Labor Review 222
Labor Review 222
Labor Review 222
CITY OF MUNTINLUPA
RA 7926 was enacted and approved. It converted the Municipality of Muntinlupa into a
highly urbanized city. Barlis sent a letter to Meralco demanding payment of the franchise
tax. Respondent Nelia A. Barlis was the City Treasurer of Muntinlupa at the time Meralco
was assessed to pay a franchise tax.
RULING:
MO 93-35 was passed by the Sangguniang Bayan of the Municipality of Muntinlupa and
took effect. This is plainly ultra vires considering the clear and categorical provisions of
Section 142 in relation to Sections 134, 137 and 151 of RA 7160 vesting to the provinces
and cities the power to impose, levy, and collect a franchise tax. Muntinlupa being then a
municipality definitely had no power or authority to enact the subject franchise tax
ordinance.
A void ordinance, or provision thereof, is what it is - a nullity that produces no legal effect.
It cannot be enforced; and no right could spring forth from it. The cityhood of Pasig
notwithstanding, it has no right to collect franchise tax under the assailed ordinance.
In the same vein, Muntinlupa City cannot hinge its imposition and collection of a franchise
tax on the null and void provision of Section 25 of MO 93-35. Moreover, Charter of
Muntinlupa City cannot breathe life into the invalid Section 25 of MO 93-35. Transitory
provisions of the Charter of Muntinlupa City contemplates only those ordinances that are
valid and legally existing at the time of its enactment. Consequently, Section 56 did not
cure the infirmity of Section 25 of MO 93-35 since an ultra vires ordinance is null and void
and produces no legal effect from its inception.
As correctly ruled by the RTC and the CA, MO 93-35, particularly Section 25 thereof, has
failed to meet the requirements of a valid ordinance. Applying the Formal Test, the
passage of the subject ordinance was beyond the corporate powers of the then
Municipality of Muntinlupa, hence, ultra vires. In this case, Section 25 of MO 93-35 was
evidently passed beyond the powers of a municipality in clear contravention of RA 7160.
SITE FOR EYES V. DAMING
Daming an optometrist has filed a complaint for illegal dismissal with money claims
against her employer after she was not given a salary increase despite repeated
demands. She also filed a request for assistance before the Department of Labor and
Employment under the Single Entry Approach (SEnA). A show cause notice was served
threatening to file a lawsuit should the latter fail to account for allegedly missing items
after petitioner conducted an audit of its optical shops whereby missing items were
discovered.
Petitioner alleged that respondent was a fixed-term employee, having signed a fixed-term
contract Being so, petitioner argued that respondent was not dismissed from employment;
rather, her contract merely expired and denied having granted respondent a salary
increase.
RULING:
The employment status of a person is prescribed by law and not by what the parties say
it should be. But while petitioner insists that respondent was engaged under a fixed-term
employment agreement, the circumstances and evidence on record, and the provision of
law, dictate that respondent was its regular employee.
Article 280 of the Labor Code classifies employees into regular, project, seasonal, and
casual,
Art. 280. Regular and casual employment. - The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season.
Interestingly, the Labor Code does not mention another employment arrangement – the
contractual or fixed-term employment which, if not for the fixed-term, should fall under the
category of regular employment in view of the nature of the employee's engagement,
which is to perform an activity usually necessary or desirable in the employer's business.
Here, the labor tribunals and the appellate court identified the existence of an employer-
employee relationship between petitioner and respondent and unanimously recognized
respondent's regular status of employment.
• First, respondent performed activities that are necessary and desirable in the
optical business of petitioner. Without optometrists on site, petitioner could hardly
dispense optical lenses, solutions, and equipment to the buying public. As an
optical store located at various malls, its enterprise largely depends on the general
diagnostic interpretation and prescription of optometrists to sell contact lenses,
eyeglasses, solutions, and other visual aids.
• Second, the renewal of respondent's contract is indicative of the necessity of her
functions to petitioner's business as it signifies the continuing need for her
services.
• Third, petitioner exercises control over the means and method pursued by
respondent in the performance of her work. It was petitioner who provided the
equipment used in the conduct of patient's diagnostic tests and the manner by
which respondent carried her work. Respondent was also required to render
overtime work even during her rest days.
While respondent is a medical professional, a evidence exists that would show that she
dealt with petitioner on an arm's length basis, whereby neither of them had an undue
ascendancy and influence over the other.
The contracts, which respondent agreed to sign, failed to specify the terms and conditions
of employment that would indicate that she stood with petitioner on an equal footing in
negotiating it. Notably though, the contracts were unilaterally prepared by petitioner and
merely contained provisions which can only be seen in an employment contract for
optometrists as regular employees.
On this score, it appears that the contracts signed by respondent were devised by
petitioner to preclude respondent from acquiring tenurial security. This Court will not
hesitate to strike down or disregard this arrangement as contrary to law, public policy,
and morals. In such a case, the general restrictive rule under Article 280 of the Labor
Code will apply and the employee shall be deemed regular. Being a regular employee of
petitioner, respondent is entitled to security of tenure. As such, she cannot be dismissed
from employment except for just or authorized causes.
A. NATE CASKET MAKER VS. ELIAS V. ARANGO
Petitioners Armando and Anely Nate are the owners of A. Nate Casket Maker. They
employed respondents on various dates as carpenters, mascilladors and painters in their
casket-making business. They met with respondents in order to present a proposed
employment agreement which would change the existing pakyaw system to "contractual
basis" and would provide for vacation leave and sick leave pay and other benefits given
to regular employees.
Petitioners alleged that respondents are pakyaw workers who are paid per job order.
Respondents are "stay-in" workers with free board and lodging, but they would "always"
drink, quarrel with each other on petty things such that they could not accomplish the job
orders on time. Petitioners alleged that the proposed employment agreement would be
more beneficial to respondents. Hence, petitioners would then be compelled to "contract
out" to other workers for the job to be finished.
On the other hand, respondents alleged in their Position Paper, that they worked from
Monday to Saturday, from 7:00a.m. to 10:00 p.m., with no overtime pay and any monetary
benefits despite having claimed for such. Respondents filed a Complaint for illegal
dismissal and non-payment of separation pay against petitioners.
RULING:
This provision classifies employees into regular, project, seasonal, and casual. It further
classifies regular employees into two kinds: (I) those "engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the employer"; and
(2) casual employees who have "rendered at least one year of service, whether such
service is continuous or broken.
It should be remembered that the control test merely calls for the existence of the right to
control, and not necessarily the exercise thereof. It is not essential that the employer
actually supervises the performance of duties by the employee. It is enough that the
former has a right to wield the power. Hence, pakyaw workers are considered regular
employees for as long as their employers exercise control over them. Thus, while
respondents' mode of compensation was on a per-piece basis, the status and nature of
their employment was that of regular employees.
With respect to the payment of 13th month pay, however we find that respondents are not
entitled to such benefit. In short, in determining whether workers engaged on "pakyaw"
or task basis" is entitled to holiday and SIL pay, the presence (or absence) of employer
supervision as regards the worker's time and performance is the key: if the worker is
simply engaged on "pakyaw" or task basis, then the general rule is that he is entitled to a
holiday pay and SIL pay unless exempted from the exceptions.
for fifteen (15) years thereafter, LSGI contracted the services of medical professionals,
specifically pediatricians, dentists and a physician, to comprise its Health Service Team
(HST).
Petitioners, along with other members of the HST signed uniform one-page Contracts of
Retainer for the period of a specific academic calendar beginning in June of a certain year
(1989 and the succeeding 15 years) and terminating in March of the following year when
the school year ends
In all, the NLRC ruled that the Contracts of Retainer between complainants and LSGI are
valid fixed-term employment contracts where complainants as medical professionals
understood the terms thereof when they agreed to such continuously for more than ten
(10) years.
LRC disagreed with the Labor Arbiter's ruling that complainants were independent
contractors based on the latter's opinion that the services rendered by complainants are
not considered necessary to LSGI's operation as an educational institution.
Consequently, the valid termination of their retainership contracts at the end of the period
stated therein, did not entitle complainants to reinstatement, nor, to payment of separation
pay. Nonetheless, the NLRC found that complainants were fixed-period employees
whose terms of employment were subject to agreement for a specific duration. The NLRC
noted that Presidential Decree No. 856, otherwise known as the Sanitation Code of the
Philippines, requires that private educational institutions comply with the sanitary laws.
ISSUE: Whether or not the court of appeals erred in ruling that petitioners were fixed-
period employees and not regular employees of LSGI?’
RULING:
Fixed-term employment is allowable under the Labor Code only if the term was voluntarily
and knowingly entered into by the parties who must have dealt with each other on equal
terms not one exercising moral dominance over the other. Further, a fixed-term contract
is an employment contract, the repeated renewals of which make for a regular
employment.
In the case at bar, the Court of Appeals disregarded the repeated renewals of the
Contracts of Retainer of petitioners spanning a decade and a half. The Court of Appeals
ruled that petitioners never became regular employees:
We completely disagree with the Court of Appeals.
In all, given the following:
(1) repeated renewal of petitioners' contract for fifteen years, interrupted only by the close
of the school year;
(2) the necessity of the work performed by petitioners as school physicians and dentists;
(3) the existence of LSGI's power of control over the means and method pursued by
petitioners in the performance of their job, we rule that petitioners attained regular
employment, entitled to security of tenure who could only be dismissed for just and
authorized causes.
Consequently, petitioners were illegally dismissed and are entitled to the twin remedies
of payment of separation pay and full back wages. We order separation pay in lieu of
reinstatement given the time that has lapsed, twelve years, in the litigation of this case.
SYNTHESIS
TOPIC: CONTRACT
MANILA ELECTRIC
• MUNTINLUPA BEING THEN A MUNICIPALITY DEFINITELY HAD NO POWER
OR AUTHORITY TO ENACT THE SUBJECT FRANCHISE TAX ORDINANCE.
DAMING
• FIXED TERM EMPLOYEE
• EMPLOYMENT STATUS OF A PERSON IS PRESCRIBED BY LAW AND NOT
BY WHAT THE PARTIES SAY IT SHOULD BE.
• LABOR CODE DOES NOT MENTION FIXED-TERM EMPLOYMENT. IF NOT
FOR THE FIXED-TERM, SHOULD FALL UNDER THE CATEGORY OF
REGULAR EMPLOYMENT IN VIEW OF THE NATURE OF THE EMPLOYEE'S
ENGAGEMENT PERFORMED AN ACTIVITY USUALLY NECESSARY IN
EMPLOYER'S BUSINESS.
NATE CASKET
SAMONTE
• FIXED-TERM EMPLOYMENT IS ALLOWABLE UNDER THE LABOR CODE
ONLY IF THE TERM WAS VOLUNTARILY AND KNOWINGLY ENTERED INTO
BY THE PARTIES WHO MUST HAVE DEALT WITH EACH OTHER ON EQUAL
TERMS