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Labor Law; Dismissals; Prescription; In illegal dismissal cases, the employee concerned is given a
period of four years from the time of his dismissal within which to institute a complaint, which
period shall commence to run only upon the accrual of a cause of action of the worker.In illegal
dismissal cases, the employee concerned is
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* THIRD DIVISION.
357
358
SUPREME COURT REPORTS ANNOTATED
Victory Liner, Inc. vs. Race
complied with. Under the requirement of substantial due process, the grounds for termination of
employment must be based on just or authorized causes. The following are just causes for the
termination of employment under Article 282 of the Labor Code: (a) Serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or representative in connection
with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful
breach by the employee of the trust reposed in him by his employer or duly authorized
representative; (d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized representative; and (e)
Other causes analogous to the foregoing. Abandonment of work, or the deliberate and unjustified
refusal of an employee to resume his employment, may be a just cause for the termination of
employment under paragraph (b) of Article 282 of the Labor Code since it is a form of neglect of
duty.
Same; Same; Due Process; Procedural Requirements for Dismissal of Employees.It has been
established that petitioners failed to comply with the requirement of substantial due process in
terminating the employment of respondent. We will now determine whether the petitioner had
complied with the procedural aspect of a lawful dismissal. In the termination of employment, the
employer must (a) give the employee a written notice specifying the ground or grounds of
termination, giving to said employee reasonable opportunity within which to explain his side; (b)
conduct a hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given the opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and (c) give the employee a written notice
of termination indicating that upon due consideration of all circumstances, grounds have been
established to justify his termination.
A v. N
Labor Law; Appeals; In exceptional cases, a belated appeal may be given due course if greater
injustice may occur if an appeal is not given due course.We agree with petitioners contention
that the perfection of an ap-
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* FIRST DIVISION.
205
208
SUPREME COURT REPORTS ANNOTATED
ABS-CBN Broadcasting Corporation vs. Nazareno
within the regular business of the employer.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 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. The principal test 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.
Same; Same; Same; Same; While length of time may not be a sole controlling test for project
employment, it can be a strong factor to determine whether the employee was hired for a specific
undertaking or in fact tasked to perform functions which are vital, necessary and indispensable to
the usual trade or business of the employer.It is undisputed that respondents had continuously
performed the same activities for an average of five years. Their assigned tasks are necessary or
desirable in the usual business or trade of the petitioner. The persisting need for their services is
sufficient evidence of the necessity and indispensability of such services to petitioners business or
trade. While length of time may not be a sole controlling test for project employment, it can be a
strong factor to determine whether the employee was hired for a specific undertaking or in fact
tasked to perform functions which are vital, necessary and indispensable to the usual trade or
business of the employer. We note further that petitioner did not report the termination of
respondents employment in the particular project to the Department of Labor and Employment
Regional Office having jurisdiction over the workplace within 30 days following the date of their
separation from work, using the prescribed form on employees
termination/dismissals/suspensions.
Same; Same; Same; Same; Program employees, or project employees, are different from
independent contractors because in the case of the latter, no employer-employee relationship
exists.As gleaned from the records of this case, petitioner itself is not certain how to categorize
respondents. In its
209
A. VS. N
Labor Law; Employment; Control Test; The better approach would therefore be to adopt a two-
tiered test.The better approach would therefore be to adopt a two-tiered test involving: (1) the
putative employers power to control the employee with respect to the means and methods by
which the work is to be accomplished; and (2) the underlying economic realities of the activity or
relationship. This two-tiered test would provide us with a framework of analysis, which would
take into consideration the totality of circumstances surrounding the true nature of the relationship
between the parties. This is especially appropriate in this case where there is no written agreement
or terms of reference to base the relationship on; and due to the complexity of the relationship
based on the various positions and responsibilities given to the worker over the period of the
latters employment.
Same; Same; Same; Economic Activity; The determination of the relationship between employer
and employee depends upon the circumstances of the whole economic activity.The
determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services
performed are an integral part of the employers business; (2) the extent of the workers
investment in equipment and facilities; (3) the nature and degree of control exercised by the
employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill,
judgment or foresight required for the success of the claimed independent enterprise; (6) the
permanency and duration of the relationship between the worker and the employer; and (7) the
degree of dependency of the worker upon the employer for his continued employment in that line
of business.
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* FIRST DIVISION.
691
T. Vs. C
Labor Law; Labor Relations; Employer-Employee Relationship; The existence of an employer-
employee relation cannot be made the subject of an agreement.The existence of an employer-
employee relation is a question of law and being such, it cannot be made the subject of agreement.
Hence, the fact that the manpower supply agreement between Livi and California had specifically
designated the former as the petitioners employer and had absolved the latter from any liability as
an employer, will not erase either partys obligations as an employer, if an employer-employee
relation otherwise exists between the workers and either firm. At any rate, since the agreement
was between Livi and California, they alone are bound by it, and the petitioners cannot be made to
suffer from its adverse consequences.
Same; Same; Same; Labor Only Contracting; The labor only contractor is considered merely
an agent of the employer, liability therefore must be shouldered by either one or shared by both.
On the other hand, we have likewise held, based on Article 106 of the Labor Code. xxx that
notwithstanding the absence of a direct employeremployee relationship between the employer in
whose favor work had been contracted out by a labor-only contractor, and the employees, the
former has the responsibility, together with the labor-only contractor for any valid labor claims,
by operation of law. The reason, so we held, is that the labor-only contractor is considered
merely an agent of the employer, and liability must be shouldered by either one or shared by
both.
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* SECOND DIVISION.
498
498
SUPREME COURT REPORTS ANNOTATED
Tabas vs. California Manufacturing Co., Inc.
Same; Same; Same; Casual Employees; A temporary or casual employee becomes regular after
service of one year, unless he has been contracted for a specific project.The fact that the
petitioners have been hired on a temporary or seasonal basis merely is no argument either. As
we held in Philippine Bank of Communications v. NLRC, a temporary or casual employee, under
Article 281 of the Labor Code, becomes regular after service of one year, unless he has been
contracted for a specific project. And we cannot say that merchandising is a specific project for the
obvious reason that it is an activity related to the day-to-day operations of California.
B. V. Z
Labor Relations; Factors considered in determining employeremployee relationship.In
determining the existence of an employeremployee relationship, the elements that are generally
considered are the following: (a) the selection and engagement of the employee; (b) the payment
of wages; (Q) the power of dismissal; and (d) the employers power to control the employee with
respect to the means and methods by which the work is to be accomplished. It is the socalled
control test that is the most important element.
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* SECOND DIVISION.
50
50
SUPREME COURT REPORTS ANNOTATED
BrotherhoodLabor Unity Movement of the Philippines vs. Zamora
Labor Relations; Criteria for determining existence of independent contractor relationship.The
existence of an independent contractor relationship is generally estabished by the following
criteria: whether or not 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 employers power with respect to the hiring, firing, and payment of the contractors workers;
the control of the premises; the duty to supply the premises tools, appliances, materials and
laborer; and the mode, manner, and terms of payment.
Ibid; Unfair Labor Practice; Where there is an existing CBA, a group of employees who wish to
form another union must follow Labor Code procedures.The respondent company had an
existing collective bargaining agreement with the IBM Union which is the recognized collective
bargaining representative at the respondents glass placed there being a recognized bargaining
representative of all employees at the companys glass plant, the petitioners cannot merely form a
union and demand bargaining. The Labor Code provides the proper procedure for the recognition
of unions as sale bargaining representatives. This must be followed
G. V. J
Same; Same; Same; Labor; Employer-employee relationship; Test to determine employer-
employee relationship.One salient point in the determination of employer-employee relationship
which cannot be easily ignored is the fact that the compensation that these agents on commission
received is not paid by the insurance company but by the investor (or the person insured). After
determining the commission earned by an agent on his sales the agent directly deducts it from the
amount he received from the investor or the person insured and turns over to the insurance
company the amount invested after such deduction is made. The test therefore is whether the
employer controls or has reserved the right to control the employee not only as to the result of
the work to be done but also as to the means and methods by which the same is to be
accomplished.
Same; Same; Same; Same; Element of control by petitioner on the private respondent is present;
Contract of services with petitioner by private respondent is not for a piece of work nor for a
definite period.Applying the aforementioned test to the case at bar, We can
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* SECOND DIVISION.
446
446
SUPREME COURT REPORTS ANNOTATED
Great Pacific Life Assurance Corporation vs. Judico
readily see that the element of control by the petitioner on Judico was very much present. The
record shows that petitioner Judico received a definite minimum amount per week as his wage
known as sales reserve wherein the failure to maintain the same would bring him back to a
beginners employment with a fixed weekly wage of P200.00 for thirteen weeks regardless of
production. He was assigned a definite place in the office to work on when he is not in the field;
and in addition to his canvassing work he was burdened with the job of collection. In both cases
he was required to make regular report to the company regarding these duties, and for which an
anemic performance would mean a dismissal. Conversely faithful and productive service earned
him a promotion to Zone Supervisor with additional supervisors allowance, a definite amount of
P110.00 aside from the regular P200.00 weekly allowance. Furthermore, his contract of services
with petitioner is not for a piece of work nor for a definite period.
Same; Same; Same; Same; Same; Illegal dismissal; Private respondent by the nature of his
position and work had been a regular employee of petitioner and entitled to the protection of the
law and could not just be terminated without valid and justifiable cause.On the other hand, an
ordinary commission insurance agent works at his own volition or at his own leisure without fear
of dismissal from the company and short of committing acts detrimental to the business interest of
the company or against the latter, whether he produces or not is of no moment as his salary is
based on his production, his anemic performance or even dead result does not become a ground
for dismissal. Whereas, in private respondents case, the undisputed facts show that he was
controlled by petitioner insurance company not only as to the kind of work; the amount of results,
the kind of performance but also the power of dismissal. Undoubtedly, private respondent, by
nature of his position and work, had been a regular employee of petitioner and is therefore entitled
to the protection of the law and could not just be terminated without valid and justifiable cause.
F. V. B
Same; Same; Same; Labor; Employer-employee relationship; Test to determine employer-
employee relationship.One salient point in the determination of employer-employee relationship
which cannot be easily ignored is the fact that the compensation that these agents on commission
received is not paid by the insurance company but by the investor (or the person insured). After
determining the commission earned by an agent on his sales the agent directly deducts it from the
amount he received from the investor or the person insured and turns over to the insurance
company the amount invested after such deduction is made. The test therefore is whether the
employer controls or has reserved the right to control the employee not only as to the result of
the work to be done but also as to the means and methods by which the same is to be
accomplished.
Same; Same; Same; Same; Element of control by petitioner on the private respondent is present;
Contract of services with petitioner by private respondent is not for a piece of work nor for a
definite period.Applying the aforementioned test to the case at bar, We can
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* SECOND DIVISION.
446
446
SUPREME COURT REPORTS ANNOTATED
Great Pacific Life Assurance Corporation vs. Judico
readily see that the element of control by the petitioner on Judico was very much present. The
record shows that petitioner Judico received a definite minimum amount per week as his wage
known as sales reserve wherein the failure to maintain the same would bring him back to a
beginners employment with a fixed weekly wage of P200.00 for thirteen weeks regardless of
production. He was assigned a definite place in the office to work on when he is not in the field;
and in addition to his canvassing work he was burdened with the job of collection. In both cases
he was required to make regular report to the company regarding these duties, and for which an
anemic performance would mean a dismissal. Conversely faithful and productive service earned
him a promotion to Zone Supervisor with additional supervisors allowance, a definite amount of
P110.00 aside from the regular P200.00 weekly allowance. Furthermore, his contract of services
with petitioner is not for a piece of work nor for a definite period.
Same; Same; Same; Same; Same; Illegal dismissal; Private respondent by the nature of his
position and work had been a regular employee of petitioner and entitled to the protection of the
law and could not just be terminated without valid and justifiable cause.On the other hand, an
ordinary commission insurance agent works at his own volition or at his own leisure without fear
of dismissal from the company and short of committing acts detrimental to the business interest of
the company or against the latter, whether he produces or not is of no moment as his salary is
based on his production, his anemic performance or even dead result does not become a ground
for dismissal. Whereas, in private respondents case, the undisputed facts show that he was
controlled by petitioner insurance company not only as to the kind of work; the amount of results,
the kind of performance but also the power of dismissal. Undoubtedly, private respondent, by
nature of his position and work, had been a regular employee of petitioner and is therefore entitled
to the protection of the law and could not just be terminated without valid and justifiable cause.
Same; Employee under the Industrial Peace Act.Under section 2(d) of the Industrial Peace Act,
the term "employee" embraces not only those who are usually and ordinarily considered as
employees but also those who have ceased as employees as a consequence of a labor dispute. An
employee is one who is engaged in the service of another; who performs services for another; who
works for salary or wages.
Same.Professors and instructors, who are under contract to teach particular courses and are paid
for their services, are employees under the Industrial Peace Act. Teachers are employees.
Same.Striking professors and instructors of a university are employees because striking
employees retain their status as employees.
Same; Independent contractors; Evidence; Judicial notice.Professors and instructors are not
independent contractors. The Court may take judicial notice that a university controls the work of
the members of its faculty; that it prescribes the courses or subjects that they teach and the time
and place for teaching; that the professor's work is characterized by regularity and continuity for a
fixed duration; that professors are compensated for their services by wages and salaries, rather
than by a share of the profits; that professors or instructors cannot
1193
Same; Replacements.Employees, who took the place of strikers, do not displace them as
employees. Strikers maintain their status as employees of the employer. A return-to-work order
cannot be considered as an impairment of the contract entered into by an employer with
replacements.