G.R. No.

114337
FIRST DIVISION / KAPUNAN, J.:
September 29, 1995

FACTS:

Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired Roberto Capili sometime
in May 1990 as an apprentice machinist, molder and core maker as evidenced by an apprenticeship agreement 2for a period of
six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate of P66.75 which was 75% of the applicable minimum
wage. On August 2, 1990, Roberto Capili who was handling a piece of glass which he was working on, accidentally hit and injured the
leg of an office secretary who was treated at a nearby hospital. Further, Capili entered a workshop within the office premises
which was not his work station. There, he operated one of the power press machines without authority and in the process injured
his left thumb. The following day he was asked to resign. Three days after, , private respondent formally filed before the NLRC
Arbitration Branch, National Capital Region a complaint for illegal dismissal and payment of other monetary benefits.

The Labor Arbiter rendered his decision finding the termination of private respondent as valid and dismissing the
money claim for lack of merit. On appeal, NLRC issued an order reversing the decision of the Labor Arbiter. The NLRC declared that
Capili was a regular employee of Nitto Enterprises and not an apprentice. Consequently, Labor Arbiter issued a Writ of Execution
ordering for the reinstatement of Capili and to collect his back wages. Petitioner, Nitto Enterprises filed a case to the
Supreme Court.

ISSUE: Does the NLRC correctly rule that Capili is a regular employee and not an apprentice of Nitto Enterprises?

LAW: Article 280 of the Labor Code

RULING:

Yes. The apprenticeship agreement between petitioner and private respondent was executed on May 28, 1990
allegedly employing the latter as an apprentice in the trade of "care maker/molder. However, the apprenticeship Agreement
was filed only on June 7, 1990.Notwithstanding the absence of approval by the Department of Labor and Employment, the apprenticeship
agreement was enforced the day it was signed. The act of filing the proposed apprentice ship program with the Department of Labor
and Employment is a preliminary step towards its final approval and does not instantaneously give rise to an employer-apprentice
relationship.

Nitto Enterprises did not comply with the requirements of the law. It is mandated that apprenticeship agreements entered
into by the employer and apprentice shall be entered only in accordance with the apprenticeship program duly approved by the Minister
of Labor and Employment. Thus, the apprenticeship agreement has no force and effect; and Capili is considered to be a regular employee
of the company.

OPINION:

I concur with the Courts findings that since the apprenticeship agreement between petitioner and private respondent have no
force and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private respondent's assertion that he was
hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves credence. He should rightly be considered as a
regular employee of petitioner as defined by Article 280 of the Labor Code.
 Bernardo vs NLRC
GR 122917 07/03/99
FACTS:

Petitioners numbering 43 are deafmutes who were hired on various periods from 1988 to 1993 by respondent Far East Bank and Trust
Co. as Money Sorters and Counters through a uniformly worded agreement called Employment Contract for Handicapped Workers.
Subsequently, they are dismissed.

Petitioners maintain that they should be considered regular employees, because their task as money sorters and counters was necessary
and desirable to the business of respondent bank. They further allege that their contracts served merely to preclude the application of
Article 280 and to bar them from becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as special workers and should not in any way be
considered as part of the regular complement of the Bank.[12] Rather, they were special workers under Article 80 of the Labor Code.

ISSUE: WON petitioners have become regular employees.

HELD:

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of one month, after which the
employer shall determine whether or not they should be allowed to finish the 6-month term of the contract. Furthermore, the employer
may terminate the contract at any time for a just and reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed the contracts of 37 of them. In
fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and the hiring of others lead
to the conclusion that their tasks were beneficial and necessary to the bank. More important, these facts show that they were qualified to
perform the responsibilities of their positions. In other words, their disability did not render them unqualified or unfit for the tasks assigned
to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the same terms and
conditions of employment as a qualified able-bodied person. Section 5 of the Magna Carta provides:

Section 5. Equal Opportunity for Employment.No disabled person shall be denied access to opportunities for suitable employment. A
qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges,
benefits, fringe benefits, incentives or allowances as a qualified able bodied person.

The fact that the employees were qualified disabled persons necessarily removes the employment contracts from the ambit of Article
80. Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor
Code, which provides:

ART. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, x x x

The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary
or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the
job for at least one year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity, and while such activity exists.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed the contracts of 37 of them. In
fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and the hiring of others lead
to the conclusion that their tasks were beneficial and necessary to the bank. More important, these facts show that they were qualified to
perform the responsibilities of their positions. In other words, their disability did not render them unqualified or unfit for the tasks assigned
to them.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of respondent bank. With the exception
of sixteen of them, petitioners performed these tasks for more than six months.

Petition granted
 Manila Terminal Company, Inc. vs. Court Of Industrial Relations

FACTS:

On September 1, 1945, Herein petitioner undertook the arrastre service in some of the piers in Manilas Port Area at the request and
under the control of the U.S. Army. Petitioner hired some 30 men as watchmen on 12 hour shifts at a compensation of P3.00 per day for
the day shift and P6.00 per day for the night shift. On February 1, 1946, the petitioner began the postwar operation of the arrastre service
at the present at the request and under the control of the Bureau of Customs, by virtue of a contract entered into with Philippine
Government. The watchmen of the petitioner continued in the service with a number of substitution and additions, their salaries having
been raised during the month of February to P4.00 per day for the dayshift and P6.25 per day for the nightshift.

Later, some of the members of the Manila Terminal Relief and Mutual Aid Association, sent a letter to the Department of Labor, requesting
that the overtime pay be investigated, but nothing was done by the Department. On May 27, 1947 the petitioner instituted the system of
strict 8 hour shifts. On July 28, 1947 Manila Aid Association filed an amended petition with the Court of Industrial Relations praying,
among others, that petitioner be ordered to pay its watchmen or police force overtime pay from the commencement of their employment.

The case thereafter alleviated in which Judge Lanting ruled;

1.) The decision under review should be affirmed in so far it grants compensation for overtime on regular days during the period from the
date of entrance to duty to May 24, 1947, such compensation to consist of the amount that corresponds to the four hours overtime at the
regular rate and an additional amount of 25 per cent thereof.

2.) As the compensation for work done on Sundays and legal holidays, the petitioner should pay its watchmen the compensation that
corresponds to the overtime (in excess of 8 hours) at the regular rate only.

3.) The watchmen are not entitled to night differential pay for past service, and therefore the decision should be reversed.

Hence, this petition, contending that the agreement under which its police force were paid certain specific wages for 12 hour shifts,
included overtime compensation.

ISSUE: Whether or not the agreement under which its police force were paid certain specific wages for 12 hour shifts, includes the
overtime compensation?

HELD:

No. The Court ruled that in times of acute employment, regardless of its terms and conditions, their main concern in the first place being
admission to some work. The petitioners watchmen must have railroaded themselves into their employment for their subsistence,
although they found themselves required to work for 12 hours a day. True, there was agreement to work, but it cannot fairly be supposed
that they had the freedom to bargain in any way, much less to insist in the observance of the 8 hour labor law.

Also, there was no reduction was made in the salaries which its watchmen received under the 12 hour arrangement. Although, it may be
argued that the salary for the night shift was lessened, the fact that the rate for the day shift was increased in a sense tends to militate
against the contention that the salaries given during the 12 hour shifts included overtime compensation.

The law gives the Association the right to extra compensation. And they could not be held to have impliedly waived such extra
compensation, for the obvious reason that could not have expressly waived it.

It is high time that all employers were warned that the public is interested in the strict enforcement of the Eight Hour Labor Law. This
was designed not only to safeguard the health and welfare of the laborer or employee, but in a way to minimize unemployment by forcing
employers, in cases where more than 8 hour operation is necessary, to utilize different shifts of laborers or employees working only for
8 hour each.

The appealed decision, in the form voted by Judge Lanting, is affirmed, it being understood that the petitioners watchmen will be entitled
to extra compensation only from the dates they respectively entered the service of the petitioner.
 ASIA PACIFIC CHARTERING (PHILS.) INC.vs. MARIA LINDA R. FAROLAN
FACTS:

Respondent Maria Linda R. Farolan was hired as Sales Manager of petitioner for its passenger and cargo GSA operations for
Scandinavian Airline System (SAS). Soon after respondent assumed her post, she participated in a number of meetings/seminars
(technical aspects all geared towards improving her marketing and sales skills)

Respondent, upon instruction of Bondoc (VP/Comptroller), submitted a report. As reflected in respondents report, there was a drop in
SAS sales revenues which to her was attributable to market forces beyond her control. Petitioner directed its high ranking officer Roberto
Zozobrado to conduct an investigation on the matter and identify the problem/s and implement possible solutions.

Zozobrado thus informally took over some of respondents marketing and sales responsibilities, albeit respondent retained her title as
Sales Manager and continued to receive her salary as such.

Soren Jespersen, General Manager of SAS, came to the Philippines to assess the statistics on SAS sales revenues and SAS was
convinced that respondent was not fit for the job of Sales Manager; and in view of the changes introduced by Zozobrado, SAS-GSA sales
operations drew positive results.

Respondent Farolan nevertheless, received letter from Jespersen congratulating him for exceeding sale results in April and a number of
recommendations for improvement. However, on even date, Petitioner terminated the employment of respondent on ground of loss of
trust and confidence. Thus, respondent filed a complaint for illegal dismissal with prayer for damages and attorneys fees.

Respondents version: alleged that Bondoc and Zozobrado had asked her to tender her resignation as she was not the person whom
SAS was looking for to handle the position of Sales Manager 9 but that she refused, hence, she was terminated.

LA: ruled in favor of respondent; NLRC: reversed the ruling of the LA

CA: Set aside the decision of NLRC

ISSUE: WON, APC, as employer, has the management prerogative to replace a sales manager whom it has reasonable grounds to
believe cannot effectively discharge the duties demanded by such position.

HELD: NO.

Recent decisions of this Court distinguish the treatment of managerial employees from that of rank and file personnel insofar as the
application of the doctrine of loss of trust and confidence is concerned

MANAGERIAL EMPLOYEES; CONDITIONS THAT MUST BE MET BEFORE ONE MAY BE CONSIDERED A MANAGERIAL
EMPLOYEE. As enunciated in Samson v. NLRC, 330 SCRA 460, Before one may be properly considered a managerial employee,
all the following conditions must be met: (1) Their primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof; (2) They customarily and regularly direct the work of two or more employees therein;
(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and
firing and as to the promotion or any other change of status of other employees are given particular weight. (Section 2(b), Rule I, Book III
of the Omnibus Rules Implementing the Labor Code, italics supplied).

It is not disputed that her job description, and the terms and conditions of her employment, with the exception of her salary and allowances,
were never reduced to writing.

By respondents claim, her function, as verbally explained to her by Murray, dealt mainly with servicing of existing clientele. Bondoc,
however, described respondents functions and duties as critical

DISMISSAL; LOSS OF TRUST AND CONFIDENCE; MUST BE BASED ON A WILLFUL BREACH AND FOUNDED ON CLEARLY
ESTABLISHED FACTS; BREACH OF DUTIES; WHEN CONSIDERED WILLFUL; CASE AT BAR. Even assuming, however, that
respondent was a managerial employee, the stated ground (in the letter of termination) for her dismissal, loss of confidence, should
have a basis and determination thereof cannot be left entirely to the employer. Loss of trust and confidence to be a valid ground for an
employees dismissal must be based on a willful breach and founded on clearly established facts. A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly
or inadvertently. Respondents detailed REPORT dated September 8, 1993, relative to SAS profit and loss for 1993, which was closely
examined and analyzed by the LA contains an explanation of what brought about the decline in sales revenues. And it contains too a
number of recommended measures on improvement of sales for the remainder of 1993 and for 1994. As did the Labor Arbiter and the
Court of Appeals, this Court finds respondents explanation in her Report behind the decline in sales revenues as due to market forces
beyond respondents control plausible. In any event, there is no showing that the decline is reflective of any willful breach of duties by
respondent.
 Charlito Penaranda vs. Banganga Plywood Corporation and Chua

FACTS:

Charlito Penaranda was hired as an employee of Baganga Corporation with a monthly salary of P5,000 as Foreman/Boiler Head/ Shift
Engineer to take charge of the operations and maintenance of its steam plant boiler.

He alleges that he was illegally terminated and that his termination was without due process and valid grounds. Furthermore, he was not
paid his OT pay, premium pay for working during holidays, and night shift differentials. So he filed an action for illegal dismissal.

Hudson Chua, the General Manager of Baganga alleges that Penarandas separation was done pursuant to Art. 238 of the Labor
Code. The company was on temporary closure due to repair and general maintenance and it applied for clearance with the DOLE to
shut down and dismiss employees. He claims that due to the insistence of complainant, he was paid his separation benefits. But when
the company partially re-opened, Penaranda faild to re-apply.

Chua also alleges that since he is a managerial employee, he is not entitled to OT pay and if ever he rendered services beyond the
normal hours of work, there was no office order/authorization for him to do so.

The Labor Arbiter ruled that there was no illegal dismissal and that Penarandas complaint was premature because he was still employed
with Baganga. As regards the benefits, the Labor Arbiter found petitioner entitled to OT pay, premium pay for working on rest days and
attorneys fees.

On appeal, NLRC deleted the award of OT pay, premium pay and attorneys fees.

The CA dismissed Penarandas Petition for Certiorari based on procedural failures.

ISSUE: Whether or not Penaranda is a regular employee entitled to monetary benefits under Art. 82 of the Labor Code.

HELD: NO.

Penaranda is part of the managerial staff which takes him out of the coverage of labor standards. The Implementing Rules define members
of a managerial staff as those with the ff. responsibilities:

(1) The primary duty consists of the performance of work directly related to management policies of the employer;

(2) Customarily and regularly exercise discretion and independent judgment;

(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical
lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and

(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to
the performance of the work described in paragraphs (1), (2), and (3) above."

Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the machines and
the performance of the workers in the engineering section. This work necessarily required the use of discretion and independent judgment
to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the managerial staff.

Even Penaranda admitted that he was a supervisor. In his Position Paper, he stated that he was the foreman responsible for the operation
of the boiler. The term foreman implies that he was the representative of management over the workers and the operation of the
department. His classification as supervisor is further evident from the manner his salary was paid. He belonged to the 10% of
respondents 354 employees who were paid on a monthly basis; the others were paid only on a daily basis.

*No justification to award overtime pay and premium pay for rest days to Penaranda.
 Mercidar Fishing Corporation vs. NLRC & Fermin Agao, Jr.
G.R. No. 1112574
October 8, 1998

FACTS:

This case originated from a complaint filed on September 20, 1990 by private respondent FerminAgao, Jr. against petitioner for illegal
dismissal, violation of P.D. No. 851, and non-payment of five days service incentive leave for 1990. Private respondent had been
employed as a "bodegero" or ship's quartermaster on February 12, 1988. He complained that he had been constructively dismissed by
petitioner when the latter refused him assignments aboard its boats after he had reported to work on May 28, 1990.

Private respondent alleged that he had been sick and thus allowed to go on leave without pay for one month from April 28, 1990 but that
when he reported to work at the end of such period with a health clearance, he was told to come back another time as he could not be
reinstated immediately. Thereafter, petitioner refused to give him work. For this reason, private respondent asked for a certificate of
employment from petitioner on September 6, 1990. However, when he came back for the certificate on September 10, petitioner refused
to issue the certificate unless he submitted his resignation. Since private respondent refused to submit such letter unless he was given
separation pay, petitioner prevented him from entering the premises. Petitioner, on the other hand, alleged that it was private respondent
who actually abandoned his work.

ISSUE: Whether or not the fishing crew members are considered field personnel as classified in Art. 82 of the Labor Code.

HELD:

Art. 82 of the Labor Code provides: The provisions of this title [Working Conditions and Rest Periods] shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government employees, field personnel, members of the family of
the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are
paid by results as determined by the Secretary of Labor in appropriate regulations.

"Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business
or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. In contrast,
in the case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner have no choice but to remain on
board its vessel. Although they perform non-agricultural work away from petitioner's business offices, the fact remains that throughout
the duration of their work they are under the effective control and supervision of petitioner through the vessel's patron or master.
 Auto Bus Transport vs Bautista
G.R. No. 156367. May 16, 2005

FACTS:

Bautista, a driver-conductor of the Autobus transport, was dismissed after his failure to pay an amount demanded by the company for
the repair of the bus damaged in an accident caused by him. He receives compensation by way of commission per travel. Bautista
complained for illegal dismissal with money claims for nonpayment of 13th month pay and service incentive leave pay against Autobus.

Auto Bus Defenses:

1. Bautistas employment was replete with offenses involving reckless imprudence, gross negligence, and dishonesty supported with
copies of letters, memos, irregularity reports, warrants of arrest;

2. In the exercise of management prerogative, Bautista was terminated only after providing for an opportunity to explain:

Labor Arbiter dismissed the complaint however awarded Bautista his 13th month pay and service incentive leave pay. Auto Bus appealed.
NLRC deleted the 13th month pay award based on the Rules and Regulations Implementing Presidential Decree No. 851, particularly
Sec. 3 which exempts employers of those who are paid on purely commission, boundary, or task basis. Records showed that Bautista,
in his position paper, admitted that he was paid on a commission basis. The award of service incentive leave pay was maintained. Thus,
Autobus sought a reconsideration which was denied by NLRC. CA affirmed the decision of the NLRC.

ISSUE: Whether or not respondent is entitled to service incentive leave pay.

HELD: Yes.

Under Article 95 of the Labor Code, every employee who has rendered at least one year or service shall be entitled to a yearly service
incentive leave of five days with pay. In Section 1, Rule V, Book III of the Implementing Rules and Regulations of the Labor Code, the
rule shall apply to all, except (d) Field personnel and other employees whose performance is unsupervised by the employer including
those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof.

Petitioners contention that Bautista is not entitled to service incentive leave because he is paid on a purely commission basis must fail.
The phrase following Field personnel should not be construed as a separate classification of employees but is merely an amplification
of the definition of field personnel defined under the Labor Code.

Bautista neither falls under the category field personnel. As defined, field personnel are those whose performance of service is
unsupervised by the employer, the workplace being away from the principal place of business and whose hours and days of work cannot
be determined with reasonable certainty. Bus companies have ways of determining the hours worked by their drivers and conductors with
reasonable certainty. The courts have taken judicial notice of the following:

1. Along the routes traveled, there are inspectors assigned at strategic places who board the bus to inspect the passengers, the
punched tickets, and the conductors reports;
2. There is a mandatory once-a week car barn or shop day, where the bus is regularly checked;
3. The drivers and conductors must be at specified place and time, as they observe prompt departure and arrival;
4. At every depot, there is always a dispatcher whose function is to see to it that the bus and crew leaves and arrives at the
estimated proper time.
By these reasons, drivers and conductors are therefore under constant supervision while in the performance of their work.