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1. Petitioners were the employees of Livi Manpower Services. They were assigned to the respondent
pursuant to a manpower supply agreement as promotional merchandisers.
2. It was provided in the agreement that: 1) California would have no control or supervision over the
workers as to how they perform or accomplish their work, 2) Livi is an independent contractor and that it
has the sole responsibility of complying with all the existing as well as future laws, rules and regulations
pertinent to employment of labor, 3) the assignment to California was seasonal and contractual, and 4)
payroll, including COLA and holiday pay shall be delivered Livi at Californias premises.
3. Petitioners were made to sign 6-month employment contracts which were renewed for the same
period. Unlike regular employees of California, they did not receive fringe benefits and bonuses and were
paid only a daily allowance.
4. Petitioners contend that they have become regular employees of California. Subsequent to their claim
for regularization, California no longer re-hired them. Livi, on the other hand, claims the workers as its
employees and that it is an independent contractor.
5. Labor Arbiter found that no employer-employee relationship existed. The NLRC affirmed the ruling.
Is there an employer-employee relationship between California and the petitioners?
YES. The existence of an employer-employee relationship is a question of law and cannot be made
subject to agreement. The stipulations in the manpower supply agreement will noterase either partys
obligations as an employer.
Livi is a labor-only contractor, notwithstanding the provisions in the agreement. The nature of ones
business is not determined by self-serving appellations but by test provided by statute and the prevailing
case law.
Californias contention that the workers are not performing activities which are directly related to its
general business of manufacturing is untenable. The promotion or sale of products, including the task of
occasional price tagging, is an integral part of the manufacturing business. Livi as a placement agency
had simply supplied the manpower necessary for California to carry out its merchandising activities, using
the latters premises and equipment. Merchandising is likewise not a specific project because it is an
activity related to the day-to-day operations of California.
Based on Article 106 of the Labor Code, the labor-only contractor is considered merely an agent of the
employer and liability must be shouldered by either one or by both.
Petitioners are ordered reinstated as regular employees.
1. Pioneer Multi-Services Co (PIONEER) and Lipercon Services, Inc (LIPERCON) are manning
companies with which Coca-Cola successively entered into contracts for the supply of manpower needs
of its plant in Tagbilaran.
2. Coca-Colas contract with Pioneer was executed on May 28, 1983 and that with Lipercon, 5 years later,
on December 17, 1988.
3. 11 persons were claiming they were employees of Coca-Cola in its Tagbilaran City Plant. They filed a
complaint against Coca-Cola with the Regional Arbitration Board of the National Labor Relations
Commission in Cebu City.
4. In the decision of the RAB, it was found that the complainants were supplied as workers to Coca-Cola
first by Pioneer and later by Lipercon. When Lipercon entered into the picture, the complainants were
already regular employees of Coca-Cola. This is because while Lipercon was an independent contractor,
its predecessor Pioneer was not.
5. The Commission revered the Labor Arbiters conclusion that Lipercon was an independent labor
contractor. It declared it instead to be a mere labor-only contractor.
Whether or not Lipercon is a labor only contractor.
The SC held in the negative. The NLRC grounded its decision solely on an earlier case where the court
held Lipercon to a be a Labor only contractor because it failed to prove that it has substantial capital,
investment, tools, etc.
It is not so in the present case. Here, there is substantial evidence detailed by the labor arbiter, to
establish Lipercons character as an independent contractor in the real sense of the word. The Labor
Arbiters ruling is therefore more acceptable than that of the Commission because its decision was
founded solely on an inapplicable precedent.
Lipercon proved to be an independent contractor. Aside from hiring its own employees and paying the
workers their salaries, it also exercised supervision and control over them which is the most important
aspect in determining employer-employee relations. That indeed has substantial capital is proven by the
fact that it did not depend upon its billing on respondent regarding payment of workers salaries. And
when complainants were separated from Lipercon, they singed quitclaim and release documents.

1. Mrs. Segundina Noguera leased her premises located at Ermita, Manila to Tourist World Service, Inc.
(TWSI), represented by Eliseo Canilao, for the latters use as branch office. In the said contract Mrs. Lina
Sevilla held herself solidarily liable with TWSI for the prompt payment of the monthly rental agreed on.
2. When the branch office was opened, the same was run by petitioner Mrs. Sevilla, who was designated
as branch manager by TWSI. For any fare bought in on the efforts of Mrs. Sevilla, 4% was to go her and
3% was to be withheld by TWSI.
3. In November 1961, TWSI was allegedly informed that Mrs. Sevilla was connected with a rival travel
firm. Since the branch office was losing, TWSI considered closing it down. The firms board of directors
issued two resolutions; the first abolishing the office of manager of the Ermita Branch Office and the
second, authorizing the corporate secretary to receive the property of TWSI in said branch.
4. In January 1962, the lease contract to use the premises as branch office was terminated. In June 1962,
the Corporate Secretary went over to the office to comply with the mandate of the resolutions. Finding the
premises locked and unable to contact Mrs. Sevilla, he padlocked the premises to protect the interests of
5. As such, petitioners Spouses Sevilla filed a complaint against respondents TWSI, Canilao and
Noguera, praying for mandatory preliminary injunction. Petitioners claim that Mrs. Sevillas relationship
with TWSI was one of joint business venture and not one of employment.
6. In its answer, TWSI contend that Mrs. Sevilla was its employee and as such was designated manager.
7. The trial court held for the private respondents. It ruled that TWSI, being the true lessee, has the
privilege to terminate the lease and padlock the premises. It also held that Mrs. Sevilla was a mere
employee of TWSI and that she was bound by the act of her employer.
8. The Court of Appeals affirmed said decision, Hence, the instant petition.
Whether or not there is an employer-employee relationship between TWSI and Mrs. Sevilla.
NO. There is no employer-employee relationship between TWSI and Mrs. Sevilla. There has been no
uniform test to determine the existence of an employer-employee relation. In general, The Court has
relied in the so-called control test, where the person for whom the services are performed reserves a
right to control not only the end to be achieved but also the means to be used in reaching such end.
The records will show that the petitioner, Lina Sevilla, was not subject to control by the private respondent
Tourist World Service, Inc., either as to the result to the means used in connection therewith. In the first
place, under the contract of lease covering the Tourist Worlds Ermita office, she had bound herself in
solidum as and for rental payments. A true employee cannot be made to part with his own money in
pursuance of his employers business, or otherwise, assume any liability thereof. In that event, the parties
must be bound by some other relation, but certainly not employment. In the second place, when the
branch office was opened, the same was run by Mrs. Sevilla payable to TWSI. Thus it cannot be said that
she was under the control of TWSI as to the means used. She obviously relied on her own capabilities.
It is further admitted that Mrs. Sevilla was not in the companys payroll. For her efforts, she retained 4% in
commissions from airline bookings, the remaining 3% going to TWSI. Unlike an employee then, who
earns a fixed salary usually, Mrs. Sevilla earned compensation in fluctuating amounts depending on her
booking successes.
The fact that Sevilla had been designated branch manager does not make her, ergo, TWSIs employee.
Employment is determined by the right of control test and certain economic parameters. Titles are weak
However, there is no joint venture or partnership between TWSI and Mrs. Sevilla, either. The Court is of
the opinion that the relationship of said parties is one that of a principal and an agent. But unlike simple
grants of a power of attorney, the agency that the Court hereby declares to be compatible with the intent
of the parties cannot be revoked at will. The reason is that it is an agency coupled with an interest. Thus,
TWSI is held liable for damages for its unwarranted revocation of the contract of agency.

This is originally filed with the Social Security Commission (SSC) via petition of 17 persons who styled
themselves as Caddies of Manila Golf and Country Club-PTCCEA for the coverage and availment of
benefits of the Social Security Act as amended, PTCCEA (Philippine Technical, Clerical, Commercial
Employees Association) a labor organization where which they claim for membership.
The same time two other proceedings were filed and pending. These are certification election case filed
by PTCCEA on behalf of the same caddies of Manila Golf and Country club which was in favor of the
caddies and compulsory arbitration case involving PTCCEA and Manila Golf and Country Club which was
dismissed and ruled that there was no employer-employee relationship between the caddies and the club.
Whether or not rendering caddying services for members of golf clubs and their guests in said clubs
courses or premises are the employees of such clubs and therefore within the compulsory coverage of
the Social Security System (SSS).
SC Ruling:
The Court does not agree that the facts logically point to the employer-employee relationship.
In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the
privilege of pursuing their occupation within the premises and grounds of whatever club they do work in.
They work for the club to which they attach themselves on sufferance but, on the other hand, also without
having to observe any working hours, free to leave anytime they please, to stay away for as long they
These considerations clash frontally with the concept of employment. It can happen that a caddy who has
rendered services to a player on one day may still find sufficient time to work elsewhere. Under such
circumstances, the caddy may leave the premises and to go to such other place of work that he wishes.
These are things beyond the control of the petitioner.
The caddy (LLamar) is not an employee of petitioner Manila Golf and Country Club and the petitioner is
under no obligation to report him for compulsory coverage of SSS.

Insular Life Assurance Co., Ltd. vs. NLRC


On August 21, 1992, Pantaleon delos Reyes the private respondent and petitioner entered into
an agency contract wherein the former is authorized to solicit within the Philippines applications for life
insurance and annuities for which he would be paid compensation in the form of commissions. On March
1, 1993, parties entered into another contract wherein private respondent was appointed as Acting Unit

As such, the duties and responsibilities of De los Reyes included the recruitment, training,
organization and development within his designated territory of a sufficient number of qualified,
competent and trustworthy underwriters, and to supervise and coordinate the sales efforts of the
underwriters in the active solicitation of new business and in the furtherance of the agency's assigned
goals. It was similarly provided in the management contract that the relation of the acting unit manager
and/or the agents of his unit to the company shall be that of independent contractor.

Private respondent worked concurrently as agent and Acting Unit Manager until he was notified
by petitioner on November 18, 1993 that his services were terminated effective December 18, 1993. He
filed a complaint for illegal dismissal before the labor arbiter which dismissed the same for lack of
jurisdiction, there being no employer-employee relationship. On appeal however, NLRC reversed such
decision, finding that there is an employer-employee relationship.

Whether or not NLRC has jurisdiction there being an employer-employee relationship.


Yes. It has been settled that an insurance agent on commission basis is not an employee of the
insurance company. However, delos Reyes in this case is not simply an agent but was also appointed as
Acting Unit Manager under the Management (Second) Contract. As such, as found out pursuant to the
contract itself, there is an employer-employee relationship applying the four-fold test.

Petitioner contends that private respondent was never required to go through the pre-employment
procedures and that the probationary employment status was reserved only to employees of petitioner.
However, the provisions of the contract show otherwise. Private respondent was appointed as Acting Unit
Manager only upon the recommendation of the District Manager. This indicates that private respondent
was hired by petitioner because of the favorable endorsement of its duly authorized officer. The
endorsement was based on his performance as an agent. It can be concluded that the agent phase is a
probationary period for the eventual employment as unit manager.

Petitioner also contends that private respondent was compensated on commission basis.
However the contract provides that delos Reyes is entitled to the free portion of Unit Development
Financing which for all intents and purposes comprised the salary regularly paid to him by petitioner.
Petitioner also exercised power of dismissal because the contract provides for grounds thereof and that
the private respondent must exclusively work with the company. It was also found out by NLRC that
petitioner indeed exercise control over the private respondent because he was required to meet certain
manpower and production quotas.

Angelina Francisco vs. NLRC

In 1995 Francisco was hired by Kasei Corporation during the latter's incorporation stage. SHe
was designated as accountant and corporate secretary and was assigned to handle all accounting needs
of the company. She was also designated as liaison officer to secure business permits, construction
permits etc. Althoug designated as Corp Sec, she was not entrusted with the corporate documnets;
neither did she attend any board meeting nor required to do so.

In 1996, she was designated as Acting Manager who was assigned to handle recruitment of all
employees and perform management administration function. Thereafter, she was replaced by Liza
Fuentes as manager. She alleged that she was required to sign a prepared resolution for her placement
but she was assured that she would still be connected with Kasei Corp. However, Kasei Corp reduced
her salary by P2,500/month. She did not receive her midyear bonus and on October 2001, did not receive
her salary. She demanded for the payment thereof but she was informed that she is no longer connected
with the company. Hence she filed an action for constructive dismissal before the labor arbiter (LA).

Petitioner contends that they did not exercise control and supervision over Francisco. She did not
have daily time record and may come and leave the office any time she wanted. And that her designation
as technical consultant depended solely upon the will of the management and hence her consultancy
may be terminated any time. The LA held that there was an illegal dismissal. This was affirmed by NLRC
but was reversed by CA on appeal. Hence this petition.

Whether there is an employer-employee relationship.

The control test to determine presence of employer-employee relationship is sometimes not
enough; it is insufficient to give a complete picture of the relationship between parties, owing to the
complexity of such relationship where several positions have been held by the worker. Economic realities
of the employment relations help provide a comprehensive analysis of the true classification of the
individual, whether as employee, independent contractor, corporate officer or some other capacity.

The better approach would therefore be to adopt a two-tiered test involving: (1) the putative
employers 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 determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services performed are
an integral part of the employers business; (2) the extent of the workers investment in equipment and
facilities; (3) the nature and degree of control exercised by the employer; (4) the workers opportunity for
profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise; (6) the permanency and duration of the relationship between the worker
and the employer; and (7) the degree of dependency of the worker upon the employer for his continued
employment in that line of business.

The proper standard of economic dependence is whether the worker is dependent on the alleged
employer for his continued employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation
because she was under the direct control and supervision of Seiji Kamura, the corporations Technical
Consultant. She reported for work regularly and served in various capacities as Accountant, Liaison
Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially the same job
functions, that is, rendering accounting and tax services to the company and performing functions
necessary and desirable for the proper operation of the corporation such as securing business permits
and other licenses over an indefinite period of engagement.

Under the broader economic reality test, the petitioner can likewise be said to be an employee of
respondent corporation because she had served the company for six years before her dismissal,
receiving check vouchers indicating her salaries/wages, benefits, 13
month pay, bonuses and
allowances, as well as deductions and Social Security contributions from August 1, 1999 to December 18,
2000. Petitioners membership in the SSS as manifested by a copy of the SSS specimen signature card
which was signed by the President of Kasei Corporation and the inclusion of her name in the on-line
inquiry system of the SSS evinces the existence of an employer-employee relationship between petitioner
and respondent-corporation.

It is therefore apparent that petitioner is economically dependent on respondent-corporation for
her continued employment in the latters line of business.

(CLO), respondents.
This is an appeal from a decision of the Court of Industrial Relation holding that the parers and "shellers"
of the petitioner Sunshine Coconut Products Co., Inc., are its laborers entitled to twelve days sick leave
(one day for each month of service), notwithstanding the fact that they are piece-workers under the
pakiao system. The contention of the petitioner is that said "parer" and "shellers" are independent
contractors and do not fall within the category of employees or laborers.
The Court of Industrial Relation has relied upon the rule laid down in the case of Philadelphia Record
Company, 69 N.L.R.B., 1232 (1946), to the effect that when a worker possesses some attributes of an
employee and others off an independent contractor which make him fall within an intermediate area he
may be classified under the category off an employee when the economic facts of the relation make it
more nearly one of employment than one of independent business enterprise with to the ends sought to
be accomplished. Counsel for the petitioner does not dispute the correctness or applicability of the rule
but it is vigorously contended that in the case at bar the economic facts characteristic of the independent
contractor far outweigh the economic facts indicative of an employee. We are not called upon to rule on
the accuracyof petitioner's contention since the conclusion of the Court of Industrial relation on the matter
is binding this Court. In other word the ruling that the "parers" and "shellers" have the status of employee
or laborers carries the factual verdict that economic facts showing such status outweigh those indicative
of an independent contractor. Some facts expressly invoked by the Court of Industrial Relations are: That
the "parers" and "shellers" work under some degree of control or supervision of the company if not under
its absolute direction; that said " parers" and "shellers" form stable groups composed of matured men and
women who regularly work at shelling and paring nuts that for the most part they depend on their work in
the Sunripe Coconut Products Co., Inc. For their livelihood; that they are admittedly working in the factory
of said company alongside person who are indisputably employed by said company. As already stated
whether these specific facts are outweighed as contended by the petitioner by facts demonstrative of the
status of an independent contractor is a question decided adversely to the petitioner when the Court of
Industrial Relations held that the "parers" and "shellers" are laborers or employees.
It is also pretended for the petitioner for the petitioner that the Court of Industrial Relations departed from
the definition of the word "employee" or "laborer" found in the Workmen's Compensation Law namely: "
'Laborer' is used as a synonym off employee,' and it means every person who has entered the
employment of or works under a service or apprenticeship contract for an employer. . . ." (Section 39 [b],
Workmen's Compensation Law as amended.) The Court of Industrial relation of course adverted to the
following definition; "An employee is any person in the service of another under a contract for hire express
or implied oral or written. " (Section 7, Labor Union by Dangle and Scriber, p. 7, citing McDermott's Case,
283 Mass. 74; Werner vs. Industrial Comm., 212 Wis., 76) In essence however the ruling of the Court of
Industrial Relation does not run counter to the definition given in the Workmen's Compensation Law.
Counsel for the petitioner have stressed the argument that the principal test in determining whether a
worker is an employee or an independent contractor is the employer's right of control over the work and
not merely the right to control the result it being intimated that the "parers" and shellers" are controlled by
the petitioner only to the extent "that the nut are pared whole or that there is not much meat wasted."
Even under the criterion adopted by the petitioner it would not be amiss to state thatthe requirement
imposed on the "parers" and "shellers" to the effect that the nuts are pared whole or that there is not
much meat wasted," in effect limits or that there is not much meat wasted," in effect limits or controls the
means or details by which said workers are to accomplish their services. It is inconceivable that the
"parers " and "shellers" in order to meet the requirement of the petitioners would not follow a uniform
standard in the performance of their work.
Petitioner also insists that the "parers" and "shellers" are piece-workers under the "pakiao" system. In
answer, suffice it to observe that Commonwealth Act No. 103, as amended expressly provides that "A
minimum wage or share shall be determined and fixed for laborers working by the hour day or month or
by piece-work and for tenants sharing in the crop or paid by measurement unit. . . ." (Section 5.) The
organic law of the Court of Industrial Relation therefore even orders that laborers may be paid by piece-
work; and the facts that the "parers" and shellers" are paid a fixed amount for a fixed number of nuts
pared or shelled does not certainly take them out of the purview of Commonwealth Act No. 103.
It is unnecessary to discuss at length the other facts pointed out by the petitioner in support of the
proposition that said "parers" and shellers" are independent contractors, because a ruling on the matter
would necessarily involve a factual inquiry which we are not authorized to makeEven so we would
undertake to advance the general remark that inn cases of this kind wherein laborers are usually
compelled to work under condition and term dictated by the employer a reasonably wide latitude of action
and judgment should be given to the Court of Industrial Relations with a view to settling industrial disputes
conformably to the intents and purposes of its organic law. Without in the least intimating that the relation
between the "parers" and "shellers" on the one hand and the petitioner on the other as planned out by the
latter was conceived knowingly to deprive said workersof the benefits accruing to workers who are
admittedly employees or laborersunder Commonwealth Act No. 103 or the Workmen's Compensation law
it is not difficult to surmise that a contrary decision is likely to set a precedent that may tend to encourage
the adoption of a similar scheme by many other or even all employers.
The appealed decision of the Court of Industrial Relations is therefore affirmed with costs against the
petitioner. So ordered.

Domasig vs. NLRC

Eddie Domasig was employed by respondent Cata Garments Corporation as Salesman since
July 6, 1986. He received a monthly salary of 1500 a month plus commission. In August 29, 1992
respondent company dismissed petitioner based on an allegation that he was being pirated by competitor
company but was declined by the petitioner. Respondent company denied that petitioner was its regular
employee; instead it tried to prove that petitioner was only a commission agent who receives a
commission of 5.00 per article sold and 2.50 on bargain price. To support the claim, company presented
the list of Sales Collections, Computation of Commission due, expenses incurred, cash advances
received for the month of January and March 1992.On the other hand, petitioner presented the company
ID issued to him by respondent company and the cash vouchers to prove that he receives a monthly
salary. The labor arbiter decided in favor of petitioner, but was set aside by NLRC declaring that there
was no sufficient evidence presented to prove the presence of employer-employee relationship, thus
Labor Arbiters decision was not supported by evidence. It ordered that the case be reverted to the
arbitration branch of origin for further proceeding.

Whether or not the NLRC gravely abused its discretion in vacating and setting aside the decision of the
labor arbiter and remanding the case to the arbitration branch of origin for further proceedings. Whether
or not there is an employer-employee relationship between petitioner and respondent.

In the case at bar respondent NLRC was not convinced that the evidence presented by the
petitioner, consisting of the identification card issued to him by private respondent corporation and the
cash vouchers reflecting his monthly salaries covering the months stated therein, settled the issue of
employer-employee relationship between private respondents and petitioner. It has long been established
that in administrative and quasi-judicial proceedings, substantial evidence is sufficient as a basis for
judgment on the existence of employer-employee relationship. No particular form of evidence is required
is required to prove the existence of such employer-employee relationship. Any competent and relevant
evidence to prove the relationship may be admitted.
Substantial evidence has been defined to be such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. In a business establishment, an identification card is usually
provided not only as a security measure but mainly to identify the holder thereof as a bonafide employee
of the firm that issues it. Together with the cash vouchers covering petitioner's salaries for the months
stated therein, we agree with the labor arbiter that these matters constitute substantial evidence adequate
to support a conclusion that petitioner was indeed an employee of private respondent. The list of sales
collection including computation of commissions due, expenses incurred and cash advances received
(Exhibits "B" and "B-1") which, according to public respondent, the labor arbiter failed to appreciate in
support of private respondents allegation as regards the nature of petitioner's employment as a
commission agent, cannot overcome the evidence of the ID card and salary vouchers presented
petitioner which private respondents have not denied.
The list presented by private respondents would even support petitioner's allegations that, aside
from a monthly salary of P1, 500.00, he also received commissions for his work as a salesman of private
respondents. Having been in the employ of private respondents continuously for more than one year,
under the law, petitioner is considered a regular employee. Proof beyond reasonable doubt is not
required as a basis for judgment on the legality of an employer's dismissal of an employee, nor even
preponderance of evidence for that matter, substantial evidence being sufficient. Labor Arbiter's decision
on the presence of employer-employee relationship is supported by substantial evidence. On the issue of
dismissal, it was indeed, illegal as it was not supported by any valid basis. Respondent did not deny the
allegation that the sole basis of the dismissal was the allege enticement of other employer to work with
them. Labor Arbiter was reinstated with modifications on the computation of monetary claims.



Petitioners rendered services essential for the cultivation of respondents farm. While the services
were not continuous in the sense that they were not rendered everyday throughout the year, as is the
nature of farm work, petitioners had never stopped working for respondent from year to year from the time
he hired them to the time he dismissed.


Are the petitioners considered as employees?


The nature of their employment, i.e. Pakyao basis, does not make petitioner independent
contractors. Pakyao workers are considered employees as long as the employer exercises control over
the means by which such workers are to perform their work inside private respondents farm, the latter
necessarily exercised control over the performed by petitioners.

The seasonal nature of petitioners work does not detract from the conclusion that employer
employee relationship exits. Seasonal workers whose work is not merely for the duration of the season,
but who are rehired every working season are considered regular employees. The circumstances that
petitioners do not apears in respondents payroll does not destroy the employer employee relationship
between them. Omission of petitioners in the payroll was not within their control, they had no hand in the
preparation of the payroll. This circumstance, even if true, cannot be taken against petitioners.


Complainant Melchor was hired by PTC as a taxi driver under the boundary system. He was
advised to stop working and have a rest after a car accident involving the taxi unit he was driving. He was
told by the PTC that his service was no longer needed. Then the complaint for illegal dismissal was
raised. The petitioner concludes that he had no control over the number of hours private respondent had
to work and the routes he had to take; therefore no employer-employee relationship exists.

Whether or not employer-employee relationship exists.

Boundary system is that of employer-employee and not of lessor-lessee. Under the boundary
system the drivers do not receive fixed wages; all the excess in the amount of boundary was considered
his income but it is not sufficient to withdraw the relationship between them from that of employer and
employee. Private respondents were employees because they had been engaged to perform activities
which were usually necessary or desirable in the usual trade or business of the employer.
The petition was dismissed; the private respondent was entitled for the claim of damages and
illegal dismissal.

HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and FEATI


The private respondent wrote a letter to president of petitioner informing her of the organization of
the Faculty Club into a registered labor union.

President of the Faculty Club sent another letter containing twenty-six demands that have
connection with the employment of the members of the Faculty Club by the University, and requesting an
answer within ten days from receipt thereof. The President of the University answered the two letters,
requesting that she be given at least thirty days to study thoroughly the different phases of the demands.

Meanwhile counsel for the University, to whom the demands were referred, wrote a letter to the
President of the Faculty Club demanding proof of its majority status and designation as a bargaining

President of the Faculty Club filed a notice of strike with the Bureau of Labor alleging as reason
therefore the refusal of the University to bargain collectively.

The parties were called to conferences but efforts to conciliate them failed.

Members of the Faculty Club declared a strike and established picket lines in the premises of the
University, resulting in the disruption of classes in the University. President of the Philippines certified to
the Court of Industrial Relations the dispute between the management of the University and the Faculty
Club pursuant to the provisions of Section 10 of Republic Act No. 875.

The Judge endeavored to reconcile the part and it was agreed upon that the striking faculty
members would return to work and the University would readmit them under a status quo arrangement.
On that very same day, however, the University, 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; and (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.

The respondent judge denied the motion to dismiss. The University filed a motion for
reconsideration by the CIR en banc, without the motion for reconsideration having been acted upon by
the CIR en banc, respondent Judge set the case for hearing but the University moved the cancellation of
the said hearing upon the ground that the court en banc should first hear the motion for reconsi deration
and resolve the issues raised therein before the case is heard on the merits but denied.

Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of court certain
parties, alleging that the University refused to accept back to work the returning strikers, in violation of the
return-to-work order.

The University filed its opposition to the petition for contempt by way of special defense that there
was still the motion for reconsideration which had not yet been acted upon by the CIR en banc. Hence,
this petition.


Whether or not FEATI is an employer within the purview of the Industrial Peace Act.


The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term employer
include any person acting in the interest of an employer, directly or indirectly, but shall not include any
labor organization (otherwise than when acting as an employer) or any one acting in the capacity or agent
of such labor organization.

In this case, the University is operated for profit hence included in the term of employer.
Professors and instructors, who are under contract to teach particular courses and are paid for their
services, are employees under the Industrial Peace Act.

Professors and instructors are not independent contractors. university controls the work of the
members of its faculty; that a university prescribes the courses or subjects that professors teach, and
when and where to teach; that the professors work is characterized by regularity and continuity for a fixed
duration; that professors are compensated for their services by wages and salaries, rather than by profits;
that the professors and/or instructors cannot substitute others to do their work without the consent of the
university; and that the professors can be laid off if their work is found not satisfactory. All these indicate
that the university has control over their work; and professors are, therefore, employees and not
independent contractors.

AL., petitioners,
HON. MACAPANTON ABBAS, Judge of the Court of First Instance of Davao and TEOFILO
Petition for certiorari with a prayer for the issuance of a writ of preliminary injunction filed by the Citizens'
League of Freeworkers, a legitimate labor organization, hereinafter referred to as the Union and its
members against the spouses Teofilo Geronimo and Emerita Mendez, and the Hon. Macapanton Abbas,
as judge of the Court of First Instance of Davao. Its purpose is to set aside the writ of preliminary
injunction issued by the latter in Civil Case No. 3966 and restrain him from proceeding with the case, on
the ground that the controversy involves a labor dispute and is, therefore, within the exclusive jurisdiction
of the Court of Industrial Relations.
It appears that on March 11, 1963, respondents-spouses owners and operators of auto-calesas in Davao
City, filed a complaint with the Court of First Instance of Davao (Civil Case No. 3966) to restrain the Union
and its members, who were drivers of the spouses in said business, from interfering with its operation,
from committing certain acts complained of in connection therewith, and to recover damages. The
complaint alleged that the defendants named therein used to lease the auto-calesas of the spouses on a
daily rental basis; that, unable to get the spouses to recognize said defendants as employees instead of
lessees and to bargain with it on that basis, the Union declared a strike on February 20, 1963 and since
then had paralyzed plaintiffs' business operations through threats, intimidation and violence. The
complaint also prayed for the issuance of a writ of preliminary injunction ex-parte restraining defendants
therein from committing said acts of violence and intimidation during the pendency of the case.
On March 11, 1963 the respondent judge granted the writ prayed for, while deferring action on petitioners'
motion to dissolve said writ to March 20 of the same year.
Meanwhile, on March 12, 1963, petitioners filed a complaint for unfair labor practice against the
respondents-spouses with the Court of Industrial Relations on the ground, among others, of the latter's
refusal to bargain with them. 1awphl.nt
On March 18, 1963, petitioners filed a motion to declare the writ of preliminary injunction void on the
ground that the same had expired by virtue of Section 9 (d) of Republic Act 875. In his order of March 21,
1963, however, the respondent judge denied said motion on the ground that there was no employer-
employee relationship between respondents-spouses and the individual petitioners herein and that,
consequently, the Rules of Court and not Republic Act No. 875 applied to the matter of injunction.
Thereupon the petition under consideration was filed.
In the case of Isabelo Doce vs. Workmen's Compensation Commission, et al. (G.R. No. L-9417,
December 22, 1958), upon a similar if not an altogether identical set of facts, We held:
This case falls squarely within our ruling in National Labor Union v. Dinglasan, 52 O.G., No. 4,
1933, wherein this Court held that a driver of a jeep who operates the same under the boundary
system is considered an employee within the meaning of the law and as such the case comes
under the jurisdiction of the Court of Industrial Relations. In that case, Benedicto Dinglasan was
the owner and operator of TPU jeepneys which were driven by petitioner under verbal contracts
that they will pay P7.50 for 10 hours use under the so called "boundary system." The drivers did
not receive salaries or wages from the owner. Their day's earnings were the excess over the
P7.50 they paid for the use of the jeepneys. In the event that they did not earn more, the owner
did not have to pay them anything. In holding that the employer-employee relationship existed
between the owner of the jeepneys and the drivers even if the latter worked under the boundary
system, this Court said:
"The only features that would make the relationship of lessor and lessee between the
respondent, owner of the jeeps, and the drivers, members of the petitioner union, 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, 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."
Even assuming, arguendo, that the respondent court had jurisdiction to issue the abovementioned writ of
preliminary injunction in Civil Case No. 3966 at the time it was issued, We are of the opinion, and so hold,
that it erred in denying petitioners' motion to set aside said writ upon expiration of the period of thirty days
from its issuance, upon the wrong ground that there was no labor dispute between the parties and that,
therefore, the provisions of Republic Act No. 875 did not apply to the case. As stated heretofore, there
was a labor dispute between the parties from the beginning.
Moreover, upon the filing of the unfair labor practice case on March 12, 1963, the Court of Industrial
Relations acquired complete jurisdiction over the labor dispute and the least that could be done in Civil
Case No. 3966 is either to dismiss it or suspend proceedings therein until the final resolution of the
Wherefore, judgment is hereby rendered setting aside the writ of preliminary injunction issued by the
respondent judge in Civil Case No. 3966 of the Court of First Instance of Davao, with costs.
Concepcion, C.J., Reyes, J.B.L., Barrera, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ.,
Regala, J., took no part.


1. Petitioners were drivers of respondent Philjama International Inc., a domestic corporation engaged in
the operation of "Goodman Taxi." Petitioners used to drive private respondent's taxicabs every other day
on a 24-hour work schedule under the boundary system.
2. The petitioners earned an average of P400.00 daily from which respondent regularly deducts the
amount of P30.00 supposedly for the washing of the taxi units.
3. Believing that the deduction is illegal, petitioners decided to form a labor union to protect their rights
and interests.
4. Upon learning about the plan of petitioners, private respondent refused to let petitioners drive their
taxicabs when they reported for work on August 6, 1991, and on succeeding days.
5. Petitioners suspected that they were singled out because they were the leaders and active members of
the proposed union. Aggrieved, petitioners filed with the labor arbiter a complaint against private
respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees.
6. The labor arbiter dismissed said complaint for lack of merit.
7. On appeal, the NLRC reversed and set aside the judgment of the labor arbiter. The labor tribunal
declared that petitioners are employees of private respondent, and, as such, their dismissal must be for
just cause and after due process.
8. Private respondent's second motion for reconsideration was granted and said court ruled that it lacks
jurisdiction over the case as petitioners and private respondent have no employer-employee relationship.
Expectedly, petitioners sought reconsideration of the labor tribunal's latest decision which was denied.
Hence, the instant petition.

Whether or not employer-employee relationship exists between the petitioners and respondent Philjama
International, Inc.

YES. In the determination the existence of employer-employee relationship, the Supreme Court
has applied the following four-fold test: '(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power of control the employees conduct.'
Under the control test, an employer-employee relationship exists if the 'employer' has reserved the right to
control the 'employee' not only as to the result of the work done but also as to the means and methods by
which the same is to be accomplished. Otherwise, no such relationship exists.

In a number of cases decided by this Court, we ruled that the relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary system is that of
employer-employee and not of lessor-lessee. We explained that in the lease of chattels, the lessor loses
complete control over the chattel leased although the lessee cannot be reckless in the use thereof,
otherwise he would be responsible for the damages to the lessor. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The
management of the business is in the owner's hands. The owner as holder of the certificate of public
convenience must see to it that the driver follows the route prescribed by the franchising authority and the
rules promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages but
get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to
withdraw the relationship between them from that of employer and employee. We have applied by
analogy the above-stated doctrine to the relationships between bus owner/operator and bus conductor,
auto-calesa owner/operator and driver, and recently between taxi owners/operators and taxi drivers.
Hence, petitioners are undoubtedly employees of private respondent because as taxi drivers they perform
activities which are usually necessary or desirable in the usual business or trade of their employer.

Makati Haberdashery vs NLRC


Individual complainants are working for Makati Haberdashery Inc as tailors, seamstress, sewers,
basters, and plantsadoras and are paid on a piece-rate basis (except two petitioners who are paid on a
monthly basis)

In addition, they are given a daily allowance of P 3.00 provided they report before 9:30 a.m. everyday.

Work schedule: 9:30-6 or 7 p.m., Mondays to Saturdays and even on Sundays and holidays during peak

The Sandigan ng Manggagawang Pilipino filed a complaint for underpayment of the basic wages,
underpayment of living allowance, nonpayment of overtime work, nonpayment of holiday pay, and other
money claims.

The Labor Arbiter rendered judgment in favor of complainants which the NLRC affirmed but limited back
wages to one year.

Petitioner urged that the NLRC erred in concluding that an employer-employee relationship existed
between the petitioner and the workers.


1. WON employees paid on piece-rate basis are entitled to service incentive pay?
2. WON there is an Employer-Employee Relationship?


1. NO, fall under exceptions set forth in the implementing rules (this will be reexamined under Article

2. Yes, evident in a Memorandum issued by the Assistant Manager.


1. As to the service incentive leave pay: as piece-rate workers being paid at a fixed amount for performing
work irrespective of time consumed in the performance thereof, they fall under the exceptions stated in
Sec1(d), Rule V, IRR, Book III, Labor Code.

Service Incentive Leave
SECTION 1. Coverage. This rule shall apply to all employees except:
(d) Field personnel and other employees whose performance is unsupervised by the employer including
those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time consumed in the performance thereof;

2. Employer-Employee Relationship

There is such relationship because in the application of the four-fold test, it was found that petitioners had
control over the respondents not only as to the result but also as to the means and method by which the
same is to be accomplished. Such control is proven by a memorandum which enumerates procedures
and instructions regarding job orders, alterations, and their behavior inside the shop issued by the
Assistant Manager which reads in part:

"Effective immediately, new procedures shall be followed:
a. To follow instruction and orders from the undersigned
b. Before accepting the job orders, tailors must check the materials, job orders, due dates, and
other things to maximize efficiency
c. Effective immediately all job orders, must be finished one day before the due date. This can
be done by proper scheduling of job order and if you will cooperate with your supervisors.
d. If there is any problem regarding supervisors or co-tailor inside our shop, consult with me at
once to settle the problem. Fighting inside the shop is strictly prohibited. Any tailor violating
this memorandum will be subject to disciplinary action.

WHEREFORE, the decision of the National Labor Relations Commission dated March 30, 1988 and that
of the Labor Arbiter dated June 10, 1986 are hereby modified. The complaint filed by Pelobello and
Zapata for illegal dismissal docketed as NLRC NCR Case No. 2-428-85 is dismissed for lack of factual
and legal bases. Award of service incentive leave pay to private respondents is deleted. SO ORDERED.
OTHER FACTS: (there are only two main issues, just in case this is going to be asked)

While the first case was pending decision, Pelobello left an open package containing a jusi barong
tagalong with salesman Rivera. He was caught and confronted about this and he explained that this was
ordered by Zapata, also a worker, for his (personal) customer. Zapata allegedly admitted that he copied
the design of the company but later denied ownership of the same.

They were made to explain why no action should be taken against them for accepting a job order which
is prejudicial and in direct competition with the business. However they did not submit and went on AWOL
until the period given for them to explain expired hence the dismissal.

Illegal dismissal complaint on the second case filed before the Labor Arbiter Diosana (THIS IS

LA declared petitioners guilty of illegal dismissal and ordered to reinstate Pelobello and Zapata and
found petitioners violating decrees of Cost-Of-Living Allowance (COLA), service incentive and 13th month
pay. Commission analyst was directed to compute the monetary awards which retroacts to three years
prior to filing of case.
Other issues discussed:
Minimum Wage

Held: No dispute that entitled to minimum wage but court dismissed case for lack of sufficient evidence to
support claim that there was in fact underpayment which was ruled by the LAand which the private
respondents did not appeal to in the NLRC nor in the SC. Well-settled is the rule that an appellee who
has not himself appealed cannot obtain from the appellate court any affirmative relief other than the ones
granted in the decision of the court below.

COLA (Cost-Of-Living Allowance)

Held: Entitled. They are regular employees. IRR of Wage No. 1, 2, and 5 provide that all workers in the
private sector, regardless of their position, designation of status, and irrespective of the method by which
their wages are paid are entitled to such allowance.

13th Month pay

Held: Entitled under Sec. 3(e) of the IRR of PD 851 which is an exception to the exception of such
provision which states that employers whose workers are paid on piece-rate basis in which are covered
by such issuance in so far as such workers are concerned.

Illegal dismissal

Held: Dismissed for justifiable ground based on Article 283 (a)and (c). Inimical to the interest of
the employer. Not dismissed just because of union activities.



Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part of the
filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate their request
that their salary be adjusted in accordance with the minimum wage law.

On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would agree to
their request only if they sign a blank employment contract. Petitioners refused to sign such document.
After which, the Mr. Enero was forced to go on leave on the same month and refused to take him back
when he reported for work. Mr. Maraguinot on the other hand was dropped from the payroll but was
returned days after. He was again asked to sign a blank employment contract but when he refused, he
was terminated.

Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The private
respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA PRODUCTIONS, INC.
and that it was primarily engaged in the distribution & exhibition of movies- but not then making of movies;
(b) That they hire contractors called producers who act as independent contractors as that of Vic Del
Rosario; and (c) As such, there is no employee-employer relation between petitioners and private

The Labor Arbiter held that the complainants are employees of the private respondents. That the
producers are not independent contractor but should be considered as labor-only contractors and as such
act as mere agent of the real employer. Thus, the said employees are illegally dismissed.

The private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter
declaring that the complainants were project employees due to the ff. reasons: (a) Complainants were
hired for specific movie projects and their employment was co-terminus with each movie project; (b)The
work is dependent on the availability of projects. As a result, the total working hours logged extremely
varied; (c) The extremely irregular working days and hours of complainants work explains the lump sum
payment for their service; and (d) The respondents alleged that the complainants are not prohibited from
working with other movie companies whenever they are not working for the independent movie producers
engaged by the respondents.

A motion for reconsideration was filed by the complainants but was denied by NLRC. In effect,
they filed an instant petition claiming that NLRC committed a grave abuse of discretion in: (a) Finding that
petitioners were project employees; (b) Ruling that petitioners were not illegally dismissed; and (c)
Reversing the decision of the Labor Arbiter.

In the instant case, the petitioners allege that the NLRC acted in total disregard of evidence
material or decisive of the controversy.


(a) W/N there exist an employee- employer relationship between the petitioners and the private

(b) W/N the private respondents are engaged in the business of making movies.

(c) W/N the producer is a job contractor.


There exist an employee- employer relationship between the petitioners and the private
respondents because of the ff. reasons that nowhere in the appointment slip does it appear that it was the
producer who hired the crew members. Moreover, it was VIVAs corporate name appearing on heading of
the slip. It can likewise be said that it was VIVA who paid for the petitioners salaries.

Respondents also admit that the petitioners were part of a work pool wherein they attained the
status of regular employees because of the ff. requisites: (a) There is a continuous rehiring of project
employees even after cessation of a project; (b) The tasks performed by the alleged project employees
are vital, necessary and indispensable to the usual business or trade of the employer; and (c) However,
the length of time which the employees are continually re-hired is not controlling but merely serves as a
badge of regular employment.

Since the producer and the crew members are employees of VIVA and that these employees
works deal with the making of movies. It can be said that VIVA is engaged of making movies and not on
the mere distribution of such.

The producer is not a job contractor because of the ff. reasons: (Sec. Rule VII, Book III of the
Omnibus Rules Implementing the Labor Code.)

a. A contractor carries on an independent business and undertakes the contract work on his own
account under his own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected with the performance of
the work except as to the results thereof. The said producer has a fix time frame and budget to
make the movies.

b. The contractor should have substantial capital and materials necessary to conduct his
business. The said producer, Del Rosario, does not have his own tools, equipment, machinery,
work premises and other materials to make motion pictures. Such materials were provided by

It can be said that the producers are labor-only contractors. Under Article 106 of the Labor Code
(reworded) where the contractor does not have the requisites as that of the job contractors.

ASSOCIATION, respondents.


Manila Terminal Company, Inc. hereinafter to be referred as to the petitioner, undertook the
arrastre service in some of the piers in Manila's Port Area at the request and under the control of the
United States Army. The petitioner hired some thirty men as watchmen on twelve-hour shifts at a
compensation of P3 per day for the day shift and P6 per day for the night shift.

The watchmen of the petitioner continued in the service with a number of substitutions and
additions, their salaries having been raised during the month of February to P4 per day for the day shift
and P6.25 per day for the nightshift. The private respondent sent a letter to Department of Labor
requesting that the matter of overtime pay be investigated. But nothing was done by the Dept of Labor.

Later on, the petitioner instituted the system of strict eight-hour shifts.

The private respondent filed an amended petition with the Court of Industrial Relations praying,
among others, that the petitioner be ordered to pay its watchmen or police force overtime pay from the
commencement of their employment.

By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the President
of the Philippines, the entire police force of the petitioner was consolidated with the Manila Harvor Police
of the Customs Patrol Service, a Government agency under the exclusive control of the Commissioner of
Customs and the Secretary of Finance The Manila Terminal Relief and Mutual Aid Association will
hereafter be referred to as the Association.

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision ordered the
petitioner to pay to its police force but regards to overtime service after the watchmen had been
integrated into the Manila Harbor Police, the has no jurisdiction because it affects the Bureau of Customs,
an instrumentality of the Government having no independent personality and which cannot be sued
without the consent of the State.

The petitioner filed a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Both resolutions were denied.

The public respondent decision was to pay the private respondents their overtime on regular days
at the regular rate and additional amount of 25 percent, overtime on Sundays and legal holidays at the
regular rate only, and watchmen are not entitled to night differential pay for past services. The petitioner
has filed a present petition for certiorari.


a. Whether or not the CIR has no jurisdiction to render a money judgment involving obligation in arrears.

b. Whether or not the agreement under which its police force were paid certain specific wages for twelve-
hour shifts, included overtime compensation.

c. Whether or not the Association is barred from recovery by estoppel and laches.

d. Whether or not the nullity or invalidity of the employment contract precludes any recovery by the

e. whether or not the Commonwealth Act No. 4444 does not authorize recovery of back overtime pay.


The Supreme Court affirmed the appealed decision that the petitioner's watchmen will be entitled
to extra compensation only from the dates they respectively entered the service of the petitioner,
hereafter to be duly determined by the Court of Industrial Relations.

On the first issue, the Court of Industrial Relations has no jurisdiction to award a money judgment
was already overruled by this Court on the case of Detective & protective Bureau, Inc. vs. Court of
Industrial Relations and United Employees Welfare Association that under Commonwealth Act No. 103
the Court is empowered to make the order for the purpose of settling disputes between the employer and

On the second issue, based on the case of Detective & Protective Bureau, Inc. vs. Court of
Industrial Relations and United Employees Welfare Association, the law gives them the right to extra
compensation. And they could not be held to have impliedly waived such extra compensation, for the
obvious reason that could not have expressly waived it.

On the third issue, the principle of estoppel and the laches cannot well be invoked against the
Association. it would be contrary to the spirit of the Eight Hour Labor Law, under which as already seen,
the laborers cannot waive their right to extra compensation. If the principle of estoppel and laches is to be
applied, the employee may be compelled to accomplish the same thing by mere silence or lapse of time,
thereby frustrating the purpose of law by indirection.

On the fourth issue, the employee in rendering extra service at the request of his employer has a
right to assume that the latter has complied with the requirement of the law, and therefore has obtained
the required permission from the Department of Labor. This was based on the case of Gotamo Lumber
Co. vs. Court of Industrial Relations, wherein both parties are in pari delicto. Moreover, the Eight-Hour
Law, in providing that "any agreement or contract between the employer and the laborer or employee
contrary to the provisions of this Act shall be null avoid ab initio.

On the fifth issue, based on Fair Labor Standards Act of the United States which provides that
"any employer who violates the provisions of section 206 and section 207 of this title shall be liable to the
employee or employees affected in the amount of their unpaid minimum wages or their unpaid overtime
compensation as the case may be," a provision not incorporated in Commonwealth Act No. 444, our
Eight-Hour Labor Law.

We cannot agree to the proposition, because sections 3 and 5 of Commonwealth Act 444
expressly provides for the payment of extra compensation in cases where overtime services are required,
with the result that the employees or laborers are entitled to collect such extra compensation for past
overtime work. To hold otherwise would be to allow an employer to violate the law by simply, as in this
case, failing to provide for and pay overtime compensation.

Herein respondent, filed a petition against Mercury Drug Company, Incorporated contenting: 1)
payment of their unpaid back wages for work done on Sundays and legal holidays plus 25% additional
compensation from date of their employment up to June 30, 1962; 2) payment of the extra compensation
on work done at night; 3) reinstatement of Januario Referente and Oscar Echalar to their former positions
with back salaries; and as against the respondent union, for its disestablishment and the refund of all
monies it had collected from petitioners.
Mercury Drug is hereby ordered to pay the 69 petitioners another additional sum or premium
equivalent to 25% of their respective basic or regular salaries for nighttime services rendered from March
20, 1961 up to June 30, 1962. Hence, this petition.
Whether or not private respondents are entitled for nighttime work premiums although there is a
waiver of said claims and the total absence of evidence there on?
Yes. Work done at night should be paid more than work done at daytime, and that if that work is
done beyond the workers regular hours of duty, he should also be paid additional compensation for
overtime work; Ruling of C.I.R awarding additional pay for nighttime work is supported by evidence. No
additional evidence was necessary to prove that the private respondents were entitled to additional
compensation for whether or not they were entitled to the same is a question of law which the respondent
court answered correctly. The waiver rule does not apply in the case at bar. Additional compensation for
nighttime work is founded on public policy; hence the same cannot be waived. Petition is dismissed.



1. The Democratic Labor Association filed a complaint against the San Miguel Brewery, Inc., embodying
12 demands for the betterment of the conditions of employment of its members.
2. The company filed its answer to the complaint specifically denying its material averments and
answering the demands point by point. The company asked for the dismissal of the complaint.
3. During the hearing, the union manifested its desire to confine its claim to its demands for overtime,
night-shift differential pay, and attorney's fees, although it was allowed to present evidence on service
rendered during Sundays and holidays, or on its claim for additional separation pay and sick and vacation
leave compensation.
4. After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who was
commissioned to receive the evidence, rendered decision expressing his disposition with regard to the
points embodied in the complaint on which evidence was presented.
5. The demands for the application of the Minimum Wage Law to workers paid on "pakiao" basis,
payment of accumulated vacation and sick leave and attorney's fees, as well as the award of additional
separation pay, were either dismissed, denied, or set aside.
6. Its motion for reconsideration having been denied by the industrial court en bane, which affirmed the
decision of the court a quo with few exceptions, the San Miguel Brewery, Inc. interposed the present
petition for review.

Whether or not outside or field sales personnel are entitled to the benefits of the Eight-Hour Labor Law.

NO. After the morning roll call, the employees leave the plant of the company to go on their respective
sales routes and they do not have a daily time record but the sales routes are so planned that they can be
completed within 8 hours at most, and they receive monthly salaries and sales commission in variable
amounts, so that they are made to work beyond the required eight hours similar to piecework, "pakiao", or
commission basis regardless of the time employed, and the employees' participation depends on their
industry, it is held that the Eight-Hour Labor Law has no application to said outside or field sales
personnel and that they are not entitled to overtime pay.

The Court is in the opinion that the Eight-Hour Labor Law only has application where an employee or
laborer is paid in a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if he
is made to work beyond the requisite period of 8 hours, he should be paid the additional compensation
prescribed by law. This law has no application when the employee or laborer is paid on a piece-work,
"pakiao", or commission basis, regardless of the time employed. The philosophy behind this exemption is
that his earnings are in the form of commission based on the gross receipts of the day. His participation
depends upon his industry so that the more hours he employs in the work the greater are his gross
returns and the higher his commission. This philosophy is better explained in Jewel Tea Co. vs. Willams,
C.C.A. Okl., 118 F. 2d 202, as follows: "The reasons for excluding an outside salesman are fairly
apparent. Such salesman, to a great extent, works individually. There are no restrictions respecting the
time he shall work and he can earn as much or as little, within the range of his ability, as his ambition
dictates. In lieu of overtime he ordinarily receives commissions as extra compensation. He works away
from his employer's place of business, is not subject to the personal supervision of his employer, and his
employer has no way of knowing the number of hours he works per day."