Frances Claire R. Caceres Case No.

22
Labor I - Block A

ELIAS VILLUGA, ET. AL. vs. NLRC

G.R. No. L-75038 August 23, 1993

FACTS:

Petitioner Elias Villuga was employed as cutter in the tailoring shop owned by Rodolfo
Zapanta. Aside from being a cuter, he was also assigned in distributing work to the shops tailors
or sewers when both the manager and assistant manager is not around. The other petitioners were
employed as ironers, repairmen and sewers.

Due to his failure to properly notify his employer for not reporting to work due to illness,
Villuga was considered to have abandoned his work. When he reported to work after his
absence, he was refused admittance. In his complaint, he said that the refusal was brought about
by his active participation in the union organized by Zapantas tailors. He further claimed that he
was not paid overtime pay and other benefits. Other petitioners also claimed that they were also
dismissed from their employment because they have joined the Philippine Social Security Labor
Union (PSSLU). The Labor Arbiter dismissed the complaint for unfair labor practices, illegal
dismissal and other money claims except Villugas claim for 13th month pay for 3 years. This
was later affirmed by the NLRC on appeal. Commissioner Gatchalian rendered a dissenting
opinion which stated his preservation of the employer-employee relationship as argued by the
complainants before the Labor Arbiter and on appeal.

ISSUE:

1) Did the NLRC abuse its discretion when it ruled that Villuga falls within the category of
a managerial employee?

2) Were the petitioners dismissed from their work by reason of their union activities?

3) Did Villuga abandoned his work and, in consequence thereof, is justifiable to be

dismissed from service?

4) Were the petitioners, except for Villuga, hired by private respondents as contractors?

5) Is Villuga entitled to overtime pay and services for Sundays and Legal Holidays?

RULING:

1) Under Rule 1, Section 2(c), Book III of the Implementing Rules of Labor Code, to be a
member of a managerial staff, the following elements must concur: a) that his primary
duty consists of the performance of work directly related to management policies; b) that
he customarily and regularly exercises discretion and independent judgment in the
performance of his functions; c) that he regularly and directly assists in the management
of the establishment; and d) that he does not devote his twenty per cent of his time to
work other than those described above.

Applying these criteria to Villuga, it is known that his primary work is to cut or prepare
patterns for sewing, not to implement of the management policies. While it is true that he
distributes and assigns work to employees in the absence of the manager or assistant
manager, this task is occasional and not regular or customary. Villuga also does not
participate in policy-making; rather, the functions of his position involve execution of
approved and established policies.
Frances Claire R. Caceres Case No. 22
Labor I - Block A

2) No. There was no sufficient evidence to prove that Zapanta was aware of the petitioners
alleged union membership on February 22, 1978 for the notice of union existence in the
establishment with proposal for recognition and collective bargaining negotiation was
received by the management only on March 3, 1978. Self-serving allegations without
concrete proof that the private respondent knew of their membership in the union and
accordingly reacted against their membership do not suffice.

3) No. For abandonment to constitute a valid cause for dismissal, there must be a deliberate
and unjustified refusal of the employee to resume his employment. Mere absence is not
sufficient; it must be accompanied by overt acts. In the case of Villuga, the imposition of
a sanction is justified, but not dismissal for it is his first offense. He should be paid with a
separation pay for reinstatement can no longer be effected in view of the long passage of
time or because of the realities of the situation. He should not, however, be granted with
back wages considering that he was not entirely free from blame.

4) No. The petitioners are who were employed under private respondent have been
faithfully rendering their services and observing managements approved standards set
for their respective lines of work as well as customers specifications. By these, they
should be considered as employees, not independent contractors. For an employer-
employee relationship to exist, the following elements are generally considered: "(1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal and (4) the power to control the employee's conduct."

5) Yes. Although Villuga is not classified as a managerial employee, his exclusion from
claiming his benefits under Article 87 (overtime pay and premium pay for holiday and
rest work), Article 94 (holiday pay), and Article 95 (service incentive leave pay) of the
Labor Code is groundless. The fact that he is uniformly paid by the month does not
exclude him from the benefits of holiday pay. He should be therefore be paid in addition
to the 13th pay his overtime pay, holiday pay, premium pay for holiday and rest day, and
service incentive leave pay.