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The
term middle
management can refer to more than one level in an
organization. Middle managers direct the activities of
other managers and sometimes also those of
operating employees. Middle managers' principal
responsibilities are to direct the activities that
implement their organizations' policies and to balance
the demands of their superiors with the capacities of
their subordinates. A plant manager in an electronics
firm is an example of a middle manager.
TOP MANAGERS Composed of a comparatively
small group of executives, top management is
responsible for the overall management of the
organization. It establishes operating policies and
guides the organization's interactions with its
environment. Typical titles of top managers are "chief
executive
officer," "president," and "senior
vicepresident." Actual titles vary from one organization to
another and are not always a reliable guide to
membership
in
the
highest
management
2
classification.
category,
managers, vis-a-vis employers,
employees.
are,
likewise,
30
this
Publishing
Court
Separate Opinions
DAVIDE, JR., J., concurring and dissenting;
I concur with the majority that the "route managers" of private
respondent
Pepsi-Cola
Products
Philippines,
Inc.
are managerial employees. However, I respectfully submit that
contrary to the majority's holding, Article 245 of the Labor Code
is unconstitutional, as it abridges Section 8, Article III of the
Constitution.
It is then indubitably clear from the foregoing that the intent of
the Constitutional Commission was to abrogate the law
prohibiting managerial employees from joining, assisting, or
forming unions or labor organizations. In this regard, there is
absolutely no need to decipher the intent of the framers of the
1987 Constitution vis-a-vis Article 245 (originally 246) of the
Labor Code, there being no ambiguity or vagueness in the
wording of the present Section 8, Article III of the 1987
Constitution. The provision is clear and written in simple
language; neither were there any confusing debates thereon.
More importantly, the purpose of Commissioner Lerum's
amendments was unequivocal: he did not merely intend an
implied repeal, but an express repeal of the offending article of
the Labor Code. The approval of the amendments left no doubt
whatsoever, as faithfully disclosed in the Records of the
Constitutional Commission, that all employees meaning rankand-file, supervisory and managerial whether from the
public or the private sectors, have the right to form unions for
purposes not contrary to law.
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(b)
(c)
10
11
12
13
14
HELD: It is axiomatic that the existence of an employeremployee relationship cannot be negated by expressly
repudiating it in the management contract and providing
therein that the employee is an independent contractor when
the terms of agreement clearly show otherwise.
In determining the status of the management contract, the fourfold test on employment earlier mentioned has to be applied.
so-called four-fold test, i.e., (a) selection and engagement of
employee, (b) payment of wages, (c) power of dismissal, and,
(d) power of control, De los Reyes was not an employee but an
independent contractor.
First test, a look at the provisions of the contract shows that
private respondent was appointed as Acting Unit Manager only
upon recommendation of the District Manager. This indicates
that private respondent was hired by petitioner because of the
favorable endorsement of its duly authorized officer. The very
designation of the appointment of private respondent as acting
unit manager obviously implies a temporary employment status
which may be made permanent only upon compliance with
company standards such as those enumerated under Sec. 6 of
the management contract.[9]
On the second test, The managers contract unquestionably
demonstrate that the performance requirement imposed on De
los Reyes was applicable quarterly while his entitlement to the
free portion (P300) and the validated portion (P1,200) was
monthlystarting on the first month of the twelve (12) months of
the appointment.It is worth considering that the payment of
compensation by way of commission does not militate against
the conclusion that private respondent was an employee of
petitioner. Under Art. 97 of the Labor Code, wage shall mean
however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, price or
commission basis.
On the third and fourth 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, petitioner asserts that
its termination of De los Reyes was but an exercise of its
inherent right as principal under the contracts and that the
rules and guIdelines it set forth in the contract cannot, by any
stretch of imagination, be deemed as an exercise of control
over the private respondent as these were merely directives
that fixed the desired result without dictating the means or
method to be employed in attaining it. The following factual
findings of the NLRC however contradict such claims.
A perusal of the appointment of complainant as Acting Unit
Manager reveals that: 1. Complainant was to exclusively serve
respondent company.; 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.
Facts:
Petitioner Almirez was hired as a Refinery Senior Process
Design Engineer for a specific project by respondent Infinite
Loop through its General Manager Rabino who, by letter to
petitioner, furnished the details of her employment which
included the Scope of Professional Services. Subsequently,
petitioner, through counsel, wrote Rabino demanding that
respondent compensate her the total amount of her contract.
Rabino wrote petitioner that the project proponent, Arrox
Resources Corp., have encountered re-organization & have
not yet paid Infinite Loop for the project. Petitioner filed a
complaint against Infinite Loop & Rabino before the NLRC for
breach of contract of employment. Infinite Loop moved to
dismiss the complaint on the ground that the NLRC has no
jurisdiction over the parties & the subject matter as there was
no ErEe relationship between them since the contract they
entered into was one of services & not of employment. The
Labor Arbiter held that there was an ErEe relationship between
the parties based on paragraph 6 of the Scope of Professional
Services which showed that the companys management team
exercises control over the means & methods in the
performance of petitioners duties. The NLRC, finding that an
ErEe relation between the parties existed, dismissed
respondents appeal. The CA finding that petitioner was hired
to render professional services for a specific project & her
cause of action is for a sum of money on account of Infinite
Loops alleged breach of contractual obligation to pay her
agreed professional fee, held that no ErEr relationship existed
between the parties, hence, the NLRC & the Labor Arbiter
have no jurisdiction over the complaint.
Issue:
Whether an ErEe relation existed between the parties
Held:
No. To ascertain the existence of an ErEe relationship,
jurisprudence has invariably applied the 4-fold test, to wit: (1)
the manner of selection & engagement; (2) the payment of
wages; (3) the presence of absence of the power of dismissal;
& (4) the presence of absence of the power of control. Of
these 4, the last one, the so called control test is commonly
regarded as the most crucial & determinative indicator of the
presence of absence of an ErEe relationship.
Under the control test, an ErEe relationship exists where the
person for whom the services are performed reserves the right
to control not only the end achieved, but also the manner &
means to be used in reaching that end.
From the scope of petitioners professional services, there is
no showing of a power of control over petitioner. The services
to be performed by her specified what she needed to achieve
but not on how she was to go about it.
Contrary to the finding of the Labor Arbiter, as affirmed by the
NLRC, above-quoted paragraph No. 6 of the "Scope of
[petitioners] Professional Services" requiring her to "[m]ake
reports and recommendations to the company management
team regarding work progress, revisions and improvement of
process design on a regular basis as required by company
15
FACTS:
Lessor Noguera enter into a contract of lease with Tourist
World Services (TWS) for the establishment of a main branch.
Sevilla was made solidarily liable for the prompt payment of
monthly rents. However,Sevilla was found connected with the
firms rival company and since the branch office was anyhow
losing, the Tourist World Service considered closing down its
office. TWS terminated the lease contract with Noguera. The
corporate secretary, went over to the branch office finding the
premises locked, and, being unable to contact Lina Sevilla, he
padlocked the premises on June 4, 1962 to protect the
interests of the Tourist World Service. When neither the
appellant Lina Sevilla nor any of her employees could enter the
locked premises, a complaint wall filed by the herein appellants
against the appellees with a prayer for the issuance of
mandatory preliminary injunction.
Lina Sevilla claims that a joint bussiness venture was entered
into by and between her and appellee TWS with offices at the
Ermita branch office and that she was not an employee of the
TWS to the end that her relationship with TWS was one of a
joint business venture. On one hand, TWS contend that the
appellant was an employee of the appellee Tourist World
Service, Inc. and as such was designated manager. The trial
court held that TWS is the true lessee and that SEvilla is only
its employee. Hence, appeal.
ISSUE:
Whether or not there is an employer-employee relationship
between TWS and Sevilla?
HELD:
YES. There has been no uniform test to determine the
evidence of an employer-employee relation. In general, we
have relied on the so-called right of control test, "where the
person for whom the services are performed reserves a right to
control not only the end to be achieved but also the means to
be used in reaching such end." However, we have considered,
in addition to the standard of right-of control, the existing
economic conditions prevailing between the parties, like the
inclusion of the employee in the payrolls, in determining the
existence of an employer-employee relationship. The records
will show that the petitioner, Lina Sevilla, was not subject to
control by the private respondent Tourist World Service, Inc.,
either as to the result of the enterprise or as to the means
used. She even made herself solidarily liable in paying rentals
that an ordinary employee will not do.
The relationship here was a principal-agent but this does not
mean that TWS may revoke this anytime. it is one coupled with
an interest, the agency having been created for mutual
interest, of the agent and the principal. We rule therefore, that
for its unwarranted revocation of the contract of agency, the
private respondent, Tourist World Service, Inc., should be
sentenced to pay moral damages for breach of contract under
Articles 21 & 2219 of the Civil Code. (NICOLE)
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17
FACTS:
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19
FACTS:
Petitioners were engaged by the Metropolitan Waterworks and
Sewerage System (MWSS) as collectors-contractors, wherein
the former agreed to collect from the concessionaires of
MWSS, charges, fees, assessments of rents for water, sewer
and/or plumbing services which the MWSS bills from time to
time.
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LAZARO V. SSS
FACTS: Private respondent Rosalina M. Laudato (Laudato)
filed a petition before the SSC for social security coverage and
remittance of unpaid monthly social security contributions
against her three (3) employers. Among the respondents was
herein petitioner Angelito L. Lazaro (Lazaro), proprietor of
Royal Star Marketing (Royal Star), which is engaged in the
business of selling home appliances. Laudato alleged that
despite her employment as sales supervisor of the sales
agents for Royal Star from April of 1979 to March of 1986,
Lazaro had failed during the said period, to report her to the
SSC for compulsory coverage or remit Laudatos social
security contributions.
Lazaro denied that Laudato was a sales supervisor of
Royal Star, averring instead that she was a mere sales agent
whom he paid purely on commission basis. Lazaro
also maintained that Laudato was not subjected to definite
hours and conditions of work. As such, Laudato could not be
deemed an employee of Royal Star.
After the parties submitted their respective position papers, the
SSC promulgated a Resolutionruling in favor of
Laudato. Applying the control test, it held that Laudato was
an employee of Royal Star, and ordered Royal Star to pay the
unremitted social security contributions of Laudato.
ISSUE: It is argued that Royal Star had no control over
Laudatos activities, and that under the so-called control test,
Laudato could not be deemed an employee.
HELD: It is an accepted doctrine that for the purposes of
coverage under the Social Security Act, the determination of
employer-employee relationship warrants the application of the
control test, that is, whether the employer controls or 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
[14]
by which the same is accomplished.
The SSC, as sustained
by the Court of Appeals, applying the control test found that
Laudato was an employee of Royal Star. We find no reversible
error.
Lazaros arguments are nothing more but a mere
reiteration of arguments unsuccessfully posed before two
bodies: the SSC and the Court of Appeals. They likewise put
to issue factual questions already passed upon twice below,
rather than questions of law appropriate for review under a
Rule 45 petition. The determination of an employer-employee
relationship depends heavily on the particular factual
circumstances attending the professional interaction of the
[15]
parties. The Court is not a trier of facts and accords great
weight to the factual findings of lower courts or agencies
[16]
whose function is to resolve factual matters.
Lazaros arguments may be dispensed with by
applying precedents. Suffice it to say, the fact that Laudato
was paid by way of commission does not preclude the
establishment
of
an
employer-employee
[17]
relationship. In Grepalife v. Judico, the Court upheld the
existence of an employer-employee relationship between the
insurance company and its agents, despite the fact that the
compensation that the agents on commission received was not
paid by the company but by the investor or the person
21
insured.
The relevant factor remains, as stated earlier,
whether the "employer" controls or has reserved the right to
control the "employee" not only as to the result of the work to
be done but also as to the means and methods by which the
[19]
same is to be accomplished.
Neither does it follow that a person who does not observe
normal
hours
of
work
cannot
be
deemed
an
employee. In Cosmopolitan
Funeral
Homes,
Inc.
v.
[20]
Maalat, the employer similarly denied the existence of an
employer-employee relationship, as the claimant according to
it, was a supervisor on commission basis who did not
observe normal hours of work. This Court declared that there
was an employer-employee relationship, noting that [the]
supervisor, although compensated on commission basis, [is]
exempt from the observance of normal hours of work for his
compensation is measured by the number of sales he
[21]
makes.
It should also be emphasized that the SSC, also as
upheld by the Court of Appeals, found that Laudato was a
[22]
sales supervisor and not a mere agent.
As such, Laudato
oversaw and supervised the sales agents of the company, and
thus was subject to the control of management as to how she
implements its policies and its end results. We are disinclined
to reverse this finding, in the absence of countervailing
evidence from Lazaro and also in light of the fact that
Laudatos calling cards from Royal Star indicate that she is
indeed a sales supervisor. (FAITH)
EDDIE DOMASIG,Petitioner,
RELATIONS COMMISSION.
vs.
NATIONAL
LABOR
FACTS:
Complainant alleged that he started working with the
respondent on July 6, 1986 as Salesman when the company
was still named Cato Garments Corporation; that three (3)
years ago, because of a complaint against respondent by its
workers, it changed its name to Cata Garments Corporation;
and that on August 29, 1992, he was dismissed when
respondent learned that he was being pirated by a rival
corporation which offer he refused. Prior to his dismissal,
complainant alleged that he was receiving a salary of
P1,500.00 a month plus commission. On September 3, 1992
he filed the instant complaint.
Respondent denied complainants claim that he is a regular
employee contending that he is a mere commission agent who
receives a commission. The Labor Arbiter held that
complainant was illegally dismissed and entitled to
reinstatement and backwages as well as underpayment of
salary; 13th month pay; service incentive leave and legal
holiday. On Appeal, the NLRC found that decision of the Labor
Arbiter not supported by evidence on record.
ISSUE: Whether or not there exists an employer-employee
relationship between private respondents and petitioner.
HELD: It has long been established that in administrative and
quasi-judicial proceedings, substantial evidence is sufficient as
a basis for judgment on the existence of employer-employee
relationship. No particular form of evidence is required to prove
the existence of such employer-employee relationship. Any
competent and relevant evidence to prove the relationship may
be admitted.
In a business establishment, an identification card is usually
provided not only as a security measure but mainly to identify
the holder thereof as a bona fide employee of the firm that
issues it. Together with the cash vouchers covering petitioners
salaries for the months stated therein, we agree with the labor
arbiter that these matters constitute substantial evidence
adequate to support a conclusion that petitioner was indeed an
employee of private respondent.
Having been in the employ of private respondents continuously
for more than one year, under the law, petitioner is considered
a regular employee. Proof beyond reasonable doubt is not
required as a basis for judgment on the legality of an
employers dismissal of an employee, nor even preponderance
of evidence for that matter, substantial evidence being
sufficient. Petitioners contention that private respondents
terminated his employment due to their suspicion that he was
being enticed by another firm to work for it was not refuted by
private respondents. The labor arbiters conclusion that
petitioners dismissal is therefore illegal, is not necessarily
arbitrary or erroneous. It is entitled to great weight and respect.
(KICIANG)
22
23
(This case is quiet long and entails various topics that might be
helpful in understanding various labor concepts. I suggest that
this case be read in full text, most especially the discussion on
SC's ruling.)
MANILA ELECTRIC COMPANY, petitioner, vs. THE
HONORABLE SECRETARY OF LABOR LEONARDO
QUISUMBING AND MERALCO EMPLOYEES AND
WORKERS ASSOCIATION (MEWA), respondents.
MARTINEZ, J.:
Facts:
MEWA is the duly recognized labor organization of the rankand-file employees of MERALCO.
On September 7, 1995, MEWA informed MERALCO of its
intention to re-negotiate the terms and conditions of their
existing 1992-1997 Collective Bargaining Agreement (CBA)
covering the remaining period of two years starting from
December 1, 1995 to November 30, 1997. MERALCO signified
its willingness to re-negotiate through its letter dated October
17, 1995[2] and formed a CBA negotiating panel for the
purpose. Thereafter, collective bargaining negotiations
proceeded. However, despite the series of meetings between
the negotiating panels of MERALCO and MEWA, the parties
failed to arrive at terms and conditions acceptable to both of
them.
On April 23, 1996, MEWA filed a Notice of Strike with the
National Capital Region Branch of the National Conciliation
and Mediation Board (NCMB) of the Department of Labor and
Employment (DOLE) on the grounds of bargaining deadlock
and unfair labor practices. Faced with the imminence of a
strike, MERALCO on May 2, 1996, filed an Urgent Petition with
the Department of Labor and Employment praying that the
Secretary assume jurisdiction over the labor dispute and to
enjoin the striking employees to go back to work.
The Labor Secretary granted the petition and assumed
jurisdiction over the labor case.
Dissatisfied with the decision, petitioner filed this petition
contending that the Secretary of Labor gravely abused his
discretion:
1). . . in awarding wage increases of P2,200.00 for 1996 and
P2,200.00 for 1997;
2) . . . in awarding the following economic benefits:
a.
Two months Christmas bonus;
b.
Rice Subsidy and retirement benefits for retirees;
c.
Loan for the employees cooperative;
d.
Social benefits such as GHSIP and HMP for
dependents, employees cooperative and housing equity
assistance loan;
e.
Signing bonus;
f.
Integration of the Red Circle Rate Allowance
g.
Sick leave reserve of 15 days
h.
The 40-day union leave;
i.
High pole/high voltage and towing allowance;
and
j.
Benefits for collectors
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Facts:
Petitioner, a corporation engaged in the construction business,
entered into a construction contract w/ Prince David Devt
Corp. It engaged the services of Nilo Layno Builders to do the
specialized concrete works. Pursuant to the contract Nilo
Layno Builders hired private respondents to perform work at
the project. After completion of the phase for which NLB was
contracted, private respondents filed a complaint against
petitioner & its president for unfair labor practice, nonpayment
th
of 13 month pay, illegal dismissal, & severance pay in lieu of
reinstatement. The Labor Arbiter found that NLB was a laboronly contractor; thus, private respondents were deemed
employees of the petitioner. It ordered petitioner to provide
work for private respondents or pay separation pay. The
monetary claims of private respondents were dismissed for
lack of merit. Both parties appealed to the NLRC w/c held that
private respondents were illegally dismissed & ordered
petitioner to reinstate them & to pay their full backwages. The
petition for certiorari filed by petitioner was denied by the CA.
Issue:
1) Whether Nilo Layno Builders was an independent
contractor or a labor-only contractor
2) Whether an ErEe relationship existed between petitioner &
private respondents
Held:
1) Independent contractor. Under Section 8, Rule VIII, Book
III, of the Omnibus Rules Implementing the Labor Code,
an independent contractor is one who undertakes job
contracting, i.e., a person who: (a) carries on an
independent business and undertakes the contract work
on his own account under his own responsibility according
to his own manner and method, free from the control and
direction of his employer or principal in all matters
connected with the performance of the work except as to
the results thereof; and (b) has substantial capital or
investment in the form of tools, equipments, machineries,
work premises, and other materials which are necessary
in the conduct of the business.
Juxtaposing this provision vis--vis the facts of this case,
Nilo Layno Builders is undertaking permissible labor or job
contracting. Nilo Layno Builders is a duly licensed labor
contractor carrying on an independent business for a
specialized work that involves the use of some particular,
unusual and peculiar skills and expertise, like concrete
works, form works and steel rebars works. As a licensed
labor contractor, it complied with the conditions set forth in
Section 5, Rule VII-A, Book III, Rules to Implement the
Labor Code, among others, proof of financial capability
and list of equipment, tools, machineries and implements
to be used in the business. Further, it entered into a
written contract with the petitioner, a requirement under
Section 3, Rule VII-A, Book III, Rules to Implement the
Labor Code to assure the employees of the minimum
labor standards and benefits provided by existing laws.
The test to determine the existence of independent
contractorship is whether one claiming to be an
independent contractor has contracted to do the work
2)
31
(NICOLE)
Facts:
Petitioner, as operator of the D'Rough Riders Transportation, is
engaged in the transportation of passengers from Cebu City to
the northern towns of Cebu. Private respondent worked in
petitioner's bus terminals as a "dispatcher," assisting and
guiding passengers and carrying their bags.
Petitioner denies that private respondent was his employee.
He alleges that he did not have the power of selection and
dismissal nor the power of control over private respondent.
According to petitioner, private respondent, together with socalled "standbys," hung around his bus terminals, assisting
passengers with their baggages as "dispatchers." Petitioner
alleges that he had no choice but to allow private respondent
and other "standbys" to carry on their activities within the
premises of his bus terminals.2 He also claims he allowed
them to do so even if their services as so-called "dispatchers"
were not needed in his business. Petitioner insists that as
"dispatcher," private respondent worked in his own way,
without supervision by him.
The Labor Arbiter and the NLRC found private respondent to
be an employee of petitioner.
Issue:
Won an employer-employee relationship existed between
petitioner and private respondent
Held:
We agree with the finding that an employer-employee
relationship existed between petitioner and private respondent,
such finding being supported by substantial evidence.
Petitioner has failed to refute the evidence presented by
private respondent. He points to his Chief Dispatcher, Regino
de la Cruz, as the one who exercised the powers of an
employer over the "dispatchers." Petitioner argues that under
an agreement with Regino de la Cruz, it is the latter who
selects and engages the "dispatchers," dictates their time,
supervises the performance of their work, and pays their
wages. He further argues that the "disciplinary memorandum"
issued by him was not addressed to private respondent but to
Regino de la Cruz, as employer of private respondent, to
remind him regarding the discipline of the "dispatchers."
Petitioner's contention is without merit. In determining whether
there is an employer-employee relationship between the
parties the following questions must be considered: (a) who
has the power of selection and engagement of the employee?
(b) who pays the wages of employee? (c) who has the power
of dismissal? and; (d) who has the power to control the
employee's conduct?4 Of these powers the power of control
over the employees' conduct is generally regarded as
determinative of the existence of the relationship.
Indeed the "control test" only requires the existence of the right
to control the manner of doing the work in a person, not
necessarily the actual exercise of the power by him, which he
can delegate. Consequently, in the case at bar, the power is
exercised by Regino de la Cruz but it is power which is only
delegated to him so that in truth the power inherently and
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