TIRAZONA V. PHIL EDS TECHNO-SERVICE INC G.R. NO 169712 (2009)

FACTS: Tirazona worked as administrative manager of PET. After PET officers/directors called her attention to her improper handling of a situation involving a rank-and-file employee, she claimed that she was denied due process for which she demanded indemnity from PET.1. SC denied her claims for illegal termination on the account her arrogance, hostility and uncompromising attitude justify the companys decision to terminate her employement2. Tirazona filed a MR citing that SC failed to consider the length of her service to PET in affirming her termination from employment. She prayed that her dismissal be declared illegal. Should Sc uphold the legality of her dismissal, Tirazona pleaded she be awarded separation pay and retirement benefits out of humanitarian considerations

ISSUE: WON THE PETITIONER IS ENTITLED TO SEPARATION PAY AND RETIREMENT BENEFITS

HELD: No, as a general rule an employee who has been dismissed for any of the just causes enumerated under Art 282 Labor Code is not entitled to separation pay. Separation pay shall only allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be [a] refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.

SALINAS V NLRC 319 SCRA 54 (1999)

FACTS: Petitioners were employed with Atlantic Gulf and Pacific Co. (AG & P): Salinas: 1983-1988 as carpenter/finishing carpenter; Alejandro: 1982-1989 as bulk cement operator, bulk cement plant/carrier operator & crane driver; Cortez: 1979-1988 as carpenter/forklift operator and; Samulde: 1982-1989 as lubeman/stationary operator1. Complaints (separate but consolidated by the LA): illegal dismissal2. Petitioners Claim: They had been covered by a number of contracts renewed continuously, with periods ranging from five (5) to nine (9) years, and they performed the same kind of work through out their employment, and such was usually necessary and desirable in the trade or business of the respondent corporation; and their work did not end on a project-to-project basis, although the contrary was made to appear by the employer through the signing of separate employment contracts.3. LA: Dismissed petitions on the ground that the petitioners are project employees are project employees whose work contracts with AG & P indicate that they were employed in such category; that they have been assigned to different work projects, not just to one and that their work relation with AG & P, relative to termination, is governed by Policy Instruction No. 20 (rule governing project employees).4. Appeal to NLRC: Affirmed LAs findings

ISSUES: WON the petitioners are project employees

HELD: No, the petitioners are regular employees. he mandate in Art 281 Labor Code, which pertinently prescribes that 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' and 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,' should apply in the case of petitioner.

Failure to report the termination to Public Employment Office is a clear indication that petitioners were not and are not project employees. (PI No. 20 requires reports of terminations)

It is basic and irrefragable rule that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. The interpretation herein made gives meaning and substance to the liberal and compassionate spirit of the law enunciated in Article 4 of Labor Code that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor".It is beyond cavil that petitioners had been providing the respondent corporation with continuous and uninterrupted services, except for a day or so gap in their successive employment contracts. Their contracts had been renewed several times, with the total length of their services ranging from five (5) to nine (9) years. Throughout the duration of their contracts, they had been performing the same kinds of work (e.g., as lubeman, bulk cement operator and carpenter), which were usually necessary and desirable in the construction business of AG & P, its usual trade or business.

Undoubtedly, periods in the present case have been imposed to preclude the acquisition of tenurial security by petitioners, and must be struck down for being contrary to public policy, morals, good customs or public order.

LEDESMA JR V. NLRC 537 SCRA 358 (2007)

FACTS: Petitioner Ledesma was employed as a bus/service driver by the private respondent Phil National Training Institute (PNTI) on probationary basis. As such he was required to report at private respondents training site in Dasmarinas, Cavite under the direct supervision of its site administrator, Pablo Manolo de Leon1. Petitioner filed a complaint against de Leon for allegedly abusing his authority as site administrator by using PNTIs vehicles and other facilities for personal ends. Ledesma also accused de Leon of immoral conduct allegedly carried out within PNTIs premises.2. De Leon filed a written report against petitioner citing his suspected drug use. As such the HR manager served a notice to explain to petitioner for violating the companys code of conduct.3. Subsequently, petitioner filed a complaint for illegal dismissal before LA, alleging that the report regarding his suspected drug use was means of retaliation against him. Petitioner also averred that he was barred from entering the work place when he reported to work after undergoing a drug test which he personally requested4. Private respondent, on the other hand, countered that petitioner was never dismissed from employed but was merely served a notice to explain in view of his suspected drug use. But instead of filing an answer to the said notice, petitioner prematurely lodged a complaint for illegal dismissal against PNTI5. LA held in favor of petitioner, declaring his dismissal as illegal. However NLRC reversed LA decision citing that petitioner failed to establish the fact of dismissal for his claims

ISSUE: WON PETITONER WAS ILLEGALLY DISMISSED

HELD: No, in the present case there is hardly any evidence on record so as to meet the quantum of evidence required. Petitioners claim of illegal dismissal is supported by no other than his own bare, uncorroborated and self-serving allegations, which are incoherent and inconsistent.

While SC is not unmindful of the rule that in cases of illegal dismissal, the employer bears the burden of proof to prove that the termination was for a valid or authorized cause in the case at bar, however, the facts and the evidence did not establish a prima facie case that the petitioner was dismissed from employment. Before the private respondent must bear the burden of proving that the dismissal was legal, petitioner must first establish by substantial evidence the fact of his dismissal from service. Logically, if there is no dismissal, then there can be no question as to the legality or illegality thereof.

In earlier cases, the SC held that the burden of proving allegations rest upon the party alleging, to wit:1. The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners2. It is a basic rule in evidence, however, that the burden of proof is on the part of the party who makes the allegations ei incumbit probatio, qui dicit, non qui negat. If he claims a right granted by law, he must prove his claim by competent evidence, relying on the strength of his own evidence and not upon the weakness of that of his opponent

It is true that the Constitution affords full protection to labor, and that in light of this Constitutional mandate, we must be vigilant in striking down any attempt of the management to exploit or oppress the working class. However, it does not mean that we are bound to uphold the working class in every labor dispute brought before this Court for our resolution.

The law in protecting the rights of the employees, authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scales of justice in favor of labor, it is in recognition of the inherent economic inequality between labor and management. The intent is to balance the scales of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est -- justice is to be denied to none.

ANGELES CONSTRUCTION V. NLRC 305 SCRA 734 (1999)

FACTS: Private respondent Pedro Santos was employed in 1969 as a carpenter, by the petitioner JV Angeles Construction Corp. In 1973, he was promoted to a position of foreman which he held until his retirement in February 1992 when he was 62 years old1. Santos filed a complaint for retirement benefits and service incentive leave pay. LA held in favor of petitioner 2. Petitioner filed an appeal before NLRC, assailing that the said ruling of LA granting retirement benefits to Santos, by giving RA 7641 (Retirement Pay Law) a retroactive application although Santos had retired almost a year prior to the effectivity of said law in January 7, 1993. Petitioner cited the case of Llora Motors v. Drilon where the SC held that in the absence of a CBA or other employment contract, there is no obligation on the part of the employer to set up a retirement scheme over and above that already established under existing laws. Since Santos has been receiving his retirement benefits from SSS, he cannot anymore ask for additional benefits from his employer in the absence of company practice, policy or contract granting such benefits3. NLRC upheld LA decision citing Oro Enterprises v. NLRC

ISSUE: WON RA 7641 CAN BE RETROACTIVELY APPLIED IN THIS CASE

HELD: No. In Oro Enterprises, Inc. v. NLRC, the court held that R.A. 7641 can be applied retroactively, rationalizing thus: "R.A. 7641 is undoubtedly, a social legislation. The law has been enacted as a labor protection measure and as a curative statue that - absent a retirement plan devised by, an agreement with, or a voluntary grant from an employer can respond, in part at least to the financial well-being of workers during their twilight years soon following their life of labor. There should be little doubt about the fact that the law can apply to labor contracts still existing at the time the statute has taken effect, and that its benefits can be reckoned not only from the date of the laws enactment but retroactively to the time said employment contracts have started.

CJC Trading Inc. v. NLRC, enumerated the circumstances which must occur before the law could be given retroactive effect, to wit: (1) the claimant for retirement benefits was still the employee of the employer at the time the statute took effect; and (2) the claimant has complied with the requirements for eligibility under the statute for such retirement benefits.

In the case under scrutiny, private respondent Santos retired and ceased to be an employee of petitioner on February 1992, eleven (11) months before the effectivity of R.A. 7641, and he brought his complaint on October 23, 1993, nine (9) months after the laws effectivity. It is thus decisively clear that the provisions of R.A. 7641 could not be given retroactive effect in his favor. Consequently, the NLRC erred in upholding the Labor Arbiters award of retirement benefits to private respondent.

ROSARIO BROS V. OPLE 131 SCRA 72 (1984)

FACTS: Private respondents are tailors, pressers, stitchers and similar workers hired by the petitioner in its tailoring department (Modes Suburbia). Some had worked there since 1969 until their separation in January 1978. 1. For their services, they were paid weekly wages on piece-work basis, minus the withholding tax. Further, they were registered with SSS as employees of petitioner and premiums were deducted from their, wages; they were also members of the Avenida-Cubao Manila COD Department Store Labor Union which has a CBA with the company and; they were required to report for work from Monday to Saturday and to stay in the tailoring shop for no less than 8 hours a day, unless no job order was given them after waiting for 2-3 hours. Their attendance was recorded through a bundy clock just like other employees of petitioner. A master cutter distributes job orders equally, supervises the work and sees to it that they were finished as a soon as possible2. Subsequently, private respondents filed a complaint for violation of PD 851 (13th month pay) and PD 525 (Emergency living allowance) against petitioner 3. LA rendered in favor of petitioner, citing that private respondents are not employees of the petitioner within the meaning of Art 267(b) Labor Code. NLRC reversed the same

ISSUE: WON THERE IS AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN PETITIONER AND PRIVATE RESPONDENTS

HELD: Yes, As held in Mafinco Trading Corporation vs. Ople, 70 SCRA 139, the existence of employer-employee relationship is determined by the following elements, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control employees' conduct although the latter is the most important element. On the other hand, an independent contractor is one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subjected to control of his employer except as to the result of his work.1. In the case at bar, as found by the public respondent, the selection and hiring of private respondents were done by the petitioner, through the master cutter of its tailoring department who was a regular employee. The procedure was modified when the employment of personnel in the tailoring department was made by the management itself after the applicants' qualifications had been passed upon by a committee of four. Later, further approval by the Personnel Department was required.2. Private respondents received their weekly wages from petitioner on piece-work basis which is within the scope and meaning of the term "wage" as defined under Article 97(f) Labor Code3. Petitioner had the power to dismiss private respondents, as shown by the various memoranda issued for strict compliance by private respondents, violations of which, in extreme cases, are grounds for outright dismissal. In fact, they were dismissed on January 2, 1978, although, the dismissal was declared illegal by LA.4. Private respondents' conduct in the performance of their work was controlled by petitioner, such as: (1) they were required to work from Monday through Saturday; (2) they worked on job orders without waiting for the deadline; (3) they were to observe cleanliness in their place of work and were not allowed to bring out tailoring shop patterns; and (4) they were subject to quality control by petitioner. 5. Private respondents were allowed to register with the Social Security System (SSS) as employees of petitioner and premiums were deducted from their wages just like its other employees. And, withholding taxes were also deducted from their wages for transmittal to the Bureau of Internal Revenue (BIR).Well-established is the principle that "findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor cases do not go so far as to evaluate the sufficiency of the evidence upon which the Deputy Minister and the Regional Director based their determinations but are limited to issues of jurisdiction or grave abuse of discretion." In the case at bar, the questioned decision and order of execution of public respondents are not tainted with unfairness or arbitrariness that would amount to abuse of discretion or lack of jurisdiction and, therefore, this Court finds no necessity to disturb, much less, reverse the same.

ZANOTTE SHOES V. NLRC 241 SCRA 261 (1961)

FACTS: Private respondents filed a complaint for illegal dismissal and various money claims against petitioners. 1. They alleged that they worked for a minimum of 12 hours daily, including Sundays and holidays when needed; they were paid on piece-work basis2. They also alleged that it angered petitioner when they requested to be made members of SSS and when they demanded an increase in their pay rates, they were prevented from entering the work premises3. Petitioners, on the other hand, claimed that their business operations were only seasonal, normally twice a year (one in June and another in December), when heavy job orders would come in. According to petitioners, private respondents were engaged on purely contractual basis4. LA rendered in favor of complainants, citing that there was an employer-employee relationship that existed between the two. NLRC affirmed the same

ISSUE: WON THERE EXISTS AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN PETITIONER AND PRIVATE RESPONDENTS

HELD: Yes. The work of private respondents is clearly related to, and in the pursuit of, the principal business activity of petitioners. The indicia used for determining the existence of an employer-employee relationship, all extant in the case at bench, include (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the result of the work to be done and to the means and methods by which the work to be done and to the means and methods by which the work is to be accomplished. The requirement, so herein posed as an issue, refers to the existence of the right to control and not necessarily to the actual exercise of the right.

While this Court up holds the control test under which an employer-employee relationship exists "where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end," it finds no merit with petitioner's arguments as stated above. It should be borne in mind that the control test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right.

DEALCO FARMS V. NLRC G.R. NO 153192 (2009)

FACTS: Petitioner 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 goods manufacturers and other dealers in Mindanao and Metro Manila1. Private respondents were hired by petitioner 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. 2. Upon arrival to Manila, the cattle are turned over to and received by 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 P1500. The 12-day period is occasionally extended when petitioners customers were delayed in receiving the cattle. 3. Private respondents filed a complaint for illegal dismissal with claims for separation pay with full back wages, salary differentials, service incentive leave pay, 13th month pay etc.4. Respondents alleged that: 1. They were illegally dismissed, as they never violated any of petitioners company rules and policies; 2. Their dismissal was not due to any just or authorized cause and; 3. petitioner did not observe due process in effecting their dismissal, failing to give them written notice thereof 5. Petitioner, however, asserted that the finished cattle are sold to traders and middlemen who undertake transportation thereof to Manila. Buyers themselves arrange, through local representatives, for the hauling from petitioners farm to the port area, shipment of the finished cattle to Manila and; escort or comboy services to feed and water the cattle during transit. There was only once instance when it engaged the services of respondents as comboys which was only on a per-trip or per-contract basis6. Petitioner posited that respondents are independent contractors who offer comboy services to various shippers and traders of cattle, not only to petitioner; in the performance of work on board the ship, respondents are free from the control and supervision of the cattle since the latter is interested only in the result thereof; in the alternative, respondents can only be considered as casual employees performing work not necessary and desirable to the usual business of petitioner; respondents likewise failed to complete the one-year service period, whether continuous or broken, set forth in Art 280 Labor Code as petitioners shipments were substantially reduced in 1988-89, thereby limiting the escort activity for which respondents were employed7. LA found that private respondents were employees of Dealco Farms since all the four elements in the determination of an employer-employee relationship were present in the instant case. NLRC affirmed the same

ISSUE: WON PRIVATE RESPONDENTS ARE EMPLOYEES OF DEALCO FARMS

HELD: Yes, the presence of the 4 elements in the determination of 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 cattle from General Santos City to Manila with compensation of P1500 per trip. 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. Having failed to substantiate its allegation on the relationship between the parties, we stick to the settled rule in controversies between a laborer and his master that doubts reasonably arising from the evidence should be resolved in the formers favor. The policy is reflected in no less than the Constitution, Labor Code and Civil Code.

METEORO ET AL V. CREATIVE CREATURES G.R. NO 171275 (2009)

FACTS: Respondent Creative Creatures Inc is a corporation engaged in the business of producing, providing, or procuring the production of set designs and set construction services for TV exhibitions, concerts, theatrical performances, motion pictures and the like. It primarily caters to the production design requirements of ABS-CBN in Metro Manila and nationwide.1. On the other hand, petitioners were hired by respondent on various dates as artists, carpenters and welders. They were tasked to design, create, assemble, set up and dismantle props, and provide sound effects to respondents various TV programs and movies2. Petitioners filed a complaint for nonpayment of night shift differential pay, overtime pay, holiday pay, 13th month pay, premium pay for Sundays and/or rest days, service incentive leave pay, paternity leave pay, educational assistance, rice benefits, and illegal/unauthorized deductions from salaries 3. Respondent claimed that petitioners were contractual employees and/or independent talent workers and that DOLE had no jurisdiction over the complaint because of the absence of an employer-employee relationship4. DOLE held in favor petitioners, citing that the four elements in determination an employer-emmployee relationship were present in the instant case5. CA reversed the decision and held in favor of respondent Creative Creatures based on the exception provided in Art 128 Labor Code

ISSUE: WON DOLE HAS JURISDICTION OVER THE INSTANT CASE

HELD: No, The last sentence of Article 128 (b) of the Labor Code, otherwise known as the exception clause, provides an instance when the Regional Director or his representatives may be divested of jurisdiction over a labor standards case.

Under prevailing jurisprudence, the so-called exception clause has the following elements, all of which must concur: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon;(b) that in order to resolve such issues, there is a need to examine evidentiary matters; and(c) that such matters are not verifiable in the normal course of inspection. In the present case, the CA aptly applied the exception clause. At the earliest opportunity, respondent registered its objection to the findings of the labor inspector. The labor inspector, in fact, noted in its report that respondent alleged that petitioners were contractual workers and/or independent and talent workers without control or supervision and also supplied with tools and apparatus pertaining to their job. In its position paper, respondent again insisted that petitioners were not its employees. It then questioned the Regional Directors jurisdiction to entertain the matter before it, primarily because of the absence of an employer-employee relationship. Finally, it raised the same arguments before the Secretary of Labor and the appellate court. It is, therefore, clear that respondent contested and continues to contest the findings and conclusions of the labor inspector.

Thus, in addition to the above-mentioned documents, other pieces of evidence are considered in ascertaining the true nature of the parties relationship. This is especially true in determining the element of control. The most important index of an employer-employee relationship is the so-called control test, that is, whether the employer controls or has reserved the right to control the employee, not only as to the result of the work to be done, but also as to the means and methods by which the same is to be accomplished.

In the case at bar, whether or not petitioners were independent contractors/project employees/free lance workers is a question of fact that necessitates the examination of evidentiary matters not verifiable in the normal course of inspection. Indeed, the contracts of independent services, as well as the check vouchers, were kept and maintained in or about the premises of the workplace and were, therefore, verifiable in the course of inspection. However, respondent likewise claimed that petitioners were not precluded from working outside the service contracts they had entered into with it (respondent); and that there were instances when petitioners abandoned their service contracts with the respondent, because they had to work on another project with a different company.

DOMONDON V. NLRC 471 SCRA 559 (2005)

FACTS: Domondon filed a complaint against private respondent Van Melle Phils Inc (VMPI), claiming illegal dismissal and thus prayed for reinstatement, payment of full back wages inclusive of allowances, 14th month pay, sick and vacation leaves, share in the profits etc.1. Petitioner alleged that VMPI hired him as a materials manager through the companys president and GM Victor Endaya. He was given a guaranteed monthly salary of P98,000 for 14 months with annual merit adjustment, profit sharing bonus from 0-2 months based on individual, company and corporate performance and a brand new car with gas allowance2. Petitioner averred that Have as the new president of VMPI requested his courtesy resignation and when he refused, life got difficult for him. His decisions were always questioned Have and was also subjected to verbal abuse3. On their part, private respondents admitted hiring petitioner but denied illegally dismissing him. According to the private respondents, Domondon informed them about his intention to resign and requested a soft land financial support for P300,000. Petitioner also proposed the transfer of ownership of the car assigned to him in lieu of the financial assistance from the company. Since company policy prohibits disposition of assets without valuable consideration, the parties agreed that petitioner shall pay for the car with the soft landing financial assistance from VMPI4. VMPI alleged that when petitioner received the P300,000, he did not use it to pay for the car as agreed upon. Repeated demands for payment were unheeded. VMPI, then, gave petitioner an option to apply his sick and vacation leave credits, 13th and 14th month pay less taxes and pay the balance thereof, or return the car to the company. Petitioner did not exercise either option and instead filed a complaint for illegal dismissal5. LA held in favor of VMPI and dismissed the case for lack of merit. NLRC affirmed the same

ISSUE: WON THE TRANSFER OF OWNERSHIP OF TH SAID CAR IS WITHIN THE JURISDICTION OF NLRC

HELD: The jurisdiction of Labor Arbiters is provided under Article 217(a) of the Labor Code, as amended: (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:1. Unfair labor practice cases;2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts;6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

In all these instances, the matrix is the existence of an employer-employee relationship. In the case at bar, there is no dispute that petitioner is an employee of the respondents.

In the case at bar, petitioner claims illegal dismissal and prays for reinstatement, payment of full back wages inclusive of allowances, 14th month pay, sick and vacation leaves, share in the profits, moral and exemplary damages and attorneys fees. These causes of action clearly fall within the jurisdiction of LA, specifically under paragraphs 2, 3 and 4 of Article 217(a). On the other hand, private respondents made a counterclaim involving the transfer of ownership of a company car to petitioner. They maintain that he failed to pay for the car in accordance with their agreement.

Based on the facts presented, the transfer of the ownership of the company car to petitioner is connected with his resignation and arose out of the parties employer-employee relations. Accordingly, private respondents claim for damages falls within the jurisdiction of the Labor Arbiter.

EVIOTA V. CA 407 SCRA 394 (2003)

FACTS: Respondent Standard Chartered Bank and petitioner Eviota executed a contract of employment where the latter was employed as compensation and benefits manager. However, petitioner abruptly resigned from the respondent bank barely a month after his employment and rejoined his former employer1. The bank alleged that Eviota made off with a files and other documents containing confidential information on employee compensation and other bank matters 2. Petitioner filed a motion to dismiss on the ground that the action for damages was within the exclusive jurisdiction of LA under par 4 Art 217 Labor Code. Petitioner alleged that the banks claim for damages arose out of or were in connection with his employer-employee relationship with the respondent bank3. Trial court denied petitioners motion to dismiss citing that the relief prayed for by Standard Chartered Bank was ground on the tortious manner by which petitioner terminated his employment with the latter, and as such is governed by NCC. CA affirmed the same

ISSUE: WON THE LA HAS JURISDICTION OVER THE CASE

HELD: Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. A money claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter only if there is a reasonable causal connection between the claim asserted and employee-employer relation. Absent such a link, the complaint will be cognizable by the regular courts of justice.

Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. In Georg Grotjahn GMBH & Co. v. Isnani, we held that the jurisdiction of the Labor Arbiter under Article 217 of the Labor Code, as amended, is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code of the Philippines, other labor laws or their collective bargaining agreements.

The claims were the natural consequences flowing from a breach of an obligation, intrinsically civil in nature.

In this case, the private respondents first cause of action for damages is anchored on the petitioners employment of deceit and of making the private respondent believe that he would fulfill his obligation under the employment contract with assiduousness and earnestness. The petitioner volte face when, without the requisite thirty-day notice under the contract and the Labor Code of the Philippines, as amended, he abandoned his office and rejoined his former employer; thus, forcing the private respondent to hire a replacement. The private respondent was left in a lurch, and its corporate plans and program in jeopardy and disarray. Moreover, the petitioner took off with the private respondents computer diskette, papers and documents containing confidential information on employee compensation and other bank matters. On its second cause of action, the petitioner simply walked away from his employment with the private respondent sans any written notice, to the prejudice of the private respondent, its banking operations and the conduct of its business. Anent its third cause of action, the petitioner made false and derogatory statements that the private respondent reneged on its obligations under their contract of employment; thus, depicting the private respondent as unworthy of trust.

It is evident that the causes of action of the private respondent against the petitioner do not involve the provisions of the Labor Code of the Philippines and other labor laws but the New Civil Code. Thus, the said causes of action are intrinsically civil. There is no causal relationship between the causes of action of the private respondents causes of action against the petitioner and their employer-employee relationship. The fact that the private respondent was the erstwhile employer of the petitioner under an existing employment contract before the latter abandoned his employment is merely incidental.

ALVIADO ET AL V. PROCTER & GAMBLE AND PROMM-GEM INC G.R. NO 160506 (2010)

FACTS: Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early as 1982 or as late as June 1991 to either May 1992 or March 1993.1. Petitioners filed a complaint against P&G for regularization, service incentive leave pay and other benefits; the complaint was later amended to include illegal dismissal2. LA dismissed the complaint for lack of merit and ruled that there was no employer-employee relationship between petitioners and P&G as the selection and engagement of petitioners, payment of wages, power of dismissal and control with respect to the means and methods by which their work was accomplished, were all done and exercised by Promm-Gem Inc. Promm-Gem Inc was a legitimate independent job contractor. NLRC affirmed the same3. Petitioners claimed they were recruited by the salesmen of P&G and were engaged to undertaking merchandising chores for P&G even before the existence of Promm-Gem. Petitioners also alleged that P&G instigated their dismissal from work. Petitioners further assert that Promm-Gem are labor-only contractors providing services of manpower to their client4. P&G, on the other hand, argued that there is no employment relationship between them and petitioners. P&G also contends that Labor Code neither defines nor limits which services or activities may be validly outsourced. Thus, an employer can farm out any of its activities to an independent contractor, regardless of whether such activity is peripheral or core in nature. It insisted that the determination of whether to engage the services of a job contractor or to engage in direct hiring is within the ambit of management prerogative

ISSUE: WON P&G IS THE EMPLOYER OF PETITIONERS

HELD: In order to resolve the issue of whether P&G is the employer of petitioners, it is necessary to first determine whether Promm-Gem and SAPS are labor-only contractors or legitimate job contractors.

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

Clearly, the law and its implementing rules allow contracting arrangements for the performance of specific jobs, works or services. Indeed, it is management prerogative to farm out any of its activities, regardless of whether such activity is peripheral or core in nature. However, in order for such outsourcing to be valid, it must be made to an independent contractor because the current labor rules expressly prohibit labor-only contracting.

To emphasize, there is labor-only contracting when the contractor or sub-contractor merely recruits, supplies or places workers to perform a job, work or service for a principal and any of the following elements are present:

i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; orii) The contractor does not exercise the right to control over the performance of the work of the contractual employee. Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We find that it is a legitimate independent contractor.

Where labor-only contracting exists, the Labor Code itself establishes an employer-employee relationship between the employer and the employees of the labor-only contractor." The statute establishes this relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer.

CABALAN (CAPANELA) V. NLRC 241 SCRA 643 (1995)

FACTS: Private respondent Fernando Sanchez filed a complaint for illegal dismissal, nonpayment of back wages and other benefits against petitioner CAPANELA1. Private respondent alleged that there existed an employer-employee relationship between him and CAPANELA and that the latter exercised control as employer over the means and methods by which the work was accomplished2. Petitioners asserted that CAPANELA is an association composed of Negritos who worked inside the American naval base in Subic Bay. Said association organized the system of employment of members of this cultural community who were accorded special treatment because of the occupancy of their ancestral lands as part of the operational area and military facility used by the Base authorities3. CAPANELA alleged that neither the association nor its president was the employer of private respondent; rather, it was the US government acting through military base authorities4. LA held in favor of private respondent in declaring his dismissal illegal

ISSUE: WON PETITIONER IS A LABOR-ONLY CONTRACTOR

HELD: Neither can petitioners be deemed to have been engaged in permissible job contracting under the law, for failure to satisfy the following prescribed conditions:

1. The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with performance of the work except as to the results thereof; and2. The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials which are necessary in the conduct of his business.

In the present case, the setup was such that CAPANELA was merely tasked with organizing the Negritos to facilitate the orderly administration of work made available to them at the base facilities, that is, sorting scraps for recycling. CAPANELA recorded the attendance of its members and submitted the same to the Base authorities for the determination of wages due them and the preparation of the payroll. Payment of wages was coursed through CAPANELA but the funds therefor came from the coffers of the Base. Once inside the Base, control over the means and methods of work was exercised by the Base authorities. Accordingly, CAPANELA functioned as just an administrator of its Negrito members employed at the Base.From the legal standpoint, CAPANELA's activities may at most be considered akin to that of labor-only contracting, albeit of a special or peculiar type, wherein CAPANELA, operating like a contractor, merely acted as an agent or intermediary of the employer.

ESCASINAS V. SHANGRI-LA MACTAN G.R. NO 178827 (2009)

FACTS: Petitioners Escasinas and Songco were engaged in 1999 and 1996 by Dr Jessica Pepito to work in her clinic at respondent Shangri-La Mactan resort, where the latter was a retained physician1. Petitioners filed a complaint for regularization, underpayment of wages, nonpayment of holiday pay, night shift differential and 13th month pay differential against respondents, claiming that they are regular employees of Shangri-La2. Shangri-La claimed, however, that petitioners are not its employees but of the respondent doctor via MOA pursuant to Art 157 Labor Code3. Respondent doctor, on the other hand, claimed that petitioners were already working for the previous retained physicians of Shangri-La before she was retained by the resort and that she maintained petitioners services upon their request4. LA declared petitioners to be regular employees of Shangr-La as they usually perform work which is necessary and desirable to the resort and that 4 elements which determine employment relationship are present5. NLRC reversed the LA decision and dismissed the petitioners complaint for lack of merit, finding that there was no employer-employee relationship between petitioner and Shangri-La. CA affirmed the same6. Petitioners insisted that under Art 157 Labor Code, Shangri-La is required to hire a full-time registered nurse, apart from a physician, hence, their engagement should be deemed as regular employment and that MOA signed by Pepito and Shangri-La is contrary to public policy as it circumvents tenurial security. At most, the MOA is a mere job contract7. Petitioners further averred that respondent doctor is a labor-only contractor for she has no license or business permit which is contrary to the requirements under Sec 19-20 of IRR of the Labor Code on subcontracting. Petitioners also contended that respondent doctor cannot be a legitimate independent contractor as she lacks the substantial capital and that she has no control over how the clinic is being run

ISSUE: WON RESPONDENT DOCTOR IS A LABOR-ONLY CONTRACTOR

HELD: The existence of an independent and permissible contractor relationship is generally established by considering the following determinants: whether the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools, appliances, materials and labor; and the mode, manner and terms of payment.

On the other hand, existence of an employer- employee relationship is established by the presence of the following determinants: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker's conduct, with the latter assuming primacy in the overall consideration.

Against the above-listed determinants, the respondent doctor is a legitimate independent contractor. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests, does not necessarily prove that respondent doctor lacks substantial capital and investment. Besides, the maintenance of a clinic and provision of medical services to its employees is required under Art 157, are not directly related to Shangri-las principal businessoperation of hotels and restaurants.

Since Shangri-la does not control how the work should be performed by petitioners, it is not petitioners employer.

BABAS V. LORENZO SHIPPING CORP G.R. NO 186091 (2010)

FACTS: Respondent Lorenzo Shipping Corp (LSC) entered into an agreement with Best Manpower Services Inc (BMSI) to provide maintenance and repair services to LSCs container vans, heavy equipment, trailer chassis, etc. BMSI further undertook to provide checkers to inspect all containers received for loading to and/or unloading from its vessels1. Simultaneous with the agreement, LSC leased its equipment, tools and tractors to BMSI, said lease was coterminous with the agreement2. BMSI, then, hired petitioners to work at LSC as checkers, welders, utility men etc3. Subsequently, petitioners filed a complaint for regularization against LSC and BMSI. But when LSC terminated its agreement with BMSI, petitioners lost their employment4. BMSI asserted that it is an independent contractor. It averred that it was willing to regularize petitioners; however, some of them lacked the requisite qualifications for the job. BMSI was willing to reassign petitioners who were willing to accept reassignment. BMSI denied petitioners claim for underpayment of wages and non-payment of 13th month pay and other benefits.5. LSC, on the other hand, averred that petitioners were employees of BMSI and were assigned to LSC by virtue of the Agreement. BMSI is an independent job contractor with substantial capital or investment in the form of tools, equipment, and machinery necessary in the conduct of its business. The Agreement between LSC and BMSI constituted legitimate job contracting. Thus, petitioners were employees of BMSI and not of LSC. 6. LA dismissed petitioners complaint citing that the latter were employees of BMSI7. NLRC reversed the decision on the ground that based on the agreement, BMSI was not engaged in legitimate job contracting but was a labor-only contractor8. CA ruled that BMSI was an independent job contractor based on the provisions of the agreement

ISSUE: WON BMSI IS ENAGAGED IN LABOR-ONLY CONTRACTING

HELD: Thus, in distinguishing between prohibited labor-only contracting and permissible job contracting, the totality of the facts and the surrounding circumstances of the case are to be considered.

Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal. In labor-only contracting, the following elements are present: (a) the contractor or subcontractor does not have substantial capital or investment to actually perform the job, work, or service under its own account and responsibility; and (b) the employees recruited, supplied, or placed by such contractor or subcontractor perform activities which are directly related to the main business of the principal.

On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with the contractor or subcontractor the performance or completion of a specific job, work, or service within a definite or predetermined period, regardless of whether such job, work, or service is to be performed or completed within or outside the premises of the principal.

A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:

(a) The contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of his work except as to the results thereof; (b) The contractor has substantial capital or investment; and (c) The agreement between the principal and the contractor or subcontractor assures the contractual employees' entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social welfare benefits. Given the above standards, we sustain the petitioners contention that BMSI is engaged in labor-only contracting.

JOSE SONZA V. ABS-CBN G.R. NO 138051 (2004)

FACTS: ABS-CBN signed an agreement with Mel and Jay Management and Devt Corp (MJMDC) that petitioner Sonza would co-host for Mel & Jay (radio and TV program). ABS-CBN agreed to pay for Sonzas services a monthly talent fee1. Subsequently, Sonza resigned as co-host of the said programs. He then filed a complaint against ABS-CBN for nonpayment of salary, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amount due under Employees Stock Option Plan (ESOP)2. ABS-CBN filed a motion to dismiss on the ground that no employer-employee relationship existed between the parties3. LA dismissed the complaint for lack of jurisdiction, finding that unlike an ordinary employee, Sonza was free to perform the services he undertook to render in accordance with his own style. NLRC and CA affirmed the same

ISSUE: WON SONZA IS AN EMPLOYEE OF RESPONDENT ABS-CBN

HELD: Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of Sonza, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If Sonza did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered into the Agreement with Sonza but would have hired him through its personnel department just like any other employee.

In any event, the method of selecting and engaging Sonza does not conclusively determine his status. We must consider all the circumstances of the relationship, with the control test being the most important element. Moreover, during the life of the Agreement, ABS-CBN agreed to pay Sonzas talent fees as long as "AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement." Even if it suffered severe business losses, ABS-CBN could not retrench Sonza because ABS-CBN remained obligated to pay Sonzas talent fees during the life of the Agreement. This circumstance indicates an independent contractual relationship between SONZA and ABS-CBN.

Applying the control test to the present case, Sonza is not an employee but an independent contractor. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort "in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time." Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity, as in the present case.

In a labor-only contract, there are three parties involved: (1) the "labor-only" contractor; (2) the employee who is ostensibly under the employ of the "labor-only" contractor; and (3) the principal who is deemed the real employer. Under this scheme, the "labor-only" contractor is the agent of the principal. The law makes the principal responsible to the employees of the "labor-only contractor" as if the principal itself directly hired or employed the employees. These circumstances are not present in this case. As Sonza admits, MJMDC is a management company devoted exclusively to managing the careers of Sonza and his broadcast partner, Tiangco. MJMDC is not engaged in any other business, not even job contracting. MJMDC does not have any other function apart from acting as agent of Sonza or Tiangco to promote their careers in the broadcast and television industry.

INSULAR LIFE V. NLRC 179 SCRA 459 (1989)

FACTS: Insular Life Assurance Co., Ltd. and Melecio T. Basiao entered into a contract, stipulating that Basiao (1) would be an authorized agent of the Company; (2) to receive compensation in the form of commissions; and (3) the Company's Rate Book and its Agent's Manual, as well as all its circulars will be deemed part of the contract.1. The contract also expressly stipulated that there was no employer-employee relationship between the parties2. Subsequently, the parties entered into another contract; in line with this, Basiao organized an agency while concurrently fulfilling his commitments under the first contract with the company. However it was terminated. As such, Basiao soguht for a reconsideration and later sued the company in a civil action. 3. Thereafter, Basiao filed a complaint against the company and its president. The company disputed the Ministry's jurisdiction over Basiao's claim and asserted that he was not a company's employee, but an independent contractor. The company had no obligation to him for unpaid commissions under the terms and conditions of his contract. 4. LA held in favor of Basiao finding that an employer-employee relationship existed between him and Insular Life. NLRC affirmed the same5. Insular averred that the terms of the contract the company and Basiao entered into expressly conferred to Basiao an independent contractor status. The company did not have a hand in determining the time, place and means of soliciting insurance and have set no accomplishment quotas. The company only compensated him on the basis of results obtained. Further, it contends that they do not constitute the decisive determinant of the nature of his engagement, invoking precedents to the effect that the critical feature distinguishing the status of an employee from that of an independent contractor is control, that is, whether or not the party who engages the services of another has the power to control the latter's conduct in rendering such services.

ISSUES: WON BASIAO IS AN EMPLOYEE OF PETITIONER COMPANY HELD: No. The provisions of the contract which obliged Basiao to "observe and conform to all rules and regulations which the company may from time to time prescribe," as well as to the fact that the company prescribed the qualifications of applicants for insurance, processed their applications and determined the amounts of insurance cover to be issued as indicative of the control, which made Basiao, in legal contemplation, an employee of the company.

However, in Viana vs. Alejo Al-Lagadan, it was held that that not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee relationship between them in the legal or technical sense of the term. Realistically, it would be a rare contract of service that gives untrammelled freedom to the party hired and eschews any intervention whatsoever in his performance of the engagement.Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. The distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the business of insurance, and is on that account subject to regulation by the State with respect, not only to the relations between insurer and insured but also to the internal affairs of the insurance company. The Insurance Code provides the rules and regulations governing the conduct of the business and these are enforced by the Insurance Commissioner. It is expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that are in line with the law. The character of such rules (e.g. which prescribe the qualifications of persons who may be insured, determination of the premiums to be paid and the schedules of payment) does not invade the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employer-employee relationship between him and the company.The company has limited themselves to pointing out that Basiao's contract with the company bound him to observe and conform to such rules and regulations as the latter might from time to time prescribe. There has been no showing that any such rules or regulations were in fact promulgated, much less that any rules existed or were issued which effectively controlled or restricted his choice of methods or the methods themselves of selling insurance. Absent such showing, the Court will not speculate that any exceptions or qualifications were imposed on the express provision of the contract leaving Basiao "... free to exercise his own judgment as to the time, place and means of soliciting insurance."Under the contract invoked by him, Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action.

MAFINCO TRADING CORP V. OPLE 70 SCRA 139 (1976)

FACTS: Cosmos Aerated Water Factory Inc (Cosmos) appointed Mafinco as its sole distributor of Cosmos soft drinks in Manila. Subsequently, Private respondent Repomanta and Mafinco entered into a peddling contract whereby Repomanta agreed to buy and sell cosmos soft drinks. The contracts were to remain in force for one year unless terminated by either party upon five days notice to the other1. Thereafter, Mafinco terminated the contracted with Repomanta. Repomanta, then, filed a complaint charging the GM of Mafinco of having violated PD 21 which created the NLRC2. Mafinco filed a motion to dismiss on the ground that NLRC had no jurisdiction because private respondents were not its employees but were independent contractor. It also argued that there was no termination of employee, but a termination of contract3. NLRC ruled in favor of Mafinco citing that private respondents were independent contractors. DOLE secretary Ople reversed the same, finding that the complainants were driver-salesmen of the company and that they were not independent contractors because they had no capital of their own

ISSUE: WON PRIVATE RESPONDENTS WERE EMPLOYEES OF MAFINCO UNDER THE PEDDLING CONTRACT

HELD: Under their peddling contracts, Repomanta and Moralde were not employees of Mafinco but were independent contractors as found by the NLRC and its fact-finder and by the committee appointed by the Secretary of Labor to look into the status of Cosmos and Mafinco peddlers. They were distributors of Cosmos soft drinks with their own capital and employees. Ordinarily, an employee or a mere peddler does not execute a formal contract of employment. He is simply hired and he works under the direction and control of the employer.

On the other hand, an independent contractor is "one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to control of his employer except as to the result of the work."

Among the factors to be considered are whether the contractor is carrying on an independent business; whether the work is part of the employer's general business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of the work to another; the power to terminate the relationship; the existence of a contract for the performance of a specified piece of work; the control and supervision of the work; the employer's powers and duties with respect to the hiring, firing, and payment of the contractor's servants; the control of the premises; the duty to supply the premises, tools, appliances, material and labor; and the mode, manner, and terms of payment.Those tests to determine the existence of an employer-employee relationship or whether the person doing a particular work for another is an independent contractor cannot be satisfactorily applied in the instant case. It should be obvious by now that the instant case is a penumbral, sui generis case lying on the shadowy borderline that separates an employee from an independent contractor.

In determining whether the relationship is that of employer and employee or whether one is an independent contractor, "each case must be determined on its own facts and all the features of the relationship are to be considered." On the basis of the peddling contract, no employer-employee relationship was created. Hence, the old NLRC had no jurisdiction over the termination of the peddling contract.

FELIX V. BUENASEDA 240 SCRA 139 (1995)

FACTS: Petitioner Dr. Felix joined the National Center for Mental Health (NCMH) as a resident physician and after 3 years, he was promoted to Senior Resident Physician. The Ministry of Health reorganized the NCMH pursuant to E.O. 119. 1. Under the said reorganization, Felix was appointed to the position of Sr. Resident Physician in a temporary capacity.2. Felix was later promoted to the position of Medical Specialist 1 (Temporary Status) which was renewed the following year. 3. In 1988, the DOH issued Dept. Order 347, which required board certification as a prerequisite for renewal of specialist positions in various med. centers, hospitals and agencies. 4. Then Sec. of Health issued D.O. 478 (amending Sec.4 of D.O. 347) which provided for an extension of appointments of Medical Specialists in cases where termination of those who failed to meet the requirement for board certification might result in disruption of hospital services. 5. In 1991, after reviewing petitioners service record and performance, the Medical Credentials Committee of the NCMH recommended non-renewal of his appointment as Medical Specialist 1. 6. He was, however, allowed to continue in the service, and receive his salary even after being informed of the termination of his appointment. 7. The Chiefs of Service held an emergency meeting to discuss the petitioners case. In the meeting, the overall consensus among the dept. heads was for petitioners non-renewal where his poor performance, frequent tardiness and inflexibility were pointed as among the factors responsible for the recommendation not to renew his appointment.8. The matter was referred to the CSC, which ruled that the temporary appointment can be terminated any time and that any renewal of such appointment is within the discretion of the appointing authority. 9. Consequently, petitioner was advised by hospital authorities to vacate his cottage. Refusing to comply, petitioner filed a petition with the Merit System Protection Board (MSPB) complaining about the alleged non-renewal of his appointment, the MSPB, however, dismissed his complaint for lack of merit. 10. This decision was appealed to the Civil Service Commission (CSC) which dismissed the same.

ISSUE: WON PETITIONER IS AN EMPLOYEE OF RESPONDENT HOSPITAL

HELD: A residency or resident physician position in a medical specialty is never a permanent one. Residency connotes training and temporary status. It is the step taken by a physician right after post-graduate internship (and after hurdling the Medical Licensure Examinations) prior to his recognition as a specialist or sub-specialist in a given field.

A physician who desires to specialize in Cardiology takes a required three-year accredited residency in Internal Medicine (four years in DOH hospitals) and moves on to a two or three-year fellowship or residency in Cardiology before he is allowed to take the specialty examinations given by the appropriate accrediting college. In a similar manner, the accredited Psychiatrist goes through the same stepladder process which culminates in his recognition as a fellow or diplomate (or both) of the Psychiatry Specialty Board. 16 This upward movement from residency to specialist rank, institutionalized in the residency training process, guarantees minimum standards and skills and ensures that the physician claiming to be a specialist will not be set loose on the community without the basic knowledge and skills of his specialty. Because acceptance and promotion requirements are stringent, competitive, and based on merit, acceptance to a first year residency program is no guaranty that the physician will complete the program. Attribution rates are high. Some programs are pyramidal. Promotion to the next post-graduate year is based on merit and performance determined by periodic evaluations and examinations of knowledge, skills and bedside manner. Under this system, residents, specialty those in university teaching hospitals enjoy their right to security of tenure only to the extent that they periodically make the grade, making the situation quite unique as far as physicians undergoing post-graduate residencies and fellowships are concerned. While physicians (or consultants) of specialist rank are not subject to the same stringent evaluation procedures, specialty societies require continuing education as a requirement for accreditation for good standing, in addition to peer review processes based on performance, mortality and morbidity audits, feedback from residents, interns and medical students and research output. The nature of the contracts of resident physicians meet traditional tests for determining employer-employee relationships, but because the focus of residency is training, they are neither here nor there. Moreover, stringent standards and requirements for renewal of specialist-rank positions or for promotion to the next post-graduate residency year are necessary because lives are ultimately at stake.

VINOYA V. NLRC 324 SCRA 469 (2000)

FACTS: Petitioner Vinoya, the complainant, worked with RFC as sales representative until his services were terminated in 19911. Vinoya claimed he applied and was accepted by RFC. During his employ, he was assigned to various supermarkets and groceries where he booked sales orders and collected payments for RFC. After some time, he was transferred by RFC to Peninsula Manpower Co Inc (PMCI), an agency which provides RFC with additional contractual workers pursuant to a contract for the supply of manpower services2. After his transfer to PMCI, petitioner was allegedly reassigned to RFC as sales representative. Subsequently, he was informed by RFC that his services were terminated due to the expiration of contract of service between RFC and PMCI3. Private respondent RFC argued that no employer-employee relationship existed between the two parties as the petitioner was actually an employee of PMCI, allegedly an independent contractor which has a contract of service with RFC. RFC denied that petitioner was ever employed by RFC. RFC further contended that the termination of its relationship with petitioner was brought about by the expiration of the contract of service between itself and PMCI.4. LA held in favor of petitioner on the grounds that petitioner was originally with RFC and was merely transferred to PMCI, RFC had direct control and supervision over petitioner, it paid Vinoyas wages and; petitioner was terminated as per instruction of RFC5. NLRC reversed the LA decision and opined that PMCI was an independent contractor because it had substantial capital and as such, is the true employer of petitioner

ISSUE: WON PETITIONER WAS AN EMPLOYEE OF RFC OR PMCI

HELD: Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. In labor-only contracting, the following elements are present:

(a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility;(b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal.

On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:

(a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof;(b) The contractor or subcontractor has substantial capital or investment; and(c) The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits.

Previously, it was held that in order to be considered as a job contractor it is enough that a contractor has substantial capital. In other words, once substantial capital is established it is no longer necessary for the contractor to show evidence that it has investment in the form of tools, equipment, machineries, work premises, among others. The rational for this is that Article 106 of the Labor Code does not require that the contractor possess both substantial capital and investment in the form of tools, equipment, machineries, work premises, among others.

It may be inferred that it is not enough to show substantial capitalization or investment in the form of tools, equipment, machineries and work premises, among others, to be considered as an independent contractor. In fact, jurisprudential holdings are to the effect that in determining the existence of an independent contractor relationship, several factors might be considered such as, but not necessarily confined to, whether the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of specified pieces of work; the control and supervision of the workers; the power of the employer with respect to the hiring, firing and payment of the workers of the contractor; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms of payment.

Based on the foregoing, PMCI can only be classified as a labor-only contractor and, as such, cannot be considered as the employer of petitioner.

NEW GOLDEN BUILDERS & DEVT CORP V. CA 418 SCRA 411 (2003)

FACTS: Petitioner New Golden Builders entered into a construction contract with Prince David Devt Copt for the construction of a residential condominium building. Petitioner, then contracted Nilo Layno Builders to do the concrete works. Pursuant to the contract, Nilo Layno Builders hired private respondents to perform work at the project1. Private respondents filed a complaint against petitioner for unfair labor practice, nonpayment of 13th month pay, nonpayment of 5 days service incentive leave pay, illegal dismissal and severance pay2. LA held that Nilo Layno Builders was a labor-only contractor, thus private respondents were deemed employees of petitioner 3. Petitioner claimed that Nilo Layno Builders was an independent contractor4. NLRC affirmed the same but added that private respondents were illegally dismissed by petitioner

ISSUE: WON NILO LAYNO BUILDERS WAS AN INDEPENDENT CONTRACTOR AND WON THERE EXISTED AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN PETITIONER AND PRIVATE RESPONDENTS

HELD: Under Section 8, Rule VIII, Book III, of the Omnibus Rules Implementing the Labor Code, an independent contractor is one who undertakes job contracting, i.e., a person who: (a) carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (b) has substantial capital or investment in the form of tools, equipments, machineries, work premises, and other materials which are necessary in the conduct of the business. Jurisprudential holdings are to the effect that in determining the existence of an independent contractor relationship, several factors may be considered, such as, but not necessarily confined to, whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of specified pieces of work; the control and supervision of the work to another; the employers power with respect to the hiring, firing and payment of the contractors workers; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms of payment.

The test to determine the existence of independent contractorship is whether one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only to the results of the work.

This is exactly the situation obtaining in the case at bar. Nilo Layno Builders hired its own employees, the private respondents, to do specialized work in the Prince David Project of the petitioner. The means and methods adopted by the private respondents were directed by Nilo Layno Builders except that, from time to time, the engineers of the petitioner visited the site to check whether the work was in accord with the plans and specifications of the principal. As admitted by Nilo G. Layno, he undertook the contract work on his own account and responsibility, free from interference from any other persons, except as to the results; that he was the one paying the salaries of private respondents; and that as employer of the private respondents, he had the power to terminate or dismiss them for just and valid cause. Indubitably, the Court finds that Nilo Layno Builders maintained effective supervision and control over the private complainants.

In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees.

The joint and several liability of the employer or principal was enacted to ensure compliance with the provisions of the Code, principally those on statutory minimum wage. The contractor or subcontractor is made liable by virtue of his or her status as a direct employer, and the principal as the indirect employer of the contractors employees. This liability facilitates, if not guarantees, payment of the workers compensation, thus, giving the workers ample protection as mandated by the 1987 Constitution. This is not unduly burdensome to the employer. Should the indirect employer be constrained to pay the workers, it can recover whatever amount it had paid in accordance with the terms of the service contract between itself and the contractor.

This liability covers the payment of service incentive leave and 13th month pay of the private complainants during the time they were working at petitioners Prince David Project. So long as the work, task, job or project has been performed for petitioners benefit or on its behalf, the liability accrues for such period even if, later on, the employees are eventually transferred or reassigned elsewhere.

SAN MIGUEL CORP V. MAERC INTEGRATED SYSTEMS 405 SCRA 579 (2003)

FACTS: 291workers filed their complaints against San Miguel Corporation (SMC) and Maerc Integrated Services, Inc., for illegal dismissal, underpayment of wages etc.1. The complainants alleged that they were hired by SMC through its agent MAERC to work inside the SMC premises and in the Philphos Warehouse owned by MAERC. 2. They washed and segregated various kinds of empty bottles used by SMC to sell and distribute its beer beverages to the consuming public.3. They were paid on a per piece or pakiao basis except for a few who worked as checkers and were paid on daily wage basis. 4. SMC cited its plans to phase out its segregation activities due to the installation of labor and cost saving devices. 5. When the service contract was terminated, respondents filed a complaint for illegal dismissal. .6. The LA rendered a decision holding that MAERC was an independent contractor. 7. On appeal, the NLRC ruled that MAERC was a labor-only contractor and that complainants were employees of SMC. The NLRC also held that whether MAERC was a job contractor or a labor-only contractor, SMC was still solidarily liable with MAERC for the latter's unpaid obligations.8. The CA affirmed the decision of the NLRC.

ISSUE: WON SMC IS SOLIDARILY LIABLE WITH MAERC

HELD: In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees' wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees.

On the other hand, in labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees.

This distinction between job contractor and labor-only contractor, however, will not discharge SMC from paying the separation benefits of the workers, inasmuch as MAERC was shown to be a labor-only contractor; in which case, petitioner's liability is that of a direct employer and thus solidarily liable with MAERC.

COCA-COLA BOTTLERS V. DELA CRUZ G.R. NO 184977 (2009)

FACTS: Respondents Dela Cruz filed a case for regularization with money claims against petitioner Coca-Cola Bottlers Inc1. Respondents alleged that they were route helpers assigned to work in petitioners trucks. They go from the Coca-Cola sales offices or plants to customer outlets; they were hired either directly by petitioner or by its contractors but they do not enjoy full remuneration, benefits and privileges granted to petitioners regular sales force. They argued that services they render are necessary and desirable in the regular business of petitioner2. Petitioner contended that it had entered into contracts of services with Peerless and Excellent Partners Cooperative Inc (Excellent) to provide allied services; under these contracts, Peerless and Excellent retained the right to select, hire, dismiss, supervise, control and discipline and pay the salaries of all personnel assigned to petitioner. In turn, both companies were paid a stipulated fee. Petitioner posited that no employer-employee relationship existed between respondents and petitioner 3. LA dismissed the case for lack of jurisdiction, citing that respondents were not employees of petitioner as they were employees of either Peerless or Excellent. NLRC affirmed the same4. CA reversed the LA ruling citing that based on the contractual agreements between Peerless and Excellent, on one hand, and the company, on the other, the former were engaged in labor-only contracting. CA ruled that the defect in the verification and certification was a mere formal requirement that can be excused in the interest of substantial justice, following the ruling of this Court in Uy v. Landbank of the Philippines.

ISSUE: WHAT IS THE EFFECT OF THE LACK OF DOLE CERTIFICATION OF PEERLESS AND EXCELLENT AS LEGITIMATE JOB CONTRACTOR

HELD: The petitioners belated attention to the imputed defect indicates that the petitioner did not consider this defect worth raising when things were going its way, but considered it a serious one when things turned the other way. This opportunistic stance is not our idea of how technical deficiencies should be viewed. Under the circumstances of this case, the defect is a technical and minor one; the respondents did file the required verification and certification of non-forum shopping with all the respondents properly participating, marred only by a glitch in the evidence of their identity. In the interest of justice, this minor defect should not defeat their petition and is one that we can overlook in the interest of substantial justice, taking into account the merits of the case.

MANILA PUBLIC SCHOOL TEACHERS ASSOC V. LAGUIO 200 SCRA 323 (1991)

FACTS: This involves 2 consolidated cases about a series of events that started with the so-called mass action undertaken by some 800 public school teachers, among them members of the petitioning associations.1. Petitioners alleged that they resolved to engage in mass concerted actions, after peaceful dialogues with the heads of the Department of Budget and Management, HOR and Senate, as well as after exhausting all administrative remedies for the immediate payment of due chalk, clothing allowances, 13th month pay arising from the salary standardization law, etc.2. On September 14, 1990, petitioners and teachers in other cities and municipalities in Metro Manila, staged a protest rally at the DECS premises without disrupting classes as a last call for the government to negotiate the granting of demands. No response was made by DECS secretary despite the demonstration so the petitioners began the ongoing protest mass actions on September 17, 19903. However, they were issued a return to work order, ordering them to report for work within 24 hours or face dismissal, and a memorandum directing DECS officials concerned to initiate dismissal proceedings against those who did not comply and hire their replacements. Despite this, the mass actions continued into the week, with more teachers joining in the days that followed4. Based on the record of the principals from various public schools in Metro Manila, DECS secretary filed motu proprio administrative complaints against the teachers who had taken part in the mass actions and defied the return to work order on assorted charges like grave misconduct, gross neglect of duty, gross violation of Civil Service Law, absence without official leave, etc. Subsequently, DECS secretary constituted an investigating committee to determine and take the appropriate course of action 5. Consequently, DECS secretary found the 20 teachers guilty of the charges preferred against them and dismissed them from office effective immediately. In other investigations that followed, 658 teachers were dismissed, others were suspended6. RTC held in favor of DECS secretary, citing that employees in the publi