G.R. No. 199232 performance validation; and (4) the board interview.
Only
ROBERTO EMMANUEL T. FELICIANO
vs.
DEPARTMENT OF NATIONAL DEFENSE, represented by
SEC. VOLTAIRE T. GAZMIN
Facts:
Roberto Emmanuel T. Feliciano possessed a CSEE3 and
served as Assistant Secretary of the DND. Horacio S.
Gonzalez, who also had a CSEE5 held the position of Chief
of the Administrative Service Office of the DND.
On June 30, 2010, Executive Secretary Paquito N. Ochoa
issued Memorandum Circular No. 1. Pursuant to
Memorandum Circular No. 1, DND Sec. Voltaire T. Gazmin
issued Department Order No. 154 to terminate 11 officials
of the DND, including Gonzalez, on account of their lack of
the CSEE; and to re-designate Feliciano as Assistant
Secretary for Strategic Assessment of the DND.
Subsequently, on July 13, 2010, Feliciano received
Department Order No. 163 terminating his designation
and services as Assistant Secretary for Strategic
Assessment. Aggrieved, the petitioners filed their
respective appeals by letters-complaint in the CSC on the
ground of illegal termination.
The DND, through Sec. Gazmin, countered the letters-
complaint of the petitioners by citing Memorandum
Circular No. 1 to the effect that all non-CESO officials
occupying CES positions in all agencies of the Executive
Branch would remain in office until their respective
replacements were appointed and qualified, whichever
came first; and that the petitioners, not being CESOs for
having failed to complete all the necessary requisites, did
not enjoy security of tenure.
CSC: Termination of petitioners is illegal. CSC ordered
Secretary Voltaire T. Gazmin to reinstate the petitioners.
CA: Termination of Feliciano as valid because he lacked
the required CSEE to secure his CES position at the DND at
the time the assailed memorandum was issued. He had
not completed the four-staged process for the CSEE.
The termination of Gonzalez was valid. Although he had
already been conferred the CSEE by the CSC and could be
recommended by the CESB for appointment to the CESO
ranks by the President, the fact that he still had to
accomplish or complete the remaining two stages
Issue:
Whether or not the CA gravely erred in finding the
petitioners' termination valid
Ruling:
Termination of petitioners was valid. The petitioners did
not possess the required CSEE despite their insistence on
having such eligibility. For an individual to attain his CSEE
he must undergo and hurdle the four-staged CESE
examination process, namely: (1) the CES written
examination; (2) the assessment center; (3) the
upon the completion of the four stages of the examination
process could he deserve the CSEE. The petitioners did not
yet completely comply with CESB Resolution No. 811
because they did not complete the processes to obtain
their CSEE. Without the CSEE, they were not entitled to
security of tenure. In the CES, the attainment of security
of tenure presupposes a permanent appointment. The
petitioners were undisputedly not yet holders of CSEE. The
effect is that their appointments remained temporary, a
status that denied them security of tenure.
G.R. No. 180845
GOV. AURORA E. CERILLES vs.
CIVIL SERVICE COMMISSION
Facts:
On November 7, 2000, Republic Act No. 8973 entitled "An
Act creating the Province of Zamboanga Sibugay from the
Province of Zamboanga del Sur" was passed. As a
consequence thereof, the Internal Revenue Allotment
(IRA) of the province of Zamboanga del Sur was reduced
by 36%. Because of such reduction, petitioner sought the
opinion of public respondent [CSC] on the possibility of
reducing the workforce of the provincial government.
Subsequently on August 21, 2001, the Sangguniang
Panlalawigan of Zamboanga del Sur passed a resolution
approving the new staffing pattern of the provincial
government consisting only of 727 positions.
Petitioner appointed employees to the new positions in
the provincial government. The private respondents were
among those who were occupying permanent positions in
the old plantilla and have allegedly been in the service for
a long time but were not given placement preference and
were instead terminated without valid cause and against
their will. On various dates, private respondents filed their
respective letters of appeal respecting their termination
with petitioner.
CSCRO: It found that the subject appointments violated
Republic Act No. (RA) 66567 for allegedly failing to grant
preference in appointment to employees previously
occupying permanent positions in the old plantilla. As a
result, the CSCRO invalidated a total of ninety-six (96)
appointments made by Gov. Cerilles after the
reorganization.
CSCRO issued an Omnibus Order directing the
reinstatement of Respondents to their former positions.
CSC: CSC dismissed the appeal of Gov. Cerilles.
CA: CA proceeded to resolve the petition and upheld the
CSCRO's jurisdiction to entertain the appeals of
Respondents. Notably, however, no discussion was made
on the CSC's power to invalidate the subject
appointments.
Issue:
Whether or not the termination was valid
Ruling:
RA 6656 was enacted to implement the State's policy of
protecting the security of tenure of officers and
employees in the civil service during the reorganization of
government agencies. However, an officer or employee
may be validly removed from service pursuant to a bona
fide reorganization; in such case, there is no violation of
security of tenure and the aggrieved employee has no
cause of action against the appointing authority. If, on the
other hand, the reorganization is done in bad faith, as
when the enumerated circumstances in Section 2 are
present, the aggrieved employee, having been removed
without valid cause, may demand for his reinstatement or
reappointment. Officers and employees holding
permanent appointments in the old staffing pattern shall
be given preference for appointment to the new positions
in the approved staffing pattern, which shall be
comparable to their former position or in case there are
not enough comparable positions, to positions next lower
in rank. No new employees shall be taken in until all
permanent officers and employees have been appointed
unless such positions are policy-determining, primarily
confidential, or highly technical in nature.
The reorganization of the Province of Zamboanga del Sur
was tainted with bad faith.
Reorganization is a recognized valid ground for separation
of civil service employees, subject only to the condition
that it be done in good faith. A reorganization in good
faith is one designed to trim the fat off the bureaucracy
and institute economy and greater efficiency in its
operation.
Applying the foregoing to the facts of this case, the Court
finds that Respondents were able to prove bad faith in the
reorganization of the Province of Zamboanga del Sur. First,
the appointments made by Gov. Cerilles violated the rule
on preference and non-hiring of new employees. While
the relative scale of invalidated appointments does not
conclusively rule out good faith, there is, at the very least,
a strong indication that the reorganization was motivated
not solely by the interest of economy and efficiency, but
as a systematic means to circumvent the security of
tenure of the ninety-six (96) employees affected. Second,
Respondents were replaced by either new employees or
those holding lower positions in the old staffing pattern -
circumstances that may be properly appreciated as
evidence of bad faith. Moreover, the Court notes that the
positions of Respondents were not even abolished.
However, instead of giving life to the clear mandate of RA
6656 on preference, Gov. Cerilles terminated Respondents
from the service and forthwith appointed other
employees in their stead. Neither did Gov. Cerilles, at the
very least, demote them to lesser positions if indeed there
was a reduction in the number of positions corresponding
to Respondents' previous positions. This is clear indication
of bad faith. Respondents are entitled to no less than
reinstatement to their former positions without loss of
seniority rights and shall be entitled to full backwages
from the time of their separation until actual
reinstatement; or, in the alternative, in case they have
already compulsorily retired during the pendency of this
case, they shall be awarded the corresponding retirement
benefits during the period for which they have been
retired.
G.R. No. 197762
CAREER EXECUTIVE SERVICE BOARD vs CIVIL SERVICE
COMMISSION
Facts:
On 24 September 2010, the PAO received a copy of the
CESB Report on the CES Occupancy of the Department of
Justice (DOJ). This document stated, among others, that
out of 35 filled positions in the PAO, 33 were occupied by
persons without the required CES eligibility. PAO informed
CESB that the positions of Chief Public Attorney, Deputy
Chief Public Attorneys, and Regional Public Attorneys
were already permanent in nature pursuant to Section 68
of R.A. 9406, which accorded security of tenure to the
occupants thereof.
DOJ Legal Opinion:
1. Based on the foregoing, your claim that the
appointments of the top-level officials of the PAO
are permanent is without merit. For one, the
positions of the Chief Public Attorney, Deputy
Chief Public Attorney and Regional Public
Attorneys are part of the CES.
2. Since the Chief Public Attorney, Deputy Chief
Public Attorneys and Regional Public Attorneys are
occupying CES positions, it is required by law that
they should be CES eligibles to become permanent
appointees to the said position.
This leads to the inevitable conclusion that the
appointments of the Chief Public Attorney, Deputy Chief
Public Attorneys and Regional Public Attorneys are not
permanent, despite your claims to the contrary,
considering that they do not possess the required CES
eligibility for the said positions. As such, they cannot
invoke their right to security of tenure even if it was
expressly guaranteed to them by the PAO Law.
Considering that the appointments of the Chief Public
Attorney, Deputy Chief Public Attorneys and Regional
Public Attorneys are temporary, they are required to
subsequently take the CES examination. In the absence of
any evidence that would show compliance with the said
condition, it is presumed that the top-level officials of the
PAO are non-CES eligibles; therefore they may be
removed from office by the appointing authority without
violating their constitutional and statutory rights to
security of tenure.
The CSC Legal Opinion:
It is the Commission's opinion that for purposes of
permanent appointment to the positions of Chief Public
Attorney, Deputy Chief Public Attorney and Regional
Public Attorney, no third level eligibility is required but
only RA 1080 (BAR) civil service eligibility.
CESB Resolution No. 918:
CESB noted that the positions in question "require
leadership and managerial competence"and were thus
part of the CES. Hence, the appointment of persons
without third-level eligibility for these posts cannot be
considered permanent.
CSC: It declared that the CESB would be in violation of R.A.
9406 if the latter would require an additional qualification
- in this case, third-level eligibility - for purposes of
permanent appointments to certain PAO positions.
Issue:
Whether the CSC acted in accordance with law when it
reversed the CESB and declared that third-level eligibility
is not required for occupants of the subject PAO positions
Ruling:
The CSC acted within its jurisdiction when it resolved the
PAO's appeal and reversed CESB Resolution No. 918. This
Court must ensure that the respective powers and
functions of the CSC and the CESB are well-defined. After
analyzing and harmonizing the legal provisions pertaining
to each of these two agencies, the Court concludes that
the CSC has the authority to review CESB Resolution No.
918. We have arrived at this conclusion after a
consideration of (a) the broad mandate of the CSC under
the Constitution and the Administrative Code; and (b) the
specific and narrowly tailored powers granted to the CESB
in the Integrated Reorganization Plan and the
Administrative Code.
It is a basic principle in statutory construction that statutes
must be interpreted in harmony with the Constitution and
other laws. In this case, the specific powers of the CESB
over members of the CES must be interpreted in a manner
that takes into account the comprehensive mandate of
the CSC under the Constitution and other statutes.
As previously discussed, the CSC, as the central personnel
agency of the government, is given the comprehensive
mandate to administer the civil service under Article IX-B,
Section 3 of the 1987 Constitution; and Section 12, Items
(4), (5), and (14) of the Administrative Code. It has also
been expressly granted the power to promulgate policies,
standards, and guidelines for the civil service; and to
render opinions and rulings on all personnel and other
civil service matters.
Here, the question of whether the subject PAO positions
belong to the CES is clearly a civil service matter falling
within the comprehensive jurisdiction of the CSC. Further,
considering the repercussions of the issue concerning the
appointments of those occupying the posts in question,
the jurisdiction of the CSC over personnel actions is
implicated.
The CSC correctly ruled that third level eligibility is not
required for the subject positions.
After a careful consideration of the relevant statutes and
rules, this Court agrees with the conclusion of the CSC. To
require the occupants of the subject PAO positions to
possess third-level eligibility would be to amend the law
and defeat its spirit and intent. The authority to prescribe
qualifications for positions in the government is lodged in
Congress as part of its plenary legislative power to create,
abolish and modify public offices to meet societal
demands. From this authority emanates the right to
change the qualifications for existing statutory offices.
Based on the foregoing, it is clear that occupants of the
subject PAO positions are only mandated to comply with
requirements as to age, citizenship, education, and
experience. Since third-level eligibility is not at all
mentioned in the law, it would be improper for the CESB
to impose this additional qualification as a prerequisite to
permanent appointments. To do so would be to amend
the law and to overrule Congress.
G.R. No. 225075, June 19, 2019
ARNULFO M. FERNANDEZ v. KALOOKAN
SLAUGHTERHOUSE INCORPORATED
Facts:
According to petitioner, he was hired in 1994 as a butcher
by Kalookan Slaughterhouse, a single proprietorship
owned by respondent Emesto Cunanan. He claimed that
he worked from Monday to Sunday, from 6:30P.M. to
7:30A.M., with a daily wage of P700.00, which was later
reduced to P500.00. He further claimed that he met an
accident while driving Kalookan Slaughterhouse’s truck in
December 2013 and deductions were made from his
wages. He questioned these deductions in July 2014, and
thereafter he was treated unreasonably. Petitioner further
claimed that on July 21, 2014, he suffered from a
headache and did not report for work. The next day,
however, he was shocked when he only received P200.00
due to his previous under time and was informed that he
could no longer report for work due to his old age.
Kalookan Slaughterhouse, on the other hand, asserted
that petitioner is an independent butcher working under
its Operation Supervisor. He received payment based on
the number of hogs he butchered and was only required
to be in the slaughterhouse when customers brought hogs
to be slaughtered. Kalookan Slaughterhouse alleged that it
imposed policies on the entry to the premises, which
applied to employees, dealers, independent butchers, hog
and meat dealers and trainees. According to Kalookan
Slaughterhouse, petitioner violated the policies and he
misconstrued the disallowance to enter the
slaughterhouse as an act of dismissal.
LA: There being employer-employee relationship,
complainant has been illegally dismissed by the
respondents as a regular employee.
NLRC: Petitioner was an independent contractor and not
an employee of Kalookan Slaughterhouse because there
was no regular payroll showing his name and the legal
deductions made from his salary.
CA: Petitioner's claim of the existence of an employer-
employee relationship is not supported by substantial
evidence as he failed to submit salary vouchers, pay slips,
daily work schedule and even a certificate of withholding
tax on compensation income.
Issue:
Whether or not the petitioner was illegally dismissed
Ruling:
The Court finds that the NLRC and the CA committed a
grave error and agrees with the LA.
Petitioner was an employee of Kalookan Slaughterhouse.
It is settled that to determine the existence of an
employer--employee relationship, four elements
generally need to be considered, namely: (1) the
selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4)
the power to control the employee's conduct. These
elements or indicators comprise the so-called 'four-fold'
test of employment relationship."
Kalookan Slaughterhouse, through Tablit, was the one
who engaged petitioner, paid for his salaries, and in effect
had the power to dismiss him. Further, Kalookan
Slaughterhouse exercised control over petitioner's
conduct through De Guzman. To the mind of the Court,
Kalookan Slaughterhouse was petitioner's employer and it
exercised its rights as an employer through Tablit and De
Guzman, who were its employees.
Petitioner was illegally dismissed and entitled to his
money claims.
Having been illegally dismissed, the LA was correct in
awarding back wages and separation pay.
G.R. No. 194765, April 23, 2018
MARSMAN & COMPANY, INC. v. RODIL C. STA. RITA
Facts:
Petitioner Marsman, a domestic corporation, which was
engaged in the business of distribution and sale of
pharmaceutical and consumer products for different
manufacturers within the country, temporarily hired Sta.
Rita on as a warehouse helper and paid him monthly
wage. After the contract expired, Marsman rehired Sta.
Rita as a warehouseman and placed him on probationary
status with pay. Marsman then confirmed Sta. Rita’s
status as a regular employee and adjusted his monthly
wage. Later, Sta. Rita joined Marsman Employees Union
(MEU), the recognized sole and exclusive bargaining
representative of Marsman's employees. Marsman
administered Sta. Rita's warehouse assignments. Initially,
Marsman assigned her to work in its GMA warehouse,
later then transferred to the Warehouses C and E of Kraft
General Foods, Inc. Sometime in July 1995; Marsman
purchased Metro, a company that was also engaged in the
distribution and sale of pharmaceutical and consumer
products, from Metro Pacific, Inc. The similarity in
Marsman's and Metro Drug's business led to the
integration of their employees which was formalized in a
Memorandum of Agreement (MOA). Concomitant to the
integration of employees is the transfer of all office, sales
and warehouse personnel of Marsman to Metro Drug and
the latter’s assumption of obligation with regard to the
affected employees' labor contracts and Collective
Bargaining Agreement. The integration and transfer of
employees ensued out of the transitions of Marsman and
CPDSI into, respectively, a holding company and an
operating company. Thereafter, on November 7, 1997,
Metro Drug amended its Articles of Incorporation by
changing its name to "Consumer Products Distribution
Services, Inc." (CPDSI)- which was approved by the SEC. In
the meantime, on an unspecified date, CPDSI contracted
its logistic services to EAC Distributors (EAC). CPDSI and
EAC agreed that CPDSI would provide warehousemen to
EAC's tobacco business which operated in EAC-Libis
Warehouse. A letter issued by Marsman confirmed Sta.
Rita’s appointment as one of the warehousemen for EAC-
Libis Warehouse. Parenthetically, EAC's use of the EAC-
Libis Warehouse was dependent upon the lease contract
between EAC and Valiant Distribution (Valiant), owner of
the EAC-Libis Warehouse. Hence, EAC's operations were
affected when Valiant decided to terminate their contract
of lease on January 31, 2000. In response to the cessation
of the contract of lease, EAC transferred their stocks into
their own warehouse and decided to operate the business
by themselves, thereby ending their logistic service
agreement with CPDSI. This sequence of events left CPDSI
with no other option but to terminate the employment of
those assigned to EAC-Libis Warehouse, including Sta.
Rita. According to CPDSI, she was terminated due to
redundancy. Aggrieved, Sta. Rita filed a complaint in the
NLRC against Marsman for illegal dismissal with damages.
Sta. Rita alleged that his dismissal was without just or
authorized cause and without compliance with procedural
due process. Marsman filed a Motion to Dismiss on the
premise that the Labor Arbiter had no jurisdiction over the
complaint for illegal dismissal because Marsman is not Sta.
Rita's employer. Marsman averred that the MOA
effectively transferred Sta. Rita's employment from
Marsman and Company, Inc. to CPDSI.
LA: Found Marsman as Sta.Rita’s employer and declared it
guilty of illegal dismissal.
NLRC: On the contrary, found that using the four-fold test,
there is no employee-employer relationship.
CA: Held that Marsman was Sta. Rita's employer because
Sta. Rita was allegedly not part of the integration of
employees between Marsman and CPDSI.
Issue:
Whether or not an employer-employee relationship
existed between Marsman and Sta. Rita at the time of Sta.
Rita's dismissal?
Ruling:
Sta. Rita failed to satisfy the four-fold test which
determines the existence of an employer-employee
relationship. The elements of the four-fold test are: 1) the
selection and engagement of the employees; 2) the
payment of wages; 3) the power of dismissal; and 4) the
power to control the employee's conduct. There is no hard
and fast rule designed to establish the aforesaid elements.
Any competent and relevant evidence to prove the
relationship may be admitted. Identification cards, cash
vouchers, social security registration, appointment letters
or employment contracts, payrolls, organization charts,
and personnel lists, serve as evidence of employee status.
A labor contract merely creates an action in personam and
does not create any real right which should be respected
by third parties. This conclusion draws its force from the
right of an employer to select his/her employees and
equally, the right of the employee to refuse or voluntarily
terminate his/her employment with his/her new employer
by resigning or retiring. That CPDSI took Sta. Rita into its
employ and assigned him to one of its clients signified the
former's acquiescence to the transfer. The MOA clearly
reflected Marsman's intention to transfer all employees to
CPDSI.
It is clear under the terms of the Memorandum of
Agreement that Marsman may continue to negotiate and
address issues with the Union even after the signing and
execution of said agreement in the course of fully
implementing the transfer to, and the integration of
operations with, CPDSI. To prove the element on the
payment of wages, Sta. Rita submitted forms for leave
application, with either Marsman's logo or CPDSI's logo. In
any event, the forms for leave application did not
sufficiently establish that Marsman paid Sta. Rita's wages.
Sta. Rita could have presented pay slips salary vouchers,
payrolls, certificates of withholding tax on compensation
income or testimonies of his witnesses. The submission of
his SSS ID only proved his membership in the social
insurance program. Sta. Rita should have instead
presented his SSS records which could have reflected his
contributions, and the name and address of his employer.
Thus, Sta. Rita fell short in his claim that Marsman still had
him in its payroll at the time of his dismissal. As to the
power of dismissal, the letter dated January 14, 2000
clearly indicated that CPDSI, and not Marsman,
terminated Sta. Rita's services by reason of redundancy.
Finally, Sta. Rita failed to prove that Marsman had the
power of control over his employment at the time of his
dismissal. The power of an employer to control the work
of the employee is considered the most significant
determinant of the existence of an employer-employee
relationship. Control in such relationships addresses the
details of day to day work like assigning the particular task
that has to be done, monitoring the way tasks are done
and their results, and determining the time during which
the employee must report for work or accomplish his/her
assigned task. The Court likewise takes notice of the
company IDs attached in Sta. Rita's pleading. The "old" ID
bore Marsman's logo while the "new" ID carried Metro
Drug's logo. The Court has held that in a business
establishment, an identification card is usually provided
not only as a security measure but mainly to identify the
holder thereof as a bona fide employee of the firm that
issues it. Thus the "new" ID confirmed that Sta. Rita was
an employee of Metro Drug, which, to reiterate, later
changed its name to CPDSI.
AMERICAN POWER CONVERSION CORP v LIM
January 11, 2018, Del Castillo
Facts:
Jayson Yu Lim was hired to serve as the Country Manager
of American Power Conversion Philippine Sales Office,
which was not registered with the SEC but acted as a
liaison office for American Power Conversion Corp.
(APCC), an American corporation. APCC is engaged in
designing, developing, manufacturing, and marketing of
power protection and management solutions for
computer, communication, and electronic applications.
The only SEC-registered Corporation then was American
Power Conversion Phils., Inc (APCPI).
Since American Power Conversion Philippine Sales Office
was unregistered but doing business in the country, Lim
was included in the list of employees and payroll of APCPI.
He was also instructed to create a petty cash fund using
his own personal bank account to answer for the daily
operations of the Sales Office.
American Power Conversion Phils. B.V. (APCP-BV) was
established in the country and it acquired APCPI and
continued the latter’s business.
Lim was eventually promoted as Regional Manager for
APC North ASEAN, a division of APC ASEAN. One David
Shao was appointed as Regional Manager for South
ASEAN.
Truong, the Country General Manager at the time of Lim’s
appointment was eventually replaced by petitioner
George Kong.
During their stint with Kong, Lim and Shao discovered
irregularities committed by Kong. They reported the
irregularities to Leanne Cunnold, General Manager for
APC-South and Kong’s immediate superior. Cunnold took
up the matter with petitioner Alicia Hendy, the Human
Resource Director for APCP BV. Lim and Shao also took the
matter directly to David Plumer, VP for Asia Pacific of APC
Japan, who advised them to discuss the matter directly
with Kong.
Kong sent emails to Lim and the other six members of the
sales and marketing team indicating his displeasure and
that he took the matter quite personally.
Kong and Hendy then met with Shao where the latter was
asked to resign. When he refused, he was right then and
there terminated from employment with immediate
effect. The letter of termination did not specify any reason
why he was being fired from work.
Thereafter, Kong arrived in the country and met with Lim.
He informed Lim of a supposed company restructuring
which rendered his position as Regional Manager
redundant.
Lim’s counsel proceeded to DOLE to verify if the
petitioners gave the requisite notice of termination. DOLE
confirmed that there was no record on file of a notice of
termination filed by any of the petitioners.
Lim was paid severance pay, but in a written demand, he
sought reinstatement, the payment of backwages and
allowances/benefits, and damages for his claimed
malicious and illegal termination. APCC’s counsel refused
to accede.
LA: LA decided in favor of Lim
NLRC: NLRC ruled in favor of the petitioners.
CA: CA ruled in favor of Lim.
Issue: Whether Lim’s dismissal by reason of redundancy
was valid
Ruling:
No.
APCC conducted business here as an unregistered and
unregulated enterprise; consequently, it did not pay
truces despite doing business here and earning income as
a result. APCP BV was not engaged in sales, as it is licensed
to engage only in the manufacture of computer-related
products - yet, it holds respondent in its payroll.
Meanwhile, Lim took orders from and came under the
supervision and control of APCS and Kong from Singapore.
This Management and manner of conducting business by
petitioners is illegal. Being illegal, this should have been
early on remedied by petitioners, including Plumer, Kong,
and Hendy, who are presumed to know, by the very
nature of their positions and business, how legitimate
business is supposed to be conducted in this country, that
is, by registering the business to allow regulation and
taxation by the authorities. Yet they did not.
When Lim joined APCC, he was merely in his early
twenties, as admitted by Truong in his email message
announcing respondent's appointment as Regional
Manager for APC North ASEAN. He cannot be faulted for
acceding to APCC's condition at the outset that he use his
personal bank account for APCC's operations in the
meantime; during the incipient phase of his employment,
he must have been operating wider the impression that
since APCC's sales and marketing operations were new in
the country, it needed time to formalize its operations and
secure a license to do business here. And with this hope,
he innocently went about doing his work.
There is this unique situation where Lim was hired directly
by APCC of the USA., but was being paid his remuneration
by a separate entity-APCP BV of the Philippines and is
supervised and controlled by APCS from Singapore and
APC Japan - all in furtherance of APCC's objective of doing
business here unfettered by government regulation.
To determine the existence of an employer-employee
relationship, four elements generally need to be
considered, namely: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee's
conduct. These elements or indicators comprise the so-
called 'four-fold' test of employment relationship.
It would seem that all of the petitioners are for all
practical purposes Lim's employers. This bizarre labor
relation was made possible and necessary only by the
petitioners' common objective: to enable APCC to skirt the
law. For all legal purposes, APCC is Lim's employer. The SC
ruled the subject redundancy scheme a sham, the same
being an integral part of petitioners' illegitimate scheme
to defraud the public - including Lim - and the State. It is
null and void for being contrary to law and public policy.
From a labor standpoint, they are al guilty of violating the
Labor Code as a result of their concerted acts of fraud and
misrepresentation upon Lim, using him and placing him in
a precarious position without risk to themselves, and thus
deliberately disregarding their fundamental obligation to
afford protection to labor and insure the safety of their
employees. For this gross violation of the fundamental
policy of the Labor Code, petitioners must be held liable to
pay backwages, damages, and attorney's fees.
G.R. No. 206390 January 30, 2017
Jack C. Valencia vs. Classique Vinyl Products Corporation
FACTS:
Valencia applied for work with Classique Vinyl through the
intervention of CMS, a local manpower agency. The CMS
made him sign a contract of employment and thereafter,
he then proceeded to work for Classique Vinyl as a
fertilizer operator and extruder operator. He alleged that
he was neither paid his holiday pay, service incentive leave
pay, and 13th month pay and that his benefits were either
not paid or not properly remitted. He further averred that
he worked for Classique Vinyl for four years until his
dismissal. Hence, by operation of law, he had already
attained the status of a regular employee of Classique
Vinyl. Valencia, therefore, argued that Classique Vinyl
should be held guilty of illegal dismissal for failing to
comply with the twin-notice requirement when it
dismissed him from the service and be made to pay for his
monetary claims.
On the other hand, Classique Vinyl asserted that there was
no employer-employee relationship between it and
Valencia, hence, it could not have illegally dismissed the
latter nor can it be held liable for Valencia’s monetary
claims. Classique Vinyl insisted that Valencia’s true
employer was CMS. However, any employer-employee
relationship between CMS and Valencia was also being
denied by CMS on the ground that it was Classique Vinyl
which exercised full control and supervision over him.
Petitioner Valencia filed with the Labor Arbiter (LA) a
Complaint for Underpayment of Salary and Overtime Pay;
Non-Payment of Holiday Pay, Service Incentive Leave Pay,
13th Month Pay; Regularization; and illegal dismissal
against respondents.
LA: Dismissed the said complaint on the ground that there
is no substantial evidence to prove the petitioner’s
complaint.
NLRC: Held that there is lack of basis for Valencia to hold
Classique Vinyl liable for his alleged illegal dismissal as well
as for his money claims. NLRC affirmed the decision of the
Labor Arbiter.
CA: Affirmed the ruling of the NLRC.
ISSUE:
Whether or not an employer-employee relationship
existed between Valencia and Classique Vinyl
HELD:
NEGATIVE. In labor cases, the quantum of proof necessary
is substantial evidence. The burden of proof rests upon
the party who asserts the affirmative of an issue. Since
Valencia is claiming to be an employee of Classique Vinyl,
it is thus incumbent upon him to proffer evidence to prove
the existence of employer-employee relationship between
them. He needs to show by substantial evidence that he
was indeed an employee of the company against which he
claims illegal dismissal. In order to determine the
existence of an employer-employee relationship, the
following elements had been consistently applied: (1) the
selection and engagement; (2) payment of wages; (3)
power of dismissal and; (4) the power of control. The
burden to prove such elements lies upon Valencia.
Valencia was first engaged as a contractual employee of
CMS before he was deployed to Classique Vinyl.
Petitioner’s selection and engagement was undertaken by
CMS and conversely, this negates the existence of such
element insofar as Classique Vinyl is concerned.
Moreover, Valencia failed to present competent evidence,
documentary or otherwise, to support his claimed
employer-employee relationship between him and
Classique Vinyl. Also, the employment contract which
Valencia signed with CMS categorically states that the
latter possessed not only the power of control but also of
dismissal over him.
The presentation of CMS’s Certificate of Registration with
the DTI and, License as private recruitment and placement
agency from the DOLE prevented the legal presumption of
it being a mere labor-only contractor from arising. In any
event, it must be stressed that “in labor-only contracting,
the statute creates an employer-employee relationship for
a comprehensive purpose: to prevent a circumvention of
labor laws. The contractor is considered merely an agent
of the principal employer and the latter is responsible to
the employees of the labor-only contractor as if such
employees had been directly employed by the principal
employer. The principal employer therefore becomes
solidarily liable with the labor-only contractor for all the
rightful claims of the employees.” The facts of this case,
however, failed to establish that there is any
circumvention of labor laws as to call for the creation by
the statute of an employer-employee relationship
between Classique Vinyl and Valencia.
Nestle Philippines, Inc. v. Puedan, GR 220617, Jan. 30,
2017
Facts:
Respondents filed a complaint for illegal dismissal,
damages and attorney’s fees against Nestle Phils., Inc.
(NPI) and Ocho de Septiembre Inc. (ODSI). The
respondents alleged that ODSI and NPI hired them to sell
various NPI products in the assigned covered area. After
sometime, the respondents demanded that they be
considered regular employees of NPI, but they were
directed to sign contracts of employment with ODSI
instead. Respondents refused to comply with such
directives resulting to their dismissal from their position.
Respondents contend that ODSI is a labor-only contractor,
and thus, they should be deemed regular employees of
NPI, and there was no just or authorized cause for their
dismissal. ODSI averred that it is a company engaged in
the business of buying, selling, distributing, and marketing
of goods and commodities of every kind, and it enters into
all kinds of contracts for the acquisition thereof. ODSI
admitted that it hired respondents as its employees and
assigned them to execute the Distributorship Agreement it
entered with NPI. However, the business relationship
between NPI and ODSI turned sour. Eventually, NPI
downsized its marketing and promotional support from
ODSI which resulted to the termination of the
Distributorship Agreement. ODSI argued that respondents
were not dismissed but merely on floating status.
Meanwhile, NPI did not file any position paper or appear
in the scheduled conferences. LA: Dismissed the complaint
for lack of merit and concluded that all the impleaded
respondents therein (including NPI) should be held liable
for the payment of nominal damages plus attorney’s fees.
NLRC: Reversed and set aside the LA ruling, and ordered
ODSI and NPI to pay each of the respondents separation
pay and nominal damages. Respondents moved for a
partial reconsideration. NPI also moved for
reconsideration, contending that it was deprived of its
right to participate in the proceedings before the LA and
NLRC. NLRC denied both motions.
CA: Affirmed the NLRC ruling.
Issue: Whether ODSI is a labor-only contractor of NPI, and
consequently, NPI is respondents' true employer
Held:
In holding NPI jointly and severally liable with ODSI for the
monetary awards in favor of respondents, both the NLRC
and the CA held that based on the provisions of the
Distributorship Agreement between them, ODSI is merely
a labor-only contractor of NPI.
However, a closer examination of the Distributorship
Agreement reveals that the relationship of NPI and ODSI is
not that of a principal and a contractor (regardless of
whether labor-only or independent), but that of a seller
and a buyer/re-seller. As aptly explained by NPI, the goods
it manufactures are distributed to the market through
various distributors, e.g., ODSI, that in turn, re-sell the
same to designated outlets through its own employees
such as the respondents. Therefore, the reselling activities
allegedly performed by the respondents properly pertain
to ODSI, whose principal business consists of the "buying,
selling, distributing, and marketing goods and
commodities of every kind" and “[entering] into all kinds
of contracts for the acquisition of such goods [and
commodities].”
Thus, contrary to the CA's findings, the aforementioned
stipulations in the Distributorship Agreement hardly
demonstrate control on the part of NPI over the means
and methods by which ODSI performs its business, nor
were they intended to dictate how ODSI shall conduct its
business as a distributor. Otherwise stated, the
stipulations in the Distributorship Agreement do not
operate to control or fix the methodology on how ODSI
should do its business as a distributor of NPI products, but
merely provide rules of conduct or guidelines towards the
achievement of a mutually desired result - which in this
case is the sale of NPI products to the end consumer.
Verily, it was only reasonable for NPI - it being a local arm
of one of the largest manufacturers of foods and grocery
products worldwide - to require its distributors, such as
ODSI, to meet various conditions for the grant and
continuation of a distributorship agreement for as long as
these conditions do not control the means and methods
on how ODSI does its distributorship business, as shown in
this case. This is to ensure the integrity and quality of the
products which will ultimately fall into the hands of the
end consumer.
Thus, the foregoing circumstances show that ODSI was not
a labor- only contractor of NPI; hence, the latter cannot be
deemed the true employer of respondents. As a
consequence, NPI cannot be held jointly and severally
liable to ODSI's monetary obligations towards
respondents.
ROMEO ALBA v. CONRADO G. ESPINOSA
GR No. 227734, Aug 09, 2017
FACTS: It was alleged by the respondents that on various
dates, Alba hired them as construction workers for his
projects in several residential villages within Metro Manila
and nearby provinces. The respondents were Alba's
regular employees who were paid different wage rates
that ranged from P350.00 to P500.00 a day, but were
deprived of some statutorily-mandated benefits such as
their overtime pay, 13th month pay, holiday pay, and
service incentive leave (SIL) pay. On different dates in
2013, some of the respondents confronted Alba regarding
their benefits, but such action eventually resulted in their
dismissal.
For his defense, Alba argued that the respondents could
not be deemed his regular employees. He claimed to be a
mere taker of small-scale construction projects for house
repairs and renovations. In the construction industry, he
was deemed a mere mamamakyaw, who would pool a
team of skilled and semi-skilled carpenters and masons for
specific projects that usually lasted from one to two
weeks. The respondents were paid daily wages ranging
from P600.00 to P1,000.00, depending on their skill, and
could take on projects with their own clients after Alba's
projects had terminated.[13] For succeeding projects, Alba
would only take in construction workers who were still
available for the duration of the new work.
As he denied any liability for the respondents' claims, Alba
likewise presented certifications from clients indicating
that the latter directly paid the salaries of the workers
provided by Alba for the projects. He also argued that the
respondents used their own tools at work, and received
instructions from either the architect or foreman engaged
by the project owner.
The respondents were displeased by Alba's explanations.
To disprove Alba's claim that he was a mere
mamamakyaw, they presented gate passes, issued by the
villages where Alba had construction projects, which
indicated that Alba was a "contractor."
The LA dismissed the complaints. The LA referred to the
following circumstances affecting the parties' payment of
wages and the element of control, and which negated the
claim that the respondents should be deemed employees
of Alba: first, the wages of the respondents were paid
directly by the project owners; second, the respondents
applied their own methodology and used their own tools
and equipment as they discharged their work; and third,
the respondents obtained their work instructions from
architects or the foreman directly hired by the owners or
clients. The supposed gate passes issued by village
representatives did not qualify as substantial evidence to
show that Alba was indeed a contractor.
The respondents' appeal was partly granted by the NLRC.
The association between Alba and the respondents was
established after Alba readily proclaimed that the
respondents were part of his pool of workers. Alba had
the power to determine who would remain in or be
terminated from his projects. He also admitted that he
paid the respondents their wages on a daily basis. The
four-fold test in determining the existence of an
employer-employee relationship was duly satisfied. Their
employment was deemed regular given that they had
been continuously rehired for Alba's projects for several
years. More importantly, they performed tasks which
were necessary and indispensable to the usual business or
trade of Alba.
CA dismissed Alba’s petition. The CA reiterated the
satisfaction of the four-fold test that is considered in
finding employer-employee relationship. The appellate
court likewise assessed the nature of work that the
respondents were required to accomplish, vis-a-vis the
type of Alba's business, which prompted the CA to also
affirm the finding that the illegally dismissed respondents
were regular employees.
ISSUE: WON there was an employer-employee
relationship.
RULING: The existence of an employer-employee
relationship between him and the respondents was
sufficiently established. Alba's relationship with the
respondents satisfies the four-fold test.
From the records, it is clear that Alba possessed this
power to control, and had in fact freely exercised it over
the respondents. Alba failed to satisfactorily rebut the
respondents' direct assertions that Alba frequented the
work sites, and would reprimand his workers whom he
believed were idle or sluggish. He even controlled the time
when they had to stay at work. The respondents relied
upon instructions coming from Alba, as their work was for
projects obtained by the latter. He controlled the results
of the work that the respondents had to perform, along
with the means and methods by which to accomplish
them. His control was not negated by any instructions that
came from a foreman or an architect, as directives that
came from them, if there were at all, were understandably
limited. The respondents worked for Alba who held the
project, and the latter was the one who exercised
authority over them.
Even Alba's allegation that the respondents were
independent contractors was not amply substantiated.
Time and again, the Court has emphasized that "the test
of independent contractorship is 'whether one claiming to
be an independent contractor has contracted to do the
work according to his own methods and without being
subject to the control of the employer, except only as to
the results of the work. The Court has explained Alba's
exercise of control over the respondents. For a worker to
be deemed an independent contractor, it is further
necessary to establish several indicators. In Television and
Production Exponents, Inc. and/or Tuviera v. Servaña, the
Court explained:
Aside from possessing substantial capital or investment, a
legitimate job contractor or subcontractor carries on a
distinct and independent business and undertakes to
perform the job, work or service on its own account and
under its own responsibility according to its manner and
method, and free from the control and direction of the
principal in all matters connected with the performance of
the work except as to the results thereof.
"It is the burden of the employer to prove that a person
whose services it pays for is an independent contractor
rather than a regular employee with or without a fixed
term." Undeniably, Alba failed to discharge this burden.
EXPEDITION CONSTRUCTION et al vs. AFRICA, et al
G.R. No. 228671 | December 14, 2017
Topics: Elements of Employer-Employee Relationship;
Granting Separation Pay as a Measure of Social Justice
even if no Dismissal; Garbage Collectors;
Facts:
Petitioner Expedition is a domestic corporation engaged in
garbage collection/hauling. It engaged the services of
respondents as garbage truck drivers to collect garbage
from different cities and transport the same to the
designated dumping site.
Respondents filed separate cases (which were later on
consolidated) against Expedition for illegal dismissal, etc.
Respondents alleged that they were illegally terminated
from employment when they were prevented from
entering the premises of Expedition without cause or due
process.
Expedition countered that respondents were not illegally
dismissed. It averred that it entered into separate
contracts with the cities of Quezon, Mandaluyong,
Caloocan, and Muntinlupa for the collection and transport
of their garbage to the dump site; that it engaged the
services of respondents, as dump truck drivers, who were
oftentimes dispatched in Quezon City and Caloocan City;
that the need for respondents’ services significantly
decreased sometime in 2013 after its contracts with
Quezon City and Caloocan City were not renewed; and,
that it nonetheless tried to accommodate respondents by
giving them intermittent trips whenever the need arose.
Expedition denied that respondents were its employees. It
claimed that respondents were not part of the company’s
payroll but were being paid on a per trip basis.
Respondents were not under Expedition’s direct control
and supervision as they worked on their own, were not
subjected to company rules nor were required to observe
regular/fixed working hours, and that respondents
hired/paid their respective garbage collectors. As such,
respondents’ money claims had no legal basis.
In their Reply, respondents insisted that they worked
under Expedition’s control and supervision considering
that: (1) Expedition owned the dump trucks; (2) Expedition
expressly instructed that the trucks should be used
exclusively to collect garbage in their assigned areas and
transport the garbage to the dump site; (3) Expedition
directed them to park the dump trucks in the garage
located at Group 5 Area Payatas, Quezon City after
completion of each delivery; and (4) Expedition
determined how, where, and when they would perform
their tasks.
Respondents also adverted to petitioners’ counsel’s
manifestation during the mandatory conciliation
proceedings, regarding Expedition’s willingness to accept
them back to work, as proof of their status as Expedition’s
regular employees.
LA dismissed the complaints, ruling that there was
employer-employee relationship. NLRC affirmed LA ruling.
Later on, however, NLRC partly granted respondents’ MR.
It ruled that respondents were employees of Expedition in
view of Expedition’s admission that it hired and paid
respondents for their services. The NLRC was also
persuaded that Expedition exercised control on when and
how respondents would collect garbage. The NLRC,
however, sustained its earlier finding that there was no
illegal dismissal ratiocinating that respondents were
merely placed on a floating status when the contract with
Quezon City and Caloocan City expired and thus were
merely waiting to be reassigned to other similar work. As
there was no dismissal to speak of, the NLRC ordered
respondents’ reinstatement but without the payment of
backwages. However, due to lack of clients where
respondents could be reassigned, the NLRC opted to
award separation pay in lieu of reinstatement. CA
dismissed Expedition’s petitioner.
Issues:
1) Whether respondents are regular employees of
petitioner.
2) Whether respondents were illegally dismissed
from service.
Ruling:
1) YES. Jurisprudence has adhered to the four-fold
test in determining the existence of an employer-
employee relationship, to wit: (1) the selection
and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and
(4) the power to control the employee’s conduct,
or the so-called ‘control test.’ All elements are
present here.
First, as clearly admitted, respondents were
engaged/hired by Expedition as garbage truck
drivers. Second, it is undeniable that respondents
received compensation from Expedition for the
services that they rendered to the latter. The fact
that respondents were paid on a per trip basis is
irrelevant in determining the existence of an
employer-employee relationship because this was
merely the method of computing the proper
compensation due to respondents. Third,
Expedition’s power to dismiss was apparent when
work was withheld from respondents as a result of
the termination of the contracts with Quezon City
and Caloocan City. Finally, Expedition has the
power of control over respondents in the
performance of their work. It was held that “the
power of control refers merely to the existence of
the power and not to the actual exercise thereof.
As aptly observed by the CA, the agreements for
the collection of garbage were between
Expedition and the various LGUs, and respondents
needed the instruction and supervision of
Expedition to effectively perform their work in
accordance with the stipulations of the
agreements.
Moreover, the trucks driven by respondents were
owned by Expedition. There was an express
instruction that these trucks were to be
exclusively used to collect and transport garbage.
 Respondents were mandated to return the trucks equivalent to the separation pay awarded to each
to the premises of Expedition after the collection respondent in the NLRC’s Resolution. In view of
of garbage. Expedition determined the clients to this and taking into account respondents’ long
be served, the location where the garbage is to be years of service ranging from four to 15 years, the
collected and when it is to be collected. Indeed, Court finds that the grant of separation pay at the
Expedition determined how, where, and when rate of ½ month’s
respondents would perform their tasks. salary for every year of service, as adjudged in the
NLRC Resolution, is proper.
Respondents should be accorded the presumption
of regular employment pursuant to Article 280 of
the Labor Code which provides that “employees
who have rendered at least one year of service,
whether such service is continuous or broken x x x
shall be considered [as] regular employees with
respect to the activity in which they are employed
and their employment shall continue while such
activity exists. Having gained regular status,
respondents were entitled to security of tenure
and could only be dismissed for just or authorized
cause after they had been accorded due process.

2) NO. In this case, there was no positive or direct

evidence to substantiate respondents’ claim that
they were dismissed from employment. Aside
from mere assertions, the record is bereft of any
indication that respondents were barred from
Expedition’s premises. If at all, the evidence on
record showed that Expedition intended to give
respondents new assignments as a result of the
termination of the garbage hauling contracts with
Quezon City and Caloocan City where respondents
were regularly dispatched. Despite the loss of
some clients, Expedition tried to accommodate
respondents and offered to engage them in other
garbage hauling projects with other LGUs, a fact
which respondents did not refute. However,
instead of returning and waiting for their next
assignments, respondents instituted an illegal
dismissal case against Expedition.

Note that even during the mandatory conciliation

and mediation conference between the parties,
Expedition manifested its willingness to accept
respondents back to work. Unfortunately, it was
respondents who no longer wanted to return to
work.

As a measure of social justice, the award of

separation pay/financial assistance has been
upheld in some cases even if there is no finding of
illegal dismissal. Here, Expedition expressed
willingness to extend gratuitous assistance to
respondents and to pay them the amounts