V.

R
Labor Law; Dismissals; Prescription; In illegal dismissal cases, the employee concerned is given a
period of four years from the time of his dismissal within which to institute a complaint, which
period shall commence to run only upon the accrual of a cause of action of the worker.In illegal
dismissal cases, the employee concerned is
_______________

* THIRD DIVISION.
357

VOL. 519, MARCH 28, 2007

357
Victory Liner, Inc. vs. Race
given a period of four years from the time of his dismissal within which to institute a complaint.
This is based on Article 1146 of the New Civil Code which states that actions based upon an
injury to the rights of the plaintiff must be brought within four years. We explained the rationale in
the case of Callanta v. Carnation Philippines, Inc., 145 SCRA 268 (1986), thus: [O]nes
employment, profession, trade or calling is a property right, and the wrongful interference
therewith is an actionable wrong. The right is considered to be property within the protection of a
constitutional guaranty of due process of law. Clearly then, when one is arbitrarily and unjustly
deprived of his job or means of livelihood, the action instituted to contest the legality of ones
dismissal from employment constitutes, in essence, an action predicated upon an injury to the
rights of the plaintiff, as contemplated under Art. 1146 of the New Civil Code, which must be
brought within four years. The four-year prescriptive period shall commence to run only upon the
accrual of a cause of action of the worker. It is settled that in illegal dismissal cases, the cause of
action accrues from the time the employment of the worker was unjustly terminated. Thus, the
four-year prescriptive period shall be counted and computed from the date of the employees
dismissal up to the date of the filing of complaint for unlawful termination of employment.
Same; Same; Abandonment; Requisites.As to the alleged abandonment of work by the
respondent on 10 November 1994, it should be emphasized that two factors must be present in
order to constitute an abandonment: (a) the failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention to sever employer-employee relationship. The second
factor is the more determinative factor and is manifested by overt acts from which it may be
deduced that the employee has no more intention to work. The intent to discontinue the
employment must be shown by clear proof that it was deliberate and unjustified. Mere absence
from work does not imply abandonment.
Same; Same; Same; Neglect of Duty; Abandonment of work, or the deliberate and unjustified
refusal of an employee to resume his employment, may be a just cause for the termination of
employment under paragraph (b) of Article 282 of the Labor Code since it is a form of neglect of
duty.The Labor Code mandates that before an employer may legally dismiss an employee from
the service, the requirement of substantial and procedural due process must be
358

358
SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
complied with. Under the requirement of substantial due process, the grounds for termination of
employment must be based on just or authorized causes. The following are just causes for the
termination of employment under Article 282 of the Labor Code: (a) Serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or representative in connection
with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful
breach by the employee of the trust reposed in him by his employer or duly authorized
representative; (d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized representative; and (e)
Other causes analogous to the foregoing. Abandonment of work, or the deliberate and unjustified
refusal of an employee to resume his employment, may be a just cause for the termination of
employment under paragraph (b) of Article 282 of the Labor Code since it is a form of neglect of
duty.
Same; Same; Due Process; Procedural Requirements for Dismissal of Employees.It has been
established that petitioners failed to comply with the requirement of substantial due process in
terminating the employment of respondent. We will now determine whether the petitioner had
complied with the procedural aspect of a lawful dismissal. In the termination of employment, the
employer must (a) give the employee a written notice specifying the ground or grounds of
termination, giving to said employee reasonable opportunity within which to explain his side; (b)
conduct a hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given the opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and (c) give the employee a written notice
of termination indicating that upon due consideration of all circumstances, grounds have been
established to justify his termination.

A v. N
Labor Law; Appeals; In exceptional cases, a belated appeal may be given due course if greater
injustice may occur if an appeal is not given due course.We agree with petitioners contention
that the perfection of an ap-
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* FIRST DIVISION.
205

VOL. 503, SEPTEMBER 26, 2006

205
ABS-CBN Broadcasting Corporation vs. Nazareno
peal within the statutory or reglementary period is not only mandatory, but also jurisdictional;
failure to do so renders the assailed decision final and executory and deprives the appellate court
or body of the legal authority to alter the final judgment, much less entertain the appeal. However,
this Court has time and again ruled that in exceptional cases, a belated appeal may be given due
course if greater injustice may occur if an appeal is not given due course than if the reglementary
period to appeal were strictly followed. The Court resorted to this extraordinary measure even at
the expense of sacrificing order and efficiency if only to serve the greater principles of substantial
justice and equity.
Same; Broadcast Industry; Regular Employees; Project Employees; While the question of whether
respondents are regular or project employees or independent contractors is essentially factual in
nature, the Court is constrained to resolve it due to its tremendous effects on the legions of
production assistants working in the Philippine broadcasting industry.Case law is that this Court
has always accorded respect and finality to the findings of fact of the CA, particularly if they
coincide with those of the Labor Arbiter and the National Labor Relations Commission, when
supported by substantial evidence. The question of whether respondents are regular or project
employees or independent contractors is essentially factual in nature; nonetheless, the Court is
constrained to resolve it due to its tremendous effects to the legions of production assistants
working in the Philippine broadcasting industry. We agree with respondents contention that where
a person has rendered at least one year of service, regardless of the nature of the activity
performed, or where the work is continuous or intermittent, the employment is considered regular
as long as the activity exists, the reason being that a customary appointment is not indispensable
before one may be formally declared as having attained regular status. Article 280 of the Labor
Code 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 except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in nature and the employment
is for the duration of the season.
207

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207
ABS-CBN Broadcasting Corporation vs. Nazareno
Same; Same; Same; Same; Respondents cannot be considered talents because they are not
actors or actresses or radio specialists or mere clerks or utility employeesthey are regular
employees who perform several different duties under the control and direction of the broadcast
company executives and supervisors.It is of no moment that petitioner hired respondents as
talents. The fact that respondents received pre-agreed talent fees instead of salaries, that they
did not observe the required office hours, and that they were permitted to join other productions
during their free time are not conclusive of the nature of their employment. Respondents cannot be
considered talents because they are not actors or actresses or radio specialists or mere clerks or
utility employees. They are regular employees who perform several different duties under the
control and direction of ABS-CBN executives and supervisors.
Same; Same; Same; Same; There are two kinds of regular employees under the law(1) those
engaged to perform activities which are necessary or desirable in the usual business or trade of the
employer, and, (2) those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activities in which they are employed.There are two
kinds of regular employees under the law: (1) those engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those casual
employees who have rendered at least one year of service, whether continuous or broken, with
respect to the activities in which they are employed. The law overrides such conditions which are
prejudicial to the interest of the worker whose weak bargaining situation necessitates the succor of
the State. What determines whether a certain employment is regular or otherwise is not the will or
word of the employer, to which the worker oftentimes acquiesces, much less the procedure of
hiring the employee or the manner of paying the salary or the actual time spent at work. It is the
character of the activities performed in relation to the particular trade or business taking into
account all the circumstances, and in some cases the length of time of its performance and its
continued existence. It is obvious that one year after they were employed by petitioner,
respondents became regular employees by operation of law.
Same; Same; Same; Same; Words and Phrases; Under existing jurisprudence, project could refer
to two distinguishable types of activitiesfirst, a project may refer to a particular job or
undertaking that is within the regular or usual business of the employer, but which is distinct and
separate, and identifiable as such, from the other undertaking of the company, and second, the
term project may also refer to a particular job or undertaking that is not
208

208
SUPREME COURT REPORTS ANNOTATED
ABS-CBN Broadcasting Corporation vs. Nazareno
within the regular business of the employer.Respondents cannot be considered as project or
program employees because no evidence was presented to show that the duration and scope of the
project were determined or specified at the time of their engagement. Under existing
jurisprudence, project could refer to two distinguishable types of activities. First, a project may
refer to a particular job or undertaking that is within the regular or usual business of the employer,
but which is distinct and separate, and identifiable as such, from the other undertakings of the
company. Such job or undertaking begins and ends at determined or determinable times. Second,
the term project may also refer to a particular job or undertaking that is not within the regular
business of the employer. Such a job or undertaking must also be identifiably separate and distinct
from the ordinary or regular business operations of the employer. The job or undertaking also
begins and ends at determined or determinable times. The principal test is whether or not the
project employees were assigned to carry out a specific project or undertaking, the duration and
scope of which were specified at the time the employees were engaged for that project.
Same; Same; Same; Same; While length of time may not be a sole controlling test for project
employment, it can be a strong factor to determine whether the employee was hired for a specific
undertaking or in fact tasked to perform functions which are vital, necessary and indispensable to
the usual trade or business of the employer.It is undisputed that respondents had continuously
performed the same activities for an average of five years. Their assigned tasks are necessary or
desirable in the usual business or trade of the petitioner. The persisting need for their services is
sufficient evidence of the necessity and indispensability of such services to petitioners business or
trade. While length of time may not be a sole controlling test for project employment, it can be a
strong factor to determine whether the employee was hired for a specific undertaking or in fact
tasked to perform functions which are vital, necessary and indispensable to the usual trade or
business of the employer. We note further that petitioner did not report the termination of
respondents employment in the particular project to the Department of Labor and Employment
Regional Office having jurisdiction over the workplace within 30 days following the date of their
separation from work, using the prescribed form on employees
termination/dismissals/suspensions.
Same; Same; Same; Same; Program employees, or project employees, are different from
independent contractors because in the case of the latter, no employer-employee relationship
exists.As gleaned from the records of this case, petitioner itself is not certain how to categorize
respondents. In its
209

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209
ABS-CBN Broadcasting Corporation vs. Nazareno
earlier pleadings, petitioner classified respondents as program employees, and in later pleadings,
independent contractors. Program employees, or project employees, are different from
independent contractors because in the case of the latter, no employer-employee relationship
exists.
Same; Same; Same; Same; The presumption is that when the work done is an integral part of the
regular business of the employer and when the worker, relative to the employer, does not furnish
an independent business or professional service, such work is a regular employment of such
employee and not an independent contractor.The presumption is that when the work done is an
integral part of the regular business of the employer and when the worker, relative to the
employer, does not furnish an independent business or professional service, such work is a regular
employment of such employee and not an independent contractor. The Court will peruse beyond
any such agreement to examine the facts that typify the parties actual relationship.

A. VS. N

Labor Law; Employment; Control Test; The better approach would therefore be to adopt a two-
tiered test.The better approach would therefore be to adopt a two-tiered test involving: (1) the
putative employers power to control the employee with respect to the means and methods by
which the work is to be accomplished; and (2) the underlying economic realities of the activity or
relationship. This two-tiered test would provide us with a framework of analysis, which would
take into consideration the totality of circumstances surrounding the true nature of the relationship
between the parties. This is especially appropriate in this case where there is no written agreement
or terms of reference to base the relationship on; and due to the complexity of the relationship
based on the various positions and responsibilities given to the worker over the period of the
latters employment.
Same; Same; Same; Economic Activity; The determination of the relationship between employer
and employee depends upon the circumstances of the whole economic activity.The
determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services
performed are an integral part of the employers business; (2) the extent of the workers
investment in equipment and facilities; (3) the nature and degree of control exercised by the
employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill,
judgment or foresight required for the success of the claimed independent enterprise; (6) the
permanency and duration of the relationship between the worker and the employer; and (7) the
degree of dependency of the worker upon the employer for his continued employment in that line
of business.
_______________

* FIRST DIVISION.
691

VOL. 500, AUGUST 31, 2006

691
Francisco vs. National Labor Relations Commission
Dismissals; Constructive Dismissals; A diminution of pay is prejudicial to the employee and
amounts to constructive dismissal.A diminution of pay is prejudicial to the employee and
amounts to constructive dismissal. Constructive dismissal is an involuntary resignation resulting in
cessation of work resorted to when continued employment becomes impossible, unreasonable or
unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to an employee. In Globe Telecom,
Inc. v. Florendo-Flores, 390 SCRA 201 (2002), we ruled that where an employee ceases to work
due to a demotion of rank or a diminution of pay, an unreasonable situation arises which creates an
adverse working environment rendering it impossible for such employee to continue working for
her employer. Hence, her severance from the company was not of her own making and therefore
amounted to an illegal termination of employment.
Labor Law; Equal Work Opportunity; In affording full protection to labor, this Court must ensure
equal work opportunities regardless of sex, race or creed.In affording full protection to labor,
this Court must ensure equal work opportunities regardless of sex, race or creed. Even as we, in
every case, attempt to carefully balance the fragile relationship between employees and
employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a
greater number of employees. This would enable employees to avail of the benefits accorded to
them by law, in line with the constitutional mandate giving maximum aid and protection to labor,
promoting their welfare and reaffirming it as a primary social economic force in furtherance of
social justice and national development.

T. Vs. C
Labor Law; Labor Relations; Employer-Employee Relationship; The existence of an employer-
employee relation cannot be made the subject of an agreement.The existence of an employer-
employee relation is a question of law and being such, it cannot be made the subject of agreement.
Hence, the fact that the manpower supply agreement between Livi and California had specifically
designated the former as the petitioners employer and had absolved the latter from any liability as
an employer, will not erase either partys obligations as an employer, if an employer-employee
relation otherwise exists between the workers and either firm. At any rate, since the agreement
was between Livi and California, they alone are bound by it, and the petitioners cannot be made to
suffer from its adverse consequences.
Same; Same; Same; Labor Only Contracting; The labor only contractor is considered merely
an agent of the employer, liability therefore must be shouldered by either one or shared by both.
On the other hand, we have likewise held, based on Article 106 of the Labor Code. xxx that
notwithstanding the absence of a direct employeremployee relationship between the employer in
whose favor work had been contracted out by a labor-only contractor, and the employees, the
former has the responsibility, together with the labor-only contractor for any valid labor claims,
by operation of law. The reason, so we held, is that the labor-only contractor is considered
merely an agent of the employer, and liability must be shouldered by either one or shared by
both.
________________

* SECOND DIVISION.
498

498
SUPREME COURT REPORTS ANNOTATED
Tabas vs. California Manufacturing Co., Inc.
Same; Same; Same; Casual Employees; A temporary or casual employee becomes regular after
service of one year, unless he has been contracted for a specific project.The fact that the
petitioners have been hired on a temporary or seasonal basis merely is no argument either. As
we held in Philippine Bank of Communications v. NLRC, a temporary or casual employee, under
Article 281 of the Labor Code, becomes regular after service of one year, unless he has been
contracted for a specific project. And we cannot say that merchandising is a specific project for the
obvious reason that it is an activity related to the day-to-day operations of California.

B. V. Z
Labor Relations; Factors considered in determining employeremployee relationship.In
determining the existence of an employeremployee relationship, the elements that are generally
considered are the following: (a) the selection and engagement of the employee; (b) the payment
of wages; (Q) the power of dismissal; and (d) the employers power to control the employee with
respect to the means and methods by which the work is to be accomplished. It is the socalled
control test that is the most important element.
_______________

* SECOND DIVISION.
50

50
SUPREME COURT REPORTS ANNOTATED
BrotherhoodLabor Unity Movement of the Philippines vs. Zamora
Labor Relations; Criteria for determining existence of independent contractor relationship.The
existence of an independent contractor relationship is generally estabished by the following
criteria: whether or not the contractor is carrying on an independent business; the nature and
extent of the work; the skill required; the term and duration of the relationship; the right to assign
the performance of a specified piece of work; the control and supervision of the work to another;
the employers power with respect to the hiring, firing, and payment of the contractors workers;
the control of the premises; the duty to supply the premises tools, appliances, materials and
laborer; and the mode, manner, and terms of payment.
Ibid; Unfair Labor Practice; Where there is an existing CBA, a group of employees who wish to
form another union must follow Labor Code procedures.The respondent company had an
existing collective bargaining agreement with the IBM Union which is the recognized collective
bargaining representative at the respondents glass placed there being a recognized bargaining
representative of all employees at the companys glass plant, the petitioners cannot merely form a
union and demand bargaining. The Labor Code provides the proper procedure for the recognition
of unions as sale bargaining representatives. This must be followed

G. V. J
Same; Same; Same; Labor; Employer-employee relationship; Test to determine employer-
employee relationship.One salient point in the determination of employer-employee relationship
which cannot be easily ignored is the fact that the compensation that these agents on commission
received is not paid by the insurance company but by the investor (or the person insured). After
determining the commission earned by an agent on his sales the agent directly deducts it from the
amount he received from the investor or the person insured and turns over to the insurance
company the amount invested after such deduction is made. The test therefore is whether the
employer controls or has reserved the right to control the employee not only as to the result of
the work to be done but also as to the means and methods by which the same is to be
accomplished.
Same; Same; Same; Same; Element of control by petitioner on the private respondent is present;
Contract of services with petitioner by private respondent is not for a piece of work nor for a
definite period.Applying the aforementioned test to the case at bar, We can
_______________

* SECOND DIVISION.
446

446
SUPREME COURT REPORTS ANNOTATED
Great Pacific Life Assurance Corporation vs. Judico
readily see that the element of control by the petitioner on Judico was very much present. The
record shows that petitioner Judico received a definite minimum amount per week as his wage
known as sales reserve wherein the failure to maintain the same would bring him back to a
beginners employment with a fixed weekly wage of P200.00 for thirteen weeks regardless of
production. He was assigned a definite place in the office to work on when he is not in the field;
and in addition to his canvassing work he was burdened with the job of collection. In both cases
he was required to make regular report to the company regarding these duties, and for which an
anemic performance would mean a dismissal. Conversely faithful and productive service earned
him a promotion to Zone Supervisor with additional supervisors allowance, a definite amount of
P110.00 aside from the regular P200.00 weekly allowance. Furthermore, his contract of services
with petitioner is not for a piece of work nor for a definite period.
Same; Same; Same; Same; Same; Illegal dismissal; Private respondent by the nature of his
position and work had been a regular employee of petitioner and entitled to the protection of the
law and could not just be terminated without valid and justifiable cause.On the other hand, an
ordinary commission insurance agent works at his own volition or at his own leisure without fear
of dismissal from the company and short of committing acts detrimental to the business interest of
the company or against the latter, whether he produces or not is of no moment as his salary is
based on his production, his anemic performance or even dead result does not become a ground
for dismissal. Whereas, in private respondents case, the undisputed facts show that he was
controlled by petitioner insurance company not only as to the kind of work; the amount of results,
the kind of performance but also the power of dismissal. Undoubtedly, private respondent, by
nature of his position and work, had been a regular employee of petitioner and is therefore entitled
to the protection of the law and could not just be terminated without valid and justifiable cause.

F. V. B
Same; Same; Same; Labor; Employer-employee relationship; Test to determine employer-
employee relationship.One salient point in the determination of employer-employee relationship
which cannot be easily ignored is the fact that the compensation that these agents on commission
received is not paid by the insurance company but by the investor (or the person insured). After
determining the commission earned by an agent on his sales the agent directly deducts it from the
amount he received from the investor or the person insured and turns over to the insurance
company the amount invested after such deduction is made. The test therefore is whether the
employer controls or has reserved the right to control the employee not only as to the result of
the work to be done but also as to the means and methods by which the same is to be
accomplished.
Same; Same; Same; Same; Element of control by petitioner on the private respondent is present;
Contract of services with petitioner by private respondent is not for a piece of work nor for a
definite period.Applying the aforementioned test to the case at bar, We can
_______________

* SECOND DIVISION.
446

446
SUPREME COURT REPORTS ANNOTATED
Great Pacific Life Assurance Corporation vs. Judico
readily see that the element of control by the petitioner on Judico was very much present. The
record shows that petitioner Judico received a definite minimum amount per week as his wage
known as sales reserve wherein the failure to maintain the same would bring him back to a
beginners employment with a fixed weekly wage of P200.00 for thirteen weeks regardless of
production. He was assigned a definite place in the office to work on when he is not in the field;
and in addition to his canvassing work he was burdened with the job of collection. In both cases
he was required to make regular report to the company regarding these duties, and for which an
anemic performance would mean a dismissal. Conversely faithful and productive service earned
him a promotion to Zone Supervisor with additional supervisors allowance, a definite amount of
P110.00 aside from the regular P200.00 weekly allowance. Furthermore, his contract of services
with petitioner is not for a piece of work nor for a definite period.
Same; Same; Same; Same; Same; Illegal dismissal; Private respondent by the nature of his
position and work had been a regular employee of petitioner and entitled to the protection of the
law and could not just be terminated without valid and justifiable cause.On the other hand, an
ordinary commission insurance agent works at his own volition or at his own leisure without fear
of dismissal from the company and short of committing acts detrimental to the business interest of
the company or against the latter, whether he produces or not is of no moment as his salary is
based on his production, his anemic performance or even dead result does not become a ground
for dismissal. Whereas, in private respondents case, the undisputed facts show that he was
controlled by petitioner insurance company not only as to the kind of work; the amount of results,
the kind of performance but also the power of dismissal. Undoubtedly, private respondent, by
nature of his position and work, had been a regular employee of petitioner and is therefore entitled
to the protection of the law and could not just be terminated without valid and justifiable cause.
Same; Employee under the Industrial Peace Act.Under section 2(d) of the Industrial Peace Act,
the term "employee" embraces not only those who are usually and ordinarily considered as
employees but also those who have ceased as employees as a consequence of a labor dispute. An
employee is one who is engaged in the service of another; who performs services for another; who
works for salary or wages.
Same.Professors and instructors, who are under contract to teach particular courses and are paid
for their services, are employees under the Industrial Peace Act. Teachers are employees.
Same.Striking professors and instructors of a university are employees because striking
employees retain their status as employees.
Same; Independent contractors; Evidence; Judicial notice.Professors and instructors are not
independent contractors. The Court may take judicial notice that a university controls the work of
the members of its faculty; that it prescribes the courses or subjects that they teach and the time
and place for teaching; that the professor's 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 a share of the profits; that professors or instructors cannot
1193

VOL. 18, DECEMBER 27, 1966

1193
Feati University vs. Bautista
substitute others to do their work without the consent of the university; and that they can be laid
off if their work is unsatisfactory. All these indicate that the university has control over their work
and that they are, therefore, employees and not independent contractors.
Same.Under the Industrial Peace Act independent contractors are included in the term
"employee".
Same; Right to unionize.University professors and instructors, as employees, have the right to
unionize. The right of employees to self-organization is guaranteed by the Constitution. Said right
would exist even if there is no Industrial Peace Act and regardless of whether the employers are
engaged in commerce or not.
Same; Meaning of labor dispute.The test of whether a controversy comes within the definition
of "labor dispute" depends on whether the controversy involves or concerns "terms, tenure or
condition of employment" or "representation". Where the labor union of professors and instructors
employed in a university made certain demands and declared a strike thereafter and filed a charge
of unfair labor practice against the university, a labor dispute existed between the said union and
the university.

Same; Replacements.Employees, who took the place of strikers, do not displace them as
employees. Strikers maintain their status as employees of the employer. A return-to-work order
cannot be considered as an impairment of the contract entered into by an employer with
replacements.