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[G.R. No. 101279. August 6, 1992.]PHILIPPINE ASSOCIATION OF SERVICE

EXPORTERS, INC. petitioner, vs. HON.RUBEN D. TORRES, as Secretary of the

Department of Labor & Employment, andJOSE N. SARMIENTO, as

Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT

ADMINISTRATION, respondents.

FACTS:

DOLE Secretary Ruben D. Torres issued Department Order No. 16

Series of 1991 temporarily suspending the recruitment by private

employment agencies of

a result of the department order DOLE, through the POEA took over the

business of deploying Hong Kong bound workers.

The petitioner, PASEI, the largest organization of private

employment and recruitment agencies duly licensed and authorized by the

POEA to engage in the business of obtaining overseas employment for

Filipino land-based workers filed a petition for prohibition to annul the

aforementioned order and to prohibit implementation.

ISSUES:

(1) Whether or not respondents acted with grave abuse of

discretion and/or in excess of their rule-making authority in issuing said

circulars;

(2) whether or not the assailed DOLE and POEA circulars are

contrary to the Constitution, are unreasonable, unfair and oppressive; and

(3) Whether or not the requirements of publication and filing with

the Office of the National Administrative Register were not complied with.

HELD

FIRST, the respondents acted well within in their authority and did

not commit grave abuse of discretion. This is because Article 36 (LC) clearly

grants the Labor Secretary to restrict and regulate recruitment and

Labor shall have the power to restrict and regulate the recruitment and

placement activities of all agencies within the coverage of this title

[Regulation of Recruitment and Placement Activities] and is hereby

authorized to issue orders and promulgate rules and regulations to carry out

the objectives and implement the provisions of this title.

SECOND, the vesture of quasi-legislative and quasi-judicial powers

in administrative bodies is constitutional. It is necessitated by the growing

complexities of the modern society. THIRD, the orders and circulars issued

are however, invalid and unenforceable. The reason is the lack of proper

publication and filing in the Office of the National Administrative Registrar as

required in Article 2 of the Civil Code to wit: Art. 2. Laws shall take effect

after fifteen (15) days following the completion of their publication in the

Official Gazette, unless it is otherwise provided; Article 5 of the Labor Code

government agencies charged with the administration and enforcement of

this Code or any of its parts shall promulgate the necessary implementing

rules and regulations. Such rules and regulations shall become effective

fifteen (15) days after announcement of their adoption in newspapers of

general circulation; and Sections 3(1) and 4, Chapter 2, Book VII of the

Administrative Code of 1987 which provide:

the Philippines Law Center, three (3) certified copies of every rule adopted by

it. Rules in force on the dateof effectivity of this Code which are not filed

within three (3) months shall not thereafter be the basis of any sanction

against any party or persons. (Chapter 2, Book VII of the Administrative Code

ddition to other rule-making requirements

provided by law not inconsistent with this Book, each rule shall become

effective fifteen (15) days from the date of filing as above provided unless a

different date is fixed by law, or specified in the rule in cases of imminent

danger to public health, safety and welfare, the existence of which must be

expressed in a statement accompanying the rule. The agency shall take

appropriate measures to make emergency rules known to persons who may

be affected by them. (Chapter 2, Book VII of the Administrative Code of

1987). Prohibition granted.

DY KEH BENG,

petitioner, vs.

INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL.,

respondents.

G.R. No. L-32245 May 25, 1979

FACTS: Petitioner, Dy Keh Beng, proprietor of basket factory, was charged

with ULP for discriminatory acts defined under Sec 4(a), subparagraph (1 &

4), R.A. No. 875 by dismissing on September 28-29, 1960, respectively, Carlos

N. Solano and Ricardo Tudla for their union activities.

After PI was conducted, a case was filed in the CIR for in behalf of

the ILMUP and two of its members, Solano and Tudla. Dy Keh Beng

contended that he did not know Tudla and that Solano was not his employee

because the latter came to the establishment only when there was work

which he did on pakiaw basis. According to Dy Keh Beng, Solano was not his

employee for the following reasons:

(1) Solano never stayed long enough at Dy’s establishment;

(2) Solano had to leave as soon as he was through with the order

given him by Dy;

(3) When there were no orders needing his services there was

nothing for him to do;

(4) When orders came to the shop that his regular workers could

not fill it was then that Dy went to his address in Caloocan and

fetched him for these orders; and

(5) Solano's work with Dy's establishment was not continuous.

According to petitioner, these facts show that respondents Solano

and Tudla are only piece workers, not employees under Republic Act 875,

where an employee is referred to as

Shall include any employee and shag not be limited to the

employee of a particular employer unless the act explicitly states otherwise

and shall include any individual whose work has ceased as a consequence of,

or in connection with any current labor dispute or because of any ulp and

who has not obtained any other substantially equivalent and regular

employment.

while an employer

includes any person acting in the interest of an employer, directly

or indirectly but shall not include any labor organization

(otherwise than when acting as an employer) or anyone acting in

the capacity of officer or agent of such labor organization.

Petitioner also contends that the private respondents "did not meet the

control test in the fight of the ... definition of the terms employer and

employee, because there was no evidence to show that petitioner had the

right to direct the manner and method of respondent's work. He points to

the case of Madrigal Shipping Co., Inc. v. Nieves Baens del Rosario, et al. ,L-

13130, October 31, 1959, where the Court ruled that:

The test ... of the existence of employee and employer

relationship is whether there is an understanding betweenthe

parties that one is to render personal services to or for the benefit

of the other and recognition by them of theright of one to order

and control the other in the performance of the work and to

direct the manner and method of its performance.

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The CIR found that there existed an employee-employer relationship

between Dy Keh Beng and complainants Tudla andSolano, although Solano

was admitted to have worked on piece basis.

Hence, this petition for certiorari.

ISSUE: Whether or not an employee employer relation existed between

petitioner Dy Keh Beng and the respondents Solano and Tudla.

HELD: The SC also noted the decision of Justice Paras in the case of ³Sunrise

Coconut Products Co. Vs. CIR (83 Phil 518, 523)that³judicial notice of the fact

that the so-called "pakyaw" system mentioned in this case as generally

practiced in our country, is, in fact, a labor contract -between employers and

employees, between capitalists and laborers.´

With regard to the control test the SC said that ³It should be borne in mind

that the control test calls merely for the existence of the right to control the

manner of doing the work, not the actual exercise of the right.´ Considering

the finding by the Hearing Examiner that the establishment of Dy Keh Beng is

"engaged in the manufacture of baskets known as kaing, it is natural to

expect that those working under Dy would have to observe, among others,

Dy's requirements of size and quality of the kaing. Some control would

necessarily be exercised by Dy as the making of the kaing would be subject to

Dy's specifications. Parenthetically, since the work on the baskets is done at

Dy's establishments, it can be inferred that the proprietor Dy could easily

exercise control on the men he employed.

The petition was dismissed. The Court affirmed the decision of the CIR.

Sevilla vs. CA

FACTS: A contract by and between Noguera and Tourist World Service (TWS),

represented by Canilao, wherein TWS leased the premises belonging to

Noguera as branch office of TWS. When the branch office was opened, it was

run by appellant Sevilla payable to TWS by any airline for any fare brought in

on the efforts of Mrs. Sevilla, 4% was to go to Sevilla and 3% was to be

withheld by the TWS. Later, TWS was informed that Sevilla was connected

with rival firm, and since the branch office was losing, TWS considered

closing down its office. On January 3, 1962, the contract with appellee for the

use of the branch office premises was terminated and while the effectivity

thereof was January 31, 1962, the appellees no longer used it. Because of

this, Canilao, the secretary of TWS, went over to the branch office, and

finding the premises locked, he padlocked the premises. When neither

appellant Sevilla nor any of his employees could enter, a complaint was filed

by the appellants against the appellees. TWS insisted that Sevilla was a mere

employee, being the “branch manager” of its branch office and that she had

no say on the lease executed with the private respondent, Noguera.

ISSUE: W/N ER-EE relationship exists between Sevilla and TWS

HELD: The records show that petitioner, Sevilla, was not subject to control by

the private respondent TWS. In the first place, under the contract of lease,

she had bound herself in solidum as and for rental payments, an

arrangement that would belie claims of a master-servant relationship. That

does not make her an employee of TWS, since a true employee cannot be

made to part with his own money in pursuance of his employer’s business, or

otherwise, assume any liability thereof. In the second place, when the branch

office was opened, the same was run by the appellant Sevilla payable to TWS

by any airline for any fare brought in on the effort of Sevilla. Thus, it cannot

be said that Sevilla was under the control of TWS. Sevilla in pursuing the

business, relied on her own capabilities. It is further admitted that Sevilla was

not in the company’s payroll. For her efforts, she retained 4% in commissions

from airline bookings, the remaining 3% going to TWS. Unlike an employee,

who earns a fixed salary, she earned compensation in fluctuating amount

depending on her booking successes. The fact that Sevilla had been

designated “branch manager” does not make her a TWS employee. It

appears that Sevilla is a bona fide travel agent herself, and she acquired an

interest in the business entrusted to her. She also had assumed personal

obligation for the operation thereof, holding herself solidary liable for the

payment of rentals. Wherefore, TWS and Canilao are jointly and severally

liable to indemnify the petitioner, Sevilla.

Jardine Davis Inc. vs. CA Facts: Petitioner PURE FOODS CORPORATION decided to install two generators in its food processing plant in San Roque, Marikina City to recover from losses due to the series of power failures. Consequently, bidding for the supply and installation of the generators was held. Several suppliers and dealers were invited to attend a pre-bidding conference to discuss the conditions, propose scheme and specifications that would best suit the needs of PUREFOODS. Out of the eight (8) prospective bidders who attended the

pre-bidding conference, only three (3) bidders, namely, respondent FAR EAST MILLS SUPPLY CORPORATION (hereafter FEMSCO. FEMSCO started the PUREFOODS project and bought the necessary materials. However, PUREFOODS unilaterally canceled the award because significant factors were uncovered which dictates the cancellation and warrant a total review and re-bid of the said project. Consequently, FEMSCO protested the cancellation of the award and sought a meeting with PUREFOODS. However, on 26 March 1993, before the matter could be resolved, PUREFOODS already awarded the project and entered into a contract with JARDINE NELL, a division of Jardine Davies, Inc. which incidentally was not one of the bidders. FEMSCO sued PUREFOODS for reneging on its contract and JARDINE for its unwarranted interference and inducement.

Issues: Whether or not there existed a perfected contract between

PUREFOODS and FEMSCO.

And granting there existed a perfected contract, whether there is any

showing that JARDINE induced or connived with PUREFOODS to violate the

latter's contract with FEMSCO.

Held: The Supreme Court held that there was no issue as regards the subject

matter of the contract and the cause of the obligation. The controversy lies in

the consent — whether there was an acceptance of the offer, and if so, if it

was communicated, thereby perfecting the contract. Since petitioner

PUREFOODS started the process of entering into the contract by conducting

bidding, Art. 1326 of the Civil Code, which provides that advertisements for

bidders are simply invitations to make proposals applies. The Supreme Court

also re-stated the distinguishment between a condition imposed on the

perfection of a contract and a condition imposed merely on the performance

of an obligation. While failure to comply with the first condition results in the

failure of a contract, failure to comply with the second merely gives the other

party options and/or remedies to protect his interests.

G.R. No. 117495, May 29, 1997

(272 SCRA 793; 1997)

Nelly Acta Martinez, petitioner,

vs NLRC, etc. respondents.

Ponente: Bellosillo

Facts: Raul Martinez was an operator of two taxicab units under business

name PAMATX and another two units under business name TIGERTX. Private

respondents worked for him as drivers. When Martinez died, he left behind

his mother, Nelly Martinez as his sole heir.

July 1992, the drivers lodged complaint against Raul and Nelly before the

labor arbiter for violation of PD 851 and illegal dismissal. They alleged that

they have been regular drivers of Raul earning 400 a day, not once during

their employment that they received 13th month pay. When Nelly assumed

the management of the units, she informed the drivers that she will sell the

units for she can't manage it, but later did not proceed with her plan and

assigned the units to other drivers instead.

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Nelly traversed that the 13th month pay was personal to Raul and therefore

didn't survive the death of Raul. Nelly contend too that the drivers were not

entitled of the benefits of PD 851 because paid on purely boundary basis

which are not covered by PD 851, the relationship was not employer-

employee but that od lessee-lessor.

On 30 August 1993 the Labor Arbiter dismissed the complaint on the

following grounds: (a) private respondents' claims being personal were

extinguished upon the death of Raul Martinez; (b) petitioner was a mere

housewife who did not possess the required competence to manage the

business; and, (c) private respondents were not entitled to 13th month

pay because the existence of employer-employee relationship was doubtful

on account of the boundary system adopted by the parties.

However, respondent National Labor Relations Commission viewed the case

differently. According to NLRC, (a) private respondents were regular drivers

because payment of wages, which is one of the essential requisites for the

existence of employment relation, may either be fixed, on commission,

boundary, piece-rate or task basis; (b) the management of the business

passed on to petitioner who even replaced private respondents with a new

set of drivers; and, (c) the claims of private respondents survived the death

of Raul Martinez considering that the business did not cease operation

outright but continued presumably, in the absence of proof of sale, up to the

moment.

On 28 January 1994 respondent NLRC thus set aside the appealed decision,

and as alternative to reinstatement, ordered petitioner to grant respondents

separation pay equivalent to one (1) month salary for every year of service a

fraction of six (6) months being considered as one (1) whole year. On 30

September 1994 the motion for reconsideration was denied. Hence, this

recourse of petitioner.

ISSUE:

Ruling: The claim for 13th month pay pertains to the personal obligation of

Raul Martinez which did not survive his death. The rule is settled that unless

expressly assumed, labor contracts are not enforceable against the

transferee of an enterprise. In the present case, petitioner does not only

disavow that she continued the operation of the business of her son but also

disputes the existence of labor contracts between her son and private

respondents.

The reason for the rule is that labor contracts are in personam, and that

claims for backwages earned from the former employer cannot be filed

against the new owners of an enterprise. Nor is the new operator of a

business liable for claims for retirement pay of employees. Thus the claim of

private respondents should have been filed instead in the intestate

proceedings involving the estate of Raul Martinez in accordance with Sec. 5,

Rule 86, of the Rules of Court.

In National Labor Union v. Dinglasan,[9] this Court ruled that the relationship

between jeepney owners/operators on one hand and jeepney drivers on the

other under the boundary system is that of employer-employee and not of

lessor-lessee.

In the present case, however, private respondents simply assumed the

continuance of an employer-employee relationship between them and

petitioner, when she took over the operation of the business after the

death of her son Raul Martinez, without any supporting evidence.

Consequently, we cannot sustain for lack of basis the factual finding of

respondent NLRC on the existence of employer-employee relationship

between petitioner and private respondents. Clearly, such finding emanates

from grave abuse of discretion. With this conclusion, consideration of the

issue on illegal dismissal becomes futile and irrelevant.

WHEREFORE, the petition is GRANTED. The Decision of respondent National

Labor Relations Commission dated 28 January 1994 ordering petitioner Nelly

Acta Martinez to grant respondents separation pay as well as its Order of 30

September 1994 denying reconsideration is SET ASIDE. The Decision of the

Labor Arbiter dated 30 August 1993 dismissing the complaint is REINSTATED.

ISABELO DOCE, petitioner, vs. WORKMEN'S COMPENSATION COMMISSION

and DADO JADAO, respondents.

G.R. No. L-9417 | 1958-12-22 FULLTEXT

D E C I S I O N

BAUTISTA ANGELO, J.:

Dado Jadao filed with the Workmen's Compensation Commission a claim for

compensation against Isabelo Doce for injuries he suffered in an accident

that occurred on June 11, 1953 in the City of Manila while working as a

conductor of a bus belonging to the latter under a boundary system. Doce

interposed the defense that there was no employer-employee relationship

between him and Jadao and hence the Commission has no jurisdiction to act

on the claim.

The claim was assigned to a referee for hearing who, after receiving the

evidence, rendered decision holding that a conductor who works under the

boundary system in the operation of the bus of another is considered an

employee of the latter within the meaning of the law and as such Doce is

responsible to pay to Jadao the compensation prescribed in the Workmen's

Compensation Act. Consequently, the referee ordered Doce to pay Jadao a

compensation of P757.43, plus the cost of the medical and surgical expenses

incurred by the latter, and to pay the Commission the amount of P8.00 as

fees in accordance with the law. This decision was affirmed by the

Commission on July 2, 1955. Doce interposed the present petition for

review.

The facts as found by the Commission are: Dado Jadao was a conductor of

Bus No. 9 of the B-Twelve Liner owned and operated by Isabelo Doce who

was paid under the boundary system. His average daily earnings as

conductor was P4.00, working five days a week. On June 11, 1953, while

acting as such conductor, Jadao was pinned by two buses on Quezon

Boulevard, Manila, suffering injuries on the right leg, head and left ear. He

was treated in the North General Hospital and in the National Orthopedic

Hospital, and as a result he suffered temporary total disability from June 11,

1953 to May 10, 1954 and a partial loss of the use of his right leg.

It was also proven that under the boundary system adopted by petitioner

and respondent, the driver and conductor of the bus gave to the owner a

fixed amount out of the daily earnings derived from its operation. In this

case, the conductor and the driver used to give to respondent P15.00 daily.

The owner supplied the gasoline at the beginning but its cost is later

reimbursed out of the earnings of the day. After deducting the cost of the

gasoline and the rental of P15.00, the remainder is divided between the

conductor and the driver.

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The issue to be determined is whether the employer-employee relationship

existed between the owner of the bus and the conductor considering that

the latter worked under a boundary system as explained above and is not

paid directly by the former.

This case falls squarely within our ruling in National Labor Union vs.

Dinglasan, 52 Off. Gaz., No. 4,1933, wherein this Court held that a driver of a

jeep who operates the same under the boundary system is considered an

employee within the meaning of the law and as such the case comes under

the jurisdiction of the Court of Industrial Relations. In that case, Benedicto

Dinglasan was the owner and operator of TPU jeepneys which were driven by

petitioners under verbal contracts that they will pay P7.50 for 10 hours use

under the so- called "boundary system." The drivers did not receive salaries

or wages from the owner. Their day's earnings were the excess over the

P7.50 they paid for the use of the jeepneys. In the event that they did not

earn more, the owner did not have to pay them anything. In holding that the

employer-employee relationship existed between the owner of the jeepneys

and the drivers even if the latter worked under the boundary system, this

Court said:

"The only features that would make the relationship of lessor and lessee

between the respondent, owner of the jeeps, and the drivers, members of

the petitioner union, are the fact that he does not pay them any fixed wage

but their compensation is the excess of the total amount of fares earned or

collected by them over and above the amount of P7.50 which they agreed to

pay to the respondent, and the fact that the gasoline burned by the jeeps is

for the account of the drivers. These two features are not, however,

sufficient to withdraw the relationship between them from that of employer-

employee, because the estimated earnings for fares must be over and above

the amount they agreed to pay to the respondent for a ten-hour shift or ten-

hour a day operation of the jeeps. Not having any interest in the business

because they did not invest anything in the acquisition of the jeeps and did

not participate in the management thereof, their service as drivers of the

jeeps being their only contribution to the business, the relationship of lessor

and lessee cannot be sustained."

The contention of petitioner that the relation that existed between him and

the respondent is only one of lessor and lessee cannot therefore be

sustained.

Wherefore, the decision appealed from is affirmed, with costs against

petitioner.

Paras, C.J., Bengzon, Padilla, Labrador, Concepcion, Reyes, J.B.L. and

Endencia, JJ., concur.

Corporal vs NLRC ( GR 129315; 10/2/2000)

FULLTEXT

This special civil action for certiorari seeks the review of the Resolution dated

October 17, 1996 of public respondent National Labor Relations Commission

(First Division),[1] in NLRC NCR Case No. 00-04-03163-95, and the Resolution

dated March 5, 1997 denying the motion for reconsideration. The aforecited

October 17th Resolution affirmed the Decision dated September 28, 1996 of

Labor Arbiter Potenciano S. Cañizares dismissing the petitioners' complaint

for illegal dismissal and declaring that petitioners are not regular employees

of private respondent Lao Enteng Company, Inc..

The records of the case show that the five male petitioners, namely, Osias I.

Corporal, Sr., Pedro Tolentino, Manuel Caparas, Elpidio Lacap, and Simplicio

Pedelos worked as barbers, while the two female petitioners, Teresita Flores

and Patricia Nas worked as manicurists in New Look Barber Shop located at

651 P. Paterno Street, Quiapo, Manila owned by private respondent Lao

Enteng Co. Inc.. Petitioner Nas alleged that she also worked as watcher and

marketer of private respondent.

Petitioners claim that at the start of their employment with the New Look

Barber Shop, it was a single proprietorship owned and managed by Mr.

Vicente Lao. In or about January 1982, the children of Vicente Lao organized

a corporation which was registered with the Securities and Exchange

Commission as Lao Enteng Co. Inc. with Trinidad Ong as President of the said

corporation. Upon its incorporation, the respondent company took over the

assets, equipment, and properties of the New Look Barber Shop and

continued the business. All the petitioners were allowed to continue working

with the new company until April 15, 1995 when respondent Trinidad Ong

informed them that the building wherein the New Look Barber Shop was

located had been sold and that their services were no longer needed.[2]

On April 28, 1995, petitioners filed with the Arbitration Branch of the NLRC, a

complaint for illegal dismissal, illegal deduction, separation pay, non-

payment of 13th month pay, and salary differentials. Only petitioner Nas

asked for payment of salary differentials as she alleged that she was paid a

daily wage of P25.00 throughout her period of employment. The petitioners

also sought the refund of the P1.00 that the respondent company collected

from each of them daily as salary of the sweeper of the barber shop.

Private respondent in its position paper averred that the petitioners were

joint venture partners and were receiving fifty percent commission of the

amount charged to customers. Thus, there was no employer-employee

relationship between them and petitioners. And assuming arguendo, that

there was an employer-employee relationship, still petitioners are not

entitled to separation pay because the cessation of operations of the barber

shop was due to serious business losses.

Respondent Trinidad Lao Ong, President of respondent Lao Enteng Co. Inc.,

specifically stated in her affidavit dated September 06, 1995 that Lao Enteng

Company, Inc. did not take over the management of the New Look Barber

Shop, that after the death Lao Enteng petitioner were verbally informed time

and again that the partnership may fold up anytime because nobody in the

family had the time to be at the barber shop to look after their interest; that

New Look Barber Shop had always been a joint venture partnership and the

operation and management of the barber shop was left entirely to

petitioners; that her father's contribution to the joint venture included the

place of business, payment for utilities including electricity, water, etc. while

petitioners as industrial partners, supplied the labor; and that the barber

shop was allowed to remain open up to April 1995 by the children because

they wanted to give the partners a chance at making it work. Eventually, they

were forced to close the barber shop because they continued to lose money

while petitioners earned from it. Trinidad also added that private

respondents had no control over petitioners who were free to come and go

as they wished. Admittedly too by petitioners they received fifty percent to

sixty percent of the gross paid by customers. Trinidad explained that some of

the petitioners were allowed to register with the Social Security System as

employees of Lao Enteng Company, Inc. only as an act of accommodation. All

the SSS contributions were made by petitioners. Moreover, Osias Corporal,

Elpidio Lacap and Teresita Flores were not among those registered with the

Social Security System. Lastly, Trinidad avers that without any employee-

employer relationship petitioners claim for 13th month pay and separation

pay have no basis in fact and in law.[3]

In a Decision dated September 28, 1995, Labor Arbiter Potenciano S.

Cañizares, Jr. ordered the dismissal of the complaint on the basis of his

findings that the complainants and the respondents were engaged in a joint

venture and that there existed no employer-employee relation between

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them. The Labor Arbiter also found that the barber shop was closed due to

serious business losses or financial reverses and consequently declared that

the law does not compel the establishment to pay separation pay to whoever

were its employees.[4]

On appeal, NLRC affirmed the said findings of the Labor Arbiter and

dismissed the complaint for want of merit, ratiocinating thus:

Indeed, complainants failed to show the existence of employer-employee

relationship under the fourway test established by the Supreme Court. It is a

common practice in the Barber Shop industry that barbers supply their own

scissors and razors and they split their earnings with the owner of the barber

shop. The only capital of the owner is the place of work whereas the barbers

provide the skill and expertise in servicing customers. The only control

exercised by the owner of the barber shop is to ascertain the number of

customers serviced by the barber in order to determine the sharing of

profits. The barbers maybe characterized as independent contractors

because they are under the control of the barber shop owner only with

respect to the result of the work, but not with respect to the details or

manner of performance. The barbers are engaged in an independent calling

requiring special skills available to the public at large.[5]

Its motion for reconsideration denied in the Resolution[6] dated March 5,

1997, petitioners filed the instant petition assigning that the NLRC

committed grave abuse of discretion in:

I. ARBITRARILY DISREGARDING SUBSTANTIAL EVIDENCE PROVING THAT

PETITIONERS WERE EMPLOYEES OF RESPONDENT COMPANY IN RULING

THAT PETITIONERS WERE INDEPENDENT CONTRACTORS.

II. NOT HOLDING THAT PETITIONERS WERE ILLEGALLY DISMISSED AND IN

NOT AWARDING THEIR MONEY CLAIMS.[7]

Petitioners principally argue that public respondent NLRC gravely erred in

declaring that the petitioners were independent contractors. They contend

that they were employees of the respondent company and cannot be

considered as independent contractors because they did not carry on an

independent business. They did not cut hair, manicure, and do their work in

their own manner and method. They insist they were not free from the

control and direction of private respondents in all matters, and their services

were engaged by the respondent company to attend to its customers in its

barber shop. Petitioners also stated that, individually or collectively, they do

not have substantial capital nor investments in tools, equipments, work

premises and other materials necessary in the conduct of the barber shop.

What the barbers owned were merely combs, scissors, and razors, while the

manicurists owned only nail cutters, nail polishes, nippers and cuticle

removers. By no standard can these be considered "substantial capital"

necessary to operate a barbers shop.

Finally, petitioners fault the NLRC for arbitrarily disregarding substantial

evidence on record showing that petitioners Pedro Tolentino, Manuel

Caparas, Simplicio Pedelos, and Patricia Nas were registered with the Social

Security System as regular employees of the respondent company. The SSS

employment records in common show that the employer's ID No. of Vicente

Lao/Barber and Pawn Shop was 03-0606200-1 and that of the respondent

company was 03-8740074-7. All the foregoing entries in the SSS employment

records were painstakingly detailed by the petitioners in their position paper

and in their memorandum appeal but were arbitrarily ignored first by the

Labor Arbiter and then by the respondent NLRC which did not even mention

said employment records in its questioned decision.

We found petition is impressed with merit.

In our view, this case is an exception to the general rule that findings of facts

of the NLRC are to be accorded respect and finality on appeal. We have long

settled that this Court will not uphold erroneous conclusions unsupported by

substantial evidence.[8] We must also stress that where the findings of the

NLRC contradict those of the labor arbiter, the Court, in the exercise of its

equity jurisdiction, may look into the records of the case and reexamine the

questioned findings.[9]

The issues raised by petitioners boil down to whether or not an employer-

employee relationship existed between petitioners and private respondent

Lao Enteng Company, Inc. The Labor Arbiter has concluded that the

petitioners and respondent company were engaged in a joint venture. The

NLRC concluded that the petitioners were independent contractors.

The Labor Arbiter's findings that the parties were engaged in a joint venture

is unsupported by any documentary evidence. It should be noted that aside

from the self-serving affidavit of Trinidad Lao Ong, there were no other

evidentiary documents, nor written partnership agreements presented. We

have ruled that even the sharing of proceeds for every job of petitioners in

the barber shop does not mean they were not employees of the respondent

company.[10]

Petitioner aver that NLRC was wrong when it concluded that petitioners were

independent contractors simply because they supplied their own working

implements, shared in the earnings of the barber shop with the owner and

chose the manner of performing their work. They stressed that as far as the

result of their work was concerned the barber shop owner controlled them.

An independent contractor is one who undertakes "job contracting", i.e., a

person who (a) carries on an independent business and undertakes the

contract work on his own account under his own responsibility according to

his own manner and method, free from the control and direction of his

employer or principal in all matters connected with the performance of the

work except as to the results thereof, and (b) has substantial capital or

investment in the form of tools, equipment, machineries, work premises, and

other materials which are necessary in the conduct of the business.[11]

Juxtaposing this provision vis-á -vis the facts of this case, we are convinced

that petitioners are not "independent contractors". They did not carry on an

independent business. Neither did they undertake cutting hair and

manicuring nails, on their own as their responsibility, and in their own

manner and method. The services of the petitioners were engaged by the

respondent company to attend to the needs of its customers in its barber

shop. More importantly, the petitioners, individually or collectively, did not

have a substantial capital or investment in the form of tools, equipment,

work premises and other materials which are necessary in the conduct of the

business of the respondent company. What the petitioners owned were only

combs, scissors, razors, nail cutters, nail polishes, the nippers - nothing else.

By no standard can these be considered substantial capital necessary to

operate a barber shop. From the records, it can be gleaned that petitioners

were not given work assignments in any place other than at the work

premises of the New Look Barber Shop owned by the respondent company.

Also, petitioners were required to observe rules and regulations of the

respondent company pertaining, among other things, observance of daily

attendance, job performance, and regularity of job output. The nature of

work performed by were clearly directly related to private respondent's

business of operating barber shops. Respondent company did not dispute

that it owned and operated three (3) barber shops. Hence, petitioners were

not independent contractors.

Did an employee-employer relationship exist between petitioners and

private respondent? The following elements must be present for an

employer-employee relationship to exist: (1) the selection and engagement

of the workers; (2) power of dismissal; (3) the payment of wages by whatever

means; and (4) the power to control the worker's conduct, with the latter

assuming primacy in the overall consideration. Records of the case show that

the late Vicente Lao engaged the services of the petitioners to work as

barbers and manicurists in the New Look Barber Shop, then a single

proprietorship owned by him; that in January 1982, his children organized a

corporation which they registered with the Securities and Exchange

Commission as Lao Enteng Company, Inc.; that upon its incorporation, it took

over the assets, equipment, and properties of the New Look Barber Shop and

continued the business; that the respondent company retained the services

of all the petitioners and continuously paid their wages. Clearly, all three

elements exist in petitioners' and private respondent's working

arrangements.

LABOR LAW 1 CASE DIGESTS BATCH 4

Page 6 of 12

Private respondent claims it had no control over petitioners. The power to

control refers to the existence of the power and not necessarily to the actual

exercise thereof, nor is it essential for the employer to actually supervise the

performance of duties of the employee. It is enough that the employer has

the right to wield that power.[12] As to the "control test", the following facts

indubitably reveal that respondent company wielded control over the work

performance of petitioners, in that: (1) they worked in the barber shop

owned and operated by the respondents; (2) they were required to report

daily and observe definite hours of work; (3) they were not free to accept

other employment elsewhere but devoted their full time working in the New

Look Barber Shop for all the fifteen (15) years they have worked until April

15, 1995; (4) that some have worked with respondents as early as in the

1960's; (5) that petitioner Patricia Nas was instructed by the respondents to

watch the other six (6) petitioners in their daily task. Certainly, respondent

company was clothed with the power to dismiss any or all of them for just

and valid cause. Petitioners were unarguably performing work necessary and

desirable in the business of the respondent company.

While it is no longer true that membership to SSS is predicated on the

existence of an employee-employer relationship since the policy is now to

encourage even the self-employed dressmakers, manicurists and jeepney

drivers to become SSS members, we could not agree with private

respondents that petitioners were registered with the Social Security System

as their employees only as an accommodation. As we have earlier mentioned

private respondent showed no proof to their claim that petitioners were the

ones who solely paid all SSS contributions. It is unlikely that respondents

would report certain persons as their workers, pay their SSS premium as well

as their wages if it were not true that they were indeed their employees.[13]

Finally, we agree with the labor arbiter that there was sufficient evidence

that the barber shop was closed due to serious business losses and

respondent company closed its barber shop because the building where the

barber shop was located was sold. An employer may adopt policies or

changes or adjustments in its operations to insure profit to itself or protect

investment of its stockholders. In the exercise of such management

prerogative, the employer may merge or consolidate its business with

another, or sell or dispose all or substantially all of its assets and properties

which may bring about the dismissal or termination of its employees in the

process.[14]

Prescinding from the above, we hold that the seven petitioners are

employees of the private respondent company; as such, they are to be

accorded the benefits provided under the Labor Code, specifically Article 283

which mandates the grant of separation pay in case of closure or cessation of

employer's business which is equivalent to one (1) month pay for every year

of service.[15] Likewise, they are entitled to the protection of minimum wage

statutes. Hence, the separation pay due them may be computed on the basis

of the minimum wage prevailing at the time their services were terminated

by the respondent company. The same is true with respect to the 13th

month pay. The Revised Guidelines on the Implementation of the 13th

Month Pay Law states that all rank and file employees are now entitled to a

13th month pay regardless of the amount of basic salary that they receive in

a month. Such employees are entitled to the benefit regardless of their

designation or employment status, and irrespective of the method by which

their wages are paid, provided that they have worked for at least one (1)

month during a calendar year and so all the seven (7) petitioners who were

not paid their 13th month pay must be paid accordingly.[16]

Anent the other claims of the petitioners, such as the P10,000.00 as penalty

for non-compliance with procedural process; P10,000.00 as moral damages;

refund of P1.00 per day paid to the sweeper; salary differentials for

petitioner Nas; attorney's fees), we find them without basis.

IN VIEW WHEREOF, the petition is GRANTED. The public respondent's

Decision dated October 17, 1996 and Resolution dated March 05, 1997 are

SET ASIDE. Private respondents are hereby ordered to pay, severally and

jointly, the seven (7) petitioners their (1) 13th month pay and (2) separation

pay equivalent to one month pay for every year of service, to be computed at

the then prevailing minimum wage at the time of their actual termination

which was April 15, 1995.

Costs against private respondents.

SO ORDERED. Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ.,

concur.

CITIZENS LEAGUE OF FREEWORKERS AND/OR BALBINO EPIS, NICOLAS

ROJO, ET AL., petitioners, vs. HON. MACAPANTON ABBAS, Judge of the

Court of First Instance of Davao and TEOFILO GERONIMO and EMERITA

MENDEZ, respondents.

FULLTEXT

G.R. No. L-21212 | 1966-09-23

D E C I S I O N

DIZON, J.:

Petition for certiorari with a prayer for the issuance of a writ of preliminary

injunction filed by the Citizens' League of Freeworkers, a legitimate labor

organization, - hereinafter referred to as the Union - and its members against

the spouses Teofilo Geronimo and Emerita Mendez, and the Hon.

Macapanton Abbas, as judge of the Court of First Instance of Davao. Its

purpose is to set aside the writ of preliminary injunction issued by the latter

in Civil Case No. 3966 and restrain him from proceeding with the case, on the

ground that the controversy involves a labor dispute and is, therefore, within

the exclusive jurisdiction of the Court of Industrial Relations.

It appears that on March 11, 1963, respondents-spouses, owners and

operators of auto-calesas in Davao City, filed a complaint with the Court of

First Instance of Davao (Civil Case No. 3966) to restrain the Union and its

members, who were drivers of the spouses in said business, from interfering

with its operation, from committing certain acts complained of in connection

therewith, and to recover damages. The complaint alleged that the

defendants named therein used to lease the auto calesas of the spouses on a

daily rental basis; that, unable to get the spouses to recognize said

defendants as employees instead of lessees and to bargain with it on that

basis, the Union declared a strike on February 20, 1963 and since then had

paralyzed plaintiffs' business operations through threats, intimidation and

violence. The complaint also prayed for the issuance of a writ of preliminary

injunction ex-parte restraining defendants therein from committing said acts

of violence and intimidation during the pendency of the case.

On March 11, 1963 the respondent judge granted the writ prayed for, while

deferring action on petitioners' motion to dissolve said writ to March 20 of

the same year.

Meanwhile, on March 12, 1963, petitioners filed a complaint for unfair labor

practice against the respondents-spouses with the Court of Industrial

Relations on the ground, among others, of the latter's refusal to bargain with

them.

On March 18, 1963, petitioners filed a motion to declare the writ of

preliminary injunction void on the ground that the same had expired by

virtue of Section 9 (d) of Republic Act 875. In his order of March 21, 1963,

however, the respondent judge denied said motion on the ground that there

was no employer-employee relationship between respondents-spouses and

the individual petitioners herein and that, consequently, the Rules of Court

and not Republic Act No. 875 applied to the matter of injunction. Thereupon

the petition under consideration was filed.

In the case of Isabelo Doce vs. Workmen's Compensation Commission et al.

(104 Phil., 946), upon a similar if not an altogether identical set of facts, We

held:

"This case falls squarely within our ruling in National Labor Union vs. Dinglasan, 98 Phil., 649; 52 Off. Gaz., No. 4, 1933, wherein this Court held that a driver of a jeep who operates the same under the boundary system is considered an employee within the meaning of the law and as such the case comes under the jurisdiction of the Court of Industrial Relations. In that case, Benedicto Dinglasan was the owner and operator of TPU jeepneys which

LABOR LAW 1 CASE DIGESTS BATCH 4

Page 7 of 12

were driven by petitioner under verbal contracts that they will pay P7.50 for 10 hours use under the so-called 'boundary system.' The drivers did not receive salaries or wages from the owner. Their day's earnings were the excess over the P7.50 they paid for the use of the jeepneys. In the event that they did not earn more, the owner did not have to pay them anything. In holding that the employer-employee relationship existed between the owner of the jeepneys and the drivers even if the latter worked under the boundary

system, this Court said:

'The only features that would make the relationship of lessor and lessee

between the respondents owner of the jeeps, and the drivers, members of

the petitioner union, are the fact that he does not pay them any fixed wage

but their compensation is the excess of the total amount of fares earned or

collected by them over and above the amount of P7.50 which they agreed to

pay to the respondent, and the fact that the gasoline burned by the jeeps is

for the account of the drivers. These two features are not, however,

sufficient to withdraw the relationship, between them from that of

employer-employee, because the estimated earnings for fares must be over

and above the amount they agreed to pay to the respondent for a ten-hour

shift or ten-hour a day operation of the jeeps. Not having any interest in the

business because they did not invest anything in the acquisition of the jeeps

and did not participate in the management thereof, their service as drivers of

the jeeps being their only contribution to the business, the relationship of

lessor and lessee cannot be sustained.'"

Even assuming, arguendo, that the respondent court had jurisdiction to issue

the abovementioned writ of preliminary injunction in Civil Case No. 3966 at

the time it was issued, We are of the opinion, and so hold, that it erred in

denying petitioners' motion to set aside said writ upon expiration of the

period of thirty days from its issuance, upon the wrong ground that there

was no labor dispute between the parties and that, therefore, the provisions

of Republic Act No. 875 did not apply to the case. As stated heretofore, there

was a labor dispute between the parties from the beginning.

Moreover, upon the filing of the unfair labor practice case on March 12,

1963, the Court of Industrial Relations acquired complete jurisdiction over

the labor dispute and the least that could be done in Civil Case No. 3966 is

either to dismiss it or suspend proceedings therein until the final resolution

of the former.

WHEREFORE, judgment is hereby rendered setting aside the writ of

preliminary injunction issued by the respondent judge in Civil Case No. 3966

of the Court of First Instance of Davao, with costs.]

San Miguel Brewery UNION v. Ople (53515; 2/8/89)

FACTS: In 1979, SMC implemented its “Complementary Distribution System”

(CDS) whereby wholesalers can directly get beer products from any SMC

offices. The SMB Union assailed this program because it violates the

Collective Bargaining Agreement (CBA) particularly the established scheme

whereby route salesmen have been given specific territories to sell beer

products. The CDS scheme would then lower the take home pay of the route

salesmen. SMB Union then sued SMC for unfair labor practices.

ISSUE: Whether or not the CDS is a violation of the CBA.

HELD: No. The SC ruled that the CDS is an exercise of management

prerogatives whereby the management can implement schemes to optimize

their profit. Further, the CDS provides for a compensation clause as well for

salesmen. San Miguel Corporation’s offer to compensate the members of its

sales force who will be adversely affected by the implementation of the CDS

by paying them a so-called “back adjustment commission” to make up for

the commissions they might lose as a result of the CDS proves the company’s

good faith and lack of intention to bust their union.

FULLTEXT

G.R. No. L-53515 February 8, 1989

SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), petitioner,

vs.

HON. BLAS F. OPLE, as Minister of Labor and SAN MIGUEL

CORPORATION, respondents.

Lorenzo F. Miravite for petitioner.

Isidro D. Amoroso for New San Miguel Corp. Sales Force Union.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

D E C I S I O N

GRIÑO-AQUINO, J.:

This is a petition for review of the Order dated February 28, 1980 of the

Minister of Labor in Labor Case No. AJML-069-79, approving the private

respondent’s marketing scheme, known as the “Complementary Distribution

System” (CDS) and dismissing the petitioner labor union’s complaint for

unfair labor practice.

On April 17, 1978, a collective bargaining agreement (effective on May 1,

1978 until January 31, 1981) was entered into by petitioner San Miguel

Corporation Sales Force Union (PTGWO), and the private respondent, San

Miguel Corporation, Section 1, of Article IV of which provided as follows:

Art. IV, Section 1. Employees within the appropriate bargaining unit shall be

entitled to a basic monthly compensation plus commission based on their

respective sales.

In September 1979, the company introduced a marketing scheme known as

the “Complementary Distribution System” (CDS) whereby its beer products

were offered for sale directly to wholesalers through San Miguel’s sales

offices.

The labor union (herein petitioner) filed a complaint for unfair labor practice

in the Ministry of Labor, with a notice of strike on the ground that the CDS

was contrary to the existing marketing scheme whereby the Route Salesmen

were assigned specific territories within which to sell their stocks of beer,

and wholesalers had to buy beer products from them, not from the

company. It was alleged that the new marketing scheme violates Section 1,

Article IV of the collective bargaining agreement because the introduction of

the CDS would reduce the take-home pay of the salesmen and their truck

helpers for the company would be unfairly competing with them.

The complaint filed by the petitioner against the respondent company raised

two issues: (1) whether the CDS violates the collective bargaining agreement,

and (2) whether it is an indirect way of busting the union.

In its order of February 28, 1980, the Minister of Labor found:

… We see nothing in the record as to suggest that the unilateral action of the

employer in inaugurating the new sales scheme was designed to discourage

union organization or diminish its influence, but rather it is undisputable that

the establishment of such scheme was part of its overall plan to improve

efficiency and economy and at the same time gain profit to the highest.

While it may be admitted that the introduction of new sales plan somewhat

disturbed the present set-up, the change however was too insignificant as to

convince this Office to interpret that the innovation interfered with the

worker’s right to self-organization.

Petitioner’s conjecture that the new plan will sow dissatisfaction from its

ranks is already a prejudgment of the plan’s viability and effectiveness. It is

like saying that the plan will not work out to the workers’ *benefit+ and

therefore management must adopt a new system of marketing. But what the

petitioner failed to consider is the fact that corollary to the adoption of the

assailed marketing technique is the effort of the company to compensate

whatever loss the workers may suffer because of the new plan over and

LABOR LAW 1 CASE DIGESTS BATCH 4

Page 8 of 12

above than what has been provided in the collective bargaining agreement.

To us, this is one indication that the action of the management is devoid of

any anti-union hues.

The dispositive part of the Minister’s Order reads:

WHEREFORE, premises considered, the notice of strike filed by the

petitioner, San Miguel Brewery Sales Force Union-PTGWO is hereby

dismissed. Management however is hereby ordered to pay an additional

three (3) months back adjustment commissions over and above the adjusted

commission under the complementary distribution system.

The petition has no merit.

Public respondent was correct in holding that the CDS is a valid exercise of

management prerogatives:

Except as limited by special laws, an employer is free to regulate, according

to his own discretion and judgment, all aspects of employment, including

hiring, work assignments, working methods, time, place and manner of work,

tools to be used, processes to be followed, supervision of workers, working

regulations, transfer of employees, work supervision, lay-off of workers and

the discipline, dismissal and recall of work. … (NLU vs. Insular La Yebana Co.,

2 SCRA 924; Republic Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V.

Hernandez, Labor Relations Law, 1985 Ed., p. 44.)

Every business enterprise endeavors to increase its profits. In the process, it

may adopt or devise means designed towards that goal. In Abbott

Laboratories vs. NLRC, 154 SCRA 713, We ruled:

… Even as the law is solicitous of the welfare of the employees, it must also

protect the right of an employer to exercise what are clearly management

prerogatives. The free will of management to conduct its own business

affairs to achieve its purpose cannot be denied.

So long as a company’s management prerogatives are exercised in good faith

for the advancement of the employer’s interest and not for the purpose of

defeating or circumventing the rights of the employees under special laws or

under valid agreements, this Court will uphold them (LVN Pictures Workers

vs. LVN, 35 SCRA 147; Phil. American Embroideries vs. Embroidery and

Garment Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18 SCRA 110).

San Miguel Corporation’s offer to compensate the members of its sales force

who will be adversely affected by the implementation of the CDS by paying

them a so-called “back adjustment commission” to make up for the

commissions they might lose as a result of the CDS proves the company’s

good faith and lack of intention to bust their union.

WHEREFORE, the petition for certiorari is dismissed for lack of merit.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

Intl school alliance v. Quisumbing (128845; 6/1/2000)

Facts:

The ISM, under Presidential Decree 732, is a domestic educational institution

established primarily for dependents of foreign diplomatic personnel and

other temporary residents.

The local-hires union of the ISM were crying foul over the disparity in wages

that they got compared to that of their foreign teaching counterparts.

These questions are asked to qualify a teacher into a local or foreign hire.

a.....What is one's domicile?

b.....Where is one's home economy?

c.....To which country does one owe economic allegiance?

d.....Was the individual hired abroad specifically to work in the School and

was the School responsible for bringing that individual to the Philippines?

Should any answer point to Philippines, the person is a local hire. The School

grants foreign-hires certain benefits to the foreign hires such as housing,

transportation, and 25% more pay than locals under the theory of (a) the

"dislocation factor" and (b) limited tenure. The first was grounded on leaving

his home country, the second was on the lack of tenure when he returns

home.

The negotiations between the school and the union caused a deadlock

between the parties.

The DOLE resolved in favor of the school, while Dole Secretary Quisimbing

denied the union’s mfr.

He said, “The Union cannot also invoke the equal protection clause to justify

its claim of parity. It is an established principle of constitutional law that the

guarantee of equal protection of the laws is not violated by legislation or

private covenants based on reasonable classification. A classification is

reasonable if it is based on substantial distinctions and apply to all members

of the same class. Verily, there is a substantial distinction between foreign

hires and local hires, the former enjoying only a limited tenure, having no

amenities of their own in the Philippines and have to be given a good

compensation package in order to attract them to join the teaching faculty of

the School.”

The union appealed to the Supreme Court.

The petitioner called the hiring system discriminatory and racist.

The school alleged that some local hires were in fact of foreign origin. They

were paid localsalaries.

Issue:

Whether or not the hiring system is violative of the equal protection clause

Held: Yes, Petition granted

Ratio:

Public policy abhors discrimination. The Article on Social Justice and Human

Rights exhorts Congress to "give highest priority to the enactment of

measures that protect and enhance the right of all people to human

dignity…”

The very broad Article 19 of the Civil Code requires every person, "in the

exercise of his rights and in the performance of his duties, [to] act with

justice, give everyone his due, and observe honesty and good faith."

International law prohibits discrimination, such as the Universal Declaration

of Human Rights and the International Covenant on Economic, Social, and

Cultural Rights. The latter promises “Fair wages and equal remuneration for

work of equal value without distinction of any kind.”

In the workplace, where the relations between capital and labor are often

skewed in favor of capital, inequality and discrimination by the employer are

all the more reprehensible.

The Constitution also directs the State to promote "equality of employment

opportunities for all." Similarly, the Labor Code provides that the State shall

"ensure equal work opportunities regardless of sex, race or creed. Article 248

declares it an unfair labor practice for an employer to discriminate in regard

to wages in order to encourage or discourage membership in any labor

organization.

In this jurisdiction, there is the term “equal pay for equal work”, pertaining to

persons being paid with equal salaries and have similar skills and similar

LABOR LAW 1 CASE DIGESTS BATCH 4

Page 9 of 12

conditions. There was no evidence here that foreign-hires perform 25% more

efficiently or effectively than the local-hires.

The State, therefore, has the right and duty to regulate the relations

between labor and capital. These relations are not merely contractual but

are so impressed with public interest that labor contracts, collective

bargaining agreements included, must yield to the common good.[

For the same reason, the "dislocation factor" and the foreign-hires' limited

tenure also cannot serve as valid bases for the distinction in salary rates. The

dislocation factor and limited tenure affecting foreign-hires are adequately

compensated by certain benefits accorded them which are not enjoyed by

local-hires, such as housing, transportation, shipping costs, taxes and home

leave travel allowances.

In this case, we find the point-of-hire classification employed by respondent

School to justify the distinction in the salary rates of foreign-hires and local

hires to be an invalid classification. There is no reasonable distinction

between the services rendered by foreign-hires and local-hires.

Obiter:

However, foreign-hires do not belong to the same bargaining unit as the

local-hires. It does not appear that foreign-hires have indicated their

intention to be grouped together with local-hires for purposes of collective

bargaining. The collective bargaining history in the School also shows that

these groups were always treated separately. The housing and other benefits

accorded foreign hires were not given to local hires, thereby such admixture

will nbot assure any group the power to exercise bargaining rights.

The factors in determining the appropriate collective bargaining unit are (1)

the will of the employees (Globe Doctrine); (2) affinity and unity of the

employees' interest, such as substantial similarity of work and duties, or

similarity of compensation and working conditions (Substantial Mutual

Interests Rule); (3) prior collective bargaining history; and (4) similarity

of employment status.

AKELCO v. NLRC

G.R. 121439 Date January 25, 2000 Petitioners AKLAN ELECTRIC COOPERATIVE INCORPORATED NLRC, RODOLFO M. RETISO and 165 OTHERS, Respondents Summary Workers did not want to transfer to Kalibo Aklan to work. They defied Gen manager’s resolution and still worked in main office. No salaries from that time pursuant to no work, no pay. Facts

("These are consolidated cases/claims for nonpayment of salaries and wages, 13th month pay, ECOLA and other fringe benefits as rice, medical and clothing allowances, submitted by complainant Rodolfo M. Retiso and 163 others, Lyn E. Banilla and Wilson B. Sallador against respondents AKELCO, Atty. Leovigildo Mationg in his capacity as General Manager; ManuelCalizo, in his capacity as Acting Board President, Board of Directors, AKELCO.)

Prior to the temporary transfer of the office of AKELCO from Lezo Aklan to Amon Theater, Kalibo, Aklan, complainants were continuously performing their task and were duly paid of their salaries at their main office at Lezo

January 22, 1992: A resolution of the Board of Directors of AKELCO

allowed the temporary transfer holding of office at Amon Theater, Kalibo, Aklan per information by their Project Supervisor, Atty. Leovigildo Mationg, that their head office is closed and that it is dangerous to hold office there.

Despite the resolution, a majority of the employees including herein complainants continued to report for work at Lezo Aklan and were paid of their salaries.

February 11, 1992: An unnumbered resolution was passed by the Board of AKELCO withdrawing the temporary designation of office at Kalibo,

Aklan, and that the daily operations must be held again at the main office of Lezo

Respondents who were reporting at the Lezo office from January 1992 up to May 1992 were duly paid of their salaries, while in the meantime some of the employees through the instigation of Mationg continued to remain and work at Kalibo, Aklan;

That from June 1992 up to March 18, 1993, complainants who

continuously reported for work at Lezo, Aklan in compliance with the aforementioned resolution were not paid their salaries

The justification of the non-payment of salaries are as follows Respondents voluntarily abandoned their respective work/job

assignments, without any justifiable reason and without notifying the management

They defied the lawful orders and other issuances by the General Manager and the Board of Directors of the AKELCO.

They were requested to report to work at the Kalibo office but despite these lawful orders of the General Manager, the complainants did not follow and willfully and maliciously defied

said orders and issuance That they engaged in " . . . slowdown mass leaves, sit downs,

attempts to damage, destroy or sabotage plant equipment and facilities of the Aklan Electric Cooperative, Inc.

Akelco denies the claims of these complainants under the principle of "no work no pay" which is legally justified; That these complainants have "mass leave" from their customary work on June 1992 up to March 18, 1993

LA dismissed complaint of the workers. NLRC reversed and said that they are entitled to pay

Issue

WON NLRC committed Grave Abuse of Discretion (GAD) amounting to excess or want of jurisdiction when it reversed the findings of the Labor Arbiter that respondents they are NOT covered by the "no work, no pay "principle and are entitled to the claim for unpaid wages from June 16, 1992 to March 18, 1993.

Ruling We find cogent reason, as shown by the petitioner and the Solicitor General, not to affirm the factual findings of public respondent NLRC. We do not agree with the finding that private respondents had rendered services from June 16, 1992 to March 18, 1993 so as to entitle them to payment of wages. Public respondent based its conclusion on the following: (a) the letter dated April 7, 1993 of Pedrito L. Leyson, Office Manager of AKELCO addressed to AKELCO's General Manager, Atty. Leovigildo T.

Mationg, requesting for the payment of private respondents' unpaid wages from June 16, 1992 to March 18, 1993; (b) the memorandum of said Atty. Mationg dated 14 April 1993, in answer to the letter request of Pedrito Leyson where Atty. Mationg made an assurance that he will recommend such request; (c) the private respondents' own computation of their unpaid wages. We find that the foregoing does not constitute substantial evidence to support the conclusion that private respondents are entitled to the payment of wages from June 16, 1992 to March 18, 1993. Substantial evidence is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.14 [Rule 133, Section 5 of the Revised Rules of Court.] These evidences relied upon by public respondent did not establish the fact that private respondents actually rendered services

in the Kalibo office during the stated period. "The employer as owner of the business, also has inherent rights, among which are the right to select the persons to be hired and discharge them for just and valid cause; to promulgate and enforce reasonable employment rules and regulations and to modify, amend or revoke the same; to designate the work as well as the employee or employees to perform it; to transfer or promote employees; to schedule, direct, curtail or control company operations; to introduce or install new or improved labor or money savings methods, facilities or devices; to create, merge, divide, reclassify and abolish departments or positions in the company and to sell or close the business.

x x x Finally, we hold that public respondent erred in merely relying on the computations of compensable services submitted by private respondents. There must be competent proof such as time cards or office records to show that they actually rendered compensable service during the stated period to entitle them to wages. It has been established that the petitioner's business office was transferred to Kalibo and all its equipments, records and facilities

LABOR LAW 1 CASE DIGESTS BATCH 4

Page 10 of 12

were transferred thereat and that it conducted its official business in Kalibo during the period in question. It was incumbent upon private respondents to prove that they indeed rendered services for petitioner, which they failed to do. It is a basic rule in evidence that each party must prove his affirmative allegation. Since the burden of evidence lies with the party who asserts the affirmative allegation, the plaintiff or complainant has to prove his affirmative allegations in the complaint and the defendant or the respondent

has to prove the affirmative allegation in his affirmative defenses and counterclaim.25 [Jimenez vs. NLRC, 256 SCRA 84.] WHEREFORE, in view of the foregoing, the petition for CERTIORARI is GRANTED. Consequently the decision of public respondent NLRC dated April 20, 1995 and the Resolution dated July 28, 1995 in NLRC Case No. V-0143-94 are hereby REVERSED and SET ASIDE for having been rendered with grave abuse of discretion amounting to lack or excess of jurisdiction. Private respondents complaint for payment of unpaid wages before the Labor Arbiter is DISMISSED.

BERNARDINO V. NAVARRO, Petitioner,versus P.V. PAJARILLO LINER,

INC.,Respondent.

G.R. No. 164681 | 2009-04-24

FULLTEXT

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the

Rules of Court seeking to annul the Decision[1] dated November 28, 2003

and the Resolution[2] dated July 19, 2004 of the Court of Appeals in CA- G.R.

SP No. 67666.

P.V. Pajarillo Liner Inc. (respondent), a corporation engaged in the business

of land transportation, employed Bernardino V. Navarro (petitioner) as a bus

driver on April 20, 1995. Sometime in March 1996, petitioner, while on duty,

was apprehended for picking up passengers in a non-loading zone (illegal

terminal) along Ayala Avenue, Makati. His driver's license was confiscated by

a Metro Manila Development Authority (MMDA) enforcer and a

corresponding traffic violation receipt (TVR) was issued to him, which was

valid as a temporary driver's license for seven days from date of

apprehension. Before the expiration of the TVR, petitioner allegedly gave the

same to respondent's Operations Manager Arnel Hegina[3] (Hegina) and

requested the latter to redeem his license from the MMDA. Respondent was

not able to redeem the license from the MMDA but merely secured a two-

month extension for the validity of the TVR. Sometime in May 1996,

petitioner was again apprehended along Shoemart, Makati by highway

patrol

operatives who demanded petitioner's driver's license. The record does not

specify the violation. When petitioner presented his TVR, the operatives

ordered him to drive the bus directly to the garage. After the incident,

petitioner was not able to work for respondent again.[4]

On March 14, 1997, petitioner filed with the Labor Arbiter (LA), a complaint

for illegal dismissal with damages against respondent, alleging that he was

dismissed from the service on May 19, 1996; that as a bus driver, he worked

for five days a week and from six in the morning up to eleven in the evening

with a gross fare receipts average of P6,500.00; that from the amount of

P6,500.00, he was entitled to a 9% commission and P50.00 incentive; that in

cases of apprehension of respondent's driver due to violations involving

illegal terminal or being "out of line," respondent was in charge of getting the

driver's license from the MMDA; that when he was apprehended in March

1996 for illegal terminal, he gave the TVR to Hegina and requested the latter

to redeem the license from the MMDA; that petitioner's license was not

redeemed and respondent secured only two extensions of the TVR's validity

for two months; that when he was again apprehended in May 1996 and upon

arrival at the respondent's garage, he gave the extended TVR to Hegina and

requested the latter to redeem his license from the MMDA; that Hegina

informed him that his license would be redeemed the following day, but

when petitioner tried to get his license from Hegina, the latter told him that

he failed to get it because of heavy workload; that petitioner was asked to

come back after one week with the assurance that his license would already

be available, but no license was released; that he was constantly following up

his license with respondent's office but was only given promises that his

license was due for release; that respondent's refusal to redeem his license

constituted constructive dismissal because he was deprived of his source of

livelihood, as he was not able to perform his work as a bus driver without his

license.

In its position paper, respondent claimed that petitioner abandoned his job

as shown by the former's letter dated July 28, 1996 addressed to petitioner

requiring the latter to explain why he should not be dismissed for neglecting

his duty through prolonged absence; that after petitioner submitted his reply

to respondent's letter, nothing was heard from him until he filed his

complaint with the LA; that it was petitioner's obligation to redeem the

driver's license; that petitioner's inaction to get back his license showed his

lack of interest in resuming his job; and that respondent could not give back

petitioner's work without his driver's license.

Petitioner filed his reply, arguing that in his August 8, 1996 letter to

respondent's letter dated July 28, 1996, he had already brought to its

attention that it should redeem his license for having been caught for illegal

terminal, to wit:

Bilang tugon sa sulat ninyo ay ikinalulungkot kong sabihin sa inyo na hindi

ako nagpabaya sa aking tungkulin bilang driver bagkus ay nasa management

ang pagkukulang at ito'y tungkol sa hindi pagtubos ng aking TVR na nahuli sa

Ayala ng illegal terminal na dapat ay sagutin ng ating kumpanya. Nagpabalik

balik ako sa ating opisina dahil gusto kong makuha ang original license ko

pero ang nangyari puro extension at hanggang sa tuluyan ng nawala dahil

nadukutan ako. At isa pa, nagpaalam ako kay Arnel na hindi muna ako

makakalabas hangga't hindi pa nalulutas and problema ko.[5] (Emphasis

supplied) that there was no response received from respondent; that it was

only in its position paper filed with the LA that respondent raised the matter

of not condoning or encouraging the act of using illegal terminal, and that it

could not be held liable for petitioner's unlawful act. Petitioner added that it

could not be denied that petitioner requested respondent to redeem his

license, since the TVR was in

respondent's possession.

In the Rejoinder, respondent argued that the TVR was submitted by

petitioner when he was given an extension permit, and it was for record

purposes as it was only a xerox copy.

LABOR LAW 1 CASE DIGESTS BATCH 4

Page 11 of 12

On September 10, 1998, the LA rendered a decision[6] in favor of herein

petitioner, the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered ordering respondents to reinstate

complainant to his former position with full backwages which as of August

31, 1998 had already amounted to P175,500.00 and incentives in the amount

of P35,100.00.[7]

In finding that petitioner was constructively dismissed, the LA said that

respondent's claim of petitioner's negligence in the performance of his duties

as a driver due to his alleged prolonged absences had been well explained by

petitioner; that said absences could never be attributed to petitioner's fault,

since he could not perform his usual duties as a driver without his license;

that he was not remiss in following up the release of his license from

respondent, which did not do its job.

The LA did not sustain respondent's claim that it was not the latter's policy to

redeem the license of its drivers who were caught for illegal terminal, as

respondent did not deny petitioner's allegation that he submitted the TVR to

Hegina and that the office of respondent worked for the renewal of the

period of its validity pending the release of petitioner's license; and

respondent's policy of redeeming driver's license was further established by

the affidavit of Marcelino Ibañez, one of respondent's drivers and the

Chairman of the Board of the Kilusang Manggagawa sa PVP Liner. The LA

then concluded that respondent's failure to redeem petitioner's license

deprived him of the source of his livelihood without just and valid cause.

Respondent filed its appeal with the NLRC. The NLRC rendered its decision[8]

dated August 17, 2000, the dispositive portion of which reads:

WHEREFORE, the appealed decision is MODIFIED in that respondent is

ordered to reinstate complainant to his former position as bus driver without

backwages.[9]

On the question of who should redeem petitioner's driver's license, the NLRC

ruled that petitioner as the holder of the license should be the one to

redeem the same; that considering petitioner's allegation in his position

paper, that he gave the TVR to Hegina and requested the latter to redeem his

license, it was clear that petitioner was merely requesting him to redeem his

license, which did not connote any obligation on Hegina's part; that as

respondent failed to heed such request, it was incumbent upon petitioner to

redeem his license, as it was necessary in the pursuit of his occupation as a

bus driver. The NLRC did not believe petitioner's claim that he submitted the

original TVR to respondent, because he could not have driven with only a

photocopy of said document.

On the issue of constructive dismissal, the NLRC found that the evidence

showed that respondent sent a notice to petitioner requiring him to explain

his prolonged absences, to which petitioner submitted an explanation that

he could not report for work, as his license was with the authorities and was

waiting to be redeemed by respondent; and that no action was taken by the

latter on the matter. Thus, the NLRC agreed with the LA that there was

constructive dismissal; and petitioner should be reinstated upon

presentation of his driver's license, but without backwages considering that

he was equally at fault, as he did not bother to take proper steps to redeem

his license.

Petitioner's motion for reconsideration was denied in a Resolution[10] dated

September 29, 2000.

Petitioner filed a petition for certiorari with the CA. Respondent filed its

Comment and petitioner his Reply thereto.

On November 28, 2003, the CA rendered herein assailed decision dismissing

the petition for lack of merit.

The CA found that while an award of backwages presupposes a finding of

illegal dismissal, not every case of illegal dismissal deserves an award of

backwages, citing Manila Electric Co. v. National Labor Relations

Commission,[11] Cathedral School of Technology v. National Labor Relations

Commission, [12] and Durabuilt Recapping and Plant Company v. National

Labor Relations Commission.[13] The CA further held that petitioner was the

holder of the confiscated driver's license; thus, it was his duty to redeem his

license; that while respondent previously took care of retrieving a

confiscated driver's license, it was only a matter of accommodation, as there

is no law or regulation making it an obligation of the employer to undertake

retrieval of its erring driver's license; that when respondent failed to heed

petitioner's request to redeem his license, a personal privilege and non-

transferable, petitioner should have personally redeemed the same, which

he did not; thus, he was not entitled to backwages.

Petitioner's motion for reconsideration was denied in the assailed Resolution

dated July 19, 2004.

Hence, herein petition on the following grounds:

(1) the decision is inconsistent with the settled doctrine that doubts arising

from the evidence must be resolved in favor of the employee;[14]

(2) the findings of the Court of Appeals that petitioner should be the one

who should redeem his driver's license are grounded on speculations,

surmises or conjectures;[15] and

(3) petitioner is entitled to reinstatement with full backwages considering

that he was illegally dismissed from the service. [16]

The petition lacks merit.

For a correct perspective in the resolution of the present petition, it must be

stressed that the finding of the LA that petitioner was constructively

dismissed by respondent is already a settled issue. Respondent did not

appeal from the finding that it constructively dismissed petitioner.

Thus, the Court is constrained to limit itself to the determination of whether

petitioner is entitled to backwages; that is, whether the CA was correct in

upholding the NLRC's finding that petitioner is not entitled to backwages, as

LABOR LAW 1 CASE DIGESTS BATCH 4

Page 12 of 12

he was equally at fault for not bothering to take proper steps to redeem his

license.

The LA found that it was the obligation of respondent to redeem petitioner's

driver's license and, therefore, petitioner was constructively dismissed by

respondent. While affirming the constructive dismissal committed by

respondent, the NLRC and the CA, however, held that petitioner as the

holder of the license should be the one to redeem the same, as this was

necessary in the pursuit of his occupation as a bus driver.

Petitioner was using the extended TVR when he was again caught sometime

in May 1996 by highway patrol operatives and was ordered to drive directly

to the garage.

Petitioner claimed that he gave the extended TVR to respondent for the

latter to redeem the same. However, such claim was belied by petitioner's

letter-reply dated August 8, 1996 to respondent's letter dated July 28, 1996,

asking him to explain his prolonged absence. Petitioner wrote that the

extended TVR was stolen from him. Such admission shows that the extended

TVR had been in petitioner's possession in May 1996 until it was stolen from

him, the date of which petitioner did not specify, wittingly or unwittingly.

There is no showing that petitioner ever reported the loss of the extended

TVR to respondent before he was asked to explain his prolonged absence in

July 1996; or that he reported the loss to the MMDA. Thus, how could

petitioner expect respondent to redeem his driver's license when the

extended TVR was not in respondent's possession? Respondent could not be

reasonably expected to redeem petitioner's driver's license while he, as

owner of the license, did not take the proper steps to report the loss of the

TVR to respondent or to the MMDA to get back his license. These

circumstances show that petitioner was not at all faultless, as his violation

caused the confiscation of his license.

Consequently, the Court agrees with the NLRC's conclusion that petitioner is

not entitled to backwages.

He never bothered to redeem his license at the soonest possible time when

there was no showing that he was unlawfully prevented by respondent from

doing so. Thus, petitioner should not be paid for the time he was not

working. The Court has held that where the failure of employees to work was

not due to the employer's fault, the burden of economic loss suffered by the

employees should not be shifted to the employer. Each party must bear his

own loss.[17] It would be unfair to allow petitioner to recover something he

has not earned and could not have earned, since he could not discharge his

work as a driver without his driver's license. Respondent should be exempted

from the burden of paying backwages.

The age-old rule governing the relation between labor and capital, or

management and employee, of a "fair day's wage for a fair day's labor"

remains as the basic factor in determining employees' wages. If there is no

work performed by the employee, there can be no wage or pay -- unless, of

course, the laborer was able, willing and ready to work but was illegally

locked out, suspended or dismissed,[18] or otherwise illegally prevented

from working,[19] a situation which we find is not present in the instant

case.

WHEREFORE, the petition for review is DENIED. The Decision dated

November 28, 2003 and the Resolution dated July 19, 2004 of the Court of

Appeals are AFFIRMED.