1.

Contract Employment/Backwages
Title:
ST. THERESAS SCHOOL OF NOVALICHES FOUNDATION and ADORACION
ROXAS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and
ESTHER REYES, respondents.
[G.R. No. 122955. April 15, 1998]

Facts:
Petitioner Adoracion Roxas is the president of St. Theresas School of Novaliches
Foundation. She hired private respondent, Esther Reyes, on a contract basis, for the
period nine months. During the said period of employment, private respondent became
ill. She went on a leave of absence and this was duly approved by petitioner Roxas. One
time, when Reyes went for work, she only stayed in her place of work for three hours in
the morning and thereafter, she never returned.
Petitioners theorize that the private respondent abandoned her work. On the other hand,
the Reyes maintained that she was replaced. When she went back to work on, she found
out that her table, chair, and other belongings were moved to a corner of their office, and
she was replaced by the daughter of petitioner (President of the School). She tried to
contact her employer but the latter could not be found within the school premises. Roxas
sent Reyes a letter, informing her that her contract, due to expire within that month,
would not be renewed.
The dismissal of Reyes was upheld to be valid. However, backwages were
ordered to be paid. Roxas et al. have come here to question the award of backwages for
Reyes, whose dismissal has been upheld with finality.
Issues:

a. Whether or not the employment contract of Reyes is valid.

b. Whether or not the award of backwages is proper.
Held:

a. Yes.

It is an undisputed fact that Reyes was employed in a contract basis. Article

280 of the Labor Code does not proscribe or prohibit an employment contract
with a fixed period provided the same is entered into by the parties, without any
force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstance vitiating consent. It does not necessarily follow
that where the duties of the employee consist of activities usually necessary or
desirable in the usual business of the employer, the parties are forbidden from
agreeing on a period of time for the performance of such activities. There is thus
nothing essentially contradictory between a definite period of employment and
the nature of the employee.s duties. It goes without saying that contracts of
employment govern the relationship of the parties. In this case, Reyes contract
provided for a fixed term of nine (9) months. Such stipulation, not being
contrary to law, morals, good customs, public order and public policy, is valid,
binding and must be respected. It bears stressing that private teachers are subject
to special rules with respect to requisites for their permanent employment and
security of tenure, to wit:
1. He must be a full time teacher;
2. He must have rendered at least three consecutive years of service; and,
3. Such service must be satisfactory.
This is in accord with the Manual of Regulations for Private Schools issued by the then
Department of Education.

b. Backwages
- Have been defined as that for earnings lost by a worker due to his illegal
dismissal.

Are generally granted on grounds of equity. Payment thereof is a form

of relief that restores the income lost by reason of such unlawful
dismissal.

Are not private compensations or damages, but are awarded in

furtherance and effectuation of the public objectives of the Labor
Code. Nor are they redress of a private right but, rather, in the nature
of a command to the employer to make public reparation for
dismissing an employee, either due to the formers unlawful act or bad
faith.
In this case, the dismissal where the dismissal has been adjudged valid and lawful, the
challenged award of backwages is decidedly improper and contrary to law and
jurisprudence.
2. Definition of Referral
Title:
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LOMA GOCE y OLALIA,
DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D. AGUSTIN, accusedappellant.

G.R. No. 113161 August 29, 1995

Facts:
An information for illegal recruitment committed by a syndicate and in large scale
was filed against spouses Goce and Nelly Agustin. The complainants testified that
Agustin represented herself as the manager of the Clover Placement Agency. One of the
applicants, testified that she was offered a job as a cutter by Agustin the first time they
met, while another applicant, remembered that when he first met Agustin, the latter
represented herself as "nagpapaalis papunta sa Oman. It was Agustin whom they
initially approached regarding their plans of working overseas and it was from her that
they learned about the fees they had to pay, as well as the papers that they had to submit.
It was after they had talked to her that they met the spouses Goce who owned the
placement agency. Agustin also received from complainants various sums of money for
purpose of their applications.
When it was discovered that all the accused in this case were not authorized to engage in
any recruitment activity, Agustin denied any participation in the illegal recruitment and
maintained that the recruitment was perpetrated only by the Goce couple. Agustin
contended that all she did was to introduce complainants to the Goce spouses. Being a
neighbor of said couple, and owing to the fact that her son's overseas job application was
processed and facilitated by them, the complainants asked her to introduce them to said
spouses. Allegedly out of the goodness of her heart, she complied with their request.
Such an act, appellant argues, does not fall within the meaning of "referral" under the
Labor Code to make her liable for illegal recruitment.
However, the trial court found Agustin guilty as a principal in the crime of illegal
recruitment in large scale. Appellant Agustin then raises the following arguments:
(1) her act of introducing complainants to the Goce couple does not fall within the
meaning of illegal recruitment and placement under Article 13 (b) in relation to Article
34 of the Labor Code;
(2) there is no proof of conspiracy to commit illegal recruitment among appellant and the
Goce spouses; and
(3) there is no proof that appellant offered or promised overseas employment to the
complainants.
Issue:
Whether or not Agustin is guilty as a principal in the crime of illegal recruitment in large
scale.
Held:
Yes. Herein appellant is accused of violating Articles 38 and 39 of the Labor Code.
Article 38 of the Labor Code, as amended by Presidential Decree No. 2018, provides that
any recruitment activity, including the prohibited practices enumerated in Article 34 of
said Code, undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 thereof. The same article further provides that
illegal recruitment shall be considered an offense involving economic sabotage if any of
these qualifying circumstances exist, namely, (a) when illegal recruitment is committed
by a syndicate, i.e., if it is carried out by a group of three or more persons conspiring
and/or confederating with one another; or (b) when illegal recruitment is committed in
large scale, i.e., if it is committed against three or more persons individually or as a

group. Under said Code, recruitment and placement refers to any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not; provided, that any person or entity which, in any
manner, offers or promises for a fee employment to two or more persons shall be deemed
25
engaged in recruitment and placement. On the other hand, referral is the act of passing
along or forwarding of an applicant for employment after an initial interview of a
selected applicant for employment to a selected employer, placement officer or bureau.
Being an employee of the Goces, it was therefore logical for appellant to introduce the
applicants to said spouses, they being the owners of the agency. As such, appellant was
actually making referrals to the agency of which she was a part. She was therefore
engaging in recruitment activity. Indeed, Agustin played a pivotal role in the operations
of the recruitment agency, working together with the Goce couple.
There is illegal recruitment when one gives the impression of having the ability to send a
worker abroad." It is undisputed that appellant gave complainants the distinct impression
that she had the power or ability to send people abroad for work such that the latter were
convinced to give her the money she demanded in order to be so employed. Her act of
collecting from each of the complainants payment for their respective passports, training
fees, placement fees, medical tests and other sundry expenses unquestionably constitutes
an act of recruitment within the meaning of the law.

3. Elements (2) of Illegal Recruitment, explained

Title:
ROSA C. RODOLFO, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent.
G.R. No. 146964 August 10, 2006
Facts:
Rosa Rodolfo approached the private complainants and invited them to apply for
overseas employment in Dubai. Rosa being their neighbor, the private complainants
agreed and went to the Rosas office bearing the name, Bayside Manpower Export
Specialist. In that office, the applicants who are now the complainants in this case gave
certain amounts to Rosa for processing and other fees. She then told private complainants
that they were scheduled to leave for Dubai on September 8, 1984. However, the
applicants were not able to depart on the said date as their employer allegedly did not
arrive. Their departure was rescheduled, but the result was the same. Suspecting that they
were being hoodwinked, the complainants demanded Rosa to return their money. Rosa
was not able to return all the complainants money. Tired of excuses, they filed the
present case for illegal recruitment against Rosa.
An officer of the POEA proved that Rosa had no authority to recruit workers for overseas
employment. For her defense, Rosa denied ever approaching the complainants to recruit
them for employment in Dubai. On the contrary, it was the private complainants who
asked her help in securing jobs abroad. As a good neighbor and friend, she brought the
private complainants to the Bayside Manpower Export Specialist agency because she
knew the owner of the said agency. While Rosa admitted that she received money from
the private complainants, she was quick to point out that she received the same only in
trust for delivery to the agency. She denied being part of the agency either as an owner or
employee thereof.
Further, Rosa assailed that the court failed to consider that the provisional receipts she
issued indicated that the amounts she collected from the private complainants were turned
over to the agency. She cited People v. Seoron wherein this Court held that the issuance
or signing of receipts for placement fees does not make a case for illegal recruitment.
Issue:
Whether or not Rosa Rodolfo is guilty of illegal recruitment.
Held:
Yes. The elements of the offense of illegal recruitment, which must concur, are: (1) that
the offender has no valid license or authority required by law to lawfully engage in
recruitment and placement of workers; and (2) that the offender undertakes any activity
within the meaning of recruitment and placement under Article 13(b), or any prohibited
practices enumerated under Article 34 of the Labor Code. If another element is present,
that is, the accused commits the act against three or more persons, individually or as a

group, it becomes an illegal recruitment in a large scale.

Article 13 (b) of the Labor Code defines recruitment and placement as [a]ny act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers,
and includes referrals, contract services, promising or advertising for employment,
locally or abroad, whether for profit or not.
That the first element is present in the case at bar, there is no doubt. Article 38 (a) clearly
shows that illegal recruitment is an offense that is essentially committed by a nonlicensee or non-holder of authority. A non-licensee means any person, corporation or
entity to which the labor secretary has not issued a valid license or authority to engage in
recruitment and placement; or whose license or authority has been suspended, revoked or
cancelled by the POEA or the labor secretary. A license authorizes a person or an entity to
operate a private employment agency, while authority is given to those engaged in
recruitment and placement activities.
The second element is doubtless also present. The act of referral, which is included in
recruitment, is the act of passing along or forwarding of an applicant for employment
after an initial interview of a selected applicant for employment to a selected employer,
placement officer or bureau. Rosas admission that she brought private complainants to
the agency whose owner she knows and her acceptance of fees including those for
processing betrays her guilt. That petitioner issued provisional receipts indicating that the
amounts she received from the private complainants were turned over to the agency does
not free her from liability. For the act of recruitment may be for profit or not. It is
sufficient that the accused promises or offers for a fee employment to warrant conviction
for illegal recruitment. As the appellate court stated: x x x Sec. 13(b) of P.D. 442 [The
Labor Code] does not require that the recruiter receives and keeps the placement money
for himself or herself. For as long as a person who has no license to engage in recruitment
of workers for overseas employment offers for a fee an employment to two or more
persons, then he or she is guilty of illegal recruitment. Why petitioner accepted the
payment of fees from the private complainants when, in light of her claim that she merely
brought them to the agency, she could have advised them to directly pay the same to the
agency, she proferred no explanation. On petitioners reliance on Seoron case, true, this
Court held that issuance of receipts for placement fees does not make a case for illegal
recruitment. But it went on to state that it is rather the undertaking of recruitment
activities without the necessary license or authority that makes a case for illegal
recruitment.

4. Being unaware of the illegal nature of the activity is not a defense.

Title:
PEOPLE OF THE PHILIPPINES, Appellee, vs. BETH TEMPORADA, Appellant.
G.R. No. 173473 December 17, 2008
Facts:
Beth Temporada was convicted of the crime of large scale illegal recruitment and five (5)
counts of estafa by the RTC and affirmed by the CA. One complainant testified that after
introducing herself as the General Manager of ATTC, a recruitment agency, Beth
persuaded him to apply as a technician in Singapore and assured him that there was a job
market therefor. Because of this, the complainant handed the amount of P10,000.00 to
Beth who, in turn, issued him a receipt. Another complainant declared that it was
appellant who briefed them on the requirements for the processing of their application,
and assured them of immediate deployment for jobs abroad. Appellant, in conspiracy
with her co-accused, misrepresented to have the power, influence, authority and business
to obtain overseas employment upon payment of a placement fee which was duly
collected from complainants. Further, the certification issued by the (POEA) established
that appellant and her co-accused did not possess any authority or license to recruit
workers for overseas employment. And, since there were five (5) victims, the trial court
found appellant liable for illegal recruitment in large scale.
Appellant insists that she was merely an employee of ATTC and was just echoing the
requirement of her employer. She further argues that the prosecution failed to prove that
she was aware of the latters illegal activities and that she actively participated therein.
Issue: Whether or not appellant was guilty of illegal recruitment in large scale.

Held:
Yes. An employee of a company or corporation engaged in illegal recruitment may be
held liable as principal, together with his employer, if it is shown that he actively and
consciously participated in illegal recruitment. Appellant actively took part in the illegal
recruitment of private complainants. As stated in the facts.
The defense of appellant that she was not aware of the illegal nature of the activities of
her co-accused cannot be sustained. Besides, even assuming arguendo that appellant was
indeed unaware of the illegal nature of said activities, the same is hardly a defense in the
prosecution for illegal recruitment. Under The Migrant Workers and Overseas Filipinos
Act of 1995, a special law, the crime of illegal recruitment in large scale is malum
prohibitum and not malum in se. Thus, the criminal intent of the accused is not necessary
and the fact alone that the accused violated the law warrants her conviction.
Section 7(b) of R.A. No. 8042 prescribes the penalty of life imprisonment and a fine of
not less than P500,000.00 nor more than P1,000,000.00 for the crime of illegal
recruitment in large scale or by a syndicate. The trial court, therefore, properly meted the
penalty of life imprisonment and a fine of P500,000.00 on the appellant.
Anent the conviction of appellant for five (5) counts of estafa, we, likewise, affirm the
same. Well-settled is the rule that a person convicted for illegal recruitment under the
Labor Code may, for the same acts, be separately convicted for estafa under Article 315,
par. 2(a) of the RPC. The elements of estafa are: (1) the accused defrauded another by
abuse of confidence or by means of deceit; and (2) the offended party or a third party
suffered damage or prejudice capable of pecuniary estimation. The same evidence
proving appellants criminal liability for illegal recruitment also established her liability
for estafa. As previously discussed, appellant together with her co-accused defrauded
complainants into believing that they had the authority and capability to send
complainants for overseas employment. Because of these assurances, complainants
parted with their hard-earned money in exchange for the promise of future work abroad.
However, the promised overseas employment never materialized and neither were the
complainants able to recover their money.

5. Employer-employee relationship exists; Control Test

Title:
DY KEH BENG, petitioner, vs. INTERNATIONAL LABOR and MARINE UNION OF
THE PHILIPPINES, ET AL., respondents.
G.R. No. L-32245 May 25, 1979
Facts:
A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket
factory, for discriminatory acts by dismissing Carlos N. Solano and Ricardo Tudla for
their union activities.
Dy Keh Beng contended that he did not know Tudla and that Solano was not his
employee because the latter came to the establishment only when there was work which
he did on pakiaw basis, each piece of work being done under a separate contract.
Complainant Union tended to show that Solano and Tudla were employees of Dy Keh
Beng and that except in the event of illness, their work with the establishment was
continuous although their services were compensated on piece basis. Evidence likewise
showed that at times the establishment had eight (8) workers and never less than five (5);
including the complainants, and that complainants used to receive P5.00 a day,
sometimes less.
According to Dy Keh Beng, however, Solano was not his employee for the following
reasons:
(1) Solano never stayed long enough at Dy's establishment;
(2) Solano had to leave as soon as he was through with the order given him by Dy;
(3) When there were no orders needing his services there was nothing for him to do;
(4) When orders came to the shop that his regular workers could not fill it was then that
Dy went to his address in Caloocan and fetched him for these orders; and
(5) Solano's work with Dy's establishment was not continuous.

Petitioner anchors his contention of the non-existence of employee-employer relationship

on the control test. He points to the case of Madrigal Shipping Co., Inc. v. Nieves Baens
del Rosario, et al., L-13130, October 31, 1959, where the Court ruled that:
The test of the existence of employee and employer relationship is whether there is an
understanding between the parties that one is to render personal services to or for the
benefit of the other and recognition by them of the right of one to order and control the
other in the performance of the work and to direct the manner and method of its
performance.
Petitioner contends that the private respondents "did not meet the control test in the light
of the ... definition of the terms employer and employee, because there was no evidence
to show that petitioner had the right to direct the manner and method of respondent's
work. Moreover, it is argued that petitioner's evidence showed that "Solano worked on
a pakiaw basis" and that he stayed in the establishment only when there was work.
Issue:
Whether or not there exists an employer-employee relationship.
Held:
Yes. An employer-employee exists. While this Court upholds the control test under
which an employer-employee relationship exists "where the person for whom the services
are performed reserves a right to control not only the end to be achieved but also the
means to be used in reaching such end, it finds no merit with petitioner's arguments as
stated above. It should be borne in mind that the control test calls merely for the existence
of the right to control the manner of doing the work, not the actual exercise of the right.
Considering the finding by the Hearing Examiner that the establishment of Dy Keh Beng
13
is "engaged in the manufacture of baskets known as kaing, it is natural to expect that
those working under Dy would have to observe, Dy's requirements of size and quality of
the kaing. Some control would necessarily be exercised by Dy as the making of
the kaing would be subject to Dy's specifications. Parenthetically, since the work on the
baskets is done at Dy's establishments, it can be inferred that the proprietor Dy could
easily exercise control on the men he employed.
As to the contention that Solano was not an employee because he worked on piece basis,
there is already a judicial notice by the court of the fact that the so-called "pakyaw"
system as generally practiced in our country, is, in fact, a labor contract -between
employers and employees, between capitalists and laborers.
6. Who is the employer? Gersher.
Title:
PETROPHIL CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, ANSELMO B. ENCARNACION AND GERSHER ENGINEERING
WORKS,respondents.
G.R. No. L-64048 August 29, 1986
Facts:
Anselmo B. Encarnacion, had been working as a casual employee of various job
contractors in Petrophil's premises. Respondent Gersher Engineering Works entered into
a service contract with Petrophil and thereafter placed respondent Encarnacion in its
payroll. Respondent Gersher received a letter from Petrophil Corporation complaining
about the unsatisfactory performance of respondent Encarnacion. As a result, respondent
Gersher decided to re-assign Encarnacion to Caltex Phil. Inc. with whom said respondent
Gersher had also a contract. Respondent Encarnacion refused to be reassigned to Caltex
unless he was made to occupy the same position of warehouseman as in Petrophil
Corporation and since the position available at Caltex was that of equipment maintainer,
respondent Encarnacion refused to be transferred. Instead he filed a complaint for illegal
dismissal against respondent Gersher and in the alternative, against petitioner Petrophil
Corporation.
The Labor Arbiter rendered judgment holding that respondent Encarnacion was the
employee of respondent Gersher Engineering Works and not of petitioner Petrophil
Corporation; that respondent Encarnacion was not illegally dismissed; but that he is
entitled to receive from respondent Gersher the 13th month pay of P340.00 covering the
year from March 15, 1976 to March 26, 1977 and the emergency monthly living
allowance of P100.00 for the same period. The claim for holiday and vacation leave pay

was dismissed for insufficiency of evidence. The judgment further ordered respondent
Gersher to accept respondent Encarnacion back to work to be assigned as helper in any of
its contractual jobs (except Petrophil Corporation) with the same salary and without loss
of seniority and other benefits appurtenant to his position.
On appeal, the NLRC rendered judgment modifying the decision of the Labor Arbiter and
holding that Encarnacion was the employee of Petrophil Corporation and not of
respondent Gersher and that he had been illegally dismissed.
Issues:

1.

Which was the employer of respondent Anselmo B. Encarnacion-petitioner

Petrophil Corporation or respondent Gersher Engineering Works?

2. Was Anselmo B. Encarnacion illegally dismissed?

Held:

1.

On the first issue raised, the Supreme Court agreed with the findings of the
Labor Arbiter that respondent Encarnacion was the employee of respondent
Gersher and not petitioner Petrophil Corporation. This fact was admitted by
no less than Gersher in its position paper which it filed with the Labor
Relations Division. The payrolls of respondent Gersher also show that
respondent Encarnacion was its employee.

2. Anent the issues of his alleged illegal dismissal and his entitlement to benefits
from his employer, We likewise agree with the decision of the Labor Arbiter
that respondent Encarnacion was not dismissed but was only demoted and
transferred to Caltex Phil. Inc. because of his failure to observe proper
diligence in his work, and also because of his indolence, habitual tardiness and
absences. But following his demotion and transfer, Encarnacion refused to
report for work anymore. Reinstatement of respondent Encarnacion and
payment of his money claims should be made by respondent Gersher
Engineering Works, his employer.

7. No employer-employee relationship.
Title:
ABOITIZ SHIPPING EMPLOYEES ASSOCIATION, LAZARO ABAIGAR,
VICTORIANO ANIBAN, FELIPE BATERZAL, RUFINO YAGUIT, JONNIE YAGUIT
and EUGENIO BALBUENA, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and ABOITIZ SHIPPING CORPORATION, respondents.
G.R. No. 78711 June 27, 1990
Facts:
Petitioners herein claimed that they were employed as carpenters by respondent
corporation, ABOITIZ, until their illegal dismissal. They alleged that they were all
allegedly dismissed by spouses Baguio just a day after an inspection was made on
respondent ABOITIZ in connection with a labor case which same complainants filed with
the Ministry of Labor and Employment. According to the complainants, said act of the
Baguios constitute unfair labor practice.
Respondent ABOITIZ denies that the petitioners were their employees at the time of their
dismissal but are employees of respondent Ben Baguio by virtue of a Service Contract.
Spouses Baguio aver that they are the proprietors of Narben's Service Contractor engaged
in contracting carpentry jobs and has a service contract with respondent Aboitiz Shipping
Corporation. Spouses Baguio admit that the petitioners were indeed their employees
whose duties were to do carpentry work, subject to the condition that the moment their
works were finished, their employment would end, and that they would be re-hired once
respondent ABOITIZ would enter into another contract.
Issue:
Whether or not an employer-employee relationship existed between respondent Aboitiz
and the workers at the time of their dismissal.
Held:

No. Records reveal that petitioners are not regular employees of the Aboitiz at the time
of their alleged illegal dismissal. It was held in Mafinco Trading Corporation vs. Ople, 70
SCRA 139 (1976), the existence of employer-employee relationship is determined by
four (4) elements, 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 employees'
conduct. From a reading of the provisions of the aforesaid service contract, the
concurrence of these four elements on NARBEN's will easily be noted. For NARBEN's
had the right to hire the necessary number of carpenters to accomplish the carpentry
requirements of Aboitiz and to fire them. It had charge of the payment of wages of its
laborers and the power of administrative supervision and general control as to the time,
manner and method of performance of work.
All the above evidences constitute positive proofs that the petitioners-workers were, at
the time in question, in the employ of NARBEN's and not anymore of Aboitiz.

8. There is employee-employer relationship; Power of Dismissal

Title:
CECILIO P. DE LOS SANTOS and BUKLOD MANGGAGAWA NG CAMARA
(BUMACA), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION
(SECOND DIVISION), HON. COMMISSIONERS VICTORIANO R. CALAYCAY,
RAUL T. AQUINO, and ROGELIO I. RAYALA, CAMARA STEEL INDUSTRIES
INC., JOSELITO JACINTO, ALBERTO F. DEL PILAR, DENNIS ALBANO,
MERCEDITA G. PASTRANA, TOP-FLITE and RAUL RUIZ, respondents.
Facts:
On 3 May 1991 petitioner De los Santos started working at Camara Steel Industries Inc.
(CAMARA STEEL). He was first assigned at the LPG assembly line, then later, as
operator of a blasting machine. While performing his task, he met an accident that forced
him to go on leave for one and a half (1-1/2) months. Upon his return, he was designated
as a janitor assigned to clean the premises of the company, and occasionally, to transfer
scrap and garbage from one site to another.
Petitioner was doing his usual chores as a janitor of CAMARA STEEL, when the scrap
in-charge handed him a box that was declared a scrap and was instructed to transfer the
same to the adjacent lot of the company as scrap. Because of this, CAMARA STEEL
filed a criminal complaint for frustrated qualified theft against De los Santos and the
scrap-in-charge but was dismissed for lack of evidence.
Upon request of Top-Flite, the alleged manpower agency of De los Santos, CAMARA
STEEL terminated his services. Aggrieved by his illegal termination, De los Santos
sought recourse with the Labor Arbiter. The LA ordered CAMARA STEEL to reinstate
Delos Santos to his former position. However, the NLRC reversed this decision and
ordered for the remand of the case for the determination of employer-employee
relationship between the parties.
Pieces of evidence were presented by De los Santos to show that the power of control and
supervision over him was exercised solely and exclusively by the managers and
supervisors of CAMARA STEEL. De los Santos further contended that even the power to
dismiss was also lodged with CAMARA STEEL when it admitted that upon request by
Top-Flite, the steel company terminated his employment after being allegedly caught
committing theft.
Petitioner De los Santos also advances the view that Top-Flite, far from being his
employer, was in fact a "labor-only" contractor as borne out by a contract whereby TopFlite undertook to supply CAMARA STEEL workers. He insists that such contract was
not a job contract but the supply of labor only. All things considered, he is of the firm
belief that for all legal intents and purposes, he was an employee a regular one at that
of CAMARA STEEL.
In its comment, private respondent CAMARA STEEL avers that far from being its
employee, De los Santos was merely a project employee of Top-Flite who was assigned
as janitor in private respondent company. This was acknowledged by Top-Flite. Such
allegation, according to private respondent CAMARA STEEL, supports all along its
theory that De los Santos' assignment to the latter as janitor was based on an independent
contract executed between Top-Flite and CAMARA STEEL.
Issue:

Whether or not there existed an employer-employee relationship between CAMARA

STEEL and respondent De Los Santos.
Held:
Yes. Etched in an unending stream of cases are the four (4) standards in determining the
existence of an employer-employee relationship, namely:
(a) the manner of selection and engagement of the putative employee;
(b) the mode of payment of wages;
(c) the presence or absence of power of dismissal; and,
(d) the presence or absence of control of the putative employee's conduct. Most
determinative among these factors is the so-called "control test.
As shown by the evidence on record, De los Santos was hired by CAMARA STEEL after
undergoing an interview. Also remaining uncontroverted are the pieces of documentary
evidence adduced by De los Santos consisting of daily time records.
Incidentally, the Supreme Court did not agree with NLRC's submission that the daily time
records serve no other purpose than to establish merely the presence of De los Santos
within the premises of CAMARA STEEL. Contrarily, these records, which were signed
by the company's officers, prove that the company exercised the power of control and
supervision over its employees, particularly De los Santos. There is dearth of proof to
show that Top-Flite was the real employer of De los Santos other than a naked and
unsubstantiated denial by CAMARA STEEL that it has no power of control over De los
Santos. Records would attest that even the power to dismiss was vested with CAMARA
STEEL which admitted in its Replythat "Top-Flite requested CAMARA STEEL to
terminate his employment after he was caught by the security guard committing theft."
A cursory reading of the above declaration will confirm the fact that the dismissal of De
los Santos could only be effected by CAMARA STEEL and not by Top-Flite as the latter
could only "request" for De los Santos' dismissal. If Top-Flite was truly the employer of
De los Santos, it would not be asking permission from or "requesting" respondent
CAMARA STEEL to dismiss De los Santos considering that it could very well dismiss
him without CAMARA STEEL's assent.
All the foregoing considerations affirm by more than substantial evidence the existence
of an employer-employee relationship between De los Santos and CAMARA STEEL.

9. Private Respondents are regular employees of PHCCI; Type of Employees

Title:
PERPETUAL HELP CREDIT COOPERATIVE, INC., petitioner, vs. BENEDICTO
FABURADA, SISINITA VILLAR, IMELDA TAMAYO, HAROLD CATIPAY, and the
NATIONAL LABOR RELATIONS COMMISSION, Fourth Division, Cebu
City, respondents.
G.R. No. 121948

October 8, 2001

Facts:
Petitioner PHCCI, through Mr. Edilberto Lantaca, Jr., its Manager, hired private
respondents to work for it. They worked regularly on regular working hours, were
assigned specific duties, were paid regular wages and made to accomplish daily time
records just like any other regular employee. They worked under the supervision of the
cooperative manager. But unfortunately, they were dismissed. All of them were given a
memorandum of termination on January 2, 1990, effective December 29, 1989.

Petitioner PHCCI contends that private respondents are its members and are working for
it as volunteers. Not being regular employees, they cannot sue petitioner.
Issue:
Whether or not an employer-employee relationship exists between the parties.
Held:

Yes. In determining the existence of an employer-employee relationship, the following

elements are considered: (1) the selection and engagement of the worker or the power to
hire; (2) the power to dismiss; (3) the payment of wages by whatever means; and (4) the
power to control the worker's conduct, with the latter assuming primacy in the overall
consideration. No particular form of proof is required to prove the existence of an
employer-employee relationship. Any competent and relevant evidence may show the
relationship. The above elements are present here.
Article 280 of the Labor Code provides for three kinds of employees: (1) regular
employees or those who have been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; (2) project
employees or those whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be performed is seasonal
in nature and the employment is for the duration of the season; and (3) casual employees
or those who are neither regular nor project employees. The employees who are deemed
regular are: (a) those who have been engaged to perform activities which are usually
necessary or desirable in the usual trade or business of the employer; and (b) those casual
employees who have rendered at least one (1) year of service, whether such service is
continuous or broken, with respect to the activity in which they are
employed. Undeniably, private respondents were rendering services necessary to the dayto-day operations of petitioner PHCCI. This fact alone qualified them as regular
employees.
One's regularity of employment is not determined by the number of hours one works but
by the nature and by the length of time one has been in that particular job. Petitioner's
contention that private respondents are mere volunteer workers, not regular employees,
must necessarily fail.
The valid causes are categorized into two groups: the just causes under Articles 282 of
the Labor Code and the authorized causes under Articles 283 and 284 of the same Code.
The just causes are:
(1) serious misconduct or willful disobedience of lawful orders in connection with the
employee's work;
(2) gross or habitual neglect of duties;
(3) fraud or willful breach of trust;
(4) commission of a crime or an offense against the person of the employer or his
immediate family member or representative; and, analogous cases.
The authorized causes are:
(1) the installation of labor-saving devices;
(2) redundancy;
(3) retrenchment to prevent losses; and
(4) closing or cessation of operations of the establishment or undertaking, unless the
closing is for the purpose of circumventing the provisions of law.
Article 284 provides that an employer would be authorized to terminate the services of an
employee found to be suffering from any disease if the employee's continued
employment is prohibited by law or is prejudicial to his health or to the health of his
6
fellow employees
Private respondents were dismissed not for any of the above causes. They were dismissed
because petitioner considered them to be mere voluntary workers, being its members, and
as such work at its pleasure. Petitioner thus vehemently insists that their dismissal is not
against the law.
10. Illegal Recruitment
Title:
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
MANUNGAS, JR. y GO @ "PERCY", accused-appellant.

vs.

FERNANDO

G.R. No. 91552-55 March 10, 1994

Facts:
Accused-appellant Fernando Manungas, Jr. went to Pangasinan to recruit workers for
employment abroad. He was able to convince complainants to apply as janitors in Saudi
Arabia. He told them to bring all the necessary documents for the processing of their
applications to his office in Manila. Complainants went to accused-appellant's office in

Manila and paid him the necessary expenses. When complainants failed to leave for
Saudi Arabia, they verified with the POEA whether Manungas was licensed to recruit
workers for abroad and subsequently learned that he was not. Thereafter, complaints for
estafa and llegal Recruitment on a Large Scale were filed against Manungas. On the
other hand, accused-appellant maintained that he was the operations manager of the ZG
Recruitment and Placement Agency, a duly licensed recruitment agency.
On the other hand, Manungas contended that the job order for the janitorial services was
awarded to Express Placement Agency instead of ZG Recruitment and Placement agency.
Thereafter, accused-appellant transferred complainants' application for overseas
employment to Nora Cunanan of Express Placement Agency. Accused-appellant also
turned over the fees paid by the complainants to Nora Cunanan as evidenced by the
receipts.
Accused-appellant maintains that he did not make false representations to the
complainants when he requited the latter for employment abroad as he had told
complainants that he is only an employee of a licensed recruitment agency in Manila. He
further claims that he was not motivated by any deceitful intentions and had not caused
any damage to the complainants because the amounts of money given to him by the latter
were actually spent for their medical tests and other documents necessary for their
overseas employment.
Issues:
Whether or not Manungas is guilty of illegal recruitment.
Held:
Yes. In the instant case, Manungas told complainants to submit to him the necessary documents
for the processing of their employment in Saudi Arabia. Thereafter, he collected from each of the
complainants payment for their respective passport, training fee, placement fee, medical tests and
other sundry expenses which unquestionably constitutes acts of recruitment within the meaning
of the law. Besides, there is illegal recruitment when one gives the impression of his ability to
send a worker abroad and there is evidence that accused had represented to the complainants that
he could send them abroad as janitors in Saudi Arabia. And because of his representation,
complainants gave their hard-earned money to accused-appellant in consideration of the same
representation.
Thus accused-appellant is guilty of the crimes of Estafa and Illegal Recruitment. Under Article
38 of the Labor Code, as amended, the crime of illegal recruitment is qualified when the same is
committed against three (3) or more persons.
A person who violates any of the provisions under Article 13(b) and Article 34 of the Labor
Code can be charged and convicted separately of illegal recruitment and estafa [Revised Penal
Code, Article 315, 2(a)] because illegal recruitment is a malum prohibitum where the criminal
intent of the accused is not necessary for a conviction while estafa is a malum in se where
criminal intent of the accused is necessary for a conviction.