art 82-90 case briefs

7/23/2019 Art 82-90 Case Briefs

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LABOR STANDARDS

TOPIC: Article 82 Managerial Employees

GR No. 101761

National Sugar Refneries Corporation (NASR!CO" #s.NLRC an$ NBSR Super#isor% nion& ('AC)" TC'

*ar+, -& 1//

A +ursor% perusal o t,e 2o3 4alue Contri3ution State5ents 7 o t,e union5e53ers ill rea$il% s,o t,at t,ese super#isor% e5plo%ees are un$ert,e $ire+t super#ision o t,eir respe+ti#e $epart5ent superinten$ents an$t,at generall% t,e% assist t,e latter in planning& organiing& sta8ng&$ire+ting& +ontrolling +o55uni+ating an$ in 5a9ing $e+isions in attainingt,e +o5pan%:s set goals an$ o3;e+ti#es.

Super#isor% e5plo%ees $is+,arging un+tions t,at <uali% t,e5 as o8+ersor 5e53ers o t,e 5anagerial sta= +onsi$ere$ e>e5pt ro5 t,e +o#erageo Arti+le ?- o t,e La3or Co$e an$ t,ereore& not entitle$ to o#erti5e&rest $a% an$ ,oli$a% pa%.

'a%5ent o t,e <uestione$ 3enefts ,as not ripene$ into a +ontra+tualo3ligation as pa%5ent t,ereo as 5a$e at a ti5e ,en t,e% ererig,tull% entitle$ t,ereto.

!ntitle5ent to 3enefts pro#i$e$ 3% la re<uires prior +o5plian+e it, t,e+on$itions set ort, t,erein.

Ponente: Justice RegaladoFACTS:NASURECO is a corporation which is full owned and controlled ! the "o#ern$ent%

The &atangas Re'ner was pri#ati(ed pursuant to law% Pri#ate respondent unionrepresents the for$er super#isors of the NASURECO &atangas Sugar Re'ner%

June )**+, petitioner i$ple$ented a Jo! E#aluation -JE. Progra$ a/ecting alle$ploees, fro$ ran01and1'le to depart$ent heads% The JE Progra$ was designedto rationali(e the duties and functions of all positions, re1esta!lish le#els of responsi!ilit, and recogni(e !oth wage and operational structures% Jo!s wereran0ed according to e/ort, responsi!ilit, training and wor0ing conditions andrelati#e worth of the 2o!% As a result, all positions were re1e#aluated, and all

e$ploees including the $e$!ers of respondent union were granted salarad2ust$ents and increases in !ene'ts co$$ensurate to their actual duties andfunctions%

3ith the i$ple$entation of the JE Progra$, the following ad2ust$ents were $ade:-). The $e$!ers of respondent union were re1classi'ed under le#els S14 to S1+

which are considered $anagerial sta/ for purposes of co$pensation and!ene'ts5

)



-6. There was an increase in !asic pa of the a#erage of 478 of their !asic paprior to the JE Progra$, with the union $e$!ers now en2oing a wide gap-P),69*%77 per $onth. in !asic pa co$pared to the highest paid ran01and1'le e$ploee5

-. ;onge#it pa was increased on top of align$ent ad2ust$ents5-<. The were entitled to increased co$pan CO;A of P664%77 per $onth5

-4. There was a grant of P)77%77 allowance for rest da=holida wor0%

Two ears after, respondent union 'led a co$plaint for non1pa$ent of o#erti$e, rest da and holida pa allegedl in #iolation of Art% )77 of the ;a!orCode

La3or Ar3iter@ nions a#or, directed NASURECO to the indi#idual $e$!ers of co$plainant union the usual o#erti$e pa, rest da pa and holida pa en2oed !the$ instead of the P)77%77 special allowance and pa the indi#idual $e$!ers of co$plainant union the di/erence in $one #alue !etween the P)77%77 specialallowance and the o#erti$e pa, rest da pa and holida pa that the ought toha#e recei#ed

>Along span of ti$e during which the !ene'ts were !eing paid to the super#isorshas accused the pa$ent thereof to ripen into contractual o!ligation5 at theco$plainants cannot !e estopped fro$ ?uestioning the #alidit of the newco$pensation pac0age despite the fact that the ha#e !een recei#ing the !ene'tstherefro$, considering that respondent union was for$ed onl a ear after thei$ple$entation of the Jo! E#aluation Progra$, hence there was no wa for theindi#idual super#isors to e@press their collecti#e response thereto prior to thefor$ation of the union5 and the co$parati#e co$putations presented ! the pri#aterespondent union showed that the P)77%77 special allowance gi#en NASUREFCO fellshort of what the super#isors ought to recei#e had the o#erti$e pa rest da paand holida pa not !een discontinued, which arrange$ent, therefore, a$ounted toa di$inution of !ene'ts%

NLRC@ nions a#or, aBr$ed ;a!or Ar!iters decision% >De$!ers of respondentunion are not $anagerial e$ploees, as de'ned under Article 6)6 -$. of the ;a!orCode and, therefore, the are entitled to o#erti$e, rest da and holida pa%

NASURECOs $otion for reconsideration was denied5 hence, this instant petition%

SSUE=S:3hether super#isor e$ploees, as de'ned in Article 6)6 -$., &oo0 of the ;a!orCode, should !e considered as oBcers or $e$!ers of the $anagerial sta/ under

Article +6, &oo0 of the sa$e Code, and hence are not entitled to o#erti$e restda and holida pa%

GECSON: The court granted NASURECOs petition ! annulling ;a!or Ar!iter and N;RCsdecisions and dis$issing the unions co$plaint%

A +ursor% perusal o t,e 2o3 4alue Contri3ution State5ents 7 o t,e union5e53ers ill rea$il% s,o t,at t,ese super#isor% e5plo%ees are un$er

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t,e $ire+t super#ision o t,eir respe+ti#e $epart5ent superinten$ents an$t,at generall% t,e% assist t,e latter in planning& organiing& sta8ng&$ire+ting& +ontrolling +o55uni+ating an$ in 5a9ing $e+isions in attainingt,e +o5pan%:s set goals an$ o3;e+ti#es.

Super#isor% e5plo%ees $is+,arging un+tions t,at <uali% t,e5 as o8+ers

or 5e53ers o t,e 5anagerial sta= +onsi$ere$ e>e5pt ro5 t,e +o#erageo Arti+le ?- o t,e La3or Co$e an$ t,ereore& not entitle$ to o#erti5e&rest $a% an$ ,oli$a% pa%.t is apparent that the $e$!ers of respondent union discharge duties andresponsi!ilities which inelucta!l ?ualif the$ as oBcers or $e$!ers of the$anagerial sta/, as de'ned in Section 6, Rule &oo0 of the aforestated Rules to$ple$ent the ;a!or Code% The court is constrained to agree with petitioner thatthe union $e$!ers should !e considered as oBcers and $e$!ers of the$anagerial sta/ and are, therefore, e@e$pt fro$ the co#erage of Article +6%Perforce, the are not entitled to o#erti$e, rest da and holida%

'a%5ent o t,e <uestione$ 3enefts ,as not ripene$ into a +ontra+tual

o3ligation as pa%5ent t,ereo as 5a$e at a ti5e ,en t,e% ererig,tull% entitle$ t,ereto.

The $e$!ers of respondent union were paid the ?uestioned !ene'ts for the reasonthat, at that ti$e, the were rightfull entitled thereto% Prior to the JE Progra$, thecould not !e categoricall classi'ed as $e$!ers or oBcers of the $anagerial sta/ considering that the were then treated $erel on the sa$e le#el as ran01and1'le%Conse?uentl, the pa$ent thereof could not !e construed as constituti#e of #oluntar e$ploer practice, which cannot !e now !e unilaterall withdrawn !petitioner%

!ntitle5ent to 3enefts pro#i$e$ 3% la re<uires prior +o5plian+e it, t,e+on$itions set ort, t,erein.3ith the pro$otion of the union $e$!ers, the are no longer entitled to the!ene'ts which attach and pertain e@clusi#el to their positions% Entitle$ent to the!ene'ts pro#ided for ! law re?uires prior co$pliance with the conditions set forththerein% 3ith the pro$otion of the $e$!ers of respondent union, the occupiedpositions which no longer $et the re?uire$ents i$posed ! law% Their assu$ptionof these positions re$o#ed the$ fro$ the co#erage of the law, that is, theire@e$ption therefro$%



LABOR STANDARDS

TOPIC: Article 82 Field Personnel

GR No. 1667

Auto Bus Transport S%ste5s& n+. (ABTS" #s. Bautista*a% 16& -00

Ot,er e5plo%ees ,ose peror5an+e is unsuper#ise$ 3% t,e e5plo%er5ust not 3e un$erstoo$ as a separate +lassif+ation o e5plo%ees to ,i+,ser#i+e in+enti#e lea#e s,all not 3e grante$.

!5plo%ees engage$ on tas9 or +ontra+t 3asis or pai$ on purel%+o55ission 3asis are not auto5ati+all% e>e5pte$ ro5 t,e grant o ser#i+e in+enti#e lea#e& unless& t,e% all un$er t,e +lassif+ation o fel$personnel.

),at 5ust 3e as+ertaine$ in or$er to resol#e t,e issue o propriet% o t,egrant o ser#i+e in+enti#e lea#e to respon$ent is ,et,er or not ,e is fel$personnel. A++or$ing to t,e La3or Co$e& fel$ personnel s,all reer tononEagri+ultural e5plo%ees ,o regularl% peror5 t,eir $uties aa% ro5t,e prin+ipal pla+e o 3usiness or 3ran+, o8+e o t,e e5plo%er an$ ,osea+tual ,ours o or9 in t,e fel$ +annot 3e $eter5ine$ it, reasona3le+ertaint%.

Fiel$ personnel are t,ose ,ose peror5an+e o t,eir ;o3ser#i+e is notsuper#ise$ 3% t,e e5plo%er or ,is representati#e& t,e or9pla+e 3eingaa% ro5 t,e prin+ipal o8+e an$ ,ose ,ours an$ $a%s o or9 +annot

3e $eter5ine$ it, reasona3le +ertaint%

T,e $efnition o a fel$ personnel is not 5erel% +on+erne$ it, t,elo+ation ,ere t,e e5plo%ee regularl% peror5s ,is $uties 3ut also it,t,e a+t t,at t,e e5plo%ees peror5an+e is unsuper#ise$ 3% t,e e5plo%erH in or$er to +on+lu$e ,et,er an e5plo%ee is a fle$ e5plo%ee& it is alsone+essar% to as+ertain i a+tual ,ours o or9 in fel$ +an 3e $eter5ine$it, reasona3le +ertaint% 3% t,e e5plo%er.

<



A 3us $ri#erE+on$u+tor& not 3eing a fel$ personnel 3ut a regular e5plo%ee,o peror5s tas9s usuall% ne+essar% an$ $esira3le to t,e usual tra$e o t,e +o5pan%s 3usiness& is entitle$ to t,e grant o ser#i+e lea#e.

T,e a3o#e +onstrual o Art. -/1& t,e rules on ser#i+e in+enti#e lea#e& is in9eeping it, t,e ru$i5entar% prin+iple t,at in t,e i5ple5entation an$

interpretation o t,e pro#isions o t,e La3or Co$e an$ its i5ple5entingregulations& t,e or9ing5ans elare s,oul$ 3e t,e pri5or$ial an$para5ount +onsi$eration. T,e poli+% is to e>ten$ t,e appli+a3ilit% o t,e$e+ree to a greater nu53er o e5plo%ees ,o +an a#ail o t,e 3eneftsun$er t,e la& ,i+, is in +onsonan+e it, t,e a#oe$ poli+% o t,e Stateto gi#e 5a>i5u5 ai$ an$ prote+tion to la3or

Ponente: Justice Chico1Na(ario

FACTS:Since Da )**4, Respondent &autista has !een e$ploed to petitioner A&TS as a!us dri#er1conductor%

On Januar 6777, while &autista accidentall !u$ped another Auto!us as the lattersuddenl stopped at a sharp cur#e without an warning% &autista a#erred that theaccident happened !ecause he was co$pelled ! the $anage$ent to go !ac0 toRo@as, sa!ela, although he had not slept for al$ost twent1four -6<. hours, as hehad 2ust arri#ed in Danila fro$ Ro@as, sa!ela% Respondent further alleged that hewas not allowed to wor0 until he full paid the a$ount of PH4,44)%47, representingthirt percent -78. of the cost of repair of the da$aged !uses and that despiterespondents pleas for reconsideration, the sa$e was ignored ! $anage$ent%

After a $onth, $anage$ent sent hi$ a letter of ter$ination%&autista 'led a co$plaint for illegal dis$issal with $one clai$s for non1pa$ent of )th $onth pa and ser#ice incenti#e lea#e ! A&TS%

La3or Ar3iter@ Bautistas a#or, although his clai$ for illegal dis$issal wasdis$issed, ! ordering A&TS to pa &autista his )th $onth pa and ser#iceincenti#e lea#e%

NLRC@ Bautistas a#or ! aBr$ing ;a!or Ar!iters decision with $odi'cation !deleting the award of the )th $onth pa%

CA@ Bautistas a#or ! aBr$ing N;RCs decision%

SSUE=S:3=N &us Gri#er1Conductor &autista is entitled to Ser#ice ncenti#e ;ea#e -S;.

GECSON: The court denied A&TSs petition ! aBr$ing CAs decision%

Book III, Rule V: SERVICE INCENTIVE LEAVE

SECTION 1. Co#erage% I This rule shall appl to all e$ploees e@cept:

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-d. Field personnel and other e$ploees whose perfor$ance is unsuper#ised ! thee$ploer including those who are engaged on tas0 or contract !asis, purelco$$ission !asis, or those who are paid in a '@ed a$ount for perfor$ing wor0irrespecti#e of the ti$e consu$ed in the perfor$ance thereof5

Ot,er e5plo%ees ,ose peror5an+e is unsuper#ise$ 3% t,e e5plo%er5ust not 3e un$erstoo$ as a separate +lassif+ation o e5plo%ees to ,i+,ser#i+e in+enti#e lea#e s,all not 3e grante$. Rather, it ser#es as an a$pli'cation of the interpretation of the de'nition of 'eldpersonnel under the ;a!or Code as those >whose actual hours of wor0 in the 'eldcannot !e deter$ined with reasona!le certaint%

!5plo%ees engage$ on tas9 or +ontra+t 3asis or pai$ on purel%+o55ission 3asis are not auto5ati+all% e>e5pte$ ro5 t,e grant o ser#i+e in+enti#e lea#e& unless& t,e% all un$er t,e +lassif+ation o fel$personnel. >Those who are engaged on tas or contract !asis" p#rely commission !asis%$ Saidphrase should !e related with >'eld personnel, appling the rule on e%#sdemgeneris that general and unli$ited ter$s are restrained and li$ited ! theparticular ter$s that the follow%

),at 5ust 3e as+ertaine$ in or$er to resol#e t,e issue o propriet% o t,egrant o ser#i+e in+enti#e lea#e to respon$ent is ,et,er or not ,e is fel$personnel.According to the ;a!or Code, >'eld personnel shall refer to non1agriculturale$ploees who regularl perfor$ their duties awa fro$ the principal place of !usiness or !ranch oBce of the e$ploer and whose actual hours of wor0 in the'eld cannot !e deter$ined with reasona!le certaint%

Fiel$ personnel are t,ose ,ose peror5an+e o t,eir ;o3ser#i+e is notsuper#ise$ 3% t,e e5plo%er or ,is representati#e& t,e or9pla+e 3eingaa% ro5 t,e prin+ipal o8+e an$ ,ose ,ours an$ $a%s o or9 +annot3e $eter5ine$ it, reasona3le +ertaint% Kence, the are paid speci'c a$ount for rendering speci'c ser#ice or perfor$ingspeci'c wor0% f re?uired to !e at speci'c places at speci'c ti$es, e$ploeesincluding dri#ers cannot !e said to !e 'eld personnel despite the fact that the areperfor$ing wor0 awa fro$ the principal oBce of the e$ploee% 1 &ureau of 3or0ing Conditions -&3C., Ad#isor Opinion to Philippine Technical1ClericalCo$$ercial E$ploees Association

T,e $efnition o a fel$ personnel is not 5erel% +on+erne$ it, t,elo+ation ,ere t,e e5plo%ee regularl% peror5s ,is $uties 3ut also it,t,e a+t t,at t,e e5plo%ees peror5an+e is unsuper#ise$ 3% t,e e5plo%erH in or$er to +on+lu$e ,et,er an e5plo%ee is a fle$ e5plo%ee& it is alsone+essar% to as+ertain i a+tual ,ours o or9 in fel$ +an 3e $eter5ine$it, reasona3le +ertaint% 3% t,e e5plo%er.

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A 3us $ri#erE+on$u+tor& not 3eing a fel$ personnel 3ut a regular e5plo%ee,o peror5s tas9s usuall% ne+essar% an$ $esira3le to t,e usual tra$e o t,e +o5pan%s 3usiness& is entitle$ to t,e grant o ser#i+e lea#e.;a!or Ar!iter and concurred in ! the Court of Appeals:t is of 2udicial notice that along the routes that are plied ! these !us co$panies,there are its inspectors assigned at strategic places who !oard the !us and inspect

the passengers, the punched tic0ets, and the conductors reports% There is also the$andator once1a1wee0 car !arn or shop da, where the !us is regularl chec0ed asto its $echanical, electrical, and hdraulic aspects, whether or not there arepro!le$s thereon as reported ! the dri#er and=or conductor% The too, $ust !e atspeci'c place as LsicM speci'ed ti$e, as the generall o!ser#e pro$pt departureand arri#al fro$ their point of origin to their point of destination% n each and e#erdepot, there is alwas the Gispatcher whose function is precisel to see to it thatthe !us and its crew lea#e the pre$ises at speci'c ti$es and arri#e at theesti$ated proper ti$e% These, are present in the case at !ar% The dri#er, theco$plainant herein, was therefore under constant super#ision while in theperfor$ance of this wor0% Ke cannot !e considered a 'eld personnel%

T,e a3o#e +onstrual o Art. -/1& t,e rules on ser#i+e in+enti#e lea#e& is in9eeping it, t,e ru$i5entar% prin+iple t,at in t,e i5ple5entation an$interpretation o t,e pro#isions o t,e La3or Co$e an$ its i5ple5entingregulations& t,e or9ing5ans elare s,oul$ 3e t,e pri5or$ial an$para5ount +onsi$eration.

The polic is to e@tend the applica!ilit of the decree to a greater nu$!er of e$ploees who can a#ail of the !ene'ts under the law, which is in consonance withthe a#owed polic of the State to gi#e $a@i$u$ aid and protection to la!or%

GR No. 1?76/?Serrano #s. NLRC an$ Se#erino Santos Transit an$or

Se#erino Santos

August 0/& -010

RA 761 ,i+, a5en$e$ Arti+le -?7 o t,e La3or Co$e 3% pro#i$ing orretire5ent pa% to <ualife$ pri#ate se+tor e5plo%ees in t,e a3sen+e o an%retire5ent plan in t,e esta3lis,5entI Bus Con$u+tors pai$ on +o55ission3asis all it,in t,e +o#erage o RA 761 an$ its i5ple5enting rules.

Court notes t,at t,ere is a $i=eren+e 3eteen $ri#ers pai$ un$er t,e3oun$ar% s%ste5 an$ +on$u+tors ,o are pai$ on +o55ission 3asis. npra+ti+e& ta>i $ri#ers $o not re+ei#e f>e$ ages. T,e% retain onl% t,osesu5s in e>+ess o t,e 3oun$ar% or ee t,e% pa% to t,e oners oroperators o t,e #e,i+les. Con$u+tors& on t,e ot,er ,an$& are pai$ a+ertain per+entage o t,e 3us earnings or t,e $a%.

T,e e>+lusion ro5 its +o#erage o or9ers ,o are pai$ on a purel%+o55ission 3asis is onl% it, respe+t to fel$ personnel. An e5plo%ee ,ois pai$ on purel% +o55ission 3asis is entitle$ to Ser#i+e n+enti#e La(SL".

Ponente: Justice Carpio Dorales

H



Court notes t,at t,ere is a $i=eren+e 3eteen $ri#ers pai$ un$er t,e3oun$ar% s%ste5 an$ +on$u+tors ,o are pai$ on +o55ission 3asis. npra+ti+e& ta>i $ri#ers $o not re+ei#e f>e$ ages. T,e% retain onl% t,osesu5s in e>+ess o t,e 3oun$ar% or ee t,e% pa% to t,e oners oroperators o t,e #e,i+les. Con$u+tors& on t,e ot,er ,an$& are pai$ a+ertain per+entage o t,e 3us earnings or t,e $a%.

CAs reliance on R E Transport, nc% Case is erroneous% n said case, Court heldthat a ta@i dri#erpaid according to the >!oundar sste$ is not entitled to the )th $onthand the S; pa, hence, his retire$ent pa should !e co$puted on the sole !asis of his salar%

For purposes, howe#er, of appling the law on S;, as well as on retire$ent, theCourt notes that there is a di/erence !etween dri#ers paid under the >!oundarsste$ and conductors who are paid on co$$ission !asis%

n practice, ta@i dri#ers do not recei#e '@ed wages% The retain onl those su$s ine@cess of the >!oundar or fee the pa to the owners or operators of the #ehicles%

Conductors, on the other hand, are paid a certain percentage of the !us earningsfor the da%

T,e e>+lusion ro5 its +o#erage o or9ers ,o are pai$ on a purel%+o55ission 3asis is onl% it, respe+t to fel$ personnel. An e5plo%ee ,ois pai$ on purel% +o55ission 3asis is entitle$ to Ser#i+e n+enti#e La(SL".

The $ore recent case of A#to *#s Transport +ystems" Inc." (. *a#tista clari'es thatan e$ploee who is paid on purel co$$ission !asis is entitled to S;:According to the $ple$enting Rules, Ser#ice ncenti#e ;ea#e shall not appl toe$ploees classi'ed as >'eld personnel% The phrase >other e$ploees whoseperfor$ance is unsuper#ised ! the e$ploer $ust not !e understood as aseparate classi'cation of e$ploees to which ser#ice incenti#e lea#e shall not !egranted% Rather, it ser#es as an a$pli'cation of the interpretation of the de'nitionof 'eld personnel under the ;a!or Code as those >whose actual hours of wor0 in the'eld cannot !e deter$ined with reasona!le certaint%

The sa$e is true with respect to the phrase >those who are engaged on tas or contract !asis" p#rely commission !asis%$ Said phrase should !e related with >'eldpersonnel, appling the rule on e%#sdem generis that general and unli$ited ter$sare restrained and li$ited ! the particular ter$s that the follow% Kence,e$ploees engaged on tas0 or contract !asis or paid on purel co$$ission !asisare not auto$aticall e@e$pted fro$ the grant of ser#ice incenti#e lea#e, unless,the fall under the classi'cation of 'eld personnel%

According to Article +6 of the ;a!or Code, >'eld personnel shall refer to non1agricultural e$ploees who regularl perfor$ their duties awa fro$ the principalplace of !usiness or !ranch oBce of the e$ploer and whose actual hours of wor0in the 'eld cannot !e deter$ined with reasona!le certaint%

GR No. 7/-

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nion o Filipro !5plo%ees (F!" #s. 4i#ar& 2r. NLRC an$NestlJ ',ilippines& n+. (or5erl% Filipro& n+."

2anuar% -0& 1//-

Respon$ents sales personnel are not +o#ere$ 3% t,e ,oli$a% pa%. T,e la

re<uires t,at t,e a+tual ,ours in t,e fel$ 3e reasona3l% as+ertaine$.

Respon$ents sales personnel are e#aluate$ 3% t,e result o t,eir or9 an$ not 3% t,e a+tual ,ours o fel$ or9 ,i+, are ,ar$l% sus+epti3le to$eter5ination.

T,ere is no 5erit in respon$ent NestlJ +lai5 o o#erpa%5ent o o#erti5e

an$ nig,t $i=erential pa% an$ si+9 an$ #a+ation lea#e 3enefts t,e

+o5putation o ,i+, are all 3ase$ on t,e $ail% rate& sin+e t,e $ail% rate is

still t,e sa5e 3eore an$ ater t,e grant o ,oli$a% pa%. T,e respon$ent

ar3itrator:s or$er to +,ange t,e $i#isor ro5 -1 to -61 $a%s oul$ resultin a loer $ail% rate ,i+, is #iolati#e o t,e pro,i3ition on nonE$i5inution

o 3enefts oun$ in Arti+le 100 o t,e La3or Co$e.

Respon$ent Nestle:s in#o+ation o solutio indebiti & or pa%5ent 3% 5ista9e&

$ue to its use o -1 $a%s as $i#isor 5ust ail in lig,t o t,e La3or Co$e

5an$ate t,at Kall $ou3ts in t,e i5ple5entation an$ interpretation o t,is

Co$e& in+lu$ing its i5ple5enting rules an$ regulations& s,all 3e resol#e$

in a#or o la3or.K

Ponente: Justice "utierre(, Jr%FACTS:

This la!or dispute ste$s fro$ the e@clusion of sales personnel fro$ the holida pa

award and the change of the di#isor in the co$putation of !ene'ts fro$ 64) to 69)

das%

Respondent Filipro nc% -now Nestl Philippines nc%. 'led a petition for declaratorrelief see0ing a ruling on its rights and o!ligations respecting clai$s of its $onthlpaid e$ploees for holida pa in the light of the Courts decision in Chartered*an Employees Association ( % Ople -)+ SCRA 6H L)*+4M.%&oth Filipro and the Union of Filipino E$ploees -UFE. agreed to su!$it the case for

#oluntar ar!itration and appointed respondent i#ar, Jr%

)7



4oluntar% Ar3iter (1"@ directed Filipro to pa its $onthl paid e$ploees holida

pa pursuant to Article *< of the Code, su!2ect onl to the e@clusions and li$itations

speci'ed in Article +6 and such other legal restrictions as are pro#ided for in the

Code%

Filipro 'led a $otion for clari'cation see0ing:)% The li$itation of the award to three ears6% The e@clusion of sales$en, sales representati#es, truc0 dri#ers, $erchandisers

and $edical representati#es -hereinafter referred to as sales personnel. fro$the award of the holida pa5 and

% Geduction fro$ the holida pa award of o#erpa$ent for o#erti$e, nightdi/erential, #acation and sic0 lea#e !ene'ts due to the use of 64) di#isor%

UFE answered that the award should !e $ade e/ecti#e fro$ the date of e/ecti#it

of the ;a!or Code, that their sales personnel are not 'eld personnel and are

therefore entitled to holida pa, and that the use of 64) as di#isor is an esta!lished

e$ploee !ene't which cannot !e di$inished%

4oluntar% Ar3iter (-"@ The e/ecti#it of the holida pa award shall retroact to

No#e$!er ), )*H<, the date of e/ecti#it of the ;a!or Code% The co$panQs sales

personnel are 'eld personnel and, as such, are not entitled to holida pa% n the

grant of )7 dasQ holida pa, the di#isor should !e changed fro$ 64) to 69) and

ordered the rei$!urse$ent of o#erpa$ent for o#erti$e, night di/erential, #acation

and sic0 lea#e pa due to the use of 64) das as di#isor%

Nestle and UFE 'led their respecti#e $otions for partial reconsideration% Respondent

Ar!itrator treated the two $otions as appeals and forwarded the case to the N;RC

which issued a resolution dated Da 64, )*+H re$anding the case to the

respondent ar!itrator on the ground that it has no 2urisdiction to re#iew decisions in#oluntar ar!itration cases

Respondent ar!itrator refused to ta0e cogni(ance of the case reasoning that he had

no $ore 2urisdiction to continue as ar!itrator !ecause he had resigned fro$ ser#ice

e/ecti#e Da ), )*+95hence, this petition%

SSUE=S:3=N Sales Personnel are entitled to holida pa%

3=N conco$itant with the award of holida pa, the di#isor should !e changed fro$

64) to 69) das and whether or not the pre#ious use of 64) as di#isor resulted ino#erpa$ent for o#erti$e, night di/erential, #acation and sic0 lea#e pa%

GECSON: The court aBr$ed the #oluntar ar!iters decision with $odi'cations% The di#isor to!e used in co$puting holida pa shall !e 64) das% The holida pa as a!o#edirected shall !e co$puted fro$ Octo!er 6, )*+<%

))



Respon$ents sales personnel are not +o#ere$ 3% t,e ,oli$a% pa%. T,e lare<uires t,at t,e a+tual ,ours in t,e fel$ 3e reasona3l% as+ertaine$.

The law re?uires that the actual hours of wor0 in the 'eld !e reasona!lascertained% The co$pan is una!le to deter$ine whether the sales personnel,e#en if the report to the oBce !efore +:77 a%$% prior to 'eld wor0 and co$e !ac0at <:7 p%$, reall spend the hours in !etween in actual 'eld wor0%

The court concurs with the respondent ar!itrator that: The period !etween +:77 a%$% and <:77 or <:7 p%$% of the sales personnelco$prises their hours of wor0 in the 'eld, the e@tent or scope and result of whichare su!2ect to their indi#idual capacit and industr and which cannot !edeter$ined with reasona!le certaint% This is the reason wh e/ecti#e super#isiono#er 'eld wor0 of sales$en and $edical representati#es, truc0 dri#ers and$erchandisers is practicall a phsical i$possi!ilit% Conse?uentl, the aree@cluded fro$ the ten holidas with pa award%

Respon$ents sales personnel are e#aluate$ 3% t,e result o t,eir or9 an$ not 3% t,e a+tual ,ours o fel$ or9 ,i+, are ,ar$l% sus+epti3le to

$eter5ination.

UFE clai$s that since the sales personnel are gi#en incenti#e !onus e#er ?uarter

!ased on their perfor$ance pro#es that their actual hours of wor0 in the 'eld can !e

deter$ined with reasona!le certaint%

The court thin0s otherwise since the criteria for granting incenti#e !onus are: -).

attaining or e@ceeding sales #olu$e !ased on sales target5 -6. good collection

perfor$ance5 -. proper co$pliance with good $ar0et hgiene5 -<. good

$erchandising wor05 -4. $ini$al $ar0et returns5 and -9. proper truc0 $aintenance%

These criteria indicate that these sales personnel are gi#en incenti#e !onuses

precisel !ecause of the diBcult in $easuring their actual hours of 'eld wor0%

These e$ploees are e#aluated ! the result of their wor0 and not ! the actual

hours of 'eld wor0 which are hardl suscepti!le to deter$ination%

n Mig#el *rewery" Inc% ( % ,emocratic )a!or Organi-ation -+ SCRA 9) L)*9M, the

court held that: >the reasons for e@cluding an outside sales$an are fairl apparent%

Such a sales$an, to a greater e@tent, wor0s indi#iduall% There are no restrictions

respecting the ti$e he shall wor0 and he can earn as $uch or as little, within the

range of his a!ilit, as his a$!ition dictates% n lieu of o#erti$e he ordinarilrecei#es co$$issions as e@tra co$pensation% Ke wor0s awa fro$ his e$ploerQs

place of !usiness, is not su!2ect to the personal super#ision of his e$ploer, and his

e$ploer has no wa of 0nowing the nu$!er of hours he wor0s per da%

T,ere is no 5erit in respon$ent NestlJ +lai5 o o#erpa%5ent o o#erti5e

an$ nig,t $i=erential pa% an$ si+9 an$ #a+ation lea#e 3enefts t,e

)6



+o5putation o ,i+, are all 3ase$ on t,e $ail% rate& sin+e t,e $ail% rate is

still t,e sa5e 3eore an$ ater t,e grant o ,oli$a% pa%. T,e respon$ent

ar3itrator:s or$er to +,ange t,e $i#isor ro5 -1 to -61 $a%s oul$ result

in a loer $ail% rate ,i+, is #iolati#e o t,e pro,i3ition on nonE$i5inution

o 3enefts oun$ in Arti+le 100 o t,e La3or Co$e.

The criterion laid down in the Chartered *an case, the use of 64) dasQ di#isor !

respondent Filipro indicates that holida pa is not et included in the e$ploeeQs

salar, otherwise the di#isor should ha#e !een 69)%

t $ust !e stressed that the dail rate, assu$ing there are no inter#ening salar

increases, is a constant 'gure for the purpose of co$puting o#erti$e and night

di/erential pa and co$$utation of sic0 and #acation lea#e credits% Necessaril, the

dail rate should also !e the sa$e !asis for co$puting the )7 unpaid holidas%

The respondent ar!itratorQs order to change the di#isor fro$ 64) to 69) das would

result in a lower dail rate which is #iolati#e of the prohi!ition on non1di$inution of

!ene'ts found in Article )77 of the ;a!or Code% To $aintain the sa$e dail rate if

the di#isor is ad2usted to 69) das, then the di#idend, which represents the

e$ploeeQs annual salar, should correspondingl !e increased to incorporate the

holida pa% To illustrate, if prior to the grant of holida pa, the e$ploeeQs annual

salar is P64,)77, then di#iding such 'gure ! 64) das, his dail rate is P)77%77

After the pa$ent of )7 dasQ holida pa, his annual salar alread includesholida pa and totals P69,)77 -P64,)77 ),777.% Gi#iding this ! 69) das,

the dail rate is still P)77%77% There is thus no $erit in respondent NestleQs clai$ of

o#erpa$ent of o#erti$e and night di/erential pa and sic0 and #acation lea#e

!ene'ts, the co$putation of which are all !ased on the dail rate, since the dail

rate is still the sa$e !efore and after the grant of holida pa%

Respon$ent Nestle:s in#o+ation o solutio indebiti & or pa%5ent 3% 5ista9e&

$ue to its use o -1 $a%s as $i#isor 5ust ail in lig,t o t,e La3or Co$e

5an$ate t,at Kall $ou3ts in t,e i5ple5entation an$ interpretation o t,is

Co$e& in+lu$ing its i5ple5enting rules an$ regulations& s,all 3e resol#e$

in a#or o la3or.K

Doreo#er, prior to Septe$!er ), )*+7, when the co$pan was on a 91da wor0ing

schedule, the di#isor used ! the co$pan was 7, indicating that the )7 holidas

were li0ewise not paid% 3hen Filipro shifted to a 41da wor0ing sche!ule on

)



Septe$!er ), )*+7, it had the chance to rectif its error, if e#er there was one !ut

did not do so% t is now too late to allege pa$ent ! $ista0e%

LABOR STANDARDS

TOPIC: inds o/ Employees: &eg#lar (s. +easonal

GR No. 11?-7Benares #s. 'an+,o& et. al

)<



April -/& -00

T,e la pro#i$es or t,ree 9in$s o e5plo%ees@

)% Regular e$ploees 1 engaged to perfor$ acti#ities which are usuall

necessar or desira!le in the usual !usiness or trade of the e$ploer5

6% Pro2ect e$ploees 1 e$plo$ent has !een '@ed for a speci'c pro2ect orunderta0ing, the co$pletion or ter$ination of which has !een deter$ined at theti$e of the engage$ent of the e$ploee or where the wor0 or ser#ice to !eperfor$ed is seasonal in nature and the e$plo$ent is for the duration of theseason5 and

% Casual e$ploees 1 neither regular nor pro2ect e$ploees

n a+ien$a Fati5a Case& t,e +ourt ,el$ t,at t,e a+t t,at t,e% $o notor9 +ontinuousl% or one ,ole %ear 3ut onl% or t,e $uration o t,e

season $oes not $etra+t ro5 +onsi$ering t,e5 in regular e5plo%5entsin+e in a litan% o +ases t,is Court ,as alrea$% settle$ t,at seasonalor9ers ,o are +alle$ to or9 ro5 ti5e to ti5e an$ are te5poraril% lai$o= $uring o=Eseason are not separate$ ro5 ser#i+e in t,at perio$& 3ut5erel% +onsi$ere$ on lea#e until reEe5plo%e$.

T,e pri5ar% stan$ar$ or $eter5ining regular e5plo%5ent is t,ereasona3le +onne+tion 3eteen t,e parti+ular a+ti#it% peror5e$ 3% t,ee5plo%ee vis-à-vis t,e usual tra$e or 3usiness o t,e e5plo%er.

n <uasiE;u$i+ial pro+ee$ings& t,e <uantu5 o e#i$en+e re<uire$ to supportt,e fn$ings o t,e NLRC is onl% su3stantial e#i$en+e or t,at a5ount o

rele#ant e#i$en+e ,i+, a reasona3le 5in$ 5ig,t a++ept as a$e<uate to ;usti% a +on+lusion.

),en t,ere is no s,oing o +lear& #ali$ an$ legal +ause or t,eter5ination o e5plo%5ent& t,e la +onsi$ers t,e 5atter a +ase o illegal$is5issal an$ t,e 3ur$en is on t,e e5plo%er to pro#e t,at t,e ter5inationas or a ;ust or aut,orie$ +ause.

Ponente: Justice TingaFACTS:Kacienda Daasin is a sugar cane plantation located in Negros Occidental with an

area of )616< hectares owned and $anaged ! petitioner &enares%

Respondent Pancho alleged that the ha#e started wor0ing as sugar far$ wor0erson #arious dates ranging fro$ )*9< to )*+4%

On Jul )**), co$plainant Pancho thru counsel wrote to the Regional Girector of GO;E for intercession particularl in the $atter of wages and other !ene'ts$andated ! law%

)4



On Septe$!er )**), a routine inspection was done ! GO;E% Accordingl, theRegional Girector $ade an endorse$ent of the instant case to the RegionalAr!itration &ranch for proper hearing and disposition%

On Octo!er )**), co$plainants alleged to ha#e !een ter$inated without !eing paidter$ination !ene'ts ! respondent in retaliation to their reporting to GO;E a!outtheir wor0ing conditions and other $andator !ene'ts%

Respondent Pancho 'led a for$al co$plaint for illegal dis$issal with $one clai$s%

La3or Ar3iter@ Benares a#or ! dis$issing Panchos co$plaint for lac0 of $erit%

NLRC@ 'an+,os a#or ! re#ersing ;a!or Ar!iters decision holding thatrespondents attained the status of regular seasonal wor0ers of Kacienda Daasinha#ing wor0ed therein fro$ )*9<1)*+4%

CA@ 'an+,os a#or ! aBr$ing N;RCs decision and dening &enares $otion forreconsideration%

Kence, this instant petition

SSUE=S:3hether respondents are regular e$ploees of Kacienda Daasin and thus entitledto their $onetar !ene'ts%

3hether respondents were illegall ter$inated

GECSON: The court denied &enares petition and aBr$ed CAs decision%

The law pro#ides -Art% 6+7. that: an e$plo$ent shall !e dee$ed to !e regularwhere the e$ploee has !een engaged to perfor$ acti#ities which are usuallnecessar or desira!le in the usual !usiness or trade of the e$ploer, e@cept wherethe e$plo$ent has !een '@ed for a speci'c pro2ect or underta0ing the co$pletionor ter$ination of which has !een deter$ined at the ti$e of the engage$ent of thee$ploee or where the wor0 or ser#ice to !e perfor$ed is seasonal in nature andthe e$plo$ent is for the duration of the season%

An e$plo$ent shall !e dee$ed to !e casual if it is not co#ered ! the preceding

paragraph: Pro#ided, That, an e$ploee who has rendered at least one ear of ser#ice, whether such ser#ice is continuous or !ro0en, shall !e considered a regulare$ploee with respect to the acti#it in which he is e$ploed and his e$plo$entshall continue while such acti#it e@ists%

T,e la pro#i$es or t,ree 9in$s o e5plo%ees@

)9



)% Regular e$ploees 1 engaged to perfor$ acti#ities which are usuallnecessar or desira!le in the usual !usiness or trade of the e$ploer5

6% Pro2ect e$ploees 1 e$plo$ent has !een '@ed for a speci'c pro2ect orunderta0ing, the co$pletion or ter$ination of which has !een deter$ined at theti$e of the engage$ent of the e$ploee or where the wor0 or ser#ice to !e

perfor$ed is seasonal in nature and the e$plo$ent is for the duration of theseason5 and

% Casual e$ploees 1 neither regular nor pro2ect e$ploees

n a+ien$a Fati5a Case& t,e +ourt ,el$ t,at t,e a+t t,at t,e% $o notor9 +ontinuousl% or one ,ole %ear 3ut onl% or t,e $uration o t,eseason $oes not $etra+t ro5 +onsi$ering t,e5 in regular e5plo%5entsin+e in a litan% o +ases t,is Court ,as alrea$% settle$ t,at seasonalor9ers ,o are +alle$ to or9 ro5 ti5e to ti5e an$ are te5poraril% lai$o= $uring o=Eseason are not separate$ ro5 ser#i+e in t,at perio$& 3ut

5erel% +onsi$ere$ on lea#e until reEe5plo%e$

T,e pri5ar% stan$ar$ or $eter5ining regular e5plo%5ent is t,ereasona3le +onne+tion 3eteen t,e parti+ular a+ti#it% peror5e$ 3% t,ee5plo%ee vis-à-vis t,e usual tra$e or 3usiness o t,e e5plo%er. Thisconnection can !e deter$ined ! considering the nature of the wor0 perfor$ed andits relation to the sche$e of the particular !usiness or trade in its entiret% f thee$ploee has !een perfor$ing the 2o! for at least a ear, e#en if the perfor$anceis not continuous and $erel inter$ittent, the law dee$s repeated and continuingneed for its perfor$ance as suBcient e#idence of the necessit if notindispensa!ilit of that acti#it to the !usiness% Kence, the e$plo$ent isconsidered regular, !ut onl with respect to such acti#it and while such acti#it

e@ists%

n <uasiE;u$i+ial pro+ee$ings& t,e <uantu5 o e#i$en+e re<uire$ to supportt,e fn$ings o t,e NLRC is onl% su3stantial e#i$en+e or t,at a5ount o rele#ant e#i$en+e ,i+, a reasona3le 5in$ 5ig,t a++ept as a$e<uate to ;usti% a +on+lusion.t is a settled rule that the factual 'ndings of ?uasi12udicial agencies which ha#eac?uired e@pertise in the $atters entrusted to their 2urisdiction are accorded ! thisCourt not onl respect !ut e#en 'nalit

),en t,ere is no s,oing o +lear& #ali$ an$ legal +ause or t,eter5ination o e5plo%5ent& t,e la +onsi$ers t,e 5atter a +ase o illegal

$is5issal an$ t,e 3ur$en is on t,e e5plo%er to pro#e t,at t,e ter5inationas or a ;ust or aut,orie$ +ause.n this case, as found !oth ! the N;RC and the Court of Appeals, petitioner failed topro#e an such cause for the dis$issal of respondents%

)H



LABOR STANDARDS

TOPIC: Article 82 Employer0Employee &elationship: Fo#r0Fold Test1 ControlTest

GR Nos. ???0E?1*a9ati a3er$as,er%& n+. (*"& Le$es5a an$ no+en+io

#s. NLRC& Diosana& San$igan ng *anggagaang 'ilipino(San$igan" H TC' an$ its 5e53ers.

No#e53er 1& 1/?/

)e ,a#e repeate$l% ,el$ in +ountless $e+isions t,at t,e test o e5plo%erEe5plo%ee relations,ip is ourEol$@ (1" t,e sele+tion an$ engage5ent o t,e e5plo%eeI (-" t,e pa%5ent o agesI (" t,e poer o $is5issalI an$(" t,e poer to +ontrol t,e e5plo%ee:s +on$u+t. t is t,e so +alle$K+ontrol testK t,at is t,e 5ost i5portant ele5ent. T,is si5pl% 5eans t,e$eter5ination o ,et,er t,e e5plo%er +ontrols or ,as reser#e$ t,e rig,tto +ontrol t,e e5plo%ee not onl% as to t,e result o t,e or9 3ut also as to

t,e 5eans an$ 5et,o$ 3% ,i+, t,e sa5e is to 3e a++o5plis,e$.

Sin+e pri#ate respon$ents are regular e5plo%ees& ne+essaril% t,e

argu5ent t,at t,e% are in$epen$ent +ontra+tors 5ust ail.

'ri#ate respon$ents are not entitle$ to ser#i+e in+enti#e lea#e pa% an$

,oli$a% pa% 3e+ause as pie+eErate or9ers t,e% all un$er t,e e>+eptions

set ort, in t,e i5ple5enting rule.

An e5plo%er ,as t,e rig,t to $is5iss an e5plo%ee ,ose +ontinuan+e in

t,e ser#i+e is ini5i+al to t,e e5plo%ers interest.

)+



Rig,t to $is5iss or ;ust an$ #ali$ +ause pertains in t,e frst pla+e to t,e

e5plo%er.

Ponente: Chief Justice Fernan

FACTS:Pri#ate respondents ha#e !een wor0ing for petitioner Da0ati Ka!erdasher, nc% astailors, sea$stress, sewers, !asters -$anlililip. and plantsadoras% The are paid ona piece1rate !asis e@cept Angeles and Sera'na who are paid on a $onthl !asis% naddition to their piece1rate, the are gi#en a dail allowance of three -P %77. pesospro#ided the report for wor0 !efore *:7 a%$% e#er da%

The co$pan re?uired the$ to wor0 fro$ or !efore *:7 a%$% up to 9:77 or H:77

p%$% fro$ Donda to Saturda and during pea0 periods e#en on Sundas and

holidas%

On Jul )*+<, Sandigan ng Danggagawang Pilipino, a la!or organi(ation of the

respondent wor0ers, 'led a co$plaint for

-a. underpa$ent of the !asic wage5

-!. underpa$ent of li#ing allowance5

-c. non1pa$ent of o#erti$e wor05

-d. non1pa$ent of holida pa5

-e. non1pa$ent of ser#ice incenti#e pa5

-f. )th $onth pa5 and

-g. !ene'ts pro#ided for under 3age Orders Nos% ), 6, , < and 4%

Pending the case, apata allegedl ad$itted that he copied the design of petitionerKa!erdasher% &ut in the afternoon, when again ?uestioned a!out said !arong,Pelo!ello and apata denied ownership of the sa$e% Conse?uentl a $e$orandu$was issued to each of the$ to e@plain on or !efore Fe!ruar <, )*+4 wh no actionshould !e ta0en against the$ for accepting a 2o! order which is pre2udicial and in

direct co$petition with the !usiness of the co$pan% &oth respondents allegedl didnot su!$it their e@planation and did not report for wor0% Kence, the weredis$issed ! petitioners on Fe!ruar <, )*+4% The countered ! 'ling a co$plaintfor illegal dis$issal%

La3or Ar3iter@ 'elo3ello an$ Mapatas a#or, 'nding the co$pan guilt of illegal dis$issal and ordering the$ to reinstate Pelo!ello and apata

)*



La3or Ar3iter (on +ase fle$ 3% San$igan"@ Co5pan%s a#or ! dis$issingthe sa$e for lac0 of $erit%

NLRC@ San$igans a#or ! aBr$ing ;a!or Ar!iters decision !ut li$ited the!ac0wages to Pelo!ello and apata to one ear%

SSUE=S:3hether an e$ploer1e$ploee relationship e@ists !etween DK and pri#aterespondents

n the aBr$ati#e, whether pri#ate respondents were illegall dis$issed%

GECSON: The court $odi'ed ;a!or Ar!iter and N;RCs decision ! dis$issing Pelo!ello andapatas co$plaint for illegal dis$issal and deleted the award of ser#ice incenti#elea#e pa%

)e ,a#e repeate$l% ,el$ in +ountless $e+isions t,at t,e test o e5plo%erEe5plo%ee relations,ip is ourEol$@ (1" t,e sele+tion an$ engage5ent o t,e e5plo%eeI (-" t,e pa%5ent o agesI (" t,e poer o $is5issalI an$(" t,e poer to +ontrol t,e e5plo%ee:s +on$u+t. t is t,e so +alle$K+ontrol testK t,at is t,e 5ost i5portant ele5ent. T,is si5pl% 5eans t,e$eter5ination o ,et,er t,e e5plo%er +ontrols or ,as reser#e$ t,e rig,tto +ontrol t,e e5plo%ee not onl% as to t,e result o t,e or9 3ut also as tot,e 5eans an$ 5et,o$ 3% ,i+, t,e sa5e is to 3e a++o5plis,e$.

The case re#eals the $ost i$portant re?uisite of control is present% As gleaned fro$

the operations of petitioner, when a custo$er enters into a contract with the

ha!erdasher or its proprietor, the latter directs an e$ploee who $a !e a tailor,

pattern $a0er, sewer or plantsadora to ta0e the custo$erQs $easure$ents, andto sew the pants, coat or shirt as speci'ed ! the custo$er% Super#ision is acti#el

$anifested in all these aspects the $anner and ?ualit of cutting, sewing and

ironing%

That pri#ate respondents are regular e$ploees is further pro#en ! the fact that

the ha#e to report for wor0 regularl fro$ *:7 a%$% to 9:77 or H:77 p%$% and are

paid an additional allowance of P %77 dail if the report for wor0 !efore *:7 a%$%

and which is forfeited when the arri#e at or after *:7 a%$%

Sin+e pri#ate respon$ents are regular e5plo%ees& ne+essaril% t,e

argu5ent t,at t,e% are in$epen$ent +ontra+tors 5ust ail.

67



Pri#ate respondents did not e@ercise independence in their own $ethods, !ut on the

contrar were su!2ect to the control of petitioners fro$ the !eginning of their tas0s

to their co$pletion% Unli0e independent contractors who generall rel on their own

resources, the e?uip$ent, tools, accessories, and paraphernalia used ! pri#ate

respondents are supplied and owned ! petitioners% Pri#ate respondents are totall

dependent on petitioners in all these aspects%

'ri#ate respon$ents are not entitle$ to ser#i+e in+enti#e lea#e pa% an$

,oli$a% pa% 3e+ause as pie+eErate or9ers t,e% all un$er t,e e>+eptions

set ort, in t,e i5ple5enting rule.

3hile pri#ate respondents are entitled to Dini$u$ 3age, CO;A and )th Donth

Pa, the are not entitled to ser#ice incenti#e lea#e pa !ecause as piece1rate

wor0ers !eing paid at a '@ed a$ount for perfor$ing wor0 irrespecti#e of ti$e

consu$ed in the perfor$ance thereof, the fall under one of the e@ceptions as 'eld

personnel% For the sa$e reason pri#ate respondents cannot also clai$ holida pa%

An e5plo%er ,as t,e rig,t to $is5iss an e5plo%ee ,ose +ontinuan+e in

t,e ser#i+e is ini5i+al to t,e e5plo%ers interest.

Assu$ing that pri#ate respondents acts do not constitute a!andon$ent, their

!latant disregard of their e$ploerQs $e$orandu$ is undou!tedl an open de'ance

to the lawful orders of the latter, a 2usti'a!le ground for ter$ination of e$plo$ent! the e$ploer e@pressl pro#ided for in Article 6+-a. of the ;a!or Code as well

as a clear indication of guilt for the co$$ission of acts ini$ical to the interests of

the e$ploer, another 2usti'a!le ground for dis$issal under the sa$e Article of the

;a!or Code, paragraph -c.% 3ell esta!lished in our 2urisprudence is the right of an

e$ploer to dis$iss an e$ploee whose continuance in the ser#ice is ini$ical to

the e$ploerQs interest%

Rig,t to $is5iss or ;ust an$ #ali$ +ause pertains in t,e frst pla+e to t,e

e5plo%er.

t has !een esta!lished that the right to dis$iss or otherwise i$pose disciplinar

sanctions upon an e$ploee for 2ust and #alid cause, pertains in the 'rst place to

the e$ploer, as well as the authorit to deter$ine the e@istence of said cause in

accordance with the nor$s of due process%

6)



FACTS: The $ale petitioners wor0ed as !ar!ers while the two fe$ale petitioners wor0ed as$anicurists in New ;oo0 &ar!er Shop owned ! respondent co$pan ;ao EntengCo%, nc%

Petitioners clai$ that when the !egan wor0ing for the said !ar!er shop, it was asingle proprietorship owned and $anaged ! Dr% ;ao% n )*+6, his childrenorgani(ed a corporation which the registered in the SEC as ;ao Enteng Co% nc% withOng as president% The too0 o#er New ;oo0 &ar!er Shop and continued the!usiness%

n )**4, Ong infor$ed the$ that the !uilding wherein the New ;oo0 &ar!er Shopwas located had !een sold and that their ser#ices were no longer needed%

n lieu of the e#ent, petitioners 'led with the N;RC Ar!itration &ranch a co$plaintfor illegal dis$issal, illegal deduction, separation pa, non1pa$ent of )th $onthpa, and salar di/erentials%

n response, pri#ate respondent clai$ that:

)% ;ao Enteng Co$pan, nc% did not ta0e o#er the $anage$ent of the New;oo0 &ar!er Shop%

6% After the death ;ao Enteng petitioner were #er!all infor$ed ti$e and againthat the partnership $a fold up anti$e !ecause no!od in the fa$il hadthe ti$e to !e at the !ar!er shop to loo0 after their interest

% New ;oo0 &ar!er Shop had alwas !een a 2oint #enture partnership and theoperation and $anage$ent of the !ar!er shop was left entirel to petitioners

<% Ker fatherQs contri!ution to the 2oint #enture included the place of !usiness,

pa$ent for utilities including electricit, water, etc% while petitioners asindustrial partners, supplied the la!or5 and4% The !ar!er shop was allowed to re$ain open up to April )**4 ! the children

!ecause the wanted to gi#e the partners a chance at $a0ing itwor0% E#entuall, the were forced to close the !ar!er shop !ecause thecontinued to lose $one while petitioners earned fro$ it% Trinidad also added

9% The pri#ate respondents had no control o#er petitioners who were free toco$e and go as the wished% Ad$ittedl too ! petitioners the recei#ed 'ftpercent to si@t percent of the gross paid ! custo$ers%

H% So$e of the petitioners were allowed to register with the Social SecuritSste$ as e$ploees of ;ao Enteng Co$pan, nc% onl as an act of acco$$odation% All the SSS contri!utions were $ade ! petitioners%

Doreo#er, Osias Corporal, Elpidio ;acap and Teresita Flores were not a$ongthose registered with the Social Securit Sste$%+% 3ithout an e$ploee1e$ploer relationship petitioners clai$ for )th $onth

pa and separation pa ha#e no !asis in fact and in law%

La3or Ar3iter@ Respon$ent Co5pan%s a#or ! dis$issing the co$plaint on'nding that:

)% The co$plainants and the respondents were engaged in a 2oint #enture andthat there e@isted no e$ploer1e$ploee relation !etween the$5 and

6



6% The !ar!er shop was closed due to serious !usiness losses or 'nancialre#erses and conse?uentl declared that the law does not co$pel theesta!lish$ent to pa separation pa to whoe#er were its e$ploees%

NLRC@ Respon$ent Co5pan%s a#or ! aBr$ing ;a!or Ar!iters decision>Co$plainants failed to show the e@istence of e$ploer1e$ploee relationship

under the fourwa test esta!lished ! the Supre$e Court% t is a co$$on practicein the &ar!er Shop industr that !ar!ers suppl their own scissors and ra(ors andthe split their earnings with the owner of the !ar!er shop% The onl capital of theowner is the place of wor0 whereas the !ar!ers pro#ide the s0ill and e@pertise inser#icing custo$ers% The onl control e@ercised ! the owner of the !ar!er shop isto ascertain the nu$!er of custo$ers ser#iced ! the !ar!er in order to deter$inethe sharing of pro'ts% T,e 3ar3ers 5a%3e +,ara+terie$ as in$epen$ent+ontra+tors 3e+ause t,e% are un$er t,e +ontrol o t,e 3ar3er s,op oneronl% it, respe+t to t,e result o t,e or9& 3ut not it, respe+t to t,e$etails or 5anner o peror5an+e. The !ar!ers are engaged in an independentcalling re?uiring special s0ills a#aila!le to the pu!lic at large%

N;RC denied petitioners $otion for reconsideration5 hence, this instant petition

SSUE=S:3=N an e$ploer1e$ploee relationship e@isted !etween petitioners and pri#aterespondent ;ao Enteng Co$pan, nc%

GECSON: The court granted the petition, set aside N;RCs decision and ordered respondentco$pan to pa the petitioners:

)% )th Donth Pa6% Separation Pa

!#en t,e s,aring o pro+ee$s or e#er% ;o3 o petitioners in t,e 3ar3ers,op $oes not 5ean t,e% ere not e5plo%ees o t,e respon$ent +o5pan%.

The ;a!or Ar!iterQs 'ndings that the parties were engaged in a 2oint #enture areunsupported ! an docu$entar e#idence% t should !e noted that aside fro$ theself1ser#ing aBda#it of ;ao Ong, there were no other e#identiar docu$ents, norwritten partnership agree$ents presented% The sharing of proceeds for e#er 2o! of petitioners in the !ar!er shop does not $ean the were not e$ploees of therespondent co$pan%

An in$epen$ent +ontra+tor is one ,o un$erta9es K;o3 +ontra+tingK& i.e.& aperson ,o (a" +arries on an in$epen$ent 3usiness an$ un$erta9es t,e+ontra+t or9 on ,is on a++ount un$er ,is on responsi3ilit% a++or$ing

to ,is on 5anner an$ 5et,o$& ree ro5 t,e +ontrol an$ $ire+tion o ,ise5plo%er or prin+ipal in all 5atters +onne+te$ it, t,e peror5an+e o t,eor9 e>+ept as to t,e results t,ereo& an$ (3" ,as su3stantial +apital orin#est5ent in t,e or5 o tools& e<uip5ent& 5a+,ineries& or9 pre5ises&an$ ot,er 5aterials ,i+, are ne+essar% in t,e +on$u+t o t,e 3usiness.

The did not carr on an independent !usiness% Neither did the underta0e cuttinghair and $anicuring nails, on their own as their responsi!ilit, and in their own$anner and $ethod% The ser#ices of the petitioners were engaged ! the

6<



respondent co$pan to attend to the needs of its custo$ers in its !ar!ershop% Dore i$portantl, the petitioners, indi#iduall or collecti#el, did not ha#e asu!stantial capital or in#est$ent in the for$ of tools, e?uip$ent, wor0 pre$ises andother $aterials which are necessar in the conduct of the !usiness of therespondent co$pan% 3hat the petitioners owned were onl co$!s, scissors, ra(ors,nail cutters, nail polishes, the nippers 1 nothing else% & no standard can these !e

considered su!stantial capital necessar to operate a !ar!er shop%

T,e olloing ele5ents 5ust 3e present or an e5plo%erEe5plo%eerelations,ip to e>ist@ (1" t,e sele+tion an$ engage5ent o t,e or9ersI (-"poer o $is5issalI (" t,e pa%5ent o ages 3% ,ate#er 5eansI an$ ("t,e poer to +ontrol t,e or9er:s +on$u+t& it, t,e latter assu5ingpri5a+% in t,e o#erall +onsi$eration.As to the control test, the following facts indu!ita!l re#eal that respondentco$pan wielded control o#er the wor0 perfor$ance of petitioners, in that:

)% The wor0ed in the !ar!er shop owned and operated ! the respondents56% The were re?uired to report dail and o!ser#e de'nite hours of wor05% The were not free to accept other e$plo$ent elsewhere !ut de#oted their

full ti$e wor0ing in the New ;oo0 &ar!er Shop for all the 'fteen -)4. ears theha#e wor0ed until April )4, )**45<% That so$e ha#e wor0ed with respondents as earl as in the )*97Qs54% That petitioner Patricia Nas was instructed ! the respondents to watch theother si@9% Petitioners in their dail tas0%

Certainl, respondent co$pan was clothed with the power to dis$iss an or all of the$ for 2ust and #alid cause% Petitioners were unargua!l perfor$ing wor0necessar and desira!le in the !usiness of the respondent co$pan%

t is no longer true t,at 5e53ers,ip to SSS is pre$i+ate$ on t,e e>isten+eo an e5plo%eeEe5plo%er relations,ip sin+e t,e poli+% is no to en+ouragee#en t,e selEe5plo%e$ $ress5a9ers& 5ani+urists an$ ;eepne% $ri#ers to3e+o5e SSS 5e53ers& e +oul$ not agree it, pri#ate respon$ents t,atpetitioners ere registere$ it, t,e So+ial Se+urit% S%ste5 as t,eire5plo%ees onl% as an a++o55o$ation. As we ha#e earlier $entioned pri#ate respondent showed no proof to their clai$that petitioners were the ones who solel paid all SSS contri!utions% t is unli0elthat respondents would report certain persons as their wor0ers, pa their SSSpre$iu$ as well as their wages if it were not true that the were indeed theire$ploees%

3e agree with the la!or ar!iter that there was suBcient e#idence that the !ar!er

shop was closed due to serious !usiness losses and respondent co$pan closed its!ar!er shop !ecause the !uilding where the !ar!er shop was located was sold% Ane5plo%er 5a% a$opt poli+ies or +,anges or a$;ust5ents in its operationsto insure proft to itsel or prote+t in#est5ent o its sto+9,ol$ers. n t,ee>er+ise o su+, 5anage5ent prerogati#e& t,e e5plo%er 5a% 5erge or+onsoli$ate its 3usiness it, anot,er& or sell or $ispose all or su3stantiall%all o its assets an$ properties ,i+, 5a% 3ring a3out t,e $is5issal orter5ination o its e5plo%ees in t,e pro+ess.

64



LABOR STANDARDS

TOPIC: Article 82 Employer0Employee &elationship

GR No. 1676--

69



Tong9o #s. *anua+turers Lie nsuran+e Co. (',ils."& n+.an$ De Dios

No#e53er 07& -00?

FourEol$ test to $eter5ine t,e e>isten+e o t,e ele5ents o an e5plo%erE

e5plo%ee relations,ip. n +ontrol test& an e5plo%erEe5plo%eerelations,ip e>ists ,ere t,e person or ,o5 t,e ser#i+es are peror5e$reser#es t,e rig,t to +ontrol not onl% t,e en$ to 3e a+,ie#e$ 3ut also t,e5eans to 3e use$ in rea+,ing su+, en$

Control not onl% applies to t,e or9 or goal to 3e $one 3ut also to t,e5eans an$ 5et,o$s to a++o5plis, it. Not all or5s o +ontrol oul$esta3lis, an e5plo%erEe5plo%ee relations,ip.

t,e spe+if+ rules an$ regulations t,at are enor+e$ against insuran+eagents or 5anagers are su+, t,at oul$ $ire+tl% a=e+t t,e 5eans an$5et,o$s 3% ,i+, su+, agents or 5anagers oul$ a+,ie#e t,e o3;e+ti#es

set 3% t,e insuran+e +o5pan%& t,e% are e5plo%ees o t,e insuran+e+o5pan%.

Ponente: Justice elasco, Jr%FACTS:Petitioner Tong0o started his professional relationship with Danulife on Jul )*HH !#irtue of a Career Agents Agree$ent% Guring this ti$e, Ge Gios was its Presidentand Chief E@ecuti#e OBcer -CEO.% The agree$ent pro#ided that the co$pan $ater$inate his agree$ent for an !reach or #iolation of an the pro#isions ! theAgent ! gi#ing written notice to the Agent within 'fteen -)4. das fro$ the ti$e of the disco#er of the !reach%

n )*+, Tong0o !eca$e Unit Danager and in )**7, he !eca$e !ranch $anager%

Pro!le$ started in 677), when Danulife instituted Danpower Ge#elop$entProgra$s% n No#e$!er 677), Ge Gios addressed a letter to Tong0o stating that hisregion was the lowest perfor$er in ter$s of recruiting in 6777 and continues tore$ain one of the laggards in this area and ordering hi$ to hire a co$petentassistant who would help hi$ in his wor0%

n Gece$!er 677), Ge Gios wrote another letter ter$inating Tong0os ser#ices sincethe latter was allegedl did not co$pl to the earlier letter%

Tong0o 'led a co$plaint for illegal dis$issal% Tong0o, in a !id to esta!lish an

e$ploer1e$ploee relationship, alleged that Ge Gios ga#e hi$ speci'c directi#eson how to $anage his area of responsi!ilit in the latterQs letter dated No#e$!er 9,677) and further clai$ed that Danulife e@ercised control o#er hi$%

La3or Ar3iter@ *anulies a#or ! dis$issing Tong0os co$plaint for lac0 of 2urisdiction, there !eing no e$ploer1e$ploee relationship%

6H



NLRC@ Tong9os a#or ! re#ersing ;a!or Ar!iters decision, holding that Tong0owas regular e$ploee of Danulife and was illegall dis$issed fro$ e$plo$ent !respondents%

CA@ *anulies a#or ! re#ersing N;RCs decision, 'nding a!sence of e$ploer1e$ploee relationship%

SSUE=S:3=N e$ploer1e$ploee relationship e@ists !etween Danulife and Tong0o%

Kolding in the aBr$ati#e, 3=N Danulife was guilt of illegal dis$issal%

GECSON: The court granted Tong0os petition ! re#ersing CAs decision and reinstatingN;RCs with $odi'cations in the pa$ent of !ac0wages, separation pa, no$inalda$ages and attornes fees%

FourEol$ test to $eter5ine t,e e>isten+e o t,e ele5ents o an e5plo%erEe5plo%ee relations,ip. n +ontrol test& an e5plo%erEe5plo%eerelations,ip e>ists ,ere t,e person or ,o5 t,e ser#i+es are peror5e$reser#es t,e rig,t to +ontrol not onl% t,e en$ to 3e a+,ie#e$ 3ut also t,e5eans to 3e use$ in rea+,ing su+, en$n Pacic Cons#ltants International Asia" Inc. (. +chon/eld, the Court set out theele$ents of an e$ploer1e$ploee relationship, thus:

Jurisprudence is 'r$l settled that whene#er the e@istence of an e$plo$entrelationship is in dispute, four ele$ents constitute the relia!le ardstic0:

-a. the selection and engage$ent of the e$ploee5

-!. the pa$ent of wages5

-c. the power of dis$issal5 and

-d. the e$ploerQs power to control the e$ploeeQs conduct%

t is the so1called K+ontrol testK which constitutes the $ost i$portant inde@ of thee@istence of the e$ploer1e$ploee relationship that is, whether the e$ploercontrols or has reser#ed the right to control the e$ploee not onl as to the resultof the wor0 to !e done !ut also as to the $eans and $ethods ! which the sa$e isto !e acco$plished 1 an e5plo%erEe5plo%ee relations,ip e>ists ,ere t,eperson or ,o5 t,e ser#i+es are peror5e$ reser#es t,e rig,t to +ontrolnot onl% t,e en$ to 3e a+,ie#e$ 3ut also t,e 5eans to 3e use$ in rea+,ingsu+, en$

Control not onl% applies to t,e or9 or goal to 3e $one 3ut also to t,e5eans an$ 5et,o$s to a++o5plis, it. Not all or5s o +ontrol oul$esta3lis, an e5plo%erEe5plo%ee relations,ip.n +on-a (. A*+0C*3 *roadcasting Corporation and Ins#lar )i/e Ass#rance Co." )td.(s. 3)&C, we held that the line should !e drawn !etween rules that $erel ser#e as

6+



guidelines towards the achie#e$ent of the $utuall desired result without dictatingthe $eans or $ethods to !e e$ploed in attaining it, and those that control or '@the $ethodolog and !ind or restrict the part hired to the use of such $eans% Thefrst, which ai$ onl to pro$ote the result, create no e$ploer1e$ploeerelationship unli0e the se+on$, which address !oth the result and the $eans usedto achie#e it%

t,e spe+if+ rules an$ regulations t,at are enor+e$ against insuran+eagents or 5anagers are su+, t,at oul$ $ire+tl% a=e+t t,e 5eans an$5et,o$s 3% ,i+, su+, agents or 5anagers oul$ a+,ie#e t,e o3;e+ti#esset 3% t,e insuran+e +o5pan%& t,e% are e5plo%ees o t,e insuran+e+o5pan%. n the instant case, Danulife had the power of control o#er Tong0o that would $a0ehi$ its e$ploee% A$ong the co$pan regulations of Danulife are the di/erentcodes of conduct such as the Agent Code of Conduct, Danulife Financial Code of Conduct, and Danulife Financial Code of Conduct Agree$ent, which de$onstratethe power of control e@ercised ! the co$pan o#er Tong0o%

GR No. 1676--Tong9o #s. *anua+turers Lie nsuran+e Co. (',ils."& n+.

an$ De Dios 2une -/& -010

La3or Co$e +on+ept o K+ontrolK ,as to 3e +o5pare$ an$ $istinguis,e$it, t,e K+ontrolK t,at 5ust ne+essaril% e>ist in a prin+ipalEagentrelations,ip.

T,ree sets o las t,e nsuran+e Co$e& t,e La3or Co$e an$ t,e Ci#il Co$e E,a#e to 3e +onsi$ere$ in loo9ing at t,e present +ase an$ also t,eAgree5ent t,at t,e parties a$opte$ to go#ern t,eir relations,ip orpurposes o selling t,e insuran+e t,e +o5pan% o=ers.

Rules regar$ing t,e $esire$ results (e..& t,e re<uire$ #olu5e to +ontinueto <uali% as a +o5pan% agent& rules to +,e+9 on t,e para5eters on t,eaut,orit% gi#en to t,e agent& an$ rules to ensure t,at in$ustr%& legal an$et,i+al rules are olloe$" are 3uiltEin ele5ents o +ontrol spe+if+ to aninsuran+e agen+% an$ s,oul$ not an$ +annot 3e rea$ as ele5ents o +ontrol t,at atten$ an e5plo%5ent relations,ip go#erne$ 3% t,e La3orCo$e.

Distin+tions 3eteen agen+ies an$ e5plo%5ent are su8+ientl%esta3lis,e$ 3% la an$ ;urispru$en+e.

T,e $eter5inati#e ele5ent is t,e +ontrol e>er+ise$ o#er t,e one ren$eringser#i+e. T,e e5plo%er +ontrols t,e e5plo%ee 3ot, in t,e results an$ in t,e5eans an$ 5anner o a+,ie#ing t,is result. T,e prin+ipal in an agen+%relations,ip& on t,e ot,er ,an$& also ,as t,e prerogati#e to e>er+ise+ontrol o#er t,e agent in un$erta9ing t,e assigne$ tas9 3ase$ on t,epara5eters outline$ in t,e pertinent las.

6*



B% t,e Agree5ent:s e>press ter5s& Tong9o ser#e$ as an Kinsuran+e agentKor *anulie& not as an e5plo%ee. T,e +,ara+teriation t,e parties ga#e tot,eir relations,ip in t,e Agree5ent +annot si5pl% 3e 3rus,e$ asi$e3e+ause it e53o$ies t,eir intent at t,e ti5e t,e% entere$ t,e Agree5ent&an$ t,e% ere go#erne$ 3% t,is un$erstan$ing t,roug,out t,eir

relations,ip.

An i5portant lesson t,at t,e !"st Insul#" Li$e +ase tea+,es us is t,at a+o55it5ent to a3i$e 3% t,e rules an$ regulations o an insuran+e+o5pan% $oes not i%so $#&to 5a9e t,e insuran+e agent an e5plo%ee.Gui$elines in$i+ati#e o la3or la K+ontrol&K as t,e !"st Insul#" Li$e +asetells us& s,oul$ not 5erel% relate to t,e 5utuall% $esira3le result inten$e$3% t,e +ontra+tual relations,ipI t,e% 5ust ,a#e t,e nature o $i+tating t,e5eans or 5et,o$s to 3e e5plo%e$ in attaining t,e result& or o f>ing t,e5et,o$olog% an$ o 3in$ing or restri+ting t,e part% ,ire$ to t,e use o t,ese 5eans.

T,e a3sen+e o e#i$en+e s,oing *anulies +ontrol o#er Tong9os+ontra+tual $uties points to t,e a3sen+e o an% e5plo%erEe5plo%eerelations,ip 3eteen Tong9o an$ *anulie. n t,e +onte>t o t,eesta3lis,e$ e#i$en+e& Tong9o re5aine$ an agent all alongI alt,oug, ,issu3se<uent $uties 5a$e ,i5 a lea$ agent it, lea$ers,ip role& ,e asne#ert,eless onl% an agent ,ose 3asi+ +ontra+t %iel$s no e#i$en+e o 5eansEan$E5anner +ontrol.

Ponente: Justice &rionFACTS:Respondent Danulife 'led this $otion for reconsideration in response to the courtsNo#e$!er 7H, 677+ decision 'nding an e$ploer1e$ploee relationship !etweenDanulife and petitioner Tong0o%

SSUE=S:3hether an agenc or an e$plo$ent relationship e@ists !etween Tong0o andDanulife

GECSON: The court granted Danulifes $otion for reconsideration ! re#ersing its No#e$!erH, 677+ decision and dis$issing Tong0os petition%

La3or Co$e +on+ept o K+ontrolK ,as to 3e +o5pare$ an$ $istinguis,e$

it, t,e K+ontrolK t,at 5ust ne+essaril% e>ist in a prin+ipalEagentrelations,ip. The principal cannot !ut also ha#e his or her sa in directing the course of theprincipal1agent relationship, especiall in cases where the co$pan1representati#erelationship in the insurance industr is an agenc%

T,ree sets o las t,e nsuran+e Co$e& t,e La3or Co$e an$ t,e Ci#il Co$e E,a#e to 3e +onsi$ere$ in loo9ing at t,e present +ase an$ also t,e

7



Agree5ent t,at t,e parties a$opte$ to go#ern t,eir relations,ip orpurposes o selling t,e insuran+e t,e +o5pan% o=ers.

To forget these other laws is to ta0e a $opic #iew of the present case and to add tothe uncertainties that now e@ist in considering the legal relationship !etween theinsurance co$pan and its agents%

Rules regar$ing t,e $esire$ results (e..& t,e re<uire$ #olu5e to +ontinueto <uali% as a +o5pan% agent& rules to +,e+9 on t,e para5eters on t,eaut,orit% gi#en to t,e agent& an$ rules to ensure t,at in$ustr%& legal an$et,i+al rules are olloe$" are 3uiltEin ele5ents o +ontrol spe+if+ to aninsuran+e agen+% an$ s,oul$ not an$ +annot 3e rea$ as ele5ents o +ontrol t,at atten$ an e5plo%5ent relations,ip go#erne$ 3% t,e La3orCo$e.

Distin+tions 3eteen agen+ies an$ e5plo%5ent are su8+ientl%esta3lis,e$ 3% la an$ ;urispru$en+e.Code de'nes an agent as a person LwhoM !inds hi$self to render so$e ser#ice orto do so$ething in representation or on !ehalf of another, with the consent or

authorit of the latter% 3hile this is a #er !road de'nition that on its face $a e#enenco$pass an e$plo$ent relationship, the distinctions !etween agenc ande$plo$ent are suBcientl esta!lished ! law and 2urisprudence%

T,e $eter5inati#e ele5ent is t,e +ontrol e>er+ise$ o#er t,e one ren$eringser#i+e.

The e$ploer controls the e$ploee !oth in the results and in the $eans and$anner of achie#ing this result% The principal in an agenc relationship, on theother hand, also has the prerogati#e to e@ercise control o#er the agent inunderta0ing the assigned tas0 !ased on the para$eters outlined in the pertinentlaws%

B% t,e Agree5ent:s e>press ter5s& Tong9o ser#e$ as an Kinsuran+e agentKor *anulie& not as an e5plo%ee.

The Agree$entQs legal characteri(ation of the nature of the relationship cannot !econclusi#e and !inding on the courts5 as the dissent clearl stated, thecharacteri(ation of the 2uridical relationship the Agree$ent e$!odied is a $atter of law that is for the courts to deter$ine%

At the sa$e ti$e, though, t,e +,ara+teriation t,e parties ga#e to t,eirrelations,ip in t,e Agree5ent +annot si5pl% 3e 3rus,e$ asi$e 3e+ause ite53o$ies t,eir intent at t,e ti5e t,e% entere$ t,e Agree5ent& an$ t,e%ere go#erne$ 3% t,is un$erstan$ing t,roug,out t,eir relations,ip.

An i5portant lesson t,at t,e !"st Insul#" Li$e +ase tea+,es us is t,at a+o55it5ent to a3i$e 3% t,e rules an$ regulations o an insuran+e+o5pan% $oes not i%so $#&to 5a9e t,e insuran+e agent an e5plo%ee.Neither do guidelines so$ehow restricti#e of the insurance agentQs conductnecessaril indicate control as this ter$ is de'ned in 2urisprudence% Gui$elinesin$i+ati#e o la3or la K+ontrol&K as t,e !"st Insul#" Li$e +ase tells us&s,oul$ not 5erel% relate to t,e 5utuall% $esira3le result inten$e$ 3% t,e+ontra+tual relations,ipI t,e% 5ust ,a#e t,e nature o $i+tating t,e 5eans

)



or 5et,o$s to 3e e5plo%e$ in attaining t,e result& or o f>ing t,e5et,o$olog% an$ o 3in$ing or restri+ting t,e part% ,ire$ to t,e use o t,ese 5eans.

T,e a3sen+e o e#i$en+e s,oing *anulies +ontrol o#er Tong9os+ontra+tual $uties points to t,e a3sen+e o an% e5plo%erEe5plo%ee

relations,ip 3eteen Tong9o an$ *anulie. n the conte@t of the esta!lished e#idence, Tong0o re$ained an agent all along5although his su!se?uent duties $ade hi$ a lead agent with leadership role, he wasne#ertheless onl an agent whose !asic contract ields no e#idence of $eans1and1$anner control%

LABOR STANDARDS

TOPIC: Article 82 Ta4i ,ri(er Employer0Employee &elationship

GR No. 117/*artine #s. NLRC& Corro& Cru& Del#o& Coli3ao& Ogana an$

Al3ao*a% -/& 1//7

As earl% as *ar+, 1/6& in N#tion#l L#bo" 'nion v. (inl#s#n, t,is Courtrule$ t,at t,e relations,ip 3eteen ;eepne% onersoperators on one

6



,an$ an$ ;eepne% $ri#ers on t,e ot,er un$er t,e 3oun$ar% s%ste5 is t,ato e5plo%erEe5plo%ee an$ not o lessorElessee.

T,e a+t t,at t,e $ri#ers $o not re+ei#e f>e$ ages 3ut get onl% t,at ine>+ess o t,e soE+alle$ K3oun$ar%K t,e% pa% to t,e oneroperator is notsu8+ient to it,$ra t,e relations,ip 3eteen t,e5 ro5 t,at o

e5plo%er an$ e5plo%ee.

n t,e present +ase& pri#ate respon$ents si5pl% assu5e$ t,e +ontinuan+eo an e5plo%erEe5plo%ee relations,ip 3eteen t,e5 an$ petitioner& ,ens,e too9 o#er t,e operation o t,e 3usiness ater t,e $eat, o ,er sonRaul *artine& it,out an% supporting e#i$en+e. Conse<uentl%& e +annotsustain or la+9 o 3asis t,e a+tual fn$ing o respon$ent NLRC on t,ee>isten+e o e5plo%erEe5plo%ee relations,ip 3eteen petitioner an$pri#ate respon$ents. Clearl%& su+, fn$ing e5anates ro5 gra#e a3use o $is+retion. )it, t,is +on+lusion& +onsi$eration o t,e issue on illegal$is5issal 3e+o5es utile an$ irrele#ant.

Ponente: JusticeFACTS:Raul Dartine( owned four ta@ica! units and pri#ate respondents wor0ed for hi$ asdri#ers% On Darch )**6, Raul Dartine( died lea#ing his $other, Nell Dartine(, ashis sole heir%

On Jul )**6, pri#ate respondents lodged a co$plaint against Raul Dartine( andpetitioner Nell Acta Dartine( !efore the ;a!or Ar!iter for #iolation of P% G% +4) andillegal dis$issal% After the death of Raul Dartine(, petitioner too0 o#er the$anage$ent and operation of the !usiness and that on or a!out 66 June )**6 sheinfor$ed the$ that !ecause of diBcult in $aintaining the !usiness, she wasselling the units together with the corresponding franchises% Kowe#er, petitioner

did not proceed with her plan5 instead, she assigned the units to other dri#ers%

La3or Ar3iter@ *artine a#or ! dis$issing the co$plaint on the followinggrounds:

a. Pri#ate respondentsQ clai$s !eing personal were e@tinguished upon the deathof Raul Dartine(5

!. Petitioner was a $ere housewife who did not possess the re?uiredco$petence to $anage the !usiness5 and,

c. Pri#ate respondents were not entitled to )th $onth pa !ecause thee@istence of e$ploer1e$ploee relationship was dou!tful on account of the!oundar sste$ adopted ! the parties%

NLRC@ 'ri#ate Respon$ents a#or ! setting aside ;a!or Ar!iters decision andordering Dartine( to grant separation pa on the following grounds:

-a. Pri#ate respondents were regular dri#ers !ecause pa$ent of wages, which isone of the essential re?uisites for the e@istence of e$plo$ent relation, $aeither !e '@ed, on co$$ission, !oundar, piece1rate or tas0 !asis5



-!. The $anage$ent of the !usiness passed on to petitioner who e#en replacedpri#ate respondents with a new set of dri#ers5 and,

-c. The clai$s of pri#ate respondents sur#i#ed the death of Raul Dartine(considering that the !usiness did not cease operation outright !ut continuedpresu$a!l, in the a!sence of proof of sale, up to the $o$ent%

Dartine( $otion for reconsideration was denied5 hence, this instant petition%

SSUE=S:3hether an e$ploer1e$ploee relationship e@ists !etween Dartine( and pri#aterespondents

GECSON: The court granted Dartine( petition, set aside N;RCs decision and reinstated ;a!orAr!iters decision%

As earl% as *ar+, 1/6& in N#tion#l L#bo" 'nion v. (inl#s#n, t,is Courtrule$ t,at t,e relations,ip 3eteen ;eepne% onersoperators on one

,an$ an$ ;eepne% $ri#ers on t,e ot,er un$er t,e 3oun$ar% s%ste5 is t,ato e5plo%erEe5plo%ee an$ not o lessorElessee.

Therein we e@plained that in the lease of chattels the lessor loses co$plete controlo#er the chattel leased although the lessee cannot !e rec0less in the use thereof,otherwise he would !e responsi!le for the da$ages to the lessor% n the case of

2eepne owners=operators and 2eepne dri#ers, the for$er e@ercise super#ision andcontrol o#er the latter%

T,e a+t t,at t,e $ri#ers $o not re+ei#e f>e$ ages 3ut get onl% t,at ine>+ess o t,e soE+alle$ K3oun$ar%K t,e% pa% to t,e oneroperator is notsu8+ient to it,$ra t,e relations,ip 3eteen t,e5 ro5 t,at o e5plo%er an$ e5plo%ee.

The doctrine is applica!le ! analog to the present case% Thus, pri#aterespondents were e$ploees of Raul Dartine( !ecause the had !een engaged toperfor$ acti#ities which were usuall necessar or desira!le in the usual !usiness ortrade of the e$ploer% The records show that pri#ate respondents had !eene$ploed since 67 Octo!er )*+* e@cept for Ogana, the Gel#os, Al!ao and Coli!aowho were e$ploed on later dates%

*ere allegation is not e#i$en+e. The a!o#e 'ndings, howe#er, were culled fro$ $ere allegations in pri#aterespondentsQ position paper% &ut $ere allegation is not e#idence% t is a !asic rule ine#idence that each part $ust pro#e his aBr$ati#e allegation% n Op#lencia IcePlant and +torage (. 3)&C we ruled that no particular for$ of e#idence is re?uired to

pro#e the e@istence of an e$ploer1e$ploee relationship% An co$petent andrele#ant e#idence to pro#e the relationship $a !e ad$itted% n that case, therelationship was suBcientl pro#ed ! testi$onial e#idence%

n t,e present +ase& pri#ate respon$ents si5pl% assu5e$ t,e +ontinuan+eo an e5plo%erEe5plo%ee relations,ip 3eteen t,e5 an$ petitioner& ,ens,e too9 o#er t,e operation o t,e 3usiness ater t,e $eat, o ,er sonRaul *artine& it,out an% supporting e#i$en+e. Conse<uentl%& e +annot

<



sustain or la+9 o 3asis t,e a+tual fn$ing o respon$ent NLRC on t,ee>isten+e o e5plo%erEe5plo%ee relations,ip 3eteen petitioner an$pri#ate respon$ents. Clearl%& su+, fn$ing e5anates ro5 gra#e a3use o $is+retion. )it, t,is +on+lusion& +onsi$eration o t,e issue on illegal$is5issal 3e+o5es utile an$ irrele#ant.

GR No. 11/-6? 2ar$in& et al. #s. NLRC an$ Goo$5an Ta>i (',il;a5a

nternational& n+."*a% -/& 1//7

T,e relations,ip 3eteen ;eepne% onersoperators on one ,an$ an$ ;eepne% $ri#ers on t,e ot,er un$er t,e 3oun$ar% s%ste5 is t,at o e5plo%erEe5plo%ee an$ not o lessorElessee.

T,e a+t t,at t,e $ri#ers $o not re+ei#e f>e$ ages 3ut get onl% t,at in

e>+ess o t,e soE+alle$ K3oun$ar%K t,e% pa% to t,e oneroperator is notsu8+ient to it,$ra t,e relations,ip 3eteen t,e5 ro5 t,at o e5plo%er an$ e5plo%ee.

'etitioners& 3eing e5plo%ees o pri#ate respon$ent& +an 3e $is5isse$ onl%or ;ust an$ aut,orie$ +ause& an$ ater a=or$ing t,e5 noti+e an$ ,earingprior to ter5ination.

Ponente: Justice uisu$!ingFACTS:Petitioners Jardin used to dri#e for Phil2a$a nternational, nc%, a do$esticcorporation engaged in the operation of >"ood$an Ta@i under the !oundar

sste$% Petitioners earned an a#erage of P<77%77 a da !ut pri#ate respondentco$pan ad$ittedl regularl deducts P7%77 fro$ the dri#ers supposedl forwashing of the ta@i units% &elie#ing that the deduction is illegal, petitioners decidedto for$ a la!or union to protect their rights and interests%

Upon learning a!out the plan of petitioners, pri#ate respondent refused to letpetitioners dri#e their ta@ica!s when the reported for wor0 on August )**), and onsucceeding das% Petitioners suspected that the were singled out !ecause thewere the leaders and acti#e $e$!ers of the proposed union%

Petitioners 'led with the la!or ar!iter a co$plaint for unfair la!or practice, illegaldis$issal and illegal deduction of washing fees%

La3or Ar3iter@ ',il;a5as a#or ! dis$issing petitioners co$plaint for lac0 of $erit%

NLRC@ 2ar$ins a#or ! re#ersing the ;a!or Ar!iters decision, declaring thatpetitioners are e$ploees of respondent, as such, their dis$issal $ust !e for a 2ustcause and ordering respondent to reinstate petitioners to their for$er positions, patheir !ac0wages and rei$!urse the dri#ers the a$ount paid as washing charges%

4



NLRC (-"@ 2ar$ins a#or ! dening respondent co$pans $otion forreconsideration%

NLRC ("@ ',il;a5as a#or ! granting its petition and declaring that N;RC hasno 2urisdiction in the case there !eing no e$ploer1e$ploee relationship !etweenpetitioner and pri#ate respondent since their relationship is that of leasehold under

the Ci#il Code rather than the ;a!or Code%

N;RC denied Jardins $otion for reconsideration5 hence, this instant petition% SSUE=S:3hether an e$ploer1e$ploee relationship e@ists !etween "ood$an Ta@i-Phil2a$a nternational, nc%. and pri#ate respondents

GECSON: The court granted Jardins petition ! setting aside N;RCs decision and reinstatingthe ;a!or Ar!iters decision with $odi'cations ! deleting the rei$!urse$ent of thewashing charges to the dri#ers%

T,e relations,ip 3eteen ;eepne% onersoperators on one ,an$ an$ ;eepne% $ri#ers on t,e ot,er un$er t,e 3oun$ar% s%ste5 is t,at o e5plo%erEe5plo%ee an$ not o lessorElessee.3e e@plained that in the lease of chattels, the lessor loses co$plete control o#er thechattel leased although the lessee cannot !e rec0less in the use thereof, otherwisehe would !e responsi!le for the da$ages to the lessor% n the case of 2eepneowners=operators and 2eepne dri#ers, the for$er e@ercise super#ision and controlo#er the latter% The $anage$ent of the !usiness is in the owners hands% The owneras holder of the certi'cate of pu!lic con#enience $ust see to it that the dri#erfollows the route prescri!ed ! the franchising authorit and the rules pro$ulgatedas regards its operation%

3e ha#e applied ! analog the a!o#e stated doctrine to the relationships !etween!us owner=operator and !us conductor, auto1calesa owner=operator and dri#er, andrecentl !etween ta@i owners=operators and ta@i dri#ers%

Kence, petitioners are undou!tedl e$ploees of pri#ate respondent !ecause asta@i dri#ers the perfor$ acti#ities which are usuall necessar or desira!le in theusual !usiness or trade of their e$ploer%

T,e a+t t,at t,e $ri#ers $o not re+ei#e f>e$ ages 3ut get onl% t,at ine>+ess o t,e soE+alle$ K3oun$ar%K t,e% pa% to t,e oneroperator is notsu8+ient to it,$ra t,e relations,ip 3eteen t,e5 ro5 t,at o e5plo%er an$ e5plo%ee.

'etitioners& 3eing e5plo%ees o pri#ate respon$ent& +an 3e $is5isse$ onl%or ;ust an$ aut,orie$ +ause& an$ ater a=or$ing t,e5 noti+e an$ ,earingprior to ter5ination.

Ter$ination of e$plo$ent $ust !e e/ected in accordance with law% The 2ust andauthori(ed causes for ter$ination of e$plo$ent are enu$erated under Articles

9



6+6, 6+ and 6+< of the ;a!or Code% The re?uire$ent of notice and hearing is set1out in Article 6HH -!. of the said Code%

n the instant case, pri#ate respondent had no #alid cause to ter$inate thee$plo$ent of petitioners% Neither were there two -6. written notices sent !pri#ate respondent infor$ing each of the petitioners that the had !een dis$issed

fro$ wor0% This lac0 of #alid cause and failure on the part of pri#ate respondent toco$pl with the twin1notice re?uire$ent underscored the illegalit surroundingpetitioners dis$issal%

LABOR STANDARDS

TOPIC: Article 82 5eepney ,ri(er Employer0Employee &elationship

GR No. 16??14illa5aria& 2r. #s. Court o Appeals an$ Busta5ante

2une -/& -010

Not e#er% $ispute 3eteen an e5plo%er an$ e5plo%ee in#ol#es 5atterst,at onl% t,e La3or Ar3iter an$ t,e NLRC +an resol#e in t,e e>er+ise o

t,eir a$;u$i+ator% or <uasiE;u$i+ial poers. A+tions 3eteen e5plo%ersan$ e5plo%ees ,ere t,e e5plo%erEe5plo%ee relations,ip is 5erel%in+i$ental is it,in t,e e>+lusi#e original ;uris$i+tion o t,e regular+ourts.

n National La3or nion #s. Dinglasan& 2eepne% oneroperatorE$ri#errelations,ip un$er t,e 3oun$ar% s%ste5 is t,at o e5plo%erEe5plo%ee an$not lessorElessee. T,is $o+trine as a8r5e$& un$er si5ilar a+tualsettings& in )#boo v. Be"n#"do an$ L#nt#&o, S". v. Ll#*#s& an$ asanalogousl% applie$ to go#ern t,e relations,ips 3eteen autoE&#les# oneroperator an$ $ri#er& 3us oneroperator an$ +on$u+tor an$ta>i oneroperator an$ $ri#er.

T,e a+t t,at t,e $ri#er $oes not re+ei#e f>e$ ages 3ut onl% t,e e>+esso t,e 3oun$ar% gi#en to t,e oneroperator is not su8+ient to +,anget,e e5plo%erEe5plo%ee relations,ip 3eteen t,e5.ndu!ita!l, the dri#er perfor$s acti#ities which are usuall necessar or desira!le

in the usual !usiness or trade of the owner=operator%

H



La3or Ar3iter@ 4illa5arias a#or ! dis$issing the co$plaint on the ground thatilla$aria, Jr% presented the contract of &oundar1Kulog, as well as the PAA;A;A, topro#e their clai$ that co$plainant #iolated the ter$s of their contract andafterwards a!andoned the #ehicle assigned to hi$%

NLRC@ 4illa5arias a#or ! aBr$ing ;a!or Ar!iters decision on the ground thatthe ;a!or Ar!iter had no 2urisdiction since the 2uridical relationship !etween&usta$ante and illa$aria was that of a #endor and #endee%

CA@ Busta5antes a#or ! re#ersing N;RCs decision, ordering illa$aria, Jr% topa &usta$ante !ac0wages and separation pa%>The appellate court ruled that the ;a!or Ar!iter had 2urisdiction o#er &usta$antesco$plaint% Under the as#nd#an, the relationship !etween hi$ and illa$aria wasdual: that of #endor1#endee and e$ploer1e$ploee% The CA ratiocinated thatilla$arias e@ercise of control o#er &usta$antes conduct in operating the 2eepneis inconsistent with the for$ers clai$ that he was not engaged in thetransportation !usiness%>

SSUE=S:3hether an e$ploer1e$ploee relationship e@ists !etween illa$aria, Jr% and&usta$ante

GECSON: The court denied illa$arias petition and aBr$ed CAs decision

Not e#er% $ispute 3eteen an e5plo%er an$ e5plo%ee in#ol#es 5atterst,at onl% t,e La3or Ar3iter an$ t,e NLRC +an resol#e in t,e e>er+ise o t,eir a$;u$i+ator% or <uasiE;u$i+ial poers. A+tions 3eteen e5plo%ers

an$ e5plo%ees ,ere t,e e5plo%erEe5plo%ee relations,ip is 5erel%in+i$ental is it,in t,e e>+lusi#e original ;uris$i+tion o t,e regular+ourts.An e$ploer1e$ploee relationship is an indispensa!le 2urisdictional re?uisite% The

2urisdiction of ;a!or Ar!iters and the N;RC under Article 6)H of the ;a!or Code isli$ited to disputes arising fro$ an e$ploer1e$ploee relationship which can onl!e resol#ed ! reference to the ;a!or Code, other la!or statutes or their collecti#e!argaining agree$ent% &ut when the principal relief is to !e granted under la!orlegislation or a collecti#e !argaining agree$ent, the case falls within the e@clusi#e

2urisdiction of the ;a!or Ar!iter and the N;RC e#en though a clai$ for da$ages$ight !e asserted as an incident to such clai$%

n National La3or nion #s. Dinglasan& 2eepne% oneroperatorE$ri#errelations,ip un$er t,e 3oun$ar% s%ste5 is t,at o e5plo%erEe5plo%ee an$not lessorElessee. T,is $o+trine as a8r5e$& un$er si5ilar a+tualsettings& in )#boo v. Be"n#"do an$ L#nt#&o, S". v. Ll#*#s& an$ asanalogousl% applie$ to go#ern t,e relations,ips 3eteen autoE&#les# oneroperator an$ $ri#er& 3us oneroperator an$ +on$u+tor an$ta>i oneroperator an$ $ri#er.

*



T,e a+t t,at t,e $ri#er $oes not re+ei#e f>e$ ages 3ut onl% t,e e>+esso t,e 3oun$ar% gi#en to t,e oneroperator is not su8+ient to +,anget,e e5plo%erEe5plo%ee relations,ip 3eteen t,e5.ndu!ita!l, the dri#er perfor$s acti#ities which are usuall necessar or desira!le

in the usual !usiness or trade of the owner=operator%

T,e ellEsettle$ rule is t,at an o3ligation is not no#ate$ 3% an instru5entt,at e>pressl% re+ognies t,e ol$ one& +,anges onl% t,e ter5s o pa%5ent&

an$ a$$s ot,er o3ligations not in+o5pati3le it, t,e ol$ pro#isions or

,ere t,e ne +ontra+t 5erel% supple5ents t,e pre#ious one. T,e to

o3ligations o t,e respon$ent to re5it to petitioner t,e 3oun$ar%E

+ulo +an stan$ toget,er.

T,e ;uri$i+al relations,ip o e5plo%erEe5plo%ee 3eteen petitioner an$

respon$ent as not negate$ 3% t,e oregoing stipulation in

t,e #sundu#n& +onsi$ering t,at petitioner retaine$ +ontrol o

respon$ents +on$u+t as $ri#er o t,e #e,i+le.

As correctl ruled ! the CA: The e@ercise of control ! pri#ate respondent o#er petitioners conduct in operating

the 2eepne he was dri#ing is inconsistent with pri#ate respondents clai$ that he

is, or was, not engaged in the transportation !usiness5 that, e#en if petitioner was

allowed to let so$e other person dri#e the unit, it was not shown that he did so5

that the e@istence of an e$plo$ent relation is not dependent on how the wor0er is

paid !ut on the presence or a!sence of control o#er the $eans and $ethod of the

wor05 that the a$ount earned in e@cess of the >!oundar h#log is e?ui#alent to

wages5 and that the fact that the power of dis$issal was not $entioned in

the as#nd#an did not $ean that pri#ate respondent ne#er e@ercised such power,

or could not e@ercise such power%

LABOR STANDARDS

TOPIC: Article 82 Employer0Employee &elationship: Masiador and+entenciador

GR No. 1/6-6

<7



Se53lante an$ 'ilar #s. CA& Gallera De *an$aue an$ LootSpouses

August 1& -011

Ponente: Justice elasco, Jr%

FACTS:Petitioner Se$!lante and Pilar assert that spouses ;oot hired the$ in the coc0pit asthe oBcial Dasiador and Sentenciador% A Dasiador ta0es !ets and orders the start of the 'ght while a Sentenciador o#ersees the proper gaBng of 'ghting coc0s,deter$ines the 'ghting coc0s phsical condition and capa!ilities to continue the'ght and e#entuall declares the result of the coc0'ght%

Se$!lante recei#es P6 777%77 a wee0 while Pilar recei#es P 477%77% The wor0fro$ )p$ to )6 $idnight e#er Tuesda, 3ednesda, Saturda and Sunda e#erwee0, e@cluding coc0'ghts held on Special Kolidas% The further assert thatspouses ;oot issued the$ e$ploees identi'cation cards that the wear e#er ti$e

the report for dut%

On 677, their ser#ices were ter$inated5 hence, the 'led a co$plaint for illegaldis$issal against respondents%

;oot spouses den that petitioners were their e$ploees and allege that the wereassociates of their independent contractor% ;oot spouses further alleged thatpetitioners ha#e no regular wor0ing ti$e or da and free to decide for the$sel#eswhether to report for wor0 or not on an coc0'ghting da% n ti$es when there arefew coc0'ghts in 7allera de Manda#e, petitioners go to other coc0pits in the #icinit%

La3or Ar3iter@ Se53lantes a#or ! 'nding the$ as regular e$ploees of spouses ;oot since the perfor$ed wor0 necessar and indispensi!le to the!usiness of the spouses% The ;a!or Ar!iter also ruled that Se$!lante and Pilar wereillegall dis$issed5 hence, ordered spouse ;oot to pa the$ their full !ac0wagesand separation pa%

NLRC 1@ Se53lantes a#or ! dening spouses ;oot appeal due to its non1perfection for its appeal1!ond%

NLRC -@ Loots a#or ! granting the spouses $otion for reconsideration on'nding that there was no e$ploer1e$ploee relationship !etween Se$!lante andPilar to the spouses ;oot, the latter ha#ing no part in selection and engage$ent of the for$er%

CA@ Loots a#or ! aBr$ing the decision of N;RC on ta0ing notice that refereesand !et1ta0ers in a coc0'ght need to ha#e the 0ind of e@pertise that is characteristicof the ga$e to interpret $essages con#eed ! $ere gestures% Kence, petitionersare a0in to independent contractors who possess uni?ue s0ills, e@pertise, and talentto distinguish the$ fro$ ordinar e$ploees% Further, respondents did not suppl

<)



petitioners with the tools and instru$entalities the needed to perfor$ wor0%Petitioners onl needed their uni?ue s0ills and talents to perfor$ their 2o!as Masiador and +entenciador %

SSUE=S:3=N an e$ploer1e$ploee relationship e@ists !etween Se$!lante -Dasiador. andPilar -Sentenciador. and ;oot Spouses -Coc0pit owner.

GECSON: The court aBr$ed N;RC and CAs decision%

T,e rule on t,e posting o an appeal 3on$ +annot $eeat t,e su3stanti#erig,ts o respon$ents to 3e ree ro5 an unarrante$ 3ur$en o anseringor an illegal $is5issal or ,i+, t,e% ere ne#er responsi3le.

Sin+e t,e +o5plainants peror5e$ t,eir un+tions as 5asia$or an$senten+ia$or ree ro5 t,e $ire+tion an$ +ontrol o respon$ents& an$ t,at

in t,e +on$u+t o t,eir or9& t,e% relie$ 5ainl% on t,eir e>pertise t,at is+,ara+teristi+ o t,e +o+9fg,t ga53ling& an$ ere ne#er gi#en 3%respon$ents an% tool nee$e$ or t,e peror5an+e o t,eir or9& t,e% arenot +onsi$ere$ as e5plo%ees o t,e +o+9pit operator.3hile respondents had failed to post their !ond within the )71da period pro#ideda!o#e, it is e#ident, on the other hand, that petitioners are NOT e$ploees of respondents, since their relationship fails to pass $uster the four1fold test of e$plo$ent 3e ha#e repeatedl $entioned in countless decisions: -). the selectionand engage$ent of the e$ploee5 -6. the pa$ent of wages5 -. the power of dis$issal5 and -<. the power to control the e$ploees conduct, which is the $osti$portant ele$ent% As found ! !oth the N;RC and the CA, respondents had no partin petitioners selection and $anage$ent5 petitioners co$pensation was paid out

of the arri!a -which is a percentage deducted fro$ the total !ets., not !petitioners5 and petitioners perfor$ed their functions as $asiador and sentenciadorfree fro$ the direction and control of respondents% n the conduct of their wor0,petitioners relied $ainl on their >e@pertise that is characteristic of the coc0'ghtga$!ling, and were ne#er gi#en ! respondents an tool needed for theperfor$ance of their wor0% Respondents, not !eing petitioners e$ploers, couldne#er ha#e dis$issed, legall or illegall, petitioners, since respondents werewithout power or prerogati#e to do so in the 'rst place% The rule on the posting of an appeal !ond cannot defeat the su!stanti#e rights of respondents to !e free fro$an unwarranted !urden of answering for an illegal dis$issal for which the werene#er responsi!le%

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LABOR STANDARDS

TOPIC: Article 82 Employer0Employee &elationship: aiters and aitresses

GR No. 1/-7S..' Foo$ ouse an$ 'a3lo #s. Batolina& Calu5pisan&

*algapo& *atias& *iran$a an$ Sta. nesO+to3er 11& -010

S' an$ its proprietors +oul$ not 3e +onsi$ere$ as 5ere agents o G*'C

3e+ause t,e% e>er+ise$ t,e essential ele5ents o an e5plo%5ent

relations,ip it, t,e respon$ents su+, as ,iring& pa%5ent o ages an$t,e poer o +ontrol

Re<uire5ent 3eore an e5plo%er +an $e$u+t ro5 t,e e5plo%ees ages

t,e #alue o t,e 3oar$ an$ lo$ging. H T,e ree 3oar$ an$ lo$ging S'

urnis,e$ t,e e5plo%ees +annot operate as a setEo= or t,e un$erpa%5ent

o t,eir ages.

Ponente: Justice &rionFACTS:"SS Dulti1Purpose Cooperati#e -7MPC. is an entit organi(ed ! the e$ploees of

the "o#ern$ent Ser#ice nsurance Sste$ -7+I+.% "DPC wanted to operate acanteen in the new "SS &uilding, !ut had no capa!ilit and e@pertise in this area%

Thus, it engaged the ser#ices of the petitioner S%%P% Food Kouse -+IP., owned ! thespouses Pa!lo, as concessionaire% The respondents &atolina and nine -*. others-the respondents. wor0ed as waiters and waitresses in the canteen%

n Fe!ruar 677<, "DPC ter$inated SPs contract as concessionaire !ecause itwanted to ta0e direct in#est$ent and $anage$ent of the "DPC Canteen% Theter$ination of the concession caused the ter$ination of respondents e$plo$ent%

n #iew of the e#ent, &atolina and the other e$ploees 'led a co$plaint for illegal

dis$issal, with $one clai$s, against SP and spouses Pa!lo%

SP argued that it operated the canteen in !ehalf of "DPC since it had no authorit! itself to do so% The respondents were not its e$ploees, !ut "DPCQs, as shown! their identi'cation cards% t clai$ed that "DPC ter$inated its concession andpre#ented it fro$ ha#ing access to the canteen pre$ises as "SS personnel loc0edthe place5 "DPC then operated the canteen on its own, a!sor!ing the respondentsfor the purpose and assigning the$ to the sa$e positions the held with SP% t

<



$aintained that the respondents were not dis$issed, !ut were $erel pre#ented !"DPC fro$ perfor$ing their functions% For this reason, SP posited that the legalo!ligations that would arise under the circu$stances ha#e to !e shouldered !"DPC%

La3or Ar3iter@ S's a#or ! dis$issing respondents co$plaint for lac0 of $eritand 'nding that the respondents were "DPCQs e$ploees, and not SPQs, as theree@isted a la!or1onl contracting relationship !etween the two entities% E#en if respondents were considered as SPQs e$ploees, their dis$issal would still not !eillegal !ecause the ter$ination of its contract to operate the canteen ca$e as asurprise and was against its will, rendering the canteenQs closure in#oluntar5although the were paid onl P)97%77 to PP667%77 dail, the e$ploees werepro#ided with free !oard and lodging se#en -H. das a wee0%

NLRC@ Batolinas a#or ! 'nding that the were SPs e$ploees !ut sustainedthe ;a!or Ar!iters decision that the respondents were not illegall dis$issed asthe ter$ination SPQs concession to operate the canteen constituted an authori(edcause for the se#erance of e$ploer1e$ploee relations%

CA@ Batolinas a#or ! aBr$ing N;RCs 'nding that respondents were SPse$ploees% &ut, it partiall granted SPs o!2ection to the N;RC co$putation andassu$ption that a $onth had twent1si@ -69. wor0ing das, instead of twent -67.wor0ing das%

CA denied SPs $otion for reconsideration5 hence, this instant petition%

SSUE=S:3hether an e$ploer1e$ploee relationship e@ists !etween SP and respondents

GECSON:

The court dis$issed SPs petition for lac0 of $erit and aBr$ed CAs decision%

S' an$ its proprietors +oul$ not 3e +onsi$ere$ as 5ere agents o G*'C

3e+ause t,e% e>er+ise$ t,e essential ele5ents o an e5plo%5ent

relations,ip it, t,e respon$ents su+, as ,iring& pa%5ent o ages an$

t,e poer o +ontrol

Not to $ention that SP operated the canteen on its own account as it paid a fee for

the use of the !uilding and for the pri#ilege of running the canteen% The fact that

the respondents applied with "DPC in Fe!ruar 677< when it ter$inated its

contract with SP, is another clear indication that the two entities were separate anddistinct fro$ each other% 3e thus see no reason to distur! the CAQs 'ndings%

Re<uire5ent 3eore an e5plo%er +an $e$u+t ro5 t,e e5plo%ees ages

t,e #alue o t,e 3oar$ an$ lo$ging. H T,e ree 3oar$ an$ lo$ging S'

urnis,e$ t,e e5plo%ees +annot operate as a setEo= or t,e un$erpa%5ent

o t,eir ages.

<<



3e held in Ma!e-a (. 3ational )a!or &elations Commission that the e$ploer

cannot si$pl deduct fro$ the e$ploeeQs wages the #alue of the !oard and

lodging without satisfing the following re?uire$ents: -). proof that such facilities

are custo$aril furnished ! the trade5 -6. #oluntar acceptance in writing ! the

e$ploees of the deducti!le facilities5 and -. proof of the fair and reasona!le

#alue of the facilities charged% As the CA aptl noted, it is clear fro$ the recordsthat SP failed to co$pl with these re?uire$ents%

LABOR STANDARDS

TOPIC: Article 82 Employer0Employee &elationship: Control Test

GR No. 17?16'aguio #s. NLRC& *etro5e$ia Ti5es Corporation&

Go9ongei& Go5e& 2r.& Aragon& Go an$ glesiaNo#e53er -& -00?

A Kregular e5plo%5ent&K ,et,er it is one or not& is aptl% gauge$ ro5 t,e+on+urren+e& or t,e nonE+on+urren+e& o t,e olloing a+tors@

a. The $anner of selection and engage$ent of the putati#e e$ploee,!. The $ode of pa$ent of wages,c. The presence or a!sence of the power of dis$issal5 andd. The presence or a!sence of the power to control the conduct of the putati#ee$ploee or the power to control the e$ploee with respect to the $eans or$ethods ! which his wor0 is to !e acco$plished%

T,e K+ontrol testK assu5es pri5a+% in t,e o#erall +onsi$eration& ,et,erregular or ot,erise. n$er t,is test& an e5plo%5ent relation o3tains,ere or9 is peror5e$ or ser#i+es are ren$ere$ un$er t,e +ontrol an$super#ision o t,e part% +ontra+ting or t,e ser#i+e& not onl% as to t,eresult o t,e or9 3ut also as to t,e 5anner an$ $etails o t,eperor5an+e $esire$.

T,e la& in $efning t,eir +ontra+tual relations,ip& $oes so& not ne+essaril%or e>+lusi#el% upon t,e ter5s o t,eir ritten or oral +ontra+t& 3ut also ont,e 3asis o t,e nature o t,e or9 petitioner ,as 3een +alle$ upon toperor5. T,e la a=or$s prote+tion to an e5plo%ee& an$ it ill not+ountenan+e an% atte5pt to su3#ert its spirit an$ intent. A stipulation in

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an agree5ent +an 3e ignore$ as an$ ,en it is utilie$ to $epri#e t,ee5plo%ee o ,is se+urit% o tenure. T,e s,eer ine<ualit% t,at +,ara+teriese5plo%erEe5plo%ee relations& ,ere t,e s+ales generall% tip against t,ee5plo%ee& oten s+ar+el% pro#i$es ,i5 real an$ 3etter options.

A laul $is5issal 5ust 5eet 3ot, su3stanti#e an$ pro+e$ural

re<uire5entsI in fne& t,e $is5issal 5ust 3e or a ;ust or aut,orie$ +ausean$ 5ust +o5pl% it, t,e ru$i5entar% $ue pro+ess o noti+e an$ ,earing.t is not s,on t,at respon$ent +o5pan% ,as ull% 3ot,ere$ itsel it,eit,er o t,ese re<uire5ents in ter5inating t,e ser#i+es o petitioner. T,enoti+e o ter5ination re+ites no #ali$ or ;ust +ause or t,e $is5issal o petitioner nor $oes it appear t,at ,e ,as 3een gi#en an opportunit% to 3e,ear$ in ,is $eense.

Ponente: Justice itugFACTS:n June )**6, Respondent Detro$edia Ti$es Corporation, for the 'fth ti$e, ca$einto an agree$ent with petitioner Paguio, appointing hi$ as an account e@ecuti#e of the 'r$% Paguios 2o! was to solicit ad#ertise$ents for The Danila Ti$es,pu!lished ! respondent co$pan%

Paguio was to recei#e co$$issions and $onthl allowances as long as he $et hisP7 777%77 ?uota%

The following stipulations in their contract are the o!2ect of contention !etweenRespondent co$pan and Paguio:

)6% Wou are not an e$ploee of the Detro$edia Ti$es Corporation nor does theco$pan ha#e an o!ligations towards anone ou $a e$plo, nor an

responsi!ilit for our operating e@penses or for an lia!ilit ou $a incur% Theonl rights and o!ligations !etween us are those set forth in this agree$ent% Thisagree$ent cannot !e a$ended or $odi'ed in an wa e@cept with the dulauthori(ed consent in writing of !oth parties%

)% Either part $a ter$inate this agree$ent at an ti$e ! gi#ing writtennotice to the other, thirt -7. das prior to e/ecti#it of ter$ination%

n August )**6, respondent co$pan ter$inated Paguio on the allegations of $isconduct on which he was not gi#en the opportunit to defend hi$self, i.e%,pirating clients fro$ his co1e@ecuti#es and failing to produce results, no de'nitecause for petitionerQs ter$ination was gi#en

Aggrie#ed, Paguio 'led a co$plaint for illegal dis$issal as0ing for resintate$ent,!ac0wages and other $onetar clai$s%

n their defense, respondent Detro$edia Ti$es Corporation asserted that it did notenter into an agree$ent with petitioner outside of the contract of ser#ices underArticles )9<6 and )9<< of the Ci#il Code of the Philippines% Asserting their right toter$inate the contract with petitioner, respondents pointed to the last pro#isionthereof stating that !oth parties could opt to end the contract pro#ided that either

<9



part would ser#e, thirt das prior to the intended date of ter$ination, thecorresponding notice to the other%

La3or Ar3iter@ 'aguios a#or ! declaring that he was illegall dis$issed,ordering respondent co$pan to reinstate hi$ to his for$er position and grantinghi$ $onetar awards%

NLRC@ Co5pan%s a#or ! re#ersing the ;a!or Ar!iters decision and declaringthat the contractual relationship !etween the parties as !eing '@ed for '@ed1ter$e$plo$ent% The 'nding of the N;RC was pri$aril hinged on the assu$ption thatpetitioner, on account of his educated stature, ha#ing indeed personall preparedhis pleadings without the aid of counsel, was an unli0el #icti$ of a lopsidedcontract%

CA@ Co5pan%s a#or ! aBr$ing N;RCs decision5 hence, this instance petition%

SSUE=S:

3=N Paguio is a regular e$ploee !ased on the deter$ination of the contractualrelationship !etween petitioner and respondent co$pan%

GECSON: The court granted Paguios petition, re#ersed CAs decision and reinstated ;a!orAr!iters decision%

A Kregular e5plo%5ent&K ,et,er it is one or not& is aptl% gauge$ ro5 t,e+on+urren+e& or t,e nonE+on+urren+e& o t,e olloing a+tors@

a. The $anner of selection and engage$ent of the putati#e e$ploee,!. The $ode of pa$ent of wages,c. The presence or a!sence of the power of dis$issal5 and

d. The presence or a!sence of the power to control the conduct of the putati#ee$ploee or the power to control the e$ploee with respect to the $eans or$ethods ! which his wor0 is to !e acco$plished%

T,e K+ontrol testK assu5es pri5a+% in t,e o#erall +onsi$eration& ,et,erregular or ot,erise.Under this test, an e$plo$ent relation o!tains where wor0 is perfor$ed orser#ices are rendered under the control and super#ision of the part contracting forthe ser#ice, not onl as to the result of the wor0 !ut also as to the $anner anddetails of the perfor$ance desired%

The ;a!or Ar!iter considered the reser#ation ! respondent Detro$edia Ti$es

Corporation not onl of the right to control the results to !e achie#ed !ut li0ewisethe $anner and the $eans used in reaching that end% Detro$edia Ti$esCorporation e@ercised such control ! re?uiring petitioner to su!$it a dail salesacti#it report and also a $onthl sales report as well% arious solicitation letterswould indeed show that the co$pan directed and $onitored the sales acti#ities of Paguio%

The law pro#ides -Art% 6+7. that: an e$plo$ent shall !e dee$ed to !e regularwhere the e$ploee has !een engaged to perfor$ acti#ities which are usuall

<H



necessar or desira!le in the usual !usiness or trade of the e$ploer, e@cept wherethe e$plo$ent has !een '@ed for a speci'c pro2ect or underta0ing the co$pletionor ter$ination of which has !een deter$ined at the ti$e of the engage$ent of thee$ploee or where the wor0 or ser#ice to !e perfor$ed is seasonal in nature andthe e$plo$ent is for the duration of the season%

An e$plo$ent shall !e dee$ed to !e casual if it is not co#ered ! the precedingparagraph: Pro#ided, That, an e$ploee who has rendered at least one ear of ser#ice, whether such ser#ice is continuous or !ro0en, shall !e considered a regulare$ploee with respect to the acti#it in which he is e$ploed and his e$plo$entshall continue while such acti#it e@ists%

An a++ount e>e+uti#e responsi3le or soli+iting a$#ertise5ents is +learl%ne+essar% an$ $esira3le or t,e sur#i#al an$ +ontinue$ operation o ane5plo%er in t,e nespaper 3usiness.

That petitioner perfor$ed acti#ities which were necessar and desira!le to the!usiness of the e$ploer, and that the sa$e went on for $ore than a ear, couldhardl !e denied% Petitioner was an account e@ecuti#e in soliciting ad#ertise$ents,clearl necessar and desira!le, for the sur#i#al and continued operation of the!usiness of respondent corporation% "o0ongwei, its President, herself ad$itted thatthe inco$e generated fro$ paid ad#ertise$ents was the life!lood of thenewspaperQs e@istence% $plicitl, respondent corporation recogni(ed petitionerQsin#alua!le contri!ution to the !usiness when it renewed, not 2ust once !ut '#eti$es, its contract with petitioner%

Respondent co$pan cannot see0 refuge under the ter$s of the agree$ent it hasentered into with petitioner%

T,e la& in $efning t,eir +ontra+tual relations,ip& $oes so& not ne+essaril%

or e>+lusi#el% upon t,e ter5s o t,eir ritten or oral +ontra+t& 3ut also ont,e 3asis o t,e nature o t,e or9 petitioner ,as 3een +alle$ upon toperor5. T,e la a=or$s prote+tion to an e5plo%ee& an$ it ill not+ountenan+e an% atte5pt to su3#ert its spirit an$ intent. A stipulation inan agree5ent +an 3e ignore$ as an$ ,en it is utilie$ to $epri#e t,ee5plo%ee o ,is se+urit% o tenure. T,e s,eer ine<ualit% t,at +,ara+teriese5plo%erEe5plo%ee relations& ,ere t,e s+ales generall% tip against t,ee5plo%ee& oten s+ar+el% pro#i$es ,i5 real an$ 3etter options.

A laul $is5issal 5ust 5eet 3ot, su3stanti#e an$ pro+e$uralre<uire5entsI in fne& t,e $is5issal 5ust 3e or a ;ust or aut,orie$ +ausean$ 5ust +o5pl% it, t,e ru$i5entar% $ue pro+ess o noti+e an$ ,earing.

t is not shown that respondent co$pan has full !othered itself with either of these re?uire$ents in ter$inating the ser#ices of petitioner% The notice of ter$ination recites no #alid or 2ust cause for the dis$issal of petitioner nor does itappear that he has !een gi#en an opportunit to !e heard in his defense%

GR No. 176?Cala53a *e$i+al Center& n+. (C*C" #s. NLRC& Lananas

an$ LananasNo#e53er -& -00?

<+



n$er t,e K+ontrol test&K an e5plo%5ent relations,ip e>ists 3eteen ap,%si+ian an$ a ,ospital i t,e ,ospital +ontrols 3ot, t,e 5eans an$ t,e$etails o t,e pro+ess 3% ,i+, t,e p,%si+ian is to a++o5plis, ,is tas9.

For +ontrol test to appl%& it is not essential or t,e e5plo%er to a+tuall%

super#ise t,e peror5an+e o $uties o t,e e5plo%ee& it 3eing enoug, t,atit ,as t,e rig,t to iel$ t,e poer.

*an$ator% +o#erage un$er t,e SSS La is pre5ise$ on t,e e>isten+e o ane5plo%erEe5plo%ee relations,ip& e>+ept in +ases o +o5pulsor% +o#erageo t,e selEe5plo%e$.

Se+tion 1& Rule o Boo9 o t,e I*%le*entin Rules o$ t+e L#bo" Code&an e5plo%erEe5plo%ee relations,ip e>ists 3eteen t,e resi$ent p,%si+iansan$ t,e training ,ospitals& unless t,ere is a training agree5ent 3eteent,e5& an$ t,e training progra5 is $ul% a++re$ite$ or appro#e$ 3% t,eappropriate go#ern5ent agen+%.

*ere 5e53ers,ip in a la3or union $oes not i%so $#&to 5ean parti+ipationin a stri9e.

Ponente: Justice Carpio1DoralesFACTS:CDC engaged the ser#ices of spouses Grs% ;an(anas on Darch )**6 for Rodolfo andAugust )**4 for Derceditha as part of its tea$ of resident phsicians% Reporting atthe hospital twice1a1wee0 on twent1four1hour shifts, respondents were paid a$onthl retainer of P<,+77%77 each%

The wor0 schedules of the $e$!ers of the tea$ of resident phsicians were '@ed! petitionerQs $edical director Gr% Gesipeda% And the were issued identi'cationcards ! petitioner and were enrolled in the Social Securit Sste$ -SSS.% nco$eta@es were withheld fro$ the$%

Gr% Trinidad, also a resident phsician at the hospital, inad#ertentl o#erheard atelephone con#ersation of respondent Gr% Rodolfo ;an(anas with a fellowe$ploee,Discala, through an e@tension telephone line% Apparentl, the werediscussing the low census or ad$ission of patients to the hospital% She relaedthis infor$ation to Gr% Gesipeda who, through a $e$orandu$, re?uired Gr%;an(anas to e@plain within 6< hours wh no disciplinar action should !e gi#en tohi$ and placed the latter in pre#enti#e suspension for 7 das%

ne@plica!l, petitioner did not gi#e respondent Gr% Derceditha, who was notin#ol#ed in the said incident, an wor0 schedule after sending her hus!and Gr%;an(anas the $e$orandu$, nor infor$ her the reason therefor, al!eit she was laterinfor$ed ! the Ku$an Resource Gepart$ent -KRG. oBcer that that was part of petitionerQs cost1cutting $easures%Darch )**+, the ran01and1'le e$ploees union of petitioner went on stri0e due tounresol#ed grie#ances o#er ter$s and conditions of e$plo$ent

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A few das after, Gr% ;an(anas 'led a co$plaint for illegal suspension !efore theN;RC1Regional Ar!itration &oard -RA&. % Gr% Derceditha su!se?uentl 'led aco$plaint for illegal dis$issal

Deanti$e, -GO;E. certi'ed the la!or dispute to the N;RC for co$pulsor ar!itrationand issued on April 6), )**+ return1to1wor0 Order to the stri0ing union oBcers and

e$ploees of petitioner pending resolution of the la!or dispute

Gr% Gesipeda later sent Gr% ;an(anas a notice of ter$ination which he recei#ed onApril 64, )**+, indicating as grounds therefor his failure to report !ac0 to wor0despite the GO;E order and his supposed role in the stri0ing union and waso!ser#ed -re: signatories LsicM to the +aligang *atas of &DCDC1U3P. to !eunlawfull participating as $e$!er in the ran01and1'le unionQs concertedacti#ities despite 0nowledge that our position in the hospital is $anagerial innature Gr% ;an(anas thus a$ended his original co$plaint to include illegal dis$issal%

La3or Ar3iter@ C*Cs a#or, dis$issed the spousesQ co$plaints for want of

2urisdiction upon a 'nding that there was no e$ploer1e$ploee relationship!etween the parties, the fourth re?uisite or the control test in the deter$ination of an e$plo$ent !ond !eing a!sent%

N;RC: Spouses ;an(anas fa#or ! re#ersing ;a!or Ar!iters decision% Then, orderedCDC are to pa the co$plainants their full !ac0wages5 separation pa of one $onthsalar for e#er ear of ser#ice in lieu of reinstate$ent5 $oral da$ages of P477,777%77 each5 e@e$plar da$ages of P647,777%77 each plus ten percent -)78.of the total award as attorneQs fees%

CA ): CDCs fa#or ! setting aside N;RCs decision%

CA 6: Spouses ;an(anas fa#or ! reinstating N;RCdecision !ut te$pered theaward to each of the spouses of $oral and e@e$plar da$ages to P)77,777%77 andP47,777%77, respecti#el and o$itted the award of attorneQs fees%


SSUE=S:3=N there e@ist an e$ploer1e$ploee relationship !etween petitioner andrespondents%

3=N respondent1spouses were illegall dis$issed%

GECSON: The court denied CDCs petition ! aBr$ing N;RCs decision with $odi'cations that)78 if the total 2udg$ent award as Attornes fees is reinstated%

47



n$er t,e K+ontrol test&K an e5plo%5ent relations,ip e>ists 3eteen ap,%si+ian an$ a ,ospital i t,e ,ospital +ontrols 3ot, t,e 5eans an$ t,e$etails o t,e pro+ess 3% ,i+, t,e p,%si+ian is to a++o5plis, ,is tas9.3here a person who wor0s for another does so $ore or less at his own pleasure andis not su!2ect to de'nite hours or conditions of wor0, and is co$pensated accordingto the result of his e/orts and not the a$ount thereof, the ele$ent of control is

a!sent% As priorl stated, pri#ate respondents $aintained speci'c wor01schedules,as deter$ined ! petitioner through its $edical director, which consisted of 6<1hourshifts totalling fort1eight hours each wee0 and which were strictl to !e o!ser#edunder pain of ad$inistrati#e sanctions%

For +ontrol test to appl%& it is not essential or t,e e5plo%er to a+tuall%super#ise t,e peror5an+e o $uties o t,e e5plo%ee& it 3eing enoug, t,atit ,as t,e rig,t to iel$ t,e poer.

That petitioner e@ercised control o#er respondents gains light fro$ the undisputedfact that in the e$ergenc roo$, the operating roo$, or an depart$ent or ward forthat $atter, respondentsQ wor0 is $onitored through its nursing super#isors, chargenurses and orderlies% 3ithout the appro#al or consent of petitioner or its $edical

director, no operations can !e underta0en in those areas%

*an$ator% +o#erage un$er t,e SSS La is pre5ise$ on t,e e>isten+e o ane5plo%erEe5plo%ee relations,ip& e>+ept in +ases o +o5pulsor% +o#erageo t,e selEe5plo%e$.Dore i$portantl, petitioner itself pro#ided incontro#erti!le proof of thee$plo$ent status of respondents, na$el, the identi'cation cards it issued the$,the paslips and &R 316 -now 6)9. For$s which reXect their status as e$ploees,and the classi'cation as salar of their re$uneration% Doreo#er, it enrolledrespondents in the SSS and Dedicare -Philhealth. progra$% t !ears noting at this

2uncture that $andator co#erage under the SSS ;aw is pre$ised on the e@istenceof an e$ploer1e$ploee relationship, e@cept in cases of co$pulsor co#erage of the self1e$ploed% t would !e preposterous for an e$ploer to report certainpersons as e$ploees and pa their SSS pre$iu$s as well as their wages if theare not its e$ploees%

Se+tion 1& Rule o Boo9 o t,e I*%le*entin Rules o$ t+e L#bo" Code&an e5plo%erEe5plo%ee relations,ip e>ists 3eteen t,e resi$ent p,%si+iansan$ t,e training ,ospitals& unless t,ere is a training agree5ent 3eteent,e5& an$ t,e training progra5 is $ul% a++re$ite$ or appro#e$ 3% t,eappropriate go#ern5ent agen+%.n respondentsQ case, the were not undergoing an speciali(ation training% The

were considered non1training general practitioners, LHM assigned at the e$ergencroo$s and ward sections%

*ere 5e53ers,ip in a la3or union $oes not i%so $#&to 5ean parti+ipationin a stri9e.Participation in a stri0e and intransigence to a return1to1wor0 order $ust, howe#er,!e dul pro#ed in order to 2ustif i$$ediate dis$issal in a national interest case%As the appellate court as well as the N;RC o!ser#ed, howe#er, there is nothing inthe records that would !ear out Gr% ;an(anasQ actual participation in the stri0e% And

4)



the $edical directorQs De$orandu$ of April 66, )**+ contains nothing $ore than ageneral directi#e to all union oBcers and $e$!ers to return1to1wor0%

GR No. 1-7/0'roessional Ser#i+es& n+. ('S" #s. Court o Appeals an$

Nati#i$a$ an$ !nri<ue AganaFe3ruar% 0-& -010

'etitioner 'S is lia3le to t,e Aganas& not un$er t,e prin+iple o "es%onde#t su%e"io" or la+9 o e#i$en+e o an e5plo%5ent relations,ipit, Dr. A5pil 3ut un$er t,e prin+iple o ostensi3le agen+% or t,enegligen+e o Dr. A5pil an$& %"o +#& vi&e, un$er t,e prin+iple o +orporatenegligen+e or its ailure to peror5 its $uties as a ,ospital.

Regar$less o its relations,ip it, t,e $o+tor& t,e ,ospital 5a% 3e ,el$$ire+tl% lia3le to t,e patient or its on negligen+e or ailure to olloesta3lis,e$ stan$ar$ o +on$u+t to ,i+, it s,oul$ +onor5 as a+orporation.

Court still e5plo%s t,e K+ontrol testK to $eter5ine t,e e>isten+e o ane5plo%erEe5plo%ee relations,ip 3eteen ,ospital an$ $o+tor.

Control as a $eter5inati#e a+tor in testing t,e e5plo%erEe5plo%eerelations,ip 3eteen $o+tor an$ ,ospital un$er ,i+, t,e ,ospital +oul$3e ,el$ #i+ariousl% lia3le to a patient in 5e$i+al negligen+e +ases is are<uisite a+t to 3e esta3lis,e$ 3% prepon$eran+e o e#i$en+e.

A5ple e#i$en+e t,at t,e ,ospital ('S" ,el$ out to t,e patient (Nati#i$a$"t,at t,e $o+tor (Dr. A5pil" as its agent. 'resent are t,e to a+tors t,at$eter5ine apparent aut,orit%@ frst& t,e ,ospital:s i5plie$ 5aniestationto t,e patient ,i+, le$ t,e latter to +on+lu$e t,at t,e $o+tor as t,e,ospital:s agentI an$ se+on$& t,e patients relian+e upon t,e +on$u+t o t,e ,ospital an$ t,e $o+tor& +onsistent it, or$inar% +are an$ pru$en+e.

Ponente: Justice CoronaFACTS:PS, together with Gr% A$pil and Gr% Fuentes, was i$pleaded ! Enri?ue Agana andNati#idad Agana -later su!stituted ! her heirs., in a co$plaint for da$ages 'led inthe -RTC. for the in2uries su/ered ! Nati#idad when Gr% A$pil and Gr% Fuentesneglected to re$o#e fro$ her !od two gau(es which were used in the surger theperfor$ed on her on April )*+< at the Dedical Cit "eneral Kospital% PS wasi$pleaded as owner, operator and $anager of the hospital%

RTC: Gr% A$pil and Gr% Fuentes are solidaril lia!le for da$ages%CA ): A!sol#ed Gr% Fuentes and aBr$ed lia!ilit of Gr% A$pil and PS, su!2ect to theright of PS to clai$ rei$!urse$ent fro$ Gr% A$pil%SC: ABr$ed CAs decision

46



CA 6: Genied PSs $otion for reconsideration%

Kence, this instant petition where PS argues:

)% The declaration in the ) Januar 677H Gecision #is1a1#is the )) Fe!ruar677* Resolution that the ruling in Ra$os #s% Court of Appeals -"%R% No%

)<4<, Gece$!er 6*, )***. that an e$ploer1e$ploee relations e@ists!etween hospital and their consultants stas should !e set aside for !einginconsistent with or contrar to the i$port of the resolution granting thehospitalQs $otion for reconsideration in Ra$os #s% Court of Appeals -"%R% No%)<4<, April )), 6776., which is applica!le to PS since the Aganas failed topro#e an e$ploer1e$ploee relationship !etween PS and Gr% A$pil and PSpro#ed that it has no control o#er Gr% A$pil% n fact, the trial court has foundthat there is no e$ploer1e$ploee relationship in this case and that thedoctorQs are independent contractors%

6% Respondents Aganas engaged Gr% Diguel A$pil as their doctor and did notpri$aril and speci'call loo0 to the Dedical Cit Kospital -PS. for $edicalcare and support5 otherwise stated, respondents Aganas did not selectDedical Cit Kospital -PS. to pro#ide $edical care !ecause of an apparentauthorit of Gr% Diguel A$pil as its agent since the latter was chosenpri$aril and speci'call !ased on his ?uali'cations and !eing friend andneigh!or%

% PS cannot !e lia!le under doctrine of corporate negligence since thepro@i$ate cause of Drs% AganaQs in2ur was the negligence of Gr% A$pil, whichis an ele$ent of the principle of corporate negligence%

SSUE=S:3=N a hospital $a !e held lia!le for the negligence of phsicians1consultantsallowed to practice in its pre$ises%

GECSON: The court denied PSs $otion and held that Professional Ser#ices, nc% is ORD!R!D pro hac (ice to pa Nati#idad -su!stituted ! her children Darcelino Agana ,Enri?ue Agana, Jr%, E$$a Agana1Andaa, Jesus Agana and Ra$und Agana. andEnri?ue Agana the total a$ount of P)4 $illion, su!2ect to )68 p%a% interest fro$ the'nalit of this resolution to full satisfaction%

'etitioner 'S is lia3le to t,e Aganas& not un$er t,e prin+iple o "es%onde#t su%e"io" or la+9 o e#i$en+e o an e5plo%5ent relations,ipit, Dr. A5pil 3ut un$er t,e prin+iple o ostensi3le agen+% or t,enegligen+e o Dr. A5pil an$& %"o +#& vi&e, un$er t,e prin+iple o +orporatenegligen+e or its ailure to peror5 its $uties as a ,ospital.3hile in theor a hospital as a 2uridical entit cannot practice $edicine, in realit itutili(es doctors, surgeons and $edical practitioners in the conduct of its !usiness of facilitating $edical and surgical treat$ent% 3ithin that realit, three legalrelationships crisscross:

)% &etween the hospital and the doctor practicing within its pre$ises5

4



6% &etween the hospital and the patient !eing treated or e@a$ined within itspre$ises5 and% &etween the patient and the doctor%

The e@act nature of each relationship deter$ines the !asis and e@tent of the lia!ilitof the hospital for the negligence of the doctor%

Regar$less o its relations,ip it, t,e $o+tor& t,e ,ospital 5a% 3e ,el$$ire+tl% lia3le to t,e patient or its on negligen+e or ailure to olloesta3lis,e$ stan$ar$ o +on$u+t to ,i+, it s,oul$ +onor5 as a+orporation.3here an e$plo$ent relationship e@ists, the hospital $a !e held #icariousllia!le under Article 6)H9 in relation to Article 6)+7 of the Ci#il Code or the principleof respondeat s#perior. E#en when no e$plo$ent relationship e@ists !ut it isshown that the hospital holds out to the patient that the doctor is its agent, thehospital $a still !e #icariousl lia!le under Article 6)H9 in relation to Article )<)and Article )+9* of the Ci#il Code or the principle of apparent authorit%

Court still e5plo%s t,e K+ontrol testK to $eter5ine t,e e>isten+e o an

e5plo%erEe5plo%ee relations,ip 3eteen ,ospital an$ $o+tor. n Calam!a Medical Center" Inc. (. 3ational )a!or &elations Commission" et al. itheld:Under the control test, an e$plo$ent relationship e@ists !etween a phsicianand a hospital if the hospital controls !oth the $eans and the details of the process! which the phsician is to acco$plish his tas0%

Control as a $eter5inati#e a+tor in testing t,e e5plo%erEe5plo%eerelations,ip 3eteen $o+tor an$ ,ospital un$er ,i+, t,e ,ospital +oul$3e ,el$ #i+ariousl% lia3le to a patient in 5e$i+al negligen+e +ases is are<uisite a+t to 3e esta3lis,e$ 3% prepon$eran+e o e#i$en+e.Nonetheless, to alla the an@iet of the inter#enors, the Court holds that, in thisparticular instance, the concurrent 'nding of the RTC and the CA that PS was notthe e$ploer of Gr% A$pil is correct% Kere, there was insuBcient e#idence that PSe@ercised the power of control or wielded such power o#er the $eans and thedetails of the speci'c process ! which Gr% A$pil applied his s0ills in the treat$entof Nati#idad%

A5ple e#i$en+e t,at t,e ,ospital ('S" ,el$ out to t,e patient (Nati#i$a$"t,at t,e $o+tor (Dr. A5pil" as its agent. 'resent are t,e to a+tors t,at$eter5ine apparent aut,orit%@ frst& t,e ,ospital:s i5plie$ 5aniestationto t,e patient ,i+, le$ t,e latter to +on+lu$e t,at t,e $o+tor as t,e,ospital:s agentI an$ se+on$& t,e patients relian+e upon t,e +on$u+t o t,e ,ospital an$ t,e $o+tor& +onsistent it, or$inar% +are an$ pru$en+e.

GR No. 1700?7Fran+is+o #s. NLRC& asei Corporation& Ta9a,as,i& A+e$o&

Lia& Ballesteros an$ !s+uetaAugust 1& -006

4<



n +ertain +ases t,e +ontrol test is not su8+ient to gi#e a +o5plete pi+tureo t,e relations,ip 3eteen t,e parties& oing to t,e +o5ple>it% o su+, arelations,ip ,ere se#eral positions ,a#e 3een ,el$ 3% t,e or9er.

T,e 3etter approa+, oul$ t,ereore 3e to a$opt a toEtiere$ testin#ol#ing@ (1" t,e putati#e e5plo%ers poer to +ontrol t,e e5plo%ee it,

respe+t to t,e 5eans an$ 5et,o$s 3% ,i+, t,e or9 is to 3ea++o5plis,e$I an$ (-" t,e un$erl%ing e+ono5i+ realities o t,e a+ti#it% orrelations,ip.

n Sevill# v. Cou"t o$ A%%e#ls& e o3ser#e$ t,e nee$ to +onsi$er t,ee>isting e+ono5i+ +on$itions pre#ailing 3eteen t,e parties& in a$$ition tot,e stan$ar$ o rig,tEoE+ontrol li9e t,e in+lusion o t,e e5plo%ee in t,epa%rolls& to gi#e a +learer pi+ture in $eter5ining t,e e>isten+e o ane5plo%erEe5plo%ee relations,ip 3ase$ on an anal%sis o t,e totalit% o e+ono5i+ +ir+u5stan+es o t,e or9er.

T,e $eter5ination o t,e relations,ip 3eteen e5plo%er an$ e5plo%ee

$epen$s upon t,e +ir+u5stan+es o t,e ,ole e+ono5i+ a+ti#it%)% The e@tent to which the ser#ices perfor$ed are an integral part of thee$ploers !usiness56% The e@tent of the wor0ers in#est$ent in e?uip$ent and facilities5% The nature and degree of control e@ercised ! the e$ploer5<% The wor0ers opportunit for pro't and loss54% The a$ount of initiati#e, s0ill, 2udg$ent or foresight re?uired for the successof the clai$ed independent enterprise59% The per$anenc and duration of the relationship !etween the wor0er and thee$ploer5 andH% The degree of dependenc of the wor0er upon the e$ploer for his continuede$plo$ent in that line of !usiness%

A $i5inution o pa% is pre;u$i+ial to t,e e5plo%ee an$ a5ounts to+onstru+ti#e $is5issal. Constru+ti#e $is5issal is an in#oluntar%resignation resulting in +essation o or9 resorte$ to ,en +ontinue$e5plo%5ent 3e+o5es i5possi3le& unreasona3le or unli9el%I ,en t,ere isa $e5otion in ran9 or a $i5inution in pa%I or ,en a +lear $is+ri5ination&insensi3ilit% or $is$ain 3% an e5plo%er 3e+o5es un3eara3le to ane5plo%ee.

n a=or$ing ull prote+tion to la3or& t,is Court 5ust ensure e<ual or9 opportunities regar$less o se>& ra+e or +ree$.

Ponente: Justice Wnares1SantiagoFACTS:Respondent Co$pan hired petitioner Francisco in )**4 as an Accountant andCorporate Secretar and su!se?uentl designated as ;iaison OBcer to Da0ati forthe operation of the co$pan%

n )**9, Co$pan designated petitioner as Acting Danager%

44



n Januar 677), Co$pan replaced petitioner with Fuentes as Danager% Co$panre?uired her to sign a prepared resolution !ut was assured that she would still !econnected with the co$pan%

Thereafter, respondent co$pan reduced her salar and failed to pa her $id1ear!onus allegedl !ecause the co$pan was not earning well%

n Octo!er 677), petitioner did not recei#e her salar5 she was ad#ised that theco$pan was not earning well%

n Octo!er )4, 677), she as0ed her salar fro$ Acedo !ut she was infor$ed thatshe is no longer connected with the co$pan%

Since she was no longer paid her salar, petitioner did not report for wor0 and 'ledan action for constructi#e dis$issal !efore the la!or ar!iter%

Respondent co$pan clai$s that Francisco is not their e$ploee since she washired as one of its technical consultants in )**4% As technical consultant, petitioner

perfor$ed her wor0 at her own discretion without control and super#ision of VaseiCorporation% Petitioner had no dail ti$e record and she ca$e to the oBce an ti$eshe wanted% Petitioner did not go through the usual procedure of selection of e$ploees, !ut her ser#ices were engaged through a &oard Resolution designatingher as technical consultant% As such, her consultanc $a !e ter$inated an ti$econsidering that her ser#ices were onl te$porar in nature and dependent on theneeds of the corporation%

To pro#e that petitioner was not an e$ploee of the corporation, pri#aterespondents su!$itted a list of e$ploees for the ears )*** and 6777 dulrecei#ed ! the &R showing that petitioner was not a$ong the e$ploees reportedto the &R, as well as a list of paees su!2ect to e@panded withholding ta@ whichincluded petitioner% SSS records were also su!$itted showing that petitionerslatest e$ploer was Sei2i Corporation

La3or Ar3iter@ Fran+is+os a#or ! 'nding that petitioner Francisco is ane$ploee of the co$pan5 declaring her dis$issal illegal and ordering respondentco$pan to pa her $one clai$s and separation pa with additional !ac0wages inreinstate$ent is no longer possi!le%

NLRC@ Fran+is+os a#or ! aBr$ing ;a!or Ar!iters decision with $odi'cationson the awards granted to Francisco ! o$itting the $oral and e@e$plar da$agesand )78 share in the pro't%

CA@ Respon$ent Co5pan%s a#or ! re#ersing N;RCs decision and dis$issingFranciscos co$plaint and dening Franciscos $otion for reconsideration


SSUE=S:3hether there was an e$ploer1e$ploee relationship !etween Francisco andrespondent co$pan%

49



n the aBr$ati#e, whether Francisco was illegall dis$issed

GECSON: The court granted Franciscos petition ! annulling CAs decision, reinstating N;RCsdecision and re$anding the case to the ;a!or Ar!iter for the reco$putation of

$onetar awards to Francisco%

n +ertain +ases t,e +ontrol test is not su8+ient to gi#e a +o5plete pi+tureo t,e relations,ip 3eteen t,e parties& oing to t,e +o5ple>it% o su+, arelations,ip ,ere se#eral positions ,a#e 3een ,el$ 3% t,e or9er.

There are instances when, aside fro$ the e$ploers power to control the e$ploeewith respect to the $eans and $ethods ! which the wor0 is to !e acco$plished,econo$ic realities of the e$plo$ent relations help pro#ide a co$prehensi#eanalsis of the true classi'cation of the indi#idual, whether as e$ploee,independent contractor, corporate oBcer or so$e other capacit% T,e 3etter approa+, oul$ t,ereore 3e to a$opt a toEtiere$ test

in#ol#ing@ (1" t,e putati#e e5plo%ers poer to +ontrol t,e e5plo%ee it,respe+t to t,e 5eans an$ 5et,o$s 3% ,i+, t,e or9 is to 3ea++o5plis,e$I an$ (-" t,e un$erl%ing e+ono5i+ realities o t,e a+ti#it% orrelations,ip.

This two1tiered test would pro#ide us with a fra$ewor0 of analsis, which wouldta0e into consideration the totalit of circu$stances surrounding the true nature of the relationship !etween the parties% This is especiall appropriate in this casewhere there is no written agree$ent or ter$s of reference to !ase the relationshipon5 and due to the co$ple@it of the relationship !ased on the #arious positions andresponsi!ilities gi#en to the wor0er o#er the period of the latters e$plo$ent%

n Sevill# v. Cou"t o$ A%%e#ls& e o3ser#e$ t,e nee$ to +onsi$er t,ee>isting e+ono5i+ +on$itions pre#ailing 3eteen t,e parties& in a$$ition tot,e stan$ar$ o rig,tEoE+ontrol li9e t,e in+lusion o t,e e5plo%ee in t,epa%rolls& to gi#e a +learer pi+ture in $eter5ining t,e e>isten+e o ane5plo%erEe5plo%ee relations,ip 3ase$ on an anal%sis o t,e totalit% o e+ono5i+ +ir+u5stan+es o t,e or9er.

T,e $eter5ination o t,e relations,ip 3eteen e5plo%er an$ e5plo%ee$epen$s upon t,e +ir+u5stan+es o t,e ,ole e+ono5i+ a+ti#it%

)% The e@tent to which the ser#ices perfor$ed are an integral part of thee$ploers !usiness56% The e@tent of the wor0ers in#est$ent in e?uip$ent and facilities5% The nature and degree of control e@ercised ! the e$ploer5<% The wor0ers opportunit for pro't and loss54% The a$ount of initiati#e, s0ill, 2udg$ent or foresight re?uired for the successof the clai$ed independent enterprise59% The per$anenc and duration of the relationship !etween the wor0er and thee$ploer5 andH% The degree of dependenc of the wor0er upon the e$ploer for his continuede$plo$ent in that line of !usiness%

4H



2anuar% -/& -00?

Ponente: Justice Austria1Dartine(FACTS:Petitioner 'led with Regional Ar!itration &ranch No% of the N;RC a

co$plaint against respondent for collection of #arious $onetar clai$s due its$e$!ers:. n the co$putation of the thirteenth $onth pa of its acade$ic personnel,respondent does not include as !asis therefor their co$pensation for o#erloads%t onl ta0es into account the pa the facult $e$!ers recei#e for their teachingloads not e@ceeding eighteen -)+. units% The teaching o#erloads are renderedwithin eight -+. hours a da%

Petitioner argues that under the Re#ised "uidelines on the $ple$entation of the)th1Donth Pa ;aw, pro$ulgated ! the Secretar of ;a!or on No#e$!er )*+H, the!asic pa of an e$ploee includes re$unerations or earnings paid ! his e$ploerfor ser#ices rendered, and that e@cluded therefro$ are the cash e?ui#alents of

unused #acation and sic0 lea#e credits, o#erti$e, pre$iu$, night di/erential,holida pa and cost1of1li#ing allowances%

Petitioner clai$s that since the pa for e@cess loads or o#erloads does not fall underan of the enu$erated e@clusions and considering that the said o#erloads are !eingperfor$ed within the nor$al wor0ing period of eight hours a da, it onl follows thatthe o#erloads should !e included in the co$putation of the facult $e$!ersQ ) th1$onth pa%

The GO;E Order which was relied upon ! the ;A and the N;RC in their respecti#eGecisions cannot !e applied to the instant case !ecause the GO;E Order was issuedlong after the co$$ence$ent of petitionerQs co$plaints for $onetar clai$s5 that

the pre#ailing rule at the ti$e of the co$$ence$ent of petitionerQs co$plaints wasto include co$pensations for o#erloads in deter$ining a facult $e$!erQs ) th1$onth pa5 that to gi#e retroacti#e application to the GO;E Order issued in )**9 isto depri#e wor0ers of !ene'ts which ha#e !eco$e #ested and is a clear #iolation of the constitutional $andate on protection of la!or

;etran argues that GO;E Order is an ad$inistrati#e regulation which interprets the)th1Donth Pa ;aw -P%G% No% +4). and, as such, it is $andator for the ;A to applthe sa$e to the present case% t further contends that ;egal Ser#ices OBce of theGO;E issued an opinion dated Darch )**6, that re$unerations for teaching ine@cess of the regular load, which includes o#erload pa for wor0 perfor$ed withinan eight1hour wor0 da, $a not !e included as part of the !asic salar in the

co$putation of the )th

1$onth pa unless this has !een included ! co$panpractice or polic%

La3or Ar3iter@ Letrans a#or ! dis$issing petitioners co$plaint for lac0 of $erit%

NLRC@ Letrans a#or ! aBr$ing ;a!or Ar!iters decision%

4*



CA@ Letrans a#or ! aBr$ing ;a!or Ar!iter and N;RCs decision CA deniedpetitioners $otion for reconsideration5 hence, this instant petition

SSUE=S:3hether o#erload pa for wor0 perfor$ed within an eight1hour wor0 da $a !eincluded as part of the !asic salar in the co$putation of the )th $onth pa%

GECSON: The court denied ;CFEAs petition and aBr$ed CAs decision%

&asic wage is de'ned ! the $ple$enting Rules of RA 9H6H as follows:

>&asic 3age $eans all re$uneration or earnings paid ! an e$ploer to a wor0erfor ser#ices rendered on nor$al wor0ing das and hours !ut does not include costof li#ing allowances, )th1$onth pa or other $onetar !ene'ts which are notconsidered as part of or integrated into the regular salar of the wor0ers

t is a settle$ rule t,at ,en an a$5inistrati#e or e>e+uti#e agen+%

ren$ers an opinion or issues a state5ent o poli+%& it 5erel% interprets apreEe>isting la an$ t,e a$5inistrati#e interpretation is at 3est a$#isor%or it is t,e +ourts t,at fnall% $eter5ine ,at t,e la 5eans.

The petitioners clai$ that the GO;E Order should not !e $ade to appl to thepresent case !ecause said Order was issued onl in )**9, appro@i$atel four earsafter the present case was initiated !efore the Regional Ar!itration &ranch of theN;RC, is not without !asis% The general rule is that ad$inistrati#e rulings andcirculars shall not !e gi#en retroacti#e e/ect%

Ne#ertheless, it is a settled rule that when an ad$inistrati#e or e@ecuti#e agencrenders an opinion or issues a state$ent of polic, it $erel interprets a pre1e@isting law and the ad$inistrati#e interpretation is at !est ad#isor for it is thecourts that 'nall deter$ine what the law $eans%

n the present case, while the GO;E Order $a not !e applica!le, the Court 'ndsthat o#erload pa should !e e@cluded fro$ the co$putation of the ) th1$onth paof petitionerQs $e$!ers%

n resol#ing the issue of the inclusion or e@clusion of o#erload pa in theco$putation of a teacherQs )th1$onth pa, it is decisi#e to deter$ine what >!asicsalar includes and e@cludes%

An o#erloa$ pa%& oing to its #er% nature an$ $efnition& 5a% not 3e+onsi$ere$ as part o a tea+,er:s regular or 3asi+ salar%& 3e+ause it is3eing pai$ or a$$itional or9 peror5e$ in e>+ess o t,e regular tea+,ingloa$.n the sa$e $anner that pa$ent for o#erti$e wor0 and wor0 perfor$ed duringspecial holidas is considered as additional co$pensation apart and distinct fro$ ane$ploeeQs regular wage or !asic salar, an o#erload pa, owing to its #er natureand de'nition, $a not !e considered as part of a teacherQs regular or !asic salar,!ecause it is !eing paid for additional wor0 perfor$ed in e@cess of the regularteaching load%

97

art 82-90 case briefs

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