SINGER SEWING MACHINE COMPANY VS.

DRILON (Secretary of Labor) and Singer Machine

Collectors Union Baguio (SIMACUB) (1991)
Those who are not considered employees of a
company, such as independent contractors, are not
entitled to the constitutional right to join or form a
labor organization for purposes of collective
bargaining.
FACTS: SIMACUB filed a petition for direct
certification as the sole and exclusive bargaining
agent of all collectors of Singer Sewing Machine.
Petitioner opposed because the union members are
not employees but independent contractors as
evidenced by the collection agency agreement which
they signed.
The med-arbiter found an employer-employee
relationship to exist between the union members and
the petitioner. This was likewise affirmed by the
Secretary of Labor.
ISSUE: WON an EER exists between petitioner and
respondent.
HELD: The SC calls the importance for the
application of the control test, which if not satisfied,
would lead to the conclusion that no employee-
employer relationship exists. If the union members
are not employees, no right to organize for the
purpose of bargaining or as a bargaining agent
cannot be recognized.
The following elements are generally considered in
the determination of the relationship: the selection
and engagement of the employee, payment of wages,
power of dismissal and the power to control the
employees conduct which is the most important
element.
Under the collection agency agreement, the collection
agents were paid their compensation for their services
on a commission basis, particularly six percent of all
collections made by the collecting agent. From here, it
is clear that the agreement did not fix an amount for
wages nor the required number working hours the
collecting agents must put it. Thus, the Court held that
collecting agents that are paid on a commission basis
are considered independent contractors and not
employees of the company. In such a situation, the
company does not pass the control test because the
company has no control over the collecting agents
performance of collection services. On the contrary,
the company only has control over the amount of
collections made, which is a result of his work. In
order for the company to have control over the
commission agents, the company should not only
have control over the end or result to be achieved but
also over the means and methods in achieving the
end.
The plain language of the agreement reveals that the
designation as collection agent does not create an
employment relationship and that the applicant is to
be considered at all times as an independent
contractor.
The court finds that since private respondents are not
employees of the company, they are not entitled to
the constitutional right to form or join a labor
organization for the purposes of collective bargaining.
There is no constitutional and legal basis for their
union to be granted their petition for direct
certification.

ICAWAT VS. NLRC
Facts: Private respondent started working with
petitioners as driver of their passenger jeepneys.
On December 27, 1994, private respondent lost his
drivers license. To secure a new one, he sought
petitioners permission to go on vacation leave. After
obtaining his license, private respondent reported for
work but was informed by petitioners that another
driver had already taken his place. Aggrieved, private
respondent, on January 27, 1995, filed a complaint for
illegal dismissal against herein petitioners before
(DOLE) praying that he be reinstated and be paid his
13th month pay and service incentive leave credits.
Issue: WON private respondent was illegally
dismissed on the ground of abandonment.
Held:To constitute abandonment, two elements must
concur: (1) the failure to report for work or absence
without valid or justifiable reason, and (2) a clear
intention to sever the employer-employee
relationship, with the second element as the more
determinative factor and being manifested by some
overt acts. Mere absence is not sufficient. To prove
abandonment, the employer must show that the
employee deliberately and unjustifiably refused to
resume his employment without any intention of
returning.
Private respondent, after his vacation leave,
immediately reported back for work but was not
allowed by the petitioners on the ground that he was
already replaced by regular drivers. After he was
notified of his termination, private respondent lost no
time in filing the case for illegal dismissal against
petitioners. He cannot, therefore, by any reasoning,
be said to have abandoned his work or had no
intention of going back to work. It would be illogical for
him to have left his job and later on file said complain.
We have consistently ruled that a charge of
abandonment is totally inconsistent with the
immediate filing of a complaint for illegal dismissal.
But even assuming that private respondent
abandoned his work, petitioners should have served
him with a notice of termination on the ground of
abandonment.
Hence, before termination of employment can be
legally effected, the employer must furnish the worker
with two (2) written notices, i.e. a notice which
apprises the employee of the particular acts or
omissions for which his dismissal is sought, and the
subsequent notice which informs the employee of the
employers decision to dismiss him.
Petitioners failed to give private respondent written
notice of his termination on the ground of
abandonment. Failure to do so makes the termination
illegal.
G.R. No. 129076 November 25, 1998 ORLANDO
FARMS GROWERS ASSOCIATION/GLICERIO
AOVER vs NLRC
FACTS: Orlando Farms Growers Association is an
association of landowners engaged in the production
of export quality bananas established for the sole
purpose of dealing collectively on matters concerning
technical services, canal maintenance, irrigation and
pest control, among others. Respondents were hired
as farm workers by several member-landowners but;
nonetheless, were made to perform functions as
packers and harvesters in the plantation of petitioner
association. Respondents were dismissed on various
dates.
Petitioner alleged that respondents were not its
employees and but of the individual landowners which
fact can easily be deduced from the payments made
by the latter of respondent's SSS contributions.
Moreover, it could have never exercised the power of
control over them with regard to the manner and
method by which the work was to be accomplished,
which authority remain vested with the landowners
despite becoming members thereof.
ISSUE(S): (1) Whether or not an unregistered
association may be an employer independent of the
respective members it represents.
(2) Whether or not EER exists.
HELD: YES. An employer is any person acting in the
interest of an employer, directly or indirectly. The law
does not require an employer to be registered before
he may come within the purview of the Labor Code,
consistent with the established rule in statutory
construction that when the law does not distinguish,
we should not distinguish. To do otherwise would
bring about a situation whereby employees are
denied, not only redress of their grievances, but, more
importantly, the protection and benefits accorded to
them by law if their employer happens to be an
unregistered association.
The following are generally considered in the
determination of the existence of an employer-
employee relationship; (1) the manner of selection
and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and
(4) the presence or absence of the power of control;
of these four, the last one being the most important.
The following circumstances which support the
existence of employer-employee relations cannot be
denied. During the subsistence of the association,
several circulars and memoranda were issued
concerning, among other things, absences without
formal request, loitering in the work area and
disciplinary measures with which every worker is
enjoined to comply. Furthermore, the employees were
issued identification cards. While the original purpose
of the formation of the association was merely to
provide the landowners a unified voice in dealing with
Stanfilco, petitioner however exceeded its avowed
intentions when its subsequent actions reenforced
only too clearly its admitted role of employer.
Filipinas Broadcasting Network Inc. Vs. NLRC &
Simeon Mapa Jr.
287 SCRA 348
Facts: Simeon "Jun" Mapa Jr., a volunteer reporter of
the DZRC, declaring to be an employee of the
petitioner filed a complaint against Filipinas
Broadcasting-DZRC on August 1992 claiming the
payment of salaries, premium pay, holiday pay as well
as 13th month pay for the period of February 28,
1990- January 16, 1992. Labor Arbiter Emeterio
Ranola dismissed the complaint for lack of merit,
finding no employer-employee relationship existed
between Mapa and DZRC during the period of March
11, 1990- February 16, 1992.
NLRC set aside the labor arbiters finding and ruled
hold that there was an employer-employee relation.
Issue: WON Mapa was an employee of FBN-DZRC
for the period March 11, 1990- February 16, 1992
Held: No. The following are generally considered in
determination of the existence of an employer-
employee relationship. (1) the manner of selection
and engagement (2) the payment of wages (3) the
presence or absence of dismissal; and (4) the
presence or absence of control; of these four, the last
one is the most important. There could be no
employer-employee where element of control is
absent.
FBN-DZRC did not act on the application of Mapa for
employment as a radio reporter because Mapa
admittedly failed to present a clearance from his
former employer. Nevertheless, Mapa "volunteered"
his service, knowing that he would not be paid wages,
and that he had to rely on financial sponsorship of
business establishment that hw would advertise in his
reports. In other words, Mapa willingly acted as a
volunteer reporter, fully cognizant that he was not an
employee and that he would not receive any
compensation directly from FBN-DZRC, but only from
his own advertising sponsor. Indeed, Mapa admitted
in his bio-data sheet,in which he acknowledge that he
was not an employee.
No one in the DZRC had the power to regulate or
control Mapa's activities or inputs. He was not subject
to any supervision by FBN-DZRC or its officials.
DZRC exercise no editorial rights under his reports.
He had no fix day or time for making his reports; in
fact he was not required to report anything at all.
Whether he would air anything depends entirely on
him and his convenience.
ENCYCLOPEDIA BRITANNICA (Philippines), INC.
vs. NLRC
Facts: Limjoco was a Sales Division of Encyclopedia
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 petitioners name, goodwill and logo. It was
agreed that office expenses would be deducted from
Limjocos 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
employees 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.

Sonza vs ABS-CBN [G.R. No. 138051. June 10,
2004]
Facts: In May 1994 ,ABS-CBN Broadcasting
Corporation (ABS-CBN), represented by its
corporate officers signed an Agreement with the Mel
and Jay Management and Development Corporation
(MJMDC), represented by SONZA, as President and
General Manager, and Carmela Tiangco as EVP and
Treasurer. MJMDC agreed to provide SONZAs
services exclusively to ABS-CBN as talent for radio
and television. ABS-CBN agreed to pay monthly
talent fee for SONZAs services. On 1 April 1996,
SONZA wrote a letter to ABS-CBN notice of
rescission of said Agreement at their instance
effective as of date due to the Mr. Sonzas irrevocably
resignation in view of recent events concerning his
programs and career. On 30 April 1996, SONZA filed
a complaint against ABS-CBN before DOLE that
ABS-CBN did not pay his salaries, separation pay and
other benefits stipulated in the agreement. ABS-CBN
filed a Motion to Dismiss on the ground that no
employer-employee relationship existed between the
parties. Meanwhile, ABS-CBN continued to remit
SONZAs monthly talent fees and other payments.
Labor Arbiter dismissed the complaint and found ther
is no employee-employer relationship (EER) and
ruled that complainant was engaged by respondent
by reason of his peculiar skills and talent as a TV host
and a radio broadcaster. Unlike an ordinary
employee, he was free to perform the services he
undertook to render in accordance with his own style.
Whatever benefits complainant enjoyed arose from
specific agreement by the parties and not by reason
of employer-employee relationship. The fact that
complainant was made subject to respondents Rules
and Regulations, likewise, does not detract from the
absence of employer-employee relationship. The
NLRC affirmed the Labor Arbiters decision and CA
dismissed the action for certiorari. Should there be
any complaint, it does not arise from an EER but from
a breach of contract in which regular courts have
jurisdiction. Hence this petition.

Issue: Whether there was EER between the parties.

Ruling: No. Case law has consistently held that the
elements of an employer-employee relationship are:
(a) the selection and engagement of the employee;
SONZA contends that the discretion used by
respondent in specifically selecting and hiring
complainant over other broadcasters of possibly
similar experience and qualification as complainant
belies respondents claim of independent
contractorship.
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.
(b) the payment of wages;
SONZA asserts that this mode of fee payment shows
that he was an employee of ABS-CBN. SONZA also
points out that ABS-CBN granted him benefits and
privileges which he would not have enjoyed if he
were truly the subject of a valid job contract.
All the talent fees and benefits paid to SONZA were
the result of negotiations that led to the Agreement. If
SONZA were ABS-CBNs employee, there would be
no need for the parties to stipulate on benefits such
as SSS, Medicare, x x x and 13th month pay which
the law automatically incorporates into every
employer-employee contract. Whatever benefits
SONZA enjoyed arose from contract and not because
of an employer-employee relationship.
(c) the power of dismissal;
For violation of any provision of the Agreement, either
party may terminate their relationship. SONZA failed
to show that ABS-CBN could terminate his services
on grounds other than breach of contract, such as
retrenchment to prevent losses as provided under
labor laws.
During the life of the Agreement, ABS-CBN agreed to
pay SONZAs talent fees as long as AGENT and Jay
Sonza shall faithfully and completely perform each
condition of this Agreement. Even if it suffered
severe business losses, ABS-CBN could not retrench
SONZA because ABS-CBN remained obligated to
pay SONZAs talent fees during the life of the
Agreement. This circumstance indicates an
independent contractual relationship between SONZA
and ABS-CBN.
(d) the employers 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.
ABS-CBN engaged SONZAs services specifically to
co-host the Mel & Jay programs. ABS-CBN did not
assign any other work to SONZA. 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-CBNs
control. SONZA did not have to render eight hours of
work per day. The Agreement required SONZA to
attend only rehearsals and tapings of the shows, as
well as pre- and post-production staff meetings. ABS-
CBN could not dictate the contents of SONZAs script.
However, the Agreement prohibited SONZA from
criticizing in his shows ABS-CBN or its interests. The
clear implication is that SONZA had a free hand on
what to say or discuss in his shows provided he did
not attack ABS-CBN or its interests.
Although ABS-CBN did have the option not to
broadcast SONZAs show, ABS-CBN was still
obligated to pay SONZAs talent fees. Thus, even if
ABS-CBN was completely dissatisfied with the means
and methods of SONZAs performance of his work, or
even with the quality or product of his work, ABS-CBN
could not dismiss or even discipline SONZA. All that
ABS-CBN could do is not to broadcast SONZAs
show but ABS-CBN must still pay his talent fees in
full.
The Agreement does not require SONZA to comply
with the rules and standards of performance
prescribed for employees of ABS-CBN. The code of
conduct imposed on SONZA under the Agreement
refers to the Television and Radio Code of the
Kapisanan ng mga Broadcaster sa Pilipinas (KBP),
which has been adopted by the COMPANY (ABS-
CBN) as its Code of Ethics. The KBP code applies to
broadcasters, not to employees of radio and television
stations. Broadcasters are not necessarily employees
of radio and television stations. Clearly, the rules and
standards of performance referred to in the
Agreement are those applicable to talents and not to
employees of ABS-CBN.
Jose Mel Bernante v. PBA et al
Facts: Complainants (Jose Mel Bernarte and Renato
Guevarra) aver that they were invited to join the PBA
as referees and were made to sign contracts on a
year-to-year basis.
Bernarte was not made to sign a contract during the
1st conference of the All-Filipino Cup. It was only
during the 2nd conference when he was made to sign
a one and a half month contract.
On January 15, 2004, Bernarte received a letter from
the Office of the 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 him who was awarded Referee
of the year in 2003. He felt that the dismissal was
caused by his refusal to fix a game upon order of
Ernie De Leon.
On the other hand, complainant Guevarra alleges that
he was invited to join the PBA pool of referees. 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 to Guevarra expressing dissatisfaction
over his questioning on the assignment of referees
officiating out-of-town games. Beginning February
2004, he was no longer made to sign a contract.
Respondents aver that complainants were not illegally
dismissed because they were not employees of the
PBA. Their respective contracts of retainer were
simply not renewed. PBA had the prerogative of
whether or not to renew their contracts, which they
knew were fixed.
Issue: whether petitioner is an employee of
respondents, which in turn determines whether
petitioner was illegally dismissed.
Ruling: petitioners are not employees of the
respondent, for the latter doesnt exercise control over
the former.
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.
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 SSS, 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
POLYFOAM RGC v. EDGARDO CONCEPCION
(employee-employer relationship)
G.R. 172349, June 13, 2012

TOPIC: Petitioner filed a petition for review under
Rule 45 of the ROC due to the judgement rendered in
favor of the respondent (Mr. Concepcion) assailing
the affirmation of CA for paying the money claims of
the Respondent due to illegal dismissal and
reinstatement to the job.


FACTS: Respondent filed a complaint for illegal
dismissal, non-payment of wages, premium pay for
rest day, separation pay, service incentive leave pay,
13
th
month pay, damages and attorneys fee against
Polyfoam and Ms. Cheng (as petitioners), when the
latter refused him to report for work despite of his
counsels requests for re-admission.

Polyfoam denied the respondent as their employee.
On 24
th
of May 2000, Gramaje filed a motion for
intervention claiming to be her employer which was
granted by the Labor Arbiter. Trial ensued, she
argued, however, that respondent was not dismissed
from employment, but rather, he simply stopped
reporting for work. On 14
th
December 2001, the
Labor Arbiter rendered its decision in favor of the
respondent finding Polyfoam-RGC and Gramaje
solidarily liable for respondents money claims.

On appeal of the petitioners with the decision made
by Labor Arbiter, the NLRC modified the LA decision
by exonerating Polyfoam from liability for
respondents money claim and ordered that only
Gramaje who has to pay for respondents money
claims.

Aggrieved, respondent elevated the case to the Court
of Appeals (CA) for special civil action for certiorari
under Rule 65 of the ROC on the grounds that
Polyfoam-RGC was his employer and he was
employed for almost six years as all-around
employees. The following issues are to be
determined on this case, to wit:

Issues:
(1) whether or not Gramaje is an
independent job contractor;
(2) whether or not an employer-employee
relationship exists between Polyfoam and
respondent;
and (3) whether or not respondent was
illegally dismissed from employment.

HOLD/Ruling:

On the first issue - Gramaje is not a legitimate job
contractor but only a "labor-only" contractor. 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 because of the
following:
(1) Gramaje failed to present its Audited
Financial Statement that would have shown
its financial standing and ownership of
equipment, machineries, and tools
necessary to run her own business;
(2) Gramaje failed to present a single copy of
the purported contract with Polyfoam as to
the packaging aspect of the latters business;
(3) Gramajes licenses supposedly issued by
the DOLE appeared to be spurious.
(4) Gramaje was not registered with DOLE
as a private recruitment agency; and
(5) Gramaje presented only one (1) SSS
Quarterly Collection List whose authenticity
is doubtful.
31


On the second issue Yes, respondent is an
employee of the Polyfoam, and thereby both are
likewise proven having an employee-employer
relationships. While it is true that petitioners
submitted the Affidavit of Polyfoams supervisor Victor
Abadia, claiming that the latter did not exercise
supervision over respondent because the latter was
not Polyfoams but Gramajes employee, said Affidavit
is insufficient to prove such claim. Petitioners should
have presented the person who they claim to have
exercised supervision over respondent and their
alleged other employees assigned to Polyfoam. It
was never established that Gramaje took entire
charge, control and supervision of the work and
service agreed upon. And as aptly observed by the
CA, "it is likewise highly unusual and suspect as to
the absence of a written contract specifying the
performance of a specified service, the nature and
extent of the service or work to be done and the term
and duration of the relationship." The CA noted that
petitioners are represented by only one law firm
though they made it appear that they were
represented by different lawyers.

These circumstances, says the CA, give rise to the
suspicion that the creation or establishment of
Gramaje was just a scheme designed to evade the
obligation inherent in an employer-employee
relationship. Thus, respondent was indeed Polyfoams
employee. This relationship was specifically shown by
Polyfoams exercise of supervision over the work of
respondent; the furnishing of a copy of Polyfoams
"Mga Alituntunin at Karampatang Parusa" to serve as
respondents guide in the performance of his duty; the
length of time that respondent had performed
activities necessary for Polyfoams business; and
Polyfoams act of directly firing respondent. Finally,
the appellate court affirmed the LAs findings of illegal
dismissal as respondent was dismissed from the
service without cause and due process.
Consequently, separation pay in lieu of reinstatement
was awarded. The CA quoted with approval the LA
conclusions on the award of respondents other
money claims.

On the Third issue Respondent was found illegal
dismissed from its job, when he reported for work on
January 14, 2000, his time card was suddenly taken
off the rack His supervisor later informed him that
Polyfoams management decided to dismiss him due
to infraction of company rule. In short, respondent
insisted that he was dismissed from employment
without just or lawful cause and without due process.
Polyfoam did not offer any explanation of such
dismissal. It, instead, explained that respondents
real employer is Gramaje. Gramaje, on the other,
denied the claim of illegal dismissal. She shifted the
blame on respondent claiming that the latter in fact
abandoned his work. Which the LA gave credence to
respondents narration and it was affirmed by CA.

Therefore, Polyfoam and respondent Concepcion
have an employee-employer relationship.

AFP MBAI VS. NLRC
FACTS: Private respondent Eutiquio Bustamante had
been an insurance underwriter of petitioner AFP
Mutual Benefit Association, Inc. since 1975. There is
a Sales Agent's Agreement between them. In 1989,
petitioner dismissed private respondent for
misrepresentation and for simultaneously selling
insurance for another life insurance company in
violation of said agreement. Private respondent wrote
petitioner seeking the release of his commissions for
said 24 months, discovering the amount of
P354,796.09 as his total commission. However, he
was paid only the amount of P35,000.00. The Agent
filed a case about the matter, but the petitioner denied
the contention based on absence of employee-
employer relationship.
ISSUE: Whether or not there exist an employee-
employer relationship between the said parties?
RULING: NO. Time and again, the Court has applied
the "four-fold" test in determining the existence of
employer-employee relationship.
Although petitioner could have, theoretically,
disapproved any of private respondent's transactions,
what could be disapproved was only the result of the
work, and not the means by which it was
accomplished.The "control" which the above factors
indicate did not sum up to the power to control private
respondent's conduct in and mode of soliciting
insurance. On the contrary, they clearly indicate that
the juridical element of control had been absent in this
situation. Thus, the Court is constrained to rule that
no employment relationship had ever existed between
the parties.
PHILIPPINE AIRLINES vs. NLRC et al
FACTS: Private respondent Dr. Fabros was
employed as flight surgeon at petitioner company. He
was assigned at the PAL Medical Clinic and was on
duty from 4:00 in the afternoon until 12:00 midnight.
On Feb.17, 1994, at around 7:00 in the evening, Dr.
FAbros left the clinic to have his dinner at his
residence, which was abou t5-minute drive away. A
few minutes later, the clinic received an emergency
call from the PAL Cargo Services. One of its
employeeshad suffered a heart attack. The nurse on
duty, Mr. Eusebio, called private respondent at home
to inform him of the emergency. The patient arrived at
the clinic at 7:50 in the evening and Mr. Eusebio
immediately rushed him to the hospital. When Dr.
Fabros reached the clinic at around 7:51 in the
evening, Mr. Eusebio had already left with the patient
to the hospital. The patient died the following day.
Upon learning about the incident, PAL Medical
Director ordered the Chief Flight Surgeon to conduct
an investigation. In his explanation, Dr. Fabros
asserted that he was entitled to a thirty-minute meal
break; that he immediately left his residence upon
being informed by Mr. Eusebio about the emergency
and he arrived at the clinic a few minutes later; that
Mr. Eusebio panicked and brought the patient to the
hospital without waiting for him.
Finding private respondents explanation
unacceptable, the management charged private
respondent with abandonment of post while on duty.
He denied that he abandoned his post on February
17, 1994. He said that he only left the clinic to have
his dinner at home. In fact, he returned to the clinic at
7:51 in the evening upon being informed of the
emergency.
After evaluating the charge as well as the answer of
private respondent, he was given a suspension for
three months effective December 16, 1994.
Private respondent filed a complaint for illegal
suspension against petitioner.
On July 16, 1996, the Labor Arbiter rendered a
decision declaring the suspension of private
respondent illegal. It also ordered petitioner to pay
private respondent the amount equivalent to all the
benefits he should have received during his period of
suspension plus P500,000.00 moral damages.
Petitioner appealed to the NLRC.
The NLRC, however, dismissed the appeal after
finding that the decision of the Labor Arbiter is
supported by the facts on record and the law on the
matter. The NLRC likewise denied petitioners motion
for reconsideration.
ISSUE: WON the nullifying of the 3-month suspension
by the NLRC erroneous.
HELD: No. The legality of private respondents
suspension: Dr. Fabros left the clinic that night only to
have his dinner at his house, which was only a few
minutes drive away from the clinic. His whereabouts
were known to the nurse on duty so that he could be
easily reached in case of emergency. Upon being
informed of Mr. Acostas condition, private respondent
immediately left his home and returned to the clinic.
These facts belie petitioners claim of abandonment.
Petitioner argues that being a full-time employee,
private respondent is obliged to stay in the company
premises for not less than eight (8) hours. Hence, he
may not leave the company premises during such
time, even to take his meals. Art. 83 and 85 of the
Labor Code read: Art. 83. Normal hours of work.
The normal hours of work of any employee shall not
exceed eight (8) hours a day. Health personnel in
cities and municipalities with a population of at least
one million (1,000,000) or in hospitals and clinics with
a bed capacity of at least one hundred (100) shall
hold regular office hours for eight (8) hours a day, for
five (5) days a week, exclusive of time for meals,
except where the exigencies of the service require
that such personnel work for six (6) days or forty-eight
(48) hours, in which case they shall be entitled to an
additional compensation of at least thirty per cent
(30%) of their regular wage for work on the sixth day.
For purposes of this Article, health personnel shall
include: resident physicians, nurses, nutritionists,
dieticians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic
personnel.
Art. 85. Meal periods. Subject to such regulations
as the Secretary of Labor may prescribe, it shall be
the duty of every employer to give his employees not
less than sixty (60) minutes time-off for their regular
meals.
Sec. 7, Rule I, Book III of the Omnibus Rules
Implementing the Labor Code further states: Sec. 7.
Meal and Rest Periods. Every employer shall
give his employees, regardless of sex, not less
than one (1) hour time-off for regular meals,
except in the following cases when a meal period
of not less than twenty (20) minutes may be given
by the employer provided that such shorter meal
period is credited as compensable hours worked
of the employee; (a) Where the work is non-
manual work in nature or does not involve
strenuous physical exertion; (b) Where the
establishment regularly operates not less than
sixteen hours a day; (c) In cases of actual or
impending emergencies or there is urgent work to
be performed on machineries, equipment or
installations to avoid serious loss which the
employer would otherwise suffer; and (d) Where
the work is necessary to prevent serious loss of
perishable goods. Rest periods or coffee breaks
running from five (5) to twenty (20) minutes shall
be considered as compensable working time.
Thus, the eight-hour work period does not include the
meal break. Nowhere in the law may it be inferred that
employees must take their meals within the company
premises. Employees are not prohibited from going
out of the premises as long as they return to their
posts on time. Private respondents act, therefore, of
going home to take his dinner does not constitute
abandonment.
Phil Graphic Arts vs. NLRC
FACTS: The petitioner corporation was forced by
economic circumstances to require its workers to go
on mandatory vacation leave in batches of seven or
nine for periods ranging from 15, 30, to 45 days. The
workers were paid while on leave but the pay was
charged against their respective earned leaves.
As a result, the private respondents filed complaints
for unfair labor practice and discrimination.
ISSUE: Whether or not the forced vacation leave
without pay is unfair labor practice.
HELD: The Court is convinced from the records now
before it, that there was no unfair labor practice. As
found by the NLRC, the private respondents
themselves never questioned the existence of an
economic crisis but, in fact, admitted its existence.
There is basis for the petitioner's contentions that the
reduction of work schedule was temporary, that it was
taken only after notice and consultations with the
workers and supervisors, that a consensus was
reached on how to deal with deteriorating economic
conditions and reduced sales and that the temporary
reduction of working days was a more humane
solution instead of a retrenchment and reduction of
personnel. The petitioner further points out that this is
in consonance with the collective bargaining
agreement between the employer and its employees.
The decision to resort to forced leaves was, under the
circumstances, a management prerogative. The
workers' claim of non-resort to the grievance
machinery is negated by their failure to initiate steps
for its employment.
The statutory law on grievance procedure provides
that: ART. 261. Grievance machinery. Whenever a
grievance arises from the interpretation or
implementation of a collective agreement, including
disciplinary actions imposed on members of the
bargaining unit, the employer and the bargaining
representative shall meet to adjust the grievance.
Where the grievance procedure as provided herein
does not apply, grievances shall be subject to
negotiation, conciliation or arbitration as provided
elsewhere in this Code .
FERMIN REOTAN, plaintiff-appellee,
vs.
NATIONAL RICE AND CORN
CORPORATION, defendant-appellant.
Facts: Plaintiff-appellees are guard- night watchmen
for the National Rice and Corn Corporation in NARIC
branches of Naga, Camarines Sur, Tobaco, Albay
and Daet, Camarines Norte. They appealed to the
court to demand NARIC to pay for their overtime and
night differentials. NARIC refused to pay them these
even after a decision in the guards favor. They
contended that NARIC as a government- owned
corporation is an exception to such payment as they
are subject to the Civil Service law and that such
payments were not allowed by a board resolution and
upon order of the President-manager except in
special cases. The defendant also contended that
they are exempted from the Eight hour labor law
which would have subjected them to give overtime
pay.
Issue: Whether or not NARIC should give overtime
pay to Appellants not withstanding its nature as a
government-owned and controlled corporation subject
to the Civil Service Law.
Ruling: Yes. The Civil Service Law section 10,
Executive Order No. 350, Series of 1951), providing
that officers and employees are subject to the Civil
Service Law ... refer to the fixed tenure of office of its
officers and employees who may be removed only for
cause as provided by law
A government-owned corporation run and operated
like any ordinary corporation which may realize profits
and incur losses and the jurisdiction of the Court of
Industrial Relations in labor disputes involving
government-owned corporations is recognized.
Moreover, it is a well-established doctrine that when
the Government engages in business, it abdicates
part of its sovereign prerogatives and descends to the
level of a citizen, and thereby subjects itself to the
laws and regulations governing the relation of labor
and management. Additional compensation for
overtime, Sundays and legal holidays' work, and for
night time work, have been granted to labor.
It appearing that Fermin Reotan had been on leave of
absence for 36 days and that Silvestre Reotan and
Praxedes Balane had been absent for one (1) day
and four (4) days, respectively, and that these
absences had not been considered in computing the
overtime compensation due said plaintiffs, it is clear
that the corresponding deductions should be made
therefrom.
Held: With this modification, the decision appealed
from is hereby affirmed, therefore, in all other
respects, and let these cases be remanded to the
lower court for determination of the amount of said
deductions, without special pronouncement as to the
costs of this instance. It is so ordered.
VINOYA V NLRC
FACTS: Petitioner Vinoya was hired by RFC as sales
representative. He avers that he was transferred by
RFC to PMCI, an agency which provides RFC with
additional contractual workers. In PMCI, he was
reassigned to RFC as sales representative and then
later informed by the personnel manager of RFC that
his services were terminated. RFC maintains that no
employer-employee relationship existed between
petitioner and itself. Petitioner filed complaint for
illegal dismissal. RFC alleges that PMCI is an
independent contractor as the latter is a highly
capitalized venture.

ISSUE: Whether or not petitioner was an employee of
RFC and thereby, illegally dismissed.

HELD: Yes. PMCI was a labor-only contractor.
Although the Neri doctrine stated that it was enough
that a contractor had substantial capital to show it was
an independent contractor, the case of Fuji Xerox
clarified the doctrine stating that an independent
business must undertake the performance of the
contract according to its own manner and method free
from the control of the principal.

In this case, PMCI did not even have substantial
capitalization as only a small amount of its authorized
capital stock was actually paid-in. Also, PMCI did not
carry on an independent business or undertake the
performance of its contract according to its own
manner and method. Furthermore, PMCI was not
engaged to perform a specific and special job or
service, which is one of the strong indicators that is an
independent contractor. Lastly, in labor-only
contracting, the employees supplied by the contractor
perform activities, which are directly related to the
main business of its principal.

It is clear that in this case, the work of petitioner as
sales representative was directly related to the
business of RFC. Since due to petitioners length of
service, he attained the status of regular employee
thus cannot be terminated without just or valid cause.
RFC failed to prove that his dismissal was for cause
and that he was afforded procedural due process.
Petitioner is thus entitled to reinstatement plus full
backwages from his dismissal up to actual
reinstatement.

GARDEN OF MEMORIES PARK and LIFE PLAN,
INC. and PAULINA T. REQUIO, vs.
NATIONAL LABOR RELATIONS COMMISSION,
SECOND DIVISION, LABOR ARBITER FELIPE T.
GARDUQUE II and HILARIA CRUZ
G.R. 160278, February 8, 2012.

TOPIC: A petition for review under Rule 45 of the
ROC seeking nullification on the resolution of the CA
affirming the decision of NLRC in finding the petitioner
as the employer of the respondent and ordered liable
for the money claims of respondent Cruz.

FACTS: Petitioner is engaged in business of
operating a memorial park in Pateros, MM, and selling
memorial plan and services, Respondent, likewise, is
a worker in Garden of Memories Park from 1991 up to
Feb. 1998.

On March 13, 1998 Respondent filed a complaint of
illegal dismissal, underpayment of wages, non-
inclusion of SSS and so on against the petitioner
before the DOLE. Petitioner denied the employment
of respondent, but likewise, impleaded Paulina T.
Requino as it was the service contractor and
employer of Cruz.

It was due to misunderstanding with a co-worker why
he was dismissed without due process and valid
cause. Both petitioner denied the fact that Cruz was
their employee either, and argued that respondent
has abandoned his work. Upon judgement of the LA,
it was declared that both petitioners are held jointly
and severally liable for the monetary claims of Cruz
and order payment.

Petitioners both appealed at NLRC but was denied
even on the MR due to lack of merit. They then
elevated the appeal at the CA but was also affirmed
the decision made by NLRC, hence this petition for
certiorari due to GAOD and Acted in Excess of
Jurisdiction for the following issues, to wit:




ISSUES:

1. WON Petitioner Requino was engaged in
Labor-only contracting;
2. WON there exists an employee-employer
relationship between Gardens and
respondent Cruz; and
3. WON respondent Cruz has abandon his
work at the Gardens.

RULING/HELD:

First Issue: Sec. 5 of Rule VIII-A of the Omnibus
Rule implementing the Labor Codes, provides that
labor 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 the elements of
determinating this are present, 1) capitalization
requirements and 2) the power of control over to his
employee which Requino are wanting. The Courts
find this absent in Requinos favor, hence, hes only
doing as a mere agent of the Garden of Memories
and not as an employer of respondent Cruz, which
was supported by Service Contract Agreement
between both the petitioners.

Second Issue: Consequently, due to the findings
made by the court upon declaring that Requino was
only doing as agent of the Gardens. As such,
Gardens is the principal employer of the respondent
Cruz, he was hired as a Utility Worker tasked to
clean, sweep and water the lawn of the memorial
park. She performed activities which were necessary
or desirable to its principal trade or business. Thus,
she was a regular employee of Gardens of Memories
and cannot be dismissed except for just and
authorized causes when respondent Cruz did not
abandon her work but was illegally dismissed as
described on the Third Issue. Therefore, the petition
is denied and the assailed decision/resolutions of the
CA were affirmed by the Supreme Court.

Caltex Regular Employees vs Caltex Phil.
Facts: Caltex Regular Employees (Union) and Caltex
Phil. (Caltex) entered into a Collective Bargaining
Agreement ( CBA ) in conformity with the Labor Code.
Under the CBA, to be considered as overtime work,
the hours worked must be in excess of and in addition
to the 8 hours work during the prescribed daily work
period, or the 40 hours worked during the regular
work week from Mon. - Fri. Caltex Union instituted a
complaint for unfair labor practice against Caltex
Phil. alleging violations of the provisions of the CBA
for non-payment of overtime pay, with respect to
worked performed on 2/12 hours on a Saturday. In
turn, Caltex denied such allegations.

Issue: WON the allegations of Caltex Union is
meritorious?

Held: No. Hours of work on a Saturday do not, by that
fact alone, necessarily constitutes overtime work
compensable at premium rates of pay, contrary to
petitioner's assertion. These are normal or regular
work hours, compensable at a regular rates of pay, as
provided in the CBA; under that CBA, Saturday is not
a rest day or a "day off". It is only when an employee
has been required on a Saturday to render work in
excess of the 40 hours which constitutes the regular
work week that such employee may be considered as
performing overtime work on that Saturday.