St. Luke’s Medical Center Employees’Associationvs. NLRC

[G.R. No. 162053.March 7, 2007]

Facts:

Maribel S. Santos was an X-Ray Technician in the Radiology department of St. Luke’s. Subsequently Congress passed and enacted Republic Act No. 7431 known as the “Radiologic Technology Act of 1992,” which required that a person must obtain the proper certificate of registration from the Board of Radiologic Technology for the practice or offer to practice as a radiology and/or x-ray technologist in the Philippines. In turn, the Director of the Institute of Radiology issued a final notice to Santos requiring her to comply by taking and passing the examination; otherwise St. Lukes may be compelled to retire her from employment should there be no other position available where she may be absorbed. Despite extensions of time within which she could comply, Santos failed to comply with the requirement for her continued employment.

Issue:

Was Santos validly dismissed for failure to secure a certificate of registration from the Board of Radiologic Technology?

Held:

While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be reasonably regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and the general welfare of the people. Consequently, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers. The most concrete example of this would be in the field of medicine, the practice of which in all its branches has been closely regulated by the State. It has long been recognized that the regulation of this field is a reasonable

method of protecting the health and safety of the public to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine. The same rationale applies in the regulation of the practice of radiologic and x-ray technology. The enactment of R.A. (Nos.) 7431 and 4226 are recognized as an exercise of the State’s inherent police power. It should be noted that the police power embraces the power to prescribe regulations to promote the health, morals, educations, good order, safety or general welfare of the people. The state is justified in prescribing the specific requirements for x-ray technicians and/or any other professions connected with the health and safety of its citizens. St. Luke’s being engaged in the hospital and health care business, is a proper subject of the cited law; thus, having in mind the legal requirements of these laws, the latter cannot close its eyes and [let] complainant-appellant’s private interest override public interest.

Pursuant to the above provision of the CBA, some departments of Dole reverted to the previous practice of granting DOLE PHILS. v. PAWIS NG MAKABAYANG OBRERO

January 13, 2003

Corona, J.

Petitioner: DOLE PHILIPPINES, INC.

Respondent: PAWIS NG MAKABAYANG OBRERO (PAMAO-NFL)

Facts:

• On February 22, 1996, a new five-year CBA for the period starting February 1996 up to February 2001, was executed by Dole and Pawis Ng Makabayang Obrero-NFL (PAMAO-NFL). Among the provisions of the new CBA is the disputed section on meal allowance under Section 3 of Article XVIII on Bonuses and Allowances, which reads:

• Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of

TEN PESOS (P10.00) to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as presently practiced, not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3) hours of actual overtime free meals after exactly three hours of actual overtime work. However, other departments continued the practice of granting free meals only after more than three hours of overtime work.

• PAMAO-NFL filed a complaint before the NCMB alleging that Dole refused to comply with the provisions of the 1996-2001 CBA because it granted free meals only to those who rendered overtime work for more than three hours and not to those who rendered exactly three hours overtime work.

• The parties agreed to submit the dispute to voluntary arbitration. Thereafter, the voluntary arbitrator, deciding in favor of PAMAO-NFL, issued an order directing Dole to extend the “free meal” benefit to those employees who actually did overtime work even for exactly three hours only.

• DOLE sought a reconsideration of the order but the same was denied. Hence, DOLE elevated the matter to the Court of Appeals by way of a petition for review on certiorari.

• On September 22, 2000, the Court of Appeals rendered its decision upholding the assailed order. Thus, the instant petition.

Issue: WON “after three hours of actual overtime work” should be interpreted to mean after more than three hours of actual overtime work

Held: NO. The disputed provision of the CBA is clear and unambiguous. The terms are explicit and the language of the CBA is not susceptible to any other interpretation. Hence, the literal meaning of “free meals after 3 hours of overtime work” shall prevail, which is simply that an employee shall be entitled to a free meal if he has rendered exactly, or no less than, three hours of overtime work, not “after more than” or “in excess of” three hours overtime work.

Ratio:

• The “meal allowance” provision in the 1996-2001 CBA is not new. It was also in the 1985-1988 CBA and the 1990-1995 CBA. The 1990-1995 CBA provision on meal allowance was amended by the parties in the 1993-1995 CBA Supplement. The clear changes in each CBA provision on meal allowance were in the amount of the meal allowance and free meals, and the use of the words “after” and “after more than” to qualify the amount of overtime work to be performed by an employee to entitle him to the free meal.

• The Court noted that the phrase “more than” was neither in the 1985-1988 CBA nor in the original 1990-1995 CBA. It was inserted only in the 1993-1995 CBA Supplement. But said phrase is again absent in Section 3 of Article XVIII of the 1996-2001 CBA, which reverted to the phrase “after three (3) hours”.

• The omission of the phrase “more than” between “after” and “three hours” in the present CBA spells a big difference. No amount of legal semantics can convince the Court that “after more than” means the same as “after”.

• Dole asserts that the “more than” in the 1993-1995 CBA Supplement was mere surplusage because, regardless of the absence of said phrase in all the past CBAs, it had always been the policy of petitioner corporation to give the meal allowance only after more than 3 hours of overtime work. However, if this were true, why was it included only in the 1993-1995 CBA Supplement and the parties had to negotiate its deletion in the 1996-2001 CBA?

o Clearly then, the reversion to the wording of previous CBAs can only mean that the parties intended that free meals be given to employees after exactly, or no less than, three hours of actual overtime work.

• The exercise of management prerogative is not unlimited. It is subject to the limitations found in law, a collective bargaining agreement or the general principles of fair play and justice. This situation constitutes one of the limitations. The CBA

is the norm of conduct between petitioner and private respondent and compliance therewith is mandated by the express policy of the law.

• Dole cannot assail the voluntary arbitrator’s interpretation of the CBA for the supposed impairment of its management prerogatives just because the same interpretation is contrary to its own

Decision: Petition DENIED.

ABELLA VS NLRC

G.R. No. 71818

Date: July 20, 1987

Petitioners: Rosalina Perez Abella/Hda. Danao-Ramona

Respondents: The Honorable National Labor Relations Commission, Romeo Quitco and Ricardo Dionele, Sr.,

Ponente: Paras, J.

FACTS:

On June 27, 1960 the petioner, Rosalina Perez Abella leased a farm land known as Hacienda Danao-Ramona, for a period of ten (10) years. She opted to extend the leased contract for another ten (10) years. During the existence of the lease, she employed the private respondents Ricardo Dionele, Sr., and Romeo Quitco. Upon the expiration of her leasehold rights, petitioner dismissed private respondents and turned over the hacienda to the owners thereof on October 5, 1981, who continued the management, cultivation and operation of the farm. On November 20, 1981, private respondents filed a complaint against the petitioner at the Ministry of Labor and Employment, Bacolod City District Office, for overtime pay, illegal dismissal and reinstatement with backwages. After the parties had presented their respective evidence, Labor Arbiter Manuel M. Lucas, Jr., in a Decision dated July 16,

1982, ruled that the dismissal is warranted by the cessation of business, but granted the private respondents separation pay. Petitioner appealed, the National Labor Relations Commission, in a Resolution affirmed the decision and dismissed the appeal for lack of merit. Petitioner filed a Motion for Reconsideration, but the same was denied. Hence, the present petition.

ISSUE:

• Whether or not private respondents are entitled to separation pay?

HELD:

The petition is devoid of merit. Article 284 of the Labor Code as amended by BP 130 is the law applicable in this case. The purpose of Article 284 as amended is obvious-the protection of the workers whose employment is terminated because of the closure of establishment and reduction of personnel. Without said law, employees like private respondents in the case at bar will lose the benefits to which they are entitled — for the thirty three years of service in the case of Dionele and fourteen years in the case of Quitco. Although they were absorbed by the new management of the hacienda, in the absence of any showing that the latter has assumed the responsibilities of the former employer, they will be considered as new employees and the years of service behind them would amount to nothing.

It is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration.

The instant petition is hereby dismissed and Decision of the Labor Arbiter and the resolution of the ministry of labor and employment are hereby affirmed.

CLEMENTE V GSIS

Doubt: resolve in favor of labor (liberal construction). There’s doubt

when the law is susceptible to 2 or more interpretations, both or all of which are correct.

FACTS

- Carolina’s husband, Pedro Clemente was a janitor for 10 years in the DOH Dagupan City assigned at the Ilocos Norte Skin Clinic.

- He was hospitalized for 12 days due to his ailment of nephritis, and was also found to be suffering from Hansen’s disease (portal cirrhosis and leprosy). Then, he died on Nov 14, 1976.

- Petitioner then filed with GSIS a claim for employees’ compensation under the Labor Code.

This was denied by GSIS because the ailments of her husband are not occupational diseases taking into consideration the nature of his work and were not causally related to his duties and conditions of work.

Under Art. 167(L) of the Labor Code and Sec. 1(b) Rule III of the Amended Rules on Employees’ Compensation, for the sickness and the resulting disability or death to be compensable, sickness must be the

result of an occupational disease listed under Annex A of the rules; otherwise proof must be shown that the risk of contracting the disease is increased by the working conditions.

- Petitioner claimed that the ailments were contracted in the course of employment and were aggravated by his work since he was in direct contact with persons suffering from different skin diseases and was exposed to obnoxious dusts and other dirt.

- the GSIS forwarded the records of the petitioner's claim for review by the ECC (Employees’ Compensation Commission).

ECC also dismissed the claim since there was no substantial evidence of causal connection and there was evidence that deceased had already contracted the Hansen’s before employment.

ISSUE

WON petitioner is entitled to the Employees’ compensation?

HELD

YES.

Strict rules of evidence are NOT applicable in claims for compensation.

The degree of proof required is merely substantial evidence, which means ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ What the law requires is a reasonable work connection and not a direct causal relation.

Doubts should be resolved in favor of the claimant-employee.

The major ailments of the deceased could be traced to bacterial and viral infections. For instance, in the case of leprosy, it is known that the source of infection is discharge from lesions of persons with active cases.

Petitoner’s husband worked in a skin clinic and was exposed to different carriers of diseases. As janitor, he was the employee most exposed to the dangerous concentration of infected material, and not being a med practitioner, least likely to know how to avoid them.

GSIS’s conservative stand is not consistent with the liberal interpretation of the Labor Code and the social justice guarantee embodied in the Constitution in favor of workers.

Disposition Decision appealed from is set aside and GSIS is ordered to pay petitioner death benefits and attorney’s fees.

8. RESOLUTION OF DOUBT IN LAR OR EVIDENCE

Doubt as to the interpretation of labor laws & regulations has to be resolved in favor of labor

This precept extends to doubts about the evidence of the disputants

CASE: Nicario v. NLRC

Facts:

-Petitioner employee claimed that she worked 12 hrs a day, thus rendering OT work for w/c she claimed OT pay. The labor arbiter, taking notice of the fact that the establishment is open for 12 hrs, decided in favor of petitioner. On motion for reconsideration filed by the employer w/ the NLRC, the decision was modified based on the daily time records presented by the employer showing that there was no OT work

Ruling:

The DTR are unreliable since the originals thereof were not presented in evidence

-No noon break is observed but the DTR shows petitioner has a rest period from 12n – 2pm

All entries in the DTR are suspiciously inconsistent In controversies between a laborer & his master, doubts reasonably arising from the evidence, or in the interpretation of agreements & writing should be resolved in the former’s favor

COLGATE PALMOLIVE PHILIPPINES VS OPLEG.R. No.

73681

Date:

June 30, 1988

Petitioner:

Colgate Palmolive Philippines, Inc.,

Respondent:

Hon. Blas F. Ople and Colgate Palmolive Sales Union

Ponente:

Paras, J.

FACTS:

On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau ofLabor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain,dismissal of union officers/members; and coercing employees to retract their membership withthe union and restraining non-union members from joining the union. After efforts at amicablesettlement proved unavailing, the Office of the MOLE, upon petition of petitioner assumed jurisdiction over the dispute pursuant to Article 264 (g) of the Labor Code.Colgate Palmolive Philippines, Inc in its position stated that there is no legal basis for thecharge that the company refused to bargain collectively with the union considering that thealleged union is not the certified agent of the company salesmen. The union's status as alegitimate labor organization is still under question because on March 6, 1985, a certainMonchito Rosales informed the BLR that an overwhelming majority of the salesmen are not infavor of the Notice of Strike allegedly filed by the Union. While the respondent Union, on theother hand, in its position paper, reiterated the issue in its Notice to Strike, alleging that it wasduly registered with the Bureau of Labor Relations.On August 9,1985, respondent Minister rendered a decision which found no merit in theUnion's Complaint for unfair labor practice allegedly committed by petitioner as regards thealleged refusal of petitioner to negotiate with the Union, and the secret distribution of surveysheets allegedly intended to discourage unionism. It also found the three salesmen, PeregrinoSayson, Salvador Reynante & Cornelio Mejia "not without fault" and that "the

company hasgrounds to dismiss above named salesmen"Respondent Minister directly certified the respondent Union as the collective bargainingagent for the sales force in petitioner company and ordered the reinstatement of the threesalesmen to the company on the ground that the employees were first offenders. Hence, thePetitoner now seeks to set and annul the order of then Minister Blas Ople.

ISSUES:

1. Whether or not respondent Minister committed a grave abuse of discretion when hedirectly certified the Union solely on the basis of the latter's self-serving assertion that itenjoys the support of the majority of the sales force in petitioner's company? and;

2. Whether or not respondent Minister committed a grave abuse of discretion when,notwithstanding his very own finding that there was just cause for the dismissal of thethree (3) salesmen, he nevertheless ordered their reinstatement.

HELD:

1. Yes. The respondent Minister has the power to decide a labor dispute in a caseassumed by him under Art. 264 (g) of the Labor Code but this power was exceededwhen he certified respondent Union as the exclusive bargaining agent of the company'ssalesmen since this is not a representation proceeding as described under the LaborCode. Moreover the Union did not pray for certification but merely for a finding of unfairlabor practice imputed to petitioner-company.

2. Yes. The order of the respondent Minister to reinstate the employees despite a clearfinding of guilt on their part is not in conformity with law. Reinstatement is simplyincompatible with a finding of guilt. Where the totality of the evidence was sufficient towarrant the dismissal of the employees the law warrants their dismissal without makingany distinction between a first offender and a habitual

delinquent. Under the law,respondent Minister is duly mandated to equally protect and respect not only the labor orworkers' side but also the management and/or employers' side. The law, in protectingthe rights of the laborer, authorizes neither oppression nor self-destruction of theemployer. To order the reinstatement of the erring employees namely, Mejia, Saysonand Reynante would in effect encourage unequal protection of the laws as a managerialemployee of petitioner company involved in the same incident was already dismissedand was not ordered to be reinstated. As stated by Us in the case of San MiguelBrewery vs. National Labor Union,

2 "an employer cannot legally be compelled tocontinue with the employment of a person who admittedly was guilty of misfeasance ormalfeasance towards his employer, and whose continuance in the service of the latter ispatently inimical to his interest."` Judgment is hereby rendered reversing and setting aside the Order of the respondentMinister, dated December 27, 1985 for grave abuse of discretion. However, in view of the factthat the dismissed employees are first offenders, petitioner is hereby ordered to give themseparation pay. The temporary restraining order is hereby made permanent

ST. THERESAS SCHOOL OF NOVALICHES FOUNDATION and ADORACION ROXAS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ESTHER REYES, respondents.

D E C I S I O N

PURISIMA, J.:

Justitia nemini neganda est. Justice is to be denied to none. The law, while protecting the rights of the employees, authorizes neither the oppression nor destruction of the employer.[1] When the law angles the scale of justice in favor of labor, the scale should never be so tilted if the result is an injustice to the employer.[2]

The petition at bench seeks to modify the Resolution issued on November 29, 1994 by the National Labor Relations Commission (NLRC) and its Decision of 29 November, 1995 in NLRC NCR Case No. 00-6078-94.

Petitioners contend that the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction in handing down its disposition wherein, notwithstanding the finding that the dismissal of private respondent was valid, it awarded backwages for the latter, computed from November 12, 1993 up to the time of rendition of the decision under attack.

Undisputed are the following facts:

Petitioner Adoracion Roxas is the president of St. Theresas School of Novaliches Foundation. She hired private respondent, Esther Reyes, on a contract basis, for the period from June 1, 1991 to March 31, 1992. However, private respondent commenced work on May 2, 1991. During the said period of employment, private respondent became ill. She went on a leave of absence from February 17 to 21 and from February 24 to 28, 1992, such leave of absence having been duly approved by petitioner Roxas. On March 2, 1992, private respondent reported for work, but she only stayed in her place of work from 6:48 to 9:38 a.m. Thereafter, she never returned. For what reason did private respondent stop working?

Petitioners theorize that the private respondent abandoned her work. On the other hand, the latter maintains that she was replaced. When she went back to work on February 20, 1992, she found out that her table, chair, and other belongings were moved to a corner of their office, and she was replaced by Annie Roxas, daughter of petitioner Adoracion Roxas. She tried to contact her employer but the latter could not be found within the school premises.

On March 25, 1992, petitioners sent private respondent a letter by registered mail, informing her that her contract, due to expire on March 31, 1992,

would not be renewed. Prior thereto, or on March 3, 1992, to be precise, the private respondent instituted NLRC NCR Case No. 00-03-01481-92[3] against the herein petitioners for unfair labor practice based on harassment, illegal dismissal, 13th month pay, allowances, removal of desk and chair form place of work, and refusal to communicate, moral and exemplary damages.[4] On November 12, 1993, absent any amicable settlement hammered out by the parties, the Labor Arbiter came out with a decision, disposing, thus:

WHEREFORE, responsive to the foregoing, judgment is hereby ordered declaring complainant (sic) dismissal from the service illegal. Respondent is hereby ordered to reinstate complainant to her former position without loss of seniority rights and to pay for full backwages from the time of dismissal to her actual reinstatement in the amount of Seventy Six Thousand Seven Hundred One (P76,701.00) Pesos.

Respondent is hereby ordered to pay complainant P25,000 as moral damages and P10,000 by way of exemplary damages.

Respondent (sic) are further assessed attorneys fees of 10% of the award.

On December 7, 1993, after posting the necessary supersedeas bond, petitioners appealed the aforesaid decision to the NLRC.

On January 12, 1994, private respondent presented a Motion for Partial Execution of the reinstatement aspect of the Labor Arbiters decision.

On April 5, 1994, when no action was taken by the Labor Arbiter on her motion, she filed a Motion for Immediate Resolution, and, on July 13, 1994, after three months, still without any action taken by the same Labor Arbiter on her yearning, the private respondent sent in a second Motion for Immediate Resolution. However, Labor Arbiter Raul T. Aquino was appointed as Commissioner of the NLRC,

thereby leaving subject motions of private respondent unresolved.

On November 29, 1994, petitioners appeal, docketed as NLRC NCR Case No. 006078-94, was resolved in the assailed Resolution of the of the Second Division of the NLRC; disposing, as follows:

WHEREFORE, all premises considered, the decision of the Labor Arbiter below dated November 12, 1993 is hereby reversed and set aside and another one rendered, declaring the separation of Esther Reyes from service legal and valid.

However, respondent is directed to pay the backwages of herein complainant from November 12, 1993 up to the date of the promulgation of this Resolution.

Therefrom, both parties moved for reconsideration; petitioners assailing the award of backwages in favor of private respondent.

On November 29, 1995, the same Second Division of NLRC rendered its challenged Decision, denying subject motions for reconsideration.

Sometime in February 1996, the private respondent filed with NLRC a Motion for Execution, through the deciding Labor Arbiter. But until now, no writ of execution issued. Unfortunately for private respondent, she never interposed any appeal from NLRCs ruling, upholding the validity of her dismissal. It is therefore settled, beyond the reach of this courts power of review, that private respondents employment was validly terminated.

On the part of petitioners, they have come here to question the award of backwages for the private respondent, whose dismissal has been upheld with finality.

Before delving into and passing upon the propriety of the assailed award of backwages, which is the core of the Petition before us, the court takes note

of the undisputed fact that private respondent was employed on a contract basis.

Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating consent. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employees duties.[5]

It goes without saying that contracts of employment govern the relationship of the parties. In this case, private respondents contract provided for a fixed term of nine (9) months, from June 1, 1991 to March 31, 1992. Such stipulation, not being contrary to law, morals, good customs, public order and public policy, is valid, binding and must be respected.[6]

It bears stressing that private teachers are subject to special rules with respect to requisites for their permanent employment and security of tenure, to wit:

1. He must be a full time teacher;

2. He must have rendered at least three consecutive years of service; and,

3. Such service must be satisfactory.[7]

This is in accord with the Manual of Regulations for Private Schools issued by the then Department of Education.[8]

We now tackle the pivotal point of inquiry - the award of backwages in favor of private respondent. Is it proper in light of the finding that her dismissal was valid?

The term backwages has been defined as that for earnings lost by a worker due to his illegal dismissal.[9] Backwages are generally granted on grounds of equity.[10] Payment thereof is a form of relief that restores the income lost by reason of such unlawful dismissal.[11] It is not private compensation or damages, but is awarded in furtherance and effectuation of the public objectives of the Labor Code. Nor is it a redress of a private right but, rather, in the nature of a command to the employer to make public reparation for dismissing an employee, either due to the formers unlawful act or bad faith.[12]

Jurisprudence is filled to the brim with cases wherein backwages were awarded to an employee illegally dismissed.[13] But where, as in this case of a pitiful employee rendered hapless by her lawyers inaction or ignorance, the dismissal has been adjudged valid and lawful, the challenged award of backwages is decidedly improper and contrary to law and jurisprudence.

WHEREFORE, the Petition is GRANTED; the Decision of the respondent NLRC rendered on November 29, 1995 in NLRC NCR Case No. 00-6078-94 is hereby MODIFIED by deleting therefrom the award of backwages in question. No pronouncement as to costs.

SO ORDERED.

Narvasa, C.J., (Chairman), Romero, and Kapunan, JJ.,

concur.

BANTOLINO,

vs.

COCA-COLA BOTTLERS PHILS., INC.,

G.R. No. 153660, June 10, 2003

Facts:

Petitioners are employees of respondent Coca-Cola Bottlers, Inc. Petitioners filed a complaint againstrespondents for unfair labor practice through

illegal dismissal, violation of their security of tenure and the perpetuation of the "Cabo System." For failure to prosecute as they failed to either attend the scheduledmandatory conferences or submit their respective affidavits, the claims of the other complainant-employeeswere dismissed. Labor Arbiter conducted clarificatory hearings to elicit information from the remainingcomplainants (petitioners herein). In lieu of a position paper, respondent company filed a motion to dismisscomplaint for lack of jurisdiction and cause of action. On 29 May 1998 Labor Arbiter rendered a decisionordering respondent company to reinstate complainants. Thereafter, the NLRC also sustained the findings of theLabor Arbiter.However, Respondent Coca-Cola Bottlers appealed to the Court of Appeals, although the CA affirmed thefinding of the NLRC that an employer-employee relationship, but nonetheless agreed with respondent that theaffidavits of some of the complainants, namely, Prudencio Bantolino, et al. should not have been given probative value for their failure to affirm the contents thereof and to undergo cross-examination. As aconsequence, the appellate court dismissed their complaints for lack of sufficient evidence. Hence, this petitionaccording to petitioners, the Rules of Court should not be strictly applied in this case specifically by puttingthem on the witness stand to be cross-examined because the NLRC has its own rules of procedure which wereapplied by the Labor Arbiter in coming up with a decision in their favor.

Issue:

Whether or not the Rules of Court should be strictly applied in giving evidentiary value to the affidavitsdespite the failure of the affiants to undergo the test of cross-examination?

Ruling: NO. In the oft-cited case of

Rabago v. NLRC,

the Supreme Court held that

"the argument that theaffidavit is hearsay because the affiants were not presented for cross-

examination is not persuasive because therules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC wheredecisions may be reached on the basis of position papers only."

Moreover, in

Southern Cotabato Dev. and Construction Co. v. NLRC,

it held that under Art. 221 of the Labor Code, the rules of evidence prevailing incourts of law do not control proceedings before the Labor Arbiter and the NLRC. Further, it notes that the Labor Arbiter and the NLRC are authorized to adopt reasonable means to ascertain the facts in each case speedily andobjectively and without regard to technicalities of law and procedure, all in the interest of due process.Hence, to reiterate, administrative bodies like the NLRC are not bound by the technical niceties of law and procedure and the rules obtaining in courts of law. Indeed, the Revised Rules of Court and prevailing jurisprudence may be given only stringent application, i.e., by analogy or in a suppletory character and effect.In the case at bar, the submission by respondent, that an affidavit not testified to in a trial, is mere hearsayevidence and has no real evidentiary value, cannot find relevance in the present case considering that a criminal prosecution requires a quantum of evidence different from that of an administrative proceeding. Under the Rulesof the Commission, the Labor Arbiter is given the discretion to determine the necessity of a formal trial or hearing. Hence, trial-type hearings are not even required as the cases may be decided based on verified position papers, with supporting documents and their affidavits.

Pfizer vs Galan

Facts: Respondent Edwin V. Galan was an employee of petitioner Pfizer, Inc., a drug manufacturer. He was initially hired in August 1982 as a professional sales representative, commonly known as a medical representative. He was a recipient of several

company awards, which eventually resulted in his promotion as District Manager for Mindanao in 1996.

In September 1997, respondent was recalled to Manila to meet with his superiors and was issued a memorandum requiring him to explain his alleged unauthorized use of, and questionable expense claims made on, the company vehicle, as well as the doubtful liquidation of his cash advance of US$5,000 for a recent official trip to Indonesia, which ultimately led to his dismissal and prompted him to file a complaint before the NLRC.

The Labor Arbiter declared that respondent was illegally dismissed and ordered Pfizer, Inc., to pay him back wages, separation pay, thirteenth month pay, incentives and bonuses, reimbursement of expenses and attorneys fees. Respondents monetary award totalled P2,052,013.50. Case was appealed to NLRC Cagayan de Oro, which affirmed the decision and the Motion for Reconsideration was denied as well. And upon respondents motion, a writ of execution was issued.

The Petitioner’s filed a petition for certiorari before the Court of Appeals , to which the challenged resolution was issued which dismissed the petition for certiorari for having been filed beyond the sixty-day reglementary period. Hence, this appeal.

Issue: Whether or not the Court of Appeals erred in dismissing the appeal for being filed beyond the reglementary period?

Held: Yes. In Systems Factors Corporation v. NLRC we declared that the amendment introduced under A.M. No. 00-2-03-SC is procedural or remedial in character, as it does not create new or remove vested rights, but only operates in furtherance of the remedy or confirmation of rights already existing. It is settled that procedural laws may be given retroactive effect to actions pending and undetermined at the time of their passage, there being no vested rights in the rules of procedure. Thus, the said amendment may be given a retroactive effect. We reiterated this ruling in Unity

Fishing Development Corporation v. Court of Appeals.

Thus, by virtue of the retroactive effect of the amendment of Section 4, Rule 65 of the 1997 Rules of Civil Procedure introduced by our Resolution in A.M. No. 00-2-03-SC, which allows the filing of a petition for certiorari within sixty days from notice of the denial of a motion for reconsideration, the filing of petitioners petition before the Court of Appeals was on time. Indeed, there is no dispute that their petition was filed on the sixtieth day from notice of the denial of their motion for reconsideration.

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 irrevocably 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 said contract. The letter also contained the waiver and renunciation for recovery of the remaining amount stipulated but reserves the right to seek recovery of the other benefits under said Agreement.

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 contended 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, the so-called "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. SONZA contends that the “discretion used by respondent in specifically selecting and hiring complainant over other broadcasters of possibly similar experience and qualification as complainant belies respondent’s claim of independent contractorship.”

However, 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 fee payment shows that he was an employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits and privileges “which he would not have enjoyed if he were truly the subject of a valid job contract.”

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, Medicare, x x x and 13th month pay” 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. In addition, SONZA’s talent fees are so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer-

employee relationship. ABS-CBN agreed to pay SONZA such huge talent fees precisely because of SONZA’s unique skills, talent and celebrity status not possessed by ordinary employees.

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.

During the life of the Agreement, ABS-CBN agreed to pay SONZA’s talent fees as long as “AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement.” Even if it suffered severe business losses, ABS-CBN could not retrench SONZA because ABS-CBN remained obligated to pay SONZA’s talent fees during the life of the Agreement. This circumstance indicates an independent contractual relationship between SONZA and ABS-CBN.

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. However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests. 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.

Second, SONZA urges us to rule that he was ABS-CBN’s employee because ABS-CBN subjected him to its rules and standards of performance. SONZA claims that this indicates ABS-CBN’s control “not only [over] his manner of work but also the quality of his work." The Agreement stipulates that SONZA shall abide with the rules and standards of performance “covering talents” of ABS-CBN. The Agreement does not require SONZA to comply with the rules and standards of performance prescribed for employees of ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the “Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY (ABS-CBN) as its Code of Ethics.” The KBP code applies to broadcasters, not to employees of radio and television stations. Broadcasters are not necessarily employees of radio and television stations. Clearly, the rules and standards of performance referred to in the Agreement are those applicable to talents and not to employees of ABS-CBN.

In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. In this case, SONZA failed to show that these rules controlled his performance. We find that these general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating television and

radio programs that comply with standards of the industry.

Lastly, SONZA insists that the “exclusivity clause” in the Agreement is the most extreme form of control which ABS-CBN exercised over him. This argument is futile. Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control.

The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort “in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time.” Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity, as in the present case.