PART I directors and through its officers and agents when
BASIC CONCEPTS authorized by a board resolution or its by-laws.
Page 1 cases (Salenga v. CA Lirio v. Genovia)
1. ANTONIO P. SALENGA and NATIONAL LABOR
RELATIONS COMMISSION vs COURT OF APPEALS
and CLARK DEVELOPMENT CORPORATION G.R. No.
174941, February 1, 2012
TOPIC: APPLICATION OF THE LABOR CODE
FACTS:
President/Chief Executive Officer (CEO) Rufo Colayco issued
an Order informing Salenga that, pursuant to the decision of
the board of directors of respondent CDC, the position of
head executive assistant the position held by petitioner
was declared redundant. His employment was then
terminated. He then filed illegal dismissal case against CDC
and Colayco.
The Labor Arbiter ruled in favor of Salenga. When the
Decision was rendered, CDC was already under the leadership
of Sergio T. Naguiat. He instructed Atty. Monina C. Pineda,
manager of the Corporate and Legal Services Department
and concurrent corporate board secretary, not to appeal the
Decision and to so inform the OGCC.
However, two separate appeals were filed before LA
Darlucio. One from the OGCC on behalf of respondent CDC
and Rufo Colayco and the second from Rufo Colayco.
Petitioner opposed the two appeals on the grounds that both
appellants had failed to observe Rule VI, Sections 4 to 6 of
the NLRC Rules of Procedure; and that appellants had not
been authorized by respondents board of directors to
represent the corporation and, thus, they were not the
employer whom the Rules referred to.
ISSUE:
Whether or not NLRC can entertain an appeal absent a board
resolution allowing it.
HELD:
No.
When a decision was rendered by the labor arbiter against
CDC, there was already a change in management and the new
president gave instructions to desist from appealing the
adverse decision.
The former president of CDC, however, still raised the finding
of illegal dismissal before the NLRC, with the appeal being
verified and certified by the executive vice president of CDC
without being armed with a board resolution from the
company.
The Supreme Court held that, in the absence of a board
resolution, the NLRC did not acquire any jurisdiction over the
appeal of CDC. The action of the vice president could not bind
the company because a corporation can only exercise its
powers and transact its business through its board of
Since there was no valid appeal, the finding of illegal
dismissal made by the labor arbiter stands.
2. LVN PICTURES INC. VS. PHILIPPINE MUSICIANS
GUILD
Facts:
Petitioners LVN Pictures and Sampaguita Pictures are
corporations engaged in the making of motion pictures and
in processing and distribution thereof. Respondent Philippine
Musicians Guild (Guild) is a duly registered legitimate labor
organization.
The Guild averred that petitioners employ musicians for the
purpose of making music recordings; that 95% of the
musicians of said companies are members of the Guild. The
Guild prayed that it be certified as the sole and exclusive
bargaining agency for all musicians working in the said
companies. The petitioners denied that the musicians were
their employees; they alleged that the musical numbers in the
filing of the companies were furnished by independent
contractors.
The lower court sustained the theory of the Guild. Petitioners
filed for review for certiorari.
ISSUES:
WON the musicians in questions are employees of the film
companies. YES
HELD:
The SC agrees with the findings of the lower court.
As a normal and usual course of procedure employed by the
companies when a pictures is to be made, the producer
chooses from the musical directors, one who will furnish the
musical background for a film. The price is agreed upon
verbally between the producer and musical director. When
the music is ready for recording, the musicians are
summoned through call slips in the name of the film
company; they will be picked up by the truck of the film
company.
During the recording sessions, the motion pictures director,
who is an employee of the company, supervises the
recording of the musicians and tells what to do in every
detail. He solely directs the performance of the musicians
before the camera as director, he supervises the perfimance
of all the action, including the musicians who appear in the
scenes. During the actual shooting of the scene, the
technicians, soundmen and other employees of the company
assist in the operation. Hence, the work of the musicians is an
integral part of the entire motion picture.
We are to apply RA No. 875 An Act to promote industrial
peace and for other purposes. The purpose of the policy is to:
a. eliminate the cause of industrial unrest by protecting the
exercise of their right to self-organization for the purpose of
collective bargaining.
b. promote sound stable industrial peace and the
advancement of the general welfare and the best interest of
employers and employees by the settlement of issues
respecting terms and conditions of employment through the
process of collective bargaining between employers and
representatives of their employees.
To determine whether a person is an employee or an
independent contractor, the National Labor Relations relies
on the right to control test. Under this test, an employer-
employee relationship exist where the person for whom the
services are performed reserves the right to control not only
the end to be achieved but also the manner and means to be
used in reaching the end.
The right of control of the film company over the musicians is
shown:
1. by calling the musicians through call slips in the name of
the company;
2. by arranging the schedules in its studio for recording
session;
3. by furnishing transportation and meals to musicians; and
4. by supervising and directing in detail, through the motion
picture director, the performance of the musicians before the
camera, in order to suit the music they are playing to the
picture which is being flashed on the screen.
Therefore, the members of the Guild are employees of the
film companies and are entitled to right of collective
bargaining under RA No. 875.
3. LEGEND HOTEL MANILA VS. HERNANI S. REALUYO
ALSO KNOWN AS JOEY ROA
FACTS:
Joey Roa files a case of illegal dismissal against the petitioner.
He averred that he worked as a pianist of the latter at the
rate of 400/night and eventually increased to 750/night given
to him after each performance. During his employment he
cannot choose the time of his performance which is fixed 7-
10pm that is 3 to 6 times in a week. He was also required to
conform to the venues motif and he had been subjected to
the rules on employees, privileges granted to other
employees. Until on July 9, 1999 he was notified by the
management that by reason of cost cutting measure his
services would no longer be required effective July 30, 1999.
Thus, the filing of this complaint.
Petitioner denied the existence of an employer-employee
relationship with respondent, insisting that he had been only
a talent engaged to provide live music for three hours on
days each week and that the economic crisis that had hit the
country constrained the management to dispense with his
services.
ISSUE:
w/n there is er-ee relationship between the parties. Thus, Roa
was illegally dismissed.
HELD:
YES. Employer-employee relationship existed between the
parties.
Roa was undeniably employed as a pianist of the restaurant.
The hotel wielded the power of selection at the time it
entered into the service contract dated Sept. 1, 1992 with
Roa. The hotel could not seek refuge behind the service
contract entered into with Roa. It is the law that defines and
governs an employment relationship, whose terms are not
restricted to those fixed in the written contract, for other
factors, like the nature of the work the employee has been
called upon to perform, are also considered.
The law affords protection to an employee, and does not
countenance any attempt to subvert its spirit and intent. Any
stipulation in writing can be ignored when the employer
utilizes the stipulation to deprive the employee of his security
of tenure. The inequality that characterizes employer-
employee relationship generally tips the scales in favor of the
employer, such that the employee is often scarcely provided
real and better options.
The argument that Roa was receiving talent fee and not
salary is baseless. There is no denying that the remuneration
denominated as talent fees was fixed on the basis of his
talent, skill, and the quality of music he played during the
hours of his performance. Roas remuneration, albeit
denominated as talent fees, was still considered as included
in the term wage in the sense and context of the Labor Code,
regardless of how petitioner chose to designate the
remuneration, as per Article 97(f) of the Labor Code.
The power of the employer to control the work of the
employee is considered the most significant determinant of
the existence of an employer-employee relationship. This is
the so-called control test and is premised on whether the
person for whom the services are performed reserves the
right to control both the end achieved and the manner and
means used to achieve that end.
4. DY KEH BENG V. INTERNATIONAL LABOR (MAY 25,
1979)
FACTS:
-A charge of unfair labor practice was filed against
DyKehBeng, proprietor of a basket factory, for discriminatory
acts within the meaning of Section 4(a), sub-paragraph (1)
and (4). Republic Act No. 875, by dismissing on September 28
and 29, 1960, respectively, Carlos N. Solano and Ricardo Tudla
for their union activities.
- DyKehBeng contended that he did not know Tudla
and that Solano was not his employee because the latter
came to the establishment only when there was work which
he did on pakiaw basis, each piece of work being done under
a separate contract.
- An employee-employer relationship was found to
have existed between DyKehBeng and complainants Tudla
and Solano, although Solano was admitted to have worked
on piece basis.
-
According to DyKehBeng, however, Solano was
not his employee for the following reasons:
(1) Solano never stayed long enought at
Dy's establishment;
(2) Solano had to leave as soon as he was
through with the
(3) order given him by Dy;
(4) When there were no orders needing
his services there was nothing for him to
do;
 (5) When orders came to the shop that his
regular workers could not fill it was then
that Dy went to his address in Caloocan
and fetched him for these orders; and
(6) Solano's work with Dy's establishment
was not continuous. ,
- Petitioner really anchors his contention of the non-
existence of employee-employer relationship on the control
test. He points to the case of Madrigal Shipping Co., Inc. v.
Nieves Baens del Rosario, et al., L-13130, October 31, 1959,
where the Court ruled that:
The test ... of the existence of employee
and employer relationship is whether
there is an understanding between the
parties that one is to render personal
services to or for the benefit of the other
and recognition by them of the right of
one to order and control the other in the
performance of the work and to direct the
manner and method of its performance.
Petitioner contends that the private respondents "did not
meet the control test in the fight of the ... definition of the
terms employer and employee, because there was no
evidence to show that petitioner had the right to direct the
manner and method of respondent's work. 10 Moreover, it is
argued that petitioner's evidence showed that "Solano
worked on a pakiaw basis" and that he stayed in the
establishment only when there was work.
ISSUE: WON there existed an employee employer relation
between petitioner DyKehBeng and the respondents Solano
and Tudla?
RULING: Yes.
Considering the finding by the Hearing Examiner that the
establishment of DyKehBeng is "engaged in the manufacture
of baskets known as kaing, 13 it is natural to expect that those
working under Dy would have to observe, among others, Dy's
requirements of size and quality of the kaing. Some control
would necessarily be exercised by Dy as the making of
the kaing would be subject to Dy's specifications.
Parenthetically, since the work on the baskets is done at Dy's
establishments, it can be inferred that the proprietor Dy
could easily exercise control on the men he employed.
As to the contention that Solano was not an employee
because he worked on piece basis, this Court agrees with the
Hearing Examiner that
circumstances must be construed to
determine indeed if payment by the piece
is just a method of compensation and
does not define the essence of the
relation. Units of time ... and units of work
are in establishments like respondent (sic)
just yardsticks whereby to determine rate
of compensation, to be applied whenever
agreed upon. We cannot construe
payment by the piece where work is done
in such an establishment so as to put the
worker completely at liberty to turn him
out and take in another at pleasure.
in "Sunrise Coconut Products Co. v. Court of Industrial
Relations" (83 Phil..518, 523), opined that
judicial notice of the fact that the so-called
"pakyaw" system mentioned in this case
as generally practiced in our country, is, in
fact, a labor contract -between employers
and employees, between capitalists and
laborers.
5. RJL MARTINEZ FISHING CORPORATION and/or
PENINSULA FISHING CORPORATION,-versus-
NLRC and BOTICARIO, et al.
FACTS
1. Petitioners RJL and Peninsula are principally engaged in the
deep-sea fishing business. Private respondents Boticario, et al
were employed by them as stevedores.
2. Boticario, and thirty (30) others, upon the premise that
they are petitioners' regular employees filed a complaint
against the latter for non-payment of overtime pay, premium
pay, legal holiday pay, emergency allowance, service
incentive leave pay and night shift differential.
3. Claiming that they were dismissed from employment as a
retaliatory measure for their having filed the said complaint,
private respondents filed another complaint against
petitioners for Illegal Dismissal and for Violation of Article 118
of the Labor Code.
4. In disputing any employer-employee relationship between
them, petitioners contend that private respondents are
contract laborers whose work terminated upon completion
of each unloading, and that in the absence of any boat
arrivals, private respondents did not work for petitioners but
were free to work or seek employment with other fishing
boat operators.
5. The NLRC ruled that there was an employment relations
between the parties.
ISSUE
Whether or not there is an employer-employee relationship
between theparties, hence, entitling private respondents to
legal holiday pay, emergency living allowance, thirteenth
month pay and incentive leave pay.
RULING
YES. The issue of the existence of an employer-employee
relationship between the parties is actually a question of fact,
and the finding of the NLRC on this point is binding upon us.
Besides, the continuity of employment is not the determining
factor, but rather whether the work of the labourer is part of
the regular business or occupation of the employer.
The employment contract signed by Antonio Boticario, which
described him as "labor contractor", is not controlling in as
much as they were continually and uniformly paid their
wages. He was merely asked by the petitioners to recruit
other workers. Besides, labor-contracting is prohibited under
Sec.9 (b), Rule VIII, Book III Rules and Regulations
Implementing the Labor Code as amended.
The activities performed by herein respondents, i.e.
unloading the catch of tuna fish from petitioner's vessel and
then loading the same to refrigerated vans, are necessary or
desirable in the business of the latter. Moreover, considering
the length of time that private respondents have worked for
petitionersince 1978there is justification to conclude that
they were engaged to perform activities usually necessary or
desirable in the usual business or trade of petitioners and are,
therefore, regular employees. As such, they are entitled to
the benefits awarded them by respondent NLRC.
6. PHILIPPINE SOCIETY FOR THE PREVENTION OF
CRUELTY TO ANIMALS VS. COA
FACTS:
Petitioner was incorporated as a juridical entity by virtue of
Act No. 1285 enacted on January 19, 1905. The object of
petitioner as stated in its charter is to enforce laws relating to
cruelty inflicted to animals or the protection of animals in the
Philippine islands. Act No. 1285 antedated the Corporation
Law and Security and Exchange Commission.
The petitioner was initially imbued with power to apprehend
violators of animal welfare laws and to have share of the
fines imposed and collected. However these powers were
recalled by virtue of CA No. 148. Pres. Manuel Quezon issued
EO No. 63 in 1936 which provides depriving the agents of
the Society their power to arrest persons who have violated
the laws prohibiting cruelty to animals thereby correcting a
serious defect in one of the laws existing in our statute
books.
On Dec.1, 2003, an audit team from COA conducted an audit
survey in the office of the petitioner. Petitioner demurred on
the ground that it was a private entity not under the
jurisdiction of COA. COA on the other hand averred that
petitioner is a government entity since it is a body politic
created by virtue of a special legislation and endowed with a
government purpose.
ISSUE:
Whether petitioner qualifies as a government agency that
may be subject to audit by COA? NO
HELD:
First, charter test cannot be applied in this case. Charter
test is the test to determine whether a corporation is
government owned or controlled or private in nature. Those
with special charters are government corporations subject to
its provisions and its employees are under the jurisdiction of
the CSC and compulsory members of GSIS. Since charter
test; had been introduced by 1935 Constitution and not
earlier, it follows that it cannot apply to the petitioner which
was created in 1905.
Second, a reading of petitioners charter shows that it is not
subject to control and supervision by any agency of the State,
unlike GOCCs. No government representative sits on the
board of trustees of the petitioner, the successors of its
members are determined voluntarily and solely by the
petitioner in accordance with its bylaws and may exercise
those powers generally accorded to private corporations.
Third, the employees of the petitioner are registered and
covered by SSS, not through GSIS. SSS Act defines the
employer as any person, natural or juridical, domestic or
foreign who carries on in the Philippines any trade, business,
industry, undertaking or activity of any kind and uses the
services of another person who is under his orders as regards
the employment, except the Government and any of its
political subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government.
Fourth, that a certain juridical entity is impressed with public
interest does not by that circumstance alone make the entity
a public corporation. This class of corporations may be
considered quasi-public corporations. The fact is that, almost
all corporations are nowadays created to promote the
interest, good, or convenience of the public.
Fifth, by virtue of the fiction that all corporations owe their
very existence and powers to the State, the reportorial
requirement is applicable to all corporations of whatever
nature, whether they are public, quasi-public, or private
corporationsas creatures of the State, there is a reserved
right in the legislature to investigate the activities of a
corporation to determine whether it acted within its powers.
7. FEATI UNIVERSITY VS BAUTISTA
FACTS:
President of the Feati University Faculty Club
(Faculty Club) wrote a letter to the Feati University
(University) informing the latter of the organization of the
Faculty Club into a registered labor union. The Faculty Club is
composed of members who are professors and/or instructors
of the University. The Faculty Club sent another letter
containing twenty-six demands that have connection with
the employment of the members of the Faculty Club by the
University. The President of the University answered the two
letters, requesting that she be given at least thirty days to
study thoroughly the different phases of the demands. The
President of the Faculty Club again wrote the President of the
University rejecting the latter's request for extension of time,
and filed a notice of strike with the Bureau of Labor alleging
as reason therefor the refusal of the University to bargain
collectively.
The parties were called to conferences at the
Conciliation Division of the Bureau of Labor but efforts to
conciliate them failed. On February 18, 1963, the members of
the Faculty Club declared a strike and established picket lines
in the premises of the University, resulting in the disruption
of classes in the University.
On March 21, 1963, the President of the Philippines
certified to the Court of Industrial Relations the dispute
between the management of the University and the Faculty
Club pursuant to the provisions of Section 10 of Republic Act
No. 875.
Various cases were filed with the Court of Industrial
Relations which the University raised these issues: 1) That the
University is an educational institution and not an industrial
establishment and hence not an employer in contemplation
of Republic Act No. 875; and 2) Republic Act No. 875 is also no
applicable to the members of the Faculty Club because the
latter are independent contractors and not employees,hence,
no employer-employee existed between the parties.
ISSUES:
1) WON Feati University is an employer;
2) WON members of the Faculty Club is an
employee;
RULING:
1) Yes.
Sec. 2.(Republic Act No. 875) Definitions.As used
in this Act
(c) The term employer include any person acting in
the interest of an employer, directly or indirectly,
but shall not include any labor organization
(otherwise than when acting as an employer) or any
one acting in the capacity or agent of such labor
organization.
The University engaged the services of the
professors, provided them work, and paid them
compensation or salary for their services. Even if
the University may be considered as a lessee of
services under a contract between it and the
members of its Faculty, still it is included in the term
"employer". "Running through the word `employ' is
the thought that there has been an agreement on
the part of one person to perform a certain service
in return for compensation to be paid by an
employer.
Sec. 2 (c) of Republic Act No. 875 does not
state that the employers included in the definition
of the term "employer" are only and exclusively
"industrial establishments"; on the contrary, as
stated above, the term "employer" encompasses all
employers except those specifically excluded by the
Act.
2) Yes.
Section 2 (d) of Republic Act No. 875 provides:
(d) The term "employee" shall include any
employee and shall not be limited to the
employee of a particular employer unless the
act explicitly states otherwise and shall include
any individual whose work has ceased as a
consequence of, or in connection with, any
current labor dispute or because of any unfair
labor practice and who has not obtained any
other substantially equivalent and regular
employment.
The Court takes judicial notice that a university
controls the work of the members of its faculty;
that a university prescribes the courses or subjects
that professors teach, and when and where to
teach; that the professors' work is characterized by
regularity and continuity for a fixed duration; that
professors are compensated for their services by
wages and salaries, rather than by profits; that the
professors and/or instructors cannot substitute
others to do their work without the consent of the
university; and that the professors can be laid off if
their work is found not satisfactory. All these
indicate that the university has control over their
work; and professors are, therefore, employees and
not independent contractors.
The principal consideration in determining
whether a workman is an employee or an
independent contractor is the right to control the
manner of doing the work, and it is not the actual
exercise of the right by interfering with the work,
but the right to control, which constitutes the test.
8. ASSOCIATED LABOR UNION, petitioner,
vs.
JUDGE JOSE C. BORROMEO and ANTONIO LUA
doing business under the name CEBU HOME &
INDUSTRIAL SUPPLY
FACTS:
ALU is a duly registered organization, among the members
thereof are employees of superior gas and equipment
company.
ALU AND SUGECO entered into a collective bargaining.
However, 12 of SUGECO members resigned from ALU. ALU
requested to SUGECO to not allow the said employees to
report to work. SUGECO rejected the request.
ALU wrote to SUGECO of bargaining in bad faith.
ALU struck and picketed in the SUGECO plant in Mandaue.
Hence, prompting SUGECO form filing a case against ALU
with CFI of Cebu to restrain the same from picketing in the
said plant and office elsewhere in the Philippines.
CFI issued a preliminary injunction prayed by SUGECO.
ALU filed unfair labor practice against SUGECO with CIR, ALU
file a motion for reconsideration of the issuance of injunction.
CFI denied the motion.
ALU filed a petition for certiorari and prohibitaion, prayed
that CFI of Cebu has no jurisdiction over the case. SC annulled
the injunction issued by CFI Cebu and directed to dismiss the
case.
The writ of injunction sought by ALU was granted May 16, 1966.
ALUresumed picketing and began to picket at the house of
SUGECO's General Manager Mr. & Mrs. Lua andCebu Home
store.
Mr. Lua filed a complaint with CFI Cebu to restrain ALU from picketing the
store and residence and recover damages. Judge Borromeo issued an order
requiring ALU to show cause orderwhy the writ should not be issued.
ALU filed a motion to dismiss assailed the jurisdiction of CFI Cebu tohear
the case on the ground that it has grown out from a labor
dispute. The judge denied the motion todismiss

respondents argue that the issue in the lower court does not
fall within the jurisdiction of the CIR, there being no
employer-employee relationship and "no labor dispute"
between the ALU members and Cebu Home; and that, at any
rate, the SUGECO products distributed and sold by Cebu
Home, came, not from the SUGECO plant in Mandaue, but
from other parts of the Philippines. Respondents further
deny that the residence of Mr. Lua was being used as a place
to store and refill SUGECO gas for resale.
ISSUE:
Who has jurisdiction over the case? CIR
RULING:
Section 5 (a) of Republic Act No. 8758 vests in the Court of
Industrial Relations exclusive jurisdiction over the prevention
of any unfair labor practice. Moreover, for an issue
"concerning terms, tenure or conditions of employment, or
concerning the association or representation of persons in
negotiating, fixing, maintaining, changing, or seeking to
arrange terms or conditions of employment" to partake of
the nature of a "labor dispute", it is not necessary that "the
disputants stand in the proximate relation of employer and
employee."
in order to apply the provisions of Sec. 9 of Republic Act No.
875, governing the conditions under which "any restraining
order" or "temporary or permanent injunction" may issue in
any "case involving or growing out of a labor dispute", it is
not indispensable that the persons involved in the case be
"employees of the same employer", although this is the usual
case. Sec. 9,10 likewise, governs cases involving persons: 1)
"who are engaged in the same industry, trade, craft, or
occupation"; or 2) "who ... have direct or indirect interests
therein", or 3) "who are members of the same or an affiliated
organization of employers or employees"; or 4) "when the
case involves any conflicting or competing interests in a
"labor dispute" (as hereinbefore defined) or "persons
participating or interested" therein (as hereinafter defined)".
Furthermore, "a person or association shall be held to be a
person participating or interested in a labor dispute if relief is
sought against him or it" and "he or it is engaged in the same
industry, trade, craft, or occupation in which such dispute
occurs, or has a direct or indirect interest therein, or is a
member, officer, or agent of any association composed in
whole or in part of employees or employers engaged in such
industry, trade, craft, or occupation."
Now, then, there is no dispute regarding the existence of a
labor dispute between the ALU and SUGECO-Cebu; that
SUGECO's general manager, Mrs. Lua, is the wife of the
owner and manager of Cebu Home, Antonio Lua; and that
Cebu Home is engaged in the marketing of SUGECO products.
It is, likewise, clear that as managing member of the conjugal
partnership between him and his wife, Mr. Lua has an interest
in the management by Mrs. Lua of the business of SUGECO
and in the success or failure of her controversy with the ALU,
considering that the result thereof may affect the condition
of said conjugal partnership. Similarly, as a distributor of
SUGECO products, the Cebu Home has, at least, an indirect
interest in the labor dispute between SUGECO and the ALU and
in Case No. R-9221. In other words, respondents herein have
an indirect interest in said labor dispute.
Besides, the ALU introduced evidence to the effect that the
SUGECO products had been brought to Cebu Home and were
being distributed in the latter, as a means to circumvent,
defeat or minimize the adverse effects of the picketing
conducted in the SUGECO plant and offices in Mandaue and
Cebu City respectively by ALU.
Respondent Judge seemed to be of the opinion that, for the
subject-matter of Case No. 9414 to be within the exclusive
jurisdiction of the CIR, it was necessary to establish, as a fact,
the truth of ALU's contention that respondents' premises
were being used as an outlet for SUGECO products.
Such view suffers from a basic flaw. It overlooks the fact that
the jurisdiction of a court or quasi-judicial or administrative
organ is determined by the issues raised by the parties, not by
their success or failure in proving the allegations in their
respective pleadings.21 Said view would require the reception
of proof, as a condition precedent to the assumption of
jurisdiction, when precisely jurisdiction must
exist before evidence can be taken, since the authority to
receive it is in itself an exercise of jurisdiction. Moreover, it
fails to consider that, to affect the jurisdiction of said court,
or organ, the main requirement is that the issue raised be a
genuine one. In other words, the question posed must be
one that is material to the right of action or which could
affect the result of the dispute or controversy.22 Such is,
manifestly, the nature of ALU's contention in the lower court,
which should have, accordingly, granted the motion to
dismiss and lifted the writs of preliminary injunction
complained of.
9. REYNALDO BAUTISTA, petitioner, vs. HON. AMADO
C. INCIONG, in his capacity as Deputy Minister of
Labor and ASSOCIATED LABOR UNIONS
(ALU), respondents. G.R. No. L-52824;
March 16, 1988
FACTS:
This is an illegal dismissal case. The respondent Deputy
Minister dismissed the complaint of herein petitioner
principally on the ground that no employer-employee
relationship existed between the petitioner and respondent
Associated Labor Unions (ALU).
Petitioner was employed by Associated Labor Unions(ALU)
as organizer. Bautista went on leave and when he went back
to work, he was informed that he was already terminated.
The Director ruled in favor of Bautista.
The Deputy Minister of Labor, however, set aside the order of
the Director finding that his membership coverage with the
SSS which shows that respondent ALU is the one paying the
employers share in the premiums is not conclusive proof that
respondent is the petitioners employer because such
payments were performed by the respondent as a favor for
all those who were performing full time union activities with
it to entitle them to SSS benefits.y
He then ruled that there was no employer-employee
relationship between ALU and Bautista by the fact that ALU
is not an entity for profit but a duly registered labor union
whose sole purpose is the representation of its bonafide
organization units.
ISSUE:
Whether or not there can be employer-employee relationship
between a labor union and its member.
HELD:
Yes, the mere fact that the respondent is a labor union does
not mean that it cannot be considered an employer of the
persons who work for it.
Moreover, the four elements in determining the existence of
an employer-employee relationship was present in the case
at bar. The Regional Director correctly found that the
petitioner was an employee of the respondent union as
reflected in the latters individual payroll sheets and shown
by the petitioners membership with the Social Security
System (SSS) and the respondent unions share of
remittances in the petitioners favor. Bautista was selected
and hired by the union. ALU had the power to dismiss him as
indeed it dismissed him. And definitely, the Union tightly
controlled the work of Bautista as one of its organizers.
10. OSIAS CORPORAL ET.AL. VS. NLRC
FACTS:
Petitioners were workers of the New Look Barber Shop
owned by respondent Lao Enteng Co. Inc., some were
barbers, and others were manicurists, watcher and marketer.
When Mr. Vicente Lao died in 1982, his children organized a
corporation registered as Lao Enteng Co. Inc. On 1995, the
President of the corporation Trinidad Ong informed the
petitioners that their services were no longer needed; that
their building had been sold.
Petitioners filed an illegal dismissal case with the NLRC.
Private respondent (PR) averred that petitioners were joint
venture partners receiving 50% commission of the amount
charged to customers. Thus, no employer-employee
relationship between them.
Labor Arbiter ruled that petitioners were joint venture
partners of PR. NLRC affirmed the findings of the Labor
Arbiter; that petitioners failed to show existence of ER-EE
relationship under the 4 way test; that it is a common
practice in barber shop industry that barbers supply their
own scissors and razors and they split their earnings with the
owner of the shop; that the only capital of the owner is the
place of work whereas the barbers provide the skill and
expertise in servicing customers; that the only control
exercised by the owner of the shop is to ascertain the
number of customers serviced by the barber in order to
determine the sharing of profits.
ISSUE:
WON petitioners were employees of private respondent. YES
HELD:
The Labor Arbiters findings that the parties were engaged in
a joint venture is unsupported by any documentary evidence.
The sharing of proceeds for every job of petitioners in the
barber shop does not mean they were not employees of the
respondent company.
Petitioners are not independent contractors. Independent
Contractor is one who undertakes a job contracting; a
person who:
a. carries on an independent business and undertakes the
contract work on his own account under his own
responsibility according to his own manner and method, free
from the control and direction of his employer or principal in
all matters connected with the performance of the work
except as to the results thereof; and
b. has substantial capital or investment in the form of tools,
equipment, machineries, work premises, and other materials
which are necessary in the conduct of the business.
Petitioners did not undertake the work in their own manner
and method, their service was engaged by the respondent
company to attend to the needs of its customers in its barber
shop. They did not have substantial capital or investment in
the form of tools, equipment, work premises and other
materials which are necessary in the conduct of the business
of the respondent company. They were not given work
assignments in any place other than at the work premises of
the New Look Barber Shop, and they were required to
observe the rules and regulations of respondent company.
The following elements must be present in an ER-EE
relations:
1. selection and engagement of the workers;
2. power of dismissal;
3. payment of wages by whatever means; and
4. power to control the workers conduct, with the latter
assuming primacy in the overall consideration.
The late Vicente Lao engaged the services of petitioners to
work in his shop. When his children organized a corporation,
it took over the assets, equipment, and properties of the
shop and continued the business, it retained the services of
petitioners and continuously paid their wages. Clearly all 3
elements exist. As to control test petitioners:
1. worked in the barber shop owned and operated by PR
2. they were required to report daily and observe definite
hours of work;
3. they were not free to accept other employment elsewhere
but devoted their full time working in the barber shop;
4. some have worked with PR as early as 1960;
5. petitioner Nas was instructed by PR to watch over the
other workers.
Petitioners were unarguably performing work necessary and
desirable in the business of the respondent company.
The PR, as employer, in the exercise of management
prerogative, may merge or consolidate its business with
another, or sell or dispose all or substantially all of its assets
and properties which may bring about the dismissal or
termination of its employees in the process. Petitioners are to
be accorded the benefits under the Labor Code.
11. C JO VS. NLRC, G.R. NO. 121605, FEBRUARY 2, 2000
FACTS:
Private respondent working as a barber on piece-rate basis
was designated by petitioners as caretaker of their
barbershop. Private respondents duties as caretaker, in
addition to his being a barber, were: 1) to report to the
owners of the barbershop whenever the aircondition units
malfunction and/or whenever water or electric power supply
was interrupted; 2) to call the laundry woman to wash dirty
linen; 3) to recommend applicants for interview and hiring; 4)
to attend to other needs of the shop. For this additional job,
he was given an honorarium equivalent to1/3 of the net
income of the shop.
Private respondent left his job voluntarily because of his
misunderstanding with his co-worker and demanded
separation pay and other monetary benefits. Petitioners
contends that respondent was not their employee but their
partner in trade whose compensation was based on a
sharing arrangement per haircut or shaving job done.
ISSUE:
Whether or not there exist an employer-employee
relationship.
HELD:
Yes.
In determining the existence of an employer-employee
relationship, the following elements are considered: 1)
selection and engagement of worker; 2) power of dismissal;
3) the payment of wages; and 4) the power to control the
workers conduct, with the latter assuming primacy in the
overall consideration. The power of control refers to the
existence of the power and not necessarily to the actual
exercise thereof. It is not essential for the employer to
actually supervise the performance of duties of the
employee; it is enough that the employer has the right to
wield that power.
Absent a clear showing that petitioners and private
respondent had intended to pursue a relationship of
industrial partnership, we entertain no doubt that private
respondent was employed by petitioners as caretaker-barber.
Initially, petitioners, as new owners of the barbershop, hired
private respondent as barber by absorbing the latter in their
employ. Undoubtedly, the services performed by private
respondent as barber is related to, and in the pursuit of the
principal business activity of petitioners. Later on, petitioners
tapped private respondent to serve concurrently as caretaker
of the shop. Certainly, petitioners had the power to dismiss
private respondent being the ones who engaged the services
of the latter. In fact, private respondent sued petitioners for
illegal dismissal, albeit contested by the latter.
12. BARNATE VS. PBA
FACTS:
Barnate and Guevarra aver that they were invited to join the
PBA as referees. They were made to sign contracts on a year
to year basis. However changes were made on the terms of
the employment and until they received a letter from the
Office of the commissioner advising their contracts would
not be renewed citing their unsatisfactory performance.
PBA avers that complainants entered into two contracts of
retainers with them. After the lapse of the period, they
decided not to renew their contracts. They contended that
they were not illegally dismissed since they were not
employees of them. Their retainer contracts were simply not
renewed and they had the prerogative of whether or not to
renew their contracts.
ISSUE:
w/n petitioner is an ee of respondents, hence was illegally
dismissed
HELD.
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 employer's power to control the employee on the
means and methods by which the work is accomplished.
The so-called"controltest"is the most important
indicator of the presence or absence of an employer-
employee relationship.
Referees exercise their own independent judgment,
based on the rules of the game, as to when and how a call or
decision is to be made. The referees decide whether an
infraction was committed, and the PBA cannot overrule them
once the decision is made on the playing court. The referees
are the only, absolute, and final authority on the playing
court. Respondents or any of the PBA officers cannot and do
not determine which calls to make or not to make and cannot
control the referee when he blows the whistle because such
authority exclusively belongs to the referees. The very nature
of petitioners job of officiating a professional basketball
game undoubtedly calls for freedom of control by
respondents.
Moreover, the following circumstances indicate
that petitioner is an independent contractor: (1) the referees
are required to report for work only when PBA games are
scheduled, which is three times a week spread over an
average of only 105 playing days a year, and they officiate
games at an average of two hours per game; and (2) the only
deductions from the fees received by the referees are
withholding taxes.
In other words, unlike regular employees who
ordinarily report for work eight hours per day for five days a
week, petitioner is required to report for work only when
PBA games are scheduled or three times a week at two hours
per game. In addition, there are no deductions for
contributions to the Social Security System, Philhealth or Pag-
Ibig, which are the usual deductions from employees
salaries. These undisputed circumstances buttress the fact
that petitioner is an independent contractor, and not an
employee of respondents.
Furthermore, the applicable foreign case law
declares that a referee is an independent contractor, whose
special skills and independent judgment are required
specifically for such position and cannot possibly be
controlled by the hiring party.
13. RAUL G. LOCSIN and EDDIE B.
TOMAQUIN, Petitioners,
vs.
 PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, Respondent.
FACTS:
-Philippine Long Distance Telephone Company (PLDT) and
the Security 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 various offices.
-Raul Locsin and Eddie Tomaquin, among other security
guards, were posted at a PLDT office. However, despite the
termination of the Agreement, however, petitioners
continued to secure the premises of their assigned office.
They were allegedly directed to remain at their post by
representatives of respondent
- Then, on September 30, 2002, petitioners services were
terminated. Thus, petitioners filed a complaint before the
Labor Arbiter for illegal dismissal and recovery of money
- The Labor Arbiter rendered a Decision finding PLDT liable for
illegal dismissal. It was explained in the Decision that
petitioners were found to be employees of PLDT and not of
SSCP
- The CA rendered the assailed decision granting PLDTs
petition and dismissing petitioners complaint. It determined
that SSCP was not a labor-only contractor and was an
independent contractor having substantial capital to operate
and conduct its own business.
ISSUE:
whether petitioners became employees of respondent after
the Agreement between SSCP and respondent was
terminated? Yes
RULING:
While respondent and SSCP no longer had any legal
relationship with the termination of the Agreement,
petitioners remained at their post securing the premises of
respondent while receiving their salaries, allegedly from
SSCP. Clearly, such a situation makes no sense, and the
denials proffered by respondent do not shed any light to the
situation. It is but reasonable to conclude that, with the
behest and, presumably, directive of respondent, petitioners
continued with their services. Evidently, such are indicia of
control that respondent exercised over petitioners.
Such power of control has been explained as the "right to
control not only the end to be achieved but also the means to
be used in reaching such end." With the conclusion that
respondent directed petitioners to remain at their posts and
continue with their duties, it is clear that respondent
exercised the power of control over them; thus, the
existence of an employer-employee relationship.
Jurisprudence is firmly settled that whenever the existence
of an employment relationship is in dispute, four elements
constitute the reliable yardstick: (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 employees conduct.
respondent having the power of control over petitioners
must be considered as petitioners employerfrom the
termination of the Agreement onwardsas this was the only
time that any evidence of control was exhibited by
respondent over petitioners and in light of our ruling in
Abella.
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.
Note: labor-only contracting was discussed in this case
There is "labor-only" contracting where the person supplying
workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries,
work premises, among others, and the workers recruited and
placed by such person are performing activities which are
directly related to the principal business of such employer. In
such cases, the person or intermediary shall be considered
merely as an agent of the employer who shall be responsible
to the workers in the same manner and extent as if the latter
were directly employed by him.
14. CESARC.LIRIO, doing business under the name and
style of CELKORADSONICMIX- versus -
WILMERD.GENOVIA
FACTS
1. Respondent Genovia filed a complaint against petitioner
Lirio and/or CelkorAdSonicmix for illegal dismissal, non-
payment of commission and award of moral and exemplary
damages.
2. Genovia alleged, among others, that he was hired as studio
manager by Lirio, owner Celk or; that all the employees of
petitioner, including him, rendered overtime work almost
everyday, but petitioner never kept a daily time record to
avoid paying them overtime pay; that sometime, petitioner
approached him and told him about his project to produce an
album for his daughter, a former talent of ABS-CBN, and that
he was not compensated for the same; that petitioner
verbally terminated his services, and he was instructed not to
report for work; that having worked for more than six
months, he was already a regular employee, athough he was
so called a "studio manager," because he had no managerial
powers, and was merely an ordinary employee.
3. Respondents evidence consisted of the Payroll, which was
certified correct by petitioner, and Petty Cash Vouchers
evidencing receipt of payroll payments by respondent from
Celkor.
4. Petitioner asserted that, no employer-employee
relationship existed between him and the respondent, and
there was no illegal dismissal to speak of; that his relationship
with respondent is one of an informal partnership under the
New Civil Code, since they agreed to contribute money,
property or industry to a common fund with the intention of
dividing the profits among themselves; that he had no
control over the time and manner by which respondent
composed or arranged the songs, except on the result
thereof; that espondent reported to the recording studio
between 10:00a.m.and12:00noon.
ISSUE
WON there existed an ER-EE relationship between the
parties.
RULING
Yes. As between the documentary evidence presented by
Genovia and the mere allegation of Lirio without any proof by
way of any document evincing their alleged partnership
agreement, the former must prevail. Lirio's so-called
existence of a partnership agreement was not substantiated
and his assertion thereto, in the face of complainant's
evidence, constitute but a self-serving assertion, without
probative value, a mere invention to justify the illegal
dismissal.
Before a case for illegal dismissal can prosper, it must first be
established that an employer-employee relationship existed
between petitioner and respondent. No particular form of
evidence is required to prove the existence of an employer-
employee relationship. Any competent and relevant evidence
to prove the relationship may be admitted.
It is a well-settled doctrine, that if doubts exist between the
evidence presented by the employer and the employee, the
scales of justice must be tilted in favour of the latter. It is a
time-honored rule that in controversies between a labourer
and his master, doubts reasonably arising from the evidence,
or in the interpretation of agreements and writing should be
resolved in the formers favor. The policy is to extend the
doctrine to a greater number of employees who can avail of
the benefits under the law, which is in consonance with the
avowed policy of the State to give maximum aid and
protection of labor. This rule should be applied in the case at
bar, especially since the evidence presented by the private
respondent company is not convincing.
15. JAVIER VS. FLY ACE
FACTS:
Javier filed a complaint before the NLRC for underpayment of
salaries and other labor standard benefits against Fly Ace. Fly
Ace is engaged in the service of delivering grocery items.
Javier alleged that he performed tasks at respondents
warehouse such as cleaning and arranging canned items
before their delivery; that he worked as pahinente; that on
May 6, 2008, he was no longer allowed to enter the
company. He discovered that Mr. Ong had been courting her
daughter, that her daughter convince Mr. Ong to spare her
father from trouble, but the Mr. Ong refused. To support his
allegations, Javier presented an affidavit of one Valenzuela
who alleged that Javier was a stevedore or pahinente of Fly
Ace.
Fly Ace averred that Javier was contracted by its employee
Mr. Ong as extra helper on a pakyaw basis at a rate of
300php per trip. Fly Ace denied that Javier was their
employee.
The Labor Arbiter dismissed the complaint for Javier failed to
present proof that he was a regular employee of Fly Ace.
NLRC favoured Javier, it ruled that Javier was a regular
employee because there was reasonable connection
between the particular activity performed by pahinante in
relation to the usual business or trade of the employee.
CA ruled that Javier was not an employee, he was not
required to observe definite hours of work; he was not
required to report daily; and he was free to accept other
work elsewhere as there was no exclusivity of his contracted
service to the company.
ISSUE:
WON Javier was an employee of Fly Ace. NO
HELD:
Javier failed to present substantial evidence to prove that he
is an employee of Fly Ace, had there been other proofs of
employment such as his inclusion in the payroll or a clear
exercise of control, the Court would have affirmed the
finding of ER-EE relationship. The onos probandi falls on
petitioner to substantiate his claim. All that Javier presented
were his self-serving statements purportedly showing his
activities as an employee of Fly Ace.
The lone affidavit executed by Valenzuela was unsuccessful in
strengthening Javiers cause, all Valenzuala attested to was
that he would frequently see Javier at the workplace where
the latter was also hires as stevedore.
The elements of ER-EE relationship:
1. selection and engagement of workers;
2. payment of wages;
3. power to dismiss; and
4. power to control
The elements were not present in this case, there is no proof
that Fly Ace engaged to service of Javier as a regular
employee, that he was paid wages as an employee or that Fly
Ace dictated what his conduct should be while at work.
Note: Payment by piece is just a method of compensation
and does not define the essence of relation; it does not
negate regular employment.
Article 97 LC defines wage as, remuneration or earnings,
capable of being expressed in terms of money whether fixed
or ascertained on a time, task, piece or commission basis.
16. VICENTE SY VS. CA
FACTS:
Jaime Sahot was employed as truck helper for petitioners
family trucking business and eventually became a truck
driver. He continually served for 36 years throughout the
changes of names of the business of the petitioners. Until,
April 1994, he had been incurring absences as he was suffered
from various ailments. Particularly causing him pain was his
left thigh, which greatly affected the performance of his task
as a driver. He filed a week long leave for medical
examination and treatment and at the end of it he applied for
extension for one month.However, the petitioner threaten
him to terminate his employment should he refuse to go back
to work. And eventually carried out their threat and
dismissed him from work. In view of that, Sahot filed before
the NLRC a complaint for illegal dismissal.
Petitioners contended that Sahot was not illegally dismissed
as driver because he was in fact petitioners industrial partner
and also claimedthat it was Sahot who refused to work, that
after the expiration of his leave he never reported back to
work nor did he file an extension of his leave.
ISSUE:
w/n an ee-er relationship existed between the petitioners and
respondent Sahot.
RULING:
Yes. Private respondent, for his part, denies that he was ever
an industrial partner of petitioners. There was no written
agreement, no proof that he received a share in petitioners
profits, nor was there anything to show he had any
participation with respect to the running of the business.18
The elements to determine the existence of an employment
relationship are: (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
employees conduct. The most important element is the
employers control of the employees conduct, not only as to
the result of the work to be done, but also as to the means
and methods to accomplish it.
Petitioners owned and operated a trucking business since the
1950s and by their own allegations, they determined private
respondents wages and rest day. Records of the case show
that private respondent actually engaged in work as an
employee. During the entire course of his employment he did
not have the freedom to determine where he would go, what
he would do, and how he would do it. He merely followed
instructions of petitioners and was content to do so, as long
as he was paid his wages. While it was very obvious that
complainant did not have any intention to report back to
work due to his illness which incapacitated him to perform his
job, such intention cannot be construed to be an
abandonment. Instead, the same should have been
considered as one of those falling under the just causes of
terminating an employment.
Article 284 of the Labor Code authorizes an employer to
terminate an employee on the ground of disease, :
Art. 284. Disease as a ground for termination- An employer
may terminate the services of an employee who has been
found to be suffering from any disease and whose continued
employment is prohibited by law or prejudicial to his health
as well as the health of his co-employees: xxx
However, in order to validly terminate employment on this
ground, Book VI, Rule I, Section 8 of the Omnibus
Implementing Rules of the Labor Code requires:
Sec. 8. Disease as a ground for dismissal- Where the
employee suffers from a disease and his continued
employment is prohibited by law or prejudicial to his health
or to the health of his co-employees, the employer shall not
terminate his employment unless there is a certification by
competent public health authority that the disease is of such
nature or at such a stage that it cannot be cured within a
period of six (6) months even with proper medical treatment.
If the disease or ailment can be cured within the period, the
employer shall not terminate the employee but shall ask the
employee to take a leave. The employer shall reinstate such
employee to his former position immediately upon the
restoration of his normal health.
In the case at bar, the employer clearly did not comply with
the medical certificate requirement before Sahots dismissal
was effected and also the procedural aspect of due process
was not complied with by the employer. Since the employer
is required to furnish an employee with two written notices
before the latter is dismissed: (1) the notice to apprise the
employee of the particular acts or omissions for which his
dismissal is sought, which is the equivalent of a charge; and
(2) the notice informing the employee of his dismissal, to be
issued after the employee has been given reasonable
opportunity to answer and to be heard on his defense.33
These, the petitioners failed to do, even only for record
purposes. What management did was to threaten the
employee with dismissal, then actually implement the threat
when the occasion presented itself because of private
respondents painful left thigh.
Both the substantive and procedural aspects of due process
were violated. Clearly, therefore, Sahots dismissal is tainted
with invalidity.
17. ENCYCLOPAEDIA BRITANNICA (PHILIPPINES),
INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON.
LABOR ARBITER TEODORICO L. ROGELIO and
BENJAMIN LIMJOCO, respondents.
FACTS:
Private respondent Benjamin Limjoco was a Sales Division
Manager of petitioner Encyclopaedia Britannica/
As compensation, private respondent received commissions
from the products sold by his agents. He was also allowed to
use petitioner's name, goodwill and logo. It was, however,
agreed upon that office expenses would be deducted from
private respondent's commissions.
private respondent Limjoco resigned from office to pursue
his private business. Then on October 30, 1975, he filed a
complaint against petitioner Encyclopaedia Britannica with
the Department of Labor and Employment, claiming for non-
payment of separation pay and other benefits, and also illegal
deduction from his sales commissions.
Petitioner Encyclopaedia Britannica alleged that complainant
Benjamin Limjoco (Limjoco, for brevity) was not its employee
but an independent dealer authorized to promote and sell its
products and in return, received commissions therefrom.
Limjoco did not have any salary and his income from the
petitioner company was dependent on the volume of sales
accomplished. He also had his own separate office, financed
the business expenses, and maintained his own workforce.
The salaries of his secretary, utility man, and sales
representatives were chargeable to his commissions. Thus,
petitioner argued that it had no control and supervision over
the complainant as to the manner and means he conducted
his business operations. The latter did not even report to the
office of the petitioner and did not observe fixed office
hours. Consequently, there was no employer-employee
relationship.
Limjoco maintained otherwise.
The Commission opined that there was no evidence
supporting the allegation that Limjoco was an independent
contractor or dealer. The petitioner still exercised control
over Limjoco through its memoranda and guidelines and
even prohibitions on the sale of products other than those
authorized by it. In short, the petitioner company dictated
how and where to sell its products.
ISSUE:
WON there is an employer-employee relationship between
petitioner and respondent? Yes
RULING:
In determining the existence of an employer-employee
relationship the following elements must be present: 1)
selection and engagement of the employee; 2) payment of
wages; 3) power of dismissal; and 4) the power to control the
employee's conduct. Of the above, control of employee's
conduct is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an
employer-employee relationship exists where the person for
whom the services are performed reserves the right to
control not only the end to be achieved, but also the manner
and means to used in reaching that end
The fact that petitioner issued memoranda to private
respondents and to other division sales managers did not
prove that petitioner had actual control over them. The
different memoranda were merely guidelines on company
policies which the sales managers follow and impose on their
respective agents.
Private respondent was not an employee of the petitioner
company. While it was true that the petitioner had fixed the
prices of the products for reason of uniformity and private
respondent could not alter them, the latter, nevertheless,
had free rein in the means and methods for conducting the
marketing operations. He selected his own personnel and the
only reason why he had to notify the petitioner about such
appointments was for purpose of deducting the employees'
salaries from his commissions. This he admitted in his
testimonies.
Private respondent was merely an agent or an independent
dealer of the petitioner. He was free to conduct his work and
he was free to engage in other means of livelihood. At the
time he was connected with the petitioner company, private
respondent was also a director and later the president of the
Farmers' Rural Bank. Had he been an employee of the
company, he could not be employed elsewhere and he would
be required to devote full time for petitioner.
There is nothing in the records to show or would "indicate
that complainant was under the control of the petitioner" in
respect of the means and methods 8 in the performance of
complainant's work.
18. LEGEND HOTEL MANILA VS. HERNANI S. REALUYO
ALSO KNOWN AS JOEY ROA
FACTS:
Joey Roa files a case of illegal dismissal against the petitioner.
He averred that he worked as a pianist of the latter at the
rate of 400/night and eventually increased to 750/night given
to him after each performance. During his employment he
cannot choose the time of his performance which is fixed 7-
10pm that is 3 to 6 times in a week. He was also required to
conform to the venues motif and he had been subjected to
the rules on employees, privileges granted to other
employees. Until on July 9, 1999 he was notified by the
management that by reason of cost cutting measure his
services would no longer be required effective July 30, 1999.
Thus, the filing of this complaint.
Petitioner denied the existence of an employer-employee
relationship with respondent, insisting that he had been only
a talent engaged to provide live music for three hours on
days each week and that the economic crisis that had hit the
country constrained the management to dispense with his
services.
ISSUE:
w/n there is er-ee relationship between the parties. Thus, Roa
was illegally dismissed.
HELD:
YES. Employer-employee relationship existed between the
parties.
Roa was undeniably employed as a pianist of the restaurant.
The hotel wielded the power of selection at the time it
entered into the service contract dated Sept. 1, 1992 with
Roa. The hotel could not seek refuge behind the service
contract entered into with Roa. It is the law that defines and
governs an employment relationship, whose terms are not
restricted to those fixed in the written contract, for other
factors, like the nature of the work the employee has been
called upon to perform, are also considered.
The law affords protection to an employee, and does not
countenance any attempt to subvert its spirit and intent. Any
stipulation in writing can be ignored when the employer
utilizes the stipulation to deprive the employee of his security
of tenure. The inequality that characterizes employer-
employee relationship generally tips the scales in favor of the
employer, such that the employee is often scarcely provided
real and better options.
The argument that Roa was receiving talent fee and not
salary is baseless. There is no denying that the remuneration
denominated as talent fees was fixed on the basis of his
talent, skill, and the quality of music he played during the
hours of his performance. Roas remuneration, albeit
denominated as talent fees, was still considered as included
in the term wage in the sense and context of the Labor Code,
regardless of how petitioner chose to designate the
remuneration, as per Article 97(f) of the Labor Code.
The power of the employer to control the work of the
employee is considered the most significant determinant of
the existence of an employer-employee relationship. This is
the so-called control test and is premised on whether the
person for whom the services are performed reserves the
right to control both the end achieved and the manner and
means used to achieve that end.

19. JAVIER VS. FLY ACE
FACTS:
Javier filed a complaint before the NLRC for underpayment of
salaries and other labor standard benefits against Fly Ace. Fly
Ace is engaged in the service of delivering grocery items.
Javier alleged that he performed tasks at respondents
warehouse such as cleaning and arranging canned items
before their delivery; that he worked as pahinente; that on
May 6, 2008, he was no longer allowed to enter the
company. He discovered that Mr. Ong had been courting her
daughter, that her daughter convince Mr. Ong to spare her
father from trouble, but the Mr. Ong refused. To support his
allegations, Javier presented an affidavit of one Valenzuela
who alleged that Javier was a stevedore or pahinente of Fly
Ace.
Fly Ace averred that Javier was contracted by its employee
Mr. Ong as extra helper on a pakyaw basis at a rate of
300php per trip. Fly Ace denied that Javier was their
employee.
The Labor Arbiter dismissed the complaint for Javier failed to
present proof that he was a regular employee of Fly Ace.
NLRC favoured Javier, it ruled that Javier was a regular
employee because there was reasonable connection
between the particular activity performed by pahinante in
relation to the usual business or trade of the employee.
CA ruled that Javier was not an employee, he was not
required to observe definite hours of work; he was not
required to report daily; and he was free to accept other
work elsewhere as there was no exclusivity of his contracted
service to the company.
ISSUE:
WON Javier was an employee of Fly Ace. NO
HELD:
Javier failed to present substantial evidence to prove that he
is an employee of Fly Ace, had there been other proofs of
employment such as his inclusion in the payroll or a clear
exercise of control, the Court would have affirmed the
finding of ER-EE relationship. The onos probandi falls on
petitioner to substantiate his claim. All that Javier presented
were his self-serving statements purportedly showing his
activities as an employee of Fly Ace.
The lone affidavit executed by Valenzuela was unsuccessful in
strengthening Javiers cause, all Valenzuala attested to was
that he would frequently see Javier at the workplace where
the latter was also hires as stevedore.
The elements of ER-EE relationship:
1. selection and engagement of workers;
2. payment of wages;
3. power to dismiss; and
4. power to control
The elements were not present in this case, there is no proof
that Fly Ace engaged to service of Javier as a regular
employee, that he was paid wages as an employee or that Fly
Ace dictated what his conduct should be while at work.
Note: Payment by piece is just a method of compensation
and does not define the essence of relation; it does not
negate regular employment.
Article 97 LC defines wage as, remuneration or earnings,
capable of being expressed in terms of money whether fixed
or ascertained on a time, task, piece or commission basis.
20. LIRIO VS GENOVIA
FACTS:
Respondent Genovia was hired by petitioner Lirio as
studio manager to manage and operate Celkor Ad Sonicmix
Recording Studio (Celkor) and to promote and sell the
recording studios services to music enthusiasts and other
prospective clients. He was made to work from Monday to
Friday from 9:00 a.m. to 5:00 p.m. On Saturdays, he was
required to work half-day, but most of the time he rendered
eight hours of work or more. He rendered overtime work
almost everyday, but petitioner never kept a daily time
record.
Few days later, petitioner approach respondent and
asked him to compose and arrange songs for the latters 15-
yr-old daughter and promised that he (petitioner Lirio) would
draft a contract to assure respondent of his compensation
for such services.
By mid-November 2001, respondent finally finished
the compositions and musical arrangements of the songs to
be included in the album. Before the month ended, the lead
and back-up vocals in the ten (10) songs were finally recorded
and completed.Thereafter, respondent was tasked by
petitioner to prepare official correspondence, establish
contacts and negotiate with various radio stations, malls,
publishers, record companies and manufacturers, record bars
and other outlets in preparation for the promotion of the said
album. By early February 2002, the album was in its
manufacturing stage. ELECTROMAT, manufacturer of CDs
and cassette tapes, was tapped to do the job. The carrier
single of the album, which respondent composed and
arranged, was finally aired over the radio on February 22,
2002.
On February 26, 2002, respondent again reminded
petitioner about the contract on his compensation as
composer and arranger of the album. Petitioner told
respondent that since he was practically a nobody and had
proven nothing yet in the music industry, respondent did not
deserve a high compensation, and he should be thankful that
he was given a job to feed his family. Petitioner informed
respondent that he was entitled only to 20% of the net profit,
and not of the gross sales of the album, and that the salaries
he received and would continue to receive as studio manager
of Celkor would be deducted from the said 20% net profit
share. Respondent objected and insisted that he be properly
compensated. On March 14, 2002, petitioner verbally
terminated respondents services, and he was instructed not
to report for work.
 On July 9, 2002, respondent Wilmer D. Genovia filed process.Petitioner failed to comply with these legal
a complaint against petitioner Cesar Lirio and/or Celkor Ad requirements; hence, respondent was illegally dismissed.
Sonicmix Recording Studio for illegal dismissalwithout any
valid grounds, and no hearing was conducted before he was
terminated, in violation of his constitutional right to due
process.

Petitioner contended that no employer-employee

relationship existed between him and the respondent, and
there was no illegal dismissal to speak of.

ISSUE:

WON there existed an employer-employee

relationship

RULING:

Yes.

It is settled that no particular form of evidence is

required to prove the existence of an employer-employee
relationship. Any competent and relevant evidence to prove
the relationship may be admitted.

The documentary evidence presented by

respondent to prove that he was an employee of petitioner
are as follows: (a) a document denominated as "payroll"
certified correct by petitioner, which showed that
respondent received a monthly salary of P7,000.00 with the
corresponding deductions due to absences incurred by
respondent; and (2) copies of petty cash vouchers, showing
the amounts he received and signed for in the payrolls.

The said documents showed that petitioner hired

respondent as an employee and he was paid monthly wages
of P7,000.00. Petitioner wielded the power to dismiss as
respondent stated that he was verbally dismissed by
petitioner. The power of control refers merely to the
existence of the power. It is not essential for the employer to
actually supervise the performance of duties of the
employee, as it is sufficient that the former has a right to
wield the power.

It is a well-settled doctrine, that if doubts exist

between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the
latter. It is a time-honored rule that in controversies between
a laborer and his master, doubts reasonably arising from the
evidence, or in the interpretation of agreements and writing
should be resolved in the formers favor. The policy is to
extend the doctrine to a greater number of employees who
can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give
maximum aid and protection of labor

In termination cases, the burden is upon the

employer to show by substantial evidence that the
termination was for lawful cause and validly made.Article 277
(b) of the Labor Code puts the burden of proving that the
dismissal of an employee was for a valid or authorized cause
on the employer, without distinction whether the employer
admits or does not admit the dismissal.For an employees
dismissal to be valid, (a) the dismissal must be for a valid
cause, and (b) the employee must be afforded due