various labrel cases

8/10/2019 Various LabRel Cases

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BPI VS BPI EMPLOYEES UNION

Facts:

The BSP approved the Articles of Merger executed on January 20, 2000 by and between BPI, and FEBTC.This Article and Plan of Merger was approved by the SEC on April 7, 2000.Pursuant to the Article andPlan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as thesurviving corporation. FEBTC employees, including those in its different branches across the country,were hired by petitioner as its own employees, with their status and tenure recognized and salaries andbenefits maintained. Respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPIUnibank is the exclusive bargaining agent of BPIs rank and file employees in Davao City. The formerFEBTCrank-and-file employees in Davao City did not belong to any labor union at the time of the merger.Prior to the effectivity of the merger, respondent union invited said FEBTC employees to a meetingregarding the Union Shop Clause of the existing CBA between petitioner BPI and respondent union. Theparties both advert to certain provisions of the existing CBA. After the meeting called by the union,some of the former FEBTC employees joined the union, while others refused. Later, however, some ofthose who initially joined retracted their membership. Respondent union then sent notices to theformer FEBTC employees who refused to join, as well as those who retracted their membership andcalled them to a hearing regarding the matter. When these former FEBTC employees refused to attendthe hearing, the president of the Union requested BPI to implement the Union Shop Clause of the CBAand to terminate their employment. After two months of management inaction on the request,respondent informed petitioner of its decision to refer the issue of the implementation of the UnionShop Clause of the CBA to the Grievance Committee. However, the issue remained unresolved at thislevel and so it was subsequently submitted for voluntary arbitration by the parties. Voluntary Arbitratorruled in favor of petitioner BPI. Respondent Union filed a motion for reconsideration, but the voluntary

arbitrator denied the same. It appealed to the CA and the CA reversed and set aside the decision of thevoluntary arbitrator. Hence, this petition.

Issue:

May a corporation invoke its merger with another corporation as a valid ground to exempt its absorbedemployees from the coverage of a union shop clause contained in its existing CBA with its own certifiedlabor union Employment Contracts Significantly, too, the Articles of Merger and Plan of Merger datedApril 7, 2000 did not contain any specific stipulation with respect to the employment contracts ofexisting personnel of the non-surviving entity which is FEBTC. Unlike the Voluntary Arbitrator, this Courtcannot uphold the reasoning that the general stipulation regarding transfer of FEBTC assets and

liabilities to BPI as set forth in the Articles of Merger necessarily includes the transfer of all FEBTCemployees into the employ of BPI and neither BPI nor the FEBTC employees allegedly could do anythingabout it. Even if it is so, it does not follow that the absorbed employees should not be subject to theterms and conditions of employment obtaining in the surviving corporation. The rule is that unlessexpressly assumed, labor contracts such as employment contracts and collective bargaining agreementsare not enforceable against a transferee of an enterprise, labor contracts being in personam, thusbinding only between the parties. A labor contract merely creates an action in personam and does not


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create any real right which should be respected by third parties. This conclusion draws its force from theright of an employer to select his employees and to decide when to engage them as protected under ourConstitution, and the same can only be restricted by law through the exercise of the police power.

ISSUE: Whether or not the Union Shop agreement violated the constitutional right of security of tenure

of the FEB employees absorbed by BPI.

HELD: No. As a general r ule, the State protects the workers right to security of tenure. An employeesservices can only be terminated upon just and authorized causes. In this case, the presence of a UnionShop Clause in the CBA between BPI and BPI Union must be respected. Failure of an employee to jointhe union pursuant to the clause is an authorized cause for BPI not to continue employing the employeeconcerned and BPI must respect that provision of the CBA. In the hierarchy of labor rights, unionism isfavored over security of tenure. A contrary interpretation of the Union Shop Clause would dilute itsefficacy and put the certified union that is supposedly being protected thereby at the mercy ofmanagement. Nevertheless, the FEB employees are still entitled to the twin notice rule this is to affordthem ample opportunity to whether or not join the union.

Javier VS Fly Ace Corporation G.R. No. 192558 February 15, 2012

BITOY JAVIER (DANILO P. JAVIER), Petitioner, vs. FLY ACE CORPORATION/FLORDELYN CASTILLO,Respondents.

MENDOZA, J.:

Facts:

Javier filed a complaint before the NLRC for underpayment of salaries and other labor standard benefits.

He alleged that he was an employee of Fly Ace since September 2007, performing various tasks at therespondents warehouse such as cleanin g and arranging the canned items before their delivery tocertain locations, except in instances when he would be ordered to accompany the companys deliveryvehicles, as pahinante; that he reported for work from Monday to Saturday from 7:00 oclock in the morning to 5:00 oclock in the afternoon; that during his employment, he was not issued anidentification card and payslips by the company; that on May 6, 2008, he reported for work but he wasno longer allowed to enter the company premises by the security guard upon the instruction of RubenOng (Mr. Ong), his superior. He discovered that Ong had been courting his daughter Annalyn after thetwo met at a fiesta celebration in Malabon City; that Annalyn tried to talk to Ong and convince him tospare her father from trouble but he refused to accede; that thereafter, Javier was terminated from his

employment without notice; and that he was neither given the opportunity to refute the cause/s of hisdismissal from work. To support his allegations, Javier presented an affidavit of one Bengie Valenzuelawho alleged that Javier was a stevedore or pahinante of Fly Ace from September 2007 to January 2008.The said affidavit was subscribed before the Labor Arbiter (LA).

For its part, Fly Ace averred that it was engaged in the business of importation and sales of groceries.Sometime in December 2007, Javier was contracted by its employee, Mr. Ong, as extra helper on a


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pakyaw basis at an agreed rate of P 300.00 per trip, which was later increased to P 325.00 in January2008. Mr. Ong contracted Javier roughly 5 to 6 times only in a month whenever the vehicle of itscontracted hauler, Milmar Hauling Services, was not available. On April 30, 2008, Fly Ace no longerneeded the services of Javier. Denying that he was their employee, Fly Ace insisted that there was noillegal dismissal.8 Fly Ace submitted a copy of its agreement with Milmar Hauling Services and copies of

acknowledgment receipts evidencing payment to Javier for his contracted services bearing the words,daily manpower (pakyaw/piece rate pay) and the latters signatures/initials.

On November 28, 2008, the LA dismissed the complaint for lack of merit on the ground that Javier failedto present proof that he was a regular employee of Fly Ace. Complainant has no employee ID showinghis employment nor any document showing that he received the benefits accorded to regularemployees of the Respondents. Respondent Fly Ace is not engaged in trucking business but in theimportation and sales of groceries. Since there is a regular hauler to deliver its products, we givecredence to Respondents claim that complainant was contracted on pakiao basis.

On appeal with the NLRC, Javier was favored. It ruled that the LA skirted the argument of Javier andimmediately concluded that he was not a regular employee simply because he failed to present proof. Itwas of the view that a pakyaw-basis arrangement did not preclude the existence of employer-employeerelationship. Payment by result x x x is a method of compensation and does not define the essence ofthe relation. It is a mere method of computing compensation, not a basis for determining the existenceor absence of an employer-employee relationship.10 In this case, the NLRC held that substantialevidence was sufficient basis for judgment on the existence of the employer-employee relationship.Javier was a regular employee of Fly Ace because there was reasonable connection between theparticular activity performed by the employee (as a pahinante) in relation to the usual business ortrade of the employer (importation, sales and delivery of groceries). He may not be considered as an

independent contractor because he could not exercise any judgment in the delivery of companyproducts. He was only engaged as a helper.

On March 18, 2010, the CA annulled the NLRC findings that Javier was indeed a former employee of FlyAce and reinstated the dismissal of Javiers complaint as ordered by the LA. According to the CA: Beforea case for illegal

dismissal can prosper, an employer-employee relationship must first be established. It is incumbentupon private respondent to prove the employee-employer relationship by substantial evidence. It is

incumbent upon private respondent to prove, by substantial evidence, that he is an employee ofpetitioners, but he failed to discharge his burden. The non-issuance of a company-issued identificationcard to private respondent supports petitioners contention that private respondent was not itsemployee.

Issue: Whether or not Javier was a regular employee.


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Ruling: The Court affirms the assailed CA decision.

Quantum of evidence.

It must be noted that the issue of Javiers alleged illegal dismissal is anchored on the existence of anemployer-employee relationship between him and Fly Ace. In dealing with factual issues in labor cases,substantial evidence that amount of relevant evidence which a reasonable mind might accept asadequate to justify a conclusion is sufficient.27

As the records bear out, the LA and the CA found Javiers claim of employment w ith Fly Ace as wantingand deficient. The Court is constrained to agree. Although Section 10, Rule VII of the New Rules ofProcedure of the NLRC28 allows a relaxation of the rules of procedure and evidence in labor cases, thisrule of liberality does not mean a complete dispensation of proof. Labor officials are enjoined to usereasonable means to ascertain the facts speedily and objectively with little regard to technicalities orformalities but nowhere in the rules are they provided a license to completely discount evidence, or thelack of it. The quantum of proof required, however, must still be satisfied. Accordingly, the petitionerneeds to show by substantial evidence that he was indeed an employee of the company against whichhe claims illegal dismissal.

No particular form of evidence is required to prove the existence of such employer-employeerelationship. Any competent and relevant evidence to prove the relationship may be admitted. Hence,while no particular form of evidence is required, a finding that such relationship exists must still rest on

some substantial evidence. Moreover, the substantiality of the evidence depends on its quantitative aswell as its qualitative aspects. Although substantial evidence is not a function of quantity but rather ofquality, the x x x circumstances of the instant case demand that something more should have been

proffered. Had there been other proofs of employment, such as x x x inclusion in petitioners payroll, ora clear exercise of control, the Court would have affirmed the finding of employer-employeerelationship.

In sum, the rule of thumb remains: the onus probandi falls on petitioner to establish or substantiatesuch claim by the requisite quantum of evidence.32 Whoever claims entitlement to the benefitsprovided by law should establish his or her right thereto x x x. Sadly, Javier failed to adduce substantialevidence as basis for the grant of relief.

In this case, the LA and the CA both concluded that Javier failed to establish his employment with FlyAce. By way of evidence on this point, all that Javier presented were his self-serving statements

purportedly showing his activities as an employee of Fly Ace. Clearly, Javier failed to pass thesubstantiality requirement to support his claim. Hence, the Court sees no reason to depart from thefindings of the CA.

The lone affidavit executed by one Bengie Valenzuela was unsuccessful in strengthening Javiers cause.In said document, all Valenzuela attested to was that he would frequently see Javier at the workplacewhere the latter was also hired as stevedore. Certainly, in gauging the evidence presented by Javier, the


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Court cannot ignore the inescapable conclusion that his mere presence at the workplace falls short inproving employment therein.

E-E Relationship

The Court is of the considerable view that on Javier lies the burden to pass the well-settled tests todetermine the existence of an employer-employee relationship, viz: (1) the selection and engagement ofthe employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control theemployees conduct. Of these elements, the most important criterion is whether the employer controlsor has reserved the right to control the employee not only as to the result of the work but also as to themeans and methods by which the result is to be accomplished.

In this case, Javier was not able to persuade the Court that the above elements exist in his case.1avvphi1He could not submit competent proof that Fly Ace engaged his services as a regular employee; that Fly

Ace paid his wages as an employee, or that Fly Ace could dictate what his conduct should be while atwork. In other words, Javiers allegations did not establish that his relationship with Fly Ace had theattributes of an employer-employee relationship on the basis of the above-mentioned four-fold test.Worse, Javier was not able to refute Fly Aces assertion that it had an agreement with a haulingcompany to undertake the delivery of its goods. It was also baffling to realize that Javier did not disputeFly Aces denial of his services exclusivity to the company. In short, all that Javier laid down were bareallegations without corroborative proof.

LABOR

EMPLOYER-EMPLOYEE RELATION

Ramy Gallego vs. Bayer Philippines, Inc., et. al.

G.R. No. 179807, July 31, 2009

Facts:

Ramy Gallego was contracted in 1992 by Bayer Philippines as crop protection technician to promote andmarket Bayer products by making farm visits to convince the farmers to buy their products. Petitioner

employment came to a halt in 1996 prompting Gallego to seek another employment, but he wasreemployed in 1997 as part of the product image which actually performing the same task as cropprotection technician. In 2001, he was directed to submit a resignation letter and ordered to return allpieces of service equipment, which he refused. He continued performing his duties and receivedcompensation until January 2002, however, in April 2002, he received a memorandum that he will betransferred to Luzon; and that he heard that respondents spread rumors that reached the dealers in


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Antique that he is no longer connected with Bayer and any transaction with him will not be honored asof April 30, 2002.

Believing he was terminated, he instituted a complaint for illegal dismissal before the NLRC.Respondents Bayer and Guillermo denied the existence of employment relationship, while, respondentsProduct Image and Bergonia admitted that the petitioner was hired as contractual employee and that hehas stopped reporting for work. The Labor Arbiter declared that respondents were guilty of illegaldismissal. On appeal by the respondents, the NLRC reversed the Arbiters decision and contended thatpetitioner was not dismissed but has abandoned his employment by failure to report on his duties.Hence, this petition for Review.

Issues:

(1) Was there employment relation between petitioner and respondent Bayer?

(2) Was petitioner illegally dismissed from his employment?

Ruling (First Issue):

The existence of an employer-employee relationship is determined on the basis of four standards,

namely: (a) the manner of selection and engagement of the putative employee; (b) the mode ofpayment of wages; (c) the presence or absence of power of dismissal; and (d) the presence or absenceof control of the putative employees conduct. Most determinative among these factors is the so -called"control test." If at all, the only control measure retained by Bayer over petitioner was to act as his defacto supervisor in certifying to the veracity of the accomplishment reports he submitted to ProductImage. This is by no means the kind of control that establishes an employer-employee relationship as itpertains only to the results and not the manner and method of doing the work. It would be a rarecontract of service that gives untrammelled freedom to the party hired and eschews any interventionwhatsoever in his performance of the engagement. Surely, it would be foolhardy for any company tocompletely give the reins and totally ignore the operations it has contracted out. In fine, Product Image

is ineluctably the employer of petitioner.

(Second Issue):

The Court appreciates no evidence that petitioner was dismissed. What it finds is that petitionerunilaterally stopped reporting for work before filing a complaint for illegal dismissal, based on his belief


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that Guillermo and Bergonia had spread rumors that his transactions on behalf of Bayer would no longerbe honored as of April 30, 2002. This belief remains just that it is unsubstantiated. While in cases ofillegal dismissal, the employer bears the burden of proving that the dismissal is for a valid or authorizedcause, the employee must first establish by substantial evidence the fact of dismissal

Miguela Santuyo, et al. vs. Remerco Garments Manufacturing, Inc. and/or Victoria Reyes

GR No. 174420; March 22, 2010

Facts:

Petitioners, who are employees of the Remerco Garments Manufacturing, Inc. (RGMI), were amongthose recalled to work by the company, after their union, the Kaisahan ng Manggagawa sa RemercoGarments Manufacturing Inc. (KMM Kilusan), staged a 2-year illegal strike from 1992 to 1994. Amongthe conditions of their recall was that they would no longer be paid a daily rate but on a piece-rate basis.However, even before RGMI could normalize its operations, the union filed a notice of strike in theNational Conciliation and Mediation Board (NCMB) on August 8, 1995. According to the union, RGMIconducted a time and motion study and changed the salary scheme from a daily rate to piece-rate basiswithout consulting it. It claimed that RGMI therefore not only violated the existing collective bargainingagreement (CBA) but also diminished the salaries agreed upon. It therefore committed an unfair laborpractice. The conciliation proceedings between the union and RGMI before the NCMB resulted in a lock-out. The union went on strike in November 1995. Therafter, the Secretary of Labor assumed jurisdictionover the case, pursuant to Article 263(g) of the Labor Code. It ordered all striking workers to return towork.

The Secretary of Labor found that the employees would receive higher wages if they were paid on apiece-rate rather than on a daily rate basis. Hence, the new salary scheme would be more advantageousto the employees. For this reason, despite the provisions of the CBA, the change in salary scheme wasvalidated.

In an order dated September 18, 1996, the Secretary of Labor ordered all employees to return to workand RGMI to pay its employees their unpaid salaries (from September 25, 1995 to October 14, 1995) onthe piece-rate basis. Neither the union nor RGMI appealed the aforementioned order. Meanwhile,however, on October 18, 1995, while the conciliation proceedings between the union and respondentwere pending, petitioners filed a complaint for illegal dismissal against RGMI and respondent Victoria

Reyes, accusing the latter of harassment. Petitioners subsequently amended their complaint,demanding payment of their accrued salaries from September 25 to October 14, 1995.

Respondents moved to dismiss the complaint in view of the pending conciliation proceedings, involvingthe same issue, in the NCMB. It also claimed that alleged violations of the CBA should be resolvedaccording to the grievance procedure laid out therein. It argued that the labor arbiter had no jurisdictionover the complaint. The labor arbiter assumed jurisdiction over the case and rendered a decision


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granting the claims of the union. The NLRC denied the appeal of the respondents. The Court of Appeals,however, reversed the NLRC and ruled that the labor arbiter had no jurisdiction over the complaint. Thisprompted the petitioners to elevate the matter to the Supreme Court.

Issues:

1. Did the labor arbiter have jurisdiction over the complaint filed by the petitioners?

2. Was the labor arbiter barred by prior judgment from assuming jurisdiction over the complaint?


No, the labor arbiter did not have jurisdiction over the complaint. Petitioners clearly and consistentlyquestio ned the legality of RGMIs adoption of the new salary scheme (i.e., piece -rate basis), assertingthat such action, among others, violated the existing CBA. The controversy was not a simple case of

illegal dismissal but a labor dispute involving the manner of ascertaining employees salaries, a matterwhich was governed by the existing CBA. Article 217 of the Labor Code provides that *c+ases arisingfrom the interpretation or implementation of collective bargaining agreements and those arising fromthe interpretation or enforcement of company personnel policies shall be disposed of by the LaborArbiter by referring the same to the grievance machinery and voluntary arbitration as may be providedin said agreements.

This provision requires labor arbiters to refer cases involving the implementation of CBAs to thegrievance machinery provided therein and to voluntary arbitration.

Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to thegrievance machinery and, if unresolved within seven days, they shall automatically be referred tovoluntary arbitration. Thus, under Article 261 of the Labor Code, voluntary arbitrators have original andexclusive jurisdiction over matters which have not been resolved by the grievance machinery. Pursuantto Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter should havereferred the matter to the grievance machinery provided in the CBA. Because the labor arbiter clearlydid not have jurisdiction over the subject matter, his decision was void.

(Second Issue):

Yes, the labor arbiter was barred by prior judgment from assuming jurisdiction over the complaint. TheSecretary of Labor resolved the labor dispute between the union and RGMI in his September 18, 1996order. Since neither the union nor RGMI appealed the said order, it became final and executory. Article263(g) of the Labor Code gives the Secretary of Labor discretion to assume jurisdiction over a labordispute likely to cause a strike or a lockout in an industry indispensable to the national interest and to


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decide the controversy or to refer the same to the NLRC for compulsory arbitration. In doing so, theSecretary of Labor shall resolve all questions and controversies in order to settle the dispute. TheSecretary of Labor assumed jurisdiction over the controversy because RGMI had a substantial number ofemployees and was a major exporter of garments to the United States and Canada

Settled is the rule that unions are the agent of its members for the purpose of securing just and fairwages and good working conditions. Since petitioners were part of the bargaining unit represented bythe union and members thereof, the September 18, 1996 order of the Secretary of Labor applies tothem.

Furthermore, since the union was the bargaining agent of petitioners, the complaint was barred underthe principle of conclusiveness of judgments. The parties to a case are bound by the findings in aprevious judgment with respect to matters actually raised and adjudged therein. Hence, the laborarbiter should have dismissed the complaint on the ground of res judicata.

APPEALS

Del Rosario vs. Philippine Journalists, Inc.

G.R. No. 181516, August 19, 2009


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Facts:

The instant petition stemmed from a complaint filed by petitioner, Cesario L. del Rosario, against hereinrespondent, Philippine Journalists, Inc. (PJI), for illegal dismissal with money claims.

On November 5, 2002, the Labor Arbiter rendered a decision in favor of petitioner. Respondent elevatedits case to the National Labor Relations Commission (NLRC). On January 6, 2003, it filed its memorandumof appeal together with the appeal bond issued by Philippine Pryce Assurance Corporation (PPAC).

On December 15, 2003, the NLRC issued a resolutiondismissing the appeal for failure to perfect thesame due to the posting of the appeal bond from a bonding company not duly accredited by the Court.But in a bid of liberality, the NLRC directed respondent to post a new bond, but respondent failed tocomply. Thus, on March 31, 2005, the NLRC issued a resolution dismissing the appeal.

Aggrieved, respondent filed a petition for certiorari under Rule 65 of the Rules of Court before the Courtof Appeals (CA). The CA reversed the NLRC, saying that the NLRC committed grave abuse of discretion indismissing PJIs appeal based on an erroneous finding that the surety bond respondent posted was void.The CA ratiocinated that at the time the subject bond was issued, PPAC was still authorized to issue thesame. Thus, there was no legal basis to dismiss PJIs appeal because it had actually posted a valid bond.The CA directed the NLRC to give due course to the appeal, as well as directed the respondent to file anew bond.


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Issue:

Should the appeal be granted due course?

Ruling:

Yes. The Supreme Court sided with the Court of Appeals. Article 223 of the Labor Code mandates that incases of judgment involving a monetary award, an appeal by the employer may be perfected only uponthe posting of a cash or surety bond issued by a reputable bonding company duly accredited by theCommission in an amount equivalent to the monetary award in the judgment appealed from.

The filing of a supersedeas bond for the perfection of an appeal is mandatory and jurisdictional. Therequirement that employers post a cash or surety bond to perfect their appeal is apparently intended toassure workers that if they prevail in the case, they will receive the money judgment in their favor uponthe dismissal of the formers appeal. It was intended to discourage employers from using an appeal todelay, or even evade, their obligations to satisfy their employees' just and lawful claims.

At the time of the filing of the surety bond by PJI on January 2, 2003, PPAC was still an accreditedbonding company. Thus, it was but proper to honor the appeal bond issued by a bonding company dulyaccredited by this Court at the time of its issuance. The subsequent revocation of the authority of abonding company should not prejudice parties who relied on its authority. The revocation of authorityof a bonding company is prospective in application.

Still, the Court takes due notice of the opportunity given to PJI to post a new bond issued by anaccredited bonding company in the NLRC resolution dated February 23, 2004. Yet, PJI insisted on thevalidity of the bond it had filed despite the fact the PPAC was no longer accredited to act as a surety.This notwithstanding, guided by the principle that technical rules of procedure should not hamper thequest for justice and truth, this Court deems it prudent that the case be reviewed and decided on themerits, in view of the question on the employer-employee relationship of the parties and its resultantlegal consequences. But, so as not to prejudice the rights of petitioner in this case, the Court reiteratesthe CA directive for PJI to post a new bond issued by an accredited bonding company.


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REGULAR EMPLOYEES

Philippine Long Distance Telephone Company vs. Rizalina Raut, et. al.

G.R. No. 174209, August 25, 2009

Facts:

This is an illegal case by Raut, Emnace and Capistrano against PLDT. They alleged that they were illegallydismissed on November 30 and December 16, 1996. The Labor Arbiter ruled in their favor reinstatingthe respondents to their former position or if not feasible anymore to another equal position withoutloss of seniority rights and benefits and its backwages.

Soon after, the respondents were reinstated, but allegedly continued to be treated as temporaryemployees of the company. Petitioner appealed the decision alleging that the respondents were never

employees of the company but that of an independent contractor, Peerless Integrated Services.However, NLRC affirmed the arbiters decision. The Court of Appeals also granted the NLRCs ruling. The judgment became final and exeutory.


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Issue:

Are respondents considered regular employees?

Ruling:

The Labor Arbiter, the NLRC, and the Court of Appeals found that the respondents are regularemployees of the petitioner as provided under Article 279, in relation to Article 280 of the Labor Code.Thus, the lower tribunals all affirmed the order of reinstatement of respondents and their correspondingentitlement to the payment of salaries and other benefits received by petitioners regular employees.

Finally, on the increase in the computation of the monetary award to respondents, the decision of theLabor Arbiter specified that for purposes of putting up a bond should petitioner appeal, the backwageswere computed only for a certain period. Otherwise, the actual backwages to be paid to respondentsare computed from the date of dismissal until the finality of the decision. In addition, because petitionercontinues to refuse and accord regular status to respondents and to pay them their correspondingwag es even after the lapse of two (2) years from the finality of the Labor Arbiters decision, the LaborArbiter correctly included that in its order of execution. Thus, the Labor Arbiters order of executionsimply covered the correct computation of wages an d other payments enjoyed by petitioners regularemployees.

Locsin vs. PLDT

GR No. 185251, October 2, 2009


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Facts:

On November 1, 1990, respondent Philippine Long Distance Telephone Company (PLDT) and theSecurity and Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement(Agreement) whereby SSCP would provide armed security guards to PLDT to be assigned to its variousoffices. Pursuant to such agreement, petitioners Raul Locsin and Eddie Tomaquin, among other securityguards, were posted at a PLDT office.

On August 30, 2001, respondent issued a Letter dated August 30, 2001 terminating the Agreementeffective October 1, 2001. Despite the termination of the Agreement, however, petitioners continuedto secure the premises of their assigned office. They were allegedly directed to remain at their post byrepresentatives of respondent. In support of their contention, petitioners provided the Labor Arbiterwith copies of petitioner Locsins pay slips for the period of January to September 2002.

Then, on September 30, 2002, petitioners services were terminated. Thus, petitioners filed a complaintbefore the Labor Arbiter for illegal dismissal and recovery of money claims such as overtime pay, holidaypay, premium pay for holiday and rest day, service incentive leave pay, Emergency Cost of LivingAllowance, and moral and exemplary damages against PLDT.

The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal. It was explained in theDecision that petitioners were found to be employees of PLDT and not of SSCP. Such conclusion wasarrived at with the factual finding that petitioners continued to serve as guards of PLDTs offices. As suchemployees, petitioners were entitled to substantive and procedural due process before termination ofemployment.


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Issue:

Is there employer-employee relationship?

Ruling:

Yes. From the foregoing circumstances, reason dictates that we conclude that petitioners remained attheir post under the instructions of respondent. We can further conclude that respondent dictated uponpetitioners that the latter perform their regular duties to secure the premises during operating hours.This, to our mind and under the circumstances, is sufficient to establish the existence of an employer-employee relationship.

To reiterate, while respondent and SSCP no longer had any legal relationship with the termination of theAgreement, petitioners remained at their post securing the premises of respondent while receiving theirsalaries, allegedly from SSCP. Clearly, such a situation makes no sense, and the denials proffered byrespondent do not shed any light to the situation. It is but reasonable to conclude that, with the behestand, presumably, directive of respondent, petitioners continued with their services. Evidently, such areindicia of control that respondent exercised over petitioners.


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Evidently, respondent having the power of control over petitioners must be considered as petitionersemployer from the termination of the Agreement onwards as this was the only time that anyevidence of control was exhibited by respondent over petitioners and in light of our ruling in Abella.Thus, as aptly declared by the NLRC, petitioners were entitled to the rights and benefits of employees ofrespondent, including due process requirements in the termination of their services.

Both the Labor Arbiter and NLRC found that respondent did not observe such due process requirements.Having failed to do so, respondent is guilty of illegal dismissal.

Masonic Contractor Inc. vs Madjos, Tiamzon and Rapadas

G.R. No. 185094, November 25, 2009

Facts:

Respondents Magdalena Madjos, Zenaida Tiamzon and Carmelita Rapadas were employed sometime in1991 as all- around laborers (driver/sweeper/ taga -libing/grass -cutter) by Masonic Contractor, Inc.(MCI). Each of them received an initial daily wage of P165.00 and were required to report for work from7:00 a.m. to 4:00 p.m. Three years thereafter, MCI increased their wages by P15.00 per day but notwithout earning the ire of Melvin Balais, president of MCI.

Sometime in 2004, Balais told Madjos, Tiamzon and Rapadas, along with nine (9) other employees, totake a two-day leave. When they reported for work two days thereafter, they were barred from enteringthe work premises and were informed that they had already been replaced by other workers. This


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prompted Madjos and her co-workers to file a complaint against herein petitioners for illegal dismissaland for non-payment of overtime pay, holiday pay, 13th month pay, and damages.

Petitioners, for their part, denied being the direct employer of respondents. Essentially, they arguedthat MCI had maintenance contracts with different memorial park companies and that, over the years,they had engaged the services of a certain Luz Malibiran to provide them with the necessary manpowerdepending on MCIs volume of work.

Issue:

Are respondents regular employees of petitioner?

Ruling:

Yes. Petitioners defense that they merely contracted the services of respondents through Malibir anfails to persuade us. The facts of this case show that respondents have been under the employ of MCI asearly as 1991. They were hired not to perform a specific job or undertaking. Instead, they wereemployed as all-around laborers doing varied and intermittent jobs, such as those of drivers, sweepers,

gardeners, and even undertakers or tagalibing, until they were arbitrarily terminated by MCI in 2004.Their wages were paid directly by MCI, as evidenced by the latters payroll summary, belying its self -serving and unsupported contention that it paid directly to Malibiran for respondents services.Respondents had identification cards or gate passes issued not by Malibiran, but by MCI, and wererequired to wear uniforms bearing MCIs emblem or logo when t hey reported for work.


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It is common practice for companies to provide identification cards to individuals not only as a securitymeasure, but more importantly to identify the bearers thereof as bona fide employees of the firm orinstitution that issued them. The provision of company-issued identification cards and uniforms torespondents, aside from their inclusion in MCIs summary payroll, indubitably constitutes substantialevidence sufficient to support only one conclusion: that respondents were indeed employees of MCI.

Gomez vs PNOC

G.R. No. 174044, November 27, 2009

Facts:

Petitioner Gloria V. Gomez used to work as Manager of the Legal Department of Petron Corporation,then a government- owned corporation. With Petrons privatization, she availed of the companys earlyretirement program and left that organization on April 30, 1994. On the following day, May 1, 1994,however, Filoil Refinery Corporation (Filoil), also a government-owned corporation, appointed her itscorporate secretary and legal counsel, with the same managerial rank, compensation, and benefits thatshe used to enjoy at Petron. However, the privatization did not materialize so Gomez continued to serveas corporate secretary of respondent PDMC. On September 23, 1996 its president re-hired her asadministrator and legal counsel of the company.

On March 29, 1999 the new board of directors of respondent PDMC removed petitioner Gomez ascorporate secretary. Further, at the boards meeting on October 21, 1999 the board questioned hercontinued employment as administrator. In answer, she presented the former presidents May 24, 1998letter that extended her term. Dissatisfied with this, the board sought the advice of its legaldepartment, which expressed the view that Gomezs term extension was an ultra vires act of the formerpresident. It reasoned that, since her position was functionally that of a vice-president or general


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manager, her term could be extended under the companys by -laws only with the approval of the board.The legal department held that her de facto tenure could be legally put to an end.

Petitioner Gomez for her part conceded that as corporate secretary, she served only as a corporateofficer. But, when they named her administrator, she became a regular managerial employee.Consequently, the respondent PDMCs board did no t have to approve either her appointment as such orthe extension of her term in 1998.

Issue:

Is Gomez an ordinary employee whose complaint is within the jurisdiction of the NLRC?

Ruling:

Yes. The relationship of a person to a corporation, whether as officer or agent or employee, is notdetermined by the nature of the services he performs but by the incidents of his relationship with thecorporation as they actually exist. That the employee served concurrently as corporate secretary for atime is immaterial. A corporation is not prohibited from hiring a corporate officer to perform services

under circumstances which will make him an employee. Indeed, it is possible for one to have a dual roleof officer and employee. NLRC has jurisdiction over a complaint filed by one who served both ascorporate officer and employee, when the money claims were made as an employee and not as acorporate officer.

PROJECT EMPLOYEES


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William Uy Construction vs. Trinidad

G.R. No. 183250, March 10, 2010

Facts:

Trinidad claimed that he had been working with the latter company for 16 years since 1988 as driver ofits service vehicle, dump truck, and transit mixer. He had signed several employment contracts with thecompany that identified him as a project employee although he had always been assigned to work onone project after another with some intervals. On December 2004, he was terminated from work due tothe shutdown of operations due to lack of projects but he later found out that there was a project inBatangas but he was no longer hired back.

Petitioner company countered that it was in the construction business. By the nature of such business,it had to hire and engage the services of project construction workers, including respondent Trinidad,whose employments had to be co-terminous with the completion of specific company projects. For thisreason, every time the company employed Trinidad, he had to execute an employment contract with it,called Appointment as Project Worker.


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The Lab or Arbiter dismissed Trinidads complaint for unjust dismissal and ordered petitioner company topay Trinidad P1,500.00 in unpaid service incentive leave, taking into consideration the three-yearprescriptive period for money claims. The Labor Arbiter held that, since Trinidad was a projectemployee and since his company submitted the appropriate establishment termination report to DOLE,his loss of work cannot be regarded as unjust dismissal. National Labor Relations Commission (NLRC)

affirmed the Labor A rbiters ruling, prompting respondent Trinidad to elevate his case to the Court ofAppeals (CA). The CA reversed the NLRCs findings

Issue:

Is respondent Trinidad a regular employee?

Ruling:

No. The test for distinguishing a project employee from a regular employee is whether or not he hasbeen assigned to carry out a specific project or undertaking, with the duration and scope of hisengagement specified at the time his service is contracted. Here, it is not disputed that petitionercom pany contracted respondent Trinidads service by specific projects with the duration of his workclearly set out in his employment contracts. He remained a project employee regardless of the numberof years and the various projects he worked for the company.

Generally, length of service provides a fair yardstick for determining when an employee initially hired ona temporary basis becomes a permanent one, entitled to the security and benefits of regularization. Butthis standard will not be fair, if applied to the construction industry, simply because construction firmscannot guarantee work and funding for its payrolls beyond the life of each project. The repeated and


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successive rehiring of project employees do not qualify them as regular employees, as length of serviceis not the controlling determinant of the employment tenure of a project employee, but whether theemployment has been fixed for a specific project or undertaking, its completion has been determined atthe time of the engagement of the employee.

Trinidads series of employments with petitioner company were co -terminous with its projects. Whenits Boni Serrano- Katipunan Interchange Project was finished in December 2004, Trinidads employmentended with it. He was not dismissed. His employment contract simply ended with the project for whichhe had signed up. His employment history belies the claim that he continuously worked for thecompany. Intervals or gaps separated one contract from another.

The CA noted that DOLE Order 19 required employers to submit a report of termination of employeesevery completion of construction project. And, since petitioner company submitted at the hearingbefore the Labor Arbiter only the termination report covering respondent Trinidads last projec t, it failedto satisfy such requirement.

LABOR ONLY CONTRACTING

Coca-Cola Bottlers Phils., Inc., vs. Agito, Oca III, Alariao, Jr., Ong, Arvin, Francisco, and Golez

G.R. No. 179546, February 13, 2009


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Facts:

Respondents filed before the NLRC two complaints against Petitioner, Interserve, Peerless IntegratedServices, Inc., Better Builders, Inc., and Excellent Partners, Inc. for reinstatement with backwages,regularization, nonpayment of 13th month pay, and damages. Respondents alleged in their PositionPaper that they were salesmen assigned at the Lagro Sales Office of petitioner. They had been in theemploy of petitioner for years, but were not regularized. Their employment was terminated on 8 April2002 without just cause and due process. However, they failed to state the reason/s for filing acomplaint against Interserve; Peerless Integrated Services, Inc.; Better Builders, Inc.; and ExcellentPartners, Inc.

Petitioner Coca-cola filed its Position Paper (with Motion to Dismiss), where it averred that respondentswere employees of Interserve who were tasked to perform contracted services in accordance with theprovisions of the Contract of Services executed between petitioner and Interserve on 23 March 2002.Said Contract between petitioner and Interserve, covering the period of 1 April 2002 to 30 September2002, constituted legitimate job contracting, given that the latter was a bona fide independentcontractor with substantial capital or investment in the form of tools, equipment, and machinerynecessary in the conduct of its business.

To prove the status of Interserve as an independent contractor, petitioner presented the followingpieces of evidence: (1) the Articles of Incorporation of Interserve; (2) the Certificate of Registration ofInterserve with the Bureau of Internal Revenue; (3) the Income Tax Return, with Audited FinancialStatements, of Interserve for 2001; and (4) the Certificate of Registration of Interserve as anindependent job contractor, issued by the Department of Labor and Employment (DOLE).

As a result, petitioner asserted that respondents were employees of Interserve, since it was the latterwhich hired them, paid their wages, and supervised their work, as proven by: (1) respondents PersonalData Files in the records of Interserve; (2) respondents Contract of Temporary Employment withInterserve; and (3) the payroll records of Interserve. Petitioner, thus, sought the dismissal ofrespondents complaint against it on the ground that the Labor Arbiter did not a cquire jurisdiction overthe same in the absence of an employer-employee relationship between petitioner and therespondents.


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The Labor Arbiter found that respondents were employees of Interserve and not of petitioner. TheLabor Arbiter placed considerable weight on the fact that Interserve was registered with the DOLE as anindependent job contractor, with total assets amounting to P1,439,785.00 as of 31 December 2001. Itwas Interserve that kept and maintained respondents employee records, including th eir Personal DataSheets; Contracts of Employment; and remittances to the Social Securities System (SSS), Medicare and

Pag- ibig Fund, thus, further supporting the Labor Arbiters finding that respondents were employees ofInterserve. She ruled that the circulars, rules and regulations which petitioner issued from time to timeto respondents were not indicative of control as to make the latter its employees.

Unsatisfied with the foregoing Decision of the Labor Arbiter, respondents filed an appeal with the NLRC.In their Memorandum of Appeal, respondents maintained that contrary to the finding of the LaborArbiter, their work was indispensable to the principal business of petitioner. Respondents supportedtheir claim with copies of the Delivery Agreement between petitioner and TRMD Incorporated, statingthat petitioner was engaged in the manufacture, distribution and sale of soft drinks and other relatedproducts with various plants and sales offices and warehouses located all over the Philippines.Moreover, petitioner supplied the tools and equipment used by respondents in their jobs such asforklifts, pallet, etc. Respondents were also required to work in the warehouses, sales offices, and plantsof petitioner. Respondents pointed out that, in contrast, Interserve did not own trucks, pallets cartillas,or any other equipment necessary in the sale of Coca-Cola products.

The NLRC affirmed the Labor Arbiters Decision and pronounced that no employer -employeerelationship existed between petitioner and respondents. Aggrieved once more, respondents sought

recourse with the Court of Appeals by filing a Petition for Certiorari under Rule 65. The Court of Appealsreversed the NLRC decision. The appellate court ruled that Interserve was a labor-only contractor, withinsufficient capital and investments for the services which it was contracted to perform. With onlyP510,000.00 invested in its service vehicles and P200,000.00 in its machineries and equipment,Interserve would be hard-pressed to meet the demands of daily soft drink deliveries of petitioner in theLagro area. The Court Appeals concluded that the respondents used the equipment, tools, and facilitiesof petitioner in the day-to-day sales operations.

Additionally, the Court of Appeals determined that petitioner had effective control over the means andmethod of respondents work as evidenced by the Daily Sales Monitoring Report, the ConventionalRoute System Proposed Set-up, and the memoranda issued by the supervisor of petitioner addressed toworkers, who, like respondents, were supposedly supplied by contractors. The appellate court deemedthat the respondents, who were tasked to deliver, distribute, and sell Coca-Cola products, carried outfunctions directly related and necessary to the main business of petitioner. The appellate court finallynoted that certain provisions of the Contract of Service between petitioner and Interserve suggestedthat the latters undertaking did not involve a specific job, but rather the supply of manpower.


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Issue:

Is Interserve a legitimate job contractor?

Ruling:

No.The law clearly establishes an employer-employee relationship between the principal employer andthe contractors employee upon a finding that the contractor is engaged in labor -only c ontracting.Article 106 of the Labor Code categorically states: There is labor -only contracting where the personsupplying workers to an employee does not have substantial capital or investment in the form of tools,equipment, machineries, work premises, among others, and the workers recruited and placed by suchpersons are performing activities which are directly related to the principal business of such employer.Thus, performing activities directly related to the principal business of the employer is only one of thetwo indicators that labor -only contracting exists; the other is lack of substantial capital or investment.The Court finds that both indicators exist in the case at bar.

Respondents worked for petitioner as salesmen, with the exception of respondent Gil Francisco whose job was designated as leadman. In the Delivery Agreement between petitioner and TRMD Incorporated,it is stated that petitioner is engaged in the manufacture, distribution and sale of softdrinks and otherrelated products. The work of respondents, constituting distribution and sale of Coca-Cola products, isclearly indispensable to the principal business of petitioner. The repeated re-hiring of some of therespondents supports this finding. Petitioner also does not contradict respondents allegations that theformer has Sales Departments and Sales Offices in its various offices, plants, and warehouses; and thatpetitioner hires Regional Sales Supervisors and District Sales Supervisors who supervise and control the

salesmen and sales route helpers.

As to the supposed substantial capital and investment required of an independent job contractor,petitioner calls the attention of the Court to the authorized capital stock of Interserve amounting toP2,000,000.00. It cites as authority Filipinas Synthetic Fiber Corp. v. National Labor RelationsCommission and Frondozo v. National Labor Relations Commission, where the contractors authorized


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capital stock of P1,600,000.00 and P2,000,000.00, respectively, were considered substantial for thepurpose of concluding that they were legitimate job contractors. Petitioner also refers to Neri v.National Labor Relations Commission where it was held that a contractor ceases to be a labor-onlycontractor by having substantial capital alone, without investment in tools and equipment.

Note: Labor-only contracting would give rise to: (1) the creation of an employer-employee relationshipbetween the principal and the employees of the contractor or sub-contractor; and (2) the solidaryliability of the principal and the contractor to the employees in the event of any violation of the LaborCode.

Coca-cola Bottlers Philippines vs. Ricky Dela Cruz, et. al.

G.R. No. 184977, December 7, 2009

Facts:

Respondents filed two separate complaints for regularization with money claims against Coca-ColaBottlers Philippines, Inc. Before the Labor Arbiter, the respondents alleged that they are route helpersassigned to work in the petitioners trucks. They go f rom the Coca-Cola sales offices or plants tocustomer outlets; they were hired either directly by the petitioner or by its contractors, but they do notenjoy the full remuneration, benefits and privileges granted to the petitioners regular sales force. Th eyargued that the services they render are necessary and desirable in the regular business of thepetitioner. In defense, the petitioner contended that it entered into contracts of services with Peerless

and Excellent Partners Cooperative, Inc. (Excellent) to provide allied services; under these contracts,Peerless and Excellent retained the right to select, hire, dismiss, supervise, control and discipline and paythe salaries of all personnel they assign to the petitioner; in return for these services, Peerless andExcellent were paid a stipulated fee. The petitioner posited that there is no employer-employeerelationship between the company and the respondents and the complaints should be dismissed for lackof jurisdiction on the part of the NLRC. In reply, the respondents countered that they worked under thecontrol and supervision of the companys supervisors who prepared their work schedules and


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assignments. Peerless and Excellent, too, did not have sufficient capital or investment to provideservices t o the petitioner. The respondents thus argued that the petitioners contracts of services withPeerless and Excellent are in the nature of "labor-only" contracts prohibited by law.

Issue:

Was there labor-only contracting?

Ruling:

Yes. The contract between the principal and the contractor is not the final word on how the contractedworkers relate to the principal and the purported contractor; the relationships must be tested on thebasis of how they actually operate. The legitimate job contractor must have the capitalization and

equipment to undertake the sale and distribution of the manufacturers products, and must do it on itsown using its own means and selling methods.

Even before going into the realities of workplace operations, the Court of Appeals found that the servicecontracts themselves provide ample leads into the relationship between the company, on the one hand,and Peerless and Excellent, on the other. The Court of Appeals noted that both the Peerless and theExcellent contracts show that their obligation was solely to provide the company with the services ofcontractual employees, and nothing more. These contracted services were for the handling anddelivery of the companys products and allied services. Following D.O. 18 -02 and the contracts thatspoke purely of the supply of labor, the Court of Appeals concluded that Peerless and Excellent werelabor-only contractors unless they could prove that they had the required capitalization and the right ofcontrol over their contracted workers.


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The contractors were not independently selling and distributing company products, using their ownequipment, means and methods of selling and distribution; they only supplied the manpower thathelped the company in the handing of products for sale and distribution. In the context of D.O. 18-02,the contracting for sale and distribution as an independent and self-contained operation is a legitimatecontract, but the pure supply of manpower with the task of assisting in sales and distribution controlled

by a principal falls within prohibited labor-only contracting. Consequently, the contracted personnel,engaged in component functions in the main business of the company under the latters supervision andcontrol, cannot but be regular company employees.

Joeb Aliviado, et al. vs. Procter & Gamble Philippines, Inc., et al.

G.R. No. 160506, March 9, 2010

Facts:

Petitioners worked as merchandisers of P&G. They all individually signed employment contracts witheither Promm-Gem or SAPS for periods of more or less five months at a time.They were assigned atdifferent outlets, supermarkets and stores where they handled all the products of P&G. They received

their wages from Promm-Gem or SAPS. Subsequently, petitioners filed a complaintagainst P&G forregularization, service incentive leave pay and other benefits with damages. The complaint was lateramendedto include the matter of their subsequent dismissal.

The Labor Arbiter dismissed the complaint for lack of merit and ruled that there was no employer-

employee relationship between petitioners and P&G. He found that the selection and engagement ofthe petitioners, the payment of their wages, the power of dismissal and control with respect to themeans and methods by which their work was accomplished, were all done and exercised by Promm-Gem/SAPS. He further found that Promm-Gem and SAPS were legitimate independent job contractors.On appeal to the NLRC, the NlRC affirmed the decision of the labor arbiter. Petitioners then filed apetition for certiorari with the CA, alleging grave abuse of discretion amounting to lack or excess of


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jurisdiction on the part of the Labor Arbiter and the NLRC. However, said petition was also denied by theCA.

Issues:

1.) Is P&G the employer of petitioners?

2.) Were petitioners illegally dismissed?

Ruling:

Qualify. In order to determine whether P&G is the employer of petitioners, it is necessary to firstdetermine whether Promm-Gem and SAPS are labor-only contractors or legitimate job contractors.There is "labor-only" contracting where the person supplying workers to an employer does not havesubstantial capital or investment in the form of tools, equipment, machineries, work premises, amongothers, and the workers recruited and placed by such person are performing activities which are directlyrelated to the principal business of such employer. In such cases, the person or intermediary shall beconsidered merely as an agent of the employer who shall be responsible to the workers in the samemanner and extent as if the latter were directly employed by him.

The Court held that Promm-Gem cannot be regarded as labor-only contractor but a legitimateindependent contractor because the financial statement of Promm-Gem shows that it has authorizedcapital stock of P1 million and a paid-in capital, or capital available for operations, of P500,000.00 as of1990. It also has long term assets worth P432, 895.28 and current assets of P719, 042.32. Promm-Gem


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has also proven that it maintained its own warehouse and office space with a floor area of 870 squaremeters. It also had under its name three registered vehicles which were used for itspromotional/merchandising business. Promm-Gem also has other clients aside from P&G.

On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in capital of only P31,250.00. There is no other evidence presented to show how much its working capital and assets are.Furthermore, there is no showing of substantial investment in tools, equipment or other assets.Considering that SAPS has no substantial capital or investment and the workers it recruited areperforming activities which are directly related to the principal business of P&G, the court held thatSAPS is engaged in "labor-only contracting". The contractor is considered merely an agent of the

principal employer and the latter is responsible to the employees of the labor-only contractor as if suchemployees had been directly employed by the principal employer.

With regard to the termination letters given by Promm-Gem to its employees uniformly specified thecause of dismissal as grave misconduct and breach of trust. The court held that there were no validcauses for the dismissal of petitioners-employees of Promm-Gem.

Misconduct to be valid just cause for dismissal, such misconduct (a) must be serious; (b) must relate tothe performance of the employees duties; and (c) must show that the employee has become unfit tocontinue working for the employer. In the case, petitioners-employees of Promm-Gem may havecommitted an error of judgment in claiming to be employees of P&G, but it cannot be said that theywere motivated by any wrongful intent in doing so. As such, they are guilty of only simple misconductfor assailing the integrity of Promm-Gem as a legitimate and independent promotion firm. A misconductwhich is not serious or grave, as that existing in the instant case, cannot be a valid basis for dismissing anemployee.


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Meanwhile, loss of trust and confidence, as a ground for dismissal, must be based on the willful breachof the trust reposed in the employee by his employer. Ordinary breach will not suffice. Loss of trust andconfidence, as a cause for termination of employment, is premised on the fact that the employee

concerned holds a position of responsibility or of trust and confidence. And, in order to constitute a justcause for dismissal, the act complained of must be work-related and must show that the employee isunfit to continue to work for the employer. In the case at bar, In the instant case, the petitioners-employees of Promm-Gem have not been shown to be occupying positions of responsibility or of trustand confidence. Neither is there any evidence to show that they are unfit to continue to work asmerchandisers for Promm-Gem. Hence, no valid cause for dismissal by Promm-Gem against petitioner-employees.

With regard to the petitioners placed with P&G by SAPS, they were given no written notice of dismissal.The records show that upon receipt by SAPS of P&Gs letter terminating their "Merchandising ServicesContact", they in turn verbally informed the concerned petitioners not to report for work anymore. Itmust be emphasized that the onus probandi to prove the lawfulness of the dismissal rests with theemployer. In termination cases, the burden of proof rests upon the employer to show that the dismissalis for just and valid cause. In the instant case, P&G failed to discharge the burden of proving the legalityand validity of the dismissals of those petitioners who are considered its employees. Hence, thedismissals necessarily were not justified and are therefore illegal.

OUTSOURCING

Temic Automotic Philippines vs.

Temic Automotive Philipppines Employees Union-FFW

G.R. No. 186965, December 23, 2009


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standard that the union has never questioned. In Meralco v. Quisumbing,[G.R. No. 127598, January 27,1999] the Court joined this universal recognition of outsourcing as a legitimate activity when it held thata company can determine in its best judgment whether it should contract out a part of its work for aslong as the employer is motivated by good faith; the contracting is not for purposes of circumventingthe law; and does not involve or be the result of malicious or arbitrary action.

ALIEN EMPLOYMENT PERMIT

WPP Marketing Communications, Inc., et al. vs. Jocelyn M. Galera

GR No. 169207; March 25, 2010

Jocelyn M. Galera vs. WPP Marketing Communications, Inc., et al.

GR No. 169239; March 25, 2010

Facts:

Petitioner Jocelyn M. Galera is an American citizen, who was hired by respondent John Steedman,Chairman of WPP Worldwide and Chief Executive Officer of Mindshare, Co., a corporation based in HongKong, China, to work in the Philippines for private respondent WPP Marketing Communications, Inc.(WPP), a corporation registered and operating under the laws of Philippines. Under the employmentcontract, Galera would commence employment on September 1, 1999, with the position of ManagingDirector of Mindshare Philippines. Thus, without obtaining an alien employment permit, Galera


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commenced her employment with WPP Philippines on the said date. It was only after four months fromthe time she commenced employment that private respondent WPP filed before the Bureau ofImmigration an application for petitioner Galera to receive a working visa. In the application, she wasdesignated as Vice-President of WPP. Petitioner alleged that she was constrained to sign the applicationin order that she could remain in the Philippines and retain her employment.

On December 14, 2000, private respondent Galera was verbally informed by Steedman that heremployment had been terminated. She received her termination letter the following day. Hertermination prompted Galera to commence a complaint for illegal dismissal before the labor arbiter.The labor arbiter found WPP, Steedman, Webster, and Lansang liable for illegal dismissal and damages.

Furthermore the labor arbiter stated that Galera was not only illegally dismissed but was also notaccorded due process, saying that Galera was not given an opportunity by WPP to defend herself andexplain her side. Thus, WPP did not observe both substantive and procedural due process in terminatingGaleras employment. The labor arbiter ordere d WPP to reinstate Galera and to pay her backwages,transportation and housing benefits, and moral and exemplary damages, among others.

On appeal, the NLRC reversed the labor arbiters ruling. The NLRC ruled that Galera was WPPs Vice -President, and therefore, a corporate officer at the time she was removed by the Board of Directors on14 December 2000. The NLRC ruled that the labor arbiter had no jurisdiction over the case becausebeing a corporate officer, a case arising from her termination is considered as an intra-corporatedispute, which was cognizable by the Securities and Exchange Commission under P.D. 902-A (but now bythe Regional Trial Courts designated as Commercial Courts by the Supreme Court pursuant to Section5.2 of RA No.8799).

The Court of Appeals reversed the NLRC. It ruled that Galeras appointment by the Board of Directors ofthe WPP as Vice President for Media had no legal effect as WPPs by -laws provided for only one Vice-President, which at that time was occupied. Furthermore, WPPs by -laws did not include a managingdirector as among its corporate officers. The Court of Appeals ordered WPP to pay Galera backwages


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Galera is an employee of WPP. She is not a corporate officer of WPP. An examination of WPPs by -lawsresulted in a finding that Galeras appointment as a corporate officer (Vice -President with theoperational title of Managing Director of Mindshare) during a special meeting of WPPs Board ofDirectors is an appointment to a non- existent corporate office. WPPs by -laws provided for only oneVice-President. At the time of Galeras appointment on December 31, 1999, WPP already had one Vice -President in the person of Webster. Galera cannot be said to be a director of WPP also because all fivedirectorship positions provided in the by-laws are already occupied.

The appellate court further justified that Galera was an employee and not a corporate officer bysubjecting WPP and Galeras relationship to the four -fold test: (a) the selection and engagement of theemployee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power tocontrol the employee with respect to the means and methods by which the work is to be accomplished.The appellate court found that Sections 1 and 4 of the employment contract mandate where and howoften she is to perform her work; Sections 3, 5, 6 and 7 show that wages she receives are completelycontrolled by WPP; and Sections 10 and 11 clearly state that she is subject to the regular disciplinaryprocedures of WPP.

(Second Issue):

The Labor Arbiter had jurisdiction over the illegal dismissal complaint filed by Galera. Galera being anemployee, the Labor Arbiter and the NLRC had jurisdiction over her illegal dismissal complaint. Article217 of the Labor Code vests the Labor Arbiter with the jurisdiction to hear and decide, among otherstermination disputes, involving workers, whether agricultural or non-agricultural.

(Third Issue):

Yes, WPPs dismissal of Galera lacked both substantive and procedural due process.


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WPP failed to prove any just or authorized cause for Galeras dismissal. WPP was unable to substantiatethe allegations of Steedmans December 15, 2000 letter to Galera, (questioning her leadership andcompetence). Galera, on the other hand, presented documentary evidence in the form ofcongratulatory letters, including one from Steedman, which contents are diametrically opposed to theDecember 15, 2000 letter. Also, the law requires that the employer must furnish the worker sought to

be dismissed with two written notices before termination of employment can be legally effected: (1)notice which apprises the employee of the particular acts or omissions for which his dismissal is sought;and (2) the subsequent notice w hich informs the employee of the employers decision to dismiss him.Failure to comply with the requirements taints the dismissal with illegality. WPPs acts clearly show thatGaleras dismissal did not comply with the two -notice rule.

(Fourth Issue):

No, Galera could not claim the employees benefits she is entitled under Philippine Labor Laws. The lawand the rules are consistent in stating that the employment permit must be acquired prior toemployment. Article 40 of the Labor Code states: "Any alien seeking admission to the Philippines foremployment purposes and any domestic or foreign employer who desires to engage an alien foremployment in the Philippines shall obtain an employment permit from the Department of Labor.Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations provides, among others, that if analien enters the country under a non-working visa and wishes to be employed thereafter, he may only

be allowed to be employed upon presentation of a duly approved employment permit.

Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to sanction theviolation of the Philippine labor laws requiring aliens to secure work permits before their employment.We hold that the status quo must prevail in the present case and we leave the parties where they are.This ruling, however, does not bar Galera from seeking relief from other jurisdictions.

ILLEGAL RECRUITMENT


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People vs. Balagan and Avila

G.R. No. 183099, February 3, 2010

Facts:

Complainant went into the office of a certain recruiter whom he heard can facilitate employmentoverseas. Upon arriving at the latters office, the recruiter asked him if he was interested in gettingemployment abroad. After answering in the affirmative, the recruiter told him to submit certainrequirements (e.g. passport and other requirements). After doing so, the recruiter told Complainant toprepare P150,000 for deployment. A few days later, Complainant went to the recruiters office andhanded P37,000. A day after that, he gave another P20,000. These amounts, however, were notpersonally handed to said recruiter, but instead was given to the accused (Balagan and Avila) whoallegedly served as the recruiters clerk and secretary respectively.

No deployment occurred. Complainant demanded for the return of the money, but the recruiterrefused. Upon Complainants inquiry with the POEA, he discovered that the recruiter and the accused(Balagan and Avila) were not licensed to perform recruitment activities. Aggrieved he filed a case ofSyndicated Illegal Recruitment and Estafa against the accused (Balagan and Avila only). The RTCconvicted the accused as charged, but on appeal, the CA, while affirming the conviction of Estafa,modified the conviction of Syndicated Illegal Recruitment to Simple Illegal Recruitment. Hence, thepresent petition.

Issue:


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Was the modification correct?

Ruling:

Yes, because the prosecution failed to establish that the illegal recruitment was committed by asyndicate.[1]

People vs. Maritess Martinez y Dulay

G.R. No. 158627, March 5, 2010

Facts:

Appellant Maritess Martinez and her daughter, Jenilyn Martinez, were charged with seven counts ofEstafa before the RTC of Manila. In addition, appellant together with her children Jenilyn Martinez andJulius Martinez, were also charged with the crime of Illegal Recruitment in large scale. However,warrants of arrest were served only against appellantand Julius Martinez, whereas accused JenilynMartinez remains at large. The RTC rendedered a decision acquitting Julius Martinez while declaringMaritess Martinez guilty of four (4) counts of estafa and illegal recruitment. On appeal the CA affirmedthe appellants conviction of (4) counts of estafa, while in the case of illegal recruitment modified it asillegal recruitment in large scale.

Issue:


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Is appellant guilty of illegal recruitment in large scale?

Ruling:

Yes. As defined in Art. 38 of the Labor Code, Illegal Recruitment a) any recruitment activities, includingthe prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees ornon-holders of authority shall be deemed illegal and punishable under Article 39 of this Code. x x x (b)Illegal recruitment when committed by a syndicate or in large scale shall be considered an offenseinvolving economic sabotage and shall be penalized in accordance with Article 39 hereof. illegal

recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more personsconspiring and/or confederating with one another in carrying out any unlawful or illegal transaction,enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committedin large scale if committed against three (3) or more persons individually or as a group.

In the instant case, the prosecution satisfactorily established that appellant was not a licensee or holderof authority to deploy workers abroad. By this fact alone, she is deemed to have engaged in illegalrecruitment and the same was committed in large scale because it was carried out against the fourcomplainants.

The three elements of the crime of illegal recruitment, to wit: a) the offender has no valid license orauthority required by law to enable him to lawfully engage in recruitment and placement of workers; b)the offender undertakes any of the activities within the meaning of "recruitment and placement" underArticle 13(b) of the Labor Code, or any of the prohibited practices enumerated under Article 34 of thesaid Code (now Section 6 of RA 8042); and c) the offender committed the same against three or morepersons, individually or as a group, are present in the instant case.

LNS international Manpower Services vs. Armando Padua, Jr.


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G.R. No. 179792, March 5, 2010

Facts:

Respondent Armando C. Padua, Jr. filed a Sworn Statement before the Adjudication Office of the POEAagainst LNS and Sharikat Al Saedi International Manpower (Sharikat) for violation of Section 2(b), (d),and (e) of Rule I, Part VI of the 2002 POEA Rules and Regulations Governing the Recruitment and

Employment of Land-based Overseas Workers. Respondent Padua alleged that he applied as autoelectrician with petitioner LNS and assured of a job in Saudi Arabia. Respondent paid to LNS theprocessing fees, medical expenses, and trade test. Respondent Padua further alleged that it was anotheragency, Sharikat, which processed his papers and eventually deployed him to Saudi Arabia. However, hereturned to the Philippines because he was not allegedly paid his salaries and also because of violationsin the terms and conditions of his employment contract.

In its answer, LNS admitted that Padua applied for employment abroad but he withdrew all thedocuments he submitted to LNS. As proof, LNS attached the withdrawal letter duly signed by Padua.Thus, LNS claimed that it could not be held liable for non-issuance of receipt or misrepresentation. ThePOEA issued its order finding LNS liable for non-issuance of receipt and misrepresentation. As toSharikat, the POEA found no sufficient evidence to hold it liable for the violations charged. On appeal tothe Secretary of DOLE, it dismissed the appeal of petitioner and affirmed the ruling of the POEA.Aggrieved, petitioner filed with the CA a petition for certiorari but it was dismissed.

Issue:


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Melissa Chua (appellant) was indicted for Illegal Recruitment (Large Scale). Appellant pleaded not guiltyon arraignment. Her co-accused Josie remained at large. The cases were consolidated, hence, trialproceeded only with respect to appellant. Of the five complainants, only three testified, namely, MarilynD. Macaranas (Marilyn), Erik de Guia Tan (Tan) and Harry James King (King). Appellant denied thecharges. Claiming having worked as a temporary cashier from January to October, 2002 at the office of

Golden Gate, owned by one Marilyn Calueng, she maintained that Golden Gate was a licensedrecruitment agency and that Josie, who is her godmother, was an agent.

Appellant was convicted thereof by the Regional Trial Court (RTC) of Manila. She was also indicted forfive counts of Estafa but was convicted on ly for three. The Court of Appeals affirmed appellants

conviction.

Issue:

Is appellant guilty of illegal recruitment in large scale?

Ruling:

Yes. For illegal recruitment in large scale to prosper, the prosecution has to prove three essentialelements, to wit: (1) the accused undertook a recruitment activity under Article 13(b) or any prohibitedpractice under Article 34 of the Labor Code; (2) the accused did not have the license or the authority tolawfully engage in the recruitment and placement of workers; and (3) the accused committed suchillegal activity against three or more persons individually or as a group.


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FRAUD AND LOSS OF CONFIDENCE

Eric dela Cruz and Raul Lacuata vs. Coca-Cola Bottlers Philippines, Inc.

G. R. No. 180465, July 31, 2009

Facts:

On August 12, 2000, Raymundo Sales, a salesman of Coca-Cola Bottlers met an accident while divingrespondents motor vehicle which he was then not authorized to us. While Sales was hospitalized, hewas observed to have been under the influence of liquor during the incident. This was also indicated inthe police blotter dated the same day. However, respondent discovered that Sales co -employees(Espina, dela Cruz and Lacuata) secured an August 15 police blotter and August 14 medical certificateomitting the statement that Sales was under the influence of liquor.

After initial investigation, respondent issued memoranda requiring the petitioner to explain why nodisciplinary action should be taken against th em for violation of the Employees Code vis a vis Article 282of the Labor Code in connection to their production of the police blotter and medical certificate whichdid not state the full details of the accident. Petitioners denied the participation of the alteration of thedocument. However, after further investigation, it showed that petitioners conspired to have an alteredreport prepared to make it appear that Sales was not under an influence of liquor.


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Petitioners also claimed that they conducted an impartial investigation of the incident and foundsubstantial evidence that Espadero was in cahoots with a co-worker in punching in her time card. Forthis reason, petitioners decided to terminate her.

Issue:

Is Espaderos infraction serious eno ugh to warrant the penalty of dismissal?

Ruling:

Yes. Espaderos position as a cashier is one that requires a high degree of trust and confidence, and thather infraction reasonably taints such trust and confidence reposed upon her by her employer. Therule, therefore, is that if there is sufficient evidence to show that the employee occupying a position oftrust and confidence is guilty of a breach of trust, or that his employer has ample reason to distrust him,the labor tribunal cannot justly deny the employer the authority to dismiss such employee.

In the instant case, petitioners cannot be faulted for losing their trust in Espadero. As an employeeoccupying a job which requires utmost fidelity to her employers, she failed to report to her immediatesupervisor the tampering of her time card. Whether her failure was deliberate or due to sheernegligence, and whether Espadero was or was not in cahoots with a co-worker, the fact remains that the


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The next day, the Pe titioners General Operations Manager issued two (2) memoranda directingRespondent to submit his written explanation on the release of sacks contrary to the cashiersinstructions. After submitting his explanation, another memorandum was issued Manager informing himthat he is being placed under preventive suspension pending investigation. Another notice was sent tohis house informing him of the date of the investigation but Respondents house maid refused to accept

it. On September 11, 1998, an investigation was conducted, but before a decision can be made on theinvestigation, Respondent filed, a complaint for illegal preventive suspension against the Petitioner. Afew days after, Respondent received a Notice of Termination dismissing him from the service thegrounds being "serious misconduct, dishonesty, willful breach of trust, fraud, loss of confidence andother grounds". Aggrieved, Respondent filed another case for illegal termination. Both cases wereconsolidated.

Issue:

Was the termination valid?

Ruling:

Yes. Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold:substantive and procedural. Not only must the dismissal be for a just or authorized cause, the basicrequirements of procedural due process notice and hearing must likewise be observed. Without theconcurrence of the two, the termination is illegal.

On the just cause issue, Respondent was no ordinary rank-and-file employee. As warehouseman, hisduties involved the handling of incoming and outgoing materials. He had, as the Arbiter noted, access tocompany property;tasked to closely monitor and handle company property, especially the outflow ofsacks to avoid or minimize losses. In other words, Respondent held a position of trust and confidence.When he disregarded the cashiers note, Respondent violated company procedures, laying the companyopen to the possibility of loss. This is a serious misconduct for which he should be held accountable.


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On the issue of procedural due process, the essence of due process is the opportunity to be heard; it isthe denial of this opportunity that constitutes violation of due process of law. The respondent was giventhe opportunity to be heard when a proper notice of investigation was sent to him, although the noticedid not reach him for reasons outside the petitioners control. He was not also totally unheard on thematter as he was able to explain his side through the two (2) explanation letters he submitted.

Philippine Journalists, Inc. vs. NLRC

G.R. No. 187120, February 16, 2010

Facts:

PJI is a corporation engaged in the publication of People's Journal, People's Journal Tonight, People's

Journal International, People's Taliba, Women's Journal, and Insider. In December 1978, it employedrespondent Eduardo S. Rivera (Rivera) as proof reader. Rivera rose from the ranks over the years,becoming purchasing manager in 1998. His primary duty involved the canvassing and purchase of paperand other materials for PJI's day-to-day operations. Sometime in November 2002, Women's Journalimplemented a calendar insertion project requiring paper-coated materials. Rivera canvassed andpurchased the material sheet. Consistencies in the canvass and prices were found. On January 8, 2003,PJI's Chief Legal Counsel issued a memorandumrequiring Rivera to explain in writing why he "should notbe terminated from employment for defrauding or attempting to defraud the Company " in thecanvassing and purchase of Womens Journals paper requirements. Rivera submitted his writtenexplanation, denying that he defrauded or attempted to defraud PJI. Ruiz-Bruno issued a memorandumon the same day to Assistant Purchasing Manager Jean Alvarado (Alvarado), requiring her to explain thedifference in the quotation prices. On the same day, Alvarado submitted her explanation, stating thatshe signed the canvass sheet as instructed by Rivera and she claimed that the figures were written byRivera himself.


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In a memorandum dated February 7, 2003, Rivera was terminated "on the ground of loss of confidence".Rivera filed a complaint for illegal dismissal. Labor Arbiter found that Rivera's dismissal was proper. TheNLRC reversed the labor arbiter's decision which was affirmed by the CA.

Issue:

Is the dismissal on the ground of loss of confidence valid?

Ruling:

Yes. As the company's purchasing manager, Rivera held a position of trust and confidence; his role in the

procurement of the company's operational requirements is critical. PJI is a publication company and isengaged in a highly competitive enterprise. The facts shows that Rivera arranged a purchase transactionmarkedly disadvantageous to the

various labrel cases

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