BENARES VS PANCHO

FACTS:
On July 24, 1991, complainants thru counsel wrote the Regional Director of the Department of Labor and Employment,
Bacolod City for intercession particularly in the matter of wages and other benefits mandated by law. On September
24, 1991, a routine inspection was conducted by personnel of the Bacolod District Office of the Department of Labor
and Employment. Accordingly, a report and recommendation was made, hence, the endorsement by the Regional
Director of the instant case to the Regional Arbitration Branch, NLRC, Bacolod City for proper hearing and disposition.
On October 15, 1991, complainants alleged to have been terminated without being paid termination benefits by
respondent in retaliation to what they have done in reporting to the Department of Labor and Employment their working
conditions viz-a-viz (sic) wages and other mandatory benefits.

On July 14, 1992, notification and summons were served to the parties wherein complainants were directed to file a
formal complaint. On July 28, 1992, a formal complaint was filed for illegal dismissal with money claims. From the
records, summons and notices of hearing were served to the parties and apparently no amicable settlement was
arrived, hence, the parties were directed to file their respective position papers. On January 22, 1993, complainant
submitted their position paper, while respondent filed its position paper on June 21, 1993. On March 17, 1994,
complainants filed their reply position paper and affidavit. Correspondingly, a rejoinder was filed by respondent on May
16, 1994. On August 17, 1994, from the Minutes of the scheduled hearing, respondent failed to appear, and that the
Office will evaluate the records of the case whether to conduct a formal trial on the merits or not, and that the
corresponding order will be issued.

On January 16, 1996, the Labor Arbiter issued an order to the effect that the case is now deemed submitted for
resolution.

On April 30, 1998, the Labor Arbiter a quo issued the assailed decision dismissing the complaint for lack of merit.

On June 26, 1998, complainants not satisfied with the aforecited ruling interposed the instant appeal before the NLRC.
The NLRC held that respondents attained the status of regular seasonal workers of Hda. Maasin II having worked
therein from 1964-1985. It found that petitioner failed to discharge the burden of proving that the termination of
respondents was for a just or authorized cause. Hence, respondents were illegally dismissed and should be awarded
their money claims.The Court of Appeals affirmed the NLRC’s ruling, with the modification that the backwages and
other monetary benefits shall be computed from the time compensation was withheld in accordance with Article 279
of the Labor Code, as amended by Republic Act No. 6715.

ISSUE: W/N the petitioner is guilty of illegal dismissal with money claims.

HELD: YES, the Supreme Court dismissed the instant petition and affirmed the Decision of the Court of Appeals base
on the following premise:

Petitioner underscores the NLRC decision’s mention of the “payroll” she presented despite the fact that she allegedly
presented 235 sets of payroll, not just one payroll. This circumstance does not in itself evince any grave abuse of
discretion on the part of the NLRC as it could well have been just an innocuous typographical error.Verily, the NLRC’s
decision, affirmed as it was by the Court of Appeals, appears to have been arrived at after due consideration of the
evidence presented by both parties.The SC finds no reason to disturb the finding that respondents were illegally
terminated. When there is no showing of clear, valid and legal cause for the termination of employment, the law
considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was
for a just or authorized cause.25 In this case, as found both by the NLRC and the Court of Appeals, petitioner failed to
prove any such cause for the dismissal of respondents.
FRANCISCO VS NLRC

Facts:

Petitioner Angelina Francisco was hired by respondent Kasei Corporation during its incorporation
stage as Accountant and Corporate Secretary and later as Liaison Officer. Subsequently she was
also designated Acting Manager until replaced, but was assured by the company that she was
still connected as Technical Consultant. Thereafter, Kasei Corporation reduced petitioner’s salary
until it was later withheld despite repeated follow-ups. Petitioner once again asked for her salary
but was informed that she is no longer connected with the company. Petitioner thus filed an action
for constructive dismissal before the Labor Arbiter. Respondent Kasei Corporation averred that
petitioner is not their employee as she performed her work at her own discretion without their
control and supervision. Both the Labor Arbiter and NLRC tribunal found for petitioner. CA
reversed the decision.

Issue:
Whether or not there was employer-employee relationship between the parties.

Ruling: YES.

In certain cases the control test is not sufficient to give a complete picture of the relationship
between the parties, owing to the complexity of such a relationship where several positions have
been held by the worker. The better approach would therefore be to adopt a two-tiered test
involving: (1) the putative employer’s 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.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation
because she was under the direct control and supervision of Seiji Kamura, the corporation’s
Technical Consultant. She reported for work regularly and served in various capacities as
Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary, with
substantially the same job functions, that is, rendering accounting and tax services to the
company and performing functions necessary and desirable for the proper operation of the
corporation such as securing business permits and other licenses over an indefinite period of
engagement.

Under the broader economic reality test, the petitioner can likewise be said to be an employee of
respondent corporation because she had served the company for six years 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. Petitioner’s membership in
the SSS as manifested by a copy of the SSS specimen signature card which was signed by the
President of Kasei Corporation and the inclusion of her name in the on-line inquiry system of the
SSS evinces the existence of an employer-employee relationship between petitioner and
respondent corporation. It is therefore apparent that petitioner is economically dependent on
respondent corporation for her continued employment in the latter’s line of business.
Villamaria v CA (Labor Standards)

FACTS:

- Oscar Villamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship engaged in assembling
passenger jeepneys with a public utility franchise to operate along the Baclaran-Sucat route. By 1995,
Villamaria stopped assembling jeepneys and retained only nine, four of which operated by employing
drivers on a “boundary basis.” One of those drivers was respondent Bustamante.

- Bustamante remitted 450 a day to Villamaria as boundary and kept the residue of his daily earnings as
compensation for driving the vehicle. In August 1997, Villamaria verbally agreed to sell the jeepney to
Bustamante under a “boundary-hulog scheme”, where Bustamante would remit to Villamaria P550 a day
for a period of 4 years; Bustamane would then become the owner of the vehicle and continue to drive the
same under Villamaria’s franchise, but with Php 10,000 downpayment.

- August 7, 1997, Villamaria executed a contract entitled “Kasunduan ng Bilihan ng Sasakyan sa

Pamamagitan ng Boundary Hulog”. The parties agreed that if Bustamante failed to pay the boundary-
hulog for 3 days, Villamaria Motors would hold on to the vehicle until Bustamante paid his arrears,
including a penalty of 50 a day; in case Bustamante failed to remit the daily boundary-hulog for a period
of one week, the Kasunduan would cease to have the legal effect and Bustamante would have to return
the vehicle to Villamaria motors.

- In 1999, Bustamante and other drivers who also had the same arrangement failed to pay their
respective boundary-hulog. The prompted Villamaria to serve a “Paalala”. On July 24, 2000. Villamaria
took back the jeepney driven by Bustamante and barred the latter from driving the vehicle.
- Bustamante filed a complaint for Illegal Dismissal.

DECISION OF LOWER COURTS:

*Labor Arbiter: petition dismissed.
*NLRC: dismissed appeal.
*CA: reversed NLRC, awarded Bustamante separation pay and backwages.
Hence, this petition for review on certiorari.

ISSUES:

(1) WON the existence of a boundary-hulog agreement negates the employer-employee relationship
between the vendor and vendee

(2) WON the Labor Arbiter has jurisdiction over a complaint for illegal dismissal in such a case.

HELD:

(1) NO. Under the boundary-hulog scheme, a dual juridical relationship is created; that of employer-
employee and vendor-vendee. The Kasanduan did not extinguish the employer employee relationship of
the parties existing before the execution of said deed.
a. Under this system the owner/operator exercises control and supervision over the driver. It is unlike in
lease of chattels where the lessor loses complete control over the chattel leased but the lessee is still
ultimately responsible for the consequences of its use. The management of the business is still in the
hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it
that the driver follows the route prescribed by the franchising and regulatory authority, and the rules
promulgated with regard to the business operations.
b. The driver performs activities which are usually necessary or desirable in the usual business or trade of
the owner/operator. Under the Kasunduan, respondent was required to remit Php 550 daily to petitioner,
an amount which represented the boundary of petitioner as well as respondent’s partial payment (hulog)
of the purchase price of the jeepney. Thus, the daily remittances also had a dual purpose: that of
petitioner’s boundary
and respondent’s partial payment (hulog) for the vehicle.
c. The obligation is not novated by an instrument that expressly recognizes the old one,
changes only the terms of payment and adds other obligations not incompatible with the old
provisions or where the contract merely supplements the previous one.
d. The existence of an employment relation is not dependent on how the worker is paid but on the
presence or absence of control over the means and method of the work. The amount earned in excess of
the “boundary hulog” is equivalent to wages and the fact that the power of dismissal was not mentioned in
the Kasunduan did not mean that private respondent never exercised such power, or could not exercise
such power.

(2) YES. The Labor Arbiter and the NLRC has jurisdiction under Article 217 of the Labor Code is limited to
disputes arising from an employer-employee relationship which can only be resolved by reference to the
Labor Code, other labor statues of their collective bargaining agreement.

OTHER NOTES:
(1) The rule is that the nature of an action and subject matter thereof, as well as, which court or agency of
the government has jurisdiction and the character of the reliefs prayed for, whether or not the
complainant/plaintiff is entitled to any or all of such reliefs.
(2) Not every dispute between an employer and employee involves matters that only the Labor Arbiter
and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. Actions between
employers and employees where the employer-employee relationship is merely incidental is within the
exclusive original jurisdiction of the regular courts.
JARDIN VS NLRC

Facts:

Petitioners were drivers of private respondent’s taxicabs under the boundary system whose
earnings were regularly deducted washing fee for the taxi units. Petitioners decided to form a
labor union to protect their rights and interests on the belief that the deductions made were illegal.
Upon learning, respondent refused to let petitioners drive their taxicabs when they reported for
work. Aggrieved, petitioners filed a complaint for illegal dismissal with the Labor Arbiter but the
latter dismissed said complaint. On appeal, the NLRC tribunal declared that petitioners are
employees of private respondent. On reconsideration however, the decision was reversed by the
NLRC tribunal and held that no employer-employee relationship between the parties exists.

Issue:

Whether or not petitioner taxi drivers are employees of respondent company.

Ruling:

YES.
In a number of cases decided by this Court, we ruled that the relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary system is
that of employer-employee and not of lessor-lessee. In the case of jeepney owners/operators and
jeepney drivers, the former exercise supervision and control over the latter. The management of
the business is in the owner’s hands. The owner as holder of the certificate of public convenience
must see to it that the driver follows the route prescribed by the franchising authority and the rules
promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages
but get only that in excess of the so-called “boundary” they pay to the owner/operator is not
sufficient to withdraw the relationship between them from that of employer and employee. We
have applied by analogy the doctrine to the relationships between bus owner/operator and bus
conductor, auto-calesa owner/operator and driver, and recently between taxi owners/operators
and taxi drivers. Hence, petitioners are undoubtedly employees of private respondent because
as taxi drivers they perform activities which are usually necessary or desirable in the usual
business or trade of their employer.