CALAMBA, MARION JOSSETTE B.

G.R. No. 162419 July 10, 2007

PAUL V. SANTIAGO vs. CF SHARP CREW MANAGEMENT, INC.
FACTS: Paul V. Santiago (petitioner) had been working as a seafarer for Smith Bell Management, Inc.
(respondent) for about five (5) years. He signed a new contract of employment with respondent, for
nine (9) months and was assured of a monthly salary of US$515.00, overtime pay and other benefits.
Contract was approved by the Philippine Overseas Employment Administration (POEA). Petitioner was
to be deployed on board the "MSV Seaspread" which was scheduled to leave the port of Manila for
Canada on 13 February 1998.A week before departure, respondent’s Vice President, sent a fax message
to the captain of "MSV Seaspread," that he received a phone call from petitioner’s wife asking not to
send husband while other callers gave him feedbacks that if allowed to depart will jump ship in Canada
like his brother. The captain then cancelled plans for him to return to Seaspread. Petitioner was thus
told that he would not be leaving for Canada anymore, but he was reassured that he might be
considered for deployment at some future date. To this, he filed a complaint for illegal dismissal,
damages, and attorney's fees against respondent and its foreign principal, Cable and Wireless (Marine)
Ltd.

ISSUE: W/N Santiago is entitled to relief?

RULING: Yes. There is no question that the parties entered into an employment contract whereby he
was contracted by respondent to render services on board "MSV Seaspread". However, respondent
failed to deploy petitioner from the port of Manila to Canada. Considering that petitioner was not able
to depart from the airport or seaport in the point of hire, the employment contract did not commence,
and no employer-employee relationship was created between the parties. A distinction must be made
between the perfection of the employment contract and the commencement of the employer-
employee relationship. The perfection of the contract, which in this case coincided with the date of
execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as
well as the rest of the terms and conditions therein. The commencement of the employer-employee
relationship, would have taken place had petitioner been actually deployed from the point of hire. Thus,
even before the start of any employer-employee relationship, contemporaneous with the perfection of
the employment contract was the birth of certain rights and obligations, the breach of which may give
rise to a cause of action against the erring party. Thus, if the reverse had happened, he would be liable
for damages.

Moreover, while the POEA Standard Contract must be recognized and respected, neither the
manning agent nor the employer can simply prevent a seafarer from being deployed without a valid
reason. Respondent’s act of preventing petitioner from departing the port of Manila and boarding "MSV
Seaspread" constitutes a breach of contract, giving rise to petitioner’s cause of action. Respondent
unilaterally and unreasonably reneged on its obligation to deploy petitioner and must therefore answer
for the actual damages he suffered. Article 2199 of the Civil Code provides that one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Respondent
is thus liable to pay petitioner actual damages in the form of the loss of nine (9) months’ worth of salary
as provided in the contract.

G.R. No. 155207 August 13, 2008

WILHELMINA S. OROZCO vs CA
FACTS: PDI engaged the services of petitioner to write a weekly column for its Lifestyle section and
religiously submitted her articles every week, except for a six-month stint in New York City when she,
nonetheless, sent several articles through mail. She received compensation of P250.00 – later increased
to P300.00 – for every column published.

Respondent PDI Editor in Chief allegedly wanted to stop publishing her column for no apparent reason.
When she talked to Magsanoc, latter told her that PDI Chairperson Eugenia Apostol who had asked to
stop publication of her column, since said section already had many columnists. They averred
petitioner’s column failed to improve, continued to be superficially and poorly written, and failed to
meet the high standards of the newspaper. Hence, they decided to terminate petitioner’s column.
Orozco filed a complaint for illegal dismissal, backwages, moral and exemplary damages, and other
money claims before the NLRC.
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CALAMBA, MARION JOSSETTE B.

ISSUE: W/N petitioner is an employee of PDI, and if the answer be in the affirmative, whether she was
illegally dismissed.

RULING: No. Under the "four-fold test", the four elements of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employer’s power to control the employee’s conduct. Of these four elements, it is the power of
control which is the most crucial and most determinative factor, so important. In other words, the test is
whether the employer controls or has reserved the right to control the employee, not only as to the
work done, but also as to the means and methods by which the same is accomplished. Petitioner argues
that she was controlled as to the contents of her column, time, space and discipline.

Is this the form of control that our labor laws contemplate such as to establish an employer-employee
relationship between petitioner and respondent PDI? No. Logically, the line should be drawn between
rules that merely serve as guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee relationship unlike the second, which address both
the result and the means used to achieve it.

The main determinant therefore is whether the rules set by the employer are meant to control not just
the results of the work but also the means and method to be used by the hired party in order to
achieve such results. Thus, in this case, we are to examine the factors enumerated by petitioner to see if
these are merely guidelines or if they indeed fulfill the requirements of the control test.

Petitioner has not shown that PDI, acting through its editors, dictated how she was to write or produce
her articles each week. Aside from the constraints presented by the space allocation of her column,
there were no restraints on her creativity; petitioner was free to write her column in the manner and
style she was accustomed to and to use whatever research method she deemed suitable for her
purpose. The apparent limitation that she had to write only on subjects that befitted the Lifestyle
section did not translate to control, but was simply a logical consequence of the fact that her column
appeared in that section and therefore had to cater to the preference of the readers of that section.

Petitioner was engaged as a columnist for her talent, skill, experience, and her unique viewpoint as a
feminist advocate. How she utilized all these in writing her column was not subject to dictation by
respondent. PDI did not supply petitioner with the tools and instrumentalities she needed to perform
her work. Petitioner only needed her talent and skill to come up with a column every week. As such, she
had all the tools she needed to perform her work.

Considering that respondent PDI was not petitioner’s employer, it cannot be held guilty of illegal
dismissal.

G.R. No. 124382 August 16, 1999

PASTOR DIONISIO V. AUSTRIA, vs NLRC
FACTS: Pastor Dionisio V. Austria worked with the SDA for twenty eight (28) years. He began his work
with the SDA on 15 July 1963 as a literature evangelist, selling literature of the SDA over the island of
Negros. From then on, petitioner worked his way up the ladder and got promoted several times. In
January, 1968, petitioner became the Assistant Publishing Director in the West Visayan Mission of the
SDA. He held the position of district pastor until his services were terminated. Petitioner received a
letter of dismissal citing misappropriation of denominational funds, willful breach of trust, serious
misconduct, gross and habitual neglect of duties, and commission of an offense against the person of
employer's duly authorized representative, as grounds for the termination of his services. He then filed a
complaint before LA for illegal dismissal against the SDA and its officers and prayed for reinstatement
with backwages and benefits, moral and exemplary damages and other labor law benefits.

ISSUE/s: W/N the termination of the services of petitioner is an ecclesiastical affair, and, as such,
involves the separation of church and state; and W/N such termination is valid.

RULING: The principle of separation of church and state finds no application in this case. The case at bar
does not concern an ecclesiastical or purely religious affair as to bar the State from taking cognizance of
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CALAMBA, MARION JOSSETTE B.

the same. Based on this definition, an ecclesiastical affair involves the relationship between the church
and its members and relate to matters of faith, religious doctrines, worship and governance of the
congregation. To be concrete, examples of this so-called ecclesiastical affairs to which the State cannot
meddle are proceedings for excommunication, ordinations of religious ministers, administration of
sacraments and other activities with attached religious significance. The case at bar does not even
remotely concern any of the abovecited examples. Simply stated, what is involved here is the
relationship of the church as an employer and the minister as an employee. It is purely secular and has
no relation whatsoever with the practice of faith, worship or doctrines of the church.

Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive
enough to include religious corporations, such as the SDA, in its coverage. Article 277 (b) of the Labor
Code and Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code further require the
employer to furnish the employee with two (2) written notices, to wit: (a) a written notice served on the
employee specifying the ground or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side; and, (b) a written notice of termination served on the
employee indicating that upon due consideration of all the circumstances, grounds have been
established to justify his termination.

Private respondent failed to substantially comply with the above requirements. With regard to the first
notice, the letter,36 dated 17 October 1991, which notified petitioner and his wife to attend the meeting
on 21 October 1991, cannot be construed as the written charge required by law. We cannot sustain the
validity of dismissal based on the ground of breach of trust. Private respondents allege that they have
lost their confidence in petitioner for his failure to remit the tithes and offerings amounting to
P15,078.10, which were collected in his district. A careful study of the voluminous records of the case
reveals that there is simply no basis for the alleged loss of confidence and breach of trust. Settled is the
rule that under Article 282 (c) of the Labor Code, the breach of trust must be willful.

Petitioner was terminated from service without just or lawful cause. Having been illegally dismissed,
petitioner is entitled to reinstatement to his former position without loss of seniority right and the
payment of full backwages without any deduction corresponding to the period from his illegal dismissal
up to actual reinstatement.

G.R. No. 169510 August 8, 2011

ATOK BIG WEDGE COMPANY, INC. vs GISON
FACTS: Gison was engaged as part-time consultant for 11yrs on retainer basis by petitioner Atok Big
Wedge with matters pertaining to the prosecution of cases against illegal surface occupants within the
area covered by the company's mineral claims. Respondent was likewise tasked to perform liaison work
with several government agencies, which he said was his expertise.

Petitioner did not require respondent to report to its office on a regular basis, except when occasionally
requested by the management. Resident manager Cera issued a Memorandum5 advising respondent
that within 30 days from receipt thereof, petitioner is terminating his retainer contract with the
company since his services are no longer necessary. He filed a Complaint6 for illegal dismissal, unfair
labor practice, underpayment of wages, non-payment of 13th month pay, vacation pay, and sick leave
pay with NLRC CAR.

ISSUE:W/N, Gison is an employee of the company

RULING: No. Well-entrenched is the doctrine that the existence of an employer-employee relationship is
ultimately a question of fact and that the findings thereon by the Labor Arbiter and the NLRC shall be
accorded not only respect but even finality when supported by substantial evidence. The four-fold test,
to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee's conduct, or the so-called "control test." Of these
four, the last one is the most important. The so-called "control test" is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an employer-employee relationship.
Under the control test, an employer-employee relationship exists where the person for whom the

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CALAMBA, MARION JOSSETTE B.

services are performed reserves the right to control not only the end achieved, but also the manner and
means to be used in reaching that end.

Respondent was not required to report everyday during regular office hours of petitioner. Respondent's
monthly retainer fees were paid to him either at his residence or a local restaurant. More importantly,
petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in which
his expertise as a liaison officer was needed; respondent was left alone and given the freedom to
accomplish the tasks using his own means and method. Respondent was assigned tasks to perform, but
petitioner did not control the manner and methods by which respondent performed these tasks. Verily,
the absence of the element of control on the part of the petitioner engenders a conclusion that he is not
an employee of the petitioner. Moreover, the absence of the parties' retainership agreement
notwithstanding, respondent clearly admitted that petitioner hired him in a limited capacity only and
that there will be no employer-employee relationship between them.

Considering that there is no employer-employee relationship between the parties, the termination of
respondent's services by the petitioner after due notice did not constitute illegal dismissal warranting
his reinstatement and the payment of full backwages, allowances and other benefits.

G.R. No. 153511 July 18, 2012

LEGEND HOTEL (MANILA) vs REALUYO
FACTS: Joey R. Roa, filed a complaint for alleged unfair labor practice, constructive illegal dismissal, and
the underpayment/nonpayment of his premium pay for holidays, separation pay, service incentive leave
pay, and 13111 month pay. He prayed for attorney's fees, moral damages off P100,000.00 and
exemplary damages for P100,000.00. He averred that he had worked as a pianist at the Legend Hotel’s
Tanglaw Restaurant with an initial rate of P400.00/night that was given to him after each night’s
performance; that his rate had increased to P750.00/night; and that during his employment, he could
not choose the time of performance, which had been fixed from 7:00 pm to 10:00 pm for three to six
times/week. He added that the Legend Hotel’s restaurant manager had required him to conform with
the venue’s motif; that he had been subjected to the rules on employees’ representation checks and
chits, a privilege granted to other employees; that on July 9, 1999, the management had notified him
that as a cost-cutting measure his services as a pianist would no longer be required effective July 30,
1999; that he disputed the excuse, insisting that Legend Hotel had been lucratively operating as of the
filing of his complaint; and that the loss of his employment made him bring his complaint.

ISSUE: W/N there existed an employer-employee relationship between the parties

RULING: Yes. Well settled is the rule that of the four (4) elements of employer-employee relationship, it
is the power of control that is more decisive. The factors that determine the issue include who has the
power to select the employee, who pays the employee’s wages, who has the power to dismiss the
employee, and who exercises control of the methods and results by which the work of the employee is
accomplished. The power of selection was firmly evidenced by the increase of his remuneration.
Petitioner could not seek refuge behind the service contract entered into with respondent. It is the law
that defines and governs an employment relationship. Secondly, petitioner argues that whatever
remuneration was given to respondent were only his talent fees that were not included in the definition
of wage under the Labor Code; and that such talent fees were but the consideration for the service
contract entered into between them.

There is no denying that the remuneration denominated as talent fees was fixed on the basis of his
talent and skill and the quality of the music he played during the hours of performance each night,
taking into account the prevailing rate for similar talents in the entertainment industry. Respondent’s
remuneration, albeit denominated as talent fees, was still considered as included in the term wage in
the sense and context of the Labor Code, regardless of how petitioner chose to designate the
remuneration. a. He could not choose the time of his performance, which petitioners had fixed from
7:00 pm to 10:00 pm, three to six times a week; b. He could not choose the place of his performance; c.
The restaurant’s manager required him at certain times to perform only Tagalog songs or music, or to
wear barong Tagalog to conform to the Filipiniana motif; and d. He was subjected to the rules on
employees’ representation check and chits, a privilege granted to other employees.
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CALAMBA, MARION JOSSETTE B.

Having established that respondent was an employee whom petitioner terminated to prevent losses,
the conclusion that his termination was by reason of retrenchment due to an authorized cause under
the Labor Code is inevitable. The Court realizes that the lapse of time since the retrenchment might
have rendered respondent's reinstatement to his former job no longer feasible. If that should be true,
then petitioner should instead pay to him separation pay at the rate of one. month pay for every year of
service computed from September 1992 (when he commenced to work for the petitioners) until the
finality of this decision, and full backwages from the time his compensation was withheld until the
finality of this decision.

G.R. No. 138051 June 10, 2004

JOSE Y. SONZA vs ABS-CBN BROADCASTING CORPORATION
FACTS: ABS-CBN signed an Agreement with the Mel and Jay which listed the services SONZA. It agreed
to pay for SONZA’s services with a monthly talent fee. 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").

ISSUE: W/N SONZA is an employee of ABS-CBN

RULING: No, he 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.29 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.

Sonza was hired by ABS-CBN due to his "unique skills, talent and celebrity status not possessed by
ordinary employees," a circumstance that, the Court said, was indicative, though not conclusive, of an
independent contractual relationship. Independent contractors often present themselves to possess
unique skills, expertise or talent to distinguish them from ordinary employees.47 The Court also found
that, as to payment of wages, Sonza’s talent fees were the result of negotiations between him and ABS-
CBN.48 As to the power of dismissal, the Court found that the terms of Sonza’s engagement were
dictated by the contract he entered into with ABS-CBN, and the same contract provided that either
party may terminate the contract in case of breach by the other of the terms thereof.49 However, the
Court held that the foregoing are not determinative of an employer-employee relationship. Instead, it is
still the power of control that is most important.

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. The records do not show that ABS-CBN exercised any supervision and control over
how SONZA utilized his skills and talent in his shows.51

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 SONZA’s 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, SONZA’s cause of action is for breach of contract
which is intrinsically a civil dispute cognizable by the regular courts.

G.R. No. 204944-45 December 3, 2014

FUJI TELEVISION NETWORK, INC. vs ESPIRITU
FACTS: Arlene was engaged by Fuji as a news correspondent/producer4 "tasked to report Philippine
news to Fuji through its Manila Bureau field office." Arlene’s employment contract initially provided for
a term of one (1) year but was successively renewed on a yearly basis. Arlene was diagnosed with lung
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CALAMBA, MARION JOSSETTE B.

cancer and informed Fuji about her condition. In turn, the Chief of News Agency of Fuji, Yoshiki Aoki,
informed Arlene "that the company will have a problem renewing her contract"8 since it would be
difficult for her to perform her job.9 She "insisted that she was still fit to work as certified by her
attending physician."10

After several verbal and written communications,11 Arlene and Fuji signed a non-renewal contract
where it was stipulated that her contract would no longer be renewed after its expiration. In
consideration of the non-renewal contract, Arlene "acknowledged receipt of the total amount of
US$18,050.00 representing her monthly salary from March 2009 to May 2009, year-end bonus, mid-year
bonus, and separation pay."13 However, Arlene affixed her signature on the nonrenewal contract with
the initials "U.P." for "under protest." She filed a complaint for illegal dismissal and attorney’s fees with
the NCR Arbitration Branch of the NLRC. She alleged that she was forced to sign the nonrenewal
contract when Fuji came to know of her illness and that Fuji withheld her salaries and other benefits for
March and April 2009 when she refused to sign.

ISSUE: W/N Espiritu is a regular employee or a fixed-term contractual employee; illegally dismissed and
entitled to damages and attorney’s fees.

RULING: The test for determining regular employment is whether there is a reasonable connection
between the employee’s activities and the usual business of the employer. Article 280 provides that the
nature of work must be "necessary or desirable in the usual business or trade of the employer" as the
test for determining regular employment.

Here, Espiritu was engaged by Fuji as a stinger [sic] or news producer for its Manila Bureau. She was
hired for the primary purpose of news gathering and reporting to the television network’s headquarters.
Espiritu was not contracted on account of any peculiar ability or special talent and skill that she may
possess which the network desires to make use of. Parenthetically, ifit were true that Espiritu is an
independent contractor, as claimed by Fuji, the fact that everything that she uses to perform her job is
owned by the company including the laptop computer and mini camera discounts the idea of job
contracting.

There is no evidence showing that Arlene was accorded due process. After informing her employer of
her lung cancer, she was not given the chance to present medical certificates. Fuji immediately
concluded that Arlene could no longer perform her duties because of chemotherapy. It did not ask her
how her condition would affect her work. Neither did it suggest for her to take a leave, even though she
was entitled to sick leaves. Worse, it did not present any certificate from a competent public health
authority. What Fuji did was to inform her thather contract would no longer be renewed, and when she
did not agree, her salary was withheld. Thus, the Court of Appeals correctly upheld the finding of the
National Labor Relations Commission that for failure of Fuji to comply with due process, Arlene was
illegally dismissed.

G.R. No. 220617

NESTLE PHILIPPINES, INC. vs PUEDAN
FACTS: ODSI and NPI hired them to sell various NPI products in the assigned covered area. After some
time, respondents demanded that they be considered regular employees of NPI, but they were directed
to sign contracts of employment with ODSI instead. When respondents refused to comply with such
directives, NPI and ODSI terminated them from their position. Thus, they were constrained to file the
complaint, claiming that: (a) ODSI is a labor-only contractor and, thus, they should be deemed regular
employees of NPI; and (b) there was no just or authorized cause for their dismissal.

ISSUE: W/N ODSI is the employer of respondents.

RULING: ODSI was not a labor-only contractor of NPI; hence, the latter cannot be deemed the true
employer of respondents. As a consequence, NPI cannot be held jointly and severally liable to ODSI's
monetary obligations towards respondents.

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CALAMBA, MARION JOSSETTE B.

Thus, contrary to the CA's findings, the aforementioned stipulations in the Distributorship Agreement
hardly demonstrate control on the part of NPI over the means and methods by which ODSI performs its
business, nor were they intended to dictate how ODSI shall conduct its business as a distributor.
Otherwise stated, the stipulations in the Distributorship Agreement do not operate to control or fix the
methodology on how ODSI should do its business as a distributor of NPI products, but merely provide
rules of conduct or guidelines towards the achievement of a mutually desired result55 - which in this case
is the sale of NPI products to the end consumer.

Verily, it was only reasonable for NPI - it being a local arm of one of the largest manufacturers of foods
and grocery products worldwide - to require its distributors, such as ODSI, to meet various conditions for
the grant and continuation of a distributorship agreement for as long as these conditions do not control
the means and methods on how ODSI does its distributorship business, as shown in this case. This is to
ensure the integrity and quality of the products which will ultimately fall into the hands of the end
consumer.

SC modified and deleted petitioner Nestle Philippines, Inc.'s solidary liability with Ocho de Septiembre,
Inc. (ODSI) for the latter's monetary obligations to respondents.

G.R. No. 167622 June 29, 2010

GREGORIO V. TONGKO vs MANULIFE
FACTS: The contractual relationship between Tongko and Manulife had two basic phases. The first or
initial phase began under a Career Agent’s Agreement understood and agreed that the Agent is an
independent contractor and nothing contained herein shall be construed or interpreted as creating an
employer-employee relationship between the Company and the Agent. Second phase was when Tongko
was named Unit Manager in Manulife’s Sales Agency Organization. In 1990, he became a Branch
Manager. Six years later (or in 1996), Tongko became a Regional Sales Manager.

ISSUE: W/N there is an existence of an employment relationship.

RULING: Yes, there is an employment relationship existed between Tongko and Manulife. We concluded
that Tongko is Manulife’s employee. The primary evidence in the present case is the July 1, 1977
Agreement that governed and defined the parties’ relations until the Agreement’s termination in 2001.
This Agreement stood for more than two decades and, based on the records of the case, was never
modified or novated. It assumes primacy because it directly dealt with the nature of the parties’
relationship up to the very end; moreover, both parties never disputed its authenticity or the accuracy
of its terms.

By the Agreement’s express terms, Tongko served as an "insurance agent" for Manulife, not as an
employee. To be sure, the Agreement’s legal characterization of the nature of the relationship cannot be
conclusive and binding on the courts; the characterization of the juridical relationship the Agreement
embodied is a matter of law that is for the courts to determine. At the same time, though, the
characterization the parties gave to their relationship in the Agreement cannot simply be brushed aside
because it embodies their intent at the time they entered the Agreement, and they were governed by
this understanding throughout their relationship. At the very least, the provision on the absence of
employer-employee relationship between the parties can be an aid in considering the Agreement and its
implementation, and in appreciating the other evidence on record.

Evidence shows that Tongko’s role as an insurance agent never changed during his relationship with
Manulife. If changes occurred at all, the changes did not appear to be in the nature of their core
relationship. Tongko essentially remained an agent, but moved up in this role through Manulife’s
recognition that he could use other agents approved by Manulife, but operating under his guidance and
in whose commissions he had a share. For want of a better term, Tongko perhaps could be labeled as a
"lead agent" who guided under his wing other Manulife agents similarly tasked with the selling of
Manulife insurance.
Evidence suggests that these other agents operated under their own agency agreements. Thus, if
Tongko’s compensation scheme changed at all during his relationship with Manulife, the change was
solely for purposes of crediting him with his share in the commissions the agents under his wing
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CALAMBA, MARION JOSSETTE B.

generated. As an agent who was recruiting and guiding other insurance agents, Tongko likewise moved
up in terms of the reimbursement of expenses he incurred in the course of his lead agency, a
prerogative he enjoyed pursuant to Article 1912 of the Civil Code. Thus, Tongko received greater
reimbursements for his expenses and was even allowed to use Manulife facilities in his interactions with
the agents, all of whom were, in the strict sense, Manulife agents approved and certified as such by
Manulife with the Insurance Commission.

The the sufficiency of Tongko’s failure to comply with the guidelines of de Dios’ letter, as a ground for
termination of Tongko’s agency, is a matter that the labor tribunals cannot rule upon in the absence of
an employer-employee relationship. Jurisdiction over the matter belongs to the courts applying the laws
of insurance, agency and contracts.

G.R. No. 214291, January 11, 2018

AMERICAN POWER CONVERSION CORP vs LIM, G.R. No. 214291, January 11, 2018
FACTS: Respondent Lim was hired directly by APCC, an unregistered American corporation to conduct
business, to sell its products and services here in the Philippines. As APCC was unregistered, Lim was
included in the list of employees and the payroll of APCP BV, a Philippine-registered manufacturing
corporation. Meanwhile, Lim was under the supervision and control of APCS from Singapore.
During his stint as Regional Manager, Lim reported the irregularities committed by his superior from
APCS, Mr. George Kong. Consequently, Lim was handed out a letter by Kong informing him of a
supposed company restructuring which rendered his position as Regional Manager for North ASEAN
redundant. Lim was paid severance pay, but in a written demand, he sought reinstatement, the
payment of backwages and allowances/benefits, and damages for his claimed malicious and illegal
termination.

At the hearing at the Labor Arbiter, it was revealed that APCC hired another personnel which performed
the tasks of Lim although with a different title.

ISSUE: W/N Lim was illegally dismissed.

HELD: Yes. While APCC was Lim's employer, the redundancy program that was used to justify Lim's
dismissal from work was implemented by employees of APCS and APCP BV. As admitted by petitioners,
it was Kong who conceived and implemented the redundancy program, and APCP BV implemented the
dismissal. Since APCC is Lim's true employer, APCS and APCP BV had no business coming into the
picture; they are not connected with APCC whatsoever. They had no authority to devise a redundancy
scheme and represent APCC in their dealings with the DOLE. Therefore, their supposed redundancy
scheme, as against respondent, is ineffective; they had no power to terminate the services of
respondent.

G.R. No. 152121 July 29, 2003

EDUARDO G. EVIOTA vs CA
FACTS: Respondent Standard Chartered Bank and petitioner Eduardo G. Eviota executed a contract of
employment under which the petitioner was employed by the respondent bank as Compensation and
Benefits Manager, VP (M21). However, the petitioner abruptly resigned from the respondent bank
barely a month after his employment and rejoined his former employer. The bank filed a complaint
against the petitioner with the RTC of Makati City.

ISSUE: W/N the LA ha jurisidiction over the case

RULING: Article 217 of the Labor Code of the Philippines, as amended by Rep. Act No. 6715 which took
effect on March 21, 1989 reads:

ART. 217. Jurisdiction of Labor Arbiters and the Commission.—(a) Except as otherwise provided under
this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide within thirty
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CALAMBA, MARION JOSSETTE B.

(30) calendar days after the submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations.

Case law has it that the nature of an action and the subject matter thereof, as well as which court has
jurisdiction over the same, are determined by the material allegations of the complaint and the reliefs
prayed for in relation to the law involved.

Not every controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. A money claim by a worker against the employer or vice-versa
is within the exclusive jurisdiction of the labor arbiter only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relation. Absent such a link, the complaint will be
cognizable by the regular courts of justice.8

Actions between employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is within the exclusive
jurisdiction of the regular court.

It is evident that the causes of action of the private respondent against the petitioner do not involve the
provisions of the Labor Code of the Philippines and other labor laws but the New Civil Code. Thus, the
said causes of action are intrinsically civil. There is no causal relationship between the causes of action of
the private respondent’s causes of action against the petitioner and their employer-employee
relationship. The fact that the private respondent was the erstwhile employer of the petitioner under an
existing employment contract before the latter abandoned his employment is merely incidental. In fact,
the petitioner had already been replaced by the private respondent before the action was filed against
the petitioner.

G.R. No. 200575 February 5, 2014

INTEL TECHNOLOGY PHILIPPINES, INC vs NLRC
FACTS: Cabiles was initially hired by Intel Phil. on April 16, 1997 as an Inventory Analyst. He was
subsequently promoted several times over the years. He later applied for a position at Intel
Semiconductor Limited Hong Kong (Intel HK). She was offered the position of Finance Manager by Intel
HK. Before accepting the offer, he inquired from Intel Phil., through an email, the consequences of
accepting the newly presented opportunity in Hong Kong and she got a reply that she is not eligible to
receive retirement benefit given that she has not reached 10 years of service at the time she moved to
Hong Kong. Company does not round up the years of service. Cabiles executed a Release, Waiver and
Quitclaim (Waiver) in favor of Intel Phil. acknowledging receipt of full and complete settlement of all
benefits due him by reason of his separation from Intel Phil. After seven (7) months of employment,
Cabiles resigned from Intel HK. About two years thereafter, Cabiles filed a complaint for non-payment of
retirement benefits and for moral and exemplary damages with the NLRC

ISSUE: W/N Cabiles is eligibile to receive retirement benefits from Intel Phil. granted to employees who
had complied with the ten (10)-year service period requirement of the company.

RULING: Resignation is the formal relinquishment of an office, the overt act of which is coupled with an
intent to renounce. This intent could be inferred from the acts of the employee before and after the
alleged resignation. In this case, Cabiles, while still on a temporary assignment in Intel Chengdu, was
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CALAMBA, MARION JOSSETTE B.

offered by Intel HK the job of a Finance Manager. Her letter manifested two of his main concerns: a)
clearance procedures; and b) the probability of getting his retirement pay despite the non-completion of
the required 10 years of employment service. Beyond these concerns, however, was an acceptance of
the fact that he would be ending his relationship with Intel Phil. as his employer. The words he used -
local hire, close, clearance – denote nothing but his firm resolve to voluntarily disassociate himself from
Intel Phil. and take on new responsibilities with Intel HK.

All these are indicative of the clearest intent of Cabiles to sever ties with Intel Phil. He chose to forego
his tenure with Intel Phil., with all its associated benefits, in favor of a more lucrative job for him and his
family with Intel HK. The foregoing arguments of Cabiles, in essence, speak of the "theory of
secondment." The Court, is again not convinced.

The continuity, existence or termination of an employer-employee relationship in a typical secondment

contract or any employment contract for that matter is measured by the following yardsticks:

1. the selection and engagement of the employee;

2. the payment of wages;

3. the power of dismissal; and

4. the employer’s power to control the employee’s conduct.28

As applied, all of the above benchmarks ceased upon Cabiles’ assumption of duties with Intel HK on
February 1, 2007. Intel HK became the new employer. Evidently, Intel Phil. no longer had any control
over him.

G.R. No. 220978

CENTURY PROPERTIES, INC. v BABIANO
FACTS: Babiano was hired by CPI as Director of Sales, and was eventually6 appointed as Vice President
for Sales. As CPI' s Vice President for Sales, Babiano was remunerated with (a) monthly salary of
P70,000.00; (b) allowance of P50,000.00; and (c) 0.5% override commission for completed sales. His
employment contract7 also contained a "Confidentiality of Documents and Non:-Compete
Clause"8 which, among others, barred him from disclosing confidential information, and from working in
any business enterprise that is in direct competition with CPI "while [he is] employed and for a period of
one year from date of resignation or termination from [CPI]." Should Babiano breach any of the terms
thereof, his "forms of compensation, including commissions and incentives will be forfeited."9

After receiving reports that Babiano provided a competitor with information regarding CPI's marketing
strategies, spread false information regarding CPI and its projects, recruited CPI's personnel to join the
competitor, and for being absent without official leave (AWOL) for five (5) days, CPI, through its
Executive Vice President for Marketing and Development, sent Babiano a Notice to why he should not
be charged with disloyalty, conflict of interest, and breach of trust and confidence for his actuations.
Babiano tendered his resignation and revealed that he had been accepted as Vice President of First
Global, a competitor of CPI. Babiano was served a Notice of Termination for: (a) incurring
AWOL; (b) violating the "Confidentiality of Documents and Non-Compete Clause" when he joined a
competitor enterprise while still working for CPI and provided such competitor enterprise information
regarding CPI' s marketing strategies; and (c) recruiting CPI personnel to join a competitor. Respondents
filed a complaint for non-payment of commissions and damages against CPI and Antonio before the
NLRC. For its part, CPI maintained that Babiano is merely its agent tasked with selling its projects.
Nonetheless, he was afforded due process in the termination of his employment which was based on
just causes.

ISSUE: W/N Babiano is an employee of CPI

RULING: Article 1370 of the Civil Code provides that "[i]f the terms of a contract are clear and leave no
doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control."
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CALAMBA, MARION JOSSETTE B.

In the case at bar, CPI primarily invoked the "Confidentiality of Documents and Non-Compete Clause"
found in Babiano's employment contract55 to justify the forfeiture of his commissions, viz.: All records
and documents of the company and all information pertaining to its business or affairs or that of its
affiliated companies are confidential and no unauthorized disclosure or reproduction or the same will be
made by you any time during or after your employment. And in order to ensure strict compliance
herewith, you shall not work for whatsoever capacity, either as an employee, agent or consultant with
any person whose business is in direct competition with the company while you are employed and for
a period of one year from date of resignation or termination from the company.

Verily, the foregoing clause is not only clear and unambiguous in stating that Babiano is barred to "work
for whatsoever capacity x x x with any person whose business is in direct competition with [CPI] while
[he is] employed and for a period of one year from date of [his] resignation or termination from the
company," it also expressly provided in no uncertain terms that should Babiano "[breach] any term of
[the employment contract], forms of compensation including commissions and incentives will be
forfeited."

In sum, the Court thus holds that the commissions of Babiano were properly forfeited for violating the
"Confidentiality of Documents and Non-Compete Clause." On the other hand, CPI remains liable for the
unpaid commissions of Concepcion in the sum of P591,953.05.

G.R. No. 149578 April 10, 2003

EVELYN TOLOSA vs NLRC
FACTS: Evelyn was the widow of Capt Virgilio who was hired by Qwana-Kaiun, through its manning
agent, Asia Bulk to be the master of the Vessel named M/V Lady Dona. His contract officially began on
November 1, 1992, as supported by his contract of employment when he assumed command of the
vessel in Yokohama, Japan. The vessel departed for Long Beach California, passing by Hawaii in the
middle of the voyage. At the time of embarkation, CAPT. TOLOSA was allegedly shown to be in good
health.

ISSUE: Whether or not Evelyn is entitled to the monetary awards granted by the labor arbiter."

RULING: As a rule, labor arbiters and the National Labor Relations Commission have no power or
authority to grant reliefs from claims that do not arise from employer-employee relations. They have no
jurisdiction over torts that have no reasonable causal connection to any of the claims provided for in the
Labor Code, other labor statutes, or collective bargaining agreements.

Petitioner contends that the labor arbiter's monetary award has already reached finality, since private
respondents were not able to file a timely appeal before the NLRC.

This argument cannot be passed upon in this appeal, because it was not raised in the tribunals a quo.
Well-settled is the rule that issues not raised below cannot be raised for the first time on appeal. Thus,
points of law, theories, and arguments not brought to the attention of the Court of Appeals need not --
and ordinarily will not -- be considered by this Court. Petitioner's allegation cannot be accepted by this
Court on its face; to do so would be tantamount to a denial of respondents' right to due process.

G.R. No. 196539, October 10, 2012

MARIETTA N. PORTILLO vs.RUDOLF LIETZ, INC, G.R. No. 196539, October 10, 2012
FACTS: Portillo was hired by Lietz, Inc as a sales personnel. In her employment contract, a goodwill
clause was incorporated which prohibited Portillo to work for a competitor of Lietz’s for 3 years should
her employment be terminated. Upon her resignation, Portillo filed a labor complaint for non-payment
of salary and other monetary benefits. Lietz admitted liability to the money claims of Portillo but raised
the defense of legal compensation. It alleged Portillo to have violated the goodwill clause by becoming
an employee of a direct competitor for which she must be held liable for liquidated damages.

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 CALAMBA, MARION JOSSETTE B.

ISSUE: W/N Portillo’s money claims for unpaid salaries may be offset against Lietz’ claim for liquidated
damages.

HELD: NO. Portillo’s claim for unpaid salaries is a money claim that arises out of or in connection with
an employer-employee relationship, while Lietz Inc.’s claim against Portillo for violation of the goodwill
clause is a money claim based on an act done after the cessation of the employment relationship. And,
while the jurisdiction over Portillo’s claim is vested in the labor arbiter, the jurisdiction over Lietz Inc.’s
claim rests on the regular courts.

The difference in the nature of the credits that one has against the other, which difference in turn
results in the difference of the forum where the different credits can be enforced, prevents the
application of compensation. Simply, the labor tribunal in an employee’s claim for unpaid wages is
without authority to allow the compensation of such claims against the post-employment claim of the
former employer for breach of a post-employment condition. The labor tribunal does not have
jurisdiction over the civil case of breach of contract.

G.R. No. 122791 February 19, 2003

PLACIDO O. URBANES, JR. vs SOLE
FACTS: Urbanes, Jr., under the name and style of Catalina Security Agency, entered into an
agreement1 to provide security services to respondent Social Security System (SSS). During the effectivity
of the agreement, petitioner, requested the SSS for the upward adjustment of their contract rate. As his
May 16, 1994 letter to the SSS remained unheeded, petitioner sent anotherletter,3 dated June 7, 1994,
reiterating the request, which was followed by still another letter,4 dated June 8, 1994. He pulled out his
agency’s services from the premises of the SSS and another security agency, Jaguar, took over. He filed a
complaint6 with the DOLE-NCR against the SSS seeking the implementation of Wage Order No. NCR-03.

ISSUE: W/N, the labor tribunals have jurisidiction over the case

RULING: No. RTC has jurisdiction over the subject matter of the present case. It is well settled in law
and jurisprudence that where no employer-employee relationship exists between the parties and no
issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any
collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint,
private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of
money and damages on account of petitioner's alleged breach of its obligation under their Guard
Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to
the regular courts. While the resolution of the issue involves the application of labor laws, reference
to the labor code was only for the determination of the solidary liability of the petitioner to the
respondent where no employer-employee relation exists.21

In the case at bar, even if petitioner filed the complaint on his and also on behalf of the security guards,
the relief sought has to do with the enforcement of the contract between him and the SSS which was
deemed amended by virtue of Wage Order No. NCR-03. The controversy subject of the case at bar is
thus a civil dispute, the proper forum for the resolution of which is the civil courts.

But even assuming arguendo that petitioner’s complaint were filed with the proper forum, for lack of
cause of action it must be dismissed.

MILAN V NLRC

FACTS: Petitioners and their families were allowed to occupy SMI Village, out of liberality and for the convenience of its
employees on the condition that the employees would vacate the premises anytime the Company deems fit. They were
informed that effective October 10, 2003, Solid Mills would cease its operations due to serious business losses.
NAFLU(collective bargaining agent) recognized Solid Mills’ closure due to serious business losses in their memorandum of
agreement. The memorandum of agreement provided for Solid Mills’ grant of separation pay less accountabilities, accrued sick
leave benefits, vacation leave benefits, and 13th month pay to the employees. After filing its Department of Labor and
Employment termination report, Solid Mills sent to petitioners individual notices to vacate SMI Village. Employees were
required to sign a memorandum of agreement with release and quitclaim before their vacation and sick leave benefits, 13th

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CALAMBA, MARION JOSSETTE B.

month pay, and separation pay would be released. Those who signed the memorandum of agreement were considered to have
agreed to vacate SMI Village, and to the demolition of the constructed houses inside as condition for the release of their
termination benefits and separation pay. Petitioners refused to sign the documents and demanded to be paid their benefits
and separation pay. They filed complaints before the Labor Arbiter for alleged non-payment of separation pay, accrued sick and
vacation leaves, and 13th month pay arguing that their accrued benefits and separation pay should not be withheld because
their payment is based on company policy and practice while 13th month pay is based on law

LA ruled in favor of petitioners that Solid Mills illegally withheld petitioners’ benefits and separation pay. The MOA stated no
condition to the effect that petitioners must vacate Solid Mills’ property before their benefits could be given to them.
Petitioners’ possession should not be construed as petitioners’ “accountabilities” that must be cleared first before the release
of benefits.25 Their possession “is not by virtue of any employer-employee relationship.” It is a civil issue, which is outside the
jurisdiction of the Labor Arbiter. NLRC affirmed paragraph 3 of the Labor Arbiter’s dispositive portion, but reversed paragraphs
1 and 2. monetary claims in the form of separation pay, accrued 13th month pay for 2003, accrued vacation and sick leave pays
are held in abeyance pending compliance of their accountabilities to respondent company by turning over the subject lots they
respectively occupy at SMI Village Sucat Muntinlupa City, Metro Manila to herein respondent company. NLRC noted that
complainants Linga, Linga, Mata, and Damian were already paid their respective separation pays and benefits, while Mahilom
already retired long before Solid Mills’ closure and was already given her retirement benefits.

NLRC ruled that because of petitioners’ failure to vacate Solid Mills’ property, Solid Mills was justified in withholding their
benefits and separation pay. Solid Mills granted the petitioners the privilege to occupy its property on account of petitioners’
employment. It had the prerogative to terminate such privilege. The termination of Solid Mills and petitioners’ employer-
employee relationship made it incumbent upon petitioners to turn over the property to Solid Mills. CA ruled that Solid Mills’ act
of allowing its employees to make temporary dwellings in its property was a liberality on its part. It may be revoked any time at
its discretion as a consequence of Solid Mills’ closure and the resulting termination of petitioners, the employer-employee
relationship between them ceased to exist.

ISSUE: W/N, NLRC has jurisdiction over the claims from eer? W/N Solid Mills has the right to withhold benefits

HELD: YES, NLRC has jurisdiction to determine, preliminarily, the parties’ rights over a property, when it is necessary to
determine an issue related to rights or claims arising from an employer-employee relationship. An employer is allowed to
withhold terminal pay and benefits pending the employee’s return of its properties.

Article 217 provides that the LA, in his or her original jurisdiction, and NLRC, in its appellate jurisdiction, may determine issues
involving claims arising from employer-employee relations. As a general rule, therefore, a claim only needs to be sufficiently
connected to the labor issue raised and must arise from an employer-employee relationship for the labor tribunals to have
jurisdiction.

In this case, respondent Solid Mills claims that its properties are in petitioners’ possession by virtue of their status as its
employees. Respondent Solid Mills allowed petitioners to use its property as an act of liberality. Put in other words, it would
not have allowed petitioners to use its property had they not been its employees. The return of its properties in petitioners’
possession by virtue of their status as employees is an issue that must be resolved to determine whether benefits can be
released immediately. The issue raised by the employer is, therefore, connected to petitioners’ claim for benefits and is
sufficiently intertwined with the parties’ employer-employee relationship. Thus, it is properly within the labor tribunals’
jurisdiction.

The preferential treatment given by our law to labor, however, is not a license for abuse.84 It is not a signal to commit acts of
unfairness that will unreasonably infringe on the property rights of the company. Both labor and employer have social utility,
and the law is not so biased that it does not find a middle ground to give each their due.

Clearly, in this case, it is for the workers to return their housing in exchange for the release of their benefits. This is what they
agreed upon. It is what is fair in the premises.

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