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G.R. No. L-7636, June 27, 1955 ASIA STEEL CORPORATION, PETITIONER, VS. WORKMEN'S COMPENSATION COMMISSION AND ISMAEL CARBAJOSA, RESPONDENTS. D E C I S I O N BENGZON, J.: Petition to review the order of the Workmen's Compensation Commission approving the award of its referee in favor of the laborer Ismael Carbajosa, against his employer Asia Steel Corporation. It appears that on April 16, 1951, while working in said Corporation's steel factory in Grace Park, Manila, Carbajosa tapped the belt of a running machine to tighten it, but his hand was caught accidentally by the belt, he stumbled down and his two feet were so seriously injured, they had to be amputated at the Chinese General Hospital where he was rushed immediately after the mishap. Hospitalization were paid by the corporation. Thereafter Carbajosa claimed for compensation. The referee, having found that he was employed as apprentice, and that the accident arose out of employment, required the Asia Steel Corporation to indemnify in the total sum of two thousand two hundred forty six pesos and forty centavos (P 2,246.40) and to pay the costs. The instant petition for review rests on two major propositions: (1) Ismael Carbajosa was not an employee or laborer and (2) the accident was "occasioned by" his "own fault and negligence". This second issue, however, was not tendered in the Corporation's motion to dismiss, Annex B, filed with Workmen's Compensation Commission, and neither the referee nor the Commission made findings on such question of negligence. Anyway it is no excuse for the employer: it merely reduces the compensation. (Art. 1711 New Civil Code.) Nevertheless, on close examination the contention turn out to be founded on the reasoning that being a stranger in the premises -not an employee- Carbajosa had no right, and therefore was careless, to touch the machines of the factory. Hence this revision may be limited to the simple question whether the petitioner had given employment to Carbajosa. According to the Commission, "x x x the claimant, a native of Negros Occidental, came to Manila on March 31, 1951, to look for a job. On April 5, 1951, he met an acquaintance, Pablo Sesia, whose aid sought in the matter of securing employment. Sesia, who was employed in the Asia Steel Corporation as a mechanic, promised to take Carbajosa to his employer. Upon previous arrangement with Sesia, therefore, Carbajosa went to respondent's nail factory at Grace Park, Caloocan, Rizal, on April 9, 1951. Sesia introduced the claimant to Mr. Kim, in charge of the factory. During the interview, Kim told the claimant that he, (Kim) would take up the matter with the manager, and Carbajosa would know the manager's decision as soon as he (the claimant) returned. The next morning, the claimant came back to the factory and was told by Kim to begin working as an apprentice. It was further agreed that claimant's wage would be determined upon the arrival of materials which the manager ordered from Japan. The claimant assumed work on the same day, doing odd jobs under the direction of Sesia. It also appears that Kim lived in the factory. Pablo Sesia was also lodging in the factory and permission was secured from Kim in order that the claimant might live in the factory with Sesia. On April 16, 1951, hardly a week since the claimant began working in the factory, while he was tightening the belt of one of the machines, his hand was caught by the running belt. The force of the moving belt caused claimant to lose his balance. He was dragged to the other end of the machine. His feet were smashed by the iron shaft and he was pinned under the machine itself." x x x Under the laws we are bound to accept these findings; and must disregard petitioner's arguments disputing them [1]. But this does not necessarily dispose of the matter, because ther remains the legal proposition extensively discussed by counsel for petitioner that Kim's acts could not bind the corporation, since only the President, Yu Kong Tiong, was authorized by its by-laws to hire employees for the manufacturing establishment. The Commission found that Yu Kong Tiong was the president of the corporation and Sy Te the manager; but Yu Kong Tiong was permitted actually to manage its affairs, (it being a "family" corporation) by remote control from his office in Manila thru Kim who was "in charge" of the factory in Caloocan. It also declared that Kim was allowed by Yu Kong Tiong to employ Carbajosa as apprentice. (p. 52 Record.) From such circumstances, the conclusion flows inevitably that Carbajosa was, at the time of the occurence, an employee of the petitioning corporation. Of course it is undeniable that as president and manager Yu Kong Tiong could legally employ, by himself, manual laborers to work in the factory [2]. And there is nothing to prevent him from employing Carbajosa, thru his agent Kim,

as the latter did. In fact it may even be held that in default of proof establishing Yu Kong Tiong's assent to the employment, inasmuch as Kim the person actually in charge of the factory represented to Carbajosa that he was authorized by the manager to engage his (Carbajosa's) services, there was apparent authority of Kim, sufficiently ample to create the relationship of employer and employee for the purposes of the Workmen's Compensation Law. "It may be stated as a general rule that an agent, who with authority express, implied, apparent or actual, employs help for the benefit of his principal's business, therby creates the relationship of employer and employee between such help and his principal." (Schneider, Workmen's Compensation (Permanent Ed.) Vol. I p. 617, citing many cases.) "It has been held: that where a driver, employed to solicit sales of beer and make delivery, was permitted to employ helpers, a helper who was injured while in the performance of his duty was entitled to compensation from brewery; that an expert, hired by a factory owner to supervise the installation of machinery, who hired assistants, paid by the owner, one of such assistants being injured while so engaged was entitled to compensation from the factory owner; that workmen hired by an agent of the company, which took over the logging work of an independent contractor, became the employees of the company." (Schneider, op. cit. p. 619.) Needless to say, the existence of employer-employee relationship is the jurisdictional foundation without which an indemnity is unauthorized. Schneider p. 569-570.) It is often difficult of determination, because purposely made so by employers bent on evading liability under the Compensation Acts. Hence, if the object of the law is to be accomplished with a liberal construction [3], the creation of the relationship should not be adjudged strictly in accordance with technical legal rules, but rather according to the actualities and realities of industrial or business practice. A laborer is told to work for the establishment by the person-in-charge, who in turn represented he had consulted with the manager. If the by-laws of the corporation had provided that no laborer may be hired unless with the written consent of the board of directors, would it be consonant with justice to deny such laborer compensation for injuries, upon the ground of lack of written authority? If so, a loophole has thereby been created in the Workmen's Compensation Law. That is perhaps the reason why apparent authority has been considered enough, what with the principles of estoppel lending persuasive support. (Schneider op. cit. Vol. I p. 623.) A parallel situation arose in Flores et al. v. La Compañia Maritima, 32 O. Gaz. No. 21 pp. 406-407. The heirs of Graciano Paninsoro demanded compensation because he died by reason of injuries received while working on the ship "Albay" belonging to and operated by the Compañia Maritima, a corporation. The facts were; "About the last week of the month of October, 1929, the defendant's boat, Albay, dropped anchor in the port of Cebu where the captain thereof, through a contractor or agent, recruited laborers who were to board the ship for the purpose of unloading her cargo upon arrival at the next port of call, Davao, and loading cargo for various ports of call on her return trip. Among those laborers was the appellant Eusebia Flores' husband, Graciano Paninsoro, who was earning a daily wage of P1.50 including subsistence." The defendant contended on appeal that Paninsoro was not its employee. This Court held, "There is not a least shadow of a doubt that the deceased was a laborer in the legal sense. He had been recruited by order of the captain of the ship and he was engage in a task of unloading the ship's cargo at the time of the accident. There can be no dispute that this kind of work is included in the business in which the appellee is engaged. That the deceased had been recruited or engaged by a contractor is of no moment because the latter, for purposes of the law, was in turn, represented the appellee." (Flores et al. v. La Compañia Maritima, 32 O. Gaz. No. 21 pp. 406-407.) It should be observed in the above litigation that neither the board of directors nor the President nor the manager of the defendant corporation had hired the laborer Paninsoro. It was the captain of the ship, thru an agent, that employed him. Now then, in this case as the person-in-charge of the factory (Kim) hired Carbajosa, the contract of employment should be upheld. There is further circumstance, implying ratification of the employment, that the acting manager of the corporation Atty. Mercado directed the payment by the corporation of Carbajosa's hospital expenses, amounting to P 2,000.00. Mercado's explanation that he did it out of pity, was not, and could not be accepted since the Asia Steel Corporation is not a charitable institution. In view of the foregoing, and the petitioner not having questioned the amount of compensation, the order of the Commission, should be, as it is hereby, affirmed with costs. So ordered. Padilla, Montemayor, Reyes, Jugo, Bautista Angelo, Labrador, Concepcion, and Reyes, J.B.L., JJ., concur.

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G.R. No. L-75038 August 23, 1993 ELIAS VILLUGA, RENATO ABISTADO, JILL MENDOZA, ANDRES ABAD, BENJAMIN BRIZUELA, NORLITO LADIA, MARCELO AGUILAN, DAVID ORO, NELIA BRIZUELA, FLORA ESCOBIDO, JUSTILITA CABANIG, and DOMINGO SAGUIT, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and BROAD STREET TAILORING and/or RODOLFO ZAPANTA, respondents. Balguma, Macasaet & Associates for petitioners. Teresita Gandionco Oledan for private respondents. NOCON, J.: A basic factor underlying the exercise of rights and the filing of claims for benefits under the Labor Code and other presidential issuances or labor legislations is the status and nature of one's employment. Whether an employer-employee relationship exist and whether such employment is managerial in character or that of a rank and file employee are primordial considerations before extending labor benefits. Thus, petitioners in this case seek a definitive ruling on the status and nature of their employment with Broad Street Tailoring and pray for the nullification of the resolution dated May 12, 1986 of the National Labor Relations Commissions in NLRC Case No. RB-IV- 21558-78-T affirming the decision of Labor Arbiter Ernilo V. Peñalosa dated May 28, 1979, which held eleven of them as independent contractors and the remaining one as employee but of managerial rank. The facts of the case shows that petitioner Elias Villuga was employed as cutter in the tailoring shop owned by private respondent Rodolfo Zapanta and known as Broad Street Tailoring located at Shaw Boulevard, Mandaluyong, Metro Manila. As cutter, he was paid a fixed monthly salary of P840.00 and a monthly transportation allowance of P40.00. In addition to his work as cutter, Villuga was assigned the chore of distributing work to the shop's tailors or sewers when both the shop's manager and assistant manager would be absent. He saw to it that their work conformed with the pattern he had prepared and if not, he had them redone, repaired or resewn. The other petitioners were either ironers, repairmen and sewers. They were paid a fixed amount for every item ironed, repaired or sewn, regardless of the time consumed in accomplishing the task. Petitioners did not fill up any time record since they did not observe regular or fixed hours of work. They were allowed to perform their work at home especially when the volume of work, which depended on the number of job orders, could no longer be coped up with. From February 17 to 22, 1978, petitioner Villuga failed to report for work allegedly due to illness. For not properly notifying his employer, he was considered to have abandoned his work. In a complaint dated March 27, 1978, filed with the Regional Office of the Department of Labor, Villuga claimed that he was refused admittance when he reported for work after his absence, allegedly due to his active participation in the union organized by private respondent's tailors. He further claimed that he was not paid overtime pay, holiday pay, premium pay for work done on rest days and holidays, service incentive leave pay and 13th month pay. Petitioners Renato Abistado, Jill Mendoza, Benjamin Brizuela and David Oro also claimed that they were dismissed from their employment because they joined the Philippine Social Security Labor Union (PSSLU). Petitioners Andres Abad, Norlito Ladia, Marcelo Aguilan, Nelia Brizuela, Flora Escobido, Justilita Cabaneg and Domingo Saguit claimed that they stopped working because private respondents gave them few pieces of work to do after learning of their membership with PSSLU. All the petitioners laid claims under the different labor standard laws which private respondent allegedly violated. On May 28, 1979, Labor Arbiter Ernilo V. Peñalosa rendered a decision ordering the dismissal of the complaint for unfair labor practices, illegal dismissal and other money claims except petitioner Villuga's claim for 13th month pay for the years 1976, 1977 and 1980. The dispositive portion of the decision states as follows: WHEREFORE, premises considered, the respondent Broad Street Tailoring and/or Rodolfo Zapanta are hereby ordered to pay complainant Elias Villuga the sum of ONE THOUSAND TWO HUNDRED FORTY-EIGHT PESOS AND SIXTY-SIX CENTAVOS (P1,248.66) representing his 13th month pay for the years 1976, 1977 and 1978. His other claims in this case are hereby denied for lack of merit. The complaint insofar as the other eleven (11) complainants are concerned should be, as it is hereby dismissed for want of jurisdiction. 1 On appeal, the National Labor Relations Commission affirmed the questioned decision in a resolution dated May 12, 1986, the dispositive portion of which states as follows: WHEREFORE, premises considered, the decision appealed from is, as it is hereby AFFIRMED, and the appeal dismissed.

Presiding Commissioner Guillermo C. Medina merely concurred in the result while Commissioner Gabriel M. Gatchalian rendered a dissenting opinion which states as follows: I am for upholding employer-employee relationship as argued by the complainants before the Labor Arbiter and on appeal. The further fact that the proposed decision recognizes complainant's status as piece-rate worker all the more crystallizes employer-employee relationship the benefits prayed for must be granted. 3 Hence, petitioners filed this instant certiorari case on the following grounds: 1. That the respondent National Labor Relations Commission abused its discretion when it ruled that petitioner/complainant, Elias Villuga falls within the category of a managerial employee; 2. . . . when it ruled that the herein petitioners were not dismissed by reason of their union activities; 3. . . . when it ruled that petitioners Andres Abad, Benjamin Brizuela, Norlito Ladia, Marcelo Aguilan, David Oro, Nelia Brizuela, Flora Escobido, Justilita Cabaneg and Domingo Saguit were not employees of private respondents but were contractors. 4. . . . when it ruled that petitioner Elias Villuga is not entitled to overtime pay and services for Sundays and Legal Holidays; and 5. . . . when it failed to grant petitioners their respective claims under the provisions of P.D. Nos. 925, 1123 and 851. 4 Under Rule 1, Section 2(c), Book III of the Implementing Rules of Labor Code, to be a member of a managerial staff, the following elements must concur or co-exist, to wit: (1) that his primary duty consists of the performance of work directly related to management policies; (2) that he customarily and regularly exercises discretion and independent judgment in the performance of his functions; (3) that he regularly and directly assists in the management of the establishment; and (4) that he does not devote his twenty per cent of his time to work other than those described above. Applying the above criteria to petitioner Elias Villuga's case, it is undisputed that his primary work or duty is to cut or prepare patterns for items to be sewn, not to lay down or implement any of the management policies, as there is a manager and an assistant manager who perform said functions. It is true that in the absence of the manager the assistant manager, he distributes and assigns work to employees but such duty, though involving discretion, is occasional and not regular or customary. He had also the authority to order the repair or resewing of defective item but such authority is part and parcel of his function as cutter to see to it that the items cut are sewn correctly lest the defective nature of the workmanship be attributed to his "poor cutting." Elias Villuga does not participate in policy-making. Rather, the functions of his position involve execution of approved and established policies. In Franklin Baker Company of the Philippines v. Trajano, 5 it was held that employees who do not participate in policy-making but are given ready policies to execute and standard practices to observe are not managerial employees. The test of "supervisory or managerial status" depends on whether a person possesses authority that is not merely routinary or clerical in nature but one that requires use of independent judgment. In other words, the functions of the position are not managerial in nature if they only execute approved and established policies leaving little or no discretion at all whether to implement said policies or not. 6 Consequently, the exclusion of Villuga from the benefits claimed under Article 87 (overtime pay and premium pay for holiday and rest day work), Article 94, (holiday pay), and Article 95 (service incentive leave pay) of the Labor Code, on the ground that he is a managerial employee is unwarranted. He is definitely a rank and file employee hired to perform the work of the cutter and not hired to perform supervisory or managerial functions. The fact that he is uniformly paid by the month does not exclude him from the benefits of holiday pay as held in the case of Insular Bank of America Employees Union v. Inciong. 7 He should therefore be paid in addition to the 13th month pay, his overtime pay, holiday pay, premium pay for holiday and rest day, and service incentive leave pay. As to the dismissal of the charge for unfair labor practices of private respondent consisting of termination of employment of petitioners and acts of discrimination against members of the labor union, the respondent Commission correctly held the absence of evidence that Mr. Zapanta was aware of petitioners' alleged union membership on February 22, 1978 as the notice of union existence in the establishment with proposal for recognition and collective bargaining negotiation was received by management only an March 3, 1978. Indeed, self-serving allegations without concrete proof that the private respondent knew of their membership in the union and accordingly reacted against their membership do not suffice. As to the other eleven petitioners, there is no clear showing that they were dismissed because the circumstances surrounding their dismissal were not even alleged. However, we disagree with the finding of respondent Commission that the eleven petitioners are independent contractors. For an employer-employee relationship to exist, the following elements are generally considered: "(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal and (4) the power to control the employee's conduct." 12

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Noting that the herein petitioners were oftentimes allowed to perform their work at home and were paid wages on a piece-rate basis, the respondent Commission apparently found the second and fourth elements lacking and ruled that "there is no employer-employee relationship, for it is clear that respondents are interested only in the result and not in the means and manner and how the result is obtained." Respondent Commission is in error. The mere fact that petitioners were paid on a piece-rate basis is no argument that herein petitioners were not employees. The term "wage" has been broadly defined in Article 97 of the Labor Code as remuneration or earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis. . . ." The facts of this case indicate that payment by the piece is just a method of compensation and does not define the essence of the relation. 13 The petitioners were allowed to perform their work at home does not likewise imply absence of control and supervision. The control test calls merely for the existence of a right to control the manner of doing the work, not the actual exercise of the right. 14 In determining whether the relationship is that of employer and employee or one of an independent contractor, "each case must be determined on its own facts and all the features of the relationship are to be considered." 15 Considering that petitioners who are either sewers, repairmen or ironer, have been in the employ of private respondent as early as 1972 or at the latest in 1976, faithfully rendering services which are desirable or necessary for the business of private respondent, and observing management's approved standards set for their respective lines of work as well as the customers' specifications, petitioners should be considered employees, not independent contractors. Independent contractors are those who exercise independent employment, contracting to do a piece of work according to their own methods and without being subjected to control of their employer except as to the result of their work. By the nature of the different phases of work in a tailoring shop where the customers' specifications must be followed to the letter, it is inconceivable that the workers therein would not be subjected to control. In Rosario Brothers, Inc. v. Ople, 16 this Court ruled that tailors and similar workers hired in the tailoring department, although paid weekly wages on piece work basis, are employees not independent contractors. Accordingly, as regular employees, paid on a piece-rate basis, petitioners are not entitled to overtime pay, holiday pay, premium pay for holiday/rest day and service incentive leave pay. Their claim for separation pay should also be defined for lack of evidence that they were in fact dismissed by private respondent. They should be paid, however, their 13th month pay under P.D. 851, since they are employees not independent contractors. WHEREFORE, in view of the foregoing reasons, the assailed decision of respondent National Labor Relations Commission is hereby MODIFIED by awarding — (a) in favor of petitioner Villuga, overtime pay, holiday pay, premium pay for holiday and rest day, service incentive leave pay and separation pay, in addition to his 13th month pay; and (b) in favor of the rest of the petitioners, their respective 13th month pay. The case is hereby REMANDED to the National Labor Relations Commission for the computation of the claims herein-above mentioned. SO ORDERED. Narvasa C.J., Padilla, Regalado and Puno, JJ., concur.

G.R. No. L-59229 August 22, 1991 HIJOS DE F. ESCAÑO INC., and PIER 8 ARRASTRE AND STEVEDORING SERVICES, INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL ORGANIZATION OF WORKINGMEN (NOWM) PSSLU-TUCP and ROLANDO VILLALOBOS, respondents. Beltran, Beltran & Beltran for petitioners. Bautista, Santiago & Associates for private respondents. FELICIANO, J.:p Petitioners seek to set aside the Decision of the National Labor Relations Commission ("NLRC") dated 11 November 1981, which affirmed the Decision of the Labor Arbiter dated 28 February 1980. Private respondent National Organization of Workingmen ("NOWM") PSSLU-TUCP is a labor organization that counts among its members a majority of the laborers of petitioner Pier 8 Arrastre & Stevedoring Services, Inc. ("PIER 8 A&S") consisting, among others, of stevedores, dockworkers, sweepers and forklift operators (hereinafter collectively referred to as "the stevedores").

On 31 July 1978, NOWM PSSLU-TUCP and about 300 stevedores filed with the then Ministry of Labor and Employment ("MOLE") a complaint 1 for unfair labor practice ULP and illegal dismissal against PIER 8 A&S. On 8 September 1978, NOWM PSSLU-TUCP amended its complaint to include the monetary claims of the stevedores for overtime compensation, legal holiday pay, emergency cost of living allowance, 13th month pay, night shift differential pay, and the difference between the salaries they received and that prescribed under the minimum wage law. The complaint was also amended to implead petitioner Hijos de F. Escaño, Inc. (Escaño) as respondent before the MOLE. 2 The MOLE Director in the National Capital Region certified for compulsory arbitration only the claims for illegal dismissal and ULP Considering that NOWM PSSLU-TUCP wanted to include as well the other issues it had raised in the amended complaint, it filed a motion for reconsideration. The motion was denied because money claims, according to the MOLE Director, should be brought against Escaño and PIER 8 A&S in a separate complaint. On the basis of the position papers submitted by the parties and the annexes attached thereto, the case was considered submitted for resolution. On 28 February 1980, the Labor Arbiter rendered a Decision 3 with the following dispositive portion:

WHEREFORE, consonant with the foregoing premises, the respondents Hijos de F. Escaño and Pier 8 Arrastre and Stevedoring Services, Inc. are hereby found guilty of committing acts of unfair labor practice and are ordered to jointly and severally reinstate all of the petitioners named in the amended complaint, with payment of full backwages counted from the time they were illegally dismissed which was on August 10, 1978 up to March 27, 1979, inclusive, when the petitioners admitted having received return to work notice from the respondent but refused to comply in view of the pendency of the present case, based on their individual rate at the time of their dismissal or on the minimum wage then prevailing whichever is more beneficial to them. For purposes of this decision, the Socio-Economic Analyst of this branch is hereby directed to compute the backwages of the individual petitioners as mandated herein, and to submit his report within ten 10 days from receipt hereof which shall form part of this award. SO ORDERED.

Petitioners appealed to the NLRC which, however, affirmed the Decision of the Labor Arbiter. The instant Petition for certiorari imputes grave abuse of discretion to the NLRC in upholding the finding of the Labor Arbiter that the stevedores are employees not only of PIER 8 A&S but also of Escaño. Petitioners also assail that portion of the Decision which directed them to reinstate the dismissed stevedores with the obligation to pay backwages from 10 August 1978 to 27 March 1979. In his Decision, the Labor Arbiter took the view that PIER 8 A&S was a labor only contractor and held that Escaño was the principal employer of the stevedores. For that reason, the Labor Arbiter adjudged the petitioners solidarily liable for payment of backwages to the stevedores as well as for reinstatement. While petitioner PIER 8 A&S does not dispute that the stevedores were its employees, petitioner Escaño denies the existence of an employer-employee relationship between it and the stevedores. Escaño therefore contends that liability, if any, should attach only to PIER 8 A&S. PIER 8 A&S is a corporation providing Arrastre and stevedoring services to vessels docked at Pier 8 of the Manila North Harbor. Prior to the incorporation of PIER 8 A&S two (2) stevedoring companies had been servicing vessels docking at Pier 8. One of these was the Manila Integrated Services, Inc. MISI which was servicing Escaño vessels, then berthing at Pier 8. The other was the San Nicolas Stevedoring and Arrastre Services, Inc. (SNSASI) which was servicing Compania Maritima vessels. Aside, of course, from MISI and SNSASI there were individual contractors known as the "cabos" who were operating in Pier 8. On 11 July 1974, the Philippine Port Authority ("PPA") was created pursuant to the policy of the State to implement an integrated program of port development for the entire country. 4 Towards this end, the PPA issued Administrative Order No. 1377 specifically adopting the policy of "one pier, one Arrastre and/or stevedoring company." MISI and SNSASI merged to form the Pier 8 Arrastre and Stevedoring Services, Inc. Sometime in June 1978, Escaño had transferred berth to Pier 16 with the approval of the PPA. PIER 8 A&S then started to encounter problems; it found its business severely reduced with only Compania Maritima vessels to service. Even if it had wanted to continue servicing the vessels of Escaño at Pier 16, that was simply not possible as there was another company exclusively authorized to handle and render Arrastre and stevedoring services at Pier 16. Because of its resulting manpower surplus, PIER 8 A&S altered the work schedule of its stevedores by rotating them. The rotation scheme was resisted by the stevedores, especially those formerly assigned to service Escaño vessels. It appears that the employees formerly belonging to MISI continued to service Escaño vessels in like manner that those employees formerly belonging to SNSASI continued to service Compania Maritima vessels, although MISI and SNSASI had already merged to form

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PIER 8 A&S The affected stevedores boycotted Pier 8 leading to their severance from employment by PIER 8 A&S on 10 August 1978. Their refusal to work continued even after they were served with a return-to-work order. The stevedores claim that since they had long been servicing Escaño vessels, i.e. from the time Escaño was exclusively serviced by MISI until the time MISI was merged with SNSASI to form PIER 8 A&S they should also be considered as employees of Escaño. Escaño disclaimed any employment relationship with the stevedores. In its Position Paper, Escaño alleged that the stevedores are included in the payroll of PIER 8 A&S and that the SSS and Medicare contributions of the stevedores are paid by PIER 8 A&S as well. It is firmly settled that the existence or non-existence of the employer-employee relationship is commonly to be determined by examination of certain factors or aspects of that relationship. These include: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of the power of dismissal; and (d) the presence or absence of a power to control the putative employee's conduct. 5 The Court notes that in finding against PIER 8 A&S and Escaño the Labor Arbiter relied solely on the position paper of the parties. The record of the case is bare of evidence tending to support such allegations; what is found in the record instead are the self-serving statements from both parties. It is not clear to the Court from examination of the record which entity paid the salaries of the stevedores. While the stevedores attached to their amended complaint a list of their daily wages set forth opposite their individual names under the heading "Hijos de F. Escaño Inc. and/or Pier 8 Arrastre and Stevedoring Services, Inc. 6 apparently to show that they are paid for their services by either or both of petitioners, they did not submit direct evidence, e.g., copies of payrolls and remittances to the SSS and Medicare, establishing this fact. Further, the stevedores failed to substantiate their allegation that the supervisors of Escaño had control over them while discharging their (stevedores') duties. On the contrary, their Position Paper submitted to the Labor Arbiter disclosed that the supervisors of Escaño "merely supervised" them. The record includes letters written by the National President of NOWM PSSLU-TUC— to which the stevedores belong-relating to collective bargaining and other operating matters, were all addressed to the management of PIER 8 A&S indicating that they recognized PIER 8 A&S as their employer. Specifically, in the letter dated 21 May 1977, the stevedores proposed that PIER 8 A&S recognize their union as the sole and exclusive representative of the stevedores for the purpose of collective bargaining. They also sought to submit for collective bargaining with PIER 8 A&S such other labor standard issues as wage increases, 13th month pay and vacation and sick leave pay. 7 The stevedores, however, now contend that PIER 8 A&S is not an independent contract but a labor only contractor. In their Amended Complaint and Position Paper, the stevedores alleged that:

(1) They perform their duties or work assignments under the close supervision of supervisors of respondent Hijos de F. Escaño Inc.; (2) The machineries, equipment, tools and other facilities complainants used, while in the performance of their jobs, are owned by respondent Hijos de F. Escaño, Inc.; (3) The jobs they were performing from the time they were first employed, until their dismissals, are principal phases of respondent's operations; and (4) The so-called Pier 8 Arrastre & Stevedoring Services, Inc. is a mere middleman; its vital role is purely one of supplying workers to respondent Hijos de F. Escaño, Inc. in short, a mere recruiting agent. Plainly, said contractor can be categorized as an agent of respondent Hijos de F. Escaño, Inc. as it performs activities directly related to the principal business of said Hijos de F. Escaño, Inc.

Although the record does not show that the stevedores had submitted any evidence to fortify their claim that PIER 8 A&S is a labor only contractor, the Labor Arbiter simply conceded that claim to be factual. The Labor Arbiter added that the business of PIER 8 A&S is "desirable and indispensable in the business of Hijos de F. Escaño and without [the stevedores], its vessels could not be operated." The Court is unable to agree with the conclusion reached by the Labor Arbiter, particularly that portion where the Labor Arbiter supposed stevedoring to be an indispensable part of the business of Escaño. Escaño is a corporation engaged in inter-island shipping business, being the operator of the Escaño Shipping Lines. It was not alleged, nor has it been shown, that Escaño or any other shipping company is also engaged in Arrastre and stevedoring services. Stevedoring is not ordinarily included in the business of transporting goods, it (stevedoring) being a special kind of service which involves the loading unloading of cargo on or from a vessel on port. It consists of the handling of cargo from the hold of the ship to the dock, in case of pier-side unloading, or to a barge, in case of unloading at sea. The loading on a ship of outgoing cargo is also part of stevedoring work. 8 Arrastre, upon the other hand, involves the handling of cargo deposited on the wharf or between the establishment of the consignee or shipper and the ships tackle. 9 Considering that a shipping company is not normally or customarily engaged in stevedoring and arrastre activities either for itself or other vessels, it contracts with other companies offering those services. The employees,

however, of the stevedoring and/or arrastre company should not be deemed the employees of the shipping company, in the absence of any showing, that the arrastre and/or stevedoring company in fact acted as an agent only of the shipping company. No such showing was made in this case. We turn next to the stevedores' contention that PIER 8 A&S is guilty of ULP. In this respect, the Labor Arbiter had found that:

Now comes the issue of unfair labor practice. This Labor Arbiter believes that respondents are guilty as charged. The unfair labor practice acts of the respondents started when they came to know that the petitioners have organized themselves and affiliated with the NOWM Subsequent acts of the respondents like requiring the petitioners to disaffiliate with the NOWM and affiliate with the General Maritime Stevedores Union and later on to Independent Workers Union, requiring them to sign applications for membership therein, they were threatened and coerced, are all acts of unfair labor practices. Thereafter, the petitioners' working schedules were rotated when the respondent Hijos de F. Escaño transferred to Pier 16 through the alleged approval of the Philippine Port Authority and later on the said petitioners were left without work, were all in furtherance of such unfair labor practice acts. ... 10

Both the Constitution and the Labor Code guarantee to the stevedores a right to self-organization. It was unlawful for PIER 8 A&S to deprive them of that right by its undue interference. The Constitution (Article III, Section 7) expressly recognizes the right of employees, whether of the public or the private sector, to form unions. Article 248 of the Labor Code provides: Art. 248. Unfair labor practices of employers. — It shall be unlawful for an employer to commit any of the following unfair labor practice: (a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization; (b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization; (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizations or supporters; (e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.

xxx xxx xxx (Emphasis supplied.) Not only was PIER 8 A&S guilty of ULP; it was also liable for illegal dismissal. PIER 8 A&S did not obtain prior clearance from the MOLE before it dismissed the stevedores, as required by the law then in force which read: Section 1. Requirement for shutdown or dismissal. — No employer may shut down his establishment or dismiss any of his employees with at least one year of service during the last two years, whether the service is broken or continuous, without prior clearance issued therefor in accordance with this Rule. Any provision in a collective bargaining agreement dispensing with the clearance requirement shall be null and void. Section 2. Shutdown or dismissal without clearance. — Any shutdown or dismissal without prior clearance shall be conclusively presumed to be a termination of employment without a just cause. The Regional Director shall, in such case, order the immediate reinstatement of the employee and the payment of his wages from the time of the shutdown or dismissal until the time of reinstatement. 11 B.P. Blg. 130 amended the Labor Code on 4 September 1981 by abolishing the requirement of prior clearance from the MOLE but since the dismissal of the stevedores was effected prior to the promulgation of B.P. Blg. 130, PIER 8 A&S was then bound to comply with the old law. The Court, interpreting Sections 1 and 2 above quoted, has consistently held that a dismissal without said clearance shall be conclusively presumed a termination without just cause. 12 The record is bare of any evidence that could compel the Court to overturn the factual findings of the Labor Arbiter on this point. WHEREFORE, considering the absence of an employer-employee relationship between Hijos de F. Escaño, Inc. and private respondents, the Decision of the Labor Arbiter dated 28 February 1980 in NLRC Case No. RB-IV-2326-79 and the Decision of the NLRC dated 11 November 1981 are hereby MODIFIED so that only Pier 8 Arrastre & Stevedoring Services, Inc. shall be liable for reinstatement and payment of backwages. As so modified, both Decisions are hereby AFFIRMED. No costs. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

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G.R. No. L-41182-3 April 16, 1988 DR. CARLOS L. SEVILLA and LINA O. SEVILLA, petitioners-appellants, vs. THE COURT OF APPEALS, TOURIST WORLD SERVICE, INC., ELISEO S.CANILAO, and SEGUNDINA NOGUERA, respondents-appellees. SARMIENTO , J.: The petitioners invoke the provisions on human relations of the Civil Code in this appeal by certiorari. The facts are beyond dispute:

xxx xxx xxx On the strength of a contract (Exhibit A for the appellant Exhibit 2 for the appellees) entered into on Oct. 19, 1960 by and between Mrs. Segundina Noguera, party of the first part; the Tourist World Service, Inc., represented by Mr. Eliseo Canilao as party of the second part, and hereinafter referred to as appellants, the Tourist World Service, Inc. leased the premises belonging to the party of the first part at Mabini St., Manila for the former-s use as a branch office. In the said contract the party of the third part held herself solidarily liable with the party of the part for the prompt payment of the monthly rental agreed on. When the branch office was opened, the same was run by the herein appellant Una 0. Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the Tourist World Service, Inc. On or about November 24, 1961 (Exhibit 16) the Tourist World Service, Inc. appears to have been informed that Lina Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the Tourist World Service considered closing down its office. This was firmed up by two resolutions of the board of directors of Tourist World Service, Inc. dated Dec. 2, 1961 (Exhibits 12 and 13), the first abolishing the office of the manager and vice-president of the Tourist World Service, Inc., Ermita Branch, and the second,authorizing the corporate secretary to receive the properties of the Tourist World Service then located at the said branch office. It further appears that on Jan. 3, 1962, the contract with the appellees for the use of the Branch Office premises was terminated and while the effectivity thereof was Jan. 31, 1962, the appellees no longer used it. As a matter of fact appellants used it since Nov. 1961. Because of this, and to comply with the mandate of the Tourist World Service, the corporate secretary Gabino Canilao went over to the branch office, and, finding the premises locked, and, being unable to contact Lina Sevilla, he padlocked the premises on June 4, 1962 to protect the interests of the Tourist World Service. When neither the appellant Lina Sevilla nor any of her employees could enter the locked premises, a complaint wall filed by the herein appellants against the appellees with a prayer for the issuance of mandatory preliminary injunction. Both appellees answered with counterclaims. For apparent lack of interest of the parties therein, the trial court ordered the dismissal of the case without prejudice. The appellee Segundina Noguera sought reconsideration of the order dismissing her counterclaim which the court a quo, in an order dated June 8, 1963, granted permitting her to present evidence in support of her counterclaim. On June 17,1963, appellant Lina Sevilla refiled her case against the herein appellees and after the issues were joined, the reinstated counterclaim of Segundina Noguera and the new complaint of appellant Lina Sevilla were jointly heard following which the court a quo ordered both cases dismiss for lack of merit, on the basis of which was elevated the instant appeal on the following assignment of errors: I. THE LOWER COURT ERRED EVEN IN APPRECIATING THE NATURE OF PLAINTIFF-APPELLANT MRS. LINA O. SEVILLA'S COMPLAINT. II. THE LOWER COURT ERRED IN HOLDING THAT APPELLANT MRS. LINA 0. SEVILA'S ARRANGEMENT (WITH APPELLEE TOURIST WORLD SERVICE, INC.) WAS ONE MERELY OF EMPLOYER-EMPLOYEE RELATION AND IN FAILING TO HOLD THAT THE SAID ARRANGEMENT WAS ONE OF JOINT BUSINESS VENTURE. III. THE LOWER COURT ERRED IN RULING THAT PLAINTIFF-APPELLANT MRS. LINA O. SEVILLA IS ESTOPPED FROM DENYING THAT SHE WAS A MERE EMPLOYEE OF DEFENDANT-APPELLEE TOURIST WORLD SERVICE, INC. EVEN AS AGAINST THE LATTER. IV. THE LOWER COURT ERRED IN NOT HOLDING THAT APPELLEES HAD NO RIGHT TO EVICT APPELLANT MRS. LINA O. SEVILLA FROM THE A. MABINI OFFICE BY TAKING THE LAW INTO THEIR OWN HANDS. V. THE LOWER COURT ERRED IN NOT CONSIDERING AT .ALL APPELLEE NOGUERA'S RESPONSIBILITY FOR APPELLANT LINA O. SEVILLA'S FORCIBLE DISPOSSESSION OF THE A. MABINI PREMISES. VI. THE LOWER COURT ERRED IN FINDING THAT APPELLANT APPELLANT MRS. LINA O. SEVILLA SIGNED MERELY AS GUARANTOR FOR RENTALS. On the foregoing facts and in the light of the errors asigned the issues to be resolved are:

1. Whether the appellee Tourist World Service unilaterally disco the telephone line at the branch office on Ermita; 2. Whether or not the padlocking of the office by the Tourist World Service was actionable or not; and 3. Whether or not the lessee to the office premises belonging to the appellee Noguera was appellees TWS or TWS and the appellant. In this appeal, appealant Lina Sevilla claims that a joint bussiness venture was entered into by and between her and appellee TWS with offices at the Ermita branch office and that she was not an employee of the TWS to the end that her relationship with TWS was one of a joint business venture appellant made declarations showing: 1. Appellant Mrs. Lina 0. Sevilla, a prominent figure and wife of an eminent eye, ear and nose specialist as well as a imediately columnist had been in the travel business prior to the establishment of the joint business venture with appellee Tourist World Service, Inc. and appellee Eliseo Canilao, her compadre, she being the godmother of one of his children, with her own clientele, coming mostly from her own social circle (pp. 3-6 tsn. February 16,1965). 2. Appellant Mrs. Sevilla was signatory to a lease agreement dated 19 October 1960 (Exh. 'A') covering the premises at A. Mabini St., she expressly warranting and holding [sic] herself 'solidarily' liable with appellee Tourist World Service, Inc. for the prompt payment of the monthly rentals thereof to other appellee Mrs. Noguera (pp. 14-15, tsn. Jan. 18,1964). 3. Appellant Mrs. Sevilla did not receive any salary from appellee Tourist World Service, Inc., which had its own, separate office located at the Trade & Commerce Building; nor was she an employee thereof, having no participation in nor connection with said business at the Trade & Commerce Building (pp. 16-18 tsn Id.). 4. Appellant Mrs. Sevilla earned commissions for her own passengers, her own bookings her own business (and not for any of the business of appellee Tourist World Service, Inc.) obtained from the airline companies. She shared the 7% commissions given by the airline companies giving appellee Tourist World Service, Lic. 3% thereof aid retaining 4% for herself (pp. 18 tsn. Id.) 5. Appellant Mrs. Sevilla likewise shared in the expenses of maintaining the A. Mabini St. office, paying for the salary of an office secretary, Miss Obieta, and other sundry expenses, aside from desicion the office furniture and supplying some of fice furnishings (pp. 15,18 tsn. April 6,1965), appellee Tourist World Service, Inc. shouldering the rental and other expenses in consideration for the 3% split in the co procured by appellant Mrs. Sevilla (p. 35 tsn Feb. 16,1965). 6. It was the understanding between them that appellant Mrs. Sevilla would be given the title of branch manager for appearance's sake only (p. 31 tsn. Id.), appellee Eliseo Canilao admit that it was just a title for dignity (p. 36 tsn. June 18, 1965- testimony of appellee Eliseo Canilao pp. 38-39 tsn April 61965-testimony of corporate secretary Gabino Canilao (pp- 2-5, Appellants' Reply Brief) Upon the other hand, appellee TWS contend that the appellant was an employee of the appellee Tourist World Service, Inc. and as such was designated manager. 1

xxx xxx xxx The petitioners now claim that the respondent Court, in sustaining the lower court, erred. Specifically, they state: I THE COURT OF APPEALS ERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT "THE PADLOCKING OF THE PREMISES BY TOURIST WORLD SERVICE INC. WITHOUT THE KNOWLEDGE AND CONSENT OF THE APPELLANT LINA SEVILLA ... WITHOUT NOTIFYING MRS. LINA O. SEVILLA OR ANY OF HER EMPLOYEES AND WITHOUT INFORMING COUNSEL FOR THE APPELLANT (SEVILIA), WHO IMMEDIATELY BEFORE THE PADLOCKING INCIDENT, WAS IN CONFERENCE WITH THE CORPORATE SECRETARY OF TOURIST WORLD SERVICE (ADMITTEDLY THE PERSON WHO PADLOCKED THE SAID OFFICE), IN THEIR ATTEMP AMICABLY SETTLE THE CONTROVERSY BETWEEN THE APPELLANT (SEVILLA) AND THE TOURIST WORLD SERVICE ... (DID NOT) ENTITLE THE LATTER TO THE RELIEF OF DAMAGES" (ANNEX "A" PP. 7,8 AND ANNEX "B" P. 2) DECISION AGAINST DUE PROCESS WHICH ADHERES TO THE RULE OF LAW. II THE COURT OF APPEALS ERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN DENYING APPELLANT SEVILLA RELIEF BECAUSE SHE HAD "OFFERED TO WITHDRAW HER COMP PROVIDED THAT ALL CLAIMS AND COUNTERCLAIMS LODGED BY BOTH APPELLEES WERE WITHDRAWN." (ANNEX "A" P. 8) III THE COURT OF APPEALS ERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN DENYING-IN FACT NOT PASSING AND RESOLVING-APPELLANT SEVILLAS CAUSE OF ACTION FOUNDED ON ARTICLES 19, 20 AND 21 OF THE CIVIL CODE ON RELATIONS. IV THE COURT OF APPEALS ERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN DENYING APPEAL APPELLANT SEVILLA RELIEF YET NOT RESOLVING HER CLAIM THAT SHE WAS IN JOINT VENTURE WITH TOURIST WORLD SERVICE INC. OR AT

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LEAST ITS AGENT COUPLED WITH AN INTEREST WHICH COULD NOT BE TERMINATED OR REVOKED UNILATERALLY BY TOURIST WORLD SERVICE INC. 6 As a preliminary inquiry, the Court is asked to declare the true nature of the relation between Lina Sevilla and Tourist World Service, Inc. The respondent Court of see fit to rule on the question, the crucial issue, in its opinion being "whether or not the padlocking of the premises by the Tourist World Service, Inc. without the knowledge and consent of the appellant Lina Sevilla entitled the latter to the relief of damages prayed for and whether or not the evidence for the said appellant supports the contention that the appellee Tourist World Service, Inc. unilaterally and without the consent of the appellant disconnected the telephone lines of the Ermita branch office of the appellee Tourist World Service, Inc. 7 Tourist World Service, Inc., insists, on the other hand, that Lina SEVILLA was a mere employee, being "branch manager" of its Ermita "branch" office and that inferentially, she had no say on the lease executed with the private respondent, Segundina Noguera. The petitioners contend, however, that relation between the between parties was one of joint venture, but concede that "whatever might have been the true relationship between Sevilla and Tourist World Service," the Rule of Law enjoined Tourist World Service and Canilao from taking the law into their own hands, 8 in reference to the padlocking now questioned. The Court finds the resolution of the issue material, for if, as the private respondent, Tourist World Service, Inc., maintains, that the relation between the parties was in the character of employer and employee, the courts would have been without jurisdiction to try the case, labor disputes being the exclusive domain of the Court of Industrial Relations, later, the Bureau Of Labor Relations, pursuant to statutes then in force. 9 In this jurisdiction, there has been no uniform test to determine the evidence of an employer-employee relation. In general, we have relied on the so-called right of control test, "where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end." 10 Subsequently, however, we have considered, in addition to the standard of right-of control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship. 11 The records will show that the petitioner, Lina Sevilla, was not subject to control by the private respondent Tourist World Service, Inc., either as to the result of the enterprise or as to the means used in connection therewith. In the first place, under the contract of lease covering the Tourist Worlds Ermita office, she had bound herself in solidum as and for rental payments, an arrangement that would be like claims of a master-servant relationship. True the respondent Court would later minimize her participation in the lease as one of mere guaranty, 12 that does not make her an employee of Tourist World, since in any case, 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 that event, the parties must be bound by some other relation, but certainly not employment. In the second place, and as found by the Appellate Court, '[w]hen the branch office was opened, the same was run by the herein appellant Lina O. Sevilla payable to Tourist World Service, Inc. by any airline for any fare brought in on the effort of Mrs. Lina Sevilla. 13 Under these circumstances, it cannot be said that Sevilla was under the control of Tourist World Service, Inc. "as to the means used." Sevilla in pursuing the business, obviously relied on her own gifts and 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 Tourist World. Unlike an employee then, who earns a fixed salary usually, she earned compensation in fluctuating amounts depending on her booking successes. The fact that Sevilla had been designated 'branch manager" does not make her, ergo, Tourist World's employee. As we said, employment is determined by the right-of-control test and certain economic parameters. But titles are weak indicators. In rejecting Tourist World Service, Inc.'s arguments however, we are not, as a consequence, accepting Lina Sevilla's own, that is, that the parties had embarked on a joint venture or otherwise, a partnership. And apparently, Sevilla herself did not recognize the existence of such a relation. In her letter of November 28, 1961, she expressly 'concedes your [Tourist World Service, Inc.'s] right to stop the operation of your branch office 14 in effect, accepting Tourist World Service, Inc.'s control over the manner in which the business was run. A joint venture, including a partnership, presupposes generally a of standing between the joint co-venturers or partners, in which each party has an equal proprietary interest in the capital or property contributed 15 and where each party exercises equal rights in the conduct of the business. 16 furthermore, the parties did not hold themselves out as partners, and the building itself was embellished with the electric sign "Tourist World Service, Inc. 17in lieu of a distinct partnership name. It is the Court's considered opinion, that when the petitioner, Lina Sevilla, agreed to (wo)man the private respondent, Tourist World Service, Inc.'s Ermita office, she must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services "in representation or on behalf of another. 18 In the case at bar, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. And as we said, Sevilla herself based on her letter of November 28, 1961, pre-assumed her principal's

authority as owner of the business undertaking. We are convinced, considering the circumstances and from the respondent Court's recital of facts, that the ties had contemplated a principal agent relationship, rather than a joint managament or a partnership.. But unlike simple grants of a power of attorney, the agency that we hereby declare to be compatible with the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency having been created for mutual interest, of the agent and the principal. 19 It appears that Lina Sevilla is a bona fide travel agent herself, and as such, she had acquired an interest in the business entrusted to her. Moreover, she had assumed a personal obligation for the operation thereof, holding herself solidarily liable for the payment of rentals. She continued the business, using her own name, after Tourist World had stopped further operations. Her interest, obviously, is not to the commissions she earned as a result of her business transactions, but one that extends to the very subject matter of the power of management delegated to her. It is an agency that, as we said, cannot be revoked at the pleasure of the principal. Accordingly, the revocation complained of should entitle the petitioner, Lina Sevilla, to damages. As we have stated, the respondent Court avoided this issue, confining itself to the telephone disconnection and padlocking incidents. Anent the disconnection issue, it is the holding of the Court of Appeals that there is 'no evidence showing that the Tourist World Service, Inc. disconnected the telephone lines at the branch office. 20 Yet, what cannot be denied is the fact that Tourist World Service, Inc. did not take pains to have them reconnected. Assuming, therefore, that it had no hand in the disconnection now complained of, it had clearly condoned it, and as owner of the telephone lines, it must shoulder responsibility therefor. The Court of Appeals must likewise be held to be in error with respect to the padlocking incident. For the fact that Tourist World Service, Inc. was the lessee named in the lease con-tract did not accord it any authority to terminate that contract without notice to its actual occupant, and to padlock the premises in such fashion. As this Court has ruled, the petitioner, Lina Sevilla, had acquired a personal stake in the business itself, and necessarily, in the equipment pertaining thereto. Furthermore, Sevilla was not a stranger to that contract having been explicitly named therein as a third party in charge of rental payments (solidarily with Tourist World, Inc.). She could not be ousted from possession as summarily as one would eject an interloper. The Court is satisfied that from the chronicle of events, there was indeed some malevolent design to put the petitioner, Lina Sevilla, in a bad light following disclosures that she had worked for a rival firm. To be sure, the respondent court speaks of alleged business losses to justify the closure '21 but there is no clear showing that Tourist World Ermita Branch had in fact sustained such reverses, let alone, the fact that Sevilla had moonlit for another company. What the evidence discloses, on the other hand, is that following such an information (that Sevilla was working for another company), Tourist World's board of directors adopted two resolutions abolishing the office of 'manager" and authorizing the corporate secretary, the respondent Eliseo Canilao, to effect the takeover of its branch office properties. On January 3, 1962, the private respondents ended the lease over the branch office premises, incidentally, without notice to her. It was only on June 4, 1962, and after office hours significantly, that the Ermita office was padlocked, personally by the respondent Canilao, on the pretext that it was necessary to Protect the interests of the Tourist World Service. " 22 It is strange indeed that Tourist World Service, Inc. did not find such a need when it cancelled the lease five months earlier. While Tourist World Service, Inc. would not pretend that it sought to locate Sevilla to inform her of the closure, but surely, it was aware that after office hours, she could not have been anywhere near the premises. Capping these series of "offensives," it cut the office's telephone lines, paralyzing completely its business operations, and in the process, depriving Sevilla articipation therein. This conduct on the part of Tourist World Service, Inc. betrays a sinister effort to punish Sevillsa it had perceived to be disloyalty on her part. It is offensive, in any event, to elementary norms of justice and fair play. We rule therefore, that for its unwarranted revocation of the contract of agency, the private respondent, Tourist World Service, Inc., should be sentenced to pay damages. Under the Civil Code, moral damages may be awarded for "breaches of contract where the defendant acted ... in bad faith. 23 We likewise condemn Tourist World Service, Inc. to pay further damages for the moral injury done to Lina Sevilla from its brazen conduct subsequent to the cancellation of the power of attorney granted to her on the authority of Article 21 of the Civil Code, in relation to Article 2219 (10) thereof — ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. 24 ART. 2219. Moral damages 25 may be recovered in the following and analogous cases:

xxx xxx xxx (10) Acts and actions refered into article 21, 26, 27, 28, 29, 30, 32, 34, and 35. The respondent, Eliseo Canilao, as a joint tortfeasor is likewise hereby ordered to respond for the same damages in a solidary capacity.

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Insofar, however, as the private respondent, Segundina Noguera is concerned, no evidence has been shown that she had connived with Tourist World Service, Inc. in the disconnection and padlocking incidents. She cannot therefore be held liable as a cotortfeasor. The Court considers the sums of P25,000.00 as and for moral damages,24 P10,000.00 as exemplary damages, 25 and P5,000.00 as nominal 26 and/or temperate 27 damages, to be just, fair, and reasonable under the circumstances. WHEREFORE, the Decision promulgated on January 23, 1975 as well as the Resolution issued on July 31, 1975, by the respondent Court of Appeals is hereby REVERSED and SET ASIDE. The private respondent, Tourist World Service, Inc., and Eliseo Canilao, are ORDERED jointly and severally to indemnify the petitioner, Lina Sevilla, the sum of 25,00.00 as and for moral damages, the sum of P10,000.00, as and for exemplary damages, and the sum of P5,000.00, as and for nominal and/or temperate damages. Costs against said private respondents. SO ORDERED. Yap (Chairman), Melencio-Herrera, Paras and Padilla, JJ., concur. G.R. No. L-16600 December 27, 1961 ILOILO CHINESE COMMERCIAL SCHOOL, petitioner, vs. LEONORA FABRIGAR and THE WORKMEN'S COMPENSATION COMMISSION, respondents. Luis G. Hofileña for petitioner. J. T. de Leon for respondents. PAREDES, J.: As a result of the death of Santiago Fabrigar, on June 28, 1956, his heirs in the person of Leonora Fabrigar (common-law wife) and their children, filed a claim for compensation with the Workmen's Compensation Commission, Case No. 1085, W.C.C., entitled "Leonora Fabrigar, et al., Claimants, vs. Iloilo Chinese Commercial School, Respondent." In this claim, it was alleged that the cause of death was " pulmonary tuberculosis contracted during and as a result of his employment as janitor." The Hearing Officer of the WCC denied the claim and dismissed the case, finding that the claimant failed to prove the casual effect of employment and death; nothing was shown that the disease was contracted in line of duty; that whatever evidence claimant presented about the cause of death was only a mere suggestion that progressively developed from tuberculosis with heart trouble to a sudden fatal turn, ending up for the cause of "beriberi adult" at the time of death, as per certification of Sanitary Inspector Dr. P. E. Labitoria, of Dao, Capiz (Exhibits C & 4). The heirs of Santiago Fabrigar appealed the decision with the Workmen's Compensation Commission which, on November 12, 1959, rendered judgment reversing the decision of its Hearing Officer, making the following findings of facts: That Santiago Fabrigar had been employed from 1947 to March 12, 1956, as a janitor-messenger of the respondent Iloilo Chinese Commercial School, his work consisting of sweeping and scrubbing the floors, cleaning the classrooms and the school premises, and other janitorial chores; on March 11, 1956, preparatory to graduation day, he carried desks and chairs from the classrooms to the auditorium, set the curtains and worked harder and faster than usual; that although he felt shortness of breath and did not feel very well that day, he continued working at the request of the overseer of respondent, that on the following day he reported for work, but on March 13, he spat blood and stopped working; that from April 29, 1956 to May 15, 1956, he was under treatment by Dr. Quirico Villareal "for far advanced pulmonary tuberculosis and for heart disease"; and that previous to said treatment, he was attended by Dr. Jaranilla for pulmonary tuberculosis. The Commission concluded that the short period of intervention between his last day of work (March 13, 1956) when he spat blood and his death on June 28, 1956, due to pulmonary tuberculosis, indicated that he had been suffering from such disease even during the time he was employed by the respondent and considering the strenuous work he performed, his employment as janitor aggravated his pre-existing illness; that although here is a discrepancy between the cause of death "beriberi adult," as appearing in the death Certificate and the testimony of Dr. Villareal, the latter deserves more credence, because the information (cause of death) was given by the sanitary inspector who did not, in any way, examine the deceased before or after his death. The Commission, therefore, ordered the respondent Chinese Commercial School, Inc., in said case —

1. To pay to the claimant, for and in behalf of her minor children by the deceased, namely, Carlito, Gloria, Rosita and Ernesto, all surnamed Fabrigar, the amount of TWO THOUSAND FOUR HUNDRED NINETY SIX and 00/00 Pesos (P2,496.00) as Death benefits; and 2. To pay to the Commission the amount of P25.00 as fees pursuant to Section 55 of Act 3428, as amended.

The above decision is now before Us for Review on a Writ of Certiorari, after the motion for reconsideration had been denied, petitioner alleging that the Commission erred:

1. In disregarding completely the evidentiary value of the death certificate of the attending physician which was presented as evidence by both claimants and respondent (Exhibits C & 4) to prove the cause of death; 2. In finding that the cause of death of said Santiago Fabrigar was tuberculosis and was contracted during and as a result of the nature of his employment; 3. In holding that the herein petitioner was the employer of the deceased Santiago Fabrigar; and 4. In not holding that the herein petitioner is exempt from the scope of the Workmen's Compensation Law.lawphil.net

Petitioner contends that the preponderance of evidence on the matters involved in this case, militates in its favor. Considering the doctrine that the Commission, like the Court of Industrial Relations, is bound not by the rule of preponderance of evidence as in ordinary civil cases, but by the rule of substantial evidence (Ang Tibay vs. CIR, 69 Phil. 635; Phil. Newspaper Guild vs. Evening News, 47 Off. Gaz. No. 12, p. 6188; Secs. 43 & 46 Rep. Act No. 772, W.C. Act), petitioner's pretension is without merit. Substantial evidence supports the decision of the Commission. While seemingly there exists an inconsistency in the cause of death, as appearing in the death certificate by Dr. Labitoria and in Dr. Villareal's diagnosis, it is a fact found by the Commission, that the Sanitary Inspector did not examine the deceased before and after his death. "Undoubtedly," says the Commission, "the information that he died of beriberi adult, as appearing in the death certificate was given because it appears that the deceased had also edema of the extremities (swollen legs)." The evidence of record sustains the following findings of the Commission, is Fabrigar's cause of death to wit —

The short period of time intervening between his last day of work (March 13, 1956) when he spat blood and his death June 28, 1956 due to pulmonary tuberculosis indicates that he had been suffering from the disease even during the time that he was employed by the respondent. Considering the strenuous work that he performed while in the service of the respondents and the unusually long hours of work he rendered (6:00 p.m. to 1:30 p.m. and from 2:00 p.m. to 6:00 p.m. or 7:00 p.m.) beyond the normal and legal working hours, we find that his employment aggravated his pre-existing illness and brought about his death. Moreover, our conclusion finds support in the fact that immediately preceding his last day of work with the respondent, he had an unusually hard day lifting desks and other furnitures and assisting in the preparations for the graduation exercises of the school. Considering also his complaints during that day (March 11), among which was "shortness of breath", we may also say that his work affected an already existing heart ailment.

We find no plausible reason for altering or disturbing the above factual findings of the Commission, in the present appeal by certiorari. It is claimed that actually the deceased was not an employee of the petitioner, but by the Iloilo Chinese Chamber of Commerce which was the one that furnished the janitor service in the premises of its buildings, including the part thereof occupied by the petitioner; that the Chamber of Commerce paid the salaries of janitors, including the deceased; that the petitioner could not afford to pay rentals of its premises and janitor due to limited finances depended largely on funds raised among its Board of Directors, the Chinese Chamber of Commerce and Chinese nationals who helped the school. In other words, it is pretended that the deceased was not an employee of the school but of the Chinese Chamber of Commerce which should be the one responsible for the compensation of the deceased. On one hand, according to the Commission, there is substantial proof to the effect that Fabrigar was employed by and rendered service for the petitioner and was an employee within the purview of the Workmen's Compensation Law. On the other hand, the most important test of employer-employee relation is the power to control the employee's conduct. The records disclose that the person in charge (encargado) of the respondent school supervised the deceased in his work and had control over the manner he performed the same. It is finally contended that petitioner is an institution devoted solely for learning and is not an industry within the meaning of the Workmen's Compensation Law. Consequently, it is argued, it is exempt from the scope of the same law. Considering that this factual question has not been properly put in issue before the Commission, it may not now be entertained in this appeal for the first time (Atlantic Gulf, etc. vs. CIR, et al., L-16992, Dec. 23, 1961, citing International Oil Factory Union v. Hon. Martinez, et al., L-15560, Dec. 31, 1960). The decision of the Commission does not show that the matter was taken up. We are at a loss to state whether the issue was raised in the motion for reconsideration filed with the Commission, because the said motion is not found in the record before us. And the resolution to the motion for reconsideration does not touch this question. IN VIEW HEREOF, the appeal interposed by the petitioner is dismissed, and the decision appealed from is affirmed, with costs against the herein petitioner. Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon and De Leon, JJ., concur. Padilla, J., took no part.

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[G.R. No. 116960. April 2, 1996]

BERNARDO JIMENEZ and JOSE JIMENEZ, as Operators of JJ’s TRUCKING, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, PEDRO JUANATAS and FREDELITO JUANATAS, respondents.

SYLLABUS 1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE NLRC, GENERALLY RESPECTED; EXCEPT WHEN AT ODDS WITH THE LABOR ARBITER. - The review of labor cases elevated to us on certiorari is confined to questions of jurisdiction or grave abuse of discretion. As a rule, this Court does not review supposed errors in the decision of the NLRC which raise factual issues, because factual findings of agencies exercising quasi-judicial functions are accorded not only respect but even finality, aside from the consideration that the Court is essentially not a trier of facts. However, in the case at bar, a review of the records thereof with an assessment of the facts is necessary since the factual findings of the NLRC and the labor arbiter are at odds with each other. 2. ID.; ID.; BURDEN OF PROOF; THE DEBTOR WHO PLEADS AFFIRMATIVE ALLEGATION OF PAYMENT OF OBLIGATION MUST PROVE THE SAME; WHEN THE BURDEN SHIFTS TO THE CREDITOR. - As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. When the existence of a debt is fully established by the evidence contained in the record, the burden of proving that it has been extinguished by payment devolves upon the debtor who offers such a defense to the claim of the creditor. Where the debtor introduces some evidence of payment, the burden of going forward with the evidence - as distinct from the general burden of proof- shifts to the creditor, who is then under a duty of producing some evidence to show non-payment. In the instant case, the right of respondent to be paid a commission is not disputed by petitioners. Although private respondents admit receipt of partial payment, petitioners still have to present proof of full payment. Where the defendant sued for a debt admits that the debt was originally owed, and pleads payment in whole or in part, it is incumbent upon him to prove such payment. That a plaintiff admits that some payments have been made does not change the burden of proof. The defendant still has the burden of establishing payments beyond those admitted by plaintiff. The positive testimony of a creditor may be sufficient of itself to show non-payment, even when met by indefinite testimony of the debtor. Similarly, the testimony of the debtor may also be sufficient to show payment, but, where his testimony is contradicted by the other party or by a disinterested witness, the issue may be determined against the debtor since he has the burden of proof. The testimony of the debtor creating merely an inference of payment will not be regarded as conclusive on that issue. Hence, for failure to present evidence to prove payment, petitioners defaulted in their defense and in effect admitted the allegations of private respondents. 3. ID.; ID.; RULES OF ADMISSIBILITY; DOCUMENTS NOT PROPERLY ACCOMPLISHED HAS NO PROBATIVE VALUE. - The testimony of petitioners which merely denied the claim of private respondents, unsupported by documentary evidence, is not sufficient to establish payment. Although petitioners submitted a notebook showing the alleged vales of private respondents for the year 1990, the same is inadmissible and cannot be given probative value considering that it is not properly accomplished, is undated and unsigned, and is thus uncertain as to its origin and authenticity. 4. LABOR LAW AND SOCIAL LEGISLATION; EMPLOYER-EMPLOYEE RELATIONSHIP; ELEMENTS; NOT PRESENT IN CASE AT BAR. - In determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, with the control test assuming primacy in the overall consideration. In the case at bar, the aforementioned elements are not present. APPEARANCES OF COUNSEL Fernandez law Office for petitioners. Alejandro M. Villamil for private respondents. D E C I S I O N REGALADO, J.: This petition for certiorari seeks the annulment of the decision of respondent National Labor Relations Commission (NLRC), dated May 27, 1994, as well as its resolution, dated August 8, 1994, denying petitioner’s motion for reconsideration,1 which assailed decision affirmed with modifications the adverse decision of the labor arbiter against herein petitioners.

On June 29, 1990, herein private respondents Pedro and Fredelito Juanatas, father and son, filed a claim for unpaid wages/commissions, separation pay and damages against JJ’ s Trucking and/or Dr. Bernardo Jimenez. Said respondents, as complainants therein, alleged that in December, 1987, they were hired by herein petitioner Bernardo Jimenez as driver! mechanic and helper, respectively, in his trucking firm, JJ Trucking. They were assigned to a ten-wheeler truck to haul soft drinks of Coca-Cola Bottling Company and paid on commission basis, initially fixed at 17% but later increased to 20% in 1988. Private respondents further alleged that for the years 1988 and 1989 they received only a partial commission of P84,000.00 from petitioners’ total gross income of almost P1,000,000.00 for the said two years. Consequently, with their commission for that period being computed at 20% of said income, there was an unpaid balance to them of P106,211.86; that until March, 1990 when their services were illegally terminated, they were further entitled to P15,050.309 which, excluding the partial payment of P7,000.00, added up to a grand total of P114,261.86 due and payable to them; and that petitioners refusal to pay their aforestated commission was a ploy to unjustly terminate them. Disputing the complaint, petitioners contend that respondent Fredelito Juanatas was not an employee of the firm but was merely a helper of his father Pedro; that all commissions for 1988 and 1989, as well as those up to March, 1990, were duly paid; and that the truck driven by respondent Pedro Juanatas was sold to one Winston Flores in 1991 and, therefore, private respondents were not illegally dismissed.2 After hearings duly conducted, and with the submission of the parties’ position/supporting papers, Labor Arbiter Roque B. de Guzman rendered a decision dated March 9, 1993, with this decretal portion: “WHEREFORE, decision is hereby issued ordering respondents JJ’s Trucking and/or Dr. Bernardo Jimenez to pay jointly and severally complainant Pedro Juanatas a separation pay of FIFTEEN THOUSAND FIFTY (P15,050.00) PESOS, plus attorney’s fee equivalent to ten percent (10%) of the award. The complaint of Fredelito Juanatas is hereby dismissed for lack of merit.”3 On appeal filed by private respondents, the NLRC modified the decision of the labor arbiter and disposed as follows: “PREMISES CONSIDERED, the Decision of March 9, 1993 is hereby MODIFIED, to wit: 1. Complainant Fredelito Juanatas is hereby declared respondents’ employee and shares in (the) commission and separation pay awarded to complainant Pedro Juanatas, his father. 2. Respondent JJ’s Trucking and Dr. Bernardo Jimenez are jointly and severally liable to pay complainants their unpaid commissions in the total amount of Eighty Four Thousand Three Hundred Eighty Seven Pesos and 05/100 (P84,387.05). 3. The award of attorney’s fees is reduced accordingly to eight thousand four hundred thirty eight pesos and 70/100 (P8,438.70). 4. The other findings stand affirmed.”4 Petitioners’ motion for reconsideration having been denied thereafter in public respondent’s resolution dated August 8, 1994,5 petitioners have come to us in this recourse, raising for resolution the issues as to whether or not respondent NLRC committed grave abuse of discretion in ruling (a) that private respondents were not paid their commissions in full, and (b) that respondent Fredelito Juanatas was an employee of JJ’s Trucking. The review of labor cases elevated to us on certiorari is confined to questions ofjurisdiction or grave abuse of discretion.6 As a rule, this Court does not review supposed errors in the decision of the NLRC which raise factual issues, because factual findings of agencies exercising quasi-judicial functions are accorded not only respect but even finality,7 aside from the consideration that the Court is essentially not a trier of facts. However, in the case at bar, a review of the records thereof with an assessment of the facts is necessary since the factual findings of the NLRC and the labor arbiter are at odds with each other.8 On the first issue, we find no reason to disturb the findings of respondent NLRC that the entire amount of commissions was not paid, this by reason of the evident failure of herein petitioners to present evidence thatfull payment thereof has been made. It is a basic rule in evidence that each party must prove his affirmative allegations. Since the burden of evidence lies with the party who asserts an affirmative allegation, the plaintiff or complainant has to prove his affirmative allegation, in the complaint and the defendant or respondent has to prove the affirmative allegations in his affirmative defenses and counterclaim. Considering that petitioners herein assert that the disputed commissions have been paid, they have the bounden duty to prove that fact. As a general rule, one who pleads payment has the burden of proving it.9 Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment.10 The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment.11 When the existence of a debt is fully established by the evidence contained in the record, the burden of proving that it has been extinguished by payment devolves upon the debtor who offers such a defense to the claim of the creditor.12 Where the debtor

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introduces some evidence of payment, the burden of going forward with the evidence - as distinct from the general burden of proof - shifts to the creditor, who is then under a duty of producing some evidence to show non-payment.13 In the instant case, the right of respondent Pedro Juanatas to be paid a commission equivalent to 17%, later increased to 20%, of the gross income is not disputed by petitioners. Although private respondents admit receipt of partial payment, petitioners still have to present proof of full payment. Where the defendant sued for a debt admits that the debt was originally owed, and pleads payment in whole or in part, it is incumbent upon him to prove such payment. That a plaintiff admits that some payments have been made does not change the burden of proof. The defendant still has the burden of establishing payments beyond those admitted by plaintiff.14 The testimony of petitioners which merely denied the claim of private respondents, unsupported by documentary evidence, is not sufficient to establish payment. Although petitioners submitted a notebook showing the alleged vales of private respondents for the year 1990,15 the same is inadmissible and cannot be given probative value considering that it is not properly accomplished, is undated and unsigned, and is thus uncertain as to its origin and authenticity.16 The positive testimony of a creditor may be sufficient of itself to show non-payment, even when met by indefinite testimony of the debtor. Similarly, the testimony of the debtor may also be sufficient to show payment, but, where his testimony is contradicted by the other party or by a disinterested witness, the issue may be determined against the debtor since he has the burden of proof. The testimony of the debtor creating merely an inference of payment will not be regarded as conclusive on that issue.17 Hence, for failure to present evidence to prove payment, petitioners defaulted in their defense and in effect admitted the allegations of private respondents. With respect to the second issue, however, we agree with petitioners that the NLRC erred in holding that the son, Fredelito, was an employee of petitioners. We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct,18 with the control test assuming primacy in the overall consideration. In the case at bar, the aforementioned elements are not present. The agreement was between petitioner JJ’s Trucking and respondent Pedro Juanatas. The hiring of a helper was discretionary on the part of Pedro. Under their contract, should he employ

G.R. No. 114787 June 2, 1995 MAM REALTY DEVELOPMENT CORPORATION and MANUEL CENTENO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and CELSO B. BALBASTRO respondents. VITUG, J.: A prime focus in the instant petition is the question of when to hold a director or officer of a corporation solidarily obligated with the latter for a corporate liability. The case originated from a complaint filed with the Labor Arbiter by private respondent Celso B. Balbastro against herein petitioners, MAM Realty Development Corporation ("MAM") and its Vice President Manuel P. Centeno, for wage differentials, "ECOLA," overtime pay, incentive leave pay, 13th month pay (for the years 1988 and 1989), holiday pay and rest day pay. Balbastro alleged that he was employed by MAM as a pump operator in 1982 and had since performed such work at its Rancho Estate, Marikina, Metro Manila. He earned a basic monthly salary of P1,590.00 for seven days of work a week that started from 6:00 a.m. to up until 6:00 p.m. daily. MAM countered that Balbastro had previously been employed by Francisco Cacho and Co., Inc., the developer of Rancho Estates. Sometime in May 1982, his services were contracted by MAM for the operation of the Rancho Estates' water pump. He was engaged, however, not as an employee, but as a service contractor, at an agreed fee of P1,590.00 a month. Similar arrangements were likewise entered into by MAM with one Rodolfo Mercado and with a security guard of Rancho Estates III Homeowners' Association. Under the agreement, Balbastro was merely made to open and close on a daily basis the water supply system of the different phases of the subdivision in accordance with its water rationing scheme. He worked for only a maximum period of three hours a day, and he made use of his free time by offering plumbing services to the residents of the subdivision. He was not at all

a helper, he would be responsible for the latter’s compensation. With or without a helper, respondent Pedro Juanatas was entitled to the same percentage of commission. Respondent Fredelito Juanatas was hired by his father, Pedro, and the compensation he received was paid by his father out of the latter’s commission. Further, Fredelito was not subject to the control and supervision of and dismissal by petitioners but of and by his father. Even the Solicitor General, in his comment, agreed with the finding of the labor arbiter that Fredelito was not an employee of petitioners, to wit: “Public respondent committed grave abuse of discretion in holding that said private respondent is an employee of JJ’s Trucking on the ground that, citing Article 281 of the Labor Code, ‘Fredelito’s functions as helper was (sic) necessary and desirable to respondent’s trucking business.’ “In the first place, Article 281 of the Labor Code does not refer to the basic factors that must underlie every existing employer-employee relationship, the absence of any of which will negate such existence. It refers instead to the qualifications of ‘(A)n employee who is allowed to work after a probationary period’ and who, as a consequence, ‘shall be considered a regular employee.’ Secondly, the test in determining the existence of an employee-employer relationship is not the necessity and/or desirability of one’s functions in relation to an employer’s business, but ‘(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. The latter is the most important element’ (Singer Sewing Machine Company vs. Drilon, 193 SCRA 270, 275; Deferia vs. NLRC, 194 SCRA 531, 525; Ecal vs. NLRC, 224, 228; Hijos De F. Escano, Inc. vs. NLRC, 224 SCRA 781, 785). The aforequoted pertinent findings of the Labor Arbiter indicate (that) the foregoing requirements do not exist between petitioner and private respondent Fredelito Juanatas. Thus, the labor arbiter stated that respondent Fredelito Juanatas was never hired by petitioners. Instead the former’s services were availed of by respondent Pedro Juanatas his father, who, at the same time, supervised and controlled his work and paid his commissions. Respondent NLRC’s ruling did not traverse these findings of the labor arbiter.”19 WHEREFORE, the judgment of respondent National Labor Relations Commission is hereby AFFIRMED, with the MODIFICATION that paragraph 1 thereof, declaring Fredelito Juanatas an employee of petitioners and entitled to share in the award for commission and separation pay, is hereby DELETED. SO ORDERED. Romero, Puno and Mendoza, JJ., concur. Torres, Jr. J., on leave.

subject to the control or supervision of MAM for, in fact, his work could so also be done either by Mercado or by the security guard. On 23 May 1990, prior to the filing of the complaint, MAM executed a Deed of Transfer, 1 effective 01 July 1990, in favor of the Rancho Estates Phase III Homeowners Association, Inc., conveying to the latter all its rights and interests over the water system in the subdivision. In a decision, dated 23 December 1991, the Labor Arbiter dismissed the complaint for lack of merit. On appeal to it, respondent National Labor Relations Commission ("NLRC") rendered judgment (a) setting aside the questioned decision of the Labor Arbiter and (b) referring the case, pursuant to Article 218(c) of the Labor Code, to Arbiter Cristeta D. Tamayo for further hearing and submission of a report within 20 days from receipt of the Order. 2 On 21 March 1994, respondent Commissioner, after considering the report of Labor Arbiter Tamayo, ordered:

WHEREFORE, the respondents are hereby directed to pay jointly and severally complainant the sum of P86,641.05 as above-computed. 3

The instant petition asseverates that respondent NLRC gravely abused its discretion, amounting to lack or excess of jurisdiction, (1) in finding that an employer-employee relationship existed between petitioners and private respondent and (2) in holding petitioners jointly and severally liable for the money claims awarded to private respondent.

Once again, the matter of ascertaining the existence of an employer-employee relationship is raised. Repeatedly, we have said that this factual issue is determined by:

(a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and

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(d) the employer's power to control the employee with respect to the result of the work to be done and to the means and methods by which the work is to be accomplished.

We see no grave abuse of discretion on the part of NLRC in finding a full satisfaction, in the case at bench, of the criteria to establish that employer-employee relationship. The power of control, the most important feature of that relationship and, here, a point of controversy, refers merely to the existence of the power and not to the actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the employee; it is enough that the former has a right to wield the power. 4 It is hard to accede to the contention of petitioners that private respondent should be considered totally free from such control merely because the work could equally and easily be done either by Mercado or by the subdivision's security guard. Not without any significance is that private respondent's employment with MAM has been registered by petitioners with the Social Security System. 5

It would seem that the money claims awarded to private respondent were computed from 06 March 1988 to 06 March 1991, 6 the latter being the date of the filing of the complaint. The NLRC might have missed the transfer by MAM of the water system to the Homeowners Association on 01 July 1990, a matter that would appear not to be in dispute. Accordingly, the period for the computation of the money claims should only be for the period from 06 March 1988 to 01 July 1990 (when petitioner corporation could be deemed to have ceased from the activity for which private respondent was employed), and petitioner corporation should, instead, be made liable for the employee's separation pay equivalent to one-half (1/2) month pay for every year of service. 7 While the transfer was allegedly due to MAM's financial constraints, unfortunately for petitioner corporation, however, it failed to sufficiently establish that its business losses or financial reverses were serious enough that possibly can warrant an exemption under the law. 8 We agree with petitioners, however, that the NLRC erred in holding Centeno jointly and severally liable with MAM. A corporation, being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent. True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases: 9

1. When directors and trustees or, in appropriate cases, the officers of a corporation — (a) vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons. 10

2. When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto. 11 3. When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation. 12 4 When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action. 13

In labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith. 14

In the case at Bench, there is nothing substantial on record that can justify, prescinding from the foregoing, petitioner Centeno's solidary liability with the corporation. An extra note. Private respondent avers that the questioned decision, having already become final and executory, could no longer be reviewed by this Court. The petition before us has been filed under Rule 65 of the Rules of Court, there being no appeal, or any other plain, speedy and adequate remedy in the ordinary course of law from decisions of the National Labor Relations Commission; it is a relief that is open so long as it is availed of within a reasonable time. WHEREFORE, the order of 21 March 1994 is MODIFIED. The case is REMANDED to the NLRC for a re-computation of private respondent's monetary awards, which, conformably with this opinion, shall be paid solely by petitioner MAM Realty Development Corporation. No special pronouncement on costs. SO ORDERED. Feliciano, Romero, Melo and Francisco, JJ., concur.

Art. 283. Closure of establishment and reduction of personnel.— The employer may also terminate the employment of any

employee due to the installation of labor saving devices, redundancy, retrenchment to prevent loses or the closing or cessation

of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this

Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the

intended date thereof. In case of termination due to the installation of labor saving devices or redundancy the worker affected

thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for

every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of

operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall

be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A

fraction of at least six (6) months shall be considered one (1) whole year.

[G.R. No. 119930. March 12, 1998] INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division, Cebu City), LABOR ARBITER NICASIO P. ANINON and PANTALEON DE LOS REYES, respondents. D E C I S I O N BELLOSILLO, J.: On 17 June 1994 respondent Labor Arbiter dismissed for lack of jurisdiction NLRC RAB-VII Case No. 03-0309-94 filed by private respondent Pantaleon de los Reyes against petitioner Insular Life Assurance Co., Ltd. (INSULAR LIFE), for illegal dismissal and nonpayment of salaries and back wages after findings no employer-employee relationship between De los Reyes and petitioner INSULAR LIFE.i[1] On appeal by private respondent, the order of dismissal was reversed by the National Labor Relations Commission (NLRC) which ruled that respondent De los Reyes was an employee of petitioner.i[2] Petitioner’s motion for reconsideration having been denied, the NLRC remanded the case to the Labor Arbiter for hearing on the merits. Seeking relief through this special civil action for certiorari with prayer for a restraining order and/or preliminary injunction, petitioner now comes to us praying for annulment of the decision of respondent NLRC dated 3 March 1995 and its Order dated 6 April 1995 denying the motion for reconsideration of the decision. It faults NLRC for acting without jurisdiction and/or with grave abuse of discretion when, contrary to established facts and pertinent law and jurisprudence, it reversed the decision of the Labor Arbiter and held instead that the complaint was properly filed as an employer-employee relationship existed between petitioner and private respondent. Petitioner reprises the stand it assumed below that it never had any employer-employee relationship with private respondent, this being an express agreement between them in the agency contracts, particularly reinforced by the stipulation therein de los Reyes was allowed discretion to devise ways and means to fulfill his obligations as agent and would be paid commission fees based on his actual output. It further insists that the nature of this work status as described in the contracts had already been squarely resolved by the Court in the earlier case of Insular Life Assurance Co., Ltd. v. NLRC and Basiao i[3]where the complainant therein, Melecio Basiao, was similarly situated as respondent De los Reyes in that he was appointed first as an agent and then promoted as agency manager, and the contracts under which he was appointed contained terms and conditions Identical to those of De los Reyes. Petitioner concludes that since Basiao was declared by the Court to be an independent contractor and not an employee of petitioner, there should be no reason why the status of De los Reyes herein vis-à-vis petitioner should not be similarly determined. We reject the submissions of petitioner and hold that respondent NLRC acted appropriately within the bounds of the law. The records of the case are replete with telltale indicators of an existing employer-employee relationship between the two parties despite written contractual disavowals. These facts are undisputed: on 21 August 1992 petitioner entered into an agency contract with respondent Pantaleon de los Reyesi[4] authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which he would be paid compensation in the form of commissions. The contract was prepared by petitioner in its entirety and De los Reyes merely signed his conformity thereto. It contained the stipulation that no employer-employee relationship shall be created between the parties and that the agent shall be free to exercise his own judgment as to time, place and means of soliciting insurance. De los Reyes however was prohibited by petitioner from working for any other life insurance company, and violation of this stipulation was sufficient ground for termination of the contract. Aside from soliciting insurance for the petitioner, private respondent was required to submit to the former all completed applications for insurance within ninety (90) consecutive days, deliver policies, receive and collect initial premiums and balances of first year premiums, renewal premiums, deposits on applications and payments on policy loans. Private respondent was also bound to turn over to the company immediately any and all sums of money collected by him. In a written communication by petitioner to respondent De los Reyes, the latter was urged to register with the Social Security System as a self-employed individual as provided under PD No. 1636.i[5] On 1 March 1993 petitioner and private respondent entered into another contracti[6]where the latter was appointed as Acting Unit Manager under its office – the Cebu DSO V (157). As such, the duties and responsibilities of De los Reyes included the

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recruitment, training, organization and development within his designated territory of a sufficient number of qualified, competent and trustworthy underwriters, and to supervise and coordinate the sales efforts of the underwriters in the active solicitation of new business and in the furtherance of the agency’s assigned goals. It was similarly provIded in the management contract that the relation of the acting unit manager and/or the agents of his unit to the company shall be that of independent contractor. If the appointment was terminated for any reason other than for cause, the acting unit manager would be reverted to agent status and assigned to any unit. As in the previous agency contract, De los Reyes together with his unit force was granted freedom to exercise judgment as to time, place and means of soliciting insurance. Aside from being granted override commissions, the acting unit manager was given production bonus, development allowance and a unit development financing scheme euphemistically termed “financial assistance” consisting of payment to him of a free portion of P300.00 per month and a valIdate portion of P1,200.00. While the latter amount was deemed as an advance against expected commissions, the former was not and would be freely given to the unit manager by the company only upon fulfillment by him of certain manpower and premium quota requirements. The agents and underwriters recruited and trained by the acting unit manager would be attached to the unit but petitioner reserved the right to determine if such assignment would be made or, for any reason, to reassign them elsewhere. Aside from soliciting insurance, De los Reyes was also expressly obliged to participate in the company’s conservation program, i.e., preservation and maintenance of existing insurance policies, and to accept moneys duly receipted on agent’s receipts provided the same were turned over to the company. As long as he was unit manager in an acting capacity, De los Reyes was prohibited from working for other life insurance companies or with the government. He could not also accept a managerial or supervisory position in any firm doing business in the Philippines without the written consent of petitioner. Private respondent worked concurrently as agent and Acting Unit Manager until he was notified by petitioner on 18 November 1993 that his services were terminated effective 18 December 1993. On 7 March 1994 he filed a complaint before the Labor Arbiter on the ground that he was illegally dismissed and that he was not paid his salaries and separation pay. Petitioner filed a motion to dismiss the complaint of De los Reyes for lack of jurisdiction, citing the absence of employer-employee relationship. it reasoned out that based on the criteria for determining the existence of such relationship or the so-called “four-fold test,” i.e., (a) selection and engagement of employee, (b) payment of wages, (c) power of dismissal, and, (d) power of control, De los Reyes was not an employee but an independent contractor. On 17 June 1994 the motion of petitioner was granted by the Labor Arbiter and the case was dismissed on the ground that the element of control was not sufficiently established since the rules and guidelines set by petitioner in its agency agreement with respondent De los Reyes were formulated only to achieve the desired result without dictating the means or methods of attaining it. Respondent NLRC however appreciated the evidence from a different perspective. It determined that respondent De los Reyes was under the effective control of petitioner in the critical and most important aspects of his work as Unit Manager. This conclusion was derived from the provisions in the contract which appointed private respondent as Acting Unit Manager, to wit: (a) De los Reyes was to serve exclusively the company, therefore, he was not an independent contractor; (b) he was required to meet certain manpower and production quota; and, (c) petitioner controlled the assignment to and removal of soliciting agents from his unit. The NLRC also took into account other circumstances showing that petitioner exercised employer’s prerogatives over De los Reyes, e.g., (a) limiting the work of respondent De los Reyes to selling a life insurance policy known as “Salary Deduction Insurance” only to members of the Philippine National Police, public and private school teachers and other employees of private companies; (b) assigning private respondent to a particular place and table where he worked whenever he has not in the field; (c) paying private respondent during the period of twelve (12) months of his appointment as Acting Unit Manager the amount of P1,500.00 as Unit Development Financing of which 20% formed his salary and the rest, i.e., 80%, as advance of his expected commissions; and (d) promising that upon completion of certain requirements, he would be promoted to Unit Manager with the right of petitioner to revert him to agent status when warranted. Parenthetically, both petitioner and respondent NLRC treated the agency contract and the management contract entered into between petitioner and De los Reyes as contracts of agency. We however hold otherwise. Unquestionably there exist major distinctions between the two agreements. While the first has the earmarks of an agency contract, the second is far removed from the concept of agency in that provided therein are conditionalities that indicate an employer-employee relationship. the NLRC therefore was correct in finding that private respondent was an employee of petitioner, but this holds true only insofar as the management contract is concerned. In view thereof, he Labor Arbiter has jurisdiction over the case. It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the “employee” is an independent contractor when the terms of agreement

clearly show otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should be.i[7] In determining the status of the management contract, the “four-fold test” on employment earlier mentioned has to be applied. Petitioner contends that De los Reyes was never required to go through the pre-employment procedures and that the probationary employment status was reserved only to employees of petitioner. On this score, it insists that the first requirement of selection and engagement of the employee was not met. A look at the provisions of the contract shows that private respondent was appointed as Acting Unit Manager only upon recommendation of the District Manager.i[8] This indicates that private respondent was hired by petitioner because of the favorable endorsement of its duly authorized officer. But, this approbation could only have been based on the performance of De los Reyes with petitioner was nothing more than a trial or probationary period for his eventual appointment as Acting Unit Manager of petitioner. Then, again, the very designation of the appointment of private respondent as “acting” unit manager obviously implies a temporary employment status which may be made permanent only upon compliance with company standards such as those enumerated under Sec. 6 of the management contract.i[9] On the matter of payment of wages, petitioner points out that respondent was compensated strictly on commission basis, the amount of which was totally dependent on his total output. But, the manager’s contract speaks differently. Thus –

4. Performance Requirements.- To maintain your appointment as Acting Unit Manager you must meet the following manpower and production requirements: Quarter Active Calendar Year Production Agents Cumulative FYP Production 1ST 2 P125,000 2ND 3 250,000 3RD 4 375,000 4TH 5 500,000

5.4 Unit Development Financing (UDF). – As an Acting Unit Manager you shall be given during the first 12 months of your appointment a financial assistance which is composed of two parts:

5.4.1 Free Portion amounting to P300 per month, subject to your meeting prescribed minimum performance requirement on manpower and premium production. The free portion is not payable by you.

5.4.2 Validate Portion amounting to P1,200 per month, also subject to meeting the same prescribed minimum performance requirements on manpower and premium production. The valIdated portion is an advance against expected compensation during the UDF period and thereafter as may be necessary.

The above provisions unquestionably demonstrate that the performance requirement imposed on De los Reyes was applicable quarterly while his entitlement to the free portion (P300) and the validated portion (P1,200) was monthly starting on the first month of the twelve (12) months of the appointment. Thus, it has to be admitted that even before the end of the first quarter and prior to the so-called quarterly performance evaluation, private respondent was already entitled to be paid both the free and validated portions of the UDF every month because his production performance could not be determined until after the lapse of the quarter involved. This indicates quite clearly that the unit manager’s quarterly performance had no bearing at all on his entitlement at least to the free portion of the UDF which for all intents and purposes comprised the salary regularly paid to him by petitioner. Thus it cannot be validly claimed that the financial assistance consisting of the free portion of the UDF was purely dependent on the premium production of the agent. Be that as it may, it is worth considering that the payment of compensation by way of commission does not militate against the conclusion that private respondent was an employee of petitioner. Under Art. 97 of the Labor Code, “wage” shall mean “however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, price or commission basis x x x x” i[10] As to the matter involving the power of dismissal and control by the employer, the latter of which is the most important of the test, petitioner asserts that its termination of De los Reyes was but an exercise of its inherent right as principal under the contracts and that the rules and guIdelines it set forth in the contract cannot, by any stretch of imagination, be deemed as an exercise of control over the private respondent as these were merely directives that fixed the desired result without dictating the means or method to be employed in attaining it. The following factual findings of the NLRCi[11] however contradict such claims: A perusal of the appointment of complainant as Acting Unit Manager reveals that:

1. Complainant was to “exclusively” serve respondent company. Thus it is provIded: x x x 7..7 Other causes of Termination: This Appointment may likewise be terminated for any of the following causes: x x x 7..7..2. Your entering

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the service of the government or another life insurance company; 7..7..3. Your accepting a managerial or supervisory position in any firm doing business in the Philippines without the written consent of the Company; x x x

2. Complainant was required to meet certain manpower and production quotas. 3. Respondent (herein petitioner) controlled the assignment and removal of soliciting agents to and from

complainant’s unit, thus: x x x 7..2. Assignment of Agents: Agents recruited and trained by you shall be attached to your unit unless for reasons of Company policy, no such assignment should be made. The Company retains the exclusive right to assign new soliciting agents appointed and assigned to the saId unit x x x x

It would not be amiss to state the respondent’s duty to collect the company’s premiums using company receipts under Sec. 7.4 of the management contract is further evIdence of petitioner’s control over respondent, thus: xxxx 7.4 Acceptance and Remittance of Premiums. – x x x x the Company hereby authorizes you to accept and receive sums of money in payment of premiums, loans, deposits on applications, with or without interest, due from policy holders and applicants for insurance, and the like, specially from policyholders of business solicited and sold by the agents attached to your unit provIded however, that all such payments shall be duly receipted by you on the corresponding Company’s “Agents’ Receipt” to be provIded you for this purpose and to be covered by such rules and accounting regulations the Company may issue from time to time on the matter. Payments received by you shall be turned over to the Company’s designated District or Service Office clerk or directly to the Home Office not later than the next working day from receipt thereof x x x x Petitioner would have us apply our ruling in Insular Life Assurance Co., Ltd. v. NLRC and Basiao i[12] to the instant case under the doctrine of stare decisis, postulating that both cases involve parties similarly situated and facts which are almost Identical. But we are not convinced that the cited case is on all fours with the case at bar. In Basiao, the agent was appointed Agency Manager under an Agency Manager Contract. To implement his end of the agreement, Melecio Basiao organized an agency office to which he gave the name M. Basiao and Associates. The Agency Manager Contract practically contained the same terms and conditions as the Agency Contract earlier entered into, and the Court observed that “drawn from the terms of the contract they had entered into, (which) either expressly or by necessary implication, Basiao (was) made the master of his own time and selling methods, left to his own judgment the time, place and means of soliciting insurance, set no accomplishment quotas and compensated him on the bases of results obtained. He was not bound to observe any schedule of working hours or report to any regular station; he could seek and work on his prospects anywhere and anytime he chose to and was free to adopt the selling methods he deemed most effective.” Upon these premises, Basiao was considered as agent – an independent contractor – of petitioner INSULAR LIFE. Unlike Basiao, herein respondent De los Reyes was appointed Acting Unit Manager, not agency manager. There is not evidence that to implement his obligations under the management contract, De los Reyes had organized an office. Petitioner in fact has admitted that it provIded De los Reyes a place and a table at its office where he reported for and worked whenever he was not out in the field. Placed under petitioner’s Cebu District Service Office, the unit was given a name by petitioner – De los Reyes and Associates – and assigned Code No. 11753 and Recruitment No. 109398. Under the managership contract, De los Reyes was obliged to work exclusively for petitioner in life insurance solicitation and was imposed premium production quotas. Of course, the acting unit manager could not underwrite other lines of insurance because his Permanent Certificate of Authority was for life insurance only and for no other. He was proscribed from accepting a managerial or supervisory position in any other office including the government without the written consent of petitioner. De los Reyes could only be promoted to permanent unit manager if he met certain requirements and his promotion was recommended by the petitioner’s District Manager and Regional Manager and approved by its Division Manager. As Acting Unit Manager, De los Reyes performed functions beyond mere

solicitation of insurance business for petitioner. As found by the NLRC, he exercised administrative functions which were necessary and beneficial to the business of INSULAR LIFE. In Great Pacific Life Insurance Company v. NLRCi[13] which is closer in application that Basiao to this present controversy, we found that “the relationships of the Ruiz brothers and Grepalife were those of employer-employee. First, their work at the time of their dismissal as zone supervisor and district manager was necessary and desirable to the usual business of the insurance company. They were entrusted with supervisory, sales and other functions to guard Grepalife’s business interests and to bring in more clients to the company, and even with administrative functions to ensure that all collections, reports and data are faithfully brought to the company x x x x A cursory reading of their respective functions as enumerated in their contracts reveals that the company practically dictates the manner by which their jobs are to be carried out x x x x” We need elaborate no further. Exclusivity of service, control of assignments and removal of agents under private respondent’s unit, collection of premiums, furnishing of company facilities and materials as well as capital described as Unit Development Fund are but hallmarks of the management system in which herein private respondent worked. This obtaining, there is no escaping the conclusion that private respondent Pantaleon de los Reyes was an employee of herein petitioner. WHEREFORE, the petition of Insular Life Assurance Company, Ltd., is DENIED and the Decision of the National Labor Relations Commission dated 3 March 1995 and its Order of 6 April 1996 sustaining it are AFFIRMED. Let this case be REMANDED to the Labor Arbiter a quo who is directed to hear and dispose of this case with deliberate dispatch in light of the views expressed herein. SO ORDERED. Davide, Jr. (Chairman), Vitug, Panganiban and Quisumbing, JJ., concur.