INSULAR BANK OF ASIA AND AMERICA EMPLOYEES’ UNION (IBAA-EU), petitioner, 
vs.
HON. AMADO G.

INCIONG, and IBAA, respondents.

G.R. No. L-52415

October 23, 1984

FACTS:
The Department of Labor promulgated the rules and regulations for the implementation of holidays with
pay. The controversial section thereof reads: “Sec. 2. Status of employees paid by the month. —
Employees who are uniformly paid by the month, irrespective of the number of working days therein,
with a salary of not less than the statutory or established minimum wage shall be presumed to be paid
for all days in the month whether worked or not. For this purpose, the monthly minimum wage shall not
be less than the statutory minimum wage multiplied by 365 days divided by twelve”

Later, Policy Instruction No. 9 was issued by the then Secretary of Labor interpreting the above-quoted
rule, pertinent portions of which read:
“xxx xxx xxx
The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In
the case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid
legal holidays are entitled to the benefit.”

Respondent IBAA by reason of the ruling laid down by the aforecited rule implementing Article 94 of the
Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to all its employees.

Writ of execution of the previously decided case for them to be paid their holiday pay was filed by the
petitioner. Labor arbiter and NLRC ruled in their favor. IBAA filed an MR to the Office of the Minister of
Labor which set aside the decision of NLRC. Hence this petition.

ISSUE:
WON holiday pay does not apply to monthly- paid employees.

HELD:
No.
Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by the then
Secretary of Labor are null and void since in the guise of clarifying the Labor Code’s provisions on holiday
pay, they in effect amended them by enlarging the scope of their exclusion.

The provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit
– it provides for both the coverage of and exclusion from the benefits. In Policy Instruction No. 9, the
then Secretary of Labor went as far as to categorically state that the benefit is principally intended for
daily paid employees, when the law clearly states that every worker shall be paid their regular holiday
pay.

NATIONAL SUGAR REFINERIES CORPORATION (NASUREFCO) petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.
Brotherhood Labor Unity Movement of the Phil. v. Zamora

Facts:

The petitioners are workers who have been employed at the San Miguel Parola Glass Factory as
“pahinantes” or “kargadors” for almost seven years. They worked exclusively at the SMC plant, never
having been assigned to other companies or departments of San Miguel Corp, even when the volume of
work was at its minimum. Their work was neither regular nor continuous, depending on the volume of
bottles to be loaded and unloaded, as well as the business activity of the company. However, work
exceeded the eight-hour day and sometimes, necessitated work on Sundays and holidays. -for this, they
were neither paid overtime nor compensation.

Sometime in 1969, the workers organized and affiliated themselves with Brotherhood Labor Unity
Movement (BLUM). They wanted to be paid to overtime and holiday pay. They pressed the SMC
management to hear their grievances. BLUM filed a notice of strike with the Bureau of Labor Relations
in connection with the dismissal of some of its members. San Miguel refused to bargain with the union
alleging that the workers are not their employees but the employees of an independent labor
contracting firm, Guaranteed Labor Contractor.

The workers were then dismissed from their jobs and denied entrance to the glass factory despite their
regularly reporting for work. A complaint was filed for illegal dismissal and unfair labor practices.

Issue:

Whether or not there was employer-employee (ER-EE)relationship between the workers and San Miguel
Corp.

Held:

YES. In determining if there is an existence of the (ER-EE) relationship, the four-fold test was used by the
Supreme Court. These are:

· The selection and engagement of the employee

· Payment of wages

· Power of dismissal

· Control Test- the employer’s power to control the employee with respect to the means and
methods by which work is to be accomplished

In the case, the records fail to show that San Miguel entered into mere oral agreements of employment
with the workers. Considering the length of time that the petitioners have worked with the company,
there is justification to conclude that they were engaged to perform activities necessary in the usual
business or trade. Despite past shutdowns of the glass plant, the workers promptly returned to their
jobs. The term of the petitioner’s employment appears indefinite and the continuity and habituality of
the petitioner’s work bolsters the claim of an employee status.

As for the payment of the workers’ wages, the contention that the independent contractors were paid a
lump sum representing only the salaries the workers where entitled to have no merit. The amount paid
by San Miguel to the contracting firm is no business expense or capital outlay of the latter. What the
contractor receives is a percentage from the total earnings of all the workers plus an additional amount
from the earnings of each individual worker.

The power of dismissal by the employer was evident when the petitioners had already been refused
entry to the premises. It is apparent that the closure of the warehouse was a ploy to get rid of the
petitioners, who were then agitating the company for reforms and benefits.

The inter-office memoranda submitted in evidence prove the company’s control over the workers. That
San Miguel has the power to recommend penalties or dismissal is the strongest indication of the
company’s right of control over the workers as direct employer.

*SC ordered San Miguel to reinstate the petitioners with 3 years backwages.

Lapanday Agricultural Development Corporation v. Court of Appeals [324 SCRA 39, January 31, 2000]

Thursday, January 22, 2009 Posted by Coffeeholic Writes

Labels: Case Digests, Labor Law

FACTS: Commando Security Service Agency provided security guards to Lapanday Agricultural
Development Corporation under a contract of service. Subsequently, a wage order was issued, with the
stipulation that the increase in wages for security services would be borne by the client/principal, in this
case Lapanday. The latter refused to amend the contract to conform to the wage order, and the said
contract ran through its natural life and expired, without the required adjustments having been made.
The security agency then filed a case for the collection of a sum of money with the regional Trial Court
that had jurisdiction over the case. Lapanday opposed, stating the NLRC was the proper forum for the
case.

ISSUE: Where is the proper venue of the case, the RTC or the NLRC?
HELD: The RTC. There was no employer-employee relationship in this case, since Commando simply
sought to collect a sum of money and damages for breach of contract. The service contract had long
since expired. Hence, reference must be made to the Civil, not Labor Code.