generally considered are the following: (a) the
selection and engagement of the employee; (b)
BROTHERHOOD LABOR UNITY MOVEMENT
vs HON. ZAMORA (1991)
FACTS:
Petitioners-members of Brotherhood Labor
Unit Movement of the Philippines (BLUM),
worked as cargadores or pahinante since company. Considering the length of time that the
1961 at the SMC Plant. Sometime in January
1969, the petitioner workers numbering 140
organized themselves and engaged in union
activities.
Believing that they are entitled to overtime
and holiday pay, the petitioners aired their
gripes and grievances but it was not heeded
by the respondents. One of the union
member was dismissed from work. Hence, the
petitioners filed a complaint of unfair labor
practice against respondent SMC on the
ground of illegal dismissal.
On the other hand, SMC argued that the
complainant are not or have never been their
employees but they are the employees of the
Guaranteed Labor Contractor, an
independent labor contracting firm
Labor Arbiter Nestor Lim rendered a decision
in favor of the complainants which was
affirmed by the NLRC
On appeal, the Secretary set aside the NLRC
ruling stressing the absence of an employer-
employee relationship
Issue: Whether an employer-employee
relationship exists between petitioners and
respondent San Miguel Corporation
HELD: YES
In determining the existence of an employer-
employee relationship, the elements that are
the payment of wages; (c) the power of dismissal;
and (d) the employer's power to control the
employee with respect to the means and methods
by which the work is to be accomplished. It is the
called "control test" that is the most important
element
In the CAB, petitioners worked continuously and
exclusively for an average of 7 years for the
petitioners have worked, there is justification to
conclude that they were engaged to perform
activities necessary or desirable in the usual
business of trade of the respondent. Hence,
petitioners are considered regular employees.
Even assuming that there is a contract of
employment executed between SMC and the said
labor contractor, the court ruled that Guaranteed
and Reliable Labor contractors have neither
substantial capital nor investment to qualify as an
independent contractor under the law. The
premises, tools and equipments used by the
petitioners in their jobs are all supplied by the
respondent SMC. It is only the manpower or labor
force which the alleged contractors supply,
suggesting the existence of a "labor only"
contracting scheme prohibited by law
It is important to emphasize that that in a truly
independent contractor-contractee relationship,
the fees are paid directly to the manpower agency
in lump sum without indicating or implying that
the basis of such lump sum is the salary per worker
multiplied by the number of workers assigned to
the company.
In the CAB, the alleged independent
contractors were paid a lump sum representing
only the salaries the workers were entitled to,
arrived at by adding the salaries of each worker
which depend on the volume of work they had
accomplished individually. Therefore, there is no
independent contractor-contractee relationship.
WHEREFORE, PETITION IS GRANTED.
BROTHERHOOD LABOR UNITY MOVEMENT
vs HON. ZAMORA (1991)
FACTS:
Petitioners-members of Brotherhood Labor
Unit Movement of the Philippines (BLUM),
worked as cargadores or pahinante since exclusively for an average of 7 years for the
1961 at the SMC Plant. Sometime in January
1969, the petitioner workers numbering 140
organized themselves and engaged in union
activities.
Believing that they are entitled to overtime
and holiday pay, the petitioners aired their
gripes and grievances but it was not heeded
by the respondents. One of the union
member was dismissed from work. Hence, the
petitioners filed a complaint of unfair labor
practice against respondent SMC on the
ground of illegal dismissal.
On the other hand, SMC argued that the
complainant are not or have never been their
employees but they are the employees of the
Guaranteed Labor Contractor, an
independent labor contracting firm
Labor Arbiter Nestor Lim rendered a decision
in favor of the complainants which was
affirmed by the NLRC
On appeal, the Secretary set aside the NLRC
ruling stressing the absence of an employer-
employee relationship
Issue: Whether an employer-employee
relationship exists between petitioners and
respondent San Miguel Corporation
HELD: YES
In determining the existence of an employer-
employee relationship, the elements that are
generally considered are the following: (a) the
selection and engagement of the employee; (b)
the payment of wages; (c) the power of dismissal;
and (d) the employer's power to control the
employee with respect to the means and methods
by which the work is to be accomplished. It is the
called "control test" that is the most important
element
In the CAB, petitioners worked continuously and
company. Considering the length of time that the
petitioners have worked, there is justification to
conclude that they were engaged to perform
activities necessary or desirable in the usual
business of trade of the respondent. Hence,
petitioners are considered regular employees.
Even assuming that there is a contract of
employment executed between SMC and the said
labor contractor, the court ruled that Guaranteed
and Reliable Labor contractors have neither
substantial capital nor investment to qualify as an
independent contractor under the law. The
premises, tools and equipments used by the
petitioners in their jobs are all supplied by the
respondent SMC. It is only the manpower or labor
force which the alleged contractors supply,
suggesting the existence of a "labor only"
contracting scheme prohibited by law
It is important to emphasize that that in a truly
independent contractor-contractee relationship,
the fees are paid directly to the manpower agency
in lump sum without indicating or implying that
the basis of such lump sum is the salary per worker
multiplied by the number of workers assigned to
the company.
In the CAB, the alleged independent
contractors were paid a lump sum representing
only the salaries the workers were entitled to,
arrived at by adding the salaries of each worker
which depend on the volume of work they had
accomplished individually. Therefore, there is no
independent contractor-contractee relationship.
WHEREFORE, PETITION IS GRANTED.
Sevilla vs. CA
FACTS:
A contract by and between Noguera and
Tourist World Service (TWS), represented by
Canilao, wherein TWS leased the premises
belonging to Noguera as branch office of TWS.
When the branch office was opened, it was run by
appellant Sevilla payable to TWS by any airline for
any fare brought in on the efforts of Mrs. Sevilla,
4% was to go to Sevilla and 3% was to be
withheld by the TWS.
Later, TWS was informed that Sevilla was
connected with rival firm, and since the branch
office was losing, TWS considered closing down
its office.
On January 3, 1962, the contract with
appellee for the use of the branch office premises
was terminated and while the effectivity thereof
was January 31, 1962, the appellees no longer
used it. Because of this, Canilao, the secretary of
TWS, went over to the branch office, and finding
the premises locked, he padlocked the premises.
When neither appellant Sevilla nor any of his
employees could enter, a complaint was filed by
the appellants against the appellees.
TWS insisted that Sevilla was a mere
employee, being the branch manager of its
branch office and that she had no say on the lease
executed with the private respondent, Noguera.
ISSUE: W/N ER-EE relationship exists between
Sevilla and TWS
HELD:
The records show that petitioner, Sevilla,
was not subject to control by the private
respondent TWS. In the first place, under the
contract of lease, she had bound herself in solidum
as and for rental payments, an arrangement that
would belie claims of a master-servant
relationship. That does not make her an employee
of TWS, since a true employee cannot be made to
part with his own money in pursuance of his
employers business, or otherwise, assume any
liability thereof.
In the second place, when the branch
office was opened, the same was run by the
appellant Sevilla payable to TWS by any airline for
any fare brought in on the effort of Sevilla. Thus,
it cannot be said that Sevilla was under the control
of TWS. Sevilla in pursuing the business, relied on
her own capabilities.
It is further admitted that Sevilla was not
in the companys payroll. For her efforts, she
retained 4% in commissions from airline
bookings, the remaining 3% going to TWS. Unlike
an employee, who earns a fixed salary, she earned
compensation in fluctuating amount depending
on her booking successes.
The fact that Sevilla had been designated
branch manager does not make her a TWS
employee. It appears that Sevilla is a bona fide
travel agent herself, and she acquired an interest
in the business entrusted to her. She also had
assumed personal obligation for the operation
thereof, holding herself solidary liable for the
payment of rentals.
Wherefore, TWS and Canilao are jointly
and severally liable to indemnify the petitioner,
Sevilla.
Domasig vs. NLRC
(G.R. No 118101, September 16, 1996)
Facts: The Complaint was instituted by Eddie
Domasig against respondent Cata Garments
Corporation, Accompany engaged in garments
business and its owner/ Manager Otto Ong and
Catalina Co. for Illegal dismissal, unpaid
commission and other monetary claims.
Complaint alleged that he started
working with the respondent on July 6, 1986 as
Salesman when the company was still named Cata
Garments Corporation, that three (3 years ago,
because of complaint against respondent by its
workers, it changed its name to Cata Garments
Corporation, and that on August 29, 1992, he was
dismissed when respondent learned that he was
being pirated by rival corporation which offer he
refused . Prior to his dismissal complaint alleged
that he was receiving a salary of P1, 500 a month
plus commission.
Issue: whether or not complaint was commission
agent was not fully resolved in the assailed
decision.
Held: The Labor arbiter held that complainant
was illegally dismissed and entitled to
reinstatement and back wages as well as under
payment of salary . 13th month pay service
incentive leave and legal holiday. The arbiter also
awarded complainant his claim for unpaid
commission in the amount of P143, 955.
Decision : Bellosillo, Vitug, Kapunan and
Hermosisisima, Jr., JJ.,concur. Resolution set
aside, judgment of Labor Arbiter reinstated and
affirmed with modification.
FLORES V. NUESTRO 160 SCRA 568 YAP, J.
FACTS
1. The petitioner, Herminio Flores and his
wife, worked for respondent, Fortunato
Nuestro in his funeral parlor since June
1976 as helper-utility man and as
bookkeeper and cahier respectively.
2. On October 7, 1980, respondent
registered the petitioner spouses with the
SSS, as his employee. Thereafter, the
spouses received an increase in their
respective salaries.
3. On October 30, 1982, Herminio and
Nuestro had an altercation, during which
the latter physically assaulted the former.
4. Herminio then filed a complaint for
physical injuries against Nuestro.
5. As a result of the incident, the Flores
family had to leave their quarters at the
funeral parlor and seek protection from
the Pilar, Bataan Police.
6. Thereafter, petitioners filed illegal
dismissal charges against respondent. On
the part of the respondent, he denied the
existence of employer-employee
relationship, and further alleged that
petitioners were the ones to voluntarily
abandon their work
ISSUE Was there an employee-employer
relationship in this case?
HELD
YES. There was an employee-employer
relationship. That the respondent registered the
petitioners with the Social Security System is proof
that they were indeed his employees. The
coverage of the Social Security Law is predicated
on the existence of an employeremployee
relationship

EQUITABLE BANKING CORPORATION VS.
NLRC
273 SCRA 352
VITUG, J.
FACTS
1. Private respondent Atty. Ricardo Sadac was
appointed Vice-President for the Legal
Department of petitioner bank by its then
President, Manuel L. Morales, with a
monthly salary of P8,000 plus an allowance of
P4,500 and a Christmas bonus
equivalent to a two-month salary.
2. The turning point in the relationship among the
parties surfaced, when, on 26 June
1989, nine lawyers of the bank's Legal
Department, who were all under private
respondent, addressed a letter-petition to the
Chairman of the Board of Directors,
accusing private respondent of abusive conduct,
inefficiency, mismanagement,
ineffectiveness and indecisiveness.
3. One of the bank's directors, Heminio Banico
was directed to look further into the
matter and to determine a course of action for the
best interest of the bank.
4. Banico concluded that the charge of abusive
conduct is true and this is supported
by overwhelming evidence. The charge of
mismanagement is also supported by
abundant evidence.
5. A memorandum was issued to private
respondent stating that the Board of Directors
has chosen the more compassionate option of
waiting for the voluntary resignation of
private respondent Sadac.
6. Reacting to the memorandum, private
respondent addressed a letter to Board
Chairman to the effect that the report of Mr.
Banico contained libelous statements
and requested for a full hearing by the Board of
Directors so that he could clear his
name. But to no avail.
7. The Board adopted a resolution terminating the
services of private respondent in
view of his belligerence and the Board's honest
belief that the relationship between
private respondent and petitioner bank was one
of client and lawyer.
8. Private respondent was removed from his office
occupancy in the bank and ordered
disentitled, starting 10 August 1989, to any
compensation and other benefits.
ISSUE
Whether or not private respondent was denied
due process.
HELD
The Court resolved first the issue of employee-
employer relationship and ruled in the
affirmative on the ground that private respondent
participated as part of management and is
one of its senior officers holding the position of
Vice-President. Upon finding that private
respondent is an employee of petitioner, the latter
violated the right to due process of private
respondent when the latter's request of full
hearing was not granted. While it is true that the
essence of due process is simply an opportunity to
be heard or, as applied in administrative
proceedings, an opportunity to explain one's side,
meetings in the nature of consultation and
conferences such as the case here, however, may
not be valid substitutes for the proper
observance of notice and hearing.
However, reinstatement, which is the
consequence of illegal dismissal, has markedly
been
rendered undesirable. Private respondent shall,
instead, be entitled to backwages from the
time of his dismissal until reaching sixty years of
age and, thereupon, to retirement benefits
in accordance with Article 287 of the Labor Code
and Sec 14, Rule 1, Book VI of the
Implementing rules of the Labor Code.
PHILIPPINE FUJI XEROX CORPORATION,
JENNIFER A. BERNARDO and ATTY.
VICTORINO LUIS vs. NATIONAL LABOR
RELATIONS COMMISSION, PAMBANSAN
KILUSAN NG PAGGAWA, (KILUSAN)-TUCP,
PHILIPPINE XEROX EMPLOYEES UNION-
KILUSAN AND PEDRO GARADO
G.R. No. 111501 MARCH 5, 1996
FACTS OF THE CASE
Petitioner Fuji Xerox entered into an
agreement under which Skillpower, Inc. supplied
workers to operate copier machines of Fuji Xerox
as part of their "Xerox Copier Project".
Respondent Garado was assigned as key operator
at Fuji Xerox Buendia Branch.
In 1983, Garado went on leave and was
replaced by a substitute. However, upon his
return he found out that there was a spoilage of
over 600 copies. He tried to talk to the service
technician to stop the meter of the machine since
he was afraid that he would be blamed for the
spoilage. The technician refused and later on Fuji
Xerox learned about the incident. Fuji Xerox
reported this to Skillpower, Inc. Skillpower, Inc.
asked Garado to explain the incident and was put
on suspension. Garado filed a complaint for illegal
dismissal.
The Labor Arbiter ruled that Garado was
an employee of Skillpower, Inc. this dismissing the
complaint for illegal dismissal against Fuji Xerox.
LA said that Skillpower exercised control and
supervision of Garado's work although the later
receives his salary from Fuji Xerox.
On appeal, the NLRC found that Garado
was an employee of Fuji Xerox and was illegally
dismissed by the latter. NLRC said that although
Garado's request was wrongful it was not the
appropriate penalty. NLRC also said that although
Garado was suspended by Skillpower, Inc. the
company acted at the behest of Fuji Xerox. The
power of control and supervision was with Fuji
Xerox and also the payment of respondent's
salary. Skillpower, Inc. merely acted as a
paymaster-agent of Fuji Xerox and that
Skillpower, Inc is a labor-only contractor. Thus,
Garado is employed by Fuji Xerox.
Fuji Xerox contends that Skillpower, Inc.
is an independent contractor. Thus, this appeal to
the SC.
ISSUE
1. Whether or not Garado is an employee of
Fuji Xerox or of Skillpower, Inc.

RULING
ISSUE#1 Garado is an employee of Fuji Xerox
The Agreement between petitioner Fuji Xerox and
Skillpower, Inc. provides that Skillpower, Inc. is an
independent contractor and that the workers
hired by it shall not, in any manner and under
any circumstances, be considered employees of
[the] Company, and that the Company has no
control or supervision whatsoever over the
conduct of the Contractor or any of its workers in
respect to how they accomplish their work or
perform the Contractors obligations under this
AGREEMENT.
In Tabas v. California Manufacturing Company,
Inc.,[9] this Court held on facts similar to those in
the case at bar:
There is no doubt that in the case
at bar, Livi performs manpower
services, meaning to say, it
contracts out labor in favor of
clients. We hold that it is one
notwithstanding its vehement
claims to the contrary, and
notwithstanding the provision of
the contract that it is an
independent contractor. The
nature of ones business is not
determined by self-serving
appellations one attaches thereto
but by the tests provided by
statute and prevailing case law.
The bare fact that Livi maintains
a separate line of business does
not extinguish the equal fact that
it has provided California with
workers to pursue the latters
own business. In this connection,
we do not agree that the
petitioners had been made to
perform activities which are not
directly related to the general
business of
manufacturing, Californias
purported principal operation
activity. The petitioners had
been charged with
merchandising [sic] promotion
or sale of the products of
[California] in the different sales
outlets in Metro Manila including
task and occasional [sic] price
tagging, an activity that is
doubtless, an integral part of the
manufacturing business. It is not,
then, as if Livi had served as its
(Californias) promotions or sales
arm or agents, or otherwise,
rendered a piece of work it
(California) could not have itself
done; Livi as a placement agency,
had simply supplied it with the
manpower necessary to carry out
its (Californias) merchandising
activities, using its (Californias)
premises and equipment.
xxx xxx xxx
The fact that the petitioners have
allegedly admitted being Livis
direct employees in their
complaints is nothing conclusive.
For one thing, the fact that the
petitioners were (are), will not
absolve California since liability
has been imposed by legal
operation. For another, and as
we indicated, the relations of
parties must be judged from case
to case and the decree of law,
and not by declaration of parties.
Skillpower, Inc. is, therefore, a labor-
only contractor and Garado is not its employee.
No grave abuse of discretion can thus be imputed
to the NLRC for declaring petitioner Fuji Xerox
guilty of illegal dismissal of private respondent.
GREAT PACIFIC LIFE ASSURANCE v. JUDICO
G.R. No. 73887 December 21, 1989
Ponente: PARAS. J
FACTS:
Honorato Judico filed a complaint against
Grepalife insurance for award of money claims
consisting of separation pay, unpaid salary and
13th month pay.
Judico entered into an agreement of agency with
Grepalife to become a debit agent attached to the
Industrial Life Agency in Cebu City. He had
definite work assignments including but not
limited to collection of premiums from policy
holders and selling insurance to prospective
clients. He 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 the beginners employment
with fixed weekly wage of P200 for 13 weeks
regardless of production. He was assigned a
definite 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
collection. In both cases he was required to make
a regular report to the company regarding their
duties. He was then promoted to Zone Supervisor
with additional allowance. On June 28, 1982 he
was dismissed by way of Termination of his agency
contract.
ISSUE:
Whether or not there is an employer-
employee relationship between insurance agents
and their principal?
HELD:
Yes, there is an employer-employee
relationship between Grepalife and Judico
because the element of control by Grepalife over
Judico is Present.
The facts shows that Judico was controlled by
Grepalife insurance company not only as to the
kind of work; that amount of results, the kind of
performance but also the power of dismissal.
Judico by nature and his position and work has
been a regular employee and therefore entitled to
the protection of the law and not to be terminated
without valid and justifiable cause.
Citizens League of Free Workers v Abbas et al.
Facts: The petitioner, a legitimate labor
organization, filed for certiorari with a prayer for
the issuance of a writ of injunction. The petitioner
filed a complaint for unfair labor against the
respondents-spouses, Teofilo Geronimo and
Emeriti Mendez, the owner of the auto calesas
leased by the petitioner with the Court of
Industrial Relations. However, the respondent
spouses filed a civil case at the court of first
instance of Davao city to restrain the union and its
members, who were drivers of the spouses from
interfering their business. The private respondents
also contends that there was no employer-
employee relationship between them and the
petitioner.
Issue: Whether or not there was employer-
employee relationship.
Whether or not the Court of Industrial
Relations has jurisdiction over the case.
Held: This case falls squarely within our ruling in
National Labor Union v. Dinglasan, 98 Phil., 649,
wherein this court held that a driver of a jeep who
operates the same under under the boundary
system is considered an employee within the
meaning of the law and as such the case comes
under the jurisdiction of the Court of Industrial
Relations.