Labor Law Case Digest on Article 82 (September 12, 2023)

1. Sevilla vs Court of Appeals (GR No 44182-3, April 15, 1988)

• In 1960, Lina Sevilla and Tourist World Service, Inc. (TWS), a travel agency, entered into a lease contract, where both parties are held solidary liable.
• Sevilla was responsible for soliciting airline tickets and other travel arrangements. She was paid a commission on the tickets she sold, but she did not receive a salary.
• In 1962, TWS learned that Sevilla was also working for a rival travel agency, Philippine Travel Bureau.
• TWS terminated the lease contract with the landlord and padlocked the travel agency office.
• Sevilla filed a complaint against TWS, alleging that she was not an employee. She claimed that she had invested her own money in the travel agency and that she had a share in the profits.

WoN employer-employee relationship exists between Sevilla and TWS. NO.

Lina Sevilla, was not subject to control by the private respondent Tourist World Service, Inc., either as to the result of the enterprise or as to the means used in connection therewith. It is further admitted that Sevilla was not in the company's payroll. Unlike an employee then, who earns a fixed salary usually, she earned compensation in fluctuating amounts depending on her booking successes.

The fact that Sevilla had been designated 'branch manager" does not make her, ergo, Tourist World's employee. As we said, employment is determined by the right-of-control test and certain economic parameters. But titles are weak indicators.

It must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services "in representation or on behalf of another." In the case at bar, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc.

2.  Manila Golf & Country Club vs IAC, 237 SCRA 207

• Fermin Llamar was a caddy at Manila Golf and Country Club claiming for social security coverage.
• Manila Golf and Country Club argued that the caddies were not its employees, as they were paid by golf players themselves and were not subject to the club's control in how they performed their work.

WoN individuals providing caddying services at golf clubs are considered employees of those clubs and subject to Social Security System (SSS) coverage. NO.

Fermin Llamar, is not an employee of petitioner Manila Golf and Country Club and that petitioner is under no obligation to report him for compulsory coverage to the Social Security System. 

Petitioner has no means of compelling the presence of the caddies as they are not required to render a definite number of hours of work on a single day. Even the group rotation of caddies is not absolute because a player is at liberty to choose a caddy of his preference regardless of the caddy's order in the rotation.

It can happen that a caddy who has rendered services to a player on one day may still find sufficient time to work elsewhere. Under such circumstances, he may then leave the premises of petitioner and go to such other place of work that he wishes. Or a caddy who is on call for a particular day may deliberately absent himself if he has more profitable caddying, or another, engagement in some other place. These are things beyond petitioner's control and for which it imposes no direct sanctions on the caddies. 

3.  Dy Keh Beng vs International Labor and Marine Union of the Philippines, GR no L-32245, May 25, 1979

• Dy Keh Beng dismissed Carlos Solano and Ricardo Tudla for their union activities.
• The Court of Industrial Relations ordered to reinstate Solano and Tudla with back wages and seniority rights.
• Dy Keh Beng argues that the court erred in finding Solano and Tudla as employees as the control test was not met and that Solano worked on a piece (pakiaw) basis, staying the establishment only when there was work.

WoN an employee-employer relationship existed between Dy Keh Beng and Solano and Tudla. YES.

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 is engaged in the manufacture of baskets known as kaing, it is natural to expect that those working under Dy would have to observe, among others, 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, this Court agrees with the Hearing Examiner that circumstances must be construed to determine indeed if payment by the piece is just a method of compensation and does not define the essence of the relation. Units of time  and units of work are in establishments like respondent (sic) just yardsticks whereby to determine rate of compensation, to be applied whenever agreed upon. We cannot construe payment by the piece where work is done in such an establishment so as to put the worker completely at liberty to turn him out and take in another at pleasure.The so-called "pakyaw" system mentioned in this case as generally practiced in our country, is, in fact, a labor contract -between employers and employees, between capitalists and laborers.

4.  Zanotte Shoes vs NLRC, GR No. 100655, February 13, 1995

• The private respondents are workers of Zanotte Shoes under Leonardo Lorenzo. 
• They claimed that they worked a minimum of twelve hours daily, including Sundays and holidays as needed, and were compensated on a piece-work basis
• When they mentioned their request to join the Social Security System (SSS), it angered Lorenzo. When they demanded higher pay rates, they alleged that they were prevented from entering the work premises.
• Private respondents filed a complaint for illegal dismissal, monetary compensation, damages, and attorney's fees.
• Lorenza argued that their business operations were seasonal, and that he private respondents were hired on a purely contractual basis and were paid based on the rates agreed upon in their respective contracts.

WoN an employee-employer relationship existed between Zanotte Shoes and the private respondents. YES.

The work of private respondents is clearly related to, and in the pursuit of, the principal business activity of petitioners. 
The indicia used for determining the existence of an employer-employee relationship, all extant in the case at bench, include 
(a) the selection and engagement of the employee; 
(b) the payment of wages; 
(c) the power of dismissal; and 
(d) the employer's power to control the employee with respect to the result of the work to be done and to the means and methods by which the work to be done and to the means and methods by which the work is to be accomplished. 
The requirement, so herein posed as an issue, refers to the existence of the right to control and not necessarily to the actual exercise of the right. 

However, the fact of the matter is that petitioners have repeatedly indicated their willingness to accept private respondents but the latter have steadfastly refused the offer. For being without any clear legal basis, the award of separation pay must thus be set aside.

5.  Encyclopedia Britannica Inc vs NLRC, GR No. 87098, November 4, 1996

• Benjamin Limjoco was a Sales Division Manager for Encyclopaedia Britannica and was responsible for selling its products through sales representatives. He received commissions from their sales.
• Limjoco used Encyclopaedia Britannica's name, goodwill, and logo for his work. However, office expenses were deducted from his commissions. 
• Encyclopaedia Britannica was also informed about employee appointments, promotions, and transfers in Limjoco's district.
• Limjoco resigned in June 1974 to pursue his private business but filed a complaint against Encyclopaedia Britannica, claiming non-payment of separation pay, illegal deduction from his sales commissions, and other benefits.
• Encyclopaedia Britannica argued that Limjoco was not an employee but an independent dealer who received commissions based on sales and had control over his operations.

WoN an employee-employer relationship existed between Encyclopaedia Britannica and Benjamin Limjoco.  NO.

Private respondent was not an employee of the petitioner company. Private respondent 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. 

At the time he was connected with the petitioner company, private respondent was also a director and later the president of the Farmers' Rural Bank. Had he been an employee of the company, he could not be employed elsewhere and he would be required to devote full time for petitioner. If private respondent was indeed an employee, it was rather unusual for him to wait for more than a year from his separation from work before he decided to file his claims. 

In determining the existence of an employer-employee relationship the following elements must be present: 
1) selection and engagement of the employee; 
2) payment of wages; 
3) power of dismissal; and 
4) the power to control the employee's conduct. 

Of the above, control of employee's conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. 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 according to the result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee exists. In fine, there is nothing in the records to show or would "indicate that complainant was under the control of the petitioner" in respect of the means and methods in the performance of complainant's work.

6.  Angelina Francisco vs NLRC, Kasei Corp, GR No. 170087, August 31, 2006

• Angelina Francisco, was initially hired by Kasei Corporation in 1995 during its incorporation stage. 
• She held various positions within the company including Accountant, Corporate Secretary, and Acting Manager, among others.
• Despite being designated as Corporate Secretary, the petitioner did not have access to corporate documents or attend board meetings.
• In January 2001, the petitioner was replaced as Manager but assured that she would still be connected with the company.
• However, the petitioner's salary was reduced, and she was eventually informed that she was no longer connected with the company in October 2001.
• The petitioner filed an action for constructive dismissal, alleging that she was an employee of Kasei Corporation.
• Kasei Corporation contended that the petitioner was a technical consultant and not an employee, as she had control over her work and received professional fees.

WoN an employee-employer relationship existed between Kasei Corporation and the Angelina Francisco.  YES.

The Supreme Court applied two-tiered test involving: 

• (1) the putative employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished; and 
• (2) the underlying economic realities of the activity or relationship.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporation’s Technical Consultant. She reported for work regularly and served in various capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially the same job functions, that is, rendering accounting and tax services to the company and performing functions necessary and desirable for the proper operation of the corporation such as securing business permits and other licenses over an indefinite period of engagement.

Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social Security contributions from August 1, 1999 to December 18, 2000. The inclusion of her name in the on-line inquiry system of the SSS evinces the existence of an employer-employee relationship between petitioner and respondent corporation.

Based on the foregoing, there can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by the company for compensation, and is economically dependent upon respondent for her continued employment in that line of business. Her main job function involved accounting and tax services rendered to respondent corporation on a regular basis over an indefinite period of engagement. Respondent corporation hired and engaged petitioner for compensation, with the power to dismiss her for cause. More importantly, respondent corporation had the power to control petitioner with the means and methods by which the work is to be accomplished.

7. Insular Assurance Co, LTd vs NLRC, GR No 119930, March 12, 1998

• In 1992, INSULAR LIFE entered into an agency contract with Pantaleon de los Reyes, authorizing him to solicit applications for life insurance and annuities. 
• The contract contained a stipulation that no employer-employee relationship would be created between the parties, and de los Reyes would be free to exercise his judgment as to time, place, and means of soliciting insurance.
• De los Reyes was prohibited from working for any other life insurance company, and violation of this stipulation could result in the termination of the contract.
• In 1993, INSULAR LIFE and de los Reyes entered into another contract, appointing de los Reyes as an Acting Unit Manager. 
• The management contract stipulated that the relationship between the acting unit manager (de los Reyes) and the agents of his unit would be that of an independent contractor.
• On November 18, 1993, INSULAR LIFE terminated de los Reyes' services effective December 18, 1993.
• De los Reyes filed a complaint before the Labor Arbiter, alleging illegal dismissal and nonpayment of salaries and separation pay.

WoN an employee-employer relationship existed between Pantaleon de los Reyes and INSULAR Life.  YES.

Under the managership contract, De los Reyes was obliged to work exclusively for petitioner in life insurance solicitation and was imposed premium production quotas. Of course, the acting unit manager could not underwrite other lines of insurance because his Permanent Certificate of Authority was for life insurance only and for no other. He was proscribed from accepting a managerial or supervisory position in any other office including the government without the written consent of petitioner. De los Reyes could only be promoted to permanent unit manager if he met certain requirements and his promotion was recommended by the petitioner's District Manager and Regional Manager and approved by its Division Manager. As Acting Unit Manager, De los Reyes performed functions beyond mere solicitation of insurance business for petitioner. As found by the NLRC, he exercised administrative functions which were necessary and beneficial to the business of INSULAR LIFE.

Exclusivity of service, control of assignments and removal of agents under private respondent's unit, collection of premiums, furnishing of company facilities and materials as well as capital described as Unit Development Fund are but hallmarks of the management system in which herein private respondent worked. This obtaining, there is no escaping the conclusion that private respondent Pantaleon de los Reyes was an employee of herein petitioner.

8.  Feati University vs Bautista, L-21278, December 17, 1966

• The cases involve a labor dispute between Feati University Faculty Club-PAFLU and Feati University.
• The Faculty Club informed the University of its registration as a labor union and presented demands related to employment.
• Efforts at conciliation failed, leading to a strike by Faculty Club members and class disruptions.
• The petitioner argues that the Industrial Peace Act is not applicable to the University because it is an educational institution and not an industrial establishment and hence not an "employer" in contemplation of said Act; neither it is applicable to the members of the Faculty Club because the latter are independent contractors and, therefore, not employees within the purview of the said Act.

WoN the Faculty Club are employees within the contemplation of the Industrial Peace Act. YES.

The term employer include any person acting in the interest of an employer, directly or indirectly, but shall not include any labor organization (otherwise than when acting as an employer) or any one acting in the capacity or agent of such labor organization. Congress did not intend to give a complete definition of "employer", but rather that such definition should be complementary to what is commonly understood as employer

Act itself specifically enumerated those who are not included in the term "employer" and educational institutions are not included; hence, they can be included in the term "employer". However, those educational institutions that are not operated for profit are not within the purview of Republic Act No. 875. Feati realizes profits and parts of such earning is distributed as dividends to private stockholders or individuals.

Feati controls the work of the members of its faculty. Prescribes the courses or subjects that professors teach, and when and where to teach. Professors' work is characterized by regularity and continuity for a fixed duration. Professors are compensated for their services by wages and salaries, rather than by profits. Professors and/or instructors cannot substitute others to do their work without the consent of the university. Professors can be laid off if their work is found not satisfactory. 

Moreover, even if university professors are considered independent contractors, still they would be covered by Rep. Act No. 875.  Professors, instructors or teachers of private educational institutions who teach to earn a living are entitled to the protection of our labor laws — and one such law is Republic Act No. 875.

9.  Philippine Fuji Xerox Corp vs NLRC, GR No 111501, March 5,, 1996

• Philippine Fuji Xerox Corp entered into an agreement with Skillpower, Inc., under which Skillpower supplied workers to operate copier machines for Fuji Xerox's "Xerox Copier Project" in its sales offices. 
• Pedro Garado was assigned as a key operator at Fuji Xerox's branch in Makati.
• Garado went on leave, and during his absence, a substitute took over his duties. 
• Upon his return, Garado discovered that there was a spoilage of over 600 copies. 
• Fearing that he might be blamed for the spoilage, he he tried to talk a service technician of Fuji Xerox into stopping the meter of the machine.
• Fuji Xerox learned about Garado's actions and reported the incident to Skillpower, Inc. 
• Skillpower, Inc. subsequently suspended Garado and ordered him to explain his actions.
• Garado filed a complaint for illegal dismissal.

WoN Pedro Garado was an employee of Fuji Xerox and not of Skillpower, Inc. YES

Pedro Garado was an employee of Fuji Xerox. When Garado was first assigned to work at Fuji Xerox, he had never been assigned to any other company so much so that he was already a member of the union which petitioned the company for his regularization. Since employed, Garado was never assigned to any other client of Skillpower, Inc. 

The Xerox Copier Project of petitioners promotes goodwill for the company. It may not generate income for the company but there are activities which a company may find necessary to engage in because they ultimately redound to its benefit. It is wrong to say that if a task is not directly related to the employer's business, or it falls under what may be considered "housekeeping activities," the one performing the task is a job contractor. The determination of the existence of an employer-employee relationship is defined by law according to the facts of each case, regardless of the nature of the activities involved.

Fuji Xerox played in the dismissal of the private respondent. Fuji Xerox exercised disciplinary authority over Garado and that Skillpower, Inc. issued the order of dismissal merely in obedience to the decision of petitioner.

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 persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. Skillpower, Inc. is, therefore, a "labor-only" contractor and Garado is not its employee.

10.  Traders Royal Bank vs NLRC, GR No. 127864,December 22, 1999

• In 1974, Rogelio Española was assigned to work as a janitor at the Iloilo Branch of Traders Royal Bank (TRB) by Agro-Commercial Security Services Agency Inc. (AGRO).
• In 1982, Española was informed that he would be absorbed by a new agency, Royal Protective and Janitorial Services Inc. (ROYAL), which was owned and managed by the same people who handled AGRO. He continued to perform the same functions under ROYAL without separation pay or benefits.
• In 1988, TRB and ROYAL executed a service agreement for janitorial services for one year, renewable monthly. When the agreement expired, TRB did not issue a termination notice and continued to avail of ROYAL's services.
• In 1994, TRB sent a termination letter to ROYAL, and in turn, ROYAL informed Española that his services were no longer needed.
• Española filed a case against for illegal dismissal, illegal deduction, underpayment of wages, non-payment of overtime pay, premium pay for rest day, service incentive leave pay, 13th month pay, and night shift differentials, with a prayer for reinstatement and back wages, as well as moral and exemplary damages and attorney's fees.

WoN Española was an employee of TRB and not of ROYAL. YES.

TRB should be obviously deemed as Española's employer. Española not only worked as a janitor but he was also TRB's driver. Since 1974 he was required to drive TRB's armored car, bring and fetch the children of the bank's manager to and from school, drive for its officers, and perform various errands assigned to him by TRB employees. It was TRB which had control and supervision over Española.

Since Española was illegally dismissed he is entitled to reinstatement with full back wages. An illegally dismissed employee is entitled to back wages from the time he was dismissed to the time of his actual reinstatement.

11.  Zamudio vs NLRC, GR No. 76723, March 25, 1990

No full text available. 

• Petitioners rendered services essential for the cultivation of respondent’s farm. 
• While the services were not continuous in the sense that they were not rendered everyday throughout the year, as is the nature of farm work, petitioners had never stopped working for respondent from year to year from the time he hired them to the time he dismissed.

WoN an employee-employer relationship existed.  YES.

The nature of their employment, i.e. “Pakyao” basis, does not make petitioner independent contractors. Pakyao workers are considered employees as long as the employer exercises control over the means by which such workers are to perform their work inside private respondents farm, the latter necessarily exercised control over the performed by petitioners.

The seasonal nature of petitioner’s work does not detract from the conclusion that employer – employee relationship exits. Seasonal workers whose work is not merely for the duration of the season, but who are rehired every working season are considered regular employees. The circumstances that petitioners do not apears in respondent’s payroll does not destroy the employer – employee relationship between them. Omission of petitioners in the payroll was not within their control, they had no hand in the preparation of the payroll. This circumstance, even if true, cannot be taken against petitioners.

12.  Paguio vs NLRC, GR NO. 147816, May 9, 2003

• Metromedia Times Corporation renewed, for the fifth time, an agreement with Efren P. Paguio.
• Paguio was appointed as an account executive to solicit advertisements for "The Manila Times" newspaper.
• Paguio was entitled to a 15% commission on direct advertisements and a 10% commission on agency advertisements, along with a monthly allowance of P2,000 as long as he met a monthly quota of P30,000.
• The agreement contained clauses stating that Paguio was not an employee of the company, and either party could terminate the agreement with a 30-day notice.
• Two months after renewing the contract, Paguio received a termination notice without a clear cause.
• Paguio filed a case claiming unlawful dismissal and sought reinstatement, backwages, and damages.

WoN Efren Paguio was a regular employee of Metromedia Times Corporation.  YES.

An indicum of regular employment, rightly taken into account by the labor arbiter, was the reservation by respondent Metromedia Times Corporation not only of the right to control the results to be achieved but likewise the manner and the means used in reaching that end. Metromedia Times Corporation exercised such control by requiring petitioner, among other things, to submit a daily sales activity report and also a monthly sales report as well. Various solicitation letters would indeed show that Robina Gokongwei, company president, Alda Iglesia, the advertising manager, and Frederick Go, the advertising director, directed and monitored the sales activities of petitioner.

A regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal. That petitioner performed activities which were necessary and desirable to the business of the employer, and that the same went on for more than a year, could hardly be denied. Petitioner was an account executive in soliciting advertisements, clearly necessary and desirable, for the survival and continued operation of the business of respondent corporation. Robina Gokongwei, its President, herself admitted that the income generated from paid advertisements was the lifeblood of the newspaper’s existence. Implicitly, respondent corporation recognized petitioner’s invaluable contribution to the business when it renewed, not just once but five times, its contract with petitioner.

The law, in defining their contractual relationship, does so, not necessarily or exclusively upon the terms of their written or oral contract, but also on the basis of the nature of the work petitioner has been called upon to perform. The law affords protection to an employee, and it will not countenance any attempt to subvert its spirit and intent. A stipulation in an agreement can be ignored as and when it is utilized to deprive the employee of his security of tenure. The sheer inequality that characterizes employer-employee relations, where the scales generally tip against the employee, often scarcely provides him real and better options.

13.  Grepalife vs Judico, GR No. 73887, December 21,1989

• In 1976, Honorato Judico entered into an agency agreement with Great Pacific Life Assurance Corporation (Grepalife), becoming a debit agent in Cebu City.
• Debit agents sold and serviced industrial life plans, collecting premiums from policyholders, and working with prospective clients.
• Initially, Judico received a P200.00 allowance for thirteen weeks, regardless of production, and later a percentage called "sales reserve" based on his collections.
• In September 1981, Judico was promoted to Zone Supervisor with an additional fixed allowance of P110.00 per week.
• In November 1981, he was reverted to his position as a debit agent but was not paid the weekly sales reserve.
• On June 28, 1982, Grepalife terminated Judico's agency contract.
• Grepalife argued that Judico was not its employee but rather an insurance agent compensated based on production, specifically commissions and bonuses.

WoN an employee-employer relationship existed between Honorato Judico and Grepa Life.  YES.

An insurance company may have two classes of agents who sell its insurance policies: 
(1) salaried employees who keep definite hours and work under the control and supervision of the company; and 
(2) registered representatives who work on commission basis. 

We can readily see that the element of control by the petitioner on Judico was very much present. The record shows that petitioner Judico received a definite minimum amount per week as his wage known as "sales reserve" wherein the failure to maintain the same would bring him back to a beginner's employment with a fixed weekly wage of P 200.00 for thirteen weeks regardless of production. He was assigned a definite place in the office to work on when he is not in the field; and in addition to his canvassing work he was burdened with the job of collection. In both cases he was required to make regular report to the company regarding these duties, and for which an anemic performance would mean a dismissal. Conversely faithful and productive service earned him a promotion to Zone Supervisor with additional supervisor's allowance, a definite amount of P110.00 aside from the regular P 200.00 weekly "allowance". Furthermore, his contract of services with petitioner is not for a piece of work nor for a definite period.

He was controlled by petitioner insurance company not only as to the kind of work; the amount of results, the kind of performance but also the power of dismissal. Undoubtedly, private respondent, by nature of his position and work, had been a regular employee of petitioner and is therefore entitled to the protection of the law and could not just be terminated without valid and justifiable cause.

14.  Villamaria vs CA and Bustamante, GR No. 165881, April 19, 2006

• Oscar Villamaria, Jr. owned Villamaria Motors, a sole proprietorship engaged in assembling passenger jeepneys with a public utility franchise. Villamaria retained nine jeepneys, four of which were operated by drivers on a "boundary basis."
• Jerry V. Bustamante was one of the drivers who operated a jeepney and paid a daily boundary fee to Villamaria.
• In August 1997, Villamaria verbally agreed to sell the jeepney to Bustamante under a "boundary-hulog scheme," with Bustamante making daily payments to eventually own the vehicle. A contract titled "Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog" was executed, outlining the terms of the arrangement.
• In 1999, Bustamante and other drivers failed to pay their boundary-hulog, leading to Villamaria's warning to strictly enforce the Kasunduan.
• In 2000, Villamaria took back the jeepney from Bustamante, barring him from driving it.
• Bustamante filed a complaint for illegal dismissal against Villamaria and his wife Teresita.
• The spouses Villamaria argued that the Kasunduan transformed the relationship from employer-employee to vendor-vendee, so there was no illegal dismissal.

WoN an employee-employer relationship existed between Jerry Bustamante and Oscar Villamaria.  YES.

Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created between petitioner and respondent: that of employer-employee and vendor-vendee. The Kasunduan did not extinguish the employer-employee relationship of the parties extant before the execution of said deed. the jeepney owner/operator-driver relationship under the boundary system is that of employer-employee and not lessor-lessee.

What is primordial is that petitioner retained control over the conduct of the respondent as driver of the jeepney. Indeed, petitioner, as the owner of the vehicle and the holder of the franchise, is entitled to exercise supervision and control over the respondent, by seeing to it that the route provided in his franchise, and the rules and regulations of the Land Transportation Regulatory Board are duly complied with. Moreover, in a business establishment, an identification card is usually provided not just as a security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.

15.  Corporal vs NLRC, GR No. 129315, October 2, 2000

• Osias I. Corporal, Sr. and other petitioners were barbers and manicurists at the New Look Barber Shop, which was initially owned and managed by Mr. Vicente Lao.
• In January 1982, Vicente Lao's children organized a corporation, Lao Enteng Company, Inc., which took over the assets and operations of the barber shop.
• The petitioners continued working with the new company until April 15, 1995, when they were informed that the building housing the barber shop had been sold, and their services were no longer needed.
• The petitioners filed a complaint alleging illegal dismissal.

WoN an employee-employer relationship existed between the petitioners and the Lao Enteng Company, Inc.  YES.

An independent contractor is one who undertakes "job contracting", who 
(a) carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof, and 
(b) has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business.

The petitioners are not "independent contractors". They did not carry on an independent business. Neither did they undertake cutting hair and manicuring nails, on their own as their responsibility, and in their own manner and method. The services of the petitioners were engaged by the respondent company to attend to the needs of its customers in its barber shop. 

More importantly, the petitioners, individually or collectively, did not have a substantial capital or investment in the form of tools, equipment, work premises and other materials which are necessary in the conduct of the business of the respondent company. What the petitioners owned were only combs, scissors, razors, nail cutters, nail polishes, the nippers - nothing else. By no standard can these be considered substantial capital necessary to operate a barber shop. 

From the records, it can be gleaned that petitioners were not given work assignments in any place other than at the work premises of the New Look Barber Shop owned by the respondent company. Also, petitioners were required to observe rules and regulations of the respondent company pertaining, among other things, observance of daily attendance, job performance, and regularity of job output. The nature of work performed by were clearly directly related to private respondent's business of operating barber shops.

16. Makati Haberdashery vs NLRC, GR nos 83380-81, November 15, 1989

• Private respondents worked for Makati Haberdashery, Inc. in various roles, such as tailors, seamstresses, sewers, basters, and "plantsadoras." 
• They were paid on a piece-rate basis, except for two employees who were paid on a monthly basis. 
• They also received a daily allowance of P3.00 if they reported for work before 9:30 a.m. Private respondents are required to work from or before 9:30 a.m. up to 6:00 or 7:00 p.m. from Monday to Saturday and during peak periods even on Sundays and holidays.
• The labor organization "Sandigan ng Manggagawang Pilipino" filed a complaint in July 1984 on behalf of private respondents, alleging various labor law violations.

WoN an employee-employer relationship existed between the petitioners and the Makati Haberdashery, Inc.  YES.

As gleaned from the operations of petitioner, when a customer enters into a contract with the haberdashery or its proprietor, the latter directs an employee who may be a tailor, pattern maker, sewer or "plantsadora" to take the customer's measurements, and to sew the pants, coat or shirt as specified by the customer. Supervision is actively manifested in all these aspects — the manner and quality of cutting, sewing and ironing.

Furthermore, the presence of control is immediately evident in this memorandum where petitioner has reserved the right to control its employees not only as to the result but also the means and methods by which the same are to be accomplished.

Private respondents did not exercise independence in their own methods, but on the contrary were subject to the control of petitioners from the beginning of their tasks to their completion. Unlike independent contractors who generally rely on their own resources, the equipment, tools, accessories, and paraphernalia used by private respondents are supplied and owned by petitioners. Private respondents are totally dependent on petitioners in all these aspects.

17.  Caurdanetaan Piece Workers Union vs Undersecretary Laguesma, GR No. 113542, February 24, 1998

• Caurdanetaan Piece Workers Union/Association (CPWU) had 92 members working as "cargadors" for Corfarm at Umingan, Pangasinan, since 1982.
• They loaded, unloaded, and piled sacks of palay (rice grains) and were paid on a piece-rate basis.
• CPWU organized when Corfarm denied them certain benefits, but Corfarm barred its members from working and replaced them with non-union workers in 1992.
• CPWU filed a petition for certification election while also filing a complaint against Corfarm for illegal dismissal, unfair labor practices, and other claims.
• Undersecretary Bienvenido Laguesma issued an order which dismissed their prayer for certification election.

WoN an employee-employer relationship existed between the petitioners and the Cofarm.  YES.

Records indubitably shows the presence of an employer-employee relationship. It is undeniable that petitioner’s members worked as cargadores for private respondent. They loaded, unloaded and piled sacks of palay from the warehouses to the cargo trucks and from the cargo trucks to the buyers. This work is directly related, necessary and vital to the operations of Corfarm. 

Moreover, Corfarm did not even allege, much less prove, that petitioner’s members have “substantial capital or investment in the form of tools, equipment, machineries, and work premises, among others.” Furthermore, said respondent did not contradict petitioner’s allegation that it paid wages directly to these workers without the intervention of any third-party independent contractor. It also wielded the power of dismissal over petitioners; in fact, its exercise of this power was the progenitor of the Second Case. Clearly, the workers are not independent contractors.

Applying Article 280 of the Labor Code, we hold that the CPWU members were regular employees of private respondent. Their tasks were essential in the usual business of private respondent. The employer-employee relationship having been duly established, the holding of a certification election necessarily follows. 

18.  A. Maraguinot and P. Enero vs NLRC, et.al, and Viva Films, GR No. 120969, January 22, 1998

• Petitioners Alejandro Maraguinot, Jr. and Paulino Enero were hired by Viva Films.
• Their job responsibilities included loading and unloading movie equipment, arranging equipment on set, assisting with lighting, and performing other tasks assigned by the director or cameraman.
• Petitioners requested salary adjustments in compliance with the minimum wage law, but private respondents demanded they sign blank employment contracts in exchange for salary increases.
• As petitioners refused to sign these contracts, Enero was forced to take a leave and was not allowed to return when he reported for work.
• Maraguinot was removed from the company payroll for a brief period in. However, he was also asked to sign a blank employment contract and was terminated.
• Both petitioners filed a lawsuit for illegal dismissal before the Labor Arbiter.
• Viva Films claimed that they were primarily involved in movie distribution and exhibition and that the producers were responsible for hiring petitioners as project employees.

WoN an employee-employer relationship existed between the petitioners and the Viva Films.  YES.

VIVA's control is evident in its mandate that the end result must be a "quality film acceptable to the company." The means and methods to accomplish the result are likewise controlled by VIVA. By commanding crew members to observe the rules and regulations promulgated by VIVA, the appointment slips only emphasize VIVA's control over petitioners.

Aside from control, the element of selection and engagement is likewise present in the instant case and exercised by VIVA. Notably, nowhere in the appointment slip does it appear that it was the producer or associate producer who hired the crew members; moreover, it is VIVA's corporate name which appears on the heading of the appointment slip. What likewise tells against VIVA is that it paid petitioners' salaries as evidenced by vouchers, containing VIVA's letterhead, for that purpose. 

All the circumstances indicate an employment relationship between petitioners and VIVA alone, thus the inevitable conclusion is that petitioners are employees only of VIVA.

19.  Orlando Farm Growers vs NLRC, GR No. 129076, November 25, 1998

• Orlando Farms Growers Association, led by Glicerio Añover, is an association of landowners engaged in banana production, formed to collectively deal with Stanfilco on various matters.
• The respondents were hired several member-landowners as farm workers but were involved in packing and harvesting tasks on the association's plantation.
• After the respondents were dismissed on various dates, they filed several complaints for illegal dismissal and monetary benefits.
• The petitioner argued that as an unregistered association, they cannot be considered an employer.

WoN an unregistered association may be an employer independent of the respective members it represents. YES.

An employer as 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. 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 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 which the construed, not only as a security measure but mainly to identify the holder as a bona fide employee of the firm. However, what makes the relationship explicit is the power of the petitioner to enter into compromise agreements involving money claims filed by three of its employee,.

For having been dismissed without a valid cause and for non-observance of the due process requirement, respondents are entitled to receive full backwages from the date of their dismissal up to the time of their reinstatement.

20.  San Miguel Brewery Sales vs Ople, GR No. 53615, February 8, 1989

• San Miguel Corporation implemented its “Complementary Distribution System” (CDS) whereby wholesalers can directly get beer products from any SMC office. 
• The scheme was approved by then Secretary of Labor Blas Ople. 
• The San Miguel Brewery Sales Force Union (SMBSFU) assailed this program because it violates the Collective Bargaining Agreement particularly the established scheme whereby route salesmen have been given specific territories to sell beer products. 
• The CDS scheme would then lower the take home pay of the route salesmen and in effect an attack to union members. 
• SMBSFU filed a petition for review on the order of Sec. Ople approving the scheme.

WoN the CDS is a violation of the CBA. NO.

The SC ruled that the CDS is an exercise of management prerogative whereby the management can implement schemes to optimize their profit. 

Further, the CDS provides for a compensation clause as well for salesmen. San Miguel Corporation’s offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS by paying them a so-called “back adjustment commission” to make up for the commissions they might lose as a result of the CDS proves the company’s good faith and lack of intention to bust their union.

21.  Alhambra Industries vs CIR, GR No. L-25984,October 30, 1970

• Fifteen drivers and helpers were allegedly not recognized as employees by Alhambra Industries.
• The complaint was filed by the respondent union against the petitioners, accusing them of discrimination against the fifteen union members by not granting them the benefits and privileges enjoyed by other employees under the collective bargaining agreement.
• The petitioners claimed that the fifteen drivers and helpers were independent employees of their salesmen and propagandists.

WoN an employee-employer relationship existed between the petitioners and the Alhambra Industries.  YES.

The reality, however, is that respondent court expressly found that "in truth and in fact, the corporation is the "employer" of the driver or helper and not the salesman or propagandist who is merely expressly authorized by the former to engage such services." 

Failure on petitioner's part to live up in good faith to the terms of its collective bargaining agreement by denying the privileges and benefits thereof to the fifteen drivers and helpers through its device of trying to pass them off as "employees" of its salesmen and propagandists was a serious violation of petitioner's duty to bargain collectively and constituted unfair labor practice in any language.

22.  Singer Sewing machine vs Drilon, GR No. 91307,January 24, 1991

• Singer Machine Collectors Union-Baguio (SIMACUB) filed a petition for direct certification as the exclusive bargaining agent of collectors employed by Singer Sewing Machine Company, Baguio City branch.
• The company opposed the petition, claiming that the collectors were independent contractors, not employees.
• The Med-Arbiter ruled in favor of the union, finding an employer-employee relationship between the collectors and the company. This decision was affirmed on appeal by the Labor Secretary Franklin M. Drilon.
• The company filed this petition, arguing that the labor department had no jurisdiction, violated due process, erred in finding an employer-employee relationship, and ignored the rule that commission agents are independent contractors.
• The respondents countered that the collection agency agreements contradicted the company's claim that the collectors were independent contractors.

WoN an employee-employer relationship existed between the union and the company.  NO.

A thorough examination of the facts of the case leads us to the conclusion that the existence of an employer-employee relationship between the Company and the collection agents cannot be sustained.

The Collection Agency Agreement defines the relationship between the Company and each of the union members who signed a contract.  The Agreement confirms the status of the collecting agent in this case as an independent contractor not only because he is explicitly described as such but also because the provisions permit him to perform collection services for the company without being subject to the control of the latter except only as to the result of his work. 

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 work of petitioner's agents or registered representatives more nearly approximates that of an independent contractor than that of an employee. The latter is paid for the labor he performs, that is, for the acts of which such labor consists the former is paid for the result thereof.

The Court finds that since private respondents are not employees of the Company, they are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining. Accordingly, there is no constitutional and legal basis for their "union" to be granted their petition for direct certification.

 

23.  Besa vs Trajano, GR No. L-72409, December 29,1986

• Seventeen shoe shiners are members of the  Kaisahan ng Mangagawang Pilipino (KAMPIL) union.
• The union filed a petition for certification election.
• Mamerto Besa, doing business under the name of Besa's Costumbuilt Shoes, argued that  no employer-employee relationship existed.

WoN an employee-employer relationship existed between the shoe shiners and Mamerto Besa.  NO.

The records of the case reveal that an employer-employee relationship does not exist between the 17 shoes hiners and petitioner.

The shoe shiner is distinct from a piece worker because while the latter is paid for work accomplished, he does not, however, contribute anything to the capital of the employer other than his service. It is the employer of the piece worker who pays his wages, while the shoe shiner in this instance is paid directly by his customer. 

The shoe shiner, in relation to respondent Mamerto Besa, is a partner in the trade. The owner/manager does not exercise control and supervision over the shoe shiners. That the shiners have their own customers from whom they charge the fee and divide the proceeds equally with the owner, which make the owner categorized them as on purely commission basis. The attendant circumstances clearly show that there is no employer-employee relationship existing.

24.  Mafinco Trading Corp vs Ople, GR No. L-37790, March 25, 1976

• Mafinco Trading Corporation (Mafinco) was appointed as the exclusive distributor of 'COSMOS' Soft Drink Products for the City of Manila by Cosmos Aerated Water Factory, Inc.
• Rodrigo Repomanta and Rey Moralde entered into peddling contracts with Mafinco, agreeing to buy and sell Cosmos soft drinks.
• These contracts were to last for one year unless terminated by either party with a five-day notice.
• Mafinco terminated the contracts with Repomanta and Moralde.
• Repomanta and Moralde, through FOITAF, filed a complaint with the NLRC.
• Mafinco claimed that Repomanta and Moralde were not employees but independent contractors.
• The Secretary based his decision on the conclusion that the peddlers were driver-salesmen of the company and that the peddling contracts were a device to evade labor laws.

WoN an employee-employer relationship existed between the Repomanta and Moralde and Malfinco.  NO.

We hold that under their peddling contracts Repomanta and Moralde were not employees of Mafinco but were independent contractors. They were distributors of Cosmos soft drinks with their own capital and employees. Ordinarily, an employee or a mere peddler does not execute a formal contract of employment. He is simply hired and he works under the direction and control of the employer.

Repomanta and Moralde voluntarily executed with Mafinco formal peddling contracts which indicate the manner in which they would sell Cosmos soft drinks. That Circumstance signifies that they were acting as independent businessmen. They were to sign or not to sign that contract. If they did not want to sell Cosmos products under the conditions defined in that contract; they were free to reject it.

An independent contractor is one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to control of his employer except as to the result of the work.

25.  Sonza vs ABS CBN GR No. 138051, June 10, 2004

• In May 1994, ABS-CBN signed an Agreement with MJMDC, making MJMDC as the "AGENT" for Jay Sonza's exclusive services to ABS-CBN for radio and television hosting.
• Jay Sonza's services included co-hosting for the Mel & Jay radio program and Mel & Jay television program.
• In 1996, Jay Sonza wrote to ABS-CBN's President, resigning due to recent events and claiming violation of the Agreement.
• Jay Sonza filed a complaint against ABS-CBN for unpaid salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, and travel allowance.
• ABS-CBN filed a motion to dismiss, claiming no employer-employee relationship.

WoN a "talent" is an employee and not and independent contractor.  NO.

Applying the control test to the present case, we find that Jay Sonza is not an employee but an independent contractor. 

ABS-CBN engaged Jay Sonza’s services specifically to co-host the "Mel & Jay" programs. ABS-CBN did not assign any other work to Jay Sonza. The clear implication is that Jay Sonza had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. ABS-CBN’s sole concern was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise control over the means and methods of performance of Jay Sonza’s work.

This Court will not interpret the right of labor to security of tenure to compel artists and talents to render their services only as employees. If radio and television program hosts can render their services only as employees, the station owners and managers can dictate to the radio and television hosts what they say in their shows. This is not conducive to freedom of the press.