LABOR CASES [1] As guidelines for employers in the exercise of their power to dismiss employees
for just causes, the law provides that:
NASECO vs. NLRC, et.al. G.R. No. L-69870 November 29 ,1988 Illegal
Dismissal
NOVEMBER 2, 2017
FACTS:
Eugenia Credo, Chief of Property and Records of NATIONAL SERVICE
CORPORATION (NASECO) filed a complaint before the Arbitration Branch of the
Ministry of Labor after having been placed in forced leave without due process. Said
forced leave was a product of her alleged non-compliance of a memorandum coming
from a Finance Manager, and other past acts of misconduct as found by NASECO’s
committee on Personnel Affairs.
In the Manager’s office, Credo was made to explain her side in connection with the
conducts for which she is complained of. But because she failed to explain, she was
handed a Notice of Termination. Credo thus filed a supplemental complaint for
illegal dismissal and lack of opportunity to be heard.
ISSUE: Was there an illegal dismissal?
RULING: YES. These guidelines[1] mandate that the employer furnish an employee
sought to be dismissed two (2) written notices of dismissal before a termination of
employment can be legally effected. These are the:
(1) notice which apprises the employee of the particular acts or omissions for which
his dismissal is sought and
(2) the subsequent notice which informs the employee of the employer’s decision
to dismiss him.
The dictates of procedural due process requires that decision to dismiss can only be
handed after employer has afforded employee concerned ample opportunity to be
heard and defend himself. In the case at bar, the compliance with the injunction to
apprise her of the charges filed against her and to afford her a chance to prepare her
defense was dispensed in only a day. This is not effective compliance with the legal
requirements.
“Section 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall
furnish him a written notice stating the particular acts or omission constituting the
grounds for his dismissal .
“Section 5. Answer and Hearing. The worker may answer the allegations stated
against him in the notice of dismissal within a reasonable period from receipt of such
notice. The employer shall afford the worker ample opportunity to be heard and to
defend himself with the assistance of his representative, if he so desires
“Section 6. Decision to dismiss. The employer shall immediately notify a worker in
writing of a decision to dismiss him stating clearly the reasons therefor.”
SONZA V. ABS-CBN BROADCASTING CORPORATION (G.R. NO. 138051)
Facts:
Respondent ABS-CBN signed an Agreement with the Mel and Jay Management
Development Corporation where the latter agreed to provide petitioner Sonza’s
services exclusively to ABS-CBN as talent for radio and television. Later, Sonza
tendered a letter rescinding their agreement and filed a complaint before the DOLE for
payment of his labor standard benefits. ABS-CBN contends on the ground that no
employer-employee relationship existed between the parties. The Labor Arbiter found
for respondent citing that Sonza as a ‘talent’ cannot be considered an employee of
petitioner. Both NLRC and CA affirmed.
Issue:
Whether or not employer-employee relationship existed between petitioner and ABS-
CBN.
Ruling: NO.
Applying the control test to the present case, we find that SONZA is not an employee
but an independent contractor. The control test is the most important test our courts
apply in distinguishing an employee from an independent Contractor. This test is based
on the extent of control the hirer exercises over a worker. The greater the supervision
and control the hirer exercises, the more likely the worker is deemed an employee. The
converse holds true as well – the less control the hirer exercises, the more likely the
worker is considered an independent contractor.
We find that ABS-CBN was not involved in the actual performance that produced the
finished product of SONZA’s work. ABS-CBN did not instruct SONZA how to
perform his job. ABS-CBN merely reserved the right to modify the program format
and airtime schedule “for more effective programming.” ABS-CBN’s sole concern
was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did
not exercise control over the means and methods of performance of SONZA’s work.
In any event, not all rules imposed by the hiring party on the hired party indicate that
the latter is an employee of the former. In this case, SONZA failed to show that these  On February 20, 1995, petitioner filed a complaint for regularization with the
rules controlled his performance. We find that these general rules are
Regional Arbitration Branch No. III of NLRC in San Fernando, Pampanga.
merely guidelines towards the achievement of the mutually desired result, which are
top-rating television and radio programs that comply with standards of the industry. Before the case could be heard, respondent terminated the services of the
Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-
CBN. Even an independent contractor can validly provide his services exclusively to petitioner.
the hiring party. In the broadcast industry, exclusivity is not necessarily the same as
control.  Hence, the petitioner filed an amended complaint for illegal dismissal, unfair
*Not every performance of services for a fee creates an employer-employee
relationship. To hold that every person who renders services to another for a fee is labor practice and non-payment of overtime pay, nightshift differential, and
an employee – to give meaning to the security of tenure clause – will lead to absurd 13th month pay, among others.
results.
Issue: Whether there exists an employer-employee relationship?
Chavez vs NLRC ET AL DIGEST
Held:

DECEMBER 21, 2016 ~ VBDIAZ  Yes an employer-employee do exist. The elements to determine the existence of

an employment relationship are: (1) the selection and engagement of the

Chavez vs NLRC, Supreme Packaging Inc, and Alvin Lee
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
GR No. 146530 January 17, 2005
employer’s power to control the employee’s conduct. The most important
Facts:
element is the employer’s control of the employee’s conduct, not only as to the
 The respondent company, Supreme Packaging Inc., is in the business of
result of the work to be done, but also as to the means and methods to
manufacturing cartons and other packaging materials for export and
accomplish it. First. Undeniably, it was the respondents who engaged the
distribution.
services of the petitioner without the intervention of a third party. Second.
 The petitioner, Pedro Chavez, was a truck driver (from October 25, 1984)
Wages are defined as “remuneration or earnings, however designated, capable
tasked to deliver the respondent company’s products to its various customers.
of being expressed in terms of money, whether fixed or ascertained on a time,
 The respondent furnished petitioner with a truck that all deliveries were made in
task, piece or commission basis, or other method of calculating the same, which
accordance with the routing slips issued by the respondent company indicating
is payable by an employer to an employee under a written or unwritten contract
the order, time and urgency of delivery.
of employment for work done or to be done, or for service rendered or to be
 On 1992, the petitioner expressed his desire to avail the benefits that a regular
rendered. The petitioner is paid on a per trip basis is not significant. This is
employee were receiving such as overtime pay, nightshift differential pay, and
merely a method of computing compensation. Third. The respondent’s power to
13th month pay, among others but nothing was complied.
dismiss the petitioner was inherent in the fact that they engaged the services of

the petitioner as truck driver. They exercised this power by terminating the
 petitioner’s services albeit in the guise of severance of contractual relation due FACTS:

allegedly to the latter’s breach of his contractual obligation. Fourth. Compared

to an employee, an independent contractor is one who carries on a distinct and 1995, Petitioner was hired by Kasei Corporation during its incorporation stage. She

independent business and undertakes to perform the job, work or service on its was designated as Accountant and Corporate Secretary and was assigned to handle

own account and under its own responsibility according to its own manner and all the accounting needs of the company. She was also designated as Liaison Officer

method, free from the control and direction of the principal in all matters to the City of Makati to secure business permits, construction permits and other

connected with the performance of the work except as to the results thereof. licenses for the initial operation of the company.

Hence while an independent contractor enjoys independence and freedom from Although she was designated as Corporate Secretary, she was not entrusted with the

the control and supervision of his principal. An employee is subject to the corporate documents; neither did she attend any board meeting nor required to do

employer’s power to control the means and methods by which the employee’s so. She never prepared any legal document and never represented the company as its

work is to be performed and accomplished. A careful review of the records Corporate Secretary. 1996, petitioner was designated Acting Manager. Petitioner was

shows that the latter performed his work under the respondents’ supervision and assigned to handle recruitment of all employees and perform management

control. The existence of an employer-employee relationship cannot be negated administration functions; represent the company in all dealings with government

by expressly repudiating it in a contract and providing therein that the employee agencies, especially with the BIR, SSS and in the city government of Makati; and to

is an independent contractor when the facts clearly show otherwise. administer all other matters pertaining to the operation of Kasei Restaurant which is

Employment status is defined by law and not by what the parties say it should owned and operated by Kasei Corporation.

be. January 2001, petitioner was replaced by a certain Liza R. Fuentes as Manager.

 Kasei Corporation reduced her salary, she was not paid her mid-year bonus allegedly
FRANCISCO VS. NLRC ET AL DIGEST
because the company was not earning well. On October 2001, petitioner did not

DECEMBER 21, 2016 ~ VBDIAZ receive her salary from the company. She made repeated follow-ups with the

company cashier but she was advised that the company was not earning well.
ANGELINA FRANCISCO, Petitioner, versus NATIONAL LABOR
Eventually she was informed that she is no longer connected with the company.
RELATIONS COMMISSION, KASEI CORPORATION, SEIICHIRO
Since she was no longer paid her salary, petitioner did not report for work and filed
TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENE BALLESTEROS,
an action for constructive dismissal before the labor arbiter. Private respondents
TRINIDAD LIZA and RAMON ESCUETA, Respondents., G.R. No. 170087,
averred that petitioner is not an employee of Kasei Corporation. They alleged that
2006 Aug 31.
petitioner was hired in 1995 as one of its technical consultants on accounting matters
and act concurrently as Corporate Secretary. As technical consultant, petitioner It is better, therefore, to adopt a two-tiered test involving: (1) the employer’s power

performed her work at her own discretion without control and supervision of Kasei to control; and (2) the economic realities of the activity or relationship.

Corporation. Petitioner had no daily time record and she came to the office any time The control test means that there is an employer-employee relationship when the

she wanted and that her services were only temporary in nature and dependent on the person for whom the services are performed reserves the right to control not only the

needs of the corporation. end achieved but also the manner and means used to achieve that end.

The Labor Arbiter found that petitioner was illegally dismissed, NLRC affirmed with There has to be analysis of the totality of economic circumstances of the worker.

modification the Decision of the Labor Arbiter. On appeal, CA reversed the NLRC Thus, the determination of the relationship between employer and employee depends

decision. CA denied petitioner’s MR, hence, the present recourse. upon the circumstances of the whole economic activity, such as: (1) the extent to

ISSUES: which the services performed are an integral part of the employer’s business; (2) the

extent of the worker’s investment in equipment and facilities; (3) the nature and

1. WON there was an employer-employee relationship between petitioner and degree of control exercised by the employer; (4) the worker’s opportunity for profit

private respondent; and if in the affirmative, and loss; (5) the amount of initiative, skill, judgment or foresight required for the

2. Whether petitioner was illegally dismissed. success of the claimed independent enterprise; (6) the permanency and duration of

RULING: 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

1. Generally, courts have relied on the so-called right of control test where the line of business. The proper standard of economic dependence is whether the worker

person for whom the services are performed reserves a right to control not only is dependent on the alleged employer for his continued employment in that line of

the end to be achieved but also the means to be used in reaching such end. In business

addition to the standard of right-of-control, the existing economic conditions By applying the control test, it can be said that petitioner is an employee of Kasei

prevailing between the parties, like the inclusion of the employee in the Corporation because she was under the direct control and supervision of Seiji

payrolls, can help in determining the existence of an employer-employee Kamura, the corporation’s Technical Consultant. She reported for work regularly

relationship. and served in various capacities as Accountant, Liaison Officer, Technical

There are instances when, aside from the employer’s power to control the employee, Consultant, Acting Manager and Corporate Secretary, with substantially the same job

economic realities of the employment relations help provide a comprehensive functions, that is, rendering accounting and tax services to the company and

analysis of the true classification of the individual, whether as employee, performing functions necessary and desirable for the proper operation of the

independent contractor, corporate officer or some other capacity. corporation such as securing business permits and other licenses over an indefinite

period of engagement. Respondent corporation had the power to control petitioner
with the means and methods by which the work is to be accomplished.
Under the economic reality test, the petitioner can also be said to be an employee of
respondent corporation because she had served the company for 6 yrs. before her
dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th
month pay, bonuses and allowances, as well as deductions and Social Security
contributions from. When petitioner was designated General Manager, respondent
corporation made a report to the SSS. Petitioner’s membership in the SSS evinces
the existence of an employer-employee relationship between petitioner and
respondent corporation. The coverage of Social Security Law is predicated on the
existence of an employer-employee relationship.
2. The corporation constructively dismissed petitioner when it reduced her. This
amounts to an illegal termination of employment, where the petitioner is
entitled to full backwages
A diminution of pay is prejudicial to the employee and amounts to constructive
dismissal. Constructive dismissal is an involuntary resignation resulting in cessation
of work resorted to when continued employment becomes impossible, unreasonable
or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to an
employee. Petition is GRANTED.
G.R. No. 67035 January 29, 1993 (NO DIGEST AVAILABLE)
PHILIPPINE-SINGAPORE PORTS CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
DANIEL M. LUCAS, JR., and PERFECTO JARDIN, respondents.
Zamora, Soller, Baluyut & Mendoza Law Offices for petitioner.
Public Attorney's Office for private respondent.
BIDIN, J.:
This petition for certiorari with preliminary injunction and/or restraining order seeks
to reverse and set aside: (a) the May 29, 1981 Resolution of the National Labor
Relations Commission (NLRC) dismissing the appeal of the Philippine-Singapore
Ports Corporation (PSPC) from the Decision the Labor Arbiter dated January 3, 1980
ordering PSPC to pay Perfecto Jardin the sum of $3,800.00 or its peso equivalent at
the current rate of exchange representing the latter's wages for the unexpired portion
of his employment contract, and (b) the February 9, 1984 Resolution of the NLRC en
banc denying PSPC's motion for the reconsideration of its earlier Resolution.
The facts of the case are as follows:
PSPC is a corporation organized and existing under Philippine laws. On September
5, 1977, PSPC and Jardin entered into a contract of employment wherein the latter
was employed by the former as a winchman/signalman at the Commercial Islamic
Port of Jeddah in Saudi Arabia for a two-year period commencing in January, 1978.
On or about October 18, 1978, the PSPC Medical Director recommended that Jardin
be given priority in the schedule for rest and recreation (R and R) leave as he was
diagnosed to be in need of a fistulectomy due to "fistula in anu."
Jardin was sent back to the Philippines at PSPC's expense for medical treatment. At
the GSIS Hospital, Quezon City where he was treated and confined, his ailment was
diagnosed as "pruritis ani due to ancylostomiasis." On November 4, 1978, Jardin was
certified as fit to work by his attending physician at the said hospital. When he
reported to the PSPC on the same day, however, he was advised to file his
resignation papers.
Thus, on January 31, 1979, Jardin filed with the then Ministry of Labor, Region IV,
Manila, a complaint for illegal dismissal and recovery of backwages (R4-STF-1-787-
79). In its position paper, the PSPC prayed for the dismissal of the complaint
principally on the ground that under Art. 15 of the Labor Code (P.D. No. 442), the
Bureau of Employment Services and not the Labor Arbiter had jurisdiction over the
case because it involved the overseas employment of a Filipino worker.
In his decision of January 3, 1980, Labor Arbiter Daniel M. Lucas, Jr. did not pass
upon the issue of jurisdiction. He resolved the case on its merits and disposed of it as
follows:
WHEREFORE, respondent corporation is hereby ordered to pay
complainant the sum of $3,800.00 or, its equivalent in Peso,
Philippine Currency, at the current rate of exchange, representing
the latter's wages for the unexpired portion of his employment
contract.
SO ORDERED. (Rollo, p. 29).
In its appeal filed with the NLRC on February 19, 1980, PSPC reiterated its
contention that it is the Bureau of Employment Services that has jurisdiction over the
case and that, assuming that the Labor Arbiter had such jurisdiction, he gravely
abused his discretion in finding that Jardin had been illegally dismissed even in the
absence of evidentiary support thereon.
In the Resolution of May 21, 1981, the NLRC1 dismissed the appeal on the sole
ground that since Jardin had not been furnished with a copy of the appeal within the
reglementary period of ten days, no appeal had been duly perfected by the PSPC.
PSPC filed a motion for reconsideration of said Resolution alleging that it had
furnished Jardin with a copy of its memorandum of appeal which was attached to its
opposition to Jardin's motion for issuance of a writ of execution. The PSPC also
stressed that the Bureau of Employment Services and not the arbitration section of
the Ministry of Labor, had jurisdiction over the case. In the Resolution of February 9,
1984, the NLRC en banc 2 denied the motion for reconsideration and lifted the
injunction it had issued in the case. Mentioning the fact that PSPC had repeatedly
raised the issue of jurisdiction in all its previous cases without success, the NLRC
held that the case fell "within the ambit of compulsory arbitration." The NLRC also
ruled that PSPC's "belated service" of the appeal memorandum "did not cure the
infirmity of the appeal" and therefore the PSPC failed to comply within the
reglementary period with the mandatory requirements of an appeal (Rollo, pp. 59-
60).
Hence, the instant petition for certiorari filed by PSPC asserting that the Labor
Arbiter had no jurisdiction over the case and therefore the decision he had rendered
is null and void, that the NLRC abused its discretion in dismissing the appeal on the
technical ground of failure to furnish the adverse party with a copy of the appeal
memorandum, and that, granting that the Labor Arbiter had jurisdiction over the
case, he erred in finding that Jardin had been illegally dismissed.
The petition is impressed with merit.
When Jardin filed the complaint for illegal dismissal on January 31, 1979, Art. 217
(5) of the Labor Code provided that Labor Arbiters and he NLRC shall have
"exclusive jurisdiction to hear and decide" all cases arising from employer-employee
relations "unless expressly excluded by this Code." At that time, Art. 15 of the same
Code had been amended by P.D. No. 1412 which took effect on June 9, 1978. The
pertinent provision of the said presidential decree states:
Art. 15. Bureau of Employment Services. —
(a) . . . . . .
(b) The Bureau shall have the original and exclusive jurisdiction
over all matters or cases involving employer-employee relations
including money claims, arising out of or by virtue of any law or
contracts involving Filipino workers for overseas employment,
except seamen. The decisions of the Bureau shall be final and
executory subject to appeal to the Secretary of Labor whose
decisions shall be final and inappealable.
Considering that private respondent Jardin's claims undeniably arose out of an
employer-employee relationship with petitioner PSPC and that private respondent
worked overseas or in Saudi Arabia, the Bureau of Employment Services and not the
Labor Arbiter had jurisdiction over the case. "Overseas employment" is defined by
Art. 13(h) of the Labor Code as "employment of a worker outside the Philippines."
Since the definition does not make a distinction regarding the nationality of the
employer, Filipino employers who deploy their employees abroad should be deemed
covered by the definition (See: Philippine National Construction Corporation v.
NLRC, 193 SCRA 401 [1991]).
Art. 15 was further amended by P.D. No. 1691 which took effect on May 1, 1990.
Such amendment qualified the jurisdiction of the Bureau of Employment Services as
follows:
(b) The regional offices of the Ministry of Labor shall have the
original and exclusive jurisdiction over all matters or cases
involving employer-employee relations including money claims,
arising out of or by virtue of any law or contracts involving
Filipino workers for overseas employment except
seamen; Provided, That the Bureau of Employment Services may,
in the case of the National Capital Region, exercise such power,
whenever the Minister of Labor deems it appropriate. The
decisions of the regional offices or the Bureau of Employment
Services if so authorized by the Minister of Labor as provided in
this Article, shall be appealable to the National Labor Relations
Commission upon the same grounds provided in Article 223
 hereof. The decisions of the National Labor Relations Commission
shall be final and inappealable.
Hence, as further amended, Art. 15 provided for concurrent jurisdiction between the
regional offices of the then Ministry of Labor and the Bureau of Employment
Services "in the case of the National Capital Region." It is noteworthy that P.D. No.
1691, while likewise amending Art. 217 of the Labor Code, did not alter the
provision that Labor Arbiters shall have jurisdiction over all claims arising from
employer-employee relations "unless expressly excluded by this Code."
The functions of the Bureau of Employment Services were subsequently assumed by
the Philippine Overseas Employment Administration (POEA) on May 1, 1982 by
virtue of Executive Order No. 797 by granting the POEA "original and exclusive
jurisdiction over all cases, including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract involving Filipino workers
for overseas employment, including seamen" (Sec. 4(a); Eastern Shipping Lines v.
Philippine Overseas Employment Administration [POEA], 200 SCRA 663 [1991]).
This development showed the legislative authority's continuing intent
to exclude from the Labor Arbiter's jurisdiction claims arising from overseas
employment.
These amendments notwithstanding, when the complaint for illegal dismissal was
filed on January 31, 1979, under Art. 15, as amended by P.D. No. 1412, it was the
Bureau of Employment Services which had jurisdiction over the case and not the
Labor Arbiters. It is a settled rule that jurisdiction is determined by the statute in
force at the time of the commencement of the action (Municipality of Sogod v.
Rosal, 201 SCRA 632, 637 [1991]). P.D. No. 1691 which gave the regional offices
of the Ministry of Labor concurrent jurisdiction with the Bureau of Employment
Services, was promulgated more than a year after the complaint was filed.
It is indubitable that at the time the Labor Arbiter took cognizance of the complaint
for illegal dismissal, he was devoid of jurisdiction. Consequently, the decision
promulgated by him is null and void having been rendered without jurisdiction and
may be struck down any time — even on appeal to the Supreme Court (Suarez v.
Court of Appeals, 186 SCRA 339 [1990]).
On the issue of whether or not the NLRC abused its discretion in dismissing the
appeal on the technical ground of failure to furnish the adverse party with a copy of
the appeal memorandum, the ruling of the Court in Remerco Garments
Manufacturing v. Minister of Labor and Employment (135 SCRA 167, 178 [1985]) is
squarely in point. The Court said therein:
when it deserts its proper office as an aid to justice and become its
great hindrance and chief enemy, deserves scant consideration
from court." In a more forceful language, Mr. Chief Justice
Enrique M. Fernando, speaking for the Court, in Meracap vs.
International Ceramics Manufacturing Co., Inc. stated that "from
the strictly juridical standpoint, it cannot be too strongly stressed,
to follow Davis in his masterly work, Discretionary Justice, that
where a decision may be made to rest on informed judgment rather
than rigid rules, all the equities of the case must be accorded their
due weight. Finally, labor law determinations, to quote from
Bultmann, should be not only secundum retionem but
also secundum caritatem." More recently, we held that in appeals
in labor cases, non-service of the copy of appeal or appeal
memorandum to the adverse party is not a jurisdictional defect, and
does not justify dismissal of the appeal. Likewise, it was held that
dismissal of an employee's appeal on a purely technical ground is
inconsistent with the constitutional mandate on protection to labor.
The NLRC therefore arbitrarily and despotically exercised its power by evading its
positive duty to entertain the appeal on a purely technical ground. As the Court said
in Rapid Manpower Consultants, Inc. v. NLRC 190 SCRA 747, 752 [1990]),
"(t)echnicality should not be allowed to stand in the way of equitably and completely
resolving the rights and obligations of the parties." In view of the clear lack of
jurisdiction on the part of the Labor Arbiter over the complaint for illegal dismissal
filed by private respondent, and the apparent abuse of discretion on the part of the
NLRC in refusing to resolve petitioner's appeal, there is no reason to discuss the
merits of the case.
WHEREFORE, the instant petition for certiorari is GRANTED and the proceedings
below NULLIFIED but without prejudice to the right of private respondent Perfecto
Jardin to refile with the Philippine Overseas Employment Administration his claim
against the petitioner Philippine-Singapore Ports Authority.
SO ORDERED.
Gutierrez, Jr., Davide, Jr., Romero and Melo, JJ., concur.

. . . The mere failure to furnish copy of the appeal memorandum to

adverse party is not a fatal defect. We have consistently adhered to
the principle clearly held in Alonso vs. Villamor that "technicality