Francisco v NLRC (Labor Standards)

FACTS:Angelina Francisco was hired by Kasei Corporation during the incorporation stage. She was designated as accountant and corporate secretary and was assigned to handle all the accounting needs of the company. Shewas also designated as Liason Officer to the City of Manila to secure permits for the operation of thecompany. In 1996, she was designated as Acting Manager. She was assigned to handle recruitment of all employees and perform management administration functions. In 2001, she was replaced by Liza Fuentes as Manager. Kasei Corporation reduced her salary to P2,500 per month which was until September. She asked for her salary but was informed that she was no longer connected to the company. She did not anymore report to work since she was not paid for her salary. She filed an action for constructive dismissal with the Labor Arbiter.

Kasei Corporation however averred in its defense that:- Petitioner had no daily time record and she came to the office any time she wanted. The company never interfered with her work except that from time to time, the management would ask her opinion on matters relating to her profession.

- petitioner was not among the employees reported to the BIR, as well as a list of payees subject to expanded withholding tax which included petitioner. SSS records were also submitted showing that petitioner's latest employer was Seiji Corporation

DECISION OF LOWER COURTS:

*Labor arbiter: Francisco was illegally dismissed.*NLRC: affirmed LA.*CA: reversed NLRC.*CA (motion for reconsideration): denied.Hence, the present petition.

ISSUE/S:(1) WON there was an employer-employee relationship between petitioner and private respondent KaseiCorporation; and if in the affirmative,

(2) WON petitioner was illegally dismissed.HELD:

(1) YES.

The court held that in this jurisdiction, there has been no uniform test to determine the existence of anemployer-employee relation.Generally, courts have relied on the so-called RIGHT OF CONTROL TEST where the person for whom theservices are performed reserves a right to control not only the end to be achieved but also the means to beused in reaching such end. In addition to the standard of right-of-control, the existing ECONOMICCONDITIONS PREVAILING BETWEEN THE PARTIES, like the inclusion of the employee in the payrolls, canhelp in determining the existence of an employer-employee relationship.

The better approach would therefore be to adopt a two-tiered test involving:*CONTROL TEST - YES*ECONOMIC CONDITIONS -YES

(1) the putative employers POWER TO CONTROL the employee with respect to the means and methods bywhich the work is to be accomplished; and

(2) the underlying ECONOMIC REALITIES of the activity or relationship.By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because shewas under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. It istherefore apparent that petitioner is economically dependent on respondent corporation for her continuedemployment in the latters line of business.

Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal, receiving check vouchersindicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social Security contributions from August 1, 1999 to December 18, 2000

In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic conditionsprevailing between the parties, in addition to the standard of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of an employer-employeerelationship based on an analysis of the totality of economic circumstances of the worker.Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, such as:(1) the extent to which the services performed are an integral part of the employers business;(2) the extent of the workers investment in equipment and facilities;(3) the nature and degree of control exercised by the employer;(4) the workers opportunity for profit and loss;(5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independententerprise;(6) the permanency and duration of the relationship between the worker and the employer; and(7) the degree of dependency of the worker upon the employer for his continued employment in that line ofbusiness.

The proper standard of economic dependence is whether the worker is dependent on the alleged employerfor his continued employment in that line of business.(2) YES, she was illegally dismissed. A diminution of pay is prejudicial to the employee and amounts toconstructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of workresorted to when continued employment becomes impossible, unreasonable or unlikely; when there is ademotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by anemployer becomes unbearable to an employee

RATIO:In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employees and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater number of employees. This would enable employees to avail of the benefits accorded to them by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economic force in furtherance of social justice and national development.

SONZA vs. ABS-CBN Case DigestJOSE SONZA vs. ABS-CBN BROADCASTING CORPORATIONG.R. No. 138051June 10, 2004

Facts:In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation (MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President and general manager, and Tiangco as its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to provide Sonzas services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first year and P317, 000 for the second and third year.

On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his program and career. After the said letter, Sonza filed with the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries, separation pay, service incentive pay,13th month pay, signing bonus, travel allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-employer relationship existed between the parties. However, ABS-CBN continued to remit Sonzas monthly talent fees but opened another account for the same purpose.

The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC affirmed the decision of the Labor Arbiter. CA also affirmed the decision of NLRC.

Issue:Whether or not there was employer-employee relationship between the parties.

Ruling:Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of the employee, the payment of wages, the power of dismissal and 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.

Sonzas services to co-host its television and radio programs are because of his peculiar talents, skills and celebrity status. 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. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. For violation of any provision of the Agreement, either party may terminate their relationship. Applying the control test to the present case, we find that 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. To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify the program format and airtime schedule "for more effective programming." ABS-CBNs sole concern was the quality of the shows and their standing in the ratings.

Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonzas work. A radio broadcast specialist who works under minimal supervision is an independent contractor. Sonzas work as television and radio program host required special skills and talent, which SONZA admittedly possesses.

ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like Sonza as independent contractors. The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-employee relationship under labor laws. Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an independent contractor.

Javier vs FlyAce

PETITIONER Bitoy Javier alleged that he was an employee of respondent Fly Ace Corp., performing various tasks at its warehouse such as cleaning and arranging the canned items before their delivery to certain locations, except in instances when he would be ordered to accompany the companys delivery vehicles as pahinante. To support his claim, Javier adduced no other evidence except an affidavit executed by one Bengie Valenzuela, who only attested that he would frequently see Javier at the workplace where he was also hired as stevedore. Does Javiers evidence suffice to establish employer-employee relationship between Fly Ace and him?Ruling: No.Expectedly, opposing parties would stand poles apart and proffer allegations as different as chalk and cheese. It is, therefore, incumbent upon the Court to determine whether the party on whom the burden to prove lies was able to hurdle the same. No particular form of evidence is required to prove the existence of such employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. Hence, while no particular form of evidence is required, a finding that such relationship exists must still rest on some substantial evidence. Moreover, the substantiality of the evidence depends on its quantitative as well as its qualitative aspects. Although substantial evidence is not a function of quantity but rather of quality, the x x x circumstances of the instant case demand that something more should have been proffered. Had there been other proofs of employment, such as x x x inclusion in petitioners payroll, or a clear exercise of control, the Court would have affirmed the finding of employer-employee relationship. In sum, the rule of thumb remains: the onus probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. Whoever claims entitlement to the benefits provided by law should establish his or her right thereto x x x. In this case, the labor arbiter and the Court of Appeals (CA) both concluded that Javier failed to establish his employment with Fly Ace. All that Javier presented were his self-serving statements purportedly showing his activities as an employee of Fly Ace. He failed to pass the substantiality requirement to support his claim. Hence, the Court sees no reason to depart from the findings of the CA. While Javier remains firm in his position that as an employed stevedore of Fly Ace, he was made to work in the company premises during weekdays arranging and cleaning grocery items for delivery to clients, no other proof was submitted. The lone affidavit executed by one Bengie Valenzuela was unsuccessful in strengthening Javiers cause. All Valenzuela attested to was that he would frequently see Javier at the workplace where the latter was also hired as stevedore. Tthe Court cannot ignore the inescapable conclusion that Javiers mere presence at the workplace falls short in proving employment therein. The affidavit could have bolstered Javiers claim of being tasked to clean grocery items when there were no scheduled delivery trips, but no information was offered simply because the witness had no personal knowledge of Javiers employment status. The Court cannot accept Javiers statements, hook, line and sinker. (Bitoy Javier vs. Fly Ace Corp./Flordelyn Castillo, G.R. No. 192558, Feb. 15, 2012).The elements to determine the existence of an employment relationship are: (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 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. (AD SONICMIX v. WILMER D. GENOVIA, G.R. No. 169757, November 23, 2011)Guidelines indicative of labor law "control" do not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means and methods to be employed in attaining the result. (GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS, G.R. No. 167622, 25 January 2011)The Court is of the considerable view that on Javier lies the burden to pass the well-settled tests to determine the existence of an employer-employee relationship, viz: (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. Of these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. (BITOY JAVIER (DANILO P. JAVIER) v. FLY ACE CORPORATION/FLORDELYN CASTILLO, G.R. No. 192558, February 15, 2012)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.

SMCEU v. Judge Bersamira(Review, Art. 212)G.R. No. 87700 June 13, 1990J. Melencio-Herrera

Facts: Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon and D'Rite. These companies are independent contractors duly licensed by the DOLE. In said contracts, it was expressly understood and agreed that the workers employed by the contractors were to be paid by the latter and that none of them were to be deemed employees or agents of SanMig. There was to be no employer-employee relation between the contractors and/or its workers, on the one hand, and SanMig on the other.Petitioner is the duly authorized representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed a Collective Bargaining Agreement effective 1 July 1986 to 30 June 1989. Section 1 of their CBA specifically provides that "temporary, probationary, or contract employees and workers are excluded from the bargaining unit and, therefore, outside the scope of this Agreement."In a letter dated 20 November 1988, the Union advised SanMig that some Lipercon and D'Rite workers had signed up for union membership and sought the regularization of their employment with SMC. The Union alleged that this group of employees, while appearing to be contractual workers supposedly independent contractors, have been continuously working for SanMig for a period ranging from 6 months to 15 years and that their work is neither casual nor seasonal as they are performing work or activities necessary or desirable in the usual business or trade of SanMig. Thus, it was contended that there exists a "labor-only" contracting situation. It was then demanded that the employment status of these workers be regularized.On 12 January 1989 and 30 January 1989, the Union filed two notices of strike for unfair labor practice, CBA violations, and union busting. Conciliatory meetings were then held before the National Conciliation and Mediation Board of DOLE (NCMB-DOLE).Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by Lipercon and D'Rite workers in various SMC plants and offices.On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages before respondent Court enjoining petitioner from representing and/or acting in behalf of the employees of Lipercon and DRite, and of calling a strike among others. Respondent Court found the Complaint sufficient in form and substance and issued a Temporary Restraining Order, and subsequently, an Order granting the complaint of SanMig.

Issue: Whether or not there exists a labor dispute such that the RTC may not validly assume jurisdiction to the exclusion of the NCMB-DOLE.

Held: A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee."While it is SanMig's submission that no employer-employee relationship exists between itself, on the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless exist "regardless of whether the disputants stand in the proximate relationship of employer and employee" provided the controversy concerns, among others, the terms and conditions of employment or a "change" or "arrangement" thereof. Put differently, and as defined by law, the existence of a labor dispute is not determined by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee.That a labor dispute, as defined by the law, does exist here is evident. What the Union seeks is to regularize the status of the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig. This matter definitely dwells on the working relationship between said employees vis-a-vis SanMig. Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those workers, who have signed up for Union membership, for the purpose of collective bargaining. SanMig, for its part, resists that Union demand on the ground that there is no employer-employee relationship between it and those workers and because the demand violates the terms of their CBA. Obvious then is that representation and association, for the purpose of negotiating the conditions of employment are also involved. Neither can it be denied that the controversy below is directly connected with the labor dispute already taken cognizance of by the NCMB-DOLE.As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals.

Locsin vs. PLDTGR 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.

Ymbong vs. ABS-CBN G.R. No. 184885

Facts: Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in Cebu as a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended to radio when ABS-CBN Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent, spinner, scriptwriter and public affairs program anchor. Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he worked as talent, director and scriptwriter for various radio programs aired over DYAB. On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016 or the Policy on Employees Seeking Public Office. The pertinent portions read:1. Any employee who intends to run for any public office position, must file his/her letter of resignation, at least thirty (30) days prior to the official filing of the certificate of candidacy either for national or local election. x x x x3. Further, any employee who intends to join a political group/party or even with no political affiliation but who intends to openly and aggressively campaign for a candidate or group of candidates (e.g. publicly speaking/endorsing candidate, recruiting campaign workers, etc.) must file a request for leave of absence subject to managements approval. For this particular reason, the employee should file the leave request at least thirty (30) days prior to the start of the planned leave period.Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time, Dante Luzon, Assistant Station Manager of DYAB issued the following memorandum:TO : ALL CONCERNEDFROM : DANTE LUZONDATE : MARCH 25, 1998SUBJECT : AS STATEDPlease be informed that per company policy, any employee/talent who wants to run for any position in the coming election will have to file a leave of absence the moment he/she files his/her certificate of candidacy.The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the entire campaign/election period.For strict compliance.After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch with Luzon. Luzon claims that Ymbong approached him and told him that he would leave radio for a couple of months because he will campaign for the administration ticket. It was only after the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour. Ymbong, on the other hand, claims that in accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter that he would take a few months leave of absence from March 8, 1998 to May 18, 1998 since he was running for councilor of Lapu-Lapu City. As regards Patalinghug, Patalinghug approached Luzon and advised him that he will run as councilor for Naga, Cebu. According to Luzon, he clarified to Patalinghug that he will be considered resigned and not just on leave once he files a certificate of candidacy. Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. According to Luzon, he informed them that they cannot work there anymore because of company policy. This was stressed even in subsequent meetings and they were told that the company was not allowing any exceptions. ABS-CBN, however, agreed out of pure liberality to give them a chance to wind up their participation in the radio drama, Nagbabagang Langit, since it was rating well and to avoid an abrupt ending. The agreed winding-up, however, dragged on for so long prompting Luzon to issue to Ymbong the memorandum dated September 14, 1998 automatically terminating them.Issue: 1. whether Policy No. HR-ER-016 is valid2. whether the March 25, 1998 Memorandum issued by Luzonsuperseded Policy No. HR-ER-0163. whether Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed by ABS-CBN.Held: 1. ABS-CBN had a valid justification for Policy No. HR-ER-016. Its rationale is embodied in the policy itself, to wit: Rationale: ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best interest of the company to continuously remain apolitical. While it encourages and supports its employees to have greater political awareness and for them to exercise their right to suffrage, the company, however, prefers to remain politically independent and unattached to any political individual or entity. Therefore, employees who [intend] to run for public office or accept political appointment should resign from their positions, in order to protect the company from any public misconceptions. To preserve its objectivity, neutrality and credibility, the company reiterates the following policy guidelines for strict implementation. We have consistently held that so long as a companys management prerogatives are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them. In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.It is worth noting that such exercise of management prerogative has earned a stamp of approval from no less than our Congress itself when on February 12, 2001, it enacted Republic Act No. 9006, otherwise known as the Fair Election Act. Section 6.6 thereof reads:6.6. Any mass media columnist, commentator, announcer, reporter, on-air correspondent or personality who is a candidate for any elective public office or is a campaign volunteer for or employed or retained in any capacity by any candidate or political party shall be deemed resigned, if so required by their employer, or shall take a leave of absence from his/her work as such during the campaign period: Provided, That any media practitioner who is an official of a political party or a member of the campaign staff of a candidate or political party shall not use his/her time or space to favor any candidate or political party. [Emphasis and underscoring supplied.]2. The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has policy-making powers in relation to his principal task of administering the networks radio station in the Cebu region, the exercise of such power should be in accord with the general rules and regulations imposed by the ABS-CBN Head Office to its employees. Clearly, the March 25, 1998 Memorandum issued by Luzon which only requires employees to go on leave if they intend to run for any elective position is in absolute contradiction with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation, not only the filing of a leave of absence, of any employee who intends to run for public office. Having been issued beyond the scope of his authority, the March 25, 1998 Memorandum is therefore void and did not supersede Policy No. HR-ER-016.Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy of his recollection of the company policy when he issued the March 25, 1998 Memorandum and stated therein that upon double-checking of the exact text of the policy statement and subsequent confirmation with the ABS-CBN Head Office in Manila, he learned that the policy required resignation for those who will actually run in elections because the company wanted to maintain its independence. Since the officer who himself issued the subject memorandum acknowledged that it is not in harmony with the Policy issued by the upper management, there is no reason for it to be a source of right for Ymbong.3. As Policy No. HR-ER-016 is the subsisting company policy and not Luzons March 25, 1998 Memorandum, Ymbong is deemed resigned when he ran for councilor.We find no merit in Ymbongs argument that [his] automatic termination x x x was a blatant [disregard] of [his] right to due process as he was never asked to explain why he did not tender his resignation before he ran for public office as mandated by [the subject company policy]. Ymbongs overt act of running for councilor of Lapu-Lapu City is tantamount to resignation on his part. He was separated from ABS-CBN not because he was dismissed but because he resigned. Since there was no termination to speak of, the requirement of due process in dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy. Petition denied

Case Digest: South East International Rattan & Agbay v. ComingG.R. No. 186621 : March 12, 2014

FACTS:

Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation engaged in the business of manufacturing and exporting furniture to various countries with principal place of business at Paknaan, Mandaue City, while petitioner EstanislaoAgbay, as per records, is the President and General Manager of SEIRI.

Respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of wages, non-payment of holiday pay, 13th month pay and service incentive leave pay, with prayer for reinstatement, back wages, damages and attorney fees against Petitioner.

Respondent alleged that on March 17, 1984, petitioners hired him as Sizing Machine Operator. He worked from 8:00 a.m. to 5:00 p.m. At first, his compensation was on span class="SpellE">pakiaobasis but sometime in June 1984, it was fixed at P150.00 per day paid to him on a weekly basis. In 1990, without any apparent reason, his employment was interrupted as he was told by petitioners to resume work in two months time. Being an uneducated person, respondent was persuaded by the management as well as his brother not to complain, as otherwise petitioners might decide not to call him back for work. Fearing such consequence, respondent accepted his fate. Nonetheless, after two months he reported back to work upon order of management.

Despite being an employee for many years with his work performance never questioned by petitioners, respondent was dismissed on January 1, 2002 without lawful cause. He was told that he will be terminated because the company is not doing well financially and that he would be called back to work only if they need his services again. Respondent waited for almost a year but petitioners did not call him back to work. He filed the complaint before the regional arbitration branch.

As their defense, petitioners denied having hired respondent asserting that SEIRI was incorporated only in 1986, and that respondent actually worked for SEIRI furniture suppliers because when the company started in 1987 it was engaged purely in buying and exporting furniture and its business operations were suspended from the last quarter of 1989 to August 1992. They stressed that respondent was not included in the list of employees submitted to the Social Security System (SSS). Moreover, respondent brother, Vicente Coming, executed an affidavit8 in support of petitionersposition while Allan Mayol and Faustino Apondarissued notarized certifications9 that respondent worked for them instead.

The Labor Arbiter ruled that respondent is a regular employee of SEIRI and that the termination of his employment was illegal.

Petitioners appealed to the National Labor Relations Commission (NLRC)-Cebu City. The NLRC set aside the decision of the LA compelling the respondent to file a petition for certiorari under Rule 65 before the Court of Appeals. The CA ruled in favor of the respondent and declared that there existed an employer-employee relationship between petitioners and respondent who was dismissed without just and valid cause. Petitioners moved for reconsideration but the same was denied. Hence, the present petition for review on certiorari.

ISSUE: Whether or not there exists an employer-employee relationship between the petitioners and the respondent?

HELD: The Court sustains that Decision of the Court of Appeals.

LABOR LAW: employer-employee relationship

In order to establish the existence of an employer-employee relationship, the four-fold test is used, 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 conduct, or the so-called ontrol test.

In resolving the issue of whether such relationship exists in a given case, substantial evidence or that amount of relevant evidence, which a reasonable mind might accept, as adequate to justify a conclusion is sufficient.

The petitioners presented the following to support their stance that respondent is not their employee: (1) Employment Reports to the SSS from 1987 to 2002; (2) the Certifications issued by Mayol and Apondar; (3) two affidavits of Vicente Coming; (4) payroll sheets (1999-2000); (5) individual pay envelopes and employee earnings records (1999-2000); (6) and affidavit of Angelina Agbay(Treasurer and Human Resources Officer).

The respondent, on the other hand, submitted the affidavit executed by Eleoterio Brigoli, Pedro Brigoli, Napoleon Coming, EfrenComing and Gil Coming who all attested that respondent was their co-worker at SEIRI.

The Court in Tan v. Lagrama, 436 Phil. 190, held that the fact that a worker was not reported as an employee to the SSS is not conclusive proof of the absence of employer-employee relationship. Otherwise, an employer would be rewarded for his failure or even neglect to perform his obligation. Nor does the fact that respondent name does not appear in the payrolls and pay envelope records submitted by petitioners negate the existence of employer-employee relationship.

As a regular employee, respondent enjoys the right to security of tenure under Article 279 of the Labor Code and may only be dismissed for just or authorized causes. Otherwise, the dismissal becomes illegal.

Since respondent dismissal was without valid cause, he is entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances and other benefits of their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

However, where reinstatement is no long feasible as an option, back wages shall be computed from the time of the illegal termination up to the finality of the decision. As an alternative to this, separation pay equivalent to one month salary for every year of service should likewise be awarded in case reinstatement is not possible.

The present petition for review on certiorari is DENIED.

Case Digest: Tenazas, et al v. Villegas Taxi & VillegasG.R. No. 192998 : April 2, 2014

BERNARD A. TENAZAS, JAIME M. FRANCISCO AND SIDRO G. ENDRACA, Complainant, v. VILLEGAS TAXI TRANSPORT AND ROMUALDO VILLEGAS, Respondent.

REYES, J.:

FACTS:

On July 4, 2007, Bernard A. Tenazas (Tenazas) and Jaime M. Francisco (Francisco) filed a complaint for illegal dismissal against R. Villegas Taxi Transport and/or Romualdo Villegas (Romualdo) and Andy Villegas (Andy) (respondents). At that time, a similar case had already been filed by Isidro G. Endraca (Endraca) against the same respondents. The two (2) cases were subsequently consolidated.In their position paper, Tenazas, Francisco and Endraca (petitioners) alleged that they were hired and dismissed by the respondents.

Relaying the circumstances of his dismissal, Tenazas alleged that on July 1, 2007, the taxi unit assigned to him was sideswiped by another vehicle, causing a dent on the left fender near the driver seat. The cost of repair for the damage was estimated at 500.00. Upon reporting the incident to the company, he was scolded by respondents Romualdo and Andy and was told to leave the garage for he is already fired. He was even threatened with physical harm should he ever be seen in the company's premises again. Despite the warning, Tenazas reported for work on the following day but was told that he can no longer drive any of the company's units as he is already fired.

Francisco, on the other hand, averred that his dismissal was brought about by the company's unfounded suspicion that he was organizing a labor union. He was instantaneously terminated, without the benefit of procedural due process, on June 4, 2007.

Endraca, for his part, alleged that his dismissal was instigated by an occasion when he fell short of the required boundary for his taxi unit. He related that before he was dismissed, he brought his taxi unit to an auto shop for an urgent repair. He was charged the amount of 700.00 for the repair services and the replacement parts. As a result, he was not able to meet his boundary for the day. Upon returning to the company garage and informing the management of the incident, his drivers license was confiscated and was told to settle the deficiency in his boundary first before his license will be returned to him. He was no longer allowed to drive a taxi unit despite his persistent pleas.

For their part, the respondents admitted that Tenazas and Endraca were employees of the company, the former being a regular driver and the latter a spare driver. The respondents, however, denied that Francisco was an employee of the company or that he was able to drive one of the company's units at any point in time.

The respondents further alleged that Tenazas was never terminated by the company. They claimed that on July 3, 2007, Tenazas went to the company garage to get his taxi unit but was informed that it is due for overhaul because of some mechanical defects reported by the other driver who takes turns with him in using the same. He was thus advised to wait for further notice from the company if his unit has already been fixed. On July 8, 2007, however, upon being informed that his unit is ready for release, Tenazas failed to report back to work for no apparent reason.

As regards Endraca, the respondents alleged that they hired him as a spare driver in February 2001. They allow him to drive a taxi unit whenever their regular driver will not be able to report for work. In July 2003, however, Endraca stopped reporting for work without informing the company of his reason. Subsequently, the respondents learned that a complaint for illegal dismissal was filed by Endraca against them. They strongly maintained, however, that they could never have terminated Endraca in March 2006 since he already stopped reporting for work as early as July 2003. Even then, they expressed willingness to accommodate Endraca should he wish to work as a spare driver for the company again since he was never really dismissed from employment anyway.

The Labor Arbiter (LA) rendered a Decision declaring that there was no illegal dismissal in the case at bar.

The NLRC rendered a Decision, reversing the appealed decision of the LA, holding that the additional pieces of evidence belatedly submitted by the petitioners sufficed to establish the existence of employer-employee relationship and their illegal dismissal. On July 24, 2009, the respondents filed a motion for reconsideration but the NLRC denied the same.

Unperturbed, the respondents filed a petition for certiorari with the CA. On March 11, 2010, the CA rendered a Decision, affirming with modification the Decision dated June 23, 2009 of the NLRC. The CA agreed with the NLRCs finding that Tenazas and Endraca were employees of the company, but ruled otherwise in the case of Francisco for failing to establish his relationship with the company. It also deleted the award of separation pay and ordered for reinstatement of Tenazas and Endraca.

ISSUE: Whether there is an employer-employee relationship and whether there was an illegal dismissal

HELD: The petition lacks merit.

LABOR LAW: 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 employer's 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.

There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment letters or employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee status.

In this case, however, Francisco failed to present any proof substantial enough to establish his relationship with the respondents. He failed to present documentary evidence like attendance logbook, payroll, SSS record or any personnel file that could somehow depict his status as an employee. Anent his claim that he was not issued with employment records, he could have, at least, produced his social security records which state his contributions, name and address of his employer, as his co-petitioner Tenazas did. He could have also presented testimonial evidence showing the respondent's exercise of control over the means and methods by which he undertakes his work. This is imperative in light of the respondent's denial of his employment and the claim of another taxi operator, Emmanuel Villegas (Emmanuel), that he was his employer. Specifically, in his Affidavit, Emmanuel alleged that Francisco was employed as a spare driver in his taxi garage from January 2006 to December 2006, a fact that the latter failed to deny or question in any of the pleadings attached to the records of this case. The utter lack of evidence is fatal to Francisco's case especially in cases like his present predicament when the law has been very lenient in not requiring any particular form of evidence or manner of proving the presence of employer-employee relationship.

In Opulencia Ice Plant and Storage v. NLRC, this Court emphasized, thus:

No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a written instrument.

Here, Francisco simply relied on his allegation that he was an employee of the company without any other evidence supporting his claim. Unfortunately for him, a mere allegation in the position paper is not tantamount to evidence. Bereft of any evidence, the CA correctly ruled that Francisco could not be considered an employee of the respondents.

The CAs order of reinstatement of Tenazas and Endraca, instead of the payment of separation pay, is also well in accordance with prevailing jurisprudence. In Macasero v. Southern Industrial Gases Philippines, the Court reiterated, thus:

An illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.

Clearly, it is only when reinstatement is no longer feasible that the payment of separation pay is ordered in lieu thereof. For instance, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, it would be more prudent to order payment of separation pay instead of reinstatement.

This doctrine of strained relations, however, should not be used recklessly or applied loosely nor be based on impression alone. It bears to stress that reinstatement is the rule and, for the exception of strained relations to apply, it should be proved that it is likely that if reinstated, an atmosphere of antipathy and antagonism would be generated as to adversely affect the efficiency and productivity of the employee concerned.

Moreover, the existence of strained relations, it must be emphasized, is a question of fact.

In Golden Ace Builders v. Talde, the Court underscored:

Strained relations must be demonstrated as a fact, however, to be adequately supported by evidence substantial evidence to show that the relationship between the employer and the employee is indeed strained as a necessary consequence of the judicial controversy.

After a perusal of the NLRC decision, this Court failed to find the factual basis of the award of separation pay to the petitioners. The NLRC decision did not state the facts which demonstrate that reinstatement is no longer a feasible option that could have justified the alternative relief of granting separation pay instead.

WHEREFORE, in view of the foregoing disquisition, the petition for review on certiorari is DENIED.

Case Digest: Tongko v. The Manufacturers Life Insurance & de DiosG.R. No. 167622, January 25, 2011

FACTS:

Taking from the November 2008 decision, the facts are as follows:

Manufacturers Life Insurance, Co. is a domestic corporation engaged in life insurance business. De Dios was its President and Chief Executive Officer. Petitioner Tongko started his relationship with Manulife in 1977 by virtue of a Career Agent's Agreement.

Pertinent provisions of the agreement state that:

It is understood and agreed that the Agent is an independent contractor and nothing contained herein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent.

a) The Agent shall canvass for applications for Life Insurance, Annuities, Group policies and other products offered by the Company, and collect, in exchange for provisional receipts issued by the Agent, money due or to become due to the Company in respect of applications or policies obtained by or through the Agent or from policyholders allotted by the Company to the Agent for servicing, subject to subsequent confirmation of receipt of payment by the Company as evidenced by an Official Receipt issued by the Company directly to the policyholder.

b) The Company may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the right to terminate this Agreement by the Company shall be construed for any previous failure to exercise its right under any provision of this Agreement.

c) Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15) days notice in writing.

Sometime in 2001, De Dios addressed a letter to Tongko, then one of the Metro North Managers, regarding meetings wherein De Dios found Tongko's views and comments to be unaligned with the directions the company was taking. De Dios also expressed his concern regarding the Metro North Managers' interpretation of the company's goals. He maintains that Tongko's allegations are unfounded. Some allegations state that some Managers are unhappy with their earnings, that they're earning less than what they deserve and that these are the reasons why Tonko's division is unable to meet agency development objectives. However, not a single Manager came forth to confirm these allegations. Finally, De Dios related his worries about Tongko's inability to push for company development and growth.

De Dios subsequently sent Tongko a letter of termination in accordance with Tongko's Agents Contract. Tongko filed a complaint with the NLRC against Manulife for illegal dismissal, alleging that he had an employer-employee relationship with De Dios instead of a revocable agency by pointing out that the latter exercised control over him through directives regarding how to manage his area of responsibility and setting objectives for him relating to the business. Tongko also claimed that his dismissal was without basis and he was not afforded due process. The NLRC ruled that there was an employer-employee relationship as evidenced by De Dios's letter which contained the manner and means by which Tongko should do his work. The NLRC ruled in favor of Tongko, affirming the existence of the employer-employee relationship.

The Court of Appeals, however, set aside the NLRC's ruling. It applied the four-fold test for determining control and found the elements in this case to be lacking, basing its decision on the same facts used by the NLRC. It found that Manulife did not exert control over Tongko, there was no employer-employee relationship and thus the NLRC did not have jurisdiction over the case.

The Supreme Court reversed the ruling of the Court of Appeals and ruled in favor of Tongko. However, the Supreme Court issued another Resolution dated June 29, 2010, reversing its decision. Tongko filed a motion for reconsideration, which is now the subject of the instant case.

ISSUE: Whether the Supreme Court erred in issuing the June 29, 2010 resolution, reversing its earlier decision that an employer-employee relationship existed.

HELD: The petition is unmeritorious.

LABOR LAW Agency; Employer-employee relationships

The Supreme Court finds no reason to reverse the June 29, 2010 decision. Control over the performance of the task of one providing service both with respect to the means and manner, and the results of the service is the primary element in determining whether an employment relationship exists. The Supreme Court ruled petitioners Motion against his favor since he failed to show that the control Manulife exercised over him was the control required to exist in an employer-employee relationship; Manulifes control fell short of this norm and carried only the characteristic of the relationship between an insurance company and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code.

In the Supreme Courts June 29, 2010 Resolution, they noted that there are built-in elements of control specific to an insurance agency, which do not amount to the elements of control that characterize an employment relationship governed by the Labor Code.The Insurance Code provides definite parameters in the way an agent negotiates for the sale of the companys insurance products, his collection activities and his delivery of the insurance contract or policy. They do not reach the level of control into the means and manner of doing an assigned task that invariably characterizes an employment relationship as defined by labor law.

To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means and methods to be employed in attaining the result. Tested by this norm, Manulifes instructions regarding the objectives and sales targets, in connection with the training and engagement of other agents, are among the directives that the principal may impose on the agent to achieve the assigned tasks.They are targeted results that Manulife wishes to attain through its agents. Manulifes codes of conduct, likewise, do not necessarily intrude into the insurance agents means and manner of conducting their sales. Codes of conduct are norms or standards of behavior rather than employer directives into how specific tasks are to be done.

In sum, the Supreme Court found absolutely no evidence of labor law control.

Petition is DENIED.

Television and Production Exponents, Inc. vs Roberto Servaa

542 SCRA 578 Labor Law Labor Standards Regular Employee Employer-employee relationship Four Fold Test

Servaa started out as a security for the Agro-Commercial Security Agency (ACSA) since 1987. The agency had a contract with TV network RPN 9. On the other hand, Television and Production Exponents, Inc (TAPE). is a company in charge of TV programming and was handling shows like Eat Bulaga! Eat Bulaga! was then with RPN 9. In 1995, RPN 9 severed its relations with ACSA. TAPE retained the services of Servaa as a security guard and absorbed him. In 2000, TAPE contracted the services of Sun Shield Security Agency. It then notified Servaa that he is being terminated because he is now a redundant employee. Servaa then filed a case for illegal Dismissal. The Labor Arbiter ruled that Servaas dismissal is valid on the ground of redundancy but though he was not illegally dismissed he is still entitled to be paid a separation pay which is amounting to one month pay for every year of service which totals to P78,000.00. TAPE appealed and argued that Servaa is not entitled to receive separation pay for he is considered as a talent and not as a regular employee; that as such, there is no employee-employer relationship between TAPE and Servaa. The National Labor Relations Commission ruled in favor of TAPE. It ruled that Servaa is a program employee. Servaa appealed before the Court of Appeals. The Court of Appeals reversed the NLRC and affirmed the LA. The CA further ruled that TAPE and its president Tuviera should pay for nominal damages amounting to P10,000.00.

ISSUE: Whether or not there is an employee-employer relationship existing between TAPE and Servaa.

HELD: Yes. Servaa is a regular employee.

In determining Servaas nature of employment, the Supreme Court employed the Four Fold Test:

1. Whether or not employer conducted the selection and engagement of the employee.

Servaa was selected and engaged by TAPE when he was absorbed as a talent in 1995. He is not really a talent, as termed by TAPE, because he performs an activity which is necessary and desirable to TAPEs business and that is being a security guard. Further, the primary evidence of him being engaged as an employee is his employee identification card. An identification card is usually provided not just as a security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.

2. Whether or not there is payment of wages to the employee by the employer.

Servaa is definitely receiving a fixed amount as monthly compensation. Hes receiving P6,000.00 a month.

3. Whether or not employer has the power to dismiss employee.

The Memorandum of Discontinuance issued to Servaa to notify him that he is a redundant employee evidenced TAPEs power to dismiss Servaa.

4. Whether or not the employer has the power of control over the employee.

The bundy cards which showed that Servaa was required to report to work at fixed hours of the day manifested the fact that TAPE does have control over him. Otherwise, Servaa could have reported at any time during the day as he may wish.

Therefore, Servaa is entitled to receive a separation pay.

On the other hand, the Supreme Court ruled that Tuviera, as president of TAPE, should not be held liable for nominal damages as there was no showing he acted in bad faith in terminating Servaa.

Regular Employee Defined:

One having been engaged to perform an activity that is necessary and desirable to a companys business.