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NAME: Michelle C.

Llaneta-Villamora YEAR/COURSE/SECTION: JD-2A

Case No. 31.


Villuga, et. al., v. NLRC, G.R. No. 75038, 23 August 1993

ISSUE: 1. Is Villuga a member of managerial staff and is not entitled to overtime pay and
services for Sundays and Legal Holidays?

2. Are the rest of the petitioners not employees but independent contractors of private
respondents and are not entitled to their claims under PD Nos. 925, 1123, and 851.

ARGUMENT OF THE PETITIONER (Villuga): His primary work or duty is to cut or


prepare patterns for items to be sewn. There were instances that he distributed and
assigned work to employees but such are occasional only. He also had authority to order
the repair or resewing defective items but those are part of the nature of his work as
cutter and he does not want it to be attributed to his poor cutting. In matters pertaining to
his employee classification, he is a rank and file employee hired to perform the work of
a cutter. Further, he should be paid holiday pays, overtime pays, premium pay for
holiday and rest day and service incentive leave pay.
(Eleven petitioners): They were hired as ironers, repairmen and sewers and paid fixed
amount for every item ironed, sewed or repaired regardless of the time consumed in
accomplishing their task. Moreover, the company allowed them to perform their work at
the convenience of their homes especially when there are large volume of work. They
did not observed regular or fixed hours of work.

ARGUMENT OF THE RESPONDENT (NLRC): Villuga is a managerial staff who perform


the functions of the manager and assistant manager in their absence. He had the
authority to distribute and assign work to the employees and order the repair or resewing
of the defective items. As a member of the managerial employee, he is excluded from
the benefits under Articles 87, 94 and 95 of the Labor Code.
As to the eleven petitioners, they are independent contractors of the private respondent
who were paid on a piece-rate basis and no employer-employee relationship existed,
thus they could not claim labor benefits.

SC RULING: No. Villuga is a rank and file employee and should be entitled to overtime pay,
holiday pay, premium pay for holiday and rest day, service incentive leave pay and
separation pay, in addition to his 13th month pay.

RATIO: Villuga’s function is merely to cut and prepare patterns for items to be sewn. He does
not lay down or implement any of the management policies and does not participate in
policy-making. The test of supervisory or managerial status depends whether a person
has the authority that is not merely routinary or clerical in nature but one that requires
use of independent judgment. As a rank and file employee hired to perform the work of
cutter, he is not excluded from the benefits under the Labor Code. In addition to the 13th
month pay, he should be paid overtime pay, holiday pay, premium pay for holiday and
rest day, and service incentive leave.
The eleven petitioners were employees of the private respondent and not independent
contractors. Considering that they are employed as early as 1972 and the latest is in 1976
and faithfully rendering their services which are necessary for the business of the private
respondent and observing management’s approved standards set for their respective
lines of work as well as the customer’s specifications. Although they are paid on a piece-
rate basis, an employer-employee relationship could not be denied because it is just a
method of compensation and does not define relationship. However, they are not entitled
to payment of overtime pay, holiday pay, premium pay for holiday and rest day and
service incentive leave pay. Moreover, they should be paid 13th month pay because they
are employees of the private respondent.

INSTRUCTION LEARNED: The most determinative factor of an employer-employee


relationship is the existence of the power to control the employees conduct. It merely
calls for the existence of a right to control the manner of doing the work and not the
actual exercise of it.

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