labor law review flj case doctrines

8/17/2019 Labor Law Review Flj Case Doctrines

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LABOR LAW REVIEWCase Doctrines

A. Elements of Employer – Employee Relationship

The Manila Hotel Corp. v NLRC, 343 SCRA

!"###$

%There &as no e'istin( employer)employee relationship *et&eenSantos an+ MHCL. n +eterminin( the e'isten-e of an employer)employee relationship, the follo&in( elements are -onsi+ere+

/!$ the sele-tion an+ en(a(ement of the employee0

/!"$ the payment of &a(es0

/!3$ the po&er to +ismiss0 an+

/!4$ the po&er to -ontrol employee1s -on+2-t./

MHCL +i+ not have an+ +i+ not e'er-ise any of the aforementione+po&ers. t +i+ not sele-t respon+ent Santos as an employee for theala-e Hotel. He &as referre+ to the ala-e Hotel *y his frien+,

Nestor 2enio. MHCL +i+ not en(a(e respon+ent Santos to &or5. The terms of employment &ere ne(otiate+ an+ 6nali7e+ thro2(h-orrespon+en-e *et&een respon+ent Santos, Mr. S-hmi+t an+ Mr.Hen5, &ho &ere o8-ers an+ representatives of the ala-e Hotelan+ not MHCL. Neither +i+ respon+ent Santos a++2-e any proof that MHCL ha+ the po&er to -ontrol his -on+2-t. 9inally, it &as theala-e Hotel, thro2(h Mr. S-hmi+t an+ not MHCL that terminate+respon+ent Santos1 servi-es.

:o v. NLRC 3"4 SCRA 43; !"###$At the o2tset, &e reiterate the +o-trine that the e'isten-e of anemployer)employee relationship is 2ltimately a <2estion of fa-t an+

that the 6n+in(s thereon *y the la*or ar*iter an+ the NLRC shall *ea--or+e+ not only respe-t *2t even 6nality &hen s2pporte+ *yample evi+en-e.

n +eterminin( the e'isten-e of an employer)employee relationship,the follo&in( elements are -onsi+ere+ !$ the sele-tion an+en(a(ement of the &or5ers0 !"$ po&er of +ismissal0 !3$ thepayment of &a(es *y &hatever means0 an+ !4$ the po&er to-ontrol the &or5ers -on+2-t, &ith the latter ass2min( prima-y inthe overall -onsi+eration. The po&er of -ontrol refers to thee'isten-e of the po&er an+ not ne-essarily to the a-t2al e'er-isethereof. t is not essential for the employer to a-t2ally s2pervise the

performan-e of +2ties of the employee0 it is eno2(h that the

employer has the ri(ht to &iel+ that po&er.

A*sent a -lear sho&in( that petitioners an+ private respon+ent ha+inten+e+ to p2rs2e a relationship of in+2strial partnership, &eentertain no +o2*t that private respon+ent &as employe+ *ypetitioners as -areta5er)*ar*er. nitially, petitioners, as ne& o&nersof the *ar*ershop, hire+ private respon+ent as *ar*er *y a*sor*in(the latter in their employ. =n+o2*te+ly, the servi-es performe+ *yprivate respon+ent as *ar*er is relate+ to, an+ in the p2rs2it of the

prin-ipal *2siness a-tivity of petitioners. Later on, petitionerstappe+ private respon+ent to serve -on-2rrently as -areta5er of theshop. Certainly, petitioners ha+ the po&er to +ismiss privaterespon+ent *ein( the ones &ho en(a(e+ the servi-es of the latter.n fa-t, private respon+ent s2e+ petitioners for ille(al+ismissal, albeit -onteste+ *y the latter. As a -areta5er, privaterespon+ent &as pai+ *y petitioners &a(es in the form of honorari2m, ori(inally, at the rate of one)thir+ !>3$ of the shopsnet in-ome *2t s2*se<2ently pe((e+ at a 6'e+ amo2nt per month.As a *ar*er, private respon+ent earne+ t&o)thir+s !">3$ of the feepai+ per hair-2t or shavin( ?o* +one. 92rthermore, the follo&in(fa-ts in+2*ita*ly reveal that petitioners -ontrolle+ private

respon+ents &or5 performan-e, in that !$ private respon+ent ha+to inform petitioners of the thin(s nee+e+ in the shop0 !"$ he -o2l+only re-ommen+ the hirin( of *ar*ers an+ masse2ses, &ithpetitioners havin( the 6nal +e-ision0 !3$ he ha+ to *e at the shop at@## a.m. an+ -o2l+ leave only at @## p.m. *e-a2se he &as theone &ho opene+ an+ -lose+ it, *ein( the one entr2ste+ &ith the5ey. These +2ties &ere -omplie+ &ith *y private respon+ent 2poninstr2-tions of petitioners. Moreover, s2-h tas5 &as far from *ein(ne(li(i*le as -laime+ *y petitioners. n the -ontrary, it &as -r2-ialto the *2siness operation of petitioners as sho&n in the pre-e+in(+is-2ssion. Hen-e, there &as eno2(h *asis to +e-lare privaterespon+ent an employee of petitioners. A--or+in(ly, there is no-o(ent reason to +ist2r* the 6n+in(s of the la*or ar*iter an+ NLRCon the e'isten-e of employer)employee relationship *et&een hereinprivate parties.

Canl2*an( Se-2rity A(en-y Corporation v.

NLRC, et al., "B SCRA "# !@@"$ The ri(ht)of)-ontrol test, i.e., /&here the person for &hom theservi-es are performe+ reserves a ri(ht to -ontrol not only the en+to *e a-hieve+ *2t also the means to *e 2se+ in rea-hin( s2-h anen+/ !Sevilla vs. Co2rt of Appeals, B# SCRA ;$ *elon(in( topetitioner CSA *y e'press stip2lation of its -ontra-t &ith CARC, is

+eterminative of the e'isten-e of employer)employee relationship



*et&een CSA an+ its (2ar+s, the private respon+ents herein. Dhereno employer)employee relationship has *een proven to e'ist*et&een the private respon+ents an+ CARC, the la*or -ase 6le+*y the private respon+ents a(ainst CARC &ith LE1s ar*itration*o+y sho2l+ *e +ismisse+ for there is no le(al *asis for the privaterespon+ents1 -laims for separation pay an+ other *ene6ts a(ainstCARC.

n the similar -ase of AMERICAN PRESIDENT LINES vs. CLAVE !4

SCRA "B, 33$, &e r2le+

n the li(ht of the fore(oin( stan+ar+s, De fail to see ho& the-omplainin( &at-hmen of the Marine Se-2rity A(en-y -an *e-onsi+ere+ as employees of the petitioner. t is the a(en-y thatre-r2its, hires, an+ assi(ns the &or5 of its &at-hmen. Hen-e, a&at-hman -annot perform any se-2rity servi-e for the petitioner1svessels 2nless the a(en-y 6rst a--epts him as its &at-hmen. Dithrespe-t to his &a(es, the amo2nt to *e pai+ to a se-2rity (2ar+ is*eyon+ the po&er of the petitioner to +etermine. Certainly, thel2mp s2m amo2nt pai+ *y the petitioner to the a(en-y in-onsi+eration of the latter1s servi-e is m2-h more than the &a(esof any one &at-hman. n point of fa-t, it is the a(en-y that

<2anti6es an+ pays the &a(es to &hi-h the &at-hman is entitle+.Neither +oes the petitioner have any po&er to +ismiss the se-2rity(2ar+s. n fa-t, De fail to see any evi+en-e in the re-or+ that it&iel+e+ s2-h a po&er. t is tr2e that it may re<2est the a(en-y to-han(e a parti-2lar (2ar+. 2t this, pre-isely, is proof that thepo&er lies in the han+s of the a(en-y.

Sin-e the petitioner has to +eal &ith the a(en-y, an+ not thein+ivi+2al &at-hmen, on matters pertainin( to the -ontra-te+ tas5,it stan+s to reason that the petitioner +oes not e'er-ise any po&erover the &at-hman1s -on+2-t. Al&ays, the a(en-y stan+s *et&eenthe petitioner an+ the &at-hmen0 an+ it is the a(en-y that isans&era*le to the petitioner for the -on+2-t of its (2ar+s.

Fillamaria v. CA, !GR No. B, April @,

"##B$De a(ree &ith the r2lin( of the CA that, 2n+er the *o2n+ary)hulog s-heme in-orporate+ in the Kasunduan a +2al ?2ri+i-alrelationship &as -reate+ *et&een petitioner an+ respon+ent thatof employer)employee an+ ven+or)ven+ee. The Kasunduan +i+ note'tin(2ish the employer)employee relationship of the parties e'tant*efore the e'e-2tion of sai+ +ee+.

As early as @B, the Co2rt r2le+ in National Labor !nion v"Dinglasan that the ?eepney o&ner>operator)+river relationship

2n+er the *o2n+ary system is that of employer)employee an+ notlessor)lessee. This +o-trine &as a8rme+, 2n+er similar fa-t2alsettin(s, in Magboo v" #ernardo an+ Lantaco Sr" v" Lla$as, an+ &asanalo(o2sly applie+ to (overn the relationships *et&een a2to)calesa o&ner>operator an+ +river, *2s o&ner>operator an+-on+2-tor, an+ ta'i o&ner>operator an+ +river.

The *o2n+ary system is a s-heme *y an o&ner>operator en(a(e+in transportin( passen(ers as a -ommon -arrier to primarily (overn

the -ompensation of the +river, that is, the latters +aily earnin(sare remitte+ to the o&ner>operator less the e'-ess of the *o2n+ary&hi-h represents the +rivers -ompensation. =n+er this system, theo&ner>operator e'er-ises -ontrol an+ s2pervision over the +river. tis 2nli5e in lease of -hattels &here the lessor loses -omplete -ontrolover the -hattel lease+ *2t the lessee is still 2ltimately responsi*lefor the -onse<2en-es of its 2se. The mana(ement of the *2sinessis still in the han+s of the o&ner>operator, &ho, *ein( the hol+er of the -erti6-ate of p2*li- -onvenien-e, m2st see to it that the +riverfollo&s the ro2te pres-ri*e+ *y the fran-hisin( an+ re(2latorya2thority, an+ the r2les prom2l(ate+ &ith re(ar+ to the *2sinessoperations. The fa-t that the +river +oes not re-eive 6'e+ &a(es

*2t only the e'-ess of the *o2n+ary (iven to the o&ner>operator isnot s28-ient to -han(e the relationship *et&een them. n+2*ita*ly,the +river performs a-tivities &hi-h are 2s2ally ne-essary or+esira*le in the 2s2al *2siness or tra+e of the o&ner>operator.

=n+er the Kasunduan, respon+ent &as re<2ire+ to remit #.##+aily to petitioner, an amo2nt &hi-h represente+ the *o2n+ary of petitioner as &ell as respon+ents partial payment !hulog$ of thep2r-hase pri-e of the ?eepney.

Respon+ent &as entitle+ to 5eep the e'-ess of his +aily earnin(s ashis +aily &a(e. Th2s, the +aily remittan-es also ha+ a +2al p2rposethat of petitioners *o2n+ary an+ respon+ents partial payment!hulog$ for the vehi-le. This +2al p2rpose &as e'pressly state+ inthe Kasunduan. The &ell)settle+ r2le is that an o*li(ation is notnovate+ *y an instr2ment that e'pressly re-o(ni7es the ol+ one,-han(es only the terms of payment, an+ a++s other o*li(ations notin-ompati*le &ith the ol+ provisions or &here the ne& -ontra-tmerely s2pplements the previo2s one. The t&o o*li(ations of therespon+ent to remit to petitioner the *o2n+ary)hulog -an stan+to(ether.

n resolvin( an iss2e *ase+ on -ontra-t, this Co2rt m2st 6rste'amine the -ontra-t itself, 5eepin( in min+ that &hen the terms of the a(reement are -lear an+ leave no +o2*t as to the intention of

the -ontra-tin( parties, the literal meanin( of its stip2lations shall"



prevail. The intention of the -ontra-tin( parties sho2l+ *eas-ertaine+ *y loo5in( at the &or+s 2se+ to pro?e-t their intention,that is, all the %ords, not ?2st a parti-2lar &or+ or t&o or more&or+s stan+in( alone. The vario2s stip2lations of a -ontra-t shall *einterprete+ to(ether, attri*2tin( to the +o2*tf2l ones that sense&hi-h may res2lt from all of them ta5en ?ointly. The parts an+-la2ses m2st *e interprete+ in relation to one another to (ive eIe-tto the &hole. The le(al eIe-t of a -ontra-t is to *e +etermine+ from

the &hole rea+ to(ether.=n+er the Kasunduan, petitioner retaine+ s2pervision an+ -ontrolover the -on+2-t of the respon+ent as +river of the ?eepney, th2s

The parties e'pressly a(ree+ that petitioner, as ven+or, an+respon+ent, as ven+ee, entere+ into a -ontra-t to sell the ?eepneyon a +aily installment *asis of #.## paya*le in fo2r years an+that petitioner &o2l+ thereafter *e-ome its o&ner. A -ontra-t isone of -on+itional sale, oftentimes referre+ to as -ontra-t to sell, if the o&nership or title over the property sol+ is retaine+ *y theven+or, an+ is not passe+ to the ven+ee 2nless an+ 2ntil there isf2ll payment of the p2r-hase pri-e an+>or 2pon faithf2l -omplian-e&ith the other terms an+ -on+itions that may la&f2lly *e

stip2late+. S2-h payment or satisfa-tion of other pre-on+itions, asthe -ase may *e, is a positive s2spensive -on+ition, the fail2re of &hi-h is not a *rea-h of -ontra-t, -as2al or serio2s, *2t simply anevent that &o2l+ prevent the o*li(ation of the ven+or to -onveytitle from a-<2irin( *in+in( for-e. State+ +iIerently, the e8-a-y oro*li(atory for-e of the ven+or1s o*li(ation to transfer title iss2*or+inate+ to the happenin( of a f2t2re an+ 2n-ertain event sothat if the s2spensive -on+ition +oes not ta5e pla-e, the parties&o2l+ stan+ as if the -on+itional o*li(ation ha+ never e'iste+. Theven+or may e'tra?2+i-ially terminate the operation of the -ontra-t,ref2se -onveyan-e, an+ retain the s2ms or installments alrea+yre-eive+, &here s2-h ri(hts are e'pressly provi+e+ for.

=n+er the *o2n+ary)hulog s-heme, petitioner retaine+ o&nership of

the ?eepney altho2(h its material possession &as veste+ inrespon+ent as its +river. n -ase respon+ent faile+ to ma5ehis #.## +aily installment payment for a &ee5, the a(reement&o2l+ *e of no for-e an+ eIe-t an+ respon+ent &o2l+ have toret2rn the ?eepney to petitioner0 the employer)employeerelationship &o2l+ li5e&ise *e terminate+ 2nless petitioner &o2l+allo& respon+ent to -ontin2e +rivin( the ?eepney on a *o2n+ary*asis of #.## +aily +espite the termination of their ven+or)ven+ee relationship.

The ?2ri+i-al relationship of employer)employee *et&een petitioneran+ respon+ent &as not ne(ate+ *y the fore(oin( stip2lation in

the Kasunduan, -onsi+erin( that petitioner retaine+ -ontrol of

respon+ents -on+2-t as +river of the vehi-le. As -orre-tly r2le+ *ythe CA

The e'er-ise of -ontrol *y private respon+ent over petitioners-on+2-t in operatin( the ?eepney he &as +rivin( is in-onsistent&ith private respon+ents -laim that he is, or &as, not en(a(e+ inthe transportation *2siness0 that, even if petitioner &as allo&e+ tolet some other person +rive the 2nit, it &as not sho&n that he +i+so0 that the e'isten-e of an employment relation is not +epen+enton ho& the &or5er is pai+ *2t on the presen-e or a*sen-e of -ontrol over the means an+ metho+ of the &or50 that the amo2ntearne+ in e'-ess of the *o2n+ary hulog is e<2ivalent to &a(es0 an+that the fa-t that the po&er of +ismissal &as not mentione+ inthe Kasunduan +i+ not mean that private respon+ent nevere'er-ise+ s2-h po&er, or -o2l+ not e'er-ise s2-h po&er.

Moreover, re<2irin( petitioner to +rive the 2nit for -ommer-ial 2se,or to &ear an i+enti6-ation -ar+, or to +on a +e-ent attire, or topar5 the vehi-le in Fillamaria Motors (ara(e, or to informFillamaria Motors a*o2t the fa-t that the 2nit &o2l+ *e (oin( o2t tothe provin-e for t&o +ays of more, or to +rive the 2nit -aref2lly,et-. ne-essarily relate+ to -ontrol over the means *y &hi-h thepetitioner &as to (o a*o2t his &or50 that the r2lin( appli-a*le here

is not Singer Se%ing Machine *2t National Labor !nion sin-e thelatter -ase involve+ ?eepney o&ners>operators an+ ?eepney +rivers,an+ that the fa-t that the *o2n+ary here represente+ installmentpayment of the p2r-hase pri-e on the ?eepney +i+ not &ith+ra& therelationship from that of employer)employee, in vie& of the overtpresen-e of s2pervision an+ -ontrol *y the employer.

Neither is s2-h ?2ri+i-al relationship ne(ate+ *y petitioners -laimthat the terms an+ -on+itions in the Kasunduan relative torespon+ents *ehavior an+ +eportment as +river &as for his an+respon+ents *ene6t to ins2re that respon+ent &o2l+ *e a*le topay the re<2isite +aily installment of #.##, an+ that the vehi-le&o2l+ still *e in (oo+ -on+ition +espite the lapse of fo2r

years. Dhat is primor+ial is that petitioner retaine+ -ontrol over the-on+2-t of the respon+ent as +river of the ?eepney.

n+ee+, petitioner, as the o&ner of the vehi-le an+ the hol+er of thefran-hise, is entitle+ to e'er-ise s2pervision an+ -ontrol over therespon+ent, *y seein( to it that the ro2te provi+e+ in his fran-hise,an+ the r2les an+ re(2lations of the Lan+ Transportation Re(2latoryoar+ are +2ly -omplie+ &ith. Moreover, in a *2sinessesta*lishment, an i+enti6-ation -ar+ is 2s2ally provi+e+ not ?2st asa se-2rity meas2re *2t to mainly i+entify the hol+er thereof asa bona &de employee of the 6rm &ho iss2es it.

3



AS)CN roa+-astin( Corp. v. Na7areno !G.R.

No. B4B, Sept. "B, "##B$n the -ase at *ar, ho&ever, the employer)employee relationship*et&een petitioner an+ respon+ents has *een proven.

9irst. n the sele-tion an+ en(a(ement of respon+ents, no pe-2liaror 2ni<2e s5ill, talent or -ele*rity stat2s &as re<2ire+ from them*e-a2se they &ere merely hire+ thro2(h petitionerJs personnel+epartment ?2st li5e any or+inary employee.

Se-on+. The so)-alle+ /talent fees/ of respon+ents -orrespon+ to&a(es (iven as a res2lt of an employer)employee relationship.Respon+ents +i+ not have the po&er to *ar(ain for h2(e talentfees, a -ir-2mstan-e ne(atin( in+epen+ent -ontra-t2alrelationship.

Thir+. etitioner -o2l+ al&ays +is-har(e respon+ents sho2l+ it 6n+their &or5 2nsatisfa-tory, an+ respon+ents are hi(hly +epen+ent onthe petitioner for -ontin2e+ &or5.

9o2rth. The +e(ree of -ontrol an+ s2pervision e'er-ise+ *y

petitioner over respon+ents thro2(h its s2pervisors ne(ates thealle(ation that respon+ents are in+epen+ent -ontra-tors.

The pres2mption is that &hen the &or5 +one is an inte(ral part of the re(2lar *2siness of the employer an+ &hen the &or5er, relativeto the employer, +oes not f2rnish an in+epen+ent *2siness orprofessional servi-e, s2-h &or5 is a re(2lar employment of s2-hemployee an+ not an in+epen+ent -ontra-tor. The Co2rt &ill per2se*eyon+ any s2-h a(reement to e'amine the fa-ts that typify thepartiesJ a-t2al relationship.

t follo&s then that respon+ents are entitle+ to the *ene6tsprovi+e+ for in the e'istin( CA *et&een petitioner an+ its ran5)

an+)6le employees. As re(2lar employees, respon+ents are entitle+to the *ene6ts (rante+ to all other re(2lar employees of petitioner2n+er the CA. De <2ote &ith approval the r2lin( of the appellate-o2rt, that the reason &hy pro+2-tion assistants &ere e'-l2+e+from the CA is pre-isely *e-a2se they &ere erroneo2sly -lassi6e+an+ treate+ as pro?e-t employees *y petitioner

' ' ' The a&ar+ in favor of private respon+ents of the *ene6tsa--or+e+ to ran5)an+)6le employees of AS)CN 2n+er the @@B)@@@ CA is a ne-essary -onse<2en-e of p2*li- respon+entJs r2lin(that private respon+ents as pro+2-tion assistants of petitioner arere(2lar employees. The monetary a&ar+ is not -onsi+ere+ as-laims involvin( the interpretation or implementation of the

-olle-tive *ar(ainin( a(reement. The reason &hy pro+2-tion

assistants &ere e'-l2+e+ from the sai+ a(reement is pre-isely*e-a2se they &ere -lassi6e+ an+ treate+ as pro?e-t employees *ypetitioner.

As earlier state+, it is not the &ill or &or+ of the employer &hi-h+etermines the nat2re of employment of an employee *2t thenat2re of the a-tivities performe+ *y s2-h employee in relation tothe parti-2lar *2siness or tra+e of the employer. Consi+erin( thatDe have -learly fo2n+ that private respon+ents are re(2lar

employees of petitioner, their e'-l2sion from the sai+ CA on themispla-e+ *elief of the parties to the sai+ a(reement that they arepro?e-t employees, is therefore not proper. 9in+in( sai+ privaterespon+ents as re(2lar employees an+ not as mere pro?e-temployees, they m2st *e a--or+e+ the *ene6ts +2e 2n+er the sai+Colle-tive ar(ainin( A(reement.

hil. Glo*al Comm2ni-ations v. e Fera !G.R.

No. ;"4, :2ne ;, "##$n a lon( line of +e-isions, the Co2rt, in +eterminin( the e'isten-eof an employer)employee relationship, has invaria*ly a+here+ to

the fo2r)fol+ test.Applyin( the fo2r)fol+ test to this -ase, &e initially 6n+ that it &asrespon+ent himself &ho sets the parameters of &hat his +2ties&o2l+ *e in oIerin( his servi-es to petitioner. This is *orne *y noless than his May @ letter.

Si(ni6-antly, the fore(oin( letter &as s2*stantially the *asis of thela*or ar*iters 6n+in( that there e'iste+ no employer)employeerelationship *et&een petitioner an+ respon+ent, in a++ition to thefollo&in( fa-t2al settin(s

The fa-t that the -omplainant &as not -onsi+ere+ an employee &asre-o(ni7e+ *y the -omplainant himself in a si(ne+ letter to the

respon+ent.

The tenor of this letter in+i-ates that the -omplainant &asproposin( to e'ten+ his time &ith the respon+ent an+ see5in(a++itional -ompensation for sai+ e'tension. This sho&s that therespon+ent HLCM +i+ not have -ontrol over the s-he+2le of the-omplainant as it Kis the -omplainant &ho is proposin( his o&ns-he+2le an+ as5in( to *e pai+ for the same. This is proof that the-omplainant 2n+erstoo+ that his relationship &ith the respon+entHLCM &as a retaine+ physi-ian an+ not as an employee. f he&ere an employee he -o2l+ not ne(otiate as to his ho2rs of &or5.

The -omplainant is a o-tor of Me+i-ine, an+ pres2ma*ly, a &ell)

4



e+2-ate+ person. et, the -omplainant, in his position paper, is-laimin( that he is not -onversant &ith the la& an+ +i+ not (ivem2-h attention to his ?o* title) on a retainer *asis. 2t the same-omplainant a+mits in his a8+avit that his servi-e for therespon+ent &as -overe+ *y a retainership -ontra-t K&hi-h &asrene&e+ every year from @" to @@4. =pon rea+in( the -ontra-t+ate+ Septem*er B, @", si(ne+ *y the -omplainant himself !Anne' C of Respon+ents osition aper$, it -learly states that is a

retainership -ontra-t. The retainer fee is in+i-ate+ thereon an+ the+2ration of the -ontra-t for one year is also -learly in+i-ate+ inpara(raph of the Retainership Contra-t. The -omplainant -annot-laim that he &as 2na&are that the -ontra-t &as (oo+ only for oneyear, as he si(ne+ the same &itho2t any o*?e-tions. The-omplainant also a--epte+ its rene&al every year thereafter 2ntil@@4. As a literate person an+ e+2-ate+ person, the -omplainant-annot -laim that he +oes not 5no& &hat -ontra-t he si(ne+ an+that it &as rene&e+ on a year to year *asis.

The la*or ar*iter a++e+ the indicia not +isp2te+ *y respon+ent,that from the time he starte+ to &or5 &ith petitioner, he never &asin-l2+e+ in its payroll0 &as never +e+2-te+ any -ontri*2tion for

remittan-e to the So-ial Se-2rity System !SSS$0 an+ &as in fa-ts2*?e-te+ *y petitioner to the ten !#$ per-ent &ithhol+in( ta' forhis professional fee, in a--or+an-e &ith the National nternalReven2e Co+e, matters &hi-h are simply in-onsistent &ith anemployer)employee relationship.

Clearly, the elements of an employer)employee relationship are&antin( in this -ase. De may a++ that the re-or+s are replete &ithevi+en-e sho&in( that respon+ent ha+ to *ill petitioner for hismonthly professional fees. t simply r2ns a(ainst the (rain of -ommon e'perien-e to ima(ine that an or+inary employee has yetto *ill his employer to re-eive his salary.

De note, too, that the po&er to terminate the parties relationship&as m2t2ally veste+ on *oth. Either may terminate thearran(ement at &ill, &ith or &itho2t -a2se.

9inally, remar5a*ly a*sent from the parties arran(ement is theelement of -ontrol, &here*y the employer has reserve+ the ri(ht to-ontrol the employee not only as to the res2lt of the &or5 +one *2talso as to the means an+ metho+s *y &hi-h the same is to *ea--omplishe+.

Here, petitioner ha+ no -ontrol over the means an+ metho+s *y&hi-h respon+ent &ent a*o2t performin( his &or5 at the -ompanypremises. He -o2l+ even em*ar5 in the private pra-ti-e of his

profession, not to mention the fa-t that respon+ents &or5 ho2rsan+ the a++itional -ompensation therefor &ere ne(otiate+ 2pon *ythe parties. n 6ne, the parties themselves pra-ti-ally a(ree+ onevery terms an+ -on+itions of respon+ents en(a(ement, &hi-hthere*y ne(ates the element of -ontrol in their relationship. 9ors2re, respon+ent has never -ite+ even a sin(le instan-e &henpetitioner interfere+ &ith his &or5.

Chave7 v. NLRC !G.R. No. 4B3#, :an2ary ;,"##$ The most important element is the employers -ontrol of theemployees -on+2-t, not only as to the res2lt of the &or5 to *e+one, *2t also as to the means an+ metho+s to a--omplish it. Allthe fo2r elements are present in this -ase.

9irst. =n+enia*ly, it &as the respon+ents &ho en(a(e+ the servi-esof the petitioner &itho2t the intervention of a thir+ party.

Se-on+. Da(es are +e6ne+ as rem2neration or earnin(s, ho&ever+esi(nate+, -apa*le of *ein( e'presse+ in terms of money, &hether6'e+ or as-ertaine+ on a time, tas5, pie-e or -ommission *asis, orother metho+ of -al-2latin( the same, &hi-h is paya*le *y anemployer to an employee 2n+er a &ritten or 2n&ritten -ontra-t of employment for &or5 +one or to *e +one, or for servi-e ren+ere+ orto *e ren+ere+. That the petitioner &as pai+ on a per trip *asis isnot si(ni6-ant. This is merely a metho+ of -omp2tin( -ompensationan+ not a *asis for +eterminin( the e'isten-e or a*sen-e of employer)employee relationship. ne may *e pai+ on the *asis of res2lts or time e'pen+e+ on the &or5, an+ may or may not a-<2irean employment stat2s, +epen+in( on &hether the elements of anemployer)employee relationship are present or not. n this -ase, it-annot *e (ainsai+ that the petitioner re-eive+ -ompensation fromthe respon+ent -ompany for the servi-es that he ren+ere+ to thelatter.

Moreover, 2n+er the R2les mplementin( the La*or Co+e, everyemployer is re<2ire+ to pay his employees *y means of payroll. Thepayroll sho2l+ sho&, amon( other thin(s, the employees rate of pay, +e+2-tions ma+e, an+ the amo2nt a-t2ally pai+ to theemployee. nterestin(ly, the respon+ents +i+ not present thepayroll to s2pport their -laim that the petitioner &as not theiremployee, raisin( spe-2lations &hether this omission proves thatits presentation &o2l+ *e a+verse to their -ase.

Thir+. The respon+ents po&er to +ismiss the petitioner &as

inherent in the fa-t that they en(a(e+ the servi-es of the petitioner



as tr2-5 +river. They e'er-ise+ this po&er *y terminatin( thepetitioners servi-es al*eit in the (2ise of severan-e of -ontra-t2alrelation +2e alle(e+ly to the latters *rea-h of his -ontra-t2alo*li(ation.

9o2rth. As earlier opine+, of the fo2r elements of the employer)employee relationship, the -ontrol test is the most important.Compare+ to an employee, an in+epen+ent -ontra-tor is one &ho-arries on a +istin-t an+ in+epen+ent *2siness an+ 2n+erta5es to

perform the ?o*, &or5, or servi-e on its o&n a--o2nt an+ 2n+er itso&n responsi*ility a--or+in( to its o&n manner an+ metho+, freefrom the -ontrol an+ +ire-tion of the prin-ipal in all matters-onne-te+ &ith the performan-e of the &or5 e'-ept as to theres2lts thereof. Hen-e, &hile an in+epen+ent -ontra-tor en?oysin+epen+en-e an+ free+om from the -ontrol an+ s2pervision of hisprin-ipal, an employee is s2*?e-t to the employers po&er to -ontrolthe means an+ metho+s *y &hi-h the employees &or5 is to *eperforme+ an+ a--omplishe+.

Altho2(h the respon+ents +enie+ that they e'er-ise+ -ontrol overthe manner an+ metho+s *y &hi-h the petitioner a--omplishe+ his

&or5, a -aref2l revie& of the re-or+s sho&s that the latterperforme+ his &or5 as tr2-5 +river 2n+er the respon+entss2pervision an+ -ontrol. Their ri(ht of -ontrol &as manifeste+ *ythe follo&in( atten+ant -ir-2mstan-es

. The tr2-5 +riven *y the petitioner *elon(e+ to respon+ent-ompany0

". There &as an e'press instr2-tion from the respon+ents that thetr2-5 shall *e 2se+ e'-l2sively to +eliver respon+ent -ompanys(oo+s0

3. Respon+ents +ire-te+ the petitioner, after -ompletion of ea-h+elivery, to par5 the tr2-5 in either of t&o spe-i6- pla-es only, to&it at its o8-e in Metro Manila at "3"# smea Street, Ma5ati Cityor at EO, Mariveles, ataan0 an+

4. Respon+ents +etermine+ ho&, &here an+ &hen the petitioner&o2l+ perform his tas5 *y iss2in( to him (ate passes an+ ro2tin(slips.

a. The ro2tin( slips in+i-ate+ on the -ol2mn REMARPS, the-hronolo(i-al or+er an+ priority of +elivery s2-h as +rop, " +rop,3 +rop, et-. This meant that the petitioner ha+ to +eliver the samea--or+in( to the or+er of priority in+i-ate+ therein.

*. The ro2tin( slips, li5e&ise, sho&e+ &hether the (oo+s &ere to *e+elivere+ 2r(ently or not *y the &or+ R=SH printe+ thereon.

-. The ro2tin( slips also in+i-ate+ the e'a-t time as to &hen the

(oo+s &ere to *e +elivere+ to the -2stomers as, for e'ample, the&or+s tomorro& mornin( &as &ritten on slip no. ";;B.

These -ir-2mstan-es, to the Co2rts min+, prove that therespon+ents e'er-ise+ -ontrol over the means an+ metho+s *y&hi-h the petitioner a--omplishe+ his &or5 as tr2-5 +river of therespon+ent -ompany. n the other han+, the Co2rt is har+ p2t to*elieve the respon+ents alle(ation that the petitioner &as anin+epen+ent -ontra-tor en(a(e+ in provi+in( +elivery or ha2lin(

servi-es &hen he +i+ not even o&n the tr2-5 2se+ for s2-hservi-es. Evi+ently, he +i+ not possess s2*stantial -apitali7ation orinvestment in the form of tools, ma-hinery an+ &or5 premises.Moreover, the petitioner performe+ the +elivery servi-ese'-l2sively for the respon+ent -ompany for a -ontin2o2s an+2ninterr2pte+ perio+ of ten years.

The -ontra-t of servi-e to the -ontrary not&ithstan+in(, the fa-t2al-ir-2mstan-es earlier +is-2sse+ in+2*ita*ly esta*lish the e'isten-eof an employer)employee relationship *et&een the respon+ent-ompany an+ the petitioner. t *ears stressin( that the e'isten-e of an employer)employee relationship -annot *e ne(ate+ *y e'presslyrep2+iatin( it in a -ontra-t an+ provi+in( therein that the employeeis an in+epen+ent -ontra-tor &hen, as in this -ase, the fa-ts -learlysho& other&ise. n+ee+, the employment stat2s of a person is+e6ne+ an+ pres-ri*e+ *y la& an+ not *y &hat the parties say itsho2l+ *e.

An(elina 9ran-is-o v. NLRC !G.R. No. ;##;,

A2(2st 3, "##B$De hel+ in Sevilla v" Court o' A((eals that in this ?2ris+i-tion, therehas *een no 2niform test to +etermine the e'isten-e of anemployer)employee relation. Generally, -o2rts have relie+ on theso)-alle+ ri(ht of -ontrol test &here the person for &hom the

servi-es are performe+ reserves a ri(ht to -ontrol not only the en+to *e a-hieve+ *2t also the means to *e 2se+ in rea-hin( s2-hen+. n a++ition to the stan+ar+ of ri(ht)of)-ontrol, the e'istin(e-onomi- -on+itions prevailin( *et&een the parties, li5e thein-l2sion of the employee in the payrolls, -an help in +eterminin(the e'isten-e of an employer)employee relationship.

Ho&ever, in -ertain -ases the -ontrol test is not s28-ient to (ive a-omplete pi-t2re of the relationship *et&een the parties, o&in( tothe -omple'ity of s2-h a relationship &here several positions have*een hel+ *y the &or5er. There are instan-es &hen, asi+e from theemployers po&er to -ontrol the employee &ith respe-t to the

means an+ metho+s *y &hi-h the &or5 is to *e a--omplishe+,B



e-onomi- realities of the employment relations help provi+e a-omprehensive analysis of the tr2e -lassi6-ation of the in+ivi+2al,&hether as employee, in+epen+ent -ontra-tor, -orporate o8-er orsome other -apa-ity.

The *etter approa-h &o2l+ therefore *e to a+opt a t&o)tiere+ testinvolvin( !$ the p2tative employers po&er to -ontrol theemployee &ith respe-t to the means an+ metho+s *y &hi-h the&or5 is to *e a--omplishe+0 an+ !"$ the 2n+erlyin( e-onomi-

realities of the a-tivity or relationship.

This t&o)tiere+ test &o2l+ provi+e 2s &ith a frame&or5 of analysis,&hi-h &o2l+ ta5e into -onsi+eration the totality of -ir-2mstan-ess2rro2n+in( the tr2e nat2re of the relationship *et&een theparties. This is espe-ially appropriate in this -ase &here there is no&ritten a(reement or terms of referen-e to *ase the relationshipon0 an+ +2e to the -omple'ity of the relationship *ase+ on thevario2s positions an+ responsi*ilities (iven to the &or5er over theperio+ of the latters employment.

The -ontrol test initially fo2n+ appli-ation in the -ase of Viaa v" Al)Lagadan and Piga, an+ lately in Leonardo v" Court o'

A((eals, &here &e hel+ that there is an employer)employeerelationship &hen the person for &hom the servi-es are performe+reserves the ri(ht to -ontrol not only the en+ a-hieve+ *2t also themanner an+ means 2se+ to a-hieve that en+.

n Sevilla v" Court o' A((eals, &e o*serve+ the nee+ to -onsi+er thee'istin( e-onomi- -on+itions prevailin( *et&een the parties, ina++ition to the stan+ar+ of ri(ht)of)-ontrol li5e the in-l2sion of theemployee in the payrolls, to (ive a -learer pi-t2re in +eterminin(the e'isten-e of an employer)employee relationship *ase+ on ananalysis of the totality of e-onomi- -ir-2mstan-es of the &or5er.

Th2s, the +etermination of the relationship *et&een employer an+

employee +epen+s 2pon the -ir-2mstan-es of the &hole e-onomi-a-tivity, s2-h as !$ the e'tent to &hi-h the servi-es performe+ arean inte(ral part of the employers *2siness0 !"$ the e'tent of the&or5ers investment in e<2ipment an+ fa-ilities0 !3$ the nat2re an++e(ree of -ontrol e'er-ise+ *y the employer0 !4$ the &or5ersopport2nity for pro6t an+ loss0 !$ the amo2nt of initiative, s5ill, ?2+(ment or foresi(ht re<2ire+ for the s2--ess of the -laime+in+epen+ent enterprise0 !B$ the permanen-y an+ +2ration of therelationship *et&een the &or5er an+ the employer0 an+ !;$ the+e(ree of +epen+en-y of the &or5er 2pon the employer for his-ontin2e+ employment in that line of *2siness.

The proper stan+ar+ of e-onomi- +epen+en-e is &hether the

&or5er is +epen+ent on the alle(e+ employer for his -ontin2e+employment in that line of *2siness. n the =nite+ States, theto2-hstone of e-onomi- reality in analy7in( possi*le employmentrelationships for p2rposes of the 9e+eral La*or Stan+ar+s A-t is+epen+en-y. y analo(y, the *en-hmar5 of e-onomi- reality inanaly7in( possi*le employment relationships for p2rposes of theLa*or Co+e o2(ht to *e the e-onomi- +epen+en-e of the &or5er onhis employer.

y applyin( the -ontrol test, there is no +o2*t that petitioner is anemployee of Pasei Corporation *e-a2se she &as 2n+er the +ire-t-ontrol an+ s2pervision of Sei?i Pam2ra, the -orporations Te-hni-alCons2ltant. She reporte+ for &or5 re(2larly an+ serve+ in vario2s-apa-ities as A--o2ntant, Liaison 8-er, Te-hni-al Cons2ltant,A-tin( Mana(er an+ Corporate Se-retary, &ith s2*stantially thesame ?o* f2n-tions, that is, ren+erin( a--o2ntin( an+ ta' servi-esto the -ompany an+ performin( f2n-tions ne-essary an+ +esira*lefor the proper operation of the -orporation s2-h as se-2rin(*2siness permits an+ other li-enses over an in+e6nite perio+ of en(a(ement.

=n+er the *roa+er e-onomi- reality test, the petitioner -an li5e&ise*e sai+ to *e an employee of respon+ent -orporation *e-a2se sheha+ serve+ the -ompany for si' years *efore her +ismissal,re-eivin( -he-5 vo2-hers in+i-atin( her salaries>&a(es, *ene6ts,3 month pay, *on2ses an+ allo&an-es, as &ell as +e+2-tions an+So-ial Se-2rity -ontri*2tions from A2(2st , @@@ to e-em*er ,"###. Dhen petitioner &as +esi(nate+ General Mana(er,respon+ent -orporation ma+e a report to the SSS si(ne+ *y reneallesteros. etitioners mem*ership in the SSS as manifeste+ *y a-opy of the SSS spe-imen si(nat2re -ar+ &hi-h &as si(ne+ *y theresi+ent of Pasei Corporation an+ the in-l2sion of her name in theon)line in<2iry system of the SSS evin-es the e'isten-e of an

employer)employee relationship *et&een petitioner an+ respon+ent-orporation.

t is therefore apparent that petitioner is e-onomi-ally +epen+enton respon+ent -orporation for her -ontin2e+ employment in thelatters line of *2siness.

n Do$asig v" National Labor Relations Co$$ission, &e hel+ that ina *2siness esta*lishment, an i+enti6-ation -ar+ is provi+e+ not onlyas a se-2rity meas2re *2t mainly to i+entify the hol+er thereof as a*ona 6+e employee of the 6rm that iss2es it. To(ether &ith the-ash vo2-hers -overin( petitioners salaries for the months state+therein, these matters -onstit2te s2*stantial evi+en-e a+e<2ate to

s2pport a -on-l2sion that petitioner &as an employee of private;



respon+ent.

De li5e&ise r2le+ in *lores v" Nuestro that a -orporation &hore(isters its &or5ers &ith the SSS is proof that the latter &ere theformers employees. The -overa(e of So-ial Se-2rity La& ispre+i-ate+ on the e'isten-e of an employer)employee relationship.

92rthermore, the a8+avit of Sei?i Pam2ra +ate+ e-em*er , "##has -learly esta*lishe+ that petitioner never a-te+ as Corporate

Se-retary an+ that her +esi(nation as s2-h &as only for-onvenien-e. The a-t2al nat2re of petitioners ?o* &as as Pam2ras+ire-t assistant &ith the +2ty of a-tin( as Liaison 8-er inrepresentin( the -ompany to se-2re -onstr2-tion permits, li-enseto operate an+ other re<2irements impose+ *y (overnmenta(en-ies. etitioner &as never entr2ste+ &ith -orporate +o-2mentsof the -ompany, nor re<2ire+ to atten+ the meetin( of the-orporation. She &as never privy to the preparation of any+o-2ment for the -orporation, altho2(h on-e in a &hile she &asre<2ire+ to si(n prepare+ +o-2mentation for the -ompany.

The se-on+ a8+avit of Pam2ra +ate+ Mar-h ;, "##" &hi-hrep2+iate+ the e-em*er , "## a8+avit has *een alle(e+ly

&ith+ra&n *y Pam2ra himself from the re-or+s of the-ase. Re(ar+less of this fa-t, &e are -onvin-e+ that the alle(ationsin the 6rst a8+avit are s28-ient to esta*lish that petitioner is anemployee of Pasei Corporation.

Grantin( arguendo, that the se-on+ a8+avit vali+ly rep2+iate+ the6rst one, -o2rts +o not (enerally loo5 &ith favor on any retra-tionor re-ante+ testimony, for it -o2l+ have *een se-2re+ *y-onsi+erations other than to tell the tr2th an+ &o2l+ ma5e solemntrials a mo-5ery an+ pla-e the investi(ation of the tr2th at themer-y of 2ns-r2p2lo2s &itnesses. A re-antation +oes notne-essarily -an-el an earlier +e-laration, *2t li5e any other

testimony the same is s2*?e-t to the test of -re+i*ility an+ sho2l+*e re-eive+ &ith -a2tion.

ase+ on the fore(oin(, there -an *e no other -on-l2sion thatpetitioner is an employee of respon+ent Pasei Corporation. She &assele-te+ an+ en(a(e+ *y the -ompany for -ompensation, an+ ise-onomi-ally +epen+ent 2pon respon+ent for her -ontin2e+employment in that line of *2siness. Her main ?o* f2n-tion involve+a--o2ntin( an+ ta' servi-es ren+ere+ to respon+ent -orporation ona re(2lar *asis over an in+e6nite perio+ of en(a(ement. Respon+ent -orporation hire+ an+ en(a(e+ petitionerfor -ompensation, &ith the po&er to +ismiss her for -a2se. Moreimportantly, respon+ent -orporation ha+ the po&er to -ontrol

petitioner &ith the means an+ metho+s *y &hi-h the &or5 is to *ea--omplishe+.

ri7-o v. 9ifth ivision of the Co2rt of Appeals,

B" SCRA 3B !"##$% The test is &hether the employer -ontrols or has reserve+ theri(ht to -ontrol the employee, not only as to the &or5 +one, *2talso as to the means an+ metho+s *y &hi-h the same is

a--omplishe+.

Not all r2les impose+ *y the hirin( party on the hire+ party in+i-atethat the latter is an employee of the former. R2les &hi-h serve as(eneral (2i+elines to&ar+s the a-hievement of the m2t2ally+esire+ res2lt are not in+i-ative of the po&er of -ontrol. Th2s, thisCo2rt has e'plaine+

t sho2l+, ho&ever, *e o*vio2s that not every form of -ontrol thatthe hirin( party reserves to himself over the -on+2-t of the partyhire+ in relation to the servi-es ren+ere+ may *e a--or+e+ theeIe-t of esta*lishin( an employer)employee relationship *et&eenthem in the le(al or te-hni-al sense of the term. A line m2st *e

+ra&n some&here, if the re-o(ni7e+ +istin-tion *et&een anemployee an+ an in+ivi+2al -ontra-tor is not to vanish alto(ether.Realisti-ally, it &o2l+ *e a rare -ontra-t of servi-e that (ives2ntrammelle+ free+om to the party hire+ an+ es-he&s anyintervention &hatsoever in his performan-e of the en(a(ement.

Lo(i-ally, the line sho2l+ *e +ra&n *et&een r2les that merelyserve as (2i+elines to&ar+s the a-hievement of the m2t2ally+esire+ res2lt &itho2t +i-tatin( the means or metho+s to *eemploye+ in attainin( it, an+ those that -ontrol or 6' themetho+olo(y an+ *in+ or restri-t the party hire+ to the 2se of s2-hmeans. The 6rst, &hi-h aim only to promote the res2lt, -reate noemployer)employee relationship 2nli5e the se-on+, &hi-h a++ress*oth the res2lt an+ the means 2se+ to a-hieve it. ' ' '.

The main +eterminant therefore is &hether the r2les set *y theemployer are meant to -ontrol not ?2st the res2lts of the &or5 *2talso the means an+ metho+ to *e 2se+ *y the hire+ party in or+erto a-hieve s2-h res2lts. Th2s, in this -ase, &e are to e'amine thefa-tors en2merate+ *y petitioner to see if these are merely(2i+elines or if they in+ee+ f2l6ll the re<2irements of the -ontroltest.

etitioner *elieves that respon+entsJ a-ts are meant to -ontrol ho&she e'e-2tes her &or5. De +o not a(ree. A -aref2l e'aminationreveals that the fa-tors en2merate+ *y the petitioner are inherent-on+itions in r2nnin( a ne&spaper. n other &or+s, the so)-alle+



-ontrol as to time, spa-e, an+ +is-ipline are +i-tate+ *y the verynat2re of the ne&spaper *2siness itself.

De a(ree &ith the o*servations of the 8-e of the Soli-itorGeneral that

The n<2irer is the p2*lisher of a ne&spaper of (eneral -ir-2lation&hi-h is &i+ely rea+ thro2(ho2t the -o2ntry. As s2-h, p2*li-interest +i-tates that every arti-le appearin( in the ne&spapersho2l+ s2*s-ri*e to the stan+ar+s set *y the n<2irer, &ith its

tho2san+s of rea+ers in min+. t is not, therefore, 2n2s2al for then<2irer to -ontrol &hat &o2l+ *e p2*lishe+ in the ne&spaper. Dhatis important is the fa-t that s2-h -ontrol pertains only to the en+res2lt, i.e., the s2*mitte+ arti-les. The n<2irer has no -ontrol overKpetitioner as to the means or metho+ 2se+ *y her in thepreparation of her arti-les. The arti-les are +one *y Kpetitionerherself &itho2t any intervention from the n<2irer.

etitioner has not sho&n that , a-tin( thro2(h its e+itors,+i-tate+ ho& she &as to &rite or pro+2-e her arti-les ea-h &ee5.Asi+e from the -onstraints presente+ *y the spa-e allo-ation of her-ol2mn, there &ere no restraints on her -reativity0 petitioner &asfree to &rite her -ol2mn in the manner an+ style she &as

a--2stome+ to an+ to 2se &hatever resear-h metho+ she +eeme+s2ita*le for her p2rpose. The apparent limitation that she ha+ to&rite only on s2*?e-ts that *e6tte+ the Lifestyle se-tion +i+ nottranslate to -ontrol, *2t &as simply a lo(i-al -onse<2en-e of thefa-t that her -ol2mn appeare+ in that se-tion an+ therefore ha+ to-ater to the preferen-e of the rea+ers of that se-tion.

The per-eive+ -onstraint on petitionerJs -ol2mn &as +i-tate+ *yher o&n -hoi-e of her -ol2mnJs perspe-tive. The -ol2mn title/9eminist ReQe-tions/ &as of her o&n -hoosin(, as she herself a+mitte+, sin-e she ha+ *een 5no&n as a feminist &riter. Th2s,respon+ent , as &ell as her rea+ers, -o2l+ reasona*ly e'pe-t her

-ol2mns to spea5 from s2-h perspe-tive.Contrary to petitionerJs protestations, it +oes not appear that there&as any a-t2al restraint or limitation on the s2*?e-t matter – &ithinthe Lifestyle se-tion – that she -o2l+ &rite a*o2t. Respon+ent +i+ not +i-tate ho& she &rote or &hat she &rote in her -ol2mn.Neither +i+ Js (2i+elines +i-tate the 5in+ of resear-h, time, an+eIort she p2t into ea-h -ol2mn. n fa-t, petitioner herself sai+ thatshe re-eive+ /no -omments on her arti-les%e'-ept for her toshorten them to 6t into the *o' allotte+ to her -ol2mn./ Therefore,the -ontrol that e'er-ise+ over petitioner &as only as to the6nishe+ pro+2-t of her eIorts, i.e., the -ol2mn itself, *y &ay of either shortenin( or o2tri(ht re?e-tion of the -ol2mn.

The ne&spaperJs po&er to approve or re?e-t p2*li-ation of anyspe-i6- arti-le she &rote for her -ol2mn -annot *e the -ontrol-ontemplate+ in the /-ontrol test,/ as it is *2t lo(i-al that one &ho-ommissions another to +o a pie-e of &or5 sho2l+ have the ri(ht toa--ept or re?e-t the pro+2-t. The important fa-tor to -onsi+er in the/-ontrol test/ is still the element of -ontrol over ho& the &or5 itself is +one, not ?2st the en+ res2lt thereof.

n -ontrast, a re(2lar reporter is not as in+epen+ent in +oin( his or

her &or5 for the ne&spaper. De note the -ommon pra-ti-e in thene&spaper *2siness of assi(nin( its re(2lar reporters to -overspe-i6- s2*?e-ts, (eo(raphi-al lo-ations, (overnment a(en-ies, orareas of -on-ern, more -ommonly referre+ to as /*eats./ A reporterm2st pro+2-e stories &ithin his or her parti-2lar *eat an+ -annots&it-h to another *eat &itho2t permission from the e+itor. n mostne&spapers also, a reporter m2st inform the e+itor a*o2t the storythat he or she is &or5in( on for the +ay. The story or arti-le m2stalso *e s2*mitte+ to the e+itor at a spe-i6e+ time. Moreover, thee+itor -an easily p2ll o2t a reporter from one *eat an+ as5 him orher to -over another *eat, if the nee+ arises.

This is not the -ase for petitioner. Altho2(h petitioner ha+ a &ee5ly+ea+line to meet, she &as not pre-l2+e+ from s2*mittin( her-ol2mn ahea+ of time or from s2*mittin( -ol2mns to *e p2*lishe+at a later time. More importantly, respon+ents +i+ not +i-tate 2ponpetitioner the s2*?e-t matter of her -ol2mns, *2t only impose+ the(eneral (2i+eline that the arti-le sho2l+ -onform to the stan+ar+sof the ne&spaper an+ the (eneral tone of the parti-2lar se-tion.

Dhere a person &ho &or5s for another performs his ?o* more orless at his o&n pleas2re, in the manner he sees 6t, not s2*?e-t to+e6nite ho2rs or -on+itions of &or5, an+ is -ompensate+ a--or+in(to the res2lt of his eIorts an+ not the amo2nt thereof, no employer)employee relationship e'ists.

Asi+e from the -ontrol test, this Co2rt has also 2se+ the e-onomi-reality test. The e-onomi- realities prevailin( &ithin the a-tivity or*et&een the parties are e'amine+, ta5in( into -onsi+eration thetotality of -ir-2mstan-es s2rro2n+in( the tr2e nat2re of therelationship *et&een the parties. This is espe-ially appropriate&hen, as in this -ase, there is no &ritten a(reement or -ontra-t on&hi-h to *ase the relationship. n o2r ?2ris+i-tion, the *en-hmar5 of e-onomi- reality in analy7in( possi*le employment relationships forp2rposes of applyin( the La*or Co+e o2(ht to *e the e-onomi-+epen+en-e of the &or5er on his employer.

etitionerJs main o--2pation is not as a -ol2mnist for respon+ent

@



*2t as a &omenJs ri(hts a+vo-ate &or5in( in vario2s &omenJsor(ani7ations. Li5e&ise, she herself a+mits that she also-ontri*2tes arti-les to other p2*li-ations. Th2s, it -annot *e sai+that petitioner &as +epen+ent on respon+ent for her -ontin2e+employment in respon+entJs line of *2siness.

The inevita*le -on-l2sion is that petitioner &as not respon+entJs employee *2t an in+epen+ent -ontra-tor, en(a(e+ to +oin+epen+ent &or5.

There is no inQe'i*le r2le to +etermine if a person is an employeeor an in+epen+ent -ontra-tor0 th2s, the -hara-teri7ation of therelationship m2st *e ma+e *ase+ on the parti-2lar -ir-2mstan-esof ea-h -ase. There are several fa-tors that may *e -onsi+ere+ *ythe -o2rts, *2t as &e alrea+y sai+, the ri(ht to -ontrol is the+ominant fa-tor in +eterminin( &hether one is an employee or anin+epen+ent -ontra-tor.

n o2r ?2ris+i-tion, the Co2rt has hel+ that an in+epen+ent-ontra-tor is one &ho -arries on a +istin-t an+ in+epen+ent*2siness an+ 2n+erta5es to perform the ?o*, &or5, or servi-e ononeJs o&n a--o2nt an+ 2n+er oneJs o&n responsi*ility a--or+in( to

oneJs o&n manner an+ metho+, free from the -ontrol an+ +ire-tionof the prin-ipal in all matters -onne-te+ &ith the performan-e of the &or5 e'-ept as to the res2lts thereof.

The instant -ase presents a parallel to Son+a. etitioner &asen(a(e+ as a -ol2mnist for her talent, s5ill, e'perien-e, an+ her2ni<2e vie&point as a feminist a+vo-ate. Ho& she 2tili7e+ all thesein &ritin( her -ol2mn &as not s2*?e-t to +i-tation *y respon+ent.As in Son+a, respon+ent &as not involve+ in the a-t2alperforman-e that pro+2-e+ the 6nishe+ pro+2-t. t only reserve+the ri(ht to shorten petitionerJs arti-les *ase+ on the ne&spaperJs-apa-ity to a--ommo+ate the same. This fa-t, &e note, &as not

2ni<2e to petitionerJs -ol2mn. t is a reality in the ne&spaper*2siness that spa-e -onstraints often +i-tate the len(th of arti-lesan+ -ol2mns, even those that re(2larly appear therein.

92rthermore, respon+ent +i+ not s2pply petitioner &ith thetools an+ instr2mentalities she nee+e+ to perform her &or5.etitioner only nee+e+ her talent an+ s5ill to -ome 2p &ith a-ol2mn every &ee5. As s2-h, she ha+ all the tools she nee+e+ toperform her &or5.

Consi+erin( that respon+ent &as not petitionerJs employer, it-annot *e hel+ (2ilty of ille(al +ismissal.

So-ial Se-2rity System v. Co2rt of Appeals, 34

SCRA !"###$ The man+atory -overa(e 2n+er the SSS La& !Rep2*li- A-t No.B, as amen+e+ *y "#" an+ B3B$ is premise+ on thee'isten-e of an employer)employee relationship, an+ Se-tion !+$+e6nes an employee as any person &ho performs servi-es for anemployer in &hi-h either or *oth mental an+ physi-al eIorts are

2se+ an+ &ho re-eives -ompensation for s2-h servi-es &here thereis an employer)employee relationship.

There is no <2estion that Tana &as sele-te+ an+ his servi-esen(a(e+ *y either Ayal+e herself, or *y Antero Ma(hari, heroverseer. Corollarily, they also hel+ the prero(ative of +ismissin( orterminatin( Tanas employment. The +isp2te is in the <2estion of payment of &a(es. Claimant Mar(arita Tana an+ her -orro*oratin(&itnesses testi6e+ that her h2s*an+ &as pai+ +aily &a(es (er ,uincena as &ell as on (a-.a% *asis. Ayal+e, on the other han+,insists that Tana &as pai+ solely on (a-.a% *asis. To s2pport her-laim, she presente+ payrolls -overin( the perio+ :an2ary of @;4to :an2ary of @;B0 an+ Novem*er of @; to May of @;@.

A -aref2l per2sal of the re-or+s rea+ily sho& that the e'hi*itsoIere+ are not -omplete, an+ are *2t a mere samplin( of payrolls. Dhile the names of the s2ppose+ la*orers appear therein,their si(nat2res are no&here to *e fo2n+. An+ &hile they -over theyears @;, @;B an+ portions of @; an+ @;@, they +o not -overthe )year perio+ +2rin( &hi-h Tana &as s2ppose+ to have &or5e+in Ayal+es plantations. Also an a+mitte+ fa-t is that these e'hi*itsonly -over H+a. ;#, Ayal+e havin( averre+ that all her re-or+s an+payrolls for the other plantation !H+a. ))M$ &ere either+estroye+ or lost.

To o2r min+, these +o-2ments are not only sa+ly la-5in(, they arealso 2n&orthy of -re+en-e. The fa-t that Tanas name +oes notappear in the payrolls for the years @;, @;B an+ part of @;an+ @;@, is no proof that he +i+ not &or5 in H+a. ;# in the years@B to @;4, an+ the rest of @; an+ @;@. The vera-ity of thealle(e+ +o-2ments as payrolls are +o2*tf2l -onsi+erin( that thela*orers name+ therein never a8'e+ their si(nat2res to sho& thatthey a-t2ally re-eive+ the amo2nts in+i-ate+ -orrespon+in( to theirnames. Moreover, no re-or+ &as sho&n pertainin( to H+a. ))M,&here Tana &as s2ppose+ to have &or5e+. Even Ayal+e a+mitte+that she hire+ Tana as arador an+ sometimes as la*orer +2rin(millin( in H+a. ))M. n li(ht of her in-omplete +o-2mentaryevi+en-e, Ayal+es +enial that Tana &as her employee in H+a. );#

#



or H+a. ))M m2st fail.

n -ontrast to Ayal+es evi+en-e, or la-5 thereof, is Mar(arita Tanaspositive testimony, -orro*orate+ *y t&o !"$ other &itnesses.

These &itnesses +i+ not &aver in their assertion that &hile Tana&as hire+ *y Ayal+e as an arador on (a-.a% *asis, he &as alsopai+ a +aily &a(e &hi-h Ayal+es overseer +is*2rse+ every 6fteen!$ +ays. t is also 2n+isp2te+ that they &ere ma+e to

a-5no&le+(e re-eipt of their &a(es *y si(nin( on sheets of r2le+paper, &hi-h are +iIerent from those presente+ *y Ayal+e as+o-2mentary evi+en-e. n 6ne, &e 6n+ that the testimonies of Mar(arita Tana, A(aton Li*a&as an+ A2relio Tana prevail over thein-omplete an+ in-onsistent +o-2mentary evi+en-e of Ayal+e.

n the parallel -ase of /(ulencia Ice Plant and Storage v" NLRC, thepetitioners ar(2e+ that sin-e Man2el . Esitas name +oes notappear in the payrolls of the -ompany it ne-essarily means that he&as not an employee. This Co2rt hel+

etitioners f2rther ar(2e that -omplainant misera*ly faile+ topresent any +o-2mentary evi+en-e to prove hisemployment. There &as no timesheet, pay slip an+>or payroll>-ashvo2-her to spea5 of. A*sen-e of these material +o-2ments arene-essarily fatal to -omplainants -a2se.

De +o not a(ree. No parti-2lar form of evi+en-e is re<2ire+ toprove the e'isten-e of an employer)employee relationship. Any-ompetent an+ relevant evi+en-e to prove the relationship may *ea+mitte+. 9or, if only +o-2mentary evi+en-e &o2l+ *e re<2ire+ tosho& that relationship, no s-hemin( employer &o2l+ ever *e*ro2(ht *efore the *ar of ?2sti-e, as no employer &o2l+ &ish to-ome o2t &ith any tra-e of the ille(ality he has a2thore+-onsi+erin( that it sho2l+ ta5e m2-h &ei(htier proof to invali+ate a&ritten instr2ment. Th2s, as in this -ase &here the employer)employee relationship *et&een petitioners an+ Esita &as

s28-iently prove+ *y testimonial evi+en-e, the a*sen-e of timesheet, time re-or+ or payroll has *e-omein-onse<2ential. !=n+ers-orin( o2rs$

Clearly, then, the testimonial evi+en-e of the -laimant an+ her&itnesses -onstit2te positive an+ -re+i*le evi+en-e of thee'isten-e of an employer)employee relationship *et&een Tana an+Ayal+e. As the employer, the latter is +2ty)*o2n+ to 5eep faithf2lan+ -omplete re-or+s of her *2siness aIairs, not the least of &hi-h&o2l+ *e the salaries of the &or5ers. An+ yet, the +o-2mentspresente+ have *een sele-tive, fe& an+ in-omplete in s2*stan-ean+ -ontent. Conse<2ently, Ayal+e has faile+ to -onvin-e 2s that,in+ee+, Tana &as not her employee.

The ar(2ment is raise+ that Tana is an in+epen+enent -ontra-tor*e-a2se he &as hire+ an+ pai+ &a(es on (a-.a% *asis. De 6n+this assertion to *e spe-io2s for several reasons.

9irst, &hile Tana &as sometimes hire+ as an arador or plo&er forintermittent perio+s, he &as hire+ to +o other tas5s in Ayal+esplantations. Ayal+e herself a+mitte+ as m2-h, altho2(h sheminimi7e+ the e'tent of Tanas la*ors. n the other han+, the-laimant an+ her &itnesses &ere +ire-t an+ 6rm in their

testimonies.

t is in+2*ita*le, therefore, that Tana &or5e+ -ontin2o2sly forAyal+e, not only as arador on (a-.a% *asis, *2t as a re(2larfarmhan+, +oin( *a-5*rea5in( ?o*s for Ayal+es *2siness.There is noshre+ of evi+en-e to sho& that Tana &as only a seasonal &or5er,m2-h less a mi(rant &or5er. All &itnesses, in-l2+in( Ayal+e herself,testi6e+ that Tana an+ his family resi+e+ in the plantation. f he &asa mere (a-.a% &or5er or in+epen+ent -ontra-tor, then there &o2l+*e no reason for Ayal+e to allo& them to live insi+e her property forfree. The only lo(i-al e'planation is that he &as &or5in( for mostpart of the year e'-l2sively for Ayal+e, in ret2rn for &hi-h the latter

(rat2ito2sly allo&e+ Tana an+ his family to resi+e in her property. The Co2rt of Appeals, in 6n+in( for Ayal+e, relie+ on the -laimantsan+ her &itnesses a+mission that her h2s*an+ &as hire+ asan arador on (a-.a% *asis, *2t it faile+ to appre-iate the rest of their testimonies. :2st *e-a2se he &as, for short perio+s of time,hire+ on (a-.a% *asis +oes not ne-essarily mean that he &as notemploye+ to +o other tas5s for the remain+er of the year. EvenAyal+e a+mitte+ that Tana +i+ other ?o*s &hen he &as not hire+ toplo&. Conse<2ently, the -on-l2sion -2lle+ from their testimonies tothe eIe-t that Tana &as mainly an+ solely an arador &as at *est asele-tive appre-iation of portions of the entire evi+en-e. t &as theSo-ial Se-2rity Commission that too5 into -onsi+eration all the

+o-2mentary an+ testimonial evi+en-e on re-or+.

Se-on+ly, Ayal+e ma+e m2-h a+o of her -laim that Tana -o2l+ not*e her employee *e-a2se she e'er-ise+ no -ontrol over his &or5ho2rs an+ metho+ of performin( his tas5 as arador . t is also ana+mitte+ fa-t that Tana, :r. 2se+ his o&n -ara*ao an+ tools. Th2s,she -onten+s that, applyin( the -ontrol test, Tana &as not anemployee *2t an in+epen+ent -ontra-tor.

A -loser s-r2tiny of the re-or+s, ho&ever, reveals that &hile Ayal+eherself may not have +ire-tly impose+ on Tana the manner an+metho+s to follo& in performin( his tas5s, she +i+ e'er-ise -ontrolthro2(h her overseer.



e that as it may, the po&er of -ontrol refers merely to thee'isten-e of the po&er. t is not essential for the employer toa-t2ally s2pervise the performan-e of +2ties of the employee0 it iss28-ient that the former has a ri(ht to &iel+ the po&er. Certainly,Ayal+e, on her o&n or thro2(h her overseer, &iel+e+ the po&er tohire or +ismiss, to -he-5 on the &or5, *e it in pro(ress or <2ality, of the la*orers. As the o&ner>lessee of the plantations, she possesse+the po&er to -ontrol everyone &or5in( therein an+ everythin(ta5in( pla-e therein.

:2rispr2+en-e provi+es other e<2ally important -onsi+erations&hi-h s2pport the -on-l2sion that Tana &as not an in+epen+ent-ontra-tor. 9irst, Tana -annot *e sai+ to *e en(a(e+ in a +istin-to--2pation or *2siness. His -ara*ao an+ plo& may *e 2sef2l in hislivelihoo+, *2t he is not in+epen+ently en(a(e+ in the *2siness of farmin( or plo&in(. Se-on+, he ha+ *een &or5in( e'-l2sively forAyal+e for ei(hteen !$ years prior to his +emise. Thir+, there is no+isp2te that Ayal+e &as in the *2siness of (ro&in( s2(ar-ane in thet&o plantations for -ommer-ial p2rposes. There is also no <2estionthat plo&in( or preparin( the soil for plantin( is a ma?or part of there(2lar *2siness of Ayal+e.

=n+er the -ir-2mstan-es, the relationship *et&een Ayal+e an+ Tanahas more of the attri*2tes of employer)employee than that of anin+epen+ent -ontra-tor hire+ to perform a spe-i6- pro?e-t. n the-ase of D. Keh #eng v" International Labor , &e -ite+ o2r lon()stan+in( r2lin( in Sunri(e Coconut Products Co" v" Court o' Industrial Relations, to &it

Dhen a &or5er possesses some attri*2tes of an employee an+others of an in+epen+ent -ontra-tor, &hi-h ma5e him fall &ithin aninterme+iate area, he may *e -lassi6e+ 2n+er the -ate(ory of anemployee &hen the e-onomi- fa-ts of the relations ma5e it morenearly one of employment than one of in+epen+ent *2siness

enterprise &ith respe-t to the en+s so2(ht to *ea--omplishe+. !=n+ers-orin( 2rs$

De 6n+ the a*ove)<2ote+ r2lin( to *e appli-a*le in the -ase of Tana. There is prepon+eran-e of evi+en-e to s2pport the -on-l2sionthat he &as an employee rather than an in+epen+ent -ontra-tor.

ns2lar Life v NLRC, ;@ SCRA 4@ !@@$ The -hief iss2e here is one of ?2ris+i-tion &hether, as asiaoasserts, he ha+ *e-ome the Company1s employee *y virt2e of the-ontra-t invo5e+ *y him, there*y pla-in( his -laim for 2npai+-ommissions &ithin the ori(inal an+ e'-l2sive ?2ris+i-tion of theLa*or Ar*iter 2n+er the provisions of Se-tion "; of the La*or

Co+e, or, -ontrarily, as the Company &o2l+ have it, that 2n+er sai+-ontra-t asiao1s stat2s &as that of an in+epen+ent -ontra-tor&hose -laim &as th2s -o(ni7a*le, not *y the La*or Ar*iter in ala*or -ase, *2t *y the re(2lar -o2rts in an or+inary -ivil a-tion.

The Company1s thesis, that no employer)employee relation in thele(al an+ (enerally a--epte+ sense e'iste+ *et&een it an+ asiao,is +ra&n from the terms of the -ontra-t they ha+ entere+ into,&hi-h, either e'pressly or *y ne-essary impli-ation, ma+e asiao

the master of his o&n time an+ sellin( metho+s, left to his ?2+(ment the time, pla-e an+ means of soli-itin( ins2ran-e, set noa--omplishment <2otas an+ -ompensate+ him on the *asis of res2lts o*taine+. He &as not *o2n+ to o*serve any s-he+2le of &or5in( ho2rs or report to any re(2lar station0 he -o2l+ see5 an+&or5 on his prospe-ts any&here an+ at anytime he -hose to, an+&as free to a+opt the sellin( metho+s he +eeme+ most eIe-tive.

Ditho2t +enyin( that the a*ove &ere in+ee+ the e'presse+ impli-it-on+itions of asiao1s -ontra-t &ith the Company, the respon+ents-onten+ that they +o not -onstit2te the +e-isive +eterminant of thenat2re of his en(a(ement, invo5in( pre-e+ents to the eIe-t that

the -riti-al feat2re +istin(2ishin( the stat2s of an employee fromthat of an in+epen+ent -ontra-tor is control that is, &hether or notthe party &ho en(a(es the servi-es of another has the po&er to-ontrol the latter1s -on+2-t in ren+erin( s2-h servi-es. 2rs2in( thear(2ment, the respon+ents +ra& attention to the provisions of asiao1s -ontra-t o*li(in( him to /... o*serve an+ -onform to allr2les an+ re(2lations &hi-h the Company may from time to timepres-ri*e ...,/ as &ell as to the fa-t that the Company pres-ri*e+the <2ali6-ations of appli-ants for ins2ran-e, pro-esse+ theirappli-ations an+ +etermine+ the amo2nts of ins2ran-e -over to *eiss2e+ as in+i-ative of the -ontrol, &hi-h ma+e asiao, in le(al-ontemplation, an employee of the Company.

t is tr2e that the /-ontrol test/ e'presse+ in the follo&in(prono2n-ement of the Co2rt in the @B -ase of Viana vs" Ale0o Al)Lagadan 1 has *een follo&e+ an+ applie+ in later -ases, somefairly re-ent. n+ee+, it is &itho2t <2estion a vali+ test of the-hara-ter of a -ontra-t or a(reement to ren+er servi-e. t sho2l+,ho&ever, *e o*vio2s that not every form of -ontrol that the hirin(party reserves to himself over the -on+2-t of the party hire+ inrelation to the servi-es ren+ere+ may *e a--or+e+ the eIe-t of esta*lishin( an employer)employee relationship *et&een them inthe le(al or te-hni-al sense of the term. A line m2st *e +ra&nsome&here, if the re-o(ni7e+ +istin-tion *et&een an employee an+an in+ivi+2al -ontra-tor is not to vanish alto(ether. Realisti-ally, it

"



&o2l+ *e a rare -ontra-t of servi-e that (ives 2ntrammelle+free+om to the party hire+ an+ es-he&s any intervention&hatsoever in his performan-e of the en(a(ement.

Lo(i-ally, the line sho2l+ *e +ra&n *et&een r2les that merely serveas (2i+elines to&ar+s the a-hievement of the m2t2ally +esire+res2lt &itho2t +i-tatin( the means or metho+s to *e employe+ inattainin( it, an+ those that -ontrol or 6' the metho+olo(y an+ *in+or restri-t the party hire+ to the 2se of s2-h means. The 6rst, &hi-h

aim only to promote the res2lt, -reate no employer)employeerelationship 2nli5e the se-on+, &hi-h a++ress *oth the res2lt an+the means 2se+ to a-hieve it. The +istin-tion a-<2ires parti-2larrelevan-e in the -ase of an enterprise aIe-te+ &ith p2*li- interest,as is the *2siness of ins2ran-e, an+ is on that a--o2nt s2*?e-t tore(2lation *y the State &ith respe-t, not only to the relations*et&een ins2rer an+ ins2re+ *2t also to the internal aIairs of theins2ran-e -ompany. R2les an+ re(2lations (overnin( the -on+2-t of the *2siness are provi+e+ for in the ns2ran-e Co+e an+ enfor-e+*y the ns2ran-e Commissioner. t is, therefore, 2s2al an+ e'pe-te+for an ins2ran-e -ompany to prom2l(ate a set of r2les to (2i+e its-ommission a(ents in sellin( its poli-ies that they may not r2n

afo2l of the la& an+ &hat it re<2ires or prohi*its. f s2-h a-hara-ter are the r2les &hi-h pres-ri*e the <2ali6-ations of persons&ho may *e ins2re+, s2*?e-t ins2ran-e appli-ations to pro-essin(an+ approval *y the Company, an+ also reserve to the Companythe +etermination of the premi2ms to *e pai+ an+ the s-he+2les of payment. None of these really inva+es the a(ent1s -ontra-t2alprero(ative to a+opt his o&n sellin( metho+s or to sell ins2ran-e athis o&n time an+ -onvenien-e, hen-e -annot ?2sti6a*ly *e sai+ toesta*lish an employer)employee relationship *et&een him an+ the-ompany.

There is no +earth of a2thority hol+in( persons similarly pla-e+ as

respon+ent asiao to *e in+epen+ent -ontra-tors, instea+ of employees of the parties for &hom they &or5e+. n Ma&nco TradingCor(oration vs" /(le the Co2rt r2le+ that a person en(a(e+ to sellsoft +rin5s for another, 2sin( a tr2-5 s2pplie+ *y the latter, *2t &iththe ri(ht to employ his o&n &or5ers, sell a--or+in( to his o&nmetho+s s2*?e-t only to prearran(e+ ro2tes, o*servin( no &or5in(ho2rs 6'e+ *y the other party an+ o*li(e+ to se-2re his o&nli-enses an+ +efray his o&n sellin( e'penses, all in -onsi+eration of a pe++ler1s +is-o2nt (iven *y the other party for at least "# -asesof soft +rin5s sol+ +aily, &as not an employee *2t an in+epen+ent-ontra-tor.

n Invest$ent Planning Cor(oration o' the Phili((ines us" Social

Securit. S.ste$ a -ase almost on all fo2rs &ith the present one,this Co2rt hel+ that there &as no employer)employee relationship*et&een a -ommission a(ent an+ an investment -ompany, *2t thatthe former &as an in+epen+ent -ontra-tor &here sai+ a(ent an+others similarly pla-e+ &ere !a$ pai+ -ompensation in the form of -ommissions *ase+ on per-enta(es of their sales, any *alan-e of -ommissions earne+ *ein( paya*le to their le(al representatives inthe event of +eath or re(istration0 !*$ re<2ire+ to p2t 2pperforman-e *on+s0 !-$ s2*?e-t to a set of r2les an+ re(2lations(overnin( the performan-e of their +2ties 2n+er the a(reement&ith the -ompany an+ termination of their servi-es for -ertain-a2ses0 !+$ not re<2ire+ to report for &or5 at any time, nor to+evote their time e'-l2sively to &or5in( for the -ompany nor tos2*mit a re-or+ of their a-tivities, an+ &ho, 6nally, sho2l+ere+ theiro&n sellin( an+ transportation e'penses.

More re-ently, in Sara vs" NLRC, it &as hel+ that one &ho ha+ *eenen(a(e+ *y a ri-e miller to *2y an+ sell ri-e an+ palay &itho2t-ompensation e'-ept a -ertain per-enta(e of &hat he &as a*le to*2y or sell, +i+ &or5 at his o&n pleas2re &itho2t any s2pervision or-ontrol on the part of his prin-ipal an+ relie+ on his o&n reso2r-es

in the performan-e of his &or5, &as a plain -ommission a(ent, anin+epen+ent -ontra-tor an+ not an employee.

The respon+ents limit themselves to pointin( o2t that asiao1s-ontra-t &ith the Company *o2n+ him to o*serve an+ -onform tos2-h r2les an+ re(2lations as the latter mi(ht from time to timepres-ri*e. No sho&in( has *een ma+e that any s2-h r2les orre(2lations &ere in fa-t prom2l(ate+, m2-h less that any r2lese'iste+ or &ere iss2e+ &hi-h eIe-tively -ontrolle+ or restri-te+ his-hoi-e of metho+s or the metho+s themselves of sellin(ins2ran-e. A*sent s2-h sho&in(, the Co2rt &ill not spe-2late thatany e'-eptions or <2ali6-ations &ere impose+ on the e'press

provision of the -ontra-t leavin( asiao /... free to e'er-ise his o&n ?2+(ment as to the time, pla-e an+ means of soli-itin( ins2ran-e./

The La*or Ar*iter1s +e-ision ma5es referen-e to asiao1s -laim of havin( *een -onne-te+ &ith the Company for t&enty)6ve years.Dhatever this is meant to imply, the o*vio2s reply &o2l+ *e that&hat is (ermane here is asiao1s stat2s 2n+er the -ontra-t of :2ly", @B, not the len(th of his relationship &ith the Company.

The Co2rt, therefore, r2les that 2n+er the -ontra-t invo5e+ *y him,asiao &as not an employee of the petitioner, *2t a -ommissiona(ent, an in+epen+ent -ontra-tor &hose -laim for 2npai+-ommissions sho2l+ have *een liti(ate+ in an or+inary -ivil a-tion.

The La*or Ar*iter erre+ in ta5in( -o(ni7an-e of, an+ a+?2+i-atin(,3



sai+ -laim, *ein( &itho2t ?2ris+i-tion to +o so, as +i+ therespon+ent NLRC in a8rmin( the Ar*iter1s +e-ision. This -on-l2sionren+ers it 2nne-essary an+ premat2re to -onsi+er asiao1s -laimfor -ommissions on its merits.

A9 M2t2al ene6t Asso-iation, n-. v. NLRC,

"B; SCRA 4; !@@;$ The +i8-2lty lies in -orre-tly assessin( if -ertain fa-tors or

elements properly in+i-ate the presen-e of -ontrol. Anent the iss2eof e'-l2sivity in the -ase at *ar, the fa-t that private respon+ent&as re<2ire+ to soli-it *2siness e'-l2sively for petitioner -o2l+har+ly *e -onsi+ere+ as -ontrol in la*or ?2rispr2+en-e. =n+er MemoCir-2lars No. ") an+ "), +ate+ e-em*er ;, @ an+ A2(2st;, @, respe-tively, iss2e+ *y the ns2ran-e Commissioner,ins2ran-e a(ents are *arre+ from servin( more than one ins2ran-e-ompany, in or+er to prote-t the p2*li- an+ to ena*le ins2ran-e-ompanies to e'er-ise e'-l2sive s2pervision over their a(ents intheir soli-itation &or5. Th2s, the e'-l2sivity restri-tion -learlysprin(s from a re(2lation iss2e+ *y the ns2ran-e Commission, an+not from an intention *y petitioner to esta*lish -ontrol over the

metho+ an+ manner *y &hi-h private respon+ent shall a--omplishhis &or5. This feat2re is not meant to -han(e the nat2re of therelationship *et&een the parties, nor +oes it ne-essarily im*2es2-h relationship &ith the <2ality of -ontrol envisione+ *y the la&.

So too, the fa-t that private respon+ent &as *o2n+ *y -ompanypoli-ies, memo>-ir-2lars, r2les an+ re(2lations iss2e+ from time totime is also not in+i-ative of -ontrol. n its Reply to Complainant1sosition aper, petitioner alle(es that the poli-ies, memo>-ir-2lars,an+ r2les an+ re(2lations referre+ to in provision !$ of the SalesA(ent1s A(reement are only those pertainin( to payment of a(ents1a--o2nta*ilities, availment *y sales a(ents of -ash a+van-es for

sorties, -ir-2lars on in-entives an+ a&ar+s to *e (iven *ase+ onpro+2-tion, an+ other matters -on-ernin( the sellin( of ins2ran-e,in a--or+an-e &ith the r2les prom2l(ate+ *y the ns2ran-eCommission. A--or+in( to the petitioner, ins2ran-e soli-itors arenever aIe-te+ or -overe+ *y the r2les an+ re(2lations-on-ernin( employee -on+2-t an+ penalties for violations thereof,&or5 stan+ar+s, performan-e appraisals, merit in-reases,promotions, a*senteeism>atten+an-e, leaves of a*sen-e,mana(ement)2nion matters, employee *ene6ts an+ the li5e. Sin-eprivate respon+ent faile+ to re*2t these alle(ations, the same are+eeme+ a+mitte+, or at least proven, there*y leavin( nothin( tos2pport the respon+ent Commission1s -on-l2sion that the fore(oin(

elements si(ni6e+ an employment relationship *et&een the

parties.

n re(ar+ to the territorial assi(nments (iven to sales a(ents, thistoo -annot *e hel+ as in+i-ative of the e'er-ise of -ontrol over anemployee. 9irst of all, the pla-e of &or5 in the *2siness of soli-itin(ins2ran-e +oes not 6(2re prominently in the e<2ation. An+ moresi(ni6-antly, private respon+ent faile+ to re*2t petitioner1salle(ation that it ha+ never iss2e+ him any territorial assi(nment atall. *vio2sly, this Co2rt -annot +ra& the same inferen-e from this

feat2re as +i+ the respon+ent Commission.

To restate, the si(ni6-ant fa-tor in +eterminin( the relationship of the parties is the presen-e or a*sen-e of s2pervisory a2thority to-ontrol the metho+ an+ the +etails of performan-e of the servi-e*ein( ren+ere+, an+ the +e(ree to &hi-h the prin-ipal mayintervene to e'er-ise s2-h -ontrol. The presen-e of s2-h po&er of -ontrol is in+i-ative of an employment relationship, &hile a*sen-ethereof is in+i-ative of in+epen+ent -ontra-torship. n other &or+s,the test to +etermine the e'isten-e of in+epen+ent -ontra-torshipis &hether one -laimin( to *e an in+epen+ent -ontra-tor has-ontra-te+ to +o the &or5 a--or+in( to his o&n metho+s an+

&itho2t *ein( s2*?e-t to the -ontrol of the employer e'-ept only asto the res2lt of the &or5. S2-h is e'a-tly the nat2re of therelationship *et&een petitioner an+ private respon+ent.

rivate respon+ent1s -ontention that he &as petitioner1s employeeis *elie+ *y the fa-t that he &as free to sell ins2ran-e at any timeas he &as not s2*?e-t to +e6nite ho2rs or -on+itions of &or5 an+ int2rn &as -ompensate+ a--or+in( to the res2lt of his eIorts. y thenat2re of the *2siness of soli-itin( ins2ran-e, a(ents are normallyleft free to +evise &ays an+ means of pers2a+in( people to ta5eo2t ins2ran-e. There is no prohi*ition, as -onten+e+ *y petitioner,for private respon+ent to &or5 for as lon( as he +oes not violatethe ns2ran-e Co+e. As petitioner e'plains

/!rivate respon+ent$ &as free to soli-it life ins2ran-e any&here he&ante+ an+ he ha+ free an+ 2nfettere+ time to p2rs2e his*2siness. He +i+ not have to p2n-h in an+ p2n-h o2t the *2n+y-lo-5 as he &as not re<2ire+ to report to the !petitioner1s$ o8-ere(2larly. He &as not -overe+ *y any employee poli-ies orre(2lations an+ not s2*?e-t to the +is-iplinary a-tion of mana(ement on the *asis of the Employee Co+e of Con+2-t. He-o2l+ (o o2t an+ sell ins2ran-e at his o&n -hosen time. He &asentirely left to his o&n -hoi-es of areas or territories, &ith no+e6nite, m2-h less s2pervise+, time s-he+2le.

!rivate respon+ent$ ha+ -omplete -ontrol over his o--2pation an+!petitioner$ +i+ not e'er-ise any ri(ht of Control an+ S2pervision

over his performan-e e'-ept as to the payment of -ommission the4



amo2nt of &hi-h entirely +epen+s on the sole eIorts of !privaterespon+ent$. He &as free to en(a(e in other o--2pation or pra-ti-eother profession for as lon( as he +i+ not -ommit any violation of the ethi-al stan+ar+s pres-ri*e+ in the Sales A(ent1s A(reement./

Altho2(h petitioner -o2l+ have, theoreti-ally, +isapprove+ any of private respon+ent1s transa-tions, &hat -o2l+ *e +isapprove+ &asonly the res2lt of the &or5, an+ not the means *y &hi-h it &asa--omplishe+.

The /-ontrol/ &hi-h the a*ove fa-tors in+i-ate +i+ not s2m 2p tothe po&er to -ontrol private respon+ent1s -on+2-t in an+ mo+e of soli-itin( ins2ran-e. n the -ontrary, they -learly in+i-ate that the ?2ri+i-al element of -ontrol ha+ *een a*sent in this sit2ation. Th2s,the Co2rt is -onstraine+ to r2le that no employment relationshipha+ ever e'iste+ *et&een the parties.

Ton(5o v. Man2fa-t2rerJs Life Ass2ran-e

Company !G.R. No. B;B"", "@ :2ne "##$De -annot -onsi+er the present -ase p2rely from a la*or la&perspe-tive, o*livio2s that the fa-t2al ante-e+ents &ere set in the

ins2ran-e in+2stry so that the ns2ran-e Co+e primarily(overns. Chapter F, Title of this Co+e is &holly +evote+ tons2ran-e A(ents an+ ro5ers an+ spe-i6-ally +e6nes the a(entsan+ *ro5ers relationship &ith the ins2ran-e -ompany an+ ho& theyare (overne+ *y the Co+e an+ re(2late+ *y the ns2ran-eCommission.

The ns2ran-e Co+e, of -o2rse, +oes not &holly re(2late the a(en-ythat it spea5s of, as a(en-y is a -ivil la& matter (overne+ *y theCivil Co+e. Th2s, at the very least, three sets of la&s namely, thens2ran-e Co+e, the La*or Co+e an+ the Civil Co+e have to *e-onsi+ere+ in loo5in( at the present -ase. Not to *e for(otten, too,is the A(reement !partly repro+2-e+ on pa(e " of this issent an+&hi-h no one +isp2tes$ that the parties a+opte+ to (overn theirrelationship for p2rposes of sellin( the ins2ran-e the -ompanyoIers. To for(et these other la&s is to ta5e a myopi- vie& of thepresent -ase an+ to a++ to the 2n-ertainties that no& e'ist in-onsi+erin( the le(al relationship *et&een the ins2ran-e -ompanyan+ its a(ents.

The main iss2e of &hether an a(en-y or an employmentrelationship e'ists +epen+s on the in-i+ents of the relationship. TheLa*or Co+e -on-ept of -ontrol has to *e -ompare+ an++istin(2ishe+ &ith the -ontrol that m2st ne-essarily e'ist in aprin-ipal)a(ent relationship. The prin-ipal -annot *2t also have his

or her say in +ire-tin( the -o2rse of the prin-ipal)a(entrelationship, espe-ially in -ases &here the -ompany)representativerelationship in the ins2ran-e in+2stry is an a(en-y.

a. The la&s on ins2ran-e an+ a(en-y

The *2siness of ins2ran-e is a hi(hly re(2late+ -ommer-ial a-tivityin the -o2ntry, in terms parti-2larly of &ho -an *e in the ins2ran-e*2siness, &ho -an a-t for an+ in *ehalf of an ins2rer, an+ ho&these parties shall -on+2-t themselves in the ins2ran-e*2siness. Se-tion B of the ns2ran-e Co+e provi+es that No (erson (artnershi( or association o' (ersons shall transact an. insurance business in the Phili((ines e2ce(t as agent o' a (ersonor cor(oration authori+ed to do the business o' insurance inthePhili((ines" Se-tions "@@ an+ 3## of the ns2ran-e Co+e onns2ran-e A(ents an+ ro5ers, amon( other provisions, provi+e

Se-tion "@@. No ins2ran-e -ompany +oin( *2siness in thehilippines, nor any a(ent thereof, shall pay any commission orother compensation to any person for services in obtaininginsurance, 2nless s2-h person shall have 6rst pro-2re+ from theCommissioner a li-ense to a-t as an ins2ran-e a(ent of s2-h-ompany or as an ins2ran-e *ro5er as hereinafter provi+e+.

No person shall a-t as an ins2ran-e a(ent or as an ins2ran-e*ro5er in the soli-itation or pro-2rement of appli-ations forins2ran-e, or re-eive for servi-es in o*tainin( ins2ran-e, any-ommission or other -ompensation from any ins2ran-e -ompany+oin( *2siness in the hilippines or any a(ent thereof, &itho2t 6rstpro-2rin( a li-ense so to a-t from the Commissioner ' ' 'TheCommissioner shall satisfy himself as to the -ompeten-e an+tr2st&orthiness of the appli-ant an+ shall have the ri(ht to ref2seto iss2e or rene& an+ to s2spen+ or revo5e any s2-h li-ense in his+is-retion.

Se-tion 3##. Any person &ho for -ompensation soli-its or o*tainsins2ran-e on *ehalf of any ins2ran-e -ompany or transmits for aperson other than himself an appli-ation for a poli-y or -ontra-t of ins2ran-e to or from s2-h -ompany or oIers or ass2mes to a-t inthe ne(otiatin( of s2-h ins2ran-e shall *e an ins2ran-e a(ent&ithin the intent of this se-tion an+ shall there*y *e-ome lia*le toall the +2ties, re<2irements, lia*ilities an+ penalties to &hi-h anins2ran-e a(ent is s2*?e-t.

The appli-ation for an ins2ran-e a(ents li-ense re<2ires a &rittene'amination, an+ the appli-ant m2st *e of (oo+ moral -hara-teran+ m2st not have *een -onvi-te+ of a -rime involvin( moralt2rpit2+e. The ins2ran-e a(ent &ho -olle-ts premi2ms from anins2re+ person for remittan-e to the ins2ran-e -ompany +oes so ina 6+2-iary -apa-ity, an+ an ins2ran-e -ompany &hi-h +elivers an



ins2ran-e poli-y or -ontra-t to an a2thori7e+ a(ent is +eeme+ tohave a2thori7e+ the a(ent to re-eive payment on the -ompanys*ehalf.Se-tion 3B f2rther prohi*its the oIer, ne(otiation, or-olle-tion of any amo2nt other than that spe-i6e+ in the poli-y an+this -overs any re*ate from the premi2m or any spe-ial favor ora+vanta(e in the +ivi+en+s or *ene6t a--r2in( from the poli-y.

Th2s, 2n+er the ns2ran-e Co+e, the a(ent m2st, as a matter of <2ali6-ation, *e li-ense+ an+ m2st also a-t &ithin the parameters

of the a2thority (rante+ 2n+er the li-ense an+ 2n+er the -ontra-t&ith the prin-ipal. ther than the nee+ for a li-ense, the a(ent islimite+ in the &ay he oIers an+ ne(otiates for the sale of the-ompanys ins2ran-e pro+2-ts, in his -olle-tion a-tivities, an+ in the+elivery of the ins2ran-e -ontra-t or poli-y. R2les re(ar+in( the+esire+ res2lts !e"g", the re<2ire+ vol2me to -ontin2e to <2alify as a-ompany a(ent, r2les to -he-5 on the parameters on the a2thority(iven to the a(ent, an+ r2les to ens2re that in+2stry, le(al an+ethi-al r2les are follo&e+$ are *2ilt)in elements of -ontrol spe-i6- toan ins2ran-e a(en-y an+ sho2l+ not an+ -annot *e rea+ aselements of -ontrol that atten+ an employment relationship(overne+ *y the La*or Co+e.

n the other han+, the Civil Co+e +e6nes an a(ent as a personK&ho *in+s himself to ren+er some servi-e or to +o somethin( inrepresentation or on *ehalf of another, &ith the -onsent ora2thority of the latter. Dhile this is a very *roa+ +e6nition that onits fa-e may even en-ompass an employment relationship, the+istin-tions *et&een a(en-y an+ employment are s28-ientlyesta*lishe+ *y la& an+ ?2rispr2+en-e.

Generally, the +eterminative element is the -ontrol e'er-ise+ overthe one ren+erin( servi-e. The employer -ontrols the employee*oth in the res2lts an+ in the means an+ manner of a-hievin( thisres2lt. The prin-ipal in an a(en-y relationship, on the other han+,

also has the prero(ative to e'er-ise -ontrol over the a(ent in2n+erta5in( the assi(ne+ tas5 *ase+ on the parameters o2tline+ inthe pertinent la&s.

=n+er the (eneral la& on a(en-y as applie+ to ins2ran-e, ana(en-y m2st *e e'press in li(ht of the nee+ for a li-ense an+ forthe +esi(nation *y the ins2ran-e -ompany. n the present -ase, theA(reement f2lly serves as (rant of a2thority to Ton(5o as Man2lifesins2ran-e a(ent. This a(reement is s2pplemente+ *y the -ompanysa(en-y pra-ti-es an+ 2sa(es, +2ly a--epte+ *y the a(ent in-arryin( o2t the a(en-y. y a2thority of the ns2ran-e Co+e, anins2ran-e a(en-y is for -ompensation, a matter the Civil Co+e

R2les on A(en-y pres2mes in the a*sen-e of proof to the

-ontrary. ther than the -ompensation, the prin-ipal is *o2n+ toa+van-e to, or to reim*2rse, the a(ent the a(ree+ s2ms ne-essaryfor the e'e-2tion of the a(en-y. y impli-ation at least 2n+er Arti-le@@4 of the Civil Co+e, the prin-ipal -an appoint t&o or morea(ents to -arry o2t the same assi(ne+ tas5s, *ase+ ne-essarily onthe spe-i6- instr2-tions an+ +ire-tives (iven to them.

Dith parti-2lar relevan-e to the present -ase is the provision that nthe e'e-2tion of the a(en-y, the a(ent shall a-t in a--or+an-e &ith

the instr2-tions of the prin-ipal. This provision is pertinent forp2rposes of the ne-essary -ontrol that the prin-ipal e'er-ises overthe a(ent in 2n+erta5in( the assi(ne+ tas5, an+ is an area &herethe instr2-tions -an intr2+e into the la*or la& -on-ept of -ontrol sothat min2te -onsi+eration of the fa-ts is ne-essary. A relate+ arti-leis Arti-le @ of the Civil Co+e &hi-h *in+s the a(ent to ren+er ana--o2nt of his transa-tions to the prin-ipal.

The e-ision of Novem*er ;, "## refers to the6rst Insular an+ 3re(ali'e -ases to esta*lish that the -ompany r2lesan+ re(2lations that an a(ent has to -omply &ith are in+i-ative of an employer)employee relationship. The issentin( pinions of

:2sti-e res*itero Felas-o, :r. an+ :2sti-e Con-hita Carpio Moralesalso -ite Insular Li'e Assurance Co" v" National Labor RelationsCo$$ission !se-on+ ns2lar -ase$ to s2pport the vie& that Ton(5ois Man2lifes employee. n the other han+, Man2life -itestheCarungcong -ase an+ A*P Mutual #ene&t Association Inc" v"National Labor Relations Co$$ission !A9MA -ase$ to s2pport itsalle(ation that Ton(5o &as not its employee.

A caveat has *een (iven a*ove &ith respe-t to the 2se of ther2lin(s in the -ite+ -ases *e-a2se none of them is on all fo2rs &iththe present -ase0 the 2ni<2eness of the fa-t2al sit2ation of thepresent -ase prevents it from *ein( +ire-tly an+ rea+ily -ast in themol+ of the -ite+ -ases. These -ite+ -ases are themselves +iIerent

from one another0 this +iIeren-e 2n+ers-ores the nee+ to rea+ an+<2ote them in the -onte't of their o&n fa-t2al sit2ations.

The present -ase at 6rst (lan-e appears ali(ne+ &ith the fa-ts inthe Carungcong, the 3re(ali'e, an+ the second Insular Li'e -ases. A-riti-al +iIeren-e, ho&ever, e'ists as these cited cases dealtwith the proper legal characteriation of a subsequent management contract that superseded theoriginal agency contract between the insurance companyand its agent. Carungcong +ealt &ith a s2*se<2ent A(reementma5in( Car2n(-on( a Ne& 2siness Mana(er that -learlys2perse+e+ the A(reement +esi(natin( Car2n(-on( as an a(ent

empo&ere+ to soli-it appli-ations for ins2ran-e. The 3re(ali'e case,B



on the other han+, +ealt &ith the proper le(al -hara-teri7ation of the appointment of the R2i7 *rothers to positions hi(her than theirori(inal position as ins2ran-e a(ents. Th2s, after analy7in( the+2ties an+ f2n-tions of the R2i7 *rothers, as these wereenumerated in their contracts, &e -on-l2+e+ that the -ompanypra-ti-ally +i-tate+ the manner *y &hi-h the R2i7 *rothers &ere to-arry o2t their ?o*s. 9inally, the second Insular Li'e case +ealt &iththe impli-ations of +e los Reyes appointment as a-tin( 2nitmana(er &hi-h, li5e the s2*se<2ent -ontra-ts inthe Carungcong an+ the 3re(ali'e -ases, &as -learly +e6ne+ 2n+era s2*se<2ent -ontra-t. In all these cited cases! adetermination of the presence of the Labor "ode element of control was made on the basis of the stipulations of thesubse#uent contracts$

n star5 -ontrast &ith the Carungcong the 3re(ali'e,an+ the second Insular Li'e -ases the only -ontra-t or+o-2ment e%tant and submitted as evidence in the present-ase is the A(reement a p2re a(en-y a(reement in the Civil Co+e-onte't similar to the ori(inal -ontra-t in the &rst Insular Li'e case an+ the -ontra-t in the A*PM#AI case. An+ &hile Ton(5o

&as later on +esi(nate+ 2nit mana(er in @3, ran-h Mana(er in@@#, an+ Re(ional Sales Mana(er in @@B, no formal -ontra-tre(ar+in( these 2n+erta5in(s appears in the re-or+s of the-ase. Any s2-h -ontra-t or a(reement, ha+ there *een any, -o2l+have at the very least provi+e+ the *ases for properly as-ertainin(the ?2ri+i-al relationship esta*lishe+ *et&een the parties.

These -riti-al +iIeren-es, parti-2larly *et&een the present -asean+ the 3re(ali'e an+ the second Insular Li'e cases sho2l+therefore imme+iately +rive 2s to *e more pr2+ent an+ -a2tio2s inapplyin( the r2lin(s in these -ases.

The primary evi+en-e in the present -ase is the :2ly , @;;

A(reement that (overne+ an+ +e6ne+ the parties relations 2ntil theA(reements termination in "##. This A(reement stoo+ for morethan t&o +e-a+es an+, based on the records of the case! &asnever mo+i6e+ or novate+. t ass2mes prima-y *e-a2se it +ire-tly+ealt &ith the nat2re of the parties relationship 2p to the very en+0moreover, *oth parties never +isp2te+ its a2thenti-ity or thea--2ra-y of its terms.

y the A(reements e'press terms, Ton(5o serve+ as an ins2ran-ea(ent for Man2life, not as an employee. To *e s2re, the A(reementsle(al -hara-teri7ation of the nat2re of the relationship -annot *e-on-l2sive an+ *in+in( on the -o2rts0 as the +issent -learly state+,

the -hara-teri7ation of the ?2ri+i-al relationship the A(reement

em*o+ie+ is a matter of la& that is for the -o2rts to +etermine. Atthe same time, tho2(h, the -hara-teri7ation the parties (ave totheir relationship in the A(reement -annot simply *e *r2she+ asi+e*e-a2se it em*o+ies their intent at the time they entere+ theA(reement, an+ they &ere (overne+ *y this 2n+erstan+in(thro2(ho2t their relationship. At the very least, the provision on thea*sen-e of employer)employee relationship *et&een the parties-an *e an ai+ in -onsi+erin( the A(reement an+ itsimplementation, an+ in appre-iatin( the other evi+en-e on re-or+.

The parties le(al -hara-teri7ation of their intent, altho2(h not-on-l2sive, is -riti-al in this -ase *e-a2se this intent is not ille(al oro2tsi+e the -ontemplation of la&, parti-2larly of the ns2ran-e an+the Civil Co+es. 9rom this perspe-tive, the provisions of thens2ran-e Co+e -annot *e +isre(ar+e+ as this Co+e !as heretoforealrea+y note+$ e'pressly envisions a prin-ipal)a(ent relationship*et&een the ins2ran-e -ompany an+ the ins2ran-e a(ent in thesale of ins2ran-e to the p2*li-. &or this reason! we can ta'e

(udicial notice that as a matter of Insurance "ode)basedbusiness practice! an agency relationship prevails in theinsurance industry for the purpose of selling insurance$ The

A(reement, *y its e'press terms, is in a--or+an-e &ith thens2ran-e Co+e mo+el &hen it provi+e+ for a prin-ipal)a(entrelationship, an+ th2s -annot li(htly *e set asi+e nor simply *e-onsi+ere+ as an a(reement that +oes not reQe-t the parties tr2eintent. This intent, in-i+entally, is reinfor-e+ *y the system of -ompensation the A(reement provi+es, &hi-h li5e&ise is ina--or+an-e &ith the pro+2-tion)*ase+ sales -ommissions thens2ran-e Co+e provi+es.

Si(ni6-antly, evi+en-e sho&s that Ton(5os role as an ins2ran-ea(ent never -han(e+ +2rin( his relationship &ith Man2life. f -han(es o--2rre+ at all, the -han(es +i+ not appear to *e in the

nat2re of their -ore relationship. Ton(5o essentially remaine+ ana(ent, *2t move+ 2p in this role thro2(h Man2lifes re-o(nition thathe -o2l+ 2se other a(ents approve+ *y Man2life, *2t operatin(2n+er his (2i+an-e an+ in &hose -ommissions he ha+ a share. 9or&ant of a *etter term, Ton(5o perhaps -o2l+ *e la*ele+ as a lea+a(ent &ho (2i+e+ 2n+er his &in( other Man2life a(ents similarlytas5e+ &ith the sellin( of Man2life ins2ran-e.

Li5e Ton(5o, the evi+en-e s2((ests that these other a(entsoperate+ 2n+er their o&n a(en-y a(reements. Th2s, if Ton(5os-ompensation s-heme -han(e+ at all +2rin( his relationship &ithMan2life, the -han(e &as solely for p2rposes of -re+itin( him &ithhis share in the -ommissions the a(ents 2n+er his &in( (enerate+.

;



As an a(ent &ho &as re-r2itin( an+ (2i+in( other ins2ran-ea(ents, Ton(5o li5e&ise move+ 2p in terms of the reim*2rsement of e'penses he in-2rre+ in the -o2rse of his lea+ a(en-y, aprero(ative he en?oye+ p2rs2ant to Arti-le @" of the CivilCo+e. Th2s, Ton(5o re-eive+ (reater reim*2rsements for hise'penses an+ &as even allo&e+ to 2se Man2life fa-ilities in hisintera-tions &ith the a(ents, all of &hom &ere, in the stri-t sense,Man2life a(ents approve+ an+ -erti6e+ as s2-h *y Man2life &iththe ns2ran-e Commission.

That Ton(5o ass2me+ a lea+ership role *2t nevertheless &hollyremaine+ an a(ent is the inevita*le -on-l2sion that res2lts from therea+in( of the A(reement !the only a(reement on re-or+ in this-ase$ an+ his -ontin2in( role there2n+er as sales a(ent, from theperspe-tive of the ns2ran-e an+ the Civil Co+es an+ in li(ht of &hat Ton(5o himself atteste+ to as his role as Re(ional SalesMana(er. To *e s2re, this interpretation -o2l+ have *een-ontra+i-te+ if other a(reements ha+ *een s2*mitte+ as evi+en-eof the relationship *et&een Man2life an+ Ton(5o on the latterse'pan+e+ 2n+erta5in(s. n the a*sen-e of any s2-h evi+en-e,ho&ever, this rea+in( *ase+ on the availa*le evi+en-e an+ the

appli-a*le ins2ran-e an+ -ivil la& provisions m2st stan+, s2*?e-tonly to o*?e-tive an+ evi+entiary La*or Co+e tests on the e'isten-eof an employer)employee relationship.

n applyin( s2-h La*or Co+e tests, ho&ever, the enfor-ement of theA(reement +2rin( the -o2rse of the parties relationship sho2l+ *enote+. 9rom @;; 2ntil the termination of the A(reement, Ton(5oso--2pation &as to sell Man2lifes ins2ran-e poli-ies an+pro+2-ts. oth parties a-<2ies-e+ &ith the terms an+ -on+itions of the A(reement. Ton(5o, for his part, a--epte+ all the *ene6tsQo&in( from the A(reement, parti-2larly the (enero2s-ommissions.

Evi+en-e in+i-ates that Ton(5o -onsistently -l2n( to the vie& thathe &as an in+epen+ent a(ent sellin( Man2life ins2ran-e pro+2-tssin-e he invaria*ly +e-lare+ himself a *2siness or self)employe+person in his in-ome ta' ret2rns. *his consistency with! andaction made pursuant to the Agreement were pieces of evidence that were never mentioned nor considered in our+ecision of ,ovember -! .//0$ Ha+ they *een -onsi+ere+, they-o2l+, at the ver. least , serve as Ton(5os a+missions a(ainst hisinterest. Stri-tly spea5in(, Ton(5os ta' ret2rns -annot *2t *e le(allysi(ni6-ant *e-a2se he -erti6e+ 2n+er oath the amo2nt he earne+as (ross *2siness in-ome, -laime+ *2siness +e+2-tions, lea+in( tohis net ta'a*le in-ome. This sho2l+ *e evi+en-e of the 6rst or+er

that -annot *e *r2she+ asi+e *y a mere +enial. Even on a laymansvie& that is +evoi+ of le(al -onsi+erations, the e'tent of his ann2alin-ome alone ren+ers his -laime+ employment stat2s +o2*tf2l.

Han+ in han+ &ith the -on-ept of a+mission a(ainst interest in-onsi+erin( the ta' ret2rns, the -on-ept of estoppel a le(al an+e<2ita*le -on-ept ne-essarily m2st -ome into play. Ton(5osprevio2s a+missions in several years of ta' ret2rns as anin+epen+ent a(ent, as a(ainst his *elate+ -laim that he &as all

alon( an employee, are too +iametri-ally oppose+ to *e simply+ismisse+ or i(nore+. Interestingl. 4ustice Velascos dissentingo(inion states that Tong-o %as 'orced to declare hi$sel' a businessor sel')e$(lo.ed (erson b. Manuli'es (ersistent re'usal torecogni+e hi$ as its e$(lo.ee" Regrettably, the dissent hasshown no basis for this conclusion, an understandableomission since no evidence in fact exists on this point inthe records of the case. n fa-t, &hat the evi+en-e sho&s is Ton(5os f2ll -onformity &ith, an+ a-tion as, an in+epen+ent a(ent2ntil his relationship &ith Man2life too5 a *a+ t2rn.

Another interestin( point the +issent raise+ &ith respe-t to theA(reement is its -on-l2sion that the A(reement ne(ate+ anyemployment relationship *et&een Ton(5o an+ Man2life so that the-ommissions he earne+ as a sales a(ent sho2l+ not *e -onsi+ere+in the +etermination of the *a-5&a(es an+ separation pay thatsho2l+ *e (iven to him. This part of the +issent is -orre-t altho2(hit &ent on to t&ist this -on-l2sion *y assertin( that Ton(5o ha+ +2alroles in his relationship &ith Man2life0 he &as an a(ent, not anemployee, in so far as he sol+ ins2ran-e for Man2life, *2t &as anemployee in his -apa-ity as a mana(er. Th2s, the +issent-on-l2+e+ that Ton(5os *a-5&a(es sho2l+ only *e &ith respe-t tohis role as Man2lifes mana(er.

The -on-l2sion &ith respe-t to Ton(5os employment as a mana(er

is, of -o2rse, 2na--epta*le for the le(al, fa-t2al an+ pra-ti-alreasons +is-2sse+ in this Resol2tion. n *rief, the factual reason is(ro2n+e+ on the la-5 of evi+entiary s2pport of the -on-l2sion thatMan2life e'er-ise+ -ontrol over Ton(5o in the sense 2n+erstoo+ inthe La*or Co+e.The legal reason, partly *ase+ on the la-5 of fa-t2al *asis, is the erroneo2s le(al -on-l2sion that Man2life-ontrolle+ Ton(5o an+ &as th2s its employee. The practicalreason, on the other han+, is the havo- that the +issents2n&arrante+ -on-l2sion &o2l+ -a2se the ins2ran-e in+2stry that,*y the la&s o&n +esi(n, operate+ alon( the lines of prin-ipal)a(entrelationship in the sale of ins2ran-e.

A (larin( evi+entiary (ap for Ton(5o in this -ase is the la-5 of



evi+en-e on re-or+ sho&in( that Man2life ever e'er-ise+ means)an+)manner -ontrol, even to a limite+ e'tent, over Ton(5o +2rin(his as-ent in Man2lifes sales la++er. n @3, Ton(5o &as appointe+2nit mana(er. ne'pli-a*ly, Ton(5o never *othere+ to present anyevi+en-e at all on &hat this +esi(nation meant. This also hol+s tr2efor Ton(5os appointment as *ran-h mana(er in @@#, an+ asRe(ional Sales Mana(er in @@B. The *est evi+en-e of -ontrol thea(reement or +ire-tive relatin( to Ton(5os +2ties an+responsi*ilities &as never intro+2-e+ as part of the re-or+s of the-ase. The realit. is (rior to de Dios letter Manuli'e had (racticall. le't Tong-o alone not onl. in doing the business o' sellinginsurance but also in guiding the agents under his %ing" As+is-2sse+ *elo&, the alle(e+ +ire-tives -overe+ *y +e ios letter,heretofore <2ote+ in f2ll, &ere poli-y +ire-tions an+ tar(ete+ res2ltsthat the -ompany &ante+ Ton(5o an+ the other sales (ro2ps toreali(n &ith in their o&n sellin( a-tivities. This is the reality that theparties presente+ evi+en-e -onsistently tells 2s.

Dhat, to Ton(5o, serve as evi+en-e of la*or la& -ontrol are the-o+es of -on+2-t that Man2life imposes on its a(ents in the sale of ins2ran-e. The mere presentation of -o+es or of r2les an+

re(2lations, ho&ever, is not (er se in+i-ative of la*or la& -ontrol asthe la& an+ ?2rispr2+en-e tea-h 2s.

As alrea+y re-ite+ a*ove, the ns2ran-e Co+e imposes o*li(ationson *oth the ins2ran-e -ompany an+ its a(ents in the performan-eof their respe-tive o*li(ations 2n+er the Co+e, parti-2larly onli-enses an+ their rene&als, on the representations to *e ma+e topotential -2stomers, the -olle-tion of premi2ms, on the +elivery of ins2ran-e poli-ies, on the matter of -ompensation, an+ onmeas2res to ens2re ethi-al *2siness pra-ti-e in the in+2stry.

The (eneral la& on a(en-y, on the other han+, e'pressly allo&s theprin-ipal an element of -ontrol over the a(ent in a manner

-onsistent &ith an a(en-y relationship. n this sense, these -ontrolmeas2res -annot *e rea+ as in+i-ative of la*or la& -ontrol.9oremost amon( these are the +ire-tives that the prin-ipal mayimpose on the a(ent to a-hieve the assi(ne+ tas5s, to the e'tentthat they +o not involve the means an+ manner of 2n+erta5in(these tas5s. The la& li5e&ise o*li(ates the a(ent to ren+er ana--o2nt0 in this sense, the prin-ipal may impose on the a(entspe-i6- instr2-tions on ho& an a--o2nt shall *e ma+e, parti-2larlyon the matter of e'penses an+ reim*2rsements. To these e'tents,-ontrol -an *e impose+ thro2(h r2les an+ re(2lations &itho2tintr2+in( into the la*or la& -on-ept of -ontrol for p2rposes of employment.

9rom ?2rispr2+en-e, an important lesson that the &rst Insular Li'e -ase tea-hes 2s is that a -ommitment to a*i+e *y the r2les an+re(2lations of an ins2ran-e -ompany +oes not i(so 'acto ma5e theins2ran-e a(ent an employee. Neither +o (2i+elines someho&restri-tive of the ins2ran-e a(ents -on+2-t ne-essarily in+i-ate-ontrol as this term is +e6ne+ in ?2rispr2+en-e. 1uidelinesindicative of labor law control! as the rst Insular Life casetells us! should not merely relate to the mutually desirableresult intended by the contractual relationship2 they musthave the nature of dictating the means or methods to beemployed in attaining the result! or of 3%ing themethodology and of binding or restricting the party hired tothe use of these means$ n fa-t, res2lts)&ise, the prin-ipal -animpose pro+2-tion <2otas an+ -an +etermine ho& many a(ents,&ith spe-i6- territories, o2(ht to *e employe+ to a-hieve the-ompanys o*?e-tives. These are mana(ement poli-y +e-isions thatthe la*or la& element of -ontrol -annot rea-h. 2r r2lin( in theserespe-ts in the &rst Insular Li'e -ase &as pra-ti-ally reiterate+in Carungcong. Th2s, as &ill *e sho&n more f2lly *elo&, Man2lifes-o+es of -on+2-t, all of &hi-h +o not intr2+e into the ins2ran-ea(ents means an+ manner of -on+2-tin( their sales an+ only-ontrol them as to the +esire+ res2lts an+ ns2ran-e Co+e norms,-annot *e 2se+ as *asis for a 6n+in( that the la*or la& -on-ept of -ontrol e'iste+ *et&een Man2life an+ Ton(5o.

Asi+e from these a8+avits ho&ever, no other evi+en-e e'istsre(ar+in( the eIe-ts of Ton(5os a++itional roles in Man2lifes salesoperations on the -ontra-t2al relationship *et&een them.

To the +issent Ton(5os a+ministrative f2n-tions as re-r2iter,trainer, or s2pervisor of other sales a(ents -onstit2te+ as2*stantive alteration of Man2lifes a2thority over Ton(5o an+ theperforman-e of his en+ of the relationship &ith Man2life. De -o2l+

not +eny tho2(h that Ton(5o remaine+, 6rst an+ foremost, anins2ran-e a(ent, an+ that his a++itional role as ran-h Mana(er +i+not lessen his main an+ +ominant role as ins2ran-e a(ent0 this role-ontin2e+ to +ominate the relations *et&een Ton(5o an+ Man2lifeeven after Ton(5o ass2me+ his lea+ership role amon( a(ents. This-on-l2sion -annot *e +enie+ *e-a2se it pro-ee+s from the2n+isp2te+ fa-t that Ton(5o an+ Man2life never altere+ their :2ly ,@;; A(reement, a distinction the (resent case has %ith thecontractual changes $ade in the second Insular Li'e case" Ton(5osres2lts)*ase+ -ommissions, too, attest to the prima-y he (ave tohis role as ins2ran-e sales a(ent.

The +issent apparently +i+ not also properly analy7e an+ appre-iate

@



the (reat <2alitative +iIeren-e that e'ists *et&een

the 4anulife managers role is to -oor+inate a-tivities of thea(ents 2n+er the mana(ers =nit in the a(ents +aily, &ee5ly, an+monthly sellin( a-tivities, ma5in( s2re that their respe-tive salestar(ets are met.

the +istrict 4anagers duty in 1repalife is to properly a--o2nt,re-or+, an+ +o-2ment the -ompany1s f2n+s, spot)-he-5 an+ a2+itthe &or5 of the 7one s2pervisors, -onserve the -ompany1s *2siness

in the +istri-t thro2(h reinstatements, follo& 2p the s2*mission of &ee5ly remittan-e reports of the +e*it a(ents an+ 7ones2pervisors, preserve -ompany property in (oo+ -on+ition, train2n+erst2+ies for the position of +istri-t mana(ers, an+ maintain his<2ota of sales !the fail2re of &hi-h is a (ro2n+ for termination$.

the 5one 6upervisors 7also in 1repalife8 has the +2ty to +ire-tan+ s2pervise the sales a-tivities of the +e*it a(ents 2n+er him,-onserve -ompany property thro2(h reinstatements, 2n+erta5ean+ +is-har(e the f2n-tions of a*sentee +e*it a(ents, spot)-he-5the re-or+s of +e*it a(ents, an+ ins2re proper +o-2mentation of sales an+ -olle-tions *y the +e*it a(ents.

These ?o* -ontents are &orl+s apart in terms of

-ontrol. n 3re(ali'e, the +etails of ho& to +o the ?o* are spe-i6e+an+ pre)+etermine+0 in the present -ase, the operative &or+s arethe sales tar(et, the metho+olo(y *ein( left 2n+e6ne+ e'-ept tothe e'tent of *ein( -oor+inative. To *e s2re, a -oor+inativestan+ar+ for a mana(er -annot *e in+i-ative of -ontrol0 thestan+ar+ only essentially +es-ri*es &hat a ran-h Mana(er is theperson in the lea+ &ho or-hestrates a-tivities &ithin the (ro2p. To-oor+inate, an+ there*y to lea+ an+ to or-hestrate, is not so m2-ha matter of -ontrol *y Man2life0 it is simply a statement of a *ran-hmana(ers role in relation &ith his a(ents from the point of vie& of Man2life &hose *2siness Ton(5os sales (ro2p -arries.

A +ist2r*in( note, &ith respe-t to the presente+ a8+avits an+ Ton(5os alle(e+ a+ministrative f2n-tions, is the sele-tive -itation of the portions s2pportive of an employment relationship an+ the-onse<2ent omission of portions lea+in( to the -ontrary-on-l2sion. 9or e'ample, the follo&in( portions of the a8+avit of Re(ional Sales Mana(er :ohn Ch2a, &ith -o2nterparts in the othera8+avits, &ere not *ro2(ht o2t in the e-ision of Novem*er ;,"##, &hile the other portions s2((estin( la*or la& -ontrol &erehi(hli(hte+. Spe-i6-ally, the follo&in( portions of the a8+avits&ere not *ro2(ht o2t.

These statements, rea+ &ith the a*ove -omparative analysis of theMan2life an+ the 3re(ali'e -ases, &o2l+ have rea+ily yiel+e+ the

-on-l2sion that no employer)employee relationship e'iste+

*et&een Man2life an+ Ton(5o.

Even de Dios letter is not +eterminative of -ontrol as it in+i-atesthe least amo2nt of intr2sion into Ton(5os e'er-ise of his role asmana(er in (2i+in( the sales a(ents.Stri-tly vie&e+, +e ios+ire-tives are merely operational (2i+elines on ho& Ton(5o -o2l+ali(n his operations &ith Man2lifes re)+ire-te+ (oal of *ein( a *i(lea(2e player. The metho+ is to e'pan+ -overa(e thro2(h the 2seof more a(ents. This re<2irement for the re-r2itment of more

a(ents is not a means)an+)metho+ -ontrol as it relates, more thananythin( else, an+ is +ire-tly relevant, to Man2lifes o*?e-tive of e'pan+e+ *2siness operations thro2(h the 2se of a *i((er salesfor-e &hose mem*ers are all on a prin-ipal)a(ent relationship. Animportant point to note here is that *ong'o was notsupervising regular full)time employees of 4anulifeengaged in the running of the insurance business2 *ong'owas e9ectively guiding his corps of sales agents! who arebound to 4anulife through the same Agreement that he hadwith 4anulife! all the while sharing in these agentscommissions through his overrides$ This is the lea+ a(ent-on-ept mentione+ a*ove for &ant of a more appropriate term,

sin-e the title of ran-h Mana(er 2se+ *y the parties is really amisnomer (iven that &hat is involve+ is not a spe-i6- re(2lar*ran-h of the -ompany *2t a -orps of non)employe+ a(ents,+e6ne+ in terms of -overe+ territory, thro2(h &hi-h the -ompanysells ins2ran-e. Still another point to -onsi+er is that Ton(5o &asnot even settin( poli-ies in the &ay a re(2lar -ompany mana(er+oes0 -ompany aims an+ o*?e-tives &ere simply relaye+ to him&ith s2((estions on ho& these o*?e-tives -an *e rea-he+ thro2(hthe e'pansion of a non)employee sales for-e.

nterestin(ly, a lar(e part of +e ios letter fo-2se+ on in-ome,&hi-h Man2life +emonstrate+, in Ton(5os -ase, to *e 2naIe-te+ *y

the ne& (oal an+ +ire-tion the -ompany ha+ set. n-ome inins2ran-e a(en-y, of -o2rse, is +epen+ent on res2lts, not on themeans an+ manner of sellin( a matter for Ton(5o an+ his a(ents to+etermine an+ an area into &hi-h Man2life ha+ not&a+e+. =n+enia*ly, +e ios letter -ontaine+ a +ire-tive to se-2re a-ompetent assistant at Ton(5os o&n e'pense. Dhile -o2-he+ interms of a +ire-tive, it -annot stri-tly *e 2n+erstoo+ as an intr2sioninto Ton(5os metho+ of operatin( an+ s2pervisin( the (ro2p of a(ents &ithin his +elineate+ territory. More than anythin( else, the+ire-tive &as a si(nal to Ton(5o that his res2lts &ere 2nsatisfa-tory,an+ &as a s2((estion on ho& Ton(5os per-eive+ &ea5ness in+eliverin( res2lts -o2l+ *e reme+ie+. t &as a sol2tion, &ith an eye

on res2lts, for a -onsistently 2n+erperformin( (ro2p0 its o*vio2s"#



intent &as to save Ton(5o from the res2lt that he then faile+ to(rasp that he -o2l+ lose even his o&n stat2s as an a(ent, as he infa-t event2ally +i+.

The present -ase m2st *e +istin(2ishe+ from the second Insular Li'e case that sho&e+ the hallmar5s of an employer)employeerelationship in the mana(ement system esta*lishe+. These &eree'-l2sivity of servi-e, -ontrol of assi(nments an+ removal of a(ents2n+er the private respon+ents 2nit, an+ f2rnishin( of -ompany

fa-ilities an+ materials as &ell as -apital +es-ri*e+ as =nitevelopment 92n+. All these are o*vio2sly a*sent in the present-ase. f there is a -ommonality in these -ases, it is in the -olle-tionof premi2ms &hi-h is a *asi- a2thority that -an *e +ele(ate+ toa(ents 2n+er the ns2ran-e Co+e.

Given this anemi- state of the evi+en-e, parti-2larly on there<2isite -onQ2en-e of the fa-tors +eterminative of the e'isten-e of employer)employee relationship, the Co2rt -annot -on-l2sively 6n+that the relationship e'ists in the present -ase, even if s2-hrelationship only refers to Ton(5os a++itional f2n-tions. Dhile aro2(h +e+2-tion -an *e ma+e, the ans&er &ill not *e f2llys2pporte+ *y the s2*stantial evi+en-e nee+e+.

=n+er this le(al sit2ation, the only -on-l2sion that -an *e ma+e isthat the a*sen-e of evi+en-e sho&in( Man2lifes -ontrol over Ton(5os -ontra-t2al +2ties points to the a*sen-e of any employer)employee relationship *et&een Ton(5o an+ Man2life. n the -onte'tof the esta*lishe+ evi+en-e, Ton(5o remaine+ an a(ent all alon(0altho2(h his s2*se<2ent +2ties ma+e him a lea+ a(ent &ithlea+ership role, he &as nevertheless only an a(ent &hose *asi--ontra-t yiel+s no evi+en-e of means)an+)manner -ontrol.

This -on-l2sion ren+ers 2nne-essary any f2rther +is-2ssion of the<2estion of &hether an a(ent may sim2ltaneo2sly ass2me

-onQi-tin( +2al personalities. 2t to set the re-or+ strai(ht, the-on-ept of a sin(le person havin( the +2al role of a(ent an+employee &hile +oin( the same tas5 is a novel one in o2r ?2rispr2+en-e, &hi-h m2st *e vie&e+ &ith -a2tion espe-ially &henit is devoid of any (urisprudential support or precedent$ The<2ote+ portions in :2sti-e Carpio)Morales +issent, *orro&e+ from*oth the3re(ali'e an+ the second Insular Li'e cases, to s2pport the+2ality approa-h of the e-ision of Novem*er ;, "##, arere(retta*ly far remove+ from their -onte't i"e", the -ases fa-t2alsit2ations, the iss2es they +e-i+e+ an+ the totality of the r2lin(s inthese -ases an+ -annot yiel+ the -on-l2sions that the +issentin(opinions +re&.

The 3re(ali'e case +ealt &ith the sole iss2e of &hether the R2i7*rothers appointment as 7one s2pervisor an+ +istri-t mana(erma+e them employees of 3re(ali'e. n+ee+, *e-a2se of thepresen-e of the element of -ontrol in their -ontra-t of en(a(ements, they &ere -onsi+ere+ 3re(ali'es employees. This +i+not mean, ho&ever, that they &ere sim2ltaneo2sly -onsi+ere+a(ents as &ell as employees of 3re(ali'e0 the Co2rts r2lin( neverimplie+ that this sit2ation e'iste+ insofar as the R2i7 *rothers &ere-on-erne+. The Co2rts statement the ns2ran-e Co+e may (overnthe li-ensin( re<2irements an+ other parti-2lar +2ties of ins2ran-ea(ents, *2t it +oes not *ar the appli-ation of the La*or Co+e &ithre(ar+ to la*or stan+ar+s an+ la*or relations simply means that&hen an ins2ran-e -ompany has e'er-ise+ -ontrol over its a(entsso as to ma5e them their employees, the relationship *et&een theparties, &hi-h &as other&ise one for a(en-y (overne+ *y the CivilCo+e an+ the ns2ran-e Co+e, &ill no& *e (overne+ *y the La*orCo+e. The reason for this is simple the -ontra-t of a(en-y has *eentransforme+ into an employer)employee relationship.

The second Insular Li'e case on the other han+, involve+ the iss2eof &hether the la*or *o+ies have ?2ris+i-tion over an ille(al

termination +isp2te involvin( parties &ho ha+ t&o -ontra-ts 6rst,an ori(inal -ontra-t !a(en-y -ontra-t$, &hi-h &as 2n+o2*te+ly onefor a(en-y, an+ another s2*se<2ent -ontra-t that in t2rn+esi(nate+ the a(ent a-tin( 2nit mana(er !a mana(ement-ontra-t$. oth the ns2lar Life an+ the la*or ar*iter &ere one in theposition that *oth &ere a(en-y -ontra-ts. The Co2rt +isa(ree+ &iththis -on-l2sion an+ hel+ that insofar as the mana(ement -ontra-tis -on-erne+, the la*or ar*iter has ?2ris+i-tion. t is in this li(ht that&e reman+e+ the -ase to the la*or ar*iter for f2rtherpro-ee+in(s. De never sai+ in this -ase tho2(h that the ins2ran-ea(ent ha+ eIe-tively ass2me+ +2al personalities for the simplereason that the a(en-y -ontra-t has *een eIe-tively s2perse+e+

*y the mana(ement -ontra-t. The mana(ement -ontra-t provi+e+that if the appointment &as terminate+ for any reason other thanfor -a2se, the a-tin( 2nit mana(er &o2l+ *e reverte+ to a(entstat2s an+ assi(ne+ to any 2nit.

Sin(er Se&in( Ma-hine v rilon, @3 SCRA ";#

!@@$ The nat2re of the relationship *et&een a -ompany an+ its-olle-tin( a(ents +epen+s on the -ir-2mstan-es of ea-h parti-2larrelationship. Not all -olle-tin( a(ents are employees an+ neitherare all -olle-tin( a(ents in+epen+ent -ontra-tors. The -olle-tors

-o2l+ fall 2n+er either -ate(ory +epen+in( on the fa-ts of ea-h"



-ase.

The A(reement -on6rms the stat2s of the -olle-tin( a(ent in this-ase as an in+epen+ent -ontra-tor not only *e-a2se he is e'pli-itly+es-ri*e+ as s2-h *2t also *e-a2se the provisions permit him toperform -olle-tion servi-es for the -ompany &itho2t *ein( s2*?e-tto the -ontrol of the latter e'-ept only as to the res2lt of his &or5.After a -aref2l analysis of the -ontents of the a(reement, &e r2le infavor of the petitioner.

The re<2irement that -olle-tion a(ents 2tili7e only re-eipt formsan+ report forms iss2e+ *y the Company an+ that reports shall *es2*mitte+ at least on-e a &ee5 is not ne-essarily an in+i-ation of -ontrol over the means *y &hi-h the ?o* of -olle-tion is to *eperforme+. The a(reement itself spe-i6-ally e'plains that re-eiptforms shall *e 2se+ for the p2rpose of avoi+in( a -o)min(lin( of personal f2n+s of the a(ent &ith the money -olle-te+ on *ehalf of the Company. Li5e&ise, the 2se of stan+ar+ report forms as &ell asthe re(2lar time &ithin &hi-h to s2*mit a report of -olle-tion areinten+e+ to fa-ilitate or+er in o8-e pro-e+2res. Even if the reportre<2irements are to *e -alle+ -ontrol meas2res, any -ontrol is only&ith respe-t to the en+ res2lt of the -olle-tion sin-e there<2irements re(2late the thin(s to *e +one after the performan-eof the -olle-tion ?o* or the ren+ition of the servi-e.

The monthly -olle-tion <2ota is a normal re<2irement fo2n+ insimilar -ontra-t2al a(reements an+ is so stip2late+ to en-o2ra(e a-olle-tin( a(ent to report at least the minim2m amo2nt of pro-ee+s. n fa-t, para(raph , se-tion * (ives a *on2s, asi+e fromthe re(2lar -ommission every time the <2ota is rea-he+. As are<2irement for the f2l6llment of the -ontra-t, it is s2*?e-t toa(reement *y *oth parties. Hen-e, if the other -ontra-tin( party+oes not a--e+e to it, he -an -hoose not to si(n it. 9rom there-or+s, it is -lear that the Company an+ ea-h -olle-tin( a(ent

inten+e+ that the former ta5e -ontrol only over the a$ount o' collection, &hi-h is a res2lt of the ?o* performe+.

The respon+ents1 -ontention that the 2nion mem*ers areemployees of the Company is *ase+ on sele-te+ provisions of theA(reement *2t i(nores the follo&in( -ir-2mstan-es &hi-hrespon+ents never ref2te+ either in the trial pro-ee+in(s *efore thela*or o8-ials nor in its plea+in(s 6le+ *efore this Co2rt.

. The -olle-tion a(ents are not re<2ire+ to o*serve o8-e ho2rs orreport to Sin(er1s o8-e every+ay e'-ept, nat2rally an+ ne-essarily,for the p2rpose of remittin( their -olle-tions.

". The -olle-tion a(ents +o not have to +evote their time

e'-l2sively for SNGER. There is no prohi*ition on the part of the-olle-tion a(ents from &or5in( else&here. Nor are these a(entsre<2ire+ to a--o2nt for their time an+ s2*mit a re-or+ of theira-tivity.

3. The manner an+ metho+ of eIe-tin( -olle-tions are left solely tothe +is-retion of the -olle-tion a(ents &itho2t any interferen-e onthe part of Sin(er.

4. The -olle-tion a(ents sho2l+er their transportation e'pensesin-2rre+ in the -olle-tions of the a--o2nts assi(ne+ to them.

. The -olle-tion a(ents are pai+ stri-tly on -ommission *asis. Theamo2nts pai+ to them are *ase+ solely on the amo2nts of -olle-tion ea-h of them ma5e. They +o not re-eive any -ommissionif they +o not eIe-t any -olle-tion even if they p2t a lot of eIort in-olle-tin(. They are pai+ -ommission on the *asis of a-t2al-olle-tions.

B. The -ommissions earne+ *y the -olle-tion a(ents are +ire-tly+e+2-te+ *y them from the amo2nt of -olle-tions they are a*le toeIe-t. The net amo2nt is &hat is then remitte+ to Sin(er./ !Rollo,pp. ;)$

f in+ee+ the 2nion mem*ers are -ontrolle+ as to the manner *y

&hi-h they are s2ppose+ to perform their -olle-tions, they sho2l+have e'pli-itly sai+ so in +etail *y spe-i6-ally +enyin( ea-h of thefa-ts asserte+ *y the petitioner. As there seems to *e no o*?e-tionson the part of the respon+ents, the Co2rt 6n+s that they misera*lyfaile+ to +efen+ their position.

A thoro2(h e'amination of the fa-ts of the -ase lea+s 2s to the-on-l2sion that the e'isten-e of an employer)employee relationship*et&een the Company an+ the -olle-tion a(ents -annot *es2staine+.

The plain lan(2a(e of the a(reement reveals that the +esi(nationas -olle-tion a(ent +oes not -reate an employment relationship an+

that the appli-ant is to *e -onsi+ere+ at all times as anin+epen+ent -ontra-tor. This is -onsistent &ith the 6rst r2le of interpretation that the literal meanin( of the stip2lations in the-ontra-t -ontrols !Arti-le 3;#, Civil Co+e0 La S2erte Ci(ar an+Ci(arette 9a-tory v. ire-tor of 2rea2 of La*or, Relations, "3SCRA B;@ K@3$. No s2-h &or+s as /to hire an+ employ/ arepresent. Moreover, the a(reement +i+ not 6' an amo2nt for &a(esnor the re<2ire+ &or5in( ho2rs. Compensation is earne+ only onthe *asis of the tan(i*le res2lts pro+2-e+, i"e., total -olle-tionsma+e !Sarra v. A(arra+o, BB SCRA B" K@$. n Invest$ent Planning Cor(" o' the Phili((ines v" Social Securit. S.ste$ " SCRA@"4 K@B; &hi-h involve+ -ommission a(ents, this Co2rt ha+ the

""



o--asion to r2le, th2s

De are -onvin-e+ from the fa-ts that the &or5 of petitioner1sa(ents or re(istere+ representatives more nearly appro'imatesthat of an in+epen+ent -ontra-tor than that of an employee. Thelatter is pai+ for the la*or he performs, that is, for the a-ts of &hi-hs2-h la*or -onsists the former is pai+ for the res2lt thereof . . . .

' ' ' ' ' ' ' ' '

Even i' an agent o' (etitioner should devote all o' his ti$e and

e5ort tr.ing to sell its invest$ent (lans he %ould not necessaril. be entitled to co$(ensation there'or" His ri(ht to -ompensation+epen+s 2pon an+ is meas2re+ *y the tan(i*le res2lts hepro+2-es./

Moreover, the -olle-tion a(ent +oes his &or5 /more or less at hiso&n pleas2re/ &itho2t a re(2lar +aily time frame impose+ on him!nvestment lannin( Corporation of the hilippines v. So-ialSe-2rity System, su(ra0 See alsoSo-ial Se-2rity System v. Co2rt of Appeals, 3# SCRA "# K@B@$.

The (ro2n+s spe-i6e+ in the -ontra-t for termination of therelationship +o not s2pport the vie& that -ontrol e'ists /for the-a2ses of termination th2s spe-i6e+ have no relation to the means

an+ metho+s of &or5 that are or+inarily re<2ire+ of or impose+2pon employees./ !nvestment lannin( Corp. of the hil. v. So-ialSe-2rity System, su(ra$

The last an+ most important element of the -ontrol test is notsatis6e+ *y the terms an+ -on+itions of the -ontra-ts. There isnothin( in the a(reement &hi-h implies -ontrol *y the Companynot only over the en+ to *e a-hieve+ *2t also over the means an+metho+s in a-hievin( the en+ !LFN i-t2res, n-. v. hilippineM2si-ians G2il+, SCRA 3" K@B$.

The Co2rt 6n+s the -ontention of the respon+ents that the 2nionmem*ers are employees 2n+er Arti-le "# of the La*or Co+e to

have no *asis. The +e6nition that re(2lar employees are those &hoperform a-tivities &hi-h are +esira*le an+ ne-essary for the*2siness of the employer is not +eterminative in this -ase. Anya(reement may provi+e that one party shall ren+er servi-es for an+in *ehalf of another for a -onsi+eration !no matter ho& ne-essaryfor the latter1s *2siness$ even &itho2t *ein( hire+ as an employee. This is pre-isely tr2e in the -ase of an in+epen+ent -ontra-torshipas &ell as in an a(en-y a(reement. The Co2rt a(rees &ith thepetitioner1s ar(2ment that Arti-le "# is not the yar+sti-5 for+eterminin( the e'isten-e of an employment relationship *e-a2seit merely +istin(2ishes *et&een t&o 5in+s of employees, i"e.,re(2lar employees an+ -as2al employees, for p2rposes of

+eterminin( the ri(ht of an employee to -ertain *ene6ts, to ?oin orform a 2nion, or to se-2rity of ten2re. Arti-le "# +oes not apply&here the e'isten-e of an employment relationship is in +isp2te.

Ma6n-o v. ple, ;# SCRA 3@ !@;B$ro ha- vi-e the iss2e of &hether Repomanta an+ Moral+e &ereemployees of Ma6n-o or &ere in+epen+ent -ontra-tors sho2l+ *eresolve+ mainly in the li(ht of their pe++lin( -ontra-ts. A +iIerentapproa-h &o2l+ lea+ this Co2rt astray into the 6el+ of fa-t2al-ontroversy &here its le(al prono2n-ements &o2l+ not rest on soli+(ro2n+s.

De hol+ that 2n+er their pe++lin( -ontra-ts Repomanta an+Moral+e &ere not employees of Ma6n-o *2t &ere in+epen+ent-ontra-tors as fo2n+ *y the NLRC an+ its fa-t)6n+er an+ *y the-ommittee appointe+ *y the Se-retary of La*or to loo5 into thestat2s of Cosmos an+ Ma6n-o pe++lers. They &ere +istri*2tors of Cosmos soft +rin5s &ith their o&n -apital an+ employees.r+inarily, an employee or a mere pe++ler +oes not e'e-2te aformal -ontra-t of employment. He is simply hire+ an+ he &or5s2n+er the +ire-tion an+ -ontrol of the employer.

Repomanta an+ Moral+e vol2ntarily e'e-2te+ &ith Ma6n-o formalpe++lin( -ontra-ts &hi-h in+i-ate the manner in &hi-h they &o2l+sell Cosmos soft +rin5s. That Cir-2mstan-e si(ni6es that they &erea-tin( as in+epen+ent *2sinessmen. They &ere to si(n or not tosi(n that -ontra-t. f they +i+ not &ant to sell Cosmos pro+2-ts2n+er the -on+itions +e6ne+ in that -ontra-t0 they &ere free tore?e-t it.

2t havin( si(ne+ it, they &ere *o2n+ *y its stip2lations an+ the-onse<2en-es thereof 2n+er e'istin( la*or la&s. ne s2-hstip2lation is the ri(ht of the parties to terminate the -ontra-t 2pon6ve +ays1 prior noti-e !ar. @$. Dhether the termination in this -ase

&as an 2n&arrante+ +ismissal of an employee, as -onten+e+ *yRepomanta an+ Moral+e, is a point that -annot *e resolve+ &itho2ts2*mission of evi+en-e. =sin( the -ontra-t itself as the sole-riterion, the termination sho2l+ perfor-e *e -hara-teri7e+ assimply the e'er-ise of a ri(ht freely stip2late+ 2pon *y the parties.

esa v. Tra?ano, 4B SCRA # !@B$2r re-or+s of the -ase reveal that an employer)employeerelationship +oes not e'ist *et&een the ; shoeshiners an+petitioner.

e it note+ that the +ef2n-t CR in +ismissin( the -ases for 2nfair

la*or pra-ti-e 6le+ *y the shoeshiners a(ainst herein petitioner"3



ESA +e-lare+ in its e-ision +ate+ e-em*er ", @B that

The shoe shiner is +istin-t from a pie-e &or5er *e-a2se &hile thelatter is pai+ for &or5 a--omplishe+, he +oes not, ho&ever,-ontri*2te anythin( to the -apital of the employer other than hisservi-e. t is the employer of the pie-e &or5er &ho pays his &a(es,&hile the shoe shiner in this instan-e is pai+ +ire-tly *y his-2stomer. The pie-e &or5er is pai+ for &or5 a--omplishe+ &itho2tre(ar+ or -on-ern to the pro6t as +erive+ *y his employer, *2t inthe -ase of the shoe shiners, the pro-ee+s +erive+ from the tra+e

are al&ays +ivi+e+ share an+ share ali5e &ith respon+ent ESA. The shoe shiner -an ta5e his share of the pro-ee+s every+ay if he&ante+ to or &ee5ly as is the pra-ti-e of esas The employer of the pie-e &or5er s2pervises an+ -ontrols his &or5, *2t in the -aseof the shoe shiner res(ondent #ESA does not e2ercise an. degreeo' control or su(ervision over their (erson and their %or-" All theseare not obtaining in the case o' a (iece %or-er as he is in 'act ane$(lo.ee in conte$(lation o' la% distinct 'ro$ the shoe shiner inthis instance %ho in relation to res(ondent MAMERT/ #" #ESA isa (artner in the trade" Conse,uentl. e$(lo.er)e$(lo.eerelationshi( bet%een $e$bers o' the Petitioning union andres(ondent MAMERT/ #" #ESA being absent the latter could not beheld guilt. o' the un'air tabor (ractice acts i$(uted against hi$ .

!p. B, Anne' / / of sai+ e-ision$.

Then too on e-. ";, @3, then ire-tor A2(2sto San-he7 of the2rea2 of Dor5in( Con+itions, MLE, in response to a letter of petitioner relative to the implementation of &a(e r+er No. " &hi-hprovi+e+ for an in-rease *oth in minim2m &a(e an+ -ost of livin(allo&an-e, opine+ as follo&s

The most important -on+ition to *e -onsi+ere+ is the e'er-ise of -ontrol an+ s2pervision over the employees, per o2r -onversation,the persons -on-erne+ 2n+er yo2r <2ery are the shoe shiners an+*ase+ on the +e-ision ren+ere+ *y Asso-iate :2+(e Emiliano Ta*i(ne of the +ef2n-t Co2rt of n+2strial Relations, these shoeshiners are not employees of the -ompany, *2t are partners

instea+. This is +2e to the fa-t that the o&ner>mana(er +oes note'er-ise -ontrol an+ s2pervision over the shoe shiners. That theshiners have their o&n -2stomers from &hom they -har(e the feean+ +ivi+e the pro-ee+s e<2ally &ith the o&ner, &hi-h ma5e theo&ner -ate(ori7e+ them as on p2rely -ommission *asis. Theatten+ant -ir-2mstan-es -learly sho& that there is no employer)employee relationship e'istin(, an+ s2-h the o&ner>mana(er is not*y la&, 2n+er o*li(ation to e'ten+ to those on p2rely -ommission*asis the *ene6t of Da(e r+er No. ". Ho&ever, the la& +oes notpre-l2+e the employer in (ivin( s2-h *ene6t to all its employeesin-l2+in( those &hi-h may not *e -overe+ *y the man+ate of thela&. !Letter +ate+ e-em*er ";, @ a++resse+ to petitionerAnne' )", etition$

The 8-e of the Soli-itor General as -o2nsel for p2*li- respon+enta(rees that in the present -ase, no employer)employee relationshipe'ists.

The S2preme Co2rt in the Rosario rothers -ase r2le+ that

A *asi- fa-tor 2n+erlyin( the e'er-ise of ri(hts 2n+er the La*orCo+e is the stat2s of employment. t is important in the+etermination of &ho shall *e in-l2+e+ in a propose+ *ar(ainin(2nit *e-a2se it is sine ,ua non" The f2n+amental an+ essential

-on+ition that a *ar(ainin( 2nit *e -ompose+ of employees. 9ail2reto esta*lish this ?2ri+i-al relationship *et&een the 2nion mem*ersan+ the employer aIe-ts the le(ality of the 2nion itself. t meansthe ineli(i*ility of the 2nion mem*ers to present a petition for-erti6-ation ele-tion as &ell as to vote therein.

Tan v. La(rama, 3; SCRA 3@3 !"##"$*irst" The e'isten-e in this -ase of the 6rst element is 2n+isp2te+. t&as petitioner &ho en(a(e+ the servi-es of La(rama &itho2t theintervention of a thir+ party. t is the e'isten-e of the se-on+element, the po&er of -ontrol, that re<2ires +is-2ssion here.

f the fo2r elements of the employer)employee relationship, the

-ontrol test is the most important. Compare+ to an employee, anin+epen+ent -ontra-tor is one &ho -arries on a +istin-t an+in+epen+ent *2siness an+ 2n+erta5es to perform the ?o*, &or5, orservi-e on its o&n a--o2nt an+ 2n+er its o&n responsi*ilitya--or+in( to its o&n manner an+ metho+, free from the -ontrol an++ire-tion of the prin-ipal in all matters -onne-te+ &ith theperforman-e of the &or5 e'-ept as to the res2lts thereof. Hen-e,&hile an in+epen+ent -ontra-tor en?oys in+epen+en-e an+ free+omfrom the -ontrol an+ s2pervision of his prin-ipal, an employee iss2*?e-t to the employers po&er to -ontrol the means an+ metho+s*y &hi-h the employees &or5 is to *e performe+ an+a--omplishe+.

n the -ase at *ar, al*eit petitioner Tan -laims that privaterespon+ent La(rama &as an in+epen+ent -ontra-tor an+ never hisemployee, the evi+en-e sho&s that the latter performe+ his &or5as painter 2n+er the s2pervision an+ -ontrol of petitioner. La(rama&or5e+ in a +esi(nate+ &or5 area insi+e the Cro&n Theater of petitioner, for the 2se of &hi-h petitioner pres-ri*e+ r2les. Ther2les in-l2+e+ the o*servan-e of -leanliness an+ hy(iene an+ aprohi*ition a(ainst 2rinatin( in the &or5 area an+ any pla-e otherthan the toilet or the rest rooms. etitioners -ontrol over La(ramas&or5 e'ten+e+ not only to the 2se of the &or5 area, *2t also to theres2lt of La(ramas &or5, an+ the manner an+ means *y &hi-h the

&or5 &as to *e a--omplishe+."4



ART. ";@. Securit. o' Tenure" n -ases of re(2lar employment, theemployer shall not terminate the servi-es of an employee e'-eptfor a ?2st -a2se or &hen a2thori7e+ *y this Title. An employee &hois 2n?2stly +ismisse+ from &or5 shall *e entitle+ to reinstatement&itho2t loss of seniority ri(hts an+ other privile(es an+ to his f2ll*a-5&a(es, in-l2sive of allo&an-es, an+ to his other *ene6ts ortheir monetary e<2ivalent -omp2te+ from the time his-ompensation &as &ithhel+ from him 2p to the time of his a-t2alreinstatement.

. Classes of Employees

The enins2la Manila v. Alipio, :2ne ;, "## The -on-l2sions rea-he+ *y the NLRC an+ the La*or Ar*iter, thatAlipio &as not a re(2lar employee of the hotel an+ that she &asvali+ly +ismisse+, are not s2pporte+ *y la& an+ evi+en-e on re-or+.

Arti-le "# of the La*or Co+e provi+es

ART. "#. Regular and Casual E$(lo.$ent . ) The provisions of &ritten a(reement to the -ontrary not&ithstan+in( an+ re(ar+lessof the oral a(reement of the parties, an employment shall *e+eeme+ to *e re(2lar &here the employee has *een en(a(e+ toperform a-tivities &hi-h are 2s2ally ne-essary or +esira*le in the2s2al *2siness or tra+e of the employer, e'-ept &here theemployment has *een 6'e+ for a spe-i6- pro?e-t or 2n+erta5in(the -ompletion or termination of &hi-h has *een +etermine+ at thetime of the en(a(ement of the employee or &here the &or5 orservi-es to *e performe+ is seasonal in nat2re an+ theemployment is for the +2ration of the season.

An employment shall *e +eeme+ to *e -as2al if it is not -overe+ *ythe pre-e+in( para(raph Provided That, any employee &ho hasren+ere+ at least one year of servi-e, &hether s2-h servi-e is-ontin2o2s or *ro5en, shall *e -onsi+ere+ a re(2lar employee &ithrespe-t to the a-tivity in &hi-h he is employe+ an+ his

employment shall -ontin2e &hile s2-h a-tivity e'ists. !Emphasiss2pplie+.$

Th2s, an employment is +eeme+ re(2lar &hen the a-tivitiesperforme+ *y the employee are 2s2ally ne-essary or +esira*le inthe 2s2al *2siness of the employer. Ho&ever, any employee &hohas ren+ere+ at least one year of servi-e, even tho2(h intermittent,is +eeme+ re(2lar &ith respe-t to the a-tivity performe+ an+ &hiles2-h a-tivity a-t2ally e'ists.

n this -ase, re-or+s sho& that Alipio1s servi-es &ere en(a(e+ *ythe hotel intermittently from @@3 2p to @@. Her servi-es as areliever n2rse &ere 2n+o2*te+ly ne-essary an+ +esira*le in the

hotel1s *2siness of provi+in( -omforta*le a--ommo+ation to its

(2ests. n any -ase, sin-e she ha+ ren+ere+ more than one year of intermittent servi-e as a reliever n2rse at the hotel, she ha+*e-ome a re(2lar employee as early as e-em*er ", @@4. Lastly,per the hotel1s o&n Certi6-ation +ate+ April "", @@;, she &asalrea+y a /re(2lar staI n2rse/ 2ntil her +ismissal.

Ro&ell n+2strial Corporation v. CA, Mar-h ;,

"##;

The aforesai+ Arti-le "# of the La*or Co+e, as amen+e+, -lassi6esemployees into three -ate(ories, namely !$ regularemployees or those &hose &or5 is ne-essary or +esira*le to the2s2al *2siness of the employer0 !"$ pro(ect employees or those&hose employment has *een 6'e+ for a spe-i6- pro?e-t or2n+erta5in(, the -ompletion or termination of &hi-h has *een+etermine+ at the time of the en(a(ement of the employee or&here the &or5 or servi-es to *e performe+ is seasonal in nat2rean+ the employment is for the +2ration of the season0 an+!3$ casual employees or those &ho are neither re(2lar nor pro?e-temployees.

Re(2lar employees are f2rther -lassi6e+ into !$ re(2laremployees *y nat2re of &or50 an+ !"$ re(2lar employees *y yearsof servi-e. The former refers to those employees &ho perform aparti-2lar a-tivity &hi-h is ne-essary or +esira*le in the 2s2al*2siness or tra+e of the employer, re(ar+less of their len(th of servi-e0 &hile the latter refers to those employees &ho have *eenperformin( the ?o*, re(ar+less of the nat2re thereof, for at least ayear.

The aforesai+ Arti-le "# of the La*or Co+e, as amen+e+, ho&ever,+oes not pros-ri*e or prohi*it an employment -ontra-t &ith a 6'e+perio+. t +oes not ne-essarily follo& that &here the +2ties of theemployee -onsist of a-tivities 2s2ally ne-essary or +esira*le in the

2s2al *2siness of the employer, the parties are for*i++en froma(reein( on a perio+ of time for the performan-e of s2-ha-tivities. There is nothin( essentially -ontra+i-tory *et&een a+e6nite perio+ of employment an+ the nat2re of the employees+2ties. Dhat Arti-le "# of the La*or Co+e, as amen+e+, see5s toprevent is the pra-ti-e of some 2ns-r2p2lo2s an+ -oveto2semployers &ho &ish to -ir-2mvent the la& that prote-ts lo&ly&or5ers from -apri-io2s +ismissal from their employment. Theaforesai+ provision, ho&ever, sho2l+ not *e interprete+ in s2-h a&ay as to +eprive employers of the ri(ht an+ prero(ative to -hoosetheir o&n &or5ers if they have s28-ient *asis to ref2se anemployee a re(2lar stat2s. Mana(ement has ri(hts &hi-h sho2l+

"B



also *e prote-te+.

n the -ase at *ar, respon+ent Taripe si(ne+ a -ontra-t of employment prior to his a+mission into the petitioners-ompany. ase+ on the sai+ -ontra-t, respon+ent Taripesemployment &ith the petitioner is (oo+ only for a perio+ of 6vemonths 2nless the sai+ -ontra-t is rene&e+ *y m2t2al -onsent. An+as -laime+ *y petitioner RC, respon+ent Taripe, alon( &ith its other-ontra-t2al employees, &as hire+ only to meet the in-rease in

+eman+ for pa-5a(in( materials +2rin( the Christmas season an+also to *2il+ 2p sto-5 levels +2rin( the early part of the year.

Altho2(h Arti-le "# of the La*or Co+e, as amen+e+, +oes notfor*i+ 6'e+ term employment, it m2st, nevertheless, meet any of the follo&in( (2i+elines in or+er that it -annot *e sai+ to-ir-2mvent se-2rity of ten2re !$ that the 6'e+ perio+ of employment &as 5no&in(ly an+ vol2ntarily a(ree+ 2pon *y theparties, &itho2t any for-e, +2ress or improper press2re *ein(*ro2(ht to *ear 2pon the employee an+ a*sent any other-ir-2mstan-es vitiatin( his -onsent0 or !"$ it satisfa-torily appearsthat the employer an+ employee +ealt &ith ea-h other on more orless e<2al terms &ith no moral +ominan-e &hatever *ein(e'er-ise+ *y the former on the latter.

n the present -ase, it -annot *e +enie+ that the employment-ontra-t si(ne+ *y respon+ent Taripe +i+ not mention that he &ashire+ only for a spe-i6- 2n+erta5in(, the -ompletion of &hi-h ha+*een +etermine+ at the time of his en(a(ement. The sai+employment -ontra-t neither mentione+ that respon+ent Taripesservi-es &ere seasonal in nat2re an+ that his employment &as onlyfor the +2ration of the Christmas season as p2rposely -laime+ *ypetitioner RC. Dhat &as stip2late+ in the sai+ -ontra-t &as thatrespon+ent Taripes employment &as -ontra-t2al for the perio+ of 6ve months.

Li5e&ise, as the NLRC mentione+ in its Resol2tion, to &hi-h theCo2rt of Appeals a(ree+, other than the *are alle(ations of petitioner RC that respon+ent Taripe &as hire+ only *e-a2se of thein-rease in the +eman+ for pa-5a(in( materials +2rin( theChristmas season, petitioner RC faile+ to s2*stantiate s2-h -laim&ith any other evi+en-e. etitioner RC +i+ not present anyevi+en-e &hi-h mi(ht prove that respon+ent Taripe &as employe+for a 6'e+ or spe-i6- pro?e-t or that his servi-es &ere seasonal innat2re.

Also, petitioner RC faile+ to -ontrovert the -laim of respon+ent Taripe that he &as ma+e to si(n the -ontra-t of employment,

prepare+ *y petitioner RC, as a -on+ition for his hirin(. S2-h-ontra-t in &hi-h the terms are prepare+ *y only one party an+ theother party merely a8'es his si(nat2re si(nifyin( his a+hesionthereto is -alle+ contract of adhesion. t is an a(reement in&hi-h the parties *ar(ainin( are not on e<2al footin(, the &ea5erpartys parti-ipation *ein( re+2-e+ to the alternative to ta5e it orleave it.n the present -ase, respon+ent Taripe, in nee+ of a ?o*,&as -ompelle+ to a(ree to the -ontra-t, in-l2+in( the 6ve)monthperio+ of employment, ?2st so he -o2l+ *e hire+. Hen-e, it -annot

*e ar(2e+ that respon+ent Taripe si(ne+ the employment -ontra-t&ith a 6'e+ term of 6ve months &illin(ly an+ &ith f2ll 5no&le+(e of the impa-t thereof.

Dith re(ar+ to the se-on+ (2i+eline, this Co2rt a(rees &ith theCo2rt of Appeals that petitioner RC an+ respon+ent Taripe -annot*e sai+ to have +ealt &ith ea-h other on more or less e<2al terms&ith no moral +ominan-e e'er-ise+ *y the former over thelatter. As a po&er press operator, a ran5 an+ 6le employee, he -anhar+ly *e on e<2al terms &ith petitioner RC. As the Co2rt of Appeals sai+, almost al&ays, employees a(ree to any terms of anemployment -ontra-t ?2st to (et employe+ -onsi+erin( that it is

+i8-2lt to 6n+ &or5 (iven their or+inary <2ali6-ations. Therefore, for fail2re of petitioner RC to -omply &ith the ne-essary(2i+elines for a vali+ 6'e+ term employment -ontra-t, it -an *esafely state+ that the aforesai+ -ontra-t si(ne+ *y respon+ent Taripe for a perio+ of 6ve months &as a mere s2*terf2(e to +eny tothe latter a re(2lar stat2s of employment.

Settle+ is the r2le that the primary stan+ar+ of +eterminin( re(2laremployment is the reasona*le -onne-tion *et&een the parti-2lara-tivity performe+ *y the employee in relation to the -as2al*2siness or tra+e of the employer. The -onne-tion -an *e+etermine+ *y -onsi+erin( the nat2re of the &or5 performe+ an+

its relation to the s-heme of the parti-2lar *2siness or tra+e in itsentirety.

Given the fore(oin(, this Co2rt a(rees in the 6n+in(s of the Co2rtof Appeals an+ the NLRC that, in+ee+, respon+ent Taripe, as are-tan(2lar po&er press ma-hine operator, in -har(e of man2fa-t2rin( -overs for fo2r liters re-tan(2lar tin -ans, &ashol+in( a position &hi-h is ne-essary an+ +esira*le in the 2s2al*2siness or tra+e of petitioner RC, &hi-h &as the man2fa-t2re of tin -ans. Therefore, respon+ent Taripe &as a re(2lar employee of petitioner RC *y the nat2re of &or5 he performe+ in the -ompany.

Respon+ent Taripe +oes not fall 2n+er the e'-eptions mentione+ in

";



Arti-le "# of the La*or Co+e, as amen+e+, *e-a2se it &as notproven *y petitioner RC that he &as employe+ only for a spe-i6-pro?e-t or 2n+erta5in( or his employment &as merelyseasonal. Similarly, the position an+ f2n-tion of po&er pressoperator -annot *e sai+ to *e merely seasonal. S2-h position-annot *e -onsi+ere+ as only nee+e+ for a spe-i6- pro?e-t or2n+erta5in( *e-a2se of the very nat2re of the *2siness of petitioner RC. n+ee+, respon+ent Taripe is a re(2lar employee of petitioner RC an+ as s2-h, he -annot *e +ismisse+ from his

employment 2nless there is ?2st or a2thori7e+ -a2se for his+ismissal.

AS)CN roa+-astin( Corp. v. Na7areno,

Septem*er "B, "##BDe a(ree &ith respon+entsJ -ontention that &here a person hasren+ere+ at least one year of servi-e, re(ar+less of the nat2re of the a-tivity performe+, or &here the &or5 is -ontin2o2s orintermittent, the employment is -onsi+ere+ re(2lar as lon( as thea-tivity e'ists, the reason *ein( that a -2stomary appointment isnot in+ispensa*le *efore one may *e formally +e-lare+ as havin(

attaine+ re(2lar stat2s.

As ela*orate+ *y this Co2rt in Ma(salin v. National r(ani7ation of Dor5in( Men

Even &hile the lan(2a(e of la& mi(ht have *een more +e6nitive,the -larity of its spirit an+ intent, i.e., to ens2re a /re(2lar/ &or5erJsse-2rity of ten2re, ho&ever, -an har+ly *e +o2*te+. n +eterminin(&hether an employment sho2l+ *e -onsi+ere+ re(2lar or non)re(2lar, the appli-a*le test is the reasona*le -onne-tion *et&eenthe parti-2lar a-tivity performe+ *y the employee in relation to the2s2al *2siness or tra+e of the employer. The stan+ar+, s2pplie+ *ythe la& itself, is &hether the &or5 2n+erta5en is ne-essary or+esira*le in the 2s2al *2siness or tra+e of the employer, a fa-t that

-an *e assesse+ *y loo5in( into the nat2re of the servi-esren+ere+ an+ its relation to the (eneral s-heme 2n+er &hi-h the*2siness or tra+e is p2rs2e+ in the 2s2al -o2rse. t is +istin(2ishe+from a spe-i6- 2n+erta5in( that is +ivor-e+ from the normala-tivities re<2ire+ in -arryin( on the parti-2lar *2siness or tra+e.2t, altho2(h the &or5 to *e performe+ is only for a spe-i6- pro?e-tor seasonal, &here a person th2s en(a(e+ has *een performin(the ?o* for at least one year, even if the performan-e is not-ontin2o2s or is merely intermittent, the la& +eems the repeate+an+ -ontin2in( nee+ for its performan-e as *ein( s28-ient toin+i-ate the ne-essity or +esira*ility of that a-tivity to the *2sinessor tra+e of the employer. The employment of s2-h person is alsothen +eeme+ to *e re(2lar &ith respe-t to s2-h a-tivity an+ &hile

s2-h a-tivity e'ists.

Not -onsi+ere+ re(2lar employees are /pro?e-t employees,/ the-ompletion or termination of &hi-h is more or less +etermina*le atthe time of employment, s2-h as those employe+ in -onne-tion&ith a parti-2lar -onstr2-tion pro?e-t, an+ /seasonal employees/&hose employment *y its nat2re is only +esira*le for a limite+perio+ of time. Even then, any employee &ho has ren+ere+ at leastone year of servi-e, &hether -ontin2o2s or intermittent, is +eeme+

re(2lar &ith respe-t to the a-tivity performe+ an+ &hile s2-ha-tivity a-t2ally e'ists.

t is of no moment that petitioner hire+ respon+ents as /talents./ The fa-t that respon+ents re-eive+ pre)a(ree+ /talent fees/ instea+of salaries, that they +i+ not o*serve the re<2ire+ o8-e ho2rs, an+that they &ere permitte+ to ?oin other pro+2-tions +2rin( their freetime are not -on-l2sive of the nat2re of their employment.Respon+ents -annot *e -onsi+ere+ /talents/ *e-a2se they are nota-tors or a-tresses or ra+io spe-ialists or mere -ler5s or 2tilityemployees. They are re(2lar employees &ho perform several+iIerent +2ties 2n+er the -ontrol an+ +ire-tion of AS)CNe'e-2tives an+ s2pervisors.

The la& overri+es s2-h -on+itions &hi-h are pre?2+i-ial to theinterest of the &or5er &hose &ea5 *ar(ainin( sit2ation ne-essitatesthe s2--or of the State. Dhat +etermines &hether a -ertainemployment is re(2lar or other&ise is not the &ill or &or+ of theemployer, to &hi-h the &or5er oftentimes a-<2ies-es, m2-h lessthe pro-e+2re of hirin( the employee or the manner of payin( thesalary or the a-t2al time spent at &or5. t is the -hara-ter of thea-tivities performe+ in relation to the parti-2lar tra+e or *2sinessta5in( into a--o2nt all the -ir-2mstan-es, an+ in some -ases thelen(th of time of its performan-e an+ its -ontin2e+ e'isten-e. t iso*vio2s that one year after they &ere employe+ *y petitioner,

respon+ents *e-ame re(2lar employees *y operation of la&.A++itionally, respon+ents -annot *e -onsi+ere+ as pro?e-t orpro(ram employees *e-a2se no evi+en-e &as presente+ to sho&that the +2ration an+ s-ope of the pro?e-t &ere +etermine+ orspe-i6e+ at the time of their en(a(ement. =n+er e'istin( ?2rispr2+en-e, pro?e-t -o2l+ refer to t&o +istin(2isha*le types of a-tivities. 9irst, a pro?e-t may refer to a parti-2lar ?o* or2n+erta5in( that is &ithin the re(2lar or 2s2al *2siness of theemployer, *2t &hi-h is +istin-t an+ separate, an+ i+enti6a*le ass2-h, from the other 2n+erta5in(s of the -ompany. S2-h ?o* or2n+erta5in( *e(ins an+ en+s at +etermine+ or +etermina*le times.Se-on+, the term pro?e-t may also refer to a parti-2lar ?o* or

"



2n+erta5in( that is not &ithin the re(2lar *2siness of the employer.S2-h a ?o* or 2n+erta5in( m2st also *e i+enti6a*ly separate an++istin-t from the or+inary or re(2lar *2siness operations of theemployer. The ?o* or 2n+erta5in( also *e(ins an+ en+s at+etermine+ or +etermina*le times.

The prin-ipal test is &hether or not the pro?e-t employees &ereassi(ne+ to -arry o2t a spe-i6- pro?e-t or 2n+erta5in(, the +2rationan+ s-ope of &hi-h &ere spe-i6e+ at the time the employees &ere

en(a(e+ for that pro?e-t.n this -ase, it is 2n+isp2te+ that respon+ents ha+ -ontin2o2slyperforme+ the same a-tivities for an avera(e of 6ve years. Theirassi(ne+ tas5s are ne-essary or +esira*le in the 2s2al *2siness ortra+e of the petitioner. The persistin( nee+ for their servi-es iss28-ient evi+en-e of the ne-essity an+ in+ispensa*ility of s2-hservi-es to petitionerJs *2siness or tra+e. Dhile len(th of time maynot *e a sole -ontrollin( test for pro?e-t employment, it -an *e astron( fa-tor to +etermine &hether the employee &as hire+ for aspe-i6- 2n+erta5in( or in fa-t tas5e+ to perform f2n-tions &hi-hare vital, ne-essary an+ in+ispensa*le to the 2s2al tra+e or*2siness of the employer.De note f2rther that petitioner +i+ notreport the termination of respon+entsJ employment in theparti-2lar /pro?e-t/ to the epartment of La*or an+ EmploymentRe(ional 8-e havin( ?2ris+i-tion over the &or5pla-e &ithin 3#+ays follo&in( the +ate of their separation from &or5, 2sin( thepres-ri*e+ form on employeesJ termination>+ismissals>s2spensions.

As (leane+ from the re-or+s of this -ase, petitioner itself is not-ertain ho& to -ate(ori7e respon+ents. n its earlier plea+in(s,petitioner -lassi6e+ respon+ents as pro(ram employees, an+ inlater plea+in(s, in+epen+ent -ontra-tors. ro(ram employees, orpro?e-t employees, are +iIerent from in+epen+ent -ontra-tors

*e-a2se in the -ase of the latter, no employer)employeerelationship e'ists.

Pim*erly Clar5 hils. v. Se-retary, Novem*er "3,

"##;n G.R. No. ;;B"@, &e r2le+ as follo&s

% The in+ivi+2al petitioners herein &ho have *een a+?2+(e+ to *ere(2lar employees fall 2n+er the se-on+ -ate(ory. These are theme-hani-s, ele-tri-ians, ma-hinists, ma-hine shop helpers,&areho2se helpers, painters, -arpenters, pipe6tters an+ masons. tis not +isp2te+ that these &or5ers have *een in the employ of

PMERL for more than one year at the time of the 6lin( of the

petition for -erti6-ation ele-tion *y PL=SAN)LALA.

&in( to their len(th of servi-e &ith the -ompany, these &or5ers*e-ame re(2lar employees, *y operation of la&, one year afterthey &ere employe+ *y PMERL thro2(h RANP. Dhile the a-t2alre(2lari7ation of these employees entails the me-hani-al a-t of iss2in( re(2lar appointment papers an+ -omplian-e &ith s2-hother operatin( pro-e+2res as may *e a+opte+ *y the employer, itis more in 5eepin( &ith the intent an+ spirit of the la& to r2le thatthe stat2s of re(2lar employment atta-hes to the -as2al &or5er on

the +ay imme+iately after the en+ of his 6rst year of servi-e. Tor2le other&ise, an+ to instea+ ma5e their re(2lari7ation +epen+enton the happenin( of some -ontin(en-y or the f2l6llment of -ertainre<2irements, is to impose a *2r+en on the employee &hi-h is notsan-tione+ *y la&.

That the 6rst state+ position is the sit2ation -ontemplate+ an+san-tione+ *y la& is f2rther enhan-e+ *y the a*sen-e of astat2tory limitation *efore re(2lar stat2s -an *e a-<2ire+ *y a-as2al employee. The la& is e'pli-it. As lon( as the employee hasren+ere+ at least one year of servi-e, he *e-omes a re(2laremployee &ith respe-t to the a-tivity in &hi-h he is employe+. Thela& +oes not provi+e the <2ali6-ation that the employee m2st 6rst*e iss2e+ a re(2lar appointment or m2st 6rst *e formally +e-lare+

as s2-h *efore he -an a-<2ire a re(2lar stat2s. *vio2sly, &herethe la& +oes not +istin(2ish, no +istin-tion sho2l+ *e +ra&n.

Consi+erin( that an employee *e-omes re(2lar &ith respe-t to thea-tivity in &hi-h he is employe+ one year after he is employe+, there-5onin( +ate for +eterminin( his re(2lari7ation is his hirin( +ate. Therefore, it is error for petitioner Pim*erly to -laim that it isfrom April ", @B that the one)year perio+ sho2l+ *e -o2nte+.Dhile it is a fa-t that the iss2e of re(2lari7ation -ame a*o2t only&hen PL=SAN)LALA 6le+ a petition for -erti6-ation ele-tion, the-on-erne+ employees attaine+ re(2lar stat2s *y operation of la&.

92rther, the (rant of the *ene6t of re(2lari7ation sho2l+ not *e

limite+ to the employees &ho <2estione+ their stat2s *efore thela*or tri*2nal>-o2rt an+ asserte+ their ri(hts0 it sho2l+ also e'ten+to those similarly sit2ate+. There is, th2s, no merit in petitioner1s-ontention that only those &ho presente+ their -ir-2mstan-es of employment to the -o2rts are entitle+ to re(2lari7ation.

enares v. an-ho, April "@, "##n Mercado v" NLRC, the Co2rt r2le+ that seasonal &or5ers +o not*e-ome re(2lar employees *y the mere fa-t that they haveren+ere+ at least one year of servi-e, &hether -ontin2o2s or*ro5en, *e-a2se the proviso in the se-on+ para(raph of Arti-le "#+emar-ates as -as2al employees, all other employees &ho +o not

"@



fall 2n+er the +e6nition of the pre-e+in( para(raph. t +eems asre(2lar employees those -as2al employees &ho have ren+ere+ atleast one year of servi-e re(ar+less of the fa-t that s2-h servi-emay *e -ontin2o2s or *ro5en.

The fa-t2al -ir-2mstan-es o*tainin( in the Mercado -ase, ho&ever,are pe-2liar. n that -ase, the &or5ers &ere en(a(e+ to +o aparti-2lar phase of a(ri-2lt2ral &or5 ne-essary for ri-e an+>ors2(ar-ane pro+2-tion, after &hi-h they &o2l+ *e free to ren+er

servi-es to other farm &or5ers &ho nee+ their servi-es.n -ontrast, in the -ase of 6acienda *ati$a v" National *ederationo' Sugarcane 7or-ers)*ood and 3eneral Trade, respon+entsperforme+ the same tas5s for petitioners every season for severalyears. Th2s, they &ere -onsi+ere+ the latters re(2lar employees fortheir respe-tive tas5s. The fa-t that they +o not &or5 -ontin2o2slyfor one &hole year *2t only for the +2ration of the season +oes not+etra-t from -onsi+erin( them in re(2lar employment sin-e in alitany of -ases this Co2rt has alrea+y settle+ that seasonal &or5ers&ho are -alle+ to &or5 from time to time an+ are temporarily lai+oI +2rin( oI)season are not separate+ from servi-e in that perio+,*2t merely -onsi+ere+ on leave 2ntil re)employe+.

Citin( ?2rispr2+en-e, the Co2rt, in 6acienda *ati$a, -on+ense+ ther2le that the primary stan+ar+ for +eterminin( re(2lar employmentis the reasona*le -onne-tion *et&een the parti-2lar a-tivityperforme+ *y the employee vis))vis the 2s2al tra+e or *2siness of the employer. This -onne-tion -an *e +etermine+ *y -onsi+erin(the nat2re of the &or5 performe+ an+ its relation to the s-heme of the parti-2lar *2siness or tra+e in its entirety. f the employee has*een performin( the ?o* for at least a year, even if the performan-eis not -ontin2o2s an+ merely intermittent, the la& +eems repeate+an+ -ontin2in( nee+ for its performan-e as s28-ient evi+en-e of the ne-essity if not in+ispensa*ility of that a-tivity to the *2siness.

Hen-e, the employment is -onsi+ere+ re(2lar, *2t only &ith respe-tto s2-h a-tivity an+ &hile s2-h a-tivity e'ists.

n this -ase, petitioner ar(2es that respon+ents &ere not herre(2lar employees as they &ere merely pa5iao &or5ers &ho +i+ not&or5 -ontin2o2sly in the s2(ar plantation. They performe+ s2-htas5s as &ee+in(, -2ttin( an+ loa+in( -anes, plantin( -ane points,fertili7in(, -leanin( the +raina(e, et-. These f2n-tions alle(e+ly +onot re<2ire respon+ents +aily presen-e in the s2(ar-ane 6el+ as itis not every+ay that one &ee+s, -2ts -anes or applies fertili7er. ns2pport of her alle(ations, petitioner s2*mitte+ -2ltivo an+ millin(payrolls.

The iss2e, therefore, of &hether respon+ents &ere re(2laremployees of petitioner has *een a+e<2ately +ealt &ith. The la*orar*iter, the NLRC an+ the Co2rt of Appeals have similarly hel+ thatrespon+ents &ere re(2lar employees of petitioner. Sin-e it is asettle+ r2le that the fa-t2al 6n+in(s of <2asi)?2+i-ial a(en-ies&hi-h have a-<2ire+ e'pertise in the matters entr2ste+ to their ?2ris+i-tion are a--or+e+ *y this Co2rt not only respe-t *2t even6nality, &e shall no lon(er +ist2r* this 6n+in(.

Ha-ien+a ino>Horten-ia Star5e v. C2en-a, April, "##n the s2*stantial iss2e of &hether the respon+ents are re(2lar orseasonal employees, the petitioners -onten+ that the CA violate+the +o-trine of stare decisis *y not applyin( the r2lin( inthe Mercado -ase that s2(ar &or5ers are seasonal employees. Dehol+ other&ise. =n+er the +o-trine of stare decisis, &hen a -o2rthas lai+ +o&n a prin-iple of la& as appli-a*le to a -ertain state of fa-ts, it &ill a+here to that prin-iple an+ apply it to all f2t2re -asesin &hi-h the fa-ts are s2*stantially the same. Dhere the fa-ts areessentially +iIerent, ho&ever,stare decisis +oes not apply, for a

perfe-tly so2n+ prin-iple as applie+ to one set of fa-ts mi(ht *eentirely inappropriate &hen a fa-t2al varian-e is intro+2-e+.

The CA -orre-tly fo2n+ that the fa-ts involve+ in this -ase are+iIerent from the Mercado -ase0 therefore, the r2lin( in that -ase-annot *e applie+ to the -ase at *ar, th2s

De +o not 6n+ the -on-ept of stare decisis relevant in the -ase at*en-h. 9or altho2(h in the Mer-a+o -ase, the S2preme Co2rt hel+the petitioners &ho &ere s2(ar &or5ers not to *e re(2lar *2tseasonal &or5ers, nevertheless, the same +oes not operate toa*an+on the settle+ +o-trine of the Hi(h Co2rt that s2(ar &or5ersare -onsi+ere+ re(2lar an+ permanent farm &or5ers of a s2(arplantation o&ner, the reason *ein( that there are fa-ts presentthat are pe-2liar to the Mer-a+o -ase. The +isparity in fa-ts*et&een the Mer-a+o -ase an+ the instant -ase is *est e'empli6e+*y the fa-t that the former +e-ision r2le+ on the stat2s of employment of farm la*orers, &ho, as fo2n+ *y the la*or ar*iter,&or5 only for a +e6nite perio+ for a farm &or5er, after &hi-h theyoIer their servi-es to other farm o&ners, -onsi+erin( the area in<2estion *ein( -omparatively small, -omprisin( of seventeen an+a half !;$ he-tares of lan+, s2-h that the plantin( of ri-e an+s2(ar -ane thereon -o2l+ not possi*ly entail a &hole yearoperation. The herein -ase presents a +iIerent fa-t2al -on+ition asthe enormity of the si7e of the s2(ar ha-ien+a of petitioner, &ith anarea of t&o h2n+re+ thirty)si' !"3B$ he-tares, simply +o not allo&for private respon+ents to ren+er &or5 only for a +e6nite perio+.

3#



n+ee+, in a n2m*er of -ases, the Co2rt has re-o(ni7e+ the pe-2liarfa-ts atten+ant in the Mercado -ase. n Abasolo v" NLRC, an+earlier, in Phili((ine Tobacco *lue)Curing 8 Redr.ing Cor(oration v"NLRC, the Co2rt ma+e the follo&in( o*servations

n Mercado, altho2(h respon+ent -onstantly availe+ herself of thepetitioners servi-es from year to year, it &as -lear from the fa-tstherein that they &ere not in her re(2lar employ. etitioners thereinperforme+ +iIerent phases of a(ri-2lt2ral &or5 in a (iven year.

Ho&ever, +2rin( that perio+, they &ere free to &or5 for other farmo&ners, an+ in fa-t they +i+. n other &or+s, they &or5e+ forrespon+ent, *2t &ere nevertheless free to -ontra-t their servi-es&ith other farm o&ners. The Co2rt &as th2s emphati- &hen it r2le+that petitioners &ere mere pro?e-t employees, &ho -o2l+ *e hire+*y other farm o&ners.

Re-ently, the Co2rt reiterate+ the same o*servations in 6acienda*ati$a v" National *ederation o' Sugarcane 7or-ers)*ood and3eneral Trade an+ a++e+ that the petitioners in the Mercado -ase&ere not hire+ re(2larly an+ repeate+ly for the same phase>s of a(ri-2lt2ral &or5, *2t on an+ oI for any sin(le phase thereof.

n this -ase, there is no evi+en-e on re-or+ that the sameparti-2lars are present. The petitioners +i+ not present anyevi+en-e that the respon+ents &ere re<2ire+ to perform -ertainphases of a(ri-2lt2ral &or5 for a +e6nite perio+ of time. Altho2(hthe petitioners assert that the respon+ents ma+e their servi-esavaila*le to the nei(h*orin( haciendas, the re-or+s +o not,ho&ever, s2pport s2-h assertion.

The primary stan+ar+ for +eterminin( re(2lar employment is thereasona*le -onne-tion *et&een the parti-2lar a-tivity performe+ *ythe employee in relation to the 2s2al tra+e or *2siness of theemployer. There is no +o2*t that the respon+ents &ere performin(&or5 ne-essary an+ +esira*le in the 2s2al tra+e or *2siness of anemployer. Hen-e, they -an properly *e -lassi6e+ as re(2laremployees.

9or respon+ents to *e e'-l2+e+ from those -lassi6e+ as re(2laremployees, it is not eno2(h that they perform &or5 or servi-es thatare seasonal in nat2re. They m2st have *een employe+ onl. 'or theduration o' one season. Dhile the re-or+s s28-iently sho& that therespon+ents &or5 in the hacienda &as seasonal in nat2re, there&as, ho&ever, no proof that they &ere hire+ for the +2ration of oneseason only. n fa-t, the payrolls, s2*mitte+ in evi+en-e *y thepetitioners, sho& that they availe+ the servi-es of the respon+entssin-e @@. A*sent any proof to the -ontrary, the (eneral r2le of

re(2lar employment sho2l+, therefore, stan+. t *ears stressin( thatthe employer has the *2r+en of provin( the la&f2lness of hisemployees +ismissal.

9ilipinas re)fa*ri-ate+ 2il+in( Systems

!9ilSystems$ v. 2ente,Dith parti-2lar referen-e to the -onstr2-tion in+2stry, to &hi-hetitioner 9ilsystems *elon(s, epartment !of La*or an+

Employment$ r+er No. @, Series of @@3, states". Classi6-ation of employees. The employees in the -onstr2-tionin+2stry are (enerally -ate(ori7e+ as a$ pro?e-t employees an+ *$non)pro?e-t employees. ro?e-t employees are those employe+ in-onne-tion &ith a parti-2lar -onstr2-tion pro?e-t or phase thereof an+ &hose employment is -o)termino2s &ith ea-h pro?e-t or phaseof the pro?e-t to &hi-h they are assi(ne+.

' ' ' ' ' ' ' ' '

"." n+i-ators of pro?e-t employment. Either one or more of thefollo&in( -ir-2mstan-es, amon( other, may *e -onsi+ere+ asin+i-ators that an employee is a pro?e-t employee.

!a$ The +2ration of the spe-i6->i+enti6e+ 2n+erta5in( for &hi-h the&or5er is en(a(e+ is reasona*ly +etermina*le.

!*$ S2-h +2ration, as &ell as the spe-i6- &or5>servi-e to *eperforme+, is +e6ne+ in an employment a(reement an+ is ma+e-lear to the employee at the time of hirin(.

!-$ The &or5>servi-e performe+ *y the employee is in -onne-tion&ith the parti-2lar pro?e-t>2n+erta5in( for &hi-h he is en(a(e+.

!+$ The employee, &hile not employe+ an+ a&aitin( en(a(ement,is free to oIer his servi-es to any other employer.

!e$ The termination of his employment in the parti-2larpro?e-t>2n+erta5in( is reporte+ to the epartment of La*or an+

Employment !LE$ Re(ional 8-e havin( ?2ris+i-tion over the&or5pla-e &ithin 3# +ays follo&in( the +ate of his separation from&or5, 2sin( the pres-ri*e+ form on employeesterminations>+ismissals>s2spensions.

!f$ An 2n+erta5in( in the employment -ontra-t *y the employer topay -ompletion *on2s to the pro?e-t employee as pra-ti-e+ *ymost -onstr2-tion -ompanies.

The a*ove)<2ote+ provisions ma5e it -lear that a pro?e-t employeeis one &hose employment has *een 6'e+ for a spe-i6- pro?e-t or2n+erta5in( the -ompletion or termination of &hi-h has *een+etermine+ at the time of the en(a(ement of the employee or

&here the &or5 or servi-es to *e performe+ is seasonal in nat2re3



an+ the employment is for the +2ration of the season. n D"M"Consun0i Inc" v" NLRC, this Co2rt has r2le+ that the len(th of servi-e of a pro?e-t employee is not the -ontrollin( test of employment ten2re *2t &hether or not the employment has *een6'e+ for a spe-i6- pro?e-t or 2n+erta5in( the -ompletion ortermination of &hi-h has *een +etermine+ at the time of theen(a(ement of the employee.

n the present -ase, the -ontra-ts of employment of 2ente attest

to the fa-t that he &as hire+ for spe-i6- pro?e-ts. His employment&as -otermino2s &ith the -ompletion of the pro?e-ts for &hi-h heha+ *een hire+. Those -ontra-ts e'pressly provi+e+ that his ten2reof employment +epen+e+ on the +2ration of any phase of thepro?e-t or on the -ompletion of the -onstr2-tion pro?e-ts.92rthermore, petitioners re(2larly s2*mitte+ to the la*or+epartment reports of the termination of servi-es of pro?e-t&or5ers. S2-h -omplian-e &ith the reportorial re<2irement -on6rmsthat respon+ent &as a pro?e-t employee.

Dith re(ar+ spe-i6-ally to the last employment -ontra-t e'e-2te+*y the parties, a -ontra-t that respon+ent a--epte+ on A2(2st "B,@@B, &e 6n+ that he &or5e+ at the site of the Dorl+ 9inan-e la7a

pro?e-t. That he +i+ is amply proven *y the A8+avit of E+2ar+oria(as, another employee &ho &as also statione+ at the Dorl+9inan-e la7a pro?e-t, as &ell as *y respon+ents Travel Trip Reports.

92rthermore, respon+ents Complaint spe-i6e+ the a++ress of 9ilsystems, as B@ N=STRA RA, .AAN .C., *2t spe-i6e+ hispla-e of &or5 as R:ECT T R:ECT. These statements, -o2ple+&ith the other pie-es of evi+en-e presente+ *y petitioners,-onvin-es the Co2rt that )) -ontrary to the s2*se<2ent -laims of respon+ent )) he performe+ his &or5 at the pro?e-t site, not at the-ompanys premises.

That his employment -ontra-t +oes not mention parti-2lar +atesthat esta*lish the spe-i6- +2ration of the pro?e-t +oes not pre-l2+ehis -lassi6-ation as a pro?e-t employee. This fa-t is -lear from theprovisions of Cla2se 3.3!a$ of epartment r+er No. @, &hi-hstates

a$ ro?e-t employees &hose a((re(ate perio+ of -ontin2o2semployment in a -onstr2-tion -ompany is at least one year shall*e -onsi+ere+ re(2lar employees, in the absence o' a da. certainagreed u(on b. the (arties 'or the ter$ination o' their relationshi( .ro?e-t employees &ho have *e-ome re(2lar shall *e entitle+ toseparation pay.

A da. as used herein is understood to be that %hich $ust

necessaril. co$e although is $a. not be -no%n e2actl. %hen"

This $eans that %here the &nal co$(letion o' a (ro0ect or (hasethereo' is in 'act deter$inable and the e2(ected co$(letion is$ade -no%n to the e$(lo.ee such (ro0ect e$(lo.ee $a. not beconsidered regular , not&ithstan+in( the one)year +2ration of employment in the pro?e-t or phase thereof or the one)year+2ration of t&o or more employments in the same pro?e-t or phaseof the o*?e-t. !tali-i7ation an+ emphasis s2pplie+$

Evi+ently, altho2(h the employment -ontra-t +i+ not state aparti-2lar +ate, it +i+ spe-ify that the termination of the parties

employment relationship &as to *e on a +ay -ertain )) the +ay&hen the phase of &or5 terme+ Liftin( U Ha2lin( of Materials forthe Dorl+ 9inan-e la7a pro?e-t &o2l+ *e -omplete+. Th2s,respon+ent -annot *e -onsi+ere+ to have *een a re(2lar employee.He &as a pro?e-t employee.

That he &as employe+ &ith etitioner 9ilsystems for ten yearsin various pro?e-ts +i+ not i(so 'acto ma5e him a re(2lar employee,-onsi+erin( that the +e6nition of re(2lar employment in Arti-le "#of the La*or Co+e ma5es a spe-i6- e'-eption &ith respe-t topro?e-t employment. The mere rehirin( of respon+ent on a pro?e-t)to)pro?e-t *asis +i+ not -onfer 2pon him re(2lar employment

stat2s. The pra-ti-e &as +i-tate+ *y the pra-ti-al -onsi+erationthat e'perien-e+ -onstr2-tion &or5ers are more preferre+. t +i+not -han(e his stat2s as a pro?e-t employee.

St. MaryJs =niversity v. CA, Mar-h , "##Se-tion @3 of the @@" Man2al of Re(2lations for rivate S-hools,provi+es that f2ll)time tea-hers &ho have satisfa-torily -omplete+their pro*ationary perio+ shall *e -onsi+ere+ re(2lar orpermanent. 92rthermore, the pro*ationary perio+ shall not *e morethan si' -onse-2tive re(2lar semesters of satisfa-tory servi-e forthose in the tertiary level. Th2s, the follo&in( re<2isites m2st-on-2r *efore a private s-hool tea-her a-<2ires permanent stat2s

!$ the tea-her is a f2ll)time tea-her0 !"$ the tea-her m2st haveren+ere+ three -onse-2tive years of servi-e0 an+ !3$ s2-h servi-em2st have *een satisfa-tory.

n the present -ase, petitioner -laims that private respon+entla-5e+ the re<2isite years of servi-e &ith the 2niversity an+ alsothe appropriate <2ality of his servi-e, i"e. , it is less thansatisfa-tory. The *asi- <2estion, ho&ever, is &hether respon+ent isa f2ll)time tea-her.

Se-tion 4 of the @@" Man2al of Re(2lations for rivate S-hoolsprovi+es that f2ll)time a-a+emi- personnel are those meetin( allthe follo&in( re<2irements

3"



a. Dho possess at least the minim2m a-a+emi- <2ali6-ationspres-ri*e+ *y the epartment 2n+er this Man2al for all a-a+emi-personnel0

*. Dho are pai+ monthly or ho2rly, *ase+ on the re(2lar tea-hin(loa+s as provi+e+ for in the poli-ies, r2les an+ stan+ar+s of theepartment an+ the s-hool0

-. Dhose total &or5in( +ay of not more than ei(ht ho2rs a +ay is+evote+ to the s-hool0

+. Dho have no other rem2nerative o--2pation else&here re<2irin(re(2lar ho2rs of &or5 that &ill -onQi-t &ith the &or5in( ho2rs inthe s-hool0 an+

e. Dho are not tea-hin( f2ll)time in any other e+2-ationalinstit2tion.

All tea-hin( personnel &ho +o not meet the fore(oin( <2ali6-ationsare -onsi+ere+ part)time.

A per2sal of the vario2s or+ers of the then epartment of E+2-ation, C2lt2re an+ Sports pres-ri*in( tea-hin( loa+s sho&sthat the re(2lar f2ll)time loa+ of a fa-2lty mem*er is in the ran(e of 2nits to "4 2nits a semester or term, +epen+in( on the -o2rses

ta2(ht. art)time instr2-tors -arry a loa+ of not more than " 2nits.

The evi+en-e on re-or+ reveals that, e'-ept for fo2r non)-onse-2tive terms, respon+ent (enerally -arrie+ a loa+ of t&elve2nits or less from @@" to @@@. There is also no evi+en-e that heperforme+ other f2n-tions for the s-hool &hen not tea-hin(. These(ive the impression that he &as merely a part)timetea-her. Altho2(h this is not -on-l2sive sin-e there are f2ll)timetea-hers &ho are allo&e+ *y the 2niversity to ta5e fe&er loa+, inthis -ase, respon+ent +i+ not sho& that he *elon(e+ to the latter(ro2p, even after the 2niversity presente+ his tea-hin( re-or+. Ditha tea-hin( loa+ of t&elve 2nits or less, he -o2l+ not -laim he

&or5e+ for the n2m*er of ho2rs +aily as pres-ri*e+ *y Se-tion 4 of the Man2al. 92rthermore, the re-or+s also in+2*ita*ly sho& he &asemploye+ else&here from @@3 to @@B.

Sin-e there is no sho&in( that respon+ent &or5e+ on a f2ll)time*asis for at least three years, he -o2l+ not have a-<2ire+ apermanent stat2s. A part)time employee +oes not attain permanentstat2s no matter ho& lon( he has serve+ the s-hool. An+ as a part)timer, his servi-es -o2l+ *e terminate+ *y the s-hool &itho2t *ein(hel+ lia*le for ille(al +ismissal. Moreover, the re<2irement of t&in)noti-e appli-a*le only to re(2lar or permanent employees -o2l+ not*e invo5e+ *y respon+ent.

et, this is not to say that part)time tea-hers may not have se-2rity

of ten2re. The s-hool -o2l+ not la&f2lly terminate a part)timer*efore the en+ of the a(ree+ perio+ &itho2t ?2st -a2se. 2t on-ethe perio+, semester, or term en+s, there is no o*li(ation on thepart of the s-hool to rene& the -ontra-t of employment for the ne'tperio+, semester, or term.

n this -ase, the -ontra-t of employment of the respon+ent &as notpresente+. Ho&ever, ?2+i-ial noti-e may *e ta5en that -ontra-ts of employment of part)time tea-hers are (enerally on a per semester

or term *asis. n the a*sen-e of a spe-i6- a(reement on the perio+of the -ontra-t of employment, it is pres2me+ to *e for a term orsemester. After the en+ of ea-h term or semester, the s-hool +oesnot have any o*li(ation to (ive tea-hin( loa+ to ea-h an+ everypart)time tea-her. That petitioner +i+ not (ive any tea-hin(assi(nment to the respon+ent +2rin( a (iven term or semester,even if fa-t2ally tr2e, +i+ not amo2nt to an a-tiona*le violation of respon+ents ri(hts. t +i+ not amo2nt to ille(al +ismissal of thepart)time tea-her.

The la&, &hile prote-tin( the ri(hts of the employees, a2thori7esneither the oppression nor +estr2-tion of the employer. An+ &henthe la& tilts the s-ale of ?2sti-e in favor of la*or, the s-ale sho2l+

never *e so tilte+ if the res2lt &o2l+ *e an in?2sti-e to theemployer.

Mer-a+o vs. AMA B SCRA ", April 3, "##A reality &e have to fa-e in the -onsi+eration of employment onpro*ationary stat2s of tea-hin( personnel is that they are not(overne+ p2rely *y the La*or Co+e. The La*or Co+eis supplemented &ith respe-t to the perio+ of pro*ation *y spe-ialr2les fo2n+ in the Man2al of Re(2lations for rivate S-hools. n thematter of probationary period , Se-tion @" of these re(2lationsprovi+es

Se-tion @"" Probationar. Period" 6ub(ect in all instances tocompliance with the +epartment and school re#uirements ,the pro*ationary perio+ for a-a+emi- personnel shall not *e morethan three !3$ -onse-2tive years of satisfa-tory servi-e for those inthe elementary an+ se-on+ary levels, si' !B$ -onse-2tive re(2larsemesters of satisfa-tory servi-e for those in the tertiary level,an+ nine 7:8 consecutive trimesters of satisfactory servicefor those in the tertiary level where collegiate courses areo9ered on a trimester basis$ KEmphasis s2pplie+

The CA pointe+ this o2t in its +e-ision !as the NLRC also +i+$, an+&e -on6rm the -orre-tness of this -on-l2sion. ther than on theperio+, the follo&in( <2ote+ portion of Arti-le " of the La*or

Co+e still f2lly applies33



' ' ' The servi-es of an employee &ho has *een en(a(e+ on apro*ationary *asis may *e terminate+ for a ust cause &hen hefails to <2alify as a re(2lar employee in a--or+an-e &ithreasonable standards made !nown by the employer to theemployee at the time of his engagement . An employee &ho isallo&e+ to &or5 after a pro*ationary perio+ shall *e -onsi+ere+ are(2lar employee. KEmphasis s2pplie+

The 2se of employment for 6'e+ perio+s +2rin( the tea-herspro*ationary perio+ is li5e&ise an a--epte+ pra-ti-e in the tea-hin(

profession. De mentione+ this in passin( in Magis 9oung AchieversLearning Center v" Adelaida P" Manalo al*eit a -ase that involve+elementary, not tertiary, e+2-ation, an+ hen-e spo5e of a s-hoolyear rather than a semester or a trimester. De note+ in this -ase

*he common practice is for the employer and the teacherto enter into a contract! e9ective for one school year$ At theen+ of the s-hool year, the employer has the option not to rene&the -ontra-t, parti-2larly -onsi+erin( the tea-hers performan-e. f the -ontra-t is not rene&e+, the employment relationshipterminates. f the -ontra-t is rene&e+, 2s2ally for another s-hoolyear, the pro*ationary employment -ontin2es. A(ain, at the en+ of that perio+, the parties may opt to rene& or not to rene& the

-ontra-t. f rene&e+, this se-on+ rene&al of the -ontra-t foranother s-hool year &o2l+ then *e the last year sin-e it &o2l+ *ethe thir+ s-hool year of pro*ationary employment. At the end of this third year! the employer may now decide whether toe%tend a permanent appointment to the employee!primarily on the basis of the employee having met thereasonable standards of competence and e;ciency set bythe employer$&or the entire duration of this three)yearperiod! the teacher remains under probation$ <pon thee%piration of his contract of employment! being simply onprobation! he cannot automatically claim security of tenureand compel the employer to renew his employmentcontract$ t is &hen the yearly -ontra-t is rene&e+ for the thir+time that Se-tion @3 of the Man2al *e-omes operative, an+ thetea-her then is entitle+ to re(2lar or permanent employmentstat2s.

t is important that the -ontra-t of pro*ationary employmentspe-ify the perio+ or term of its eIe-tivity. The fail2re to stip2lateits pre-ise +2ration -o2l+ lea+ to the inferen-e that the -ontra-t is*in+in( for the f2ll three)year pro*ationary perio+.

De have lon( settle+ the vali+ity of a 6'e+)term -ontra-t in the-ase #rent School Inc" v" :a$ora that AMACC-ite+. Si(ni6-antly, #rent happene+ in a s-hool settin(. Care sho2l+*e ta5en, ho&ever, in rea+in( #rent in the -onte't of this -aseas #rent +i+ not involve any pro*ationary employment iss2e0 it

+ealt p2rely an+ simply &ith the vali+ity of a 6'e+)termemployment 2n+er the terms of the La*or Co+e, then ne&ly iss2e+an+ &hi-h +oes not e'pressly -ontain a provision on 6'e+)termemployment.

Last *2t not the least fa-tor in the a-a+emi- &orl+, is that a s-hoolen?oys a-a+emi- free+om a (2arantee that en?oys prote-tion fromthe Constit2tion no less. Se-tion !"$ Arti-le VF of the Constit2tion(2arantees all instit2tions of hi(her learnin( a-a+emi- free+om.

The instit2tional a-a+emi- free+om in-l2+es the ri(ht of the s-hoolor -olle(e to +e-i+e an+ a+opt its aims an+ o*?e-tives, an+ to+etermine ho& these o*?e-tions -an *est *e attaine+, free fromo2tsi+e -oer-ion or interferen-e, save possi*ly &hen the overri+in(p2*li- &elfare -alls for some restraint. The essential free+omss2*s2me+ in the term a-a+emi- free+om en-ompass the free+omof the s-hool or -olle(e to +etermine for itself !$ &ho may tea-h0!"$ &ho may *e ta2(ht0 !3$ ho& lessons shall *e ta2(ht0 an+ !4$&ho may *e a+mitte+ to st2+y.

AMACCs ri(ht to a-a+emi- free+om is parti-2larly important in thepresent -ase, *e-a2se of the ne& s-reenin( (2i+elines for AMACC

fa-2lty p2t in pla-e for the s-hool year "###)"##. De a(ree &iththe CA that AMACC has the inherent ri(ht to esta*lish hi(hstan+ar+s of -ompeten-y an+ e8-ien-y for its fa-2lty mem*ers inor+er to a-hieve an+ maintain a-a+emi- e'-ellen-e. The s-hoolsprero(ative to provi+e stan+ar+s for its tea-hers an+ to +etermine&hether or not these stan+ar+s have *een met is in a--or+an-e&ith a-a+emi- free+om that (ives the e+2-ational instit2tion theri(ht to -hoose &ho sho2l+ tea-h. n Pea v" National Labor Relations Co$$ission, &e emphasi7e+

t is the prero(ative of the s-hool to set hi(h stan+ar+s of e8-ien-yfor its tea-hers sin-e <2ality e+2-ation is a man+ate of theConstit2tion.As lon( as the stan+ar+s 6'e+ are reasona*le an+ not

ar*itrary, -o2rts are not at li*erty to set them asi+e. S-hools-annot *e re<2ire+ to a+opt stan+ar+s &hi-h *arely satisfy -riteriaset for (overnment re-o(nition.

The same a-a+emi- free+om (rants the s-hool the a2tonomy to+e-i+e for itself the terms an+ -on+itions for hirin( its tea-her,s2*?e-t of -o2rse to the overar-hin( limitations 2n+er the La*orCo+e. A-a+emi- free+om, too, is not the only le(al *asis forAMACCs iss2an-e of s-reenin( (2i+elines. The a2thority to hire isli5e&ise -overe+ an+ prote-te+ *y its mana(ement prero(ative theri(ht of an employer to re(2late all aspe-ts of employment, s2-h ashirin(, the free+om to pres-ri*e &or5 assi(nments, &or5in(metho+s, pro-ess to *e follo&e+, re(2lation re(ar+in( transfer of

34



employees, s2pervision of their &or5, lay)oI an+ +is-ipline, an++ismissal an+ re-all of &or5ers. Th2s, AMACC has every ri(ht to+etermine for itself that it shall 2se 6'e+)term employment-ontra-ts as its me+i2m for hirin( its tea-hers. t also a-te+ &ithinthe terms of the Man2al of Re(2lations for rivate S-hools &hen itre-o(ni7e+ the petitioners to *e merely on pro*ationary stat2s 2pto a ma'im2m of nine trimesters.

The e'isten-e of the term)to)term -ontra-ts -overin( the

petitioners employment is not +isp2te+, nor is it +isp2te+ that they&ere on pro*ationary stat2s not (er$anent or regular status fromthe time they &ere employe+ on May ", @@ an+ 2ntil thee'piration of their Tea-hin( Contra-ts on Septem*er ;, "###. As theCA -orre-tly fo2n+, their tea-hin( stints only -overe+ a perio+ of atleast seven !;$ -onse-2tive trimesters or t&o !"$ years an+ three!3$ months of servi-e. "his case, however, brings to the forethe essential question of which, between the two factorsa#ecting employment, should prevail given $%$&&s

position that the teachers contracts expired and it had theright not to renew them. n other &or+s, sho2l+ the tea-herspro*ationary stat2s *e +isre(ar+e+ simply *e-a2se the -ontra-ts

&ere 6'e+)termW The provision on employment on pro*ationary stat2s 2n+er theLa*or Co+e is a primary e'ample of the 6ne *alan-in( of interests*et&een la*or an+ mana(ement that the Co+e has instit2tionali7e+p2rs2ant to the 2n+erlyin( intent of the Constit2tion.

n the one han+, employment on pro*ationary stat2s aIor+smana(ement the -han-e to f2lly s-r2tini7e the tr2e &orth of hire+personnel *efore the f2ll for-e of the se-2rity of ten2re (2aranteeof the Constit2tion -omes into play. ase+ on the stan+ar+s set atthe start of the pro*ationary perio+, mana(ement is (iven the&i+est opport2nity +2rin( the pro*ationary perio+ to re?e-t hirees

&ho fail to meet its o%n ado(ted but reasonable standards. Thesestan+ar+s, to(ether &ith the 0ust and authori+ed causes 'or ter$ination o' e$(lo.$ent the Labor Code e2(ressl. (rovides, arethe (ro2n+s availa*le to terminate the employment of a tea-her onpro*ationary stat2s. 9or e'ample, the s-hool may imposereasona*ly stri-ter atten+an-e or report -omplian-e re-or+s ontea-hers on pro*ation, an+ re?e-t a pro*ationary tea-her for failin(in this re(ar+, altho2(h the same atten+an-e or -omplian-e re-or+may not *e re<2ire+ for a tea-her alrea+y on permanent stat2s. Atthe same time, the same ?2st an+ a2thori7es -a2ses for +ismissal2n+er the La*or Co+e apply to pro*ationary tea-hers, so that theymay *e the 6rst to *e lai+)oI if the s-hool +oes not have eno2(h

st2+ents for a (iven semester or trimester. Termination of employment on this *asis is an a2thori7e+ -a2se 2n+er the La*orCo+e.

La*or, for its part, is (iven the prote-tion +2rin( the pro*ationaryperio+ of 5no&in( the -ompany stan+ar+s the ne& hires have tomeet +2rin( the pro*ationary perio+, and to be 0udged on the basiso' these standards, asi+e from the 2s2al stan+ar+s appli-a*le toemployees after they a-hieve permanent stat2s. =n+er the terms

of the La*or Co+e, these stan+ar+s sho2l+ *e ma+e 5no&n to thetea-hers on pro*ationary stat2s at the start of their pro*ationaryperio+, or at the very least 2n+er the -ir-2mstan-es of the present-ase, at the start of the semester or the trimester +2rin( &hi-h thepro*ationary stan+ar+s are to *e applie+. /' critical i$(ortance ininvo-ing a 'ailure to $eet the (robationar. standards is that theschool should sho% as a matter of due process ho% thesestandards have been a((lied. This is eIe-tively the se-on+ noti-ein a +ismissal sit2ation that the la& re<2ires as a +2e pro-ess(2arantee s2pportin( the se-2rity of ten2re provision, an+ is inf2rtheran-e, too, of the *asi- r2le in employee +ismissal that theemployer -arries the *2r+en of ?2stifyin( a +ismissal. These r2les

ens2re -omplian-e &ith the limite+ se-2rity of ten2re (2aranteethe la& e'ten+s to pro*ationary employees.

Dhen 6'e+)term employment is *ro2(ht into play 2n+er the a*ovepro*ationary perio+ r2les, the sit2ation as in the present -ase mayat 6rst *l2sh loo5 m2++le+ as 6'e+)term employment is in itself avali+ employment mo+e 2n+er hilippine la& an+ ?2rispr2+en-e. The -onQi-t, ho&ever, is more apparent than real&hen the respe-tive nat2re of 6'e+)term employment an+ of employment on pro*ationary stat2s are -losely e'amine+.

The 6'e+)term -hara-ter of employment essentially refers to the period a(ree+ 2pon *et&een the employer an+ the employee0

employment e'ists only for the +2ration of the term an+ en+s on itso&n &hen the term e'pires. n a sense, employment onpro*ationary stat2s also refers to a perio+ *e-a2se of the te-hni-almeanin( (robation -arries in hilippine la*or la& a ma'im2mperio+ of si' months, or in the a-a+eme, a perio+ of three years forthose en(a(e+ in tea-hin( ?o*s. Their similarity en+s there,ho&ever, *e-a2se of the overri+in( meanin( that *ein( on (robation -onnotes, i"e" a pro-ess of testin( an+ o*servin( the-hara-ter or a*ilities of a person &ho is ne& to a role or ?o*.

=n+erstoo+ in the a*ove sense, the essentiall. (rotective character o' (robationar. status 'or $anage$ent -an rea+ily *eappre-iate+. 2t this same prote-tive -hara-ter (ives rise to the

3



-o2ntervailin( *2t e<2ally prote-tive r2le that the pro*ationaryperio+ -an only last for a spe-i6- ma'im2m perio+ an+ 2n+erreasona*le, &ell)lai+ an+ properly -omm2ni-ate+stan+ar+s. ther&ise state+, &ithin the perio+ of the pro*ation, anyemployer move based on the (robationar. standards an+ aIe-tin(the -ontin2ity of the employment m2st stri-tly -onform to thepro*ationary r2les.

=n+er the (iven fa-ts &here the s-hool year is +ivi+e+ into

trimesters, the s-hool apparently 2tili7es its 6'e+)term -ontra-ts asa -onvenient arran(ement +i-tate+ *y the trimestral system an+not *e-a2se the &or5pla-e parties really inten+e+ to limit theperio+ of their relationship to any 6'e+ term an+ to 6nish thisrelationship at the en+ of that term. f &e pier-e the veil, so tospea5, of the parties so)-alle+ 6'e+)term employment -ontra-ts,&hat 2n+enia*ly -omes o2t at the -ore is a 6'e+)term -ontra-t-onveniently 2se+ *y the s-hool to +e6ne an+ re(2late its relations&ith its tea-hers during their (robationar. (eriod.

To *e s2re, nothin( is ille(itimate in +e6nin( the s-hool)tea-herrelationship in this manner. The s-hool, ho&ever, -annot for(et thatits system of 6'e+)term -ontra-t is a system that operates +2rin(

the pro*ationary perio+ an+ for this reason is s2*?e-t to the termsof Arti-le " of the La*or Co+e. 'nless this reconciliation ismade, the requirements of this $rticle on probationary status would be fully negated as the school may freely choose not to renew contracts simply because their termshave expired."he inevitable e#ect of course is to wrec! thescheme that the &onstitution and the Labor &odeestablished to balance relationships between labor and management.

Given the -lear -onstit2tional an+ stat2tory intents, &e -annot *2t-on-l2+e that in a sit2ation &here the pro*ationary stat2s overlaps

&ith a 6'e+)term -ontra-t not s(eci&call. used 'or the &2ed ter$ it o5ers, Arti-le " sho2l+ ass2me prima-y an+ the 6'e+)perio+-hara-ter of the -ontra-t m2st (ive &ay. This -on-l2sion isimmeas2ra*ly stren(thene+ *y the petitioners an+ the AMACCshar+ly -on-eale+ e'pe-tation that the employment on pro*ation-o2l+ lea+ to permanent stat2s, an+ that the -ontra-ts arerene&a*le 2nless the petitioners fail to pass the s-hools stan+ar+s.

To hi(hli(ht &hat &e mean *y a 6'e+)term -ontra-t s(eci&call. used 'or the &2ed ter$ it o5ers, a repla-ement tea-her, fore'ample, may *e -ontra-te+ for a perio+ of one yearto te$(oraril. ta5e the pla-e of a permanent tea-her on a one)yearst2+y leave. The e'piration of the repla-ement tea-hers -ontra-te+

term, 2n+er the -ir-2mstan-es, lea+s to no pro*ationary stat2simpli-ations as she &as never employe+ on pro*ationary *asis0 heremployment is for a spe-i6- p2rpose &ith parti-2lar fo-2s on theterm an+ &ith every intent to en+ her tea-hin( relationship &ith thes-hool 2pon e'piration of this term.

f the s-hool &ere to apply the pro*ationary stan+ar+s !as in fa-t itsays it +i+ in the present -ase$, these stan+ar+s m2st not only *ereasona*le *2t m2st have also *een -omm2ni-ate+ to the tea-hers

at the start of the pro*ationary perio+, or at the very least, at thestart of the perio+ &hen they &ere to *e applie+. These terms, inaddition to those e2(ressl. (rovided b. the Labor Code, &o2l+serve as the ?2st -a2se for the termination of the pro*ationary-ontra-t. As e'plaine+ a*ove, the +etails of this 6n+in( of ?2st-a2se m2st *e -omm2ni-ate+ to the aIe-te+ tea-hers as a matterof +2e pro-ess.

AMACC, *y its s2*missions, a+mits that it +i+ not rene& thepetitioners -ontra-ts *e-a2se they faile+ to pass the erforman-eAppraisal System for Tea-hers !AST$ an+ other re<2irements forre(2lari7ation that the s-hool 2n+erta5es to maintain its hi(ha-a+emi- stan+ar+s. The evi+en-e is 2n-lear on the e'a-t terms of

the stan+ar+s, altho2(h the s-hool also a+mits that these &erestan+ar+s 2n+er the G2i+elines on the mplementation of AMACC9a-2lty lantilla p2t in pla-e at the start of s-hool year "###)"##.

Dhile &e -an (rant that the stan+ar+s &ere +2ly -omm2ni-ate+ tothe petitioners an+ -o2l+ *e applie+ *e(innin( the trimester of the s-hool year "###)"##, (larin( an+ very *asi- (aps in thes-hools evi+en-e still e'ist. The e'a-t terms of the stan+ar+s &erenever intro+2-e+ as evi+en-e0 neither +oes the evi+en-e sho& ho&these stan+ar+s &ere applie+ to the petitioners. Ditho2t thesepie-es of evi+en-e !eIe-tively, the 6n+in( of ?2st -a2se for the non)rene&al of the petitioners -ontra-ts$, &e have nothin( to -onsi+er

an+ pass 2pon as vali+ or invali+ 'or each o' the (etitioners" nevita*ly, the non)rene&al !or eIe-tively, thetermination of employment of employees on pro*ationary stat2s$la-5s the s2pportin( 6n+in( of ?2st -a2se that the la& re<2ires an+,hen-e, is ille(al.

Ro*insons Galleria v. Ran-he7, G.R. No. ;;@3;

:an. @, "# There is pro*ationary employment &hen the employee 2pon hisen(a(ement is ma+e to 2n+er(o a trial perio+ +2rin( &hi-h theemployer +etermines his 6tness to <2alify for re(2lar employment

*ase+ on reasona*le stan+ar+s ma+e 5no&n to him at the time of 3B



en(a(ement.

A pro*ationary employee, li5e a re(2lar employee, en?oys se-2rityof ten2re. Ho&ever, in -ases of pro*ationary employment, asi+efrom ?2st or a2thori7e+ -a2ses of termination, an a++itional (ro2n+is provi+e+ 2n+er Arti-le " of the La*or Co+e, i.e., thepro*ationary employee may also *e terminate+ for fail2re to <2alifyas a re(2lar employee in a--or+an-e &ith reasona*le stan+ar+sma+e 5no&n *y the employer to the employee at the time of the

en(a(ement. Th2s, the servi-es of an employee &ho has *eenen(a(e+ on pro*ationary *asis may *e terminate+ for any of thefollo&in( !$ a ?2st or !"$ an a2thori7e+ -a2se0 an+ !3$ &hen hefails to <2alify as a re(2lar employee in a--or+an-e &ith reasona*lestan+ar+s pres-ri*e+ *y the employer.

Arti-le ";;!*$ of the La*or Co+e man+ates that s2*?e-t to the-onstit2tional ri(ht of &or5ers to se-2rity of ten2re an+ their ri(htto *e prote-te+ a(ainst +ismissal, e'-ept for ?2st an+ a2thori7e+-a2se an+ &itho2t pre?2+i-e to the re<2irement of noti-e 2n+erArti-le "3 of the same Co+e, the employer shall f2rnish the&or5er, &hose employment is so2(ht to *e terminate+, a &rittennoti-e -ontainin( a statement of the -a2ses of termination, an+

shall aIor+ the latter ample opport2nity to *e hear+ an+ to +efen+himself &ith the assistan-e of a representative if he so +esires, ina--or+an-e &ith -ompany r2les an+ re(2lations p2rs2ant to the(2i+elines set *y the epartment of La*or an+ Employment.

n the instant -ase, *ase+ on the fa-ts on re-or+, petitioners faile+to a--or+ respon+ent s2*stantive an+ pro-e+2ral +2e pro-ess. Thehapha7ar+ manner in the investi(ation of the missin( -ash, &hi-h&as left to the +etermination of the poli-e a2thorities an+ therose-2tors 8-e, left respon+ent &ith no -hoi-e *2t to -ryfo2l. A+ministrative investi(ation &as not -on+2-te+ *y petitionerS2permar5et. n the same +ay that the missin( money &as

reporte+ *y respon+ent to her imme+iate s2perior, the -ompanyalrea+y pre)?2+(e+ her (2ilt &itho2t proper investi(ation, an+instantly reporte+ her to the poli-e as the s2spe-te+ thief, &hi-hres2lte+ in her lan(2ishin( in ?ail for t&o &ee5s.

As -orre-tly pointe+ o2t *y the NLRC, the +2e pro-ess re<2irements2n+er the La*or Co+e are man+atory an+ may not *e s2pplante+*y poli-e investi(ation or -o2rt pro-ee+in(s. The -riminal aspe-t of the -ase is -onsi+ere+ in+epen+ent of the a+ministrative aspe-t. Th2s, employers sho2l+ not rely solely on the 6n+in(s of therose-2tors 8-e. They are man+ate+ to -on+2-t their o&nseparate investi(ation, an+ to a--or+ the employee everyopport2nity to +efen+ himself. 92rthermore, respon+ent &as not

represente+ *y -o2nsel &hen she &as strip)sear-he+ insi+e the-ompany premises or +2rin( the poli-e investi(ation, an+ in thepreliminary investi(ation *efore the rose-2tors 8-e.

Respon+ent &as -onstr2-tively +ismisse+ *y petitionerS2permar5et eIe-tive -to*er 3#, @@;. t &as 2nreasona*le forpetitioners to -har(e her &ith a*an+onment for not reportin( for&or5 2pon her release in ?ail. t &o2l+ *e the hei(ht of -allo2snessto e'pe-t her to ret2rn to &or5 after s2Ierin( in ?ail for t&o &ee5s.

Dor5 ha+ *een ren+ere+ 2nreasona*le, 2nli5ely, an+ +e6nitelyimpossi*le, -onsi+erin( the treatment that &as a--or+e+respon+ent *y petitioners.

n this -ase, sin-e respon+ent &as a pro*ationary employee at thetime she &as -onstr2-tively +ismisse+ *y petitioners, she is entitle+to separation pay an+ *a-5&a(es. Reinstatement of respon+ent isno lon(er via*le -onsi+erin( the -ir-2mstan-es.

Ho&ever, the *a-5&a(es that sho2l+ *e a&ar+e+ to respon+entshall *e re-5one+ from the time of her -onstr2-tive +ismissal 2ntilthe +ate of the termination of her employment,i"e., from -to*er3#, @@; to Mar-h 4, @@. The -omp2tation sho2l+ not -over the

entire perio+ from the time her -ompensation &as &ithhel+ 2p tothe time of her a-t2al reinstatement. This is *e-a2se respon+ent&as a pro*ationary employee, an+ the lapse of her pro*ationaryemployment &itho2t her appointment as a re(2lar employee of petitioner S2permar5et eIe-tively severe+ the employer)employeerelationship *et&een the parties.

n all -ases involvin( employees en(a(e+ on pro*ationary *asis,the employer shall ma5e 5no&n to its employees the stan+ar+s2n+er &hi-h they &ill <2alify as re(2lar employees at the time of their en(a(ement. Dhere no stan+ar+s are ma+e 5no&n to anemployee at the time, he shall *e +eeme+ a re(2laremployee, 2nless the ?o* is self)+es-riptive, li5e mai+, -oo5, +river,or messen(er. Ho&ever, the -onstit2tional poli-y of provi+in( f2llprote-tion to la*or is not inten+e+ to oppress or +estroymana(ement.Nat2rally, petitioner S2permar5et -annot *e e'pe-te+to retain respon+ent as a re(2lar employee -onsi+erin( that shelost "#,"@@.## &hile a-tin( as a -ashier +2rin( the pro*ationaryperio+. The r2les on pro*ationary employment sho2l+ not *e 2se+to e'-2lpate a pro*ationary employee &ho a-ts in a manner-ontrary to *asi- 5no&le+(e an+ -ommon sense, in re(ar+ to&hi-h, there is no nee+ to spell o2t a poli-y or stan+ar+ to *e met.

osei+on 9ishin( v. NLRC, 9e*r2ary "#, "##Betitioners -onstr2al of #rent School Inc" v" :a$ora has -ertainly

3;



(one astray. The s2*?e-t of s-r2tiny in the #rent -ase &as theemployment -ontra-t in5e+ *et&een the s-hool an+ one en(a(e+as its Athleti- ire-tor. The -ontra-t 6'e+ a spe-i6- term of 6veyears from the +ate of e'e-2tion of the a(reement. This Co2rt2phel+ the vali+ity of the -ontra-t *et&een therein petitioner an+private respon+ent, 6'in( the latters perio+ of employment. ThisCo2rt lai+ +o&n the follo&in( -riteria for ?2+(in( the vali+ity of s2-h6'e+)term -ontra-ts, to &it

A--or+in(ly, an+ sin-e the entire p2rpose *ehin+ the +evelopmentof le(islation -2lminatin( in the present Arti-le "# of the La*orCo+e -learly appears to have *een, as alrea+y o*serve+, toprevent -ir-2mvention of the employees ri(ht to *e se-2re in histen2re, the -la2se in sai+ arti-le in+is-riminately an+ -ompletelyr2lin( o2t all &ritten or oral a(reements -onQi-tin( &ith the-on-ept of re(2lar employment as +e6ne+ therein sho2l+ *e-onstr2e+ to refer to the s2*stantive evil that the Co+e itself hassin(le+ o2t a(reements entere+ into pre-isely to -ir-2mventse-2rity of ten2re. It should have no a((lication to instances %herea &2ed (eriod o' e$(lo.$ent %as agreed u(on -no%ingl. andvoluntaril. b. the (arties %ithout an. 'orce duress or i$(ro(er (ressure being brought to bear u(on the e$(lo.ee and absent an. other circu$stances vitiating his consent or %here it satis'actoril.

a((ears that the e$(lo.er and e$(lo.ee dealt %ith each other on$ore or less e,ual ter$s %ith no $oral do$inance %hatever beinge2ercised b. the 'or$er over the latter" =nless th2s limite+ in itsp2rvie&, the la& &o2l+ *e ma+e to apply to p2rposes other thanthose e'pli-itly state+ *y its framers0 it th2s *e-omes pointless an+ar*itrary, 2n?2st in its eIe-ts an+ apt to lea+ to a*s2r+ an+2ninten+e+ -onse<2en-es. !Emphasis s2pplie+.$

#rent -ite+ some familiar e'amples of employment -ontra-ts &hi-hmay neither *e for seasonal &or5 nor for spe-i6- pro?e-ts, *2t to&hi-h a 6'e+ term is an essential an+ nat2ral app2rtenan-e, i"e.,overseas employment -ontra-ts, appointments to the positions of +ean, assistant +ean, -olle(e se-retary, prin-ipal, an+ other

a+ministrative o8-es in e+2-ational instit2tions, &hi-h are *ypra-ti-e or tra+ition rotate+ amon( the fa-2lty mem*ers, an+&here 6'e+ terms are a ne-essity &itho2t &hi-h no reasona*lerotation &o2l+ *e possi*le. Th2s, in #rent the a-i+ test in-onsi+erin( 6'e+)term -ontra-ts as vali+ is if from thecircumstances it is apparent that periods have beenimposed to preclude ac#uisition of tenurial security by theemployee! they should be disregarded for being contrary topublic policy.

n the same ta-5 as #rent , the Co2rt in Pa-istan International Airlines Cor(oration v" /(le, r2le+ in this &ise

t is apparent from #rent School that the -riti-al -onsi+eration isthe presen-e or a*sen-e of a s2*stantial in+i-ation that the perio+spe-i6e+ in an employment a(reement &as +esi(ne+ to-ir-2mvent the se-2rity of ten2re of re(2lar employees &hi-h isprovi+e+ for in Arti-les "# an+ " of the La*or Co+e. Thisin+i-ation m2st or+inarily rest 2pon some aspe-t of the a(reementother than the mere spe-i6-ation of a 6'e+ term of theemployment a(reement, or 2pon evi+en-e aliunde of the intent toeva+e.

Consistent &ith the prono2n-ements in these t&o earlier -ases, theCo2rt, in Cielo v" National Labor Relations Co$$ission, +i+ nothesitate to n2llify employment -ontra-ts stip2latin( a 6'e+ termafter 6n+in( that the purpose behind these individualcontracts was to evade the application of the labor laws .

n the -ase 2n+er -onsi+eration, the a(reement has s2-h ano*?e-tive ) to fr2strate the se-2rity of ten2re of private respon+ent)an+ 6ttin(ly, m2st *e n2lli6e+. n this -ase, petitioners intent toeva+e the appli-ation of Arti-le "# of the La*or Co+e is2nmista5a*le. n a span of " years, private respon+ent &or5e+ forpetitioner -ompany 6rst as a Chief Mate, then oat Captain, an+later as Ra+io perator. His ?o* &as +ire-tly relate+ to the +eep)sea6shin( *2siness of petitioner osei+on. His &or5 &as, therefore,ne-essary an+ important to the *2siness of his employer. S2-h*ein( the s-enario involve+, private respon+ent is -onsi+ere+ are(2lar employee of petitioner 2n+er Arti-le "# of the La*or Co+e,the la& in point.

Moreover, 2nli5e in the #rent -ase &here the perio+ of the -ontra-t&as 6'e+ an+ -learly state+, note that in the -ase at *ar, the termsof employment of private respon+ent as provi+e+ inthe Kasunduan &as not only va(2e, it also failed to provide anactual or speci3c date or period for the contract . As a+roitlyo*serve+ *y the La*or Ar*iter

There is nothin( in the -ontra-t that says -omplainant, &hohappene+ to *e the -aptain of sai+ vessel, is a -as2al, seasonal ora pro?e-t &or5er. The +ate :2ly to 3, @@ 2n+er thehea+in( Pagdating had been (laced there $erel. to indicate the (ossible date o' arrival o' the vessel and is not an indication o' thestatus o' e$(lo.$ent o' the cre% o' the vessel.

A-t2ally, the e'-eption 2n+er Arti-le "# of the La*or Co+e in&hi-h the respon+ents have ta5en ref2(e to ?2stify its position +oesnot apply in the instant -ase. The proviso, E'-ept &here theemployment has *een 6'e+ for a spe-i6- pro?e-t or 2n+erta5in(the -ompletion or +etermination of &hi-h has *een +etermine+ atthe time of the en(a(ement of the employee or &here the &or5 or

3



servi-es to *e performe+ is seasonal in nat2re an+ theemployment is for the +2ration of the season. !Arti-le"# La*or Co+e$, is ina((licable because the ver. contract adduced b. res(ondents is unclear and uncertain"The -asunduan does not s(eci'. the duration that co$(lainant hadbeen hired ' ' '. !Emphasis s2pplie+.$

92rthermore, as petitioners themselves a+mitte+ in their petition*efore this Co2rt, private respon+ent &as repeatedly hired aspart of the *oats -re& an+ he a-te+ in vario2s -apa-ities on*oar+

the vessel. n Integrated Contractor and Plu$bing 7or-s Inc" v"National Labor Relations Co$$ission, &e hel+ that the test to+etermine &hether employment is re(2lar or not is the reasona*le-onne-tion *et&een the parti-2lar a-tivity performe+ *y theemployee in relation to the 2s2al *2siness or tra+e of the employer.An+, if the employee has *een performin( the ?o* for at least oneyear, even if the performan-e is not -ontin2o2s or merelyintermittent, the la& +eems the repeate+ an+ -ontin2in( nee+ forits performan-e as s28-ient evi+en-e of the ne-essity, if notin+ispensa*ility of that a-tivity to the *2siness.

n #usta$ante v" National Labor Relations Co$$ission, the Co2rt

e'po2n+e+ on &hat are re(2lar employees 2n+er Arti-le "# of the La*or Co+e, vi+

This provision +ra&s a line *et&een re(2lar an+ -as2alemployment, a +istin-tion ho&ever often a*2se+ *yemployers. The provision en2merates t&o !"$ 5in+s of employees,the re(2lar employees an+ the -as2al employees. The re(2laremployees -onsist of the follo&in(

$ those en(a(e+ to perform a-tivities &hi-h are 2s2ally ne-essaryor +esira*le in the 2s2al *2siness or tra+e of the employer0 an+

"$ those &ho have ren+ere+ at least one year of servi-e &hethers2-h servi-e is -ontin2o2s or *ro5en.

stensi*ly, in the -ase at *ar, at +iIerent times, private respon+ento--2pie+ the position of Chief Mate, oat Captain, an+ Ra+ioperator. n petitioners interpretation, ho&ever, this a-t of hirin(an+ re)hirin( a-t2ally hi(hli(ht private respon+ents -ontra-t2alstat2s sayin( that for every en(a(ement, a fresh -ontra-t &asentere+ into *y the parties at the o2tset as the -on+itions of employment -han(e+ &hen the private respon+ent 6lle+ in a+iIerent position. 2t to this Co2rt, the a-t of hirin( an+ re)hirin( invario2s -apa-ities is a mere (am*it employe+ *y petitioner toth&art the ten2rial prote-tion of private respon+ent. S2-h patternof re)hirin( an+ the re-2rrin( nee+ for his servi-es are testament tothe ne-essity an+ in+ispensa*ility of s2-h servi-es to petitioners

*2siness or tra+e.

etitioners &o2l+ *r2sh oI private respon+ents len(th of servi-e *ystatin( that he ha+ &or5e+ for the -ompany merely for severalyears an+ that in those times, his servi-es &ere not e'-l2sive topetitioners. n the other han+, to prove his -laim that he ha+-ontin2o2sly &or5e+ for petitioners from @ to "###, privaterespon+ent s2*mitte+ a -opy of his payroll from 3# May @ to-to*er @ an+ a -opy of his SSS Employees Contri*2tions as of

the year "###. These +o-2ments &ere s2*mitte+ *y privaterespon+ent in or+er to *en-hmar5 his -laim of " years of servi-e. etitioners, ho&ever, faile+ to s2*mit the pertinentemployee 6les, payrolls, re-or+s, remittan-es an+ other similar+o-2ments &hi-h &o2l+ sho& that private respon+ents &or5 &asnot -ontin2o2s an+ for less than " years. nasm2-h as these+o-2ments are not in private respon+ents possession *2t in the-2sto+y an+ a*sol2te -ontrol of petitioners, their fail2re to ref2teprivate respon+ents evi+en-e or even -ate(ori-ally +eny privaterespon+ents alle(ations lea+ 2s to no other -on-l2sion than thatprivate respon+ent &as hire+ in @ an+ ha+ *een -ontin2o2sly inits employ sin-e then. n+ee+, petitioners fail2re to s2*mit the

ne-essary +o-2ments, &hi-h as employers are in their possession,(ives rise to the pres2mption that their presentation is pre?2+i-ialto its -a2se.

To re-apit2late, it &as after " lon( years of havin( privaterespon+ent 2n+er its &in(s &hen petitioners, possi*ly sensin( a*re&in( *r2sh &ith the la& as far as private respon+entsemployment is -on-erne+, 6nally fo2n+ a loophole to 5i-5 privaterespon+ent o2t &hen the latter faile+ to properly re-or+ a ;"a.m. -all. Capitali7in( on this 'au2 (as, petitioner s2mmarily+ismisse+ private respon+ent. n this note, &e +isa(ree &ith the6n+in( of the NLRC that private respon+ent &as ne(li(ent ona--o2nt of his fail2re to properly re-or+ a -all in the lo( *oo5. A

revie& of the re-or+s &o2l+ inel2-ta*ly sho& that there is no *asisto +e+2-t si' months &orth of salary from the total separation paythat private respon+ent is entitle+ to. De note f2rther thatthe NLRCs 6n+in( -lashes &ith that of the La*or Ar*iter &hi-hfo2n+ no s2-h ne(li(en-e an+ that s2-h ina+verten-e on the part of private respon+ent, at *est, -onstit2tes simple ne(li(en-ep2nisha*le only &ith a+monition or s2spension for a +ay or t&o.

As the re-or+s *ear o2t, private respon+ent himself seasona*lyreali7e+ his oversi(ht an+ in no time re-or+e+ the ;" a.m. -allafter the ;3# a.m. -all. Gross ne(li(en-e 2n+er Arti-le "" of the La*or Co+e, as amen+e+, -onnotes &ant of -are in the

3@



performan-e of ones +2ties, &hile ha*it2al ne(le-t implies repeate+fail2re to perform ones +2ties for a perio+ of time, +epen+in( 2ponthe -ir-2mstan-es. Here, it is not +isp2te+ that private respon+ent-orre-te+ strai(ht a&ay the re-or+in( of the -all an+ petitionersfaile+ to prove the +ama(e or in?2ry that s2-h ina+verten-e -a2se+the -ompany. De 6n+, as the La*or Ar*iter ha+ fo2n+, that there isno s28-ient evi+en-e on re-or+ to prove private respon+entsne(li(en-e, (ross or simple for that matter, in the performan-e of his +2ties to &arrant a re+2-tion of si' months salary from private

respon+ents separation pay. Moreover, respon+ent misse+ toproperly re-or+, not t&o or three -alls, *2t ?2st a single -all. t &asalso a &rst infra-tion on the part of private respon+ent, not tomention that the (aIe, if at all, prove+ to *e inno-2o2s. Th2s, &e6n+ s2-h slip to *e &ithin tolera*le ran(e. After all, is it not ar2le that in -arryin( o2t an+ interpretin( the provisions of the La*or Co+e an+ its implementin( re(2lations, the &or5in(man1s&elfare sho2l+ *e primor+ialW

etitioners ne't assert that +eep)sea 6shin( is a seasonal in+2stry*e-a2se -at-hin( of 6sh -o2l+ only *e 2n+erta5en for a limite++2ration or seasonal &ithin a (iven year. Th2s, a--or+in( to

petitioners, private respon+ent &as a seasonal or pro?e-t employee.As -orre-tly pointe+ o2t *y the Co2rt of Appeals, the a-tivity of -at-hin( 6sh is a -ontin2o2s pro-ess an+ -o2l+ har+ly *e-onsi+ere+ as seasonal in nat2re. n Phile2 Mining Cor(" v" NationalLabor Relations Co$$ission, &e +e6ne+ pro?e-t employees asthose &or5ers hire+ !$ for a spe-i6- pro?e-t or 2n+erta5in(, an+ !"$the -ompletion or termination of s2-h pro?e-t has *een +etermine+at the time of the en(a(ement of the employee. The prin-ipal testfor +eterminin( &hether parti-2lar employees are pro?e-temployees as +istin(2ishe+ from re(2lar employees, is &hether ornot the pro?e-t employees &ere assi(ne+ to -arry o2t a spe-i6-pro?e-t or 2n+erta5in(, the +2ration an+ s-ope of &hi-h &ere

spe-i6e+ at the time the employees were engaged for thatpro(ect. n this -ase, petitioners have not sho&n that privaterespon+ent &as informe+ that he &ill *e assi(ne+ to a spe-i6-pro?e-t or 2n+erta5in(. As earlier note+, neither has it *eenesta*lishe+ that he &as informe+ of the +2ration an+ s-ope of s2-hpro?e-t or 2n+erta5in( at the time of their en(a(ement.

More to the point, in Maraguinot 4r" v" National Labor RelationsCo$$ission, &e r2le+ that on-e a pro?e-t or &or5 pool employeehas *een !$ -ontin2o2sly, as oppose+ to intermittently, re)hire+*y the same employer for the same tas5s or nat2re of tas5s0 an+!"$ these tas5s are vital, ne-essary an+ in+ispensa*le to the 2s2al

*2siness or tra+e of the employer, then the employee m2st *e+eeme+ a re(2lar employee.

n 6ne, inasm2-h as private respon+ents f2n-tions as +es-ri*e+a*ove are no +o2*t 2s2ally ne-essary or +esira*le in the 2s2al*2siness or tra+e of petitioner 6shin( -ompany an+ he &as hire+-ontin2o2sly for " years for the same nat2re of tas5s, &e are-onstraine+ to say that he *elon(s to the il5 of re(2laremployee. ein( one, private respon+ents +ismissal &itho2t vali+

-a2se &as ille(al. An+, &here ille(al +ismissal is proven, the &or5eris entitle+ to *a-5 &a(es an+ other similar *ene6ts withoutdeductions or conditions.

n+ee+, it *ehooves this Co2rt to *e ever vi(ilant in -he-5in( the2ns-r2p2lo2s eIorts of some of o2r entreprene2rs, primarily aime+at ma'imi7in( their ret2rn on investments at the e'pense of thelo&ly &or5in(man.

LT v. Ar-eo, May , "##B=n+er the 6rst -riterion, respon+ent is <2ali6e+ to *e a re(2laremployee. Her &or5, -onsistin( mainly of photo-opyin( +o-2ments,sortin( o2t telephone *ills an+ +is-onne-tion noti-es, &as -ertainly

ne-essary or +esira*le to the *2siness of LT. 2t even if the-ontrary &ere tr2e, the 2n-onteste+ fa-t is that she ren+ere+servi-e for more than one year as a -as2al employee. Hen-e, 2n+erthe se-on+ -riterion, she is still eli(i*le to *e-ome a re(2laremployee.

etitioners ar(2ment that respon+ents position has *een a*olishe+,if in+ee+ tr2e, +oes not pre-l2+e Ar-eos *e-omin( a re(2laremployee. The or+er to reinstate her also in-l2+e+ the alternativeto reinstate her to a position e<2ivalent thereto. Th2s, LT -anstill re(2lari7e her in an e<2ivalent position.

Moreover, LTs ar(2ment +oes not hol+ &ater in the a*sen-e of proof that the a-tivity in &hi-h Ar-eo &as en(a(e+ !li5ephoto-opyin( of +o-2ments an+ sortin( of telephone *ills$ nolon(er s2*sists. =n+er Arti-le "#, any employee &ho has ren+ere+at least one year of servi-e shall be considered a regular e$(lo.ee%ith res(ect to the activit. in %hich he is e$(lo.ed and hise$(lo.$ent shall continue %hile such activit. e2ists"9or LTs fail2re to sho& that the a-tivity 2n+erta5en*y Ar-eo has *een +is-ontin2e+, &e are -onstraine+ to -on6rm herre(2lari7ation in that position.

9rom &hat +ate &ill she *e entitle+ to the *ene6ts of a re(2laremployeeW Consi+erin( that she has alrea+y &or5e+ in LT for

4#



more than one year at the time she &as reinstate+, she sho2l+ *eentitle+ to all the *ene6ts of a re(2lar employee from :2ne @,@@3 X the +ay of her a-t2al reinstatement.

LTs other -ontention that the re(2lari7ation of respon+ent astelephone operator &as not possi*le sin-e she faile+ in three<2alifyin( e'ams for that position is also 2ntena*le. t is 2n+erstoo+that she &ill *e re(2lari7e+ in the position she hel+ prior to the6lin( of her -omplaint &ith the la*or ar*iter, or, if that position &as

alrea+y a*olishe+, to an e<2ivalent position. The position of telephone operator &as never even -onsi+ere+ in any of theassaile+ +e-isions of the la*or ar*iter, the NLRC or the CA.

=niversal Ro*ina S2(ar Millin( Corporation an+

Rene Ca*ati, G.R. No. B43@, :an2ary , "#4De +isa(ree &ith the petitionersJ position. De 6n+ the respon+entsto *e re(2lar seasonal employees of =RS=MC.

As the CA has e'plaine+ in its -hallen(e+ +e-ision, Arti-le "# of the La*or Co+e provi+es for three 5in+s of employmentarran(ements, namely re(2lar, pro?e-t>seasonal an+ -as2al.

Re(2lar employment refers to that arran(ement &here*y theemployee /has *een en(a(e+ to perform a-tivities &hi-h are2s2ally ne-essary or +esira*le in the 2s2al *2siness or tra+e of theemployerK./ =n+er the +e6nition, the primary stan+ar+ that+etermines re(2lar employment is the reasona*le -onne-tion*et&een the parti-2lar a-tivity performe+ *y the employee an+ the2s2al *2siness or tra+e of the employer0 the emphasis is on thene-essity or +esira*ility of the employeeJs a-tivity. Th2s, &hen theemployee performs a-tivities -onsi+ere+ ne-essary an+ +esira*leto the overall *2siness s-heme of the employer, the la& re(ar+sthe employee as re(2lar.

y &ay of an e'-eption, para(raph ", Arti-le "# of the La*or Co+ealso -onsi+ers re(2lar a -as2al employment arran(ement &hen the-as2al employeeJs en(a(ement has laste+ for at least one year,re(ar+less of the en(a(ementJs -ontin2ity. The -ontrollin( test inthis arran(ement is the len(th of time +2rin( &hi-h the employeeis en(a(e+.

A pro?e-t employment, on the other han+, -ontemplates onarran(ement &here*y /the employment has *een 6'e+ for aspe-i6- pro?e-t or 2n+erta5in( &hose -ompletion or terminationhas *een +etermine+ at the time of the en(a(ement of theemployeeK./ T&o re<2irements, therefore, -learly nee+ to *esatis6e+ to remove the en(a(ement from the pres2mption of

re(2larity of employment, namely !$ +esi(nation of a spe-i6-pro?e-t or 2n+erta5in( for &hi-h the employee is hire+0 an+ !"$-lear +etermination of the -ompletion or termination of the pro?e-tat the time of the employeeJs en(a(ement. The servi-es of thepro?e-t employees are le(ally an+ a2tomati-ally terminate+ 2ponthe en+ or -ompletion of the pro?e-t as the employeeJs servi-es are-otermino2s &ith the pro?e-t.

=nli5e in a re(2lar employment 2n+er Arti-le "# of the La*or

Co+e, ho&ever, the len(th of time of the asserte+ /pro?e-t/employeeJs en(a(ement is not -ontrollin( as the employment may,in fa-t, last for more than a year, +epen+in( on the nee+s or-ir-2mstan-es of the pro?e-t. Nevertheless, this len(th of time !orthe -ontin2o2s rehirin( of the employee even after the -essation of the pro?e-t$ may serve as a *a+(e of re(2lar employment &hen thea-tivities performe+ *y the p2rporte+ /pro?e-t/ employee arene-essary an+ in+ispensa*le to the 2s2al *2siness or tra+e of theemployer. n this latter -ase, the la& &ill re(ar+ the arran(ement asre(2lar employment.

Seasonal employment operates m2-h in the same &ay as pro?e-temployment, al*eit it involves &or5 or servi-e that is seasonal in

nat2re or lastin( for the +2ration of the season. As &ith pro?e-temployment, altho2(h the seasonal employment arran(ementinvolves &or5 that is seasonal or perio+i- in nat2re, theemployment itself is not a2tomati-ally -onsi+ere+ seasonal so as toprevent the employee from attainin( re(2lar stat2s. To e'-l2+e theasserte+ /seasonal/ employee from those -lassi6e+ as re(2laremployees, the employer m2st sho& that !$ the employee m2st*e performin( &or5 or servi-es that are seasonal in nat2re0 an+ !"$he ha+ *een employe+ for the +2ration of the season. Hen-e, &henthe /seasonal/ &or5ers are -ontin2o2sly an+ repeate+ly hire+ toperform the same tas5s or a-tivities for several seasons or evenafter the -essation of the season, this len(th of time may li5e&ise

serve as *a+(e of re(2lar employment. n fa-t, even tho2(h+enominate+ as /seasonal &or5ers,/ if these &or5ers are -alle+ to&or5 from time to time an+ are only temporarily lai+ oI +2rin( theoI)season, the la& +oes not -onsi+er them separate+ from theservi-e +2rin( the oI)season perio+. The la& simply -onsi+ersthese seasonal &or5ers on leave 2ntil re)employe+.

Cas2al employment, the thir+ 5in+ of employment arran(ement,refers to any other employment arran(ement that +oes not fall2n+er any of the 6rst t&o -ate(ories, i.e., re(2lar orpro?e-t>seasonal.

nterestin(ly, the La*or Co+e +oes not mention another

4



employment arran(ement – -ontra-t2al or 6'e+ term employment!or employment for a term$ – &hi-h, if not for the 6'e+ term, sho2l+fall 2n+er the -ate(ory of re(2lar employment in vie& of the nat2reof the employeeJs en(a(ement, &hi-h is to perform an a-tivity2s2ally ne-essary or +esira*le in the employerJs *2siness.

n rent S-hool, n-. v. Oamora, the Co2rt, for the 6rst time,re-o(ni7e+ an+ resolve+ the anomaly -reate+ *y a narro& an+literal interpretation of Arti-le "# of the La*or Co+e that appears

to restri-t the employeeJs ri(ht to freely stip2late &ith his employeron the +2ration of his en(a(ement. n this -ase, the Co2rt 2phel+the vali+ity of the 6'e+)term employment a(ree+ 2pon *y theemployer, rent S-hool, n-., an+ the employee, orotio Ale(re,+e-larin( that the restri-tive -la2se in Arti-le "# /sho2l+ *e-onstr2e+ to refer to the s2*stantive evil that the Co+e itself ' ' 'sin(le+ o2t a(reements entere+ into pre-isely to -ir-2mventse-2rity of ten2re. t sho2l+ have no appli-ation to instan-es &hereKthe 6'e+ perio+ of employment &as a(ree+ 2pon 5no&in(ly an+vol2ntarily *y the parties ' ' ' a*sent any ' ' ' -ir-2mstan-esvitiatin( Kthe employeeJs -onsent, or &here Kthe fa-ts satisfa-torilysho& that the employer an+ Kthe employee +ealt &ith ea-h other

on more or less e<2al termsK./ The in+ispensa*ility or +esira*ilityof the a-tivity performe+ *y the employee &ill not pre-l2+e theparties from enterin( into an other&ise vali+ 6'e+ termemployment a(reement0 a +e6nite perio+ of employment +oes notessentially -ontra+i-t the nat2re of the employees +2ties asne-essary an+ +esira*le to the 2s2al *2siness or tra+e of theemployer.

Nevertheless, /&here the -ir-2mstan-es evi+ently sho& that theemployer impose+ the perio+ pre-isely to pre-l2+e the employeefrom a-<2irin( ten2rial se-2rity, the la& an+ this Co2rt &ill nothesitate to stri5e +o&n or +isre(ar+ the perio+ as -ontrary to p2*li-poli-y, morals, et-./ n s2-h a -ase, the (eneral restri-tive r2le

2n+er Arti-le "# of the La*or Co+e &ill apply an+ the employeeshall *e +eeme+ re(2lar.

Clearly, therefore, the nat2re of the employment +oes not +epen+solely on the &ill or &or+ of the employer or on the pro-e+2re forhirin( an+ the manner of +esi(natin( the employee. Rather, thenat2re of the employment +epen+s on the nat2re of the a-tivitiesto *e performe+ *y the employee, -onsi+erin( the nat2re of theemployerJs *2siness, the +2ration an+ s-ope to *e +one, an+, insome -ases, even the len(th of time of the performan-e an+ its-ontin2e+ e'isten-e.

n li(ht of the a*ove le(al parameters lai+ +o&n *y the la& an+

appli-a*le ?2rispr2+en-e, the respon+ents are neither pro?e-t,seasonal nor 6'e+)term employees, *2t re(2lar seasonal &or5ers of =RS=MC. The follo&in( fa-t2al -onsi+erations from the re-or+ss2pport this -on-l2sion

9irst, the respon+ents &ere ma+e to perform vario2s tas5s that +i+not at all pertain to any spe-i6- phase of =RS=MCJs stri-t millin(operations that &o2l+ 2ltimately -ease 2pon -ompletion of aparti-2lar phase in the millin( of s2(ar0 rather, they &ere tas5e+ toperform +2ties re(2larly an+ ha*it2ally nee+e+ in =RS=MCJs

operations +2rin( the millin( season. The respon+entsJ +2ties asloa+er operators, hoo5ers, -rane operators an+ +rivers &erene-essary to ha2l an+ transport the s2(ar-ane from the plantationto the mill0 la*oratory atten+ants, &or5ers an+ la*orers to mill thes2(ar0 an+ &el+ers, -arpenters an+ 2tility &or5ers to ens2re thesmooth an+ -ontin2o2s operation of the mill for the +2ration of themillin( season, as +istin(2ishe+ from the pro+2-tion of thes2(ar-ane &hi-h involves the plantin( an+ raisin( of the s2(ar-ane2ntil it ripens for millin(. The pro+2-tion of s2(ar-ane, it m2st *eemphasi7e+, re<2ires a +iIerent set of &or5ers &ho aree'perien-e+ in farm or a(ri-2lt2ral &or5. Nee+less to say, theyperform the a-tivities that are ne-essary an+ +esira*le ins2(ar-ane pro+2-tion. As in the millin( of s2(ar-ane, the

plantation &or5ers perform their +2ties only +2rin( the plantin(season.

Se-on+, the respon+ents &ere re(2larly an+ repeate+ly hire+ toperform the same tas5s year after year. This re(2lar an+ repeate+hirin( of the same &or5ers !t&o +iIerent sets$ for t&o separateseasons has p2t in pla-e, prin-ipally thro2(h ?2rispr2+en-e, thesystem of re(2lar seasonal employment in the s2(ar in+2stry an+other in+2stries &ith a similar nat2re of operations.

=n+er the system, the plantation &or5ers or the mill employees +onot &or5 -ontin2o2sly for one &hole year *2t only for the +2rationof the (ro&in( of the s2(ar-ane or the millin( season. Theirseasonal &or5, ho&ever, +oes not +etra-t from -onsi+erin( them in

re(2lar employment sin-e in a litany of -ases, this Co2rt hasalrea+y settle+ that seasonal &or5ers &ho are -alle+ to &or5 fromtime to time an+ are temporarily lai+ oI +2rin( the oI)season arenot separate+ from the servi-e in sai+ perio+, *2t are merely-onsi+ere+ on leave 2ntil re)employment. e this as it may, re(2larseasonal employees, li5e the respon+ents in this -ase, sho2l+ not*e -onf2se+ &ith the re(2lar employees of the s2(ar mill s2-h asthe a+ministrative or o8-e personnel &ho perform their tas5s forthe entire year re(ar+less of the season. The NLRC, therefore,(ravely erre+ &hen it +e-lare+ the respon+ents re(2lar employeesof =RS=MC &itho2t <2ali6-ation an+ that they &ere entitle+ tothe *ene6ts (rante+, 2n+er the CA, to =RS=MCJS re(2laremployees.

4"



Thir+, &hile the petitioners assert that the respon+ents &ere freeto &or5 else&here +2rin( the oI)season, the re-or+s +o nots2pport this assertion. There is no evi+en-e on re-or+ sho&in( thatafter the -ompletion of their tas5s at =RS=MC, the respon+entsso2(ht an+ o*taine+ employment else&here.

Contrary to the petitionersJ position, Mer-a+o, Sr. v. NLRC, 3r+iv. is not appli-a*le to the respon+ents as this -ase &as resolve+*ase+ on +iIerent fa-t2al -onsi+erations. n Mer-a+o, the &or5ers&ere hire+ to perform phases of the a(ri-2lt2ral &or5 in their

employerJs farm for a +e6nite perio+ of time0 after&ar+s, they &erefree to oIer their servi-es to any other farm o&ner. The &or5ers&ere not hire+ re(2larly an+ repeate+ly for the same phase!s$ of a(ri-2lt2ral &or5, *2t only intermittently for any sin(le phase. An+,more importantly, the employer in Mer-a+o s28-iently prove+these fa-t2al -ir-2mstan-es. The Co2rt reiterate+ these sameo*servations in H+a. 9atima v. NatJl 9e+. of S2(ar-ane Dor5ers)9oo+ an+ Gen. Tra+e an+ Ha-ien+a ino>Horten-ia Star5e, n-. v.C2en-a.

Fie&e+ in this li(ht, &e 6n+ the nee+ to pla-e the CAJs a8rmation,al*eit &ith mo+i6-ation, of the NLRC +e-ision of :2ly "", "## in

perspe-tive. To re-all, the NLRC +e-lare+ the respon+ents asre(2lar employees of =RS=MC. Dith s2-h a +e-laration, the NLRCin eIe-t (rante+ the respon+entsJ prayer for re(2lari7ation an+,-on-omitantly, their prayer for the (rant of monetary *ene6ts2n+er the CA for =RS=MCJs re(2lar employees. n its -hallen(e+r2lin(, the CA -on-2rre+ &ith the NLRC 6n+in(, *2t &ith therespon+ents -hara-teri7e+ as re(2lar seasonal employees of =RS=MC.

To reiterate, the respon+ents are re(2lar seasonal employees, asthe CA itself opine+ &hen it +e-lare+ that /private respon+ents &hoare re(2lar &or5ers &ith respe-t to their seasonal tas5s or a-tivitiesan+ &hile s2-h a-tivities e'ist, -annot a2tomati-ally *e (overne+

*y the CA *et&een petitioner =RS=MC an+ the a2thori7e+*ar(ainin( representative of the re(2lar an+ permanentemployees./ Citin( ?2rispr2+ential stan+ar+s, it then pro-ee+e+ toe'plain that the respon+ents -annot *e l2mpe+ &ith the re(2laremployees +2e to the +iIeren-es in the nat2re of their +2ties an+the +2ration of their &or5 vis)a)vis the operations of the -ompany.

C. n+epen+ent Contra-tors an+ La*or)nly Contra-tors

MERALC v. 2is2m*in( 3#" SCRA ;3 !@@@$ This iss2e is limite+ to the vali+ity of the re<2irement that the

2nion *e -ons2lte+ *efore the implementation of any -ontra-tin(o2t that &o2l+ last for B months or more. ro-ee+in( from o2rr2lin( in (an %iguel )mployees 'nion*+"- vs/ersamina, !&here &e re-o(ni7e+ that -ontra-tin( o2t of &or5 is aproprietary ri(ht of the employer in the e'er-ise of an inherentmana(ement prero(ative$ the iss2e &e see is &hether theSe-retarys -ons2ltation re<2irement is reasona*le or 2n+2lyrestri-tive of the -ompanys mana(ement prero(ative. De note thatthe Se-retary himself has -onsi+ere+ that mana(ement sho2l+ not

*e hampere+ in the operations of its *2siness &hen he sai+ that

De feel that the limitations impose+ *y the 2nion a+vo-ates aretoo spe-i6- an+ may not *e appli-a*le to the sit2ations that the-ompany an+ the 2nion may fa-e in the f2t2re. To o2r min+, the(reater ris5 &ith this type of limitation is that it &ill ten+ to -2rtailrather than allo& the *2siness (ro&th that the -ompany an+ the2nion m2st aspire for. Hen-e, &e are for the (eneral limitations &ehave state+ a*ove *e-a2se they &ill allo& a -ali*rate+ response tospe-i6- f2t2re sit2ations the -ompany an+ the 2nion may fa-e.

A++itionally, De re-o(ni7e that -ontra-tin( o2t is not 2nlimite+0rather, it is a prero(ative that mana(ement en?oys s2*?e-t to &ell)+e6ne+ le(al limitations. As &e have previo2sly hel+, the -ompany-an +etermine in its *est *2siness ?2+(ment &hether it sho2l+-ontra-t o2t the performan-e of some of its &or5 for as lon( as theemployer is motivate+ *y (oo+ faith, an+ the -ontra-tin( o2t m2stnot have *een resorte+ to -ir-2mvent the la& or m2st not have*een the res2lt of mali-io2s or ar*itrary a-tion. The La*or Co+e an+its implementin( r2les also -ontain spe-i6- r2les (overnin(-ontra-tin( o2t !epartment of La*or r+er No. #, May 3#, @@;,Se-tions. )"$.

Given these realities, &e re-o(ni7e that a *alan-e alrea+y e'ist inthe parties relationship &ith respe-t to -ontra-tin( o2t0 MERALChas its le(ally +e6ne+ an+ prote-te+ mana(ement prero(atives

&hile &or5ers are (2arantee+ their o&n prote-tion thro2(h spe-i6-la*or provisions an+ the re-o(nition of limits to the e'er-ise of mana(ement prero(atives. 9rom these premises, &e -an only-on-l2+e that the Se-retaryJs a++e+ re<2irement only intro+2-esan im*alan-e in the parties -olle-tive *ar(ainin( relationship on amatter that the la& alrea+y s28-iently re(2lates. Hen-e, &e r2lethat the Se-retaryJs a++e+ re<2irement, *ein( 2nreasona*le,restri-tive an+ potentially +isr2ptive sho2l+ *e str2-5 +o&n.

Co-a -ola ottlers v. ela Cr27, et al. !G.R. No.

4@;;, ; e-em*er "##@$

43



Contra-tin( an+ s2*)-ontra-tin( are hot la*or iss2es for t&oreasons. The &rst is that ?o* -ontra-tin( an+ la*or)only -ontra-tin(are te-hni-al La*or Co+e -on-epts that are easilymis2n+erstoo+. 9or one, there is a lot of lay mis2n+erstan+in( of &hat 5in+ of -ontra-tin( the La*or Co+e prohi*its or allo&s. The second, e-hoin( the -ry from the la*or se-tor, is that the La*orCo+e provisions on -ontra-tin( are *latantly an+ pervasivelyviolate+, eIe-tively +efeatin( &or5ers ri(ht to se-2rity of ten2re.

This Co2rt, thro2(h its +e-isions, -an +ire-tly help a++ress thepro*lem of mis2n+erstan+in(. The se-on+ pro*lem, ho&ever,lar(ely relates to implementation iss2es that are o2tsi+e the Co2rtsle(itimate s-ope of a-tivities0 the Co2rt -an only passively a++ressthe pro*lem thro2(h the -ases that are *ro2(ht *efore 2s. Either&ay, ho&ever, the nee+ is for -lear +e-isions that the &or5ers,most espe-ially, &ill easily 2n+erstan+ an+ appre-iate. De resolvethe present -ase &ith these tho2(hts in min+.

The la& allows -ontra-tin( an+ s2*-ontra-tin( involvin( servi-es*2t closely regulates these a-tivities for the prote-tion of &or5ers. Th2s, an employer -an -ontra-t o2t part of its operations,provi+e+ it -omplies &ith the limits an+ stan+ar+s provi+e+ in the

Co+e an+ in its implementin( r2les.

The +ire-tly appli-a*le provision of the La*or Co+e on -ontra-tin(an+ s2*-ontra-tin( is Arti-le #B &hi-h provi+es

Dhenever, an employer enters into a -ontra-t &ith another personfor the performan-e of the formers &or5, the employees of the-ontra-tor an+ of the latters s2*-ontra-tor shall *e pai+ ina--or+an-e &ith the provisions of this Co+e.

The Se-retary of La*or may, *y appropriate re(2lations, restri-t orprohi*it the -ontra-tin( o2t of la*or to prote-t the ri(hts of &or5ersesta*lishe+ 2n+er this Co+e. n so prohi*itin( or restri-tin(, he mayma5e appropriate +istin-tions *et&een la*or)only -ontra-tin( an+

?o* -ontra-tin( as &ell as +iIerentiations &ithin these types of -ontra-tin( an+ +etermine &ho amon( the parties involve+ shall*e -onsi+ere+ the employer for p2rposes of this Co+e.

There is la*or)only -ontra-tin( &here the person s2pplyin( &or5ersto an employer +oes not have s2*stantial -apital or investment inthe form of tools, e<2ipment, ma-hineries, &or5 premises, amon(others, an+ the &or5ers re-r2ite+ an+ pla-e+ *y s2-h persons areperformin( a-tivities &hi-h are +ire-tly relate+ to the prin-ipal*2siness of s2-h employer. n s2-h -ases, the person orinterme+iary shall *e -onsi+ere+ merely as an a(ent of theemployer &ho shall *e responsi*le to the &or5ers in the samemanner an+ e'tent as if the alter &ere +ire-tly employe+ *yhim!2n+ers-orin( s2pplie+$.

The epartment of La*or an+ Employment implements this La*orCo+e provision thro2(h its epartment r+er No. )#" !D"/" ;<)=>$. n the matter of la*or)only -ontra-tin(, Se-tion thereof provi+es

rohi*ition a(ainst la*or)only -ontra-tin(. ) La*or)only -ontra-tin(is here*y +e-lare+ prohi*ite+ ' ' ' la*or)only -ontra-tin( shallrefer to an arran(ement &here the -ontra-tor or s2*-ontra-tormerely re-r2its, s2pplies or pla-es &or5ers to perform a ?o*, &or5or servi-e for a prin-ipal, an+ any of the follo&in( elements are

present

i$ The -ontra-tor or s2*-ontra-tor +oes not have s28-ient -apitalor investment &hi-h relates to the ?o*, &or5 or servi-e to *eperforme+ an+ the employees re-r2ite+, s2pplie+ or pla-e+ *ys2-h -ontra-tor or s2*-ontra-tor are performin( a-tivities &hi-hare +ire-tly relate+ to the main *2siness of the prin-ipal0 or

ii$ The -ontra-tor +oes not e'er-ise the right to control over theperforman-e of the &or5 of the -ontra-t2al)employee.

S2*stantial -apital or investment refers to -apital sto-5s an+s2*s-ri*e+ -apitali7ation in the -ase of -orporations, tools ore<2ipment, implements, ma-hineries an+ &or5 premises, a-t2allyan+ +ire-tly 2se+ *y the -ontra-tor or s2*-ontra-tor in theperforman-e or -ompletion of the ?o*, &or5 or servi-e -ontra-te+o2t. KEmphasis s2pplie+

The ri(ht to -ontrol refers to the prero(ative of a party to+etermine, not only the en+ res2lt so2(ht to *e a-hieve+, *2t alsothe means an+ manner to *e 2se+ to a-hieve this en+.

n stri-tly laymans terms, a man2fa-t2rer -an sell its pro+2-ts on itso&n, or allo& -ontra-tors, in+epen+ently operatin( on their o&n, tosell an+ +istri*2te these pro+2-ts in a manner that +oes not violatethe re(2lations. 9rom the terms of the a*ove)<2ote+ .. )#",the le(itimate ?o* -ontra-tor m2st have the -apitali7ation an+e<2ipment to 2n+erta5e the sale an+ +istri*2tion of theman2fa-t2rers pro+2-ts, an+ m2st +o it on its o&n 2sin( its o&nmeans an+ sellin( metho+s.

n the present -ase, *oth the -apitali7ation of eerless an+E'-ellent an+ their -ontrol over the means an+ manner of theiroperations are live s2*)iss2es *efore 2s.

A 5ey -onsi+eration in resolvin( these iss2es is the -ontra-t*et&een the -ompany an+ the p2rporte+ -ontra-tors. Theseprovisions parti-2larly, that eerless an+ E'-ellent retain the ri(htto sele-t, hire, +ismiss, s2pervise, -ontrol, an+ +is-ipline allpersonnel they &ill assi(n to the petitioner, as &ell as pay theirsalaries &ere -ite+ *y the la*or ar*iter an+ the NLRC as *asis for

44



their -on-l2sion that no employer)employee relationship e'iste+*et&een the respon+ents an+ the petitioner.

The Co2rt of Appeals vie&e+ matters +iIerently an+ fa2lte+ thela*or tri*2nals for relyin( solely on the servi-e -ontra-ts to provethat the respon+ents &ere employees of eerless an+E'-ellent. The CA -ite+ in this re(ar+ &hat &e sai+ in ?K Cor(oration v" NLRC@

The fa-t that the servi-e -ontra-t entere+ into *y petitioner an+

=niversal stip2late+ that private respon+ents shall *e theemployees of =niversal, &o2l+ not help petitioner, as the lan(2a(eof a -ontra-t is not +eterminative of the relationship of the parties.etitioner an+ =niversal -annot +i-tate, *y the mere e'pe+ient of a+e-laration in a -ontra-t, the -hara-ter of =niversal *2siness, i.e.,&hether as la*or)only -ontra-tor , or ?o* -ontra-tor, it *ein( -r2-ialthat =niversals -hara-ter *e mentione+ in terms of an+ +etermine+*y the -riteria set *y the stat2te.

as *asis for loo5in( at ho& the -ontra-te+ &or5ers really relate+&ith the -ompany in performin( their -ontra-te+ tas5s. n other&or+s, the -ontra-t *et&een the prin-ipal an+ the -ontra-tor is notthe 6nal &or+ on ho& the -ontra-te+ &or5ers relate to the prin-ipal

an+ the p2rporte+ -ontra-tor0 the relationships m2st *e teste+ onthe *asis of ho& they a-t2ally operate.

Even *efore (oin( into the realities of &or5pla-e operations, the CAfo2n+ that the servi-e -ontra-ts themselves provi+e ample lea+sinto the relationship *et&een the -ompany, on the one han+, an+eerless an+ E'-ellent, on the other. The CA note+ that *oth theeerless an+ the E'-ellent -ontra-ts sho& that their o*li(ation &assolely to provi+e the -ompany &ith the services o' contractuale$(lo.ees an+ nothin( more. These -ontra-te+ servi-es &ere forthe han+lin( an+ +elivery of the -ompanys pro+2-ts an+ allie+servi-es. 9ollo&in( .. )#" an+ the -ontra-ts that spo5e p2relyof the s2pply of la*or, the CA -on-l2+e+ that eerless an+ E'-ellent

&ere la*or)only -ontra-tors 2nless they -o2l+ prove that they ha+the re<2ire+ -apitali7ation an+ the ri(ht of -ontrol over their-ontra-te+ &or5ers.

The CA -on-l2+e+ that other than the petitioners *are alle(ation,there is no in+i-ation in the re-or+s that eerless an+ E'-ellent ha+s2*stantial -apital, tools or investment 2se+ +ire-tly in provi+in(the -ontra-te+ servi-es to the petitioner. Th2s, in the han+lin( an++elivery of -ompany pro+2-ts, the -ontra-te+ personnel 2se+-ompany tr2-5s an+ e<2ipment in an operation &here -ompanysales personnel primarily han+le+ sales an+ +istri*2tion, merely2tili7in( the -ontra-te+ personnel as sales ro2te helpers.

n plainer terms, the -ontra-te+ personnel !a-tin( as sales ro2tehelpers$ &ere only en(a(e+ in the mar(inal &or5 of helpin( in thesale an+ +istri*2tion of -ompany pro+2-ts0 they only provi+e+ them2s-le &or5 that sale an+ +istri*2tion re<2ire+ an+ &ere th2sne-essarily 2n+er the -ompanys -ontrol an+ s2pervision in +oin(these tas5s.

Still another &ay of p2ttin( it is that the -ontra-tors &ere notin+epen+ently sellin( an+ +istri*2tin( -ompany pro+2-ts, 2sin(

their o&n e<2ipment, means an+ metho+s of sellin( an++istri*2tion0 they only s2pplie+ the manpo&er that helpe+ the-ompany in the han+in( of pro+2-ts for sale an+ +istri*2tion. n the-onte't of .. )#", the -ontra-tin( for sale an+ +istri*2tion asan in+epen+ent an+ self)-ontaine+ operation is a le(itimate-ontra-t, *2t the p2re s2pply of manpo&er &ith the tas5 of assistin( in sales an+ +istri*2tion -ontrolle+ *y a prin-ipal falls&ithin prohi*ite+ la*or)only -ontra-tin(.

The role of sales ro2te helpers in -ompany operations is not a ne&iss2e *efore this Co2rt as &e have r2le+ on this iss2e in Magsalin v"National /rgani+ation o' 7or-ing$en &hi-h the CA itself -ite+ inthe assaile+ +e-ision. De hel+ in this -ite+ -ase that

The ar(2ment of petitioner that its 2s2al *2siness or tra+e issoft+rin5 man2fa-t2rin( an+ that the &or5 assi(ne+ to therespon+ent &or5ers so involves merely postpro+2-tion a-tivities,one &hi-h is not in+ispensa*le in the man2fa-t2re of its pro+2-ts,s-ar-ely -an *e pers2asive. f, as so ar(2e+ *y petitioner -ompany,only those &hose &or5 are +ire-tly involve+ in the pro+2-tion of soft+rin5s may *e hel+ performin( f2n-tions ne-essary an++esira*le in its 2s2al *2siness or tra+e, there &o2l+ have *een nonee+ for it to even maintain re(2lar tr2-5 sales ro2te helpers. Thenat2re of the &or5 performe+ m2st *e vie&e+ from a perspe-tiveof the *2siness or tra+e in its entirety an+ not only in a -on6ne+s-ope.

Dhile the respon+ents &ere not +ire-t parties to this r2lin(, thepetitioner &as the party involve+ an+ Magsalin +es-ri*e+ in a verysi(ni6-ant &ay the man2fa-t2re of soft+rin5s an+ the -ompanyssales an+ +istri*2tion a-tivities in relation &ith one another.9ollo&in( the lea+ &e (ave in Magsalin, the CA -on-l2+e+ that the-ontra-te+ personnel &ho serve+ as ro2te helpers &ere reallyen(a(e+ in f2n-tions +ire-tly relate+ to the overall *2siness of thepetitioner. This le+ to the f2rther CA -on-l2sion that the -ontra-te+personnel &ere 2n+er the -ompanys s2pervision an+ -ontrol sin-esales an+ +istri*2tion &ere in fa-t not the p2rporte+ -ontra-torsin+epen+ent, +is-rete an+ separa*le a-tivities, *2t &ere-omponent parts of sales an+ +istri*2tion operations that the

4



-ompany -ontrolle+ in its soft+rin5s *2siness.

Temi- A2tomotive hils v. Temi- A2tomative

hils n-. Employees =nion – 99D, G.R. No.

B@B, "3 e-em*er "##@.2r o&n e'amination of the a(reement sho&s that the for&ar+in(arran(ement -omplies &ith the re<2irements of Arti-le #B of theLa*or Co+e an+ its implementin( r2les. To reiterate, no evi+en-e orar(2ment <2estions the -ompanys *asi- o*?e-tive of a-hievin( greater econo$. and ecienc. o' o(erations. This, too2r min+, (oes a lon( &ay to ne(ate the presen-e of *a+ faith. Thefor&ar+in( arran(ement has *een in pla-e sin-e @@ an+ noevi+en-e has *een presente+ sho&in( that any re(2lar employeehas *een +ismisse+ or +ispla-e+ *y the for&ar+ers employees sin-ethen. No evi+en-e li5e&ise stan+s *efore 2s sho&in( that theo2tso2r-in( has res2lte+ in a re+2-tion of &or5 ho2rs or thesplittin( of the *ar(ainin( 2nit eIe-ts that 2n+er the implementin(r2les of Arti-le #B of the La*or Co+e -an ma5e a -ontra-tin(arran(ement ille(al. The other re<2irements of Arti-le #B, on theother han+, are simply not material to the present petition. Th2s,on the &hole, &e see no evi+en-e or ar(2ment eIe-tively sho&in(that the o2tso2r-in( of the for&ar+in( a-tivities violate o2r la*orla&s, re(2lations, an+ the parties CA, spe-i6-ally that it interfere+&ith, restraine+ or -oer-e+ employees in the e'er-ise of their ri(htsto self)or(ani7ation as provi+e+ in Se-tion B, par. !f$ of theimplementin( r2les. The only e'-eption, of -o2rse, is &hat the2nion no& s2*mits as a vol2ntary ar*itration iss2e i.e., the fail2reto re-o(ni7e -ertain for&ar+er employees as re(2lar -ompanyemployees an+ the eIe-t of this fail2re on the CAs s-ope of -overa(e &hi-h iss2e &e f2lly +is-2ss *elo&.

The ?o* of for&ar+in(, as &e earlier +es-ri*e+, -onsists not only of

a sin(le a-tivity *2t of several servi-es that -omplement oneanother an+ -an *est *e vie&e+ as one &hole pro-ess involvin( apa-5a(e of servi-es. These servi-es in-l2+e pa-5in(, loa+in(,materials han+lin( an+ s2pport -leri-al a-tivities, all of &hi-h are+ire-te+ at the transport of -ompany (oo+s, 2s2ally to forei(n+estinations.

t is in the appre-iation of these for&ar+er servi-es as one &holepa-5a(e of inter)relate+ servi-es that &e +is-ern a *asi-mis2n+erstan+in( that res2lts in the error of e<2atin( the f2n-tionsof the for&ar+ers employees &ith those of re(2lar ran5)an+)6leemployees of the -ompany. A -leri-al ?o*, for e'ample, may

similarly involve typin( an+ paper p2shin( a-tivities an+ may *e+one on the same -ompany pro+2-ts that the for&ar+ersemployees an+ -ompany employees may &or5 on, *2t thesesimilarities +o not ne-essarily mean that all these employees &or5for the -ompany. The re(2lar -ompany employees, to *e s2re, &or5for the -ompany 2n+er its s2pervision an+ -ontrol, *2t for&ar+eremployees &or5 for the for&ar+er in the for&ar+ers o&n operationthat is itself a -ontra-te+ &or5 from the -ompany. The -ompany-ontrols its employees in the means, metho+ an+ res2lts of their

&or5, in the same manner that the for&ar+er -ontrols its o&nemployees in the means, manner an+ res2lts of their&or5. Compli-ations an+ -onf2sion res2lt *e-a2se the -ompany atthe same time -ontrols the for&ar+er in the res2lts of the latters&or5, &itho2t -ontrollin( ho&ever the means an+ manner of thefor&ar+er employees &or5. This intera-tion is *est e'empli6e+ *ythe a++2-e+ evi+en-e, parti-2larly the a8+avits of petitioners&areho2se mana(er Gre(orio an+ Se-tion Hea+ a&ar +is-2sse+*elo&.

9rom the perspe-tive of the 2nion in the present -ase, &e note thatthe for&ar+in( a(reements &ere alrea+y in pla-e &hen the -2rrent

CA &as si(ne+. n this sense, the 2nion a--epte+ the for&ar+in(arran(ement, al*eit impli-itly, &hen it si(ne+ the CA &ith the-ompany. There*y, the 2nion a(ree+, a(ain impli-itly *y its silen-ean+ a--eptan-e, that ?o*s relate+ to the -ontra-te+ for&ar+in(a-tivities are not re(2lar -ompany a-tivities an+ are not to*e 2n+erta5en *y re(2lar employees fallin( &ithin the s-ope of the*ar(ainin( 2nit *2t *y the for&ar+ers employees. Th2s, the s5illsre<2irements an+ ?o* -ontent *et&een for&ar+ers ?o*s an+*ar(ainin( 2nit ?o*s may *e the same, an+ they may even &or5 onthe same -ompany pro+2-ts, *2t their &or5 for +iIerent p2rposesan+ for +iIerent entities -ompletely +istin(2ish an+ separatefor&ar+er an+ -ompany employees from one another. A -leri-al ?o*,

therefore, if 2n+erta5en *y a for&ar+ers employee in s2pport of for&ar+in( a-tivities, is not a CA)-overe+ 2n+erta5in( or a re(2lar-ompany a-tivity.

The *est evi+en-e s2pportin( this -on-l2sion -an *e fo2n+ in theCA itself. At this point, the 2nion -annot simply t2rn aro2n+ an+-laim thro2(h vol2ntary ar*itration the -ontrary position that somefor&ar+er employees sho2l+ *e re(2lar employees an+ sho2l+ *epart of its *ar(ainin( 2nit *e-a2se they 2n+erta5e re(2lar -ompanyf2n-tions. Dhat the 2nion &ants is a f2n-tion of ne(otiations, orperhaps an appropriate a-tion *efore the National La*or RelationsCommission implea+in( the proper parties, *2t not a vol2ntaryar*itration that +oes not implea+ the aIe-te+ parties. The 2nion

4B



m2st not for(et, too, that *efore the in-l2sion of the for&ar+ersemployees in the *ar(ainin( 2nit -an *e -onsi+ere+, theseemployees m2st 6rst *e proven to *e re(2lar -ompany employees.As alrea+y mentione+, the 2nion +oes not even have thepersonality to ma5e this -laim for these for&ar+ers employees. Thisis the impenetra*le &all that the 2nion -annot, for no&, passthro2(h 2sin( the vol2ntary ar*itration pro-ee+in(s no& *efore 2son appeal.

Si(ni6-antly, the evi+en-e presente+ +oes not also prove the2nions point that for&ar+er employees 2n+erta5e -ompany ratherthan the for&ar+ers1 a-tivities. De say this min+f2l that for&ar+in(in-l2+es a &hole ran(e of a-tivities that may +2pli-ate -ompanya-tivities in terms of the e'a-t -hara-ter an+ -ontent of the ?o*+one an+ even of the s5ills re<2ire+, *2t -annot *e le(itimatelyla*ele+ as -ompany a-tivities *e-a2se they properly pertain tofor&ar+in( that the -ompany has -ontra-te+ o2t.

The 2nions o&n evi+en-e, in fa-t, spea5s a(ainst the point the2nion &ishes to prove. Spe-i6-ally, the a8+avits of for&ar+er PNemployees arit, reven+i+o, an+ Enano, s2*mitte+ in evi+en-e *ythe 2nion, -on6rm that the &or5 they &ere +oin( &as

pre+ominantly relate+ to for&ar+in( or the shipment or transport of the petitioners 6nishe+ (oo+s to overseas +estinations, parti-2larlyto Germany an+ the =nite+ States of Ameri-a !!SA$.

The essential nat2re of the o2tso2r-e+ servi-es is not s2*stantiallyaltere+ *y the -laim of the three PN employees that theyo--asionally +o &or5 that pertains to the -ompanys 6nishe+ (oo+ss2pervisor or a -ompany employee s2-h as the inspe-tion of (oo+sto *e shippe+ an+ inventory of 6nishe+ (oo+s. This &as -lari6e+ *ypetitioners &areho2se mana(er Gre(orio an+ Se-tion Hea+a&ar in their respe-tive a8+avits. They e'plaine+ that the threePN employees +o not -on+2-t inventory of 6nishe+ (oo+s0 rather,

as part of the -ontra-t, PN personnel have to -o2nt the *o'es of 6nishe+ pro+2-ts they loa+ into the tr2-5s to ens2re that the<2antity -orrespon+s &ith the entries ma+e in the loa+in( form0in-l2+e+ in the -ontra-te+ servi-e is the preparation of transport+o-2ments li5e the air&ay *ill0 the air&ay *ill is prepare+ in theo8-e an+ a PN employee -alls for the air&ay *ill n2m*er, a sti-5erla*el is then printe+0 an+ that the 2se of the -ompany for5lift isne-essary for the loa+in( of the 6nishe+ (oo+s into the tr2-5. Th2s,even on the evi+entiary si+e, the 2nions -ase m2st fail.

hilippine Airlines v. Li(an !G.R. No. 4B4#,

9e*r2ary "@, "##$

Le(itimate -ontra-tin( an+ la*or)only -ontra-tin( are +e6ne+ inepartment r+er !..$ No. )#", Series of "##" !R2lesmplementin( Arti-les #B to #@ of the La*or Co+e, as amen+e+$as follo&s

Se-tion 3. Trilateral relationshi( in contractingarrange$ents" n legitimate contracting, there e'ists a trilateralrelationship 2n+er &hi-h there is a -ontra-t for a spe-i6- ?o*, &or5or servi-e *et&een the prin-ipal an+ the -ontra-tor ors2*-ontra-tor, an+ a -ontra-t of employment *et&een the

-ontra-tor or s2*-ontra-tor an+ its &or5ers. Hen-e, there are threeparties involve+ in these arran(ements, the prin-ipal &hi-h+e-i+es to farm o2t a ?o* or servi-e to a -ontra-tor ors2*-ontra-tor, the -ontra-tor or s2*-ontra-tor &hi-h has the-apa-ity to in+epen+ently 2n+erta5e the performan-e of the ?o*,&or5 or servi-e, an+ the -ontra-t2al &or5ers en(a(e+ *y the-ontra-tor or s2*-ontra-tor to a--omplish the ?o*, &or5 orservi-e. !Emphasis an+ 2n+ers-orin( s2pplie+$

9rom the re-or+s of the -ase, it is (athere+ that the &or5 performe+*y almost all of the respon+ents loa+in( an+ 2nloa+in( of *a((a(ean+ -ar(o of passen(ers is +ire-tly relate+ to the main *2siness of petitioner. An+ the e<2ipment 2se+ *y respon+ents as station

loa+ers, s2-h as trailers an+ -onveyors, are o&ne+ *y petitioner.etitioner asserts, ho&ever, that mere -omplian-e &ith s2*stantial-apital re<2irement s28-es for Syner(y to *e -onsi+ere+ ale(itimate -ontra-tor, -itin( Neri v" National Labor RelationsCo$$ission. etitioners relian-e on sai+ -ase is mispla-e+.

n Neri the La*or Ar*iter an+ the NLRC *oth +etermine+ that2il+in( Care Corporation ha+ a -apital sto-5 of million f2llys2*s-ri*e+ an+ pai+ for. The -orporations stat2s as in+epen+ent-ontra-tor ha+ in fa-t *een previo2sly -on6rme+ in an earlier-ase *y this Co2rt &hi-h fo2n+ it to *e servin(, amon( others, a2niversity, an international *an5, a *i( lo-al *an5, a hospital

-enter, (overnment a(en-ies, et-.n star5 -ontrast to the -ase at *ar, &hile petitioner stea+fastlyasserte+ *efore the La*or Ar*iter an+ the NLRC that Syner(y has as2*stantial -apital to en(a(e in le(itimate -ontra-tin(, it faile+ topresent evi+en-e thereon. As the NLRC hel+

The +e-ision of the La*or Ar*iter merely mentione+ on pa(e of his +e-ision that respon+ent SNERG has s2*stantial -apital, *2tthere is no sho&in( in the re-or+s as to ho& m2-h is that -apital.Neither ha+ respon+ents sho&n that SNERG has s2-h s2*stantial-apital. ' ' ' !=n+ers-orin( s2pplie+$

t &as only after the appellate -o2rt ren+ere+ its -hallen(e+

4;



e-ision of Septem*er "@, "##" &hen petitioner, in its Motion forRe-onsi+eration of the +e-ision, so2(ht to prove, for the 6rst time,Syner(ys s2*stantial -apitali7ation *y atta-hin( photo-opies of Syner(ys 6nan-ial statements, e.(., *alan-e sheets, statements of in-ome an+ retaine+ earnin(s, mar5e+ as Anne'es A A)4.

More si(ni6-antly, ho&ever, is that respon+ents &or5e+ alon(si+epetitioners re(2lar employees &ho &ere performin( i+enti-al&or5. As San Miguel Cor(oration v" Aballa an+ Dole Phili((ines Inc"v" Esteva et al" tea-h, s2-h is an in+i-i2m of la*or)only -ontra-tin(.

9or la*or)only -ontra-tin( to e'ist, Se-tion of .. No. )#"&hi-h re<2ires an. of t&o elements to *e present is, for-onvenien-e, re)<2ote+

!i$ The -ontra-tor or s2*-ontra-tor +oes not have substantialcapital or investment &hi-h relates to the ?o*, &or5 or servi-e to*e performe+ and the employees re-r2ite+, s2pplie+ or pla-e+ *ys2-h -ontra-tor or s2*-ontra-tor are performin( a-tivities &hi-hare directly related to the main business of the principal, OR

!ii$ The -ontra-tor +oes not e'er-ise the right to control over theperforman-e of the &or5 of the -ontra-t2al employee. !Emphasisan+ CATALOATN s2pplie+$

Even if only one of the t&o elements is present then, there is la*or)only -ontra-tin(.

The -ontrol test element 2n+er the imme+iately)<2ote+ para(raph!ii$, &hi-h &as not present in the ol+ mplementin( R2les!epartment r+er No. #, Series of @@;$,e-hoes the prevailin( ?2rispr2+ential tren+ elevatin( s2-h element as a primary+eterminant of employer)employee relationship in ?o* -ontra-tin(a(reements.

ne &ho -laims to *e an in+epen+ent -ontra-tor has to prove thathe -ontra-te+ to +o the &or5 a--or+in( to his o&n metho+s an+

&itho2t *ein( s2*?e-t to the employers -ontrol e'-ept only as tothe res2lts.

Dhile petitioner -laime+ that it &as Syner(ys s2pervisors &hoa-t2ally s2pervise+ respon+ents, it faile+ to present evi+en-ethereon. t +i+ not even i+entify &ho &ere the Syner(y s2pervisorsassi(ne+ at the &or5pla-e.

Even the parties A(reement +oes not len+ s2pport to petitioners-laim. etitioner in fa-t a+mitte+ that it 6'es the &or5 s-he+2le of respon+ents as their &or5 &as +epen+ent on the fre<2en-y of plane arrivals. An+ as the NLRC fo2n+, petitioners mana(ers an+s2pervisors approve+ respon+ents &ee5ly &or5 assi(nments an+

respon+ents an+ other re(2lar AL employees &ere all referre+ toas station atten+ants of the -ar(o operation an+ airfrei(ht servi-esof petitioner.

Respon+ents havin( performe+ tas5s &hi-h are 2s2ally ne-essaryan+ +esira*le in the air transportation *2siness of petitioner, theysho2l+ *e +eeme+ its re(2lar employees an+ Syner(y as a la*or)only -ontra-tor.

The e'press provision in the A(reement that Syner(y &as an

in+epen+ent -ontra-tor an+ there &o2l+ *e no employer)employeerelationship *et&een KSyner(y an+>or its employees on one han+,an+ Kpetitioner on the other han+ is not le(ally *in+in( an+-on-l2sive as -ontra-t2al provisions are not vali+ +eterminants of the e'isten-e of s2-h relationship. 9or it is the totality of thefacts and surrounding circumstances of the case &hi-h is+eterminative of the parties relationship.

San Mi(2el Corporation v. A*alla !G.R. No.

4@#, :2ne ", "##$ The test to +etermine the e'isten-e of in+epen+ent -ontra-torship

is whether one claiming to be an independent contractorhas contracted to do the wor' according to his ownmethods and without being sub(ect to the control of theemployer! e%cept only as to the results of the wor' .

n le(itimate la*or -ontra-tin(, the la& -reates an employer)employee relationship for a limite+ p2rpose, i"e" to ens2re that theemployees are pai+ their &a(es. The prin-ipal employer *e-omes ?ointly an+ severally lia*le &ith the ?o* -ontra-tor, only for thepayment of the employees &a(es &henever the -ontra-tor fails topay the same. ther than that, the prin-ipal employer is notresponsi*le for any -laim ma+e *y the employees.

n la*or)only -ontra-tin(, the stat2te -reates an employer)employee relationship for a -omprehensive p2rpose to prevent a-ir-2mvention of la*or la&s. The -ontra-tor is -onsi+ere+ merely ana(ent of the prin-ipal employer an+ the latter is responsi*le to theemployees of the la*or)only -ontra-tor as if s2-h employees ha+*een +ire-tly employe+ *y the prin-ipal employer.

The Contra-t of Servi-es *et&een SMC an+ S2nQo&er sho&s thatthe parties -learly +isavo&e+ the e'isten-e of an employer)employee relationship *et&een SMC an+ private respon+ents. Thelan(2a(e of a -ontra-t is not, ho&ever, +eterminative of the partiesrelationship0 rather it is the totality of the fa-ts an+ s2rro2n+in(-ir-2mstan-es of the -ase. A party -annot +i-tate, *y the mere

4



e'pe+ient of a 2nilateral +e-laration in a -ontra-t, the -hara-ter of its *2siness, i"e" &hether as la*or)only -ontra-tor or ?o* -ontra-tor,it *ein( -r2-ial that its -hara-ter *e meas2re+ in terms of an++etermine+ *y the -riteria set *y stat2te.

SMC ar(2es that S2nQo&er -o2l+ not have *een iss2e+ a -erti6-ateof re(istration as a -ooperative if it ha+ no s2*stantial -apital.

Dhile in+ee+ S2nQo&er &as iss2e+ Certi6-ate of Re(istration No.L#); on 9e*r2ary #, @@" *y the Cooperative evelopment

A2thority, this merely sho&s that it ha+ at least",###.## in pai+)2p share -apital as man+ate+ *y Se-tion of Arti-le 4 of Rep2*li-A-t No. B@3, other&ise 5no&n as the Cooperative Co+e, &hi-hamo2nt -annot *e -onsi+ere+ s2*stantial -apitali7ation.

Dhat appears is that S2nQo&er +oes not have s2*stantial-apitali7ation or investment in the form of tools, e<2ipment,ma-hineries, &or5 premises an+ other materials to <2alify it as anin+epen+ent -ontra-tor.

n the other han+, it is (athere+ that the lot, *2il+in(, ma-hineriesan+ all other &or5in( tools 2tili7e+ *y private respon+ents in-arryin( o2t their tas5s &ere o&ne+ an+ provi+e+ *y SMC. An+

from the ?o* +es-ription provi+e+ *y SMC itself, the &or5 assi(ne+to private respon+ents &as +ire-tly relate+ to the a<2a-2lt2reoperations of SMC. =n+o2*te+ly, the nat2re of the &or5 performe+*y private respon+ents in shrimp harvestin(, re-eivin( an+ pa-5in(forme+ an inte(ral part of the shrimp pro-essin( operations of SMC.As for ?anitorial an+ messen(erial servi-es, that they are -onsi+ere++ire-tly relate+ to the prin-ipal *2siness of the employer has *een ?2rispr2+entially re-o(ni7e+.

92rthermore, S2nQo&er +i+ not -arry on an in+epen+ent *2sinessor 2n+erta5e the performan-e of its servi-e -ontra-t a--or+in( toits o&n manner an+ metho+, free from the -ontrol an+ s2pervision

of its prin-ipal, SMC, its apparent role havin( *een merely to re-r2itpersons to &or5 for SMC.

Th2s, it is (athere+ from the evi+en-e a++2-e+ *y privaterespon+ents *efore the la*or ar*iter that their +aily time re-or+s&ere si(ne+ *y SMC s2pervisors 5e 2ente*ella, :oemel Haro, :oemari Ra-a, Er&in T2monon(, E+ison Ar(2ello, an+ Stephenala*ri-a, &hi-h fa-t sho&s that SMC e'er-ise+ the po&er of -ontrolan+ s2pervision over its employees. An+-ontrol of the premises in&hi-h private respon+ents &or5e+ &as *y SMC. These ten+ to+isprove the in+epen+en-e of the -ontra-tor.

More. rivate respon+ents ha+ *een &or5in( in the a<2a pro-essin(

plant insi+e the SMC -ompo2n+ alon(si+e re(2lar SMC shrimppro-essin( &or5ers performin( i+enti-al ?o*s 2n+er the same SMCs2pervisors. This -ir-2mstan-e is another in+i-i2m of the e'isten-eof a la*or)only -ontra-torship.

An+ as private respon+ents alle(e+ in their :oint A8+avit &hi-h +i+not es-ape the o*servation of the CA, no sho&in( to the -ontraryhavin( *een proIere+ *y SMC, S2nQo&er +i+ not -ater to -lientsother than SMC, an+ &ith the -los2re of SMCs a-olo+ Shrimpro-essin( lant, S2nQo&er li5e&ise -ease+ to e'ist. This Co2rtsr2lin( in San Miguel Cor(oration v" MAERC Integrated ServicesInc" is th2s instr2-tive.

''' Nor +o &e *elieve MAERC to have an in+epen+ent *2siness.Not only &as it set 2p to spe-i6-ally meet the pressin( nee+s of SMC &hi-h &as then havin( la*or pro*lems in its se(re(ation+ivision, none of its &or5ers &as also ever assi(ne+ to any otheresta*lishment, th2s -onvin-in( 2s that it &as -reate+ solely toservi-e the nee+s of SMC. Nat2rally, &ith the severan-e of relationship *et&een MAERC an+ SMC follo&e+ MAERCs -essationof operations, the loss of ?o*s for the &hole MAERC &or5for-e an+the res2ltin( a-tions instit2te+ *y the &or5ers. !=n+ers-orin(s2pplie+$

All the fore(oin( -onsi+erations a8rm *y more than s2*stantialevi+en-e the e'isten-e of an employer)employee relationship*et&een SMC an+ private respon+ents.

Sin-e private respon+ents &ho &ere en(a(e+ in shrimp pro-essin(performe+ tas5s 2s2ally ne-essary or +esira*le in the a<2a-2lt2re*2siness of SMC, they sho2l+ *e +eeme+ re(2lar employees of thelatter an+ as s2-h are entitle+ to all the *ene6ts an+ ri(htsapp2rtenant to re(2lar employment. They sho2l+ th2s *e a&ar+e++iIerential pay -orrespon+in( to the +iIeren-e *et&een the &a(esan+ *ene6ts (iven them an+ those a--or+e+ SMCs other re(2laremployees.

Respe-tin( the private respon+ents &ho &ere tas5e+ &ith ?anitorialan+ messen(erial +2ties, this Co2rt <2otes &ith approval theappellate -o2rts r2lin( thereon

Those performin( ?anitorial an+ messen(erial servi-esho&ever a-<2ire+ re(2lar stat2s only after ren+erin( one)yearservi-e p2rs2ant to Arti-le "# of the La*or Co+e. Altho2(h ?anitorial an+ messen(erial servi-es are -onsi+ere+ +ire-tly relate+to the a<2a-2lt2re *2siness of SMC, they are +eeme+ 2nne-essaryin the -on+2-t of its prin-ipal *2siness0 hen-e, the +istin-tion!See Coca Cola #ottlers Phils" Inc" v" NLRC, 3#; SCRA 3, 3B)3;an+ Phili((ine #an- o' Co$$unications v" NLRC, su(ra, p. 3@$.

4@



As for those of private respon+ents &ho &ere en(a(e+ in ?anitorialan+ messen(erial tas5s, they fall 2n+er the se-on+ -ate(ory an+are th2s entitle+ to +iIerential pay an+ *ene6ts e'ten+e+ to otherSMC re(2lar employees from the +ay imme+iately follo&in( their6rst year of servi-e.

Meral-o n+2strial En(ineerin( Servi-es v. NLRC

!G.R. No. 44#", Mar-h 4, "##$

The Co2rt of Appeals in+ee+ erre+ &hen it r2le+ that the petitioner&as ?ointly an+ soli+arily lia*le &ith the private respon+ents asre(ar+s the payment of separation pay.

The appellate -o2rt 2se+ as *asis Arti-le #@ of the La*or Co+e, asamen+e+, in hol+in( the petitioner soli+arily lia*le &ith the privaterespon+ents for the payment of separation pay.

Ho&ever, the afore)<2ote+ provision m2st *e rea+ in -on?2n-tion&ith Arti-les #B an+ #; of the La*or Co+e, as amen+e+.

Arti-le #; of the La*or Co+e, as amen+e+, +e6nes an in+ire-temployer as any person, partnership, asso-iation or -orporation&hi-h, not *ein( an employer, -ontra-ts &ith an in+epen+ent

-ontra-tor for the performan-e of any &or5, tas5, ?o* or pro?e-t. Toens2re that the -ontra-tors employees are pai+ their appropriate&a(es, Arti-le #B of the La*or Co+e, as amen+e+%

Ta5en to(ether, an in+ire-t employer !as +e6ne+ *y Arti-le #;$-an only *e hel+ soli+arily lia*le &ith the in+epen+ent -ontra-tor ors2*-ontra-tor !as provi+e+ 2n+er Arti-le #@$ in the event that thelatter fails to pay the &a(es of its employees !as +es-ri*e+ inArti-le #B$.

Hen-e, &hile it is tr2e that the petitioner &as the in+ire-t employerof the -omplainants, it -annot *e hel+ lia*le in the same &ay as theemployer in every respe-t. The petitioner may *e -onsi+ere+an in+ire-t employer only for purposes of unpaid wages. Asthis Co2rt s2--in-tly e'plaine+ in Phili((ine Airlines Inc" v" NationalLabor Relations Co$$ission

Dhile =SS is an in+epen+ent -ontra-tor 2n+er the se-2rity servi-ea(reement an+ AL may *e -onsi+ere+ an in+ire-t employer, thatstat2s +i+ not ma5e AL the employer of the se-2rity (2ar+s inevery respe-t. As -orre-tly posite+ *y the 8-e of the Soli-itorGeneral, AL may *e -onsi+ere+ an in+ire-t employer only forp2rposes of 2npai+ &a(es sin-e Arti-le #B, &hi-h is appli-a*le tothe sit2ation -ontemplate+ in Se-tion #;, spea5s of &a(es. The-on-ept of in+ire-t employer only relates or refers to the lia*ilityfor 2npai+ &a(es. Rea+ to(ether, Arti-les #B an+ #@ simply

mean that the party &ith &hom an in+epen+ent -ontra-tor +eals issoli+arily lia*le &ith the latter for 2npai+ &a(es, an+ only to thate'tent an+ for that p2rpose that the latter is -onsi+ere+ a +ire-temployer. The term &a(e is +e6ne+ in Arti-le @;!f$ of the La*orCo+e as the rem2neration of earnin(s, ho&ever +esi(nate+,-apa*le of *ein( e'presse+ in terms of money, &hether 6'e+ oras-ertaine+ on a time, tas5, pie-e, or -ommission *asis, or othermetho+ of -al-2latin( the 2n&ritten -ontra-t of employment for&or5 +one or to *e +one, or for servi-es ren+ere+ or to *e ren+ere+an+ in-l2+es the fair an+ reasona*le val2e, as +etermine+ *y the

Se-retary of La*or, of *oar+, lo+(in(, or other fa-ilities -2stomarilyf2rnishe+ *y the employer to the employee.

92rther, there is no <2estion that private respon+ents are operatin(as an in+epen+ent -ontra-tor an+ that the -omplainants &ere theiremployees. There &as no employer)employee relationship thate'iste+ *et&een the petitioner an+ the -omplainants an+, th2s, theformer -o2l+ not have +ismisse+ the latter from employment. nlyprivate respon+ents, as the -omplainants employer, -an terminatetheir servi-es, an+ sho2l+ it *e +one ille(ally, *e hel+ lia*letherefor. The only instan-e &hen the prin-ipal -an also *e hel+lia*le &ith the in+epen+ent -ontra-tor or s2*-ontra-tor for the*a-5&a(es an+ separation pay of the latters employees is &henthere is proof that the prin-ipal -onspire+ &ith the in+epen+ent-ontra-tor or s2*-ontra-tor in the ille(al +ismissal of theemployees, th2s

The lia*ility arisin( from an ille(al +ismissal is 2nli5e an or+er topay the stat2tory minim2m &a(e, *e-a2se the &or5ers ri(ht tos2-h &a(e is +erive+ from la&. The proposition that payment of *a-5 &a(es an+ separation pay sho2l+ *e -overe+ *y Arti-le #@,&hi-h hol+s an in+ire-t employer soli+arily responsi*le &ith his-ontra-tor or s2*-ontra-tor for any violation of any provision of thisCo+e, &o2l+ have *een tena*le if there &ere proof ) there &asnone in this -ase ) that the prin-ipal>employer ha+ -onspire+ &iththe -ontra-tor in the a-ts (ivin( rise to the ille(al +ismissal.

t is the esta*lishe+ fa-t of -onspira-y that &ill tie the prin-ipal orin+ire-t employer to the ille(al +ismissal of the -ontra-tor ors2*-ontra-tors employees. n the present -ase, there is noalle(ation, m2-h less proof presente+, that the petitioner -onspire+&ith private respon+ents in the ille(al +ismissal of the lattersemployees0 hen-e, it -annot *e hel+ lia*le for the same.

Neither -an the lia*ility for the separation pay of the -omplainants*e e'ten+e+ to the petitioner *ase+ on -ontra-t. Contra-t r+er No.BB)4 e'e-2te+ *et&een the petitioner an+ the privaterespon+ents -ontains no provision for separation pay in the eventthat the petitioner terminates the same. t is *asi- that a -ontra-t is

#



the la& *et&een the parties an+ the stip2lations therein, provi+e+that they are not -ontrary to la&, morals, (oo+ -2stoms, p2*li-or+er or p2*li- poli-y, shall *e *in+in( as *et&een theparties.Hen-e, if the -ontra-t +oes not provi+e for s2-h a lia*ility,this Co2rt -annot ?2st rea+ the same into the -ontra-t &itho2tpossi*ly violatin( the intention of the parties.

t is also &orth notin( that altho2(h the iss2e in CA)G.R. S No.##B pertains to private respon+ents ri(ht to reim*2rsement frompetitioner for the monetary a&ar+s in favor of the -omplainants,they limite+ their ar(2ments to the monetary a&ar+s for2n+erpayment of &a(es an+ non)payment of overtime pay, an+&ere -onspi-2o2sly silent on the monetary a&ar+ for separationpay. Th2s, private respon+ents sole lia*ility for the separation payof their employees sho2l+ have *een +eeme+ settle+ an+ alrea+y*eyon+ the po&er of the Co2rt of Appeals to resolve, sin-e it &asan iss2e never raise+ *efore it.

Altho2(h petitioner is not lia*le for -omplainants separation pay,the Co2rt -onforms to the -onsistent 6n+in(s in the pro-ee+in(s*elo& that the petitioner is soli+arily lia*le &ith the privaterespon+ents for the ?2+(ment a&ar+s for 2n+erpayment of &a(es

an+ non)payment of overtime pay.

n this -ase, ho&ever, private respon+ents ha+ alrea+y poste+ as2rety *on+ in an amo2nt s28-ient to -over all the ?2+(menta&ar+s +2e the -omplainants, in-l2+in( those for 2n+erpayment of &a(es an+ non)payment of overtime pay. The ?oint an+ severallia*ility of the prin-ipal &ith the -ontra-tor an+ s2*-ontra-tor &ereena-te+ to ens2re -omplian-e &ith the provisions of the La*orCo+e, prin-ipally those on stat2tory minim2m &a(e. This lia*ilityfa-ilitates, if not (2arantees, payment of the &or5ers-ompensation, th2s, (ivin( the &or5ers ample prote-tion asman+ate+ *y the @; Constit2tion. Dith private respon+ents

s2rety *on+, it -an therefore *e sai+ that the p2rpose of the La*orCo+e provision on the soli+ary lia*ility of the in+ire-t employer isalrea+y a--omplishe+ sin-e the interest of the -omplainants arealrea+y a+e<2ately prote-te+. Conse<2ently, it &ill *e f2tile to-ontin2o2sly hol+ the petitioner ?ointly an+ soli+arily lia*le &ith theprivate respon+ents for the ?2+(ment a&ar+s for 2n+erpayment of &a(es an+ non)payment of overtime pay.

2t &hile this Co2rt ha+ previo2sly r2le+ that the in+ire-t employer-an re-over &hatever amo2nt it ha+ pai+ to the employees ina--or+an-e &ith the terms of the servi-e -ontra-t *et&een itself an+ the -ontra-tor, the sai+ r2lin( -annot *e applie+ in reverse tothis -ase as to allo& the private respon+ents !the in+epen+ent

-ontra-tor$, &ho pai+ for the ?2+(ment a&ar+s in f2ll, to re-overfrom the petitioner !the in+ire-t employer$.

rivate respon+ents have nothin( more to re-over from petitioner.

etitioner ha+ alrea+y han+e+ over to private respon+ent the&a(es an+ other *ene6ts of the -omplainants. Re-or+s reveal thatit ha+ -omplie+ &ith -omplainants salary in-reases in a--or+an-e&ith the minim2m &a(e set *y Rep2*li- A-t No. B;"; *y faithf2llya+?2stin( the -ontra-t pri-e for the ?anitorial servi-es it -ontra-te+

&ith private respon+ents. This is a 6n+in( of fa-t ma+e *y theLa*or Ar*iter, 2nto2-he+ *y the NLRC an+ e'pli-itly a8rme+ *y theCo2rt of Appeals, an+ &hi-h sho2l+ alrea+y *in+ this Co2rt.

Manila Ele-tri- Company v. enamira !G.R. No.

4";, :2ly 4, "##$Moreover, ASA an+ A9SS are not la*or)only -ontra-tors. There isla*or only -ontra-t &hen the person a-tin( as -ontra-tor is-onsi+ere+ merely as an a(ent or interme+iary of the prin-ipal &hois responsi*le to the &or5ers in the same manner an+ to the samee'tent as if they ha+ *een +ire-tly employe+ *y him. n the other

han+, ?o* !in+epen+ent$ -ontra-tin( is present if the follo&in(-on+itions are met !a$ the -ontra-tor -arries on an in+epen+ent*2siness an+ 2n+erta5es the -ontra-t &or5 on his o&n a--o2nt2n+er his o&n responsi*ility a--or+in( to his o&n manner an+metho+, free from the -ontrol an+ +ire-tion of his employer orprin-ipal in all matters -onne-te+ &ith the performan-e of the &or5e'-ept to the res2lt thereof0 an+ !*$ the -ontra-tor has s2*stantial-apital or investments in the form of tools, e<2ipment, ma-hineries,&or5 premises an+ other materials &hi-h are ne-essary in the-on+2-t of his *2siness. Given the a*ove +istin-tion an+ theprovisions of the se-2rity servi-e a(reements entere+ into *ypetitioner &ith ASA an+ A9SS, &e are -onvin-e+ that ASA an+

A9SS &ere en(a(e+ in ?o* -ontra-tin(. The in+ivi+2al respon+ents -an not *e -onsi+ere+ as re(2laremployees of the MERALC for, altho2(h se-2rity servi-es arene-essary an+ +esira*le to the *2siness of MERALC, it is not+ire-tly relate+ to its prin-ipal *2siness an+ may even *e-onsi+ere+ 2nne-essary in the -on+2-t of MERALCs prin-ipal*2siness, &hi-h is the +istri*2tion of ele-tri-ity.

92rthermore, the fa-t that the in+ivi+2al respon+ents 6le+ their-laim for 2npai+ monetary *ene6ts a(ainst ASA is a -learin+i-ation that the in+ivi+2al respon+ents a-5no&le+(e that ASAis their employer.

D i + i +i i+ l + i i h ? i i i f h @; C i i



De -annot (ive -re+en-e to in+ivi+2al respon+ents insisten-e thatthey &ere a*sor*e+ *y A9SS &hen MERALCs se-2rity servi-ea(reement &ith ASA &as terminate+. The in+ivi+2al respon+entsfaile+ to present any evi+en-e to -on6rm that A9SS a*sor*e+them into its &or5for-e. Th2s, respon+ent enamira &as notretaine+ in his post at MERALC sin-e :2ly ", @@" +2e to thetermination of the se-2rity servi-e a(reement of MERALC &ithASA. As for the rest of the in+ivi+2al respon+ents, they retaine+their post only as hol+)over (2ar+s 2ntil the se-2rity (2ar+s of

A9SS too5 over their post on A2(2st B, @@".

n the present -ase, respon+ent enamira has *een oI)+etail forseventeen +ays &hile the rest of the in+ivi+2al respon+ents haveonly *een oI) +etail for 6ve +ays &hen they amen+e+ their-omplaint on A2(2st , @@" to in-l2+e the -har(e of ille(al+ismissal. The in-l2sion of the -har(e of ille(al +ismissal then &aspremat2re. Nonetheless, *earin( in min+ that ASA simplystoppe+ (ivin( the in+ivi+2al respon+ents any assi(nment an+ theirina-tivity -learly persiste+ *eyon+ the si')month perio+ allo&e+ *yArti-le "B of the La*or Co+e, the in+ivi+2al respon+ents &ere, ineIe-t, -onstr2-tively +ismisse+ *y ASA from employment, hen-e,they sho2l+ *e reinstate+.

The fa-t that there is no a-t2al an+ +ire-t employer)employeerelationship *et&een MERALC an+ the in+ivi+2al respon+ents+oes not e'onerate MERALC from lia*ility as to the monetary-laims of the in+ivi+2al respon+ents. Dhen MERALC -ontra-te+for se-2rity servi-es &ith ASA as the se-2rity a(en-y that hire+in+ivi+2al respon+ents to &or5 as (2ar+s for it, MERALC *e-amean in+ire-t employer of in+ivi+2al respon+ents p2rs2ant to Arti-le#; of the La*or Co+e, &hi-h rea+s

ART. #;. Indirect e$(lo.er ) The provisions of the imme+iatelypre-e+in( Arti-le shall li5e&ise apply to any person, partnership,asso-iation or -orporation &hi-h, not *ein( an employer, -ontra-ts

&ith an in+epen+ent -ontra-tor for the performan-e of any &or5,tas5, ?o* or pro?e-t.

Dhen ASA as -ontra-tor faile+ to pay the in+ivi+2al respon+ents,MERALC as prin-ipal *e-omes ?ointly an+ severally lia*le for thein+ivi+2al respon+ents &a(es, 2n+erArti-les #B an+ #@ of theLa*or Co+e, &hi-h provi+e

ASA is hel+ lia*le *y virt2e of its stat2s as +ire-t employer, &hileMERALC is +eeme+ the in+ire-t employer of the in+ivi+2alrespon+ents for the p2rpose of payin( their &a(es in the event of fail2re of ASA to pay them. This stat2tory s-heme (ives the&or5ers the ample prote-tion -onsonant &ith la*or an+ so-ial

?2sti-e provisions of the @; Constit2tion.

Ho&ever, as hel+ in Mariveles Shi(.ard Cor(" vs" Court o' A((eals the soli+ary lia*ility of MERALC &ith that of ASA +oesnot pre-l2+e the appli-ation of Arti-le "; of the Civil Co+e onthe ri(ht of reim*2rsement from his -o)+e*tor *y the one &hopai+, &hi-h provi+es

ART. ";. ayment ma+e *y one of the soli+ary +e*torse'tin(2ishes the o*li(ation. f t&o or more soli+ary +e*tors oIer to

pay, the -re+itor may -hoose &hi-h oIer to a--ept.He &ho ma+e the payment may -laim from his -o)+e*tors only theshare &hi-h -orrespon+s to ea-h, &ith the interest for the paymentalrea+y ma+e. f the payment is ma+e *efore the +e*t is +2e, nointerest for the intervenin( perio+ may *e +eman+e+.

Dhen one of the soli+ary +e*tors -annot, *e-a2se of hisinsolven-y, reim*2rse his share to the +e*tor payin( the o*li(ation,s2-h share shall *e *orne *y all his -o)+e*tors, in proportion to the+e*t of ea-h.

ASA may not see5 e'-2lpation *y -laimin( that MERALCspayments to it &ere ina+e<2ate for the in+ivi+2al respon+ents

la&f2l -ompensation. As an employer, ASA is -har(e+ &ith5no&le+(e of la*or la&s an+ the a+e<2a-y of the -ompensationthat it +eman+s for -ontra-t2al servi-es is its prin-ipal -on-ern an+not any others.

LE hils. v. Esteva !G.R. No. No. B,

Novem*er 3#, "##B$As previo2sly +is-2sse+, the 6n+in( of the +2ly a2thori7e+representatives of the LE Se-retary that CAMC &as a la*or)only -ontra-tor is alrea+y -on-l2sive. This Co2rt -annot +eviatefrom sai+ 6n+in(.

This Co2rt, tho2(h, still notes that even an in+epen+ent revie& of the evi+en-e on re-or+, in -onsi+eration of the proper la*orstat2tes an+ re(2lations, &o2l+ res2lt in the same -on-l2sion thatCAMC &as en(a(e+ in prohi*ite+ a-tivities of la*or)only-ontra-tin(.

The e'isten-e of an in+epen+ent an+ permissi*le -ontra-torrelationship is (enerally esta*lishe+ *y the follo&in( -riteria&hether or not the -ontra-tor is -arryin( on an in+epen+ent*2siness0 the nat2re an+ e'tent of the &or50 the s5ill re<2ire+0 theterm an+ +2ration of the relationship0 the ri(ht to assi(n theperforman-e of a spe-i6e+ pie-e of &or50 the -ontrol an+

"

i i f th 5 t th th l 1 ith lt th f A ll + * th + t + * tt + *



s2pervision of the &or5 to another0 the employer1s po&er &ithrespe-t to the hirin(, 6rin( an+ payment of the -ontra-tor1s&or5ers0 the -ontrol of the premises0 the +2ty to s2pply thepremises tools, applian-es, materials an+ la*or0 an+ the mo+e,manner an+ terms of payment.

Dhile there is present in the relationship of petitioner an+ CAMCsome fa-tors s2((estive of an in+epen+ent -ontra-tor relationship!i"e", CAMC -hose &ho amon( its mem*ers sho2l+ *e sent to&or5 for petitioner0 petitioner pai+ CAMC the &a(es of themem*ers, pl2s a per-enta(e thereof as a+ministrative -har(e0CAMC pai+ the &a(es of the mem*ers &ho ren+ere+ servi-e topetitioner$, many other fa-tors are present &hi-h &o2l+ in+i-ate ala*or)only -ontra-tin( arran(ement *et&een petitioner an+CAMC.

*irst , altho2(h petitioner to2ts the m2lti)million pesos assets of CAMC, it +oes &ell to remem*er that s2-h &ere amasse+ in theyears follo&in( its esta*lishment. n @@3, &hen CAMC &asesta*lishe+ an+ the Servi-e Contra-t *et&een petitioner an+CAMC &as entere+ into, CAMC only ha+ B,B##.## pai+)2p-apital, &hi-h -o2l+ har+ly *e -onsi+ere+ s2*stantial. t only

mana(e+ to in-rease its -apitali7ation an+ assets in the s2--ee+in(years *y -ontin2ally an+ +e6antly en(a(in( in &hat ha+ *een+e-lare+ *y a2thori7e+ LE o8-ials as la*or)only -ontra-tin(.

Second, CAMC +i+ not -arry o2t an in+epen+ent *2siness frompetitioner. t &as pre-isely esta*lishe+ to ren+er servi-es topetitioner to a2(ment its &or5for-e +2rin( pea5 seasons. etitioner&as its only -lient. Even as CAMC ha+ its o&n o8-e an+ o8-ee<2ipment, these &ere mainly 2se+ for a+ministrative p2rposes0the tools, ma-hineries, an+ e<2ipment a-t2ally 2se+ *y CAMCmem*ers &hen ren+erin( servi-es to the petitioner *elon(e+ to thelatter.

Third petitioner e'er-ise+ -ontrol over the CAMC mem*ers,in-l2+in( respon+ents. etitioner attempts to ref2te -ontrol *yalle(in( the presen-e of a CAMC s2pervisor in the &or5premises. et, the mere presen-e &ithin the premises of as2pervisor from the -ooperative +i+ not ne-essarily mean thatCAMC ha+ -ontrol over its mem*ers. Se-tion !$, R2le F, oo5 of the implementin( r2les of the La*or Co+e, as amen+e+,re<2ire+ for permissi*le ?o* -ontra-tin( that the -ontra-tor2n+erta5es the -ontra-t &or5 on his a--o2nt, 2n+er his o&nresponsi*ility, a--or+in( to his o&n manner an+ metho+, free fromthe -ontrol an+ +ire-tion of his employer or prin-ipal in all matters-onne-te+ &ith the performan-e of the &or5 e'-ept as to the

res2lts thereof. As alle(e+ *y the respon+ents, an+ 2nre*2tte+ *ypetitioner, CAMC mem*ers, *efore &or5in( for the petitioner,ha+ to 2n+er(o instr2-tions an+ pass the trainin( provi+e+ *ypetitionerJs personnel. t &as petitioner &ho +etermine+ an+prepare+ the &or5 assi(nments of the CAMC mem*ers. CAMCmem*ers &or5e+ &ithin petitionerJs plantation an+ pro-essin(plants alon(si+e re(2lar employees performin( i+enti-al ?o*s, a-ir-2mstan-e re-o(ni7e+ as an in+i-i2m of a la*or)only-ontra-torship.

*ourth CAMC &as not en(a(e+ to perform a spe-i6- an+ spe-ial ?o* or servi-e. n the Servi-e Contra-t of @@3, CAMC a(ree+ toassist petitioner in its +aily operations, an+ perform o++ ?o*s asmay *e assi(ne+. CAMC -omplie+ &ith this vent2re *y assi(nin(mem*ers to petitioner. Apart from that, no other parti-2lar ?o*,&or5 or servi-e &as re<2ire+ from CAMC, an+ it is apparent, &iths2-h an arran(ement, that CAMC merely a-te+ as a re-r2itmenta(en-y for petitioner. Sin-e the 2n+erta5in( of CAMC +i+ notinvolve the performan-e of a spe-i6- ?o*, *2t rather the s2pply of manpo&er only, CAMC -learly -on+2-te+ itself as a la*or)only-ontra-tor.

Lastl. , CAMC mem*ers, in-l2+in( respon+ents, performe+a-tivities +ire-tly relate+ to the prin-ipal *2siness of petitioner. They &or5e+ as -an pro-essin( atten+ant, fee+er of -anne+pineapple an+ pineapple pro-essin(, nata +e -o-o pro-essin(atten+ant, fr2it -o-5tail pro-essin( atten+ant, an+ et-., f2n-tions&hi-h &ere, not only +ire-tly relate+, *2t &ere very vital topetitionerJs *2siness of pro+2-tion an+ pro-essin( of pineapplepro+2-ts for e'port.

The 6n+in(s en2merate+ in the pre-e+in( para(raphs only s2pport&hat LE Re(ional ire-tor arel an+ LE =n+erse-retary Tra?ano ha+ lon( *efore -on-l2sively esta*lishe+, that CAMC &as

a mere la*or)only -ontra-tor. The +e-laration that CAMC is in+ee+ en(a(e+ in the prohi*ite+a-tivities of la*or)only -ontra-tin(, then -onse<2ently, anemployer)employee relationship is +eeme+ to e'ist *et&eenpetitioner an+ respon+ents, sin-e CAMC shall *e -onsi+ere+ as amere a(ent or interme+iary of petitioner.

Son7a v. AS)CN !G.R. No. 3#, :2ne #,

"##4$)mployee or Independent &ontractor0

The e'isten-e of an employer)employee relationship is a <2estion

3

f f t A ll t t + th f t l 6 +i f th L * AS CN +i tl i+ SNOA hi thl t l t f ith t



of fa-t. Appellate -o2rts a--or+ the fa-t2al 6n+in(s of the La*orAr*iter an+ the NLRC not only respe-t *2t also 6nality &hens2pporte+ *y s2*stantial evi+en-e. S2*stantial evi+en-e meanss2-h relevant evi+en-e as a reasona*le min+ mi(ht a--ept asa+e<2ate to s2pport a -on-l2sion. A party -annot prove thea*sen-e of s2*stantial evi+en-e *y simply pointin( o2t that there is-ontrary evi+en-e on re-or+, +ire-t or -ir-2mstantial. The Co2rt+oes not s2*stit2te its o&n ?2+(ment for that of the tri*2nal in+eterminin( &here the &ei(ht of evi+en-e lies or &hat evi+en-e is

-re+i*le.SNOA maintains that all essential elements of an employer)employee relationship are present in this -ase. Case la& has-onsistently hel+ that the elements of an employer)employeerelationship are !a$ the sele-tion an+ en(a(ement of theemployee0 !*$ the payment of &a(es0 !-$ the po&er of +ismissal0an+ !+$ the employers po&er to -ontrol the employee on the meansan+ metho+s *y &hi-h the &or5 is a--omplishe+. The last element,the so)-alle+ control test, is the most important element.

$. (election and )ngagement of )mployee

AS)CN en(a(e+ SNOAs servi-es to -o)host its television an+ra+io pro(rams *e-a2se of SNOAs pe-2liar s5ills, talent an+-ele*rity stat2s. SNOA -onten+s that the +is-retion 2se+ *yrespon+ent in spe-i6-ally sele-tin( an+ hirin( -omplainant overother *roa+-asters of possi*ly similar e'perien-e an+ <2ali6-ationas -omplainant *elies respon+ents -laim of in+epen+ent-ontra-torship.

n+epen+ent -ontra-tors often present themselves to possess2ni<2e s5ills, e'pertise or talent to +istin(2ish them from or+inaryemployees. The spe-i6- sele-tion an+ hirin( of SNOA,because of his unique s!ills, talent and celebrity status not possessed by ordinary employees, is a -ir-2mstan-e in+i-ative, *2t not

-on-l2sive, of an in+epen+ent -ontra-t2al relationship. f SNOA+i+ not possess s2-h 2ni<2e s5ills, talent an+ -ele*rity stat2s, AS)CN &o2l+ not have entere+ into the A(reement &ith SNOA *2t&o2l+ have hire+ him thro2(h its personnel +epartment ?2st li5eany other employee.

n any event, the metho+ of sele-tin( an+ en(a(in( SNOA +oesnot -on-l2sively +etermine his stat2s. De m2st -onsi+er all the-ir-2mstan-es of the relationship, &ith the -ontrol test *ein( themost important element.

/. +ayment of -ages

AS)CN +ire-tly pai+ SNOA his monthly talent fees &ith no partof his fees (oin( to M:MC. SNOA asserts that this mo+e of feepayment sho&s that he &as an employee of AS)CN. SNOA alsopoints o2t that AS)CN (rante+ him *ene6ts an+ privile(es &hi-hhe &o2l+ not have en?oye+ if he &ere tr2ly the s2*?e-t of a vali+ ?o*-ontra-t.

All the talent fees an+ *ene6ts pai+ to SNOA &ere the res2lt of ne(otiations that le+ to the A(reement. f SNOA &ere AS)CNsemployee, there &o2l+ *e no nee+ for the parties to stip2late on*ene6ts s2-h as SSS, Me+i-are, ' ' ' an+ 3 month pay &hi-h thela& a2tomati-ally in-orporates into every employer)employee-ontra-t. Dhatever *ene6ts SNOA en?oye+ arose from -ontra-tan+ not *e-a2se of an employer)employee relationship.

SNOAs talent fees, amo2ntin( to 3;,### monthly in the se-on+an+ thir+ year, are so h2(e an+ o2t of the or+inary that theyin+i-ate more an in+epen+ent -ontra-t2al relationship rather thanan employer)employee relationship. AS)CN a(ree+ to pay SNOAs2-h h2(e talent fees pre-isely *e-a2se of SNOAs 2ni<2e s5ills,talent an+ -ele*rity stat2s not possesse+ *y or+inary employees.*vio2sly, SNOA a-tin( alone possesse+ eno2(h *ar(ainin(

po&er to +eman+ an+ re-eive s2-h h2(e talent fees for hisservi-es. The po&er to *ar(ain talent fees &ay a*ove the salarys-ales of or+inary employees is a -ir-2mstan-e in+i-ative, *2t not-on-l2sive, of an in+epen+ent -ontra-t2al relationship.

The payment of talent fees +ire-tly to SNOA an+ not to M:MC+oes not ne(ate the stat2s of SNOA as an in+epen+ent -ontra-tor. The parties e'pressly a(ree+ on s2-h mo+e of payment. =n+er theA(reement, M:MC is the AGENT of SNOA, to &hom M:MC &o2l+have to t2rn over any talent fee a--r2in( 2n+er the A(reement.

&. +ower of Dismissal

9or violation of any provision of the A(reement, either partymay terminate their relationship. SNOA faile+ to sho& that AS)CN -o2l+ terminate his servi-es on (ro2n+s other than *rea-h of -ontra-t, s2-h as retren-hment to prevent losses as provi+e+ 2n+erla*or la&s.

2rin( the life of the A(reement, AS)CN a(ree+ to pay SNOAstalent fees as lon( as AGENT an+ :ay Son7a shall faithf2lly an+-ompletely perform ea-h -on+ition of this A(reement. Even if its2Iere+ severe *2siness losses, AS)CN -o2l+ not retren-hSNOA *e-a2se AS)CN remaine+ o*li(ate+ to pay SNOAs talentfees +2rin( the life of the A(reement. This -ir-2mstan-e in+i-atesan in+epen+ent -ontra-t2al relationship *et&een SNOA an+ AS)

4

CN a--epte+ this ar(2ment in+epen+ent -ontra-tors -o2l+ never &or5



CN.

SNOA a+mits that even after AS)CN -ease+ *roa+-astin( hispro(rams, AS)CN still pai+ him his talent fees. lainly, AS)CNa+here+ to its 2n+erta5in( in the A(reement to -ontin2e payin(SNOAs talent fees +2rin( the remainin( life of the A(reementeven if AS)CN -an-elle+ SNOAs pro(rams thro2(h no fa2lt of SNOA.

SNOA assails the La*or Ar*iters interpretation of his res-ission of

the A(reement as an a+mission that he is not an employee of AS)CN. The La*or Ar*iter state+ that if it &ere tr2e that -omplainant&as really an employee, he &o2l+ merely resi(n, instea+. SNOA+i+ a-t2ally resi(n from AS)CN *2t he also, as presi+ent of M:MC, res-in+e+ the A(reement.SNOAs letter -learly *ears thiso2t. Ho&ever, the manner *y &hi-h SNOA terminate+ hisrelationship &ith AS)CN is immaterial. Dhether SNOA res-in+e+the A(reement or resi(ne+ from &or5 +oes not +etermine his stat2sas employee or in+epen+ent -ontra-tor.

D. +ower of &ontrol

Sin-e there is no lo-al pre-e+ent on &hether a ra+io an+ television

pro(ram host is an employee or an in+epen+ent -ontra-tor, &erefer to forei(n -ase la& in analy7in( the present -ase. The =nite+States Co2rt of Appeals, 9irst Cir-2it, re-ently hel+ in $lberty*1le2v. &orporacin De +uerto Rico +ara La Difusin +blica3-I+R4 that a television pro(ram host is an in+epen+ent-ontra-tor. De <2ote the follo&in( 6n+in(s of the =.S. -o2rt

Several fa-tors favor -lassifyin( Al*erty as an in+epen+ent-ontra-tor. &irst! a television actress is a s'illed positionre#uiring talent and training not available on)the)(ob . ' ' 'n this re(ar+, Al*erty possesses a masters +e(ree in p2*li--omm2ni-ations an+ ?o2rnalism0 is traine+ in +an-e, sin(in(, an+mo+elin(0 ta2(ht &ith the +rama +epartment at the =niversity of

2erto Ri-o0 an+ a-te+ in several theater an+ televisionpro+2-tions prior to her a8liation &ith es+e Mi 2e*lo. 6econd!Alberty provided the tools and instrumentalities necessaryfor her to perform. Spe-i6-ally, she provi+e+, or o*taine+sponsors to provi+e, the -ost2mes, ?e&elry, an+ other ima(e)relate+ s2pplies an+ servi-es ne-essary for herappearan-e. Al*erty +isp2tes that this fa-tor favors in+epen+ent-ontra-tor stat2s *e-a2se DR provi+e+ the e<2ipment ne-essaryto tape the sho&. Al*ertys ar(2ment is mispla-e+. The e<2ipmentne-essary for Al*erty to -on+2-t her 0ob as host of es+e Mi 2e*lorelate+ to her appearan-e on the sho&.thers provi+e+ e<2ipmentfor 6lmin( an+ pro+2-in( the sho&, *2t these &ere not the primarytools that Al*erty 2se+ to perform her parti-2lar f2n-tion. f &e

a--epte+ this ar(2ment, in+epen+ent -ontra-tors -o2l+ never &or5on -olla*orative pro?e-ts *e-a2se other in+ivi+2als often provi+ethe e<2ipment re<2ire+ for +iIerent aspe-ts of the -olla*oration. '' '

*hird! WI=R could not assign Alberty wor' in addition to3lming +esde 4i =ueblo. Al*ertys -ontra-ts &ith DRspe-i6-ally provi+e+ that DR hire+ her professional servi-es asHostess for the ro(ram es+e Mi 2e*lo. There is no evi+en-e thatDR assi(ne+ Al*erty tas5s in a++ition to &or5 relate+ to these

tapin(s. ' ' ' !Emphasis s2pplie+$

Applyin( the control test to the present -ase, &e 6n+ that SNOAis not an employee *2t an in+epen+ent -ontra-tor. The -ontrol testis the most important test o2r -o2rts apply in +istin(2ishin( anemployee from an in+epen+ent -ontra-tor. This test is *ase+ on thee'tent of -ontrol the hirer e'er-ises over a &or5er. The (reater thes2pervision an+ -ontrol the hirer e'er-ises, the more li5ely the&or5er is +eeme+ an employee. The -onverse hol+s tr2e as &ell theless -ontrol the hirer e'er-ises, the more li5ely the &or5er is-onsi+ere+ an in+epen+ent -ontra-tor.

*irst , SNOA -onten+s that AS)CN e'er-ise+ -ontrol over the

means an+ metho+s of his &or5.

SNOAs ar(2ment is mispla-e+. AS)CN en(a(e+ SNOAsservi-es spe-i6-ally to -o)host the Mel U :ay pro(rams. AS)CN+i+ not assi(n any other &or5 to SNOA. To perform his &or5,SNOA only nee+e+ his s5ills an+ talent. Ho& SNOA +elivere+ hislines, appeare+ on television, an+ so2n+e+ on ra+io &ere o2tsi+eAS)CNs -ontrol. SNOA +i+ not have to ren+er ei(ht ho2rs of &or5 per +ay. The A(reement re<2ire+ SNOA to atten+ onlyrehearsals an+ tapin(s of the sho&s, as &ell as pre) an+ post)pro+2-tion staI meetin(s. AS)CN -o2l+ not +i-tate the -ontentsof SNOAs s-ript. Ho&ever, the A(reement prohi*ite+ SNOA from

-riti-i7in( in his sho&s AS)CN or its interests. The -learimpli-ation is that SNOA ha+ a free han+ on &hat to say or +is-2ssin his sho&s provi+e+ he +i+ not atta-5 AS)CN or its interests.

De 6n+ that AS)CN &as not involve+ in the a-t2al performan-ethat pro+2-e+ the 6nishe+ pro+2-t of SNOAs &or5. AS)CN +i+not instr2-t SNOA ho& to perform his ?o*.AS)CN merelyreserve+ the ri(ht to mo+ify the pro(ram format an+ airtimes-he+2le for more eIe-tive pro(rammin(. AS)CNs sole -on-ern&as the <2ality of the sho&s an+ their stan+in( in theratin(s. Clearly, AS)CN +i+ not e'er-ise -ontrol over the meansan+ metho+s of performan-e of SNOAs &or5.

SNOA -laims that AS CNs po&er not to *roa+-ast his sho&s a+mitte+ly possesses The re-or+s +o not sho& that AS CN



SNOA -laims that AS)CNs po&er not to *roa+-ast his sho&sproves AS)CNs po&er over the means an+ metho+s of theperforman-e of his &or5. Altho2(h AS)CN +i+ have the option notto *roa+-ast SNOAs sho&, AS)CN &as still o*li(ate+ to paySNOAs talent fees. Th2s, even if AS)CN &as -ompletely+issatis6e+ &ith the means an+ metho+s of SNOAs performan-eof his &or5, or even &ith the <2ality or pro+2-t of his &or5, AS)CN -o2l+ not +ismiss or even +is-ipline SNOA. All that AS)CN-o2l+ +o is not to *roa+-ast SNOAs sho& *2t AS)CN m2st still

pay his talent fees in f2ll.Clearly, AS)CNs ri(ht not to *roa+-ast SNOAs sho&, *2r+ene+as it &as *y the o*li(ation to -ontin2e payin( in f2ll SNOAs talentfees, +i+ not amo2nt to -ontrol over the means an+ metho+s of theperforman-e of SNOAs &or5. AS)CN -o2l+ not terminate or+is-ipline SNOA even if the means an+ metho+s of performan-e of his &or5 ) ho& he +elivere+ his lines an+ appeare+ on television )+i+ not meet AS)CNs approval. This proves that AS)CNs-ontrol &as limite+ only to the res2lt of SNOAs &or5, &hether to*roa+-ast the 6nal pro+2-t or not. n either -ase, AS)CN m2ststill pay SNOAs talent fees in f2ll 2ntil the e'piry of theA(reement.

n 1aughan, et al. v. -arner, et al., the =nite+ States Cir-2itCo2rt of Appeals r2le+ that va2+eville performers &erein+epen+ent -ontra-tors altho2(h the mana(ement reserve+ theri(ht to +elete o*?e-tiona*le feat2res in their sho&s. Sin-e themana(ement +i+ not have -ontrol over the manner of performan-eof the s5ills of the artists, it -o2l+ only -ontrol the res2lt of the &or5*y +eletin( o*?e-tiona*le feat2res.

SNOA f2rther -onten+s that AS)CN e'er-ise+ -ontrol over his&or5 *y s2pplyin( all e<2ipment an+ -re&. No +o2*t, AS)CNs2pplie+ the e<2ipment, -re& an+ airtime nee+e+ to *roa+-ast the

Mel U :ay pro(rams. Ho&ever, the e<2ipment, -re& an+ airtime arenot the tools an+ instr2mentalities SNOA nee+e+ to perform his ?o*. Dhat SNOA prin-ipally nee+e+ &ere his talent or s5ills an+the -ost2mes ne-essary for his appearan-e. Even tho2(h AS)CNprovi+e+ SNOA &ith the pla-e of &or5 an+ the ne-essarye<2ipment, SNOA &as still an in+epen+ent -ontra-tor sin-e AS)CN +i+ not s2pervise an+ -ontrol his &or5. AS)CNs sole -on-ern&as for SNOA to +isplay his talent +2rin( the airin( of thepro(rams.

A ra+io *roa+-ast spe-ialist &ho &or5s 2n+er minimal s2pervisionis an in+epen+ent -ontra-tor. SNOAs &or5 as television an+ ra+iopro(ram host re<2ire+ spe-ial s5ills an+ talent, &hi-h SNOA

a+mitte+ly possesses. The re-or+s +o not sho& that AS)CNe'er-ise+ any s2pervision an+ -ontrol over ho& SNOA 2tili7e+ hiss5ills an+ talent in his sho&s.

Second, SNOA 2r(es 2s to r2le that he &as AS)CNs employee*e-a2se AS)CN s2*?e-te+ him to its r2les an+ stan+ar+s of performan-e. SNOA -laims that this in+i-ates AS)CNs -ontrolnot only Kover his manner of &or5 *2t also the <2ality of his &or5.

The A(reement stip2lates that SNOA shall a*i+e &ith the r2les

an+ stan+ar+s of performan-e covering talents of AS)CN. TheA(reement +oes not re<2ire SNOA to -omply &ith the r2les an+stan+ar+s of performan-e pres-ri*e+ for employees of AS)CN. The -o+e of -on+2-t impose+ on SNOA 2n+er the A(reementrefers to the Television an+ Ra+io Co+e of the Papisanan n( m(aroa+-aster sa ilipinas !P$, &hi-h has *een a+opte+ *y theCMAN !AS)CN$ as its Co+e of Ethi-s. The P -o+e applies to*roa+-asters, not to employees of ra+io an+ televisionstations. roa+-asters are not ne-essarily employees of ra+io an+television stations. Clearly, the r2les an+ stan+ar+s of performan-ereferre+ to in the A(reement are those appli-a*le to talents an+ notto employees of AS)CN.

n any event, not all r2les impose+ *y the hirin( party on the hire+party in+i-ate that the latter is an employee of the former. n this-ase, SNOA faile+ to sho& that these r2les -ontrolle+ hisperforman-e. De 6n+ that these (eneral r2les aremerely guidelines to&ar+s the a-hievement of the m2t2ally+esire+ res2lt, &hi-h are top)ratin( television an+ ra+io pro(ramsthat -omply &ith stan+ar+s of the in+2stry. De have r2le+ that

92rther, not every form of -ontrol that a party reserves to himself over the -on+2-t of the other party in relation to the servi-es *ein(ren+ere+ may *e a--or+e+ the eIe-t of esta*lishin( an employer)employee relationship. The fa-ts of this -ase fall s<2arely &ith the

-ase of ns2lar Life Ass2ran-e Co., Lt+. vs. NLRC. n sai+ -ase, &ehel+ that

Lo(i-ally, the line sho2l+ *e +ra&n *et&een r2les that merelyserve as (2i+elines to&ar+s the a-hievement of the m2t2ally+esire+ res2lt &itho2t +i-tatin( the means or metho+s to *eemploye+ in attainin( it, an+ those that -ontrol or 6' themetho+olo(y an+ *in+ or restri-t the party hire+ to the 2se of s2-hmeans. The 6rst, &hi-h aim only to promote the res2lt, -reate noemployer)employee relationship 2nli5e the se-on+, &hi-h a++ress*oth the res2lt an+ the means 2se+ to a-hieve it.

The 1aughan -ase also hel+ that one -o2l+ still *e an in+epen+ent-ontra-tor altho2(h the hirer reserve+ -ertain s2pervision to ins2re

B

the attainment of the +esire+ res2lt The hirer ho&ever m2st not General Mana(er of M:MC is SNOA himself t is a*s2r+ to hol+



the attainment of the +esire+ res2lt. The hirer, ho&ever, m2st not+eprive the one hire+ from performin( his servi-es a--or+in( to hiso&n initiative.

Lastl. , SNOA insists that the e'-l2sivity -la2se in the A(reementis the most e'treme form of -ontrol &hi-h AS)CN e'er-ise+ overhim.

This ar(2ment is f2tile. ein( an e'-l2sive talent +oes not *y itself mean that SNOA is an employee of AS)CN. Even an

in+epen+ent -ontra-tor -an vali+ly provi+e his servi-es e'-l2sivelyto the hirin( party. n the *roa+-ast in+2stry, e'-l2sivity is notne-essarily the same as -ontrol.

The hirin( of e'-l2sive talents is a &i+esprea+ an+ a--epte+pra-ti-e in the entertainment in+2stry. This pra-ti-e is not +esi(ne+to -ontrol the means an+ metho+s of &or5 of the talent, *2t simplyto prote-t the investment of the *roa+-ast station. The *roa+-aststation normally spen+s s2*stantial amo2nts of money, time an+eIort in *2il+in( 2p its talents as &ell as the pro(rams they appearin an+ th2s e'pe-ts that sai+ talents remain e'-l2sive &ith thestation for a -ommens2rate perio+ of time. Normally, a m2-hhi(her fee is pai+ to talents &ho a(ree to &or5 e'-l2sively for aparti-2lar ra+io or television station. n short, the h2(e talent feespartially -ompensates for e'-l2sivity, as in the present -ase.

SNOA protests the La*or Ar*iters 6n+in( that he is a talent of M:MC, &hi-h -ontra-te+ o2t his servi-es to AS)CN. The La*orAr*iter r2le+ that as a talent of M:MC, SNOA is not an employeeof AS)CN. SNOA insists that M:MC is a la*or)only -ontra-toran+ AS)CN is his employer.

n a la*or)only -ontra-t, there are three parties involve+ !$ thela*or)only -ontra-tor0 !"$ the employee &ho is ostensi*ly 2n+er theemploy of the la*or)only -ontra-tor0 an+ !3$ the prin-ipal &ho is

+eeme+ the real employer. =n+er this s-heme, the labor)onlycontractor is the agent of the principal" The la& ma5es theprin-ipal responsi*le to the employees of the la*or)only -ontra-toras if the prin-ipal itself +ire-tly hire+ or employe+ theemployees. These -ir-2mstan-es are not present in this -ase.

There are essentially only t&o parties involve+ 2n+er theA(reement, namely, SNOA an+ AS)CN. M:MC merely a-te+ asSNOAs a(ent. The A(reement e'pressly states that M:MC a-te+as the AGENT of SNOA. The re-or+s +o not sho& that M:MC a-te+as AS)CNs a(ent. M:MC, &hi-h stan+s for Mel an+ :ayMana(ement an+ evelopment Corporation, is a -orporationor(ani7e+ an+ o&ne+ *y SNOA an+ TANGC. The resi+ent an+

General Mana(er of M:MC is SNOA himself. t is a*s2r+ to hol+that M:MC, &hi-h is o&ne+, -ontrolle+, hea+e+ an+ mana(e+ *ySNOA, a-te+ as a(ent of AS)CN in enterin( into the A(reement&ith SNOA, &ho himself is represente+ *y M:MC. That &o2l+ma5e M:MC the a(ent of *oth AS)CN an+ SNOA.

As SNOA a+mits, M:MC is a mana(ement -ompany+evote+ e%clusively to mana(in( the -areers of SNOA an+ his*roa+-ast partner, TANGC. M:MC is not en(a(e+ in any other*2siness, not even ?o* -ontra-tin(. M:MC +oes not have any otherf2n-tion apart from a-tin( as a(ent of SNOA or TANGC topromote their -areers in the *roa+-ast an+ television in+2stry.

SNOA ar(2es that oli-y nstr2-tion No. 4# iss2e+ *y then Ministerof La*or las ple on :an2ary @;@ 6nally settle+ the stat2s of &or5ers in the *roa+-ast in+2stry. =n+er this poli-y, the types of employees in the *roa+-ast in+2stry are the station an+ pro(ramemployees.

oli-y nstr2-tion No. 4# is a mere e'e-2tive iss2an-e &hi-h +oesnot have the for-e an+ eIe-t of la&. There is no le(al pres2mptionthat oli-y nstr2-tion No. 4# +etermines SNOAs stat2s. A meree'e-2tive iss2an-e -annot e'-l2+e in+epen+ent -ontra-tors fromthe -lass of servi-e provi+ers to the *roa+-ast in+2stry. The-lassi6-ation of &or5ers in the *roa+-ast in+2stry into only t&o(ro2ps 2n+er oli-y nstr2-tion No. 4# is not *in+in( on this Co2rt,espe-ially &hen the -lassi6-ation has no *asis either in la& or infa-t.

AS)CN -laims that there e'ists a prevailin( pra-ti-e in the*roa+-ast an+ entertainment in+2stries to treat talents li5e SNOAas in+epen+ent -ontra-tors. SNOA ar(2es that if s2-h pra-ti-ee'ists, it is voi+ for violatin( the ri(ht of la*or to se-2rity of ten2re.

The ri(ht of la*or to se-2rity of ten2re as (2arantee+ in the

Constit2tion arises only if there is an employer)employeerelationship 2n+er la*or la&s. Not every performan-e of servi-es fora fee -reates an employer)employee relationship. To hol+ thatevery person &ho ren+ers servi-es to another for a fee is anemployee ) to (ive meanin( to the se-2rity of ten2re -la2se ) &illlea+ to a*s2r+ res2lts.

n+ivi+2als &ith spe-ial s5ills, e'pertise or talent en?oy the free+omto oIer their servi-es as in+epen+ent -ontra-tors. The ri(ht to lifean+ livelihoo+ (2arantees this free+om to -ontra-t as in+epen+ent-ontra-tors. The ri(ht of la*or to se-2rity of ten2re -annot operateto +eprive an in+ivi+2al, possesse+ &ith spe-ial s5ills, e'pertise an+talent, of his ri(ht to -ontra-t as an in+epen+ent -ontra-tor. An

;

in+ivi+2al li5e an artist or talent has a ri(ht to ren+er his servi-es &hen the person for &hom the servi-es are performe+ reserves the



in+ivi+2al li5e an artist or talent has a ri(ht to ren+er his servi-es&itho2t any one -ontrollin( the means an+ metho+s *y &hi-h heperforms his art or -raft. This Co2rt &ill not interpret the ri(ht of la*or to se-2rity of ten2re to -ompel artists an+ talents to ren+ertheir servi-es only as employees. f ra+io an+ television pro(ramhosts -an ren+er their servi-es only as employees, the stationo&ners an+ mana(ers -an +i-tate to the ra+io an+ television hosts&hat they say in their sho&s. This is not -on+2-ive to free+om of the press.

The National nternal Reven2e Co+e !NRC$ in relation to Rep2*li-A-t No. ;;B, as amen+e+ *y Rep2*li- A-t No. "4, treats talents,television an+ ra+io *roa+-asters +iIerently. =n+er the NRC, theseprofessionals are s2*?e-t to the # val2e)a++e+ ta' !FAT$ onservi-es they ren+er. E'empte+ from the FAT are those 2n+er anemployer)employee relationship. This +iIerent ta' treatmenta--or+e+ to talents an+ *roa+-asters *olters o2r -on-l2sion thatthey are in+epen+ent -ontra-tors, provi+e+ all the *asi- elementsof a -ontra-t2al relationship are present as in this -ase.

SNOA see5s the re-overy of alle(e+ly 2npai+ talent fees,3 month pay, separation pay, servi-e in-entive leave, si(nin(

*on2s, travel allo&an-e, an+ amo2nts +2e 2n+er the EmployeeSto-5 ption lan. De a(ree &ith the 6n+in(s of the La*or Ar*iteran+ the Co2rt of Appeals that SNOAs -laims are all based on the4ay >::? Agreement and stoc' option plan! and not on theLabor "ode$ Clearly, the present -ase +oes not -all for anappli-ation of the La*or Co+e provisions *2t an interpretation an+implementation of the May @@4 A(reement. n eIe-t, SNOAs-a2se of a-tion is for *rea-h of -ontra-t &hi-h is intrinsi-ally a -ivil+isp2te -o(ni7a*le *y the re(2lar -o2rts.

TAE v. Servana !G.R. No. B;B4, :an2ary ",

"##$At the o2tset, it *ears emphasis that the e'isten-e of employer)employee relationship is 2ltimately a <2estion of fa-t. Generally,only <2estions of la& are entertaine+ in appeals *y -ertiorari to theS2preme Co2rt. This r2le, ho&ever, is not a*sol2te. Amon( theseveral re-o(ni7e+ e'-eptions is &hen the 6n+in(s of the Co2rt of Appeals an+ La*or Ar*iters, on one han+, an+ that of the NLRC, onthe other, are -onQi-tin(, as o*tainin( in the -ase at *ar.

:2rispr2+en-e is a*o2n+ &ith -ases that re-ite the fa-tors to *e-onsi+ere+ in +eterminin( the e'isten-e of employer)employeerelationship. The most important fa-tor involves the -ontrol test.=n+er the -ontrol test, there is an employer)employee relationship

&hen the person for &hom the servi-es are performe+ reserves theri(ht to -ontrol not only the en+ a-hieve+ *2t also the manner an+means 2se+ to a-hieve that en+.

n -on-l2+in( that respon+ent &as an employee of TAE, the Co2rtof Appeals applie+ the fo2r)fol+ test in this &ise

&irst. The sele-tion an+ hirin( of petitioner &as +one *y privaterespon+ents. n fa-t, private respon+ents themselves a+mitte+havin( en(a(e+ the servi-es of petitioner only in @@ after TAEsevere+ its relations &ith RN Channel @.

y informin( petitioner thro2(h the Memoran+2m +ate+ " Mar-h"###, that his servi-es &ill *e terminate+ as soon as the servi-esof the ne&ly hire+ se-2rity a(en-y *e(ins, private respon+ents ineIe-t a-5no&le+(e+ petitioner to *e their employee. 9or the ri(htto hire an+ 6re is another important element of the employer)employee relationship.

6econd. ayment of &a(es is one of the fo2r fa-tors to *e-onsi+ere+ in +eterminin( the e'isten-e of employer)employeerelation. . . ayment as a+mitte+ *y private respon+ents &as (iven*y them on a monthly *asis at a rate of ,444.44.

*hird. f the fo2r elements of the employer)employee relationship,

the -ontrol test is the most important. ' ' '

The *2n+y -ar+s representin( the time petitioner ha+ reporte+ for&or5 are evi+ent proofs of private respon+ents -ontrol overpetitioner more parti-2larly &ith the time he is re<2ire+ to reportfor &or5 +2rin( the noontime pro(ram of Eat 2la(a f it &ere notso, petitioner &o2l+ *e free to report for &or5 anytime even not+2rin( the noontime pro(ram of Eat 2la(a from3#a.m. to ## p.m. an+ still (ets his -ompensation for *ein( atalent. re-isely, he is *ein( pai+ for *ein( the se-2rity of Eat2la(a +2rin( the a*ove)mentione+ perio+. The +aily time -ar+s of petitioner are not ?2st for mere re-or+ p2rposes as -laime+ *yprivate respon+ents. t is a form of -ontrol *y the mana(ement of private respon+ent TAE.

TAE asseverates that the Co2rt of Appeals erre+ in applyin( thefo2r)fol+ test in +eterminin( the e'isten-e of employer)employeerelationship *et&een it an+ respon+ent. Dith respe-t to theelements of sele-tion, &a(es an+ +ismissal, TAE proIers thefollo&in( ar(2ments that it never hire+ respon+ent, instea+ it &asthe latter &ho oIere+ his servi-es as a talent to TAE0 that theMemoran+2m +ate+ " Mar-h "### serve+ on respon+ent &as forthe +is-ontin2an-e of the -ontra-t for se-2rity servi-es an+ not atermination letter0 an+ that the talent fees (iven to respon+ent&ere the pre)a(ree+ -onsi+eration for the servi-es ren+ere+ an+

sho2l+ not *e -onstr2e+ as &a(es Anent the element of -ontrol *2siness an+ 2n+erta5es to perform the ?o* &or5 or servi-e on its



sho2l+ not *e -onstr2e+ as &a(es. Anent the element of -ontrol, TAE insists that it ha+ no -ontrol over respon+ent in that he &asfree to employ means an+ metho+s *y &hi-h he is to -ontrol an+mana(e the live a2+ien-es, as &ell as the safety of TAEs stars an+(2ests.

The position of TAE is 2ntena*le. Respon+ent &as 6rst -onne-te+&ith A(ro)Commer-ial Se-2rity A(en-y, &hi-h assi(ne+ him toassist TAE in its live pro+2-tions. Dhen the se-2rity a(en-ys-ontra-t &ith RN)@ e'pire+ in @@, respon+ent &as a*sor*e+ *y TAE or, in the latters lan(2a(e, retaine+ as talent. Clearly,respon+ent &as hire+ *y TAE. Respon+ent presente+ hisi+enti6-ation -ar+ to prove that he is in+ee+ an employee of TAE.t has *een in hel+ that in a *2siness esta*lishment, ani+enti6-ation -ar+ is 2s2ally provi+e+ not ?2st as a se-2ritymeas2re *2t to mainly i+entify the hol+er thereof as a bona&de employee of the 6rm &ho iss2es it.

Respon+ent -laims to have *een re-eivin( ,444.44 as hismonthly salary &hile TAE prefers to +esi(nate s2-h amo2nt astalent fees. Da(es, as +e6ne+ in the La*or Co+e, are rem2nerationor earnin(s, ho&ever +esi(nate+, -apa*le of *ein( e'presse+ in

terms of money, &hether 6'e+ or as-ertaine+ on a time, tas5, pie-eor -ommission *asis, or other metho+ of -al-2latin( the same,&hi-h is paya*le *y an employer to an employee 2n+er a &ritten or2n&ritten -ontra-t of employment for &or5 +one or to *e +one, orfor servi-e ren+ere+ or to *e ren+ere+. t is *eyon+ +isp2te thatrespon+ent re-eive+ a 6'e+ amo2nt as monthly -ompensation forthe servi-es he ren+ere+ to TAE.

The Memoran+2m informin( respon+ent of the +is-ontin2an-e of his servi-e proves that TAE ha+ the po&er to +ismiss respon+ent.

Control is manifeste+ in the *2n+y -ar+s s2*mitte+ *y respon+entin evi+en-e. He &as re<2ire+ to report +aily an+ o*serve +e6nite

&or5 ho2rs. To ne(ate the element of -ontrol, TAE presente+ a-erti6-ation from M)Oet ro+2-tions to prove that respon+ent also&or5e+ as a st2+io se-2rity (2ar+ for sai+ -ompany. Nota*ly, thesai+ -erti6-ate -ate(ori-ally state+ that respon+ent reporte+ for&or5 on Th2rs+ays from @@" to @@. t -an *e re-alle+ that+2rin( sai+ perio+, respon+ent &as still &or5in( for RN)@. Asa+mitte+ *y TAE, it a*sor*e+ respon+ent in late @@.

TAE f2rther +enies e'er-isin( -ontrol over respon+ent an+maintains that the latter is an in+epen+ent -ontra-tor. Asi+e frompossessin( s2*stantial -apital or investment, a le(itimate ?o*-ontra-tor or s2*-ontra-tor -arries on a +istin-t an+ in+epen+ent

*2siness an+ 2n+erta5es to perform the ?o*, &or5 or servi-e on itso&n a--o2nt an+ 2n+er its o&n responsi*ility a--or+in( to its o&nmanner an+ metho+, an+ free from the -ontrol an+ +ire-tion of theprin-ipal in all matters -onne-te+ &ith the performan-e of the &or5e'-ept as to the res2lts thereof. TAE faile+ to esta*lish thatrespon+ent is an in+epen+ent -ontra-tor. As fo2n+ *y the Co2rt of Appeals

De 6n+ the anne'es s2*mitte+ *y the private respon+entsins28-ient to prove that herein petitioner is in+ee+ an in+epen+ent-ontra-tor. None of the a*ove -on+itions e'ist in the -ase at*ar. rivate respon+ents faile+ to sho& that petitioner hass2*stantial -apital or investment to *e <2ali6e+ as an in+epen+ent-ontra-tor. They li5e&ise faile+ to present a &ritten -ontra-t &hi-hspe-i6es the performan-e of a spe-i6e+ pie-e of &or5, the nat2rean+ e'tent of the &or5 an+ the term an+ +2ration of therelationship *et&een herein petitioner an+ private respon+ent TAE.

TAE relies on oli-y nstr2-tion No. 4#, iss2e+ *y the epartmentof La*or, in -lassifyin( respon+ent as a pro(ram employee an+e<2atin( him to *e an in+epen+ent -ontra-tor.

oli-y nstr2-tion No. 4# +e6nes pro(ram employees as

' ' ' those &hose s5ills, talents or servi-es are en(a(e+ *y thestation for a parti-2lar or spe-i6- pro(ram or 2n+erta5in( an+ &hoare not re<2ire+ to o*serve normal &or5in( ho2rs s2-h that onsome +ays they &or5 for less than ei(ht !$ ho2rs an+ on other+ays *eyon+ the normal &or5 ho2rs o*serve+ *y stationemployees an+ are allo&e+ to enter into employment -ontra-ts&ith other persons, stations, a+vertisin( a(en-ies or sponsorin(-ompanies. The en(a(ement of pro(ram employees, in-l2+in(those hire+ *y a+vertisin( or sponsorin( -ompanies, shall *e 2n+era &ritten -ontra-t spe-ifyin(, amon( other thin(s, the nat2re of the&or5 to *e performe+, rates of pay an+ the pro(rams in &hi-h they

&ill &or5. The -ontra-t shall *e +2ly re(istere+ *y the station &iththe roa+-ast Me+ia Co2n-il &ithin three !3$ +ays from its-ons2mmation.

TAE faile+ to a++2-e any evi+en-e to prove that it -omplie+ &iththe re<2irements lai+ +o&n in the poli-y instr2-tion. t +i+ not evenpresent its -ontra-t &ith respon+ent. Neither +i+ it -omply &ith the-ontra-t)re(istration re<2irement.

Even (rantin( arguendo that respon+ent is a pro(ram employee,stills, -lassifyin( him as an in+epen+ent -ontra-tor ismispla-e+. The Co2rt of Appeals ha+ this to say

De -annot s2*s-ri*e to private respon+ents -onQi-tin(

@

theories. The theory of private respon+ents that petitioner is an involvement in the re-r2itment an+ sele-tion of petitioner an+



theories. The theory of private respon+ents that petitioner is anin+epen+ent -ontra-tor r2ns -o2nter to their very o&n alle(ationthat petitioner is a talent or a pro(ram employee. An in+epen+ent-ontra-tor is not an employee of the employer, &hile a talent orpro(ram employee is an employee. The only +iIeren-e *et&een atalent or pro(ram employee an+ a re(2lar employee is the fa-tthat a re(2lar employee is entitle+ to all the *ene6ts that are *ein(praye+ for. This is the reason &hy private respon+ents try to see5ref2(e 2n+er the -on-ept of an in+epen+ent -ontra-tor theory. 9orif petitioner &ere in+ee+ an in+epen+ent -ontra-tor, private

respon+ents &ill not *e lia*le to pay the *ene6ts praye+ for inpetitioners -omplaint.

Finoya v. NLRC !G.R. No. "BB, 9e*r2ary ",

"###$ase+ on the fore(oin(, MC -an only *e -lassi6e+ as a la*or)only-ontra-tor an+, as s2-h, -annot *e -onsi+ere+ as the employer of petitioner.

Ho&ever, even (rantin( that MC is an in+epen+ent -ontra-tor, asR9C a+amantly s2((ests, still, a 6n+in( of the same &ill not savethe +ay for R9C. A per2sal of the Contra-t of Servi-e entere+ into

*et&een R9C an+ MC reveals that petitioner is a-t2ally notin-l2+e+ in the en2meration of the &or5ers to *e assi(ne+ to R9C. The follo&in( are the &or5ers en2merate+ in the -ontra-t

. Mer-han+iser

". romo Girl

3. 9a-tory Dor5er

4. river

*vio2sly, the a*ove en2meration +oes not in-l2+e the position of petitioner as sales representative. This only sho&s that petitioner&as never inten+e+ to *e a part of those to *e -ontra-te+ o2t.

Ho&ever, R9C insists that +espite the a*sen-e of his position in theen2meration, petitioner is +eeme+ in-l2+e+ *e-a2se this has *eena(ree+ 2pon *et&een itself an+ MC. S2-h -ontention +eservess-ant -onsi+eration. Ha+ it really *een the intention of *oth partiesto in-l2+e the position of petitioner they sho2l+ have -learlyin+i-ate+ the same in the -ontra-t. Ho&ever, the -ontra-t is totallysilent on this point &hi-h -an only mean that petitioner &as neverreally inten+e+ to *e -overe+ *y it.

Even if &e 2se the /fo2r)fol+ test/ to as-ertain &hether R9C is thetr2e employer of petitioner the same res2lt &o2l+ *e a-hieve+.

Dith re(ar+ to the 6rst element, the po&er to hire, R9C +enies any

involvement in the re-r2itment an+ sele-tion of petitioner an+asserts that petitioner +i+ not present any proof that he &asa-t2ally hire+ an+ employe+ *y R9C.

t sho2l+ *e pointe+ o2t that no parti-2lar form of proof is re<2ire+to prove the e'isten-e of an employer)employee relationship. Any-ompetent an+ relevant evi+en-e may sho& the relationship. f only+o-2mentary evi+en-e &o2l+ *e re<2ire+ to +emonstrate thatrelationship, no s-hemin( employer &o2l+ ever *e *ro2(ht *eforethe *ar of ?2sti-e. n the -ase at *ar, petitioner presente+ the

i+enti6-ation -ar+ iss2e+ to him on "B May @@# *y R9C as proof that it &as the latter &ho en(a(e+ his servi-es. To o2r min+, the -ar+ is eno2(h proof that petitioner &as previo2sly hire+ *y R9Cprior to his transfer as a(en-y &or5er to MC. t m2st *e note+ thatthe Employment Contra-t *et&een petitioner an+ MC &as +ate+ :2ly @@. n the other han+, the -ar+ iss2e+ *y R9C topetitioner &as +ate+ "B May @@#, or more than one year *eforethe Employment Contra-t &as si(ne+ *y petitioner in favor of MC.t ma5es one &on+er &hy, if petitioner &as in+ee+ re-r2ite+ *yMC as its o&n employee on :2ly @@, ho& -ome he ha+ alrea+y*een iss2e+ an -ar+ *y R9C a year earlierW Dhile theEmployment Contra-t in+i-ates the &or+ /rene&al,/ pres2ma*ly anattempt to sho& that petitioner ha+ previo2sly si(ne+ a similar-ontra-t &ith MC, no evi+en-e of a prior -ontra-t entere+ into*et&een petitioner an+ MC &as ever presente+ *y R9C. n fa-t,+espite the +eman+ ma+e *y the -o2nsel of petitioner for thepro+2-tion of the -ontra-t &hi-h p2rporte+ly sho&s that prior to :2ly @@ petitioner &as alrea+y -onne-te+ &ith MC, R9C neverma+e a move to f2rnish the -o2nsel of petitioner a -opy of thealle(e+ ori(inal Employment Contra-t. The only lo(i-al -on-l2sion&hi-h may *e +erive+ from s2-h ina-tion is that there &as no s2-h-ontra-t an+ that the only Employment Contra-t entere+ into*et&een MC an+ petitioner &as the :2ly @@ -ontra-t an+ noother. Sin-e, as sho&n *y the -ar+, petitioner &as alrea+y &ithR9C on "B May @@#, prior to the time any Employment Contra-t&as a(ree+ 2pon *et&een MC an+ petitioner, it follo&s that it &asR9C &ho a-t2ally hire+ an+ en(a(e+ petitioner to *e its employee.

Dith respe-t to the payment of &a(es, R9C +isp2tes the ar(2mentof petitioner that it pai+ his &a(es on the (ro2n+ that petitioner +i+not s2*mit any evi+en-e to prove that his salary &as pai+ *y it, orthat he &as iss2e+ payslip *y the -ompany. n the -ontrary R9Casserts that the invoi-es presente+ *y it, sho& that it &as MC &hopai+ petitioner his &a(es thro2(h its re(2lar monthly *illin(s-har(e+ to R9C.

B#

The Co2rt ta5es ?2+i-ial noti-e of the pra-ti-e of employers &ho, in esi+es, to o2r min+, the a+mission of R9C that it e'er-ise+ -ontrol



The Co2rt ta5es ?2+i-ial noti-e of the pra-ti-e of employers &ho, inor+er to eva+e the lia*ilities 2n+er the La*or Co+e, +o not iss2epayslips +ire-tly to their employees. =n+er the -2rrent pra-ti-e, athir+ person, 2s2ally the p2rporte+ -ontra-tor !servi-e ormanpo&er pla-ement a(en-y$, ass2mes the a-t of payin( the&a(e. 9or this reason, the lo&ly &or5er is 2na*le to sho& proof thatit &as +ire-tly pai+ *y the tr2e employer. Nevertheless, for the&or5ers, it is eno2(h that they a-t2ally re-eive their pay, o*livio2sof the nee+ for payslips, 2na&are of its le(al impli-ations. Applyin(

this prin-iple to the -ase at *ar, even tho2(h the &a(es &ere-o2rse+ thro2(h MC, &e note that the f2n+s a-t2ally -ame fromthe po-5ets of R9C. Th2s, in the en+, R9C is still the one &ho pai+the &a(es of petitioner albeit in+ire-tly.

As to the thir+ element, the po&er to +ismiss, R9C avers that it &asMC &ho terminate+ the employment of petitioner. The fa-ts onre-or+, ho&ever, +isprove the alle(ation of R9C. 9irst of all, theContra-t of Servi-e (ave R9C the ri(ht to terminate the &or5ersassi(ne+ to it *y MC &itho2t the latters approval. 2ote+here2n+er is the portion of the -ontra-t statin( the po&er of R9C to+ismiss.

n f2rtheran-e of the a*ove provision, R9C re<2este+ MC toterminate petitioner from his employment &ith the -ompany. nresponse to the re<2est of R9C, MC terminate+ petitioner fromservi-e. As fo2n+ *y the La*or Ar*iter, to &hi-h &e a(ree, the+ismissal of petitioner &as in+ee+ ma+e 2n+er the instr2-tion of R9C to MC.

The fo2rth an+ most important re<2irement in as-ertainin( thepresen-e of employer)employee relationship is the po&er of -ontrol. The po&er of -ontrol refers to the a2thority of the employer to-ontrol the employee not only &ith re(ar+ to the res2lt of &or5 to*e +one *2t also to the means an+ metho+s *y &hi-h the &or5 is to*e a--omplishe+. t sho2l+ *e *orne in min+, that the /-ontrol test/-alls merely for the e'isten-e of the ri(ht to -ontrol the manner of +oin( the &or5, an+ not ne-essarily to the a-t2al e'er-ise of theri(ht. n the -ase at *ar, &e nee+ not *ela*or o2rselves in+is-2ssin( &hether the po&er of -ontrol e'ists. R9C alrea+ya+mitte+ that it e'er-ise+ -ontrol an+ s2pervision overpetitioner. R9C, ho&ever, raises the +efense that the po&er of -ontrol &as ?ointly e'er-ise+ &ith MC. The La*or Ar*iter, on theother han+, fo2n+ that petitioner &as 2n+er the +ire-t -ontrol an+s2pervision of the personnel of R9C an+ not MC. De are in-line+to *elieve the 6n+in(s of the La*or Ar*iter &hi-h is s2pporte+ notonly *y the a+mission of R9C *2t also *y the evi+en-e on re-or+.

esi+es, to o2r min+, the a+mission of R9C that it e'er-ise+ -ontrolan+ s2pervision over petitioner, the same *ein( a +e-larationa(ainst interest, is s28-ient eno2(h to prove that the po&er of -ontrol tr2ly e'ists.

De, therefore, hol+ that an employer)employee relationship e'ists*et&een petitioner an+ R9C.

Rose&oo+ ro-essin(, n-. v. NLRC !"@# SCRA

4#$ The overri+in( premise in the la*or ar*iters e-ision hol+in( these-2rity a(en-y an+ the petitioner lia*le &as that sai+ partiesoIere+ no evi+en-e ref2tin( or re*2ttin( the -omplainants-omp2tation of their monetary -laims. The ar*iter r2le+ thatpetitioner &as lia*le in solidu$ &ith the a(en-y for salar. di5erentials *ase+ on Arti-les #B, #; an+ #@ of the La*or Co+e&hi-h hol+ an employer ?ointly an+ severally lia*le &ith its-ontra-tor or s2*-ontra-tor, as if it is the +ire-t employer. De <2otesai+ provisions *elo&

ART. #@. Solidar. l iabilit." )) The provisions of e'istin( la&s to the-ontrary not&ithstan+in(, every employer or in+ire-t employershall *e hel+ responsi*le &ith his -ontra-tor or s2*-ontra-tor forany violation of any provision of this Co+e. 9or p2rposes of +eterminin( the e'tent of their -ivil lia*ility 2n+er this Chapter,they shall *e -onsi+ere+ as +ire-t employers.

=pon the other han+, bac- %ages and se(aration (a. &erea&ar+e+ *e-a2se the -omplainants &ere -onstr2-tively an+ille(ally +ismisse+ *y the se-2rity a(en-y &hi-h pla-e+ them onQoatin( stat2s an+ at the same time (ave assi(nments to ne&lyhire+ se-2rity (2ar+s. Notin( that the relationship *et&een these-2rity a(en-y an+ the -omplainants &as alrea+y straine+, thela*or ar*iter (rante+ separation pay in lie2 of reinstatement.

The 6rst t&o (ro2n+s are meritorio2s. Le(ally 2ntena*le, ho&ever,is the -ontention that petitioner is not lia*le for any &a(e+iIerential for the reason that it pai+ the employees in a--or+an-e&ith the -ontra-t for se-2rity servi-es &hi-h it ha+ entere+ into&ith the se-2rity a(en-y. Not&ithstan+in( the servi-e -ontra-t*et&een the petitioner an+ the se-2rity a(en-y, the former is stillsoli+arily lia*le to the employees, &ho &ere not privy to sai+-ontra-t, p2rs2ant to the afore-ite+ provisions of the Co+e. La*orstan+ar+ le(islations are ena-te+ to alleviate the pli(ht of &or5ers&hose &a(es *arely meet the spiralin( -osts of their *asi- nee+s.

They are -onsi+ere+ &ritten in every -ontra-t, an+ stip2lations in

B

violation thereof are -onsi+ere+ not &ritten. Similarly, le(islate+ performan-e of any &or5, tas5, ?o* or pro?e-t0 an+ 2n+er Arti-le



y, (&a(e in-reases are +eeme+ amen+ments to the -ontra-t. Th2s,employers -annot hi+e *ehin+ their -ontra-ts in or+er to eva+etheir or their -ontra-tors or s2*-ontra-tors lia*ility fornon-omplian-e &ith the stat2tory minim2m &a(e.

The ?oint an+ several lia*ility of the employer or prin-ipal &asena-te+ to ens2re -omplian-e &ith the provisions of the Co+e,prin-ipally those on stat2tory minim2m &a(e. The -ontra-tor ors2*-ontra-tor is ma+e lia*le *y virt2e of his or her stat2s as a

+ire-t employer, an+ the prin-ipal as the in+ire-t employer of the-ontra-tors employees. This lia*ility fa-ilitates, if not (2arantees,payment of the &or5ers -ompensation, th2s, (ivin( the &or5ersample prote-tion as man+ate+ *y the @; Constit2tion. This is not2n+2ly *2r+ensome to the employer.Sho2l+ the in+ire-t employer*e -onstraine+ to pay the &or5ers, it -an re-over &hatever amo2ntit ha+ pai+ in a--or+an-e &ith the terms of the servi-e -ontra-t*et&een itself an+ the -ontra-tor.

Dithal, fairness li5e&ise +i-tates that the petitioner sho2l+ not,ho&ever, *e hel+ lia*le for &a(e +iIerentials in-2rre+ &hile the-omplainants &ere assi(ne+ to other -ompanies. =n+er these -ite+

provisions of the La*or Co+e, sho2l+ the -ontra-tor fail to pay the&a(es of its employees in a--or+an-e &ith la&, the in+ire-temployer !the petitioner in this -ase$, is ?ointly an+ severally lia*le&ith the -ontra-tor, *2t s2-h responsi*ility sho2l+ *e 2n+erstoo+ to*e limite+ to the e'tent of the &or5 performe+ 2n+er the -ontra-t,in the same manner an+ e'tent that he is lia*le to the employees+ire-tly employe+ *y him. This lia*ility of petitioner -overs thepayment of the &or5ers performan-e of any &or5, tas5, ?o* orpro?e-t. So lon( as the &or5, tas5, ?o* or pro?e-t has *eenperforme+ for petitioners *ene6t or on its *ehalf, the lia*ilitya--r2es for s2-h perio+ even if, later on, the employees areevent2ally transferre+ or reassi(ne+ else&here.

De repeat The in+ire-t employers lia*ility to the -ontra-torsemployees e'ten+s only to the perio+ +2rin( &hi-h they &ere&or5in( for the petitioner, an+ the fa-t that they &ere reassi(ne+to another prin-ipal ne-essarily en+s s2-h responsi*ility. Theprin-ipal is ma+e lia*le to his in+ire-t employees, *e-a2se it -anprote-t itself from irresponsi*le -ontra-tors *y &ithhol+in( s2-hs2ms an+ payin( them +ire-tly to the employees or *y re<2irin( a*on+ from the -ontra-tor or s2*-ontra-tor for this p2rpose.

Similarly, the soli+ary lia*ility for payment of *a-5 &a(es an+separation pay is limite+, 2n+er Arti-le #B, to the e'tent of the&or5 performe+ 2n+er the -ontra-t0 2n+er Arti-le #;, to the

p y , , ? p ? 0#@, to the e'tent of their -ivil lia*ility 2n+er this Chapter Konpayment of &a(es.

These provisions -annot apply to petitioner, -onsi+erin( that the-omplainants &ere no lon(er &or5in( for or assi(ne+ to it &henthey &ere ille(ally +ismisse+. 92rthermore, an or+er to pay *a-5&a(es an+ separation pay is investe+ &ith a p2nitive -hara-ter,s2-h that an in+ire-t employer sho2l+ not *e ma+e lia*le &itho2t a6n+in( that it ha+ -ommitte+ or -onspire+ in the ille(al +ismissal.

The lia*ility arisin( from an ille(al +ismissal is 2nli5e an or+er topay the stat2tory minim2m &a(e, *e-a2se the &or5ers ri(ht tos2-h &a(e is +erive+ from la&. The proposition that payment of *a-5 &a(es an+ separation pay sho2l+ *e -overe+ *y Arti-le #@,&hi-h hol+s an in+ire-t employer soli+arily responsi*le &ith his-ontra-tor or s2*-ontra-tor for any violation of any provision of thisCo+e, &o2l+ have *een tena*le if there &ere proof )) there &asnone in this -ase )) that the prin-ipal>employer ha+ -onspire+ &iththe -ontra-tor in the a-ts (ivin( rise to the ille(al +ismissal.

Alvia+o, et al v. ro-ter U Gam*le, an+ romm

Gemm, G.R. No. B##B, @ Mar-h "##n or+er to resolve the iss2e of &hether UG is the employer of petitioners, it is ne-essary to 6rst +etermine &hether romm)Geman+ SAS are la*or)only -ontra-tors or le(itimate ?o* -ontra-tors.

The fore(oin( provisions shall *e &itho2t pre?2+i-e to theappli-ation of Arti-le "4 !-$ of the La*or Co+e, as amen+e+.

S2*stantial -apital or investment refers to -apital sto-5s an+s2*s-ri*e+ -apitali7ation in the -ase of -orporations, tools,e<2ipment, implements, ma-hineries an+ &or5 premises, a-t2allyan+ +ire-tly 2se+ *y the -ontra-tor or s2*-ontra-tor in theperforman-e or -ompletion of the ?o*, &or5 or servi-e -ontra-te+

o2t.

The ri(ht to -ontrol shall refer to the ri(ht reserve+ to the personfor &hom the servi-es of the -ontra-t2al &or5ers are performe+, to+etermine not only the en+ to *e a-hieve+, *2t also the manneran+ means to *e 2se+ in rea-hin( that en+.

' ' ' ' !=n+ers-orin( s2pplie+.$

Clearly, the la& an+ its implementin( r2les allo& -ontra-tin(arran(ements for the performan-e of spe-i6- ?o*s, &or5s orservi-es. n+ee+, it is mana(ement prero(ative to farm o2t any of its a-tivities, re(ar+less of &hether s2-h a-tivity is peripheral or-ore in nat2re. Ho&ever, in or+er for s2-h o2tso2r-in( to *e vali+, it

B"

m2st *e ma+e to an inde(endent contractor *e-a2se the -2rrent a-tivities &hi-h are +ire-tly relate+ to the prin-ipal *2siness of



(la*or r2les e'pressly prohi*it la*or)only -ontra-tin(.

n the instant -ase, the 6nan-ial statements of romm)Gem sho&that it has a2thori7e+ -apital sto-5 of million an+ a pai+)in-apital, or -apital availa*le for operations, of ##,###.## as of @@#. t also has lon( term assets &orth 43",@." an+ -2rrentassets of ;@,#4".3". romm)Gem has also proven that itmaintaine+ its o&n &areho2se an+ o8-e spa-e &ith a Qoor area of ;# s<2are meters. t also ha+ 2n+er its name three re(istere+

vehi-les &hi-h &ere 2se+ for its promotional>mer-han+isin(*2siness. romm)Gem also has other -lients asi+e from UG. =n+erthe -ir-2mstan-es, &e 6n+ that romm)Gem has s2*stantialinvestment &hi-h relates to the &or5 to *e performe+. Thesefa-tors ne(ate the e'isten-e of the element spe-i6e+ in Se-tion !i$of LE epartment r+er No. )#".

The re-or+s also sho& that romm)Gem s2pplie+ its -omplainant)&or5ers &ith the relevant materials, s2-h as mar5ers, tapes, linersan+ -2tters, ne-essary for them to perform their &or5. romm)Gemalso iss2e+ 2niforms to them. t is also relevant to mention thatromm)Gem alrea+y -onsi+ere+ the -omplainants &or5in( 2n+er it

as its re(2lar, not merely -ontra-t2al or pro?e-t, employees. This-ir-2mstan-e ne(ates the e'isten-e of element !ii$ as state+ inSe-tion of LE epartment r+er No. )#", &hi-h spea5sof contractual employees. This, f2rthermore, ne(ates on the part of romm)Gem *a+ faith an+ intent to -ir-2mvent la*or la&s &hi-hfa-tors have often *een tippin( points that lea+ the Co2rt to stri5e+o&n the employment pra-ti-e or a(reement -on-erne+ as-ontrary to p2*li- poli-y, morals, (oo+ -2stoms or p2*li- or+er.

=n+er the -ir-2mstan-es, romm)Gem -annot *e -onsi+ere+ as ala*or)only -ontra-tor. De 6n+ that it is a le(itimate in+epen+ent-ontra-tor.

n the other han+, the Arti-les of n-orporation of SAS sho&s thatit has a pai+)in -apital of only 3,"#.##. There is no otherevi+en-e presente+ to sho& ho& m2-h its &or5in( -apital an+assets are. 92rthermore, there is no sho&in( of s2*stantialinvestment in tools, e<2ipment or other assets.

92rthermore, the petitioners have *een -har(e+ &ith themer-han+isin( an+ promotion of the pro+2-ts of UG, an a-tivitythat has alrea+y *een -onsi+ere+ *y the Co2rt as +o2*tlessly+ire-tly relate+ to the man2fa-t2rin( *2siness, &hi-h is theprin-ipal *2siness of UG. Consi+erin( that SAS has no s2*stantial-apital or investment an+ the &or5ers it re-r2ite+ are performin(

y p pUG, &e 6n+ that the former is en(a(e+ in la*or)only -ontra-tin(.

Dhere la*or)only -ontra-tin( e'ists, the La*or Co+e itself esta*lishes an employer)employee relationship *et&een theemployer an+ the employees of the la*or)only -ontra-tor. Thestat2te esta*lishes this relationship for a -omprehensive p2rposeto prevent a -ir-2mvention of la*or la&s. The -ontra-tor is-onsi+ere+ merely an a(ent of the prin-ipal employer an+ the latteris responsi*le to the employees of the la*or)only -ontra-tor as if

s2-h employees ha+ *een +ire-tly employe+ *y the prin-ipalemployer.

n+2strial Tim*er Corp v. NLRC, B@ SCRA 34Grantin(, arguendo, that private respon+ents &ere employe+ *yEn(ineer os+os, petitioners &o2l+ still *e lia*le to privaterespon+ents sin-e the in+i-es of a /la*or only/ -ontra-tin( sit2ation&ill apply to the present -ase. /La*or)only/ -ontra-tin( is +e6ne+ inSe-tion @, R2le F, oo5 of the mni*2s R2les. mplementin(the La*or Co+e in the follo&in( terms

Se-. @. Labor)onl. contracting. !a$ Any person &ho 2n+erta5es to

s2pply &or5ers to an employer shall *e +eeme+ to *e en(a(e+ inla*or)only -ontra-tin( &here s2-h person

!$ oes not have s2*stantial -apital or investment in the form of tools, e<2ipment, ma-hineries, &or5 premises an+ other materials0an+

!"$ The &or5ers re-r2ite+ an+ pla-e+ *y s2-h person areperformin( a-tivities &hi-h are +ire-tly relate+ to the prin-ipal*2siness or operations of the employer in &hi-h &or5ers areha*it2ally employe+.

!*$ La*or)only -ontra-tin( as +e6ne+ herein is here*y prohi*ite+an+ the (erson acting as contractor shall be considered $erel. asan agent or inter$ediar. o' the e$(lo.er &ho shall *e responsi*le

to the &or5er in the same manner an+ e'tent as if the latter &ere+ire-tly employe+ *y him.

' ' ' ' ' ' ' ' '. !Emphasis s2pplie+.$

The le(al eIe-t of a 6n+in( that a -ontra-tor is not a tr2ein+epen+ent -ontra-tor or /?o* -ontra-tor/ *2t merely a /la*or)only/ -ontra-tor &as e'po2n+e+ 2pon in Phili((ine #an- o' Co$$unications vs" NLRC to &it

... The la*or)only1 -ontra-tor i.e., 1the person or interme+iary is-onsi+ere+ 1merely as an a(ent of the employer.1 The employer isma+e *y the stat2te responsi*le to the employees of the la*or)only1 -ontra-tor as i' such e$(lo.ees had been directl. e$(lo.ed

B3

b. the e$(lo.er" Th2s, &here 1la*or)only1 -ontra-tin( e'ists in a espite the fa-t that the servi-e -ontra-ts -ontain stip2lations



(iven -ase, the stat2te itself implies or esta*lishes an employer)employee relationship *et&een the employer !the o&ner of thepro?e-t$ an+ the employees of the 1la*or)only1 -ontra-tor, this timefor a co$(rehensive p2rpose 1employer for p2rposes of this Codeto (revent an. violation or circu$vention o' an. (rovision o' thisCode"B The la& in eIe-t hol+s *oth the employer an+ the 1la*or)only1 -ontra-tor responsi*le to the latter1s employees for the moreeIe-tive safe(2ar+in( of the employees1 ri(hts 2n+er the La*orCo+e.1

Hen-e, a 6n+in( that a -ontra-tor is a /la*or)only/ -ontra-tor ise<2ivalent to a 6n+in( that there e'ists an employer)employeerelationship *et&een the o&ner of the pro?e-t an+ the employees of the 1la*or only -ontra-tor sin-e that relationship is +e6ne+ an+pres-ri*e+ *y the la& itself.

res-in+in( from the fore(oin(, the inel2-ta*le -on-l2sion is that anemployer)employee relationship e'iste+ *et&een petitioner an+private respon+ents. En(ineer os+os ha+ no s2*stantial -apitalinvestment in the form of tools, e<2ipment, ma-hineries, &or5premises an+ other materials sin-e the ply&oo+ plant an+ panels&ere all s2pplie+ *y petitioner. Li5e&ise, the a-tivities 2n+erta5en

*y the -ontra-tor &ere petitioners1 *2siness.

a*as v. Loren7o Shippin( Corp G.R. No.

B#@, e-em*er "##etitioners vi(oro2sly insist that they &ere employees of LSC0 an+that MS is not an in+epen+ent -ontra-tor, *2t a la*or)only-ontra-tor. LSC, on the other han+, maintains that MS is anin+epen+ent -ontra-tor, &ith a+e<2ate -apital an+ investment. LSC-apitali7es on the ratio-ination ma+e *y the CA.

n +e-larin( MS as an in+epen+ent -ontra-tor, the CA, in the-hallen(e+ e-ision, heavily relie+ on the provisions of

the Agree$ent , &herein MS +e-lare+ that it &as an in+epen+ent-ontra-tor, &ith s2*stantial -apital an+ investment.

De Los Santos v" NLRC instr2-te+ 2s that the -hara-ter of the*2siness, i"e", &hether as la*or)only -ontra-tor or as ?o* -ontra-tor,sho2l+ *e meas2re+ in terms of, an+ +etermine+ *y, the -riteria set*y stat2te. The parties -annot +i-tate *y the mere e'pe+ien-e of a2nilateral +e-laration in a -ontra-t the -hara-ter of their *2siness.

n San Miguel Cor(oration v" Vicente #" Se$illano, NelsonMonde0as 4ovito Re$ada Alilgilan Multi)Pur(ose Coo( AMPC/and Merl.n N" Policar(io this Co2rt e'plaine+

&hi-h are earmar5s of in+epen+ent -ontra-torship, they +o notma5e it le(ally so. The lan(2a(e of a -ontra-t is neither+eterminative nor -on-l2sive of the relationship *et&een theparties. etitioner SMC an+ AMC -annot +i-tate, *y a +e-larationin a -ontra-t, the -hara-ter of AMC1s *2siness, that is, &hetheras la*or)only -ontra-tor, or ?o* -ontra-tor. AMC1s -hara-tersho2l+ *e meas2re+ in terms of, an+ +etermine+ *y, the -riteriaset *y stat2te.

Th2s, in +istin(2ishin( *et&een prohi*ite+ la*or)only -ontra-tin(an+ permissi*le ?o* -ontra-tin(, the totality of the fa-ts an+ thes2rro2n+in( -ir-2mstan-es of the -ase are to *e -onsi+ere+.

La*or)only -ontra-tin(, a prohi*ite+ a-t, is an arran(ement &herethe -ontra-tor or s2*-ontra-tor merely re-r2its, s2pplies, or pla-es&or5ers to perform a ?o*, &or5, or servi-e for a prin-ipal. n la*or)only -ontra-tin(, the follo&in( elements are present !a$ the-ontra-tor or s2*-ontra-tor +oes not have s2*stantial -apital orinvestment to a-t2ally perform the ?o*, &or5, or servi-e 2n+er itso&n a--o2nt an+ responsi*ility0 an+ !*$ the employees re-r2ite+,s2pplie+, or pla-e+ *y s2-h -ontra-tor or s2*-ontra-tor performa-tivities &hi-h are +ire-tly relate+ to the main *2siness of the

prin-ipal.

n the other han+, permissi*le ?o* -ontra-tin( or s2*-ontra-tin(refers to an arran(ement &here*y a prin-ipal a(rees to p2t o2t orfarm o2t &ith the -ontra-tor or s2*-ontra-tor the performan-e or-ompletion of a spe-i6- ?o*, &or5, or servi-e &ithin a +e6nite orpre+etermine+ perio+, re(ar+less of &hether s2-h ?o*, &or5, orservi-e is to *e performe+ or -omplete+ &ithin or o2tsi+e thepremises of the prin-ipal.

A person is -onsi+ere+ en(a(e+ in le(itimate ?o* -ontra-tin( ors2*-ontra-tin( if the follo&in( -on+itions -on-2r

!a$ The -ontra-tor -arries on a +istin-t an+ in+epen+ent *2sinessan+ 2n+erta5es the -ontra-t &or5 on his a--o2nt 2n+er his o&nresponsi*ility a--or+in( to his o&n manner an+ metho+, free fromthe -ontrol an+ +ire-tion of his employer or prin-ipal in all matters-onne-te+ &ith the performan-e of his &or5 e'-ept as to theres2lts thereof0

!*$ The -ontra-tor has s2*stantial -apital or investment0 an+

!-$ The a(reement *et&een the prin-ipal an+ the -ontra-tor ors2*-ontra-tor ass2res the -ontra-t2al employees1 entitlement toall la*or an+ o--2pational safety an+ health stan+ar+s, freee'er-ise of the ri(ht to self)or(ani7ation, se-2rity of ten2re, an+so-ial &elfare *ene6ts.

B4

Given the a*ove stan+ar+s, &e s2stain the petitioners -ontention =n+er Se-tion , R2le F, oo5 , of the mni*2s R2les



that MS is en(a(e+ in la*or)only -ontra-tin(.

*irst , petitioners &or5e+ at LSCs premises, an+ no&here else. therthan the provisions of the Agree$ent , there &as no sho&in( that it&as MS &hi-h esta*lishe+ petitioners &or5in( pro-e+2re an+metho+s, &hi-h s2pervise+ petitioners in their &or5, or &hi-heval2ate+ the same. There &as a*sol2te la-5 of evi+en-e that MSe'er-ise+ -ontrol over them or their &or5, e'-ept for the fa-t thatpetitioners &ere hire+ *y MS.

Second, LSC &as 2na*le to present proof that MS ha+ s2*stantial-apital. The re-or+ *efore 2s is *ereft of any proof pertainin( to the-ontra-tors -apitali7ation, nor to its investment in tools, e<2ipment,or implements a-t2ally 2se+ in the performan-e or -ompletion of the ?o*, &or5, or servi-e that it &as -ontra-te+ to ren+er. Dhat is-lear &as that the e<2ipment 2se+ *y MS &ere o&ne+ *y, an+merely rente+ from, LSC.

n Mandaue 3alleon Trade Inc" v" Andales, &e hel+

The la& -asts the *2r+en on the -ontra-tor to prove that it hass2*stantial -apital, investment, tools, et-. Employees, on the other

han+, nee+ not prove that the -ontra-tor +oes not have s2*stantial-apital, investment, an+ tools to en(a(e in ?o*)-ontra-tin(.

Third, petitioners performe+ a-tivities &hi-h &ere +ire-tly relate+ tothe main *2siness of LSC. The &or5 of petitioners as -he-5ers,&el+ers, 2tility men, +rivers, an+ me-hani-s -o2l+ only *e-hara-teri7e+ as part of, or at least -learly relate+ to, an+ in thep2rs2it of, LSCs *2siness. Lo(i-ally, &hen petitioners &ere assi(ne+*y MS to LSC, MS a-te+ merely as a la*or)only -ontra-tor.

Lastl. , as fo2n+ *y the NLRC, MS ha+ no other -lient e'-ept forLSC, an+ neither MS nor LSC ref2te+ this 6n+in(, there*y*olsterin( the NLRC 6n+in( that MS is a la*or)only -ontra-tor.

The CA erre+ in -onsi+erin( MSs Certi6-ate of Re(istration ass28-ient proof that it is an in+epen+ent -ontra-tor. n San MiguelCor(oration v" Vicente #" Se$illano Nelson Monde0as 4ovitoRe$ada Alilgilan Multi)Pur(ose Coo( AMPC/ and Merl.n N"Policar(io &e hel+ that a Certi6-ate of Re(istration iss2e+ *y theepartment of La*or an+ Employment is not -on-l2sive evi+en-e of s2-h stat2s. The fa-t of re(istration simply prevents the le(alpres2mption of *ein( a mere la*or)only -ontra-tor from arisin(.

Ne& Gol+en 2il+ers v CA, G.R. No. 4;,

e-em*er "##3

mplementin( the La*or Co+e, an in+epen+ent -ontra-tor is one&ho 2n+erta5es ?o* -ontra-tin(, i"e", a person &ho !a$ -arries onan in+epen+ent *2siness an+ 2n+erta5es the -ontra-t &or5 on hiso&n a--o2nt 2n+er his o&n responsi*ility a--or+in( to his o&nmanner an+ metho+, free from the -ontrol an+ +ire-tion of hisemployer or prin-ipal in all matters -onne-te+ &ith theperforman-e of the &or5 e'-ept as to the res2lts thereof0 an+ !*$has s2*stantial -apital or investment in the form of tools,

e<2ipments, ma-hineries, &or5 premises, an+ other materials&hi-h are ne-essary in the -on+2-t of the *2siness. :2rispr2+entialhol+in(s are to the eIe-t that in +eterminin( the e'isten-e of anin+epen+ent -ontra-tor relationship, several fa-tors may *e-onsi+ere+, s2-h as, *2t not ne-essarily -on6ne+ to, &hether or notthe -ontra-tor is -arryin( on an in+epen+ent *2siness0 the nat2rean+ e'tent of the &or50 the s5ill re<2ire+0 the term an+ +2ration of the relationship0 the ri(ht to assi(n the performan-e of spe-i6e+pie-es of &or50 the -ontrol an+ s2pervision of the &or5 to another0the employers po&er &ith respe-t to the hirin(, 6rin( an+ paymentof the -ontra-tors &or5ers0 the -ontrol of the premises0 the +2ty tos2pply premises, tools, applian-es, materials an+ la*or0 an+ the

mo+e, manner an+ terms of payment. :2'taposin( this provision vis))vis the fa-ts of this -ase, &e are-onvin-e+ that Nilo Layno 2il+ers is 2n+erta5in( permissi*le la*oror ?o* -ontra-tin(. Nilo Layno 2il+ers is a +2ly li-ense+ la*or-ontra-tor -arryin( on an in+epen+ent *2siness for a spe-iali7e+&or5 that involves the 2se of some parti-2lar, 2n2s2al an+ pe-2liars5ills an+ e'pertise, li5e -on-rete &or5s, form &or5s an+steel re*ars &or5s. As a li-ense+ la*or -ontra-tor, it -omplie+ &iththe -on+itions set forth in Se-tion , R2le F)A, oo5 , R2les tomplement the La*or Co+e, amon( others, proof of 6nan-ial-apa*ility an+ list of e<2ipment, tools, ma-hineries an+ implementsto *e 2se+ in the *2siness. 92rther, it entere+ into a &ritten-ontra-t &ith the petitioner, a re<2irement 2n+er Se-tion 3, R2leF)A, oo5 , R2les to mplement the La*or Co+e to ass2re theemployees of the minim2m la*or stan+ar+s an+ *ene6ts provi+e+*y e'istin( la&s.

This is e'a-tly the sit2ation o*tainin( in the -ase at*ar. Nilo Layno 2il+ers hire+ its o&n employees, the privaterespon+ents, to +o spe-iali7e+ &or5 in the rin-e avi+ ro?e-t of the petitioner. The means an+ metho+s a+opte+ *y the privaterespon+ents &ere +ire-te+ *y Nilo Layno 2il+ers e'-ept that, fromtime to time, the en(ineers of the petitioner visite+ the site to-he-5 &hether the &or5 &as in a--or+ &ith the plans an+

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spe-i6-ations of the prin-ipal. As a+mitte+ *y Nilo G. Layno, he 9rom the fore(oin( +is<2isition, the petitioner +i+ not, as it -o2l+



2n+ertoo5 the -ontra-t &or5 on his o&n a--o2nt an+ responsi*ility,free from interferen-e from any other persons, e'-ept as to theres2lts0 that he &as the one payin( the salaries of privaterespon+ents0 an+ that as employer of the private respon+ents, heha+ the po&er to terminate or +ismiss them for ?2st an+ vali+-a2se. n+2*ita*ly, the Co2rt 6n+s that Nilo Layno 2il+ersmaintaine+ eIe-tive s2pervision an+ -ontrol over the private-omplainants.

Th2s, it &as plain -on?e-t2re on the part of the La*or Ar*iter, theNLRC an+ the Co2rt of Appeals to -on-l2+e that Nilo Layno 2il+ers&as a la*or)only -ontra-tor merely *e-a2se it +oes not haveinvestment in the form of tools or ma-hineries. They faile+ toappre-iate the fa-t that Nilo Layno 2il+ers ha+ s2*stantial-apitali7ation for it +i+ not only provi+e la*or to +o the spe-i6e+pro?e-t an+ pay their &a(es, *2t it f2rnishe+ the materials to *e2se+ in the -onstr2-tion.

n Neri v" NLRC, &e hel+ that the la*or -ontra-tor &hi-h s28-ientlyprove+ that it ha+ s2*stantial -apital &as not en(a(e+ in la*or)only-ontra-tin(. Th2s

Dhile there may *e no evi+en-e that it has investment in the formof tools, e<2ipment, ma-hineries, &or5 premises, amon( others, itis eno2(h that it has s2*stantial -apital, as &as esta*lishe+ *eforethe La*or Ar*iter as &ell as the NLRC. n other &or+s, the la& +oesnot re<2ire *oth s2*stantial -apital an+ investment in the form of tools, e<2ipment, ma-hineries, et-. This is -lear from the 2se of the-on?2n-tion or. f the intention &as to re<2ire the -ontra-tor toprove that he has *oth -apital an+ the re<2isite investment, thenthe -on?2n-tion an+ sho2l+ have *een 2se+.

Moreover, the Co2rt has ta5en ?2+i-ial noti-e of the (eneralpra-ti-e a+opte+ in several (overnment an+ private instit2tionsan+ in+2stries of hirin( in+epen+ent -ontra-tors to perform spe-ial

servi-es.

Anent the se-on+ iss2e, &e hol+ that there e'iste+ an employer)employee relationship *et&een petitioner an+ private respon+entsal*eit for a limite+ p2rpose.

n le(itimate ?o* -ontra-tin(, the la& -reates an employer)employee relationship for a limite+ p2rpose, i"e", to ens2re that theemployees are pai+ their &a(es. The prin-ipal employer *e-omes ?ointly an+ severally lia*le &ith the ?o* -ontra-tor only for thepayment of the employees &a(es &henever the -ontra-tor fails topay the same. ther than that, the prin-ipal employer is notresponsi*le for any -laim ma+e *y the employees.

not, ille(ally +ismisse+ the private -omplainants. Hen-e, it -o2l+not *e hel+ lia*le for *a-5&a(es an+ separation pay. Nevertheless,it is ?ointly an+ severally lia*le &ith Nilo Layno 2il+ers for theprivate -omplainants &a(es, in the same manner an+ e'tent that itis lia*le to its +ire-t employees.

This lia*ility -overs the payment of servi-e in-entive leave an+3 month pay of the private -omplainants +2rin( the time they&ere &or5in( at petitioners rin-e avi+ ro?e-t. So lon( as the

&or5, tas5, ?o* or pro?e-t has *een performe+ for petitioners *ene6tor on its *ehalf, the lia*ility a--r2es for s2-h perio+ even if, lateron, the employees are event2ally transferre+ or reassi(ne+else&here.

Gar+en of Memories ar5, et al., v. National

La*or Relations Commission, et al., G.R. No.

B#";, 9e*r2ary "#"n the same vein, Se-tions an+ @, LE epartment r+er No. #,Series of @@;, state that

Se-. . 4ob contracting" There is ?o* -ontra-tin( permissi*le 2n+erthe Co+e if the follo&in( -on+itions are met

!$ The -ontra-tor -arries on an in+epen+ent *2siness an+2n+erta5es the -ontra-t &or5 on his o&n a--o2nt 2n+er his o&nresponsi*ility a--or+in( to his o&n manner an+ metho+, free fromthe -ontrol an+ +ire-tion of his employer or prin-ipal in all matters-onne-te+ &ith the performan-e of the &or5 e'-ept as to theres2lts thereof0 an+

!"$ The -ontra-tor has s2*stantial -apital or investment in theform of tools, e<2ipment, ma-hineries, &or5 premises, an+ othermaterials &hi-h are ne-essary in the -on+2-t of his *2siness.

Th2s, in +eterminin( the e'isten-e of an in+epen+ent -ontra-torrelationship, several fa-tors may *e -onsi+ere+, s2-h as, *2t notne-essarily -on6ne+ to, &hether or not the -ontra-tor is -arryin( onan in+epen+ent *2siness0 the nat2re an+ e'tent of the &or50 thes5ill re<2ire+0 the term an+ +2ration of the relationship0 the ri(ht toassi(n the performan-e of spe-i6e+ pie-es of &or50 the -ontrol an+s2pervision of the &or5 to another0 the employers po&er &ithrespe-t to the hirin(, 6rin( an+ payment of the -ontra-tors&or5ers0 the -ontrol of the premises0 the +2ty to s2pply premises,tools, applian-es, materials an+ la*or0 an+ the mo+e, manner an+terms of payment.

n the other han+, there is la*or)only -ontra-tin( &here !a$ the

BB

person s2pplyin( &or5ers to an employer +oes not have s2*stantiali l i i h f f l i hi i

-omplian-e &ith, an+ s2*?e-t to, all re<2irements an+ stan+ar+sf G + f i



-apital or investment in the form of tools, e<2ipment, ma-hineries,&or5 premises, amon( others0 an+ !*$ the &or5ers re-r2ite+ an+pla-e+ *y s2-h person are performin( a-tivities &hi-h are +ire-tlyrelate+ to the prin-ipal *2siness of the employer.

The Co2rt 6n+s no -ompellin( reason to +eviate from the 6n+in(sof the tri*2nals *elo&" oth the -apitali7ation re<2irement an+ thepo&er of -ontrol on the part of Re<2io are &antin(.

Generally, the pres2mption is that the -ontra-tor is a la*or)only-ontra-tin( 2nless s2-h -ontra-tor over-omes the *2r+en of provin( that it has the s2*stantial -apital, investment, tools an+ theli5e. n the present -ase, tho2(h Gar+en of Memories is not the-ontra-tor, it has the *2r+en of provin( that Re<2io has s28-ient-apital or investment sin-e it is -laimin( the s2ppose+ stat2s of Re<2io as in+epen+ent -ontra-tor. Gar+en of Memories, ho&ever,faile+ to a++2-e evi+en-e p2rportin( to sho& that Re<2io ha+s28-ient -apitali7ation. Neither +i+ it sho& that she investe+ in theform of tools, e<2ipment, ma-hineries, &or5 premises an+ othermaterials &hi-h are ne-essary in the -ompletion of the servi-e-ontra-t.

92rthermore, Re<2io &as not a li-ense+ -ontra-tor. Her e'planationthat her *2siness &as a mere livelihoo+ pro(ram a-in to a -otta(ein+2stry provi+e+ *y Gar+en of Memories as part of its -ontri*2tionto the 2pliftment of the 2n+erprivile(e+ resi+in( near the memorialpar5 proves that her -apital investment &as not s2*stantial.S2*stantial -apital or investment refers to -apital sto-5s an+s2*s-ri*e+ -apitali7ation in the -ase of -orporations, tools,e<2ipment, implements, ma-hineries, an+ &or5 premises, a-t2allyan+ +ire-tly 2se+ *y the -ontra-tor or s2*-ontra-tor in theperforman-e or -ompletion of the ?o*, &or5 or servi-e -ontra-te+o2t. *vio2sly, Re<2io is a la*or)only -ontra-tor.

Another +eterminant fa-tor that -lassi6es petitioner Re<2io as ala*or)only -ontra-tor &as her fail2re to e'er-ise the ri(ht to -ontrolthe performan-e of the &or5 of Cr27. This -an *e (leane+ from theServi-e Contra-t A(reement *et&een Gar+en of Memories an+Re<2io. The re<2irement of the la& in +eterminin( the e'isten-e of in+epen+ent -ontra-torship is that the -ontra-tor sho2l+ 2n+erta5ethe &or5 on his o&n a--o2nt, 2n+er his o&n responsi*ility,a--or+in( to his o&n manner an+ metho+, free from the -ontrol an++ire-tion of the employer e'-ept as to the res2lts thereof. n this-ase, ho&ever, the Servi-e Contra-t A(reement -learly in+i-atesthat Re<2io has no +is-retion to +etermine the means an+ manner*y &hi-h the &or5 is performe+. Rather, the &or5 sho2l+ *e in stri-t

of Gar+en of Memories.

=n+er these -ir-2mstan-es, there is no +o2*t that Re<2io isen(a(e+ in la*or)only -ontra-tin(, an+ is -onsi+ere+ merely ana(ent of Gar+en of Memories. As s2-h, the &or5ers she s2ppliessho2l+ *e -onsi+ere+ as employees of Gar+en of Memories.Conse<2ently, the latter, as prin-ipal employer, is responsi*le tothe employees of the la*or)only -ontra-tor as if s2-h employeeshave *een +ire-tly employe+ *y it.

Nota*ly, Cr27 &as hire+ as a 2tility &or5er tas5e+ to -lean, s&eepan+ &ater the la&n of the memorial par5. She performe+ a-tivities&hi-h &ere ne-essary or +esira*le to its prin-ipal tra+e or*2siness. Th2s, she &as a re(2lar employeeof Gar+en of Memories an+ -annot *e +ismisse+ e'-ept for ?2st an+a2thori7e+ -a2ses.

olyfoam)RGC nternational, Corporation an+

re-illa A. Grama?e vs. E+(ar+o Con-ep-ion G.R.

No. ;"34@, :2ne 3, "#".

n Sasan Sr" v" National Labor Relations Co$$ission Division theCo2rt +istin(2ishe+ permissi*le ?o* -ontra-tin( or s2*-ontra-tin(from la*or)only -ontra-tin(, to &it

ermissi*le ?o* -ontra-tin( or s2*-ontra-tin( refers to anarran(ement &here*y a prin-ipal a(rees to p2t o2t or farm o2t to a-ontra-tor or s2*-ontra-tor the performan-e or -ompletion of aspe-i6- ?o*, &or5 or servi-e &ithin a +e6nite or pre+etermine+perio+, re(ar+less of &hether s2-h ?o*, &or5 or servi-e is to *eperforme+ or -omplete+ &ithin or o2tsi+e the premises of theprin-ipal. A person is -onsi+ere+ en(a(e+ in le(itimate ?o*-ontra-tin( or s2*-ontra-tin( if the follo&in( -on+itions -on-2r

!a$ The -ontra-tor or s2*-ontra-tor -arries on a +istin-t an+in+epen+ent *2siness an+ 2n+erta5es to perform the ?o*,&or5 or servi-e on its o&n a--o2nt an+ 2n+er its o&nresponsi*ility a--or+in( to its o&n manner an+ metho+, an+free from the -ontrol an+ +ire-tion of the prin-ipal in allmatters -onne-te+ &ith the performan-e of the &or5 e'-eptas to the res2lts thereof0

!*$ The -ontra-tor or s2*-ontra-tor has s2*stantial -apital orinvestment0 an+

!-$ The a(reement *et&een the prin-ipal an+ -ontra-tor ors2*-ontra-tor ass2res the -ontra-t2al employees entitlement

B;

to all la*or an+ o--2pational safety an+ health stan+ar+s, freei f th i ht t lf i ti it f t

she f2rnishe+ the plasti- -ontainers an+ -arton *o'es 2se+ ini t th f ti f 5i th tt f

http://sc.judiciary.gov.ph/jurisprudence/2012/june2012/172349.htm







e'er-ise of the ri(ht to self)or(ani7ation, se-2rity of ten2re,an+ so-ial an+ &elfare *ene6ts.

n -ontrast, la*or)only -ontra-tin(, a prohi*ite+ a-t, is anarran(ement &here the -ontra-tor or s2*-ontra-tor merely re-r2its,s2pplies or pla-es &or5ers to perform a ?o*, &or5 or servi-e for aprin-ipal. n la*or)only -ontra-tin(, the follo&in( elements arepresent

!a$ The -ontra-tor or s2*-ontra-tor +oes not have s2*stantial-apital or investment to a-t2ally perform the ?o*, &or5 orservi-e 2n+er its o&n a--o2nt an+ responsi*ility0 an+

!*$ The employees re-r2ite+, s2pplie+ or pla-e+ *y s2-h-ontra-tor or s2*-ontra-tor are performin( a-tivities &hi-hare +ire-tly relate+ to the main *2siness of the prin-ipal.

n San Miguel Cor(oration v" Se$illano the Co2rt lai+ +o&n the-riteria in +eterminin( the e'isten-e of an in+epen+ent an+permissi*le -ontra-tor relationship, to &it

' ' ' KDhether or not the -ontra-tor is -arryin( on an in+epen+ent*2siness0 the nat2re an+ e'tent of the &or50 the s5ill re<2ire+0 theterm an+ +2ration of the relationship0 the ri(ht to assi(n theperforman-e of a spe-i6e+ pie-e of &or50 the -ontrol an+s2pervision of the &or5 to another0 the employers po&er &ithrespe-t to the hirin(, 6rin( an+ payment of the -ontra-tors&or5ers0 the -ontrol of the premises0 the +2ty to s2pply thepremises, tools, applian-es, materials, an+ la*or0 an+ the mo+e,manner an+ terms of payment.

Simply p2t, the totality of the fa-ts an+ the s2rro2n+in(-ir-2mstan-es of the -ase are to *e -onsi+ere+. Ea-h -ase m2st *e+etermine+ *y its o&n fa-ts an+ all the feat2res of the relationshipare to *e -onsi+ere+.

Applyin( the fore(oin( tests, &e a(ree &ith the CAs -on-l2sion that

Grama?e is not an in+epen+ent ?o* -ontra-tor, *2t a la*or)only-ontra-tor.

*irst , Grama?e has no s2*stantial -apital or investment. Thepres2mption is that a -ontra-tor is a la*or)only -ontra-tor 2nless heover-omes the *2r+en of provin( that it has s2*stantial -apital,investment, tools, an+ the li5e. The employee sho2l+ not *ee'pe-te+ to prove the ne(ative fa-t that the -ontra-tor +oes nothave s2*stantial -apital, investment an+ tools to en(a(e in ?o*)-ontra-tin(.

Grama?e -laime+ that it has s2*stantial -apital of its o&n as &ell asinvestment in its o8-e, e<2ipment an+ tools. She pointe+ o2t that

-arryin( o2t the f2n-tion of pa-5in( the mattresses of olyfoam. She a++e+ that she ha+ pla-e+ in olyfoams &or5pla-eten !#$ sealin( ma-hines, t&enty !"#$ han+ tr2-5s, an+ t&o !"$for5lifts to ena*le respon+ent an+ the other employees of Grama?eassi(ne+ at olyfoam to perform their ?o*. 9inally, she e'plaine+that she ha+ her o&n o8-e &ith her o&n staI. Ho&ever, asi+e fromher o&n *are statement, neither Grama?e nor olyfoam presente+evi+en-e sho&in( Grama?es o&nership of the e<2ipment an+

ma-hineries 2se+ in the performan-e of the alle(e+ -ontra-te+ ?o*. Consi+erin( that these ma-hineries are fo2n+ in olyfoamspremises, there -an *e no other lo(i-al -on-l2sion *2t that thetools an+ e<2ipment 2tili7e+ *y Grama?e an+ her employees areo&ne+ *y olyfoam. Neither +i+ olyfoam nor Grama?e sho& thatthe latter ha+ -lients other than the former. Sin-e petitioners faile+to a++2-e evi+en-e that Grama?e ha+ any s2*stantial -apital,investment or assets to perform the &or5 -ontra-te+ for, thepres2mption that Grama?e is a la*or)only -ontra-tor stan+s.

Second Grama?e +i+ not -arry on an in+epen+ent *2siness or2n+erta5e the performan-e of its servi-e -ontra-t a--or+in( to itso&n manner an+ metho+, free from the -ontrol an+ s2pervision of

its prin-ipal, olyfoam, its apparent role havin( *een merely tore-r2it persons to &or5 for olyfoam. t is 2n+isp2te+ thatrespon+ent ha+ performe+ his tas5 of pa-5in( olyfoams foampro+2-ts in olyfoams premises. As to the re-r2itment of respon+ent, petitioners &ere a*le to esta*lish only thatrespon+ents appli-ation &as referre+ to Grama?e, *2t that isall. rior to his termination, respon+ent ha+ *een performin( thesame ?o* in olyfoams *2siness for almost si' !B$ years. He &aseven f2rnishe+ a -opy of olyfoams Mga Alituntunin at Kara$(atang Parusa &hi-h em*o+ie+ olyfoams r2les onatten+an-e, the manner of performin( the employees +2ties,ethi-al stan+ar+s, -leanliness, health, safety, pea-e an+

or+er. These r2les -arrie+ &ith them the -orrespon+in( penalties in-ase of violation.

Dhile it is tr2e that petitioners s2*mitte+ the A8+avit of olyfoamss2pervisor Fi-tor A*a+ia, -laimin( that the latter +i+ not e'er-ises2pervision over respon+ent *e-a2se the latter &as not olyfoams*2t Grama?es employee, sai+ A8+avit is ins28-ient to prove s2-h-laim. etitioners sho2l+ have presente+ the person &ho they -laimto have e'er-ise+ s2pervision over respon+ent an+ their alle(e+other employees assi(ne+ to olyfoam. t &as never esta*lishe+that Grama?e too5 entire -har(e, -ontrol an+ s2pervision of the&or5 an+ servi-e a(ree+ 2pon. An+ as aptly o*serve+ *y the CA, it

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is li5e&ise hi(hly 2n2s2al an+ s2spe-t as to the a*sen-e of aitt t t if i th f f i6 + i

The LE re-o(ni7e+ ane& this soli+ary lia*ility of the prin-ipall + th l * l t t h it i + t t



&ritten -ontra-t spe-ifyin( the performan-e of a spe-i6e+ servi-e,the nat2re an+ e'tent of the servi-e or &or5 to *e +one an+ theterm an+ +2ration of the relationship.

A 6n+in( that a -ontra-tor is a la*or)only -ontra-tor, as oppose+ topermissi*le ?o* -ontra-tin(, is e<2ivalent to +e-larin( that there isan employer)employee relationship *et&een the prin-ipal an+ theemployees of the s2ppose+ -ontra-tor, an+ the la*or)only-ontra-tor is -onsi+ere+ as a mere a(ent of the prin-ipal, the real

employer. n this -ase, olyfoam is the prin-ipal employer an+Grama?e is the la*or)only -ontra-tor. olyfoam an+ Grama?e are,therefore, soli+arily lia*le for the ri(htf2l -laims of respon+ent.

Fi(illa, et al., v. hilippine Colle(e of

Criminolo(y, G.R. No. "###@4, # :2ne "#3 The NLRC an+ the CA -orre-tly r2le+ that the releases, &aivers an+<2it-laims e'e-2te+ *y petitioners in favor of MMS re+o2n+e+ tothe *ene6t of CCr p2rs2ant to Arti-le "; of the Ne& Civil Co+e. The reason is that MMS is soli+arily lia*le &ith the respon+entsfor the vali+ -laims of petitioners p2rs2ant to Arti-le #@ of the

La*or Co+e.

As -orre-tly pointe+ o2t *y the respon+ents, the *asis of thesoli+ary lia*ility of the prin-ipal &ith those en(a(e+ in la*or)only-ontra-tin( is the last para(raph of Arti-le #B of the La*or Co+e,&hi-h in part provi+es /n s2-h -ases la*or)only -ontra-tin(, theperson or interme+iary shall *e -onsi+ere+ merely as an a(ent of the employer &ho shall *e responsi*le to the &or5ers in the samemanner an+ e'tent as if the latter &ere +ire-tly employe+ *y him./

Se-tion @ of epartment r+er No. )#" iss2e+ *y theepartment of La*or an+ Employment !LE$, &hi-h &as still ineIe-t at the time of the prom2l(ation of the s2*?e-t +e-ision an+

resol2tion, interprets Arti-le #B of the La*or Co+e in this &ise

Se-tion @. Soli+ary lia*ility. The prin-ipal shall *e +eeme+ as the+ire-t employer of the -ontra-t2al employees an+ therefore,soli+arily lia*le &ith the -ontra-tor or s2*-ontra-tor for &hatevermonetary -laims the -ontra-t2al employees may have a(ainst theformer in the -ase of violations as provi+e+ for in Se-tions !La*ornly -ontra-tin($, B !rohi*itions$, !Ri(hts of Contra-t2alEmployees$ an+ B !elistin($ of these R2les. n a++ition, theprin-ipal shall also *e soli+arily lia*le in -ase the -ontra-t *et&eenthe prin-ipal an+ -ontra-tor or s2*-ontra-tor is preterminate+ forreasons not attri*2ta*le to the fa2lt of the -ontra-tor ors2*-ontra-tor. KEmphases s2pplie+.

employer an+ the la*or)only -ontra-tor &hen it iss2e+ epartmentr+er No. )A, series of "#, &hi-h is the latest set of r2lesimplementin( Arti-les #B)#@ of the La*or Co+e. Se-tion ";thereof rea+s

Se-tion ";. EIe-ts of 6n+in( of la*or)only -ontra-tin( an+>orviolation of Se-tions ;, or @ of the R2les. A 6n+in( *y -ompetenta2thority of la*or)only -ontra-tin( shall ren+er the prin-ipal ?ointlyan+ severally lia*le &ith the -ontra-tor to the latterJs employees,

in the same manner an+ e'tent that the prin-ipal is lia*le toemployees +ire-tly hire+ *y him>her, as provi+e+ in Arti-le #B of the La*or Co+e, as amen+e+.

A 6n+in( of -ommission of any of the prohi*ite+ a-tivities inSe-tion ;, or violation of either Se-tions or @ hereof, shall ren+erthe prin-ipal the +ire-t employer of the employees of the-ontra-tor or s2*-ontra-tor, p2rs2ant to Arti-le #@ of the La*orCo+e, as amen+e+. !Emphasis s2pplie+.$

These le(islative r2les an+ re(2lations +esi(ne+ to implement aprimary le(islation have the for-e an+ eIe-t of la&. A r2le is*in+in( on the -o2rts so lon( as the pro-e+2re 6'e+ for itsprom2l(ation is follo&e+ an+ its s-ope is &ithin the stat2tory

a2thority (rante+ *y the le(islat2re.

:2rispr2+en-e is also replete &ith prono2n-ements that a ?o*)only-ontra-tor is soli+arily lia*le &ith the employer. ne of these is the-ase of hilippine an5 of Comm2ni-ations v. NLRC &here thisCo2rt e'plaine+ the le(al eIe-ts of a ?o*)only -ontra-tin(, to &it

=n+er the (eneral r2le set o2t in the 6rst an+ se-on+ para(raphsof Arti-le #B, an employer &ho enters into a -ontra-t &ith a-ontra-tor for the performan-e of &or5 for the employer, +oes notthere*y -reate an employer)employees relationship *et&eenhimself an+ the employees of the -ontra-tor. Th2s, the employeesof the -ontra-tor remain the -ontra-tor1s employees an+ his alone.Nonetheless &hen a -ontra-tor fails to pay the &a(es of hisemployees in a--or+an-e &ith the La*or Co+e, the employer &ho-ontra-te+ o2t the ?o* to the -ontra-tor *e-omes ?ointly an+severally lia*le &ith his -ontra-tor to the employees of the latter/to the e'tent of the &or5 performe+ 2n+er the -ontra-t/ as s2-hemployer &ere the employer of the -ontra-tor1s employees. Thela& itself, in other &or+s, esta*lishes an employer)employeerelationship *et&een the employer an+ the ?o* -ontra-tor1semployees for a limite+ p2rpose, i.e., in or+er to ens2re that thelatter (et pai+ the &a(es +2e to them.

A similar sit2ation o*tains &here there is /la*or only/ -ontra-tin(. The /la*or)only/ -ontra-tor)i.e /the person or interme+iary/ ) is-onsi+ere+ /merely as an a(ent of the employer./ The employer is

B@

ma+e *y the stat2te responsi*le to the employees of the /la*oronly/ -ontra-tor as if s2-h employees ha+ *een +ire-tly employe+

This Co2rt has -onstantly applie+ the Civil Co+e provisions onsoli+ary lia*ility spe-i6-ally Arti-les "; an+ """ to la*or -ases



only -ontra-tor as if s2-h employees ha+ *een +ire-tly employe+*y the employer. Th2s, &here /la*or)only/ -ontra-tin( e'ists in a(iven -ase, the stat2te itself implies or esta*lishes an employer)employee relationship *et&een the employer !the o&ner of thepro?e-t$ an+ the employees of the /la*or only/ -ontra-tor, this timefor a -omprehensive p2rpose /employer for p2rposes of this Co+e,to prevent any violation or -ir-2mvention of any provision of thisCo+e./ The la& in eIe-t hol+s *oth the employer an+ the /la*or)only/ -ontra-tor responsi*le to the latter1s employees for the more

eIe-tive safe(2ar+in( of the employees1 ri(hts 2n+er the La*orCo+e. KEmphasis s2pplie+.

The -ase of San Miguel Cor(oration v" MAERC Integrated ServicesInc" also re-o(ni7e+ this soli+ary lia*ility *et&een a la*or)only-ontra-tor an+ the employer. n the sai+ -ase, this Co2rt (ave the+istin-tions *et&een soli+ary lia*ility in le(itimate ?o* -ontra-tin(an+ in la*or)only -ontra-tin(, to &it

n le(itimate ?o* -ontra-tin(, the la& -reates an employer)employee relationship for a limite+ p2rpose, i.e., to ens2re that theemployees are pai+ their &a(es. The prin-ipal employer *e-omes ?ointly an+ severally lia*le &ith the ?o* -ontra-tor only for thepayment of the employees1 &a(es &henever the -ontra-tor fails to

pay the same. ther than that, the prin-ipal employer is notresponsi*le for any -laim ma+e *y the employees.

n the other han+, in la*or)only -ontra-tin(, the stat2te -reates anemployer)employee relationship for a -omprehensive p2rpose toprevent a -ir-2mvention of la*or la&s. The -ontra-tor is -onsi+ere+merely an a(ent of the prin-ipal employer an+ the latter isresponsi*le to the employees of the la*or)only -ontra-tor as if s2-hemployees ha+ *een +ire-tly employe+ *y the prin-ipal employer. The prin-ipal employer therefore *e-omes soli+arily lia*le &ith thela*or)only -ontra-tor for all the ri(htf2l -laims of theemployees. KEmphases s2pplie+0 Citations omitte+

Re-ently, this Co2rt reiterate+ this soli+ary lia*ility of la*or)only

-ontra-tor in the -ase of ?K Cor(oration v" NLRC &here it &as r2le+that the prin-ipal employer is soli+arily lia*le &ith the la*or)only-ontra-tor for the ri(htf2l -laims of the employees.

Consi+erin( that MMS, as the la*or)only -ontra-tor, is soli+arilylia*le &ith the respon+ents, as the prin-ipal employer, then theNLRC an+ the CA -orre-tly hel+ that the respon+entsJ soli+arylia*ility &as alrea+y e'p2n(e+ *y virt2e of the releases, &aiversan+ <2it-laims e'e-2te+ *y ea-h of the petitioners in favor of MMS p2rs2ant to Arti-le "; of the Civil Co+e &hi-h provi+esthat /payment ma+e *y one of the soli+ary +e*tors e'tin(2ishesthe o*li(ation./

soli+ary lia*ility, spe-i6-ally Arti-les "; an+ """, to la*or -ases.n Farorient Shippin( Co., n-. v. NLRC, this Co2rt hel+

The EA R2les hol+s her, as a -orporate o8-er, soli+arily lia*le&ith the lo-al li-ense+ mannin( a(en-y. Her lia*ility is insepara*lefrom those of Farorient an+ La(oa. f anyone of them is hel+ lia*lethen all of them &o2l+ *e lia*le for the same o*li(ation. Ea-h of the soli+ary +e*tors, insofar as the -re+itor>s is>are -on-erne+, isthe +e*tor of the entire amo2nt0 it is only &ith respe-t to his -o)+e*tors that he>she is lia*le to the e'tent of his>her share in theo*li(ation. S2-h *ein( the -ase, the Civil Co+e allo&s ea-h soli+ary+e*tor, in a-tions 6le+ *y the -re+itor>s, to avail himself of all+efenses &hi-h are +erive+ from the nat2re of the o*li(ation an+ of those &hi-h are personal to him, or pertainin( to his share K-itin(Se-tion """ of the Civil Co+e. He may also avail of those+efenses personally *elon(in( to his -o)+e*tors, *2t only to thee'tent of their share in the +e*t. Th2s, Farorient may set 2p all the+efenses pertainin( to Colarina an+ La(oa0 &hereas Colarina an+La(oa are lia*le only to the e'tent to &hi-h Farorient may *e fo2n+lia*le *y the -o2rt.

' ' ' '

f Farorient &ere to *e fo2n+ lia*le an+ ma+e to pay p2rs2antthereto, the entire o*li(ation &o2l+ alrea+y *e e'tin(2ishe+ K-itin(Arti-le "; of the Civil Co+e even if no attempt &as ma+e toenfor-e the ?2+(ment a(ainst Colarina. e-a2se there e'iste+ a-ommon -a2se of a-tion a(ainst the three soli+ary o*li(ors, as thea-ts an+ omissions imp2te+ a(ainst them are one an+ the same,an 2ltimate 6n+in( that Farorient &as not lia*le &o2l+, 2n+er these-ir-2mstan-es, lo(i-ally imply a similar e'oneration from lia*ilityfor Colarina an+ La(oa, &hether or not they interpose+ any+efense. KEmphases s2pplie+

n li(ht of these -on-l2sions, the Co2rt hol+s that the releases,&aivers an+ <2it-laims e'e-2te+ *y petitioners in favor of MMSre+o2n+e+ to the respon+ents1 *ene6t. The lia*ilities of the

respon+ents to petitioners are no& +eeme+ e'tin(2ishe+. TheCo2rt -annot allo& petitioners to reap the *ene6ts (iven to them *yMMS in e'-han(e for the releases, &aivers an+ <2it-laims an+,a(ain, -laim the same *ene6ts from CCr.

Dhile it is the +2ty of the -o2rts to prevent the e'ploitation of employees, it also *ehooves the -o2rts to prote-t the san-tity of -ontra-ts that +o not -ontravene the la&. The la& in prote-tin( theri(hts of the la*orer a2thori7es neither oppression nor self)+estr2-tion of the employer. Dhile the Constit2tion is -ommitte+ tothe poli-y of so-ial ?2sti-e an+ the prote-tion of the &or5in( -lass, itsho2l+ not *e s2ppose+ that every la*or +isp2te &ill *e

;#

a2tomati-ally +e-i+e+ in favor of la*or. Mana(ement also has itso&n ri(hts &hi-h as s2-h are entitle+ to respe-t an+ enfor-ement



o&n ri(hts, &hi-h, as s2-h, are entitle+ to respe-t an+ enfor-ementin the interest of simple fair play. 2t of its -on-ern for those &ithless privile(es in life, the Co2rt has in-line+ more often than notto&ar+ the &or5er an+ 2phel+ his -a2se in his -onQi-ts &ith theemployer. S2-h favoritism, ho&ever, has not *lin+e+ the Co2rt tothe r2le that ?2sti-e is in every -ase for the +eservin(, to *e+ispense+ in the li(ht of the esta*lishe+ fa-ts an+ appli-a*le la&an+ +o-trine.

;



still it is +ismissi*le. The Co2rt of Appeals -annot *e sai+ to havea-te+ &ith (rave a*2se of +is-retion amo2ntin( to la-5 or e'-ess of

+iIerentiates s2pervisory employees from mana(erial employees,to &it s2pervisory employees are those &ho in the interest of the



a-te+ &ith (rave a*2se of +is-retion amo2ntin( to la-5 or e'-ess of ?2ris+i-tion in ann2llin( the e-ision of the NLRC *e-a2se the6n+in(s of the Co2rt of Appeals that privaterespon+ent Tamon+on( &as in+ee+ a s2pervisory employee an+not a mana(erial employee, th2s, eli(i*le to ?oin or parti-ipate inthe 2nion a-tivities of private respon+ent C=SE, &ere s2pporte+ *yevi+en-e on re-or+. n the e-ision of the Co2rt of Appeals+ate+ " -to*er "##3, it ma+e referen-e to the

Memoran+2m +ate+ " Septem*er @@B, &hi-h re<2ire+ privaterespon+entTamon+on( to o*serve 6'e+ +aily &or5in( ho2rsfrom ## am to "## noon an+ from ## pm to ## pm. Thisimposition 2pon private respon+ent Tamon+on(, a--or+in( to theCo2rt of Appeals, is very 2n-hara-teristi- of a mana(erialemployee. To s2pport s2-h a -on-l2sion, the Co2rt of Appeals -ite+the -ase of Engineering E,ui($ent Inc" v" NLRC &here this Co2rthel+ that one of the essential -hara-teristi-s of an employeehol+in( a mana(erial ran5 is that he is not s2*?e-te+ to the ri(i+o*servan-e of re(2lar o8-e ho2rs or ma'im2m ho2rs of &or5.

Moreover, the Co2rt of Appeals also hel+ that 2pon -aref2le'amination of the +o-2ments s2*mitte+ *efore it, it fo2n+ o2t

that

Krivate respon+ent Tamon+on( may have possesse+ enormo2spo&ers an+ &as performin( important f2n-tions that (oes &ith theposition of ersonnel S2perinten+ent, nevertheless, there &as no-lear sho&in( that he is at li*erty, *y 2sin( his o&n +is-retion an++isposition, to lay +o&n an+ e'e-2te ma?or *2siness an+operational poli-ies for an+ in *ehalf of CAASC. KetitionerCAASC misera*ly faile+ to esta*lish that Kprivaterespon+ent Tamon+on( &as a2thori7e+ to a-t in the interest of the-ompany 2sin( his in+epen+ent ?2+(ment. ' ' '. Dithal, Kprivaterespon+ent Tamon+on( may have *een e'er-isin( -ertainimportant po&ers, s2-h as -ontrol an+ s2pervision over errin(

ran5)an+)6le employees, ho&ever, ' ' ' he +oes not possess thepo&er to hire, transfer, terminate, or +is-ipline errin( employees of the -ompany. At the most, the re-or+ merely sho&e+ that Kprivaterespon+ent Tamon+on( informe+ an+ &arne+ ran5)an+)6leemployees &ith respe-t to their violations of CAASCs r2les an+re(2lations. ' ' '. KAlso, the f2n-tions performe+ *y privaterespon+ent s2-h as iss2an-e of &arnin( to employees &ithirre(2lar atten+an-e an+ 2na2thori7e+ leave of a*sen-es an+re<2irin( employees to e'plain re(ar+in( -har(es of a*an+onmentof &or5, are normally performe+ *y a mere s2pervisor, an+ not *ya mana(er.

A--or+in(ly, Arti-le ""!m$ of the La*or Co+e, as amen+e+,

to &it s2pervisory employees are those &ho, in the interest of theemployer, eIe-tively re-ommen+ s2-h mana(erial a-tions, if thee'er-ise of s2-h a2thority is not merely ro2tinary or -leri-al innat2re *2t re<2ires the 2se of in+epen+ent ?2+(ment0 &hereas,mana(erial employees are those &ho are veste+ &ith po&ers orprero(atives to lay +o&n an+ e'e-2te mana(ement poli-ies an+>orhire, transfer, s2spen+, lay oI, re-all, +is-har(e, assi(n or +is-iplineemployees. Th2s, from the fore(oin( provision of the La*or Co+e, it

-an *e -learly inferre+ that private respon+ent Tamon+on( &as ?2sta s2pervisory employee. rivate respon+ent Tamon+on( +i+ notperform any of the f2n-tions of a mana(erial employee as state+ inthe +e6nition (iven to it *y the Co+e. Hen-e, the La*orCo+e provisions re(ar+in( +is<2ali6-ation of a mana(erialemployee from ?oinin(, assistin( or formin( any la*or or(ani7ation+oes not apply to herein private respon+ent Tamon+on(. ein( as2pervisory employee of CAASC, he -annot *e prohi*ite+ from ?oinin( or parti-ipatin( in the 2nion a-tivities of private respon+entC=SE, an+ in ma5in( s2-h a -on-l2sion, the Co2rt of Appeals +i+not a-t &himsi-ally, -apri-io2sly or in a +espoti- manner, rather, it&as (2i+e+ *y the evi+en-e s2*mitte+ *efore it. Th2s, (iven the

fore(oin( 6n+in(s of the Co2rt of Appeals that private respon+entis a s2pervisory employee, it is in+ee+ an 2nfair la*or pra-ti-e onthe part of petitioner CAASC to +ismiss him on a--o2nt of his2nion a-tivities, there*y -2rtailin( his -onstit2tionally (2arantee+ri(ht to self)or(ani7ation.

Dith re(ar+ to the alle(ation that privaterespon+ent Tamon+on( &as not only a mana(erial employee *2talso a -on6+ential employee, the same -annot *e vali+ly raise+ inthis etition for Certiorari. t is settle+ that an iss2e &hi-h &as notraise+ in the trial -o2rt -annot *e raise+ for the 6rst time onappeal. This prin-iple applies to a spe-ial -ivil a-tionfor certiorari 2n+er R2le B. n a++ition, petitioners faile+ to

a++2-e+ evi+en-e &hi-h &ill prove that, in+ee+, private respon+ent&as also a -on6+ential employee.

". Con6+ential Employees

epsi Cola ro+2-ts v. Se-retary of La*or, 3"

SCRA #4As re(ar+s the iss2e of &hether or not -on6+ential employees -an ?oin the la*or 2nion of the ran5 an+ 6le, &hat &as hel+ in the -aseof National Asso-iation of Tra+e =nions !NAT=$ ) Rep2*li- lantersan5 S2pervisors Chapter vs. Hon. R. . Torres, et. al., G.R. No.

;

@34B, e-em*er "@, @@4, applies to this -ase. Citin( 2lletin2*lishin( Corporation vs. San-he7, 44 SCRA B",B3, Gol+en

the +is<2ali6-ation of -on6+ential employees &ere &ritten in theprovision. f -on6+ential employees -o2l+ 2nioni7e in or+er to



2*lishin( Corporation vs. San-he7, 44 SCRA B",B3, Gol+en9arms vs. NLRC, ; SCRA 4;, an+ ier Arrastre an+ Steve+orin(Servi-es, n-. vs. Hon. Nieves Rol+an)Confessor et al., G.R. No.#4, 9e*r2ary 4, @@, the Co2rt r2le+

''' A -on6+ential employee is one entr2ste+ &ith -on6+en-e on+eli-ate matters, or &ith the -2sto+y, han+lin(, or -are an+prote-tion of the employers property. Dhile Art. "4 of the La*orCo+e sin(les o2t mana(erial employee as ineli(i*le to ?oin, assist

or form any la*or or(ani7ation, 2n+er the +o-trine of ne-essaryimpli-ation, -on6+ential employees are similarly +is<2ali6e+. This+o-trine states that &hat is implie+ in a stat2te is as m2-h a partthereof as that &hi-h is e'presse+, as el2-i+ate+ in several -ase0the latest of &hi-h is Ch2a v. Civil Servi-e Commission &here &esai+

No stat2te -an *e ena-te+ that -an provi+e all the +etailsinvolve+ in its appli-ation. There is al&ays an omission thatmay not meet a parti-2lar sit2ation. Dhat is tho2(ht, atthe time of the ena-tment, to *e an all em*ra-in(le(islation may*e ina+e<2ate to provi+e for the 2nfol+in(events of the f2t2re. So)-alle+ (aps in the la& +evelop asthe la& is enfor-e+. ne of the r2les of stat2tory

-onstr2-tion 2se+ to 6ll in the (ap is the +o-trine of ne-essary impli-ation ''', Every stat2te is 2n+erstoo+, *yimpli-ation, to -ontain all s2-h provisions as may *ene-essary to eIe-t2ate its o*?e-t an+ p2rpose, or to ma5eeIe-tive ri(hts, po&ers, privile(es or ?2ris+i-tion &hi-h it(rants, in-l2+in( all s2-h -ollateral an+ s2*si+iary-onse<2en-es as may *e fairly an+ lo(i-ally inferre+ fromits terms. E' ne-essitate le(is '''

n applyin( the +o-trine of ne-essary impli-ation, &e too5 into-onsi+eration the rationale *ehin+ the +is<2ali6-ation of mana(erial employees e'presse+ in 2lletin 2*lishin( Corporationv. San-he7, th2s ''' if these mana(erial employees &o2l+ *elon(

to or *e a8liate+ &ith a =nion, the latter mi(ht not *e ass2re+ of their loyalty to the =nion in vie& of evi+ent -onQi-t of interests. The=nion -an also *e-ome -ompany +ominate+ &ith the presen-e of mana(erial employees in =nion mem*ership. State+ +iIerently, inthe -olle-tive *ar(ainin( pro-ess, mana(erial employees ares2ppose+ to *e on the si+e of the employer, to a-t as itsrepresentatives, an+ to see to it that its interest are &ellprote-te+. The employer is not ass2re+ of s2-h prote-tion if theseemployees themselves are 2nion mem*ers. Colle-tive *ar(ainin( ins2-h a sit2ation -an *e-ome one)si+e+. t is the same reason thatimpelle+ this Co2rt to -onsi+er the position of -on6+entialemployees as in-l2+e+ in the +is<2ali6-ation fo2n+ in Art. "4 as if

provision. f -on6+ential employees -o2l+ 2nioni7e in or+er to*ar(ain for a+vanta(es for themselves, then they -o2l+ *e(overne+ *y their o&n motives rather than the interest of theemployers. Moreover, 2nioni7ation of -on6+ential employees forthe p2rpose of -olle-tive *ar(ainin( &o2l+ mean the e'tension of the la& to persons or in+ivi+2als &ho are s2ppose+ to a-t in theinterest of the employers. t is not farfet-he+ that in the -o2rse of -olle-tive *ar(ainin(, they mi(ht ?eopar+i7e that interest &hi-h

they are +2ty *o2n+ to prote-t. Alon( the same line of reasonin(&e hel+ in Gol+en 9arms, n-. vs. 9errer)Calle?a reiterate+ in hilipsn+2strial evelopment, n-., NLRC, that -on6+ential employeess2-h as a--o2ntin( personnel, ra+io an+ tele(raph operators &ho,havin( a--ess to -on6+ential information, may *e-ome the so2r-eof 2n+2e a+vanta(e. Sai+ employee!s$ may a-t as spy or spies of either party to a -olle-tive *ar(ainin( a(reement.

The Co2rt 6n+s merit in the s2*mission of the SG that Ro2teMana(ers, Chief Che-5ers an+ Dareho2se perations Mana(ers ares2pervisors &hile Cre+it U Colle-tion Mana(ers an+ A--o2ntin(Mana(ers are hi(hly -on6+ential employees. esi(nation sho2l+ *ere-on-ile+ &ith the a-t2al ?o* +es-ription of s2*?e-t employees. A

-aref2l s-r2tiny of their ?o* +es-ription in+i-ates that they +ont lay+o&n -ompany poli-ies. Theirs is not a 6nal +etermination of the-ompany poli-ies sin-e they have to report to their respe-tives2perior. The mere fa-t that an employee is +esi(nate+ mana(er+oes not ne-essarily ma5e him one. ther&ise, there &o2l+ *e ana*s2r+ sit2ation &here one -an *e (iven the title ?2st to *e+eprive+ of the ri(ht to *e a mem*er of a 2nion. n the -aseof National Steel Cor(oration v" Lagues$a, G. R. No. #3;43, :an2ary "@,@@B, it &as stresse+ that

Dhat is essential is the nat2re of the employees f2n-tion an+ notthe nomen-lat2re or title (iven to the ?o* &hi-h +etermines&hether the employee has ran5 an+ 6le or mana(erial stat2s, or&hether he is a s2pervisory employee.

San Mi(2el Corp. S2pervisors an+ E'empt =nion

v. La(2esma, A2(2st , @@; There is no <2estion that the sai+ employees, s2pervisors an+ thee'empt employees, are not veste+ &ith the po&ers an+prero(atives to lay +o&n an+ e'e-2te mana(ement poli-ies an+>orto hire, transfer, s2spen+, layoI, re-all, +is-har(e or +ismissemployees. They are, therefore, not <2ali6e+ to *e -lassi6e+ asmana(erial employees &ho, 2n+er Arti-le "4 of the La*or Co+e,

;B

are not eli(i*le to ?oin, assist or form any la*or or(ani7ation. n thevery same provision, they are not allo&e+ mem*ership in a la*or

+eterminin( the -on6+entiality of -ertain employees, a 5ey<2estions fre<2ently -onsi+ere+ is the employees ne-essary a--ess



y p , y por(ani7ation of the ran5)an+)6le employees but may ?oin, assist orform separate la*or or(ani7ations of their o&n. The only <2estionthat nee+ *e a++resse+ is &hether these employees are properly-lassi6e+ as -on6+ential employees or not.

Con6+ential employees are those &ho !$ assist or a-t in a-on6+ential -apa-ity, !"$ to persons &ho form2late, +etermine, an+eIe-t2ate mana(ement poli-ies in the 6el+ of la*or relations. The

t&o -riteria are -2m2lative, an+ *oth m2st *e met if an employee isto *e -onsi+ere+ a -on6+ential employee that is, the -on6+entialrelationship m2st e'ist *et&een the employees an+ his s2pervisor,an+ the s2pervisor m2st han+le the pres-ri*e+ responsi*ilitiesrelatin( to la*or relations.

The e'-l2sion from *ar(ainin( 2nits of employees &ho, in thenormal -o2rse of their +2ties, *e-ome a&are of mana(ementpoli-ies relatin( to la*or relations is a prin-ipal o*?e-tive so2(ht to*e a--omplishe+ *y the -on6+ential employee r2le. The broadrationale behind this rule is that e$(lo.ees should not be (laced ina (osition involving a (otential conFict o' interests" Mana(ement

sho2l+ not *e re<2ire+ to han+le la*or relations matters thro2(hemployees &ho are represente+ *y the 2nion &ith the -ompany isre<2ire+ to +eal an+ &ho in the normal performan-e of their +2tiesmay o*tain a+van-e information of the -ompanys position &ithre(ar+ to -ontra-t ne(otiations, the +isposition of (rievan-es, orother la*or relations matters.

There have *een ample pre-e+ents in this re(ar+, th2s in 2lletin2*lishin( Company v . Hon. A2(2sto San-he7, the Co2rt hel+ that if these mana(erial employees &o2l+ *elon( to or *e a8liate+ &ith a=nion, the latter mi(ht not *e ass2re+ of their loyalty to the =nionin vie& of evi+ent -onQi-t of interest. The =nion -an also *e-ome-ompany)+ominate+ &ith the presen-e of mana(erial employees in

=nion mem*ership. The same rationale &as applie+ to -on6+entialemployees in Gol+en 9arms, n-. v . 9errer)Calle?a an+ in the morere-ent -ase of hilips n+2strial evelopment, n-. v . NLRC &hi-hhel+ that -on6+ential employees, *y the very nat2re of theirf2n-tions, assist an+ a-t in a -on6+ential -apa-ity to, or havea--ess to -on6+ential matters of, persons &ho e'er-ise mana(erialf2n-tions in the 6el+ of la*or relations. Therefore, the rationale*ehin+ the ineli(i*ility of mana(erial employees to form, assist or ?oin a la*or 2nion &as hel+ e<2ally appli-a*le to them.

An important element of the -on6+ential employee r2le is theemployees nee+ to 2se la*or relations information. Th2s, in

< < y p y yto -on6+ential la*or relations information.

t is the -ontention of respon+ent -orporation that S2pervisoryemployees 3 an+ 4 an+ the e'empt employees -ome &ithin themeanin( of the term -on6+ential employees primarily *e-a2se theyans&ere+ in the a8rmative &hen as5e+ o yo2 han+le -on6+ential+ata or +o-2mentsW in the osition 2estionnaires s2*mitte+ *y the=nion. n the same <2estionnaire, ho&ever, it &as also state+ that

the -on6+ential information han+le+ *y <2estione+ employeesrelate to pro+2-t form2lation, pro+2-t stan+ar+s an+ pro+2-tspe-i6-ation &hi-h *y no means relate to la*or relations.

Grantin( arguendo that an employee has a--ess to -on6+entialla*or relations information *2t s2-h is merely in-i+ental to his+2ties an+ 5no&le+(e thereof is not ne-essary in the performan-eof s2-h +2ties, sai+ a--ess +oes not ren+er the employee a-on6+ential employee. f a--ess to -on6+ential la*or relationsinformation is to *e a fa-tor in the +etermination of an employees-on6+ential stat2s, s2-h information m2st relate to the employersla*or relations poli-ies. Th2s, an employee of a la*or 2nion, or of a

mana(ement asso-iation, m2st have a--ess to -on6+ential la*orinformation &ith respe-t to his employer, the 2nion, or theasso-iation, to *e re(ar+e+ a -on6+ential employee, an+5no&le+(e of la*or relations information pertainin( to the-ompanies &ith &hi-h the 2nion +eals, or &hi-h the asso-iationrepresents, &ill not -la2se an employee to *e e'-l2+e+ from the*ar(ainin( 2nit representin( employees of the 2nion orasso-iation. A--ess to information &hi-h is re(ar+e+ *y theemployer to *e -on6+ential from the *2siness stan+point, s2-h as6nan-ial information or te-hni-al tra+e se-rets, &ill not ren+er anemployee a -on6+ential employee.

Herein liste+ are the f2n-tions of s2pervisors 3 an+ hi(her

. To 2n+erta5e +e-isions to +is-ontin2e>temporarily stop shiftoperations &hen sit2ations re<2ire.

". To eIe-tively oversee the <2ality -ontrol f2n-tion at thepro-essin( lines in the stora(e of -hi-5en an+ other pro+2-ts.

3. To a+minister e8-ient system of eval2ation of pro+2-ts in theo2tlets.

4. To *e +ire-tly responsi*le for the re-all, hol+in( an+ re?e-tion of +ire-t man2fa-t2rin( materials.

. To re-ommen+ an+ initiate a-tions in the maintenan-e of sanitation an+ hy(iene thro2(ho2t the plant.

;;

t is evi+ent that &hatever -on6+ential +ata the <2estione+employees may han+le &ill have to relate to their f2n-tions. 9rom

entren-he+ in ?2rispr2+en-e. Dhile Arti-le "4 of the La*or Co+elimits the ineli(i*ility to ?oin, form an+ assist any la*or or(ani7ation



p y ythe fore(oin( f2n-tions, it -an *e (leane+ that the -on6+entialinformation sai+ employees have a--ess to -on-ern the employersinternal *2siness operations. As hel+ in Destin(ho2se Ele-tri-Corporation v. National La*or Relations oar+, an employee maynot *e e'-l2+e+ from appropriate *ar(ainin( 2nit merely *e-a2sehe has a--ess to -on6+ential information -on-ernin( employersinternal *2siness operations an+ &hi-h is not relate+ to the 6el+ of

la*or relations.t m2st *e *orne in min+ that Se-tion 3 of Arti-le V of the @;Constit2tion man+ates the State to (2arantee to all &or5ers theri(ht to self)or(ani7ation. Hen-e, -on6+ential employees &ho may*e e'-l2+e+ from *ar(ainin( 2nit m2st *e stri-tly +e6ne+ so as notto nee+lessly +eprive many employees of their ri(ht *ar(ain-olle-tively thro2(h representatives of their -hoosin(.

n the -ase at *ar, s2pervisors 3 an+ a*ove may not *e -onsi+ere+-on6+ential employees merely *e-a2se they han+le -on6+ential+ata as s2-h m2st 6rst *e stri-tly -lassi6e+ as pertainin( to la*orrelations for them to fall 2n+er sai+ restri-tions. The information

they han+le are properly -lassi6a*le as te-hni-al an+ internal*2siness operations +ata &hi-h, to o2r min+, has no relevan-e tone(otiations an+ settlement of (rievan-es &herein the interests of a 2nion an+ the mana(ement are invaria*ly a+versarial. Sin-e theemployees are not -lassi6a*le 2n+er the -on6+ential type, thisCo2rt r2les that they may appropriately form a *ar(ainin( 2nit forp2rposes of -olle-tive *ar(ainin(. 92rthermore, even ass2min( thatthey are -on6+ential employees, ?2rispr2+en-e has esta*lishe+ thatthere is no le(al prohi*ition a(ainst -on6+ential employees &ho arenot performin( mana(erial f2n-tions to form an+ ?oin a 2nion.

Stan+ar+ Chartere+ an5 Employees =nion

!SCE=)N=E$ v. Stan+ar+ Chartere+ an5, April"", "##Dhether or not the employees so2(ht to *e e'-l2+e+ from theappropriate *ar(ainin( 2nit are -on6+ential employees is a<2estion of fa-t, &hi-h is not a proper iss2e in a petition for revie&2n+er R2le 4 of the R2les of Co2rt. This hol+s more tr2e in thepresent -ase in &hi-h petitioner faile+ to -ontrovert &ith evi+en-ethe 6n+in(s of the Se-retary an+ the CA.

The +is<2ali6-ation of mana(erial an+ -on6+ential employees from ?oinin( a *ar(ainin( 2nit for ran5 an+ 6le employees is alrea+y &ell)

( y ? , y (to mana(erial employees, ?2rispr2+en-e has e'ten+e+ thisprohi*ition to -on6+ential employees or those &ho *y reason of their positions or nat2re of &or5 are re<2ire+ to assist or a-t in a6+2-iary manner to mana(erial employees an+ hen-e, are li5e&iseprivy to sensitive an+ hi(hly -on6+ential re-or+s.

n this -ase, the <2estion that nee+s to *e ans&ere+ is &hether thean51s Chief Cashiers an+ Assistant Cashiers, personnel of the Tele'

epartment an+ HR staI are -on6+ential employees, s2-h thatthey sho2l+ *e e'-l2+e+.

As re(ar+s the <2ali6-ation of ban' cashiers as -on6+entialemployees, National Association o' Trade !nions NAT! Re(ublicPlanters #an- Su(ervisors Cha(ter v" Torres +e-lare+ that they are-on6+ential employees havin( -ontrol, -2sto+y an+>or a--ess to-on6+ential matters, e"g., the *ran-h1s -ash position, statements of 6nan-ial -on+ition, va2lt -om*ination, -ash -o+es for tele(raphi-transfers, +eman+ +rafts an+ other ne(otia*le instr2ments,p2rs2ant to Se-. BB.4 of the Central an5 Man2al re(ar+in( ?oint-2sto+y, an+ therefore, +is<2ali6e+ from ?oinin( or assistin( a

2nion0 or ?oinin(, assistin( or formin( any other la*or or(ani7ation.3olden *ar$s Inc" v" *errer)Calle0a mean&hile state+ that-on6+ential employees s2-h as a--o2ntin( personnel, radioand telegraph operators &ho, havin( a--ess to -on6+entialinformation, may *e-ome the so2r-e of 2n+2e a+vanta(e. Sai+employee!s$ may a-t as spy or spies of either party to a -olle-tive*ar(ainin( a(reement.

9inally, in Phili(s Industrial Develo($ent Inc" v" National Labor Relations Co$$ission, the Co2rt +esi(nate+ personnel sta9 , in&hi-h h2man reso2r-es staI may *e <2ali6e+, as -on6+entialemployees *e-a2se *y the very nat2re of their f2n-tions, they

assist an+ a-t in a -on6+ential -apa-ity to, or have a--ess to-on6+ential matters of, persons &ho e'er-ise mana(erial f2n-tionsin the 6el+ of la*or relations.

etitioner insists that the fore(oin( employees are not -on6+entialemployees0 ho&ever, it faile+ to *2ttress its -laim. Asi+e from its(enerali7e+ ar(2ments, an+ +espite the Se-retary1s 6n+in( thatthere &as no evi+en-e to s2pport it, petitioner still faile+ tos2*stantiate its -laim. etitioner +i+ not even *other to state thenat2re of the +2ties an+ f2n-tions of these employees, +eprivin(the Co2rt of any *asis on &hi-h it may *e -on-l2+e+ that they arein+ee+ -on6+ential employees. As aptly state+ *y the CA

;

Dhile De a(ree that petitioner1s propose+ revision is in a--or+an-e&ith the la&, this +oes not ne-essarily mean that the list of

l i + i h @@ "### CA i l A

or(ani7ation, RA B; &as s2*se<2ently passe+ &hi-h reor(ani7e+the employee)ran5s *y in-l2+in( a thir+ (ro2p, or the s2pervisory



e'-l2sions en2merate+ in the @@)"### CA is -ontrary to la&. Asfo2n+ *y p2*li- respon+ent, petitioner failed to show that theemployees sought to be removed from the list of e%clusionsare actually ran' and 3le employees who are notmanagerial or con3dential in status and should!accordingly! be included in the appropriate bargaining unit$

Absent any proof that "hief "ashiers and Assistant"ashiers! personnel of the *ele% department and one 7>8 @R

6ta9 have mutuality of interest with the other ran' and 3leemployees! then they are rightfully e%cluded from theappropriate bargaining unit. ' ' ' !Emphasis s2pplie+$

3. Se-2rity G2ar+s

Manila Ele-tri- Co. v. Se-retary of La*or U

Employment, @; SCRA ";n its petition, MERALC has relente+ an+ re-o(ni7e+ respon+entsSTEAM)CD9 an+ 9LAMES1 +esire+ representation of su(ervisor. e$(lo.ees from Gra+es F 2p. Ho&ever, it *elieves that all that theSe-retary of La*or has to +o is to esta*lish a +emar-ation line

*et&een s2pervisory an+ mana(erial ran5, an+ not to -lassifyo2tri(ht the (ro2p of employees represente+ *y STEAM)CD9 an+9LAMES as ran5 an+ 6le employees.

n <2estionin( the Se-retary of La*or1s +ire-tive allo&in( se-2rity(2ar+s !Treas2ry>atrol Servi-es Se-tion$ to *e represente+ *yrespon+ents, MERALC -onten+s that this -ontravenes theprovisions of the re-ently passe+ RA B; an+ its implementin(r2les !spe-i6-ally par. ", Se-. , R2le , oo5 F$ &hi-h +is<2ali6ess2pervisory employees an+ se-2rity (2ar+s from mem*ership in ala*or or(ani7ation of the ran5 an+ 6le !p. , Rollo$.

The Se-retary of La*or1s Resol2tion &as o*vio2sly premise+ on theprovisions of Art. "", then par. !5$, of the @ La*or Co+e+e6nin( /mana(erial/ an+ /ran5 an+ 6le/ employees, the la& thenin for-e &hen the -omplaint &as 6le+. At the time, only t&o (ro2psof employees &ere re-o(ni7e+, the mana(erial an+ ran5 an+ 6le. This e'plains the a*sen-e of evi+en-e on ?o* +es-riptions on &ho&o2l+ *e -lassi6e+ mana(erial employees. t is perhaps also forthis reason &hy the Se-retary of La*or limite+ his -lassi6-ation of the Meral-o employees *elon(in( to ay Gra+es F an+ 2p, to onlyt&o (ro2ps, the mana(erial an+ ran5 an+ 6le.

Ho&ever, p2rs2ant to the epartment of La*or1s (oal of stren(hthenin( the -onstit2tional ri(ht of &or5ers to self)

p y y ( ( p p yemployees, an+ layin( +o&n the +istin-tion *et&een s2pervisoryemployees an+ those of mana(erial ran5s in Art. "", ren2m*ere+par. Km, +epen+in( on &hether the employee -on-erne+ has thepo&er to lay +o&n an+ e'e-2te mana(ement poli-ies, in the -aseof mana(erial employees, or merely to re-ommen+ them, in -ase of s2pervisory employees.

n this petition, MERALC has a+mitte+ that the employees

*elon(in( to ay Gra+es F an+ 2p are s2pervisory !p. #, Rollo$. The re-or+s also sho& that STEAM)CD9 ha+ /renounced itsrepresentation of the employees in atrol ivision, Treas2rySe-2rity Servi-e Se-tion and ran- and &le e$(lo.ees in Pa. 3radesI)VI/ !p. B, Rollo$0 &hile 9LAMES, on the other han+, ha+ li$ited itsre(resentation to employees *elon(in( to ay Gra+es F)VF,generall. acce(ted as su(ervisor. e$(lo.ees, as follo&s

t m2st *e emphasi7e+ that private respon+ent 9irst LineAsso-iation of Meral-o S2pervisory Employees see5s to representonly the S2pervisory Employees &ith ay Gra+es F to VF.

S2pervisory Employees &ith ay Gra+es F to VF are not

mana(erial employees. n fa-t the petition itself of petitionerManila Ele-tri- Company on pa(e @, para(raph 3 of the petitionstate+ as follo&s, to &it

There &as no nee+ for petitioner to prove that theseemployees are not ran5)an+)6le. As a+verte+ to a*ove, theprivate respon+ents a+mit that these are not the ran5)an+)6le *2t the s2pervisory employees, &hom they see5 torepresent. Dhat nee+s to *e esta*lishe+ is the ran5 &heres2pervisory en+s an+ mana(erial *e(ins.

an+ 9irst Line Asso-iation of Meral-o S2pervisory Employees hereinstates that ay Gra+es F to VF are not mana(erial employees. nfa-t, altho2(h employees &ith ay Gra+e VF -arry the Ran5 of

epartment Mana(ers, these employees only en?oys !sic$ the Ran5Mana(er *2t their re-ommen+atory po&ers are s2*?e-t toeval2ation, revie& an+ 6nal a-tion *y the +epartment hea+s an+other hi(her e'e-2tives of the -ompany. !9LAMES1 Memoran+2m,p. 3#, Rollo$

ase+ on the fore(oin(, it is -lear that the employees from ayGra+es F an+ 2p have *een re-o(ni7e+ an+ a--epte+ ass2pervisory. n the other han+, those employees &ho have *eena2tomati-ally +is<2ali6e+ have *een +ire-te+ *y the Se-retary of La*or to remain in the e'istin( la*or or(ani7ation for the ran5 an+6le, !the -on+ition in the CA +eeme+ as not havin( *een &ritteninto the -ontra-t, as 2n+2ly restri-tive of an employee1s e'er-ise of

;@

the ri(ht to self)or(ani7ation$. De shall +is-2ss the ri(hts of thee'-l2+e+ employees !or those -overe+ *y Se-. ", Art. , MEDA)CA

he -2stomarily an+ re(2larly e'er-ises +is-retionarypo&ers . . . !B C:S, pp. BBB)BB. !p. ""B, Rollo$



later.

Anent the instant petition therefore, STEAM)CD9, an+ 9LAMES&o2l+ therefore represent s2pervisory employees only. n thisre(ar+, the a2thority (iven *y the Se-retary of La*or for theesta*lishment of t&o la*or or(ani7ations for the ran5 an+ 6le &illhave to *e +isre(ar+e+ sin-e De here*y 2phol+ -erti6-ationele-tions only for s2pervisory employees from ay Gra+e F an+

2p, &ith STEAM)CD9 an+ 9LAMES as -hoi-es.

As to the alle(e+ fail2re of the Se-retary of La*or to esta*lish a+emar-ation line for p2rposes of se(re(atin( the s2pervisory fromthe mana(erial employees, the re<2ire+ parameter is really notne-essary sin-e the la& itself, Art. "")m, !as amen+e+ *y Se-. 4 of RA B;$ has alrea+y lai+ +o&n the -orrespon+in( (2i+elines

Art. "". e6nitions. . . .

!m$ /Mana(erial employee/ is one &ho is veste+ &ith po&ers orprero(atives to lay +o&n an+ e'e-2te mana(ement poli-ies an+>orto hire, transfer, s2spen+, lay)oI, re-all, +is-har(e, assi(n or+is-ipline employees. S2pervisory employees are those &ho, in the

interest of the employer, eIe-tively re-ommen+ s2-h mana(eriala-tions if the e'er-ise of s2-h a2thority is not merely ro2tinary or-leri-al in nat2re *2t re<2ires the 2se of in+epen+ent ?2+(ment. Allemployees not fallin( &ithin any of the a*ove +e6nitions are-onsi+ere+ ran5)an+)6le employees for p2rposes of to oo5.

n his resol2tion, the Se-retary of La*or f2rther ela*orate+

. . . Th2s, the +eterminative fa-tor in -lassifyin( an employee asmana(erial, s2pervisory or ran5)an+)6le is the nat2re of the &or5of the employee -on-erne+.

n National 7ater%or-s and Se%erage Authorit. vs" National7ater%or-s and Se%erage Authorit. Consolidated !nions ! SCRA

;BB$ the S2preme Co2rt ha+ the o--asion to -ome o2t &ith anenli(htenin( +issertation of the nat2re of the &or5 of a mana(erialemployees as follo&s

. . . that the employee1s primary +2ty -onsists of themana(ement of the esta*lishment or of a -2stomarilyre-o(ni7e+ +epartment or s2*+ivision thereof, that he-2stomarily an+ re(2larly +ire-ts the &or5 of otheremployees therein, that he has the a2thority to hire or+is-har(e other employees or that his s2((estions an+re-ommen+ations as to the hirin( an+ +is-har(in( an+ orto the a+van-ement an+ promotion or any other -han(e of stat2s of other employees are (iven parti-2lar &ei(ht, that

De shall no& +is-2ss the ri(hts of the se-2rity (2ar+s to self)or(ani7e. MERALC has <2estione+ the le(ality of allo&in( them to ?oin either the ran5 an+ 6le or the s2pervisory 2nion, -laimin( thatthis is a violation of par. ", Se-. , R2le , oo5 F of themplementin( R2les of RA B;, &hi-h states as follo&s

Se- . Dho may ?oin 2nions. . . .

' ' ' ' ' ' ' ' '

S2pervisory employees and securit. guards shall not *eeli(i*le for mem*ership in a la*or or(ani7ation of the ran5)an+)6le employees *2t may ?oin, assist or form separatela*or or(ani7ations of their o&n0 . . .

' ' ' ' ' ' ' ' '

!emphasis o2rs$

ara(raph ", Se-. , R2le , oo5 F, is similar to Se-. " !-$, R2le F,also of oo5 F of the implementin( r2les of RA B;

R2le F.RERESENTATN CASES AN

NTERNAL)=NN CN9LCTSSe-. . . . .

Se-. ". 7ho $a. &le.Any le(itimate la*or or(ani7ation orthe employer, &hen re<2este+ to *ar(ain -olle-tively, may6le the petition.

The petition, &hen 6le+ *y a le(itimate la*or)or(ani7ationshall -ontain, amon( others

!a$ . . .

!*$ . . .

!-$ +es-ription of the *ar(ainin( 2nit &hi-h shall *e the

employer 2nit 2nless -ir-2mstan-es other&ise re<2ire0an+ (rovided 'urther , that the appropriate *ar(ainin( 2nitof the ran5)an+)6le employees shall not in-l2+es2pervisory employees andGor securit. guards0

' ' ' ' ' ' ' ' '

!emphasis o2rs$

oth r2les, *arrin( se-2rity (2ar+s from ?oinin( a ran5 an+ 6leor(ani7ation, appear to have *een -arrie+ over from the ol+ r2les&hi-h implemente+ then Art" >H of the La*or Co+e, an+ &hi-hprovi+e+ th2s

#

Art. "4. Ineligibilit. o' securit. (ersonnel to 0oin an. labor organi+ation.Se-2rity (2ar+s an+ other personnel employe+ forthe prote-tion an+ se-2rity of the person properties an+ premises

B;, they may no& freely ?oin a la*or or(ani7ation of the ran5 an+6le or that of the s2pervisory 2nion, +epen+in( on their ran5. y



the prote-tion an+ se-2rity of the person, properties an+ premisesof the employer shall not *e eli(i*le for mem*ership in any la*oror(ani7ation.

n e-em*er "4, @B, res. Cora7on C. A<2ino iss2e+ E.. No. &hi-h eli$inated the a*ove)-ite+ provision on the+is<2ali6-ation of se-2rity (2ar+s. Dhat &as retaine+ &as the+is<2ali6-ation of mana(erial employees, ren2m*ere+ as Art. "4!previo2sly Art. "4B$, as follo&s

Art. "4. Ineligibilit. o' $anagerial e$(lo.ees to 0oint an. labor organi+ation.Mana(erial employees are not eli(i*le to ?oin, assistor form any la*or or(ani7ation.

Dith the elimination, se-2rity (2ar+s &ere th2s free to ?oin a ran5an+ 6le or(ani7ation.

n Mar-h ", @@, the present Con(ress passe+ RA B;. Se-tion thereof amen+e+ Art. "4, to rea+ as follo&s

Art. "4. neli(i*ility of $anagerial e$(lo.ees to ?oin any la*oror(ani7ation0 ri(ht of s2pervisory employees.Mana(erialemployees are not eli(i*le to ?oin, assist or form any la*or

or(ani7ation. Su(ervisor. e$(lo.ees shall not be eligible formem*ership in a la*or or(ani7ation of the ran5)an+)6le employees*2t may ?oin, assist, or form separate la*or or(ani7ations of theiro&n. !emphasis o2rs$

As &ill *e note+, the se-on+ senten-e of Art. "4 em*o+ies anamen+ment +is<2alifyin( su(ervisor. e$(lo.ees from mem*ershipin a la*or or(ani7ation of the ran5)an+)6le employees. t does not include securit. guards in the +is<2ali6-ation.

The implementin( r2les of RA B;, therefore, insofar as they+is<2alify se-2rity (2ar+s from ?oinin( a ran5 an+ 6le or(ani7ationare n2ll an+ voi+, for *ein( not (ermane to the o*?e-t an+ p2rposes

of E an+ RA B; 2pon &hi-h s2-h r2les p2rporte+ly +erivestat2tory moorin(s. n Shell Phili((ines Inc" vs" Central #an- , G.R.No. 33, :2ne ";, @, B" SCRA B", De state+

The r2le)ma5in( po&er m2st *e -on6ne+ to +etails for re(2latin(the mo+e or pro-ee+in( to -arry into eIe-t the la& as it has *eenena-te+. The po&er -annot *e e'ten+e+ to amen+in( or e'pan+in(the stat2tory re<2irements or to em*ra-e matters not -overe+ *ythe stat2te. R2les that s2*vert the stat2te -annot *e san-tione+.!citing =niversity of Sto. Tomas vs. oar+ of Ta' Appeals, @3 hil.3;B$.

Dhile therefore 2n+er the ol+ r2les, se-2rity (2ar+s &ere *arre+from ?oinin( a la*or or(ani7ation of the ran5 an+ 6le, 2n+er RA

a--ommo+atin( s2pervisory employees, the Se-retary of La*orm2st li5e&ise apply the provisions of RA B; to se-2rity (2ar+s *yfavora*ly allo&in( them free a--ess to a la*or or(ani7ation,&hether ran5 an+ 6le or s2pervisory, in re-o(nition of their-onstit2tional ri(ht to self)or(ani7ation.

De are a&are ho&ever of possi*le -onse<2en-es in theimplementation of the la& in allo&in( se-2rity personnel to ?oin

la*or 2nions &ithin the -ompany they serve. The la& is apt topro+2-e +ivi+e+ loyalties in the faithf2l performan-e of their +2ties.E-onomi- reasons &o2l+ present the employees -on-erne+ &ith thetemptation to s2*or+inate their +2ties to the alle(ian-e they o&ethe 2nion of &hi-h they are mem*ers, a&are as they are that it is2s2ally 2nion a-tion that o*tains for them in-rease+ pe-2niary*ene6ts.

Th2s, in the event of a stri5e +e-lare+ *y their 2nion, se-2ritypersonnel may ne(le-t or o2tri(htly a*an+on their +2ties, s2-h asprote-tion of property of their employer an+ the persons of itso8-ials an+ employees, the -ontrol of a--ess to the employer1s

premises, an+ the maintenan-e of or+er in the event of emer(en-ies an+ 2nto&ar+ in-i+ents.

4. Mem*ers of Cooperatives

en(2et Ele-tri- Cooperative v. 9errer)Calle?a,

# SCRA ;4# The iss2e of &hether or not employees of a -ooperative are<2ali6e+ to form or ?oin a la*or or(ani7ation for p2rposes of -olle-tive *ar(ainin( has alrea+y *een resolve+ an+ -lari6e+ in the-ase of Coo(erative Rural #an- o' Davao Cit. Inc" vs" *errer Calle0a et al" KG.R. No. ;;@, Septem*er "B,@ an+ reiterate+ in

the -ases of #atangas)Electric Coo(erative Labor !nion v" 9oung et al" KG.R. Nos. B"3B, ;## an+ ;4B# Novem*er @, @ an+ San 4ose Cit. Electric Service Coo(erative Inc" v" Ministr. o' Labor andE$(lo.$ent et al" KG.R. No. ;;"3, May 3, @@ &herein theCo2rt ha+ state+ that the ri(ht to -olle-tive *ar(ainin( is notavaila*le to an employee of a -ooperative &ho at the same time isa mem*er an+ -o)o&ner thereof. Dith respe-t, ho&ever, toemployees &ho are neither mem*ers nor -o)o&ners of the-ooperative they are entitle+ to e'er-ise the ri(hts to self)or(ani7ation, -olle-tive *ar(ainin( an+ ne(otiation as man+ate+ *ythe @; Constit2tion an+ appli-a*le stat2tes.

Respon+ent +ire-tor ar(2es that to +eny the mem*ers of petitioner-ooperative the ri(ht to form, assist or ?oin a la*or 2nion of their

h i f f ll i * i i l+

Respon+ent 2nion f2rther -laims that if nominal o&nership in a-ooperative is /eno2(h to ta5e a&ay the -onstit2tional prote-tionsI + + l * h h l+ * hi + f l



o&n -hoi-e for p2rposes of -olle-tive *ar(ainin( &o2l+ amo2nt to apatent violation of their ri(ht to self)or(ani7ation. She points o2tthat

Al*eit a person ass2mes a +2al -apa-ity as ran5 an+ 6le employeean+ as mem*er of a -ertain -ooperative +oes not militate, as in theinstant -ase, a(ainst his>her e'er-ise of the ri(ht to self)or(ani7ation an+ to -olle-tive *ar(ainin( (2arantee+ *y theConstit2tion an+ La*or Co+e *e-a2se, &hile so +oin(, he>she isa-tin( in his>her -apa-ity as ran5 an+ 6le employee thereof. t may*e a++e+ that &hile the employees -on-erne+ *e-ame mem*ers of petitioner -ooperative, their stat2s employment as ran5 an+ 6lers&ho are hire+ for 6'e+ -ompensation ha+ not -han(e+. They still+o not a-t2ally parti-ipate in the mana(ement of the -ooperativeas sai+ f2n-tion is entr2ste+ to the oar+ of ire-tors an+ to theele-te+ or appointe+ o8-ers thereof. They are not veste+ &ith thepo&ers an+ prero(atives to lay +o&n an+ e'e-2te mana(erialpoli-ies0 to hire, transfer, s2spen+, lay)oI, re-all, +is-har(e, assi(nor +is-ipline employees0 an+>or to eIe-tively re-ommen+ s2-hmana(erial f2n-tions KComment of Respon+ent ire-tor, p. 40Rollo, p. ".

rivate respon+ent EL= -on-2rs &ith the a*ove -ontention of respon+ent +ire-tor an+, a++itionally, -laims that sin-emem*ership in petitioner -ooperative is only nominal, the ran5 an+6le employees &ho are mem*ers thereof sho2l+ not *e +eprive+ of their ri(ht to self)or(ani7ation.

The a*ove -ontentions are 2ntena*le. Contrary to respon+ents1-laim, the fa-t that the mem*ers)employees of petitioner +o notparti-ipate in the a-t2al mana(ement of the -ooperative +oes notma5e them eli(i*le to form, assist or ?oin a la*or or(ani7ation forthe p2rpose of -olle-tive *ar(ainin( &ith petitioner. The Co2rt1sr2lin( in the avao City -ase that mem*ers of -ooperative -annot ?oin a la*or 2nion for p2rposes of -olle-tive *ar(ainin( &as *ase+on the fa-t that as mem*ers of the -ooperative they are -o)o&nersthereof. As s2-h, they -annot invo5e the ri(ht to -olle-tive*ar(ainin( for /-ertainly an o&ner -annot *ar(ain &ith himself orhis -o)o&ners./ KCooperative R2ral an5 of avao City, n-. v.9errer)Calle?a, et al., s2pra. t is the fa-t of o&nership of the-ooperative, an+ not involvement in the mana(ement thereof,&hi-h +is<2ali6es a mem*er from ?oinin( any la*or or(ani7ation&ithin the -ooperative. Th2s, irrespe-tive of the +e(ree of theirparti-ipation in the a-t2al mana(ement of the -ooperative, allmem*ers thereof -annot form, assist or ?oin a la*or or(ani7ation forthe p2rpose of -olle-tive *ar(ainin(.

aIor+e+ to la*or, then there &o2l+ *e no hin+ran-e for employersto (rant, on a s-heme of (enero2s pro6t sharin(, sto-5 *on2ses totheir employees an+ thereafter -laim that sin-e their employeesare not sto-5hol+ers Kof the -orporation, al*eit in a minimal an+invol2ntary manner, they are no& also -o)o&ners an+ th2s+is<2ali6e+ to form 2nions./ To allo& this, EL= ar(2es, &o2l+ *e/to allo& the Qoo+(ates of +estr2-tion to *e opene+ 2pon the ri(htsof la*or &hi-h the Constit2tion en+eavors to prote-t an+ &hi-h&elfare it promises to promote./ KComment of EL=, p. #0 Rollo, p.##.

The a*ove -ontention of respon+ent 2nion is *ase+ on theerroneo2s pres2mption that mem*ership in a -ooperative is thesame as o&nership of sto-5s in or+inary -orporations. Dhile-ooperatives may e'er-ise some of the ri(hts an+ privile(es (ivento or+inary -orporations provi+e+ 2n+er e'istin( la&s, s2-h-ooperatives en?oy other privile(es not (rante+ to the latter KSeeSe-tions 4, , B, an+ , res. e-ree No. ;0 Cooperative R2ralan5 of avao City v. 9errer)Calle?a, s2pra. Similarly, mem*ers of -ooperatives have ri(hts an+ o*li(ations +iIerent from those of

sto-5hol+ers of or+inary -orporations. t &as pre-isely *e-a2se of the spe-ial nat2re of -ooperatives, that the Co2rt hel+ in the avaoCity -ase that mem*ers)employees thereof -annot form or ?oin ala*or 2nion for p2rposes of -olle-tive *ar(ainin(. The Co2rt hel+that

A -ooperative ... is *y its nat2re +iIerent from an or+inary *2siness-on-ern *ein( r2n either *y persons, partnerships, or -orporations.ts o&ners an+>or mem*ers are the ones &ho r2n an+ operate the*2siness &hile the others are its employees. As a*ove state+,irrespe-tive of the n2m*er of shares o&ne+ *y ea-h mem*er theyare entitle+ to -ast one vote ea-h in +e-i+in( 2pon the aIairs of the -ooperative. Their share -apital earn limite+ interest. They

en?oy spe-ial privile(es as)e'emption from in-ome ta' an+ salesta'es, preferential ri(ht to s2pply their pro+2-ts to State a(en-iesan+ even e'emption from the minim2m &a(e la&s.

An employee therefore of s2-h a -ooperative &ho is a mem*er an+-o)o&ner thereof -annot invo5e the ri(ht to -olle-tive *ar(ainin(for -ertainly an o&ner -annot *ar(ain &ith himself or his -o)o&ners.

. Mem*ers of the (lesia ni Cristo

Papatiran sa Meat an+ Cannin( ivision v.

9errer)Calle?a, B" SCRA 3B;

"

After +eli*eratin( on the petition an+ the +o-2ments anne'e+thereto, De 6n+ no merit in the etition. The p2*li- respon+ent +i+

t i +i i i th titi 1 l i LR C N A "

petition for re+ress of (rievan-es *2t *e-a2se of their s2--essive2na2thori7e+ an+ 2nilateral a*sen-es &hi-h pro+2-e+ a+verseeIe-ts 2pon their st2+ents for &hose e+2-ation they are



not err in +ismissin( the petitioner1s appeal in LR Case No. A)")3@);. This Co2rt1s +e-ision in Victoriano vs" Eli+alde Ro(e7or-ersB !nion @ SCRA 4, 2phol+in( the ri(ht of mem*ers of theGLESA N PRST se-t not to ?oin a la*or 2nion for *ein( -ontraryto their reli(io2s *eliefs, +oes not *ar the mem*ers of that se-tfrom formin( their o&n 2nion. The p2*li- respon+ent -orre-tlyo*serve+ that the /re-o(nition of the tenets of the se-t ... sho2l+not infrin(e on the *asi- ri(ht of self)or(ani7ation (rante+ *y the-onstit2tion to &or5ers, re(ar+less of reli(io2s a8liation./

B. Government Employees

A-osta v. CA, G.R. 3"#, :2ne ", "###etitioners +o not +eny their a*sen-e from &or5 nor the fa-t thatsai+ a*sen-es &ere +2e to their parti-ipation in the mass a-tions atthe Li&asan( onifa-io. Ho&ever, they -onten+ that theirparti-ipation in the mass a-tions &as an e'er-ise of their-onstit2tional ri(hts to pea-ea*ly assem*le an+ petition the(overnment for re+ress of (rievan-es. etitioners li5e&ise maintainthat they never &ent on stri5e *e-a2se they never so2(ht to se-2re-han(es or mo+i6-ation of the terms an+ -on+itions of theiremployment.

etitioners1 -ontentions are &itho2t merit. The -hara-ter an+le(ality of the mass a-tions &hi-h they parti-ipate+ in have *eenpasse+ 2pon *y this Co2rt as early as @@# in Manila Public SchoolTeachersB Association MPSTA v" Laguio 4r" &herein &e r2le+ that/these 1mass a-tions1 &ere to all intents an+ p2rposes a stri5e0 they-onstit2te+ a -on-erte+ an+ 2na2thori7e+ stoppa(e of, or a*sen-efrom, &or5 &hi-h it &as the tea-hers1 s&orn +2ty to perform,2n+erta5en for essentially e-onomi- reasons./ n an(alisan v.Co2rt of Appeals &e a++e+ that

t is an 2n+isp2te+ fa-t that there &as a &or5 stoppa(e an+ thatpetitioners1 p2rpose &as to reali7e their +eman+s *y &ithhol+in(their servi-es. The fa-t that the -onventional term /stri5e/ &as not2se+ *y the stri5in( employees to +es-ri*e their -ommon -o2rse of a-tion is in-onse<2ential, sin-e the s2*stan-e of the sit2ation, an+not its appearan-e, &ill *e +eeme+ to *e -ontrollin(.

The a*ility to stri5e is not essential to the ri(ht of asso-iation. nthe a*sen-e of stat2te, p2*li- employees +o not have the ri(ht toen(a(e in -on-erte+ &or5 stoppa(es for any p2rpose.

92rther, herein petitioners, e'-ept Mariano, are *ein( penali7e+ not*e-a2se they e'er-ise+ their ri(ht of pea-ea*le assem*ly an+

eIe-ts 2pon their st2+ents for &hose e+2-ation they areresponsi*le. The a-t2ations of petitioners +e6nitely -onstit2te+-on+2-t pre?2+i-ial to the *est interest of the servi-e, p2nisha*le2n+er the Civil Servi-e la&, r2les an+ re(2lations.

As aptly state+ *y the Soli-itor General, /t is not the e'er-ise *ythe petitioners of their -onstit2tional ri(ht to pea-ea*ly assem*lethat &as p2nishe+, *2t the manner in &hi-h they e'er-ise+ s2-hri(ht &hi-h res2lte+ in the temporary stoppa(e or +isr2ption of

p2*li- servi-e an+ -lasses in vario2s p2*li- s-hools in Metro Manila.9or, in+ee+, there are e8-ient an+ non)+isr2ptive aven2es, otherthan the mass a-tions in <2estion, &here*y petitioners -o2l+petition the (overnment for re+ress of (rievan-es./

t *ears stressin( that s2spension of p2*li- servi-es, ho&evertemporary, &ill inevita*ly +erail servi-es to the p2*li-, &hi-h is oneof the reasons &hy the ri(ht to stri5e is +enie+ (overnmentemployees. t may *e -on-e+e+ that the petitioners ha+ vali+(rievan-es an+ no*le intentions in sta(in( the /mass a-tions,/ *2tthat &ill not ?2stify their a*sen-es to the pre?2+i-e of inno-ents-hool -hil+ren. Their ri(hteo2s in+i(nation +oes not le(ali7e anille(al &or5 stoppa(e.

n :a-into v. Co2rt of Appeals, e la Cr27 v. Co2rt of Appeals, an+Alipat v. Co2rt of Appeals, &e 2phel+ o2r r2lin(s in MSTAan+ #angalisan" Consi+erin( the fa-t2al -ir-2mstan-es of this -asean+ the +o-trine of stare +e-isis to &hi-h &e -onsistently a+here,&e 6n+ no -ompellin( reason to +eviate from o2r earlier r2lin(s inthese relate+ -ases.

;. Employees of nternational r(ani7ations

nternational Catholi- Mi(ration Commission v.

9errer)Calle?a, @# SCRA 3#*acts and Issues

There -an *e no <2estion that +iplomati- imm2nity has, in fa-t,*een (rante+ CMC an+ RR.

Arti-le of the Memoran+2m of A(reement *et&een the hilippineGovernment an+ CMC provi+es that CMC shall have a stat2s/similar to that of a spe-iali7e+ a(en-y./ Arti-le , Se-tions 4 an+ of the Convention on the rivile(es an+ mm2nities of Spe-iali7e+A(en-ies, a+opte+ *y the =N General Assem*ly on " Novem*er@4; an+ -on-2rre+ in *y the hilippine Senate thro2(h Resol2tionNo. @ on ; May @4@, e'pli-itly provi+es

Art. , Se-tion 4. The spe-iali7e+ a(en-ies, their property an+

3

assets, &herever lo-ate+ an+ *y &homsoever hel+, shall en0o. i$$unit. 'ro$ ever. 'or$ o' legal (rocess e'-ept insofar as in anyparti-2lar -ase they have e'pressly &aive+ their imm2nity t is

em*arrass the e'e-2tive arm of the (overnment in -on+2-tin(forei(n relations, it is a--epte+ +o-trine that in s2-h -ases the? +i i l + t t f !thi $ t f ll th ti f th



parti-2lar -ase they have e'pressly &aive+ their imm2nity. t is,ho&ever, 2n+erstoo+ that no &aiver of imm2nity shall e'ten+ toany meas2re of e'e-2tion.

Se-. . The premises of the spe-iali7e+ a(en-ies shall *einviola*le. The property an+ assets of the spe-iali7e+ a(en-ies,&herever lo-ate+ an+ *y &homsoever hel+ shall *e imm2ne fromsear-h, re<2isition, -on6s-ation, e'propriation an+ any other formof interferen-e, &hether *y e'e-2tive, a+ministrative, ?2+i-ial or

le(islative a-tion. !Emphasis s2pplie+$.

RR is similarly sit2ate+, res. e-ree No. B"#, Arti-le 3, is e'pli-itin its (rant of imm2nity, th2s

Art. 3. I$$unit. 'ro$ Legal Process. The nstit2te shall en?oyimm2nity from any penal, -ivil an+ a+ministrative pro-ee+in(s,e'-ept insofar as that imm2nity has *een e'pressly &aive+ *y theire-tor)General of the nstit2te or his a2thori7e+ representatives.

Th2s it is that the E9RA9, thro2(h its Le(al A+viser, s2staine+CMC1S invo-ation of imm2nity &hen in a Memoran+2m, +ate+ ;-to*er @, it e'presse+ the vie& that /the r+er of the ire-torof the 2rea2 of La*or Relations +ate+ " Septem*er @ for the

-on+2-t of Certi6-ation Ele-tion &ithin CMC violates the +iplomati-imm2nity of the or(ani7ation./ Similarly, in respe-t of RR, theE9RA9 spea5in( thro2(h The A-tin( Se-retary of 9orei(n AIairs, :ose . n(les, in a letter, +ate+ ; :2ne @;, to the Se-retary of La*or, maintaine+ that /RR en?oys imm2nity from the ?2ris+i-tionof LE in this parti-2lar instan-e./

The fore(oin( opinions -onstit2te a -ate(ori-al re-o(nition *y theE'e-2tive ran-h of the Government that CMC an+ RR en?oyimm2nities a--or+e+ to international or(ani7ations, &hi-h+etermination has *een hel+ to *e a politi-al <2estion -on-l2sive2pon the Co2rts in or+er not to em*arrass a politi-al +epartment of Government.

t is a re-o(ni7e+ prin-iple of international la& an+ 2n+er o2rsystem of separation of po&ers that +iplomati- imm2nity isessentially a politi-al <2estion an+ -o2rts sho2l+ ref2se to loo5*eyon+ a +etermination *y the e'e-2tive *ran-h of the(overnment, an+ &here the plea of +iplomati- imm2nity isre-o(ni7e+ an+ a8rme+ *y the e'e-2tive *ran-h of the(overnment as in the -ase at *ar, it is then the +2ty of the -o2rts toa--ept the -laim of imm2nity 2pon appropriate s2((estion *y theprin-ipal la& o8-er of the (overnment . . . or other o8-er a-tin(2n+er his +ire-tion. Hen-e, in a+heren-e to the settle+ prin-iplethat -o2rts may not so e'er-ise their ?2ris+i-tion . . . as to

?2+i-ial +epartment of !this$ (overnment follo&s the a-tion of thepoliti-al *ran-h an+ &ill not em*arrass the latter *y ass2min( ananta(onisti- ?2ris+i-tion.

A *rief loo5 into the nat2re of international or(ani7ations an+spe-iali7e+ a(en-ies is in or+er. The term /internationalor(ani7ation/ is (enerally 2se+ to +es-ri*e an or(ani7ation set 2p*y a(reement *et&een t&o or more states. =n+er -ontemporary

international la&, s2-h or(ani7ations are en+o&e+ &ith some+e(ree of international le(al personality s2-h that they are -apa*leof e'er-isin( spe-i6- ri(hts, +2ties an+ po&ers. They are or(ani7e+mainly as a means for -on+2-tin( (eneral international *2siness in&hi-h the mem*er states have an interest. The =nite+ Nations, forinstan-e, is an international or(ani7ation +e+i-ate+ to thepropa(ation of &orl+ pea-e.

/Spe-iali7e+ a(en-ies/ are international or(ani7ations havin(f2n-tions in parti-2lar 6el+s. The term appears in Arti-les ; an+ B3of the Charter of the =nite+ Nations

The Charter, &hile it invests the =nite+ Nations &ith the (eneral

tas5 of promotin( pro(ress an+ international -ooperation ine-onomi-, so-ial, health, -2lt2ral, e+2-ational an+ relate+ matters,-ontemplates that these tas5s &ill *e mainly f2l6lle+ not *y or(ansof the =nite+ Nations itself *2t *y a2tonomo2s internationalor(ani7ations esta*lishe+ *y inter)(overnmental a(reementso2tsi+e the =nite+ Nations. There are no& many s2-h internationala(en-ies havin( f2n-tions in many +iIerent 6el+s, e.(. in posts,tele-omm2ni-ations, rail&ays, -anals, rivers, sea transport, -ivilaviation, meteorolo(y, atomi- ener(y, 6nan-e, tra+e, e+2-ationan+ -2lt2re, health an+ ref2(ees. Some are virt2ally &orl+)&i+e intheir mem*ership, some are re(ional or other&ise limite+ in theirmem*ership. The Charter provi+es that those a(en-ies &hi-h have/&i+e international responsi*ilities/ are to *e *ro2(ht into

relationship &ith the =nite+ Nations *y a(reements entere+ into*et&een them an+ the E-onomi- an+ So-ial Co2n-il, are then to *e5no&n as /spe-iali7e+ a(en-ies./

The rapi+ (ro&th of international or(ani7ations 2n+er-ontemporary international la& has pave+ the &ay for the+evelopment of the -on-ept of international imm2nities.

t is no& 2s2al for the -onstit2tions of international or(ani7ations to-ontain provisions -onferrin( -ertain imm2nities on theor(ani7ations themselves, representatives of their mem*er statesan+ persons a-tin( on *ehalf of the or(ani7ations. A series of -onventions, a(reements an+ proto-ols +e6nin( the imm2nities of vario2s international or(ani7ations in relation to their mem*ers

4

(enerally are no& &i+ely in for-e0 . . .

There are *asi-ally three propositions 2n+erlyin( the (rant of

arisin( o2t of -ontra-ts or other +isp2tes of private -hara-ter to&hi-h the spe-iali7e+ a(en-y is a party./ Moreover, p2rs2ant toArti-le F of the Memoran+2m of A(reement *et&een CMC the the



y p p y ( (international imm2nities to international or(ani7ations. Theseprin-iples, -ontaine+ in the L Memoran+2m are state+ th2s $international instit2tions sho2l+ have a stat2s &hi-h prote-ts thema(ainst -ontrol or interferen-e *y any one (overnment in theperforman-e of f2n-tions for the eIe-tive +is-har(e of &hi-h theyare responsi*le to +emo-rati-ally -onstit2te+ international *o+ies in&hi-h all the nations -on-erne+ are represente+0 "$ no -o2ntry

sho2l+ +erive any national 6nan-ial a+vanta(e *y levyin( 6s-al-har(es on -ommon international f2n+s0 an+ 3$ the internationalor(ani7ation sho2l+, as a -olle-tivity of States mem*ers, *ea--or+e+ the fa-ilities for the -on+2-t of its o8-ial *2siness-2stomarily e'ten+e+ to ea-h other *y its in+ivi+2al mem*erStates. The theory *ehin+ all three propositions is sai+ to *eessentially instit2tional in -hara-ter. /t is not -on-erne+ &ith thestat2s, +i(nity or privile(es of in+ivi+2als, *2t &ith the elements of f2n-tional in+epen+en-e ne-essary to free international instit2tionsfrom national -ontrol an+ to ena*le them to +is-har(e theirresponsi*ilities impartially on *ehalf of all their mem*ers. The raison dBetre for these imm2nities is the ass2ran-e of

2nimpe+e+ performan-e of their f2n-tions *y the a(en-ies-on-erne+.

The (rant of imm2nity from lo-al ?2ris+i-tion to CMC an+ RR is-learly ne-essitate+ *y their international -hara-ter an+ respe-tivep2rposes. The o*?e-tive is to avoi+ the +an(er of partiality an+interferen-e *y the host -o2ntry in their internal &or5in(s. Thee'er-ise of ?2ris+i-tion *y the epartment of La*or in theseinstan-es &o2l+ +efeat the very p2rpose of imm2nity, &hi-h is toshiel+ the aIairs of international or(ani7ations, in a--or+an-e &ithinternational pra-ti-e, from politi-al press2re or -ontrol *y the host-o2ntry to the pre?2+i-e of mem*er States of the or(ani7ation, an+to ens2re the 2nhampere+ performan-e of their f2n-tions.

CMC1s an+ RR1s imm2nity from lo-al ?2ris+i-tion *y no means+eprives la*or of its *asi- ri(hts, &hi-h are (2arantee+ *y Arti-le ,Se-tion , Arti-le , Se-tion , an+ Arti-le V, Se-tion 3 ! su(ra$,of the @; Constit2tion0 an+ implemente+ *y Arti-les "43 an+ "4Bof the La*or Co+e, relie+ on *y the LR ire-tor an+ *y Papisanan.

9or, CMC employees are not &itho2t re-o2rse &henever there are+isp2tes to *e settle+. Se-tion 3 of the Convention on therivile(es an+ mm2nities of the Spe-iali7e+ A(en-ies of the =nite+Nations provi+es that /ea-h spe-iali7e+ a(en-y shall ma5eprovision for appropriate mo+es of settlement of !a$ +isp2tes

Arti-le F of the Memoran+2m of A(reement *et&een CMC the thehilippine Government, &henever there is any a*2se of privile(e *yCMC, the Government is free to &ith+ra& the privile(es an+imm2nities a--or+e+. Th2s

Art. F. Coo(eration %ith 3overn$ent Authorities. . TheCommission shall -ooperate at all times &ith the appropriatea2thorities of the Government to ens2re the o*servan-e of

hilippine la&s, r2les an+ re(2lations, fa-ilitate the propera+ministration of ?2sti-e an+ prevent the o--2rren-es of any a*2seof the privile(es an+ imm2nities (rante+ its o8-ials an+ alienemployees in Arti-le of this A(reement to the Commission.

". n the event that the Government +etermines that there has*een an a*2se of the privile(es an+ imm2nities (rante+ 2n+er thisA(reement, -ons2ltations shall *e hel+ *et&een the Governmentan+ the Commission to +etermine &hether any s2-h a*2se haso--2rre+ an+, if so, the Government shall &ith+ra& the privile(esan+ imm2nities (rante+ the Commission an+ its o8-ials.

Neither are the employees of RR &itho2t reme+y in -ase of +isp2te &ith mana(ement as, in fa-t, there ha+ *een or(ani7e+ a

for2m for *etter mana(ement)employee relationship as evi+en-e+*y the formation of the Co2n-il of RR Employees an+ Mana(ement!CEM$ &herein /*oth mana(ement an+ employees &ere an+ stillare represente+ for p2rposes of maintainin( m2t2al an+ *ene6-ial-ooperation *et&een RR an+ its employees./ The e'isten-e of this=nion fa-t2ally an+ tellin(ly *elies the ar(2ment that res. e-reeNo. B"#, &hi-h (rants to RR the stat2s, privile(es an+ imm2nitiesof an international or(ani7ation, +eprives its employees of the ri(htto self)or(ani7ation.

The imm2nity (rante+ *ein( /from every form of le(al pro-esse'-ept in so far as in any parti-2lar -ase they have e'pressly&aive+ their imm2nity,/ it is ina--2rate to state that a -erti6-ationele-tion is *eyon+ the s-ope of that imm2nity for the reason that itis not a s2it a(ainst CMC. A -erti6-ation ele-tion -annot *e vie&e+as an in+epen+ent or isolate+ pro-ess. t -o2l+ t2((er oI a series of events in the -olle-tive *ar(ainin( pro-ess to(ether &ith relate+in-i+ents an+>or -on-erte+ a-tivities, &hi-h -o2l+ inevita*ly involveCMC in the /le(al pro-ess,/ &hi-h in-l2+es /any penal, -ivil an+a+ministrative pro-ee+in(s./ The event2ality of Co2rt liti(ation isneither remote an+ from &hi-h international or(ani7ations arepre-isely shiel+e+ to safe(2ar+ them from the +isr2ption of theirf2n-tions. Cla2ses on ?2ris+i-tional imm2nity are sai+ to *estan+ar+ provisions in the -onstit2tions of international

r(ani7ations. /The imm2nity -overs the or(ani7ation -on-erne+,its property an+ its assets. t is e<2ally appli-a*le to pro-ee+in(s in(ersona$ an+ pro-ee+in(s in re$ /

n its -hallen(e+ +e-ision, the p2*li- respon+ent hel+ that in+eman+in( the +ismissal of Evaristo an+ ias-an, LAC ha+ a-te+premat2rely *e-a2se the @;4 CA provi+in( for 2nion shop an+



(ersona$ an+ pro-ee+in(s in re$.

. Non)employees

Rep2*li- lanters an5 v. La(2esma, "B4 SCRA

B3; The more appli-a*le -ase is Sin(er Se&in( Ma-hine Company vs.

rilon, et al., &here &e r2le+ that if the 2nion mem*ers are notemployees, no ri(ht to or(ani7e+ for p2rposes of *ar(ainin(, nor to*e -erti6e+ as *ar(ainin( a(ent -an *e re-o(ni7e+. Sin-e thepersons involve+ are not employees of the -ompany, &e hel+ thatthey are not entitle+ to the -onstit2tional ri(ht to ?oin or form ala*or or(ani7ation for p2rposes of -olle-tive *ar(ainin(. Sin(erreiterate+ o2r earlier prono2n-ement in La S2erte Ci(ar an+Ci(arette 9a-tory v. ire-tor of La*or Relations !"3 SCRA B;@K@3$, th2s

The <2estion of &hether employer)employee relationship e'ist is aprimor+ial -onsi+eration *efore e'ten+in( la*or *ene6ts 2n+er the&or5mens -ompensation, so-ial se-2rity, me+i-are, termination

pay an+ la*or relations la&. t is important in the +etermination of &ho shall *e in-l2+e+ in the propose+ *ar(ainin( 2nit *e-a2se, it isthe sine ,ua non, the f2n+amental an+ essential -on+ition that a*ar(ainin( 2nit *e -ompose+ of employees. 9ail2re to esta*lish this ?2ri+i-al relationship *et&een the 2nion mem*ers an+ theemployer aIe-ts the le(ality of the 2nion itself. t means theineli(i*ility of the 2nion mem*ers to present a petition for-erti6-ation ele-tion as &ell as to vote therein./

G. A-<2isition an+ Retention of Mem*ership =nion

Se-2rity A(reements

Li*erty 9lo2r Mills Employees v. Li*erty 9lo2rMills, n-., e-em*er "@, @@Comin( no& to the se-on+ iss2e, &e 6n+ that it m2st also *eresolve+ a(ainst the petitioners.

Evaristo an+ ias-an -laim they &ere ille(ally +ismisse+ foror(ani7in( another la*or 2nion oppose+ to LAC, &hi-h they+es-ri*e as a -ompany 2nion. Ar(2in( that they &ere onlye'er-isin( the ri(ht to self or(ani7ation as (2arantee+ *y theConstit2tion, they insist they are entitle+ to the *a-5 &a(es &hi-hthe NLRC +isallo&e+ &hile a8rmin( their reinstatement.

premat2rely *e-a2se the @;4 CA provi+in( for 2nion shop an+p2rs2ant to &hi-h the t&o petitioners &ere +ismisse+ ha+ not yet*een -erti6e+. The impli-ation is that it &as not yet in eIe-t an+ so-o2l+ not *e the *asis of the a-tion ta5en a(ainst the t&opetitioners. This -on-l2sion is erroneo2s. t +isre(ar+s the r2lin( of this Co2rt in Tandua. Distiller. Labor !nion v" NLRC, &ere &e hel+

The fa-t, therefore, that the 2rea2 of La*or Relations !LR$ faile+

to -ertify or a-t on TL=1s re<2est for -erti6-ation of the CA in<2estion is of no moment to the resol2tion of the iss2es presente+in this -ase. The LR itself fo2n+ in its or+er of :2ly , @", thatthe !2n$-erti6e+ CA &as +2ly 6le+ an+ s2*mitte+ on -to*er "@,@#, to last 2ntil :2ne 3#, @" is -erti6a*le for havin( -omplie+&ith all the re<2irements for -erti6-ation. !Emphasis s2pplie+.$

The CA -on-l2+e+ in @;4 &as -erti6a*le an+ &as in fa-t -erti6e+on April , @;, t *ears stressin( that Evaristo an+ ias-an &ere+ismisse+ only on May "#, @;, more than a month after the sai+-erti6-ation.

The -orre-t vie& is that e'presse+ *y Commissioner Ce-ilio . Senoin his -on-2rrin( an+ +issentin( opinion, vi7.

-annot ho&ever s2*s-ri*e to the ma?ority vie& that the 1+ismissalof -omplainants ias-an an+ Evaristo, ... &as, to say the least, apremat2re a-tion on the part of the respon+ents *e-a2se at thetime they &ere e'pelle+ *y LAC the -ontra-t -ontainin( the 2nionse-2rity -la2se 2pon &hi-h the a-tion &as *ase+ &as yet to *e-erti6e+ an+ the representation stat2s of the -ontra-tin( 2nion &asstill in <2estion.

Evi+en-e on re-or+ sho& that after the -an-ellation of there(istration -erti6-ate of the 9e+eration of emo-rati- La*or=nions, no other 2nion -onteste+ the e'-l2sive representation of the hilippine La*or Allian-e Co2n-il !LAC$, -onse<2ently, there

&as no more le(al impe+iment that stoo+ on the &ay as to thevali+ity an+ enfor-ea*ility of the provisions of the -olle-tive*ar(ainin( a(reement entere+ into *y an+ *et&een respon+ent-orporation an+ respon+ent 2nion. The -erti6-ation of the -olle-tive*ar(ainin( a(reement *y the 2rea2 of La*or Relations is notre<2ire+ to p2t a stamp of vali+ity to s2-h -ontra-t. n-e it is +2lyentere+ into an+ si(ne+ *y the parties, a -olle-tive *ar(ainin(a(reement *e-omes eIe-tive as *et&een the parties re(ar+less of &hether or not the same has *een -erti6e+ *y the LR.

To *e fair, it m2st *e mentione+ that in the -erti6-ation ele-tionhel+ at the Li*erty 9lo2r Mills, n-. on e-em*er ";, @;B, the la&

B

at 25lo+ n( Man((a(a&a, &ith &hi-h the 2nion or(ani7e+ *yias-an an+ Evaristo &as a8liate+, &on over&helmin(ly &ith 44votes as a(ainst the votes -ast for LAC Ho&ever this +oes not

la*or 2nions appears no&here in the &or+in( of Rep2*li- A-t No.33#0 neither -an the same *e +e+2-e+ *y ne-essary impli-ationtherefrom t is not s2rprisin( therefore that appellant havin( th2s



votes as a(ainst the votes -ast for LAC. Ho&ever, this +oes note'-2se the fa-t that the t&o +isa8liate+ from LAC as early asMar-h @; an+ th2s ren+ere+ themselves s2*?e-t to +ismissal2n+er the 2nion shop -la2se in the CA.

The petitioners say that the reinstatement iss2e of Evaristo an+ias-an has *e-ome a-a+emi- *e-a2se the former has *eenrea+mitte+ an+ the latter has -hosen to a&ait the resol2tion of this

-ase. Ho&ever, they still insist on the payment of their *a-5 &a(eson the (ro2n+ that their +ismissal &as ille(al. This -laim m2st *e+enie+ for the reasons alrea+y (iven. The 2nion shop -la2se &asvali+ly enfor-e+ a(ainst them an+ ?2sti6e+ the termination of theirservi-es.

t is the poli-y of the State to promote 2nionism to ena*le the&or5ers to ne(otiate &ith mana(ement on the same level an+ &ithmore pers2asiveness than if they &ere to in+ivi+2ally an+in+epen+ently *ar(ain for the improvement of their respe-tive-on+itions. To this en+, the Constit2tion (2arantees to them theri(hts /to self)or(ani7ation, -olle-tive *ar(ainin( an+ ne(otiationsan+ pea-ef2l -on-erte+ a-tions in-l2+in( the ri(ht to stri5e ina--or+an-e &ith la&./ There is no <2estion that these p2rposes-o2l+ *e th&arte+ if every &or5er &ere to -hoose to (o his o&nseparate &ay instea+ of ?oinin( his -o)employees in plannin(-olle-tive a-tion an+ presentin( a 2nite+ front &hen they sit +o&nto *ar(ain &ith their employers. t is for this reason that the la& hassan-tione+ stip2lations for the 2nion shop an+ the -lose+ shop as ameans of en-o2ra(in( the &or5ers to ?oin an+ s2pport the la*or2nion of their o&n -hoi-e as their representative in the ne(otiationof their +eman+s an+ the prote-tion of their interest vis)a)vis theemployer.

The Co2rt &o2l+ have preferre+ to resolve this -ase in favor of the

petitioners, *2t the la& an+ the fa-ts are a(ainst them. 9or all the-on-ern of the State, for the &ell)*ein( of the &or5er, &e m2st atall times -onform to the re<2irements of the la& as lon( as s2-hla& has not *een sho&n to *e violative of the Constit2tion. No s2-hviolation has *een sho&n here.

Fi-toriano v. Eli7al+e Rope Dor5ers =nion, @

SCRA 4. Appellant =nion1s -ontention that Rep2*li- A-t No.33# (rohibits an+ *ans the mem*ers of s2-h reli(io2s se-ts thatfor*i+ a8liation of their mem*ers &ith la*or 2nions from ?oinin(

therefrom. t is not s2rprisin(, therefore, that appellant, havin( th2smisrea+ the A-t, -ommitte+ the error of -onten+in( that sai+ A-t iso*no'io2s to the -onstit2tional provision on free+om of asso-iation.

oth the Constit2tion an+ Rep2*li- A-t No. ; re-o(ni7e free+omof asso-iation. Se-tion !B$ of Arti-le of the Constit2tion of @3,as &ell as Se-tion ; of Arti-le F of the Constit2tion of @;3, provi+ethat the ri(ht to form asso-iations or so-ieties for p2rposes not

-ontrary to la& shall not *e a*ri+(e+. Se-tion 3 of Rep2*li- A-t No.; provi+es that employees shall have the ri(ht to self)or(ani7ation an+ to form, ?oin of assist la*or or(ani7ations of theiro&n -hoosin( for the p2rpose of -olle-tive *ar(ainin( an+ toen(a(e in -on-erte+ a-tivities for the p2rpose of -olle-tive*ar(ainin( an+ other m2t2al ai+ or prote-tion. Dhat theConstit2tion an+ the n+2strial ea-e A-t re-o(ni7e an+ (2aranteeis the /ri(ht/ to form or ?oin asso-iations. Not&ithstan+in( the+iIerent theories propo2n+e+ *y the +iIerent s-hools of ?2rispr2+en-e re(ar+in( the nat2re an+ -ontents of a /ri(ht/, it -an*e safely sai+ that &hatever theory one s2*s-ri*es to, a ri(ht-omprehen+s at least t&o *roa+ notions, namely 6rst, li*erty or

free+om, i.e., the a*sen-e of le(al restraint, &here*y an employeemay a-t for himself &itho2t *ein( prevente+ *y la&0 an+ se-on+,po&er, &here*y an employee may, as he pleases, ?oin or refrainfrom :oinin( an asso-iation. t is, therefore, the employee &hosho2l+ +e-i+e for himself &hether he sho2l+ ?oin or not anasso-iation0 an+ sho2l+ he -hoose to ?oin, he himself ma5es 2p hismin+ as to &hi-h asso-iation he &o2l+ ?oin0 an+ even after he has ?oine+, he still retains the li*erty an+ the po&er to leave an+ -an-elhis mem*ership &ith sai+ or(ani7ation at any time. t is -lear,therefore, that the ri(ht to ?oin a 2nion in-l2+es the ri(ht to a*stainfrom ?oinin( any 2nion. nasm2-h as &hat *oth the Constit2tion an+the n+2strial ea-e A-t have re-o(ni7e+, an+ (2arantee+ to the

employee, is the /ri(ht/ to ?oin asso-iations of his -hoi-e, it &o2l+*e a*s2r+ to say that the la& also imposes, in the same *reath,2pon the employee the +2ty to ?oin asso-iations. The la& +oes noten?oin an employee to si(n 2p &ith any asso-iation.

The ri(ht to refrain from ?oinin( la*or or(ani7ations re-o(ni7e+ *ySe-tion 3 of the n+2strial ea-e A-t is, ho&ever, limite+. The le(alprote-tion (rante+ to s2-h ri(ht to refrain from ?oinin( is &ith+ra&n*y operation of la&, &here a la*or 2nion an+ an employer havea(ree+ on a -lose+ shop, *y virt2e of &hi-h the employer mayemploy only mem*er of the -olle-tive *ar(ainin( 2nion, an+ theemployees m2st -ontin2e to *e mem*ers of the 2nion for the

;

+2ration of the -ontra-t in or+er to 5eep their ?o*s. Th2s Se-tion 4!a$ !4$ of the n+2strial ea-e A-t, *efore its amen+ment *yRep2*li- A-t No 33# provi+es that altho2(h it &o2l+ *e an 2nfair

impairin( the o*li(ation of its -ontra-t, spe-i6-ally, the /2nionse-2rity -la2se/ em*o+ie+ in its Colle-tive ar(ainin( A(reement&ith the Company *y virt2e of &hi-h /mem*ership in the 2nion



Rep2*li- A-t No. 33#, provi+es that altho2(h it &o2l+ *e an 2nfairla*or pra-ti-e for an employer /to +is-riminate in re(ar+ to hire orten2re of employment or any term or -on+ition of employment toen-o2ra(e or +is-o2ra(e mem*ership in any la*or or(ani7ation/the employer is, ho&ever, not pre-l2+e+ /from ma5in( ana(reement &ith a la*or or(ani7ation to re<2ire as a -on+ition of employment mem*ership therein, if s2-h la*or or(ani7ation is therepresentative of the employees/. y virt2e, therefore, of a -lose+shop a(reement, *efore the ena-tment of Rep2*li- A-t No. 33#, if any person, re(ar+less of his reli(io2s *eliefs, &ishes to *eemploye+ or to 5eep his employment, he m2st *e-ome a mem*erof the -olle-tive *ar(ainin( 2nion. Hen-e, the ri(ht of sai+employee not to ?oin the la*or 2nion is -2rtaile+ an+ &ith+ra&n.

To that all)em*ra-in( -overa(e of the -lose+ shop arran(ement,Rep2*li- A-t No. 33# intro+2-e+ an e'-eption, &hen it a++e+ toSe-tion 4 !a$ !4$ of the n+2strial ea-e A-t the follo&in( proviso/*2t s2-h a(reement shall not -over mem*ers of any reli(io2sse-ts &hi-h prohi*it a8liation of their mem*ers in any s2-h la*oror(ani7ation/. Rep2*li- A-t No. 33# merely e'-l2+es i(so 0ure from

the appli-ation an+ -overa(e of the -lose+ shop a(reement theemployees *elon(in( to any reli(io2s se-ts &hi-h prohi*it a8liationof their mem*ers &ith any la*or or(ani7ation. Dhat the e'-eptionprovi+es, therefore, is that mem*ers of sai+ reli(io2s se-ts -annot*e -ompelle+ or -oer-e+ to ?oin la*or 2nions even &hen sai+ 2nionshave -lose+ shop a(reements &ith the employers0 that in spite of any -lose+ shop a(reement, mem*ers of sai+ reli(io2s se-ts -annot*e ref2se+ employment or +ismisse+ from their ?o*s on the sole(ro2n+ that they are not mem*ers of the -olle-tive *ar(ainin(2nion. t is -lear, therefore, that the assaile+ A-t, far from infrin(in(the -onstit2tional provision on free+om of asso-iation, 2phol+s an+reinfor-es it. t +oes not prohi*it the mem*ers of sai+ reli(io2s

se-ts from a8liatin( &ith la*or 2nions. t still leaves to sai+mem*ers the li*erty an+ the po&er to a8liate, or not to a8liate,&ith la*or 2nions. f, not&ithstan+in( their reli(io2s *eliefs, themem*ers of sai+ reli(io2s se-ts prefer to si(n 2p &ith the la*or2nion, they -an +o so. f in +eferen-e an+ fealty to their reli(io2sfaith, they ref2se to si(n 2p, they -an +o so0 the la& +oes not-oer-e them to ?oin0 neither +oes the la& prohi*it them from ?oinin(0 an+ neither may the employer or la*or 2nion -ompel themto ?oin. Rep2*li- A-t No. 33#, therefore, +oes not violate the-onstit2tional provision on free+om of asso-iation.

". Appellant =nion also -onten+s that the A-t is 2n-onstit2tional for

&ith the Company, *y virt2e of &hi-h mem*ership in the 2nion&as re<2ire+ as a -on+ition for employment for all permanentemployees &or5ers/. This a(reement &as alrea+y in e'isten-e atthe time Rep2*li- A-t No. 33# &as ena-te+ on :2ne , @B, an+it -annot, therefore, *e +eeme+ to have *een in-orporate+ into thea(reement. 2t *y reason of this amen+ment, Appellee, as &ell asothers similarly sit2ate+, -o2l+ no lon(er *e +ismisse+ from his ?o*even if he sho2l+ -ease to *e a mem*er, or +isa8liate from the=nion, an+ the Company -o2l+ -ontin2e employin( himnot&ithstan+in( his +isa8liation from the =nion. The A-t, therefore,intro+2-e+ a -han(e into the e'press terms of the 2nion se-2rity-la2se0 the Company &as partly a*solve+ *y la& from the-ontra-t2al o*li(ation it ha+ &ith the =nion of employin( only=nion mem*ers in permanent positions, t -annot *e +enie+,therefore, that there &as in+ee+ an impairment of sai+ 2nionse-2rity -la2se.

Dhat then &as the p2rpose so2(ht to *e a-hieve+ *y Rep2*li- A-tNo. 33#W ts p2rpose &as to ins2re free+om of *elief an+ reli(ion,an+ to promote the (eneral &elfare *y preventin( +is-rimination

a(ainst those mem*ers of reli(io2s se-ts &hi-h prohi*it theirmem*ers from ?oinin( la*or 2nions, -on6rmin( there*y theirnat2ral, stat2tory an+ -onstit2tional ri(ht to &or5, the fr2its of &hi-h &or5 are 2s2ally the only means &here*y they -an maintaintheir o&n life an+ the life of their +epen+ents. t -annot *e (ainsai+that sai+ p2rpose is le(itimate.

The <2estione+ A-t also provi+es prote-tion to mem*ers of sai+reli(io2s se-ts a(ainst t&o a((re(ates of (ro2p stren(th from &hi-hthe in+ivi+2al nee+s prote-tion. The in+ivi+2al employee, at vario2stimes in his &or5in( life, is -onfronte+ *y t&o a((re(ates of po&er -olle-tive la*or, +ire-te+ *y a 2nion, an+ -olle-tive -apital,+ire-te+ *y mana(ement. The 2nion, an instit2tion +evelope+ toor(ani7e la*or into a -olle-tive for-e an+ th2s prote-t the in+ivi+2alemployee from the po&er of -olle-tive -apital, is, para+o'i-ally,*oth the -hampion of employee ri(hts, an+ a ne& so2r-e of theirfr2stration. Moreover, &hen the =nion intera-ts &ith mana(ement,it pro+2-es yet a thir+ a((re(ate of (ro2p stren(th from &hi-h thein+ivi+2al also nee+s prote-tion the -olle-tive *ar(ainin(relationship.

The aforementione+ p2rpose of the amen+atory la& is -learly seenin the E'planatory Note to Ho2se ill No. @, &hi-h later *e-ameRep2*li- A-t No. 33#, as follo&s

t &o2l+ *e 2nthin5a*le in+ee+ to ref2se employin( a person &ho,on a--o2nt of his reli(io2s *eliefs an+ -onvi-tions, -annot a--eptmem*ership in a la*or or(ani7ation altho2(h he possesses all the

en?oine+, in the @3 Constit2tion, to aIor+ prote-tion to la*or, an+re(2late the relations *et&een la*or an+ -apital an+ in+2stry. Moreso no& in the @;3 Constit2tion &here it is man+ate+ that /the



p ( ( p<2ali6-ations for the ?o*. This is tantamo2nt to p2nishin( s2-hperson for *elievin( in a +o-trine he has a ri(ht 2n+er the la& to*elieve in. The la& &o2l+ not allo& +is-rimination to Qo2rish to the+etriment of those &hose reli(ion +is-ar+s mem*ership in anyla*or or(ani7ation. Li5e&ise, the la& &o2l+ not -ommen+ the+eprivation of their ri(ht to &or5 an+ p2rs2e a mo+est means of livelihoo+, &itho2t in any manner violatin( their reli(io2s faithan+>or *elief.

t -annot *e +enie+, f2rthermore, that the means a+opte+ *y theA-t to a-hieve that p2rpose e'emptin( the mem*ers of sai+reli(io2s se-ts from -overa(e of 2nion se-2rity a(reements isreasona*le.

t may not *e amiss to point o2t here that the free e'er-ise of reli(io2s profession or *elief is s2perior to -ontra-t ri(hts. n -ase of -onQi-t, the latter m2st, therefore, yiel+ to the former. TheS2preme Co2rt of the =nite+ States has also +e-lare+ on severalo--asions that the ri(hts in the 9irst Amen+ment, &hi-h in-l2+efree+om of reli(ion, en?oy a preferre+ position in the -onstit2tionalsystem. Reli(io2s free+om, altho2(h not 2nlimite+, is af2n+amental personal ri(ht an+ li*erty, an+ has a preferre+ positionin the hierar-hy of val2es. Contra-t2al ri(hts, therefore, m2st yiel+to free+om of reli(ion. t is only &here 2navoi+a*ly ne-essary toprevent an imme+iate an+ (rave +an(er to the se-2rity an+ &elfareof the -omm2nity that infrin(ement of reli(io2s free+om may *e ?2sti6e+, an+ only to the smallest e'tent ne-essary to avoi+ the+an(er.

3. n f2rther s2pport of its -ontention that Rep2*li- A-t No. 33# is2n-onstit2tional, appellant =nion averre+ that sai+ A-t+is-riminates in favor of mem*ers of sai+ reli(io2s se-ts in violationof Se-tion !;$ of Arti-le ll of the @3 Constit2tion, an+ &hi-h is

no& Se-tion of Arti-le F of the @;3 Constit2tion.

The p2rpose of Rep2*li- A-t No. 33# is se-2lar, &orl+ly, an+temporal, not spirit2al or reli(io2s or holy an+ eternal. t &asinten+e+ to serve the se-2lar p2rpose of a+van-in( the-onstit2tional ri(ht to the free e'er-ise of reli(ion, *y avertin( that-ertain persons *e ref2se+ &or5, or *e +ismisse+ from &or5, or *e+ispossesse+ of their ri(ht to &or5 an+ of *ein( impe+e+ to p2rs2ea mo+est means of livelihoo+, *y reason of 2nion se-2ritya(reements. To help its -iti7ens to 6n+ (ainf2l employment&here*y they -an ma5e a livin( to s2pport themselves an+ theirfamilies is a vali+ o*?e-tive of the state. n fa-t, the state is

so no& in the @;3 Constit2tion &here it is man+ate+ that theState shall aIor+ prote-tion to la*or, promote f2ll employment an+e<2ality in employment, ens2re e<2al &or5 opport2nitiesre(ar+less of se', ra-e or -ree+ an+ re(2late the relation *et&een&or5ers an+ employers.

The primary eIe-ts of the e'emption from -lose+ shop a(reementsin favor of mem*ers of reli(io2s se-ts that prohi*it their mem*ers

from a8liatin( &ith a la*or or(ani7ation, is the prote-tion of sai+employees a(ainst the a((re(ate for-e of the -olle-tive *ar(ainin(a(reement, an+ relievin( -ertain -iti7ens of a *2r+en on theirreli(io2s *eliefs0 an+ *y eliminatin( to a -ertain e'tent e-onomi-inse-2rity +2e to 2nemployment, &hi-h is a serio2s mena-e to thehealth, morals, an+ &elfare of the people of the State, the A-t alsopromotes the &ell)*ein( of so-iety. t is o2r vie& that the e'emptionfrom the eIe-ts of -lose+ shop a(reement +oes not +ire-tlya+van-e, or +iminish, the interests of any parti-2lar reli(ion.Altho2(h the e'emption may *ene6t those &ho are mem*ers of reli(io2s se-ts that prohi*it their mem*ers from ?oinin( la*or2nions, the *ene6t 2pon the reli(io2s se-ts is merely in-i+ental an+

in+ire-t. The /esta*lishment -la2se/ !of reli(ion$ +oes not *anre(2lation on -on+2-t &hose reason or eIe-t merely happens to-oin-i+e or harmoni7e &ith the tenets of some or all reli(ions. Thefree e'er-ise -la2se of the Constit2tion has *een interprete+ tore<2ire that reli(io2s e'er-ise *e preferentially ai+e+.

De *elieve that in ena-tin( Rep2*li- A-t No. 33#, Con(ress a-te+-onsistently &ith the spirit of the -onstit2tional provision. t a-te+merely to relieve the e'er-ise of reli(ion, *y -ertain persons, of a*2r+en that is impose+ *y 2nion se-2rity a(reements. t &asCon(ress itself that impose+ that *2r+en &hen it ena-te+ then+2strial ea-e A-t !Rep2*li- A-t ;$, an+, -ertainly, Con(ress, if it so +eems a+visa*le, -o2l+ ta5e a&ay the same *2r+en. t is-ertain that not every -ons-ien-e -an *e a--ommo+ate+ *y all thela&s of the lan+0 *2t &hen (eneral la&s -onQi-t &ith s-r2pples of -ons-ien-e, e'emptions o2(ht to *e (rante+ 2nless some/-ompellin( state interest/ intervenes. n the instant -ase, De seeno s2-h -ompellin( state interest to &ithhol+ e'emption.

Appellant *e&ails that &hile Rep2*li- A-t No. 33# prote-tsmem*ers of -ertain reli(io2s se-ts, it leaves no ri(ht to, an+ issilent as to the prote-tion of, la*or or(ani7ations. The p2rpose of Rep2*li- A-t No. 33# &as not to (rant ri(hts to la*or 2nions. Theri(hts of la*or 2nions are amply provi+e+ for in Rep2*li- A-t No.

@

; an+ the ne& La*or Co+e. As to the lamente+ silen-e of the A-tre(ar+in( the ri(hts an+ prote-tion of la*or 2nions, s28-e it to say,6rst that the vali+ity of a stat2te is +etermine+ *y its provisions

. Appellant avers as its 6fth (ro2n+ that Rep2*li- A-t No. 33# is a+is-riminatory le(islation, inasm2-h as it (rants to the mem*ers of -ertain reli(io2s se-ts 2n+2e a+vanta(es over other &or5ers th2s



6rst, that the vali+ity of a stat2te is +etermine+ *y its provisions,not *y its silen-e 0 an+, se-on+, the fa-t that the la& may &or5har+ship +oes not ren+er it 2n-onstit2tional.

t &o2l+ not *e amiss to state, re(ar+in( this matter, that to -ompelpersons to ?oin an+ remain mem*ers of a 2nion to 5eep their ?o*s inviolation of their reli(io2s s-r2pples, &o2l+ h2rt, rather than help,la*or 2nions, Con(ress has seen it 6t to e'empt reli(io2s o*?e-tors

lest their resistan-e sprea+ to other &or5ers, for reli(io2s o*?e-tionshave -onta(io2s potentialities more than politi-al an+ philosophi-o*?e-tions.

92rthermore, let it *e note+ that -oer-e+ 2nity an+ loyalty even tothe -o2ntry, an+ a 'ortiori to a la*or 2nion ass2min( that s2-h2nity an+ loyalty -an *e attaine+ thro2(h -oer-ion is not a (oalthat is -onstit2tionally o*taina*le at the e'pense of reli(io2s li*erty.A +esira*le en+ -annot *e promote+ *y prohi*ite+ means.

4. Appellants1 fo2rth -ontention, that Rep2*li- A-t No. 33# violatesthe -onstit2tional prohi*ition a(ainst re<2irin( a reli(io2s test forthe e'er-ise of a -ivil ri(ht or a politi-al ri(ht, is not &ell ta5en. The

A-t +oes not re<2ire as a <2ali6-ation, or -on+ition, for ?oinin( anyla&f2l asso-iation mem*ership in any parti-2lar reli(ion or in anyreli(io2s se-t0 neither +oes the A-t re<2ire a8liation &ith areli(io2s se-t that prohi*its its mem*ers from ?oinin( a la*or 2nionas a -on+ition or <2ali6-ation for &ith+ra&in( from a la*or 2nion. :oinin( or &ith+ra&in( from a la*or 2nion re<2ires a positive a-t.Rep2*li- A-t No. 33# only e'empts mem*ers &ith s2-h reli(io2sa8liation from the -overa(e of -lose+ shop a(reements. So, 2n+erthis A-t, a reli(io2s o*?e-tor is not re<2ire+ to +o a positive a-t toe'er-ise the ri(ht to ?oin or to resi(n from the 2nion. He ise'empte+ i(so 0ure &itho2t nee+ of any positive a-t on his part. A-ons-ientio2s reli(io2s o*?e-tor nee+ not perform a positive a-t or

e'er-ise the ri(ht of resi(nin( from the la*or 2nion he ise'empte+ from the -overa(e of any -lose+ shop a(reement that ala*or 2nion may have entere+ into. Ho& then -an there *e areli(io2s test re<2ire+ for the e'er-ise of a ri(ht &hen no ri(ht nee+*e e'er-ise+W

De have sai+ that it &as &ithin the poli-e po&er of the State toena-t Rep2*li- A-t No. 33#, an+ that its p2rpose &as le(al an+ in-onsonan-e &ith the Constit2tion. t is never an ille(al evasion of a-onstit2tional provision or prohi*ition to a--omplish a +esire+res2lt, &hi-h is la&f2l in itself, *y +is-overin( or follo&in( a le(al&ay to +o it.

-ertain reli(io2s se-ts 2n+2e a+vanta(es over other &or5ers, th2sviolatin( Se-tion of Arti-le of the @3 Constit2tion &hi-hfor*i+s the +enial to any person of the e<2al prote-tion of the la&s.

De *elieve that Rep2*li- A-t No. 33# satis6es the aforementione+re<2irements. The A-t -lassi6es employees an+ &or5ers, as to theeIe-t an+ -overa(e of 2nion shop se-2rity a(reements, into those&ho *y reason of their reli(io2s *eliefs an+ -onvi-tions -annot si(n

2p &ith a la*or 2nion, an+ those &hose reli(ion +oes not prohi*itmem*ership in la*or 2nions. Tile -lassi6-ation rests on real ors2*stantial, not merely ima(inary or &himsi-al, +istin-tions. Thereis s2-h real +istin-tion in the *eliefs, feelin(s an+ sentiments of employees. Employees +o not *elieve in the same reli(io2s faithan+ +iIerent reli(ions +iIer in their +o(mas an+ -annons. Reli(io2s*eliefs, manifestations an+ pra-ti-es, tho2(h they are fo2n+ in allpla-es, an+ in all times, ta5e so many varie+ forms as to *e almost*eyon+ ima(ination. There are many vie&s that -omprise the *roa+spe-tr2m of reli(io2s *eliefs amon( the people. There are +iversemanners in &hi-h *eliefs, e<2ally paramo2nt in the lives of theirpossessors, may *e arti-2late+. To+ay the -o2ntry is far more

hetero(eno2s in reli(ion than *efore, +iIeren-es in reli(ion +oe'ist, an+ these +iIeren-es are important an+ sho2l+ not *ei(nore+.

Even from the psy-holo(i-al point of vie&, the -lassi6-ation is*ase+ on real an+ important +iIeren-es. Reli(io2s *eliefs are notmere *eliefs, mere i+eas e'istin( only in the min+, for they -arry&ith them pra-ti-al -onse<2en-es an+ are the motives of -ertainr2les. of h2man -on+2-t an+ the ?2sti6-ation of -ertain a-ts.Reli(io2s sentiment ma5es a man vie& thin(s an+ events in theirrelation to his Go+. t (ives to h2man life its +istin-tive -hara-ter,its tone, its happiness or 2nhappiness its en?oyment orir5someness. =s2ally, a stron( an+ passionate +esire is involve+ ina reli(io2s *elief. To -ertain persons, no sin(le fa-tor of theire'perien-e is more important to them than their reli(ion, or theirnot havin( any reli(ion. e-a2se of +iIeren-es in reli(io2s *elief an+ sentiments, a very poor person may -onsi+er himself *etterthan the ri-h, an+ the man &ho even la-5s the ne-essities of lifemay *e more -heerf2l than the one &ho has all possi*le l2'2ries.2e to their reli(io2s *eliefs people, li5e the martyrs, *e-ameresi(ne+ to the inevita*le an+ a--epte+ -heerf2lly even the mostpainf2l an+ e'-r2-iatin( pains. e-a2se of +iIeren-es in reli(io2s*eliefs, the &orl+ has &itnesse+ t2rmoil, -ivil strife, perse-2tion,hatre+, *loo+she+ an+ &ar, (enerate+ to a lar(e e'tent *y

@#

mem*ers of se-ts &ho &ere intolerant of other reli(io2s *eliefs. The-lassi6-ation, intro+2-e+ *y Rep2*li- A-t No. 33#, therefore, restson s2*stantial +istin-tions.

the -onstit2tional provision on so-ial ?2sti-e is also *aseless. So-ial ?2sti-e is inten+e+ to promote the &elfare of all the people.Rep2*li- A-t No. 33# promotes that &elfare insofar as it loo5s



on s2*stantial +istin-tions.

The -lassi6-ation intro+2-e+ *y sai+ A-t is also (ermane to itsp2rpose. The p2rpose of the la& is pre-isely to avoi+ those &ho-annot, *e-a2se of their reli(io2s *elief, ?oin la*or 2nions, from*ein( +eprive+ of their ri(ht to &or5 an+ from *ein( +ismisse+ fromtheir &or5 *e-a2se of 2nion shop se-2rity a(reements.

Rep2*li- A-t No. 33#, f2rthermore, is not limite+ in its appli-ationto -on+itions e'istin( at the time of its ena-tment. The la& +oesnot provi+e that it is to *e eIe-tive for a -ertain perio+ of time only.t is inten+e+ to apply for all times as lon( as the -on+itions to&hi-h the la& is appli-a*le e'ist. As lon( as there are -lose+ shopa(reements *et&een an employer an+ a la*or 2nion, an+ there areemployees &ho are prohi*ite+ *y their reli(ion from a8liatin( &ithla*or 2nions, their e'emption from the -overa(e of sai+a(reements -ontin2es.

9inally, the A-t applies e<2ally to all mem*ers of sai+ reli(io2sse-ts0 this is evi+ent from its provision. The fa-t that the la& (rantsa privile(e to mem*ers of sai+ reli(io2s se-ts -annot *y itself

ren+er the A-t 2n-onstit2tional, for as De have a+verte+ to, the A-tonly restores to them their free+om of asso-iation &hi-h -lose+shop a(reements have ta5en a&ay, an+ p2ts them in the sameplane as the other &or5ers &ho are not prohi*ite+ *y their reli(ionfrom ?oinin( la*or 2nions. The -ir-2mstan-e, that the otheremployees, *e-a2se they are +iIerently sit2ate+, are not (rante+the same privile(e, +oes not ren+er the la& 2n-onstit2tional, forevery -lassi6-ation allo&e+ *y the Constit2tion *y its nat2reinvolves ine<2ality.

The mere fa-t that the le(islative -lassi6-ation may res2lt in a-t2aline<2ality is not violative of the ri(ht to e<2al prote-tion, for every-lassi6-ation of persons or thin(s for re(2lation *y la& pro+2-esine<2ality in some +e(ree, *2t the la& is not there*y ren+ere+invali+. A -lassi6-ation other&ise reasona*le +oes not oIen+ the-onstit2tion simply *e-a2se in pra-ti-e it res2lts in some ine<2ality.Anent this matter, it has *een sai+ that &henever it is apparentfrom the s-ope of the la& that its o*?e-t is for the *ene6t of thep2*li- an+ the means *y &hi-h the *ene6t is to *e o*taine+ are of p2*li- -hara-ter, the la& &ill *e 2phel+ even tho2(h in-i+entala+vanta(e may o--2r to in+ivi+2als *eyon+ those en?oye+ *y the(eneral p2*li-.

B. Appellant1s f2rther -ontention that Rep2*li- A-t No. 33# violates

Rep2*li- A-t No. 33# promotes that &elfare insofar as it loo5safter the &elfare of those &ho, *e-a2se of their reli(io2s *elief,-annot ?oin la*or 2nions0 the A-t prevents their *ein( +eprive+ of &or5 an+ of the means of livelihoo+. n +eterminin( &hether anyparti-2lar meas2re is for p2*li- a+vanta(e, it is not ne-essary thatthe entire state *e +ire-tly *ene6te+ it is s28-ient that a portionof the state *e *ene6te+ there*y.

So-ial ?2sti-e also means the a+option *y the Government of meas2res -al-2late+ to ins2re e-onomi- sta*ility of all -omponentelements of so-iety, thro2(h the maintenan-e of a proper e-onomi-an+ so-ial e<2ili*ri2m in the inter)relations of the mem*ers of the-omm2nity. Rep2*li- A-t No. 33# ins2res e-onomi- sta*ility to themem*ers of a reli(io2s se-t, li5e the (lesia ni Cristo, &ho are also-omponent elements of so-iety, for it ins2res se-2rity in theiremployment, not&ithstan+in( their fail2re to ?oin a la*or 2nionhavin( a -lose+ shop a(reement &ith the employer. The A-t alsoa+van-es the proper e-onomi- an+ so-ial e<2ili*ri2m *et&eenla*or 2nions an+ employees &ho -annot ?oin la*or 2nions, for ite'empts the latter from the -ompellin( ne-essity of ?oinin( la*or

2nions that have -lose+ shop a(reements an+ e<2ali7es, in so faras opport2nity to &or5 is -on-erne+, those &hose reli(ion prohi*itsmem*ership in la*or 2nions &ith those &hose reli(ion +oes notprohi*it sai+ mem*ership. So-ial ?2sti-e +oes not imply so-iale<2ality, *e-a2se so-ial ine<2ality &ill al&ays e'ist as lon( asso-ial relations +epen+ on personal or s2*?e-tive pro-livities. So-ial ?2sti-e +oes not re<2ire le(al e<2ality *e-a2se le(al e<2ality, *ein(a relative term, is ne-essarily premise+ on +iIerentiations *ase+ onpersonal or nat2ral -on+itions. So-ial ?2sti-e (2arantees e<2ality of opport2nity , an+ this is pre-isely &hat Rep2*li- A-t No. 33#proposes to a--omplish it (ives la*orers, irrespe-tive of theirreli(io2s s-r2pples, e<2al opport2nity for &or5.

;. As its last (ro2n+, appellant -onten+s that the amen+mentintro+2-e+ *y Rep2*li- A-t No. 33# is not -alle+ for in other&or+s, the A-t is not proper, ne-essary or +esira*le. Anent thismatter, it has *een hel+ that a stat2te &hi-h is not ne-essary isnot, for that reason, 2n-onstit2tional0 that in +eterminin( the-onstit2tional vali+ity of le(islation, the -o2rts are 2n-on-erne+&ith iss2es as to the ne-essity for the ena-tment of the le(islationin <2estion. Co2rts +o in<2ire into the &is+om of la&s. Moreover,le(islat2res, *ein( -hosen *y the people, are pres2me+ to2n+erstan+ an+ -orre-tly appre-iate the nee+s of the people, an+ itmay -han(e the la&s a--or+in(ly. The fear is entertaine+ *y

@

appellant that 2nless the A-t is +e-lare+ 2n-onstit2tional,employers &ill prefer employin( mem*ers of reli(io2s se-ts thatprohi*it their mem*ers from ?oinin( la*or 2nions, an+ th2s *e a

A -lose+)shop a(reement has *een -onsi+ere+ as one form of 2nionse-2rity &here*y only 2nion mem*ers -an *e hire+ an+ &or5ersm2st remain 2nion mem*ers as a -on+ition of -ontin2e+



p ? ( ,fatal *lo& to 2nionism. De +o not a(ree. The threat to 2nionism &ill+epen+ on the n2m*er of employees &ho are mem*ers of thereli(io2s se-ts that -ontrol the +eman+s of the la*or mar5et. 2tthere is really no o--asion no& to (o f2rther an+ anti-ipatepro*lems De -annot ?2+(e &ith the material no& *efore =s. At anyrate, the vali+ity of a stat2te is to *e +etermine+ from its (eneralp2rpose an+ its e8-a-y to a--omplish the en+ +esire+, not from itseIe-ts on a parti-2lar -ase. The essential *asis for the e'er-ise of po&er, an+ not a mere in-i+ental res2lt arisin( from its e'ertion, isthe -riterion *y &hi-h the vali+ity of a stat2te is to *e meas2re+.

:2at v. CR. SCRA 3@ The -ontentions of the petitioner are &itho2t merit, The -lose+)shop proviso in a -olle-tive *ar(ainin( a(reement *et&eenemployer an+ employee is san-tione+ *y la&. The pertinentprovision of the la&, in this -onne-tion, says

Provided, that nothin( in this A-t or in any A-t or stat2te of theRep2*li- of the hilippines shall pre-l2+e an employer from ma5in(

an a(reement &ith a la*or or(ani7ation to re<2ire as a -on+ition of employment mem*ership therein, if s2-h la*or or(ani7ation is therepresentative of the employees as provi+e+ in sai+ se-tion t&elve0... ./ !Se-tion 4, s2*se-tion Ka par. 4 of Rep2*li- A-t No. ;,5no&n as the n+2strial ea-e A-t$.

The vali+ity of a -lose+)shop a(reement has *een 2phel+ *y thisCo2rt. n one parti-2lar -ase this Co2rt hel+

There is no nee+ for 2s to ta5e si+es an+ (ive reasons *e-a2se o2rCon(ress, in the e'er-ise of its poli-y)ma5in( po&er, has -hosen toapprove the -lose+)shop, &hen it le(ali7e+ in Se-. 4, s2*)se-tion!a$ para(raph 4 of Rep2*li- A-t ; !Ma(na Charta of La*or$ /any

a(reement of the employer &ith a la*or or(ani7ation re<2irin(mem*ership in s2-h or(ani7ation as -on+ition of employment,/provi+e+ s2-h la*or or(ani7ation properly represents theemployees !National La*or =nion vs. A(2inal+o1s E-ha(2e, et al.,G.R. No. L);3, May 3, @.$

The fore(oin( prono2n-ement of this Co2rt ha+ *een reiterate+ inthe -ases of Tolentino et al" vs" Angeles et al., G.R. No. L)#,May 3#, @B0 Ang Mala.ang Manggaga%a Ng Ang Tiba. Enter(rises et al" vs" Ang Tiba. et al ., G.R. No. L)"@, e-. "3,@;0 Con'ederated Sons o' Labor vs" Ana-an Lu$ber Co" et al .,G.R. No. L)"#3, April "#, @B#0 #acolod)Murcia Milling Co" et al"vs" National E$(lo.ees 7or-ers Securit. !nion, 3 .G. B.

employment. The re<2irement for employees or &or5ers to *e-omemem*ers of a 2nion as a -on+ition for employment re+o2n+s to the*ene6t an+ a+vanta(e of sai+ employees *e-a2se *y hol+in( o2t toloyal mem*ers a promise of employment in the -lose+)shop the2nion &iel+s (ro2p soli+arity. n fa-t, it is sai+ that /the -lose+)shop-ontra-t is the most pri7e+ a-hievement of 2nionism/ !NationalLa*or =nion vs. A(2inal+o1s)E-ha(2e, n-. et al., su(ra$.

Comin( no& to the -lose+)shop proviso of the -olle-tive *ar(ainin(a(reement *et&een the respon+ent 2la5la5 2*li-ations an+ the2so-ope La*or =nion, it is -learly provi+e+ that /All employeesan+>or &or5ers &ho on :an2ary , @B are not yet mem*ers of the=nion shall, as -on+ition of maintainin( their employment, *e-omemem*ers of s2-h =nion./ The <2estion no& *efore =s is &hetherthe a*ove)<2ote+ proviso of the sai+ -olle-tive *ar(ainin(a(reement applies to the petitioner Santos :2at. The -ontention of sai+ petitioner is that the sai+ proviso -annot apply, an+ sho2l+ not*e applie+ to him *e-a2se he is an ol+ employee of the 2la5la52*li-ations. t is not +isp2te+ that petitioner ha+ *een employe+

&ith the 2la5la5 2*li-ations sin-e @3, an+ the -olle-tive*ar(ainin( a(reement em*o+yin( the -lose+)shop proviso in<2estion &as entere+ into only on e-em*er , @@ an+ amen+e+on e-em*er ";, @B#. t has *een esta*lishe+, ho&ever, that sai+petitioner &as not a mem*er of any la*or 2nion &hen that-olle-tive *ar(ainin( a(reement &as entere+ into, an+ in fa-t heha+ never *een a mem*er of any la*or 2nion.

This Co2rt ha+ -ate(ori-ally hel+ in the -ase of *ree$an Shirt Manu'acturing Co" Inc" et al" vs" Court o' Industrial Relations et al", G.R. No. L)BB, :an. ", @B, that the -lose+)shop proviso of a -olle-tive *ar(ainin( a(reement entere+ into *et&een anemployer an+ a +2ly a2thori7e+ la*or 2nion is appli-a*le not onlyto the employees or la*orers that are employe+ after the -olle-tive*ar(ainin( a(reement ha+ *een entere+ into *2t also to ol+employees &ho are not mem*ers of any la*or 2nion at the time thesai+ -olle-tive *ar(ainin( a(reement &as entere+ into. n other&or+s, if an employee or la*orer is alrea+y a mem*er of a la*or2nion +iIerent from the 2nion that entere+ into a -olle-tive*ar(ainin( a(reement &ith the employer provi+in( for a -lose+)shop, sai+ employee or &or5er -annot *e o*li(e+ to *e-ome amem*er of that 2nion &hi-h ha+ entere+ into a -olle-tive*ar(ainin( a(reement &ith the employer as a -on+ition for his-ontin2e+ employment. This Co2rt in that 9reeman -ase ma+e this

@"

-lear prono2n-ement

The -lose+)shop a(reement a2thori7e+ 2n+er Se-. 4 s2*)se-. a !4$of the n+2strial ea-e A-t a*ove)<2ote+ sho2l+ ho&ever apply

-olle-tive *ar(ainin( a(reement in <2estion &as entere+ into he-o2l+ *e o*li(e+ *y the respon+ent 2la5la5 2*li-ations to*e-ome a mem*er of the 2so-ope La*or =nion. An+ *e-a2se



of the n+2strial ea-e A-t a*ove)<2ote+ sho2l+, ho&ever, applyonly to persons to *e hire+ or to employees %ho are not .et $e$bers o' an. labor organi+ation" It is ina((licable to thosealread. in the service %ho are $e$bers o' another union" To hol+other&ise, i.e., that the employees in a -ompany &ho are mem*ersof a minority 2nion may *e -ompelle+ to +isa8liate from their2nion an+ ?oin the ma?ority or -ontra-tin( 2nion, &o2l+ ren+ern2(atory the ri(ht of all employees to self)or(ani7ation an+ to

form, ?oint or assist la*or or(ani7ations of their o&n -hoosin(, ari(ht (2arantee+ *y the n+2strial ea-e A-t !se-. 3, Rep. A-t No.;$ as &ell as *y the Constit2tion !Art. , see. KB$.

Se-tion " of the n+2strial ea-e A-t, provi+in( that &hen there isreasona*le +o2*t as to &ho the employees have -hosen as theirrepresentative the n+2strial Co2rt -an or+er a -erti6-ationele-tion, &o2l+ also *e-ome 2seless. 9or on-e a 2nion has *een-erti6e+ *y the -o2rt an+ enters into a -olle-tive *ar(ainin(a(reement &ith the employer a -lose+)shop -la2se appli-a*le to allemployees *e they 2nion or non)2nion mem*ers, the <2estion of ma?ority representation amon( the mem*ers &o2l+ *e -lose+forever. Certainly, there -an no lon(er e'ist any petition for-erti6-ation ele-tion, sin-e event2ally the ma?ority or -ontra-tin(

2nion &ill *e-ome a perpet2al la*or 2nion. This alarmin( res2lt-o2l+ not have *een the intention of Con(ress. The n+2strialea-e A-t &as ena-te+ pre-isely for the promotion of 2nionism inthis -o2ntry. !Emphasis s2pplie+$

The a*ove)<2ote+ r2lin( &as rea8rme+ *y this Co2rt in its +e-isionin the -ase of *indla. Miller Ti$ber Co" vs" PLASL! et al ., G.R. Nos.L)"; U L)""", Sept. "@, @B".

t sho2l+ *e +e-lare+, therefore, as a settle+ +o-trine, that the-lose+)shop proviso of a -olle-tive *ar(ainin( a(reement entere+into *et&een an employer an+ a +2ly a2thori7e+ la*or 2nionapplies, an+ sho2l+ *e applie+, to ol+ employees or &or5ers &ho

are non)mem*ers of any la*or 2nion at the time the -olle-tive*ar(ainin( a(reement &as entere+ into. n other &or+s, the ol+employees or &or5ers -an *e o*li(e+ *y his employer to ?oin thela*or 2nion &hi-h ha+ entere+ into a -olle-tive *ar(ainin(a(reement that provi+es for a -lose+)shop as a -on+ition for his-ontin2an-e in his employment, other&ise his ref2sal to ?oin the-ontra-tin( la*or 2nion &o2l+ -onstit2te a ?2sti6a*le *asis for his+ismissal.

t *ein( esta*lishe+ *y the evi+en-e that petitioner Santos :2at,altho2(h an ol+ employee of the respon+ent 2la5la5 2*li-ations,&as not a mem*er of any la*or 2nion at the time &hen the

ppetitioner ref2se+ to ?oin the 2so-ope La*or =nion respon+ent2la5la5 2*li-ations &as ?2sti6e+ in +ismissin( him from theservi-e on the (ro2n+ that he ha+ ref2se+ to ?oin sai+ 2nion.

Manila Cor+a(e Co. v. CR ; SCRA 3@e-isions of Ameri-an fe+eral an+ state -o2rts as &ell as the-omments of re-o(ni7e+ Ameri-an treatise &riters 2niformly +e6nea maintenan-e)of)mem*ership provision as one &hi-h re<2ires allemployees &ho are alrea+y mem*ers of the 2nion at the time theprovision ta5es eIe-t to remain s2-h mem*ers +2rin( the lifethereof )is a -on+ition of -ontin2e+ employment. !NLR vs. EatonMf(. Co. KBth Cir. @4@; 9"+ "@", B La* Cas ;, ;B0 Mar5hamU Callo& vs. nternational Doo+&or5ers, ; "+ ;";, ;# or ;K@430 Dalter vs. State, 3 Sol+ B#@, 34 AlaApp "B K@4@0Colonial ress vs. Ellis ;4 NE"+ , 3" Mass 4@0 Rothen*er( onLa*or Relations, 4@)#0 Mathe&s La*or Relations an+ the La& 440renti-e)Hall La*or Co2rse, ar. ", "#4, also at @40 3 CCH La*orLa& Reporter KLa*or Relations, at. 4"#. $

t is not ne-essary to -onsi+er Ameri-an ?2rispr2+en-e. The iss2e of &hether or not the so)-alle+ /maintenan-e)of mem*ership/ -la2sere<2ires all employees &ho &ere alrea+y mem*ers of the Man-oLa*or =nion at the time the sai+ -la2se too5 eIe-t to remainmem*ers of the 2nion +2rin( the life of the -olle-tion *ar(ainin(a(reement as a -on+ition of -ontin2e+ employment may *eresolve+ 2n+er the -onstit2tion an+ relevant hilippine ?2rispr2+en-e.

t is a fa-t that the -omplainants &ere employees of the ManilaCor+a(e Company an+ mem*ers of the Man-o La*or =nion &henthe follo&in( stip2lation &as in-l2+e+ in the -olle-tive *ar(ainin(

a(reementF MANTENANCE 9 MEMERSH

oth parties a(ree that all employees of the CMAN &ho arealrea+y mem*ers of the =NN at the time of the si(nin( of thisAGREEMENT shall -ontin2e to remain mem*ers of the =NN forthe +2ration) of this AGREEMENT/ !E'hi*its 1)1 an+ 1B)1 Company$.

The fore(oin( stip2lation, ho&ever, +oes not -learly state thatmaintenan-e of mem*ership in the Man-o La*or =nion is a-on+ition of -ontin2o2s employment in the Manila La*or Cor+a(eCompany.

@3

n -onsonan-e &ith the r2lin( in Con'ederated Sons o' Labor vs" Ana-an Lu$ber Co" et al" , #; hil. @, in or+er that the ManilaCor+a(e Company may *e +eeme+ *o2n+ to +ismiss employees

h + t i t i th i * hi i th M L * = i

The respon+ent Co2rt of n+2strial Relations -orre-tly fo2n+ thatthe +isp2te+ /maintenan-e)of)mem*ership/ -la2se in <2estion +i+not (ive the Manila Cor+a(e Company the ri(ht to +ismiss ?2st



&ho +o not maintain their mem*ership in the Man-o La*or =nion,the stip2lation to this eIe-t m2st *e so -lear as to leave no roomfor +o2*t thereon An 2n+erta5in( of this nat2re is so harsh that itm2st *e stri-tly -onstr2e+ an+ +o2*ts m2st *e resolve+ a(ainstthe e'isten-e of the ri(ht to +ismiss.

Apparently a&are of the +e6-ien-y of the maintenan-e) of mem*ership -la2se, the petitioner 2r(es that the same sho2l+ *e

-onstr2e+ to(ether &ith the /Dhereas/ provision of the -ontra-t&hi-h rea+s

DHEREAS, the parties hereto nave +e-i+e+ to enter into ana(reement relatin( to the terms an+ -on+itions of employment an+referen-e to those employees to &hom ; the provisions of thisAGREEMENT apply./ !E'hi*its 1)A1 an+ 1)A)Company$

Anent this point, the Co2rt of n+2strial Relations thro2(h 1:2+(eAman+o 2(ayon( r2le+

2t &hether rea+ +is?2n-tively or -on?2n-tively, these t&oprovisions &o2l+ not ?2stify the interpretation &hi-h respon+ent-ompany &o2l+ &ant to attri*2te to the same. 9or sai+ &hereas1proviso neither refers to ten2re of +2ration of employment &hi-h istile iss2e in the -ase at *ar *2t only to terms an+ -on+itions of employment s2-h as &or5in( ho2rs. &a(es, other *ene6ts an+privile(es -learly spe-i6e+ therein. De nee+ not stret-h o2rima(ination too far to 5no& the +iIeren-e *et&een or +2ration of employment from terms an+ -on+itions of employment. esi+eseven on the ass2mption that 1terms an+ -on+itions of employment1-overs -ontin2ity or perio+ of employment, the am*i(2ity of theprovision sho2l+ not a+versely aIe-t -omplainants. Hen-e, even&ith the -on?2-tive interpretation, these t&o provisions -an nots2pplant the omission of an+ sai+ maintenan-e of mem*ership-la2se, let alone -2re the a-t of the same This is espe-ially so if ther2le &hi-h states that in -ase of in-onsisten-y a parti-2larprovision li5e the +isp2te+ maintenan-e of mem*ership -la2se

prevails over or -ontrols a (eneral provision, s2-h as 1DHEREAS1proviso, invo5e+ *y respon+ents, is to *e applie+ to theinterpretation of this +o2*tf2l provision !R2le 3#!4$, Se-tion #,Ne& R2les of Co2rt$.

To -onstr2e the stip2lations a*ove)<2ote+ as imposin( as a-on+ition to -ontin2e+ employment in the Manila Cor+a(eCompany the maintenan-e of mem*ership in the Man-o La*or=nion is to violate the nat2ral an+ -onstit2tional ri(ht of the la*orerto or(ani7e freely. S2-h interpretation &o2l+ *e in-onsistent &iththe -onstit2tional man+ate that the State shall aIor+ prote-tion tola*or.

( ( p y ( ?*e-a2se they resi(ne+ as mem*ers of the Man-o La*or =nion.

There is a sho&in( that the +ismisse+ -omplainants so2(ht o2rs2*stantially e<2ivalent an+ re(2lar employment. They faile+ to6n+ any.

The -ontention n of the petitioners that they a-te+ in (oo+ faith in+ismissin( the -omplainants an+, therefore, sho2l+ not *e 6el+

lia*le to pay their *a-5 &a(es has no merit. The +ismissal of the-omplainants *y the petitioners &as pre-ipitate an+ +one &ith2n+2e haste. Consi+erin( that the so)-alle+ /maintenan-e tomem*ership1 -la2se +i+ it -learly the petitioners the ri(ht to+ismiss the -omplainants if sai+ -omplainants +i+ not maintaintheir mem*ership in the Man-o La*or =nion, the petitioners sho2l+have raise+ the iss2e *efore the Co2rt of n+2strial Relations in apetition for permission to +ismiss the -omplainants.

@4

BAR1AI,I,1 <,I*

S Mi l C L "3B SCRA @

&'t.)&ve !$ e$(lo.ees. S2rely, it &o2l+ not *e for the *estinterest of these employees if they &o2l+ f2rther *e fra-tionali7e+.The a+a(e /there is stren(th in n2m*er/ is the very rationale



San Mi(2el Corp. v. La(2esma, "3B SCRA @A bargaining unit is a /(ro2p of employees of a (iven employer,-omprise+ of all or less than all of the entire *o+y of employees,-onsistent &ith e<2ity to the employer, in+i-ate to *e the *ests2ite+ to serve the re-ipro-al ri(hts an+ +2ties of the parties 2n+erthe -olle-tive *ar(ainin( provisions of the la&./

The f2n+amental fa-tors in +eterminin( the appropriate -olle-tive*ar(ainin( 2nit are !$ the &ill of the employees !Glo*eo-trine$0 !"$ a8nity an+ 2nity of the employees1 interest, s2-h ass2*stantial similarity of &or5 an+ +2ties, or similarity of -ompensation an+ &or5in( -on+itions !S2*stantial M2t2al nterestsR2le$0 !3$ prior -olle-tive *ar(ainin( history0 an+ !4$ similarity of employment stat2s.

Contrary to petitioner1s assertion, this Co2rt has -ate(ori-ally r2le+that the e'isten-e of a prior -olle-tive *ar(ainin( history is neither decisive nor conclusive in the +etermination of &hat -onstit2tes anappropriate *ar(ainin( 2nit.

n+ee+, the test of (ro2pin( is $utualit. or co$$onalit. o' interests. The employees so2(ht to *e represente+ *y the-olle-tive *ar(ainin( a(ent m2st have s2*stantial m2t2al interestsin terms of employment an+ &or5in( -on+itions as evin-e+ *y thetype of &or5 they perform.

n the -ase at *en-h, respon+ent 2nion so2(ht to represent thesales personnel in the vario2s Ma(nolia sales o8-es in northernL27on. There is similarity of employment stat2s for only the re(2larsales personnel in the north L27on area are -overe+. They have thesame +2ties an+ responsi*ilities an+ s2*stantially similar-ompensation an+ &or5in( -on+itions. The -ommonality of interest

amon( the sales personnel in the north L27on sales area -annot *e(ainsai+. n fa-t, in the -erti6-ation ele-tion hel+ on Novem*er "4,@@#, the employees -on-erne+ a--epte+ respon+ent 2nion astheir e'-l2sive *ar(ainin( a(ent. Clearly, they have e'presse+ their+esire to *e one.

etitioner -annot insist that ea-h of the sales o8-e of Ma(noliasho2l+ -onstit2te only one *ar(ainin( 2nit. Dhat (reatly militatesa(ainst this position is the $eager nu$ber o' sales (ersonnel ineach o' the Magnolia sales oce in northern Lu+on. Even the*ar(ainin( 2nit so2(ht to *e represente+ *y respon+ent 2nion inthe entire north L27on sales area -onsists only of appro'imately

The a+a(e there is stren(th in n2m*er is the very rationale2n+erlyin( the formation of a la*or 2nion.

n the -ase at *en-h, petitioner insists that ea-h of the sales o8-esin northern L27on sho2l+ *e -onsi+ere+ as a separate *ar(ainin(2nit for ne(otiations &o2l+ *e more e'pe+itio2s. etitionero*vio2sly -hooses to follo& the path of least resistan-e. t is not,ho&ever, the -onvenien-e of the employer that -onstit2tes the

+eterminative fa-tor in formin( an appropriate *ar(ainin( 2nit.E<2ally, if not more important, is the interest of the employees. n-hoosin( an+ -raftin( an appropriate *ar(ainin( 2nit, e'treme -aresho2l+ *e ta5en to prevent an employer from havin( any 2n+2ea+vanta(e over the employees1 *ar(ainin( representative. 2r&or5ers are &ea5 eno2(h an+ it is not o2r so-ial poli-y to f2rther+e*ilitate their *ar(ainin( representative.

n s2m, &e 6n+ that no ar*itrariness or (rave a*2se of +is-retion-an *e attri*2te+ to p2*li- respon+ents -erti6-ation of respon+ent2nion as the sole an+ e'-l2sive *ar(ainin( a(ent of all the re(2larMa(nolia sales personnel of the north L27on sales area.

=niversity of the hilippines v. 9errer)Calle?a,

" SCRA 42r la*or la&s +o not ho&ever provi+e the -riteria for +eterminin(the proper -olle-tive *ar(ainin( 2nit. Se-tion " of the ol+ la&,Rep2*li- A-t No. ; other&ise 5no&n as the n+2strial ea-e A-t,simply rea+s as follo&s

Se-. ". E2clusive Collective #argaining Re(resentation 'or Labor /rgani+ations. The la*or or(ani7ation +esi(nate+ or sele-te+ forthe p2rpose of -olle-tive *ar(ainin( *y the ma?ority of theemployees in an appropriate -olle-tive *ar(ainin( 2nit shall *e the

e'-l2sive representative of all the employees in s2-h 2nit for thep2rpose of -olle-tive *ar(ainin( in respe-t to rates of pay, &a(es,ho2rs of employment, or other -on+itions of employment0 Provided, That any in+ivi+2al employee or (ro2p of employees shall have the ri(ht at any time to present (rievan-esto their employer.

Altho2(h sai+ Se-tion " of the n+2strial ea-e A-t &ass2*se<2ently in-orporate+ into the La*or Co+e &ith minor -han(es,no (2i+elines &ere in-l2+e+ in sai+ Co+e for +etermination of anappropriate *ar(ainin( 2nit in a (iven -ase. Th2s, apart from thesin(le +es-riptive &or+ /appropriate,/ no spe-i6- (2i+e for+eterminin( the proper -olle-tive *ar(ainin( 2nit -an *e fo2n+ in

@

the stat2tes.

Even E'e-2tive r+er No. # alrea+y a+verte+ to is not m2-h help.All it says in its Se-tion @ is that /!t$he appropriate or(ani7ational

permanent employees an+ another -onsistin( of -as2al la*orers orsteve+ores.

Sin-e then the co$$unit. or $utualit. o' interests test has



All it says, in its Se-tion @, is that !t$he appropriate or(ani7ational2nit shall *e the employer 2nit -onsistin( of ran5)an+)6leemployees, 2nless -ir-2mstan-es other&ise re<2ire./ Case la&fort2nately f2rnishes some (2i+elines.

Dhen 6rst -onfronte+ &ith the tas5 of +eterminin( the proper-olle-tive *ar(ainin( 2nit in a parti-2lar -ontroversy, the Co2rt ha+perfor-e to rely on Ameri-an ?2rispr2+en-e. n De$ocratic Labor

Association vs" Cebu Stevedoring Co$(an. Inc" +e-i+e+ on9e*r2ary ", @, the Co2rt o*serve+ that /the iss2e of ho& to+etermine the proper -olle-tive *ar(ainin( 2nit an+ &hat 2nit&o2l+ *e appropriate to *e the -olle-tive *ar(ainin( a(en-y/ . . . /isnovel in this ?2ris+i-tion0 ho&ever, Ameri-an pre-e+ents on thematter a*o2n+ . . !to &hi-h resort may *e ha+$ -onsi+erin( that o2rpresent Ma(na Carta has *een patterne+ after the Ameri-an la& onthe s2*?e-t./ Sai+ the Co2rt

An enli(htenin( appraisal of the pro*lem of +e6nin( an appropriate*ar(ainin( 2nit is (iven in the #th Ann2al Report of the NationalLa*or Relations oar+ &herein it is emphasi7e+ that the fa-tors&hi-h sai+ *oar+ may -onsi+er an+ &ei(h in 6'in( appropriate2nits are the history, e'tent an+ type of or(ani7ation of employees0 the history of their -olle-tive *ar(ainin(0 the history,e'tent an+ type of or(ani7ation of employees in other plants of thesame employer, or other employers in the same in+2stry0 the s5ill,&a(es, &or5, an+ &or5in( -on+itions of the employees0 the +esiresof the employees0 the eli(i*ility of the employees for mem*ershipin the 2nion or 2nions involve+0 an+ the relationship *et&een the2nit or 2nits propose+ an+ the employer1s or(ani7ation,mana(ement, an+ operation. . . .

. . n sai+ report, it is li5e&ise emphasi7e+ that the *asi- test in+eterminin( the appropriate *ar(ainin( 2nit is that a 2nit, to *eappropriate, m2st aIe-t a (ro2pin( of employees &ho have

s2*stantial, m2t2al interests in &a(es, ho2rs, &or5in( -on+itionsan+ other s2*?e-ts of -olle-tive *ar(ainin( !-itin( Smith on La*orLa&s, 3B)3;0 9ran-is-o, La*or La&s, B"$. . . .

The Co2rt f2rther e'plaine+ that /!t$he test of the (ro2pin( is-omm2nity or m2t2ality of interests. An+ this is so *e-a2se 1the*asi- test of an asserte+ *ar(ainin( 2nit1s a--epta*ility is &hetheror not it is f2n+amentally the -om*ination &hi-h &ill *est ass2re toall employees the e'er-ise of their -olle-tive *ar(ainin( ri(hts1!Rothen*er( on La*or Relations, 4@#$./ Hen-e, in that -ase, theCo2rt 2phel+ the trial -o2rt1s -on-l2sion that t&o separate*ar(ainin( 2nits sho2l+ *e forme+, one -onsistin( of re(2lar an+

Sin-e then, the co$$unit. or $utualit. o' interests test hasprovi+e+ the stan+ar+ in +eterminin( the proper -onstit2en-y of a-olle-tive *ar(ainin( 2nit. n Alha$bra Cigar 8 CigaretteManu'acturing Co$(an. et al" vs" Alha$bra E$(lo.eesB Association PA*L! #; hil. "3, the Co2rt, notin( that theemployees in the a+ministrative, sales an+ +ispensary +epartmentsof a -i(ar an+ -i(arette man2fa-t2rin( 6rm perform &or5 &hi-h

have nothin( to +o &ith pro+2-tion an+ maintenan-e, 2nli5e thosein the ra& lea+ !malalasi$, -i(ar, -i(arette, pa-5in( !pre-intera$ an+en(ineerin( an+ (ara(e +epartments, a2thori7e+ the formation of the former set of employees into a separate -olle-tive *ar(ainin(2nit. The r2lin( in the De$ocratic Labor Association -ase, su(ra,&as reiterate+ in Phili((ine Land)Air)Sea Labor !nit vs" Court o' Industrial Relations, # hil. ;B, &here -as2al employees &ere*arre+ from ?oinin( the 2nion of the permanent an+ re(2laremployees.

Applyin( the same /-omm2nity or m2t2ality of interests/ test, *2tres2ltin( in the formation of only one -olle-tive *ar(ainin( 2nits isthe -ase of National Association o' *ree Trade !nions vs" Mainit Lu$ber Develo($ent Co$(an. 7or-ers !nion)!nited Lu$ber and3eneral 7or-ers o' the Phils" G.R. No. ;@"B, e-em*er ", @@#,@" SCRA @. n sai+ -ase, the Co2rt or+ere+ the formation of asin(le *ar(ainin( 2nit -onsistin( of the Sa&mill ivision in 2t2anCity an+ the Lo((in( ivision in Oapanta Falley, Pit-harao, A(2sanNorte of the Mainit L2m*er evelopment Company. The Co2rtreasone+

Certainly, there is a m2t2ality of interest amon( the employees of the Sa&mill ivision an+ the Lo((in( ivision. Their f2n-tionsmesh &ith one another. ne (ro2p nee+s the other in the same&ay that the -ompany nee+s them *oth. There may *e +iIeren-eas to the nat2re of their in+ivi+2al assi(nments *2t the +istin-tionsare not eno2(h to &arrant the formation of a separate *ar(ainin(2nit.

n the -ase at *ar, the =niversity employees may, as alrea+ys2((este+, <2ite easily *e -ate(ori7e+ into t&o (eneral-lasses one, the (ro2p -ompose+ of employees &hose f2n-tionsare non)a-a+emi-, i"e", ?anitors, messen(ers, typists, -ler5s,re-eptionists, -arpenters, ele-tri-ians, (ro2n+s)5eepers, -ha2Ie2rs,me-hani-s, pl2m*ers0 an+ t%o, the (ro2p ma+e 2p of thoseperformin( a-a+emi- f2n-tions, i"e", f2ll professors, asso-iateprofessors, assistant professors, instr2-tors &ho may *e ?2+(es

@B

or (overnment e'e-2tives an+ resear-h, e'tension an+professorial staI. Not m2-h reQe-tion is nee+e+ to per-eive thatthe -omm2nity or m2t2ality of interests &hi-h ?2sti6es thef i f i l ll i * i i i i i *

monthly pai+ ran5)an+)6le employees have even *een e'-l2+e+from the *ar(ainin( 2nit of the +aily pai+ ran5)an+)6le employees. This +issimilarity of interests &arrants the formation of a separate

+ +i i * i i i f h hl i+ 5 + 6l



formation of a sin(le -olle-tive *ar(ainin( 2nit is &antin( *et&eenthe a-a+emi- an+ non)a-a+emi- personnel of the 2niversity. t&o2l+ seem o*vio2s that tea-hers &o2l+ 6n+ very little in -ommon&ith the =niversity -ler5s an+ other non)a-a+emi- employees asre(ar+s responsi*ilities an+ f2n-tions, &or5in( -on+itions,-ompensation rates, so-ial life an+ interests, s5ills an+ intelle-t2alp2rs2its, -2lt2ral a-tivities, et-. n the -ontrary, the +i-hotomy of

interests, the +issimilarity in the nat2re of the &or5 an+ +2ties as&ell as in the -ompensation an+ &or5in( -on+itions of thea-a+emi- an+ non)a-a+emi- personnel +i-tate the separation of these t&o -ate(ories of employees for p2rposes of -olle-tive*ar(ainin(. The formation of t&o separate *ar(ainin( 2nits, the 6rst-onsistin( of the ran5)an+)6le non)a-a+emi- personnel, an+ these-on+, of the ran5)an+)6le a-a+emi- employees, is the set)2p that&ill *est ass2re to all the employees the e'er-ise of their -olle-tive*ar(ainin( ri(hts. These spe-ial -ir-2mstan-es, i"e", the +i-hotomyof interests an+ -on-erns as &ell as the +issimilarity in the nat2rean+ -on+itions of &or5, &a(es an+ -ompensation *et&een thea-a+emi- an+ non)a-a+emi- personnel, *rin( the -ase at *ar &ithin

the e'-eption -ontemplate+ in Se-tion @ of E'e-2tive r+er No.#. t &as (rave a*2se of +is-retion on the part of the La*orRelations ire-tor to have r2le+ other&ise, i(norin( plain an+patent realities.

Gol+en 9arms v. Se-retary, "34 SCRA ; The monthly pai+ o8-e an+ te-hni-al ran5)an+)6le employees of petitioner Gol+en 9arms en?oy the -onstit2tional ri(ht to self)or(ani7ation an+ -olle-tive *ar(ainin(. The -omm2nity or m2t2alityof interest is therefore the essential -riterion in the (ro2pin(. /An+this is so *e-a2se 1the *asi- test of an asserte+ *ar(ainin( 2nit1sa--epta*ility is &hether or not it is f2n+amentally the -om*ination&hi-h &ill *est ass2re to all employees the e'er-ise of their-olle-tive *ar(ainin( ri(hts.1

n the -ase at *en-h, the evi+en-e esta*lishe+ that the monthlypai+ ran5)an+)6le employees of petitioner primarily performa+ministrative or -leri-al &or5. n -ontra+istin-tion, the petitioner1s+aily pai+ ran5)an+)6le employees mainly &or5 in the -2ltivation of *ananas in the 6el+s. t is -rystal -lear the monthly pai+ ran5)an+)6le employees of petitioner have very little in -ommon &ith its +ailypai+ ran5)an+)6le employees in terms of +2ties an+ o*li(ations,&or5in( -on+itions, salary rates, an+ s5ills. To *e s2re, the sai+

an+ +istin-t *ar(ainin( 2nit for the monthly pai+ ran5)an+)6leemployees of the petitioner. To r2le other&ise &o2l+ +eny this+istin-t -lass of employees the ri(ht to self)or(ani7ation forp2rposes of -olle-tive *ar(ainin(. Ditho2t the shiel+ of anor(ani7ation, it &ill also e'pose them to the e'ploitations of mana(ement.

etitioner ne't -onten+s that these monthly pai+ o8-e an+te-hni-al employees are mana(erial employees. They alle(e+lyin-l2+e those in the a--o2ntin( an+ personnel +epartment, -ashier,an+ other employees hol+in( positions &ith a--ess to -lassi6e+information.

De are not pers2a+e+. Arti-le "", para(raph !m$ of the La*orCo+e, as amen+e+, +e6nes as mana(erial employee as follo&s

/Mana(erial employee/ is one &ho is veste+ &ith po&er orprero(atives to lay +o&n an+ e'e-2te mana(ement poli-ies an+>orto hire, transfer, s2spen+, lay)oI, re-all, +is-har(e, assi(n or+is-ipline employees. S2pervisory employees are those &ho, in theinterest of the employer, eIe-tively re-ommen+ s2-h mana(eriala-tions if the e'er-ise of s2-h a2thority is not merely ro2tinary or-leri-al in nat2re *2t re<2ires the 2se of in+epen+ent ?2+(ment. Allemployees not fallin( &ithin any of the a*ove +e6nitions are-onsi+ere+ ran5)an+)6le employees for p2rposes of this oo5.

Given this +e6nition, the monthly pai+ o8-e an+ te-hni-alemployees, a--o2ntants, an+ -ashiers of the petitioner are notmana(erial employees for they +o not parti-ipate in poli-y)ma5in(*2t are (iven -2t o2t poli-ies to e'e-2te an+ stan+ar+ pra-ti-es too*serve. n the main, the +is-har(e of their +2ties +oes not involvethe 2se of in+epen+ent ?2+(ment. As fa-t2ally fo2n+ *y the Me+)Ar*iter, to &it

A per2sal of the list of the o8-e an+ te-hni-al employees so2(ht to*e represente+ in the instant -ase, &ith their -orrespon+in(+esi(nation +oes not sho& that sai+ 8-e an+ Te-hni-alemployees e'er-ises s2pervisory or mana(erial f2n-tions.

The o8-e *elieves an+ so hol+ that the employees &hose namesappear in the /Masterlist of 8-e an+ Te-hni-al Employees/s2*mitte+ +2rin( the hearin( are eli(i*le to ?oin>form a la*oror(ani7ation of their o&n -hoi-e.

@;

Me-hani-al epartment La*or =nion sa NR v.

CR, "4 SCRA @"

+is-ipline employees, or to eIe-tively re-ommen+ s2-h mana(eriala-tions. All employees not fallin( &ithin this +e6nition are-onsi+ere+ ran5 an+ 6le employees for p2rposes of this oo5.



De 6n+ no (rave a*2se of +is-retion in the iss2an-e of the r2lin(2n+er appeal as &o2l+ ?2stify o2r interferin( &ith it. Rep2*li- A-tNo. ; has primarily entr2ste+ the prose-2tion of its poli-ies tothe Co2rt of n+2strial Relations, an+, in vie& of its intimate5no&le+(e -on-ernin( the fa-ts an+ -ir-2mstan-es s2rro2n+in( the-ases *ro2(ht *efore it, this Co2rt has repeate+ly 2phel+ thee'er-ise of +is-retion of the Co2rt of n+2strial Relations in matters-on-ernin( the representation of employee (ro2ps !Manila aperMills Employees U Dor5ers1 Asso-iation vs. C..R. #4 hil. #0en(2et Consoli+ate+ vs. o*o5 L2m*er :a-5 Asso-iation, #3 hil.#$.

Appellant -onten+s that the appli-ation of the /Glo*e +o-trine/ isnot &arrante+ *e-a2se the &or5ers of the Caloo-an shops +o notre<2ire +iIerent s5ills from the rest of the &or5ers in theMe-hani-al epartment of the Rail&ay Company. This <2estion isprimarily one of fa-ts. The n+2strial Co2rt has fo2n+ that there is a*asi- +iIeren-e, in that those in the Caloo-an shops not only havea -omm2nity of interest an+ &or5in( -on+itions *2t perform ma?or

repairs of rail&ay rollin( sto-5, 2sin( heavy e<2ipment an+ma-hineries fo2n+ in sai+ shops, &hile the others only performminor repairs. t is easy to 2n+erstan+, therefore, that the &or5ersin the Caloo-an shops re<2ire spe-ial s5ill in the 2se of heavye<2ipment an+ ma-hinery s28-ient to set them apart from the restof the &or5ers. n a++ition, the re-or+ sho&s that the -olle-tive*ar(ainin( a(reements ne(otiate+ *y the appellant 2nion have*een in e'isten-e for more than t&o !"$ years0 hen-e, s2-ha(reements -an not -onstit2te a *ar to the +etermination, *yproper ele-tions, of a ne& *ar(ainin( representative !LTEmployees1 =nion vs. hilippine Lon( istan-e Telephone Co., I. Ga7., 4@$.

hiltran-o Servi-es Enterprises v. LR, ;4

SCRA 3 The La*or Co+e re-o(ni7es t&o !"$ prin-ipal (ro2ps of employees,namely, the mana(erial an+ the ran5 an+ 6le (ro2ps. Th2s, Art. ""!5$ of the Co+e provi+es

''' ''' '''

!5$ Mana(erial employee1 is one &ho is veste+ &ith po&ers orprero(atives to lay +o&n an+ e'e-2te mana(ement poli-ies an+>orto hire, transfer, s2spen+, lay)oI, re-all, +is-har(e, assi(n or

n implementation of the afore<2ote+ provision of the la&, Se-tion of R2le , oo5 F of the mni*2s R2les implementin( the La*orCo+e +i+ a&ay &ith e'istin( s2pervisors1 2nions -lassifyin( themem*ers either as mana(erial or ran5 an+ 6le employees+epen+in( on the &or5 they perform. f they +is-har(e mana(erialf2n-tions, s2pervisors are prohi*ite+ from formin( or ?oinin( anyla*or or(ani7ation. f they +o not perform mana(erial &or5, theymay ?oin the ran5 an+ 6le 2nion an+ if none e'ists, they may formone s2-h ran5 an+ 6le or(ani7ation. This r2le &as emphasi7e+ inthe -ase of 2lletin 2*lishin( Corp. v. San-he7, !44 SCRA B"K@B$.

t, therefore, follo&s that the mem*ers of the PASAMA P &ho areprofessional, te-hni-al, a+ministrative an+ -on6+ential personnel of HLTRANC performin( mana(erial f2n-tions are not <2ali6e+ to ?oin, m2-h less form a 2nion. This rationali7es the e'-l2sion of mana(ers an+ -on6+ential employees e'er-isin( mana(erialf2n-tions from the am*it of the -olle-tive *ar(ainin( 2nit. As-orre-tly o*serve+ *y Me+)Ar*iter A+ap

... mana(erial an+ -on6+ential employees &ere e'pressly e'-l2+e+&ithin the operational am*it of the *ar(ainin( 2nit for the simplereason that 2n+er the la&, mana(ers are +is<2ali6e+ to *emem*ers of a la*or or(ani7ation.

n the other han+, -on6+ential &or5ers &ere not in-l2+e+ *e-a2seeither they &ere performin( mana(erial f2n-tions an+>or their+2ties an+ responsi*ilities &ere -onsi+ere+ or may *e -ate(ori7e+as part an+ par-el of mana(ement as the primary reason for theire'-l2sion in the *ar(ainin( 2nit. The other -ate(ori7e+ employees&ere li5e&ise not in-l2+e+ *e-a2se parties have a(ree+ on the fa-tthat the aforementione+ (ro2p of &or5ers are not <2ali6e+ to ?oin ala*or or(ani7ation at the time the a(reement &as e'e-2te+ an+

that they &ere -lassi6e+ as o2tsi+e the parameter of the*ar(ainin( 2nit. !Rollo, pp. ")"@$

There is no -onQi-t. The employees of hiltran-o have *eenappraise+ an+ their f2n-tions eval2ate+. Mana(ers *y any namemay not ?oin the ran5 an+ 6le 2nion. n the other han+, those &hoare ran5 an+ 6le &or5ers may ?oin the e'istin( *ar(ainin( 2nitinstea+ of or(ani7in( another *ar(ainin( 2nit an+ -ompellin( theemployer to +eal &ith it.

De are -onstraine+ to +isallo& the formation of another 2nion. There is no +isp2te that there e'ists a la*or 2nion in the -ompany,

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herein intervenor, the NAMAD=)M9 &hi-h is the -olle-tive*ar(ainin( a(ent of the ran5 an+ 6le employees in HLTRANC.

Arti-le " of the Colle-tive ar(ainin( A(reement *et&een

nee+less prof2sion. Dhere shall the line *e +ra&nW The <2estione++e-ision of the p2*li- respon+ent -an only lea+ to -onf2sion,+is-or+ an+ la*or strife.



Arti-le " of the Colle-tive ar(ainin( A(reement *et&eenHLTRANC an+ NAMAD=)M9 2n+er the s2*)title Appropriatear(ainin( =nit provi+es

Se-tion )The appropriate *ar(ainin( 2nit -overe+ *y thisa(reement -onsists of all re(2lar ran5) an+ 6le employees of the-ompany. Mana(erial, -on6+ential, -as2als, temporary,pro*ationary an+ -ontra-t2al employees as &ell as trainees,

apprenti-es, se-2rity personnel an+ foreman are e'-l2+e+ from the*ar(ainin( 2nit an+ therefore, not -overe+ *y this AGREEMENT. The ?o* +es-ription o2tsi+e the *ar(ainin( 2nit are en2merate+ in thelist hereto atta-he+ as Anne' 11 an+ ma+e an inte(ral part hereof !Emphasis s2pplie+0 Rollo, p. ";$

De see no nee+ for the formation of another 2nion in HLTRANC. The <2ali6e+ mem*ers of the PASAMA P may ?oin the NAMAD=)M9 if they &ant to *e 2nion mem*ers, an+ to *e -onsistent &iththe one)2nion, one)-ompany poli-y of the epartment of La*or an+Employment, an+ the la&s it enfor-es. As hel+ in the -ase of General R2**er an+ 9oot&ear Corp. v. 2rea2 of La*or Relations! SCRA "3 K@;$

... t has *een the poli-y of the 2rea2 to en-o2ra(e the formationof an employer 2nit 12nless -ir-2mstan-es other&ise re<2ire. Theproliferation of 2nions in an employer 2nit is +is-o2ra(e+ as amatter of poli-y 2nless there are -ompellin( reasons &hi-h &o2l++eny a -ertain -lass of employees the ri(ht to self)or(ani7ation forp2rposes of -olle-tive *ar(ainin(. This -ase +oes not fall s<2arely&ithin the e'-eption. !Emphasis s2pplie+$.

There are no -ompellin( reasons in this -ase s2-h as a +enial to thePASAMA P (ro2p of the ri(ht to ?oin the -erti6e+ *ar(ainin( 2nit ors2*stantial +istin-tions &arrantin( the re-o(nition of a separate(ro2p of ran5 an+ 6le &or5ers. re-isely, NAMAD=)M9 intervene+to ma5e it -lear it has no o*?e-tions to <2ali6e+ ran5 an+ 6le&or5ers ?oinin( its 2nion.

t is nat2ral in almost all fairly si7e+ -ompanies to have (ro2ps of &or5ers +is-har(in( +iIerent f2n-tions. No -ompany -o2l+ possi*lyhave all employees performin( e'a-tly the same &or5. Fariety of tas5s is to *e e'pe-te+. t &o2l+ not *e in the interest of so2n+la*or)mana(ement relations if ea-h (ro2p of employees assi(ne+to a spe-iali7e+ f2n-tion or se-tion &o2l+ +e-i+e to *rea5 a&ayfrom their fello&)&or5ers an+ form their o&n separate *ar(ainin(2nit. De -annot allo& one 2nit for typists an+ -ler5s, one 2nit fora--o2ntants, another 2nit for messen(ers an+ +rivers, an+ so on in

The respon+ents state that this -ase is an e'-eption to the (eneralr2le -onsi+erin( that s2*stantial +iIeren-es e'ist *et&een theo8-e employees or professional, te-hni-al, a+ministrative an+-on6+ential employees vis)a)vis the 6el+ &or5ers or +rivers,-on+2-tors an+ me-hani-s of the petitioner. A(ainst this-ontention, &e 6n+ that the /s2*stantial +iIeren-es/ in the terms

an+ -on+itions of employment *et&een the private respon+ent1smem*ers an+ the rest of the -ompany1s ran5 an+ 6le employeesare more ima(ine+ than real. De a(ree &ith the petitioner that the+iIeren-es alle(e+ are not s2*stantial or si(ni6-ant eno2(h tomerit the formation of another 2nion.

HLTRANC is a lar(e *2s -ompany en(a(e+ in the *2siness of -arryin( passen(ers an+ frei(ht, servi-in( L27on, Fisayas an+Min+anao. Certainly there is a -ommonality of interest amon( 6lin(-ler5s, +ispat-hers, +rivers, typists, an+ 6el+ men. They are allintereste+ in the pro(ress of their -ompany an+ in ea-h &or5ersharin( in the fr2its of their en+eavors e<2ita*ly an+ (enero2sly. Their f2n-tions mesh &ith one another. ne (ro2p nee+s the other

in the same &ay that the -ompany nee+s them all. The +rivers,me-hani-s an+ -on+2-tors are ne-essary for the -ompany *2tte-hni-al, a+ministrative an+ o8-e personnel are also nee+e+ an+e<2ally important for the smooth operation of the *2siness. Theremay *e +iIeren-es as to the nat2re of their in+ivi+2al assi(nments*2t the +istin-tions are not eno2(h to &arrant the formation of separate 2nions. The private respon+ent has not even sho&n that aseparate *ar(ainin( 2nit &o2l+ *e *ene6-ial to the employees-on-erne+. 8-e employees also *elon( to the ran5 an+ 6le. Thereis an e'istin( employer &i+e 2nit in the -ompany represente+ *yNAMAD=)M9. An+ as earlier state+, the fa-t that NAMAD=)M9move+ to intervene in the petition for -erti6-ation ele-tion 6le+ *yPASAMA P ne(ates the alle(ations that /s2*stantial +iIeren-es/e'ist *et&een the employees -on-erne+. De 6n+ a -ommonality of interest amon( them. There are no -ompellin( reasons for theformation of another 2nion.

De <2ote &ith favor Me+)Ar*iter A+ap1s rationale, to &it

... t is a(ainst the poli-y of the epartment of La*or to +ismem*erthe alrea+y &i+e e'istin( *ar(ainin( 2nit *e-a2se of its &ellesta*lishe+ (oal to&ar+s a sin(le employer &i+e 2nit &hi-h is moreto the *roa+er an+ (reater *ene6t of the employees &or5in( for-e.

The philosophy is to avoi+ fra(mentation of the *ar(ainin( 2nit so

@@

as to stren(then the employees *ar(ainin( po&er &ith themana(ement. To +o other&ise, &o2l+ *e -ontrary, inimi-al an+rep2(nant to the o*?e-tives of a stron( an+ +ynami- 2nionism. Letthere *e a 2ni6e+ &hole rather than a +ivisive one, let them spea5

that they are mana(e+ thro2(h the =tilities Mana(ementCorporation &ith all of their employees +ra&in( their salaries an+&a(es from sai+ entity0 that the a(en-ies have -ommon an+interlo-5in( in-orporators an+ o8-ers0 an+ that the SFSA GFM



there *e a 2ni6e+ &hole rather than a +ivisive one, let them spea5as one in a -lear resonant voi-e 2nmarre+ *y +issension to&ar+spro(ressive 2nionism. !Rollo, p. "@$

hilippine S-o2t Feterans Se-2rity an+

nvesti(ation A(en-y v. Se-retary, ""4 SCRA

B"etitioners1 ar(2ments +eserve s-ant -onsi+eration. The fa-ts an+-ir-2mstan-es e'tant in the re-or+ in+i-ate that the Me+)Ar*iteran+ Se-retaries rilon an+ Torres &ere not mista5en in hol+in( thatthe three se-2rity -ompanies are in reality a sin(le *2siness entityoperatin( as a sin(le -ompany -alle+ the /GA Se-2rity Gro2p/ or/GA Se-2rity Servi-es Gro2p./ 9a-t2al 6n+in(s of la*or o8-ials are-on-l2sive an+ *in+in( on the Co2rt &hen s2pporte+ *y s2*stantialevi+en-e.

The p2*li- repon+ent note+ the follo&in( -ir-2mstan-es in the LaCampana -ase similar to the -ase at *ar, as in+i-ative of the fa-tthat the La Campana CoIee 9a-tory an+ La Campana Ga2(a2a-5in( &ere in reality only one *2siness &ith t&o tra+e names !$the t&o fa-tories o--2pie+ the same a++ress, &herein they ha+their prin-ipal pla-e of *2siness0 !"$ their si(n*oar+s,a+vertisements, pa-5a(es of star-h, +elivery tr2-5 an+ +eliveryforms all 2se one appellation, /La Campana Star-h an+ CoIee9a-tory/0 !3$ the &or5ers in either -ompany re-eive+ their pay froma sin(le -ashier, an+ !4$ the &or5ers in one -ompany -o2l+ easilytransfer to the other -ompany, an+ vi-e)versa. This Co2rt hel+therein that the veil of -orporate 6-tion of the -oIee fa-tory may*e pier-e+ to th&art the attempt to -onsi+er it part from the other*2siness o&ne+ *y the same family. Th2s, the fa-t that one of the

*2sinesses is not in-orporate+ &as not the +e-isive fa-tor that le+the Co2rt to -onsi+er the t&o fa-tories as one. Moreover, &e +o not6n+ any materiality in the fa-t that the La Campana -ase &asinstit2te+ to +eman+ &a(e in-reases an+ other la*or stan+ar+s*ene6ts &hile this -ase &as 6le+ *y the la*or 2nion to see5re-o(nition as the sole *ar(ainin( a(ent in the esta*lishment. f *2sinesses operatin( 2n+er one mana(ement are treate+ as onefor *ar(ainin( p2rposes, there is not m2-h +iIeren-e in treatin(s2-h *2sinesses also as one for the preliminary p2rpose of la*oror(ani7in(.

n+ee+, the three a(en-ies in the -ase at *ar faile+ to re*2t the fa-t

interlo-5in( in-orporators an+ o8-ers0 an+ that the SFSA, GFMan+ ASA employees have a sin(le M2t2al ene6t System an+follo&e+ a sin(le system of -omp2lsory retirement.

No e'planation &as also (iven *y petitioners &hy the se-2rity(2ar+s of one a(en-y -o2l+ easily transfer from one a(en-y toanother an+ then *a-5 a(ain *y simply 6llin()2p a -ommon (ro

'or$a slip -alle+ /Re<2est for Transfer/. Re-or+s also sho&s thatthe SFSA, GFM an+ ASA al&ays hol+ ?oint yearly -eremoniess2-h as the /GA Ann2al A&ar+s Ceremony/. n emer(en-ies, allSFSA eta-hment Comman+ers &ere instr2-te+ in amemoran+2m +ate+ Novem*er #, @ to (et in to2-h &ith theo8-ers not only of SFSA *2t also of GFM an+ ASA. All of these(oes to sho& that the se-2rity a(en-ies -on-erne+ +o not e'ist an+operate separately an+ +istin-tly from ea-h other &ith +iIerent-orporate +ire-tions an+ (oals. n the -ontrary, all the -ross)lin5in(of the three a(en-ies1 -omman+, -ontrol an+ -omm2ni-ationsystems in+i-ate their 2nitary -orporate personality. A--or+in(ly,the veil of -orporate 6-tion of the three a(en-ies sho2l+ *e lifte+

for the p2rpose of allo&in( the employees of the three a(en-ies toform a sin(le la*or 2nion. As a sin(le *ar(ainin( 2nit, theemployees therein nee+ not 6le three separate petitions for-erti6-ation ele-tion. All of these -o2l+ *e -overe+ in a sin(lepetition.

nternational S-hool Allian-e of E+2-ators v.

2is2m*in(, G.R. No. "3B@, :2ne , "###De a(ree, ho&ever, that forei(n)hires +o not *elon( to the same*ar(ainin( 2nit as the lo-al)hires.

t +oes not appear that forei(n)hires have in+i-ate+ their intention

to *e (ro2pe+ to(ether &ith lo-al)hires for p2rposes of -olle-tive*ar(ainin(. The -olle-tive *ar(ainin( history in the S-hool alsosho&s that these (ro2ps &ere al&ays treate+ separately. 9orei(n)hires have limite+ ten2re0 lo-al)hires en?oy se-2rity of ten2re.Altho2(h forei(n)hires perform similar f2n-tions 2n+er the same&or5in( -on+itions as the lo-al)hires, forei(n)hires are a--or+e+-ertain *ene6ts not (rante+ to lo-al)hires. These *ene6ts, s2-h asho2sin(, transportation, shippin( -osts, ta'es, an+ home leavetravel allo&an-e, are reasona*ly relate+ to their stat2s as forei(n)hires, an+ ?2stify the e'-l2sion of the former from the latter. Toin-l2+e forei(n)hires in a *ar(ainin( 2nit &ith lo-al)hires &o2l+ not

##

ass2re either (ro2p the e'er-ise of their respe-tive -olle-tive*ar(ainin( ri(hts.

e La Salle F e La Salle =niversity Employees1

=nion, s2pporte+ *y the Soli-itor General at this point, asserts thatthe veil of -orporate 6-tion sho2l+ *e pier-e+, th2s, a--or+in( tothe =nion, the =niversity an+ the Colle(e of St. enil+e sho2l+ *e-onsi+ere+ as only one entity *e-a2se the latter is *2t a mere



e La Salle F. e La Salle =niversity Employees

Asso-iation, 33# SCRA 3B3n the 6rst iss2e involvin( the -lassi6-ation of the -omp2teroperators assi(ne+ at the =niversitys Comp2ter Servi-es Centeran+ +is-ipline o8-ers, the =niversity ar(2es that they are-on6+ential employees an+ that the =nion has alrea+y re-o(ni7e+

the -on6+ential nat2re of their f2n-tions &hen the latter a(ree+ inthe parties @B -olle-tive *ar(ainin( a(reement to e'-l2+e thesai+ employees from the *ar(ainin( 2nit of ran5)an+)6leemployees. As far as the sai+ -omp2ter operators are -on-erne+,the =niversity -onten+s that / the parties have alrea+y previo2slya(ree+ to e'-l2+e all positions in the =niversitys Comp2ter Servi-esCenter !CSC$, &hi-h in-l2+e the positions of -omp2ter operators,from the -olle-tive *ar(ainin( 2nit. ''' '''./ The =niversity f2rther-onten+s that /the nat2re of the &or5 +one *y these Comp2terperators is eno2(h ?2sti6-ation for their e'-l2sion from the-overa(e of the *ar(ainin( 2nit of the =niversitys ran5)an+)6leemployees. ''' '''./ A--or+in( to the =niversity, the Comp2ter

Servi-es Center, &here these -omp2ter operators &or5, /pro-esses+ata that are nee+e+ *y mana(ement for strate(i- plannin( an+eval2ation of systems. t also ho2ses the =niversitys -on6+entialre-or+s an+ information Ke"g" st2+ent re-or+s, fa-2lty re-or+s,fa-2lty an+ staI payroll +ata, an+ *2+(et allo-ation an+e'pen+it2re relate+ +ata &hi-h are -ontaine+ in -omp2ter 6lesan+ -omp2ter)(enerate+ reports. ''' '''. Moreover, the Comp2terperators are in fa-t the repository of the =niversitys -on6+entialinformation an+ +ata, in-l2+in( those involvin( an+>or pertinent tola*or relations. ''' '''./

As to the +is-ipline o8-ers, the =niversity maintains that /they are

li5e&ise e'-l2+e+ from the *ar(ainin( 2nit of the ran5)an+)6leemployees 2n+er the parties @B CA. The is-ipline 8-ers are-learly alter e(os of mana(ement as they perform tas5s &hi-h areinherent in mana(ement Ke"g" enfor-e +is-ipline, a-t as pea-eo8-ers, se-2re pea-e an+ safety of the st2+ents insi+e the-amp2s, -on+2-t investi(ations on violations of =niversityre(2lations, or of e'istin( -riminal la&s, -ommitte+ &ithin the=niversity or *y =niversity employees ''' '''./ The =niversityalso alle(es that /the is-ipline 8-ers are privy to hi(hly-on6+ential information or+inarily a--essi*le only to mana(ement./

Dith re(ar+ to the employees of the Colle(e of St. enil+e, the

-onsi+ere+ as only one entity *e-a2se the latter is *2t a mereinte(ral part of the =niversity.

The =niversitys ar(2ments on the 6rst iss2e fail to impress 2s. TheCo2rt a(rees &ith the Soli-itor General that the e'press e'-l2sionof the -omp2ter operators an+ +is-ipline o8-ers from the*ar(ainin( 2nit of ran5)an+)6le employees in the @B -olle-tive

*ar(ainin( a(reement +oes not *ar any re)ne(otiation for thef2t2re in-l2sion of the sai+ employees in the *ar(ainin( 2nit.2rin( the free+om perio+, the parties may not only rene& thee'istin( -olle-tive *ar(ainin( a(reement *2t may also propose an++is-2ss mo+i6-ations or amen+ments thereto. Dith re(ar+ to thealle(e+ -on6+ential nat2re of the sai+ employees f2n-tions, after a-aref2l -onsi+eration of the plea+in(s 6le+ *efore this Co2rt, &er2le that the sai+ -omp2ter operators an+ +is-ipline o8-ers are not-on6+ential employees. As -aref2lly e'amine+ *y the Soli-itorGeneral, the servi-e re-or+ of a -omp2ter operator reveals that his+2ties are *asi-ally -leri-al an+ non)-on6+ential in nat2re. As to the+is-ipline o8-ers, &e a(ree &ith the vol2ntary ar*itrator that *ase+

on the nat2re of their +2ties, they are not -on6+ential employeesan+ sho2l+ therefore *e in-l2+e+ in the *ar(ainin( 2nit of ran5)an+)6le employees.

#

LABOR OR1A,I5A*IO,6

A e6nition U Types

eIe-t on " :2ne @@;, an+ a(ain *y epartment r+er No. 4#+ate+ ; 9e*r2ary "##3. The mplementin( R2les as amen+e+ *y.. No. @ sho2l+ (overn the resol2tion of the petition at *ar sin-e



A e6nition U Types

H. Re(istration of =nions

San Mi(2el Corporation Employees =nion)

hilippine Transport an+ General Dor5ers

r(ani7ation !SMCE=)TGD$ v. San Mi(2el

a-5a(in( ro+2-ts Employees =nion)

am*ansan( i&a N( Man((a(a&an( ilipino

!SME=)M$, Septem*er ", "##;A legiti$ate labor organi+ation is +e6ne+ as any la*or or(ani7ation+2ly re(istere+ &ith the epartment of La*or an+ Employment, an+in-l2+es an. branch or local thereo'" The man+ate of the La*orCo+e is to ens2re stri-t -omplian-e &ith the re<2irements onre(istration *e-a2se a le(itimate la*or or(ani7ation is entitle+ to

spe-i6- ri(hts 2n+er the La*or Co+e, an+ are involve+ in a-tivities+ire-tly aIe-tin( matters of p2*li- interest. Re(istrationre<2irements are inten+e+ to aIor+ a meas2re of prote-tion to2ns2spe-tin( employees &ho may *e l2re+ into ?oinin(2ns-r2p2lo2s or Qy)*y)ni(ht 2nions &hose sole p2rpose is to -ontrol2nion f2n+s or 2se the la*or or(ani7ation for ille(itimateen+s. Le(itimate la*or or(ani7ations have e'-l2sive ri(hts 2n+erthe la& &hi-h -annot *e e'er-ise+ *y non)le(itimate 2nions, one of &hi-h is the ri(ht to *e -erti6e+ as the e'-l2sive representative of all the employees in an appropriate -olle-tive *ar(ainin( 2nit forp2rposes of -olle-tive *ar(ainin(. The a-<2isition of ri(hts *y any2nion or la*or or(ani7ation, parti-2larly the ri(ht to 6le a petition

for -erti6-ation ele-tion, 6rst an+ foremost, +epen+s on &hether ornot the la*or or(ani7ation has attaine+ the stat2s of a le(itimatela*or or(ani7ation.

A per2sal of the re-or+s reveals that respon+ent is re(istere+ &iththe LR as a lo-al or -hapter of M an+ &as iss2e+ CharterCerti6-ate No. " on :2ne @@@. Hen-e, respon+ent &as+ire-tly -hartere+ *y M.

The pro-e+2re for re(istration of a lo-al or -hapter of a la*oror(ani7ation is provi+e+ in oo5 F of the mplementin( R2les of theLa*or Co+e, as amen+e+ *y epartment r+er No. @ &hi-h too5

( prespon+ents petition for -erti6-ation ele-tion &as 6le+ &ith the LRin @@@0 an+ that of petitioner on ; A2(2st @@@.

The appli-a*le mplementin( R2les en2n-iates a t&o)fol+ pro-e+2refor the -reation of a -hapter or a lo-al. The 6rst involves thea8liation of an in+epen+ent 2nion &ith a fe+eration or national2nion or in+2stry 2nion. The se-on+, 6n+in( appli-ation in the

instant petition, involves the +ire-t -reation of a lo-al or a -hapterthro2(h the pro-ess of -harterin(.

A +2ly re(istere+ fe+eration or national 2nion may +ire-tly -reate alo-al or -hapter *y s2*mittin( to the LE Re(ional 8-e or to theLR t&o -opies of the follo&in(

!a$ A -harter -erti6-ate iss2e+ *y the fe+eration or national 2nionin+i-atin( the -reation or esta*lishment of the lo-al>-hapter0

!*$ The names of the lo-al>-hapters o8-ers, their a++resses, an+the prin-ipal o8-e of the lo-al>-hapter0 an+

!-$ The lo-al>-hapters -onstit2tion an+ *y)la&s0 rovi+e+, That

&here the lo-al>-hapters -onstit2tion an+ *y)la&s is the same asthat of the fe+eration or national 2nion, this fa-t shall *e in+i-ate+a--or+in(ly.

All the fore(oin( s2pportin( re<2irements shall *e -erti6e+ 2n+eroath *y the Se-retary or the Treas2rer of the lo-al>-hapter an+atteste+ to *y its resi+ent.

The mplementin( R2les stip2late that a lo-al or -hapter may *e+ire-tly -reate+ *y a 'ederation or national union" A +2ly-onstit2te+ lo-al or -hapter -reate+ in a--or+an-e &ith thefore(oin( shall a-<2ire le(al personality from the +ate of 6lin( of the -omplete +o-2ments &ith the LR. The iss2an-e of the-erti6-ate of re(istration *y the LR or the LE Re(ional 8-e isnot the operative a-t that vests le(al personality 2pon a lo-al or a-hapter 2n+er epartment r+er No. @. S2-h le(al personality isa-<2ire+ from the 6lin( of the -omplete +o-2mentary re<2irementsen2merate+ in Se-tion , R2le F.

etitioner insists that Se-tion 3 of the mplementin( R2les, asamen+e+ *y epartment r+er No. @, violate+ Arti-le "34 of theLa*or Co+e &hen it provi+e+ for less strin(ent re<2irements for the-reation of a -hapter or lo-al. This Co2rt +isa(rees.

Arti-le "34 of the La*or Co+e provi+es that an independent labor

#"

organi2ation a-<2ires le(itima-y only 2pon its re(istration &iththe LR

Any appli-ant la*or or(ani7ation, asso-iation or (ro2p of 2nions or5 h ll i l l li + h ll * i l + h

Co2rt &as 2ne<2ivo-al in 6n+in( that there is no in-onsisten-y*et&een the La*or Co+e an+ epartment r+er No. @.

As to petitioners -laims that respon+ent o*taine+ its Certi6-ate of



&or5ers shall a-<2ire le(al personality an+ shall *e entitle+ to theri(hts an+ privile(es (rante+ *y la& to le(itimate la*oror(ani7ations 2pon iss2an-e of the -erti6-ate of re(istration *ase+on the follo&in( re<2irements

!a$ 9ifty pesos !#.##$ re(istration fee0

!*$ The names of its o8-ers, their a++resses, the prin-ipal a++ress

of the la*or or(ani7ation, the min2tes of theor(ani7ational meetin(s an+ the list of the &or5ers &hoparti-ipate+ in s2-hmeetin(s0

c The na$es o' all its $e$bers co$(rising at least t%ent. (ercent >=J o' all the e$(lo.ees in the bargaining unit %here it see-s to o(erate

!+$ f the appli-ant 2nion has *een in e'isten-e for one ormore years, -opies of its ann2al 6nan-ial reports0 an+

!e$ 9o2r !4$ -opies of the -onstit2tion an+ *y)la&s of the appli-ant2nion, min2tes of its a+option or rati6-ation, an+ the list of themem*ers &ho parti-ipate+ in it. !tali-s s2pplie+.$

t is emphasi7e+ that the fore(oin( pertains to the re(istration of an inde(endent la*or or(ani7ation, asso-iation or (ro2p of 2nionsor &or5ers.

Ho&ever, the -reation of a *ran-h, lo-al or -hapter is treate++iIerently. This Co2rt, in the lan+mar5 -ase of ProgressiveDevelo($ent Cor(oration v" Secretar. De(art$ent o' Labor andE$(lo.$ent +e-lare+ that &hen an 2nre(istere+ 2nion *e-omes a*ran-h, lo-al or -hapter, some of the aforementione+ re<2irementsfor re(istration are no lon(er ne-essary or -omp2lsory. Dhereas anappli-ant for re(istration of an in+epen+ent 2nion is man+ate+ tos2*mit, amon( other thin(s, the n2m*er of employees an+ names

of all its mem*ers -omprisin( at least "# of the employees in the*ar(ainin( 2nit &here it see5s to operate, as provi+e+ 2n+er Arti-le"34 of the La*or Co+e an+ Se-tion " of R2le , oo5 F of themplementin( R2les, the same is no lon(er re<2ire+ of a *ran-h,lo-al or -hapter. The intent of the la& in imposin( less re<2irementsin the -ase of a *ran-h or lo-al of a re(istere+ fe+eration ornational 2nion is to en-o2ra(e the a8liation of a lo-al 2nion &ith afe+eration or national 2nion in or+er to in-rease the lo-al 2nions*ar(ainin( po&ers respe-tin( terms an+ -on+itions of la*or.

S2*se<2ently, in Pag(alain 6aulers Inc" v" Tra0ano &here thevali+ity of epartment r+er No. @ &as +ire-tly p2t in iss2e, this

Re(istration thro2(h fra2+ an+ misrepresentation, this Co2rt 6n+sthat the imp2tations are not impresse+ &ith merit. n the instant-ase, proof to +e-lare that respon+ent -ommitte+ fra2+ an+misrepresentation remains &antin(. This Co2rt ha+, in+ee+, onseveral o--asions, prono2n-e+ that re(istration *ase+ on false an+fra2+2lent statements an+ +o-2ments -onfer no le(itima-y 2pon a

la*or or(ani7ation irre(2larly re-o(ni7e+, &hi-h, at *est, hol+s on toa mere s-rap of paper. =n+er s2-h -ir-2mstan-es, the la*oror(ani7ation, not *ein( a le(itimate la*or or(ani7ation, a-<2ires nori(hts.

This Co2rt emphasi7es, ho&ever, that a +ire-t -hallen(e to thele(itima-y of a la*or or(ani7ation *ase+ on fra2+ an+misrepresentation in se-2rin( its -erti6-ate of re(istration is aserio2s alle(ation &hi-h +eserves -aref2l s-r2tiny. Alle(ationsthereof sho2l+ *e -ompo2n+e+ &ith s2pportin( -ir-2mstan-es an+evi+en-e. The re-or+s of the -ase are +evoi+ of s2-hevi+en-e. 92rthermore, this Co2rt is not a trier of fa-ts, an+ this+o-trine applies &ith (reater for-e in la*or -ases. 9in+in(s of fa-t of

a+ministrative a(en-ies an+ <2asi)?2+i-ial *o+ies, s2-h as the LR,&hi-h have a-<2ire+ e'pertise *e-a2se their ?2ris+i-tion is -on6ne+to spe-i6- matters, are (enerally a--or+e+ not only (reat respe-t*2t even 6nality.

Still, petitioner post2lates that respon+ent &as not vali+ly an+le(itimately -reate+, for M -annot -reate a lo-al or -hapter as itis not a le(itimate la*or or(ani7ation, it *ein( a tra+e 2nion -enter.

etitioners ar(2ment -reates a pre+i-ament as it hin(es on thele(itima-y of M as a la*or or(ani7ation. 9irstly, this line of reasonin( attempts to pre+i-ate that a tra+e 2nion -enter is not ale(itimate la*or or(ani7ation. n the pro-ess, the le(itima-y of M is *ein( imp2(ne+, al*eit in+ire-tly. Se-on+ly, the same-ontention premises that a tra+e 2nion -enter -annot +ire-tly-reate a lo-al or -hapter thro2(h the pro-ess of -harterin(.

Anent the fore(oin(, as has *een hel+ in a lon( line of -ases, thele(al personality of a le(itimate la*or or(ani7ation, s2-h as M,-annot *e s2*?e-t to a -ollateral atta-5.The la& is very -lear on thismatter. Arti-le "" !h$ of the La*or Co+e, as amen+e+, +e6nesa legiti$ate labor organi+ation as any la*or or(ani7ation +2lyre(istere+ &ith the LE, an+ in-l2+es an. branch or localthereo'" n the other han+, a tra+e 2nion -enter is any (ro2p of

#3

re(istere+ national 2nions or fe+erations or(ani7e+ for the m2t2alai+ an+ prote-tion of its mem*ers0 for assistin( s2-h mem*ers in-olle-tive *ar(ainin(0 or for parti-ipatin( in the form2lation of so-ialan+ employment poli-ies stan+ar+s an+ pro(rams an+ is +2ly

After an e'ha2stive st2+y of the (overnin( la*or la& provisions,*oth stat2tory an+ re(2latory, &e 6n+ no le(al ?2sti6-ation tos2pport the -on-l2sion that a tra+e 2nion -enter is allo&e+ to+ire-tly -reate a lo-al or -hapter thro2(h -harterin( A(ro(os &e



an+ employment poli-ies, stan+ar+s, an+ pro(rams, an+ is +2lyre(istere+ &ith the LE in a--or+an-e &ith R2le , Se-tion " of the mplementin( R2les.

The mplementin( R2les stip2late that a la*or or(ani7ation shall *e+eeme+ re(istere+ an+ veste+ &ith le(al personality on the +ate of iss2an-e of its -erti6-ate of re(istration. n-e a -erti6-ate of

re(istration is iss2e+ to a 2nion, its le(al personality -annot *es2*?e-t to -ollateral atta-5. t may *e <2estione+ only in anin+epen+ent petition for -an-ellation in a--or+an-e &ith Se-tion of R2le F, oo5 F of the mplementin( R2les. The aforementione+provision is en2n-iate+ in the follo&in(

Se-. . E5ect o' registration. The la*or or(ani7ation or &or5ersasso-iation shall *e +eeme+ re(istere+ an+ veste+ &ith le(alpersonality on the +ate of iss2an-e of its -erti6-ate of re(istration.S2-h le(al personality -annot thereafter *e s2*?e-t to -ollateralatta-5, *2t may *e <2estione+ only in an in+epen+ent petition for-an-ellation in a--or+an-e &ith these R2les.

M &as re(istere+ as a tra+e 2nion -enter an+ iss2e+

Re(istration Certi6-ate No. 9E))LC *y the LR on 49e*r2ary @@. =ntil the -erti6-ate of re(istration of M is-an-elle+, its le(al personality as a le(itimate la*or or(ani7ations2*sists. n-e a 2nion a-<2ires le(itimate stat2s as a la*oror(ani7ation, it -ontin2es to *e re-o(ni7e+ as s2-h 2ntil its-erti6-ate of re(istration is -an-elle+ or revo5e+ in an in+epen+enta-tion for -an-ellation. t *ears to emphasi7e that &hat is *ein(+ire-tly -hallen(e+ is the personality of respon+ent as a le(itimatela*or or(ani7ation an+ not that of M. This *ein( a -ollateralatta-5, this Co2rt is &itho2t ?2ris+i-tion to entertain <2estionsin+ire-tly imp2(nin( the le(itima-y of M.

Corollarily, M is (rante+ all the ri(hts an+ privile(esapp2rtenant to a le(itimate la*or or(ani7ation, an+ -ontin2es to *ere-o(ni7e+ as s2-h 2ntil its -erti6-ate of re(istration is s2--essf2llyimp2(ne+ an+ thereafter -an-elle+ or revo5e+ in an in+epen+enta-tion for -an-ellation.

De no& pro-ee+ to the -ontention that M -annot +ire-tly -reatea lo-al or a -hapter, it *ein( a tra+e 2nion -enter.

This Co2rt reverses the 6n+in( of the appellate -o2rt an+ LR onthis (ro2n+, an+ r2les that M -annot +ire-tly -reate a lo-al or-hapter.

+ire-tly -reate a lo-al or -hapter thro2(h -harterin(. A(ro(os, &eta5e this o--asion to reiterate the 6rst an+ f2n+amental +2ty of thisCo2rt, &hi-h is to apply the la&. The solemn po&er an+ +2ty of theCo2rt to interpret an+ apply the la& +oes not in-l2+e the po&er to-orre-t *y rea+in( into the la& &hat is not &ritten therein.

resi+ential e-ree No. 44", *etter 5no&n as the La*or Co+e, &as

ena-te+ in @;". ein( a le(islation on so-ial ?2sti-e, the provisionsof the La*or Co+e an+ the mplementin( R2les have *een s2*?e-tto several amen+ments, an+ they -ontin2e to evolve, -onsi+erin(that la*or plays a ma?or role as a so-io)e-onomi- for-e. The La*orCo+e &as 6rst amen+e+ *y Rep2*li- A-t No. B;, an+ re-ently, *yRep2*li- A-t No. @4. n-i+entally, the term trade unioncenter &as never mentione+ 2n+er resi+ential e-ree No. 44",even as it &as amen+e+ *y Rep2*li- A-t No. B;. The term tradeunion center &as 6rst a+opte+ in the mplementin( R2les, 2n+erepartment r+er No. @.

C2llin( from its +e6nition as provi+e+ *y epartment r+er No. @,a trade union center is any (ro2p of re(istere+ national 2nions or

fe+erations or(ani7e+ for the m2t2al ai+ an+ prote-tion of itsmem*ers0 for assistin( s2-h mem*ers in -olle-tive *ar(ainin(0 orfor parti-ipatin( in the form2lation of so-ial an+ employmentpoli-ies, stan+ar+s, an+ pro(rams, an+ is +2ly re(istere+ &ith theLE in a--or+an-e &ith R2le , Se-tion " of the mplementin(R2les. The same r2le provi+es that the appli-ation for re(istrationof an in+2stry or tra+e 2nion -enter shall *e s2pporte+ *y thefollo&in(

!a$ The list of its mem*er or(ani7ations an+ their respe-tivepresi+ents an+, in the -ase of an in+2stry 2nion, the in+2stry&here the 2nion see5s to operate0

!*$ The resol2tion of mem*ership of ea-h mem*er or(ani7ation,approve+ *y the oar+ of ire-tors of s2-h 2nion0

!-$ The name an+ prin-ipal a++ress of the appli-ant, the names of its o8-ers an+ their a++resses, the min2tes of its or(ani7ationalmeetin(>s, an+ the list of mem*er or(ani7ations an+ theirrepresentatives &ho atten+e+ s2-h meetin(>s0 an+

!+$ A -opy of its -onstit2tion an+ *y)la&s an+ min2tes of itsrati6-ation *y a ma?ority of the presi+ents of the mem*eror(ani7ations, provi+e+ that &here the rati6-ation &as +onesim2ltaneo2sly &ith the or(ani7ational meetin(, it shall *es28-ient that the fa-t of rati6-ation *e in-l2+e+ in the min2tes of

#4

the or(ani7ational meetin(.

Evi+ently, &hile a national 2nion or fe+eration is a la*oror(ani7ation &ith at least ten lo-als or -hapters or a8liates, ea-h of

hi h t * + l ti6 + i + ll ti * i i

amen+e+, other&ise 5no&n as the La*or Co+e of the hilippines, ishere*y f2rther amen+e+ to rea+ as follo&s

ART. "34. Re<2irements of Re(istration. A fe+eration, national2nion or in+2stry or trade union center or an in+epen+ent 2nion



&hi-h m2st *e a +2ly -erti6e+ or re-o(ni7e+ -olle-tive *ar(ainin(a(ent0 a tra+e 2nion -enter, on the other han+, is -ompose+ of a(ro2p of re(istere+ national 2nions or fe+erations.

The mplementin( R2les, as amen+e+ *y epartment r+er No. @,provi+e that a dul. registered 'ederation or national union may+ire-tly -reate a lo-al or -hapter. The provision rea+s

Se-tion . Chartering and creation o' a localGcha(ter . A +2lyre(istere+ fe+eration or national 2nion may +ire-tly -reate alo-al>-hapter *y s2*mittin( to the Re(ional 8-e or to the 2rea2t&o !"$ -opies of the follo&in(


!*$ The names of the lo-al>-hapters o8-ers, their a++resses, an+the prin-ipal o8-e of the lo-al>-hapter0 an+

!-$ The lo-al>-hapters -onstit2tion an+ *y)la&s0 provi+e+ that&here the lo-al>-hapters -onstit2tion an+ *y)la&s is the same asthat of the fe+eration or national 2nion, this fa-t shall *e in+i-ate+

a--or+in(ly.


epartment r+er No. @ mentions t&o la*or or(ani7ations either of &hi-h is allo&e+ to +ire-tly -reate a lo-al or -hapter thro2(h-harterin( a +2ly re(istere+ 'ederation or anational union.epartment r+er No. @ +e6nes a /-hartere+ lo-al/ as a la*oror(ani7ation in the private se-tor operatin( at the enterprise levelthat a-<2ire+ le(al personality thro2(h a -harter -erti6-ate, iss2e+*y a +2ly re(istere+ 'ederation or national union an+ reporte+ to

the Re(ional 8-e in a--or+an-e &ith R2le , Se-tion ")E of theseR2les.

Rep2*li- A-t No. @4 or An A-t Stren(thenin( the Dor5ersConstit2tional Ri(ht to Self)r(ani7ation, Amen+in( for the 2rposeresi+ential e-ree No. 44", As Amen+e+, ther&ise Pno&n as theLa*or Co+e of the hilippines lapse+ into la& on " May "##; an+*e-ame eIe-tive on 4 :2ne "##;. This la& f2rther amen+s theLa*or Co+e provisions on La*or Relations.

ertinent amen+ments rea+ as follo&s

SECTN . Arti-le "34 of resi+ential e-ree No. 44", as

2nion or in+2stry or trade union center or an in+epen+ent 2nionshall a-<2ire le(al personality an+ shall *e entitle+ to the ri(htsan+ privile(es (rante+ *y la& to le(itimate la*or or(ani7ations2pon iss2an-e of the -erti6-ate of re(istration *ase+ on thefollo&in( re<2irements

!a$ 9ifty pesos !#.##$ re(istration fee0

!*$ The names of its o8-ers, their a++resses, the prin-ipal a++ressof the la*or or(ani7ation, the min2tes of the or(ani7ationalmeetin(s an+ the list of the &or5ers &ho parti-ipate+ in s2-hmeetin(s0

!-$ n -ase the appli-ant is an in+epen+ent 2nion, the names of allits mem*ers -omprisin( at least t&enty per-ent !"#$ of all theemployees in the *ar(ainin( 2nit &here it see5s to operate0

!+$ f the appli-ant 2nion has *een in e'isten-e for one or moreyears, -opies of its ann2al 6nan-ial reports0 an+

!e$ 9o2r -opies of the -onstit2tion an+ *y)la&s of the appli-ant2nion, min2tes of its a+option or rati6-ation, an+ the list of themem*ers &ho parti-ipate+ in it.

SECTN ". A ne& provision is here*y inserte+ into the La*or Co+eas Arti-le "34)A to rea+ as follo&s

ART. "34)A. Charterin( an+ Creation of a Lo-al Chapter. A +2lyre(istere+ 'ederation or national union may +ire-tly -reate a lo-al-hapter *y iss2in( a -harter -erti6-ate in+i-atin( theesta*lishment of the lo-al -hapter. The -hapter shall a-<2ire le(alpersonality only for p2rposes of 6lin( a petition for -erti6-ationele-tion from the +ate it &as iss2e+ a -harter -erti6-ate.

The -hapter shall *e entitle+ to all other ri(hts an+ privile(es of ale(itimate la*or or(ani7ation only 2pon the s2*mission of thefollo&in( +o-2ments in a++ition to its -harter -erti6-ate

!a$ The names of the -hapter1s o8-ers, their a++resses, an+ theprin-ipal o8-e of the -hapter0 an+

!*$ The -hapter1s -onstit2tion an+ *y)la&s rovi+e+, That &herethe -hapter1s -onstit2tion an+ *y)la&s are the same as that of thefe+eration or the national 2nion, this fa-t shall *e in+i-ate+a--or+in(ly.

The a++itional s2pportin( re<2irements shall *e -erti6e+ 2n+eroath *y the se-retary or treas2rer of the -hapter an+ atteste+ *yits presi+ent. !Emphasis o2rs.$

Arti-le "34 no& in-l2+es the term trade union center , *2t

#

interestin(ly, the provision in+i-atin( the pro-e+2re for -harterin(or -reatin( a lo-al or -hapter, namely Arti-le "34)A, still ma5es nomention of a tra+e 2nion -enter.

Al th h i i i th t i th t t + t

small (ro2p of employees to foist a not)so)+esira*le fe+eration or2nion on 2ns2spe-tin( -o)&or5ers an+ pare the nee+ for&holehearte+ vol2ntariness, &hi-h is *asi- to free 2nionism. As ale(itimate la*or or(ani7ation is entitle+ to spe-i6- ri(hts 2n+er the



Also &orth emphasi7in( is that even in the most re-ent amen+mentof the implementin( r2les, there &as no mention of a tra+e 2nion-enter as *ein( amon( the la*or or(ani7ations allo&e+ to -harter.

This Co2rt +eems it proper to apply the Latin ma'im e2(ressiounius est e2clusio alterius. =n+er this ma'im of stat2toryinterpretation, the e'pression of one thin( is the e'-l2sion of

another. Dhen -ertain persons or thin(s are spe-i6e+ in a la&,-ontra-t, or &ill, an intention to e'-l2+e all others from itsoperation may *e inferre+. f a stat2te spe-i6es one e'-eption to a(eneral r2le or ass2mes to spe-ify the eIe-ts of a -ertain provision,other e'-eptions or eIe-ts are e'-l2+e+. Dhere the terms aree'pressly limite+ to -ertain matters, it may not, *y interpretation or-onstr2-tion, *e e'ten+e+ to other matters. S2-h is the -asehere. f its intent &ere other&ise, the la& -o2l+ have so easily an+-onveniently in-l2+e+ tra+e 2nion -enters in i+entifyin( the la*oror(ani7ations allo&e+ to -harter a -hapter or lo-al. Anythin( that isnot in-l2+e+ in the en2meration is e'-l2+e+ therefrom, an+ ameanin( that +oes not appear nor is inten+e+ or reQe-te+ in the

very lan(2a(e of the stat2te -annot *e pla-e+ therein. The r2le isrestri-tive in the sense that it pro-ee+s from the premise that thele(islatin( *o+y &o2l+ not have ma+e spe-i6- en2merations in astat2te if it ha+ the intention not to restri-t its meanin( an+ -on6neits terms to those e'pressly mentione+. E2(ressiu$ 'acit cessaretacitu$" Dhat is e'presse+ p2ts an en+ to &hat is implie+. Casuso$issus (ro o$isso habendus est . A person, o*?e-t or thin( omitte+m2st have *een omitte+ intentionally.

Therefore, sin-e 2n+er the pertinent stat2s an+ appli-a*leimplementin( r2les, the po&er (rante+ to la*or or(ani7ations to+ire-tly -reate a -hapter or lo-al thro2(h -harterin( is (iven to a

fe+eration or national 2nion, then a tra+e 2nion -enter is &itho2ta2thority to -harter +ire-tly.

The r2lin( of this Co2rt in the instant -ase is not a +epart2re fromthe poli-y of the la& to foster the free an+ vol2ntary or(ani7ation of a stron( an+ 2nite+ la*or movement, an+ th2s ass2re the ri(hts of &or5ers to self)or(ani7ation. The man+ate of the La*or Co+e inens2rin( stri-t -omplian-e &ith the pro-e+2ral re<2irements forre(istration is not &itho2t reason. t has *een o*serve+ that theformation of a lo-al or -hapter *e-omes a han+y tool for the-ir-2mvention of 2nion re(istration re<2irements. A*sent theinstit2tion of safe(2ar+s, it *e-omes a -onvenient +evi-e for a

le(itimate la*or or(ani7ation is entitle+ to spe-i6- ri(hts 2n+er theLa*or Co+e an+ involve+ in a-tivities +ire-tly aIe-tin( p2*li-interest, it is ne-essary that the la& aIor+ 2tmost prote-tion to theparties aIe-te+. Ho&ever, as this Co2rt has en2n-iate+in Progressive Develo($ent Cor(oration v" Secretar. o' De(art$ent o' Labor and E$(lo.$ent it is not this Co2rt1s f2n-tionto a2(ment the re<2irements pres-ri*e+ *y la&. 2r only re-o2rse,

as previo2sly +is-2sse+, is to e'a-t stri-t -omplian-e &ith &hat thela& provi+es as re<2isites for lo-al or -hapter formation.

n s2m, altho2(h M as a tra+e 2nion -enter is a le(itimate la*oror(ani7ation, it has no po&er to +ire-tly -reate a lo-al or-hapter. Th2s, SME=)M -annot *e -reate+ 2n+er the morelenient re<2irements for -harterin(, *2t m2st have -omplie+ &iththe more strin(ent r2les for -reation an+ re(istration of anin+epen+ent 2nion, in-l2+in( the "# mem*ership re<2irement.

Ea(le Ri+(e Golf an+ Co2ntry Cl2* v. CA, Mar-h

, "##Ea(le Ri+(e -ites the (ro2n+s provi+e+ 2n+er Art. "3@!a$ an+ !-$ of the La*or Co+e for its petition for -an-ellation of the ERE=sre(istration. n the other han+, the =nionasserts bona&de -omplian-e &ith the re(istration re<2irements 2n+er Art. "34of the Co+e, e'plainin( the seemin( +is-repan-ies *et&een then2m*er of employees &ho parti-ipate+ in the or(ani7ationalmeetin( an+ the total n2m*er of 2nion mem*ers at the time it 6le+its re(istration, as &ell as the typo(raphi-al error in its -erti6-ation&hi-h 2n+erstate+ *y one the n2m*er of 2nion mem*ers &horati6e+ the 2nions -onstit2tion an+ *y)la&s.

efore their amen+ment *y Rep2*li- A-t No. @4 on :2ne ,

"##;, the then (overnin( Art. "34 !on the re<2irements of re(istration of a la*or 2nion$ an+ Art. "3@ !on the (ro2n+s for-an-ellation of 2nion re(istration$ of the La*or Co+e respe-tivelyprovi+e+ as follo&s

ART. "3@. 3R/!NDS */R CANCELLATI/N /* !NI/N RE3ISTRATI/N. The follo&in( shall -onstit2te (ro2n+s for -an-ellation of 2nionre(istration

!a$ 4isrepresentation! false statements or fraud inconnection with the adoption or rati3cation of theconstitution and by)laws or amen+ments thereto, the minutesof rati3cation, and the list of members who too' part in the

#B

rati3cation0

' ' ' '

!-$ 4isrepresentation! false statements or fraud in

" ran5)an+)6le employees in Ea(le Ri+(e, as sho&n in the S&ornStatement of the =nion presi+ent an+ se-retary an+ -on6rme+ *yEa(le Ri+(e in its petition for -an-ellation.

*hi d Th = i h 8 i tl l i + th +i



connection with the election of o;cers, minutes of theelection of o;cers, the list of voters, or fail2re to s2*mit these+o-2ments to(ether &ith the list of the ne&ly ele-te+>appointe+o8-ers an+ their postal a++resses &ithin thirty !3#$ +ays fromele-tion. !Emphasis s2pplie+.$

A s-r2tiny of the re-or+s fails to sho& any misrepresentation, false

statement, or fra2+ -ommitte+ *y ERE= to merit -an-ellation of itsre(istration.

&irst. The =nion s2*mitte+ the re<2ire+ +o-2ments attestin( to thefa-ts of the or(ani7ational meetin( on e-em*er B, "##, theele-tion of its o8-ers, an+ the a+option of the =nions -onstit2tionan+ *y)la&s. t s2*mitte+ *efore the LE Re(ional 8-e &ith itsAppli-ation for Re(istration an+ the +2ly 6lle+ o2t LR Re(. 9ormNo. )L, s. @@, the follo&in( +o-2ments, to &it

!a$ the min2tes of its or(ani7ational meetin( hel+ on e-em*er B,"## sho&in( "B fo2n+in( mem*ers &ho ele-te+ its 2nion o8-ers*y se-ret *allot0

!*$ the list of ran5)an+)6le employees of Ea(le Ri+(e &ho atten+e+the or(ani7ational meetin( an+ the ele-tion of o8-ers &ith theirin+ivi+2al si(nat2res0

!-$ the list of ran5)an+)6le employees &ho rati6e+ the 2nions-onstit2tion an+ *y)la&s sho&in( the very same list as those &hoatten+e+ the or(ani7ational meetin( an+ the ele-tion of o8-ers&ith their in+ivi+2al si(nat2res e'-ept the a++ition of fo2remployees &itho2t their si(nat2res, i"e", Cherry La*a?o,Gra-e ollo, Annalyn oniente an+ Ro&el olen+o0

!+$ the 2nions -onstit2tion an+ *y)la&s as approve+ on e-em*erB, "##0

!e$ the list of o8-ers an+ their a++resses0!f$ the list of 2nion mem*ers sho&in( a total of 3# mem*ers0 an+

!($ the S&orn Statement of the 2nions ele-te+ presi+ent an+se-retary. All the fore(oin( +o-2ments e'-ept the s&orn statementof the presi+ent an+ the se-retary &ere a--ompanie+ *yCerti6-ations *y the 2nion se-retary +2ly atteste+ to *y the 2nionpresi+ent.

6econd. The mem*ers of the ERE= totale+ 3# employees &hen itapplie+ on e-em*er @, "## for re(istration. The =nion there*y-omplie+ &ith the man+atory minim2m "# mem*ershipre<2irement 2n+er Art. "34!-$. f note is the 2n+isp2te+ n2m*er of

*hird. The =nion has s28-iently e'plaine+ the +is-repan-y*et&een the n2m*er of those &ho atten+e+ the or(ani7ationalmeetin( sho&in( "B employees an+ the list of 2nion mem*erssho&in( 3#. The +iIeren-e is +2e to the a++itional fo2r mem*ersa+mitte+ t&o +ays after the or(ani7ational meetin( as atteste+ to*y their +2ly a--omplishe+ =nion Mem*ership

forms. Conse<2ently, the total n2m*er of 2nion mem*ers, as of e-em*er , "##, &as 3#, &hi-h &as tr2thf2lly in+i-ate+ in itsappli-ation for re(istration on e-em*er @, "##.

As aptly fo2n+ *y the LR ire-tor, the =nion alrea+y ha+ 3#mem*ers &hen it applie+ for re(istration, for the a+mission of ne&mem*ers is neither prohi*ite+ *y la& nor &as it -on-eale+ in itsappli-ation for re(istration. Ea(le Ri+(es -ontention is Qa&e+ &henit e<2ate+ the re<2irements 2n+er Art. "34!*$ an+ !-$ of the La*orCo+e. ar. !*$ -learly re<2ire+ the s2*mission of the min2tes of theor(ani7ational meetin(s an+ the list of &or5ers &ho parti-ipate+ inthe meetin(s, &hile par. !-$ merely re<2ire+ the list of names of allthe 2nion mem*ers -omprisin( at least "# of the *ar(ainin(

2nit. The fa-t that ERE= ha+ 3# mem*ers &hen it applie+ forre(istration on e-em*er @, "## &hile only "B a-t2allyparti-ipate+ in the or(ani7ational meetin( is *orne *y the re-or+s.

&ourth. n its f2tile attempt to -l2t-h at stra&s, Ea(le Ri+(e assailsthe in-l2sion of the a++itional fo2r mem*ers alle(e+ly for not-omplyin( &ith &hat it terme+ as the sine ,ua non re<2irementsfor 2nion mem*er appli-ations 2n+er the =nions -onstit2tion an+*y)la&s, spe-i6-ally Se-. " of Art. F. De are not pers2a+e+. Anyseemin( in6rmity in the appli-ation an+ a+mission of 2nionmem*ership, most espe-ially in -ases of in+epen+ent la*or 2nions,m2st *e vie&e+ in favor of vali+ mem*ership.

The ri(ht of employees to self)or(ani7ation an+ mem*ership in a2nion m2st not *e trammele+ *y 2n+2e +i8-2lties. n this -ase,&hen the =nion sai+ that the fo2r employee)appli-ants ha+ *eena+mitte+ as 2nion mem*ers, it is eno2(h to esta*lish the fa-t of a+mission of the fo2r that they ha+ +2ly si(ni6e+ s2-h +esire *ya--omplishin( the mem*ership form. The fa-t, as pointe+ o2t *yEa(le Ri+(e, that the =nion, o&in( to its s-ant mem*ership, ha+not yet f2lly or(ani7e+ its +iIerent -ommittees evi+ently sho&s the+ire-t an+ vali+ a--eptan-e of the fo2r employee appli-ants ratherthan +eter their a+mission as erroneo2sly asserte+ *y Ea(le Ri+(e.

#;

&ifth. The +iIeren-e *et&een the n2m*er of "B mem*ers, &horati6e+ the =nions -onstit2tion an+ *y)la&s, an+ the " mem*erssho&n in the -erti6-ation of the =nion se-retary as havin( rati6e+it, is, as sho&n *y the fa-t2al ante-e+ents, a typo(raphi-al error. t

the opposin( party, i.e., the =nion.

9or their non)presentation an+ -onsonant to the a*ove)<2ote+ r2le,the si' a8+avits of retra-tion are ina+missi*le as evi+en-e a(ainstthe =nion in the instant -ase Moreover the a8+avit an+ ?oint



, , y , yp ( p&as an insi(ni6-ant mista5e -ommitte+ &itho2t mali-e orprevari-ation. The list of those &ho atten+e+ the or(ani7ationalmeetin( sho&s "B mem*ers, as evi+en-e+ *y the si(nat2res *esi+etheir han+&ritten names. Th2s, the -erti6-ations 2n+erstatement*y one mem*er, &hile not fa-t2al, &as -learly an error, *2t neithera mislea+in( one nor a misrepresentation of &hat ha+ a-t2ally

happene+.

6i%th. n the more meaty iss2e of the a8+avits of retra-tione'e-2te+ *y si' 2nion mem*ers, &e hol+ that the pro*ative val2eof these a8+avits -annot over-ome those of the s2pportin(a8+avits of " 2nion mem*ers an+ their -o2nsel as to thepro-ee+in(s an+ the -on+2-t of the or(ani7ational meetin( one-em*er B, "##. The LE Re(ional ire-tor an+ the LR Cire-tor o*vio2sly erre+ in (ivin( -re+en-e to the a8+avits of retra-tion, *2t not a--or+in( the same treatment to the s2pportin(a8+avits.

The si' a8ants of the a8+avits of retra-tion &ere not presente+ in

a hearin( *efore the Hearin( 8-er !LE Re(ional ire-tor$, asre<2ire+ 2n+er the R2les mplementin( oo5 F of the La*or Co+e-overin( La*or Relations. Sai+ R2les is em*o+ie+ in epartmentr+er No. !$ 4#)#3 &hi-h &as iss2e+ on 9e*r2ary ;, "##3 an+too5 eIe-t on Mar-h , "##3 to repla-e @ of @@;. Se-. ,R2le V of 4#)#3 spe-i6-ally re<2ires

Se-tion . A8rmation of testimonial evi+en-e. Any a8+avits2*mitte+ *y a party to prove his>her -laims or +efenses shall *ere)a8rme+ *y the presentation of the a8ant*efore the Me+)Ar*iteror Hearin( 8-er, as the -ase may *e. Any a8+avits2*mitte+ &itho2t the re)a8rmation of the a8ant +2rin( as-he+2le+ hearin( shall not *e a+mitte+ in evi+en-e, e'-ept &hen

the party a(ainst &hom the a8+avit is *ein( oIere+ a+mits allalle(ations therein an+ &aives the e'amination of the a8ant.

t is settle+ that a8+avits parta5e the nat2re of hearsay evi+en-e,sin-e they are not (enerally prepare+ *y the a8ant *2t *y another&ho 2ses his o&n lan(2a(e in &ritin( the a8ants statement, &hi-hmay th2s *e either omitte+ or mis2n+erstoo+ *y the one &ritin(them. The a*ove r2le a8rms the (eneral re<2irement ina+versarial pro-ee+in(s for the e'amination of the a8ant *y theparty a(ainst &hom the a8+avit is oIere+. n the instant -ase, it isre<2ire+ for a8ants to re)a8rm the -ontents of their a8+avits+2rin( the hearin( of the instant -ase for them to *e e'amine+ *y

the =nion in the instant -ase. Moreover, the a8+avit an+ ?oint)a8+avits presente+ *y the =nion *efore the LE Re(ionalire-tor &ere +2ly re)a8rme+ in the hearin( of Mar-h "#, "##B *ythe a8ants. Th2s, a reversi*le error &as -ommitte+ *y the LERe(ional ire-tor an+ the LR C ire-tor in (ivin( -re+en-e tothe ina+missi*le a8+avits of retra-tion presente+ *y Ea(le Ri+(e

&hile not (ivin( -re+en-e to the +2ly re)a8rme+ a8+avitspresente+ *y the =nion.

Evi+ently, the alle(ations in the si' a8+avits of retra-tion have nopro*ative val2e an+ at the very least -annot o2t&ei(h the re*2ttin(attestations of the +2ly re)a8rme+ a8+avits presente+ *ythe =nion.

6eventh. The fa-t that si' 2nion mem*ers, in+ee+, e'presse+ the+esire to &ith+ra& their mem*ership thro2(h their a8+avits of retra-tion &ill not -a2se the -an-ellation of re(istration on the(ro2n+ of violation of Art. "34!-$ of the La*or Co+e re<2irin( theman+atory minim2m "# mem*ership of ran5)an+)6le employees

in the employees 2nion. The si' retra-tin( 2nion mem*ers -learly severe+ an+ &ith+re&their 2nion mem*ership. The <2ery is &hether s2-h separationfrom the =nion -an +etrimentally aIe-t the re(istration of the =nion.

T&enty per-ent !"#$ of " ran5)an+)6le employees in Ea(leRi+(e &o2l+ re<2ire a 2nion mem*ership of at least "" employees!" ' "# Y "".4$. Dhen the ERE= 6le+ its appli-ation forre(istration on e-em*er @, "##, there &ere -learly 3# 2nionmem*ers. Th2s, &hen the -erti6-ate of re(istration &as (rante+,there is no +isp2te that the =nion -omplie+ &ith the man+atory

"# mem*ership re<2irement.esi+es, it -annot *e ar(2e+ that the si' a8+avits of retra-tionretroa-t to the time of the appli-ation of re(istration or even &ay*a-5 to the or(ani7ational meetin(. rior to their &ith+ra&al, thesi' employees in <2estion &ere bona &de 2nion mem*ers. More so,they never +isp2te+ a8'in( their si(nat2res *esi+e theirhan+&ritten names +2rin( the or(ani7ational meetin(s. Dhile theyalle(e+ that they +i+ not 5no& &hat they &ere si(nin(, it *earsstressin( that their a8+avits of retra-tion &ere not re)a8rme++2rin( the hearin(s of the instant -ase ren+erin( them of little, if any, evi+entiary val2e.

#

Dith the &ith+ra&al of si' 2nion mem*ers, there is still -omplian-e&ith the man+atory mem*ership re<2irement 2n+er Art. "34!-$, forthe remainin( "4 2nion mem*ers -onstit2te more than the "#mem*ership re<2irement of "" employees.

-erti6-ation ele-tion ha+ *een 6le+. The initial 6ve a8+avits of retra-tion &ere e'e-2te+ on 9e*r2ary , "##B0 the si'th, on Mar-h, "##B. n+isp2ta*ly, all si' &ere e'e-2te+ &ay after the 6lin( of the petition for -erti6-ation ele-tion on :an2ary #, "##B.



p < p y

Ea(le Ri+(e f2rther ar(2es that the list of 2nion mem*ers in-l2+esa s2pervisory employee. This is a fa-t2al iss2e &hi-h ha+ not *eenraise+ at the 6rst instan-e *efore the LE Re(ional ire-tor an+-annot *e appre-iate+ in this pro-ee+in(. To *e s2re, Ea(le Ri+(e5no&s &ell &ho amon( its personnel *elon(s or +oes not *elon( to

the s2pervisory (ro2p. *vio2sly, its attempt to raise the iss2ereferre+ to is no more than an aftertho2(ht an+ o2(ht to *ere?e-te+.

Eighth. 9inally, it may not *e amiss to note, (iven the fa-t2alante-e+ents of the instant -ase, that Ea(le Ri+(e has apparentlyresorte+ to 6lin( the instant -ase for -an-ellation of the =nions-erti6-ate of re(istration to *ar the hol+in( of a -erti6-ationele-tion. This -an *e (leane+ from the fa-t that the (ro2n+s itraise+ in its opposition to the petition for -erti6-ation ele-tion are*asi-ally the same (ro2n+s it resorte+ to in the instant -ase for-an-ellation of ERE=s -erti6-ate of re(istration. This amo2nts to a-lear -ir-2mvention of the la& an+ -annot *e -o2ntenan-e+.

9or -larity, &e reiterate the follo&in( 2n+isp2te+ ante-e+ent fa-ts

!$ n e-em*er B, "##, the =nion &as or(ani7e+, &ith "Bemployees of Ea(le Ri+(e atten+in(0

!"$ n e-em*er @, "##, the =nion 6le+ its formal appli-ation forre(istration in+i-atin( a total of 3# 2nion mem*ers &ith thein-l2sion of fo2r a++itional mem*ers on e-em*er , "## !Re(.Cert. No. R4##)"##")=R)##3 &as event2ally iss2e+ *y theLE R F)A$0

!3$ n :an2ary #, "##B, the =nion 6le+ *efore the LE R F)Aits petition for -erti6-ation ele-tion in Ea(le Ri+(e0

!4$ n 9e*r2ary 3, "##B, Ea(le Ri+(e 6le+ its osition aperopposin( the petition for -erti6-ation ele-tion on essentially thesame (ro2n+s it raise+ in the instant -ase0 an+

!$ n 9e*r2ary "4, "##B, Ea(le Ri+(e 6le+ the instant -ase for-an-ellation of the =nions -erti6-ate of re(istration on essentiallythe same (ro2n+s it raise+ in its opposition to the =nions petitionfor -erti6-ation ele-tion.

Evi+ently, as the =nion pers2asively ar(2es, the &ith+ra&al of si'mem*er)employees from the =nion &ill aIe-t neither the =nionsre(istration nor its petition for -erti6-ation ele-tion, as theira8+avits of retra-tion &ere e'e-2te+ after the =nions petition for

p : y

n Eastland Manu'acturing Co$(an. Inc" v" Noriel, the Co2rtemphasi7e+, an+ reiterate+ its earlier r2lin(s, that even if there&ere less than 3# Kthe re<2ire+ per-enta(e of minim2mmem*ership then of the employees as5in( for a -erti6-ationele-tion, that of itself &o2l+ not *e a *ar to respon+ent ire-tor

or+erin( s2-h an ele-tion provi+e+, of -o2rse, there is no (ravea*2se of +is-retion. Citin( Phili((ine Association o' *ree Labor !nions v" #ureau o' Labor Relations, the Co2rt emphasi7e+ that a-erti6-ation ele-tion is the most appropriate pro-e+2re for the+esire+ (oal of as-ertainin( &hi-h of the -ompetin( or(ani7ationssho2l+ represent the employees for the p2rpose of -olle-tive*ar(ainin(.

n+ee+, &here the -ompany see5s the -an-ellation of a 2nionsre(istration +2rin( the pen+en-y of a petition for -erti6-ationele-tion, the same (ro2n+s invo5e+ to -an-el sho2l+ not *e 2se+ to*ar the -erti6-ation ele-tion. A -erti6-ation ele-tion is the moste'pe+itio2s an+ fairest mo+e of as-ertainin( the &ill of a -olle-tive

*ar(ainin( 2nit as to its -hoi-e of its e'-l2sive representative. t isthe fairest an+ most eIe-tive &ay of +eterminin( &hi-h la*oror(ani7ation -an tr2ly represent the &or5in( for-e. t is af2n+amental post2late that the &ill of the ma?ority, if (ivene'pression in an honest ele-tion &ith free+om on the part of thevoters to ma5e their -hoi-e, is -ontrollin(.

The Co2rt en+s this +isposition *y repro+2-in( the follo&in(apt e'-epts from its hol+in( in S"S" Ventures International Inc" v"S"S" Ventures Labor !nion SSVL! on the eIe-t of the &ith+ra&alfrom 2nion mem*ership ri(ht *efore or after the 6lin( of a petitionfor -erti6-ation ele-tion

De are not pers2a+e+. As aptly note+ *y *oth the LR an+CA, these mostly 2n+ate+ &ritten statements s2*mitte+ *yFent2res on Mar-h "#, "##, or seven months after it 6le+ itspetition for -an-ellation of re(istration, parta5e of the nat2re of &ith+ra&al of 2nion mem*ership e'e-2te+ after the =nions 6lin( of a petition for -erti6-ation ele-tion on Mar-h ", "###. We have inprecedent cases said that the employees withdrawal from alabor union made before the 3ling of the petition forcerti3cation election is presumed voluntary!whilewithdrawal after the 3ling of such petition isconsidered to be involuntary and does not a9ect thesame. No& then, if a withdrawal from union membership

#@

done after a petition for certi3cation election has been 3leddoes not vitiate such petition! is it not but logical toassume that such withdrawal cannot wor' to nullify theregistration of the unionW =pon this li(ht, the Co2rt is in-line+to a(ree &ith the CA that the LR +i+ not a*2se its +is-retion nor

hil. 3B !@@B$, the Co2rt r2le+ that it &asnot necessary for the-harter -erti6-ate to *e -erti6e+ an+ atteste+ *y the lo-al>-haptero8-ers. Id. While this ruling was based on the interpretationof the previous Implementing Rules provisions which weresupplanted by the >::- amendments &e *elieve that the



to a(ree &ith the CA that the LR +i+ not a*2se its +is-retion nor(ravely err &hen it -on-l2+e+ that the a8+avits of retra-tion of the" mem*ers ha+ no evi+entiary &ei(ht. !Emphasis s2pplie+.$

Samahan( Man(a(a&a Sa Charter Chemi-al

!SMCC)S=ER$ v. Charter Chemi-al an+ Coatin(

Corp. Mar-h B, "# The then prevailin( Se-tion , R2le F of the mplementin( R2les of oo5 F, as amen+e+ *y .. No. @, series of @@;, provi+es

Se-tion . Chartering and creation o' a local cha(ter A +2lyre(istere+ fe+eration or national 2nion may +ire-tly -reate alo-al>-hapter *y s2*mittin( to the Re(ional 8-e or to the 2rea2t&o !"$ -opies of the follo&in(


!*$ The names of the lo-al>-hapterJs o8-ers, their a++resses, an+the prin-ipal o8-e of the lo-al>-hapter0 an+

!-$ The lo-al>-hapterJs -onstit2tion an+ *y)la&s provi+e+ that&here the lo-al>-hapterJs -onstit2tion an+ *y)la&s Kare the sameas Kthose of the fe+eration or national 2nion, this fa-t shall *ein+i-ate+ a--or+in(ly.


As rea+ily seen, the Sama)saman( ahaya( n( a(sapi atA2thori7ation an+ Listahan n( m(a 2malo sa an(5alahatan(2lon( at m(a S2man()ayon at Na(ratipi5a sa Sali(an( atas arenot amon( the +o-2ments that nee+ to *e s2*mitte+ to theRe(ional 8-e or 2rea2 of La*or Relations in or+er to re(ister ala*or or(ani7ation. As to the -harter -erti6-ate, the a*ove)<2ote+r2le in+i-ates that it sho2l+ *e e'e-2te+ 2n+er oath. etitioner2nion -on-e+es an+ the re-or+s -on6rm that its -harter -erti6-ate&as not e'e-2te+ 2n+er oath. Ho&ever, in San Miguel Cor(orationMandaue Pac-aging Products Plants v" Mandaue Pac-ing ProductsPlants)San Miguel Cor(oration Monthlies Ran-)and)*ile !nion)**7 MPPP)SMPP)SMAMR*!)**7 , &hi-h &as +e-i+e+ 2n+er thea2spi-es of .. No. @, Series of @@;, &e r2le+ –

n San Miguel *oods)Cebu #)Meg *eed Plant v" 6on" Lagues$a, 33

supplanted by the >::- amendments, &e *elieve that thesame doctrine obtains in this case. Consi+erin( that the-harter -erti6-ate is prepare+ an+ iss2e+ *y the national 2nion an+not the lo-al>-hapter, it does not ma'e sense to have thelocalDchapters o;cers ' ' ' certify or attest to a documentwhich they had no hand in the preparation of . !Emphasiss2pplie+$

n a--or+an-e &ith this r2lin(, petitioner 2nionJs -harter -erti6-atenee+ not *e e'e-2te+ 2n+er oath. Conse<2ently, it vali+ly a-<2ire+the stat2s of a le(itimate la*or or(ani7ation 2pon s2*mission of !$its -harter -erti6-ate, !"$ the names of its o8-ers, their a++resses,an+ its prin-ipal o8-e, an+ !3$ its -onstit2tion an+ *y)la&s thelast t&o re<2irements havin( *een e'e-2te+ 2n+er oath *y theproper 2nion o8-ials as *orne o2t *y the re-or+s.

The CA fo2n+ that petitioner 2nion has for its mem*ership *othran5)an+)6le an+ s2pervisory employees. Ho&ever, petitioner 2nionso2(ht to represent the *ar(ainin( 2nit -onsistin( of ran5)an+)6leemployees. =n+er Arti-le "4 of the La*or Co+e, s2pervisory

employees are not eli(i*le for mem*ership in a la*or or(ani7ationof ran5)an+)6le employees. Th2s, the appellate -o2rt r2le+ thatpetitioner 2nion -annot *e -onsi+ere+ a le(itimate la*oror(ani7ation p2rs2ant to To.ota Motor Phili((ines v" To.ota Motor Phili((ines Cor(oration Labor !nion!hereinafter To.ota$.

reliminarily, &e note that petitioner 2nion <2estions the fa-t2al6n+in(s of the Me+)Ar*iter, as 2phel+ *y the appellate -o2rt, that" of its mem*ers, -onsistin( of *at-hman, mill operator an+lea+man, are s2pervisory employees. Ho&ever, petitioner 2nionfaile+ to present any re*2ttal evi+en-e in the pro-ee+in(s *elo&after respon+ent -ompany s2*mitte+ in evi+en-e the ?o*

+es-riptions of the aforesai+ employees. The ?o* +es-riptionsin+i-ate that the aforesai+ employees e'er-ise re-ommen+atorymana(erial a-tions &hi-h are not merely ro2tinary *2t re<2ire the2se of in+epen+ent ?2+(ment, hen-e, fallin( &ithin the +e6nition of s2pervisory employees 2n+er Arti-le ""!m$ of the La*or Co+e. 9orthis reason, &e are -onstraine+ to a(ree &ith the Me+)Ar*iter, as2phel+ *y the appellate -o2rt, that petitioner 2nion -onsiste+ of *oth ran5)an+)6le an+ s2pervisory employees.

Nonetheless, the in-l2sion of the aforesai+ s2pervisory employeesin petitioner 2nion +oes not +ivest it of its stat2s as a le(itimatela*or or(ani7ation. The appellate -o2rtJs relian-e on To.ota is

#

mispla-e+ in vie& of this Co2rtJs s2*se<2ent r2lin( in Re(ublic v"Ka%ashi$a Te2tile M'g" Phili((ines Inc" !hereinafter Ka%ashi$a$.nKa%ashi$a, &e e'plaine+ at len(th ho& an+ &hythe To.ota +o-trine no lon(er hol+s s&ay 2n+er the altere+ state of

amen+e+ *y R.A. No. B;, hel+

/Clearly, *ase+ on this provision, a la*or or(ani7ation -ompose+ of *oth ran5)an+)6le an+ s2pervisory employees is no la*oror(ani7ation at all. t -annot, for any (2ise or p2rpose, *e a



the la& an+ r2les appli-a*le to this -ase, vi+

R$A$ ,o$ -> omitted specifying the e%act e9ect anyviolation of the prohibition Fon the co)mingling of supervisory and ran')and)3le employeesG would bring abouton the legitimacy of a labor organiation.

t &as the R2les an+ Re(2lations mplementin( R.A. No. B; !@@Amen+e+ mni*2s R2les$ &hi-h s2pplie+ the +e6-ien-y *yintro+2-in( the follo&in( amen+ment to R2le !Re(istration of =nions$

/Se-. . 7ho $a. 0oin unions" ) ' ' ' S2pervisory employees an+se-2rity (2ar+s shall not *e eli(i*le for mem*ership in a la*oror(ani7ation of the ran5)an+)6le employees *2t may ?oin, assist orform separate la*or or(ani7ations of their o&n0 rovi+e+, thatthose s2pervisory employees &ho are in-l2+e+ in an e'istin( ran5)an+)6le *ar(ainin( 2nit, 2pon the eIe-tivity of Rep2*li- A-t No.B;, shall remain in that 2nit ' ' '. !Emphasis s2pplie+$ an+ R2leF !Representation Cases an+ nternal)=nion ConQi-ts$ of the

mni*2s R2les, vi+ /Se-. . 7here to &le. ) A petition for -erti6-ation ele-tion may *e6le+ &ith the Re(ional 8-e &hi-h has ?2ris+i-tion over theprin-ipal o8-e of the employer. The petition shall *e in &ritin( an+2n+er oath.

Se-. ". 7ho $a. &le. ) Any le(itimate la*or or(ani7ation or theemployer, &hen re<2este+ to *ar(ain -olle-tively, may 6le thepetition.

The petition, &hen 6le+ *y a le(itimate la*or or(ani7ation, shall-ontain, amon( others

' ' ' '

!-$ +es-ription of the *ar(ainin( 2nit &hi-h shall *e the employer2nit 2nless -ir-2mstan-es other&ise re<2ire0 an+ provi+e+ f2rther,that the appropriate *ar(ainin( 2nit of the ran5)an+)6le employeesshall not in-l2+e s2pervisory employees an+>or se-2rity(2ar+s. !Emphasis s2pplie+$

y that provision, any <2estione+ min(lin( &ill prevent another&ise le(itimate an+ +2ly re(istere+ la*or or(ani7ation frome'er-isin( its ri(ht to 6le a petition for -erti6-ation ele-tion.

Th2s, &hen the iss2e of the eIe-t of min(lin( &as *ro2(ht to thefore in To.ota the Co2rt, -itin( Arti-le "4 of the La*or Co+e, as

( , y ( p p ,le(itimate la*or or(ani7ation. Not *ein( one, an organiationwhich carries a mi%ture of ran')and)3le and supervisoryemployees cannot possess any of the rights of a legitimatelabor organiation! including the right to 3le a petition forcerti3cation election for the purpose of collectivebargaining$ t *e-omes ne-essary, therefore, anterior to the

granting of an order allowing a certi3cation election! toin#uire into the composition of any labor organiationwhenever the status of the labor organiation is challengedon the basis of Article .? of the Labor "ode$

' ' ' '

n the -ase at *ar, as respon+ent 2nion1s mem*ership list -ontainsthe names of at least t&enty)seven !";$ s2pervisory employees inLevel 9ive positions, the 2nion -o2l+ not, prior to p2r(in( itself of its s2pervisory employee mem*ers, attain the stat2s of ale(itimate la*or or(ani7ation. Not *ein( one, it -annot possess there<2isite personality to 6le a petition for -erti6-ation ele-tion./!Emphasis s2pplie+$

n Dunlo(, in &hi-h the la*or or(ani7ation that 6le+ a petition for-erti6-ation ele-tion &as one for s2pervisory employees, *2t in&hi-h the mem*ership in-l2+e+ ran5)an+)6le employees, the Co2rtreiterate+ that s2-h la*or or(ani7ation ha+ no le(al ri(ht to 6le a-erti6-ation ele-tion to represent a *ar(ainin( 2nit -ompose+ of s2pervisors for as lon( as it -o2nte+ ran5)an+)6le employeesamon( its mem*ers.

t sho2l+ *e emphasi7e+ that the petitions for -erti6-ation ele-tioninvolve+ in To.ota an+ Dunlo( &ere 6le+ on Novem*er "B, @@"an+ Septem*er , @@, respe-tively0 hen-e, the @@ R2les &asapplie+ in *oth -ases.

2t then, on :2ne ", @@;, the @@ Amen+e+ mni*2s R2les &asf2rther amen+e+ *y epartment r+er No. @, series of @@; !@@;Amen+e+ mni*2s R2les$. Spe-i6-ally, the re<2irement 2n+er Se-."!-$ of the @@ Amen+e+ mni*2s R2les – that the petition for-erti6-ation ele-tion in+i-ate that the *ar(ainin( 2nit of ran5)an+)6le employees has not *een min(le+ &ith s2pervisory employees –&as remove+. nstea+, &hat the @@; Amen+e+ mni*2s R2lesre<2ires is a plain +es-ription of the *ar(ainin( 2nit, th2s

R2le V

Certi6-ation Ele-tions

' ' ' '

Se-. 4. *or$s and contents o' (etition. ) The petition shall *e in&ritin( an+ 2n+er oath an+ shall -ontain, amon( others, thefollo&in( ' ' ' !-$ The +es-ription of the *ar(ainin( 2nit.

e'plaine+ that sin-e the @@; Amen+e+ mni*2s R2les +oes notre<2ire a lo-al or -hapter to provi+e a list of its mem*ers, it &o2l+*e improper for the LE to +eny re-o(nition to sai+ lo-al or-hapter on a--o2nt of any <2estion pertainin( to its in+ivi+2al

*



n Pag(alain 6aulers Inc" v" Tra0ano the Co2rt ha+ o--asion to2phol+ the vali+ity of the @@; Amen+e+ mni*2s R2les, altho2(hthe spe-i6- provision involve+ therein &as only Se-. , R2le F, to&it

/Se-tion. . Chartering and creation o' a localGcha(ter .) A +2ly

re(istere+ fe+eration or national 2nion may +ire-tly -reate alo-al>-hapter *y s2*mittin( to the Re(ional 8-e or to the 2rea2t&o !"$ -opies of the follo&in( a$ a -harter -erti6-ate iss2e+ *ythe fe+eration or national 2nion in+i-atin( the -reation oresta*lishment of the lo-al>-hapter0 !*$ the names of thelo-al>-hapter1s o8-ers, their a++resses, an+ the prin-ipal o8-e of the lo-al>-hapter0 an+ !-$ the lo-al> -hapter1s -onstit2tion an+ *y)la&s0 provi+e+ that &here the lo-al>-hapter1s -onstit2tion an+ *y)la&s is the same as that of the fe+eration or national 2nion, thisfa-t shall *e in+i-ate+ a--or+in(ly.

All the fore(oin( s2pportin( re<2irements shall *e -erti6e+ 2n+eroath *y the Se-retary or the Treas2rer of the lo-al>-hapter an+atteste+ to *y its resi+ent./

&hi-h +oes not re<2ire that, for its -reation an+ re(istration, a lo-alor -hapter s2*mit a list of its mem*ers.

Then -ame Taga.ta. 6ighlands IntBl" 3ol' Club Inc" v" Taga.ta. 6ighlands E$(lo.ees !nion)P3T7/ in &hi-h the -ore iss2e &as&hether min(lin( aIe-ts the le(itima-y of a la*or or(ani7ation an+its ri(ht to 6le a petition for -erti6-ation ele-tion. This time, (iventhe altere+ le(al milie2, the Co2rt a*an+one+ the vie&in To.ota an+ Dunlo(an+ reverte+ to its prono2n-ementin Lo(e+ that &hile there is a prohi*ition a(ainst the min(lin( of s2pervisory an+ ran5)an+)6le employees in one la*or or(ani7ation,the La*or Co+e +oes not provi+e for the eIe-ts thereof. Th2s, theCo2rt hel+ that after a la*or or(ani7ation has *een re(istere+, itmay e'er-ise all the ri(hts an+ privile(es of a le(itimate la*oror(ani7ation. Any min(lin( *et&een s2pervisory an+ ran5)an+)6leemployees in its mem*ership -annot aIe-t its le(itima-y for that isnot amon( the (ro2n+s for -an-ellation of its re(istration, 2nlesss2-h min(lin( &as *ro2(ht a*o2t *y misrepresentation, falsestatement or fra2+ 2n+er Arti-le "3@ of the La*or Co+e.

n San Miguel Cor(" Mandaue Pac-aging Products Plants v"Mandaue Pac-ing Products Plants)San Miguel Pac-aging Products)San Miguel Cor(" Monthlies Ran-)and)*ile !nion)**7 the Co2rt

mem*ers.

More to the point is Air Phili((ines Cor(oration v" #ureau o' Labor Relations &hi-h involve+ a petition for -an-ellation of 2nionre(istration 6le+ *y the employer in @@@ a(ainst a ran5)an+)6lela*or or(ani7ation on the (ro2n+ of mi'e+ mem*ership the Co2rt

therein reiterate+ its r2lin( inTaga.ta. 6ighlands

that the in-l2sionin a 2nion of +is<2ali6e+ employees is not amon( the (ro2n+s for-an-ellation, 2nless s2-h in-l2sion is +2e to misrepresentation,false statement or fra2+ 2n+er the -ir-2mstan-es en2merate+ inSe-tions !a$ an+ !-$ of Arti-le "3@ of the La*or Co+e.

All sai+, &hile the latest iss2an-e is R.A. No. @4, the @@;Amen+e+ mni*2s R2les, as interprete+ *y the Co2rt in Taga.ta. 6ighlands, San Miguel an+ Air Phili((ines ha+ alrea+y set the tonefor it. To.ota an+ Dunlo(no lon(er hol+ s&ay in the present altere+state of the la& an+ the r2les. K=n+erline s2pplie+

The appli-a*le la& an+ r2les in the instant -ase are the same as

those in Ka%ashi$a *e-a2se the present petition for -erti6-ationele-tion &as 6le+ in @@@ &hen .. No. @, series of @@;, &as stillin eIe-t. Hen-e, Ka%ashi$aa applies &ith e<2al for-e here. As ares2lt, petitioner 2nion &as not +iveste+ of its stat2s as ale(itimate la*or or(ani7ation even if some of its mem*ers &eres2pervisory employees0 it ha+ the ri(ht to 6le the s2*?e-t petitionfor -erti6-ation ele-tion.

The legal (ersonalit. o' (etitioner union cannot be collaterall. attac-ed b. res(ondent co$(an. in the certi&cation election (roceedings"

etitioner 2nion -orre-tly ar(2es that its le(al personality -annot *e

-ollaterally atta-5e+ in the -erti6-ation ele-tion pro-ee+in(s. As &ee'plaine+ in Ka%ashi$a

E'-ept &hen it is re<2este+ to *ar(ain -olle-tively, an employer isa mere *ystan+er to any petition for -erti6-ation ele-tion0 s2-hpro-ee+in( is non)a+versarial an+ merely investi(ative, for thep2rpose thereof is to +etermine &hi-h or(ani7ation &ill representthe employees in their -olle-tive *ar(ainin( &ith the employer. The-hoi-e of their representative is the e'-l2sive -on-ern of theemployees0 the employer -annot have any partisan interesttherein0 it -annot interfere &ith, m2-h less oppose, the pro-ess *y6lin( a motion to +ismiss or an appeal from it0 not even a mere

"

alle(ation that some employees parti-ipatin( in a petition for-erti6-ation ele-tion are a-t2ally mana(erial employees &ill len+an employer le(al personality to *lo-5 the -erti6-ation ele-tion. The employer1s only ri(ht in the pro-ee+in( is to *e noti6e+ ori f + th f

(aha.ag e'e-2te+ *y # E= mem*ers &ho averre+ a*o2t thehol+in( of an or(ani7ational meetin(. The p2*li- respon+ent ?2sti6a*ly favore+ the latter, +eemin( the meetin( to in-l2+e thehol+in( of an ele-tion of o8-ers, for, after all, Art. "34, !*$, Labor Code +oes not itself +istin(2ish *et&een the t&o



informe+ thereof.

The amen+ments to the La*or Co+e an+ its implementin( r2leshave *2ttresse+ that poli-y even more.

o5ohama Tire hils. v. o5ohama Employees

=nion, Mar-h #, "## The Co2rt of Appeals fo2n+ that E= +i+ not -ommit fra2+ ormisrepresentation

Anent &hether an ele-tion of o8-ers &as -on+2-te+ or not, thepetitioner relie+ lar(ely on the adavit of ine+a to s2*stantiateits -laim that no ele-tion of o8-ers &as hel+ *y the2nion.Ho&ever, respon+ent LR ire-tor a--or+e+ (reater-re+en-e to ine+as han+&ritten statement, &herein he ma+ereferen-es to at least " meetin(s he ha+ atten+e+ +2rin( &hi-h heha+ si(ne+ the or(ani7ational +o-2ments, than to ine+aslater adavit , &here*y he +enie+ any 5no&le+(e of the hol+in( of an ele-tion. A per2sal of the a8rmative han+&ritten statement

easily e'plains &hy the p2*li- respon+ent preferre+ it to thene(atin( adavit , to &it

Noon( 2nan( ara& na p2mirma a5o (alin( a5o sa(raveyar+. a(5atapos y2n(pan(ala&an( meetin( (raveyar+ +in a5o, pinapirma a5o+oon sa siyam !@$ na pirason( papel noon( 2ma(an( pa()2&i namin. ' ' '

:2ly ", @@ ) =nan( irmahan

:2ly "B, @@ ) inirmahan 5o an( siyam na piraso

:2ly ";, @@ ) inatatan((al 5o an( a5in( pan(alan salistahan

The petitioner also relie+ on the adavit of Ma. Ra-helle Gon7alesattestin( that there &as no ele-tion of o8-ers, *2t respon+ent LRire-tor +ismisse+ the adavit as nothin( *2t the petitioners*elate+ attempt to esta*lish its -laim a*o2t the ele-tion *ein( hel+-onsi+erin( that Gon7ales +i+ not even intimate s2-h matter in herhan+&ritten resi(nation letter to E=.

Another adavit , that of Arth2r Calma, state+ that no ele-tion &ashel+, *2t, a(ain, respon+ent LR ire-tor (aveCalmas adavit s-ant -onsi+eration *e-a2se the a8ant a+mitte+lyremaine+in the E= o8-e for only "# min2tes. n -ontrast, thep2*li- respon+ent a--or+e+ more &ei(ht to the sa$a)sa$ang

Code, +oes not itself +istin(2ish *et&een the t&o.

Respon+ent LR ire-tor is f2rther assaile+ for not ta5in( into-onsi+eration the adavit assertin( that no ele-tion of o8-ers &asever -on+2-te+, &hi-h ernar+ino avi+, E=s se-on+ vi-epresi+ent, e'e-2te+. The omission is not serio2s eno2(h, ho&ever,*e-a2se the adavit &as s2*mitte+ only &hen the petitionermove+ for the re-onsi+eration of the <2estione+ +e-ision, an+*e-a2se the adavit &as even in-onsistent &ith avi+searlier sinu$(aang sala.sa. , &here*y he atteste+ to hisatten+an-e at the or(ani7ational meetin( an+ to his ele-tionthereat as vi-e presi+ent.

As to the in-l2sion of ine+as si(nat2re in the or(ani7ational+o-2ments, the LR ire-tor -orre-tly r2le+ that evi+en-e to provethe parti-ipation of E= in the fail2re to +elete ine+as si(nat2refrom the or(ani7ational +o-2ments &as &antin(. t is not +enia*lethat ine+a never approa-he+ any o8-er of E=0 an+ that ine+aapproa-he+ a -ertain Tonton &hom he 5ne& to *e a unionorgani+er *2t &ho &as not an o8-er of the 2nion nor an employeeof the -ompany.

f the petitioner &as Ksi- sin-ere an+ intent on this imp2te+ error,its eIort to sho& so +oes not Ksi- appear in the re-or+. Dhatappears is its a*?e-t fail2re to esta*lish Tontons a-t2al i+entity.Thepetitioner seeme+ -ontent in ma5in( the insin2ation in the petitionfor certiorari that Tonton &as &i+ely re-o(ni7e+ as the or(ani7er*ehin+ the -reation of E=. That &as not eno2(h.

n s2m, the LR ire-tor &as neither -apri-io2s nor &himsi-al inhis e'er-ise of ?2+(ment, an+, therefore, +i+ not -ommit (ravea*2se of +is-retion. 9or certiorari to lie, more than mere a*2se of +is-retion is re<2ire+ to *e esta*lishe+ *y the petitioner. Herein, no+e(ree of a*2se of +is-retion &as atten+ant.

T -laims that the Co2rt of Appeals erre+ in 6n+in( that E= +i+

not -ommit fra2+ or misrepresentation. T state+ that

There &as evi+en-e that respon+ent -ommitte+ fra2+ an+misrepresentation in its fail2re to omit the name of Ronal+ ine+aprior to the 6lin( of the respon+ents or(ani7ational +o-2ments &iththe epartment of La*or an+ Employment. n the other han+, theRegional +irector held that there was no election of o;cersthat had ta'en place during respondents allegedorganiational meeting as there was no proof of suchelection. !Emphasis in the ori(inal$

Dhether E= -ommitte+ fra2+ an+ misrepresentation in failin( toremove ine+as si(nat2re from the list of employees &ho

3

s2pporte+ E=s appli-ation for re(istration an+ &hether E=-on+2-te+ an ele-tion of its o8-ers are <2estions of fa-t. They arenot revie&a*le.

The Co2rt of Appeals hel+ that T ha+ the *2r+en of provin( that

i+ respon+ent GLAS 2nion -ommit fra2+ an+ misrepresentationin its appli-ation for 2nion re(istrationW De a(ree &ith the LE)NCR an+ the LR that it +i+ not. E'-ept for the evi+ent+is-repan-ies as to the n2m*er of 2nion mem*ers involve+ asthese appeare+ on the +o-2ments that s2pporte+ the 2nions



The Co2rt of Appeals hel+ that T ha+ the *2r+en of provin( that E= -ommitte+ fra2+ an+ misrepresentation

The -an-ellation of 2nion re(istration at the employers instan-e,&hile permitte+, m2st *e approa-he+ &ith -a2tion an+ stri-ts-r2tiny in or+er that the ri(ht to *elon( to a le(itimate la*oror(ani7ation an+ to en?oy the privile(es app2rtenant to s2-hmem*ership &ill not *e +enie+ to the employees. As the appli-antfor -an-ellation, the petitioner nat2rally ha+ the *2r+en to presentproof s28-ient to &arrant the -an-ellation. The petitioner &as th2se'pe-te+ to satisfa-torily esta*lish that E= -ommitte+misrepresentations, false statements or fra2+ in -onne-tion &iththe ele-tion of its o8-ers, or &ith the min2tes of the ele-tion of o8-ers, or in the list of votes, as e'pressly re<2ire+ in Art. "3@,!-$, Labor Code. 2t, as the respon+ent LR ire-tor has fo2n+ an++etermine+, an+ De f2lly a(ree &ith him, the petitioner simplyfaile+ to +is-har(e its *2r+en.

T -laims that the Co2rt of Appeals erre+ in hol+in( that T ha+the *2r+en of provin( that E= -ommitte+ fra2+ an+misrepresentation. T state+ that

. n the e-ision +ate+ B :an2ary "##4, the Honora*le Co2rt of Appeals 2phel+ the LR ire-tors r2lin( that the petitioner ha+ the*2r+en of provin( that s2*?e-t ele-tion of o8-ers never too5 pla-e.

.B Ho&ever, the petitioner +oes not have the *2r+en of proof vis))vis &hether or not the sai+ ele-tions too5 pla-e. *he respondenthas the burden of proof in showing that an election of o;cers too' place. !Emphasis in the ori(inal$

The Co2rt is not -onvin-e+. T, *ein( the one &hi-h 6le+ thepetition for the revo-ation of E=s re(istration, ha+ the *2r+en of provin( that E= -ommitte+ fra2+ an+ misrepresentation. T ha+the *2r+en of provin( the tr2thf2lness of its a--2sations that E=

fra2+2lently faile+ to remove ine+as si(nat2re from theor(ani7ational +o-2ments an+ that E= fra2+2lentlymisrepresente+ that it -on+2-te+ an ele-tion of o8-ers.

n 6eritage 6otel Manila v" Pinag)Isang 3aling at La-as ng $gaManggaga%a sa 6eritage Manila, the employer 6le+ a petition torevo5e the re(istration of its ran5)an+)6le employees 2nion,a--2sin( it of -ommittin( fra2+ an+ misrepresentation. The Co2rthel+ that the petition &as ri(htf2lly +enie+ *e-a2se the employerfaile+ to prove that the la*or 2nion -ommitte+ fra2+ an+misrepresentation. The Co2rt hel+ that

these appeare+ on the +o-2ments that s2pporte+ the 2nionsappli-ation for re(istration, petitioner company has no otherevidence of the alleged misrepresentation. 2t those+is-repan-ies alone -annot *e ta5en as an in+i-ation thatrespon+ent misrepresente+ the information -ontaine+ in these+o-2ments.

*he charge that a labor organiation committed fraudand misrepresentation in securing its registration is aserious charge and deserves close scrutiny. t is serio2s*e-a2se on-e s2-h -har(e is prove+, the la*or 2nion a-<2ires noneof the ri(hts a--or+e+ to re(istere+ or(ani7ations. "onse#uently!charges of this nature should be clearly established byevidence and the surrounding circumstances. !Emphasiss2pplie+$

. Lo-al =nions an+ 9e+erations

MSMG)=D v. Ramos, G.R. No. 3@#;,

9e*r2ary ", "### This r2lin( of the NLRC is erroneo2s. Altho2(h this Co2rt has r2le+that 2nion se-2rity -la2ses em*o+ie+ in the -olle-tive *ar(ainin(a(reement may *e vali+ly enfor-e+ an+ that +ismissals p2rs2antthereto may li5e&ise *e vali+, this +oes not ero+e the f2n+amentalre<2irement of +2e pro-ess. The reason *ehin+ the enfor-ement of 2nion se-2rity -la2ses &hi-h is the san-tity an+ inviola*ility of -ontra-ts -annot overri+e ones ri(ht to +2e pro-ess.

n the -ase of Cario vs. National La*or Relations Commission, thisCo2rt prono2n-e+ that &hile the -ompany, 2n+er a maintenan-e of mem*ership provision of the -olle-tive *ar(ainin( a(reement, is*o2n+ to +ismiss any employee e'pelle+ *y the 2nion for +isloyalty2pon its &ritten re<2est, this 2n+erta5in( sho2l+ not *e +onehastily an+ s2mmarily. The -ompany a-ts in *a+ faith in +ismissin(a &or5er &itho2t (ivin( him the *ene6t of a hearin(.

/The po&er to +ismiss is a normal prero(ative of the employer.Ho&ever, this is not &itho2t limitation. The employer is *o2n+ toe'er-ise -a2tion in terminatin( the servi-es of his employeesespe-ially so &hen it is ma+e 2pon the re<2est of a la*or 2nionp2rs2ant to the Colle-tive ar(ainin( A(reement, '''. ismissalsm2st not *e ar*itrary an+ -apri-io2s. 2e pro-ess m2st *eo*serve+ in +ismissin( an employee *e-a2se it aIe-ts not only his

4

position *2t also his means of livelihoo+. Employers sho2l+ respe-tan+ prote-t the ri(hts of their employees, &hi-h in-l2+e the ri(ht tola*or./

n the -ase 2n+er s-r2tiny, petitioner 2nion o8-ers &ere e'pelle+

relyin( on the 6n+in(s of the La*or Se-retary that the iss2e of e'p2lsion of petitioner 2nion o8-ers *y the fe+eration is a p2relyintra)2nion matter.

A(ain, s2-h a -ontention is 2ntena*le. Dhile it is tr2e that the iss2e



y, p p*y the fe+eration for alle(e+ly -ommitin( a-ts of +isloyalty an+>orinimi-al to the interest of =LGD an+ in violation of its Constit2tionan+ y)la&s. =pon +eman+ of the fe+eration, the -ompanyterminate+ the petitioners &itho2t -on+2-tin( a separate an+in+epen+ent investi(ation. Respon+ent -ompany +i+ not in<2ireinto the -a2se of the e'p2lsion an+ &hether or not the fe+erationha+ s28-ient (ro2n+s to eIe-t the same. Relyin( merely 2pon thefe+erations alle(ations, respon+ent -ompany terminate+petitioners from employment &hen a separate in<2iry -o2l+ havereveale+ if the fe+eration ha+ a-te+ ar*itrarily an+ -apri-io2sly ine'pellin( the 2nion o8-ers. Respon+ent -ompanys alle(ation thatpetitioners &ere a--or+e+ +2e pro-ess is *elie+ *y the terminationletters re-eive+ *y the petitioners &hi-h state that the +ismissalshall *e i$$ediatel. eIe-tive.

As hel+ in the afore-ite+ -ase of Cario, /the ri(ht of an employee to*e informe+ of the -har(es a(ainst him an+ to reasona*leopport2nity to present his si+e in a -ontroversy &ith either the

-ompany or his o&n 2nion is not &ipe+ a&ay *y a 2nion se-2rity-la2se or a 2nion shop -la2se in a -olle-tive *ar(ainin( a(reement.An employee is entitle+ to *e prote-te+ not only from a -ompany&hi-h +isre(ar+s his ri(hts *2t also from his o&n 2nion thelea+ership of &hi-h -o2l+ yiel+ to the temptation of s&ift an+ar*itrary e'p2lsion from mem*ership an+ mere +ismissal from his ?o*./

Dhile respon+ent -ompany may vali+ly +ismiss the employeese'pelle+ *y the 2nion for +isloyalty 2n+er the 2nion se-2rity -la2seof the -olle-tive *ar(ainin( a(reement 2pon the re-ommen+ation*y the 2nion, this +ismissal sho2l+ not *e +one hastily an+

s2mmarily there*y ero+in( the employees ri(ht to +2e pro-ess,self)or(ani7ation an+ se-2rity of ten2re. The enfor-ement of 2nionse-2rity -la2ses is a2thori7e+ *y la& provi+e+ s2-h enfor-ement isnot -hara-teri7e+ *y ar*itrariness, an+ al&ays &ith +2epro-ess. Even on the ass2mption that the fe+eration ha+ vali+(ro2n+s to e'pell the 2nion o8-ers, +2e pro-ess re<2ires thatthese 2nion o8-ers *e a--or+e+ a separate hearin( *y respon+ent-ompany.

n its +e-ision, p2*li- respon+ent also +e-lare+ that if -omplainants!herein petitioners$ have any re-o2rse in la&, their ri(ht of a-tion isa(ainst the fe+eration an+ not a(ainst the -ompany or its o8-ers,

( ,of e'p2lsion of the lo-al 2nion o8-ers is ori(inally *et&een thelo-al 2nion an+ the fe+eration, hen-e, intra)2nion in -hara-ter, theiss2e &as later on -onverte+ into a termination +isp2te &hen the-ompany +ismisse+ the petitioners from &or5 &itho2t the *ene6t of a separate noti-e an+ hearin(. As a matter of fa-t, the re-or+sreveal that the the termination &as eIe-tive on the same +ay thatthe the termination noti-e &as serve+ on the petitioners.

n the -ase of Li*erty Cotton Mills Dor5ers =nion vs. Li*erty CottonMills, n-., the Co2rt hel+ the -ompany lia*le for the payment of *a-5&a(es for havin( a-te+ in *a+ faith in eIe-tin( the +ismissalof the employees.

/''' a+ faith on the part of the respon+ent -ompany may *e(leane+ from the fa-t that the petitioner &or5ers &ere +ismisse+hastily an+ s2mmarily. At *est, it &as (2ilty of a tortio2s a-t, for&hi-h it m2st ass2me soli+ary lia*ility, sin-e it apparently -hose tos2mmarily +ismiss the &or5ers at the 2nions instan-e se-2re in the

2nions -ontra-t2al 2n+erta5in( that the 2nion &o2l+ hol+ it freefrom any lia*ility arisin( from s2-h +ismissal./

Th2s, not&ithstan+in( the fa-t that the +ismissal &as at theinstan-e of the fe+eration an+ that it 2n+ertoo5 to hol+ the-ompany free from any lia*ility res2ltin( from s2-h a +ismissal, the-ompany may still *e hel+ lia*le if it &as remiss in its +2ty toa--or+ the &o2l+)*e +ismisse+ employees their ri(ht to *e hear+on the matter.

Anent petitioners -ontention that the fe+eration &as not a prin-ipalparty to the -olle-tive *ar(ainin( a(reement *et&een the -ompanyan+ the 2nion, s28-e it to say that the matter &as alrea+y r2le+

2pon in the nterplea+er -ase 6le+ *y respon+ent -ompany. Me+)Ar*iter Anasta-io a-tin th2s r2le+

After a -aref2l e'amination of the fa-ts an+ evi+en-es presente+ *ythe parties, this 8-er here*y ren+ers its +e-ision as follo&s

.$ t appears on re-or+ that in the Colle-tive ar(ainin(A(reement !CA$ &hi-h too5 eIe-t on :2ly , @B, the -ontra-tin(parties are M. Green6el+, n-. !$ an+ Malayan( Samahan n( M(aMan((a(a&a sa M. Green6el+, n-. !$ !MSMG$>=nite+ L2m*er an+General Dor5ers of the hilippines !=LGD$. Ho&ever, MSMG &asnot yet a re(istere+ la*or or(ani7ation at the time of the si(nin( of the CA. Hen-e, the 2nion referre+ to in the CA is the =LGD./

Li5e&ise on appeal, ire-tor 2ra 9errer)Calle?a p2t the iss2e to restas follo&s

t is 2n+isp2te+ that =LGD is the -erti6e+ sole an+ e'-l2sive-olle-tive *ar(ainin( a(ent of all the re(2lar ran5)an+)6le &or5ers

+o&n in the a(reement &hi-h *ro2(ht it into e'isten-e./

Th2s, a lo-al 2nion &hi-h has a8liate+ itself &ith a fe+eration isfree to sever s2-h a8liation anytime an+ s2-h +isa8liation -annot*e -onsi+ere+ +isloyalty. n the a*sen-e of spe-i6- provisions in the



of the -ompany, M. Green6el+, n-. !pa(es 3)3" of the re-or+s$.

t has *een esta*lishe+ also that the -ompany an+ =LGD si(ne+ a3)year -olle-tive *ar(ainin( a(reement eIe-tive :2ly , @B 2p to :2ne 3#, @@.

Altho2(h the iss2e of &hether or not the fe+eration ha+ reasona*le

(ro2n+s to e'pel the petitioner 2nion o8-ers is properly &ithin theori(inal an+ e'-l2sive ?2ris+i-tion of the 2rea2 of La*or Relations,*ein( an intra)2nion -onQi-t, this Co2rt +eems it ?2sti6a*le thats2-h iss2e *e nonetheless r2le+ 2pon, as the La*or Ar*iter +i+, forto reman+ the same to the 2rea2 of La*or Relations &o2l+ *e tointolera*ly +elay the -ase.

The La*or Ar*iter fo2n+ that petitioner 2nion o8-ers &ere ?2sti6a*ly e'pelle+ from the fe+eration for -ommittin( a-ts of +isloyalty &hen it /2n+ertoo5 to +isa8liate from the fe+eration *y-har(in( =LGD &ith fail2re to provi+e any le(al, e+2-ational oror(ani7ational s2pport to the lo-al. ' ' ' an+ +e-lare+ a2tonomy,

&herein they prohi*it the fe+eration from interferin( in any internalan+ e'ternal aIairs of the lo-al 2nion./

n its +e-ision, the La*or Ar*iter +e-lare+ that the a-t of +isa8liation an+ +e-laration of a2tonomy *y the lo-al 2nion &aspart of its /plan to ta5e over the respon+ent fe+eration./ This isp2rely -on?e-t2re an+ spe-2lation on the part of p2*li- respon+ent,totally 2ns2pporte+ *y the evi+en-e.

A lo-al 2nion has the ri(ht to +isa8liate from its mother 2nion or+e-lare its a2tonomy. A lo-al 2nion, *ein( a separate an+ vol2ntaryasso-iation, is free to serve the interests of all its mem*ersin-l2+in( the free+om to +isa8liate or +e-lare its a2tonomy from

the fe+eration to &hi-h it *elon(s &hen -ir-2mstan-es &arrant, ina--or+an-e &ith the -onstit2tional (2arantee of free+om of asso-iation.

The p2rpose of a8liation *y a lo-al 2nion &ith a mother 2nion or afe+eration

/''' is to in-rease *y -olle-tive a-tion the *ar(ainin( po&er inrespe-t of the terms an+ -on+itions of la*or. et the lo-alsremaine+ the *asi- 2nits of asso-iation, free to serve their o&n an+the -ommon interest of all, s2*?e-t to the restraints impose+ *y theConstit2tion an+ y)La&s of the Asso-iation, an+ free also toreno2n-e the a8liation for m2t2al &elfare 2pon the terms lai+

fe+erations -onstit2tion prohi*itin( +isa8liation or the +e-larationof a2tonomy of a lo-al 2nion, a lo-al may +isso-iate &ith its parent2nion.

The evi+en-e on han+ +oes not sho& that there is s2-h a provisionin =LGDs -onstit2tion. Respon+ents relian-e 2pon Arti-le F,

Se-tion B, of the fe+erations -onstit2tion is not ri(ht *e-a2se sai+se-tion, in fa-t, *olsters the petitioner 2nions -laim of its ri(ht to+e-lare a2tonomy

Se-tion B. The a2tonomy of a lo-al 2nion a8liate+ &ith =LGDshall *e respe-te+ insofar as it pertains to its internal aIairs,e'-ept as provi+e+ else&here in this Constit2tion.

There is no +isloyalty to spea5 of, neither is there any violation of the fe+erations -onstit2tion *e-a2se there is nothin( in the sai+-onstit2tion &hi-h spe-i6-ally prohi*its +isa8liation or +e-larationof a2tonomy. Hen-e, there -annot *e any vali+ +ismissal *e-a2seArti-le , Se-tion 4 of the 2nion se-2rity -la2se in the CA limits the

+ismissal to only three !3$ (ro2n+s, to &it fail2re to maintainmem*ership in the 2nion !$ for non)payment of 2nion +2es, !"$ forresi(nation0 an+ !3$ for violation of the 2nions Constit2tion an+ y)La&s.

To s2pport the 6n+in( of +isloyalty, the La*or Ar*iter (ave &ei(htto the fa-t that on 9e*r2ary "B, @@, the petitioners +e-lare+ asva-ant all the responsi*le positions of =LGD, 6lle+ theseva-an-ies thro2(h an ele-tion an+ 6le+ a petition for there(istration of =D as a national fe+eration. t sho2l+ *e pointe+o2t, ho&ever, that these o--2rre+ after the fe+eration ha+ alrea+ye'pelle+ the 2nion o8-ers. The e'p2lsion &as eIe-tive Novem*er", @. Therefore, the a-t of esta*lishin( a +iIerent fe+eration,

entirely separate from the fe+eration &hi-h e'pelle+ them, is *2t anormal retaliatory rea-tion to their e'p2lsion.

hil. S5ylan+ers v. NLRC, G.R. No. ";3;4, 3

:an2ary "##"At the o2tset, let it *e note+ that the iss2e of +isa8liation is aninter)2nion -onQi-t the ?2ris+i-tion of &hi-h properly lies &ith the2rea2 of La*or Relations !LR$ an+ not &ith the La*orAr*iter. Nonetheless, &ith +2e re-o(nition of this fa-t, &e +eem itproper to settle the -ontroversy at this instan-e sin-e to reman+

B

the -ase to the LR &o2l+ only mean intolera*le +elay for theparties.

The ri(ht of a lo-al 2nion to +isa8liate from its mother fe+eration isnot a novel thesis 2nill2mine+ *y -ase la&. n the lan+mar5 -ase

(rantin( of the petitions. t stan+s 2n-hallen(e+ that A9L=instit2te+ the -omplaint for 2nfair la*or pra-ti-e a(ainst the &ishesof &or5ers &hose interests it &as s2ppose+ly prote-tin(. The merea-t of +isa8liation +i+ not +ivest SEA of its o&n personality0neither +i+ it (ive A9L= the li-ense to a-t in+epen+ently of the



yof Libert. Cotton Mills 7or-ers !nion vs" Libert. Cotton MillsInc" &e 2phel+ the ri(ht of lo-al 2nions to separate from theirmother fe+eration on the (ro2n+ that as separate an+ vol2ntaryasso-iations, lo-al 2nions +o not o&e their -reation an+ e'isten-eto the national fe+eration to &hi-h they are a8liate+ *2t, instea+,to the &ill of their mem*ers. The sole essen-e of a8liation is toin-rease, *y -olle-tive a-tion, the -ommon *ar(ainin( po&er of lo-al 2nions for the eIe-tive enhan-ement an+ prote-tion of theirinterests. A+mitte+ly, there are times &hen &itho2t s2--or an+s2pport lo-al 2nions may 6n+ it har+, 2nai+e+ *y other s2pport(ro2ps, to se-2re ?2sti-e for themselves.

et the lo-al 2nions remain the *asi- 2nits of asso-iation, free toserve their o&n interests s2*?e-t to the restraints impose+ *y the-onstit2tion an+ *y)la&s of the national fe+eration, an+ free also toreno2n-e the a8liation 2pon the terms lai+ +o&n in the a(reement&hi-h *ro2(ht s2-h a8liation into e'isten-e.

S2-h +i-t2m has *een p2n-tilio2sly follo&e+ sin-e then.=pon an appli-ation of the afore-ite+ prin-iple to the iss2e at han+,the impropriety of the <2estione+ e-isions *e-omes -learlyapparent. There is nothin( sho&n in the re-or+s nor is it -laime+ *yA9L= that the lo-al 2nion &as e'pressly for*i++en to +isa8liatefrom the fe+eration nor &ere there any -on+itions impose+ for avali+ *rea5a&ay. As s2-h, the pen+en-y of an ele-tion protestinvolvin( *oth the mother fe+eration an+ the lo-al 2nion +i+ not-onstit2te a *ar to a vali+ +isa8liation. Neither &as it +isp2te+ *yA9L= that si(natories o2t of the "# mem*ers of the lo-al2nion, or an e<2ivalent of @". of the total 2nion mem*erships2pporte+ the -laim of +isa8liation an+ ha+ in fa-t +isa2thori7e+

A9L= from instit2tin( any -omplaint in their *ehalf. S2rely, this isnot a -ase &here one !$ or t&o !"$ mem*ers of the lo-al 2nion+e-i+e+ to +isa8liate from the mother fe+eration, *2t it is a -ase&here almost all lo-al 2nion mem*ers +e-i+e+ to +isa8liate.

t &as entirely reasona*le then for S to enter into a -olle-tive*ar(ainin( a(reement &ith SEA)NCD. As SEA ha+ vali+ly severe+itself from A9L=, there &o2l+ *e no restri-tions &hi-h -o2l+ vali+lyhin+er it from s2*se<2ently a8liatin( &ith NCD an+ enterin( into a-olle-tive *ar(ainin( a(reement in *ehalf of its mem*ers.

There is a f2rther -onsi+eration that li5e&ise ar(2es for the

neither +i+ it (ive A9L= the li-ense to a-t in+epen+ently of thelo-al 2nion. Re-reant to its mission, A9L= -annot simply i(nore the+eman+s of the lo-al -hapter an+ +e-i+e for its &elfare. A9L=mi(ht have for(otten that as an a(ent it -o2l+ only a-t inrepresentation of an+ in a--or+an-e &ith the interests of the lo-al2nion. The -omplaint then for 2nfair la*or pra-ti-e lo+(e+ *y A9L=

a(ainst S, SEA an+ their respe-tive o8-ers, havin( *een 6le+ *ya party &hi-h has no le(al personality to instit2te the -omplaint,sho2l+ have *een +ismisse+ at the 6rst instan-e for fail2re to statea -a2se of a-tion.

oli-y -onsi+erations +i-tate that in &ei(hin( the -laims of a lo-al2nion as a(ainst those of a national fe+eration, those of the formerm2st *e preferre+. arentheti-ally tho2(h, the +esires of themother fe+eration to prote-t its lo-als are not alto(ether to *esh2nne+. t &ill ho&ever *e to err (reatly a(ainst the Constit2tion if the +esires of the fe+eration &o2l+ *e favore+ over those of itsmem*ers. That, at any rate, is the poli-y of the la&. 9or if it &ereother&ise, instea+ of prote-tion, there &o2l+ *e +isre(ar+ an+ne(le-t of the lo&ly &or5in(men.

:. Can-ellation of Re(istration

Mari&asa v. Se-. of LE, B# SCRA ;#B The petitioner insists that respon+ent faile+ to -omply &ith the "#2nion mem*ership re<2irement for its re(istration as a le(itimatela*or or(ani7ation *e-a2se of the +isa8liation from the totaln2m*er of 2nion mem*ers of #" employees &ho e'e-2te+a8+avits re-antin( their 2nion mem*ership.

t is, th2s, imperative that &e per2se the a8+avits appearin( tohave *een e'e-2te+ *y these a8ants. Evi+ently, these a8+avits&ere &ritten an+ prepare+ in a+van-e, an+ the pro forma a8+avits&ere rea+y to *e 6lle+ o2t &ith the employeesJ names an+si(nat2res.

The 6rst -ommon alle(ation in the a8+avits is a +e-laration that, inspite of his hesitation, the a8ant &as for-e+ an+ +e-eive+ into ?oinin( the respon+ent 2nion. t is &orthy to note, ho&ever, that thea8+avit +oes not mention the i+entity of the people &ho alle(e+lyfor-e+ an+ +e-eive+ the a8ant into ?oinin( the 2nion, m2-h lessthe -ir-2mstan-es that -onstit2te+ s2-h for-e an+ +e-eit. n+ee+,

;

not only &as this alle(ation -o2-he+ in very (eneral terms an+s&eepin( in nat2re, *2t more importantly, it &as not s2pporte+ *yany evi+en-e &hatsoever.

The se-on+ alle(ation ostensi*ly *ares the a8antJs re(ret for

n the instant -ase, the a8+avits of re-antation &ere e'e-2te+ afterthe i+entities of the 2nion mem*ers *e-ame p2*li-, i.e., after the2nion 6le+ a petition for -erti6-ation ele-tion on May "3, "##,sin-e the names of the mem*ers &ere atta-he+ to the petition. Thep2rporte+ &ith+ra&al of s2pport for the re(istration of the 2nion



?oinin( respon+ent 2nion an+ e'presses the +esire to a*an+on orrene(e from &hatever a(reement he may have si(ne+ re(ar+in(his mem*ership &ith respon+ent.

Simply p2t, thro2(h these a8+avits, it is ma+e to appear that thea8ants re-ante+ their s2pport of respon+entJs appli-ation for

re(istration.

n appre-iatin( a8+avits of re-antation s2-h as these, o2r r2lin( inLa S2erte Ci(ar an+ Ci(arette 9a-tory v. ire-tor of the 2rea2 of La*or Relations is enli(htenin(, vi7.

n the se-on+ iss2e&hether or not the &ith+ra&al of 3 2nionmem*ers from NAT= aIe-te+ the petition for -erti6-ation ele-tioninsofar as the 3# re<2irement is -on-erne+, De reserve the r+erof the respon+ent ire-tor of the 2rea2 of La*or Relations, itappearin( 2n+isp2ta*ly that the 3 2nion mem*ers ha+ &ith+ra&ntheir s2pport to the petition *efore the 6lin( of sai+ petition. t&o2l+ *e other&ise if the &ith+ra&al &as ma+e after the 6lin( of

the petition for it &o2l+ then *e pres2me+ that the &ith+ra&al &asnot free an+ vol2ntary. The pres2mption &o2l+ arise that the&ith+ra&al &as pro-2re+ thro2(h +2ress, -oer-ion or for val2a*le-onsi+eration. n other &or+s, the +istin-tion m2st *e that&ith+ra&als ma+e *efore the 6lin( of the petition are pres2me+vol2ntary 2nless there is -onvin-in( proof to the -ontrary, &hereas&ith+ra&als ma+e after the 6lin( of the petition are +eeme+invol2ntary.

The reason for s2-h +istin-tion is that if the &ith+ra&al or retra-tionis ma+e *efore the 6lin( of the petition, the names of employeess2pportin( the petition are s2ppose+ to *e hel+ se-ret to the

opposite party. Lo(i-ally, any s2-h &ith+ra&al or retra-tion sho&svol2ntariness in the a*sen-e of proof to the -ontrary. Moreover, it*e-omes apparent that s2-h employees ha+ not (iven -onsent tothe 6lin( of the petition, hen-e the s2*s-ription re<2irement hasnot *een met.

Dhen the &ith+ra&al or retra-tion is ma+e after the petition is 6le+,the employees &ho are s2pportin( the petition *e-ome 5no&n tothe opposite party sin-e their names are atta-he+ to the petition atthe time of 6lin(. Therefore, it &o2l+ not *e 2ne'pe-te+ that theopposite party &o2l+ 2se fo2l means for the s2*?e-t employees to&ith+ra& their s2pport.

p2rporte+ &ith+ra&al of s2pport for the re(istration of the 2nion&as ma+e after the +o-2ments &ere s2*mitte+ to the LE, Re(ionF)A. The lo(i-al -on-l2sion, therefore, follo&in( ?2rispr2+en-e, isthat the employees &ere not totally free from the employerJspress2re, an+ so the vol2ntariness of the employeesJ e'e-2tion of the a8+avits *e-omes s2spe-t.

t is li5e&ise nota*le that the 6rst *at-h of " pro forma a8+avitssho&s that the a8+avits &ere e'e-2te+ *y the in+ivi+2al a8antson +iIerent +ates from May "B, "## 2ntil :2ne 3, "##, *2t they&ere all s&orn *efore a notary p2*li- on :2ne , "##.

There &as also a se-on+ set of stan+ar+i7e+ a8+avits e'e-2te+ on+iIerent +ates from May "B, "## 2ntil :2ly B, "##. Dhile these ;;a8+avits &ere notari7e+ on +iIerent +ates, B of these &erenotari7e+ on :2ne , "##, the very same +ate &hen the 6rst set of " &as notari7e+.

Consi+erin( that the 6rst set of " a8+avits &as s2*mitte+ to theLE on :2ne 4, "##, it is s2rprisin( &hy petitioner &as a*le tos2*mit the se-on+ set of a8+avits only on :2ly ", "##.

A--or+in(ly, &e -annot (ive f2ll -re+en-e to these a8+avits, &hi-h&ere e'e-2te+ 2n+er s2spi-io2s -ir-2mstan-es, an+ &hi-h -ontainalle(ations 2ns2pporte+ *y evi+en-e. At *est, these a8+avits areself)servin(. They possess no pro*ative val2e.

A retra-tion +oes not ne-essarily ne(ate an earlier +e-laration. 9orthis reason, retra-tions are loo5e+ 2pon &ith +isfavor an+ +o nota2tomati-ally e'-l2+e the ori(inal statement or +e-laration *ase+solely on the re-antation. t is imperative that a +etermination *e6rst ma+e as to &hi-h *et&een the ori(inal an+ the ne&

statements sho2l+ *e (iven &ei(ht or a--or+e+ *elief, applyin( the(eneral r2les on evi+en-e. n this -ase, inasm2-h as they remain*are alle(ations, the p2rporte+ re-antations sho2l+ not *e 2phel+.

Nevertheless, even ass2min( the vera-ity of the a8+avits of re-antation, the le(itima-y of respon+ent as a la*or or(ani7ationm2st *e a8rme+. Dhile it is tr2e that the &ith+ra&al of s2pportmay *e -onsi+ere+ as a resi(nation from the 2nion, the fa-tremains that at the time of the 2nionJs appli-ation for re(istration,the a8ants &ere mem*ers of respon+ent an+ they -omprise+ morethan the re<2ire+ "# mem*ership for p2rposes of re(istration asa la*or 2nion. Arti-le "34 of the La*or Co+e merely re<2ires a "#

minim2m mem*ership +2rin( the appli-ation for 2nion re(istration.t +oes not man+ate that a 2nion m2st maintain the "# minim2mmem*ership re<2irement all thro2(ho2t its e'isten-e.

Respon+ent asserts that it ha+ a total of ;3 2nion mem*ers at the

RI1@*6 O& LABOR OR1A,I5A*IO,6



time it applie+ for re(istration. T&o names &ere repeate+ inrespon+entJs list an+ ha+ to *e +e+2-te+, *2t the total &o2l+ still*e ; 2nion mem*ers. 92rther, o2t of the fo2r names alle(e+ to*e no lon(er -onne-te+ &ith petitioner, only t&o names sho2l+ *e+elete+ from the list sin-e iana Motilla an+ T.D. Am2tan resi(ne+from petitioner only on May #, "## an+ May ;, "##,respe-tively, or after respon+entJs re(istration ha+ alrea+y *een(rante+. Th2s, the total 2nion mem*ership at the time of re(istration &as B@. Sin-e the total n2m*er of ran5)an+)6leemployees at that time &as ", B@ employees &o2l+ *ee<2ivalent to 3" of the total ran5)an+)6le &or5ers -omplement,still very m2-h a*ove the minim2m re<2ire+ *y la&.

9or the p2rpose of +e)-ertifyin( a 2nion s2-h as respon+ent, it m2st*e sho&n that there &as misrepresentation, false statement orfra2+ in -onne-tion &ith the a+option or rati6-ation of the-onstit2tion an+ *y)la&s or amen+ments thereto0 the min2tes of rati6-ation0 or, in -onne-tion &ith the ele-tion of o8-ers, the

min2tes of the ele-tion of o8-ers, the list of voters, or fail2re tos2*mit these +o-2ments to(ether &ith the list of the ne&ly ele-te+)appointe+ o8-ers an+ their postal a++resses to the LR.

The *are fa-t that t&o si(nat2res appeare+ t&i-e on the list of those &ho parti-ipate+ in the or(ani7ational meetin( &o2l+ not, too2r min+, provi+e a vali+ reason to -an-el respon+entJs -erti6-ateof re(istration. The -an-ellation of a 2nionJs re(istration +o2*tlesshas an impairin( +imension on the ri(ht of la*or to self)or(ani7ation. 9or fra2+ an+ misrepresentation to *e (ro2n+s for-an-ellation of 2nion re(istration 2n+er the La*or Co+e, the nat2reof the fra2+ an+ misrepresentation m2st *e (rave an+ -ompellin(

eno2(h to vitiate the -onsent of a ma?ority of 2nion mem*ers.n this -ase, &e a(ree &ith the LR an+ the CA that respon+ent-o2l+ not have possi*ly -ommitte+ misrepresentation, fra2+, orfalse statements. The alle(e+ fail2re of respon+ent to in+i-ate &ithmathemati-al pre-ision the total n2m*er of employees in the*ar(ainin( 2nit is of no moment, espe-ially as it &as a*le to -omply&ith the "# minim2m mem*ership re<2irement. Even if the totaln2m*er of ran5)an+)6le employees of petitioner is ", &hilerespon+ent +e-lare+ that it sho2l+ only *e 4, it still -annot *e+enie+ that the latter &o2l+ have more than -omplie+ &ith there(istration re<2irement.

@

4E4BER6@I=2 RI1@*6 O& 4E4BER6

ala-ol, et al vs. 2ra 9errer)Calle?a, G.R. No.

333 9 * "B @@#

S2*stantial -omplian-e is not eno2(h in vie& of the fa-t that thespe-ial assessment &ill +iminish the -ompensation of the 2nionmem*ers. Their e'press -onsent is re<2ire+, an+ this -onsent m2st*e o*taine+ in a--or+an-e &ith the steps o2tline+ *y la&, &hi-h

* f ll + h l N h ll +



333, 9e*r2ary "B, @@#etitioners alle(e that the respon+ent)ire-tor -ommitte+ a (ravea*2se of +is-retion amo2ntin( to la-5 or e'-ess of ?2ris+i-tion &henshe hel+ Arti-le "4 !n$ of the La*or Co+e to *e the appli-a*leprovision instea+ of Arti-le """!*$ in relation to Arti-le "4!o$ of the

same la&.A--or+in( to petitioners, a -2rsory e'amination an+ -omparison of the t&o provisions of Arti-le "4 reveals that para(raph !n$ -annotprevail over para(raph !o$. The reason a+van-e+ is that a spe-ialassessment is not a matter of ma?or poli-y aIe-tin( the entire2nion mem*ership *2t is one &hi-h -on-erns the in+ivi+2al ri(htsof 2nion mem*ers.

etitioners f2rther assert that ass2min( arguendo that Arti-le"4!n$ sho2l+ prevail over para(raph !o$, the =nion hasnevertheless faile+ to -omply &ith the pro-e+2re to le(itimi7e the<2estione+ spe-ial assessment *y !$ presentin( mere min2tes of

lo-al mem*ership meetin(s instea+ of a &ritten resol2tion0 !"$failin( to -all a (eneral mem*ership meetin(0 !3$ havin( themin2tes of three !3$ lo-al mem*ership meetin(s re-or+e+ *y a2nion +ire-tor, an+ not *y the 2nion se-retary as re<2ire+0 !4$failin( to have the list of mem*ers present in-l2+e+ in the min2tesof the meetin(s0 an+ !$ failin( to present a re-or+ of the votes-ast. etitioners -on-l2+e+ their ar(2ment *y -itin(3alvadores.

After a -aref2l revie& of the re-or+s of this -ase, De are -onvin-e+that the +e+2-tion of the # spe-ial assessment *y the =nion &asnot ma+e in a--or+an-e &ith the re<2irements provi+e+ *y la&.

etitioners are -orre-t in -itin( the r2lin( of this Co2rt

in 3alvadores &hi-h is appli-a*le to the instant -ase. The prin-iple/that employees are prote-te+ *y la& from 2n&arrante+ pra-ti-esthat +iminish their -ompensation &itho2t their 5no&n e+(ean+ consent / is in a--or+ &ith the -onstit2tional prin-iple of theState aIor+in( f2ll prote-tion to la*or.

The respon+ent)=nion *r2she+ asi+e the +efe-ts pointe+ o2t *ypetitioners in the manner of -omplian-e &ith the le(alre<2irements as /insi(ni6-ant te-hni-alities./ n the -ontrary, thefail2re of the =nion to -omply stri-tly &ith the re<2irements set o2t*y the la& invali+ates the <2estione+ spe-ial assessment.

m2st *e follo&e+ to the letter. No short-2ts are allo&e+.

The appli-a*le provisions are -lear. The =nion itself a+mits that*oth para(raphs !n$ an+ !o$ of Arti-le "4 apply. ara(raph !n$refers to /levy/ &hile para(raph !o$ refers to /-he-5)oI/ of a spe-ialassessment. oth provisions m2st *e -omplie+ &ith. =n+er

para(raph !n$, the =nion m2st s2*mit to the Company a &rittenresol2tion of a ma?ority of all the mem*ers at a (eneralmem*ership meetin( +2ly -alle+ for the p2rpose. n a++ition, these-retary of the or(ani7ation m2st re-or+ the min2tes of themeetin( &hi-h, in t2rn, m2st in-l2+e, amon( others, the list of allthe mem*ers present as &ell as the votes -ast.

As earlier o2tline+ *y petitioners, the =nion o*vio2sly faile+ to-omply &ith the re<2irements of para(raph !n$. t hel+ lo-almem*ership meetin(s on separate o--asions, on +iIerent +atesan+ at vario2s ven2es, -ontrary to the e'press re<2irement thatthere m2st *e a (eneral mem*ership meetin(. The -ontention of the =nion that /the lo-al mem*ership meetin(s are pre-isely thevery (eneral meetin(s re<2ire+ *y la&/ is 2ntena*le *e-a2se thela& &o2l+ not have spe-i6e+ a (eneral mem*ership meetin( ha+the le(islative intent *een to allo& lo-al meetin(s in lie2 of thelatter.

t s2*mitte+ only min2tes of the lo-al mem*ership meetin(s &hen&hat is re<2ire+ is a &ritten resol2tion a+opte+ at the (eneralmeetin(. Dorse still, the min2tes of three of those lo-al meetin(shel+ &ere re-or+e+ *y a 2nion +ire-tor an+ not *y the 2nionse-retary. The min2tes s2*mitte+ to the Company -ontaine+ no listof the mem*ers present an+ no re-or+ of the votes -ast. Sin-e it is<2ite evi+ent that the =nion +i+ not -omply &ith the la& at every

t2rn, the only -on-l2sion that may *e ma+e therefrom is that there&as no vali+ levy of the spe-ial assessment p2rs2ant to para(raph!n$ of Arti-le "4 of the La*or Co+e.

ara(raph !o$ on the other han+ re<2ires an in+ivi+2al &rittena2thori7ation +2ly si(ne+ *y every employee in or+er that a spe-ialassessment may *e vali+ly -he-5e+)oI. Even ass2min( that thespe-ial assessment &as vali+ly levie+ p2rs2ant to para(raph !n$,an+ (rantin( that in+ivi+2al &ritten a2thori7ations &ere o*taine+*y the =nion, nevertheless there -an *e no vali+ -he-5)oI -onsi+erin( that the ma?ority of the 2nion mem*ers ha+ alrea+y

"#

&ith+ra&n their in+ivi+2al a2thori7ations. A &ith+ra&al of in+ivi+2ala2thori7ations is e<2ivalent to no a2thori7ation at all. Hen-e, ther2lin( in 3alvadores that /no -he-5)oIs from any amo2nts +2eemployees may *e eIe-te+ &itho2t an in+ivi+2al &rittena2thori7ation si(ne+ *y the employees ... / is appli-a*le.

pointe+ o2t *y the =nion. The t&o other p2rposes, namely, thep2r-hase of vehi-les an+ other items for the *ene6t of the 2niono8-ers an+ the (eneral mem*ership, an+ the payment of servi-esren+ere+ *y 2nion o8-ers, -ons2ltants an+ others, sho2l+ *es2pporte+ *y the re(2lar 2nion +2es, there *ein( no sho&in( that



a2thori7ation si(ne+ *y the employees ... is appli-a*le.

The =nion points o2t, ho&ever, that sai+ +isa2thori7ations are notvali+ for *ein( -olle-tive in form, as they are /mere *2n-hes of ran+omly pro-2re+ si(nat2res, 2n+er loose sheets of paper./ The-ontention +eserves no merit for the simple reason that the+o-2ments -ontainin( the +isa2thori7ations have the si(nat2res of the 2nion mem*ers. The Co2rt 6n+s these retra-tions to *e vali+. There is nothin( in the la& &hi-h re<2ires that the +isa2thori7ationm2st *e in in+ivi+2al form.

Moreover, it is &ell)settle+ that /all +o2*ts in the implementationan+ interpretation of the provisions of the La*or Co+e ... shall *eresolve+ in favor of la*or./ An+ as previo2sly state+, la*or in this-ase refers to the 2nion mem*ers, as employees of the Company. Their mere +esire to esta*lish a separate *ar(ainin( 2nit, al*eit2nproven, -annot *e -onstr2e+ a(ainst them in relation to thele(ality of the <2estione+ spe-ial assessment. n the -ontrary, thesame may even *e ta5en to reQe-t their +issatisfa-tion &ith their

*ar(ainin( representative, the respon+ent)=nion, as sho&n *y the-ir-2mstan-es of the instant petition, an+ &ith (oo+ reason.

The Me+)Ar*iter -orre-tly r2le+ in his r+er that

The man+ate of the ma?ority ran5 an+ 6le have !si-$ to *erespe-te+ -onsi+erin( they are the ones +ire-tly aIe-te+ an+ therealities of the hi(h stan+ar+s of s2rvival no&a+ays. To i(nore theman+ate of the ran5 an+ 6le &o2l+ en2re to +esta*ili7in( in+2strialpea-e an+ harmony &ithin the ran5 an+ 6le an+ the employer1sfol+, &hi-h &e -annot -o2ntenan-e.

Moreover, it &ill *e re-alle+ that pre-isely 2nion +2es are -olle-te+from the 2nion mem*ers to *e spent for the p2rposes all2+e+ to *y

respon+ent. There is no reason sho&n that the re(2lar 2nion +2es*ein( no& implemente+ is not s28-ient for the alle(e+ e'penses.92rthermore, the ran5 an+ 6le have spo5en in &ith+ra&in( their-onsent to the spe-ial assessment, *elievin( that their re(2lar2nion +2es are a+e<2ate for the p2rposes state+ *y therespon+ent. Th2s, the ran5 an+ 6le havin( spo5en an+, as &e haveearlier mentione+, their sentiments sho2l+ *e respe-te+.

f the state+ p2rposes of the spe-ial assessment, as em*o+ie+ inthe *oar+ resol2tion of the =nion, only the -olle-tion of a spe-ialf2n+ for la*or an+ e+2-ation resear-h is man+ate+, as -orre-tly

s2pporte+ *y the re(2lar 2nion +2es, there *ein( no sho&in( thatthe latter are not s28-ient to -over the same.

The last state+ p2rpose is -onten+e+ *y petitioners to fall 2n+erthe -overa(e of Arti-le """ !*$ of the La*or Co+e. The -ontention isimpresse+ &ith merit. Arti-le """ !*$ prohi*its attorney1s fees,ne(otiations fees an+ similar -har(es arisin( o2t of the -on-l2sionof a -olle-tive *ar(ainin( a(reement from *ein( impose+ on anyin+ivi+2al 2nion mem*er. The -olle-tion of the spe-ial assessmentpartly for the payment for servi-es ren+ere+ *y 2nion o8-ers,-ons2ltants an+ others may not *e in the -ate(ory of /attorney1sfees or ne(otiations fees./ 2t there is no <2estion that it is ane'a-tion &hi-h falls &ithin the -ate(ory of a /similar -har(e,/ an+,therefore, &ithin the -overa(e of the prohi*ition in theaforementione+ arti-le. There is an a++itional proviso (ivin( the=nion resi+ent 2nlimite+ +is-retion to allo-ate the pro-ee+s of thespe-ial assessment. S2-h a proviso may open the +oor to a*2se *ythe o8-ers of the =nion -onsi+erin( that the total amo2nt of thespe-ial assessment is <2ite -onsi+era*le ,#";,[email protected] -olle-te+from those 2nion mem*ers &ho ori(inally a2thori7e+ the +e+2-tion,an+ ,"B;,B3.3@ from those &ho +i+ not a2thori7e the same, ors2*se<2ently retra-te+ their a2thori7ations. The former amo2ntha+ alrea+y *een remitte+ to the =nion, &hile the latter is *ein(hel+ in tr2st *y the Company.

The Co2rt, therefore, sta5es +o&n the <2estione+ spe-ialassessment for *ein( a violation of Arti-le "4, para(raphs !n$ an+!o$, an+ Arti-le """ !*$ of the La*or Co+e.

<,&AIR LABOR =RA"*I"E6

A Con-ept

P. =nfair La*or ra-ti-es of Employers

L. =nfair La*or ra-ti-es of La*or r(ani7ations

BAR1AI,I,1 A1E,* A,+ "ER*I&I"A*IO,ELE"*IO, =RO"EE+I,16

"

A ar(ainin( A(ent an+ Certi6-ation Ele-tion

ro-ee+in(s

ars to Certi6-ation Ele-tion



""

"OLLE"*IVE BAR1AI,I,1 A,+ A+4I,I6*RA*IO,O& A1REE4E,*

A 2ty to ar(ain Colle-tively

Espinas U Asso-iates for MACAT9= an+ the M9D=, an+ the-omplainant LAPAS for M=L= &hi-h &e 2n+erstan+ is thea((r2pation of MACAT9=, M9D= an+ =ND=. n top of all of these, :ose Ro<2e of =ND= +isa2thori7e+ the SSL= from representin( his2nion0 an+ similarly A2(2sta Carreon of MACAT9= itself informe+



A 2ty to ar(ain Colle-tively

La5as n( Man((a(a&an( Ma5a*ayan v. Mar-elo

Enterprises SCRA 4"Hen-e, anent the se-on+ iss2e of &hether or not the -omplaint for

2nfair la*or pra-ti-e -an *e s2staine+, this Co2rt r2les in favor of the respon+ent Mar-elo Companies an+ -onse<2ently, theappeale+ e-ision is reverse+. This reversal is inevita*le after thisCo2rt has pore+ thro2(h the vol2min2o2s re-or+s of the -ase as&ell as after applyin( the esta*lishe+ ?2rispr2+en-e an+ the la& onthe matters raise+. De are not 2nmin+f2l of the pli(ht of theemployees in this -ase *2t De -onsi+er it oppressive to (rant theirpetition in G.R. No. L3" for not only is there no evi+en-e &hi-hsho&s that the respon+ent Mar-elo Companies &ere see5in( for anopport2nity to +is-har(e these employees for 2nion a-tivities, or to+is-riminate a(ainst them *e-a2se of s2-h a-tivities, *2t there isa8rmative evi+en-e to esta*lish the -ontrary -on-l2sion.

The present -ontroversy is a three)si+e+ -onQi-t, altho2(h fo-2shas *een (reatly pla-e+ 2pon an alle(e+ la*or +isp2te *et&een-omplainant LAPAS an+ the respon+ent Mar-elo Companies. t&o2l+ *ear emphasi7in(, ho&ever, that &hat ha+ *een patently+isre(ar+e+ *y the respon+ent in+2strial -o2rt an+ the partiesali5e, is the fa-t that LAPAS ha+ never *een the *ar(ainin(representative of any an+ an of the lo-al 2nions then e'istin( in therespon+ent Mar-elo Companies.

Contrary to the pretensions of -omplainant LAPAS, the respon+entMar-elo Companies +i+ not i(nore the +eman+ for -olle-tive*ar(ainin( -ontaine+ in its letter of :2ne "#, @B;. Neither +i+ the-ompanies ref2se to *ar(ain at all. Dhat it +i+ &as to appriseLAPAS of the e'istin( -onQi-tin( +eman+s for re-o(nition as the*ar(ainin( representative in the appropriate 2nits involve+, an+s2((este+ the settlement of the iss2e *y means of the 6lin( of apetition for -erti6-ation ele-tion *efore the Co2rt of n+2strialRelations. This &as not only the le(ally approve+ pro-e+2re *2t &as+i-tate+ *y the fa-t that there &as in+ee+ a le(itimaterepresentation iss2e. SSL=, &ith &hom the e'istin( CAs &ereentere+ into, &as +eman+in( of respon+ent -ompanies to-olle-tively *ar(ain &ith it0 so &as a2lino La7aro of M=EDA, :.C.

2nion0 an+ similarly, A2(2sta Carreon of MACAT9= itself informe+mana(ement as late as :2ly , @B; or after the +eman+ of LAPASthat no (ro2p representin( his =nion /is not a2thori7e+ an+ sho2l+not *e entertaine+./

n+ee+, &hat De sai+ in Phili((ine Association o' *ree Labor !nions

PA*L! vs" The #ureau o' Labor RelationsB@ SCRA 3", applies as&ell to this -ase.

..., in a sit2ation li5e this &here the iss2e of le(itimaterepresentation in +isp2te is vie&e+ for not only *y one le(itimatela*or or(ani7ation *2t t&o or more, there is every e<2ita*le (ro2n+&arrantin( the hol+in( of a -erti6-ation ele-tion. n this &ay, theiss2e as to &ho is really the tr2e *ar(ainin( representative of allthe employees may *e 6rmly settle+ *y the simple e'pe+ient of anele-tion.

The a*ove)-ite+ -ase (ives the reason for the nee+ of +eterminin(on-e an+ for all the tr2e -hoi-e of mem*ership as to &ho sho2l+ *etheir *ar(ainin( representative, &hi-h is that, /!E$'perien-e

tea-hes 2s, one of the root -a2ses of la*or or in+2strial +isp2tes isthe pro*lem arisin( from a <2estiona*le *ar(ainin( representativeenterin( into CA -on-ernin( terms an+ -on+itions of employment./

Respe-tin( the iss2e of representation an+ the ri(ht of theemployer to +eman+ reasona*le proof of ma?ority representation onthe part of the s2ppose+ or p2tative *ar(ainin( a(ent, the-ommentaries in Rothen*er( on La*or Relations, pp. 4"@43 , arefor-ef2l an+ pers2asive, th2s

t is essential to the ri(ht of a p2tative *ar(ainin( a(ent torepresent the employees that it *e the +ele(ate of a ma?ority of the employees an+, -onversely, an employer is 2n+er +2ty to*ar(ain -olle-tively only &hen the *ar(ainin( a(ent isrepresentative of the ma?ority of the employees. A nat2ral-onse<2en-e of these prin-iples is that the employer has the ri(htto +eman+ of the asserte+ *ar(ainin( a(ent proof of itsrepresentation of its employees. Havin( the ri(ht to +emonstrationof this fa-t, it is not an 12nfair la*or pra-ti-e1 for an employer toref2se to ne(otiate 2ntil the asserte+ *ar(ainin( a(ent haspresente+ reasona*le proof of ma?ority representation. t isne-essary ho&ever, that s2-h +eman+ *e ma+e in (oo+ faith an+not merely as a prete't or +evi-e for +elay or evasion. Theemployer1s ri(ht is ho&ever to reasona*le proof. ...

"3

... Altho2(h an employer has the 2n+o2*te+ ri(ht to *ar(ain &ith a*ar(ainin( a(ent &hose a2thority has *een esta*lishe+, &itho2tthe re<2irement that the *ar(ainin( a(ent *e o8-ially -erti6e+ *ythe National La*or Relations oar+ as s2-h, if the informallypresente+ evi+en-e leaves a real +o2*t as to the iss2e, theemployer has a ri(ht to +eman+ a -erti6-ation an+ to ref2se to

-omplainant LAPAS la-5e+ -an+or, tr2th an+ 6+elity to&ar+s the-o2rts.

t is a fa-t fo2n+ *y the respon+ent -o2rt, an+ as reveale+ *y here-or+s of the -ase, that the respon+ent Mar-elo Companies +i+ notviolate the terms of the Ret2rn to Dor5 A(reement ne(otiate+ after



employer has a ri(ht to +eman+ a -erti6-ation an+ to ref2se tone(otiate 2ntil s2-h o8-ial -erti6-ation is presente+./

The -lear fa-ts of the -ase as herein*efore restate+ in+2sp2ta*lysho& that a le(itimate representation iss2e -onfronte+ therespon+ent Mar-elo Companies. n the fa-e of these fa-ts an+ in

-onformity &ith the e'istin( ?2rispr2+en-e.De hol+ that there e'iste+ no +2ty to *ar(ain -olle-tively &ith The-omplainant LAPAS on the part of sai+ -ompanies. An+ pro-ee+in(from this *asis, it follo&s that all a-ts insti(ate+ *y -omplainantLAPAS s2-h as the 6lin( of the Noti-e of stri5e on :2ne 3, @B;!altho2(h later &ith+ra&n$ an+ the 1t&o stri5es of Septem*er 4,@B; an+ Novem*er ;, @B; &ere -al-2late+ , +esi(ne+ an+inten+e+ to -ompel the respon+ent Mar-elo Companies tore-o(ni7e or *ar(ain &ith it not&ithstan+in( that it &as an2n-erti6e+ 2nion, or in the -ase of respon+ent Mar-elo Tire an+R2**er Corporation, to *ar(ain &ith it +espite the fa-t that theM=EDA of a2lino La7aro vas alrea+y -erti6e+ as the sole

*ar(ainin( a(ent in sai+ respon+ent -ompany. These -on-erte+a-tivities e'e-2te+ an+ -arrie+ into eIe-t at the insti(ation an+motivation of LAPAS ire all ille(al an+ violative of the employer1s*asi- ri(ht to *ar(ain -olle-tively only &ith the representatives2pporte+ *y the ma?ority of its employees in ea-h of the*ar(ainin( 2nits. This Co2rt is not 2na&are of the presentpre+i-ament of the employees involve+ *2t m2-h as Desympathi7e &ith those &ho have *een misle+ an+ so lost their ?o*sthro2(h hasty, ill)a+vise+ an+ pre-ipitate moves, De r2le that thefa-ts neither s2*stantiate nor s2pport the 6n+in( that therespon+ent Mar-elo Companies are (2ilty of 2nfair la*or pra-ti-e.

There are also other fa-ts &hi-h this Co2rt -annot i(nore. the-omplaint of LAPAS -har(e that after their 6rst stri5e of Septem*er4, @B;, mana(ement an+ the stri5in( employees entere+ into aRet2rn)to)Dor5 A(reement *2t that it &as violate+ *y therespon+ent -ompanies &ho /ref2se+ to a+mit the mem*ers of thethree stri5in( lo-al 2nions ... an+ (ave referen-e to the -as2alemployees./ !No. , Complaint$. t is also alle(e+ that the stri5e of Novem*er ;, @B; &as sta(e+ /*e-a2se of the ref2sal of therespon+ents to a--ept some 2nion mem*ers ... an+ ref2sal of respon+ents to *ar(ain in (oo+ faith &ith -omplainant/ !No. @,Complaint$. De 6n+ ho&ever, that in ma5in( these -har(es,

violate the terms of the Ret2rn)to)Dor5 A(reement ne(otiate+ afterthe 6rst stri5e. All of the stri5ers &ere a+mitte+ *a-5 to &or5 e'-eptfo2r !4$ &ho opte+ not to report for &or5 *e-a2se of thea+ministrative investi(ation -on+2-te+ in -onne-tion &ith the a-tsof violen-e perpetrate+ +2rin( the sai+ stri5e.

t is also evi+ent from the re-or+s that the -har(e of *ar(ainin( in*a+ faith imp2te+ to the respon+ent -ompanies, is har+ly -re+i*le.n fa-t, s2-h -har(e is vali+ as only a(ainst the -omplainant LAPAS. The parties ha+ a total of 6ve !$ -onferen-es for p2rposes of -olle-tive *ar(ainin(. t is &orth -onsi+erin( that the 6rst stri5e of Septem*er 4, @B; &as sta(e+ less than a &ee5 after the fo2rthCA -onferen-e an+ &itho2t any *ene6t of any previo2s stri5enoti-e. n this -onne-tion, it m2st *e state+ that the noti-e of stri5e6le+ on :2ne 3, @B; -o2l+ not have *een the stri5e noti-e for the6rst stri5e *e-a2se it &as alrea+y &ith+ra&n on :2ly 4, @B;. Th2s,from these state+ fa-ts -an *e seen that the 6rst stri5e &as hel+&hile the parties &ere in the pro-ess of ne(otiatin(. Nor -an it *e

s2staine+ that the respon+ent Mar-elo Companies *ar(aine+ in *a+faith sin-e there &ere proposals oIere+ *y them, *2t the-omplainant LAPAS stoo+ pat on its position that all of theire-onomi- +eman+s sho2l+ *e met an+ that all of these +eman+ssho2l+ *e (rante+ in all of the respon+ent Mar-elo Companies. The-ompanies1 ref2sal to a--e+e to the +eman+s of LAPAS appears to*e ?2sti6e+ sin-e there is no sho&in( that these -ompanies &ere inthe same state of 6nan-ial an+ e-onomi- aIairs. There is reason to*elieve that the 6rst stri5e &as sta(e+ only for the p2rpose of -ompellin( the respon+ent Mar-elo Companies to a--e+e to theinQe'i*le +eman+s of the -omplainant LAPAS. The re-or+s f2rtheresta*lish that after the res2mption of normal operations follo&in(

the 6rst stri5e an+ the -onse<2ent Ret2rn)to)Dor5 A(reement, thestri5in( 2nions le+ *y -omplainant LAPAS an+ the mana(ement of the respon+ent Mar-elo Companies res2me+ their *ar(ainin(ne(otiations. An+ that on -to*er 3, @B;, -omplainant LAPASsent the 6nal +rafts of the -olle-tive *ar(ainin( proposals for M9D=an+ =ND=. The se-on+ stri5e of Novem*er ;, @B; &as thensta(e+ imme+iately after &hi-h stri5e, as *efore, &as a(ain la-5in(of a stri5e noti-e. All of these fa-ts sho& that it &as -omplainantLAPAS, an+ not the respon+ent Mar-elo Companies, &hi-h ref2se+to ne(otiate in the pen+in( -olle-tive *ar(ainin( pro-ess. AR thatthe fa-ts sho& is that the *ar(ainin( position of -omplainant LAPAS

"4

&as inQe'i*le an+ that it &as in line &ith this 2n-ompromisin(attit2+e that the stri5es &ere +e-lare+, si(ni6-antly after noti-ethat mana(ement +i+ not or -o2l+ not meet all of their ;)points+eman+.

National =nion of Resta2rant Dor5ers !T=C$ F

*ar(ain -olle-tively &ith the respon+ents this is *e-a2se they &ereof the impression that *efore a 2nion -o2l+ have that -apa-ity itm2st 6rst *e -erti6e+ *y the Co2rt of n+2strial Relations as the+2ly a2thori7e+ *ar(ainin( 2nit, in fa-t this is &hat they state+ intheir ans&er to the petition for -erti6-ation 6le+ *y sai+ 2nion



National =nion of Resta2rant Dor5ers !T=C$ F.

CR, # SCRA 43Anent the 6rst iss2e, the -o2rt a ,uo fo2n+ that in the letter sent *ythe 2nion to respon+ents -ontainin( its +eman+s mar5e+ in the

-ase as E'hi*it , there appears -ertain mar5s, opposite ea-h+eman+, s2-h as a -he-5 for those +eman+s to &hi-h Mrs. 9elisaHerrera &as a(reea*le, a -ross si(nifyin( the +isapproval of Mrs.Herrera, an+ a -ir-le re(ar+in( those +eman+s &hi-h &ere left openfor +is-2ssion on some f2t2re o--asion that the parties may +eem-onvenient. S2-h mar5in(s &ere ma+e +2rin( the +is-2ssion of the+eman+s in the meetin( -alle+ *y respon+ents on May 3, @B# attheir resta2rant in 2e7on City. The -o2rt a ,uo -on-l2+e+ that thefa-t that respon+ent Herrera ha+ a(ree+ to some of the +eman+ssho&s that she +i+ not ref2se to *ar(ain -olle-tively &ith the-omplainin( 2nion.

De -an har+ly +isp2te this 6n+in(, for it 6n+s s2pport in the

evi+en-e. The inferen-e that respon+ents +i+ not ref2se to *ar(ain-olle-tively &ith the -omplainin( 2nion *e-a2se they a--epte+some of the +eman+s &hile they ref2se+ the others even leavin(open other +eman+s for f2t2re +is-2ssion is -orre-t, espe-ially so&hen those +eman+s &ere +is-2sse+ at a meetin( -alle+ *yrespon+ents themselves pre-isely in vie& of the letter sent *y the2nion on April "@, @B#. t is tr2e that 2n+er Se-tion 4 of Rep2*li-A-t ; &henever a party serves a &ritten noti-e 2pon theemployer ma5in( some +eman+s the latter shall reply thereto notlater than # +ays from re-eipt thereof, *2t this ren+ition is merelypro-e+2ral an+ as s2-h its non)-omplian-e -annot *e +eeme+ to *ean a-t of 2nfair la*or pra-ti-e. The fa-t is that respon+ents +i+ not

i(nore the letter sent *y the 2nion so m2-h so that they -alle+ ameetin( to +is-2ss its +eman+s, as alrea+y state+ else&here.

t is -onten+e+ that respon+ents ref2se+ to *ar(ain &ith the-omplainin( 2nion as s2-h even if they -alle+ a meetin( of itso8-ers an+ employees there*y -on-l2+in( that they +i+ not +esireto enter into a *ar(ainin( a(reement &ith sai+ 2nion. This-on-l2sion has no rational relation &ith the main premise of the2nion for it is *elie+ *y the fa-t that respon+ents +i+ a-t2ally a(reean+ *ar(ain &ith the representatives of the 2nion. Dhile it is tr2ethat respon+ents +enie+ the -apa-ity of the -omplainin( 2nion to

*efore the Co2rt of n+2strial Relations !See Case No. ;B3)MC$. nsai+ -ase, another 2nion 5no&n as the nternational La*or an+Marine =nion of the hilippines -laime+ to represent the ma?ority of the employees of respon+ent resta2rant, an+ this is &hat it alle(e+in a letter sent to the mana(er of respon+ents +ate+ May ", @B".

Li*erty 9lo2r Mills Employees Asso-iation v.

Li*erty 9lo2r Mills. # SCRA BBComin( no& to the se-on+ iss2e, &e 6n+ that it m2st also *eresolve+ a(ainst the petitioners.

Evaristo an+ ias-an -laim they &ere ille(ally +ismisse+ foror(ani7in( another la*or 2nion oppose+ to LAC, &hi-h they+es-ri*e as a -ompany 2nion. Ar(2in( that they &ere onlye'er-isin( the ri(ht to self or(ani7ation as (2arantee+ *y theConstit2tion, they insist they are entitle+ to the *a-5 &a(es &hi-hthe NLRC +isallo&e+ &hile a8rmin( their reinstatement.

n its -hallen(e+ +e-ision, the p2*li- respon+ent hel+ that in+eman+in( the +ismissal of Evaristo an+ ias-an, LAC ha+ a-te+premat2rely *e-a2se the @;4 CA provi+in( for 2nion shop an+p2rs2ant to &hi-h the t&o petitioners &ere +ismisse+ ha+ not yet*een -erti6e+. The impli-ation is that it &as not yet in eIe-t an+ so-o2l+ not *e the *asis of the a-tion ta5en a(ainst the t&opetitioners. This -on-l2sion is erroneo2s. t +isre(ar+s the r2lin( of this Co2rt in Tandua. Distiller. Labor !nion v" NLRC, &ere &e hel+

The fa-t, therefore, that the 2rea2 of La*or Relations !LR$ faile+to -ertify or a-t on TL=1s re<2est for -erti6-ation of the CA in<2estion is of no moment to the resol2tion of the iss2es presente+

in this -ase. The LR itself fo2n+ in its or+er of :2ly , @", thatthe !2n$-erti6e+ CA &as +2ly 6le+ an+ s2*mitte+ on -to*er "@,@#, to last 2ntil :2ne 3#, @" is -erti6a*le for havin( -omplie+&ith all the re<2irements for -erti6-ation. !Emphasis s2pplie+.$

The CA -on-l2+e+ in @;4 &as -erti6a*le an+ &as in fa-t -erti6e+on April , @;, t *ears stressin( that Evaristo an+ ias-an &ere+ismisse+ only on May "#, @;, more than a month after the sai+-erti6-ation.

The -orre-t vie& is that e'presse+ *y Commissioner Ce-ilio . Senoin his -on-2rrin( an+ +issentin( opinion, vi7.

"

-annot ho&ever s2*s-ri*e to the ma?ority vie& that the 1+ismissalof -omplainants ias-an an+ Evaristo, ... &as, to say the least, apremat2re a-tion on the part of the respon+ents *e-a2se at thetime they &ere e'pelle+ *y LAC the -ontra-t -ontainin( the 2nionse-2rity -la2se 2pon &hi-h the a-tion &as *ase+ &as yet to *e-erti6e+ an+ the representation stat2s of the -ontra-tin( 2nion &as

a--or+an-e &ith la&./ There is no <2estion that these p2rposes-o2l+ *e th&arte+ if every &or5er &ere to -hoose to (o his o&nseparate &ay instea+ of ?oinin( his -o)employees in plannin(-olle-tive a-tion an+ presentin( a 2nite+ front &hen they sit +o&nto *ar(ain &ith their employers. t is for this reason that the la& has



-erti6e+ an+ the representation stat2s of the -ontra-tin( 2nion &asstill in <2estion.

Evi+en-e on re-or+ sho& that after the -an-ellation of there(istration -erti6-ate of the 9e+eration of emo-rati- La*or=nions, no other 2nion -onteste+ the e'-l2sive representation of

the hilippine La*or Allian-e Co2n-il !LAC$, -onse<2ently, there&as no more le(al impe+iment that stoo+ on the &ay as to thevali+ity an+ enfor-ea*ility of the provisions of the -olle-tive*ar(ainin( a(reement entere+ into *y an+ *et&een respon+ent-orporation an+ respon+ent 2nion. The -erti6-ation of the -olle-tive*ar(ainin( a(reement *y the 2rea2 of La*or Relations is notre<2ire+ to p2t a stamp of vali+ity to s2-h -ontra-t. n-e it is +2lyentere+ into an+ si(ne+ *y the parties, a -olle-tive *ar(ainin(a(reement *e-omes eIe-tive as *et&een the parties re(ar+less of &hether or not the same has *een -erti6e+ *y the LR.

To *e fair, it m2st *e mentione+ that in the -erti6-ation ele-tionhel+ at the Li*erty 9lo2r Mills, n-. on e-em*er ";, @;B, the la&

at 25lo+ n( Man((a(a&a, &ith &hi-h the 2nion or(ani7e+ *yias-an an+ Evaristo &as a8liate+, &on over&helmin(ly &ith 44votes as a(ainst the votes -ast for LAC. Ho&ever, this +oes note'-2se the fa-t that the t&o +isa8liate+ from LAC as early asMar-h @; an+ th2s ren+ere+ themselves s2*?e-t to +ismissal2n+er the 2nion shop -la2se in the CA.

The petitioners say that the reinstatement iss2e of Evaristo an+ias-an has *e-ome a-a+emi- *e-a2se the former has *eenrea+mitte+ an+ the latter has -hosen to a&ait the resol2tion of this-ase. Ho&ever, they still insist on the payment of their *a-5 &a(eson the (ro2n+ that their +ismissal &as ille(al. This -laim m2st *e

+enie+ for the reasons alrea+y (iven. The 2nion shop -la2se &asvali+ly enfor-e+ a(ainst them an+ ?2sti6e+ the termination of theirservi-es.

t is the poli-y of the State to promote 2nionism to ena*le the&or5ers to ne(otiate &ith mana(ement on the same level an+ &ithmore pers2asiveness than if they &ere to in+ivi+2ally an+in+epen+ently *ar(ain for the improvement of their respe-tive-on+itions. To this en+, the Constit2tion (2arantees to them theri(hts /to self)or(ani7ation, -olle-tive *ar(ainin( an+ ne(otiationsan+ pea-ef2l -on-erte+ a-tions in-l2+in( the ri(ht to stri5e in

san-tione+ stip2lations for the 2nion shop an+ the -lose+ shop as ameans of en-o2ra(in( the &or5ers to ?oin an+ s2pport the la*or2nion of their o&n -hoi-e as their representative in the ne(otiationof their +eman+s an+ the prote-tion of their interest vis)a)vis theemployer.

The Co2rt &o2l+ have preferre+ to resolve this -ase in favor of thepetitioners, *2t the la& an+ the fa-ts are a(ainst them. 9or all the-on-ern of the State, for the &ell)*ein( of the &or5er, &e m2st atall times -onform to the re<2irements of the la& as lon( as s2-hla& has not *een sho&n to *e violative of the Constit2tion. No s2-hviolation has *een sho&n here.

Cole(io +e San :2an +e Letran v. Asso-iation of

Employees an+ 9a-2lty of Letran 34# SCRA ;As re(ar+s the 6rst iss2e, Arti-le "" of the La*or Co+e +e6nes themeanin( of the phrase /+2ty to *ar(ain -olle-tively,/ as follo&s

Art. "". Meanin( of +2ty to *ar(ain -olle-tively. ) The +2ty to*ar(ain -olle-tively means the performan-e of a m2t2al o*li(ationto meet an+ -onvene promptly an+ e'pe+itio2sly in (oo+ faith forthe p2rpose of ne(otiatin( an a(reement &ith respe-t to &a(es,ho2rs of &or5 an+ all other terms an+ -on+itions of employmentin-l2+in( proposals for a+?2stin( any (rievan-es or <2estionsarisin( 2n+er s2-h a(reement an+ e'e-2tin( a -ontra-tin-orporatin( s2-h a(reements if re<2este+ *y either party *2ts2-h +2ty +oes not -ompel any party to a(ree to a proposal or toma5e any -on-ession.

Note&orthy in the a*ove +e6nition is the re<2irement on *othparties of the performan-e of the m2t2al o*li(ation to meet an+

-onvene promptly an+ e'pe+itio2sly in (oo+ faith for the p2rpose of ne(otiatin( an a(reement. =n+o2*te+ly, respon+ent Asso-iationof Employees an+ 9a-2lty of Letran !AE9L$ !hereinafter,/2nion/$ live+ 2p to this re<2isite &hen it presente+ its proposalsfor the CA to petitioner on 9e*r2ary ;, @@B. n the other han+,petitioner +evise+ &ays an+ means in or+er to prevent thene(otiation.

etitioner1s 2tter la-5 of interest in *ar(ainin( &ith the 2nion iso*vio2s in its fail2re to ma5e a timely reply to the proposalspresente+ *y the latter. More than a month after the proposals

"B



petition &as 6le+ o2tsi+e the si'ty)+ay free+om perio+. Hen-e, the6lin( thereof &as *arre+ *y the e'isten-e of a vali+ an+ e'istin(-olle-tive *ar(ainin( a(reement. Conse<2ently, there is nole(itimate representation iss2e an+, as s2-h, the 6lin( of thepetition for -erti6-ation ele-tion +i+ not -onstit2te a *ar to the

i ti ti R li th f * titi f th li

provisions of the Colle-tive ar(ainin( A(reement entere+ into&ithin si' !B$ months from the +ate of e'piry of the term of s2-hother provisions as 6'e+ in s2-h Colle-tive ar(ainin( A(reement,shall retroa-t to the +ay imme+iately follo&in( s2-h +ate. f anys2-h a(reement is entere+ into *eyon+ si' months, the partiesshall a(ree on the +2ration of retroa-tivity thereof. n -ase of a



on(oin( ne(otiation. Relian-e, therefore, *y petitioner of the r2lin(in La-as Ng Manggaga%ang Ma-aba.an v" Marcelo Enter(rises ismispla-e+ sin-e that -ase involve+ a le(itimate representationiss2e &hi-h is not present in the -ase at *ar.

Si(ni6-antly, the same petition for -erti6-ation ele-tion &as

+ismisse+ *y the Se-retary of La*or on -to*er ", @@B. The+ismissal &as 2phel+ *y this Co2rt in a Resol2tion, +ate+ April ",@@;.

n vie& of the a*ove, there is no +o2*t that petitioner is (2ilty of 2nfair la*or pra-ti-e *y its stern ref2sal to *ar(ain in (oo+ faith&ith respon+ent 2nion.

San Mi(2el Corporation Employees =nion)

TGD v. Confesor "B" SCRA etitioner)2nion -onten+s that the +2ration for the non)

representation provisions of the CA sho2l+ *e -otermino2s &iththe term of the *ar(ainin( a(en-y &hi-h in eIe-t shall *e for theremainin( t&o years of the -2rrent CA, -itin( a previo2s +e-isionof the Se-retary of La*or on e-em*er 4, @@" in the matter of the la*or +isp2te at hilippine Re6nin( Company.

Ho&ever, the Se-retary of La*or, in her <2estione+ r+erof 9e*r2ary , @@3 r2le+ that the rene(otiate+ terms of the CAat SMC sho2l+ r2n for a perio+ of three !3$ years.

De a(ree &ith the Se-retary of La*or.

ertinent to the 6rst iss2e is Art. "3)A of the La*or Co+e asamen+e+ &hi-h rea+s

ART. "3)A. Ter$s o' a Collective #argaining Agree$ent" AnyColle-tive ar(ainin( A(reement that the parties may enter intoshall, insofar as the representation aspe-t is -on-erne+, *e for aterm of 6ve !$ years. No petition <2estionin( the ma?ority stat2sof the in-2m*ent *ar(ainin( a(ent shall *e entertaine+ an+ no-erti6-ation ele-tion shall *e -on+2-te+ *y the epartment of La*or an+ Employment o2tsi+e of the si'ty)+ay perio+ imme+iately*efore the +ate of e'piry of s2-h 6ve year term of the Colle-tivear(ainin( A(reement. All other provisions of the Colle-tivear(ainin( A(reement shall *e rene(otiate+ not later than three!3$ years after its e'e-2tion. Any a(reement on s2-h other

s a a( ee o e +2 a o o e oa- y e eo -ase o a+ea+lo-5 in the rene(otiation of the -olle-tive *ar(ainin(a(reement, the parties may e'er-ise their ri(hts 2n+er this Co+e.!2n+erlinin( s2pplie+.$

Arti-le "3)A is a ne& provision. This &as in-orporate+ *y Se-tion" of Rep2*li- A-t No. B; !the Herrera)Feloso La&$ &hi-h too5eIe-t on Mar-h ", @@. This ne& provision states that the CAhas a term of 6ve !$ years instea+ of three years, *efore theamen+ment of the la& as far as the representation aspe-t is-on-erne+. All other provisions of the CA shall *e ne(otiate+ notlater than three !3$ years after its e'e-2tion. The representationaspe-t refers to the i+entity an+ ma?ority stat2s of the 2nion thatne(otiate+ the CA as the e'-l2sive *ar(ainin( representative of the appropriate *ar(ainin( 2nit -on-erne+. All other provisionssimply refers to the rest of the CA, e-onomi- as &ell as non)e-onomi- provisions, e'-ept representation.

As the Se-retary of La*or herself o*serve+ in the instant -ase, the

la& is -lear an+ +e6nite on the +2ration of the CA insofar as therepresentation aspe-t is -on-erne+, *2t is <2ite am*i(2o2s &ith theterms of the other provisions of the CA. t is a -ar+inal prin-iple of stat2tory -onstr2-tion that the Co2rt m2st as-ertain the le(islativeintent for the p2rpose of (ivin( eIe-t to any stat2te. The history of the times an+ state of the thin(s e'istin( &hen the a-t &as frame+or a+opte+ m2st *e follo&e+ an+ the -on+itions of the thin(s at thetime of the ena-tment of the la& sho2l+ *e -onsi+ere+ to+etermine the le(islative intent.

9rom the aforesai+ +is-2ssions, the le(islators &ere more in-line+to have the perio+ of eIe-tivity for three !3$ years insofar as the

e-onomi- as &ell as non)e-onomi- provisions are -on-erne+,e'-ept representation.

*vio2sly, the framers of the la& &ante+ to maintain in+2strialpea-e an+ sta*ility *y havin( *oth mana(ement an+ la*or &or5harmonio2sly to(ether &itho2t any +ist2r*an-e. Th2s, no o2tsi+e2nion -an enter the esta*lishment &ithin 6ve !$ years an+-hallen(e the stat2s of the in-2m*ent 2nion as the e'-l2sive*ar(ainin( a(ent. Li5e&ise, the terms an+ -on+itions of employment !e-onomi- an+ non)e-onomi-$ -an not *e <2estione+*y the employers or employees +2rin( the perio+ of eIe-tivity of the CA. The CA is a -ontra-t *et&een the parties an+ the parties

"

m2st respe-t the terms an+ -on+itions of the a(reement.Nota*ly,the framers of the la& +i+ not (ive a 6'e+ term as to the eIe-tivityof the terms an+ -on+itions of employment. t -an *e (leane+ fromtheir +is-2ssions that it &as left to the parties to 6' the perio+.

n the instant -ase, it is not +i8-2lt to +etermine the perio+ of

2nions as the *ar(ainin( a(ents of their respe-tive *ar(ainin(2nits. n the meantime, the other 2nions in these -ompaniesevent2ally -on-l2+e+ their CA ne(otiations on the remainin( terman+ all of them a(ree+ on a 3)year -y-le.Nota*ly, the follo&in(CAs &ere for(e+ in-orporatin( a term of 3)years on the

ti t + i i t it



n the instant -ase, it is not +i8-2lt to +etermine the perio+ of eIe-tivity for the non)representation provisions of the CA. Ta5in(it from the history of their CAs, SMC inten+e+ to have the terms of the CA eIe-tive for three !3$ years re-5one+ from the e'pirationof the ol+ or previo2s CA &hi-h &as on :2ne 3#, @@, as itprovi+es

SECTN . This A(reement &hi-h shall *e *in+in( 2pon theparties hereto an+ their respe-tive s2--essors)in)interest, shall*e-ome eIe-tive an+ shall remain in for-e an+ eIe-t 2ntil :2ne 3#,@@".

The ar(2ment that the RC -ase is appli-a*le is in+ee+mispla-e+. De <2ote &ith favor the r+er of the Se-retary of La*orin the li(ht of SMCs pe-2liar sit2ation as -ompare+ &ith RCs-ompany sit2ation.

t is tr2e that in the hilippine Re6nin( Company -ase !S)A:)##3)@ !si-$, La*or isp2te at hilippine Re6nin( Company$, &e r2le+that the term of the rene(otiate+ provisions of the CA sho2l+-oin-i+e &ith the remainin( term of the a(en-y. n +oin( so, &epla-e+ premi2m on the fa-t that RC has only t&o !"$ 2nions an+no other 2nion ha+ yet e'e-2te+ a rene&e+ term of 3 years.Nonetheless, in r2lin( for a shortene+ term, &e &ere (2i+e+ *y o2r-onsi+ere+ per-eption that the sai+ term &o2l+ improve, ratherthan r2in, the (eneral &elfare of *oth the &or5ers an+ the-ompany. t is e<2ally tr2e that on-e the e-onomi- provisions of theCA e'pire, the resi+2al representative stat2s of the 2nion iseIe-tive for only " more years. Ho&ever, if -ir-2mstan-es &arrantthat the -ontra-t +2ration &hi-h it is soli-itin( from the -ompanyfor the *ene6t of the &or5ers, shall *e a little *it lon(er than its

lifespan, then this 8-e -annot stan+ in the &ay of a more i+ealsit2ation. De m2st not lose si(ht of the fa-t that the primor+ialp2rpose of a -olle-tive -ontra-t is to promote in+2strial harmonyan+ sta*ility in the terms an+ -on+itions of employment. To o2rmin+, this o*?e-tive -annot *e a-hieve+ &itho2t (ivin( +2e-onsi+eration to the pe-2liarities an+ 2ni<2e -hara-teristi-s of theemployer. n the -ase at *ar, there is no +isp2te that the mother-orporation !SMC$ sp2n)oI t&o of its +ivisions an+ there*y (ave*irth to t&o !"$ other entities no& 5no&n as Ma(nolia Corporationan+ San Mi(2el 9oo+s, n-. n or+er to eIe-t a smooth transition,the -ompanies -on-erne+ -ontin2e+ to re-o(ni7e the e'istin(

rene(otiate+ provisions, to &it

. SMC ) +aily)pai+ employees 2nion !M$

". SM9 ) monthly)pai+ employees an+ +aily)pai+ employees at theCa*2yao lant.

There is a +ire-t lin5 *et&een the vol2ntary re-o(nition *y the-ompany of the -ontin2in( representative stat2s of the 2nionsafter the aforementione+ spin)oIs an+ the stan+ of the -ompanyfor a 3)year rene(otiate+ -y-le &hen the e-onomi- provisions of the e'istin( CAs e'pire+, i.e., to maintain sta*ility an+ avoi+-onf2sion &hen the 2m*ili-al -or+ of the t&o +ivisions &eresevere+ from their parent.These t&o -annot *e -onsi+ere+in+epen+ently of ea-h other for they &ere inten+e+ to reinfor-eone another. re-isely, the -ompany -on-e+e+ to fa-e the same2nion not&ithstan+in( the spin)oIs in or+er to preserve in+2strialpea-e +2rin( the infan-y of the t&o -orporations. f the 2nion&o2l+ insist on a shorter rene(otiate+ term, then all thea+vanta(es (aine+ *y *oth parties in this re(ar+, &o2l+ have (one

to na2(ht. Dith this in min+, this o8-e feels that it &ill *etray itsman+ate sho2l+ &e or+er the parties to e'e-2te a ")yearrene(otiate+ term for then -haos an+ -onf2sion, rather thantran<2ility, &o2l+ *e the or+er of the +ay. Dorse, there is a stron(li5elihoo+ that s2-h a r2lin( mi(ht spa&n +is-ontent an+ possi*lemass a-tions a(ainst the -ompany -omin( from the other 2nions&ho ha+ alrea+y a(ree+ to a 3)year rene(otiate+ terms. f thishappens, the p2rpose of this 8-es intervention into the parties-ontroversy &o2l+ have *een +efeate+.

The iss2e as to the term of the non)representation provisions of theCA nee+ not *ela*ore+ espe-ially &hen &e ta5e note of theMemoran+2m of the Se-retary of La*or +ate+ 9e*r2ary "4, @@4&hi-h &as mentione+ in the Resol2tion of =n+erse-retaryienveni+o La(2esma on :an2ary B, @@ in the -erti6-ationele-tion -ase involvin( the SMC employees.n sai+ memoran+2m,the Se-retary of La*or ha+ o--asion to -larify the term of therene(otiate+ terms of the CA vis)a)vis the term of the *ar(ainin(a(ent, to &it

As a matter of poli-y the parties are en-o2ra(es !si-$ to enter intoa rene(otiate+ CA &ith a term &hi-h &o2l+ -oin-i++e !si-$ &iththe aforesai+ 6ve !$ year term of the *ar(ainin( representative.

n the event ho&ever, that the parties, *y m2t2al a(reement, enterinto a rene(otiate+ -ontra-t &ith a term of three !3$ years or one

"@

&hi-h +oes not -oin-i+e &ith the sai+ )year term, an+ sai+a(reement is rati6e+ *y ma?ority of the mem*ers in the *ar(ainin(2nit, the s2*?e-t -ontra-t is vali+ an+ le(al an+ therefore, *in+s the-ontra-tin( parties. The same &ill ho&ever not a+versely aIe-t theri(ht of another 2nion to -hallen(e the ma?ority stat2s of thein-2m*ent *ar(ainin( a(ent &ithin si'ty !B#$ +ays *efore the lapse

-ontrary to the r2lin( of this Co2rt in +ier 5 $rrastre and (tevedoring (ervices, Inc. vs. Roldan*&onfessor &hi-hman+ates that the eIe-tive +ate of the ne& CA sho2l+ *e the+ate the Se-retary of La*or has resolve+ the la*or +isp2tes.

n the other han+, MEDA s2pports the r2lin( of the Se-retary on



( ( ( y y pof the ori(inal 6ve !$ year term of the CA.

Th2s, &e +o not 6n+ any (rave a*2se of +is-retion on the part of the Se-retary of La*or in r2lin( that the eIe-tivity of therene(otiate+ terms of the CA shall *e for three !3$ years.

Manila Ele-tri- Co. v. 2is2m*in(, 3#" SCRA;3MERALC also +e-ries the Se-retarys r2lin( in *oth the assaile+r+ers that)

All other *ene6ts *ein( en?oye+ *y the -ompanys employees *2t&hi-h are not e'pressly or implie+ly repeale+ in this ne&a(reement shall remain s2*sistin( an+ shall li5e&ise *e in-l2+e+ inthe ne& -olle-tive *ar(ainin( a(reement to *e si(ne+ *y theparties eIe-tive e-em*er , @@.

-laimin( that the a*ove)<2ote+ r2lin( intr2+e+ into the employers

free+om to -ontra-t *y or+erin( the in-l2sion in the ne& CA allother *ene6ts presently en?oye+ *y the employees even if they arenot in-orporate+ in the ne& CA. This matter of in-l2sion,MERALC ar(2es, &as never +is-2sse+ an+ a(ree+ 2pon in thene(otiations0 nor presente+ as iss2es *efore the Se-retary0 nor&ere part of the previo2s CAs *et&een the parties.

De a(ree &ith MERALC.

The Se-retary a-te+ in e'-ess of the +is-retion allo&e+ him *y la&&hen he or+ere+ the in-l2sion of *ene6ts, terms an+ -on+itionsthat the la& an+ the parties +i+ not inten+ to *e reQe-te+ in theirCA.

To avoi+ the possi*le pro*lems that the +isp2te+ or+ers may *rin(,&e are -onstraine+ to r2le that only the terms an+ -on+itionsalrea+y e'istin( in the -2rrent CA an+ &as (rante+ *y theSe-retary !s2*?e-t to the mo+i6-ations +e-ree+ in this +e-ision$sho2l+ *e in-orporate+ in the CA, an+ that the Se-retarys+isp2te+ or+ers sho2l+ a--or+in(ly *e mo+i6e+.

9inally, MERALC also assails the Se-retarys or+er that theeIe-tivity of the ne& CA shall retroa-t to e-em*er , @@, the+ate of the -ommen-ement of the last t&o years of the eIe-tivityof the e'istin( CA. This retroa-tive +ate, MERALC ar(2es, is

, pp ( ythe theory that he has plenary po&er an+ +is-retion to 6' the +ateof eIe-tivity of his ar*itral a&ar+ -itin( o2r r2lin( in (t. Lu!es%edical &enter, Inc. vs. "orres" MEDA also -onten+s that if thear*itral a&ar+ ta5es eIe-t on the +ate of the Se-retary La*orsr2lin( on the parties motion for re-onsi+eration !i.e., on e-em*er

", @@B$, an anomaly sit2ation &ill res2lt &hen CA &o2l+ *emore than the )year term man+ate+ *y Arti-le "3)A of the La*orCo+e.

Ho&ever, neither party too5 into a--o2nt the fa-tors ne-essary fora proper resol2tion of this aspe-t. +ier 5, for instan-e, +oes notinvolve a mi+)term ne(otiation similar to this -ase, &hile (t.Lu!es +oes not ta5e the hol+ over prin-iple into a--o2nt, i.e., ther2le that altho2(h a CA has e'pire+, it -ontin2es to have le(aleIe-ts as *et&een the parties 2ntil a ne& CA has *een entere+into.

Arti-le "3)A serves as the (2i+e in +eterminin( &hen theeIe-tivity of the CA at *ar is to ta5e eIe-t. t provi+es that therepresentation aspe-t of the CA is to *e for a term of years,&hile

' ' ' KAll other provisions of the Colle-tive ar(ainin( A(reementshall *e re)ne(otiate+ not later than 3 years after itse'e-2tion. Any a(reement on s2-h other provisions of theColle-tive ar(ainin( A(reement entere+ into &ithin B months fromthe +ate of e'piry of the term of s2-h other provisions as 6'e+ ins2-h Colle-tive ar(ainin( A(reement shall retroa-t to the +ayimme+iately follo&in( s2-h +ate. f s2-h a(reement is entere+ into*eyon+ B months, the parties shall a(ree on the +2ration of theeIe-tivity thereof. ' ' '.

=n+er these terms, it is -lear that the )year term re<2irement isspe-i6- to the representation aspe-t. Dhat the la& a++itionallyre<2ires is that a CA m2st *e re)ne(otiate+ &ithin 3 years after itse'e-2tion. t is in this re)ne(otiation that (ives rise to the presentCA +ea+lo-5.

f no a(reement is rea-he+ &ithin B months from the e'piry +ate of the 3 years that follo& the CA e'e-2tion, the la& e'pressly (ivesthe parties ) not any*o+y else ) the +is-retion to 6' the eIe-tivityof the a(reement.

3#

Si(ni6-antly, the la& +oes not spe-i6-ally -over the sit2ation &hereB months have elapse+ *2t no a(reement has *een rea-he+ &ithrespe-t to eIe-tivity. n this event2ality, &e hol+ that any provisionof la& sho2l+ then apply for the la& a*hors a va-22m.

ne s2-h provision is the prin-iple of hol+ over, i.e., that in the

n the other han+, the =nion ar(2es that the a&ar+ sho2l+ retroa-tto s2-h time (rante+ *y the Se-retary, -itin( the @@3 +e-isionof St Lu-es"

/9inally, the eIe-tivity of the r+er of :an2ary ", @@, m2stretroa-t to the +ate of the e'piration of the previo2s CA, -ontrary



p p pa*sen-e of a ne& CA, the parties m2st maintain the status,uo an+ m2st -ontin2e in f2ll for-e an+ eIe-t the terms an+-on+itions of the e'istin( a(reement 2ntil a ne& a(reement isrea-he+. n this manner, the la& prevents the e'isten-e of a (ap inthe relationship *et&een the -olle-tive *ar(ainin( parties. Another

le(al prin-iple that sho2l+ apply is that in the a*sen-e of ana(reement *et&een the parties, then, an ar*itrate+ CA ta5es onthe nat2re of any ?2+i-ial or <2asi)?2+i-ial a&ar+0 it operates an+may *e e'e-2te+ only respe-tively 2nless there are le(al ?2sti6-ations for its retroa-tive appli-ation.

Conse<2ently, &e 6n+ no s28-ient le(al (ro2n+ on the other ?2sti6-ation for the retroa-tive appli-ation of the +isp2te+ CA, an+therefore hol+ that the CA sho2l+ *e eIe-tive for a term of "years -o2nte+ from e-em*er ", @@B !the +ate of the Se-retaryof La*ors +isp2te+ or+er on the parties motion for re-onsi+eration$2p to e-em*er ";, @@@.

Manila Ele-tri- Co. v. 2is2m*in(, G.R. ";@

9e*r2ary "", "###n the retroa-tivity of the CA ar*itral a&ar+, it is &ell to re-all thatthis petition ha+ its ori(in in the rene(otiation of the parties @@")@@; CA insofar as the last t&o)year perio+ thereof is -on-erne+.Dhen the Se-retary of La*or ass2me+ ?2ris+i-tion an+ (rante+ thear*itral a&ar+s, there &as no <2estion that these ar*itral a&ar+s&ere to *e (iven retroa-tive eIe-t. Ho&ever, the parties +isp2tethe re-5onin( perio+ &hen retroa-tion shall -ommen-e. etitioner-laims that the a&ar+ sho2l+ retroa-t only from s2-h time that the

Se-retary of La*or ren+ere+ the a&ar+, invo5in( the @@ +e-isionin Pier < -ase &here the Co2rt, -itin( !nion o' *ili(ino E$(lo.ees v"NLRC, sai+

/The assaile+ resol2tion &hi-h in-orporate+ the CA to *e si(ne+*y the parties &as prom2l(ate+ on :2ne , @@, the e'piry +ate of the past CA. ase+ on the provision of Se-tion "3)A, itsretroa-tivity sho2l+ *e a(ree+ 2pon *y the parties. 2t sin-e noa(reement to that eIe-t &as ma+e, p2*li- respon+ent +i+ nota*2se its +is-retion in (ivin( the sai+ CA a prospe-tive eIe-t. Thea-tion of the p2*li- respon+ent is &ithin the am*it of its a2thorityveste+ *y e'istin( la&./

to the position of petitioner. =n+er the -ir-2mstan-es of the -ase,Arti-le "3)A -annot *e properly applie+ to herein -ase. As-orre-tly state+ *y p2*li- respon+ent in his assaile+ r+er of April", @@ +ismissin( petitioners Motion for Re-onsi+eration)))

Anent the alle(e+ la-5 of *asis for the retroa-tivity provisions

a&ar+e+, &e &o2l+ stress that the provision of la& invo5e+ *y theHospital, Arti-le "3)A of the La*or Co+e, spea5s of a(reements *yan+ *et&een the parties, an+ not ar*itral a&ar+s . . .

/Therefore, in the a*sen-e of a spe-i6- provision of la& prohi*itin(retroa-tivity of the eIe-tivity of ar*itral a&ar+s iss2e+ *y theSe-retary of La*or p2rs2ant to Arti-le "B3!($ of the La*or Co+e,s2-h as herein involve+, p2*li- respon+ent is +eeme+ veste+ &ithplenary an+ +is-retionary po&ers to +etermine the eIe-tivitythereof./

n the @@; -ase of Mindanao Ter$inal, the Co2rt applie+ the St"Lu-es +o-trine an+ r2le+ that

/n St" Lu-es Medical Center v" Torres a +ea+lo-5 also +evelope++2rin( the CA ne(otiations *et&een mana(ement an+ the 2nion. The Se-retary of La*or ass2me+ ?2ris+i-tion an+ or+ere+ theretroa-tion of the CA to the +ate of e'piration of the previo2sCA. As in this -ase, it &as alle(e+ that the Se-retary of La*or(ravely a*2se+ its +is-retion in ma5in( his a&ar+ retroa-tive. n+ismissin( this -ontention this Co2rt hel+

/Therefore, in the a*sen-e of a spe-i6- provision of la& prohi*itin(retroa-tive of the eIe-tivity of ar*itral a&ar+s iss2e+ *y theSe-retary of La*or p2rs2ant to Arti-le "B3!($ of the La*or Co+e,s2-h as herein involve+, p2*li- respon+ent is +eeme+ veste+ &ithplenary an+ +is-retionary po&ers to +etermine the eIe-tivitythereof./

The Co2rt in the :an2ary ";, @@@ e-ision, state+ that the CAshall *e /eIe-tive for a perio+ of " years -o2nte+ from e-em*er", @@B 2p to e-em*er ";, @@@./ arentheti-ally, this a-t2ally-overs a three)year perio+. La*or la&s are silent as to &hen anar*itral a&ar+ in a la*or +isp2te &here the Se-retary ha+ ass2me+ ?2ris+i-tion *y virt2e of Arti-le "B3 !($ of the La*or Co+e shallretroa-t. n (eneral, a CA ne(otiate+ &ithin si' months after thee'piration of the e'istin( CA retroa-ts to the +ay imme+iatelyfollo&in( s2-h +ate an+ if a(ree+ thereafter, the eIe-tivity+epen+s on the a(reement of the parties. n the other han+, the

3

la& is silent as to the retroa-tivity of a CA ar*itral a&ar+ or that(rante+ not *y virt2e of the m2t2al a(reement of the parties *2t *yintervention of the (overnment. espite the silen-e of the la&, theCo2rt r2les herein that CA ar*itral a&ar+s (rante+ after si'months from the e'piration of the last CA shall retroa-t to s2-htime a(ree+ 2pon *y *oth employer an+ the employees or their

Manila Ele-tri- Co. v. 2is2m*in(, G.R. No.

";@ A2(2st , "### The parties respe-tive positions are *oth &ell s2pporte+ *y ?2rispr2+en-e. 9or its part, petitioner invo5es the r2lin( in !nion o' *ili E l h i thi C t h l+ th NLRC t f



time a(ree+ 2pon *y *oth employer an+ the employees or their2nion. A*sent s2-h an a(reement as to retroa-tivity, the a&ar+shall retroa-t to the 6rst +ay after the si')month perio+ follo&in(the e'piration of the last +ay of the CA sho2l+ there *e one. n thea*sen-e of a CA, the Se-retarys +etermination of the +ate of

retroa-tivity as part of his +is-retionary po&ers over ar*itral a&ar+sshall -ontrol.

t is tr2e that an ar*itral a&ar+ -annot (er se *e -ate(ori7e+ as ana(reement vol2ntarily entere+ into *y the parties *e-a2se itre<2ires the interferen-e an+ imposin( po&er of the State thr2 theSe-retary of La*or &hen he ass2mes ?2ris+i-tion. Ho&ever, thear*itral a&ar+ -an *e -onsi+ere+ as an appro'imation of a-olle-tive *ar(ainin( a(reement &hi-h &o2l+ other&ise have *eenentere+ into *y the parties. The terms or perio+s set forth in Arti-le"3)A pertains e'pli-itly to a CA. 2t there is nothin( that &o2l+prevent its appli-ation *y analo(y to an ar*itral a&ar+ *y theSe-retary -onsi+erin( the a*sen-e of an appli-a*le la&. =n+er

Arti-le "3)A /!$f any such agreement is entere+ into *eyon+ si'months, the parties shal a(ree on the +2ration of retroa-tivitythereof./ n other &or+s, the la& -ontemplates retroa-tivity &hetherthe a(reement *e entere+ into *efore or after the sai+ si')monthperio+. The a(reement of the parties nee+ not *e -ate(ori-allystate+ for their a-ts may *e -onsi+ere+ in +eterminin( the +2rationof retroa-tivity. n this -onne-tion, the Co2rt -onsi+ers the letter of petitioners Chairman of the oar+ an+ its resi+ent a++resse+ totheir sto-5hol+ers, &hi-h states that the CA /for the ran5)an+)6leemployees -overin( the perio+ e-em*er , @@ to Novem*er 3#,@@; is still &ith the S2preme Co2rt,/ as in+i-ative of petitionersre-o(nition that the CA a&ar+ -overs the sai+ perio+. Earlier,petitioners ne(otiatin( panel transmitte+ to the =nion a -opy of itspropose+ CA -overin( the same perio+ in-l2sive. n a++ition,petitioner +oes not +isp2te the alle(ation that in the past CAar*itral a&ar+s, the Se-retary (rante+ retroa-tivity -ommen-in(from the perio+ imme+iately follo&in( the last +ay of the e'pire+CA. Th2s, *y petitioners o&n a-tions, the Co2rt sees no reason toretroa-t the s2*?e-t CA a&ar+s to a +iIerent +ate. The perio+ isherein set at t&o !"$ years from e-em*er , @@ to Novem*er3#, @@;.

*ili(ro E$(lo.ees, &herein this Co2rt 2phel+ the NLRCs a-t of (ivin( prospe-tive eIe-t to the CA, an+ ar(2es that the t&o)yearar*itral a&ar+ in the -ase at *ar sho2l+ li5e&ise *e applie+prospe-tively, -o2nte+ from e-em*er ", @@B to e-em*er ";,@@. etitioner maintains that there is nothin( in Arti-le "3)A of

the La*or Co+e &hi-h states that ar*itral a&ar+s or rene&als of a-olle-tive *ar(ainin( a(reement shall al&ays have retroa-tiveeIe-t. The *ili(ro -ase &as applie+ more re-ently in Pier < Arrastre8 Stevedoring Services Inc" v" Roldan)Con'esor th2s

n !nion o' *ili(ro E$(lo.ees v" NLRC @" SCRA 44 !@@#$, thisCo2rt interprete+ the a*ove la& as follo&s

/n li(ht of the fore(oin(, this Co2rt 2phol+s the prono2n-ement of the NLRC hol+in( the CA to *e si(ne+ *y the parties eIe-tive2pon the prom2l(ation of the assaile+ resol2tion. t is -lear an+e'pli-it from Arti-le "3)A that any a(reement on s2-h otherprovisions of the CA shall *e (iven retroa-tive eIe-t only &hen itis entere+ into &ithin si' !B$ months from its e'piry +ate. f thea(reement &as entere+ into o2tsi+e the si' !B$ month perio+, thenthe parties shall a(ree on the +2ration of the retroa-tivity thereof.

/The assaile+ resol2tion &hi-h in-orporate+ the CA to *e si(ne+*y the parties &as prom2l(ate+ :2ne , @@, an+ hen-e, o2tsi+ethe B month perio+ from :2ne 3#, @;, the e'piry +ate of the pastCA. ase+ on the provision of Se-tion "3)A, its retroa-tivitysho2l+ *e a(ree+ 2pon *y the parties. 2t sin-e no a(reement tothat eIe-t &as ma+e, p2*li- respon+ent +i+ not a*2se its+is-retion in (ivin( the sai+ CA a prospe-tive eIe-t. The a-tion of the p2*li- respon+ent is &ithin the am*it of its a2thority veste+ *ye'istin( la&s./

n the -ase of Lo(e+ Sugar Cor(oration v" *ederation o' *ree7or-ers @ SCRA ;@ !@@$, this Co2rt reiterate+ the r2le thataltho2(h a CA has e'pire+, it -ontin2es to have le(al eIe-ts as*et&een the parties 2ntil a ne& CA has *een entere+ into. t is the+2ty of *oth parties to the CA to 5eep the status ,uo, an+ to-ontin2e in f2ll for-e an+ eIe-t the terms an+ -on+itions of thee'istin( a(reement +2rin( the B#)+ay free+om perio+ an+>or 2ntil ane& a(reement is rea-he+ *y the parties National Congress o' !nions in the Sugar Industr. o' the Phili((ines v" *errer)Calle0a >=HSCRA ?< ;>. Applie+ to the -ase at *en-h, the le(al eIe-ts of the imme+iate past CA *et&een petitioner an+ private respon+ent

3"

terminate+, an+ the eIe-tivity of the ne& CA *e(an, only onMar-h 4, @@3, &hen p2*li- respon+ent resolve+ their +isp2te.

n the other han+, respon+ent MEDA invo5es the r2lin( in St"Lu-es Medical Center Inc" v" Torres &hi-h hel+ that the Se-retaryof La*or has plenary an+ +is-retionary po&ers to +etermine the

ol+ CA.

An+ after an eval2ation of the parties respe-tive -ontention an+ar(2ment thereof, it is *elieve+ that that of the 2nion is fair an+reasona*le. t is the o*servation of this Ar*itrator that in almosts2*se<2ent CAs, the eIe-tivity of the rene(otiate+ CA, 2s2ally



eIe-tivity of ar*itral a&ar+s. Th2s, respon+ent maintains that thear*itral a&ar+ in this -ase sho2l+ *e ma+e eIe-tive from e-em*er, @@ to Novem*er 3#, @@;. The r2lin( in the St" Lu-es -ase &asrestate+ in the @@ -ase of Manila Central Line Corporation v.Manila Central Line 9ree Dor5ers =nion)National 9e+eration of

La*or, et al" &here it &as hel+ that

Art. "3)A refers to -olle-tive *ar(ainin( a(reements entere+ into*y the parties as a res2lt of their m2t2al a(reement. The CA inthis -ase, on the other han+, is part of an ar*itral a&ar+. As s2-h, itmay *e ma+e retroa-tive to the +ate of e'piration of the previo2sa(reement. As hel+ in St" Lu-es Medical Center Inc" v" Torres@

9inally, the eIe-tivity of the r+er of :an2ary ", @@, m2stretroa-t to the +ate of the e'piration of the previo2s CA, -ontraryto the position of petitioner. =n+er the -ir-2mstan-es of the -ase,Arti-le "3)A -annot *e properly applie+ to herein -ase. As-orre-tly state+ *y p2*li- respon+ent in his assaile+ r+er of April", @@ +ismissin( petitioners Motion for Re-onsi+eration

Anent the alle(e+ la-5 of *asis for the retroa-tivity provisionsa&ar+e+, &e &o2l+ stress that the provision of la& invo5e+ *y theHospital, Arti-le "3)A of the La*or Co+e, spea5s of a(reements *yan+ *et&een the parties, an+ not ar*itral a&ar+s . . . !p. Rollo$.

Therefore, in the a*sen-e of a spe-i6- provision of la& prohi*itin(retroa-tivity of the eIe-tivity of ar*itral a&ar+s iss2e+ *y theSe-retary of La*or p2rs2ant to Arti-le "B3!($ of the La*or Co+e,s2-h as herein involve+, p2*li- respon+ent is +eeme+ veste+ &ithplenary an+ +is-retionary po&ers to +etermine the eIe-tivitythereof >>O SCRA ?? ?>)?O ;O reiterated in Phili((ine Airlines Inc" v" Con'essor >O; SCRA ; ;.

n+ee+, petitioner has not sho&n that the <2estion of eIe-tivity&as not in-l2+e+ in the (eneral a(reement of the parties to s2*mittheir +isp2te for ar*itration. To the -ontrary, as the or+er of thela*or ar*iter states, this <2estion &as amon( those s2*mitte+ forar*itration *y the parties

As re(ar+s the /EIe-tivity an+ 2ration/ -la2se, the -ompanyproposes that the -olle-tive *ar(ainin( a(reement shall ta5e eIe-tonly 2pon its si(nin( an+ shall remain in f2ll for-e an+ eIe-t for aperio+ of 6ve years. The 2nion proposes that the a(reement shallta5e eIe-t retroa-tive to Mar-h , @@, the e'piration +ate of the

an+ most often is ma+e eIe-tive retroa-tive to the +ate &hen theimme+iately pre-e+in( CA e'pires so as to (ive a sem*lan-e of -ontin2ity. Hen-e, for this parti-2lar -ase, it is *elieve+ that there isnothin( &ron( a+optin( the stan+ of the 2nion, that is that this CA*e ma+e retroa-tive eIe-tive Mar-h , @@.

arentheti-ally, the e-ision ren+ere+ in the -ase at *ar on :an2ary";, @@@ or+ere+ that the CA sho2l+ *e eIe-tive for a term of t&oyears -o2nte+ from e-em*er ", @@B !the +ate of the Se-retaryof La*ors +isp2te+ r+er on the parties motion for re-onsi+eration$2p to e-em*er ";, @@. That is to say, the ar*itral a&ar+ &as(iven prospe-tive eIe-t.

=pon a re-onsi+eration of the e-ision, this Co2rt iss2e+ theassaile+ Resol2tion &hi-h r2le+ that &here an ar*itral a&ar+(rante+ *eyon+ si' months after the e'piration of the e'istin( CA,an+ there is no a(reement *et&een the parties as to the +ate of eIe-tivity thereof, the ar*itral a&ar+ shall retroa-t to the 6rst +ay

after the si')month perio+ follo&in( the e'piration of the last +ay of the CA. n the +ispositive portion, ho&ever, the perio+ to &hi-hthe a&ar+ shall retroa-t &as ina+vertently state+ as *e(innin( one-em*er , @@ 2p to Novem*er 3#, @@;.

n resolvin( the motions for re-onsi+eration in this -ase, this Co2rttoo5 into a--o2nt the fa-t that petitioner *elon(s to an in+2stryim*2e+ &ith p2*li- interest. As s2-h, this Co2rt -an not i(nore theenormo2s -ost that petitioner &ill have to *ear as a -onse<2en-e of the f2ll retroa-tion of the ar*itral a&ar+ to the +ate of e'piry of theCA, an+ the inevita*le eIe-t that it &o2l+ have on the nationale-onomy. n the other han+, 2n+er the poli-y of so-ial ?2sti-e, the

la& *en+s over *a-5&ar+ to a--ommo+ate the interests of the&or5in( -lass on the h2mane ?2sti6-ation that those &ith lessprivile(e in life sho2l+ have more in la&. alan-in( these t&o-ontrastin( interests, this Co2rt t2rne+ to the +i-tates of fairnessan+ e<2ita*le ?2sti-e an+ th2s arrive+ at a form2la that &o2l+a++ress the -on-erns of *oth si+es. Hen-e, this Co2rt hel+ that thear*itral a&ar+ in this -ase *e ma+e to retroa-t to the 6rst +ay afterthe si')month perio+ follo&in( the e'piration of the last +ay of theCA, i"e", from :2ne , @@B to May 3, @@.

This Co2rt, therefore, maintains the fore(oin( r2le in the assaile+

33

Resol2tion (ro hac vice. t m2st *e -lari6e+, ho&ever, that-onsonant &ith this r2le, the t&o)year eIe-tivity perio+ m2st startfrom :2ne , @@B 2p to May 3, @@, not e-em*er , @@ toNovem*er 3#, @@;.

2rin( the interre(n2m *et&een the e'piration of the e-onomi-

respon+ents.

etitioner1s -ontentions are 2ntena*le.

De 6n+ no (rave a*2se of +is-retion on the part of the NLRC, &henit entertaine+ the petition for relief 6le+ *y the private respon+entsan+ treate+ it as an appeal even if it &as 6le+ *eyon+ the



provisions of the CA an+ the +ate of eIe-tivity of the ar*itrala&ar+, it is 2n+erstoo+ that the hol+)over prin-iple shall(overn, vi+@

/Kt shall *e the +2ty of *oth parties to 5eep the stat2s <2o an+ to-ontin2e in f2ll for-e an+ eIe-t the terms an+ -on+itions of thee'istin( a(reement +2rin( the B#)+ay free+om perio+ an+>or 2ntila ne& a(reement is rea-he+ *y the parties./ espite the lapse of the formal eIe-tivity of the CA the la& still -onsi+ers the same as-ontin2in( in for-e an+ eIe-t 2ntil a ne& CA shall have *eenvali+ly e'e-2te+.

Ne& a-i6- Tim*er v. NLRC, 3" SCRA 4#4Anent the se-on+ iss2e, petitioner ar(2es that the privaterespon+ents are not entitle+ to the *ene6ts 2n+er the CA *e-a2seemployees hire+ after the term of a CA are not parties to thea(reement, an+ therefore, may not -laim *ene6ts there2n+er, evenif they s2*se<2ently *e-ome mem*ers of the *ar(ainin( 2nit.

As for the term of the CA, petitioner maintains that Arti-le "3 of the La*or Co+e refers to the -ontin2ation in f2ll for-e an+ eIe-t of the previo2s CA1s terms an+ -on+itions. y ne-essity, it -o2l+ notpossi*ly refer to terms an+ -on+itions &hi-h, as e'presslystip2late+, -ease+ to have for-e an+ eIe-t.

A--or+in( to petitioner, the provision on &a(e in-rease in the @to @4 CA *et&een petitioner Company an+ N9L provi+e+ foryearly &a(e in-reases. Lo(i-ally, these provisions en+e+ in the year@4 ) the last year that the e-onomi- provisions of the CA &ere,p2rs2ant to -ontra-t an+ la&, eIe-tive. etitioner -laims that thereis no -ontra-t2al *asis for the (rant of CA *ene6ts s2-h as &a(e

in-reases in @ an+ s2*se<2ent years, sin-e the CA stip2latesonly the in-reases for the years @ to @4.

Moreover, petitioner alle(es that it &as thro2(h no fa2lt of theirsthat no ne& CA &as entere+ pen+in( appeal of the +e-ision inNLRC Case No. RA)V)#334)".

9inally, petitioner Company -laims that it &as never (iven theopport2nity to s2*mit a -o2nter)-omp2tation of the *ene6tss2ppose+ly +2e the private respon+ents. nstea+, the NLRCalle(e+ly relie+ on the self)servin( -omp2tations of private

an+ treate+ it as an appeal. even if it &as 6le+ *eyon+ there(lementary perio+ for 6lin( an appeal. r+inarily, on-e a ?2+(ment has *e-ome 6nal an+ e'e-2tory, it -an no lon(er *e+ist2r*e+, altere+ or mo+i6e+. Ho&ever, a -aref2l s-r2tiny of thefa-ts an+ -ir-2mstan-es of the instant -ase &arrants li*erality in

the appli-ation of te-hni-al r2les an+ pro-e+2re. t &o2l+ *e a(reater in?2sti-e to +eprive the -on-erne+ employees of themonetary *ene6ts ri(htly +2e them *e-a2se of a -ir-2mstan-e over&hi-h they ha+ no -ontrol. As state+ a*ove, private respon+ents, intheir petition for relief, -laime+ that they &ere &ron(f2lly e'-l2+e+from the list of those entitle+ to the CA *ene6ts *y their 2nion,N9L, &itho2t their 5no&le+(e0 an+, *e-a2se they &ere 2n+er theimpression that they &ere a*ly represente+, they &ere not a*le toappeal their -ase on time.

The S2preme Co2rt has allo&e+ appeals from +e-isions of the la*orar*iter to the NLRC, even if 6le+ *eyon+ the re(lementary perio+,in the interest of ?2sti-e. Moreover, 2n+er Arti-le " !-$ of the

La*or Co+e, the NLRC may, in the e'er-ise of its appellate po&ers,/-orre-t, amen+ or &aive any error, +efe-t or irre(2larity &hether ins2*stan-e or in form./ 92rther, Arti-le "" of the same provi+esthat /n any pro-ee+in( *efore the Commission or any of the La*orAr*iters, the r2les of evi+en-e prevailin( in -o2rts of la& or e<2ityshall not *e -ontrollin( an+ it is the spirit an+ intention of this Co+ethat the Commission an+ its mem*ers an+ the La*or Ar*iters shall2se every an+ all reasona*le means to as-ertain the fa-ts in ea-h-ase spee+ily an+ o*?e-tively an+ &itho2t re(ar+ to te-hni-alities of la& or pro-e+2re, all in the interest of +2e pro-ess. ' ' '/

Anent the iss2e of &hether or not the term of an e'istin( CA,

parti-2larly as to its e-onomi- provisions, -an *e e'ten+e+ *eyon+the perio+ stip2late+ therein, an+ even *eyon+ the three)yearperio+ pres-ri*e+ *y la&, in the a*sen-e of a ne& a(reement.

t is -lear from the a*ove provision of la& that 2ntil a ne& Colle-tivear(ainin( A(reement has *een e'e-2te+ *y an+ *et&een theparties, they are +2ty)*o2n+ to 5eep the status ,uo an+ to -ontin2ein f2ll for-e an+ eIe-t the terms an+ -on+itions of the e'istin(a(reement. The la& +oes not provi+e for any e'-eption nor<2ali6-ation as to &hi-h of the e-onomi- provisions of the e'istin(a(reement are to retain for-e an+ eIe-t0 therefore, it m2st *e

34

2n+erstoo+ as en-ompassin( all the terms an+ -on+itions in thesai+ a(reement.

n the -ase at *ar, no ne& a(reement &as entere+ into *y an+*et&een petitioner Company an+ N9L pen+in( appeal of the+e-ision in NLRC Case No. RA)V)#334)"0 nor &ere any of the

i i i +> + +i i i i

Havin( esta*lishe+ that the CA *et&een petitioner Company an+N9L remaine+ in f2ll for-e an+ eIe-t even *eyon+ the stip2late+term, in the a*sen-e of a ne& a(reement0 an+, therefore, that thee-onomi- provisions s2-h as &a(e in-reases -ontin2e+ to havele(al eIe-t, &e are no& fa-e+ &ith the <2estion of &ho are entitle+to the *ene6ts provi+e+ there2n+er



e-onomi- provisions an+>or terms an+ -on+itions pertainin( tomonetary *ene6ts in the e'istin( a(reement mo+i6e+ or altere+. Therefore, the e'istin( CA in its entirety, -ontin2es to have le(aleIe-t.

n a re-ent -ase, the Co2rt ha+ o--assion to r2le that Arti-les "3an+ "3)A man+ate the parties to 5eep the status ,uo an+ to-ontin2e in f2ll for-e an+ eIe-t the terms an+ -on+itions of thee'istin( a(reement +2rin( the B#)+ay perio+ prior to the e'pirationof the ol+ CA an+>or 2ntil a ne& a(reement is rea-he+ *y theparties. Conse<2ently, the a2tomati- rene&al -la2se provi+e+ for*y the la&, &hi-h is +eeme+ in-orporate+ in all CA1s, provi+es thereason &hy the ne& CA -an only *e (iven a prospe-tive eIe-t.

n the -ase of Lope7 S2(ar Corporation vs. 9e+eration of 9reeDor5ers, et.al, this Co2rt reiterate+ the r2le that altho2(h a CAhas e'pire+, it -ontin2es to have le(al eIe-ts as *et&een theparties 2ntil a ne& CA has *een entere+ into. t is the +2ty of *oth

parties to the CA to 5eep the status ,uo, an+ to -ontin2e in f2llfor-e an+ eIe-t the terms an+ -on+itions of the e'istin( a(reement+2rin( the B#)+ay perio+ an+>or 2ntil a ne& a(reement is rea-he+*y the parties.

To r2le other&ise, i"e" that the e-onomi- provisions of the e'istin(CA in the instant -ase -ease+ to have for-e an+ eIe-t in the year@4, &o2l+ *e to -reate a (ap +2rin( &hi-h no a(reement &o2l+(overn, from the time the ol+ -ontra-t e'pire+ to the time a ne&a(reement shall have *een entere+ into. 9or if, as -onten+e+ *y thepetitioner, the e-onomi- provisions of the e'istin( CA &ere tohave no le(al eIe-t, &hat a(reement as to &a(e in-reases an+

other monetary *ene6ts &o2l+ (overn at allW None, it &o2l+ seem,if &e are to follo& the lo(i- of petitioner Company. Conse<2ently,the employees from the year @ on&ar+s &o2l+ *e +eprive+ of as2*stantial amo2nt of monetary *ene6ts &hi-h they -o2l+ haveen?oye+ ha+ the terms an+ -on+itions of the CA remaine+ in for-ean+ eIe-t. S2-h a sit2ation r2ns -ontrary to the very intent an+p2rpose of Arti-les "3 an+ "3)A of the La*or Co+e &hi-h is to-2r* la*or 2nrest an+ to promote in+2strial pea-e, as -an *e(leane+ from the +is-2ssions of the le(islators lea+in( to thepassa(e of sai+ la&s.

to the *ene6ts provi+e+ there2n+er.

etitioner Company insists that the ran5)an+)6le employees hire+after the term of the CA inspite of their s2*se<2ent mem*ershipin the *ar(ainin( 2nit, are not parties to the a(reement, an+-ertainly may not -laim the *ene6ts there2n+er.

De +o not a(ree. n a lon( line of -ases, this Co2rt has hel+ that&hen a -olle-tive *ar(ainin( -ontra-t is entere+ into *y the 2nionrepresentin( the employees an+ the employer, even the non)mem*er employees are entitle+ to the *ene6ts of the -ontra-t. Toa--or+ its *ene6ts only to mem*ers of the 2nion &itho2t any vali+reason &o2l+ -onstit2te 2n+2e +is-rimination a(ainstnonmem*ers. t is even -on-e+e+, that a la*orer -an -laim *ene6tsfrom a CA entere+ into *et&een the -ompany an+ the 2nion of &hi-h he is a mem*er at the time of the -on-l2sion of thea(reement, after he has resi(ne+ from sai+ 2nion.

n the same vein, the *ene6ts 2n+er the CA in the instant -ase

sho2l+ *e e'ten+e+ to those employees &ho only *e-ame s2-hafter the year @4. To e'-l2+e them &o2l+ -onstit2te 2n+2e+is-rimination an+ +eprive them of monetary *ene6ts they &o2l+other&ise *e entitle+ to 2n+er a ne& -olle-tive *ar(ainin( -ontra-tto &hi-h they &o2l+ have *een parties. Sin-e in this parti-2lar-ase, no ne& a(reement ha+ *een entere+ into after the CA1sstip2late+ term, it is only fair an+ ?2st that the employees hire+thereafter *e in-l2+e+ in the e'istin( CA. This is in -onsonan-e&ith o2r r2lin( that the terms an+ -on+itions of a -olle-tive*ar(ainin( a(reement -ontin2e to have for-e an+ eIe-t *eyon+ thestip2late+ term &hen no ne& a(reement is e'e-2te+ *y an+*et&een the parties to avoi+ or prevent the sit2ation &here no-olle-tive *ar(ainin( a(reement at all &o2l+ (overn *et&een theemployer -ompany an+ its employees.

Min+anao Terminal an+ ro5era(e Servi-e. n-.

v. Confesor, ";" SCRA B The respon+ent in+ee+ state+ in her or+er of May 4, @@3 that/this -ase is -learly *eyon+ the s-ope of the a2tomati- rene&al-la2se,/ *2t she also state+ in the same or+er that /the partieshave rea-he+ an a(reement on all the rene(otiate+ provisions of the CA/ on :an2ary 4, @@3, i.e., &ithin si' !B$ months of the

3

e'piration of the thir+ year of the CA.

The si(nin( of the CA is not +eterminative of the <2estion &hether/the a(reement &as entere+ into &ithin si' months from the +ateof e'piry of the term of s2-h other provisions as 6'e+ in s2-h-olle-tive *ar(ainin( a(reement/ &ithin the -ontemplation of Art."3 A

an+ the =nion have perfe-te+ their a(reement./ The -laim of petitioner to the -ontrary not&ithstan+in(, this is a 6n+in( of ana+ministrative a(en-y &hi-h, in the a*sen-e of evi+en-e to the-ontrary, m2st *e a8rme+.

Moreover, the or+er of the Se-retary of La*or may *e -onsi+ere+ inth t f *it l + t t A t "B3! $ f th L *



"3)A.

As alrea+y state+, on Novem*er ", @@", the =nion sent theCompany a noti-e of +ea+lo-5 in vie& of their ina*ility to re-on-iletheir positions on the main iss2es, parti-2larly on &a(es. The

=nion 6le+ a noti-e of stri5e. Ho&ever, on e-em*er , @@", in a-onferen-e -alle+ *y the NCM, the =nion an+ the Companya(ree+ on a n2m*er of provisions of the CA, in-l2+in( theprovision on &a(e in-rease, leavin( only the iss2e of retirement to*e threshe+ o2t. n time, this, too, &as settle+, so that in his re-or+of the :an2ary 4, @@3 -onferen-e, the Me+)Ar*iter note+ that /theiss2es raise+ *y the noti-e of stri5e ha+ *een settle+ an+ sai+noti-e is th2s terminate+./ t &o2l+ therefore seem that at thatpoint, there &as alrea+y a meetin( of the min+s of the parties,&hi-h &as *efore the 9e*r2ary @@3 en+ of the si')month perio+provi+e+ in Art. "3)A.

The fa-t that no a(reement &as then si(ne+ is of no moment. Art.

"3)A refers merely to an /a(reement/ &hi-h, a--or+in( to la-51sLa& i-tionary is /a -omin( to(ether of min+s0 the -omin( to(etherin a--or+ of t&o min+s on a (iven proposition./ This is similar toArt. 3# of the Civil Co+e1s +e6nition of /-ontra-t/ as /a meetin(of min+s *et&een t&o persons./

The t&o terms, /a(reement/ an+ /-ontra-t,/ are in+ee+ similar,altho2(h the former is *roa+er than the latter *e-a2se ana(reement may not have all the elements of a -ontra-t. As in the-ase of -ontra-ts, ho&ever, a(reements may *e oral or&ritten. Hen-e, even &itho2t any &ritten evi+en-e of the Colle-tivear(ainin( A(reement ma+e *y the parties, a vali+ a(reement

e'iste+ in this -ase from the moment the min+s of the parties meton all matters they set o2t to +is-2ss. As Art. 3 of the Civil Co+estates

Contra-ts are perfe-te+ *y mere -onsent, an+ from that moment,the parties are *o2n+ not only to the f2l6llment of &hat has *eene'pressly stip2late+ *2t also to all the -onse<2en-es &hi-h,a--or+in( to their nat2re, may *e in 5eepin( &ith (oo+ faith, 2sa(ean+ la&.

The Se-retary of La*or fo2n+ that /as early as :an2ary 4, @@3,&ell &ithin the si' !B$ month perio+ provi+e+ *y la&, the Company

the nat2re of an ar*itral a&ar+, p2rs2ant to Art. "B3!($ of the La*orCo+e, an+, therefore, *in+in( on the parties. After all, the Se-retaryof La*or ass2me+ ?2ris+i-tion over the +isp2te *e-a2se petitioneras5e+ the Se-retary of La*or to +o so after the NCM faile+ to ma5ethe parties -ome to an a(reement. t is also -on-e+e+ that the

in+2stry in &hi-h the petitioner is en(a(e+ is vital to the nationalinterest. As state+ in the r+er iss2e+ *y the Se-retary of La*or onMar-h #, @@3

The servi-es *ein( provi+e+ *y the Company evi+ently reQe-t theirin+ispensa*ility to the normal operations of the avao City ier&here millions of -rates an+ *o'es of (oo+s are loa+e+ an+2nloa+e+ monthly. The -2rrent +isr2ption, therefore, of theCompany1s servi-es, if allo&e+ to -ontin2e, &ill -a2se serio2spre?2+i-e an+ +ama(es to the a(ri-2lt2ral e'porters, the -ar(ohan+lers, the vessel o&ners, the forei(n *2yers of a(ri-2lt2ralpro+2-ts an+ the entire *2siness se-tor in the area. These

-onsi+erations an+ the +isp2te1s impli-ations on the nationale-onomy &arrant the intervention *y this 8-e to e'er-ise itspo&er 2n+er Arti-le "B3!($ of the La*or Co+e, as amen+e+.

n St . Lu-eBs Medical Center Inc. v . Torres, a +ea+lo-5 also+evelope+ +2rin( the CA ne(otiations *et&een mana(ement an+the 2nion. The Se-retary of La*or ass2me+ ?2ris+i-tion an+ or+ere+the retroa-tion of their CA to the +ate of e'piration of the previo2sCA. As in this -ase, it &as alle(e+ that the Se-retary of La*or(ravely a*2se+ his +is-retion in ma5in( his a&ar+ retroa-tive. n+ismissin( this -ontention this Co2rt hel+

Therefore, in the a*sen-e of a spe-i6- provision of la& prohi*itin(

retroa-tivity of the eIe-tivity of ar*itral a&ar+s iss2e+ *y theSe-retary of La*or p2rs2ant to Arti-le "B3!($ of the La*or Co+e,s2-h as herein involve+, p2*li- respon+ent is +eeme+ veste+ &ithplenary an+ +is-retionary po&ers to +etermine the eIe-tivitythereof.

This -ase is -ontrolle+ *y the r2lin( in that -ase.

Dith respe-t to the iss2e of the -re+ita*ility of the fo2rth an+ 6fthyear &a(e in-reases, the Co2rt ta5es -o(ni7an-e of the fa-t thatthe <2estion &as raise+ *y the Company only &hen the si')monthperio+ &as almost over an+ all that &as left to *e +one *y the

3B

parties &as to si(n their a(reement. efore that, the Company +i+not <2alify its position. t sho2l+ have 5no&n that -re+itin( of &a(ein-reases in the CA as -omplian-e &ith f2t2re man+ate+ in-reasesis the e'-eption rather than the r2le. 9or the (eneral r2le is thats2-h in-reases are over an+ a*ove any in-rease that may *e(rante+ *y la& or &a(e or+er. As hel+ in Me.caua.an College

-ompel private respon+ent to in-orporate this spe-i6- e-onomi-proposal in the CA. t -o2l+ have invo5e+ Arti-le "" of the La*orCo+e +e6nin( /+2ty to *ar(ain,/ th2s, the +2ty in-l2+es /e'e-2tin(a -ontra-t in-orporatin( s2-h a(reements if re<2este+ *y eitherparty./ etitioner 2nion1s assertion that it ha+ insiste+ on thein-orporation of the same proposal may have a fa-t2al *asis



( y ( . . gv . Drilon

n-rements to the la*orers1 6nan-ial (rati6-ation, *e they in theform of salary in-reases or -han(es in the salary s-ale are aime+ atone thin( improvement of the e-onomi- pre+i-ament of the

la*orers. As s2-h they sho2l+ *e vie&e+ in the li(ht of the Statesavo&e+ poli-y to prote-t la*or. Th2s, havin( entere+ into ana(reement &ith its employees, an employer may not *e allo&e+ torene(e on its o*li(ation 2n+er a -olle-tive *ar(ainin( a(reementsho2l+, at the same time, the la& (rant the employees the same or*etter terms an+ -on+itions of employment. Employee *ene6ts+erive+ from la& are e'-l2sive of *ene6ts arrive+ at thro2(hne(otiation an+ a(reement 2nless other&ise provi+e+ *y thea(reement itself or *y la&.

9or ma5in( a *elate+ iss2e of /-re+ita*ility,/ petitioner is -orre-tlysai+ to have /+elayKe+ the a(reement *eyon+ the si' !B$ monthperio+ so as to minimi7e its e'penses to the +etriment of its

&or5ers/ an+ its -on+2-t to sma-5 of /*a+ faith an+ Kto r2n-o2nter to the (oo+ faith re<2ire+ in Colle-tive ar(ainin(./ f petitioner &ante+ to *e (iven -re+it for the &a(e in-reases in theevent of f2t2re man+ate+ &a(e in-reases, it sho2l+ have e'presslystate+ its reservation +2rin( the early part of the CA ne(otiations.

Samahana Man((a(a&a sa Top 9orm v. NLRC,

"@ SCRA ;Dith respe-t to the 6rst iss2e, petitioner 2nion an-hors itsar(2ments on the alle(e+ -ommitment of private respon+ent to(rant an a2tomati- a-ross)the)*oar+ &a(e in-rease in the eventthat a stat2tory or le(islate+ &a(e in-rease is prom2l(ate+. t -itesas *asis therefor, the afore<2ote+ portion of the Min2tes of the-olle-tive *ar(ainin( ne(otiation on 9e*r2ary ";, @@# re(ar+in(&a(es, ar(2in( a++itionally that sai+ Min2tes forms part of theentire a(reement *et&een the parties.

The *asi- premise of this ar(2ment is +e6nitely 2ntena*le. To start&ith, if there &as in+ee+ a promise or 2n+erta5in( on the part of private respon+ent to o*li(ate itself to (rant an a2tomati- a-ross)the)*oar+ &a(e in-rease, petitioner 2nion sho2l+ have re<2este+ or+eman+e+ that s2-h /promise or 2n+erta5in(/ *e in-orporate+ inthe CA. After all, petitioner 2nion has the means 2n+er the la& to

p p p y-onsi+erin( the alle(ations in the aforementione+ ?oint a8+avit of its mem*ers. Ho&ever, Arti-le "" also states that the +2ty to*ar(ain /+oes not -ompel any party to a(ree to a proposal or ma5eany -on-ession./ Th2s, petitioner 2nion may not vali+ly -laim that

the proposal em*o+ie+ in the Min2tes of the ne(otiation forms partof the CA that it 6nally entere+ into &ith private respon+ent.

The CA is the la& *et&een the -ontra-tin( parties the-olle-tive *ar(ainin( representative an+ the employer)-ompany.Complian-e &ith a CA is man+ate+ *y the e'presse+ poli-y to (iveprote-tion to la*or. n the same vein, CA provisions sho2l+ *e/-onstr2e+ li*erally rather than narro&ly an+ te-hni-ally, an+ the-o2rts m2st pla-e a pra-ti-al an+ realisti- -onstr2-tion 2pon it,(ivin( +2e -onsi+eration to the -onte't in &hi-h it is ne(otiate+an+ p2rpose &hi-h it is inten+e+ to serve./ This is fo2n+e+ on the+i-t2m that a CA is not an or+inary -ontra-t *2t one impresse+&ith p2*li- interest. t (oes &itho2t sayin(, ho&ever, that only

provisions em*o+ie+ in the CA sho2l+ *e so interprete+ an+-omplie+ &ith. Dhere a proposal raise+ *y a -ontra-tin( party +oesnot 6n+ print in the CA, it is not a part thereof an+ the proponenthas no -laim &hatsoever to its implementation.

Hen-e, petitioner 2nion1s -ontention that the Min2tes of the-olle-tive *ar(ainin( ne(otiation meetin( forms part of the entirea(reement is pointless. The Min2tes reQe-ts the pro-ee+in(s an++is-2ssions 2n+erta5en in the pro-ess of *ar(ainin( for &or5er*ene6ts in the same &ay that the min2tes of -o2rt pro-ee+in(ssho& &hat transpire+ therein. At the ne(otiations, it is *2t nat2ralfor *oth mana(ement an+ la*or to a+opt positions or ma5e

+eman+s an+ oIer proposals an+ -o2nter)proposals. Ho&ever,nothin( is -onsi+ere+ 6nal 2ntil the parties have rea-he+ ana(reement. n fa-t, one of mana(ement1s 2s2al ne(otiationstrate(ies is to /. . . a(ree tentatively as yo2 (o alon( &ith the2n+erstan+in( that nothin( is *in+in( 2ntil the entire a(reement isrea-he+./ f in+ee+ private respon+ent (ro$ised to -ontin2e &iththe pra-ti-e of (rantin( a-ross)the)*oar+ salary in-reases or+ere+*y the (overnment, s2-h (ro$ise -o2l+ only *e +eman+a*le in la&if in-orporate+ in the CA.

Moreover, *y ma5in( s2-h (ro$ise, private respon+ent may not *e

3;

-onsi+ere+ in *a+ faith or at the very least, resortin( to the s-hemeof fei(nin( to 2n+erta5e the ne(otiation pro-ee+in(s thro2(hempty promises. As earlier state+, petitioner 2nion ha+, 2n+er thela&, the ri(ht an+ the opport2nity to insist onthe 'oreseeable f2l6llment of the private respon+ent1s promise *y+eman+in( its in-orporation in the CA. e-a2se the proposal &as

*e imp2te+ 2pon any of the parties thereto. All provisions in theCA are s2ppose+ to have *een ?ointly an+ vol2ntarily in-orporate+therein *y the parties. This is not a -ase &here private respon+ente'hi*ite+ an in+iIerent attit2+e to&ar+s -olle-tive *ar(ainin(*e-a2se the ne(otiations &ere not the 2nilateral a-tivity of petitioner 2nion. The CA is proof eno2(h that private respon+ent



( p p pnever em*o+ie+ in the CA, the promise has remaine+ ?2st that, apromise, the implementation of &hi-h -annot *e vali+ly +eman+e+2n+er the la&.

etitioner1s relian-e on this Co2rt1s prono2n-ements in Kio- Lo. v"

NLRC is, therefore, mispla-e+. n that -ase, the employer ref2se+to *ar(ain &ith the -olle-tive *ar(ainin( representative, i(norin( allnoti-es for ne(otiations an+ re<2ests for -o2nter proposals that the2nion ha+ to resort to -on-iliation pro-ee+in(s. n that -ase, theCo2rt opine+ that /!a$ Company1s ref2sal to ma5e -o2nter)proposal,if -onsi+ere+ in relation to the entire *ar(ainin( pro-ess, $a. indicate bad 'aith an+ this is spe-ially tr2e &here the =nion1sre<2est for a -o2nter)proposal is left 2nans&ere+./ Consi+erin( thefa-ts of that -ase, the Co2rt -on-l2+e+ that the -ompany &as/2n&illin( to ne(otiate an+ rea-h an a(reement &ith the =nion./

n the -ase at *en-h, ho&ever, petitioner 2nion +oes not +eny that

+is-2ssion on its proposal that all (overnment)man+ate+ salaryin-reases sho2l+ *e on an a-ross)the)*oar+ *asis &as /+eferre+,/p2rporte+ly *e-a2se it relie+ 2pon the /2n+erta5in(/ of thene(otiatin( panel of private respon+ent. Neither +oes petitioner2nion +eny the fa-t that /there is no provision of the @@# CA-ontainin( a stip2lation that the -ompany &ill (rant a-ross)the)*oar+ to its employees the man+ate+ &a(e in-rease./ They simplyassert that private respon+ent -ommitte+ /a-ts of 2nfair la*orpra-ti-es *y virt2e of its contractual co$$it$ent $ade during thecollective bargaining (rocess./ The mere fa-t, ho&ever, that theproposal in <2estion &as not in-l2+e+ in the CA in+i-ates thatno contractual co$$it$ent thereon &as ever ma+e *y private

respon+ent as no a(reement ha+ *een arrive+ at *y the parties. Th2s

*vio2sly the p2rpose of -olle-tive *ar(ainin( is the rea-hin( of ana(reement res2ltin( in a -ontra-t *in+in( on the parties0 *2t thefail2re to rea-h an a(reement after ne(otiations -ontin2e+ for areasona*le perio+ +oes not esta*lish a la-5 of (oo+ faith. Thestat2tes invite an+ -ontemplate a -olle-tive *ar(ainin( -ontra-t,*2t they +o not -ompel one. The +2ty to *ar(ain +oes not in-l2+ethe o*li(ation to rea-h an a(reement. . . .

Dith the e'e-2tion of the CA, *a+ faith *ar(ainin( -an no lon(er

p p ( p pe'erte+ /reasona*le eIort at (oo+ faith *ar(ainin(./

n+ee+, the a+amant insisten-e on a *ar(ainin( position to thepoint &here the ne(otiations rea-h an impasse +oes not esta*lish*a+ faith. Neither -an *a+ faith *e inferre+ from a party1s insisten-e

on the in-l2sion of a parti-2lar s2*stantive provision 2nless it-on-erns trivial matters or is o*vio2sly intolera*le.

The <2estion as to &hat are man+atory an+ &hat are merelypermissive s2*?e-ts of -olle-tive *ar(ainin( is of si(ni6-an-e on theri(ht of a party to insist on his position to the point of stalemate. Aparty may ref2se to enter into a -olle-tive *ar(ainin( -ontra-t2nless it in-l2+es a +esire+ provision as to a matter &hi-h is aman+atory s2*?e-t of -olle-tive *ar(ainin(0 *2t a ref2sal to -ontra-t2nless the a(reement -overs a matter &hi-h is not a man+atorys2*?e-t is in s2*stan-e a ref2sal to *ar(ain a*o2t matters &hi-h areman+atory s2*?e-ts of -olle-tive *ar(ainin(, an+ it is no ans&er to

the -har(e of ref2sal to *ar(ain in (oo+ faith that the insisten-e onthe +isp2te+ -la2se &as not the sole -a2se of the fail2re to a(ree orthat a(reement &as not rea-he+ &ith respe-t to other +isp2te+-la2ses.

n a--o2nt of the importan-e of the e-onomi- iss2e propose+ *ypetitioner 2nion, it -o2l+ have ref2se+ to *ar(ain an+ to enter intoa CA &ith private respon+ent. n the other han+, privaterespon+ent1s 6rm stan+ a(ainst the proposal +i+ not mean that it&as *ar(ainin( in *a+ faith. t ha+ the ri(ht /to insist on !its$position to the point of stalemate./ n the part of petitioner 2nion,the importan-e of its proposal +a&ne+ on it only after the &a(eor+ers &ere iss2e+ a'ter the CA ha+ *een entere+ into. n+ee+,

from the fa-ts of this -ase, the -har(e of *a+ faith *ar(ainin( onthe part of private respon+ent &as nothin( *2t a *elate+ rea-tionto the implementation of the &a(e or+ers that private respon+entma+e in a--or+an-e &ith la&. n other &or+s, petitioner 2nionhar*ore+ the notion that its mem*ers an+ the other employees-o2l+ have ha+ a *etter +eal in terms of &a(e in-reases ha+ itrelentlessly p2rs2e+ the in-orporation in the CA of its proposal. The inevita*le -on-l2sion is that private respon+ent +i+ not -ommitthe 2nfair la*or pra-ti-es of *ar(ainin( in *a+ faith an++is-riminatin( a(ainst its employees for implementin( the &a(e

3



the o*?e-tive of 2nion se-2rity an 2nfair la*or pra-ti-e. t is Statepoli-y to promote 2nionism to ena*le &or5ers to ne(otiate &ithmana(ement on an even playin( 6el+ an+ &ith morepers2asiveness than if they &ere to in+ivi+2ally an+ separately*ar(ain &ith the employer. 9or this reason, the la& has allo&e+stip2lations for /2nion shop/ an+ /-lose+ shop/ as means of

if re<2este+ *y either party.

Dhile it is a m2t2al o*li(ation of the parties to *ar(ain, theemployer, ho&ever, is not 2n+er any le(al +2ty to initiate -ontra-tne(otiation. The me-hani-s of -olle-tive *ar(ainin( is set in motiononly &hen the follo&in( ?2ris+i-tional pre-on+itions are present,namely !$ possession of the stat2s of ma?ority representation of



en-o2ra(in( &or5ers to ?oin an+ s2pport the 2nion of their -hoi-e inthe prote-tion of their ri(hts an+ interests vis))vis the employer.

etitionersJ -ontention that the a(reement installs ALEA as avirt2al -ompany 2nion is also 2ntena*le.;Q%(hi; =n+er Arti-le "4

!+$ of the La*or Co+e, a -ompany 2nion e'ists &hen the employera-ts /Kto initiate, +ominate, assist or other&ise interfere &ith theformation or a+ministration of any la*or or(ani7ation, in-l2+in( the(ivin( of 6nan-ial or other s2pport to it or its or(ani7ers ors2pporters./ The -ase re-or+s are *are of any sho&in( of s2-h a-ts*y AL.

De also +o not a(ree that the a(reement violates the 6ve)yearrepresentation limit man+ate+ *y Arti-le "3)A. =n+er sai+ arti-le,the representation limit for the e'-l2sive *ar(ainin( a(ent appliesonly &hen there is an e'tant CA in f2ll for-e an+ eIe-t. n theinstant -ase, the parties a(ree+ to s2spen+ the CA an+ p2t in

a*eyan-e the limit on the representation perio+.n s2m, &e are of the vie& that the AL)ALEA a(reement +ate+Septem*er ";, @@, is a vali+ e'er-ise of the free+om to -ontra-t.=n+er the prin-iple of inviola*ility of -ontra-ts (2arantee+ *y theConstit2tion, the -ontra-t m2st *e 2phel+.

:2ris+i-tional Re<2irements

Pio5 Loy v. NLRC, 4 SCRA ;@

Colle-tive *ar(ainin( &hi-h is +e6ne+ as ne(otiations to&ar+s a-olle-tive a(reement, is one of the +emo-rati- frame&or5s 2n+erthe Ne& La*or Co+e, +esi(ne+ to sta*ili7e the relation *et&een

la*or an+ mana(ement an+ to -reate a -limate of so2n+ an+ sta*lein+2strial pea-e. t is a m2t2al responsi*ility of the employer an+the =nion an+ is -hara-teri7e+ as a le(al o*li(ation. So m2-h sothat Arti-le "4@, par. !($ of the La*or Co+e ma5es it an 2nfair la*orpra-ti-e for an employer to ref2se /to meet an+ -onvene promptlyan+ e'pe+itio2sly in (oo+ faith for the p2rpose of ne(otiatin( ana(reement &ith respe-t to &a(es, ho2rs of &or5, an+ all otherterms an+ -on+itions of employment in-l2+in( proposals fora+?2stin( any (rievan-e or <2estion arisin( 2n+er s2-h ana(reement an+ e'e-2tin( a -ontra-t in-orporatin( s2-h a(reement,

namely, !$ possession of the stat2s of ma?ority representation of the employees1 representative in a--or+an-e &ith any of the meansof sele-tion or +esi(nation provi+e+ for *y the La*or Co+e0 !"$ proof of ma?ority representation0 an+ !3$ a +eman+ to *ar(ain 2n+erArti-le ", par. !a$ of the Ne& La*or Co+e . ... all of &hi-h

pre-on+itions are 2n+isp2te+ly present in the instant -ase.

9rom the over)all -on+2-t of petitioner -ompany in relation to thetas5 of ne(otiation, there -an *e no +o2*t that the =nion has avali+ -a2se to -omplain a(ainst its !Company1s$ attit2+e, thetotality of &hi-h is in+i-ative of the latter1s +isre(ar+ of, an+ fail2reto live 2p to, &hat is en?oine+ *y the La*or Co+e to *ar(ain in(oo+ faith.

De are in total -onformity &ith respon+ent NLRC1s prono2n-ementthat petitioner Company is G=LT of 2nfair la*or pra-ti-e. t has*een in+2*ita*ly esta*lishe+ that !$ respon+ent =nion &as a +2ly-erti6e+ *ar(ainin( a(ent0 !"$ it ma+e a +e6nite re<2est to *ar(ain,

a--ompanie+ &ith a -opy of the propose+ Colle-tive ar(ainin(A(reement, to the Company not only on-e *2t t&i-e &hi-h &ereleft 2nans&ere+ an+ 2na-te+ 2pon0 an+ !3$ the Company ma+e no-o2nter proposal &hatsoever all of &hi-h -on-l2sively in+i-ate la-5of a sin-ere +esire to ne(otiate. A Company1s ref2sal to ma5e-o2nter proposal if -onsi+ere+ in relation to the entire *ar(ainin(pro-ess, may in+i-ate *a+ faith an+ this is spe-ially tr2e &here the=nion1s re<2est for a -o2nter proposal is left 2nans&ere+. Even+2rin( the perio+ of -omp2lsory ar*itration *efore the NLRC,petitioner Company1s approa-h an+ attit2+e)stallin( the ne(otiation*y a series of postponements, non)appearan-e at the hearin(-on+2-te+, an+ 2n+2e +elay in s2*mittin( its 6nan-ial statements,

lea+ to no other -on-l2sion e'-ept that it is 2n&illin( to ne(otiatean+ rea-h an a(reement &ith the =nion. etitioner has not at anyinstan-e, evin-e+ (oo+ faith or &illin(ness to +is-2ss freely an+f2lly the -laims an+ +eman+s set forth *y the =nion m2-h less ?2stify its opposition thereto.

The -ase at *ar is not a -ase of 6rst impression, for in the 6eraldDeliver. Carriers !nion PA*L! vs" 6erald Publications the r2leha+ *een lai+ +o&n that /2nfair la*or pra-ti-e is -ommitte+ &hen itis sho&n that the respon+ent employer, after havin( *een serve+&ith a &ritten *ar(ainin( proposal *y the petitionin( =nion, +i+ not

4#

even *other to s2*mit an ans&er or reply to the sai+ proposal This+o-trine &as reiterate+ ane& in #rad$an vs" Court o' IndustrialRelations &herein it &as f2rther r2le+ that /&hile the la& +oes not-ompel the parties to rea-h an a(reement, it +oes -ontemplate that*oth parties &ill approa-h the ne(otiation &ith an open min+ an+ma5e a reasona*le eIort to rea-h a -ommon (ro2n+ of a(reement

-olle-tive *ar(ainin( a(reement entere+ into t&o +aysthereafter. Evi+ently, there &as pre-ipitate haste on the part of respon+ent -ompany in re-o(ni7in( petitioner 2nion, &hi-hre-o(nition appears to have *een *ase+ on the self)servin( -laim of the latter that it ha+ the s2pport of the ma?ority of the employeesin the *ar(ainin( 2nit. 92rthermore, at the time of the s2ppose+



De a(ree &ith the prono2n-ement that it is not o*li(atory 2poneither si+e of a la*or -ontroversy to pre-ipitately a--ept or a(ree tothe proposals of the other. 2t an errin( party sho2l+ not *etolerate+ an+ allo&e+ &ith imp2nity to resort to s-hemes fei(nin(

ne(otiations *y (oin( thro2(h empty (est2res.

AL= v. 9errer)Calleia. ;3 SCRA ;

De have previo2sly hel+ that the me-hani-s of -olle-tive*ar(ainin( are set in motion only &hen the follo&in( ?2ris+i-tionalpre-on+itions are present% n the present -ase, the stan+in( of petitioner as an e'-l2sive *ar(ainin( representative is +2*io2s, tosay the least. t may *e re-alle+ that respon+ent -ompany, in aletter +ate+ May ", @B an+ a++resse+ to petitioner, merelyin+i-ate+ that it &as /not a(ainst the +esire of !its$ &or5ers/ an+re<2ire+ petitioner to present proof that it &as s2pporte+ *y thema?ority thereof in a meetin( to *e hel+ on the same +ate. The

only e'press re-o(nition of petitioner as sai+ employees1*ar(ainin( representative that De see in the re-or+s is in the

re-o(nition, the employer &as o*vio2sly a&are that there &ereother 2nions e'istin( in the 2nit. As earlier state+, respon+ent-ompany1s letter is +ate+ May ", @B &hile the t&o other 2nions,So2thern hilippine 9e+eration of La*or !hereafter, S9L an+

hilippine So-ial Se-2rity La*or =nion !SSL=, for short$, &ent onstri5e earlier on May @, @B. The 2n2s2al promptit2+e in there-o(nition of petitioner 2nion *y respon+ent -ompany as thee'-l2sive *ar(ainin( representative of the &or5ers in GAD Tra+in(,n-. 2n+er the Q2i+ an+ amorpho2s -ir-2mstan-es then o*tainin(,&as +e-i+e+ly 2n&arrante+ an+ improvi+ent.

t *ears mention that even in -ases &here it &as the then Ministerof La*or himself &ho +ire-tly -erti6e+ the 2nion as the *ar(ainin(representative, this Co2rt voi+e+ s2-h -erti6-ation &here there &asa fail2re to properly +etermine &ith le(al -ertainty &hether the2nion en?oye+ a ma?ority representation. n s2-h a -ase, thehol+in( of a -erti6-ation ele-tion at a proper time &o2l+ not

ne-essarily *e a mere formality as there &as a -ompellin( reasonnot to +ire-tly an+ 2nilaterally -ertify a 2nion.

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