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CASE TITLE: LAZO vs. SALAC GR NO.: G.R. No.

152642
DATE: November 13, 2012
PETITIONER: Hon. Patricia A. Sto. Tomas, Rosalinda Baldoz and Lucita Lazo
RESPONDENT: Rey Salac, Willie D. Espiritu, Mario Montenegro, Dodgie Belonio, Lolit Salineland Buddy
DOCTRINE:
Illegal recruitment" as defined in Section 6 is clear and unambiguous and, contrary to the RTC’s finding, actually makes a distinction between
licensed and non -licensed recruiters.By its terms, persons who engage in "canvassing, enlisting, contracting, transporting, utilizing,hiring, or procuring
workers" without the appropriate government license or authority are guiltyof illegal recruitment whether or not they commit the wrongful acts enumerated in
that section.
FACTS:
Several cases were filed and consolidated questioning the constitutionality of certain provisions of R.A 8042 otherwise known as the Migrant
Workers and Overseas Filipino Act of 1995 which sets the Government’s policies on overseas employment and establishes a higher
standard of protection and promotion of the welfare of migrant workers, their families, and overseas Filipinos in distress. Republic Act 8042 was
subsequently amended by R.A. 9422, which expressly repealed Sections 29 and 30 of R.A. 8042 and adopted the policy of close government regulation of
therecruitment and deployment of OFWs. On August 21, 1995 respondent Philippine Association of Service Exporters, Inc. (PASEI) filed a petition for
declaratory relief and prohibition with prayer for issuance of TRO and writ ofpreliminary injunction before the RTC of Manila, seeking to annul,
among others, Section 6 ofR.A. 8042 defining Illegal Recruitment for being unconstitutional. It was contended that it isvague as it fails to distinguish
between licensed and non-licensed recruiters and for that reasongives undue advantage to the non-licensed recruiters in violation of the right to equal
protectionof those that operate with government licenses or authorities.The RTC of Manila declaredSection 6 unconstitutional.

Issue: Whether or not the illegal recruitment definition should be declared unconstitutional?

Ruling: No. Illegal Recruitment as defined in Section 6 is clear and unambiguous and, contrary to the RTC’s finding, actually makes a distinction
between licensed and non-licensed recruiters.By its terms, persons who engage in "canvassing, enlisting, contracting, transporting, utilizing,hiring, or
procuring workers" without the appropriate government license or authority are guiltyof illegal recruitment whether or not they commit the wrongful
acts enumerated in that section.On the other hand, recruiters who engage in the canvassing, enlisting, etc. of OFWs, althoughwith the appropriate
government license or authority, are guilty of illegal recruitment only if theycommit any of the wrongful acts enumerated in Section 6.

Thus, Section 6 of R.A 8041 is constitutional


People vs. Panis,142 SCRA 664G.R. Nos. L-58674-77 July 11, 1990

FAST FACTS: SerapioAbug was charged with illegal recruitment. His defense was that the informationsfiled against him did not
constitute an offense because in each of the four informations filed againsthim, each denote that he was only recruiting one
person whereas the statute requires two or morepersons

ISSUE: Determination of the proper interpretationof Art 13(b) of PD 442/ Labor Code:
b) Recruitment and placement' refers to any act of canvassing, enlisting, contracting,transporting, hiring, or procuring workers,
and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall
be deemed engaged in recruitment and placement.

HELD: The specification of two or more persons is not to create a condition prior to filing but rather itstates a presumption
that the individual is engaged in recruitment in consideration of a fee, however thenumber of persons is not an essential
ingredient to the act of recruitment or placement, and it will stillqualify even if only one person has been involved

SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. v. NATIONAL LABOR RELATIONS COMMISSION et al.
480 SCRA 146 (2006)

FACTS: Respondent Divina Montehermozo is a domestic helper deployed to Taiwan by Sunace International Management Services (Sunace) under a 12-month contract.
Such employment was made with the assistance of Taiwanese broker Edmund Wang. After the expiration of the contract, Montehermozo continued her employment with
her Taiwanese employer for another 2 years.

When Montehermozo returned to the Philippines, she filed a complaint against Sunace, Wang, and her Taiwanese employer before the National Labor Relations
Commission (NLRC). She alleges that she was underpaid and was jailed for three months in Taiwan. She further alleges that the 2-year extension of her employment
contract was with the consent and knowledge of Sunace. Sunace, on the other hand, denied all the allegations.

The Labor Arbiter ruled in favor of Montehermozo and found Sunace liable thereof. The National Labor Relations Commission and Court of Appeals affirmed the labor
arbiter’s decision. Hence, the filing of this appeal.

ISSUE: Whether or not the 2-year extension of Montehermozo’s employment was made with the knowledge and consent of Sunace

HELD: There is an implied revocation of an agency relationship when after the termination of the original employment contract, the foreign principal directly negotiated with
the employee and entered into a new and separate employment contract.

Contrary to the Court of Appeals finding, the alleged continuous communication was with the Taiwanese broker Wang, not with the foreign employer.

The finding of the Court of Appeals solely on the basis of the telefax message written by Wang to Sunace, that Sunace continually communicated with the foreign
"principal" (sic) and therefore was aware of and had consented to the execution of the extension of the contract is misplaced. The message does not provide evidence that
Sunace was privy to the new contract executed after the expiration on February 1, 1998 of the original contract. That Sunace and the Taiwanese broker communicated
regarding Montehermozo’s allegedly withheld savings does not necessarily mean that Sunace ratified the extension of the contract.

As can be seen from that letter communication, it was just an information given to Sunace that Montehermozo had taken already her savings from her foreign employer
and that no deduction was made on her salary. It contains nothing about the extension or Sunace’s consent thereto.

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that it was sent to enlighten Sunace who had been directed, by Summons
issued on February 15, 2000, to appear on February 28, 2000 for a mandatory conference following Montehermozo’s filing of the complaint on February 14, 2000.

Respecting the decision of Court of Appeals following as agent of its foreign principal, [Sunace] cannot profess ignorance of such an extension as obviously, the act of its
principal extending [Montehermozo’s] employment contract necessarily bound it, it too is a misapplication, a misapplication of the theory of imputed knowledge.

The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer, not the other way around. The knowledge of the principal-
foreign employer cannot, therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-year employment contract extension, it cannot be said to be privy thereto. As
such, it and its "owner" cannot be held solidarily liable for any of Montehermozo’s claims arising from the 2-year employment extension. As the New Civil Code provides,
Contracts take effect only between the parties, their assigns, and heirs, except in case where the rights and obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law. Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with its foreign
principal when, after the termination of the original employment contract, the foreign principal directly negotiated with Montehermozo and entered into a new and separate
employment contract in Taiwan. Article 1924 of the New Civil Code states that the agency is revoked if the principal directly manages the business entrusted to the agent,
dealing directly with third persons

CLAUDIA S. YAP, Petitioner, v. THENAMARIS SHIPS MANAGEMENT and INTERMARE MARITIME AGENCIES, INC.,Respondents.
FACTS:

Petitioner was employed as an electrician of the vessel, M/T SEASCOUT by Intermare Maritime Agencies, Inc. in behalf of its principal, Vulture Shipping
Limited.The contract was for 12 months.On 23 August 2001,Yapboarded M/T SEASCOUT and commenced his job as electrician. However, on or about 08
November 2001, the vessel was sold.

Yap received his seniority bonus, vacation bonus, extra bonus along with the scrapping bonus.However, he insisted that he was entitled to the payment of the
unexpired portion of his contract since he was illegally dismissed from employment.He alleged that he opted for immediate transfer but none was made.

Respondents contended that Yap was not illegally dismissed.They further alleged that Yaps contract was validly terminated due to the sale of the vessel and no
arrangement was made for Yaps transfer to Thenamaris other vessels.

Thus, Yap brought the issue before the Labor Arbiter (LA) which ruled that petitioner was illegally dismissed; that respondents acted in bad faith when they
assured petitioner of re-embarkation but he was not able to board; and that petitioner was entitled to his salaries for the unexpired portion of his contract for a
period of nine months (US$12,870.00), P100,000 for moral damages, and P50,000 for exemplary damages with 10% of the same for Attys fees.

Respondents sought recourse from the NLRC which modified the award of salaries from that corresponding to nine months to only three months (US$4,290.00)
pursuant to Section 10 R.A. No. 8042.

Respondents and petitioner both filed a Motion for Partial Reconsideration.

NLRC affirmed the finding of Illegal Dismissal and Bad Faith on the part of respondent. However, the NLRC reversed its earlier Decision, holding that "there can be
no choice to grant only 3 months salary for every year of the unexpired term because there is no full year of unexpired term which this can be applied."

Respondents filed an MR, which the NLRC denied. Undaunted, respondents filed a petition forcertiorariunder Rule 65 before the CA.

The CA affirmed the findings and ruling of the LA and the NLRC. However, the CA ruled that the NLRC erred in sustaining the LAs interpretation of Section 10 of
R.A. No. 8042. The CA relied on the clause "or for three months for every year of the unexpired term, whichever is less" provided in the 5th paragraph of Section
10 of R.A. No. 8042.

Both parties filed their respective MRs which the CA denied. Thus, this petition.

ISSUE:
[1] Whether Section 10 of R.A. 8042, to the extent that it affords an illegally dismissed migrant worker the lesser benefit o f "salaries for
[the] unexpired portion of his employment contract for three (3) months for every year of the unexpired term,whichever is less" is
constitutional;

[2] Assuming that it is, whether the CA gravely erred in granting petitioner only three (3) months backwages when his unexpir ed term of 9
months is far short of the "every year of the unexpired term" threshold.

HELD: The petition is impressed with merit.

We have previously declared that the clause "or for three months for every year of the unexpired term, whichever is less" is
unconstitutional for being violative of the rights of (OFWs) to equal protection. Moreover, the subject clause does not state any definitive
governmental purpose, hence, it also violates petitioner's right to substantive due process.

Generally, an unconstitutional act is not a law. An exception to this is the doctrine of operative fact applied when a declaration of
unconstitutionality will impose an undue burden on those who have relied on the invalid law. This case should not be included in the
exception. It was not the fault of petitioner that he lost his job due to an act of illegal dismissal committed by respondents.

Also, we cannot subscribe to respondents postulation that the tanker allowance of US$130.00 should not be included in the com putation
of the lump-sum salary. First, fair play, justice, and due process dictate that this Court cannot now, for the first time on appeal, pass upon
this question. Second, the allowance was encapsulated in the basic salary clause
REPUBLIC OF THE PHILIPPINES VS. COURT OF APPEALS and THE NATIONAL PARKS DEVELOPMENTSUPERVISORY ASSOCIATION & THEIR MEMBERS
G.R. No. 87676. 20 December, 1989. First Division (Grino-Aquino, J.)
Topic: Non-applicability of the Labor Code (Art. 6, LC)
The Civil Service Law embraces all branches,subdivisions, instrumentalities and agencies of the Government, including GOCCs with original chapter,
hence,employees thereof are civil service employees.
Facts
National Parks Development Committee (NPDC, for brevity) was originally created in 1963 under ExecutiveOrder No. 30, as the Executive Committee for the
development of Quezon Memorial, Luneta and other nationalparks. The Committee was registered with the SEC as a non-stock and non-profit
corporation.However, in 1987, due to failure to comply with SEC requirements (i.e. to submit General Information Sheetand Financial Statements from 1981 to
1987; to register its Corporate Books; and to operate for a continuousperiod for at least 5 years since 1967) NPDC was attached to the Ministry of Tourism.
Pursuant thereto, CivilService Commission notified NPDC that all appointments and other personnel actions shall be submitted to theformer.The Rizal Park
Supervisory Employees Association was organized, and it affiliated with the Trade Union of thePhilippines and Allied Service (TUPAS, for brevity) under
Certificate No. 1206. However, NPDC entered into aseparate CBA with NPDCEA (TUPAS Local Chapter No. 967), and NPDCSA (TUPAS Chapter No. 1206) for
aperiod of two (2) years. Pursuant thereto, these unions staged a strike alleging unfair labor practices by NPDC.
Contention of the NPDC:
The strike is illegal on ground that the strikers, being government employees, thestrikers have no right to strike, although they may form a union.
Ruling of the Trial Court and CA:
Complaint is dismissed for lack of jurisdiction,
to wit: (1) there exists anemployer-employee relationship between NPDC and the strikers; (2) the acts complained of falls under par 5,Art. 217, in relation to Art.
265 of the Labor Code. Hence, the case properly falls under the jurisdiction of DOLE.On appeal, CA affirmed the decision of the trial court.
Issue
WON the NPDC Employees are covered by the Civil Service Law.
Ruling

NPDC is a government agency, and its employees are covered by the Civil Service Rules and Regulations.Citing the case of Jesus P. Perlas vs. People of the
Philippines (G.R. No. 84637-39), NPDC remained under the Officeof the President despite an attempt to transfer it to the Bureau of Forest Development, DENR
in 1975. Further,since 1977 to 1981, the annual appropriations decrees listed NPDC as a regular government agency under theOffice of the President.Pursuant
thereto, NPDC employees are allowed under the 1987 Constitution to organize and join unions oftheir choice, that notwithstanding, there is as yet no law
permitting them to strike.Anent the issue on WON the labor dispute is cognizable by DOLE, the Court held that In case of a labor disputebetween the employees
and the government,
Section 15 of Executive Order No. 180 dated June 1, 1987 providesthat the Public Sector Labor- Management Council, not the Department of Labor and
Employment, shall hearthe dispute
PASEI v. Drilon
G.R. No. 81958 June 30, 1988, Sarmiento, J.

FACTS:
Phil association of Service Exporters, Inc., is engaged principally in the recruitment of Filipino workers, male and female of overseas employment. It challenges the
constitutional validity of Dept. Order No. 1 (1998) of DOLE entitled “Guidelines Governing the Temporary Suspension of Deployment of Filipino Domestic and
Household Workers.” It claims that such order is a discrimination against males and females. The Order does not apply to all Filipino workers but only to domestic
helpers and females with similar skills, and that it is in violation of the right to travel, it also being an invalid exercise of the lawmaking power. Further, PASEI
invokes Sec 3 of Art 13 of the Constitution, providing for worker participation in policy and decision-making processes affecting their rights and benefits as may be
provided by law. Thereafter the Solicitor General on behalf of DOLE submitting to the validity of the challenged guidelines involving the police power of the State
and informed the court that the respondent have lifted the deployment ban in some states where there exists bilateral agreement with the Philippines and
existing mechanism providing for sufficient safeguards to ensure the welfare and protection of the Filipino workers.

ISSUE: Whether or not D.O. No. 1 of DOLE is constitutional as it is an exercise of police power.

RULING:
“[Police power] has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general
welfare." As defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace.

“The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that Department Order No. 1 applies only to
"female contract workers," but it does not thereby make an undue discrimination between the sexes. It is well-settled that "equality before the law" under the
Constitution does not import a perfect Identity of rights among all men and women. It admits of classifications, provided that (1) such classifications rest on
substantial distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing conditions; and (4) they apply equally to all
members of the same class.
The Court is satisfied that the classification made-the preference for female workers — rests on substantial distinctions.
Sevilla vs. CA

FACTS:
A contract by and between Noguera and Tourist World Service (TWS), represented by Canilao, wherein TWSleased the premises belonging to
Noguera as branch office of TWS. When the branch office was opened, it was runby appellant Sevilla payable to TWS by any airline for
any fare brought in on the efforts of Mrs. Sevilla, 4% was togo to Sevilla and 3% was to be withheld by the TWS.Later, TWS was
informed that Sevilla was connected with rival firm, and since the branch office was losing, TWS considered closing down its office.On
January 3, 1962, the contract with appellee for the use of the branch office premises was terminatedand while the effectivity thereof
was January 31, 1962, the appellees no longer used it. Because of this, Canilao, thesecretary of TWS, went over to the branch
office, and finding the premises locked, he padlocked the premises.When neither appellant Sevilla nor any of his
employees could enter, a complaint was filed by the appellants against the appellees. TWS insisted that Sevilla was a mere
employee, being the “branch manager” of its branch office and thatshe had no say on the lease executed with the private respondent,
Noguera.
ISSUE:
W/N ER-EE relationship exists between Sevilla and TWS
HELD:
The records show that petitioner, Sevilla, was not subject to control by the private respondent TWS. In thef i r s t p l a c e , u n d e r t h e
c o n t r a c t o f l e a s e , s h e h a d b o u n d h e r s e l f i n s o l i d u m a s a n d f o r r e n t a l p a y m e n t s , a n arrangement that would belie claims
of a master-servant relationship. That does not make her an employee of TWS,since a true employee cannot be made to part with his own
money in pursuance of his employer’s business, or otherwise, assume any liability thereof.In the second place, when the branch office
was opened, the same was run by the appellant Sevilla payableto TWS by any airline for any fare brought in on the effort of Sevilla.
Thus, it cannot be said that Sevilla was underthe control of TWS. Sevilla in pursuing the business, relied on her own capabilities.It is further
admitted that Sevilla was not in the company’s payroll. For her efforts, she retained 4% in commissions from airline
bookings, the remaining 3% going to TWS. Unlike an employee, who earns a fixed salary,she earned compensation in fluctuating
amount depending on her booking successes. The fact that Sevilla had been designated “branch manager” does not make
her a TWS employee. Itappears that Sevilla is a bona fide travel agent herself, and she acquired an interest in the business
entrusted toher. She also had assumed personal obligation for the operation thereof, holding herself solidary liable for
thepayment of rentals.Wherefore, TWS and Canilao are jointly and severally liable to indemnify the petitioner, Sevilla
ANGELINA FRANCISCO, Petitioner, versus NATIONAL LABOR RELATIONS COMMISSION, KASEI CORPORATION,
SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENE BALLESTEROS, TRINIDAD LIZA and RAMON ESCUETA,
Respondents., G.R. No. 170087, 2006 Aug 31.

FACTS:1995, Petitioner was hired by Kasei Corporation during its incorporation stage. She was designated as Accountant and Corporate Secretary and was
assigned to handle all the accounting needs of the company. She was also designated as Liaison Officer to the City of Makati to secure business permits,
construction permits and other licenses for the initial operation of the company.

Although she was designated as Corporate Secretary, she was not entrusted with the corporate documents; neither did she attend any board meeting nor required to
do so. She never prepared any legal document and never represented the company as its Corporate Secretary. 1996, petitioner was designated Acting Manager.
Petitioner was assigned to handle recruitment of all employees and perform management administration functions; represent the company in all dealings with
government agencies, especially with the BIR, SSS and in the city government of Makati; and to administer all other matters pertaining to the operation of Kasei
Restaurant which is owned and operated by Kasei Corporation.

January 2001, petitioner was replaced by a certain Liza R. Fuentes as Manager. Kasei Corporation reduced her salary, she was not paid her mid-year bonus
allegedly because the company was not earning well. On October 2001, petitioner did not receive her salary from the company. She made repeated follow-ups
with the company cashier but she was advised that the company was not earning well. Eventually she was informed that she is no longer connected with the
company.
Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal before the labor arbiter. Private
respondents averred that petitioner is not an employee of Kasei Corporation. They alleged that petitioner was hired in 1995 as one of its technical consultants on
accounting matters and act concurrently as Corporate Secretary. As technical consultant, petitioner performed her work at her own discretion without control and
supervision of Kasei Corporation. Petitioner had no daily time record and she came to the office any time she wanted and that her services were only temporary in
nature and dependent on the needs of the corporation.
The Labor Arbiter found that petitioner was illegally dismissed, NLRC affirmed with modification the Decision of the Labor Arbiter. On appeal, CA reversed the
NLRC decision. CA denied petitioner’s MR, hence, the present recourse.
ISSUES:

1. WON there was an employer-employee relationship between petitioner and private respondent; and if in the affirmative,
2. Whether petitioner was illegally dismissed.
RULING:Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not
only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing economic conditions
prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship.

There are instances when, aside from the employer’s power to control the employee, economic realities of the employment relations help provide a comprehensive
analysis of the true classification of the individual, whether as employee, independent contractor, corporate officer or some other capacity.
It is better, therefore, to adopt a two-tiered test involving: (1) the employer’s power to control; and (2) the economic realities of the activity or relationship.
The control test means that there is an employer-employee relationship when the person for whom the services are performed reserves the right to control not only
the end achieved but also the manner and means used to achieve that end.
There has to be analysis of the totality of economic circumstances of the worker. Thus, 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 employer’s
business; (2) the extent of the worker’s investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s
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. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his
continued employment in that line of business
By applying the control test, it can be said that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji
Kamura, the corporation’s Technical Consultant. She reported for work regularly and served in various capacities as Accountant, Liaison Officer, Technical
Consultant, Acting Manager and Corporate Secretary, with substantially the same job functions, that is, rendering accounting and tax services to the company and
performing functions necessary and desirable for the proper operation of the corporation such as securing business permits and other licenses over an indefinite
period of engagement. Respondent corporation had the power to control petitioner with the means and methods by which the work is to be accomplished.
Under the economic reality test, the petitioner can also be said to be an employee of respondent corporation because she had served the company for 6 yrs. before
her dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social Security
contributions from. When petitioner was designated General Manager, respondent corporation made a report to the SSS. Petitioner’s membership in the SSS
evinces the existence of an employer-employee relationship between petitioner and respondent corporation. The coverage of Social Security Law is predicated on
the existence of an employer-employee relationship.
2. The corporation constructively dismissed petitioner when it reduced her. This amounts to an illegal termination of employment, where the petitioner is entitled
to full backwages
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. Petition is GRANTED.

Makati Haberda Shery Inc., Jorge Ledesma and Cecilio Inocencio, petitioners
vs NLRC, etc., respondents.
Ponente: Fernan

Facts:
This is a petition assailing the decision of NLRC affirming the decision of Labor Arbiter finding Haberda guilty of illegal dismissal and ordering him to
reinstate the dismissed workers and in concluding that there is employer-employee relationship between workers and Haberda.

The complainants were working for Haberda as tailors, seamstress, sewers, basters and plantsadoras. Paid on a piece-rate basis with allowance when they
report for work before 9:30am everyday.(MON-SAT)

July 1984, the labor organization where the complainants are members filed a complaint for underpayment of basic wage, living allowance, non-payment of
overtime work, non-payment of holiday pay, non-payment of service incentive pay ad other benefits under wage orders.

During the pendency, Haberda dismiss the workers for the alleged job acceptance from another, which was denied by the workers and countered by filing a
complaint for illegal dismissal. Which was granted by NLRC. Hence, this petition raising the issues on:
Issues: (1) employer-employee relationship? (2) workers entitled to monetary claims? (3) were respondents illegally dismissed?

Ruling:
(1) There is employer-employee relationship. The facts at bar indubitably reveal that the most important requisite of control is present. As gleaned from the
operations of petitioner, when a customer enters into a contract with the haberdashery or its proprietor, the latter directs an employee who may be a tailor,
pattern maker, sewer or "plantsadora" to take the customer's measurements, and to sew the pants, coat or shirt as specified by the customer. Supervision is
actively manifested in all these aspects — the manner and quality of cutting, sewing and ironing.
(2) Because the workers were proven to be regular employees, they shall be entitled to minimum wages. Plus the respondents didn't appealed when the
Labor Arbiter granted the minimum wage award to the workers in the first place. But workers are not entitled to incentive pay and other benefits because
piece-rate workers are paid at fixed amount for performing work irrespective of the time consumed.
(3) There was no illegal dismissal to the two workers accused of the copied Barong Tagalog design, because when they were asked to explain to their
employer, the workers did not but instead go AWOL. Imposing disciplinary sanctions upon an employee for just and valid cause is within the rights of the
employer

SONZA VS ABSCBN
Facts: In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation (MJMDC). ABS-CBN was represented by its
corporate officers while MJMDC was represented by Sonza, as President and general manager, and Tiangco as its EVP and treasurer. Referred to in the agreement as
agent, MJMDC agreed to provide Sonza’s services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310,
000 for the first year and P317, 000 for the second and third year.

On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his program and career. After the said letter, Sonza
filed with the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries, separation pay, service incentive pay,13th month pay,
signing bonus, travel allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-employer relationship existed
between the parties. However, ABS-CBN continued to remit Sonza’s monthly talent fees but opened another account for the same purpose.

The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC affirmed the decision of the Labor Arbiter. CA also affirmed
the decision of NLRC.

Issue: Whether or not there was employer-employee relationship between the parties.

Ruling: Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of the employee, the payment of wages, the
power of dismissal and the employer’s power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called
"control test", is the most important element.

Sonza’s services to co-host its television and radio programs are because of his peculiar talents, skills and celebrity status. Independent contractors often present
themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique
skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. All the
talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. For violation of any provision of the Agreement, either party may
terminate their relationship. Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor.

The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the
hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as
well – the less control the hirer exercises, the more likely the worker is considered an independent contractor. To perform his work, SONZA only needed his skills and
talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBN’s control. ABS-CBN did not instruct SONZA how to perform
his job. ABS-CBN merely reserved the right to modify the program format and airtime schedule "for more effective programming." ABS-CBN’s sole concern was the quality
of the shows and their standing in the ratings.

Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work. A radio broadcast specialist who works under minimal
supervision is an independent contractor. Sonza’s work as television and radio program host required special skills and talent, which SONZA admittedly possesses.

ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like Sonza as independent contractors. The right of
labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-employee relationship under labor laws. Individuals with special skills,
expertise or talent enjoy the freedom to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to contract as independent
contractors. The right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an
independent contractor.

Naseco vs NLRC

FACTS:

Eugenia Credo, Chief of Property and Records of NATIONAL SERVICE CORPORATION (NASECO) filed a complaint before the Arbitration Branch of the
Ministry of Labor after having been placed in forced leave without due process. Said forced leave was a product of her alleged non-compliance of a memorandum
coming from a Finance Manager, and other past acts of misconduct as found by NASECO’s committee on Personnel Affairs.
In the Manager’s office, Credo was made to explain her side in connection with the conducts for which she is complained of. But because she failed to explain, she
was handed a Notice of Termination. Credo thus filed a supplemental complaint for illegal dismissal and lack of opportunity to be heard.

ISSUE: Was there an illegal dismissal?


RULING:Yes.

These guidelines[1] mandate that the employer furnish an employee sought to be dismissed two (2) written notices of dismissal before a termination of
employment can be legally effected. These are the:

(1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought and

(2) the subsequent notice which informs the employee of the employer’s decision to dismiss him.

The dictates of procedural due process requires that decision to dismiss can only be handed after employer has afforded employee concerned ample opportunity to
be heard and defend himself. In the case at bar, the compliance with the injunction to apprise her of the charges filed against her and to afford her a chance to
prepare her defense was dispensed in only a day. This is not effective compliance with the legal requirements.

[1] As guidelines for employers in the exercise of their power to dismiss employees for just causes, the law provides that:
“Section 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal . . .

“Section 5. Answer and Hearing. The worker may answer the allegations stated against him in the notice of dismissal within a reasonable period from receipt of
such notice. The employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires.

“Section 6. Decision to dismiss. The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons therefor.”

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