SUPREME COURT FIRST DIVISION NATIONAL LABOR
UNION, Petitioner, -versus- G.R. No. L-7945 March 23, 1956
BENEDICTO DINGLASAN, Respondent.
x--------------------------------------------------x D E C I S I O N
PADILLA, J.: The Petitioner seeks a Review and the Setting
Aside of a Resolution En Banc of the Court of Industrial
Relations adopted on 23 June 1954 which held that there
exists no employer-employee relationship between the
respondent and the driver complainants represented by the
Petitioner and for that reason the Court of Industrial
Relations dismissed the complaint filed by the acting
prosecutor of the Court. The Resolution En Banc complained
of reversed an Order of an Associate Judge of the Court
which declared that there was such relationship of
employer-employee between the respondent and the
complainants represented by the Petitioner. The last
mentioned Order of 16 February 1954 was just interlocutory
but it was set aside by the Resolution of 23 June 1954. The
National Labor Union in representation of the complainants
appealed from said Resolution dismissing its complaint
charging the respondent with the commission of unfair labor
practices. In the Resolution complained of there are no
findings of facts. It merely states that —The Court, En Banc,
finds that the said motion for reconsideration is well-taken
and, therefore, it hereby reconsider the Order of February
16, 1954, and thereby declares that there is no employer-
employee relation between respondent, Benedicto
Dinglasan, and the driver-complainants in his case. As a
consequence, the motion to dismiss the complaint dated
October 31, 1953, filed by the Acting Prosecutor of the
Court, is hereby granted. (Annex D.) This Resolution was
adopted upon a motion for reconsideration of the previous
Order of 16 February 1954. As there are no findings of fact
in the Resolution those set forth in the previous Order must
have been relied upon by the Court. They are as follows: (a)
Respondent Dinglasan is the owner and operator of TPU
jeepneys plying between España-Quiapo-Pier and vice
versa. (b) Petitioners are drivers who had verbal contracts
with respondent for the use of the latter’s jeepneys upon
payment of P7.50 for 10 hours use, otherwise known as the
“boundary system”. (c) Said drivers did not receive salaries
or wages from Mr. Dinglasan; their day’s earnings being the
excess over the P7.50 that they paid for the use of the
jeepneys. In the event that they did not earn more,
respondent did not have to pay them anything; (d) Mr.
Dinglasan’s supervision over the drivers consisted in
inspection of the jeepneys that they took out when they
passed his gasoline station for water, checking the route
prescribed by the Public Service Commission, or whether
any driver was driving recklessly and washing and changing
the tires of jeepneys. (Annex C.) The main question to
determine is whether there exists a relationship of
employer-employee between the drivers of the jeeps and
the owner thereof. The findings contained in the first Order
are not disputed by both parties except the last to which the
respondent took exception. But in the Resolution setting
aside the Order of 16 February 1954 the Court of Industrial
Relations En Banc did not state that such finding is not
supported by evidence. It merely “declares that there is no
employer-employee relation between respondent, Benedicto
Dinglasan, and the driver-complainants in this case.” If the
findings to which the respondent took exception is
unsupported by the evidence, a pronouncement to that
effect would have been made by the Court En Banc. In the
absence of such pronouncement we are not at liberty to
ignore or disregard said finding. The findings of the Court of
Industrial Relations with respect to question of fact, if
supported by substantial evidence on the record shall be
conclusive.”[1] Taking into consideration the findings of fact
made by the Court of Industrial Relations we find it difficult
to uphold the conclusion of the Court set forth in its
Resolution of 23 June 1954. The drivers did not invest a
single centavo in the business and the respondent is the
exclusive owner of the jeeps. The management of the
business is in the respondent’s hands. For even if the drivers
of the jeeps take material possession of the jeeps, still the
respondent as owner thereof and holder of a certificate of
public convenience is entitled to exercise, as he does and
under the law he must, supervision over the drivers by
seeing to it that they follow the route prescribed by the
Public Service Commission and the rules and regulations
promulgated by it as regards their operation. And when they
pass by the gasoline station of the respondent checking by
his employees on the water tank, oil and tire pressure is
done. The only features that would make the relationship of
lessor and lessee between the respondent and the drivers,
members of the union, as contended by the respondent, are
the fact that he does not pay them any fixed wage but their
compensation is the excess of the total amount of fares
earned or collected by them over and above the amount of
P7.50 which they agreed to pay to the respondent, the
owner of the jeeps, and the fact that the gasoline burned by
the jeeps is for the account of the drivers. These two
features are not, however, sufficient to withdraw the
relationship between them from that of employer-employee,
because the estimated earnings for fares must be over and
above the amount they agreed to pay to the respondent for
a ten-hour shift or ten-hour a day operation of the jeeps. Not
having any interest in the business because they did not
invest anything in the acquisition of the jeeps and did not
participate in the management thereof, their service as
drivers of the jeeps being their only contribution to the
business, the relationship of lessor and lessee cannot be
sustained.[2] In the lease of chattels the lessor loses
complete control over the chattel leased although the lessee
cannot make bad use thereof, for he would be responsible
for damages to the lessor should he do so. In this case there
is a supervision and a sort of control that the owner of the
jeeps exercises over the drivers. It is an attempt by
ingenious scheme to withdraw the relationship between the
owner of the jeeps and the drivers thereof from the
operation of the labor laws enacted to promote industrial
peace. As to the point that the National Labor Union is not
the real party in interest to bring the complaint, suffice it to
say that “ ‘representative’ includes a legitimate labor
organization or any officer or agent of such organization,
whether or not employed by the employer or employees
whom he represents.”[3] And whenever it is charged by an
offended party or his representative that any person has
engaged or is engaging in any unfair labor practice, the
Court of Industrial Relations must investigate such charge.
[4] Therefore, the objection to the institution of the charge
for unfair labor practice by the National Labor Union is not
well taken. The Order of 23 June 1904 is reversed and set
aside and the case remanded to the Court of Industrial
Relations for such further proceedings as may be required
by law, with costs against the respondent. Paras, C.J.,
Bengzon, Reyes, Bautista Angelo, Labrador, Concepcion,
Reyes, and Endencia, JJ., concur. [1] Section 6, Republic Act
No. 875. [2] In the matter of the Park Floral Company, etc.,
19 NLRB 403; Radley et al. vs. Commonwealth, 161 SW (2d)
417; Jones vs. Goodson et al., 121 Fed. Rep. (2d) 176;
Mitchel vs. Gibbson et al., 172 Fed. Rep. (2d) 970. [3]
Section 6, Republic Act No. 875. [4] Section 5 (b), Republic
Act No. 875.
Dy Keh Beng vs. Int’l Labor
FACTS:
A charge of unfair labor practice was fi led against
Dy Keh Beng, a proprietor of a basket factory,
bydismissing Solano and Tudla for their union activities. Dy Keh Beng
contended that he did not know Tudla and Solano was not
his employee because the lattercame to the establishment G.R. No.L-21278 December 27, 1966
only when there was work which he did on pakiaw basis.Dy
Keh Beng countered with a special defense of
simple extortion committed by the head of the Lessons Applicable: Applicability to certain specific persons –
laborunion. Professors in national interest
ISSUE:
W/N there existed an employee-employer relation between petitioner
and respondents Laws Applicable:
HELD:
Yes. Evidence showed that the work of Solano and
Tudla was continuous except in the event of illness, FACTS:
although their services were compensated on piece basis.  January 14, 1963: the President of Feati University
The control test calls for the existence of the right to control
the manner of doing the work, not the actual exercise of Faculty Club (PAFLU) wrote a letter to Mrs. Victoria L.
the right considering that Dy Keh Beng is engage din the Araneta, President of Feati University informing her
manufacture of baskets known as “kaing”, those working that it registered as a labor union.
under Dy would be subject to Dy’s specifications such as
the size and quality of the “kaing”. And since the  January 22, 1963: PAFLU sent a letter with 26
laborers are done at Dy’s establishments, it could demands in relation to their employment and
beinferred that Dy could easily exercise control upon them.
As to the contention that Solano was not an employee requesting an answer within 10 days from receipt
because he worked on piece basis, the court ruled that it thereof.
should be determined that if indeed payment by piece is just  Araneta answered the letters, requesting that she be
a method of compensation and does not define the essence
given at least 30 days to study thoroughly the
of the relation. Payment cannot be construed by piece
where work is done in such establishment so as to put different phases of the demands. Meanwhile counsel
the worker completely at liberty to turn him out and take it for Feati, wrote a letter to the President of PAFLU
another at pleasure Justice Perfecto also contended that demanding proof of its majority status and
pakyaw system is a labor contract between employers and designation as a bargaining representative
employees between capitalists and laborers. Wherefore, the
 February 1, 1963: the President of PAFLU rejected
award of back wages is modifi ed to an award of
back wages for 3 years at the rated of compensation the extension of time and filed a notice of strike with
the employees were receiving at the time of dismissal. the Bureau of Labor due to Feati’s refusal to bargain
collectively.
Feati University v. Bautista
 Conciliation Division of the Bureau of Labor made
efforts to conciliate them but failed.
 February 18, 1963: PAFLU declared a strike and
established picket lines in the premises of Feati
resulting in the disruption of classes in the University.
 March 21, 1963: the President of the Philippines
certified to the Court of Industrial Relations (CIR) the
dispute between Feati and PAFLU pursuant to the
provisions of Section 10 of Republic Act No. 875.
 3 cases were filed with the CIR
 41-IPA – PAFLU’s petition to declare in
contempt of court since Feati refused to accept them
back to work in violation of the return-to-work order
of March 30, 1963 and has employed professors
and/or instructors to take their places
 1183-MC – PAFLU’s petition for
certification election praying that it be certified as
the sole and exclusive bargaining representative
 Later withdrawn since the Case
41-IPA had already been certified by the President to
the CIR and has absorbed the issues herein
 V-30 – PAFLU’s complaint for
indirect contempt of court filed against the
administrative officials of the Feati reiterating Case
41-IPA
 May 10, 1963: Feati filed before the SC a petition
for certiorari and prohibition with writ of preliminary
injunction which was issued upon the Feati's filing a
bond of P50,000 (increased from P1,000), ordering
CIR Judge Jose S. Bautista to desist and refrain from
further proceeding
 March 23, 1963: On the strength of the presidential
certification, Judge Bautista set the case for hearing
 Feati, thru counsel filed a motion to dismiss
the case upon the ground that the CIR has no
jurisdiction over the case, because:
1. the Industrial Peace Act is NOT applicable to the University,
it being an educational institution, nor to the members of
the Faculty Club, they being independent contractors
2. the presidential certification is violative of Section 10 of the
Industrial Peace Act, as the University is not an industrial
establishment and there was no industrial dispute which
could be certified to the CIR
 Judge Bautista denied the motion to dismiss and
ordered the strikers to return immediately to work
and the University to take them back under the last
terms and conditions existing before the dispute
arose
 Without the motion for reconsideration having been
acted upon by the CIR en banc, Judge Bautista set
the case for hearing on the merits for May 8, 1963
but was cancelled upon Feati’s petition for certiorari
alleging that Judge Jose S. Bautista acted without, or
in excess of, jurisdiction, or with grave abuse of
discretion, in taking cognizance of, and in issuing the
 questioned orders in, CIR Cases Nos. 41-IPA 1183-MC § Act itself specifically enumerated those who are not included
and V-30 in the term "employer" and educational institutions are not
 Feati claims that it is not an employer within included; hence, they can be included in the term
the contemplation of R.A. 875, because it is not an "employer". However, those educational institutions that are
industrial establishment not operated for profit are not within the purview
 Feati also claims that it is only a lessee of the ofRepublic Act No. 875.
services of its professors and/or instructors pursuant ü Feati realizes profits and parts of such earning is distributed
to a contract of services entered into between them as dividends to private stockholders or individuals
because the University does not exercise control over § It embraces not only those who are usually and ordinarily
their work considered employees, but also those who have ceased as
employees as a consequence of a labor dispute.
ISSUES: W/N Feati can be considered an employer and  employee must be one who is engaged in the service
PAFLU as an employee to be covered by R.A. 875 and have of another; who performs services for another; who
right to unionize works for salary or wages
 "workers" limited to those performing physical labor
HELD: YES. petition for certiorari and prohibition with o embrace stenographers and bookkeepers
preliminary injunction in Case G.R. No. L-21278 is dismissed o Teachers are not included
 Section 2(c) of R.A. 875:  Feati controls the work of the members of its faculty
o The term employer include any person acting in the interest o prescribes the courses or subjects that professors teach,
of an employer, directly or indirectly, but shall not include and when and where to teach
any labor organization (otherwise than when acting as an o professors' work is characterized by regularity and
employer) or any one acting in the capacity or agent of continuity for a fixed duration
such labororganization. o professors are compensated for their services by wages and
§ Congress did not intend to give a complete definition of salaries, rather than by profits
"employer", but rather that such definition should be o professors and/or instructors cannot substitute others to do
complementary to what is commonly understood as their work without the consent of the university
employer o professors can be laid off if their work is found not
satisfactory
 Moreover, even if university professors are threatens a major industry of 18,000 students which
considered independent contractors, still they would affects the national interest), and this Court will not
be covered by Rep. Act No. 875 interfere in, much less curtail, the exercise of that
 professors, instructors or teachers of private prerogative. The jurisdiction of the CIR in a certified
educational institutions who teach to earn a living case is exclusive. The parties involved in the case
are entitled to the protection of our labor laws — and may appeal to the Supreme Court from the order or
one such law is RepublicAct No. 875. orders thus issued by the CIR.
 The term "labor dispute" includes any controversy  Section 10 of Republic Act No. 875 empowers the
concerning terms, tenure or conditions of Court of Industrial Relations to issue an order "fixing
employment, or concerning the association or the terms of employment." This clause is broad
representation of persons in negotiating, fixing, enough to authorize the Court to order the strikers to
maintaining, changing, or seeking to arrange terms return to work and the employer to readmit them
or conditions of employment regardless of whether  The return-to-work order cannot be considered as an
the disputants stand in proximate relation of impairment of the contract entered into with the
employer and employees. replacements. Besides, labor contracts must yield to
 To certify a labor dispute to the CIR is the prerogative the common good and such contracts are subject to
of the President under the law (Because the strike the special laws on labor unions, collective
declared by the members of the minority union bargaining, strikes and similar subjects