1

PART I transact its business through its board of directors and through its
BASIC CONCEPTS officers and agents when authorized by a board resolution or its
by-laws.
Page 1 cases (Salenga v. CA – Lirio v. Genovia)
Since there was no valid appeal, the finding of illegal dismissal
made by the labor arbiter stands.

0. ANTONIO P. SALENGA and NATIONAL LABOR RELATIONS

COMMISSION vs COURT OF APPEALS and CLARK 1. LVN PICTURES INC. VS. PHILIPPINE MUSICIANS GUILD
DEVELOPMENT CORPORATION G.R. No. 174941, February 1,
2012 Facts:

TOPIC: APPLICATION OF THE LABOR CODE Petitioners LVN Pictures and Sampaguita Pictures are
corporations engaged in the making of motion pictures and in
FACTS: processing and distribution thereof. Respondent Philippine
Musicians Guild (Guild) is a duly registered legitimate labor
President/Chief Executive Officer (CEO) Rufo Colayco issued an organization.
Order informing Salenga that, pursuant to the decision of the
board of directors of respondent CDC, the position of head The Guild averred that petitioners employ musicians for the
executive assistant – the position held by petitioner – was purpose of making music recordings; that 95% of the musicians of
declared redundant. His employment was then terminated. He said companies are members of the Guild. The Guild prayed that it
then filed illegal dismissal case against CDC and Colayco. be certified as the sole and exclusive bargaining agency for all
musicians working in the said companies. The petitioners denied
The Labor Arbiter ruled in favor of Salenga. When the Decision that the musicians were their employees; they alleged that the
was rendered, CDC was already under the leadership of Sergio T. musical numbers in the filing of the companies were furnished by
Naguiat. He instructed Atty. Monina C. Pineda, manager of the independent contractors.
Corporate and Legal Services Department and concurrent
corporate board secretary, not to appeal the Decision and to so The lower court sustained the theory of the Guild. Petitioners filed
inform the OGCC. for review for certiorari.

However, two separate appeals were filed before LA Darlucio. ISSUES:

One from the OGCC on behalf of respondent CDC and Rufo
Colayco and the second from Rufo Colayco. WON the musicians in questions are employees of the film
companies. YES
Petitioner opposed the two appeals on the grounds that both
appellants had failed to observe Rule VI, Sections 4 to 6 of the
HELD:
NLRC Rules of Procedure; and that appellants had not been
authorized by respondent’s board of directors to represent the
The SC agrees with the findings of the lower court.
corporation and, thus, they were not the “employer” whom the
Rules referred to.
As a normal and usual course of procedure employed by the
companies when a pictures is to be made, the producer chooses
ISSUE:
from the musical directors, one who will furnish the musical
Whether or not NLRC can entertain an appeal absent a board background for a film. The price is agreed upon verbally between
resolution allowing it. the producer and musical director. When the music is ready for
recording, the musicians are summoned through “call slips” in the
HELD: name of the film company; they will be picked up by the truck of
the film company.
No.
During the recording sessions, the motion pictures director, who
When a decision was rendered by the labor arbiter against CDC, is an employee of the company, supervises the recording of the
there was already a change in management and the new musicians and tells what to do in every detail. He solely directs the
president gave instructions to desist from appealing the adverse performance of the musicians before the camera as director, he
decision. supervises the perfimance of all the action, including the
musicians who appear in the scenes. During the actual shooting of
The former president of CDC, however, still raised the finding of the scene, the technicians, soundmen and other employees of the
illegal dismissal before the NLRC, with the appeal being verified company assist in the operation. Hence, the work of the musicians
and certified by the executive vice president of CDC without being is an integral part of the entire motion picture.
armed with a board resolution from the company.
We are to apply RA No. 875 “An Act to promote industrial peace
and for other purposes. The purpose of the policy is to:
a. eliminate the cause of industrial unrest by protecting the
The Supreme Court held that, in the absence of a board exercise of their right to self-organization for the purpose of
resolution, the NLRC did not acquire any jurisdiction over the collective bargaining.
appeal of CDC. The action of the vice president could not bind the b. promote sound stable industrial peace and the advancement of
company because a corporation can only exercise its powers and the general welfare and the best interest of employers and
 2

employees by the settlement of issues respecting terms and written contract, for other factors, like the nature of the work the
conditions of employment through the process of collective employee has been called upon to perform, are also considered.
bargaining between employers and representatives of their
employees. The law affords protection to an employee, and does not
countenance any attempt to subvert its spirit and intent. Any
To determine whether a person is an employee or an independent stipulation in writing can be ignored when the employer utilizes
contractor, the National Labor Relations relies on “the right to the stipulation to deprive the employee of his security of tenure.
control test”. Under this test, an employer-employee relationship The inequality that characterizes employer-employee relationship
exist where the person for whom the services are performed generally tips the scales in favor of the employer, such that the
reserves the right to control not only the end to be achieved but employee is often scarcely provided real and better options.
also the manner and means to be used in reaching the end.
The argument that Roa was receiving talent fee and not salary is
The right of control of the film company over the musicians is baseless. There is no denying that the remuneration denominated
shown: as talent fees was fixed on the basis of his talent, skill, and the
1. by calling the musicians through “call slips” in the name of the quality of music he played during the hours of his performance.
company; Roa’s remuneration, albeit denominated as talent fees, was still
2. by arranging the schedules in its studio for recording session; considered as included in the term wage in the sense and context
3. by furnishing transportation and meals to musicians; and of the Labor Code, regardless of how petitioner chose to
4. by supervising and directing in detail, through the motion designate the remuneration, as per Article 97(f) of the Labor
picture director, the performance of the musicians before the Code.
camera, in order to suit the music they are playing to the picture
which is being flashed on the screen. The power of the employer to control the work of the employee
is considered the most significant determinant of the existence of
Therefore, the members of the Guild are employees of the film an employer-employee relationship. This is the so-called control
companies and are entitled to right of collective bargaining under test and is premised on whether the person for whom the services
RA No. 875. are performed reserves the right to control both the end achieved
and the manner and means used to achieve that end.

2. LEGEND HOTEL MANILA VS. HERNANI S. REALUYO

ALSO KNOWN AS JOEY ROA
3. DY KEH BENG V. INTERNATIONAL LABOR (MAY 25, 1979)
FACTS:
FACTS:
Joey Roa files a case of illegal dismissal against the petitioner. He -A charge of unfair labor practice was filed against
averred that he worked as a pianist of the latter at the rate of DyKehBeng, proprietor of a basket factory, for discriminatory acts
400/night and eventually increased to 750/night given to him after within the meaning of Section 4(a), sub-paragraph (1) and (4).
each performance. During his employment he cannot choose the Republic Act No. 875, by dismissing on September 28 and 29,
time of his performance which is fixed 7-10pm that is 3 to 6 times 1960, respectively, Carlos N. Solano and Ricardo Tudla for their
in a week. He was also required to conform to the venue’s motif union activities.
and he had been subjected to the rules on employees, privileges - DyKehBeng contended that he did not know Tudla and
granted to other employees. Until on July 9, 1999 he was notified that Solano was not his employee because the latter came to the
by the management that by reason of cost cutting measure his establishment only when there was work which he did
services would no longer be required effective July 30, 1999. on pakiaw basis, each piece of work being done under a separate
Thus, the filing of this complaint. contract.
- An employee-employer relationship was found to have
Petitioner denied the existence of an employer-employee existed between DyKehBeng and complainants Tudla and Solano,
relationship with respondent, insisting that he had been only a although Solano was admitted to have worked on piece basis.
talent engaged to provide live music for three hours on days each
- According to DyKehBeng, however, Solano was not his
week and that the economic crisis that had hit the country
constrained the management to dispense with his services. employee for the following reasons:
(1) Solano never stayed long enought at Dy's
ISSUE: establishment;
(2) Solano had to leave as soon as he was
w/n there is er-ee relationship between the parties. Thus, Roa was through with the
illegally dismissed. (3) order given him by Dy;
(4) When there were no orders needing his
HELD: services there was nothing for him to do;
(5) When orders came to the shop that his
YES. Employer-employee relationship existed between the parties. regular workers could not fill it was then that
Dy went to his address in Caloocan and fetched
Roa was undeniably employed as a pianist of the restaurant. The him for these orders; and
hotel wielded the power of selection at the time it entered into (6) Solano's work with Dy's establishment was
the service contract dated Sept. 1, 1992 with Roa. The hotel could not continuous. ,
not seek refuge behind the service contract entered into with
Roa. It is the law that defines and governs an employment
relationship, whose terms are not restricted to those fixed in the
 3

- Petitioner really anchors his contention of the non-

existence of employee-employer relationship on the control test. 4. RJL MARTINEZ FISHING CORPORATION and/or
He points to the case of Madrigal Shipping Co., Inc. v. Nieves Baens PENINSULA FISHING CORPORATION,-versus-
del Rosario, et al., L-13130, October 31, 1959, where the Court ruled NLRC and BOTICARIO, et al.
that:
The test ... of the existence of employee and FACTS
employer relationship is whether there is an
understanding between the parties that one is 1. Petitioners RJL and Peninsula are principally engaged in the
to render personal services to or for the deep-sea fishing business. Private respondents Boticario, et al
benefit of the other and recognition by them of were employed by them as stevedores.
the right of one to order and control the other
in the performance of the work and to direct 2. Boticario, and thirty (30) others, upon the premise that they are
the manner and method of its performance. petitioners' regular employees filed a complaint against the latter
for non-payment of overtime pay, premium pay, legal holiday pay,
Petitioner contends that the private respondents "did not meet emergency allowance, service incentive leave pay and night shift
the control test in the fight of the ... definition of the terms differential.
employer and employee, because there was no evidence to show
that petitioner had the right to direct the manner and method of 3. Claiming that they were dismissed from employment as a
respondent's work. 10 Moreover, it is argued that petitioner's retaliatory measure for their having filed the said complaint,
evidence showed that "Solano worked on a pakiaw basis" and private respondents filed another complaint against petitioners
that he stayed in the establishment only when there was work. for Illegal Dismissal and for Violation of Article 118 of the Labor
Code.

ISSUE: WON there existed an employee employer relation 4. In disputing any employer-employee relationship between
between petitioner DyKehBeng and the respondents Solano and them, petitioners contend that private respondents are contract
Tudla? laborers whose work terminated upon completion of each
unloading, and that in the absence of any boat arrivals, private
RULING: Yes. respondents did not work for petitioners but were free to work or
seek employment with other fishing boat operators.
Considering the finding by the Hearing Examiner that the
establishment of DyKehBeng is "engaged in the manufacture of 5. The NLRC ruled that there was an employment relations
baskets known as kaing, 13 it is natural to expect that those between the parties.
working under Dy would have to observe, among others, Dy's
requirements of size and quality of the kaing. Some control would
ISSUE
necessarily be exercised by Dy as the making of the kaing would
be subject to Dy's specifications. Parenthetically, since the work Whether or not there is an employer-employee relationship
on the baskets is done at Dy's establishments, it can be inferred between the parties, hence, entitling private respondents to legal
that the proprietor Dy could easily exercise control on the men he holiday pay, emergency living allowance, thirteenth month pay
employed. and incentive leave pay.
As to the contention that Solano was not an employee because he RULING
worked on piece basis, this Court agrees with the Hearing
Examiner that
YES. The issue of the existence of an employer-employee
circumstances must be construed to determine
relationship between the parties is actually a question of fact, and
indeed if payment by the piece is just a method
the finding of the NLRC on this point is binding upon us. Besides,
of compensation and does not define the
the continuity of employment is not the determining factor, but
essence of the relation. Units of time ... and
rather whether the work of the labourer is part of the regular
units of work are in establishments like
business or occupation of the employer.
respondent (sic) just yardsticks whereby to
determine rate of compensation, to be applied
whenever agreed upon. We cannot construe The employment contract signed by Antonio Boticario, which
payment by the piece where work is done in described him as "labor contractor", is not controlling in as much
such an establishment so as to put the worker as they were continually and uniformly paid their wages. He was
completely at liberty to turn him out and take merely asked by the petitioners to recruit other workers. Besides,
in another at pleasure. labor-contracting is prohibited under Sec.9 (b), Rule VIII, Book III
— Rules and Regulations Implementing the Labor Code as
in "Sunrise Coconut Products Co. v. Court of Industrial Relations" (83 amended.
Phil..518, 523), opined that
judicial notice of the fact that the so-called The activities performed by herein respondents, i.e. unloading the
"pakyaw" system mentioned in this case as catch of tuna fish from petitioner's vessel and then loading the
generally practiced in our country, is, in fact, a same to refrigerated vans, are necessary or desirable in the
labor contract -between employers and business of the latter. Moreover, considering the length of time
employees, between capitalists and laborers. that private respondents have worked for petitioner—since
1978—there is justification to conclude that they were engaged to
perform activities usually necessary or desirable in the usual
 4

business or trade of petitioners and are, therefore, regular of its political subdivisions, branches or instrumentalities, including
employees. As such, they are entitled to the benefits awarded corporations owned or controlled by the Government.
them by respondent NLRC.
Fourth, that a certain juridical entity is impressed with public
interest does not by that circumstance alone make the entity a
public corporation. This class of corporations may be considered
quasi-public corporations. The fact is that, almost all corporations
5. PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY
are nowadays created to promote the interest, good, or
TO ANIMALS VS. COA
convenience of the public.
FACTS:
Fifth, by virtue of the fiction that all corporations owe their very
existence and powers to the State, the reportorial requirement is
Petitioner was incorporated as a juridical entity by virtue of Act
applicable to all corporations of whatever nature, whether they
No. 1285 enacted on January 19, 1905. The object of petitioner as
are public, quasi-public, or private corporations—as creatures of
stated in its charter is to enforce laws relating to cruelty inflicted
the State, there is a reserved right in the legislature to investigate
to animals or the protection of animals in the Philippine islands.
the activities of a corporation to determine whether it acted
Act No. 1285 antedated the Corporation Law and Security and
within its powers.
Exchange Commission.

The petitioner was initially imbued with power to apprehend

6. FEATI
violators of animal welfare laws and to have ½ share of the fines
imposed and collected. However these powers were recalled by
virtue of CA No. 148. Pres. Manuel Quezon issued EO No. 63 in
1936 which provides “depriving the agents of the Society their 7. ASSOCIATED LABOR UNION, petitioner,
power to arrest persons who have violated the laws prohibiting vs.
cruelty to animals thereby correcting a serious defect in one of the JUDGE JOSE C. BORROMEO and ANTONIO LUA doing
laws existing in our statute books.” business under the name CEBU HOME & INDUSTRIAL
SUPPLY
On Dec.1, 2003, an audit team from COA conducted an audit
survey in the office of the petitioner. Petitioner demurred on the FACTS:
ground that it was a private entity not under the jurisdiction of
COA. COA on the other hand averred that petitioner is a ALU is a duly registered organization, among the members
government entity since it is a body politic created by virtue of a thereof are employees of superior gas and equipment company.
special legislation and endowed with a government purpose.
ALU AND SUGECO entered into a collective bargaining. However,
ISSUE: 12 of SUGECO members resigned from ALU. ALU requested to
SUGECO to not allow the said employees to report to work.
Whether petitioner qualifies as a government agency that may be SUGECO rejected the request.
subject to audit by COA? NO
ALU wrote to SUGECO of bargaining in bad faith.
HELD:
ALU struck and picketed in the SUGECO plant in Mandaue. Hence,
First, charter test cannot be applied in this case. “Charter test” is prompting SUGECO form filing a case against ALU with CFI of
the test to determine whether a corporation is government Cebu to restrain the same from picketing in the said plant and
owned or controlled or private in nature. Those with special office elsewhere in the Philippines.
charters are government corporations subject to its provisions
and its employees are under the jurisdiction of the CSC and CFI issued a preliminary injunction prayed by SUGECO.
compulsory members of GSIS. Since ‘charter test; had been
introduced by 1935 Constitution and not earlier, it follows that it ALU filed unfair labor practice against SUGECO with CIR, ALU file a
cannot apply to the petitioner which was created in 1905. motion for reconsideration of the issuance of injunction. CFI
denied the motion.
Second, a reading of petitioner’s charter shows that it is not
subject to control and supervision by any agency of the State, ALU filed a petition for certiorari and prohibitaion, prayed that CFI
unlike GOCCs. No government representative sits on the board of of Cebu has no jurisdiction over the case. SC annulled the
trustees of the petitioner, the successors of its members are injunction issued by CFI Cebu and directed to dismiss the case.
determined voluntarily and solely by the petitioner in accordance
The writ of injunction sought by ALU was granted May 16, 1966. ALUresumed
with its bylaws and may exercise those powers generally accorded
picketing and began to picket at the house of SUGECO's General
to private corporations.
Manager Mr. & Mrs. Lua andCebu Home store.
Third, the employees of the petitioner are registered and covered
Mr. Lua filed a complaint with CFI Cebu to restrain ALU from picketing the store
by SSS, not through GSIS. SSS Act defines the “employer” as – any
and residence and recover damages. Judge Borromeo issued an order requiring
person, natural or juridical, domestic or foreign who carries on in the
ALU to show cause orderwhy the writ should not be issued.
Philippines any trade, business, industry, undertaking or activity of
any kind and uses the services of another person who is under his
orders as regards the employment, except the Government and any
 5

ALU filed a motion to dismiss assailed the jurisdiction of CFI Cebu tohear the Besides, the ALU introduced evidence to the effect that the
case on the ground that it has grown out from a labor dispute. The SUGECO products had been brought to Cebu Home and were
judge denied the motion todismiss being distributed in the latter, as a means to circumvent, defeat or
minimize the adverse effects of the picketing conducted in the
respondents argue that the issue in the lower court does not fall SUGECO plant and offices in Mandaue and Cebu City respectively
within the jurisdiction of the CIR, there being no employer- by ALU.
employee relationship and "no labor dispute" between the ALU
members and Cebu Home; and that, at any rate, the SUGECO Respondent Judge seemed to be of the opinion that, for the
products distributed and sold by Cebu Home, came, not from the subject-matter of Case No. 9414 to be within the exclusive
SUGECO plant in Mandaue, but from other parts of the jurisdiction of the CIR, it was necessary to establish, as a fact, the
Philippines. Respondents further deny that the residence of Mr. truth of ALU's contention that respondents' premises were being
Lua was being used as a place to store and refill SUGECO gas for used as an outlet for SUGECO products.
resale. Such view suffers from a basic flaw. It overlooks the fact that the
jurisdiction of a court or quasi-judicial or administrative organ is
ISSUE: determined by the issues raised by the parties, not by their success
Who has jurisdiction over the case? CIR or failure in proving the allegations in their respective
pleadings.21 Said view would require the reception of proof, as a
RULING: condition precedent to the assumption of jurisdiction, when
Section 5 (a) of Republic Act No. 8758 vests in the Court of precisely jurisdiction must exist before evidence can be taken,
Industrial Relations exclusive jurisdiction over the prevention of since the authority to receive it is in itself an exercise of
any unfair labor practice. Moreover, for an issue "concerning jurisdiction. Moreover, it fails to consider that, to affect the
terms, tenure or conditions of employment, or concerning the jurisdiction of said court, or organ, the main requirement is that
association or representation of persons in negotiating, fixing, the issue raised be a genuine one. In other words, the question
maintaining, changing, or seeking to arrange terms or conditions posed must be one that is material to the right of action or which
of employment" to partake of the nature of a "labor dispute", it is could affect the result of the dispute or controversy.22 Such is,
not necessary that "the disputants stand in the proximate relation manifestly, the nature of ALU's contention in the lower court,
of employer and employee." which should have, accordingly, granted the motion to dismiss
and lifted the writs of preliminary injunction complained of.
In order to apply the provisions of Sec. 9 of Republic Act No. 875,
governing the conditions under which "any restraining order" or
"temporary or permanent injunction" may issue in any "case 8. REYNALDO BAUTISTA, petitioner, vs. HON. AMADO C.
involving or growing out of a labor dispute", it is not indispensable INCIONG, in his capacity as Deputy Minister of Labor
that the persons involved in the case be "employees of the same and ASSOCIATED LABOR UNIONS (ALU), respondents.
employer", although this is the usual case. Sec. 9,10 likewise, G.R. No. L-52824; March 16, 1988
governs cases involving persons: 1) "who are engaged in the same
industry, trade, craft, or occupation"; or 2) "who ... have direct or
FACTS:
indirect interests therein", or 3) "who are members of the same or
an affiliated organization of employers or employees"; or 4)
"when the case involves any conflicting or competing interests in This is an illegal dismissal case. The respondent Deputy Minister
a "labor dispute" (as hereinbefore defined) or "persons dismissed the complaint of herein petitioner principally on the
participating or interested" therein (as hereinafter defined)". ground that no employer-employee relationship existed between
Furthermore, "a person or association shall be held to be a person the petitioner and respondent Associated Labor Unions (ALU).
participating or interested in a labor dispute if relief is sought
against him or it" and "he or it is engaged in the same industry, Petitioner was employed by Associated Labor Unions(ALU) as
trade, craft, or occupation in which such dispute occurs, or has organizer. Bautista went on leave and when he went back to
a direct or indirect interest therein, or is a member, officer, or work, he was informed that he was already terminated. The
agent of any association composed in whole or in part of Director ruled in favor of Bautista.
employees or employers engaged in such industry, trade, craft, or
occupation." The Deputy Minister of Labor, however, set aside the order of the
Now, then, there is no dispute regarding the existence of a labor Director finding that his membership coverage with the SSS which
dispute between the ALU and SUGECO-Cebu; that SUGECO's shows that respondent ALU is the one paying the employer’s
general manager, Mrs. Lua, is the wife of the owner and manager share in the premiums is not conclusive proof that respondent is
of Cebu Home, Antonio Lua; and that Cebu Home is engaged in the petitioner’s employer because such payments were
the marketing of SUGECO products. It is, likewise, clear that as performed by the respondent as a favor for all those who were
managing member of the conjugal partnership between him and performing full time union activities with it to entitle them to SSS
his wife, Mr. Lua has an interest in the management by Mrs. Lua of benefits.y
the business of SUGECO and in the success or failure of her
controversy with the ALU, considering that the result thereof may
affect the condition of said conjugal partnership. Similarly, as a He then ruled that there was no employer-employee relationship
distributor of SUGECO products, the Cebu Home has, at least, an between ALU and Bautista by the fact that ALU is not an entity for
indirect interest in the labor dispute between SUGECO and the profit but a duly registered labor union whose sole purpose is the
ALU and in Case No. R-9221. In other words, respondents herein representation of its bonafide organization units.
have an indirect interest in said labor dispute.
 6

ISSUE: does not mean they were not employees of the respondent
company.
Whether or not there can be employer-employee relationship
between a labor union and its member. Petitioners are not independent contractors. Independent
Contractor is one who undertakes a ‘job contracting’; a person
who:
HELD:
a. carries on an independent business and undertakes the contract
work on his own account under his own responsibility according
Yes, the mere fact that the respondent is a labor union does not to his own manner and method, free from the control and
mean that it cannot be considered an employer of the persons direction of his employer or principal in all matters connected with
who work for it. the performance of the work except as to the results thereof; and
b. has substantial capital or investment in the form of tools,
Moreover, the four elements in determining the existence of an equipment, machineries, work premises, and other materials
employer-employee relationship was present in the case at bar. which are necessary in the conduct of the business.
The Regional Director correctly found that the petitioner was an
employee of the respondent union as reflected in the latter’s Petitioners did not undertake the work in their own manner and
individual payroll sheets and shown by the petitioner’s method, their service was engaged by the respondent company to
membership with the Social Security System (SSS) and the attend to the needs of its customers in its barber shop. They did
respondent union’s share of remittances in the petitioner’s favor. not have substantial capital or investment in the form of tools,
Bautista was selected and hired by the union. ALU had the power equipment, work premises and other materials which are
to dismiss him as indeed it dismissed him. And definitely, the necessary in the conduct of the business of the respondent
Union tightly controlled the work of Bautista as one of its company. They were not given work assignments in any place
organizers. other than at the work premises of the New Look Barber Shop,
and they were required to observe the rules and regulations of
respondent company.

9. OSIAS CORPORAL ET.AL. VS. NLRC The following elements must be present in an ER-EE relations:
1. selection and engagement of the workers;
FACTS: 2. power of dismissal;
3. payment of wages by whatever means; and
Petitioners were workers of the New Look Barber Shop owned by 4. power to control the worker’s conduct, with the latter
respondent Lao Enteng Co. Inc., some were barbers, and others assuming primacy in the overall consideration.
were manicurists, watcher and marketer. When Mr. Vicente Lao
died in 1982, his children organized a corporation registered as Lao The late Vicente Lao engaged the services of petitioners to work
Enteng Co. Inc. On 1995, the President of the corporation Trinidad in his shop. When his children organized a corporation, it took
Ong informed the petitioners that their services were no longer over the assets, equipment, and properties of the shop and
needed; that their building had been sold. continued the business, it retained the services of petitioners and
continuously paid their wages. Clearly all 3 elements exist. As to
Petitioners filed an illegal dismissal case with the NLRC. Private ‘control test’ petitioners:
respondent (PR) averred that petitioners were joint venture 1. worked in the barber shop owned and operated by PR
partners receiving 50% commission of the amount charged to 2. they were required to report daily and observe definite hours of
customers. Thus, no employer-employee relationship between work;
them existed. 3. they were not free to accept other employment elsewhere but
devoted their full time working in the barber shop;
Labor Arbiter ruled that petitioners were joint venture partners of 4. some have worked with PR as early as 1960;
PR. NLRC affirmed the findings of the Labor Arbiter; that 5. petitioner Nas was instructed by PR to watch over the other
petitioners failed to show existence of ER-EE relationship under workers.
the 4 way test; that it is a common practice in barber shop Petitioners were unarguably performing work necessary and
industry that barbers supply their own scissors and razors and desirable in the business of the respondent company.
they split their earnings with the owner of the shop; that the only
capital of the owner is the place of work whereas the barbers The PR, as employer, in the exercise of management prerogative,
provide the skill and expertise in servicing customers; that the may merge or consolidate its business with another, or sell or
only control exercised by the owner of the shop is to ascertain the dispose all or substantially all of its assets and properties which
number of customers serviced by the barber in order to determine may bring about the dismissal or termination of its employees in
the sharing of profits. the process. Petitioners are to be accorded the benefits under the
Labor Code.
ISSUE:

WON petitioners were employees of private respondent. YES

HELD:

The Labor Arbiter’s findings that the parties were engaged in a

joint venture is unsupported by any documentary evidence. The
sharing of proceeds for every job of petitioners in the barber shop
 7

10. C JO VS. NLRC, G.R. NO. 121605, FEBRUARY 2, 2000 commissioner advising their contracts would not be renewed
citing their unsatisfactory performance.
FACTS: PBA avers that complainants entered into two contracts of
retainers with them. After the lapse of the period, they decided
Private respondent working as a barber on piece-rate basis was not to renew their contracts. They contended that they were not
designated by petitioners as caretaker of their barbershop. Private illegally dismissed since they were not employees of them. Their
respondent’s duties as caretaker, in addition to his being a barber, retainer contracts were simply not renewed and they had the
were: 1) to report to the owners of the barbershop whenever the prerogative of whether or not to renew their contracts.
aircondition units malfunction and/or whenever water or electric
power supply was interrupted; 2) to call the laundry woman to ISSUE:
wash dirty linen; 3) to recommend applicants for interview and w/n petitioner is an ee of respondents, hence was illegally
hiring; 4) to attend to other needs of the shop. For this additional dismissed
job, he was given an honorarium equivalent to1/3 of the net
income of the shop. HELD.
NO. To determine the existence of an employer-employee
Private respondent left his job voluntarily because of his relationship, case law has consistently applied the four-fold test,
misunderstanding with his co-worker and demanded separation to wit:
pay and other monetary benefits. Petitioner’s contends that (a) the selection and engagement of the employee;
respondent was not their employee but their “partner in trade” (b) the payment of wages;
whose compensation was based on a sharing arrangement per (c) the power of dismissal; and
haircut or shaving job done. (d) the employer's power to control the employee on the means
and methods by which the work is accomplished.
ISSUE:
The so-called "control test" is the most important indicator of the
Whether or not there exist an employer-employee relationship.
presence or absence of an employer-employee relationship.
HELD:
Referees exercise their own independent judgment, based on the
Yes. rules of the game, as to when and how a call or decision is to be
made. The referees decide whether an infraction was committed,
In determining the existence of an employer-employee and the PBA cannot overrule them once the decision is made on
relationship, the following elements are considered: 1) selection the playing court. The referees are the only, absolute, and final
and engagement of worker; 2) power of dismissal; 3) the payment authority on the playing court. Respondents or any of the PBA
of wages; and 4) the power to control the worker’s conduct, with officers cannot and do not determine which calls to make or not
the latter assuming primacy in the overall consideration. The to make and cannot control the referee when he blows the
power of control refers to the existence of the power and not whistle because such authority exclusively belongs to the
necessarily to the actual exercise thereof. It is not essential for the referees. The very nature of petitioner’s job of officiating a
employer to actually supervise the performance of duties of the professional basketball game undoubtedly calls for freedom of
employee; it is enough that the employer has the right to wield control by respondents.
that power.
Moreover, the following circumstances indicate that petitioner is
Absent a clear showing that petitioners and private respondent an independent contractor: (1) the referees are required to report
had intended to pursue a relationship of industrial partnership, we for work only when PBA games are scheduled, which is three
entertain no doubt that private respondent was employed by times a week spread over an average of only 105 playing days a
petitioners as caretaker-barber. Initially, petitioners, as new year, and they officiate games at an average of two hours per
owners of the barbershop, hired private respondent as barber by game; and (2) the only deductions from the fees received by the
absorbing the latter in their employ. Undoubtedly, the services referees are withholding taxes.
performed by private respondent as barber is related to, and in
the pursuit of the principal business activity of petitioners. Later In other words, unlike regular employees who ordinarily report for
on, petitioners tapped private respondent to serve concurrently work eight hours per day for five days a week, petitioner is
as caretaker of the shop. Certainly, petitioners had the power to required to report for work only when PBA games are scheduled
dismiss private respondent being the ones who engaged the or three times a week at two hours per game. In addition, there
services of the latter. In fact, private respondent sued petitioners are no deductions for contributions to the Social Security System,
for illegal dismissal, albeit contested by the latter. Philhealth or Pag-Ibig, which are the usual deductions from
employees’ salaries. These undisputed circumstances buttress the
fact that petitioner is an independent contractor, and not an
employee of respondents.

11. BARNATE VS. PBA Furthermore, the applicable foreign case law declares that a
referee is an independent contractor, whose special skills and
FACTS: independent judgment are required specifically for such position
Barnate and Guevarra aver that they were invited to join the PBA and cannot possibly be controlled by the hiring party.
as referees. They were made to sign contracts on a year to year
basis. However changes were made on the terms of the
employment and until they received a letter from the Office of the
 8

12. RAUL G. LOCSIN and EDDIE B. TOMAQUIN, Petitioners, Both the Labor Arbiter and NLRC found that respondent did not
vs. observe such due process requirements. Having failed to do so,
PHILIPPINE LONG DISTANCE TELEPHONE respondent is guilty of illegal dismissal.
COMPANY, Respondent.
Note: labor-only contracting was discussed in this case
FACTS:
There is "labor-only" contracting where the person supplying
-Philippine Long Distance Telephone Company (PLDT) and the workers to an employer does not have substantial capital or
Security and Safety Corporation of the Philippines (SSCP) entered investment in the form of tools, equipment, machineries, work
into a Security Services Agreement (Agreement) whereby SSCP premises, among others, and the workers recruited and placed by
would provide armed security guards to PLDT to be assigned to its such person are performing activities which are directly related to
various offices. the principal business of such employer. In such cases, the person
or intermediary shall be considered merely as an agent of the
-Raul Locsin and Eddie Tomaquin, among other security guards, employer who shall be responsible to the workers in the same
were posted at a PLDT office. However, despite the termination of manner and extent as if the latter were directly employed by him.
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 13. CESARC.LIRIO, doing business under the name and style
of CELKORADSONICMIX- versus -WILMERD.GENOVIA
- Then, on September 30, 2002, petitioners’ services were
terminated. Thus, petitioners filed a complaint before the Labor FACTS
Arbiter for illegal dismissal and recovery of money
1. Respondent Genovia filed a complaint against petitioner Lirio
- The Labor Arbiter rendered a Decision finding PLDT liable for and/or CelkorAdSonicmix for illegal dismissal, non-payment of
illegal dismissal. It was explained in the Decision that petitioners commission and award of moral and exemplary damages.
were found to be employees of PLDT and not of SSCP
2. Genovia alleged, among others, that he was hired as studio
- The CA rendered the assailed decision granting PLDT’s petition
manager by Lirio, owner Celk or; that all the employees of
and dismissing petitioners’ complaint. It determined that SSCP
petitioner, including him, rendered overtime work almost
was not a labor-only contractor and was an independent
everyday, but petitioner never kept a daily time record to avoid
contractor having substantial capital to operate and conduct its
paying them overtime pay; that sometime, petitioner approached
own business.
him and told him about his project to produce an album for his
daughter, a former talent of ABS-CBN, and that he was not
ISSUE:
compensated for the same; that petitioner verbally terminated his
Whether petitioners became employees of respondent after the
services, and he was instructed not to report for work; that having
Agreement between SSCP and respondent was terminated? Yes
worked for more than six months, he was already a regular
employee, athough he was so called a "studio manager," because
RULING:
he had no managerial powers, and was merely an ordinary
While respondent and SSCP no longer had any legal relationship
employee.
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 3. Respondent’s evidence consisted of the Payroll, which was
no sense, and the denials proffered by respondent do not shed certified correct by petitioner, and Petty Cash Vouchers
any light to the situation. It is but reasonable to conclude that, evidencing receipt of payroll payments by respondent from
with the behest and, presumably, directive of respondent, Celkor.
petitioners continued with their services. Evidently, such
are indicia of control that respondent exercised over petitioners. 4. Petitioner asserted that, no employer-employee relationship
Such power of control has been explained as the "right to control existed between him and the respondent, and there was no illegal
not only the end to be achieved but also the means to be used in dismissal to speak of; that his relationship with respondent is one
reaching such end." With the conclusion that respondent directed of an informal partnership under the New Civil Code, since they
petitioners to remain at their posts and continue with their duties, agreed to contribute money, property or industry to a common
it is clear that respondent exercised the power of control over fund with the intention of dividing the profits among themselves;
them; thus, the existence of an employer-employee relationship. that he had no control over the time and manner by which
respondent composed or arranged the songs, except on the result
Jurisprudence is firmly settled that whenever the existence of an thereof; that espondent reported to the recording studio
employment relationship is in dispute, four elements constitute between 10:00a.m.and12:00noon.
the reliable yardstick: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; ISSUE
and (d) the employer’s power to control the employee’s conduct.
WON there existed an ER-EE relationship between the parties.
respondent having the power of control over petitioners must be
considered as petitioners’ employer––from the termination of the
Agreement onwards––as this was the only time that any evidence
of control was exhibited by respondent over petitioners and in
light of our ruling in Abella.
 9

RULING daily; and he was free to accept other work elsewhere as there
was no exclusivity of his contracted service to the company.
Yes. As between the documentary evidence presented by Genovia
and the mere allegation of Lirio without any proof by way of any ISSUE:
document evincing their alleged partnership agreement, the
former must prevail. Lirio's so-called existence of a partnership WON Javier was an employee of Fly Ace. NO
agreement was not substantiated and his assertion thereto, in the
face of complainant's evidence, constitute but a self-serving HELD:
assertion, without probative value, a mere invention to justify the
illegal dismissal. Javier failed to present substantial evidence to prove that he is an
employee of Fly Ace, had there been other proofs of employment
such as his inclusion in the payroll or a clear exercise of control,
Before a case for illegal dismissal can prosper, it must first be
the Court would have affirmed the finding of ER-EE relationship.
established that an employer-employee relationship existed
The onos probandi falls on petitioner to substantiate his claim. All
between petitioner and respondent. No particular form of
that Javier presented were his self-serving statements
evidence is required to prove the existence of an employer-
purportedly showing his activities as an employee of Fly Ace.
employee relationship. Any competent and relevant evidence to
prove the relationship may be admitted.
The lone affidavit executed by Valenzuela was unsuccessful in
strengthening Javier’s cause, all Valenzuala attested to was that
It is a well-settled doctrine, that if doubts exist between the he would frequently see Javier at the workplace where the latter
evidence presented by the employer and the employee, the scales was also hires as stevedore.
of justice must be tilted in favour of the latter. It is a time-honored
rule that in controversies between a labourer and his master, The elements of ER-EE relationship:
doubts reasonably arising from the evidence, or in the 1. selection and engagement of workers;
interpretation of agreements and writing should be resolved in 2. payment of wages;
the former’s favor. The policy is to extend the doctrine to a 3. power to dismiss; and
greater number of employees who can avail of the benefits under 4. power to control
the law, which is in consonance with the avowed policy of the The elements were not present in this case, there is no proof that
State to give maximum aid and protection of labor. This rule Fly Ace engaged the service of Javier as a regular employee, that
should be applied in the case at bar, especially since the evidence he was paid wages as an employee or that Fly Ace dictated what
presented by the private respondent company is not convincing. his conduct should be while at work.

Note: Payment by piece is just a method of compensation and

does not define the essence of relation; it does not negate regular
14. JAVIER VS. FLY ACE employment.
Article 97 LC defines wage as, remuneration or earnings, capable
FACTS: of being expressed in terms of money whether fixed or
ascertained on a time, task, piece or commission basis.
Javier filed a complaint before the NLRC for underpayment of
salaries and other labor standard benefits against Fly Ace. Fly Ace
is engaged in the service of delivering grocery items. Javier 15. VICENTE SY VS. CA
alleged that he performed tasks at respondent’s warehouse such
FACTS:
as cleaning and arranging canned items before their delivery; that
he worked as pahinente; that on May 6, 2008, he was no longer
Jaime Sahot was employed as truck helper for petitioners’ family
allowed to enter the company. He discovered that Mr. Ong had
trucking business and eventually became a truck driver. He
been courting her daughter, that her daughter convince Mr. Ong
continually served for 36 years throughout the changes of names
to spare her father from trouble, but Mr. Ong refused. To support
of the business of the petitioners. Until, April 1994, he had been
his allegations, Javier presented an affidavit of one Valenzuela
incurring absences as he was suffered from various ailments.
who alleged that Javier was a stevedore or pahinente of Fly Ace.
Particularly causing him pain was his left thigh, which greatly
affected the performance of his task as a driver. He filed a week
Fly Ace averred that Javier was contracted by its employee Mr.
long leave for medical examination and treatment and at the end
Ong as extra helper on a pakyaw basis at a rate of 300php per trip.
of it he applied for extension for one month.However, the
Fly Ace denied that Javier was their employee.
petitioner threaten him to terminate his employment should he
refuse to go back to work. And eventually carried out their threat
The Labor Arbiter dismissed the complaint for Javier failed to
and dismissed him from work. In view of that, Sahot filed before
present proof that he was a regular employee of Fly Ace.
the NLRC a complaint for illegal dismissal.
NLRC favoured Javier, it ruled that Javier was a regular employee Petitioners contended that Sahot was not illegally dismissed as
because there was reasonable connection between the particular driver because he was in fact petitioners’ industrial partner and
activity performed by pahinante in relation to the usual business also claimedthat it was Sahot who refused to work, that after the
or trade of the employee. expiration of his leave he never reported back to work nor did he
file an extension of his leave.
CA ruled that Javier was not an employee, he was not required to
observe definite hours of work; he was not required to report
 10

ISSUE: furnish an employee with two written notices before the latter is
dismissed: (1) the notice to apprise the employee of the particular
w/n an ee-er relationship existed between the petitioners and acts or omissions for which his dismissal is sought, which is the
respondent Sahot. equivalent of a charge; and (2) the notice informing the employee
of his dismissal, to be issued after the employee has been given
RULING: reasonable opportunity to answer and to be heard on his
defense.33 These, the petitioners failed to do, even only for
Yes. Private respondent, for his part, denies that he was ever an record purposes. What management did was to threaten the
industrial partner of petitioners. There was no written agreement, employee with dismissal, then actually implement the threat when
no proof that he received a share in petitioners’ profits, nor was the occasion presented itself because of private respondent’s
there anything to show he had any participation with respect to painful left thigh.
the running of the business.18
Both the substantive and procedural aspects of due process were
The elements to determine the existence of an employment violated. Clearly, therefore, Sahot’s dismissal is tainted with
relationship are: (a) the selection and engagement of the invalidity.
employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer’s power to control the employee’s conduct.
The most important element is the employer’s control of the
employee’s conduct, not only as to the result of the work to be 16. ENCYCLOPAEDIA BRITANNICA (PHILIPPINES),
done, but also as to the means and methods to accomplish it. INC., petitioner,
vs.
Petitioners owned and operated a trucking business since the NATIONAL LABOR RELATIONS COMMISSION, HON.
1950s and by their own allegations, they determined private LABOR ARBITER TEODORICO L. ROGELIO and
respondent’s wages and rest day. Records of the case show that BENJAMIN LIMJOCO, respondents.
private respondent actually engaged in work as an employee.
During the entire course of his employment he did not have the FACTS:
freedom to determine where he would go, what he would do, and Private respondent Benjamin Limjoco was a Sales Division
how he would do it. He merely followed instructions of petitioners Manager of petitioner Encyclopaedia Britannica/
and was content to do so, as long as he was paid his wages. While
it was very obvious that complainant did not have any intention to As compensation, private respondent received commissions from
report back to work due to his illness which incapacitated him to the products sold by his agents. He was also allowed to use
perform his job, such intention cannot be construed to be an petitioner's name, goodwill and logo. It was, however, agreed
abandonment. Instead, the same should have been considered as upon that office expenses would be deducted from private
one of those falling under the just causes of terminating an respondent's commissions.
employment.
private respondent Limjoco resigned from office to pursue his
Article 284 of the Labor Code authorizes an employer to terminate private business. Then on October 30, 1975, he filed a complaint
an employee on the ground of disease, : against petitioner Encyclopaedia Britannica with the Department
of Labor and Employment, claiming for non-payment of
Art. 284. Disease as a ground for termination- An employer may separation pay and other benefits, and also illegal deduction from
terminate the services of an employee who has been found to be his sales commissions.
suffering from any disease and whose continued employment is
prohibited by law or prejudicial to his health as well as the health Petitioner Encyclopaedia Britannica alleged that complainant
of his co-employees: xxx Benjamin Limjoco (Limjoco, for brevity) was not its employee but
an independent dealer authorized to promote and sell its products
However, in order to validly terminate employment on this
and in return, received commissions therefrom. Limjoco did not
ground, Book VI, Rule I, Section 8 of the Omnibus Implementing
have any salary and his income from the petitioner company was
Rules of the Labor Code requires:
dependent on the volume of sales accomplished. He also had his
own separate office, financed the business expenses, and
Sec. 8. Disease as a ground for dismissal- Where the employee
maintained his own workforce. The salaries of his secretary, utility
suffers from a disease and his continued employment is
man, and sales representatives were chargeable to his
prohibited by law or prejudicial to his health or to the health of his
commissions. Thus, petitioner argued that it had no control and
co-employees, the employer shall not terminate his employment
supervision over the complainant as to the manner and means he
unless there is a certification by competent public health authority
conducted his business operations. The latter did not even report
that the disease is of such nature or at such a stage that it cannot
to the office of the petitioner and did not observe fixed office
be cured within a period of six (6) months even with proper
hours. Consequently, there was no employer-employee
medical treatment. If the disease or ailment can be cured within
relationship.
the period, the employer shall not terminate the employee but
Limjoco maintained otherwise.
shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position immediately upon
The Commission opined that there was no evidence supporting
the restoration of his normal health.
the allegation that Limjoco was an independent contractor or
In the case at bar, the employer clearly did not comply with the dealer. The petitioner still exercised control over Limjoco through
medical certificate requirement before Sahot’s dismissal was its memoranda and guidelines and even prohibitions on the sale of
effected and also the procedural aspect of due process was not products other than those authorized by it. In short, the petitioner
complied with by the employer. Since the employer is required to company dictated how and where to sell its products.
 11

services would no longer be required effective July 30, 1999.

ISSUE: Thus, the filing of this complaint.
WON there is an employer-employee relationship between
petitioner and respondent? Yes Petitioner denied the existence of an employer-employee
relationship with respondent, insisting that he had been only a
RULING: talent engaged to provide live music for three hours on days each
In determining the existence of an employer-employee week and that the economic crisis that had hit the country
relationship the following elements must be present: 1) selection constrained the management to dispense with his services.
and engagement of the employee; 2) payment of wages; 3) power
of dismissal; and 4) the power to control the employee's conduct. ISSUE:
Of the above, control of employee's conduct is commonly
regarded as the most crucial and determinative indicator of the w/n there is er-ee relationship between the parties. Thus, Roa was
presence or absence of an employer-employee illegally dismissed.
relationship. Under the control test, an employer-employee
relationship exists where the person for whom the services are HELD:
performed reserves the right to control not only the end to be
YES. Employer-employee relationship existed between the parties.
achieved, but also the manner and means to used in reaching that
end
Roa was undeniably employed as a pianist of the restaurant. The
hotel wielded the power of selection at the time it entered into
The fact that petitioner issued memoranda to private respondents
the service contract dated Sept. 1, 1992 with Roa. The hotel could
and to other division sales managers did not prove that petitioner
not seek refuge behind the service contract entered into with
had actual control over them. The different memoranda were
Roa. It is the law that defines and governs an employment
merely guidelines on company policies which the sales managers
relationship, whose terms are not restricted to those fixed in the
follow and impose on their respective agents.
written contract, for other factors, like the nature of the work the
employee has been called upon to perform, are also considered.
Private respondent was not an employee of the petitioner
company. While it was true that the petitioner had fixed the prices The law affords protection to an employee, and does not
of the products for reason of uniformity and private respondent countenance any attempt to subvert its spirit and intent. Any
could not alter them, the latter, nevertheless, had free rein in the stipulation in writing can be ignored when the employer utilizes
means and methods for conducting the marketing operations. He the stipulation to deprive the employee of his security of tenure.
selected his own personnel and the only reason why he had to The inequality that characterizes employer-employee relationship
notify the petitioner about such appointments was for purpose of generally tips the scales in favor of the employer, such that the
deducting the employees' salaries from his commissions. This he employee is often scarcely provided real and better options.
admitted in his testimonies.
The argument that Roa was receiving talent fee and not salary is
Private respondent was merely an agent or an independent dealer baseless. There is no denying that the remuneration denominated
of the petitioner. He was free to conduct his work and he was free as talent fees was fixed on the basis of his talent, skill, and the
to engage in other means of livelihood. At the time he was quality of music he played during the hours of his performance.
connected with the petitioner company, private respondent was Roa’s remuneration, albeit denominated as talent fees, was still
also a director and later the president of the Farmers' Rural Bank. considered as included in the term wage in the sense and context
Had he been an employee of the company, he could not be of the Labor Code, regardless of how petitioner chose to
employed elsewhere and he would be required to devote full time designate the remuneration, as per Article 97(f) of the Labor
for petitioner. Code.

There is nothing in the records to show or would "indicate that The power of the employer to control the work of the employee
complainant was under the control of the petitioner" in respect of is considered the most significant determinant of the existence of
the means and methods 8 in the performance of complainant's an employer-employee relationship. This is the so-called control
work. test and is premised on whether the person for whom the services
are performed reserves the right to control both the end achieved
and the manner and means used to achieve that end.
17. LEGEND HOTEL MANILA VS. HERNANI S. REALUYO
ALSO KNOWN AS JOEY ROA

FACTS:

Joey Roa files a case of illegal dismissal against the petitioner. He

averred that he worked as a pianist of the latter at the rate of
400/night and eventually increased to 750/night given to him after
each performance. During his employment he cannot choose the
time of his performance which is fixed 7-10pm that is 3 to 6 times
in a week. He was also required to conform to the venue’s motif
and he had been subjected to the rules on employees, privileges
granted to other employees. Until on July 9, 1999 he was notified
by the management that by reason of cost cutting measure his
 12

18. JAVIER VS. FLY ACE Note: Payment by piece is just a method of compensation and
does not define the essence of relation; it does not negate regular
FACTS: employment.
Article 97 LC defines wage as, remuneration or earnings, capable
Javier filed a complaint before the NLRC for underpayment of of being expressed in terms of money whether fixed or
salaries and other labor standard benefits against Fly Ace. Fly Ace ascertained on a time, task, piece or commission basis.
is engaged in the service of delivering grocery items. Javier
alleged that he performed tasks at respondent’s warehouse such
as cleaning and arranging canned items before their delivery; that
he worked as pahinente; that on May 6, 2008, he was no longer 19. LIRIO VS GENOVIA
allowed to enter the company. He discovered that Mr. Ong had
been courting her daughter, that her daughter convince Mr. Ong FACTS:
to spare her father from trouble, but the Mr. Ong refused. To
support his allegations, Javier presented an affidavit of one Respondent Genovia was hired by petitioner Lirio as
Valenzuela who alleged that Javier was a stevedore or pahinente studio manager to manage and operate Celkor Ad Sonicmix
of Fly Ace. Recording Studio (Celkor) and to promote and sell the recording
studio’s services to music enthusiasts and other prospective
Fly Ace averred that Javier was contracted by its employee Mr. clients. He was made to work from Monday to Friday from 9:00
Ong as extra helper on a pakyaw basis at a rate of 300php per trip. a.m. to 5:00 p.m. On Saturdays, he was required to work half-day,
Fly Ace denied that Javier was their employee. but most of the time he rendered eight hours of work or more. He
rendered overtime work almost everyday, but petitioner never
The Labor Arbiter dismissed the complaint for Javier failed to kept a daily time record.
present proof that he was a regular employee of Fly Ace.
Few days later, petitioner approach respondent and
NLRC favoured Javier, it ruled that Javier was a regular employee asked him to compose and arrange songs for the latter’s 15-yr-old
because there was reasonable connection between the particular daughter and promised that he (petitioner Lirio) would draft a
activity performed by pahinante in relation to the usual business contract to assure respondent of his compensation for such
or trade of the employee. services.

CA ruled that Javier was not an employee, he was not required to By mid-November 2001, respondent finally finished the
observe definite hours of work; he was not required to report compositions and musical arrangements of the songs to be
daily; and he was free to accept other work elsewhere as there included in the album. Before the month ended, the lead and
was no exclusivity of his contracted service to the company. back-up vocals in the ten (10) songs were finally recorded and
completed.Thereafter, respondent was tasked by petitioner to
ISSUE: prepare official correspondence, establish contacts and negotiate
with various radio stations, malls, publishers, record companies
WON Javier was an employee of Fly Ace. NO and manufacturers, record bars and other outlets in preparation
for the promotion of the said album. By early February 2002, the
HELD: album was in its manufacturing stage. ELECTROMAT,
manufacturer of CDs and cassette tapes, was tapped to do the
Javier failed to present substantial evidence to prove that he is an job. The carrier single of the album, which respondent composed
employee of Fly Ace, had there been other proofs of employment and arranged, was finally aired over the radio on February 22,
such as his inclusion in the payroll or a clear exercise of control, 2002.
the Court would have affirmed the finding of ER-EE relationship.
The onos probandi falls on petitioner to substantiate his claim. All On February 26, 2002, respondent again reminded
that Javier presented were his self-serving statements petitioner about the contract on his compensation as composer
purportedly showing his activities as an employee of Fly Ace. and arranger of the album. Petitioner told respondent that since
he was practically a nobody and had proven nothing yet in the
The lone affidavit executed by Valenzuela was unsuccessful in music industry, respondent did not deserve a high compensation,
strengthening Javier’s cause, all Valenzuala attested to was that and he should be thankful that he was given a job to feed his
he would frequently see Javier at the workplace where the latter family. Petitioner informed respondent that he was entitled only
was also hires as stevedore. to 20% of the net profit, and not of the gross sales of the album,
and that the salaries he received and would continue to receive as
The elements of ER-EE relationship: studio manager of Celkor would be deducted from the said 20%
1. selection and engagement of workers; net profit share. Respondent objected and insisted that he be
2. payment of wages; properly compensated. On March 14, 2002, petitioner verbally
3. power to dismiss; and terminated respondent’s services, and he was instructed not to
4. power to control report for work.
The elements were not present in this case, there is no proof that
Fly Ace engaged to service of Javier as a regular employee, that he
On July 9, 2002, respondent Wilmer D. Genovia filed a
was paid wages as an employee or that Fly Ace dictated what his
complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix
conduct should be while at work.
Recording Studio for illegal dismissalwithout any valid grounds,
and no hearing was conducted before he was terminated, in
violation of his constitutional right to due process.
 13

Petitioner contended that no employer-employee

relationship existed between him and the respondent, and there
was no illegal dismissal to speak of.

ISSUE:

WON there existed an employer-employee relationship

RULING:

Yes.

It is settled that 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.

The documentary evidence presented by respondent to

prove that he was an employee of petitioner are as follows: (a) a
document denominated as "payroll" certified correct by
petitioner, which showed that respondent received a monthly
salary of P7,000.00 with the corresponding deductions due to
absences incurred by respondent; and (2) copies of petty cash
vouchers, showing the amounts he received and signed for in the
payrolls.

The said documents showed that petitioner hired

respondent as an employee and he was paid monthly wages
of P7,000.00. Petitioner wielded the power to dismiss as
respondent stated that he was verbally dismissed by petitioner.
The power of control refers merely to the existence of the
power. It is not essential for the employer to actually supervise
the performance of duties of the employee, as it is sufficient that
the former has a right to wield the power.

It is a well-settled doctrine, that if doubts exist between

the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter. It is a time-
honored rule that in controversies between a laborer and his
master, doubts reasonably arising from the evidence, or in the
interpretation of agreements and writing should be resolved in
the former’s favor. The policy is to extend the doctrine to a
greater number of employees who can avail of the benefits under
the law, which is in consonance with the avowed policy of the
State to give maximum aid and protection of labor

In termination cases, the burden is upon the employer to

show by substantial evidence that the termination was for lawful
cause and validly made. Article 277 (b) of the Labor Code puts the
burden of proving that the dismissal of an employee was for a
valid or authorized cause on the employer, without distinction
whether the employer admits or does not admit the dismissal. For
an employee’s dismissal to be valid, (a) the dismissal must be for a
valid cause, and (b) the employee must be afforded due process.
Petitioner failed to comply with these legal requirements; hence,
respondent was illegally dismissed.