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Labor
Standards
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Submitted To: Labor Arbiter Natividad Roma


Submitted By: Sta. Maria, Iris Jiana A.

Date of Submission: Oct. 18, 2014

SET 1
I.

CASE TITLE:
INSULAR LIFE ASSURANCE VS NLRC, 179 SCRA 459

DATE OF PROMULGATION:
November 15, 1989

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


A mutual life insurance company, it offers individual and group life,
health, and retirement insurance plans.

WHAT DID THE COMPLAINANT DO?


Instituted an action for damages arising from termination of employment.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


He was authorized to solicit applications for insurance policies and
annuities in accordance with the existing rules and regulations. He would be
receiving compensation in the form of commissions.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


No, Basiao is a mere commission agent and not an employee.
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 employeremployee relationship unlike the second, which address both the result and the
means used to achieve it.
The respondents limit themselves to pointing out that Basiao's contract
with the Company bound him to observe and conform to such rules and
regulations as the latter might from time to time prescribe. No showing has been
made that any such rules or regulations were in fact promulgated, much less that
any rules existed or were issued which effectively controlled or restricted his
choice of methods or the methods themselves of selling insurance. Absent
such showing, the Court will not speculate that any exceptions or qualifications
were imposed on the express provision of the contract leaving Basiao "... free to
exercise his own judgment as to the time, place and means of soliciting
insurance."

DECISION OF THE SUPREME COURT


The Court, therefore, rules that under the contract invoked by him, Basiao
was not an employee of the petitioner, but a commission agent, an independent
contractor whose claim for unpaid commissions should have been litigated in an
ordinary civil action. The Labor Arbiter erred in taking cognizance of, and
adjudicating, said claim, being without jurisdiction to do so, as did the
respondent NLRC in affirming the Arbiter's decision. This conclusion renders it
unnecessary and premature to consider Basiao's claim for commissions on its
merits.
WHEREFORE, the appealed Resolution of the National Labor Relations
Commission is set aside, and that complaint of private respondent Melecio T.
Basiao in RAB Case No. VI-0010-83 is dismissed.

II.

CASE TITLE:
INSULAR LIFE ASSURANCE VS NLRC, 287 SCRA 478

DATE OF PROMULGATION:
March 12, 1998

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


A mutual life insurance company, it offers individual and group life,
health, and retirement insurance plans.

WHAT DID THE COMPLAINANT DO?


Instituted an action for damages arising from termination of employment.

WHAT WAS HIS WORK OR RESPONSIBILITIES?

Pantaleon de los Reyes is an agent under agency contracts with the


petitioner.
Private Respondent is tasked to solicit within the Philippines applications
for life insurance and annuities for which he would be paid compensation in the
form of commissions.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


Yes.
Control test. As to the matter involving the power of dismissal and control
by the employer, the latter of which is the most important of the test.
A perusal of the appointment of complainant as Acting Unit Manager
reveals that:
1.
Complainant was to exclusively serve respondent company. Thus
it is provIded:
x x x 7..7 Other causes of Termination: This Appointment may
likewise be terminated for any of the following causes:
x x x 7..7..2. Your entering the service of the government or another
life insurance company;
7..7..3. Your accepting a managerial or supervisory position in any
firm doing business in the Philippines without the written consent of the
Company; x x x

2.
Complainant was required to meet certain manpower and
production quotas.
3.
Respondent (herein petitioner) controlled the assignment and
removal of soliciting agents to and from complainants unit, thus: x x x 7..2.
Assignment of Agents: Agents recruited and trained by you shall be attached to
your unit unless for reasons of Company policy, no such assignment should be
made. The Company retains the exclusive right to assign new soliciting agents
appointed and assigned to the saId unit x x x x
It would not be amiss to state the respondents duty to collect the
companys premiums using company receipts under Sec. 7.4 of the management
contract is further evidence of petitioners control over respondent.

DECISION OF THE SUPREME COURT


The exclusivity of service, control of assignments and removal of agents
under private respondents unit, collection of premiums, furnishing of company
facilities and materials as well as capital described as Unit Development Fund are
but hallmarks of the management system in which herein private respondent
worked. This obtaining, there is no escaping the conclusion that private
respondent Pantaleon de los Reyes was an employee of herein petitioner.

III.

CASE TITLE:
REMINGTON INDUSTRIAL SALES CORPORATION vs ERLINDA
CASTANEDA, 507 SCRA 391

DATE OF PROMULGATION:
November 20, 2006

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


A corporation engaged in the trading business.

WHAT DID THE COMPLAINANT DO?

Instituted on March 2, 1998 a complaint for illegal dismissal,


underpayment of wages, non-payment of overtime services, non-payment of
service incentive leave pay and non-payment of 13th month pay against
Remington before the NLRC.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


A cook in the company premises.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


Yes.

It ruled that respondent has attained the status of a regular employee in


her service with the company. It noted that the NLRC found that no less than the
companys corporate secretary certified that respondent is a bonafide company
employee and that she had a fixed schedule and routine of work and was paid a
monthly salary of P4,000.00; that she served with petitioner for 15 years starting
in 1983, buying and cooking food served to company employees at lunch and
merienda; and that this work was usually necessary and desirable in the regular
business of the petitioner. It held that as a regular employee, she enjoys the
constitutionally guaranteed right to security of tenure and that petitioner failed to
discharge the burden of proving that her dismissal on January 15, 1998 was for a
just or authorized cause and that the manner of dismissal complied with the
requirements under the law.

DECISION OF THE SUPREME COURT


In termination cases, the burden of proof rests upon the employer to show
that the dismissal is for a just and valid cause; failure to do so would necessarily
mean that the dismissal was illegal. The employers case succeeds or fails on the
strength of its evidence and not on the weakness of the employees defense. If
doubt exists between the evidence presented by the employer and the employee,
the scales of justice must be tilted in favor of the latter.
IV.

CASE TITLE:
COCA COLA BOTTLERS INC vs DR. DEAN CLIMACO, 514 SCRA 164

DATE OF PROMULGATION:
February 5, 2007

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


A company engaged in bottlinh and distribution of Coca-Cola soft drink
brands.

WHAT DID THE COMPLAINANT DO?


Initially, filed a complaint with NLRC seeking recognition of status as a
regular employee. Later, filed a complaint for illegal dismissal.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


A company doctor under the retainer agreement.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


No.
The court, in determining the existence of an employer-employee
relationship, has invariably adhered to the 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 to control the employees conduct.
The Court agrees with the finding of the Labor Arbiter and the NLRC that
the circumstances of this case show that no employer-employee relationship exist
between the parties, they correctly found that petitioner company lacked the
power of control over the performance by respondent of his duties. The Labor
Arbiter reasoned that the Comprehensive Medical Plan, which contains the
respondents objectives, duties and obligations, does not tell respondent how to
conduct his physical examination, how to immunize, or how to diagnose and treat
his patients, employees of company, in each case.
In effect, the Labor Arbiter held that petitioner company, through the
Comprehensive Medical Plan, provided guidelines merely to ensure that the end
result was achieved, but did not control the means and methods by which
respondent performed his assigned tasks.

The NLRC affirmed the findings of the Labor Arbiter and stated that it is
precisely because the company lacks the power of control that the contract
provides that respondent shall be directly responsible to the employee concerned
and their dependents for any injury, harm or damage caused through
professional negligence, incompetence or other valid causes of action.
In addition, the Court finds that the schedule of work and the requirement
to be on call for emergency cases do not amount to such control, but are
necessary incidents to the Retainership Agreement. The Court agrees that there is
nothing wrong with the employment of respondent as a retained physician of
petitioner company and upholds the validity of the Retainership Agreement
which clearly stated that no employe-employee relationship existed between the
parties. Considering that there is no employer-employee relationship between the
parties, the termination of the Retainership Agreement , which is accordance
with the provisions of the Agreement, does not constitute illegal dismissal of
respondent.

DECISION OF THE SUPREME COURT


Considering that there is no employer-employee relationship between the
parties, the termination of the Retainership Agreement, which is in accordance
with the provisions of the Agreement, does not constitute illegal dismissal of
respondent. Consequently, there is no basis for the moral and exemplary
damages granted by the Court of Appeals to respondent due to his alleged illegal
dismissal.

V.

CASE TITLE:
ESCASINAS, et al. vs SHANGRILAS MACTAN ISLAND RESORT, 580
SCRA 604

DATE OF PROMULGATION:
March 4, 2009

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


Hotel and resort.
Private respondent is a retained physician in said Hotel and Resort.

WHAT DID THE COMPLAINANT DO?


Filed a complaint for regularization, underpayment of wages, nonpayment of holiday pay, night shift differential and 13th month pay differential
against respondents, claiming that they are regular employees of Shangri-la.

WHAT WAS HIS WORK OR RESPONSIBILITIES?

Registered nurses to work for private respondents clinic at respondent


Shangri-la.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


No.
The existence of an employer- employee relationship is established by
the presence of the following determinants: (1) the selection and engagement
of the workers; (2) power of dismissal; (3) the payment of wages by whatever
means; and (4) the power to control the worker's conduct, with the latter
assuming primacy in the overall consideration.
Against the above-listed determinants, the Court holds that respondent
doctor is a legitimate independent contractor. That Shangri-la provides the
clinic premises and medical supplies for use of its employees and guests does not
necessarily prove that respondent doctor lacks substantial capital and
investment. Besides, the maintenance of a clinic and provision of medical
services to its employees is required under Art. 157, which are not directly related
to Shangri-las principal business operation of hotels and restaurants.
Shangri-la, which employs more than 200 workers, is mandated to
furnish its employees with the services of a full-time registered nurse, a parttime physician and dentist, and an emergency clinic which means that it should
provide or make available such medical and allied services to its
employees, not necessarily to hire or employ a service provider. As
held in Philippine Global Communications vs. De Vera:
x x x while it is true that the provision
requires employers to engage the services of
medical
practitioners
in
certain

establishments depending on the number of


their employees, nothing is there in the law
which says that medical practitioners so
engaged be actually hired as employees, adding
that the law, as written, only requires the employer
to retain, not employ, a part-time physician who
needed to stay in the premises of the non-hazardous
workplace for two (2) hours.

As to payment of wages, respondent doctor is the one who underwrites


their payroll details.

DECISION OF THE SUPREME COURT


The petition is hereby DENIED.

VI.

CASE TITLE:
ANGEL JARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO
MARCOS, LUIS DE LOS ANGELES, JOEL ORDENIZA and AMADO CENTENO,
vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and GOODMAN
TAXI (PHILJAMA INTERNATIONAL, INC.), 326 SCRA 299

DATE OF PROMULGATION:
February 23, 2000

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


A domestic corporation engaged in the operation of "Goodman Taxi."

WHAT DID THE COMPLAINANT DO?


Filed a complaint for unfair labor practice, illegal dismissal, illegal
deduction of washing fees.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


Drivers earning thru a boundary system.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


Yes.
On the issue of whether or not employer-employee relationship exists,
admitted is the fact that complainants are taxi drivers purely on the "boundary
system". Under this system the driver takes out his unit and pays the
owner/operator a fee commonly called "boundary" for the use of the unit. Now, in
the determination the existence of employer-employee relationship, the Supreme
Court in the case of Sara, et al., vs. Agarrado, et al. (G.R. No. 73199, 26 October
1988) 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."
"Among the four (4) requisites", the Supreme Court stresses that "control
is deemed the most important that the other requisites may even be disregarded".
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.
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 abovestated 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.

DECISION OF THE SUPREME COURT


The instant petition is GRANTED.

VII.

CASE TITLE:
MANILA GOLF and COUNTRY CLUB vs NLRC, 237 SCRA 299

DATE OF PROMULGATION:
September 27, 1994

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


Golf recreational provider with exclusive membership.

WHAT DID THE COMPLAINANT DO?


The caddies filed claims for compulsory coverage of SSS arising from
employee-employer relationship.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


Caddying services.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


No.
There is no control over the caddies.
The IAC would point to the fact
that the Club suggests the rate of fees payable by the players to the caddies as still
another indication of the latter's status as employees. It seems to the Court,
however, that the intendment of such fact is to the contrary, showing that the

Club has not the measure of control over the incidents of the caddies' work and
compensation that an employer would possess.
The Court agrees with petitioner that the group rotation system so-called,
is less a measure of employer control than an assurance that the work is fairly
distributed, a caddy who is absent when his turn number is called simply losing
his turn to serve and being assigned instead the last number for the day.

By and large, there appears nothing in the record to refute the petitioner's
claim that:
(Petitioner) has no means of compelling the presence of a caddy. A
caddy is not required to exercise his occupation in the premises of
petitioner. He may work with any other golf club or he may seek
employment a caddy or otherwise with any entity or individual without
restriction by petitioner. . . .
. . . In the final analysis, petitioner has no was of compelling the
presence of the caddies as they are not required to render a definite
number of hours of work on a single day. Even the group rotation of
caddies is not absolute because a player is at liberty to choose a caddy of
his preference regardless of the caddy's order in the rotation.
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, he may then leave the premises of petitioner and go to such
other place of work that he wishes. Or a caddy who is on call for a
particular day may deliberately absent him if he has more profitable
caddying, or another, engagement in some other place. These are things
beyond petitioner's control and for which it imposes no direct sanctions on
the caddies. . . .

DECISION OF THE SUPREME COURT


The decision of the Intermediate Appellant Court, review of which is
sought, is reversed and set aside, it being hereby declared that the private
respondent, Fermin Llamar, is not an employee of petitioner Manila Golf and
Country Club and that petitioner is under no obligation to report him for
compulsory coverage to the Social Security System.

VIII. CASE TITLE:


AFP MUTUAL BENEFIT ASSOCIATION, INC., vs. NATIONAL LABOR
RELATIONS COMMISSION and EUTIQUIO BUSTAMANTE, 267 SCRA 47

DATE OF PROMULGATION:
January 28, 1997

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


A mutual benefit association that extends the benefit and services for the
welfare and financial security of its members and their family.

WHAT DID THE COMPLAINANT DO?


Filed a complaint for improper payment of commission earned.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


Private respondent Eutiquio Bustamante had been an insurance
underwriter of petitioner AFP Mutual Benefit Association, Inc. A sales agent.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


No.
No control. The significant factor in determining the relationship of the
parties is the presence or absence of supervisory authority to control the method
and the details of performance of the service being rendered, and the degree to
which the principal may intervene to exercise such control. The presence of such
power of control is indicative of an employment relationship, while absence
thereof is indicative of independent contractorship. In other words, the test to
determine the existence of independent contractorship is whether one claiming
to be an independent contractor has contracted to do the work according to his
own methods and without being subject to the control of the employer except
only as to the result of the work. Such is exactly the nature of the relationship
between petitioner and private respondent.

Further, not every form of control that a party reserves to himself over the
conduct of the other party in relation to the services being rendered may be
accorded the effect of establishing an employer-employee relationship. The facts
of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs.
NLRC. In said case, we held that:
"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 distinction
acquires particular relevance in the case of an enterprise affected with
public interest, as is the business of insurance, and is on that account
subject to regulation by the State with respect, not only to the relations
between insurer and insured but also to the internal affairs of the
insurance company. Rules and regulations governing the conduct of the
business are provided for in the Insurance Code and enforced by the
Insurance Commissioner. It is, therefore, usual and expected for an
insurance company to promulgate a set of rules to guide its commission
agents in selling its policies that they may not run afoul of the law and
what it requires or prohibits. xxxx None of these really invades the agent's
contractual prerogative to adopt his own selling methods or to sell
insurance at his own time and convenience, hence cannot justifiably be
said to establish an employer-employee relationship between him and the
company."
DECISION OF THE SUPREME COURT
The "control" which the above factors indicate did not sum up to the power
to control private respondent's conduct in and mode of soliciting insurance. On
the contrary, they clearly indicate that the juridical element of control had been
absent in this situation. Thus, the Court is constrained to rule that no
employment relationship had ever existed between the parties.

IX.

CASE TITLE:
Republic of the Philippines, rep by SSC and SSS vs Asiapro Cooperative,
538 SCRA 659

DATE OF PROMULGATION:
November 23, 2007

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


Social Security Commission, a quasi-judicial body authorized by law to
resolve disputes arising under Republic Act No. 1161, as amended by Republic Act
No. 8282. Petitioner Social Security System is a government corporation created
by virtue of Republic Act No. 1161, as amended.

WHAT DID THE COMPLAINANT DO?


Filed a complaint for SSS compulsory coverage.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


A cooperative composed of owners-members. Its function is to provide
savings and credit facilities and to develop other livelihood services for its
owners-members.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


Yes.
The declaration made by the Court in the aforesaid case was made in the
context of whether an employee who is also an owner-member of a cooperative
can exercise the right to bargain collectively with the employer who is the
cooperative wherein he is an owner-member. Obviously, an owner-member
cannot bargain collectively with the cooperative of which he is also the owner
because an owner cannot bargain with himself. In the instant case, there is no
issue regarding an owner-members right to bargain collectively with the
cooperative. The question involved here is whether an employeremployee relationship can exist between the cooperative and an
owner-member. In fact, a closer look at Cooperative Rural Bank of Davao City,
Inc. will show that it actually recognized that an owner-member of a cooperative
can be its own employee.
It bears stressing, too, that a cooperative acquires juridical personality
upon its registration with the Cooperative Development Authority. It has its
Board of Directors, which directs and supervises its business; meaning, its Board
of Directors is the one in charge in the conduct and management of its affairs.
With that, a cooperative can be likened to a corporation with a personality

separate and distinct from its owners-members. Consequently, an ownermember of a cooperative can be an employee of the latter and an employeremployee relationship can exist between them.
In the present case, it is not disputed that the respondent cooperative had
registered itself with the Cooperative Development Authority, as evidenced by its
Certificate of Registration No. 0-623-2460. In its by-laws, its Board of Directors
directs, controls, and supervises the business and manages the property of the
respondent cooperative. Clearly then, the management of the affairs of the
respondent cooperative is vested in its Board of Directors and not in its ownersmembers as a whole. Therefore, it is completely logical that the respondent
cooperative, as a juridical person represented by its Board of Directors, can enter
into an employment with its owners-members.
This Court is not unmindful of the pronouncement it made in Cooperative
Rural Bank of Davao City, Inc. v. Ferrer-Calleja wherein it held that:
A cooperative, therefore, is by its nature different from an ordinary
business concern, being run either by persons, partnerships, or
corporations. Its owners and/or members are the ones who run and
operate the business while the others are its employees x x x.
An employee therefore of such a cooperative who is a member and coowner thereof cannot invoke the right to collective bargaining for certainly an
owner cannot bargain with himself or his co-owners. In the opinion of August 14,
1981 of the Solicitor General he correctly opined that employees of cooperatives
who are themselves members of the cooperative have no right to form or join
labor organizations for purposes of collective bargaining for being themselves coowners of the cooperative.
However, in so far as it involves cooperatives with employees who are not
members or co-owners thereof, certainly such employees are entitled to exercise
the rights of all workers to organization, collective bargaining, negotiations and
others as are enshrined in the Constitution and existing laws of the country.

DECISION OF THE SUPREME COURT


In sum, having declared that there is an employer-employee relationship
between the respondent cooperative and its owners-member, we conclude that
the petitioner SSC has jurisdiction over the petition-complaint filed before it by
the petitioner SSS. This being our conclusion, it is no longer necessary to discuss
the issue of whether the respondent cooperative was estopped from assailing the
jurisdiction of the petitioner SSC.

X.

CASE TITLE:
Purificacion Tabang vs NLRC, 266 SCRA 462

DATE OF PROMULGATION:
January 21, 1997

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


Pamana Golden Care Medical Center Foundation, Inc., a non-stock
corporation engaged in extending medical and surgical services.

WHAT DID THE COMPLAINANT DO?


Filed a complaint for illegal dismissal and non-payment of wages,
allowances and 13th month pay before the labor arbiter.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


A retained physician of the private respondents. A founding member, a
member of the Board of Trustees, and the corporate secretary of private
respondent.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


Not discussed.

DECISION OF THE SUPREME COURT


The case involving an intra-corporate controversy, the jurisdiction lies
before the SEC and not with NLRC and the Labor Arbiter.
As a rule, though claims are arising from employee-employer relationship,
considering the parties involved are corporate officer of said corporation, the

same now becomes in intra-corporate dispute; thus, jurisdiction is vested before


the SEC.

XI.

CASE TITLE:
Jay Sonza vs ABS-CBN Broadcasting Corporation, 431 SCRA 582

DATE OF PROMULGATION:
Jun 10, 2004

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?


A commercial television-radio network.

WHAT DID THE COMPLAINANT DO?


Filed a complaint for claim of unpaid salaries, separation pay, service
incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts
due under the Employees Stock Option Plan (ESOP).

WHAT WAS HIS WORK OR RESPONSIBILITIES?


A TV and radio host commentator talent.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


No.
Aplying the control test to the present case, we find that SONZA is not
an employee but an independent contractor. The control test is the most
important test our courts apply in distinguishing an employee from an
independent contractor. This test is based on the extent of control the hirer
exercises over a worker. The greater the supervision and control the hirer
exercises, the more likely the worker is deemed an employee. The converse holds

true as well the less control the hirer exercises, the more likely the worker is
considered an independent contractor.
First, SONZA contends that ABS-CBN exercised control over the means
and methods of his work.
SONZAs argument is misplaced. ABS-CBN engaged SONZAs services
specifically to SONZA. To perform his work, SONZA only needed his skills and
talent. How SONZA delivered his lines, appeared on television, and sounded on
radio were outside to co-host the Mel & Jay programs. ABS-CBN did not assign
any other work ABS-CBNs control. SONZA did not have to render eight hours of
work per day. The Agreement required SONZA to attend only rehearsals and
tapings of the shows, as well as pre- and post-production staff meetings. ABSCBN could not dictate the contents of SONZAs script. However, the Agreement
prohibited SONZA from criticizing in his shows ABS-CBN or its interests. The
clear implication is that SONZA had a free hand on what to say or discuss in his
shows provided he did not attack ABS-CBN or its interests.
We find that ABS-CBN was not involved in the actual performance that
produced the finished product of SONZAs work. ABS-CBN did not instruct
SONZA how to perform his job. ABS-CBN merely reserved the right to modify
the program format and airtime schedule for more effective programming.
ABS-CBNs sole concern was the quality of the shows and their standing in the
ratings. Clearly, ABS-CBN did not exercise control over the means and methods
of performance of SONZAs work.

DECISION OF THE SUPREME COURT


Petition is denied.

XII. CASE TITLE:


GREPALIFE vs NLRC, 187 SCRA 694

DATE OF PROMULGATION:
July 30, 1990

WHAT IS THE BUSINESS OF THE RESPONDENT COMPANY?

A life insurance company.

WHAT DID THE COMPLAINANT DO?


Filed a complaint for illegal dismissal due to alleged misappropriations of
premiums.

WHAT WAS HIS WORK OR RESPONSIBILITIES?


Complainants are brothers who are first trainee-agents then later
promoted to district managers.

IS THERE AN EMPLOYEE-EMPLOYER RELATIONSHIP, REASON


Yes.
Article 280 of the Labor Code provides that "[the provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreements
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer. ..." Furthermore, in determining who
is considered an "employee', the Court has time and again applied the "four-fold"
test,* with control being the most crucial and determinative indicator of an
employer-employee relationship. The 'employer" must have control (or must
have reserved the right to control) not only over the result of the "employee's"
work but also the means and methods by which it is to be accomplished
Applying the above, the Court finds that, as correctly held by public
respondent, the relationships of the Ruiz brothers and Grepalife were those of
employer-employee.
First, their work at the time of their dismissal as zone supervisor and
district manager are necessary and desirable to the usual business of the
insurance company. They were entrusted with supervisory, sales and other
functions to guard Grepalife's business interests and to bring in more clients to
the company, and even with administrative functions to ensure that all
collections, reports and data are faithfully brought to the company.
Furthermore, it cannot be gainsaid that Grepalife had control over private
respondents' performance as well as the result of their efforts. A cursory reading

of their respective functions as enumerated in their contracts reveals that the


company practically dictates the manner by which their jobs are to be carried out.
For instance, the District Manager must properly account, record and document
the company's funds spot-check and audit the work of the zone supervisors,
conserve the company's business in the district through 'reinstatements', follow
up the submission of weekly remittance reports of the debit agents and zone
supervisors, preserve company property in good condition, train understudies for
the position of district manager, and maintain his quota of sales (the failure of
which is a ground for termination). On the other hand, a zone supervisor must
direct and supervise the sales activities of the debit agents under him, conserve
company property through "reinstatements", undertake and discharge the
functions of absentee debit agents, spot-check the records of debit agents, and
insure proper documentation of sales and collections by the debit agents.

DECISION OF THE SUPREME COURT


To indemnify the private respondents for the illegal dismissal.

SET 2

Case
Title

Artemio
Romares
v.
NLRC
294 SCRA
11
August 11,
1998

What is the
business of
the
respondent?

What were the


daily tasks of
the
complainant?

PILMICO
Romares was hired
FOODS
by respondent in
CORPORATIO its Maintenance/
N is a flour
Projects/
milling
Engineering
company.
Department.

What type of
employee was he?
Reason?

Romares was a
regular employee.
Complainant has
performed tasks and
functions which
were necessary and
desirable in the
operation of
respondents
business which
includes painting,
maintenance, repair
and other related
jobs.

Decision of S.C.

RULING: GRANTED
In determining the
status of petitioner as a
regular employee,
reference is made to
Article 280 of the Labor
Code, as amended. Thus,
the two kinds of regular
employees are (1) those
who are engaged to
perform activities which
are necessary or desirable
in the usual business or
trade of the employer;
and (2) those casual
employees who have
rendered at least one year
of service, whether
continuous or broken,
with respect to the
activity in which they are
employed.
Construing the aforesaid
provision, the phrase
usually necessary or
desirable in the usual
business or trade of the
employer should be
emphasized as the
criterion in the instant
case. Facts show that
petitioners work with
PILMICO as a mason was
definitely necessary and
desirable to its business.
PILMICO cannot claim
that petitioners work as
a mason was entirely
foreign or irrelevant to its
line of business in the

production of flour, yeast,


feeds and other flour
products.
The language of the law
evidently manifests the
intent to safeguard the
tenurial interest of the
worker who may be
denied the rights and
benefits due a regular
employee by virtue of
lopsided agreements with
the economically
powerful employer who
can maneuver to keep an
employee on a casual
status for as long as
convenient.

It is noteworthy that
during each rehiring, the
summation of which
exceeded one (1) year,
petitioner was assigned
to PILMICOs
Maintenance/Projects/E
ngineering Department
performing the same
kind of maintenance
work such as painting of
company buildings,
cleaning and operating
company equipment, and
assisting the other
regular employees in
their maintenance works.
Such a continuing need
for the services of
petitioner is sufficient
evidence of the necessity
and indispensability of
his services to PILMICOs
business or trade. To
expound further,
granting arguendo that

petitioner was regarded


as a temporary employee,
he had been converted
into a regular employee
by virtue of the proviso in
the second paragraph of
Article 280 for having
worked with PILMICO
for more than one (1)
year.
Highway
Copra
Traders
v.
NLRC
G.R. No.
108889
July 30,
1998

Business of
trading copra
and charcoal

Private respondent
David Empeynado
was employed as a
general utility man
by petitioners in
their business of
trading copra and
charcoal with a
daily wage of
P35.00. Private
respondents work
consisted of
weighing copra or
charcoal, bagging
copra for loading
and ascertaining
the moisture
content thereof.
He was likewise a
multi-purpose
handyman since he
worked as a driver
of petitioners
trucks, a mechanic
and a messenger to
follow-up
petitioners
contracts with
other companies,
to register their
vehicles, to pay
their taxes,

and to collect and


receive payments

He is a regular
employee pursuant
to the first
paragraph of Article
280 of the Labor
Code. As a utility
man, his work was
definitely necessary
and desirable to
petitioners business
of trading copra and
charcoal.

RULING: DISMISSED
In this case, the nature of
private respondents
work as a general utility
man was definitely
necessary and desirable
to petitioners business of
trading copra and
charcoal regardless of the
length of time he worked
therein. As such, he is a
regular employee
pursuant to the first
paragraph of Article 280
of the Labor Code.
Petitioners further argue
that private respondent
was only engaged for a
specific task, the
completion of which
resulted in the cessation
of his employment. This
is not correct. By "specific
project or undertaking,"
Article 280 of the Labor
Code contemplates an
activity which is not
commonly or habitually
performed or such type of
work which is not done
on a daily basis but only
for a specific duration of
time or until completion
in which case,

in their behalf.
the services of an
employee are necessary
and desirable in the
employers usual
business only for the
period of time it takes to
complete the project.
Such circumstance does
not obtain in this case.
We now turn to the issue
of backwages.
In determining the
proper amount of
backwages, the material
date to consider is March
21, 1989 which is when
Republic Act No. 6715
took effect. This law
amended, among others,
Article 279 (related to
backwages) of the Labor
Code. Said amendatory
law, however, does not
cover illegal dismissals
effected prior to March
21, 1989, hence, we apply
the "Mercury Drug Rule"
as enunciated in the
landmark case of
Mercury Drug Co., Inc.,
et. al. vs. CIR, et. al. In
this case, the Court fixed
the amount of backwages
to be awarded to an
illegally dismissed
employee to three (3)
years without further
qualifications or
deductions, for reasons of
expediency in the
execution of the decision.
Any award in excess of
the three years is null and
void as to the excess.
Of note also is the "Ferrer
Doctrine" laid down in

the case of Ferrer vs.


NLRC as reiterated in
Pines City Educational
Center vs. NLRC which
adopted the rule applied
prior to the "Mercury
Drug Rule". The said
doctrine states that the
employer may, however,
deduct any amount which
the employee may have
earned during the period
of his illegal termination.
Computation of full
backwages and
presentation of proof as
to income earned
elsewhere by the illegally
dismissed employee after
his termination and
before actual
reinstatement should be
ventilated in the
execution, proceedings
before the Labor Arbiter
concordant with Section
3,

Rule 8 of the 1990 New


Rules of Procedure of the
NLRC.
To settle once and for all
the rule on the correct
computation of the award
of backwages, this Court
laid down jurisprudence
in its Resolution en banc
in Bustamante vs. NLRC
with regard to illegal
dismissals effected after
March 21, 1989 applying
Article 279 of the Labor
Code, as amended. Thus,
an illegally dismissed
employee is entitled to
his full

backwages from the time


his compensation was
withheld from him
(which, as a rule, is from
the time of his illegal
dismissal) up to the time
of his actual
reinstatement. The
legislative policy behind
Republic Act No. 6715
points to "full backwages"
as meaning exactly that,
i.e. without deducting
from backwages the
earnings derived
elsewhere by the
concerned employee
during the period of his
illegal dismissal.
Considering that private
respondent was
terminated from service
on January 12, 1987,
which is prior to March
21, 1989, the NLRC
correctly applied the
ruling in the Mercury
Drug case.
Poseidon
Fishing
v.
NLRC
G.R. No.
168052
February
20, 2006

Poseidon
Fishing is a
fishing
company
engaged in the
deep-sea
fishing
industry. Its
various vessels
catch fish in
the outlying
islands of the
Philippines,
which are
traded and
sold at the
Navotas Fish
Port.

One of its boat


crew was private
respondent Jimmy
S. Estoquia.
Private respondent
was employed by
Poseidon Fishing
in January 1988 as
Chief Mate. After
five years, he was
promoted to Boat
Captain. In 1999,
petitioners,
without
reason, demoted
respondent from
Boat Captain to
Radio Operator of
petitioner

He is a regular
employee.
The test to
determine whether
one is a project
employee is W/N
the said employee
was assigned to
carry out a specific
project or
undertaking, the
duration and scope
of which were
specified at the time
the employee was
engaged for that
project. Petitioners
have not shown that

RULING: DENIED
It is undisputed that
petitioners were illegally
dismissed from
employment. Article 280
of the Labor Code, states:
ART. 280. Regular and
Casual Employment. The provisions of written
agreement to the
contrary notwithstanding
and regardless of the oral
agreement of the parties,
an employment shall be
deemed to be regular
where the employee has
been engaged to perform

Poseidon.4 As a
Radio Operator,

he monitored the
daily activities in
their office and
recorded in the
duty logbook the
names of the
callers and time of
their calls.

Estoquia was
informed that he will
be assigned to a
specific project or
undertaking.

activities which are


usually necessary or
desirable in the usual
business or trade of the
employer,

Neither has it been


established that he
was informed of the
duration and scope
of such project or
undertaking at the
time of their
engagement.

except where the


employment has been
fixed for a specific project
or undertaking the
completion or
termination of which has
been determined at the
time of the engagement
of the employee or where
the work or services to be
performed is seasonal in
nature and the
employment is for the
duration of the season.

Maraguinot Jr. v.
National Labor
Relations
Commission
established that
once a project or
work pool employee
has been
(1) continuously (vs.
intermittently) rehired by the same
employer for the
same tasks or nature
of tasks; and (2)
these tasks are vital,
necessary and
indispensable to the
usual business or
trade of the
employer, the
employee must be
deemed a regular
employee.

An employment shall be
deemed to be casual if it
is not covered by the
preceding paragraph:
Provided, that, any
employee who has
rendered at least one year
of service, whether such
service is continuous or
broken, shall be
considered a regular
employee with respect to
the activity in which he is
employed and his
employment shall
continue while such
activity exists. This
provision draws a line
between regular and
casual employment, a
distinction however often
abused by employers.
The provision
enumerates two (2) kinds

of employees, the regular


employees and the casual
employees. The regular
employees consist of the
following:
1) those engaged to
perform activities which
are usually necessary or
desirable in the usual
business or trade of the
employer; and
2) those who have
rendered at least one year
of service whether such
service is continuous or
broken.
Ostensibly, in the case at
bar, at different times,
private respondent
occupied the position of
Chief Mate, Boat Captain,
and Radio Operator. In
petitioners
interpretation, however,
this act of hiring and rehiring actually highlight
private respondents
contractual status saying
that for every
engagement, a fresh
contract was entered into
by the parties at the
outset as the conditions
of employment changed
when the private
respondent filled in a
different position.
But to this Court, the act
of hiring and re-hiring in
various capacities is a
mere gambit employed
by petitioner to thwart
the tenurial protection of
private respondent. Such
pattern of re-hiring and
the recurring need for his
services are testament to

the necessity and


indispensability of
such services to
petitioners business or
trade.
DM
Consunji
v.
NLRC
348 SCRA
441
December
18, 2000

D.M.
CONSUNJI,
INC. is known
as one of the.
leading
construction
companies in
the
Philippines.

Private
respondents were
hired by petitioner
as project
employees to work
on its Cebu Super
Block Project in
Cebu City.

Private respondents
are project
employees.
Their contracts of
employment readily
show that the
private respondents
were employed with
respect to a specific
project. The private
respondents in this
case were workers in
a construction
project of the
petitioner. While
employed with
respect to a specific
project, the
contracts of
employment
between the private
respondents and the
petitioner provide
that the former were
employed for a term
of one (1) month
which was the
estimated period for
the project to be
finished. The
private respondents
do not even claim to
be regular
employees but
merely that, as
employees at the
Cebu Super Block,
they were
terminated before
the completion of
the project without

RULING: GRANTED
Project employee is one
whose employment has
been fixed for a specific
project or undertaking
the completion or
termination of which has
been determined at the
time of the engagement
of the employee or where
the work or services to be
performed is seasonal in
nature and the
employment is for the
duration of the season.
This Court has held that
the length of service of a
project employee is not
the controlling test of
employment tenure but
whether or not the
employment has been
fixed for a specific project
or undertaking the
completion or
termination of which has
been determined at the
time of the engagement
of the employee.
Examining the standard
contracts signed by the
private respondents,
there are three ways by
which their employment
may be terminated: one,
the expiration of the one
month period, which was
the estimated period for
the completion of the
project; two, the
completion of the project

just cause and due


or phase of the project for
process. As project which they were engaged
employees, there is
prior to the expiration of
no showing that they
the one month period;
were part of the
and three, upon the
work pool of
finding of unsatisfactory
the petitioner
services or other just
construction
cause.
company.
The private respondents
admitted before the labor
arbiter that they signed
their employment
contract voluntarily.
By this admission, the
private respondents
necessarily bound
themselves to be
employed for a fixed
duration knowingly and
voluntarily without any
force, duress or improper
pressure. There is no
showing that the term
fixed was used to
preclude acquisition of
tenurial security since
private respondents were
admittedly
employed with respect to
a specific project, the
Cebu Super Block.
Inescapably, being a valid
contract between the
private respondents and
the petitioner, the
provisions thereof,
specifically with respect
to
the one (1) month period
of employment, has the
force of law between the
parties.

Tomas
Lao Cons.
v.
NLRC
278 SCRA
716
Septembe
r 5, 1997

TLC, T&J and


LVM are
engaged in the
construction
of public roads
and bridges.

(a) Roberto
Regular employees.
Labendia, general
construction
While it may be
foreman, from
allowed that in the
1971 to 17 October
instant case the
1990 at
workers were
P3,700/month; (b)
initially hired for
Narciso Adan,
specific projects or
tireman, from
undertakings of the
October 1981 to
company and hence
November 1990 at
can be classified as
P75.00/day; (c)
project employees,
Florencio Gomez,
the repeated rewelder, from July
hiring and the
1983 to July 1990
continuing need for
at P60.00/day; (d) their services over a
Ernesto
long span of time
Bagatsolon
(the shortest, at
leadman/checker, seven [7] years) have
from June 1982 to
undeniably made
October 1990 at
them regular
P2,800/month; (e)
employees.
Salvador Babon,
clerk/timekeeper/
Thus, we held that
paymaster, from
where the
June 1982 to
employment of
October 1990 at
project employees is
P3,200/month; (f) extended long after
Paterno Bisnar,
the supposed project
road grader
has been finished,
operator, from
the employees are
January 1979 to
removed from the
October 1990 at
scope of project
P105/day;
employees and
(g) Cipriano
considered regular
Bernales,
employees.
instrument man,
from February
1980 to
November 1990 at
P3,200/month;
While length of time
may not be a
controlling test for
(h) Angel Mabulay, project employment,
Sr., dump truck
it can be a strong
driver, from
factor in
August 1974 to
determining
October 1990 at
whether the

RULING: DENIED
The principal test in
determining whether
particular employees are
project employees
distinguished from
regular employees is
whether the project
employees are assigned
to carry out specific
project or undertaking,
the duration (and scope)
of which are specified at
the time the employees
are engaged for the
project. Project in the
realm of business and
industry refers to a
particular job or
undertaking that is
within the regular or
usual business of
employer, but which is
distinct and separate and
identifiable as such from
the undertakings of the
company. Such job or
undertaking begins and
ends at determined or
determinable times.
The allegation of
petitioners that private
respondents are guilty of
abandonment of duty is
without merit.

The elements of
abandonment are:
(a) failure to report for
work or absence without

P90/day; (I) Leo


Surigao, payloader
operator, from
March 1975 to
January 1978 at
P100/day; (J)
Mario Labendia,
Sr.
surveyor/foreman,
from August 1971
to
July 1990 at
P2,900/month;
and,
(k) Roque Morillo,
company
watchman,
from August 1983
to October 1990 at
P3,200/month.

employee was hired


for a specific
undertaking or in
fact tasked to
perform functions
which are vital,
necessary and
indispensable to the
usual business or
trade of the
employer.
In the case at bar,
private respondents
had already gone
through the status of
project employees.
But their
employments
became noncoterminous with
specific projects
when they started to
be continuously rehired due to the
demands of
petitioners business
and were re-engaged
for many more
projects without
interruption.

valid or justifiable
reason, and,
(b) a clear intention to
sever the employeremployee relationship,
with the second element
as the more
determinative factor
manifested by some overt
acts.
In this case, private
respondents Roberto
Labendia and Mario
Labendia were forced to
leave their respective
duties because their
salaries were withheld.
They could not simply sit
idly and allow their
families to starve. They
had to seek employment
elsewhere, albeit
temporarily, in order to
survive.
On the other hand, it
would be the height of
injustice to validate
abandonment in this
particular case as a
ground for dismissal of
respondents thereby
making petitioners
benefit from a gross and
unjust situation which
they themselves created.
Private respondents did
not intend to sever ties
with petitioner and
permanently abandon
their jobs; otherwise,
they would not have filed
this complaint for illegal
dismissal.
The burden of proving
that an employee has
been lawfully dismissed

therefore lies with the


employer. In the case at
bar, the assertions of
petitioners were selfserving and insufficient
to substantiate their
claim of proximate
project completion. The
services of the employees
were terminated not
because of contract
expiration but as
sanction for their refusal
to sign the project
employment forms and
quitclaims.
Abesco
Cons.
v.
Bernardo
G.R. No.
141168
April 10,
2006

Petitioner
company was
engaged in a
construction
business

Respondents were
Respondents were
RULING: DENIED
hired on different
regular employees.
dates from 1976 to
Employees (like
1992 either as
The principal test for respondents) who work
laborers, road
determining
under different project
roller operators,
whether employees employment contracts for
painters or drivers.
are project
several years do not
employees or
automatically become
regular employees
regular employees; they
is whether they are
can remain as project
assigned to carry out employees regardless of
a specific project or the number of years they
undertaking, the
work.
duration and scope
of which are
Length of service is not a
specified at the time
controlling factor in
they are engaged for determining the nature of
that project. Such
ones employment.
duration, as well as
Moreover, employees
the particular
who are members of a
work/service to be
work pool from which a
performed, is
company (like petitioner
defined in an
corporation) draws
employment
workers for deployment
agreement
to its different projects do
and is made clear to
not become regular
the employees at the
employees by reason of
time of hiring.
that fact alone. The Court
has enunciated in some
cases that members of a
work pool can either be

project employees or
regular employees.
On the issue of illegal
dismissal, we hold that
petitioners failed to
adhere to the two-notice
rule which requires that
workers to be
dismissed must be
furnished with:
(1) a notice informing
them of the particular
acts for which they are
being dismissed and (2) a
notice advising them of
the decision to terminate
the employment.
Respondents were never
given such notices.
Purefoods
Corp.
v.
NLRC
283 SCRA
133
December
12, 1997

Purefoods
Corp. is
enganged in a
business of
food products.

The private
respondents
activities consisted
in the receiving,
skinning, loining,
packing, and
casing-up of tuna
fish which were
then exported by
the petitioner

Regular employees.

RULING: DISMISSED

The two kinds of


regular employees
are (1) those who are
engaged to perform
activities which are
necessary or
desirable in the
usual business or
trade of the
employer; and (2)
those casual
employees who have
rendered at least one
year of service,
whether continuous
or broken,

We find the petition


devoid of merit.

with respect to the


activity in which
they are employed.
In the instant case,
the private
respondents

Article 280 of the Labor


Code defines regular and
casual employment as
follows:
ART. 280. Regular and
Casual Employment.-The provisions of written
agreement to the
contrary notwithstanding
and regardless of the oral
argument of the parties,

an employment shall be
deemed to be regular
where the employee has
been engaged to perform
activities which are
usually necessary or
desirable in the usual

activities consisted
business or trade of the
in the
employer, except where
receiving, skinning, the employment has been
loining,
fixed for a
packing, and casingspecific project or
up of tuna fish which
undertaking the
were then exported
completion or
by the petitioner.
termination of which has
Indisputably, they
been determined at the
were performing
time of the engagement
activities which were
of the employee or
necessary and
where the work or
desirable in
services to be performed
petitioners business is seasonal in nature and
or trade.
the employment is for the
duration of the season.
An employment shall be
deemed to be casual if it
is not covered by the
preceding paragraph;
Provided, That, any
employee who has
rendered at least one year
of service, whether such
service is continuous or
broken, shall be
considered a regular
employee with respect to
the activity in which he is
employed and his
employment shall
continue while such
activity exists.
In the instant case, the
private respondents
activities consisted in
the receiving, skinning,
loining, packing, and
casing-up of tuna fish
which were then exported
by the petitioner.
Indisputably, they were
performing activities
which were necessary
and desirable in
petitioners business or
trade.

The fact that the


petitioner repeatedly and
continuously hired
workers to do the same
kind of work as that
performed by those
whose contracts had
expired negates
petitioners contention
that those workers were
hired for a specific
project or undertaking
only.

Brent also laid down the


criteria under which term
employment cannot be
said to be in
circumvention of the law
on security of tenure:
1) The fixed period of
employment was
knowingly and
voluntarily agreed upon
by the parties without
any force, duress, or
improper pressure being
brought to bear upon the
employee and absent any
other circumstances
vitiating his consent; or
2) It satisfactorily
appears that the
employer and the
employee dealt with each
other on more or less
equal terms with no
moral dominance

exercised by the former


or the latter.
None of these criteria had
been met in the present
case. As pointed out by
the private respondents.
The five-month period
specified in private
respondents
employment contracts
having been imposed
precisely to
circumvent the
constitutional guarantee
on security of tenure
should, therefore, be
struck down or
disregarded as contrary
to public policy or
morals. To uphold the
contractual arrangement
between the petitioner
and the private
respondents would, in
effect, permit the former
to avoid hiring
permanent or regular
employees by simply
hiring them on a
temporary or casual
basis, thereby violating
the employees security of
tenure in their jobs.
Under Article 279 of the
Labor Code and the
recent jurisprudence, the
legal consequence of
illegal dismissal is
reinstatement without
loss of seniority rights
and other privileges, with
full back wages computed
from the time of
dismissal up to the time
of actual reinstatement,

without deducting the


earnings derived
elsewhere pending the
resolution of the case.

Philex
Mining
Corp
v.
NLRC
312 SCRA
119
August 10,
1999

Philex Mining
Corp is a
primarily
engaged in
large-scale
exploration,
development,
and utilization
of mineral
resources.

Austria and
Tamondong were
designated
Geochemical
Aides tasked to
assist the
Geochemist in the
analyses of soil
samples by micropippeting,
extractions with
MIBK, preparation
of solutions, etc.
for presentation to
AAS
measurement and
to prepare reports
of analyses. Borja
and
dela Cruz
designation was
that of utility
men whose
functions were "to
assist the
Geochemist in the
analyses of
samples
particularly on
weighing, acid
digestion &
filtration of
samples, and in
washing & drying
of Lab glasswares.

Regular employees.

RULING: DISMISSED

In this case,
petitioner has

The actual date of the


hiring of

not shown that


private respondents
were informed that
they were to be
assigned to a
specific project or
undertaking.

private respondent is
significant in the light of
the collective bargaining
agreement (CBA)
between petitioner and
its other employees. It is
not disputed that said
CBA fixes the
probationary period of
Geochemical Aides at six
(6) months,

Neither has it been


established that they
were informed of the
duration and scope
of such project or
undertaking at the
time
while that of Utility Men,
of their engagement, at three (3) months. This
that is, on June 1988
means that, as the
on the part of
Solicitor General
Austria and
correctly observes:
Tamondong, and on
January 1989 in the
x x x at the time private
case of Borja and de respondents Tamondong
la Cruz. Private
and Austria were made to
respondents were
sign the subject
informed thereof
contracts, they had
only much later on
already attained the
April 1989. We
status of regular
likewise agree with
employees, having been
the Solicitor General
allowed to work by
when he notes that:
petitioner beyond the
x x x while the
probationary period of
subject contracts
six (6) months. Private
purport to be for a
respondents Borja and
specific project or
Dela Cruz, on the other
undertaking only,
hand, were just nine (9)

the record is bereft


of evidence as to
what this specific
project or
undertaking actually
is. Neither is there
any evidence that
such project or
undertaking had
already been
completed or
terminated as could
possibly justify the
dismissal of private
respondents in
accordance with said
contracts. x x x.

days short of completing


their probationary period
of three (3) months when
they were made to sign
said contracts by
petitioner.
Petitioners timing is
indeed suspicious.
The signing of the
contracts at a time when
private respondents had
already attained, in the
case of Austria and
Tamondong, or were
about to attain, in the
case of Borja and de la
Cruz, regular
employment status under
the CBA is an indication
of petitioners illegal
intent.

The contracts appear to


be a subterfuge, having
been foisted upon private
respondents to
circumvent their right to
be secure in their tenure.
The fact that private
respondents were made
to sign such agreement
after they were hired is
not as absurd as the
Labor Arbiter thought.
In finding that
petitioners were hired on
April 16, 1989, the Labor
Arbiter held that:
x x x It also sounds
ridiculous for a company
to hire a person first then
require him to sign his
contract of employment

later. The hiring of


employees verbally may
seem possible for small
establishments. But it is
rather improbable for the
Philex Mining
Corporation, a company
with vast operations, with
its own personnel office,
would also hire
employees without any
written employment
contracts.
As even a cursory study
of jurisprudence would
show, companies with
vast operations are not
immune from the
temptation of
circumventing labor laws
for the sake of profit.
Petitioners contention
that private respondents
are project employees
likewise lacks merit.
Project employees are
those workers hired (1)
for a specific project or
undertaking, and (2) the
completion or
termination of such
project has been
determined at the time of
the engagement of the
employee.
The principal test for
determining whether
particular employees as
project employees as
distinguished from
regular employees, is
whether or not the
project employees were
assigned to carry out a
specific project or
undertaking,

the duration and scope of


which were specified at
the time the employees
were engaged for that
project.
Accordingly, we find
private respondents to be
regular employees of
petitioner. Private
respondents functions as
described above are no
doubt usually necessary
or desirable in the usual
business or trade of
petitioner-mining
company. Consequently,
the NLRC should not
have denied private
respondents claim to
rights and benefits
attached to such status
pursuant to petitioners
collective bargaining
agreement.
E. Ganzon
v.
NLRC
321 SCRA
119
December
22, 1999

Petitioner E.
Ganzon, Inc.,
is engaged in
the
construction
business. It
manufactures
its own
building
materials,
e.g., slab
runners,
acropos, jack
bases, window
grills, pulleys,
sliding doors
and all kinds
of aluminum
products,
hollow blocks
and all kinds

In this kind of
integrated
business
respondents were
hired, some as
early as 1987, as
Machinist,
MachinistOperator,
Electrical
Engineer,
Aluminum
Installer/Fabricato
r,
Aluminum
Installer/Helper,
Welder,
Warehouseman,
Marble Setter,
Fabricator/Welder
or Laborer/Helper

Regular employees.
Petitioner is
engaged, as
heretofore
mentioned, in the
construction
business and
manufactures its
own building
materials.
It has its own
machine shop and
construction
equipment. In this
kind of integrated
business
respondents were
hired, some as early
as 1987, as
Machinist,

RULING: PARTIALLY
GRANTED
There is no question that
a stipulation on an
employment contract
providing for a fixed
period
of employment such as
project-to-project
contract is valid provided
the period was agreed
upon
knowingly and
voluntarily by the parties,
without any force, duress
or improper pressure
being brought to bear
upon the employee and

of concrete
products. It
has its own
machine shop,
five (5) mixer
trucks, tower
cranes,
alimak,
elevator shaft,
and others.

Machinist-Operator,
Electrical Engineer,
Aluminum
Installer/Fabricator,
Aluminum
Installer/Helper,
Welder,
Warehouseman,
Marble Setter,
Fabricator/Welder
or Laborer/Helper
until their dismissal
on 25 January 1991.
Private respondents
were made to sign
employment
contracts
purportedly as
project employees
but which were
renewed every three
(3) months.

With this backdrop,


we agree with the
finding of the Labor
Arbiter that x x x x with the
successive contracts
of employment
where the
complainants
continued to
perform the same
kind of work
throughout the
entire period of their
employment, which
was for more than
one year, it is clear
that complainants
tasks were usually
necessary or
desirable in the
usual business or

absent any other


circumstances vitiating
his consent, or where it
satisfactorily appears that
the employer and
employee dealt with each
other on more or less
equal terms with no
moral dominance
whatever being exercised
by the former over the
latter. However, where
from the circumstances it
is apparent that periods
have been imposed to
preclude the acquisition
of tenurial security by the
employee, they should be
struck down as x x x
contrary to public policy,
morals, good custom or
public order.

As in Caramol,
sufficiently established in
the present case are
circumstances showing
that the alleged fixed
periods of employment
by way of project-toproject contracts were
imposed to preclude
acquisition of tenurial
security by private
respondents. We
reiterate that private
respondents performed
activities necessary or
desirable in the usual
business or trade of
petitioner and that they
rendered services for
more than a year.
Accordingly, the
arrangement on fixed

Phil. Fruit
&
Vegetable
v.
NLRC
310 SCRA
673
July 20,
1999

Petitioner
Philippine
Fruit and
Vegetable
Industries,
Inc. (PFVII,
for brevity) is
a governmentowned and
controlled
corporation
engaged in the
manufacture
and processing
of fruit and
vegetable
purees for
export.

The work of
complainants as
seeders, operators,
sorters, slicers,
janitors, drivers,
truck helpers,
mechanics and
office personnel is
without doubt
necessary in the
usual business of a
food processing
company like
petitioner PFVII.

trade of the
respondent
company. There can
be no escape from
the conclusion that
the complainants
were regular
employees of the
respondent as
provided by Article
280 of the Labor
Code x x x x

periods of employment
must be struck down as
contrary to public policy.

Regular employees.

RULING: AFFIRMED

As correctly noted
by the Office of the
Solicitor General,
private respondents
in this case are
deemed regular
employees by virtue
of the fact that they
performed functions
which are necessary
and desirable in the
usual business of
PFVII as provided
under the first
paragraph of Art.
280 of the Labor
Code.

Article 280 of the Labor


Code provides:
Regular and Casual
Employment.- The
provisions of written
agreement to the
contrary notwithstanding
and regardless of the oral
agreement of the parties,
an employment shall be
deemed to be regular
where the employee has
been engaged to perform
activities which are
usually necessary or
desirable in the usual
business or trade of the
employers, except where
the employment has been
fixed for a specific
project. Xxx
An employment shall be
deemed to be casual if it
is not covered by the
preceding paragraph;
provided, that, any
employee who has
rendered at least one year
of service whether such
service is continuous or
broken,

shall be considered a
regular employee with
respect to the activity in
which he is employed and
his employment shall
continue while such
actually exists.
Under the above
provision, an
employment shall be
deemed regular where
the employee: a) has
been engaged to perform
activities which are
usually necessary or
desirable in the usual
business or trade of the
employer; or b) has
rendered at least one year
of service, whether such
service is continuous or
broken, with respect to
the activity in which he is
employed.
In the case at bar, the
work of complainants as
seeders, operators,
sorters, slicers, janitors,
drivers, truck helpers,
mechanics and office
personnel is without
doubt necessary in the
usual business of a food
processing company like
petitioner PFVII.
It should be noted that
complainants'
employment has not been
fixed for a specific project
or undertaking the
completion or
termination of which has
been determined at the
time of their

appointment or hiring.
Neither is their
employment seasonal in
nature. While it may be
true that some phases of
petitioner company's
processing operations is
dependent on the supply
of fruits for a particular
season, the other equally
important aspects of its
business, such as
manufacturing and
marketing are not
seasonal.
The fact is that largescale food processing
companies such as
petitioner company
continue to operate and
do business throughout
the year even if the
availability of fruits and
vegetables is seasonal.

Having determined that


private respondents are
regular employees under
the first paragraph, we
need not dwell on the
question of whether or
not they had rendered
one year of service. This
Court has clearly stated
in Mercado, Sr. vs.
NLRC, that:
The second paragraph of
Article 280 demarcates
as casual employees, all
other employees who do
not fall under the
definition of the
preceding paragraph.
The proviso, in said

second paragraph, deems


as regular employees
those casual employees
who have rendered at
least one year of service
regardless of the fact that
such service may be
continuous or broken.
xxx Hence, the proviso is
applicable only to the
employees who are
deemed casuals but not
to the project
employees nor the
regular employees
treated in paragraph one
of Art. 280.
As correctly noted by the
Office of the Solicitor
General, private
respondents in this case
are deemed regular
employees by virtue of
the fact that they
performed functions
which are necessary and
desirable in the usual
business of PFVII as
provided under the first
paragraph of Art. 280 of
the Labor Code.
Finally, on the issue of
whether or not the NLRC
committed manifest error
in ordering petitioners to
pay backwages, 13th
month pay and
separation pay benefits to
194 members of
respondent union, we
have to rule in the
affirmative.
A careful examination of
the records shows that
only 80 of the 194 union
members presented

evidence to support and


prove their claims in the
form of affidavits and/or
testimonies, pay slips,
passbooks, identification
cards and other relevant
documents.
The other 114 members
did not present any kind
of evidence whatsoever.
It is a basic rule in
evidence that each party
must prove his
affirmative allegation
the plaintiff or
complainant has to prove
his affirmative
allegations in the
complaints and the
defendant or respondent
has to prove the
affirmative allegations in
his affirmative defenses
and counterclaims.
Edwin
Abasolo
v.
NLRC
346 SCRA
293
November
29, 2000

Private
respondent La
Union
Tobacco
Redrying
Corporation
(LUTORCO),
which is
owned by
private
respondent
See Lin Chan,
is engaged in
the business of
buying,
selling,
redrying and
processing of
tobacco leaves
and its byproducts.

Petitioners are
farmers of La
Union Tobacco
Redrying
Corporation.

Regular employees.

RULING: GRANTED

In the case at bar,


while it may appear
that the work of
petitioners is
seasonal, inasmuch
as petitioners have
served the company
for many years,
some for over 20
years, performing
services necessary
and indispensable to
LUTORCOs
business, serve as
badges of regular
employment.
Moreover, the fact
that petitioners do
not work

First, upon a thorough


review, the records speak
of a sale to
TABACALERA in 1993
under conditions
evidently so concealed
that petitioners were not
formally notified of the
impending sale of
LUTORCOs tobacco redrying operations to
TABACALERA and its
attendant consequences
with respect to their
continued employment
status under
TABACALERA. They
came to know of the fact
of that sale only when

continuously for one TABACALERA took over


whole year but only
the said tobacco refor the duration of
drying operations.
the tobacco season
Thus, under those
does not detract
circumstances, the
from considering
employment of
them in regular
petitioners with
employment since in
respondent LUTORCO
a litany of cases this
was technically
Court has already
terminated when
settled that seasonal TABACALERA took over
workers who are
LUTORCOs tobacco recalled to work from
drying operations In
time to time and are
1993. Moreover, private
temporarily laid off
respondent LUTORCOs
during off-season
allegation that
are not separated
TABACALERA assured
from service in said
the seniority rights of
period, but are
petitioners deserves scant
merely considered
consideration inasmuch
on leave until reas the same is not
employed.
supported by
documentary evidence
nor was it confirmed by
TABACALERA.
Besides, there is no law
requiring that the
purchaser of an entire
company should absorb
the employees of the
selling company.

The most that the


purchasing company can
do, for reasons of public
policy and social justice,
is to give preference to
the qualified separated
employees of the selling
company, who in its
judgment are necessary
in the continued
operation of the business
establishment. In the
instant case, the
petitioner employees

were clearly required to


file new applications for
employment. In reality
then, they were hired as
new employees of
TABACALERA.
Second, private
respondent LUTORCOs
contention that
petitioners themselves
severed the employeremployee relationship by
choosing to work with
TABACALERA is bereft
of merit considering that
its offer to return to work
was made more as an
afterthought when
private respondent
LUTORCO later realized
it still had tobacco leaves
for processing and
redrying.
The fact that petitioners
ultimately chose to work
with TABACALERA is
not adverse to
petitioners cause.
To equate the more stable
work with TABACALERA
and the temporary work
with LUTORCO is
illogical. Petitioners
untimely separation in
LUTORCO was not of
their own making and
therefore, not
construable as
resignation therefrom
inasmuch as resignation
must be voluntary and
made with the intention
of relinquishing the
office, accompanied with
an act of relinquishment.

Third, the test of whether


or not an employee is a
regular employee has
been laid down in De
Leon v. NLRC,in which
this Court held:
The primary standard,
therefore, of determining
regular employment is
the reasonable
connection between the
particular activity
performed by
the employee in relation
to the usual trade or
business of the employer.
The test is whether the
former is usually
necessary or desirable in
the usual business or
trade of the employer.
The connection can be
determined by
considering the nature of
the work performed and
its relation to the scheme
of the particular business
or trade in its entirety.
Also if the employee has
been performing the job
for at least a year, even if
the performance is not
continuous and merely
intermittent, the law
deems repeated and
continuing need for its
performance as sufficient
evidence of the necessity
if not indispensability of
that activity to the
business. Hence, the
employment is
considered regular, but
only with respect to such
activity, and while such
activity exists.

Thus, the nature of ones


employment does not
depend solely on the will
or word of the employer.
Nor on the procedure for
hiring and the manner of
designating the
employee, but on the
nature of the activities to
be performed by the
employee, considering
the employers nature of
business and the
duration and scope of
work to be done.
In the case at bar, while it
may appear that the work
of petitioners is seasonal,
inasmuch as petitioners
have served the company
for many years, some for
over 20 years,
performing services
necessary and
indispensable to
LUTORCOs business,
serve as badges of regular
employment.
Moreover, the fact that
petitioners do not work
continuously for one
whole year but only for
the duration of the
tobacco season does not
detract from considering
them in regular
employment since in a
litany
of cases this Court has
already settled that
seasonal workers who are
called to work from time
to time and are
temporarily laid off
during off-season are not

separated from service in


said period, but are
merely considered on
leave until re-employed.
Private respondents
reliance on the case of
Mercardo v. NLRC is
misplaced considering
that since in said case of
Mercado, although the
respondent company
therein consistently
availed of the services of
the petitioners therein
from year to year, it was
clear that petitioners
therein were not in
respondent companys
regular employ.
Petitioners therein
performed different
phases of agricultural
work in a given year.
However, during that
period, they were free to
contract their services to
work for other farm
owners, as in fact they
did.
Thus, the Court ruled in
that case that their
employment would
naturally end upon the
completion of each
project or phase of farm
work for which they have
been contracted.
All the foregoing
considered, the public
respondent NLRC in the
case at bar erred in its
total affirmance of the
dismissal of the
consolidated complaint,
for separation pay,
against private

respondents LUTORCO
and See Lin Chan
considering that
petitioners are regular
seasonal employees
entitled to the benefits of
Article 283 of the Labor
Code which applies to
closures or cessation of
an establishment or
undertaking, whether it
be a complete or partial
cessation or closure of
business operation.
Mercado
v.
NLRC
201 SCRA
332
Septembe
r 5, 1991

Private
respondents
were engaged
in agricultural
business.

Petitioners were
farmers of the
private
respondents.

Project employees or
seasonal employees.

RULING: DISMISSED
Article 280 of the Labor
Code reads in full:

A project employee
has been defined to
be one whose
Article 280. Regular and
employment has
Casual Employment.
been fixed for a
The provisions of written
specific project or
agreement to the
undertaking, the
contrary notwithstanding
completion or
and regardless of the oral
termination of which agreement of the parties,
has been
an employment shall be
determined at the
deemed to be regular
time of the
where the employee has
engagement of the
been engaged to perform
employee, or where
activities which are
the work or service
usually necessary or
to be performed is
desirable in the usual
seasonal in nature
business or trade of the
and the employment employer, except where
is for the duration of the employment has been
the season as in the fixed for a specific project
present case.
or undertaking the
completion or
termination of which has
been determined at the
time of the engagement
of the employee or where
the work or services to be
performed is seasonal in
nature and the
employment is for the

duration of the season.


An employment shall be
deemed to be casual if it
is not covered by the
preceding paragraph:
Provided, That, any
employee who has
rendered at least one year
of service whether such
service is continuous or
broken, shall be
considered a regular
employee with respect to
the activity in which he is
employed and his
employment shall
continue while such
actually exists.
The first paragraph
answers the question of
who are employees. It
states that, regardless of
any written or oral
agreement to the
contrary, an employee is
deemed regular where he
is engaged in necessary
or desirable activities in
the usual business or
trade of the employer,
except for project
employees.
A project employee has
been defined to be one
whose employment has
been fixed for a specific
project or undertaking,
the completion or
termination of which has
been determined at the
time of the engagement
of the employee, or where
the work or service to be
performed is seasonal in

nature and the


employment is for the
duration of the season as
in the present case.
The second paragraph of
Art. 280 demarcates as
"casual" employees, all
other employees who do
not fan under the
definition of the
preceding paragraph. The
proviso, in said second
paragraph, deems as
regular employees those
"casual" employees who
have rendered at least
one year of service
regardless of the fact that
such service may be
continuous or broken.
Clearly, therefore,
petitioners being project
employees, or, to use the
correct term, seasonal
employees, their
employment legally ends
upon completion of the
project or the season.
The termination of their
employment cannot and
should not constitute an
illegal dismissal.
Manila
Hotel
v.
NLRC
141 SCRA
169
October
13, 2000

Petitioners are
the Manila
Hotel
Corporation
(hereinafter
referred to as
MHC) and
the Manila
Hotel
International
Company,
Limited

Private respondent
Marcelo Santos
(hereinafter
referred to as
Santos) was an
overseas worker
employed as a
printer at the
Mazoon Printing
Press, Sultanate of
Oman.
Subsequently, in

Private respondent
is not an employee
of the petitioners.
Respondent Santos
was hired directly by
the Palace Hotel, a
foreign employer,
through
correspondence sent
to the Sultanate of
Oman, where

RULING: ANNULS
the orders and
resolutions of the
National Labor
Relations
Commission.
The employment
contract.-- Respondent
Santos was hired directly
by the Palace Hotel, a
foreign employer,

(hereinafter
referred to as
MHICL).

June 1988, he was


directly hired by
the Palace Hotel,
Beijing, Peoples
Republic of China
and later
terminated due to
retrenchment.

respondent Santos
was then employed.
He was hired
without the
intervention of the
POEA or any
authorized
recruitment agency
of the government.

through correspondence
sent to the Sultanate of
Oman, where respondent
Santos was then
employed. He was hired
without the intervention
of the POEA or any
authorized recruitment
agency of the
government.
Under the rule of forum
non conveniens, a
Philippine court or
agency may assume
jurisdiction over the case
if it chooses to do so
provided:
(1) that the Philippine
court is one to which the
parties may conveniently
resort to;
(2) that the Philippine
court is in a position to
make an intelligent
decision as to the law and
the facts; and (3) that the
Philippine court has or is
likely to have power to
enforce its decision. The
conditions are unavailing
in the case at bar.
The employment contract
was not perfected in the
Philippines. Respondent
Santos signified his
acceptance by writing a
letter while he was in the
Republic of Oman. This
letter was sent to the
Palace Hotel in the
Peoples Republic of
China.
This is not to say that
Philippine courts and

agencies have no power


to solve controversies
involving foreign
employers. Neither are
we saying that we do not
have power over an
employment contract
executed in a foreign
country. If Santos were
an overseas contract
worker, a Philippine
forum, specifically the
POEA, not the NLRC,
would protect him. He is
not an overseas contract
worker a fact which he
admits with conviction.
Even assuming that the
NLRC was the proper
forum, even on the
merits, the NLRCs
decision cannot be
sustained.
Piercing the veil of
corporate entity is an
equitable remedy. It is
resorted to when the
corporate fiction is used
to defeat public
convenience, justify
wrong, protect fraud or
defend a crime. It is
done only when a
corporation is a mere
alter ego or business
conduit of a person or
another corporation.

The tests in determining


whether the corporate
veil may be pierced are:

First, the defendant must


have control or complete
domination of the other
corporations finances,
policy and business
practices with regard to
the transaction attacked.
There must be proof that
the other corporation had
no separate mind, will or
existence with respect the
act complained of.
Second, control must be
used by the defendant to
commit fraud or wrong.
Third, the aforesaid
control or breach of duty
must be the proximate
cause of the injury or loss
complained of. The
absence of any of the
elements prevents the
piercing of the corporate
veil.
It is basic that a
corporation has a
personality separate and
distinct from those
composing it as well as
from that of any other
legal entity to which it
may be related. Clear and
convincing evidence is
needed to pierce the veil
of corporate fiction. In
this case, we find no
evidence to show that
MHICL and MHC are one
and the same entity.
Second, and more
importantly, there was no
existing employeremployee relationship
between Santos and
MHICL. In determining
the existence of an

employer-employee
relationship, the
following elements are
considered:
(1) the selection and
engagement of the
employee;
(2) the payment of
wages;
(3) the power to dismiss;
and
(4) the power to control
employees conduct.
MHICL did not have and
did not exercise any of
the aforementioned
powers. It did not select
respondent Santos as an
employee for the Palace
Hotel. He was referred to
the Palace Hotel by his
friend, Nestor Buenio.
MHICL did not engage
respondent Santos to
work.
The terms of employment
were negotiated and
finalized through
correspondence between
respondent Santos, Mr.
Schmidt and Mr. Henk,
who were officers and
representatives of the
Palace Hotel and not
MHICL. Neither did
respondent Santos
adduce any proof that
MHICL had the power to
control his conduct.
Finally, it was the Palace
Hotel, through Mr.
Schmidt and not MHICL
that terminated
respondent Santos

services. Likewise, there


is no evidence to show
that the Palace Hotel and
MHICL are one and the
same entity. The fact that
the Palace Hotel is a
member of the Manila
Hotel Group is not
enough to pierce the
corporate veil between
MHICL and the Palace
Hotel.
Esperanza
Escorpizo
v.
NLRC
306 SCRA
497
April 30,
1999

Respondent is
a private
university
located in
Baguio City.

Petitioner
Esperanza
Escorpizo was
initially hired by
respondent
university on June
13, 1989 as a high
school classroom
teacher.

Probationary
employee.

RULING: DISMISSED
There is no dispute that
Escorpizo was a
probationary employee
from the time she was
employed on June 13,
1989 and until the end of
the school semester in
March 1991 or for two
academic years.
Thereafter, on her plea,
she was again allowed to
teach for school year
1991-1992. She knew
that her status then was
not that of a regular
employee. For, she was
also aware that her
attainment of a regular
employment is
conditioned upon
compliance with the
requisites attached to her
position, pursuant to the
rules
prescribed by respondent
university, to wit:

A probationary
employee is one
who, for a given
period of time, is
being observed and
evaluated to
determine whether
or not he is qualified
for permanent
employment. A
probationary
appointment affords
the employer an
opportunity to
observe the skill,
competence and
attitude of a
probationer. The
word
probationary, as
used to describe the
period of
employment,
implies the purpose
of the term or
period. While the
employer observes
PROBATIONARY
the fitness, propriety
STATUS
and efficiency of a
probationer to
An appointment to teach
ascertain whether he during the first two years
is qualified for
at the University is

permanent
employment,

the probationer at
the same time, seeks
to prove to the
employer that he has
the qualifications to
meet the
reasonable
standards for
permanent
employment.

probationary in nature.
xxx.
During the period of
probation (four
semesters,
excluding summer
terms), the teacher is
observed and evaluated
formally by a committee
composed of:
(1) the most
ranking/senior member
of the faculty in his
discipline/field of
specialization, (2) his
department head or
college dean, (3) the
Personnel Director and
(4) the Vice President for
Academic Affairs,
including his students to
determine his
competency and fitness
to be elevated to
permanent status.
xxx

xxx

xxx

Permanent status is
granted to the faculty
member of the high
school or elementary
school who has
satisfactorily complied
with the requirements of
the probationary period,
has at least a bachelors
degree in education, and
has passed the
Professional Teacher
Board Examination or an
equivalent Civil Service
Examination.
Under the aforecited rule,

the following conditions


must concur in order that
a probationary teacher
may be extended a
regular appointment; (1)
the faculty member must
satisfactorily complete
the probationary period
of four semesters or two
years, within which his
performance shall be
observed and evaluated
for the purpose of
determining his
competency and fitness
to be extended
permanent status; and
(2) the faculty member
must pass the PBET or an
equivalent civil service
examination.
Undoubtedly, the
requirement of passing
the PBET before one
could become a regular
employee as prescribed
by respondent university
is legally in order.

Being a prerequisite
imposed by law, such
requirement could not
have been waived by
respondent university, as
herein insisted by
petitioners.
In the same vein,
petitioners proposition
that upon completion of
two-year probationary
period with a very
satisfactory performance,
Escorpizo automatically
becomes permanent is

not correct. For as earlier


stressed, Escorpizo could
only qualify to become
permanent employee
upon fulfilling the
reasonable standards for
permanent employment
which include passing the
board examination for
teachers.
In the instant case,
Escorpizo was entitled to
security of tenure during
the period of her
probation but such
protection ended the
moment her employment
contract expired at the
close of school year 19911992 and she was not
extended a new
appointment. No vested
right to a permanent
appointment had as yet
accrued in Escorpizos
favor since she had not
yet complied, during her
probation, with the
prerequisites necessary
for the acquisition of
permanent status.
Consequently, as
respondent university
was not under obligation
to renew Escorpizos
contract of employment,
her separation cannot be
said to have been without
justifiable cause. Legally
speaking, Escorpizo was
not illegally dismissed.
Her contract merely
expired.

Radin
Alcira
v.
NLRC
G.R. No.
149859
June 9,
2004

Respondent
Middleby
Philippines
Corporation
(Middleby) is
engaged in a
business of
manufacturing
equipments.

Petitioner was
hired by the
respondent as
engineering
support services
supervisor on a
probationary basis
for six months.

Probationary
employee.

RULING: DENIED

The first issue we must


ART. 281.
resolve is whether
PROBATIONARY
petitioner was allowed to
EMPLOYMENT.
work beyond his
Probationary
probationary period and
employment shall
was therefore already a
not exceed six (6)
regular employee at the
months from the
time of his alleged
date the employee
dismissal. We rule in the
started working,
negative. The argument
unless it is covered
lacks merit. As correctly
by an apprenticeship held by the labor arbiter,
agreement
the appointment contract
stipulating a longer
also stated in another
period. The services
part thereof that
of an employee who petitioners employment
has been engaged on status was probationary
a probationary basis
(6 mos.).
may be terminated
The five-month period
for a just cause or
referred to the evaluation
when he fails to
of his work.
qualify as a regular
We hold that respondent
employee in
Middleby substantially
accordance with
notified petitioner of the
reasonable
standards to qualify as a
standards made
regular employee when it
known by the
apprised him, at the start
employer to the
of his employment, that it
employee at the time
would evaluate his
of his engagement.
supervisory skills after
An employee who is
five months.
allowed to work
after a probationary
It is settled that even if
period shall be
probationary employees
considered a regular do not enjoy permanent
employee.
status, they are accorded
the constitutional
protection of security of
tenure. This means they
may only be terminated
for just cause or when
they otherwise fail to
qualify as regular
employees in accordance
with reasonable
standards made known to

them by the employer at


the time of their
engagement. Although
we can regard petitioners
severance from work as
dismissal, the same
cannot be deemed illegal.
As found by the labor
arbiter, the NLRC and
the Court of Appeals,
petitioner (1) incurred
ten absences (2) was
tardy several times (3)
failed to wear the proper
uniform many times and
(4) showed inferior
supervisory skills.
Petitioner failed to
satisfactorily refute these
substantiated
allegations.Taking all this
in its entirety, respondent
Middleby was clearly
justified to end its
employment relationship
with petitioner.

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