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USPF

LABOR RELATIONSFirst Semester S.Y. 2013-14

Based on the syllabus of Atty. Chezie K. DemegilloCompiled by: Clint M. Maratas

I. Employer-Employee Relationship

1. Employer (Art. 211, par. E)

Article 212(e)EMPLOYER includes any person acting in the interest of an employer directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as an employer.

2. Employee (Art. 211, par. F)

Article 212 (f)

EMPLOYEE includes any person in ht employ of an employer. The term shall not be limited to the employees of a particular employee, unless this code so expressly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any other substantially equivalent and regular employment.

Employer may be:

1. natural

2. juridical

Employee only natural persons may qualify as an employee. It could be Filipino citizens and foreigners

Hiring of employees

Foreigners Art. 40-42, PD 442 applies

Filipino- there is none. The Constitution and the Labor Code encourage the employment of Filipinos.

3. Test to Determine the Existence of Employer-Employee Relationship

FOUR-FOLD TEST

1. Right to Hire

2. Payment of Wages

3. Power of Dismissal

4. Control over the conduct of Work

Cases:

Charlie Jao vs.BCCI Products Sales Inc. and Terrance Ty, G.R. No. 163700, April 18, 2012.FACTS: PETITIONER Charlie Jao alleged that respondents BCC Product Sales, Inc. (BCC) and Terrance Ty employed him as a comptroller. On Oct. 19, 1995, the security guards of BCC barred him from entering its premises.Respondent BCC countered that petitioner was not its employee but that of Sobien Food Corp. (SFC), its major creditor and supplier. SFC had posted him as its comptroller in BCC to oversee BCCs finance and business operations and to look after SFCs interests or investments in BCC. Which contention is more meritorious?

Ruling: That of BCC.

The Supreme Courts (SC) perusal of the affidavit of petitioner compels a conclusion similar to that reached by the Court of Appeals (CA) and the Labor Arbiter to the effect that the affidavit supported the contention that petitioner had really worked in BCC as SFCs representative.

It does seem more natural and more believable that petitioners affidavit was referring to his employment by SFC even while he was reporting to BCC as a comptroller in behalf of SFC. As respondents pointed out, it was implausible for SFC to still post him to oversee and supervise the collections of accounts receivables due from BCC beyond December 1995 if, as he insisted, BCC had already illegally dismissed him and had even prevented him from entering the premises of BCC. Given the patent animosity and strained relations between him and respondents in such circumstances, indeed, how could he still efficiently perform in behalf of SFC the essential responsibility to oversee and supervise collections at BCC? Surely, respondents would have vigorously objected to any arrangement with SFC involving him.

We note that petitioner executed the affidavit in March 1996 to refute a statement Ty himself made in his own affidavit dated Dec. 11, 1995 to the effect that petitioner had illegally appropriated some checks without authority from BCC. Petitioner thereby sought to show that he had the authority to receive the checks pursuant to the arrangements between SFC and BCC.

This showing would aid in fending off the criminal charge respondents filed against him arising from his mishandling of the checks. Naturally, the circumstances petitioner adverted to in his March 1996 affidavit concerned those occurring before December 11, 1995, the same period when he actually worked as comptroller in BCC (Charlie Jao vs. BCC Products Sales Inc. and Terrance Ty, G.R. No. 163700, April 18, 2012).Employer-employee relationship. In determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called control test, is the most important element.

It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC. Considering that petitioner contested respondents challenge by pointing to the existing arrangements between BCC and SFC, it should be clear that respondents did not exercise the power of control over petitioner, because he thereby acted for the benefit and in the interest of SFC more than of BCC.

JOSE MEL BERNARTE,vs. PHILIPPINE BASKETBALL ASSO. (PBA), JOSE EMMANUEL M. EALA, and PERRY MARTINEZ,G.R. No. 192084, September 14, 2011Facts: PETITIONER Jose Mel Bernate worked as one of the referees of the Philippine Basketball Association (PBA). He entered into two contracts as a retainer with the PBA in the year 2003. The first contract was for Jan. 1, 2003 to July 15, 2003; and the second was for Sept. 1 to December 2003.

After the lapse of the later period, PBA decided not to renew his contract, citing his unsatisfactory performance on and off the court.

Maintaining he is a regular employee, Bernate filed a complaint for illegal dismissal against PBA. Did his case prosper?

Ruling: No. We agree with respondents that once on the playing court, the referees exercise their own independent judgment, based on the rules of the game, as to when and how a call or decision is to be made. The referees decide whether an infraction was committed, and the PBA cannot overrule them once the decision is made on the playing court.

The referees are the only, absolute, and final authority on the playing court.

Respondents or any of the PBA officers cannot and do not determine which calls to make or not to make and cannot control the referee when he blows the whistle because such authority exclusively belongs to the referees. The very nature of petitioners job of officiating a professional basketball game undoubtedly calls for freedom of control by respondents.

Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report for work only when PBA games are scheduled, which is three times a week spread over an average of only 105 playing days a year, and they officiate games at an average of two hours per game; and (2) the only deductions from the fees received by the referees are withholding taxes.

In other words, unlike regular employees who ordinarily report for work eight hours per day for five days a week, petitioner is required to report for work only when PBA games are scheduled or three times a week at two hours per game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig, which are the usual deductions from employees salaries. These undisputed circumstances buttress the fact that petitioner is an independent contractor, and not an employee of respondents. (Jose Mel Bernarte vs. Philippine Basketball Association (PBA), et. al., G.R. No. 192084, Sept. 14, 2011)

MARTICIO SEMBLANTE and DUBRICK PILAR, vs. COURT OF APPEALS, 19THDIVISION, now SPECIAL FORMER 19THDIVISION, GALLERA DE MANDAUE /SPOUSES VICENTE and MARIA LUISA LOOT,G.R. No.196426, August 15, 2011

FACTS: PETITIONERS Marticio Semblante and Dubrick Pilar were hired by private respondents Vicente and Maria Luisa Loot as official masiador and sentenciador, respectively, of their Gallera de Mandaue, a cockpit.

As the masiador, Semblante would call and take the bets from the gamecock owners and other bettors and order the start of the cockfight. He would also distribute the winnings after deducting the arriba, or the commission for the cockpit. As the sentenciador, Pilar would oversee the proper gaffing of fighting cocks determine the fighting cocks physical condition and capabilities to continue the cockfight, and eventually declare the result of the cockfight.

For their services as masiador and sentenciador, Semblante was paid P2,000 per week or P8,000 per month, while Pilar was paid P3,500 a week or P14,000 a month. They worked every Tuesday, Wednesday, Saturday and Sunday every week, excluding monthly derbies and cockfights held on special holidays.

In a complaint for illegal dismissal, the Labor Arbiter found petitioners to be regular employees of respondents. In their appeal to the National Labor Relations Commission (NLRC), respondents belatedly put up an appeal bond. The NLRC after a Motion for Reconsideration by respondents, entertained the appeal and found that there was no employer-employee relationship between petitioners and respondents. The Court of Appeals (CA) upheld the decision of the NLRC. Can the decision be justified?

Ruling: Yes. While respondents had failed to post their bond within the 10-day period provided above, it is evident, on the other hand, that petitioners are not employees of respondents, since their relationship fails to pass muster the four-fold test of employment We have repeatedly mentioned in countless decisions: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct, which is the most important element.

As found by both the NLRC and the CA, respondents had no part in petitioners selection and management; petitioners compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents. In the conduct of their work, petitioners relied mainly on their expertise that is characteristic of the cockfight gambling, and were never given by respondents any tool needed for the performance of their work.

Respondents, not being petitioners employers, could never have dismissed, legally or illegally, petitioners, since respondents were without power or prerogative to do so in the first place. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of answering for an illegal dismissal for which they were never responsible. (Marticio Semblante and Dubrick Pilar vs. CA, G.R. No. 196426, Aug. 15, 2011).

CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG, vs. NLRC & ROBERTO OBIAS,G.R. No.177664, Dec. 23, 2009

FACTS: PETITIONERS opposed respondent Roberto Obias complaint claiming that he was a seasonal driver whose work was irregular and not fixed. He was paid P175 daily but under a no work-no pay basis. He was also given a daily allowance of P140.00 to P200.00. In April 2003, he worked only for 15 days, for which he was paid the agreed wages. Was there an employer-employee relationship that existed between petitioners and Obias?

Ruling; Yes. The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employers power to control the employees conduct. The most important element is the employers control of the employees conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. All the four elements are present in this case.

First, the petitioners engaged the services of the respondent in 1995. Second, the petitioners paid the respondent a daily wage of P175.00, with allowances ranging from P140.00 to P200.00 per day. The fact the respondent was paid under a no work-no pay scheme, assuming this claim to be true, is not significant. The no work-no pay scheme is merely a method of computing compensation, not a basis for determining the existence or absence of employer-employee relationship. Third, the petitioners power to dismiss the respondent was inherent in the fact that they engaged the services of the respondent as a driver.

Finally, a careful review of the record shows that the respondent performed his work as driver under the petitioners supervision and control. Petitioners determined how, where, and when the respondent performed his task. They, in fact, requested the respondent to live inside their compound so he (respondent) could be readily available when the petitioners needed his services. Undoubtedly, the petitioners exercised control over the means and methods by which the respondent accomplished his work as a driver.

We conclude from all these that an employer-employee relationship existed between the petitioners and respondent (CRC Agricultural Trading and Rolando B. Catindig vs. NLRC and Roberto Obias, G.R. No. 177664, December 23, 2009).

DEALCO FARMS, INC., vs. NLRC et.al.G.R. No. 153192, Jan. 30, 2009

FACTS: Petitioner Dealco Farms is a corporation engaged in the business of importation, production, fattening and distribution of live cattle for sale to meat dealers, meat traders, meat processors, canned good manufacturers and other dealers in Mindanao and in Metro Manila. Petitioner imports cattle by the boatload from Australia into the ports of General Santos City, Subic, Batangas, or Manila. In turn, these imported cattle are transported to, and housed in, petitioners farms in Polomolok, South Cotabato, or in Magalang, Pampanga, for fattening until the cattle individually reach the market weight of 430 to 450 kilograms.

Respondents Albert Caban and Chiquito Bastida were hired by petitioner on June 25, 1993 and October 29, 1994, respectively, as escorts or "comboys" for the transit of live cattle from General Santos City to Manila. Respondents work entailed tending to the cattle during transportation. It included feeding and frequently showering the cattle to prevent dehydration and to develop heat resistance. On the whole, respondents ensured that the cattle would be safe from harm or death caused by a cattle fight or any such similar incident.

Upon arrival in Manila, the cattle are turned over to and received by the duly acknowledged buyers or customers of petitioner, at which point, respondents work ceases. For every round trip travel which lasted an average of 12 days, respondents were each paid P1,500.00. The 12-day period is occasionally extended when petitioners customers are delayed in receiving the cattle. In a month, respondents usually made two trips. On August 19, 1999, respondents were told by Dealcos hepe de viaje that their replacement had been effected immediately, but no reason was given for their replacement. Respondents attempted to meet with petitioner but failed. Petitioner denies the existence of an employer-employee relationship with respondents, claiming that: (a) respondents are independent contractors who offer "comboy" services to various shippers and traders of cattle, not only to petitioner; (b) in the performance of work on board the ship, respondents are free from the control and supervision of the cattle owner since the latter is interested only in the result thereof; (c) in the alternative, respondents can only be considered as casual employees performing work not necessary and desirable to the usual business or trade of petitioner, i.e., cattle fattening to market weight and production; and (d) respondents likewise failed to complete the one-year service period, whether continuous or broken, set forth in Article 280 of the Labor Code, as petitioners shipments were substantially reduced in 1998-1999, thereby limiting the escort or "comboy" activity for which respondents were employed.

ISSUE: Whether or not an employer-employee relationship existed between petitioner and respondents and therefore the latters termination was illegal.

HELD: Complainants task of escorting the livestock shipped to Manila, taking care of the livestock in transit, is an activity which is necessary and desirable in the usual business or trade of respondent. It is of judicial notice that the bulk of the market for livestock of big livestock raisers such as respondent is in Manila. Hogs do not swim, they are shipped. The caretaker is a component of the business, a part of the scheme of the operation. More, it also appears that respondents had rendered service for more than one year doing the same task repeatedly, thus, even assuming they were casual employees they may be considered regular employees with respect to the activity in which they were employed and their employment shall continue while such activity exists (last par. of Art. 280).

In the case at bench, both the Labor Arbiter and the NLRC were one in their conclusion that respondents were not independent contractors, but employees of petitioner. In determining the existence of an employer-employee relationship between the parties, both the Labor Arbiter and the NLRC examined and weighed the circumstances against the four-fold test which has the following elements: (1) the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4) the power to control the employees conduct, or the so-called "control test." Of the four, the power of control is the most important element. More importantly, the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof.

The presence of the four (4) elements in the determination of an employer-employee relationship has been clearly established by the facts and evidence on record, starting with the admissions of petitioner who acknowledged the engagement of respondents as escorts of their cattles shipped from General Santos to Manila, and the compensation of the latter at a fee of P1,500.00 per trip

The element of control, jurisprudentially considered the most essential element of the four, has not been demolished by any evidence to the contrary. The branch has noticed that the preparation of the shipment of cattle, manning and feeding them while in transit, and making a report upon their return to General Santos that the cattle shipped and which reached Manila actually tallied were all indicators of instructions, supervision and control by [petitioner] on [respondents] performance of work as escorts for which they were hired. This we agree on all fours. The livestock shipment would cost thousands of pesos and the certainty of it reaching its destination would be the only thing any operator would consider at all time and under all circumstances. It is illogical for [petitioner] to argue that the shipment was not necessary or desirable to their business, as their business was mainly livestock production, because they were undeniably the owners of the cattle escorted by respondents. Should losses of a shipment occur due to respondents neglect these would still be petitioners loss, and nobody elses.

Considering that we have sustained the Labor Arbiters and the NLRCs finding of an employer-employee relationship between the parties, we likewise sustain the administrative bodies finding of respondents illegal dismissal. Accordingly, we are not wont to disturb the award of separation pay, claims for COLA and union service fees fixed at 10% of the total monetary award, as these were based on the finding that respondents were dismissed without just or authorized cause.

WPP MARKETING COMMUNICATIONS, INC., et. Al. vs. JOCELYN M. GALERA, G.R. No. 169207, March 25, 2010 And

JOCELYN M. GALERA, vs. WPP MARKETING COM., et. al. G.R. No. 169239, March 25, 2010

Facts: Petitioner Jocelyn M. Galera is an American citizen, who was hired by respondent John Steedman, Chairman of WPP Worldwide and Chief Executive Officer of Mindshare, Co., a corporation based in Hong Kong, China, to work in the Philippines for private respondent WPP Marketing Communications, Inc. (WPP), a corporation registered and operating under the laws of Philippines. Under the employment contract, Galera would commence employment on September 1, 1999, with the position of Managing Director of Mindshare Philippines. Thus, without obtaining an alien employment permit, Galera commenced her employment with WPP Philippines on the said date. It was only after four months from the time she commenced employment that private respondent WPP filed before the Bureau of Immigration an application for petitioner Galera to receive a working visa. In the application, she was designated as Vice-President of WPP. Petitioner alleged that she was constrained to sign the application in order that she could remain in the Philippines and retain her employment.

On December 14, 2000, private respondent Galera was verbally informed by Steedman that her employment had been terminated. She received her termination letter the following day. Her termination prompted Galera to commence a complaint for illegal dismissal before the labor arbiter. The labor arbiter found WPP, Steedman, Webster, and Lansang liable for illegal dismissal and damages. Furthermore the labor arbiter stated that Galera was not only illegally dismissed but was also not accorded due process, saying that Galera was not given an opportunity by WPP to defend herself and explain her side. Thus, WPP did not observe both substantive and procedural due process in terminating Galeras employment. The labor arbiter ordered WPP to reinstate Galera and to pay her backwages, transportation and housing benefits, and moral and exemplary damages, among others.

On appeal, the NLRC reversed the labor arbiters ruling. The NLRC ruled that Galera was WPPs Vice-President, and therefore, a corporate officer at the time she was removed by the Board of Directors on 14 December 2000. The NLRC ruled that the labor arbiter had no jurisdiction over the case because being a corporate officer, a case arising from her termination is considered as an intra-corporate dispute, which was cognizable by the Securities and Exchange Commission under P.D. 902-A (but now by the Regional Trial Courts designated as Commercial Courts by the Supreme Court pursuant to Section 5.2 of RA No.8799).

The Court of Appeals reversed the NLRC. It ruled that Galeras appointment by the Board of Directors of the WPP as Vice President for Media had no legal effect as WPPs by-laws provided for only one Vice-President, which at that time was occupied. Furthermore, WPPs by-laws did not include a managing director as among its corporate officers. The Court of Appeals ordered WPP to pay Galera backwages and separation pay, as well as housing benefits, moral and exemplary damages, and attorneys fees, among others. The case was subsequently elevated to the Supreme Court.Issues:1. Is Galera an employee or a corporate officer of WPP?2. Did the labor arbiter have jurisdiction over the case?3. Was Galera illegally dismissed?4. Is Galera entitled to collect the award of backwages and damages even if she did not have an alien employment permit when she commenced her employment in the Philippines?

Ruling (First Issue): Galera is an employee of WPP. She is not a corporate officer of WPP. An examination of WPPs by-laws resulted in a finding that Galeras appointment as a corporate officer (Vice-President with the operational title of Managing Director of Mindshare) during a special meeting of WPPs Board of Directors is an appointment to a non-existent corporate office. WPPs by-laws provided for only one Vice-President. At the time of Galeras appointment on December 31, 1999, WPP already had one Vice-President in the person of Webster. Galera cannot be said to be a director of WPP also because all five directorship positions provided in the by-laws are already occupied.

The appellate court further justified that Galera was an employee and not a corporate officer by subjecting WPP and Galeras relationship to the four-fold test: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee with respect to the means and methods by which the work is to be accomplished. The appellate court found that Sections 1 and 4 of the employment contract mandate where and how often she is to perform her work; Sections 3, 5, 6 and 7 show that wages she receives are completely controlled by WPP; and Sections 10 and 11 clearly state that she is subject to the regular disciplinary procedures of WPP.

(Second Issue): The Labor Arbiter had jurisdiction over the illegal dismissal complaint filed by Galera. Galera being an employee, the Labor Arbiter and the NLRC had jurisdiction over her illegal dismissal complaint. Article 217 of the Labor Code vests the Labor Arbiter with the jurisdiction to hear and decide, among others termination disputes, involving workers, whether agricultural or non-agricultural.

(Third Issue): Yes, WPPs dismissal of Galera lacked both substantive and procedural due process.

WPP failed to prove any just or authorized cause for Galeras dismissal. WPP was unable to substantiate the allegations of Steedmans December 15, 2000 letter to Galera, (questioning her leadership and competence). Galera, on the other hand, presented documentary evidence in the form of congratulatory letters, including one from Steedman, which contents are diametrically opposed to the December 15, 2000 letter. Also, the law requires that the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employers decision to dismiss him. Failure to comply with the requirements taints the dismissal with illegality. WPPs acts clearly show that Galeras dismissal did not comply with the two-notice rule.

(Fourth Issue): No, Galera could not claim the employees benefits she is entitled under Philippine Labor Laws. The law and the rules are consistent in stating that the employment permit must be acquired prior to employment. Article 40 of the Labor Code states: "Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations provides, among others, that if an alien enters the country under a non-working visa and wishes to be employed thereafter, he may only be allowed to be employed upon presentation of a duly approved employment permit.Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to sanction the violation of the Philippine labor laws requiring aliens to secure work permits before their employment. We hold that the status quo must prevail in the present case and we leave the parties where they are. This ruling, however, does not bar Galera from seeking relief from other jurisdictions.

GLORIA V. GOMEZ,vs. PNOC DEVELOPMENT ANDMANAGEMENT CORPORATION (PDMC) (formerly known as FILOIL DEVELOPMENT AND MANAGEMENT

G.R. No. 174044, Nov. 27, 2009

Facts: Petitioner Gloria V. Gomez used to work as Manager of the Legal Department of Petron Corporation, then a government-owned corporation. With Petrons privatization, she availed of the companys early retirement program and left that organization on April 30, 1994. On the following day, May 1, 1994, however, Filoil Refinery Corporation (Filoil), also a government-owned corporation, appointed her its corporate secretary and legal counsel, with the same managerial rank, compensation, and benefits that she used to enjoy at Petron. However, the privatization did not materialize so Gomez continued to serve as corporate secretary of respondent PDMC. On September 23, 1996 its president re-hired her as administrator and legal counsel of the company.

On March 29, 1999 the new board of directors of respondent PDMC removed petitioner Gomez as corporate secretary. Further, at the boards meeting on October 21, 1999 the board questioned her continued employment as administrator. In answer, she presented the former presidents May 24, 1998 letter that extended her term. Dissatisfied with this, the board sought the advice of its legal department, which expressed the view that Gomezs term extension was an ultra vires act of the former president. It reasoned that, since her position was functionally that of a vice-president or general manager, her term could be extended under the companys by-laws only with the approval of the board. The legal department held that her de facto tenure could be legally put to an end.

Petitioner Gomez for her part conceded that as corporate secretary, she served only as a corporate officer. But, when they named her administrator, she became a regular managerial employee. Consequently, the respondent PDMCs board did not have to approve either her appointment as such or the extension of her term in 1998.

Issue: WON, Gomez an ordinary employee whose complaint is within the jurisdiction of the NLRC

Ruling: Yes. The relationship of a person to a corporation, whether as officer or agent or employee, is not determined by the nature of the services he performs but by the incidents of his relationship with the corporation as they actually exist. That the employee served concurrently as corporate secretary for a time is immaterial. A corporation is not prohibited from hiring a corporate officer to perform services under circumstances which will make him an employee. Indeed, it is possible for one to have a dual role of officer and employee. NLRC has jurisdiction over a complaint filed by one who served both as corporate officer and employee, when the money claims were made as an employee and not as a corporate officer.

RAUL G. LOCSIN and EDDIE B. TOMAQUIN Vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY,

G.R. No. 185251, October 2, 2009

Facts: On November 1, 1990, respondent Philippine Long Distance Telephone Company (PLDT) and the Security and Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement (Agreement) whereby SSCP would provide armed security guards to PLDT to be assigned to its various offices. Pursuant to such agreement, petitioners Raul Locsin and Eddie Tomaquin, among other security guards, were posted at a PLDT office.

On August 30, 2001, respondent issued a Letter dated August 30, 2001 terminating the Agreement effective October 1, 2001. Despite the termination of the Agreement, however, petitioners continued to secure the premises of their assigned office. They were allegedly directed to remain at their post by representatives of respondent. In support of their contention, petitioners provided the Labor Arbiter with copies of petitioner Locsins pay slips for the period of January to September 2002.

Then, on September 30, 2002, petitioners services were terminated. Thus, petitioners filed a complaint before the Labor Arbiter for illegal dismissal and recovery of money claims such as overtime pay, holiday pay, premium pay for holiday and rest day, service incentive leave pay, Emergency Cost of Living Allowance, and moral and exemplary damages against PLDT.

The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal. It was explained in the Decision that petitioners were found to be employees of PLDT and not of SSCP. Such conclusion was arrived at with the factual finding that petitioners continued to serve as guards of PLDTs offices. As such employees, petitioners were entitled to substantive and procedural due process before termination of employment.

Issue: Is there employer-employee relationship?

Ruling: Yes. From the foregoing circumstances, reason dictates that we conclude that petitioners remained at their post under the instructions of respondent. We can further conclude that respondent dictated upon petitioners that the latter perform their regular duties to secure the premises during operating hours. This, to our mind and under the circumstances, is sufficient to establish the existence of an employer-employee relationship.

To reiterate, while respondent and SSCP no longer had any legal relationship with the termination of the Agreement, petitioners remained at their post securing the premises of respondent while receiving their salaries, allegedly from SSCP. Clearly, such a situation makes no sense, and the denials proffered by respondent do not shed any light to the situation. It is but reasonable to conclude that, with the behest and, presumably, directive of respondent, petitioners continued with their services. Evidently, such are indicia of control that respondent exercised over petitioners.

Evidently, respondent having the power of control over petitioners must be considered as petitioners employerfrom the termination of the Agreement onwardsas this was the only time that any evidence of control was exhibited by respondent over petitioners and in light of our ruling in Abella. Thus, as aptly declared by the NLRC, petitioners were entitled to the rights and benefits of employees of respondent, including due process requirements in the termination of their services.

Both the Labor Arbiter and NLRC found that respondent did not observe such due process requirements. Having failed to do so, respondent is guilty of illegal dismissal.

MASONIC CONTRACTOR, INC. and MELVIN BALAIS/AVELINO REYES, vs. MAGDALENA MADJOS, ZENAIDA TIAMZON, and CARMELITA RAPADAS,

G.R. No. 185094, November 25, 2009

Facts: Respondents Magdalena Madjos, Zenaida Tiamzon and Carmelita Rapadas were employed sometime in 1991 as all-around laborers (driver/sweeper/ taga-libing/grass-cutter) by Masonic Contractor, Inc. (MCI). Each of them received an initial daily wage of P165.00 and were required to report for work from 7:00 a.m. to 4:00 p.m. Three years thereafter, MCI increased their wages by P15.00 per day but not without earning the ire of Melvin Balais, president of MCI.

Sometime in 2004, Balais told Madjos, Tiamzon and Rapadas, along with nine (9) other employees, to take a two-day leave. When they reported for work two days thereafter, they were barred from entering the work premises and were informed that they had already been replaced by other workers. This prompted Madjos and her co-workers to file a complaint against herein petitioners for illegal dismissal and for non-payment of overtime pay, holiday pay, 13th month pay, and damages.

Petitioners, for their part, denied being the direct employer of respondents. Essentially, they argued that MCI had maintenance contracts with different memorial park companies and that, over the years, they had engaged the services of a certain Luz Malibiran to provide them with the necessary manpower depending on MCIs volume of work.

Issue: Are respondents regular employees of petitioner?

Ruling: Yes. Petitioners defense that they merely contracted the services of respondents through Malibiran fails to persuade us. The facts of this case show that respondents have been under the employ of MCI as early as 1991. They were hired not to perform a specific job or undertaking. Instead, they were employed as all-around laborers doing varied and intermittent jobs, such as those of drivers, sweepers, gardeners, and even undertakers or tagalibing, until they were arbitrarily terminated by MCI in 2004. Their wages were paid directly by MCI, as evidenced by the latters payroll summary, belying its self-serving and unsupported contention that it paid directly to Malibiran for respondents services. Respondents had identification cards or gate passes issued not by Malibiran, but by MCI, and were required to wear uniforms bearing MCIs emblem or logo when they reported for work.

It is common practice for companies to provide identification cards to individuals not only as a security measure, but more importantly to identify the bearers thereof as bona fide employees of the firm or institution that issued them. The provision of company-issued identification cards and uniforms to respondents, aside from their inclusion in MCIs summary payroll, indubitably constitutes substantial evidence sufficient to support only one conclusion: that respondents were indeed employees of MCI.

LESLIE OKOL, vs. SLIMMERS WORLD INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC., and RONALD JOSEPH MOY , G.R. No. 160146, December 11, 2009

FACTS: PETITIONER Leslie Okol rose from the ranks to become head office manager, then director and vice president, of the respondent from 1996 until her dismissal on Sept. 22, 1999.

She filed a complaint for illegal suspension, illegal dismissal and money claims against the respondent in the arbitration branch of the National Labor Relations Commission (NLRC). She asserted that even as vice president, the work that she performed conformed to that of an employee rather than a corporate officer. Hence, NLRC has jurisdiction over the case. Did this contention prosper?

Ruling: No. Clearly, from the documents submitted by respondents, petitioner was a director and officer of Slimmers World. The charges of illegal suspension, illegal dismissal, unpaid commissions, reinstatement and back wages imputed by petitioner against respondents fall squarely within the ambit of intra-corporate disputes. In a number of cases, we have held that a corporate officers dismissal is always a corporate act or an intra-corporate controversy which arises between stockholder and a corporation.

The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code [Estrada v. NLRC, G.R. 106722, Oct. 4, 1996, 262 SCRA 709; Lozon v. NLRC, 310 Phil. 1 (1995); Espino v. NLRC, 310 Phil. 61 (1995); Fortune Cement Corp. v. NLRC, G.R. 79762, Jan. 24, 1991, 193 SCRA 258 citing Dy v. NLRC, 229 Phil. 234 (1986).]

Subsection 5.2, Section 5 of Republic Act 8799, which took effect on Aug. 8, 2000, transferred to regional trial courts the SECs jurisdiction over all cases listed in Section 5 of PD 902-A.

It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the rights of a director and corporate officer dismissed from his employment, as well as the corresponding liability of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the regular courts. Thus, the appellate court correctly ruled that it is not the NLRC but the regular courts which have jurisdiction over the present case. (Leslie Okol vs. Slimmers World International Behavior Modifications Inc. and Ronald Joseph Moy, G.R. 160146, Dec. 11, 2009).

ATOK BIG WEDGE COMPANY, INC., PETITIONER, VS. JESUS P. GISON, RESPONDENT. [G.R. No. 169510, August 08, 2011]

Topic: Basic Principles

Facts: Respondent Jesus P. Gison was engaged as part-time consultant on retainer basis by petitioner Atok Big Wedge Company, Inc. As a consultant on retainer basis, respondent assisted petitioner's retained legal counsel with matters pertaining to the prosecution of cases against illegal surface occupants within the area covered by the company's mineral claims. Respondent was likewise tasked to perform liaison work with several government agencies, which he said was his expertise.Petitioner did not require respondent to report to its office on a regular basis, except when occasionally requested by the management to discuss matters needing his expertise as a consultant. As payment for his services, respondent received a retainer fee of P3,000.00 a month,[3] which was delivered to him either at his residence or in a local restaurant. The parties executed a retainer agreement, but such agreement was misplaced and can no longer be found.

The said arrangement continued for the next eleven years.

Sometime thereafter, since respondent was getting old, he requested that petitioner cause his registration with the Social Security System (SSS), but petitioner did not accede to his request. Respondent filed a Complaint[4] with the SSS against petitioner for the latter's refusal to cause his registration with the SSS.

On the same date, respondent was advised that petitioner is terminating his retainer contract with the company since his services are no longer necessary.

Issue: Existence of employer-employee relationship

Ruling: To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct, or the so-called "control test."[18] Of these four, the last one is the most important.[19] The so-called "control test" is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.[20]

Applying the aforementioned test, an employer-employee relationship is apparently absent in the case at bar. Among other things, respondent was not required to report everyday during regular office hours of petitioner. Respondent's monthly retainer fees were paid to him either at his residence or a local restaurant. More importantly, petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in which his expertise as a liaison officer was needed; respondent was left alone and given the freedom to accomplish the tasks using his own means and method. Respondent was assigned tasks to perform, but petitioner did not control the manner and methods by which respondent performed these tasks. Verily, the absence of the element of control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner.

Contrary to the conclusion of the CA, respondent is not an employee, much more a regular employee of petitioner. The appellate court's premise that regular employees are those who perform activities which are desirable and necessary for the business of the employer is not determinative in this case. In fact, any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latter's business, even without being hired as an employee.[23] Hence, respondent's length of service and petitioner's repeated act of assigning respondent some tasks to be performed did not result to respondent's entitlement to the rights and privileges of a regular employee.

Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he still cannot be considered as a regular employee of

petitioner. Article 280 of the Labor Code, in which the lower court used to buttress its findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar. Indeed, the Court has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute.[24] It is, therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee relationship exists between respondent and the petitioner

Considering that there is no employer-employee relationship between the parties, the termination of respondent's services by the petitioner after due notice did not constitute illegal dismissal warranting his reinstatement and the payment of full backwages, allowances and other benefits.

II. Classification of Employees

a. Regular vs. Casual Employees

ARTICLE 280.Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements 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 a GFDnd the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

ARTICLE 281. Probationary employment. Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement.An employee who is allowed to work after a probationary period shall be considered a regular employee.NOTE: Art. 280 is NOT the yardstick in determining employer-employee relationship. What is controlling is the four-fold test and (now) the economic reality test. Art. 280 apply only when the existence of employer-employee relationship is not in dispute.1. Regular Employment - 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. the word usually is used because it does not mean they always have to perform tasks which are necessary or desirable.

it also refers to casual employees who have rendered at least one year of service, whether continuo/us or broken, with respect to the activity they are employed.

probationary or term employees are also considered regular once they are allowed to work beyond the term or duration of the project.

project employee who has been continuously rehired (Maraguinot Case)-becomes regular for the specific job or continuously rehired for:

i. employee is continuously rehired from project to project even with gaps of time in between

ii. task is UNOD in UTOB, or else the project employee is considered only a casual employee

iii. rehired for the same task or nature of task

a project employee concerted to regular employee is still not paid for the period he does not work. But if the employer is required to hire him when the next project requires the particular job he does, or else, the employer is guilty of illegal termination.

Regular Employee may either bea. Permanent a regular appointed for an indefinite period , either with or without passing a probationary period.

b. Probationary one who is placed in a trial period whose performance is assessed whether satisfactory or not. If performance is satisfactory, it is followed by a regular employment, if not, the employment is terminated.-An employer has the prerogative whether to subject the employee with probationary employment or not. Thus, an employee may be considered as a permanent employee on his first day of work.Employees may be considered regular depending on 2 factors:1. Regular employees by the nature of the work UNOD in UTOB

2. Regular employees by the length of service

2. Casual Employment - An employment shall be deemed to be casual if it is not covered by the preceding paragraph (regular employment)An employment is casual if :

1. a worker is employed to perform work not related to the business or trade of the employer and 2. he is employed for a short term or short duration.(e.g. less than a year) does not have security of tenure before reaching the one-year period, however, if he has rendered at least one year of service, whether such service is continuous or broken, he shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

Examples, not usually necessary or desirable: in a bank: janitorial service

in a manufacturing company: the cutter of cogon grass in the companys premises is totally alien to the business of a company manufacturing cultured milk.

Before reaching the one year period, a casual employee can be terminated if his work is found to be unsatisfactory. The moment he reaches the one-year period, he becomes a regular employee who can neither be removed nor dismissed except for a just cause as provided in the LC.3.Project Employment is one 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 employeeThree instances when the project employee is converted into a regular employee: 1. A project employee may be converted to a regular status when he was employed for a specific project, the completion of which is determined, but despite the termination of the project, he is still made to work. It negates the essence of project employment. It shows that the employees work is needed not only in the specific project.

2. Within the project itself, and before the completion of the project, the employee is given tasks not related at all to the project. Giving the employee additional works negates the essence of project employment. It shows that his services is not limited to the project. Even if the extra work is not UNOD in UTOB to the main business, he is converted to a regular employee.

3. Maraguinot case. Under multiple succeeding projects, can have gaps between each project, the employees can still be converted to regular status but only when the project employee is rehired continuously, and for the same nature of task. There is a pattern showing that UNOD in UTOB.

Note: The one-year rule only applies to casual employment, not to project nor seasonal employees.Two kinds of Project Employee:1. tasks which are UNOD in UTOB

2. tasks which are not UNOD in UTOB

a. the job must be distinct from the totality of ERs business

b. the project must be definite as to its completion

c. Employment terminates with the project, regardless of the period

Principal Test for determining whether a particular employee is a project employee or not:Whether or not the project employee is assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee is engaged for that project. A work pool is not necessary in order to convert the project employee into regular, But its existence may signify that the project employee has become regular if there is a continuous rehiring.Requirements:

1. he must be hired for that specific project2. the completion or termination of his project was made known to him4.Seasonal Employment - is one where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.Seasonal Employee-Hired for a specific period of time during the year, and may be UNOD in UTOB Rehired whenever their services are required (e.g. farm workers) At the arrival of the season must be rehired, or else employer is guilty of illegal termination Allowed to seek work elsewhere while off-season 2 requisites to prove seasonal employees:1. the work or services performed by the workers are seasonal in nature

2. they must be employed for the duration of one season only

-Seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from the service in said period, but are merely considered on leave until re-employed.In this case, conversion occurs similar to project employees. When they are continuously rehired for the same task/nature of task, they become regular employees. During off season, they are temporarily laid off, without pay, but they are still considered regular employees.Fixed term-the job is assigned a specific date of expiration even if the job is considered UNOD in UTOB. The important aspect is that the job is time bound.Brent school ruling: Requirements for a valid Fixed Term employment:1. where a fixed period for employment was agreed upon knowingly and voluntarily by the parties2. without any force, duress or improper pressure being brought to bear upon the employee and absent any circumstances vitiating consent, or3. where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter5.Probationary Employment is one who is on tentative employment during which the employer determines whether he (employee) is qualified for permanent employment.

- Probationary period is 6 months for the employer to determine the eligibility of the employee. But the period may be shortened or extended. Probationary employee is converted to regular after the period imposed has lapsed, and the employee continues to work. It implies that the employee has passed and is eligible for regular employment. Also, if the terms and conditions of employment are not clearly provided by the employer, the standards are not clear then the employee is deemed a regular employee. This is because the employee has no knowledge of what standards he or she must meet, and so this should not work to his or her prejudice.Employee is hired for 6 months in order to determine qualification or capacity as a regular employee although an employee can become regular right away without going through probation.The employee is given the standards at the time of engagement (employer must explain not merely giving document) LC provides that the duration of probation is 6 months (maximum period of probation). The exceptions are the following:

(a) xxx unless it is covered by an apprenticeship agreement stipulating a longer period such as jobs which are highly technical ( not an employee); and

(b) In cases of academic personnel: the Manual of Regulations for Private School provides a longer probationary period.

Academic personnel- Include all school personnel who are formally engaged in actual teaching service or research assignment, either on full-time or part-time basis, as well as those who possess certain prescribed functions directly supportive of teaching, such as registrars, librarian, guidance counselors, researchers, and other similar persons.

They include school officials responsible for academic matters, and may include other school officials.Sec 92. Manual of Regulation of Private Schoolsa. for those in the secondary and elementary level, a probationary period of not more than 3 consecutive years of satisfactory service (calendar year)

b. for those in the tertiary level, not more than 6 consecutive regular semesters of satisfactory service (school year)

c. for those in trimester, for not more than 9 consecutive trimesters of satisfactory service (school year)

Non-academic personnel- means school personnel usually engaged in administrative functions who are not covered under the definition of academic personnel. They may include school officials.When is probationary employment permissible?a. when the work requires special qualifications, skills training or experience

b. when the work, job or position involved is permanent, regular, stable or indefinite and not merely casual or intermittent.

c. if the work is not intended to circumvent the security of tenure

d. if it is necessary or customary for the position or the job involvedGeneral rule: Probationary period should not exceed 6 months from the date the employee started working.Exception: The 6 months period provided in the law admits of certain exceptions such as:1. when the ER and EE mutually agree on a shorter or longer period;

2. when the nature of work to be performed by the EE required a longer period;

3. when a longer period is required and established by company policy

Security of tenure is still available to probationary employees, but only for a limited period.

Other Classification (Special Laws)1. Construction Industry (Department Order No. 19, Series of 1993)

a. Project

b. Non-Project

b.1. probationary

b.2. regular

b.3. casual2. Broadcast Industry (DOLE Policy Instruction No. 40) Station Employee: a. are those whose services are engaged to discharge functions which are usually necessary and desirable to the operation of the station and

b. whose usefulness is not affected by changes of programs, ratings, or formats and who observe normal working hours.

- These shall include employees whose talents, skills or services are engaged as such by the station without particular reference to any specific program undertaking and are not allowed by the station to be engaged or hired by other stations or persons even if such employee do not observe normal working hours.Program employee:a. are those whose skills or services are engaged by the station for a particular or specific program or undertaking and

b. who are not required to observe normal working hours such that on some days they work for less than 8 hours and on other days beyond the normal working hours observed by station employees; and

c. are allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring companies.

*Same classification as in the Labor Code. Policy Instruction No. 40 has been declared to be of NO effect in the case of Sonza vs. ABS-CBN (G.R. 138051, June 10, 2004) Policy Instruction 40 is a mere executive issuance which does not have the force and effect of law. There is no legal presumption that Policy Instruction No. 40 determines SONZAs status. A mere executive issuance cannot exclude independent contractors from the class of service providers to the broadcast industry. The classification has no basis either in law or in fact.3. In Private Educational Institutions (Manual of Regulations for Private School)

a. Academic Personnel a.1. Academic teaching

a.2. Academic non-teaching (librarian)

b. Non-Academic Personnel those staff who perform administrative functions but are not involved in academic work

Their employment is NOT covered by the MRPS or by the TVET Manual but by the Labor Code.

4. In Hospitals Q: Are Resident Physicians considered employees of hospitals?

A: It depends. If undergoing training, he is NOT an employee of the hospital. If not undergoing training, he is an employee, but only on a term basis.

BASIS- Omnibus Rules, Book III, Rule X-A, Sec.15Residents in training. There is employer employee relationship between resident physicians and the training hospitals, UNLESS:(1) there is a training agreement between them and

(2) the training program is duly accredited or approved by the appropriate government agency. Xxx

Exceptions to regular employment 1. Seasonal Employment

2. Project Employment

3. Casual Employment 4. Fixed Term/Period Employment an employment that will last only for a definite period, as agreed by the parties.

Guidelines for the validity of this kind of employment1. the fixed period of employment (ET) is knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the EE and absent any other circumstances vitiating his consent.

2. It satisfactorily appears that the ER and the EE dealt with each other on more or less equal terms with no moral dominance being exercised by the former or the latter.

3. It must not circumvent the provisions in the labor code on security of tenure.

CASES:

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION ALU TUCP, vs. PHILIPPINE NATIONAL OIL COMPANY ENERGY DEVELOPMENT CORPORATION, G.R. No. 170351, March 30, 2011Facts: [Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a government-owned and controlled corporation engaged in exploration, development, utilization, generation and distribution of energy resources like geothermal energy. Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment (DOLE) Regional Office No. VIII, Tacloban City. Among [respondent's] geothermal projects is the Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only in the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the [respondent] hired and employed hundreds of employees on a contractual basis, whereby, their employment was only good up to the completion or termination of the project and would automatically expire upon the completion of such project. Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and for a CBA negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when the project was about to be completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members of the petitioner. On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground of purported commission by the latter of unfair labor practice for "refusal to bargain collectively, union busting and mass termination." On the same day, the petitioner declared a strike and staged such strike. To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed to return to work within twelve (12) hours from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment prior to the strike. Further, the parties were directed to cease and desist from committing any act that would exacerbate the situation. However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the petitioner remained adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful compromise. In effect, the petitioner did not abide by [the] assumption order issued by the Secretary of Labor. Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Tacloban City and at the same time, filed a Petition for Cancellation of Petitioner's Certificate of Registration with DOLE, Regional Office No. VIII. The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was docketed as NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case was indorsed to the NLRC 4thDivision in Cebu City on June 21, 1999 for the proper disposition thereof.Issue: 1. Whether the officers and members of petitioner Union are project employees of respondent; and

2. Whether the officers and members of petitioner Union engaged in an illegal strike.

Rulings: On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary and desirable to respondent's usual business. In fact, petitioner Union reiterates that its officers and members were assigned to the Construction Departmentof respondent as carpenters and masons, and to other jobs pursuant to civil works, which are usually necessary and desirable to the department. Petitioner Union likewise points out that there was no interval in the employment contract of its officers and members, who were all employees of respondent, which lack of interval, for petitioner Union, "manifests that the `undertaking' is usually necessary and desirable to the usual trade or business of the employer."

We cannot subscribe to the view taken by petitioner Union.

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:

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 employeeor where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.

The foregoing contemplates four (4) kinds of employees: (a)regularemployees or those who have been "engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer"; (b)projectemployees or those "whose 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"; (c)seasonalemployees or those who work or perform services which are seasonal in nature, and the employment is for the duration of the season;and (d)casualemployees or those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind-- a fixed-term employee.

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the policy enshrined in the Constitution to "afford full protection to labor."Thus, labor contracts are placed on a higher plane than ordinary contracts; these are imbued with public interest and therefore subject to the police power of the State.

However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or undertaking remain valid under the law: x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project. It is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The employer's interest is equally important as that of the employee[s'] for theirs is the interest that propels economic activity. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration, such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment contract. After all, under the law, the interest of the worker is paramount.

In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the specific project or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of this issue: A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the [employment contracts] freely and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or undue influence when they entered, perfected and consummated [the employment] contracts. In fact, it was clearly established in the course of the trial of this case, as explained by no less than the President of [petitioner] Union, that the contracts of employment were read, comprehended, and voluntarily accepted by them. x x x.

As clearly shown by [petitioner] Union's own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts tending to vitiate the worker[s'] consent. Thus, we see no reason not to honor and give effect to the terms and conditions stipulated therein. x x x.

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.Rule 133, Section 5 defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases.We may take cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the CA.In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were project employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work which was usually necessary or desirable to the usual business or trade of the Construction Departmentof respondent.

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was designed to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so - called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same instructions show that the proviso in the second paragraph of Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us believe, to prevent small-scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term,seasonal employees, their employment legally ends upon completion of the project or the [end of the] season. The termination of their employment cannot and should not constitute an illegal dismissal.

SMC , vs. EDUARDO L. TEODOSIO, G.R. No. 163033, October 2, 2009Facts: On September 5, 1991, respondent Eduardo Teodosio was hired by San Miguel Corporation (SMC) as a casual forklift operator in its Bacolod City Brewery. As a forklift operator, respondent was tasked with loading and unloading pallet of beer cases within the brewery premises. Respondent continuously worked from September 5, 1991 until March 1992, after which he was asked to rest for a while. A month after, or sometime in April 1992, respondent was rehired for the same position, and after serving for about five to six months, he was again asked to rest. After three weeks, he was again rehired as a forklift operator. He continued to work as such until August 1993.

Sometime in August 1993, respondent was made to sign an Employment with a Fixed Period contract by SMC, wherein it was stipulated, among other things, that respondents employment would be from August 7, 1993 to August 30, 1995, or upon cessation of the instability/fluctuation of the market demand, whichever comes first. Thereafter, respondent worked at the plant without interruption as a forklift operator.

On March 20, 1995, respondent was transferred to the plants bottling section as a case piler. In a letter dated April 10, 1995, respondent formally informed SMC of his opposition to his transfer to the bottling section. He asserted that he would be more effective as a forklift operator because he had been employed as such for more than three years already. Respondent also requested that he be transferred to his former position as a forklift operator. However, SMC did not answer his letter.

In an undated letter, respondent informed SMC that he was applying for the vacant position of bottling crew as he was interested in becoming a regular employee of SMC.

On June 1, 1995, SMC notified the respondent that his employment shall be terminated on July 1, 1995 in compliance with the Employment with a Fixed Period contract. SMC explained that this was due to the reorganization and streamlining of its operations.

In a letter dated July 3, 1995, respondent expressed his dismay for his dismissal. He informed SMC that despite the fact that he would be compelled to receive his separation pay and would be forced to sign a waiver to that effect, this does not mean that he would be waiving his right to question his dismissal and to claim employment benefits as provided in the Collective Bargaining Agreement (CBA) and company policies.

Thereafter, respondent signed a Receipt and Release document in favor of SMC and accepted his separation pay, thereby releasing all his claims against SMC.On July 4, 1995, respondent filed a Complaint against SMC.

Issues: (1) Is respondent a regular employee? (2) Is there illegal dismissal?

Ruling (First Issue): Yes. Based on the circumstances surrounding respondents employment by SMC, this Court is convinced that he has attained the status of a regular employee long before he executed the employment contract with a fixed period. The Labor Code provides that a casual employee can be considered as a regular employee if said casual employee has rendered at least one year of service regardless of the fact that such service may be continuous or broken. Section 3, Rule V, Book II of the Implementing Rules and Regulations of the Labor Code clearly defines the term at least one year of service to mean service within 12 months, whether continuous or broken, reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless the working days in the establishment, as a matter of practice or policy, or as provided in the employment contract, is less than 12 months, in which case said period shall be considered one year. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business of the employer.

Moreover, the nature of respondents work is necessary in the business in which SMC is engaged. SMC is primarily engaged in the manufacture and marketing of beer products, for which purpose, it specifically maintains a brewery in Bacolod City. Respondent, on the other hand, was engaged as a forklift operator tasked to lift and transfer pallets and pile them from the bottling section to the piling area. SMC admitted that it hired respondent as a forklift operator since the third quarter of 1991 when, in the absence of fully automated palletizers, manual transfers of beer cases and empties would be extensive within the brewery and its premises.

Undoubtedly, respondent is a regular employee of SMC. Consequently, the employment contract with a fixed period which SMC had respondent execute was meant only to circumvent respondents right to security of tenure and is, therefore, invalid.

(Second Issue): Yes. Since respondent was already a regular employee months before the execution of the Employment with a Fixed Period contract, its execution was merely a ploy on SMCs part to deprive respondent of his tenurial security. Hence, no valid fixed-term contract was executed. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Equally important to consider is that a contract of employment is impressed with public interest such that labor contracts must yield to the common good. Provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other.

Having gained the status of a regular employee, respondent is entitled to security of tenure and could only be dismissed on just or authorized causes and after he has been accorded due process.Regular Employees are classified into (1) regular employees by nature of work and (2) regular employees by years of service-the former refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of the their length of service.

PLDT Inc., vs. Arceo

(489 SCRA 617) 2006

FACTS: May 1990 ARCEO applied for the position of telephone operator with PLDT. She, however, failed the pre-employment qualifying examination. Having failed the test, ARCEO requested PLDT to allow her to work at the latters office even without pay. PLDT agreed and assigned her to its commercial section where she was made to perform various tasks like photocopying documents, sorting out telephone bills and notices of disconnection, and other minor assignments and activities. After two weeks, PLDT decided to pay her the minimum wage.

February 15, 1991 PLDT saw no further need for ARCEO's services and decided to fire her but, through the intervention of PLDTs commercial section supervisor, she was recommended for an on-the-job training on minor traffic work. When she failed to assimilate traffic procedures, the company transferred her to auxiliary services, a minor facility.

Subsequently, ARCEO took the pre-qualifying exams for the position of telephone operator two more times but again failed in both attempts.

October 30, 1991 PLDT discharged ARCEO from employment. She then filed a case for illegal dismissal before the labor arbiter. On May 11, 1993, the arbiter ruled in her favor. PLDT was ordered to reinstate ARCEO to her former position or to an equivalent position.

June 9, 1993 ARCEO was reinstated as casual employee with a minimum wage of P106 per day. She was assigned to photocopy documents and sort out telephone bills.

CAUSE OF ACTION:

September 3, 1996 (more than three years after her reinstatement) ARCEO filed a complaint for unfair labor practice, underpayment of salary, underpayment of overtime pay, holiday pay, rest day pay and other monetary claims. She alleged in her complaint that, since her reinstatement, she had yet to be regularized and had yet to receive the benefits due to a regular employee.

DECISION of the labor arbiter, NLRC, CA:

August 18, 1997 The labor arbiter ruled that ARCEO was already qualified to become a regular employee. He also found that PLDT denied her all the benefits and privileges of a regular employee.

November 28, 1997 The NLRC affirmed the decision of the labor arbiter finding ARCEO eligible to become a regular employee.

June 29, 2001 The CA affirmed the decision of the NLRC.

ISSUE: Does the provision in Art. 280 of the Labor Code which regularizes a casual employee who has rendered at least one year of service subject to the condition that the employment subsists or the position still exists?

HELD: Reinstatement to an equivalent position PLDTs argument that respondents position has been abolished, if indeed true, does not preclude ARCEOs becoming a regular employee. The order to reinstate her also included the alternative to reinstate her to a position equivalent thereto. Thus, PLDT can still regularize her in an equivalent position.

PLDT failed to show position no longer subsists Moreover, PLDTs argument does not hold water in the absence of proof that the activity in which ARCEO was engaged (like photocopying of documents and sorting of telephone bills) no longer subsists. Under Art. 280, any employee who has rendered at least one year of service shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. For PLDTs failure to show that the activity undertaken by ARCEO has been discontinued, we are constrained to confirm her regularization in that position.

Date of regularization (when entitled to benefits) Considering that she has already worked in PLDT for more than one year at the time she was reinstated, she should be entitled to all the benefits of a regular employee from June 9, 1993 the day of her actual reinstatement.

A regular employee is (1) one who is either engaged to perform activities that are necessary or desirable in the usual trade or business of the employer or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed.

ABS-CBN vs. Nazareno

(503 SCRA 204) 2006

Facts: ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station, with a monthly compensation ofP4,000. They were issued ABS-CBN employees identification cards and were required to work for a minimum of eight hours a day, including Sundays and holidays.They were made to: a)Prepare, arrange airing of commercial broadcasting based on the daily operations log and digicart of respondent ABS-CBN; b) Coordinate, arrange personalities for air interviews; c)Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or incoming reports; d)Facilitate, prepare and arrange airtime schedule for public service announcement and complaints; e)Assist, anchor program interview, etc; and f)Record, log clerical reports, man based control radio.Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from Dec 11, 1996toDec 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining unit, respondents were not included to the CBA.

Due to a memorandum assigning PAs to non-drama programs, and that the DYAB studio operations would be handled by the studio technician. There was a revision of the schedule and assignments and that respondent Gerzon was assigned as the full-time PA of the TV News Department reporting directly to Leo Lastimosa.

OnOct 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13thMonth Pay with Damages against the petitioner before the NLRC.

Issue: WON the respondents are regular employees?

Held: Respondents are considered regular employees of ABS-CBN and are entitled to the benefits granted to all regular employees.

Where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists. The reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. Article 280 of the Labor Code provides:

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 services to be performed is seasonal in nature and the employment is for the duration of the season.

Any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity performed and while such activity actually exists. The fact that respondents received pre-agreed talent fees instead of salaries, that they did not observe the required office hours, and that they were permitted to join other productions during their free time are not conclusive of the nature of their employment. They are regular employees who perform several different duties under the control and direction of ABS-CBN executives and supervisors.

There are two kinds of regular employees under the law:(1) those engaged to perform activities which arenecessary or desirablein the usual business or trade of the employer; and (2) those casual employees who haverendered at least one year of service, whether continuousor broken, with respect to the activities in which they are employed.

What determines whether a certain employment is regular or otherwise is the character of the activities performed in relation to the particular tradeor business taking into account all the circumstances, and in some cases the length of time of its performance and its continued existence.

While length of time may not be a sole controlling interest for project employment, it can be a strong factor to determine whether the employees was hired for a specific undertaking or in face tasked to peform functions which are vital, necessary and indispensable to the usual trade or business of employer.

The employer-employee relationship between petitioner and respondents has been proven by the ff:

First.In the selection and engagement of respondents, no peculiar or unique skill, talent or celebrity status was required from them because they were merely hired through petitioners personnel department just like any ordinary employee.

Second.The so-called talent fees of respondents correspond to wages given as a result of an employer-employee relationship. Respondents did not have the power to bargain for huge talent fees, a circumstance negating independent contractual relationship.

Third.Petitioner could always discharge respondents should it find their work unsatisfactory, and respondents are highly dependent on the petitioner for continued work.

Fourth.The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation that respondents are independent contractors.

The presumption is that when the work done is an integral part of the regular business of