Labor Required Digests 3

LABOR | ATTY.
GOLANGCO CASE DIGEST
1. Autobus Transport v. Bau0sta

2. David v. Macasio , July 4, 2014
3. Begino v. ABS-CBN, April 20, 2015
4. Chevron Phils. v. Galit, October 7, 2015
5. Manila Memorial Park v. Lluz, (2016 case)
6. Valenzuela v. Alexandra Mining Ventures, October 5, 2016
7. HSY Marke0ng Ltd. v. Villas0que, August 17, 2016
8. SLL Interna0onal Cables Specialist et. al. v. NLRC, March 2, 2011
9. American Wire and Cable Daily Rated Employees Union v. American Wire and Cable Co.
Inc., April 29, 2005
LABOR STANDARD 10. TSPIC Corp v. TSPIC Employees Union (FFW), February 13, 2008
11. Lepanto Ceramics Inc. v. Lepanto Ceramics Employees Associa0on, March 2, 2010
12. Eastern Telecom Phils. v. Eastern Telecoms Employees Union, February 8, 2012
Case Digests
13. GSIS v. NLRC, November 17, 2010
14. Aliviado et. al. v. Proctor and Gamble Philippines, June 6, 2011
15. Hoegh Fleet Services Phil. v. Turallo, July 26, 2017
16. Alva v. High Capacity Security Force Inc. November 8, 2017
17. SHS Perforated Materials Inc. v. Diaz, October 13, 2010
18. P. I. Manufacturing Inc. v. P.I. Manufacturing Supervisors and Forman Associa0on,
February 4, 2008
Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

LABOR | ATTY. GOLANGCO CASE DIGEST
AUTO BUS TRANSPORT SYSTEMS, INC vs BAUTISTA incen0ve leave shall not be granted. Rather, it serves as an amplifica0on of the interpreta0on
GR. No. 156367 of the defini0on of field personnel under the Labor Code as those "whose actual hours of work
16 May 2005 in the field cannot be determined with reasonable certainty.”
Tickler: bus driver; field personnel
Facts: The same is true with respect to the phrase "those who are engaged on task or contract basis,
Respondent Antonio Bau0sta has been employed by pe00oner Auto Bus Transport Systems Inc purely commission basis." Said phrase should be related with "field personnel," applying the
(Autobus) as driver-conductor since 1995. He was paid on commission basis, seven percent rule on ejusdem generis that general and unlimited terms are restrained and limited by the
(7%) of the total gross income per travel, on a twice a month basis. par0cular terms that they follow.9 Hence, employees engaged on task or contract basis or paid
on purely commission basis are not automa0cally exempted from the grant of service
In 2000, while respondent was driving along Nueva Vizcaya, the bus he was driving accidentally incen0ve leave, unless, they fall under the classifica0on of field personnel.
bumped the rear por0on of another bus from his company as the laber vehicle suddenly
stopped at a sharp curve without giving any warning. Respondent averred that the accident According to Ar0cle 82 of the Labor Code, "field personnel" shall refer to non-agricultural
happened because he was compelled by the management to go back to Roxas,Isabela employees who regularly perform their du0es away from the principal place of business or
although he had not slept for almost 24 hours as he had just arrived in Manila from Roxas. He branch office of the employer and whose actual hours of work in the field cannot be
further alleged that he was not allowed to work un0l he fully paid 30% of the cost of the repair determined with reasonable certainty.:
of the damaged buses and that despite respondent’s pleas for reconsidera0on, the same was
ignored by management. Aeer a month, management sent him a leber of termina0on. Thus, It is necessary to stress that the defini0on of a "field personnel" is not merely concerned with
Bau0sta filed a complaint for illegal dismissal with money claims against Autobus. the loca0on where the employee regularly performs his du0es but also with the fact that the
employee’s performance is unsupervised by the employer. As discussed above, field personnel
Pe00oner maintained that respondent’s employment was replete with offences involving are those who regularly perform their du0es away from the principal place of business of the
reckless imprudence, gross negligence, and dishonesty. Furthermore, pe00oner averred that employer and whose actual hours of work in the field cannot be determined with reasonable
in the exercise of its management preroga0ve, respondent’s employment was terminated only certainty. Thus, in order to conclude whether an employee is a field employee, it is also
aeer the laber was provided with an opportunity to explain his side regarding the accident. necessary to ascertain if actual hours of work in the field can be determined with reasonable
certainty by the employer. In so doing, an inquiry must be made as to whether or not the
The Labor Arbiter found herein pe00oner to have not been guilty of commihng illegal employee’s 0me and performance are constantly supervised by the employer.
dismissal. However, the LA ordered the same to pay Bau0sta’s 13th month pay from his date of
hiring to the date of his dismissal; and also his service incen0ve leave for all the years he had As observed by the Labor Arbiter and concurred in by the Court of Appeals:
been in service. On appeal, the NLRC affirmed the judgment rendered by the Labor Arbiter,
with a slight altera0on dele0ng the award of 13th month pay. It is of judicial no0ce that along the routes that are plied by these bus companies, there are its
inspectors assigned at strategic places who board the bus and inspect the passengers, the
Issue: punched 0ckets, and the conductor’s reports. There is also the mandatory once-a-week car
WON respondent is a field personnel who is not covered by Art. 95 of the Labor code re: barn or shop day, where the bus is regularly checked as to its mechanical, electrical, and
incen0ve leave hydraulic aspects, whether or not there are problems thereon as reported by the driver and/or
conductor. They too, must be at specific place at a specified 0me, as they generally observe
Held: prompt departure and arrival from their point of origin to their point of des0na0on. In each
No, respondent is not a field personnel and as such, he is en0tled to incen0ve leave. and every depot, there is always the Dispatcher whose func0on is precisely to see to it that the
bus and its crew leave the premises at specific 0mes and arrive at the es0mated proper 0me.
A careful perusal of said provisions of law will result in the conclusion that the grant of service These, are present in the case at bar. The driver, the complainant herein, was therefore under
incen0ve leave has been delimited by the Implemen0ng Rules and Regula0ons of the Labor constant supervision while in the performance of this work. He cannot be considered a field
Code to apply only to those employees not explicitly excluded by Sec0on 1 of Rule V. According personnel.
to the Implemen0ng Rules, Service Incen0ve Leave shall not apply to employees classified as
"field personnel." The phrase "other employees whose performance is unsupervised by the We agree in the above disquisi0on. Therefore, as correctly concluded by the appellate court,
employer" must not be understood as a separate classifica0on of employees to which service respondent is not a field personnel but a regular employee who performs tasks usually

necessary and desirable to the usual trade of pe00oner’s business. Accordingly, respondent is The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from
en0tled to the grant of service incen0ve leave. the coverage of SIL and holiday pay. They are exempted from the coverage of Title I (including
the holiday and SIL pay) only if they qualify as "field personnel." The IRR therefore validly
DAVID (YIELS HOG DEALER) vs MACASIO qualifies and limits the general exclusion of "workers paid by results" found in Ar0cle 82 from
GR. No. 195466 the coverage of holiday and SIL pay. This is the only reasonable interpreta0on since the
2 July 2014 determina0on of excluded workers who are paid by results from the coverage of Title I is
Tickler: pakyaw basis/task basis engagement "determined by the Secretary of Labor in appropriate regula0ons.
Facts:
Herein respondent John Macasio alleged before the LA that he had been working as a butcher In determining whether workers engaged on "pakyaw" or task basis" is en0tled to holiday and
for pe00oner Ariel David since 1995. Macasio claimed that David exercised effec0ve control SIL pay, the presence (or absence) of employer supervision as regards the worker’s 0me and
and supervision over his work, poin0ng out that David: (1) se the work day, repor0ng 0me and performance is the key: if the worker is simply engaged on pakyaw or task basis, then the
hogs to be chopped, as well as the manner bu which he was to perform his work; (2) daily paid general rule is that he is en0tled to a holiday pay and SIL pay unless exempted from the
his salary every year since 2005; and (3) approved and disapproved his leaves. Macasio added excep0ons specifically provided under Ar0cle 94 (holiday pay) and Ar0cle95 (SIL pay) of the
that David owned the hogs delivered for chopping as well as the work tools and implements. Labor Code. However, if the worker engaged on pakyaw or task basis also falls within the
meaning of "field personnel" under the law, then he is not en0tled to these monetary benefits.
In his defence, David claimed that he only has 10 employees since he established his business Macasio does not fall under the classifica0on of "field personnel.”
in 2005. He claimed that he hired Macasio as a butcher or chopper on “pakyaw” or task basis
who is, therefore, not en0tled to over0me pay, holiday pay, ad 13th month pay pursuant to the Based on the defini0on of field personnel under Ar0cle 82, we agree with the CA that Macasio
provisions of the Implemen0ng Rules and Regula0ons of the Labor Code. does not fall under the defini0on of "field personnel." The CA’s finding in this regard is
supported by the established facts of this case: first, Macasio regularly performed his du0es at
Issue: David’s principal place of business; second, his actual hours of work could be determined with
WON Macasio is a field personnel reasonable certainty; and, third, David supervised his 0me and performance of du0es. Since
Macasio cannot be considered a "field personnel," then he is not exempted from the grant of
Held: holiday, SIL pay even as he was engaged on "pakyaw" or task basis.
No, respondent Macasio is not a field personnel.
BEGINO vs ABS CBN
Engagement on "pakyaw" or task basis does not characterize the rela0onship that may exist GR. No. 199166
between the par0es, i.e., whether one of employment or independent contractorship. Ar0cle 20 April 2015
97(6) of the Labor Code defines wages as "xxx the remunera0on or earnings, however Tickler: talent; regular employee
designated, capable of being expressed in terms of money, whether fixed or ascertained on a Facts:
0me, task, piece, or commission basis, or other method of calcula0ng the same, which is Respondent ABS CBN is a television and radio broadcas0ng corpora0on employed respondent
payable by an employer to an employee under a wriben or unwriben contract of employment Amalia Villafuerte as manager. Through her, ABS CBN engaged the services of pe00oners
for work done or to be done, or for services rendered or to be rendered[.]" In rela0on to Nelson Begino and Gener Del Valle in 1996 as cameramen/editors for TV broadcas0ng. With
Ar0cle 97(6), Ar0cle 101 of the Labor Code speaks of workers paid by results or those whose their services engaged thru Talent Contracts which, though regularly renewed over the years,
pay is calculated in terms of the quan0ty or quality of their work output which includes provided terms ranging from 3 months to 1 year, pe00oners were given Project Assignment
"pakyaw" work and other non-0me work. Forms which detailed, among other mabers, the dura0on of a par0cular project as well as the
budget and the daily technical requirements thereof.
A dis0nguishing characteris0c of "pakyaw" or task basis engagement, as opposed to straight-
hour wage payment, is the non-considera0on of the 0me spent in working. In a task-basis While specifically providing that nothing therein shall be deemed or construed to establish an
work, the emphasis is on the task itself, in the sense that payment is reckoned in terms of employer-employee rela0onship between the par0es, the aforesaid Talent Contracts included,
comple0on of the work, not in terms of the number of 0me spent in the comple0on of work. among other mabers, provisions on the following mabers: (a) the Talent’s crea0on and
Once the work or task is completed, the worker receives a fixed amount as wage, without performance of work in accordance with the ABS-CBN’s professional standards and compliance
regard to the standard measurements of 0me generally used in pay computa0on. with its policies and guidelines covering intellectual property creators, industry codes as well

as the rules and regula0ons of the Kapisanan ng mga Broadcasters sa Pilipinas (KBP) and other Time and again, it has been ruled that the test to determine whether employment is regular or
regulatory agencies; (b) the Talent’s non-engagement in similar work for a person or en0ty not is the reasonable connec0on between the ac0vity performed by the employee in rela0on
directly or indirectly in compe00on with or adverse to the interests of ABS-CBN and non- to the business or trade of the employer. As cameramen/editors and reporters, pe00oners
promo0on of any product or service without prior wriben consent; and (c) the results-oriented were undoubtedly performing func0ons necessary and essen0al to ABS-CBN’s business of
nature of the talent’s work which did not require them to observe normal or fixed working broadcas0ng television and radio content. It mabers lible that pe00oners’ services were
hours. Subjected to contractor’s tax, pe00oners’ remunera0ons were denominated as Talent engaged for specified periods for TV Patrol Bicol and that they were paid according to the
Fees which, as of last renewal, were admibed to be pegged per airing day at P273.35 for budget allocated therefor. Aside from the fact that said program is a regular weekday fare of
Begino, P 302.92 for Del Valle, P 323.08 for Sumayao and P 315.39 for Llorin. the ABS-CBN’s Regional Network Group in Naga City, the record shows that, from their ini0al
engagement in the aforesaid capaci0es, pe00oners were con0nuously re-hired by respondents
Respondents insisted that, pursuant to their Talent Contracts and/or Project Assignment over the years. To the mind of the Court, respondents’ repeated hiring of pe00oners for its
Forms, pe00oners were hired as talents, to act as reporters and/or cameramen for TV Patrol long-running news program posi0vely indicates that the laber were ABS-CBN’s regular
Bicol for designated periods and rates. Fully aware that they were not considered or to employees.
consider themselves as employees of a par0cular produc0on or film ousit, pe00oners were
supposedly engaged on the basis of the skills, knowledge or exper0se they already possessed If the employee has been performing the job for at least one year, even if the performance is
and, for said reason, required no further training from ABS-CBN. Although pe00oners were not con0nuous or merely intermibent, the law deems the repeated or con0nuing performance
inevitably subjected to some degree of control, the same was allegedly limited to the as sufficient evidence of the necessity, if not indispensability of that ac0vity in the business.
imposi0on of general guidelines on conduct and performance, simply for the purpose of Indeed, an employment stops being coterminous with specific projects where the employee is
upholding the standards of the company and the strictures of the industry. Never subjected to con0nuously re-hired due to the demands of the employer’s business. When circumstances
any control or restric0ons over the means and methods by which they performed or show, moreover, that contractually s0pulated periods of employment have been imposed to
discharged the tasks for which their services were engaged, pe00oners were, at most, briefed preclude the acquisi0on of tenurial security by the employee, this Court has not hesitated in
whenever necessary regarding the general requirements of the project to be executed. striking down such arrangements as contrary to public policy, morals, good customs or public
order. The nature of the employment depends, aeer all, on the nature of the ac0vi0es to be
Having been terminated during the pendency of the case, Pe00oners filed on 10 July 2007 a performed by the employee, considering the nature of the employer’s business, the dura0on
second complaint against respondents, for regularisa0on, payment of labor standard benefits, and scope to be done, and, in some cases, even the length of 0me of the performance and its
illegal dismissal and unfair labor prac0ce con0nued existence. In the same manner that the prac0ce of having fixed-term contracts in
the industry does not automa0cally make all talent contracts valid and compliant with labor
Issue: law, it has, consequently, been ruled that the asser0on that a talent contract exists does not
WON pe00oners hired as talents are considered employees of ABS CBN necessarily prevent a regular employment status.
Held: As cameramen/editors and reporters, it also appears that pe00oners were subject to the
Yes, pe00oners are employees of ABS CBN. control and supervision of respondents which, first and foremost, provided them with the
equipments essen0al for the discharge of their func0ons. Prepared at the instance of
To determine the existence of said rela0on, case law has consistently applied the four-fold test, respondents, pe00oners’ Talent Contracts tellingly provided that ABS-CBN retained “all
to wit: (a) the selec0on and engagement of the employee; (b) the payment of wages; (c) the crea0ve, administra0ve, financial and legal control” of the program to which they were
power of dismissal; and (d) the employer's power to control the employee on the means and assigned. Aside from having the right to require pe00oners “to abend and par0cipate in all
methods by which the work is accomplished.Of these criteria, the so-called “control test” is promo0onal or merchandising campaigns, ac0vi0es or events for the Program,” ABS-CBN
generally regarded as the most crucial and determina0ve indicator of the presence or absence required the former to perform their func0ons “at such loca0ons and Performance/Exhibi0on
of an employer-employee rela0onship. Under this test, an employer-employee rela0onship is Schedules” it provided or, subject to prior no0ce, as it chose determine, modify or change.
said to exist where the person for whom the services are performed reserves the right to Even if they were unable to comply with said schedule, pe00oners were required to give
control not only the end result but also the manner and means u0lized to achieve the same. advance no0ce, subject to respondents’ approval. However obliquely worded, the Court finds
the foregoing terms and condi0ons demonstra0ve of the control respondents exercised not
Notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment Forms only over the results of pe00oners’ work but also the means employed to achieve the same.
and the terms and condi0on embodied therein, pe00oners are regular employees of ABS-CBN.

Pe00oners perform func0ons necessary and essen0al to the business of ABS-CBN which Held:
repeatedly employed them for a long-running news program of its Regional Network Group in Yes. Upon cursory reading of the employment contract between SJS and Galit, it is readily seen
Naga City. In the course of said employment, pe00oners were provided the equipments they that SJS has the power of dismissal and control. Galit admibed in his complaint that it was SJS
needed, were required to comply with the Company's policies which entailed prior approval which detailed him in the Pandacan oil depot. Galit also did not present any evidence to prove
and evalua0on of their performance. that it was Chevron which pays his wages and that SJS is a mere conduit of the laber. He was
dismissed therefrom because Chevron no longer renewed its contract with SJS and that the
CHEVRON (PHILS.), INC vs GALIT laber subsequently ceased to operate.
GR. No. 170087
31 August 2006 Anent the power of control, the Court again finds no cogent reason to depart from the findings
Tickler: of the NLRC that in case of mabers that needed to be addressed with respect to employee
Facts: performance, pe00oner dealt directly with SJS and not with the employee concerned. In any
Respondent Vitaliano Galit field against Caltex Philippines, Inc., now Chevron et al a complaint event, it is sebled that such power merely calls for the existence of the right to control and not
for illegal dismissal, underpayment/nonpayment of 13th month pay, separa0on pay and necessarily the exercise thereof. In the present case, the Job Contract between pe00oner and
emergency cost of living allowance. Galit alleged that he is a regular and permanent employee SJS clearly provided that SJS “shall retain the right to control the manner and the means of
of Chevron since 1982, having been assigned at the company’s Pandacan depot; he is an “all- performing the work, with [pe00oner] having the control or direc0on only as to the results to
around” employee whose job consists of cleaning the premises of the depot, changing be accomplished.” In addi0on, it would bear to point out that contrary to the ruling of the CA,
malfunc0oning oil gaskets, transferring oil from containers and other tasks that management the work performed by Galit, which is the “scooping of slop of oil water separator,” has no
would assign to him; in the performance of his du0es, he was directly under the control and direct rela0on to pe00oner’s business, which is the importa0on, refining and manufacture of
supervision of Chevron supervisors; in January 2005, he was verbally informed that his petroleum products. The Court defers to the findings of both the LA and the NLRC that the job
employment is terminated but was promised that he will be reinstated soon but for several performed by Galit, which essen0ally consists of janitorial services, may be incidental or
months, albeit constant follow-up, he was not reinstated to his posi0on. desirable to pe00oner’s main ac0vity but it is not necessary and directly related to it.
SJS, a company engaged in the business of providing manpower to its clients on a “per project/ As to whether or not SJS is an independent contractor, jurisprudence has invariably ruled that
contact” basis, claimed that it hired Galit as a project employee and was assigned to Chevron an independent contractor carries on an independent business and undertakes the contract
as a janitor based on a contract between the two companies. Upon the expira0on of the work on his own account, under his own responsibility, according to his own manner and
contract between SJS and Chevron in 2004, Galit’s employment was severed and eventually, method, and free from the control and direc0on of his employer or principal in all mabers
SJS closed its business opera0ons. connected with the performance of the work except as to the results thereof. This embodies
what has long been jurispruden0ally recognised as the control test. In the instant case, SJS
The Labor Arbiter ruled to dismiss the complaint of Galit, holding that SJS is a legi0mate presented evidence to show that it had an independent business by paying business taxes and
contractor and that it was Galit's employer and that the termina0on of his services was lawful fees and that it was registered as an employer with the Social Security System. Moreover,
on account that the project for which he was employed has already been accomplished; that there was no evidence to show that SJS and its employees were ever subject to the control of
the LA doesn’t have jurisdic0on over the complaint against Chevron as there existed no pe00oner. On the contrary, as shown above, SJS possessed the right to control its employees’
employer – employee rela0onship between the company and the complainant. Upon appeal manner and means of performing their work, including herein respondent Galit.
with the NLRC, the commission affirmed the LA decision with modifica0on. It held that Galit is
a regular employee of SJS, and not just a mere project employee of the company whose ac0on MANILA MEMORIAL PARK CEMETERY INC vs LLUZ et. Al
dismissing Galit was with lawful due to its closure. The CA, upon appeal of Chevron, ruled to GR. No. 208451
affirm the NLRC decision, hence the recourse of the laber with the SC. 3 February 2016
Tickler: liaison officer; economic circumstance; two-=ered test
Issue: Facts:
WON there exists an employer-employee rela0onship between Galit and SJS In February 2006, pe00oner Manila Memorial Park Cemetery, Inc. entered into a Contract of
Services with respondent Wart Trading and Services. The Contract of Services provided that
Ward Trading, as an independent contractor, will render interment and exhuma0on services
and other related work to Manila Memorial in order to supplement opera0ons at Manila

Memorial Park. Among those assigned by Ward Trading to perform said services were placed by such contractor or subcontractor are performing ac0vi0es which are directly related
respondents Lluz et al. They worked six days a week for eight hours daily and were paid P250 to the main business of the principal; or
per day. ii) The contractor does not exercise the right to control over the performance of the work of
the contractual employee.
In June 2007, respondents filed a complaint for regularisa0on and Collec0ve Bargaining
Agreement benefits against Manila Memorial. A month aeer, respondents filed an amended The contractor or subcontractor shall be considered the employer of the contractual employee
complaint to include illegal dismissal, underpayment of 13th month pay, and payment of for purposes of enforcing the provisions of the Labor Code and other social legisla0on. The
aborney’s fees. principal, however, shall be solidarily liable with the contractor in the event of any viola0on of
any provision of the Labor Code, including the failure to pay wages.
Manila Memorial sought the dismissal of the complaint for lack of jurisdic0on since there was
no employer-employee rela0onship. Manila Memorial argued that respondents were the The principal shall be deemed the employer of the contractual employee in any of the
employees of Ward Trading. following cases as declared by a competent authority:
(a) where there is labor-only contrac0ng; or
The Labor arbiter dismissed the complaint for failing to prove the existence of an employer- (b) where the contrac0ng arrangement falls within the prohibi0ons provided in Sec0on 6
employee rela0onship. The NLRC reversed the findings of the Labor Arbiter, ruling that Ward (Prohibi0ons) hereof.
Trading was a labor-only contractor and an agent of Manila Memorial. Respondents were
declared to be regular employees of Manila Memorial. Pe00oner filed a Mo0on for It is clear from these provisions that contrac0ng arrangements for the performance of specific
Reconsidera0on which was denied in a Resolu0on. The Court of Appeals affirmed the ruling of jobs or services under the law and its implemen0ng rules are allowed. However, contrac0ng
the NLRC. must be made to a legi0mate and independent job contractor since labor rules expressly
prohibit labor-only contrac0ng.
Issue:
WON an employer-employee rela0onship exists between Manila Memorial and respondents A closer look at the Contract of Services reveals that Ward Trading does not have substan0al
for the laber to be en0tled to their claim for wages and other benefits capital or investment in the form of tools, equipment, machinery, work premises and other
materials since it is Manila Memorial which owns the equipment used in the performance of
Held: work needed for interment and exhuma0on services. We agree with the NLRC that while the
YES. There is "labor-only" contrac0ng where the person supplying workers to an employer Contract of Service implies that respondent MMPCI would sell subject equipment to Ward at
does not have substan0al capital or investment in the form of tools, equipment, machineries, some future 0me, the former failed to present any contract of sale as proof that, indeed, it
work premises, among others, and the workers recruited and placed by such person are actually sold said equipment to Ward. Ward does not have an absolute right to use or enjoy
performing ac0vi0es which are directly related to the principal business of such employer. In subject equipment, considering that its right to do so is subject to respondent MMPCI's use
such cases, the person or intermediary shall be considered merely as an agent of the employer thereof at any 0me the laber requires it. Manila Memorial even retained the right to control
who shall be responsible to the workers in the same manner and extent as if the laber were the performance of the work of the employees concerned. The exercise of its supervisory
directly employed by him. func0on is heavily dependent upon the needs of pe00oner Memorial Park.
In legi0mate contrac0ng, there exists a trilateral rela0onship under which there is a contract The NLRC also found that Ward Trading's business documents fell short of sound business
for a specific job, work or service between the principal and the contractor or subcontractor, prac0ces. They failed to present any proof that Ward is duly registered as [a] contractor with
and a contract of employment between the contractor or subcontractor and its workers. the Department of Labor and Employment. For failing to register as a contractor, a
presump0on arises that one is engaged in labor-only contrac0ng unless the contractor
Labor-only contrac0ng is hereby declared prohibited. For this purpose, labor-only contrac0ng overcomes the burden of proving that it has substan0al capital, investment, tools and the like.
shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies In this case, however, Manila Memorial failed to adduce evidence to prove that Ward Trading
or places workers to perform a job, work or service for a principal, and any of the following had any substan0al capital, investment or assets to perform the work contracted for. Thus, the
elements are present: presump0on that Ward Trading is a labor-only contractor stands. Consequently, Manila
i) The contractor or subcontractor does not have substan0al capital or investment which Memorial is deemed the employer of respondents. As regular employees of Manila Memorial,
relates to the job, work or service to be performed and the employees recruited, supplied or

respondents are en0tled to their claims for wages and other benefits as awarded by the NLRC In its decision, the CA ruled that while it was established that Valenzuela was an employee of
and affirmed by the CA. AMOVI, there was no proof that the company or its president dismissed him from service. It
likewise affirmed thatValenzuela did not abandon his employment as the respondents failed to
VALENZUELA vs ALEXANDRA MINING AND OIL VENTURES INC establish acts showing his inten0on to leave employment. Thus, it applied the ruling in Exodus,
GR. No. 222419 where it was held that when there is no evidence of the fact of dismissal on the part of the
5 October 2016 employer and, at the same 0me, no proof of abandonment on the part of the employee, the
Tickler: family driver; backwages proper relief is reinstatement without backwages.
Facts:
Herein pe00oner Ramil Valenzuela filed a complaint for illegal dismissal, nonpayment of A cursory reading of Exodus, however, will show that it is inapplicable in the instant case. It is
backwages, over0me pay, separa0on pay, moral and exemplary damages and aborney’s fees well to remember that in Exodus, the resolu0on to reinstate the workers without any
filed by Ramil Valenzuela against Alexandra Minion and Oil Ventures Inc and its owner and backwages was brought about by the finding that there was neither illegal dismissal nor
president, Cesar Detera. abandonment of work. Thus, to be fair with both par0es, the Court ordered the reinstatement
of the workers without unduly burdening the employer with the payment of backwages since
Valenzuela alleged that hew as hired as a company driver of AMOVI with an 8-hour work shie the fact of dismissal, much less illegal, was not established.
from 8am to 5pm, with a monthly salary of P12,000. Aeer 5 years and 5 months of service, he
was told that he can no longer con0nue to work as there were no forthcoming funds to pay for The instant case does not share the same factual milieu with Exodus. It is noteworthy to
his salary. emphasise that in all the pleadings submibed by Cesar before the LA, NLRC andCA, he
vigorously refuted the existence of an employer-employee rela0onship between AMOVI and
For their part, the respondents alleged that Valenzuela was actually hired as a family driver of Valenzuela, and at the same 0me, presented himself as the real employer of the laber. His
the Deteras. They claimed that the monthly salary of Valenzuela was charged to AMOVI’s argument was that Valenzuela was not a company driver but a family driver of the Deteras.
account for convenience. They averred that on June 15, 2013, Valenzuela informed Cesar’s
wife, Annlynn, that he was going home to his province to visit his parents. Annlynn granted
him leave but when she asked him whether he can return for work the following Monday, The ques0on regarding who may be deemed the real employer of Valenzuela had been
Valenzuela told her that he would give her a call. Pe00oner allegedly did not show up for work unanimously resolved and agreed by the LA, NLRC and the CA to be AMOVI.The labor tribunals
nor called the Deteras to inform them of the reason for his absence. Further, they claimed that and the CA were all in accord thatValenzuela was an employee of AMOVI as evidenced by the
a week later, Valenzuela showed up at the Deteras’ residence and informed them that he was iden0fica0on card and payslips sta0ng the company as his employer. Moreover, the CA held
resigning and asked for his separa0on pay. Annlynn agreed but asked him to submit a that, u0lising the four-fold test of employer-employee rela0onship, the result would show that
resigna0on later. However, Valenzuela just walked out and never returned. Valenzuela was under the control of AMOVI .
The Labor Arbiter rendered a decision holding that Valenzuela had been illegally dismissed. The CA, however, erred in holding that there was no evidence of dismissal, as it is clear from
The Labor Arbiter dismissed the claim of Deteras that Valenzuela was a family driver and not Cesar’s own admission that Valenzuela was unceremoniously dismissed from service. In all his
an employee of AMOVI; and that pe00oner abandoned his employment because respondents pleadings, while claiming to be the real employer of Valenzuela, Cesar impliedly admibed
failed to present any evidence to support the same. The NLRC affirmed the judgment of the dismissing him from employment by repeatedly invoking Ar0cle 150 of the Labor Code to
LA. The appellate court, however, partly affirmed the ruling with modifica0on. It held that jus0fy his ac0on. The provision reads as follows:
since both pe00oner and respondent failed to prove their claims, the remedy to the situa0on Art. 150. Service of termina0on no0ce. If the dura0on of the household service is not
was to reinstate Valenzuela without backwages. determined either in s0pula0on or by nature of the service, the employer or the househelper
may give no0ce to put an end to the rela0onship five (5) days before the intended termina0on
Issue: of the service.
WON the Court of Appeals err in dele0ng the award of backwages On the basis of the foregoing provision, Cesar asseverated that as a family driver, Valenzuela’s
service may be terminated at will by his employer. Thus, there is implied admission that he
Held: indeed terminated Valenzuela out of his own voli0on, without sufficient ground and no0ce.
Yes, the Court of Appeals erred in dele0ng the award of backwages to pe00oner because it is
clear in the case that there was illegal dismissal.

Unfortunately for Cesar, the labor tribunals and the CA all agreed that Valenzuela was a In the absence of showing of an overt or posi0ve act proving pe00oner had dismissed
company employee and his admission on the fact of the laber’s dismissal only established that respondent, the laber’s claims cannot be sustained, as such opposi0on would be self-serving,
it was done without regard to substan0ve and procedural due process. conjectural, and of no proba0ve value. Similarly, pe00oner’s claims of respondent’s voluntary
x x x resigna0on and/or abandonment cannot be given merit, considering pe00oner’s failure to
discharge the burden of proving the deliberate and unjus0fied refusal of respondent to
Consistent with the finding that Valenzuela had been illegally dismissed, he is, therefore, resume employment without inten0on of returning. Hence, there is no dismissal or
en0tled to reinstatement and full backwages. In view, however, of the strained rela0ons abandonment to speak of, the appropriate course of ac0on is to reinstate the employee,
between the par0es, the award of separa0on pay in lieu of reinstatement is a more feasible without backwages. The Court agrees with pe00oner that the lower courts erred in awarding
alterna0ve. separa0on pay, that the liability for the payment of separa0on pay is but a legal consequence
of illegal dismissal where reinstatement is no longer viable or feasible. Since there was no
HSY MARKETING LTD. CO. vs VILLASTIQUE dismissal, no separa0on pay must be awarded.
GR. No. 219569
17 August 2016 SLL INTERNATIONAL CABLES SPECIALIST vs NLRC
Tickler: illegal dismissal; accident GR. No. 172161
Facts: 2 March 2011
In January 2003, pe00oner hired respondent as a field driver for Fabulous Jeans & Shirt & Tickler: value of facili=es; wages
General Merchandise (Fabulous Jeans), tasked to deliver ready-to-go wear items and/or Facts:
general merchandise for a daily compensa0on of P370. In January 2011, respondent figured in Private respondents Lopez, Canete and Zuniga were hired by pe00oner Lagon as appren0ce or
an accident when the service vehicle he was driving in Iligan City bumped a pedestrian, Ryan trainee cable/lineman. The three were paid the full minimum wage and other benefits but
Dorataryo. Fabulous Jeans shouldered the hospitalisa0on and medical expenses of Dorotaryo since they were only trainees, they did not report for work regularly but came in as subs0tutes
which respondent was asked to reimburse, but to no avail. In February 2011, respondent was to the regular workers or in undertakings that needed extra workers to expedite comple0on of
allegedly required to sign a resigna0on leber, which he refused to do. A couple of days later, he work. Their employment is terminated upon comple0on of each project.
tried to collect his salary for that week but was told that it was withheld because of his refusal
to resign. Convinced that he was already terminated, he lost no 0me in filing a complaint for For 4 separate projects from May 1997-December 1999, they received the wage of P145.00,
illegal dismissal with money claims. the minimum prescribed daily wage for Region VII when they first started work in March 1997
[In July 1997, the amount of P145 was increased to P150.00 by the Regional Wage Board
In their defence, pe00oner contended that respondent had commibed several viola0ons in (RWB) and in October of the same year, the laber was increased to P155.00. In 1999, the
the course of his employment, and had been found by his superior and fellow employees to be minimum prescribed rate for Manila was P198.00.]
a negligent and reckless driver, which resulted in the vehicular mishap involving Dorataryo.
Aeer they paid for Dorataryo’s hospitalisa0on and medical expenses, respondent went on In January to February 2000, the 3 received the wage of P165.00. The exis0ng rate at that 0me
absence without leave, presumably to evade liability for his recklessness. Since respondent was P213.00.
was the one who refused to report for work, he should be considered as having voluntarily
severed his own employment. Thus, his money claims cannot prosper as he was not In March 2000, private respondents filed a complaint for illegal dismissal, non-payment of
terminated. wages, holiday pay, 13th month pay for 1997 and 1998 and SIL pay as well as damages and AF.
In their answers, pe00oners alleged that the food allowance of P63.00 per day as well as
Issue: private respondents allowance for lodging house, transporta0on, electricity, water and snacks
WON pe00oner was illegally dismissed allowance should be added to their basic pay. With these, pe00oners claimed that private
respondents received higher wage rate than that prescribed in Rizal and Manila. They argued
Held: that the rulings in Agabon v. NLRC and Glaxo Wellcome Philippines, Inc. v. Nagkakaisang
No, there was no substan0al evidence presented to show that respondent was illegally Empleyado Ng Wellcome-DFA should be applied by analogy, in the sense that the lack of
dismissed. wriben acceptance of the employees of the facili0es enjoyed by them should not mean that
the value of the facili0es could not be included in the computa0on of the private respondents’
“wages.”

In short, the benefit or privilege given to the employee which cons0tutes an extra
Issue remunera0on above and over his basic or ordinary earning or wage is supplement; and when
WON the value of facili0es should be included in the computa0on of the wages received by said benefit or privilege is part of the laborers’ basic wages, it is a facility. The dis0nc0on lies
respondents not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the
purpose for which it is given. In the case at bench, the items provided were given freely by SLL
Held: for the purpose of maintaining the efficiency and health of its workers while they were
No, the value of facili0es should not be included in the computa0on of the wages received by working at their respec0ve projects.
respondents.
For said reason, the cases of Agabon and Glaxo are inapplicable in this case. At any rate, these
Sec0on 1 of DOLE Memorandum Circular No. 2 provides that an employer may provide were cases of dismissal with just and authorized causes. The present case involves the maber
subsidized meals and snacks to his employees provided that the subsidy shall not be less that of the failure of the pe00oners to comply with the payment of the prescribed minimum wage.
30% of the fair and reasonable value of such facili0es. In such cases, the employer may deduct
from the wages of the employees not more than 70% of the value of the meals and snacks NOTES: Private respondents are en0tled to be paid the minimum wage, whether they are
enjoyed by the laber, provided that such deduc0on is with the wriben authoriza0on of the regular or non-regular employees. Sec0on 3, Rule VII of the Rules to Implement the Labor
employees concerned. Code specifically enumerates those who are not covered by the payment of minimum wage.
Project employees are not among them.
Moreover, before the value of facili0es can be deducted from the employees’ wages, the
following requisites must all be abendant: AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION vs AMERICAN WIRE AND
1. proof must be shown that such facili0es are customarily furnished by the trade; CABLE CO., INC
2. the provision of deduc0ble facili0es must be voluntarily accepted in wri0ng by the GR. No. 155059
employee; and 29 April 2005
3. facili0es must be charged at reasonable value. Tickler: liaison officer; economic circumstance; two-=ered test
Facts:
Mere availment is not sufficient to allow deduc0ons from employees’ wages. American Wire and Cable Co., Inc., is a corpora0on engaged in the manufacture of wires and
cables. There are two unions in this company, the American Wire andCable Monthly-Rated
These requirements, however, have not been met in this case. SLL failed to present any Employees Union and the American Wire and Cable Daily-Rated Employees. An original ac0on
company policy or guideline showing that provisions for meals and lodging were part of the was filed before the NCMB of the Department of Labor and Employment (DOLE) by the two
employee’s salaries. It also failed to provide proof of the employees’ wriben authoriza0on, unions for voluntary arbitra0on. The pe00oner submits that the withdrawal of the private
much less show how they arrived at their valua0ons. At any rate, it is not even clear whether respondent of the 35%premium pay for selected days during the Holy Week and Christmas
private respondents actually enjoyed said facili0es. season, the holding of the Christmas Party and its incidental benefits, and the giving of service
** awards, which they have long enjoyed, violated Ar0cle 100 of the Labor Code.A decision was
The Court, at this point, makes a dis0nc0on between “facili0es” and “supplements.” It is of the rendered by the Voluntary Arbitrator in favour of the private respondent.On appeal, CA
view that the food and lodging, or the electricity and water allegedly consumed by private affirmed and upheld the Arbitrator’s decision.
respondents in this case were not facili0es but supplements. In the case of Atok-Big Wedge
Assn. v. Atok-Big Wedge Co., the two terms were dis0nguished from one another in this wise: Issue:
“Supplements,” therefore, cons0tute extra remunera0on or special privileges or benefits given WON private respondent is guilty of viola0ng Art. 100 of the Labor Code, as amended, when
to or received by the laborers over and above their ordinary earnings or wages. “Facili0es,” on the benefits/en0tlements given to the members of pe00oner’s union were withdrawn
the other hand, are items of expense necessary for the laborer’s and his family’s existence and
subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and Held:
when furnished by the employer are deduc0ble therefrom, since if they are not so furnished, No, the Court ruled that private respondent did not violate Art. 100 of the Labor Code.
the laborer would spend and pay for them just the same.

ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. –Nothing in this The CBA also provided that employees who acquire regular employment status within the year
Book shall be construed to eliminate or in any way diminish supplements, or other employee but aeer the effec0vity of a par0cular salary increase shall receive a propor0onate part of the
benefits being enjoyed at the 0me of promulga0on of this Code. increase upon abainment of their regular status. Then on October 6, 2000, the Regional
Tripar0te Wage and Produc0vity Board, Na0onal Capital Region, issued Wage Order No.
The benefits and en0tlements men0oned in the instant case are all considered bonuses which NCR-08 10 (WO No. 8) which raised the daily minimum wage from PhP223.50 to PhP250
were given by the private respondent out of its generosity and munificence. A bonus is an effec0ve November 1, 2000. Conformably, the wages of 17 proba0onary employees, (second
amount granted and paid to an employee for his industry and loyalty which contributed to the group), were increased to PhP250.00 effec0ve November 1, 2000. On various dates during the
success of the employer’s business and made possible the realisa0on of profits. The gran0ng last quarter of 2000, the above named 17 employees abained regular employment 11 and
of a bonus is a management preroga0ve, something given in addi0on to what is ordinarily received 25% of 10% of their salaries as granted under the provision on regulariza0on increase
received by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable under Ar0cle X, Sec. 2 of the CBA.
obliga0on, except when it is made part of the wage, salary or compensa0on of the employee.
For a bonus to be enforceable, it must have been promised by the employer and expressly In January 2001, TSPIC implemented the new wage rates as mandated by the CBA. As a result,
agreed upon by the par0es or it must have had a fixed amount and had been a long and the nine employees (first group), who were senior to the above-listed recently regularized
regular prac0ce on the part of the employer. The assailed benefits were never subjects of any employees, received less wages. On January 19, 2001, a few weeks aeer the salary increase for
agreement between the union and the company. It was never incorporated in the CBA. To be the year 2001 became effec0ve, TSPIC's Human Resources Department no0fied 24 employees
considered a “regular prac0ce,” the giving of the bonus should have been done over a long that due to an error in the automated payroll system, they were overpaid and the
period of 0me, and must be shown to have been consistent and deliberate. The downtrend in overpayment would be deducted from their salaries in a staggered basis, star0ng February
the grant of these two bonuses over the years demonstrates that there is nothing consistent 2001. TSPIC explained that the correc0on of the erroneous computa0on was based on the
about it. To hold that an employer should be forced to distribute bonuses which it granted out credi0ng provision of CBA.
of kindness is to penalise him for his past generosity.
Union, on the other hand, asserted that there was no error and the deduc0on of the alleged
TSPIC CORPORATION vs TSPIC EMPLOYEES UNION (FFW) overpayment from employees cons0tuted diminu0on of pay. TSPIC and the Union agreed to
GR. No. 163419 undergo voluntary arbitra0on on the solitary issue of whether or not the acts of the
13 February 2008 management in making deduc0ons from the salaries of the affected employees cons0tuted
Tickler:increase in wage; CBA diminu0on of pay.
Facts:
TSPIC is engaged in the business of designing, manufacturing, and marke0ng integrated On September 13, 2001, Arbitrator Jimenez rendered a Decision, holding that the unilateral
circuits to serve the communica0on, automo0ve, data processing, and aerospace industries. deduc0on made by TSPIC violated Art. 100 13 of the Labor Code.
Respondent TSPIC Employees Union (FFW) (Union), on the other hand, is the registered
bargaining agent of the rank-and-file employees of TSPIC. Respondents are all members of the TSPIC filed before the CA a pe00on for review. The appellate court, through its October 22,
union. 2003 Decision, dismissed the pe00on and affirmed in toto the decision of the voluntary
arbitrator. The CA declared TSPIC's computa0on allowing PhP287 as daily wages to the newly
In 1999, TSPIC and the Union entered into a Collec0ve Bargaining Agreement (CBA) for the regularised employees to be correct, no0ng that the computa0on conformed to WO No. 8 and
years 2000 to 2004. The CBA included a provision on yearly salary increases star0ng January the provisions of the CBA. According to the CA, TSPIC failed to convince the appellate court
2000 un0l January 2002. The wage/salary increases for the years 2001 and 2002 shall be that the deduc0on was a result of a system error in the automated payroll system
deemed inclusive of the mandated minimum wage increases under future Wage Orders, that
may be issued aeer Wage Order No. NCR-07, and shall be considered as correc0on of any Issue:
wage distor0on that may have been brought about by the said future Wage Orders. Thus the WON TSPIC violated Art. 100 of the Labor Code
wage/salary increases in 2001 and 2002 shall be deemed as compliance to future wage orders
aeer Wage Order No. NCR-07. Consequently, on January 1, 2000, all the regular rank-and-file Held:
employees of TSPIC received a 10% increase in their salary. Accordingly, the following nine (9) No, TSPIC did not violate Art. 100 of the Labor Code.
respondents (first group) who were already regular employees received the said increase in
their salary.

According to TSPIC, it is specifically provided in the CBA that "the salary/wage increase for the without viola0ng the prohibi0on against non-diminu0on of benefits. Hence, any amount given
year 2001 shall be deemed inclusive of the mandated minimum wage increases under future to the employees in excess of what they were en0tled to, as computed above, may be legally
wage orders that may be issued aeer Wage Order No. 7." The Union, on the other hand, insists deducted by TSPIC from the employees' salaries. TSPIC, in turn, must refund to individual
that the "credi0ng" provision of the CBA finds no applica0on in the present case, since at the respondents any amount deducted from their salaries which was in excess of what TSPIC is
0me WO No. 8 was issued, the proba0onary employees (second group) were not yet covered legally allowed to deduct from the salaries based on the computa0ons discussed in this
by the CBA, par0cularly by its credi0ng provision. Decision.
As a general rule, in the interpreta0on of a contract, the inten0on of the par0es is to be LEPANTO CERAMICS INC vs LEPANTO CERAMICS EMPLOYEES ASSOCIATION
pursued. Libera necat spiritus vivificat. An instrument must be interpreted according to the GR. No. 180866
inten0on of the par0es. It is the duty of the courts to place a prac0cal and realis0c 2 March 2010
construc0on upon it, giving due considera0on to the context in which it is nego0ated and the Tickler: Christmas bonus
purpose which it is intended to serve. Absurd and illogical interpreta0ons should also be Facts:
avoided. Considering that the par0es have unequivocally agreed to subs0tute the benefits Pe00oner Lepanto Ceramics, Incorporated is a duly organized corpora0on whose business is
granted under the CBA with those granted under wage orders, the agreement must prevail primarily to manufacture, make, buy and sell, on wholesale basis, among others, 0les,
and be given full effect. marbles, mosaics and other similar products. Respondent Lepanto Ceramics Employees
Associa0on (respondent Associa0on) is a legi0mate labor organiza0on duly registered with the
It may be reasonably concluded that TSPIC granted the salary increases under the condi0on Department of Labor and Employment. It is the sole and exclusive bargaining agent in the
that any wage order that may be subsequently issued shall be credited against the previously establishment of pe00oner.
granted increase. The inten0on of the par0es is clear: As long as an employee is qualified to
receive the 12% increase in salary, the employee shall be granted the increase; and as long as In December 1998, pe00oner gave a P3,000.00 bonus to its employees, members of the
an employee is granted the 12% increase, the amount shall be credited against any wage order respondent Associa0on. Subsequently, in September 1999, pe00oner and respondent
issued aeer WO No. 7. Associa0on entered into a Collec0ve Bargaining Agreement (CBA) which provides for, among
others, the grant of a Christmas gie package/bonus to the members of the respondent
To compute for the increase in wage rates for the year 2001, get the increase of 12% of the Associa0on. The Christmas bonus was one of the enumerated "exis0ng benefit, prac0ce of
employees' salaries as of December 31, 2000; then subtract from that amount, the amount tradi0onal rights" which "shall remain in full force and effect."
increased in salaries as granted under WO No. 8 in accordance with the credi0ng provision of
the CBA, to arrive at the increase in salaries for the year 2001 of the recently regularized In the succeeding years, 1999, 2000 and 2001, the bonus was not in cash. Instead, pe00oner
employees. Add the result to their salaries as of December 31, 2000 to get the proper salary gave each of the members of respondent Associa0on Tile Redemp0on Cer0ficates equivalent
beginning January 1, 2001. With these computa0ons, the credi0ng provision of the CBA is put to P3,000.00. The bonus for the year 2002 is the root of the present dispute. Pe00oner gave a
in effect, and the wage distor0on between the first and second group of employees is cured. year-end cash benefit of Six Hundred Pesos (P600.00) and offered a cash advance to interested
employees equivalent to one (1) month salary payable in one year. The respondent Associa0on
TSPIC also maintains that charging the overpayments made to the 16 respondents through objected to the P600.00 cash benefit and argued that this was in viola0on of the CBA it
staggered deduc0ons from their salaries does not cons0tute diminu0on of benefits. We agree executed with the pe00oner.
with TSPIC.
Respondent Associa0on insisted that it has been the tradi0onal prac0ce of the company to
Diminu0on of benefits is the unilateral withdrawal by the employer of benefits already grant its members Christmas bonuses during the end of the calendar year, each in the amount
enjoyed by the employees. There is diminu0on of benefits when it is shown that: (1) the grant of P3,000.00 as an expression of gra0tude to the employees for their par0cipa0on in the
or benefit is founded on a policy or has ripened into a prac0ce over a long period; (2) the company's con0nued existence in the market. The bonus was either in cash or in the form of
prac0ce is consistent and deliberate; (3) the prac0ce is not due to error in the construc0on or company 0les. In 2002, in a speech during the Christmas celebra0on, one of the company's top
applica0on of a doubsul or difficult ques0on of law; and (4) the diminu0on or discon0nuance execu0ves assured the employees of said bonus. However, the Human Resources
is done unilaterally by the employer. As correctly pointed out by TSPIC, the overpayment of its Development Manager informed them that the tradi0onal bonus would not be given as the
employees was a result of an error. This error was immediately rec0fied by TSPIC upon its company's earnings were intended for the payment of its bank loans. Respondent Associa0on
discovery. We have ruled before that an erroneously granted benefit may be withdrawn argued that this was in viola0on of their CBA. The pe00oner averred that the complaint for

nonpayment of the 2002 Christmas bonus had no basis as the same was not a demandable A CBA refers to a nego0ated contract between a legi0mate labor organiza0on and the
and enforceable obliga0on. It argued that the giving of extra compensa0on was based on the employer, concerning wages, hours of work and all other terms and condi0ons of employment
company's available resources for a given year and the workers are not en0tled to a bonus if in a bargaining unit. As in all other contracts, the par0es to a CBA may establish such
the company does not make profits. s0pula0ons, clauses, terms and condi0ons as they may deem convenient, provided these are
not contrary to law, morals, good customs, public order or public policy.
Voluntary Arbitrator rendered a Decision dated 2 June 2003, declaring that pe00oner is bound
to grant each of its workers a Christmas bonus of P3,000.00 for the reason that the bonus was It is a familiar and fundamental doctrine in labor law that the CBA is the law between the
given prior to the effec0vity of the CBA between the par0es and that the financial losses of the par0es and they are obliged to comply with its provisions. This principle stands strong and true
company is not a sufficient reason to exempt it from gran0ng the same. It stressed that the in the case at bar. A reading of the provision of the CBA reveals that the same provides for the
CBA is a binding contract and cons0tutes the law between the par0es. The Voluntary giving of a "Christmas gie package/bonus" without qualifica0on. Terse and clear, the said
Arbitrator further expounded that since the employees had already been given P600.00 cash provision did not state that the Christmas package shall be made to depend on the pe00oner's
bonus, the same should be deducted from the claimed amount of P3,000.00, thus leaving a financial standing. The records are also beree of any showing that the pe00oner made it clear
balance of P2,400.00. during CBA nego0a0ons that the bonus was dependent on any condi0on. Indeed, if the
pe00oner and respondent Associa0on intended that the P3,000.00 bonus would be
Pe00oner elevated the case to the Court of Appeals erroneously via a Pe00on for Cer0orari, dependent on the company earnings, such inten0on should have been expressed in the CBA.
the Court of Appeals affirmed in toto the decision of the Voluntary Arbitrator
The rule is sebled that any benefit and supplement being enjoyed by the employees cannot be
Issue: reduced, diminished, discon0nued or eliminated by the employer. The principle of non-
WON the Court of Appeals erred in affirming the ruling of the voluntary arbitrator that the diminu0on of benefits is founded on the cons0tu0onal mandate to protect the rights of
pe00oner is obliged to give the members of the respondent Associa0on a Christmas bonus in workers and to promote their welfare and to afford labor full protec0on.
the amount of P3.000 in 2002
Hence, absent any proof that pe00oner's consent was vi0ated by fraud, mistake or duress, it is
Held: presumed that it entered into the CBA voluntarily and had full knowledge of the contents
No, the ruling of the appellate court is correct in that giving a Christmas bonus to the thereof and was aware of its commitments under the contract. The Court is fully aware that
respondent Associa0on is an obliga0on of the pe00oner. implementa0on to the leber of the subject CBA provision may further deplete pe00oner's
resources. Pe00oner's remedy though lies not in the Court's invalida0on of the provision but
By defini0on, a "bonus" is a gratuity or act of liberality of the giver. It is something given in in the par0es' clarifica0on of the same in subsequent CBA nego0a0ons.
addi0on to what is ordinarily received by or strictly due the recipient. A bonus is granted and
paid to an employee for his industry and loyalty which contributed to the success of the EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. vs EASTERN TELECOMS EMPLOYEES
employer's business and made possible the realisa0on of profits. UNION
GR. No. 185665
A bonus is also granted by an enlightened employer to spur the employee to greater efforts for 8 February 2012
the success of the business and realisa0on of bigger profits. Tickler: liaison officer; economic circumstance; two-=ered test
Facts:
Generally, a bonus is not a demandable and enforceable obliga0on. For a bonus to be Eastern Telecommunica0ons Phils., Inc. (ETPI) is a corpora0on engaged in the business of
enforceable, it must have been promised by the employer and expressly agreed upon by the providing telecommunica0ons facili0es, par0cularly leasing interna0onal date lines or circuits,
par0es. Given that the bonus in this case is integrated in the CBA, the same partakes the regular landlines, internet and data services, employing approximately 400 employees.
nature of a demandable obliga0on. Verily, by virtue of its incorpora0on in the CBA, the
Christmas bonus due to respondent Associa0on has become more than just an act of Eastern Telecoms Employees Union (ETEU) is the cer0fied exclusive bargaining agent of the
generosity on the part of the pe00oner but a contractual obliga0on it has undertaken. company's rank and file employees with a strong following of 147 regular members. It has an
exis0ng collec0[ve] bargaining agreement with the company to expire in the year 2004 with a
Side Agreement signed on September 3, 2001.

In essence, the labor dispute was a spin-off of the company's plan to defer payment of the condi0oned on the success of the business and availability of cash. It submibed that said
2003 14th, 15th and 16th month bonuses some0me in April 2004. The company's main bonus provision partook of the nature of a "one-0me" grant which the employees may
ground in postponing the payment of bonuses is due to alleged con0nuing deteriora0on of demand only during the year when the Side Agreement was executed and was never intended
company's financial posi0on which started in the year 2000. However, ETPI while postponing to cover the en0re term of the CBA.
payment of bonuses some0me in April 2004, such payment would also be subject to
availability of funds. On April 28, 2005, the NLRC issued its Resolu0on dismissing ETEU's complaint and held that
ETPI could not be forced to pay the union members the 14th, 15th and 16th month bonuses
The union strongly opposed the deferment in payment of the bonuses by filing a preven0ve for the year 2003 and the 14th month bonus for the year 2004 inasmuch as the payment of
media0on complaint with the NCMB on July 3, 2003, the purpose of which complaint is to these addi0onal benefits was basically a management preroga0ve, being an act of generosity
determine the date when the bonus should be paid. and munificence on the part of the company and con0ngent upon the realiza0on of profits.
The NLRC pronounced that ETPI may not be obliged to pay these extra compensa0ons in view
Aeer agreement that payment shall be made on April 2004, the company made a sudden of the substan0al decline in its financial condi0on. Likewise, the NLRC found that ETPI was not
turnaround in its posi0on by declaring that they will no longer pay the bonuses un0l the issue guilty of the ULP charge elabora0ng that no sufficient and substan0al evidence was adduced to
is resolved through compulsory arbitra0on. abribute malice to the company for its refusal to pay the subject bonuses.
Ac0ng on the cer0fied labor dispute, a hearing was called on July 16, 2004 wherein the par0es Aggrieved, ETEU filed a pe00on for cer0orari before the CA ascribing grave abuse of discre0on
have submibed that the issues for resolu0on are (1) unfair labor prac0ce and (2) the grant of on the NLRC. In its assailed June 25, 2008 Decision, the CA declared that the Side Agreements
14th, 15th and 16th month bonuses for 2003, and 14th month bonus for 2004. ETEU posited of the 1998 and 2001 CBA created a contractual obliga0on on ETPI to confer the subject
that by reason of its long and regular concession, the payment of these monetary benefits had bonuses to its employees without qualifica0on or condi0on. It also found that the grant of said
ripened into a company prac0ce which could no longer be unilaterally withdrawn by ETPI. bonuses has already ripened into a company prac0ce and their denial would amount to
diminu0on of the employees' benefits. It held that ETPI could not seek refuge under Ar0cle
ETEU added that this long-standing company prac0ce had been expressly confirmed in the 1267 of the Civil Code because this provision would apply only when the difficulty in fulfilling
Side Agreements of the 1998-2001 and 2001-2004 Collec0ve Bargaining Agreements the contractual obliga0on was manifestly beyond the contempla0on of the par0es, which was
(CBA)which provided for the con0nuous grant of these bonuses in no uncertain terms. ETEU not the case therein. The CA, however, sustained the NLRC finding that the allega0on of ULP
theorized that the grant of the subject bonuses is not only a company prac0ce but also a was devoid of merit.
contractual obliga0on of ETPI to the union members.
Issue:
ETEU contended that the unjus0fied and malicious refusal of the company to pay the subject WON ETPI violated Art. 100 by non-payment of 14th, 15th, and 16 month pay
bonuses was a clear viola0on of the economic provision of the CBA and cons0tutes unfair
labor prac0ce (ULP). ETPI maintained that the complaint for nonpayment of 14th, 15th and Held:
16th month bonuses for 2003 and 14th month bonus for 2004 was beree of any legal and From a legal point of view, a bonus is a gratuity or act of liberality of the giver which the
factual basis. It averred that the subject bonuses were not part of the legally demandable recipient has no right to demand as a maber of right. The grant of a bonus is basically a
wage and the grant thereof to its employees was an act of pure gratuity and generosity on its management preroga0ve which cannot be forced upon the employer who may not be obliged
part, involving the exercise of management preroga0ve and always dependent on the financial to assume the onerous burden of gran0ng bonuses or other benefits aside from the
performance and realiza0on of profits. It posited that it resorted to the discon0nuance of employee's basic salaries or wages.
payment of the bonuses due to the unabated huge losses that the company had con0nuously
experienced. It claimed that it had been suffering serious business losses since 2000 and to A bonus, however, becomes a demandable or enforceable obliga0on when it is made part of
require the company to pay the subject bonuses during its dire financial straits would in effect the wage or salary or compensa0on of the employee. Par0cularly instruc0ve is the ruling of
penalize it for its past generosity. It alleged that the non-payment of the subject bonuses was the Court in Metro Transit Organiza0on, Inc. v. Na0onal Labor Rela0ons Commission, where it
neither flagrant nor malicious and, hence, would not amount to unfair labor prac0ce. Further, was wriben: Whether or not a bonus forms part of wages depends upon the circumstances
and condi0ons for its payment. If it is addi0onal compensa0on which the employer promised
ETPI argued that the bonus provision in the 2001-2004 CBA Side Agreement was a mere and agreed to give without any condi0ons imposed for its payment, such as success of
affirma0on that the distribu0on of bonuses was discre0onary to the company, premised and business or greater produc0on or output, then it is part of the wage. But if it is paid only if

profits are realised or if a certain level of produc0vity is achieved, it cannot be considered part employees 14th month bonus every April as well as 15th and 16th month bonuses every
of the wage. Where it is not payable to all but only to some employees and only when their December of the year, without fail, from 1975 to 2002 or for 27 years whether it earned profits
labor becomes more efficient or more produc0ve, it is only an inducement for efficiency, a or not. The considerable length of 0me ETPI has been giving the special grants to its
prize therefore, not a part of the wage. In the case at bench, it is indubitable that ETPI and employees indicates a unilateral and voluntary act on its part to con0nue giving said benefits
ETEU agreed on the inclusion of a provision for the grant of 14th, 15th and 16th month knowing that such act was not required by law. Accordingly, a company prac0ce in favour of
bonuses in the 1998-2001 CBA Side Agreement, 16 as well as in the 2001-2004 CBA Side the employees has been established and the payments made by ETPI pursuant thereto ripened
Agreement, 17 which was signed on September 3, 2001. into benefits enjoyed by the employees.
A reading of the above provision reveals that the same provides for the giving of 14th, 15th The giving of the subject bonuses cannot be peremptorily withdrawn by ETPI without viola0ng
and 16th month bonuses without qualifica0on. The wording of the provision does not allow Ar0cle 100 of the Labor Code. The rule is sebled that any benefit and supplement being
any other interpreta0on. There were no condi0ons specified in the CBA Side Agreements for enjoyed by the employees cannot be reduced, diminished, discon0nued or eliminated by the
the grant of the benefits contrary to the claim of ETPI that the same is jus0fied only when employer. The principle of non-diminu0on of benefits is founded on the cons0tu0onal
there are profits earned by the company. Terse and clear, the said provision does not state that mandate to protect the rights of workers and to promote their welfare and to afford labor full
the subject bonuses shall be made to depend on the ETPI's financial standing or that their protec0on.
payment was con0ngent upon the realisa0on of profits. Neither does it state that if the
company derives no profits, no bonuses are to be given to the employees. In fine, the payment GSIS vs NLRC
of these bonuses was not related to the profitability of business opera0ons. GR. No. 180045
17 November 2010
The records are also beree of any showing that the ETPI made it clear before or during the Tickler: liability when there is no employer-employee rela=onship
execu0on of the Side Agreements that the bonuses shall be subject to any condi0on. Indeed, if Facts:
ETPI and ETEU intended that the subject bonuses would be dependent on the company Respondents were hired DNL Security Agency. By virtue of the service contract entered into by
earnings, such inten0on should have been expressly declared in the Side Agreements or the DNL Security and pe00oner Government Service Insurance System on May 1, 1978,
bonus provision should have been deleted altogether. In the absence of any proof that ETPI's respondents were assigned to pe00oners Tacloban City office, each receiving a monthly
consent was vi0ated by fraud, mistake or duress, it is presumed that it entered into the Side income of P1,400.00. Some0me in July 1989, pe00oner voluntarily increased respondents
Agreements voluntarily, that it had full knowledge of the contents thereof and that it was monthly salary to P3,000.00.
aware of its commitment under the contract. Verily, by virtue of its incorpora0on in the CBA
Side Agreements, the grant of 14th, 15th and 16th month bonuses has become more than just In February 1993, DNL Security informed respondents that its service contract with pe00oner
an act of generosity on the part of ETPI but a contractual obliga0on it has undertaken. was terminated. This notwithstanding, DNL Security instructed respondents to con0nue
Moreover, the con0nuous conferment of bonuses by ETPI to the union members from 1998 to repor0ng for work to pe00oner. Respondents worked as instructed un0l April 20, 1993, but
2002 by virtue of the Side Agreements evidently negates its argument that the giving of the without receiving their wages; aeer which, they were terminated from employment.
subject bonuses is a management preroga0ve. Respondents filed with the NLRC a complaint against DNL Security and pe00oner for illegal
dismissal, separa0on pay, salary differen0al, 13th month pay, and payment of unpaid salary.
The Court finds no merit in ETPI's conten0on that the bonus provision confirms the grant of The LA found that respondents were not illegally terminated from employment because the
the subject bonuses only on a single instance because if this is so, the par0es should have employment of security guards is dependent on the service contract between the security
included such limita0on in the agreement. Nowhere in the Side Agreement does it say that the agency and its client. However, considering that respondents had been out of work for a long
subject bonuses shall be conferred once during the year the Side Agreement was signed. period, and consonant with the principle of social jus0ce, the LA awarded respondents with
separa0on pay equivalent to one (1) month salary for every year of service, to be paid by DNL
Gran0ng arguendo that the CBA Side Agreement does not contractually bind pe00oner ETPI to Security. Because DNL Security instructed respondents to con0nue working for pe00oner from
give the subject bonuses, nevertheless, the Court finds that its act of gran0ng the same has February 1993 to April 20, 1993, DNL Security was also made to pay respondents wages for the
become an established company prac0ce such that it has virtually become part of the period.
employees' salary or wage. A bonus may be granted on equitable considera0on when the
giving of such bonus has been the company's long and regular prac0ce. The records show that DNL Security filed a mo0on for reconsidera0on, while pe00oner appealed to the NLRC. NLRC
ETPI, aside from complying with the regular 13th month bonus, has been further giving its treated DNL Securitys mo0on for reconsidera0on as an appeal, but dismissed the same, as it

was not legally perfected. It likewise dismissed pe00oners appeal, having been filed beyond respondents to render service. Thus, pe00oner impliedly approved the extension of
the reglementary period. respondents services.
Undaunted, pe00oner filed a pe00on for cer0orari under Rule 65 of the Rules of Court before Accordingly, pe00oner is bound by the provisions of the Labor Code on indirect employment.
the CA. The CA affirmed the NLRC decision. Pe00oner filed a mo0on for reconsidera0on but Pe00oner cannot be allowed to deny its obliga0on to respondents aeer it had benefited from
the same was denied. Hence, this pe00on. their services. So long as the work, task, job, or project has been performed for pe00oners
benefit or on its behalf, the liability accrues for such services. The principal is made liable to its
Issue: indirect employees because, aeer all, it can protect itself from irresponsible contractors by
WON pe00oner GSIS is jointly and severally liable with DNL Security Agency for payment of withholding payment of such sums that are due the employees and by paying the employees
the unsubstan0ated amounts of Salary Differen0als directly, or by requiring a bond from the contractor or subcontractor for this purpose.
Held: Pe00oner's liability, however, cannot extend to the payment of separa0on pay. An order to pay
The fact that there is no actual and direct employer-employee rela0onship between pe00oner separa0on pay is invested with a puni0ve character, such that an indirect employer should not
and respondents does not absolve the former from liability for the laber’s monetary claims. be made liable without a finding that it had conspired in the illegal dismissal of the employees.
When pe00oner contracted DNL Security services, pe00oner became an indirect employer of
respondents, pursuant to Ar0cle 107 of the Labor Code It should be understood, though, that the solidary liability of pe00oner does not preclude the
applica0on of Ar0cle 1217 of the Civil Code on the right of reimbursement from its co-debtor.
ART. 107. Indirect employer. The provisions of the immediately preceding Ar0cle shall likewise
apply to any person, partnership, associa0on or corpora0on which, not being an employer, ALIVIADO et. Al. vs PROCTER & GAMBLE PHILS. INC
contracts with an independent contractor for the performance of any work, task, job or GR. No. 160506
project. 9 March 2010
Tickler: labor only contract; independent contractor
Aeer DNL Security failed to pay respondents the correct wages and other monetary benefits, Facts:
pe00oner, as principal, became jointly and severally liable, as provided in Ar0cles 106 and 109 Pe00oners worked as merchandisers of P&G from various dates and they all individually
of the Labor Code, which state: signed employment contracts with either Promm-Gem or SAPS for periods of more or less five
ART. 106. Contractor or subcontractor. Whenever an employer enters into a contract with months at a 0me. They were assigned at different outlets, supermarkets and stores where they
another person for the performance of the formers work, the employees of the contractor and handled all the products of P&G.They received their wages from Promm-Gem or SAPS. SAPS
of the laber's subcontractor, if any, shall be paid in accordance with the provisions of this and Promm-Gem imposed disciplinary measures on erring merchandisers for reasons such as
Code. habitual absenteeism, dishonesty or changing day-off without prior no0ce.
In the event that the contractor or subcontractor fails to pay the wages of his employees in
accordance with this Code, the employer shall be jointly and severally liable with his Pe00oners filed a complaint against P&G for regularisa0on, service incen0ve leave pay and
contractor or subcontractor to such employees to the extent of the work performed under the other benefits with damages.The complaint was later amended to include the maber of their
contract, in the same manner and extent that he is liable to employees directly employed by subsequent dismissal.
him.
ART. 109. Solidary liability. The provisions of exis0ng laws to the contrary notwithstanding, The Labor Arbiter dismissed the complaint for lack of merit and ruled that there was no
every employer or indirect employer shall be held responsible with his contractor or employer-employee rela0onship between pe00oners and P&G.He found that the selec0on
subcontractor for any viola0on of any provision of this Code. For purposes of determining the and engagement of the pe00oners, the payment of their wages, the power of dismissal and
extent of their civil liability under this Chapter, they shall be considered as direct employers. control with respect to the means and methods by which their work was accomplished, were
Pe00oners liability covers the payment of respondent's salary differen0al and 13th month pay all done and exercised by Promm-Gem/SAPS. He further found that Promm-Gem and SAPS
during the 0me they worked for pe00oner. In addi0on, pe00oner is solidarily liable with DNL were legi0mate independent job contractors. The NLRC and the CA both affirmed the ruling of
Security for respondents unpaid wages from February 1993 un0l April 20, 1993. While it is true the Labor Arbiter.
that respondents con0nued working for pe00oner aeer the expira0on of their contract, based
on the instruc0on of DNL Security, pe00oner did not object to such assignment and allowed

Issue: strike down the employment prac0ce or agreement concerned as contrary to public policy,
WON there exist an employer-employee rela0onship morals, good customs or public order.
Held: Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We

In order to resolve the issue of whether P&G is the employer of pe00oners, it is necessary to find that it is a legi0mate independent contractor.
first determine whether Promm-Gem and SAPS are labor-only contractors or legi0mate job
contractors. On the other hand, the Ar0cles of Incorpora0on of SAPS shows that it has a paid-in capital of
only P31,250.00.There is no other evidence presented to show how much its working capital
Clearly, the law and its implemen0ng rules allow contrac0ng arrangements for the and assets are.Furthermore, there is no showing of substan0al investment in tools, equipment
performance of specific jobs, works or services.Indeed, it is management preroga0ve to farm or other assets.
out any of its ac0vi0es, regardless of whether such ac0vity is peripheral or core in
nature.However, in order for such outsourcing to be valid, it must be made to an independent Applying the same ra0onale to the present case, it is clear that SAPS - having a paid-in capital
contractor because the current labor rules expressly prohibit labor-only contrac0ng. of only P31,250 - has no substan0al capital. SAPS' lack of substan0al capital is underlined by
the records which show that its payroll for its merchandisers alone for one month would
To emphasise, there is labor-only contrac0ng when the contractor or sub-contractor merely already total P44,561.00.It had 6-month contracts withP&G. Yet SAPS failed to show that it
recruits, supplies or places workers to perform a job, work or service for a principal and any of could complete the 6-month contracts using its own capital and investment.Its capital is not
the following elements are present: even sufficient for one month's payroll. SAPS failed to show that its paid-in capital of
P31,250.00 is sufficient for the period required for it to generate its needed revenue to sustain
[1] The contractor or subcontractor does not have substan0al capital or investment which its opera0ons independently. Substan0al capital refers to capitalisa0on used in the
relates to the job, work or service to be performed and the employees recruited, supplied or performance or comple0on of the job, work or service contracted out.In the present case,
placed by such contractor or subcontractor are performing ac0vi0es which are directly related SAPS has failed to show substan0al capital.
to the main business of the principal; or
[2] The contractor does not exercise the right to control over the performance of the work of Furthermore, the pe00oners have been charged with the merchandising and promo0on of the
the contractual employee. products of P&G, an ac0vity that has already been considered by the Court as doubtlessly
directly related to the manufacturing business, which is the principal business of P&G.
In the instant case, the financial statements of Promm-Gem show that it has authorised capital Considering that SAPS has no substan0al capital or investment and the workers it recruited are
stock of P1 million and a paid-in capital, or capital available for opera0ons, of P500,000.00 as performing ac0vi0es which are directly related to the principal business of P&G, we find that
of 1990. It also has long term assets worth P432,895.28 and current assets of P719,042.32. the former is engaged in "labor-only contrac0ng".
Promm-Gem has also proven that it maintained its own warehouse and office space with a
floor area of 870 square meters. It also had under its name three registered vehicles which "Where `labor-only' contrac0ng exists, the Labor Code itself establishes an employer-
were used for its promo0onal/merchandising business. Promm-Gem also has other clients employee rela0onship between the employer and the employees of the `labor-only'
aside from P&G. Under the circumstances, we find that Promm-Gem has substan0al contractor." The statute establishes this rela0onship for a comprehensive purpose: to prevent
investment which relates to the work to be performed.These factors negate the existence of a circumven0on of labor laws. The contractor is considered merely an agent of the principal
the element specified in Sec0on 5(i) of DOLE Department Order No. 18-02. employer and the laber is responsible to the employees of the labor-only contractor as if such
employees had been directly employed by the principal employer.
The records also show that Promm-Gem supplied its complainant-workers with the relevant
materials, such as markers, tapes, liners and cubers, necessary for them to perform their Consequently, the pe00oners that have been recruited and supplied by SAPS -- which engaged
work.Promm-Gem also issued uniforms to them. It is also relevant to men0on that Promm- in labor-only contrac0ng -- are considered as the employees of P&G.
Gem already considered the complainants working under it as its regular, not merely
contractual or project, employees. This circumstance negates the existence of element (ii) as On the other hand, the pe00oners, who, having worked under, and been dismissed by Promm-
stated in Sec0on 5 of DOLE Department Order No. 18-02, which speaks of contractual Gem, are considered the employees of Promm-Gem, not of P&G.
employees. This, furthermore, negates - on the part of Promm-Gem - bad faith and intent to
circumvent labor laws which factors have oeen been 0pping points that lead the Court to

HOEGH FLEET SERVICES PHILS., INC vs TURALLO equivalent to 10 percent of the amount of wages recovered. It also provides that it shall be
GR. No. 230481 unlawful for any person to demand or accept, in any judicial or administra0ve proceedings for
26 July 2017 the recovery of wages, aborney's fees which exceed 10 percent of the amount of wages
Tickler: permanent and total disability recovered. Sec0on 8, Rule VIII, Book III of the Implemen0ng Rules of the Labor Code sustains
Facts: the same and states that aborney's fees shall not exceed 10 percent of the amount awarded. A
On 9 November 2012, pe00oners hired Turallo as a Messman on board vessel "Hoegh Tokyo" closer reading of these provisions, however, would lead us to the conclusion that the 10
for nine (9) months. The employment contract was signed on 27 December 2012. Turallo was percent only serves as the maximum of the award that may be granted. Relevantly, We have
found "fit for sea duty" in the Pre-Employment Medical Examina0on (PEME). On 2 January ruled in the case of Taganas v. Na5onal Labor Rela5ons Commission that Ar5cle 111 does not
2013, Turallo boarded the vessel. even prevent the NLRC from fixing an amount lower than the ten percent ceiling prescribed by
the ar5cle when the circumstances warrant it. With that, the Court is not 0ed to award 10
Some0me in September 2013 while on board the vessel, Turallo felt pain on the upper back of percent aborney's fees to the winning party, as what Turallo wishes to imply.
his body and chest pain, which was reported to his superiors on 23 September 2013. Upon
arrival in Manila, Turallo was referred to the company-designated physician, who in turn In PCL Shipping Philippines, Inc. v. Na5onal Labor Rela5ons Commissionthe Court discussed
referred him to an orthopedic surgeon and cardiologist. He underwent medical and laboratory that there are two commonly accepted concepts of aborney's fees, the so-called ordinary and
tests. extraordinary. In its ordinary concept, an aborney's fee is the reasonable compensa0on paid to
a lawyer by his client for the legal services he has rendered to the laber. The basis of this
Despite Turallo' s con0nuous rehabilita0on treatment, pain in his lee shoulder persisted, compensa0on is the fact of his employment by and his agreement with the client. In its
hence, he followed up his pending surgery therefor several 0mes to no avail. This prompted extraordinary concept, aborney's fees are deemed indemnity for damages ordered by the
Turallo to seek a second opinion. On 13 May 2014, Turallo consulted with Dr. Manuel Fidel court to be paid by the losing party in a li0ga0on. The instances where these may be awarded
Mag0ra, a government physician of the Vizcarra Diagnos0c Center who, aeer x-ray of his lee are those enumerated in Ar0cle 2208 of the Civil Code, specifically par. 7 thereof which
wrist and shoulder joints, found him to be "par0ally and permanently disabled with separate pertains to ac0ons for recovery of wages, and is payable not to the lawyer but to the client,
impediments for the different affected parts of (his) body of Grade 8, Grade 10 and Grade 11, unless they have agreed that the award shall pertain to the lawyer as addi0onal compensa0on
based on the POEA contract" but declared him as "permanently unfit in any capacity for or as part thereof. The extraordinary concept of aborney's fees is the one contemplated in
further sea du0es". Ar0cle 111 of the Labor Code. This is awarded by the court to the successful party to be paid
by the losing party as indemnity for damages sustained by the former in prosecu0ng, through
On 23 May and 2 June 2014, grievance proceedings were held between the par0es at the counsel, his cause in court.
AMOSUP, where the pe00oners offered the amount of Thirty Thousand Two Hundred Thirty
One US Dollars (US$30,231. 00) corresponding to .a Grade 8 disability compensa0on based on Clearly, Turallo incurred legal expenses aeer he was forced to file an ac0on to recover his
the maximum amount of Ninety Thousand US Dollars (US$90,000.00). Turallo, however disability benefits. Considering that he was constrained to li0gate with counsel in all the stages
proposed the seblement .amount of Sixty Thousand US Dollars (US$60,000.00). The par0es of this proceeding, and keeping in mind the liberal and compassionate spirit of the Labor Code,
failed to reach an agreement. Despite efforts to arrive at an agreement, the par0es failed to where the employees' welfare is the paramount considera0on, this Court considers five
seble their differences, hence, they were directed to submit their pleadings and evidence for percent (5%) of the total monetary award as more appropriate and commensurate under the
the resolu0on of the issues before the panel of arbitrators. circumstances of this pe00on.
Issue: ALVA vs HIGH CAPACITY SECURITY FORCE INC

WON Turallo is en0tled to aborney’s fee GR. No. 205528
8 November 2017
Held: Tickler: ACorney’s fees; PAO
Yes, Turallo is en0tled to aborney’s fee. Facts:
On November 1, 2003, Alva was hired as a security guard by respondent High Capacity Security
The Court agrees with the CA that aborney's fees should be reduced, not to US$1,000.00, Force, Inc., (High Capacity), a duly organized security agency. Alva was ini0ally detailed as a
however, but to five percent (5%) of the total monetary award.1âwphi1 Ar0cle 111 of the security guard at the Basa Land Power Plant in Rosario, Cavite, earning a daily wage of Three
Labor Code indeed provides that the culpable party may be assessed aborney's fees Hundred Thirty Pesos (Php 330.00).

On April 16, 2004, Alva was promoted as Assistant Security Officer. Aeer some0me, he was damages. As a general rule, it is payable to the client, not to his counsel, unless the former
again promoted as Security Officer, with a daily salary of Four Hundred Thirty Pesos (Php agreed to give the amount to the laber as an addi0on to, or part of the counsel's
430.00). compensa0on.
Meanwhile, on June 5, 2007, Alva was assigned as an Assistant Officer-in-Charge of HRD-PTE, Notably, Ar0cle 111 of the Labor Code sanc0ons the award of aborney's fees in cases of the
Ltd. Inc. (HRD PTE). While assigned thereat, one of the security guards under his supervision unlawful withholding of wages, wherein the culpable party may be assessed aborney's fees
allowed the entry of a garbage collec0on truck without securing the prior permission and equivalent to ten percent (10%) of the amount of wages recovered. The amount of aborney's
approval of the company's Administra0ve and Personnel Manager. Bearing the crudgels of fees shall not exceed ten percent (10%) of the total monetary award, and the fees may be
such mishap, Alva was suspended for one month beginning October 21, 2007. deducted from the amount due the winning party.
During Alva's suspension, HRD-PTE requested for Alva's relief from post. HRD-PTE complained In addi0on, Ar0cle 2208 of the Civil Code allows the award of aborney's fees in the following
that Alva was found sleeping while on duty and exercised favori0sm in the assignment of shies instances, to wit:
of security guards. ART. 2208. In the absence of s0pula0on, aborney's fees and expenses of li0ga0on, other than
judicial costs, cannot be recovered, except:
Thereaeer, Alva was placed on floa0ng status. On November 23, 2007, while Alva was s0ll on When exemplary damages are awarded; 
floa0ng status, High Capacity informed him of the lack of available posts where he could be (2) When the defendant's act or omission has compelled the plain0ff to li0gate with
assigned as Security Officer or Assistant Security Officer. Instead, Alva was given an op0on to third persons or to incur expenses to protect his interest; 
temporarily render duty as an ordinary guard while wai0ng for an available officer's post. (3) In criminal cases of malicious prosecu0on against the plain0ff; 
However, Alva was no longer given any post. Alva begged for an assignment, but his pleas were (4) In case of a clearly unfounded civil ac0on or proceeding against the plain0ff; 
all unheeded. (5) Where the defendant acted in gross and evident bad faith in refusing to sa0sfy
the plain0ffs plainly valid, just and demandable claim; 
This prompted Alva to file a Complaint for Illegal Dismissal, Underpayment of Wages, Non- (6) In ac0ons for legal support; 
Payment of 13th Month Pay, Service Incen0ve Leave, Holiday Premium, ECOLA, Payment for (7) In ac0ons for the recovery of wages of household helpers, laborers and skilled
Rest Day, Night Shie Differen0al Pay, Separa0on Pay, moral and exemplary damages and workers; 
aborney's fees against High Capacity and its General Manager, Armando Villanueva. Alva was (8) In ac0ons for indemnity under workmen's compensa0on and employer's liability
assisted by the PAO in the proceedings before the Labor Arbiter (LA). laws; 
(9) In a separate civil ac0on to recover civil liability arising from a crime; 
Issue: (10) When at least double judicial costs are awarded; 
WON Alva is en0tled to an Aborney’s fee (11) In any other case where the court deems it just and equitable that aborney's
fees and expenses of li0ga0on should be recovered.
Held:
Yes, the award of aborney’s fees is sanc0oned in the case at bar where there was an unlawful In all cases, the aborney's fees and expenses of li0ga0on must be reasonable.
and unjus0fied withholding of wages, and as a result thereof, the employee was compelled to In the case at bar, the CA deleted the award of aborney's fees on the simple pretext that Alva
li0gate to protect and defend his interests. was represented by the PAO.
Essen0ally, there are two commonly accepted concepts of aborney's fees - the ordinary and The CA was mistaken.
extraordinary. On the one hand, in its ordinary concept, an aborney's fee is the reasonable
compensa0on paid by the client to his lawyer in exchange for the legal services rendered by Needless to say, in addi0on to the fact that aborney's fees partake of an indemnity for
the laber. The compensa0on is paid for the cost and/or results of the legal services, as agreed damages awarded to the employee, there is nothing that prevents Alva and the PAO from
upon by the par0es or as may be assessed by the courts. On the other hand, as an entering into an agreement assigning aborney's fees in favor of the laber. It must be noted
extraordinary concept, an aborney's fee is deemed an indemnity for damages ordered by the that in 2007, Congress passed R.A. No. 9406 inser0ng new sec0ons in Chapter 5, Title III, Book
court to be paid by the losing party to the winning party. In labor cases, aborney's fees partake IV of Execu0ve Order No. 292 (E.O. 292), or the Adminstra0ve Code of 1987. R.A. No. 9406
of the nature of an extraordinary award granted to the victorious party as an indemnity for
sanc0ons the receipt by the PAO of aborney's fees, and provides that such fees shall cons0tute day business affairs of SHS. Manuel F. Diaz (respondent) was hired by pe00oner SHS as
a trust fund to be used for the special allowances of their officials and lawyers, viz.: Manager for Business Development on proba0onary status.
SEC. 6. New sec0ons are hereby inserted in Chapter 5, Title III, Book IV of Execu0ve Order No.
292, to read as follows: On November 29, 2005, Hartmannshenn instructed Taguiang not to release respondent’s
x x x x salary. Later that aeernoon, respondent called and inquired about his salary. Taguiang
SEC. 16-D. Exemp5on from Fees and Costs of the Suit. - The clients of the PAO shall [sic] exempt informed him that it was being withheld and that he had to immediately communicate with
from payment of docket and other fees incidental to ins0tu0ng an ac0on in court and other Hartmannshenn. Respondent denied having received such direc0ve.
quasi-judicial bodies, as an original proceeding or on appeal.
The costs of the suit, aborney's fees and con0ngent fees imposed upon the adversary of the The next day, on November 30, 2005, respondent served on SHS a demand leber and a
PAO clients aeer a successful li0ga0on shall be deposited in the Na0onal Treasury as trust fund resigna0on leber. In the evening of the same day, November 30, 2005, respondent met with
and shall be disbursed for special allowances of authorized officials and lawyers of the PAO. Hartmannshenn in Alabang. The laber told him that he was extremely disappointed for the
following reasons: his poor work performance; his unauthorized leave and malingering from
In fact, the maber of en0tlement to aborney's fees by a claimant who was represented by the November 16 to November 30, 2005; and failure to immediately meet Hartmannshenn upon
PAO has already been sebled in Our Haus Realty Development Corpora5on v. Alexander Parian, his arrival from Germany.
et al. The Court, speaking through Associate Jus0ce Arturo D. Brion ruled that the employees
are en0tled to aborney's fees, notwithstanding their availment of the free legal services Issue:
offered by the PAO. The Court ruled that the amount of aborney's fees shall be awarded to the WON the temporary withholding of respondent’s salary/wages by pe00oners was a valid
PAO as a token recompense to them for their provision of free legal services to li0gants who exercise of management preroga0ve
have no means of hiring a private lawyer, to wit:
It is sebled that in ac0ons for recovery of wages or where an employee was forced to li0gate Held:
and, thus, incur expenses to protect his rights and interest, the award of aborney's fees is No, because it was made without the consent of the employee.
legally and morally jus0fiable. Moreover, under the PAO Law or Republic Act No. 9406, the
costs of the suit, aborney's fees and con0ngent fees imposed upon the adversary of the PAO Although management preroga0ve refers to “the right to regulate all aspects of employment,”
clients aeer a successful li0ga0on shall be deposited in the Na0onal Treasury as trust fund and it cannot be understood to include the right to temporarily withhold salary/wages without the
shall be disbursed for special allowances of authorized officials and lawyers of the PAO. consent of the employee. To sanc0on such an interpreta0on would be contrary to Ar0cle 116
of the Labor Code, which provides:
Thus, the respondents are s0ll en0tled to aborney's fees. The aborney's fees awarded to them
shall be paid to the PAO. It serves as a token recompense to the PAO for its provision of free ART. 116. Withholding of wages and kickbacks prohibited. – It shall be unlawful for any
legal services to li0gants who have no means of hiring a private lawyer person, directly or indirectly, to withhold any amount from the wages of a worker or induce
him to give up any part of his wages by force, stealth, in0mida0on, threat or by any other
Thus, Alva's availment of free legal services from the PAO does not disqualify him from an means whatsoever without the worker’s consent.
award of aborney's fees. Simply put, Alva should be awarded aborney's fees notwithstanding
the fact that he was represented by the PAO. Any withholding of an employee’s wages by an employer may only be allowed in the form of
wage deduc0ons under the circumstances provided in Ar0cle 113 of the Labor Code, as set
SHS PERFORATED MATERIALS INC vs DIAZ forth below:
GR. No. 185814
13 October 2010 ART. 113. Wage Deduc5on. – No employer, in his own behalf or in behalf of any person, shall
Tickler: withholding wages make any deduc0on from the wages of his employees, except:
Facts: (a) In cases where the worker is insured with his consent by the employer, and the deduc0on
Pe00oner SHS Perforated Materials, Inc. (SHS) is a start-up corpora0on organized and exis0ng is to recompense the employer for the amount paid by him as premium on the insurance;
under the laws of the Republic of the Philippines and registered with the Philippine Economic (b) For union dues, in cases where the right of the worker or his union to check-off has been
Zone Authority. Pe00oner Winfried Hartmannshenn (Hartmannshenn), a German na0onal, is recognized by the employer or authorized in wri0ng by the individual worker concerned; and
its president, in which capacity he determines the administra0on and direc0on of the day-to-

(c) In cases where the employer is authorized by law or regula0ons issued by the Secretary of provisions of this Act are domes0c helpers and persons employed in the personal service of
Labor. another.
Absent a showing that the withholding of complainant’s wages falls under the excep0ons
provided in Ar0cle 113, the withholding thereof is thus unlawful. December 18, 1987, pe00oner and respondent PIMASUFA entered into a new CBA (1987 CBA)
whereby the supervisors were granted an increase of P625.00 per month and the foremen,
Pe00oners argue that Ar0cle 116 of the Labor Code only applies if it is established that an P475.00 per month. The increases were made retroac0ve to May 12, 1987, or prior to the
employee is en0tled to his salary/wages and, hence, does not apply in cases where there is an passage of R.A. No. 6640, and every year thereaeer un0l July 26, 1989.
issue or uncertainty as to whether an employee has worked and is en0tled to his salary/wages,
in consonance with the principle of “a fair day’s wage for a fair day’s work.” Pe00oners January 26, 1989, respondents PIMASUFA and NLU filed a complaint with NLRC charging
contend that in this case there was precisely an issue as to whether respondent was en0tled to pe00oner with viola0on of R.A. No. 6640. Respondents abached to their complaint a
his salary because he failed to report to work and to account for his whereabouts and work numerical illustra0on of wage distor0on resul0ng from the implementa0on of R.A. No. 6640.
accomplishments during the period in ques0on. LA favored respondents ordering Pe00oner to give members of respondent PIMASUFA wage
increases equivalent to 13.5% of their basic pay they were receiving prior to December 14,
The Court finds pe00oners’ evidence insufficient to prove that respondent did not work from 1987. On appeal by pe00oner, the NLRC affirmed LA’s judgment. Pe00oner filed a pe00on for
November 16 to November 30, 2005. As can be gleaned from respondent’s Contract of cer0orari with SCourt. However, SC referred the pe00on to CA. CA affirmed the Decision of the
Proba0onary Employment and the exchanges of electronic mail messages between NLRC with modifica0on by raising the 13.5% wage increase to 18.5%. M.R. was denied.
Hartmannshenn and respondent, the laber’s du0es as manager for business development Pe00oner went to SC but it favored respondents.
entailed cul0va0ng business 0es, connec0ons, and clients in order to make sales. Such du0es
called for mee0ngs with prospec0ve clients outside the office rather than repor0ng for work Issue:
on a regular schedule. In other words, the nature of respondent’s job did not allow close 1. WON the implementa0on of RA No. 6640 resulted in a wage distor0on
supervision and monitoring by pe00oners. Neither was there any prescribed daily monitoring 2. WON such distor0on was cured or remedied by the 1987 CBA
procedure established by pe00oners to ensure that respondent was doing his job. Therefore,
gran0ng that respondent failed to answer Hartmannshenn’s mobile calls and to reply to two Held:
electronic mail messages and given the fact that he admibedly failed to report to work at the 1. Yes. R.A. No. 6727, otherwise known as the Wage Ra0onaliza0on Act, explicitly
SHS plant twice each week during the subject period, such cannot be taken to signify that he defines“wage distorSon”as: “a situa0on where an increase in prescribed wage rates
did not work from November 16 to November 30, 2005. results in the elimina0on or severe contrac0on of inten0onal quan0ta0ve differences in
wage or salary rates between and among employee groups in an establishment as to
P.I. MANUFACTURING INCORPORATED vs P.I. MANUFACTURING SUPERVISORS AND effec0vely obliterate the dis0nc0ons embodied in such wage structure based on skills,
FOREMEN ASSOCIATION length of service, or other logical bases of differen0a0on.” 
GR. No. 167217  
4 February 2008 Otherwise stated, wage distor0on means the disappearance or virtual
Tickler: wage distor=on disappearance of pay differen0als between lower and higher posi0ons in an enterprise
Facts: because of compliance with a wage order. The increase in the wage rates by virtue of
Pe00oner P.I. Manufacturing, Incorporated is a domes0c corpora0on engaged in the R.A. No. 6640 resulted in wage distor0on or the elimina0on of the intenSonal
manufacture and sale of household appliances. Respondent P.I. Manufacturing Supervisors quanStaSve differences in the wage rates of the supervisor employees of pe00oner.
and Foremen Associa0on (PIMASUFA) is an organiza0on of pe00oner’s supervisors and 2. Yes. Wage distor0ons were cured or remedied when respondent PIMASUFA entered
foremen, joined in this case by its federa0on, the Na0onal Labor Union (NLU). into the 1987 CBA with pe00oner aeer the effec0vity of R.A. No. 6640. The 1987 CBA
increased the monthly salaries of the supervisors by P625.00 and the foremen,
December 10, 1987, R.A. No. 6640 was passed providing an increase in the statutory minimum by P475.00, effecSve May 12, 1987. These increases re-established and broadened the
wage and salary rates of employees and workers in the private sector, to which it is increased gap, not only between the supervisors and the foremen, but also between them and
by P10.00 per day, except non-agricultural workers and employees outside Metro Manila who the rank-and-file employees. Significantly, the 1987 CBA wage increases almost
shall receive an increase of P11.00 per day: Provided, That those already receiving above the doubled that of the P10.00 increase under R.A. No. 6640. 
minimum wage up to P100.00 shall receive an increase of P10.00 per day. Excepted from the  

The P625.00/month means P24.03 increase per day for the supervisors, while
the P475.00/month means P18.26 increase per day for the foremen. Such gap as re-
established by virtue of the CBA is more than a substan0al compliance with R.A. No.
6640. CA erred in not taking into account the provisions of the CBA. The provisions of
the CBA should be read in harmony with the wage orders, whose benefits should be
given only to those employees covered thereby. 
 
To require pe00oner to pay all the members of respondent PIMASUFA a wage increase
of 18.5%, over and above the nego0ated wage increases provided under the 1987
CBA, is highly unfair and oppressive to the former. It was not the inten0on of R.A. No.
6640 to grant an across-the-board increase in pay to all the employees of pe00oner.
Only those receiving wages P100.00 and below are en0tled to the P10.00 wage
increase. The apparent inten0on of the law is only to upgrade the salaries or wages of
the employees specified therein. Almost all of the members of respondent PIMASUFA
have been receiving wage rates above P100.00 and, therefore, not en0tled to the
P10.00 increase. Only 3 of them are receiving wage rates below P100.00, thus, en0tled
to such increase. 
 
To compel employers simply to add on legisla0ve increases in salaries or allowances
without regard to what is already being paid, would be to penalize employers who
grant their workers more than the statutory prescribed minimum rates of increases.
Clearly, this would be counter-produc0ve so far as securing the interests of labor is
concerned. 
 
I t m u st b e st re s s e d t h at a C BA co n s0 t u te s t h e l aw b et we e n t h e
par0es when freely and voluntarily entered into. Iit has not been shown that
respondent PIMASUFA was coerced or forced by pe00oner to sign the 1987 CBA. All of
its 13 officers signed the CBA with the assistance of respondent NLU. They signed it
fully aware of the passage of R.A. No. 6640. The duty to bargain requires that the
par0es deal with each other with open and fair minds. Respondents cannot invoke the
beneficial provisions of the 1987 CBA but disregard the concessions it voluntary
extended to pe00oner. The goal of collec0ve bargaining is the making of agreements
that will stabilize business condi0ons and fix fair standards of working condi0ons.
Respondents’ posture contravenes this goal.

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LABOR | ATTY.

GOLANGCO CASE DIGEST

1. Autobus Transport v. Bau0sta

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Held: Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Issue: ALVA vs HIGH CAPACITY SECURITY FORCE INC

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

Be stronger than your excuses. CHLOE FRANCISCO | SBU-COL 2020-2021

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