labor digests 2010 set 1

1 | B A U T I S T A . B L A N C A F L O R . E S C U C H A . E U S O R E S . L O Y O L A . S A L U D . V I B A N D O R .

1. PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION (PALEA) and PHILIPPINE AIR LINES SUPERVISORS' ASSOCIATION (PALSA) vs. PHILIPPINE AIR LINES, INC.,

Petitioners seek for the revision of PAL’s method of computing the basic daily and hourly rate of its monthly salaried employees, and necessarily, to pay them their accrued salary differentials.

Sought to be revised is PAL's formula in computing wages of its employees:

Monthly salary x 12 365 (No. of calendar = x (Basic dailr rate) days in a year)

x 8 = Basic hourly rate

The unions would like PAL to modify the above formula in this wise:

Monthly salary x 12 No. of actual working = x (Basic daily rate) days

x 8 = Basic hourly rate

The unions attributed error to PAL's wage formula, contending that the use of 365 days as divisor would necessarily include off-days which, under the terms of the collective bargaining agreements entered into between the parties, were not paid days. This is so since for work done on an off-day, an employee was paid 100% plus 25%, or 100% plus 37-½ of his regular working hour rate.

PAL's formula of determining daily and hourly rate of pay has been decided and adopted by it unilaterally without the knowedge and express consent of the employees. It was only later on that the employees came to know of the formula's irregularity and its being violative of the collective bargaining agreements previously executed by PAL and the unions. Precisely, PALSA immediately proposed that PAL use the correct method of computation.

W/N THE METHOD OF COMPUTATION USED BY PAL IN DETERMINING TIIE BASIC DAILY OR HOURLY RATE OF ITS MONTLY SALARIED EMPLOYEES IS CORRECT, CONSIDERING THAT PAL, A PUBLIC UTILITY WHERE THERE IS WORK EVERYDAY OF THE WEEK HAS BEEN TREATING OFFSITE DAYS, SATURDAYS, SUNDAYS, OR HOLIDAYS AS PAID DAYS.

NO, it is incorrect.

There should hardly be any doubt that off-days are not paid days. Precisely, off-days are rest days for the worker. He is not required to work on such days. This finds support not only in the basic principle in labor that the basis of remuneration or compensation is actual service rendered, but in the ever pervading labor spirit aimed at humanizing the conditions of the working man.

Since during his off-days an employee is not compelled to work he cannot, conversely, demand for his corresponding pay. If, however, a worker works on his off-day, our welfare laws duly reward him with a premium higher than what he would receive when he works on his regular working day.

Such being the case, the divisor in computing an employee's basic daily rate should be the actual working days in a year The number of off-days are not to be counted precisely because on such off-days, an employee is not required to work.

PHILIPPINE AIRLINES IS THEREBY ORDERED TO REVISE THE METHOD AND PAY THE EMPLOYEES THE DIFFERENTIALS EFFECTIVE 1953 FEB 14.

In case of doubt, all labor legislation and labor contracts should be construed in favor of the safety and decent living of the laborer (Article 1702).


2. PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA) ET AL. v. NLRC, PAL, and GSIS

In relation to the first case (PALEA and PALSA v. PAL), PAL was ordered to pay the differentials from Feb. 14, 1953. PALEA seeks to annul the resolution dated May 31, 1977 of respondent National Labor Relations Commission MODIFYING that only pay differentials beginning February 14, 1953 up to September 8, 1963 are to be paid.

The NLRC reasoned out that the application of the adjudged correct method or formula as adopted in the Supreme Court's decision was based on the specific provisions of the collective bargaining agreement still existing from 1952 until its expiry on September 8, 1963; and that beginning September 9, 1963 the aforesaid formula ceased to be effective.

Petitioners maintain that this Court in its decision of March 1976 had already settled the correct method or formula of computation of the basic daily rate of pay of PAL's monthly salaried employees in determining their overtime pay, night differential pay, holiday premium pay, vacation and sick leave pay effective from February 14, 1953. Thus, when the NLRC declared that the said method or formula ceased to be effective on September 8, 1963, the consequence would be to revert to the use of what had been adjudged by this Court as an erroneous method of computation of the basic daily rate of pay, by dividing the yearly salary by 365 days.

W/N PAL should revert to the method of computation before the March 31, 1976 case was decided

YES. The SC in the PALEA and PALSA v. PAL case ruled that "off-days are not paid days. Such being the case, the divisor in computing an employee's basic daily rate should be the actual working days in a year. The number of off- days are not to be counted precisely because on such off-days, an employee is not required to work." HOWEVER, such pronouncement was based on the provisions of the collective bargaining agreements existing from 1952 until September 8, 1963. The parties thereafter incorporated in the subsequent collective bargaining agreements provisions considering such "off-days" as already "paid". Hence, the method of computing the basic and hourly rate of respondent PAL's monthly-salaried employees decided by the SC is no longer applicable after September 8, 1963.

SC agrees with the NLRC in limiting the application of the March 31, 1976 decision:

To our mind, the change of the CBA provisions interpreted by the Court can lead to no other conclusion than that the Decision is coterminous with the last CBA containing the interpreted provision. This must be so. For, the set of facts which justified the assumption that holidays and off days were not paid, no longer obtains.

Subsequent CBA's wherein the parties, obviously to prevent repetition of the same troubles arising from their different interpretations leading to the present dispute, precisely incorporated provisions clearly considering such 'off days' as already paid.

Finally, petitioners' cause of action questioning respondent Commission's resolution of May 31, 1977 is almost six (6) years late as the present petition for certiorari was filed only on March 29, 1983. The questioned resolution having long become final and executory, this Court has no jurisdiction to entertain the present petition.

The PETITION for certiorari IS HEREBY DISMISSED FOR LACK OF MERIT.


6. Dumpit-Murillo vs. CA

FACTS:

Associated Broadcasting Company hired Murillo as a newscaster and a co-anchor for an early evening news program in 1995. The contract was for a period of 3 months and was renewed four times, such contract provided for an enumeration of her Rights and Dutes as a Talent. Murillo’s services were also engaged for the program “Live on Five.” After four years of repeated renewals, Murillo’s contract expired. Two weeks after the expiration of the contract, Murillo wrote to the Vice President for news and affairs of ABC informing him that she was still interested in renewing her contract subject to a salary increase. ABC did not send any answer which prompted Murillo to send another letter informing the company that the latter’s failure to respond to the earlier letter is deemed as a constructive dismissal. A month later, Murillo sent a demand later demanding reinstatement, payment of backwages and payment of other monetary benefits due a regular employee. Upon ABC’s refusal to grant Murillo’s calims, Murillo filed a complaint against ABC based on the same grounds.

Labor Arbiter – Dismissed the complaint

NLRC – Reversed the Labor Arbiter, holding that an employer-employee relationship existed between Murillo and ABC.

CA – Reversed the decision of NLRC, holding that Murillo was a fixed term employee since her job, as agreed upon was only for a specified time.

ISSUE:

Was there an employer-employee relationship between ABC and Murillo so as to entitle Murillo to monetary benefits due a regular employee upon dismissal?

HELD:

Yes. An employer-employee relationship was created when ABC started to merely renew the contracts for 4 consecutive years. The Supreme Court also used the elements provided for in the case of Manila Water Company vs. Pena:

1. Selection and engagement of employee;

2. Payment of wages, 3. Power of Dismissal; 4. Employer’s power of control.

Considering that the most pivotal of the elements is the Employer’s control over the employee, the Supreme Court was convinced that such element is present under the employment contract which enumerated Murillo’s duties to ABC. ABC also determined her work assignments and payment of wages in addition to the company’s power to dismiss her.

Moreover, Murillo was also deemed a regular employee since it was discovered that Murillo’s work was necessary or desirable in the usual business or trade of the employer, i.e., participation in the government’s use and public information dissemination. The contention that the contract was characterized by a valid fixed-period employment is untenable at the fixed period was not knowingly and voluntarily agreed upon by Murillo. Murillo could not object to the terms of her employment contract and was left with no choice but to sign each renewal, otherwise she would lose her job.


7. Consolidated Broadcasting System vs. Oberio, et. Al

FACTS:

Oberio and others (Respondents) were employed as drama talents by DYWB-Bombo Radyo, owned by CBS. They reported to work 6 days a week and were required to record their drama production in advance. Some of them were employed by CBS since 1974 and some in 1997. Their drama programs were aired not only in Bacolod City but also the sister stations of DYWB in Visayas and Mindanao areas. In 1998, CBS reduced the number of drama productions amidst the opposition by respondents. After the negotiations failed, the respondents sought the intervention of DOLE. The investigation revealed that CBS is guilty of violation of labor standard laws such as underpayment of wages, 13th month pay, non-payment of service incentive leave pay, and non-coverage of respondents under SSS. CBS contended that respondents are not its employees and refused to submit the payroll and daily time records. Vexed by the complaint, CBS barred the respondents from reporting to work. The latter then claimed contructive dismissal.

Labor Arbiter – Dismissed the complaint.

NLRC – Reversed the decision of the Labor Arbiter, holding that the respondents were regular employees by virtue of the evidence presented by the respondents and the lack thereof on the part of CBS.

ISSUE:

Was there an employer-employee relationship between the respondents and CBS?

HELD:

Yes. The respondent’s employment passed the four-fold test namely: 1.) The selection and engagement of the employee; 2.) Payment of wages; 3.) Power to dismiss; 4.) Power to control the employee.

Furthermore, CBS failed to controvert with substantial evidence the allegation of respondents as to their employment with CBS. They merely relied on its contention that the workers were piece rate contractors who were paid by results. CBS however, failed to comply

with Policy Instruction No. 40 requiring CBS to execute the necessary contract specifying the nature of the work to be performed, rates of pay and the programs in which they will work. Such failure justifies a reasonable conclusion that no such contract exists and that respondents were in fact regular employees.

Moreover, the engagement of respondents for a period ranging from 2 to 25 years and the fact that their drama programs were also aired in the Visayas and Mindanao areas show that their work is necessary and indispensable to the usual business or trade of CBS. Such reasonable connection is the test to determine whether the employment is regular or not.


8. Lakas sa Industriya ng Kapatirang Haligi ng Alyansa-Pinagbuklad ng Promo ng Burlingame (LIKHA-PMPB) v. Burlingame Corporation

Facts:

LIKHA-PMPB filed a petition for certification election before the DOLE which they sought to represent the rank-and-file promo employees of Burlingame Corporation. They prayed to be recognized to the CBA agent or in alternative a certification consent election be held among the rank-and-file promo employees. Respondents filed a motion to dismiss and averred that there is no employer-employee relationship between it and the petitioner’s members. They further alleged that the petitioners are employees of F. Garil Manpower Services (F. Garil) which they presented a copy of its contract for manpower services with F. Garil. Med-Arbiter Parungo dismissed the petition for the lack of employer-employee relationship.

The petitioners filed the appeal to the secretary of Labor which ordered the immediate conduct of a certification of election. A motion for reconsideration was filed by the respondent but was denied. The respondent filed another complaint before the CA which reversed the decision of the Secretary. The petitioners filed a motion for reconsideration but CA denied and hence this petition.

Issue: Whether or not there is employer-employee relationship between the petitioners and Burlingame Co.?

W/N F. Garil is an independent contractor or a labor-only contractor?

Held:

Yes

The “four fold test” will show that respondent is the employer of the petitioner members. The elements to determine existence of employment relationship: a. the selection and engagement of the employees; b. the payment of wages; c. the power of dismissal; and the employer’s power to control the employee’s conduct. The most important is the control of the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.

The contractual stipulations between Burlington and F. Garil shows that “any personnel found to be inefficient,

troublesome, uncooperative, and not observing the rules and regulations set forth by Burlingame shall be reported to F. Garil and may be replaced upon request.” This circumstance shows that Burlingame has control and supervision over workers supplied by F. Garil. There is also an implied provision on the replacement of personnel carried upon the request by Burlingame is the power to fire personnel. F. Garil is not an independent contractor since it did not carry a distinct business free from the control and supervision of Burlingame.

The contractual stipulation of between Burlingame and personnel provided by F. Garil on the nonexistence of employer-employee relationship has no legal effect because it is contrary to law, morals, good customs, public order or public policy. F.Garil was engage only in labor-only contracting and considered merely as an agent of Burlingame.

Decision: Challenged decision of CA and Resolution is reversed and set aside.The decision of Secretary of Labor is reinstated.


9. Far East Agricultural Supply, Inc. and/ or Alexander Uy, petitioners vs. Jimmy Lebatique and the Court of Appeals

Facts:

Far East hired Lebatique as a truck driver. Lebatique complained or non-payment or overtime work when he was required of make a second delivery on Novaliches, QC. On the same day, Manuel Uy, the brother of Alexander Uy, suspended Lebatique for illegal use of company vehicle. Though suspended, Lebatique reported for work the next day but was prohibited from entering the premises of the petitioner.

Lebatique asked help from the DOLE Public Assistance and Complaints Unit concerning the nonpayment of his overtime pay. Two days later, he received a telegram requiring him to go to work. When he did, Alexander asked why he was claiming overtime pay. Lebatique explained that he never received any overtime pay since he worked for the company and that Manuel fired him. After talking to Manuel, Alexander then told Lebatique that he was terminated and should look for another job.

The LA found that Lebatique was illegally dismissed. On appeal, the NLRC reversed the LA and dismissed the complaint. It held that there was no dismissal since Lebatique was merely suspended. It also held that Lebatique was a field personel and was not entitled to overtime and service incentive pay. Lebatique filed a petition for certiorati with the CA. The CA reversed the NLRC decision and held that Lebatique was illegally dismissed.

Issue:

1. Whether Lebatique was illegally dismissed 2. Whether Lebatique was a field personnel,

not entitled to overtime pay.

Decision:

Petition is Denied.

The petitioners have the burden of proof to show that Lebatique was not illegally dismissed. The latter contend that Lebatique abandoned his job. To constitute abandonment, (1) the absence must be without justifiable reason and (2) there must be a clear intention, as

manifested by some overt act, to sever the employer-employee relationship. In this case, the petitioners failed to prove that Lebatique abandoned his job. When Alexander told Lebatique to look for another job, the latter was in effect dismissed.

Lebatique is not a field personel as contemplated in Sec.2 of the Labor Code. As company drivers, (1) they are directed to deliver the goods at a specified time and place; (2) they are not given the discretion to solicit, elect and contact prospective clients; and (3) Far East issued a directive requiring the drivers to stay at the client’s premises durng truck-ban. Hence, they are under the control and supervision of the management.


10. Rowell Industrial Corporation, petitioner vs. Court of Appeals and Joel Taripe

Facts:

Taripe filed a Complaint against RIC for regularization and payment of holiday pay, indemnity for severed finger. The same was later amended to include illegal dismissal. According to Taripe, RIC employed him as a power press machine operator. Such position is occupied as a regular employee with function necessary to RIC’s business; that he was made to sign a document which was not explained to him and contained a condition for him to be taken in, and for which he was not furnished a copy; that he was not granted the full benefits of law and the CBA while the case for regularization was pending; and that he was summarily dismissed.

RIC argued that Taripe was a contractual employee and he was hired due to the increase in the demand in packaging requirement of its clients for the Christmas season; that on March 6, 2000, Taripe’s employment contract expired; that Taripe knew that he was dismissed due to the expiration of his contract as he stated the same on the information update of the union members; and that all benefits were given to him

The LA dismissed Taripe’s complaint and held that he was a contractual employee whose contract merely expired. The NLRC on the other hand, on the appeal filed by Taripe, held that the latter was a regular employee and his dismissal was illegal. The RIC moved for reconsideration but the same was denied. RIC then filed with the CA a Petition for Certiorari under Rule 65 of the 1997 of the Revised Rules of Civil Procedure. The CA affirmed the decision of the NLRC. RIC filed a Motion for Reconsideration but the same was denied for lack of merit.

Issue:

Whether Taripe was a regular employee and was illegally dismissed.

Decision:

Petition is Denied.

Article 280 of the Labor Code provides for 2 kinds of regular employees (1) those who are engaged to perform activities which are vital and necessary to the usual trade

or business of the employer and (2) those who rendered at least 1 year of service, whether continuous or broken, with respect to the activity which they are employed. In this case, Taripe belonged to the first classification. Though Taripe was only hired for a period of 5 months, it cannot be denied that the service he rendered as a power press operator was necessary to the business of RIC. The length of service given is only important when the activity to which the employee is hired is not necessary to the usual trade or business of the employer. Article 280, as amended, does not prohibit an employment contract with a fixed period.

Though Art. 280 does not prohibit fixed term employment, it must meet any of the set guidelines to comply with security of tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon by the parties without force, duress or improper pressure upon the employee and absent any other circumstances vitiating his consent; and (2) that the parties dealt with each other on more or less equal terms. In the case at bar, the contract signed by Taripe did not mention that he was hired only for a specific undertaking, nor that his services were seasonal in nature. It only mentioned that his employment was only good for 5 mos. The contract was in the nature of a contract of adhesion. It cannot be held that the parties dealt with each other on equal footing. Hence, it was held that the contract which Taripe was made to sign was made to deny him of his regular status as an employee.


11. PNOC-energy Development Corporation, Southern Negros Geothermal Project, petitioner, vs. National Labor Relations Commission, et. al.

Petitioner PNOC-Energy Development Corporation is a government-owned and controlled corporation. Its’ Southern Negros Geothermal Production Field in Negros Oriental is divided into two phases: Palinpinon I (PAL I) and Panlinpinon II (PAL II). Due to the increase in the number of activities in PAL II, PNOC hired the respondents in the Administration and Maintenance Section. After the expiration of their initial employment contracts, the same were renewed and extended.

On May 29, 1998, PNOC submitted reports to the DOLE stating that 6 of its employees were being terminated. PNOC also furnished the respondents with notices of termination, stating that they were being terminated due to the substantial completion of PAL II.

The respondents filed with the NLRC a complaint for illegal dismissal against PNOC. According to them, they rendered continuous and satisfactory services from the date of their employment until they were illegally dismissed. In addition, the respondents claimed that the dismissal was a clear case of union busting. PNOC on the other hand argued that the respondents were contractual employees and cannot claim that they were illegally dismissed since their contracts have already expired due to the completion of the PAL II.

The Labor Arbiter dismissed the complaint for lack of legal and factual basis. The LA ruled that respondents were not dismissed from work and the employer-employee relationship was terminated upon the expiration of the employment contracts. The respondents appealed to the NLRC which reversed the LA’s decision. The NLRC ruled that the respondents were regular non-employment employees having worked for more than one year. The respondents filed a Motion for Reconsideration which the NLRC denied. The PNOC field a petition for certiorari before the CA. the CA dismissed the petition and affirmed the decision of the NLRC.

Issue:

1. Whether the respondents were project or regular employees

2. Whether or not they were illegally dismissed.

Petition is denied.

On the first issue, the respondents were considered as regular employees. Article 280 of the Labor Code defines regular and contractual employees. To be considered as a project employee, the workers hired must be (1) for a specific project of undertaking, and (2) the completion or termination of such project has been determined at the time of the engagement of the employee. In this case, PNOC failed to prove that the respondents were hired as merely project employees. The employment contracts were too vague to be considered as a “specific undertaking” contemplated by law. Moreover, PNOC’s act of repeatedly and continuously hiring respondents belies the contention that the respondents were hired for a specific project.

The length of service is not the controlling test of employment. To determine whether the employee was hired for a specific undertaking, it is necessary to know if the employee was hired for a specific purpose or to perform functions vital, necessary, and indispensable to the usual business of the employer. However, in this case, the respondents are not considered as project employees since they were consistently re-hired by PNOC. With this, they are removed from the scope of project employees.

On the second issue, since the respondents are deemed regular employees, they are entitled to security of tenure as provided in Article 279 of the Labor Code. PNOC bears the burden of proof to prove that the respondents were not illegally dismissed. In this case, they failed to do so. There was no proof that the projects to which the respondents were assigned to were already completed. The PNOC only contends that the same were “substantially completed”, contrary to the notices of termination which stated that the respondents were terminated due to the completion of the project.


12. Olongapo Maintenance Vs. Chantengco

June 21, 2007

Facts:

Olongapo maintenance Services Inc. (OMSI) is engaged in the business of providing janitorial and maintenance services to various clients, one of which was Manila international airport authority (MIAA). Respondents are janitors, grass cutters and degreasers who were assigned at the airport by OMSI. On January 1999, OMSI terminated respondents on the ground that latter are project employees. According to OMSI, their employment being coterminous with OMSI’s contract with MIAA, when said contract ended, the respondents’ tenures are over. Respondents claim of illegal dismissal.

Issue: W/N respondents are project based or regular employees.

HELD:

Respondents are regular employees. The principal test in determining whether an employee is a project employee is whether:

1. He/she is assigned to carry out a “specific project or undertaking,” the duration and scope of which are specified at the time the employee is engaged in the project, OR

2. Where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring.

In the instant case, there is no proof that respondents’ engagement as project employees has been predetermined, as required by law. OMSI did not provide evidence that respondents were informed that they were to be assigned to a “specific project or undertaking” at the time they were hired. The employment contracts for the specific project signed by the respondents were never presented. All that OMSI submitted are the service

contracts between OMSI and the MIAA. Clearly, OMSI failed to establish their case by substantial evidence. Neither could the belated submission of respondents’ application forms to the CA via a motion for reconsideration benefit OMSI, said practice defeats speedy administration of justice.

In termination cases, the burden of proof rests on the employer to show that the dismissal is for a just cause. Thus, employers who hire project employees are mandated to state and prove the actual basis for the latter's dismissal. Unfortunately for OMSI, it failed to discharge the burden. All that we have is OMSI’s self-serving assertion that the respondents were hired as project employees.


13. Caparoso vs. NLRC

Feb. 15, 2007

Private-respondent Composite Enterprises Incorporated (Composite) is engaged in the distribution and supply of confectioneries to various retail establishments. Petioner-employees Caparoso and Quindipan (Quindipan) were Composite’s deliverymen. Caparoso alleged that he was hired on 8 November 1998 while Quindipan alleged that he was hired on intermittent basis since 1997.

On 8 October 1999, petitioners were dismissed from the service. They filed for illegal dismissal before the labor arbiter. Composite alleged that petitioners were both hired on 11 May 1999 as deliverymen, initially for three months and then on a month-to-month basis. Their termination from employment resulted from the expiration of their contracts of employment on 8 October 1999, thus there was no illegal dismissal.

The Labor Arbiter ruled that petitioners are regular employees of respondents on the sole reasoning that by the very nature of Composite’s business and the nature of petitioners’ services, there is no doubt as to the employment status of petitioners.

Composite appealed to the National Labor Relations Commission (NLRC). The NLRC set aside the Labor Arbiter’s Decision and dismissed petitioners’ complaint for illegal dismissal. The NLRC ruled that the mere fact that the employees’ duties are necessary or desirable in the business or trade of the employer does not mean that they are forbidden from stipulating the period of employment. The NLRC held that petitioners’ contracts of employment are valid and binding between the contracting parties and shall be considered as the law between them.

Upon appeal to CA, the latter still denied the petition The Court of Appeals held that respondents’ manpower requirement varies from month to month depending on the demand from their clients for their products. Respondents’ manpower requirement determines the period of their employees’ services. Respondents employed petitioners for the purpose of addressing a temporary manpower shortage.

Issue: Whether petitioners are regular employees of respondents and therefore guilty of illegal dismissal.

Held:

No, petitioners are NOT regular employees. Under Article 280 of the Labor Code, a regular employee is (1) one who is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed.7

However, even if an employee is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, it does NOT preclude the fixing of employment for a definite period. The prohibition against the practice of entering contracts of employment fixing a definite period is to prevent circumventing laws that are meant to protect security of tenure, but not in cases where they were voluntarily and knowingly entered upon by the parties. The Court thus laid down the criteria under which fixed-term employment could not be said to be in circumvention of the law on security of tenure, thus:

1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or

2. It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.10

There was no indication of force, duress, or improper pressure exerted on petitioners when they signed the contracts. Further, there was no proof that respondents were regularly engaged in hiring workers for work for a minimum period of five months to prevent the regularization of their employees. Petitioners’ Employment is akin to Probationary Employment.

Petitioners failed to substantiate their allegations that they were employed much longer than six months. The payslips submitted by petitioners to prove their prior employment are handwritten and indicate only the date and amount of pay. They do not even indicate the name of the employer.

http://www.lawphil.net/judjuris/juri2007/feb2007/gr_155505_2007.html#fnt7

http://www.lawphil.net/judjuris/juri2007/feb2007/gr_155505_2007.html#fnt10


On the other hand, the printed payslips during the period of the contracts (as correctly alleged by Composite) indicate not only the name of the employer but also the breakdown of petitioners’ net pay. And since, petitioners have only worked for a period of five (5) months, they are still probationary and not regular employees.


14. Tongko vs. Manufacturers Life

November 7, 2008

Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a corporation engaged in life insurance business. De Dios was, during the period material, its President and Chief Executive Officer. Petitioner Gregorio V. Tongko started his professional relationship with Manulife on July 1, 1977 by virtue of a Career Agent's Agreement[2] (Agreement) he executed with Manulife.In the Agreement, it is provided that:

It is understood and agreed that the Agent is an independent contractor and nothing contained herein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. x x x x a) The Agent shall canvass for applications for Life Insurance, Annuities, Group policies and other products offered by the Company, and collect, in exchange for provisional receipts issued by the Agent, money due or to become due to the Company in respect of applications or policies obtained by or through the Agent or from policyholders allotted by the Company to the Agent for servicing, subject to subsequent confirmation of receipt of payment by the Company as evidenced by an Official Receipt issued by the Company directly to the policyholder. x x x Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15) days notice in writing. x x x

In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became a Branch Manager. In 2001, Manulife instituted manpower development programs in the regional sales management level. Tongko received a letter from De Dios, criticizing the poor performance of Tongko’s branch. The said letter also criticized Tongko’s stubbornness in implementing the company’s objective of becoming an agent driven company. At the end of the letter, De Dios ordered Tongko to do the following:

1. You will hire at your expense a competent assistant who can unload you of much of the routine tasks which can be easily delegated. x x x x

2. Effective immediately, Kevin and the rest of the Agency Operations will deal with the North Star Branch (NSB) in autonomous fashion. x x x I have decided to make this change so as to reduce your span of control and allow you to concentrate more fully on overseeing the remaining groups under Metro North, your Central Unit and the rest of the Sales Managers in Metro North. I will hold you solely responsible for meeting the objectives of these remaining groups.

When Tongko failed to comply with said directive, Manulife exercised the termination clause in the 1977 agreement. Tongko then filed a case for illegal dismissal. Manulife argues that the company did not exercise control over Tongko’s manner of doing his job. It further argues that, even assuming arguendo that there exists an employer-employee relationship, that the termination of Tongko’s employment was for just cause, i.e. his stubbornness to follow company directives.

Issue: W/N Tongko, being an insurance agent and administrative officer, is an employee of the company.

Held: Yes. When it comes to Insurance agents, the determination of the existence of an employer-employee relationship is on a case-to-case basis. Control, one of the four and perhaps the most important determinant of said relationship, does not only refer to the employer’s control over the result but also the means and methods to be used in attaining it.

It is usual and expected for insurance companies to promulgate set of rules to guide commission so that they may not run afoul of the law and what it requires or prohibits in selling policies. However, if the specific rules and regulations enforced against insurance agents or managers are such that would directly affect the means and methods by which such agents or managers would achieve the objectives set by the insurance company, they are employees of the insurance company. In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to this conclusion:


1. the Agreement dated July 1, 1977 executed between Tongko and Manulife provided that an agent of Manulife must comply with three requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses.

2. Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko.

Thus, with the company regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be established. Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company's goals. More importantly, being a manager, Tongko was tasked to perform administrative duties. In addition, Tongko was tasked to recruit certain number of agents, in addition to his other administrative functions. In fact, it is his alleged failure to follow the company’s principle of recruitment that led to his termination. These lead to no other conclusion that he was an employee of Manulife.

Manulife also argued that even if Tongko is to be considered as its employee, his employment was validly terminated due to gross and habitual neglect of duties, inefficiency, as well as willful disobedience of the lawful orders of Manulife. However, Manulife's petition failed to cite a single iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko disobeyed or a specific act that Tongko was guilty of or would constitute gross and habitual neglect of duty or disobedience.

Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim. When there is no showing of a 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 valid or

authorized cause. Thus, for not following the two (2) notice rule prior to termination, which would have given Tongko the opportunity to defend himself, there was illegal dismissal.


15. Orozco v. 5th

division of the CA | Nachura

G.R. No. 155207, August 13, 2008 | 562 SCRA 36

FACTS

Wilhelmina Orozco was a columnist for Philippine Daily Inquirer.

She started work in March 1990 to write a weekly column entitled the “Feminist Reflection” in its lifestyle section. She submitted her articles every week except for a 6 month stint in New York where she still sent several articles through mail. She received compensation of P250 which was raised to P 300 per article.

Sometime 1992, Petitioner claims that her editor Logarta told her that the PDI editor in chief, Magsanoc wanted to stop publishing her column for no reason at all. She later on found out that it was the PDI chairperson, Apostol, who had asked to stop the publication but in a phone conversation with Apostol, she was told that Magsanoc informed her (APostol) that the lifestyle section had many columnists already.

According to PDI sometime 1991, Magsanoc met with the lifestyle section editor to discuss how to improve section and in their judgement, Orozco’s column failed to improve and continued to be superficially and poorly written,and failed to meet the high standards of the paper. Hence they decided to terminate her column.

Labor Arbiter and NLRC ruled in favor of Orozco, CA ruled otherwise.

ISSUES and ARGUMENTS

W/N Orozco was an employee of PDI .

W/N Orozco was illegally dismissed.

Petitioner: She was an employee since PDI controls the

contents of her column, has to observe deadlines and space constraint. No, she was not an employee of PDI.

No, she was not illegally dismissed.

Petitioner believes that respondents’ acts are meant to control how she executes her work. The SC does not agree. A careful examination reveals that the factors enumerated by the petitioner are inherent conditions in running a newspaper. In other words, the so-called control as to time, space, and discipline are dictated by the very nature of the newspaper business itself.

the employment status of a person is defined and prescribed by law and not by what the parties say it should be.

This Court has constantly adhered to the “four-fold test” to determine whether there exists an employer-employee relationship between parties. The four elements of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct.

Petitioner has misconstrued the “control test,” as did the Labor Arbiter and the NLRC.

Not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. Rules which serve as general guidelines towards the achievement of the mutually desired result are not indicative of the power of control.

The newspaper’s power to approve or reject publication of any specific article a columnist writes for her column cannot be the control contemplated in the “control test”, as it is but logical that one who commissions another to do a piece of work should have the right to accept or reject the product. A regular reporter is different. A regular reporter is not as independent in doing his or her work for the newspaper.

Where a person who works for another performs his job more or less at his own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount thereof, no employer-employee relationship exists.

Aside from the control test, this Court has also used the economic reality test. The economic realities prevailing within the activity or between the parties are examined, taking into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate when, as in this case, there is no written agreement or contract on which to base the relationship. In our jurisdiction, the benchmark of economic reality in analyzing possible employment relationships for purposes of applying the Labor Code ought to be the economic dependence of the worker on his employer. Orozco’s main occupation is not as a columnist for respondent but as a women’s rights advocate working in various women’s organizations. Likewise, she herself admits that she also contributes articles to other publications. Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued employment in respondent’s line of business.

The inevitable conclusion is that petitioner was not respondent PDI’s employee but an independent contractor, engaged to do independent work.


16. Bisig Manggagawa sa Tryco v. NLRC | Nachura G.R. No.

151309, October 15, 2008 |569 SCRA 122

Facts

Tryco Pharma Corporation (Tryco) is a manufacturer of veterinary medicines and its principal office is located in Caloocan City. Petitioners Joselito Lariño, Vivencio Barte, Saturnino Egera and Simplicio Aya-ay are its regular employees, occupying the positions of helper, shipment helper and factory workers, respectively, assigned to the Production Department. They are members of Bisig Manggagawa sa Tryco (BMT), the exclusive bargaining representative of the rank-and-file employees.

Tryco and petitioners signed separate Memoranda of Agreement providing for a compressed workweek schedule. This MOA was in pursuant of the DOLE Department Order No. 21, Series of 1990, Guidelines on the Implementation of Compressed workweek.

In the MOA, 8 am to 6:12 pm from Mondays to Fridays, shall be considered as the regular working hours, and no overtime pay shall be due and payable to the employee for work rendered during those hours. Should an employee be permitted to or required to work beyond 6:12 pm, such employee will be entitled to overtime pay.

In Jan 1997, BMT and Tryco negotiated for the renewal of the CBA but failed to arrive at a new agreement.

Sometime March 1997 Tryco received a letter from the Bureau of Animal Industry of the Dep. Of Agriculture reminding it that its production should be conducted in San Rafael, Bulacan and not in Caloocan City.

Accordingly, Tryco issued a Memorandum directing petitioners to report to the company’s plant site in Bulacan.

The petitioners refused to obey. BMT claims that this is unfair labor practice.

August that same year, the petitioners filed separate complaints for illegal dismissal, underpayment of wages, non-payment of overtime pay and service incentive leave and refusal to bargain against Tryco and its President.

In Tryco’s defense, the averred that the petitioners were not dismissed but they refused to comply with the management’s directive for them to report to the company’s plant in Bulacan. They also said that even long before the start of the negotiations, the company had already been planning to decongest the Caloocan office to comply with the government policy to shift the concentration of manufacturing activities from the metropolis to the countryside. The decision to transfer the company’s production activities to San Rafael, Bulacan was precipitated by the letter-reminder of the Bureau of Animal Industry.

ISSUES and ARGUMENTS

W/N the petitioners were constructively dismissed.

HELD

Tryco’s decision to transfer its production activities to San Rafael, Bulacan, regardless of whether it was made pursuant to the letter of the Bureau of Animal Industry, was within the scope of its inherent right to control and manage its enterprise effectively. While the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied

This prerogative extends to the management’s right to regulate, according to its own discretion and judgment, all aspects of employment, including the freedom to transfer and reassign employees according to the requirements of its business. Management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is, therefore, generally not constitutive of constructive dismissal. Thus, the consequent transfer of Tryco’s personnel, assigned to the Production Department was well within the scope of its management prerogative.

When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a demotion in rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. However, the employer has the burden of proving that the transfer of an employee is for valid and legitimate grounds. The employer must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits.

Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution of salaries, benefits and other privileges of the petitioners. Petitioners, therefore, anchor their objection solely on the ground that it would cause them great inconvenience since they are all residents of Metro Manila and they would incur additional expenses to travel daily from Manila to Bulacan.

The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a claim of constructive dismissal. Objection to a transfer that is grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer.


Unfair labor practice refers to acts that violate the workers’ right to organize. Without that element, the acts, no matter how unfair, are not unfair labor practices. There was no showing or any indication that the transfer orders were motivated by an intention to interfere with the petitioners’ right to organize.


17. Equipment Technical Services vs. CA

Facts:

Petitioner Equipment Technical Services (ETS) is engaged in the business of subcontracting plumbing works, one of its clients is Uniwide Sales, Inc. (Uniwide). Petitioner Joseph Dequito was the manager of ETS although CA referred to him as ETS President. On different occasions ETS hired the services of the private respondents as pipe filters, plumbers or threaders. When ETS experienced financial difficulties with Uniwide and failed to pay for the plumbing work and they were only able to pay 13th month pay equivalent to 2 weeks salary.

Respondents (Albino et. Al) unhappy with the said pay filed a case before the NLRC. Another 2 cases was filed for illegal dismissal and payment of money claims were ETS refused to hire them for another project and the cases were consolidated before the labor arbiter. Labor Arbiter Cuyuca issued a decision that respondents were ETS regular and not project employees and ETS was adjudged liable for illegal dismissal and directed to pay respondent their money claims plus 10% total award for attorney’s fees.

ETS appeal and NLRC rendered a resolution reversing labor arbiters decision about respondents status of employments and upheld the validity of the monetary award which included backwages.

ETS elevated the case to CA via petition for certiorari with the contention that NLRC committed grave abuse of discretion in affirming monetary reward in favor of respondents despite on its findings that there was no illegal dismissal. CA rendered judgment that NLRC resolutions are annulled and set aside and ordering ETS to pay respondents holiday pay and service incentive leave pay for the year of 1998 and the balance on their 13th month pay for the year of 1999. The case was remanded to Labor Arbiter for the computation. Respondents filed a MR for the CA’s decision.

Issue: W/N respondents are project employees?

Held: No. Service of project employees is coterminus (linked that both expire at the same time) with the project and they may be terminated upon the end or completion of that project or project phase for which they were hired. Regular employees enjoy security of tenure and entitled to hold on to their work or position until their services are

terminated by any of the modes recognized under the labor code.

The principal test for determined whether an employee is a “project employee” –assigned to carry out a specific project or undertaking while a “regular employee” – defined in Art 280 of the Labor Code.

CA find that not a single contract of employment fixing the terms of employment or duration of Uniwide project, or any other project submitted by ETS to the Labor Arbiter which contrary to its allegations that the respondents were merely contractual employees. Records of payroll and other documents such as contracts by ETS showing that respondent were hired for specific projects was not submitted. Also if respondents were project employees, a report of termination of employment must be submitted by ETS. ETS has failed to support their claim that respondent are project employees.

Respondent were initially hired as project employees but their repeated rehiring to perform necessary tasks to the usual trade or business of ETS changed their legal situation to regular employees.

Security of tenure covers both regular and project employees. The termination must be lawful cause and must be done in a way which affords them proper notice and hearing. The burden of proving that an employee had been dismissed for a lawful cause under the Labor Code lies with the employer.

Decision: Reinstating decision of Labor Arbiter Cuyuca is Affirmed with modification that petitioners are joint and severally ordered to reinstate private respondents with backwages.

labor digests 2010 set 1

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