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i. GENERAL PRINCIPLES support such claim, petitioner submitted in evidence
ALBERTO NAVARRO vs.
COCA-COLA BOTTLERS PHILS.
JUNE 08,2007
On August 11, 1997, petitioner did not report to
work because of heavy rains which flooded the entire
barangay where he resided. Months after, he was given a
memorandum requiring him to explain in writing within
24 hours why no disciplinary action should be imposed
on him for his tenth absence without permission. In
response, petitioner submitted a written explanation
accompanied by a Certification from his Barangay
Captain, stating that his absence was due to heavy rains
and subsequent flooding that hit his barangay. Petitioner
further explained in a Supplemental Written Explanation
that his house was heavily flooded and that on the next
day, he immediately filed an application for leave of
absence.
Despite his compliance and explanation,
petitioner was dismissed. Petitioner filed a complaint for
illegal dismissal with the Labor Arbiter, which was
dismissed for lack of merit. On appeal, NLRC reversed the
LA’s decision.
ISSUE: Whether petitioner’s application for leave
of absence should have been allowed by the company.
HELD: The Court ruled that petitioner’s
application for leave should have been approved by the
company. His absence was due to a fortuitous event
outside petitioner’s control. A worker cannot reasonably
have expected to anticipate times of sickness nor
emergency. Hence, to require prior notice of such times
would be absurd. He can only give proper notice after the
occurrence of the event - which is what petitioner did in
this case.
The Court reiterate the State’s policy to afford full
protection to labor. When conflicting interest of labor and
capital are weighed on the scales of social justice, the
heavier influence of capital should be counterbalanced by
the compassion that the law accords the less privileged
workingman.
G & M Philippines, Inc., vs. Romil V. Cuambot
G.R. No. 162308, November 22, 2006
Ponente: Justice Romeo J. Callejo Sr.
Respondent Cuambot alleged that at the Al Waha
Workshop in Saudi where he worked for six months, he
was subjected to inhumane and unbearable working
conditions. Except for a meal allowance of 100 Riyals a
month, he was not paid his monthly salary of 1,200
Riyals. And he was required to render six (6) hours of
overtime work daily, except Friday, without overtime pay;
he was also seriously insulted by his employer every time
he demanded for his salary, and some of the letters sent
to him by his family were withheld by his employer.
He thus filed a petition for payment of the unpaid
salaries before the NLRC a complaint for unpaid wages,
withheld salaries, refund of plane ticket and repatriation
bond, which was later amended to include illegal
dismissal, claim for the unexpired portion of his
employment contract, actual, exemplary and moral
damages, and attorney’s fees.
Petitioner G & M insisted that respondent was
religiously paid his salaries as they fell due. After working
for a little over seven months, respondent pleaded with
his employer to be allowed to return home since there
were family problems he had to settle personally.
Respondent even submitted a resignation letter. To
copies of seven payslips duly authenticated by the
Philippine Labor Attaché in Riyadh, Saudi Arabia.
Respondent countered that his signatures in the
purported payslips were forged. He also stated that he was
never given a copy of the contract of employment. To
counter the allegation of forgery, petitioner claimed that
there was a great possibility that respondent had changed
his signature while abroad so that he could file a
complaint for illegal dismissal upon his return. The
argument that the stroke and handwriting on the payslips
was written by one and the same person is mere
conjecture, as respondent could have requested someone,
to prepare the resignation letter for him. Petitioner further
pointed out that respondent has different signatures, not
only in the pleadings submitted before the Labor Arbiter,
but also in respondents’ personal documents.
On January 30, 1997, the Labor Arbiter ruled in
favor of respondent Cuambot, finding unreliable the G &
M's evidence of Cuambot's alleged signature in the
payslips which was similar to the handwritings in the
payslips and the handwritings in the purported
resignation letter of the Cuambot. In an appeal to the
NLRC, the latter remanded the case to its origin for
referral to a government agency that can conduct
calligraphy examination on the questioned documents.
The case was then re-raffled to another Labor
Arbiter, and this time, the complaint was dismissed for
lack of merit. The new Labor Arbiter said the respondent
failed to substantiate his claim of poor working conditions
and long hours of employment. The fact that he executed
a handwritten resignation letter was enough evidence of
the fact that he voluntarily resigned from work.
Respondent also failed to submit any evidence to refute
the payslips duly signed and authenticated by the labor
attaché in Saudi Arabia, inasmuch as their probative
value cannot be impugned by mere self-serving
allegations. The Labor Arbiter concluded that as between
the oral allegations of workers that they were not paid
monetary benefits and the documentary evidence
presented by employer, the latter should prevail.
Respondent appealed the decision to the NLRC,
alleging that the Labor Arbiter failed to consider the
genuineness of the signature which appears in the
purported resignation as well as those that appeared in
the seven payslips. He insisted that these documents
should have been endorsed to the National Bureau of
Investigation Questioned Documents Division or the
Philippine National Police Crime Laboratory for
calligraphy examination. The NLRC dismissed the appeal
for lack of merit.
On a petition for certiorari before the CA, the
latter reversed the ruling of the NLRC. According to the
appellate court, among others, a visual examination of the
questioned signatures would instantly reveal significant
differences in the handwriting.
ISSUE: Whether or not the employee voluntarily resigned
from employment or was illegally dismissed?
RULING: We find in respondent’s favor. That the
petitioner failed to submit the original copies of the
payslips and the resignation letter raises doubts as to the
veracity of its claim that they were actually signed by the
respondent.
Also, as correctly noted by the CA, the opinions of
handwriting experts, although helpful in the examination
of forged documents because of the technical procedure
involved in the analysis, are not binding upon the courts.
Indeed, the rule is that all doubts in the

implementation and the interpretation of the Labor Code
shall be resolved in favor of labor, in order to give effect to
the policy of the State to “afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and
regulate the relations between workers and employers,”
and to “assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and
humane conditions of work.”
BITOY JAVIER vs. FLY ACE CORORATION /
FLORDELYN CASTILLO
G.R. No. 192558, February 15, 2012
Ponente: Justice Jose C. Mendoza
On May 23, 2008, Javier filed a complaint before
the NLRC for underpayment of salaries and other labor
standard benefits. He alleged that he was an employee of
Fly Ace since September 2007, performing various tasks
at the respondents warehouse and accompanying the
company delivery vehicle, as pahinante; that on May 6,
2008, he reported for work but he was no longer allowed
to enter the company premises by the security guard upon
the instruction of Ruben Ong (Mr. Ong), his superior; that
after several minutes of begging to the guard to allow him
to enter, he saw Ong whom he approached and asked why
he was being barred from entering the premises; that Ong
replied by saying, Tanungin mo anak mo; that he
discovered that Ong had been courting his daughter
Annalyn after the two met at a fiesta celebration in
Malabon City; that Annalyn tried to talk to Ong and
convince him to spare her father from trouble but he
refused to accede; that thereafter, Javier was terminated
from his employment without notice; and that he was
neither given the opportunity to refute the cause/s of his
dismissal from work.
For its part, Fly Ace averred that it was engaged
in the business of importation and sales of groceries.
Sometime in December 2007, Javier was contracted by its
employee, Mr. Ong, as extra helper on a pakyaw basis at
an agreed rate of ₱300.00 per trip, which was later
increased to ₱325.00 in January 2008. Mr. Ong
contracted Javier roughly 5 to 6 times only in a month
whenever the vehicle of its contracted hauler, Milmar
Hauling Services, was not available. On April 30, 2008,
Fly Ace no longer needed the services of Javier. Denying
that he was their employee, Fly Ace insisted that there
was no illegal dismissal. Fly Ace submitted a copy of its
agreement with Milmar Hauling Services and copies of
acknowledgment receipts evidencing payment to Javier
for his contracted services bearing the words, daily
manpower (pakyaw/piece rate pay) and the latters
signatures/initials.
On November 28, 2008, the LA dismissed the
complaint for lack of merit on the ground that Javier failed
to prove by substantial evidence that he was a regular
employee of Fly Ace.
On appeal with the NLRC, Javier was favored. It
ruled that the LA skirted the argument of Javier and
immediately concluded that he was not a regular
employee simply because he failed to present proof.
On March 18, 2010, the CA annulled the NLRC
ruling and reinstated the dismissal of Javier’s complaint
as ordered by the LA. According to the CA:
In an illegal dismissal case the onus
probandi rests on the employer to prove that its dismissal
was for a valid cause. However, before a case for illegal
dismissal can prosper, an employer-employee
relationship must first be established and it is incumbent
upon private respondent to prove the employee-employer
relationship by substantial evidence.
The CA likewise declared that the facts alleged by
Javier did not pass the control test and since no
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substantial evidence was presented to establish an
employer-employee relationship, the case for illegal
dismissal could not prosper. Hence, this petition.
ISSUE: Whether or Not CA erred in requiring Javier to
present substantial evidence to prove that he is an
employee of Fly Ace.
RULING: NO. The Court affirms the assailed CA decision.
As the records bear out, the LA and the CA found Javier’s
claim of employment with Fly Ace as wanting and
deficient. The Court is constrained to agree. Although
Section 10, Rule VII of the New Rules of Procedure of the
NLRC allows a relaxation of the rules of procedure and
evidence in labor cases, this rule of liberality does not
mean a complete dispensation of proof. Labor officials are
enjoined to use reasonable means to ascertain the facts
speedily and objectively with little regard to technicalities
or formalities but nowhere in the rules are they provided
a license to completely discount evidence, or the lack of it.
The quantum of proof required, however, must still be
satisfied. Hence, when confronted with conflicting
versions on factual matters, it is for them in the exercise
of discretion to determine which party deserves credence
on the basis of evidence received, subject only to the
requirement that their decision must be supported by
substantial evidence.
Javier’s allegations did not establish that his
relationship with Fly Ace had the attributes of an
employer-employee relationship on the basis of the above-
mentioned four-fold test. all that Javier laid down were
bare allegations without corroborative proof.
While the Constitution is committed to the policy
of social justice and the protection of the working class, it
should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also
has its rights which are entitled to respect and
enforcement in the interest of simple fair play. Out of its
concern for the less privileged in life, the Court has
inclined, more often than not, toward the worker and
upheld his cause in his conflicts with the employer. Such
favoritism, however, has not blinded the Court to the rule
that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the
applicable law and doctrine.
WHEREFORE, the petition is DENIED.
The March 18, 2010 Decision of the Court of Appeals and
its June 7, 2010 Resolution, in CA-G.R. SP No. 109975,
are hereby AFFIRMED.
II. EMPLOYER-EMPLOYEE RELATIONSHIP
GREAT PACIFIC LIFE ASSURANCE CORPORATION
vs. HONORATO JUDICO and NATIONAL LABOR
RELATIONS COMMISSION
G.R. No. 73887, December 21, 1989
Ponente: Justice Edgardo L. Paras
FACTS: The records of the case show that
Honorato Judico filed a complaint for illegal dismissal
against Grepalife and prayed for award of money claims
consisting of separation pay, unpaid salary and 13th
month pay, refund of cash bond, moral and exemplary
damages and attorney's fees.
Labor Arbiter dismissed the complaint on the
ground that EER did not exist between the parties. On
Appeal, NLRC reversed the decision of the Labor Arbiter
ruling that Judico is a regular employee as defined under
Art. 281 of the Labor Code. Hence, this petition.

Petitioner assails the findings of the NLRC that
private respondent is an employee of the former.
Petitioner argues that Judico's compensation was not
based on any fixed number of hours he was required to
devote to the service of petitioner company but rather it
was the production or result of his efforts or his work that
was being compensated and that the so-called allowance
for the first thirteen weeks that Judico worked as debit
agent, cannot be construed as salary but as a subsidy or
a way of assistance for transportation and meal expenses
of a new debit agent during the initial period of his
training which was fixed for thirteen (13) weeks. Stated
otherwise, petitioner contends that Judico's
compensation, in the form of commissions and bonuses,
was based on actual production, (insurance plans sold
and premium collections).
Said contentions of petitioner are strongly
rejected by private respondent. He maintains that he
received a definite amount as his Wage known as "sales
reserve" the failure to maintain the same would bring him
back to a beginner's employment with a fixed weekly wage
of P 200.00 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 canvassing and making
regular reports, he was burdened with the job of collection
and to make regular weekly report thereto for which an
anemic performance would mean dismissal. He earned
out of his faithful and productive service, a promotion to
Zone Supervisor with additional supervisor's allowance, (a
definite or fixed amount of P110.00) that he was
dismissed primarily because of anemic performance and
not because of the termination of the contract of agency
substantiate the fact that he was indeed an employee of
the petitioner and not an insurance agent in the ordinary
meaning of the term.
ISSUE: Whether or not employer-employee relationship
existed between petitioner and private respondent?
RULING: YES. The fact that private respondent Judico
was an agent of the petitioner is unquestionable. But, as
We have held in Investment Planning Corp. vs. SSS, 21
SCRA 294, an insurance company may have two classes
of agents who sell its insurance policies: (1) salaried
employees who keep definite hours and work under the
control and supervision of the company; and (2) registered
representatives who work on commission basis. The
agents who belong to the second category are not required
to report for work at anytime, they do not have to devote
their time exclusively to or work solely for the company
since the time and the effort they spend in their work
depend entirely upon their own will and initiative; they are
not required to account for their time nor submit a report
of their activities; they shoulder their own selling
expenses as well as transportation; and they are paid their
commission based on a certain percentage of their sales.
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.
Applying the aforementioned test to the case at
bar, we can readily see that the element of control by the
petitioner on Judico was very much present for he was
required to make regular report to the company regarding
these duties, and for which an anemic performance would
mean a dismissal. The undisputed facts show that he was
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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.
Premises considered, the appealed decision is hereby
AFFIRMED in toto.
GREGORIO TONGKO vs.
THE MANUFACTURERS LIFE INSURANCE CO.
JANUARY 25, 2011
Petitioner was an agent of Manulife. His duties
consisted of canvassing for application for group policies
and other products of the company. Subsequently,
petitioner was named unit manager, branch manager,
and regional sales manager. But when he failed to comply
with the policies of Manulife, his Agency agreement was
terminated.
Petitioner filed a complaint with the NLRC against
Manulife for illegal dismissal. In a bid to establish an
employer-employee relationship, petitioner alleged that
De Dios, the president and chief executive officer of
Manulife gave him directives on how to manage his area
of responsibility thru a letter dated November 2001. The
labor arbiter decreed that no employer-employee
relationship existed between the parties. However, the
NLRC reversed said decision. When the case went to the
Court of Appeals, it sustained the Labor Arbiter’s decision
stating that Manulife did not exercise control over
petitioner that would render the latter an employee of
Manulife.
ISSUE: Whether or not an employer-employee
relationship exist between the parties
HELD: NO. In the case at bar, the absence of
evidence showing Manulife’s control over petitioner’s
contractual duties points to the absence of employer-
employee relationship. In the context of the established
evidence, petitioner remained an agent all along; although
his subsequent duties made him a lead agent with
leadership role, he was nevertheless only an agent whose
basic contract yields no evidence of means and manner of
control.
Petitioner clearly failed to substantiate his claim
of employment relationship by the quantum of evidence
the Labor Code requires. Petitioner’s failure to comply
with the guidelines of De Dios’ letter, as a ground for
termination of petitioner’s agency, is a matter that the
labor tribunal cannot rule upon in the absence of
employer-employee relationship.
ANGELINA FRANCISCO vs.
NATIONAL LABOR RELATIONS COMMISSION
AUGUST 31, 2006
Petitioner was hired by Kasei Corporation during
its incorporation stage. She was designated as an
Accountant and Corporate Secretary and was assigned to
handle all the accounting needs of the company. She was
also designated as Liaison Officer to secure business
permits, construction permits and other licenses for
initial operation of the company.
In 1996, petitioner was designated Acting
Manager. She was assigned to handle recruitment of all
employees and perform management administration
functions. For five years, petitioner performed the duties
of Acting manager. January of 2001, petitioner was

replaced by Liza Fuentes. Petitioner alleged that she was
required to sign a prepared resolution for her replacement
but she was assured that she would still be connected
with Kasei.
Thereafter, Kasei reduced her salary from
P27,500 to P22,500. Petitioner was not paid her mid-year
bonus allegedly because the company was not earning
well. October of the same year, petitioner did not receive
her salary. Petitioner asked for her salary but was
informed that she is no longer connected with the
company. Petitioner filed an action for constructive
dismissal before the labor arbiter.
Private respondent averred that petitioner is not
an employee of Kasei. They alleged that petitioner was
hired as of of its technical consultants and as such
petitioner performed her work at her own discretion
without control and supervision of the Kasei. That the
company never interfered with her work except that from
time to time, the management would ask her opinion on
matters relating to her profession.
The Labor Arbiter found that petitioner was
illegally dismissed. The NLRC affirmed said decision with
modifications. On appeal, the CA reversed the NLRC’s
decision.
ISSUE: Whether there was an ER-EE relationship
between petitioner and Kasei
HELD: YES. In resolving the issue in the this
case, the court applied the two-tiered test. This test
involves: 1.) The putative employer’s 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. The test would provide a framework of
analysis, which would take into consideration the totality
of circumstances surrounding the true nature of
relationship. This is especially appropriate in this case
where there is no written agreement or terms of reference
to base the relationship; and due to the complexity of the
relationship based on various positions and
responsibilities given to the worker.
By applying the control test, there is no doubt
that petitioner is an employee of Kasei because she was
under the direct control and supervision 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. Under the broader economic reality
test, petitioner is an employee of the corporation because
she served the company for six years before her dismissal,
receiving check vouchers indicating her salaries and other
benefits. It is therefore apparent that petitioner is
economically dependent on respondent for her continued
employment in the latter’s line of business.
JOSE Y. SONZA vs. ABS-CBN BROADCASTING
CORPORATION
G.R. No. 138051, June 10, 2004
Ponente: Justice Antonio T. Carpio
FACTS: On 30 April 1996, SONZA filed a
complaint against ABS-CBN before the Department of
Labor and Employment, National Capital Region
in Quezon City. SONZA complained that ABS-CBN did not
pay his salaries, separation pay, service incentive leave
pay, 13th month pay, signing bonus, travel allowance and
amounts due under the Employees Stock Option Plan
(ESOP).
On 10 July 1996, ABS-CBN filed a Motion to
Dismiss on the ground that no employer-employee
relationship existed between the parties. SONZA filed an
Opposition to the motion on 19 July 1996.
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The Labor Arbiter rendered his Decision dated 8
July 1997 dismissing the complaint for lack of
jurisdiction.
SONZA appealed to the NLRC. On 24 February
1998, the NLRC rendered a Decision affirming the Labor
Arbiters decision. SONZA filed a motion for
reconsideration, which the NLRC denied in its Resolution
dated 3 July 1998.
On 6 October 1998, SONZA filed a special civil
action for certiorari before the Court of Appeals assailing
the decision and resolution of the NLRC. On 26 March
1999, the Court of Appeals rendered a Decision
dismissing the case.
Hence, this petition. SONZA contends that the
Labor Arbiter has jurisdiction over the case because he
was an employee of ABS-CBN. On the other hand, ABS-
CBN insists that the Labor Arbiter has no jurisdiction
because SONZA was an independent contractor.
ISSUE: Whether or Not Employer-Employee Relationship
existed between the parties.
RULING: NO. 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.
First, SONZA contends that ABS-CBN exercised
control over the means and methods of his work.
SONZAs argument is misplaced. ABS-CBN
engaged SONZAs services specifically to co-host the Mel
& Jay programs. ABS-CBN did not assign any other work
to SONZA. 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-CBNs control. SONZA did not have to render
eight hours of work per day. The Agreement required
SONZA to attend only rehearsals and tapings of the
shows, as well as pre- and post-production staff meetings.
ABS-CBN could not dictate the contents of SONZAs
script. However, the Agreement prohibited SONZA from
criticizing in his shows ABS-CBN or its interests. The clear
implication is that SONZA had a free hand on what to say
or discuss in his shows provided he did not attack ABS-
CBN or its interests.
Second, SONZA urges us to rule that he was ABS-
CBNs employee because ABS-CBN subjected him to its
rules and standards of performance. SONZA claims that
this indicates ABS-CBNs control not only [over] his
manner of work but also the quality of his work.
In any event, not all rules imposed by the hiring
party on the hired party indicate that the latter is an
employee of the former. In this case, SONZA failed to show
that these rules controlled his performance. We find that
these general rules are merely guidelines towards the
achievement of the mutually desired result, which are top-
rating television and radio programs that comply with
standards of the industry.
Lastly, SONZA insists that the exclusivity clause
in the Agreement is the most extreme form of control
which ABS-CBN exercised over him.
This argument is futile. Being an exclusive talent
does not by itself mean that SONZA is an employee of
ABS-CBN. Even an independent contractor can validly
provide his services exclusively to the hiring party. In the

broadcast industry, exclusivity is not necessarily the
same as control. This practice is not designed to control
the means and methods of work of the talent, but simply
to protect the investment of the broadcast station.
SONZA seeks the recovery of allegedly unpaid
talent fees, 13th month pay, separation pay, service
incentive leave, signing bonus, travel allowance, and
amounts due under the Employee Stock Option Plan. We
agree with the findings of the Labor Arbiter and the Court
of Appeals that SONZAs claims are all based on the May
1994 Agreement and stock option plan, and not on the
Labor Code. Clearly, the present case does not call for an
application of the Labor Code provisions but an
interpretation and implementation of the May 1994
Agreement. In effect, SONZAs cause of action is for breach
of contract which is intrinsically a civil dispute cognizable
by the regular courts.
WHEREFORE, we DENY the petition. The
assailed Decision of the Court of Appeals dated 26 March
1999 in CA-G.R. SP No. 49190 is AFFIRMED. Costs
against petitioner.
THELMA DUMPIT-MURILLO vs.
COURT OF APPEALS
JUNE 08, 2007
Petitioner was employed as a newscaster and co-
anchor for Balitaan-balita by the Associated Broadcasting
Company (ABC). The contract was for a period of 3
months. On September 1999, after four years of repeated
renewals, petitioner’s talent contract expired. No contract
was again entered into. Petitioner then wrote a letter
demanding reinstatement to her former position, payment
of backwages and services. ABC replied that a check
covering petitioner’s talent fee had been processed and
prepared, but the other claims of petitioner had no basis
in fact or in law.
Petitioner filed a complaint for illegal constructive
dismissal. The Labor Arbiter ruled in favor of ABC. The
NLRC however, reversed the decision and ruled that an
employer-employee relationship existed between the
parties and that petitioner is a regular employee illegally
dismissed. Thereafter, the appellate court ruled that the
NLRC committed grave abuse of discretion. The appellate
court ruled that petitioner should not be allowed ro renege
from the stipulations she had voluntarily and knowingly
executed by invoking the security of tenure under the
Code.
ISSUE: Whether or not en employer-employee
relationship existed between the parties and that
petitioner was illegally dismissed.
HELD: The court ruled that petitioner was a
regular employee under the contemplation of the law. The
practice of having fixed term contracts in the industry
does not automatically make all talent contracts valid and
compliant with the labor law.
In Manila Water Company vs. Pena, the elements
to determine the existence of an employer-employee
relationship are: 1.) selection and engagement of
employee; 2.) payment of wages; 3.) power of dismissal
and 4.) employers power of control. The duties of
petitioner as enumerated in her employment contract
indicate that ABC had control over her work. Aside form
control, ABC also dictated the work assignments and
payment of petitioner’s wages. ABC also had the power to
dismiss her. All these being present, clearly there existed
an employer-employee relationship between the parties.
Concerning regular employment, the Law
provides for two kinds of employees. (1) those engaged to
perform activities which are usually necessary or
desirable to the usual business or trade of the employer,
(2) those who have rendered at least one year of service,
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whether continuous broken. The Petitioners work was
necessary or desirable in the usual business or trade of
the employer which includes its participation in the
Government's news and public information
dissemination. In addition, her work was continuous for
four years. Her contract was renewed for over 15 times.
This repetitive renewal was indicative of Petitioners works
desirability and necessity. Hence it is concluded that she
is a regular employees
FUJI TELEVISION NETWORK INCORPORATED, vs.
ARLENE ESPIRITU
G.R. No. 204944-45, December 3, 2014
Ponente: Justice Mario Victor F. Leonen
FACTS: Arlene S. Espiritu (Arlene) was engaged
by Fuji Television Network, Inc. (Fuji) as a news
correspondent/producer tasked to report Philippine news
to Fuji through its Manila Bureau field office. The
employment contract was initially for one year, but was
successively renewed on a yearly basis with salary
adjustments upon every renewal.
In January 2009, Arlene was diagnosed with
lung cancer. She informed Fuji about her condition, and
the Chief of News Agency of Fuji, Yoshiki Aoki, informed
the former that the company had a problem with renewing
her contract considering her condition. Arlene insisted
she was still fit to work as certified by her attending
physician.
After a series of verbal and written
communications, Arlene and Fuji signed a non-renewal
contract. In consideration thereof, Arlene acknowledged
the receipt of the total amount of her salary from March-
May 2009, year-end bonus, mid-year bonus and
separation pay. However, Arlene executed the non-
renewal contract under protest.
Arlene filed a complaint for illegal dismissal with
the NCR Arbitration Branch of the NLRC. Labor Arbiter
dismissed the complaint and held that Arlene was not a
regular employee but an independent contractor. On
appeal, the NLRC reversed the Labor Arbiter’s decision
and ruled that Arlene was a regular employee.
On Appeal, the Court of Appeals affirmed that
Arlene was a regular employee, engaged to perform work
that was necessary or desirable in the business of Fuji,
and the successive renewals of her fixed-term contract
resulted in regular employment. The case of Sonza does
not apply in the case because Arlene was not contracted
on account of a special talent or skill. Arlene was illegally
dismissed because Fuji failed to comply with the
requirements of substantive and procedural due process.
Arlene, in fact, signed the non-renewal contract under
protest as she was left without a choice
Fuji filed a petition for review on certiorari under
Rule 45 before the Supreme Court, alleging that Arlene
was hired as an independent contractor; that Fuji had no
control over her work; that the employment contracts
were renewed upon Arlene’s insistence; that there was no
illegal dismissal because she freely agreed not to renew
her fixed-term contract as evidenced by her email
correspondences.
ISSUE: Whether or Not Arlene is an independent
contractor.
RULING: NO. Arlene is a regular employee who has been
illegally dismissed. To determine the status of
employment, the existence of employer-employee
relationship must first be settled with the use of the four-
fold test, especially the qualifications for the power to
control.
The distinction is in this guise: Rules that merely
serve as guidelines towards the achievement of a mutually

desired result without dictating the means or methods to
be employed creates no employer-employee relationship;
whereas those that control or fix the methodology and
bind or restrict the party hired to the use of such means
creates the relationship.
In application, Arlene was hired by Fuji as a news
producer, but there was no evidence that she was hired
for her unique skills that would distinguish her from
ordinary employees. Her monthly salary appeared to be a
substantial sum. Fuji had the power to dismiss Arlene, as
provided for in her employment contract. The contract
also indicated that Fuji had control over her work as she
was required to report for 8 hours from Monday to Friday.
Fuji gave her instructions on what to report and even her
mode of transportation in carrying out her functions was
controlled. Therefore, Arlene could not be an independent
contractor.
She also had to report for work in Fuji’s office in
Manila from Mondays to Fridays, eight per day. She had
no equipment and had to use the facilities of Fuji to
accomplish her tasks. The successive renewals of her
contract indicated the necessity and desirability of her
work in the usual course of Fuji’s business. Because of
this, Arlene had become a regular employee with the right
to security of tenure.
WHEREFORE, the petition is DENIED. The
assailed Court of Appeals decision dated June 25, 2012 is
AFFIRMED with the modification that backwages shall be
computed from June 2009. Legal interest shall be
computed at the rate of 6% per annum of the total
monetary award from date of finality of this decision until
full satisfaction.
NELSON BEGINO ETAL. vs.
ABS-CBN CORPORATIONS
APRIL 20, 2015
Respondent engaged the services of petitioners as
cameraman, editors and reporters for TV broadcasting.
Their engagements were covered by Talent Contracts that
stipulated employment periods from three months to one
year and were regularly renewed over the years. They were
given project assignment form that described the duration
of a particular project, its budget and technical
requirement.
Although their contracts stated that “nothing
therein shall be deemed or construed to establish an er-ee
relationship”, they had to perform their work in
accordance with respondent’s professional standards,
and were barred from engaging in similar work for a
person or entity directly in competition of the company or
promoting any product or services without its prior
consent. Their remuneration was described as talent fees
and deducted a contractor's tax.
Claiming a regular employee status, they filed a
complaint before the NLRC against respondent for
regularization, underpayment of overtime pay, holiday
pay, 13th month pay, services incentive leave pay and
damages.
Respondent on the other hand countered that
petitioners were independent contractor or talents who
informed of the company of their availability and were
required to accomplish talent information forms to
facilitate their engagement on designated project days.
Furthermore, since they were engaged on the basis of
their skills or expertise, the degree of control on them was
limited to the imposition of general guidelines on conduct
and performance, simply for the purpose of upholding the
standard of the company.
ISSUE: Whether or not petitioners and ABS-CBN
had an employer-employee relationship.
6
HELD: YES. The court finds that,
notwithstanding the nomenclature of their talent
contracts or project assignment form, petitioners are
regular employees of the company. It has been ruled that
the test to determine whether employment is regular or
not is the reasonable connection between the activity
performed by the employee in relation to the business or
trade of the employer. The presumption is that when
the work done is an integral part of the regular
business of the employer and when the worker does
not furnish an independent business or professional
services, such work is a regular employment of such
employee and not an independent contractor.
As cameraman/editors and reporters, petitioners were
undoubtedly performing functions necessary and
essential to the company’s business of broadcasting
television and radio content. Furthermore, respondents’
repeated hiring of petitioners for its long-running news
program positively indicates that the latter were regular
employees. - If the employee has been performing the job
for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the
repeated or continuing performance as sufficient evidence
of the necessity, if not indispensability of that activity in
the business.
CENTURY PROPERTIES, INC. vs.
EDWIN BABIANO and EMMA CONCEPCION
JULY 05, 2016
Babiano was hired by petitioner as Director of
Sales, and was eventually appointed as Vice President for
Sales. His employment contract contained, among others,
a “Confidentiality of Documents and Non-Compete
Clause’ which barred him from disclosing confidential
information, and from working in any business enterprise
that is in direct competition with petitioner, while he is
employed and for a period of one year from the date of his
resignation and any breach thereof, his compensation,
including commissions and incentives will be forfeited.
During the same period, Concepcion was initially
hired as Sales Agent by petitioner and was promoted as
Project Director. She signed a employment contract
denominated as “Contract of Agency for Project Director”.
Notably, it was stipulated that no employer-employee
relationship exists between the parties.
After receiving reports that Babiano provided a
competitor with information regarding petitioner’s
marketing strategies, petitioner sent Babiano a Notice to
explain. Days after, Babiano tendered his resignation. On
the other hand, Concepcion resigned as petitioner’s
project director.
Respondent filed a complaint for nonpayment of
commission and damages against petitioner before the
NLRC. Petitioner maintained that Babiano is merely its
agent and it validly withheld Babiano’s commission,
considering that they were deemed forfeited for violating
their contract. On Concepcion’s money claims, petitioner
asserted that NLRC had no jurisdiction because there was
no er-ee relationship.
ISSUE: Whether or not petitioner is liable for the
unpaid commissions of respondents
HELD: The rule is that where the language of a
contract is plain and unambiguous, the contract must be
taken to mean that which, on its face, it purports to mean,
unless some good reason can be assigned to show that
the words should be understood in a different sense. The
“Confidentiality of Documents and Non-Compete Clause”
under Babiano’s contract is not only clear and
unambiguous, it also expressly provided no uncertain
terms. The contracting parties indisputably wanted said

clause to be effective even during the existence of er-ee
relationship between the parties. Thus, Babiano’s actions
clearly is in violation of his contract, thus, justifying the
forfeiture of his unpaid commissions.
On the case of Concepcion, the court guided by
the parameters of the four-fold test ruled that Concepcion
was an employee of petitioner. Besides, while the
employment agreement was denominated as a “Contract
of Agency for Project Director”, it should be stressed that
the existence of er-ee relationship could not be negated by
the mere expedient of repudiating it in a contract.
Employment status is defined and prescribed by law, and
not by the parties.
JESUS G. REYES vs. GLAUCOMA RESEARCH
FOUNDATION INC., EYE REFERRAL CENTER and
MANUEL B. AGULTO
G.R. No. 189255, June 17, 2015
Ponente: Justice Diosdado M. Peralta
FACTS: The instant petition arose from a
complaint for illegal dismissal filed by petitioner against
respondents with the NLRC, National Capital Region,
Quezon City. Petitioner alleged that: on August 1, 2003,
he was hired by respondent corporation as administrator
of the latter's Eye Referral Center (ERC) up to his
dismissal on April 21, 2005.
On their part, respondents contended that: there
is no employer-employee relationship between them
because respondents had no control over petitioner in
terms of working hours as he reports for work at anytime
of the day and leaves as he pleases; respondents also had
no control as to the manner in which he performs his
alleged duties as consultant; petitioner was not dismissed
as he was the one who voluntarily severed his relations
with respondents.
The LA assigned to the case dismissed the
petitioner's complaint. The LA held, that petitioner failed
to establish that the elements of an employer-employee
relationship existed between him and respondents
because he was unable to show that he was, in fact,
appointed as administrator of the ERC and received
salaries as such; his actions were neither supervised nor
controlled by the management of the ERC; petitioner,
likewise, did not observe working hours by reporting for
work and leaving therefrom as he pleased.
On appeal, the NLRC reversed and set aside the
Decision of the LA. The NLRC declared petitioner as
respondents' employee, that he was illegally dismissed.
The NLRC held that the basis upon which the conclusion
of the LA was drawn lacked support; that it was
incumbent for respondents to discharge the burden of
proving that petitioner's dismissal was for cause and
effected after due process was observed; and, that
respondents failed to discharge this burden.
Respondents filed a motion for reconsideration,
but it was denied by the NLRC. Respondents then filed a
Petition for Certiorari with the CA. The CA annulled and
set aside the judgment of the NLRC and reinstated the
Decision of the LA. The CA held that the LA was correct in
ruling that, under the control test and the economic
reality test, no employer-employee relationship existed
between respondents and petitioner. Petitioner filed a
motion for reconsideration, but the CA denied it. Hence,
the present petition
ISSUE: Whether or Not Reyes is considered an employee
of respondents
RULING: NO. The court ruled that before a case for
illegal dismissal can prosper, an employer-employee
relationship must first be established by substantial
evidence. Etched in an unending stream of cases are four
7
standards in determining the existence of an employer-
employee relationship, namely: (a) the manner of selection
and engagement of the putative employee; (b) the mode of
payment of wages; (c) the presence or absence of power of
dismissal; and, (d) the presence or absence of control of
the putative employee’s conduct. Most determinative
among these factors is the so-called "control test."
In the present case, petitioner contends that, as
evidence of respondents' supposed control over him, the
organizational plans he has drawn were subject to the
approval of respondent corporation's Board of Trustees.
However, the Court agrees with the disquisition of the CA
on this matter, to wit: [Respondents'] power to approve or
reject the organizational plans drawn by [petitioner]
cannot be the control contemplated in the "control test."
It is but logical that one who commissions another to do
a piece of work should have the right to accept or reject
the product. The important factor to consider in the
"control test" is still the element of control over how
the work itself is done, not just the end result thereof.
Aside from the control test, the Supreme Court
has also used the economic reality test in determining
whether an employer-employee relationship exists
between the parties. Under this test, the economic
realities prevailing within the activity or between the
parties are examined, taking into consideration the
totality of circumstances surrounding the true nature of
the relationship between the parties. In our jurisdiction,
the benchmark of economic reality in analyzing possible
employment relationships for purposes of applying the
Labor Code ought to be the economic dependence of the
worker on his employer. In the instant case, as shown by
the resume of petitioner, he concurrently held
consultancy positions with the Manila International
Airport Authority (from 04 March 2001 to September 2003
and from 01 November 2004 up to the present) and the
Anti-Terrorist Task Force for Aviation and Air
Transportation Sector (from 16 April 2004 to 30 June
2004) during his stint with the Eye Referral Center (from
01 August 2003 to 29 April 2005). Accordingly, it cannot
be said that the petitioner was wholly dependent on
respondent company.
As a final point, it bears to reiterate that while the
Constitution is committed to the policy of social justice
and the protection of the working class, it should not be
supposed that every labor dispute will be
automatically decided in favor of labor. Management
also has its rights which are entitled to respect and
enforcement in the interest of simple fair play. Out of its
concern for the less privileged in life, the Court has
inclined, more often than not, toward the worker and
upheld his cause in his conflicts with the employer. Such
favoritism, however, has not blinded the Court to the rule
that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the
applicable law and doctrine.
WHEREFORE, the instant petition is DENIED.
The Decision and Resolution of the Court of Appeals,
dated April 20, 2009 and August 25, 2009, respectively,
in CA-G.R. SP No. 104261, are AFFIRMED. SO
ORDERED.
SOUTH EAST INTERNATIONAL RATTAN, INC. and
ESTANISLAO AGBAY vs.
JESUS COMING
MARCH 12, 2014
Respondent filed a complaint for illegal dismissal
against petitioner. Respondent alleged that he was hired
by petitioners as Sizing Machine Operator. Initially, his
compensation was on pakiao basis but later on was fixed
at P150/day which was paid weekly. That in 1990,
without any reason, his employment was interrupted as
he was told to resume work in two months’ time. After two

months he reported back to work. However, despite being
an employee for several years, respondent was dismissed
from work without lawful cause.
On their part, petitioners denied having hired the
respondent, and that respondent actually worked for
petitioner’s furniture supplier. They stressed that
respondent was not included in the list of employees
submitted to the SSS. Moreover, respondent’s brother
executed an affidavit in support of petitioner’s position
and Faustino Apondar issued a notarized certification
that respondent worked for them instead. Respondent on
his part, submitted five affidavits signed by his co-workers
stating that he was one of petitioner’s employee.
ISSUE: Whether or not ER-EE relationship exists
between the parties.
HELD: The court affirms the ruling of the
appellate court which gives more credence to the
declarations of the five former employees of petitioners
that respondent was their co-worker. Furthermore, the
court held that the fact that a worker was not reported as
an employee to the SSS is not a conclusive proof of the
absence of er-ee relationship. Nor does the fact that
respondent’s name does not appear in the payrolls negate
the existence of the said relationship.
In any controversy between a laborer and his
master, doubts reasonably arising from evidence are
resolved in favor of the laborer.
OSCAR VILLAMARIA JR. vs. COURT OF
APPEALS and JERRY V. BUSTAMANTE
G.R. No. 165881, April 19, 2006
Ponente: Justice Romeo J. Callejo Sr.
FACTS: Petitioner Oscar Villamaria, Jr. was the
owner of Villamaria Motors, a sole proprietorship engaged
in assembling passenger jeepneys with a public utility
franchise to operate along the Baclaran-Sucat route. By
1995, Villamaria stopped assembling jeepneys and
retained only nine, four of which he operated by
employing drivers on a boundary basis. One of those
drivers was respondent Bustamante who drove the
jeepney with Plate No. PVU-660. Bustamante
remitted P450.00 a day to Villamaria as boundary and
kept the residue of his daily earnings as compensation for
driving the vehicle. In August 1997, Villamaria verbally
agreed to sell the jeepney to Bustamante under the
boundary-hulog scheme, where Bustamante would remit
to Villarama P550.00 a day for a period of four years;
Bustamante would then become the owner of the vehicle
and continue to drive the same under Villamarias
franchise. It was also agreed that Bustamante would
make a downpayment of P10,000.00.
Under the Kasunduan, Bustamante was
prohibited from driving the vehicle without prior authority
from Villamaria Motors. Thus, Bustamante was
authorized to operate the vehicle to transport passengers
only and not for other purposes. He was also required to
display an identification card in front of the windshield of
the vehicle; in case of failure to do so, any fine that may
be imposed by government authorities would be charged
against his account. Bustamante further obliged himself
to pay for the cost of replacing any parts of the vehicle
that would be lost or damaged due to his negligence. In
case the vehicle sustained serious damage, Bustamante
was obliged to notify Villamaria Motors before
commencing repairs. Bustamante was not allowed to
wear slippers, short pants or undershirts while
driving. He was required to be polite and respectful
8
towards the passengers. He was also obliged to notify
Villamaria Motors in case the vehicle was leased for two
or more days and was required to attend any meetings
which may be called from time to time. Aside from the
boundary-hulog, Bustamante was also obliged to pay for
the annual registration fees of the vehicle and the
premium for the vehicles comprehensive insurance.
Bustamante promised to strictly comply with the rules
and regulations imposed by Villamaria for the upkeep and
maintenance of the jeepney.
In 1999, Bustamante failed to pay the boundary-
hulog. This prompted Villamaria to serve a Paalala,
reminding them that under the Kasunduan, failure to pay
the daily boundary-hulog for one week, would mean their
respective jeepneys would be returned to him without any
complaints. He warned the drivers that
the Kasunduan would henceforth be strictly enforced and
urged them to comply with their obligation to avoid
litigation.On July 24, 2000, Villamaria took back the
jeepney driven by Bustamante and barred the latter from
driving the vehicle.
On August 15, 2000, Bustamante filed a
Complaint for Illegal Dismissal against Villamaria.
Villamaria on the other hand argued that Bustamante
was not illegally dismissed since the Kasunduan executed
on August 7, 1997 transformed the employer-employee
relationship into that of vendor-vendee. Hence, the
spouses concluded, there was no legal basis to hold them
liable for illegal dismissal. They prayed that the case be
dismissed for lack of jurisdiction and patent lack of merit.
On March 15, 2002, the Labor Arbiter rendered
judgment in favor of the spouses Villamaria and ordered
the complaint dismissed on the following ratiocination:
Respondents presented the contract of
Boundary-Hulog, as well as the PAALALA, to prove their
claim that complainant violated the terms of their
contract and afterwards abandoned the vehicle assigned
to him. As against the foregoing, [the] complaints (sic)
mere allegations to the contrary cannot prevail. Not
having been illegally dismissed, complainant is not
entitled to damages and attorney's fees.
On appeal, NLRC dismissed the appeal and ruled
that under the Kasunduan, the juridical relationship
between Bustamante and Villamaria was that of vendor
and vendee, hence, the Labor Arbiter had no jurisdiction
over the complaint.
The appellate court ruled that the Labor Arbiter
had jurisdiction over Bustamantes complaint. Under
the Kasunduan, the relationship between him and
Villamaria was dual: that of vendor-vendee and employer-
employee. It explained that the existence of an
employment relationship did not depend on how the
worker was paid but on the presence or absence of control
over the means and method of the work.
ISSUE: Whether or not Bustamante is considered an
employee of Villamaria
RULING: YES. The Supreme Court affirmed the
ruling of the CA that, under the boundary-hulog scheme
incorporated in the Kasunduan, a dual juridical
relationship was created between petitioner and
respondent: that of employer-employee and vendor-
vendee. The Kasunduan did not extinguish the employer-
employee relationship of the parties extant before the
execution of said deed.
As early as 1956, the Court ruled in National
Labor Union v. Dinglasan that the jeepney
owner/operator-driver relationship under the boundary
system is that of employer-employee and not lessor-
lessee. This doctrine was affirmed, under similar factual
settings, in Magboo v. Bernardo and Lantaco, Sr. v.
 9

Llamas, and was analogously applied to govern the

relationships between auto-calesa owner/operator and
driver, bus owner/operator and conductor, and taxi
owner/operator and driver. The boundary system is a
scheme by an owner/operator engaged in transporting
passengers as a common carrier to primarily govern the
compensation of the driver, that is, the latters daily
earnings are remitted to the owner/operator less the
excess of the boundary which represents the drivers
compensation. Under this system, the owner/operator
exercises control and supervision over the driver.

IN LIGHT OF ALL THE FOREGOING, the

petition is DENIED. The decision of the Court of Appeals
in CA-G.R. SP No. 78720 is AFFIRMED. Costs against
petitioner.

JOSE MEL BERNARTE vs.

PHILIPPINE BASKETBALL ASSOCIATION
SEPTEMBER 14, 2011

Petitioners aver that they were invited to join the

PBA as referees. They were made to sign contracts on a
year to year basis. During the term of Commissioner Eala,
however, changes were made on the terms of their
employment. Petitioner Bernarte was not made to sign a
contract during the first conference and it was only during
the second conference when he was made to sign a one-
and-a-half-month contract.

January 2004, Bernarte received a letter advising

him that his contract would not be renewed citing his
unsatisfactory performance on and off the court. On the
other hand, Guevarra alleged that he was invited to join
the PBA pool of referees and signed a contract as trainee
but a year after respondent issued a memorandum
against him expressing dissatisfaction over his
questioning on the assignment of referees, after that he
was no longer made to sign a contract.

Respondent aver, on the other hand, that

petitioners were not illegally dismissed because they were
not employees of PBA. Their respective retainer contracts
were simply not renewed, which they knew were fixed.
Labor arbiter ruled in favor of the petitioners which was
then affirmed by the NLRC.

ISSUE: Whether or not petitioners are employee

of respondent.

HELD: NO. Petitioners are not employees of

respondent. The stipulations in their retainer contract
hardly demonstrate control over the means and methods
by which petitioner performs his work as referee. The
stipulations merely serve as rules of conduct or guidelines
in order to maintain the integrity of the professional
basketball league.

The court agrees with the respondent that once in

the court, the referees exercise their own independent
judgement, based on the rules of the game, as to when
and how a call or decision is to be made. The referees are
the only, absolute, and final authority on the playing
court. Moreover, unlike regular employees who ordinarily
report for work eight hours a day for five days a week,
petitioner is required to report only when PBA games are
scheduled. In addition, there are no deductions for
contributions to SSS, Philhealth, Pag-ibig, which are the
usual deductions from employee's’ salaries. These
undisputed circumstances buttress the fact that
petitioner is an independent contractor, and not an
employee.