1 G.R. No. 98443 August 30, 1993 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. PAULINO NAPARAN, JR.

Y NACAR, accused-appellant. The Solicitor General for plaintiff-appellee. Public Attorney's Office for accused-appellant.

ROMERO, J.: Accused Paulino Naparan, Jr. y Nacar interposes the present appeal from the decision of the Regional Trial Court, National Capital Judicial Region, Branch 104, Quezon City in Criminal Case No. Q-89-4696 finding him guilty beyond reasonable doubt of Illegal Recruitment committed in large scale. On June 21, 1989, accused-appellant was charged with Illegal Recruitment in an information which reads: The undersigned Assistant City Prosecutor accuses PAULINO NAPARAN JR. Y NACAR of the crime of ILLEGAL RECRUITMENT (Sec. 39 PD 442 as amended by PD 2018), committed as follows: That during the period from May 26, 1989 to June 9, 1989, in Quezon City, Philippines and within the jurisdiction of this Honorable Court, the said accused, did then and there, wilfully, unlawfully and feloniously canvas, enlist, contract and promise employment to the following persons to wit: 1. Dalton Dizon y Arida P4,500.00 2. Eduardo Cortez y Paner P3,000.00 3. Pedro Enipto Jr. y Santiago P7,000.00 4. Teresita Santiago y Factor P13,000.00 as recruitment fees, such recruitment activities being done without the required license or authority from the Department of Labor; and committed in a large scale against said victims, individually or as a group, an offense involving economic sabotage. CONTRARY TO LAW. 1 Upon arraignment, accused-appellant pleaded not guilty. 2 During trial, the prosecution presented the four complainants and one Angelita Cawili who corroborated the testimony of complainant Teresita Santiago. Complainant Eduardo Cortez 3 testified that, in the course of his employment as bellboy at Monte Carlo Hotel, Sta. Cruz, Manila, he met accused-appellant sometime in March 1989 while the latter was billeted therein. During one of their conversations, accused-appellant offered him an overseas job in the United States of America as a "boy by washing airplanes" with a salary of $100.00 a day. He decided to accept the offer which he perceived as "an opportunity to work abroad." On May 31, 1989, he went to see accused-appellant at his new place in Room 304, PM Apartelle, 4 Matalino Street, Quezon City and gave the latter P3,000.00 for his visa and plane ticket. No receipt was issued and he did not insist on one because accused-appellant threatened that he would not be able to go abroad if he insists. In connection with his departure, he underwent a medical examination 5 at the Protacio Hospital for which he paid P270.00. Accused-appellant disappeared after complainant was not able to leave as promised. He saw the accused two days later at the latter's apartelle where he explained that the delay was due to a "need for money." Later, complainants discovered some tapes in the attache case of accused-appellant. While playing these, they heard accused-appellant's mother advising his son to reform as he had already swindled a lot of people in Ilocos. It was then that they decided to report the matter to the police. Complainant Pedro Enipto, Jr. 6 narrated that it was through Eduardo Cortez and one Roger Salvatierra that he came to know accused-appellant. During their initial meeting, accused-appellant talked about his projects at Fort Ilocandia of which, according to him, he was part owner. It was in this conversation that he encouraged them to work in Washington,

2 D.C. as aircraft maintenance crew with a salary of about hundred dollars. He assured them that he was in a position to petition for them to work there because he was a "balikbayan" and his deceased father was a retired colonel in Washington. Enipto gave accused-appellant P4,000.00 on May 30, 1989 and another P3,000.00 on June 2, 1989 at PM Apartelle at the back of Quezon City Hall. He did not ask for a receipt because accused-appellant told him that if he asked for one he would be left behind. His aunt, complainant Teresita Santiago, was present when he gave the money. Accused-appellant accompanied them in procuring their passport and undergoing medical examination at Protacio Hospital. 7 For these services, Enipto incurred additional expenses of P550.00 and P270.00, respectively. When they were unable to leave on June 15, 1989 for Washington, D.C., accused-appellant disappeared. Later, he called them up to explain that he was the victim of a holdup. They waited again to find out when they could leave. On his second call, he asked them to fetch him in Intramuros which they did. He likewise asked them to get his things at PM Apartelle. One of their companions, Dalton Dizon, discovered a tape where accused-appellant's parents were advising him not to go back to Laoag because many people were looking for him. Thereafter, they agreed to report the matter to the police to whom they gave their statements and the tape. Complainant Teresita Santiago 8 met accused-appellant through her nephew Pedro Enipto, Jr. who brought him to her residence at Novaliches. Accused-appellant encouraged her to work abroad as baby sitter for $750.00 a month. He told her that he would take care of the expenses that would be incurred except for the plane ticket but even this would be refunded later. She believed him as he introduced himself as a millionaire who owns Fort Ilocandia, Benguet Mining Corp. and Contrex Industrial Corporation. He also mentioned a certain Atty. Efren Ramos from Laoag whom she happened to know personally. He even said that he was a "pamangkin ni Marcos." Subsequently, he asked for P8,000.00 for the plane ticket which she gave on May 30, 1989. Later, he asked for an additional P5,000.00 which she gave on June 5, 1989. Both amounts were delivered to accused-appellant at Room 304, PM Apartelle, Quezon City. She received no receipt for these amounts although these transactions were witnessed by Angelita Cawili who corroborated her testimony on these points. 9 On cross-examination, she stated further that she entertained no doubt about the accused-appellant who assured her that he could get jobs even for twelve persons abroad. Moreover he was driving a car when he came to her house and was staying in an apartelle. That he gave his office address in Washington, D.C. and impressed on her that he was a son of a retired US Air Force officer convinced her of his capability in sending them abroad. Accused-appellant even accompanied them in securing their passports. 10 However, the promised trip did not materialize. Accused-appellant would disappear intermittently and upon surfacing, would promise to withdraw some money at PNB. Another time, he called up to inform them that he was kidnapped for ransom. When she asked him to return her money, accused-appellant failed to do so. Complainant Dalton Dizon 11 testified that accused-appellant was introduced to him by his friend Cesar Angeles on December 1988. After this meeting, they did not see each other again until May 1989 when accused-appellant went to Dizon's house at 157 Alley 2, Project 6, Quezon City asking for his help to look for a place to stay in. Later, they met again at PM Apartelle where accused-appellant offered him employment in Washington, D.C. as a hospital aide. In consideration of the promise for employment, he gave the accused P4,500.00 in the latter's apartelle. No receipt was given for the payment although his mother, Candelaria Dizon, was with him when he paid said recruitment fee. He was asked to secure a passport while the accused would take care of everything else. Later, he underwent a medical examination at Protacio Clinic to determine his physical fitness to work abroad. 12 When accused-appellant failed to make good his promise, he reported the matter to the Quezon City police. The lower court dispensed with the taking of the testimony of Ruben de Castro, Jr. of the Philippine Overseas Employment Administration (POEA) after the parties stipulated that he would testify to the fact that the accusedappellant was not authorized to recruit workers for abroad. 13 The corresponding certification issued by the POEA was marked as Exh. "E." Counsel for accused-appellant offered his testimony as the lone evidence for the defense. Accused-appellant 14 denied the charge of engaging in the recruitment of complainants for overseas employment and of receiving money from them. According to him, he used to reside in Laoag City but came to Quezon City when he was called by Dalton Dizon. He first stayed for one whole afternoon, at Dalton's parlor in Tandang Sora. Then, he moved to PM Apartelle, the rent of which was paid by Dalton's brother, Daniel. Accused-appellant met the three other complainants during the "despedida" party of Daniel held at PM Apartelle. He went to Teresita Santiago's house in Novaliches upon the latter's invitation for him to eat there. He admitted receiving P5,000.00 from her as a loan. He denied ever claiming that he was a multi-millionaire and that former Pres. Marcos was his grandfather.

3 The lower court, 15 on April 3, 1991, promulgated its judgment finding that: WHEREFORE, finding the accused PAULITO NAPARAN, JR. Y NACAR, guilty beyond reasonable doubt of the crime of ILLEGAL RECRUITMENT committed in a large scale, an offense involving ECONOMIC SABOTAGE, accused is hereby sentenced to suffer the penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000,.00) and to pay the following persons: a) Dalton Dizon y Arida P4,500.00 b) Eduardo Cortez y Paner P3,270.00; c) Pedro Enipto, Jr. y Santiago P7,820.00; and d) Teresita Santiago y Factor P13,000.00 without subsidiary imprisonment in case of insolvency and to pay the costs. SO ORDERED. 16 Hence, this appeal on the ground that the trial court erred in convicting accused-appellant for Illegal Recruitment despite the absence of evidence required to prove his guilt beyond reasonable doubt. Accused-appellant points out that the prosecution evidence consists merely of the testimonies of complainants and the letter he allegedly wrote addressed to Dalton Dizon where he acknowledged the complaint filed against him by Teresita Santiago. These evidence, according to him, do not prove beyond reasonable doubt that he illegally recruited complainants. For one, the testimonies are nothing but self-serving allegations unsupported by concrete evidence. If accused-appellant did transact with them and receive sums of money as recruitment fees, he would not have hesitated to give them the corresponding receipts; on the other hand, complainants should have demanded receipts from him. In his opinion, it was very unusual for complainants as overseas applicants to neglect investigating whether the recruiter is licensed or authorized by the POEA, or has an office address and can issue official receipts. For another thing, the letter was not shown to him for his identification; hence, it cannot be given any evidentiary value. Granting that the letter was written by him, its contents acknowledging the receipt of money from Teresita Santiago refer only to her and the loan she gave him as he testified. Having transacted with Teresita Santiago only and never with the three other complainants, he cannot possibly be convicted under PD 2018, that is, illegal recruitment committed in large scale and considered an offense involving economic sabotage. The evidence of the prosecution consists mainly of the testimonies of the four complainants. The fact that only the testimony of Teresita Santiago was corroborated by Angelita Cawili does not water down the weight of their combined testimonies. It is not necessary that the testimony of each of the four complainants be corroborated by other witnesses. Corroborative evidence is necessary only when there are reasons to warrant the suspicion that the witness falsified the truth or that his observations are inaccurate. 17 In this case, complainants positively identified accused-appellant as the one who recruited them for work abroad, employing the same modus operandi for all. They were one in stating that he assured them that he could find jobs for them in the United States and on several occasions, inveigled them into giving him money in his apartelle. Against their clear and positive testimonies, accused-appellant's defense was merely a denial which the lower court found to be weak as against the hard evidence built by the prosecution. Accused-appellant's attack is ultimately directed against the credibility of complainants, the best judge of which is the trial court. In the matter of weighing the evidence of the prosecution against that of the defense through an assessment of their respective merits, "it is firmly settled that the findings of the trial court are given weight and the highest degree of respect by the appellate court, and may be disregarded only where substantial errors have been committed or determinative facts have been overlooked and which otherwise would have dictated a different conclusion or verdict." 18 No reason appears to us to deny great weight to the trial court's evaluation of complainants' testimonies. Accused-appellant stresses the absence of receipts evidencing complainants' payment and argues that he would not have hesitated to issue the same if it were true that he did transact with them. This argument, being purely hypothetical, does not strengthen his denial nor weaken the complainants' testimonies. That there were no receipts does not mean that he did not transact with them. Moreover, he questions complainants' failure to insist on a receipt after they allegedly paid their recruitment fees. Complainants have satisfactorily explained that they did not insist on one because accusedappellant threatened that they would not be able to depart if they insisted. Who can fault them for giving up a measly receipt in return for a golden opportunity to fulfill their dreams of earning easy money abroad? The Court in an earlier case had observed that "poor laborers, seamen, domestics, and other workers (who) see employment abroad as the only way out of their grinding poverty." 19 Moreover, there is nothing unusual in complainants' failure to investigate the truth of appellant's representations as regards his personal and business background for, being inexperienced and titillated by the prospect of traveling to the proverbial land of milk and honey, they fell easy prey to appellant's glibness and roseate promises. Even Teresita Santiago, the eldest complainant, endowed though she was with a college degree, fell for his suave ways and could not

4 help but be impressed when she saw him driving a car and learned that he was staying in an apartelle. What clinched his credentials, in her eyes, was his acquaintance with a certain Atty. Efren Ramos whom she knew. Another evidence presented by the prosecution was the letter of accused-appellant addressed to Dalton Dizon. A portion states: . . . kung iurong nila Ate Tess ang demanda makakagawa ako ng paraan para maybalik ang wala sa kanila within 20 days basta nasa laya ako . . . 20 When this was formally offered in evidence, accused-appellant did not object to its admissibility. He cannot now deny its authorship and assert that it should not be given evidentiary value. While the quoted portion mentions only Teresita Santiago, it does not support accused-appellant's alternative theory that if he should be found guilty of having committed illegal recruitment, it should be limited only to Teresita Santiago whose name was mentioned in his letter. A careful reading shows that accused-appellant promises to return to Teresita Santiago and company ("nila" Ate Tess) the money he got from them ("kanila") in connection with his representations that he can send them abroad. The crime of illegal recruitment has two elements. First, the offender is a non-licensee or non-holder of authority to lawfully engage in the recruitment and placement of workers; and second, the offender undertakes either any recruitment activity defined under Article 13 (b) or any prohibited practice enumerated under Article 34 of the Labor Code. 21 That the offender is not authorized by the POEA to engage in the recruitment and placement of workers is evidenced by the certification 22 of the POEA. In fact, the parties stipulated on the testimony of Mr. Ruben de Castro. Jr. regarding his lack of authority. The testimonies of complainants unerringly pointed to accused-appellant as the one who enlisted, contracted and promised employment to them. Accused-appellant's denial cannot prevail over the positive assertions of complainants to whom we can hardly ascribe any motive to testify falsely against him. 23 Undoubtedly, accusedappellant's dealings with the four complainants constitute illegal recruitment committed on a large scale. Nitong mga nakaraang buwan, ang pansin ng sambayanan ay natuon sa mga krimen na karumaldumal na katulad ng pagpatay at pagsasamantala sa ating mga kababaihan. Wari ay nakaligtaan natin ang mga salarin na di nahuhuli sa mga mamamatay tao. Sila rin ay nagsasamantala sa mga inosente at walang malay. Ang kaibhan nga lamang ay ang kanilang biktima ay yaong ating mga kababayan na nangangarap na mangibang bayan upang sila ay mahango sa karalitaan sampu ng kanilang pamilya. Sa masidbi nilang hangarin, halos hindi, nagdadalawang-isip kapag may balanang nangangako na ipadadala sila sa mga bayang nakaririwasa kung sila ay magbabayad ng sapat na salapi. Upang mapaniwala sila, ang mga may masasamang tangka ay nagpapanggap na sila ay malakas at may koneksyon sa mga Embahada ng mga bayang ito. Hindi lamang madudulas ang kanilang dila. Umaasta silang maykaya. Naroong sabihin na nakatira sila sa otel o pook ng mayayaman. Kapag nakikipagkita sa kanilang kliyente ay magara ang suot at nakakotse. Anupat ang mga pobreng nangangarap ay gagawin ang lahat ng makakaya upang makapagbayad ng hinihinging pamasahe sa eroplano. Kadalasan ay nangungutang sila o ang mga magulang nila sa "sinco-seis;" o dili kaya'y nagsasangla ng lupain o nagbibili ng mga ari-ariang gaya ng kalabaw. Kanila namang nahihimok ang kamaganakan nila na tumulong sapagkat nangangakong magpapadala ng higit na maraming kuwarta na pambayad sa kanilang utang o dili kaya ay pampaaral sa mga nakababatang kapatid. Sa oras na nakapagbitiw ng salapi ang biktima, ang manlilinlang ay dagling nawawala na parang bula. Sapagkat karamihan sa kanila ay "illegal recruiter" at walang lisensya sa Philippine Overseas Employment Administration (POEA), hindi na matutunton ang kanilang bakas. Totoong napakarami na ang ating kaawa-awang kababayan na napagsamantalahan na ng gayon. Nakalulungkot na kahit na magbabala ang pamahalaan at ang mga opisinang kinauukulan, hindi rin dinidinggin ng mga nais na mapabuti ang kalagayan nila sa buhay sa pamamagitan ng pangingibang bayan. Napapanahon nang iparating sa mga salarin na iyan na hindi pahihintulutan ng pamahalaan ang gayong malawakang pangloloko sa mga maralita na masasabing ang kasalanan lamang ay "naghangad ng kagitna, isang salop ang nawala." Kami ay maaasahang magpataw ng akma at nauukol na parusa na bilanggo habang buhay at multa sa halagang Isang Daang Daang Libong Piso (P100,000.00) sa katulad ng nasasakdal sa kasong itong nakasalang sa Kataastaasang Hukuman ngayon. 24 Umaasa kaming ito ay magsisilbing halimbawa sa mga walang awa nating kababayan na patuloy ang gawang panlilinlang sa kanilang kapwa Pilipino. WHEREFORE, the decision of the lower court dated April 3, 1991 finding accused-appellant guilty beyond reasonable doubt of Illegal Recruitment in Large Scale is AFFIRMED. SO ORDERED.

G.R. No. 97028 May 21, 1993 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ALICIA B. GAOAT, accused-appellant.

The Solicitor General for plaintiff-appellee. Mauricio C. Ulep for accused-appellant.

NARVASA, C.J.: On September 22, 1987, the appellant, Alicia B. Gaoat, and two (2) others Magdalena Abenir Irons and Domingo B. Babol were charged before the Regional Trial Court of Manila with the crime of violation of Article 38 (1) of Presidential Decree No. 1412 in relation to Article 13 (b) (c) of the New Labor Code of the Philippines, as amended . . . " The case was docketed as Criminal Case No. 87-57826. The acts allegedly constituting the crime are set out in the information as follows:
That in or about and during the period comprised between June, 1986 and February, 1987, inclusive, in the City of Manila, . . . the said accused, conspiring and confederating together and helping one another, willfully, unlawfully, and feloniously defraud LUCIA BERNARDO, FROILAN BRIONES AND REYNALDO VALIDOR, who are applicants for Stewardess, Utility Galley and Utility Man in Miami, Florida, U.S.A., by then and there collecting the sum of P15,300.00, P19,300.00 and P15,500.00, respectively, which are P10,300, P14,300.00 and P10,000.00, respectively, more than the maximum placement and documentation fees of P5,000.00 to cover all costs and services relative to their recruitment pursuant to M.C. No. 5, Series of 1985 which is allowed by the POEA for them to collect from said LUCIA BERNARDO, FROILAN BRIONES AND REYNALDO VALIDOR, to the damage and prejudice of the said complainants inn the aforesaid amount of P10,300.00, P14,300.00 and P10,000.00, respectively.

On the same day, September 22, 1987, three (3) other informations were separately filed against the aforenamed individuals, Gaoat, Irons and Babol. These were docketed as Criminal cases Numbered 87-57827, 87-57828, and 87-57829. The indictments basically accused them of receiving money from the same persons already named, Lucia Bernardo, Froilan Briones and Reynaldo Validor in the amounts stated in the information just quoted upon the "false and fraudulent" representations and assurances that "they had the power and capacity to recruit and employ said . . . (said persons) and could facilitate the processing of the pertinent papers in connection therewith," which money they did thereafter "misappropriate, misapply and convert to their own personal use and benefit to the damage and prejudice of . . . (their victims) . . . ." And in October, 1987, three (3) more informations were filed against Alicia B. Gaoat, charging her with estafa, allegedly committed in conspiracy "with others whose true names, identities and present whereabouts are still unknown." Specifically, she was charged with having, on different occasions in 1986, obtained money from Pricilla de Leon y Lautrizo, Reynaldo Singuya y Gabriel, and John Fortes y Co thru "false manifestations and fraudulent representations that she had the power and capacity to recruit and employ . . . (persons applying therefor) and could facilitate the processing of the pertinent papers if given the necessary amount to meet the requirements thereof," but once in possession of the money, she "feloniously misappropriated, misapplied and converted (it) to her own personal use and benefit to the damage and prejudice of . . . (her victims)." The cases were respectively docketed as criminal cases Numbered 87-58151, 87-58085, 87-58086. Only Alicia B. Gaoat was arrested in connection with these seven (7) indictments. None of her coaccused was ever apprehended or brought to trial. As far as is known, her co-defendants have remained at large to this day. On being arraigned, Alicia Gaoat entered a plea of not guilty in relation to all the seven (7) cases against her, with the assistance of counsel de parte. the cases were subsequently consolidated before Branch 49 of the regional Trial Court of Manila 1 and, by agreement of the parties, a joint trial was conducted. On February 3, 1989, the trial Court rendered judgment the dispositive portion of which reads as follows: 2
WHEREFORE, judgment is hereby rendered in the aforementioned cases, as follows:

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1. In Criminal Case No. 87-57826, the Court finds the accused Alicia Gaoat guilty beyond reasonable doubt, as principal, for the crime of illegal recruitment, in a large scale, defined in Article 39 in relation to Articles 32, 34 and 38 of the Labor code, as amended, and in relation to memorandum Order No. 5, series of 1985 and Book I, Rule II, Section 1 (cc) of the rules of the Philippines Overseas Employment Administration and hereby imposes on her the penalty of LIFE IMPRISONMENT with all the accessory penalties of the law and to pay a fine of P100,000.00, without subsidiary imprisonment in case of insolvency. 2. Criminal Cases Nos. 87-57827 to 87-57829 are hereby dismissed only as against the Accused Alicia Gaoat. 3. The Accused Alicia Gaoat is hereby acquitted of the crime charged in Criminal Cases No. 87-58158, 87-58036 and 87-58085 for failure of the Prosecution to prove the guilt of the Accused beyond reasonable doubt for said crime. The Court cannot render judgment on the civil liability of the Accused in favor of the Private Complainants because the Department of Labor and Employment has already ordered Roan Philippines, Inc. and First Integrated Bonding and Insurance Company, Inc., to pay, jointly and severally, the Private Complainants their monetary claims against the said corporations ( Exhibit "D").

Gaoat filed a motion for reconsideration of the verdict on February 20, 1989. The motion was denied. hence, the appeal at bar, "only with respect to the order of conviction," as her counsel is careful to point out. to gain acquittal, she strives to make the following points, to wit: 3 1) she was "only obeying and acting [on] the orders of her superiors (in Roan Philippines, Inc.);" indeed, "she wanted to resign from the company but was overtaken by events beyond their control;" 2) being a mere cashier, she was never informed of the circular allegedly violated: "Memorandum Circular No. 5 of the POEA (Re: Overcharging of Placement Fees)," and insofar as it is made to apply to her, "the law is oppressive and unjust;" 3) assuming she is responsible for the crime charged, the milder form of responsibility should have been imposed on her. Alicia Gaoat was the cashier of Roan Philippines, Inc., 4 a recruitment or manning agency. the latter's operations were suspended by the Philippine Overseas Employment Administration in the first quarter of 1987. 5 At that time, Gaoat was receiving a salary of P1,150.00 a month, as cashier. 6 Her superiors later indicted with her as allegedly her co-conspirators were Magdalena Abenir Irons, the President of the Company, 7 and Domingo B. Babol, the General Manager. 8 Although no less than seven (7) crimes were attributed to her one for illegal recruitment, and six (6) for estafa she was, to repeat, convicted of only one, the first, that for illegal recruitment. Now, the information under which she was convicted, accused her of having, willfully, unlawfully and feloniously and in conspiracy with her superiors, Irons (president of the corporation) and Babol (general manager), collected from LUCIA BERNARDO, FROILAN BRIONES and REYNALDO VALIDOR applicant's for stewardess, Utility Galley and Utility Man in Miami, Florida, U.S.A. the sums of P15,300.00, P19,300.00 and P15,000.00, respectively, which amount are more than the maximum placement and documentation fees of P5,000.00 allowed by the POEA pursuant to its Memorandum Circle No. 5, Series of 1985 to cover all costs and services relative to their recruitment. Unfortunately for the prosecution, its evidence does not adequately show that Gaoat had any knowing and wilfull participation in dealing with, and fixing and collecting fees from, the complaining witnesses. There is no proof that she knew that the fees being collected were in excess of those allowed by law or regulation or that she knew or had been advised of any such limits. There is no proof that she had talked with any of the complainants about the amounts they would have to pay to Roan Philippines, Inc.; in fact, she was absolved from the six (6) other accusations leveled against her, that she had made "false and fraudulent" representations and assurances to the complaining witnesses that she and her co-accused "had the power and capacity to recruit and employ said . . . (said complainants) and could facilitate the processing of the pertinent papers in connection therewith." 9 Neither is there any proof that she had converted or misappropriated any part of the

money coming into her hands as cashier. All that the State's evidence does show is that after Irons or Babol had fixed the fees payable by complainants, they had turned over the money collected to Gaoat or instructed her to receive the money directly from said complainants for recording (in index cards) and subsequent deposit in the bank, as were her duties as company cashier, in line with normal practice and usage. 10 The paucity of the prosecution evidence as regards the appellant's complicity in the crime charged is evident, for instance, from the testimony of Lucia Bernardo, one of the complainants. Lucia Bernardo testified pertinently as follows: 11
FISCAL FORMOSO: When you went there in May, 1986, to whom did you talked with? WITNESS: To Mrs. Magdalena Iron, sir. FISCAL FORMOSO: What did she tell you? WITNESS: I was told to fill up an application form, sir. FISCAL FORMOSO: What else did she tell you? WITNESS: I was told to come back after a few days for my interview, sir. FISCAL FORMOSO: When you went there for the first time, were you able to talk to Mr. Babol? WITNESS: Yes, sir. FISCAL FORMOSO: And what did Babol tell you? WITNESS: He told me that if I pass the interview I would be able to leave in a period of six months, sir. FISCAL FORMOSO: Upon the filing of your application what were the requirement ( sic) asked of you? WITNESS: The Seaman's book, Medical certificate and the NBI Clearance, sir. FISCAL FORMOSO: Were you able to accomplish these requirements? WITNESS:

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Yes, sir. FISCAL FORMOSO: To whom did you submit? WITNESS: To Mr. Babol, sir. FISCAL FORMOSO: After that what did he tell you? WITNESS: I was asked to give them cash bond, sir. FISCAL FORMOSO: When you submitted those requirements to Babol, what did he tell you? WITNESS: He told me to give a cash bond, sir. FISCAL FORMOSO: Were you able to give? WITNESS: Yes, sir. FISCAL FORMOSO: How much? WITNESS: P15,300.00, sir. FISCAL FORMOSO: What else? WITNESS: Fee for the plane ticket, sir. FISCAL FORMOSO: By the way, how much was the total amount that you were obliged to pay in order that you could leave? WITNESS: P30,000.00 all in all, sir. FISCAL FORMOSO: And out of this P30,000.00, you were only able to pay P15,300.00? WITNESS:

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Yes, sir. FISCAL FORMOSO: To whom did you give this P15,300.00? WITNESS: I was informed by Mrs. Iron to give the money to Mrs. Alicia Gaoat, their cashier, sir. FISCAL FORMOSO: When you delivered the P15,300.00 were the persons present? WITNESS : My companions who made payments also, sir. FISCAL FORMOSO: Now, was Mr. Babol present when you gave the P15,300.00? WITNESS: Yes, sir. FISCAL FORMOSO: What did he tell you, if any? WITNESS: That I would also give the money to Mrs. Alicia Gaoat, sir. FISCAL FORMOSO: Did you actually give the P15,300.00? WITNESS: Yes, sir. xxx xxx xxx

Lucia Bernardo made clear that it was Babol and Irons who had assured her she would be able to leave for her projected employment in Miami, Florida, U.S.A., and instructed her to pay the fees required of her to Alicia Gaoat; 12 and that she had spoken to the latter only after paying the amount fixed by Irons and Babol. 13 Much the same thing may be said of the evidence given by other complainant, Froilan Briones. 14 Froilan Briones' testimony is that it was only Ms. Irons, Mr. Babol, and a certain Ms. Robinson who interviewed him and other applicants; that it was the first two, Irons and Babol, who asked that he put up a cash bond; and that all that Gaoat did was to receive the money that he (Briones) was told by Irons and Babol to pay. 15 Nor is there any evidence satisfactorily establishing that Gaoat had "conspired and confederated" with her co-accused, apart from the implausibility on its face of the theory of conspiracy between a mere clerk or cashier, on the one hand, and her superiors, the president and the general manager of the company, on the other, because of the patent disparity in their status or rank. On this point, and as regards Gaoat's failure to issue official receipts to the complainants, the Office of the solicitor general makes the following persuasive observations: 16
. . . (T)he evidence thus far adduced is bereft of any showing of conspiracy among the three (3) accused. Neither could it be inferred from the act of appellant in receiving or accepting the money paid

11
by private complainants since indubitably, she was merely complying with the orders of her superiors. As established by the evidence, appellant received said sums of money in her capacity as cashier of the Roan Philippines, Inc. All transactions, insofar as she is concerned, were above board. She had no inkling that the corporation would in the future, without her knowledge, simply fold-up, leaving her and other co-employees to the wayside, so to speak. Proof beyond reasonable doubt is required to establish a finding of criminal conspiracy (Castaneda vs. Sandiganbayan, 171 SCRA 263). Granting that appellant was negligent in failing to issue receipts to private complainants, such failure was sufficiently explained as having been omitted per specific instruction of the president, Mrs.. Iron and/or the general manager, Mr. Babol. There was, therefore, no concurrence by herein appellant with her superiors in withholding issuance of receipts. In analogy, "the concurrence of accused's negligence with the defalcation perpetrated by his coaccused will not suffice to make him a co-conspirator" (Valdez vs. People, 173 SCRA 1163). The prosecution has thus failed to prove that appellant conspired with the other accused in this case, clearly and convincingly as the commission of the crime itself (Valdez vs. People, supra). The acts of appellant in receiving money from private complainants far exceeding that required by law, in her official capacity as cashier is not among acts enumerated in law as "recruitment and placement".

WHEREFORE, the decision of the Court a quo in Criminal Case No. 87-57826, subject of this appeal, is REVERSED and SET ASIDE, and the appellant, Alicia B. Gaoat, ACQUITTED, with costs de officio. SO ORDERED.

[G.R. No. 120835-40. April 10, 1997] PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. TAN TIONG MENG alias "TOMMY TAN", accused-appellant.

DECISION
PADILLA, J.:

12

Accused-appellant Tan Tiong Meng alias "Tommy Tan" was charged with Illegal Recruitment in Large Scale and six (6) counts of estafa. The information for large scale illegal recruitment reads: "That on or about the period comprising June 1993 to August, 1993, in the City of Cavite, Republic of the Philippines and within the jurisdiction of this Honorable Court, the above-named accused, using a business name RAINBOW SIM FACTORY, a private employment recruiting agency, and misrepresenting himself to have the capacity to contract, enlist and transport Filipino workers for employment abroad with the ability to facilitate the issuance and approval of the necessary papers in connection therewith, when in fact he did not possess the authority or license from the Philippine Overseas Employment Administration to do so, did, then and there, wilfully, unlawfully and knowingly for a fee, recruit in a large scale and promise employment in Taiwan to the following persons, to wit: Ernesto Orcullo y Nicolas P15,000.00 Manuel Latina y Nicanor P15,000.00 Neil Mascardo y Guiraldo P15,000.00 Librado C. Pozas P15,000.00 Edgardo Tolentino y Vasquez P15,000.00 Gavino Asiman P15,000.00 as in fact, the said persons gave and delivered the abovestated amount, respectively, to the herein accused who know fully well that the aforesaid persons could not be sent to Taiwan, to the damage and prejudice of said aforementioned private complainants." [1]
i

The informations for estafa aver substantially the same allegations as follows: "In Criminal Case No. 277-93: That on or about June 7, 1993, in the City of Cavite, Republic of the Philippines and within the jurisdiction of this Honorable Court, the above-named accused by means of false representations that he can secure an employment in Taiwan for Ernesto Orcullo y Nicolas as a factory worker induced the latter to entrust to him the amount of P15,000.00, in consideration of the promised employment, but the herein accused, once in possession of the amount, with intent to defraud, with grave abuse of confidence and without fulfilling his promise, did, then and there, wilfully, unlawfully and knowingly, misapply, misappropriate and convert the same to his own personal use and benefit and notwithstanding repeated demands made upon him for the return of the amount, accused herein failed and refused to do so, to the damage and prejudice of Ernesto Orcullo y Nicolas in the amount of P15,000.00, Philippine Currency." [2]
ii

The other informations for estafa involve the following complainants and amounts. 1) 2) 3) 4) 5) Neil MascardoManuel Latina Ricardo GrepoLibrado Pozas Gavino Asiman P15,000.00 P15,000.00 P20,000.00 P15,000.00 P15,000.00

Accused-appellant pleaded not guilty to all the informations and all seven (7) cases were tried jointly. On 12 May 1995, the Regional Trial Court, Branch 88, Cavite City rendered a decision* the dispositive part of which reads: "WHEREFORE, judgment is hereby rendered as follows:

13

1. In Criminal Case No. 278-93, the Court finds the accused GUILTY beyond reasonable doubt of the crime of illegal recruitment in large scale defined and penalized under Article 38 of the Labor Code, as amended in relation to Article 39 thereof, and hereby sentences him to a penalty of life imprisonment, and to pay a fine of P100,000, without subsidiary imprisonment in case of insolvency; 2. In Criminal Case No. 277-93, the Court finds the accused GUILTY beyond reasonable doubt of the crime of Estafa defined and penalized under Article 315 (2) (a) of the Revised Penal Code and hereby sentences him to a penalty of imprisonment of two (2) years as minimum, to six (6) years as the maximum; and to pay ERNESTO ORCULLO the sum of P15,000 as actual damages and P15,000 as moral and exemplary damages; 3. In Criminal Case No. 279-93, the Court finds the accused GUILTY beyond reasonable doubt of the crime of Estafa defined and penalized under Article 315 (2) (a) of the Revised Penal Code, and hereby sentences him to a penalty of imprisonment of two (2) years as minimum, to six (6) years as the maximum, and to pay NEIL MASCARDO the sum of P15,000 as actual damages and P15,000 as moral and exemplary damages; 4. In Criminal Case No. 280-93, the Court finds the accused GUILTY beyond reasonable doubt of the crime of Estafa defined and penalized under Article 315 (2) (a) of the Revised Penal Code and hereby sentences him to a penalty of imprisonment of two (2) years as minimum, to six (6) years as maximum; and to pay MANUEL LATINA the sum of P15,000 as actual damages, and P15,000 as moral and exemplary damages; 5. In Criminal Case No. 343-93, the Court finds the accused GUILTY beyond reasonable doubt of the crime of Estafa defined and penalized under Article 315 (2) (a) of the Revised Penal Code, and hereby sentences him to a penalty of imprisonment of two (2) years as minimum, to six (6) years as maximum; and to pay RICARDO GREPO the sum of P20,000 as actual damages and P20,000 as moral and exemplary damages; 6. In Criminal Case No. 365-93, the Court finds the accused GUILTY beyond reasonable doubt of the crime of Estafa defined and penalized under Article 315 (2) (a) of the Revised Penal Code, and hereby sentences him to a penalty of imprisonment of two (2) years as minimum, to six (6) years as maximum and to pay LIBRADO POZAS the sum of P15,000 as actual damages and P15,000 as moral and exemplary damages; 7. In Criminal Case No. 371-93, the Court finds the accused GUILTY beyond reasonable doubt of the crime of Estafa defined and penalized under Article 315 (2) (a) of the Revised Penal Code, and hereby sentences him to a penalty of imprisonment of two (2) years as minimum, to six (6) years as maximum; and to pay GAVINO ASIMAN the sum of P15,000 as actual damages and P15,000 as moral and exemplary damages. In addition to the foregoing penalties, the accused being an alien, shall be deported without further proceedings after service of sentence. In the service of his sentence, the accused shall be credited with the full time during which he underwent preventive imprisonment, provided he voluntarily agreed in writing to abide by the same disciplinary rules imposed upon convicted prisoners, otherwise, he shall be credited with only four-fifths (4/5) thereof (Article 29, RPC, as amended by RA No. 6127 and BP Blg. 85). SO ORDERED."
iii

[3]

On appeal to this Court, accused-appellant assigns a single error allegedly committed by the trial court, thus: "THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED GUILTY BEYOND REASONABLE DOUBT OF THE OFFENSE OF ILLEGAL RECRUITMENT IN A LARGE SCALE UNDER CRIMINAL CASE NO. 278-93 AND ESTAFA IN CRIMINAL CASE NOS. 277-93, 279-93, 28093, 343-93, 365-93, AND 371-93." [4]
iv

The case for the prosecution averred the following facts: Gavino Asiman testified that a certain Jose Percival Borja who was a friend of his relative informed him that a job recruiter would be at Borja's house at Capt. Villareal St., Cavite City, in case anyone was interested in an

14

overseas job in Taiwan. Asiman further recalled that on 18 August 1993, he and his friend, Librado Pozas went to Borja's house where they met the accused-appellant who told them he could get them jobs as factory workers in Taiwan with a monthly salary of P20,000.00. Accused-appellant required them to submit their passport, bio-data and their high school diploma as well as to pay P15,000.00 each for placement and processing fees. The former issued two (2) receipts which he signed in the presence of Asiman and Pozas. [5] Accused-appellant assured them that they could leave for Taiwan twelve (12) days later. Asiman stated that they filed the complaints for illegal recruitment when they learned that accused-appellant was arrested for illegal recruitment activities.
v

Librado Pozas corroborated the testimony of Asiman. He added that Borja had no participation in the offense as his house was merely used as a meeting place by accused-appellant. Neil Mascardo testified that he met accused-appellant through a friend and also through Jose Borja. Mascardo narrated that on 7 July 1993, he went to Borja's house to meet accused-appellant who assured him of getting him an employment in Taiwan at the Rainbow Ship Co., a marble and handicraft factory with a monthly salary of P20,000.00. He further testified that he paid P15,000.00 to accused-appellant for placement and processing fees as shown by a receipt signed by accused-appellant. [6] Accused-appellant first told him he could leave on 15 July 1993. When he later inquired about his departure date, accused-appellant told him he could leave by the end of July 1993. After July, accused-appellant told him he would leave on 15 August 1993 together with his uncle Manuel Latina. When he failed to leave on the last mentioned date and accused-appellant told him he would leave on 28 August 1993, Mascardo told accused-appellant he wanted his money back. Accusedappellant told him that a refund was not possible since he had already sent the money to his brother-in-law in Taiwan. Mascardo decided to file a complaint for illegal recruitment on 28 August 1993. On 31 August 1993, he, Manuel Latina and Ernesto Orcullo went to the Philippine Overseas Employment Administration (POEA) where they found out that accused-appellant was not a licensed or authorized overseas recruiter.
vi

Ricardo Grepo testified that on 11 August 1993, he went to Borja's house where he met with accused-appellant who received from him P15,000.00 for placement and processing fees. Accused-appellant told him he could get a job as a factory worker in Taiwan with a monthly salary of P20,000.00. Accused-appellant gave him a signed typewritten receipt [7] and assured him he could leave for Taiwan on 28 August 1993. Accusedappellant later told him that his visa was not yet ready and he thereafter learned from Jose Borja that accusedappellant had been arrested for illegal recruitment activities. Grepo filed his complaint on 30 August 1993.
vii

Lucita Mascardo-Orcullo testified that she is the wife of Ernesto Orcullo, one of the complainants. She stated that on 7 June 1993, she went with her husband to Borja's house where they gave Ernesto's passport and other papers to accused-appellant who assured them that Ernesto could get a job as a factory worker in Taiwan. Lucita further averred that they paid P15,000.00 to accused-appellant for placement and processing fees as shown by a receipt signed by accused-appellant. [8]
viii

Dionisa Latina testified that she is the wife of complainant Manuel Latina. She stated that on 9 June 1993, she and her husband went to Borja's house to meet accused-appellant who told them that Manuel could get a job at a toy factory in Taiwan. They paid P15,000.00 to accused-appellant who issued a receipt [9] and assured them Manuel could leave on 30 June 1993. After said date, accused-appellant kept on promising them that Manuel would be able to leave for Taiwan. The promises were never fulfilled.
ix

Angelina de Luna, a Senior Labor Employment Officer of the POEA, testified that their office received a subpoena from the trial court requiring the issuance of a certification stating whether or not Tan Tiong Meng alias Tommy Tan was authorized by the POEA to recruit workers for overseas employment. De Luna presented a certification signed by Ma. Salome S. Mendoza, Chief, Licensing Branch of the POEA dated 7 July 1994 stating that accused-appellant is neither licensed nor authorized by the POEA to recruit workers for overseas employment. [10]
x

Accused-appellant Tan Tiong Meng alias Tommy Tan was the only witness for the defense. He testified that he is a Singaporean national married to Estelita Oribiana, a Filipino-Chinese. He added that he works as a sales representative for Oribiana Laboratory Supplies, a company owned by his brother-in-law which sells laboratory equipment to various schools in Cavite. Tan alleged that Jose Percival Borja was introduced to him by a certain Malou Lorenzo at the office of their laboratory supplies in Sta. Cruz, Manila. Lorenzo allegedly told him that Borja needed his help in processing job applications for abroad. When he talked to Borja, the latter told him that he could help in convincing

15

applicants that they could work in Taiwan. Borja offered him a P1,000.00 commission from the amount paid by each applicant. Tan admitted having received money from all the complainants but he said that all the money was turned over to Borja after deducting his commission. Tan likewise admitted that he and his wife are respondents in about seventy (70) cases of estafa and illegal recruitment but that it was Lorenzo who was the main recruiter. The prosecution presented Jose Percival Borja as a rebuttal witness. Borja testified that Tan was introduced to him by Malou Lorenzo. Accused-appellant told him that they were direct recruiters for jobs in Taiwan and that he has relatives there. Tan's offer was attractive considering that he charged only P15,000.00 while the prevailing rate for job placements was P45,000.00-P60,000.00. Borja added that he even told his friends and relatives to apply with accused-appellant. Tan had told him that he sometimes comes to Cavite to deliver laboratory equipment. When Tan called him up to tell him he was in the area, Borja told him to come to his house. It was at his house where Tan accepted money from several job applicants most of whom he (Borja) did not know. When Borja realized that Tan had cheated the applicants, he helped set up a trap and had Tan arrested by his neighbor Tony Guinto, a Cavite City policeman. Borja later learned that Tan had victimized several people in Batangas and Metro Manila. In the present appeal, accused-appellant would have the Court believe that he merely acted as a collector of money for the principal recruiter Borja who made the representations that he (Tan) could give the applicants jobs in Taiwan. He maintains that he merely received commissions from the transactions and that the deceit was employed not by him but by Borja who introduced him as a job recruiter. The Court is not impressed by such bizarre pretensions. Several revealing circumstances belie the version for the defense, namely: 1. Neil Mascardo testified that accused-appellant told him he could no longer return his money because he had already sent it to his brother-in-law Lee Shut Kua in Taiwan; 2. All the receipts issued to complainants were signed by accused-appellant;

3. Tan admitted that he and his wife are respondents in about seventy (70) cases for estafa and illegal recruitment in Batangas; [11]
xi

4. Tan executed a sworn statement dated 13 September 1993 before SPO2 Eduardo G. Nover, Jr. in the presence of his lawyer Atty. Florendo C. Medina wherein he admitted receiving P15,000.00 from Gavino Asiman; [12]
xii

5. The complainants all pointed to Tan and not Borja as the one who had represented to them that he could give them jobs in Taiwan. There is no showing that any of the complainants had ill-motives against Tan other than to bring him to the bar of justice. The testimonies of the witnesses for the prosecution were straight-forward, credible and convincing. The constitutional presumption of innocence in Tan's favor has been overcome by proof beyond reasonable doubt and we affirm his convictions. The Labor Code defines recruitment and placement thus: "(A)ny act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not; Provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement." [13]
xiii

It is clear that accused-appellant's acts of accepting placement fees from job applicants and representing to said applicants that he could get them jobs in Taiwan constitute recruitment and placement under the above provision of the Labor Code. The Labor Code prohibits any person or entity, not authorized by the POEA, from engaging in recruitment and placement activities thus:

16

"(a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 of this Code x x x x (b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group." [14]
xiv

The POEA having certified that accused-appellant is not authorized to recruit workers for overseas employment, it is clear that the offense committed against the six (6) complainants in this case is illegal recruitment in large scale punishable under Article 39 (a) of the Labor Code with life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00). Accused-appellant's guilt of six (6) separate crimes of estafa has likewise been proven. The argument that the deceit was employed by Jose Percival Borja and not by accused-appellant is specious, even ridiculous. All the complainants agreed that it was accused-appellant Tan who assured them of jobs in Taiwan. The assurances were made intentionally to deceive the would-be job applicants to part with their money. In People v. Calonzo, [15] the Court reiterated the rule that a person convicted for illegal recruitment under the Labor Code can be convicted for violation of the Revised Penal Code provisions on estafa provided the elements of the crime are present. In People v. Romero [16] the elements of the crime were stated thus:
xv xvi

a)

that the accused defrauded another by abuse of confidence or by means of deceit, and

b) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third person. Both elements have been proven in this case. One final point. The names of a certain Malou Lorenzo and Chit Paulino have been mentioned by accusedappellant as being illegal recruiters whom he contends are either the main recruiters or their agents. It also appears that accused-appellant's wife Estelita Oribiana who is a co-accused in the other illegal recruitment complaints may be a part of a large syndicate operating in Batangas, Cavite and Metro Manila. There is nothing on the record to show that attempts were made to investigate these three (3) people. The campaign and drive against illegal recruiters should be continuous and unrelenting. Government should not be content with bringing to justice but a number of these diabolic denizens of society who thrive on the dreams of our countrymen of having a better life. Only when the last of their tribe has been convicted and punished can the government rightfully claim that it has fulfilled the constitutional mandate to protect the rights and promote the welfare of workers. [17]
xvii

WHEREFORE, the judgment appealed from finding accused-appellant Tan Tiong Meng alias "Tommy Tan" guilty of illegal recruitment in large scale and six (6) counts of estafa, is hereby AFFIRMED. Costs against accused-appellant. SO ORDERED.

17

i[G.R. No. 119076. March 25, 2002] PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROGER SEGUN and JOSEPHINE CLAM, accused-appellants. DECISION
KAPUNAN, J.:

Appellants Roger Segun and Josephine Clam were charged before the Regional Trial Court (RTC) of Iligan City with violating Article 38 of the Labor Code, as amended, in an information reading: That on or about the 3rd day of March, 1993 and for sometime thereafter, at Linamon, Lanao del Norte, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating and mutually helping each other, did then and there willfully, unlawfully and feloniously canvass, enlist, contract, transport and recruit for employment the following 13 persons, namely: Without any license and/or authority to engage in recruitment and placement of workers from the Department of Labor and Employment.[1] Upon arraignment, appellants pleaded not guilty to the above charges. The prosecution presented eight (8) witnesses, namely, Francita L. Manequis, Conchita Tambacan, Josephine Aba, Melecio Ababa, Rogelio Collantes, Loreta Caban, Christine Collantes and Elena Araas. Manequis, Employment Officer III and Administrative Officer of the Department of Labor and Employment (DOLE), identified two certifications issued by Allan Macaraya, then DOLE Director for Region XII.[2] The first Certification,[3] dated October 7, 1993, stated that per records available in this Office appellants were neither licensed nor authorized by this Department to recruit workers for overseas employment. The second,[4] dated May 17, 1993, was issued upon the request of [the] Honorable Mayor of Linamon, Lanao del Norte, Mayor Alejandro C. Alfeche. It stated that appellants, per records of this Office, were not authorized to conduct recruitment for local and overseas employment. Conchita Tambacan, 50, married, a tobacco vendor and a resident of Linamon, Lanao del Norte testified that her son Mario, then 17, was recruited by appellants on March 6, 1993 and brought to Manila. She knew that he was recruited only because many told [her]. Her son did not consult her regarding the recruitment. At the time of her testimony, her son had sent her only two letters from Cabanatuan City but had not returned home to Linamon, Lanao del Norte. After learning of her sons recruitment, Mrs. Tambacan went to the Mayor of Linamon who, in turn, verified from DOLE whether appellants had any authority to undertake recruitment. Subsequently, the mayor handed Mrs. Tambacan the certification dated May 17, 1993.[5] Josephine Ozarraga Aba, 28, married, a housekeeper, and a resident of Linamon, is the aunt of twins Pedro and Pablo Ozarraga. Pedro and Pablo, then 18, are the sons of her deceased sister. Mrs. Aba testified that sometime in March or April 1993 her nephews told her that they wanted to go to Manila and that they were recruited. Her nephews were then jobless and were looking for work. Mrs. Aba went to appellants house to inquire from appellants, who were her neighbors, if what her nephews told her was true. In appellants house, she saw appellants, her nephews, among others. Appellants told her that her nephews would be given free fare to Manila, free meals and good wages. These they also promised her nephews. Mrs. Aba claimed that appellants brought one of the twins to Cabanatuan and the other to Bulacan. When she testified, her nephews had not yet returned to Linamon.[6] Melecio Ababa, 64, married, a fish vendor, and a resident of Linamon, Lanao del Norte, is the grandfather of Jhonely and Jonard Genemelo. Sometime in April 1992, Ababa learned that appellants had recruited his grandsons. Ababa asked his grandsons, Why will you work there [in Cabanatuan City] [when] in fact you can find jobs here? Ababa went to the house of appellants who assured him

that the transportation to Manila was free, and that his grandsons were to be provided free meals and paid good wages. Because of these promises, he acquiesced to the recruitment. At the time of his testimony, Ababas grandsons had not returned to Linamon. All he received from them were two letters but no money.[7] Another complainant, Rogelio Collantes, 44, jobless and a resident of Linamon, Lanao del Norte, is the husband of Victoria Collantes and the father of Christine, then 13, and Rogelio, Jr., then 6. Sometime in April 1993, Rogelio learned that appellants had recruited Victoria, Christine and Roger. Rogelio talked to appellants who promised that his wife and childrens transportation to Manila and meals will be free and that they will receive good wages. Victoria, Christine and Rogelio, Jr., who were then looking for jobs, were then brought to Cabanatuan City. At the time of his testimony, Rogelios children had already returned to Linamon, traveling home with appellant Josephine Clam. Collantes wife, though, was still in Nueva Ecija. She had sent letters to Rogelio thrice, and money twice, once in the amount of P1,000.00 and the other time P800.00.[8] The prosecution also presented Rogelios daughter Christine, who was among those allegedly recruited by appellants. Christine said her parents were jobless during the months of March and April 1993 and were looking for work. Upon the invitation of appellants, she and her mother went to the house of appellants on March 26, 1993. Appellants offered her mother a job. Christine went with her mother to Cabanatuan City where her mother forced her to work. According to Christine, those recruited totaled thirteen, including her mother and her brother. She and the others took a boat to Manila and Cabanatuan City. Appellants shouldered the transportation expenses. In Cabanatuan, Christine did housework for a certain Engr. Sy for seven (7) months. She was paid P500.00 a month. She returned home in Linamon on December 4, 1993. Neri Clam, Josephines sister, paid for her fare to Manila. Like Christine, her mother Victoria also performed housework in Cabanatuan City for a certain Mabini Llanera. Her brother, Rogelio, Jr., was not able to find work because he was still a child.[9] Loreta Cavan,* 14, and also a resident of Linamon, Lanao del Norte, testified that sometime in March 1993, she was recruited by appellants and brought to Manila then to Cabanatuan City. She related that she met appellants in the house of Josephine Clam, where she was recruited. Appellants told her that Cabanatuan City was a good place because the salary [was] big. Loreta agreed to go. Loreta further stated that those recruited by the couple totaled thirteen, including the twin brothers Pedro and Pablo, a certain woman named Pasbel, a certain Johnny, and Loretas sister Luther. At Cabanatuan City, Loreta was able to work for a certain Barangay Captain Centioco for three (3) months for P600.00 a month. Loreta purportedly was not paid for her services since her two months salary was supposed to pay for her fare to Manila. Loreta denied that she went to the house of appellants to seek their help. Rather, appellants allegedly offered her a job. Appellants invited her to go to their house on March 27, 1993. Loreta learned from her sister Luther that appellants were recruiting. Loretas sister Luther, who was among those listed in the information as having been recruited by appellants, went to Manila to work but her job was not provided by appellants.[10] The prosecution also offered the testimony of Ester Cavan, the mother of Loreta Cavan, to corroborate the latters testimony. The same was dispensed with, however, the corroborative nature thereof having been admitted by counsel for the defense.[11] Finally, Elena Araas, mother of Richard Araas, related that on March 6, 1993 appellants brought her son, then 19, to Cabanatuan City. Her son, who was then looking for work, was promised that he would be given a good salary. She learned of the promise when she went to appellants house where she saw appellants, her son, among others. Elena claimed that she was present when appellants approached her son and offered him work in Cabanatuan City. Elena agreed to the recruitment of her

son because of the promise of a good salary. However, she has not heard from her son since he left nor had she received any money from him.[12] Appellants defense was predicated on denial. They presented five witnesses to support their case. Myrna Sasil, 35, married, a housekeeper and a resident of Iligan City, testified that in March 1993 she went to the appellants residence to ask them to find a job in Manila for her daughter Margie. Prior to that, Myrna had known appellants for almost a year. She knew that appellants could help their daughter find work in Manila because they just came from Manila themselves. She said that before she went to appellants house, she did not know that appellants were sending people to Manila for work. As Myrnas family was then suffering from financial difficulties, Josephine agreed to find work for Myrnas daughter. According to Myrna, Margie left with the thirteen persons listed in the information as having been recruited by appellants. Appellants paid for Margies fare to Manila, which she reimbursed from her salary. At the time of Myrnas testimony, Margie was still working in Cabanatuan City and was sending Myrna money from her salary.[13] Losendo Servano, 50, married, a farmer and a resident of Linamon, Lanao del Norte, is a neighbor of appellants as well as those of the thirteen persons they allegedly recruited. Losendo had known Josephine Clam since she was born, and Roger Segun when the latter and Josephine got married. Losendo testified that his son Ruel did not have work in Linamon. If Ruel stayed in Linamon, Losendo said he would become a hoodlum or a delinquent. His son thus requested appellants to take him with them to Manila and find work for him, saying Manang, Manong, I just go with you to Manila. In April 1993, Ruel, appellants and thirteen others left for Manila by boat. Appellants shouldered Ruels expenses in going to Manila. When Ruel was able to find work, he paid appellants by installment. Losendo claims that his son found work through the help of appellants.[14] Virgincita Ozarraga, 30, a housekeeper and a resident of Linamon, Lanao del Norte, is the sister of appellant Josephine Clam. She is also the aunt of the twins Pedro and Pablo Ozarraga and a neighbor of the thirteen persons allegedly recruited by appellants. According to Virgincita, Josephine Clam went to Nueva Ecija in 1991 but transferred in 1992 to Dagupan City. In both places, Josephine worked as a house helper. Roger Segun, on the other hand, worked as liaison officer for Rolmar Employment Services. Virgincita disputed Conchita Tambacans testimony that appellants recruited the latters son Mario. She said that Mario went to appellants house. Josephine did not promise him a job because they were not recruiters although appellants assured him they would help him find a job. Virgincita further testified that in March 1993 Pedro and Pablo Ozarraga also went to the house of Virgincitas mother to ask appellants to help them find work because there were times they could not eat. Josephine allegedly told the twins that she was not a recruiter but she would help them find work. She purportedly said the same thing to Jhonely and Jonard Genemelo, Victoria and Christine Collantes, and Loreta and Luther Cavan. Josephine also told them that she was not promising them anything. Appellants and the thirteen persons they purportedly recruited left for Manila by boat. Appellants paid for their fare and were able to find work for them in Manila, Cabanatuan and other places in Luzon. Thereafter, appellants returned to Linamon. To Virgincitas knowledge, no people sought their help to find them jobs after the couple returned from Manila.[15] Appellant Roger Segun, 34, single, is an employee of the Rolmar Employment Services. As the liaison officer of the agency, appellant undertakes the processing of the papers for the agencys license. According to appellant, around April and May of 1993, the thirteen persons listed in the information went to the house of Josephine Clam to ask her to help them find jobs in Cabanatuan City. Their

neighbors knew that Josephine used to work in Cabanatuan City, Pangasinan and Dagupan City. Josephine told them that she was not a recruiter although she would help them find work. Appellants accompanied the thirteen to Manila as they (appellants) were going there anyway. Appellants shouldered their neighbors transportation and other expenses from Linamon to Cabanatuan City upon the promise that they (appellants) would be paid back. Eventually, some paid while others did not. Roger did not bother to ask for payment from those who did not pay. He claimed he was able to help find jobs for their neighbors by recommending them to friends who needed helpers and workers. Until they were able to find jobs, the thirteen stayed in Rogers house in Cabanatuan City. Roger admitted that neither he nor Josephine Clam had a license to recruit. He said he was not a recruiter. He also revealed that after he brought the thirteen to Manila, he tried to secure a license to recruit but his application was disapproved.[16] Appellant Josephine Clam, 28, single, and residing at Linamon, Lanao del Norte, used to work as a house helper in Pangasinan and Bulacan for a year after which she returned to Linamon. Around March and April 1993, the thirteen persons listed in the information went to her house to ask her help to find them work. They knew that Josephine used to work in Pangasinan and Dagupan. She told them she would try her best to help them but informed them that she was not a recruiter. Roger and Josephine shouldered their neighbors transportation and food expenses on the condition that their neighbors reimburse appellants once they found jobs. Some of them eventually paid them back although others did not. Appellants were able to find jobs for the thirteen since Roger had many friends. Josephine admitted that she did not have any license to recruit since she was not a recruiter. She and Roger helped their neighbors find jobs because she took pity on them when they begged her to help them find jobs. She even spent her and Rogers joint savings to answer for her neighbors expenses.
[17]

Based on the foregoing evidence, the Iligan City RTC convicted appellants for violating Article 38 of the Labor Code, as amended: WHEREFORE, finding the accused guilty beyond reasonable doubt of Illegal Recruitment of the 13 persons mentioned in the information, namely: Mario Tambacan, Mary Jane Cantil, Richard Aranas, Victoria Collantes, Christine Collantes, Rogelio Collantes, Luther Caban, Loreta Caban, Jonard Genemilo, Jhonely Genemilo, Pedro Ozarraga, Pablo Ozarraga and Pacifico Villaver in a large scale, the accused are hereby sentenced to suffer a penalty of life imprisonment for each of them and to pay a fine of P100,000.00 each. The bail bond put up by the accused is hereby ordered cancelled, in view of the penalty imposed by this Court of life imprisonment, which is a nonbailable offense. SO ORDERED.[18] Appellants contend that their guilt was not proven beyond reasonable doubt. They maintain that it was their neighbors who approached them in the house of Josephine Clams mother and solicited their assistance in their (the neighbors) desire to go to Manila. Josephine Clam had a history of employment in Luzon and had just returned to Linamon. In Josephine, the neighbors saw an opportunity to taste economic progress and escape poverty and stagnation. Appellants took pity on them and helped them find jobs, even defraying their neighbors travel expenses. They submit, therefore, that they were not engaged in the recruitment of persons for employment but in pursuit of a lawful and noble endeavor for the benefit of the less fortunate. They neither collected nor received any consideration for their efforts. Appellants point out that of the 13 allegedly recruited only Christine Collantes and Loreta Cavan testified against them. Considering these circumstances, appellants submit that the evidence against them is at most ambiguous and inconclusive.[19] The crime of illegal recruitment in large scale is committed when three elements concur. First, the offender has no valid license or authority required by law to enable one to lawfully engage in

recruitment and placement of workers. Second, he or she undertakes either any activity within the meaning of recruitment and placement defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. Third, the offender commits said acts against three or more persons, individually or as a group.[20] There is no dispute that the first element is present in this case. The certification dated May 17, 1993 and issued by DOLE Region XII Director Allen Macaraya, states that appellants were not authorized to conduct recruitment for local and overseas employment. Both appellants conceded they have no license to recruit.[21] The next question is whether appellants undertook any activity constituting recruitment and placement as defined by Article 13 (b) of the Labor Code, which states: Recruitment and Placement refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. Did the prosecution prove beyond a reasonable doubt that appellants canvassed, enlisted, contracted and transported the thirteen persons listed in the information? In examining the prosecutions evidence, we bear in mind that a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three (3) or more persons whether individually or as a group.[22] While the law does not require that at least three (3) victims testify at the trial, it is necessary that there is sufficient evidence proving that the offense was committed against three (3) or more persons.[23] There is no evidence that appellant undertook the recruitment of Mary Jane Cantil and Pacifico Villaver. Neither Cantil nor Villaver testified in court. No witness testified as to the fact of their recruitment. Christines testimony establishes beyond a reasonable doubt that appellants recruited Christines mother Victoria. Christine explicitly stated that appellants offered her mother a job and told them that they would be given work. Victoria thus agreed to appellants proposal that she would be given a job in Cabanatuan City. However, there is reasonable doubt whether appellants actually recruited Christine herself since Christine said that she was forced by [her] mother to work in Cabanatuan City. The Court also entertains grave doubts regarding the alleged recruitment of Christines brother Rogelio, Jr., who, according to Christine, went with their mother and was not able to work because, at 6, he was still a child. Did Rogelio, Jr. go to Cabanatuan City to work or did he just go together with his mother so she could look after him? The former is unlikely while the latter is not farfetched since the child was too young to work and still needed looking after. The prosecution, however, succeeded in proving that appellants recruited Loreta Cavan. Loreta testified that appellants told her that the salary in Cabanatuan City was good, that she agreed to their proposal for her to work there, and that they brought her to Manila then to Cabanatuan City: As we held earlier, recruit is a legal conclusion. The witness must testify as to the facts that would prove recruitment. It does not suffice that the witness simply state that the accused recruited the victim. Hence, the testimony of Josephine Aba that appellants recruited her nephews is, by itself, insufficient to convict appellants for the recruitment of Pedro and Pablo Ozarraga. That appellants allegedly told Josephine Aba that her nephews would be given free fare and meals is not inconsistent with appellants account that they paid for their neighbors expenses. The same holds true for the claim that appellants brought the twins to Cabanatuan and Bulacan. According to appellants, they accompanied the thirteen persons to help them find work. The reference to good

wages could mean that the rates of compensation in Cabanatuan or Bulacan are relatively high compared to those in Lanao del Norte. These circumstances do not necessarily mean that appellants recruited Pedro and Pablo Ozarraga. We cannot give much credence to Josephines statement that appellants also promised free fare and meals, and good wages to her nephews since the prosecution did not show that Josephine was present when appellants made this supposed promise to her nephews. Neither did the prosecution prove beyond reasonable doubt that appellants recruited Jhonely and Jonard Genemelo. Melecio Ababa, grandfather of Jhonely and Jonard testified on direct examination: Note again the use of the term recruit, a defect present in the testimonies of Rogelio Collantes, Loreta Cavan and Josephine Aba. While Melecio Aba said that appellants promised his grandsons free transportation and meals, and good wages, these promises, as we have observed in analyzing Josephine Abas testimony, are not incongruent with appellants version. Lastly, Elena Araas testimony on her son Richards alleged recruitment is insufficient to prove appellants guilt. Elena testified on direct examination: Elenas testimony fails to state the specific act constituting the recruitment. Elena merely declared that her son was recruited a legal conclusion. Appellants also supposedly said that they have work in Cabanatuan City and that they will help [her] son to find a job. Elena did not state the context and the circumstances under which these statements were made. Moreover, the statements attributed to appellants are ambiguous and hardly incongruous with appellants claim that they assisted their neighbors find work, which assistance does not necessarily translate to an act of recruitment. That there was a supposed promise of a good salary is also ambiguous for, as noted earlier, the reference to good wages could mean that the rates of compensation in Cabanatuan City are higher compared to those in Lanao del Norte. In sum, the prosecution failed to elicit from many of its witnesses the specific acts constituting the recruitment of the other alleged victims. The prosecution was able to prove that appellants performed recruitment activities only in the cases of Victoria Collantes and Loreta Cavan. The third element of illegal recruitment, i.e., that the offender commits the acts of recruitment against three or more persons is, therefore, absent. Consequently, appellants can be convicted only of two counts of simple illegal recruitment. WHEREFORE, the Decision of the Regional Trial Court is MODIFIED. Appellants are found GUILTY beyond reasonable doubt of two counts of illegal recruitment, as defined and punished by Article 38 (a) of the Labor Code, in relation to Articles 13 (b) and 39 thereof. They are each sentenced to suffer for each count imprisonment of four (4) to five (5) years. SO ORDERED.

ii iiiBROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILIPPINES V. ZAMORA147 SCRA 49GUTIERREZ, J. FACTS 1.On July 11, 1969, Brotherhood Labor Unity Movement of the Philippines (BLUMP), filed a complaint against San Miguel Corporation.2.It alleged that respondents ordered the individual complainants to disaffiliate from the complainant union, the management then dismissed the individual complainantswhen they insisted on their union membership.3.Petitioners are workers who have been employed at the San Miguel Parola Glass Factory for nearly 7 years prior to their dismissal. They worked as cargadores orpahinantes at the SMC plant loading, unloading, piling or palleting empty bottles andwooded shells to and from company trucks and warehouses.4.Respondents alleged that the complainants have never been their employees and were employees of an independent contractor, Camahort.5.Petitioners first reported for work to Camahort who signs their gate passes and the respondent company provided them with tools, equipment and paraphernalia used inloading, unloading, piling and hauling operations.6.Job orders came from Camahort. The orders are then transmitted to an assistantofficer-in-charge. In turn, the assistant informs the warehouseman and checkersregarding the same. The latter, thereafter, relays said orders to the capatazes orgroup leaders who then give orders to the workers as to where, when and what toload, unload, pile, pallet or clean.7.Petitioners were pain every 10 days on piece rate. The group leader notes down the number or volume of work that each individual worker has accomplished. Camahortapproves the final report.8.Petitioners also worked exclusively for SMC plnt, never having been assigned toother companies or departments of SMC plant, even when the volume of work isminimum. ISSUE Are the petitioners employees of private respondent, San Miguel Corporation? HELD YES. In determining the existence of employee-employer relationship, the elements that aregenerally considered are the following:1 . t h e s e l e c t i o n a n d e n g a g e m e n t o f t h e e m p l o y e e 2 . t h e p a y m e n t o f w a g e s 3 . t h e p o w e r o f d i s m i s s a l 4.the employers power to control the employee with respect to the means andmethods by which the work is to be accomplished.It is the so-called control test that is the most important element.Applying the above criteria, the evidence strongly indicates the existence of an employer,employee relationship between the petitioner workers and respondent San MiguelCorporation. The respondent asserts that the petitioners are employees of the GuaranteedLabor Contractor, an independent labor contracting firm.The facts and evidence on record negate respondent SMC's claim.The existence of an independent contractor relationship is generally established by thefollowing criteria: "whether or not the contractor is carrying on an independent business; thenature and extent of the work; the skill required; the term and duration of the relationship;the right to assign the performance of a specified piece of work; the control and supervisionof the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises tools,appliances, materials and labor; and the mode, manner and terms of payment."None of the above criteria exists in the case at bar.Highly unusual and suspect is the absence of a written contract to specify the performanceof a specified piece of work, the nature and extent of the work and the term and duration ofthe relationship. The records fail to show that a large commercial outfit, such as the SanMiguel Corporation, entered into mere oral agreements of employment or labor contractingwhere the same would involve considerable expenses and dealings with a large number ofworkers over a long period of time. Despite respondent company's allegations not an iota ofevidence was offered to prove the same or its particulars. Such failure makes respondentSMC's stand subject to serious doubts.Uncontroverted is the fact that for an average of seven (7) years, each of the petitioners hadworked continuously and exclusively for the respondent company's shipping andwarehousing department. Considering the length of time that the petitioners have workedwith the respondent company, there is justification to conclude

that they were engaged toperform activities necessary or desirable in the usual business or trade of the respondent,and the petitioners are, therefore regular employees.

iv v vi vii viiiCONTINENTAL MARBLE V. NLRC161 SCRA 151PADILLA, J. FACTS 1.Rodito Nasayao claimed that sometime in May 1974, he was appointed plant manager of Continental Marble with an alleged compensation of P3,000.00 a monthor 25% of the monthly net income of the company, whichever is greater.2.When the company failed to pay his salary for the months of May, June and July1974, Nasayao filed a complaint with NLRC.3.Continental Marble denied that Rodito Nasayao was its employee. They claimed that the undertaking agreed by the parties was a joint venture, a sort of partnership,wherein Nasayao was to keep the machinery in good working condition and in return,he would get the contracts from end-users for the installation of marble products, inwhich the company would not interfere.4.In addition, Nasayao was to receive an amount equivalent to 25% of the net profits that the petitioner corporation would realize, should there be any. Since there hadbeen no profits during said period, private respondent was not entitled to anyamount. ISSUE Whether or not the private respondent Nasayao was employed as plant manager of petitioner Continental Marble Corporation. HELD NO. There was nothing in the record which would support the claim of Rodito Nasayao thathe was an employee of the petitioner corporation. He was not included in the companypayroll nor in the list of company employees furnished by the Social Security System.Most of all the element of control is lacking.It appears that the petitioner had no control over the conduct of Rodito Nasayao in theperformance of his work. He decided for himself on what was to be done and worked at hisown pleasure. He was not subject to indefinite hours or conditions of work and in turn wascompensated according to the results of his on effort. He has a free hand in running thecompany and its business, so much so, that the petitioner did not know until very later thatNasayao collected old accounts receivables, not covered by their agreement, which heconverted to his personal use

ix xSEVILLA V. COURT OF APPEALS160 SCRA 171SARMIENTO, J. FACTS 1.Mrs. Segundina Noguera leased her premises located at Ermita, Manila to Tourist World Service, Inc. (TWSI), represented by Eliseo Canilao, for the latters use asbranch office. In the said contract Mrs. Lina Sevilla held herself solidarily liable withTWSI for the prompt payment of the monthly rental agreed on.2.When the branch office was opened, the same was run by petitioner Mrs. Sevilla, who was designated as branch manager by TWSI. For any fare bought in on theefforts of Mrs. Sevilla,, 4% was to go her and 3% was to be withheld by TWSI3.In November 1961, TWSI was allegedly informed that Mrs. Sevilla was connectedwith a rival travel firm. Since the branch office was losing, TWSI considered closing itdown. The firms board of directors issued two resolutions; the first abolishing theoffice of manager of the Ermita Branch Office and the second, authorizing thecorporate secretary to receive the property of TWSI in said branch.4.In January 1962, the lease contract to use the premises as branch office was terminated. In June 1962, the Corporate Secretary went over to the office to complywith the mandate of the resolutions. Finding the premises locked and unable tocontact Mrs. Sevilla, he padlocked the premises to protect the interests of TWSI5.As such, petitioners Spouses Sevilla filed a complaint against respondents TWSI, Canilao and Noguera, praying for mandatory preliminary injunction. Petitioners claimthat Mrs. Sevillas relationship with TWSI was one of joint business venture and notone of employment.6.In its answer, TWSI contend that Mrs. Sevilla was its employee and as such was designated manager.7.The trial court held for the private respondents. It ruled that TWSI, being the true lessee, has the privilege to terminate the lease and padlock the premises. It alsoheld that Mrs. Sevilla was a mere employee of TWSI and that she was bound by theact of her employer.8.The Court of Appeals affirmed said decision, Hence, the instant petition. ISSUE Whether or not there is an employer-employee relationship between TWSI and Mrs. Sevilla. HELD NO. There is no employer-employee relationship between TWSI and Mrs. Sevilla. There hasbeen no uniform test to determine the existence of an employer-employee relation. Ingeneral, The Court has relied in the so-called control test, where the person for whom theservices are performed reserves a right to control not only the end to be achieved but alsothe means to be used in reaching such end.The records will show that the petitioner, Lina Sevilla, was not subject to control by theprivate respondent Tourist World Service, Inc., either as to the result to the means used inconnection therewith. In the first place, under the contract of lease covering the TouristWorlds Ermita office, she had bound herself in solidum as and for rental payments. A trueemployee cannot be made to part with his own money in pursuance of his employersbusiness, or otherwise, assume any liability thereof. In that event, the parties must be boundby some other relation, but certainly not employment. In the second place, when the branchoffice was opened, the same was run by Mrs. Sevilla payable to TWSI. Thus it cannot besaid that she was under the control of TWSI as to the means used. She obviously relied onher own capabilities.It is further admitted that Mrs. Sevilla was not in the companys payroll. For her efforts, sheretained 4% in commissions from airline bookings, the remaining 3% going to TWSI. Unlike an employee then, who earns a fixed salary usually, Mrs. Sevilla earned compensation influctuating amounts depending on her booking successes.The fact that Sevilla had been designated branch manager does not make her, ergo,TWSIs employee. Employment is determined by the right of control test and certaineconomic parameters. Titles are weak indicators.However, there is no joint venture or partnership between TWSI and Mrs. Sevilla, either. TheCourt is of the opinion that the relationship of said parties is one that of a principal and anagent. But unlike simple grants of a power of attorney, the agency that the Court herebydeclares to be compatible with the intent of the parties cannot be revoked at will. The reasonis that it is an agency coupled with an interest. Thus, TWSI is held liable for damages for itsunwarranted revocation of the contract of agency

xiJARDIN V. NLRC326 SCRA 299QUISUMBING, J. FACTS 1.Petitioners were drivers of respondent Philjama International Inc., a domestic corporation engaged in the operation of "Goodman Taxi." Petitioners used to driveprivate respondent's taxicabs every other day on a 24-hour work schedule under theboundary system.2.The petitioners earned an average of P400.00 daily from which respondent regularly deducts the amount of P30.00 supposedly for the washing of the taxi units.3.Believing that the deduction is illegal, petitioners decided to form a labor union toprotect their rights and interests.4.Upon learning about the plan of petitioners, private respondent refused to letpetitioners drive their taxicabs when they reported for work on August 6, 1991, andon succeeding days.5.Petitioners suspected that they were singled out because they were the leaders and active members of the proposed union. Aggrieved, petitioners filed with the laborarbiter a complaint against private respondent for unfair labor practice, illegaldismissal and illegal deduction of washing fees.6.The labor arbiter dismissed said complaint for lack of merit.7.On appeal, the NLRC reversed and set aside the judgment of the labor arbiter. Thelabor tribunal declared that petitioners are employees of private respondent, and, assuch, their dismissal must be for just cause and after due process.8.Private respondent's second motion for reconsideration was granted and said court ruled that it lacks jurisdiction over the case as petitioners and private respondenthave no employer-employee relationship. Expectedly, petitioners soughtreconsideration of the labor tribunal's latest decision which was denied. Hence, theinstant petition .ISSUE Whether or not employer-employee relationship exists between the petitioners and respondent Philjama International, Inc. HELD YES. In the determination the existence of employer-employee relationship, the SupremeCourt has applied the following four-fold test: '(1) the selection and engagement of theemployee; (2) the payment of wages; (3) the power of dismissal; and (4) the power ofcontrol the employees conduct.' Under the control test, an employeremployee relationshipexists if the 'employer' has reserved the right to control the 'employee' not only as to theresult of the work done but also as to the means and methods by which the same isto be accomplished. Otherwise, no such relationship exists.In a number of cases decided by this Court, we ruled that the relationship between jeepneyowners/operators on one hand and jeepney drivers on the other under the boundary systemis that of employer-employee and not of lessor-lessee. We explained that in the lease ofchattels, the lessor loses complete control over the chattel leased although the lesseecannot be reckless in the use thereof, otherwise he would be responsible for the damages tothe lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercisesupervision and control over the latter. The management of the business is in the owner'shands. The owner as holder of the certificate of public convenience must see to it thatthe driver follows the route prescribed by the franchising authority and the rules promulgatedas regards its operation. Now, the fact that the drivers do not receive fixed wages but getonly that in excess of the so-called "boundary" they pay to the owner/operator isnot sufficient to withdraw the relationship between them from that of employer andemployee. We have applied by analogy the above-stated doctrine to the relationshipsbetween bus owner/operator and bus conductor, auto-calesa owner/operator and driver, andrecently between taxi owners/operators and taxi drivers. Hence, petitioners are undoubtedly employees of private respondent because as taxi drivers they perform activities which areusually necessary or desirable in the usual business or trade of their employer.

PAN AMERICAN WORLD AIRWAYS SYSTEM V. PAN AMERICAN EMPLOYEESASSOCIATION1 SCRA 527REYES, JBL FACTS 1.Petitioner herein claims that the one hour meal period should not be considered as overtime work, because the evidence showed that complainants could restcompletely, and were not in any manner under the control of the company during thatperiod.2.The court below found, on the contrary, that during the so-called meal period, the mechanics were required to stand by for emergency work; that if they happened notto be available when called, they were reprimanded by the lead man; that as in fact ithappened on many occasions, the mechanics had been called from their meals ortold to hurry up eating to perform work during this period. ISSUE Whether or not the 1 hour meal period of the mechanics is considered working time. HELD Yes. The Industrial Courts order for permanent adoption of a straight 8-hour shift includingthe meal period was but a consequence of its finding that the meal hour was not one ofcomplete rest but was actually a work hour, since for its duration, the laborers had to be onready call. xii xiiiLUZON STEVEDORING Co. v. Luzon Marine department Union101 SCRA 257FELIX, J. FACTS 1.On June 21, 1948, Luzon Marine Department Union filed a petition with the Court of Industrial Relations containing several demands against Luzon Stevedoring Co., Inc.2.While the case was still pending, the union declared a strike which was declared illegal by the Court,3.The union filed a Constancia with the Court of Industrial Relations praying that the unresolved demands of the union in their original petition be granted.4.Among the unions demands is that work performed beyond eight hours be paidovertime pay of 50% the regular pay rate and that work performed on Sundays andlegal holidays be paid double the regular rate pay.5.The trial Judge found that the employees worked from 6:00 AM to 6:00 PM daily andfor work performed in excess of 8 hours, the employees were given overtime pay ofP4.00 for officers, patrons and radio operators and P2.00 for the rest of the crew.6.The counsel for the union filed a motion for reconsideration praying that the decision be modified so as to declare and rule that the members of the Union who hadrendered services from 6:00 AM to 6:00 PM were entitled to 4 hours overtime payand that whatever little time allotted to the taking of their meal should not bededucted from the four hours of overtime rendered by said employees.7.Luzon Stevedoring also sought for the reconsideration of the decision only insofar as it interpreted that the period during which the seaman is aboard a tugboat shall beconsidered as working time for the purpose of the 8-hour law. ISSUE Is the definition for hours of work as presently applied to dryland laborers equally applicable to seamen? HELD Section 1 of the Commonwealth Act 444 provides that the legal working day for any personemployed by another shall not be more than 8 hours daily. When work is not continuous,the time during which the laborer is not

working and can leave his working place and canrest completely, shall not be counted.For the purposes of this case, the Court need not set aside for seamen a criterion differentfrom that applied to laborers on land, for under the provisions of the law, the only thing to bedone is to determine the meaning and scope of the word working place used therein. Asthe Court understand this term, a laborer need not leave the premises of the factory, shop orboat in order that his period of rest shall not be counted, it being enough that he ceases towork, may rest completely and leave or may leave at his will the spot where he actuallystays while working, to go somewhere else, whether within or outside the premises of saidfactory, shop or boat. If these requisites are complied with, the period of such rest shall notbe counted. xiv xv xvi TRADERS ROYAL BANK VS. NLRC189 SCRA 274GRINO-AQUINO, J.: FACTS 1.On November 1986, TRB employees union filed a complaint with the NLRC for diminution of benefits regarding holiday pay, mid-year and year-end bonuses.2.NLRC ordered the Bank to pay the employees holiday pay differentials for 1983-1986, as well as mid-year and year-end bonus differential for 1986 .ISSUE Did the NLRC abuse its discretion in ordering the payment of mid-year and year-end bonus differentials? HELD YES. A bonus is a gratuity or an act of liberality of the giver which the recipient has no right todemand as a matter of right. The granting of bonus is basically a management prerogative whichcannot be forced upon the employer. In the case at bar, the matter of giving bonuses over andabove lawful salaries and allowances is entirely on the profits realized by the Bank. In 1986, theBank weakened considerably due to suspicions that it was a Marcos-owned and controlled bank,and was placed under sequestration by the PCGG.The union contention that the granting of bonuses has ripened into a company practice that maynot be adjusted to the prevailing financial condition of the Bank, has no legal or moral bases. Itsfiscal condition having declined, the Bank may not be forced to give bonuses it cannot pay, andin effect, be penalized for its past generosity to its employees.There can be no diminution of benefits because bonuses are not part of labor standards in thesame class as salaries, cost of living allowances, holiday pay and leave benefits.The NLRC is modified by deleting the award for bonus differentials for 1986 xvii TABAS VS. CALIFORNIA MANUFACTURING INCGR NO. 806680, JANUARY 26, 1989 FACTS 1.Petitioners were the employees of Livi Manpower Services. They were assigned to the respondent pursuant to a manpower supply agreement as promotionalmerchandisers.2.It was provided in the agreement that: 1) California would have no control or supervision over the workers as to how they perform or accomplish their work, 2) Liviis an independent contractor and that it has the sole responsibility of complying withall the existing as well as future laws, rules and regulations pertinent to employmentof labor, 3) the assignment to California was seasonal and contractual, and 4)payroll, including COLA and holiday pay shall be delivered Livi at Californiaspremises.3.Petitioners were made to sign 6-month employment contracts which were renewed for the same period. Unlike regular employees of California, they did not receivefringe benefits and bonuses and were paid only a daily allowance.4.Petitioners contend that they have become regular employees of California. Subsequent to their claim for regularization, California no longer re-hired them. Livi,on the other hand, claims the workers as its employees and that it is an independentcontractor.5.Labor Arbiter found that no employer-employee relationship existed. The NLRCaffirmed the ruling. ISSUE Is there an employer-employee relationship between California and the petitioners?

HELD YES. The existence of an employer-employee relationship is a question of law and cannotbe made subject to agreement. The stipulations in the manpower supply agreement will noterase either partys obligations as an employer.Livi is a labor-only contractor, notwithstanding the provisions in the agreement. The natureof ones business is not determined by self-serving appellations but by test provided bystatute and the prevailing case law.Californias contention that the workers are not performing activities which are directlyrelated to its general business of manufacturing is untenable. The promotion or sale ofproducts, including the task of occasional price tagging, is an integral part of themanufacturing business. Livi as a placement agency had simply supplied the manpowernecessary for California to carry out its merchandising activities, using the latters premisesand equipment. Merchandising is likewise not a specific project because it is an activityrelated to the day-to-day operations of California.Based on Article 106 of the Labor Code, the labor-only contractor is considered merely anagent of the employer and liability must be shouldered by either one or by both.Petitioners are ordered reinstated as regular employees.

MAFINCO TRADING CORPORATION VS. OPLEGR NO. L-37790, MARCH 25, 1976 FACTS 1.Cosmos Aerated Water Factory, a firm based at Malabon, Rizal, appointed petitioner Mafinco as its sole distributor of Cosmos soft drinks in Manila.2.Rodrigo Repomanta and Mafinco executed a peddling contract whereby Repomantaagreed to buy and sell Cosmos soft drinks. Rey Moralde entered into a similarcontract.3.Months later, Mafinco terminated the peddling contract with Repomanta andMoralde. Consequently, Repomanta and Moralde, through their union, filed acompliant with the NLRC, charging the general manager of Mafinco for illegallydismissing them.4.Mafinco filed a motion to dismiss the complaint on the ground that the NLRC had no jurisdiction because Repomanta and Moralde were not its employees but wereindependent contractors. It stressed that there was termination of the contract not adismissal of an employee. ISSUE Whether or not there exist an employer-employee relationship between petitioner Mafinco and private respondents Repomanta and Moralde. HELD The Supreme Court held that under the peddling contracts, Repomanta and Moralde werenot employees of Mafinco but were independent contractors as found by the NLC and itsfact finder and by the committee appointed by the Secretary of Labor to look into the statusof Cosmos and Mafinco peddlers.A contract whereby one engages to purchase and sell soft drinks on trucks supplied by themanufacturer but providing that the other party (peddler) shall have the right to employ hisown workers, shall post a bond to protect the manufacturer against losses, shall beresponsible for damages caused to third persons, shall obtain the necessary licenses andpermits and bear the expenses incurred in the sale of the soft drinks is not a contract ofemployment. COCA-COLA BOTTLERS PHIL., INC. VS. HINGPIT294 SCRA 594NARVASA, CJ FACTS 1.Pioneer Multi-Services Co (PIONEER) and Lipercon Services, Inc (LIPERCON) are manning companies with which Coca-Cola successively entered into contracts forthe supply of manpower needs of its plant in Tagbilaran.2.Coca-Colas contract with Pioneer was executed on May 28, 1983 and that withLipercon, 5 years later, on December 17, 1988.3.11 persons were claiming they were employees of Coca-Cola in its Tagbilaran CityPlant. They filed a complaint against Coca-Cola with the Regional Arbitration Boardof the National Labor Relations Commission in Cebu City.4.In the decision of the RAB, it was found that the complainants were supplied as workers to Coca-Cola first by Pioneer and later by Lipercon. When Lipercon enteredinto the picture, the complainants were already regular employees of CocaCola.This is because while Lipercon was an independent contractor, its predecessorPioneer was not.5.The Commission revered the Labor Arbiters conclusion that Lipercon was an independent labor contractor. It declared it instead to be a mere labor-onlycontractor. ISSUE

Whether or not Lipercon is a labor only contractor. HELD The SC held in the negative. The NLRC grounded its decision solely on an earlier casewhere the court held Lipercon to a be a Labor only contractor because it failed to provethat it has substantial capital, investment, tools, etc.It is not so in the present case. Here, there is substantial evidence detailed by the laborarbiter, to establish Lipercons character as an independent contractor in the real sense ofthe word. The Labor Arbiters ruling is therefore more acceptable that that of theCommission because its decision was founded solely on an inapplicable precedent.Lipercon proved to be an independent contractor. Aside from hiring its own employees andpaying the workers their salaries, it also exercised supervision and control over them whichis the most important aspect in determining employer-employee relations. That indeed hassubstantial capital is proven by the fact that it did not depend upon its billing on respondentregarding payment of workers salaries. And when complainants were separated fromLipercon, they singed quitclaim and release documents

[G.R. No. 169712, March 14, 2008] MA. WENELITA TIRAZONA, Petitioner, vs. COURT OF APPEALS, PHILIPPINE EDS-TECHNO SERVICE INC. (PET INC.) AND/OR KEN KUBOTA, MAMORU ONO and JUNICHI HIROSE, Respondents. DECISION CHICO-NAZARIO, J. Assailed in this Special Civil Action for Certiorari[1] under Rule 65 of the Rules of Court are the Decision[2] and Resolution[3] of the Court of Appeals dated 24 May 2005 and 7 September 2005, respectively, in CA-G.R. SP No. 85065. The appellate court's Decision dismissed petitioner Ma. Wenelita Tirazona's Special Civil Action for Certiorari and affirmed the Decision[4] dated 30 January 2004 of the National Labor Relations Commission (NLRC) in NLRC CA No. 034872-03, which ruled that petitioner's dismissal from employment was legal; and its Resolution which denied petitioner's Motion for Reconsideration. The factual and procedural antecedents of the case are as follows: Private respondent Philippine EDS-Techno Services Inc. (PET) is a corporation duly registered under Philippine laws and is engaged in the business of designing automotive wiring harnesses for automobile manufacturers. Private respondents Ken Kubota, Mamoru Ono and Junichi Hirose are all Japanese nationals, the first being the President and the latter two being the directors of PET. On 21 July 1999, PET employed Ma. Wenelita S. Tirazona (Tirazona) as Administrative Manager. Being the top-ranking Filipino Manager, she acted as the liaison between the Japanese management and the Filipino staff. On 15 January 2002, Fe Balonzo, a rank-and-file employee, wrote a letter [5] that was addressed to nobody in particular, but was later acquired by PET management. In her letter, Balonzo complained that Tirazona humiliated her while she was reporting back to work after recuperating from a bout of tuberculosis. Balonzo explained that Tirazona insinuated, in a manner loud enough to be heard from the outside, that Balonzo still had the disease. This allegedly occurred despite Balonzo's possession of a medical clearance that proved her fitness to return to work. Balonzo thus requested that the necessary action be undertaken to address the said incident. Upon receiving the letter, the PET management directed Tirazona to file her comment. Tirazona replied accordingly in a letter[6] wherein she denied the accusations against her. Tirazona stated that her only intention was to orient Balonzo about the latter's rights as a sick employee, i.e., that under the law, if the latter planned to resign, the company can give her separation pay. Tirazona likewise asked for an independent investigation and threatened to file a libel case against Balonzo for allegedly trying to destroy her reputation and credibility. After weighing the situation, PET director Ono sent a memorandum to Tirazona, which reads: February 8, 2002 To: Mrs. W. Tirazona Re: Letter-Complaint of Fe S. Balonzo

This is to advise you that Management is satisfied that you did not intend to humiliate or embarrass Ms. Balonzo during the incident on January 14, 2002. It also appreciates the concern you profess for the welfare of PET employees. Nonetheless, Management finds your handling of the situation less than ideal. Considering the sensitive nature of the issue, a little more circumspection could have readily avoided the incident which it cannot be denied caused unnecessary discomfort and hurt feelings to Ms. Balonzo. Certainly, you could have discussed the matter in private and allowed her to first deliver her piece rather than pre-empt her declaration. As it turned out, your assumption (that Ms. Balonzo would request for a leave extension) was in fact wrong and she had a medical certificate attesting her fitness to return to work. Management therefore would like to remind you of the high expectations of your position. Management considers this matter closed, and finds it appropriate to convey to you that it does not view with favor your notice to file legal action. Management believes that you share the idea that issues regarding employee relations are best threshed out within the Company. Resorting to legal action is unlikely to solve but on the contrary would only exacerbate such problems. We trust that, after emotions have calmed down, you would still see it that way. (Sgd.) Mamoru Ono Director[7] On 6 March 2002, Tirazona's counsels sent demand letters [8] to PET's business address, directed separately to Ono and Balonzo. The letter to Ono states: February 27, 2002 MR. MAMORU ONO Director PET, Inc. 20/F 6788 Ayala Avenue Oledan Square, Makati City Dear Mr. Ono: We are writing in [sic] behalf of our client, Ms. MA. WENELITA S. TIRAZONA, Administrative Manager of your corporation. We regret that on February 8, 2002, you delivered to our client a letter containing among others, your conclusion that Ms. Tirazona was guilty of the unfounded and baseless charges presented by Ms. Fe Balonzo in her lettercomplaint dated January 15, 2002. You may please recall that in Ms. Tirazona's letter to Mr. Junichi Hirose, she presented point by point, her side on the allegations made by the complainant. In the same letter, Ms. Tirazona requested for an independent investigation of the case in order to thresh out all issues, ferret out the truth and give her the opportunity to be heard and confront her accuser. These were all denied our client. As a result of the foregoing, Ms. Tirazona's constitutional right to due process was violated and judgment was rendered by you on mere allegations expressed in a letter-complaint to an unknown addressee. Considering the position and stature of Mrs. Tirazona in the community and business circles, we are constrained to formally demand payment of P2,000,000.00 in damages, injured feelings, serious anxiety and besmirched reputation that she is now suffering. We are giving you five (5) days from receipt hereof to make favorable response, otherwise, much to our regret, we will institute legal procedures to protect our client's interests. Please give this matter the attention it deserves. Very truly yours, PRINCIPE, VILLANO, VILLACORTA & CLEMENTE By: (Sgd.) PEDRO S. PRINCIPE

(Sgd.) GLICERIO E. VILLANO The letter sent to Balonzo likewise sought the same amount of damages for her allegedly baseless and unfounded accusations against Tirazona. Because of Tirazona's obstinate demand for compensation, PET sent her a Notice of Charge, [9] which informed her that they were considering her termination from employment by reason of serious misconduct and breach of trust. According to the management, they found her letter libelous, since it falsely accused the company of finding her guilty of the charges of Balonzo and depriving her of due process. On 26 March 2002, Tirazona explained in a letter [10] that her counsels' demand letter was brought about by the denial of her repeated requests for reinvestigation of the Balonzo incident, and that the same was personally addressed to Mamoru Ono and not to the company. She also reiterated her request for an investigation and/or an open hearing to be conducted on the matter. The PET management replied[11] that the Balonzo incident was already deemed a closed matter, and that the only issue for consideration was Tirazona's "ill-advised response to the Management's disposition to the Fe Balonzo incident," for which an administrative hearing was scheduled on 4 April 2002. On 3 April 2002, Tirazona submitted a written demand[12] to PET that the Balonzo incident be included in the scheduled hearing. She further stated that since the management had already prejudged her case, she would only participate in the proceedings if the investigating panel would be composed of three employees, one each from the rank-and-file, supervisory, and managerial levels, plus a representative from the Department of Labor and Employment (DOLE). The PET management rejected Tirazona's demands in a letter [13] and informed her that the hearing was reset to 10 April 2002, which would be presided by PET's external counsel. On 10 April 2002, Tirazona and her counsel did not appear at the administrative hearing. The PET management informed them through a memorandum[14] dated 12 April 2002 that the hearing was carried out despite their absence. Nevertheless, Tirazona was granted a final chance to submit a supplemental written explanation or additional documents to substantiate her claims. Tirazona's written explanation[15] dated 17 April 2002 merely reiterated, without further details, her previous claims, to wit: that Balonzo's charges were unfounded and baseless; that she had been denied due process; and that she would not submit herself to an investigating panel that had already prejudged her case. Tirazona also stated that her claim for damages would be justified at the proper forum, and that she admitted to reading a confidential letter addressed to PET directors Ono and Fukuoka, containing the legal opinion of PET's counsel regarding her case. After finding the explanations unsatisfactory, PET sent Tirazona a Notice of Termination, [16] which found her guilty of serious misconduct and breach of trust because of her demand against the company and her invasion of PET's right to privileged communication. Tirazona then instituted with the NLRC a complaint for illegal dismissal, non-payment of salaries, and damages against PET, docketed as NLRC-CA No. 034872-03. In the Decision[17] dated 22 January 2003, Labor Arbiter Veneranda C. Guerrero ruled in favor of Tirazona, holding that the latter's termination from employment was illegal. The Arbiter declared that there was no breach of trust when Tirazona sent the demand letter, as the same was against Ono in his personal capacity, not against the company. The decision also ruled that PET failed to discharge the burden of proving that the alleged breach of trust was fraudulent and willful, and that the company was careless in handling its communications. The Arbiter further stated that Tirazona was deprived of her right to due process when she was denied a fair hearing. On appeal by PET, the NLRC reversed the rulings of the Labor Arbiter in a Decision dated 30 January 2004, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered SETTING ASIDE the Decision of the Labor Arbiter dated January 27, 2003 and a new one is entered DISMISSING the complaint for lack of merit. [18] Contrary to the Labor Arbiter's findings, the NLRC concluded that Tirazona's termination from employment was in accordance with law. It ruled that Tirazona's demand letter addressed to Ono constituted a just cause for dismissal, as the same was "an openly hostile act" by a high-ranking managerial employee against the company. [19] The NLRC likewise found that PET complied with the notice and hearing requirements of due process, inasmuch as Tirazona's demand for a special panel was without any legal basis. Furthermore, petitioner breached

the company's trust when she read the confidential legal opinion of PET's counsel without permission. The Motion for Reconsideration filed by Tirazona was denied by the NLRC in a Resolution dated 31 May 2004, the dispositive portion of which reads: WHEREFORE, in view of the foregoing, Complainant-Appellee's Motion for Reconsideration is hereby DISMISSED for lack of merit and our Decision dated 30 January 2004 is thus AFFIRMED with finality. [20] Aggrieved, Tirazona instituted with the Court of Appeals a Special Civil Action for Certiorari under Rule 65, alleging grave abuse of discretion on the part of the NLRC, docketed as CA-G.R. SP No. 85065. In a Decision dated 24 May 2005, the appellate court affirmed the NLRC and ruled thus: WHEREFORE, in consideration of the foregoing, the petition is perforce dismissed.[21] Her Motion for Reconsideration having been denied by the appellate court in a Resolution dated 7 September 2005, Tirazona now impugns before this Court the Court of Appeals Decision dated 24 May 2005, raising the following issues: I. WHETHER THERE WAS BREACH OF TRUST ON THE PART OF PETITIONER TIRAZONA WHEN SHE WROTE THE TWO MILLION PESO DEMAND LETTER FOR DAMAGES, WARRANTING HER DISMISSAL FROM EMPLOYMENT. II. WHETHER DUE PROCESS WAS SUFFICIENTLY AND FAITHFULLY OBSERVED BY RESPONDENTS IN THE DISMISSAL OF PETITIONER TIRAZONA FROM EMPLOYMENT. In essence, the issue that has been brought before this Court for consideration is whether or not Tirazona was legally dismissed from employment. Prefatorily, the Court notes that Tirazona elevated her case to this Court via a Petition for Certiorari under Rule 65 of the Rules of Court. The appropriate remedy would have been for Tirazona to file an appeal through a Petition for Review on Certiorari under Rule 45. For a Petition for Certiorari under Rule 65 of the Rules of Court to prosper, the following requisites must be present: (1) the writ is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions: (2) such tribunal, board or officer has acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. [22] There is grave abuse of discretion "when there is a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, such as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross so as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law." [23] The Petition for Certiorari shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration is timely filed, the sixty (60)-day period shall be counted from notice of the denial of the said motion.[24] On the other hand, Rule 45 of the Rules of Court pertains to a Petition for Review on Certiorari whereby "a party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals x x x may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth."[25] The petition shall be filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or of the denial of the petitioner's motion for new trial or reconsideration filed in due time after notice of the judgment.[26] In the present case, the assailed Decision is the dismissal by the Court of Appeals of Tirazona's Petition for Certiorari under Rule 65. Said Decision partakes of the nature of a judgment or final order, thus, is reviewable only through an appeal by certiorari under Rule 45. As aptly declared by the Court in National Irrigation Administration v. Court of Appeals[27]: [s]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. [Emphasis ours.]

Even just a cursory glance at the issues raised by Tirazona before this Court readily reveals that these pertain to purported errors of judgment committed by the appellate court in its appreciation of the allegations, evidence, and arguments presented by the parties. There is no question here of the Court of Appeals acting on Tirazona's Petition in CA-G.R. No. 85065 without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction. A review of the rollo of the Petition at bar divulges even further that Tirazona's resort to a wrong remedy was not an innocent mistake but a deliberate choice. On 5 October 2005, Tirazona filed with this Court a Petition for Extension of Time to File a Petition for Review on Certiorari.[28] Tirazona stated therein that she received the notice of the Court of Appeals Resolution denying her Motion for Reconsideration on 23 September 2005. Since she only had fifteen (15) days after the said date to file a Petition for Review on Certiorari, or until 8 October 2005, Tirazona prayed for an extension of thirty (30) days, with her counsel citing extreme pressures of work. In a Resolution[29] dated 19 October 2005, the Court granted Tirazona's Motion for Extension. The extended period was to end on 7 November 2005. However, Tirazona failed to file a Petition for Review on Certiorari within the said period. Instead, she filed the present Petition for Certiorari on 5 December 2005, seventy-three (73) days after notice of the Court of Appeals Resolution denying her Motion for Reconsideration. From the foregoing, it is fairly obvious that Tirazona was aware that she was supposed to file an appeal through a Petition for Review on Certiorari under Rule 45. That she filed the instant Petition for Certiorari under Rule 65 and only after an inexplicably long period of time leads to the inescapable conclusion that the same was merely an afterthought, nothing more than a desperate attempt to revive a lost appeal. The special civil action of certiorari under Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45, especially if such loss or lapse was occasioned by one's own neglect or error in the choice of remedies. [30] It also bears to stress the well-settled principle that the remedies of appeal and certiorari are mutually exclusive and not alternative or successive. Under Rule 56, Sec. 5(f) of the Revised Rules of Court, a wrong or inappropriate mode of appeal merits an outright dismissal.[31] Tirazona, in her Reply[32] before this Court, even admits that although the instant Petition is one of special civil action of certiorari under Rule 65, her petition is in reality an appeal under Rule 45 as her petition raises pure questions of law. Tirazona herself acknowledges the formal defects of her own Petition and attributes the same to the haste and inadvertence of her former counsel, who allegedly prepared the instant Petition without her participation.[33] She thus urges this Court to suspend the application of its own rules on grounds of equity and substantial justice, considering that it is her employment that is at stake in this case. In this regard, it needs to be emphasized that before the Court may treat the present petition as having been filed under Rule 45, the same must comply with the reglementary period for filing an appeal. This requirement is not only mandatory but also jurisdictional such that failure to do so renders the assailed decision final and executory, and deprives this Court of jurisdiction to alter the final judgment, much less to entertain the appeal. [34] Since the instant petition was filed after the lapse of the extended period for filing an appeal, the same should be dismissed outright. Nevertheless, the Court finds it essential that we discuss the case on its merits, bearing in mind that the paramount consideration in this case is an employee's right to security of tenure, and in order to provide Tirazona the amplest opportunity to know how the Court arrived at a proper and just determination of her case. Even if the Court were to ignore the conspicuous procedural defects committed by Tirazona and treat her Petition as an appeal under Rule 45, it still finds that the Petition must be denied for lack of merit. Petitioner contends that, contrary to the findings of the Court of Appeals, her dismissal from employment was illegal for having lacked both a legal basis and the observance of due process. In employee termination cases, the well-entrenched policy is that no worker shall be dismissed except for a just or authorized cause provided by law and after due process. Clearly, dismissals have two facets: first, the legality of the act of dismissal, which constitutes substantive due process; and second, the legality in the manner of dismissal, which constitutes procedural due process. [35] Under Article 282(c)[36] of the Labor Code, loss of trust and confidence is one of the just causes for dismissing an employee. It is an established principle that loss of confidence must be premised on the fact that the employee concerned holds a position of trust and confidence. This situation obtains where a person is entrusted with confidence on delicate matters, such as care and protection, handling or custody of the employer's property. But,

in order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer. Besides, for loss of confidence to be a valid ground for dismissal, such loss of confidence must arise from particular proven facts. [37] Tirazona claims that her demand letter was merely an expression of indignation by a disgruntled employee against a director, not against the company and, by itself, cannot constitute a breach of trust and confidence. The company's notice of charge allegedly insinuated Tirazona's guilt in the Balonzo incident; hence, the need to defend herself. Tirazona likewise asserts that she is an ordinary rank-and-file employee as she is not vested with the powers and prerogatives stated in Article 212(m) [38] of the Labor Code. As such, her alleged hostility towards her co-workers and the PET management is not a violation of trust and confidence that would warrant her termination from employment. At the outset, the Court notes that the issues set forth above are factual in nature. As the Court is asked to consider the instant Petition as an appeal under Rule 45, then only pure questions of law will be entertained. [39] A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.[40] In the instant case, Tirazona would have the Court examine the actual wording, tenor, and contextual background of both her demand letter and the PET's notice of charge against her. Similarly, the determination of whether Tirazona is a managerial or rank-and-file employee would require the Court to review the evidence that pertains to Tirazona's duties and obligations in the company. Also, in order to ascertain whether the breach of trust was clearly established against Tirazona, the Court will have to sift through and evaluate the respective evidence of the parties as well. These tasks are not for the Court to accomplish. The Court is not a trier of facts. It is not the function of this Court to analyze or weigh evidence all over again, unless there is a showing that the findings of the lower court are totally devoid of support or are glaringly erroneous as to constitute palpable error or grave abuse of discretion. [41] In its assailed decision, the Court of Appeals affirmed the ruling of the NLRC and adopted as its own the latter's factual findings. Long established is the doctrine that findings of fact of quasi-judicial bodies like the NLRC are accorded with respect, even finality, if supported by substantial evidence. When passed upon and upheld by the Court of Appeals, they are binding and conclusive upon the Supreme Court and will not normally be disturbed. [42] Though this doctrine is not without exceptions,[43] the Court finds that none are applicable to the present case. Thus, on the matter of Tirazona's demand letter, this Court is bound by the following findings of the Court of Appeals: Clearly, petitioner Tirazona's letter to respondent Ono dated 27 February 2002, as DIRECTOR of PET was addressed to an officer and representative of the corporation. The accusations in the aforesaid demand letter were directed against respondent Ono's official act as a representative of respondent PET. Suffice it to stress, an attack on the integrity of his (Ono) corporate act is necessarily aimed at respondent PET because a corporation can only act through its officers, agents and representatives. xxxx A thorough and judicious examination of the facts and evidence obtaining in the instant case as could be found in the records, would clearly show that petitioner Tirazona has absolutely no basis for a P2 million demand, coupled with lawsuit if the same was not paid within the five (5) days [sic] period. Her justification for the demand of money is that she was allegedly found by the respondent PET through respondent Ono guilty of the charges filed by Ms. Balonzo. As the records would indubitably show, petitioner Tirazona was never charged of any offense with respect to the Fe Balonzo's [sic] incident. She was never issued a Notice of Charge, much less a Notice of Disciplinary Action. What was issued to her by respondent Ono in his letter x x x was a gentle and sound reminder to be more circumspect in handling the incident or situation like this [sic]. As fully evidenced in the last paragraph of the said letter, it states that: xxxx Management considers this matter closed, and finds it appropriate to convey to you that it does not view with favor your notice to file legal action. Management believes that you share the idea that issues regarding employee relations are best threshed out within the Company. Resorting to legal action is unlikely to solve but on the contrary would only exacerbate such problems.

But for reasons only known to petitioner Tirazona, she treated respondent Ono's letter as an affront to her honor and dignity. This, instead of seeking a dialogue with respondent PET on her felt grievance, petitioner Tirazona through her lawyer sent the questioned demand letter to respondent Ono. Suffice it to state, this act of petitioner bared animosity in the company and was definitely not a proper response of a top level manager like her over a trivial matter. xxxx In fine, the confluence of events and circumstances surrounding the petitioner Tirazona's actions or omissions affecting her employer's rights and interest, would undoubtedly show that she is no longer worthy of being a recipient of the trust and confidence of her employer. x x x. [44] Likewise conclusive upon this Court is the Court of Appeals' pronouncement that Tirazona is in fact a managerial employee, to wit: The records would indubitably show that it is only now that petitioner Tirazona is asserting that she is not a managerial employee of respondent PET. From the very start, her dismissal was premised on the fact that she is a managerial and confidential employee, and she never denied that fact. It was never an issue at all before the Labor Arbiter and the public respondent NLRC. Therefore, she is estopped to claim now that she is [just a] rank and file employee of respondent PET, especially that she herself admitted in her pleading that she is a managerial employee: xxxx If the respondent Company has to protect Respondent Mamoru Ono, the Complainant [petitioner] has also the right to be protected from the baseless accusations of a Rank and File Employee for she [petitioner] is a part of the management like Mr. Mamoru Ono" (par. 5, Complainant's Rejoinder [to Respondent's Reply] dated 2 September 2002 (note: unattached to the petitioner [sic]) [attached as Annex "1" hereof]. (p. 263, Rollo). [45] Tirazona next argues that she was deprived of procedural due process as she was neither served with two written notices, nor was she afforded a hearing with her participation prior to her dismissal. Tirazona's arguments are baseless. Procedural due process is simply defined as giving an opportunity to be heard before judgment is rendered. The twin requirements of notice and hearing constitute the essential elements of due process, and neither of those elements can be eliminated without running afoul of the constitutional guaranty. [46] The employer must furnish the employee two written notices before termination may be effected. The first notice apprises the employee of the particular acts or omissions for which his dismissal is sought, while the second notice informs the employee of the employer's decision to dismiss him. [47] It is fairly obvious in this case that Tirazona was served with the required twin notices. The first was embodied in the Notice of Charge dated 25 March 2002 where PET informed Tirazona that it was considering her termination from employment and required her to submit a written explanation. In the said Notice, PET apprised Tirazona of the ground upon which it was considering her dismissal: (1) her letter that contained false accusations against the company, and (2) her demand for two million pesos in damages, with a threat of a lawsuit if the said amount was not paid. The Notice of Termination dated 22 April 2002 given to Tirazona constitutes the second notice whereby the company informed her that it found her guilty of breach of trust warranting her dismissal from service. Equally bereft of merit is Tirazona's allegation that she was not given the benefit of a fair hearing before she was dismissed. It needs to be pointed out that it was Tirazona herself and her counsel who declined to take part in the administrative hearing set by PET 10 April 2002. Tirazona rejected the company's appointment of its external counsel as the investigating panel's presiding officer, because her own demands on the panel's composition were denied. As correctly held by the NLRC and the Court of Appeals, Tirazona's stance is without any legal basis. On the contrary, this Court's ruling in Foster Parents Plan International/Bicol v. Demetriou[48] is controlling: The right to dismiss or otherwise impose disciplinary sanctions upon an employee for just and valid cause, pertains in the first place to the employer, as well as the authority to determine the existence of said cause in accordance with the norms of due process. In the very nature of things, any investigation by the employer of any alleged cause for disciplinary punishment of an employee will have to be conducted by the employer himself or his duly designated representative; and the investigation cannot be thwarted or nullified by arguing that it is the employer who is accuser, prosecutor and judge at the same time. x x x Of course, the decision of the employer meting out sanctions against an employee and the evidentiary and procedural bases thereof may subsequently be passed upon by the corresponding labor arbiter (and the NLRC on appeal) upon the filing by the aggrieved employee of the appropriate complaint. [Emphasis ours.]

This Court has held that there is no violation of due process even if no hearing was conducted, where the party was given a chance to explain his side of the controversy. What is frowned upon is the denial of the opportunity to be heard.[49] Tirazona in this case has been afforded a number of opportunities to defend her actions. Even when Tirazona failed to attend the scheduled hearing, PET still informed Tirazona about what happened therein and gave her the chance to submit a supplemental written explanation. Only when Tirazona again failed to comply with the same did PET terminate her employment. As a final plea for her case, Tirazona asserts that her dismissal from employment was too harsh and arbitrary a penalty to mete out for whatever violation that she has committed, if indeed there was one. Tirazona ought to bear in mind this Court's pronouncement in Metro Drug Corporation v. NLRC[50] that: When an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, she gives up some of the rigid guaranties available to ordinary workers. Infractions which if committed by others would be overlooked or condoned or penalties mitigated may be visited with more severe disciplinary action. A company's resort to acts of self-defense would be more easily justified. x x x. Tirazona, in this case, has given PET more than enough reasons to distrust her. The arrogance and hostility she has shown towards the company and her stubborn, uncompromising stance in almost all instances justify the company's termination of her employment. Moreover, Tirazona's reading of what was supposed to be a confidential letter between the counsel and directors of the PET, even if it concerns her, only further supports her employer's view that she cannot be trusted. In fine, the Court cannot fault the actions of PET in dismissing petitioner. WHEREFORE, premises considered, the instant petition is hereby DENIED for lack of merit and the Decision of the Court of Appeals dated 24 May 2005 is hereby AFFIRMED. Costs against the petitioner. SO ORDERED.

[G.R. No. 100388. December 14, 2000] SOCIAL SECURITY SYSTEM, petitioner, vs. THE COURT OF APPEALS and CONCHITA AYALDE, respondents. DECISION YNARES-SANTIAGO, J.: In a petition before the Social Security Commission, Margarita Tana, widow of the late Ignacio Tana, Sr., alleged that her husband was, before his demise, an employee of Conchita Ayalde as a farmhand in the two (2) sugarcane plantations she owned (known as Hda. No. Audit B-70 located in Pontevedra, La Carlota City) and leased from the University of the Philippines (known as Hda. Audit B-15-M situated in La Granja, La Carlota City). She further alleged that Tana worked continuously six (6) days a week, four (4) weeks a month, and for twelve (12) months every year between January 1961 to April 1979. For his labor, Tana allegedly received a regular salary according to the minimum wage prevailing at the time. She further alleged that throughout the given period, social security contributions, as well as medicare and employees compensation premiums were deducted from Tanas wages. It was only after his death that Margarita discovered that Tana was never reported for coverage, nor were his contributions/premiums remitted to the Social Security System (SSS). Consequently, she was deprived of the burial grant and pension benefits accruing to the heirs of Tana had he been reported for coverage. Hence, she prayed that the Commission issue an order directing: 1. respondents Conchita Ayalde and Antero Maghari as her administrator to pay the premium contributions of the deceased Ignacio Tana, Sr. and report his name for SSS coverage; and 2. the SSS to grant petitioner Margarita Tana the funeral and pension benefits due her.[1]

The SSS, in a petition-in-intervention, revealed that neither Hda. B-70 nor respondents Ayalde and Maghari were registered members-employers of the SSS, and consequently, Ignacio Tana, Sr. was never registered as a member-employee. Likewise, SSS records reflected that there was no way of verifying whether the alleged premium contributions were remitted since the respondents were not registered members-employers. Being the agency charged with the implementation and enforcement of the provisions of the Social Security Law, as amended, the SSS asked the Commissions leave to intervene in the case.[2] In his answer, respondent Antero Maghari raised the defense that he was a mere employee who was hired as an overseer of Hda. B-70 sometime during crop years 1964-65 to 1971-72, and as such, his job was limited to those defined for him by the employer which never involved matters relating to the SSS. Hence, he prayed that the case against him be dismissed for lack of cause of action.[3] For her part, respondent Ayalde belied the allegation that Ignacio Tana, Sr. was her employee, admitting only that he was hired intermittently as an independent contractor to plow, harrow, or burrow Hda. No. Audit B-15M. Tana used his own carabao and other implements, and he followed his own schedule of work hours. Ayalde further alleged that she never exercised control over the manner by which Tana performed his work as an independent contractor. Moreover, Ayalde averred that way back in 1971, the University of the Philippines had already terminated the lease over Hda. B-15-M and she had since surrendered possession thereof to the University of the Philippines. Consequently, Ignacio Tana, Sr. was no longer hired to work thereon starting in

crop year 1971-72, while he was never contracted to work in Hda. No. Audit B-70. She also prayed for the dismissal of the case considering that Ignacio Tana, Sr. was never her employee.[4] After hearing both parties, the Social Security Commission issued a Resolution on January 28, 1988, the dispositive portion of which reads: After a careful evaluation of the testimonies of the petitioner and her witnesses, as well as the testimony of the respondent together with her documentary evidences, this Commission finds that the late Ignacio Tana was employed by respondent Conchita Ayalde from January 1961 to March 1979. The testimony of the petitioner which was corroborated by Agaton Libawas and Aurelio Tana, co-workers of the deceased Ignacio Tana, sufficienty established the latters employment with the respondent. As regards respondent Antero Maghari, he is absolved from liability because he is a mere employee of Conchita Ayalde. PREMISES CONSIDERED, this Commission finds and so holds that the late Ignacio Tana had been employed continuously from January 1961 to March 1979 in Hda. B-70 and Hda. B-15-M which are owned and leased, respectively, by respondent Conchita (Concepcion) Ayalde with a salary based on the Minimum Wage prevailing during his employment. Not having reported the petitioners husband for coverage with the SSS, respondent Conchita (Concepcion) Ayalde is, therefore, liable for the payment of damages equivalent to the death benefits in the amount of P7,067.40 plus the amount of P750.00 representing funeral benefit or a total of P7,817.40. Further, the SSS is ordered to pay to the petitioner her accrued pension covering the period after the 5-year guaranteed period corresponding to the employers liability. SO ORDERED.[5] Respondent Ayalde filed a motion for reconsideration[6]which the Commission denied for lack of merit in an Order dated November 3, 1988.[7] Not satisfied with the Commissions ruling, Ayalde appealed to the Court of Appeals, docketed as CA-G.R. SP No. 16427, raising the following assignment of errors:
I

The Social Security Commission erred in not finding that there is sufficient evidence to show that:

(a) The deceased Ignacio Tana, Sr. never worked in the farmland of respondent-appellant situated in Pontevedra, La Carlota City, otherwise known as Hacienda No. Audit B-70, (Pontevedra B-70 Farm for short), in any capacity, whether as a daily or monthly laborer or as independent contractor; (b) During the time that respondent-appellant was leasing a portion of the land of the University of the Philippines, otherwise known as Hacienda Audit No. B-15-M, (La Granja B-15 Farm for short), the deceased Ignacio Tana, Sr. was hired thereat on a pakyaw basis, or as an independent contractor, performing the services of an arador (Plower), for which he was proficient, using his own carabao and farming implements on his own time and discretion within the period demanded by the nature of the job contracted.
II

The Social Security Commission erred in holding that there is no evidence whatsoever to show that respondentappellant was no longer leasing La Granja B-15 Farm.
III

The Social Security Commission erred in not holding that the deceased Ignacio Tana, having been hired as an independent contractor on pakyaw basis, did not fall within the coverage of the Social Security Law.[8] The Court of Appeals rendered judgment in favor of respondent-appellant Conchita Ayalde and dismissed the claim of petitioner Margarita Tan. The SSS, as intervenor-appellee, filed a Motion for Reconsideration, which was denied on the ground that the arguments advanced are mere reiterations of issues and arguments already considered and passed upon in the decision in question which are utterly insufficient to justify a modification or reversal of said decision.[9] Hence, this petition for review on certiorari on the following assigned errors:

1) The Court of Appeals was in error in ruling that an employee working under the pakyaw system is considered under the law to be an independent contractor. 2) The Court of Appeals was in error in not giving due consideration to the fundamental tenet that doubts in the interpretation and implementation of labor and social welfare laws should be resolved in favor of labor. 3) The Court of Appeals was in error in disregarding the settled rule that the factual findings of administrative bodies on matters within their competence shall not be disturbed by the courts. 4) The Court of Appeals was in error in ruling that even granting arguendo that Ignacio Tana was employed by Conchita Ayalde, such employment did not entitle him to compulsory coverage since he was not paid any regular daily wage or basic pay and he did not work for an uninterrupted period of at least six months in a year in accordance with Section 8(j) (1) of the SS Law. The pivotal issue to be resolved in this petition is whether or not an agricultural laborer who was hired on pakyaw basis can be considered an employee entitled to compulsory coverage and corresponding benefits under the Social Security Law. Petitioner, Social Security System (or SSS), argues that the deceased Ignacio Tana, Sr., who was hired by Conchita Ayalde on pakyaw basis to perform specific tasks in her sugarcane plantations, should be considered an employee; and as such, his heirs are entitled to pension and burial benefits. The Court of Appeals, however, ruled otherwise, reversing the ruling of the Social Security Commission and declaring that the late Ignacio Tana, Sr. was an independent contractor, and in the absence of an employeremployee relationship between Tana and Ayalde, the latter cannot be compelled to pay to his heirs the burial and pension benefits under the SS Law. At the outset, we reiterate the well-settled doctrine that the existence of an employer-employee relationship is ultimately a question of fact.[10] And while it is the general rule that factual issues are not within the province of the Supreme Court, said rule is not without exception. In cases, such as this one, where there are conflicting and contradictory findings of fact, this Court has not hesitated to scrutinize the records to determine the facts for itself.[11] Our disquisition of the facts shall be our guide as to whose findings are supported by substantial evidence. The mandatory coverage under the SSS Law (Republic Act No. 1161, as amended by PD 1202 and PD 1636) is premised on the existence of an employer-employee relationship, and Section 8(d) defines an employee as any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services where there is an employer-employee relationship. The essential elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the power of control with regard to the means and methods by which the work is to be accomplished, with the power of control being the most determinative factor.[12] There is no question that Tana was selected and his services engaged by either Ayalde herself, or by Antero Maghari, her overseer. Corollarily, they also held the prerogative of dismissing or terminating Tanas employment. The dispute is in the question of payment of wages. Claimant Margarita Tana and her corroborating witnesses testified that her husband was paid daily wages per quincena as well as on pakyaw basis. Ayalde, on the other hand, insists that Tana was paid solely on pakyaw basis. To support her claim, she presented payrolls covering the period January of 1974 to January of 1976;[13] and November of 1978 to May of 1979.[14] A careful perusal of the records readily show that the exhibits offered are not complete, and are but a mere sampling of payrolls. While the names of the supposed laborers appear therein, their signatures are nowhere to be found. And while they cover the years 1975, 1976 and portions of 1978 and 1979, they do not cover the 18year period during which Tana was supposed to have worked in Ayaldes plantations. Also an admitted fact is that these exhibits only cover Hda. B70, Ayalde having averred that all her records and payrolls for the other plantation (Hda. B-15-M) were either destroyed or lost.[15] To our mind, these documents are not only sadly lacking, they are also unworthy of credence. The fact that Tanas name does not appear in the payrolls for the years 1975, 1976 and part of 1978 and 1979, is no proof that he did not work in Hda. B70 in the years 1961 to 1974, and the rest of 1978 and 1979. The veracity of the alleged documents as payrolls are doubtful considering that the laborers named therein never affixed their

signatures to show that they actually received the amounts indicated corresponding to their names. Moreover, no record was shown pertaining to Hda. B-15-M, where Tana was supposed to have worked. Even Ayalde admitted that she hired Tana as arador and sometimes as laborer during milling in Hda. B-15-M.[16] In light of her incomplete documentary evidence, Ayaldes denial that Tana was her employee in Hda. B-70 or Hda. B15-M must fail. In contrast to Ayaldes evidence, or lack thereof, is Margarita Tanas positive testimony, corroborated by two (2) other witnesses. On the matter of wages, they testified as follows: To prove that it is material to the main question because if ever the hacienda maintains complete payrolls of their These witnesses did not waver in their assertion that while Tana was hired by Ayalde as an arador on pakyaw basis, he was also paid a daily wage which Ayaldes overseer disbursed every fifteen (15) days. It is also undisputed that they were made to acknowledge receipt of their wages by signing on sheets of ruled paper, which are different from those presented by Ayalde as documentary evidence. In fine, we find that the testimonies of Margarita Tana, Agaton Libawas and Aurelio Tana prevail over the incomplete and inconsistent documentary evidence of Ayalde. In the parallel case of Opulencia Ice Plant and Storage v. NLRC, the petitioners argued that since Manuel P. Esitas name does not appear in the payrolls of the company it necessarily means that he was not an employee. This Court held: Petitioners further argue that complainant miserably failed to present any documentary evidence to prove his employment. There was no timesheet, pay slip and/or payroll/cash voucher to speak of. Absence of these material documents are necessarily fatal to complainants cause. We do not agree. No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a written instrument. Thus, as in this case where the employer-employee relationship between petitioners and Esita was sufficiently proved by testimonial evidence, the absence of time sheet, time record or payroll has become inconsequential.[20] (Underscoring ours) Clearly, then, the testimonial evidence of the claimant and her witnesses constitute positive and credible evidence of the existence of an employer-employee relationship between Tana and Ayalde. As the employer, the latter is duty-bound to keep faithful and complete records of her business affairs, not the least of which would be the salaries of the workers. And yet, the documents presented have been selective, few and incomplete in substance and content. Consequently, Ayalde has failed to convince us that, indeed, Tana was not her employee. The argument is raised that Tana is an independenent contractor because he was hired and paid wages on pakyaw basis. We find this assertion to be specious for several reasons. First, while Tana was sometimes hired as an arador or plower for intermittent periods, he was hired to do other tasks in Ayaldes plantations. Ayalde herself admitted as much, although she minimized the extent of Tanas labors. On the other hand, the claimant and her witnesses were direct and firm in their testimonies, to wit: It is indubitable, therefore, that Tana worked continuously for Ayalde, not only as arador on pakyaw basis, but as a regular farmhand, doing backbreaking jobs for Ayaldes business. There is no shred of evidence to show that Tana was only a seasonal worker, much less a migrant worker. All witnesses, including Ayalde herself, testified that Tana and his family resided in the plantation. If he was a mere pakyaw worker or independent contractor, then there would be no reason for Ayalde to allow them to live inside her property for free. The only logical explanation is that he was working for most part of the year exclusively for Ayalde, in return for which the latter gratuitously allowed Tana and his family to reside in her property. The Court of Appeals, in finding for Ayalde, relied on the claimants and her witnesses admission that her husband was hired as an arador on pakyaw basis, but it failed to appreciate the rest of their testimonies. Just because he was, for short periods of time, hired on pakyaw basis does not necessarily mean that he was not employed to do other tasks for the remainder of the year. Even Ayalde admitted that Tana did other jobs when he was not hired to plow. Consequently, the conclusion culled from their testimonies to the effect that Tana was

mainly and solely an arador was at best a selective appreciation of portions of the entire evidence. It was the Social Security Commission that took into consideration all the documentary and testimonial evidence on record. Secondly, Ayalde made much ado of her claim that Tana could not be her employee because she exercised no control over his work hours and method of performing his task as arador. It is also an admitted fact that Tana, Jr. used his own carabao and tools. Thus, she contends that, applying the control test, Tana was not an employee but an independent contractor. A closer scrutiny of the records, however, reveals that while Ayalde herself may not have directly imposed on Tana the manner and methods to follow in performing his tasks, she did exercise control through her overseer. Be that as it may, 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; it is sufficient that the former has a right to wield the power.[24] Certainly, Ayalde, on her own or through her overseer, wielded the power to hire or dismiss, to check on the work, be it in progress or quality, of the laborers. As the owner/lessee of the plantations, she possessed the power to control everyone working therein and everything taking place therein. Jurisprudence provides other equally important considerations which support the conclusion that Tana was not an independent contractor. First, Tana cannot be said to be engaged in a distinct occupation or business. His carabao and plow may be useful in his livelihood, but he is not independently engaged in the business of farming or plowing. Second, he had been working exclusively for Ayalde for eighteen (18) years prior to his demise. Third, there is no dispute that Ayalde was in the business of growing sugarcane in the two plantations for commercial purposes. There is also no question that plowing or preparing the soil for planting is a major part of the regular business of Ayalde. Under the circumstances, the relationship between Ayalde and Tana has more of the attributes of employeremployee than that of an independent contractor hired to perform a specific project. In the case of Dy Keh Beng v. International Labor,[25] we cited our long-standing ruling in Sunripe Coconut Products Co. v. Court of Industrial Relations, to wit: When a worker possesses some attributes of an employee and others of an independent contractor, which make him fall within an intermediate area, he may be classified under the category of an employee when the economic facts of the relations make it more nearly one of employment than one of independent business enterprise with respect to the ends sought to be accomplished. (Underscoring Ours)[26] We find the above-quoted ruling to be applicable in the case of Tana. There is preponderance of evidence to support the conclusion that he was an employee rather than an independent contractor. The Court of Appeals also erred when it ruled, on the alternative, that if ever Tana was an employee, he was still ineligible for compulsory coverage because he was not paid any regular daily wage and he did not work for an uninterrupted period of at least six months in a year in accordance with Section 8(j) (I) of the Social Security Law. There is substantial testimonial evidence to prove that Tana was paid a daily wage, and he worked continuously for most part of the year, even while he was also occasionally called on to plow the soil on a pakyaw basis. As a farm laborer who has worked exclusively for Ayalde for eighteen (18) years, Tana should be entitled to compulsory coverage under the Social Security Law, whether his service was continuous or broken. Margarita Tana alleged that SSS premiums were deducted from Tanas salary, testifying, thus: Ayalde failed to counter these positive assertions. Even on the assumption that there were no deductions, the fact remains that Tana was and should have been covered under the Social Security Law. The circumstances of his employment place him outside the ambit of the exception provided in Section 8(j) of Republic Act No. 1611, as amended by Section 4 of R.A. 2658. WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in C.A.-G.R. SP No. 16427 and the Resolution dated June 14, 1991 are hereby REVERSED and SET ASIDE. The Resolution of the Social Security Commission in SSC Case No. 8851 is REINSTATED. No costs. SO ORDERED.

[G.R. No. 111501. March 5, 1996] PHILIPPINE FUJI XEROX CORPORATION, JENNIFER A. BERNARDO, and ATTY. VICTORINO LUIS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (First Division), PAMBANSANG KILUSAN NG PAGGAWA, (KILUSAN)-TUCP, PHILIPPINE XEROX EMPLOYEES UNION-KILUSAN and PEDRO GARADO, respondents. DECISION MENDOZA, J: This is a petition for certiorari to set aside the decision of the NLRC, finding petitioner Philippine Fuji Xerox Corporation (Fuji Xerox) guilty of illegally dismissing private respondent Pedro Garado and ordering him reinstated. The NLRC decision reverses on appeal a decision of the Labor Arbiter finding private respondent to be an employee of another firm, the Skillpower, Inc., and not of petitioner Fuji Xerox. The question raised in this case is whether private respondent is an employee of ,Fuji Xerox (as the NLRC found) or of Skillpower, Inc. (as the Labor Arbiter found). For reasons to be hereafter explained, we hold that private respondent is an employee of Fuji Xerox and accordingly dismiss the petition for certiorari of Fuji Xerox. The following are the facts. On May 6, 1977, petitioner Fuji Xerox entered into an agreement under which Skillpower, Inc. supplied workers to operate copier machines of Fuji Xerox as part of the latters Xerox Copier Project in its sales offices. Private respondent Pedro Garado was assigned as key operator at Fuji Xeroxs branch at Buendia, Makati, Metro Manila, in February of 1980. In February of 1983, Garado went on leave and his place was taken over by a substitute. Upon his return in March, he discovered that there was a spoilage of over 600 copies. Afraid that he might be blamed for the spoilage, he tried to talk to a service technician of Fuji Xerox into stopping the meter of the machine. The technician refused Garados request, but this incident came to the knowledge of Fuji Xerox which, on May 31, 1983, reported the matter to Skillpower, Inc. The next day, Skillpower, Inc. wrote Garado,

ordering him to explain. In the meantime, it suspended him from work. Garado filed a complaint for illegal dismissal. The Labor Arbiter found that Garado applied for work to Skillpower, Inc.; that in 1980 he was employed and made to sign a contract; that although he received his salaries regularly from Fuji Xerox, it was Skillpower, Inc. which exercised control and supervision over his work; that Skillpower, Inc. had substantial capital and investments in machinery, equipment, and service vehicles, and assets totalling P5,008,812.43. On the basis of these findings the Labor Arbiter held in a decision rendered on October 30, 1986 that Garado was an employee of Skillpower, Inc., and that he had merely been assigned by Skillpower, Inc. to Fuji Xerox. Hence, the Labor Arbiter dismissed Garados complaint. On the other hand, the NLRC found Garado to be in fact an employee of petitioner Fuji Xerox and by it to have been illegally dismissed. The NLRC found that although Garados request was wrongful, dismissal would be a disproportionate penalty. The NLRC held that although Skillpower, Inc. had substantial capital assets, the fact was that the copier machines, which Garado operated, belonged to petitioner Fuji Xerox, and that although it was Skillpower, Inc. which had suspended Garado, the latter merely acted at the behest of Fuji Xerox. The NLRC found that Garado worked under the control and supervision of Fuji Xerox, which paid his salaries, and that Skilipower, Inc. merely acted as paymasteragent of Fuji Xerox. The NLRC held that Skilipower, Inc. was a labor-only contractor and Garado should be deemed to have been directly employed by Fuji Xerox, regardless of the agreement between it and Skillpower, Inc. Accordingly, the NLRC ordered: WHEREFORE, premises considered, the respondents are hereby ordered to immediately reinstate complainant Pedro Garado to his former position as key operator with three (3) years backwages, without qualification or reduction whatsoever x x x. Except as herein above MODIFIED, the appealed decision is hereby Affirmed. Hence the present petition. Fuji Xerox argues that Skillpower, Inc. is an independent contractor and that Garado is its employee for the following reasons: (1) Garado was recruited by Skillpower, Inc.; (2) The work done by Garado was not necessary to the conduct of the business of Fuji Xerox; (3) Garados salaries and benefits were paid directly by Skillpower, Inc.; (4) Garado worked under the control of Skillpower, Inc.; and (5) Skillpower, Inc. is a highly-capitalized business venture. The contentions are without merit. Fuji Xerox contends that Garado was actually recruited by Skillpower, Inc. as part of its personnel pool and later merely assigned to it (petitioner). It is undisputed, however, that since 1980,[1] when Garado was first assigned to work at Fuji Xerox, he had never been assigned to any other company so much so that by 1984, he was already a member of the union which petitioned the company for his regularization.[2] From 1980 to 1984 he worked exclusively for petitioner. Indeed, he was recruited by Skillpower, Inc. solely for assignment to Fuji Xerox to work in the latters Xerox Copier Project.[3] Petitioners claim that Skillpower, Inc. has other clients to whom it provided temporary services. That, however, is irrelevant. What is important is that once employed, Garado was never assigned to any other client of Skillpower, Inc. In fact, although under the agreement Skillpower, Inc. was supposed to provide only temporary services, Skilipower, Inc. actually supplied Fuji Xerox the labor which the latter needed for its Xerox Copier Project for seven (7) years, from 1977 to 1984. On January 1, 1983, private respondent signed a contract entitled Appointment as Contract Worker, in which it was stated that private respondents status was that of a contract worker for a definite period from January 1, 1983 to June 30, 1983. As such, private respondents employment was considered

temporary, to terminate automatically six (6) months afterwards, without necessity of any notice and without entitling private respondent to separation or termination pay. Private respondent was made to understand that he was an employee of Skillpower, Inc., and not of the client to which he was assigned. Therefore, the termination of the contract or any renewal or extension thereof did not entitle him to become an employee of the client and the latter was not under any obligation to appoint him as such, notwithstanding the total duration of the contract or any extension or renewal thereof. This is nothing but a crude attempt to circumvent the law and undermine the security of tenure of private respondent by employing workers under six-month contracts which are later extended indefinitely through renewals. As this Court held in the Philippine Bank of Communications v. NLRC:
[4]

It is not difficult to see that to uphold the contractual arrangement between the bank and CESI would in effect be to permit employers to avoid the necessity of hiring regular or permanent employees and to enable them to keep their employees indefinitely on a temporary or casual status, thus to deny them security of tenure in their jobs. Article 106 of the Labor Code is precisely designed to prevent such a result. Second. Petitioner contends that the service provided by Skillpower, Inc., namely, operating petitioners xerox machine, is not directly related nor necessary to the business of selling and leasing copier machines of petitioner. Petitioners claim that their Xerox Copier Project is just for public service and is purely incidental to its business. What petitioners earn from the project is not even sufficient to defray their expenses, let alone bring profits to them. As such, the project is no different from other services which can legally be contracted out, such as security and janitorial services. Petitioners contend that the copier service can be considered as part of their housekeeping tasks which can be let to independent contractors.[5] We disagree. As correctly held by the NLRC, at the very least, the Xerox Copier Project of petitioners promotes goodwill for the company. It may not generate income for the company but there are activities which a company may find necessary to engage in because they ultimately redound to its benefit. Operating the companys copiers at its branches advertises the quality of their products and promotes the companys reputation and public image. It also advertises the utility and convenience of having a copier machine. It is noteworthy that while not operated for profit the copying service is not intended either to be promotional, as, indeed, petitioner charged a fee for the copies made. It is wrong to say that if a task is not directly related to the employers business, or it falls under what may be considered housekeeping activities, the one performing the task is a job contractor. The determination of the existence of an employer-employee relationship is defined by law according to the facts of each case, regardless of the nature of the activities involved. Third. Petitioners contend that it never exercised control over the conduct of private respondent. Petitioners allege that the salaries paid to Garado, as well as his employment records, vouchers and loan checks from the SSS were coursed through Skillpower, Inc. In addition private respondent applied for vacation leaves to Skilipower, Inc. It is also contended that it was Skillpower, Inc. which twice required private respondent to explain why he should not be dismissed for the spoilage in Fuji Xeroxs Buendia branch and suspended him pending the result of the investigation. According to petitioners, although they conducted an administrative investigation, the purpose was only to determine the complicity of their own employees in the incident, if any, and any criminal liability of private respondent. This claim is belied by two letters written by Atty. Victorino H. Luis, Legal and Industrial Relations Officer of the company, to the union president, Nick Macaraig. The first letter, dated July 6, 1983, stated: This has reference to your various letters dated today on administrative case concerning Messrs. Crisostomo Cruz, Pedro Garado and Ms. Evelyn Abenes. In connection with the above and in the case likewise of Mr. Dionisio Guyala, please be advised that the proceedings against them are being

carried out under the terms, and in accordance with the provisions of our Policy and Procedure on Employment Termination as well as Policy on Disciplinary Actions dated October 1, 1982, and not under the Grievance Machinery under our CBA. Your action apparently is premised on the assumption that we are now in the Grievance Stage, which is premature. If we have allowed the Union to participate in our Investigation and Administrative panels, it is only a concession on managements part in accordance with No. IV, Section B, Paragraph 3 of the abovecited policy on the investigation, the Personnel/Administrative Department may consult the Union whenever necessary. We shall entertain grievances under our CBA Machinery only after decisions have been made on the foregoing cases and should you find the penalties imposed, if any, as unjust, unduly harsh, discriminating otherwise fit subject for grievance by the Union itself under the terms of our CBA. Accordingly, we are proceeding with our investigations on the administrative charges with or without your presence or that of the respondents if it is the latters preference, as in the case of Crisostomo Cruz, to ignore the same. (Italics ours) The second letter, dated July 13, 1983,[6] read: You obviously persist in pursuing the misconception that our allowing your presence in the administrative proceedings against Messrs. Guyala, Cruz, et al. has set the Grievance Machinery under our CBA into play. We can only reiterate our statement in our letter of July 6 that we were implementing Policy and Procedures on Termination dated October 1, 1982 and that your presence in helping bolster the defense for the respondents was only with our forbearance in the spirit of cooperation in order to better ferret out the truth. The power or authority to impose discipline and disciplinary measures upon employees is a basic prerogative of Management, something that cannot be abdicated, much less ceded to a CBA Grievance Committee which is limited to settling disputes and misunderstanding as to interpretation, application, or violation of any provisions of the CBA agreement x x x. As likewise pointed out in our letter of July 6 recourse to Grievance may possibly be resorted to if in the Unions opinion a penalty imposed upon a respondent Union member is discriminating to the member or otherwise illegal, unduly harsh, and the like. Ultimately, the remedy lies in appeal to the NLRC, as in similar cases in the past. (Italics ours) These letters reveal the role which Fuji Xerox played in the dismissal of the private respondent. They dispel any doubt that Fuji Xerox exercised disciplinary authority over Garado and that Skillpower, Inc. issued the order of dismissal merely in obedience to the decision of petitioner. Fourth. Petitioner avers that Skillpower, Inc. is a highly-capitalized business venture, registered as an independent employer with the Securities and Exchange Commission as well as the Department of Labor and Employment. Skillpower, Inc. is a member of the Social Security System. In 1984 it had assets exceeding P5 million pesos and at least 20 typewriters, office equipment and service vehicles. It had employees of its own and a pool of 25 clerks assigned to clients on a temporary basis. Petitioners cite the case of Neri v. NLRC,[7] in which it was held that the Building Care Corporation (BCC) was an independent contractor on the basis of finding that it had substantial capital, although there was no evidence that it had investments in the form of tools, equipment, machineries and work premises. But the Court in that case considered not only the capitalization of the BCC but also the fact that BCC was providing specific special services (radio/telex operator and janitor) to the employer; that in another case[8] the Court had already found that the BCC was an independent contractor; that BCC retained control over the employees and the employer was actually just concerned with the end-result; that BCC had the power to reassign the employees and their deployment was not subject to the approval of the employer; and that BCC was paid in lump sum for the services it rendered. These features of that case make it distinguishable from the present one. Here, the service being rendered by private respondent was not a specific or special skill that Skillpower, Inc. was in the business of providing. Although in the Neri case the telex machine operated

by the employee belonged to the employer, the service was deemed permissible because it was specific and technical. This cannot be said of the service rendered by private respondent Garado. The Rules to Implement of the Labor Code, Book III, Rule VIII, 8, provide that there is job contracting when the following conditions are fulfilled: (1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business. Otherwise, according to Art. 106 of the Labor Code, There is labor-only contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. Petitioner Fuji Xerox argues that Skillpower, Inc. had typewriters and service vehicles for the conduct of its business independently of the petitioner. But typewriters and vehicles bear no direct relationship to the job for which Skillpower, Inc. contracted its service of operating copier machines and offering copying services to the public. The fact is that Skillpower, Inc. did not have copying machines of its own. What it did was simply to supply manpower to Fuji Xerox. The phrase substantial capital and investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business, in the Implementing Rules clearly contemplates tools, equipment, etc., which are directly related to the service it is being contracted to render. One who does not have an independent business for undertaking the job contracted for is just an agent of the employer. Fifth. The Agreement between petitioner Fuji Xerox and Skillpower, Inc. provides that Skillpower, Inc. is an independent contractor and that the workers hired by it shall not, in any manner and under any circumstances, be considered employees of [the] Company, and that the Company has no control or supervision whatsoever over the conduct of the Contractor or any of its workers in respect to how they accomplish their work or perform the Contractors obligations under this AGREEMENT. In Tabas v. California Manufacturing Company, Inc.,[9] this Court held on facts similar to those in the case at bar: There is no doubt that in the case at bar, Livi performs manpower services, meaning to say, it contracts out labor in favor of clients. We hold that it is one notwithstanding its vehement claims to the contrary, and notwithstanding the provision of the contract that it is an independent contractor. The nature of ones business is not determined by self-serving appellations one attaches thereto but by the tests provided by statute and prevailing case law. The bare fact that Livi maintains a separate line of business does not extinguish the equal fact that it has provided California with workers to pursue the latters own business. In this connection, we do not agree that the petitioners had been made to perform activities which are not directly related to the general business of manufacturing, Californias purported principal operation activity. The petitioners had been charged with merchandising [sic] promotion or sale of the products of [California] in the different sales outlets in Metro Manila including task and occasional [sic] price tagging, an activity that is doubtless, an integral part of the manufacturing business. It is not, then, as if Livi had served as its (Californias) promotions or sales arm or agents, or otherwise, rendered a piece of work it (California) could not have itself done; Livi as a placement agency, had simply supplied it with the manpower necessary to carry out its (Californias) merchandising activities, using its (Californias) premises and equipment.

xxx

xxx

xxx

The fact that the petitioners have allegedly admitted being Livis direct employees in their complaints is nothing conclusive. For one thing, the fact that the petitioners were (are), will not absolve California since liability has been imposed by legal operation. For another, and as we indicated, the relations of parties must be judged from case to case and the decree of law, and not by declaration of parties. Skilipower, Inc. is, therefore, a labor-only contractor and Garado is not its employee. No grave abuse of discretion can thus be imputed to the NLRC for declaring petitioner Fuji Xerox guilty of illegal dismissal of private respondent. ACCORDINGLY, the petition for certiorari is DISMISSED for lack of merit. SO ORDERED.

[G.R. No. 157214. June 7, 2005] PHILIPPINE GLOBAL COMMUNICATIONS, INC., petitioner, vs. RICARDO DE VERA, respondent. DECISION GARCIA, J.: Before us is this appeal by way of a petition for review on certiorari from the 12 September 2002 Decision[1] and the 13 February 2003 Resolution[2] of the Court of Appeals in CA-G.R. SP No. 65178, upholding the finding of illegal dismissal by the National Labor Relations Commission against petitioner. As culled from the records, the pertinent facts are: Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in the business of communication services and allied activities, while respondent Ricardo De Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. At the crux of the controversy is Dr. De Veras status vis a vis petitioner when the latter terminated his engagement.

It appears that on 15 May 1981, De Vera, via a letter dated 15 May 1981,[3] offered his services to the petitioner, therein proposing his plan of works required of a practitioner in industrial medicine, to include the following: 1. 2. 3. 4. 5. 6. Application of preventive medicine including periodic check-up of employees; Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for consultation services to employees; Management and treatment of employees that may necessitate hospitalization including emergency cases and accidents; Conduct pre-employment physical check-up of prospective employees with no additional medical fee; Conduct home visits whenever necessary; Attend to certain medical administrative function such as accomplishing medical forms, evaluating conditions of employees applying for sick leave of absence and subsequently issuing proper certification, and all matters referred which are medical in nature.

The parties agreed and formalized respondents proposal in a document denominated as RETAINERSHIP CONTRACT[4] which will be for a period of one year subject to renewal, it being made clear therein that respondent will cover the retainership the Company previously had with Dr. K. Eulau and that respondents retainer fee will be at P4,000.00 a month. Said contract was renewed yearly.[5] The retainership arrangement went on from 1981 to 1994 with changes in the retainers fee. However, for the years 1995 and 1996, renewal of the contract was only made verbally. The turning point in the parties relationship surfaced in December 1996 when Philcom, thru a letter[6] bearing on the subject boldly written as TERMINATION RETAINERSHIP CONTRACT, informed De Vera of its decision to discontinue the latters retainers contract with the Company effective at the close of business hours of December 31, 1996 because management has decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises. On 22 January 1997, De Vera filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC), alleging that that he had been actually employed by Philcom as its company physician since 1981 and was dismissed without due process. He averred that he was designated as a company physician on retainer basis for reasons allegedly known only to Philcom. He likewise professed that since he was not conversant with labor laws, he did not give much attention to the designation as anyway he worked on a full-time basis and was paid a basic monthly salary plus fringe benefits, like any other regular employees of Philcom. On 21 December 1998, Labor Arbiter Ramon Valentin C. Reyes came out with a decision[7] dismissing De Veras complaint for lack of merit, on the rationale that as a retained physician under a valid contract mutually agreed upon by the parties, De Vera was an independent contractor and that he was not dismissed but rather his contract with [PHILCOM] ended when said contract was not renewed after December 31, 1996. On De Veras appeal to the NLRC, the latter, in a decision[8] dated 23 October 2000, reversed (the word used is modified) that of the Labor Arbiter, on a finding that De Vera is Philcoms regular employee and accordingly directed the company to reinstate him to his former position without loss of seniority rights and privileges and with full backwages from the date of his dismissal until actual reinstatement. We quote the dispositive portion of the decision: WHEREFORE, the assailed decision is modified in that respondent is ordered to reinstate complainant to his former position without loss of seniority rights and privileges with full backwages from the date of his dismissal until his actual reinstatement computed as follows:

Backwages: a) b) c) Basic Salary From Dec. 31, 1996 to Apr. 10, 2000 = 39.33 mos. P44,400.00 x 39.33 mos. P1,750,185.00 13th Month Pay: 1/12 of P1,750,185.00 145,848.75 Travelling allowance: P1,000.00 x 39.33 mos. 39,330.00 GRAND TOTAL The decision stands in other aspects. SO ORDERED. With its motion for reconsideration having been denied by the NLRC in its order of 27 February 2001, [9] Philcom then went to the Court of Appeals on a petition for certiorari, thereat docketed as CA-G.R. SP No. 65178, imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC when it reversed the findings of the labor arbiter and awarded thirteenth month pay and traveling allowance to De Vera even as such award had no basis in fact and in law. On 12 September 2002, the Court of Appeals rendered a decision,[10] modifying that of the NLRC by deleting the award of traveling allowance, and ordering payment of separation pay to De Vera in lieu of reinstatement, thus: WHEREFORE, premises considered, the assailed judgment of public respondent, dated 23 October 2000, is MODIFIED. The award of traveling allowance is deleted as the same is hereby DELETED. Instead of reinstatement, private respondent shall be paid separation pay computed at one (1) month salary for every year of service computed from the time private respondent commenced his employment in 1981 up to the actual payment of the backwages and separation pay. The awards of backwages and 13th month pay STAND. SO ORDERED. In time, Philcom filed a motion for reconsideration but was denied by the appellate court in its resolution of 13 February 2003.[11] Hence, Philcoms present recourse on its main submission that THE COURT OF APPEALS ERRED IN SUSTAINING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION AND RENDERING THE QUESTIONED DECISION AND RESOLUTION IN A WAY THAT IS NOT IN ACCORD WITH THE FACTS AND APPLICABLE LAWS AND JURISPRUDENCE WHICH DISTINGUISH LEGITIMATE JOB CONTRACTING AGREEMENTS FROM THE EMPLOYER-EMPLOYEE RELATIONSHIP. We GRANT. Under Rule 45 of the Rules of Court, only questions of law may be reviewed by this Court in decisions rendered by the Court of Appeals. There are instances, however, where the Court departs from this rule and reviews findings of fact so that substantial justice may be served. The exceptional instances are where: xxx xxx xxx (1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals went beyond the issues of the case and its findings are contrary to the admissions of both appellant and appellees; (7) the findings of fact of the Court of Appeals are contrary to those of the trial court; (8) P1,935,363.75

said findings of facts are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.[12] As we see it, the parties respective submissions revolve on the primordial issue of whether an employer-employee relationship exists between petitioner and respondent, the existence of which is, in itself, a question of fact[13] well within the province of the NLRC. Nonetheless, given the reality that the NLRCs findings are at odds with those of the labor arbiter, the Court, consistent with its ruling in Jimenez vs. National Labor Relations Commission,[14] is constrained to look deeper into the attendant circumstances obtaining in this case, as appearing on record. In a long line of decisions,[15] the Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test, to wit: [1] the selection and engagement of the employee; [2] the payment of wages; [3] the power of dismissal; and [4] the power to control the employees conduct, or the so-called control test, considered to be the most important element. Applying the four-fold test to this case, we initially find that it was respondent himself who sets the parameters of what his duties would be in offering his services to petitioner. This is borne by no less than his 15 May 1981 letter[16] which, in full, reads: May 15, 1981 Mrs. Adela L. Vicente Vice President, Industrial Relations PhilCom, Paseo de Roxas Makati, Metro Manila Madam: I shall have the time and effort for the position of Company physician with your corporation if you deemed it necessary. I have the necessary qualifications, training and experience required by such position and I am confident that I can serve the best interests of your employees, medically. My plan of works and targets shall cover the duties and responsibilities required of a practitioner in industrial medicine which includes the following: 1. Application of preventive medicine including periodic check-up of employees; 2. Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for consultation services to employees; 3. Management and treatment of employees that may necessitate hospitalization including emergency cases and accidents; 4. Conduct pre-employment physical check-up of prospective employees with no additional medical fee; 5. Conduct home visits whenever necessary; 6. Attend to certain medical administrative functions such as accomplishing medical forms, evaluating conditions of employees applying for sick leave of absence and subsequently issuing proper certification, and all matters referred which are medical in nature. On the subject of compensation for the services that I propose to render to the corporation, you may state an offer based on your belief that I can very well qualify for the job having worked with your organization for sometime now.

I shall be very grateful for whatever kind attention you may extend on this matter and hoping that it will merit acceptance, I remain Very truly yours, (signed) RICARDO V. DE VERA, M.D. Significantly, the foregoing letter was substantially the basis of the labor arbiters finding that there existed no employer-employee relationship between petitioner and respondent, in addition to the following factual settings: The fact that the complainant was not considered an employee was recognized by the complainant himself in a signed letter to the respondent dated April 21, 1982 attached as Annex G to the respondents Reply and Rejoinder. Quoting the pertinent portion of said letter: To carry out your memo effectively and to provide a systematic and workable time schedule which will serve the best interests of both the present and absent employee, may I propose an extended twohour service (1:00-3:00 P.M.) during which period I can devote ample time to both groups depending upon the urgency of the situation. I shall readjust my private schedule to be available for the herein proposed extended hours, should you consider this proposal. As regards compensation for the additional time and services that I shall render to the employees, it is dependent on your evaluation of the merit of my proposal and your confidence on my ability to carry out efficiently said proposal. The tenor of this letter indicates that the complainant was proposing to extend his time with the respondent and seeking additional compensation for said extension. This shows that the respondent PHILCOM did not have control over the schedule of the complainant as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. This is proof that the complainant understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. If he were an employee he could not negotiate as to his hours of work. The complainant is a Doctor of Medicine, and presumably, a well-educated person. Yet, the complainant, in his position paper, is claiming that he is not conversant with the law and did not give much attention to his job title- on a retainer basis. But the same complainant admits in his affidavit that his service for the respondent was covered by a retainership contract [which] was renewed every year from 1982 to 1994. Upon reading the contract dated September 6, 1982, signed by the complainant himself (Annex C of Respondents Position Paper), it clearly states that is a retainership contract. The retainer fee is indicated thereon and the duration of the contract for one year is also clearly indicated in paragraph 5 of the Retainership Contract. The complainant cannot claim that he was unaware that the contract was good only for one year, as he signed the same without any objections. The complainant also accepted its renewal every year thereafter until 1994. As a literate person and educated person, the complainant cannot claim that he does not know what contract he signed and that it was renewed on a year to year basis.[17] The labor arbiter added the indicia, not disputed by respondent, that from the time he started to work with petitioner, he never was included in its payroll; was never deducted any contribution for remittance to the Social Security System (SSS); and was in fact subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an employer-employee relationship. In the precise words of the labor arbiter: xxx xxx xxx After more than ten years of services to PHILCOM, the complainant would have noticed that no SSS deductions were made on his remuneration or that the respondent was deducting the 10% tax for his fees and he surely would have complained about them if he had considered himself an employee of PHILCOM. But he never raised those issues. An ordinary employee would consider the SSS payments important and thus make sure they would be paid. The complainant never bothered to ask the respondent to remit his SSS contributions. This clearly shows that the complainant never

considered himself an employee of PHILCOM and thus, respondent need not remit anything to the SSS in favor of the complainant.[18] Clearly, the elements of an employer-employee relationship are wanting in this case. We may add that the records are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees.[19] It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary. We note, too, that the power to terminate the parties relationship was mutually vested on both. Either may terminate the arrangement at will, with or without cause.[20] Finally, remarkably absent from the parties arrangement is the element of control, whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished.[21] Here, petitioner had no control over the means and methods by which respondent went about performing his work at the company premises. He could even embark in the private practice of his profession, not to mention the fact that respondents work hours and the additional compensation therefor were negotiated upon by the parties.[22] In fine, the parties themselves practically agreed on every terms and conditions of respondents engagement, which thereby negates the element of control in their relationship. For sure, respondent has never cited even a single instance when petitioner interfered with his work. Yet, despite the foregoing, all of which are extant on record, both the NLRC and the Court of Appeals ruled that respondent is petitioners regular employee at the time of his separation. Partly says the appellate court in its assailed decision: Be that as it may, it is admitted that private respondents written retainer contract was renewed annually from 1981 to 1994 and the alleged renewal for 1995 and 1996, when it was allegedly terminated, was verbal. Article 280 of the Labor code (sic) provides: The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one (1) year of service, whether such is continuous or broken, shall be considered a regular with respect to the activity in which he is employed and his employment shall continue while such activity exists. Parenthetically, the position of company physician, in the case of petitioner, is usually necessary and desirable because the need for medical attention of employees cannot be foreseen, hence, it is necessary to have a physician at hand. In fact, the importance and desirability of a physician in a company premises is recognized by Art. 157 of the Labor Code, which requires the presence of a physician depending on the number of employees and in the case at bench, in petitioners case, as found by public respondent, petitioner employs more than 500 employees. Going back to Art. 280 of the Labor Code, it was made therein clear that the provisions of a written agreement to the contrary notwithstanding or the existence of a mere oral agreement, if the employee is engaged in the usual business or trade of the employer, more so, that he rendered service for at least one year, such employee shall be considered as a regular employee. Private respondent herein has been with petitioner since 1981 and his employment was not for a specific project or undertaking, the

period of which was pre-determined and neither the work or service of private respondent seasonal. (Emphasis by the CA itself). We disagree to the foregoing ratiocination. The appellate courts premise that regular employees are those who perform activities which are desirable and necessary for the business of the employer is not determinative in this case. For, we take it that any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latters business, even without being hired as an employee. This set-up is precisely true in the case of an independent contractorship as well as in an agency agreement. Indeed, Article 280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining the existence of an employment relationship. As it is, the provision merely distinguishes between two (2) kinds of employees, i.e., regular and casual. It does not apply where, as here, the very existence of an employment relationship is in dispute.[23] Buttressing his contention that he is a regular employee of petitioner, respondent invokes Article 157 of the Labor Code, and argues that he satisfies all the requirements thereunder. The provision relied upon reads: ART. 157. Emergency medical and dental services. It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of: (a) The services of a full-time registered nurse when the number of employees exceeds fifty (50) but not more than two hundred (200) except when the employer does not maintain hazardous workplaces, in which case the services of a graduate first-aider shall be provided for the protection of the workers, where no registered nurse is available. The Secretary of Labor shall provide by appropriate regulations the services that shall be required where the number of employees does not exceed fifty (50) and shall determine by appropriate order hazardous workplaces for purposes of this Article; The services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic, when the number of employees exceeds two hundred (200) but not more than three hundred (300); and The services of a full-time physician, dentist and full-time registered nurse as well as a dental clinic, and an infirmary or emergency hospital with one bed capacity for every one hundred (100) employees when the number of employees exceeds three hundred (300).

(b)

(c)

In cases of hazardous workplaces, no employer shall engage the services of a physician or dentist who cannot stay in the premises of the establishment for at least two (2) hours, in the case of those engaged on part-time basis, and not less than eight (8) hours in the case of those employed on full-time basis. Where the undertaking is nonhazardous in nature, the physician and dentist may be engaged on retained basis, subject to such regulations as the Secretary of Labor may prescribe to insure immediate availability of medical and dental treatment and attendance in case of emergency. Had only respondent read carefully the very statutory provision invoked by him, he would have noticed that in non-hazardous workplaces, the employer may engage the services of a physician on retained basis. As correctly observed by the petitioner, while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees, nothing is there in the law which says that medical practitioners so engaged be actually hired as employees,[24] adding that the law, as written, only requires the employer to retain, not employ, a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours.[25] Respondent takes no issue on the fact that petitioners business of telecommunications is not hazardous in nature. As such, what applies here is the last paragraph of Article 157 which, to stress, provides that the employer may engage the services of a physician and dentist on retained basis, subject to such

regulations as the Secretary of Labor may prescribe. The successive retainership agreements of the parties definitely hue to the very statutory provision relied upon by respondent. Deeply embedded in our jurisprudence is the rule that courts may not construe a statute that is free from doubt. Where the law is clear and unambiguous, it must be taken to mean exactly what it says, and courts have no choice but to see to it that the mandate is obeyed.[26] As it is, Article 157 of the Labor Code clearly and unequivocally allows employers in non-hazardous establishments to engage on retained basis the service of a dentist or physician. Nowhere does the law provide that the physician or dentist so engaged thereby becomes a regular employee. The very phrase that they may be engaged on retained basis, revolts against the idea that this engagement gives rise to an employer-employee relationship. With the recognition of the fact that petitioner consistently engaged the services of respondent on a retainer basis, as shown by their various retainership contracts, so can petitioner put an end, with or without cause, to their retainership agreement as therein provided.[27] We note, however, that even as the contracts entered into by the parties invariably provide for a 60-day notice requirement prior to termination, the same was not complied with by petitioner when it terminated on 17 December 1996 the verbally-renewed retainership agreement, effective at the close of business hours of 31 December 1996. Be that as it may, the record shows, and this is admitted by both parties,[28] that execution of the NLRC decision had already been made at the NLRC despite the pendency of the present recourse. For sure, accounts of petitioner had already been garnished and released to respondent despite the previous Status Quo Order[29] issued by this Court. To all intents and purposes, therefore, the 60-day notice requirement has become moot and academic if not waived by the respondent himself. WHEREFORE, the petition is GRANTED and the challenged decision of the Court of Appeals REVERSED and SET ASIDE. The 21 December 1998 decision of the labor arbiter is REINSTATED. No pronouncement as to costs. SO ORDERED.
INSULAR LIFE ASSURANCE CO., LTD.vs.NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO,G . R . N o . 8 4 4 8 4 N o v e m b e r 1 5 , 1 9 8 9 FACTS : Petitioner entered contract with Basiao for insurance policies and annuities inaccordance with the existing rules and regulations" of the Company; he would receive"compensation, in the form of commissions ... as provided in the Schedule of Commissions" of the contract to "constitute a part of the consideration of ... (said) agreement;" and the "rules in ...(the Company's) Rate Book and its Agent's Manual, as well as all its circulars ... and thosewhich may from time to time be promulgated by it.Some four years later, in April 1972, the parties entered into another contract an AgencyManager's Contract and to implement his end of it Basiao organized an agency or office towhich he gave the name M. Basiao and Associates, while concurrently fulfilling hiscommitments under the first contract with the Company.In May, 1979, the Company terminated the Agency Manager's Contract. After vainly seeking areconsideration, Basiao sued the Company in a civil action and this, he was later to claim,prompted the latter to terminate also his engagement under the first contract and to stoppayment of his commissions starting April 1, 1980.Basiao thereafter filed with the then Ministry of Labor a complaint against the Company and itspresident. Without contesting the termination of the first contract, the complaint sought torecover commissions allegedly unpaid there under, plus attorney's fees. The respondentsdisputed the Ministry's jurisdiction over Basiao's claim, asserting that he was not the Company'semployee, but an independent contractor and that the Company had no obligation to him for unpaid commissions under the terms and conditions of his contract.The Labor Arbiter to whom the case was assigned found for Basiao. He ruled that theunderwriting agreement had established an employer-employee relationship between him andthe Company, and this conferred jurisdiction on the Ministry of Labor to adjudicate his claim.Said official's decision directed payment of his unpaid commissions "... equivalent to thebalance of the first year's premium remaining unpaid, at the time of his termination, of all theinsurance policies solicited by ...

(him) in favor of the respondent company ..." plus 10%attorney's fees.This decision was, on appeal by the Company, affirmed by the National Labor RelationsCommission. Hence, the present petition for certiorari and prohibition ISSUE: Whether, as Basiao asserts, he had become the Company's employee by virtue of the contract invoked by him, thereby placing his claim for unpaid commissions withinthe original and exclusive jurisdiction of the Labor Arbiter under the provisions of Section 217 of the Labor Code, or, contrarily, as the Company would have it, that under said contract Basiao's status was that of an independent contractor whose claim wasthus cognizable, not by the Labor Arbiter in a labor case, but by the regular courts in anordinary civil action. HELD: The Court, therefore, rules that under the contract invoked by him, Basiao was not anemployee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. The Labor Arbiter erred in taking cognizance of, and adjudicating, said claim, being without jurisdiction to do so, asdid the respondent NLRC in affirming the Arbiter's decision. This conclusion renders itunnecessary and premature to consider Basiao's claim for commissions on its merits. WHEREFORE, the appealed Resolution of the National Labor Relations Commission isset aside, and that complaint of private respondent Melecio T. Basiao in RAB Case No. VI-0010-83 is dismissed. No pronouncement as to costs.

PHILIPPINE GLOBAL COMMUNICATIONS, INC. vs. RICARDO DE VERA Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged inthe business of communication services and allied activities, while respondent Ricardo De Verai s a p h y s i c i a n b y p r o f e s s i o n w h o m p e t i t i o n e r e n l i s t e d t o a t t e n d t o t h e m e d i c a l n e e d s o f i t s employees. At the crux of the controversy is Dr. De Veras status vis a vis petitioner when thelatter terminated his engagement.The parties agreed and formalized respondents proposal in a document denominated as Retainership Contract which will be for a period of one year subject to renewal, it being madeclear therein that respondent will cover "the retainership the Company previously had with Dr. K.Eulau" and that respondents "retainer fee" will be at P4,000.00 a month. Said contract wasrenewed yearly. The retainership arrangement went on from 1981 to 1994 with changes in theretainers fee. However, for the years 1995 and 1996, renewal of the contract was only madeverbally.The turning point in the parties relationship surfaced in December 1996 when Philcom, thru aletter bearing on the subject boldly written as "Termination Retainership Contract", informedDe Vera of its decision to discontinue the latters "retainers contract with the Company effectiveat the close of business hours of December 31, 1996" because management has decided that itw o u l d b e m o r e p r a c t i c a l t o p r o v i d e m e d i c a l s e r v i c e s t o i t s e m p l o y e e s t h r o u g h a c c r e d i t e d hospitals near the company premises.On 22 January 1997, De Vera filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC), alleging that that he had been actually employed by Philcom asits company physician since 1981 and was dismissed without due process. He averred that hewas designated as a "company physician on retainer basis" for reasons allegedly known only toPhilcom. He likewise professed that since he was not conversant with labor laws, he did not give much attention to the designation as anyway he worked on a full-time basis and was paid abasic monthly salary plus fringe benefits, like any other regular employees of Philcom.O n 2 1 D e c e m b e r 1 9 9 8 , L a b o r A r b i t e r R a m o n V a l e n t i n C . R e y e s c a m e o u t w i t h a decision dismissing De Veras complaint for lack of merit, on the rationale that as a "retained p h y s i c i a n " u n d e r a v a l i d c o n t r a c t m u t u a l l y a g r e e d u p o n b y t h e p a r t i e s , D e V e r a w a s a n "independent contractor" and that he "was not dismissed but rather his contract with [PHILCOM]ended when said contract was not renewed after December 31, 1996".On De Veras appeal to the NLRC, the latter, in a decision dated 23 October 2000, reversed thatof the Labor Arbiter, on a finding that De Vera is Philcoms "regular employee" and accordinglydirected the company to reinstate him to his former position without loss of seniority rights andprivileges and with full backwages from the date of his dismissal until actual reinstatement.With its motion for reconsideration having been denied by the NLRC in its order of 27 February2001,9Philcom then went to the Court of Appeals on a petition for certiorari

imputing graveabuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC.On 12 September 2002, the Court of Appeals rendered a decision, modifying that of the NLRCby deleting the award of traveling allowance, and ordering payment of separation pay to De Vera in lieu of reinstatement. Issue: Whether or not retainership contracts could be set as a defense by employees in protectingtheir right of security of tenure. Ruling: With the recognition of the fact that petitioner consistently engaged the services of respondenton a retainer basis, as shown by their various "retainership contracts", so can petitioner put anend, with or without cause, to their retainership agreement as therein provided.27We note, however, that even as the contracts entered into by the parties invariably provide for a60-day notice requirement prior to termination, the same was not complied with by petitioner w h e n i t t e r m i n a t e d o n 1 7 D e c e m b e r 1 9 9 6 t h e v e r b a l l y r e n e w e d r e t a i n e r s h i p a g r e e m e n t , effective at the close of business hours of 31 December 1996.Be that as it may, the record shows, and this is admitted by both parties,28 that execution of the N L R C d e c i s i o n had already been made at the NLRC despite the pendency of the presentrecourse. For s u r e , a c c o u n t s o f p e t i t i o n e r h a d a l r e a d y b e e n g a r n i s h e d a n d r e l e a s e d t o respondent despite the previous Status Quo Order 29issued by this Court. To all intents and purposes, therefore, the 60-day notice requirement has become moot and academic if not waived by the respondent himself. WHEREFORE , the petition is GRANTED and the challenged decision of the Court of Appeals R E V E R S E D and SET ASIDE. The 21 December 1998 decision of the labor arbiter i s REINSTATED G.R. No. 129577-80 February 15, 2000PEOPLE OF THE PHILIPPINES, plaintiff-appellee,vs. BULU CHOWDURY, accused-appellant. Facts: The accused worked as an interviewer at Cartrade Agency from 1990 until 1994, thatfrom the period of August 1994 to October 1994, he recruited the complainants: Estrella B.Calleja, Melvin C. Miranda and Aser S. Sasis, for employment in Korea without first obtainingthe required license and/or authority from the Philippine Overseas Employment Administration.They were likewise charged with three counts of estafa committed against private complainants.The State Prosecutor, however, later dismissed the estafa charges against Chowdury and filed anamended information indicting only Ong for the offense.Chowdury was arraigned on April 16, 1996 while Ong remained at large. He pleaded "notguilty" to the charge of illegal recruitment in large scale. The prosecution presented four witnesses: private complainants Aser Sasis, Estrella Calleja and Melvin Miranda, and Labor Employment Officer Abbelyn Caguitla. The trial court found Chowdury guilty beyondreasonable doubt of the crime of illegal recruitment in large scale. Chowdury appealed. Issue is whether accused-appellant knowingly and intentionally participated in thecommission of the crime charged . Held: Evidence shows that accused-appellant interviewed private complainants in the months of June, August and September in 1994 at Craftrade's office. At that time, he was employed asinterviewer of Craftrade which was then operating under a temporary authority given by thePOEA pending renewal of its license. He was convicted based on the fact that he was notregistered with the POEA as employee of Craftrade. Neither was he, in his personal capacity,licensed to recruit overseas workers.Upon examination of the records, the prosecution failed to prove that accused-appellant wasaware of Craftrade's failure to register his name with the POEA and that he actively engaged inrecruitment despite this knowledge. The obligation to register its personnel with the POEA belongs to the officers of the agency. 32 A mere employee of the agency cannot be expected toknow the legal requirements for its operation. The evidence at hand shows that accused-appellantcarried out his duties as interviewer of Craftrade believing that the agency was duly licensed bythe POEA and he, in turn, was duly authorized by his agency to deal with the

applicants in its behalf. Accused-appellant in fact confined his actions to his job description. He merelyinterviewed the applicants and informed them of the requirements for deployment but he never received money from them. Their payments were received by the agency's cashier, Josephine Ong. Furthermore, he performed his tasks under the supervision of its president and managingdirector. Hence, we hold that the prosecution failed to prove beyond reasonable doubt accused-appellant's conscious and active participation in the commission of the crime of illegalrecruitment. His conviction, therefore, is without basis.IN VIEW WHEREOF, the assailed decision of the Regional Trial Court is REVERSED and SETASIDE. Accused-appellant is hereby ACQUITTED. The Director of the Bureau of Corrections isordered to RELEASE accused-appellant unless he is being held for some other cause, and toREPORT to this Court compliance with this order within ten (10) days from receipt of thisdecision.

Encyclopaedia Britannica Inc. vs. NLRC (G.R. No. 87098 November 4, 1996) Facts: Private respondent Benjamin Limjoco was a Sales Division Manager of petitioner EncyclopaediaBritannica and was in charge of selling petitioner's products through some sales representatives.As compensation, private respondent received commissions from the products sold by his agents.He was also allowed to use petitioner's name, goodwill and logo. It was, however, agreed upon that office expenses would be deducted from private respondent's commissions. Petitioner woulda l s o b e i n f o r m e d a b o u t a p p o i n t m e n t s , p r o m o t i o n s , a n d t r a n s f e r s o f e m p l o y e e s i n p r i v a t e respondent's district.O n June 14, 1974, private respondent Limjoco resigned from office to pursue his private business. Then on October 30, 1975, he filed a complaint against petitioner EncyclopaediaBritannica with the Department of Labor and Employment, claiming f o r n o n - p a y m e n t o f separation pay and other benefits, and also illegal deduction from his sales commissions. Issue: Whether respondent Limjoco is indeed an employee of the petitioner. Held: Private respondent was not an employee of the petitioner company. He had free rein in the meansand methods for conducting the marketing operations. He selected his own personnel and theonly reason why he had to notify the petitioner about such appointments was for purpose of deducting the employees' salaries from his commissions.Private respondent was merely an agent or an independent dealer of the petitioner. He was free toconduct his work and he was free to engage in other means of livelihood.As stated earlier, "the element of control is absent; where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, andin turn is compensated according to the result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee exists. In fine, there is nothing inthe records to show or would "indicate that complainant was under the control of the petitioner"in respect of the means and methods in the performance of complainant's work.Consequently, private respondent is not entitled to the benefits prayed for.In view of the foregoing premises, the petition is hereby GRANTED, and the decision of the NLRC is hereby REVERSED AND SET ASIDE. SO ORDERED.

G.R. No. L-32245 May 25, 1979

DY KEH BENG, petitioner, vs. INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL., respondents. A. M Sikat for petitioner. D. A. Hernandez for respondents.

DE CASTRO, J.: Petitioner Dy Keh Beng seeks a review by certiorari of the decision of the Court of Industrial Relations dated March 23, 1970 in Case No. 3019-ULP and the Court's Resolution en banc of June 10, 1970 affirming said decision. The Court of Industrial Relations in that case found Dy Keh Beng guilty of the unfair labor practice acts alleged and order him to
reinstate Carlos Solano and Ricardo Tudla to their former jobs with backwages from their respective dates of dismissal until fully reinstated without loss to their right of seniority and of such other rights already acquired by them and/or allowed by law. 1

Now, Dy Keh Beng assigns the following errors 2 as having been committed by the Court of Industrial Relations:
I RESPONDENT COURT ERRED IN FINDING THAT RESPONDENTS SOLANO AND TUDLA WERE EMPLOYEES OF PETITIONERS. II RESPONDENT COURT ERRED IN FINDING THAT RESPONDENTS SOLANO AND TUDLA WERE DISMISSED FROM THEIR EMPLOYMENT BY PETITIONER. III RESPONDENT COURT ERRED IN FINDING THAT THE TESTIMONIES ADDUCED BY COMPLAINANT ARE CONVINCING AND DISCLOSES (SIC) A PATTERN OF DISCRIMINATION BY THE PETITIONER HEREIN. IV RESPONDENT COURT ERRED IN DECLARING PETITIONER GUILTY OF UNFAIR LABOR PRACTICE ACTS AS ALLEGED AND DESCRIBED IN THE COMPLAINT. V RESPONDENT COURT ERRED IN PETITIONER TO REINSTATE RESPONDENTS TO THEIR FORMER JOBS WITH BACKWAGES FROM THEIR RESPECTIVE DATES OF DISMISSALS UNTIL FINALLY REINSTATED WITHOUT LOSS TO THEIR RIGHT OF SENIORITY AND OF SUCH OTHER RIGHTS ALREADY ACQUIRED BY THEM AND/OR ALLOWED BY LAW.

The facts as found by the Hearing Examiner are as follows: A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket factory, for discriminatory acts within the meaning of Section 4(a), sub-paragraph (1) and (4). Republic Act No. 875, 3 by dismissing on September 28 and 29, 1960, respectively, Carlos N. Solano and Ricardo Tudla for their union activities. After preliminary investigation was conducted, a case was filed in the Court of Industrial Relations for in behalf of the International Labor and Marine Union of the Philippines and two of its members, Solano and

Tudla In his answer, Dy Keh Beng contended that he did not know Tudla and that Solano was not his employee because the latter came to the establishment only when there was work which he did on pakiaw basis, each piece of work being done under a separate contract. Moreover, Dy Keh Beng countered with a special defense of simple extortion committed by the head of the labor union, Bienvenido Onayan. After trial, the Hearing Examiner prepared a report which was subsequently adopted in toto by the Court of Industrial Relations. An employee-employer relationship was found to have existed between Dy Keh Beng and complainants Tudla and Solano, although Solano was admitted to have worked on piece basis. 4 The issue therefore centered on whether there existed an employee employer relation between petitioner Dy Keh Beng and the respondents Solano and Tudla . According to the Hearing Examiner, the evidence for the complainant Union tended to show that Solano and Tudla became employees of Dy Keh Beng from May 2, 1953 and July 15, 1955, 5 respectively, and that except in the event of illness, their work with the establishment was continuous although their services were compensated on piece basis. Evidence likewise showed that at times the establishment had eight (8) workers and never less than five (5); including the complainants, and that complainants used to receive ?5.00 a day. sometimes less. 6 According to Dy Keh Beng, however, Solano was not his employee for the following reasons:
(1) Solano never stayed long enought at Dy's establishment; (2) Solano had to leave as soon as he was through with the (3) order given him by Dy; (4) When there were no orders needing his services there was nothing for him to do; (5) When orders came to the shop that his regular workers could not fill it was then that Dy went to his address in Caloocan and fetched him for these orders; and (6) Solano's work with Dy's establishment was not continuous. ,
7

According to petitioner, these facts show that respondents Solano and Tudla are only piece workers, not employees under Republic Act 875, where an employee 8 is referred to as
shall include any employee and shag not be limited to the employee of a particular employer unless the Act explicitly states otherwise and shall include any individual whose work has ceased as a consequence of, or in connection with any current labor dispute or because of any unfair labor practice and who has not obtained any other substantially equivalent and regular employment.

while an employer 9
includes any person acting in the interest of an employer, directly or indirectly but shall not include any labor organization (otherwise than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization.

Petitioner really anchors his contention of the non-existence of employee-employer relationship on the control test. He points to the case of Madrigal Shipping Co., Inc. v. Nieves Baens del Rosario, et al., L-13130, October 31, 1959, where the Court ruled that:
The test ... of the existence of employee and employer relationship is whether there is an understanding between the parties that one is to render personal services to or for the benefit of the other and recognition by them of the right of one to order and control the other in the performance of the work and to direct the manner and method of its performance.

Petitioner contends that the private respondents "did not meet the control test in the fight of the ... definition of the terms employer and employee, because there was no evidence to show that petitioner had the right to direct the manner and method of respondent's work. 10 Moreover, it is argued that petitioner's evidence showed that "Solano worked on a pakiaw basis" and that he stayed in the establishment only when there was work. While this Court upholds the control test 11 under which an employer-employee relationship exists "where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end, " it finds no merit with petitioner's arguments as stated above. It should be borne in mind that the control test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right. 12 Considering the finding by the Hearing Examiner that the establishment of Dy Keh Beng is "engaged in the manufacture of baskets known as kaing, 13 it is natural to expect that those working under Dy would have to observe, among others, Dy's requirements of size and quality of the kaing. Some control would necessarily be exercised by Dy as the making of the kaing would be subject to Dy's specifications. Parenthetically, since the work on the baskets is done at Dy's establishments, it can be inferred that the proprietor Dy could easily exercise control on the men he employed. As to the contention that Solano was not an employee because he worked on piece basis, this Court agrees with the Hearing Examiner that
circumstances must be construed to determine indeed if payment by the piece is just a method of compensation and does not define the essence of the relation. Units of time ... and units of work are in establishments like respondent (sic) just yardsticks whereby to determine rate of compensation, to be applied whenever agreed upon. We cannot construe payment by the piece where work is done in such an establishment so as to put the worker completely at liberty to turn him out and take in another at pleasure.

At this juncture, it is worthy to note that Justice Perfecto, concurring with Chief Justice Ricardo Paras who penned the decision in " Sunrise Coconut Products Co. v. Court of Industrial Relations" (83 Phil..518, 523), opined that
judicial notice of the fact that the so-called "pakyaw" system mentioned in this case as generally practiced in our country, is, in fact, a labor contract -between employers and employees, between capitalists and laborers.

Insofar as the other assignments of errors are concerned, there is no showing that the Court of Industrial Relations abused its discretion when it concluded that the findings of fact made by the Hearing Examiner were supported by evidence on the record. Section 6, Republic Act 875 provides that in unfair labor practice cases, the factual findings of the Court of Industrial Relations are conclusive on the Supreme Court, if supported by substantial evidence. This provision has been put into effect in a long line of decisions where the Supreme Court did not reverse the findings of fact of the Court of Industrial Relations when they were supported by substantial evidence. 14 Nevertheless, considering that about eighteen (18) years have already elapsed from the time the complainants were dismissed, 15 and that the decision being appealed ordered the payment of backwages to the employees from their respective dates of dismissal until finally reinstated, it is fitting to apply in this connection the formula for backwages worked out by Justice Claudio Teehankee in "cases not terminated sooner." 16 The formula cans for fixing the award of backwages without qualification and deduction to three years, "subject to deduction where there are mitigating circumstances in favor of the employer but subject to increase by way of exemplary damages where there are aggravating circumstances. 17 Considering there are no such circumstances in this case, there is no reason why the Court should not apply the abovementioned formula in this instance. WHEREFORE; the award of backwages granted by the Court of Industrial Relations is herein modified to an award of backwages for three years without qualification and deduction at the

respective rates of compensation the employees concerned were receiving at the time of dismissal. The execution of this award is entrusted to the National Labor Relations Commission. Costs against petitioner. SO ORDERED.

G.R. No. 111870 June 30, 1994 AIR MATERIAL WING SAVINGS AND LOAN ASSOCIATION, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, et al., respondents. Jerry D. Banares for petitioner. Perdrelito Q. Aquino for private respondent.

CRUZ, J.: Private respondent Luis S. Salas was appointed "notarial and legal counsel" for petitioner Air Material Wings Savings and Loan Association (AMWSLAI) in 1980. The appointment was renewed for three years in an implementing order dated January 23, 1987, reading as follows:
SUBJECT: Implementing Order on the Reappointment of the Legal Officer TO: ATTY. LUIS S. SALAS Per approval of the Board en banc in a regular meeting held on January 21, 1987, you are hereby reappointed as Notarial and Legal Counsel of this association for a term of three (3) years effective March 1, 1987, unless sooner terminated from office for cause or as may be deemed necessary by the Board for the interest and protection of the association. Aside from notarization of loan & other legal documents, your duties and responsibilities are hereby enumerated in the attached sheet, per Articles IX, Section 1-d of the by-laws and those approved by the Board en banc. Your monthly compensation/retainer's fee remains the same. This shall form part of your 201 file. BY AUTHORITY OF THE BOARD: LUVIN S. MANAY President & Chief of the Board

On January 9, 1990, the petitioner issued another order reminding Salas of the approaching termination of his legal services under their contract. This prompted Salas to lodge a complaint against AMWSLAI for separation pay, vacation and sick leave benefits, cost of living allowances, refund of SSS premiums, moral and exemplary damages, payment of notarial services rendered from February 1, 1980 to March 2, 1990, and attorney's fees. Instead of filing an answer, AMWSLAI moved to dismiss for lack of jurisdiction. It averred that there was no employer-employee relationship between it and Salas and that his monetary claims properly fell within the jurisdiction of the regular courts. Salas opposed the motion and presented documentary evidence to show that he was indeed an employee of AMWSLAI.

The motion was denied and both parties were required to submit their position papers. AMWSLAI filed a motion for reconsideration ad cautelam, which was also denied. The parties were again ordered to submit their position papers but AMWSLAI did not comply. Nevertheless, most of Salas' claims were dismissed by the labor arbiter in his decision dated November 21, 1991. 1 It was there held that Salas was not illegally dismissed and so not entitled to collect separation benefits. His claims for vacation leave, sick leave, medical and dental allowances and refund of SSS premiums were rejected on the ground that he was a managerial employee. He was also denied moral and exemplary damages for lack of evidence of bad faith on the part of AMWSLAI. Neither was he allowed to collect his notarial fees from 1980 up to 1986 because the claim therefor had already prescribed. However, the petitioner was ordered to pay Salas his notarial fees from 1987 up to March 2, 1990, and attorney's fee equivalent to 10% of the judgment award. On appeal, the decision was affirmed in toto by the respondent Commission, prompting the petitioner to seek relief in this Court. 2 The threshold issue in this case is whether or not Salas can be considered an employee of the petitioner company. We have held in a long line of decisions that the elements of an employer-employee relationship are: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) employer's own power to control employee's conduct. 3 The existence of such a relationship is essentially a factual question. The findings of the NLRC on this matter are accorded great respect and even finality when the same are supported by substantial evidence. 4 The terms and conditions set out in the letter-contract entered into by the parties on January 23, 1987, clearly show that Salas was an employee of the petitioner. His selection as the company counsel was done by the board of directors in one of its regular meetings. The petitioner paid him a monthly compensation/retainer's fee for his services. Though his appointment was for a fixed term of three years, the petitioner reserved its power of dismissal for cause or as it might deem necessary for its interest and protection. No less importantly, AMWSLAI also exercised its power of control over Salas by defining his duties and functions as its legal counsel, to wit:
1. To act on all legal matters pertinent to his Office. 2. To seek remedies to effect collection of overdue accounts of members without prejudice to initiating court action to protect the interest of the association. 3. To defend by all means all suit against the interest of the Association.
5

In the earlier case of Hydro Resources Contractors Corp. v. Pagalilauan, 6 this Court observed that:
A lawyer, like any other professional, may very well be an employee of a private corporation or even of the government. It is not unusual for a big corporation to hire a staff of lawyers as its inhouse counsel, pay them regular salaries, rank them in its table of organization, and otherwise treat them like its other officers and employees. At the same time, it may also contract with a law firm to act as outside counsel on a retainer basis. The two classes of lawyers often work closely together but one group is made up of employees while the other is not. A similar arrangement may exist as to doctors, nurses, dentists, public relations practitioners and other professionals.

We hold, therefore, that the public respondent committed no grave abuse of discretion in ruling that an employer-employee relationship existed between the petitioner and the private respondent.

We must disagree with the NLRC, however, on Salas' claims for notarial fees. The petitioner contends that the public respondents are not empowered to adjudicate claims for notarial fees. On the other hand, the Solicitor General believes that the NLRC acted correctly when it took cognizance of the claim because it arose out of Salas' employment contract with the petitioner which assigned him the duty to notarize loan agreements and other legal documents. Moreover, Section 9 of Rule 141 of the Rules of Court does not restrict or prevent the labor arbiter and the NLRC from determining claims for notarial fees. Labor arbiters have the original and exclusive jurisdiction over money claims of workers when such claims have some reasonable connection with the employer-employee relationship. The money claims of workers referred to in paragraph 3 of Article 217 of the Labor Code are those arising out of or in connection with the employer-employee relationship or some aspect or incident of such relationship. Salas' claim for notarial fees is based on his employment as a notarial officer of the petitioner and thus comes under the jurisdiction of the labor arbiter. The public respondents agreed that Salas was entitled to collect notarial fees from 1987 to 1990 by virtue of his having been assigned as notarial officer. We feel, however, that there is no substantial evidence to support this finding. The letter-contract of January 23, 1987, does not contain any stipulation for the separate payment of notarial fees to Salas in addition to his basic salary. On the contrary, it would appear that his notarial services were part of his regular functions and were thus already covered by his monthly compensation. It is true that the notarial fees were paid by membersborrowers of the petitioner for its own account and not of Salas. However, this is not a sufficient basis for his claim to such fees in the absence of any agreement to that effect. ACCORDINGLY, the appealed judgment of the NLRC is AFFIRMED, with the modification that the award of notarial fees and attorney's fees is disallowed. It is so ordered.

G.R. No. 119930 March 12, 1998 INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division, Cebu City), LABOR ARBITER NICASIO P. ANINON and PANTALEON DE LOS REYES, respondents.

BELLOSILLO, J.: On 17 June 1994 respondent Labor Arbiter dismissed for lack of jurisdiction NLRC RAB-VII Case No. 03-0309-94 filed by private respondent Pantaleon de los Reyes against petitioner Insular Life Assurance Co., Ltd. (INSULAR LIFE), for illegal dismissal and nonpayment of salaries and back wages after finding no employer-employee relationship between De los

Reyes and petitioner INSULAR LIFE. 1 On appeal by private respondent, the order of dismissal was reversed by the National Labor Relations Commission (NLRC) which ruled that respondent De los Reyes was an employee of petitioner. 2 Petitioner's motion for reconsideration having been denied, the NLRC remanded the case to the Labor Arbiter for hearing on the merits. Seeking relief through this special civil action for certiorari with prayer for a restraining order and/or preliminary injunction, petitioner now comes to us praying for annulment of the decision of respondent NLRC dated 3 March 1995 and its Order dated 6 April 1995 denying the motion for reconsideration of the decision. It faults NLRC for acting without jurisdiction and/or with grave abuse of discretion when, contrary to established facts and pertinent law and jurisprudence, it reversed the decision of the Labor Arbiter and held instead that the complaint was properly filed as an employer-employee relationship existed between petitioner and private respondent. Petitioner reprises the stand it assumed below that it never had any employer-employee relationship with private respondent, this being an express agreement between them in the agency contracts, particularly reinforced by the stipulation therein that De los Reyes was allowed discretion to devise ways and means to fulfill his obligations as agent and would be paid commission fees based on his actual output. It further insists that the nature of this work status as described in the contracts had already been squarely resolved by the Court in the earlier case of Insular Life Assurance Co., Ltd. v. NLRC and Basiao 3 where the complainant therein, Melecio Basiao, was similarly situated as respondent De los Reyes in that he was appointed first as an agent and then promoted as agency manager, and the contracts under which he was appointed contained terms and conditions identical to those of Delos Reyes. Petitioner concludes that since Basiao was declared by the Court to be an independent contractor and not an employee of petitioner, there should be no reason why the status of De los Reyes herein vis-a-vis petitioner should not be similarly determined. We reject the submissions of petitioner and hold that respondent NLRC acted appropriately within the bounds of the law. The records of the case are replete with telltale indicators of an existing employer-employee relationship between the two parties despite written contractual disavowals. These facts are undisputed: on 21 August 1992 petitioner entered into an agency contract with respondent Pantaleon de los Reyes 4 authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which he would be paid compensation in the form of commissions. The contract was prepared by petitioner in its entirety and De los Reyes merely signed his conformity thereto. It contained the stipulation that no employer-employee relationship shall be created between the parties and that the agent shall be free to exercise his own judgment as to time, place and means of soliciting insurance. De los Reyes however was prohibited by petitioner from working for any other life insurance company, and violation of this stipulation was sufficient ground for termination of the contract. Aside from soliciting insurance for the petitioner, private respondent was required to submit to the former all completed applications for insurance within ninety (90) consecutive days, deliver policies, receive and collect initial premiums and balances of first year premiums, renewal premiums, deposits on applications and payments on policy loans. Private respondent was also bound to turn over to the company immediately any and all sums of money collected by him. In a written communication by petitioner to respondent De los Reyes, the latter was urged to register with the Social Security System as a self-employed individual as provided under PD No. 1636. 5 On 1 March 1993 petitioner and private respondent entered into another contract 6 where the latter was appointed as Acting Unit Manager under its office the Cebu DSO V (157). As such, the duties and responsibilities of De los Reyes included the recruitment, training, organization and development within his designated territory of a sufficient number of qualified, competent and trustworthy underwriters, and to supervise and coordinate the sales efforts of the underwriters in the active solicitation of new business and in the furtherance of

the agency's assigned goals. It was similarly provided in the management contract that the relation of the acting unit manager and/or the agents of his unit to the company shall be that of independent contractor. If the appointment was terminated for any reason other than for cause, the acting unit manager would be reverted to agent status and assigned to any unit. As in the previous agency contract, De los Reyes together with his unit force was granted freedom to exercise judgment as to time, place and means of soliciting insurance. Aside from being granted override commissions, the acting unit manager was given production bonus, development allowance and a unit development financing scheme euphemistically termed "financial assistance" consisting of payment to him of a free portion of P300.00 per month and a validate portion of P1,200.00. While the latter amount was deemed as an advance against expected commissions, the former was not and would be freely given to the unit manager by the company only upon fulfillment by him of certain manpower and premium quota requirements. The agents and underwriters recruited and trained by the acting unit manager would be attached to the unit but petitioner reserved the right to determine if such assignment would be made or, for any reason, to reassign them elsewhere. Aside from soliciting insurance, De los Reyes was also expressly obliged to participate in the company's conservation program, i.e., preservation and maintenance of existing insurance policies, and to accept moneys duly receipted on agent's receipts provided the same were turned over to the company. As long as he was unit manager in an acting capacity, De los Reyes was prohibited from working for other life insurance companies or with the government. He could not also accept a managerial or supervisory position in any firm doing business in the Philippines without the written consent of petitioner. Private respondent worked concurrently as agent and Acting Unit Manager until he was notified by petitioner on 18 November 1993 that his services were terminated effective 18 December 1993. On 7 March 1994 he filed a complaint before the Labor Arbiter on the ground that he was illegally dismissed and that he was not paid his salaries and separation pay. Petitioner filed a motion to dismiss the complaint of De los Reyes for lack of jurisdiction, citing the absence of employer-employee relationship. It reasoned out that based on the criteria for determining the existence of such relationship or the so-called "four-fold test," i.e., (a) selection and engagement of employee, (b) payment of wages, (c) power of dismissal, and, (d) power of control, De los Reyes was not an employee but an independent contractor. On 17 June 1994 the motion of petitioner was granted by the Labor Arbiter and the case was dismissed on the ground that the element of control was not sufficiently established since the rules and guidelines set by petitioner in its agency agreement with respondent Delos Reyes were formulated only to achieve the desired result without dictating the means or methods of attaining it. Respondent NLRC however appreciated the evidence from a different perspective. It determined that respondent De los Reyes was under the effective control of petitioner in the critical and most important aspects of his work as Unit Manager. This conclusion was derived from the provisions in the contract which appointed private respondent as Acting Unit Manager, to wit: (a) De los Reyes was to serve exclusively the company, therefore, he was not an independent contractor; (b) he was required to meet certain manpower and production quota; and, (c) petitioner controlled the assignment to and removal of soliciting agents from his unit. The NLRC also took into account other circumstances showing that petitioner exercised employer's prerogatives over De los Reyes, e.g., (a) limiting the work of respondent De los Reyes to selling a life insurance policy known as "Salary Deduction Insurance" only to members of the Philippine National Police, public and private school teachers and other employees of private companies; (b) assigning private respondent to a particular place and table where he worked whenever he was not in the field; (c) paying private respondent during the period of twelve (12) months of his appointment as Acting Unit Manager the amount of

P1,500.00 as Unit Development Financing of which 20% formed his salary and the rest, i.e., 80%, as advance of his expected commissions; and, (d) promising that upon completion of certain requirements, he would be promoted to Unit Manager with the right of petitioner to revert him to agent status when warranted. Parenthetically, both petitioner and respondent NLRC treated the agency contract and the management contract entered into between petitioner and De los Reyes as contracts of agency. We however hold otherwise. Unquestionably there exist major distinctions between the two agreements. While the first has the earmarks of an agency contract, the second is far removed from the concept of agency in that provided therein are conditionalities that indicate an employer-employee relationship. The NLRC therefore was correct in finding that private respondent was an employee of petitioner, but this holds true only insofar as the management contract is concerned. In view thereof, the Labor Arbiter has jurisdiction over the case.. It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the "employee" is an independent contractor when the terms of the agreement clearly show otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. 7 In determining the status of the management contract, the "four-fold test" on employment earlier mentioned has to be applied. Petitioner contends that De los Reyes was never required to go through the pre-employment procedures and that the probationary employment status was reserved only to employees of petitioner. On this score, it insists that the first requirement of selection and engagement of the employee was not met. A look at the provisions of the contract shows that private respondent was appointed as Acting Unit Manager only upon recommendation of the District Manager. 8 This indicates that private respondent was hired by petitioner because of the favorable endorsement of its duly authorized officer. But, this approbation could only have been based on the performance of De los Reyes as agent under the agency contract so that there can be no other conclusion arrived under this premise than the fact that the agency or underwriter phase of the relationship of De los Reyes with petitioner was nothing more than a trial or probationary period for his eventual appointment as Acting Unit Manager of petitioner. Then, again, the very designation of the appointment of private respondent as "acting" unit manager obviously implies a temporary employment status which may be made permanent only upon compliance with company standards such as those enumerated under Sec. 6 of the management contract. 9 On the matter of payment of wages, petitioner points out that respondent was compensated strictly on commission basis, the amount of which was totally dependent on his total output. But, the manager's contract, speaks differently. Thus
4. Performance Requirements. To maintain your appointment as Acting Unit Manager you must meet the following manpower and production requirements: Quarter Active Calendar Year Production Agents Cumulative FYP Production 1st 2 P 125,000 2nd 3 250,000 3rd 4 375,000 4th 5 500,000 5.4. Unit Development Financing (UDF). As an Acting Unit Manager you shall be given during the first 12 months of your appointment a financial assistance which is composed of two parts: 5.4.1. Free Portion amounting to P300 per month, subject to your meeting prescribed minimum performance requirement on manpower and premium

production. The free portion is not payable by you. 5.4.2. Validate Portion amounting to P1,200 per month, also subject to meeting the same prescribed minimum performance requirements on manpower and premium production. The validated portion is an advance against expected compensation during the UDF period and thereafter as may be necessary.

The above provisions unquestionably demonstrate that the performance requirement imposed on De los Reyes was applicable quarterly while his entitlement to the free portion (P300) and the validated portion (P1,200) was monthly starting on the first month of the twelve (12) months of the appointment. Thus, it has to be admitted that even before the end of the first quarter and prior to the so-called quarterly performance evaluation, private respondent was already entitled to be paid both the free and validated portions of the UDF every month because his production performance could not be determined until after the lapse of the quarter involved. This indicates quite clearly that the unit manager's quarterly performance had no bearing at all on his entitlement at least to the free portion of the UDF which for all intents and purposes comprised the salary regularly paid to him by petitioner. Thus it cannot be validly claimed that the financial assistance consisting of the free portion of the UDF was purely dependent on the premium production of the agent. Be that as it may, it is worth considering that the payment of compensation by way of commission does not militate against the conclusion that private respondent was an employee of petitioner. Under Art. 97 of the Labor Code, "wage" shall mean "however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, price or commission basis . . . ."
10

As to the matter involving the power of dismissal and control by the employer, the latter of which is the most important of the test, petitioner asserts that its termination of De los Reyes was but an exercise of its inherent right as principal under the contracts and that the rules and guidelines it set forth in the contract cannot, by any stretch of the imagination, be deemed as an exercise of control over the private respondent as these were merely directives that fixed the desired result without dictating the means or method to be employed in attaining it. The following factual findings of the NLRC 11 however contradict such claims:
A perusal of the appointment of complainant as Acting Unit Manager reveals that: 1. Complainant was to "exclusively" serve respondent company. Thus it is provided: . . . 7..7 Other causes of Termination: This appointment may likewise be terminated for any of the following causes: . . . 7..7..2. Your entering the service of the government or another life insurance company; 7..7..3. Your accepting a managerial or supervisory position in any firm doing business in the Philippines without the written consent of the Company; . . . 2. Complainant was required to meet certain manpower and production quotas. 3. Respondent (herein petitioner) controlled the assignment and removal of soliciting agents to and from complainant's unit, thus: . . . 7..2. Assignment of Agents: Agents recruited and trained by you shall be attached to your unit unless for reasons of Company policy, no such assignment should be made. The Company retains the exclusive right to assign new soliciting agents to the unit. It is agreed that the Company may remove or transfer any soliciting agents appointed and assigned to the said unit. . . .

It would not be amiss to state that respondent's duty to collect the company's premiums using company receipts under Sec. 7.4 of the management contract is further evidence of petitioner's control over respondent, thus:
xxx xxx xxx 7.4. Acceptance and Remittance of Premiums. . . . . the Company hereby authorizes you to accept and to receive sums of money in payment of premiums, loans, deposits on applications, with or without interest, due from policyholders and applicants for insurance, and the like, specially from policyholders of business solicited and sold by the agents attached to your unit provided however, that all such payments shall be duly receipted by you on the corresponding

Company's "Agents' Receipt" to be provided you for this purpose and to be covered by such rules and accounting regulations the Company may issue from time to time on the matter. Payments received by you shall be turned over to the Company's designated District or Service Office clerk or directly to the Home Office not later than the next working day from receipt thereof . . . .

Petitioner would have us apply our ruling in Insular Life Assurance Co., Ltd. v. NLRC and Basiao 12 to the instant case under the doctrine of stare decisis, postulating that both cases involve parties similarly situated and facts which are almost identical. But we are not convinced that the cited case is on all fours with the case at bar. In Basiao, the agent was appointed Agency Manager under an Agency Manager Contract. To implement his end of the agreement, Melecio Basiao organized an agency office to which he gave the name M. Basiao and Associates. The Agency Manager Contract practically contained the same terms and conditions as the Agency Contract earlier entered into, and the Court observed that, "drawn from the terms of the contract they had entered into, (which) either expressly or by necessary implication, Basiao (was) made the master of his own time and selling methods, left to his own judgment the time, place and means of soliciting insurance, set no accomplishment quotas and compensated him on the bases of results obtained. He was not bound to observe any schedule of working hours or report to any regular station; he could seek and work on his prospects anywhere and at anytime he chose to and was free to adopt the selling methods he deemed most effective." Upon these premises, Basiao was considered as agent an independent contractor of petitioner INSULAR LIFE. Unlike Basiao, herein respondent De los Reyes was appointed Acting Unit Manager, not agency manager. There is no evidence that to implement his obligations under the management contract, De los Reyes had organized an office. Petitioner in fact has admitted that it provided De los Reyes a place and a table at its office where he reported for and worked whenever he was not out in the field. Placed under petitioner's Cebu District Service Office, the unit was given a name by petitioner De los Reyes and Associates and assigned Code No. 11753 and Recruitment No. 109398. Under the managership contract, De los Reyes was obliged to work exclusively for petitioner in life insurance solicitation and was imposed premium production quotas. Of course, the acting unit manager could not underwrite other lines of insurance because his Permanent Certificate of Authority was for life insurance only and for no other. He was proscribed from accepting a managerial or supervisory position in any other office including the government without the written consent of petitioner. De los Reyes could only be promoted to permanent unit manager if he met certain requirements and his promotion was recommended by the petitioner's District Manager and Regional Manager and approved by its Division Manager. As Acting Unit Manager, De los Reyes performed functions beyond mere solicitation of insurance business for petitioner. As found by the NLRC, he exercised administrative functions which were necessary and beneficial to the business of INSULAR LIFE. In Great Pacific Life Insurance Company v. NLRC 13 which is closer in application than Basiao to this present controversy, we found that "the relationships of the Ruiz brothers and Grepalife were those of employer-employee. First, their work at the time of their dismissal as zone supervisor and district manager was necessary and desirable to the usual business of the insurance company. They were entrusted with supervisory, sales and other functions to guard Grepalife's business interests and to bring in more clients to the company, and even with administrative functions to ensure that all collections, reports and data are faithfully brought to the company . . . . A cursory reading of their respective functions as enumerated in their contracts reveals that the company practically dictates the manner by which their jobs are to be carried out . . . ." We need elaborate no further. Exclusivity of service, control of assignments and removal of agents under private respondent's unit, collection of premiums, furnishing of company facilities and materials as well as capital described as Unit Development Fund are but hallmarks of the management system in which herein private respondent worked. This obtaining, there is no escaping the conclusion that private respondent Pantaleon de los Reyes was an employee of herein

petitioner. WHEREFORE, the petition of Insular Life Assurance Company, Ltd., is DENIED and the Decision of the National Labor Relations Commission dated 3 March 1995 and its Order of 6 April 1996 sustaining it are AFFIRMED. Let this case be REMANDED to the Labor Arbiter a quo who is directed to hear and dispose of this case with deliberate dispatch in light of the views expressed herein. SO ORDERED.

[G.R. No. 118101. September 16, 1996] EDDIE DOMASIG, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), CATA GARMENTS CORPORATION and/or OTTO ONG and CATALINA CO, respondents. DECISION PADILLA, J.: This petition for certiorari under Rule 65 of the Rules of Court seeks to nullify and set aside the Resolution[1] of respondent National Labor Relations Commission (NLRC) rendered on 20 September 1994 remanding the records of the case to the arbitration branch of origin for further proceedings. The antecedent facts as narrated by public respondent in the assailed resolution are as follows: The complaint was instituted by Eddie Domasig against respondents Cata Garments Corporation, a company engaged in garments business and its owner/manager Otto Ong and Catalina Co for illegal dismissal, unpaid commission and other monetary claim[s]. Complainant alleged that he started working with the respondent on July 6, 1986 as Salesman when the company was still named Cato Garments Corporation; that three (3) years ago, because of a complaint against respondent by its workers, it changed its name to Cata Garments Corporation; and that on August 29, 1992, he was dismissed when respondent learned that he was being pirated by a rival corporation which offer he refused. Prior to his dismissal, complainant alleged that he was receiving a salary of P1,500.00 a month plus commission. On September 3, 1992 he filed the instant complaint. Respondent denied complainants claim that he is a regular employee contending that he is a mere commission agent who receives a commission of P5.00 per piece of article sold at regular price and P2.50 per piece sold in [sic] bargain price; that in addition to commission, complainant received a fixed allowance of P1,500.00 a month; that he had no regular time schedule; and that the company come [sic] into existence only on September 17, 1991. In support of its claim that complainant is a commission agent, respondent submitted as Annexes B and B-1 the List of Sales Collections, Computation of Commission due, expenses incurred, cash advances received for the month of January and March 1992 (Rollo pp. 22-27). Respondent further contends that complainant failed to turn over to the respondent his collection from two (2) buyers as per affidavit executed by these buyers (Rollo pp. 28-29) and for which, according to respondent it initiated criminal proceedings against the complainant. The Labor Arbiter held that complainant was illegally dismissed and entitled to reinstatement and backwages as well as underpayment of salary; 13th month pay; service incentive leave and legal holiday. The Arbiter also awarded complainant his claim for unpaid commission in the amount of P143,955.00.[2] Private respondents appealed the decision of the labor arbiter to public respondent. As aforesaid, the NLRC resolved to remand the case to the labor arbiter for further proceeding. It declared as follows:

We find the decision of the Labor Arbiter not supported by evidence on record. The issue of whether or not complainant was a commission agent was not fully resolved in the assailed decision. It appears that the Labor Arbiter failed to appreciate the evidences submitted by respondent as Annexes B and B-1 (Rollo pp. 22-27) in support of its allegation as regard[s] the nature of complainants employment. Neither is there a showing that the parties were required to adduce further evidence to support their respective claim. The resolution of the nature of complainants employment is vital to the case at bar considering that it would be determinative to his entitlement of monetary benefits. The same is similarly true as regard the claim [sic] for unpaid commission. The amount being claim [sic] for unpaid commission as big as it is requires substantial proof to establish the entitlement of the complainant to the same. We take note of the respondents claim that while they admit that complainant has an unpaid commission due him, the same is only for his additional sale of 4,027 pieces at regular price and 1,047 pieces at bargain price for a total sum of (P20,135.00 + 2,655.00) or P22,820.00 as appearing in the list of Sales and unpaid commission (Annex C and C-1' Appeal, Rollo pp. 100-102). Said amount according to respondent is being withheld by them pending the accounting of money collected by complainant from his two (2) buyers which was not remitted to them. Considering the conflicting version of the parties regarding the issues on hand, it was incumbent on the Labor Arbiter to conduct further proceedings thereon. The ends of justice would better be served if both parties are given the opportunity to ventilate further their positions.[3] In their comment on the petition at bar, private respondents agree with the finding of the NLRC that the nature of petitioners employment with private respondents is vital to the case as it will determine the monetary benefits to which he is entitled. They further aver that the evidence presented upon which the labor arbiter based her decision is insufficient, so that the NLRC did not commit grave abuse of discretion in remanding the case to the arbitration branch of origin for further proceedings. The comment of the Solicitor General is substantially the same as that of private respondents, i.e., there is no sufficient evidence to prove employer-employee relationship between the parties. Furthermore, he avers that the order of the NLRC to the labor arbiter for further proceedings does not automatically translate to a protracted trial on the merits for such can be faithfully complied with through the submission of additional documents or pleadings only. The only issue to be resolved in this petition is whether or not the NLRC gravely abused its discretion in vacating and setting aside the decision of the labor arbiter and remanding the case to the arbitration branch of origin for further proceedings. In essence, respondent NLRC was not convinced that the evidence presented by the petitioner, consisting of the identification card issued to him by private respondent corporation and the cash vouchers reflecting his monthly salaries covering the months stated therein, settled the issue of employer-employee relationship between private respondents and petitioner. It has long been established that in administrative and quasi-judicial proceedings, substantial evidence is sufficient as a basis for judgment on the existence of employer-employee relationship. No particular form of evidence is required to prove the existence of such employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted.[4] Substantial evidence has been defined to be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, and its absence is not shown by stressing that there is contrary evidence on record, direct or circumstantial, for the appellate court cannot substitute its own judgment or criterion for that of the trial court in determining wherein lies the weight of evidence or what evidence is entitled to belief.[5] In a business establishment, an identification card is usually provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it. Together with the cash vouchers covering petitioners salaries for the months stated therein, we agree with the labor arbiter that these matters constitute substantial evidence adequate to support a conclusion that petitioner was indeed an employee of private respondent.

Section 4, Rule V of the Rules of Procedure of the National Labor Relations Commission provides thus: Section 4. Determination of Necessity of Hearing. Immediately after the submission of the parties of their position papers/memoranda, the Labor Arbiter shall motu propio determine whether there is need for a formal trial or hearing. At this stage, he may, at his discretion and for the purpose of making such determination, ask clarificatory questions to further elicit facts or information, including but not limited to the subpoena of relevant documentary evidence, if any, from any party or witness. It is clear from the law that it is the arbiters who are authorized to determine whether or not there is a necessity for conducting formal hearings in cases brought before them for adjudication. Such determination is entitled to great respect in the absence of arbitrariness.[6] In the case at bar, we do not believe that the labor arbiter acted arbitrarily. Contrary to the finding of the NLRC, her decision at least on the existence of an employer-employee relationship between private respondents and petitioner, is supported by substantial evidence on record. The list of sales collection including computation of commissions due, expenses incurred and cash advances received (Exhibits B and B-1) which, according to public respondent, the labor arbiter failed to appreciate in support of private respondents allegation as regards the nature of petitioners employment as a commission agent, cannot overcome the evidence of the ID card and salary vouchers presented by petitioner which private respondents have not denied. The list presented by private respondents would even support petitioners allegation that, aside from a monthly salary of P1,500.00, he also received commissions for his work as a salesman of private respondents. Having been in the employ of private respondents continuously for more than one year, under the law, petitioner is considered a regular employee. Proof beyond reasonable doubt is not required as a basis for judgment on the legality of an employers dismissal of an employee, nor even preponderance of evidence for that matter, substantial evidence being sufficient.[7] Petitioners contention that private respondents terminated his employment due to their suspicion that he was being enticed by another firm to work for it was not refuted by private respondents. The labor arbiters conclusion that petitioners dismissal is therefore illegal, is not necessarily arbitrary or erroneous. It is entitled to great weight and respect. It was error and grave abuse of discretion for the NLRC to remand the case for further proceedings to determine whether or not petitioner was private respondents employee. This would only prolong the final disposition of the complaint. It is stressed that, in labor cases, simplification of procedures, without regard to technicalities and without sacrificing the fundamental requisites of due process, is mandated to ensure the speedy administration of justice.[8] After all, Article 218 of the Labor Code grants the Commission and the labor arbiter broad powers, including issuance of subpoena, requiring the attendance and testimony of witnesses or the production of such documentary evidence as may be material to a just determination of the matter under investigation. Additionally, the National Labor Relations Commission and the labor arbiter have authority under the Labor Code to decide a case based on the position papers and documents submitted without resorting to the technical rules of evidence.[9] However, in view of the need for further and correct computation of the petitioners commissions in the light of the exhibits presented and the dismissal of the criminal cases filed against petitioner, the labor arbiter is required to undertake a new computation of the commissions to which petitioner may be entitled, within thirty (30) days from submission by the parties of all necessary documents. WHEREFORE, the resolutions of the public respondent dated 20 September 1994 and 9 November 1994 are SET ASIDE. The decision of the labor arbiter dated 19 May 1993 is REINSTATED and AFFIRMED subject to the modification above-stated as regards a re-computation by the labor arbiter of the commissions to which petitioner maybe actually entitled.

SO ORDERED. G.R. No. 123938 May 21, 1998 LABOR CONGRESS OF THE PHILIPPINES (LCP) for and in behalf of its members, ANA MARIE OCAMPO, MARY INTAL, ANNABEL CARESO, MARLENE MELQIADES, IRENE JACINTO, NANCY GARCIA, IMELDA SARMIENTO, LENITA VIRAY, GINA JACINTO, ROSEMARIE DEL ROSARIO, CATHERINE ASPURNA, WINNIE PENA, VIVIAN BAA, EMILY LAGMAN, LILIAN MARFIL, NANCY DERACO, JANET DERACO, MELODY JACINTO, CAROLYN DIZON, IMELDA MANALOTO, NORY VIRAY, ELIZA SALAZAR, GIGI MANALOTO, JOSEFINA BASILIO, MARY ANN MAYATI, ZENAIDA GARCIA, MERLY CANLAS, ERLINDA MANALANG, ANGELINA QUIAMBAO, LANIE GARCIA, ELVIRA PIEDRA, LOURDES PANLILIO, LUISA PANLILIO, LERIZA PANLILIO, ALMA CASTRO, ALDA DAVID, MYRA T. OLALIA, MARIFE PINLAC, NENITA DE GUZMAN, JULIE GACAD, EVELYN MANALO, NORA PATIO, JANETH CARREON, ROWENA MENDOZA, ROWENA MANALO, LENY GARCIA, FELISISIMA PATIO, SUSANA SALOMON, JOYDEE LANSANGAN, REMEDIOS AGUAS, JEANIE LANSANGAN, ELIZABETH MERCADO, JOSELYN MANALESE, BERNADETH RALAR, LOLITA ESPIRITU, AGNES SALAS, VIRGINIA MENDIOLA, GLENDA SALITA, JANETH RALAR, ERLINDA BASILIO, CORA PATIO, ANTONIA CALMA, AGNES CARESO, GEMMA BONUS, MARITESS OCAMPO, LIBERTY GELISANGA, JANETH MANARANG, AMALIA DELA CRUZ, EVA CUEVAS, TERESA MANIAGO, ARCELY PEREZ, LOIDA BIE, ROSITA CANLAS, ANALIZA ESGUERRA, LAILA MANIAGO, JOSIE MANABAT, ROSARIO DIMATULAC, NYMPA TUAZON, DAIZY TUASON, ERLINDA NAVARRO, EMILY MANARANG, EMELITA CAYANAN, MERCY CAYANAN, LUZVIMINDA CAYANAN, ANABEL MANALO, SONIA DIZON, ERNA CANLAS, MARIAN BENEDICTA, DOLORES DOLETIN, JULIE DAVID, GRACE VILLANUEVA, VIRGINIA MAGBAG, CORAZON RILLION, PRECY MANALILI, ELENA RONOZ, IMELDA MENDOZA, EDNA CANLAS and ANGELA CANLAS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, EMPIRE FOOD PRODUCTS, its Proprietor/President & Manager, MR. GONZALO KEHYENG and MRS. EVELYN KEHYENG, respondents.

DAVIDE, JR., J.: In this special civil action for certiorari under Rule 65, petitioners seek to reverse the 29 March 1995 resolution 1 of the National Labor Relations Commission (NLRC) in NLRC RAB III Case No. 01-1964-91 which affirmed the Decision 2 of Labor Arbiter Ariel C. Santos dismissing their complaint for utter lack of merit. The antecedents of this case, as summarized by the Office of the Solicitor General in its Manifestation and Motion in Lieu of Comment, 3 are as follows:
The 99 persons named as petitioners in this proceeding were rank-and-file employees of respondent Empire Food Products, which hired them on various dates (Paragraph 1, Annex "A" of Petition, Annex "B;" Page 2, Annex "F" of Petition). Petitioners filed against private respondents a complaint for payment of money claim[s] and for violation of labor standard[s] laws (NLRC Case No. RAB-111-10-1817-90). They also filed a petition for direct certification of petitioner Labor Congress of the Philippines as their bargaining representative (Case No. R0300-9010-RU-005). On October 23, 1990, petitioners represented by LCP President Benigno B. Navarro, Sr. and private respondents Gonzalo Kehyeng and Evelyn Kehyeng in behalf of Empire Food Products, Inc. entered into a Memorandum of Agreement which provided, among others, the following:

1. That in connection with the pending Petition for Direct Certification filed by the Labor Congress with the DOLE, Management of the Empire Food Products has no objection [to] the direct certification of the LCP Labor Congress and is now recognizing the Labor Congress of the Philippines (LCP) and its Local Chapter as the SOLE and EXCLUSIVE Bargaining Agent and Representative for all rank and file employees of the Empire Food Products regarding "WAGES, HOURS Of WORK, AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT;" 2. That with regards [sic] to NLRC CASE NO. RAB-III-10-1817-90 pending with the NLRC parties jointly and mutually agreed that the issues thereof, shall be discussed by the parties and resolve[d] during the negotiation of the Collective Bargaining Agreement; 3. That Management of the Empire Food Products shall make the proper adjustment of the Employees Wages within fifteen (15) days from the signing of this Agreement and further agreed to register all the employees with the SSS; 4. That Employer, Empire Food Products thru its Management agreed to deduct thru payroll deduction UNION DUES and other Assessment[s] upon submission by the LCP Labor Congress individual Check-Off Authorization[s] signed by the Union Members indicating the amount to be deducted and further agreed all deduction[s] made representing Union Dues and Assessment[s] shall be remitted immediately to the LCP Labor Congress Treasurer or authorized representative within three (3) or five (5) days upon deductions [ sic], Union dues not deducted during the period due, shall be refunded or reimbursed by the Employer/Management. Employer/Management further agreed to deduct Union dues from non-union members the same amount deducted from union members without need of individual Check-Off Authorizations [for] Agency Fee; 5. That in consideration [of] the foregoing covenant, parties jointly and mutually agreed that NLRC CASE NO. RAB-III-10-1817-90 shall be considered provisionally withdrawn from the Calendar of the National Labor Relations Commission (NLRC), while the Petition for direct certification of the LCP Labor Congress parties jointly move for the direct certification of the LCP Labor Congress; 6. That parties jointly and mutually agreed that upon signing of this Agreement, no Harassments [sic], Threats, Interferences [sic] of their respective rights under the law, no Vengeance or Revenge by each partner nor any act of ULP which might disrupt the operations of the business; 7. Parties jointly and mutually agreed that pending negotiations or formalization of the propose[d] CBA, this Memorandum of Agreement shall govern the parties in the exercise of their respective rights involving the Management of the business and the terms and condition[s] of employment, and whatever problems and grievances may arise by and between the parties shall be resolved by them, thru the most cordial and good harmonious relationship by communicating the other party in writing indicating said grievances before taking any action to another forum or government agencies; 8. That parties [to] this Memorandum of Agreement jointly and mutually agreed to respect, abide and comply with all the terms and conditions hereof. Further agreed that violation by the parties of any provision herein shall constitute an act of ULP. (Annex "A" of Petition). In an Order dated October 24, 1990, Mediator Arbiter Antonio Cortez approved the memorandum of agreement and certified LCP "as the sole and exclusive bargaining agent among the rank-and-file employee of Empire Food Products for purposes of collective bargaining with respect to wages, hours of work and other terms and conditions of employment" (Annex "B" of Petition). On November 9, 1990, petitioners through LCP President Navarro submitted to private respondents a proposal for collective bargaining (Annex "C" of Petition). On January 23, 1991, petitioners filed a complaint docketed as NLRC Case No. RAB-III-011964-91 against private respondents for: a. Unfair Labor Practice by way of Illegal Lockout and/or Dismissal; b. Union busting thru Harassments [sic], threats, and interfering with the rights of employees to self-organization; c. Violation of the Memorandum of Agreement dated October 23, 1990;

d. Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727, such as Wages promulgated by the Regional Wage Board; e. Actual, Moral and Exemplary Damages. (Annex "D" of Petition) After the submission by the parties of their respective position papers and presentation of testimonial evidence, Labor Arbiter Ariel C. Santos absolved private respondents of the charges of unfair labor practice, union busting, violation of the memorandum of agreement, underpayment of wages and denied petitioners' prayer for actual, moral and exemplary damages. Labor Arbiter Santos, however, directed the reinstatement of the individual complainants: The undersigned Labor Arbiter is not oblivious to the fact that respondents have violated a cardinal rule in every establishment that a payroll and other papers evidencing hours of work, payments, etc. shall always be maintained and subjected to inspection and visitation by personnel of the Department of Labor and Employment. As such penalty, respondents should not escape liability for this technicality, hence, it is proper that all individual complainants except those who resigned and executed quitclaim[s] and releases prior to the filing of this complaint should be reinstated to their former position[s] with the admonition to respondents that any harassment, intimidation, coercion or any form of threat as a result of this immediately executory reinstatement shall be dealt with accordingly. SO ORDERED. (Annex "G" of petition)

On appeal, the National Labor Relations Commission vacated the Decision dated April 14, 1972 [sic] and remanded the case to the Labor Arbiter for further proceedings for the following reasons:
The Labor Arbiter, through his decision, noted that ". . . complainant did not present any single witness while respondent presented four (4) witnesses in the persons of Gonzalo Kehyeng, Orlando Cairo, Evelyn Kehyeng and Elvira Bulagan . . ." (p. 183, Records), that ". . . complainant before the National Labor Relations Commission must prove with definiteness and clarity the offense charged. . . ." (Record, p. 183); that ". . . complainant failed to specify under what provision of the Labor Code particularly Art. 248 did respondents violate so as to constitute unfair labor practice . . ." (Record, p. 183); that "complainants failed to present any witness who may describe in what manner respondents have committed unfair labor practice . . ." (Record, p. 185); that ". . . complainant LCP failed to present anyone of the so-called 99 complainants in order to testify who committed the threats and intimidation . . ." (Record, p. 185). Upon review of the minutes of the proceedings on record, however, it appears that complainant presented witnesses, namely, BENIGNO NAVARRO, JR. (28 February 1991, RECORD, p. 91; 8 March 1991, RECORD, p. 92, who adopted its POSITION PAPER AND CONSOLIDATED AFFIDAVIT, as Exhibit "A" and the annexes thereto as Exhibit "B", "B-1" to "B-9", inclusive . Minutes of the proceedings on record show that complainant further presented other witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD, p. 93; LOURDES PANTILLO, MARIFE PINLAC, LENIE GARCIA (16 April 1991, Record, p . 96, see back portion thereof ; 2 May 1991, Record, p. 102; 16 May 1991, Record, p. 103, 11 June 1991, Record, p. 105). Formal offer of Documentary and Testimonial Evidence was made by complainant on June 24, 1991 (Record, p. 106-109) The Labor Arbiter must have overlooked the testimonies of some of the individual complainants which are now on record. Other individual complainants should have been summoned with the end in view of receiving their testimonies. The complainants should be afforded the time and opportunity to fully substantiate their claims against the respondents. Judgment should be rendered only based on the conflicting positions of the parties. The Labor Arbiter is called upon to consider and pass upon the issues of fact and law raised by the parties. Toward this end, therefore, it is Our considered view [that] the case should be remanded to the Labor Arbiter of origin for further proceedings. (Annex "H" of Petition)

In a Decision dated July 27, 1994, Labor Arbiter Santos made the following determination:
Complainants failed to present with definiteness and clarity the particular act or acts constitutive of unfair labor practice.

It is to be borne in mind that a declaration of unfair labor practice connotes a finding of prima facie evidence of probability that a criminal offense may have been committed so as to warrant the filing of a criminal information before the regular court. Hence, evidence which is more than a scintilla is required in order to declare respondents/employers guilty of unfair labor practice. Failing in this regard is fatal to the cause of complainants. Besides, even the charge of illegal lockout has no leg to stand on because of the testimony of respondents through their guard Orlando Cairo (TSN, July 31, 1991 hearing; p. 5-35) that on January 21, 1991, complainants refused and failed to report for work, hence guilty of abandoning their post without permission from respondents. As a result of complainants['] failure to report for work, the cheese curls ready for repacking were all spoiled to the prejudice of respondents. Under cross-examination, complainants failed to rebut the authenticity of respondents' witness testimony. As regards the issue of harassments [sic], threats and interference with the rights of employees to self-organization which is actually an ingredient of unfair labor practice, complainants failed to specify what type of threats or intimidation was committed and who committed the same. What are the acts or utterances constitutive of harassments [ sic] being complained of? These are the specifics which should have been proven with definiteness and clarity by complainants who chose to rely heavily on its position paper through generalizations to prove their case. Insofar as violation of [the] Memorandum of Agreement dated October 23, 1990 is concerned, both parties agreed that: 2 That with regards [sic] to the NLRC Case No. RAB III-10-1817-90 pending with the NLRC, parties jointly and mutually agreed that the issues thereof shall be discussed by the parties and resolve[d] during the negotiation of the CBA. The aforequoted provision does not speak of [an] obligation on the part of respondents but on a resolutory condition that may occur or may not happen. This cannot be made the basis of an imposition of an obligation over which the National Labor Relations Commission has exclusive jurisdiction thereof. Anent the charge that there was underpayment of wages, the evidence points to the contrary. The enumeration of complainants' wages in their consolidated Affidavits of merit and position paper which implies underpayment has no leg to stand on in the light of the fact that complainants' admission that they are piece workers or paid on a pakiao [basis] i.e. a certain amount for every thousand pieces of cheese curls or other products repacked. The only limitation for piece workers or pakiao workers is that they should receive compensation no less than the minimum wage for an eight (8) hour work [ sic]. And compliance therewith was satisfactorily explained by respondent Gonzalo Kehyeng in his testimony (TSN, p. 12-30) during the July 31, 1991 hearing. On cross-examination, complainants failed to rebut or deny Gonzalo Kehyeng's testimony that complainants have been even receiving more than the minimum wage for an average workers [sic]. Certainly, a lazy worker earns less than the minimum wage but the same cannot be attributable to respondents but to the lazy workers. Finally, the claim for moral and exemplary damages has no leg to stand on when no malice, bad faith or fraud was ever proven to have been perpetuated by respondents. WHEREFORE, premises considered, the complaint is hereby DISMISSED for utter lack of merit. (Annex "I" of Petition). 4

On appeal, the NLRC, in its Resolution dated 29 March 1995, 5 affirmed in toto the decision of Labor Arbiter Santos. In so doing, the NLRC sustained the Labor Arbiter's findings that: (a) there was a dearth of evidence to prove the existence of unfair labor practice and union busting on the part of private respondents; (b) the agreement of 23 October 1990 could not be made the basis of an obligation within the ambit of the NLRC's jurisdiction, as the provisions thereof, particularly Section 2, spoke of a resolutory condition which could or could not happen; (c) the claims for underpayment of wages were without basis as complainants were admittedly "pakiao" workers and paid on the basis of their output subject to the lone limitation that the payment conformed to the minimum wage rate for an eight-hour workday; and (d) petitioners were not underpaid. Their motion for reconsideration having been denied by the NLRC in its Resolution of 31 October 1995, 6 petitioners filed the instant special civil action for certiorari raising the following issues:

I WHETHER OR NOT THE PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION WHEN IT DISREGARDED OR IGNORED NOT ONLY THE EVIDENCE FAVORABLE TO HEREIN PETITIONERS, APPLICABLE JURISPRUDENCE BUT ALSO ITS OWN DECISIONS AND THAT OF THIS HONORABLE HIGHEST TRIBUNAL WHICH [WAS] TANTAMOUNT NOT ONLY TO THE DEPRIVATION OF PETITIONERS' RIGHT TO DUE PROCESS BUT WOULD RESULT [IN] MANIFEST INJUSTICE. II WHETHER OR NOT THE PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION WHEN IT DEPRIVED THE PETITIONERS OF THEIR CONSTITUTIONAL RIGHT TO SELFORGANIZATION, SECURITY OF TENURE, PROTECTION TO LABOR, JUST AND HUMANE CONDITIONS OF WORK AND DUE PROCESS. III WHETHER OR NOT THE PETITIONERS WERE ILLEGALLY EASED OUT [OF] OR CONSTRUCTIVELY DISMISSED FROM THEIR ONLY MEANS OF LIVELIHOOD. IV WHETHER OR NOT PETITIONERS SHOULD BE REINSTATED FROM THE DATE OF THEIR DISMISSAL UP TO THE TIME OF THEIR REINSTATEMENT, WITH BACKWAGES, STATUTORY BENEFITS, DAMAGES AND ATTORNEY'S FEES. 7 We required respondents to file their respective Comments.

In their Manifestation and Comment, private respondents asserted that the petition was filed out of time. As petitioners admitted in their Notice to File Petition for Review on Certiorari that they received a copy of the resolution (denying their motion for reconsideration) on 13 December 1995, they had only until 29 December 1995 to file the petition. Having failed to do so, the NLRC thus already entered judgment in private respondents' favor. In their Reply, petitioners averred that Mr. Navarro, a non-lawyer who filed the notice to file a petition for review on their behalf, mistook which reglementary period to apply. Instead of using the "reasonable time" criterion for certiorari under Rule 65, he used the 15-day period for petitions for review on certiorari under Rule 45. They hastened to add that such was a mere technicality which should not bar their petition from being decided on the merits in furtherance of substantial justice, especially considering that respondents neither denied nor contradicted the facts and issues raised in the petition. In its Manifestation and Motion in Lieu of Comment, the Office of the Solicitor General (OSG) sided with petitioners. It pointed out that the Labor Arbiter, in finding that petitioners abandoned their jobs, relied solely on the testimony of Security Guard Rolando Cairo that petitioners refused to work on 21 January 1991, resulting in the spoilage of cheese curls ready for repacking. However, the OSG argued, this refusal to report for work for a single day did not constitute abandonment, which pertains to a clear, deliberate and unjustified refusal to resume employment, and not mere absence. In fact, the OSG stressed, two days after allegedly abandoning their work, petitioners filed a complaint for, inter alia, illegal lockout or illegal dismissal. Finally, the OSG questioned the lack of explanation on the part of Labor Arbiter Santos as to why he abandoned his original decision to reinstate petitioners. In view of the stand of the OSG, we resolved to require the NLRC to file its own Comment. In its Comment, the NLRC invokes the general rule that factual findings of an administrative agency bind a reviewing court and asserts that this case does not fall under the exceptions. The NLRC further argues that grave abuse of discretion may not be imputed to it, as it affirmed the factual findings and legal conclusions of the Labor Arbiter only after carefully

reviewing, weighing and evaluating the evidence in support thereof, as well as the pertinent provisions of law and jurisprudence. In their Reply, petitioners claim that the decisions of the NLRC and the Labor Arbiter were not supported by substantial evidence; that abandonment was not proved; and that much credit was given to self-serving statements of Gonzalo Kehyeng, owner of Empire Foods, as to payment of just wages. On 7 July 1997, we gave due course to the petition and required the parties to file their respective memoranda. However, only petitioners and private respondents filed their memoranda, with the NLRC merely adopting its Comment as its Memorandum. We find for petitioners. Invocation of the general rule that factual findings of the NLRC bind this Court is unavailing under the circumstances. Initially, we are unable to discern any compelling reason justifying the Labor Arbiter's volte face from his 14 April 1992 decision reinstating petitioners to his diametrically opposed 27 July 1994 decision, when in both instances, he had before him substantially the same evidence. Neither do we find the 29 March 1995 NLRC resolution to have sufficiently discussed the facts so as to comply with the standard of substantial evidence. For one thing, the NLRC confessed its reluctance to inquire into the veracity of the Labor Arbiter's factual findings, staunchly declaring that it was "not about to substitute [its] judgment on matters that are within the province of the trier of facts." Yet, in the 21 July 1992 NLRC resolution, 8 it chastised the Labor Arbiter for his errors both in judgment and procedure; for which reason it remanded the records of the case to the Labor Arbiter for compliance with the pronouncements therein. What cannot escape from our attention is that the Labor Arbiter did not heed the observations and pronouncements of the NLRC in its resolution of 21 July 1992, neither did he understand the purpose of the remand of the records to him. In said resolution, the NLRC summarized the grounds for the appeal to be:
1. that there is a prima facie evidence of abuse of discretion and acts of gross incompetence committed by the Labor Arbiter in rendering the decision. 2. that the Labor Arbiter in rendering the decision committed serious errors in the findings of facts.

After which, the NLRC observed and found:

Complainant alleged that the Labor Arbiter disregarded the testimonies of the 99 complainants who submitted their Consolidated Affidavit of Merit and Position Paper which was adopted as direct testimonies during the hearing and cross-examined by respondents' counsel. The Labor Arbiter, through his decision, noted that ". . . complainant did not present any single witness while respondent presented four (4) witnesses in the persons of Gonzalo Kehyeng, Orlando Cairo, Evelyn Kehyeng and Elvira Bulagan . . ." (Records, p. 183), that ". . . complainant before the National Labor Relations Commission must prove with definiteness and clarity the offense charged. . . ." (Record, p. 183; that ". . . complainant failed to specify under what provision of the Labor Code particularly Art. 248 did respondents violate so as to constitute unfair labor practice . . ." (Record, p. 183); that "complainants failed to present any witness who may describe in what manner respondents have committed unfair labor practice . . ." (Record, p. 185); that ". . . complainant a [sic] LCP failed to present anyone of the so called 99 complainants in order to testify who committed the threats and intimidation . . ." (Record, p.185). Upon review of the minutes of the proceedings on record, however, it appears that complainant presented witnesses, namely BENIGNO NAVARRO, JR. (28 February 1991, RECORD, p. 91; 8 March 1991, RECORD, p. 92), who adopted its POSITION PAPER AND CONSOLIDATED AFFIDAVIT as Exhibit A and the annexes thereto as Exhibit B, B-1 to B-9, inclusive. Minutes of the proceedings on record show that complainant further presented other witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD, p. 93; LOURDES PANTILLO, MARIFE PINLAC, LENI GARCIA (16 April 1991, Record, p. 96, see back portion thereof; 2 May 1991, Record, p.

102; 16 May 1991, Record, p. 103; 11 June 1991, Record, p. 105). Formal offer of Documentary and Testimonial Evidence was made by the complainant on June 24, 1991 (Record, p.106-109). The Labor Arbiter must have overlooked the testimonies of some of the individual complainants which are now on record. Other individual complainants should have been summoned with the end in view of receiving their testimonies. The complainants should [have been] afforded the time and opportunity to fully substantiate their claims against the respondents. Judgment should [have been] rendered only based on the conflicting positions of the parties. The Labor Arbiter is called upon to consider and pass upon the issues of fact and law raised by the parties. Toward this end, therefore, it is Our considered view the case should be remanded to the Labor Arbiter of origin for further proceedings. Further, We take note that the decision does not contain a dispositive portion or fallo. Such being the case, it may be well said that the decision does not resolve the issues at hand. On another plane, there is no portion of the decision which could be carried out by way of execution. It may be argued that the last paragraph of the decision may be categorized as the dispositive portion thereof: xxx xxx xxx The undersigned Labor Arbiter is not oblivious [to] the fact that respondents have violated a cardinal rule in every establishment that a payroll and other papers evidencing hour[s] of work, payment, etc. shall always be maintained and subjected to inspection and visitation by personnel of the Department of Labor and Employment. As such penalty, respondents should not escape liability for this technicality, hence, it is proper that all the individual complainants except those who resigned and executed quitclaim[s] and release[s] prior to the filing of this complaint should be reinstated to their former position with the admonition to respondents that any harassment, intimidation, coercion or any form of threat as a result of this immediately executory reinstatement shall be dealt with accordingly. SO ORDERED. It is Our considered view that even assuming arguendo that the respondents failed to maintain their payroll and other papers evidencing hours of work, payment etc., such circumstance, standing alone, does not warrant the directive to reinstate complainants to their former positions. It is [a] well settled rule that there must be a finding of illegal dismissal before reinstatement be mandated. In this regard, the LABOR ARBITER is hereby directed to include in his clarificatory decision, after receiving evidence, considering and resolving the same, the requisite dispositive portion. 9

Apparently, the Labor Arbiter perceived that if not for petitioners, he would not have fallen victim to this stinging rebuke at the hands of the NLRC. Thus does it appear to us that the Labor Arbiter, in concluding in his 27 July 1994 Decision that petitioners abandoned their work, was moved by, at worst, spite, or at best, lackadaisically glossed over petitioner's evidence. On this score, we find the following observations of the OSG most persuasive:
In finding that petitioner employees abandoned their work, the Labor Arbiter and the NLRC relied on the testimony of Security Guard Rolando Cairo that on January 21, 1991, petitioners refused to work. As a result of their failure to work, the cheese curls ready for repacking on said date were spoiled. The failure to work for one day, which resulted in the spoilage of cheese curls does not amount to abandonment of work. In fact two (2) days after the reported abandonment of work or on January 23, 1991, petitioners filed a complaint for, among others, unfair labor practice, illegal lockout and/or illegal dismissal. In several cases, this Honorable Court held that "one could not possibly abandon his work and shortly thereafter vigorously pursue his complaint for illegal dismissal (De Ysasi III v. NLRC, 231 SCRA 173; Ranara v. NLRC, 212 SCRA 631; Dagupan Bus Co. v. NLRC, 191 SCRA 328; Atlas Consolidated Mining and Development Corp. v. NLRC, 190 SCRA 505; Hua Bee Shirt Factory v. NLRC, 186 SCRA 586; Mabaylan v. NLRC, 203 SCRA 570 and Flexo Manufacturing v. NLRC, 135 SCRA 145). In Atlas Consolidated, supra, this Honorable Court explicitly stated:

It would be illogical for Caballo, to abandon his work and then immediately file an action seeking for his reinstatement. We can not believe that Caballo, who had worked for Atlas for two years and ten months, would simply walk away from his job unmindful of the consequence of his act . i.e. the forfeiture of his accrued employment benefits. In opting to finally to [sic] contest the legality of his dismissal instead of just claiming his separation pay and other benefits , which he actually did but which proved to be futile after all, ably supports his sincere intention to return to work, thus negating Atlas' stand that he had abandoned his job. In De Ysasi III v. NLRC (supra), this Honorable Court stressed that it is the clear, deliberate and unjustified refusal to resume employment and not mere absence that constitutes abandonment. The absence of petitioner employees for one day on January 21, 1991 as testified [to] by Security Guard Orlando Cairo did not constitute abandonment. In his first decision, Labor Arbiter Santos expressly directed the reinstatement of the petitioner employees and admonished the private respondents that "any harassment, intimidation, coercion or any form of threat as a result of this immediately executory reinstatement shall be dealt with accordingly. In his second decision, Labor Arbiter Santos did not state why he was abandoning his previous decision directing the reinstatement of petitioner employees. By directing in his first decision the reinstatement of petitioner employees, the Labor Arbiter impliedly held that they did not abandon their work but were not allowed to work without just cause. That petitioner employees are "pakyao" or piece workers does not imply that they are not regular employees entitled to reinstatement. Private respondent Empire Food Products, Inc. is a food and fruit processing company. In Tabas v. California Manufacturing Co., Inc. (169 SCRA 497), this Honorable Court held that the work of merchandisers of processed food, who coordinate with grocery stores and other outlets for the sale of the processed food is necessary in the day-to-day operation[s] of the company. With more reason, the work of processed food repackers is necessary in the day-to-day operation[s] of respondent Empire Food Products. 10

It may likewise be stressed that the burden of proving the existence of just cause for dismissing an employee, such as abandonment, rests on the employer, 11 a burden private respondents failed to discharge. Private respondents, moreover, in considering petitioners' employment to have been terminated by abandonment, violated their rights to security of tenure and constitutional right to due process in not even serving them with a written notice of such termination. 12 Section 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code provides:
Sec. 2. Notice of Dismissal Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal. In cases of abandonment of work, the notice shall be served at the worker's last known address.

Petitioners are therefore entitled to reinstatement with full back wages pursuant to Article 279 of the Labor Code, as amended by R.A. No. 6715. Nevertheless, the records disclose that taking into account the number of employees involved, the length of time that has lapsed since their dismissal, and the perceptible resentment and enmity between petitioners and private respondents which necessarily strained their relationship, reinstatement would be impractical and hardly promotive of the best interests of the parties. In lieu of reinstatement then, separation pay at the rate of one month for every year of service, with a fraction of at least six (6) months of service considered as one (1) year, is in order. 13 That being said, the amount of back wages to which each petitioner is entitled, however, cannot be fully settled at this time. Petitioners, as piece-rate workers having been paid by the piece, 14 there is need to determine the varying degrees of production and days worked by each worker. Clearly, this issue is best left to the National Labor Relations Commission.

As to the other benefits, namely, holiday pay, premium pay, 13th month pay and service incentive leave which the labor arbiter failed to rule on but which petitioners prayed for in their complaint, 15 we hold that petitioners are so entitled to these benefits. Three (3) factors lead us to conclude that petitioners, although piece-rate workers, were regular employees of private respondents. First, as to the nature of petitioners' tasks, their job of repacking snack food was necessary or desirable in the usual business of private respondents, who were engaged in the manufacture and selling of such food products; second, petitioners worked for private respondents throughout the year, their employment not having been dependent on a specific project or season; and third, the length of time 16 that petitioners worked for private respondents. Thus, while petitioners' mode of compensation was on a "per piece basis," the status and nature of their employment was that of regular employees. The Rules Implementing the Labor Code exclude certain employees from receiving benefits such as nighttime pay, holiday pay, service incentive leave 17 and 13th month pay, 18 inter alia, "field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof." Plainly, petitioners as piece-rate workers do not fall within this group. As mentioned earlier, not only did petitioners labor under the control of private respondents as their employer, likewise did petitioners toil throughout the year with the fulfillment of their quota as supposed basis for compensation. Further, in Section 8 (b), Rule IV, Book III which we quote hereunder, piece workers are specifically mentioned as being entitled to holiday pay.
Sec. 8. Holiday pay of certain employees. (b) Where a covered employee is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday: Provided, however, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.

In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law, in view of the modifications to P.D. No. 851 19 by Memorandum Order No. 28, clearly exclude the employer of piece rate workers from those exempted from paying 13th month pay, to wit: 2. EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851: d. Employers of those who are paid on purely commission, boundary or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers . (emphasis supplied)

The Revised Guidelines as well as the Rules and Regulations identify those workers who fall under the piece-rate category as those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. 20 As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I, Book III of the Implementing Rules, workers who are paid by results including those who are paid on piece-work, takay, pakiao, or task basis, if their output rates are in accordance with the standards prescribed under Sec. 8, Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary of Labor in accordance with the aforesaid section, are not entitled to receive overtime pay. Here, private respondents did not allege adherence to the standards set forth in Sec. 8 nor with the rates prescribed by the Secretary of Labor. As

such, petitioners are beyond the ambit of exempted persons and are therefore entitled to overtime pay. Once more, the National Labor Relations Commission would be in a better position to determine the exact amounts owed petitioners, if any. As to the claim that private respondents violated petitioners' right to self-organization, the evidence on record does not support this claim. Petitioners relied almost entirely on documentary evidence which, per se, did not prove any wrongdoing on private respondents' part. For example, petitioners presented their complaint 21 to prove the violation of labor laws committed by private respondents. The complaint, however, is merely "the pleading alleging the plaintiff's cause or causes of action." 22 Its contents are merely allegations, the verity of which shall have to be proved during the trial. They likewise offered their Consolidated Affidavit of Merit and Position Paper 23 which, like the offer of their Complaint, was a tautological exercise, and did not help nor prove their cause. In like manner, the petition for certification election 24 and the subsequent order of certification 25 merely proved that petitioners sought and acquired the status of bargaining agent for all rank-and-file employees. Finally, the existence of the memorandum of agreement 26 offered to substantiate private respondents' non-compliance therewith, did not prove either compliance or non-compliance, absent evidence of concrete, overt acts in contravention of the provisions of the memorandum. IN VIEW WHEREOF, the instant petition is hereby GRANTED. The Resolution of the National Labor Relations Commission of 29 March 1995 and the Decision of the Labor Arbiter of 27 July 1994 in NLRC Case No. RAB-III-01-1964-91 are hereby SET ASIDE, and another is hereby rendered:
1. DECLARING petitioners to have been illegally dismissed by private respondents, thus entitled to full back wages and other privileges, and separation pay in lieu of reinstatement at the rate of one month's salary for every year of service with a fraction of six months of service considered as one year; 2. REMANDING the records of this case to the National Labor Relations Commission for its determination of the back wages and other benefits and separation pay, taking into account the foregoing observations; and 3. DIRECTING the National Labor Relations Commission to resolve the referred issues within sixty (60) days from its receipt of a copy of this decision and of the records of the case and to submit to this Court a report of its compliance hereof within ten (10) days from the rendition of its resolution.

Costs against private respondents. SO ORDERED. [G.R. No. 129315. October 2, 2000] OSIAS I. CORPORAL, SR., PEDRO TOLENTINO, MANUEL CAPARAS, ELPIDIO LACAP, SIMPLICIO PEDELOS, PATRICIA NAS, and TERESITA FLORES, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LAO ENTENG COMPANY, INC. and/or TRINIDAD LAO ONG, respondents. DECISION
QUISUMBING, J.:

This special civil action for certiorari seeks the review of the Resolution dated October 17, 1996 of public respondent National Labor Relations Commission (First Division),[1] in NLRC NCR Case No. 00-04-03163-95, and the Resolution dated March 5, 1997 denying the motion for reconsideration. The aforecited October 17th Resolution affirmed the Decision dated September 28, 1996 of Labor Arbiter Potenciano S. Caizares dismissing the petitioners' complaint for illegal dismissal and declaring that

petitioners are not regular employees of private respondent Lao Enteng Company, Inc.. The records of the case show that the five male petitioners, namely, Osias I. Corporal, Sr., Pedro Tolentino, Manuel Caparas, Elpidio Lacap, and Simplicio Pedelos worked as barbers, while the two female petitioners, Teresita Flores and Patricia Nas worked as manicurists in New Look Barber Shop located at 651 P. Paterno Street, Quiapo, Manila owned by private respondent Lao Enteng Co. Inc.. Petitioner Nas alleged that she also worked as watcher and marketer of private respondent. Petitioners claim that at the start of their employment with the New Look Barber Shop, it was a single proprietorship owned and managed by Mr. Vicente Lao. In or about January 1982, the children of Vicente Lao organized a corporation which was registered with the Securities and Exchange Commission as Lao Enteng Co. Inc. with Trinidad Ong as President of the said corporation. Upon its incorporation, the respondent company took over the assets, equipment, and properties of the New Look Barber Shop and continued the business. All the petitioners were allowed to continue working with the new company until April 15, 1995 when respondent Trinidad Ong informed them that the building wherein the New Look Barber Shop was located had been sold and that their services were no longer needed.[2] On April 28, 1995, petitioners filed with the Arbitration Branch of the NLRC, a complaint for illegal dismissal, illegal deduction, separation pay, non-payment of 13th month pay, and salary differentials. Only petitioner Nas asked for payment of salary differentials as she alleged that she was paid a daily wage of P25.00 throughout her period of employment. The petitioners also sought the refund of the P1.00 that the respondent company collected from each of them daily as salary of the sweeper of the barber shop. Private respondent in its position paper averred that the petitioners were joint venture partners and were receiving fifty percent commission of the amount charged to customers. Thus, there was no employeremployee relationship between them and petitioners. And assuming arguendo, that there was an employer-employee relationship, still petitioners are not entitled to separation pay because the cessation of operations of the barber shop was due to serious business losses. Respondent Trinidad Lao Ong, President of respondent Lao Enteng Co. Inc., specifically stated in her affidavit dated September 06, 1995 that Lao Enteng Company, Inc. did not take over the management of the New Look Barber Shop, that after the death Lao Enteng petitioner were verbally informed time and again that the partnership may fold up anytime because nobody in the family had the time to be at the barber shop to look after their interest; that New Look Barber Shop had always been a joint venture partnership and the operation and management of the barber shop was left entirely to petitioners; that her father's contribution to the joint venture included the place of business, payment for utilities including electricity, water, etc. while petitioners as industrial partners, supplied the labor; and that the barber shop was allowed to remain open up to April 1995 by the children because they wanted to give the partners a chance at making it work. Eventually, they were forced to close the barber shop because they continued to lose money while petitioners earned from it. Trinidad also added that private respondents had no control over petitioners who were free to come and go as they wished. Admittedly too by petitioners they received fifty percent to sixty percent of the gross paid by customers. Trinidad explained that some of the petitioners were allowed to register with the Social Security System as employees of Lao Enteng Company, Inc. only as an act of accommodation. All the SSS contributions were made by petitioners. Moreover, Osias Corporal, Elpidio Lacap and Teresita Flores were not among those registered with the Social Security System. Lastly, Trinidad avers that without any employee-employer relationship petitioners claim for 13th month pay and separation pay have no basis in fact and in law.[3] In a Decision dated September 28, 1995, Labor Arbiter Potenciano S. Caizares, Jr. ordered the dismissal of the complaint on the basis of his findings that the complainants and the respondents were engaged in a joint venture and that there existed no employer-employee relation between them. The Labor Arbiter also found that the barber shop was closed due to serious business losses or financial reverses and consequently declared that the law does not compel the establishment to pay separation pay to whoever were its employees.[4]

On appeal, NLRC affirmed the said findings of the Labor Arbiter and dismissed the complaint for want of merit, ratiocinating thus: Indeed, complainants failed to show the existence of employer-employee relationship under the fourway test established by the Supreme Court. It is a common practice in the Barber Shop industry that barbers supply their own scissors and razors and they split their earnings with the owner of the barber shop. The only capital of the owner is the place of work whereas the barbers provide the skill and expertise in servicing customers. The only control exercised by the owner of the barber shop is to ascertain the number of customers serviced by the barber in order to determine the sharing of profits. The barbers maybe characterized as independent contractors because they are under the control of the barber shop owner only with respect to the result of the work, but not with respect to the details or manner of performance. The barbers are engaged in an independent calling requiring special skills available to the public at large.[5] Its motion for reconsideration denied in the Resolution[6] dated March 5, 1997, petitioners filed the instant petition assigning that the NLRC committed grave abuse of discretion in: I. ARBITRARILY DISREGARDING SUBSTANTIAL EVIDENCE PROVING THAT PETITIONERS WERE EMPLOYEES OF RESPONDENT COMPANY IN RULING THAT PETITIONERS WERE INDEPENDENT CONTRACTORS. II. NOT HOLDING THAT PETITIONERS WERE ILLEGALLY DISMISSED AND IN NOT AWARDING THEIR MONEY CLAIMS.[7] Petitioners principally argue that public respondent NLRC gravely erred in declaring that the petitioners were independent contractors. They contend that they were employees of the respondent company and cannot be considered as independent contractors because they did not carry on an independent business. They did not cut hair, manicure, and do their work in their own manner and method. They insist they were not free from the control and direction of private respondents in all matters, and their services were engaged by the respondent company to attend to its customers in its barber shop. Petitioners also stated that, individually or collectively, they do not have substantial capital nor investments in tools, equipments, work premises and other materials necessary in the conduct of the barber shop. What the barbers owned were merely combs, scissors, and razors, while the manicurists owned only nail cutters, nail polishes, nippers and cuticle removers. By no standard can these be considered "substantial capital" necessary to operate a barbers shop. Finally, petitioners fault the NLRC for arbitrarily disregarding substantial evidence on record showing that petitioners Pedro Tolentino, Manuel Caparas, Simplicio Pedelos, and Patricia Nas were registered with the Social Security System as regular employees of the respondent company. The SSS employment records in common show that the employer's ID No. of Vicente Lao/Barber and Pawn Shop was 03-0606200-1 and that of the respondent company was 03-8740074-7. All the foregoing entries in the SSS employment records were painstakingly detailed by the petitioners in their position paper and in their memorandum appeal but were arbitrarily ignored first by the Labor Arbiter and then by the respondent NLRC which did not even mention said employment records in its questioned decision. We found petition is impressed with merit. In our view, this case is an exception to the general rule that findings of facts of the NLRC are to be accorded respect and finality on appeal. We have long settled that this Court will not uphold erroneous conclusions unsupported by substantial evidence.[8] We must also stress that where the findings of the NLRC contradict those of the labor arbiter, the Court, in the exercise of its equity jurisdiction, may look into the records of the case and reexamine the questioned findings.[9] The issues raised by petitioners boil down to whether or not an employer-employee relationship existed between petitioners and private respondent Lao Enteng Company, Inc. The Labor Arbiter has concluded that the petitioners and respondent company were engaged in a joint venture. The NLRC concluded that the petitioners were independent contractors.

The Labor Arbiter's findings that the parties were engaged in a joint venture is unsupported by any documentary evidence. It should be noted that aside from the self-serving affidavit of Trinidad Lao Ong, there were no other evidentiary documents, nor written partnership agreements presented. We have ruled that even the sharing of proceeds for every job of petitioners in the barber shop does not mean they were not employees of the respondent company.[10] Petitioner aver that NLRC was wrong when it concluded that petitioners were independent contractors simply because they supplied their own working implements, shared in the earnings of the barber shop with the owner and chose the manner of performing their work. They stressed that as far as the result of their work was concerned the barber shop owner controlled them. An independent contractor is one who undertakes "job contracting", i.e., a person who (a) carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof, and (b) has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business.[11] Juxtaposing this provision vis--vis the facts of this case, we are convinced that petitioners are not "independent contractors". They did not carry on an independent business. Neither did they undertake cutting hair and manicuring nails, on their own as their responsibility, and in their own manner and method. The services of the petitioners were engaged by the respondent company to attend to the needs of its customers in its barber shop. More importantly, the petitioners, individually or collectively, did not have a substantial capital or investment in the form of tools, equipment, work premises and other materials which are necessary in the conduct of the business of the respondent company. What the petitioners owned were only combs, scissors, razors, nail cutters, nail polishes, the nippers - nothing else. By no standard can these be considered substantial capital necessary to operate a barber shop. From the records, it can be gleaned that petitioners were not given work assignments in any place other than at the work premises of the New Look Barber Shop owned by the respondent company. Also, petitioners were required to observe rules and regulations of the respondent company pertaining, among other things, observance of daily attendance, job performance, and regularity of job output. The nature of work performed by were clearly directly related to private respondent's business of operating barber shops. Respondent company did not dispute that it owned and operated three (3) barber shops. Hence, petitioners were not independent contractors. Did an employee-employer relationship exist between petitioners and private respondent? The following elements must be present for an employer-employee relationship to exist: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker's conduct, with the latter assuming primacy in the overall consideration. Records of the case show that the late Vicente Lao engaged the services of the petitioners to work as barbers and manicurists in the New Look Barber Shop, then a single proprietorship owned by him; that in January 1982, his children organized a corporation which they registered with the Securities and Exchange Commission as Lao Enteng Company, Inc.; that upon its incorporation, it took over the assets, equipment, and properties of the New Look Barber Shop and continued the business; that the respondent company retained the services of all the petitioners and continuously paid their wages. Clearly, all three elements exist in petitioners' and private respondent's working arrangements. Private respondent claims it had no control over petitioners. The power to control refers to the existence of the power and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the performance of duties of the employee. It is enough that the employer has the right to wield that power.[12] As to the "control test", the following facts indubitably reveal that respondent company wielded control over the work performance of petitioners, in that: (1) they worked in the barber shop owned and operated by the respondents; (2) they were required to report daily and observe definite hours of work; (3) they were not free to accept other employment elsewhere but devoted their full time working in the New Look Barber Shop for all the fifteen (15) years they have worked until April 15, 1995; (4) that some have worked with respondents as early as in the 1960's; (5) that petitioner Patricia Nas was instructed by the respondents to watch the other six (6)

petitioners in their daily task. Certainly, respondent company was clothed with the power to dismiss any or all of them for just and valid cause. Petitioners were unarguably performing work necessary and desirable in the business of the respondent company. While it is no longer true that membership to SSS is predicated on the existence of an employeeemployer relationship since the policy is now to encourage even the self-employed dressmakers, manicurists and jeepney drivers to become SSS members, we could not agree with private respondents that petitioners were registered with the Social Security System as their employees only as an accommodation. As we have earlier mentioned private respondent showed no proof to their claim that petitioners were the ones who solely paid all SSS contributions. It is unlikely that respondents would report certain persons as their workers, pay their SSS premium as well as their wages if it were not true that they were indeed their employees.[13] Finally, we agree with the labor arbiter that there was sufficient evidence that the barber shop was closed due to serious business losses and respondent company closed its barber shop because the building where the barber shop was located was sold. An employer may adopt policies or changes or adjustments in its operations to insure profit to itself or protect investment of its stockholders. In the exercise of such management prerogative, the employer may merge or consolidate its business with another, or sell or dispose all or substantially all of its assets and properties which may bring about the dismissal or termination of its employees in the process.[14] Prescinding from the above, we hold that the seven petitioners are employees of the private respondent company; as such, they are to be accorded the benefits provided under the Labor Code, specifically Article 283 which mandates the grant of separation pay in case of closure or cessation of employer's business which is equivalent to one (1) month pay for every year of service.[15] Likewise, they are entitled to the protection of minimum wage statutes. Hence, the separation pay due them may be computed on the basis of the minimum wage prevailing at the time their services were terminated by the respondent company. The same is true with respect to the 13th month pay. The Revised Guidelines on the Implementation of the 13th Month Pay Law states that "all rank and file employees are now entitled to a 13th month pay regardless of the amount of basic salary that they receive in a month. Such employees are entitled to the benefit regardless of their designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one (1) month during a calendar year" and so all the seven (7) petitioners who were not paid their 13th month pay must be paid accordingly.[16] Anent the other claims of the petitioners, such as the P10,000.00 as penalty for non-compliance with procedural process; P10,000.00 as moral damages; refund of P1.00 per day paid to the sweeper; salary differentials for petitioner Nas; attorney's fees), we find them without basis. IN VIEW WHEREOF, the petition is GRANTED. The public respondent's Decision dated October 17, 1996 and Resolution dated March 05, 1997 are SET ASIDE. Private respondents are hereby ordered to pay, severally and jointly, the seven (7) petitioners their (1) 13th month pay and (2) separation pay equivalent to one month pay for every year of service, to be computed at the then prevailing minimum wage at the time of their actual termination which was April 15, 1995. Costs against private respondents. SO ORDERED. G.R. No. 112574 October 8, 1998 MERCIDAR FISHING CORPORATION represented by its President DOMINGO B. NAVAL, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and FERMIN AGAO, JR., respondents.

MENDOZA, J.: This is a petition for certiorari to set aside the decision, dated August 30, 1993, of the National Labor Relations Commission dismissing the appeal of petitioner Mercidar Fishing Corporation from the decision of the Labor Arbiter in NLRC NCR Case No. 09-05084-90, as well as the resolution dated October 25, 1993, of the NLRC denying reconsideration. This case originated from a complaint filed on September 20, 1990 by private respondent Fermin Agao, Jr. against petitioner for illegal dismissal, violation of P.D. No. 851, and nonpayment of five days service incentive leave for 1990. Private respondent had been employed as a "bodegero" or ship's quartermaster on February 12, 1988. He complained that he had been constructively dismissed by petitioner when the latter refused him assignments aboard its boats after he had reported to work on May 28, 1990. 1 Private respondent alleged that he had been sick and thus allowed to go on leave without pay for one month from April 28, 1990 but that when he reported to work at the end of such period with a health clearance, he was told to come back another time as he could not be reinstated immediately. Thereafter, petitioner refused to give him work. For this reason, private respondent asked for a certificate of employment from petitioner on September 6, 1990. However, when he came back for the certificate on September 10, petitioner refused to issue the certificate unless he submitted his resignation. Since private respondent refused to submit such letter unless he was given separation pay, petitioner prevented him from entering the premises. 2 Petitioner, on the other hand, alleged that it was private respondent who actually abandoned his work. It claimed that the latter failed to report for work after his leave had expired and was, in fact, absent without leave for three months until August 28, 1998. Petitioner further claims that, nonetheless, it assigned private respondent to another vessel, but the latter was left behind on September 1, 1990. Thereafter, private respondent asked for a certificate of employment on September 6 on the pretext that he was applying to another fishing company. On September 10, 1990, he refused to get the certificate and resign unless he was given separation pay. 3 On February 18, 1992, Labor Arbiter Arthur L. Amansec rendered a decision disposing of the case as follows:
ACCORDINGLY, respondents are ordered to reinstate complainant with backwages, pay him his 13th month pay and incentive leave pay for 1990. All other claims are dismissed. SO ORDERED.

Petitioner appealed to the NLRC which, on August 30, 1993, dismissed the appeal for lack of merit. The NLRC dismissed petitioner's claim that it cannot be held liable for service incentive leave pay by fishermen in its employ as the latter supposedly are "field personnel" and thus not entitled to such pay under the Labor Code. 4 The NLRC likewise denied petitioner's motion for reconsideration of its decision in its order dated October 25, 1993. Hence, this petition. Petitioner contends:
I THE RESPONDENT COMMISSION PALPABLY ERRED IN RULING AND SUSTAINING THE VIEW THAT FISHING CREW MEMBERS. LIKE FERMIN AGAO, JR., CANNOT BE CLASSIFIED AS FIELD PERSONNEL UNDER ARTICLE 82 OF THE LABOR CODE.

II THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT UPHELD THE FINDINGS OF THE LABOR ARBITER THAT HEREIN PETITIONER HAD CONSTRUCTIVELY DISMISSED FERMIN AGAO, JR., FROM EMPLOYMENT.

The petition has no merit. Art. 82 of the Labor Code provides:

Art. 82. Coverage. The provisions of this Title [Working Conditions and Rest Periods] shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. xxx xxx xxx "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.

Petitioner argues essentially that since the work of private respondent is performed away from its principal place of business, it has no way of verifying his actual hours of work on the vessel. It contends that private respondent and other fishermen in its employ should be classified as "field personnel" who have no statutory right to service incentive leave pay. In the case of Union of Pilipro Employees (UFE) v. Vicar, 5 this Court explained the meaning of the phrase "whose actual hours of work in the field cannot be determined with reasonable certainty" in Art. 82 of the Labor Code, as follows:
Moreover, the requirement that "actual hours of work in the field cannot be determined with reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules which provides: Rule IV Holidays with Pay Sec. 1. Coverage This rule shall apply to all employees except: xxx xxx xxx (e) Field personnel and other employees whose time and performance is unsupervised by the employer . . . (Emphasis supplied). While contending that such rule added another element not found in the law ( Rollo, p. 13), the petitioner nevertheless attempted to show that its affected members are not covered by the abovementioned rule. The petitioner asserts that the company's sales personnel are strictly supervised as shown by the SOD (Supervisor of the Day) schedule and the company circular dated March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55). Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add another element to the Labor Code definition of field personnel. The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty." The former clause is still within the scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an employee's actual working hours in the field can be determined with reasonable certainty, query must be made as to whether or not such employee's time and performance is constantly supervised by the employer. 6

Accordingly, it was held in the aforementioned case that salesmen of Nestle Philippines, Inc. were field personnel:

It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported to the office and come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makatibased. The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the sales personnel's working hours which can be determined with reasonable certainty. The Court does not agree. The law requires that the actual hours of work in the field be reasonably ascertained. The company has no way of determining whether or not these sales personnel, even if they report to the office before 8:00 a.m. prior to field work and come back at 4:30 p.m., really spend the hours in between in actual field work. 7

In contrast, in the case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner have no choice but to remain on board its vessel. Although they perform non-agricultural work away from petitioner's business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of petitioner through the vessel's patron or master as the NLRC correctly held. 8 Neither did petitioner gravely abuse its discretion in ruling that private respondent had constructively been dismissed by petitioner. Such factual finding of both the NLRC and the Labor Arbiter is based not only on the pleadings of the parties but also on a medical certificate of fitness which, contrary to petitioner's claim private respondent presented when he reported to work on May 28, 1990. 9 As the NLRC held:
Anent grounds (a) and (b) of the appeal, the respondent, in a nutshell, would like us to believe that the Arbiter abused his discretion (or seriously erred in his findings of facts) in giving credence to the factual version of the complainant. But it is settled that "(W)hen confronted with conflicting versions of factual matters," the Labor Arbiter has the "discretion to determine which party deserves credence on the basis of evidence received." [Gelmart Industries (Phils.), Inc. vs. Leogardo, 155 SCRA 403, 309, L-70544, November 5, 1987]. And besides, it is settled in this jurisdiction that "to constitute abandonment of position, there must be concurrence of the intention to abandon and some overt acts from which it may be inferred that the employee concerned has no more interest in working" (Dagupan Bus Co., Inc. vs. NLRC, 191 SCRA 328), and that the filing of the complaint which asked for reinstatement plus backwages (Record, p. 20) is inconsistent with respondents' defense of abandonment (Hua Bee Shirt Factory vs. NLRC, 188 SCRA 586). 10

It is trite to say that the factual findings of quasi-judicial bodies are generally binding as long as they are supported substantially by evidence in the record of the case. 11 This is especially so where, as here, the agency and its subordinate who heard the case in the first instance are in full agreement as to the facts. 12 As regards the labor arbiter's award which was affirmed by respondent NLRC, there is no reason to apply the rule that reinstatement may not be ordered if, as a result of the case between the parties, their relation is strained. 13 Even at this late stage of this dispute, petitioner continues to reiterate its offer to reinstate private respondent. 14 WHEREFORE, the petition is DISMISSED. SO ORDERED.
G.R. No. 126529 April 15, 1998 EDUARDO B. PRANGAN, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), MASAGANA SECURITY SERVICES CORPORATION, and/or VICTOR C. PADILLA, respondents.

ROMERO, J.:

Private respondent, a corporation engaged in providing security services to its client, hired petitioner on November 4, 1980 as one of its security guards. Thereafter, he was assigned to the Cat House Bar and Restaurant with a monthly salary of P2,000.00 until its closure on August 31, 1993. On May 4, 1994, petitioner filed a complaint 1 against private respondent for underpayment of wages, nonpayment of salary from August 16-31, 1993, overtime pay, premium pay for holiday, rest day, night shift differential, uniform allowance, service incentive leave pay and 13th month pay from the year 1990 to 1993. Private respondent, in its position paper, 2 rejected petitioner's claim alleging it merely acted as an agent of the latter in securing his employment at the Cat House Bar and Restaurant. Thus, the liability for the claims of the petitioner should be charged to Cat House Bar and its owner, being his direct employer. In resolving the dispute in a decision dated May 31, 1995, 3 the Labor Arbiter brushed aside the private respondent's contention that it was merely an agent of the petitioner and concluded:
WHEREFORE, PREMISES CONSIDERED, respondents MASAGANA SECURITY SERVICE CORPORATION and/or VICTOR C. PADILLA are hereby ORDERED to pay within ten (10) days from receipt hereof herein complainant EDUARDO B. PRANGAN, the total sum of Nine Thousand Nine Hundred Thirty Two Pesos & Sixteen Centavos (P9,932.16) premium pay for holiday and rest days, night shift differential, service incentive leave pay, 13th month pay, uniform allowance, and unpaid salary. Complainant's other claims as well as respondents' counter claim are hereby DISMISSED either for the reason of prescription and/or lack of merit. SO ORDERED.

Apparently not satisfied with the above-mentioned monetary award, petitioner appealed to the National Labor Relations Commission (NLRC) contending that the Labor Arbiter erred in concluding that he only worked for four hours and not twelve hours a day. Evidently, the shorter work hours resulted in a lower monetary award by the Labor Arbiter. However, the NLRC dismissed his appeal for failure to file the same within ten-day reglementary period. 4 Undaunted, petitioner failed a motion for reconsideration which, in the "interest of justice," was favorably granted by the NLRC resulting in the reinstatement of his appeal. Nonetheless, petitioner's victory was short-lived as the NLRC eventually dismissed his appeal for lack of merit, 5 the dispositive portion of the decision reads:
WHEREFORE, the appeal is hereby dismissed for lack of merit and decision is affirmed in toto. SO ORDERED.

Petitioner is now before us imputing grave abuse of discretion on the part of respondent NLRC (a) declaring that he rendered only four hours and not twelve hours of work, and (b) affirming the monetary award. The public respondent, through the Solicitor General, and the private respondent filed their respective comments on the petition refuting the allegation of the petitioner. Specifically, they asserted that the decision was supported by ample evidence showing that petitioner indeed worked for only four hours and not twelve hours a day. A review of the alleged error raised by the instant petition leads us to conclude that the same is factual in nature which, as a rule, we do not pass upon. As a general rule, it is not for us to correct the NLRC's evaluation of the evidence, as our task is confined to issues of jurisdiction or grave abuse of discretion. 6 Obviously, however, the same will not apply where the evidence requires a reversal or modification. 7 As proof of petitioner's actual hours of work, private respondent submitted the daily time records allegedly signed by the petitioner himself showing that he only worked four hours daily. In contrast, petitioner argues that these daily time records were falsified for the simple reason that he was not required to submit one. He further stressed that, assuming such documents exist, its authenticity and due execution are questionable and of doubtful source. We find merit in the petition. To be sure, findings of fact of quasi-judicial bodies like the NLRC, particularly when they coincide with those of the Labor Arbiter, are accorded with respect even finality if supported by substantial evidence. 8 In this regard, we have defined substantial evidence as such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. 9 Absent such quantum of evidence, the Court is not precluded from making its own independent evaluation of facts. 10 In the instant case, there is no dispute that matters concerning an employee's actual hours of work are within the ambit of management prerogative. However, when an employer alleges that his employee work less than the

normal hours of employment as provided for in the law, 11 he bears the burden of proving his allegation with clear and satisfactory evidence. In the instant petition, the NLRC, in declaring that petitioner only worked for four hours, relied solely on the supposed daily time records of the petitioner submitted by the private respondent. 12 We, however, are of the opinion that these documents cannot be considered substantial evidence as to conclude that petitioner only worked for four hours. It is worth mentioning that petitioner, in his Sur-Rejoinder to Respondents' Rejoinder, 13 unequivocally stated that:
Complainant (petitioner herein) never made nor submitted any daily time record with respondent company considering the fact that he was assigned to a single post and that the daily time records he allegedly submitted with respondent company are all falsified and his signature appearing therein forged.

Private respondent hardly bothered to controvert petitioner's assertion, much less bolster its own contention. As petitioner's employer, private respondent has unlimited access to all relevant documents and records on the hours of work of the petitioner. Yet, even as it insists that petitioner only worked for four hours and not twelve, no employment contract, payroll, notice of assignment or posting, cash voucher or any other convincing evidence which may attest to the actual hours of work of the petitioner was even presented. Instead, what the private respondent offered as evidence was only petitioner's daily time record, which the latter categorically denied ever accomplishing, much less signing. In said alleged daily time record, it showed that petitioner started work at 10:00 p.m. and would invariably leave his post at exactly 2:00 a.m. Obviously, such unvarying recording of a daily time record is improbable and contrary to human experience. It is impossible for an employee to arrive at the workplace and leave at exactly the same time, day in day out. The very uniformity and regularity of the entries are "badges of untruthfulness and as such indices of dubiety. 14 Another consideration which militates against private respondent's claim is the fact that in the personnel data sheet of the petitioner, 15 duly signed by the former's operation manager, it shows on its face that the latter's hours of work are from 7:00 p.m. to 7:00 a.m. or twelve hours a day. Hence, private respondent is estopped from assailing the contents of its own documents. Further, the attendance sheets of Cat House Bar and Restaurant 16 showed that petitioner worked from 7:00 p.m. to 7:00 a.m. daily, documents which were never repudiated by the private respondent. All told, private respondent has not adequately proved that petitioner's actual hours of work is only four hours. Its unexplained silence contravening the personnel data sheet and the attendance sheets of Cat House Bar and Restaurant presented by the petitioner showing he worked for twelve hours, has assumed the character of an admission. No reason was proffered for this silence despite private respondent, being the employer, could have easily done so. As is well-settled, if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the employee. Since 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 writings should he resolved in the former's favor. 17 WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED. Accordingly, the decision of the NLRC dated July 31, 1996 is hereby VACATED. Whatever money claims due to the petitioner shall be computed on the basis of a twelve-hour daily work schedule. For this purpose, the case is hereby REMANDED to the Labor Arbiter for immediate recomputation of said claims in accordance with the foregoing findings. No costs. SO ORDERED.