BITOY JAVIER (DANILO P.

JAVIER), Petitioner,
vs.
FLY ACE CORPORATION/FLORDELYN
CASTILLO, Respondents.

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 the respondents warehouse
such as cleaning and arranging the canned items before
their delivery to certain locations, except in instances when
he would be ordered to accompany the companys delivery
vehicles, aspahinante. He was not issued an identification
card and payslips by the company.
On May 6, 2008, he reported for work but he was no longer
allowed to enter the company premises.
Javier was
terminated from his employment without notice; and that he
was neither given the opportunity to refute the cause/s of
his dismissal from work.
To support his allegations, Javier presented an affidavit of
one Bengie Valenzuela who alleged that Javier was a
stevedore or pahinante of Fly Ace from September 2007 to
January 2008.
For its part, Fly Ace averred that it was engaged in the
business of importation and sales of groceries. It contracted
Javier as an extra helper on pakyaw basis per trip. He was
contracted when the companys contracted hauler, Milmar
Hauling Services, was unavailable. As evidence, Fly Ace
presented Acknowledgment Receipts bearing the words
pakyaw basis and their agreement with Milmar Hauling.
Labor Arbiter dismissed the complaint for failure to prove
that Javier was a regular employee (no ID, did not receive
employment benefits).
On appeal, NLRC reversed and favored Javier, stating that
pakyaw is only a method of compensation and not a basis
for determining the existence of employer employee
relationship. It also ratiocinated that Javier was a regular
employee of Fly Ace because there was reasonable
connection between the particular activity performed by the
employee (as a "pahinante") in relation to the usual business
or trade of the employer (importation, sales and delivery of
groceries).
The CA annulled NLRC findings and held that Javiers failure
to present salary vouchers, payslips, or other pieces of
evidence to bolster his contention, pointed to the
inescapable conclusion that he was not an employee of Fly
Ace.
Issue

Whether or not Javier was a regular employee of Fly Ace;

hence, illegal dismissal
Ruling
No. In an illegal dismissal case, the onus probandi rests on
the employer to prove that its dismissal of an employee was
for a valid cause. However, before a case for illegal dismissal
can prosper, an employer-employee relationship must first
be established.
Although Section 10, Rule VII of the New Rules of Procedure
of the NLRC allows a relaxation of the rules of procedure and
evidence in labor cases, this rule of liberality does not mean
a complete dispensation of proof. Accordingly, the petitioner
needs to show by substantial evidence that he was indeed
an employee of the company against which he claims illegal
dismissal.
While Javier remains firm in his position that as an employed
stevedore of Fly Ace, he was made to work in the company
premises during weekdays arranging and cleaning grocery
items for delivery to clients, no other proof was submitted to
fortify his claim. 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 workplace where the
latter was also hired as stevedore. Certainly, in gauging the
evidence presented by Javier, the Court cannot ignore the
inescapable conclusion that his mere presence at the
workplace falls short in proving employment therein.
While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not
be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its rights
which are entitled to respect and enforcement in the interest
of simple fair play.

JOSE MEL BERNARTE, Petitioner,

vs.
PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE
EMMANUEL M. EALA, and PERRY
MARTINEZ,Respondents.
Facts
Complainant was a referee of the PBA on contractual basis.
On January 15, 2004, Bernarte received a letter from the
Office of the Commissioner advising him that his contract
would not be renewed citing his unsatisfactory performance
on and off the court. Petitioner then filed a case for illegal
dismissal.
The Labor Arbiter declared petitioner an employee whose
dismissal by respondents was illegal.

The NLRC affirmed the decision of the Labor Arbiter.

The Court of Appeals overturned the decisions of NLRC and
Labor Arbiter. It found petitioner an independent contractor
since respondents did not exercise any form of control over
the means and methods by which petitioner performed his
work as a basketball referee.
Issues
Substantive: Whether petitioner is an employee of
respondents, which in turn determines whether petitioner
was illegally dismissed.
Procedural: Whether the Labor Arbiters decision has
become final and executory for failure of respondents to
appeal with the NLRC within the reglementary period.
Ruling
Substantive: No.
To determine the existence of an
employer-employee relationship, case law has consistently
applied the four-fold test, to wit: (a) the selection and
engagement of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employers power to
control the employee on the means and methods by which
the work is accomplished. The so-called "control test" is
the most important indicator of the presence or absence of
an employer-employee relationship.

mutually desired result without dictating the means or

methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party
hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee
relationship unlike the second, which address both the result
and the means used to achieve it.
Procedural: No. The best evidence to prove that notice was
sent would be a certification from the postmaster, who
should certify not only that the notice was issued or sent but
also as to how, when and to whom the delivery and receipt
was made. The mailman may also testify that the notice was
actually delivered.
In this case, petitioner failed to present any concrete proof
as to how, when and to whom the delivery and receipt of
the three notices issued by the post office was made. There
is no conclusive evidence showing that the post office
notices were actually received by respondents, negating
petitioners claim of constructive service of the Labor
Arbiters decision on respondents.

PHILIPPINE DAILY INQUIRER, INC., Petitioner,

vs.
LEON M. MAGTIBAY, JR. and PHILIPPINE DAILY
INQUIRER EMPLOYEES UNION (PDIEU), Respondents.
Facts

Petitioner cites the following stipulations in the retainer

contract which evidence control: (1) respondents classify or
rate a referee; (2) respondents require referees to attend all
basketball games organized or authorized by the PBA, at
least one hour before the start of the first game of each day;
(3) respondents assign petitioner to officiate ballgames, or
to act as alternate referee or substitute; (4) referee agrees
to observe and comply with all the requirements of the PBA
governing the conduct of the referees whether on or off the
court; (5) referee agrees (a) to keep himself in good
physical, mental, and emotional condition during the life of
the contract; (b) to give always his best effort and service,
and loyalty to the PBA, and not to officiate as referee in any
basketball game outside of the PBA, without written prior
consent of the Commissioner; (c) always to conduct himself
on and off the court according to the highest standards of
honesty or morality; and (6) imposition of various sanctions
for violation of the terms and conditions of the contract.
The contractual stipulations do not pertain to, much less
dictate, how and when petitioner will blow the whistle and
make calls. On the contrary, they merely serve as rules of
conduct or guidelines in order to maintain the integrity of
the professional basketball league. As correctly observed by
the Court of Appeals, "how could a skilled referee perform
his job without blowing a whistle and making calls? x x x
[H]ow can the PBA control the performance of work of a
referee without controlling his acts of blowing the whistle
and making calls?"
Logically, the line should be drawn between rules that
merely serve as guidelines towards the achievement of the

PDI hired Magtibay, on contractual basis, to assist, for a

period of five months from February 17, 1995, the regular
phone operator. His contract was extended for a period of
15 days. After its expiration, PDI announced the opening of
a new position for a second telephone operator. PDI
employee Layague applied for the same but later withdrew
her application. Hence, Magtibay, an outsider, was able to
apply.
He was placed on probationary status for a period of six
months but a week before its end, Magtibay was handed his
termination paper grounded on his alleged failure to meet
company standards. Aggrieved, Magtibay immediately filed a
complaint for illegal dismissal and damages before the Labor
Arbiter.
He alleged that he had been a regular employee by
operation of law for having worked for a total of 10 months
and that he was not apprised at the beginning of his
employment of the performance standards of the company,
hence, there was no basis for his dismissal.
PDI alleged that the period covered by the contractual
employment cannot be counted with or tacked to the period
for probation and that Magtibay was dismissed for violation
of company rules and policies, such as allowing his lover to
enter and linger inside the telephone operators booth and
for failure to meet prescribed company standards which
were allegedly made known to him at the start through an
orientation seminar conducted by the company.

Labor Arbiter dismissed the complaint but NLRC reversed the

decision. The CA also agreed with the NLRC, stating that
nowhere can it be found in the list of Basic Responsibility
and Specific Duties and Responsibilities of respondent
Magtibay that he has to abide by the duties, rules and
regulations that he has allegedly violated.
Motion for
Reconsideration denied.
Issue
Whether or not there was illegal dismissal
Ruling
No. A probationary employee, as understood under Article
281 of the Labor Code, is one who is on trial by an employer
during which the employer determines whether or not he is
qualified for permanent employment. A probationary
appointment is made to afford the employer an opportunity
to observe the fitness of a probationer while at work, and to
ascertain whether he will become a proper and efficient
employee.
It is expressly provided in the afore-quoted Article 281 that a
probationary employee may be terminated only on two
grounds: (a) for just cause, or (b) when he fails to qualify as
a regular employee in accordance with reasonable standards
made known by the employer to the employee at the time of
his engagement.
All employees, be they regular or probationary, are expected
to comply with company-imposed rules and regulations, else
why establish them in the first place. Probationary
employees unwilling to abide by such rules have no right to
expect, much less demand, permanent employment. We,
therefore find sufficient factual and legal basis, duly
established by substantial evidence, for PDI to legally
terminate Magtibays probationary employment effective
upon the end of the 6-month probationary period.

conference on the ground that the contractual workers do

not belong to the categories of employees stipulated in the
existing Collective Bargaining Agreement (CBA).
The
grievance was later referred to the National Conciliation and
Mediation Board (NCMB) for voluntary arbitration.
Respondents allege that the hiring of contractual employees
from PESO is in gross violation of the CBA tantamount to
unfair labor practice, since it violated Section 4, Article I of
the CBA, which provides for three categories of employees in
the Company: probationary, regular and casual.
With the hiring of contractual employees, the Union
contended that it would no longer have probationary and
casual employees from which it could obtain additional
Union members; thus, rendering inutile Section 1, Article III
(Union Security) of the CBA, which states: all regular rankand-file employees shall remain members of the Union and
that new employees covered by the appropriate bargaining
unit shall automatically become regular employees of the
Company.
The VA dismissed the charge of ULP but the Company was
directed to observe and comply with its commitment under
the CBA. He stressed that the right of management to
outsource parts of its operations is not totally eliminated but
is merely limited by the CBA. Given the foregoing, the
Companys engagement of PESO for the given purpose is
indubitably a violation of the CBA.
The company filed a petition under Rule 43, alleging that the
order made order was not covered by the sole issue
submitted for voluntary arbitration. The CA dismissed the
petition, stating that said the VAs ruling is interrelated and
intertwined with the sole issue to be resolved. Motion for
reconsideration denied.
Issue

PDI was only exercising its statutory hiring prerogative when

it refused to hire Magtibay on a permanent basis upon the
expiration of the six-month probationary period.
Unlike under the first ground for the valid termination of
probationary employment which is for just cause, the second
ground does not require notice and hearing.

GOYA, INC., Petitioner,

vs.
GOYA, INC. EMPLOYEES UNION-FFW, Respondent.
Facts
Petitioner Goya, Inc. hired contractual employees from PESO
Resources Development Corporation (PESO) to perform
temporary and occasional services in its factory in Parang,
Marikina City. This prompted respondent Goya, Inc.
Employees UnionFFW (Union) to request for a grievance

Whether or not the engagement of contractual workers from

PESO was a valid exercise of management prerogative.
Ruling
No. What the VA and the CA correctly ruled was that the
Companys act of contracting out/outsourcing is within the
purview of management prerogative. Both did not say,
however, that such act is a valid exercise thereof. Obviously,
this is due to the recognition that the CBA provisions agreed
upon by the Company and the Union delimit the free
exercise of management prerogative pertaining to the hiring
of contractual employees. Indeed, the VA opined that "the
right of the management to outsource parts of its operations
is not totally eliminated but is merely limited by the CBA,"
while the CA held that "this management prerogative of
contracting out services, however, is not without limitation. x
x x These categories of employees particularly with respect
to casual employees serve as limitation to the Companys

prerogative to outsource parts of its operations especially

when hiring contractual employees."
A collective bargaining agreement or CBA refers to the
negotiated contract between a legitimate labor organization
and the employer concerning wages, hours of work and all
other terms and conditions of employment in a bargaining
unit.1wphi1 As in all contracts, the parties in a CBA may
establish such stipulations, clauses, terms and conditions as
they may deem convenient provided these are not contrary
to law, morals, good customs, public order or public policy.
Thus, where the CBA is clear and unambiguous, it becomes
the law between the parties and compliance therewith is
mandated by the express policy of the law.

JENNY F. PECKSON, Petitioner,

vs.
ROBINSONS SUPERMARKET CORPORATION, JODY
GADIA, ROENA SARTE, and RUBY ALEX, Respondents.
Facts
Petitioner first joined the Robinsons Supermarket
Corporation (RSC) as a Sales Clerk, and was later promoted
to Category Buyer. Later, she was reassigned to the
position of Provincial Coordinator. Claiming that her new
assignment was a demotion because it was non-supervisory
and clerical in nature, the petitioner refused to turn over her
responsibilities to the new Category Buyer, or to accept her
new responsibilities as Provincial Coordinator.

diminution of salary, benefits, and other privileges, and the

action is not motivated by discrimination or bad faith or
effected as a form of punishment without sufficient cause.
The CA did not deviate from lower courts findings.
Issue
Whether or not transfer was a demotion
Ruling
No. Concerning the transfer of employees, these are the
following jurisprudential guidelines: (a) a transfer is a
movement from one position to another of equivalent rank,
level or salary without break in the service or a lateral
movement from one position to another of equivalent rank
or salary; (b) the employer has the inherent right to transfer
or reassign an employee for legitimate business purposes;
(c) a transfer becomes unlawful where it is motivated by
discrimination or bad faith or is effected as a form of
punishment or is a demotion without sufficient cause; (d)
the employer must be able to show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee.
It is the employers prerogative, based on its assessment
and perception of its employees qualifications, aptitudes,
and competence, to move them around in the various areas
of its business operations in order to ascertain where they
will function with maximum benefit to the company.

She was sent a Memorandum to explain such behavior, but

she refused to comply. A second memo was sent, to which
she responded that she could not accept the position of
Provincial Coordinator since she saw it as a demotion. Other
subsequent instructions were disobeyed.

We agree with the appellate court that the respondents are

justified in moving the petitioner to another equivalent
position, which presumably would be less affected by her
habitual tardiness or inconsistent attendance than if she
continued as a Category Buyer, a "frontline position" in the
day-to-day business operations of a supermarket such as
Robinsons.

Meanwhile, she had already filed a case for illegal dismissal,

alleging that the position of Category Buyer was one level
above that of the Provincial Coordinator, and that moreover,
the job description of a Provincial Coordinator was largely
clerical.

If the transfer of an employee is not unreasonable, or

inconvenient, or prejudicial to him, and it does not involve a
demotion in rank or a diminution of his salaries, benefits and
other privileges, the employee may not complain that it
amounts to a constructive dismissal.

Respondents maintain that her transfer was not a demotion

since the Provincial Coordinator occupied a "Level 5" position
like the Category Buyer, with the same work conditions,
salary and benefits. However, the position of Category
Buyer demanded the traits of punctuality, diligence and
attentiveness because it is a frontline position in the day-today business operations of RSC which the petitioner,
unfortunately, did not possess. The respondents also raised
the petitioners record of habitual tardiness as far back as
1999, as well as poor performance rating in 2005.
The Labor Arbiter dismissed the petition and was sustained
by the NLRC, reiterating that management may transfer an
employee from one office to another within the business
establishment, provided there is no demotion in rank or