EMPLOYEE- EMPLOYER RELATIONSHIP

Parties and case

no.

What is the
business of the
company?

COCA COLA
BOTTLERS VS.
DR. DEAN
CLIMACO
514 SCRA 164

manufacturer,
and distributor
soft drink
beverages

What are the duties

of the complainant?

What are the

circumstances that
made her work in the
company?
Dr. Dean N. Climaco Dr. Dean N. Climaco
is a medical doctor. was hired by petitioner
Coca-Cola Bottlers
Phils., Inc. by virtue of
a Retainer Agreement

Is he the
Final disposition
employee
of the
company?
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, or the so-called control test, considered to be
the most important element.[18]
The Court agrees with the finding of the Labor Arbiter and the
NLRC that the circumstances of this case show that no employeremployee relationship exists between the parties. The Labor Arbiter
and the NLRC 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 [petitioner] company, in each case. He likened this
case to that of Neri v. National Labor Relations Commission,
[19]
which held:
Page | 1

In the case of petitioner Neri, it is admitted

that FEBTC issued a job description which detailed
her functions as a radio/telex operator. However, a
cursory reading of the job description shows that what
was sought to be controlled by FEBTC was actually
the end result of the task, e.g., that the daily incoming
and outgoing telegraphic transfer of funds received
and relayed by her, respectively, tallies with that of the
register. The guidelines were laid down merely to
ensure that the desired end result was achieved. It did
not, however, tell Neri how the radio/telex machine
should be operated.

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.
Page | 2

The Labor Arbiter also correctly found that the provision in

the Retainer Agreement that respondent was on call during
emergency cases did not make him a regular employee. He
explained, thus:
Likewise, the allegation of complainant that
since he is on call at anytime of the day and night
makes him a regular employee is offtangent. Complainant does not dispute the fact that
outside of the two (2) hours that he is required to be at
respondent companys premises, he is not at all further
required to just sit around in the premises and wait for
an emergency to occur so as to enable him from using
such hours for his own benefit and advantage. In fact,
complainant maintains his own private clinic attending
to his private practice in the city, where he services his
patients, bills them accordingly -- and if it is an
employee of respondent company who is attended to
by him for special treatment that needs hospitalization
or operation, this is subject to a special billing. More
often than not, an employee is required to stay in the
employers workplace or proximately close thereto
that he cannot utilize his time effectively and gainfully
for his own purpose. Such is not the prevailing
situation here.
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.
Page | 3

The Court also notes that the Retainership Agreement granted

to both parties the power to terminate their relationship upon giving a
30-day notice. Hence, petitioner company did not wield the sole
power of dismissal or termination.
The Court agrees with the Labor Arbiter and the NLRC 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 employeremployee relationship existed between the parties. The Agreement
also stated that it was only for a period of 1 year beginning January 1,
1988 toDecember 31, 1998, but it was renewed on a yearly basis.
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.
LOPEZ VS.
BODEGA
CITY 532
SCRA 56

Food Service
Corporation

Petitioner was the

"lady keeper" of
Bodega City tasked
with manning its
ladies' comfort room

Respondent offered to
the petitioner a
concessionaire/contract
to provide
independently,

No

To prove the element of payment of wages, petitioner presented a

petty cash voucher showing that she received an allowance for five
(5) days.18 The CA did not err when it held that a solitary petty cash
voucher did not prove that petitioner had been receiving salary from
respondents or that she had been respondents' employee for 10 years.
Page | 4

customer comfort
services to assist users
of the ladies comfort
room of the Club to
further enhance its
business

Indeed, if petitioner was really an employee of respondents for that

length of time, she should have been able to present salary vouchers
or pay slips and not just a single petty cash voucher. The Court agrees
with respondents that petitioner could have easily shown other pieces
of evidence such as a contract of employment, SSS or Medicare
forms, or certificates of withholding tax on compensation income; or
she could have presented witnesses to prove her contention that she
was an employee of respondents. Petitioner failed to do so.
Anent the element of control, petitioner's contention that she was an
employee of respondents because she was subject to their control
does not hold water.
Petitioner failed to cite a single instance to prove that she was subject
to the control of respondents insofar as the manner in which she
should perform her job as a "lady keeper" was concerned.
It is true that petitioner was required to follow rules and regulations
prescribing appropriate conduct while within the premises of Bodega
City. However, this was imposed upon petitioner as part of the terms
and conditions in the concessionaire agreement embodied in a 1992
letter of Yap addressed to petitioner
With respect to the petty cash voucher, petitioner failed to refute
respondent's claim that it was not given to her for services rendered
or on a regular basis, but simply granted as financial assistance to
help her temporarily meet her family's needs.
Hence, going back to the element of control, the concessionaire
agreement merely stated that petitioner shall maintain the cleanliness
of the ladies' comfort room and observe courtesy guidelines that
would help her obtain the results they wanted to achieve. There is
nothing in the agreement which specifies the methods by which
petitioner should achieve these results. Respondents did not indicate
Page | 5

the manner in which she should go about in maintaining the

cleanliness of the ladies' comfort room. Neither did respondents
determine the means and methods by which petitioner could ensure
the satisfaction of respondent company's customers. In other words,
petitioner was given a free hand as to how she would perform her job
as a "lady keeper." In fact, the last paragraph of the concessionaire
agreement even allowed petitioner to engage persons to work with or
assist her in the discharge of her functions.
Moreover, petitioner was not subjected to definite hours or conditions
of work. The fact that she was expected to maintain the cleanliness of
respondent company's ladies' comfort room during Bodega City's
operating hours does not indicate that her performance of her job was
subject to the control of respondents as to make her an employee of
the latter. Instead, the requirement that she had to render her services
while Bodega City was open for business was dictated simply by the
very nature of her undertaking, which was to give assistance to the
users of the ladies' comfort room.
In Consulta v. Court of Appeals,35 this Court held:
It should, however, be obvious that not every form of control
that the hiring party reserves to himself over the conduct of
the party hired in relation to the services rendered may be
accorded the effect of establishing an employer-employee
relationship between them in the legal or technical sense of
the term. A line must be drawn somewhere, if the recognized
distinction between an employee and an individual contractor
is not to vanish altogether. Realistically, it would be a rare
contract of service that gives untrammeled freedom to the
party hired and eschews any intervention whatsoever in his
performance of the engagement.
Page | 6

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.36
Lastly, the Court finds that the elements of selection and engagement
as well as the power of dismissal are not present in the instant case.
It has been established that there has been no employer-employee
relationship between respondents and petitioner. Their contractual
relationship was governed by the concessionaire agreement embodied
in the 1992 letter. Thus, petitioner was not dismissed by respondents.
Instead, as shown by the letter of Yap to her dated February 15,
1995,37 their contractual relationship was terminated by reason of
respondents' termination of the subject concessionaire agreement,
which was in accordance with the provisions of the agreement in case
of violation of its terms and conditions.
ESCASINAS
ET AL VS.
SHANGRILA
MACTAN
ISLAND
RESORT 580
SCRA 804

Hotel business

Registered nurses

No

The existence of an independent and permissible contractor

relationship is generally established by considering the following
determinants: whether the contractor is carrying on an independent
business; the nature and extent of the work; the skill required; the
term and duration of the relationship; the right to assign the
performance of a specified piece of work; the control and supervision
of the work to another; the employer's power with respect to the
Page | 7

hiring, firing and payment of the contractor's workers; the control of

the premises; the duty to supply the premises, tools, appliances,
materials and labor; and the mode, manner and terms of payment.[11]
On
the
other
hand,
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.[12]
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.
As to payment of wages, respondent doctor is the one who
underwrites the following: salaries, SSS contributions and other
benefits of the staff[13]; group life, group personal accident insurance
Page | 8

and life/death insurance[14] for the staff with minimum benefit payable
at 12 times the employees last drawn salary, as well as value added
taxes and withholding taxes, sourced from her P60,000.00 monthly
retainer fee and 70% share of the service charges from Shangri-las
guests who avail of the clinic services. It is unlikely that respondent
doctor would report petitioners as workers, pay their SSS premium as
well as their wages if they were not indeed her employees.
With respect to the supervision and control of the nurses and
clinic staff, it is not disputed that a document, Clinic Policies and
Employee Manual[16] claimed to have been prepared by respondent
doctor exists, to which petitioners gave their conformity[17] and in
which they acknowledged their co-terminus employment status. It is
thus presumed that said document, and not the employee manual
being followed by Shangri-las regular workers, governs how they
perform their respective tasks and responsibilities.
Contrary
to
petitioners contention,
the
various
office directives issued by Shangri-las officers do not imply that
it is Shangri-las management and not respondent doctor who
exercises control over them or that Shangri-la has control over how
the doctor and the nurses perform their work. The letter[18] addressed
to respondent doctor dated February 7, 2003 from a certain Tata L.
Reyes giving instructions regarding the replenishment of emergency
kits is, at most, administrative in nature, related as it is to safety
Page | 9

matters; while the letter[19] dated May 17, 2004 from Shangri-las
Assistant Financial Controller, Lotlot Dagat, forbidding the clinic
from receiving cash payments from the resorts guests is a matter of
financial policy in order to ensure proper sharing of the proceeds,
considering that Shangri-la and respondent doctor share in the guests
payments for medical services rendered. In fine, as Shangri-la does
not control how the work should be performed by petitioners, it is not
petitioners employer.
ABS- CBN VS.
MARILYN
NARAZENO
GR NO.
164156, SEPT.
26, 2006

Television
network

Production Assistants
They
were
made to perform the
following tasks and
duties:
a)
Prepare,
arrange airing of
commercial
broadcasting
based on the daily
operations log and
digicart
of
respondent ABSCBN;
b)
Coordinate,
arrange
personalities for air

Petitioner employed
Yes
respondents Nazareno,
Gerzon, Deiparine, and
Lerasan as production
assistants (PAs) on
different dates. They
were assigned at the
news and public affairs,
for various radio
programs in the Cebu
Broadcasting Station,
with a monthly
compensation
of P4,000.

We agree with petitioners contention that the perfection of an appeal

within the statutory or reglementary period is not only mandatory, but
also jurisdictional; failure to do so renders the assailed decision final
and executory and deprives the appellate court or body of the legal
authority to alter the final judgment, much less entertain the appeal.
However, this Court has time and again ruled that in exceptional
cases, a belated appeal may be given due course if greater injustice
may occur if an appeal is not given due course than if the
reglementary period to appeal were strictly followed.[19] The Court
resorted to this extraordinary measure even at the expense of
sacrificing order and efficiency if only to serve the greater principles
of substantial justice and equity.

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
Page | 10

interviews;
c)
Coordinate,
prepare schedule
of reporters for
scheduled news
reporting
and
lead-in
or
incoming reports;
d)
Facilitate,
prepare
and
arrange
airtime
schedule
for
public
service
announcement and
complaints;
e)
Assist,
anchor
program
interview, etc; and
f)
Record, log
clerical reports, man
based control radio

where the employee has been engaged to

perform activities which are usually necessary
or desirable in the usual business or trade of
the employer 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.

In Universal Robina Corporation v. Catapang,[31] the

Court reiterated the test in determining whether one is a
regular employee:

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 work
Page | 11

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.[32]

As elaborated by this Court in Magsalin v. National

Organization of Working Men:[33]

Even while the language of law might

have been more definitive, the clarity of its
spirit and intent, i.e., to ensure a regular
workers security of tenure, however, can
hardly be doubted. In determining whether an
employment should be considered regular or
non-regular, the applicable test is the
reasonable connection between the particular
activity performed by the employee in relation
to the usual business or trade of the
Page | 12

employer. The standard, supplied by the law

itself, is whether the work undertaken is
necessary or desirable in the usual business or
trade of the employer, a fact that can be
assessed by looking into the nature of the
services rendered and its relation to the
general scheme under which the business or
trade is pursued in the usual course. It is
distinguished from a specific undertaking that
is divorced from the normal activities required
in carrying on the particular business or
trade. But, although the work to be performed
is only for a specific project or seasonal, where
a person thus engaged has been performing
the job for at least one year, even if the
performance is not continuous or is merely
intermittent, the law deems the repeated and
continuing need for its performance as being
sufficient to indicate the necessity or
desirability of that activity to the business or
trade of the employer. The employment of
such person is also then deemed to be regular
with respect to such activity and while such
activity exists.[34]

Not

considered

regular

employees

are

project
Page | 13

employees, the completion or termination of which is more

or less determinable at the time of employment, such as
those employed in connection with a particular construction
project, and seasonal employees whose employment by
its nature is only desirable for a limited period of time. Even
then, any employee who has rendered at least one year of
service, whether continuous or intermittent, is deemed
regular with respect to the activity performed and while
such activity actually exists.

It is of no moment that petitioner hired respondents

as talents. The fact that respondents received pre-agreed
talent fees instead of salaries, that they did not observe
the required office hours, and that they were permitted to
join other productions during their free time are not
conclusive of the nature of their employment. Respondents
cannot be considered talents because they are not actors
or actresses or radio specialists or mere clerks or utility
employees. They are regular employees who perform
several different duties under the control and direction of
ABS-CBN executives and supervisors.

Thus, there are two kinds of regular employees under

the law:
(1) those engaged to perform activities which
Page | 14

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 activities in
which they are employed.[35]

The law overrides such conditions which are

prejudicial to the interest of the worker whose weak
bargaining situation necessitates the succor of the State.
What determines whether a certain employment is regular
or otherwise is not the will or word of the employer, to which
the worker oftentimes acquiesces, much less the procedure
of hiring the employee or the manner of paying the salary or
the actual time spent at work. It is the character of the
activities performed in relation to the particular
trade
or business taking into account all the
circumstances, and in some cases the length of time of its
performance and its continued existence.[36] It is obvious
that one year after they were employed by petitioner,
respondents became regular employees by operation of law.
[37]

Additionally, respondents cannot be considered as

project or program employees because no evidence was
presented to show that the duration and scope of the
project were determined or specified at the time of their
Page | 15

engagement. Under existing jurisprudence, project could

refer to two distinguishable types of activities. First, a
project may refer to a particular job or undertaking that is
within the regular or usual business of the employer, but
which is distinct and separate, and identifiable as such, from
the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable
times.Second, the term project may also refer to a particular
job or undertaking that is not within the regular business of
the employer. Such a job or undertaking must also be
identifiably separate and distinct from the ordinary or
regular business operations of the employer. The job or
undertaking also begins and ends at determined or
determinable times.[38]
In the case at bar, however, the employer-employee
relationship between petitioner and respondents has been
proven.

First. In
the
selection
and
engagement
of
respondents, no peculiar or unique skill, talent or celebrity
status was required from them because they were merely
hired through petitioners personnel department just like
any ordinary employee.

Second. The so-called talent fees of respondents

Page | 16

correspond to wages given as a result of an employeremployee relationship. Respondents did not have the power
to bargain for huge talent fees, a circumstance negating
independent contractual relationship.

Third. Petitioner could always discharge respondents

should it find their work unsatisfactory, and respondents are
highly dependent on the petitioner for continued work.

Fourth. The degree of control and supervision

exercised by petitioner over respondents through its
supervisors negates the allegation that respondents are
independent contractors.

The presumption is that when the work done is

an integral part of the regular business of the
employer and when the worker, relative to the
employer, does not furnish an independent business
or professional service, such work is a regular
employment of such employee and not an
independent contractor.[45] The Court will peruse beyond
any such agreement to examine the facts that typify the
parties actual relationship.
Page | 17

COCA-COLA
BOTTLERS
VS. ALAAN
AGITO 579
SCRA 445

Manufacturer
and distributor
soft drink
beverages

salesmen assigned at
the Lagro Sales
Office of petitioner

No

The law clearly establishes an employer-employee relationship

between the principal employer and the contractors employee upon a
finding that the contractor is engaged in labor-only
contracting. Article 106 of the Labor Code categorically states: There
is labor-only contracting where the person supplying workers to an
employee does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others, and the
workers recruited and placed by such persons are performing activities
which are directly related to the principal business of such
employer. Thus, performing activities directly related to the principal
business of the employer is only one of the two indicators that laboronly contracting exists; the other is lack of substantial capital or
investment. The Court finds that both indicators exist in the case at bar.
Respondents worked for petitioner as salesmen, with the
exception of respondent Gil Francisco whose job was designated as
leadman. In the Delivery Agreement[32] between petitioner and
TRMD Incorporated, it is stated that petitioner is engaged in the
manufacture, distribution and sale of softdrinks and other related
products. The work of respondents, constituting distribution and sale
of Coca-Cola products, is clearly indispensable to the principal
Page | 18

business of petitioner. The repeated re-hiring of some of the

respondents supports this finding.[33] Petitioner also does not
contradict respondents allegations that the former has Sales
Departments and Sales Offices in its various offices, plants, and
warehouses; and that petitioner hires Regional Sales Supervisors and
District Sales Supervisors who supervise and control the salesmen
and sales route helpers.[34]
OPULENCIA
ICE PLANT
VS. NLRC 228
SCRA 473

Ice
manufacturer

compressor operator
of Tiongson Ice Plant

he was hired as
compressor operatormechanic for the ice
plants of petitioner Dr.
Melchor Opulencia
located in Tanauan,
Batangas, and
Calamba, Laguna.

Yes

No particular form of evidence is required to prove the existence of

an employer-employee relationship. Any competent and relevant
evidence to prove the relationship may be admitted. For, if only
documentary evidence would be required to show that relationship,
no scheming employer would ever be brought before the bar of
justice, as no employer would wish to come out with any trace of the
illegality he has authored considering that it should take much
weightier proof to invalidate a written instrument. 2 Thus, as in this
case where the employer-employee relationship between petitioners
and Esita was sufficiently proved by testimonial evidence, the
absence of time sheet, time record or payroll has become
inconsequential.
The petitioners' reliance on Sevilla v. Court of Appeals 3 is misplaced.
In that case, we did not consider the inclusion of employer's name in
the payroll as an independently crucial evidence to prove an
employer-employee relation. Moreover, for a payroll to be utilized to
disprove the employment of a person, it must contain a true and
complete list of the employees. But, in this case, the testimonies of
petitioners' witnesses admit that not all the names of the employees
were reflected in the payroll.
Page | 19

In their Consolidated Reply, petitioners assert that "employees who

were absent were naturally not included in the weekly payrolls." 4 But
this simply emphasizes the obvious. Petitioners' payrolls do not
contain the complete list of the employees, so that the payroll slips
cannot be an accurate basis in determining who are and are not their
employees. In addition, as the Solicitor General observes: ". . . . the
payroll slips submitted by petitioners do not cover the entire period of
nine years during which private respondent claims to have been
employed by them, but only the periods from November 2 to
November 29, 1986 and April 26 to May 30, 1987 . . . . It should be
noted that petitioners repeatedly failed or refused to submit all payroll
slips covering the period during which private respondent claims to
have been employed by them despite repeated directives from the
Labor Arbiter . . . ." 5 In this regard, we can aptly apply the disputable
presumption that evidence willfully suppressed would be adverse if
produced. 6
Petitioners further contend that the claim of Esita that he worked
from seven o'clock in the morning to five o'clock in the afternoon,
which is presumed to be continuous, is hardly credible because
otherwise he would not have had the time to tend his crops. 7 As
against this positive assertion of Esita, it behooves petitioners to
prove the contrary. It is not enough that they raise the issue of
probability, nay, improbability, of the conclusions of public
respondents based on the facts bared before them, for in case of
doubt, the factual findings of the tribunal which had the opportunity
to peruse the conflicting pieces of evidence should be sustained.
The petitioners point out that even granting arguendo that Esita was
indeed a mechanic, he could never be a regular employee because his
presence would be required only when there was a need for repair.
Page | 20

We cannot sustain this argument. This circumstance cannot affect the

regular status of employment of Esita. An employee who is required
to remain on call in the employer's premises or so close thereto that
he cannot use the time effectively and gainfully for his own purpose
shall be considered as working while on call. 8 In sum, the
determination of regular and casual employment 9 is not affected by
the fact that the employee's regular presence in the place of work is
not required, the more significant consideration being that the work
of the employee is usually necessary or desirable in the business of
the employer. More importantly, Esita worked for 9 years and, under
the Labor Code, "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 that activity in which
he is employed . . . ." 10
The petitioners would give the impression that the repair of the ice
plant and the renovation of the residence of Dr. Opulencia were
voluntarily extended by Esita because "[r]espondent did it on their
(sic) own." Unfortunately for petitioners, we cannot permit these
baseless assertions to prevail against the factual findings of public
respondents which went through the sanitizing process of a public
hearing. The same observation may be made of the alleged
inconsistencies in Esita's testimonies. Moreover, on the claim that
Esita's construction work could not ripen into a regular employment
in the ice plant because the construction work was only temporary
and unrelated to the ice-making business, needless to say, the one
month spent by Esita in construction is insignificant compared to his
nine-year service as compressor operator in determining the status of
his employment as such, and considering further that it was Dr.
Opulencia who requested Esita to work in the construction of his
Page | 21

house.
In allowing Esita to stay in the premises of the ice plant and
permitting him to cultivate crops to augment his income, there is no
doubt that petitioners should be commended; however, in view of the
existence of an employer-employee relationship as found by public
respondents, we cannot treat humanitarian reasons as justification for
emasculating or taking away the rights and privileges of employees
granted by law. Benevolence, it is said, does not operate as a license
to circumvent labor laws. If petitioners were genuinely altruistic in
extending to their employees privileges that are not even required by
law, then there is no reason why they should not be required to give
their employees what they are entitled to receive. Moreover, as found
by public respondents, Esita was enjoying the same privileges
granted to the other employees of petitioners, so that in thus treating
Esita, he cannot be considered any less than a legitimate employee of
petitioners.
AFP MUTUAL
BENEFIT VS.
NLRC 267
SCRA 47

insurance
underwriter of
petitioner AFP
Mutual Benefit
Association

Duties and
Obligations:
1.
During the
lifetime of this
Agreement, the
SALES AGENT
(private respondent)
shall solicit
exclusively for
AFPMBAI
(petitioner), and shall
be bound by the

No
Well-settled is the doctrine that the existence of an employeremployee relationship is ultimately a question of fact and that the
findings thereon by the labor arbiter and the National Labor
Relations Commission shall be accorded not only respect but even
finality when supported by substantial evidence.[8] The determinative
factor in such finality is the presence of substantial evidence to
support said finding, otherwise, such factual findings cannot bind
this Court.
Respondent Commission concurred with the labor arbiter's

Page | 22

latter's policies, memo

circulars, rules and
regulations which it
may from time to
time, revise, modify
or cancel to serve its
business interests.
2.
The SALES
AGENT shall confine
his business activities
for AFPMBAI while
inside any military
camp, installation or
residence of military
personnel. He is free
to solicit in the area
for which he/she is
licensed and as
authorized, provided
however, that
AFPMBAI may from
time to time, assign
him a specific area of
responsibility and a
production quota on a
case to case basis.lex

x x x
xxx

x x

findings that:[9]
"x x x The complainant's job as sales insurance agent is usually
necessary and desirable in the usual business of the respondent
company. Under the Sales Agents Agreement, the complainant was
required to solicit exclusively for the respondent company, 'and he
was bound by the company policies, memo circulars, rules and
regulations which were issued from time to time. By such
requirement to follow strictly management policies, orders,
circulars, rules and regulations, it only shows that the respondent
had control or reserved the right to control the complainant's work as
solicitor. Complainant was not an independent contractor as he did
not carry on an independent business other than that of the
company's x x x."
To this, respondent Commission added that the Sales Agent's
Agreement specifically provided that petitioner may assign private
respondent a specific area of responsibility and a production
quota. From there, it concluded that apparently there is that exercise
of control by the employer which is the most important element in
determining employer-employee relationship.[10]
We hold, however, that respondent Commission misappreciated
the facts of the case. Time and again, the Court has applied the
"four-fold" test in determining the existence of employer-employee
relationship. This test considers the following elements: (1) the
power to hire; (2) the payment of wages; (3) the power to dismiss;
and (4) the power to control, the last being the most important
Page | 23

C.
Commission
1.
The SALES
AGENT shall be
entitled to the
commission due for
all premiums actually
due and received by
AFPMBAI out of life
insurance policies
solicited and obtained
by the SALES
AGENT at the rates
set forth in the
applicant's
commission schedules
hereto attached.

element.[11]
The difficulty lies in correctly assessing if certain factors or
elements properly indicate the presence of control. Anent the issue
of exclusivity in the case at bar, the fact that private respondent was
required to solicit business exclusively for petitioner could hardly be
considered as control in labor jurisprudence. Under Memo Circulars
No. 2-81[12] and 2-85, dated December 17, 1981 and August 7, 1985,
respectively, issued by the Insurance Commissioner, insurance
agents are barred from serving more than one insurance company, in
order to protect the public and to enable insurance companies to
exercise exclusive supervision over their agents in their solicitation
work. Thus, the exclusivity restriction clearly springs from a
regulation issued by the Insurance Commission, and not from an
intention by petitioner to establish control over the method and
manner by which private respondent shall accomplish his
work. This feature is not meant to change the nature of the
relationship between the parties, nor does it necessarily imbue such
relationship with the quality of control envisioned by the law.
So too, the fact that private respondent was bound by company
policies, memo/circulars, rules and regulations issued from time to
time is also not indicative of control. In its Reply to Complainant's
Position Paper,[13]petitioner alleges that the policies, memo/circulars,
and rules and regulations referred to in provision B(1) of the Sales
Agent's Agreement are only those pertaining to payment of agents'
accountabilities, availment by sales agents of cash advances for
sorties, circulars on incentives and awards to be given based on
Page | 24

production, and other matters concerning the selling of insurance, in

accordance with the rules promulgated by the Insurance
Commission. According to the petitioner, insurance solicitors are
never affected or covered by the rules and regulations
concerning employee conduct and penalties for violations thereof,
work standards, performance appraisals, merit increases,
promotions,
absenteeism/attendance,
leaves
of
absence,
management-union matters, employee benefits and the like. Since
private respondent failed to rebut these allegations, the same are
deemed admitted, or at least proven, thereby leaving nothing to
support the respondent Commission's conclusion that the foregoing
elements signified an employment relationship between the parties.
In regard to the territorial assignments given to sales agents, this
too cannot be held as indicative of the exercise of control over an
employee. First of all, the place of work in the business of soliciting
insurance does not figure prominently in the equation. And more
significantly, private respondent failed to rebut petitioner's allegation
that it had never issued him any territorial assignment at
all. Obviously, this Court cannot draw the same inference from this
feature as did the respondent Commission.
To restate, 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
Page | 25

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.
[14]
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
Page | 26

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."[15]
Private respondent's contention that he was petitioner's
employee is belied by the fact that he was free to sell insurance at
any time as he was not subject to definite hours or conditions of
work and in turn was compensated according to the result of his
efforts. By the nature of the business of soliciting insurance, agents
are normally left free to devise ways and means of persuading
people to take out insurance. There is no prohibition, as contended
by petitioner, for private respondent to work for as long as he does
not violate the Insurance Code.
ASIAPRO VS.
NLRC 538
SCRA 659

a quasi-judicial
body authorized
by law to resolve
disputes arising
under Republic
Act No. 1161, as
amended by
Republic Act No.
8282.

Its primary
objectives are to
provide savings
and credit
facilities and to
develop other
livelihood
services for its
owners-

Asiapro Cooperative
(Asiapro) is a multipurpose cooperative
created pursuant to
Republic Act No.
6938

Yes

First. It is expressly provided in the Service Contracts that it

is the respondent cooperative which has the exclusive discretion in
the selection and engagement of the owners-members as well as
its team leaders who will be assigned at Stanfilco.
[28]
Second. Wages are defined as remuneration or earnings,
however designated, capable of being expressed in terms of money,
whether fixed or ascertained, on a time, task, piece or commission
basis, or other method of calculating the same, which is payable by
Page | 27

members. In the
discharge of the
aforesaid
primary
objectives,
respondent
cooperative
entered into
several Service
Contracts

an employer to an employee under a written or unwritten

contract of employment for work done or to be done, or for
service rendered or to be rendered.[29] In this case,
the weekly stipends or the so-called shares in the service surplus
given by the respondent cooperative to its owners-members were in
reality wages, as the same were equivalent to an amount not lower
than that prescribed by existing labor laws, rules and regulations,
including the wage order applicable to the area and industry; or the
same shall not be lower than the prevailing rates of wages.[30] It
cannot be doubted then that those stipends or shares in the service
surplus are indeed wages, because these are given to the ownersmembers as compensation in rendering services to respondent
cooperatives client, Stanfilco. Third. It is also stated in the abovementioned Service Contracts that it is the respondent cooperative
which has the power to investigate, discipline and remove the
owners-members and its team leaders who were rendering
services at Stanfilco.[31] Fourth. As earlier opined, of the four
elements of the employer-employee relationship, the control test is
the most important. In the case at bar, it is the respondent
cooperative which has the sole control over the manner and
means of performing the services under the Service Contracts
with Stanfilco as well as the means and methods of work.
[32]
Also, the respondent cooperative is solely and entirely
responsible for its owners-members, team leaders and other
representatives at Stanfilco.[33] All these clearly prove that, indeed,
Page | 28

there is an employer-employee relationship between the respondent

cooperative and its owners-members.
It is true that the Service Contracts executed between the
respondent cooperative and Stanfilco expressly provide that there
shall be no employer-employee relationship between the respondent
cooperative and its owners-members.[34] This Court, however,
cannot give the said provision force and effect.
As previously pointed out by this Court, an employeeemployer relationship actually exists between the respondent
cooperative and its owners-members. The four elements in the fourfold test for the existence of an employment relationship have been
complied with. The respondent cooperative must not be allowed to
deny its employment relationship with its owners-members by
invoking the questionable Service Contracts provision, when in
actuality, it does exist. The existence of an employer-employee
relationship cannot be negated by expressly repudiating it in a
contract, when the terms and surrounding circumstances show
otherwise. The employment status of a person is defined and
prescribed by law and not by what the parties say it should be.
[35]

It is settled that the contracting parties may establish such

stipulations, clauses, terms and conditions as they want, and their
Page | 29

agreement would have the force of law between

them. However, the agreed terms and conditions must not be
contrary to law, morals, customs, public policy or public order.
[36]
The Service Contract provision in question must be struck down
for being contrary to law and public policy since it is apparently
being used by the respondent cooperative merely to circumvent the
compulsory coverage of its employees, who are also its ownersmembers, by the Social Security Law.
This Court is not unmindful of the pronouncement it made
in Cooperative Rural Bank of Davao City, Inc. v. FerrerCalleja 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 co-owner
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
Page | 30

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.

The situation in the aforesaid case is very much different

from the present case. 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 employer-employee 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
Page | 31

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.[38] 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. [39] With that, a
cooperative can be likened to a corporation with a personality
separate and distinct from its owners-members. Consequently, an
owner-member of a cooperative can be an employee of the latter and
an employer-employee 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. 0-6232460.[40] In its by-laws,[41] 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 owners-members 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.

Page | 32

PURIFICACIO
N TABANG VS.
NLRC 266
SCRA 462

non-stock
corporation
engaged in
extending medical
and surgical
services

Purificacion
Tabang was a
founding
member, a
member of the
Board of
Trustees, and
the corporate
secretary of
private
respondent
Pamana Golden
Care Medical
Center
Foundation, Inc.

As medical director
and hospital
administrator,
petitioner was tasked
to run the affairs of
the aforesaid medical
center and perform all
acts of administration
relative to its daily
operations.

No

Contrary to the contention of petitioner, a medical director and a

hospital administrator are considered as corporate officers under the
by-laws of respondent corporation. Section 2(i), Article I thereof
states that one of the powers of the Board of Trustees is "(t)o appoint
a Medical Director, Comptroller/Administrator, Chiefs of Services
and such other officers as it may deem necessary and prescribe their
powers and duties."
The president, vice-president, secretary and treasurer are commonly
regarded as the principal or executive officers of a corporation, and
modern corporation statutes usually designate them as the officers of
the corporation. However, other offices are sometimes created by
the charter or by-laws of a corporation, or the board of directors may
be empowered under the by-laws of a corporation to create
additional offices as may be necessary.
It has been held that an "office" is created by the charter of the
corporation and the officer is elected by the directors or
stockholders. On the other hand, an "employee" usually occupies no
office and generally is employed not by action of the directors or
stockholders but by the managing officer of the corporation who
also determines the compensation to be paid to such employee. 8 In
the case at bar, considering that herein petitioner, unlike an ordinary
employee, was appointed by respondent corporations Board of
Page | 33

GREAT
PACIFIC LIFE
VS. NLRC 187
SCRA 694

Insurance
company

Trainee agents

Later on they were

designated as district
manager under a
three-year Agreement
of Managership

Yes

Trustees in its memorandum of October 30, 1990, 9 she is deemed

an officer of the corporation. Perforce, Section 5(c) of Presidential
Decree No. 902-A, which provides that the SEC exercises exclusive
jurisdiction over controversies in the election or appointment of
directors, trustees, officers or managers of corporations, partnerships
or associations, applies in the present dispute. Accordingly,
jurisdiction over the same is vested in the SEC, and not in the Labor
Arbiter or the NLRC.
he 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
Page | 34

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.
True, it cannot be denied that based on the definition of an
"insurance agent" in the Insurance Code [Art. 300] some of the
functions performed by private respondents were those of insurance
agents. Nevertheless, it does not follow that they are not employees
of Grepalife. The Insurance Code may govern the licensing
requirements and other particular duties of insurance agents, but it
does not bar the application of the Labor Code with regard to labor
standards and labor relations
JOB CONTRACTING/ LABOR ONLY CONTRACTING
Parties and case no.
MANILA WATER
COMPANY, INC.,
VS. HERMINIO D.
PENA, G.R. NO.
158255. JULY 8,
2004

What are the works of the

contractor
ACGI, a duly organized
corporation primarily engaged in
collection services, is an
independent contractor which
entered into a service contract for
the collection of petitioners
accounts startingNovember 30,
1997 until the early part of
February 1999

Is the job a JC or
LOC
Labor only
contracting

Reasons

Final dispositon

First, ACGI does not have substantial

capitalization or investment in the form
of tools, equipment, machineries, work
premises, and other materials, to
qualify
as
an
independent
contractor. While it has an authorized
capital stock of P1,000,000.00, only
P62,500.00 is actually paid-in, which
cannot be considered substantial
capitalization. The 121 collectors
subscribed to four shares each and paid

Under this factual milieu, there is no

doubt that ACGI was engaged in labor-only
contracting, and as such, is considered
merely an agent of the petitioner. In laboronly contracting, the statute creates an
employer-employee relationship for a
comprehensive purpose: to prevent a
circumvention of labor laws. The contractor
is considered merely an agent of the principal
employer and the latter is responsible to the
employees of the labor-only contractor as if
Page | 35

only the amount of P625.00 in order to

comply
with
the
incorporation
.
requirements
Further,
private
respondents reported daily to the
branch office of the petitioner
because ACGI has no office or work
premises. In fact, the corporate address
of ACGI was the residence of its
president,
Mr.
Herminio
D.
Pea. Moreover, in dealing with the
consumers, private respondents used
the receipts and identification cards
issued by petitioner.
Second, the work of the private
respondents was directly related to the
principal business or operation of the
petitioner. Being in the business of
providing water to the consumers in the
East Zone, the collection of the charges
therefor by private respondents for the
petitioner can only be categorized as
clearly related to, and in the pursuit of
the latters business.

such employees had been directly employed

by the principal employer. Since ACGI is
only a labor-only contractor, the workers it
supplied should be considered as employees
of the petitioner.
Even the four-fold test will show that
petitioner is the employer of private
respondents. The elements to determine the
existence of an employment relationship are:
(a) the selection and engagement of the
employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employers
power to control the employees conduct. The
most important element is the employers
control of the employees conduct, not only
as to the result of the work to be done, but
also as to the means and methods to
accomplish it

Lastly, ACGI did not carry on an

independent business or undertake the
performance of its service contract
Page | 36

according to its own manner and

method, free from the control and
supervision
of
its
principal,
petitioner. Prior to private respondents
alleged employment with ACGI, they
were already working for petitioner,
subject to its rules and regulations in
regard to the manner and method of
performing their tasks. This form of
control and supervision never changed
although they were already under the
seeming employ of ACGI. Petitioner
issued memoranda regarding the billing
methods and distribution of books to
the collectors; it required private
respondents to report daily and to remit
their collections on the same day to the
branch office or to deposit them with
Bank of the Philippine Islands; it
monitored strictly their attendance as
when a collector cannot perform his
daily collection, he must notify
petitioner or the branch office in the
morning of the day that he will be
absent;
and
although
it
was ACGI which ultimately disciplined
private respondents, the penalty to be
imposed was dictated by petitioner as
Page | 37

shown in the letters it sent

to ACGI specifying the penalties to be
meted
on
the
erring
private
respondents.These
are
indications
that ACGI was not left alone in the
supervision and control of its alleged
employees. Consequently, it can be
concluded that ACGI was not an
independent contractor since it did not
carry a distinct business free from the
control and supervision of petitioner.
LAKAS SA
INDUSTRIYA NG
KAPATIRANG
ETC. VS.
BURLINGAME
CORP.
G.R. NO. 162833.
JUNE 15, 2007

F. Garil Manpower Services a

duly licensed local employment
agency

Labor only
contracting

First, F. Garil does not have

substantial capitalization or investment
in the form of tools, equipment,
machineries, work premises, and other
materials, to qualify as an independent
contractor. No proof was adduced to
show F. Garils capitalization.

It is patent that the involvement of F.

Garil in the hiring process was only with
respect to the recruitment aspect, i.e. the
screening, testing and pre-selection of the
personnel it provided to Burlingame. The
actual hiring itself was done through the
deployment of personnel to establishments
Second, the work of the promo- by Burlingame.
girls was directly related to the
The
contract
states
principal business or operation that Burlingame would pay the workers
of Burlingame. Marketing and selling through
F.
Garil,
stipulating
of products is an essential activity to that Burlingame shall pay F. Garil a certain
sum per worker on the basis of eight-hour
the main business of the principal.
work every 15th and 30th of each calendar
Page | 38

Lastly, F. Garil did not carry on

an independent business or undertake
the performance of its service contract
according to its own manner and
method, free from the control and
supervision
of
its
principal,
Burlingame.

PHILIPPINE
AIRLINES,
INC., PETITIONE
R, VS. NATIONAL
LABOR
RELATIONS

STELLAR, a domestic
corporation engaged, among
others, in the business of job
contracting janitorial services

Job contracting

There is labor-only contracting

where the person supplying workers to
an employer does not have substantial
capital or investment in the form of
tools, equipment, machineries, work
premises, among others, and the

month. This evinces the fact that F. Garil

merely served as conduit in the payment of
wages to the deployed personnel. The
interpretation would have been different if
the payment was for the job, project, or
services rendered during the month and not
on a per worker basis
Under this circumstance, there is no
doubt that F. Garil was engaged in labor-only
contracting, and as such, is considered
merely an agent of Burlingame. In laboronly contracting, the law creates an
employer-employee relationship to prevent a
circumvention of labor laws. The contractor
is considered merely an agent of the principal
employer and the latter is responsible to the
employees of the labor-only contractor as if
such employees had been directly employed
by the principal employer.[21] Since F. Garil
is a labor-only contractor, the workers it
supplied should be considered as employees
of Burlingame in the eyes of the law.
The foregoing agreement clearly
indicates that an employee-employer relation
existed between the individual private
respondents and STELLAR, not PAL. The
provisions of the agreement demonstrate that
Page | 39

COMMISSION
G.R. NO.
125792. NOVEMB
ER 9, 1998

workers recruited and placed by such

persons are performing activities which
are directly related to the principal
business of such employer. In such
cases, the person or intermediary shall
be considered merely as an agent of the
employer who shall be responsible to
the workers in the same manner and
extent as if the latter were directly
employed by him.

STELLAR possessed these earmarks of an

employer: (1) the power of selection and
engagement of employees (Stipulation Nos.
1, 4, 7 and 8), (2) the payment of wages
(Stipulation Nos. 5, 6, 7 and 8), (3) the power
of dismissal, and (4) the power to control the
employees conduct (Stipulation No. 8).

Aside from these stipulations in the

service agreement, other pieces of evidence
This definition covers any person support the conclusion that STELLAR, not
who undertakes to supply workers to an PAL, was the employer of the individual
private
respondents. A
contract
of
employer, where such person:
employment existed between STELLAR and
(1) Does not have substantial capital
the individual private respondents, proving
or investment in the form of tools,
that it was said corporation which hired
equipment, [machinery], work premises them. It was also STELLAR which
and other materials; and
dismissed
them,
as
evidenced
by
(2) The workers recruited and placed Complainant Parenas termination letter,
by such person are performing
which was signed by Carlos P. Callanga, vice
activities which are directly related to
president for operations and comptroller of
the principal business or operations of
STELLAR.] Likewise, they worked under
the employer in which workers are
STELLARs own supervisors, Rodel
habitually employed. On the other
Pagsulingan, Napoleon Parungao and Renato
hand, permissible job contracting
Topacio STELLAR even had its own
requires the following conditions:
collective bargaining agreement with its
(1) The contractor carries on an
employees, including the individual private
independent business and undertakes
respondents. Moreover, PAL had no power of
Page | 40

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
(2) The contractor has substantial
capital or investment in the form of
tools, equipment, [machinery], work
premises, and other materials which are
necessary in the conduct of his
business.
Applying the foregoing provisions
to the present case, the Court finds no
basis for holding that PAL engaged in
labor-only contracting. The true nature
of the individual private respondents
employment is evident from the service
agreement between petitioner and
STELLAR

control and dismissal over them.

In fact, STELLAR claims that it falls
under the definition of an independent job
contractor. Thus, it alleges that it has
sufficient capital in the form of tools and
equipment, like vacuum cleaners and
polishers, and substantial capitalization as
proven by its financial statements Further,
STELLAR has clients other than petitioner,
like San Miguel Corporation, Hongkong and
Shanghai
Bank,
Eveready,
Benguet
Management Corporation and Japan Airlines.
All these circumstances establish that
STELLAR undertook said contract on its
account, under its own responsibility,
according to its own manner and method, and
free from the control and direction of the
petitioner. Where the control of the principal
is limited only to the result of the work,
independent job contracting exists. The
janitorial service agreement between
petitioner and STELLAR is definitely a case
of permissible job contracting.
Again, we must emphasize that the main
business of STELLAR is the supply of
manpower to perform janitorial services for
Page | 41

PHILIPPINE FUJI
XEROX
CORPORATION
VS.NATIONAL
LABOR
RELATIONS
COMMISSION G.
R. NO.
111501. MARCH 5,
1996

Skillpower, Inc. supplied

workers to operate copier
machines of Fuji Xerox as part of
the latters Xerox Copier
Project

Labor only
contracting

JANG
LIMVS. NATIONA
L LABOR
RELATIONS
COMMISSION
G.R. NO.
124630. FEBRUA

The hiring of herein [p]etitioners

was facilitated through Teddy
Arabi, who was tapped and hired
by private respondent CTCI to
recruit [p]etitioners under strict
instructions. Majority of herein
[p]etitioners are neighbors,

Labor only
contracting

its clients, and the individual private

respondents were janitors engaged to perform
activities that were necessary and desirable to
STELLARs enterprise In this case, we hold
that the individual private respondents were
STELLARs regular employees,
The Agreement between petitioner Fuji There is labor-only contracting where the
Xerox and Skillpower, Inc. provides
person supplying workers to an employer
that Skillpower, Inc. is an independent
does not have substantial capital or
contractor and that the workers hired by investment in the form of tools, equipment,
it shall not, in any manner and under
machineries, work premises, among others,
any circumstances, be considered
and the workers recruited and placed by such
employees of [the] Company, and that
persons are performing activities which are
the Company has no control or
directly related to the principal business of
supervision whatsoever over the
such employer. In such cases, the person or
conduct of the Contractor or any of its
intermediary shall be considered merely as an
workers in respect to how they
agent of the employer who shall be
accomplish their work or perform the
responsible to the workers in the same
Contractors obligations under this
manner and extent as if the latter were
AGREEMENT
directly employed by him.

It is true that the records show that

it was Arabi who recruited the
petitioners to work for the company, the
latter being neighbors, friends and
provincemates
of the
former. However,
it
must
be

Under DOLE Department Order No. 10

(1997), contracting shall be legitimate if the
following circumstances concur:
i)
The contractor or subcontractor carries
on a distinct and independent business and
undertakes to perform the job, work or
Page | 42

RY 19, 1999

friends and provincemates of

Teddy Arabi. In short,
[p]etitioners were engaged,
briefed and instructed by CTCI
before the commencement of
their respective works. Teddy
Arabi never maintained an office
in private respondents company
since his main task is simply to
recruit, under strict instruction,
additional workers as the need
arise

emphasized that Arabi invited or

enlisted the petitioners to work for
CTCI only because the latter instructed
him to do so. Arabis main task is
simply to recruit, under strict
instructions from CTCI, additional
workers as the need arises. In fact,
before the petitioners were dispatched
to perform their assigned tasks, they
were engaged, briefed and instructed by
CTCI. While it may be argued that
Arabi played a role in the eventual
selection and employment of the
petitioners, it is clear that his
involvement therein was at best
perfunctory and mechanical. This is
because the recruitment only starts
when, in the discretion of CTCI,
additional
manpower
is
needed. Patently, the exercise of the
power to select and engage the
petitioners rested solely in CTCI.
With respect to the power of
control over the result of the work to be
done and to the means and methods by
which the work is to be accomplished,
CTCI alleges that it neither exercised

service on its own account and under its own

responsibility, according to its own manner
and method, and free from the control and
direction of the principal in all matters
connected with the performance of the work
except as to the results thereof;
ii)
The contractor or subcontractor has
substantial capital or investment; and
iii)
The agreement between the principal
and contractor or subcontractor assures the
contractual employees entitlement to all labor
and occupational safety and health standards,
free exercise of the right to self-organization,
security of tenure, and social and welfare
benefits.
As Teddy Arabi has no capital of his own in
the form of equipment, tools, machineries
and materials in undertaking sawing, milling,
piling, bundling and clearing work for CTCI;
as such activities are necessary to CTCIs
plywood manufacturing and woodprocessing
business operations; as Teddy Arabis work
premises are also the sawmill premises
operated by CTCI; as the equipment and
tools utilized in Teddy Arabis undertaking
actually belonged to CTCI which allegedly
lent the same to him, then Teddy Arabi is
only a labor-only contractor.
Page | 43

nor exerted any control over petitioners

because they never set foot on its
premises. It argues that the control
test has no application in the instant
case because there was no occasion to
control the petitioners.

ROSEWOOD
PROCESSING,
INC.
VS. NATIONAL
LABOR
RELATIONS
COMMISSION
G.R. NOS. 11647684. MAY 21, 1998

Veterans Philippine Scout

Security Agency and/or Sergio
Jamila IV is a security agency

Job contracting

Complainants Napoleon Mamon,

Arsenio Gazzingan, Rodolfo Velasco,
Armando Ballon and Victor Aldeza
rendered security services to
[petitioner] for a fixed period and were
thereafter assigned to other entities or
establishments or were floated or
recalled to the headquarters of
Veterans; and,
The relationship between
[petitioner] and Veterans was governed
by a Contract for Guard Services under
which [petitioner] dutifully paid a
contract price of P3,500.00 a month for

The allegations that Arabi has sufficient

capitalization or that he has investments in
the form of tools, equipment, machineries,
and
work
premises,
are
entirely
unsubstantiated. In our view what clearly
appears here is that Arabi is a mere agent of
CTCI. His only job is to recruit and hire
manpower as needed. Arabi is definitely not
an independent contractor. Therefore, it is
not Arabi but CTCI which is responsible to
petitioners who must be deemed employed
not by Arabi but by the company.[

Withal, fairness likewise dictates that the

petitioner should not, however, be held liable
for wage differentials incurred while the
complainants were assigned to other
companies. Under provisions of the Labor
Code, should the contractor fail to pay the
wages of its employees in accordance with
law, the indirect employer (the petitioner in
this case), is jointly and severally liable with
the contractor, but such responsibility should
be understood to be limited to the extent of
the work performed under the contract, in the
same manner and extent that he is liable to
the employees directly employed by
Page | 44

12 hour duty per guard and later

increased to P4,250.00 a month for 12
hour duty per guard which are within
the prevailing rates in the industry and
in accordance with labor standard laws

7K
CORPORATION
VS.
NATIONAL
LABOR
RELATIONS
COMMISSION
G.R. NO. 148490
NOVEMBER
22, 2006

7K Corporation (petitioner) and

Universal Janitorial and Allied
Services (Universal) entered into
a service contract where
Universal bound itself to provide
petitioner with drivers at the rate
of P4,637.00 per driver a month.

Labor only
contracting

Thus, petitioner, the principal

employer, is solidarily liable with
Universal, the labor-only contractor, for
the rightful claims of the employees.
Under this set-up, Universal, as the
"labor-only" contractor, is deemed an
agent of the principal, herein petitioner,
and the law makes the principal
responsible to the employees of the
"labor-only" contractor as if the
principal itself directly hired or
employed the employees

him. This liability of petitioner covers the

payment of the workers performance of any
work, task, job or project. So long as the
work, task, job or project has been performed
for petitioners benefit or on its behalf, the
liability accrues for such period even if, later
on, the employees are eventually transferred
or reassigned elsewhere.

Petitioner is therefore solidarily liable with

Universal for the payment of holiday pay,
13th month pay and salary differentials in the
amount of P4,040.37 per respondent, as
awarded by the NLRC and affirmed by the
CA.
Even granting en arguendo that Universal is a
legitimate job contractor and not a labor-only
contractor, still petitioner cannot escape
liability because even without a direct
employer-employee relationship between the
principal employer and the employees, the
former is still jointly and severally liable with
the job contractor for the employees
monetary claims following Arts. 106, 107
and 109 of the Labor Code
Page | 45

COCA-COLA
BOTTLERS
PHILS., INC VS.
ALAN M.
AGITO G.R.
NO. 179546
FEBRUARY 13,
2009

Interserve Management &

Labor only
Manpower Resources, Inc entered contracting
into contract with petitioner
covering the period of 1 April
2002 to 30 September 2002,
constituted legitimate job
contracting, given that the latter
was a bona fide independent
contractor with substantial capital
or investment in the form of
tools, equipment, and machinery
necessary in the conduct of its
business.

Respondents
worked
for
petitioner as salesmen, with the
exception of respondent Gil Francisco
whose job was designated as
leadman. In
the
Delivery
Agreement between petitioner and
TRMD Incorporated, it is stated that
petitioner
is
engaged
in
the
manufacture, distribution and sale of
softdrinks
and
other
related
products. The work of respondents,
constituting distribution and sale of
Coca-Cola
products,
is
clearly
indispensable to the principal business
of petitioner. The repeated re-hiring of
some of the respondents supports this
finding. Petitioner also does not
contradict respondents allegations that
the former has Sales Departments and
Sales Offices in its various offices,
plants, and warehouses; and that
petitioner
hires
Regional
Sales
Supervisors
and
District
Sales
Supervisors who supervise and control
the salesmen and sales route helpers.

As the Court previously observed, the

Contract of Services between Interserve and
petitioner did not identify the work needed to
be performed and the final result required to
be accomplished. Instead, the Contract
specified the type of workers Interserve must
provide
petitioner
(Route
Helpers,
Salesmen, Drivers, Clericals, Encoders &
PD)
and
their
qualifications
(technical/vocational
course
graduates,
physically fit, of good moral character, and
have not been convicted of any crime). The
Contract also states that, to carry out the
undertakings specified in the immediately
preceding paragraph, the CONTRACTOR
shall employ the necessary personnel, thus,
acknowledging that Interserve did not yet
have in its employ the personnel needed by
petitioner and would still pick out such
personnel based on the criteria provided by
petitioner. In other words, Interserve did not
obligate itself to perform an identifiable job,
work, or service for petitioner, but merely
bound itself to provide the latter with specific
types of employees. These contractual
Page | 46

provisions strongly indicated that Interserve

As to the supposed substantial was merely a recruiting and manpower
capital and investment required of an agency providing petitioner with workers
independent job contractor, petitioner performing tasks directly related to the
calls the attention of the Court to the latters principal business.
authorized capital stock of Interserve
amounting toP2,000,000.00. It cites as
The certification issued by the DOLE
authority Filipinas Synthetic Fiber Corp. stating that Interserve is an independent job
v.
National
Labor
Relations contractor does not sway this Court to take it
Commission[ and Frondozo v. National at face value, since the primary purpose
Labor Relations Commission,] where the stated in the Articles of Incorporation[47] of
contractors authorized capital stock Interserve is misleading. According to its
of P1,600,000.00
and P2,000,000.00, Articles of Incorporation, the principal
respectively, were considered substantial business of Interserve is to provide janitorial
for the purpose of concluding that they and allied services. The delivery and
were
legitimate
job distribution of Coca-Cola products, the work
contractors. Petitioner also refers to Neri for which respondents were employed and
v.
National
Labor
Relations assigned to petitioner, were in no way allied
Commission where it was held that a to janitorial services. While the DOLE may
contractor ceases to be a labor-only have found that the capital and/or
contractor by having substantial capital investments in tools and equipment of
alone, without investment in tools and Interserve were sufficient for an independent
equipment.
contractor for janitorial services, this does
not mean that such capital and/or investments
were likewise sufficient to maintain an
Page | 47

independent contracting business for the

delivery and distribution of Coca-Cola
products
SAN MIGUEL
CORPORATION
VS. PROSPERO A.
ABALLA ET AL
G.R. NO. 149011.
JUNE 28, 2005

Sunflower Multi-Purpose
Cooperative the cooperative shall
employ the necessary personnel
and provide adequate equipment,
materials, tools and apparatus
The cooperative shall have the
entire charge, control and
supervision of the work and
services

Labor only
contracting

Sunflower], during the existence of

its service contract with respondent
SMC, did not own a single machinery,
equipment, or working tool used in the
processing plant. Everything was
owned and provided by respondent
SMC. The lot, the building, and
working facilities are owned by
respondent SMC. The machineries and
equipments (sic) like washer machine,
oven or cooking machine, sizer
machine, freezer, storage, and chilling
tanks, push carts, hydrolic (sic) jack,
tables, and chairs were all owned by
respondent SMCAnd from the job
description provided by SMC itself, the
work assigned to private respondents
was directly related to the aquaculture
operations of SMC. Undoubtedly, the
nature of the work performed by
private
respondents
in
shrimp
harvesting, receiving and packing
formed an integral part of the shrimp
processing operations of SMC. As for

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 results of the work.
In legitimate labor contracting, the law
creates an employer-employee relationship
for a limited purpose, i.e., to ensure that the
employees are paid their wages. The
principal employer becomes jointly and
severally liable with the job contractor, only
for the payment of the employees wages
whenever the contractor fails to pay the
same. Other than that, the principal
employer is not responsible for any claim
made by the employees.
In labor-only contracting, the statute
creates an employer-employee relationship
for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor
Page | 48

janitorial and messengerial services,

that they are considered directly related
to the principal business of the
employer[ has been jurisprudentially
recognized.

is considered merely an agent of the principal

employer and the latter is responsible to the
employees of the labor-only contractor as if
such employees had been directly employed
by the principal employer.

Furthermore, Sunflower did not

carry on an independent business or
undertake the performance of its
service contract according to its own
manner and method, free from the
control and supervision of its principal,
SMC, its apparent role having been
merely to recruit persons to work for
SMC

The Contract of Services between SMC

and Sunflower shows that the parties clearly
disavowed the existence of an employeremployee relationship between SMC and
private respondents. The language of a
contract is not, however, determinative of the
parties relationship; rather it is the totality of
the facts and surrounding circumstances of
the case.] A party cannot dictate, by the mere
expedient of a unilateral declaration in a
contract,
the
character
of
its
business, i.e., whether
as
labor-only
contractor or job contractor, it being crucial
that its character be measured in terms of and
determined by the criteria set by statute

Page | 49

WHAT KIND OF EMPLOYEE ARE THEY?

Parties and case no.

MARITES
BERNARDO VS.
NATIONAL LABOR
RELATIONS
COMMISSION G.R.
NO. 122917. JULY 12,
1999

What is the
business of the
employee
Banking
corporation

What are the

duties of the
worker
Money Sorters

How was he hired

What kind of employee

is he

Final disposition

deaf-mutes who were hired

on various periods from
1988 to 1993 by
respondent Far East Bank
and Trust Co. as money
sorters through a uniformly
worded agreement called
Employment Contract for
Handicapped Workers

Regular employee
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

Without a doubt, the task of counting and sorting

bills is necessary and desirable to the business of
respondent bank. With the exception of sixteen
of them, petitioners performed these tasks for
more than six months. Thus, the twenty-seven
petitioners should be deemed regular
employees. As held by the Court, Articles 280
and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals
of our lowly employees by the simple expedient
of extending to them probationary
Page | 50

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 one 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

appointments, ad infinitum. The contract signed

by petitioners is akin to a probationary
employment, during which the bank determined
the employees' fitness for the job. When the
bank renewed the contract after the lapse of the
six-month probationary period, the employees
thereby became regular employees. No
employer is allowed to determine indefinitely
the fitness of its employees

Page | 51

HIGHWAY COPRA
Copra traders
TRADERS VS. NATI
ONAL LABOR
RELATIONS
COMMISSION G.R.
NO. 108889. JULY 30,
1998

General utility
man 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 in
their behalf

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

activity, and while such

activity exist
Regular employee
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

The factual milieu of this case undisputably

shows that private respondent was a regular
employee of petitioners copra business. Article
280 of the Labor Code describes a regular
employee as one who is either (1) 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 he is employed.
The Labor Code draws a fine line between
regular and casual employees to protect the
interests of labor. We ruled in Baguio Country
Club Corporation vs. NLRC that its language
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.
Thus,
notwithstanding any agreements to the contrary,
an employment is deemed regular when the
activities performed by the employee are usually
Page | 52

necessary or desirable in the usual business or

trade of the employer. The primary standard,
therefore, of determining a regular employment
is the reasonable connection between the
particular activity performed by the employee in
relation to the usual business or trade of the
employer, i.e. if the work 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.

POSEIDON FISHING
V. NATIONAL LABOR
RELATIONS
COMMISSION G.R.
NO. 168052
FEBRUARY 20, 2006

fishing
company
engaged in the
deep-sea
fishing industry

boat crew

Private respondent was

employed by Poseidon
Fishing in January 1988 as
Chief Mate.

Regular employee

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 re-hiring 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
Page | 53

ALU-TUCP, VS.
NATIONAL LABOR
RELATIONS
COMMISSION G.R.
NO. 109902 AUGUST
2, 1994

Producer of
steels

Engineers,
utility man
service aide,
surveyman

employed by respondent
NSC in connection with its
Five Year Expansion
Program for varying
lengths of time

Project employees
Thus, the particular
component projects
embraced in the Five
Year Expansion
Program, to which
petitioners were
assigned, were
distinguishable from the
regular or ordinary
business of NSC which,
of course, is the
production or making
and marketing of steel
products. During the
time petitioners rendered
services to NSC, their
work was limited to one
or another of the specific
component projects
which made up the
FAYEP I and II. There is
nothing in the record to
show that petitioners
were hired for, or in fact
assigned to, other

and the recurring need for his services are

testament to the necessity and indispensability of
such services to petitioners business or trade
It is well established by the facts and evidence
on record that herein 13 complainants were hired
and engaged for specific activities or
undertaking the period of which has been
determined at time of hiring or engagement. It is
of public knowledge and which this Commission
can safely take judicial notice that the expansion
program (FAYEP) of respondent NSC consist of
various phases [of] project components which
are being executed or implemented
independently or simultaneously from each other
...
In other words, the employment of each "project
worker" is dependent and co-terminous with the
completion or termination of the specific activity
or undertaking [for which] he was hired which
has been pre-determined at the time of
engagement. Since, there is no showing that they
(13 complainants) were engaged to perform
work-related activities to the business of
respondent which is steel-making, there is no
logical and legal sense of applying to them the
proviso under the second paragraph of Article
280 of the Labor Code, as amended.
The present case therefore strictly falls under the
definition of "project employees" on paragraph
Page | 54

D. M. CONSUNJI,
INC. VS. NATIONAL
LABOR RELATIONS
COMMISSION
G.R. NO.
116572. DECEMBER
18, 2000

Real estate
company

Laborers and
carpenters

Private respondents were

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

purposes, e.g., for

operating or maintaining
the old, or previously
installed and
commissioned, steelmaking machinery and
equipment, or for selling
the finished steel
products

one of Article 280 of the Labor Code, as

amended. Moreover, it has been 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". (See Hilario Rada v. NLRC, G.R.
No. 96078, January 9, 1992; and Sandoval
Shipping, Inc. v. NLRC, 136 SCRA 674 (1985).

Project employees
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.

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 just cause and
due process. As project employees, there is no
showing that they were part of the work pool of
Page | 55

VIVIAN Y.
IMBUIDO, VS.
NATIONAL LABOR
RELATIONS
COMMISSION G.R.
NO. 114734. MARCH
31, 2000

corporation
engaged in the
business of data
encoding and
keypunching

Data encoder

Petitioner was employed as

a data encoder by private
respondent International
Information Services, Inc

the petitioner construction company. Hence, in

their memorandum, private respondents admit
that they are not unaware that as project
employees their employment can be terminated
upon the completion of the project.
Project employee The
In the instant case, petitioner was engaged to
principal test for
perform activities which were usually necessary
determining whether an
or desirable in the usual business or trade of the
employee is a project
employer, as admittedly, petitioner worked as a
employee or a regular
data encoder for private respondent, a
employee is whether the corporation engaged in the business of data
project employee was
encoding and keypunching, and her employment
assigned to carry out a
was fixed for a specific project or undertaking
specific project or
the completion or termination of which had been
undertaking, the duration determined at the time of her engagement, as
and scope of which were may be observed from the series of employment
specified at the time the
contracts between petitioner and private
employee was engaged
respondent, all of which contained a designation
for that project. A project of the specific job contract and a specific period
employee is one whose
of employment.
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
Page | 56

BRENT SCHOOL,
INC VS.
RONALDO
ZAMORA G.R. NO.
L-48494 FEBRUARY
5, 1990

School

Athletic
director

contract in virtue of which

Doroteo R. Alegre was
engaged as athletic director
by Brent School, Inc. at a
yearly compensation of
P20,000.00.

service to be performed
is seasonal in nature and
the employment is for
the duration of the
season
Seasonal employee It is
plain then that when the
employment contract
was signed between
Brent School and Alegre
on July 18, 1971, it was
perfectly legitimate for
them to include in it a
stipulation fixing the
duration thereof
Stipulations for a term
were explicitly
recognized as valid by
this Court

Accordingly, and since the entire purpose behind

the development of legislation culminating in the
present Article 280 of the Labor Code clearly
appears to have been, as already observed, to
prevent circumvention of the employee's right to
be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all
written or oral agreements conflicting with the
concept of regular employment as defined
therein should be construed to refer to the
substantive evil that the Code itself has singled
out: agreements entered into precisely to
circumvent security of tenure. It should have no
application to instances where a fixed period of
employment was agreed upon knowingly and
voluntarily 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 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.
Unless thus limited in its purview, the law would
Page | 57

JAIME D. VIERNES
VS. NATIONAL
LABOR RELATIONS
COMMISSION

Electric
cooperative

Meter reader

Complainants services as
meter readers were
contracted for hardly a
months duration

Regular employees
there are two separate
instances whereby it can
be determined that an
employment is regular:
(1)
The
particular
activity performed by the
employee is necessary or
desirable in the usual
business or trade of the
employer; or (2) if the
employee
has
been
performing the job for at
least a year.
Herein
fall under
category

petitioners
the first

be made to apply to purposes other than those

explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and
apt to lead to absurd and unintended
consequences
They were engaged to perform activities that are
necessary to the usual business of private
respondent. We agree with the labor arbiters
pronouncement that the job of a meter reader is
necessary to the business of private respondent
because unless a meter reader records the
electric consumption of the subscribing public,
there could not be a valid basis for billing the
customers of private respondent. The fact that
the petitioners were allowed to continue working
after the expiration of their employment contract
is evidence of the necessity and desirability of
their service to private respondents business. In
addition, during the preliminary hearing of the
case on February 4, 1991, private respondent
even offered to enter into another temporary
employment contract with petitioners. This only
proves private respondents need for the services
of herein petitioners. With the continuation of
their employment beyond the original term,
petitioners have become full-fledged regular
employees. The fact alone that petitioners have
rendered service for a period of less than six
months does not make their employment status
Page | 58

PHILEX MINING
CORPORATION
VS. NATIONAL
LABOR RELATIONS
COMMISSION G.R.
NO.
125132. AUGUST 10,
1999

Mining
company

Chemical
engineers

Contract of Temporary
Employment.

regular employees
petitioner has not shown
that private respondents
were informed that they
were to be assigned to a
specific undertaking;
neither has it been
established that they
were informed of the
duration and scope of
such project or
undertaking at the time
of their engagement

as probationary.
Petitioners contention that privaterespondents
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. In
this case, petitioner has not shown that private
respondents were informed that they were to be
assigned to a specific project or undertaking.
Neither has it been established that they were
informed of the duration and scope of such
project or undertaking at the time of their
engagement, that is, on June 1988 on the part of
Austria and Tamondong and on January 1989 in
the case of Borja and de la Cruz. Private
respondents were informed thereof only much
later on April 1989. We likewise agree with the
Solicitor General when he notes that: x x x while
the subject contracts purport to be for a specific
project or undertaking only, the record is bereft
Page | 59

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. 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.
ARTEMIO J.
ROMARES, ,
VS. NATIONAL
LABOR RELATIONS
COMMISSION G.R.
NO. 122327. AUGUST
19, 1998

Food
corporation

he was hired by
respondent in its
Maintenance/Projects/Engi
neering Department during
the periods and at
respective rates

Regular employee
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. We held
in Baguio Country Club Corporation vs.
NLRC that:
x x x if the employee has been performing the
job for at least one year, even if the performance
is not continuous or merely intermittent, the law
deems the repeated and continuing need for its
Page | 60

performance as sufficient evidence of the

necessity if not indispensability of that activity
to the business. Hence, the employment is also
considered regular but only with respect to such
activity and while such activity exists
HACIENDA
FATIMA VS. NATIO
NAL FEDERATION
OF SUGARCANE
WORKERS G.R. NO.
149440. JANUARY
28, 2003

Sugarcane
plantation

PHILIPPINE FRUIT
& VEGETABLE

governmentowned and

Regular employees They

are regular and not
seasonal employees. For
them to be excluded as
regulars, it is not enough
that they perform work
that is seasonal in nature
but they also are
employed for the
duration of one season.
The evidence only
proved the first but not
the second requirement.

seeders,
operators,

Court clarified that in order to be classified as a

seasonal worker, and excluded from the
classification of regular employees, one must
perform work or services that are seasonal in
nature and be employed only for the duration of
one season.
On the other hand, regular employees include
seasonal employees who continuously and
repeatedly perform a particular nature of work as
it is sufficient evidence of the necessity if not
indispensability of that activity to the business.
The employment is considered regular only with
respect to the activity and while such activity
exists.
Citing De Leon v. NLRC, 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 merely
considered on leave until re-employed

Regular employees
the work of complainants as seeders,
Page | 61

INDUSTRIES, INC
G.R. NO.
122122. JULY 20,
1999

JENNIFER
FABELLO
PASAMBA VS.
NATIONAL LABOR

controlled
corporation
engaged in the
manufacture
and processing
of fruit and
vegetable
purees for
export

sorters, slicers,
janitors,
drivers, truck
helpers,
mechanics and
office
personnel

Hospital

Staff nurse

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.[13] 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 large-scale 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.

Petitioner Jennifer Fabello

Pasamba was employed as
a staff nurse by SLMC
on 3 July 2001 on a

Probationary employee
The services of an employee hired on
Petitioner
was
a
probationary basis may be terminated when he
probationary employee,
or she fails to qualify as a regular employee in
not
a
regular
accordance with reasonable standards made
Page | 62

RELATIONS
COMMISSION,
G.R. NO. 168421
JUNE 8, 2007

probationary status for a

maximum of six months

employee. 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 a
permanent position. A
probationary
appointment affords the
employer an opportunity
to observe the skill,
competence, as well as
the
attitude
of
a
probationer

known by the employer to the employee at the

time of his engagement. The law does not
preclude the employer from terminating the
probationary employment, if the employer finds
that the probationary employee is not qualified
for regular employment. As long as the
termination was made for reasons provided
under Article 281 of the Labor Code before the
expiration of the six-month probationary period,
the employer is well within its rights to sever the
employer-employee relationship. A contrary
interpretation would contravene the clear
meaning of the term probationary. The law in
protecting the rights of the laborer authorizes
neither the oppression nor the self-destruction of
the employer.
The provision which states that the
probationary period shall not exceed six months
means that the probationary employee may be
dismissed for cause at any time before the
expiration of six months after hiring. If, after
working for less than six months, he or she is
found unfit for the job, he or she can be
dismissed. On the other hand, if such worker
Page | 63

continues to be employed longer than six

months, he or she is considered as a regular
employee and ceases to be a probationary
employee[
INTERNATIONAL
CATHOLIC
MIGRATION
COMMISSION VS.
NATIONAL LABOR
RELATIONS
COMMISSION G.R.
NO. 72222 JANUARY
30, 1989

non-profit
organization
dedicated to
refugee service

Teacher

probationary cultural
orientation teacher with a
monthly salary of
P2,000.00

Probationary employee

A probationary employee, as understood under

Article 282 (now Article 281) of the Labor Code,
is one who is on trial by an employer during
which the employer determines whether or not
he is qualified for permanent employment. A
probationary appointment is made to afford the
employer an opportunity to observe the fitness of
a probationer while at work, and to ascertain
whether he will become a proper and efficient
employee. The word "probationary", as used to
describe the period of employment, implies the
purpose of the term or period, but not its length.
Being in the nature of a "trial period" the essence
of a probationary period of employment
fundamentally lies in the purpose or objective
sought to be attained by both the employer and
the employee during said period. The length of
time is immaterial in determining the correlative
rights of both in dealing with each other during
said period. While the employer, as stated
earlier, observes the fitness, propriety and
efficiency of a probationer to ascertain whether
he is qualified for permanent employment, the
probationer, on the other, seeks to prove to the
Page | 64

employer, that he has the qualifications to meet

the reasonable standards for permanent
employment.

STRIKE
Parties and case no.

What is the
business of the
employer, is the
issue in the strike is
of national interest?

What is the ground for strike? How was it

carried?

NATIONAL
FEDERATION OF
SUGAR WORKERS
VS. OVEREJA GR.
NO. 59743

Sugar plantation

NFSW strike is illegal. The NFSW declared the

strike six (6) days after filing a strike notice, i.e.,
before the lapse of the mandatory cooling-off
period. It also failed to file with the
MOLE beforelaunching the strike a report on the
strike-vote, when it should have filed such report
"at least seven (7) days before the intended strike."

Was it legal
or illegal

illegal

Final disposition

Art. 264, Strikes, picketing and lockouts. ...

(c) In cases of bargaining deadlocks, the certified or
duly recognized bargaining representative may file
a notice of strike with the Ministry (of Labor and
Employment) at least thirty (30) days before the
intended date thereof. In cases of unfair labor
practices, the period of notice shall be shortened
Page | 65

Under the circumstances, we are perforce

constrained to conclude that the strike staged by
petitioner is not in conformity with law. This
conclusion makes it unnecessary for us to
determine whether the pendency of an arbitration
case against CAC on the same issue of payment of
13th month pay [R.A.B No. 512-81, Regional
Arbitration Branch No. VI-A, NLRC, Bacolod
City, in which the National Congress of Unions in
the Sugar Industry of the Philippines (NACUSIP)
and a number of CAC workers are the
complainants, with NFSW as Intervenor seeking
the dismissal of the arbitration case as regards
unnamed CAC rank and file employees] has
rendered illegal the above strike under Art. 265 of
the Labor Code which provides:
It shall likewise be unlawful to declare a strike or
lockout after assumption of jurisdiction by the
President or the Minister, or after certification or
submission of the dispute to compulsory or
voluntary arbitration or during the pendency of
cases involving the same grounds for the strike or
lockou

tofifteen (15) days; ...

(d) During the cooling-off period, it shall be the
duty of the voluntary sttlement. Should the dispute
remain unsettled until the lapse of the requisite
number of days from the mandatory filing of the
notice, the labor union may strike or the employer
may declare a lockout.
(f) A decision to declae a strike must be approved
by at least two-thirds (2/3) of the total union
membership in the bargaining unit concerened by
secret ballots in meetings or referenda. A decision
to declae a lockout must be approved by at least
two-thirds (2/3) of the board of direcotrs of the
employer corporation or association or of the
partners in a partnership obtained by secret ballot in
a meeting called for the purpose. the decision shall
be valid for the duration of the dispute based on
substantially the same grounds considered when the
strike or lockout vote was taken . The Ministry,
may at its own intitiative or upon the request of any
affected party, supervise the conduct of the secret
balloting. In every case, the union of the employer
shall furnish the Ministry the results of the voting at
least seven (7) days before the intended strike or
lockout, subject to the cooling-off periodherein
provided. (Emphasis supplied).
ART. 265. Prohibited activities. It shall be
unlawful for any labor organization or employer to
declare a strike or lockout without first having
Page | 66

bargained collectively in accordance with Title VII

of this Book or without first having filed the notice
required in the preceding Article or without the
necessary strike or lockout vote first having been
obtained and reported to the Ministry.
It shall likewise be unlawful to declare a strike or
lockout after assumption of jurisdiction by the
President or the Minister or after certification or
submission of the dispute to compulsory or
voluntary arbitration or during the pendency of
cases involving the same grounds for the strike or
lockout. (Emphasis supplied.)
SAMAHAN NG
MANGGAGAWA NG
MOLDEX V. NLRC
G.R. NO. 119467.
FEBRUARY 1, 2000

Manufacturer of
Construction
materials

It has been shown that the results of the strike-vote

were never forwarded to the NCMB, as admitted
by petitioners themselves and as attested to by a
Certification of Non-Submission of Strike Vote
issued by the NCMB. There is thus no need for
additional evidence on the matter, as it would not
change the fact that the results of the strike-vote
were not submitted to the NCMB. Without the
submission of the results of the strike-vote, the
strike was illegal, pursuant to Article 264 of the
Labor Code, which reads: Lexjuris

Illegal

The records of the case and the proceedings before

the Labor Arbiter confirm that the strike was illegal
for failure to submit the strike vote to the NCMB
and due to the acts of violence, threats and coercion
committed during the strike. The requirements of
procedural due process were complied with as both
parties were allowed to present their witnesses and
evidence.

Page | 67

TELEFUNKEN
SEMICONDUCTORS
EMPLOYEES UNIONFFW VS., THE COURT
OF APPEALS, G.R.
NOS. 14301314. DECEMBER 18,
2000

Electronic s
company

Strike was pending resolution

illegal

A strike that has undertaken despite the issuance of

the secretary of Labor of an assumption or
certification order becomes a prohibited activity
and thus illegal and pursuant to article 264 of the
Labor Code

Page | 68

Hotel business
HOTEL
ENTERPRISES OF
THE PHILIPPINES,
INC.
(HEPI),
OWNER OF HYATT
REGENCY MANILA,
SAMAHAN NG MGA
MANGGAGAWA SA
HYATT-NATIONAL U
NION OF
WORKERS IN THE
HOTEL
AND
RESTAURANT AND
ALLIED
INDUSTRIES G.R.
NO. 165756
JUNE 5, 2009

COCA-COLA
Softdrinks
BOTTLERS PHILS.,
manufacturer
INC., PETITIONER,
VS. NATIONALLABOR
RELATIONS
COMMISSION G.R.
NO.

Respondent Union went on strike in the

honest belief that petitioner was committing ULP
after the latter decided to downsize its workforce
contrary to the staffing/manning standards adopted
by both parties under a CBA forged only four (4)
short months earlier. The belief was bolstered
when the management hired 100 contractual
workers to replace the 48 terminated regular rankand-file employees who were all Union
members Indeed,
those
circumstances
showed prima facie that the hotel committed ULP.
Thus, even if technically there was no legal ground
to stage a strike based on ULP, since the attendant
circumstances support the belief in good faith that
petitioners retrenchment scheme was structured to
weaken the bargaining power of the Union, the
strike, by exception, may be considered legal

illegal

failure of the striking union to observe and comply

with the seven-day mandatory strike ban

Illegal

Substantively, however, there appears to be

a problem. A valid and legal strike must be based
on strikeable grounds, because if it is based on a
non-strikeable ground, it is generally deemed an
illegal strike. Corollarily, a strike grounded on ULP
is illegal if no acts constituting ULP actually exist.
As an exception, even if no such acts are
committed by the employer, if the employees
believe in good faith that ULP actually exists, then
the strike held pursuant to such belief may be legal.
As a general rule, therefore, where a union believes
that an employer committed ULP and the
surrounding circumstances warranted such belief in
good faith, the resulting strike may be considered
legal although, subsequently, such allegations of
unfair labor practices were found to be groundless.
[64]

it bears stressing that the strike requirements

under Articles 264 and 265 of the Labor Code are
mandatory requisites, without which, the strike will
be considered illegal. The evident intention of the
law in requiring the strike notice and strike-vote
report as mandatory requirements is to reasonably
regulate the right to strike, which is essential to the
Page | 69

123491. NOVEMBER
27, 1998

attainment of legitimate policy objectives embodied

in the law. Verily, substantial compliance with a
mandatory provision will not suffice. Strict
adherence to the mandate of the law is required.
In fine, we hold that for failure of the striking
union to observe and comply with the seven-day
mandatory strike ban, the strike on April 20, 1987
was illegal.

A. SORIANO
AVIATION, VS.
EMPLOYEES
ASSOCIATION OF A.
SORIANO AVIATION
G.R. NO. 166879
AUGUST 14, 2009

Aviation company

Well-settled is the rule that

even if the strike were to be
declared valid because its objective
or purpose is lawful, the strike may
still be declared invalid where the
means
employed
are
illegal. Among such limits are the
prohibited
activities
under
Article 264 of the Labor Code,
particularly paragraph (e), which
states that no person engaged in
picketing shall:
a)
commit
any act of violence,
coercion,
or
intimidation or

illegal

Indeed, even if the purpose of a strike is valid,

the strike may still be held illegal where
the means employed are illegal. Thus, the
employment of violence, intimidation, restraint or
coercion in carrying out concerted activities which
are injurious to the right to property renders a strike
illegal. And so is picketing or the obstruction to the
free use of property or the comfortable enjoyment
of life or property, when accompanied by
intimidation, threats, violence, and coercion as to
constitute nuisance
The following acts have been held to be
prohibited activities: where the strikers shouted
slanderous and scurrilous words against the
owners of the vessels; where the strikers used
unnecessary and obscene language or epithets to
Page | 70

b)
obstruct the
free ingress to or
egress from the
employer's premises
for lawful purposes,
or
c)
obstruc
t
public
thoroughfares.

SUKHOTHAI CUISINE Restaurant

AND
RESTAURANT
VS.
COURT OF APPEALS
G.R. NO. 150437
JULY 17, 2006

The evidence in the record clearly and extensively

shows that the individual respondents engaged in
illegal acts during the strike, such as the
intimidation and harassment of a considerable
number of customers to turn them away and
discourage them from patronizing the business of
the petitioner; waving their arms and shouting at
the passersby, "Huwag kayong pumasok sa
Sukhothai!" and "Nilagyan na namin ng lason ang
pagkain d'yan!" as well as numerous other
statements made to discredit the reputation of the

Illegal

prevent other laborers to go to work, and

circulated libelous statements against the
employer which show actual malice; where
the protestors used abusive and threatening
language towards the patrons of a place of
business or against co-employees, going beyond
the mere attempt to persuade customers to
withdraw their patronage; where the strikers
formed a human cordon and blocked all the ways
and approaches to the launches and vessels of the
vicinity of the workplace and perpetrated acts of
violence and coercion to prevent work from being
performed; and where the strikers shook their
fists and threatened non-striking employees with
bodily harm if they persisted to proceed to the
workplace. Permissible activities of the
picketing workers do not include obstruction of
access of customers
Indeed, even if the purpose of a strike is valid,
the strike may still be held illegal where
the means employed are illegal. Thus, the
employment of violence, intimidation, restraint or
coercion in carrying out concerted activities which
are injurious to the right to property renders a strike
illegal. And so is picketing or the obstruction to the
free use of property or the comfortable enjoyment
of life or property, when accompanied by
intimidation, threats, violence, and coercion as to
constitute nuisance
Page | 71

BUKLURAN
NG
MANGGAGAWA
SA
CLOTHMAN
KNITTING
CORPORATION

SOLIDARITY
OF
UNIONS
IN
THE
PHILIPPINES
FOR
EMPOWERMENT
AND REFORMS (BMC-

establishment; preventing
the
entry
of
customers; angry and unruly behavior calculated to
cause commotion which affected neighboring
establishments within the mall; openly cursing and
shouting at the president in front of customers and
using loud and abusive language, such as "Putang
ina niyong lahat!", toward the rest of the
management as well as their co-workers who
refused to go on strike; physically preventing nonstrikers from entering the premises, as well as
deliberately blocking their movements inside the
restaurant, at times by sharply bumping into them
or through indecent physical contact; openly
threatening non-strikers with bodily harm, such as
"Pag hindi sila pumayag, upakan mo!"; and
shouting at the security guard "Granada!" which
caused panic among the customers and prompted
security to report a possible death threat to
management and the security agency
corporation engaged a)
The strikers/picketers did not conduct a
in knitting/textiles
strike vote and no cooling-off period was
observed;
b)
The strikers/picketers did not file a notice of
strike;
c)
The reasons for the strike/picket involve a
non-strikeable issue;
d)
The work slowdown/picket caused damages
to the petitioner in the sum of FIVE MILLION
PESOS (P5,000,000.00);

illegal
e petitioner union, its officers, members and
supporters staged a strike. In order for a strike to
be valid, the following requirements laid down in
paragraphs (c) and (f) of Article 263 of the Labor
Code must be complied with: (a) a notice of strike
must be filed; (b) a strike-vote must be taken; and
(c) the results of the strike-vote must be reported to
the DOLE. It bears stressing that these
requirements are mandatory, meaning, nonPage | 72

SUPER) VS. COURT

OF APPEALS G.R. NO.
158158. JANUARY 17,
2005

e)
The illegal acts of respondents constrained
petitioner to seek the services of undersigned
counsel for an attorneys fee of P50,000.00
and P2,000.00 per appearance

compliance therewith makes the strike illegal. The

evident intention of the law in requiring the strike
notice and strike-vote report is to reasonably
regulate the right to strike, which is essential to the
attainment of legitimate policy objectives embodied
in the law
Considering that the petitioner union failed to
comply with the aforesaid requirements, the strike
staged on June 11 to 18, 2001 is illegal.
Consequently, the officers of the union who
participated therein are deemed to have lost their
employment status.

FAR EASTERN
UNIVERSITY - DR.
NICANOR REYES
MEDICAL
FOUNDATION (FEUNRMF)
VS, FEU-NRMF
EMPLOYEES
ASSOCIATIONALLIANCE OF
FILIPINO WORKERS

medical institution

Further, the said strike was conducted in a

deleterious and prejudicial manner, endangering
the lives of the patients confined at the hospital. In
its complaint docketed as NLRC-NCR No. 10-110733-96, petitioner FEU-NRMF specifically
alleged that the striking employees effectively
barricaded the ingress and egress of the hospital,
thus, preventing trucks carrying the supplies of
medicines and food for the patients from entering
the hospitals premises. In one instance, an
ambulance carrying a patient in critical condition
was likewise prevented from passing through the
blockade

legal

For a strike to be valid, the following

requisites must concur: (1) the thirty-day notice or
the fifteen-day notice, in case of unfair labor
practices; (2) the two-thirds (2/3) required vote to
strike done by secret ballot; and (3) the submission
of the strike vote to the Department of Labor and
Employment at least seven days prior to the
strike In addition, in case of strikes in hospitals,
clinics and medical institutions, it shall be the duty
of the striking employees to provide and maintain
an effective and skeletal workforce of medical and
other health personnel in order to insure the proper
Page | 73

and adequate protection of the life and health of its

patients.[29] These procedural requirements, along
with the mandatory cooling off and strike ban
periods had been fully observed by the respondent
union.
It is true that the strike may still be
declared
invalid
where
the
means
employed are illegal even if the procedural
requisites before staging a strike were
satisfied. [ 3 0 ] However, in the absence of
evidence to support the allegations that the
respondent union did not commit illegal
acts during the strike, we are constrained
to dismiss the allegations and uphold the
strike as a valid exercise of the worker s
constitutional right to self-organization
and collective bargaining.
The affidavits presented by the
petitioner FEU-NRMF and relied upon by
the Labor Arbiter and the NLRC, in
arriving at the conclusion that the
respondent union committed illegal acts
during the strike, could not be given
Page | 74

probative value by this Court as the

adverse party was not given a chance to
cross-examine the affiants. In a catena of
labor cases, this Court has consistently
held that where the adverse party is
deprived of the opportunity to crossexamine the affiants, affidavits are
generally rejected for being hearsay,
unless the affiants themselves are placed
on
the
witness
stand
to
testify
thereon. Neither can this Court rely on the
photographs supporting these allegations
without verifying its authenticity.
NATIONAL UNION OF
WORKERS IN THE
HOTEL RESTAURANT
AND ALLIED
INDUSTRIES
(NUWHRAIN-APLIUF) DUSIT HOTEL
NIKKO CHAPTER
VS. SECRETARY OF
LABOR AND
EMPLOYMENT G.R.
NO. 163942
NOVEMBER 11, 2008

Hotel business

The NLRC explained that the strike which

occurred on January 18, 2002 was illegal because
it failed to comply with the mandatory 30-day
cooling-off period and the seven-day strike
ban as the strike occurred only 29 days after the
submission of the notice of strike on December 20,
2001 and only four days after the submission of
the strike vote on January 14, 2002. The NLRC
also ruled that even if the Union had complied
with the temporal requirements mandated by law,
the strike would nonetheless be declared illegal
because it was attended by illegal acts committed
by the Union officers and members

Legal

The Union maintains that the mass picket

conducted by its officers and members did not
constitute a strike and was merely an expression of
their grievance resulting from the lockout effected
by the Hotel management. On the other hand, the
Hotel argues that the Unions deliberate defiance of
the company rules and regulations was a concerted
effort to paralyze the operations of the Hotel, as the
Union officers and members knew pretty well that
they would not be allowed to work in their bald or
cropped hair style. For this reason, the Hotel argues
that the Union committed an illegal strike on
Page | 75

January 18, 2002 and on January 26, 2002.

We rule for the Hotel.
UNIVERSITY OF SAN
AGUSTIN, INC.
UNIVERSITY OF SAN
AGUSTIN, INC. THE
COURT OF APPEALS
G.R. NO. 169632
MARCH 28, 2006

is a non-stock, nonprofit educational

institution which
offers both basic and
higher education
courses

Legal

In this case, the AJO was served at 8:45 a.m. of

September 19, 2003. The strikers then should have
returned to work immediately. However, they
persisted with their refusal to receive the AJO and
waited for their union president to receive the same
at 5:25 p.m. The Unions defiance of the AJO was
evident in the sheriffs report:
We went back to the main gate of the University
and there NCMB Director Dadivas introduced us to
the Union lawyer, Atty. Mae Lacerna a former
DOLE Regional Director. Atty. Lacerna however
refused to be officially served the Order again
pointing to Board Resolution No. 3 passed by the
Union officers. Atty. Lacerna then informed the
undersigned Sheriffs that the Union president will
accept the Order at around 5:00 oclock in the
afternoon. Atty. Lacerna told the undersigned
Sheriff that only when the Union president receives
the Order at 5:00 p.m. shall the Union recognize the
Secretary of Labor as having assumed jurisdiction
over the labor dispute.
Thus, we see no reversible error in the CAs finding
that the strike of September 19, 2003 was illegal.
Consequently, the Union officers were deemed to
have lost their employment status for having
Page | 76

knowingly participated in said illegal act.

VOLUNTARY ARBITRATION
Parties and case no.
ALBERTO S. SILVA
VS. NATIONAL
LABOR
RELATIONS
COMMISSIONG.R.
NO. 110226. JUNE
19, 1997

Facts of case
Sometime in 1985, petitioners, then rank-andfile employees and members of Philtread Workers
Union (PWU), volunteered for, and availed of, the
retrenchment program instituted by Philtread with
the understanding that they would have priority in
re-employment in the event that the company
recovers from its financial crisis, in accordance
with Section 4, Article III of the Collective
Bargaining Agreement concluded on July 5, 1983.
[2]

In November 1986, Philtread, apparently

having recovered from its financial reverses,
expanded its operations and hired new
personnel. Upon discovery of this development,
petitioners filed their respective applications for

Which office has jurisdiction

Labor arbiter

Final disposition
We do not find any reason why the Court
should not apply the above ruling to the case at
bar, notwithstanding the fact that a different law is
involved. Actually, this is not the first time that
the Court refused to apply RA 6715 retroactively.
[16]
Our previous decisions on whether to give it
retroactive application or not depended to a great
extent on what amended provisions were under
consideration, as well as the factual circumstances
to which they were made to apply. In Briad, the
underlying reason for applying RA 6715
retroactively was the fact that prior to its
amendment, Article 217 of the Labor Code, as
amended by then Executive Order No. 111,
created a scenario where the Labor Arbiters and
the Regional Directors of the Department of
Page | 77

employment with Philtread, which however,

merely agreed to consider them for future
vacancies. Subsequent
demands
for
reemployment made by petitioners were
ignored. Even the request of the incumbent union
for Philtread to stop hiring new personnel until
petitioners were first hired failed to elicit any
favorable response.
Thus, on December 5, 1988, petitioners
lodged a complaint[3] with the National Capital
Region Arbitration Branch of the NLRC for unfair
labor practice (ULP), damages and attorneys fees
against Philtread.
Both parties submitted their respective
position papers. On its part, Philtread moved for
the dismissal of the complaint based on two
grounds, namely: (1) that the NLRC lacked
jurisdiction, there being no employer-employee
relationship between it and petitioners and that the
basic issue involved was the interpretation of a
contract, the CBA, which was cognizable by the
regular courts; and (2) that petitioners had
no locus standi, not being privy to the CBA
executed between the union and Philtread.
Petitioners, however, challenging Philtreads

Labor and Employment (DOLE) had overlapping

jurisdiction over money claims. This situation
was viewed as a defect in the law so that when RA
No. 6715 was passed and delineated the
jurisdiction of the Labor Arbiters and Regional
Directors, the Court deemed it a rectification of
such defect; hence, the conclusion that it was
curative in nature and, therefore, must be applied
retroactively.
The same thing cannot be said of the case at
bar. Like in Erectors, the instant case presents no
defect in the law requiring a remedy insofar as the
jurisdiction of the Labor Arbiter and the Voluntary
Arbitrator is concerned. There is here no
overlapping of jurisdiction to speak of because
matters
involving
interpretation
and
implementation of CBA provisions, as well as
interpretation and enforcement of company
personnel policies, have always been determined
by the Voluntary Arbitrator even prior to RA
6715. Similarly, all ULP cases were exclusively
within the jurisdiction of the Labor Arbiter. What
RA 6715 merely did was to re-apportion the
jurisdiction over ULP cases by conferring
exclusive jurisdiction over such ULP cases that do
not involve gross violation of a CBAs economic
provision upon the voluntary arbitrator. We do
Page | 78

motion to dismiss, stressed that the complaint was

one for unfair labor practice precipitated by the
unjust and unreasonable refusal of Philtread to reemploy them, as mandated by the provisions of
Section 4, Article III of the 1986 and 1983
CBAs. Being one for unfair labor practice,
petitioners concluded that the NLRC had
jurisdiction over the case, pursuant to Article 217
(a) (1) of the Labor Code.

not see anything in the act of re-apportioning

jurisdiction curative of any defect in the law as it
stood prior to the enactment of RA 6715. The
Court view it as merely a matter of change in
policy of the lawmakers, especially since the 1987
Constitution adheres to the preferential use of
voluntary modes of dispute settlement, This,
instead of the inherent defect in the law, must be
the
rationale
that
prompted
the
amendment. Hence, we uphold the jurisdiction of
the Labor Arbiter which attached to this case at
the time of its filing on December 5, 1988

On August 31, 1989, Labor Arbiter Edgardo

M. Madriaga rendered a decision dismissing the
complaint but directing Philtread to give
petitioners priority in hiring, as well as those
former employees similarly situated for available
positions provided they meet the necessary current
qualifications.[4] In dismissing the complaint, the
Labor Arbiter, however, did not tackle the
jurisdictional issue posed by Philtread in its
position paper. Instead, he dwelt solely on the
question whether the petitioners were entitled to
priority in re-employment on the basis of the CBA

MIGUELA
From 1992 to 1994, due to a serious
SANTUYO vs.
industrial dispute, the Kaisahan ng Manggagawa
REMERCO
sa Remerco Garments Manufacturing Inc. - KMM
GARMENTS
Kilusan (union) staged a strike against respondent
MANUFACTURING

Secretary of Labor

Pursuant to Articles 217 in relation to

Articles 260 and 261 of the Labor Code, the labor
arbiter should have referred the matter to the
grievance machinery provided in the CBA.
Page | 79

, INC G.R. No.

174420 : March 22,
2010

Remerco Garments Manufacturing, Inc. (RGMI).

Because the strike was subsequently declared
illegal, all union officers were dismissed.
Employees who wanted to sever their employment
were paid separation pay while those who wanted
to resume work were recalled on the condition
that they would no longer be paid a daily rate but
on a piece-rate basis. Without allowing RGMI to
normalize its operations, the union filed a notice
of strike in the National Conciliation and
Mediation Board (NCMB) on August 8,
1995.According to the union, RGMI conducted a
time and motion study and changed the salary
scheme from a daily rate to piece-rate basis
without consulting it. RGMI therefore not only
violated the existing collective bargaining
agreement (CBA) but also diminished the salaries
agreed upon. It therefore committed an unfair
labor practice. On August 24, 1995, RGMI filed a
notice of lockout in the NCMB. While the union
and RGMI were undergoing conciliation in the
NCMB, RGMI transferred its factory site. The
union went on strike and blocked the entry to
RGMIs (new) premises. The Secretary of Labor
assumed jurisdiction pursuant to Article 263(g) of
the Labor Code and ordered RGMIs striking
workers to return to work immediately. He
likewise ordered the union and RGMI to submit
their respective position papers.

Because the labor arbiter clearly did not have

jurisdiction over the subject matter, his decision
was void.
Nonetheless, the Secretary of the Labor
assumed jurisdiction over the labor dispute
between the union and RGMI and resolved the
same in his September 18, 1996 order. Article
263(g) of the Labor Code gives the Secretary of
Labor discretion to assume jurisdiction over a
labor dispute likely to cause a strike or a lockout
in an industry indispensable to the national
interest and to decide the controversy or to refer
the same to the NLRC for compulsory arbitration.
In doing so, the Secretary of Labor shall resolve
all questions and controversies in order to settle
the dispute. His power is therefore plenary and
discretionary in nature to enable him to effectively
and efficiently dispose of the issue.
The Secretary of Labor assumed
jurisdiction over the controversy because RGMI
had a substantial number of employees and was a
major exporter of garments to the United States
and Canada. In view of these considerations, the
Secretary of Labor resolved the labor dispute
between the union and RGMI in his September
18, 1996 order. Since neither the union nor RGMI
appealed the said order, it became final and
Page | 80

executory.
Petitioners insist that the labor arbiter had
jurisdiction inasmuch as the complaint was for
illegal dismissal. Furthermore, they claim that the
September 18, 1996 order of the Secretary of
Labor was inapplicable to them. Despite being
members of the union, they were not among those
who went on strike.

Settled is the rule that unions are the agent

of its members for the purpose of securing just
and fair wages and good working conditions.
Since petitioners were part of the bargaining unit
represented by the union and members thereof, the
September 18, 1996 order of the Secretary of
Labor applies to them.
Furthermore, since the union was the
bargaining agent of petitioners, the complaint was
barred under the principle of conclusiveness of
judgments. The parties to a case are bound by the
findings in a previous judgment with respect to
matters actually raised and adjudged therein.
Hence, the labor arbiter should have dismissed the
complaint on the ground of res judicata.
WHEREFORE, the petition is hereby DENIED.

UNION OF NESTLE
WORKERS
CAGAYAN DE ORO
FACTORY vs
NESTLE
PHILIPPINES INC.
G.R. No. 148303.
October 17, 2002

On August 1, 1999, Nestle Philippines,

Inc. (Nestle) adopted Policy No. HRM 1.8,
otherwise known as the Drug Abuse Policy.
Pursuant to this policy, the management shall
conduct simultaneous drug tests on all employees
from different factories and plants. Thus, on
August 17, 1999, drug testing commenced at the
Lipa City factory, and then followed by the other

Voluntary Arbitrator

It is indubitable from the foregoing

allegations that petitioners are not per se
questioning whether or not the person will
undergo the drug test or the constitutionality or
legality of the Drug Abuse Policy. They are
assailing the manner by which respondents are
implementing the policy. According to them, it is
arbitrary in character because:
(1) the
Page | 81

factories and plants.

However, there was resistance to the
policy in the Nestle Cagayan de Oro factory. Out
of 496 employees, only 141 or 28.43% submitted
themselves to drug testing. On August 20, 1999,
the Union of Nestle Workers Cagayan de Oro
Factory and its officers, petitioners, wrote Nestle
challenging the implementation of the policy and
branding it as a mere subterfuge to defeat the
employees constitutional rights. Nestle claimed
that the policy is in keeping with the governments
thrust to eradicate the proliferation of drug abuse,
explaining that the company has the right: (a) to
ensure that its employees are of sound physical
and mental health and (b) to terminate the services
of an employee who refuses to undergo the drug
test.

employees were not consulted prior to its

implementation; (2) the policy is punitive
inasmuch as an employee who refuses to abide
with the policy may be dismissed from the
service; and (3) such implementation is subject to
limitations provided by law which were
disregarded by the management.
Company personnel policies are guiding
principles stated in broad, long-range terms that
express the philosophy or beliefs of an
organizations top authority regarding personnel
matters.
They deal with matter affecting
efficiency and well-being of employees and
include, among others, the procedure in the
administration of wages, benefits, promotions,
transfer and other personnel movements which are
usually not spelled out in the collective
agreement.
Considering that the Drug Abuse Policy is
a company personnel policy, it is the Voluntary
Arbitrators or Panel of Voluntary Arbitrators, not
the RTC, which exercises jurisdiction over this
case.
Art. 261.
Jurisdiction of Voluntary
Arbitrators or Panel of Voluntary Arbitrators.
The Voluntary Arbitrator or panel of Voluntary
Page | 82

MANEJA VS .
NLRC G.R. No.
124013. June 5, 1998

Petitioner Rosario Maneja worked with

private respondent Manila Midtown Hotel
beginning January, 1985 as a telephone operator.
She was a member of the National Union of
Workers in Hotels, Restaurants and Allied
Industries (NUWHRAIN) with an existing
Collective Bargaining Agreement (CBA) with
private respondent.
In the afternoon of February 13, 1990, a
fellow telephone operator, Rowena Loleng
received a Request for Long Distance Call
(RLDC) form and a deposit of P500.00 from a
page boy of the hotel for a call by a Japanese
guest named Hirota Ieda.
The call was
unanswered. The P500.00 deposit was forwarded
to the cashier. In the evening, Ieda again made an
RLDC and the page boy collected another
P500.00 which was also given to the operator
Loleng. The second call was also unanswered.
Loleng passed on the RLDC to petitioner for
follow-up. Petitioner monitored the call.

Labor Arbiter

Arbitrators shall have original and exclusive

jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the Collective Bargaining
Agreement and those arising from the
interpretation or enforcement of company
personnel policies
As we ruled in Sanyo, Since there has
been an actual termination, the matter falls within
the jurisdiction of the Labor Arbiter. The
aforequoted doctrine is applicable foursquare in
petitioners case. The dismissal of the petitioner
does not call for the interpretation or enforcement
of company personnel policies but is a termination
dispute which comes under the jurisdiction of the
Labor Arbiter.
It should be explained that company
personnel policies are guiding principles stated in
broad, long-range terms that express the
philosophy or beliefs of an organizations top
authority regarding personnel matters. They deal
with matters affecting efficiency and well-being
of employees and include, among others, the
procedure in the administration of wages, benefits,
promotions, transfer and other personnel
movements which are usually not spelled out in
the collective agreement. The usual source of
grievances, however, are the rules and regulations
Page | 83

governing disciplinary actions.

On February 15, 1990, a hotel cashier
inquired about the P1,000.00 deposit made by
Ieda. After a search, Loleng found the first
deposit of P500.00 inserted in the guest folio
while the second deposit was eventually
discovered inside the folder for cancelled calls
with deposit and official receipts.
When petitioner saw that the second
RLDC form was not time-stamped, she
immediately placed it inside the machine which
stamped the date February 15, 1990. Realizing
that the RLDC was filed 2 days earlier, she wrote
and changed the date to February 13, 1990.
Loleng then delivered the RLDC and the money
to the cashier. The second deposit of P500.00 by
Ieda was later returned to him.

The case of Pantranco North Express, Inc.

vs. NLRC[21] sheds further light on the issue of
jurisdiction where the Court cited the Sanyo case
and quoted the decision of therein Labor Arbiter
Olairez in this manner:
In our honest opinion we have
jurisdiction over the complaint on the following
grounds:

On March 7, 1990, the chief telephone

operator issued a memorandum to petitioner and
Loleng directing the two to explain the February
15 incident. Petitioner and Loleng thereafter
submitted their written explanation.[4]

First, this is a complaint of illegal

dismissal of which original and exclusive
jurisdiction under Article 217 has been conferred
to the Labor Arbiters. The interpretation of the
CBA or enforcement of the company policy is
only corollary to the complaint of illegal
dismissal. Otherwise, an employee who was on
AWOL, or who committed offenses contrary to
the personnel policies (sic) can no longer file a
case of illegal dismissal because the discharge is
premised on the interpretation or enforcement of
the company policies.

On March 20, 1990,

was submitted by the chief
with the recommendation
committed by the operators

Second. Respondent voluntarily submitted

the case to the jurisdiction of this labor tribunal.
It adduced arguments to the legality of its act,
whether such act may be retirement and/or

a written report[5]
telephone operator,
that the offenses
concerned covered

Page | 84

violations of the Offenses Subject to Disciplinary

Actions (OSDA): (1) OSDA 2.01: forging,
falsifying official document(s), and (2) OSDA
1.11: culpable carelessness - negligence or failure
to follow specific instruction(s) or established
procedure(s).

dismissal, and prayed for reliefs on the merits of

the case. A litigant cannot pray for reliefs on the
merits and at the same time attacks (sic) the
jurisdiction of the tribunal. A person cannot have
ones cake and eat it too.
As to the second ground, petitioner
correctly points out that respondent NLRC should
have ruled that private respondent is estopped by
laches in questioning the jurisdiction of the Labor
Arbiter.
Clearly, estoppel lies. The issue of
jurisdiction was mooted by herein private
respondents active participation in the
proceedings below. In Marquez vs. Secretary of
Labor, the Court said:

VICENTE SAN
JOSE vs.

Before the Court is a Petition for Certiorari

seeking to annul a Decision of the National Labor

Voluntary Arbitrator

The active participation of the party

against whom the action was brought, coupled
with his failure to object to the jurisdiction of the
court or quasi-judicial body where the action is
pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the
resolution of the case and will bar said party from
later on impugning the court or bodys
jurisdiction.
It must be emphasized that the jurisdiction
of the Voluntary Arbitrator or Panel of Voluntary
Page | 85

NATIONAL LABOR
RELATIONS
COMMISSION G.R.
No. 121227. August
17, 1998

Relations Commission dated April 20, 1995 in

NLRC-NCR-CA-No. 00671-94 which reversed,
on jurisdictional ground, a Decision of the Labor
Arbiter dated January 19, 1994. A case for a
money claim - underpayment of retirement
benefit. Complainant, in his position paper states
that he was hired sometime in July 1980 as a
stevedore continuously until he was advised in
April 1991 to retire from service considering that
he already reached 65 years old; that accordingly,
he did apply for retirement and was paid
P3,156.39 for retirement pay.
The Labor Arbiter decided the case solely
on the merits of the complaint. Nowhere in the
Decision is made mention of or reference to the
issue of jurisdiction of the Labor Arbiter (Rollo,
pp. 15-17). But the issue of jurisdiction is the
bedrock of the Petition because, as earlier
intimated, the Decision of the National Labor
Relations Commission, herein below quoted,
reversed the Labor Arbiters Decision on the issue
of jurisdiction.

Arbitrators under Article 262 must be voluntarily

conferred upon by both labor and management.
The labor disputes referred to in the same Article
262 can include all those disputes mentioned in
Article 217 over which the Labor Arbiter has
original and exclusive jurisdiction.
As shown in the above contextual and
wholistic analysis of Articles 217, 261, and 262 of
the Labor Code, the National Labor Relations
Commission correctly ruled that the Labor Arbiter
had no jurisdiction to hear and decide petitioners
money-claim underpayment of retirement
benefits, as the controversy between the parties
involved an issue arising from the interpretation
or implementation of a provision of the collective
bargaining agreement. The Voluntary Arbitrator or
Panel of Voluntary Arbitrators has original and
exclusive jurisdiction over the controversy under
Article 261 of the Labor Code, and not the Labor
Arbiter.

In their reply, it was stated that that

complainants latest basic salary was P120.34 per
day; that he only worked on rotation basis and not
seven days a week due to numerous stevedores
who cannot all be given assignments at the same
Page | 86

time; that all stevedores only for paid every time

they were assigned or actually performed
stevedoring; that the computation used in arriving
at the amount of P3,156.30 was the same
computation applied to the other stevedores; that
the use of divisor 303 is not applicable because
complainant performed stevedoring job only on
call, so while he was connected with the company
for the past 11 years, he did not actually render 11
years of service; that the burden of proving that
complainants latest salary was P200.00 rests upon
him; that he already voluntarily signed a waiver of
quitclaim; that if indeed respondent took
advantage of his illiteracy into signing his
quitclaim, he would have immediately filed this
complaint but nay, for it took him two (2) years to
do so.

Page | 87

UNFAIR LABOR PRACTICE

Parties and case no.

Is there ULP? What are the acts constitutes ULP

GENERAL SANTOS COCANone. Contracting out services regularly performed by

COLA PLANT FREE
union members (union busting).
WORKERS UNION-TUPAS
VS. V COCA-COLA
BOTTLERS PHILS., INC.
(GENERALSANTOS CITY)
G.R. NO. 178647
FEBRUARY 13, 2009

Final disposition
It is true that the NLRC erroneously concluded that the
contracting- out of jobs in CCBPI Gen San was due to the GTM
system, which actually affected CCBPIs sales and marketing
departments, and had nothing to do with petitioners complaint.
However, this does not diminish the NLRCs finding that JLBP was a
legitimate, independent contractor and that CCBPI Gen San engaged
the services of JLBP to meet business exigencies created by the
freeze-hiring directive of the CCBPI Head Office.
On the other hand, the CA squarely addressed the issue of job
contracting in its assailed Decision and Resolution. The CA itself
examined the facts and evidence of the parties and found that, based
on the evidence; CCBPI did not engage in labor-only contracting and,
therefore, was not guilty of unfair labor practice.
The NLRC found and the same was sustained by the CA
Page | 88

that the companys action to contract-out the services and functions

performed by Union members did not constitute unfair labor practice
as this was not directed at the members right to self-organization.
Unfair labor practice refers to "acts that violate the workers
right to organize." The prohibited acts are related to the workers
right to self-organization and to the observance of a CBA. Without
that element, the acts, even if unfair, are not unfair labor practices.
EMPLOYEES UNION OF
Yes. Non remittance of union dues. Organization of a
When an employer proceeds to negotiate with a splinter union
BAYER PHILS. VS. BAYER
company union, gross violation of the CBA and the violation of
despite the existence of its valid CBA with the duly certified and
PHILIPPINES, INC. G.R.
the duty to bargain.
exclusive bargaining agent, the former indubitably abandons its
NO. 162943 DECEMBER 6,
recognition of the latter and terminates the entire CBA. Respondents
2010
cannot claim good faith to justify their acts. They knew that
Facundos group represented the duly-elected officers of EUBP.
Moreover, they were cognizant of the fact that even the DOLE
Secretary himself had recognized the legitimacy of EUBPs mandate
by rendering an arbitral award ordering the signing of the 1997-2001
CBA between Bayer and EUBP. Respondents were likewise wellaware of the pendency of the intra-union dispute case, yet they still
proceeded to turn over the collected union dues to REUBP and to
effusively deal with Remigio. The totality of respondents conduct,
therefore, reeks with anti-EUBP animus.
LAKAS NG
None. Failure of the employer to reinstate the workers or
We find as a fact that the respondent Marcelo Companies did
MANGGAGAWANG
or refuse re-employment of members of union who abandon their not refuse to reinstate or re-employ the strikers, as a consequence of
MAKABAYAN VS.
strike and make unconditional offer to return to work.
which We overrule the finding of unfair labor practice against said
MARCELO ENTERPRISES
companies based on the erroneous conclusion ) If the respondent
AND MARCELO TIRE &
court. It is clear from the records that even before the unconditional
RUBBER CORP G.R. NO. Loffer to return to work contained in Exhibit "B" was made, the
38258 NOVEMBER 19, 1982
respondent Marcelo Companies had already posted notices for the
Page | 89

strikers to return back to work.

COLEGIO DE SAN JUAN

DE LETRAN
VS. ASSOCIATION OF
EMPLOYEES AND
FACULTY OF LETRAN
G.R. NO.

Yes. Violation of the duty to bargain collectively by

unilaterally suspending the ongoing negotiation for the CBA ,
termination of the union president.

It is true that upon their return, the strikers were required to

fill up a form wherein they were to indicate the date of their
availability for work. But We are more impressed and are persuaded
to accept as true the contention of the respondent Marcelo Companies
that the aforestated requirement was only for purposes of proper
scheduling of the start of work for each returning striker. It must be
noted that as a consequence of the two strikes which were both
attended by widespread acts of violence and vandalism, the
businesses of the respondent companies were completely paralyzed.
It would hardly be justiciable to demand of the respondent companies
to readmit all the returning workers in one big force or as each
demanded readmission. There were machines that were not in
operating condition because of long disuse during the strikes. Some
of the machines needed more than one worker to operate them so that
in the absence of the needed team of workers, the start of work by
one without his teammates would necessarily be useless, and the
company would be paying for his time spent doing no work. Finally,
We take judicial cognizance of the fact that companies whose
businesses were completely paralyzed by major strikes cannot
resume operations at once and in the same state or force as before the
strikes.
As we have held in the case of Kiok Loy vs. NLRC, the
company's refusal to make counter-proposal to the union's proposed
CBA is an indication of its bad faith. Where the employer did not
even bother to submit an answer to the bargaining proposals of the
union, there is a clear evasion of the duty to bargain collectively. In
the case at bar, petitioner's actuation show a lack of sincere desire to
Page | 90

141471. SEPTEMBER 18,

2000

negotiate rendering it guilty of unfair labor practice.

Admittedly, management has the prerogative to discipline its
employees for insubordination. But when the exercise of such
management right tends to interfere with the employees' right to selforganization, it amounts to union-busting and is therefore a
prohibited act. The dismissal of Ms. Ambas was clearly designed to
frustrate the Union in its desire to forge a new CBA with the College
that is reflective of the true wishes and aspirations of the Union
members. Her dismissal was merely a subterfuge to get rid of her,
which smacks of a pre-conceived plan to oust her from the premises
of the College. It has the effect of busting the Union, stripping it of
its strong-willed leadership. When management refused to treat the
charge of insubordination as a grievance within the scope of the
Grievance Machinery, the action of the College in finally dismissing
her from the service became arbitrary, capricious and whimsical, and
therefore violated Ms. Ambas' right to due process.

ST. JOHN COLLEGES, INC

VS.
ST. JOHN ACADEMY

In this regard, we find no cogent reason to disturb the findings

of the Court of Appeals affirming the findings of the Secretary of
Labor and Employment. The right to self-organization of employees
must not be interfered with by the employer on the pretext of
exercising management prerogative of disciplining its employees. In
this case, the totality of conduct of the employer shows an evident
attempt to restrain the employees from fully exercising their rights
under the law. This cannot be done under the Labor Code.
Yes. Unilaterally end the bargaining deadlock; to render
When SJCI reopened its high school, it did not rehire the
nugatory any decision of the SOLE; and to circumvent the Union members. Evidently, the closure had achieved its purpose, that
Unions right to collective bargaining and its members right to is, to get rid of the Union members.
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FACULTY AND
EMPLOYEES UNION G.R.
NO. 167892
OCTOBER 27, 2006

BALMAR FARMS, INC VS.

NATIONAL LABOR
RELATIONS
COMMISSION G.R. NO.
73504 OCTOBER 15, 1991

security of tenure. By admitting that the closure was due to

irreconcilable differences between the Union and school
Clearly, these pieces of evidence regarding the subsequent
management, specifically, the financial aspect of the ongoing CBA reopening of the high school after only one year from its closure
negotiations. SJCI in effect admitted that it wanted to end the further show that the high schools closure was done in bad faith.
bargaining deadlock and eliminate the problem of dealing with the
demands of the Union.
Lastly, SJCI asserts that the strike conducted by the 25
employees on May 4, 1998 was illegal for failure to take the
necessary strike vote and give a notice of strike. However, we agree
with the findings of the NLRC and CA that the protest actions of the
Union cannot be considered a strike because, by then, the employeremployee relationship has long ceased to exist because of the
previous closure of the high school on March 31, 1998.

Yes. Refusal to bargain collectively

In sum, the timing of, and the reasons for the closure of the
high school and its reopening after only one year from the time it was
closed down, show that the closure was done in bad faith for the
purpose of circumventing the Unions right to collective bargaining
and its members right to security of tenure. Consequently, SJCI is
liable for ULP and illegal dismissal.
The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement with respect
to wages, hours of work and all other terms and conditions or
employment including proposals for adjusting any grievance or
questions arising under such agreement if requested by either party
but such duty does not compel any party to agree to a proposal or to
make any concession (Art. 252, Labor Code, as amended).
Procedurally, ALU sent a letter to BALMAR, attaching
therewith its proposals for collective bargaining agreement. In reply,
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BALMAR refused to negotiate with ALU allegedly because` it

received a copy of a letter purportedly written on November 12, 1982
by one Johnny Luces, who claimed to be the president of Balmar
Farms Employees Association, informing the Labor Regional
Director that more than a majority of them would like to negotiate
directly with their employer BALMAR. There is no showing,
however, that said letter was favorably acted upon, much less, is there
an order superseding the Med-Arbiter's order of October 27, 1982
certifying ALU as the sole and exclusive bargaining representative of
the rank and file workerks of BALMAR
BALMAR cannot also invoke good faith in refusing to
negotiate with ALU, considering that the latter has been certified as
the exclusive bargaining representative of BALMAR rank and file
employees. As observed by the Solicitor General, BALMAR'S
pretense that majority of its rank and file employees disaffiliated
simply because of a letter it received to that effect, all the more
sustains the finding of bad faith for it is not for the petitioner
BALMAR to question which group is the collective bargaining
representative of its rank and file employees.
Balmar's taking side with the rank and file employees who
allegedly disaffiliated, renders its stand on the matter highly
suspicious. It can, therefore, be inferred that BALMAR's refusal to
bargain collectively with ALU is a clear act of unfair labor practice.
COMPLEX ELECTRONICS
EMPLOYEES
ASSOCIATION VS. THE
NATIONAL LABOR
RELATIONS

None. the machinery, equipment and materials being used

for production at Complex were pulled-out from the company
premises and transferred to the premises of Ionics Circuit, Inc.
(Ionics) at Cabuyao, Laguna and a a total closure of company
operation was effected at Complex.

By and large, we cannot hold respondents guilty of

unfair labor practice as found by the Labor Arbiter since the
closure of operation of Complex was not established by
strong evidence that the purpose of said closure was to
interfere with the employees' right to self-organization and
collective bargaining.
As very clearly established, the
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COMMISSION G.R. NO.

122136 JULY 19, 1999

NUEVA ECIJA I ELECTRIC

Yes. Promotion of Union Officers to Supervisory ranks and
COOPERATIVE,
INC they were considered as harassment threatening the union
VS. NATIONAL
LABOR members, and circumventing the employees security of tenure.
RELATIONS
COMMISSION
G.R. NO. 116066. JANUARY
24, 2000

closure was triggered by the customers' pull-out of their

equipment, machinery and materials, who were alarmed by
the pending labor dispute and the imminent strike by the
union, and as a protection to their interest pulled-out of
business from Complex who had no recourse but to cease
operation to prevent further losses.
The indiscretion
committed by the Union in filing the notice of strike, which
to our mind is not the proper remedy to question the
amount of benefits due the complainants who will be
retrenched at the closure of the Lite-On Line, gave a wrong
signal to customers of Complex, which consequently
resulted in the loss of employment of not only a few but to
all the of the workers. It may be worth saying that the right
to strike should only be a remedy of last resort and must not
be used as a show of force against the employer
Unfair labor practices violate the constitutional rights
of workers and employees to self-organization, are inimical
to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and
mutual respect; and disrupt industrial peace and hinder the
promotion of healthy and stable labor-management
relations. As the conscience of the government, it is the
Courts sworn duty to ensure that none trifles with labor
rights.
For this reason, we find it proper in this case to
impose moral and exemplary damages on private
respondent. However, the damages awarded by the labor
arbiter, to our mind, are excessive. In determining the
amount of damages recoverable, the business, social and
financial position of the offended parties and the business
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and financial position of the offender are taken into account.

It is our view that herein private respondents had not fully

acted in good faith. However, we are cognizant that a cooperative
promotes the welfare of its own members. The economic benefits
filter to the cooperative members. Either equally or proportionally,
they are distributed among members in correlation with the resources
of the association utilized. Cooperatives help promote economic
democracy and support community development. Under these
circumstances, we deem it proper to reduce moral damages to only
P10,000.00 payable by private respondent NEECO I to each
individual petitioner. We also deem it sufficient for private
respondent NEECO I to pay each individual petitioner P5,000.00 to
answer for exemplary damages, based on the provisions of Articles
2229 and 2232 of the Civil Code.

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