Cabingas, Marie Cris Heruela

JD- Section 2B
Labor Law 2

Oceanmarine Resources Corp. Vs. Jenny Rose Nedic, G.R.236263, July 19,2022

Facts:
On Nov.2,2011, Romeo Ellao working as a company driver was instructed by his company to do
errands and drive for several employees. Ellao drove to several banks per instruction to him, while
traversing Paranaque City after a bank transaction to BPI, two unidentified assailants on motorcycles
stopped the vehicle and shot Romeo to death and steals the bag of money.

After his death, Jenny Rose his common law partner, wrote a letter demanding compensation for loss
of future income. Oceanmarine, Romeo’s employer denied the claim since they said that Jenny’s claim
was premature and was unfounded since in order for her to claim such, she has to be designated as
the legal guardian of their son, Jerome. This case was filed by Jenny in behalf of her minor son for
P3,383,640.00 as the cost for the future income that has been lost due to Romeo’s death.
Oceanmarine argued that the case of Romeo does not fall under the provisions of Article 2176 of the
Civil Code and that furthermore, Romeo’s death has already been compensated under the existing
labor laws.

RTC Ruling: Dismissed

Due to failure of establishing a causal relationship between Oceanmarine’s negligence and the death
of Romeo, RTC dismissed the case. RTC also ruled that the plaintiff did not present sufficient evidence
to support her claims.
RTC stated that an injured laborer can either recover damages under the compensation law or file a
separate legal action against the opposing party for higher damages. In this case, the respondent as
the claimant under the civil code has the burden of proving the causal connection between the
company’s negligence and the death or resulting injury.
Moreover, when Jenny was asked about the failure or fault of the company leading to Romeo’s death,
she only stated that the company failed to provide assistance to her and his son, which was not
sufficient to support the claim for damages.

CA ruling: Reversed RTC’s ruling, awarded damages

According to CA, the trial court erred in its ruling and focused too much on the negligence, which was
not explicitly mentioned in Art.1711 of the Civil Code. CA cited the case of of Candano v. Sugata-on
case, citing that the employer’s obligation for indemnity automatically applies if the worker died or
was injured in the course of employment. Therefore, the respondent was entitled to actual damages,
specifically for the loss of earning capacity.

Issues:
1. Whether or Not Article 1711 has been repealed by the Labor Code, which was enacted in 1974?
Answer: YES
There was confusion regarding whether employees could claim additional compensation under the
Civil Code in addition to benefits received under the Workmen’s Compensation Act. Initially the Court
ruled that claims for damages could only be filed under the Workmen’s Compensation act. However,
this ruling was abandoned and the court allowed employees to chose between the Workmen’s
compensation Act or the provisions of the Civil Code. If an employee chose a compensation under one
act then they are precluded from claiming an additional benefit under the other remedy.
The Court Clarified that the compensation under the Workmen’s Compensation Act is meant to
mitigate the hardships of industrial life, while the damages under the Civil Code are meant as an
indemnity for wrongful invasion of rights.
Given the irreconcilable inconsistency between aforesaid laws and their nature as a special law and a
general law, the Court declares that Title II, Book IV of the Labor Code has impliedly repealed Art.
1711 of the Civil Code.
The burden of proving the employer’s negligence and damages falls upon the claimant. Relying on
Art.1711 for claim of damages, particularly loss of future income, is inappropriate. Art.1711 has been
repealed by the Labor Code.

2. Whether or not the CA did not appreciated the Candano Case?

Answer: YES
Although Art.1711 is no longer applicable, in Candano, the court upheld that the employees should
choose between filing a claim under the labor code or pursuing a case under the Civil Code as the
basis for the compensation. In that case, the court clarified that accepting compensation under one
remedy would exclude the other, except in cases where the claimant received compensation in both
due to supervening facts or developments.
However in this case, the Candano ruling should be overturned. Since Art. 1711 is a law on
compensation and not damages, and said Article cannot be considered as an option that may be used
by an injured worker or his heir in an action for damages against an employer.

3. Whether or not Candano case should still be applied to this case?

Answer: Yes
Abandonment of Candano Ruling must be applied prospectively. Judicial decisions becomes part of
the law and is recognized as a good law until it is reversed. The Court has set guidelines for the
application and the transition of the Candano case: 1. Actions filed before the finality of Candano
which is before Aug.6, 2007 cannot rely on Art.1711. 2. Actions filed during the applicability of the
Candano case from August 6, 2007 until the finality of the present decision can rely on Art. 1711. 3.
Actions filed after the finality of the present decision cannot use Art.1711 for indemnity since it has
been repealed by the Labor Code.
In this case, the respondent filed her complaint on April 2012, so the Candano Ruling should be
applied to her claim, the respondent has reasonable grounds to assume that she could file a claim
under Art. 1711 considering the prevailing doctrine at that time. Thus, the indemnity for loss of
earning capacity may be awarded based on Candano and Art.1711 of the Civil Code due to the death
during the course of employment.

4. Whether or not the election of remedies under the Labor Code and the Civil Code are still valid?
Answer: Yes
The Court applies the doctrine of election of remedies, which states that once a choice between
inconsistent remedies are made, it is final and bars any action inconsistent with the chosen remedy. In
this case, pursuing compensation under the labor code waives the right to claim damages under the
Civil Code. The Courts concludes that the choice between compensation and damages is selective, not
cumulative or exclusive.

5. Whether or not benefits received under SSS are covered by the barring effect of Art. 179 of the
Labor Code?
Answer: No, beneficiary may claim benefits under SSS since it is not a compensation under the labor
code.
Whether or not the respondent can be assigned as beneficiary?
Answer: Yes
Art. 1711 did not specify the recipients of compensation. Art. 2206 of the Civil code states that
indemnity for loss of earning capacity should be paid to the heirs of the deceased.

Ruling:
The respondent erred in relying on Article 1711, which is now repealed under the Labor Code but her
action under Art.1711 was considered meritorious and entitled to relief based on the prevailing
doctrine in the Candano Case at the time the action was filed, prior’s to the Court’s abandonment of
that doctrine in this particular case.
WHEREFORE, the petition is PARTLY GRANTED. In view of the foregoing premises, the Court resolves
as follows:

(1) Article 1711 of the Civil Code of the Philippines is declared IMPLIEDLY REPEALED by Title II, Book IV
of the Labor Code of the Philippines;
(2) The doctrine in Candano Shipping Lines, Inc. v. Sugata-on,178 which sanctions the filing of an
action for work-related compensation under Article 1711 of the Civil Code of the Philippines and
applies the formula for computation of loss of earning capacity in Villa Rey Transit, Inc. v. Court of
Appeals,179 is ABANDONED, but the abandonment shall be APPLIED PROSPECTIVELY following the
guidelines stated in this Decision; and

(3) The Decision dated 19 December 2017 promulgated by the Court of Appeals in CA-G.R. CV No.
103881 is hereby AFFIRMED with MODIFICATION. Petitioner Oceanmarine Resources Corporation is
ORDERED to pay the heirs of Romeo S. Ellao the amount of P1,410,000.00, as indemnity for loss of
earning capacity, ten percent (10%) of the amount awarded as attorney's fees, and costs of suit. All
monetary awards shall earn interest at the rate of six percent (6%) per annum from the finality of this
Decision until fully paid.

SO ORDERED.
Maximo Calalang v. Williams (G.R. No. 47800; Dec. 2, 1940)
Facts:
Maximo Calalang filed a petition for a writ of prohibition against the respondents - Williams
as Chairman of the National Traffic Commission.
Calalang contends that ACT NO. 548 is unconstitutional as it constitutes an undue delegation
of legislative power. And that it also infringes the constitutional precept of the promotion of social
justice to insure the well being and the economic security of all the people.
It is declared in the petition that the National Traffic Commission, in its declaration on July 17, 1940,
resolved to propose to the Director of the Public Works and to the Secretary of Public Works and
Communications that the animal-drawn transport be prohibited from running along
1. Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street from 7:30Am to
12:30 pm and from 1:30 pm to 530 pm;
2. Along Rizal Avenue extending from the railroad track travelling at Antipolo Street to Echague Street
from 7 am to 11pm for a period of one year from the date of the opening of the Colgante Bridge to
traffic.
The Chairman of the National Traffic Commission on July 18, 1940 recommended to the
Director of Public Works with the approval of the Secretary of Public Works the adoption of the
measure proposed in the resolution aforementioned in pursuance of the provisions of the
Commonwealth Act No. 548 which authorizes said Director with the approval of the Secretary of the
Public Works and Communication to promulgate rules and regulations on traffic on national roads.
On August 2, 1940, the Director suggested to the Secretary the recommendations made by
the Chairman of the National Traffic Commission with some modifications.
The Secretary of Public Works approved it on August 10,1940.
The Mayor of Manila and the Acting Chief of Police of Manila have enforced the rules and
regulation. As a consequence, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places mentioned above to the impairment not only of their owners but of the
commuters as well.
Issues:
1.Whether the rules and regulations promulgated by the respondents pursuant to the provisions of
Commonwealth Act NO. 548 constitute an unlawful inference with legitimate business or trade and
abridged the right to personal liberty and freedom of locomotion?
Held:
No. The promulgation of the Act aims to promote a safe transit and avoid obstructions on national
roads in the convenience of the public. In the said enacting law, the National Assembly made a choice
in consideration of public convenience and welfare. It was made to relieve congestion of traffic, which
jeopardizes public safety. The promulgation of the said law is to promote the general welfare which
may interfere with personal liberty, property, business and occupation. Persons and property may be
subject to all kinds of restraints and burdens in order to secure the general comfort, health, and
prosperity of the State. To the fundamental goal of the government, the rights of the individual are
subordinated.
2 . Whether the rules and regulations complained of infringe upon the constitutional precept
regarding the promotion of social justice to insure the well-being and economic security of all the
people?
No. Social justice means the promotion of the welfare of all the people, the acceptance by the
Government of measures to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social equilibrium in the relatrionship of the
members of the community, constitutionally, through the adoption of measures which are legally
justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principles of salus populi est suprema lex.
Ruling:
THE PETITION IS DENIED WITH COSTS AGAINST THE PETITIONER.
Richard N. Wahing, Ronald L. Calago and Pablo P. Mait v. Spouses Amador Daguio andEsing
DaguioG.R. No. 219755. April 18, 2022

Petitioners Richard N. Wahing (Wahing), Ronald L. Calago (Calago), and Pablo P. Mait (Mait)
(collectively, petitioners Wahing et al.) were placed under the operational control of Amador Daguio
and Esing Daguio (respondents Spouses Daguio). Mait was ordered to “stop tapping rubber tree”.
Wahing and Calago were similarly ordered to stop working on the respondents Spouses Daguio’s
rubber trees. After such preventing them to work,petitioners filed a case for illegal dismissal before
the Labor Arbiter.

LA dismissed the case finding that there is no employer-employee relationship but that of a landlord-
tenant relationship only. Petitioners Wahing, et al. elevated their case before the National Labor
Relations Commission which dismissed the case and remanded it to the LA for decision on the merits.
The Labor Arbiter directed the parties to submit their respective Position Papers. Only petitioners
Wahing, et al. were able to submit their Position Paper. Respondents Spouses Daguio failed to do so
despite notices.The Labor Arbiter decided on the merits in favor of petitioners Wahing, et
al. Respondent Spouses Daguio appealed the case which decided in their favor again remanding the
case before the Labor Arbiter for reception of their evidence. Failing to have the Commission ruling
reconsidered, petitioners Wahing, et al. filed a Petition for Certiorari before the Court of Appeals.

The CA decided the case based on the merits and found no employer-employee relationship between
petitioners Wahing, et al. and respondents Spouses Daguio. Failing to have the decision of the
appellate court reconsidered, petitioners Wahing, et al. filed a Petition for Review on Certiorari before
the Supreme Court.

Petitioners Wahing, et al. argue that it was erroneous to consider the arguments of respondents
Spouses Daguio since they failed to present evidence before the Labor Arbiter and that they failed to
perfect their appeal,for failure to post the correct amount of bond.

The Supreme Court held that the Court of Appeals has the authority to review and decide the case on
the merits, consistent with the principle of judicial economy .The Court held that while petitioners
Wahing, et al. were correct that the Court of Appeals should generally review only the issues raised in
the parties’ pleadings, the Court of Appeals may review the case “in its entire context” to guarantee
its effective resolution, and to ensure the least control to the judiciary and to the party litigants.

The Supreme Court went beyond the usual four-fold test to determine employer-employee
relationship, but decided the case on a so-called “economic reality” test which requires “the totality
of economic circumstances of the worker” in order to determine the existence of an employer-
employee relationship. The Court citing Francisco vs. National Labor Relations Commission, 532 Phil.
399 (2006), the Supreme Court held:

“Thus, the determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services performed
are an integral part of the employer’s business,· (2) the extent of the worker’s investment in
equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the
worker’s opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight
required for the success of the claimed independent enterprise; (6) the permanency and duration of
the relationship between the worker and the employer; and (7) the degree of dependency of the
worker upon the employer for his continued employment in that line of business.”

Applying the decision in the Francisco case, the Supreme Court held that petitioners were able to
establish through the economic reality test that respondents Spouses Daguio exercised control over
them particularly their hours, means and methods of work. Wahing, et al. were able to show to be
economically dependent upon respondent Spouses Daguio for their livelihood.
The Court held:

“Likewise, the lack of proof of other plantations willing to employ petitioners cannot discount the
proof presented that: (1) respondents exercised control over petitioners by constantly supervising
them during their required work hours; (2) petitioners had no opportunity to exercise initiative or
control their own profit or loss from their work, as they were paid a set daily wage; and (3) petitioners
could be dismissed for repeatedly violating their required daily work engagements.

The foregoing circumstances, when applied to the two-tier test in Francisco, demonstrates that
respondents exercised control over petitioners’ hours, means, and methods of work. Petitioners were
also shown to be economically dependent upon respondents for their livelihood. Thus, there exists an
employer- employee relationship between the parties.”
Richard Rivera v. Genesis Transport Service Aug. 3, 2015
Facts:
Rivera was employed by Genesis as a bus conductor in June 2002. Moises ,Genesis’ president and
general manager, before the Labor Arbiter, acknowledged that he was dismissed by Genesis on
account of a discrepancy in the amount he declared on bus ticket receipts.
He declared that on June 10, 2010, he received a Memorandum giving Rivera 24 hours to justify why
he should not be sanctioned for remitting the amount of P198 instead of the correct amount of P394
worth of bus ticket receipts. Rivera responded that it was an honest mistake, which he was unable to
correct because the bus encountered mechanical problems.
According to Genesis’ inspector Villaseran he conducted a "man to man" inspection on the tickets
held by the passengers on board Bus No. 8286 who had transferred from Bus No. 1820 in San
Fernando, Pampanga. (Bus No. 1820 broke down.) In the course of his inspection, he noticed that
Ticket No. 723374 VA had a written corrected amount of P394.
However, the amount marked by perforations made on the ticket, which was the amount originally
indicated by the bus conductor, was only P198. Upon inquiring with the passenger holding the ticket,
Villaseran found out that the passenger paid P500 to Rivera, who gave her change in the amount of
P106. Upon verification, it was found that Rivera only remitted P198.
On July 20, 2010, Genesis served on Rivera a written notice informing him that a hearing of his case
was set on July 23, 2010. Despite his explanations, Rivera's services were terminated through a
written notice dated July 30, 2010. Contending that this termination was arbitrary and not based on
just causes for terminating employment, he filed the Complaint for illegal dismissal, which is subject
of this Petition.

Labor Arbiter agreed with the respondents and dismissed Rivera’s complaint. While the NLRC affirmed
the LA’s decision and denied Rivera’s Motion for Reconsideration.
The Court of Appeals under (Rule 65) sustained LA and NLRC’s decisions and denied Rivera’s Motion
for reconsideration.

Issues
Whether or Not Rivera was dismissed for a just cause?
Answer: NO, illegal and unjust termination.
It is not enough for an employee to be found to have engaged in improper or wrongful
conduct. To justify termination of employment, misconduct must be so severe as to make it evident
that no other penalty but the termination of the employee's livelihood is viable.

WON Moises is personally liable?

Answer: NO,a corporation has a personality separate and distinct from those of the persons
composing it. Petitioner has not produced proof to show that Moises acted in bad faith or with malice
as regards the termination of his employment. Thus, Moises did not incur any personal liability.
Phil. Blooming Mills Employment Organization v. Phil. Blooming Mills Co. June 5, 1973

Facts:

The petitioner Philippine Blooming Mills Employees Organization (PBMEO) is a legitimate

labor union composed of the employees of the respondent Philippine Blooming Mills Co., Inc.,
PBMEO decided to stage a mass demonstration in front of Malacañang to express their grievances
against the alleged abuses of the Pasig Police.
Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at
Malacañang on March 4, 1969, in protest against alleged abuses of the Pasig police and that they
informed the respondent Company of their proposed demonstration.
The Philippine Blooming Mills Inc., called for a meeting with the leaders of the PBMEO after
learning about the planned mass demonstration. During the meeting, the planned demonstration was
confirmed by the union. But it was stressed out by the union that the demonstration was not a strike
against the company but was in factual exercise of the laborers inalienable constitutional right to
freedom of expression, freedom of speech and freedom for petition for redress of grievances.
The company asked them to cancel the demonstration for it would interrupt the normal
course of their business which may result in the loss of revenue. This was backed up with the threat of
the possibility that the workers would lose their jobs if they pushed through with the rally.
A second meeting took place where the company reiterated their appeal that while the
workers may be allowed to participate, those from the 1st and regular shifts should not absent
themselves to participate, otherwise, they would be dismissed. Since it was too late to cancel the
plan, the rally took place and the officers of the PBMEO were eventually dismissed for a violation of
the ‘No Strike and No Lockout’ clause of their Collective Bargaining Agreement.
The lower court decided in favour of Philippine Blooming Mills Co., Inc., and the officers of
the PBMEO were found guilty of bargaining in bad faith. The PBMEO’s motion for reconsideration was
subsequently denied by the Court of Industrial Relations for being filed two days late.

Issue:
Whether the dismissal of PBMEO officers from their employment constituted a violation of their
constitutional right to freedom of expression, assembly, and petition. -- YES.

HELD:
The Supreme Court held that PBMEO needs even the first and regular shift workers for the
demonstration as their complete presence in the mass demonstration would bring forth the
maximum sympathy for the credibility of their campaign and prompt action on the part of
corresponding agencies.

The company’s assertion that it would undergo loss because of the nonattendance of the workers
from 6 AM – 2 PM is an appeal for the conservation of simply their property rights. The appropriate
punishment that could have been imposed by the establishment – if it deserves any penalty at all –
should have been merely to charge the one-day absence of the workers against their vacation or sick
leaves.
While the Bill of Rights protects property rights, human rights such as freedom of expression,
assembly, and petition, are supreme over property rights. Violation on human rights requires a more
stringent criterion , as opposed to impairment of property rights.

The rights of free expression, free assembly and petition, are not only civil rights but also political
rights essential to man's enjoyment of his life and to his full and complete fulfillment. Through these
freedom any citizen can participate in the periodic establishment of the government not only through
the right of suffrage but also in the administration of public affairs such as the discipline of an abusive
public officer.
Zabal v. Rodrigo Duterte Feb. 12, 2019 , GR. 238467
Zabal vs. Duterte, G.R. No. 238467, February 12, 2019
FACTS:
 Petitioners filed a petition for prohibition and mandamus with application for TRO,
Preliminary Injunction, and/or Status Quo Ante Order against respondent Pres. Duterte,
Executive Secretary Salvador C. Medialdea, and Secretary Eduardo M. Año of the
Department of Interior and Local Government (DILG).
 Feb. 2018, President Duterte first made public his plan to shut it down during a business
forum held in Davao.
 April 4, 2018 President Duterte ordered the shutting down of the island in a cabinet meeting.
This was established by then Presidential Spokesperson Harry L. Roque, Jr. in a press briefing
the next day where he officially announced that for a maximum period of six months starting
April 26, 2018, Boracay shall be closed.
 Petitioners, who were making a living from the tourist activities in Boracay, claimed that
since the news of Boracay's closure, less tourists had been engaging the services of Zabal and
Jacosalem affecting their earnings for their family.
 In their supplemental position, petitioners alleged the subject issue.
ISSUE: By issuing Proc. No 475, did the President intrude into the autonomy of the LGUs concerned?
RULING: No. The alleged intrusion of the President into the autonomy of the LG Us concerned is trivial
to merit the Court's consideration. Contrary to petitioners' argument, RA 10121 recognizes the role of
the LGU in disaster risk reduction and management, as shown by the number of the legislative
policies set out in the statute. This role is echoed in the questioned proclamation. The roles of each
government agency are particularly defined and enumerated in Executive Order No. 53 and all are in
accordance with their respective mandates.
ARIEL M. REYES, PETITIONER, VS. RURAL BANK OF SAN RAFAEL (BULACAN) INC., FLORANTE
VENERACION, CELERINA SABARIAGA, ALICIA FLOR KABILING, FIDELA MANAGO, CEFERINO DE
GUZMAN, AND RIZALINO QUINTOS, RESPONDENTS. [ G.R. No. 230597. March 23, 2022 ]

Several stockholders of RBSR complained about the discrepancies of the purchase price of stocks
subscriptions appearing in the original receipts as against the duplicate copies issued by the bank. The
anomaly involved a huge amount collected from the stockholders of RSBR which if not corrected will
tarnish the image of the Bank. Acting upon the anomaly, RSBR conducted an investigation. It was
discovered that the original receipts which were given to the stockholders were priced ranging from
250.00-275.00, but the duplicate copies which were retained by RSBR were only priced by 100.00. The
original copies was signed by the president of RSBR and the duplicate copies were signed by either its
then treasury head Bognot or branch manager Eusibio.

Thus, in compliance with the Manual Regulations for Banks mandating the propmpt report of
anomalies to the Bangko Sentral ng Pilipinas, RSBR’s board of directors approved a report on crimes
and losses and directed Reyes to certify the same. However Reyes, refused to certify the report.

Reyes, claimed that instead of furnishing him hard copies of the reports and its original attachments
to enable him to verify and certify the same, RSBR issued him to show cause orders and put him on
preventive suspension for neglect of duty. Several administrative hearings were scheduled to hear
Reyes’s side but all were ignored.

Bognot and Eusibio who were principally accused of the anomaly filed a complaint against RBSR for
illegal suspension and money claims.

LA ruling:

Finds RBSR guilty of illegally dismissing Reyes, Bognot and Eusebio. It was based on the Bank’s failure
to submit its position paper and evidence during the proceedings. Based on the complainant’s
evidence, the arbiter found that complainant’s dismissal was without a valid cause and that they were
denied due process for having been summarily dismissed.

NLRC ruling:

It reversed the LA’s decision. The NLRc applied a liberal interpretation and allowed RBSR to submit
countervailing evidence even on appeal. The bank was able to discharge the burden of proving that
they had a just cause to terminate the complainant’s employment.

CA ruling:

It affirmed the NLRC’s decision but proceeded to rule that petetioners’ were validly dismissed for a
just and valid cause.

Reyes elevated the case before the Supreme Court on the other hand Bognot yielded and no longer
joined Reyes’s petetion.

Issues:

Whether or not the two applications of liberality of procedural rules are satisfied.

Whether or not the liberal interpration of the rules is primarily granted for the employee’s favor and
not the employer

Whether or not an employee who refused to obey the order of the employer to submit report is
willful in character.

Held:

The Supreme Court found the appeal meritorious.

According to Fr. Bernas the heart of procedural process is the opportunity to be heard. What is
required is not the actual hearing but the real opportunity to be heard. On the records, RBSR have
been accorded ample time to present their case.

In this case Reyes was given enough opportunity to explain his side. While Reyes was initially vharged
with insubordination, the show cause order accused him of participation in the alleged theft/
misappropriation and neither is there any showing that the same has been established not it was
specifically mentioned as the reason for his dismissal. Instead the termination letter which was sent to
Reyes and Bognot were composed of loose statements.Neither there were statements that mention
which specific rule Reyes had violated. Surely this was not the notice contemplated in the Labor Code.
In view of the foregoing the Court finds RBSR failed to comply with the due process in dismissing
Reyes.

Peter Angelo Lagamayo v. Cullinan Group Inc. Nov. 11, 2021

Facts:

Cullinan Group. Inc., (CGI) a company engaged in the production of jewelry, hired Peter Angelo
N.Lagamayo (petitioner) as a workshop supervisor.

CGI called the attention of petitioner regarding several company violations reported in the workshop
under his supervision, such as: gambling; imbibing alcoholic beverages; theft of 0.10 gram of gold on
Job Orders; and taking of excess gold from the workplace. The Manager/OIC of the Human Resource
(HR) office informed petitioner that he was placed under preventive suspension.

CGI representatives sent him a Notice to Explain where he was informed that the following offenses
are on account of his negligence: a) breach of trust and confidence, dishonesty; b) improper conduct
and behavior; and c) negligence towards work responsibilities.

Petitioner submitted a written explanation denying the charges against him. CGI informed petitioner
that he was found guilty of the company charges.

On July 11, 2011, petitioner filed a complaint for illegal dismissal, payment of back
wages and separation pay in lieu of reinstatement. On the contrary, respondents maintained that
petitioner was not constructively dismissed, but terminated for a just cause. They claimed that the
employees in the jewelry workshop under his supervision were involved in various irregularities such
as theft, gambling and drinking of alcohol within company premises. As a supervisor, his duty was to
prevent such violations, but he failed to do so on account of his negligence for which he was charged
with “breach of trust and confidence, dishonesty" and "negligence towards work responsibilities.

LA: Dismissed petitioner's Complaint for illegal dismissal.

NLRC: Affirmed the dismissal of the Complaint but with modification

CA: Petitioner was constructively dismissed but based on a just cause.

Issue: Whether or not the CA committed grave abuse of discretion when it upheld the dismissal of
petitioner for breach of trust and confidence.

Ruling:
No. Law and jurisprudence have recognized the right of employers to dismiss employees by reason of
loss of trust and confidence. Moreover, in the case of supervisors or personnel occupying positions of
responsibility, loss of trust justifies termination. To justify a dismissal based on loss of trust and
confidence, the concurrence of two conditions must be satisfied: (1) the employee concerned must be
holding a position of trust and confidence; and (2) there must be an act that would justify the loss of
trust and confidence. In this case the two requisites were satisfied.

First: Petitioner as a workshop supervisor is tasked, among others, to regularly monitor the
performance of his subordinates and ensure that they comply with company policies at all times. With
this, petitioner should promptly report any irregularity to the concerned division for appropriate
action. Thus, he is expected to be on the uppermost of any situation that may occur under his
supervision. Such position certainly requires full trust and confidence of the company. Definitely,
petitioner held a position of trust and confidence in the company.

Second requisite: There must be an act that would justify the loss of trust and confidence, the degree
of proof required in proving loss of trust and confidence differs between a managerial employee and a
rank and file employee. It is noted that petitioner is a managerial employee and mere existence of a
basis for believing that he has broken the trust of his employer is enough.

Unfortunately, petitioner, a workshop supervisor, failed to call his subordinates’ attention on their
violations within company premises and report the same to management, which omission served as
cause for respondents to believe that he is unworthy of the trust and confidence required by his
position. The degree of proof required to justify loss of trust and confidence is merely substantial
evidence. The Court explained that an acquittal in a criminal case will not necessarily exonerate an
employee from a charge of loss of trust and confidence, because labor cases require a lower degree of
proof than criminal cases, thus the evidence offered, may still prove the employee's guilt to warrant
his termination, despite his or her acquittal. WHEREFORE, the Petition for Review is DENIED. Decision
and Resolution of the Court of Appeals are hereby AFFIRMED with MODIFICATION.
DOMINGA P. CABUG-OS, DOING BUSINESS UNDER THE NAME, KEM'S STORE, PETITIONER, VS.
TERESITA JORTA ESPINA, RESPONDENT. [ G.R. No. 228719. August 08, 2022 ]

Facts:
Petitioner Dominga Cabug-os does business under Kem’s Sari-Sari Store in Mandaluyong City.
Respondent Teresita Espina started working as a tindera at the store her salary was Php2,500.00 per
month. It was increased to Php3,500.00 per month in 2012.
November 2012, Cabug-os advised Espina to take a leave of absence and just wait for Cabug-os to call
for her to resume work.
Espina called in December 2012 and January 2013 to inquire when she could return to work but
Cabug-os did not answer her calls.
In February 2013, Espina went to the store and found that there was already a new tindera. She was
also told that her services were no longer needed. Hence, Espina filed a complaint for illegal dismissal,
underpayment of salary, and non-payment of benefits with the Labor Arbiter. Cabug-os claimed
before the Labor Arbiter that Espina was not dismissed but was asked to wait until the construction of
the stockroom was finished. She also said that since she only employs two people as tindera, Espina
was not entitled to her money claims because her business was exempt from the payment of
minimum wage.
The Labor Arbiter found that Espina was illegally dismissed and was awarded Php10,000 as
separation pay. All other money claims were dismissed.
On appeal, the National Labor Relations Commission (NLRC) ruled that Espina was entitled to both
backwages and reinstatement. She was also awarded salary differentials, 13th month pay, and
attorney’s fees. Since reinstatement was no longer possible, Espina was given separation pay. The
total judgment award was Php678,804.69.
Cabug-os filed a petition for certiorari before the Court of Appeals (CA). The latter denied the
petition. Hence, the instant petition.
Petitioner insists that respondent was not a regular employee or even a tindera but was
a kasambahay or domestic helper of a sari-sari store since respondent’s actual tasks were cleaning,
wiping, and sweeping. Petitioner opposes that the monetary award of P678, 804.69 is harsh, despotic,
and confiscatory, considering that based on her Mayor's Permit for 2010- 2012, it was six times the
inventory value of her store. Respondent stresses that she was a regular employee of petitioner, not
a kasambahay, since she attended to petitioner's business rather of petitioner’s household. She
further states that the judgment was fair considering that the value stated in her Mayor's Permit was
merely a tax base.

Issue:
Whether or not the monetary award to respondent Espina is harsh, despotic, and
confiscatory.

Ruling:
Considering the Labor Arbiter, the NLRC, and CA’s unanimous finding that respondent has
been illegally dismissed, respondent was entitled to back wages and separation pay. The total
judgment award, however, will need to be re-examined. Considering a sari-sari store and the State’s
recognition of the informality of its operations, it is to be wondered why the NLRC and the CA would
treat petitioner’s sari-sari store like a large-scale commercial enterprise. To award labor claims on this
presumption would be unfair, unreasonable, and unconscionable. Here, it is clear that respondent
was illegally dismissed, and petitioner should be made liable for that illegality. The protection of labor,
however, must be balanced with the protection of establishments whose clientele mainly consists of
the working class and the urban poor. When awarding labor claims, the tribunal must also consider
the type of establishment employing the laborer. Thus, the judgment award should be recomputed as
a matter of equity. Respondent’s money claims from November 11, 2012, should be at the rate of her
last salary, or Php3,500.00. Separation pay should be at the rate of one month salary for every year of
service. Salary differentials and attorney’s fees should also be deleted. Workers in the informal sector
are no less deserving of protection than those in the formal sector. However, labor tribunals must
always find a way to balance the rights and interests of even those that are often overlooked and
under served. The State’s protection should not come at the expense of depriving those who rely on
little profits to get by.
Reyno Dimson v Gerry Chua Dec. 5, 2016

FACTS:
The instant case filed by the petitioner, representing the other 14 complainants, against the
respondent, is an offshoot of the labor case entitled “Reyno Dimson, et al. v. SEASUMCO, MAC,
United Coconut Planters Bank (UPCB), and Cotabato Sugar Central Co., Inc. (COSUCECO).”
On September 22, 2003, the said labor case for illegal dismissal with monetary claims was decided in
favor of the complainants. Hence, SEASUMCO and MAC, as well as the members of their board of
directors, were ordered to pay jointly and severally the sum of Three Million Eight Hundred Twenty-
Seven Thousand Four Hundred Seventy Pesos and Fifty-One Centavos (P3,827,470.51).

The LA’s decision became final but the judgment continued to be unfulfilled. Consequently, the
petitioner filed an Ex-parte Motion for the issuance of an amended alias writ of execution asking for
the inclusion of the board of directors and corporate officers of SEASUMCO and MAC to hold them
liable for satisfaction of the said decision.

In an Order dated August 16, 2007, the LA granted the motion; Aggrieved, the respondent elevated
the matter to the NLRC by filing a Memorandum of Appeal arguing that he was denied due process.
In a Resolution dated January 11, 2008, the NLRC dismissed the appeal for lack of merit and sustained
the findings of the LA. The respondent filed a Motion for Reconsideration, but the NLRC Resolution
denied his motion.

Hence, he filed a petition for certiorari with application for temporary restraining order
(TRO)/preliminary injunction before the CA. He maintained that the labor tribunals violated his right
to due process when the LA authorized the issuance of the amended alias writ of execution against
him for the corporation’s judgment debt, although he has never been a party to the underlying suit.
ISSUE:
Whether the respondent can be held solidarity liable with the corporation, of which he was an officer
and a stockholder, when he was never impleaded as a party to the case.
RULING:
No. Following the clear language of the NLRC, notices or summons shall be served on the parties to
the case personally. The same rule allows under special conditions, that service of summons may be
prompted in accordance with the provisions of the Rules of Court. It is plain that the LA cannot
acquire jurisdiction over the person of the respondent without the latter being served with summons.
However, if there is no valid service of summons, court can still acquire jurisdiction over the person of
the defendant by virtue of the latter’s voluntary appearance.

In this case, since the respondent is one of the officers of SEASUMCO, service of summons must be
made to him personally or by registered mail. However, it is evident that no service of summons and
notices were served on the respondent and he was not impleaded in the case. He was pulled to the
case after he reacted to the improper execution of his properties.
The Court scanned the records but found nothing to indicate that summons with respect to the said
complaints were ever served upon the respondent. True to his claim, the respondent, indeed, was
never summoned by the LA. Besides, even supposing that the respondent has information of a labor
case against SEASUMCO, this will not serve the same purpose as summons to him.

The respondent did not voluntarily appear before the LA as to submit himself to its jurisdiction.
Contrary to the petitioner’s position, the validity of a judgment or order of a court or quasi-judicial
tribunal which has become final and executory may be attacked when the records show that it lacked
jurisdiction to render the judgment. For a judgment rendered against one in a case where jurisdiction
over his person was not acquired is void.
Guided by the foregoing norms, the CA properly concluded that the proceedings before the LA
deprived the respondent of due process. Considering that the respondent was never impleaded as a
party respondent and was never validly served with summons, the LA never acquired jurisdiction over
his person. WHEREFORE, the petition is DENIED. The Decision dated August 13, 2009 and Resolution
dated April 14, 2010 of the Court of Appeals in CA-G.R. SP No. 02575-MIN are AFFIRMED.
FLORENCIO B. NEDIRA,* SUBSTITUTED BY HIS WIFE EMMA G. NEDIRA, PETITIONER, VS. NJ WORLD
CORPORATION, REPRESENTED BY MICHELLE Y. BUALAT, RESPONDENT. [ G.R. No. 240005. December
06, 2022 ]

On September 2, 2010, Florencio was employed as a driver by a taxi company.

Florencio filed a constructive dismissal complaint with the NLRC on October 29, 2013, but he passed
away while the case was still pending.
Emma, the widow of deceased Florencio, filed an Omnibus Motion (For Substitution and Extension of
Time to File Position Paper).

When Emma was able to file a position paper, she claimed that Florencio was constructively dismissed
from employment since he was placed on indefinite floating status. The status was conditioned upon
the payment of a penalty of Php6, 000.00, which he could not gather because he was not permitted
to work.

The taxi company countered that the complaint for constructive dismissal did not involve property or
property rights. Thus, it did not survive the death of Florencio, and Emma could no longer pursue it.
The taxi company also averred that Florencio was an on-call taxi driver who stopped driving after
failing to remit boundary payments in 2013. The case reached the Supreme Court.

On the issue of illegal dismissal, the Court ruled that Florencio, through Emma, failed to prove the fact
of his dismissal. According to the Court, there was no evidence as to the nature of the supposed
suspension, as well as the circumstances of the alleged constructive dismissal. Neither was there
documentary proof to support the claim that the taxi company required Florencio
to pay Php6,000.00, and that, due to his alleged nonpayment, he was not permitted to work. For the
Court, the charge of constructive dismissal was not established.

In this case, the Court looked into a matter that was not raised as an issue in the petition filed before
it. According to the Court, the present case presented the opportunity to clarify the effect of the
death of a complainant to a pending suit for illegal dismissal.

The Court mentioned the case of Fontana Development Corp. v. Vukasinovic which characterized a
complaint for illegal dismissal as one that involves injury to the person and, thus, does not survive the
death of the employee.

According to the Court, the application or use of the classification of ordinary civil actions as to cause
or foundation on the effect of death of any of the parties to a pending action, as ruled in Fontana
Development Corp., involved an inherent acknowledgment that such classification properly applies to
labor complaints for illegal dismissal.

In the present case, the Court examined the propriety of applying such classification to a labor
complaint. It questioned:

Should a complaint for illegal dismissal be analyzed through the lens that one views an ordinary civil
action — classified as either one that involves injury to the person or one that primarily affects
property or property rights?

The Court answered in the negative. The Court ruled that a complaint for illegal dismissal may not be
classified, like an ordinary civil action, as to cause or foundation for purposes of determining the
effect of death of any of the parties to the case.

The Court laid down two reasons.

 First, an employment contract is one imbued with public interest.

  Second, an illegal dismissal is a violation of the Labor Code of the Philippines and its
implementing rules and regulations.

The Court pointed out that such characterization fails to take into consideration an important matter
in that when an employer illegally dismisses an employee, said employer is essentially violating a
statute.

The Labor Code of the Philippines expressly upholds the constitutionally guaranteed right to security
of tenure by ordaining that a regular employee may not be terminated from service except for just or
authorized cause. Thus, an illegal dismissal — a dismissal without just or authorized cause — is not
only a violation of the contractual relations between the employer and the employee but is, in fact, a
violation of the Labor Code of the Philippines and its implementing rules and regulations.

The Court highlighted the dual character of a complaint for illegal dismissal. It stated that it is an
action predicated upon an injury to the rights of the plaintiff, the purportedly illegally dismissed
employee. One’s employment is a right and its violation is an injury. At the same time, the award
arising from the finding of illegal dismissal — the payment of backwages — is not merely for redress
of a private right, but a command for the employer to make public reparation for his or her violation
of the Labor Code.

The Court added if one couples this dual character with the public interest imbued in labor
contractual relations, it would be evident that complaints for illegal dismissal cannot be classified as
to cause or foundation in the same manner as ordinary civil actions insofar as the death of any of the
parties and its effects are concerned. To do so would be to oversimplify the nature of a complaint for
illegal dismissal and, in the process, ignore certain characteristics of illegal dismissal complaints which
distinguish and prevent them from fitting said mold of ordinary civil actions.

The Court thus ruled that substitution by the heirs of the deceased complainant in a pending
complaint for illegal dismissal should be allowed. This approach respects life to the public interest
imbued in contractual relations between the employer and the employee. Further, it allows for public
amendment by the employer in case he or she is found to have violated the Labor Code.
Market Investigations Ltd v Minister of Social Security (1968)
Facts:
A market research interviewer worked on and off under series of contracts whereby she interviews or
asks questions for a company per the instruction issued by the company. She had to complete the
work within a specified period but she has no specific working number of hours per day, as long as she
can perform the tasks assigned to her in a specified date. There was no provision for holiday or sick
pay. And she was free to work others while working for the company.

Issue: Whether or not she was an employee or an independent contractor?

Held: The company did have some control over the manner in which she did her work. The terms of
the contract were consistent with a contract service. The Court emphasized that she did not provide
for her own tools and took no risk. She was therefore not in business on her account and was an
employee and not an independent contractor. The court also emphasized that there was no
exhaustive test compiled nor strict rules laid down as to the factors which identified a contract of
service.
Albert Del Rosario et al v. ABS CBN in eight consolidated petitions (Sept. 8, 2020)

Facts:

ABS-CBN hired three different groups of employees to work in their productions.

Sometime in 2002, ABS-CBN adopted a system known as the Internal Job Market (IJM) System. The
IJM scheme led to the creation of a work pool of accredited technical or creative manpower who
offered their services for a fee. The workers were regarded as independent contractors, not regular
employees. The workers were asked to sign a contract that would place them all under the IJM Work
Pool. They were included in the pool without their consent . Each of the workers was given an hourly
rate. They did not receive overtime pay, premium pay, and holiday pay for the work they rendered
during rest days, special holidays, and regular holidays.

The workers formed the ABS-CBN IJM Workers' Union. They started demanding recognition as regular
employees. Thus, the workers filed cases for regularization before the LA.
Sometime in 2007, ABS-CBN required the workers in ABS-CBN Corporation v. Payonan, et al. to sign an
employment contract, which stated that they were "freelance employees.” Those who refused to sign
were deprived of their benefits.

In May 2010, ABS-CBN allegedly forced the union members to sign a contract and abandon their
claims for regularization, the workers refused to comply. ABS-CBN effected a series of mass dismissals
of workers on various dates from June to September 2010. Those who refused to sign were
terminated from their employment. No notice of termination was given to the workers.
Issues:
1. Whether or not the workers are regular employees of ABS-CBN;
2. Whether or not the workers in G.R. Nos. 202495 & 202497 and G.R. No. 202481 are entitled
to the benefits under the CBA with ABS-CBN; and
3. Whether or not the workers in G.R. No. 222057; G.R. No. 224879; G.R. No. 225874;
G.R. No. 219125; G.R. No. 225101; and G.R. No. 210165 were illegally dismissed by ABS-CBN.

Held:

The workers are employees of ABS-CBN. In ascertaining the existence of an employer-employee

relationship, the Court has invariably adhered to the four-fold test, which pertains to: (i) the selection
and engagement of the employee; (ii) the payment of wages; (iii) the power of dismissal; and (iv) the
power of control over the employee's conduct, or the so-called "control test.” In the case of Begino,
the Court has ruled that that cameramen/editors and reporters are employees of ABS-CBN following
the four-fold test. The Begino ruling is applicable here.

The workers are regular employees. The Labor Code classifies four (4) kinds of employees, as follows:
(i) regular employees, or those who have been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; (ii) project employees, or those
whose employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the employees' engagement; (iii) seasonal
employees, or those who perform services which are seasonal in nature, and whose employment lasts
during the duration of the season; and (iv) casual employees, or those who are not regular, project, or
seasonal employees. Jurisprudence added a fifth kind — fixed-term employees, or those hired only for
a definite period of time.

The principal test is whether or not the project employees were assigned to carry out a specific
project or undertaking, the duration and scope of which were specified at the time the employees
were engaged for that project.
The workers are not program/project employees of ABS-CBN. The business of creating and producing
television shows is heavily dependent on viewer preference and advancements in modern
technology. Given the many television programs aired in a network, it is not unexpected to find one
that would last for many years, and one that is concluded in a short span of months. Indeed, it is
economical for the broadcasting networks to keep in shows which earn, and to end those which do
not. More so, it is almost impossible to foretell in advance the success and the period of each
program.

The IJM System of ABS-CBN is a work pool of regular employees. The Court finds that a work pool
indeed existed, but its members, consistent with the rulings in Begino and Nazareno, were regular
employees, and not independent contractors.
The workers in the regularization cases are entitled to all the benefits under the CBA. In Fulache v.
ABS-CBN Broadcasting Corp. and Nazareno, the Court categorically proclaimed that the workers, who
were production assistants, cameramen, assistant editor/teleprompter operators, video editors, and
VTR operators, being regular employees of ABS-CBN, are part of the bargaining unit of ABS-CBN's
rank-and-file workers. As such, they are entitled to the CBA benefits as a matter of law and contract.

The workers in the illegal dismissal cases are entitled to reinstatement and back wages and other
benefits. The essential outcome of a proclamation that the workers are regular employees is the
correlative rule that the employer shall not dismiss them except for a just or authorized cause
provided in the Labor Code. This is the essence of the security of tenure guaranteed by the law. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges, and to his full back wages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
Ronald Martinez v Magnolia Poultry June 16, 2021
Facts:
Martinez filed a complaint of illegal dismissal against Romac and SMFI. They were hired by Romac as
daily paid rank and file employees assigned at the production department of SMFI. Romac though did
not have a business distinct and separate from that of SMFI-MPPP. They performed tasks necessary
and desirable to the poultry business of SMFI-MPPP.The sanitation aspect though only accounted for
30% of their tasks as they were mainly utilized at the production line of SMFI-MPPP. In the
performance of these tasks, they were closely monitored by regular supervisory employeeso f SMFI-
MPPP and to ensure the quality of its products, SMFI periodically trained them through seminars
offered by the government. They regularly reported for work until January 4, 2010, when most of
them were no longer allowed inside the premises of SMFI-MPPP because it had ceased operations
preparatory to its intended outsourcing of services. Thus, they got forced to file the case for illegal
dismissal with monetary claims against SMFI-MPPP and Romac.
SMFI-MPPP countered that it is engaged in the business of poultry, meat, animal feeds, and veterinary
medicines. On December 1,1994, it entered into a contract of services with Romac for the
performance of peripheral and ancillary tasks pertaining to its poultry business, i.e., sanitation,
maintenance, janitorial, housekeeping, and reliever services in times of demand upsurge. Romac,
thus, deployed its own employees to perform these contracted services at the company's processing
plant in SanFernando, Pampanga. Romac - acknowledged that it had a contractual (fixed period)
employer-employee relationship with Martinez, et al. As it was registered with SEC as a skilled and
semi-skilled manpower service.
Issues: (1) Is Romac a legitimate labor contractor or a labor-only contractor?
(2) Is Martinez an employee of Romac?
Ruling:
Romac should be a labor contractor and Martinez is one of those who work for Romac. As a general
rule, a contractor is presumed to be a labor-only contractor, unless such contractor overcomes the
burden of proving that it has substantial capital, investment, tools, and the like. As a regulated
industry, the law requires registration of labor contractors with the DOLE. Failure to register shall give
rise to the presumption that the contractor is engaged in labor-only contracting.
For this purpose, labor-only contracting shall refer to an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a job, work or service for a
principal, and any of the following elements are present: i) The contractor or subcontractor does not
have substantial capital or investment which relates to the job, work or service to be performed and
the employees recruited, supplied or placed by such contractor or subcontractor are performing
activities which are directly related to the main business of the principal; or ii) the contractor does not
exercise the right to control over the performance of the work of the contractual employee. The
foregoing provisions shall be without prejudice to the application of Article 248 (c) of the Labor Code,
as amended. "Substantial capital or investment" refers to capital stocks and subscribed
capitalization in the case of corporations, tools, equipment, implements, machinery and
work premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out.
The "right to control" shall refer to the right reserved to the person for whom the services of the
contractual workers are performed, to determine not only the result to be achieved, but also to
determine the manner and means to be used in reaching such result. Here, in 2001 alone, Romac
already had on record a capital stock of P20,000,000.00 and ownership of an office
building, a commercial lot, various office equipment, furniture and fixtures, communication
equipment, various service vehicles, and janitorial tools and equipment. Thus, Romac had sufficient
capital to carry on its independent on-going business as a legitimate contractor.
As for the element of control, the fourfold test shall be used: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control. First.
On different dates, Romac engaged Martinez, et al. as evidenced by the latter's respective Personnel
Appointments/Employment Contracts printed on Romac's own letterhead.

Second. In both contracts for Sanitation, Maintenance, Janitorial, and Housekeeping Services and for
Substitute or Reliever Services which Romac entered into with SMFI-MPPP, Romac pays the salaries
and other statutory benefits of Martinez, et al. True to its undertaking, Romac paid the monthly
salary and labor standard benefits to Martinez,et al. and effected the statutory deductions on their
salaries, as shown by the employees' pay slips bearing the logo of Romac. Third. The power of Romac
to hire included its inherent power to discipline Martinez, et al. Fourth. Among the four-fold test,
control is the most essential. Under the control test, an employer-employee relationship exists if
the "employer" has control over the “employee" not only as to the result of the work done but also as
to the means and methods by which the same is to be effected. Otherwise, no such relationship
exists. Records show that it was Romac which exercised control over Martinez, et al. These employees
applied with and were hired by Romac, as showed by their individual employment contracts printed
on the letterhead of Romac. It was Romac which paid the wages and other labor standard as revealed
by their payrolls and disbursement vouchers. Moreover, it was Romac which reported them as its
employees to the Social Security System (SSS), Employees Compensation Commission (ECC), and
Philippine Health Insurance Corporation (Phil Health), among others. It was also Romac which made
the necessary deductions on their salaries and the proper remittance thereof to these agencies.
Further, Romac exercised the power to dismiss and discipline as already shown. It was Romac through
its supervisory personnel which gave the employees their work schedule, monitored their
attendance, determined the end result of their assigned tasks, as well as the methods and means by
which such end result was to be accomplished.
Ramos v. Court of Appeals April 11, 2002
Facts:

Petitioner Erlinda Ramos is in a comatose condition after she delivered herself to Ramos et al., for
their professional care and management.

Erlinda Ramos, after seeking professional medical help, was advised to undergo an operation for the
removal of a stone in her gall bladder (cholecystectomy).

She was referred to Dr. Hosaka

The operation was scheduled for June 17, 1985 at 9:00

By 7:30 in the morning of the following day, petitioner Erlinda was already being prepared for
operation.

At around 9:30 in the morning, Dr. Hosaka had not yet arrived so Dr. Gutierrez tried to get in touch
with him by phone

By 10:00 in the morning, when Dr. Hosaka was still not around, petitioner Rogelio already wanted to
pull out his wife from the operating room.

Dr. Hosaka finally arrived at the hospital at... around 12:10 in the afternoon, or more than three (3)
hours after the scheduled operation.

Cruz heard Dr. Gutierrez utter: "ang hirap ma-intubate nito, mali yata ang pagkakapasok. O... lumalaki
ang tiyan." Cruz noticed a bluish discoloration of Erlinda's nailbeds on her left hand.

Cruz quickly rushed back to the operating room and saw that the patient was still in Trendelenburg
position. At almost 3:00 in the afternoon, she saw Erlinda being wheeled to the Intensive Care Unit
(ICU).

Erlinda stayed in the ICU for a month. She was released from the hospital only four months later or on
November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose condition until she
died on August 3, 1999

Petitioners filed with the Regional Trial Court of Quezon City a civil case for damages against private
respondents. After due trial, the court a quo rendered judgment in favor of petitioners.
Essentially, the trial court found that private respondents were negligent in the performance of their
duties. On appeal by private respondents, the Court of Appeals reversed the trial court's decision and
directed petitioners to pay their "unpaid medical bills" to private respondents.

. She maintains that the Court erred in finding her negligent and in holding that it was the faulty
intubation which was the proximate cause of Erlinda's comatose condition.

In effect, Dr. Gutierrez insists that, contrary to the finding of this Court, the intubation she performed
on Erlinda was successful.

Dr. Hosaka mainly contends that the Court erred in finding him negligent as a surgeon by applying the
Captain-of-the-Ship doctrine. Dr. Hosaka argues that the trend in United States jurisprudence has
been to reject said doctrine in light of the developments in medical practice. He points out that
anesthesiology and surgery are two distinct and specialized fields in medicine and as a surgeon, he is
not deemed to have control over the acts of Dr. Gutierrez.

Issues:

WHETHER OR NOT DR. ORLINO HOSAKA (SURGEON) IS LIABLE FOR NEGLIGENCE;

WHETHER OR NOT DR. PERFECTA GUTIERREZ (ANESTHESIOLOGIST) IS LIABLE FOR NEGLIGENCE; AND

WHETHER OR NOT THE HOSPITAL (DELOS SANTOS MEDICAL CENTER) IS LIABLE FOR ANY ACT OF
NEGLIGENCE COMMITTED BY THEIR VISITING CONSULTANT SURGEON AND ANESTHESIOLOGIST

Ruling:

Nonetheless, Dr. Gutierrez omitted to perform a thorough preoperative evaluation on Erlinda. As she
herself admitted, she saw Erlinda for the first time on the day of the operation itself, one hour before
the scheduled operation. She auscultated the patient's heart and lungs and checked the latter's blood
pressure to determine if Erlinda was indeed fit for operation. However, she did not proceed to
examine the patient's airway.

The bluish and enlargement of the stomach of Erlinda indicate that the endotracheal tube was
improperly inserted into the esophagus instead of the trachea.

The injury incurred by petitioner Erlinda does not normally happen absent any negligence in the
administration of anesthesia and in the use of an endotracheal tube.

Upon these facts, a layman would be able to say, as a matter of common knowledge and observation,
that the consequences of professional treatment were not as such if due care had been exercised
considering the application of the doctrine of res ipsa loquitur, the testimony of Cruz was properly
given weight in the case at bar.
That there is a trend in American jurisprudence to do away with the Captain-of-the-Ship doctrine does
not mean that this Court will ipso facto follow said trend.

From the facts on record it can be logically inferred that Dr. Hosaka exercised a certain degree of, at
the very least, supervision over the procedure then being performed on Erlinda.

While the professional services of Dr. Hosaka and Dr. Gutierrez were secured primarily for their
performance of acts within their respective fields of expertise for the treatment of petitioner Erlinda,
and that one does not exercise control over the other, they were not completely independent of each
other so as to clear one from the negligent acts of the other physician.

The responsibilities of Dr. Hosaka and those of Dr. Gutierrez in the treatment of petitioner Erlinda are
therefore not clear as respondents claim them to be. On the contrary, it is quite apparent that they
have a shared responsibility to treat the patient, which responsibility requires that they call each
other's attention to the condition of the patient while the other physician is in performance of the
necessary medical procedures.

Dr. Hosaka's reckless conduct of arriving very late for the scheduled operation of petitioner Erlinda is
violates, not only of his duty as a physician "to serve the interest of his patients with the greatest
solicitude, giving them always his best talent and... skill,"but also of Article 19 of the Civil Code which
requires a person, in the performance of his duties, to act with justice and give everyone his due.
Thus, it was held that respondent hospital is solidarity liable with respondent doctors therefor under
Article 2180 of the Civil Code,since there exists an employer-employee relationship between private
respondent DLSMC and Drs. Gutierrez and Hosaka.
Professional Services Inc. v. Agana January 31, 2007
Facts:
Natividad Agana was rushed to the Medical City General Hospital because of difficulty of bowel
movement and bloody anal discharge. After a series of medical examinations, Dr. Miguel Ampil
diagnosed her to be suffering from Cancer of the sigmoid.
Dr. Ampil assisted by the medical staff of the Medical City Hospital performed an Anterior resection
surgery on Natividad. He found that the malignancy on her sigmoid area had spread on her left ovary,
necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained the consent of Natividad’s
husband, Enrique Agana, to permit Dr. Juan Fuentes to perform hysterectomy on her.
After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the operation and
closed the incision after searching for the missing 2 gauzes as indicated by the assisting nurses but
failed to locate it. After a couple of days, Natividad complained of excruciating pains in her anal region
but Dr. Ampil said it is a natural consequence of the operation/surgery and recommended that she
consult an oncologist to examine the cancerous nodes which were not removed during the operation.
Natividad and her husband went to the US to seek further treatment and she was declared free from
cancer.
However, what was found was a piece of gauze portruding from Natividad’s vagina daughter which
was removed by hand by Dr. Ampil and guaranteed that the discomforts will vanished. However, it
didn’t. The pains increased prompting Natividad to pursue treatment at the Polymedic General
Hospital. While confined there, Dr. Ramon Guttierez detected the presence of another foreign object
in her vagina – a foul smelling gauze measuring 1.5 inches in width which badly infected her vagina. A
recto-vaginal fistula had forced stool to excrete through her vagina. Another surgical operation was
needed to remedy the damage.

Issue: Whether or not Dr. Ampil and Fuentes are liable for medical malpractice and the PSI for
damages due to the negligence of the said doctors.

Held:
Yes.
This is a clear case of medical malpractice or more appropriately, medical negligence. A patient must
only prove that a health care provider either failed to do something which a reasonably prudent
health care provider would have done, or that he did something that a reasonably prudent provider
would not have done; and that failure or action caused injury to the patient. Basically puts the
elements are duty, breach, injury, and proximate causation. Dr. Ampil, as the lead surgeon, had the
duty to remove all foreign objects, such as gauzes, from Natividad’s body before closure of the
incision. When he failed to do so, it was his responsibility to notify Natividad about it. Dr. Ampil
breached both duties. As such caused injury to Natividad, requiring her further examination by
American doctors and additional surgery. That Dr. Ampil’s negligence is the proximate cause of
Natividad’s injury could be drawn from his act of closing the incision despite the information given by
the attending nurses that 2 pieces of gauze were still misplaced. That they were later on extracted
from Natividad’s vagina established the causal link between Dr. Ampil’s negligence and the injury.
Under the “Captain of the ship” rule, the operating surgeon is the person in complete charge of the
surgery room and all personnel connected with the operation.
The knowledge of any of the staff of Medical City constitutes knowledge of PSI.
The doctrine of corporate responsibility, has the duty to see that it meets the standards of
responsibilities for the care of patients. Such duty includes the proper supervision of the members of
its medical staff. The hospital accordingly has the duty to make a reasonable effort to monitor and
oversee the treatment prescribed and administered by the physician practicing in its premises.
.

Salabe v SSS Aug 27, 2020

LEONARDA JAMAGO SALABE, PETITIONER, V. SOCIAL SECURITY COMMISSION ANDMARINO TALICTIC,

IN HIS CAPACITY AS OFFICER-IN-CHARGE AND BRANCH HEAD, SSS-TAGBILARAN CITY BRANCH,
RESPONDENTS.G.R. No. 223018,August 27, 2020
Facts:
Leonarda worked as a helper in the carinderia of Ana. By virtue of this employment, Ana registered
her for social security purposes. Thus, she became a member of the SSS.
After her employment with Ana, she continued her membership with SSS as a voluntary paying
member and diligently paid her monthly premiums for a total of one hundred thirty-seven (137)
contributions.
In 1993, when she reached the age of sixty (60), she filed an application for retirement benefits with
the SSS which got approved. However, sometime in 2001, SSS suddenly and unilaterally terminated
her monthly pension on the ground that Leonarda’s voluntary membership after separation from
employment with canceled employer was invalid.
Issue:Is Leonarda entitled to retirement benefits from the SSS?
Ruling:
Yes. Ana’s act of registration for Leonarda under the SSS was an admission or acknowledgment of the
employer-employee relationship between them .Even if the Supreme Court rules that Leonarda was
never an employee of Ana, such would not entail the invalidity of all her contributions. For Leonarda
may be placed under the category self-employed pursuant to the liberality rule. Even if both parties
have presented substantial evidence to support their allegations, the equipoise rule dictates that the
scales of justice must be tilted in favor of labor. In fact, she may even be considered as a voluntary
paying member. ACCORDINGLY, the petition is GRANTED. The Decision dated December 1, 2014 and
Resolution dated January 28, 2016 of the Court of Appeals in CA-G.R. S.P. No. 07954 are REVERSED
and SET ASIDE.
Respondent Social Security System is hereby ordered to:1.REINSTATE petitioner Leonarda Jamago
Salabe's membership with the system; VALIDATE petitioner's 137 paid contributions; RESTORE
petitioner's right to retirement benefits; and PAY petitioner her accrued retirement benefits from
August 2001. This amount shall earn twelve percent (12%) interest computed from the time her
pension was withheld in August 2001 until June 30, 2013 and six percent (6%) from July 1, 2013 until
fully paid.
LVN Pictures Inc. v. Phil. Musicians Guild and CIR Jan. 28, 1961 and Sampaguita Pictures Inc. v. Phil.
Musicians Guild and CIR Jan. 28, 1961.
Facts:

Philippine Musicians Guild is a duly registered legitimate labor organization. LVN Pictures,
Inc., Sampaguita Pictures, Inc., and Premiere Productions, Inc. are corporations, duly organized under
the Philippine laws, involved in the making of motion pictures and in the processing and distribution
therefrom; the companies employ musicians for the purpose of making music recordings for title
music, background music, musical numbers, finale music and other incidental music. Ninety-five (95%)
percent of all the musicians playing for the musical recordings of said companies are members of the
Philippine Musicians Guild.

The Guild plead that it be registered as the exclusive bargaining agency for all musicians
employed in the aforesaid companies. In their individual answers, the latter denied that they have any
musicians as employees, and declared that the musical numbers in the entry of the companies are
equipped by independent contractors.

The lower court sustained the theory of the Guild. A reconsideration of the order
complained, of having been denied by the Court en banc, LVN Pictures, inc., and Sampaguita Pictures,
Inc., filed these petitions for review for certiorari.

Issue:

Whether or not the musicians are employees of the companies?

Ruling:

Yes. To determine whether a person who performs work for another is the latter’s employee
or an independent contractor, the National Labor Relations relies on the control test. Under this test
an employer-employee relationship exist where the person for whom the services are performed has
the right to control not only the result to be achieved but also the means to be used in reaching such
result.
In this case, the work of the musical director and musicians is a functional and integral part of
the enterprise performed at the same studio under the direction and control of the company.
Furthermore, the film companies call the musicians to work, through the musical directors.
The film companies, through the musical directors, fix the date, the time and the place of work. The
film companies, not the musical directors, provide the transportation to and from the studio. The film
companies furnish meal at dinner time.

The motion picture director not the musical director exclusively directs the performance of
the musicians before the camera. The motion picture director supervises the performance of all the
actors, including the musicians who appear in the scenes,the movie director tells the musical director
what to do, whether the music needs to be cut or there is a need of an additional music in this part or
that he eliminates the entire music he does not approve. The movie director directly controls the
activities of the musicians.
Since the element of control is present upon the activity of the musicians whenever they are
called for work, thus they are employees of LVN.
Insular Life Assurance v NLRC Nov. 15, 1989
Facts:
On July 2, 1968, Insular Life Assurance Co. Ltd and Melecio T. Basiao entered into a contract
by which Basiao was authorized to solicit within the Philippines applications for insurance policies and
annuities in accordance with the existing rules and regulations of the company;
He would receive compensation, in the form of commissions.
Some four years later, in April 1972, the parties entered into another contract – An agency
manager’s contract – and to implement his end of it Basiao organized an agency or office to which he
gave the name M Basiao and Associates, while concurrently fulfilling this commitments under the first
contract with the company.
In May 1979, the company terminated the Agency Manager’s contract. After seeking a
reconsideration, Basiao sued the company in a civil action and this prompted the latter to terminate
also his engagement under the first contract and to stop payment of his commission starting April 1,
1980.

Issue: Whether or not the Labor Arbiter have jurisdiction by virtue of the contract between the
company and Basiao.

Held: No. In determining the existence of employer-employee relationship, the following elements
are generally considered namely:
The selection and engagement of the employee;
The payment of wages;
The power of dismissal; and
The power to control the employee’s conduct which is the most important element.

The court, therefore, held that under the contract invoked by him, Basiao was not an employee of the
petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions
should have been litigated in an ordinary civil action. The labor arbiter erred in taking cognizance of
and adjudicating said claim, being without jurisdiction to do so, as did the respondent NLRC in
affirming the arbiter’s decision. This conclusion renders it unnecessary and premature to consider
Basiao’s claim for commission on its merits.
Felicilda v. Manchesteve Uy Sept. 14, 2016
Facts:
Petitioner Mario Felicilda hired as a truck driver on October 29, 2010 of the Gold Pillars
Trucking (GPT) service owned and managed by the respondent Machesteve Uy.
On December 9, 2011, petitioner took a nap at the work station while waiting for his truck to be
loaded with cargoes, all of which were delivered to respondents’ clients on schedule.
On the next day or on December 10, 2012 respondents’ helper told petitioner that his employment
was already terminated due to his act of sleeping while on the job. Thereafter, the petitioner filed a
complaint to the Legal Arbiters (LA) for illegal dismissal with money claims against respondent before
the NLRC claiming that he was dismissed without just cause and due process and that his act of taking
nap did not prejudice respondent business.
The NLRC affirmed the petition and the CA affirmed the dismissal.

Issue:
Whether or not the respondent validly terminated petitioners’ employment

Ruling:

For a dismissal to be valid, the rule is that the employer must comply with both the
substantive and procedural due process requirements. Substantive due process requires that the
dismissal must be pursuant to either a just or an authorized cause under Articles 297,298, and 299 of
the Labor Code, as amended. Procedural due process, on the other hand, mandates that the
employer must observe the twin requirements of notice and hearing before a dismissal can be
effected.
In this case, aside from the respondents declaration that petitioner committed serious
misconduct resulting in the former's loss of trust and confidence, no other evidence was shown to
substantiate the claim. Neither was petitioner accorded due process as he was merely informed by
respondent’s helper that he was already terminated from his job. Clearly, respondent illegally
dismissed petitioner, and as such,Felicilda is entitled to back wages and separation pay in lieu of
reinstatement, as correctly ruled by the labor tribunals.
The petition is GRANTED.
 Tongko v Manufacturers Life
Decision Nov. 7, 2008

FACTS:
This case involves respondent Manulife who is engaged in life insurance business. Petitioner
Gregorio V. Tongko started his professional relationship with Manulife on July 1, 1977.
The agreement stated that Tongko is an Agent and an independent contractor and nothing
shall be construed as creating an employer-employee relationship between the Company and the
Agent.
In 1983, Tongko was named as Unit Manager in Manulife’s Sales Agency Organization and
eventually he became a Branch Manager. A problem started in 2001, when Manulife instituted
manpower development programs in the regional sales management level. De Dios, the President and
CEO, addressed a letter to Tongko regarding their Metro North Sales Managers Meeting. In their
meeting they stated the poor performance of Tongko’s Region in terms of recruiting and his ability to
lead the group. That the management was disappointed with Tongko and how he has not been
proactive all these years when it comes to agency growth.
In order to address the problem the company directed Tongko to: (1) to hire at his expense a
competent assistant who can unload him of the routine tasks which can be easily delegated (2)
Effective immediately, Kevin and the rest of the Agency Operation will deal with the North Star Branch
(NSB) in autonomous fashion.
Subsequently De Dios wrote a termination letter to Tongko on December 2001 due to the
fact that he failed to help align his directions with the Management’s desire for agency growth.The
Management exercised its prerogative under Section 14 of the Agents Contract to terminate the
agent by giving him a written notice within 15 says from the time of the discovery of the breach in the
contract.
Tongko filed a complaint with the NLRC against Manulife for illegal dismissal .
Labor Arbiter dismissed the complaint for lack of employer-employee relationship.
Upon appeal, the NLRC found that there was an existing employer-employee relationship
between Manulife and Tongko applying the 4-fold test and held Manulife liable for illegal dismissal.
On a motion for reconsideration, CA found that there was no employer-employee relationship
between the parties and deemed that the NLRC has no jurisdiction over the case.

ISSUE:
(1) Whether or not there is an employer-employee relationship between Manulife and
Tongko
(2) If yes, whether Manulife is guilty of illegal dismissal

HELD:
(1) YES, the court applied the 4-fold test to determine the existence of Er-Ee relationship.
The elements of an employer-employee relationship: (1) the selection and engagement of the
employee (2) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to
control the employee’s conduct.
The “control test” is that which constitutes the most important fact of the existence of the employer-
employee relationship, whether the employer controls or has reserved the right to control the
employee not only as to the result of the work to be done but also as to the means and methods by
which the same is to be accomplished.
In concluding otherwise, the CA and NLRC reached a confusion on the sole issue of control over an
employee’s conduct. It bears clarifying that such control not only applies to the work or goal to be
done but also to the means and methods to accomplish it. Not every form of control affects an
employer-employee relationship. The line should be drawn between the rules that merely serves as
guidelines or those that control towards the achievement of a goal. In this case, if the particular rules
and regulations that are implemented 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 this case, Manulife has the power of control over Tongko that would make him its
employee. The factors that contribute to this conclusion are the following:
(1) The agreement dated July 1, 1977 executed between Tongko and Manulife the provisions
of which state that an agent of Manlike must comply with 3 requirements (1) compliance with the
regulations and requirement of the company (2) maintenance of a level of knowledge of the company
products that is satisfactory to the company (3) compliance with a quota of new businesses.
Thus, with the company’s regulations and requirements , the fact that Tongko was an employee of
Manulife has already been established. These requirements control the means and methods by which
Tongko was to achieve the company’s goals.
Manulife’s evidence established that Tongko was tasked to perform administrative duties
that establishes his employment with Manulife. Tongko was tasked with recruiting a certain number
of agents in addition to his other administrative functions, that leads to a conclusion that he was an
employee of Manulife. More importantly, it is Tongko’s alleged failure to follow this principle of
recruitment that led to the termination of his employment.
 Angelina Francisco v. NLRC and Kasei Aug 31, 2006

FACTS: In 1995, petitioner Angelina Francisco was hired by Kasei Corporation (Kasei) during
its incorporation stage. She was designated as Accountant, Corporate Secretary and Liaison Officer of
the company. In 1996, Francisco was designated Acting Manager to handle recruitment of all
employees and perform management administration functions, represent the company in all dealings
with government agencies, and to administer all other matters pertaining to the operation of Kasei
Restaurant which is owned and operated by Kasei.

For five years, petitioner performed the duties of Acting Manager. In January 2001, Francisco
was replaced as Manager. She alleged that she was required to sign a prepared resolution for her
replacement but she was assured that she would still be connected with Kasei. The Treasurer
convened a meeting of all employees and announced that Francisco was still connected with Kasei
Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters.

Thereafter, Kasei reduced her salary by P2,500.00 a month beginning January up to

September 2001. She was not paid her mid-year bonus because the company was not earning well. In
October 2001, she did not receive her salary from the company, made repeated follow-ups with the
cashier but was advised that the company was not earning well. On October 15, 2001, she asked for
her salary, but she was informed that she is no longer connected with the company.

Since she was no longer paid her salary, petitioner did not report for work and filed an action
for constructive dismissal before the labor arbiter.

Kasei Corporation claimed that Francisco was not their employee, having been designated as
technical consultant who performed work at her own discretion without the control and supervision
of the Corporation, and that her consultancy may be terminated any time considering that her
services were only temporary in nature and dependent on the needs of the corporation.

To prove that petitioner was not an employee of the corporation, private respondents
submitted a list of employees for the years 1999 and 2000 duly received by the BIR showing that
petitioner was not among the employees reported to the BIR. SSS records were also submitted
showing that petitioner’s latest employer was Seiji Corporation.

ISSUES: Whether or not there was an employer-employee relationship between Francisco

and Kasei Corporation; and whether Francisco was illegally dismissed.

HELD: Generally, courts have relied on the so-called right of control test where the person
for whom the services are performed reserves a right to control not only the end to be achieved but
also the means to be used in reaching such end. However, in certain cases the control test is not
sufficient to give a complete picture of the relationship between the parties, owing to the complexity
of such a relationship where several positions have been held by the worker.

The better approach would therefore be to adopt a two-tiered test involving: (1) the putative
employer’s power to control the employee with respect to the means and methods by which the
work is to be accomplished; and (2) the underlying economic realities of the activity or relationship.

Thus, the determination of the relationship between employer and employee depends upon
the circumstances of the whole economic activity, such as: (1) the extent to which the services
performed are an integral part of the employer’s business; (2) the extent of the worker’s investment
in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the
worker’s opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight
required for the success of the claimed independent enterprise; (6) the permanency and duration of
the relationship between the worker and the employer; and (7) the degree of dependency of the
worker upon the employer for his continued employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura, the
corporation’s Technical Consultant. She reported for work regularly and served in various capacities
as Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary.

Under the broader economic reality test, the petitioner can likewise be said to be an
employee of respondent corporation because she had served the company for six years before her
dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses
and allowances, as well as deductions and Social Security contributions from August 1, 1999 to
December 18, 2000. When petitioner was designated General Manager, respondent corporation
made a report to the SSS signed by Irene Ballesteros. Petitioner’s membership in the SSS as
manifested by a copy of the SSS specimen signature card which was signed by the President of Kasei
Corporation and the inclusion of her name in the on-line inquiry system of the SSS evidences the
existence of an employer-employee relationship between petitioner and respondent corporation.

It is therefore evident that petitioner is economically dependent on respondent corporation

for her continued employment in the latter’s line of business. The corporation constructively
dismissed petitioner when it reduced her salary by P2,500 a month from January to September 2001.
This amounts to an illegal termination of employment, where the petitioner is entitled to full back
wages. Since the position of petitioner as accountant is one of trust and confidence, and under the
principle of strained relations, petitioner is further entitled to separation pay, in lieu of
reinstatement.

A diminution of pay is prejudicial to the employee and amounts to constructive dismissal.

Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when
continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in
rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to an employee.
Manuel Guerrero v. C.A. May 30, 1986
Facts:

In 1969, plaintiff Apolinario Benitez was taken by defendants-spouses Manuel and Maria Guerrero to
take care of their 60 heads of cows which were grazing within their 21-hectare coconut plantation

Plaintiff was allowed for that purpose to put up a hut within the plantation where he and his family
stayed. He was made to clean the already fruit bearing coconut trees, burn dried leaves and grass and
to do such other similar chores, he was also made to pick coconuts and gather the fallen.

For his work related to the coconuts, he shared 1/3 of the proceeds from the copra he processed and
sold in the market. For attending to the cows he was paid P500 a year.

1973, plaintiff was refrained from gathering nuts from the 10-hectare portion of the 16-hectare part
of tile plantation from where he used to gather nuts.
Defendants Guerreros also caused to demolished a part of the cottage where plaintiff and his family
lived. Petitioner asserts in this petition that Benitez was a mere farmhand or laborer who was
dismissed as an employee from the landholding in question,further indicating the existence of a
tenancy relationship between petitioners and respondent which is evidenced in their agreement to
share the produce or harvest.

Issues:

Whether or not a tenancy relationship exists between the parties Manuel Guerrero, et al. and
Apolinario Benitez

Ruling:
Respondent Benitez has physically possessed the landholding continuously from 1969 until he was
ejected.

Cultivation is another important factor in determining the existence of tenancy relationships.

The mere fact that it was not respondent Benitez who had actually seeded the land does not mean
that he is not a tenant of the land.

It includes the promotion of growth and the care of the plants, or husbanding the ground to forward
the products of the earth by general industry

Further indicating the existence of a tenancy relationship between petitioners and respondent is their
agreement to share the produce or harvest. Once a tenancy relationship is established, the tenant has
the right to continue working until such relationship is extinguished according to law.

Petition is DISMISSED for lack of merit.

De Los Reyes v. Espinelli (Nov. 28, 1968)
November 28, 1969

FACTS:

Geronimo de los Reyes owned a 200-hectare coconut plantation. His overseer (“katiwala”) Gonzalo
Belarmino, before his dismissal, took into the land the 17 respondents under an agreement that the
latter were to receive 1/7 portion of every coconut harvest. The respondents filed petitions seeking
the delivery to them of the difference between the 1/7 share which the petitioner had been giving
them and the 30% share to which they, as share tenants, were allegedly entitled. The respondents
alleged that they were tenants, while, the petitioner said they were agricultural laborers.

ISSUE:

Whether or not the subject workers are agricultural laborers and therefore employees of the owner
of the land they work on.

HELD:

On a determination of this question depends the respective rights of the parties, more particularly the
proper assessment of the share of the respondents under the law.

The record is absent of evidentiary support for the idea that the respondents are farm laborers. They
do not observe set hours of work. The petitioner has not laid down regulations under which they are
supposed to do their work. The argument tendered is that they are guards. However, it does not
appear that they are under obligation to report for duty to the petitioner or his agent. They do not
work in shifts. Nor has the petitioner prescribed the manner by which the respondents were and are
to perform their duties as guards. We do not find here that degree of control and supervision evincing
of an employer-employee relationship.
Degamo v My Citihomes Sept. 15, 2021

Respondent Citihomes is a domestic corporation engaged in the development and construction of real
properties, with RosieWang and John Wang as its owners.
On December 28, 2017, petitioner Edita Santos Degamo (Degamo) filed a Complaint for non-payment
of commission fees against Citihomes.
Degamo alleged that she was hired by Citihomes on March 1, 2015 as an agent to work in Citi Pro, a
group of real estate agents sanctioned byCitihomes. Eventually, she was promoted as sales manager
with the following tasks: (1) solicit potential clients to buy or sell real properties; (2)advise clients on
prices, conditions, and other related information on real properties; (3) supervise property
consultants; (4) man the booths ofCitihomes or Citi Pro; and (5) report to the office of Citihomes.
Due to low sales, Degamo filed a resignation letter effective April 30,2017 but it was not accepted by
her direct superior, Ms. Evelyn Abapo (Ms. Abapo).
Citihomes also refused to pay her commission fees for the 18 real properties she successfully sold.
Thus, Degamo prayed that Citihomes be ordered to pay her commission fees plus moral and
exemplary damages.
On the other hand, Citihomes averred that: (1) that Degamo was not its employee being a mere sales
agent of Ms. Abapo, a licensed broker,who possessed the power to hire and terminate Degamo;
(2) that it did not pay the wages of Degamo as the fees of sales agents come from the
commissions it pays to Ms. Abapo who will then make an allocation among her sales agents;
(3) that it did not exercise control over the means and methods by which Degamo performed
her job as she devised her own techniques and methods in soliciting buyers of real properties; and (4)
that there being no employer-employee relationship between the parties,Citihomes contended that
the Labor Arbiter has no jurisdiction over Degamo’s complaint.
InDegamo’s Reply, she stated: (1) that she was an employee ofCitihomes, who hired her through Ms.
Abapo, who regularly paid her commission fees, and closely monitored her work three times a week
from 9:00 a.m. to6:00 p.m. in accordance with its rules and regulations; (2) that Citihomes required
her to maintain a monthly quota of P5,000,000.00; and (3) that she
performed services which were usually necessary and desirable to the main business of Citihomes.
ISSUE:Whether there was employer-employee relationship between Citihomes and Degamo
.RULING:
No. There is none.
The Supreme Court held that To ascertain the existence of an employer-employee relationship,
jurisprudence has invariably adhered to the four-fold test, 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.
The power of the employer to control the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship. This is premised on whether the
person for whom the servicesare performed reserves the right to control both the end achieved and
the manner and means used to achieve that end.
Moreover, the Supreme Court held that the burden of proof rest upon the party making the allegation
whether an employee-employer exists. In this case, he did not submit any relevant proof that
Citihomes engaged her services as a sales agent, paid her salary, and had the power to dismiss her
services. Notably, the only evidence which petitioner adduced pertained to her alleged unpaid
commission fees. Petitioner even made allegations which are inconsistent with the four-fold test of
employment.
Furthermore, the Supreme Court held that Citihomes exercised no control over the means and
method of Degamo’s work. Here, Degamo failed to present any proof of the regulations which
Citihomes allegedly implemented and imposed in the solicitation of sales and dealing with prospective
clients.
Indubitably, the circumstances strengthen thefact that petitioner is an independent contractor and
not an employee ofCitihomes
Aquinas v. Inton – Jan. 26, 2011

FACTS:

Respondent Sister Margarita Yamyamin began teaching religion at Aquinas School on June 1998. She
taught Jose Luis’ grade 3 religion class.

While Yamyamin was writing on the blackboard, Jose Luis left his assigned seat and went over to a
classmate to play a prank on him.
Yamyamin noticed this and sent Jose Luis back to his seat. After some time, Jose Luis got up again and
went over to the same classmate.
Unable to tolerate the child’s behavior, Yamyamin approached Jose Luis and kicked him on the legs
several times.
She also pulled and shoved his head on the seat.
Finally, she told the child to stay where he was on that spot of the room and finish copying the notes
of the blackboard while seated on the floor.

As a result of the incident, the parents, Jose and Victoria Inton filed an action for damages on behalf
of their son Jose Luis against Yamyamin and Aquinas.

When the case was elevated to the CA, the CA, finding that an employer-employee relation existed
between Aquinas and Yamyamin, held them solidarily liable to Jose Luis.

ISSUE:

Whether or not Aquinas should be held solidarily liable with Yamyamin for the damages awarded to
Jose Luis.

RULING:

The Court applied the “four-fold test” in this case to determine the existence of an employer-
employee relationship: the employer (a) selects and engages the employee; (b) pay his wages; (c) has
power to dismiss him and (d) has control over his work. Of these, the most crucial element is
CONTROL. Control refers to the right of the employer, whether actually exercised or reserved, to
control the work of the employee as well as the means and methods by which he accomplishes the
same.

In this case, the school director testified that Aquinas had an agreement with a congregation of sisters
to send religion teachers to Aquinas to provide catechisms to its students in fulfillment of the
congregation’s ministry. Aquinas insists that it was not the school but Yamyamin’s religious
congregation that chose her for the task of catechizing the school’s grade three students.

Under the circumstances, it was quite evident that Aquinas did not have control over Yamyamin’s
teaching methods.
Consequently, it was error for the CA to hold Aquinas solidarily liable with Yamyamin.

Of course, Aquinas still had the responsibility of taking steps to ensure that only qualified outside
catechists are allowed to teach its young students. In this regard, it cannot be said that Aquinas took
no steps to avoid the occurrence of improper conduct towards the students by their religion teacher.

First, Yamyamins transcript of records, certificates, and diplomas showed that she was qualified to
teach religion.

Second, there is no question that Aquinas ascertained that Yamyamin came from a legitimate
religious congregation of sisters and that, given her Christian training, the school had reason to
assume that she would behave properly towards the students.

Third, the school gave Yamyamin a copy of the schools Administrative Faculty Staff Manual that set
the standards for handling students. It also required her to attend a teaching orientation before she
was allowed to teach beginning that June of 1998.

Fourth, the school pre-approved the content of the course she was to teach to ensure that she was
really catechizing the students.

And fifth, the school had a program for subjecting Yamyamin to classroom evaluation. Unfortunately,
since she was new and it was just the start of the school year, Aquinas did not have sufficient
opportunity to observe her methods. At any rate, it acted promptly to relieve her of her assignment
as soon as the school learned of the incident. It cannot be said that Aquinas was guilty of outright
neglect.
Salvation Army v. SSS Sept 15, 2021
FACTS:
The Salvation Army (petitioner) is an evangelical Christian church and social welfare
organization with a global presence. It employs military terminology in its
organization, operations, and ministries.
Petitioner is incorporated under Philippine laws as a non- stock, non-profit religious organization. On
March 22, 1962, petitioner registered with the SSS and was assigned Social Security
(SS) No. 03-2070300-3. It listed its officers as "employees" in its registration.
On December 19, 2005, the petitioner filed a request with the SSS for the conversion
of its officers' membership status from "employees" to "voluntary or self-employed."
In a Letter dated January 30, 2006, the SSS denied the request for lack of legal and
factual basis. After the petitioner's Motion for Reconsideration was similarly denied
by the SSS in a Letter dated March 13, 2006, the petitioner elevated the matter to
the Social Security Commission (SSC).
The SSC affirmed the denial of the petitioner's request for the conversion of its
officers' registered status in Resolution 9 dated November 6, 2013. After the SSC
denied its motion for reconsideration, the petitioner filed a petition for review before
the Court of Appeals under Rule 43 of the Rules of Court. On September 30, 2016,
the CA affirmed the SSC's decision.
ISSUE:
Whether or not, the CA committed a serious error of law in affirming the ruling of The
Social Security System (SSC), which declared that the Salvation Army Officers are
considered ordinary employees despite the over whelming evidence showing the
ecclesiastical nature of the relationship between the army and its officers.
RULING:
No, the Court finds that an employer-employee relationship exists between the petitioner
and its ministers. The CA's explanation on this matter states:
As shown by the evidence, petitioner selects its officers from among
its suitable candidates on account of their health, age, spiritual experience,
character, education, and ability. Prior to his appointment, a candidate needs to
undergo training in a The Salvation Army training college or school. After completion
the candidate will be awarded a Certificate of Salvation Army Officer Training signed
by the territorial commander with the rank of lieutenant.
It is important to see that social justice is a shared goal shared by the
Church and the State in their practice of spreading their respective beliefs and
enforcing the SSS law. By permitting the petitioner's employer status and registering
its regular employees, the Court affirms the petitioner's cooperation to
this objective. Taking these elements, the Court decides to grant
petitioner's officers and ministers employee status in order to uphold what the Constitution
guarantees.
Bishop Shinji Amare v Villaflor- Feb. 17, 2020

FACTS:

Ricardo R. Villaflor, Jr. (Villaflor) was informed by a Letter that he was removed as a missionary of the
Abiko Baptist Church, his American Baptist Association (ABA) recommendation as a national
missionary was cancelled, and he was excluded from membershipof the Church in Japan.

Villaflor filed a complaint claiming that he was illegally dismissed as a missionary/minister. The Labor
Arbiter (LA) found Villaflor’s dismissal illegal, stating that it had jurisdiction over the matter since
Villaflor was appointed as an instructor of the Missionary Baptist Institute and Seminary (MBIS).

The National Labor Relations Commission (NLRC) dismissed the complaint on the ground of lack of
jurisdiction. The Court of Appeals (CA) ruled that both the LA and NLRC had jurisdiction over the
matter.

ISSUE:

Was Villaflor illegally dismissed even though the dispute involves an ecclesiastical affair?

RULING:

No. While the State is prohibited from interfering in ecclesiastical affairs, the Church is likewise barred
from meddling in secular matters. In this case, Villaflor’s exclusion from membership in the Abiko
Baptist Church in Japan and the cancellation of his ABA recommendation as a national missionary are
ecclesiastical matters which the court will not interfere with since the church has the discretion to
choose members who adhere to their religious standards. The ABA recommendation as a national
missionary is likewise within the discretion of the church since it pertains to the governance of the
congregation.

However, the court must determine whether Villaflor’s removal as a missionary of Abiko Baptist
Church is an ecclesiastical affair. In order to do so, it is necessary to establish the existence of an
employer-employee relationship. Villaflor failed to prove this relationship based on the four-fold test:
the selection and engagement of the employee, payment of wages, power of dismissal, and power to
control the employee’s conduct.

First, he evidence presented only refers to Villaflor’s appointment as an instructor and not as a
missionary of Abiko Baptist Church. Second, there is no concrete evidence of Villaflor’s monthly
compensation. Third, dismissal is inherent in religious congregations and does not necessarily
establish an employer-employee relationship. Lastly, there is no evidence on the power of control.
Thus, Villaflor was not illegally dismissed since an employer-employee relationship was not
established.
Republic v. Asia Pro -- Nov. 23, 2007

Respondent Asiapro Cooperative has owner-members who do not acquire compensation or wages.
Instead, they receive a share in the service surplus which the Respondent earns from its trade. Some
of its owner-members were assigned in Stanfilco. To enjoy the benefits of the Social Security Law, the
said owner-members requested that they be registered with the Petitioner Social Security System
(SSS) as self-employed, and to remit contributions. However, the Petitioner SSS informed the
Respondent that it is a manpower contractor supplying employees to Stanfilco, and the employer of
the owner-members assigned in Stanfilco. Thus, the Respondent should register itself as an employer.
The Respondent replied that it is not an employer because the owner-members are the cooperative
itself.It cannot be its own employer.

The Petitioner SSS filed a petition before the Social Security Commission (SSC) against the Respondent
and Stanfilco in order to direct them to register as an employer and their owner-members be covered
as employees. The Respondent filed its Answer with Motion to Dismiss alleging that no employer-
employee relationship exists between it and its owner-members. Thus, the Petitioner SSC has no
jurisdiction over the case. The Petitioner SSC denied the motion.

On appeal, the CA granted the petition of the Respondent, dismissing the complaint filed by the
Petitioner SSS. Hence, the Present petition whereby the Petitioner SSC contends that it has
jurisdiction over the case because the law provides that it has the power to settle disputes on
compulsory coverage, benefits, contributions, and any other matter related thereto.

ISSUE:

1. Whether or not the Petitioner SSC has jurisdiction over the case filed by Petitioner SSS against the
Respondent.

2. Whether or not there exists an employer-employee relationship between the Respondent and its
owner-members.

HELD:

1. Yes. The Supreme Court ruled that the allegations in the complaint, and not the defenses set up in
the Answer or the Motion to Dismiss, determine which court has jurisdiction over an action. The Court
held that the Labor Code provides that the NLRC’s jurisdiction on money claims is not exclusive. The
question on the existence of an employer-employee relationship for the purpose of determining
coverage of the SSS is explicitly excluded from the jurisdiction of the NLRC, and falls within the
jurisdiction of the SSC, which is primarily charged to settle disputes arising under the Social Security
Law. In the present case, the Petitioner SSS alleges before the Petitioner SSC that the owner-members
of the Respondent are subject to the compulsory coverage of the SSS because they are employees of
the Respondent. Thus, being their employer, the Respondent must register as employer and report its
owner-members as covered employees of the SSS. Accordingly, the case clearly falls within its
jurisdiction. Further, the Petitioner SSC has the authority to inquire into the relationship existing
between the worker and the person or entity to whom he renders service to determine if the
employment is one excepted by the Social Security Law from compulsory coverage. Hence, the
Petitioner SSC can hear the case filed by Petitioner SSS against the Respondent.

2. Yes. The Supreme Court held that in determining the existence of an employer-employee
relationship, the following elements must be present: (a) the selection and engagement of workers;
(b) the payment of wages; (3) the power of dismissal; and (4) the power of control, whereby it
involves not only the result or work to be done, but also the means and methods to accomplish.
Further, the existence of an employer-employee relationship cannot be negated by expressly
repudiating it in a contract when the terms and surrounding circumstances show otherwise,
considering that employment status is defined by law, and not by the parties.

In the present case, the employer-employee relationship between the Respondent and its owner-
members is present: (a) the Respondent has exclusive discretion in the selection and engagement of
the owner-member; (b) the weekly stipends or shares in the service surplus given by the Respondent
to the owner-members were actually wages; (c) the Respondent has the power to investigate,
discipline, and remove its owner-members who were rendering services in Stanfilco; and (d) the
Respondent has the sole control over the manner and means of performing services under the Service
Contracts with Stanfilco, as well as the means and methods of work of its owner-members. Indeed,
there is an employer-employee relationship.

Further, the Service Contract which contains a repudiation of the employee-employer relationship
between the Respondent and its owner-members must be struck down for being contrary to law and
public policy since it merely serves to circumvent the compulsory coverage of its employees under the
Social Security Law.

RULING

The Petition is GRANTED. Decision and Resolution of the CA are REVERSED and SET ASIDE. Order of
the SSC is REINSTATED.
Jose Bernarte v PBA Sept. 14, 2011- PBA referees

FACTS:

Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as
referees. During the leadership of Commissioner Emilio Bernardino, they were made to sign contracts
on a year-to-year basis. During the term of Commissioner Eala, however, changes were made on the
terms of their employment. Complainant Bernarte, for instance, was not made to sign a contract
during the first conference of the All-Filipino Cup which was from February 23, 2003 to June 2003. It
was only during the second conference when he was made to sign a one and a half month contract
for the period July 1 to August 5, 2003.

On January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising him
that his contract would not be renewed citing his unsatisfactory performance on and off the court. It
was a total shock for Bernarte who was awarded Referee of the year in 2003. He felt that the
dismissal was caused by his refusal to fix a game upon order of Ernie De Leon.

On the other hand, complainant Guevarra alleges that he was invited to join the PBA pool of referees
in February 2001. On March 1, 2001, he signed a contract as trainee. Beginning 2002, he signed a
yearly contract as Regular Class C referee. On May 6, 2003, respondent Martinez issued a
memorandum to Guevarra expressing dissatisfaction over his questioning on the assignment of
referees officiating out-of-town games. Beginning February 2004, he was no longer made to sign a
contract.Respondents aver, on the other hand, that complainants entered into two contracts of
retainer with the PBA in the year 2003. The first contract was for the period January 1, 2003 to July
15, 2003; and the second was for September 1 to December 2003. After the lapse of the latter period,
PBA decided not to renew their contracts.

Complainants were not illegally dismissed because they were not employees of the PBA. Their
respective contracts of retainer were simply not renewed. PBA had the prerogative of whether or not
to renew their contracts, which they knew were fixed.

In her 31 March 2005 Decision, the Labor Arbiter declared petitioner an employee whose dismissal by
respondents was illegal. Accordingly, the Labor Arbiter ordered the reinstatement of petitioner and
the payment of backwages, moral and exemplary damages and attorney’s fees. The NLRC affirmed the
Labor Arbiter's judgment. Respondents filed a petition for certiorari with the Court of Appeals, which
overturned the decisions of the NLRC and Labor Arbiter.

ISSUE: Whether petitioner is an employee of respondents, which in turn determines whether

petitioner was illegally dismissed

HELD:

NO, Petitioner is not an employee of the respondents. The SC DENIED the petition and AFFIRMED the
assailed decision of the Court of Appeals.

To determine the existence of an employer-employee relationship, case law has consistently applied
the four-fold test, to wit: (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 on the
means and methods by which the work is accomplished. The so-called “control test” is the most
important indicator of the presence or absence of an employer-employee relationship.
In this case, PBA admits repeatedly engaging petitioner’s services, as shown in the retainer contracts.
PBA pays petitioner a retainer fee, exclusive of per diem or allowances, as stipulated in the retainer
contract. PBA can terminate the retainer contract for petitioner’s violation of its terms and conditions.

However, respondents argue that the all-important element of control is lacking in this case, making
petitioner an independent contractor and not an employee of respondents.The contractual
stipulations do not pertain to, much less dictate, how and when petitioner will blow the whistle and
make calls. On the contrary, they merely serve as rules of conduct or guidelines in order to maintain
the integrity of the professional basketball league.

The Court agrees with respondents that once in the playing court, the referees exercise their own
independent judgment, based on the rules of the game, as to when and how a call or decision is to be
made. The referees decide whether an infraction was committed, and the PBA cannot overrule them
once the decision is made on the playing court. The referees are the only, absolute, and final
authority on the playing court. Respondents or any of the PBA officers cannot and do not determine
which calls to make or not to make and cannot control the referee when he blows the whistle
because such authority exclusively belongs to the referees. The very nature of petitioner’s job of
officiating a professional basketball game undoubtedly calls for freedom of control by respondents.

Moreover, unlike regular employees who ordinarily report for work eight hours per day for five days a
week, petitioner is required to report for work only when PBA games are scheduled or three times a
week at two hours per game. These circumstances reinforce the fact that petitioner is an independent
contractor, and not an employee of respondents.
Orozco v. CA Aug. 13, 2008

FACTS:

Philippine Daily Inquirer (PDI) engaged the services of petitioner to write a weekly column for its
Lifestyle section. She religiously submitted her articles every week, except for a six-month stint in New
York City when she, sent several articles through mail.

On November 7, 1992, petitioner’s column appeared in the PDI for the last time. Petitioner claims
that her then editor, Logarta, told her that respondent Leticia Jimenez Magsanoc, PDI Editor in Chief,
wanted to stop publishing her column for no reason at all and advised petitioner to talk to Magsanoc
herself. Petitioner stated that when she talked to Magsanoc, the latter advised her that it was PDI
Chairperson Apostol who had asked to stop publication of her column, but according to Apostol, it
was Magsanoc that informed her that the Lifestyle section already had many columnists.

In a meeting conducted by Magsanoc and the Lifestyle section editor on how to improve said section.
They agreed to cut down the number of columnists. In their judgment, petitioner’s column failed to
meet the high standards of the newspaper. Hence, they decided to terminate petitioner’s column.
Petitioner filed a complaint for illegal dismissal, backwages, moral and exemplary damages, and other
money claims before the NLRC. Labor Arbiter decided in favor of petitioner. PDI appealed the Decision
to the NLRC, the latter dismissed the appeal. PDI then filed a Petition for Review before this Court but
it referred the case to the CA, the latter set aside the NLRC Decision and dismissed petitioner’s
Complaint. It held that the NLRC did not appreciate the facts and rendered a ruling wanting in
substantial evidence.

ISSUE:

Whether or not petitioner, as a newspaper columnist, is an employee of the newspaper (PDI) which
publishes the column.

Held:

No.

The 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. Of these four elements, it
is the power of control which is the determinant factor. The important factor to consider in the
"control test" is still the element of control over how the work itself is done, not just the end result.
Although petitioner had a weekly deadline to meet, she was not prevented from submitting her
column ahead of time or from submitting columns to be published at a later time. More importantly,
respondents did not dictate upon petitioner the subject matter of her columns, but only imposed the
general guideline that the article should conform to the standards of the newspaper and the general
tone of the particular section. Where a person who works for another performs his job at his own
pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is
remunerated 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. Petitioner’s main occupation is not as a columnist for respondent but as a women’s rights
advocate working in various women’s organizations. Thus, it cannot be said that petitioner was
dependent on respondent PDI for her continued employment in respondent’s line of business.
JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATION

G.R. No. 138051 June 10, 2004

FACTS:

In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development
Corporation (MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was
represented by Sonza, as President and general manager, and Tiangco as its EVP and treasurer.
Referred to in the agreement as agent, MJMDC agreed to provide Sonza’s services exclusively to ABS-
CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000
for the first year and P317, 000 for the second and third year.

On April 1996, Sonza wrote a letter to ABS-CBN's President, Eugenio Lopez III, where he resigned in
view of the recent events concerning his program and career. The acts of the station are violative of
the Agreement and said letter will serve as notice of rescission of their contract.

After the said letter, Sonza filed with the Department of Labor and Employment a complaint alleging
that ABS-CBN did not pay his salaries, separation pay, service incentive pay,13th month pay, signing
bonus, travel allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN
averred that no employee-employer relationship existed between the parties. However, ABS-CBN
continued to remit Sonza’s monthly talent fees but opened another account for the same purpose.

The Labor Arbiter dismissed the complaint and found that there is no employee-employer
relationship. The LA ruled that he is not an employee by reason of his peculiar skill and talent as a TV
host and a radio broadcaster. Unlike an ordinary employee, he was free to perform his services in
accordance with his own style. NLRC and CA affirmed the LA. Should there be any complaint, it does
not arise from an employer-employee relationship but from a breach of contract.

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

HELD:

There is no employer-employee relationship between Sonza and ABS-CBN. Petition denied. Judgment
decision affirmed. Case law has consistently held that the elements of an employee-employer
relationship are selection and engagement of the employee, the payment of wages, the power of
dismissal and the employer’s power to control the employee on the means and methods by which the
work is accomplished. The last element, "control test, is the most important element.

A. Selection and Engagement of Employee

ABS-CBN engaged SONZA’s services to co-host its television and radio programs because of SONZA’s
peculiar skills, talent and celebrity status. Independent contractors often present themselves to
possess unique skills, expertise or talent to distinguish them from ordinary employees.

The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not
possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent
contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-
CBN would not have entered into the Agreement with SONZA but would have hired him through its
personnel department just like any other employee.
B. Payment of Wages

ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC. SONZA
asserts that this mode of payment shows that he was an employee of ABS-CBN. All the talent fees
and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA were
ABS-CBN’s employee, there would be no need for the parties to stipulate on benefits such as SSS
benefit, which the law automatically incorporates into every employer-employee contract. Whatever
benefits SONZA enjoyed arose from contract and not because of an employer-employee relationship.

C. Power of Dismissal

For violation of any provision of the Agreement, either party may terminate their relationship. SONZA
failed to show that ABS-CBN could terminate his services on grounds other than breach of contract,
such as retrenchment to prevent losses as provided under labor laws. SONZA admits that even after
ABS-CBN ceased broadcasting his programs, ABS-CBN still paid him his talent fees. Plainly, ABS-CBN
adhered to its undertaking in the Agreement to continue paying SONZA’s talent fees during the
remaining life of the Agreement even if ABS-CBN cancelled SONZA’s programs through no fault of
SONZA.

D. Power of Control

First, SONZA contends that ABS-CBN exercised control over the means and methods of his work.
SONZA’s argument is misplaced. ABS-CBN engaged SONZA’s services specifically to co-host the “Mel
& Jay” programs. ABS-CBN did not assign any other work to SONZA. To perform his work, SONZA only
needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on
radio were outside ABS-CBN’s control. SONZA did not have to render eight hours of work per day.
The Agreement required SONZA to attend only rehearsals and tapings of the shows, as well as pre-
and post-production staff meetings. ABS-CBN could not dictate the contents of SONZA’s script. The
clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did
not attack ABS-CBN or its interests.
Carmela Tiangco v ABS-CBN Broadcasting Corporation

( Dec. 6, 2021)

Facts:

ABS-CBN issued a Memorandum dated 08 February 1995 concerning commercial appearances of its
talents and regular employees directed all on-air and/or on-camera in the Radio and the News and
Public Affairs Departments to refrain from appearing in commercial advertisements, violation of
which shall be considered a serious breach of company rules and regulations.

Petitioner, Carmela Tiangco allegedly violated the Memorandum when she appeared in a Tide
commercial that aired sometime in December 1995. As a result, the petitioner was suspended for
three months without pay from her co-anchor positions.

Petitioner maintained that she had the verbal approval of the management to proceed with the
commercial and the penalty of suspension without pay is harsh and unjust. ABS CBN Management
denied that such verbal approval was given to the petitioner. Petitioner filed a complaint against ABS-
CBN and its officers for illegal dismissal, illegal suspension, and claims for back wages, separation pay,
13th month pay, travel, vacation benefitsof Php150,000.00, shares of stocks, damages, and attorney's
fees.

In response, ABS-CBN, through counsel, stated that there was no basis for the claim because
petitioner was an independent contractor and that her suspension for her violation of the Agreement
did not constitute constructive dismissal. ABS CBN appealed that the decision of NLRC on the ground
of lack of jurisdiction considering that no employer-employee relationship existed between them.
Petitioner elevated the case to the Court of Appeals, which ended with a settlement between her and
ABS-CBN where she agreed that the network fully pay her salaries, 13thmonth pay, travel allowance
and employee’s stocks.

Issue:

Whether or not the petitioner an ABS CBN employee or independent contractor.

Ruling:

An independent contractor is one who carries on a distinct and independent business and undertakes
to perform the job, work, or service on their own account and under their own responsibility
according to their own manner and method, free from the control andd irection of the principal.
While an independent contractor enjoys independence and freedom from the control and supervision
of their principal, an employee is subject to the employer's power to control the means and methods
by which the employee's work is to be performed and accomplished.

The Court agrees with petitioner that she is not similarly situated with Sonza in terms of the roles she
assumed under the Agreement and her length of stay with the network. However, despite the
dissimilarities, there is one important element that petitioner and Sonza share - they both possessed
unique skills, expertise, and talent, for which they were both engaged as ABS-CBN's exclusive talents.
All told, the Court concludes that petitioner is an independent contractor.
Joaquin Lu v Enopia ( March 6, 2017)

Facts:

Tirso Enopia and 34 others were hired from January 20, 1994 to March 20, 1996 as crew members of
the fishing mother boat F/B MG-28 owned by Joaquin "Jake" Lu who is the sole proprietor of Mommy
Gina Tuna Resources based in General Santos City.

Lu and Enopia et al had an income-sharing arrangement wherein 55% goes to Lu, 45% to the crew
members, with an additional 4% as "backing incentive. They also equally share the expenses for the
maintenance and repair of the mother boat, and for the purchase of nets, ropes and payaos.

Sometime in August 1997, Lu proposed the signing of a Joint Venture Fishing Agreement between
them, but Enopia et al refused to sign the same as they opposed the one-year term provided in the
agreement. According to Enopia et al, during their dialogue on August 18, 1997, Lu terminated their
services right there and then because of their refusal to sign the agreement. On the other hand, Lu
alleged that the master fisherman (piado) Ruben Salili informed him that Enopia et al still refused to
sign the agreement and have decided to return the vessel F/B MG-28.

On August 25, 1997, Enopia et al filed their complaint for illegal dismissal, monetary claims and
damages. The Labor Arbiter dismissed the complaint and found that no employer-employee
relationship exists but a joint venture. The NLRC affirmed the decision of the LA. On appeal, the Court
of Appeals reversed the ruling of the NLRC and found that there was an employer-employee
relationship since there was the element of control.

Issue: Whether or not there is an employer-employee relationship between Enopia et al and Lu.

Ruling:

Yes, there is an employer-employee relationship.

In determining the existence of an employer-employee relationship, the following elements are

considered:

(l) the selection and engagement of the workers;

(2) the power to control the worker's conduct;

(3) the payment of wages by whatever means; and

(4) the power of dismissal. All these elements present in this case.

It was shown by the latter's evidence that the employer stated in their Social Security System (SSS)
online inquiry system printouts was MGTR, which is the company of Lu. The coverage of the Social
Security Law is predicated on the existence of an employer-employee relationship.

The 4% backing incentive fee which was divided among the fishermen engaged in the fishing
operations approved by Lu was paid to them after deducting the latter's respective vale or cash
advance. Why would these fishermen obtain vale or cash advance from Lu and not from the piado
who allegedly hired and had control over the fishermen.
Communications were made through radio operators and checkers. Such communication would
establish that he was constantly monitoring or checking the progress of respondents' fishing
operations throughout the duration thereof, which showed their control and supervision over
respondents' activities. Lu also assigned Master Fisherman (Piado) and Assistant master fisherman as
well as Checker and assistant Checker.

Finally, the power of dismissal over the fishermen were shown when Lu dismissed them after they
refused to sign the joint fishing venture agreement.

As to the issue of regular employment, the primary standard for determining regular employment is
the reasonable connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer.

Respondents' jobs as fishermen-crew members of F/B MG 28 were directly related and necessary to
petitioner's deep-sea fishing business and they had been performing their job for more than one year.

Thus, establishing all the necessary factors that could indicate whether they have an Er-ee
relationship, the Court finds it in the affirmative.
Primo Caong v Avelino Regualos January 26, 2011

FACTS:

P Caong, Tresquio and Daluyon were employed as jeepney drivers by Respondent Regualos under a
boundary agreement.

Caong filed separate complaints for illegal dismissal against Regualos who barred them from driving
the jeepneys due to deficiencies in their boundary payments. Regualos told them they were not
illegally dismissed, and could resume their use of vehicles after payment of arrears.

LA, NLRC, CA: ruled that there was an employer-employee relationship between Regualos and the
petitioners and that there was no dismissal because they would be allowed to use the vehicles once
they pay their arrears. A reasonable sanction was deemed to be an appropriate penalty; EE
relationship of parties was not severed but merely suspended because Regualos refused to allow
petitioners to drive the jeepneys when they failed to pay their obligations.

Regualos alleged that the drivers were mere lessees of his vehicles and not his employees. Thus, the
LA had no jurisdiction over the case.

ISSUE: Whether or not the drivers were illegally dismissed.

Whether or not the policy of suspending drivers pending payment of arrears in their boundary
obligations is reasonable.

RULING:

LABOR LAW - Employer-employee relationships

It is already settled that the relationship between jeepney owners/operators and jeepney drivers
under the boundary system is that of employer-employee and not of lessor-lessee. The fact that the
drivers do not receive fixed wages but only get the amount in excess of the so-called "boundary" that
they pay to the owner/operator is not sufficient to negate the relationship between them as
employer and employee. The Labor Arbiter, the NLRC, and the CA uniformly declared that petitioners
were not dismissed from employment but merely suspended pending payment of their arrears.

Suspension was NOT to sever the employer-employee relationship and it only dragged on because
petitioners refused to pay the arrears

Also, due process is simply the opportunity to be heard and, since this is NOT a case of
termination of employment, the twin-notice rule is not necessary. The meeting conducted by
Regualos on November 4, 2001 served as sufficient notice to petitioners.

Indeed, petitioners’ suspension cannot be categorized as dismissal, considering that there was no
intent on the part of respondent to sever the employer-employee relationship between him and
petitioners. It was made clear that petitioners could put an end to the suspension if they only pay
their recent arrears. As it was, the suspension dragged on for years because of petitioners’
stubbornness for refusal to pay. It would have been different if petitioners complied with the
condition and respondent still refused to readmit them to work. Then there would have been a clear
act of dismissal. But such was not the case. Instead of paying, petitioners even filed a complaint for
illegal dismissal against respondent.
Reynaldo Geraldo v Bill Sender Corporation ( Oct. 3, 2018)

On June 20, 1997, respondent The Bill Sender Corporation, engaged in the business of delivering bills
and other mail matters for and in behalf of their customers, employed petitioner Reynaldo S. Geraldo
as a delivery/messenger man to deliver the bills of its client, the Philippine Long Distance Telephone
Company (PLDT). He was paid on a "per-piece basis," the amount of his salary depending on the
number of bills he delivered.

On February 6, 2012, Geraldo filed a complaint for illegal dismissal alleging that on August 7, 2011,
the company's operations manager, Mr. Nicolas Constantino, suddenly informed him that his
employment was being terminated because he failed to deliver certain bills. He explained that he was
not the messenger assigned to deliver the said bills but the manager refused to reconsider and
proceeded with his termination. Thus, he claims that his dismissal was illegal for being done without
the required due process under the law and that the company and its president, respondent Lourdes
Ner Cando, be held liable for his monetary claims.

For its part, the company countered that Geraldo was not a full time employee but only a piece-rate
worker as he reported to work only as he pleased and that it was a usual practice for messengers to
transfer from one company to another to similarly deliver bills and mail matters. As such, he would
only be given bills to deliver if he reports to work, otherwise, the bills would be assigned to other
messengers. Moreover, contrary to Geraldo's claims, the company asserts that he was not illegally
dismissed for he was the one who abandoned his job when he no longer reported for work. Thus, the
burden was on him to substantiate his claims for illegal dismissal.

Issue:

Whether or not petitioner being a piece-rate employee is not an employee of respondent and not
entitled to security of tenure on the basis of the allegations that petitioner was paid on a per piece
basis.

Held:

The test to determine whether employment is regular or not is the reasonable connection between
the particular activity performed by the employee in relation to the usual business or trade of the
employer. If the employee has been performing the job for at least one year, even if the performance
is not continuous or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability, of that activity to the
business.

It is undisputed that the company was engaged in the business of delivering bills and other mail
matters for and in behalf of their customers, and that Geraldo was engaged as a delivery/messenger
man tasked to deliver bills of the company's clients. The company cannot deny the fact that Geraldo
was performing activities necessary or desirable in its usual business or trade for without his services,
its fundamental purpose of delivering bills cannot be accomplished. On this basis alone, the law
deems Geraldo as a regular employee of the company.

But even considering that he is not a full time employee, the law still deems his employment as
regular due to the fact that he had been performing the activities for more than one year. In fact, he
has been delivering mail matters for the company for more than fourteen (14) years. Without
question, this amount of time that is well beyond a decade sufficiently discharges the requirement of
the law. Although the length of time is not the controlling test to ascertain if an employee is a regular
employee, it is important to note so that we can tell if he was hired to accomplish tasks which are
necessary and indispensable to the usual business or trade of the employer.

The term "wage" is broadly defined in Article 97 of the Labor Code as remuneration or earnings,
capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or
commission basis. Payment by the piece is just a mode of compensation and does not define the kind
of employment of a worker. The fact that Geraldo is paid on the basis of his productivity does not
automatically means that his employment as contractual.
Chrisden Ditiangkin v. Lazada E-Services Phils.Inc. (G.R. 246892), Sept. 21, 2022

Chrisden Ditiangkin and several others each executed an Independent Contractor Agreement with
Lazada E-Services Philippines, Inc. whereby they agreed to be riders for Lazada. Lazada is an online
selling site which allows sellers to sell their products online via their website or mobile application.
The essential task of the riders is to pick up items for sale from sellers and then bring those items to
Lazada’s warehouse. The contract specified that the duration of their agreement will be for one year
and that the riders shall be paid Php1,200.00 per day, and that the riders shall use their own
motorcycles, among others.

However, sometime in January 2017, the riders were told that they were no longer given any
schedules. They still reported for work for three days until they learned that their routes were given
to other riders. Ditiangkin et al then filed a labor case against Lazada for illegal dismissal.

In its defense, Lazada countered that the riders are independent contractors as proven by their
contract and that after the December 2016 holidays, the demand for riders went down hence they
had to reorganize their riders’ schedules butt the contracts of the riders were not concluded.

The Labor Arbiter ruled in favor of Lazada. The NLRC affirmed the decision of the labor arbiter. The
Court of Appeals dismissed the appeal filed by Ditiangkin et al on the ground that the remedy used
was improper.

ISSUE: Whether or not the riders are regular employees of Lazada.

HELD: Yes. Under the four-fold test, to establish an employer-employee relationship, four factors
must be proven: (a) the employer’s selection and engagement of the employee; (b) the payment of
wages; ( c) the power to dismiss; and (d) the power to control the employee’s conduct. All of these
were present in the case:(a) Despite how the contract was named, it was clear that Ditiangkin et al
were directly hired by Lazada;(b) Ditiangkin et al were paid Php1,200.00 a day;(c) The contract stated
that Lazada may immediately terminate the contract for any breach; and(d) Lazada imposed strict
rules on how the riders’ work is carried out. Lazada requires the accomplishment of a route sheet
which keeps track of the arrival, departure, and unloading time of the items. Ditiangkin et al shoulder
a penalty of P500.00 if an item is lost on top of its actual value. Ditiangkin et al were also required to
submit trip tickets and incident reports to Lazada.Even if it is considered that these instructions as
mere guidelines, the circumstances of the whole economic activity between petitioners and
respondents confirm the existence of an employer-employee relationship.

The services performed by Ditiangkin et al are integral to Lazada’s business. Lazada insist that the
delivery of items is only incidental to their business as they are mainly an online platform where
sellers and buyers transact. However, the delivery of items is clearly an important factor in the
services offered by Lazada.

Thus, it is established upon these facts that Ditiangkin et al., are employees of Lazada and that they
are not merely an independent contractors as incorrectly labeled by Lazada.
Anselmo Bulanon vs Mendco- April 26, 2023

FACTS:

Petitioner Anselmo Bulanon alleged that he was hired as a Welder/Fabricator in the furniture business
of respondent Eric Ng Mendoza (Eric). Eric owns various furniture businesses namely, Mendco
Development Corporation (Mendco), Pinnacle Casting Corporation (Pinnacle), Mastercraft Phil., Inc.
(Mastercraft), and Jacquer International (Jacquer). The case arose when petitioner initially filed on
January 6, 2006 a Complaint against respondents Eric, Mendco, Pinnacle, Mastercraft, and Jacquer
(respondents collectively), before the (DOLE) for non-payment of overtime pay, legal holiday pay,
13th month pay, holiday and rest day premium pay as well as his non-inclusion in SSS, PhilHealth and
Pag-IBIG coverage. Answering upon the Complaint, the DOLE inspected the premises of respondent
Pinnacle on January 13, 2006. After inspection, the DOLE found that petitioner was not paid his 13th
month pay, legal holiday pay, service incentive leave pay and overtime pay.

On January 14, 2006, petitioner reported for work, however, Human Resources representative named
Raquel allegedly gave his salary and instructed him not to report for work anymore. Petitioner went
back on January 16, 2006 but the security guard on duty prevented him from entering the premises.
This prompted petitioner to file Complaints against respondents before the NLRC-RAB for illegal
suspension and illegal dismissal with claims for payment of backwages, separation pay, attorney's
fees, and moral and exemplary damages. Respondents denied petitioner's allegations and countered
that petitioner was not their employee because his services were engaged by respondent Eric and the
other members of his family to perform masonry works in their residences which is located in the
same compound in Burgos, Street, Mandaue City

ISSUE:

Whether or not petitioner was able to prove by substantial evidence his employment with
respondents.

HELD:

No. In this case, the record reveals that petitioner failed to substantiate his claim that he was a
regular employee of respondents. In an illegal dismissal case, the burden of proof rests on the
employer to prove that its dismissal of an employee was for a valid cause. However, before a case for
an illegal dismissal can prosper, an employer-employee relationship must first be established. Thus, in
filing a complaint before the Labor Arbiter for illegal dismissal, it must be first proven that there exist
an employer-employee relationship by substantial evidence or such relevant evidence as a reasonable
mind could accept to support a conclusion.

Here, the appellate court applied the four-fold test, to wit: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power to discipline and dismiss; and (d) the employer's
power to control the employee with respect to the means and methods by which the work is to be
accomplished, in finding that no employer-employee existed between petitioner and respondents.

No matter how Bulanon puts it, it is undeniable that he only performs masonry works whenever the
need arises and that it is impossible for him to be a regular employee of all the 5 respondent
companies. It was not shown that petitioner was subjected to a set of rules and regulations governing
the performance of his duties. Neither can it be said that he was required to devote his time
exclusively to working for any of the respondents considering that he admittedly worked for all five
respondents concurrently.
As to the element of control, petitioner again heavily relies on the DTRs he submitted to prove that
respondents effectively monitored his working time.Significantly, the subject DTRs provide no
evidentiary value since the genuineness and due execution thereof are questionable.
Gesolgon v. Cyberone Ph, Inc. (October 14, 2020)

CyberOne AU are one and the same entity, the presumption that they have personalities separate and
distinct from one another stands. The LA ruled that petitioners are merely shareholders or directors
of CyberOnePH and not its regular employees.Also, since CyberOne AU is a foreign corporation not
doing business in the Philippines,then the LA has no jurisdiction over it. Hence, petitioners' complaint
had to be dismissed for lack of merit.

NLRC ruled that petitioners are employees ofCyberOne AU and CyberOne PH. The fact that petitioners
are nominal shareholders ofCyberOne PH does not preclude them from being employees of CyberOne
PH.The NLRC noted that CyberOne AU is doing business in the Philippines due to its participation in
the management, supervision or control of CyberOne PH which is indicative of a continuity of
commercial dealings or arrangements.

The appellate court reversed the findings of the NLRC and ruled that no employer-employee
relationship existed between petitioners.

The appellate court also held that the NLRC misapplied the doctrine of piercing the corporate veil. It
ruled that although it was established that Mikrut and CyberOne AU owned majority of the shares of
CyberOne PH, such fact may not be a basis for disregarding the independent corporate status of
CyberOne PH. Mere ownership by single stoclkhlolder or by another corporation of all or nearly all of
the capital stock of a corporation is not in itself sufficient reason for disregarding the fiction of
separate corporate personalities. There was no evidence on record to show that the polices,corporate
finances, and business practices of CyberOne PH were completely controlledby CyberOne AU.

Hence, the appellate court concluded that CyberOne AU and CyberOne PH are two distinct and
separate entities.

Issue

Whether or not the doctrine of piercing the corporate veil is applicable?

The Court finds the Petition without merit.At the outset, since there is an issue involving the piercing
of the corporate veils ofCyberOne PH and CyberOne AU, it must be emphasized that the records are
bereft of any showing that this Court has acquired jurisdiction over CyberOne AU, a foreign
corporation, through a valid service of summons, although respondent CyberOne PH,Mikrut and
Juson were validly served with summons.Notably, CyberOne AU is a foreign corporation organized
and existing under the laws of Australia and is not licensed to do business in the Philippines.
CyberOne AU did not appoint and authorize respondents CyberOne PH, a domestic corporation, and
Mikrut,the Managing Director of CyberOne AU and a stockholder of CyberOne PH, as its agents in the
Philippines to act in its behalf. Also, it was not shown that CyberOne AU is doingbusiness in the
Philippines.While it is true that CyberOne AU owns majority of the shares of CyberOne PH,
this,nonetheless, does not warrant the conclusion that CyberOne PH is a mere conduit of CyberOne
AU. The doctrine of piercing the corporate veil applies only in three basic instances, namely: (a) when
the separate distinct corporate personality defeats public convenience, as when the corporate fiction
is used as a vehicle for the evasion of an existing obligation; (b) in fraud cases, or when the corporate
entity is used to justify a wrong, protect a fraud, or defend a crime; or (c) is used in alter ego cases,i.e.,
where a corporation is essentially a farce, since it is a mere alter ego or business conduit of a person,
or where the corporation is so organized and controlled and its affairs conducted as to make it merely
an instrumentality, agency, conduit or adjunct of another corporation. The doctrine of piercing the
corporate veil is unwarranted in the present case. First, no evidence was presented to prove that
CyberOne PH was organized for the purpose of defeating public convenience or evading an existing
 obligation. Second, petitioners failed to allege any fraudulent acts committed byCyberOne PH in
order to justify a wrong, protect a fraud, or defend a crime. Lastly, the mere fact that CyberOne PH's
major stockholders are CyberOne AU and respondent Mikrut does not prove that CyberOne PH was
organized and controlled and its affairs conducted in a manner that made it merely an
instrumentality, agency, conduit or adjunct of CyberOne AU. In order to disregard the separate
corporate personality of corporation, the wrongdoing must be clearly and convincingly
established.Moreover, petitioners failed to prove that CyberOne AU and Mikrut, acting as the
Managing Director of both corporations, had absolute control over CyberOne PH. Even granting that
CyberOne AU and Mikrut exercised a certain degree of control over the finances, policies and
practices of CyberOne PH, such control does not necessarily warrant piercing the veil of corporate
fiction since there was not a single proof thatCyberOne PH was formed to defraud petitioners or that
CyberOne PH was guilty of bad faith or fraud.Hence, the doctrine of piercing the corporate veil cannot
be applied in the instant case.This means that CyberOne AU cannot be considered as doing business
in the Philippines through its local subsidiary CyberOne PH. This means as well that CyberOne AU is to
be classified as a non-resident corporation not doing business in the Philippines.
Dr, Mary Jean Loreche-Amit v Cagayan de Oro Medical Center June 3, 2019 (G.R. No. 216635)

FACTS: In 1996, petitioner Dr. Mary Jean Loreche-Amit started working as an Associate Pathologist at
Cagayan de Oro Medical Center. Upon demise of the Chief Pathologist Dr.Gaerlan in the year 2006,
the CDMC’s BOD appointed her as the Chief Pathologist for five years. However, after a year, CDMC
BOD recalled petitioner’s appointment which prompted petitioner to file a complaint for illegal
dismissal.As stated on the petitioner’s complaint, the revocation of her appointment was due to her
refusal to help Dr. Emano’s daughter to qualify as a pathologist. Thereafter, Dr. Francisco Oh issued a
memorandum to which petitioner slammed and resulted to revocation of her appointment. The
respondents further averred that the petitioner was not hired and was only merely assisting the late
Dr. Gaerlan in operating the laboratory and that while attending to CDMC, petitioner was also
working as pathologist for two other hospitals.

Labor Arbiter dismissed the complaint for lack of jurisdiction. NLRC affirmed LA ruling and reiterated
that petitioner is a corporate office hence no employer-employee relationship was found.

ISSUE: Whether petitioner and respondent CDMC formed employee-employer relationship

RULING:

No, the Supreme Court disagreed the petitioner and responded that do not have an Er-Ee
relationship. Although the petitioner is not considered a corporate officer, as her position as
Pathologist in not one of the listed designations found in the Corporate Code or by-laws of the CDMC,
the Court ruled that this not amount to an automatic declaration that petitioner is an employee of
CDMC. The four-fold test, to wit: 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, must be
applied to determine the existence of an employer-employee relationship. As applied in the instant
case, although CDMC exercised the power to select and supervise petitioner as pathologist which
provides for a compensation at 4% of the gross receipts of the clinical section of laboratory,
respondent does not exercise the power of control over petitioner. This is evidenced by the fact that
petitioner renders services to other hospitals which provides that petitioner controls her working
hours. Relevant to this, the economic reality test is adopted to determine the existence of employer-
employee relationship. Under this 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 through the economic dependence on his
employer. As enunciated in Reyes v. Glaucoma Research Foundation, the rule is that 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. Hence, as concluded
by the LA, NLRC, and CA, the Court cannot overturn that there was no wrongful dismissal as it was not
sufficiently established that the petitioner was actually a CDMC employee.
Reyes v. Glaucoma Research Foundation June 17, 2015

Facts:

Jesus Reyes filed a complaint for illegal dismissal against the respondents.

Petitioner alleged that he was hired by respondent as administrator of the Eye Referral Center. He
performed his duties as administrator and received his monthly salary of P 20,000.00 until the end of
January 2005.

Respondent withheld petitioner's salary without notice but he still continued to report for work. He
wrote a letter to Manuel Agulto, the Executive Director of corporation regarding his salaries. He did
not receive any response from Agulto. He was informed by the asst. Executive Director that he is no
longer the Administrator of ERC, he was not allowed by the security guard to enter the premises of
ERC.

The respondents claimed that there is no Er-Ee relationship between them because respondents had
no control over the petitioner in terms of working hours as he reports for work at anytime of the day
and leaves as he pleases. Respondents also had no control as to the manner in which he performs his
alleged duties as consultant.

LA dismissed the complaint as petitioner failed to establish the elements of an employer-employee

relationship. His actions were neither supervised nor controlled by the management of the ERC; he
also did not observe working hours by reporting for work and leaving as he pleased; and, he was
receiving allowances, not salaries, as a consultant.

NLRC reversed and ruled that it was necessary for respondents to discharge the burden of proving
that petitioner's dismissal was for a just cause and effected after due process was observed.

CA reinstated the LA decision.

Issue:

Whether or not employer-employee relationship exists between the petitioner and the respondents.

Held:

No, a case for illegal dismissal can only prosper if there exist an employer-employee
relationship .Thus, in filing a complaint before the LA for illegal dismissal, it must be based on the
reason that he was an employee of respondents.

The four standards in determining the existence of an employer-employee relationship, are the
following: (a) the manner of selection and engagement of the putative employee; (b) the mode of
payment of wages; (c) the presence or absence of power of dismissal; and, (d) the presence or
absence of control of the putative employee's conduct. The determining factor among these is the
so-called "control test."

The power of the employer to control the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship. This test is based on whether the
person for whom the services are rendered has the right to control both the end achieved and the
manner and means used to achieve such end.
It is well settled that where a person who works for another performs his job at his own pleasure, in a
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.

In the present case petitioner was never subject to definite working hours. He never denied that he
goes to work and leaves the office as he pleases.The Court therefore has held that there is no
employer-employee relationship where the supposed employee is not subject to a set of rules and
regulations governing the performance of his duties under the agreement with the company.
PEDRO D. DUSOL AND MARICEL M. DUSOL, PETITIONERS, VS. EMMARCK A. LAZO, AS OWNER OF
RALCO BEACH, RESPONDENT. [ G.R. No. 200555, January 20, 2021 ]

FACTS:

This case arose from a complaint for illegal dismissal, underpayment of benefits, claim for damages,
and attorney's fees filed by petitioners Pedro and Maricel Dusol against respondent Emmarck A. Lazo
as the owner of Ralco Beach.

According to Pedro and Maricel, Pedro started working as the caretaker of the Ralco Beach, a beach
resort then operated by the parents of Emmarck. Sometime in 1995, Pedro was also asked to work in
the fishpond business owned by the parents of Emmarck. They agreed that Pedro will be
compensated based on the income to be derived from the harvests. However, Emmarck's parents
discontinued it because the business was not profitable.

Even after this, Pedro continued to serve as caretaker of Ralco Beach.In 2001, Pedro married Maricel,
and Maricel was also employed by Emmarck to manage the store in the resort. Sometime in July
2008, Emmarck notified Pedro and Maricel that he will be leasing out Ralco Beach because the
business was not profitable. Thus, their services are no longer needed. Due to this Pedro and Maricel
no longer reported for work.

Subsequently, they filed a complaint that they were illegally dismissed and that they were deprived
of procedural due process. For his part, Emmarck denied the employment relationship with Pedro and
Maricel, and asserted that they were his industrial partners. Emmarck explained that, in 1993, Pedro
became an industrial partner of her mother in the fishpond business with an agreement to be entitled
to 1/3 of the total harvest made. Similarly, Maricel was taken in as an industrial partner to manage
the store inside the beach property, who was entitled to a P1,000.00 monthly allowance and 15%
commission on the rent of the resort facilities.

Emmarck likewise claimed that, as the fishpond business was not doing good, he put up cottages and
a store at their beach property so that Pedro and Maricel would have a means of livelihood. He
allowed Pedro and Maricel to reside on the beach property free of charge. They then received an
allowance or commission from the income generated by the rentals on the cottages and sales of the
store. Their receipt of the share in the profits was in their capacity as business partners. He also
asserted that he had no power to dismiss Pedro and Maricel because the existence of a partnership
depends on the viability of the business. Lastly, Emmarck stressed that he had no control over Pedro
and Maricel, and in fact did not control or guide them since he left the entire business operation to
them.

ISSUE:Whether Pedro and Maricel are employees or partners of Emmarck.

HELD:

There is a partnership if two or more persons bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves. A particular
partnership may have for its object a particular undertaking. The existence of a partnership is
established when it is shown that: (1) two or more persons bind themselves to contribute money,
property, or industry to a common fund; and (2) they intend to divide the profits among themselves.
Generally, it is not required that the agreement be in writing or in a public instrument. However,
when immovable properties or real rights are contributed to the partnership, it is required that an
inventory of the real properties or rights contributed be prepared and signed by the parties, and
attached to the public instrument, otherwise, the agreement is void.
The point of the controversy is the nature by which Pedro and Maricel rendered their services and the
capacity by which they received their compensation.There is no proof that a partnership existed
between Pedro or Maricel, and Emmarck in relation to the beach resort. No documentary evidence
was submitted by Emmarck to even suggest a partnership. Emmarck relied solely on his own
statements that Pedro and Maricel did not receive wages, but merely allowances and commission
from the profits of their partnership.
Fernandez v Kalookan Slaughterhouse Inc. June 19,2019

FACTS:

Arnulfo Fernandez was hired as a butcher by Kalookan Slaughterhouse (K.S.) 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 also claimed that in 2013 he met an accident while driving Kalookan slaughterhouse’s
truck and that deductions were made from his wages. Sometime in 2014 he suffered from a headache
and did not report for work. That next day, he only receive 200 as his salary due to his previous under
time and was informed that he could no longer report for work due to his old age

Respondent slaughterhouse asserted that Fernandez is an independent butcher working under its
Operation Supervisor Tablit. He received payment based on the number of hogs he butchered and he
was only required to be in the slaughterhouse when customers brought hogs to be slaughtered. This
policy on the entry to the premises is applied to employees, dealers, butchers and trainees. According
to K.S., Fernandez violated the policies and he misinterpreted the prevention of him to enter the
slaughterhouse as an act of dismissal.

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 booked 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. The Court held that, Kalookan Slaughterhouse was
petitioner's employer and has 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.
Filomena Barcenas v NLRC July 16, 1990

FACTS:

The Buddhist Temple has hired petitioner who speaks the Chinese language as secretary and
interpreter. The head monk, Chua Se Su, had sexual relations with petitioner, which resulted to the
latter giving birth to a child. Of five months before giving birth to the alleged son of Su on October 12,
1982, petitioner was sent home to Bicol. Upon the death of Su in July, 1983, complainant remained
and continued in her job. In 1985, respondent Manuel Chua (Chua, for short) was elected President
and Chairman of the Board of the Poh Toh Buddhist Association of the Philippines, Inc. and Rev. Sim
was elected Head Buddhist Priest.

After that,Chua and Dee discontinued payment of her monthly allowance and the additional P500.00
allowance effective 1983. Petitioner and her son were evicted forcibly from their quarters in the
temple by six police officers. Chua alleges that she was never an employee of the temple, but only
attended to the personal needs of the former head monk, hence was co-terminus with such.

LA ruled in favour of the petitioner. NLRC reversed the ruling.

ISSUE: WON petitioner is an employee of the temple or a house helper.

HELD:

Petitioner is an employee of the temple as secretary and interpreter.

The work that she performed in the temple could not be classified as domestic work. Her being skillful
in the Chinese language, accompanied to the visitors, mostly Chinese, who came to pray ; Indeed,
these tasks may not be deemed activities of a house helper. They were essential to the operation and
religious functions of the temple.

In spite of this finding, her status as a regular employee ended upon her return to Bicol when she
awaited the birth of her child. The records do not show that petitioner filed any leave from work or
that a leave was granted to her. Neither did she return to work after the birth of her child. The NLRC
found that it was only after Su died that she went back to the Manila Buddhist Temple. Clearly, her
return could not be deemed as a resumption of her old position which she had already abandoned.
While petitioner contends that she continued to work in the temple after Su died, there is, however,
no proof that she was re-hired by the new Head Monk.

The Court Affirmed the NLRC’s Decision.

Civil Service Commission vs. Roselle Annang Sept. 28,2022; G.R. No.225895
Dr. Roselle Annang who taught under Contract of Services arrangement in Cagayan State University
(“CSU”) requested for an accreditation. The Civil Service Commission denied Dr. Annang’s request for
accreditation because it was filed out of time and also against Civil Service laws, rules and
regulations.
The Supreme Court reversed and set aside the ruling of the Court of Appeals.
It held that the request for accreditation of government service is governed under Section 100 of the
Revised Rules on Administrative Cases in the Civil Service. The said provision provides that officials
and employees who rendered actual services in government pursuant to defective appointments or
without appointment may seek for accreditation of the actual services. However, the same provision
of the RRACCS provides an exception that those who have retired may no longer avail of the said
request for accreditation. In this case, Dr. Annang retired on October 20, 2012 and filed the request
only on March 11, 2013.
The Supreme Court held that the Court of Appeals erred when it relied and applied the so-called Four-
Fold Test being applied to determine employer-employee relationship in the private sector. The Court
held that the appellate court should have primarily relied on Civil Services laws, rules and regulations
to determine the relationship of CSU and Dr. Annang.
The Supreme Court held that Civil Services laws, rules and regulations do not recognize services
rendered pursuant to Contract of Service as government service. This is specifically provided for under
Section 1, Rule XI of CSC Memorandum Circular No. 40-98, or the Revised Omnibus Rules on
Appointments and Other Personnel Actions.
The Supreme Court brushed aside respondent Annang’s motion that her services were considered
integral to the function of CSU as a university that she cannot be engaged through contract of
services. The Supreme Court held that the contract between Dr. Annang and CSU expressly provides
that it was entered into because, “it is not possible to hire on casual or contractual basis, and that it is
done in the exigency of service.” Given such circumstance, the Supreme Court observed that CSC
Resolution No. 021480 allowed CSU to engage Dr. Annang as a part-time faculty member under a
contract of service. From the foregoing, the Supreme Court held that Dr. Annang’s years as a part-
time faculty of CSU cannot be credited as government service under Civil Services laws, rules and
regulations.
Philippine National Construction Corporation (PNCC) V. NLRC June 23,2021

In accordance with the Corporation Code of the Philippines, the PNCC was originally incorporated
under the name Construction Development Corporation (CDCP). CDCP sustained its operations by
obtaining loans from various Government Financing Institutions (GFIs).
Then President Ferdinand Marcos made the GFIs the majority stockholders of PNCC when it directed
that all the unpaid obligations of CDCP be converted into shares of stock. After such, the
Incorporation articles’ were amended and changed the corporate name of CDCP to PNCC because of
the Government’s equity investment in the company.
During the administration of then President Arroyo, PNCC was placed under the
Department of Trade and Industry. In 1992, PNCC started giving mid-year bonuses to its
employees in May of each year because of its CBA with its employees. After its expiration, the release
of mid-year bonuses to its employees still continued until 2012.
In 2013, Atty. Luis F. Sison, one of the petitioners, and then PPNCC’s President and CEO, sought the
opinion of its counsel on the release of mid-year bonuses to the employees.
Following the opinion of its counsel, the Commission advised PNCC that the request for approval
will not be forwarded for approval of the President because even the bonuses will not be granted it
does not violate the non-diminution rule.
After, Atty. Sison announced to its employees that the 2013 Mid-Year Bonus will not be released.
The PNCC filed a complaint for non-payment of mid-year bonus and diminution of wages
and benefits before the NLRC.
The Labor Arbiter rendered a decision in favor of the employees and ordered the PNCC to
give the mid-year bonus for 2013 and every year thereafter. It held that the
practice of granting mid-year bonus to PNCC employees since 1992 had ripened into a
Benefit which may not be reduced, diminished, discontinued, or eliminated
in accordance with Article 100 of the Labor Code on non-diminution of benefits
NLRC affirmed the LA’s decision. It stated that since PNCC was created under the Corporation Code of
the Philippines, it cannot be classified as a GOCC. It is a private entity although the majority
stockholder is from the Government. Moreover, PNCC is covered by the provisions of the Labor Code
and not by the Civil Service Law.
The Court of Appeals (CA) affirmed that PNCC is a private corporation. The non-releasing of the
employees' 2013 mid-year bonus violated the non-diminution clause under the Labor Code.
ISSUES:
(1) Whether PNCC is a private corporation or a government owned and controlled
corporation.
(2) Whether PNCC employees are covered by the provisions of the Labor Code or by
the Civil Service Law.
RULING:
(1) The Court upheld the status of PNCC as GOCC emphasizing that it is 90.3% owned
by the government. It also referred to the Strategic Alliance vs. Radstock Securities
case which pronounced with finality that PNCC is a GOCC.
(2) In resolving this issue whether it is covered by the Labor Code, the Court referred to Article IX-B,
Section 2, paragraph 1of the 1987 Constitution which provides that only GOCCs with original charters
are covered by the civil service laws. Being incorporated under the Corporation Code
of the Philippines, PNCC is considered as a non-chartered GOCC. As such, it is governed by the Labor
Code and not by the Civil Service Law. The Court also mentioned the case of Paloma vs. Philippine
Airlines, where it pronounced that PAL was a non-chartered GOCC prior its privatization since the
majority of its stockholdings was owned by the GSIS. Thus, PAL personnel were
covered by the Labor Code. The Court explained that the same rule applies to
PNCC employees. Thus, the PNCC employees are covered by the Labor Code, the decision of the NLRC
was affirmed by the Court.