LABOR LAW

CASE DIGESTS

Lupac, Lenette C.
JD3
 MARCOPPER MINING CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, NATIONAL MINES & ALLIED WORKERS UNION, and
HEIRS OF CALIXTO C. GAMBOA, PETRONIO Q. ROBLES, and ALFREDO B.
RANCES, respondents.
G.R. No. 83207               August 5, 1991
CRUZ, J.:
Facts:
Three employees of the petitioner company, namely, Calixto Gamboa, Petronio Robles
and Alfredo Rances, died after serving therein for 17, 12, and 18 years respectively. Pursuant to
the CBA, the petitioner paid the heirs of the deceased employees the proceeds of the group life
insurance plan and the cash value of their unused vacation and sick leaves, besides waiving
certain amounts owing to it by Rances and Robles. NAMAWU demanded from the petitioner
severance pay for the said deceased employees on the basis of the above-cited Article XII,
Section 1, of the CBA. The demand was rejected and the union thereupon filed a complaint on
behalf of the heirs for the recovery of the said claim. The Labor Arbiter rendered a decision
ordering the respondent to pay the heirs of Calixto Gamboa, Alfredo Rances and Petronio
Robles, all represented by herein complainant union, separation pay equivalent to twenty days
salary for every year of service. The petitioner appealed to the NLRC which affirmed the
decision of the Labor Arbiter. Hence this petition.
Issue:
Whether or not respondents are entitled to separation pay in accordance with the
provision in the CBA.
Ruling:
No. Article 4 of the Labor is applied in this case in connection with Article 1702 of the
Civil Code. The quitclaims/releases, while concededly made voluntarily, did not constitute a
knowing waiver of the severance pay because the heirs of the deceased employees were not
aware at that time that they were entitled to such pay. On the contrary, the private respondents
should be properly grateful therefor because these would not have been available at all if the
petitioner had not paid the premiums on the group insurance of its employees, who have not
contributed a single centavo for such payment. Nevertheless, the insurance benefits do not
exclude the severance pay as there is no clear agreement on that point nor has the petitioner
pointed to any law or rule clearly providing for such exclusion. The petitioner has acted in
complete good faith in this case and that its position is based on a sincere and even reasonable
interpretation of the section in question. Also, Marcopper should be commended for its treatment
of the heirs of the deceased employees, particularly Rances and Robles, whose respective
accountabilities in the amounts of P33,594.68 and P15,739.55 it voluntarily and graciously wrote
off as a gesture of good will and generosity. This speaks well of its attitude toward its loyal
employees, who for their part appear to be appreciative enough albeit they cannot yield on this
question before us.
 PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner vs. HON.
FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D.
ACHACOSO, as Administrator of the Philippine Overseas Employment
Administration, respondents.
G.R. No. 81958 June 30, 1988
SARMIENTO, J.:
Facts:
The petitioner, engaged principally in the recruitment of Filipino workers, male and
female, for overseas placement, challenges the Constitutional validity of Department Order No.
1, Series of 1988, of the Department of Labor and Employment. The Solicitor General, on behalf
of the respondents Secretary of Labor and Administrator of the Philippine Overseas Employment
Administration, filed a Comment informing the Court that on March 8, 1988, the respondent
Labor Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada,
Hongkong, United States, Italy, Norway, Austria, and Switzerland. It is held likewise to be an
invalid exercise of the lawmaking power, police power being legislative, and not executive, in
character. In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation in policy and decision-making processes
affecting their rights and benefits as may be provided by law and that it was passed in the
absence of prior consultations.
Issue:
Whether the Department Order of the Respondent is in violation of the Equal Protection
Clause.
Ruling:
No. There is no question that Department Order No. 1 applies only to "female contract
workers," but it does not thereby make an undue discrimination between the sexes. Under the
Constitution it has the following classifications: (1) such classifications rest on substantial
distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing
conditions; and (4) they apply equally to all members of the same class. In the case at bar, the
classification made-the preference for female workers rests on substantial distinctions. Filipina
female workers are subjected to tortures as well as male workers who have been afflicted with
the same predicament. Such a classification is germane to the purpose behind the measure. The
objective of Department Order No. 1 is to "enhance the protection for Filipino female overseas
workers" this Court has no quarrel that in the midst of the terrible mistreatment Filipina workers
have suffered abroad, a ban on deployment will be for their own good and welfare. What the
Constitution prohibits is the singling out of a select person or group of persons within an existing
class, to the prejudice of such a person or group or resulting in an unfair advantage to another
person or group of persons. The Government has not indiscriminately made use of its authority.
It is not contested that it has in fact removed the prohibition with respect to certain countries as
manifested by the Solicitor General.
 BLUE MANILA, INC. and/or OCEANWIDE CREW MANILA, INC., Petitioners, -
versusANTONIO R. JAMIAS, Respondent. x------------------------------------------x ANTONIO
R. JAMIAS, Petitioner, G.R. No. 230919
G.R. No. 230932
Present: -versus-PERLAS-BERNABE, S.A.J., BLUE MANILA, INC. and/or
OCEANWIDE CREW MANILA, INC., Respondents.
LOPEZ, J.:
Facts:
Petitioner Bluemanila and/or Oceanwide Crew Manila are the former and present
manning agent of Wagenboard Crew Management BV/The Netherlands owner of the vessel M/V
Kwintebank. That Antonio Jamias is a seafarer and he worked for the petitioners since 1998 and
on Feb 2011, he was rehired as a cook in Blue Manila and it was covered by the CBA between
Associated Marine Officers, Seamen’s Union of the Philippines and Wagerboard. That as a cook
he has the following tasks: To cook food, including desserts and pies, to maintain the cleanliness
of the area, equipment and kitchen tools, to clean, wash and paint gallery as well as to sweep the
garbage disposed from the freezers daily, to receive food and delivery and arrange it inside, to
paint and chip rust on deck, deckhand on various repairs and maintenance and such other work
that his superior might require. That aside from that work, he also has the duty with regard to
manual work such as the pushing, lifting and carrying heavy provision on board of the vessel.
That while he was working, he coughed which triggered the pain in his umbilical area. That
while he was lifting 2 sacks of potatoes, he felt an excruciating pain in his waist area and that he
rested and waited for the pain to subside before finishing all his work. After a few days, he
complained of abdominal pain in his umbilical area so the ship captain ordered that he be
brought to the Hospital in Norway in which he was diagnosed with Constipation and Umbilical
Hernia. The doctor stated that he should not return to work so he was signed off from the vessel
and he was repatriated to Manila and was admitted to Manila Doctors Hospital and the company
designated physician suggested that he undergo a MRI of the lumbosacral spine. On Sept 2011,
he had a surgery for the umbilical hernia which cleared his abdominal pain. However, his lower
back pain persisted and he asked the local manning agent that he be medically evaluated,
however the agent told him that he be submitted to PEME. So, he wrote to petitioners 2 letters
that he be submitted to medical evaluation but he did not receive any reply from the petitioner
which resorted him to consult another doctor and that is Dr. Runas who is an orthopedic
specialist. Upon examination of Dr. Runas he confirmed that Jamias was suffering from a
Central Broad Disc Herniation which is a Grade 8 disability in POEA Contract. Dr. Runas
declared that his impediment renders him to be unfit to resume his occupation, so Jamias resorted
to Voluntary Arbitration and he demanded the payment of disability benefit from petitioners.
Issue:
Whether or not Jamias broad based herniated disc which is causing the low back pain, is
a necessary consequence, or even remotely related to his umbilical hernia that had already been
medically resolved.
Ruling:
No. While Jamias umbilical hernia was medically resolved by the surgery, the seafarer’s
back ailment was never attended by the designated company physician. Even if Jaimas was
medically repatriated due to his umbilical hernia, this does not mean that the post -employment
medical assessment and treatment should be confined to this ailment. There is nothing in the
SEC 20 (A) of the POEA-SEC or the CBA, that the medical attention to be extended to the
seafarer must pertain only to the cause of repatriation. In the case at bar, Jamias was seen by the
company designated physician one day after his arrival and ordered a test for MRI of
lumbosacral spine. That the ordering of the physician of the said MRI it already concluded that
Jamias was already suffering from low back pains and he brought this to the attention of the
attending physician. That any illness complained during the PEME is deemed existing during the
term of the seafarer’s employment and thus the employer is liable. Petitioners' liability for
Jamias' low back pain was indubitably established after the third doctor confirmed that he is
suffering from this back ailment. Jamia’s' Degenerative Disc Disease, or osteoarthritis is an
ailment listed as an occupational disease under the POEA-SEC. Degenerative disc disease is a
spinal condition caused by the breakdown of the intervertebral discs which results in the loss of
flexibility and ability to cushion the spine.
Under Section 32-A (21) of the 2010 POEA-SEC,34 osteoarthritis is considered as an
occupational disease when contracted in any occupation involving any of the following: (a.) Joint
strain from carrying heavy loads, or unduly heavy physical labor, as among laborers and
mechanics; (b.) Minor or major injuries to the joint; (c.) Excessive use or constant strenuous
usage of a particular joint, as among sportsmen, particularly those who have engaged in the more
active sports activities; (d.) Extreme temperature changes (humidity, heat, and cold exposures);
and (e.) Faulty work posture or use of vibratory tools. In this case, Jamias job as cook primarily
includes the duty to carry heavy food provisions. His work necessarily involves constant
strenuous use of his lower spine in cleaning work areas, equipment, kitchen tools, and cold
rooms; and lifting food stores and restocking these inside the ship's walk-in freezers.
In Olidana v. Jebsens Maritime, Inc., we explained that the disability gradings under
Section 32 of the POEA-SEC, only comes into play if there is a valid and timely medical report
of a company-designated physician. Since there was no complete medical assessment for Jamias'
back ailment issued by the company-designated physician in this case, the disability grading to
be issued by a third doctor is rendered unnecessary. On a separate note, we share the CA' s
observation that the PV A unduly limited the issue to be resolved by the third doctor chosen by
the parties, to "whether respondent's broad-based herniated disc at L5-SJ which is causing the
moderate to low back pain is a necessary consequence or even remotely related to his umbilical
hernia that had already been medically resolved.
 ANTONIO M. SERRANO, Petitioner, vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO.,
INC., Respondents.
G.R. No. 167614               March 24, 2009
Facts:
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
(respondents) under a Philippine Overseas Employment Administration (POEA)-approved
Contract of Employment. On his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00,
upon the assurance and representation of respondents that he would be made Chief Officer by the
end of April 1998. Respondents did not deliver on their promise to make petitioner Chief
Officer. Hence, petitioner refused to stay on as Second Officer and was repatriated to the
Philippines on May 26, 1998. Petitioner's employment contract was for a period of 12 months or
from March 19, 1998 up to March 19, 1999, but at the time of his repatriation on May 26, 1998,
he had served only two (2) months and seven (7) days of his contract, leaving an unexpired
portion of nine (9) months and twenty-three (23) days. Petitioner filed with the Labor Arbiter a
complaint against respondents for constructive dismissal and for payment of his money claims in
the total amount of US$26,442.73. The LA rendered a Decision declaring the dismissal of
petitioner illegal and awarding him monetary benefits in the amount of (US $8,770.00) for three
(3) months of the unexpired portion of the aforesaid contract of employment and was likewise
ordered to pay the petitioner the amount of (US$ 45.00) representing the complainant’s claim for
a salary differential. Respondents appealed to the NLRC but the findings of LA was affirmed.
Issue:
1. Whether or not the subject clause violates Section 10, Article III of the Constitution
on non-impairment of contracts?
2. Whether or not the subject clause violates Section 1, Article III of the Constitution,
and Section 18, Article II and Section 3, Article XIII on labor as a protected sector
Ruling:
1. No. Under Section 10, Article III of the Constitution provides: No law impairing the
obligation of contracts shall be passed. The enactment of R.A. No. 8042 in 1995
preceded the execution of the employment contract between petitioner and
respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly the
subject clause, impaired the employment contract of the parties. Rather, when the
parties executed their 1998 employment contract, they were deemed to have
incorporated into it all the provisions of R.A. No. 8042. The subject clause may not
be declared unconstitutional on the ground that it impinges on the impairment clause,
for the law was enacted in the exercise of the police power of the State to regulate a
business, profession or calling, particularly the recruitment and deployment of OFWs,
 with the noble end in view of ensuring respect for the dignity and well-being of
OFWs wherever they may be employed. Police power legislations adopted by the
State to promote the health, morals, peace, education, good order, safety, and general
welfare of the people are generally applicable not only to future contracts but even to
those already in existence, for all private contracts must yield to the superior and
legitimate measures taken by the State to promote public welfare.
2. Yes. Section 1, Article III of the Constitution guarantees: No person shall be deprived
of life, liberty, or property without due process of law nor shall any person be denied
the equal protection of the law. Such rights are not absolute but subject to the inherent
power of Congress to incorporate, when it sees fit, a system of classification into its
legislation; however, to be valid, the classification must comply with these
requirements: 1) it is based on substantial distinctions; 2) it is germane to the
purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies
equally to all members of the class. In the case at bar, the challenged proviso operates
on the basis of the salary grade or officer-employee status. It is akin to a distinction
based on economic class and status, with the higher grades as recipients of a benefit
specifically withheld from the lower grades. Officers of the BSP now receive higher
compensation packages that are competitive with the industry, while the poorer, low-
salaried employees are limited to the rates prescribed by the SSL. The implications
are quite disturbing: BSP rank-and-file employees are paid the strictly regimented
rates of the SSL while employees higher in rank - possessing higher and better
education and opportunities for career advancement - are given higher compensation
packages to entice them to stay. Considering that majority, if not all, the rank-and-file
employees consist of people whose status and rank in life are less and limited,
especially in terms of job marketability, it is they - and not the officers - who have the
real economic and financial need for the adjustment. This is in accord with the policy
of the Constitution "to free the people from poverty, provide adequate social services,
extend to them a decent standard of living, and improve the quality of life for all."
Any act of Congress that runs counter to this constitutional desideratum deserves
strict scrutiny by this Court before it can pass muster.
 JOSE Y. SONZA, petitioner vs.
ABS-CBN BROADCASTING CORPORATION, respondent.
G.R. No. 138051             June 10, 2004
CARPIO, J.:
Facts:
Respondent ABS-CBN signed an Agreement with the Mel and Jay Management and
Development Corporation. ABS-CBN was represented by its corporate officers while MJMDC
was represented by SONZA, as President and General Manager, and Carmela Tiangco as EVP
and Treasurer. Referred to in the Agreement as Agent, MJMDC agreed to provide SONZA’s
services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay for
SONZA’s services a monthly talent fee of ₱310,000 for the first year and ₱317,000 for the
second and third year of the Agreement. ABS-CBN would pay the talent fees on the 10th and
25th days of the month. SONZA filed a complaint against ABS-CBN before the DOLE that
ABS-CBN did not pay his salaries, separation pay, service incentive leave pays, 13th month pay,
signing bonus, travel allowance and amounts due under the Employees Stock Option Plan. ABS-
CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed
between the parties. SONZA filed an Opposition to the motion. ABS-CBN continued to remit
SONZA’s monthly talent fees through his account at PCIBank. Then, ABS-CBN opened a new
account with the same bank where ABS-CBN deposited SONZA’s talent fees and other
payments due him under the Agreement. The Labor Arbiter rendered his decision dismissing the
complaint for lack of jurisdiction. Sonza appealed to NLRC but affirmed the decision of the
Labor Arbiter. Sonza filed a special civil action for certiorari before the Court of Appeals, but the
CA dismissed the case. Hence, this petition.
Issue:
Whether or not there is an employer-employee relationship between SONZA and ABS-
CBN.
Ruling:
No. Control test must be present in order for employer-employee relationship to exist.
Under the control test, Sonza is not an employee but an independent contractor. In the case at
bar, ABS-CBN was not involved in the actual performance that produced the finished product of
Sonza’s work. 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-CBN’s 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 Sonza’s work. His contention that ABS-CBN not only control his manner of work but the
quality of his work is unfounded as agreement stipulates that Sonza shall abide with the rules and
standards of performance "covering talents" of ABS-CBN. The Agreement does not require
Sonza to comply with the rules and standards of performance prescribed for employees of ABS-
CBN. Clearly, the rules and standards of performance referred to in the Agreement are those
applicable to talents and not to employees of ABS-CBN. Therefore, no employer-employee
relationship exists as he is an independent contractor.
 JOSE MEL BERNARTE, Petitioner,
vs.
PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EMMANUEL M. EALA, and
PERRY MARTINEZ, Respondents.

G.R. No. 192084               September 14, 2011

CARPIO, J.:
Facts:
Complainants Jose Mel Bernarte and Renato Guevarra aver that they were invited to join
the PBA as referees. They were made to sign contracts on a year-to-year basis. During the term
of Commissioner Eala, however, changes were made on the terms of their employment when
Bernarte, was not made to sign a contract during the first conference of the All-Filipino Cup and
it was only during the second conference when he was made to sign a one-and-a-half-month
contract for the period July 1 to August 5, 2003. Bernarte received a letter from the Office of the
Commissioner advising him that his contract would not be renewed citing his unsatisfactory
performance on and off the court. Complainant Guevarra alleges that he was invited to join the
PBA pool of referees in February 2001. On March 1, 2001, he signed a contract as trainee. Then
on 2003, respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over
his questioning on the assignment of referees officiating out-of-town game and beginning
February 2004, he was no longer made to sign a contract. The Labor Arbiter declared petitioner
an employee whose dismissal by respondents was illegal. Accordingly, the Labor Arbiter ordered
the reinstatement of petitioner and the payment of back wages, moral and exemplary damages
and attorney’s fees. The NLRC affirmed. The CA granted the petition for certiorari.
Issue:
Whether or not petitioner is an employee of respondents, which in turn determines
whether petitioner was illegally dismissed.
Ruling:
No. To determine the existence of an employer-employee relationship, case law has
consistently applied the four-fold test, 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 so-called
"control test" is the most important indicator of the presence or absence of an employer-
employee relationship. The control test, however, is not present in this case as once they are in
the playing court, the referees exercise their own independent judgment, based on the rules of the
game, as to when and how a call or decision is to be made. The referees decide whether an
infraction was committed, and the PBA cannot overrule them once the decision is made on the
playing court. The referees are the only, absolute, and final authority on the playing court.
Respondents or any of the PBA officers cannot and do not determine which calls to make or not
to make and cannot control the referee when he blows the whistle because such authority
exclusively belongs to the referees. The very nature of petitioner’s job of officiating a
professional basketball game undoubtedly calls for freedom of control by respondents. That the
petitioner is an independent contractor as (1) the referees are required to report for work only
when PBA games are scheduled, which is three times a week spread over an average of only 105
playing days a year, and they officiate games at an average of two hours per game; and (2) the
only deductions from the fees received by the referees are withholding taxes. In addition, the fact
that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the
former. For a hired party to be considered an employee, the hiring party must have control over
the means and methods by which the hired party is to perform his work, which is absent in this
case. The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract
between PBA and petitioner, and highlights the satisfactory services rendered by petitioner
warranting such contract renewal. Conversely, if PBA decides to discontinue petitioner’s
services at the end of the term fixed in the contract, whether for unsatisfactory services, or
violation of the terms and conditions of the contract, or for whatever other reason, the same
merely results in the non-renewal of the contract, as in the present case. The non-renewal of the
contract between the parties does not constitute illegal dismissal of petitioner by respondents.
 MARVIN O. DAGUINOD, Petitioner vs. SOUTHGATE FOODS, INC., represented by
MAUREEN O. FERRER and GENERATION ONE RESOURCE SERVICE AND
MULTIPURPOSE COOPERATIVE: represented by RESTY CRUZ, Respondents
G.R. No. 227795 February 20, 2019
CAGUIOA, J.:
Facts:
Petitioner Daguinod was assigned as counter crew/cashier of a Jollibee franchise pursuant
to a Service Agreement between Generation One Resource Service and Multi-Purpose
Cooperative and the franchise operator Southgate Foods, Inc. Under the Service Agreement,
Generation One was contracted by Southgate to provide specified non-core functions and
operational activities for its Jollibee Alphaland branch. Daguinod also executed a Service
Contract with Generation One which stated that Generation One was contracted by Southgate to
perform specified peripheral and support services. In the Service Contract, Daguinod was
referred to as a service provider and member of Generation One cooperative. The specific work
responsibilities to be performed by Daguinod were left blank. The period of Daguinod’s services
was stated as beginning Sept. 9, 2010 until the end of the project. To become a member of
Generation One, Daguinod was required to pay a membership fee of P250.00 and participate in
capital build-up and savings program which obligated him to acquire 150 paid-up shares in
Generation One, valued at P1,500.00. Prior to his employment/membership in Generation One
cooperative, Daguinod was employed directly by Southgate as counter crew. On April 10, 2011,
Daguinod was accused of theft and was then dismissed. Labor Arbiter held that Generation One
is a legitimate labor contractor and Daguinod was a regular employee of Generation One and
held that Daguinod was unable to prove that he was illegally dismissed, or even dismissed from
service. NLRC affirmed. CA affirmed. Hence, this petition.
Issue:
1. Whether or not Generation One is a legitimate labor contractor.
2. Whether or not Daguinod's dismissal was valid.
Ruling:
1. Generation One is not a legitimate labor contract, thus, Daguinod is a regular
employee of Southgate. Under Section 4(a) of DO 18-02, legitimate labor contracting
or subcontracting refers to an arrangement whereby a principal agrees to put out or
farm out with a contractor or subcontractor the performance or completion of a
specific job, work or service within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within or outside
the premises of the principal. The principal refers to any employer who puts out or
farms out a job, service or work to a contractor or subcontractor. On the other hand,
there is labor-only contracting where: (a) the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others; and (b) the workers recruited
 and placed by such person are performing activities which are directly related to the
principal business of the employer. In the case at bar, it was established that
Daguinod was assigned as a counter crew/cashier in Jollibee Alphaland. The Service
Contract of Daguinod with Generation One does not disclose the specific tasks and
functions that he was assigned to do as counter crew/cashier. Thus, each of the non-
core functions identified cover specific tasks that include, but are not limited to the
following: 1) Peripheral activities related to the management and supervision of the
food chain system. 2) Assistance in food preparation and quality control. 3) Prepare
food ingredients. 4) Wrap burgers, rice, cake and other food products 5) Peripheral
activities related to orderliness, cleanliness and upkeep of dining area, comfort room,
glass panels, and other areas. 6) Assistance in cash control activities, gathers orders,
assemble food on tray/take-out. 7) Assistance in warehouse and utilities management.
Daguinod was assigned to perform cash control activities which entails gathering of
orders and assembling food on the tray for dine-in customers or for take-out. As
cashier, Daguinod was also tasked to receive payments and give change. These tasks
are undoubtedly necessary and desirable to the business of a fast food restaurant such
as Jollibee. The service of food to customers is the main line of business of any
restaurant. It is not merely a non-core or peripheral activity as Generation One and
Southgate claim. It is in the interest of Southgate, franchise owner of Jollibee, that its
customers be served food in a timely manner. Respondents' position that the gathering
of orders and service of food to customers are "non-core" functions or peripheral
activities is simply preposterous and is contrary to the basic business model of a fast
food restaurant. These circumstances lead to no other conclusion than that Daguinod
was a regular employee of Southgate and that Generation One was a mere agent of
Southgate.
2. No. In the case of Noblado v. Alfonso, the employer must furnish the employee with
two written notices before the termination of employment can be effected: (1) the first
notice apprises the employee of the particular acts or omissions for which his
dismissal is sought; and (2) the second notice informs the employee of the employer's
decision to dismiss him. Before the issuance of the second notice, the requirement of
a hearing must be complied with by giving the worker an opportunity to be heard. It
is not necessary that an actual hearing be conducted. In this case, there was non-
compliance with procedural due process as the NTEs did not contain the specific
information required under the law. Moreover, Daguinod was not given a reasonable
opportunity to submit his written explanation as he was ordered to immediately
answer the NTEs.
 PEDRITO R. PARAYDAY AND JAIME REBOSO, PETITIONERS, VS. SHOGUN
SHIPPING CO., INC.,[1] RESPONDENT.
 G.R. No. 204555, July 06, 2020
HERNANDO, J.:
Facts:
Petitioners Parayday and Reboso alleged that they were employed as fitters/welders by
Oceanview/VRC Lighterage Co., Inc., and VRC/Oceanview Shipbuilders Co., Inc. a corporation
engaged in the business of ship building. As fitters/welders, petitioners' duties and
responsibilities included, among others, assembling, welding, fitting, and installing materials or
components using electrical welding equipment, and/or repairing and securing parts and
assemblies of Oceanview barges. Petitioners presented a copy of Parayday's Oceanview
Identification Card and Certificate of Employment. Oceanview changed its corporate name to
"Shogun Ships Inc.," herein respondent. Shogun Ships maintained the same line of business, and
retained in its employ Oceanview employees, such as petitioners. Petitioners worked for seven
days every week, and were paid a daily salary of P350.00 until their separation from employment
with Shogun Ships sometime in May 2008. Petitioners alleged that Shogun Ships furnished to
them handwritten pays slips or Time Keeper's Reports which indicated their names, the hours
and days worked, and the amount of compensation received by them in a given workweek and
further alleged that Shogun Ships failed to pay them their overtime pay, holiday pay, and
premium pay despite having rendered work during holidays, Sundays, and rest days. Shogun
Ships likewise did not pay petitioners their SIL and 13th month pay. Petitioners were assigned to
Lamao, Limay, Bataan to do a welding job on one of the barges of Shogun Ships, M/T Daniela
Natividad. An explosion occurred which caused petitioners to sustain third degree burns on
certain parts of their bodies. Although medical expenses were borne by Shogun Ships, petitioners
were not paid their salaries while on hospital confinement. It was only after petitioners were
discharged from the hospital, that Shogun Ships resumed payment of their salaries until the first
week of August 2006. Thereafter, Shogun Ships discontinued providing petitioners financial
assistance for payment of their medical expenses. They alleged that Shogun Ships verbally
dismissed them from service effective May 1, 2008 due to lack of work as fitters/welders. Labor
Arbiter ruled in favor of petitioners. NLRC affirmed. CA granted the petition.
Issue:
Whether or not petitioners are regular employees of respondent.
Ruling:
Yes. Under Article 295 of the Labor Code provides for two types of regular employees,
namely: (a) those who are engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer and (b) those who have rendered at least one year
of service, whether continuous or broken, with respect to the activity in which they are
employed. Petitioners were performing activities which are usually necessary or desirable in the
business or trade of Shogun Ships. This connection can be determined by considering the nature
of the work performed by petitioners and its relation to the scheme of the particular business or
trade of Shogun Ships in its entirety. As Shogun Ships is engaged in the business of domestic
cargo shipping, it is essential, if at all necessary, that Shogun Ships must continuously conduct
vital repairs for the proper maintenance of its barges. The desirability of petitioner’s functions is
bolstered by the fact that Shogun Ships itself precisely retained in its employ regular employees
whose duties and responsibilities included, among others, performing necessary repair and
maintenance work on the barges. Petitioners have proven by substantial evidence which only
entails evidence to support a conclusion, even if other minds, equally reasonable, might
conceivably opine otherwise that they were regular employees of Shogun Ships. In any event, it
is well-settled in this jurisdiction that in any controversy between a laborer and his master,
doubts reasonably arising from the evidence are resolved in favor of the laborer.
 ARNULFO M. FERNANDEZ, Petitioner vs.
KALOOKAN SLAUGHTERHOUSE INCORPORATED*/ERNESTO CUNANAN,
Respondents
G.R. No. 225075 June 19, 2019
CAGUIOA, J.:
Facts:
Petitioner was hired as a butcher by Kalookan Slaughterhouse, Inc. a single
proprietorship owned by respondent Emesto Cunanan. He claimed that he worked from Monday
to Sunday, from 6:30P.M. to 7:30A.M., with a daily wage of ₱700.00, which was later reduced
to ₱500.00 and claimed that he met an accident while driving Kalookan Slaughterhouse's truck in
December 2013 and that deductions were made from his wages. Then further claimed that he
suffered from a headache and did not report for work. The next day, however, he only received
₱200.00 due to his previous undertime and was informed that he could no longer report for work
due to his old age. Petitioner filed the complaint for illegal dismissal before the Labor Arbiter.
The Labor Arbiter ruled in favor of petitioner. The NLRC reversed and set aside the decision of
the LA. CA denied the petition.
Issue:
Whether or not petitioner was an employee of Kalookan Slaughterhouse.
Ruling:
Yes. To determine the existence of an employer-employee relationship, four elements
generally need to be considered, namely: (1) the selection and engagement of the employee; (2)
the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's
conduct. These elements or indicators comprise the so-called 'four-fold' test of employment
relationship. In the case at bar, petitioner was able to submit an I.D. in addition to the gate
passes. The trip ticket and the log sheets also showed that Kalookan Slaughterhouse engaged
petitioner. These are sufficient to prove that petitioner was engaged by Kalookan
Slaughterhouse. In addition, De Guzman, who is also an employee of Kalookan Slaughterhouse,
was the one who exercised control over petitioner's means and methods as he reprimanded
petitioner for his failure to properly store his butchering knives, coming to Kalookan
Slaughterhouse with dirty clothes, reporting for work drunk, and not having an I.D. before going
to the slaughterhouse. All the foregoing show that Kalookan Slaughterhouse, through Tablit, was
the one who engaged petitioner, paid for his salaries, and in effect had the power to dismiss him.
Further, Kalookan Slaughterhouse exercised control over petitioner's conduct through De
Guzman. To the mind of the Court, Kalookan Slaughterhouse was petitioner's employer and it
exercised its rights as an employer through Tablit and De Guzman, who were its employees.
 PHILIPPINE PIZZA, INC., Petitioner, v. JENNY PORRAS* CAYETANO, RIZALDO G.
AVENIDO, PEE JAY T. GURION, RUMEL A. RECTO, ROGELIO T. SUMBANG, JR.,
AND JIMMY J. DELOSO, RESPONDENTS, Respondents.
G.R. No. 230030, August 29, 2018
PERLAS-BERNABE J.:
Facts:
Respondents were hired by CBMI, a job contractor which provides kitchen, delivery,
sanitation, and allied services to PPI's Pizza Hut chain of restaurants and were thereafter
deployed to the various branches of the latter. Cayetano and Deloso worked as team
members/service crew, while Avenido, Gurion, Recto, and Sumbang, Jr. served as delivery
riders. Respondents alleged that they rendered work for Pizza Hut, ranging from seven to eleven
years, hence, they were regular employees of PPI and not of CBMI. They claimed to have been
initially hired by PPI but were subsequently transferred to CBMI so as to prevent them from
attaining their regular employment status. Despite the said transfer, however, they were still
under the direct supervision of the managers of Pizza Hut and had been using its tools and
machines for work. respondents, filed separate complaints for Illegal Dismissal against PPI and
CBMI before the NLRC. The Labor Arbiter ruled in favor of respondents. NLRC reversed and
set aside the LA's Decision and dismissed the complaints for lack of merit. CA annulled and set
aside the NLRC ruling, and accordingly, reinstated the LA's ruling.
Issue:
Whether or not it correctly ruled that respondents were illegally dismissed from
employment.
Ruling:
No. No employer-employee relationship exists between PPI and respondents, and that the
latter were employees of CBMI. Respondents were not illegally dismissed from work. Records
show that while PPI denied the existence of an employer-employee relationship with
respondents, CBMI actually acknowledged that respondents were its employees. CBMI likewise
presented proof that it duly informed respondents of their impending lay-off, yet they
immediately filed the complaints before it had the chance to re-deploy them. On the other hand,
respondents did not even refute CBMI's claim that they were informed of its decision to place
them in floating status pending their re-deployment. As such, respondents could not have been
illegally terminated from work, for they were placed in a temporary lay-off status when they
prematurely filed the complaints. There being no dismissal to speak of, respondents were thus
not illegally dismissed by CBMI, their actual employer.
 Philippine National Construction Corporation and Atty. Luis F. Sison vs. National Labor
Relations Commission, et.al.
G.R. No. 248401. June 23, 2021.
LAZARO-JAVIER, J.:
Facts:
PNCC was originally incorporated pursuant to the Corporation Code of the Philippines
under the name Construction Development Corporation of the Philippines. PD 1113 granted
CDCP a thirty-year franchise to construct, operate, and maintain toll facilities in the North and
South Luzon Tollways. PD 1894 amended PD 1113 to include the Metro Manila Expressway
into the CDCP's franchise. PNCC started giving mid-year bonuses to its employees every 15th of
May pursuant to a CBA with its then employee’s union. Then, Atty. Sison, circulated a
memorandum to all PNCC employees informing them that the 2013 Mid-year bonus shall not be
released.
Issue:
Whether or not the PNCC employees are covered by the provisions of the Labor Code or
by the Civil Service Law.
Ruling:
The employees are governed by the provision of the Labor Code. It is provided in the
Constitution that only GOCCs with original charters are covered by civil service laws, viz.:
SECTION 2. (I) The civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government-owned or controlled corporations with
original charters. (emphasis supplied) Thus, PNCC is a non-chartered GOCC, incorporated under
the Corporation Code, it is governed by the Labor Code, not by the Civil Service Law.
 WESLEYAN UNIVERSITY PHILIPPINES, Petitioner vs.
NOWELLA REYES, Respondent.
G.R. No. 208321               July 30, 2014
VELASCO, JR., J.:
Facts:
Respondent Nowella Reyes was appointed as WUP's University Treasurer on
probationary basis. A little over a year after, she was appointed as full time University Treasurer.
A new WUP Board of Trustees was constituted. Among its first acts was to engage the services
External Auditor to investigate circulating rumors on alleged anomalies in the contracts entered
into by petitioner and in its finances and found that there were irregularities in the handling of
petitioner’s finances, mainly, the encashment by its Treasury Department of checks issued to
WUP personnel, a practice purportedly in violation of the impress system of cash management,
and the encashment of various crossed checks payable to the University Treasurer by China bank
despite management’s intention to merely have the funds covered thereby transferred from one
of petitioner’s bank accounts to another. Thereafter, a report was submitted to the University
President containing its findings and recommending respondent’s dismissal as University
Treasurer. The respondent then filed a complaint for illegal dismissal with the NLRC. The Labor
Arbiter ruled in favor of respondent. NLRC set aside the decision of the LA. CA reversed and set
aside the decision of the NLRC and reinstated the decision of the LA.
Issue:
Whether or not the CA erred in finding respondent illegally dismissed by petitioner on
the ground of loss of trust and confidence.
Ruling:
Yes. Under Article 282. Termination by employer. An employer may terminate an
employment for any of the following causes: c. Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly authorized representative. In the case of General
Bank and Trust Company v. Court of Appeals, Loss of confidence should not be simulated. It
should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of
confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary.
It must be genuine, not a mere afterthought to justify earlier action taken in bad faith. The first
requisite for dismissal on the ground of loss of trust and confidence is that the employee
concerned must be one holding a position of trust and confidence. There are two classes of
positions of trust: managerial employees and fiduciary rank-and-file employees. The first
requisite is that the employee concerned must be one holding a position of trust and confidence,
thus, one who is either: (1) a managerial employee; or (2) a fiduciary rank-and-file employee,
who, in the normal exercise of his or her functions, regularly handles significant amounts of
money or property of the employer. The second requisite is that the loss of confidence must be
based on a willful breach of trust and founded on clearly established facts. The presence of the
first requisite ascertain. So is as regards the second requisite. Indeed, the Court finds that
petitioner adequately proved respondent’s dismissal was for a just cause, based on a willful
breach of trust and founded on clearly established facts as required by jurisprudence. At the end
of the day, the question of whether she was a managerial or rank-and file employee does not
matter in this case because not only is there basis for believing that she breached the trust of her
employer, her involvement in the irregularities attending to petitioner’s finances has also been
proved. To recall, petitioner, per its account, allegedly lost trust and confidence in respondent
owing to any or an interplay of the following events: (1) she encashed a check payable to the
University Treasurer in the amount P300,000; (2) she encashed crossed checks payable to the
University Treasurer, when the intention of management in this regard was to merely transfer
funds from one of petitioner’s accounts to another in the same bank; (3) she allowed the Treasury
Department to encash the checks issued to WUP personnel rather than requiring the latter to have
said checks encashed by the bank, in violation of the imprest system of accounting; (4) she
caused the disbursement of checks without supporting check vouchers; (5) there were
unliquidated cash advances; and (6) spurious duplicate checks bearing her signature were
encashed causing damage to petitioner.
 FAR EAST AGRICULTURAL SUPPLY, INC. and/or ALEXANDER UY, Petitioners, vs.
JIMMY LEBATIQUE and THE HONORABLE COURT OF APPEALS, Respondents.
G.R. No. 162813             February 12, 2007
QUISUMBING, J.:
Facts:
Petitioner Far East Agricultural Supply, Inc. hired private respondent Jimmy Lebatique as
truck driver with a daily wage of ₱223.50. He delivered animal feeds to the company’s clients.
Lebatique complained of nonpayment of overtime work particularly on January 22, 2000, when
he was required to make a second delivery in Novaliches, Quezon City. That same day, Manuel
Uy, brother of Far East’s General Manager and petitioner Alexander Uy, suspended Lebatique
apparently for illegal use of company vehicle. Even so, Lebatique reported for work the next day
but he was prohibited from entering the company premises. Then, Lebatique sought the
assistance of the DOLE concerning the nonpayment of his overtime pay. According to
Lebatique, two days later, he received a telegram from petitioners requiring him to report for
work and he was asked why he was claiming overtime pay. Lebatique explained that he had
never been paid for overtime work since he started working for the company. He also told
Alexander that Manuel had fired him. After talking to Manuel, Alexander terminated Lebatique
and told him to look for another job. Lebatique filed a complaint for illegal dismissal and
nonpayment of overtime pay. The Labor Arbiter found that Lebatique was illegally dismissed.
NLRC reversed the Labor Arbiter and dismissed the complaint for lack of merit. Hence, this
petition.
Issues:
1. Whether or not Lebatique was illegally dismissed;
2. Whether or not Lebatique was a field personnel, not entitled to overtime pay.
Ruling:
1. Yes. In cases of illegal dismissal, the burden is on the employer to prove that the
termination was for a valid cause. In this case, petitioners failed to discharge such
burden. Petitioners aver that Lebatique was merely suspended for one day but he
abandoned his work thereafter. To constitute abandonment as a just cause for
dismissal, there must be: (a) absence without justifiable reason; and (b) a clear
intention, as manifested by some overt act, to sever the employer-employee
relationship. In the case at bar, petitioners failed to prove that Lebatique abandoned
his job. Nor was there a showing of a clear intention on the part of Lebatique to sever
 the employer-employee relationship. When Lebatique was verbally told by Alexander
Uy, the company’s General Manager, to look for another job, Lebatique was in effect
dismissed. Even assuming earlier, he was merely suspended for illegal use of
company vehicle, the records do not show that he was afforded the opportunity to
explain his side. It is clear also from the sequence of the events leading to Lebatique’s
dismissal that it was Lebatique’s complaint for nonpayment of his overtime pay that
provoked the management to dismiss him, on the erroneous premise that a truck
driver is a field personnel not entitled to overtime pay.
2. No. Lebatique is not a field personnel as defined above for the following reasons: (1)
company drivers, including Lebatique, are directed to deliver the goods at a specified
time and place; (2) they are not given the discretion to solicit, select and contact
prospective clients; and (3) Far East issued a directive that company drivers should
stay at the client’s premises during truck-ban hours which is from 5:00 to 9:00 a.m.
and 5:00 to 9:00 p.m. Even petitioners admit that the drivers can report early in the
morning, to make their deliveries, or in the afternoon, depending on the production of
animal feeds. Drivers, like Lebatique, are under the control and supervision of
management officers. Lebatique, therefore, is a regular employee whose tasks are
usually necessary and desirable to the usual trade and business of the company. Thus,
he is entitled to the benefits accorded to regular employees of Far East, including
overtime pay and service incentive leave pay.
 ANGELINA FRANCISCO, Petitioner vs.
NATIONAL LABOR RELATIONS COMMISSION, KASEI CORPORATION,
SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENE
BALLESTEROS, TRINIDAD LIZA and RAMON ESCUETA, Respondents.
G.R. No. 170087 August 31, 2006
YNARES-SANTIAGO, J.:
Facts:
Petitioner was hired by Kasei Corporation during its incorporation stage. She was
designated as Accountant and Corporate Secretary and was assigned to handle all the accounting
needs of the company. She was also designated as Liaison Officer to the City of Makati to secure
business permits, construction permits and other licenses for the initial operation of the company.
Although she was designated as Corporate Secretary, she was not entrusted with the corporate
documents; neither did she attend any board meeting nor required to do so. She never prepared
any legal document and never represented the company as its Corporate Secretary. However, on
some occasions, she was prevailed upon to sign documentation for the company. Thereafter,
petitioner was designated Acting Manager. The corporation also hired Gerry Nino as accountant
in lieu of petitioner. As Acting Manager, petitioner was assigned to handle recruitment of all
employees and perform management administration functions; represent the company in all
dealings with government agencies, especially with the Bureau of Internal Revenue (BIR), Social
Security System (SSS) and in the city government of Makati; and to administer all other matters
pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei
Corporation. For five years, petitioner performed the duties of Acting Manager. As of December
31, 2000, her salary was P27,500.00 plus P3,000.00 housing allowance and a 10% share in the
profit of Kasei Corporation. Then, petitioner was replaced by Liza R. Fuentes as Manager.
Petitioner alleged that she was required to sign a prepared resolution for her replacement but she
was assured that she would still be connected with Kasei Corporation. Kasei Corporation
reduced her salary by P2,500.00 a month for a total reduction of P22,500.00 as of September
2001. Petitioner was not paid her mid-year bonus allegedly because the company was not
earning well. On October 2001, petitioner did not receive her salary from the company. She
made repeated follow-ups with the company cashier but she was advised that the company was
not earning well. Then petitioner asked for her salary from Acedo and the rest of the officers but
she was informed that she is no longer connected with the company. The Labor Arbiter found
that petitioner was illegally dismissed. NLRC affirmed. CA reversed and set aside.
Issue:
 1. Whether or not there was an employer-employee relationship between petitioner and
private respondent Kasei Corporation; and if in the affirmative.
2. Whether or not petitioner was illegally dismissed.

Ruling:
1. Generally, courts have relied on the so-called right of control test where the person
for whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end. There are instances
when, aside from the employer’s power to control the employee, economic realities of
the employment relations help provide a comprehensive analysis of the true
classification of the individual, whether as employee, independent contractor,
corporate officer or some other capacity. It is better, therefore, to adopt a two-tiered
test involving: (1) the employer’s power to control; and (2) the economic realities of
the activity or relationship.
The control test means that there is an employer-employee relationship when the
person for whom the services are performed reserves the right to control not only the
end achieved but also the manner and means used to achieve that end. There has to be
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 employer’s business; (2) the extent of
the worker’s investment in equipment and facilities; (3) the nature and degree of
control exercised by the employer; (4) the worker’s opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise; (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 of business.
The proper standard of economic dependence is whether the worker is dependent on
the alleged employer for his continued employment in that line of business. By
applying the control test, it can be said that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji
Kamura, the corporation’s Technical Consultant. She reported for work regularly and
served in various capacities as Accountant, Liaison Officer, Technical Consultant,
Acting Manager and Corporate Secretary, with substantially the same job functions,
that is, rendering accounting and tax services to the company and performing
functions necessary and desirable for the proper operation of the corporation such as
securing business permits and other licenses over an indefinite period of engagement.
Respondent corporation had the power to control petitioner with the means and
methods by which the work is to be accomplished. Under the economic reality test,
the petitioner can also be said to be an employee of respondent corporation because
 she had served the company for 6 yrs. before her dismissal, receiving check vouchers
indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as
well as deductions and Social Security contributions from. When petitioner was
designated General Manager, respondent corporation made a report to the SSS.
Petitioner’s membership in the SSS evinces the existence of an employer-employee
relationship between petitioner and respondent corporation. The coverage of Social
Security Law is predicated on the existence of an employer-employee relationship.
2. The corporation constructively dismissed petitioner when it reduced her. This
amounts to an illegal termination of employment, where the petitioner is entitled to
full back wages. A diminution of pay is prejudicial to the employee and amounts to
constructive dismissal. Constructive dismissal is an involuntary resignation resulting
in cessation of work resorted to when continued employment becomes impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or
when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to an employee.
 PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILIPPINES), petitioner, vs.
PAN AMERICAN EMPLOYEES ASSOCIATION, respondent.
G.R. No. L-16275             February 23, 1961
REYES, J.B.L., J.:
Facts:
The employees of Pan American World Airways System allege that the company does
not provide them of a one-hour break period. The employees were asked to wait in case of any
emergencies while having their break or they will be reprimanded, thus the petition of the
employees to ask the court for a proper compensation from the employers. The employees allege
that the said one-hour break actually constitutes working overtime.
Issue:
Whether or not the time given to the employees for break is considered an over time?
Ruling:
The Industrial Court's order for permanent adoption of a straight 8-hour shift including
the meal period was but a consequence of its finding that the meal hour was not one of complete
rest, but was actually a work hour, since for its duration, the laborers had to be on ready call. Of
course, if the Company practices in this regard should be modified to afford the mechanics a real
rest during that hour, by installing an entirely different emergency crew, or any similar
arrangement, then the modification of this part of the decision may be sought from the Court
below. Therefore, the decision cannot be altered.
 UNIVERSITY OF PANGASINAN FACULTY UNION, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION and UNIVERSITY OF
PANGASINAN, respondents.
G.R. Nos. 64821-23 January 29, 1993
ROMERO, J.:
Facts:
Petitioner is a labor union composed of faculty members of the respondent University of
Pangasinan, an educational institution duly organized and existing by virtue of the laws of the
Philippines.The petitioner filed a complaint against the private respondent with the Arbitration
Branch of the NLRC- Dagupan City seeking: (a) the payment of Emergency Cost of Living
Allowances (ECOLA) for November 7 to December 5, 1981, a semestral break; (b) salary
increases from the 60% of the incremental proceeds of increased tuition fees; and (c) payment of
salaries for suspended extra loads. The petitioner’s members are full-time professors, instructors,
and teachers of respondent University. The teachers in the college level teach for a normal
duration of 10 months a school year, divided into 2 semesters of 5 months each, excluding the 2
months summer vacation. These teachers are paid their salaries on a regular monthly basis.
During the semesterly break they were not paid their ECOLA. The private respondent claims that
the teachers are not entitled thereto because the semesterly break is not an integral part of the
school year and there being no actual services rendered by the teachers during said period, the
principle of “No work, no pay” applies. During the same school year (1981-1982), the private
respondent was authorized by the Ministry of Education and Culture to collect, from its students
a 15% increase of tuition fees. Petitioner’s members demanded a salary increase effective the
first semester of said schoolyear to be taken from the 60% percent incremental proceeds of the
said increased tuition fees as mandated by the PD 451. Private respondent refused.
Issue:
1. Whether or not petitioners are entitled to ECOLA during the semesterly break.
2. Whether or not 60% of the incremental proceeds of the increased tuition fee shall be
devoted exclusively to salary increase.
Ruling:
1. Yes. According to various Presidential Decrees on ECOLAs “Allowances of Fulltime
Employees” that “Employees shall be paid in full the required monthly allowance
regardless of the number of their regular working days if they incur no absences
during the month. If they incur absences without pay, the amounts corresponding to
the absences may be deducted from the monthly allowance and on “Leave of Absence
 Without Pay”, that “All covered employees shall be entitled to the allowance
provided herein when they are on leave of absence with pay. The petitioner’s
members are full-time employees receiving their monthly salaries irrespective of the
number of working days or teaching hours in a month. However, they find themselves
in a situation where they are forced to go on leave during semesterly breaks. These
semesterly breaks are in the nature of work interruptions beyond the employees’
control. As such, these breaks cannot be considered as absences within the meaning
of the law for which deductions may be made from monthly allowances. The “No
work, no pay” principle does not apply in the instant case. The petitioner’s members
received their regular salaries during this period. It is clear from the provision of law
that it contemplates a “no work” situation where the employees voluntarily absent
themselves. Petitioners, in the case at bar, do not voluntarily absent themselves during
semesterly breaks. Rather, they are constrained to take mandatory leave from work.
For this they cannot be faulted nor can they be begrudged that which is due them
under the law. The intention of the law is to grant ECOLA upon the payment of basic
wages. Hence, we have the principle of “No pay, no ECOLA” the converse of which
finds application in the case at bar. Petitioners cannot be considered to be on leave
without pay so as not to be entitled to ECOLA, for, as earlier stated, the petitioners
were paid their wages in full for the months of November and December of 1981,
notwithstanding the intervening semesterly break. Although said to be on forced
leave, professors and teachers are, nevertheless, burdened with the task of working
during a period of time supposedly available for rest and private matters. There are
papers to correct, students to evaluate, deadlines to meet, and periods within which to
submit grading reports. Although they may be considered by the respondent to be on
leave, the semesterly break could not be used effectively for the teacher’s own
purposes for the nature of a teacher’s job imposes upon him further duties which must
be done during the said period of time. Arduous preparation is necessary for the
delicate task of educating our children. Teaching involves not only an application of
skill and an imparting of knowledge, but a responsibility which entails self-dedication
and sacrifice. It would be unfair for the private respondent to consider these teachers
as employees on leave without pay to suit its purposes and, yet, in the meantime,
continue availing of their services as they prepare for the next semester or complete
all of the last semester’s requirements. Thus, the semesterly break may also be
considered as “hours worked.” For this, the teachers are paid regular salaries and, for
this, they should be entitled to ECOLA. The purpose of the law is to augment the
income of employees to enable them to cope with the harsh living conditions brought
about by inflation; and to protect employees and their wages against the ravages
brought by these conditions.
2. Under Section 3 of Presidential Decree 451, “no increase in tuition or other school
fees or charges shall be approved 60% of the proceeds is allocated for increase in
salaries or wages of the members of the faculty and all other employees of the school
concerned, and the balance for institutional development, student assistance and
extension services, and return to investments: Provided, That in no case shall the
return to investments exceed twelve (12%) per centum of the incremental proceeds;
Such allowances must be taken in resources of the school not derived from tuition
fees. If the school happen to have no other resources to grant allowances and benefits,
either mandated by law or secured by collective bargaining, such allowances and
benefits should be charged against the return to investments referred. The law is clear.
The 60% incremental proceeds from the tuition increase are to be devoted entirely to
wage or salary increases which means increases in basic salary. The law cannot be
construed to include allowances which are benefits over and above the basic salaries
of the employees. To charge such benefits to the 60% incremental proceeds would be
to reduce the increase in basic salary provided by law. Law provides that 60% of
tuition fee increase should go to wage increases and 40% to institutional
developments, student assistance, extension services, and return on investments.
 SIME DARBY PILIPINAS, INC. petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) and SIME
DARBY SALARIED EMPLOYEES ASSOCIATION (ALU-TUCP), respondents.
G.R. No. 119205 April 15, 1998
BELLOSILLO, J.:
Facts:
Petitioner is engaged in the manufacture of automotive tires, tubes and other rubber
products. Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, is an
association of monthly salaried employees of petitioner at its Marikina factory. Before, all
company factory workers in Marikina including members of private respondent union worked
from 7:45 a.m. to 3:45 p.m. with a 30-minute paid "on call" lunch break. Then petitioner issued a
memorandum to all factory-based employees advising all its monthly salaried employees in its
Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department working
on shifts, a change in work schedule effective September 14, 1992. Private respondent filed on
behalf of its members a complaint with the Labor Arbiter for unfair labor practice, discrimination
and evasion of liability. The Labor Arbiter ruled in favor of petitioners. NLRC affirmed the
findings of Labor Arbiter. Hence, this petition.
Issue:
Whether or not the change of work schedule, which management deems necessary to
increase production, constitutes unfair labor practice.
Ruling:
No. The change effected by management with regard to working time is made to apply to
all factory employees engaged in the same line of work whether or not they are members of
private respondent union. Hence, it cannot be said that the new scheme adopted by management
prejudices the right of private respondent to self-organization. Thus, management is free to
regulate, according to its own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place and manner of work, processes to be
followed, supervision of workers, working regulations, transfer of employees, work supervision,
lay off of workers and discipline, dismissal and recall of workers. Further, management retains
the prerogative, whenever exigencies of the service so require, to change the working hours of its
employees. So long as such prerogative is exercised in good faith for the advancement of the
employer's 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 such exercise.
 PHILIPPINE GRAPHIC ARTS INC., IGMIDIO R. SILVERIO AND CARLOS
CABAL, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION, ROSALINA M. PULPULAAN AND
EMELITA SALONGA, respondents.
G.R. No. 80737 September 29, 1988
GUTIERREZ, JR., J.:
Facts:
Petitioner corporation was forced by economic circumstances to require its workers to go
on mandatory vacation leave in batches of seven or nine for periods ranging from 15, 30, to 45
days. The workers were paid while on leave but the pay was charged against their respective
earned leaves. Then private respondents filed complaints for unfair labor practice and
discrimination. The Labor Arbiter ruled in favor of petitioner by dismissing the complaint.
NLRC affirmed.
Issue:
Whether or not the forced vacation leave without pay is unfair labor practice and if not,
whether or not it was tainted with arbitrariness.
Ruling:
No. The corporation instituted the forced leave due to economic crisis which the private
respondents do not even question. Therefore, there is no unfair labor practice. The imposition of
forced leave is not tainted with arbitrariness as this was not exercised for the purpose of
circumventing the rights of employees under special laws or valid agreements. It was a valid
exercise of management prerogative. It was a more human solution instead of a retrenchment and
reduction of personnel. In fact, it was only temporary and it was taken only after notice and
consultations with workers and supervisors. Therefore, the decision of the LA was reinstated.
PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), Petitioner, vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON
JUEZAN, Respondents.
G.R. No. 179652               March 6, 2012
VELASCO, JR., J.:
Facts:
Private respondent Jandeleon Juezan filed a complaint against petitioner with the DOLE
for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for
holiday and rest day and illegal diminution of benefits, delayed payment of wages and
noncoverage of SSS, PAG-IBIG and Phil health. DOLE Regional Director found that private
respondent was an employee of petitioner, and was entitled to his money claims. The Acting
DOLE Secretary dismissed petitioner’s appeal on the ground that petitioner submitted a Deed of
Assignment of Bank Deposit instead of posting a cash or surety bond. SC found that there was
no employer-employee relationship between petitioner and private respondent.
Issue:
Whether or not the DOLE can make a determination of whether or not an employer-
employee relationship exists?
Ruling:
Yes. No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down where the DOLE
would only make a preliminary finding, that the power was primarily held by the NLRC. The
law did not say that the DOLE would first seek the NLRC’s determination of the existence of an
employer-employee relationship, or that should the existence of the employer-employee
relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE must have
the power to determine whether or not an employer-employee relationship exists, and from there
to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor
Code, as amended by RA 7730. The DOLE, in determining the existence of an employer-
employee relationship, has a ready set of guidelines to follow, the same guide the courts
themselves use. The elements to determine the existence of an employment relationship are: (1)
the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; (4) the employer’s power to control the employee’s conduct. The use of this test is not
solely limited to the NLRC. The DOLE Secretary, or his or her representatives, can utilize the
same test, even in the course of inspection, making use of the same evidence that would have
been presented before the NLRC. The determination of the existence of an employer-employee
relationship by the DOLE must be respected. The expanded visitorial and enforcement power of
the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the
simple expedient of disputing the employer-employee relationship, force the referral of the
matter to the NLRC.
MANUEL BELARMINO, petitioner, vs. EMPLOYEES' COMPENSATION
COMMISSION and GOVERNMENT SERVICE INSURANCE SYSTEM, respondents.
G.R. No. 90204 May 11, 1990
GRIÑO-AQUINO, J.:
Facts:
Petitioner's wife, Oania Belarmino, was a classroom teacher of the Department of
Education, Culture and Sports assigned at the Buracan Elementary School and had been a
classroom teacher since October 18, 1971, or for eleven years. Her husband, the petitioner, is
also a public-school teacher. That while performing her duties as a classroom teacher, Mrs.
Belarmino who was in her 8th month of pregnancy, accidentally slipped and fell on the
classroom floor, then she complained of abdominal pain and stomach cramps which continued
for several days and a feeling of heaviness in her stomach, but, heedless of the advice of her
female co-teachers to take a leave of absence, she continued to report to the school because there
was much work to do. Eeleven days after her accident, she went into labor and prematurely
delivered a baby girl at home and was found that she was suffering from septicemia post-partum
due to infected lacerations of the vagina. Then after she recovered for three days, she died and
the cause of death was septicemia post-partum. Thereafter, a claim for death benefits was filed
by her husband but it was denied by GSIS which held that 'septicemia post-partum the cause of
death, is not an occupational disease, and neither was there any showing that aforesaid ailment
was contracted by reason of her employment.
Issue:
Whether or not the cause of death of Oania Belarmino is considered an occupational
disease and hence his husband is entitled to the death benefits.
Ruling:
Yes. Under Rule III, Section 1 of the Amended Rules on Employees' Compensation, the
illness, which resulted in the death of Mrs. Belarmino, is admittedly not listed as an
occupational disease in her particular line of work as a classroom teacher. However, her death
from that ailment is compensable because an employment accident and the conditions of
her employment contributed to its development. The condition of the classroom floor caused
Mrs. Belarmino to slip and fall and suffer injury as a result. The fall precipitated the onset of
recurrent abdominal pains which culminated in the premature termination of her
pregnancy with tragic consequences to her. Her fall on the classroom floor brought about her
premature delivery which caused the development of post-partum septicemia which
resulted in death. Her fall therefore was the proximate or responsible cause that set-in
motion an unbroken chain of events, leading to her demise. ECC and GSIS were ordered to pay
death benefits to the petitioner.