the Title I provisions are the provisions on holiday pay (under Article 94
of the Labor Code) and SIL pay (under Article 95 of the Labor Code). Under
Article 82,"field personnel" on one hand and "workers who are paid by results"
on the other hand, are not covered by the Title I provisions. The wordings of
Article82 of the Labor Code additionally categorize workers "paid by results"
and "field personnel" as separate and distinct types of employees who are
exempted from the Title I provisions of the Labor Code.
The pertinent portion of Article 94 of the Labor Code and its corresponding
provision in the IRR47 reads:
Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily
wage during regular holidays, except in retail and service establishments
regularly employing less than (10) workers[.] [emphasis ours]
xxxx
SECTION 1. Coverage. – This Rule shall apply to all employees except:
xxxx
(e)Field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or
contract basis, purely commission basis, or those who are paid a fixed amount
for performing work irrespective of the time consumed in the performance
thereof. [emphases ours]
On the other hand, Article 95 of the Labor Code and its corresponding provision
in the IRR48 pertinently provides:
Art. 95. Right to service incentive. (a) Every employee who has rendered at least
one year of service shall be entitled to a yearly service incentive leave of five
days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit
herein provided, those enjoying vacation leave with pay of at least five days and
those employed in establishments regularly employing less than ten employees
or in establishments exempted from granting this benefit by the Secretary of
Labor and Employment after considering the viability or financial condition of
such establishment. [emphases ours]
xxxx
Section 1. Coverage. – This rule shall apply to all employees except:
xxxx
(e) 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 a fixed amount for performing work
irrespective of the time consumed in the performance thereof. [emphasis ours]
BAUTISTA, Coleen Joyce Q. Page 56 of 58
Under these provisions, the general rule is that holiday and SIL pay provisions
cover all employees. To be excluded from their coverage, an employee must be
one of those that these provisions expressly exempt, strictly in accordance with
the exemption. Under the IRR, exemption from the coverage of holiday and SIL
pay refer to "field personnel and other employees whose time and performance
is unsupervised by the employer including those who are engaged on task or
contract basis[.]" Note that unlike Article 82 of the Labor Code, the IRR on
holiday and SIL pay do not exclude employees "engaged on task basis" as a
separate and distinct category from employees classified as "field personnel."
Rather, these employees are altogether merged into one classification of
exempted employees.
Because of this difference, it may be argued that the Labor Code may be
interpreted to mean that those who are engaged on task basis, per se, are
excluded from the SIL and holiday payment since this is what the Labor Code
provisions, in contrast with the IRR, strongly suggest. The arguable
interpretation of this rule may be conceded to be within the discretion granted to
the LA and NLRC as the quasi-judicial bodies with expertise on labor matters.
However, as early as 1987 in the case of Cebu Institute of Technology v.
Ople49 the phrase "those who are engaged on task or contract basis" in the rule
has already been interpreted to mean as follows:
[the phrase] should however, be related with "field personnel" applying the rule
on ejusdem generis that general and unlimited terms are restrained and limited
by the particular terms that they follow xxx Clearly, petitioner's teaching
personnel cannot be deemed field personnel which refers "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. [Par. 3, Article 82, Labor
Code of the Philippines]. Petitioner's claim that private respondents are not
entitled to the service incentive leave benefit cannot therefore be sustained.
In short, the payment of an employee on task or pakyaw basis alone is
insufficient to exclude one from the coverage of SIL and holiday pay. They are
exempted from the coverage of Title I (including the holiday and SIL pay) only
if they qualify as "field personnel." The IRR therefore validly qualifies and
limits the general exclusion of "workers paid by results" found in Article 82
from the coverage of holiday and SIL pay. This is the only reasonable
interpretation since the determination of excluded workers who are paid by
results from the coverage of Title I is "determined by the Secretary of Labor in
appropriate regulations."
The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus
Transport Systems, Inc., v. Bautista:
A careful perusal of said provisions of law will result in the conclusion that the
grant of service incentive leave has been delimited by the Implementing Rules
and Regulations of the Labor Code to apply only to those employees not
explicitly excluded by Section 1 of Rule V. According to the Implementing
Rules, Service Incentive Leave shall not apply to employees classified as "field
personnel." The phrase "other employees whose performance is unsupervised by
the employer" must not be understood as a separate classification of employees
to which service incentive leave shall not be granted. Rather, it serves as an
amplification of the interpretation of the definition of field personnel under the
Labor Code as those "whose actual hours of work in the field cannot be
determined with reasonable certainty."
The same is true with respect to the phrase "those who are engaged on task or
contract basis, purely commission basis." Said phrase should be related with
"field personnel," applying the rule on ejusdem generis that general and
unlimited terms are restrained and limited by the particular terms that they
follow.
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the
CA cited in support of granting Macasio’s petition.
In Serrano, the Court, applying the rule on ejusdem generis50 declared that
"employees engaged on task or contract basis xxx are not automatically
exempted from the grant of service incentive leave, unless, they fall under the
classification of field personnel."51 The Court explained that the phrase
"including those who are engaged on task or contract basis, purely commission
basis" found in Section 1(d), Rule V of Book III of the IRR should not be
understood as a separate classification of employees to which SIL shall not be
granted. Rather, as with its preceding phrase - "other employees whose
performance is unsupervised by the employer" - the phrase "including those who
are engaged on task or contract basis" serves to amplify the interpretation of the
Labor Code definition of "field personnel" as those "whose actual hours of work
in the field cannot be determined with reasonable certainty."
In contrast and in clear departure from settled case law, the LA and the NLRC
still interpreted the Labor Code provisions and the IRR as exempting an
employee from the coverage of Title I of the Labor Code based simply and
solely on the mode of payment of an employee. The NLRC’s utter disregard of
this consistent jurisprudential ruling is a clear act of grave abuse of discretion.
52 In other words, by dismissing Macasio’s complaint without considering
whether Macasio was a "field personnel" or not, the NLRC proceeded based on a
significantly incomplete consideration of the case. This action clearly smacks of
grave abuse of discretion.
Entitlement to holiday pay
BAUTISTA, Coleen Joyce Q. Page 57 of 58
Evidently, the Serrano ruling speaks only of SIL pay. However, if the LA and the
NLRC had only taken counsel from Serrano and earlier cases, they would have
correctly reached a similar conclusion regarding the payment of holiday pay
since the rule exempting "field personnel" from the grant of holiday pay is
identically worded with the rule exempting "field personnel" from the grant of
SIL pay. To be clear, the phrase "employees engaged on task or contract basis
"found in the IRR on both SIL pay and holiday pay should be read together with
the exemption of "field personnel."
In short, in determining whether workers engaged on "pakyaw" or task basis" is
entitled to holiday and SIL pay, the presence (or absence) of employer
supervision as regards the worker’s time and performance is the key: if the
worker is simply engaged on pakyaw or task basis, then the general rule is that
he is entitled to a holiday pay and SIL pay unless exempted from the exceptions
specifically provided under Article 94 (holiday pay) and Article95 (SIL pay) of
the Labor Code. However, if the worker engaged on pakyaw or task basis also
falls within the meaning of "field personnel" under the law, then he is not
entitled to these monetary benefits.
Macasio does not fall under the classification of "field personnel"
Based on the definition of field personnel under Article 82, we agree with the
CA that Macasio does not fall under the definition of "field personnel." The CA’s
finding in this regard is supported by the established facts of this case: first,
Macasio regularly performed his duties at David’s principal place of business;
second, his actual hours of work could be determined with reasonable certainty;
and, third, David supervised his time and performance of duties. Since Macasio
cannot be considered a "field personnel," then he is not exempted from the grant
of holiday, SIL pay even as he was engaged on "pakyaw" or task basis.
Not being a "field personnel," we find the CA to be legally correct when it
reversed the NLRC’s ruling dismissing Macasio’s complaint for holiday and SIL
pay for having been rendered with grave abuse of discretion.
Entitlement to 13th month pay
With respect to the payment of 13th month pay however, we find that the CA
legally erred in finding that the NLRC gravely abused its discretion in denying
this benefit to Macasio.1âwphi1
The governing law on 13th month pay is PD No. 851.53
As with holiday and SIL pay, 13th month pay benefits generally cover all
employees; an employee must be one of those expressly enumerated to be
exempted. Section 3 of the Rules and Regulations Implementing P.D. No.
85154enumerates the exemptions from the coverage of 13th month pay benefits.
Under Section 3(e), "employers of those who are paid on xxx task basis, and
those who are paid a fixed amount for performing a specific work, irrespective The Arbitration Branch ruled that Petitioners were regular employees, and
of the time consumed in the performance thereof"55 are exempted. ordered Respondents to reinstate the Petitioners. 

The NLRC affirmed the ruling, but the CA overturned the decision.

Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e)
of the Rules and Regulations Implementing PD No. 851 exempts employees
"paid on task basis" without any reference to "field personnel." This could only ISSUE: W/N Petitioners are regular employees of Respondents.

mean that insofar as payment of the 13th month pay is concerned, the law did
not intend to qualify the exemption from its coverage with the requirement that
the task worker be a "field personnel" at the same time. RULING: Yes.

Of the criteria to determine whether there is an employer-employee relationship,
WHEREFORE, in light of these considerations, we hereby PARTIALLY the so-called "control test" is generally regarded as the most crucial and
GRANT the petition insofar as the payment of 13th month pay to respondent is determinative indicator of the said relationship. 

concerned. In all other aspects, we AFFIRM the decision dated November 22, Under this test, an employer-employee relationship is said to exist where the
2010 and the resolution dated January 31, 2011 of the Court of Appeals in CA- person for whom the services are performed reserves the right to control not only
G.R. SP No. 116003. the end result but also the manner and means utilized to achieve the same.

Notwithstanding the nomenclature of their Talent Contracts and/or Project
SO ORDERED. Assignment Forms and the terms and condition embodied therein, petitioners are
regular employees of ABS-CBN. 

As cameramen, editors and reporters, it appears that Petitioners were subject to
Begino vs ABSCBN the control and supervision of Respondents which provided them with the
equipment essential for the discharge of their functions. The exclusivity clause

 and prohibitions in their Talent Contract were likewise indicative of
Respondent ABS-CBN, through Respondent Villafuerte, engaged the services of Respondents' control over them, however obliquely worded. 

Petitioners as cameramen, editors or reporters for TV Broadcasting. Petitioners Also,the presumption is that when the work done is an integral part of the
signed regularly renewed Talent Contracts (3 months - 1 year) and Project regular business of the employer and when the worker does not furnish an
Assignment Forms which detailed the duration, budget and daily technical independent business or professional service, such work is a regular employment
requirements of a particular project. Petitioners were tasked with coverage of of such employee and not an independent contractor.
news items for subsequent daily airings in Respondents’ TV Patrol Bicol
Program.

The Talent Contract has an exclusivity clause and provides that nothing therein
shall be deemed or construed to establish an employer-employee relationship
between the parties.

Petitioners filed against Respondents a complaint for regularization before the
NLRC's Arbitration branch. 

In support of their complaint, Petitioners claimed that they worked under the
direct control of Respondent Villafuerte - they were mandated to wear company
IDs, they were provided the necessary equipment, they were informed about the
news to be covered the following day, and they were bound by the company’s
policy on attendance and punctuality.

Respondents countered that, pursuant to their Talent Contracts and Project
Assignment Forms, Petitioners were hired as talents to act as reporters, editors
and/or cameramen. Respondents further claimed they never imposed control as
to how Petitioners discharged their duties. At most, they were briefed regarding
the general requirements of the project to be executed.

While the case was pending, Petitioners contracts were terminated, prompting
the latter to file a second complaint for illegal dismissal. 

BAUTISTA, Coleen Joyce Q. Page 58 of 58