CASE DIGEST 10 BERNATE VS PBA, G.R. No.

192084 FACTS OF THE

CASE: Compl ainants (Jose Mel Bernarte a nd Rena to Gueva rra ) a ver
tha t they were i nvi ted to joi n the PBA a s referees . Duri ng the
l eadership of Commissioner Emilio Berna rdi no, they were ma de to
s i gn contracts on a year-to-year basis, however, duri ng the term of
Commi s s i oner Ea l a , cha nges were ma de on the terms of thei r
empl oyment. Complainant Bernarte, for instance, wa s not ma de to
s i gn a contract during the first conference of the Al l -Fi l i pi no Cup. I t
wa s only during the second conference when he was made to s i gn a
one a nd a half month contract for the period July 1 to August 5, 2003.
On Ja nuary 15, 2004, Berna rte received a letter from the Office of the
Commi ssioner a dvising him that his contract would not be renewed
ci ti ng his unsatisfactory performance on a nd off the court. It wa s a
tota l shock for Bernarte who wa s a wa rded Referee of the yea r i n
2003. He fel t that the dismissa l wa s ca us ed by hi s refus a l to fi x a
ga me upon order of Ernie De Leon. On the other hand, compl a i na nt
Gueva rra alleges that he was invited to join the PBA pool of referees
i n February 2001. On Ma rch 1, 2001, he s i gned a contract as tra i nee.
Begi nni ng 2002, he s i gned a yea rl y contra ct a s Regul a r Cl a s s C
referee. On Ma y 6, 2003, res pondent Ma rti nez i s s ued a
memora ndum to Gueva rra expres s i ng di s s a ti s fa cti on over hi s
questioning on the assignment of referees offi ci a ti ng out-of-town
ga mes. Beginning February 2004, he wa s no l onger ma de to s i gn a
contra ct. Respondents aver, on the other ha nd, tha t compl a i na nts
entered into two contracts of retainer with the PBA i n the yea r 2003.
After the l apse of the latter period, PBA decided not to renew thei r
contra cts. Complainants were not illegally di s mi s s ed beca us e they
were not employees of the PBA. Their respective contracts of retainer
were s imply not renewed. PBA ha d the prerogative of whether or not
to renew their contracts, which they knew were fixed. La bor Arbi ter
decl ared petitioner a n employee whose dismissal by respondents was
i l legal a nd ordered the reinstatement of petitioner and the pa yment
of ba ckwages. The NLRC a ffirmed the Labor Arbi ters judgment. The
CA revers ed the NLRCs decision and found petitioner an independent
contra ctor since respondents di d not exerci s e a ny form of contro l
over the means and methods by which petitioner performed his work
a s a basketball referee a nd private respondents repea ted hi ri ng di d
not ma de them regul a r empl oyees by opera ti on of l a w.
ISSUE:
Whether or not petitioner i s an employee of respondents , whi ch i n
turn determines whether peti ti oner wa s i l l ega l l y di s mi s s ed. NO
RULING: The petition was not granted and affirmed the CAs decision.
The Court rul ed that the non-renewal of the contra ct between the
pa rti es does not cons ti tute i l l ega l di s mi s s a l of peti ti oner by
res pondents. The existence of a n employer-employee relationshi p i s
ul ti mately a question of fact. As a genera l rul e, fa ctua l i s s ues a re
beyond the provi nce of thi s Court. However, thi s rul e a dmi ts of
exceptions, one of which i s where there a re confl i cti ng fi ndi ngs of
fa ct between the Court of Appeals, on one ha nd, a nd the NLRC a nd
La bor Arbi ter, on the other, s uch as in the present case. To determine
the exi stence of an employer-employee relati ons hi p, ca s e l a w ha s
cons i s tentl y a ppl i ed the four-fol d tes t, to wi t: CODE: ESP E Empl oyers power to control the empl oyee on the mea ns a nd
methods by whi ch the work i s a ccompl i s hed; S - Sel ecti on a nd
enga gement of the empl oyee; P - Pa yment of wa ges ; - Power of
di s missal. The so-called control test is the most important indicator of
the presence or absence of a n employer-employee relationshi p. The
foregoing stipulations i n the retainer agreement hardly demons tra te
control over the means and methods by which peti ti oner performs
hi s work a s a referee offi ci a ti n g a PBA ba s ketba l l ga me. The
contra ctual stipulations do not pertain to, much less dictate, how and
when peti ti oner wi l l bl ow the whi s tl e a nd ma ke ca l l s . On the
contra ry, they merely s erve as rules of conduct or guidelines i n order
to ma i ntain the i ntegri ty of the profes s i ona l ba s ketba l l l ea gue.
Logi cally, the line should be drawn between rules tha t merel y s erve
a s guidelines towards the a chievement of the mutually desired resul t
wi thout dictating the means or methods to be employed i n a ttai ni ng
i t, a nd those that control or fi x the methodology a nd bind or res tri ct
the pa rty hired to the use of s uch means. The fi rst, which aim onl y to
promote the result, create no employer-employee relationship unlike

the s econd, which a ddress both the res ul t a nd the mea ns u s ed to

a chi eve i t. We a gree with respondents that once in the playing court,
the referees exercise their own i ndependent judgment, based on the
rul es of the game, as to when a nd how a ca l l or deci s i on i s to be
ma de. The very na ture of petitioners job of officiating a professi ona l
ba s ketba l l ga me undoubtedl y ca l l s for freedom of control by
res pondents. Moreover, the following ci rcums ta nces i ndi ca te tha t
peti tioner i s an independent contractor: (1) the referees a re required
to report for work only when PBA ga mes a re s chedul ed, whi ch i s
three ti mes a week s pread over an average of only 105 pl aying days a
yea r, a nd they officiate games at a n a verage of two hours per ga me;
a nd (2) the only deductions from the fees recei ved by the referees
a re wi thholding taxes. I n other words, unlike regular employees who
ordi narily report for work eight hours per da y for fi ve da ys a week,
peti tioner i s required to report for work onl y when PBA ga mes a re
s cheduled or three ti mes a week at two hours per game. In addi ti on,
there a re no deducti ons for contri buti ons to the Soci a l Securi ty
Sys tem, Philhealth or Pa g-Ibig, which are the usual deducti ons from
empl oyees salaries. These undisputed circumstances buttress the fact
tha t petitioner i s an i ndependent contractor, a nd not a n employee of
res pondents. Furthermore, the a pplicable foreign ca se l a w decl a res
tha t a referee is a n i ndependent contractor, whose special skill s a nd
i ndependent judgment a re required specifically for s uch position and
ca nnot possibly be controlled by the hiring party. In a ddition, the fa ct
tha t PBA repeatedly hi red peti ti oner does not by i ts el f prove tha t
peti tioner i s a n empl oyee of the former. For a hi red pa rty to be
cons idered an employee, the hiring party must have control over the
mea ns a nd methods by which the hired party is to perform hi s work,
whi ch i s a bs ent i n thi s ca s e.

CASE DIGEST 11 ATOK VS GISON, G.R. No. 169510 FACTS OF THE

CASE: Res pondent Jes us P. Gi s on wa s enga ged a s pa rt-ti me
cons ultant on retainer basis by petitioner Atok Big Wedge Compa ny,
Inc. through i ts then As s t. Vi ce -Pres i dent a nd Acti ng Res i dent
Ma na ger, Ruti l l o A. Torres . As a cons ul ta nt on reta i ner ba s i s ,
res pondent a ssisted petitioner's retained legal counsel wi th ma tters
perta i ni ng to the pros ecuti on of ca s es a ga i ns t i l l ega l s urfa ce
occupa nts within the a rea covered by the company's mineral cl a i ms .
Res pondent was l ikewise tasked to perform liaison work with several
government agencies, which he s aid was his expertise. Petitioner di d
not require respondent to report to i ts offi ce on a regul a r ba s i s ,
except when occasionally requested by the management to di s cus s
ma tters needing his expertise a s a cons ul ta nt. As pa yment for hi s
s ervi ces, respondent received a reta i ner fee of P3,000.00 a month.
The pa rties executed a retainer a greement, but such agreement wa s
mi s pl a ced a nd ca n no l onger be found. The s a i d a rra ngement
conti nued for the next el even yea rs . Someti me therea fter, s i nce
res pondent was getting old, he requested that peti ti oner ca us e hi s
regi stration with the Social Security Sys tem (SSS), but peti ti oner di d
not a ccede to his request. He l ater reiterated his reques t but i t wa s
i gnored by res pondent cons i deri ng tha t he wa s onl y a
reta i ner/consultant. Thus, respondent filed a Complaint with the SSS
a ga inst petitioner for the latter's refusal to ca use his registration with
the SSS. Thereafter, a Memorandum was issued a dvising respondent
tha t wi thin 30 days from receipt thereof, petitioner i s terminating his
reta i ner contract with the company s ince his servi ces a re no l onger
necessary. Respondent then filed a Complaint for i l l ega l di s mi s s a l ,
unfa ir labor practice, underpayment of wages, non -pa yment of 13th
month pay, va cation pay, a nd sick leave pay wi th the Nationa l La bor
Rel ations Commission (NLRC) against petitioner, Ma ri o D. Cera , a nd
Teofilo R. Asuncion, Jr. La bor Arbiter rendered a Deci s i on rul i ng i n
fa vor of the petitioner a nd found no employer-employee relationship
between petitioner a nd respondent. NLRC a ffirmed the deci s i on of
the La bor Arbi ter. CA reversed the deci s i on of the NLRC a nd rul ed
tha t he is deemed a regul a r empl oyee of the peti ti oner a fter the
l a ps e of one yea r from hi s empl oyment. Cons i deri ng a l s o tha t
res pondent ha d been performi ng s ervi ces for the peti ti oner for
el even years, respondent is entitled to the ri ghts and pri vi l eges of a
regul a r empl oyee.

ISSUE: Whether or not there was an employer-employee relationship

between the peti ti oner a nd the res pondent.
NO
RULING: The petition was granted. The Court rul ed tha t s i nce tha t
there i s no employer-employee relationship between the parties, the
termi nation of respondent's s ervi ces by the peti ti oner a fter due
noti ce di d not cons ti tute i l l ega l di s mi s s a l wa rra nti ng hi s
rei nstatement and the payment of full backwages , a l l owa nces a nd
other benefits. Well-entrenched is the doctrine that the existence of
a n employer-employee relationship is ultimatel y a ques ti on of fa ct
a nd that the findings thereon by the Labor Arbiter a nd the NLRC s hall
be a ccorded not only respect but even fi na l i ty when s upported by
s ubstantial evidence. Being a ques ti on of fa ct, the determi na ti on
whether s uch a rel a ti ons hi p exi s ts between peti ti oner a nd
res pondent was well within the province of the La bor Arbiter a nd the
NLRC. Bei ng supported by s ubstantial evidence, such determi na ti on
s hould have been a ccorded great weight by the CA i n res ol vi ng the
i s s ue. To determi ne the exi s tence of a n empl oyer-empl oyee
rel a tionship, case l aw has consistently a pplied the four-fol d tes t, to
wi t: CODE: ESP E - Empl oyers power to control the empl oyee on the
mea ns a nd methods by which the work is accomplished; S - Selection
a nd engagement of the employee; P - Pa yment of wages ; - Power of
di s missal. The so-called control tes t i s commonl y rega rded a s the
mos t cruci al a nd determinative i ndicator of the presence or a bs ence
of a n employer-employee relati ons hi p. Under the control tes t, a n
empl oyer-employee relationship exists where the pers on for who m
the s ervices are performed reserves the ri ght to control not onl y the
end a chieved, but also the ma nner a nd means to be used i n reachi ng
tha t end. Applyi ng the aforementioned test, a n employer-empl oyee
rel a tionship is a pparently a bs ent i n the ca s e a t ba r. Among other
thi ngs , res pondent wa s not requi red to report everyda y duri ng
regul ar office hours of petitioner. Respondent's monthly retainer fees
were paid to him either at his residence or a loca l res ta ura nt. More
i mporta ntl y, peti ti oner di d not pres cri b e the ma nner i n whi ch
res pondent would a ccomplish any of the tasks i n which his experti s e
a s a liaison officer was needed; respondent was left alone a nd gi ven
the freedom to a ccompl i s h the ta s ks us i ng hi s own mea ns a nd
method. Respondent was assigned tasks to perform, but peti ti oner
di d not control the ma nner a nd methods by whi ch res pondent
performed these tasks. Verily, the a bsence of the element of control
on the part of the petitioner engenders a conclusion that he is not a n
empl oyee of the petitioner. Moreover, the a bs ence of the pa rti es '
reta i ners hi p a greement notwi ths ta ndi ng, res pondent cl ea rl y
a dmitted that petitioner hired him in a limited capacity only a nd tha t
there will be no employer-empl oyee rel a ti ons hi p between them.
Res pondent is not a n employee, much more a regul a r empl oyee of
peti tioner. Despite the fact that petitioner made use of the s ervi ces
of res pondent for eleven years, he sti l l ca nnot be cons i dered a s a
regul ar empl oyee of peti ti oner. Arti cl e 280 of the La bor Code, i n
whi ch the l ower court used to buttress i ts fi ndings tha t res pondent
beca me a regular employee of the petitioner, is not a pplicable i n the
ca s e a t bar. Indeed, the Court has ruled that said provision is not the
ya rds ti ck for determi ni ng the exi s tence of a n empl oyment
rel a tionship because it merely distinguis hes between two ki nds of
empl oyees; i t does not a pply where the existence of an empl oyment
rel a ti ons hi p i s i n di s pute .

CASE DIGEST 12 NITTO ENTERPRISES VS NLRC, G.R. No. 114337

September 29, 1995 FACTS OF THE CASE: Peti ti oner Nitto Enterprises,
a compa ny engaged in the s ale of glass a nd a luminum products, hired
Roberto Ca pili s ometime in May 1990 a s a n a pprenti ce ma chi ni s t,
mol der a nd core maker as evidenced by a n a pprenticeship agreement
for a peri od of s i x (6) months from Ma y 28, 1990 to November 28,
1990 wi th a da i l y wa ge ra te of P66.75 whi ch wa s 75% of the
a pplicable minimum wage. On Augus t 2, 1990, Roberto Ca pi l i who
wa s handling a piece of glass which he was working on, a cci denta l l y
hi t a nd i njured the leg of a n offi ce s ecreta ry who wa s trea ted a t a
nea rby hos pi ta l . La ter tha t s a me da y, a fter offi ce hours , pri va te

res pondent entered a workshop within the office premises which was
not hi s work s tation. There, he opera ted one of the power pres s
ma chines wi thout a uthority a nd i n the process i njured his l eft thumb.
Peti ti oner s pent the amount of P1,023.04 to cover the medication of
pri va te respondent. The following day, Roberto Ca pil i wa s a s ked to
res i gn in a letter. On August 3, 1990 pri va te respondent executed a
Qui tcl aim a nd Release in favor of petitioner for a nd i n consi dera ti on
of the s um of P1,912.79. Three da ys a fter, pri va te res pondent
forma lly filed before the NLRC a complaint for illegal di s mi s s a l a nd
pa yment of other monetary benefits. The La bor Arbiter rendered hi s
deci sion finding the termination of private respondent a s va l i d a nd
di s missing the money cl a i m for l a ck of meri t. It rul ed tha t pri va te
res pondent who was hired as a n a pprenti ce vi ol a ted the terms of
thei r a greement when he a cted with gross negligence resulting i n the
i njury not only to hi ms el f but a l s o to hi s fel l ow worker, a nd ha d
s hown that "he does not have the proper a tti tude i n empl oyment
pa rti cularly the handling of machines without a uthori ty a nd proper
tra i ning. The NLRC reversed the decision of the La bor Arbiter. It ruled
tha t complainant was respondent's regular empl oyee under Arti cl e
280 of the La bor Code, as ea rl y a s Ma y 28,1990, who thus enjoyed
the s ecuri ty of tenure.
ISSUE: Whether or not there is va lid cause for the termination of the
s ervi ce of pri va te res pondent. NO
RULING: The petition was not granted. The Court affirmed the NLRCs
deci sion that respondent was considered a regul a r empl oyee. The
l a w is cl ear on thi s ma tter. Arti cl e 61 of the La bor Code provi des :
Contents of a pprenti ces hi p a greement. Apprenti ces hi p
a greements, i ncluding the main ra tes of a pprentices, s hall conform to
the rul es i s s ued by the Mi ni s ter of La bor a nd Empl oyment. The
peri od of apprenticeship shall not exceed six months. Apprenticeship
a greements providing for wage ra tes below the l egal minimum wage,
whi ch in no case s hall s ta rt bel ow 75% per cent of the a ppl i ca bl e
mi ni mum wa ge, ma y be entered i nto onl y i n a ccorda nce wi th
a pprenticeship program duly approved by the Minister of La bor a nd
Empl oyment. The Mi nistry s hall develop standard model programs of
a pprenticeship. In the case at bench, the a pprenticeshi p a greement
between petitioner a nd private respondent was executed on Ma y 28,
1990 a l legedly employing the latter a s an apprentice i n the tra de of
"ca re ma ker/molder." On the same date, an a pprenticeship progra m
wa s prepared by peti ti oner a nd s ubmi tted to the Depa rtment of
La bor a nd Employment. However, the a pprenticeship Agreement was
fi l ed only on June 7, 1990. Notwi thstanding the absence of a pprova l
by the Department of Labor a nd Empl oyment, the a pprenti ces hi p
a greement wa s enforced the da y i t wa s s i gned. Ba s ed on the
evi dence before us, petitioner did not comply wi th the requirements
of the l aw. It is mandated that a pprenticeship a greements entered
i nto by the empl oyer a nd a pprenti ce s ha l l be entered onl y i n
a ccordance with the a pprenticeship progra m dul y a pproved by the
Mi ni ster of Labor and Employment. Pri or a pproval by the Department
of La bor a nd Employment of the proposed a pprenticeship program is,
therefore, a condi ti on s i ne quo non before a n a pprenti ces hi p
a greement ca n be va lidly entered into. The act of filing the propos ed
a pprenti ces hi p progra m wi th the Depa rtment of La bor a nd
Empl oyment is a preliminary s tep towards its final approval a nd does
not i nstantaneously gi ve ri se to an employer-apprentice relationship.
Hence, since the a pprenticeship agreement between peti ti oner a nd
pri va te respondent has no force a nd effect i n the a bsence of a va l i d
a pprenti ces hi p progra m dul y a pproved by the DOLE, pri va te
res pondent's assertion that he was hired not a s an a pprentice but a s
a delivery boy ("kargador" or "pahi na nte") des erves credence. He
s hould rightly be considered as a regular employee of peti ti oner a s
defi ned by Arti cl e 280 of the La bor Code. Art. 280 of th e La bor
provi des that, xxx a n empl oyment s ha l l be deemed to be regul a r
where the employee has been engaged to perform a cti vi ti es whi ch
a re us ually necessary or desirable i n the usual bus i nes s or tra de of
the employer, except where the empl oyment ha s been fi xed for a
s pecific project or underta ki ng the compl eti on or termi na ti on of
whi ch has been determined at the ti me of the enga gement of the
empl oyee or where the work or servi ces to be performed is seasona l
i n na ture a nd the empl oyment i s for the dura ti on o f the s ea s on.

CASE DIGEST 13 FRANCISCO VS NLRC, G.R. No. 170087 FACTS OF THE

CASE: In 1995, peti tioner was hired by Ka sei Corpora ti on duri ng i ts
i ncorpora ti on s ta ge. She wa s des i gna ted a s Accounta nt a nd
Corpora te Secretary a nd was assigned to handl e a l l the a ccounti ng
needs of the company. She was also designated a s Liais on Offi cer to
the Ci ty of Ma kati to s ecure business permits, cons tructi on permi ts
a nd other licenses for the initial operation of the company. Al though
s he was designated as Corporate Secreta ry, s he wa s not entrus ted
wi th the corporate documents ; nei ther di d s he a ttend a ny boa rd
meeti ng nor requi red to do s o. She never prepa red a ny l ega l
document a nd never repres ented the compa ny a s i ts Corpora te
Secretary. However, on s ome occasions, s he was preva i l ed upon to
s i gn documenta ti on for the compa ny. In 1996, peti ti oner wa s
des ignated Acting Ma nager. The corporation also hired Gerry Ni no a s
a ccountant in lieu of petitioner. As Acting Ma na ger, peti ti oner wa s
a s s i gned to ha ndl e recrui tment of a l l e mpl oyees a nd perform
ma nagement administration functions; represent the company i n a l l
dea lings with government a gencies, es peci a l l y wi th the Burea u of
Internal Revenue (BIR), Social Securi ty Sys tem (SSS) a nd i n the ci ty
government of Ma kati; a nd to a dminister a ll other matters pertaining
to the operation of Kasei Restaurant which is owned a nd operated by
Ka s ei Corpora ti on. On October 15, 2001, peti ti oner a s ked for her
s a lary from Acedo a nd the rest of the officers but s he wa s i nformed
tha t s he is no l onger connected with the company. Since she wa s no
l onger paid her salary, petitioner did not report for work a nd filed a n
a cti on for constructive dismissal before the labor a rbi ter. The La bor
Arbi ter found that petitioner was illegally dismissed a nd found tha t
the complainant is the employee of the respondent corporation. The
NLRC a ffi rmed with modification the Deci s i on of the La bor Arbi ter.
The CA revers ed the NLRC decision. ISSUE: Whether or not there was
a n employer-employee relationship between petitioner a nd pri va te
res pondent Ka sei Corporation; a nd i f in the a ffirma ti ve, (2) whether
peti ti oner wa s i l l ega l l y di s mi s s ed.

a nd Corporate Secretary, with substantially the sa me job functi ons ,

tha t i s, rendering accounting and ta x s ervi ces to the compa ny a nd
performi ng functi ons neces s a ry a nd des i ra bl e for the proper
opera tion of the corporation such as s ecuring busines s permi ts a nd
other l icenses over a n i ndefinite period of enga gement. Under the
broa der economic reality test, the petitioner ca n l ikewise be s a i d to
be a n employee of respondent corporation because s he ha d s erved
the compa ny for s i x yea rs before her di s mi s s a l , recei vi ng check
vouchers i ndicating her salaries /wa ges , benefi ts , 13th month pa y,
bonuses and allowances, a s well as deducti ons a nd Soci a l Securi ty
contri buti ons from Augus t 1, 1999 to December 18, 2000. When
peti tioner was designated General Ma nager, respondent corporation
ma de a report to the SSS signed by Irene Ba l l es teros . Peti ti oners
membership in the SSS as manifested by a copy of the SSS s peci men
s i gna ture ca rd whi ch wa s s i gned by the Pres i dent of Ka s ei
Corpora tion and the inclus i on of her na me i n the on -l i ne i nqui ry
s ys tem of the SSS evinces the existence of a n empl oyer-empl oyee
rel a tionship between petitioner a nd respondent corporati on. Ba s ed
on the foregoing, there ca n be no other conclusion that petiti oner i s
a n employee of respondent Kasei Corporation. She was selected a nd
enga ged by the compa ny for compens a ti on, a nd i s economi ca l l y
dependent upon respondent for her continued empl oyment i n tha t
l i ne of business. Her main job function i nvolved a ccounti ng a nd ta x
s ervi ces rendered to respondent corporation on a regular ba s i s over
a n i ndefinite period of engagement. Respondent corpora ti on hi red
a nd engaged petitioner for compensation, with the power to dismis s
her for ca use. More i mportantl y, res pondent corpora ti on ha d the
power to control petitioner wi th the means a nd methods by whi ch
the work i s to be a ccompl i s hed. The corpora ti on cons tructi vel y
di s missed petitioner when it reduced her s a l a ry by P2,500 a month
from Ja nua ry to September 2001. Thi s a mounts to a n i l l ega l
termi nation of employment, where the petitioner i s enti tl ed to ful l
ba ckwa ges .

RULING: The peti ti on wa s gra nted a nd the Court revers ed the

deci sion of the CA. It rul ed that petitioner was illegally dismissed a nd
the employee of the respondent corporation. Generally, courts ha ve
rel i ed on the s o-ca l l ed ri ght of control tes t where the pers on for
whom the servi ces a re performed reserves a ri ght to control not onl y
the end to be achieved but a lso the mea ns to be us ed i n rea chi ng
s uch end. However, i n certain cases the control test is not s uffi ci ent
to gi ve a complete picture of the relationship between the pa rti es ,
owi ng to the compl exi ty of s uch a rel a ti ons hi p where s evera l
pos itions have been held by the worker. The better a pproa ch woul d
therefore be to adopt a two-ti ered tes t i nvol vi ng: (1) the puta ti ve
empl oyers power to control the employee with respect to the means
a nd methods by which the work is to be a ccompl i s hed; a nd (2) the
underlying economic realities of the a ctivity or relationship. This twoti ered test would provide us wi th a fra mework of a na l ys i s , whi ch
woul d ta ke i nto cons i dera ti on the tota l i ty of ci rcums ta nces
s urrounding the true nature of the relationship between the pa rti es .
Thi s is especially appropriate in this case where there i s no wri tten
a greement or terms of reference to base the relationship on; and due
to the complexity of the relationship based on the va rious pos i ti ons
a nd responsibilities given to the worker over the period of the latters
empl oyment. Thus, the determination of the rela ti ons hi p between
empl oyer a nd employee depends upon the ci rcums ta nces of the
whol e economic a ctivi ty, such as: (1) the extent to which the services
performed are a n integral part of the empl oyers bus i nes s ; (2) the
extent of the workers i nvestment i n equipment a nd facilities ; (3) the
na ture a nd degree of control exerci s ed by the empl oyer; (4) the
workers opportunity for profit a nd l oss; (5) the amount of i ni ti a ti ve,
s ki ll, judgment or foresight required for the s ucces s of the cl a i med
i ndependent enterpri s e; (6) the perma nency a nd dura ti on of the
rel a tions hi p between the worker a nd the empl oyer; a nd (7) the
degree of dependency of the worker upon the empl oyer for hi s
conti nued empl oyment i n tha t l i ne of bus i nes s . By a ppl yi ng the
control test, there is no doubt that petitioner is a n employee of Kasei
Corpora ti on beca us e s he wa s under the di rect control a nd
s upervision of Seiji Ka mura, the corporations Techni ca l Cons ul ta nt.
She reported for work regularly a nd served i n va rio us ca pa ci ti es a s
Accounta nt, Liaison Officer, Technica l Cons ul ta nt, Acti ng Ma na ger

CASE DIGEST 14 APEX MINING VS NLRC, G.R. No. 94951 Apri l 22, 1991
FACTS OF THE CASE: Pri va te res pondent Si ncl i ta Ca ndi da wa s
empl oyed by petitioner Apex Mi ning Company, Inc. on Ma y 18, 1973
to perform l aundry s ervi ces a t i ts s ta ff hous e l oca ted a t Ma s a ra ,
Ma co, Da vao del Norte. In the beginning, s he was paid on a piece rate
ba s is. However, on Ja nuary 17, 1982, s he was paid on a monthly basis
a t P250.00 a month whi ch wa s ul ti ma tel y i ncrea s ed to P575.00 a
month. On December 18, 1987, whi l e s he wa s a ttendi ng to her
a s signed task and she wa s ha ngi ng her l a undry, s he a cci denta l l y
s l ipped a nd hit her back on a s tone. She reported the accident to her
i mmediate supervisor Mi la de la Rosa and to the pers onnel offi cer,
Fl orendo D. Asirit. As a resul t of the a cci dent s he wa s not a bl e to
conti nue wi th her work. She wa s permi tted to go on l ea ve for
medi cation. De la Rosa offered her the a mount of P 2,000.00 whi ch
wa s eventually i ncreased to P5,000.00 to pers ua de her to qui t her
job, but s he refus ed the offer a nd preferred to return to work.
Peti ti oner did not allow her to return to work a nd dis mi s s ed her on
Februa ry 4, 1988. Hence, pri va te res pond ent fi l ed a reques t for
a s si s ta nce wi th the Depa rtment of La bor a nd Empl oyment. The
peti ti oner wa s ordered to pa y a tota l of P55,000.00. Peti ti oner
a ppea l ed to the publ i c res pondent Na ti ona l La bor Rel a ti ons
Commi ssion (NLRC), which dismiss ed the a ppea l for l a ck of meri t.
ISSUE: Whether or not private respondent s houl d be trea ted a s a
mere househelper or domestic s ervant a nd not as a regular employee
of peti ti oner. (Res pondent i s a n empl oyee of peti ti oner)
RULING: The petition is devoid of merit a nd the Court a ffi rmed the
deci sion of the NLRC. The Court ruled that there i s enough evi dence
to s how that because of a n a ccident which took pla ce whi l e pri va te
res pondent was performing her laundry s ervi ces, s he was not a ble to
work a nd wa s ul ti ma tel y s epa ra ted from the s ervi ce. She i s ,
therefore, entitled to a ppropria te rel i ef a s a regul a r empl oyee of
peti ti oner. Ina s much a s pri va te res pondent a ppea rs not to be
i nterested i n returning to her work for valid reasons, the pa yment of
s eparation pay to her i s in order. Under Rule XIII, Section l (b), Book 3
of the La bor Code, a s a mended, the terms "hous ehel per" or
"domestic s ervant" a re defined as follows: The term "househelper" as

us ed herein is synonymous to the term "domestic servant" and s ha l l

refer to a ny person, whether male or female, who renders services i n
a nd a bout the empl oyer's home a nd whi ch s ervi ces a re us ua l l y
necessary or desirable for the maintenance a nd enjoyment thereof,
a nd ministers exclusively to the personal comfort a nd enjoyment of
the employer's family. The foregoing definition clearly contempl a tes
s uch hous ehel per or domes ti c s erva nt who i s empl oyed i n the
empl oyer's home to minister exclusively to the personal comfort a nd
enjoyment of the employer's famil y. Such defi ni ti on covers fa mi l y
dri vers , domes ti c s erva nts , l a undry women, ya ya s , ga rdeners ,
hous eboys a nd other similar househelps. The defi ni ti on ca nnot be
i nterpreted to i ncl ude hous ehel p or l a undrywomen worki ng i n
s ta ffhouses of a company, l ike petitioner who attends to the needs of
the company's guest and other persons a vailing of said fa ci l i ti es . By
the s ame token, it ca nnot be cons i dered to extend to then dri ver,
hous eboy, or ga rdener excl us i vel y worki ng i n the compa ny, the
s ta ffhouses a nd i ts premises. They ma y not be considered a s wi thi n
the meaning of a "househel per" or "domes ti c s erva nt" a s a bove defi ned by l aw. While it may be true that the nature of the work of a
hous ehelper, domestic servant or laundrywoma n i n a home or i n a
compa ny s taffhouse may be s imilar i n nature, the difference i n thei r
ci rcums tances is that i n the former instance they are actually s ervi ng
the fa mily while i n the latter ca se, whether i t i s a corpora ti on or a
s i ngle proprietorship engaged in bus i nes s or i ndus try or a ny other
a gri cul tura l or s i mi l a r purs ui t, s ervi ce i s bei ng rendered i n the
s ta ffhouses or within the premises of the business of the employer. In
s uch i nstance, they a re employees of the company or employer i n the
bus iness concerned entitled to the privileges of a regula r empl oyee.

CASE DIGEST 15 PENARADA VS BAGANGA PLYWOOD, G.R. No.

159577 Ma y 3, 2006 FACTS OF THE CASE: Peti ti oner Cha rl i to
Pea ra nda wa s hi red a s a n empl oyee of Ba ga nga Pl ywood
Corpora tion (BPC) to ta ke charge of the operations and maintena nce
of i ts s team plant boiler. In Ma y 2001, Pearanda fi l ed a Compl a i nt
for i l legal dismissal with money cl aims a ga i ns t BPC a nd i ts genera l
ma nager, Hudson Chua , before the NLRC. Compl a i na nt Pena ra da
a l leges that he was employed by res pondent Ba ga nga on Ma rch 15,
1999 wi th a monthl y s a l a ry of P5,000.00 a s Forema n/Boi l er
Hea d/Shift Engineer until he was illegally termi na ted on December
19, 2000. Further, he a l l eges tha t hi s s ervi ces were termi na ted
wi thout the benefit of due process a nd va lid grounds i n a ccorda nce
wi th l aw. Furthermore, he was not paid his overti me pa y, premi um
pa y for working during holidays/rest days, night shift differentials and
fi nally cl aims for payment of da ma ges a nd a ttorneys fees ha vi ng
been forced to litigate the pres ent compl a i nt. On the other ha nd,
res pondent BPC i s a domestic corporation duly organized and existing
under Philippi ne l a ws a nd i s repres ented herei n by i ts Genera l
Ma na ger HUDSON CHUA, the indivi dual res pondent. Res pondents
a l lege that complainants separation from s ervice was done pursuant
to Art. 283 of the La bor Code. The respondent BPC wa s on temporary
cl os ure due to repair a nd genera l ma i ntena nce a nd i t a ppl i ed for
cl ea rance with the Department of La bor a nd Empl oyment, to s hut
down a nd to di s mi s s empl oyees (pa r. 2 pos i ti on pa per).
Cons equently, when respondent BPC partially reopened, Pea ra nda
fa i led to reapply. Hence, he was not termi na ted from empl oyment
much l ess illegally. He opted to s evere employment when he i nsisted
pa yment of his separation benefits. Furthermore, being a managerial
empl oyee he i s not entitled to overtime pay and if ever he rendered
s ervi ces beyond the norma l hours of work, [there] wa s no offi ce
order/or a uthorization for him to do s o. The labor arbi ter rul ed tha t
there was no illegal dismissal a nd tha t peti ti oners Compl a i nt wa s
prema ture because he was s ti l l empl oyed by BPC. On a ppea l , the
NLRC del eted the a wa rd of overti me pa y a nd premi um pa y for
worki ng on res t da ys . CA di s mi s s ed Pea ra nda s Peti ti on for
Certi ora ri .
ISSUE: Whether or not Pearanda i s a regul a r, common empl oyee
enti tled to monetary benefi ts under Art. 82 of the La bor Code. NO

RULING: The petition was not granted. The Court finds no justification
to a wa rd overtime pay a nd premium pay for rest days to peti ti oner.
The Court rul ed that petiti oner wa s a member of the ma na geri a l
s ta ff. His duties a nd responsibilities conform to the defi ni ti on of a
member of a managerial staff under the Implementing Rules . Arti cl e
82 of the La bor Code exempts ma na geri a l empl oyees from the
covera ge of labor s tandards. Labor s ta nda rds provi de the worki ng
condi tions of employees, i ncluding entitlement to overti me pa y a nd
premi um pa y for worki ng on res t da ys . Under thi s provi s i on,
ma nagerial employees a re "those whose primary duty consists of the
ma nagement of the establishment i n which they a re employed or of a
department or s ubdivision. The Impl ementi ng Rul es of the La bor
Code s tate tha t ma na geri a l empl oyees a re thos e who meet the
fol l owing conditions: CODE: CAP C - Cus tomarily a nd regul a rl y di rect
the work of two or more employees therein; A - Authori ty to hi re or
fi re other empl oyees of l ower ra nk; or thei r s ugges ti ons a nd
recommendations as to the hiring a nd firing a nd as to the promoti on
or a ny other change of status of other employees are given particular
wei ght." P - Pri ma ry duty cons i s ts of the ma na gement of the
es tablishment i n whi ch they a re empl oyed or of a depa rtment or
s ubdivision thereof; The Court disagrees with the NLRCs finding tha t
peti tioner was a managerial employee. However, peti ti oner wa s a
member of the managerial s ta ff, whi ch a l s o ta kes hi m out of the
covera ge of labor s tandards. Like managerial employees, officers and
members of the managerial s taff are not entitled to the provisions of
l a w on l abor s tandards. The Implementing Rul es of the La bor Code
defi ne members of a managerial s ta ff a s thos e wi th the fol l owi ng
duti es a nd responsibilities: CODE: PCRD P - Pri ma ry duty cons i s ts of
the performance of work directly related to management poli ci es of
the employer; C - Cus tomarily a nd regularly exercise di s creti on a nd
i ndependent judgment; R - Regularly a nd directly a ssis t a propri etor
or a ma na geri a l empl oyee whos e pri ma ry duty cons i s ts of the
ma na gement of the es ta bl i s hment i n whi ch he i s empl oyed or
s ubdivision thereof; or (ii) execute under genera l s upervi s i on work
a l ong s peci a l i zed or techni ca l l i nes requi ri ng s peci a l tra i ni ng,
experience, or knowledge; or (iii) execute under general supervi s i on
s pecial assignments a nd tasks; a nd D - Do not devote more tha n 20
percent of their hours worked in a workweek to a ctivi ties whi ch a re
not di rectl y a nd cl os el y rel a ted to the performa nce of the work
des cribed in paragraphs (1), (2), a nd (3) a bove. Petitioner supervi s ed
the engineering section of the s team plant boiler. His work i nvol ved
overs eeing the operation of the machines a nd the performa nce of
the workers i n the engi neeri ng s ecti on. Thi s work neces s a ri l y
requi red the use of discretion and independent judgment to ens ure
the proper functi oni ng of the s tea m pl a nt boi l er. As s upervi s or,
peti tioner i s deemed a member of the manageri a l s ta ff. H i s duti es
a nd responsibi l i ti es conform to the defi ni ti on of a member of a
ma na geri a l s ta ff under the Impl ementi ng Rul es .

CASE DIGEST 16: LEGEND HOTEL VS REALUYO, G.R. No. 153511, Jul y
18, 2012 FACTS OF THE CASE: Thi s labor ca s e for i l l ega l di s mi s s a l
i nvol ves a pianist employed to perform in the resta ura nt of a hotel .
Res pondent Realuyo, whos e s ta ge na me wa s Joey R. Roa , fi l ed a
compl ai nt for a l l eged unfa i r l a bor pra cti ce, cons tructi ve i l l ega l
di s missal, and the underpayment/nonpayment of hi s premi um pa y
for hol i da ys , s epa ra ti on pa y, s ervi ce i ncenti ve l ea ve pa y, a nd
13thmonth pay. He prayed for a ttorneys fees , mora l da ma ges of
P100,000.00 a nd exemplary da ma ges for P100,000.00 Res pondent
Roa a verred that he had worked as a pia ni s t a t the Legend Hotel s
Ta nglaw Resta ura nt from September 1992 wi th a n i ni ti a l ra te of
P400.00/ni ght; a nd that i t had increased to P750.00/night. During his
empl oyment, he could not choose the ti me of performa nce, whi ch
ha d been fi xed from 7:00PM to 10:00pm for three to s i x ti mes a
week. On July 9, 1999, the ma nagement had noti fi ed hi m tha t a s a
cos t-cutting measure, his services as a pi a ni s t woul d no l onger be
requi red effective July 30, 1999. In i ts defense, petitioner denied the
exi s tence of an employer-employee relationship with Roa , i ns i s ti ng
tha t he had been onl y a ta l ent enga ged to provi de l i ve mus i c a t
Legend Hotels Ma dison Coffee Shop for three hours/day on two days
ea ch week; a nd s ta ted tha t the economi c cri s i s tha t ha d hi t the
country cons trained management to dispense with his s ervi ces . The

La bor Arbi ter dismissed the complaint for lack of merit upon fi ndi ng
tha t the parties had no employer-employee rel a ti ons hi p, beca us e
Roa was receiving talent fee and not s alary which was rei nforced by
the fa ct that Roa received his talent fee ni ghtl y, unl i ke the regul a r
empl oyees of the hotel who are paid monthly. The NLRC affirmed the
La bor Arbi ters decision. The CA revers ed the deci s i on of the NLRC
a nd ruled that petitioner is considered a regular employee of pri va te
res pondents i n furtherance of the restaurant business a s petitioners
l i ne of work, he wa s s upervi s ed a nd control l ed by the hotel s
res ta ura nt ma na ger who a t certa i n ti mes woul d requi re hi m to
perform only ta galong songs or musi c, or wea r ba rong ta ga l ong to
conform wi th the Filipinana motif of the pl a ce a nd the ti me of hi s
performa nce i s fi xed. It hel d tha t the di s mi s s a l wa s due to
retrenchment in order to a void or minimize business losses, whi ch i s
recogni zed by l a w under Art. 283 of the La bor Code.
ISSUE: Whether or not respondent was a n empl oyee of peti ti oner,
a nd i f i n the a ffirmative, whether or not he was va l i dl y termi na ted.
YES
RULING: The petition was not gra nted a nd the court a ffi rmed the
deci sion of the CA tha t private respondent i s the empl oyee of the
peti tioner. The Court ruled that respondent Realuyo was undeni a bl y
empl oyed as a pianist of the restaurant. The hotel wielded the power
of s election at the ti me i t entered i nto the s ervi ce contra ct da ted
Sept. 1, 1992 wi th Roa. The power of selection was fi rmly evi dence d
by, a mong others , the expres s wri tten recommenda ti on da ted
Ja nua ry 12, 1998 by Chri s ti ne Vel a s co, peti ti oners res ta ura nt
ma nager, for the i ncrease of his remuneration. Peti ti oner coul d not
s eek refuge behind the s ervice contract entered i nto wi th Roa . I t i s
the l a w that defines a nd governs an employment relationship, whose
terms a re not restricted to thos e fi xed i n the wri tten contra ct, for
other fa ctors, like the nature of the work the empl oyee ha s been
ca l led upon to perform, are also considered. The argument tha t Roa
wa s receiving ta l ent fee a nd not s a l a ry i s ba s el es s . There i s no
denyi ng that the remuneration denominated as ta lent fees was fi xed
on the basis of his talent, s kill, a nd the qua l i ty of mus i c he pl a yed
duri ng the hours of his performance. Res pondents remunera ti on,
a l beit denominated as talent fees, was s ti l l cons i dered i n the tem
WAGE i n the sense a nd context of the Labor Code, regardless of how
peti tioner chose to designate the remunera ti on a s provi ded under
Arti cl e 97 of the La bor Code. The power of the empl oyer to control
the work of the empl oyee i s cons i dered the mos t s i gni fi ca nt
determinant of the existence of a n employer-employee relations hi p.
Thi s is the so-called control tes t, a nd i s premi s ed on whether the
pers on for whom the s ervices a re performed res erves the ri ght to
control both the end achieved a nd the manner a nd mea ns us ed to
a chi eve that end. A revi ew of the records s hows tha t res pondent
performed his work as a pianist under petitioners s upervi s i on a nd
control . It is worth remembering that the employer need not a ctuall y
s upervi s e the performa nce of duti es by the empl oyee, for i t i s
s uffi ced tha t the empl oyer ha s the ri ght to wi l d power. Ha vi ng
es tablished that res pondent wa s a n empl oyee whom peti ti oner
termi nated to prevent losses, the conclusion that his termination was
by rea s on of retrenchment due to a n a uthori zed ca us e under the
La bor Code i s inevi ta bl e. Retrenchment i s one of the a uthori zed
ca us es for the dismissal of employees recognized by the La bor Code.
It i s a management prerogative resorted to by employers to a voi d or
to mi nimize business losses under Arti cl e 283 of the La bor Code. In
termi nation cases, the burden of proving that the dismissal was for a
va l i d or a uthorized cause rests upon the employer. Here, peti ti o ner
di d not submit evidence of the l osses to i ts business opera ti ons a nd
the economic havoc i t would thereby i mminently s ustain. Thus, by i ts
fa i lure to present sufficient and convi nci ng evi dence to prove tha t
retrenchment wa s neces s a ry, res pondents termi na ti on due to
retrenchment is not a llowed. Since respondent's reinstatement to his
former job is no longer feasible, the court ruled that petitioner should
i ns tea d pa y to the res pondent hi s s epa ra ti on pa y.