Labor RR

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 13

SSS Employees Association v Court of Appeals

Chester Cabalza recommends his visitors to please Held:


read the original & full text of the case cited. Xie
xie! The 1987 Constitution, in the Article on Social
Justice and Human Rights, provides that the State
SOCIAL SECURITY SYSTEM EMPLOYEES "shall guarantee the rights of all workers to self-
ASSOCIATION (SSSEA), DIONISION T. BAYLON, organization, collective bargaining and
RAMON MODESTO, JUANITO MADURA, REUBEN negotiations, and peaceful concerted activities,
ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, including the right to strike in accordance with
PLACIDO AGUSTIN, VIRGILIO MAGPAYO, law" [Art. XIII, Sec. 31].
petitioner, Resort to the intent of the framers of the organic
vs. law becomes helpful in understanding the
THE COURT OF APPEALS, SOCIAL SECURITY meaning of these provisions. A reading of the
SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC, proceedings of the Constitutional Commission that
BRANCH 98, QUEZON CITY, respondents. drafted the 1987 Constitution would show that in
recognizing the right of government employees to
G.R. No. 85279 organize, the commissioners intended to limit the
July 28, 1989 right to the formation of unions or associations
only, without including the right to strike.
Facts:
Considering that under the 1987 Constitution "the
On June 11, 1987, the SSS filed with the Regional civil service embraces all branches, subdivisions,
Trial Court of Quezon City a complaint for instrumentalities, and agencies of the
damages with a prayer for a writ of preliminary Government, including government-owned or
injunction against petitioners, alleging that on controlled corporations with original charters"
June 9, 1987, the officers and members of SSSEA [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180
staged an illegal strike and baricaded the where the employees in the civil service are
entrances to the SSS Building, preventing non- denominated as "government employees"] and
striking employees from reporting for work and that the SSS is one such government-controlled
SSS members from transacting business with the corporation with an original charter, having been
SSS; that the strike was reported to the Public created under R.A. No. 1161, its employees are
Sector Labor - Management Council, which part of the civil service [NASECO v. NLRC, G.R. Nos.
ordered the strikers to return to work; that the 69870 & 70295, November 24,1988] and are
strikers refused to return to work; and that the covered by the Civil Service Commission's
SSS suffered damages as a result of the strike. The memorandum prohibiting strikes. This being the
complaint prayed that a writ of preliminary case, the strike staged by the employees of the
injunction be issued to enjoin the strike and that SSS was illegal.
the strikers be ordered to return to work; that the
defendants (petitioners herein) be ordered to pay
damages; and that the strike be declared illegal. LUMANTA V NLRC

It appears that the SSSEA went on strike after the Luz Lumanta with 54 other retrenched employees, filed
a complaint for unpaid retrenchment or separation pay
SSS failed to act on the union's demands, which
against private Food Terminal, Inc. (“FTI”) with the
included: implementation of the provisions of the Department of Labor and Employment.
old SSS-SSSEA collective bargaining agreement
(CBA) on check-off of union dues; payment of The complaint was later amended to include charges of
underpayment of wages and non-payment of
accrued overtime pay, night differential pay and emergency cost of living allowances (ECOLA).
holiday pay; conversion of temporary or
contractual employees with six (6) months or FTI moved to dismiss the complaint on the ground
more of service into regular and permanent of lack of jurisdiction.
employees and their entitlement to the same It argued that being a government-owned and
salaries, allowances and benefits given to other controlled corporation, its employees are governed by
regular employees of the SSS; and payment of the the Civil Service Law not by the Labor Code, and that
claims arising from employment fall within the
children's allowance of P30.00, and after the SSS jurisdiction of the Civil Service Commission and not the
deducted certain amounts from the salaries of the Department of Labor and Employment.
employees and allegedly committed acts of
discrimination and unfair labor practices. The petitioners opposed the Motion to Dismiss
contending that:

Issue: Although FTI is a corporation owned and controlled by


the government, it has still the marks of a private
Whether or not employees of the Social Security corporation:
System (SSS) have the right to strike.
it directly hires its employees without seeking approval such employment are governed by the Labor Code and
from the Civil Service Commission and its personnel not by the Civil Service Rules and Regulations.
are covered by the Social Security System and not the
Government Service Insurance System.
PAPER INDUSTRIES CORP VS LAGUESMA
Petitioners also argued that being a government-owned
and controlled corporation without original charter,
private respondent FTI clearly falls outside the scope of Topic: Managerial Employees
the civil service as marked out in Section 2 (1), Article
IX of the 1987 Constitution. FACTS:

ISSUE: Whether or not a labor law claim against a Petitioner Paper Industries Corporation of the
government-owned and controlled corporation, such as Philippines is engaged in the manufacture of
private respondent FTI, falls within the jurisdiction of the paper and timber products
Department of Labor and Employment

HELD: PICOP-Bislig instituted a Petition for Certification


Election to determine the sole and exclusive
Labor Arbiter Isabel P. Oritiguerra issued an Order,
the dispositive part of which read:
bargaining agent of the supervisory and technical
staff employees of PICOP for collective bargaining
“On account of the above findings the instant case is agreement (CBA) purposes.
governed by the Civil Service Law. The case at bar
lies outside the jurisdictional competence of this Office.
Initial hearing was set. Paper Industries Corp failed
DISMISSED for lack of jurisdiction of this Office to hear to file any comment or position paper.
and decide the case. Meanwhile, private respondents Federation of
Free Workers (FFW) and Associated Labor Union
NLRC: affirmed on appeal the order of the Labor
Arbiter and dismissed the petitioners’ appeal for lack of (ALU) filed their respective petitions for
merit. intervention.
SC:
The Court, in National Service Corporation (NASECO)
An Order was issued granting the petitions for
v. National Labor Relations Commission, quoting interventions of the FFW and ALU. Another Order
extensively from the deliberations of the 1986 issued on the same day set the holding of a
Constitutional Commission in respect of the intent and certification election among PICOP's supervisory
meaning of the new phrase “with original charter,” in
effect held that government-owned and controlled and technical staff employees in with four choices,
corporations with original charter refer to corporations namely: (1) PICOP Bislig Union; (2) FFW; (3) ALU;
chartered by special law as distinguished from and (4) no union.
corporations organized under our general incorporation
statute—the Corporation Code. In NASECO, the
company involved had been organized under the Paper Industries Corp appealed the Order which
general incorporation statute and was a subsidiary of set the holding of the certification election
the National Investment Development Corporation contending that the Med-Arbiter committed grave
(NIDC) which in turn was a subsidiary of the Philippine
National Bank, a bank chartered by a special statute.
abuse of discretion in deciding the case without
Thus, government-owned or controlled corporations like giving the corporation the opportunity to file its
NASECO are effectively excluded from the scope of the comments/answer, and that PICOP-Bislig Union
Civil Service. had no personality to file the petition for
certification election.
Letter of Instruction No. 1013, included Food
Terminal, Inc. in the category of “government-owned or PICOP questioned and objected to the inclusion
controlled corporations.” Since then, FTI served as the of some section heads and supervisors in the list
marketing arm of the National Grains Authority (now
known as the National Food Authority). The pleadings of voters whose positions it averred were
show that FTI was previously a privately owned reclassified as managerial employees in the light
enterprise, created and organized under the general of the reorganization effected by it.
incorporation law, with the corporate name “Greater
Manila Food Terminal Market, Inc.”
PICOP’s contention: the company was divided
The record does not indicate the precise amount of the into four (4) main business groups, namely: Paper
capital stock of FTI that is owned by the government; Products Business, Timber Products Business,
the petitioners’ claim, and this has not been disputed,
that FTI is not hundred percent (100%) government- Forest Resource Business and Support Services
owned and that Business. A vice- president or assistant vice-
shareholders. president heads each of these business groups.
A division manager heads the divisions comprising
We conclude that because respondent FTI is
government-owned and controlled corporation without each business group. A department
original charter, it is the Department of Labor and manager heads the departments comprising each
Employment, and not the Civil Service Commission, division. Section heads and supervisors, now
which has jurisdiction over the dispute arising from
employment of the petitioners with private respondent
called section managers and unit managers, head
FTI, and that consequently, the terms and conditions of the sections and independent units, respectively,
comprising each department. PICOP advanced the
view that considering the alleged present se composed of Top and Middle Managers, and
authority of these section managers and unit the "supervisors" composed of First-Line
managers to hire and fire, they are classified as Managers. Thus, the mere fact that an employee
managerial employees, and hence, ineligible to is designated manager" does not ipso facto make
form or join any labor organization. him one. Designation should be reconciled with
the actual job description of the employee, for it is
Med-Arbiter ruling: supervisors and section heads the job description that determines the nature of
of the petitioner are managerial employees and employment.
therefore excluded from the list of voters for
purposes of certification election.
National Sugar Refineries Corp v NLRC (220 SCRA
DOLE Under Sec Laguesma: issued an order 452) 1993
declaring that the subject supervisors and section
heads are supervisory employees eligible to vote It is the submission of petitioner that while the
in the certification election. members of respondent union, as supervisors,
may not be occupying managerial positions, they
ISSUE: W/N the positions Section Heads and are clearly officers or members of the managerial
Supervisors, who have been designated as Section staff because they meet all the conditions
Managers and Unit Managers, were converted to prescribed by law and, hence, they are not
managerial employees under the decentralization entitled to overtime, rest day and supervisory
and reorganization program employees under Article 212 (m) should be made
to apply only to the provisions on Labor Relations,
RULING: No, they are not managerial employees while the right of said employees to the
questioned benefits should be considered in the
RATIO: A thorough dissection of the job light of the meaning of a managerial employee
description of the concerned supervisory and of the officers or members of the managerial
employees and section heads indisputably show staff, as contemplated under Article 82 of the
that they are not actually managerial but only Code and Section 2, Rule I Book III of the
supervisory employees since they do not lay down implementing rules.
company policies. PICOP's contention that the
subject section heads and unit managers exercise 1)         In other words, for purposes of forming
the authority to hire and fire is ambiguous and and joining unions, certification elections,
quite misleading for the reason that any authority collective bargaining, and so forth, the union
they exercise is not supreme but merely advisory members are supervisory employees.
in character. Theirs is not a final determination of
the company policies inasmuch as any action 2)         In terms of working conditions and rest
taken by them on matters relative to hiring, periods and entitlement to the questioned
promotion, transfer, suspension and termination benefits, however, they are officers or members
of employees is still subject to confirmation and of the managerial staff, hence they are not
approval by their respective superior. Thus, where entitled thereto.
such power, which is in effect recommendatory in  
character, is subject to evaluation, review and Paper Industries Corporation of the Philippines v.
final action by the department heads and other Laguesma (330 SCRA 295) 2000
higher executives of the company, the same,
although present, is not effective and not an HELD: United Pepsi cola ruling was adopted here: 
exercise of independent judgment as required by “Managerial employees are ranked as Top
law. managers, Middle managers and First Line
Managers. Top and Middle Managers have the
DISPOSITIVE: Under Sec. Laguesma was correct. authority to devise, implement and control
The members of the labor unions won. strategic and operational policies while the task of
First-Line Managers is simply to ensure that such
policies are carried out by the rank-and-file
DOCTRINE: Managerial employees are ranked as employees of an organization.
Top Managers, Middle Managers and First Line
Managers. Top and Middle Managers have the Under this distinction, “managerial employees”
authority to devise, implement and control therefore fall in two (2) categories, namely,
strategic and operational policies while the task of --          the “managers” per se composed of Top
First-Line Managers is simply to ensure that such and Middle Managers, and the
policies are carried out by the rank-and- file --          “supervisors” composed of First-Line
employees of an organization. Under this Managers.
distinction, "managerial employees" therefore fall
in two (2) categories, namely, the "managers" per
Thus, the mere fact that an employee is Auto Bus appealed. NLRC deleted the 13th month
designated “manager” does not ipso facto make pay award. In the CA, NLRC’s decision was
him one. Designation should be reconciled with affirmed.
the actual job description of the employee, for it is Issue: Whether or not respondent is entitled to
the JOB DESCRIPTION that determines the nature service incentive leave pay.
of employment.” Held: Yes.
Under Article 95 of the Labor Code, every
“In this case, a thorough dissection of the job employee who has rendered at least one year or
description of the concerned supervisory service shall be entitled to a yearly service
employees and section heads indisputably show incentive leave of five days with pay. In Section 1,
that they are NOT actually managerial employees Rule V, Book III of the Implementing Rules and
BUT ONLY supervisory employees SINCE THEY DO Regulations of the Labor Code, the rule shall apply
NOT LAY DOWN COMPANY POLICIES.” to all, except… (d) Field personnel and other
employees whose performance is unsupervised by
“PICOP’s contention that the subject section the employer including those who are engaged on
heads and managers exercise the authority to hire task or contract basis, purely commission basis, or
and fire is ambiguous and quiet misleading for the those who are paid in a fixed amount for
reason that any authority they exercise is NOT performing work irrespective of the time
SUPREME but merely ADVISORY in character. consumed in the performance thereof.
Theirs is not a FINAL DETERMINATION of the Petitioner’s contention that Bautista is not
company policies inasmuch as any action taken by entitled to service incentive leave because he is
them on matters relative to hiring, promotion, paid on a purely commission basis must fail. The
transfer, suspension and termination of phrase following “Field personnel” should not be
employees is still subject to confirmation and construed as a separate classification of
approval by their respective superior.” employees but is merely an amplification of the
definition of field personnel defined under the
“Thus, where such power, which is in effect Labor Code.
RECOMMENDATORY in character, is SUBJECT TO Bautista neither falls under the category field
EVALUATION, REVIEW, and FINAL ACTION by personnel. As defined, field personnel are those
department heads and other higher executives of whose performance of service is unsupervised by
the company. The same, although present, is not the employer, the workplace being away from the
effective and not an exercise of INDEPENDENT principal place of business and whose hours and
JUDGMENT as required by law.” days of work cannot be determined with
reasonable certainty. Bus companies have ways of
determining the hours worked by their drivers and
Auto Bus Transport vs Bautista conductors with reasonable certainty. The courts
G.R. No. 156367. May 16, 2005 have taken judicial notice of the following:
Facts: 1. Along the routes traveled, there are
Bautista, a driver-conductor of the Autobus inspectors assigned at strategic places who
transport, was dismissed after his failure to pay an board the bus to inspect the passengers,
amount demanded by the company for the repair the punched tickets, and the conductor’s
of the bus damaged in an accident caused by him. reports;
He receives compensation by way of commission 2. There is a mandatory once-a week car barn
per travel. or shop day, where the bus is regularly
Bautista complained for illegal dismissal with checked;
money claims for nonpayment of 13th month pay 3. The drivers and conductors must be at
and service incentive leave pay against Autobus. specified place and time, as they observe
Auto Bus’ Defenses: prompt departure and arrival;
1. Bautista’s employment was replete with 4. At every depot, there is always a
offenses involving reckless imprudence, dispatcher whose function is to see to it
gross negligence, and dishonesty that the bus and crew leaves and arrives at
supported with copies of letters, memos, the estimated proper time.
irregularity reports, warrants of arrest; By these reasons, drivers and conductors are
2. In the exercise of management therefore under constant supervision while in the
prerogative, Bautista was terminated only performance of their work.
after providing for an opportunity to
explain:
Labor Arbiter dismissed the complaint however
awarded Bautista his 13th month pay and service
incentive leave pay.
Union of Filipino Employees v. vivar has no way of determining whether or not these
Facts: sales personnel, even if they report to the office
On November 8, 1985, respondent Filipro, Inc. before 8:00 a.m. prior to field work and come
(now Nestle Philippines, Inc.) filed with the back at 4:30 p.m, really spend the hours in
National Labor Relations Commission (NLRC) a between in actual field work.
petition for claims of its monthly paid employees Moreover, the requirement that “actual hours of
for holiday pay. work in the field cannot be determined with
Abitrator Vivar: Filipro to pay its monthly paid reasonable certainty” must be read in conjunction
employees holiday pay pursuant to Art 94 of Labor with Rule IV, Book III of the Implementing Rules
Code, subject to exclusions and limitations in Art which provides:
82. Rule IV Holidays with Pay
Filipro filed a motion for clarification seeking (1) Sec. 1. Coverage — This rule shall apply to all
the limitation of the award to three years, (2) employees except:
the exclusion of salesmen, sales representatives, xxx xxx xxx
truck drivers, merchandisers and medical (e) Field personnel and other employees whose
representatives (hereinafter referred to as sales time and performance is unsupervised by the
personnel) from the award of the holiday pay, and employer . . . (Emphasis supplied)
(3) deduction from the holiday pay award of Hence, in deciding whether or not an employee’s
overpayment for overtime, night differential, actual working hours in the field can be
vacation and sick leave benefits due to the use of determined with reasonable certainty, query must
251 divisor. be made as to whether or not such employee’s
Petitioner UFE answered that the award should be time and performance is constantly supervised by
made effective from the date of effectivity of the the employer.
Labor Code, that their sales personnel are not field 2. The divisor in computing the award of holiday
personnel and are therefore entitled to holiday pay should still be 251 days.
pay, and that the use of 251 as divisor is an While in that case the issue was whether or not
established employee benefit which cannot be salesmen were entitled to overtime pay, the same
diminished. rationale for their exclusion as field personnel
Arbitrator Vivar: On January 14, 1986, the from holiday pay benefits also applies.
respondent arbitrator issued an order declaring The petitioner union also assails the respondent
that the effectivity of the holiday pay award shall arbitrator’s ruling that, concomitant with the
retroact to November 1, 1974, the date of award of holiday pay, the divisor should be
effectivity of the Labor Code. He adjudged, changed from 251 to 261 days to include the
however, that the company’s sales personnel are additional 10 holidays and the employees should
field personnel and, as such, are not entitled to reimburse the amounts overpaid by Filipro due to
holiday pay. He likewise ruled that with the grant the use of 251 days’ divisor.
of 10 days’ holiday pay, the divisor should be The 251 working days divisor is the result of
changed from 251 to 261 and ordered the subtracting all Saturdays, Sundays and the ten (10)
reimbursement of overpayment for overtime, legal holidays from the total number of calendar
night differential, vacation and sick leave pay due days in a year. If the employees are already paid
to the use of 251 days as divisor. for all non-working days, the divisor should be 365
Issues: and not 251.
1) Whether or not Nestle’s sales personnel are In the petitioner’s case, its computation of daily
entitled to holiday pay; and ratio since September 1, 1980, is as follows:
2) Whether or not, concomitant with the award of monthly rate x 12 months / 251 days
holiday pay, the divisor should be changed from The use of 251 days’ divisor by respondent Filipro
251 to 261 days and whether or not the previous indicates that holiday pay is not yet included in
use of 251 as divisor resulted in overpayment for the employee’s salary, otherwise the divisor
overtime, night differential, vacation and sick should have been 261.
leave pay. It must be stressed that the daily rate, assuming
Held: there are no intervening salary increases, is a
1.  Sales personnel are not entitled to holiday constant figure for the purpose of computing
pay. overtime and night differential pay and
Under Article 82, field personnel are not entitled commutation of sick and vacation leave credits.
to holiday pay. Said article defines field personnel Necessarily, the daily rate should also be the same
as “non-agritultural employees who regularly basis for computing the 10 unpaid holidays.
perform their duties away from the principal place The respondent arbitrator’s order to change the
of business or branch office of the employer and divisor from 251 to 261 days would result in a
whose actual hours of work in the field cannot be lower daily rate which is violative of the
determined with reasonable certainty.” prohibition on non-diminution of benefits found in
The law requires that the actual hours of work in Article 100 of the Labor Code. To maintain the
the field be reasonably ascertained. The company same daily rate if the divisor is adjusted to 261
days, then the dividend, which represents the - Petitioner filed for an M.R. before the CIR. It was
employee’s annual salary, should correspondingly denied
be increased to incorporate the holiday pay.
To illustrate, if prior to the grant of holiday pay,
the employee’s annual salary is P25,100, then HENCE THE PETITION
dividing such figure by 251 days, his daily rate is
P100.00 After the payment of 10 days’ holiday Issue: Whether the Eight-Hour Labor Law applies to
respondent workers.
pay, his annual salary already includes holiday pay
and totals P26,100 (P25,100 + 1,000). Dividing this
by 261 days, the daily rate is still P100.00. There is Held: No
thus no merit in respondent Nestle’s claim of
overpayment of overtime and night differential Ratio Decidendi: The Eight-Hour Labor Law only applies
pay and sick and vacation leave benefits, the to an employee who is paid on a monthly or daily basis.
computation of which are all based on the daily This law has no application to employees paid on a
rate, since the daily rate is still the same before piece-work basis. CIR is wrong to apply the law to the
and after the grant of holiday pay. piece-work employees. According to a ruling by DOLE
on Dec. 9, 1957, field sales personnel receiving monthly
SC Decision: salaries (such as the respondents in this case) are not
The Court thereby resolves that the grant of subject to the Eight-Hour Labor Law (although they are
holiday pay be effective, not from the date of paid on a monthly basis, their commission shall be
promulgation of the Chartered Bank case nor from considered as payment for extra time he renders in
the date of effectivity of the Labor Code, but from excess of 8 hours).
October 23, 1984, the date of promulgation of
Additional Issue: Are the claimants who are watchmen
the IBAA case (Insular Bank of Asia and America
and security guards entitled to extra pay for work done
Employees’ Union (IBAAEU) v. Inciong, where the on Sundays and Holidays?
court declared that Sec 2, Rule IV, Book III of IRR
which excluded monthly paid employees from COURT: They are entitled to such pay as per Comm.
holiday pay benefits, are null and void). Act No. 444. They shall be entitled to + 25% of their
WHEREFORE, the order of the voluntary arbitrator regular salary.
in hereby MODIFIED. The divisor to be used in
computing holiday pay shall be 251 days. The
holiday pay as above directed shall be computed
from October 23, 1984. In all other respects, the PETITION: GRANTED: Decision of the CIR, SET
order of the respondent arbitrator is hereby ASIDE.
AFFIRMED.

[Prepared by: Emil Angelo C. Martinez for exclusive use


San Miguel Brewer, Inc. vs. Democratic Labor of Block 3, Labor Standards]
Organization, et al.
GR No. L-18353
July 31. 1963 Mercidar Fishing Corporation vs. NLRC, G.R. No.
EN BANC | Bautista, J. 112574. October 8, 1998; 297 SCRA 440
Posted by Pius Morados on November 10, 2011
(Labor Standards – Fishermen are not  field
Prologue (Principle): The Eight-Hour Labor Law only personnels, Article 82)
applies to employees who are paid on a monthly or daily
basis. Employees who are paid on a piece-work basis Facts: Private respondent employed as a
are EXCLUDED. “bodegero” or ship’s quartermaster complained of
being constructively dismissed by petitioner
corporation when the latter refused him
FACTS: assignments aboard its boats after he had
reported to work. The Larbor Arbiter rendered a
- Respondent Democratic Labor Assoc. filed a
decision ordering petitioner corporation to
manifestation claiming for the following against petitioner
SMB: overtime pay, night-shift differential pay, attorney’s reinstate complainant with back wages, pay him
fees. Separation pay, and sick and vacation leave his 13th month pay and incentive leave. Petitioner
compensation. claims that it cannot be held liable for service
incentive leave pay by fishermen in its employ as
- Judge Bautista ruled that those working outside the the latter supposedly are “field personnel” and
company’s premises are entitled to overtime thus not entitled to such pay under the Labor
compensation, hence, the Eight-Hour Labor Law applies Code.
to them. Article 82 of the Labor Code provides among
others that “field personnel” shall refer to non-
agricultural employees who regularly perform employees of the private respondents. That the
their duties away from the principal place of producers are not independent contractor but
business or branch of office of the employer and should be considered as labor-only contractors
whose actual hours of work in the field cannot be and as such act as mere agent of the real
determined with reasonable certainty. employer. Thus, the said employees are illegally
Issue: WON fishermen are considered field dismissed.
personnel.
The private respondents appealed to the NLRC
Held: No. Although fishermen perform non- which reversed the decision of the Labor Arbiter
agricultural work away from their employer’s declaring that the complainants were project
business offices, the fact remains that throughout employees due to the ff. reasons: (a)
the duration of their work they are under the Complainants were hired for specific movie
effective control and supervision of the employer projects and their employment was co-terminus
through the vessel’s patron or master. with each movie project; (b)The work is
dependent on the availability of projects. As a
result, the total working hours logged extremely
varied; (c) The extremely irregular working days
and hours of complainants work explains the lump
sum payment for their service; and (d) The
Maraguinot vs. NLCR, Del Rosario & Viva Films respondents alleged that the complainants are not
Chester Cabalza recommends his visitors to please prohibited from working with other movie
read the original & full text of the case cited. Xie companies whenever they are not working for the
xie! independent movie producers engaged by the
respondents.
ALEJANDRO MARAGUINOT, JR. AND PAUILINO
ENERO v. NLRC, VIC DEL ROSARIO, VIVA FILMS A motion for reconsideration was filed by the
GR No. 120969 complainants but was denied by NLRC. In effect,
they filed an instant petition claiming that NLRC
Facts: committed a grave abuse of discretion in: (a)
Finding that petitioners were project employees;
Maraguinot and Enero were separately hired by (b) Ruling that petitioners were not illegally
Vic Del Rosario under Viva Films as part of the dismissed; and (c) Reversing the decision of the
filming crew. Sometime in May 1992, sought the Labor Arbiter.
assistance of their supervisor to facilitate their
request that their salary be adjusted in In the instant case, the petitioners allege that the
accordance with the minimum wage law. NLRC acted in total disregard of evidence material
or decisive of the controversy.
On June 1992, Mrs. Cesario, their supervisor, told
them that Mr. Vic Del Rosario would agree to their Issues:
request only if they sign a blank employment
contract. Petitioners refused to sign such (a) W/N there exist an employee- employer
document. After which, the Mr. Enero was forced relationship between the petitioners and the
to go on leave on the same month and refused to private respondents.
take him back when he reported for work. Mr.
Maraguinot on the other hand was dropped from (b) W/N the private respondents are engaged in
the payroll but was returned days after. He was the business of making movies.
again asked to sign a blank employment contract
but when he refused, he was terminated. (c) W/N the producer is a job contractor.

Consequently, the petitioners sued for illegal Held:


dismissal before the Labor Arbiter. The private
respondents claim the following: (a) that VIVA There exist an employee- employer relationship
FILMS is the trade name of VIVA PRODUCTIONS, between the petitioners and the private
INC. and that it was primarily engaged in the respondents because of the ff. reasons that
distribution & exhibition of movies- but not then nowhere in the appointment slip does it appear
making of movies; (b) That they hire contractors that it was the producer who hired the crew
called “producers” who act as independent members. Moreover, it was VIVA’s corporate
contractors as that of Vic Del Rosario; and (c) As name appearing on heading of the slip. It can
such, there is no employee-employer relation likewise be said that it was VIVA who paid for the
between petitioners and private respondents. petitioners’ salaries.

The Labor Arbiter held that the complainants are Respondents also admit that the petitioners were
part of a work pool wherein they attained the Ruling
status of regular employees because of the ff. Lagrama is an employee not an independent
requisites: (a) There is a continuous rehiring of contractor
project employees even after cessation of a Applying Four Fold Test
project; (b) The tasks performed by the alleged A. Power of Control - Evidence shows that
“project employees” are vital, necessary and the Lagrama performed his work as painter
indispensable to the usual business or trade of the and under the supervision and control of
employer; and (c) However, the length of time Tan.
which the employees are continually re-hired is 1. Lagrama worked in a
not controlling but merely serves as a badge of designated work area inside
regular employment. the theater of Tan for the use
of which petitioner prescribed
rules, which rules included
Since the producer and the crew members are the observance of cleanliness
employees of VIVA and that these employees’ and hygeine and prohibition
works deal with the making of movies. It can be against urinating in the work
area and any other place
said that VIVA is engaged of making movies and other than rest rooms and
not on the mere distribution of such. 2. Tan's control over Lagrama's
work extended not only the
The producer is not a job contractor because of use of work area but also the
result of Lagrama;s work and
the ff. reasons: (Sec. Rule VII, Book III of the
the manner and means by
Omnibus Rules Implementing the Labor Code.) which the work was to be
accomplished
a. A contractor carries on an independent 3. Lagrama is not an
business and undertakes the contract work on his independent contractor
because he did not enjoy
own account under his own responsibility independence and freedom
according to his own manner and method, free from the control and
from the control and direction of his employer or supervision of Tan and he
principal in all matters connected with the was subjected to Tan's control
over the means and methods
performance of the work except as to the results
by which his work is to be
thereof. The said producer has a fix time frame performed and accomplished
and budget to make the movies.          B. Payment of Wages
1. Lagrama worked for Tan on a fixed piece
b. The contractor should have substantial capital work basis is of no moment. Payment by
result is a method of compensation and does
and materials necessary to conduct his business. not define the essence of the relation.
The said producer, Del Rosario, does not have his 2. Tat Lagrama was not reported as an
own tools, equipment, machinery, work premises employee to the SSS is not conclusive, on the
and other materials to make motion pictures. Such question whether he was an employee,
otherwise Tan would be rewarded for his
materials were provided by VIVA. failure or even neglect to perform his
obligation.
It can be said that the producers are labor-only     C. Power of Dismissal – by Tan stating that he
contractors. Under Article 106 of the Labor Code had the right to fire Lagrama, Tan in effect
(reworded) where the contractor does not have acknowledged Lagrama to be his employee
    D. Power of Selection and Engagement of
the requisites as that of the job contractors. Employees – Tan engaged the services of Lagrama
without the intervention of third party

Tan vs. Lagrama


G.R. No. 151228, August 15, 2002
Chavez vs NLRC, Supreme Packaging Inc, and
Facts Alvin Lee
 Lagrama works for Tan as painter of GR No. 146530 January 17, 2005
billboards and murals for the motion pictures Facts:
shown at the theaters managed by Tan for  The respondent company, Supreme
more than 10years
Packaging Inc., is in the business of
 Lagrama was dismissed for having urinated
in his working area manufacturing cartons and other
 Lagrama filed a complaint for illegal packaging materials for export and
dismissal and non payment of benefits distribution.
 Tan asserted that Lagrama was an  The petitioner, Pedro Chavez, was a truck
independent contractor as he was paid in driver (from October 25, 1984) tasked to
piece-work basis
deliver the respondent company’s
Issue products to its various customers.
W/N Lagrama is an independent contractor or an  The respondent furnished petitioner with a
employee of Tan? truck that all deliveries were made in
accordance with the routing slips issued by
the respondent company indicating the employment for work done or to be done,
order, time and urgency of delivery. or for service rendered or to be rendered.
 On 1992, the petitioner expressed his The petitioner is paid on a per trip basis is
desire to avail the benefits that a regular not significant. This is merely a method of
employee were receiving such as overtime computing compensation. Third. The
pay, nightshift differential pay, and respondent’s power to dismiss the
13th month pay, among others but nothing petitioner was inherent in the fact that
was complied. they engaged the services of the petitioner
 On February 20, 1995, petitioner filed a as truck driver. They exercised this power
complaint for regularization with the by terminating the petitioner’s services
Regional Arbitration Branch No. III of NLRC albeit in the guise of severance of
in San Fernando, Pampanga. Before the contractual relation due allegedly to the
case could be heard, respondent latter’s breach of his contractual
terminated the services of the petitioner. obligation. Fourth. Compared to an
 Hence, the petitioner filed an amended employee, an independent contractor is
complaint for illegal dismissal, unfair labor one who carries on a distinct and
practice and non-payment of overtime independent business and undertakes to
pay, nightshift differential, and 13th month perform the job, work or service on its own
pay, among others. account and under its own responsibility
Issue: Whether there exists an employer- according to its own manner and method,
employee relationship? free from the control and direction of the
Held: principal in all matters connected with the
 Yes an employer-employee do exist. The performance of the work except as to the
elements to determine the existence of an results thereof. Hence while an
employment relationship are: (1) the independent contractor enjoys
selection and engagement of the independence and freedom from the
employee; (2) the payment of wages; (3) control and supervision of his principal. An
the power of dismissal; and (4) the employee is subject to the employer’s
employer’s power to control the power to control the means and methods
employee’s conduct. The most important by which the employee’s work is to be
element is the employer’s control of the performed and accomplished. A careful
employee’s conduct, not only as to the review of the records shows that the latter
result of the work to be done, but also as performed his work under the
to the means and methods to accomplish respondents’ supervision and control. The
it. First. Undeniably, it was the existence of an employer-employee
respondents who engaged the services of relationship cannot be negated by
the petitioner without the intervention of expressly repudiating it in a contract and
a third party. Second. Wages are defined providing therein that the employee is an
as “remuneration or earnings, however independent contractor when the facts
designated, capable of being expressed in clearly show otherwise. Employment
terms of money, whether fixed or status is defined by law and not by what
ascertained on a time, task, piece or the parties say it should be.
commission basis, or other method of
calculating the same, which is payable by
an employer to an employee under a
written or unwritten contract of
PHILIPPINE AIRLINES vs. NLRC et al G.R. No. 132805

FACTS: Private respondent Dr. Fabros was employed as flight Upon learning about the incident, PAL Medical Director ordered
surgeon at petitioner company. He was assigned at the PAL the Chief Flight Surgeon to conduct an investigation. In his
Medical Clinic and was on duty from 4:00 in the afternoon until explanation, Dr. Fabros asserted that he was entitled to a thirty-
12:00 midnight. minute meal break; that he immediately left his residence upon
being informed by Mr. Eusebio about the emergency and he
On Feb.17, 1994, at around 7:00 in the evening, Dr. FAbros left arrived at the clinic a few minutes later; that Mr. Eusebio
the clinic to have his dinner at his residence, which was abou t5- panicked and brought the patient to the hospital without
minute drive away. A few minutes later, the clinic received an waiting for him.
emergency call from the PAL Cargo Services. One of its
employeeshad suffered a heart attack. The nurse on duty, Mr. Finding private respondent’s explanation unacceptable, the
Eusebio, called private respondent at home to inform him of management charged private respondent with abandonment of
the emergency. The patient arrived at the clinic at 7:50 in the post while on duty. He denied that he abandoned his post on
evening and Mr. Eusebio immediately rushed him to the February 17, 1994. He said that he only left the clinic to have his
hospital. When Dr. Fabros reached the clinic at around 7:51 in dinner at home. In fact, he returned to the clinic at 7:51 in the
the evening, Mr. Eusebio had already left with the patient to evening upon being informed of the emergency.
the hospital. The patient died the following day.
After evaluating the charge as well as the answer of private Petitioner appealed to the NLRC.The NLRC, however, dismissed
respondent, he was given a suspension for three months the appeal after finding that the decision of the Labor Arbiter is
effective December 16, 1994.Private respondent filed a supported by the facts on record and the law on the matter.
complaint for illegal suspension against petitioner.On July 16, The NLRC likewise denied petitioner’s motion for
1996, the Labor Arbiter rendered a decision declaring the reconsideration.
suspension of private respondent illegal. It also ordered
petitioner to pay private respondent the amount equivalent to
all the benefits he should have received during his period of
suspension plus P500,000.00 moral damages.

ISSUE: 2. WON the awarding of moral damages is proper.

1. WON the nullifying of the 3-month suspension by the HELD: The petition is PARTIALLY GRANTED. The portion of
NLRC erroneous. the assailed decision awarding moral damages to private
respondent is DELETED. All other aspects of the decision are
AFFIRMED

1. The legality of private respondent’s suspension: Dr. Fabros meals, except in the following cases when a meal period of not
left the clinic that night only to have his dinner at his house, less than twenty (20) minutes may be given by the employer
which was only a few minutes’ drive away from the clinic. His provided that such shorter meal period is credited as
whereabouts were known to the nurse on duty so that he could compensable hours worked of the employee; (a) Where the
be easily reached in case of emergency. Upon being informed of work is non-manual work in nature or does not involve
Mr. Acosta’s condition, private respondent immediately left his strenuous physical exertion; (b) Where the establishment
home and returned to the clinic. These facts belie petitioner’s regularly operates not less than sixteen hours a day; (c) In cases
claim of abandonment. Petitioner argues that being a full-time of actual or impending emergencies or there is urgent work to
employee, private respondent is obliged to stay in the company be performed on machineries, equipment or installations to
premises for not less than eight (8) hours. Hence, he may not avoid serious loss which the employer would otherwise suffer;
leave the company premises during such time, even to take his and (d) Where the work is necessary to prevent serious loss of
meals. We are not impressed. Art. 83 and 85 of the Labor Code perishable goods. Rest periods or coffee breaks running from
read: Art. 83. Normal hours of work. — The normal hours of five (5) to twenty (20) minutes shall be considered as
work of any employee shall not exceed eight (8) hours a day. compensable working time. Thus, the eight-hour work period
Health personnel in cities and municipalities with a population does not include the meal break. Nowhere in the law may it be
of at least one million (1,000,000) or in hospitals and clinics with inferred that employees must take their meals within the
a bed capacity of at least one hundred (100) shall hold regular company premises. Employees are not prohibited from going
office hours for eight (8) hours a day, for five (5) days a week, out of the premises as long as they return to their posts on
exclusive of time for meals, except where the exigencies of the time. Private respondent’s act, therefore, of going home to take
service require that such personnel work for six (6) days or his dinner does not constitute abandonment. 2. The award of
forty-eight (48) hours, in which case they shall be entitled to an moral damages: Not every employee who is illegally dismissed
additional compensation of at least thirty per cent (30%) of or suspended is entitled to damages. As a rule, moral damages
their regular wage for work on the sixth day. For purposes of are recoverable only where the dismissal or suspension of the
this Article, “health personnel” shall include: resident employee was attended by bad faith or fraud, or constituted an
physicians, nurses, nutritionists, dieticians, pharmacists, social act oppressive to labor, or was done in a manner contrary to
workers, laboratory technicians, paramedical technicians, morals, good customs or public policy In the case at bar, there is
psychologists, midwives, attendants and all other hospital or no showing that the management of petitioner company was
clinic personnel. (emphasis supplied) Art. 85. Meal periods. — moved by some evil motive in suspending private respondent. It
Subject to such regulations as the Secretary of Labor may suspended private respondent on an honest, albeit erroneous,
prescribe, it shall be the duty of every employer to give his belief that private respondent’s act of leaving the company
employees not less than sixty (60) minutes time-off for their premises to take his meal at home constituted abandonment of
regular meals. Sec. 7, Rule I, Book III of the Omnibus Rules post which warrants the penalty of suspension. Under the
Implementing the Labor Code further states: Sec. 7. Meal and circumstances, we hold that private respondent is not entitled
Rest Periods. — Every employer shall give his employees, to moral damages.
regardless of sex, not less than one (1) hour time-off for regular

on the basis of the sum total of the employee’s


PNB V PNB EMPLOYEES ASSOCIATION basic salary or wage plus cost of living allowance
115 SCRA 507 and longevity pay. The CIR relied on the ruling in
July 30, 1982 NAWASA v NAWASA Consolidated Unions, which
NATURE held that “for purposes of computing overtime
Appeal from decision of the Court of Industrial compensation, regular wage includes all payments
Relations (CIR) which the parties have agreed shall be received
FACTS during the work week, including differentiated
– PNB and PNB Employees Association (PEMA) had payments for working at undesirable times, such
a dispute regarding the proper computation of as at night and the board and lodging customarily
overtime pay. PEMA wanted the cost of living furnished the employee.” This prompted PNB to
allowance (granted in 1958) and longevity pay appeal, hence this case.
(granted in 1961) to be included in the ISSUE
computation. PNB disagreed and the 2 parties  
later went before the CIR to resolve the dispute. WON the cost of living allowance and longevity
– CIR decided in favor of PEMA and held that PNB pay should be
should compute the overtime pay of its employees
included in the computation of overtime pay as – To apply the NAWASA computation would
held by the CIR require a different formula for each and every
  employee. It would require reference to and
HELD continued use of individual earnings in the past,
NO thus multiplying the administrative difficulties of
Ratio Overtime pay is for extra effort beyond that the Company. It would be cumbersome and
contemplated in the employment contract; tedious a process to compute overtime pay and
additional pay given for any other purpose cannot this may again cause delays in payments, which in
be included in the basis for the computation of turn could lead to serious disputes. To apply this
overtime pay. mode of computation would retard and stifle the
– Absent a specific provision in the CBA, the bases growth of unions themselves as Companies would
for the be irresistibly drawn into denying, new and
computation of overtime pay are 2 computations, additional fringe benefits, if not those already
namely: existing, for fear of bloating their overhead
  expenses through overtime which, by reason of
1. WON the additional pay is for extra work done being unfixed, becomes instead a veritable source
or service of irritant in labor relations.
rendered
2. WON the same is intended to be permanent **Overtime Pay Rationale Why is a laborer or
and regular, not contingent nor temporary as a employee who works beyond the regular hours of
given only to remedy a situation which can change work entitled to extra compensation called, in this
any time. enlightened time, overtime pay?
Reasoning
– Longevity pay cannot be included in the Verily, there can be no other reason than that he
computation of is made to work longer than what is
overtime pay for the very simple reason that the commensurate with his agreed compensation for
contrary is expressly stipulated in the CBA, which the statutorily fixed or voluntarily agreed hours of
constitutes the law between the parties. labor he is supposed to do. When he thus spends
– As regards cost of living allowance, there is additional time to his work, the effect upon him is
nothing in Commonwealth Act 444 [or “the 8-hour multi- faceted; he puts in more effort, physical
Labor Law,” now Art. 87 Labor Code] that could and/or mental; he is delayed in going home to his
justify PEMA’s posture that it should be added to family to enjoy the comforts thereof; he might
the regular wage in computing overtime pay. C.A. have no time for relaxation, amusement or sports;
444 prescribes that overtime work shall be paid he might miss important pre-arranged
“at the same rate as their regular wages or salary, engagements; etc. It is thus the additional work,
plus at least 25% additional.” The law did not labor or service employed and the adverse effects
define what is a regular wage or salary. What the just mentioned of his longer stay in his place of
law emphasized is that in addition to “regular work that justify and are the real reasons for the
wage,” there must be paid an additional 25% of extra compensation that is called overtime pay.
that “regular wage” to constitute overtime rate of **Overtime Pay Definition The additional pay for
pay. Parties were thus allowed to agree on what service or work rendered or performed in excess
shall be mutually considered regular pay from or of 8 hours a day by employees or laborers in
upon which a 25% premium shall be based and employment covered by the 8 hour Labor Law
added to makeup overtime compensation. [C.A. 444, now Art. 87 Labor Code] and not
– No rule of universal application to other cases exempt from its requirements. It is computed by
may be justifiably extracted from the NAWASA multiplying the overtime hourly rate by the
case. CIR relies on the part of the NAWASA number of hours worked in excess of eight.
decision where the SC cited American decisions Disposition decision appealed from is REVERSED
whose legislation on overtime is at variance with
the law in this jurisdiction. The US legislation
considers work in excess of forty hours a week as
overtime; whereas, what is generally considered Lagatic v NLRC
overtime in the Philippines is work in excess of the Chester Cabalza recommends his visitors to
regular 8 hours a day. It is understandably please read the original & full text of the case
material to refer to precedents in the US for cited. Xie xie!
purposes of computing weekly wages under a 40-
hour week rule, since the particular issue involved RIGHT TO PRESCRIBE RULES
in NAWASA is the conversion of prior weekly
regular earnings into daily rates without allowing ROMEO LAGATIC, petitioner,
diminution or addition. vs.
NATIONAL LABOR RELATIONS COMMISSION,
CITYLAND DEVELOPMENT CORPORATION,
STEPHEN ROXAS, JESUS GO, GRACE LIUSON, and call reports should trot be deemed as gross
ANDREW LIUSON, respondents insubordination. He denied any knowledge of the
damaging statement, "TO HELL WITH COLD
G.R. No. 121004 CALLS!"
January 28, 1998
Finding petitioner guilty of gross insubordination,
Facts: Cityland served a notice of dismissal upon him on
February 26, 1993. Aggrieved by such dismissal,
Petitioner Romeo Lagatic was employed in May petitioner filed a complaint against Cityland for
1986 by Cityland, first as a probationary sales illegal dismissal, illegal deduction, underpayment,
agent, and later on as a marketing specialist. He overtime and rest day pay, damages and
was tasked with soliciting sales for the company, attorney's fees. The labor arbiter dismissed the
with the corresponding duties of accepting call- petition for lack of merit. On appeal, the same was
ins, referrals, and making client calls and cold calls. affirmed by the NLRC; hence the present recourse.
Cold calls refer to the practice of prospecting for
clients through the telephone directory. Cityland, Issue:
believing that the same is an effective and cost-
efficient method of finding clients, requires all its W/N NLRC gravely abused its discretion in not
marketing specialists to make cold calls. The finding that petitioner was illegally dismissed?
number of cold calls depends on the sales
generated by each: more sales mean less cold Held:
calls. Likewise, in order to assess cold calls made
by the sales staff, as well as to determine the The petition lacks merit.
results thereof, Cityland requires the submission
of daily progress reports on the same. To constitute a valid dismissal from employment,
two requisites must be met, namely: (1) the
On October 22, 1991, Cityland issued a written employee must be afforded due process, and (2)
reprimand to petitioner for his failure to submit the dismissal must be for a valid cause.
cold call reports for September 10, October 1 and
10, 1991. This notwithstanding, petitioner again Employers may, thus, make reasonable rules and
failed to submit cold call reports for September 2, regulations for the government of their
5, 8, 10, 11, 12, 15, 17, 18, 19, 20, 22, and 28, as employees, and when employees, with knowledge
well as for October 6, 8, 9, 10, 12, 13 and 14, 1992. of an established rule, enter the service, the rule
Petitioner was required to explain his inaction, becomes a part of the contract of employment. It
with a warning that further non-compliance would is also generally recognized that company policies
result in his termination from the company. In a and regulations, unless shown to be grossly
reply dated October 18, 1992, petitioner claimed oppressive or contrary to law, are generally valid
that the same was an honest omission brought and binding on the parties and must be complied
about by his concentration on other aspects of his with. Corollarily, an employee may be validly
job. Cityland found said excuse inadequate and, dismissed for violation of a reasonable company
on November 9, 1992, suspended him for three rule or regulation adopted for the conduct of the
days, with a similar warning. company business. An employer cannot rationally
be expected to retain the employment of a person
Notwithstanding the aforesaid suspension and whose . . . lack of regard for his employer's rules . .
warning, petitioner again failed to submit cold call . has so plainly and completely been bared." 5
reports for February 5, 6, 8, 10 and 12, 1993. He Petitioner's continued infraction of company
was verbally reminded to submit the same and policy requiring cold call reports, as evidenced by
was even given up to February 17, 1993 to do so. the 28 instances of non-submission of aforesaid
Instead of complying with said directive, reports, justifies his dismissal.
petitioner, on February 16, 1993, wrote a note,
"TO HELL WITH COLD CALLS! WHO CARES?" and With the finding that petitioner's dismissal was for
exhibited the same to his co-employees. To a just and valid cause, his claims for moral and
worsen matters, he left the same lying on his desk exemplary damages, as well as attorney's fees,
where everyone could see it. must fail.
Resolution is AFFIRMED and this petition is hereby
On February 23, 1993, petitioner received a DISMISSED for lack of merit. Costs against
memorandum requiring him to explain why petitioner.
Cityland should not make good its previous
warning for his failure to submit cold call reports, SO ORDERED.
as well as for issuing the written statement
aforementioned. On February 24, 1993, he sent a
letter-reply alleging that his failure to submit cold

You might also like