batch 2 labor digest

7/26/2019 Batch 2 Labor Digest

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People of the Philippines vs. Dujua

Facts:

Ramon Dujua, Rose Dujua (his mother), Editha Singh (his aunt), and Guillermo Samson (his uncle),were charged of illegal recruitment on a large scale

Only Ramon Dujua was apprehended and thereafter arrested.

Four different witnesses testified against the act of the four accused promising them different

opportunities, but the same never happened.

They were promised work abroad upon payment of placement fees and other incidental expenses;

however, when the time actually came, they were not deployed to their promised location of work.

In his reply, Ramon denied having committed such illegal recruitment, and that he was an illegal

recruiter

Issue:

WON the accused is guilty of Illegal Recruitment in a large scale

Held: Yes. The essential elements of such crime are as follows

1.) The accused engages in acts of recruitment and placement of workers defined under art13(b) or

in any prohibited activities under art34 of the labor code

2.) The accused has not complied with the guidelines issued by the Secretary of Labor and

Employment as regards to securing a license or an authority to recruit and/or deploy workers locally

or even abroad

3.) The accused commits the unlawful acts against 3 or mo persons, individually or as a group

Such elements have been established beyond reasonable doubt.

The testimonies of the witnesses clearly established that the accused promised them employment

opportunities. The mere denial of such fact by Ramon cannot take precedence over the positive

categorical testimonies of the witnesses

With the presentation of the pieces of evidence, it was also proved that the accused had no license

or a the very least, any authority to recruit and/or deploy workers locally or even abroad. The

company, World Pack Travel and Tours, under the guise of a legitimate employment agency, also

had no such license or authority from Philippine Overseas Employment Agency (POEA).


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Lastly, by the number of witnesses that effectively testified against the accused, it is clear that such

ploy was made at the expense of a large number of people.


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Salazar v. Achacoso

G.R. No. 81510, 14 March 1990

Sarmiento, J.

Facts

!n "1 !cto#er 198$, Rosalie %esoro, in a s&orn statement 'ile( &ith the )hili**ine !verseas

+m*loment A(ministration -)!+A char/e( ortencia Salazar, alle/e(l the 'ormers mana/er,

'or &ithhol(in/ the 'ormers )+22 2ar(. !n 3 Novem#er 198$, Att. Fer(inan( Marez to&hom sai( com*laint &as assi/ne(, sent to Salazar a tele/ram (irectin/ the latter to (irectl

a**ear #e'ore Fer(ie Marez, )!+A Anti67lle/al Recritment nit :F, )!+A ;il(in/,re/ar(in/ a case 'ile( a/ainst Salazar. !n the same (a, havin/ ascertaine( that Salazar ha( nolicense to o*erate a recritment a/enc, A(ministrator %omas


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resi(ence. %here it &as 'on( that Salazar &as o*eratin/ annalie


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PEOPLE VS REMULLO

G.R. Nos. 124443-46. June 6, 2002

Quisumbing, J

FACTS:

Appellant Nimfa Remullo was convicted of committing illegal recruitment in large

scale and estafa. In the information, private complainants Jenelyn Quinsaat, Rosario

Cadacio, and Honorina Mejia averred that they went to appellants house, who told

them she was recruiting factory workers for Malaysia. Appellant told them to fill up

application forms and to go to the office of Jamila and Co., the recruitment agency

where appellant worked. Appellant also required each applicant to submit documents

and then to undergo a medical examination. The placement fee was P15,000 for each

applicant, which private complainants gave to appellant. Part of the fee was paid in

appellants house and part was paid at the Jamila office. Appellant did not issue

receipts for any of the payments.


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At the Jamila office, private complainants met a certain Steven Mah, the alleged

broker from the company in Malaysia. He just looked at them and told them they were

fit to work.

Private complainants were supposed to leave for Malaysia on June 6, 1993. On May

28, 1993, private complainant Quinsaat testified that she and the others met with

appellant at the PGH where appellant showed them their plane tickets. Appellant also

told them to fill up departure cards by checking the word holiday thereon.

At the airport on June 6, 1993, an immigration officer told private complainants they

lacked a requirement imposed by POEA. Their passports were cancelled and their

boarding passes marked offloaded. Appellant told them they were not able to leave

because their visas were for tourists only.

Appellant told private complainants they would be able to leave on June 20, 1993 butthis, too, did not push through.

Upon inquiry at Jamila and Co. regarding their application papers, the vice president

and general manager to Jamila, denied any knowledge of such papers and contended

that appellant did not submit any document to Jamila. She further certified that

appellant was not authorized to receive payments on behalf of Jamila.

Appellant NIMFA REMULLO denied having recruited private complainants and

receiving any money from them. She alleged that she met private complainants at the

Jamila office where she was a marketing consultant. They asked for her help inobtaining jobs abroad, so she had them fill up bio-data forms and told them to wait for

job openings. She alleged that Jamila had an agreement with Wearness Electronics,

based in Malaysia, concerning the recruitment of workers for Wearness. Private

complainants were supposed to have been recruited for Wearness. She insisted that

private complainants did not hand their placement fees to her but to Steven Mah and

to a certain Lani Platon. The trial court found appellant guilty of illegal recruitment on

a large scale and of estafa. Hence, this appeal.

ISSUE:

Whether or not appellant committed the said acts.

RULING:

Yes, appellant committed illegal recruitment in large scale and estafa. In illegal

recruitment in large scale, for such a charge to prosper, the following elements must


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concur: (1) the accused was engaged in recruitment activity defined under Article 13

(b), or any prohibited practice under Article 34 of the Labor Code; (2) he or she lacks

the requisite license or authority to lawfully engage in the recruitment and placement

of workers; and (3) he or she committed such acts against three or more persons,

individually or as a group.

Article 13 (b) of the Labor Code provides:

ART. 13. Definitions. -- xxx

(b) Recruitment and placement refers to any act of canvassing, enlisting,

contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,

contact services, promising or advertising for employment, locally or abroad, whether

for profit or not: Provided, That any person or entity which, in any manner, offers or

promises for a fee employment to two or more persons shall be deemed engaged inrecruitment and placement.

We are convinced that private complainants, the main witnesses for the prosecution,

were enticed by appellant to apply for jobs abroad. The three private complainants

filled up application forms at appellants house, and each paid appellant the amount of

P15,000 as placement fee. However, she acted without license or lawful authority to

conduct recruitment of workers for overseas placement. The POEAs licensing branch

issued a certification stating that appellant, in her personal capacity, was not

authorized to engage in recruitment activities. Evelyn Landrito, general manager of

the placement agency where appellant used to work, denied that the scope ofappellants work included recruiting workers and receiving placement fees. Such lack

of authority to recruit is also apparent from a reading of the job description of a

marketing consultant, the post that appellant occupied at Jamila and Co.

Anent appellants conviction for estafa, for charges of estafa to prosper, the following

elements must be present: (1) that the accused defrauded another by abuse of

confidence or by means of deceit, and (2) that damage or prejudice capable of

pecuniary estimation is caused to the offended party or third person. In this case,

appellant clearly defrauded private complainants by deceiving them into believing thatshe had the power and authority to send them on jobs abroad. By virtue of appellants

false representations, private complainants each parted with their hard-earned money.

Each complainant paid P15,000 as recruitment fee to appellant, who then appropriated

the money for her own use and benefit, but failed utterly to provide overseas job

placements to the complainants. In a classic rigmarole, complainants were provided

defective visas, brought to the airport with their passports and tickets, only to be


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offloaded that day, but with promises to be booked in a plane flight on another day.

The recruits wait in vain for weeks, months, even years, only to realize they were

gypped, as no jobs await them abroad. No clearer cases of estafa could be imagined

than those for which appellant should be held criminally responsible.

People v. Angeles

FACTS:

Maria Tolosa Sardea was working in Saudi Arabia when she received a call from her

sister, Priscilla Agoncillo, who was in Paris, France. Priscilla advised Maria to return

to the Philippines and await the arrival of her friend, accused-appellant Samina

Angeles, who will assist in processing her travel and employmen tdocuments to Paris,

France. Heeding her sisters advice, Maria immediately returned to the Philippines.

Marceliano Tolosa who at that time was in the Philippines likewise received

instructions from his sister Priscilla to meet accused-appellant who will also assist inthe processing of his documents for Paris, France. Maria and Marceliano eventually

met accused-appellant. During their meeting, accused-appellant asked if they had the

money required for the processing of their documents. Maria gaveP107,000.00 to

accused-appellant at Expert Travel Agency. Subsequently, she gave another

P46,000.00 and US$1,500.00 as additional payments to accused-appellant.

Marceliano, on the other hand, initially gave P100,000.00 to accused-appellant and he


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gave an additional P46,000.00 and US$1,500.00 at the United Coconut Planters Bank

in Makati. Analyn Olpindo met accused-appellant in Belgium. At that time, Analyn

was working in Canada but she went to Belgium to visither in-laws. After meeting

accused-appellant, Analyn Olpindo called up her sister, Precila Olpindo, in the

Philippines and told her to meet accused-appellant upon the latters arrival in the

Philippines because accused-appellant can help process her documents for

employment in Canada. Precila Olpindo eventually met accused-appellant at the

Expert Travel Agency. Accused-appellant asked for the amount of $4,500.00, but

Precila was only able to give $2,500.00. No evidence was adduced in relation to the

complaint of VilmaBrina since she did not testify in court. Accused-appellant told

Precila Olpindo and Vilma Brina that itwas easier to complete the processing of their

papers if they start from Jakarta, Indonesia rather than from Manila. Precila

Olpindo,Vilma Brina and accused-appellant flew to Jakarta, Indonesia.However,

accused-appellant returned to the Philippines after two days, leaving behind Precila

and Vilma. They waited for accused-appellant in Jakarta but the latter never returned.Precila and Vilma eventually came home to the Philippines. They started looking for

her but they could not reach her. Elisa Campanianos of the Philippine Overseas

Employment Agency presented a certification to the effect that accused-appellant was

not duly licensed to recruit workers here and abroad. In her defense, accused-appellant

averred that she never represented to the complainants that she can provide them with

work abroad. She insisted that she was a marketing consultant and an international

trade fair organizer. She met Priscilla Agoncillo inFrance and they became friends.

Priscilla asked her to assist her siblings, Maria and Marceliano, particularly in the

processing of their travel documents for France. Accused-appellant told Priscilla thatshe can only help in the processing of travel documents and nothing more. It was

Priscilla who promised employment to Maria and Marceliano. She received money

from complainants not in theform of placement fees but for the cost of tickets, hotel

accommodations and other travel requirements. She has the same defense for Analyn

Olpindo whom she met in Belgium. After trial on the merits, the trial court found

accused-appellant guilty of illegal recruitment and four counts of estafa.

ISSUE:Whether or not Angeles is guilty with four counts of estafa and one count of

illegal recruitment

RULING:

Illegal recruitment is committed when two elements concur: 1) that the offender has

no valid license or authority required by law to enable one to lawfully engage in

recruitment and placement of workers;


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and 2) that the offender undertakes either any activity within the meaning of

recruitment and placement defined under Article 13(b), or any prohibited practices

enumerated under Article 34.

To prove illegal recruitment, it must be shown that the accused-appellant gave

complainants the distinct impression that he had the power or ability to send

complainants abroad for work such thatthe latter were convinced to part with their

money in order to beemployed.

To be engaged in the practice of recruitment and placement, it is plain that there must

at least be a promise or offer of an employment from the person posing as a recruiter

whether locally or abroad. Plainly, there is no testimony that accused-appellant

offered complainants jobs abroad. Hence, accused-appellant Samina Angeles cannot

be lawfully convicted of illegal recruitment but can only be guilty of estafa.

Asia )aci'ic 2harterin/, 7nc. v. Maria =in(a R. Farolan

GR No. 1511370

Carpio-Morales, J:

FACTS: )etitioner &as a /eneral sales a/ent -GSA &hich sol( *assen/er an( car/o s*aces 'or airlineso*erate( # Scan(inavian Airline Sstem -an o''line international airline com*an. !n


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the (ecision o' =A, statin/ that it &as the ri/ht o' *etitioner to (ismiss em*loees #ase( on loss o' trst,

&hich &as mana/ement *rero/ative. %he 2A reinstate( the (ecision o' the =A, 'in(in/ that the

res*on(ent &as (e*rive( o' (e *rocess.

(1)ISSUE:

Ihether or not the *etitioner &as ille/all (ismisse(

HELD: +S. %he reisites 'or a valid dismissalo' an em*loee are -1 the em*loee mst #e a''or(e(due rocess-i.e. he mst #e /iven the o**ortnit to #e hear( an( to (e'en( himsel' an( -" (ismissal

mst #e 'or a valid causeas *rovi(e( in Art. "8" o' the =a#or 2o(e, or an o' the athorize( cases

n(er Art. "83 an( "84 o' the same. %he 2ort 'on( that res*on(ent &as not a''or(e( the o**ortnit to

#e hear( an( to *resent evi(ence in her (e'ense an( &as not /iven an notice constittin/ the /ron(s 'or

her (ismissal. As re/ar(s the secon( reisite, the em*loer #ears the ons o' *rovin/ that the (ismissal is

'or Cst case.

(!)ISSUE: Ihether or not the (octrine o' loss o' trst an( con'i(ence can #e a**lie( to the case at #ar

HELD:N!. %he S*reme 2ort (i( not *hol( the *etitionerEs (e'ense in averrin/ the a**lication o' the

(octrine o' loss o' trst as mana/ement *rero/ative. Iith res*ect to rank and file personnel, loss o' trst

an( con'i(ence as a /ron( 'or vali( (ismissal reires *roo' o' involvement in the alle/e( events inestion an( that mere ncorro#orate( assertions an( accsations # the em*loer &ill not #e s''icient.

;t as re/ar(s managerial emploees, the mere eBistence o' a #asis 'or #elievin/ that sch em*loee has

#reache( the trst o' his em*loer &ol( s''ice 'or his (ismissal. %he 2ort (etermine( that res*on(ent

&as not a mana/erial em*loee -(es*ite the 'act that she &as (esi/nate( as a mana/erH #ecase it is theCo# (escri*tion that (etermines the natre o' the em*loment. Frthermore, the 2ort consi(ere( the

reisites 'or an em*loee to #e a mana"erial emlo#ee, &hich reires the *resence o' all of t$e

follo%in" -1 their *rimar (t consists o' the mana/ement o' the esta#lishment in &hich the are

em*loe( or a (e*artment or a s#(ivision thereo'K -" the cstomaril an( re/larl (irect the &or? o'

t&o or more em*loees thereinK an( -3 the have the athorit to hire or 'ire other em*loees o' lo&er

ran?K or their s//estions an( recommen(ations as to the hirin/ an( 'irin/ an( as to the *romotion or an

other chan/e o' stats o' other em*loees are /iven *articlar &ei/ht. %he 2ort 'on( that the

res*on(entEs 'nction (ealt mainl &ith servicin/ o' eBistin/ clienteleK hence, she col( not #e consi(ere(as a mana/erial em*loee. As sch, her (ismissal, to #e vali(, reires *roo' that the res*on(ent 'aile( to

o#serve stan(ar(s o' &or? or &as ine''icient. %he *etitioner &as not a#le to sho& sch evi(ence. %hs,

the (octrine o' loss o' trst an( con'i(ence cannot #e a**reciate( in 'avor o' the *etitioner.


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CHARLITO PENARANDA v. BAGANGA PLYWOOD CORPORATION

G.R. No. 159577, May 3, 2006

PANGANIBAN, C.J.

FACTS:

Charlito Penaranda was hired as an employee of the Baganga Plywood Corporation(BPC). He filed a complaint for illegal dismissal with money claims against BPC and

its General Manager, Hudson Chua before the NLRC. He alleges that he was

employed by respondent on March 1999, with a monthly salary of P5,000 as

foreman/boiler head/shift engineer until he was illegally terminated. Furthermore, he

was not paid his overtime pay, premium pay for working during holidays/rest days,

night shift differentials and finally claims for payment of damages and attorneys fees.


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On the other hand, respondent BPC which is a domestic corporation duly organized

and existing under Philippine laws, and is represented herein by its General Manager

Hudson Chua. It alleged that Penarandas separation from services was done pursuant

to Art. 283 of the Labor Code, the respondent was on temporary closure due to repair

and general maintenance and it applied for clearance with the DOLE. And due to the

insistence of Penaranda, he was paid his separation benefits. Consequently, when BPC

partially reopened in January 2001, Penaranda failed to reapply. Hence, he was not

terminated from employment much less illegally. He opted to severe employment

when he insisted payment of separation benefits. Furthermore, being a managerial

employee he is not entitled to overtime pay and if ever he rendered services beyond

the normal hours of work, was no office order/ or authorization for him to do so. The

Labor Arbiter ruled that there was no illegal dismissal and that Penarandas complaint

was premature because he was still employed by BPC. The temporary closure of

BPCs plant did not terminate his employment, hence, he need not reapply when the

plant reopened. Nevertheless, the Labor Arbiter found Penaranda entitled to overtimepay, premium pay for working on rest days, and attorneys fees. BPC filed an appeal

with the NLRC which deleted the award of overtime pay and premium pay for

working on rest days. According to the commission, Penaranda was not entitled to

these awards because he was a managerial employee. Penaranda appealed to the

appellate court which dismissed the appeal and, subsequently the motion for

reconsideration.

ISSUE:

W/N Penaranda is not entitled to overtime pay and premium pay.

RULING:

YES. The Court disagrees with the NLRCs finding that Penaranda was a managerial

employee. However, Penaranda was a member of the managerial staff, which also

takes him out of the coverage of labor standards. Like manegrial employees, officers

and members of the managerial staff are not entitled to the provisions of law on labor

standards. His duties and responsibilities conform to the definition of a member of the

managerial staff. Penaranda supervised the engineering section of the steam plantboiler. His work involved overseeing the operation of the machines and the

performance of the workers in the engineering section. This work necessarily required

the use of discretion and independent judgment to ensure the proper functioning of the

steam plant boiler. As supervisor (as also admitted by him that he is), he is deemed a

member of the managerial staff.


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Mercidar vs Fishing Corp

(Labor Standards Fishermen are not field personnels, Article 82)

Facts: Private respondent employed as a bodegero or ships quartermaster

complained of being constructively dismissed by petitioner corporation when thelatter refused him assignments aboard its boats after he had reported to work. The

Larbor Arbiter rendered a decision ordering petitioner corporation to reinstate

complainant with back wages, pay him his 13th month pay and incentive leave.

Petitioner claims that it cannot be held liable for service incentive leave pay by

fishermen in its employ as the latter supposedly are field personnel and thus not

entitled to such pay under the Labor Code.


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Article 82 of the Labor Code provides among others that field personnel shall refer

to non-agricultural employees who regularly perform their duties away from the

principal place of business or branch of office of the employer and whose actual hours

of work in the field cannot be determined with reasonable certainty.

Issue: WON fishermen are considered field personnel.

Held: No. The NLRC is correct. Although fishermen perform non-agricultural work

away from their employers business offices, the fact remains that throughout the

duration of their work they are under the effective control and supervision of the

employer through the vessels patron or master.

Autobus Transport Inc. vs Antonio Bautista

G.R. No. 156367

Chico-Nazario, J.

Facts: Respondent has been in the employ of the petitione since May 24, 1995 as a

driver-conductor. He was paid on commission basis, seven percent of the total gross

income per travel, on a twice a month basis. On January 3, 2000, while driving

Autobus No. 114, he accidentally bumped the rear portion of Autobus No. 124. He

averred that the accident happened because he was compelled by the management to

go back to Roxas, Isabela although he had not slept for almost 24 hours. He also


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alleged that he was not allowed to work until he fully paid the 30% of the cost of

repair of the damaged buses. After a month, management sent him a letter of

termination. Bautista filed a complaint for illegal dismissal but the same was

dismissed by the labor arbiter but he was awarded his 13th month pay and service

incentive leave pay. Petitioner appealed the decision, and was partly granted wherein

both the NLRC and the Court of Appeals deleted the payment of the 13th month pay.

Hence, this petition.

Issue: Whether or not Bautista is entitled to service incentive leave?

Ruling: Yes. Art. 95(a) provides: Every employee who has rendered atleast one year

of service shall be entitled to a yearly service incentive leave of five days with pay. It

covers all employees except those employees who are classified as field personnel.

As a general rule, field personnel are those whose performance of their job/service is

not supervised by the employer or his representative, the workplace being away fromthe principal office and whose hours and days of work cannot be determined with

reasonable certainty. If required to be at specific places at specific times, employees

including drivers cannot be said to be field personnel despite the fact that they are

performing work away from the principal office of the employee.

With respect to Bautista, the Court takes judicial notice that along the routes that are

plied bu these bus companies, there are its inspectors assigned at strategic places who

board the bus and inspect the passengers, the punched tickets, and the conductors's

reports. There is also the mandatory once-a-week car bard or shop day, where the bus

is regularly checked as to its mechanical, electrical, and hydraulic


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Arica vs. NLRC

Facts: Petitioners Teofilo Arica et al filed a complaint against Standard Fruits

Corporation (STANFILCO) Philippines for allegedly not paying the workers for their

assembly time which takes place every work day from 5:30am to 6am.

The assembly time consists of the following activities:

1. Roll call of the workers;

2. Getting their assignments from the foreman;

3. Filling out the Laborers Daily Accomplishment Report;

4. Getting tools and equipments from the stockroom; and

5. Going to the field to work.

They contended that these activities are necessarily for private respondents benefit.

The private respondent averred that the thirty-minute assembly time has been a long

time company practice, thus, not considered as waiting time.

The Labor Arbiter dismissed the complaint. The LA agreed that the thirty-minute

assembly time long practiced cannot be considered waiting time or work time and,

therefore, not compensable.

The NLRC upheld the decision of the LA for the same reason.

Issue: WON the 30-minute activity of the petitioners before the scheduled working

time is compensable under the Labor Code.

Held: No. The thirty minute assembly time long practiced and institutionalized by

mutual consent of the parties under Article IV, Section 3, of the Collective Bargaining

Agreement cannot be considered as waiting time within the purview of Section 5,

Rule I, Book III of the Rules and Regulations Implementing the Labor Code.

The thirty (30)-minute assembly is a deeply-rooted, routinary practice of the

employees, and the proceedings attendant thereto are not infected with complexities as

to deprive the workers the time to attend to other personal pursuits. In short, they are

not subject to the absolute control of the company during this period, otherwise, their


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failure to report in the assembly time would justify the company to impose

disciplinary measures.

Furthermore, their houses are situated right on the area where the farm are located,

such that after the roll call, which does not necessarily require the personal presence,

they can go back to their houses to attend to some chores. In short, they are not

subject to the absolute control of the company during this period.


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UNIVERSITY OF PANGASINAN FACULTY UNION v. UNIVERSITY OF

PANGASINAN And NATIONAL LABOR RELATIONS COMMISSION

FACTS: Petitioner is a labor union composed of faculty members of the respondent

University of Pangasinan, an educational institution duly organized and existing by

virtue of the laws of the Philippines. On December 18, 1981, the petitioner, through

its President, Miss Consuelo Abad, filed a complaint against the private respondent

with the Arbitration Branch of the NLRC, Dagupan District Office, Dagupan City.

The complaint seeks: (a) the payment of Emergency Cost of Living Allowances

(ECOLA) for November 7 to December 5, 1981, a semestral break; (b) salary

increases from the sixty (60%) percent of the incremental proceeds of increased

tuition fees; and (c) payment of salaries for suspended extra loads. In November andDecember, 1981, the petitioners members were fully paid their regular monthly

salaries. However, from November 7 to December 5, during the semestral break, they

were not paid their ECOLA. The private respondent claims that the teachers are not

entitled thereto because the semestral break is not an integral part of the school year

and there being no actual services rendered by the teachers during said period, the

principle of "No work, no pay" applies. During the same school year (1981-1982), the

private respondent was authorized by the Ministry of Education and Culture to collect,

as it did collect, from its students a fifteen (15%) percent increase of tuition fees.

Petitioners members demanded a salary increase effective the first semester of said

schoolyear to be taken from the sixty (60%) percent incremental proceeds of theincreased tuition fees but private respondent refused. Aside from their regular loads,

some of petitioners members were given extra loads to handle during the same 1981-

1982 schoolyear. Those with extra loads to teach on said day claimed they were not

paid their salaries for those loads, but the private respondent claims otherwise.

ISSUE: 1. WHETHER OR NOT PETITIONERS MEMBERS ARE ENTITLED TO

ECOLA DURING THE SEMESTRAL BREAK FROM NOVEMBER 7 TO

DECEMBER 5, 1981 OF THE 1981-82 SCHOOL YEAR.

RULING: The Supreme Court held that various Presidential Decrees on ECOLAs to

wit: PDs 1614, 1634, 1678 and 1713 applies in the case at bar. Semestral breaks are

in the nature of work interruptions beyond the employees control. As such, these

breaks cannot be considered as absences within the meaning of the law for which

deductions may be made from monthly allowances. The "No work, no pay" principle


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does not apply in the instant case. The petitioners members received their regular

salaries during this period. It is clear from the provision of law that it contemplates a

"no work" situation where the employees voluntarily absent themselves. Petitioners,

in the case at bar, certainly do not, ad voluntatem, absent themselves during semestral

breaks. Rather, they are constrained to take mandatory leave from work. The principle

of "No pay, no ECOLA" the converse of which finds application in the case at bar.

Petitioners cannot be considered to be on leave without pay so as not to be entitled to

ECOLA, for, as earlier stated, the petitioners were paid their wages in full for the

months of November and December of 1981, notwithstanding the intervening

semestral break.


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HILARIO RADA v. NLRC and PHILNOR CONSULTANTS AND PLANNERS,INC.

G.R. No. 96078 January 9, 1992

REGALADO, J.:

FACTS:

Hilario Radas initial employment with Philnor was under a "Contract of Employment

for a Definite Period" dated July 7, 1977, whereby petitioner was hired as "Driver" forthe construction of the Manila North Expressway Extension, for a term of about 24

months. Meanwhile, the main project was not finished and respondent was in need of

Driver for the extended project. Since Petitioner had the necessary experience and his

performance was found satisfactory, the position of Driver was offered to Petitioner.

Hence a second Contract of Employment for a Definite Period of 10 months. This

second contract of employment was subsequently extended for a number of times

until 1985.At the completion of the project, Rada was terminated as his employment

was co-terminous with the project.

On May 20, 1987, petitioner filed before the NLRC-NCR, DOLE, a Complaint for

non-payment of separation pay and overtime pay against Philnor. Philnor avers that

the time used by petitioner to and from his residence to the project site from 5:30 a.m.

to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m., or about three hours daily, was not

overtime work as he was merely enjoying the benefit and convenience of free

transportation provided by Philnor, otherwise without such vehicle he would have

used at least four hours by using public transportation and he was a project employee

and he was not entitled to termination pay under Policy Instructions No. 20 since his

employment was coterminous with the completion of the project.

ISSUES:

a. Whether or not petitioner is a regular employee entitling him to receive separation

pay.

b. Whether or not petitioner is entitled to overtime compensation.


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HELD:

a. The Court ruled that Rada was a project employee whose work was coterminous

with the project for which he was hired.

Project employees, as distinguished from regular or non-project employees, arementioned in Section 281 of the Labor Code as those where the employment has

been fixed for a specific project or undertaking the completion or termination of

which has been determined at the time of the engagement of the employee. Project

employees are not entitled to termination pay if they are terminated as a result of the

completion of the project or any phase thereof in which they are employed, regardless

of the number of projects in which they have been employed by a particular

construction company. Moreover, the company is not required to obtain clearance

from the Secretary of Labor in connection with such termination.

b. The Court held that petitioner is entitled to the claim for overtime compensation.

The fact that he picks up employees of Philnor at certain specified points along EDSA

in going to the project site and drops them off at the same points on his way back from

the field office going home to Marikina, Metro Manila is not merely incidental to

petitioner's job as a driver. On the contrary, said transportation arrangement had been

adopted, not so much for the convenience of the employees, but primarily for the

benefit of the employer. But since the assigned task of fetching and delivering

employees is indispensable and consequently mandatory, then the time required of

and used by petitioner in going from his residence to the field office and back, that is,from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., should be paid as

overtime work.


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The Case

R.B. Michael Press and Annalene Reyes Escobia against their former machine

operator, respondent Nicasio C. Galit,

The Facts Respondent was employed by petitioner R.B. Michael Press as an offset

machine operator, During his employment, Galit was tardy for a total of 190 times and

was absent without leave for a total of nine and a half days.Respondent was ordered to

render overtime service in order to comply with a job order deadline, but he refused to

do so. The following day respondent reported for work but petitioner Escobia told himnot to work, and to return later in the afternoon for a hearing. When he returned, a

copy of an Office Memorandum was served on him Petitioners aver that Galit was

dismissed due to the following offenses: (1) tardiness constituting neglect of duty; (2)

serious misconduct; and (3) insubordination or willful disobedience. respondent was

terminated from employment, gave him his two-day salary and a termination letter.

Respondent subsequently filed a complaint for illegal dismissal and money claims

before the National Labor Relations Commission (NLRC) The CA found that it was

not the tardiness and absences committed by respondent, but his refusal to render

overtime work which caused the termination of his employment. It ruled that the timeframe in which respondent was afforded procedural due process is dubitable; he could

not have been afforded ample opportunity to explain his side and to adduce evidence

on his behalf. It further ruled that the basis for computing his backwages should be his

daily salary at the time of his dismissal which was PhP 230, and that his backwages

should be computed from the time of his dismissal up to the finality of the CAs

decision.

The Issues

whether there was just cause to terminate the employment of respondent whether dueprocess was observed in the dismissal process whether respondent is entitled to

backwages and other benefits despite his refusal to be reinstated.

The Courts Ruling


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Respondents tardiness cannot be considered condoned by petitioners In the case at

bar, respondent did not adduce any evidence to show waiver or condonation on the

part of petitioners. Thus the finding of the CA that petitioners cannot use the previous

absences and tardiness because respondent was not subjected to any penalty is bereft

of legal basis. The petitioners did not impose any punishment for the numerous

absences and tardiness of respondent. Thus, said infractions can be used collectively

by petitioners as a ground for dismissal. Respondent is admittedly a daily wage earner

and hence is paid based on such arrangement. For said daily paid workers, the

principle of "a days pay for a days work" is squarely applicable. Hence it cannot be

construed in any wise that such nonpayment of the daily wage on the days he was

absent constitutes a penalty. Insubordination or willful disobedience For willful

disobedience to be a valid cause for dismissal, these two elements must concur: (1)

the employees assailed conduct must have been willful, that is, characterized by a

wrongful and perverse attitude (2) the order violated must have been reasonable,

lawful, made known to the employee, and must pertain to the duties which he hadbeen engaged to discharge.


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Narag

Shell Company vs National Labor Union

G.R. No. L-1309

July 26, 1948

FACTS: National Labor Union instituted this action to ask for 50% additional

compensation for the employees of Shell Company who work at night to attend to the

foreign planes landing and taking off (at night), to supply petrol and lubricants, and

perform other duties. Court of Industrial Relations held that The Shell Company pay

its workers working at night an additional compensation of 50% over their regular

salaries by working during daytime. Shell argues that there is no legal provision

empowering CIR to order payment of additional compensation to workers who work

at night, and that Act No. 444 relieved the employer of such obligation as it is

provided in the Act where it made compulsory the "overtime" (additional

compensation) pay for work rendered beyond 8 hours, and such cases do not includethe work at night. NLU argues decision of the CIR is part of its broad and effective

powers as granted by Commonwealth Act No 103 - the charter of the Industrial

Relations Court, and that Act No. 444 has no Application to this case because it is

referring only to particular and the maximum working day permitted in industrial

establishments - the 8-hour day. ISSUES:

1. WON CIR has the authority to order payment of additional compensation to

workers who work at night

2. WON those who work at night are entitled to 50% additional compensation

RULING:

1. Yes. Articles 1, 4 and 13 of Commonwealth Act No. 103: It is evident from the

Com Act. No. 103:


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SECTION 1. (a) that when a dispute arises between the principal and the employee or

worker on the question of wages, CIR has jurisdiction throughout the Philippines to

consider, investigate and resolve the dispute, setting the wages, they deem fair and

reasonable.

SEC. 4. (b) that for the purposes of prevention, arbitration, decision and arrangement,

CIR also has jurisdiction over any dispute - industry and agriculture - resulting from

any differences in wages, compensation or participation, working hours, conditions of

employment or tenancy between the employers and employees or between workers

and owners and the landowners or farm workers subject to the fulfillment of certain

requirements and conditions when it sees that the dispute could cause results or a

strike,

SEC. 13. (c) that in exercising its powers specified above, the Court Industrial

Relations is not limited, to decide the dispute, to grant the remedy or remediesrequested by the parties to the dispute, but may include in any order or decision or

determination relating to the purpose of settling the dispute or to prevent further

agricultural or industrial disputes.

The argument of Shell is mistaken. Law No. 444 does not apply to this case, it is

evident that it has a specific objective, namely: (a) set at 8 hours the maximum

working day, (b) at some exceptional cases employees could be allowed Work off the

day, (c) provide increment, which must be not less than 25% of regular salary for the

"overtime" or work in excess of 8 hours. The work required by Shell is not covered by

the overtime of Com Act. 444 since the work which is the subject of controversy in

this case is not overtime but a full day of work for 8 hours, done at night or in night

shift. Hence, if CIR has the authority to fix wages for the work done during the day, it

also has the authority to fix wages done at night.

2. Yes. The case against nightwork, then, may be said to rest upon several grounds. In

the first place, there are the remotely injurious effects of permanent nightwork

manifested in the later years of the worker's life. Of more immediate importance to the

average worker is the disarrangement of his social life, including the recreational

activities of his leisure hours and the ordinary associations of normal family relations.From an economic point of view, nightwork is to be discouraged because of its

adverse effect upon efficiency and output. A moral argument against nightwork in the

case of women is that the night shift forces the workers to go to and from the factory

in darkness. Recent experiences of industrial nations have added much to the evidence

against the continuation of nightwork, except in extraordinary circumstances and

unavoidable emergencies. The immediate prohibition of nightwork for all laborers is


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hardly practicable; its discontinuance in the case of women employees is

unquestionably desirable. 'The night was made for rest and sleep and not for work' is a

common saying among wage-earning people, and many of them dream of an

industrial order in which there will be no night shift.

LEPANTO CONSOLIDATED MINING COMPANY vs LEPANTO LOCAL STAFF UNION

FACTS:Petitioner Lepanto Consolidated Mining Company is a domestic mining corporation. Respondent

Lepanto Local Staff Union is the duly certified bargaining agent of petitioners employees occupying

staff positions. Petitioner and respondent entered into their fourth Collective Bargaining Agreement

(CBA) which provides:

ARTICLE VIII NIGHT SHIFT DIFFERENTIAL

Section 3. Night Differential pay. - The Company shall continue to pay nightshift differential for work

during the first and third shifts to all covered employees within the bargaining unit as follows:

For the First Shift (11:00 p.m. to 7:00 a.m.), the differential pay will be 20% of the basic rate. For the

Third Shift (3:00 p.m. to 11:00 p.m.), the differential pay will be 15% of the basic rate.

However, for overtime work, which extends beyond the regular day shift (7:00 a.m. to 3:00 p.m.),

there [will] be no night differential pay added before the overtime pay is calculated.

On 23 April 2000, respondent filed a complaint with the National Conciliation and Mediation Board,

Cordillera Administrative Region (NCMB-CAR) alleging that petitioner failed to pay the night shift

differential of respondents members as provided in the 4th CBA. Petitioner and respondent failed to

amicably settle the dispute. Hence, the issue was submitted to the Voluntary Arbitrator for resolution.

The Voluntary Arbitrator ruled in favor of the respondent. On appeal, CA upheld Voluntary Arbitrator's

decision. It was found that during the effectivity of the first three CBAs, petitioner paid night shift

differentials to other workers who were members of respondent for work performed beyond 3:00 p.m.

Moreover, the records of the case revealed that petitioner also paid night shift differential for work

beyond 3:00 p.m. during the effectivity of the 4th CBA. Petitioner alleged that such payment was a

mistake on the part of its accounting department. CA noted that petitioner continued such payment

even after the decision of the Voluntary Arbitrator was rendered. Thus, petitioner was estopped from

claiming erroneous payment. Petitioner filed for a motion for reconsideration but the same was

denied. Hence, this petition.


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ISSUE: W/N workers are entitled to night shift differential for work performed beyond the regular day

shift, from 7:00 a.m. to 3:00 p.m.

HELD:

YES. The first paragraph of Section 3 provides that petitioner shall continue to pay night shift

differential to workers of the first and third shifts. It does not provide that workers who performedwork beyond the second shift shall not be entitled to night shift differential. The inclusion of the third

paragraph is not intended to exclude the regular day shift workers from receiving night shift

differential for work performed beyond 3:00 p.m. It only provides that the night shift differential pay

shall be excluded in the computation of the overtime pay. The CA correctly ruled that petitioner failed

to present any convincing evidence to prove that the payment was erroneous. In fact, the CA found

that even after the promulgation of the Voluntary Arbitrators decision and while the case was

pending appeal, petitioner still paid night shift differential for work performed beyond 3:00 p.m. It

affirms the intention of the parties to the CBA to grant night shift differential for work performed

beyond 3:00 p.m.

DOCTRINES:

The terms and conditions of a collective bargaining contract constitute the law between the parties. If

the terms of the CBA are clear and have no doubt upon the intention of the contracting parties, the

literal meaning of its stipulation shall prevail.

In order to ascertain the intention of the contracting parties, the Voluntary Arbitrator shall principally

consider their contemporaneous and subsequent acts as well as their negotiating and contractual

history and evidence of past practices.


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CALTEX REGULAR EMPLOYEES (UNION) vs. CALTEX (PHILS), INC. and NLRC

G.R. No. 111359 August 15, 1995

FACTS:

On Dec 12, 1885, petitioner Union and private respondent Caltex entered into a Collective

Bargaining Agreement (CBA) which was to be in effect until midnight of Dec 31, 1988. The CBA

included this provision:

The regular work week shall consist of 8 hours per day, 7 days, Monday thru Sunday, during which

regular rates of pay shall be paid in accordance with Annex B andwork on the employees one Day

of Rest rates of pay shall be paid as provided in Annex B.Daily working schedules shall be

established by management in accordance with the requirements of efficient operationson the basis

of 8 hours per day for any 5 days. Provided,however employees required to workin excess of 40

hours i any weekshall be compensated in accordance with Annex B of this Agreement.

The Annex B of the agreement included the computations of the overtime pay, nightshift differential,

day off pay, holiday premium pay, Sunday premium pay.

Sometime in Aug 1986, the Union called the attention of Caltex for the latters alleged violations of

Annex B (non payment of OT, NSD, etc). The industrial relations manager of Caltex informed the
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32/47

Union that the differential would be timely implemented. However, no differential payment was made

for the work performed on the first 2.5 hours on a Saturday.

The Union filed a case against Caltex f or unfair labor practice. Petitioner charged Caltex for

shortchanging its employees by paying the work performed on the first 2.5 hours of Saturday

(alleged rest day) and regular rates when it should be paying at rest day rates. Caltex denied the

charge and said that Sunday was their rest day and not Saturday.

Labor Arbiter Valentin Guanio ruled in favor of the Union and stated that according to the CBA the

employees are given 2 rest days (Sat & Sun). On appeal by Caltex, the NLRC set aside the decision

and ruled that under the CBA there is only 1 rest day (Sun). Hence, this petition for certiorari seeking

to annul and set aside the decision of NLRC.

ISSUE:

WON the CBA provides 2 rest days and therefore the first 2.5 hours of Saturday be based on rest

day rates.

HELD:

YES. The Court ruled that it is evident that the intention of the parties to the 1985 CBA was to

provide the employees with only 1 rest day. The plain and ordinary meaning of the language of Art III

is that Caltex and the Union had agreed to pay day of rest rates for work performed on an

employeesoneday of rest. The same emphasises the fact that the parties had agreed that only a

single day of rest shall be scheduled and shall be provided to the employee.

In this case, under the 1985 CBA, hours worked on a Saturday do not necessarily constitute

overtime work compensable at premium rates of pay, contrary to petitioners assertion. These are

normal or regular hours of work compensable at regular rates of pay, as provided in the 1985 CBA. It

is only when an employee has been required on a Sunday to render work in excess of the 40 hours

which constitute the regular work week that such employee may be considered as performing


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overtime work on that Saturday. We consider that the statutory prohibition against offsetting

undertime one day with overtime another day has no application in the case at bar.


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[G.R. No. L-48437. September 30, 1986.]

MANTRADE/FMMC DIVISION EMPLOYEES AND WORKERS UNION

(represented by PHILIPPINESOCIAL SECURITY LABOR UNION,Petitioner, v.

ARBITRATOR FROILAN M.BACUNGAN and MANTRADE DEVELOPMENT

CORPORATION,Respondents

FACTS: The Petitioner Mantrade/FMCC Division filed a petition for Certiorari and

Mandamus against arbitrator Froilan M. Bacungan and Mantrade Development

Corporation arising from the decision of respondent arbitrator. The arbitrator ruled

that Mantrade Development Corporation is not under legal obligation to pay holiday

pay (as provided for in Article 94 of the Labor Code in the third official Department

of Labor edition) to its monthly paid employees who are uniformly paid by the month,

irrespective of the number of working days therein, with a salary of not less than the

statutory or established minimum wage, and this rule is applicable not only as of

March 2, 1976 but as of November 1, 1974. Respondent arbitrator further opined thatrespondent corporation does not have any legal obligation to grant its monthly salaried

employees holiday pay, unless it is argued that the Sec. 2, Rule IV, Book III of the

Rules and Regulations implementing Section 94 of the Labor Code is not in

conformity with the law said provision.


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ISSUE: Whether or not the pertinent section of the Rules and Regulations

Implementing the Labor Code as amended on which respondent arbitrator based his

decision is valid.

HELD: No. The court agrees that Section 2, Rule IV, Book III of the implementing

rules and Policy Instruction No. 9 issued by the then Secretary of Labor which states

that , employees who are uniformly paid by the month, irrespective of the number of

working days therein, with a salary of not less than the statutory or established

minimum wage shall be presumed to be paid for all days in the month whether

worked or not, are null and void, since in the guise of clarifying the Labor Codes

provisions on holiday pay, they in effect amended them by enlarging the scope of

their exclusion.

1. Article 94 of the Labor Code, as amended by P.D. 850, provides: Right to holiday

pay. (a) Every worker shall be paid his regular daily wage during regular holidays,except in retail and service establishments regularly employing less than ten (10)

workers.

2. "The coverage and scope of exclusion of the Labor Codes holiday pay provisions

is spelled out under Article 82 thereof which reads: The provision of this Title shall

apply to employees in all establishments and undertakings, whether for profit or not,

but not to government employees, managerial employees, field personnel, members of

the family of

the employer who are dependent on him for support, domestic helpers, persons, in thepersonal service of another, and workers who are paid by results as determined by the

Secretary of Labor in appropriate regulations.

From the above-cited provisions, it is clear that monthly paid employees are not

excluded from the benefits of holiday pay. However, the implementing rules on

holiday pay promulgated by the then Secretary of Labor excludes monthly paid

employees from the said benefits by inserting under Rule IV, Book III of the

implementing rules, Section 2, which provides that: employees who are uniformly

paid by the month, irrespective of the number of working days therein, with a salaryof not less than the statutory or established minimum wage shall be presumed to be

paid for all days in the month whether worked or not.. WHEREFORE, the questioned

decision of respondent arbitrator is SET ASIDE and Respondent Corporation is

ordered to GRANT holiday pay to its monthly salaried employees.


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Plaza


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Aliviado vs. Procter & Gamble Philippines, Inc.

GR No. 160506, March 9,2010

Facts: Procter & Gamble (P&G) is primarily engaged in manufacture and production

of various consumer and health products, which it sells on a wholesale basis todifferent supermarkets and distributors. P&G entered into contracts with Promm-Gem

and SAPS for the promotion and merchandising of its products to enhance consumer

awareness and acceptance of the products. Aliviado and other petitioners worked as

P&Gs merchandisers, and individually signed employment contracts with either

Promm-Gem or SAPS for periods of more or less five months at a time. They were

assigned at different outlets, supermarkets, and stores where they handled all the

products of P&G, and received their wages from Promm-Gem or SAPS. Promm-Gem

and SAPS imposed disciplinary measures on erring merchandisers for reasons such as

habitual absenteeism, dishonesty or changing day-off without prior notice. InDecember 1991, petitioners filed a complaint against P&G for regularization, service

incentive leave pay, and other benefits, with damages. The complaint was later

amended to include the matter of their subsequent dismissal. On November 29, 1996,

the Labor Arbiter dismissed the case for lack of merit and ruled that there was no

employer-employee relationship between the petitioners and P&G. Labor Arbiter

found that the selection and engagement of the petitioners, the payment of their

wages, the power of dismissal and control with respect to the means and methods by

which their work was accomplished, were all done by Promm-Gem or SAPS. He

further found that Promm-Gem and SAPS were legitimate independent job

contractors. The NLRC and the CA subsequently affirmed the Labor Arbiters

findings.

Issue: Whether Promm-Gem and SAPS are labor-only contractors .

Ruling: Promm-Gem is a legitimate job contractor, while SAPS is a labor-only

contractor. Therefore, the employees of SAPS are the employees of P&G, SAPS

being merely the agent of P&G. Promm-Gem has shown evidence that it has

substantial investment which relates to the work to be performed, such as authorized

stock of P1,000,000 and a paid-in capital, or capital available for operations, ofP500,000; it has long-term assets worth over P400,000 and current assets worth over

P700,000; it maintained its own warehouse and office space with a floor area of 870

square meters; it had under its name three registered vehicles which were used for its

promotional or merchandising business; and it has clients aside from P&G. Promm-

Gem also supplied its complainant-workers with the relevant materials, such as

markers, tapes, liners, and cutters, necessary for them to perform their work. Promm-


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Gem also issued them uniforms. Also, Promm-Gem already considered the

complainants working under it as its regular, not merely contractual or project,

employees. This negates, on the part of Promm-Gem, bad faith and intent to

circumvent labor laws which factors have oftenbeen tipping points that lead the Court

to strike down the employment practice oragreement concerned as contrary to public

policy, morals, good customs, or publicorder.On the other hand, SAPS Articles of

Incorporation shows that it has a paid-incapital of only little over P31k. There is no

other evidence presented to show howmuch its working capital and assets are.

Furthermore, there is no showing of substantial investment in tools, equipment, or

other assets. It failed to show that its paid-in capital is sufficient for its 6-month

contract period with P&G to generate its needed revenue to sustain its operations

independently. Instead, it could be readily seen that its capital is not even sufficient

for one months payroll, which is pegged at little over P44,000.

Furthermore, petitioners have been charged with the merchandising and promotion ofthe products of P&G, an activity that has already been considered by the Court as

doubtlessly directly related to the manufacturing business, which is the principal

business of P&G. Considering that SAPS has no substantial capital or investment and

the workers it recruited are performing activities which are directly related to the

principal business of P&G, SAPS is engaged in labor-only contracting.


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COCA-COLA BOTTLERS PHILIPPINES V. DELA CRUZ

GR No. 184977

Decembe 7! "##9

Brion, J.

$ACTS:Respondents Dela Cruz, Guasis, Pugal, Hermo, Somero, Jr., Diocares, and Ichapare were routehelpers assigned to wor with petitioner Coca!Cola "ottlers#s trucs. Pursuant to their wor,respondents go $rom the Coca! Cola sales o$$ices or plants to customer outlets such as sari!saristores, restaurants, groceries, supermarets and the lie. %he& liewise claim that the& were

hired either directl& '& the petitioner or '& its contractors, 'ut the& do not en(o& the $ullremuneration, 'ene$its and pri)ileges granted to the petitioner*s regular sales $orce. +s a result,the& $iled to separate complaints $or their regularization with mone& claims against petitioner.%he& argued that the ser)ices the& rendered were necessar& and desira'le in the regular'usiness o$ the petitioner. n the other hand, petitioner Coca!Cola "ottlers contended that it didnot ha)e emplo&er!emplo&ee relationship with the respondents on the ground that it entered intocontracts o$ ser)ices with Peerless and -cellent Partners Cooperati)e, Inc. which entitled thelatter the right to select, hire, dismiss, super)ise, control and discipline and pa& the salaries o$all personnel the& assign to the petitioner. Respondents disclaimed the contention o$ thepetitioner, claiming that the& wored under the control and super)ision o$ the compan&*ssuper)isors who prepared their wor schedules and assignments and that Peerless was in thenature o$ a la'or!onl& contractor 'ecause o$ its insu$$icient capital to pro)ide ser)ices topetitioner.

/+: Dismissed the complaint $or lac o$ (urisdiction a$ter $inding that the respondents wereemplo&ees o$ Peerless and not o$ Coca!Cola "ottlers.0/RC: +$$irmed /+#s ruling.C+: Re)ersed the pre)ious decisions and ruled that Peerless was engaged in la'or!onl&contract 'ased on the respondents* assertions and the petitioner*s admissions that Peerlesssimpl& supplied the compan& with manpower. 1urthermore, the Court $ound no proo$ in therecords that Peerless met the re2uired capitalization and tools.


40/47

ISSUES:3. 4hether or not Peerless and -cellent Partners Cooperati)e, Inc. is a la'or!onl& contractor.5. 4hether or not the respondents are regular emplo&ees.

RULING:3.%he Court ruled in a$$irmati)e./a'or!onl& contracting shall re$er to an arrangement where the contractor or su'contractormerel& recruits, supplies or places worers to per$orm a (o', wor or ser)ice $or a principal, andan& o$ the $ollowing elements are present: 3. %he contractor or su'contractor does not ha)esu$$icient capital or in)estment which relates to the (o', wor or ser)ice to 'e per$ormed and theemplo&ees recruited, supplied or placed '& such contractor or su'contractor are per$ormingacti)ities which are directl& related to the main 'usiness o$ the principal6 R, 5. %he contractordoes not eercise the right to control o)er the per$ormance o$ the wor o$ the contractual!emplo&ee.

"& 7right to control8, it pertains to the prerogati)e o$ a part& to determine, not onl& the end resultsought to 'e achie)ed, 'ut also the means and manner to 'e used to achie)e this end.

+ e& consideration in resol)ing whether either o$ the two elements o$ a la'or!onl& contractor ispresent in a gi)en case is the contract 'etween the compan& and the purported contractors.Howe)er, the contract 'etween the principal and the contractor is not the $inal word on how thecontracted worers relate to the principal and the purported contractor6 the relationships must'e tested on the 'asis o$ how the& actuall& operate.

%he $acts o$ the case show that the respondents, acting as sales route helpers, were onl&engaged in the marginal wor o$ helping in the sale and distri'ution o$ compan& products. %he&onl& pro)ided the muscle wor that sale and distri'ution re2uired and were thus necessaril&under the compan&*s control and super)ision in doing these tass. +lso, respondents were notindependentl& selling and distri'uting compan& products, using their own e2uipment, meansand methods o$ selling and distri'ution. %he& onl& supplied the manpower that helped thecompan& in the handing o$ products $or sale and distri'ution. %here$ore, Peerless and -cellentwere mere la'or!onl& contractors who had no su$$icient capitalization and e2uipment toundertae sales and distri'ution o$ so$tdrins as independent acti)ities separate $rom themanu$acture o$ so$tdrins, and who had no control and super)ision o)er the contractedpersonnel.

5. %he Court ruled in a$$irmati)e.It $ound that respondents, $or 'eing engaged in component $unctions in the main 'usiness o$ thecompan& under the latter*s super)ision and control, were regular emplo&ees who are entitled totheir respecti)e claims.


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Philippine Bank of Communications vs NLRC (1986) G.R. L-66598

FACTS:

Petitioner Philippine Bank of Communications and the Corporate Executive Search

Inc. (CESI) entered into a letter agreement dated January 1976 under which (CESI)

undertook to provide "Temporary Services" to petitioner consisting of the "temporary

services" of eleven (11) messengers. The contract period is described as being "from

January 1976." The petitioner in truth undertook to pay a "daily service rate of P18,"


42/47

on a per person basis. Ricardo Orpiada was thus assigned to work with the petitioner

bank. As such, he rendered services to the bank, within the premises of the bank and

alongside other people also rendering services to the bank. There was some question

as to when Ricardo Orpiada commenced rendering services to the bank. On or about

October 1976, the petitioner requested (CESI) to withdraw Orpiada's assignment

because, in the allegation of the bank, Orpiada's services "were no longer needed."

Orpiada instituted a complaint in the Department of Labor against the petitioner for

illegal dismissal and failure to pay the 13th month pay provided for in Presidential

Decree No. 851. The Office of the Regional Director, Regional Office No. IV of the

Department of Labor, issued an order dismissing Orpiada's complaint for failure of

Mr. Orpiada to show the existence of an employer-employee relationship between the

bank and himself. The Labor Arbiter Dogelio rendered a decision ordering the

reinstatement of complainant to the same or equivalent position with full back wages

and to pay the latter's 13th month pay for the year 1976.On 26 October 1977, the bankappealed the decision of the Labor Arbiter to the respondent NLRC. NLRC

promulgated its decision affirming the award of the Labor Arbiter.

The petitioner bank maintains that no employer-employee relationship was

established between itself and Ricardo Orpiada and that Ricardo Orpiada was an

employee of (CESI) and not of the bank.

ISSUES:

1. What is the appropriate characterization of the relationship between the bank and(CESI)

2. Whether or not that relationship is one of employer and job (independent)

contractor or one of employer and "labor-only" contractor;

HELD:

(Hiring) Orpiada was assigned to work in the bank by (CESI) Orpiada could not have

found his way to the bank's offices had he not been first hired by (CESI) but subject to

the acceptance of the bank and the bank did accept him as will be seen shortly.

With respect to the (payment) of Orpiada's wages, the bank remitted to CE SI amounts

corresponding to the "daily service rate" of Orpiada and the others similarly assigned

by (CESI) to the bank, and (CESI) paid to Orpiada and the others the wages pertaining

to to them.


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(Dismissal) The bank requested (CESI) to withdraw Orpiada's assignment and that

(CESI) did, in fact, withdraw such assignment.

Turning to the power to (control) Orpiada's conduct, it should be noted immediately

that Orpiada performed his sections within the bank's premises, and not within the

office premises of (CESI) As such, Orpiada must have been subject to at least the

same control and supervision that the bank exercises over any other person physically

within its premises and rendering services to or for the bank, in other words, any

employee or staff member of the bank.

The second ("payment of wages") and third ("power of dismissal") factors suggest

that the relevant relationship was that subsisting between (CESI) and Orpiada, a

relationship conceded by (CESI) to be one between employer and employee. Upon the

other hand, the first ("selection and engagement") and fourth ("control of employee's

conduct") factors indicate that some direct relationship did exist between Orpiada andthe bank and that such relationship may be assimilated to employment

Articles 106 and 107 of the Labor Code of the Philippines (Presidential Decree No.

442, as amended) provides as follows:

ART. 106. Contractor or sub-contractor. Whenever an employer enters into a contract

with another person for the performance of the former's work, the employees of the

contractor and of the latter's subcontractor, if any, shall be paid in accordance with the

provisions in this Code.

In the event that the contractor or sub-contractor fails to pay the wages of his

employees in accordance with this Code, the employer shall be jointly and severally

liable with his contractor or sub-contractor to such employees to the extent of the

work performed under the contract in the same manner and extent that he is liable to

employees directly employed by him.

The Secretary of Labor may, by appropriate regulations, restrict or prohibit the

contracting out of labor to protect the rights of workers established under this Code. In

so prohibiting or restricting, he may make appropriate distinctions between labor-onlycontracting and job contracting as well as differentiations within these types of

contracting and determine who among the parties involved shall be considered the

employer for purposes of this Code, to prevent any violation or circumvention of any

provisions of this Code.


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There is "labor-only" contracting where the person supplying workers to an employer

does not have substantial capital or investment in the form of tools, equipment,

machineries, work premises, among others, and the workers recruited and placed by

such person are performing activities which are directly related to the principal

business of such employer. In such cases, the person or intermediary shall be

considered merely as an agent of the employer who shall be responsible to the

workers in the same manner and extent as if the latter were directly employed by him.

In the present case, the undertaking of (CESI) was to provide its client-the bank-with

a certain number of persons able to carry out the work of messengers. Such

undertaking of CESI was complied with when the requisite number of persons were

assigned or seconded to the petitioner bank. Orpiada utilized the premises and office

equipment of the bank and not those of (CESI) Messengerial work-the delivery of

documents to designated persons whether within or without the bank premises is of

course directly related to the day-to-day operations of the bank. Section 9(2) quotedabove does no trequire for its applicability that the petitioner must be engaged in the

delivery of items as a distinct and separate line of business.


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Sunio

Manila Water v. Pena G.R. No. 158255. July 8, 2004

Respondents: Herminio D. Pena, Esteban B. Baldoza, Jorge D. Canonigo, Jr., Ike S.

Delfin, Rizalinom. Intal, Rey T. Manlegro, John L. Marteja, Marlon B. Morada, Allan

D. Espina, Eduardo Ong, Agnesio D. Quebral, Edmundo B. Victa, Victor C. Zafaralla,

Edilberto C. Pingul And Federico M. Rivera

FACTS:

Manila Water Company, Inc. is one of the two private concessionaires contracted by

the MWSS to manage the water distribution system in the East Zone of MM. Under

the Concession Agreement, petitioner undertook to absorb former employees of the

MWSS whose names and positions were in the list furnished by the latter, while the

employment of those not in the list was terminated. Private respondents, being

contractual collectors of the MWSS, were among the 121 employees not included in

the list but petitioner engaged their services without a written contract for 3 months.Before the end of the three-month contract, the 121 collectors incorporated the

Association Collectors Group, Inc. (ACGI) which was contracted by petitioner to

collect charges for the Balara Branch. Subsequently, most of the 121 collectors were

asked by the petitioner to transfer to the First Classic Courier Services, a newly

registered corporation. Only private respondents remained with ACGI.

Private respondents filed a complaint for illegal dismissal and money claims against

petitioner, contending that they were petitioners employees as all the methods and

procedures of their collections were controlled by the latter. MWSS though assertsthat private respondents were employees of ACGI, an independent contractor. It

maintained that it had no control and supervision over private respondents manner of

performing their work except as to the results. Thus, petitioner did not have an

employer-employee relationship with the private respondents, but only a service

contractor-client relationship with ACGI.


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Labor Arbiter dismissal of respondents illegal, MWSS pay each separation pay

because all are employees

NLRC reversed; documentary evidence presented not proof of control because

disciplinary actions still left to ACGI to impose

CA reversed NLRC; MWSS deliberately prevented the creation of an employment

relationship with the private respondents; ACGI not an independent contractor

ISSUE: WN ACGI is an independent contractor.

HELD: YES. ACGI is an independent contractor but a labor-only contractor. Private

respondents are considered employees of MW

I. ACGI does not have substantial capitalization or investment in the form of tools,

equipment, machineries, work premises, and other materials, to qualify as an

independent contractor.

* While it has an authorized capital stock of P1M, only P62,500 is actually paid-in,

which cannot be considered substantial capitalization.

* The 121 collectors subscribed to 4 shares each and paid only the amount of P625.00

in order to comply with the incorporation requirements.

* ACGI has no office or work premises. Private respondents reported daily to thebranch office. In fact, the corporate address of ACGI was the residence of its

president, Mr. Herminio D. Pea.

* In dealing with the consumers, private respondents used the receipts and IDs issued

by petitioner.

II. The work of the private respondents was directly related to the principal business

or operation of petitioner. Being in the business of providing water to the consumers

in the East Zone, the collection of charges by private respondents for the petitioner

can only be categorized as clearly related to, and in the pursuit of the latters business.

III. ACGI did not carry on an independent business or undertake the performance of

its service contract according to its own manner and method, free from the control and

supervision of its principal, petitioner.


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* Prior to private respondents alleged employment with ACGI, they were already

working for Manila Water, subject to its rules and regulations with regard to the

manner and method of performing their tasks. This form of control and supervision

never changed although they were already under the seeming employ of ACGI.

Petitioner issued memoranda regarding the billing methods and distribution of

books to the collectors

It required private respondents to report daily and to remit their collections on the

same day to the branch office or to deposit them with BPI

Monitored strictly their attendance as when a collector cannot perform his daily

collection, he must notify petitioner or the branch office in the morning of the day that

he will be absent

Although it was ACGI which ultimately disciplined private respondents, the penalty

to be imposed was dictated by petitioner as shown in the letters it sent to ACGI

specifying the penalties to be meted on the erring private respondents.

ACGI was not an independent contractor since it did not carry a distinct business free

from the control and supervision of petitioner. There is no doubt that ACGI was

engaged in labor-only contracting, and as such, is considered merely an agent of the

petitioner.

In labor-only contracting, the statute creates an employer-employee relationship for acomprehensive purpose: to prevent a circumvention of labor laws. The contractor is

considered merely an agent of the principal employer and the latter is responsible to

the employees of the labor-only contractor as if such employees had been directly

employed by the principal employer.

batch 2 labor digest

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