2005 REVISED RULES OF PROCEDURE OF

THE NLRC EFFECTIVE JANUARY 7, 2006

LARKINS vs. NLRC G.R. No. 2!"2
F#$%&'%( 2", )5
FACTS* Petitioner was a member of the
US Air Force assigned to oversee the
dormitories of the Third Aircraft Generation
Squadron (3 AGS) at Car! Air "ase# Pam$anga%
3 AGS terminated the contract for the
maintenance of the dorms with &e Gu'man
Custodia Services% The em$o(ees# incuding
$rivate res$ondents# were aowed to continue
wor!ing for 3 AGS% )t was eft to the new
contractor# the *AC +aintenance Services
owned b( *oseito Cunanan# to decide whether
it woud retain their services# however# the
atter chose to bring in his own wor!ers% Private
res$ondents ,ed a com$aint with the -egiona
Arbitration "ranch of the ./-C against
$etitioner# /t% Co% Fran!hauser# and Cunanan
for iega dismissa# under$a(ment of wages#
caims for emergenc( cost of iving aowance#
thirteenth0month $a(# service incentive eave
$a( and hoida( $remiums% Cunanan was
dro$$ed as $art( res$ondent% Petitioner and /t%
Co% Fran!hauser faied to answer the com$aint
and to a$$ear at the hearings% The( aso faied
to submit their $osition $a$er# which the /abor
Arbiter deemed a waiver on their $art% The case
was submitted for decision on the basis of
$rivate res$ondents1 $osition $a$er and
su$$orting documents%
2n .ovember 34# 4566# the /abor
Arbiter granted a the caims of $rivate
res$ondents ,nding both Fran!hauser and
$etitioner 7guit( of iega dismissa7 and
ordered them to reinstate $rivate res$ondents
with fu bac! wages# or to $a( their se$aration
$a(%
Petitioner aeges that she never
received nor was served# an( summons or
co$ies of the origina and amended com$aints#
and therefore the /abor Arbiter had no
8urisdiction over her $erson under Artice 9): of
the -%P% ; U%S% +iitar( "ases Agreement% ./-C
issued a -esoution a<rming the decision of
the /abor Arbiter# whie the Soicitor Genera
disagreed%
ISSUE* =hether or not the questioned
resoutions are nu and void because
res$ondent /abor Arbiter did not acquire
8urisdiction to entertain and decide the case%
HELD* The /abor Arbiter did not acquire
8urisdiction over the $etitioner%
The 7Agreement between the -e$ubic
of the Phii$$ines and the United States of
America Concerning +iitar( "ases#7 otherwise
!nown as the -%P% U%S% +iitar( "ases
Agreement# governed the rights# duties#
authorit(# and the e>ercise thereof b(
Phii$$ine and American nationas inside the
U%S% miitar( bases in the countr(% Artice 9):
$rovides that .o $rocess# civi or crimina# sha
be served within an( base e>ce$t with the
$ermission of the commanding o<cer of such
base? but shoud the commanding o<cer refuse
to grant such $ermission he sha forthwith ta!e
the necessar( ste$s to serve such $rocess# and
to $rovide the attendance of the server of such
$rocess before the a$$ro$riate court in the
Phii$$ines or $rocure such server to ma!e the
necessar( a<davit or decaration to $rove such
service as the case ma( require%
Summonses and other $rocesses issued
b( Phii$$ine courts and administrative
agencies for United States Armed Forces
$ersonne within an( U%S% base in the
Phii$$ines coud be served therein on( with
the $ermission of the "ase Commander% )f he
withhods giving his $ermission# he shoud
designate another $erson to serve the $rocess#
and obtain the server1s a<davit for ,ing with
the a$$ro$riate court%
The /abor Arbiter did not foow said
$rocedure? instead# addressed the summons to
/t% Co% Fran!hauser and not the "ase
Commander% -es$ondents do not dis$ute
$etitioner1s caim that no summons was ever
issued and served on her# however# the( sent
notices of the hearings to her% .otices of
hearing are not summonses% The $rovisions and
$revaiing 8uris$rudence in Civi Procedure ma(
be a$$ied b( anaog( to ./-C $roceedings
(-evised -ues of the ./-C# -ue )# Sec% 3)% )t is
basic that the /abor Arbiter cannot acquire
8urisdiction over the $erson of the res$ondent
without the atter being served with summons%
)n the absence of service of summons or a vaid
waiver thereof# the hearings and 8udgment
rendered b( the /abor Arbiter are nu and void%
Petitioner a$$eaed to the ./-C and
$artici$ated in the ora argument before the
said bod(# however this does not constitute a
waiver of the ac! of summons and a vountar(
submission of her $erson to the 8urisdiction of
the /abor Arbiter% She ma( have raised grounds
other than ac! of 8urisdiction# but these
grounds were discussed in reation to and as a
resut of the issue of the ac! of 8urisdiction% )n
e@ect# $etitioner set forth on( one issue and
that is the absence of 8urisdiction over her
$erson% )f an a$$earance before the ./-C is
$recise( to question the 8urisdiction of the said
agenc( over the $erson of the defendant# then
this a$$earance is not equivaent to service of
summons%
UER+,+#-o%.'/ +#0.1'/ C#23#% vs. NLRC
G.R. No. ))0!) +'%14 ", )7
FACTS* 2n 4A &ecember 456B -e$ubic
Act .o% CCAD too! e@ect which mandated a ten
(P4D%DD) $eso increase on the $revaiing dai(
minimum wage of PEA%DD% )n a$$(ing said aw#
the $etitioners granted saar( increases to their
em$o(ees based on the foowing com$utation#
to witF
4% To members of the facut( who are
non0union members# P3DA%4B $er
month?
3% To ran!0and0,e em$o(ees (individua
com$ainants who are union members)#
P3D5%4B $er month%
There was a di@erence of P5E%DD in the
saaries of the two casses of em$o(ees%
Private res$ondents who are ran! and ,e
em$o(ees demanded $a(ment of the
di@erence% "efore the $arties coud sette their
dis$ute# -e$ubic Act .o% CB3B too! e@ect on 4
*u( 4565 which again increased the dai(
minimum wage in the $rivate sector (whether
agricutura or non0agricutura) b( P3E%DD% )n
com$iance# $etitioners $aid their em$o(ees
4
using the foowing com$utation# to witF
4% To members of the facut( who are
non0union members# PBCD%A3 a month?
and
3% To ran!0and0,e em$o(ees (individua
com$ainants who are union members)#
PE33%DD a month%
Again# there was a di@erence of P33B%A3
$er month between the saaries of union
members and non0union members% )n
Se$tember 456B# $etitioners increased the
hiring rate of the new em$o(ees to P466%DD
$er month% Private res$ondents once more
demanded from the $etitioners $a(ment of the
saar( di@erentia mandated b( -A .o% CB3B
and correction of the wage distortion brought
about b( the increase in the hiring rate of new
em$o(ees%
2n 43 A$ri 4566# Poic( )nstruction .o%
EA was issued b( the then Secretar( of /abor
Fran!in &rion# the $ertinent $rovision of which
readsF
% % % the $ersonne in sub8ect hos$itas
and cinics are entited to a fu wee!(
wage of seven da(s if the( have
com$eted the AD0hourGE0da( wor!wee!
in an( given wor!wee!%
A enforcement and ad8udicator(
agencies of this &e$artment sha be
guided b( this issuance in the
dis$osition of cases invoving the
$ersonne of covered hos$itas and
cinics%
Petitioners chaenged the vaidit( of
said Poic( )nstruction and refused to $a( the
saaries of the $rivate res$ondents for
Saturda(s and Sunda(s% Consequent(# a
com$aint was ,ed b( the $rivate res$ondents#
re$resented b( the Federation of Free =or!ers
(FF=)# caiming saar( di@erentias under
-e$ubic Act .os% CCAD and CB3B# correction of
the wage distortion and the $a(ment of saaries
for Saturda(s and Sunda(s under Poic(
)nstruction .o% EA% =ithin the regementar(
$eriod for a$$ea# the $etitioners ,ed their
.otice and +emorandum of A$$ea with a -ea
Hstate "ond consisting of and and various
im$rovements therein worth P4D3#3AE#CED%

The
$rivate res$ondents moved to dismiss the
a$$ea on the ground that Artice 333 of the
/abor Code# as amended# requires the $osting
of a cash or suret( bond% The ./-C directed
$etitioners to $ost a cash or suret( bond of
P4B#D63#AA6%EC with a warning that faiure to
do so woud cause the dismissa of the a$$ea%
The $etitioners ,ed a +otion for
-econsideration aeging it is not in a viabe
,nancia condition to $ost a cash bond nor to
$a( the annua $remium of PBDD#DDD%DD for a
suret( bond% 2n C 2ctober 4553# the ./-C
dismissed $etitioners1 a$$ea%
The SC rued a ibera inter$retation to
this $rovision% )n YBL (Your Bus Line) v% NLRC
% % % that whie Artice 333 of the
/abor Code# as amended b(
-e$ubic Act .o% CB4E# requiring
a cash or suret( bond in the
amount equivaent to the
monetar( award in the 8udgment
a$$eaed from for the a$$ea to
be $erfected# ma( be considered
a 8urisdictiona requirement#
nevertheess# adhering to the
$rinci$e that substantia 8ustice
is better served b( aowing the
a$$ea on the merits threshed
out b( the ./-C# the Court ,nds
and so hods that the foregoing
requirement of the aw shoud be
given a ibera inter$retation%
in Oriental Mindoro Electric Cooperative,
Inc% v% National Labor Relations Commission

The intention of the
awma!ers to ma!e the bond an
indis$ensabe requisite for the
$erfection of an a$$ea b( the
em$o(er is underscored b( the
$rovision that an a$$ea b( the
em$o(er ma( be $erfected 7on(
u$on the $osting of a cash or
suret( bond%7 The word 7on(7
ma!es it $erfect( cear# that the
awma!ers intended the $osting
of a cash or suret( bond b( the
em$o(er to be the e>cusive
means b( which an em$o(er1s
a$$ea ma( be $erfected% The
requirement is intended to
discourage em$o(ers from using
an a$$ea to dea(# or even
evade# their obigation to satisf(
their em$o(ees1 8ust and awfu
caims%
Considering# however# that the current
$oic( is not to strict( foow technica rues but
rather to ta!e into account the s$irit and
intention of the /abor Code# it woud be
$rudent for us to oo! into the merits of the
case# es$ecia( since $etitioner dis$utes the
aegation that $rivate res$ondent was iega(
dismissed%
The SC reiterates the $oic( which
stresses the im$ortance of deciding cases on
the basis of their substantive merit and not on
strict technica rues% )n the case at bar# the
8udgment invoved is more than P4B miion and
its $reci$itate e>ecution can adverse( a@ect
the e>istence of $etitioner medica center%
/i!ewise# the issues invoved are not
insigni,cant and the( deserve a fu discourse
b( our quasi08udicia and 8udicia authorities% =e
are aso con,dent that the rea $ro$ert( bond
$osted b( the $etitioners su<cient( $rotects
the interests of $rivate res$ondents shoud
the( ,na( $revai% )t is not dis$uted that the
rea $ro$ert( o@ered b( $etitioners is worth
P4D3#3AE#CED% The 8udgment in favor of $rivate
res$ondent is on( a itte more than P4B
miion%
P4./3%'21o S#%v.1# E23#%5%.s#s, I21. vs.
NLRC
G.R. No. )2!)00 A5%./ ), )6
FACTS* .ieva was em$o(ed as a driver
b( $etitioner assigned to the /egas$i Cit(0
Pasa( Cit( route% .ieva sideswi$ed an owner0
t($e 8ee$ and a crimina com$aint was ,ed
against him% Phitranco $osted a bai bond for
.ieva% After having been sus$ended# he was
tod to wait unti his case was setted% The case
was ,na( setted he was requested to ,e a
new a$$ication as he was no onger considered
an em$o(ee of Phitranco# aeged( for being
absent without eave from 2ctober 45 to
.ovember 3D# 4565%
.ieva ,ed a com$aint for iega
3
dismissa and demanded for 43
th
month $a(
with the ./-CIs .ationa Ca$ita -egion
Arbitration "ranch in +ania% Phitranco ,ed a
motion to dismiss on the ground of im$ro$er
venue# stating that the com$aint shoud have
been odged with the ./-CIs -egiona
Arbitration "ranch in /egas$i Cit(# not on(
because .ieva was a resident thereof# but aso
because the atter was hired# assigned# and
based in /egas$i Cit(%
ISSUE* =hether or not ./-CIs .C-
Arbitration "ranch in +ania was a $ro$er
venue for the ,ing of .ievaIs com$aints for
iega dismissa
HELD* The ,ing of the com$aint with the
.ationa Ca$ita -egion Arbitration "ranch was
$ro$er# +ania being considered as $art of
.ievaIs wor!$ace b( reason of his $(ing the
/egas$i Cit(0Pasa( Cit( route% )n fact# Section
4(a)# -ue ): of the .ew -ues of Procedure of
the ./-C is mere( $ermissive% Provisions on
venue are intended to assure convenience for
the em$o(ee and his witnesses and to
$romote the ends of 8ustice $rovided that it is
not o$$ressive to the em$o(er%
S3. +'%3.2 F&2#%'/ Ho-# vs. NLRC
G.R. No. )"0666 S#53#-$#% )6, )6
FACTS* Private res$ondent aeges that
he started wor!ing as 2$erations +anager of
$etitioner St% +artin Funera Jome on Februar(
C# 455E% Petitioner on the other hand caims
that $rivate res$ondent was not its em$o(ee
but on( the unce of Ameita +aabed# the
owner of $etitioner St% +artin1s Funera Jome%
=hen the mother of Ameita $assed awa(# the
atter then too! over the management of the
business and made some changes in the
business o$eration and $rivate res$ondent and
his wife were no onger aowed to $artici$ate in
the management thereof% As a consequence#
the atter ,ed a com$aint charging that
$etitioner had iega( terminated his
em$o(ment%

The abor arbiter rendered a decision in
favor of $etitioner decaring that no em$o(er0
em$o(ee reationshi$ e>isted between the
$arties and# therefore# his o<ce had no
8urisdiction over the case%
2n *une 43# 455B# the ./-C rendered a
resoution setting aside the questioned decision
and remanding the case to the abor arbiter for
immediate a$$ro$riate $roceedings%

Petitioner
then ,ed a motion for reconsideration which
was denied b( the ./-C in its resoution dated
August 46# 455B for ac! of merit
ISSUE* =hether or not the Court has the
$ower to review decisions of the ./-C%
HELD* =hen the issue was raised in an
ear( case on the argument that this Court has
no 8urisdiction to review the decisions of the
./-C# and former( of the Secretar( of /abor#
since there is no ega $rovision for a$$eate
review thereof# the Court nevertheess re8ected
that thesis% )t hed that there is an under(ing
$ower of the courts to scrutini'e the acts of
such agencies on questions of aw and
8urisdiction even though no right of review is
given b( statute? that the $ur$ose of 8udicia
review is to !ee$ the administrative agenc(
within its 8urisdiction and $rotect the
substantia rights of the $arties? and that it is
that $art of the chec!s and baances which
restricts the se$aration of $owers and forestas
arbitrar( and un8ust ad8udications%
Pursuant to such ruing# and as
sanctioned b( subsequent decisions of this
Court# the remed( of the aggrieved $art( is to
time( ,e a motion for reconsideration as a
$recondition for an( further or subsequent
remed(# and then seasonab( avai of the
s$ecia civi action of certiorari under -ue CE#
for which said -ue has now ,>ed the
regementar( $eriod of si>t( da(s from notice
of the decision% Curious(# athough the 4D0da(
$eriod for ,nait( of the decision of the ./-C
ma( aread( have a$sed as contem$ated in
Section 333 of the /abor Code# it has been hed
that this Court ma( sti ta!e cogni'ance of the
$etition for certiorari on 8urisdictiona and due
$rocess considerations if ,ed within the
regementar( $eriod under -ue CE%
Sec% 5% Jurisdiction% The Court of
A$$eas sha e>erciseF (3) H>cusive a$$eate
8urisdiction over a ,na 8udgments# decisions#
resoutions# orders or awards of -egiona Tria
Courts and quasi08udicia agencies#
instrumentaities# boards or commissions#
incuding the Securities and H>change
Commission# the Socia Securit( Commission#
the Hm$o(ees Com$ensation Commission and
the Civi Service Commission# e>ce$t those
faing within the a$$eate 8urisdiction of the
Su$reme Court in accordance with the
Constitution# the /abor Code of the Phii$$ines
under Presidentia &ecree .o% AA3# as
amended# the $rovisions of this Act# and of
sub$aragra$h (4) of the third $aragra$h and
sub$aragra$h (A) of the fourth $aragra$h of
Section 4B of the *udiciar( Act of 45A6%
Under the foregoing $remises# the
instant $etition for certiorari is hereb(
-H+A.&H&# and a $ertinent records thereof
ordered to be F2-=A-&H&# to the Court of
A$$eas for a$$ro$riate action and dis$osition
consistent with the views and ruing herein set
forth# without $ronouncement as to costs%
LUDO 7 LUY+ CORPORATION VS
SAORNIDO
G.R. No. )!060. J'2&'%( 20, 200"
FACTS* /U&2 engaged the arrastre
services of Cresencio /u Arrastre Services
(C/AS) for the oading and unoading of its
,nished $roducts at the wharf% According(#
severa arrastre wor!ers were de$o(ed b(
C/AS to $erform the services needed b( /U&2%
These arrastre wor!ers were subsequent(
hired# on di@erent dates# as reguar ran!0and0
,e em$o(ees of /U&2 ever( time the atter
needed additiona man$ower services% Said
em$o(ees thereafter 8oined res$ondent union#
the /U&2 Hm$o(ees Union (/HU)# which acted
as the e>cusive bargaining agent of the ran!0
and0,e em$o(ees% -es$ondent union entered
into a coective bargaining agreement with
/U&2 which $rovides certain bene,ts to the
em$o(ees# the amount of which var(
according to the ength of service rendered b(
the avaiing em$o(ee% Thereafter# the union
3
requested /U&2 to incude in its members
$eriod of service the time during which the(
rendered arrastre services to /U&2 through the
C/AS so that the( coud get higher bene,ts%
/U&2 faied to act on the request% Thus# the
matter was submitted for vountar( arbitration%
:ountar( Arbitrator rued thatF (4) the
res$ondent em$o(ees were engaged in
activities necessar( and desirabe to the
business of $etitioner# and (3) C/AS is a abor0
on( contractor of $etitioner% The Court of
A$$eas a<rmed in toto the decision of the
:ountar( Arbitrator% Petitioner contends that
the a$$eate court erred when it u$hed the
award of bene,ts which were be(ond the terms
of submission agreement and that the
arbitrator must con,ne its ad8udication to those
issues submitted b( the $arties for arbitration#
which in this case is the soe issue of the date
of reguari'ation of the wor!ers% Jence# the
award of bene,ts b( the arbitrator was done in
e>cess of 8urisdiction%
ISSUE* =hether or not the a$$eate
court grave( erred when it u$hed the award of
bene,ts which were be(ond the terms of
submission agreement%
HELD* Genera(# the arbitrator is e>$ected to
decide on( those questions e>$ress(
deineated b( the submission agreement%
.evertheess# the arbitrator can assume that
he has the necessar( $ower to ma!e a ,na
settement since arbitration is the ,na resort
for the ad8udication of dis$utes%
43
The succinct
reasoning enunciated b( the CA in su$$ort of
its hoding# that the :ountar( Arbitrator in a
abor controvers( has 8urisdiction to render the
questioned arbitra awards# deserves our
concurrence# thusF )n genera# the arbitrator is
e>$ected to decide those questions e>$ress(
stated and imited in the submission
agreement% Jowever# since arbitration is the
,na resort for the ad8udication of dis$utes# the
arbitrator can assume that he has the $ower to
ma!e a ,na settement% Thus# assuming that
the submission em$owers the arbitrator to
decide whether an em$o(ee was discharged
for 8ust cause# the arbitrator in this instance
can reasonabe assume that his $owers
e>tended be(ond giving a (es0or0no answer
and incuded the $ower to reinstate him with or
without bac! $a(%
H'28.2 E29.2##%.29 '20 Co2s3%&13.o2 Co.
L30. vs. Co&%3 o: A55#'/s G.R. No.
)65)0 A5%./ )0, 2006
F'13s* Jan8in is a construction com$an( that
had been contracted b( the Phii$$ine
Government for the construction of various
foreign0,nanced $ro8ects% Jan8in and the
Phii$$ine Government entered into contracts
for the construction of the +ainao &am at Piar#
"oho# with a $ro8ected com$etion $eriod of
4#DED caendar da(s# incuding main cana and
atera $ro8ects for BED da(s% From August
455E to August 455C# Jan8in contracted the
services of B43 car$enters# masons# truc!
drivers# he$ers# aborers# heav( equi$ment
o$erators# eadmen# engineers# steemen#
mechanics# eectricians and others%
)n A$ri 4556# B43 em$o(ees ,ed
com$aints for iega dismissa and for $a(ment
of bene,ts against $etitioners# before the
./-C% The com$ainants averred that the( were
reguar em$o(ees of Jan8in and that the( were
se$arated from em$o(ment without an( awfu
or 8ust cause% 2n( E34 of the com$ainants
a<>ed their signatures in the com$aints%
Petitioners aeged that the
com$ainants were mere $ro8ect em$o(ees in
its "oho )rrigation Pro8ect and that 3 of the
wore!ers were charged with quai,ed theft
before the -TC% Some of the com$ainants had
aread( migrated to USA or had died# whie 44B
of them were sti under the em$o( of Jan8in%
Petitioner stated that some of the com$ainants
had vountari( resigned? 4A were absent
without $rior a$$roved eave? 4E had signed a
+otion to =ithdraw from the com$aint? and
man( of the com$ainants were se$arated on
account of the com$etion of the $ro8ect%
Jowever# $etitioners faied to a$$end an(
document to su$$ort their caim%
/abor Arbiter rendered 8udgment in
favor of the A36 com$ainants# granting
se$aration $a( and attorne(1s fees to each of
them stating that the com$ainants were
reguar em$o(ees of $etitioner and their
caims for under$a(ment# hoida( $a(#
$remium $a( for hoida( and rest da(# 43th
month $a(# and service incentive eave woud
be com$uted after su<cient data were made
avaiabe%
Petitioners a$$eaed the decision to the
./-C# which a<rmed with modi,cation the
/abor Arbiter1s ruing% Petitioners ,ed a +otion
for the -econsideration of the decision (with a
motion to conduct cari,cator( hearings)
Petitioners a$$ended to their motion
machine co$ies of some of the com$ainants1
em$o(ment contracts# resignation etters of
others who were given monetar( awards in the
decision# and 44 foders consisting most( of
$a(ros%
./-C $artia( granted $etitioners1
motion% Unsatis,ed# $etitioners ,ed a Petition
for Certiorari under -ue CE of the -evised
-ues of Court in the CA% CA dismissed the
$etition and a<rmed the ./-C1s ruing that the
dismissed em$o(ees were reguar em$o(ees%
The CA stressed that $etitioners faied to refute
the caim of the res$ondents that the( were
reguar em$o(ees% Petitioners moved to
reconsider the decision# which the CA denied%
ISSUE* =hether or not res$ondents are
$ro8ect em$o(ees%
HELD* =hie res$ondent aeged that
7com$ainants a signed a contract of
em$o(ment at the time the( were hired
indicating therein the $articuar $ro8ect the(
wi be wor!ing on# the $eriod and other
conditions $rovided in their contracts which
com$ainants fu( !new and understood#7
nowhere in the records can the said contracts
be found% +oreover# et it be stressed that
under &2 .o% 45# Series of 4553 on $ro8ect
em$o(ment# si> (C) indicators are enumerated
therein and one of which is thatF
7(T)he termination of his
em$o(ment in the $articuar
$ro8ectGunderta!ing is re$orted to the
&e$artment of /abor and Hm$o(ment
(&2/H) -egiona 2<ce having
A
8urisdiction over the wor!$ace within 3D
da(s foowing the date of his se$aration
from wor! > > >%7
)n this $articuar case# the records do
not show that a simiar re$ort was ever made
b( res$ondent to the &e$artment of /abor and
Hm$o(ment% Such faiure of res$ondent
em$o(er to re$ort to the nearest em$o(ment
o<ce of the &e$artment of /abor# the
termination of the wor!ers it caimed as $ro8ect
em$o(ees at the time it com$eted the $ro8ect#
is $roof that com$ainants were not $ro8ect
em$o(ees%
The $rinci$a test for determining
whether $articuar em$o(ees are $ro$er(
characteri'ed as $ro8ect em$o(ees isF whether
or not the $ro8ect em$o(ees were assigned to
carr( out a s$eci,c $ro8ect or underta!ing# the
duration of which were s$eci,ed at the time the
em$o(ees were engaged for that $ro8ect%
Predetermination of the duration or $eriod of
$ro8ect em$o(ment is essentia in resoving
whether one is a $ro8ect em$o(ee or not% )n
the instant case# the com$etion of the $ro8ect
for which the com$ainants were hired was not
determined at the start of their em$o(ment#
there being no substantia $roof thereof% The
fact that com$ainants had rendered more than
one (ear of service at the time of their
dismissa and there being no substantia
evidence to su$$ort that the( were engaged to
wor! on a s$eci,c $ro8ect or underta!ing#
overturns res$ondentIs aegation that
com$ainants were $ro8ect em$o(ees hired for
a s$eci,c ,>ed $ro8ect for a imited $eriod of
time%
Com$ainants herein were# therefore#
non0$ro8ect em$o(ees# but reguar em$o(ees%
Admitted(# being a du( icensed contractor
,rm in the Phii$$ines# res$ondent is the
awardee of severa construction $ro8ects and in
man( occasions it has been given the $riorit( in
the awarding of subsequent $ro8ects%
)n the ight of the above facts and
circumstances# the res$ondent1s main defense
that com$etion of the $ro8ect wor!ed on b( the
com$ainants constitutes a vaid cause of
termination is unsustainabe% To re$eat# there is
no substantia evidence on record to sustain
this contention% The mere aegation of the
res$ondents that under their em$o(ment
contracts the com$ainants were made to
understand that the( were $ro8ect em$o(ees is
de,nite( not $ersuasive or unworth( of
credence% The best evidence of which woud
have been the aeged contracts%
These em$o(ees signed du( notari'ed
waiversGquitcaims and who did not recant ater%
)n the absence of evidence showing the
contrar(# said quitcaims were e>ecuted
vountari( and without an( force or
intimidation%
Petitioners submitted to the ./-C
dubious machine co$ies of on( some of
res$ondents; Contracts# incuding aeged
em$o(ment termination re$orts submitted to
the &2/H% The ./-C found the contracts barren
of $robative weight and utter( insu<cient to
buttress the contention of $etitioners that
res$ondents were on( $ro8ect em$o(ees%
Contrar( to the re$resentation of
res$ondent1s counse# the origina co$ies of the
re$orts made to &2/H were never $roduced
and submitted to this Commission% .either
were the( $resented for com$arison with the
machine co$ies% These machine co$ies were
not aso certi,ed as true co$ies b( the &2/H%
The actua continuous em$o(ment of
com$ainants b( res$ondent Jan8in since 4554
unti 455E overcomes the $iecemea
7a$$ointments7 covering for $eriods of si> (C)
months or ess% From these short term but
re$eated 7a$$ointments#7 it is a$$arent that
the $eriods have been im$osed to $recude the
acquisition of tenuria securit( b( the em$o(ee
and which !ind of em$o(ment contracts shoud
be disregarded for being contrar( to $ubic
$oic(%
The a$$eate court# the ./-C and the
/abor Arbiter are thus one in ,nding that
res$ondents were not $ro8ect em$o(ees# and
in sustaining res$ondents1 caim of iega
dismissa due to $etitioners; faiure to adduce
contrar( evidence% =e0setted is the rue that
,ndings of fact of quasi08udicia agencies# i!e
the ./-C# are accorded not on( res$ect but at
times even ,nait( if such ,ndings are
su$$orted b( substantia evidence% Such
,ndings of facts can on( be set aside u$on
showing of grave abuse of discretion# fraud or
error of aw# none of which have been shown in
this case%
P4./. Jo&%2'/.s3.1 I21. vs. NLRC; G.R. No.
)66!2), S#53#-$#% 05, 2006
F'13s* )n ./-CIs -esoution

dated +a( 34#
3DD4# $etitioner Phii$$ine *ournaists# )nc% (P*))
was ad8udged iabe in the tota amount of
PC#AAB#DD6%EB for iega( dismissing 34
com$ainants0em$o(ees and that there was
no basis for the im$ementation of $etitioner1s
retrenchment $rogram%
Thereafter# the $arties e>ecuted a Com$romise
Agreement

dated *u( 5# 3DD4# where P*)
undertoo! to reinstate the 34 com$ainant0
em$o(ees e@ective *u( 4# 3DD4 without oss of
seniorit( rights and bene,ts? 4B of them who
were $revious( retrenched were agreed to be
given fu and com$ete $a(ment of their
res$ective monetar( caims# whie 4A others
woud be $aid their monetar( caims minus
what the( received b( wa( of se$aration $a(%
The com$romise agreement was submitted to
the ./-C for a$$rova% A the em$o(ees
mentioned in the agreement and in the ./-C
-esoution a<>ed their signatures thereon%
The( i!ewise signed the *oint +anifesto and
&ecaration of +utua Su$$ort and Coo$eration
which had aso been submitted for the
consideration of the abor tribuna%
The ./-C forthwith issued another -esoution
on *u( 3E# 3DD3# which among others decared
that !us, t!e compromise a"reement #as
approved and NCMB$NCR$N%$&'$&()$&& #as
deemed closed and terminated*
)n the meantime# however# the Union ,ed
another .otice of Stri!e on *u( 4# 3DD3% )n an
2rder

dated Se$tember 4C# 3DD3# the &2/H
E
Secretar( certi,ed the case to the Commission
for com$usor( arbitration% The case was
doc!eted as .C+"0.C-0 .S0DB03E40D3%
)n its -esoution

dated *u( 34# 3DD3# the ./-C
rued that the com$ainants were not iega(
dismissed% The +a( 34# 3DD4 -esoution
decaring the retrenchment $rogram iega did
not attain ,nait( as 7it had been academica(
mooted b( the com$romise agreement entered
into between both $arties on *u( 5# 3DD4%7
The Union assaied the ruing of the ./-C
before the CA via $etition for certiorari under
-ue CE%
)n its &ecision dated August 4B# 3DDA# the
a$$eate court hed that the ./-C grave(
abused its discretion in ruing for P*)% The
com$romise agreement referred on( to the
award given b( the ./-C to the com$ainants
in the said case# that is# t!e obli"ation o+ t!e
emplo,er to t!e complainants% The CA $ointed
out that the ./-C -esoution nevertheess
decared that res$ondent faied to $rove the
vaidit( of its retrenchment $rogram# which
according to it# stands even after the
com$romise agreement was e>ecuted? it was
the reason wh( the agreement was reached in
the ,rst $ace%
Iss&#s '20 R&/.29s*
I. <4#34#% o% 2o3 34# 5#3.3.o2#%=s
5#3.3.o2 :o% certiorari &20#% R&/# 65 o:
34# R#v.s#0 R&/#s o: C.v./ P%o1#0&%# .s
' 5%o5#% %#-#0( .2 34.s 1's#.
At the outset# we note that this case was
brought before us via $etition for certiorari
under -ue CE of the -evised -ues of Civi
Procedure% The $ro$er remed(# however# was to
,e a $etition under -ue AE% )t must be
stressed that certiorari under -ue CE is 7a
remed( narrow in sco$e and inKe>ibe in
character% )t is not a genera utiit( too in the
ega wor!sho$%7

+oreover# the s$ecia civi
action for certiorari wi ie on( when a court
has acted without or in e>cess of 8urisdiction or
with grave abuse of discretion%
"e that as it ma(# a $etition for certiorari ma(
be treated as a $etition for review under -ue
AE% Such move is in accordance with the ibera
s$irit $ervading the -ues of Court and in the
interest of substantia 8ustice% As the instant
$etition was ,ed within the $rescribed ,fteen0
da( $eriod# and in view of the substantia
issues raised# the Court resoves to give due
course to the $etition and treat the same as a
$etition for review on certiorari%
II. <4#34#% o% 2o3 34# 34# NLRC o: 34#
'9%##-#23 :o%9#0 $#3>##2 .3 '20 34#
%#s5o20#23 U2.o2 0.0 2o3 %#20#% 34#
NLRC %#so/&3.o2 .2#?#13&'/, 2o%
%#20#%#0 .3 @-oo3 '20 '1'0#-.1.A
Contrar( to the aegation of $etitioners# the
e>ecution and subsequent a$$rova b( the
./-C of the agreement forged between it and
the res$ondent Union did not render the ./-C
resoution ine@ectua# nor rendered it 7moot
and academic%7 The agreement becomes $art
of the 8udgment of the court or tribuna# and as
a ogica consequence# there is an im$icit
waiver of the right to a$$ea%
)n an( event# the com$romise agreement
cannot bind a $art( who did not vountari(
ta!e $art in the settement itsef and gave
s$eci,c individua consent% )t must be
remembered that a com$romise agreement is
aso a contract? it requires the consent of the
$arties# and it is on( then that the agreement
ma( be considered as vountari( entered into%
A carefu $erusa of the wordings of the
com$romise agreement wi show that the
$arties agreed that the on( issue to be
resoved was the question of the monetar(
caim of severa em$o(ees%
The agreement was ater a$$roved b( the
./-C% The case was considered cosed and
terminated and the -esoution dated +a( 34#
3DD4 fu( im$emented insofar as the
em$o(ees 7mentioned in $aragra$hs 3c and
3d of the com$romise agreement7 were
concerned% Jence# the CA was correct in
hoding that the com$romise agreement
$ertained on( to the 7monetar( obigation7 of
the em$o(er to the dismissed em$o(ees# and
in no wa( a@ected the -esoution in .C+"0.C-0
.S0D30D6B0DD dated +a( 34# 3DD4 where the
./-C made the $ronouncement that t!ere #as
no basis +or t!e implementation o+ petitioners-
retrenc!ment pro"ram*
To reiterate# the rue is that when 8udgment is
rendered based on a com$romise agreement#
the 8udgment becomes immediate( e>ecutor(#
t!ere bein" an implied #aiver o+ t!e parties-
ri"!t to appeal +rom t!e decision* The 8udgment
having become ,na# the Court can no onger
reverse# much ess modif( it%
III. <4#34#% o% 2o3 CA 1'2 %#v.#> 34#
:'13&'/ B20.29s o% /#9'/ 1o21/&s.o2s o: 34#
/'$o% 3%.$&2'/.
Petitioners1 argument that the CA is not a trier
of facts is i!ewise erroneous% )n the e>ercise of
its $ower to review decisions b( the ./-C# the
CA can review the factua ,ndings or ega
concusions of the abor tribuna% Thus# the CA
is not $roscribed from 7e>amining evidence
anew to determine whether the factua ,ndings
of the ./-C are su$$orted b( the evidence
$resented and the concusions derived
therefrom accurate( ascertained%7
C'/'93's +&/3.,P&%5os# Coo5#%'3.v#, I21.
vs. Co&%3 o: A55#'/s G.R. No. )5266
O13o$#% 27, 2006
FACTS* "aagtas +uti0Pur$ose
Coo$erative# )nc% is a du( organi'ed and
e>isting coo$erative under the aws of the
Phii$$ines% Sometime in A$ri 4554# "aagtas
hired *ose,na G% Ji$oito0Jerrero# as $art time
manager in its o<ce% Subsequent(# *ose,na
made !nown of her intention to ta!e a eave of
C
absence% Jer $ro$osa was immediate(
a$$roved% Jowever# after the a$se of her eave
of absence# *ose,na did not re$ort for wor!
an(more% /ater on# she ,ed her resignation%
Consequent( *ose,na ,ed a com$aint
with the Provincia 2<ce of the &e$artment of
/abor in +aoos# "uacan for iega dismissa#
and non0$a(ment of 43
th
month $a( or
Christmas "onus% She aso $ra(ed for
reinstatement and $aid bac!wages as we as
mora damages%
The /abor Arbiter rendered 8udgment in favor of
com$ainant and against res$ondents and
ordered the atter to $a( the former 43
th
month
$a(# bac!wages and se$aration $a(%
Aggrieved# herein $etitioners a$$eaed
the decision to ./-C but faied to $ost either a
cash or suret( bond as required b( Artice 333
of the /abor Code% The( ,ed a manifestation
and motion instead# stating# that under
-e$ubic Act .o% C536# Artice C3(B) of the
Coo$erative Code of the Phii$$ines# $etitioners
are e>em$t from $utting u$ a bond in an a$$ea
from the decision of the inferior court%
./-C ordered res$ondents to $ost a
cash or suret( bond in the amount of
P346#DDD%DD# within 4D ine>tendibe da(s from
recei$t of the 2rder# faiure of which sha
constitute a waiver and non0$erfection of the
a$$ea%
"aagtas a$$eaed to CA# which dismissed the
$etition hoding that the e>em$tion from
$utting u$ a bond b( a coo$erative a$$ies to
cases decided b( inferior courts on(%
ISSUES* 4% =hether coo$eratives are
e>em$ted from ,ing a cash or suret( bond
required to $erfect an em$o(erIs a$$ea under
Section 333 of Presidentia &ecree .o% AA3 (the
/abor Code)? and#
3% =hether a certi,cation issued b( the
Coo$erative &eveo$ment Authorit( constitutes
substantia com$iance with the requirement
for the $osting of a bond%
HELD* 4% .o% Petitioners argue that there are
certain bene,ts and $rivieges e>$ress(
granted to coo$erative under the Coo$erative
Code% )t invo!ed the $rovision on Artice C3
regarding the e>em$tion from $a(ment of an
a$$ea bond# to witF
()).ll cooperatives s!all be
e/empt +rom puttin" up a bond +or
brin"in" an appeal a"ainst t!e decision
o+ an in+erior court or +or see0in" to set
aside an, t!ird part, claim1 2rovided,
!at a certi3cation o+ t!e .ut!orit,
s!o#in" t!at t!e net assets o+ t!e
cooperative are in e/cess o+ t!e amount
o+ t!e bond re4uired b, t!e court in
similar cases s!all be accepted b, t!e
court as a su5cient bond*
Jowever# it is on( one among a number
of such $rivieges which a$$ear under the
artice entited LTa> and 2ther H>em$tionsM of
the code% The $rovision cited b( $etitioners
cannot be ta!en in isoation and must be
inter$reted in reation to the Coo$erative Code
in its entiret(% H>ce$tions are to be strict( but
reasonab( construed? the( e>tend on( so far
as their anguage warrants# and a doubts
shoud be resoved in favor of the genera
$rovision rather than the e>ce$tions%
3% .o% Artice 445 of the Coo$erative
Code itsef e>$ress( embodies the egisative
intention to e>tend the coverage of abor
statutes to coo$eratives% For this reason#
$etitioners must com$( with the requirement
set forth in Artice 333 of the /abor Code in
order to $erfect their a$$ea to the ./-C% )t
must be $ointed out that the right to a$$ea is
not a constitutiona# natura or inherent right% )t
is a $riviege of statutor( origin and# therefore#
avaiabe on( if granted or $rovided b( statute%
The aw ma( vaid( $rovide imitations or
quai,cations thereto or reief to the $revaiing
$art( in the event an a$$ea is inter$osed b(
the osing $art(%
)n this case# the obvious and ogica
$ur$ose of an a$$ea bond is to insure# during
the $eriod of a$$ea# against an( occurrence
that woud defeat or diminish recover( b( the
em$o(ee under the 8udgment if the atter is
subsequent( a<rmed%
Therefore# no error can be ascribed to
the CA for hoding that the $hrase Linferior
courtsM a$$earing in Artice C3 $aragra$h (B) of
the Coo$erative Code does not e>tend to
Lquasi08udicia agenciesM and that# $etitioners
are not e>em$t from $osting the a$$ea bond
required under Artice 333 of the /abor Code%
S3. +'%3.2 F&2#%'/ Ho-#s vs. N'3.o2'/
L'$o% R#/'3.o2s Co--.ss.o2 G.R. No.
)!2"5) Nov#-$#% 22, 2006
FACTS* The owner of $etitioner St% +artin
Funera Jomes# )nc% (St% +artin) is Ameita
+aabed% Prior to *anuar( 455C# AmeitaIs
mother managed the funera $aror% )n 455E#
Arica(os was granted ,nancia assistance b(
AmeitaIs mother% As a sign of a$$reciation#
res$ondent e>tended assistance in managing
St% +artin without com$ensation and no written
em$o(ment contract between AmeitaIs
mother and res$ondent Arica(os? furthermore#
res$ondent Arica(os was not even isted as an
em$o(ee in the Com$an(Is $a(ro%
=hen AmeitaIs mother died in *anuar(
455C# Ameita too! over as manager of St%
+artin% +uch to her chagrin# she found out that
St% +artin had arrearages in the $a(ment of ")-
ta>es and other fees owing to the government#
but com$an( records tended to show that
$a(ments were made thereon% As a resut#
Ameita removed the authorit( from res$ondent
Arica(os and his wife from ta!ing $art in
managing St% +artinIs o$erations%
Aggrieved# res$ondent Arica(os accused
St% +artin of his iega dismissa as 2$erations
+anager of the com$an(% Je beieved that the
cause of his termination was AmeitaIs
sus$icion that he $oc!eted PhP 36#DDD%DD
which was set aside for $a(ment to the ")- of
St% +artinIs vaued added ta>es%2n 2ctober 3E#
455C# the /abor Arbiter rendered a &ecision# in
favor of $etitioner decaring that his o<ce had
no 8urisdiction over the case%
./-C issued a -esoution annuing the
ArbiterIs &ecision and remanded the case to
him for a$$ro$riate $roceedings# to determine
the factua issue of the e>istence of em$o(er0
em$o(ee reationshi$ between the $arties%
=hen its motion for reconsideration was
re8ected b( the ./-C# $etitioner ,ed a $etition
B
for certiorari under -ue CE before this Court#
doc!eted as G%-% .o% 43D6CC%
2n Se$tember 4C# 4556# this Court
through *ustice *ose :itug# rendered the
andmar! &ecision in this case then doc!eted
as G%-% .o% 43D6CC# hoding for the ,rst time
that a $etitions for certiorari under -ue CE
assaiing the decisions of the ./-C shoud
henceforth be ,ed with the CA
ISSUE* =hether or not a $etitioner can
,e his $etition for certiorari under -ueCE to
assai the decision of a ower court i!e ./-C%
HELD* A $etition for certiorari under -ueCE
must ,rst be ,ed at the Court of A$$eas% Said
court has a concurrent 8urisdiction on $etitions
for certiorari# mandamus# $rohibitions% This is in
consonance with the hierarch( of courts%
DOLE PHILIPPINES vs. ESTEVA G.R. No.
)6)))5. Nov#-$#% "0, 2006
FACTS* Petitioner is a cor$oration
engaged $rinci$a( in the $roduction and
$rocessing of $inea$$e for the e>$ort mar!et%
-es$ondents are members of the Canner(
+uti0Pur$ose Coo$erative (CA+PC2)% CA+PC2
was organi'ed in accordance with -e$ubic Act
.o% C536# otherwise !nown as the Coo$erative
Code of the Phii$$ines% Pursuant to the Service
Contract# CA+PC2 members rendered services
to $etitioner% The number of CA+PC2
members that re$ort for wor! and the t($e of
service the( $erformed de$ended on the needs
of $etitioner at an( given time% Athough the
Service Contract s$eci,ca( stated that it sha
on( be for a $eriod of si> months# i*e*# from 4
*u( to 34 &ecember 4553# the $arties had
a$$arent( e>tended or renewed the same for
the succeeding (ears without e>ecuting
another written contract% )t was under these
circumstances that res$ondents came to wor!
for $etitioner% &2/H organi'ed a Tas! Force that
conducted an investigation into the aeged
abor0on( contracting activities of the
coo$eratives% The Tas! Force identi,ed si>
coo$eratives that were engaged in abor0on(
contracting# one of which was CA+PC2% )n this
case# res$ondents aeged that the( started
wor!ing for $etitioner at various times in the
(ears 4553 and 455A# b( virtue of the Service
Contract e>ecuted between CA+PC2 and
$etitioner% A of the res$ondents had aread(
rendered more than one (ear of service to
$etitioner% =hie some of the res$ondents were
sti wor!ing for $etitioner# others were $ut on
Lsta( home statusM on var(ing dates in the
(ears 455A# 455E# and 455C and were no
onger furnished with wor! thereafter%
Together# res$ondents ,ed a Com$aint with
the ./-C for iega dismissa# reguari'ation#
wage di@erentias# damages and attorne(Is
fees% Petitioner denied that res$ondents were
its em$o(ees% )t e>$ained that it found the
need to engage e>terna services to augment
its reguar wor!force# which was a@ected b(
$ea!s in o$eration# wor! bac!ogs#
absenteeism# and e>cessive eaves% )t used to
engage the services of individua wor!ers for
de,nite $eriods s$eci,ed in their em$o(ment
contracts and never e>ceeding one (ear%
Jowever# such an arrangement became the
sub8ect of a abor case# in which $etitioner was
accused of $reventing the reguari'ation of
such wor!ers%
ISSUES* =hether or not the court of
a$$eas was correct when it made its own
factua ,ndings and disregarded the factua
,ndings of the abor arbiter and the ./-C%
=hether or not CA+PC2 was a mere
abor0on( contractor%
HELD* The Court in the e>ercise of its equit(
8urisdiction ma( oo! into the records of the
case and re0e>amine the questioned ,ndings%
As a coroar(# this Court is cothed with am$e
authorit( to review matters# even if the( are
not assigned as errors in their a$$ea# if it ,nds
that their consideration is necessar( to arrive
at a 8ust decision of the case% The same
$rinci$es are now necessari( adhered to and
are a$$ied b( the Court of A$$eas in its
e>$anded 8urisdiction over abor cases eevated
through a $etition for certiorari? thus# we see
no error on its $art when it made anew a
factua determination of the matters and on
that basis reversed the ruing of the ./-C%
2n the second issue# CA+PC2 was a
mere abor0on( contractor% 6irst, athough
$etitioner touts the muti0miion $esos assets
of CA+PC2# it does we to remember that such
were amassed in the (ears foowing its
estabishment% )n 4553# when CA+PC2 was
estabished and the Service Contract between
$etitioner and CA+PC2 was entered into#
CA+PC2 on( had PC#CDD%DD $aid0u$ ca$ita#
which coud hard( be considered substantia% )t
on( managed to increase its ca$itai'ation and
assets in the succeeding (ears b( continua(
and de,ant( engaging in what had been
decared b( authori'ed &2/H o<cias as abor0
on( contracting% %econd, CA+PC2 did not carr(
out an inde$endent business from $etitioner% )t
was $recise( estabished to render services to
$etitioner to augment its wor!force during $ea!
seasons% Petitioner was its on( cient% Hven as
CA+PC2 had its own o<ce and o<ce
equi$ment# these were main( used for
administrative $ur$oses? the toos#
machineries# and equi$ment actua( used b(
CA+PC2 members when rendering services to
the $etitioner beonged to the atter% !ird,
$etitioner e>ercised contro over the CA+PC2
members# incuding res$ondents% Petitioner
attem$ts to refute contro b( aeging the
$resence of a CA+PC2 su$ervisor in the wor!
$remises% Net# the mere $resence within the
$remises of a su$ervisor from the coo$erative
did not necessari( mean that CA+PC2 had
contro over its members% Section 6(4)# -ue
:)))# "oo! ))) of the im$ementing rues of the
/abor Code# as amended# required for
$ermissibe 8ob contracting that the contractor
underta!es the contract wor! on his account#
under his own res$onsibiit(# according to his
own manner and method# free from the contro
and direction of his em$o(er or $rinci$a in a
matters connected with the $erformance of the
wor! e>ce$t as to the resuts thereof% As
aeged b( the res$ondents# and unrebutted b(
$etitioner# CA+PC2 members# before wor!ing
for the $etitioner# had to undergo instructions
and $ass the training $rovided b( $etitionerIs
$ersonne% )t was $etitioner who determined
and $re$ared the wor! assignments of the
6
CA+PC2 members% CA+PC2 members wor!ed
within $etitionerIs $antation and $rocessing
$ants aongside reguar em$o(ees $erforming
identica 8obs# a circumstance recogni'ed as an
indicium of a abor0on( contractorshi$% 6ourt!,
CA+PC2 was not engaged to $erform a s$eci,c
and s$ecia 8ob or service% )n the Service
Contract of 4553# CA+PC2 agreed to assist
$etitioner in its dai( o$erations# and $erform
odd 8obs as ma( be assigned% CA+PC2
com$ied with this venture b( assigning
members to $etitioner% A$art from that# no
other $articuar 8ob# wor! or service was
required from CA+PC2# and it is a$$arent# with
such an arrangement# that CA+PC2 mere(
acted as a recruitment agenc( for $etitioner%
Since the underta!ing of CA+PC2 did not
invove the $erformance of a s$eci,c 8ob# but
rather the su$$( of man$ower on(# CA+PC2
cear( conducted itsef as a abor0on(
contractor% Lastl,, CA+PC2 members# incuding
res$ondents# $erformed activities direct(
reated to the $rinci$a business of $etitioner%
The( wor!ed as can $rocessing attendant#
feeder of canned $inea$$e and $inea$$e
$rocessing# nata de coco $rocessing attendant#
fruit coc!tai $rocessing attendant# and etc%#
functions which were# not on( direct( reated#
but were ver( vita to $etitionerIs business of
$roduction and $rocessing of $inea$$e
$roducts for e>$ort%
The decaration that CA+PC2 is indeed
engaged in the $rohibited activities of abor0
on( contracting# then consequent(# an
em$o(er0em$o(ee reationshi$ is deemed to
e>ist between $etitioner and res$ondents#
since CA+PC2 sha be considered as a mere
agent or intermediar( of $etitioner%
Since res$ondents are now recogni'ed
as em$o(ees of $etitioner# this Court is tas!ed
to determine the nature of their em$o(ment%
)n consideration of a the attendant
circumstances in this case# this Court concudes
that res$ondents are reguar em$o(ees of
$etitioner% As such# the( are entited to securit(
of tenure% The( coud on( be removed based
on 8ust and authori'ed causes as $rovided for in
the /abor Code# as amended# and after the(
are accorded $rocedura due $rocess%
Therefore# $etitionerIs acts of $acing some of
the res$ondents on Lsta( home statusM and not
giving them wor! assignments for more than
si> months were aread( tantamount to
constructive and iega dismissa%
INTERCONTINENTAL CROADCASTING CORP
vs. PANGANICAN G.R. No. )5)!07,
F#$%&'%( 06, 2007
FACTS* )reneo Panganiban (res$ondent)
was em$o(ed as Assistant Genera +anager of
the )ntercontinenta "roadcasting Cor$oration
($etitioner) from +a( 456C unti his $reventive
sus$ension on August 3C# 4566% -es$ondent
resigned from his em$o(ment on Se$tember 3#
4566%
2n A$ri 43# 4565# res$ondent ,ed a
civi case with the -TC of Oue'on Cit(# "ranch
53 against the members of the "oard of
Administrators ("2A) of $etitioner aeging#
among others# non0$a(ment of his un$aid
commissions% A motion to dismiss was ,ed b(
*oseito Santiago# one of the defendants# on the
ground of ac! of 8urisdiction# as res$ondent1s
caim was a abor mone( caim# but this was
denied b( the -TC% Thus# Santiago ,ed a
$etition for certiorari with the CA which granted
Santiago1s $etition for ac! of 8urisdiction and
set aside the -TC1s 2rders%
Thereafter# res$ondent was eected b(
the "2A as :ice0President for +ar!eting in *u(
4553% Je resigned in A$ri 4553% 2n *u( 3A#
455C# res$ondent ,ed against $etitioner a
com$aint for iega dismissa# se$aration $a(#
retirement bene,ts# un$aid commissions# and
damages% The /abor Arbiter (/A) ordered
res$ondent1s reinstatement with fu
bac!wages# and the $a(ment of his un$aid
commission# damages and attorne(1s fees%
Petitioner a$$eaed to the ./-C but due to
$etitioner1s faiure to $ost a bond# the a$$ea
was dismissed% The decision was deemed ,na
and e>ecutor(%
ISSUE* =hether or not res$ondent1s
caim for un$aid commissions has aread(
$rescribed%
HELD* Nes% -es$ondent1s caim had aread(
$rescribed as of Se$tember 4554% )n addition#
the caims of $rivate res$ondent for
reinstatement# bac!wages and bene,ts in
con8unction with his em$o(ment from 456C to
4566 have $rescribed%
The a$$icabe aw in this case is Artice
354 of the /abor Code which $rovides that 7a
mone( caims arising from em$o(er0em$o(ee
reations accruing during the e@ectivit( of this
Code sha be ,ed within three (3) (ears from
the time the cause of action accrued? otherwise
the( sha be forever barred%7
The term 7mone( caims7 covers a
mone( caims arising from an em$o(er0
em$o(ee reation the $rescri$tion of an action
is interru$ted b( (a) the ,ing of an action# (b) a
written e>tra8udicia demand b( the creditor#
and (c) a written ac!nowedgment of the debt
b( the debtor%
2n this $oint# the Court rued that
athough the commencement of a civi action
sto$s the running of the statute of $rescri$tion
or imitations# its dismissa or vountar(
abandonment b( $ainti@ eaves the $arties in
e>act( the same $osition as though no action
had been commenced at a% Jence# whie the
,ing of Civi Case coud have interru$ted the
running of the three0(ear $rescri$tive $eriod#
its consequent dismissa b( the CA due to ac!
of 8urisdiction e@ective( canceed the toing of
the $rescri$tive $eriod within which to ,e his
mone( caim# eaving res$ondent in e>act( the
same $osition as though no civi case had been
,ed at a% The running of the three0(ear
$rescri$tive $eriod not having been interru$ted
b( the ,ing of Civi Case res$ondent1s cause of
action had aread( $rescribed on Se$tember 3#
4554# three (ears after his cessation of
em$o(ment on Se$tember 3# 4566%
Consequent(# when res$ondent ,ed his
com$aint for iega dismissa# se$aration $a(#
retirement bene,ts# and damages in *u( 3A#
455C# his caim# cear(# had aread( been
barred b( $rescri$tion%
F'% E's3 A9%.1&/3&%'/ S&55/(, I21. vs.
L#$'3.D&#
5
G.R. No. )626)", F#$%&'%( )2, 2007
FACTS* Petitioner Far Hast Agricutura
Su$$( hired $rivate res$ondent *imm(
/ebatique as truc! driver tas!ed to deiver
anima feeds% 2n *anuar( 3A# 3DDD# /ebatique
com$ained of non0$a(ment of overtime wor!
$articuar( on *anuar( 33# 3DDD# when he was
required to ma!e a second deiver( in
.ovaiches% That same da( /ebatique was
sus$ended a$$arent( for iega use of
com$an( vehice% Je re$orted for wor! the ne>t
da( but was $rohibited from entering the
com$an( $remises%
2n *anuar( 3C# 3DDD# /ebatique sought
assistance concerning the non0$a(ment of his
overtime $a(% According to him# two da(s ater#
he received a teegram from $etitioners
requiring him to re$ort for wor!% Je re$orted
for wor! on *anuar( 35# 3DDD and was as!ed to
e>$ain wh( he was caiming overtime $a(%
/ater# /ebatique was terminated and was tod
to oo! for another 8ob%
2n +arch 3D# 3DDD# /ebatique ,ed a
com$aint for iega dismissa and non0$a(ment
of overtime $a(%
ISSUE* =hat is the $rescri$tive $eriod
for mone( caims;
HELD* A mone( caims arising from an
em$o(er0em$o(ee reationshi$ sha be ,ed
within three (ears from the time the cause of
action accrued? otherwise# the( sha be forever
barred (Artice 354# /C)% )f it is estabished that
the bene,ts being caimed have been withhed
from the em$o(ee for a $eriod onger than
three (ears# the amount $ertaining to the
$eriod be(ond the three0(ear $rescri$tive
$eriod is therefore barred b( $rescri$tion% The
amount that can on( be demanded b( the
aggrieved em$o(ee sha be imited to the
amount of the bene,ts withhed within three
(ears before the ,ing of the com$aint%
/ebatique time( ,ed his caim for
service incentive eave $a(# considering that in
this situation# the $rescri$tive $eriod
commences at the time he was terminated% 2n
the other hand# his caim regarding non0
$a(ment of overtime $a( since he was hired in
+arch 455C is a di@erent matter% )n the case of
overtime $a(# he can on( demand for the
overtime $a( withhed for the $eriod within
three (ears $receding the ,ing of the
com$aint on +arch 3D# 3DDD% Jowever# we
,nd insu<cient the seected time records
$resented b( $etitioners to com$ute $ro$er(
his overtime $a(% The /abor Arbiter shoud have
required $etitioners to $resent the dai( time
records# $a(ro# or other documents in
managementIs contro to determine the correct
$a(ment due to him%
)t is immateria that /ebatique had ,ed
a com$aint for non0$a(ment of overtime $a(
the da( he was sus$ended b( managementIs
uniatera act% =hat matters is that he ,ed the
com$aint for iega dismissa on +arch 3D#
3DDD# after he was tod not to re$ort for wor!#
and his ,ing was we within the $rescri$tive
$eriod aowed under the aw%
L#3%'2 C'/'-$' F'1&/3( 7 E-5/o(##s
Asso1.'3.o2 vs. NLRC; G.R. No. )56225;
J'2&'%( 2, 2006
F'13s* Three cases were consoidated invoving
$etitioner /etran Caamba Facut( and
Hm$o(ees Association and Coegio de San *uan
de /etran# Caamba# for mone( caims and a
$etition to decare the sub8ect stri!e iega ,ed
b( res$ondent %
2n Se$tember 36# 4556# the /abor Arbiter (/A)
handing the consoidated cases rendered a
&ecision with the foowing dis$ositive $ortionF
=JH-HF2-H# $remises considered# 8udgment is
hereb( rendered# as foowsF
4% The mone( caims cases (-A"0):04D0
AECD0530/ and -A"0):0440AC3A0530/) are
hereb( dismissed for ac! of merit?
3% The $etition to decare stri!e iega
(./-C Case .o% -A"0):030CEEE05A0/) is
hereb( dismissed# but the o<cers of the
Union# $articuar( its President# +r%
Hdmundo F% +arifosque# Sr%# are hereb(
re$rimanded and stern( warned that
future conduct simiar to what was
dis$a(ed in this case wi warrant a
more severe sanction from this 2<ce%
"oth $arties a$$eaed to the ./-C%
2n *u( 36# 4555# the ./-C $romugated its
&ecision

dismissing both a$$eas% Petitioner
,ed a +otion for -econsideration

but the same
was denied b( the ./-C in its -esoution

dated
*une 34# 3DDD%
Petitioner then ,ed a s$ecia civi action for
certiorari with the CA assaiing the above0
mentioned ./-C &ecision and -esoution%
2n +a( 4A# 3DD3# the CA rendered the
$resent( assaied 8udgment dismissing the
$etition%
Petitioner ,ed a +otion for -econsideration but
the CA denied it in its -esoution $romugated
on .ovember 36# 3DD3%
Citing ."ustilo v* Court o+ .ppeals#

$etitioner
contends that in a s$ecia civi action for
certiorari brought before the CA# the a$$eate
court can review the factua ,ndings and the
ega concusions of the ./-C%
Petitioner avers that the CA# in concuding that
the ./-C &ecision was su$$orted b(
substantia evidence# faied to s$ecif( what
constituted said evidence% Thus# $etitioner
asserts that the CA acted arbitrari( in a<rming
the &ecision of the ./-C%
)n its Comment# res$ondent contends that the
ruing in ."ustilo is an e>ce$tion rather than
4D
the genera rue? that the genera rue is that in
a $etition for certiorari# 8udicia review b( this
Court or b( the CA in abor cases does not go
so far as to evauate the su<cienc( of the
evidence u$on which the $ro$er abor o<cer or
o<ce based his or its determination but is
imited on( to issues of 8urisdiction or grave
abuse of discretion amounting to ac! of
8urisdiction? that before a $art( ma( as! that
the CA or this Court review the factua ,ndings
of the ./-C# there must ,rst be a convincing
argument that the ./-C acted in a ca$ricious#
whimsica# arbitrar( or des$otic manner? and
that in its $etition for certiorari ,ed with the
CA# herein $etitioner faied to $rove that the
./-C acted without or in e>cess of 8urisdiction
or with grave abuse of discretion%
-es$ondent argues that ."ustilo is not
a$$icabe to the $resent case because in the
former case# the ,ndings of fact of the /A and
the ./-C are at variance with each other? whie
in the $resent case# the ,ndings of fact and
concusions of aw of the /A and the ./-C are
the same%
-es$ondent aso avers that in a s$ecia civi
action for certiorari# the discretionar( $ower to
review factua ,ndings of the ./-C rests u$on
the CA? and that absent an( ,ndings b( the CA
of the need to resove an( uncear or
ambiguous factua ,ndings of the ./-C# the
grant of the writ of certiorari is not warranted%
Iss&#* =hether or not the Court of A$$eas
erred in hoding that the factua ,ndings of the
./-C cannot be reviewed in certiorari
$roceedings%
H#/0* )n the instant case# the Court ,nds no
error in the ruing of the CA that since nowhere
in the $etition is there an( acce$tabe
demonstration that the /A or the ./-C acted
either with grave abuse of discretion or without
or in e>cess of its 8urisdiction# the a$$eate
court has no reason to oo! into the correctness
of the evauation of evidence which su$$orts
the abor tribunas1 ,ndings of fact%
This Court hed in Odan"o v* National Labor
Relations Commission

thatF
The a$$eate courtIs 8urisdiction
to review a decision of the ./-C
in a $etition for certiorari is
con,ned to issues of 8urisdiction
or grave abuse of discretion% An
e>traordinar( remed(# a $etition
for certiorari is avaiabe on( and
restrictive( in tru( e>ce$tiona
cases% The soe o<ce of the writ
of certiorari is the correction of
errors of 8urisdiction incuding the
commission of grave abuse of
discretion amounting to ac! or
e>cess of 8urisdiction% )t does not
incude correction of the ./-CIs
evauation of the evidence or of
its factua ,ndings% Such ,ndings
are genera( accorded not on(
res$ect but aso ,nait(% A $art(
assaiing such ,ndings bears the
burden of showing that the
tribuna acted ca$ricious( and
whimsica( or in tota disregard
of evidence materia to the
controvers(# in order that the
e>traordinar( writ of certiorari
wi ie%
Setted is the rue that the ,ndings of the /A#
when a<rmed b( the ./-C and the CA# are
binding on the Su$reme Court# uness $atent(
erroneous%

)t is not the function of the Su$reme
Court to ana('e or weigh a over again the
evidence aread( considered in the $roceedings
beow% )n a $etition for review on certiorari# this
CourtIs 8urisdiction is imited to reviewing errors
of aw in the absence of an( showing that the
factua ,ndings com$ained of are devoid of
su$$ort in the records or are garing(
erroneous% Firm is the doctrine that this Court is
not a trier of facts# and this a$$ies with greater
force in abor cases% Findings of fact of
administrative agencies and quasi08udicia
bodies# which have acquired e>$ertise because
their 8urisdiction is con,ned to s$eci,c matters#
are genera( accorded not on( great res$ect
but even ,nait(% The( are binding u$on this
Court uness there is a showing of grave abuse
of discretion or where it is cear( shown that
the( were arrived at arbitrari( or in utter
disregard of the evidence on record% =e ,nd
none of these e>ce$tions in the $resent case%
)n $etitions for review on certiorari i!e the
instant case# the Court invariab( sustains the
unanimous factua ,ndings of the /A# the ./-C
and the CA# s$ecia( when such ,ndings are
su$$orted b( substantia evidence and there is
no cogent basis to reverse the same# as in this
case%
+#3%o T%'2s.3 O%9'2.E'3.o2 vs. P.9/'s
NF<U,K+U #3 '/.; G.R. No. )75!60; A5%./
)!, 2006
F'13s* Petitioner +etro Transit 2rgani'ation#
)nc% (+T2) is a government owned and
controed cor$oration which entered into a
+anagement and 2$erations Agreement (+2A)
with the /ight -ai Transit Authorit( (/-TA) for
the o$eration of the /ight -ai Transit (/-T)
"acaran0+onumento /ine% Petitioner *ose /%
Corte'# *r% was sued in his o<cia ca$acit( as
then Undersecretar( of the &e$artment of
Trans$ortation and Communications and
Chairman of the "oard of &irectors of $etitioner
+T2%
-es$ondents ,ed with the /abor Arbiter
Com$aints

against $etitioners and the /-TA for
the foowingF (4) iega dismissa? (3) unfair
abor $ractice for union busting? (3) mora and
e>em$ar( damages? and (A) attorne(1s fees%
44
2n 43 Se$tember 3DDA# the /abor Arbiter
rendered 8udgment in favor of res$ondents%
Petitioners a$$eaed to the .ationa /abor
-eations Commission (./-C)% )n a -esoution
dated 45 +a( 3DDC# the ./-C dismissed
$etitioners1 a$$ea for non0$erfection since it
faied to $ost the required bond%
=ithout ,ing a +otion for -econsideration of
the afore0quoted ./-C -esoution# $etitioners
,ed a Petition for Certiorari with the Court of
A$$eas assaiing the same%
2n 3A August 3DDC# the Court of A$$eas
issued a -esoution dismissing the Petition% )t
ruedF
The $etitioners have ,ed this $etition for
certiorari against the resoution of the ./-C
dated +a( 45# 3DDC dismissing the a$$ea for
non0$erfection% The( have not# however# ,ed a
motion for reconsideration of the ruing $rior to
,ing the $etition% This renders the $etition
fata( defective% The motion for
reconsideration has been hed to be a condition
sine qua non for certiorari# the rationae being
that the ower court shoud be given the
o$$ortunit( to correct its error before recourse
to the higher court is made%
Iss&#* =hether or not $etitioner can direct(
,e the e>traordinar( remed( of certiorari
without ,ing ,rst a motion for reconsideration
with the ./-C%
H#/0* The Court of A$$eas correct( rued that
$etitioners1 faiure to ,e a motion for
reconsideration against the assaied -esoution
of the ./-C rendered its $etition for certiorari
before the a$$eate court as fata( defective%
)t must be $rimari( estabished that $etitioners
contravened the $rocedura rue for the
e>traordinar( remed( of certiorari* The rue is#
for the writ to issue# it must be shown that
there is no a$$ea# nor an( $ain# s$eed( and
adequate remed( in the ordinar( course of aw%
The setted rue is that a motion for
reconsideration is a condition sine 4ua non for
the ,ing of a $etition for certiorari* )ts $ur$ose
is to grant an o$$ortunit( for the court to
correct an( actua or $erceived error attributed
to it b( the re0e>amination of the ega and
factua circumstances of the case% The rationae
of the rue rests u$on the $resum$tion that the
court or administrative bod( which issued the
assaied order or resoution ma( amend the
same# if given the chance to correct its mista!e
or error%
=e have hed that the 7$ain#7 7s$eed(#7 and
7adequate remed(7 referred to in Section 4#
-ue CE of the -ues of Court is a motion +or
reconsideration of the questioned 2rder or
-esoution% As we consistent( hed in
numerous cases# a motion for reconsideration
is indis$ensabe for it a@ords the ./-C an
o$$ortunit( to rectif( errors or mista!es it
might have committed before resort to the
courts can be had%
)n the case at bar# $etitioners direct( went to
the Court of A$$eas on certiorari without ,ing
a motion for reconsideration with the ./-C%
The motion for reconsideration woud have
a$t( furnished a $ain# s$eed(# and adequate
remed(% As a rue# the Court of A$$eas# in the
e>ercise of its origina 8urisdiction# wi not ta!e
cogni'ance of a $etition for certiorari under
-ue CE# uness the ower court has been given
the o$$ortunit( to correct the error im$uted to
it% The Court of A$$eas correct( rued that
$etitioners1 faiure to ,e a motion for
reconsideration against the assaied -esoution
of the ./-C rendered its $etition for certiorari
before the a$$eate court as fata( defective%
=e agree in the Court of A$$eas1 ,nding that
$etitioners1 case does not fa under an( of the
recogni'ed e>ce$tions to the ,ing of a motion
for reconsideration# to witF (4) when the issue
raised is $ure( of aw? (3) when $ubic interest
is invoved? (3) in case of urgenc(? or when the
questions raised are the same as those that
have aread( been square( argued and
e>haustive( $assed u$on b( the ower court%
As the Court of A$$eas reasoned# the issue
before the ./-C is both factua and ega at the
same time# invoving as it does the
requirements of the $ro$ert( bond for the
$erfection of the a$$ea# as we as the ,nding
that $etitioners faied to $erfect the same%
Hvident(# the burden is on $etitioners see!ing
e>ce$tion to the rue to show su<cient
8usti,cation for dis$ensing with the
requirement%
Certiorari cannot be resorted to as a shied
from the adverse consequences of $etitioners1
own omission of the ,ing of the required
motion for reconsideration%
.onetheess# even if we are to disregard the
$etitioners1 $rocedura +au/ pas with the Court
of A$$eas# and $roceed to review the $ro$riet(
of the 45 +a( 3DDC ./-C -esoution# we sti
arrive at the concusion that the ./-C did not
err in den(ing $etitioners1 a$$ea for its faiure
to ,e a bond in accordance with the -ues of
Procedure of the ./-C%
)n cases invoving a monetar( award# an
em$o(er see!ing to a$$ea the decision of the
/abor Arbiter to the ./-C is unconditiona(
required b( Artice 333 of the /abor Code to
$ost a cash or suret( bond equivaent to the
amount of the monetar( award ad8udged% )t
shoud be stressed that the intention of
awma!ers to ma!e the bond an indis$ensabe
requisite for the $erfection of an a$$ea b( the
em$o(er is underscored b( the $rovision that
an a$$ea b( the em$o(er ma( be $erfected
on( u$on the $osting of a cash or suret( bond%
The word 7on(7 ma!es it $erfect( cear that
the awma!ers intended the $osting of a cash
or suret( bond b( the em$o(er to be the
e>cusive means b( which an em$o(er1s
43
a$$ea ma( be $erfected% +oreover# it bears
stressing that the $erfection of an a$$ea in the
manner and within the $eriod $rescribed b( aw
is not on( mandator( but 8urisdictiona# and
faiure to conform to the rues wi render the
8udgment sought to be reviewed ,na and
una$$easabe% )t cannot be overem$hasi'ed
that the ./-C -ues# a!in to the -ues of Court#
$romugated b( authorit( of aw# have the force
and e@ect of aw%
As borne b( the records# $etitioners ,ed a
$ro$ert( bond which was conditiona(
acce$ted b( the ./-C sub8ect to the foowing
conditions s$eci,ed in its 3A Februar( 3DDC
2rderF
The conditiona acce$tance of $etitioner1s
$ro$ert( bond was sub8ect to the submission of
the foowingF 4) Certi,ed co$( of "oard
-esoution or a Certi,cate from the Cor$orate
Secretar( of /ight -ai Transit Authorit( stating
that the Cor$oration President is authori'ed b(
a "oard -esoution to submit tite as guarantee
of 8udgment award? 3) Certi,ed Co$( of the
Tites issued b( the -egistr( of &eeds of Pasa(
Cit(? 3) Certi,ed Co$( of the current ta>
decarations of Tites? A) Ta> cearance from the
Cit( Treasurer of Pasa( Cit(? E) A$$raisa re$ort
of an accredited a$$raisa com$an( attesting to
the fair mar!et vaue of $ro$ert( within ten (4D)
da(s from recei$t of this 2rder% Faiure to
com$( therewith wi resut in the dismissa of
the a$$ea for non0$erfection thereof%
)n the same 2rder# the ./-C warned that
faiure of the $etitioners to com$( with the
conditions woud resut in the dismissa of the
a$$ea for non0$erfection thereof% Petitioners
were directed to com$( with its given
conditions within 4D da(s from recei$t of the
2rder with a caveat that their faiure wi resut
in the dismissa of the a$$ea% Subsequent(# in
its 45 +a( 3DDC -esoution# the ./-C ,na(
made a factua ,nding that $etitioners faied to
com$( with the conditions attached to their
$osting of the $ro$ert( bond% Thus# the ./-C
dismissed $etitioners1 a$$ea for non0$erfection
thereof%
Hssentia(# the faiure of $etitioners to com$(
with the conditions for the $osting of the
$ro$ert( bond is tantamount to a faiure to $ost
the bond as required b( aw% =hat is even
more saient is the fact that the ./-C had
stressed that $etitioners had# for more than a
month from recei$t of its 3A Februar( 3DDC
2rder# to com$( with the conditions set forth
therein for the $osting of the $ro$ert( bond% )t
cannot be gainsaid that the ./-C had given
$etitioners a $eriod of 4D da(s from recei$t of
the 2rder with a warning that non0com$iance
woud resut in the dismissa of their a$$ea for
faiure to $erfect the same% Petitioners
therefore disregarded the rudiments of the aw
in the $erfection of their a$$ea% =e are
without recourse but to ta!e $etitioners1 faiure
against their interest%
J. K. +#%1'0o 7 So2s A9%.1&/3&%'/
E23#%5%.s#s, I21., vs. S3o. To-'s, G.R.
No. )5606!, A&9&s3 2, 2006
F'13s*
2n &ecember 3# 4553# the -egiona Tri$artite
=ages and Productivit( "oard# -egion 9)#
issued =age 2rder .o% -T=P"09)0D3# granting a
Cost of /iving Aowance (C2/A) to covered
wor!ers%
2n *anuar( 36# 455A# $etitioner ,ed an
a$$ication for e>em$tion from the coverage of
the aforesaid wage order% Thus# however# was
denied b( the regiona wage board for ac! of
merit and ordered the $etitioner to $a( its
covered wor!ers the aowance $rescribed
under said =age 2rder%
.otwithstanding the said order# $rivate
res$ondents were not given the bene,ts due
them% Thus# $rivate res$ondents ,ed an
7r"ent Motion +or 8rit o+ E/ecution, and 8rit o+
9arnis!ment see!ing the enforcement of
sub8ect wage order against severa entities
incuding herein $etitioner%
The 2)C0-egiona &irector# -egion 9)# issued a
8rit o+ E/ecution for the enforcement of the
2rder dated A$ri 44# 455A of the -egiona
Tri$artite =ages and Productivit( "oard%
2n .ovember 4B# 4556 and .ovember 33#
4556# res$ective(# $etitioner ,ed a Motion to
:uas! t!e 8rit o+ E/ecution and a
%upplemental Motion to t!e Motion to :uas!*
Petitioner argued that herein $rivate
res$ondents1 right had aread( $rescribed due
to their faiure to move for the e>ecution of the
A$ri 44# 455A 2rder within the $eriod $rovided
under Artice 354 of the /abor Code# as
amended# or within three (3) (ears from the
,nait( of the said order% -egiona &irector
denied the motion# thus the $etitioner ,ed a
notice of a$$ea which was thereafter denied
for ac! of merit% Jence a $etition was ,ed in
SC%
Iss&#s*
=hether or not the Artice 354 of the /abor
Code is not a$$icabe to recover( of bene,ts
under the sub8ect =age 2rder# which entited
res$ondents to a cost of iving aowance
(C2/A);
=hether or not the caim of the $rivate
res$ondents for cost of iving aowance (C2/A)
$ursuant to the =age 2rder has aread(
$rescribed because of the faiure of the
res$ondents to ma!e the a$$ro$riate caim
within the three (3) (ear $rescri$tive $eriod
$rovided b( Artice 354 of the /abor Code# as
amended%
R&/.29*
Art% 354 of the /abor Code a$$ies to mone(
caims in genera and $rovides for a 30(ear
$rescri$tive $eriod to ,e them%
2n the other hand# res$ondent em$o(ees1
mone( caims in this case had been reduced to
a 8udgment# in the form of a =age 2rder# which
has become ,na and e>ecutor(% The
$rescri$tion a$$icabe# therefore# is not the
genera one that a$$ies to mone( caims# but
43
the s$eci,c one a$$(ing to 8udgments% Thus#
the right to enforce the 8udgment# having been
e>ercised within ,ve (ears# has not (et
$rescribed%
Stated otherwise# a caimant has three (ears to
$ress a mone( caim% 2nce 8udgment is
rendered in her favor# she has ,ve (ears to as!
for e>ecution of the 8udgment# counted from its
,nait(% This is consistent with the rue on
statutor( construction that a genera $rovision
shoud (ied to a s$eci,c one and with the
mandate of socia 8ustice that doubts shoud be
resoved in favor of abor%
<HEREFORE# the $etition is DENIED%
J,PHIL +ARINE, INC. '20Fo% JESUS
CANDAVA '20 NOR+AN SHIPPING
SERVICES vs. NATIONAL LACOR
RELATIONS CO++ISSION '20 <ARLITO E.
DU+ALAOG G.R. No. )75"66 A&9&s3 )),
2006
FACTS*
The herein res$ondent# was a coo!
aboard vesses $(ing overseas# ,ed before the
.ationa /abor -eations Commission (./-C) a
$ro0forma com$aint against $etitioners for
un$aid mone( caims# mora and e>em$ar(
damages# and attorne(Is fees and thereafter
,ed two amended $ro forma com$aints
$ra(ing for the award of overtime $a(# vacation
eave $a(# sic! eave $a(# and
disabiit(Gmedica bene,ts# he having# b( his
caim# contracted enargement of the heart and
severe th(roid enargement in the discharge of
his duties as coo! which rendered him
disabed%
/abor Arbiter Fe Su$eriaso0Cean
dismissed res$ondentIs com$aint for ac! of
merit but the ./-C reversed the /abor ArbiterIs
decision and awarded USPED#DDD%DD disabiit(
bene,t to res$ondent% The Court of A$$eas
dismissed $etitionersI $etition for# inter aia#
faiure to attach to the $etition a materia
documents# and for defective veri,cation and
certi,cation% PetitionersI +otion for
-econsideration of the a$$eate courtIs
-esoution was denied? hence# the( ,ed the
$resent Petition for -eview on Certiorari%
&uring the $endenc( of the case#
against the advice of his counse# entered into
a com$romise agreement with $etitioners% Je
thereu$on signed a Ouitcaim and -eease
subscribed and sworn to before the /abor
Arbiter% Petitioners ,ed before this Court a
+anifestation dated +a( B# 3DDB informing
that# inter aia# the( and res$ondent had forged
an amicabe settement%
-es$ondentIs counse aso ,ed before this
Court# $ur$orted( on behaf of res$ondent# a
Comment on the $resent $etition% The $arties
having forged a com$romise agreement as
res$ondent in fact has e>ecuted a Ouitcaim
and -eease# the Court dismisses the $etition%
ISSUE* =2. the com$romise agreementGdeed
of quit caim entered b( the $arties is vaid;
R&/.29*
Artice 33B of the /abor Code $rovidesF
An( com$romise settement# incuding those
invoving abor standard aws# vo/&23'%./(
'9%##0 u$on b( the $arties with the assistance
of the &e$artment of /abor# sha be B2'/ '20
$.20.29 &5o2 34# 5'%3.#s. The N'3.o2'/
L'$o% R#/'3.o2s Co--.ss.o2 or an( court
sha not assume 8urisdiction over issues
invoved therein e>ce$t in case of non0
com$iance thereof or if there is $rima facie
evidence that the settement was obtained
through fraud# misre$resentation# or coercion%
In Olaybar v. NLRC # the Court#
recogni'ing the concusiveness of com$romise
settements as a means to end abor dis$utes#
hed that A%3.1/# 20"7 of the Civi Code# which
$rovides that LQaR 1o-5%o-.s# 4's &5o2 34#
5'%3.#s 34# #?#13 '20 '&34o%.3( o: %#s
8&0.1'3',A '55/.#s s&55/#3o%./( 3o /'$o%
1's#s #v#2 .: 34# 1o-5%o-.s# .s 2o3
8&0.1.'//( '55%ov#0.
That %#s5o20#23 >'s 2o3 'ss.s3#0
$( 4.s 1o&2s#/ >4#2 4# #23#%#0 .23o 34#
1o-5%o-.s# 0o#s 2o3 %#20#% .3 2&// '20
vo.0. Hurotech Jair S(stems# )nc% v% Go so
#2/.943#2s*
A 1o-5%o-.s# '9%##-#23 .s v'/.0 's /o29
's 34# 1o2s.0#%'3.o2 .s %#'so2'$/# '20 34#
#-5/o(## s.92#0 34# >'.v#% vo/&23'%./(,
>.34 ' :&// &20#%s3'20.29 o: >4'3 4# >'s
#23#%.29 .23o. A that is %#D&.%#0 for the
com$romise to be deemed vountari( entered
into is 5#%so2'/ '20 s5#1.B1 .20.v.0&'/
1o2s#23. Thus# contrar( to res$ondentIs
contention# the em$o(eeIs counse need not
be $resent at the time of the signing of the
com$romise agreement%
)t bears noting that# as reKected earier# 34#
G&.31/'.- '20 <'.v#% >'s s&$s1%.$#0 '20
s>o%2 3o $#:o%# 34# L'$o% A%$.3#%.
Petition &)S+)SSH&
SY vs ALC I20&s3%.#s, GR No. )66""
O13o$#% )0, 2006
FACTS*
Petitioner was hired b( res$ondent
cor$oration A/C)) as a su$ervisor in its
$urchasing o<ce% She was thereafter assigned
to A/C))1s construction $ro8ect in &avao Cit( as
business manager and su$ervisor of the
Administrative &ivision% Jer &avao assignment
was from +a( 455B to A$ri 4E# 4555%
Petitioner aeged that res$ondents
refused to $a( her saar( beginning August
4556 and aowances beginning *une 4556#
des$ite her amost wee!( verba foow0u$%
Petitioner ,ed a com$aint before the abor
4A
arbiter for un$aid saaries and aowances%
&es$ite severa notices and warnings#
res$ondents did not ,e a $osition $a$er to
controvert $etitioner1s caims% The case was
submitted for resoution based soe( on
$etitioner1s aegations and evidence%
)n his *une 3D# 3DDD decision# the abor
arbiter ordered A/C)) andGor &e>ter Ceriaes to
$a( $etitioner P363#ECD re$resenting her
un$aid saar( and aowance%
-es$ondents ,ed an a$$ea with motion
for reduction of bond in the .ationa /abor
-eations Commission (./-C) without $osting
an( cash or suret( bond% )n a resoution dated
Se$tember C# 3DD4# the ./-C dismissed
res$ondents1 a$$ea% )t rued that res$ondents
faied to adduce substantia evidence to
su$$ort their arguments of non0iabiit(%
+oreover# it found no 8usti,abe reason to grant
a reduction in the required bond%
-es$ondents were abe to ,e a motion
for reconsideration on time# accom$anied b( a
8oint underta!ingGdecaration in ieu of the cash
or suret( bond% .evertheess# res$ondents1
motion for reconsideration was denied%
2n August 3# 3DD3# res$ondents ,ed a
motion for cari,cation but this was i!ewise
denied% -es$ondents questioned the ./-C1s
denia of their motion for cari,cation and
reconsideration in the CA via a $etition for
certiorari and $rohibition%
)n its +arch 3D# 3DDE decision# the CA
set aside the resoutions of the ./-C and the
decision of the abor arbiter and dismissed
$etitioner1s com$aint%
Iss&#* =2. the decision of the /abor Arbiter
has become ,na and e>ecutor(%
R&/.29*
Artice 333% APPHA/% 0 D#1.s.o2s,
'>'%0s, o% o%0#%s o: 34# L'$o% A%$.3#% '%#
B2'/ '20 #H#1&3o%( &2/#ss '55#'/#0 3o
34# Co--.ss.o2 $( '2( o% $o34 5'%3.#s
>.34.2 3#2 1'/#20'% 0'(s :%o- %#1#.53 o:
s&14 0#1.s.o2s, '>'%0s, o% o%0#%s. HHH.
)n case of a 8udgment invoving a
monetar( award# an a$$ea b( the
em$o(er ma( be $erfected on( u$on
the $osting of a cash or suret( bond
issued b( a re$utabe bonding com$an(
du( accredited b( the Commission in
the amount equivaent to the monetar(
award in the 8udgment a$$eaed from%
(em$hasis su$$ied)
Section 4# -ue :) of the -ues of Procedure of
the ./-C# as amended# i!ewise $rovides that
the a$$ea must be ,ed within ten da(s from
recei$t of the decision# resoution or order of
the abor arbiter% +oreover# Section C of the
same rues $rovides that an a$$ea b( the
em$o(er ma( be $erfected on( u$on the
$osting of a cash or suret( bond% As the right to
a$$ea is mere( a statutor( $riviege# it must
be e>ercised on( in the manner and in
accordance with the $rovisions of the aw%
2therwise# the right to a$$ea is ost%
)n a ong ine of cases# we have rued
that the $a(ment of the a$$ea bond is a
8urisdictiona requisite for the $erfection of an
a$$ea to the ./-C% The awma!ers intended to
ma!e the $osting of a cash or suret( bond b(
the em$o(er the e>cusive means b( which an
em$o(er1s a$$ea ma( be $erfected% The
rationae for this rue isF
The requirement that the em$o(er $ost
a cash or suret( bond to $erfect itsGhis
a$$ea is a$$arent( intended to assure
the wor!ers that if the( $revai in the
case# the( wi receive the mone(
8udgment in their favor u$on the
dismissa of the em$o(ers1 a$$ea% )t
was intended to discourage em$o(ers
from using an a$$ea to dea(# or even
evade# their obigation to satisf( their
em$o(ee1s 8ust and awfu caims%
The e>$anation advanced b( res$ondents for
their faiure to $a( the a$$ea bond beies their
caim% The ./-C found that res$ondents did not
$a( the a$$ea bond on the mista!en notion
that the( were not iabe for the monetar(
award and had aread( ceased o$erations due
to ban!ru$tc(% -es$ondents beated( ,ed a
bond with their motion for reconsideration of
the ./-C1s dismissa of their a$$ea% =e cannot
countenance such Kagrant disregard of
estabished rues of $rocedure on a$$eas%
+oreover# the ,ing of a 8oint
underta!ingGdecaration# ,ed wa( be(ond the
ten0da( regementar( $eriod for $erfecting an
a$$ea and as a substitute for the cash or
suret( bond# did not o$erate to vaidate the ost
a$$ea%
The decision of the abor arbiter
therefore became ,na and e>ecutor( for faiure
of res$ondents to $erfect their a$$ea within
the regementar( $eriod% Cear(# the CA no
onger had 8urisdiction to entertain
res$ondents1 a$$ea from the abor arbiter1s
decision%
-es$ondents $oint out that we have
occasiona( aowed e>ce$tions to mandator(
and 8urisdictiona requirements in the
$erfection of a$$eas# such as disregarding
&2.23#20#0 /'5s#s on the basis of strong and
com$eing reasons% This is true% Jowever# the
obvious motive behind res$ondents1 $ea for
iberait( is to thwart $etitioner1s caims% This
we cannot aow% -es$ondents1 a$ses were far
from unintentiona% The( were deiberate
attem$ts to circumvent estabished rues%
-es$ondents1 other contention that the(
were de$rived of due $rocess is i!ewise devoid
of merit% &ue $rocess is satis,ed when the
$arties are a@orded fair and reasonabe
o$$ortunit( to e>$ain their res$ective sides of
the controvers(%4B )n Mariveles %!ip,ard Corp*
v* C., we hedF
T4# %#D&.%#-#23s o: 0&# 5%o1#ss .2
/'$o% 1's#s $#:o%# ' L'$o% A%$.3#%
.s s'3.sB#0 >4#2 34# 5'%3.#s '%#
9.v#2 34# o55o%3&2.3( 3o s&$-.3
4E
34#.% 5os.3.o2 5'5#%s to which the(
are su$$osed to attach a the
su$$orting documents or documentar(
evidence that woud $rove their
res$ective caims# in the event that the
/abor Arbiter determines that no forma
hearing woud be conducted or that
such hearing was not necessar(%
(em$hasis su$$ied)%
=e rued in imes ransportation Compan,, Inc*
v* %oteloF
To e>tend the $eriod of a$$ea is to
$roong the resoution of the case# a
circumstance which woud give the
em$o(er the o$$ortunit( to wear out
the energ( and meager resources of the
wor!ers to the $oint that the( woud be
constrained to give u$ for ess than what
the( deserve in aw%
PCI T%'v#/ Co%5o%'3.o2 vs. NLRC GR
No. )5!"7. O13o$#% "), 2006
FactsF
A com$aint for unfair abor $ractice was
,ed against $etitioner b( res$ondent .U"H0
A+H9PHAGPC) Trave Hm$o(ees Union with the
atter caiming that the former had been ,ing
u$ $ositions eft b( reguar ran!0and0,e with
contractua em$o(ees# but were $erforming
wor! which were usua( necessar( and
desirabe in the usua business or trade of the
$etitioner% Petitioner moved to dismiss the
com$aint on the ground that the Union was not
the rea $art(0in0interest and then the(
manifested their readiness to $rove that said
em$o(ees were $rovided b( inde$endent
egitimate contractors and that it was not
engaged in abor0on( contracting in $osition
$a$er (et to be submitted# but the motion to
dismiss is to be resoved ,rst%
Jowever# the /abor Arbiter rendered a
decision in favor of the res$ondent ruing that a
motion to dismiss was a $rohibited $eading%
The same was a<rmed b( the ./-C but with
modi,cation deeting the awards of damages%
"efore the CA# the $etition was dismissed for
faiure to attach co$ies of $eadings and
documents reevant and $ertinent to the same
and the because of the absence of $roof that
Hi'abeth /egarda ($etitionerIs $resident) was
du( authori'ed to sign the veri,cation and
certi,cation of non0forum sho$$ing%
)ssue(s)F
4% =hether the President of a cor$oration
is authori'ed to sign the veri,cation and
certi,cation against non0forum sho$$ing
without need of a board resoution%
3% =hether or not the a$$eate court has
erred in dismissing the $etition on a
singe technicait(%
-uingF
=hie it must be borne in mind that
under the Cor$oration Code# an individua
cor$orate o<cer cannot soe( e>ercise an(
cor$orate $ower $ertaining to the cor$oration
without the authorit( from the board of
directors# the Su$reme Court however had
rued otherwise in a ong ine of cases before it%
Summing it u$# the foowing o<cias or
em$o(ees of the com$an( can sign the
veri,cation and certi,cation without need of a
board resoutionF (4) Chair$erson of the "2&#
(3) President# (3) Genera +anager or Acting
G+# (A) Personne 2<cer and (E) an
Hm$o(ment S$eciaist in a abor case%
Thus# that the President of the
cor$oration can sign the veri,cation and
certi,cation without need of a board resoution#
there thus e>ists a com$eing reason for the
reinstatement of the $etition before the CA%
A $erusa of the $etition
for certiorari woud revea that $etitioner
intended to show the grave abuse of discretion
committed b( the abor tribunas in not
aowing the $etitioner the am$e o$$ortunit(
to submit its $osition $a$er on the aeged
vioation of the C"A% The /abor Arbiter and the
./-C viewed it as a waiver on its $art and
hastened to rue that Lsince the com$ainantIs
aegations remain unrebutted# the( are
deemed correct and vaid%M &ue $rocess
dictates that a $erson shoud be given the
o$$ortunit( to be heard% Unfortunate(# this
was not accorded to the $etitioner and such
right was even forecosed when the a$$eate
court dismissed the $etition before it on
technica grounds%
The $oic( of our 8udicia s(stem is to
encourage fu ad8udication of the merits of an
a$$ea% Hnds of 8ustice are better served when
both $arties are heard and the controvers(
decided on its merits% Thus# in the e>ercise of
its equit( 8urisdiction# the Court wi not hesitate
to reverse the dismissa of a$$eas that are
grounded mere( on technicaities%
SSS-emanded to the CA for resoution based on
the merits%
LOPEI VS. G. C. SPORTS CLUC
GR No. )6!0"2 J'2&'%( ), 200
FACTS* Caiming that it is a registered
inde$endent abor organi'ation and the
incumbent coective bargaining agent of
Oue'on Cit( S$orts Cub (OCSC)# the Tasa$iang
+anggagawa sa Oue'on Cit( S$orts Cub
(union) ,ed a com$aint for unfair abor
$ractice against OCSC on 43 .ovember 455B%
The Union averred that it was ordered to
submit a new information sheet% )t
immediate( wrote a etter addressed to
the genera manager# Ange Sadang# to
inquire about the information sheet# on(
to be insuted b( the atter% The members
of the union were not $aid their saaries
on 3D *une 455B% A board member#
4C
Antonio Chua aeged( harassed one of
the em$o(ees and tod him not to 8oin
the stri!e and even $romised a
$romotion% 2n A *u( 455B# the union
wrote a etter to the management for the
reease of the membersI saaries for the
$eriod 4C03D *une 455B# im$ementation
of =age 2rder .o% E# and granting of
wage increases mandated b( the
Coective "argaining Agreement (C"A)%
=hen its etter went unanswered# the
union ,ed a notice of stri!e on 4D *u(
455B for vioation of Artice 3A6 (a)(c)(e)
of the /abor Code# non$a(ment of
overtime $a(# refusa to hear its
grievances# and maicious refusa to
com$( with the economic $rovisions of
the C"A% After conducting a stri!e vote#
it staged a stri!e on 43 August 455B% 2n
4C August 455B# the OCSC $aced some
of its em$o(ees under tem$orar( a(0o@
status due to redundanc(% )t a$$ears that
on 33 &ecember 455B# OCSC aso ,ed a
$etition for canceation of registration
against the union%
The /abor Arbiter (/ustria) found OCSC
guit( of unfair abor $ractice% OCSC
a$$eaed from the abor arbiterIs
decision% )t aso ,ed a motion for
reduction of the a$$ea bond to
PA#DDD#DDD%DD% The ./-C ordered the
$osting of an additiona
PC#DDD#DDD%DD) %OCSC ,ed a su$$ement
to its a$$ea# citing a decision (&ino$o
decision) dated 5 2ctober 4556 of /abor
Arbiter Hrnesto &ino$o decaring the
stri!e of the union iega% The dis$ositive
$ortion readsF
<HEREFORE# in view of the
UnionIs having vioated the
no0stri!e0no0oc!out $rovision
of the Coective "argaining
Agreement# the stri!e it
staged on August 43# 4556 is
hereb( decared iega and
consequent(# $ursuant to
Artice 3CA of the /abor
Code# the individua
res$ondents# name(F
RONILO C. LEE, EDUARDO
V. SANTIA, CECILLE C.
PANGAN, RO+EO +.
+ORGA, GENARO C.
CANDO AND ALEJ J.
SANTIAGO, who admitted in
$aragra$h 4 of their $osition
$a$er that the( are
o<cersGmembers of the
com$aining Union are
hereb( decared to have ost
their em$o(ment status%
+eanwhie# the .ationa /abor -eations
Commission (./-C) rendered a decision
granting the a$$ea and reversing the
Lustria decision% )t ratiocinatedF
"e that as it ma(# =e are of the
view that the &ecision in ./-C
CASH .2% DD0D50DCC305B must
$erforce $revai over the a$$eaed
&ecision and the atter to (ied to
it% )t must remain undisturbed
foowing the estabished doctrine
on $rimac( and ,nait( of decision%
)t bears stressing at this 8uncture#
at the ris! of being re$etitious#
that in ./-C Case .o% DD0D50DCC30
5B the em$o(ment status of
herein individua com$ainants was
aread( decared ost or forfeited
as of August 43# 4556# the da( the
iega stri!e was staged% From
then on# the( ceased to be
em$o(ees of res$ondent S$orts
Cub% The forfeiture of their
em$o(ment status carries with it
the e>tinction of their right to
demand for and be entited to the
economic bene,ts accorded them
b( aw and the e>isting C"A% For#
such right is $remised on the fact
of em$o(ment%
The other com$ainants ($etitioners)
meanwhie ,ed a motion for
reconsideration which was denied b( the
./-C% The( ,ed a $etition for certiorari
under -ue CE before the Court of A$$eas
but was denied%
ISSUES*
4% &o the simutaneous ,ing of the
motion to reduce the a$$ea bond and
$osting of the reduced amount of bond
within the regementar( $eriod for a$$ea
constitute substantia com$iance with
Artice 333 of the /abor Code;
3% =hether the ./-C erred in decaring
them to have ost their em$o(ment
contrar( to the ;inopol decision which
on( a@ected a few of the em$o(ees who
were union members%
RULING*
First issueF
Under the -ues# a$$eas invoving
monetar( awards are $erfected on( u$on
com$iance with the foowing mandator(
requisites# name(F (4) $a(ment of the
a$$ea fees? (3) ,ing of the memorandum
of a$$ea? and (3) $a(ment of the
required cash or suret( bond%
Thus# the $osting of a bond is
indis$ensabe to the $erfection of an
a$$ea in cases invoving monetar(
awards from the decision of the abor
arbiter% The ,ing of the bond is not on(
mandator( but aso a 8urisdictiona
requirement that must be com$ied with
in order to confer 8urisdiction u$on the
./-C% .on0com$iance with the
requirement renders the decision of the
abor arbiter ,na and e>ecutor(% This
requirement is intended to assure the
wor!ers that if the( $revai in the case#
the( wi receive the mone( 8udgment in
their favor u$on the dismissa of the
4B
em$o(er1s a$$ea% )t is intended to
discourage em$o(ers from using an
a$$ea to dea( or evade their obigation
to satisf( their em$o(ees1 8ust and awfu
caims%
Jowever# Section C of the .ew -ues of
Procedure of the ./-C aso mandates#
among others# that no motion to reduce
bond sha be entertained e>ce$t on
meritorious grounds and u$on the $osting
of a bond in a reasonabe amount in
reation to the monetar( award% Jence#
the ./-C has the fu discretion to grant
or den( the motion to reduce the amount
of the a$$ea bond%
)n the case of Nicol v* 6oot<o, Industrial
Corporation rued that the bond
requirement on a$$eas invoving
monetar( awards had been and coud be
rea>ed in meritorious cases such asF (4)
there was substantia com$iance with the
-ues? (3) the surrounding facts and
circumstances constitute meritorious
grounds to reduce the bond? (3) a ibera
inter$retation of the requirement of an
a$$ea bond woud serve the desired
ob8ective of resoving controversies on
the merits? or (A) the a$$eants# at the
ver( east# e>hibited their wiingness
andGor good faith b( $osting a $artia
bond during the regementar( $eriod%
A$$(ing these 8uris$rudentia guideines#
we ,nd and hod that the ./-C did not err
in reducing the amount of the a$$ea
bond and considering the a$$ea as
having been ,ed within the regementar(
$eriod%
The $osting of the amount of
PA#DDD#DDD%DD simutaneous( with the
,ing of the motion to reduce the bond to
that amount# as we as the ,ing of the
memorandum of a$$ea# a within the
regementar( $eriod# atogether
constitute substantia com$iance with
the -ues%
Second issueF
=e rue in favor of $etitioners%
The assaied ;inopol decision invoves a
com$aint for iega stri!e ,ed b( OCSC
on the ground of a 7no0stri!e no oc!out7
$rovision in the C"A% The chaenged
decision was rendered in accordance with
aw and is su$$orted b( factua evidence
on record% )n the notice of stri!e# the
union did not state in $articuar the acts
which aeged( constitute unfair abor
$ractice% +oreover# b( virtue of the 7no0
stri!e no oc!out7 $rovision in the C"A#
the union was $rohibited from staging an
economic stri!e# i*e*# to force wage or
other concessions from the em$o(er
which he is not required b( aw to grant%
Jowever# it shoud be noted that whie
the stri!e decared b( the union was hed
iega# on( the union o<cers were
decared as having ost their em$o(ment
status% )n e@ect# there was a ruing on(
with res$ect to some union members
whie the status of a others had
remained dis$uted%
There is no conKict between the ;inopol
and the Lustria decisions% =hie both
ruings invove the same $arties and
same issues# there is a distinction
between the remedies sought b( the
$arties in these two cases% )n the ;inopol
decision# it was OCSC which ,ed a
$etition to decare the iegait( of the 43
August 455B stri!e b( the union% The
consequence of the decaration of an
iega stri!e is termination from
em$o(ment# which the /abor Arbiter did
so rue in said case% Jowever# not a
union members were terminated% )n fact#
on( a few union o<cers were vaid(
dismissed in accordance with Artice 3CA
of the /abor Code% Coroari(# the other
union members who had mere(
$artici$ated in the stri!e but had not
committed an( iega acts were not
dismissed from em$o(ment% Jence# the
./-C erred in decaring the em$o(ment
status of a em$o(ees as having been
ost or forfeited b( virtue of the ;inopol
decision%
2n the other hand# the Lustria decision
invoved the unfair abor $ractices aeged
b( the union with $articuarit(% )n said
case# /abor Arbiter /ustria sided with the
Union and found OCSC guit( of such
$ractices% As a consequence# the a@ected
em$o(ees were granted bac!wages and
se$aration $a(% The grant of bac!wages
and se$aration $a( however was not
$remised on the decaration of the
iegait( of the stri!e but on the ,nding
that these a@ected em$o(ees were
constructive( dismissed from wor!# as
evidenced b( the a(o@s e@ected b( the
com$an(%
Therefore# with res$ect to $etitioners and
union o<cers Ae> *% Santiago# +a% Ceciia
Pangan# -onio H% /ee# and Genaro "ando#
who a$$arent( had been substituted b(
$resent $etitioner Teresita "ando# the
&ino$o decision decaring them as
having ost their em$o(ment status sti
stands%
To reca$ituate# the ./-C erred in setting
aside the Lustria decision# as we as in
deeting the award of bac!wages and
se$aration $a(# des$ite the ,nding that
the a@ected em$o(ees had been
constructive( dismissed%
"ased on the foregoing# the Lustria
decision shoud be u$hed and therefore
reinstated e>ce$t as regards the four
$etitioners%
OTHER I+PORTANT LACOR PROVISIONS
A. CONTRACTING ARRANGE+ENT
46
P4./.55.2# C'2K o: Co--&2.1'3.o2s vs.
N'3.o2'/ L'$o% R#/'3.o2s Co--.ss.o2
GR No. L,6656 D#1#-$#% ), )66
FACTS* Petitioner Phii$$ine "an! of
Communications and the Cor$orate H>ecutive
Search# )nc% (CHS)) entered into an agreement
under which CHS) woud $rovide LTem$orar(
ServicesM to $etitioner consisting of eeven (44)
messengers# one of them was 2r$iada% The
contract $eriod was described as Lfrom *anuar(
45BC U athough it a$$eared that 2r$iada had
been assigned to the ban! since *une 45BE%
Je rendered messengeria services to
the ban!# within its $romises# together with
other the others doing a simiar 8ob% )n or about
2ctober 45BC# the ban! requested CHS) to
withdraw 2r$iadaIs assignment because
2r$iadaIs services Lwere no onger needed%M
2r$iada ,ed a com$aint against the
ban! for iega dismissa and faiure to $a( the
43
th
0 month $a(% The ban! im$eaded CHS) as
an additiona res$ondent% The /abor Arbiter
rued in favor of 2r$iada% Jence# this $etition
for certiorari ,ed b( the ban!%
ISSUE* =hether or not an em$o(er0
em$o(ee reationshi$ e>isted between the
ban! and $rivate res$ondent 2r$iada%
HELD* Nes% There is an em$o(er0em$o(ee
reationshi$ that e>isted between the ban! and
2r$iada% The fact that 2r$iada wor!ed or
rendered services to the ban! for a $eriod of
about si>teen (4C) months made him an
em$o(ee of the ban!% Under the /abor Code#
an( em$o(ee who has rendered at east one
(4) (ear of service# whether such service is
continuous or not# sha be considered a reguar
em$o(ee% Thus# 2r$iadaIs services ma( not be
terminated b( the ban! e>ce$t for a 8ust cause
or when authori'ed under the /abor Code% CHS)
was engaged in abor0on( contracting%
Therefore# the $etitioner ban! is iabe to
2r$iada as if 2r$iada had been direct(
em$o(ed# not on( b( CHS) but aso b( the
ban!%
N#%. vs. N'3.o2'/ L'$o% R#/'3.o2s
Co--.ss.o2
G.R. Nos. 7006,0 J&/( 2", )"
FACTS* Petitioners instituted com$aints
against FH"TC and "CC to com$e the ban! to
acce$t them as reguar em$o(ees and for it to
$a( the di@erentia between the wages being
$aid them b( "CC and those received b( FH"TC
em$o(ees with simiar ength of service% The(
contended that "CC in engaged in abor0on(
contracting because it faied to adduce
evidence $ur$orting to show that it invested in
the form of toos# equi$ment# machineries#
wor! $remises and other materias which are
necessar( in the conduct of its business%
+oreover# $etitioners argue that the( $erform
duties which are direct( reated to the $rinci$a
business or o$eration of FH"TC%
)t is we0setted that there is abor0on(
contracting whereF (a) the $erson su$$(ing
wor!ers to an em$o(er does not have
substantia ca$ita or investment in the form of
toos# equi$ment# machineries# wor! $remises#
among others? and# (b) the wor!ers recruited
and $aced b( such $erson are $erforming
activities which are direct( reated to the
$rinci$a business of the em$o(er%
R&/.29* The Su$reme Court rued that
res$ondent "CC need not $rove that it made
investments in the form of toos# equi$ment#
machineries# wor! $remises# among others#
because it has estabished that it has su<cient
ca$itai'ation% This fact was both determined b(
the /abor Arbiter and the ./-C as "CC had a
ca$ita stoc! of P4 miion fu( subscribed and
$aid for% "CC is therefore a high( ca$itai'ed
venture and cannot be deemed engaged in
abor0on( contracting%
=hie there ma( be no evidence that it
has investment in the form of toos# equi$ment#
machineries# wor! $remises# among others# it is
enough that it has substantia ca$ita# as was
estabished before the /abor Arbiter as we as
the ./-C% The aw does not require both
substantia ca$ita and investment in the form
of toos# equi$ment# machineries# etc% This is
cear from the use of the con8unction 7or7
instead of 7and7%
Javing estabished that it has
substantia ca$ita# it was no onger necessar(
for "CC to further adduce evidence to $rove
that it does not fa within the $urview of 7abor0
on(7 contracting% There is even no need for it
to refute $etitioners1 contention that the
activities the( $erform are direct( reated to
the $rinci$a business of res$ondent ban!% 2n
the other hand# the Court has aread( ta!en
8udicia notice of the genera $ractice ado$ted
in severa government and $rivate institutions
and industries of hiring inde$endent
contractors to $erform s$ecia services%
These services range from 8anitoria#
securit( and even technica or other s$eci,c
services such as those $erformed b( $etitioners
.eri and Cabein% =hie these services ma( be
considered direct( reated to the $rinci$a
business of the em$o(er# nevertheess# the(
are not necessar( in the conduct of the
$rinci$a business of the em$o(er% Petition
dismissed%
FILIPINAS SYNTHETIC FICER
CORPORATION vs NLRC
G.R. No. ))""!7 J&2# )!, )6
FACTS* 2n A A$ri 4554 F)/SN.# a
domestic cor$oration engaged in the
manufacture of $o(ester ,ber# contracted with
&e /ima Trading and Genera Services (&H
/)+A) for the $erformance of s$eci,c 8anitoria
services

Pursuant to the agreement Fei$e
/oterte# among others# was de$o(ed at F)/SN.
to ta!e care of the $ants and maintain genera
ceaniness around the $remises%
2n 3A Februar( 4553 /oterte sued
F)/SN. and &H /)+A as aternative defendants
for iega dismissa# under$a(ment of wages#
non0$a(ment of ega hoida( $a(# service
incentive eave $a( and 43th month $a(
aeging that he was ,rst assigned to $erform
8anitoria wor! at F)/SN. in 4564 b( the /a Saga
Genera Services? that the /a Saga was
changed to &H /)+A on August 4554? that when
a movement to demand increased wages and
43th month $a( arose among the wor!ers on
&ecember 4554 he was accused b( a certain
45
&odie /a Fores of having $osted in the buetin
board at F)/SN. an artice attributing to
management a secret understanding to boc!
the demand? and# for den(ing res$onsibiit(# his
gate $ass was unceremonious( canceed on C
Februar( 4553 and he was subsequent(
dismissed%
/oterte was cassi,ed b( the /abor
Arbiter as a reguar em$o(ee on the ground
that he $erformed tas!s usua( necessar( or
desirabe in the main business of F)/SN. for
more than ten (4D) (ears or since 4564% F)/SN.
was decared to be the rea em$o(er of /oterte
and &H /)+A as a mere abor contractor%

Jence#
F)/SN. was ad8udged iabe for /oterte1s
reinstatement# $a(ment of saar( di@erentias
and bac! wages and other bene,ts% Jence#
this $etition for certiorari b( F)/SN.%
ISSUE* =hether or not there e>ists an
em$o(er0em$o(ee reationshi$ between
F)/SN. and $rivate res$ondent Fei$e /oterte%

HELD* &H /)+A is an inde$endent 8ob
contractor# therefore no direct em$o(er0
em$o(ee reationshi$ e>ists between
$etitioner F)/SN. and $rivate res$ondent Fei$e
/oterte% The reationshi$ between $etitioner
Fii$inas S(nthetic Fiber Cor$oration (F)/SN.)
and $rivate res$ondent &e /ima Trading and
Genera Services (&H /)+A) is one of 8ob
contractorshi$%
Under the /abor Code# two (3) eements
must e>ist for a ,nding of abor0on(
contractingF (a) the $erson su$$(ing wor!ers
to an em$o(er does not have substantia
ca$ita or investment in the form of toos#
equi$ment# machineries# wor! $remises#
among others# and (b) the wor!ers recruited
and $aced b( such $ersons are $erforming
activities direct( reated to the $rinci$a
business of such em$o(er%
These two (3) eements do not e>ist in
the instant case% As $ointed out b( $etitioner#
$rivate res$ondent &H /)+A is a going concern
du( registered with the Securities and
H>change Commission with substantia
ca$itai'ation of P4#CDD#DDD%DD# PADD#DDD%DD of
which is actua( subscribed% Jence# it cannot
be considered as engaged in abor0on(
contracting being a high( ca$itai'ed venture%
+oreover# whie the 8anitoria services
$erformed b( Fei$e /oterte $ursuant to the
agreement between F)/SN. and &H /)+A ma(
be considered direct( reated to the $rinci$a
business of F)/SN. which is the manufacture of
$o(ester ,ber# nevertheess# the( are not
necessar( in its o$eration% 2n the contrar(#
the( are mere( incidenta thereto# as o$$osed
to being integra# without which $roduction and
com$an( saes wi not su@er% *udicia notice
has aread( been ta!en of the genera $ractice
in $rivate as we as in government institutions
and industries of hiring 8anitoria services on an
inde$endent contractor basis%
-es$ondent &e /ima Trading and
Genera Services (&H /)+A) are ordered to
reinstate $rivate res$ondent FH/)PH /2TH-TH to
his former $osition or its equivaent without
oss of seniorit( rights% And $rivate res$ondent
&e /ima Trading and Genera Services (&H
/)+A) is ordered 8oint( and severa( with
$etitioner Fii$inas S(nthetic Fiber Cor$oration
(F)/SN.) to $a( $rivate res$ondent FH/)PH
/2TH-TH hi saar( di@erentias# 43th month
$a(# service incentive eave $a(# and
bac!wages without $re8udice to F)/SN. see!ing
reimbursement from &H /)+A for whatever
amount the former ma( $a( or have $aid the
atter%
+ARAGUINOT vs. NLRC
G.R. No. )206 J'2&'%( 22, )6
FACTS* Petitioner +araguinot# *r%
maintains that he was em$o(ed b( $rivate
res$ondents as $art of the ,ming crew% Je was
designated Assistant Hectrician and was
$romoted to the ran! of Hectrician% Petitioner
Pauino Hnero# on his $art# caims that $rivate
res$ondents em$o(ed him as a member of the
shooting crew% PetitionersI tas!s consisted of
oading# unoading and arranging movie
equi$ment in the shooting area as instructed
b( the cameraman# returning the equi$ment to
:iva FimsI warehouse# assisting in the L,>ingM
of the ighting s(stem# and $erforming other
tas!s that the cameraman andGor director ma(
assign% Petitioners sought the assistance of
their su$ervisor# +rs% Cesario# to faciitate their
request that $rivate res$ondents ad8ust their
saar( in accordance with the minimum wage
aw% +rs% Cesario informed $etitioners that +r%
de -osario woud agree to increase their saar(
on( if the( signed a ban! em$o(ment
contract% As $etitioners refused to sign# $rivate
res$ondents forced Hnero to go on eave then
refused to ta!e him bac! when he re$orted for
wor!% +eanwhie# +araguinot was dro$$ed
from the com$an( $a(ro but was returned on
*une 4553% Je was again as!ed to sign a ban!
em$o(ment contract# and when he sti
refused# $rivate res$ondents terminated his
services on% Petitioners thus sued for iega
dismissa before the /abor Arbiter%
2n the other hand# $rivate res$ondents
caim that :):A is $rimari( engaged in the
distribution and e>hibition of movies 00 but not
in the business of ma!ing movies? in the same
vein# $rivate res$ondent :ic de -osario is
mere( an e>ecutive $roducer# i*e*# the ,nancier
who invests a certain sum of mone( for the
$roduction of movies distributed and e>hibited
b( :):A%
Private res$ondents assert that the(
contract $ersons caed L$roducersM 00 aso
referred to as Lassociate $roducersM 00 to
L$roduceM or ma!e movies for $rivate
res$ondents? and contend that $etitioners are
$ro8ect em$o(ees of the associate $roducers
who# in turn# act as inde$endent contractors%
As such# there is no em$o(er0em$o(ee
reationshi$ between $etitioners and $rivate
res$ondents% Private res$ondents further
contend that it was the associate $roducer of
the ,m LMa!irap Ma"in" 2o"i#M who hired
$etitioner +araguinot% The movie shot from 3
*u( u$ to 33 *u( 4553# and it was on( then
that +araguinot was reeased u$on $a(ment of
his ast saar(# as his services were no onger
needed% Anent $etitioner Hnero# he was hired
for the movie entited L%i"a# n" 2uso#GNarito
an" 2uso%M Je went on vacation and when he
re$orted bac! for wor! on 3D *u( 4553#
shooting for the movie had aread( been
com$eted%
3D
ISSUES* =hether or not $etitioners are $ro8ect
em$o(ees of associate $roducers who# in turn#
act as inde$endent contractors%
=hether or not $etitioners were iega(
dismissed%
HELD* )t is setted that the contracting out of
abor is aowed on( in case of 8ob contracting%
Sec% 6% *ob contracting% 00 There is 8ob
contracting $ermissibe under the Code if the
foowing conditions are metF (4) The contractor
carries on an inde$endent business and
underta!es the contract wor! on his own
account under his own res$onsibiit( according
to his own manner and method# free from the
contro and direction of his em$o(er or
$rinci$a in a matters connected with the
$erformance of the wor! e>ce$t as to the
resuts thereof? and (3) The contractor has
substantia ca$ita or investment in the form of
toos# equi$ment# machineries# wor! $remises#
and other materias which are necessar( in the
conduct of his business% Assuming that the
associate $roducers are 8ob contractors# the(
must then be engaged in the business of
ma!ing motion $ictures% As such# and to be a
8ob contractor under the $receding descri$tion#
associate $roducers must have toos#
equi$ment# machiner(# wor! $remises# and
other materias necessar( to ma!e motion
$ictures% Jowever# the associate $roducers
here have none of these% Private res$ondentsI
evidence reveas that the movie0ma!ing
equi$ment are su$$ied to the $roducers and
owned b( :):A% These incude generators#
cabes and wooden $atforms# cameras and
Lshooting equi$ment?M in fact# :):A i!ewise
owns the truc!s used to trans$ort the
equi$ment% )t is thus cear that the associate
$roducer mere( eases the equi$ment from
:):A% Private res$ondents further narrated that
:):AIs generators bro!e down during
$etitionersI ast movie $ro8ect# which forced the
associate $roducer concerned to rent
generators# equi$ment and crew from another
com$an(% This on( shows that the associate
$roducer did not have substantia ca$ita nor
investment in the form of toos# equi$ment and
other materias necessar( for ma!ing a movie%
Private res$ondents in e@ect admit that their
$roducers# es$ecia( $etitionersI ast $roducer#
are not engaged in $ermissibe 8ob contracting%
)f $rivate res$ondents insist that their associate
$roducers are abor contractors# then these
$roducers can on( be Labor0on(M contractors#
de,ned b( the /abor Code% Sec% 5% /abor0on(
contracting% (a) An( $erson who underta!es to
su$$( wor!ers to an em$o(er sha be deemed
to be engaged in abor0on( contracting where
such $ersonF (4) &oes not have substantia
ca$ita or investment in the form of toos#
equi$ment# machineries# wor! $remises and
other materias? and (3) The wor!ers recruited
and $aced b( such $erson are $erforming
activities which are direct( reated to the
$rinci$a business or o$erations of the
em$o(er in which wor!ers are habitua(
em$o(ed% (b) /abor0on( contracting as
de,ned herein is hereb( $rohibited and the
$erson acting as contractor sha be considered
mere( as an agent or intermediar( of the
em$o(er who sha be res$onsibe to the
wor!ers in the same manner and e>tent as if
the atter were direct( em$o(ed b( him% (c)
For cases not faing under this Artice# the
Secretar( of /abor sha determine through
a$$ro$riate orders whether or not the
contracting out of abor is $ermissibe in the
ight of the circumstances of each case and
after considering the o$erating needs of the
em$o(er and the rights of the wor!ers
invoved% )n such case# he ma( $rescribe
conditions and restrictions to insure the
$rotection and wefare of the wor!ers%
As abor0on( contracting is $rohibited#
the aw considers the $erson or entit( engaged
in the same a mere agent or intermediar( of
the direct em$o(er% "ut even b( the $receding
standards# the associate $roducers of :):A
cannot be considered abor0on( contractors as
the( did not su$$(# recruit nor hire the
wor!ers% )n the instant case# it was *uanita
Cesario# Shooting Unit Su$ervisor and an
em$o(ee of :):A# who recruited crew members
from an Lavaiabe grou$ of free0ance wor!ers
which incudes the com$ainants +araguinot
and Hnero%M And in their +emorandum# $rivate
res$ondents decared that the associate
$roducer Lhires the services of%%% C) camera
crew which incudes (a) cameraman? (b) the
utiit( crew? (c) the technica sta@? (d)
generator man and eectrician? (e) ca$$er?
etc%%%%M This cear( showed that the associate
$roducers did not su$$( the wor!ers required
b( the movie $ro8ect% The reationshi$ between
:):A and its $roducers or associate $roducers
seems to be that of agenc(# as the atter ma!e
movies on behaf of :):A# whose business is to
Lma!eM movies% As such# the em$o(ment
reationshi$ between $etitioners and $roducers
is actua( one between $etitioners and :):A#
with the atter being the direct em$o(er%
.otab(# nowhere in the a$$ointment si$ does
it a$$ear that it was the $roducer or associate
$roducer who hired the crew members?
moreover# it is :):AIs cor$orate name which
a$$ears on the heading of the a$$ointment
si$% =hat i!ewise tes against :):A is that it
$aid $etitionersI saaries as evidenced b(
vouchers# containing :):AIs etterhead# for that
$ur$ose%
A $ro8ect em$o(ee or a member of a
wor! $oo ma( acquire the status of a reguar
em$o(ee when the foowing concurF 4) There
is a continuous rehiring of $ro8ect em$o(ees
even after cessation of a $ro8ect? and 3) The
tas!s $erformed b( the aeged L$ro8ect
em$o(eeM are vita# necessar( and
indis$ensabe to the usua business or trade of
the em$o(er% Jowever# the ength of time
during which the em$o(ee was continuous(
re0hired is not controing# but mere( serves as
a badge of reguar em$o(ment% )n the instant
case# the evidence on record shows that
$etitioner Hnero was em$o(ed for a tota of 3
(ears and engaged in at east 46 $ro8ects# whie
$etitioner +araguinot was em$o(ed for some 3
(ears and wor!ed on at east 33 $ro8ects%
+oreover# as $etitionersI tas!s invoved# among
other chores# the oading# unoading and
arranging of movie equi$ment in the shooting
area as instructed b( the cameramen# returning
the equi$ment to the :iva FimsI warehouse#
and assisting in the L,>ingM of the ighting
s(stem# it ma( not be gainsaid that these tas!s
were vita# necessar( and indis$ensabe to the
usua business or trade of the em$o(er% As
regards the underscored $hrase# it has been
34
hed that this is ascertained b( considering the
nature of the wor! $erformed and its reation to
the scheme of the $articuar business or trade
in its entiret(% )n cosing then# as $etitioners
had aread( gained the status of reguar
em$o(ees# their dismissa was unwarranted#
for the cause invo!ed b( $rivate res$ondents
for $etitionersI dismissa# vi=%# com$etion of
$ro8ect# was not# as to them# a vaid cause for
dismissa under Artice 363 of the /abor Code%
As such# $etitioners are now entited to bac!
wages and reinstatement# without oss of
seniorit( rights and other bene,ts that ma(
have accrued% .evertheess# foowing the
$rinci$es of Lsus$ension of wor!M and Lno $a(M
between the end of one $ro8ect and the start of
a new one# in com$uting $etitionersI bac!
wages# the amounts corres$onding to what
coud have been earned during the $eriods
from the date $etitioners were dismissed unti
their reinstatement when $etitionersI
res$ective Shooting Units were not underta!ing
an( movie $ro8ects# shoud be deducted%
U%$'2#s, J%., vs. T4# Ho2o%'$/# S#1%#3'%(
O: L'$o% A20 E-5/o(-#23 G.R. No.
)227) F#$%&'%( ), 200"
FACTS* Petitioner Pacido 2% Urbanes# *r%#
doing business under the name and st(e of
Cataina Securit( Agenc(# entered into an
agreement to $rovide securit( services to
res$ondent Socia Securit( S(stem (SSS)%
&uring the e@ectivit( of the agreement#
$etitioner# b( etter of +a( 4C# 455A# requested
the SSS for the u$ward ad8ustment of their
contract rate in view of =age 2rder .o% .C-0D3
which was issued b( the -egiona Tri$artite
=ages and Productivit( "oard0.C-%
Petitioner sent severa etters dated *une
B and *une 6# 455A# reiterating the request% 2n
*une 3A# 455A# $etitioner $ued out his
agenc(Is services from the $remises of the
SSS% Petitioner# on *une 35# 455A# ,ed a
com$aint with the &2/H0.C- against the SSS
see!ing the im$ementation of =age 2rder .o%
.C-0D3%
)n its $osition $a$er# the SSS $ra(ed for
the dismissa of the com$aint on the ground
that $etitioner is not the rea $art( in interest
and has no ega ca$acit( to ,e the same% )n
an( event# it argued that if it had an(
obigation# it was to the securit( guards%
+orever# it contended that the securit( guards
assigned to the SSS do not have an( ega basis
to ,e a com$aint against it for ac! of
contractua $rivit(%
Finding for $etitioner# the -egiona
&irector of the &2/H0.C- ordered res$ondent
SSS to $a( com$ainant the sum of P
4#CDD#6E6%AC re$resenting the wage
di@erentias under =age 2rder .o% .C-0D3 of
the 4C6 Securit( Guards of Cataina Securit(
Agenc( covering the $eriod from &ecember 4C#
4553 to *une 3A# 455A%
The SSS moved to reconsider the
Se$tember 4C# 455A 2rder of the -egiona
&irector# $ra(ing that the com$utation be
revised% "( 2rder of &ecember 5# 455A# the
-egiona &irector modi,ed his Se$tember 4C#
455A 2rder b( reducing the amount $a(abe b(
the SSS to $etitioner% The amount was reduced
to P 4#33B#BAD%DD%
The SSS a$$eaed to the Secretar( of
/abor u$on severa assigned errors% Thereafter#
the Secretar( of /abor# b( 2rder of *une 33#
455E# set aside the order of the -egiona
&irector and remanded the records of the case
7for recom$utation of the wage di@erentias
using P E#364%DD as the basis of the wage
ad8ustment%7 And the Secretar( hed
$etitionerIs securit( agenc( 7*oint( and
severa( iabe for wage di@erentias# the
amount of which shoud be $aid direct( to the
securit( guards concerned%7
ISSUES* 4% =hether or not the Secretar( of
/abor has 8urisdiction to review a$$eas from
decisions of the -egiona &irectors%
3% =hether or not SSS is iabe to $a(
$etitioner for wage di@erentias%
Co23#23.o2s*
Petitioner asserts that the Secretar( of
/abor does not have 8urisdiction to review
a$$eas from decisions of the -egiona
&irectors in com$aints ,ed under Artice 435
of the /abor Code which $rovidesF
.R* >?@* RECOAERY O6 8.9E%,
%IM2LE MONEY CL.IM% .N; OBER
BENE6I%* U$on com$aint of an(
interested $art(# the regiona
director of the &e$artment of /abor
and Hm$o(ment or an( du(
authori'ed hearing o<cers of the
&e$artment is em$owered# through
summar( $roceeding and after due
notice# to hear and decide an(
matter invoving the recover( of
wages and other monetar( caims
and bene,ts# incuding ega
interest# owing to an em$o(ee or
$erson em$o(ed in domestic or
househod service or househe$er
under this Code# arising from
em$o(er0em$o(ee reationsF
Provided# That such com$aint does
not incude a caim for
reinstatement? Provided# further#
That the aggregate mone( caim of
each em$o(ee or househe$er does
not e>ceed Five Thousand $esos
(PE#DDD%DD)% The regiona director or
hearing o<cer sha decide or
resove the com$aint within thirt(
(3D) caendar da(s from the date of
the ,ing of the same% An( sum thus
recovered on behaf of an(
em$o(ee or househe$er $ursuant
to this Artice sha be hed in a
s$ecia de$osit account b(# and sha
be $aid on order of# the Secretar( of
/abor and Hm$o(ment or the
regiona director direct( to the
em$o(ee or househe$er
concerned% An( such sum not $aid
to the em$o(ee or househe$er#
because he cannot be ocated after
diigent and reasonabe e@ort to
ocate him within a $eriod of three
(3) (ears# sha be hed as a s$ecia
fund of the &e$artment of /abor and
Hm$o(ment to be used e>cusive(
for the ameioration and bene,t of
wor!ers%
An( decision or resoution of the
regiona director or o<cer $ursuant
33
to this $rovision ma( be a$$eaed on
the same grounds $rovided in Artice
333 of this Code# within ,ve (E)
caendar da(s from recei$t of a co$(
of said decision or resoution# to the
.ationa /abor -eations
Commission which sha resove the
a$$ea within ten (4D) caendar da(s
from submission of the ast $eading
required or aowed under its rues%
> > >
Petitioner thus contends that as the
a$$ea of SSS was ,ed with the wrong forum# it
shoud have been dismissed%
The SSS# on the other hand# contends
that Artice 436# not Artice 435# is a$$icabe to
the case% Artice 436 $rovidesF
.R* >?(* AI%IORI.L .N;
EN6ORCEMEN 2O8ER%
> > >
(b) .otwithstanding the $rovisions of
Artice 435 and 34B of this Code to
the contrar(# and in cases where the
reationshi$ of em$o(er0em$o(ee
sti e>ists# the Secretar( of /abor
and Hm$o(ment or his du(
authori'ed re$resentatives sha
have the $ower to issue com$iance
orders to give e@ect to abor
egisation based on the ,ndings of
abor em$o(ment and enforcement
o<cers or industria safet(
engineers made in the course of
ins$ection%
> > >
An order issued b( the du(
authori'ed re$resentative of the
Secretar( of /abor and Hm$o(ment
under this artice ma( be a$$eaed
to the atter%
> > >%
HELD* .either the $etitionerIs contention
nor the SSSIs is im$ressed with merit%
/a$anda( Agricutura &eveo$ment
Cor$oration v% Court of A$$eas instructs so%
)n that case# the securit( agenc( ,ed a
com$aint before the -TC against the
$rinci$a or cient /a$anda( for the u$ward
ad8ustment of the contract rate in
accordance with =age 2rder .os% E and C%
/a$anda( argued that it is the .ationa
/abor -eations Commission# not the civi
courts# which has 8urisdiction to resove the
issue in the case# it invoving the
enforcement of wage ad8ustment and other
bene,ts due the agenc(Is securit( guards
as mandated b( severa wage orders%
Joding that the -TC has 8urisdiction over
the controvers(# this Court ruedF
=e agree with the res$ondent that
the -TC has 8urisdiction over the
sub8ect matter of the $resent case%
)t is we setted in aw and
8uris$rudence that where no
em$o(er0em$o(ee reationshi$
e>ists between the $arties and no
issue is invoved which ma( be
resoved b( reference to the /abor
Code# other abor statutes or an(
coective bargaining agreement# it
is the -egiona Tria Court that has
8urisdiction% )n its com$aint# $rivate
res$ondent is not see!ing an( reief
under the /abor Code but see!s
$a(ment of a sum of mone( and
damages on account of $etitioner1s
aeged breach of its obigation
under their Guard Service Contract%
The action is within the ream of civi
aw hence 8urisdiction over the case
beongs to the reguar courts% =hie
the resoution of the issue invoves
the a$$ication of abor aws#
reference to the abor code was on(
for the determination of the soidar(
iabiit( of the $etitioner to the
res$ondent where no em$o(er0
em$o(ee reation e>ists%
)n the case at bar# even if $etitioner ,ed
the com$aint on his and aso on behaf of the
securit( guards# the reief sought has to do with
the enforcement of the contract between him
and the SSS which was deemed amended b(
virtue of =age 2rder .o% .C-0D3% The
controvers( sub8ect of the case at bar is thus a
civi dis$ute# the $ro$er forum for the
resoution of which is the civi courts%
"ut even assuming arguendo that
$etitionerIs com$aint were ,ed with the
$ro$er forum# for ac! of cause of action it must
be dismissed% Artices 4DC# 4DB and 4D5 of the
/abor Code $rovideF
.R* >&C* CONR.COR OR
%7BCONR.COR* =henever an
em$o(er enters into contract with
another $erson for the $erformance
of the formerIs wor!# the em$o(ees
of the contractor and of the atterIs
subcontractor# if an(# sha be $aid in
accordance with the $rovisions of
this Code%
)n the event that the
contractor or subcontractor fais to
$a( the wage of his em$o(ees in
accordance with this Code# the
em$o(er sha be 8oint( and
severa( iabe with his contractor or
subcontractor to such em$o(ees to
the e>tent of the wor! $erformed
under the contract# in the same
manner and e>tent that he is iabe
to em$o(ees direct( em$o(ed b(
him%
>>>
.R* >&) IN;IREC EM2LOYER* The
$rovisions of the immediate(
$receding Artice sha i!ewise a$$(
to an( $erson# $artnershi$#
association or cor$oration which# not
being an em$o(er# contracts with
an inde$endent contractor for the
$erformance of an( wor!# tas!# 8ob
or $ro8ect%
.R* >&@* %OLI;.RY LI.BILY* The
$rovisions of e>isting aws to the
contrar( notwithstanding# ever(
em$o(er or indirect em$o(er sha
be hed res$onsibe with his
contractor or subcontractor for an(
vioation of an( $rovision of this
Code% For $ur$oses of determining
the e>tent of their civi iabiit( under
33
this Cha$ter# the( sha be
considered as direct em$o(ers%
As to the second issue# the iabiit( of
the SSS to reimburse $etitioner arises on( if
and when $etitioner $a(s his em$o(ee0securit(
guards 7the increases7 mandated b( =age
2rder .o% .C-0D3%
The records do not show that $etitioner
has $aid the mandated increases to the
securit( guards% The securit( guards in fact
have ,ed a com$aint with the ./-C against
$etitioner reative to# among other things#
under$a(ment of wages%
S'2 +.9&#/ Co%5o%'3.o2 vs. +'#%1
I23#9%'3#0, I21.
G.R. No. )!!672 J&/( )0, 200"
FACTS* "rought before this court is a
$etition see!ing for a review of the Court of
A$$eas1 8udgment% The facts are as foows%
354 wor!ers ,ed com$aints against
San +igue Cor$oration and +aerc )ntegrated
Services# )nc% for iega dismissa#
under$a(ment of wages# non0$a(ment of
service incentive eave $a(s and other abor
standards bene,ts# and for se$aration $a(s
from 3E *une to 3A 2ctober 4554% The
com$ainants aeged that the( were hired b(
S+C through its agent or intermediar( +aerc%
The( were $aid on a $er $iece or pa0iao basis
e>ce$t for a few who wor!ed as chec!ers and
were $aid on dai( wage basis%
S+C denied iabiit( for the caims and
averred that the com$ainants were not its
em$o(ees but of +AH-C%
=hen the service contract was
terminated# com$ainants caimed that S+C
sto$$ed them from $erforming their 8obs? that
this was tantamount to their being iega(
dismissed b( S+C who was their rea em$o(er?
and# that +AH-C was mere( made a too or a
shied b( S+C to avoid its iabiit( under the
/abor Code%
2n 34 *anuar( 455E the /abor Arbiter
rendered a decision hoding that +AH-C was an
inde$endent contractor%

Je dismissed the
com$aints for iega dismissa but hed that
+AH-C and S+C were 8oint( and severa(
iabe to $a( com$ainants their wage
di@erentias%
The .ationa /abor -eations
Commission (./-C) rued in its B *anuar( 455B
decision that +AH-C was a abor0on(
contractor and that com$ainants were
em$o(ees of S+C but sti hed S+C to be
8oint( and severa( iabe with +AH-C for
com$ainants1 se$aration bene,ts%
2n 36 A$ri 3DDD the Court of A$$eas
denied the $etition and a<rmed the decision of
the ./-C%
ISSUE* =hether or not the com$ainants
are em$o(ees of $etitioner S+C or of
res$ondent +AH-C%
HELD* Hvidence discoses that $etitioner
$a(ed a arge and indis$ensabe $art in the
hiring of +AH-C1s wor!ers% )t aso a$$ears that
ma8orit( of the com$ainants had aread( been
wor!ing for S+C ong before the signing of the
service contract between S+C and +AH-C in
4566%
)n abor0on( contracting# the statute
creates an em$o(er0em$o(ee reationshi$ for
a com$rehensive $ur$oseF to $revent a
circumvention of abor aws% The contractor is
considered mere( an agent of the $rinci$a
em$o(er and the atter is res$onsibe to the
em$o(ees of the abor0on( contractor as if
such em$o(ees had been direct( em$o(ed b(
the $rinci$a em$o(er% The $rinci$a em$o(er
therefore becomes soidari( iabe with the
abor0on( contractor for a the rightfu caims
of the em$o(ees%
This distinction between 8ob contractor
and abor0on( contractor# however# wi not
discharge S+C from $a(ing the se$aration
bene,ts of the wor!ers# inasmuch as +AH-C
was shown to be a abor0on( contractor? in
which case# $etitioner1s iabiit( is that of a
direct em$o(er and thus soidari( iabe with
+AH-C%
-es$ondent +aerc )ntegrated Services#
)nc% is decared to be a abor0on( contractor%
According(# both $etitioner San +igue
Cor$oration and res$ondent +aerc )ntegrated
Services# )nc%# are ordered to 8oint( and
severa( $a( com$ainants ($rivate
res$ondents herein) se$aration bene,ts and
wage di@erentias as ma( be ,na(
recom$uted b( the /abor Arbiter as herein
directed# $us attorne(1s fees to be com$uted
on the basis of ten $ercent (4DV) of the
amounts which com$ainants ma( recover
$ursuant to Art% 444 of the /abor Code# as we
as an indemnit( fee of P3#DDD%DD to each
com$ainant%
+'%.v#/#s S4.5('%0 vs. Co&%3 o: A55#'/s
G.R. No. )!!)"! Nov#-$#% )), 200"
FACTS* Sometime in 2ctober 4553#
$etitioner +arivees Shi$(ard Cor$% engaged
the services of /ongest Force )nvestigation and
Securit( Agenc(# )nc% to render securit(
services at its $remises% Petitioner reigious(
com$ied with the terms of the contract#
$rom$t( $a(ing its bis and the contract rates%
Jowever# it found the services unsatisfactor(
and inadequate causing it to terminate its
contract with /ongest Force% /ongest force in
turn terminated the em$o(ment of the securit(
guards de$o(ed to $etitioner%
2n Se$tember 3# 455C $rivate
res$ondents ,ed a case of iega dismissa#
under$a(ment of wages $ursuant to the
P.PS2S)A0PA&PA2 rates# non$a(ment of
overtime $a(# $remium $a( for hoida( and rest
da(# service incentive eave $a(# 43
th
month
$a( and attorne(Is fees against $etitioner and
/ongest Force% /abor Arbiter and ./-C rued in
favor of $rivate res$ondents and decared
/ongest Force and $etitioner 8oint( and
severa( iabe to $a( the mone( caims of
com$ainants%
ISSUE* =hether or not $etitioner is
8oint( and severa( iabe with /ongest Force%
HELD* PetitionerIs iabiit( is 8oint and severa
with /ongest Force $ursuant to Art 4DC# 4DB
and 4D5 of the /abor Code% =hen $etitioner
contracted for securit( services with /ongest
3A
Force as the securit( agenc( that hired $rivate
res$ondents to wor! as guards for the shi$(ard
cor$oration# $etitioner became indirect
em$o(er of $rivate res$ondents $ursuant to
Art 4DB% Foowing Art 4DC# when the agenc( as
contractor faied to $a( the guards# the
cor$oration as $rinci$a becomes 8oint( and
severa( iabe for the guardIs wages%
Petitioner cannot evade its iabiit( b(
caiming that it had reigious( $aid the
com$ensation of the guards as sti$uated under
the contract% /abor Standards are enacted b(
the egisature to aeviate the $ight of wor!ers
whose wages bare( meet the costs of their
basic needs%
Jowever# $etitioner has the right of
reimbursement from his co0debtor%
NE< GOLDEN CITY CUILDERS 7 DEV=T
CORP vs COURT OF APPEALS
G.R. No. )5!7)5 D#1#-$#% )), 200"
FACTS* 2n A$ri A# 455E# $etitioner .ew
Goden Cit( "uiders and &eveo$ment
Cor$oration# a cor$oration engaged in the
construction business# entered into a
construction contract with Prince &avid
&eveo$ment Cor$oration for the construction
of a 4B0store( o<ce and residentia
condominium buiding% Petitioner engaged the
services of .io /a(no "uiders to do the
s$eciai'ed 7concrete wor!s# form wor!s and
stee rebars wor!s7% Pursuant to the contract#
.io /a(no "uiders hired $rivate res$ondents
to $erform wor! at the $ro8ect% After the
com$etion of the $hase for which .io /a(no
"uiders was contracted sometime in 455C#
$rivate res$ondents ,ed a com$aint case
against $etitioner and its $resident# +anue S(#
with the Arbitration "ranch of the ./-C for
7unfair abor $ractice# non0$a(ment of 43th
month $a(# non0$a(ment of E da(s service
incentive eave# iega dismissa and severance
$a( in ieu of reinstatement%7 The /abor Arbiter
rendered a decision ,nding that .io /a(no
"uiders was a abor0on(0contractor? thus#
$rivate res$ondents were deemed em$o(ees
of the $etitioner%
ISSUES* =hether .io /a(no "uiders was
an 7inde$endent contractor7 or a 7abor0on(7
contractor%
=hether or not there e>isted an
em$o(er0em$o(ee reationshi$ between the
$etitioner and the res$ondent%
HELD* Section 6# -ue :)))# "oo! )))# of the
2mnibus -ues )m$ementing the /abor Code#
an inde$endent contractor is one who
underta!es 78ob contracting#7 i%e%# a $erson
whoF
(a) carries on an inde$endent business
and underta!es the contract wor! on his own
account under his own res$onsibiit( according
to his own manner and method# free from the
contro and direction of his em$o(er or
$rinci$a in a matters connected with the
$erformance of the wor! e>ce$t as to the
resuts thereof? and
(b) has substantia ca$ita or investment
in the form of toos# equi$ments# machineries#
wor! $remises# and other materias which are
necessar( in the conduct of the business%

.io /a(no "uiders is underta!ing
$ermissibe abor or 8ob contracting% .io /a(no
"uiders is a du( icensed abor contractor
carr(ing on an inde$endent business for a
s$eciai'ed wor! that invoves the use of some
$articuar# unusua and $ecuiar s!is and
e>$ertise# i!e concrete wor!s# form wor!s and
stee rebars wor!s% As a icensed abor
contractor# it com$ied with the conditions set
forth in Section E# -ue :))0A# "oo! )))# -ues to
)m$ement the /abor Code# among others#
$roof of ,nancia ca$abiit( and ist of
equi$ment# toos# machineries and im$ements
to be used in the business% Further# it entered
into a written contract with the $etitioner# a
requirement under Section 3# -ue :))0A# "oo!
)))# -ues to )m$ement the /abor Code to
assure the em$o(ees of the minimum abor
standards and bene,ts $rovided b( e>isting
aws%
The test to determine the e>istence of
inde$endent contractorshi$ is whether one
caiming to be an inde$endent contractor has
contracted to do the wor! according to his own
methods and without being sub8ect to the
contro of the em$o(er# e>ce$t on( to the
resuts of the wor!% This is e>act( the situation
obtaining in the case at bar% .io /a(no "uiders
hired its own em$o(ees# the $rivate
res$ondents# to do s$eciai'ed wor! in the
Prince &avid Pro8ect of the $etitioner% The
means and methods ado$ted b( the $rivate
res$ondents were directed b( .io /a(no
"uiders e>ce$t that# from time to time# the
engineers of the $etitioner visited the site to
chec! whether the wor! was in accord with the
$ans and s$eci,cations of the $rinci$a%

Second issue# we hod that there e>isted
an em$o(er0em$o(ee reationshi$ between
$etitioner and $rivate res$ondents abeit for a
imited $ur$ose% In le"itimate <ob contractin",
t!e la# creates an emplo,er$emplo,ee
relations!ip +or a limited purpose, i*e*, to
ensure t!at t!e emplo,ees are paid t!eir
#a"es* The $rinci$a em$o(er becomes 8oint(
and severa( iabe with the 8ob contractor on(
for the $a(ment of the em$o(ees1 wages
whenever the contractor fais to $a( the same%
2ther than that# the $rinci$a em$o(er is not
res$onsibe for an( caim made b( the
em$o(ees% From the foregoing disquisition# the
$etitioner did not# as it coud not# iega(
dismiss the $rivate com$ainants% Jence# it
coud not be hed iabe for bac!wages and
se$aration $a(% .evertheess# it is 8oint( and
severa( iabe with .io /a(no "uiders for the
$rivate com$ainants1 wages# in the same
manner and e>tent that it is iabe to its direct
em$o(ees% The $ertinent $rovisions of the
/abor Code readF
A-T% 4DC% Contractor or
subcontractor% U =henever an em$o(er
enters into a contract with another
$erson for the $erformance of the
former1s wor!# the em$o(ees of the
contractor and of the atter1s
subcontractor# if an(# sha be $aid in
accordance with the $rovisions of this
Code% )n the event that the contractor or
subcontractor fais to $a( the wages of
his em$o(ees in accordance with this
Code# the em$o(er sha be 8oint( and
3E
severa( iabe with his contractor or
subcontractor to such em$o(ees to the
e>tent of the wor! $erformed under the
contract# in the same manner and
e>tent that he is iabe to em$o(ees
direct( em$o(ed b( him%
A-T% 4DB% )ndirect em$o(er% U
The $rovisions of the immediate(
$receding Artice sha i!ewise a$$( to
an( $erson# $artnershi$# association or
cor$oration which# not being an
em$o(er# contracts with an
inde$endent contractor for the
$erformance of an( wor!# tas!# 8ob or
$ro8ect%
N'3.o2'/ Foo0 A&34o%.3( vs. +'s'0'
S#1&%.3( A9#21(, I21.
G.R. No. )6"!!6 +'%14 6, 2005
FACTS* 2n Se$tember 4B# 455C
res$ondent +asada Securit( Agenc(# )nc%
entered into a one (ear contract to $rovide
securit( services to the o<ces# warehouses and
instaations of .FA within -eg% )% U$on the
e>$iration of the contract# the $arties e>tended
the e@ectivit( thereon on a month( basis
under the same terms and conditions%
-T=P" issued severa wage orders
mandating increases in the dai( wage rates%
According(# res$ondent requested .FA for a
corres$onding u$ward ad8ustment in the
month( contract rate consisting of the
increases in the dai( minimum wage of the
securit( guards incuding the corres$onding
raise in their overtime $a(# hoida( $a(# 43
th
month $a(# hoida( and rest da( $a(% )t aso
caimed increases in SSS and Pag0ibig
$remiums incuding administrative cost and
margin%
.FA granted the request on( with
res$ect to the dai( wage and denied with
res$ect to the ad8ustments in the other bene,ts
and remunerations%
-egiona &irector and &2/H Secretar(
sustained the caim of defendant% -TC and CA
aso rued in favor of defendant%
ISSUE* =hether or not the iabiit( of
$rinci$as in service contracts under Sec C of
-ACB3B and wage orders issued b( the -T=P"
is imited on( to the increment in minimum
wage%
HELD* Nes# the $rinci$aIs iabiit( is imited
on( to the $a(ment of the increment in the
statutor( minimum wage rate# that is# the rate
for a reguar 60hour wor! da(%
The term LwageM as used in Sec C of
-ACB3B $ertains to no other than the Lstatutor(
minimum wageM which is de,ned in the
im$ementing rues as the owest wage rate
,>ed b( aw that an em$o(er can $a( his
wor!er% The basis under Sec B is the norma
wor!ing hours which sha not e>ceed 6 hours a
da(%
=here a statute# b( its terms# is
e>$ress( imited to certain matters# it ma( not#
b( inter$retation and construction# be e>tended
to others% The $rinci$as in service contracts
cannot be made to $a( the corres$onding wage
increase in the overtime $a(# night shift
di@erentia# hoida( and rest da( $a(# $remium
$a( and other bene,ts granted to wor!ers%
=hie the basis of said remuneration and
bene,ts is the statutor( minimum wage# the
aw cannot be undu( e>$anded as to incude
those not stated in the sub8ect $rovision%
The $arties ma( enter into sti$uations
increasing the iabiit( of the $rinci$a# but as
ong as the minimum obigation is com$ied
with# there is no vioation of the =age
-ationai'ation Act%
ACELLA V. PLDT G.R. No. )5!6
J&2# 6, 2005
FACTS* -es$ondent PS) entered into an
agreement with P/&T to $rovide the atter with
securit( guards% Under the agreement# it was
e>$ress( $rovided that there sha be no
em$o(er0em$o(ee reationshi$ between P/&T
and the securit( guards# which ma( be su$$ied
b( PS)# and that the atter sha have e>cusive
authori'ed to seect# engage# and discharge its
securit( guards# with fu contro over their
wages# saaries or com$ensation%
Consequent(# res$ondent PS) de$o(ed
securit( guards to the P/&T% 2n *une E# 455E#
CE securit( guards su$$ied b( PS) ,ed a
com$aint for reguari'ation against P/&T with
the /abor Arbiter% The( aeged that the( have
been em$o(ed b( the com$an( for more than
4 (ear and that the( were under the contro
and su$ervision of P/&T through its Securit(
&e$artment# therefore the( shoud be
considered as reguar em$o(ees%
HELD* )n determining which between P/&T
and PS) is the em$o(er of the securit( guards#
the e>istence of the foowing factors shoud be
consideredF (4) seection and engagement of
the em$o(ee? (3) $a(ment of wages? (3) $ower
to dismiss? and (A) $ower to contro em$o(eeIs
conduct% The Su$reme Court ado$ted the
consistent ,ndings based on the evidence
adduced that it was PS) which e>ercised the
abovementioned criteria% Furthermore# the
court added PS) was# in fact# a egitimate 8ob
contractor% )t is a registered cor$oration du(
icensed b( the P.P to engage in securit(
business% )t has substantia ca$ita and
investment in the form of guns# ammunitions#
equi$ments# vehices# etc%# and abase a# it is
servicing other cients i!e PC) "an! and Crown
Trium$h# among others% )ndeed# said securit(
guards are aread( the em$o(eeIs of PS) $rior
to their assignment to P/&T%
S'2 +.9&#/ Co%5o%'3.o2 vs. A$'//'
G.R. No. )!0)) J&2# 26, 2005
FACTS* Petitioner San +igue Cor$oration
(S+C) and SunKower +uti0Pur$ose Coo$erative
(SunKower) entered into a one0(ear Contract of
Services commencing on *anuar( 4# 4553# to be
renewed on a month to month basis unti
terminated b( either $art(%
Pursuant to the contract# SunKower
engaged $rivate res$ondents to# as the( did#
render services at S+CIs "acood Shrim$
Processing Pant at Sta% Fe# "acood Cit(% The
contract was deemed renewed b( the $arties
ever( month after its e>$iration on *anuar( 4#
3C
455A and $rivate res$ondents continued to
$erform their tas!s unti Se$tember 44# 455E%
)n *u( 455E# $rivate res$ondents ,ed a
com$aint before the ./-C# $ra(ing to be
decared as reguar em$o(ees of S+C# with
caims for recover( of a bene,ts and $rivieges
en8o(ed b( S+C ran! and ,e em$o(ees%
Private res$ondents subsequent( ,ed on
Se$tember 3E# 455E an Amended Com$aint to
incude iega dismissa as additiona cause of
action foowing S+CIs cosure of its "acood
Shrim$ Processing Pant on Se$tember 4E#
455E which resuted in the termination of their
services%
S+C ,ed a +otion for /eave to Fie
Attached Third Part( Com$aint dated
.ovember 3B# 455E to im$ead SunKower as
Third Part( &efendant which was granted b(
the /abor Arbiter% S+C insists that $rivate
res$ondents are the em$o(ees of SunKower#
an inde$endent contractor% 2n the other hand#
$rivate res$ondents assert that SunKower is a
abor0on( contractor%
ISSUE* =hether or not res$ondents are
em$o(ees of S+C%
HELD* There is Labor0on(M contracting where
the $erson su$$(ing wor!ers to an em$o(er
does not have substantia ca$ita or investment
in the form of toos# equi$ment# machineries#
wor! $remises# among others# and the wor!ers
recruited and $aced b( such $erson are
$erforming activities which are direct( reated
to the $rinci$a business of such em$o(er% )n
such cases# the $erson or intermediar( sha be
considered mere( as an agent of the em$o(er
who sha be res$onsibe to the wor!ers in the
same manner and e>tent as if the atter were
direct( em$o(ed b( him%
The test to determine the e>istence of
inde$endent contractorshi$ is whether one
caiming to be an inde$endent contractor has
contracted to do the wor! according to his own
methods and without being sub8ect to the
contro of the em$o(er# e>ce$t on( as to the
resuts of the wor!%
The Contract of Services between S+C
and SunKower shows that the $arties cear(
disavowed the e>istence of an em$o(er0
em$o(ee reationshi$ between S+C and
$rivate res$ondents% The anguage of a
contract is not# however# determinative of the
$artiesI reationshi$? rather it is the totait( of
the facts and surrounding circumstances of the
case%
=hat a$$ears is that SunKower does not
have substantia ca$itai'ation or investment in
the form of toos# equi$ment# machineries#
wor! $remises and other materias to quaif( it
as an inde$endent contractor% 2n the other
hand# it is gathered that the ot# buiding#
machineries and a other wor!ing toos utii'ed
b( $rivate res$ondents in carr(ing out their
tas!s were owned and $rovided b( S+C% And
from the 8ob descri$tion $rovided b( S+C itsef#
the wor! assigned to $rivate res$ondents was
direct( reated to the aquacuture o$erations of
S+C% Undoubted(# the nature of the wor!
$erformed b( $rivate res$ondents in shrim$
harvesting# receiving and $ac!ing formed an
integra $art of the shrim$ $rocessing
o$erations of S+C%
Furthermore# SunKower did not carr( on
an inde$endent business or underta!e the
$erformance of its service contract according to
its own manner and method# free from the
contro and su$ervision of its $rinci$a# S+C# its
a$$arent roe having been mere( to recruit
$ersons to wor! for S+C% SunKower did not
cater to cients other than S+C# and with the
cosure of S+CIs "acood Shrim$ Processing
Pant# SunKower i!ewise ceased to e>ist%
Since $rivate res$ondents who were
engaged in shrim$ $rocessing $erformed tas!s
usua( necessar( or desirabe in the
aquacuture business of S+C# the( shoud be
deemed reguar em$o(ees of the atter and as
such are entited to a the bene,ts and rights
a$$urtenant to reguar em$o(ment%
Those $erforming 8anitoria and
messengeria services however acquired
reguar status on( after rendering one0(ear
service $ursuant to Artice 36D of the /abor
Code% Athough 8anitoria and messengeria
services are considered direct( reated to the
aquacuture business of S+C# the( are deemed
unnecessar( in the conduct of its $rinci$a
business%
+ANILA ELECTRIC CO+PANY VS. ROGELIO
CENA+IRA, ET. AL
JULY )!, 2005
FACTS* The individua res$ondents are
icensed securit( guards former( em$o(ed b(
Peo$eIs Securit(# )nc% and de$o(ed as such at
+H-A/C2Is head o<ce in 2rtigas Avenue#
Pasig# +etro +ania% 2n .ov% 3D# 455D# the
securit( service agreement between PS) and
+H-A/C2 was terminated%
)mmediate( thereafter# EC of PS)Is
securit( guards# incuding herein eight
individua res$ondents# ,ed a com$aint for
un$aid monetar( bene,ts against PS) and
+H-A/C2%
+eanwhie# the securit( service
agreement between res$ondent Armed
Securit( W &etective Agenc(# )nc%# (AS&A)) and
+H-A/C2 too! e@ect on &ec% 4# 455D%
Subsequent(# the individua res$ondents were
absorbed b( AS&A) and retained at +H-A/C2Is
head o<ce%
2n *une 35# 4553# the abor arbiter
rendered a decision in favor of the former PS)
securit( guards# incuding the individua
res$ondents% /ess than a month ater# the
individua res$ondents ,ed another com$aint
for un$aid monetar( bene,ts# this time against
AS&A) and +H-A/C2%
2n *u( 3E# 4553# the securit( service
agreement between res$ondent Advance
Forces Securit( W )nvestigation Services# )nc%
(AFS)S)) and +H-A/C2 too! e@ect# terminating
the $revious securit( service agreement with
AS&A)% H>ce$t as to the number of securit(
guards# the amount to be $aid the agenc(# and
the e@ectivit( of the agreement# the terms and
conditions were substantia( identica with the
securit( service agreement with AS&A)%
The individua res$ondents amended
their com$aint to im$ead AFS)S) as $art(
res$ondent% The( then again amended their
com$aint to aege that AFS)S) terminated their
services on August C# 4553 without notice and
3B
8ust cause and therefore guit( of iega
dismissa%
The individua res$ondents aeged
thatF +H-A/C2 and AS&A) never $aid their
overtime $a(# service incentive eave $a(#
$remium $a( for Sunda(s and Joida(s# PED%DD
month( uniform aowance and under$aid their
43
th
month $a(? on *u( 3A# 4553# when the
securit( service agreement of AS&A) was
terminated and AFS)S) too! over the securit(
functions of the former on *u( 3E# 4553#
res$ondent securit( guard "enamira was no
onger given an( wor! assignment when AFS)S)
earned that the former has a $ending case
against PS)# in e@ect# dismissing him from the
service without 8ust cause? and# the rest of the
individua res$ondents were absorbed b( AFS)S)
but were not given an( assignments# thereb(
dismissing them from the service without 8ust
cause%
AS&A) denied in genera terms an(
iabiit( for the caims of the individua
res$ondents# caiming that there is nothing due
them in connection with their services%
2n the other hand# +H-A/C2 denied
iabiit( on the ground of ac! of em$o(er0
em$o(ee reationshi$ with individua
res$ondents% )t averred that the individua
res$ondents are the em$o(ees of the securit(
agencies it contracted for securit( services?
and that it has no e>isting iabiit( for the
individua res$ondentsI caims since said
securit( agencies have been fu( $aid for their
services $er their res$ective securit( service
agreement%
For its $art# AFS)S) asserted thatF it is
not iabe for iega dismissa since it did not
absorb or hire the individua res$ondents# the
atter were mere( hod0over guards from
AS&A)? it is not obiged to em$o( or absorb the
securit( guards of the agenc( it re$aced since
there is no $rovision in its securit( service
agreement with +H-A/C2 or in aw requiring it
to absorb and hire the guards of AS&A) as it has
its own guards du( trained to service its
various cients%
2n *anuar( 3# 455A# after the
submission of their res$ective evidence and
$osition $a$ers# the abor arbiter rendered a
&ecision hoding AS&A) and +H-A/C2 8oint(
and soidari( iabe to the monetar( caims of
individua res$ondents and dismissing the
com$aint against AFS)S)% A the $arties# e>ce$t
AFS)S)# a$$eaed to the ./-C% ./-C a<rmed in
toto the decision of the /abor Arbiter%

The
individua res$ondents ,ed a motion for $artia
reconsideration but it was denied b( the ./-C%
The individua res$ondents ,ed a
$etition for certiorari before the SC% The(
insisted that the( were absorbed b( AFS)S) and
the atter e@ected their termination without
notice and 8ust cause% After the submission of
the res$onsive $eadings and memoranda# SC
referred the $etition to the CA which# modi,ed
the decision of the ./-C b( decaring +H-A/C2
as the direct em$o(er of the individua
res$ondents%
The CA hed thatF +H-A/C2 changed the
securit( agenc( manning its $remises three
times whie engaging the services of the same
$eo$e# the individua res$ondents? +H-A/C2
em$o(ed a scheme of hiring guards through
an agenc( and $eriodica( entering into
service contract with one agenc( after another
in order to evade the securit( of tenure of
individua res$ondents? individua res$ondents
are reguar em$o(ees of +H-A/C2 since their
services as securit( guards are usua(
necessar( or desirabe in the usua business or
trade of +H-A/C2 and the( have been in the
service of +H-A/C2 for no ess than si> (ears?
an em$o(er0em$o(ee reationshi$ e>ists
between +H-A/C2 and the individua
res$ondents becauseF (a) +H-A/C2 had the
,na sa( in the seection and hiring of the
guards# as when its advice was $roved to have
carried weight in AFS)S)Is decision not to
absorb the individua res$ondents into its
wor!force? (b) +H-A/C2 $aid the wages of
individua res$ondents through AS&A) and
AFS)S)? (c) +H-A/C2Is discretion on matters of
dismissa of guards was given great weight and
even ,nait( since the record shows that the
individua res$ondents were re$aced u$on the
advice of +H-A/C2? and# (d) +H-A/C2 has the
right# at an( time# to ins$ect the guards# to
require without e>$anation the re$acement of
an( guard whose behavior# conduct or
a$$earance is not satisfactor( and AS&A) and
AFS)S) cannot $u out an( securit( guard from
+H-A/C2 without the atterIs consent? and# a
abor0on( contract e>isted between AS&A) and
AFS)S) and +H-A/C2# such that +H-A/C2 is
guit( of iega dismissa without 8ust cause and
iabe for reinstatement of individua
res$ondents to its wor!force%
HELD* At the outset# we note that the
individua res$ondents never aeged in their
com$aint in the /abor Arbiter# in their a$$ea
in the ./-C and even in their $etition for
certiorari in the CA that +H-A/C2 was their
em$o(er% The( have awa(s advanced the
theor( that AFS)S) is their em$o(er% A $erusa
of the records shows it was on( in their
+emorandum in the CA that this thesis was
$resented and discussed for the ,rst time% =e
cannot ignore the fact that this $osition of
individua res$ondents runs contrar( to their
earier submission in their $eadings ,ed in the
/abor Arbiter# ./-C and even in the $etition for
certiorari in the CA that AFS)S) is their em$o(er
and iabe for their termination% As the ob8ect
of the $eadings is to draw the ines of batte#
so to s$ea!# between the itigants and to
indicate fair( the nature of the caims or
defenses of both $arties# a $art( cannot
subsequent( ta!e a $osition contrar( to# or
inconsistent# with his $eadings%
+oreover# it is a fundamenta rue of
$rocedure that higher courts are $recuded
from entertaining matters neither aeged in the
$eadings nor raised during the $roceedings
beow# but ventiated for the ,rst time on( in a
motion for reconsideration or on a$$ea%

The
individua res$ondents are bound b( their
submissions that AFS)S) is their em$o(er and
the( shoud not be $ermitted to change their
theor(% Such a change of theor( cannot be
toerated on a$$ea# not due to the strict
a$$ication of $rocedura rues but as a matter
of fairness% A change of theor( on a$$ea is
ob8ectionabe because it is contrar( to the rues
of fair $a(# 8ustice and due $rocess%
Thus# the CA shoud not have
considered the new theor( o@ered b( the
individua res$ondents in their memorandum%
36
)n this case# the terms and conditions
embodied in the securit( service agreement
between +H-A/C2 and AS&A) e>$ress(
recogni'ed AS&A) as the em$o(er of individua
res$ondents%
Under the securit( service agreement# it
was AS&A) which (a) seected# engaged or hired
and discharged the securit( guards? (b)
assigned them to +H-A/C2 according to the
number agreed u$on? (c) $rovided the uniform#
,rearms and ammunition# nightstic!s#
Kashights# raincoats and other $ara$hernaia
of the securit( guards? (d) $aid them saaries or
wages? and# (e) disci$ined and su$ervised
them or $rinci$a( controed their conduct%
The agreement even e>$icit( $rovided that
LQnRothing herein contained sha be understood
to ma!e the securit( guards under this
Agreement# em$o(ees of the C2+PA.N# it
being cear( understood that such securit(
guards sha be considered as the( are#
em$o(ees of the AGH.CN aone%M Cear(# the
individua res$ondents are the em$o(ees of
AS&A)%
As to the $rovision in the agreement
that +H-A/C2 reserved the right to see!
re$acement of an( guard whose behavior#
conduct or a$$earance is not satisfactor(# such
mere( con,rms that the $ower to disci$ine
ies with the agenc(% )t is a standard sti$uation
in securit( service agreements that the cient
ma( request the re$acement of the guards to
it% Service0oriented enter$rises# such as the
business of $roviding securit( services#
genera( adhere to the business adage that
Lthe customer or cient is awa(s rightM and#
thus# must satisf( the interests# conform to the
needs# and cater to the reasonabe im$ositions
of its cients%
.either is the sti$uation that the
agenc( cannot $u out an( securit( guard from
+H-A/C2 without its consent an indication of
contro% )t is sim$( a securit( cause designed
to $revent the agenc( from uniatera(
removing its securit( guards from their
assigned $osts at +H-A/C2Is $remises to the
atterIs detriment%
The cause that +H-A/C2 has the right at a
times to ins$ect the guards of the agenc(
detaied in its $remises is i!ewise not
indicative of contro as it is not a uniatera
right% The agreement $rovides that the agenc(
is $rinci$a( mandated to conduct ins$ections#
without $re8udice to +H-A/C2Is right to
conduct its own ins$ections%
.eedess to stress# for the $ower of
contro to be $resent# the $erson for whom the
services are rendered must reserve the right to
direct not on( the end to be achieved but aso
the means for reaching such end%

.ot a rues
im$osed b( the hiring $art( on the hired $art(
indicate that the atter is an em$o(ee of the
former%

-ues which serve as genera guideines
towards the achievement of the mutua(
desired resut are not indicative of the $ower of
contro%
The securit( service agreements in the
$resent case $rovided that a s$eci,c
instructions b( +H-A/C2 reating to the
discharge b( the securit( guards of their duties
sha be directed to the agenc( and not direct(
to the individua res$ondents% The individua
res$ondents faied to show that the rues of
+H-A/C2 controed their $erformance%
+oreover# AS&A) and AFS)S) are not
Labor0on(M contractors% There is Labor on(M
contract when the $erson acting as contractor
is considered mere( as an agent or
intermediar( of the $rinci$a who is res$onsibe
to the wor!ers in the same manner and to the
same e>tent as if the( had been direct(
em$o(ed b( him% 2n the other hand# L8ob
(inde$endent) contractingM is $resent if the
foowing conditions are metF (a) the contractor
carries on an inde$endent business and
underta!es the contract wor! on his own
account under his own res$onsibiit( according
to his own manner and method# free from the
contro and direction of his em$o(er or
$rinci$a in a matters connected with the
$erformance of the wor! e>ce$t to the resut
thereof? and (b) the contractor has substantia
ca$ita or investments in the form of toos#
equi$ment# machineries# wor! $remises and
other materias which are necessar( in the
conduct of his business% Given the above
distinction and the $rovisions of the securit(
service agreements entered into b( $etitioner
with AS&A) and AFS)S)# we are convinced that
AS&A) and AFS)S) were engaged in 8ob
contracting%
The individua res$ondents cannot be
considered as reguar em$o(ees of the
+H-A/C2 for# athough securit( services are
necessar( and desirabe to the business of
+H-A/C2# it is not direct( reated to its
$rinci$a business and ma( even be considered
unnecessar( in the conduct of +H-A/C2Is
$rinci$a business# which is the distribution of
eectricit(%
Furthermore# the fact that the individua
res$ondents ,ed their caim for un$aid
monetar( bene,ts against AS&A) is a cear
indication that the individua res$ondents
ac!nowedge that AS&A) is their em$o(er%
=e cannot give credence to individua
res$ondentsI insistence that the( were
absorbed b( AFS)S) when +H-A/C2Is securit(
service agreement with AS&A) was terminated%
The individua res$ondents faied to $resent
an( evidence to con,rm that AFS)S) absorbed
them into its wor!force% Thus# res$ondent
"enamira was not retained in his $ost at
+H-A/C2 since *u( 3E# 4553 due to the
termination of the securit( service agreement
of +H-A/C2 with AS&A)% As for the rest of the
individua res$ondents# the( retained their $ost
on( as Lhod0overM guards unti the securit(
guards of AFS)S) too! over their $ost on August
C# 4553%
)n the $resent case# res$ondent
"enamira has been Lo@0detaiM for seventeen
da(s whie the rest of the individua
res$ondents have on( been Lo@0 detaiM for
,ve da(s when the( amended their com$aint
on August 44# 4553 to incude the charge of
iega dismissa% The incusion of the charge of
iega dismissa then was $remature%
.onetheess# bearing in mind that AS&A) sim$(
sto$$ed giving the individua res$ondents an(
assignment and their inactivit( cear(
$ersisted be(ond the si>0month $eriod aowed
b( Artice 36C of the /abor Code# the individua
res$ondents were# in e@ect# constructive(
dismissed b( AS&A) from em$o(ment# hence#
the( shoud be reinstated%
The fact that there is no actua and
direct em$o(er0em$o(ee reationshi$ between
35
+H-A/C2 and the individua res$ondents does
not e>onerate +H-A/C2 from iabiit( as to the
monetar( caims of the individua res$ondents%
=hen +H-A/C2 contracted for securit(
services with AS&A) as the securit( agenc( that
hired individua res$ondents to wor! as guards
for it# +H-A/C2 became an indirect em$o(er
of individua res$ondents $ursuant to Artice
4DB of the /abor Code# which readsF A-T% 4DB%
Indirect emplo,er $ The $rovisions of the
immediate( $receding Artice sha i!ewise
a$$( to an( $erson# $artnershi$# association or
cor$oration which# not being an em$o(er#
contracts with an inde$endent contractor for
the $erformance of an( wor!# tas!# 8ob or
$ro8ect%
=hen AS&A) as contractor faied to $a(
the individua res$ondents# +H-A/C2 as
$rinci$a becomes 8oint( and severa( iabe
for the individua res$ondentsI wages# under
Artices 4DC and 4D5 of the /abor Code# which
$rovideF
A-T% 4DC% Contractor or
subcontractor* $ =henever an em$o(er
enters into a contract with another
$erson for the $erformance of the
formerQXsR wor!# the em$o(ees of the
contractor and of the atterQXsR
subcontractor# if an(# sha be $aid in
accordance with the $rovisions of this
Code%
)n the event that the contractor
or subcontractor fais to $a( the wages
of his em$o(ees in accordance with this
Code# the em$o(er sha be 8oint( and
severa( iabe with his contractor or
subcontractor to such em$o(ees to the
e>tent of the wor! $erformed under the
contract# in the same manner and
e>tent that he is iabe to em$o(ees
direct( em$o(ed b( him% 9>>
A-T% 4D5% %olidar, liabilit, $ The
$rovisions of e>isting aws to the
contrar( notwithstanding# ever(
em$o(er or indirect em$o(er sha be
hed res$onsibe with his contractor or
subcontractor for an( vioation of an(
$rovision of this Code% For $ur$ose of
determining the e>tent of their civi
iabiit( under this Cha$ter# the( sha be
considered as direct em$o(ers%
AS&A) is hed iabe b( virtue of its
status as direct em$o(er# whie +H-A/C2 is
deemed the indirect em$o(er of the individua
res$ondents for the $ur$ose of $a(ing their
wages in the event of faiure of AS&A) to $a(
them% This statutor( scheme gives the
wor!ers the am$e $rotection consonant with
abor and socia 8ustice $rovisions of the 456B
Constitution%
Jowever# as hed in Mariveles %!ip,ard
Corp* vs* Court o+ .ppeals, the soidar( iabiit(
of +H-A/C2 with that of AS&A) does not
$recude the a$$ication of Artice 434B of the
Civi Code on the right of reimbursement from
his co0debtor b( the one who $aid# which
$rovidesF
A-T% 434B% Pa(ment made b(
one of the soidar( debtors e>tinguishes
the obigation% )f two or more soidar(
debtors o@er to $a(# the creditor ma(
choose which o@er to acce$t%
Je who made the $a(ment ma(
caim from his co0debtors on( the share
which corres$onds to each# with the
interest for the $a(ment aread( made%
)f the $a(ment is made before the debt
is due# no interest for the intervening
$eriod ma( be demanded%
=hen one of the soidar( debtors
cannot# because of his insovenc(#
reimburse his share to the debtor $a(ing
the obigation# such share sha be borne
b( a his co0debtors# in $ro$ortion to the
debt of each%
AS&A) ma( not see! e>cu$ation b(
caiming that +H-A/C2Is $a(ments to it were
inadequate for the individua res$ondentsI
awfu com$ensation% As an em$o(er# AS&A) is
charged with !nowedge of abor aws and the
adequac( of the com$ensation that it demands
for contractua services is its $rinci$a concern
and not an( otherIs%
GRANSPAN DEVELOP+ENT CORPORATION
VS. CERNARDO G.R. No. )!)!6!.
S#53#-$#% 2), 2005
FACTS* A com$aint for iega dismissa
and non0$a(ment of bene,ts was ,ed with the
/abor Arbiter b( res$ondents# against
Grands$an &eveo$ment Cor$oration%
-es$ondents aeged that the( were em$o(ed
as truc! scae monitors b( $etitioner%
Hventua(# the( were assigned at its Truc!
Scae Section of the =arehouseG+aterias
&e$artment% The( were issued identi,cation
cards signed b( "onifacio Semo# $etitionerIs
$ersonne manager% 2n 2ctober 36# 4553#
$etitioner sent them a notice terminating their
services e@ective 2ctober 35# 4553 for using
$rofane or o@ensive anguage# in vioation of
Artice :) (3) (a) of the com$an(Is -ues and
-eguations% Petitioner denied the aegations of
res$ondents in their com$aint# caiming that
the( are em$o(ees of *% .arag Construction%
Sometime in the third quarter of 4553# Canad
*a$an Co%# /td% engaged $etitionerIs services for
fabrication wor!s of severa round and
rectanguar stee tan!s needed for the JC+G or
Sogo $ro8ect due for com$etion in Se$tember#
4553% As a consequence# $etitioner
subcontracted the services of *% .arag
Construction which# in turn# assigned its 3
he$ers (herein res$ondents) to wor! for
$etitionerIs $ro8ect% /abor Arbiter rendered a
&ecision dismissing res$ondentsI com$aint%
.ationa /abor -eations Commission# however#
issued a -esoution remanding the case to the
/abor Arbiter% The A$$eate Court rendered a
&ecision setting aside the ./-CIs -esoutions
and ordering $etitioner (4) to reinstate
res$ondents "ernardo and CeYido'a to their
former $ositions and $a(# 8oint( and severa(
with *% .arag Construction# their bac!wages
and other bene,ts# and (3) to $a( res$ondent
&e Prado his se$aration $a(% The Court of
A$$eas found that res$ondents are em$o(ees
of $etitioner? that the( were non0$ro8ect
wor!ers? and that the( were denied due
$rocess%
ISSUE* =hether or not the Court of
A$$eas erred in hoding that res$ondents are
3D
em$o(ees of $etitioner%
HELD* 2n the basis of the records# we have no
reason to deviate from the A$$eate CourtIs
,nding that *% .arag Construction is indeed a
abor0on( contractor% The Court of A$$eas
found that *% .arag Construction assigned
res$ondents to $erform activities direct(
reated to the main business of $etitioner%
The( wor!ed in $etitionerIs $remises# using its
equi$ment# materias and su$$ies% *% .arag
ConstructionIs $a(ro wor!sheets covering the
$eriod from &ecember 34# 455D to *u( 34#
4554 show that the $a(ment of their saaries
was a$$roved b( $etitioner% The manager and
su$ervisor of $etitionerIs =arehouse
&e$artment su$ervised the manner and resuts
of their wor!% )t was $etitioner who terminated
their services after ,nding them guit( of using
$rofane or o@ensive anguage in vioation of
Artice :) (3) (a) of the com$an(Is -ues and
-eguations% The A$$eate Court then
concuded that these circumstances con,rm
the e>istence of an em$o(er0em$o(ee
reationshi$ between $etitioner and
res$ondents% These are the reasonsF (4) it is
not registered as a buiding contractor with the
SHC? (3) it has no contract with $etitioner? and
(3) there is no $roof of its ,nancia ca$abiit(
and has no ist of equi$ment# toos#
machineries and im$ements used in the
business% Cear(# *% .arag Construction coud
not be res$ondentsI em$o(er% /i!ewise# as
correct( observed b( the Court of A$$eas#
$etitioner faied to $resent an( re$ort
terminating the services of res$ondents when
its $ro8ects were actua( ,nished% Section 3%3
(e) of the /abor &e$artment 2rder .o% 45
e>$ress( $rovides that the re$ort of
termination is one of the indications of $ro8ect
em$o(ment% =e# therefore# u$hod the ,nding
of the Court of A$$eas that res$ondents are
$etitionerIs reguar em$o(ees% As such# the(
are entited to securit( of tenure and can on(
be dismissed for a 8ust or authori'ed cause# as
$rovided b( Artice 3B5 of the /abor Code%
A%2&/:o C. A1#v#0o vs. A0v'23s'%
Co-5'2( I21.
G.R. No. )57656. Nov#-$#% )), 2005
FACTS* The Advanstar Com$an( )nc%
(AC)) was engaged in the distribution and sae
of various brands of iquor and acohoic s$irits#
incuding the Tandua( "rand% Fei$e /oi was
em$o(ed as its manager% To e@ective( aunch
its vigorous mar!eting o$erations# AC) hired
severa saesmen# one of whom was Ton(
*aa$adan% 2n Se$tember 4# 455A# AC)
e>ecuted an Agreement for the Sae of
+erchandise with *aa$adan for a $eriod of one
(ear# renewabe for another (ear under the
same terms and conditions%
Under the agreement# the $arties
agreed# inter aia# that *aa$adan woud
$romote and se $roducts of AC)# soicit from
customers and outets within his designated
territor(# coect $a(ments from such
customers and account the same to AC) and
was aso authori'ed to em$o( and discharge a
driver and other assistants as he deemed
necessar(% )t was sti$uated# however# that the
hired hands woud be considered his
em$o(ees# and that he aone woud be iabe
for their com$ensation and actua e>$enses#
incuding meas whie on dut(%
2n August E# 455B# *aa$adan hired
Arnufo Acevedo as the driver of the truc!
assigned to him b( AC)% 2n 2ctober B# 4556#
Acevedo faied to re$ort for wor!% The ne>t
da(# *aa$adan inquired wh( he faied to chec!
and wash the truc!% *aa$adan berated
Acevedo and ordered him to get his $ersona
beongings and eave% Acevedo did as he was
tod% /ater# *aa$adan urged Acevedo to go
bac! to wor!# stating that the( were Lone big
fami(#M but Acevedo refused% Je then signed a
/etter dated 2ctober 4D# 4556# informing
*aa$adan that he was resigning e@ective that
date% Jowever# on 2ctober 3C# 4556# Acevedo
,ed a com$aint against *aa$adan# AC) and its
genera manager# Fei$e /oi# for iega
dismissa and for the recover( of bac!wages
and other monetar( bene,ts%
ISSUES* =hether or not the res$ondent
AC) was the em$o(er of res$ondent#
*aa$adan;
=hether or not the $etitioner is the
em$o(ee of res$ondent AC);
=hether or not the $etitioner resigned
from his em$o(ment;
HELD* 2n the ,rst and second issues# the
$etitioner avers that res$ondent *aa$adan was
a abor0on( contractor# not an inde$endent
contractor# hence# mere( an agent of
res$ondent AC)% Consequent(# the atter is
res$onsibe to the em$o(ees hired b(
res$ondent *aa$adan as if such em$o(ees had
been direct( em$o(ed b( it# and# as such# the
res$ondents are soidari( iabe for their vaid
caims% The $etitioner is correct%
The $ertinent $rovision of the /abor
Code on abor0on( contracting is $aragra$h A
of Artice 4DC# which $rovidesF There is Labor0
on(M contracting where the $erson su$$(ing
wor!ers to an em$o(er does not have
substantia ca$ita or investment in the form of
toos# equi$ment# machineries# wor! $remises#
among others# and the wor!ers recruited and
$aced b( such $ersons are $erforming
activities which are direct( reated to the
$rinci$a business of such em$o(er% )n such
cases# the $erson or intermediar( sha be
considered mere( as an agent of the em$o(er
who sha be res$onsibe to the wor!ers in the
same manner and e>tent as if the atter were
direct( em$o(ed b( him%
-ue :)))0A# "oo! )))# Section A(f) of the
2mnibus -ues )m$ementing the /abor Code
further de,nes Labor0on(M contracting as an
arrangement where the contractor or
subcontractor mere( recruits# su$$ies or
$aces wor!ers to $erform a 8ob# wor! or
service for a $rinci$a% )n abor0on(
contracting# the foowing eements are
$resentF
(a) The contractor or
subcontractor does not have substantia
ca$ita or investment to actua(
$erform the 8ob# wor! or service under
its own account and res$onsibiit(?
(b) The em$o(ees recruited#
su$$ied or $aced b( such contractor or
subcontractor# are $erforming activities
34
which are direct( reated to the main
business of the $rinci$a%
)n such case# the aw creates an
em$o(ee0em$o(er reationshi$ so that abor
aws ma( not be circumvented% The $rinci$a
em$o(er becomes soidari( iabe with the
abor0on( contractor for a the rightfu caims
of the em$o(ees% The abor0on( contractor is
considered mere( as an agent of the em$o(er#
the em$o(er having been made# b( aw#
res$onsibe to the em$o(ees of the abor0on(
contractor as if such em$o(ees had been
direct( em$o(ed b( it%
2n the other hand# $ermissibe 8ob
contracting or subcontracting refers to an
arrangement whereb( a $rinci$a agrees to $ut
out or farm out with the contractor or
subcontractor the $erformance or com$etion
of a s$eci,c 8ob# wor! or service within a
de,nite or $redetermined $eriod regardess of
whether such 8ob# wor! or service is to be
$erformed or com$eted within or outside the
$remises of the $rinci$a%
The test to determine the e>istence of
an inde$endent contractorshi$ is whether one
who caims to be an inde$endent contractor
has contracted to do the wor! according to his
own methods and without being sub8ect to the
em$o(erIs contro e>ce$t on( as to the
resuts% Hach case must be determined b( its
own facts and a the features of the
reationshi$ are to be considered%
)n the case of :ino(a v% ./-C# the Court
decared that it is not enough to show
substantia ca$itai'ation or investment in the
form of toos# equi$ment# etc% to determine
whether one is an inde$endent contractor%
2ther factors that ma( be considered incude
the foowingF whether or not the contractor is
carr(ing on an inde$endent business? the
nature and e>tent of the wor!? the s!i
required? the term and duration of the
reationshi$? the right to assign the
$erformance of s$eci,ed $ieces of wor!? the
contro and su$ervision of the wor! to another?
the em$o(erIs $ower with res$ect to the
hiring# ,ring and $a(ment of the contractorIs
wor!ers? the contro of the $remises? the dut(
to su$$( $remises# toos# a$$iances# materias
and abor? and the mode and manner or terms
of $a(ment%
)n the $resent case# the res$ondents
faied to $rove that res$ondent *aa$adan was
an inde$endent contractor% )ndeed# the
substantia evidence on record shows that he
was mere( a abor0on( contractor based on
the foowing factsF
4%) The res$ondents faied to adduce
a scintia of evidence that res$ondent
*aa$adan had an( substantia ca$ita or
investment# such as toos and
equi$ment# to $erform the wor!
contracted for% There is even no
evidence that res$ondent *aa$adan had
an( assets# or that he maintained an
o<ce# sta@ or a termina for the truc!
entrusted to him b( res$ondent AC)%
3%) -es$ondent *aa$adan bound
and obiged himsef to wor! e>cusive(
for res$ondent AC) during the terms of
the agreement%
3%) Under the agreement#
res$ondent AC) had the right to contro
not on( the end to be attained but aso
the manner and means to be used in
accom$ishing that end or $ur$ose%
Aside from *aa$adanIs
dutiesGobigations as saesman#
res$ondent AC) coud require him to
$erform other duties and obigations%
A%) -es$ondent *aa$adan was
obiged to $a( the $etitionerIs month(
wage of P3#CA6%DD# as we as that of his
he$er# another PA#DDD%DD a month#
totaing PB#CA6%DD# e>cusive of other
e>$enses such as meas# gasoine# and
the u$!ee$ of the vehice% 2n the other
hand# res$ondent *aa$adan received
from res$ondent AC) on( P3#E5D%DD a
month as com$ensation% Je had no
other means of income because he was
obiged# under the agreement# to devote
a his time for res$ondent AC)%
Considering a these# the Court
concudes that the $etitionerIs wages
must have been $aid for b( res$ondent
AC) through res$ondent *aa$adan# its
abor0on( contractor%
2n the third issue# the Su$reme Court
agrees with the ruings of the ./-C and the CA
that the $etitioner was not dismissed from
em$o(ment% .evertheess# assuming that
com$ainant was a reguar em$o(ee of
Advanstar# this Commission ,nds his caim that
he was iega( dismissed to be nebuous% The
on( incident from which com$ainant drew the
concusion that he was dismissed from wor! is
when he was aeged( tod to disembar! from
the vehice% .othing on record shows that he
was terminated from wor!%The Court ,nds#
however# that contrar( to the ruings of the
./-C and the CA# the $etitioner did not resign
from his em$o(ment% -eiance on the
handwritten etter of resignation signed and
thumbmar!ed b( the $etitioner is mis$aced%
The handwritten etter of resignation signed b(
the $etitioner is inconsistent with the
res$ondentsI caim that res$ondent *aa$adan
was the $etitionerIs em$o(er% This is so
because the said etter is addressed to Tandua(
Cor$oration# and not to res$ondent *aa$adan%
.either the $etitioner nor the
res$ondents e>$ained wh( the etter was
addressed to Tandua( Cor$oration%
Signi,cant(# res$ondent *aa$adan did not
den( the $etitionerIs caim that the etter was
handwritten b( him (*aa$adan)% )f such caim
were true# there is neither rh(me nor reason
wh( Tandua( Cor$oration was its addressee%
+oreover# it a$$ears that the etter was
coursed through res$ondent *aa$adan as
saesman of the said cor$oration# which is
antithetica to the res$ondentsI caim that he
was the $etitionerIs em$o(er and an
inde$endent contractor of res$ondent AC)%
C.9 AA vs. A23o2.o GR No. )60650!
+'%14 ", 2006
FACTS* Petitioner is a soe $ro$rietorshi$
registered in the name of its $ro$rietor# Hnrico
H% Ae8o# with o<ce address at 344 "arrio
Santo# "aagtas# "uacan% 2n *anuar( 43# 3DDD#
herein res$ondents Hutiquio Antonio# *a(
Antonio# Feicisimo Antonio# /eonardo Antonio#
33
Sr% and -oberto Fabian ,ed a com$aint for
iega a(0o@ and iega deductions before the
./-C1s -egiona Arbitration "ranch .o% )))% The(
caimed that the( were dismissed on *anuar(
44# 3DDD and sought se$aration $a( from
$etitioner% )n res$ondents1 $osition $a$er# the(
aeged that as reguar em$o(ees# the( wor!ed
from 6FDD a%m% to EFDD $%m% at $etitioner1s
$remises using $etitioner1s toos and
equi$ment and the( received P3ED $er da(%
According to res$ondents# the( were dismissed
without 8ust cause and due $rocess? hence#
their $ra(er for reinstatement and fu
bac!wages% 2n the other hand# in its $osition
$a$er# $etitioner "ig AA +anufacturer# a<rmed
it is a soe $ro$rietorshi$ registered in the
name of Hnrico Ae8o and engaged in
manufacturing o<ce furniture# but it denied
that res$ondents were its reguar em$o(ees%
)nstead# $etitioner caimed that Hutiquio
Antonio was one of its inde$endent contractors
who used the services of the other
res$ondents% According to $etitioner# its
inde$endent contractors were $aid b( resuts
and were res$onsibe for the saaries of their
own wor!ers% Aeged(# there was no em$o(er0
em$o(ee reationshi$ between $etitioner and
res$ondents% Jowever# $etitioner stated it
aowed res$ondents to use its faciities to meet
8ob orders% Petitioner aso denied that
res$ondents were aid0o@ b( "ig AA
+anufacturer# since the( were $ro8ect
em$o(ees on(%
ISSUES* Are res$ondents reguar
em$o(ees of $etitioner; &id the( abandon
their wor!; =ere the( iega( dismissed b(
$etitioner; )f so# what bene,ts# if an(# are due
them;
HELD* Petitioner contends that em$o(ment for
more than one (ear and 7$erforming car$entr(
wor!s that were necessar( and desirabe7 in
$etitioner1s usua trade and business are 7not
controing7 factors in determining whether
res$ondents are reguar em$o(ees% Petitioner
argues that Artice 36D of the /abor Code and
the 7circumstances which attended the
reationshi$ between7 the $arties must be
considered% The circumstances of the case#
according to $etitioner# show that res$ondents
were not its reguar em$o(ees% S$eci,ca(#
$etitioner Hutiquio was an inde$endent
businessman and was contracted to render
$articuar 8ob orders using his own methods
and st(e% Further# Hutiquio hired his own
wor!ers and used his own house as his factor(
and wor! $remises where he !e$t his own toos#
equi$ment and materias% At the outset# it
shoud be stressed that whether res$ondents
are reguar em$o(ees or $ro8ect em$o(ees or
inde$endent contractors is a question of fact%
The unanimous ,nding of the /abor Arbiter#
./-C# and Court of A$$eas that res$ondents
were $etitioner1s reguar em$o(ees# not
inde$endent contractors# binds this Court%
Under -ue AE of the -ues of Court# our
8urisdiction is imited to questions of aw%
.otab(# $etitioner not on( urges us to re0
e>amine the evidence $resented beow but to
consider evidence not $resented before the
/abor Arbiter% This $ractice of submitting
evidence ate is $ro$er( re8ected as it defeats
the s$eed( administration of 8ustice invoving
$oor wor!ers% )t is aso unfair% Considering the
submission of the $arties# we are constrained
to agree with the unanimous ruing of the Court
of A$$eas# ./-C and /abor Arbiter that
res$ondents are $etitioner1s reguar em$o(ees%
-es$ondents were em$o(ed for more than one
(ear and their wor! as car$enters was
necessar( or desirabe in $etitioner1s usua
trade or business of manufacturing o<ce
furniture% Under Artice 36D of the /abor Code#
the a$$icabe test to determine whether an
em$o(ment shoud be considered reguar or
non0reguar is the reasonabe connection
between the $articuar activit( $erformed b(
the em$o(ee in reation to the usua business
or trade of the em$o(er% True# certain forms of
em$o(ment require the $erformance of usua
or desirabe functions and e>ceed one (ear but
do not necessari( resut to reguar
em$o(ment under Artice 36D of the /abor
Code% Some s$eci,c e>ce$tions incude $ro8ect
or seasona em$o(ment% Net# in this case#
res$ondents cannot be considered $ro8ect
em$o(ees% Petitioner had neither shown that
res$ondents were hired for a s$eci,c $ro8ect
the duration of which was determined at the
time of their hiring nor identi,ed the s$eci,c
$ro8ect or $hase thereof for which res$ondents
were hired% =e aso agree that Hutiquio was not
an inde$endent contractor for he does not
carr( a distinct and inde$endent business# and
he does not $ossess substantia ca$ita or
investment in toos# equi$ment# machiner( or
wor! $remises% Je wor!s within $etitioner1s
$remises using the atter1s toos and materias#
as admitted b( $etitioner% Hutiquio is aso
under $etitioner1s contro and su$ervision%
Attesting to this is $etitioner1s admission that it
aowed res$ondents to use its faciities for the
7$ro$er im$ementation7 of 8ob orders%
+oreover# the )m$ementing Guideines
reguating attendance# overtime# deadines#
$enaties? $roviding $etitioner1s right to ,re
em$o(ees or 7contractors7? requiring the
car$entr( division to 8oin $etitioner1s e>ercise
$rogram? and $roviding rues on machine
maintenance# a reKect contro and su$ervision
over res$ondents% Javing rued that
res$ondents are reguar em$o(ees# we sha
$roceed to determine whether res$ondents
have# as $etitioner contends# abandoned their
wor!# or the( have been iega( dismissed% For
accusing res$ondents of abandonment#
$etitioner must $resent evidence (4) not on( of
res$ondents1 faiure to re$ort for wor! or
absence without vaid reason# but (3) aso of
res$ondents1 cear intention to sever em$o(er0
em$o(ee reations as manifested b( some
overt acts% The second eement is the more
determinative factor Jere# $etitioner1s
argument in su$$ort of its abandonment
charge was that res$ondents ma( have
resented its issuance of the )m$ementing
Guideines% This# in our view# fais to estabish
res$ondents1 intention to abandon their 8obs%
2n the contrar(# b( ,ing the com$aint for
iega dismissa within two da(s of their
dismissa on *anuar( 44# 3DDD and b( see!ing
reinstatement in their $osition $a$er#
res$ondents manifested their intention against
severing their em$o(ment reationshi$ with
$etitioner and abandoning their 8obs% )t is
setted that an em$o(ee who forthwith
$rotests his a(o@ cannot be said to have
33
abandoned his wor!% Fina(# Artice 3B5 of the
/abor Code# $rovides that a reguar em$o(ee
who is un8ust( dismissed from wor! is entited
to reinstatement without oss of seniorit( rights
and other $rivieges and to his fu bac!wages#
incusive of aowances# and to his other
bene,ts or their monetar( equivaent
com$uted from the time his com$ensation was
withhed from him u$ to the time of his actua
reinstatement% )f reinstatement is no onger
feasibe# se$aration $a( equivaent to one
month saar( for ever( (ear of service shoud
be awarded as an aternative% This has been
our consistent ruing in the award of se$aration
$a( to iega( dismissed em$o(ees in ieu of
reinstatement% Jence# the four res$ondents#
Hutiquio# Feicisimo# *a( and /eonardo# Sr%# a
surnamed Antonio# are entited to bac!wages
and se$aration $a( in case their reinstatement
is no onger $ossibe% The $etition is &H.)H& for
ac! of merit% Petitioner thru its soe $ro$rietor#
Hnrico Ae8o# is ordered (4) to reinstate the four
res$ondents to their former $ositions without
oss of seniorit( rights and other $rivieges or to
$a( them se$aration $a( in case reinstatement
is no onger $ossibe and (3) to $a( them fu
bac!wages# in either case# com$uted from the
time their com$ensation was withhed from
them u$ to the time of their actua
reinstatement or u$ to the time it is determined
that reinstatement is no onger $ossibe% The
./-C is aso ordered to -HC2+PUTH
res$ondents1 bac!wages and se$aration $a(#
as aforementioned# and e>ecute the $a(ments
to res$ondents% Costs against the $etitioner%
DOLE PHILIPPINES vs. ESTEVA
G.R. No. )6)))5. Nov#-$#% "0, 2006
FACTS* Petitioner is a cor$oration
engaged $rinci$a( in the $roduction and
$rocessing of $inea$$e for the e>$ort mar!et%
-es$ondents are members of the Canner(
+uti0Pur$ose Coo$erative (CA+PC2)% CA+PC2
was organi'ed in accordance with -e$ubic Act
.o% C536# otherwise !nown as the Coo$erative
Code of the Phii$$ines% Pursuant to the Service
Contract# CA+PC2 members rendered services
to $etitioner% The number of CA+PC2
members that re$ort for wor! and the t($e of
service the( $erformed de$ended on the needs
of $etitioner at an( given time% Athough the
Service Contract s$eci,ca( stated that it sha
on( be for a $eriod of si> months# i*e*# from 4
*u( to 34 &ecember 4553# the $arties had
a$$arent( e>tended or renewed the same for
the succeeding (ears without e>ecuting
another written contract% )t was under these
circumstances that res$ondents came to wor!
for $etitioner% &2/H organi'ed a Tas! Force that
conducted an investigation into the aeged
abor0on( contracting activities of the
coo$eratives% The Tas! Force identi,ed si>
coo$eratives that were engaged in abor0on(
contracting# one of which was CA+PC2% )n this
case# res$ondents aeged that the( started
wor!ing for $etitioner at various times in the
(ears 4553 and 455A# b( virtue of the Service
Contract e>ecuted between CA+PC2 and
$etitioner% A of the res$ondents had aread(
rendered more than one (ear of service to
$etitioner% =hie some of the res$ondents were
sti wor!ing for $etitioner# others were $ut on
Lsta( home statusM on var(ing dates in the
(ears 455A# 455E# and 455C and were no
onger furnished with wor! thereafter%
Together# res$ondents ,ed a Com$aint with
the ./-C for iega dismissa# reguari'ation#
wage di@erentias# damages and attorne(Is
fees% Petitioner denied that res$ondents were
its em$o(ees% )t e>$ained that it found the
need to engage e>terna services to augment
its reguar wor!force# which was a@ected b(
$ea!s in o$eration# wor! bac!ogs#
absenteeism# and e>cessive eaves% )t used to
engage the services of individua wor!ers for
de,nite $eriods s$eci,ed in their em$o(ment
contracts and never e>ceeding one (ear%
Jowever# such an arrangement became the
sub8ect of a abor case# in which $etitioner was
accused of $reventing the reguari'ation of
such wor!ers%
ISSUES* =hether or not the court of
a$$eas was correct when it made its own
factua ,ndings and disregarded the factua
,ndings of the abor arbiter and the ./-C%
=hether or not CA+PC2 was a mere
abor0on( contractor%
HELD* The Court in the e>ercise of its equit(
8urisdiction ma( oo! into the records of the
case and re0e>amine the questioned ,ndings%
As a coroar(# this Court is cothed with am$e
authorit( to review matters# even if the( are
not assigned as errors in their a$$ea# if it ,nds
that their consideration is necessar( to arrive
at a 8ust decision of the case% The same
$rinci$es are now necessari( adhered to and
are a$$ied b( the Court of A$$eas in its
e>$anded 8urisdiction over abor cases eevated
through a $etition for certiorari? thus# we see
no error on its $art when it made anew a
factua determination of the matters and on
that basis reversed the ruing of the ./-C%
2n the second issue# CA+PC2 was a
mere abor0on( contractor% 6irst, athough
$etitioner touts the muti0miion $esos assets
of CA+PC2# it does we to remember that such
were amassed in the (ears foowing its
estabishment% )n 4553# when CA+PC2 was
estabished and the Service Contract between
$etitioner and CA+PC2 was entered into#
CA+PC2 on( had PC#CDD%DD $aid0u$ ca$ita#
which coud hard( be considered substantia% )t
on( managed to increase its ca$itai'ation and
assets in the succeeding (ears b( continua(
and de,ant( engaging in what had been
decared b( authori'ed &2/H o<cias as abor0
on( contracting% %econd, CA+PC2 did not carr(
out an inde$endent business from $etitioner% )t
was $recise( estabished to render services to
$etitioner to augment its wor!force during $ea!
seasons% Petitioner was its on( cient% Hven as
CA+PC2 had its own o<ce and o<ce
equi$ment# these were main( used for
administrative $ur$oses? the toos#
machineries# and equi$ment actua( used b(
CA+PC2 members when rendering services to
the $etitioner beonged to the atter% !ird,
$etitioner e>ercised contro over the CA+PC2
members# incuding res$ondents% Petitioner
attem$ts to refute contro b( aeging the
$resence of a CA+PC2 su$ervisor in the wor!
$remises% Net# the mere $resence within the
$remises of a su$ervisor from the coo$erative
did not necessari( mean that CA+PC2 had
3A
contro over its members% Section 6(4)# -ue
:)))# "oo! ))) of the im$ementing rues of the
/abor Code# as amended# required for
$ermissibe 8ob contracting that the contractor
underta!es the contract wor! on his account#
under his own res$onsibiit(# according to his
own manner and method# free from the contro
and direction of his em$o(er or $rinci$a in a
matters connected with the $erformance of the
wor! e>ce$t as to the resuts thereof% As
aeged b( the res$ondents# and unrebutted b(
$etitioner# CA+PC2 members# before wor!ing
for the $etitioner# had to undergo instructions
and $ass the training $rovided b( $etitionerIs
$ersonne% )t was $etitioner who determined
and $re$ared the wor! assignments of the
CA+PC2 members% CA+PC2 members wor!ed
within $etitionerIs $antation and $rocessing
$ants aongside reguar em$o(ees $erforming
identica 8obs# a circumstance recogni'ed as an
indicium of a abor0on( contractorshi$% 6ourt!,
CA+PC2 was not engaged to $erform a s$eci,c
and s$ecia 8ob or service% )n the Service
Contract of 4553# CA+PC2 agreed to assist
$etitioner in its dai( o$erations# and $erform
odd 8obs as ma( be assigned% CA+PC2
com$ied with this venture b( assigning
members to $etitioner% A$art from that# no
other $articuar 8ob# wor! or service was
required from CA+PC2# and it is a$$arent# with
such an arrangement# that CA+PC2 mere(
acted as a recruitment agenc( for $etitioner%
Since the underta!ing of CA+PC2 did not
invove the $erformance of a s$eci,c 8ob# but
rather the su$$( of man$ower on(# CA+PC2
cear( conducted itsef as a abor0on(
contractor% Lastl,, CA+PC2 members# incuding
res$ondents# $erformed activities direct(
reated to the $rinci$a business of $etitioner%
The( wor!ed as can $rocessing attendant#
feeder of canned $inea$$e and $inea$$e
$rocessing# nata de coco $rocessing attendant#
fruit coc!tai $rocessing attendant# and etc%#
functions which were# not on( direct( reated#
but were ver( vita to $etitionerIs business of
$roduction and $rocessing of $inea$$e
$roducts for e>$ort%
The decaration that CA+PC2 is indeed
engaged in the $rohibited activities of abor0
on( contracting# then consequent(# an
em$o(er0em$o(ee reationshi$ is deemed to
e>ist between $etitioner and res$ondents#
since CA+PC2 sha be considered as a mere
agent or intermediar( of $etitioner%
Since res$ondents are now recogni'ed
as em$o(ees of $etitioner# this Court is tas!ed
to determine the nature of their em$o(ment%
)n consideration of a the attendant
circumstances in this case# this Court concudes
that res$ondents are reguar em$o(ees of
$etitioner% As such# the( are entited to securit(
of tenure% The( coud on( be removed based
on 8ust and authori'ed causes as $rovided for in
the /abor Code# as amended# and after the(
are accorded $rocedura due $rocess%
Therefore# $etitionerIs acts of $acing some of
the res$ondents on Lsta( home statusM and not
giving them wor! assignments for more than
si> months were aread( tantamount to
constructive and iega dismissa%
S'2 +.9&#/ Co%5. vs. NLRC 7 +'/.Ks.
G.R. No. )!7566, D#1#-$#% 6, 2006
FACTS* 2n 4C 2ctober 455D# -afae +%
+ai!si ,ed a com$aint against the San +igue
Cor$oration0+agnoia &ivision# herein referred
to as S+C and Phii$$ine Software Services and
Hducation Center (PJ)/SSHC) to com$e the
said res$ondents to recogni'e him as a reguar
em$o(ee% /ater this was amended to incude
the charge of iega dismissa because his
services were terminated on 34 2ctober 455D%
The com$ainantIs em$o(ment record
indicates that he rendered service with
/i$ercon Services from 4 A$ri 4564 to Februar(
4563 as budget head assigned to S+C0"eer
&ivision# then from *u( 4563 to A$ri 456E with
S!i$ower# )nc%# as accounting cer! assigned to
S+C0+agnoia &ivision# then from 2ctober 4566
to 4565 aso with S!i$ower# )nc% as acting
cer! assigned to S+C0+agnoia Finance# and
from 2ctober 4565 to 34 2ctober 455D with
PJ)/SSHC assigned to +agnoia Finance as
accounting cer!% The com$ainant considered
himsef as an em$o(ee of S+C0+agnoia%
/i$ercon Services# S!i$ower# )nc% and
PJ)/SSHC are abor0on( contractors and an(
one of which had never been his em$o(er% Jis
dismissa# according to him# was in retaiation
for his ,ing of the com$aint for reguari'ation
in service% Jis dismissa was iega there being
no 8ust cause for the action% Je was not
accorded due $rocess neither was his dismissa
re$orted to the &e$artment of /abor and
Hm$o(ment% PJ)/SSHC discaimed iabiit(% As
an entit( catering to com$uter s(stems and
$rograms for business enter$rises# it has
contracted with S+C0+agnoia to com$uteri'e
the atterIs manua accounting re$orting
s(stems of its $rovincia saes% Com$ainant
+ai!si was one of those em$o(ed b(
PJ)/SSHC whose $rinci$a function was the
manua contro of data needed during the
com$uteri'ation% /i!e a assigned to the
$ro8ect# the com$ainantIs wor! was controed
b( PJ)/SSHC su$ervisors# his saar( $aid b( the
agenc( and he re$orted direct( to PJ)/SSHC%
The com$uteri'ation $ro8ect was com$eted on
34 2ctober 455D# and so# the com$ainant was
terminated on the said date%
ISSUE* =hether or not +ai!si was a reguar
em$o(ee of San +igue Cor$%
HELD* )n a# it a$$ears that# whie under the
em$o( of either /i$ercon or S!i$ower# +ai!si
has undis$uted( rendered service with S+C for
'3 /#'s3 34%## (#'%s '20 s#v#2 -o234s%
)ndeed# having served S+C for an aggregate
$eriod of more than three (3) (ears through
em$o(ment contracts with these two abor
contractors# +ai!si shoud be considered as
S+CIs reguar em$o(ee% The hard fact is that
he was hired and re0hired b( S+C to $erform
administrative and cerica wor! that was
necessar( to S+CIs business on a dai( basis%
=e understand +ai!siIs des$eration in
ma!ing his $oint cear to S+C# which undu(
refuses to ac!nowedge his status as a reguar
em$o(ee% )nstead# he was 8ugged from one
em$o(ment contract to another in a
continuous bid to circumvent abor aws% The
act of hiring and re0hiring wor!ers over a $eriod
of time without considering them as reguar
em$o(ees evidences bad faith on the $art of
the em$o(er% =here# from the circumstances#
3E
it is a$$arent that $eriods have been im$osed
to $recude the acquisition of tenuria securit(
b( the em$o(ee# the $oic(# agreement or
$ractice shoud be struc! down as contrar( to
$ubic $oic(# moras# good customs or $ubic
order% )n $oint of aw# an( $erson who wifu(
causes oss or in8ur( to another in a manner
that is contrar( to moras# good customs or
$ubic $oic( sha be iabe for the damage%
)n %an Mi"uel Corporation v* M.ERC
Inte"rated %ervices, Inc*, we too! note of the
$ractice of hiring em$o(ees through abor
contractors that catered e>cusive( to the
em$o(ment needs of S+C or its divisions or
other s$eci,c business interests# such that after
the s$eci,c S+C business or division ceases to
do business# the abor contractor i!ewise
ceases its o$erations%
Considering# however# the su$ervening event
that S+CIs +agnoia &ivision has been acquired
b( another entit(# it a$$ears that $rivate
res$ondentIs reinstatement is no onger
feasibe% )nstead# he shoud be awarded
se$aration $a( as an aternative% /i!ewise#
owing to $etitionerIs bad faith# it shoud be hed
iabe to $a( damages for causing undue in8ur(
and inconvenience to the $rivate res$ondent in
its contractua hiring0,ring0rehiring scheme%
E5'%>' S#1&%.3( '20 8'2.3o%.'/ S#%v.1#s,
I21. vs. L.1#o 0# C'9'('2 U2.v#%s.3(
G.R. No. )50!02 Nov#-$#% 26, 2006
FACTS* H$arwa and /&CU# through their
re$resentatives# entered into a Contract for
Securit( Services% Subsequent( 44 securit(
guards whom H$arwa assigned to /&CU ,ed a
com$aint before the ./-C0-A" against both
H$arwa and /&CU for under$a(ment of saar(#
ega hoida( $a(# 43th month $a(# rest da(#
service incentive eave# night shift di@erentia#
overtime $a(# and $a(ment for attorne(1s fees%
/&CU made a cross0caim and $ra(ed that
H$arwa shoud reimburse /&CU for an(
$a(ment to the securit( guards%
The /A found that the securit( guards
are entited to wage di@erentias and $remium
for hoida( and rest da( wor!% The /A hed
H$arwa and /&CU soidari( iabe $ursuant to
Artice 4D5 of the /abor Code and i!ewise
orderd H$arwa to reimburse /&CU for whatever
amount the atter ma( be required to $a( the
securit( guards% 2n a$$ea to the ./-C# H$arwa
and /&CU was hed soidari( iabe for the
wage di@erentias and $remium for hoida( and
rest da( wor!# but the ./-C did not require
H$arwa to reimburse /&CU for its $a(ments to
the securit( guards% U$on motion for
reconsideration# ./-C decared that athough
H$arwa and /&CU are soidari( iabe to the
securit( guards for the monetar( award# /&CU
aone is utimate( iabe ordering it to
reimburse H$arwa for $a(ments made to the
contractua em$o(ees% U$on a$$ea to the CA#
the a$$eate court aowed /&CU to caim
reimbursement from H$arwa% H$arwa then ,ed
an action for certiorari before the SC%
ISSUE* =hether or not /&CU aone is
utimate( iabe to the securit( guards for the
wage di@erentias and $remium for hoida( and
rest da( $a( without an( right of
reimbursement from H$arwa%
HELD* This 8oint and severa iabiit( of the
contractor and the $rinci$a is mandated b( the
/abor Code to assure com$iance of the
$rovisions therein incuding the statutor(
minimum wage% The contractor is made iabe
b( virtue of his status as direct em$o(er% The
$rinci$a# on the other hand# is made the
indirect em$o(er of the contractor1s
em$o(ees for $ur$oses of $a(ing the
em$o(ees their wages shoud the contractor
be unabe to $a( them% This 8oint and severa
iabiit( faciitates# if not guarantees# $a(ment
of the wor!ers1 $erformance of an( wor!# tas!#
8ob or $ro8ect# thus giving the wor!ers am$e
$rotection as mandated b( the 456B
Constitution% For the securit( guards# the actua
source of the $a(ment of their wage
di@erentias and $remium for hoida( and rest
da( wor! does not matter as ong as the( are
$aid% This is the im$ort of H$arwa and /&CU1s
soidar( iabiit(% Creditors# such as the securit(
guards# ma( coect from an(one of the soidar(
debtors% Soidar( iabiit( does not mean that#
as between themseves# two soidar( debtors
are iabe for on( haf of the $a(ment% /&CU1s
utimate iabiit( comes into $a( because of the
e>$iration of the Contract for Securit( Services%
There is no $rivit( of contract between the
securit( guards and /&CU# but /&CU1s iabiit(
to the securit( guards remains because of
Artices 4DC# 4DB and 4D5 of the /abor Code%
H$arwa is aread( $recuded from as!ing /&CU
for an ad8ustment in the contract $rice because
of the e>$iration of the contract# but H$arwa1s
iabiit( to the securit( guards remains because
of their em$o(er0em$o(ee reationshi$% )n ieu
of an ad8ustment in the contract $rice# H$arwa
ma( caim reimbursement from /&CU for an(
$a(ment it ma( ma!e to the securit( guards%
Jowever# /&CU cannot caim an(
reimbursement from H$arwa for an( $a(ment it
ma( ma!e to the securit( guards%
LAPANDAY AGRICULTURAL DEVT. CORP. vs.
COURT OF APPEALS G.R. No.
))2)". J'2&'%( "), 2000
FACTS* Private res$ondent Commando
Securit( Service Agenc(# )nc% and $etitioner
/a$anda( Agricutura &eveo$ment
Cor$oration entered into a Guard Service
Contract% 2n *une 4C# 456A# =age 2rder .o% E
was $romugated directing an increase of P3%DD
$er da( on the minimum wage of wor!ers in the
$rivate sector and a PE%DD increase on the
HC2/A% This was foowed on .ovember 4# 456A
b( =age 2rder .o% C which further increased
said minimum wage b( P3%DD on the HC2/A%
"oth =age 2rders contain the foowing
$rovisionF L)n the case of contract for
construction $ro8ects and for securit(# 8anitoria
and simiar services# the increase in the
minimum wage and aowances rates of the
wor!ers sha be borne b( the $rinci$a or cient
of the constructionGservice contractor and the
contracts sha be deemed amended
according(# sub8ect to the $rovisions of Sec% 3
(b) of this order7 (Sec% C and Sec% 5# =age
2rders .o% E and C# res$ective()%M Private
res$ondent demanded that its Guard Service
Contract with defendant be u$graded in
com$iance with =age 2rder .os% E and C%
3C
&efendant refused% Their Contract e>$ired on
*une C# 456C without the rate ad8ustment caed
for =age 2rder .os% E and C being
im$emented% A com$aint was ,ed b( $rivate
res$ondent which was o$$osed b( the
$etitioner contending among others that the
rate ad8ustment is the obigation of the $rivate
res$ondent as em$o(er of the securit( guards%
/abor Arbiter .ewton -% Sancho hed both
$etitioner and $rivate res$ondent 8oint( and
soidari( iabe to the securit( guards%
ISSUE* =hether or not $etitioner is iabe
to the $rivate res$ondent for the wage
ad8ustment $rovided under =age 2rder .os% E
and C%
HELD* .o% The Contract of Securit( Services
e>$ress( sti$uated that the securit( guards
are em$o(ees of the Agenc( and not of the
$etitioner% Artices 4DC and 4DB of the /abor
Code $rovides the rue governing the $a(ment
of wages of em$o(ees in the event that the
contractor fais to $a( such wages as foowsF
L=henever an em$o(er enters into a contract
with another $erson for the $erformance of the
formerIs wor!# the em$o(ees of the contractor
and of the atterIs subcontractor# if an(# sha
be $aid in accordance with the $rovisions of
this Code% )n the event that the contractor or
subcontractor fais to $a( the wages of his
em$o(ees in accordance with this Code# the
em$o(er sha be 8oint( and severa( iabe
with his contractor or subcontractor to such
em$o(ees to the e>tent of the wor! $erformed
under the contract# in the same manner and
e>tent that he is iabe to em$o(ees direct(
em$o(ed b( him%M )t wi be seen from the
above $rovisions that the $rinci$a ($etitioner)
and the contractor (res$ondent) are 8oint( and
severa( iabe to the em$o(ees for their
wages% The iabiit( of the $etitioner to
reimburse the res$ondent on( arises if and
when res$ondent actua( $a(s its em$o(ees
the increases granted b( =age 2rder .os% E
and C% )n the instant case# it is not dis$uted
that the $rivate res$ondent has not actua(
$aid the securit( guards the wage increases
granted under the =age 2rders in question%
.either is it aeged that there is an e>tant
caim for such wage ad8ustments from the
securit( guards concerned# whose services
have aread( been terminated b( the
contractor% According(# $rivate res$ondent has
no cause of action against $etitioner to recover
the wage increases%
Es1'%.o vs. N'3.o2'/ L'$o% R#/'3.o2s
Co--.ss.o2
G.R. No. )2!055 J&2# 6, 2000
FACTS* Private res$ondents Caifornia
+ar!eting Co%# )nc% is a domestic cor$oration
$rinci$a( engaged in the manufacturing of
food $roducts and distribution of such $roducts
to whoesaers and retaiers% Private res$ondent
&onna /ouis Advertising and +ar!eting
Associates# )nc% is a du( registered $romotiona
,rm%
Petitioners aeged that the( were
em$o(ed b( C+C as merchandisers% The(
aeged that the hiring# contro and su$ervision
of wor!ers and the $a(ment of the saaries
were a covered b( C+C through its agent &%/
Admar! in order C+C to avoid its iabiit( under
the aw% Petitioners ,ed a case against C+C
before the abor arbiter for reguari'ation of
their em$o(ment status%
&uring the $endenc( of the case# &%/
Admar! terminated the services of the
$etitioners% The com$aint was amended to
incude aeged dismissa% C+C ,ed a motion to
im$ead as $art(0defendant &%/ Admar!# the
atter ,ed a motion to intervene% "oth motions
were granted% C+C denied being $etitioners
em$o(er whie &%/ Admar! asserted it is the
em$o(er of the $etitioners%
The abor arbiter found $etitioners as
em$o(ees of C+C as the( were engaged in
activities that are necessar( and desirabe in
the usua businessGtrade of C+C% 2n a$$ea#
the ./-C set aside the abor arbiters decision%
"ut ordered the reinstatement of the
$etitioners in &%/ Admar! $etitioners ,ed a
motion for consideration before the ./-C which
was denied for ac! of merit% Jence the
$etition%
ISSUE* =hether or not &%/ Admar! is a
abor0on( contractor or as inde$endent
contractor%
HELD* The Su$reme Court denied the $etition%
There is abor0on( contracting when the
contractor or subcontractor mere( recruits#
su$$ies or $aces wor!ers to $erform a 8ob#
wor! or service for a $rinci$a% )n abor on(
contracting# the foowing eements are
$resentF
a%) The $erson su$$(ing wor!ers to an
em$o(er does not have substantia ca$ita
or investment in the form of toos#
equi$ments# machineries# wo! $remise#
among other toos%
b%) The wor!ers recruited and $aced b( such
$erson $erforming activities which are
direct( reated to the $rinci$a business of
the em$o(er%
)n contract# there is $ermissibe 8ob
contracting when a $rinci$a agrees to $ut out
or farm out with a contractor or a subcontractor
the $erformance G com$etion of a s$eci,c 8ob#
wor! or services within a de,nite or
$redetermined $eriod# regardess of whether
such 8obG services is to be $erformed or
com$eted within or outside the $remises of the
$rinci$a% )n this arrangement# the foowing
conditions must concurF
a%) The contractor carries on a distinct
and inde$endent business and underta!es the
contract wor! on his account under the
res$onsibiit( according to his own manua and
methods# free from the contro and direction of
his em$o(er or $rinci$a in a matters
connected with the $erformance of his
em$o(er wor! e>ce$t as to the resuts thereof?
and
b%) The contractor has substantia
ca$ita G investment which are necessar( in the
conduct of his business%
The court reiterated that it is not
enough to show substantia ca$itai'ation on
investment% )n addition the foowing factors
need be consideredF whether the contractor is
carr(ing on an inde$endent business? the
3B
nature and e>tent of the wor!? the s!i
required? the term and duration of the
reationshi$? the right to assign the
$erformance of s$eci,ed $ieces of wor!? the
contro and su$ervision of the wor!ers? the
$ower of the em$o(er with res$ect to the
hiring# ,ring and $a(ment of wor!ers of the
contractor? the contro of the $remises? the
dut( to su$$( $remises# toos# a$$iances#
materias and abor? mode# manner and terms
of $a(ment%
"ased on the foregoing criteria# the
court found that &%/ Admar! is a egitimate
inde$endent contractor% A$$(ing the four0fod
test# &%/ Admar! was found to be the em$o(er
of the $etitioners% The Su$reme Court a<rmed
the ./-CIs ruing%
A$o.3.E H'&/#%s, I21o%5o%'3#0
vs. D.-'5'3o.
G. R. No. )!66) S#53#-$#% ), 2006
FACTS* Petitioner Aboiti' Jauers# )nc% is
a domestic cor$oration $rinci$a( engaged in
the nationwide and overseas forwarding and
distribution of cargoes% Private res$ondents
+onaorai &ima$atoi# Ceciia Agawin# -au
+amate# Hmmanue Guerrero and Gemeniano
"igaw wor!ed as chec!ers in the +ega
=arehouse# which is owned b( the $etitioner#
ocated at the Tabacaera Com$ound# United
.ations Avenue# +ania
The $arties rendered conKicting recita
of facts%
Petitioner caims that res$ondents are
not its em$o(ees# rather the( are the
em$o(ees of Grigio Securit( Agenc( and
Genera Services (Grigio)# a man$ower agenc(
that su$$ies securit( guards# chec!ers and
stu@ers% )t aeged( entered into a =ritten
Contract of Service with Grigio on 4 +arch
455A% "( virtue of the aforementioned =ritten
Contract of Service# Grigio su$$ied $etitioner
with securit( guards# chec!ers and stu@ers for
$etitionerIs +ega =arehouse% The res$ondents
were among the chec!ers that were assigned
to the $etitionerIs warehouse%
Petitioner em$hasi'es that Grigio
retained contro over the res$ondents b(
$roviding their own su$ervisors to oversee
GrigioIs $ersonne# as we as time cards to
monitor the attendance of its $ersonne%
Petitioner aso aeges that on 5 +a( 455C# the
res$ondents eft the warehouse and did not
re$ort to wor! thereafter% As a resut of the
res$ondentsI sudden abandonment of their
wor!# there was no order( and $ro$er turnover
of $a$ers and other com$an( $ro$ert( in
connection with the termination of the =ritten
Contract for Services% -es$ondents# on the
other hand# caim that most of them wor!ed as
chec!ers in $etitionerIs warehouse even before
4 +arch 455A%
-es$ondents maintain that during their
em$o(ment with the $etitioner# the( were not
$aid their reguar hoida( $a(# night shift
di@erentia# E0da( service incentive eave# and
overtime $remium% The( aso averred that
iega deductions were being made on their
wages# $articuar( the contributions for a
+utua Assistance Fund# a Cash "ond# and
caims for damaged and misrouted cargoes
incurred b( $etitioner%
-es$ondents aege that on 4E +a(
455C# $etitioner dismissed them on the $rete>t
that the =ritten Contract of Service between
Grigio and the $etitioner had been terminated%
To controvert the aegations of the $etitioner
that res$ondents did not re$ort for wor!
starting 5 +a( 455C# the res$ondents
$resented a co$( of the $ertinent $ages of the
ogboo! which served as their dai( time
record% -es$ondents aso $resented a
Certi,cation issued b( $etitionerIs =arehouse
Su$ervisor in favor of res$ondent +onaorai
&ima$atoi a<rming that she wor!ed with the
Petitioner as a =arehouse Chec!er and
&ocument Cer! unti 4E +a( 455C%
2n 4B +a( 455C# res$ondent -au
+amate ,ed a com$aint before the
&e$artment of /abor and Hm$o(ment (&2/H)
for non$a(ment of wages and other bene,ts#
as we as iega deductions% The other
res$ondents ,ed their own com$aints% Since
the caims of the res$ondents e>ceeded Five
Thousand Pesos (PE#DDD%DD)# the case was
referred to the ./-C% Thereafter# res$ondents
,ed their com$aint for iega dismissa and
other mone( caims before the Arbitration
"ranch of the ./-C%
ISSUE* =hether or not the $etitioner
and its contractor engaged in a Xabor on(
contractingI arrangement%

HELD* Petitioner and its contractor Grigio
committed a Labor0on?(M contracting
arrangement%
The aegation of the $etitioner that
Grigio is an inde$endent 8ob contractor# and#
therefore# this case is one of $ermissibe 8ob
contracting# is without basis% )n this case# the
res$ondentsI wor!# as warehouse chec!ers# is
direct( reated to the $rinci$a business of the
$etitioner% Petitioner aso e>ercises the right to
contro and determines not on( the end to be
achieved# but aso the manner and means to be
used in reaching that end% /ast(# $etitioner
faied to su<cient( $rove that Grigio had
Lsubstantia ca$ita or investment%M
The res$ondents# as chec!ers# were
em$o(ed to chec! and ins$ect these cargoes#
a tas! which is cear( necessar( for the
$etitionerIs business of forwarding and
distributing of cargoes% The $etitioner did not
dis$ute the fact that the res$ondents were
hired as chec!ers as ear( as 4553% The fact
that the( were em$o(ed before the =ritten
Contract of Services too! e@ect on 3A Februar(
455A# and continued with their 8obs unti 455C#
after the said contract had aread( e>$ired on
3A Februar( 455E indicates that the
res$ondentsI wor! was indeed necessar( for
the $etitionerIs business% )n addition# Grigio did
not underta!e the $erformance of its service
contract according to its own manner and
method# free from the contro and su$ervision
of its $rinci$a%
The wor! activities# wor! shifts# and
schedues of the res$ondents# incuding the
time aowed for LrecessM were set under the
=ritten Contract of Services% This cear(
indicates that these matters# which consist of
the means and methods b( which the wor! is
to be accom$ished# were not within the
absoute contro of Grigio% "( sti$uating these
matters in a contract# Grigio is constrained to
36
foow these $rovisions and woud no onger be
abe to e>ercise the freedom to ater these
wor! shifts and schedues at its own
convenience% Such being the case# Grigio
cannot be considered as an inde$endent 8ob
contractor%
PetitionerIs aegation that Grigio
retained contro over the res$ondents b(
$roviding su$ervisors to monitor the
$erformance of the res$ondents cannot be
given much weight% )nstead of e>ercising their
own discretion or referring the matter to the
o<cers of Grigio# GrigioIs su$ervisors were
obigated to refer to $etitionerIs su$ervisors
an( discre$anc( in the $erformance of the
res$ondents with their s$eci,ed duties%
GSIS vs. NLRC; G.R. No. )576!7; O13o$#%
)5, 2007.
F'13s* Tomas /anting# doing business under
the name and st(e of /anting Securit( and
=atchman Agenc( (/S=A) entered into a
Securit( Service Contract to $rovide securit(
guards to the $ro$erties of the Government
Service )nsurance S(stem (GS)S) at the
contract rate of P3#DDD%DD $er guard $er
month%
&uring the e@ectivit( of the contract# /S=A
requested the GS)S for an u$ward ad8ustment
of the contract rate in view of Section B of
=age 2rder .o% 4 and Section 3 of =age 2rder
.o% 3# which were issued b( the -egiona
Tri$artite =ages and Productivit( "oard0.C-
$ursuant to -e$ubic Act .o% CB3B# otherwise
!nown as the =age -ationai'ation Act%
Acting on the request of /S=A# the GS)S#
through its "oard of Trustees and under "oard
-esoution .o% 3DB# dated +a( 3A# 4554#
a$$roved the u$ward ad8ustments of the
contract $rice from P3#DDD%DD to P3#B4C%DB $er
guard# $er month e@ective .ovember 4# 455D
to *anuar( B# 4554# and PA#3DD%DD e@ective
*anuar( 6# 4554 to +a( 34# 4554%
/S=A assigned securit( guards &anie Fania#
Jector +oreno# )sauro Ferrer# -ubin =ifredo#
*esus &eima *r%# +aria /egas$i# Santiago .oto
*r%# and :irgiio Soriano (hereafter com$ainants)
to guard one of GS)S1s $ro$erties%
2n +arch 4E# 4553# GS)S terminated the
Securit( Service Contract with /S=A% A the
com$ainants# e>ce$t :irgiio Soriano# were
absorbed b( the incoming securit( agenc(%
2n +arch B# 455A# com$ainants ,ed se$arate
com$aints against /S=A for under$a(ment of
wages and non0$a(ment of abor standard
bene,ts from +arch 4554 to +arch 4E# 4553%
:irgiio Soriano aso com$ained of iega
dismissa%
)n its Position Pa$er# /S=A aeged that
com$ainants were esto$$ed from caiming that
the( were under$aid because the( were
informed that the $a( and bene,ts given to
them were based on the contract rate of
P4D3%DD $er eight hours of wor! or about
P3#4DD%DD $er month%
2n August 5# 455A# /S=A ,ed a Third0Part(
Com$aint against GS)S for under$a(ment of
com$ainants1 wages%
)n its Position Pa$er# GS)S aeged that the
Third0Part( Com$aint states no cause of action
against it? that /S=A obigated itsef in the
Securit( Service Contract to be soe( iabe for
the enforcement of and com$iance with a
e>isting abor aws# rues and reguations? that
the GS)S "oard of Trustees a$$roved the
u$ward ad8ustment on a month0to0month basis#
at PA#3DD $er guard $er month# e@ective
*anuar( 6# 4554 to +a( 34# 4554# under "oard
-esoution .o% 3DB dated +a( 3A# 4554# which
was incor$orated in the Securit( Service
Contract? that GS)S fu( $aid the services of
the securit( guards as agreed u$on in the
Securit( Service Contract%
Iss&#s* =hether GS)S is soidari( iabe for
$a(ment of com$ainants0res$ondnents1
saar( di@erentias%
H#/0*
Nes% Artices 4DC and 4DB of the /abor Code
$rovideF
A-T% 4DC% Contractor or
subcontractor% Z =henever an
em$o(er enters into contract
with another $erson for the
$erformance of the former1s
wor!# the em$o(ees of the
contractor and of the atter1s
subcontractor# if an(# sha be
$aid in accordance with the
$rovisions of this Code%
)n the event that the contractor
or subcontractor fais to $a( the
wage of his em$o(ees in
accordance with this Code# the
em$o(er sha be 8oint( and
severa( iabe with his
contractor or subcontractor to
such em$o(ees to the e>tent of
the wor! $erformed under the
contract# in the same manner
and e>tent that he is iabe to
em$o(ees direct( em$o(ed b(
him%
A-T% 4DB )ndirect em$o(er%
Z The $rovisions of the
immediate( $receding Artice
sha i!ewise a$$( to an(
$erson# $artnershi$# association
or cor$oration which# not being
35
an em$o(er# contracts with an
inde$endent contractor for the
$erformance of an( wor!# tas!#
8ob or $ro8ect%
)n this case# the GS)S cannot evade iabiit( b(
caiming that it had fu( $aid com$ainants1
saaries b( incor$orating in the Securit( Service
Contract the saar( rate increases mandated b(
=age 2rder .os% 4 and 3 b( increasing the
contract $rice from P3#DDD%DD to P3#4BC%DB $er
guard $er month e@ective .ovember 4# 455D to
*anuar( B# 4554# and PA#3DD%DD e@ective
*anuar( 6# 4554 to +a( 34# 4554%
)n -osewood Processing# )nc% v% .ationa /abor
-eations Commission# 3E the Court e>$ained
the rationae for the 8oint and severa iabiit( of
the em$o(er# thusF
The 8oint and severa iabiit( of the em$o(er or
$rinci$a was enacted to ensure com$iance
with the $rovisions of the Code# $rinci$a(
those on statutor( minimum wage% The
contractor or subcontractor is made iabe b(
virtue of his or her status as a direct em$o(er#
and the $rinci$a as the indirect em$o(er of
the contractor1s em$o(ees% This iabiit(
faciitates# if not guarantees# $a(ment of the
wor!ers1 com$ensation# thus# giving the
wor!ers am$e $rotection as mandated b( the
456B Constitution% This is not undu(
burdensome to the em$o(er% Shoud the
indirect em$o(er be constrained to $a( the
wor!ers# it can recover whatever amount it had
$aid in accordance with the terms of the
service contract between itsef and the
contractor%
Thus# the Court does not agree with the GS)S1s
caim that a doube burden woud be im$osed
u$on the atter because it woud be $a(ing
twice for com$ainants1 services% Such fears are
unfounded% Under Artice 434B of the Civi
Code# if the GS)S shoud $a( the mone( caims
of com$ainants# it has the right to recover from
/S=A whatever amount it has $aid in
accordance with the terms of the service
contract between the /S=A and the GS)S%
*oint and soidar( iabiit( is sim$( meant to
assure aggrieved wor!ers of immediate and
su<cient $a(ment of what is due them% This is
in ine with the $oic( of the State to $rotect
and aeviate the $ight of the wor!ing cass%
R#5&$/.1 o: 34# P4./s., %#5%#s#23#0 $(
So1.'/ S#1&%.3( Co--.ss.o2 '20 So1.'/
S#1&%.3( S(s3#-
vs. ASIAPRO Coo5#%'3.v#, G.R. No.
)72)0), Nov#-$#% 2", 2007
F'13s*
"efore this Court is a Petition for -eview
on Certiorari under -ue AE see!ing to annu
and set aside the &ecision and -esoution of
the Court of A$$eas which annued and set
aside the 2rders of the Socia Securit(
Commission (SSC) thereb( dismissing the
$etition0com$aint ,ed b( herein $etitioner
Socia Securit( S(stem (SSS) against herein
res$ondent%
-es$ondent Asia$ro# a coo$erative# is
com$osed of owners0members% )ts $rimar(
ob8ectives are to $rovide savings and credit
faciities and to deveo$ other iveihood
services for its owners0members% )n the
discharge of the aforesaid $rimar( ob8ectives#
res$ondent coo$erative entered into severa
Service Contracts with Stan,co% The owners0
members do not receive com$ensation or
wages from the res$ondent coo$erative%
)nstead# the( receive a share in the service
sur$us which the res$ondent coo$erative
earns from di@erent areas of trade it engages
in# such as the income derived from the said
Service Contracts with Stan,co% The owners0
members get their income from the service
sur$us generated b( the quait( and amount of
services the( rendered# which is determined b(
the "oard of &irectors of the res$ondent
coo$erative%
2wners0members of the res$ondent
coo$erative# who were assigned to Stan,co
requested the services of the atter to register
them with $etitioner SSS as sef0em$o(ed and
to remit their contributions as such% To com$(
with Section 450A of -e$ubic Act .o% 44C4# as
amended b( -e$ubic Act .o% 6363# the SSS
contributions of the said owners0members were
equa to the share of both the em$o(er and
the em$o(ee%
Petitioner SSS sent a etter to the
res$ondent coo$erative informing the atter
that based on the Service Contracts it e>ecuted
with Stan,co# res$ondent coo$erative is
actua( a man$ower contractor su$$(ing
em$o(ees to Stan,co and for that reason# it is
an em$o(er of its owners0members wor!ing
with Stan,co% Thus# res$ondent coo$erative
shoud register itsef with $etitioner SSS as an
em$o(er and ma!e the corres$onding re$ort
and remittance of $remium contributions in
accordance with the Socia Securit( /aw of
455B% -es$ondent coo$erative sent an answer
to $etitioner asserting that it is not an
em$o(er because its owners0members are the
coo$erative itsef? hence# it cannot be its own
em$o(er% Again# on 34 2ctober 3DD3# SSS sent
a etter to res$ondent coo$erative ordering the
atter to register as an em$o(er and re$ort its
owners0members as em$o(ees for com$usor(
coverage with the $etitioner SSS% -es$ondent
coo$erative continuous( ignored the demand
of $etitioner SSS%
According(# $etitioner SSS# on 43 *une
3DD3# ,ed a Petition before $etitioner SSC
against the res$ondent coo$erative and
Stan,co $ra(ing that the res$ondent
coo$erative or# in the aternative# Stan,co be
directed to register as an em$o(er and to
re$ort res$ondent coo$eratives owners0
members as covered em$o(ees under the
com$usor( coverage of SSS and to remit the
necessar( contributions in accordance with the
Socia Securit( /aw of 455B% 2n 4B Februar(
3DDA# $etitioner SSC issued an 2rder den(ing
the +otion to &ismiss ,ed b( the res$ondent
coo$erative% The res$ondent coo$erative
AD
moved for the reconsideration of the said
2rder# but it was i!ewise denied% -es$ondent
coo$erative ,ed a Petition for Certiorari before
the Court of A$$eas wherein its $etition was
granted% SSS motion for reconsideration having
been denied now goes to the Su$reme Court%
Iss&#F =hether or not an em$o(ee0em$o(er
reationshi$ e>ists between res$ondent
coo$erative and its owner0member;
R&/.29*
A$$(ing the four0fod test# SC hedF
6irst% )t is e>$ress( $rovided in the
Service Contracts that it is the res$ondent
coo$erative which has the #H1/&s.v#
0.s1%#3.o2 .2 34# s#/#13.o2 '20
#29'9#-#23 o: 34# o>2#%s,-#-$#%s 's
>#// 's .3s 3#'- /#'0#%s >4o >.// $#
'ss.92#0 '3 S3'2B/1o%
%econd% <'9#s '%# 0#B2#0 's
%#-&2#%'3.o2 o% #'%2.29s, 4o>#v#%
0#s.92'3#0# ca$abe of being e>$ressed in
terms of mone(# whether ,>ed or ascertained#
on a time# tas!# $iece or commission basis# or
other method of cacuating the same# which is
5'('$/# $( '2 #-5/o(#% 3o '2 #-5/o(##
&20#% ' >%.33#2 o% &2>%.33#2 1o23%'13 o:
#-5/o(-#23 :o% >o%K 0o2# o% 3o $# 0o2#,
o% :o% s#%v.1# %#20#%#0 o% 3o $#
%#20#%#0%)n this case# the >##K/( sti$ends or
the so0caed shares in the service sur$us
given b( the res$ondent coo$erative to its
owners0members were in reait( wages# as the
same were equivaent to an amount not ower
than that $rescribed b( e>isting abor aws#
rues and reguations# incuding the wage order
a$$icabe to the area and industr(? or the
same sha not be ower than the $revaiing
rates of wages%)t cannot be doubted then that
those sti$ends or shares in the service sur$us
are indeed wages# because these are given to
the owners0members as com$ensation in
rendering services to res$ondent coo$eratives
cient# Stan,co%
!ird% )t is aso stated in the above0
mentioned Service Contracts that it is the
res$ondent coo$erative which has the 5o>#%
3o .2v#s3.9'3#, 0.s1.5/.2# '20 %#-ov# 34#
o>2#%s,-#-$#%s '20 .3s 3#'- /#'0#%s who
were rendering services at Stan,co%
6ourt!% As earier o$ined# of the four
eements of the em$o(er0em$o(ee
reationshi$# the contro test is the most
im$ortant%)n the case at bar# it is the
%#s5o20#23 1oo5#%'3.v# >4.14 4's 34#
so/# 1o23%o/ ov#% 34# -'22#% '20 -#'2s
o: 5#%:o%-.29 34# s#%v.1#s &20#% 34#
S#%v.1# Co23%'13s >.34 S3'2B/1o 's >#// 's
34# -#'2s '20 -#34o0s o: >o%K%Aso# the
res$ondent coo$erative is soe( and entire(
res$onsibe for its owners0members# team
eaders and other re$resentatives at
Stan,co%A these cear( $rove that# indeed#
there is an em$o(er0em$o(ee reationshi$
between the res$ondent coo$erative and its
owners0members%
)t is true that the Service Contracts
e>ecuted between the res$ondent coo$erative
and Stan,co e>$ress( $rovide that there sha
be no em$o(er0em$o(ee reationshi$ between
the res$ondent coo$erative and its owners0
members% This Court# however# cannot give the
said $rovision force and e@ect%
As $revious( $ointed out b( this Court#
an em$o(ee0em$o(er reationshi$ actua(
e>ists between the res$ondent coo$erative and
its owners0members% The four eements in the
four0fod test for the e>istence of an
em$o(ment reationshi$ have been com$ied
with% The res$ondent coo$erative must not be
aowed to den( its em$o(ment reationshi$
with its owners0members b( invo!ing the
questionabe Service Contracts $rovision# when
in actuait(# it does e>ist% T4# #H.s3#21# o:
'2 #-5/o(#%,#-5/o(## %#/'3.o2s4.5
1'22o3 $# 2#9'3#0 $( #H5%#ss/(
%#5&0.'3.29 .3 .2 ' 1o23%'13, >4#2 34#
3#%-s '20 s&%%o&20.29 1.%1&-s3'21#s
s4o> o34#%>.s#. T4# #-5/o(-#23 s3'3&s
o: ' 5#%so2 .s 0#B2#0 '20 5%#s1%.$#0 $(
/'> '20 2o3 $( >4'3 34# 5'%3.#s s'( .3
s4o&/0 $#%
)t is setted that the contracting $arties
ma( estabish such sti$uations# causes# terms
and conditions as the( want# and their
agreement woud have the force of aw
between them%Jowever# 34# '9%##0 3#%-s
'20 1o20.3.o2s -&s3 2o3 $# 1o23%'%( 3o
/'>, -o%'/s, 1&s3o-s, 5&$/.1 5o/.1( o%
5&$/.1 o%0#%%The Service Contract $rovision in
question must be struc! down for being
contrar( to aw and $ubic $oic( since it is
a$$arent( being used b( the res$ondent
coo$erative mere( to circumvent the
com$usor( coverage of its em$o(ees# who are
aso its owners0members# b( the Socia Securit(
/aw%
)t bears stressing# too# that a
coo$erative acquires 8uridica $ersonait( u$on
its registration with the Coo$erative
&eveo$ment Authorit(% )t has its "oard of
&irectors# which directs and su$ervises its
business? meaning# its "oard of &irectors is the
one in charge in the conduct and management
of its a@airs% =ith that# a coo$erative can be
i!ened to a cor$oration with a $ersonait(
se$arate and distinct from its owners0members%
Consequent(# an owner0member of a
coo$erative can be an em$o(ee of the atter
and an em$o(er0em$o(ee reationshi$ can
e>ist between them%
)n the $resent case# it is not dis$uted
that the res$ondent coo$erative had registered
itsef with the Coo$erative &eveo$ment
Authorit(# as evidenced b( its Certi,cate of
-egistration .o% D0C3303ACD%)n its b(0aws# its
"oard of &irectors directs# contros# and
su$ervises the business and manages the
$ro$ert( of the res$ondent coo$erative%
Cear( then# the management of the a@airs of
the res$ondent coo$erative is vested in its
"oard of &irectors and not in its owners0
members as a whoe% Therefore# it is
com$ete( ogica that the res$ondent
coo$erative# as a 8uridica $erson re$resented
A4
b( its "oard of &irectors# can enter into an
em$o(ment with its owners0members%
Javing decared that there is an
em$o(er0em$o(ee reationshi$ between the
res$ondent coo$erative and its owners0
member# we concude that the $etitioner SSC
has 8urisdiction over the $etition0com$aint ,ed
before it b( the $etitioner SSS%
<HEREFORE# $remises considered# the
instant Petition is hereb( GRANTED%
A/-#0' vs. As'4. G/'ss P4./.55.2#s,I21.
FactsF
-es$ondent Asahi Gass Phi%# )nc# a domestic
cor$oration engaged in gass manufacturing
business and San Sebastian Aied Services# )nc
(SSAS)) entered into a service contract on E
+arch 3DD3 whereb( the atter undertoo! to
$rovide the former with the necessar(
man$ower% Petitioners Ameda et% a as gass
cutters and gass quait( controer were hired
$ursuant to such contract and assigned for
res$ondent% Petitioners wor!ed for res$ondent
for $eriods ranging from three to 44 (ears% 2n
4 &ecember 3DD3# res$ondent terminated its
service contract with SSAS)# which in turn#
terminated the em$o(ment of $etitioners on
the same date% So# $etitioners ,ed a com$aint
of iega dismissa asserting that the( shoud
be considered reguar em$o(ees where their
wor! has been desirabe to the business of
res$ondent wor!ing for three to 44 (ears and
that SSAS) is a abor0on( contractor% Petitioners
asserted it is res$ondent who asserted contro
submitting a co$( of their wor! schedue
containing the time and manner of $erforming
their 8obs dictated b( res$ondent? and that the(
wor!ed in res$ondentIs $remises on(%
-es$ondent on one hand# averred that
$etitioners are not its em$o(ees but of SSAS)?
and that $etitioners were hired for intermittent
services on( $ursuant to an Accreditation
Agreement# dated E +arch 3DD3% A certi,cate
of registration issued b( &2/H on 3 *anuar(
3DD3 was $resented $ur$orting that SSAS) is a
egitimate 8ob contractor% Co$( of o$inions of
&2/H dated46 Februar( 3DD3 were aso shown
authori'ing res$ondent to contract out certain
activities not necessar( or desirabe to the
business of the com$an(%
The /abor Arbiter in view of the Loverwheming
documentar( evidenceM of res$ondents refuting
the bare aegations of the $etitioners#
dismissed the com$aint% ./-C reversed the
/AIs decision stating that SSAS) was engaged in
abor0on( contracting 00since it did not have
substantia ca$ita and investment in the form
of toos# equi$ment and machineries U ma!ing
$etitioners em$o(ees of res$ondent% 2n
a$$ea# CA reversed ./-CIs ,ndings% .ow on
$etition for review on certiorari be+ore %C
)ssuesF
=hether $etitioners are em$o(ees of
res$ondent
Jinged on the issueF =hether or not it is
estabished that SSAS) was a abor0on(
contractor
-uingF
)n abor0on( contracting# the statutes create an
em$o(er0em$o(ee reationshi$ for a
com$rehensive $ur$oseF to $revent
circumvention of abor aws% The contractor is
considered as mere( the agent of the $rinci$a
em$o(er and the atter is res$onsibe to the
em$o(ees of the abor0on( contractor as if
such em$o(ees are direct( em$o(ed b( the
$rinci$a em$o(er%
SSAS) is a abor0on( contractor# thus
res$ondent sha be considered as the
em$o(er of $etitioners who must bear the
iabiit( for the dismissa of the atter# if an(%
The foowing reasonsGcircumstances materia
to the case eading to such concusion areF
a% -es$ondent faied to $rove that SSAS)
$ossessed substantia ca$ita or investment
when res$ondent began contractua reations
with it more than a decade before 3DD3% .o
singe ,nancia statement or record to attest to
the economic status and ,nancia ca$acit( of
SSAS) to venture into and sustain its own
business inde$endent from $etitioner%
b% Petitioners were $erforming 8obs that were
direct( reated to res$ondentIs main ine of
business% -es$ondent being engaged in gass
manufacturing whie $etitioners wor!ed as
quait( controer and gass cutters cear(
indicate a direct reation between res$ondentIs
business and $etitionerIs wor!% -es$ondentIs
argument that $etitioners were required on(
when there was an increase in the mar!etIs
demand with which res$ondent coud not co$e#
on( $rove even more that the services
rendered b( $etitioners were indeed $art of the
main business of res$ondent% -es$indentIs
argument that $etitionerIs were hired on(
intermittent( de$ending on the mar!et is
negated b( ength and continuit( of their
$erformance# asting for $eriods ranging from
three to 44 (ears% Thus# $etitionerIs services
are indis$ensabe%
c% The crucia eement of contro over
$etitioners rested in res$ondent% The $ower of
contro refers to the authorit( of the em$o(er
to contro the em$o(ee not on( with regard to
the resut of wor! to be done# but aso to the
means and methods b( which the wor! is to be
accom$ished% )t shoud be borne in mind that
the $ower of contro refers mere( to the
e>istence of the $ower and not to the actua
e>ercise thereof% )t is not essentia for the
em$o(er to actua( su$ervise the
$erformance of duties of the em$o(ee? it is
enough that the former has a right to wied the
$ower%
Petitioners wor!ed at the res$ondentIs
$remises# and nowhere ese% Petitioners
foowed the wor! schedue $re$ared b(
res$ondent% The( were required to observe a
rues and reguations of the res$ondent
$ertaining to# among other things# the quait(
A3
of 8ob $erformance# reguarit( of 8ob out$ut#
and the manner and method of accom$ishing
the 8obs%
Hvidence is ac!ing that SSAS) e>ercised
contro over them or their wor!% The fact that it
was SSAS) which dismissed $etitioners from
em$o(ment is irreevant% )t is hard( $roof of
contro# since it was demonstrated on( at the
end of $etitionersI em$o(mentZa mere
consequence of termination of contractua
reations of SSAS) and res$ondent%
d% The Certi,cate of -egistration $resented to
boster the $osition that SSAS) is a du(
registered 8ob contractor was issued on( on 3
*anuar( 3DD3% There is no further $roof that
$rior to said date# SSAS) had aread( registered
with and had been recogni'ed b( the &2/H as a
8ob contractor% The timing of SSAS)Is beated
registration is high( sus$icious considering
that SSAS) was aread( $roviding res$ondent
with wor!ers# incuding $etitioners wor!ing for
res$ondent for 44 (ears# ong before SSAS) was
registered with the &2/H as a 8ob contractor%
Petitioners were aso dismissed from service
on( a month $rior to the issuance of the
Certi,cate of -egistration of SSAS)% The
surrounding circumstances indicate that the
certi,cate of registration was mere( secured in
order to ban!et the $revious reations between
SSAS) and res$ondent with egait(%
The Certi,cate of -egistration issued b( the
&2/H recogni'ed that SSAS) was a egitimate
8ob contractor on( as of the date of its
issuance# 3 *anuar( 3DD3% The Certi,cate can
on( be used as reference b( $ersons who
woud consider the services o@ered b( SSAS)
subsequent to its issuance% -es$ondent# who
entered into contractua reations with SSAS)
wa( before the said Certi,cate# cannot caim
that it reied thereon%
e% The Accreditation Agreement sti$uating that
$etitioners were to remain em$o(ees of SSAS)
and sha not become reguar em$o(ees of the
res$ondent does not govern the status of
$etitioners% A $art( cannot dictate# b( the mere
e>$edient of a uniatera decaration in a
contract# the character of its business# i*e*,
whether as abor0on( contractor or as 8ob
contractor# it being crucia that its character be
measured in terms of and determined b( the
criteria set b( statute%
ROLANDO SASAN, SR. #3.'/. VS. NLRC !TH
DIVISION, EGUITACLE,PCI CANK AND
HELP+ATE, INC.
G.R. No. )762!0, O13o$#% )7, 2006
FactsF
-es$ondent H0PC)"an! entered into a Contract
for Services with J)# a domestic cor$oration
$rimari( engaged in the business of $roviding
8anitoria and messengeria services% Pursuant
to their contract# J) sha hire and assign
wor!ers to H0PC)"an! to $erform
8anitoriaGmessengeria and maintenance
services% The contract was im$ied( renewed
(ear after (ear% Petitioners -oando Sasan# Sr#
/eonio &a(da(# +odesto Aguirre# Ae8andro
Ardimer# Heuterio Saci# =ifredo *uegos#
Petronio Carcedo# and Cesar Peciencia were
among those em$o(ed and assigned to H0
PC)"an! at its branch at /ahug# Cebu Cit(%
2n 33 *u( 3DD4# $etitioners ,ed with the
Arbitration "ranch of the ./-C in Cebu Cit(
se$arate com$aintsQ4AR against H0PC)"an! and
J) for iega dismissa# with caims for
se$aration $a(# service incentive eave $a(#
aowances# damages# attorne(1s fees and
costs% )n its amended com$aint# it incuded
caims for 43th month $a(%
Severa conciiation hearings were schedued
b( /abor Arbiter Gutierre' but the $arties sti
faied to arrive at a mutua( bene,cia
settement? hence# /abor Arbiter ordered that
the( submit their res$ective $osition $a$ers%
Petitioners caimed that the( had become
reguar em$o(ees of H0PC)"an! with res$ect to
the activities for which the( were em$o(ed#
having continuous( rendered 8anitoria and
messengeria services to the ban! for more
than one (ear? that H0PC)"an! had direct
contro and su$ervision over the means and
methods b( which the( were to $erform their
8obs? and that their dismissa b( J) was nu and
void because the atter had no $ower to do so
since the( had become reguar em$o(ees of H0
PC)"an!%
For its $art# H0PC)"an! averred that it entered
into a Contract for Services with J)# an
inde$endent 8ob contractor which hired and
assigned $etitioners to the ban! to $erform
8anitoria and messengeria services thereat% )t
was J) that $aid $etitioners1 wages# monitored
$etitioners1 dai( time records (&T-) and
uniforms# and e>ercised direct contro and
su$ervision over the $etitioners and that
therefore J) has ever( right to terminate their
services ega(% H0PC)"an! coud not be hed
iabe for whatever misdeed J) had committed
against its em$o(ees%
J)# on the other hand# asserted that it was an
inde$endent 8ob contractor engaged in the
business of $roviding 8anitoria and reated
services to business estabishments# and H0
PC)"an! was one of its cients% Petitioners were
its em$o(ees# $art of its $oo of
8anitorsGmessengers assigned to H0PC)"an!%
The Contract for Services between J) and H0
PC)"an! e>$ired on 4E *u( 3DDD% H0PC)"an! no
onger renewed said contract with J) and#
instead# bidded out its 8anitoria requirements
to two other 8ob contractors# Abe Services and
Puritan% J) designated $etitioners to new wor!
assignments# but the atter refused to com$(
with the same% Petitioners were not dismissed
b( J)# whether actua( or constructive(# thus#
$etitioners1 com$aints before the ./-C were
without basis%
/abor Arbiter rendered a &ecision ,nding that
J) was not a egitimate 8ob contractor on the
ground that it did not $ossess the required
substantia ca$ita or investment to actua(
$erform the 8ob# wor!# or service under its own
A3
account and res$onsibiit( as required under
the /abor Code% J) is therefore a abor0on(
contractor and the rea em$o(er of $etitioners
is H0PC)"an! which is hed iabe to $etitioners%
*udgment was rendered directing the
res$ondents Hquitabe PC) "an! and Je$mate#
)nc% to $a( 8oint( and soidari( the
com$ainants%
H0PC)"an! and J) a$$eaed the same to the
./-C% The ./-C too! into consideration the
documentar( evidence $resented b( J) for the
,rst time on a$$ea and# on the basis thereof#
decared J) as a high( ca$itai'ed venture with
su<cient ca$itai'ation# which cannot be
considered engaged in 7abor0on( contracting%
The ./-C deeted /abor ArbiterIs award of
bac!wages and se$aration $a(# but a<rmed
his award for 43th month $a( and attorne(1s
fees%
Court of A$$eas a<rmed the ,ndings of the
./-C that J) was a egitimate 8ob contractor
and that it did not iega( dismiss $etitioners%
)SSUHF =hether or not ./-C erred in
considering new evidence $resented ,rst time
on a$$ea% =2. J) is egitimate contractor%
=2. the $etitioners are iega( dismissed%
-U/).GF
2ur 8uris$rudence is aread( re$ete with cases
aowing the ./-C to admit evidence# not
$resented before the /abor Arbiter# and
submitted to the ./-C for the ,rst time on
a$$ea% Technica rues of evidence are not
binding in abor cases% /abor o<cias shoud
use ever( reasonabe means to ascertain the
facts in each case s$eedi( and ob8ective(#
without regard to technicaities of aw or
$rocedure# a in the interest of due $rocess%
)n the case at bar# we ,nd substantia evidence
to su$$ort the ,nding of the ./-C# a<rmed b(
the Court of A$$eas# that J) is a egitimate 8ob
contractor%
=e ta!e note that J) has been issued b( the
&e$artment of /abor and Hm$o(ment (&2/H)
Certi,cate of -egistrationQAAR .umbered :))0
6E50435B0DA6% Javing been issued b( a $ubic
o<cer# this certi,cation carries with it the
$resum$tion that it was issued in the reguar
$erformance of o<cia dut(%QACR )n the
absence of $roof# $etitioner1s bare assertion
cannot $revai over this $resum$tion%
The evidence on record aso shows that J) is
carr(ing on a distinct and inde$endent business
from H0PC)"an!% The em$o(ees of J) are
assigned to cients to $erform 8anitoria and
messengeria services# cear( distinguishabe
from the ban!ing services in which H0PC)"an! is
engaged%
7Substantia ca$ita or investment7 refers to
ca$ita stoc!s and subscribed ca$itai'ation in
the case of cor$orations# toos# equi$ments#
im$ements# machineries and wor! $remises#
actua( and direct( used b( the contractor or
subcontractor in the $erformance or com$etion
of the 8ob# wor! or service contracted out%QABR
An inde$endent contractor must have either
substantia ca$ita or investment in the form of
toos# equi$ment# machineries# wor! $remises#
among others% The aw does not require both
substantia ca$ita and investment in the form
of toos# equi$ment# machineries# etc%QA6R )t is
enough that it has substantia ca$ita%
)n the case of J)# it has $roven both%
The services rendered b( the $etitioners as
8anitors# messengers and drivers are
considered not necessar( in the conduct of its
(H0PC)"A.T1s) $rinci$a business%QEDR
Htched in an unending stream of cases are four
standards in determining the e>istence of an
em$o(er0em$o(ee reationshi$# name(F (a)
the manner of seection and engagement of the
$utative em$o(ee? (b) the mode of $a(ment of
wages? (c) the $resence or absence of $ower of
dismissa? and# (d) the $resence or absence of
contro of the $utative em$o(ee1s conduct%
+ost determinative among these factors is the
so0caed 7contro test%7
2n the $ower to contro the em$o(ee1s
conduct# and the fourth requisite regarding the
$ower of dismissa# again H0PC)"an! did not
have the $ower to contro $etitioners with
res$ect to the means and methods b( which
their wor! was to be accom$ished% )t i!ewise
had no $ower of dismissa over the $etitioners%
A that H0PC)"an! coud do was to re$ort to J)
an( untoward act# negigence# misconduct or
mafeasance of an( em$o(ee assigned to the
$remises%
)n view of the $receding concusions#
$etitioners wi never become reguar
em$o(ees of H0PC)"an! regardess of how ong
the( were wor!ing for the atter%
=e further rue that $etitioners were not
iega( dismissed b( J)% U$on the termination
of the Contract of Service between J) and H0
PC)"an!# $etitioners cannot insist to continue
to wor! for the atter% Their $u0out from H0
PC)"an! did not constitute iega dismissa
since# ,rst# $etitioners were not em$o(ees of
H0PC)"an!? and second# the( were $ued out
from said assignment due to the non0renewa of
the Contract of Service between J) and H0
PC)"an!% At the time the( ,ed their
com$aints with the /abor Arbiter# $etitioners
were not even dismissed b( J)? the( were on(
7o@0detai7 $ending their re0assignment b( J)
to another cient% And when the( were actua(
given new assignments b( J) with other cients#
$etitioners even refused the same% As the
./-C $ronounced# $etitioners1 com$aint for
iega dismissa is a$$arent( $remature%
Petition is &H.)H& for ac! of merit% CA decision
a<rmed%
AA
PUREFOODS CORPORATION VS NLRC
G.R. No. )722!) Nov#-$#% 20,
2006
FACTS* .eri ,ed a caim for non$a(ment of
additiona wage increase# reguari'ation#
non$a(ment of service incentive eave#
under$a(ment of 43th month $a(# and
non$a(ment of $remium $a( for hoida( and
hoida( $a( against Purefoods Cor$oration
(Purefoods)% .eri was thereafter dismissed from
her wor! as a &ei0Attendant% Subsequent(#
.eri ,ed an amended com$aint charging
Purefoods with iega dismissa% The /abor
Arbiter then decared .eri as Purefoods1 reguar
em$o(ee? and .eri as having been iega(
dismissed and entited to reinstatement with
$a(ment of bac!wages% Purefoods ,ed a
$artia a$$ea# $ra(ing that the case be
remanded for forma hearing on the merits and
to im$ead &%/% Admar! as a $art(0res$ondent%
The ./-C granted the a$$ea and remanded
the case for further hearings on the factua
issues%
The case was remanded to a /abor Arbiter#
who# after ,nding that .eri is not an em$o(ee
of $etitioner# but rather of &%/% Admar!# an
inde$endent abor contractor# dismissed the
com$aint% .eri a$$eaed to the ./-C# which
rued in com$ainants1 favor and reversed and
set aside the abor arbiter1s decision% Jence#
Purefoods recourse to the CA%
The CA hed that &%/% Admar! is a egitimate
inde$endent contractor% Jowever# it rued that
com$ainants are reguar em$o(ees of
Purefoods% Citing Art% 36D of the /abor Code#
the a$$eate court found that com$ainants
were engaged to $erform activities which are
usua( necessar( or desirabe in the usua
business or trade of Purefoods# and that the(
were under the contro and su$ervision of
Purefoods1 su$ervisors# and not of &%/%
Admar!1s% )t noted that in the Promotions
Agreements between &%/% Admar! and
Purefoods# there was no mention of the ist of
&%/% Admar! em$o(ees who wi hande
$articuar $romotions for $etitioner# and that
com$ainants1 $eriods of em$o(ment are not
fu( covered b( the Promotions Agreements%
Thus# this $etition%
)n the $resent $etition for review# Purefoods
maintains that .eri is not an em$o(ee of
Purefoods# but of &%/% Admar!# an inde$endent
8ob contractor% Thus# it cannot be hed iabe for
iega dismissa% Fina(# it caims that Artice
36D of the /abor Code is not a$$icabe in a
triatera reationshi$ invoving a $rinci$a# an
inde$endent 8ob contractor# and the atter1s
em$o(ees%
ISSUE* =hether or not .eri is an em$o(ee of
Purefoods
HELD* .ot an em$o(ee%
The Court agrees with Purefoods1 argument
that Art% 36D of the /abor Code ,nds no
a$$ication in a triatera reationshi$ invoving
a $rinci$a# an inde$endent 8ob contractor# and
the atter1s em$o(ees% )ndeed# the Court has
rued that said $rovision is not the (ardstic! for
determining the e>istence of an em$o(ment
reationshi$ because it mere( distinguishes
between two !inds of em$o(ees# i%e%# reguar
em$o(ees and casua em$o(ees# for $ur$oses
of determining the right of an em$o(ee to
certain bene,ts# to 8oin or form a union# or to
securit( of tenure? it does not a$$( where the
e>istence of an em$o(ment reationshi$ is in
dis$ute% )t is therefore erroneous on the $art of
the Court of A$$eas to re( on Art% 36D in
determining whether an em$o(er0em$o(ee
reationshi$ e>ists between res$ondent .eri
and Purefoods%
Permissibe 8ob contracting or subcontracting
refers to an arrangement whereb( a $rinci$a
agrees to $ut out or farm out with the
contractor or subcontractor the $erformance or
com$etion of a s$eci,c 8ob# wor! or service
within a de,nite or $redetermined $eriod
regardess of whether such 8ob# wor! or service
is to be $erformed or com$eted within or
outside the $remises of the $rinci$a% )n this
arrangement# the foowing conditions must be
metF (a) the contractor carries on a distinct and
inde$endent business and underta!es the
contract wor! on his account under his own
res$onsibiit( according to his own manner and
method# free from the contro and direction of
his em$o(er or $rinci$a in a matters
connected with the $erformance of his wor!
e>ce$t as to the resuts thereof? (b) the
contractor has substantia ca$ita or
investment? and (c) the agreement between
the $rinci$a and contractor or subcontractor
assures the contractua em$o(ees1 entitement
to a abor and occu$ationa safet( and heath
standards# free e>ercise of the right to sef0
organi'ation# securit( of tenure# and socia
wefare bene,ts%
)n the ,rst $ace# &%/% Admar!1s status as a
egitimate inde$endent contractor has aread(
been estabished in Hscario v% ./-C% )n the said
case# com$ainants# through &%/% Admar!#
wor!ed as merchandisers for Caifornia
+anufacturing Cor$oration (C+C)% The( ,ed a
case before the abor arbiter for the
reguari'ation of their em$o(ment status with
C+C# and whie the case was $ending# &%/%
Admar! sent termination etters to
com$ainants% The com$ainants thereafter
amended their com$aint to incude iega
dismissa% The Court considered the foowing
circumstances as tending to estabish &%/%
Admar!1s status as a egitimate 8ob contractorF
4) The SHC registration certi,cate of &%/%
Admar! states that it is a ,rm engaged in
$romotiona# advertising# mar!eting and
merchandising activities%
3) The service contract between C+C and &%/%
Admar! cear( $rovides that the agreement is
for the su$$( of saes $romoting
merchandising services rather than one of
man$ower $acement%
3) &%/% Admar! was actua( engaged in severa
activities# such as advertising# $ubication#
$romotions# mar!eting and merchandising% )t
had severa merchandising contracts with
com$anies i!e Purefoods# Corona Su$$(#
.abisco "iscuits# and /icron% )t was i!ewise
AE
engaged in the $ubication business as
evidenced b( its maga'ine the 7Phenomenon%7
A) )t had its own ca$ita assets to carr( out its
$romotion business% )t then had current assets
amounting to PC miion and is therefore a
high( ca$itai'ed venture% )t had an authori'ed
ca$ita stoc! of PEDD#DDD%DD% )t owned severa
motor vehices and other toos# materias and
equi$ment to service its cients% )t $aid rentas
of P3D#D3D for the o<ce s$ace it occu$ied%
+oreover# a$$(ing the four0fod test used in
determining em$o(er0em$o(ee reationshi$#
the Court found thatF the em$o(ees therein
were seected and hired b( &%/% Admar!? &%/%
Admar! $aid their saaries# as evidenced b( the
$a(ro $re$ared b( &%/% Admar! and sam$e
contribution forms? &%/% Admar! had the $ower
of dismissa as it admitted that it was the one
who terminated the em$o(ment of the
em$o(ees? and ,na(# it was &%/% Admar! who
e>ercised contro and su$ervision over the
em$o(ees%
Furthermore# it is evident from the Promotions
Agreements entered into b( Purefoods that &%/%
Admar! is a egitimate abor contractor% The
agreements con,rm that &%/% Admar! is an
inde$endent contractor which Purefoods had
engaged to su$$( genera $romotion services#
and not mere man$ower services# to it% The
$rovisions e>$ress( $ermit &%/% Admar! to
hande and im$ement Purefoods1 $ro8ect# and
categorica( state that there sha be no
em$o(er0em$o(ee reationshi$ between &%/%
Admar!1s em$o(ees and Purefoods% =hie it
ma( be true that com$ainants were required to
submit reguar re$orts and were introduced as
Purefoods merchandisers# these are not enough
to estabish Purefoods1 contro over them% Hven
if the re$ort requirements are somehow
considered as contro measures# the( were
im$osed on( to ensure the e@ectiveness of the
$romotion services rendered b( &%/% Admar!% )t
woud be a rare contract of service that gives
untrammeed freedom to the $art( hired and
eschews an( intervention whatsoever in his
$erformance of the engagement% )ndeed# it
woud be foohard( for an( com$an( to
com$ete( give the reins and tota( ignore the
o$erations it has contracted out%
=e aso note that .eri hersef admitted in her
Sinum$aang Saa(sa( and in the hearings that
she a$$ied with &%/% Admar! and that she
wor!ed for Purefoods through &%/% Admar!% .eri
was aware from the start that &%/% Admar! was
her em$o(er and not Purefoods% She had !e$t
her contract with &%/% Admar!# and inquired
about her em$o(ment status with &%/%
Admar!% )t was &%/% Admar!# as her em$o(er#
which had the ,na sa( in# and which actua(
e@ected# her termination%
+'%'2'> Ho3#/s '20 R#so%3 vs Co&%3 o:
A55#/'s, #3 '/., GR No. )!660, 8'2. 20,
200
FACTSF
The $resent $roceedings emanate from a
com$aint for reguari'ation# subsequent(
converted into one for iega dismissa# ,ed
before /abor Arbiter +ad8a(ran J% A8an b(
$rivate res$ondent Sher( 2abe%
)t a$$ears that $rivate res$ondent 2abe was
initia( hired b( $etitioner as an e>tra
beverage attendant on A$ri 3A# 455E% This
asted unti Februar( B# 455B% -es$ondent
wor!ed in Centur( Par! Jote# an estabishment
owned b( the $etitioner%
2n Se$tember 4C# 455C# $etitioner contracted
with +ania -esource &eveo$ment
Cor$oration% Subsequent(# $rivate res$ondent
2abe was transferred to +A.-H&# with the
atter de$orting itsef as her em$o(er% +A.-H&
has intervened at a stages of these
$roceedings and has consistent( caimed to be
the em$o(er of $rivate res$ondent 2abe%
Private res$ondent ,ed before the /abor
Arbiter a $etition for reguari'ation of
em$o(ment against the $etitioner% 2n August
4# 4556# however# $rivate res$ondent 2abe
was dismissed from em$o(ment% -es$ondent
converted her $etition for reguari'ation into a
com$aint for iega dismissa%
/A"2- A-")TH-Is decisionF dismissing the
com$aint against the $etitioner%
./-CIs decisionF )t reversed the ruing of the
/abor Arbiter and hed thatF (4) +A.-H& is a
abor0on( contractor# and (3) $rivate
res$ondent was iega( dismissed% 2f the ,rst
hoding# the ./-C observed that under the ver(
terms of the service contract# +A.-H& sha
$rovide the $etitioner not s$eci,c 8obs or
services but $ersonne and that +A.-H& had
insu<cient ca$itai'ation and was not
su<cient( equi$$ed to $rovide s$eci,c 8obs%
The ./-C i!ewise observed that the activities
$erformed b( the $rivate res$ondent were
direct( reated to and usua( necessar( or
desirabe in the business of the $etitioner% =ith
res$ect to the termination of $rivate
res$ondentIs em$o(ment# the ./-C hed that
it was not e@ected for a vaid or 8ust cause and
was therefore iega%
CAIs decisionF The a$$eate court dismissed
the $etition on account of the faiure of the
$etitioner to a$$end the board resoution
authori'ing the counse for $etitioner to ,e the
$etition before the Court of A$$eas%
)SSUHSF
4% =hether there is a need of certi,cation of
non forum sho$$ing which must be signed b(
du( authori'ed o<cers of a cor$oration%
3% =hether there is em$o(er0em$o(ee
reationshi$ between $etitioner and $rivate
res$ondent# 2abe%
SC -U/).GF
2n the ,rst issue
=e0setted is the rue that the certi,cate of
non0forum sho$$ing is a mandator(
requirement% Substantia com$iance a$$ies
on( with res$ect to the contents of the
certi,cate but not as to its $resence in the
$eading wherein it is required%
PetitionerIs contention that the ,ing of a
motion for reconsideration with an a$$ended
certi,cate of non forum0sho$$ing su<ces to
cure the defect in the $eading is absoute(
s$ecious% )t negates the ver( $ur$ose for which
the certi,cation against forum sho$$ing is
requiredF to inform the Court of the $endenc(
of an( other case which ma( $resent simiar
issues and invove simiar $arties as the one
AC
before it% The requirement a$$ies to both
natura and 8uridica $ersons%
Petitioner reies u$on this CourtIs ruing in
&igita +icrowave Cor$% v% Court of A$$eas to
show that its Personne &irector has been du(
authori'ed to sign $eadings for and in behaf of
the $etitioner% Petitioner# however# has ta!en
the ruing in &igita +icrowave out of conte>t%
The $ortion of the ruing [ 3A
in &igita +icrowave u$on which $etitioner
reies was in res$onse to the issue of
im$ossibiit( of com$iance b( 8uridica $ersons
with the requirements of Circuar 36054% The
CourtIs identi,cation of du( authori'ed o<cers
or directors as the $ro$er signatories of a
certi,cate of non forum0sho$$ing was in
res$onse to that issue% The ruing does not#
however# i$so facto cothe a cor$orate o<cer or
director with authorit( to e>ecute a certi,cate
of non0forum sho$$ing b( virtue of the formerIs
$osition aone%
An( doubt on the matter has been resoved b(
the CourtIs ruing in "P) /easing Cor$% v% Court
of A$$eas where this Court em$hasi'ed that
the aw(er acting for the cor$oration must be
s$eci,ca( authori'ed to sign $eadings for the
cor$oration% S$eci,c authori'ation# the Court
hed# coud on( come in the form of a board
resoution issued b( the "oard of &irectors that
s$eci,ca( authori'es the counse to institute
the $etition and e>ecute the certi,cation# to
ma!e his actions binding on his $rinci$a# i%e%#
the cor$oration%
This Court has not wavered in stressing the
need for strict adherence to $rocedura
requirements% The rues of $rocedure e>ist to
ensure the order( administration of 8ustice%
The( are not to be triKed with ight(%
2n the second issue
Petitioner $osits that it has entered into a
service agreement with intervenor +A.-H&%
The atter# in turn# maintains that $rivate
res$ondent 2abe is its em$o(ee and
subsequent( hods itsef out as the em$o(er
and o@ers the reinstatement of $rivate
res$ondent%
.otab(# $rivate res$ondentIs $ur$orted
em$o(ment with +A.-H& commenced on( in
455C# wa( after she was hired b( the $etitioner
as e>tra beverage attendant on A$ri 3A# 455E%
There is thus much credence in the $rivate
res$ondentIs caim that the service agreement
e>ecuted between the $etitioner and +A.-H&
is a mere $o( to circumvent the aw on
em$o(ment# in $articuar that which $ertains
on reguari'ation%
)n this regard# it has not esca$ed the notice of
the Court that the o$erations of the hote itsef
do not cease with the end of each event or
function and that there is an ever $resent need
for individuas to $erform certain tas!s
necessar( in the $etitionerIs business% Thus#
athough the tas!s themseves ma( var(# the
need for su<cient man$ower to carr( them out
does not% )n an( event# as borne out b( the
,ndings of the ./-C# the $etitioner determines
the nature of the tas!s to be $erformed b( the
$rivate res$ondent# in the $rocess e>ercising
contro%
This being so# the Court ,nds no di<cut( in
sustaining the ,nding of the ./-C that
+A.-H& is a abor0on( contractor%
Concordant(# the rea em$o(er of $rivate
res$ondent 2abe is the $etitioner%
)t a$$ears further that $rivate res$ondent has
aread( rendered more than one (ear of service
to the $etitioner# for the $eriod 455E04556# for
which she must aread( be considered a reguar
em$o(ee# $ursuant to Artice 36D of the /abor
CodeF
Art% 36D% -eguar and casua em$o(ment% The
$rovisions of written agreement to the contrar(
notwithstanding and regardess of the ora
agreement of the $arties# an em$o(ment sha
be deemed to be reguar where the em$o(ee
has been engaged to $erform activities which
are usua( necessar( or desirabe in the usua
business or trade of the em$o(er# e>ce$t
where the em$o(ment has been ,>ed for a
s$eci,c $ro8ect or underta!ing the com$etion
or termination of which has been determined at
the time of the engagement of the em$o(ee or
where the wor! or service to be $erformed is
seasona in nature and the em$o(ment is for
the duration of the season%
An em$o(ment sha be deemed to be casua if
it is not covered b( the $receding $aragra$hF
Provided# That an( em$o(ee who has rendered
at east one (ear of service# whether such
service is continuous or bro!en# sha be
considered a reguar em$o(ee with res$ect to
the activit( in which he is em$o(ed and his
em$o(ment sha continue whie such activit(
e>ists%
Petition denied%
COCA,COLA COTTLERS PHILS., INC. vs.
ALAN +. AGITO, #3 '/
GR No. )75!6, F#$%&'%( )", 200
FACTSF
Petitioner (Co!e) is a domestic
cor$oration engaged in manufacturing# botting
and distributing soft drin! beverages and other
aied $roducts% -es$ondents were saesmen
assigned at Co!e /agro Saes 2<ce for (ears
but were not reguari'ed% Co!e averred that
res$ondents were em$o(ees of )nterserve who
were tas!ed to $erform contracted services in
accordance with the $rovisions of the Contract
of Services e>ecuted between Co!e and
)nterserve on 33 +arch 3DD3% Said Contract
constituted egitimate 8ob contracting# given
that the atter was a bona ,de inde$endent
contractor with substantia ca$ita or
investment in the form of toos# equi$ment# and
machiner( necessar( in the conduct of its
business%
To $rove the status of )nterserve as an
inde$endent contractor# $etitioner $resented
the foowing $ieces of evidenceF (4) the
Artices of )ncor$oration of )nterserve? (3) the
Certi,cate of -egistration of )nterserve with the
"ureau of )nterna -evenue? (3) the )ncome Ta>
-eturn# with Audited Financia Statements# of
)nterserve for 3DD4? and (A) the Certi,cate of
-egistration of )nterserve as an inde$endent
8ob contractor# issued b( the &e$artment of
/abor and Hm$o(ment (&2/H)%
As a resut# $etitioner asserted that
res$ondents were em$o(ees of )nterserve#
since it was the atter which hired them# $aid
their wages# and su$ervised their wor!# as
AB
$roven b(F (4) res$ondentsI Persona &ata Fies
in the records of )nterserve? (3) res$ondentsI
Contract of Tem$orar( Hm$o(ment with
)nterserve? and (3) the $a(ro records of
)nterserve%
)SSUHSF
4% =hether or not )nteserve is a abor0
on( contractor?
3% =hether or not an em$o(er0
em$o(ee reationshi$ e>ists between
$etitioner Coca0Coa "otters Phis% )nc% and
res$ondents%
-U/).GF
At the outset# the Court cari,es that
athough )nterserve has an authori'ed ca$ita
stoc! amounting to P3#DDD#DDD%DD# on(
PC3E#DDD%DD thereof was $aid u$ as of 34
&ecember 3DD4% The Court does not set an
absoute ,gure for what it considers substantia
ca$ita for an inde$endent 8ob contractor# but it
measures the same against the t($e of wor!
which the contractor is obigated to $erform for
the $rinci$a% Jowever# this is rendered
im$ossibe in this case since the Contract
between $etitioner and )nterserve does not
even s$ecif( the wor! or the $ro8ect that needs
to be $erformed or com$eted b( the atterIs
em$o(ees# and uses the dubious $hrase Ltas!s
and activities that are considered contractibe
under e>isting aws and reguations%M Hven in
its $eadings# $etitioner carefu( sideste$s
identif(ing or describing the e>act nature of the
services that )nterserve was obigated to render
to $etitioner% The im$ortance of identif(ing with
$articuarit( the wor! or tas! which )nterserve
was su$$osed to accom$ish for $etitioner
becomes even more evident# considering that
the Artices of )ncor$oration of )nterserve states
that its $rimar( $ur$ose is to o$erate# conduct#
and maintain the business of 8anitoria and
aied services% "ut res$ondents were hired as
saesmen and eadman for $etitioner% The Court
cannot# under such ambiguous circumstances#
ma!e a reasonabe determination if )nterserve
had substantia ca$ita or investment to
underta!e the 8ob it was contracting with
$etitioner%
Q)nR :ino(a v% ./-C# we cari,ed that it
was not enough to show substantia
ca$itai'ation or investment in the form of
toos# equi$ment# machiner( and wor!
$remises# etc%# to be considered an
inde$endent contractor% )n fact# 8uris$rudentia
hodings were to the e@ect that in determining
the e>istence of an inde$endent contractor
reationshi$# severa factors ma( be considered#
such as# but not necessari( con,ned to#
whether the contractor was carr(ing on an
inde$endent business? the nature and e>tent of
the wor!? the s!i required? the term and
duration of the reationshi$? the right to assign
the $erformance of s$eci,ed $ieces of wor!?
the contro and su$ervision of the wor!ers? the
$ower of the em$o(er with res$ect to the
hiring# ,ring and $a(ment of the wor!ers of the
contractor? the contro of the $remises? the
dut( to su$$( $remises# toos# a$$iances#
materias and abor? and the mode# manner
and terms of $a(ment%
)n sum# )nterserve did not have
substantia ca$ita or investment in the form of
toos# equi$ment# machineries# and wor!
$remises? and res$ondents# its su$$osed
em$o(ees# $erformed wor! which was direct(
reated to the $rinci$a business of $etitioner% )t
is# thus# evident that )nterserve fas under the
de,nition of a Labor0on(M contractor# under
Artice 4DC of the /abor Code? as we as
Section E(i) of the -ues )m$ementing Artices
4DC04D5 of the /abor Code# as amended% )t is
aso a$$arent that )nterserve is a abor0on(
contractor under Section E(ii) of the -ues
)m$ementing Artices 4DC04D5 of the /abor
Code# as amended# since it did not e>ercise the
right to contro the $erformance of the wor! of
res$ondents%
The ac! of contro of )nterserve over the
res$ondents can be geaned from the Contract
of Services between )nterserve (as the
C2.T-ACT2-) and $etitioner (as the C/)H.T)%
The Contract of Services between )nterserve
and $etitioner did not identif( the wor! needed
to be $erformed and the ,na resut required to
be accom$ished% )nstead# the Contract
s$eci,ed the t($e of wor!ers )nterserve must
$rovide $etitioner (L-oute Je$ers# Saesmen#
&rivers# Cericas# Hncoders W P&M) and their
quai,cations (technicaGvocationa course
graduates# $h(sica( ,t# of good mora
character# and have not been convicted of an(
crime)% The Contract aso states that# Lto carr(
out the underta!ings s$eci,ed in the
immediate( $receding $aragra$h# the
C2.T-ACT2- sha em$o( the necessar(
$ersonne#M thus# ac!nowedging that
)nterserve did not (et have in its em$o( the
$ersonne needed b( $etitioner and woud sti
$ic! out such $ersonne based on the criteria
$rovided b( $etitioner% )n other words#
)nterserve did not obigate itsef to $erform an
identi,abe 8ob# wor!# or service for $etitioner#
but mere( bound itsef to $rovide the atter
with s$eci,c t($es of em$o(ees% These
contractua $rovisions strong( indicated that
)nterserve was mere( a recruiting and
man$ower agenc( $roviding $etitioner with
wor!ers $erforming tas!s direct( reated to the
atterIs $rinci$a business%
The certi,cation issued b( the &2/H
stating that )nterserve is an inde$endent 8ob
contractor does not swa( this Court to ta!e it at
face vaue# since the $rimar( $ur$ose stated in
the Artices of )ncor$oration of )nterserve is
miseading% According to its Artices of
)ncor$oration# the $rinci$a business of
)nterserve is to $rovide 8anitoria and aied
services% The deiver( and distribution of Coca0
Coa $roducts# the wor! for which res$ondents
were em$o(ed and assigned to $etitioner#
were in no wa( aied to 8anitoria services%
=hie the &2/H ma( have found that the
ca$ita andGor investments in toos and
equi$ment of )nterserve were su<cient for an
inde$endent contractor for 8anitoria services#
this does not mean that such ca$ita andGor
investments were i!ewise su<cient to
maintain an inde$endent contracting business
A6
for the deiver( and distribution of Coca0Coa
$roducts%
=ith the ,nding that )nterserve was
engaged in $rohibited abor0on( contracting#
$etitioner sha be deemed the true em$o(er
of res$ondents% As reguar em$o(ees of
$etitioner# res$ondents cannot be dismissed
e>ce$t for 8ust or authori'ed causes# none of
which were aeged or $roven to e>ist in this
case# the on( defense of $etitioner against the
charge of iega dismissa being that
res$ondents were not its em$o(ees% -ecords
aso faied to show that $etitioner a@orded
res$ondents the twin requirements of
$rocedura due $rocess# i%e%# notice and
hearing# $rior to their dismissa% -es$ondents
were not served notices informing them of the
$articuar acts for which their dismissa was
sought% .or were the( required to give their
side regarding the charges made against them%
Certain(# the res$ondentsI dismissa was not
carried out in accordance with aw and#
therefore# iega%
SOUTH DAVAO DEVELOP+ENT CO. VS. GA+O ET
AL.
G.R. No. )7)6)!, +'( 6, 200
FACTS*
South &avao &eveo$ment Com$an( (LS&&CM)
is the o$erator of a coconut and mango farm in
&avao 2rienta and &avao de Sur% )n 45C3#
S&&C hired Sergio Gamo (LGamoM) as a
foreman% Sometime in 456B# S&&C a$$ointed
Gamo as a co$ra ma!er contractor% Some of the
co$ra wor!ers of S&&C were ater transferred
b( S&&C to Gamo as his copraceros%
From 456B to 4555# Gamo and S&&C entered
into a $ro,t0sharing agreement wherein BDV of
the net $roceeds of the sae of co$ra went to
S&&C and 3DV to Gamo% )n this arrangement#
the co$ra wor!ers were $aid b( Gamo from his
3DV share% Subsequent(# S&&C wanted to
standardi'e $a(ments to its LcontractorsM in its
coconut farms% Jowever# S&&C and Gamo were
not abe to agree on a new $a(ment scheme%
&es$ite this# Gamo and his copraceros started
to do harvesting wor!% S&&C# u$on notice# tod
them to sto$% Hventua(# Gamo and S&&C
agreed that Gamo ma( continue with the
harvest $rovided that it woud be his ast
LcontractM with S&&C% Gamo suggested to
S&&C to oo! for a new LcontractorM since he
was not amenabe to the new $a(ment scheme
that it $ro$osed%
Since S&&C did not renew the LcontractM of
Gamo# the atter and his co$ra wor!ers aeged
that the( were iega( dismissed% The abor
arbiter dismissed the com$aint ruing that
there was no em$o(er0em$o(ee reationshi$
between S&&C and Gamo et al* The ./-C
shared the $osition with the abor arbiter and
rued that the nature of the 8ob of Gamo et al*
coud not resut in an em$o(er0em$o(ee
reationshi$% 2n the other hand# the Court of
A$$eas rued that an em$o(er0em$o(ee
reationshi$ e>isted%

SS&CIs aeges that the current business
$ractice
4
in the coconut industr( treats
copraceros as inde$endent contractors%
ISSUES*
(4) =hether or not the Court of A$$eas faied
to ta!e 8udicia notice of the acce$ted $ractice
of inde$endent contractors in the coconut
industr(%
(3) =hether or not Gamo is an inde$endent
contractor%
(3) =hether or not there is an em$o(er0
em$o(ee reationshi$ between S&&C and
Gamo et al*
HELD*
(4) .2% According to E/pertravel vs* C.#
3
matters of 8udicia notice have three materia
requisitesF (i) the matter must be one of
common and genera !nowedge? (ii) it must be
we and authoritative( setted and not
doubtfu or uncertain? and (iii) it must be !nown
to be within the imits of the 8urisdiction of the
court%
An invocation that the Court ta!e 8udicia notice
of certain facts shoud satisf( the requisites# a
mere $ra(er for its a$$ication sha not su<ce%
)n this case# the Court cannot ta!e 8udicia
notice of the aeged business $ractices in the
co$ra industr(% The record is bereft of an(
indication that the matter is of common
!nowedge to the $ubic and that it has the
characteristic of notoriet(%
(3) .2% )n Escario v* NLRC#
3
it was hed that to
estabish the e>istence of an inde$endent
contractor# the foowing conditions must e>istF
(i) the contractor carries on an inde$endent
business and underta!es the contract wor! on
his own account under his own res$onsibiit(
according to his own manner and method# free
from the contro and direction of his em$o(er
or $rinci$a in a matters connected with the
$erformance of the wor! e>ce$t to the resut
thereof? and (ii) the contractor has substantia
ca$ita or investments in the form of toos#
equi$ment# machineries# wor! $remises and
other materias which are necessar( in the
conduct of his business%
The )m$ementing -ues of the /abor Code
de,nes investment as toos# equi$ment#
im$ements# machineries and wor! $remises#
actua( and direct( used b( the contractor or
subcontractor in the $erformance or com$etion
of the 8ob# wor!# or service contracted out% The
investment must be su<cient to carr( out the
8ob at hand%
Gamo and the co$ra wor!ers did not e>ercise
inde$endent 8udgment in the $erformance of
their tas!s% The toos used b( Gamo and his
co$ra wor!ers i!e the 0arit# bolo# pan"bunot#
pan"lu"it and pan"tapo0 are not su<cient to
enabe them to com$ete the 8ob% -eiance on
these $rimitive toos is not enough% )n fact# the
accom$ishment of their tas! required more
e>$ensive machineries and equi$ment# i!e the
truc!s to hau the harvests and the dr(ing
faciit(# which S&&C owns%
4
3
3
A5
(3) NHS% )n order to determine the e>istence of
an em$o(er0em$o(ee reationshi$# the Court
has frequent( a$$ied the four0fod testF (i) the
seection and engagement of the em$o(ee? (ii)
the $a(ment of wages? (iii) the $ower of
dismissa? and (iv) the $ower to contro the
em$o(eeIs conduct# or the so caed Lcontro
test#M which is considered the most im$ortant
eement%
From the time the copraceros were hired b(
S&&C u$ to the time that the( were reassigned
to wor! under GamoIs su$ervision# their status
as S&&CIs em$o(ees did not cease% /i!ewise#
$a(ment of their wages was mere( coursed
through Gamo% As to the $ower of contro# it is
su<cient that the $ower to contro the manner
of doing the wor! e>ists# it does not require the
actua e>ercise of such $ower%
)n this case# S&&C was e>ercising its $ower of
contro when it transferred the co$ra wor!ers
from their $revious assignments to wor! as
GamoIs copraceros% )t was aso in the e>ercise
of the same $ower that S&&C $ut Gamo in
charge of the co$ra wor!ers athough under a
di@erent $a(ment scheme% Thus# it is cear that
an em$o(er0em$o(ee reationshi$ has e>isted
between S&&C and Gamo et al* since the
beginning and such reationshi$ did not cease
des$ite their reassignments and the change of
$a(ment scheme%
OLDARICO S. TRAVELO vs. COCONGON
CANANA GRO<ERS +ULTI,
PURPOSECOOPERATIVE
GR No. )6!205, S#53. ", 200

FACTSF
Petitioner 2darico TraveYo and his 4C co0
$etitioners wor!ed at a banana $antation at
"obongan Santo Tomas# &avao de .orte%
Sometime in 3DDD# the( ,ed three se$arate
com$aints for iega dismissa# individua( and
coective(# with the ./-C against said
res$ondents incuding res$ondent &oe Asia
Phii$$ines as it then su$$osed( owned TAC2-#
for un$aid saaries# overtime $a(# 43th month
$a(# service incentive eave $a(# damages# and
attorne(Is fees% &F) answered for itsef and
TAC2- denied that the( hired $etitioners? That
it had an arrangement with severa andowners
for them to e>tend ,nancia and technica
assistance to them for the deveo$ment of their
ands into a banana $antation on the condition
that the bananas $roduced therein woud be
sod e>cusive( to TAC2- and it was the
andowners who wor!ed on their own farms and
hired aborers to assist them and that the
andowners themseves decided to form a
coo$erative in order to better attain their
business ob8ectives? The Coo$erative faied to
,e a $osition $a$er des$ite due notice#
$rom$ting the /abor Arbiter to consider it to
have waived its right to adduce evidence in its
defense% .othing was heard from res$ondent
&oe Asia Phii$$ines%
/A"2- A-")TH-F
Coo$erative is guit( of iega dismissa based
on severa 2rders b( the &2/H in an earier
case decaring the Coo$erative as the em$o(er
of the 3A4 wor!ers in the farms of its severa
members% )t dro$$ed the com$aints against
&F)# TAC2- and &oe Asia Phii$$ines%
./-CF
Sustained the /abor ArbiterIs ruing that
the em$o(er of $etitioners is the Coo$erative%
)t $artia( granted $etitioners\ a$$ea#
however# b( ordering the Coo$erative to $a(
them their un$aid wages# wage di@erentias#
service incentive eave $a(# and 43th month
$a(% )t thus remanded the case to the /abor
Arbiter for com$utation of those awards%
CAF
&ismissed $etitionerIs $etition for
certiorari on the ground that the accom$an(ing
veri,cation and certi,cation against forum
sho$$ing was defective# it having been signed
b( on( 45 of the 33 therein named $etitioners%
)SSUHSF
(4)=2. the $etition shoud be
dismissed because of the non0signing of the
$etitioners?
JH/&F
.2% For the guidance of the bench and
bar# the Court restates in ca$sue form the
8uris$rudentia $ronouncements aread(
reKected in Atres v Hm$eo above res$ecting
non0com$iance with the requirements on# or
submission of defective# veri,cation and
certi,cation against forum sho$$ingF
4) A distinction must be made between
non0com$iance with the requirement on or
submission of defective veri,cation# and non0
com$iance with the requirement on or
submission of defective certi,cation against
forum sho$$ing%
3) As to veri,cation# non0com$iance
therewith or a defect therein does not
necessari( render the $eading fata(
defective% The court ma( order its submission
or correction or act on the $eading if the
attending circumstances are such that strict
com$iance with the -ue ma( be dis$ensed
with in order that the ends of 8ustice ma( be
served thereb(%
3) :eri,cation is deemed substantia(
com$ied with when one who has am$e
!nowedge to swear to the truth of the
aegations in the com$aint or $etition signs
the veri,cation# and when matters aeged in
the $etition have been made in good faith or
are true and correct%
A) As to certi,cation against forum
sho$$ing# non0com$iance therewith or a defect
therein# uni!e in veri,cation# is genera( not
curabe b( its subsequent submission or
correction thereof# uness there is a need to
rea> the -ue on the ground of 7substantia
com$iance7 or $resence of 7s$ecia
circumstances or com$eing reasons%7
E) The certi,cation against forum
sho$$ing must be signed b( a the $ainti@s or
$etitioners in a case? otherwise# those who did
not sign wi be dro$$ed as $arties to the case%
Under reasonabe or 8usti,abe circumstances#
however# as when a the $ainti@s or
$etitioners share a common interest and invo!e
a common cause of action or defense# the
signature of on( one of them in the
certi,cation against forum sho$$ing
substantia( com$ies with the -ue%
ED
C) Fina(# the certi,cation against forum
sho$$ing must be e>ecuted b( the $art(0
$eader# not b( his counse% )f# however# for
reasonabe or 8usti,abe reasons# the $art(0
$eader is unabe to sign# he must e>ecute a
S$ecia Power of Attorne( designating his
counse of record to sign on his behaf%
(Hm$hasis and underscoring su$$ied)The
foregoing restated $ronouncements were ost in
the chaenged -esoutions of the a$$eate
court% PetitionersI contention that the a$$eate
court shoud have dismissed the $etition on(
as to the non0signing $etitioners or mere(
dro$$ed them as $arties to the case is thus in
order% )nstead of remanding the case to the
a$$eate court# however# the Court deems it
more $ractica to decide the substantive issue
raised in this $etition so as not to further dea(
the dis$osition of this case%
)SSUHF
(3) won &F) and &P) shoud be hed
soidari( iabe with Coo$erative for $etitionerIs
iega dismissa and mone( caims%
JH/&F
.o the( are not soidari( iabe% Petition
is dismissed% There is no H-0HH reationshi$
between $etitioners and Coo$erativeIs co0
res$ondents% &F) did not farm out to the
Coo$erative the $erformance of a s$eci,c 8ob#
wor!# or service% )nstead# it entered into a
"anana Production and Purchase Agreement
(Contract) with the Coo$erative# under which
the Coo$erative woud hande and fund the
$roduction of bananas and o$eration of the
$antation covering ands owned b( its
members in consideration of &F)Is commitment
to $rovide ,nancia and technica assistance as
needed# incuding the su$$( of information and
equi$ment in growing# $ac!ing# and shi$$ing
bananas% The Coo$erative woud hire its own
wor!ers and $a( their wages and bene,ts# and
se e>cusive( to &F) a e>$ort quait(
bananas $roduced that meet the s$eci,cations
agreed u$on% To the Court# the Contract
between the Coo$erative and &F)# far from
being a 8ob contracting arrangement# is in
essence a business $artnershi$ that $arta!es of
the nature of a 8oint venture%

The rues on 8ob contracting are#
therefore# ina$$osite% Further# $etitioners\
caim of em$o(ment reationshi$ with the
Coo$erative\s herein co0res$ondents must be
assessed on the basis of four standards# vi'F (a)
the manner of their seection and engagement
(.o em$o(ment contract was? (b) the mode of
$a(ment of their wages? (c) the $resence or
absence of the $ower of dismissa? and (d) the
$resence or absence of contro over their
conduct% +ost determinative among these
factors is the so0caed 7contro test%7

There is nothing in the records which
indicates the $resence of an( of the foregoing
eements of an em$o(er0em$o(ee
reationshi$% =hie the Court commiserates
with $etitioners on their oss of em$o(ment#
es$ecia( now that the Coo$erative is no
onger a going concern since it has been
dissoved# it cannot sim$(# b( defaut# hod the
Coo$erativeIs co0res$ondents iabe for their
caims without an( factua and ega
8usti,cation therefor% The socia 8ustice $oic( of
abor aws and the Constitution is not meant to
be o$$ressive of ca$ita% Hn $assant# $etitioners
are not $recuded from $ursuing an( avaiabe
remedies against the former members of the
defunct Coo$erative as their individua
circumstances ma( warrant%
Lo1s.2 #3 '/., vs PLDT, GR No. )6525), O13.
2, 200
FactsF
2n .ovember 4# 455D# res$ondent
Phii$$ine /ong &istance Tee$hone Com$an(
(P/&T) and the Securit( and Safet( Cor$oration
of the Phii$$ines (SSCP) entered into a Securit(
Services Agreement (Agreement) whereb(
SSCP woud $rovide armed securit( guards to
P/&T to be assigned to its various o<ces%
Pursuant to such agreement# $etitioners -au
/ocsin and Hddie Tomaquin# among other
securit( guards# were $osted at a P/&T o<ce%
2n August 3D# 3DD4# res$ondent issued
a /etter dated August 3D# 3DD4 terminating the
Agreement e@ective 2ctober 4# 3DD4% &es$ite
the termination of the Agreement# however#
$etitioners continued to secure the $remises of
their assigned o<ce% The( were aeged(
directed to remain at their $ost b(
re$resentatives of res$ondent% )n su$$ort of
their contention# $etitioners $rovided the /abor
Arbiter with co$ies of $etitioner /ocsinIs $a(
si$s for the $eriod of *anuar( to Se$tember
3DD3%
Then# on Se$tember 3D# 3DD3#
$etitionersI services were terminated% Thus#
$etitioners ,ed a com$aint before the /abor
Arbiter for iega dismissa and recover( of
mone( caims such as overtime $a(# hoida(
$a(# $remium $a( for hoida( and rest da(#
service incentive eave $a(# Hmergenc( Cost of
/iving Aowance# and mora and e>em$ar(
damages against P/&T%
The /abor Arbiter rendered a &ecision
,nding P/&T iabe for iega dismissa% )t was
e>$ained in the &ecision that $etitioners were
found to be em$o(ees of P/&T and not of
SSCP% Such concusion was arrived at with the
factua ,nding that $etitioners continued to
serve as guards of P/&TIs o<ces% As such
em$o(ees# $etitioners were entited to
substantive and $rocedura due $rocess before
termination of em$o(ment%
)ssueF
)s there em$o(er0em$o(ee
reationshi$;
-uingF
Nes% From the foregoing circumstances#
reason dictates that we concude that
$etitioners remained at their $ost under the
instructions of res$ondent% =e can further
concude that res$ondent dictated u$on
$etitioners that the atter $erform their reguar
duties to secure the $remises during o$erating
hours% This# to our mind and under the
circumstances# is su<cient to estabish the
e>istence of an em$o(er0em$o(ee
reationshi$%
E4
To reiterate# whie res$ondent and SSCP
no onger had an( ega reationshi$ with the
termination of the Agreement# $etitioners
remained at their $ost securing the $remises of
res$ondent whie receiving their saaries#
aeged( from SSCP% Cear(# such a situation
ma!es no sense# and the denias $ro@ered b(
res$ondent do not shed an( ight to the
situation% )t is but reasonabe to concude that#
with the behest and# $resumab(# directive of
res$ondent# $etitioners continued with their
services% Hvident(# such are indicia of contro
that res$ondent e>ercised over $etitioners%
Hvident(# res$ondent having the $ower
of contro over $etitioners must be considered
as $etitionersI em$o(erUUfrom the termination
of the Agreement onwardsUUas this was the
on( time that an( evidence of contro was
e>hibited b( res$ondent over $etitioners and in
ight of our ruing in Abea% Thus# as a$t(
decared b( the ./-C# $etitioners were entited
to the rights and bene,ts of em$o(ees of
res$ondent# incuding due $rocess
requirements in the termination of their
services%
"oth the /abor Arbiter and ./-C found
that res$ondent did not observe such due
$rocess requirements% Javing faied to do so#
res$ondent is guit( of iega dismissa%
Jo#$ A/.v.'0o, #3 '/. vs. P%o13#% 7 G'-$/#
P4./.55.2#s, I21., #3 '/.
G.R. No. )60506, +'%14 , 20)0
FactsF
Petitioners wor!ed as merchandisers of
PWG% The( a individua( signed em$o(ment
contracts with either Promm0Gem or SAPS for
$eriods of more or ess ,ve months at a
time%The( were assigned at di@erent outets#
su$ermar!ets and stores where the( handed
a the $roducts of PWG% The( received their
wages from Promm0Gem or SAPS%
Subsequent(# $etitioners ,ed a
com$aintagainst PWG for reguari'ation#
service incentive eave $a( and other bene,ts
with damages% The com$aint was ater
amendedto incude the matter of their
subsequent dismissa%
The /abor Arbiter dismissed the
com$aint for ac! of merit and rued that there
was no em$o(er0em$o(ee reationshi$
between $etitioners and PWG% Je found that
the seection and engagement of the
$etitioners# the $a(ment of their wages# the
$ower of dismissa and contro with res$ect to
the means and methods b( which their wor!
was accom$ished# were a done and e>ercised
b( Promm0GemGSAPS% Je further found that
Promm0Gem and SAPS were egitimate
inde$endent 8ob contractors% 2n a$$ea to the
./-C# the .-C a<rmed the decision of the
abor arbiter% Petitioners then ,ed a $etition for
certiorari with the CA# aeging grave abuse of
discretion amounting to ac! or e>cess of
8urisdiction on the $art of the /abor Arbiter and
the ./-C% Jowever# said $etition was aso
denied b( the CA%
)ssuesF
4%) )s PWG the em$o(er of $etitioners;
3%) =ere $etitioners iega( dismissed;
-uingF
Ouaif(% )n order to determine whether
PWG is the em$o(er of $etitioners# it is
necessar( to ,rst determine whether Promm0
Gem and SAPS are abor0on( contractors or
egitimate 8ob contractors% There is 7abor0on(7
contracting where the $erson su$$(ing
wor!ers to an em$o(er does not have
substantia ca$ita or investment in the form of
toos# equi$ment# machineries# wor! $remises#
among others# and the wor!ers recruited and
$aced b( such $erson are $erforming activities
which are direct( reated to the $rinci$a
business of such em$o(er% )n such cases# the
$erson or intermediar( sha be considered
mere( as an agent of the em$o(er who sha
be res$onsibe to the wor!ers in the same
manner and e>tent as if the atter were direct(
em$o(ed b( him%
The Court hed that Promm0Gem cannot
be regarded as abor0on( contractor but a
egitimate inde$endent contractor because the
,nancia statement of Promm0Gem shows that
it has authori'ed ca$ita stoc! of P4 miion and
a $aid0in ca$ita# or ca$ita avaiabe for
o$erations# of PEDD#DDD%DD as of 455D% )t aso
has ong term assets worth PA33# 65E%36 and
current assets of PB45# DA3%33% Promm0Gem
has aso $roven that it maintained its own
warehouse and o<ce s$ace with a Koor area of
6BD square meters% )t aso had under its name
three registered vehices which were used for
its $romotionaGmerchandising business%
Promm0Gem aso has other cients aside from
PWG%
2n the other hand# the Artices of
)ncor$oration of SAPS shows that it has a $aid0
in ca$ita of on( P34# 3ED%DD% There is no other
evidence $resented to show how much its
wor!ing ca$ita and assets are% Furthermore#
there is no showing of substantia investment in
toos# equi$ment or other assets% Considering
that SAPS has no substantia ca$ita or
investment and the wor!ers it recruited are
$erforming activities which are direct( reated
to the $rinci$a business of PWG# the court hed
that SAPS is engaged in 7abor0on(
contracting7% The contractor is considered
mere( an agent of the $rinci$a em$o(er and
the atter is res$onsibe to the em$o(ees of the
abor0on( contractor as if such em$o(ees had
been direct( em$o(ed b( the $rinci$a
em$o(er%
=ith regard to the termination etters
given b( Promm0Gem to its em$o(ees
uniform( s$eci,ed the cause of dismissa as
grave misconduct and breach of trust% The
court hed that there were no vaid causes for
the dismissa of $etitioners0em$o(ees of
Promm0Gem%
+isconduct to be vaid 8ust cause for
dismissa# such misconduct (a) must be serious?
(b) must reate to the $erformance of the
em$o(eeIs duties? and (c) must show that the
em$o(ee has become un,t to continue
wor!ing for the em$o(er% )n the case#
$etitioners0em$o(ees of Promm0Gem ma(
have committed an error of 8udgment in
caiming to be em$o(ees of PWG# but it cannot
be said that the( were motivated b( an(
wrongfu intent in doing so% As such# the( are
guit( of on( sim$e misconduct for assaiing
the integrit( of Promm0Gem as a egitimate and
inde$endent $romotion ,rm% A misconduct
E3
which is not serious or grave# as that e>isting in
the instant case# cannot be a vaid basis for
dismissing an em$o(ee%
+eanwhie# oss of trust and con,dence#
as a ground for dismissa# must be based on
the wifu breach of the trust re$osed in the
em$o(ee b( his em$o(er% 2rdinar( breach wi
not su<ce% /oss of trust and con,dence# as a
cause for termination of em$o(ment# is
$remised on the fact that the em$o(ee
concerned hods a $osition of res$onsibiit( or
of trust and con,dence% And# in order to
constitute a 8ust cause for dismissa# the act
com$ained of must be wor!0reated and must
show that the em$o(ee is un,t to continue to
wor! for the em$o(er% )n the case at bar# )n the
instant case# the $etitioners0em$o(ees of
Promm0Gem have not been shown to be
occu$(ing $ositions of res$onsibiit( or of trust
and con,dence% .either is there an( evidence
to show that the( are un,t to continue to wor!
as merchandisers for Promm0Gem% Jence# no
vaid cause for dismissa b( Promm0Gem
against $etitioner0em$o(ees%
=ith regard to the $etitioners $aced
with PWG b( SAPS# the( were given no written
notice of dismissa% The records show that u$on
recei$t b( SAPS of PWGIs etter terminating
their 7+erchandising Services Contact7# the( in
turn verba( informed the concerned
$etitioners not to re$ort for wor! an(more% )t
must be em$hasi'ed that the onus $robandi to
$rove the awfuness of the dismissa rests with
the em$o(er% )n termination cases# the burden
of $roof rests u$on the em$o(er to show that
the dismissa is for 8ust and vaid cause% )n the
instant case# PWG faied to discharge the
burden of $roving the egait( and vaidit( of
the dismissas of those $etitioners who are
considered its em$o(ees% Jence# the
dismissas necessari( were not 8usti,ed and
are therefore iega%
S'2 +.9&#/ Co%5. vs S#-.//'2o #3 '/., GR
No. )6!257, J&/( 5, 20)0
M Test to &etermine )nde$endent
Contractorshi$
Petitioner cannot re( either on A+PC2Is
Certi,cate of -egistration as an )nde$endent
Contractor issued b( the $ro$er -egiona 2<ce
of the &2/H to $rove its caim% )t is not
concusive evidence of such status% The fact of
registration sim$( $revents the ega
$resum$tion of being a mere abor0on(
contractor from arising% )n distinguishing
between $ermissibe 8ob contracting and
$rohibited abor0on( contracting# the totait( of
the facts and the surrounding circumstances of
the case are to be considered%
] Soidar( /iabiit(
Thus# $etitioner S+C# as $rinci$a em$o(er# is
soidari( iabe with A+PC2# the abor0on(
contractor# for a the rightfu caims of
res$ondent% Under this set0u$# A+PC2# as the
Labor0on(M contractor# is deemed an agent of
the $rinci$a (S+C)% The aw ma!es the
$rinci$a res$onsibe over the em$o(ees of the
Labor0on(M contractor as if the $rinci$a itsef
direct( hired the em$o(ees%
+'2./' <'3#% Co. vs D'/&-5.2#s,
GR No. )7550), O13. !, 20)0
)t shoud be remembered that the contro test
mere( cas for the e>istence of the right to
contro# and not necessari( the e>ercise
thereof% )t is not essentia that the em$o(er
actua( su$ervises the $erformance of duties
of the em$o(ee% )t is enough that the former
has a right to wied the $ower%
The $rimar( standard of determining reguar
em$o(ment is the reasonabe connection
between the $articuar activit( $erformed b(
the em$o(ee in reation to the usua business
or trade of the em$o(er% )n this case# the
connection is obvious when we consider the
nature of the wor! $erformed and its reation to
the scheme of the $articuar business or trade
in its entiret(% Fina(# the re$eated and
continuing need for the $erformance of the 8ob
is su<cient evidence of the necessit(# if not
indis$ensabiit( of the activit( to the business%
2-
Hm$o(er0em$o(ee reationshi$? test% The
eements to determine the e>istence of an
em$o(ment reationshi$ areF (a) the seection
and engagement of the em$o(ee? (b) the
$a(ment of wages? (c) the $ower of dismissa?
and (d) the em$o(erIs $ower to contro the
em$o(eeIs conduct% The most im$ortant of
these eements is the em$o(erIs contro of the
em$o(eeIs conduct# not on( as to the resut of
the wor! to be done# but aso as to the means
and methods to accom$ish it% )t shoud be
remembered that the contro test mere( cas
for the e>istence of the right to contro# and not
necessari( the e>ercise thereof% "ased on this
four0fod test# +ania =ater emerges as the
em$o(er of res$ondent coectors% -es$ondent
bi coectors were individua( hired b( the
contractor# but were under the direct contro
and su$ervision of +ania =ater% This contro is
manifested in the fact that res$ondent bi
coectors re$orted dai( to the branch o<ces of
+ania =ater to remit their coections with the
s$eci,ed month( targets and com$( with the
coection re$orting $rocedures $rescribed b(
the atter% According(# res$ondent bi
coectors are em$o(ees of $etitioner +ania
=ater%
*ob contracting? conditions% *ob contracting is
$ermissibe on( if the foowing conditions are
metF 4) the contractor carries on an
inde$endent business and underta!es the
contract wor! on his own account under his
own res$onsibiit( according to his own manner
and method# free from the contro and direction
of his em$o(er or $rinci$a in a matters
connected with the $erformance of the wor!
e>ce$t as to the resuts thereof? and 3) the
contractor has substantia ca$ita or investment
in the form of toos# equi$ment# machineries#
wor! $remises# and other materias which are
necessar( in the conduct of the business%
LSubstantia ca$ita or investmentM refers to
ca$ita stoc!s and subscribed ca$itai'ation in
the case of cor$orations# toos# equi$ment#
im$ements# machineries# and wor! $remises#
actua( and direct( used b( the contractor or
subcontractor in the $erformance or com$etion
of the 8ob# wor!# or service contracted out% The
Lright to controM refers to the right reserved to
the $erson for whom the services of the
contractua wor!ers are $erformed# to
determine not on( the end to be achieved# but
E3
aso the manner and means to be used in
reaching that end%
T#29 vs P'4'9'1, GR No. )670!,
Nov#-$#% )7, 20)0
)ega &ismissa
The res$ondent wor!erIs aegation that Teng
summari( dismissed them on sus$icion that
the( were not re$orting to him the correct
voume of the ,sh caught in each ,shing
vo(age was never denied b( Teng%
Unsubstantiated sus$icion is not a 8ust cause to
terminate oneIs em$o(ment under Artice 363
of the /abor Code% To aow an em$o(er to
dismiss an em$o(ee based on mere
aegations and generaities woud $ace the
em$o(ee at the merc( of his em$o(er# and
woud emascuate the right to securit( of
tenure% For his faiure to com$( with the /abor
CodeIs substantive requirement on termination
of em$o(ment# we decare that Teng iega(
dismissed the res$ondent wor!ers%
)n the $resent case# the maestros did not have
an( substantia ca$ita or investment% Teng
admitted that he soe( $rovided the ca$ita
and equi$ment# whie the maestros su$$ied
the wor!ers% The $ower of contro over the
res$ondent wor!ers was odged not with the
maestros but with Teng% As chec!ers# the
res$ondent wor!ersI main tas!s were to count
and cassif( the ,sh caught and re$ort them to
Teng% The( $erformed tas!s that were
necessar( and desirabe in TengIs ,shing
business% Ta!en together# these incidents
con,rm the e>istence of a abor0on(
contracting which is $rohibited in our
8urisdiction# as it is considered to be the
em$o(erIs attem$t to evade obigations
a@orded b( aw to em$o(ees%
2-
Hm$o(er0em$o(ee reationshi$% Genera(# in
a business estabishment# )&s are issued to
identif( the hoder as a bona ,de em$o(ee of
the issuing entit(% =hie $etitioner Teng aeged
that it was the maestros who hired the
res$ondent wor!ers# it was his com$an( that
issued to the res$ondent wor!ers )&s bearing
their names as em$o(ees and TengIs signature
as the em$o(er% For the 43 (ears that the
res$ondent wor!ers wor!ed for Teng# the(
received wages on a reguar basis# in addition
to their shares in the ,sh caught% +ore
im$ortant(# the eement of contro U which we
have rued in a number of cases to be a strong
indicator of the e>istence of an em$o(er0
em$o(ee reationshi$ U is $resent in this case%
Teng not on( owned the toos and equi$ment#
he directed how the res$ondent wor!ers were
to $erform their 8ob as chec!ers%
)ega dismissa? ac! of substantive due
$rocess% The dismissa of an em$o(ee# which
the em$o(er must vaidate# has a two0fod
requirementF one is substantive# the other is
$rocedura% .ot on( must the dismissa be for a
8ust or an authori'ed cause# as $rovided b( aw?
the rudimentar( requirements of due $rocess U
the o$$ortunit( to be heard and to defend
onesef U must be observed as we% The
em$o(er has the burden of $roving that the
dismissa was for a 8ust cause? faiure to show
this# as in the $resent case# woud necessari(
mean that the dismissa was un8usti,ed and#
therefore# iega% The res$ondent wor!erIs
aegation that Teng summari( dismissed them
on sus$icion that the( were not re$orting to
him the correct voume of the ,sh caught in
each ,shing vo(age was never denied b( Teng%
Unsubstantiated sus$icion is not a 8ust cause to
terminate oneIs em$o(ment under Artice 363
of the /abor Code%
/abor0on( contracting% Section E of the &2 .o%
460D3# which im$ements Artice 4DC of the
/abor Code# $rovides that# M^ abor0on(
contracting sha refer to an arrangement
where the contractor or subcontractor mere(
recruits# su$$ies or $aces wor!ers to $erform
a 8ob# wor! or service for a $rinci$a# and an( of
the foowing eements are $resentF (i)The
contractor or subcontractor does not have
substantia ca$ita or investment which reates
to the 8ob# wor! or service to be $erformed and
the em$o(ees recruited# su$$ied or $aced b(
such contractor or subcontractor are
$erforming activities which are direct( reated
to the main business of the $rinci$a? or (ii)The
contractor does not e>ercise the right to contro
over the $erformance of the wor! of the
contractua em$o(ee% )n the $resent case#
Teng admitted that he soe( $rovided the
ca$ita and equi$ment# whie the maestros
su$$ied the wor!ers% Aso# the $ower of contro
over the res$ondent wor!ers was odged not
with the maestros but with Teng% +oreover#
the( $erformed tas!s that were necessar( and
desirabe in TengIs ,shing business% Ta!en
together# these incidents con,rm the e>istence
of a abor0on( contracting which is $rohibited
in our 8urisdiction% According(# a ,nding that
the maestros are abor0on( contractors is
equivaent to a ,nding that an em$o(er0
em$o(ee reationshi$ e>ists between Teng and
the res$ondent wor!ers%
+otion for reconsideration% As amended# Artice
3C3 is now Artice 3C30A in which the word
Luna$$eaabeM from Artice 3C3 has been
deeted% Thus# athough Art% 3C30A ma!es the
vountar( arbitration award ,na and e>ecutor(
after ten caendar da(s from recei$t of the co$(
of the award or decision b( the $arties# the
decision ma( sti be reconsidered b( the
:ountar( Arbitrator on the basis of a motion for
reconsideration du( ,ed during that $eriod%
The absence of a categorica anguage in
Artice 3C30A does not $recude the ,ing of a
motion for reconsideration of the :AIs decision
within the 4D0da( $eriod% Therefore# $etitionersI
aegation that the :AIs decision had become
,na and e>ecutor( b( the time the res$ondent
wor!ers ,ed an a$$ea with the CA fais% )t is
consequent( rued that the res$ondent
wor!ers seasonab( ,ed a motion for
reconsideration of the :AIs 8udgment# and the
:A erred in den(ing the motion%
GSIS vs NLRC #3 '/., GR No. )600!5,
Nov#-$#% )7, 20)0
)n an( case# even if the a$$ea was ,ed one
da( ate# the same shoud have been
entertained b( the ./-C% )ndeed# the a$$ea
must be $erfected within the statutor( or
regementar( $eriod% This is not on(
mandator(# but aso 8urisdictiona% Faiure to
$erfect the a$$ea on time renders the assaied
EA
decision ,na and e>ecutor( and de$rives the
a$$eate court or bod( of the ega authorit( to
ater the ,na 8udgment# much ess entertain
the a$$ea% Jowever# this Court has# time and
again# rued that# in e>ce$tiona cases# a
beated a$$ea ma( be given due course if
greater in8ustice wi be visited u$on the $art(
shoud the a$$ea be denied% The Court has
aowed this e>traordinar( measure even at the
e>$ense of sacri,cing order and e<cienc( if
on( to serve the greater $rinci$es of
substantia 8ustice and equit(%
Thus# the date of ,ing is determinabe from
two sourcesF from the $ost o<ce stam$ on the
enveo$e or from the registr( recei$t# either of
which ma( su<ce to $rove the timeiness of the
,ing of the $eadings% )f the date stam$ed on
one is earier than the other# the former ma( be
acce$ted as the date of ,ing% This
$resu$$oses# however# that the enveo$e or
registr( recei$t and the dates a$$earing
thereon are du( authenticated before the
tribuna where the( are $resented%
] /iabiit( of GS)S as )ndirect Hm$o(er
/ast(# we do not agree with $etitioner that the
enforcement of the decision is im$ossibe
because its charter unequivoca( e>em$ts it
from e>ecution% As hed in Government Service
)nsurance S(stem v% -egiona Tria Court of
Pasig Cit(# "ranch B4# citing -ubia v% GS)SF
The $rocessua e>em$tion of the GS)S funds
and $ro$erties under Section 35 of the GS)S
Charter# in our view# shoud be read
consistent( with its avowed $rinci$a $ur$oseF
to maintain actuaria sovenc( of the GS)S in
the $rotection of assets which are to be used to
,nance the retirement# disabiit( and ife
insurance bene,ts of its members% Cear(# the
e>em$tion shoud be imited to the $ur$oses
and ob8ects covered% An( inter$retation that
woud give it an e>$ansive construction to
e>em$t a GS)S assets from ega $rocesses
absoute( woud be unwarranted%
Furthermore# the decared $oic( of the State in
Section 35 of the GS)S Charter granting GS)S an
e>em$tion from ta># ien# attachment# ev(#
e>ecution# and other ega $rocesses shoud be
read together with the grant of $ower to the
GS)S to invest its Le>cess fundsM under Section
3C of the same Act% Under Section 3C# the GS)S
is granted the anciar( $ower to invest in
business and other ventures for the bene,t of
the em$o(ees# b( using its e>cess funds for
investment $ur$oses% )n the e>ercise of such
function and $ower# the GS)S is aowed to
assume a character simiar to a $rivate
cor$oration% Thus# it ma( sue and be sued# as
aso# e>$icit( granted b( its charter > > >%
To be sure# $etitionerIs charter shoud not be
used to evade its iabiities to its em$o(ees#
even to its indirect em$o(ees# as mandated b(
the /abor Code%
] /iabiit( of )ndirect Hm$o(er
PetitionerIs iabiit( covers the $a(ment of
res$ondentsI saar( di@erentia and 43th month
$a( during the time the( wor!ed for $etitioner%
)n addition# $etitioner is soidari( iabe with
&./ Securit( for res$ondentsI un$aid wages
from Februar( 4553 unti A$ri 3D# 4553% =hie
it is true that res$ondents continued wor!ing
for $etitioner after the e>$iration of their
contract# based on the instruction of &./
Securit(# $etitioner did not ob8ect to such
assignment and aowed res$ondents to render
service% Thus# $etitioner im$ied( a$$roved the
e>tension of res$ondentsI services%
According(# $etitioner is bound b( the
$rovisions of the /abor Code on indirect
em$o(ment% Petitioner cannot be aowed to
den( its obigation to res$ondents after it had
bene,ted from their services% So ong as the
wor!# tas!# 8ob# or $ro8ect has been $erformed
for $etitionerIs bene,t or on its behaf# the
iabiit( accrues for such services% The $rinci$a
is made iabe to its indirect em$o(ees
because# after a# it can $rotect itsef from
irres$onsibe contractors b( withhoding
$a(ment of such sums that are due the
em$o(ees and b( $a(ing the em$o(ees
direct(# or b( requiring a bond from the
contractor or subcontractor for this $ur$ose%
PetitionerIs iabiit(# however# cannot e>tend to
the $a(ment of se$aration $a(% An order to $a(
se$aration $a( is invested with a $unitive
character# such that an indirect em$o(er
shoud not be made iabe without a ,nding
that it had cons$ired in the iega dismissa of
the em$o(ees%
C. <ORKER=S PREFERENCE
DEVELOP+ENT CANK OF THE PHILIPPINES
vs. NLRC
G.R. No. )060") +'%14 ), )5
FACTS*
- /eonor Ang is the Personne 2<cer of
Tro$ica Phii$$ines =ood )ndustries )nc# a
cor$oration engaged in the manufacture of and
sae of veneer# $(wood and sawdust $ane
board%
- &"P as mortgagee of TP=)) forecosed
its $ant faciities and equi$ment thus forcing
the atter to cease its o$eration% As a
consequence Ang was terminated b( her
service%
- Ang seasona( ,ed a $etition before
the /abor Arbiter a com$aint for se$aration
$ar# 43
th
month $a(# vacation and sic! eave
$a(# saaries and aowances against TP=)) and
herein $etitioner%
- The /abor Arbiter# as ater a<rmed b(
the ./-C# hed herein $etitioner &"P subsidiar(
iabe with TP=)) rationai'ing that the right of
an em$o(ee to be $aid bene,ts due him from
the $ro$erties of his em$o(er is su$erior to the
right of &"Ps mortgage%
ISSUE* )s decaration of ban!ru$tc( or
8udicia iquidation required before the wor!erIs
$reference ma( be invo!ed under Art 44D of
the /abor Code;
HELD*
4) Artice 44D shoud be a$$ied in
con8unction with the $ertinent $rovisions of the
Civi Code and the )nsovenc( /aw to the e>tent
that the $iece0mea distribution of the assets of
the debtor is avoided%
EE
3) A decaration of ban!ru$tc( if a 8udicia
iquidation must be $resent before the wor!erIs
$reference ma( be enforced%
3) To hod that Art 44D to be a$$icabe
aso to e>tra08udicia $roceeding woud be
$utting the wor!er in a better $osition than the
State which coud on( assert its own $rior
$reference in case of a 8udicia $roceeding%
A) )n the event of ban!ru$tc( if iquidation
of an em$o(erIs business# his wor!ers sha
en8o( ,rst $reference as regards their un$aid
wages and other monetar( caims# an(
$rovision of aw to the contrar(
notwithstanding% Such un$aid wages and
monetar( caims sha be $aid in fu before the
caims of the Government and other creditors
ma( be $aid%
E) 2rigina $osition that the right to
$reference given to wor!ers under Art44D
cannot e>ist an( e@ective wa( $rior to the time
of its $resentation in distribution is sti given
great weight%
STRONG DISSENT PENNED CY JUSTICE
PADILLA*
4) The ma8orit( reads into the aforesaid
aw and im$ementing rue a OUA/)F)CAT)2.
TJAT )S .2T TJH-H% .o where is it stated in the
P-HSH.T aw and its .H= im$ementing rue
that a $rior decaration of ban!ru$tc( or 8udicia
iquidation is sine qua non to the o$eration of
Artice 44D% )n fact such requirement has been
deeted in the new im$ementing rue%
3) The $resent aw is unconditiona and
unquai,ed grant of $riorit( to wor!ers
monetar( caims as against a the assets of an
em$o(er inca$abe of fu( $a(ing his
obigation%
CATONG CUHAY GOLD +INES, INC., vs%
DELA SERNA
G.R. No. 666" A&9&s3 6, )
FACTS* )n a abor case# the em$o(ees
were awarded to receive un$aid wages and
bene,ts from "atong "uha( God +ines# )nc#
their em$o(er% =hen the $etitioners moved
for the e>ecution of the 8udgment# the -egiona
&irector as! res$ondent to $ost a bond% =hen
he faied to do so# Sheri@ $roceeded against his
$ro$erties and sod them at $ubic auction%
These $ro$erties have been transferred and
entrusted to the Asset Privati'ation Trust (APT)
b( virtue of Procamation .o% ED% and a the
said assets of ""G+) are covered b( rea and
chatte mortgages e>ecuted in favor of the
some ban!s% Hventua( "atong "uha( $osed a
su$ersedeas bond and a$$eaing to the
Secretar( of /abor# the auction saes were
decared nu and void because the $ro$erties
were e>em$ted from e>ecution% +otions for
)ntervention were ,ed b( +FT Cor$oration and
Sater Jodings# whose tite were traced from
the highest bidder in the auction sae% Private
res$ondents contend that even if sub8ect
$ro$erties were mortgaged to &"P the aw
grants $reference to mone( caims of wor!ers
over and above a credits of the $etitioner%
ISSUE* =hether the auction saes were
vaid with reference to Art 44D of the /abor
Code# des$ite mortgage over the $ro$erties;
HELD* The auction saes were not vaid%
Su$reme Court hed that the wor!ers
$reference regarding wages and other
monetar( caims under Artice 44D of the /abor
Code# as amended# contem$ates ban!ru$tc(
or iquidation $roceedings of the em$o(er1s
business% =hat is more# it does not disregard
the $referentia ien of mortgagees considered
as $referred credits under the $rovisions of the
.ew Civi Code on the cassi,cation#
concurrence and $reference of credits%
A$&20.o C'%'(o9' vs. Ass#3 P%.v'3.E'3.o2
T%&s3
G.R. No. )6007" O13o$#% 2!, 2005
FACTS* 2n &ecember 6# 456D#
-es$ondent Asset Privati'ation Trust (APT) was
created under Procamation .o% ED and was
mandated to ta!e tite# $ossession of# conserve#
manage and dis$ose of non0$erforming assets
of the Phii$$ine government identi,ed for
$rivati'ation and dis$osition% Pres% Aquino
issued Administrative 2rder .o% 4A identif(ing
certain assets of the government institutions to
be transferred to the nationa government%
Among these assets was the ,nancia caim of
P." against "icoandia Sugar &eveo$ment
Cor$% (")SU&HC2)# a $antation mi% This caim
was in the form of a secured oan% So b( virtue
of a Trust Agreement between the nationa
government and APT dated Februar( 3B# 456B#
the atter became trustee over ")SU&HC2Is
account with P."%
"ecause of the continued faiure of
")SU&HC2 to $a( its oans with P."# its
mortgaged $ro$erties were forecosed and sod
at $ubic auction where APT was the soe
bidder%
+eanwhie# ")SU&HC2 contracted the
services of Phii$$ine Sugar Cor$% (Phisucor) to
ta!e over the management of the sugar
$antation and miing o$erations unti August
34# 4553% 2n 2ctober 3D# 4553# "ico0Agro0
)ndustria Coo$erative ("APC)) $urchased
")SU&HC2Is forecosed assets from APT and
too! over o$erations under the name
Penafrancia Sugar +i (Pensumi)%
2n +arch 3# 4553# the union ,ed an
amended com$aint im$eading Phisucor# APT#
and Pensumi for unfair abor $ractices# iega
dismissa# iega deduction and under$a(ment
of wages and other abor standard bene,ts $us
damages% ")SU&HC2# Pensumi# and APTIs
defense was ac! of em$o(er0em$o(ee
reationshi$%
/abor Arbiter and ./-C a<rmed APTIs
iabiit( for the mone( caims stating that even
when there was no em$o(er0em$o(ee
reationshi$# the assets of ")SU&HC2 had been
transferred to the nationa government through
APT# and APT shoud have treated the union
membersI caims as a ien on the assets of
")SU&HC2%
CA rued that APT shoud not be hed
iabe for the caims since APT was not the
em$o(er of the $etitioners but was im$eaded
on( for $ossessing ")SU&HC2Is forecosed
$ro$erties%
ISSUE* =hether or not res$ondent APT is
iabe for $etitionerIs mone( caims%
EC
HELD* .o# APT is not iabe% The duties and
iabiities of ")SU&HC2# incuding its monetar(
iabiities to its em$o(ees were not
automatica( assumed b( APT as $urchaser of
the forecosed $ro$erties% An( assum$tion of
iabiit( must be s$eci,ca( and categorica(
agreed u$on% )n Sundowner &eveo$ment
Cor$% vs% &rion# the Court rued that uness
e>$ress( assumed# abor contracts i!e
coective bargaining agreements are not
enforceabe against the transferee of an
enter$rise% /abor contract are in $ersonam and
thus binding on( between the $arties% .o
succession of em$o(ment rights and
obigations have ta!en $ace% There is no
$rivit( of contract between ")SU&HC2Is
em$o(ees and APT ma!ing the atter a
substitute em$o(er%
The iabiit( of the $revious owner to its
em$o(ees are not enforceabe against the
bu(er or transferee uness (4) the atter
unequivoca( assumes them? or (3) the sae or
transfer was made in bad faith%
Furthermore# under Art 33A4 and 33A3
of the Civi Code# a mortgage credit is a s$ecia
$referred credit that en8o(s $reference with
res$ect to s$eci,c or determinate $ro$ert( of
the debtor% 2n the other hand# the wor!erIs
$reference under Art 44D of the /abor Code is
an ordinar( $referred credit% The wor!erIs
mone( caim has no $reference over s$ecia
$referred credits%
"eing a mortgage credit# APTIs ien on
")SU&HC2Is mortgaged assets is a s$ecia
$referred ien that must be satis,ed ,rst before
the caims of the wor!ers%
P4./.55.2# A.%/.2#s, I21o%5o%'3#0 vs.
I'-o%'
G. R. No. )666 F#$%&'%( 06, 2007
FACTS* -es$ondent _amora had been in
the em$o( of $etitioner PA/ since 5 Februar(
4564 when the former was hired as a Cargo
-e$resentative at $etitioner PA/Is )m$ort
2$erations &ivision% 2n 43 .ovember 455E#
res$ondent _amora was dismissed from service
for having been found b( $etitioner PA/Is
management to be iabe for insubordination#
negect of customer# disres$ect for authorit(
and absence without o<cia eave%
2n 43 +arch 455C# res$ondent _amora
,ed a com$aint against $etitioners PA/ and
Francisco 9% Nngente ): before the ./-C for
iega dismissa# unfair abor $ractice# non0
$a(ment of wages# damages and attorne(Is
fees% ./-C found that the dismissa was iega
and ordered to immediate( reinstate
com$ainant "ernardin *% _amora to his former
$osition as Cargo -e$resentative at the )m$ort
2$erations &ivision of res$ondent PA/ without
oss of seniorit( rights and other $rivieges and
to $a( him bac! saaries and bac!wages
beginning &ecember 4E# 455E unti his actua
reinstatement# incusive of aowances and
other bene,ts and increases thereto%
Caiming that the 3C *u( 4555 &ecision
of the ./-C res$ecting his reinstatement and
the $a(ment of his bac!wages and other
monetar( bene,ts have become ,na and
e>ecutor(# res$ondent _amora# through
counse# wrote $etitioner PA/ demanding the
e>ecution thereof% PA/ now $ra(ed for the
reversa of said 2rder as we as for the
sus$ension of the $roceedings in the sub8ect
case considering that $etitioner PA/# was# at
that time# undergoing rehabiitation of the
Securities and H>change Commission (SHC)
a$$ointing a $ermanent rehabiitation receiver
for $etitioner PA/ in SHC Case entited L)n the
+atter of the Petition for the A$$rova of
-ehabiitation Pan and for A$$ointment of a
-ehabiitation -eceiver%M
ISSUE* =hether or not the $roceedings
in the instant case shoud have sus$ended on
account of the a$$ointment of its $ermanent
rehabiitation receiver%
Co23#23.o2s* Petitioners PA/# et a% are
of the view that the $roceedings in the instant
case shoud have been sus$ended on account
of the a$$ointment of its $ermanent
rehabiitation receiver% The( $osit that the
sus$ension automatica( a$$ies on a stages
of the $roceedings incuding enforcement of
,na and e>ecutor( 8udgments% The
$roceedings sha remain sus$ended unti the
receivershi$ sha have been ordered ifted b(
the Securities and H>change Commission% To
date# PA/ is sti under $ermanent
-ehabiitation -eceiver%
-es$ondent _amora# in his
+emorandum# o$ines that Lcontrar( to the
nobe $ur$ose of a receivershi$# that is#
$reservation of the distressed com$an(Is
assets for utimate distribution to a creditors
and a@ected $arties# $etitionerIs Amended and
-estated -ehabiitation Pan (citation omitted)
is actua( for the restructuring and $a(ment of
$etitionerIs debts to certain creditors# e>cuding
res$ondent and other em$o(ee0caimants%M
HELD* Nes% The reevant aw deaing with the
sus$ension of actions for caims against
cor$orations is Presidentia &ecree .o% 5D30A#
as amended% Particuar(# Section C(c) which
readsF
%ECION C* )n order to e@ective( e>ercise
such 8urisdiction# the Commission sha $ossess
the foowingF
c) To a$$oint one or more receivers of the
$ro$ert(# rea or $ersona# which is the sub8ect
of the action $ending before the Commission in
accordance with the $ertinent $rovisions of the
-ues of Court in such other cases whenever
necessar( in order to $reserve the rights of the
$arties0itigants and Gor $rotect the interest of
the investing $ubic and creditorsF > > >
P%ov.0#0, B2'//(, T4'3 &5o2 '55o.23-#23
o: ' -'2'9#-#23 1o--.33##, 34#
%#4'$./.3'3.o2 %#1#.v#%, $o'%0 o% $o0(,
5&%s&'23 3o 34.s D#1%##, '// '13.o2s :o%
1/'.-s '9'.2s3 1o%5o%'3.o2s, 5'%32#%s4.5s
o% 'sso1.'3.o2s &20#% -'2'9#-#23 o%
%#1#.v#%s4.5 5#20.29 $#:o%# '2( 1o&%3,
3%.$&2'/, $o'%0 o% $o0( s4'// $#
s&s5#20#0 '11o%0.29/(.
The term Lcaim#M as contem$ated in
Sec% C (c) of Presidentia &ecree .o% 5D30A#
refers Lto debts or demands of a $ecuniar(
nature% )t means Xthe assertion of a right to
have mone( $aid%IM The reason for sus$ending
actions for caims against the cor$oration is to
enabe the management committee or
rehabiitation receiver to e@ective( e>ercise
EB
itsGhis $owers free from an( 8udicia or e>tra0
8udicia interference that might undu( hinder
or $revent the LrescueM of the debtor com$an(%
To aow such other action to continue woud
on( add to the burden of the management
committee or rehabiitation receiver# whose
time# e@ort and resources woud be wasted in
defending caims against the cor$oration
instead of being directed toward its
restructuring and rehabiitation%
The aw is cearF u$on the creation of a
management committee or the a$$ointment of
a rehabiitation receiver# a caims for actions
Lsha be sus$ended according(%M .o
e>ce$tion in favor of abor caims is mentioned
in the aw% Since the aw ma!es no distinction
or e>em$tions# neither shoud this Court% Ubi
e> non distinguit nec nos distinguere debemos%
)n -ubberword (Phis%)# )nc% v% ./-C# we hed
that wor!erIs caims before the ./-C and abor
arbiters are incuded among the actions
sus$ended u$on the $acing under receivershi$
of the em$o(er0cor$orations%
2therwise stated# no other action ma(
be ta!en in# incuding the rendition of 8udgment
during the state of sus$ension U what are
automatica( sta(ed or sus$ended are the
$roceedings of an action or suit and not 8ust the
$a(ment of caims during the e>ecution stage
after the case had become ,na and e>ecutor(%
The sus$ension of action for caims
against a cor$oration under rehabiitation
receiver or management committee embraces
a $hases of the suit# be it before the tria
court or an( tribuna or before this Court%
Furthermore# the actions that are sus$ended
cover a caims against a distressed
cor$oration whether for damages founded on a
breach of contract of carriage# abor cases#
coection suits or an( other caims of a
$ecuniar( nature%
54./. '.%/.2#s vs 54./. '.%/.2#s #-5/o(##s
'sso1.'3.o2 525 s1%' 2 N2007O 1.3.29
R&$$#% <o%/0 vs NLRC, "05 s1%' 72)
N)O
PJ)/)PP).H A)-/).HS vs% PJ)/)PP).H A)-/).HS
H+P/2NHHS ASS2C)AT)2.
QE3E SC-A 35 *une 45# 3DDBR
FactsF
The $resent $etition arose from a abor
com$aint ,ed b( res$ondent PA/HA against
$etitioners PA/ and one +ar( Anne de -osario#
&irector of Personne of $etitioner PA/# on 4
+arch 4565% The abor com$aint charged both
$etitioners with unfair abor $ractice for the
aeged non0$a(ment of the 43th month $a( of
$etitioner PA/Is em$o(ees who had not been
reguari'ed as of the 3D of A$ri 4566# aeged(
in contravention of the Coective "argaining
Agreement (C"A) entered into b( $etitioner PA/
and res$ondent PA/HA%
2n C Februar( 456B# $etitioner PA/ and
res$ondent PA/HA entered into a C"A covering
the $eriod of 456C04565%
-es$ondent PA/HA assaied the im$ementation
of the guideine on the ground that a
em$o(ees of PA/# reguar or non0reguar# must
be $aid their 43th month $a(% )n fact# in a etter
dated 4C &ecember 4566# res$ondent PA/HA#
through Jerbert C% "adovino informed
$etitioner PA/ that there were severa
em$o(ees who faied to receive their 43th
+onth Pa( as of the date of the
corres$ondence%
)n res$onse thereto# $etitioner PA/ informed
res$ondent PA/HA that ran! and ,e em$o(ees
who were reguari'ed after 3D A$ri 4566 were
not entited to the 43th month $a( as the(
were aread( given their Christmas bonuses on
5 &ecember 4566 $er the )m$ementing -ues
of Presidentia &ecree .o% 6E4%
&isagreeing with $etitioner PA/# res$ondent
PA/HA ,ed a abor com$aint for unfair abor
$ractice against $etitioner PA/ before the ./-C
on 4 +arch 4565% The com$aint inter$osed
that Lthe cut0o@ $eriod for reguari'ation
shoud not be used as the $arameter for
granting 43th month $a( considering that the
aw does not distinguish the status of
em$o(ment instead the aw covers a
em$o(ees%M
)n its Position Pa$er submitted before the /abor
Arbiter# $etitioner PA/ countered that those
ran! and ,e em$o(ees who were not
reguari'ed b( 3D A$ri of a $articuar (ear are#
in $rinci$e# not denied their 43th month $a(
considering the( receive said mandator( bonus
in the form of the Christmas "onus? that the
Christmas "onus given to a its em$o(ees is
deemed a com$iance with Presidentia &ecree
.o% 6E4 and the atterIs im$ementing rues?
and that the foregoing has been the $ractice
forma( ado$ted in $revious C"AsI as ear( as
45BD%
)ssueF
=hether or not the Court of A$$eas committed
reversibe error in a<rming the order of the
./-C for the $a(ment of the 43th month $a( or
mid0(ear bonus to its em$o(ees reguari'ed
after 3D A$ri 4566%
SC -uingF
)n a -esoution dated 45 *une 3DDB# =e
resoved to sus$end the $roceedings of the
case at bar in view of the on0going
rehabiitation of $etitioner PA/ as mandated b(
the
Securities and H>change Commission% 2n 36
Se$tember 3DDB# however# the SHC issued an
2rder granting $etitioner PA/Is request to e>it
from rehabiitation after successfu( stabii'ing
its ,nancia o$erations% Jence# the sus$ension
earier issued b( this Court is hereb( ifted#
ma!ing the $resent Petition ri$e for resoution%
A cursor( reading of the 456C04565 C"A of the
$arties herein wi instant( revea that Art% )#
Sec% 3 of said agreement made its $rovision
a$$icabe to a em$o(ees in the bargaining
unit% The $articuar section s$eci,ca( de,ned
the sco$e of a$$ication of the C"A# thusF
Section 3 U A$$ication% A the terms and
conditions of em$o(ment of em$o(ees within
the bargaining unit are embodied in this
Agreement# and the same sha govern the
reationshi$ between the Com$an( and such
em$o(ees% 2n the other hand# a such bene,ts
andGor $rivieges as are not e>$ress( $rovided
for in this Agreement but which are now being
accorded in accordance with the PA/ Personne
Poicies and Procedures +anua# sha be
deemed aso $art and $arce of the terms and
conditions of em$o(ment# or of this
Agreement%
=ithout distinguishing between reguar and
non0reguar em$o(ees% As succinct( $ut b(
res$ondent PA/HA in its +emorandumF A
E6
em$o(ees in PA/ are entited to the same
bene,t as the( are within the same coective
bargaining unit and the entitement to such
bene,t s$is over to even non0union members%
)t is a we0setted doctrine that the bene,ts of
a C"A e>tend to the aborers and em$o(ees in
the coective bargaining unit# incuding those
who do not beong to the chosen bargaining
abor organi'ation% 2therwise# it woud be a
cear case of discrimination%
Jence# to be entited to the bene,ts under the
C"A# the em$o(ees must be members of the
bargaining unit# but not necessari( of the abor
organi'ation designated as the bargaining
agent% A Lbargaining unitM has been de,ned as
a grou$ of em$o(ees of a given em$o(er#
com$rised of a or ess than a of the entire
bod( of em$o(ees# which the coective
interest of a the em$o(ees# consistent with
equit( to the em$o(er# indicates to be the best
suited to serve the reci$roca rights and duties
of the $arties under the coective bargaining
$rovisions of the aw% There is no showing that
the non0reguar status of the concerned
em$o(ees b( said cut0o@ date su<cient(
distinguishes their interests from those of the
reguar em$o(ees so as to e>cude them from
the coective bargaining unit and the bene,ts
of the C"A%
Javing rued that the bene,ts $rovided b( the
sub8ect C"A are a$$icabe even to non0reguar
em$o(ees who beong to the bargaining unit
concerned# the ne>t and crucia quer( to be
addressed is whether the 43th month $a( or
mid0 (ear bonus can be equated to the
Christmas bonus%
As far as non0reguar em$o(ees are concerned#
$etitioner PA/ aeges that their 43th month
$a( sha be the same as their Christmas bonus
and wi be $aid according to the terms
governing the atter%
=e do not agree% From the facts of the $resent
Petition# it is cr(sta cear that $etitioner PA/ is
caiming an e>em$tion from $a(ment of the
43th month $a( or mid0(ear bonus $rovided in
the C"A under the guise of $a(ing the
Christmas bonus which it caims to be the
equivaent of the 43th month $a( under
Presidentia &ecree .o% 6E4%
Presidentia &ecree .o% 6E4 mandates that a
em$o(ers must $a( a their em$o(ees
receiving a basic saar( of not more than
P4#DDD%DD a month# regardess of the nature of
the em$o(ment# a 43th month $a( not ater
than 3A &ecember of ever( (ear%
=hie em$o(ers aread( $a(ing their
em$o(ees a 43th month $a( or more in a
caendar (ear or its equivaent at the time of
the issuance of Presidentia &ecree .o% 6E4 are
aread( e>em$ted from the mandator(
coverage of said aw# $etitioner PA/ cannot
esca$e iabiit( in this case b( virtue thereof%
)t must be stressed that in the 456C04565 C"A#
$etitioner PA/ agreed to $a( its em$o(ees 4)
the 43th month $a( or the mid0(ear bonus# and
3) the Christmas bonus% The 43th month $a(#
guaranteed b( Presidentia &ecree .o% 6E4# is
e>$icit( covered or $rovided for as the mid0
(ear bonus in the C"A# whie the Christmas
bonus is evident( and distinct( a se$arate
bene,t% Petitioner PA/ ma( not be aowed to
brush o@ said distinction# and uniatera( and
arbitrari( decare that for non0reguar
em$o(ees# their Christmas bonus is the same
as or equivaent to the 43th month $a(%
Presidentia &ecree .o% 6E4 mandates the
$a(ment of the 43th month $a( to uniform(
$rovide the ow0$aid em$o(ees with additiona
income% )t but sets a minimum requirement
that em$o(ers must com$( with% )t does not
intend# however# to $recude the em$o(ers
from vountari( granting additiona bonuses
that wi bene,t their em$o(ees% A bonus is an
amount granted and $aid to an em$o(ee for
his industr( and o(at( which contributed to
the success of the em$o(er1s business and
made $ossibe the reai'ation of $ro,ts% )t is an
act of generosit( of the em$o(er for which the
em$o(ee ought to be than!fu and gratefu% )t
is aso granted b( an enightened em$o(er to
s$ur the em$o(ee to greater e@orts for the
success of the business and reai'ation of
bigger $ro,ts% =e deem that the Christmas
bonus in this case is of this nature# athough# b(
virtue of its incor$oration into the C"A# it has
become more than 8ust an act of generosit( on
the $art of $etitioner PA/# but a contractua
obigation it has underta!en%
The incusion of a $rovision for the continued
$a(ment of the Christmas bonus in the 456C0
4565 C"A between res$ondent PA/HA and
$etitioner PA/ contradicts the com$an(Is caim
that the grant of such bene,t was intended to
be credited as com$iance with the statutor(
mandate to give the 43th month $a(%
+emorandum 2rder .o% 36# e>tending
Presidentia &ecree .o% 6E4 to a em$o(ees
regardess of the amount of their month(
saaries# was issued on 43 August 456C% As
ear( as said date# therefore# $etitioner PA/ was
aread( fu( aware that it was awfu(
com$eed to accord a its em$o(ees a 43th
month $a(% According(# if $etitioner PA/ tru(
intended that the Christmas bonus be treated
as the LequivaentM of the 43th month $a(
required b( aw# then said intention shoud
have been e>$ress( decared in their 456C0
4565 C"A# or the se$arate $rovision therein on
the Christmas bonus shoud have been
removed because it woud on( be su$erKuous%
)n the case under consideration# the $rovision
for the $a(ment of the Christmas bonus# a$art
from the 43th month $a(# was incor$orated
into the 456C04565 C"A between res$ondent
PA/HA and $etitioner PA/ without an( condition%
The Christmas bonus# $a(abe in &ecember of
ever( (ear# is distinguished from the 43th
month $a(# due (ear( in
+a(# for which reason it was denominated as
the mid0(ear bonus% Such being the case# the
on( ogica inference that coud be derived
therefrom is that $etitioner PA/ intended to
give the members of the bargaining unit#
re$resented b( res$ondent PA/HA# a Christmas
bonus over and above its ega( mandated
obigation to grant the 43th month $a(%
The non0reguar ran! and ,e em$o(ees of
$etitioner PA/ as of 3D A$ri 4566# are not
actua( see!ing more bene,ts than what the
other member0em$o(ees of the same
bargaining unit are aread( en8o(ing% The( are
on( requesting that a members of the
bargaining unit be treated equa( and a@orded
the same $rivieges and bene,ts as agreed
u$on between res$ondent PA/HA and $etitioner
PA/ in the C"A%
E5
A coective bargaining agreement refers to a
negotiated contract between a egitimate abor
organi'ation and the em$o(er concerning
wages# hours of wor! and a other terms and
conditions of em$o(ment in a bargaining unit%
As in a other contracts# the $arties to a C"A
ma( estabish such sti$uations# causes# terms
and conditions as the( ma( deem convenient#
$rovided these are not contrar( to aw# moras#
good customs# $ubic order or $ubic $oic(%
Thus# where the C"A is cear and unambiguous#
it becomes the aw between the $arties# and
com$iance therewith is mandated b( the
e>$ress $oic( of the aw%
Garcia vs Phil. Airlines GR No. 164856,
January 20, 2009
Facts:
Philippine Airlines filed a case against its
employees herein petitioners for allegedly caught in
the act of sniffing shabu when a team of company
security personnel and law enforcers raided the PAL
Technical Centers Toolroom Section
After due notice! PAL dismissed petitioner for
transgressing companys Code of "iscipline prompting
them to file a Complaint for illegal dismissal which the
Labor Arbiter #LA$ in its decision ruled on their fa%or
ordering PAL to immediately comply with the
reinstatement aspect of the decision
Prior to the &udgment! S'C placed PAL under
(nterim )ehabilitation )ecei%er who subse*uently
replaced by Permanent )ehabilitation )ecei%er +n
appeal! ,L)C re%ersed said decision and dismissed
petitioners complaint for lac- of merit Subse*uently!
LA issued a .rit of '/ecution respecting the
reinstatement aspect of his decision )espondent
filed an 0rgent Petition for (n&unction with the ,L)C
The ,L)C affirmed the %alidity of the .rit and the
,otice issued by LA but suspended and referred the
action to the )ehabilitation )ecei%er for appropriate
action
+n appeal! the appellate court partially
granted the petition and effecti%ely reinstated the
,L)C resolution insofar as it suspended the
proceedings 1y manifestation! respondent informed
the Court that S'C issued an +rder granting its
re*uest to e/it from rehabilitation proceedings
(ssue:
.hether or not petitioner may collect their
wages during the period between the LAs +rder of
reinstatement pending appeal and the ,L)C decision
o%erturning that of the LA! now that PAL has e/ited
from rehabilitation proceedings
)uling:
A dismissed employee whose case was
fa%orably decided by the LA is entitled to recei%e
wages pending appeal upon reinstatement! which is
immediately e/ecutory 0nless there is a restraining
order! it is ministerial upon the LA to implement the
order of reinstatement and it is mandatory on the
employer to comply therewith
The Court reaffirms the pre%ailing principle
that e%en if the order of reinstatement of the LA is
re%ersed on appeal! it is obligatory on the part of the
employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until
re%ersal by the higher court (t settles the %iew that
the LAs order of reinstatement is immediately
e/ecutory and the employer has to either re2admit
them to wor- under the same terms and conditions
pre%ailing prior to their dismissal! or to reinstate them
in the payroll! and that filing to e/ercise the options in
the alternati%e! employer must pay the employees
salaries
.hen reinstatement pending appeal aims to
a%ert the continuing threat or danger to the sur%i%al or
e%en the life of the dismissed employee and his family!
it does not contemplate the period when the employer2
corporation itself is similarly in a &udicially monitored
state of being resuscitated in order to sur%i%e
ATTORNEY=S FEES AND APPEARANCE OF
LA<YERS
CPI E+PLOYEES UNION,ALU vs NLRC
G.R. No. L,67!6,!7 +'%14 "), )6
FACTS* )n the course of their
negotiations with the "an! of the Phii$$ine
)sands for a new C"A to re$ace the one
e>$iring on +arch 34# 4563# serious di@erences
arose between the "P) Hm$o(ees Union0+etro
+ania and its mother federation# the
Associated /abor Unions% This $rom$ted the
former to manifest that it woud henceforth
negotiate aone with "P) inde$endent( of A/U#
which in turn# sus$ended a the eective
o<cers of "P)HU0+etro +ania ed b( its
$resident# Carito -e(es# who was re$aced b(
-oando :ade' as acting $resident% )n
retaiation# -e(es and his foowers# caiming to
be the ega and soe re$resentatives of "P)HU0
+etro +ania# forma( disa<iated from A/U on
.ovember 4C# 4563%
As no agreement coud be reached on a
wide variet( of economic issues# the dis$ute
between "P) and its em$o(ees was certi,ed b(
the +inister of /abor for com$usor( arbitration
and doc!eted in the .ationa /abor -eations
Commission as Certi,ed Cases .os% D3B5 and
D364% These cases were ater consoidated
with the +anifestation and +otion for
)nter$eader and to Consign Union &ues# which
was ,ed b( "P) in view of the conKicting caims
of the -e(es and :ade' grou$s for the said
dues%
2n +arch 33# 4563# the ./-C resoved
the bargaining deadoc! b( ,>ing the wage
increases and other economic bene,ts and
ordering them to be embodied in a new
coective bargaining agreement to be
concuded b( "P)HU0+etro +ania and A/U with
"P)% )t did not decide the intra0union dis$ute#
however# hoding that this was under the
origina 8urisdiction of the med0arbiter and the
e>cusive a$$eate 8urisdiction of the "ureau of
/abor -eations%
Caiming to be the abor union referred to in the
decision# the -e(es grou$ ,ed a $etition with
the "ureau of /abor -eations for direct
certi,cation on the ground of its disa<iation
from A/U% This $etition was denied in a decision
dated *une 43# 4563# where "/- &irector
Cresenciano Tra8ano hed that the disa<iation
was invaid because it was done be(ond the
freedom $eriod%
The -e(es grou$ then came to this
Court in a $etition for certiorari# with a $ra(er
for a tem$orar( restraining order# which we
issued on *u( 44# 4563# to $revent the "/- and
the "P) from enforcing the above0cited
decision% =e eventua( dismissed the $etition
for ac! of merit and ifted the tem$orar(
restraining order on Februar( 4C# 456E# ater
CD
den(ing the motion for reconsideration on
+arch 3B# 456E%
HELD* The Court has studied the arguments of
the $arties and is unabe to acce$t the
$etitioner1s contention% 2ur ,nding is that
athough the tem$orar( restraining order was
strict( s$ea!ing addressed on( to "P) and
A/U# it was entire( $ro$er for the ./-C itsef to
abide b( it# and not on( out of res$ect for this
Court% The decision sought to be enforced
caed for the concusion of a coective
bargaining agreement between "P) and the
members of "P)HU0A/U% The question $recise(
before the Court then was which as between
the -e(es and :ade' grou$s shoud be
recogni'ed as the egitimate re$resentative of
the em$o(ees in genera to negotiate with "P)
./-C had no 8urisdiction to resove that
question% 2bvious(# its own decision of +arch
33# 4563# coud not be enforced unti that
question was ,rst ceared%
Second )ssue
As a resut of its merger with the
Commercia "an! and Trust Com$an( in 4564#
the "P) found it necessar( to cose the
C2+T-UST branch in &avao Cit( and transfer it
to Genera Santos Cit(% Pursuant to an earier
understanding# seven of the em$o(ees of the
said branch who were absorbed b( "P) were
transferred to the Genera Santos Cit( branch%
Jowever# three of them# name( Genna#
2ng!i!o# Arturo .a$aes# and Gregorio Gito#
refused to move% After e@orts to $ersuade them
faied# "P) dismissed them% This triggered a
stri!e b( the &avao Cha$ter of the "P)HU0A/U
which was foowed b( s(m$ath( stri!es b(
other oca cha$ters%
2n 2ctober 45# 4563# the +inister of
/abor sustained the transfer of the three
em$o(ees b( the "P) and issued a return0to0
wor! order% This was ignored b( the stri!ing
wor!ers# who continued to question the
transfer% Another return0to0wor! order was
issued# this time b( the ./-C# which was
obe(ed b( the stri!ers u$on admission b( the
"P) of the three recacitrant em$o(ees to their
origina stations in &avao Cit(% This was done
$ending the o$ening of the Genera Santos Cit(
branch%
U$on the inauguration of the said
branch# "P) ,ed a motion to transfer the said
em$o(ees thereto as sanctioned earier b( the
+inister of /abor% The situation was
com$icated when another em$o(ee# /ennie
Aninon who had earier agreed to transfer# now
insisted on remaining in the &avao Cit( branch%
She too was incuded in the motion# which was
granted b( the ./-C in its decision dated
&ecember E# 456A% .a$aes and Gito agreed to
move to Genera Santos Cit(# but the two ad(
em$o(ees# to wit 2ng!i!o and Aninon
remained adamant%
The $etitioners contend that the
decision of the ./-C of &ecember E# 456A#
directing the transfer of the four em$o(ees is
aso tainted with grave abuse of discretion and
shoud be set aside%
This matter need not detain us too ong for the
issue is hard( debatabe% )ndeed# the right of
the em$o(er to transfer the em$o(ees in the
interest of the e<cient and economic o$eration
of its business cannot be serious( chaenged%
That is its $rerogative% The on( imitation on
the discretion of management in this regard is
its maa ,des% The on( time the em$o(er
cannot e>ercise this right is where it is vitiated
b( im$ro$er motive and is mere( a disguised
attem$t to remove or $unish the em$o(ee
sought to be transferred%
Such im$ro$er motive has not been
shown in the case at bar% 2n the contrar(# it
has been estabished that the transfer was
necessitated b( the fact that the C2+"A.T
branch in &avao Cit( had to be cosed because
it was 8ust across the street from the "P)
branch% There was certain( no 8usti,cation to
maintain the two branches as the( both
beonged now to the "P)% +oreover# it is not
dis$uted that the atera transfer of the
em$o(ees invoved no demotion in their ran!
or saar( or other bene,ts%
)t is not dis$uted that Genera Santos
Cit( is in the Southern +indanao area% G%-% .os%
BC6A30AA
Foowing the dismissa of its $etition
against the "/- the -e(es grou$# on A$ri 3C#
456E# ,ed a motion with the ./-C for the
reease to it of the union dues consigned b(
"P)% 4C This motion was o$$osed b( the :ade'
grou$# which subsequent( ,ed its own $etition
for the $a(ment to it of the said dues# on the
ground that it was the egitimate "P)HU
recogni'ed b( the "/-% 4B )n its decision dated
Se$tember 3C# 456C%
The $etitioner is obvious( in error% As
the disa<iation of the -e(es grou$ was
disaowed b( the "/- because it was done
be(ond the freedom $eriod# the -e(es grou$
coud not have caimed an )dentit( distinct from
that of the origina "P)HU0+etro +ania% For the
same reason# the :ade' grou$ coud not
e>cude the -e(es grou$ from the same "P)HU0
+etro +ania because both of them were sti
$art of that origina oca union% )n other words#
"P)HU0+etro +ania then consisted of the
members of the two contending grou$s whose
a<iation with A/U# as the mother federation#
remained intact%
)n an( event# this issue of dues0sharing has aso
become moot and academic now because the
-e(es grou$ has ,na( succeeded in
disa<iating from A/U and is now a se$arate
and inde$endent union% As such# it does not
have to share with A/U whatever union dues it
ma( now coect from its members% "ut at the
time this $etition was ,ed# the issue was ver(
much aive and had to be resoved to
determine who were entited to the union dues
and in what $ro$ortion% The ./-C therefore did
not commit an( grave abuse of discretion in
rendering the chaenged decision as we have
here inter$reted it%
G%-% .os% BC54C04B
2n A$ri B# 4563# the /abor Arbiter
issued an order directing the res$ondent ban!
to chec! o@ the amount of E V of the tota
economic bene,ts due its em$o(ees under the
new coective bargaining agreement between
the ban! and the union corres$onding to the
,rst (ear of e@ectivit( thereof and to deiver
the amount coected to Att(% /acsina or to his
du( authori'ed re$resentative%
"P) deducted the amount of P 3DD%DD
from each of the em$o(ees who had signed
the authori'ation%
C4
U$on earning about this# the $etitioners
chaenged the said order# on the ground that it
was not authori'ed under the /abor Code% 2n
A$ri 4E# 4563# the ./-C issued a resoution
setting aside the order and requiring "P) to
safe!ee$ the amounts sought to be deducted
7unti the rights thereto of the interested
$arties sha have been determined in
a$$ro$riate $roceedings% Subsequent(# the
./-C issued an en banc resoution dated
Se$tember 3B# 4563# ordering the reease to
/acsina of the amounts deducted 7e>ce$t with
res$ect to an( $ortion thereof as to which no
individua signed authori'ation has been given
b( the members concerned or where such
authori'ation has been withdrawn%
Art% 333% A$$earances and Fees%0 % % %
(b) .o attorne(1s fees# negotiation fees
or simiar charges of an( !ind arising from an(
coective bargaining negotiations or
concusions of the coective agreement sha
be im$osed on an( individua member of the
contracting unionF Provided# however# that
attorne(1s fees ma( be charged against union
funds in an amount to be agreed u$on b( the
$arties% An( contract# agreement or
arrangement of an( sort to the contrar( sha
be nu and void%
The case of Paci,c "an!ing Cor$oration
v% Cave where the aw(er1s fee was ta!en not
from the tota economic bene,ts received b(
the wor!ers but from the funds of their abor
union%
The Court reads the afore0cited
$rovision as $rohibiting the $a(ment of
attorne(1s fees on( when it is e@ected through
forced contributions from the wor!ers from
their own funds as distinguished from the union
funds% The $ur$ose of the $rovision is to
$revent im$osition on the wor!ers of the dut(
to individua( contribute their res$ective
shares in the fee to be $aid the attorne( for his
services on behaf of the union in its
negotiations with the management% The
obigation to $a( the attorne(1s fees beongs to
the union and cannot be shunted to the
wor!ers as their direct res$onsibiit(% .either
the aw(er nor the union itsef ma( require the
individua wor!ers to assume the obigation to
$a( the attorne(1s fees from their own $oc!ets%
So categorica is this intent that the aw aso
ma!es it cear that an( agreement to the
contrar( sha be nu and void ab initio%
The cour t sees no such im$osition
in the case at bar% A reading of the above0cited
resoution wi cear( show that the signatories
thereof have not been in an( manner
com$eed to underta!e the obigation the(
have there assumed% 2n the contrar( it is $ain
that the( were vountari( authori'ing the
chec!0o@ of the attorne(1s fees from their
$a(ment of bene,ts and the turnover to
/acsina of the amounts deducted# conformab(
to their agreement with him% There is no
com$usion here% And signi,cant(# the
authori'ed deductions a@ected on( the
wor!ers who ado$ted and signed the resoution
and who were the on( ones from whose
bene,ts the deductions were made b( "P)% .o
simiar deductions were ta!en from the other
wor!ers who did not sign the resoution and so
were not bound b( it%
That on( those who signed the
resoution coud be sub8ected to the authori'ed
deductions was recogni'ed and made cear b(
the order itsef of the ./-C% )t was there
categorica( decared that the chec!0o@ coud
not be made where 7no individua signed
authori'ation has been given b( the members
concerned or where such authori'ation has
been withdrawn%7
The Paci,c "an!ing Cor$oration case is
not a$$icabe to the $resent case because
there was there no simiar agreement as that
entered into between /acsina and the
signatories of the resoution in question% Absent
such an agreement# there was no question that
the basic $roscri$tion in Artice 333 woud have
to o$erate%
+oreover# the case is covered square(
b( the mandator( and e>$icit $rescri$tion of
Art% 333 which is another guarantee intended
to $rotect the em$o(ee against unwarranted
$ractices that woud diminish his com$ensation
without his !nowedge and consent%
A simiar recognition was made in
Gavadores v% Tra8ano# where the $a(ment of
the attorne(1s fees from the wages of the
em$o(ees was not aowed becauseF 7.o
chec!0o@s from an( amount due to em$o(ees
ma( be e@ected without individua written
authorities du( signed b( the em$o(ees
s$eci,ca( stating the amount# $ur$ose and
bene,ciar( of the deduction% The required
individua authori'ations in this case are
wanting%7
Fina(# the court hod that the
agreement in question is in ever( res$ect a
vaid contract as it satis,es a the eements
thereof and does not contravene aw# moras#
good customs# $ubic order# or $ubic $oic(% 2n
the contrar(# it enabes the wor!ers to avai
themseves of the services of the aw(er of
their choice and con,dence under terms
mutua( acce$tabe to the $arties and#
ho$efu(# aso for their mutua bene,t% The
$etitions in G%-% .os% C5BAC0AB# BC6A30AA# and
BC54C04B are &)S+)SSH&%
TRADERS ROYAL CANK E+PLOYEES
UNION,INDEPENDENT vs. NLRC
G.R. No. )2052. +'%14 )!, )7
FACTS* Petitioner Traders -o(a "an!
Hm$o(ees Union and $rivate res$ondent Att(%
Hmmanue .oe A% Cru'# head of H%.%A% Cru'
and Associates aw ,rm# entered into a retainer
agreement whereb( the former obigated itsef
to $a( the atter a month( retainer fee of
P3#DDD%DD in consideration of the aw ,rmIs
underta!ing to render the services enumerated
in their contract% &uring the e>istence of that
agreement# $etitioner union referred to $rivate
res$ondent the caims of its members for
hoida(# mid U (ear and (ear U end bonuses
against their em$o(er# Traders -o(a "an!% The
./-C rendered a decision in favor of the
em$o(ees# awarding them the said
di@erentias% Jowever# $ending the hearing of
the a$$ication for the writ of e>ecution# T-C
chaenged the decision of the ./-C before the
Su$reme Court% The Court modi,ed the
decision of the ./-C b( deeting the award of
hoida( $a( di@erentias% After $rivate
res$ondent received decision# he noti,ed the
C3
$etitioner union# the T-" management and the
./-C of his right to e>ercise and enforce the
attorne(Is ien over the award of hoida( $a(
di@erentia% Je ,ed a motion before the /abor
Arbiter for the determination of the attorne(Is
fees# $ra(ing that 4DV of the tota award be
decared as his attorne(s fees% The /abor
Arbiter granted the motion of the $rivate
res$ondent% The ./-C a<rmed the order%
Petitioner maintains that the ./-C committed
grave abuse of discretion amounting to ac! of
8urisdiction in u$hoding the award of attorne(Is
fees% )t contends that the award for attorne(Is
fees shoud have been incor$orated in the main
case and not after the Su$reme Court had
aread( reviewed and $assed u$on the decision
of the ./-C% A attorne(Is fees due to $rivate
res$ondent were covered b( the retainer fee of
P3#DDD%DD which it has been reguar( $a(ing to
$rivate res$ondent under their retainer
agreement% Private res$ondent maintains that
his motion to determine attorne(Is fees was
8ust an incident of the main case where
$etitioner was awarded its mone( caims% The
grant of attorne(Is fees was the consequence
of his e>ercise of his attorne(Is ien% Private
res$ondent contends that a retainer fee is not
the attorne(Is fees contem$ated for and
commensurate to the services he rendered to
$etitioner% Jence# the $etition at bar%
ISSUES* =hether or notF
4% Private res$ondent is entited to
attorne(Is fees even if no caim for such was
,ed before the ./-C%
3% Private res$ondent is entited to
an additiona remuneration under the retainer
agreement entered into b( him and $etitioner%
HELD* 4%Nes% Private res$ondent is entited to
attorne(Is fees%
There are two common( acce$ted
conce$ts of attorne(Is fee# the so U caed
ordinar( and e>traordinar(% )n its ordinar(
conce$t# an attorne(Is fee is the reasonabe
com$ensation $aid to a aw(er b( his cient for
the ega services he has rendered to the atter%
The basis of this com$ensation is the fact of his
em$o(ment b( and his agreement with his
cient%
)n its e>traordinar( conce$t# an
attorne(Is fee is an indemnit( for damages
ordered b( the court to be $aid b( the osing
$art( in itigation% The basis of this is an( of the
cases $rovided b( aw where such award can
be made# such as those authori'ed under
Artice 33D6# Civi Code# and is $a(abe not to
the aw(er but to the cient# uness the( have
agreed that the award sha $ertain to the
aw(er as additiona com$ensation or as $art
thereof%
A caim for attorne(Is fees ma( be
asserted either in the ver( action in which the
services of a aw(er had been rendered or in
se$arate action% Private res$ondent was we
within his rights when he made his caim and
waited for the ,nait( of the 8udgment for
hoida( $a( di@erentia# instead of ,ing it
ahead of the awardIs com$ete resoution% To
decare that a aw(er ma( ,e a caim for fees
in the same action on( before the 8udgment is
reviewed b( a higher tribuna woud de$rive
him of his o$tions and render ine@ective the
$ronouncements of the Court%
3% Nes# Private res$ondent is entited to
an additiona remuneration%
There are two !inds of retainer fees a
cient ma( $a( his aw(er% These are a genera
retainer# or a retaining fee# and a s$ecia
retainer%
A genera retainer# or retaining fee# is
the fee $aid to a aw(er to secure his future
services as genera counse for an( ordinar(
ega $robem that ma( arise in the routinar(
business of the cient and referred to him for
ega action% The future services of the aw(er
are secured and committed to the retaining
cient% For this# the cient $a(s the aw(er a
,>ed retainer fee which coud be month( or
otherwise# de$ending u$on their arrangement%
The reason for the remuneration is that the
aw(er is that the aw(er is de$rived of the
o$$ortunit( of rendering services for a fee to
the o$$osing $art( or other $arties% )n ,ne# it is
a com$ensation for ost o$$ortunities%
A s$ecia retainer is a fee for a s$eci,c
case handed or s$ecia service rendered b( the
aw(er for a cient% A cient ma( have severa
cases demanding s$ecia or individua
attention% )f for ever( case there is a se$arate
and inde$endent contract for attorne(Is fees#
each fee is considered a s$ecia retainer%
The P3%DDD%DD which $etitioner $a(s
month( to $rivate res$ondent does not cover
the services the atter actua( rendered before
the abor arbiter and the ./-C in behaf of the
former% The P3#DDD%DD month( fee $rovided in
the retainer agreement between the union and
the aw ,rm refers to a genera retainer# or a
retaining fee# as said month( fee covers on(
the aw ,rmIs $edge# or as e>$ress( stated
therein# its Lcommitment to render the ega
services enumerated%M The fee is not $a(ment
for $rivate res$ondentIs e>ecution or
$erformance of the services isted in the
contract# sub8ect to some $articuar
quai,cations or $ermutations stated there% )t is
inde$endent and di@erent from the
com$ensation which $rivate res$ondent shoud
receive in $a(ment for his services%
)t is not necessar( that the $arties agree
on a de,nite fee for the s$ecia services
rendered b( $rivate res$ondent in order that
$etitioner ma( be obigated to $a(
com$ensation to the former% Hquit( and fair
$a( dictate that $etitioner shoud $a( the
same after it acce$ted# avaied itsef of# and
bene,ted from $rivate res$ondentIs services%
=hether there is an agreement or not#
the courts can ,> a reasonabe com$ensation
which aw(ers shoud receive for their
$rofessiona services%
The measure of com$ensation for
$rivate res$ondent1s services as against his
cient shoud $ro$er( be addressed b( the rue
of 4uantum meruit ong ado$ted in this
8urisdiction% :uantum meruit# meaning 7as
much as he deserves#7 is used as the basis for
determining the aw(er1s $rofessiona fees in
the absence of a contract# but recoverabe b(
him from his cient% The doctrine of 4uantum
meruit is a device to $revent undue enrichment
based on the equitabe $ostuate that it is
un8ust for a $erson to retain bene,t without
$a(ing for it%
C3
C%'4- I20&s3%.#s, I21. vs. NLRC
G.R. No. ))665" O13o$#% )6, )7
FACTS* -es$ondents ,ed a case for
iega sus$ension# iega dismissa# iega
a(o@# iega deductions# non0$a(ment of
service incentive eave# 43
th
month $a( and
actua#ora and e>em$ar( damages against
$etitioner before the /A% Petitioner aeged that
res$ondents were never em$o(ed on a reguar
basis as the atter had their own customers
who required them to render home device% The
/A rued in favor of res$ondents thus the order
for reinstatement and $a(ment of bac!wages
in their favor% U$on a$$ea b( $etitioner# the
./-C a<rmed the /AIs decision but modi,ed it
with res$ect to attorne(Is fees# hence its
reduction to EV of the tota monetar( award
($revious( 4DV)% Jence# this $etition%
ISSUE* =hether or not $etitioners were
entited to attorne(Is fees%
HELD* The SC hed that des$ite the fact that
the matter on attorne(Is fees was touched on(
once in the dis$ositive $ortion of the /AIs
decision and that no discussion or reason was
stated thereof# $etitioners shoud be awarded
the same% )n the /AIs decision# it invo!ed Art%
33D6 of the Civi Code which aows attorne(Is
fees to be awarded b( a court where its
caimant is com$eed to itigate with third
$ersons b( reason of un8usti,ed act or omission
of the $art( for whom its is sought% The SC
further rued that nothing $recudes the
a$$eate courts from reducing the award of
attorne(Is fees where it is found to be
unconscionabe or e>cessive under the
circumstances% )n this case# the ./-C reduced
to EV the ad8udged reief# it a$$earing that the
substantia $ortion of
H#.%s o: R#(2'/0o A2.$'2 vs. N'3.o2'/
L'$o% R#/'3.o2s Co--.ss.o2
G.R. No. ))6"5!. D#1#-$#% !, )7
FACTS* -e(nado Aniban was em$o(ed
b( the Phii$$ine Transmarine Carriers# )nc%
(T-A.S+A-).H) acting in behaf of its foreign
$rinci$a .orwegian Shi$ +anagement AGS
(.2-=HG)A.) as radio o$erator (-G2) on board
the vesse 7Tasse7 for a contract $eriod of 5 to
44 months% &uring the $eriod of his
em$o(ment# Aniban died due to m(ocardia
infarction% Je was survived b( a $regnant wife
and 3 minor chidren who $ra(ed for death
bene,ts $rovided under the P2HA Standard
Hm$o(ment Contract% A caim was aso made
for additiona death bene,ts under the
Coective "argaining Agreement e>ecuted
between Associated +arine 2<cers and
Seamen1s Union of the Phii$$ines and
.2-=HG)A. re$resented b( T-A.S+A-).H
which $rovided for additiona com$ensation of
USP3D#DDD%DD $us USP6#DDD%DD to each chid
under the age of 46 (ears# ma>imum
USP3A#DDD%DD (not e>ceeding 3 chidren) in the
event of death of an o<cer due to an
occu$ationa in8ur( or disease whie serving on
board# whie traveing to and from the vesse on
Com$an(1s business or due to marine $eri% The
caim under the C"A was re8ected on the
ground that m(ocardia infarction of which -G2
Aniban died was not an occu$ationa disease as
to entite his heirs to the additiona death
bene,ts $rovided therein% Consequent(#
"rigida Aniban and her chidren ,ed a forma
com$aint for non0$a(ment of death
com$ensation bene,ts under the C"A%
ISSUESF Two issues are raised before the
SCF (a) whether the P2HA has 8urisdiction to
determine the caim of $etitioners for death
bene,ts# and (b) whether m(ocardia infarction
is an occu$ationa disease as to entite
$etitioners to the death bene,ts $rovided
under the C"A%
HELD* The aw a$$icabe at the time the
com$aint was ,ed on 43 .ovember 4553 was
Art% 3D of the /abor Code as amended which
cear( $rovided that 7origina and e>cusive
8urisdiction over a matters or cases incuding
mone( caims# invoving em$o(er0em$o(ee
reations# arising out of or b( virtue of an( aw
or contract invoving Fii$ino seamen for
overseas em$o(ment is vested with the P2HA%
2n the other hand# the 8urisdiction of the
Hm$o(ment Com$ensation Commission comes
into $a( on( when the iabiit( of the State
)nsurance Fund is in issue# as correct(
suggested b( the Soicitor Genera% The HCC
was created under Tite ))# "!% ):# of the /abor
Code with the heading of Hm$o(ees
Com$ensation and State )nsurance Fund% )n
addition to its $owers and duties enumerated in
Art% 4BB# Art% 46D e>$icit( $rovides that the
Commission e>ercises a$$eate 8urisdiction
on( over decisions rendered b( either the GS)S
or SSS in the e>ercise of their res$ective
origina and e>cusive 8urisdictions% Jence# the
HCC ma( not be considered as having
8urisdiction over mone( caims# abeit death
com$ensation bene,ts# of overseas contract
wor!ers% +(ocardia infarction is an
occu$ationa disease% Athough it ma( be
conceded in the instant case that the $h(sica
e>ertion invoved in carr(ing out the functions
of a radio o$erator ma( have been quite
minima# we cannot discount the $ressure and
strain that went with the $osition of radio
o$erator% As radio o$erator# -e(nado Aniban
had to $ace his fu attention in hearing the
e>act messages received b( the vesse and to
rea( those that needed to be transmitted to
the mainand or to other vesses% =e have
aread( recogni'ed that an( !ind of wor! or
abor $roduces stress and strain norma(
resuting in the wear and tear of the human
bod(% )t is not required that the occu$ation be
the on( cause of the disease as it is enough
that the em$o(ment contributed even in a
sma degree to its deveo$ment% )t must be
stressed that the strict rues of evidence are
not a$$icabe in caims for com$ensation
considering that $robabiit( and not the
utimate degree of certaint( is the test of $roof
in com$ensation $roceedings%
VIRGILIO SAPIO vs. UNDALOC
CONSTRUCTION
PG.R. No. )550"!. +'( 22, 2006Q
F'13s*
The controvers( started with a
com$aint ,ed b( $etitioner against Undaoc
Construction andGor Hngineer Cirio Undaoc for
CA
iega dismissa# under$a(ment of wages and
non$a(ment of statutor( bene,ts% -es$ondent
Undaoc Construction# a singe $ro$rietorshi$
owned b( Cirio Undaoc# is engaged in road
construction business in Cebu Cit(% Petitioner
had been em$o(ed as watchman from 4 +a(
455E to 3D +a( 4556 when he was terminated
on the ground that the $ro8ect he was assigned
to was aread( ,nished# he being aeged( a
$ro8ect em$o(ee% "ut $etitioner asserted that
he was a reguar em$o(ee having been
engaged to $erform wor!s which are 7usua(
necessar( or desirabe7 in res$ondents1
business%
Iss&#*
(4) =hether or not the $etitioner is a
$ro8ect em$o(ee and (3) whether or not he is
entited to saar( di@erentia a$art from
attorne(Is fees%
SC R&/.29*
That $etitioner was a $ro8ect em$o(ee
became a non0issue beginning with the
decision of the /abor Arbiter% Contested sti is
his entitement to saar( di@erentia# a$art from
attorne(1s fees% =ith regards to this issue# the
court said that the concusion of the /abor
Arbiter that entries in the &ecember 455E
$a(ro sheet coud have been atered is utter(
baseess% The caim that the &ecember 455E
$a(ro sheet was written in $enci and was thus
rendered it $rone to aterations or erasures is
cear( non se4uitur% The same is true with
res$ect to the t($ewritten $a(ro sheets% )n
fact# neither the /abor Arbiter nor the ./-C
found an( ateration or erasure or traces
thereat# whether on the $enci0written or
t($ewritten $a(ro sheets% )ndeed# the most
minute e>amination wi not revea an(
tam$ering% Furthermore# if there is an( adverse
concusion as regards the &ecember 455E
$a(ro sheet# it must be con,ned on( to it and
cannot be a$$ied to the t($ewritten $a(ro
sheets%
+oreover# absent an( evidence to the
contrar(# good faith must be $resumed in this
case% Hntries in the $a(ro# being entries in the
course of business# en8o( the $resum$tion of
reguarit( under -ue 43D# Section A3 of the
-ues of Court% Jence# whie as a genera rue#
the burden of $roving $a(ment of monetar(
caims rests on the em$o(er# when fraud is
aeged in the $re$aration of the $a(ro# the
burden of evidence shifts to the em$o(ee and
it is incumbent u$on him to adduce cear and
convincing evidence in su$$ort of his caim%
Unfortunate(# $etitioner1s bare assertions of
fraud do not su<ce to overcome the dis$utabe
$resum$tion of reguarit(%
=hie we adhere to the $osition of the
a$$eate court that the 7tendenc(7 to ater the
entries in the $a(ros was not substantiated#
we cannot however subscribe to the tota
deetion of the award of saar( di@erentia and
attorne(1s fees# as it so rued% The award of
attorne(1s fees is warranted under the
circumstances of this case% Thus# the $etition is
$artia( granted% Petitioner is awarded the
saar( di@erentia in the reduced amount of
P43#4EC%DD and res$ondents are directed to
$a( the same# as we as ten $ercent (4DV) of
the award as attorne(1s fees%
JOSE +AJ S. ORTII vs. SAN +IGUEL
CORPORATION
PG.R. Nos. )5)6",6! J&/( "), 2006Q
FACTSF
The $etitioner in this case# *ose +a> S% 2rti'# is
a member of the Phii$$ine "arwho re$resented
the com$ainants in ./-C Cases .o% :0D3EE05A
(hereinafter referred to as the Aguirre Cases)
and .o% :0DDC605E (hereinafter referred to as
the Toquero Case) instituted against herein
$rivate res$ondent San +igue Cor$oration
sometime in 4553 and 4553% The com$ainants
in ./-C Cases# Aguirre Cases and Toquero Case
were em$o(ees at $rivate res$ondent1s Saes
2<ces in the Province of .egros 2ccidenta%
The com$ainants of Cases# Aguire and Toquero
got a favorabe decision in ./-C regarding their
mone( caims against San +igue Cor$oration%
)n e@ect# San +igue Cor$oration ,ed a
Petitions for Certiorari% =hie this res$ondentIs
$etitions were $ending before the Court of
A$$eas# a but one of the remaining
com$ainants in Aguirre and Toquero Cases on
various dates before two /abor Arbiters and in
the $resence of two witnesses# signed se$arate
&eeds of -eease# =aiver and Ouitcaim in
favor of $rivate res$ondent% "ased on the
&eeds the( e>ecuted# com$ainants agreed to
sette their caims against $rivate res$ondent
for amounts ess than what the ./-C actua(
awarded% Private res$ondent withhed 4DV of
the tota amount agreed u$on b( the $arties in
the said &eeds as attorne(1s fees and handed it
over to $etitioner% Private res$ondent then
attached the &eeds to its +anifestation and
+otion ,ed before the a$$eate court% Then
the Court of a$$eas rendered a decision
a<rming the ./-C decisions# on( in so far as it
concerned com$ainant Afredo Gadian# *r%
(com$ainant Gadian)# the on( com$ainant
who did not e>ecute a &eed of -eease# =aiver
and Ouitcaim% =ith res$ect to the other
com$ainants in the Aguirre and Toquero Cases#
their com$aints were dismissed on account of
their du( e>ecuted &eeds of -eease# =aiver
and Ouitcaim% )n a -esoution dated 5 *anuar(
3DD3# the a$$eate court denied the motion of
com$ainant Gadian and his counse# herein
$etitioner # that the award of attorne(1s fees of
4DV shoud be based on the monetar( awards
ad8udged b( the ./-C%
Thus# this $etition ,ed before the Court
$ra(ing to a<rm the award of attorne(1s fees
equivaent to 4DV of the monetar( award
ad8udged b( the ./-C in its &ecisions dated 34
*u( 455E and 3E *u( 455E in Toquero Case and
Aguirre Cases res$ective(% [ E5
)SSUHF
=hether he is entited to the amount of
attorne(1s fees as ad8udged b( the ./-C in its
&ecisions in the Aguirre and Toquero Cases or
on( to the 4DV of the amounts actua( $aid to
his cients# the com$ainants who signed the
&eeds of -eease# =aiver and Ouitcaim%
SC -U/).GF
The aforesaid issue evident( invoves a
question of aw% =hat it needs to do is ascertain
and a$$( the reevant aw and 8uris$rudence
on the award of attorne(1s fees to the
$revaiing $arties in abor cases
Artice 444 of the /abor Code# as amended#
s$eci,ca( $rovidesF
A-T% 444% ATT2-.HN1S FHHS% Z (a) )n cases of
CE
unawfu withhoding of wages the cu$abe
$art( ma( be assessed attorne(1s fees
equivaent to ten $ercent of the amount of
wages recovered%
b) )t sha be unawfu for an( $erson to
demand or acce$t# in an( 8udicia or
administrative $roceedings for the recover( of
the wages# attorne(1s fees which e>ceed ten
$ercent of the amount of wages recovered%
)n PC/ Shi$$ing Phii$$ines# )nc% v% .ationa
/abor -eations Commission citing &r% -e(es v%
Court of A$$eas# this Court enunciated that
there are two common( acce$ted conce$ts of
attorne(1s fees# the so0caed ordinar( and
e>traordinar(% )n its ordinar( conce$t# an
attorne(1s fee is the reasonabe com$ensation
$aid to a aw(er b( his cient for the ega
services the former has rendered to the atter%
The basis of this com$ensation is the fact of the
attorne(1s em$o(ment b( and his agreement
with the cient% )n its e>traordinar( conce$t#
attorne(1s fees are deemed indemnit( for
damages ordered b( the court to be $aid b( the
osing $art( in a itigation% The instances in
which these ma( be awarded are those
enumerated in Artice 33D6 of the Civi Code#
s$eci,ca( $aragra$h B thereof# which $ertains
to actions for recover( of wages# and is $a(abe
not to the aw(er but to the cient# uness the(
have agreed that the award sha $ertain to the
aw(er as additiona com$ensation or as $art
thereof% Artice 444 of the /abor Code# as
amended# contem$ates the e>traordinar(
conce$t of attorne(1s fees%
"ased on the foregoing# the attorne(1s fees
awarded b( the ./-C in its &ecisions in the
Aguirre and Toquero Cases $ertain to the
com$ainants# $etitioner1s cients# as indemnit(
for damages? and not to $etitioner as
com$ensation for his ega services% -ecords
show that the $etitioner neither aeged nor
$roved that his cients# the com$ainants#
wiing( agreed that the award of attorne(1s
fees woud accrue to him as an additiona
com$ensation or $art thereof% =hat the
com$ainants e>$icit( agreed to in their
individua &eeds of -eease# =aiver# and
Ouitcaim was that the 4DV attorne(1s fees of
the $etitioner sha be deducted from the
amount of the gross settement%
Thus# this Court has no recourse but to
inter$ret the award of attorne(1s fees b( the
./-C in its e>traordinar( conce$t% And since
the attorne(1s fees $ertained to the
com$ainants as indemnit( for damages# it was
tota( within the com$ainants1 right to waive
the amount of said attorne(1s fees and sette
for a esser amount thereof in e>change for the
immediate end to itigation% Petitioner cannot
$revent com$ainants from com$romising
andGor withdrawing their com$aints at an(
stage of the $roceedings 8ust to $rotect his
antici$ated attorne(1s fees%
Hven assuming arguendo that the com$ainants
in the Aguirre and Toquero Cases did indeed
agree that the attorne(1s fees awarded b( the
./-C shoud be considered in their ordinar(
conce$t# i%e%# as com$ensation for $etitioner1s
services# we refer bac! to Artice 444 of the
/abor Code# as amended# which $rovides that
the attorne(1s fees shoud be equivaent to 4DV
of the amount of wages recovered% Since the
com$ainants decided to sette their com$aints
against the $rivate res$ondent# the amounts
actua( received b( them $ursuant to the
&eeds of -eease# =aiver and Ouitcaim are the
amounts 7recovered7 and the $ro$er basis for
determining the 4DV attorne(1s fees%
)n the case at bar# it is be(ond cavi that the
$etitioner is not the rea $art( in interest?
hence# he cannot ,e this Petition to recover
the attorne(1s fees as ad8udged b( the ./-C in
its &ecisions dated 34 *u( 455E and 3E *u(
455E in the Aguirre and Toquero Cases#
res$ective(% To reiterate# the award of
attorne(1s fees $ertain to the $revaiing $arties
in the ./-C cases# name(# the com$ainants#
a but one of whom no onger $ursued their
com$aints against $rivate res$ondent after
e>ecuting &eeds of -eease# =aiver and
Ouitcaim% .ot being the $art( to whom the
./-C awarded the attorne(1s fees# neither is
the $etitioner the $ro$er $art( to question the
non0awarding of the same b( the a$$eate
court%
This woud show that $etitioner has been
com$ensated for the services he rendered the
com$ainants% )t ma( do we for $etitioner to
remember that as a aw(er# he is a member of
an honorabe $rofession# the $rimar( vision of
which is 8ustice% The $ractice of aw is a decent
$rofession and not a mone(0ma!ing trade%
Com$ensation shoud be but a mere incident%
)f $etitioner earnest( beieves that the
amounts he aread( received are gross(
de,cient# $etitioner1s remed( is not against the
$rivate res$ondent# but against his own cients#
the com$ainants% Je shoud ,e a se$arate
action for coection of sum of mone( against
com$ainants to recover 8ust com$ensation for
his ega services# and not the $resent Petition
for -eview to caim from $rivate res$ondent the
attorne(1s fees which were ad8udged b( the
./-C in favor of com$ainants as the $revaiing
$arties in the Aguirre and Toquero Cases%
=JH-HF2-H# the instant Petition is hereb(
&H.)H&%
EVANGELINA +AS+UD N's s&$s3.3&3#
1o-5/'.2'23 :o% ALEJANDER J. +AS+UDO
vs. NATIONAL LACOR RELATIONS
CO++ISSION NF.%s3 D.v.s.o2O '20 ATTY.
ROLANDO C. GO, JR.
PG.R. No. )6""65 F#$%&'%( )", 200Q
FACTSF
The ate Ae>ander *% +asmud (Ae>ander)# the
husband of Hvangeina +asmudn (Hvangeina)
,ed a com$aint against First :ictor( Shi$$ing
Services and Angea!os (Jeas) S%A% on *u( 5#
3DD3 for non0$a(ment of $ermanent disabiit(
bene,ts# medica e>$enses# sic!ness
aowance# mora and e>em$ar( damages# and
attorne(1s fees% Ae>ander engaged the
services of Att(% -oando "% Go# *r% (Att(% Go) as
his counse% )n consideration of Att(% Go1s ega
services# Ae>ander agreed to $a( attorne(1s
fees on a contingent basis# as foowsF twent(
$ercent (3DV) of tota monetar( caims as
setted or $aid and an additiona ten $ercent
(4DV) in case of a$$ea% 2n .ovember 34#
3DD3# the /abor Arbiter (/A) rendered a
&ecision granting the monetar( caims of
Ae>ander% Ae>ander1s em$o(er ,ed an
a$$ea before the .ationa /abor -eations
Commission (./-C)% &uring the $endenc( of
the $roceedings before the ./-C# Ae>ander
died% After e>$aining the terms of the aw(er1s
CC
fees to Hvangeina# Att(% Go caused her
substitution as com$ainant% 2n A$ri 3D# 3DDA#
the ./-C rendered a &ecision dismissing the
a$$ea of Ae>ander1s em$o(er% 2n a$$ea
before the CA# the decision of the /A was
a<rmed with modi,cation% Thereafter#
Ae>anderIs em$o(er a$$eaed to the Su$reme
Court% 2n Februar( C# 3DDC# the Court issued a
-esoution dismissing the case for ac! of merit%
2n *anuar( 4D# 3DDE# the /A directed the ./-C
Cashier to reease the amount of P3#AEA#DB5%3D
to Hvangeina% 2ut of the said amount#
Hvangeina $aid Att(% Go the sum of
PC6D#DDD%DD% &issatis,ed# Att(% Go ,ed a
motion to record and enforce the attorne(1s ien
aeging that Hvangeina reneged on their
contingent fee agreement% Hvangeina $aid
on( the amount of PC6D#DDD%DD# equivaent to
3DV of the award as attorne(1s fees# thus#
eaving a baance of 4DV# $us the award
$ertaining to the counse as attorne(1s fees% )n
her comment# Hvangeina manifested that Att(%
Go1s caim for attorne(1s fees of ADV of the
tota monetar( award was nu and void based
on Artice 444 of the /abor Code%
The /abor Arbiter issued an 2rder granting Att(%
Go1s motion% Then# Hvangeina questioned the
decision of the /abor Arbiter before the ./-C%
Jowever# the ./-C dismissed her a$$ea% Then#
she eevated the case to the Court of A$$eas%
The CA $artia( gramted the $etition with
some modi,cation decaring that Att(% Go is
fu( com$ensated b( the amount of
P4#3AB#5ED%44 that he has aread( received%
&issatis,ed# Angeina ,ed this $etition%
)SSUHF
=hether or not the ega com$ensation of a
aw(er in a abor $roceeding shoud be based
on Artice 444 of the /abor Code%
SC -U/).GF
There are two conce$ts of attorne(1s fees% )n
the ordinar( sense# attorne(1s fees re$resent
the reasonabe com$ensation $aid to a aw(er
b( his cient for the ega services rendered to
the atter% 2n the other hand# in its
e>traordinar( conce$t# attorne(1s fees ma( be
awarded b( the court as indemnit( for
damages to be $aid b( the osing $art( to the
$revaiing $art(# such that# in an( of the cases
$rovided b( aw where such award can be
made# e%g%# those authori'ed in Artice 33D6 of
the Civi Code# the amount is $a(abe not to the
aw(er but to the cient# uness the( have
agreed that the award sha $ertain to the
aw(er as additiona com$ensation or as $art
thereof%
Jere# we a$$( the ordinar( conce$t of
attorne(1s fees# or the com$ensation that Att(%
Go is entited to receive for re$resenting
Hvangeina# in substitution of her husband#
before the abor tribunas and before the court%
The retainer contract between Att(% Go and
Hvangeina $rovides for a contingent fee% The
contract sha contro in the determination of
the amount to be $aid# uness found b( the
court to be unconscionabe or unreasonabe%
Attorne(1s fees are unconscionabe if the(
a@ront one1s sense of 8ustice# decenc( or
reasonabeness% The decree of
unconscionabiit( or unreasonabeness of a
sti$uated amount in a contingent fee contract
wi not $recude recover(% )t mere( 8usti,es the
,>ing b( the court of a reasonabe
com$ensation for the aw(er1s services%
Contingent fee contracts are sub8ect to the
su$ervision and cose scrutin( of the court in
order that cients ma( be $rotected from un8ust
charges% The amount of contingent fees agreed
u$on b( the $arties is sub8ect to the sti$uation
that counse wi be $aid for his ega services
on( if the suit or itigation $ros$ers% A much
higher com$ensation is aowed as contingent
fees because of the ris! that the aw(er ma(
get nothing if the suit fais% The Court ,nds
nothing iega in the contingent fee contract
between Att(% Go and Hvangeina1s husband%
The CA committed no error of aw when it
awarded the attorne(1s fees of Att(% Go and
aowed him to receive an equivaent of 35V of
the monetar( award%
Considering that Att(% Go successfu(
re$resented his cient# it is on( $ro$er that he
shoud receive adequate com$ensation for his
e@orts% =ith his ca$ita consisting of his brains
and with his s!i acquired at tremendous cost
not on( in mone( but in e>$enditure of time
and energ(# he is entited to the $rotection [ C4
of an( 8udicia tribuna against an( attem$t on
the $art of his cient to esca$e $a(ment of his
8ust com$ensation% )t woud be ironic if after
$utting forth the best in him to secure 8ustice
for his cient# he himsef woud not get his due%
SPECIAL TYPES OF <ORKERS
+ARITES CERNARDO vs. NLRC
G.R. No. )22)7 J&/( )2, )
FACTS* Com$ainants numbering A3 are
deaf0mutes who were hired on various $eriods
from 4566 to 4553 b( res$ondent Far Hast "an!
and Trust Co% as +one( Sorters and Counters
through a uniform( worded agreement caed
7Hm$o(ment Contract for Jandica$$ed
=or!ers7%
)n 4566# two (3) deaf0mutes were hired
under this Agreement? in 4565 another two (3)?
in 455D# nineteen (45)? in 4554 si> (C)? in 4553#
si> (C) and in 4553# twent(0one (34)% Their
em$o(mentQsR were renewed ever( si> months
such that b( the time this case arose# there
were ,ft(0si> (EC) deaf0mutes who were
em$o(ed b( res$ondent under the said
em$o(ment agreement% The ast one was
Thema +aindo( who was em$o(ed in 4553
and whose contract e>$ired on *u( 4553%
&iscaiming that com$ainants were
reguar em$o(ees# res$ondent Far Hast "an!
and Trust Co maintained that com$ainants who
are s$ecia cass of wor!ers? the hearing
im$aired em$o(ees were hired tem$orari(
under QaR s$ecia em$o(ment arrangement
which was a resut of overtures made b( some
civic and $oitica $ersonaities to the
res$ondent "an!? that com$ainants were hired
due to 7$a!iusa$7 which must be considered in
the ight of the conte>t career and wor!ing
environment which is to maintain and
strengthen a cor$s of $rofessionas trained and
quai,ed o<cers and reguar em$o(ees who
are baccaaureate degree hoders from
e>ceent schoos which is an unbending $oic(
in the hiring of reguar em$o(ees? that in
addition to this# training continues so that the
reguar em$o(ee grows in the cor$orate
adder? that the idea of hiring handica$$ed
wor!ers was acce$tabe to them on( on a
CB
s$ecia arrangement basis? that it was ado$ted
the s$ecia $rogram to he$ tide over a grou$ of
wor!ers such as deaf0mutes i!e the
com$ainants who coud do manua wor! for
the res$ondent "an!? that the tas! of counting
and sorting of bis which was being $erformed
b( teers coud be assigned to deaf0mutes that
the counting and sorting of mone( are teering
wor!s which were awa(s ogica( and natura(
$art and $arce of the teers1 norma functions?
that from the beginning there have been no
se$arate items in the res$ondent "an! $antia
for sortes or counters? that the teers
themseves aread( did the sorting and
counting chore as a reguar feature and integra
$art of their duties? that through the 7$a!iusa$7
of Arturo "or8a# the teers were reieved of this
tas! of counting and sorting bis in favor of
deaf0mutes without creating new $ositions as
there is no $osition either in the res$ondent or
in an( other ban! in the Phii$$ines which deas
with $ure( counting and sorting of bis in
ban!ing o$erations% Petitioners s$eci,ed when
each of them was hired and dimissed# As earier
noted# the /A and ./-C rued against herein
$etitioners%
ISSUES* =hether $etitioners have become
reguar em$o(ees%
HELD* The $etition is meritorious% Jowever#
on( the em$o(ees# who wor!ed for more than
si> months and whose contracts were renewed
are deemed reguar% Jence# their dismissa
from em$o(ement was iega% Petitioners
maintain that the( shoud be considered
reguar em$o(ees# because their tas! as
mone( sorters and counters was necessar( and
desirabe to the business of res$ondent ban!%
The( further aege that their contracts served
mere( to $recude the a$$ication of Artice36D
and to bar them from becoming reguar
em$o(ees% Private res$ondent# on the other
hand# submits that $etitioners were hired on(
as 7s$ecia wor!ers and shoud not in an( wa(
be considered as $art of the reguar
com$ement of the "an!%7
-es$ondent ban! entered into the
aforesaid contract with a tota of EC
handica$$ed wor!ers and renewed the
contracts of 3B of them% )n fact# two of them
wor!ed from 4566 to 4553% :eri(# the renewa
of the contracts of the handica$$ed wor!ers
and the hiring of others ead to the concusion
that their tas!s were bene,cia and necessar(
to the ban!% +ore im$ortant# these facts show
that the( were quai,ed to $erform the
res$onsibiities of their $ositions% )n other
words# their disabiit( did not render them
unquai,ed or un,t for the tas!s assigned to
them% )n this ight# the +agna Carta for
&isabed Persons mandates that a quai,ed
disabed em$o(ee shoud be given the same
terms and conditions of em$o(ment as a
quai,ed abe0bodied $erson% Section E of the
+agna Carta $rovidesF
Sec% E% Hqua 2$$ortunit( for
Hm$o(ment? .o disabed $erson sha be
denied access to o$$ortunities for suitabe
em$o(ment% A quai,ed disabed em$o(ee
sha be sub8ect to the same terms and
conditions of em$o(ment and the same
com$ensation# $rivieges# bene,ts# fringe
bene,ts# incentives or aowances as a quai,ed
abe bodied $erson%
The fact that the em$o(ees were
quai,ed disabed $ersons necessari( removes
the em$o(ment contracts from the ambit of
Artice 6D%
Since the +agna Carta accords them the
rights of quai,ed abe0bodied $ersons# the( are
thus covered b( Artice 36D of the /C%# which
$rovidesF
Art% 36D% -eguar and Casua
Hm$o(ment? The $rovisions of
writtenagreement to the contrar(
notwithstanding and regardess of the ora
agreement of the $arties# an em$o(ment sha
be deemed to be reguar where the em$o(ee
has been engaged to $erform activities which
are usua( necessar( or desirabe in the usua
business or trade of the em$o(er# e>ce$t
where the em$o(ment has been ,>ed for a
s$eci,c $ro8ect or underta!ing the com$etion
or termination of which has been determined at
the time of the engagement of the em$o(ee or
where the wor! or services to be $erformed is
seasona in nature and the em$o(ment is for
the duration of the season% An em$o(ment
sha be deemed to be casua if it is not covered
b( the $receding $aragra$hF Provided# That#
an( em$o(ee who has rendered at east one
(ear of service# whether such service is
continuous or bro!en# sha be considered as
reguar em$o(ee with res$ect to the activit( in
which he is em$o(ed and his em$o(ment sha
continue whie such activit( e>ists%
The test of whether an em$o(ee is
reguar was aid down in &e /eon v% ./-C# in
which this Court hedF
LThe $rimar( standard# therefore# of
determining reguar em$o(ment is the
reasonabe connection between the $articuar
activit( $erformed b( the em$o(ee in reation
to the usua trade or business of the em$o(er%
The test is whether the former is usua(
necessar( or desirabe in the usua business or
trade of the em$o(er% The connection can be
determined b( considering the nature of the
wor! $erformed and its reation to the scheme
of the $articuar business or trade in its
entiret(% Aso if the em$o(ee has been
$erforming the 8ob for at east one (ear# even if
the $erformance is not continuous and mere(
intermittent# the aw deems re$eated and
continuing need for its $erformance as
su<cient evidence of the necessit( if not
indis$ensibiit( of that activit( to the business%
Jence# the em$o(ment is considered reguar#
but on( with res$ect to such activit(# and whie
such activit( e>ist% =ithout a doubt# the tas! of
counting and sorting bis is necessar( and
desirabe to the business of res$ondent ban!%
=ith the e>ce$tion of si>teen of them#
$etitioners $erformed these tas!s for more
than si> months% Thus# the foowing twent(0
seven $etitioners shoud be deemed reguar
em$o(ees% As hed b( the Court# 7Artices 36D
and 364 of the /abor Code $ut an end to the
$ernicious $ractice of ma!ing $ermanent
casuas of our ow( em$o(ees b( the sim$e
e>$edient of e>tending to them $robationar(
a$$ointments# ad in,nitum%7
The contract signed b( $etitioners is
a!in to a $robationar( em$o(ment# during
C6
which the ban! determined the em$o(ees1
,tness for the 8ob% =hen the ban! renewed the
contract after the a$se of the si>0month
$robationar( $eriod# the em$o(ees thereb(
became reguar em$o(ees%
.o em$o(er is aowed to determine
inde,nite( the ,tness of its em$o(ees% As
reguar em$o(ees# the 3B $etitioners are
entited to securit( of tenure? that is# their
services ma( be terminated on( for a 8ust or
authori'ed cause% "ecause res$ondent faied to
show such cause# these 3B $etitioners are
deemed iega( dismissed and therefore
entited to bac! wages and reinstatement
without oss of seniorit( rights and other
$rivieges% Considering the aegation of
res$ondent that the 8ob of mone( sorting is no
onger avaiabe because it has been assigned
bac! to the teers to whom it origina(
beonged# $etitioners are hereb( awarded
se$aration $a( in ieu of reinstatement%
"ecause the other 4C wor!ed on( for si>
months# the( are not deemed reguar
em$o(ees and hence not entited to the same
bene,ts% The award referred to res$ondentsI
bac!wages and not to withhed saaries to
which the Court a<rmed% Petition was
dismissed%
E. E+PLOY+ENT OF <O+EN
P4./.55.2# T#/#9%'54 '20 T#/#54o2#
Co-5'2( vs. N'3.o2'/ L'$o% R#/'3.o2s
Co--.ss.o2
G.R. No. ))676 +'( 2", )7
FACTS* Grace de Gu'man was initia(
hired b( $etitioner as a reiever# for a ,>ed
$eriod to substitute one C%F% Tenorio who went
on maternit( eave% Jer services as reiever
were again engaged b( $etitioner# this time in
re$acement of another $erson% After August 6#
4554# and $ursuant to their -eiever
Agreement# her services were terminated%
She was once more as!ed to 8oin the
com$an( as a $robationar( em$o(ee# the
$robationar( $eriod to cover 4ED da(s% )n the
8ob a$$ication form that was furnished her to
be ,ed u$ for the $ur$ose# she indicated in
the $ortion for civi status therein that she was
singe athough she had contracted marriage a
few months earier%
=hen $etitioner su$$osed( earned
about the same ater# its branch su$ervisor in
"aguio Cit(# &eia +% 2<cia# sent to $rivate
res$ondent a memorandum dated *anuar( 4E#
4553 requiring her to e>$ain the discre$anc(%
)n that memorandum# she was reminded about
the com$an(1s $oic( of not acce$ting married
women for em$o(ment% She stated that she
was not aware of PTWT1s $oic( regarding
married women at the time# and that a aong
she had not deiberate( hidden her true civi
status%
Petitioner nonetheess remained
unconvinced b( her e>$anations% Private
res$ondent was dismissed from the com$an(%
She ,ed a com$aint for iega dismissa#
cou$ed with a caim for non0$a(ment of cost of
iving aowances%
ISSUE* =hether or not the com$an(
$oic( tantamount to un8ust and unawfu
discrimination against married women%
HELD* Petitioner1s $oic( of not acce$ting or
considering as disquai,ed from wor! an(
woman wor!er who contracts marriage runs
afou of the test of# and the right against#
discrimination# a@orded a women wor!ers b(
our abor aws and b( no ess than the
Constitution% Contrar( to $etitioner1s assertion
that it dismissed $rivate res$ondent from
em$o(ment on account of her dishonest(# the
record discoses cear( that her ties with the
com$an( were dissoved $rinci$a( because of
the com$an(1s $oic( that married women are
not quai,ed for em$o(ment in the said
com$an(# and not mere( because of her
su$$osed acts of dishonest(%
Petitioner1s $oic( is not on( in
derogation of the $rovisions of Artice 43C of
the /abor Code on the right of a woman to be
free from an( !ind of sti$uation against
marriage in connection with her em$o(ment#
but it i!ewise assauts good moras and $ubic
$oic(# tending as it does to de$rive a woman
of the freedom to choose her status# a $riviege
that b( a accounts inheres in the individua as
an intangibe and inaienabe right% Jence#
whie it is true that the $arties to a contract
ma( estabish an( agreements# terms# and
conditions that the( ma( deem convenient# the
same shoud not be contrar( to aw# moras#
good customs# $ubic order# or $ubic $oic(%
Carried to its ogica consequences# it ma( even
be said that $etitioner1s $oic( against
egitimate marita bonds woud encourage iicit
or common0aw reations and subvert the
sacrament of marriage%
D#/ +o23# P4./.55.2#s, I21. vs. Lo/.3'
V#/'s1o
G.R. No. )5"!77 +'%14 6, 2007
FACTS* /oita +% :easco started wor!ing
with &e +onte Phii$$ines on 2ctober 34#
45BC as a seasona em$o(ee and was
reguari'ed on +a( 4# 45BB% Jer atest
assignment was as Fied /aborer% 2n *une 4C#
456B# res$ondent was warned in writing due to
her absences% 2n +a( A# 4554# res$ondent#
thru a etter# was again warned in writing b(
$etitioner about her absences without
$ermission and a forfeiture of her vacation
eave entitement for the (ear 455D04554 was
im$osed against her% 2n Se$tember 4A# 4553#
another warning etter was sent to res$ondent
regarding her absences without $ermission
during the (ear 455404553% Jer vacation
entitement for the said em$o(ment (ear
a@ected was consequent( forfeited% )n view of
the said aeged absences without $ermission#
on Se$tember 4B# 455A# a notice of hearing
was sent to res$ondent notif(ing her of the
charges ,ed against her for vioating the
Absence =ithout 2<cia /eave rueF that is for
e>cessive absence without $ermission on
August 4E046# 35034 and Se$tember 404D#
455A% The hearing was set on Se$tember 33#
455A% -es$ondent having faied to a$$ear on
Se$tember 33# 455A hearing# another notice of
hearing was sent to her resetting the
investigation on Se$tember 3D# 455A% )t was
again reset to 2ctober E# 455A% 2n *anuar( 4D#
455E# after hearing# the $etitioner terminated
the services of res$ondent e@ective *anuar( 4C#
C5
455A due to e>cessive absences without
$ermission% Feeing aggrieved# res$ondent ,ed
a case for iega dismissa against $etitioner
asserting that her dismissa was iega because
she was on the fami( wa( su@ering from
urinar( tract infection# a $regnanc(0borne# at
the time she committed the aeged absences%
She e>$ained that for her absence from wor!
on August 4E# 4C# 4B W 46# 455A she had sent
an a$$ication for eave to her su$ervisor#
Prima NbaYe'% Thereafter# she went to the
com$an( hos$ita for chec!0u$ and was
advised according( to rest in quarters for four
(A) da(s or on August 3B to 3D# 455A% Sti not
feeing we# she faied to wor! on Se$tember 4#
455A and was again advised two da(s of rest in
quarters on Se$tember 303# 455A% Unabe to
recover# she went to see an outside doctor# &r%
+ari(n Casino# and the atter ordered her to
rest for another ,ve (E) consecutive da(s# or
from Se$tember E to 5# 455A% She decared
she did not ,e the adequate eave of absence
because a medica certi,cate was aread(
su<cient $er com$an( $oic(% 2n Se$tember
4D# 455A she faied to re$ort to wor! but sent
an a$$ication for eave of absence to her
su$ervisor# Prima NbaYe'# which was not
an(more acce$ted%
ISSUE* =hether the em$o(ment of
res$ondent had been vaid( terminated on the
ground of e>cessive absences without
$ermission% Coroar( to this is the question of
whether the $etitioner discharged the
res$ondent on account of $regnanc(# a
$rohibited act%
HELD* Court u$hods and ado$ts the ,nding of
the ./-C# thusF )n this 8urisdiction tardiness
and absenteeism# i!e abandonment# are
recogni'ed forms of negect of duties# the
e>istence of which 8ustif( the dismissa of the
erring em$o(ee% -es$ondentIs rue $enai'ing
with discharge an( em$o(ee who has incurred
si> (C) or more absences without $ermission or
subsequent 8usti,cation is admitted( within the
$urview of the foregoing standard%
Jowever# whie it is not dis$uted that
com$ainant incurred absences e>ceeding si>
(C) da(s as she actua( faied to re$ort for wor!
from August 4E046# 3303C# 35034# Se$tember 40
3# E04D# 4304B# 3403A# 3C03D# and 2ctober 403#
455A# her being $regnant at the time these
absences were incurred is not questioned and
is even admitted b( res$ondent* )t thus
$u''es us wh( res$ondent asserts com$ainant
faied to e>$ain satisfactori( her absences on
August 4E046# 35034# Se$tember 403 and E04D#
455A# (et reconsidered the rest of her absences
for being covered with Lrest0in0quartersM (-)O)
advice from its hos$ita $ersonne when this
advice was unquestionab( issued in
consideration of the $h(sioogica and
emotiona changes com$ainant# a conceiving
mother# natura( deveo$ed% +edica and
heath re$orts abundant( discose that during
the ,rst trimester of $regnanc(# e>$ectant
mothers are $agued with morning sic!ness#
frequent urination# vomiting and fatigue a of
which com$ainant was simiar( $agued with%
Union o<cia )"" /esnaIs observation on
com$ainant being a$$arent( not feeing we
during the investigation conducted b(
res$ondent on 2ctober E# 455A even remains in
the records of said $roceedings% For
res$ondent to isoate the absences of
com$ainant in August and mid0Se$tember#
455A from the absences she incurred ater in
said month without submitting an( evidence
that these were due to causes not in manner
associated with her condition renders its
8usti,cation of com$ainantIs dismissa cear(
not convincing under the circumstances%
&es$ite contrar( decaration# the records bear
the admission of res$ondentIs PGA .orth
Su$ervisor# P" Nbane'# of her recei$t of the
hos$ita record showing com$ainantIs -)O
advice for August 4503D# 455A which coud
aread( serve as res$ondentIs reference in
resoving the atterIs absences on August 4E to
46# 455A% -es$ondent further admitted
com$ainant was under -)O advice on
Se$tember 303# 455A# (et# insisted in incuding
these dates among her 4C $ur$orted
une>$ained absences 8ustif(ing termination of
her em$o(ment*The Court agrees with the CA
in concuding that res$ondentIs sic!ness was
$regnanc(0reated and# therefore# the $etitioner
cannot terminate res$ondentIs services
because in doing so# $etitioner wi# in e@ect# be
vioating the /abor Code which $rohibits an
em$o(er to discharge an em$o(ee on account
of the atterIs $regnanc(% Art% 43B% P ro!ibited
acts* U )t sha be unawfu for an( em$o(erF
(3) To discharge such woman on account of her
$regnanc(# whie on eave or in con,nement
due to her $regnanc(? %econd* The $etitioner
stresses that man( women go through
$regnanc( and (et manage to submit $rior
notices to their em$o(er# es$ecia( if Lthere is
no evidence on record indicating a condition of
such gravit( as to $recude e@orts at notif(ing
$etitioner of her absence from wor! in series%M
"ut it must be em$hasi'ed that under
$etitionerIs com$an( rues# absences ma( be
subsequent( 8usti,ed% The Court ,nds no
cogent reason to disturb the ,ndings of the
./-C and the CA that the res$ondent was abe
to subsequent( 8ustif( her absences in
accordance with com$an( rues and $oic(? that
the res$ondent was $regnant at the time she
incurred the absences? that this fact of
$regnanc( and its reated inesses had been
du( $roven through substantia evidence? that
the res$ondent attem$ted to ,e eaves of
absence but the $etitionerIs su$ervisor refused
to receive them? that she coud not have ,ed
$rior eaves due to her continuing condition?
and that the $etitioner# in the ast ana(sis#
dismissed the res$ondent on account of her
$regnanc(# a $rohibited act% The Court is
convinced that the $etitioner terminated the
services of res$ondent on account of her
$regnanc( which 8usti,ed her absences and#
thus# committed a $rohibited act rendering the
dismissa iega%
F. E+PLOY+ENT OF CHILDREN
G. E+PLOY+ENT OF HOUSEHELPER
ULTRA VILLA FOOD HAUS vs. GENISTON
GR. No. )20!7", J&2# 2", )
FACTS* -enato Geniston#$rivate
res$ondent herein ,ed a com$aint for iega
dismissa againtsthe Utra :ires Food Jaus
BD
restaurant andGor its aeged owner -osie Tio%
Private res$ondent aeged that he was
em$o(ed as a 7do it a gu(#7 acting as waiter#
driver# and maintenance man# in said
restaurant% Jis em$o(ment therein s$anned
from +arch 4# 4565 unti he was dismissed on
+a( 43# 4553% For his services# $rivate
res$ondent was $aid PCD%DD in 4565# PBD%DD in
455D# P6D%DD in 4554 and P5D%DD when he was
dismissed in 4553% Petitioner -osie Tio# on the
other hand# maintained that $rivate res$ondent
was her $ersona driver# not an em$o(ee of
the Utra :ia Food Jaus% As $etitioner1s
$ersona driver# $rivate res$ondent was
required to re$ort for wor! at BFDD a%m% to drive
$etitioner to +andaue Cit( where $etitioner
wor!ed as the +anager of the CFC Cor$oration%
Private res$ondent was i!ewise given free
meas as we as 43th month $a( at the end of
the (ear% Petitioner denied dismissing $rivate
res$ondent whom she caimed abandoned his
8ob% &uring the eections of +a( 44# 4553#
$rivate res$ondent acted as a Po =atcher for
the .ationa Union of Christian &emocrats%
Though we aware that +a( 43# 4553 was a
hoida(# $etitioner caed u$ $rivate res$ondent
that da( to as! him to re$ort for wor! as she
had some im$ortant matters to attend to%
Private res$ondent1s wife# however# cod( tod
$etitioner that $rivate res$ondent was he$ing
in the counting of baots% Petitioner was thus
forced to hire another driver to re$ace $rivate
res$ondent% Private res$ondent came bac! a
wee! after but on( to coect his saar(% The
/abor Arbiter concuded that $rivate
res$ondent# being a $ersona driver# was not
entited to overtime $a(# $remium $a(# service
incentive eave $a( and 43th month $a(% The
/abor Arbiter noted Private res$ondent1s
admission that he was $etitioner1s driver
contained in the mandator( conference order
issued b( the /abor Arbiter on *anuar( 4D#
455AThe ./-C rued that $rivate res$ondent
was an em$o(ee of the Utra :ia Food Jaus%
ISSUES* (4) =hether $rivate res$ondent
was an em$o(ee of the Utra :ia Food Jaus or
the $ersona driver of $etitioner (3) =hether
$rivate res$ondent was iega( dismissed from
em$o(ment%
HELD* (4) The Su$reme Court ,nd that $rivate
res$ondent was indeed the $ersona driver of
$etitioner# and not an em$o(ee of the Utra
:ia Food Jaus% There is substantia evidence
to su$$ort such concusion# such as Private
res$ondent1s admission during the mandator(
conference that he was $etitioner1s $ersona
driver# Co$ies of the Utra :ia Food Jaus
$a(ro which do not contain $rivate
res$ondent1s name and other $ertinent
documents% Thus# Artice 4A4 of the /abor
Code a$$ies# which $rovidesF Art% 4A4%
Coverage% 0 This Cha$ter sha a$$( to a
$ersons rendering services in househods for
com$ensation% 7&omestic or househod
service7 sha mean services in the em$o(ers
home which is usua( necessar( or desirabe
for the maintenance and en8o(ment thereof
and incudes ministering to the $ersona
comfort and convenience of the members of
the em$o(ers househod# incuding services of
fami( drivers% The /abor Code is sient on the
grant of overtime $a(# hoida( $a(# $remium
$a( and service incentive eave to those
engaged in the domestic or househod service%
+oreover# the s$eci,c $rovisions of /C and
Artice 63# which de,nes the sco$e of the
a$$ication of these $rovisions# e>$ress(
e>cudes domestic he$ers from its coverageF
Art% 63% Coverage% 0 The $rovision of this tite
sha a$$( to em$o(ees in a estabishments
and underta!ings whether for $ro,t or not# but
not to government em$o(ees# manageria
em$o(ees# ,ed $ersonne# members of the
fami( of the em$o(er who are de$endent on
him for su$$ort# domestic he$ers# $ersons in
the $ersona service of another# and wor!ers
who are $aid b( resuts as determined b(
Secretar( of /abor in a$$ro$riate reguations%
Cear( then# $etitioner is not obiged b( aw to
grant $rivate res$ondent an( of these bene,ts%
Hm$o(ing the same ine of ana(sis# it woud
seem that $rivate res$ondent is not entited
to43 month $a(% .evertheess# we deem it 8ust
to award $rivate res$ondent 43th month $a( in
view of $etitioner1s $ractice of according
$rivate res$ondent such bene,t% )ndeed#
$etitioner admitted that she gave $rivate
res$ondent 43th month $a( ever( &ecember
(3) .o% The Su$reme Court disagrees with
Petitioner which submits that $rivate
res$ondent abandoned his 8ob# $referring to
wor! as an eection watcher instead% To
constitute abandonment# two requisites must
concurF (4) the faiure to re$ort to wor! or
absence without vaid or 8usti,abe reason? and
(3) a cear intention to sever the
em$o(er0em$o(ee reationshi$ as manifested
b( some overt acts# with the second requisite
as the more determinative factor% The burden
of $roving abandonment as a 8ust cause for
dismissa is on the em$o(er% Petitioner faied
to discharge this burden% )t is quite
unbeievabe that $rivate res$ondent woud
eave a stabe and reative( we $a(ing 8ob as
$etitioner1s fami( driver to wor! as an eection
watcher% Consequent(# we do not ,nd $rivate
res$ondent to have abandoned his 8ob% Jis
dismissa from $etitioner1s em$o( being un8ust#
$etitioner is entited to an indemnit( under
Artice 4A5 of the /abor CodeF Art% 4A5%
)ndemnit( for un8ust termination of services% )f
the $eriod of househod service is ,>ed# neither
the em$o(er nor the househe$er ma(
terminate the contract before the e>$iration of
the term# e>ce$t for a 8ust cause% )f the
househe$er is un8ust( dismissed# he or she
sha be $aid the com$ensation aread( earned
$us that for ,fteen (4E) da(s b( wa( of
indemnit(% )f the househe$er eaves without
8usti,abe reason he or she sha forfeit an(
un$aid saar( due him or her not e>ceeding
,fteen (4E) da(s%
R#-.293o2 I20&s3%.'/ S'/#s
Co%5o%'3.o2 vs. E%/.20' C's3'2#0'
GR Nos. )625,6 Nov#-$#% 20,
2006
FACTS* Hrinda aeged that she
started wor!ing in August 4563 as
com$an( coo! with a saar( of Ph$
A#DDD%DD for -emington# a cor$oration
engaged in the trading business? She
averred that she re$orted for wor! at
the new site in Caoocan Cit( on *anuar(
B4
4E# 4556# on( to be informed that
-emington no onger needed her
services% Hrinda beieved that her
dismissa was iega because she was
not given the notices required b( aw?
hence# she ,ed her com$aint for
reinstatement without oss of seniorit(
rights# saar( di@erentias# service
incentive eave $a(# 43
th
month $a( and
4DV attorne(Is fees%
-emington denied that it
dismissed Hrinda iega(% )t $osited
that Hrinda was a domestic he$er# not
a reguar em$o(ee? Hrinda wor!ed as a
coo! and this 8ob had nothing to do with
-emingtonIs business of trading in
construction or hardware materias#
stee $ates and wire ro$e $roducts%
ISSUE* =hether or not
res$ondent is considered to be a reguar
em$o(ee or a mere domestic he$er%
=hether or not burden of $roof
rests u$on the em$o(er to show that
the dismissa is for a 8ust cause%
HELD* )n this case# there was no
aegation b( res$ondent that
com$ainant had ever wor!ed in the
residence of +r% Tan% =hat is cear from
the facts narrated b( the $arties is that
com$ainant continuous( did her 8ob as
a coo! in the o<ce of res$ondent
serving the needed food for unch and
merienda of the em$o(ees% Thus# her
wor! as coo! inured not for the bene,t
of the fami( members of +r% Tan but
soe( for the individua em$o(ees of
res$ondent%
Com$ainant as an em$o(ee of
res$ondent com$an( is even bostered
b( no ess than the certi,cation dated
+a( 33# 455B issued b( the cor$orate
secretar( of the com$an( certif(ing that
com$ainant is their bona,de em$o(ee%
This is a soid evidence which the /abor
Arbiter sim$( brushed aside% "ut# such
error woud not be committed here as it
woud be at the height of in8ustice if we
are to decare that com$ainant is a
domestic he$er%
The $etitioner itsef admits in its
$osition $a$er

that res$ondent wor!ed
at the com$an( $remises and her dut(
was to coo! and $re$are its em$o(eesI
unch and merienda% Cear(# the nature
of res$ondentIs wor! as a coo!# who
caters not on( to the needs of +r% Tan
and his fami( but aso to that of the
$etitionerIs em$o(ees# ma!es her fa
square( within the de,nition of a
reguar em$o(ee%
)n termination cases# the burden
of $roof rests u$on the em$o(er to
show that the dismissa is for a 8ust and
vaid cause? faiure to do so woud
necessari( mean that the dismissa was
iega% )f doubt e>ists between the
evidence $resented b( the em$o(er
and the em$o(ee# the scaes of 8ustice
must be tited in favor of the atter%
The $etition is &H.)H& for ac! of merit
+EDICAL, DENTAL AND OCCUPATIONAL
SAFETY
). To/os' vs. NLRC
GR No. )!576. A5%./ )0, 200"
FACTS* Hve(n Toosa was the widow of
Ca$tain :irgiio Toosa who was hired b(
Owana0Taiun# through its manning agent# Asia
"u! Trans$ort Phis% )nc%# to be the master of
the :esse named +G: /ad( &ona% The contract
o<cia( began when he assumed command of
the vesse in No!ohama# *a$an% The vesse
de$arted for /ong "each Caifornia# $assing b(
Jawaii in the midde of the vo(age% At the time
of embar!ation# he was aeged( shown to be
in good heath% &uring Xchanneing activitiesI
u$on the vesseIs de$arture from No!ohama
Ca$t% Toosa was drenched with rainwater% The
foowing da(# he had sight fever and in the
succeeding tweve da(s# his heath ra$id(
deteriorated resuting in his death on
.ovember 46# 4553% "ecause of his death# his
wife ,ed a Com$aintGPosition Pa$er against
Owana0Taiun# thru its resident0agent# +r% Fumio
.a!agawa# Asia "u!# Pedro Garate and +ario
Asis# as res$ondents% Petitioner argues that her
cause of action is based on the faiure of
$rivate res$ondents# as em$o(ers of her
husband# to $rovide him time(# adequate and
com$etent medica services under Art% 4C4 of
the /abor Code% /i!ewise# she contends that
Artice 34B (a) (A) of the /abor Code vests abor
arbiters and the ./-C with 8urisdiction to award
a !inds of damages in cases arising from
em$o(er0em$o(ee reations% She aso insisted
that the Lreasonabe causa connectionM rue
shoud be a$$ied in her favor%
ISSUES*
4%) =hether or not the abor arbiter and
the ./-C had 8urisdiction over
$etitionerIs action
3%) =hether or not caim can be
anchored on Art% 4C4 of the /abor
Code
HELD* (4) The ./-C and the /A had no
8urisdiction over $etitionerIs caim for damages%
Time and time again# we have hed that the
aegations in the com$aint determine the
nature of the action and# consequent(# the
8urisdiction of the courts% After carefu(
e>amining $etitionerIs com$aintG$osition
$a$er# we are convinced that the aegations
therein are in the nature of an action based on
a quasi deict or tort% )t is evident that she sued
Pedro Garate and +ario Asis for gross
negigence% PetitionerIs com$aintG$osition
$a$er refers to and e>tensive( discusses the
negigent acts of shi$mates Garate and Asis#
who had no em$o(er0em$o(ee reation with
Ca$tain Toosa% The /A himsef cassi,ed
$etitionerIs case as La com$aint for damages#
bac!isting and watchisting for gross
negigence resuting in the death of
com$ainantIs husband# Ca$t% :irgiio Toosa%M
The case does not invove the ad8udication of a
abor dis$ute# but the recover( of damages
based on a quasi deict% The 8urisdiction of abor
tribunas is imited to dis$utes arising from
em$o(er0em$o(ee reations# as we rued in
Georg Grot8ahn G+"J W Co% v% )snaniF
B3
L.ot ever( dis$ute between an
em$o(er and em$o(ee invoves
matters that on( /As and the ./-C can
resove in the e>ercise of their
ad8udicator( or quasi08udicia $owers%
The 8urisdiction of /As and the ./-C
under Artice 34B of the /abor Code is
imited to dis$utes arising from an
em$o(er0em$o(ee reationshi$ which
can on( be resoved b( reference to the
/abor Code# other abor statutes# or
their coective bargaining agreement%M
The $ivota question is whether the
/abor Code has an( reevance to the reief
sought b( $etitioner% From her $a$er# it is
evident that the $rimar( reiefs she see!s are
as foowsF (a) oss of earning ca$acit(
denominated therein as Lactua damagesM or
Lost incomeM and (b) bac!isting% The oss she
caims does not refer to the actua earnings of
the deceased# but to his earning ca$acit( based
on a ife e>$ectanc( of CE (ears% This amount is
recoverabe if the action is based on a quasi
deict as $rovided for in Artice 33DC of the Civi
Code# but not in the /abor Code% =hie it is true
that abor arbiters and the ./-C have
8urisdiction to award not on( reiefs $rovided
b( abor aws# but aso damages governed b(
the Civi Code# these reiefs must sti be based
on an action that has a reasonabe causa
connection with the /abor Code# other abor
statutes# or coective bargaining agreements%
The centra issue is determined
essentia( from the reief sought in the
com$aint% =here such $rinci$a reief is to be
granted under abor egisation or a C"A# the
case shoud fa within the 8urisdiction of the
/abor Arbiter and the ./-C# even though a
caim for damages might be asserted as an
incident to such caim%
)t must be noted that a wor!erIs oss of
earning ca$acit( and bac!isting are not to be
equated with wages# overtime com$ensation or
se$aration $a(# and other abor bene,ts that
are genera( cogni'ed in abor dis$utes% The
oss of earning ca$acit( is a reief or caim
resuting from a quasi deict or a simiar cause
within the ream of civi aw% LCaims for
damages under $aragra$h A of Artice 34B
must have a reasonabe causa connection with
an( of the caims $rovided for in the artice in
order to be cogni'abe b( the abor arbiter%
2n( if there is such a connection with the other
caims can the caim for damages be
considered as arising from em$o(er0em$o(ee
reations%M )n the $resent case# $etitionerIs
caim for damages is not reated to an( other
caim under Artice 34B# other abor statutes# or
coective bargaining agreements%
(3) Petitioner cannot anchor her caim
for damages to Artice 4C4 of the /abor Code#
which does not grant or s$ecif( a caim or reief%
This $rovision is on( a safet( and heath
standard the enforcement of which rests with
the abor secretar(% Thus# caims for an
em$o(erIs vioation thereof are be(ond the
8urisdiction of the abor arbiter% )n other words#
$etitioner cannot enforce the abor standard
$rovided for in Artice 4C4 b( suing for
damages before the abor arbiter%
)t is not the ./-C but the reguar courts
that have 8urisdiction over actions for damages#
in which the em$o(er0em$o(ee reation is
mere( incidenta# and in which the cause of
action $roceeds from a di@erent source of
obigation such as a tort%

Since $etitionerIs
caim for damages is $redicated on a quasi
deict or tort that has no reasonabe causa
connection with an( of the caims $rovided for
in Artice 34B# other abor statutes# or coective
bargaining agreements# 8urisdiction over the
action ies with the reguar courts 00 not with
the ./-C or the abor arbiters%
NOTES* SConditions for the a$$ication of
Lreasonabe causa connectionM rue (Caims for
damages under $aragra$h A of Artice 34B
must have a reasonabe causa connection with
an( of the caims $rovided for in the artice in
order to be cogni'abe b( the abor arbiter%)
4) the dis$ute arose from an em$o(er0
em$o(ee reation
3) the dis$ute can be resoved b(
reference to the /abor Code
SA wor!erIs oss of earning ca$acit( and
bac!isting are not to be equated with wages#
overtime com$ensation or se$aration $a(# and
other abor bene,ts that are genera( cogni'ed
in abor dis$utes% The oss of earning ca$acit(
is a reief or caim resuting from a quasi deict
or a simiar cause within the ream of civi aw%
DOCTRINE* As a rue# abor arbiters and the
.ationa /abor -eations Commission have no
$ower or authorit( to grant reiefs from caims
that do not arise from em$o(er0em$o(ee
reations% The( have no 8urisdiction over torts
that have no reasonabe causa connection to
an( of the caims $rovided for in the /abor
Code# other abor statutes# or coective
bargaining agreements%
U,$.H 1o%5 vs $'20.o/' 525 s1%'
566 N2007O
F'13s*
Sometime in A$ri 455E# "andioa was
em$o(ed b( U0")9 to insta furniture for its
customers% 2n 43 A$ri 455B# "andioa and two
other U0")9 em$o(ees were invoved in a
vehicuar accident on their wa( to "aguio#
where the( were assigned b( U0")9 to insta
furniture for an e>hibit% As a resut of the
accident# "andioa sustained a fracture on his
eft eg%
"andioa and his co0em$o(ees were
initia( brought to the -osario &istrict Jos$ita%
The ne>t da(# 4A A$ri 455B# the( were
transferred to the Phii$$ine 2rtho$edic
Jos$ita (2rtho$edic)% After his bro!en eg was
cemented# "andioa was advised to go bac! for
further medica treatment% U0")9 $aid for the
medica e>$enses incurred in both hos$itas%
"andioa caims that he as!ed U0")9 for
,nancia assistance but that the atter refused%
Je attached the recei$ts# issued b( +edica
Center ParaYaque (+CP) and &r% Ceestino
+usngi# for medica e>$enses with a tota
amount of PB#BA3%ED% Je aso attached a co$(
of the -oentgenoogica -e$ort b( a -adioogist
in +CP%

"andioa added that he $aid for other
medica e>$enses for which no recei$ts were
issued%
B3
2n Se$tember 4556# "andioa ,ed a
Com$aint before the /abor Arbiter# where he
aeged under$a(ment of saar(? non0$a(ment
of overtime $a(? $remium $a( for wor!
$erformed on hoida(s and rest da(s?
se$aration $a(? service incentive eave $a(?
43th month $a(? and the $a(ment of actua#
mora and e>em$ar( damages% The /abor
Arbiter ordered in its &ecision that res$ondent
$a( the com$ainantF Saar( &i@erentia#
Service incentive and 43
th
+onth $a( whie
dismissing a other caims%
"andioa ,ed an a$$ea before the
./-C% The ./-C amended the &ecision
rendered b( the /abor Arbiter% )t rued that U0
")9 shoud reimburse "andioa the amount of
P43#BA3%ED for the medica e>$enses he
incurred in connection with his fractured eg% )t
further rued that U0")9 is iabe to $a( "andioa
P3E#DDD%DD in mora damages and P3E#DDD%DD
in e>em$ar( damages for refusing to
reimburse "andioa for the medica e>$enses
he incurred after it faied to re$ort to the Socia
Securit( S(stem (SSS) the in8uries sustained b(
"andioa% Thereafter# U0")9 ,ed a +otion for
-econsideration# which was denied b( the
./-C%
2n a$$ea# the Court of A$$eas
modi,ed the ./-C -esoution% )t a<rmed
"andioa1s entitement to reimbursement of his
medica e>$enses# but reduced the amount to
PB#BA3%ED# the amount of actua damages he
was abe to $rove% )t aso a<rmed without
modi,cation the award of mora and e>em$ar(
damages# and the monetar( award granted b(
the /abor Arbiter%
Iss&#*
=hether or not the Jonorabe Court of
A$$eas erred in ordering $etitioner U0"i> to
reimburse res$ondent "andioa for the
aeged medica e>$enses when there was no
evidence submitted b( res$ondent in
su$$ort thereof%
SC R&/.29*
The $etition is without merit% Contrar( to
the arguments $ut forward b( U0")9# it is iabe
to reimburse "andioa the amount of PB#BA3%ED
for medica e>$enses because its faiure to
com$( with its dut( to record and re$ort
"andioa1s in8ur( to the SSS $recuded "andioa
from ma!ing an( caims% +oreover# U0")9# b( its
own admission# reimbursed its other em$o(ees
who were invoved in the same accident for
their medica e>$enses%
Cear(# the reimbursement of medica
e>$enses for in8uries incurred in the course of
em$o(ment is $art of the bene,ts en8o(ed b(
U0")91s em$o(ees% The on( 8usti,cation for its
refusa to reimburse "andioa was that he
intended to defraud the com$an( b( $resenting
s$urious recei$ts amounting to PB#BA3%ED that
were aeged( issued four months before their
$resentation%
A-T% 3DE -HC2-& 2F &HATJ 2-
&)SA")/)TN
(a) A em$o(ers sha !ee$ a
ogboo! to record chronoogica( the
sic!ness# in8ur( or death of their
em$o(ees# setting forth therein their
names# dates and $aces of the
contingenc(# nature of the contingenc(
and absences% Hntries in the ogboo!
sha be made within ,ve da(s from
notice or !nowedge of the occurrence
of contingenc(% =ithin ,ve da(s after
entr( in the ogboo!# the em$o(er sha
re$ort to the S(stem on( those
contingencies he deems to be wor!0
connected%
(b) A entries in the em$o(ers
ogboo! sha be made b( the em$o(er
or an( of his authori'ed o<cia after
veri,cation of the contingencies or the
em$o(ees absences for a $eriod of a
da( or more% U$on request b( the
S(stem# the em$o(er sha furnish the
necessar( certi,cate regarding
information about an( contingenc(
a$$earing in the ogboo!# citing the
entr( number# $age number and date%
Such ogboo! sha be made avaiabe
for ins$ection to the du( authori'ed
re$resentatives of the S(stem%
A-T 3DC% .2T)CH 2F S)CT.HSS# ).*U-N
2- &HATJ
.otice of sic!ness# in8ur( or death sha
be given to the em$o(er b( the em$o(ee or
b( his de$endents or an(bod( on his behaf
within ,ve da(s from the occurrence of the
contingenc(% .o notice to the em$o(er sha be
required if the contingenc( is !nown to the
em$o(er or his agents or re$resentatives%
As a genera rue# the in8ured em$o(ee
must notif( his em$o(er# who is obigated to
enter the notice in a ogboo! within ,ve da(s
after noti,cation% =ithin ,ve da(s after ma!ing
the entr(# the em$o(er of a $rivate com$an(
re$orts the wor!0reated sic!ness or in8ur( to
the SSS% The caim is forwarded to the SSS#
which decides on the vaidit( of the caim%
=hen the SSS denies the caim# the denia ma(
be a$$eaed to the Hm$o(ees1 Com$ensation
Commission (HCC) within 3D da(s%
Jowever# the aw $rovides an e>ce$tion
to the rue requiring an em$o(ee to notif( his
or her em$o(er of his in8uries% Under Section "
of HCC "oard -esoution .o% 343B# issued on E
August 4563# notice of in8ur(# sic!ness or death
of the em$o(ee need not be given to the
em$o(er in an( of the foowing situationsF (4)
=hen the em$o(ee su@ers the contingenc(
within the em$o(er1s $remises? (3) =hen the
em$o(ee o<cia( ,es an a$$ication for eave
of absence b( reason of the contingenc( from
which he su@ers? (3) =hen the em$o(er
$rovides medica services andGor medica
su$$ies to the em$o(ee who su@ers from the
contingenc(? and (A) =hen the em$o(er can
be reasonab( $resumed to have had
!nowedge of the em$o(ee1s contingenc(# in
view of the foowing circumstancesF
(A%4) The em$o(ee was $erforming an o<cia
function for the em$o(er when the
contingenc( occurred? (A%3) The em$o(ee1s
contingenc( has been $ubici'ed through mass
media outets? or (A%3) The s$eci,c
circumstances of the occurrence of the
contingenc( have been such that the em$o(er
can be reasonab( $resumed to have readi(
!nown it soon thereafter? or (A%A) An( other
circumstances that ma( give rise to a
reasonabe $resum$tion that the em$o(er has
been aware of the contingenc(%
BA
)n the $resent case# there is no dis$ute
that "andioa1s eg in8ur( was sustained in the
course of his em$o(ment with U0")9% At the
time of the accident# "andioa was on the wa(
to "aguio# where he was ordered b( U0")9 to
insta furniture for an e>hibit% +oreover# U0")9
was aware that "andioa# as we as his other
co0em$o(ees# were in8ured during the
accident% U0")9 admitted to $roviding "andioa
and his co0em$o(ees with medica assistance
and it even sent its re$resentative# -e( -e(nes#
to -osario &istrict Jos$ita# where the( were
con,ned# and had them transferred to the
2rtho$edic% U0")9 was aso aware that the
2rtho$edic instructed "andioa to return for
further medica treatment% )t is im$icit that
"andioa needed further treatment for his
bro!en eg and was# thus# inca$acitated to
wor!%
Given the foregoing circumstances# U0
")9 had the ega obigation to record $ertinent
information in connection with the in8uries
sustained b( "andioa in its ogboo! within ,ve
da(s after it had !nown about the in8uries? and
to re$ort the same to the SSS within ,ve da(s
after it was recorded in the ogboo!# in
accordance with Artices 3DE and 3DC of the
/abor Code% Jad U0")9 $erformed its awfu
duties# the SSS# or the HCC on a$$ea# coud
have $ro$er( considered whether or not
"andioa was entited to reimbursement for his
medica e>$enses# as we as disabiit( bene,ts
whie he was unabe to wor!% Jowever# U0")9
did not $resent an( evidence showing that it
had com$ied with these ega requirements% )t
had not even re$ied to "andioa1s aegations
in his Position Pa$er# dated 43 A$ri 4556# that
its em$o(ees were not even members of the
SSS%
"( faiing to re$ort "andioa1s in8ur( to
the SSS# U0")9 disregarded the aw and its
$ur$ose? that is# to $rovide a $ro$er and
$rom$t settement of his caims% )nstead# U0")9
arrogated u$on itsef the dut( of determining
which medica e>$enses are $ro$er for
reimbursement% )n doing so# it coud
unnecessari( dea( and un8usti,ab( refuse to
reimburse "andioa for medica e>$enses even
if the( were adequate( su$$orted b( recei$ts#
as was done in this instance% The e>$ense and
dea( undergone b( "andioa since 455B in
obtaining reimbursement for his medica
e>$enses of PB#BA3%ED ver( cear( defeat the
$ur$ose of the aw%
The instant Petition is denied%
o1#'2 $&./0#%s 1o2s3%&13.o2 vs s5s.
1&$'1&$ GR. )5066, A5%./ )", 20))
2n A$ri 43# 3D44# the Su$reme Court
issued its ruing in the case of 2cean "uiders
Construction Cor$% andGor &ennis Jao vs%
S$ouses Antonio and Anicia Cubacub% *ustice
Conchita Car$io0+oraes $enned the ma8orit(
decision% Athough the decision was rendered
b( the Su$reme Court from the coo comforts of
its "aguio Cit( summer sanctuar(# *ustice /ucas
"ersamin o$ted to turn u$ the heat as soe
dissenter%
2cean "uiders# of which $etitioner
&ennis Jao was genera manager# em$o(ed
"adimir Cubacub as a maintenance man% 2n
A$ri 5# 455E# "adimir fe i to chic!en $o> as
a resut of which Jao advised him to rest for
three da(s# which "adimir $rom$t( did at the
com$an(Is barrac!s% Three da(s ater#
according to the $onente# "adimir $roceeded
with his usua chores of manning the gate of
the com$an( $remises and even ceaned
com$an( vehices%
A$$arent( sti not feeing we# he
as!ed a co0wor!er to accom$an( him to his
house in the $rovince of Tarac% U$on being
informed of this request# Jao gave "adimir
P4#DDD%DD and instructed "adimirIs co0wor!er
to instead bring "adimir to the nearest
hos$ita% Thus# on A$ri 43# 455E# "adimir was
ta!en to the Ca(biga Communit( Jos$ita# a
$rimar(0care hos$ita around one !iometer
awa( from the o<ce of the com$an(# and in
which "adimir was con,ned%
At the request and suggestion of the
attending $h(sician# "adimirIs $arents#
res$ondent s$ouses Antonio and Anicia
Cubacub# together with a friend# &r% Jermes
Frias# arrived at the hos$ita the foowing da(
and transferred "adimir to the Oue'on Cit(
Genera Jos$ita (OCGJ) where he was $aced
in the intensive care unit% "adimir died the
foowing da(# A$ri 4A# 455E%
The death certi,cate issued b( the
OCGJ recorded "adimirIs immediate cause of
death as cardio0res$irator( arrest and the
antecedent cause as $neumonia% 2n the other
hand# the death certi,cate issued b( &r% Frias
recorded the causes of death as cardiac arrest#
muti$e organ s(stem faiure# se$ticaemia and
chic!en $o>%
Around four months after "adimirIs
death# his $arents ,ed a tort action for
damages before the -egiona Tria Court of
Tarac aeging that Jao was guit( of
negigence which resuted in the deterioration
of "adimirIs condition eading to eventua his
death%
The Tarac -TC dismissed the com$aint#
hoding that Jao was not under an( obigation
to bring "adimir to better tertiar( hos$itas and
assuming that "adimir died of chic!en $o>
aggravated b( $neumonia or some other
com$ications due to ac! of adequate faciities
at the hos$ita# the same cannot be attributed
to Jao%
2n a$$ea# the Court of A$$eas#
reversed the tria courtIs decision# hoding that
Jao vioated Artice 4C4 of the /abor Code b(
faiing to bring "adimir to a better0equi$$ed
hos$ita% The Court of A$$eas further rued that
Jao shoud have foreseen that "adimir# an
adut# coud su@er com$ications from chic!en
$o> and# had he been brought to hos$itas i!e
St% /u!eIs# Ca$ito +edica Center# Phii$$ine
Genera Jos$ita and the i!e# "adimir coud
have been saved%
See!ing reief from the Su$reme Court#
2cean "uiders and Jao asserted that Jao
e>ercised the diigence more than the degree of
BE
diigence the aw requires and thus are not
iabe for damages%
S$ea!ing for the ma8orit(# *ustice
Car$io0+oraes noted that to successfu(
$rosecute an action anchored on torts# the
foowing eements must be $resentF (4) dut(
(3) breach (3) in8ur( and $ro>imate causation%
=hie the Su$reme Court noted that the Court
of A$$eas hed that it was the dut( of
$etitioners to $rovide adequate medica
assistance to the em$o(ees under Artice 4C4
of the /abor CodeF
A-T% 4C4% Assistance of em$o(er% U )t sha be
the dut( of an( em$o(er to $rovide a the
necessar( assistance to ensure the adequate
and immediate medica and denta attendance
and treatment to an in8ured or sic! em$o(ee in
case of emergenc(%
the )m$ementing -ues of the /abor
Code do not enighten what the $hrase
Ladequate and immediateM medica attendance
means in reation to an Lemergenc(%M
According(# *ustice Car$io0+oraes stated that
Lit woud thus a$$ear that the determination of
what it means is eft to the em$o(er# e>ce$t
when a fu0time registered nurse or $h(sician
are avaiabe on0site as required# aso under
Section 4EB of the /abor Code%M
)n the view of the Jigh Court# JaoIs
advice for "adimir to# as he did# ta!e a three0
da( rest and to ater have him brought to the
nearest hos$ita constituted Ladequate and
immediate medicaM attendance that he is
mandated# under Artice 4C4# to $rovide to a
sic! em$o(ee in an emergenc(%
*ustice Car$io0+oraes adds# LQcRhic!en
$o> is sef0imiting% Jao does not a$$ear to
have a medica bac!ground% Je ma( not be
thus e>$ected to have !nown that "adimir
needed to be brought to a hos$ita with better
faciities than the Ca(biga Jos$ita# contrar( to
a$$eate courtIs ruing%M
)n an( case# the ma8orit( hed that Jao
cannot be considered as the $ro>imate cause
of the death of "adimir% LPro>imate cause is
that which# in natura and continuous
sequence# unbro!en b( an e<cient intervening
cause# $roduces in8ur(# and without which# the
resut woud not have occurred% An in8ur( or
damage is $ro>imate( caused b( an act or
faiure to act# whenever it a$$ears from the
evidence in the case that the act or omission
$a(ed a substantia $art in bringing about or
actua( causing the in8ur( or damage# and that
the in8ur( or damage was either a direct resut
or a reasonab( $robabe consequence of the
act or omission%M
Therefore# based on the reevant facts#
the Su$reme Court found 2cean "uiders and
Jao not to have been negigent and thus
reversed the Court of A$$eas%
)n his 0.ss#23.29 o5.2.o2# *ustice
/ucas "ersamin ta!es the view that the
$etitioners shoud be hed iabe for damages#
as the Court of A$$eas rued# essentia(
because "adimir Ldied from the com$ications
of chic!en $o> after his em$o(ers forced him
to continue on the 8ob des$ite his a`iction that#
in the ,rst $ace# he had contracted in the
wor!$ace from a co0em$o(ee% To Q*ustice
"ersaminR# his death was wrongfu b( reason of
the em$o(ersI faiureF (a) to isoate the co0
wor!er to $revent the s$read of chic!en $o>?
(b) to $rovide to him the ega( mandated ,rst
aid treatment? and (c) to e>tend adequate
medica and other assistance for his a`iction
with chic!en $o> and the e>$ected
com$ications of the a`iction (i!e etting him
o@ from wor! in order to have com$ete rest)%M
The dissenter cites the factua records of
the case as convincing( estabishing that Jao
had faied to e>ercise the degree of care and
vigiance required under the circumstances%
For one thing# *ustice "ersamin notes
that the $etitioners had vioated Artice 4EB of
the /abor Code for not having the required
medica $ersonne or faciities% Q2n this $oint#
the ma8orit( o$inion stated that there is no
aegation on the number of em$o(ees or state
of the com$an(Is $remises on which to reach a
determination as to that a$$icabiit( of Artice
4EB to the $etitioners%R
As such# "adimir received no ,rst aid
treatment from the time he contracted chic!en
$o> unti the da( he was rushed to the
communit( hos$ita% +oreover# "adimir was
not aowed to have bed rest# considering that
Jao instead required him to continue on the 8ob
des$ite his a`iction% The dissent aso $oints
out that "adimir was not aowed to rest in his
$arentsI home in Tarac because Jao was due
to eave for Jong!ong for the Jo( =ee! brea!%
)n addition# the em$o(ee barrac!s were
unsuitabe for em$o(ees with inesses%
Concuded *ustice "ersamin# LJaoIs
utter ac! of concern and soicitude for the
wefare of "adimir not on( contravened the
etter and s$irit of the /abor Code but aso
manifested a caous disregard of "adimirIs
wea!ened condition%M
+IGRANT <ORKER=S ACT AND
OVERSEAS FILIPINO ACT OF
)5 7 RECRUIT+ENT AND
PLACE+ENT
JSS I20o14.2' Co%5o%'3.o2 vs. G#%'%0o R.
F#%%#%, #3 '/.
Q G%-% .o% 4EC364 2ctober 4A# 3DDER
F'13s*
Petitioner hired the res$ondents as
construction wor!ers for its Taiwan0based
$rinci$a em$o(er Sr Formosa Pastics Cor$%
(FPC)% Pursuant to the $artiesI contracts of
em$o(ment# each res$ondent woud receive
month( saar( of .TP4E#3CD% Their
em$o(ment covered a $eriod of 4 (ear of from
+a( 4# 455B to +a( 4# 4556%
As schedued# res$ondents# aong with
other Fii$ino contract wor!ers# were de$o(ed
to Taiwan% "ut u$on their arriva# on( 3D
wor!ers# e>cuding res$ondents# were
em$o(ed as construction wor!ers at FPC%
Aggrieved# the( were assisted b( the o<cias of
+ania Hconomic Cutura 2<ce who directed
BC
them to sign a<davits aeging that the( were
assigned# not as construction wor!ers for FPC#
but as cabe tra( ) $i$e tracts wor!ers at Shin
Twan Hnter$rises Co%# /td% The( were then
re$atriated to the Phii$$ines%
Thus# res$ondents ,ed a com$aint for
iega dismissed# $a(ment of saaries# refund
of $acement fee# damages and attorne(Is fees
with the 2<ce of the /abor Arbiter against *SS
)ndochina Cor$%
SC R&/.29*
The decision to resign from their
em$o(ment were made b( force of
circumstances not attributabe to their own
faut# and it was not their faut that the( were
eft out from among those wor!ers who were
considered for em$o(ment b( the foreign
em$o(er% Hvident(# $etitioner is guit( for
breach of contract because u$on arriva of
res$ondents at the 8obsite# there was no
em$o(er on hand# which then made
res$ondents to decide to go home to the
Phii$$ines% Therefore# the termination of
res$ondentIs services is# undoubted(# without
8ust or vaid cause% Consequent(# the
res$ondents are entited to an amount
re$resenting their 3 months saaries
considering that their em$o(ment contract has
a term of e>act( 4 (ear# $us a fu refused of
their $acement fee with interest at 43V $er
annum%
Such award is in accordance to Section
4D of -A 6DA3# otherwise !nown as the +igrant
=or!ers and 2verseas Fii$inos Act# which
$rovidesF
LSHCT)2. 4D% +one( caims%0>>>
>>>
)n case of termination of
overseas em$o(ment without 8ust# vaid or
authori'ed cause as de,ned b( aw or contract#
the wor!er sha be entited to the fu
reimbursement of his $acement fee with 43V
interest $er annum# $us his saaries for the
une>$ired $ortion of his em$o(ment contract
or for 3 months for ever( (ear of the une>$ired
term# whichever is ess%
P#o5/# o: 34# P4./.55.2#s vs. C'53.
F/o%#21.o O. G's'1'o
QG%-% .o% 4C6AAE .ovember 44# 3DDER
F'13s*
A$$eant was the Crewing +anager of
Great Hastern Shi$$ing Agenc( )nc%# a icensed
oca manning agenc(# whie his ne$hew and
co0accused# *ose Gasacao# was the President%
As the crewing manager# Ca$t% Gasacao1s
duties incuded receiving 8ob a$$ications#
interviewing the a$$icants and informing them
of the agenc(1s requirement of $a(ment of
$erformance or cash bond $rior to de$o(ment%
2n August A# 3DDD# Ca$t% Gasacao and *ose
Gasacao were charged with /arge Scae )ega
-ecruitment de,ned under Section C#
$aragra$hs (a)# () and (m) of -e$ubic Act (-A)
.o% 6DA3 or the +igrant =or!ers and 2verseas
Fii$inos Act of 455E# and $enai'ed under
Section B(b) of the same aw# before the -TC of
Oue'on Cit(% 2n( Ca$t% Gasacao was arrested
whie *ose Gasacao remained at arge% =hen
arraigned# a$$eant $eaded not guit( to the
o@ense charged% Thereafter# tria on the merits
ensued% 2n +arch E# 3DD4# the -TC of Oue'on
Cit(# rendered its *oint &ecision convicting
a$$eant of /arge Scae )ega -ecruitment%
Iss&#*
=hether or not Ca$t% Gasacao was
guit( be(ond reasonabe doubt of the
crime of arge scae iega recruitment
SC R&/.29*
-A .o% 6DA3 de,nes iega recruitment
as foowsF
))% )//HGA/ -HC-U)T+H.T
Sec% C% &HF).)T)2.S% U For $ur$oses of this Act#
iega recruitment sha mean an( act of
canvassing# enisting# contracting# trans$orting#
utii'ing# hiring# $rocuring wor!ers and incudes
referring# contract services# $romising or
advertising for em$o(ment abroad# whether
for $ro,t or not# when underta!en b( a non0
icensee or non0hoder of authorit(
contem$ated under Artice 43(f) of Pd AA3# as
amendedF Provided# that such non0icensee or
non0hoder who# in an( manner# o@ers or
$romises for a fee em$o(ment abroad to two
or more $ersons sha be deemed so engaged%
)t sha i!ewise incude the foowing acts#
whether committed b( an( $ersons# whether a
non0icensee# non0hoder# icensee or hoder of
authorit(%
(a) To charge or acce$t direct( or
indirect( an( amount greater than the
s$eci,ed in the schedue of aowabe
fees $rescribed b( the Secretar( of
/abor and Hm$o(ment# or to ma!e a
wor!er $a( an( amount greater than
that actua( received b( him as a oan
or advance?
>>> >>> >>>
() Faiure to actua( de$o( without
vaid reason as determined b( the
&e$artment of /abor and Hm$o(ment?
and
(m) Faiure to reimburse e>$enses
incurred b( the wor!ers in connection
with his documentation and $rocessing
for $ur$oses of de$o(ment# in cases
where the de$o(ment does not actua(
ta!e $ace without the wor!er1s faut%
)ega recruitment when committed b( a
s(ndicate or in arge scae sha be
considered as o@ense invoving
economic sabotage% )ega recruitment
is deemed committed b( a s(ndicate
carried out b( a grou$ of 3 or more
$ersons cons$iring or confederating
with one another% )t is deemed
committed in arge scae if committed
against 3 or more $ersons individua(
or as a grou$% A icense is a document
issued b( the &2/H authori'ing a $erson
or entit( to o$erate a $rivate
em$o(ment agenc(# whie an authorit(
is a document issued b( the &2/H
authori'ing a $erson or association to
engage in recruitment and $acement
activities as a $rivate recruitment entit(%
Jowever# it a$$ears that even icensees
or hoders of authorit( can be hed iabe
for iega recruitment shoud the(
commit an( of the above0enumerated
acts%
Thus# it is inconsequentia that a$$eant
committed arge scae iega
BB
recruitment whie Great Hastern
Shi$$ing Agenc(# )nc% was hoding a
vaid authorit(% =e thus ,nd that the
court beow committed no reversibe
error in not a$$reciating that the
manning agenc( was a hoder of a vaid
authorit( when a$$eant recruited the
$rivate com$ainants% There is no merit
in a$$eant1s contention that he coud
not be hed iabe for iega recruitment
since he was a mere em$o(ee of the
manning agenc(# $ursuant to Section C
of -A .o% 6DA3 which $rovidesF The
$ersons crimina( iabe for the above
o@enses are the $rinci$as# accom$ices
and accessories% )n case of 8uridica
$ersons# the o<cers having contro#
management or direction of their
business sha be iabe%
Contrar( to Ca$t% Gasacao1s caim# he is
not a mere em$o(ee of the manning agenc(
but the crewing manager% As such# he receives
8ob a$$ications# interviews a$$icants and
informs them of the agenc(1s requirement of
$a(ment of $erformance or cash bond $rior to
the a$$icant1s de$o(ment% As the crewing
manager# he was at the forefront of the
com$an(1s recruitment activities% The foregoing
testimonies of the $rivate com$ainantscear(
estabished that Gasacao is not a mere
em$o(ee of Great Hastern Shi$$ing Agenc(
)nc% As the crewing manager# it was a$$eant
who made re$resentations with the $rivate
com$ainants that he can secure overseas
em$o(ment for them u$on $a(ment of the
cash bond% )t is we setted that to $rove iega
recruitment# it must be shown that a$$eant
gave com$ainants the distinct im$ression that
he had the $ower or abiit( to send
com$ainants abroad for wor! such that the
atter were convinced to $art with their mone(
in order to be em$o(ed% A$$eant1s act of
$romising the $rivate com$ainants that the(
wi be de$o(ed abroad within three months
after the( have $aid the cash bond cear(
shows that he is engaged in iega recruitment%
Hven assuming that Ca$t% Gasacao was
a mere em$o(ee# such fact is not a shied
against his conviction for arge scae iega
recruitment% Cear(# the acts of Ca$t% Gasacao
vis0a0vis the $rivate com$ainants# either as the
crewing manager of Great Hastern Shi$$ing
Agenc( )nc% or as a mere em$o(ee of the
same# constitute acts of arge scae iega
recruitment which shoud not be countenanced%
Athough he informed them that it is
o$tiona# he coected cash bonds and $romised
their de$o(ment notwithstanding the
$roscri$tion against its coection under Section
CD of the 2mnibus -ues and -eguations
)m$ementing -%A% .o% 6DA3 which state thatF
SHC% CD% Prohibition on "onds and
&e$osits% U )n no case sha an
em$o(ment agenc( require an( bond or
cash de$osit from the wor!er to
guarantee $erformance under the
contract or hisGher re$atriation% )ega
recruitment is deemed committed in
arge scae if committed against three or
more $ersons individua( or as a grou$%
)n this case# ,ve com$ainants testi,ed
against a$$eant1s acts of iegarecruitment#
thereb( rendering his acts tantamount to
economic sabotage%
+#%1#0.3' A1&R', #3 '/. vs. CA '20 Jo.2
I23#%2'3.o2'/ Co%5. '20Fo% E/.E'$#34
A/'Ro2
QG%-% .o% 4E5633 +a( DE# 3DDCR
F'13s*
Petitioners are Fii$ino overseas wor!ers
de$o(ed b( $rivate res$ondent *oin
)nternationa Cor$oration (*)C)# a icensed
recruitment agenc(# to its $rinci$a# 3& Pre0
Coor Pastic# )nc%# (3&) in Taiwan# -e$ubic of
China# under a uniform(0worded em$o(ment
contract for a $eriod of two (ears% Jerein
$rivate res$ondent Hi'abeth AaYon is the
$resident of *oin )nternationa Cor$oration%
After their $a$ers were $rocessed# $etitioners
caimed the( signed a uniform(0worded
em$o(ment contract with $rivate res$ondents
which sti$uated that the( were to wor! as
machine o$erators with a month( saar( of
.TP4E#6AD%DD# e>cusive of overtime# for a
$eriod of two (ears% 2n &ecember 5# 4555#
with 46 other contract wor!ers the( eft for
Taiwan% U$on arriving at the 8ob site# a factor(
owned b( 3&# the( were made to sign another
contract which stated that their saar( was on(
.TP44#6AD%DD% The( were i!ewise informed
that the dormitor( which woud serve as their
iving quarters was sti under construction%
The( were requested to tem$orari( bear with
the inconvenience but were assured that their
dormitor( woud be com$eted in a short time
The $etitioners averred that on &ecember 4C#
4555# due to unbearabe wor!ing conditions#
the( were constrained to inform management
that the( were eaving% The( boo!ed a Kight
home# at their own e>$ense% "efore the( eft#
the( were made to sign a written waiver% )n
addition# $etitioners were not $aid an( saar(
for wor! rendered on &ecember 4404E# 4555%
Iss&#*
=hether $etitioners were iega(
dismissed under -e$% Act .o% 6DA3# thus
entiting them to bene,ts $us damages%
SC R&/.29*
As we have hed $revious(# constructive
dismissa covers the invountar( resignation
resorted to when continued em$o(ment
becomes im$ossibe# unreasonabe or uni!e(?
when there is a demotion in ran! or a
diminution in $a(? or when a cear
discrimination# insensibiit( or disdain b( an
em$o(er becomes unbearabe to an em$o(ee%
)n this case# the a$$eate court found
that $etitioners did not den( that the
accommodations were not as home( as
e>$ected% )n the $etitionersI memorandum#
the( admitted that the( were tod b( the
$rinci$a# u$on their arriva# that the dormitor(
was sti under construction and were requested
to bear with the tem$orar( inconvenience and
the dormitor( woud soon be ,nished% =e
i!ewise note that $etitioners did not refute
$rivate res$ondentsI assertion that the( had
de$o(ed a$$ro>imate( si>t( other wor!ers to
their $rinci$a# and to the best of their
!nowedge# no other wor!er assigned to the
same $rinci$a has resigned# much ess# ,ed a
case for iega dismissa%
B6
To our mind these cited circumstances
do not reKect maice b( $rivate res$ondents
nor do the( show the $rinci$aIs intention to
sub8ect $etitioners to unheath(
accommodations% Under these facts# we cannot
rue that there was constructive dismissa%
As.'2 I23#%2'3.o2'/ +'25o>#% S#%v.1#s,
I21. NAI+SO vs. CA '20 A2.1#3' L'1#%2'
Q G%-% .o% 4C5CE3 2ctober D5# 3DDCR
F'13s*
Private res$ondent /acerna aeges the
facts of the case beingF That she was hired b(
Pro>( +aid Services Centre (hereinafter
referred to as Pro>() thru $etitioner A)+S# a
recruitment entit( in the Phii$$ines? That on
Februar( 4D# 3DDD# she signed an em$o(ment
contract as a domestic he$er of /ow See Ting#
who ater on canceed the same sometime in
+arch 3DDD? That subsequent to the
canceation of the contract# /acerna# with the
assurance of a new em$o(er from A)+S#
$roceeded to Jong!ong# and that u$on her
arriva# she was fetched b( Tan Tmin Shwe /in
Charmain# her new em$o(er? That on +a( 3#
3DDD# she was dismissed b( Charmain on the
ground of Ldi<cut( in communicationM? That
on +a( 3D# 3DDD# she was transferred b( Pro>(
to Tam Ching0(ee# &onna# who ater on
dismissed her without stating the reason(s)
thereof? Pro>( neither gave her an e>$anation
regarding this? That on *u( 4# 3DDD# she agreed
to ta!e a three0da( tria $eriod with another
em$o(er# &ais( /ee? that before she coud sign
her contract with &ais( /ee# she was denied of
her request for change of em$o(er b( the
Jong!ong government and was advised
instead to submit a fresh a$$ication with her
countr( of domicie% That u$on her return to the
Phii$$ines# she was informed b( A)+S that
&ais( /ee was no onger interested in hiring
her? and# That u$on !nowing this# she
demanded the return of her $acement fee but
was denied? Jence# this instant case of iega
dismissa%
Petitioner A)+S on the other hand#
aeges the facts to beF That /acerna resigned
after wor!ing for E da(s as a domestic wor!er
for /ow See Ting# as evidenced b( her
resignation etter? That Pro>( $aid her wages
and return tic!et to the Phii$$ines# but
res$ondent refused to be re$atriated? That
thereafter# Pro>( assisted her to be em$o(ed
b( Charmain# who subsequent( dismissed her
for di<cut( in communication? and#
That the Jong!ong government
$ermitted her an e>tension of her sta( in
Jong!ong# but that this was her ast chance%
-es$ondent argued that her ,rst
em$o(er was Chairman# and not /ow See Ting#
as she never got the chance to wor! for the
atter% She aso contend that the signature on
the resignation and on the recei$t of $a(ment
was not hers# nor was the handwriting% 2n *une
36# 3DD4# the /abor Arbiter rued in favor of
$etitioner A)+S# stating that /acerna was not
iega( dismissed as shown b( her resignation
etter% Jowever# this decision was ater on
reversed b( the Court of A$$eas due to the
ac! of 8ust or authori'ed cause to 8ustif(
/acernaIs dismissa% The court aso rued that
A)+S is soidari( iabe with Pro>(# as $rovided
b( Sec% 4D of -A 6DA3# stating that the iabiit(
of the $rinci$a em$o(er and the recruitment
agenc( sha not be a@ected b( an(
substitution# amendment or modi,cation of the
contract of em$o(ment%
Iss&#*
=as /acerna iega( dismissed; )f (es#
ma( A)+S be hed iabe for the monetar(
caims of /acerna;
SC R&/.29*
The Jigh Court rues in the a<rmative
for both questions%
(4) There is no dis$ute that the ast
em$o(er of /acerna was &onna and not &ais(
/ee because the Jong Tong government
directed her re$atriation before she coud sign
her contract with the atter% )n dismissing her#
&onna gave no reason for her termination%
.either did Pro>( e>$ain the ground for her
dismissa% And where there is no showing of a
cear# vaid# and ega cause for the termination#
the aw considers the matter# a case of iega
dismissa%5 )n termination cases invoving
Fii$ino wor!ers recruited for overseas
em$o(ment# the burden of $roving 8ust or
authori'ed cause for termination rests with the
foreign based em$o(erG$rinci$a and the oca
based entit( which recruited the wor!er both
being soidari( iabe for iabiities arising from
the iega dismissa of the wor!er% )n this case#
the Court of A$$eas correct( decared
/acernabs termination iega since no reason
was given to 8ustif( her termination
The em$o(ment contract signed b(
/acerna# as a$$roved b( the P2HA# reveas that
Pro>( was her designated $rinci$a em$o(er%
Since A)+S was the oca agenc( res$onsibe for
the recruitment of domestic he$ers# such as
/acerna# for Pro>(# it is soidari( iabe with the
atter for iabiities arising from her iega
dismissa% To absove A)+S from iabiit( woud
run in contravention to the avowed $oic( of
the state to $rotect the abor sector% The Court
sa(s that Lthe 8oint and soidar( iabiit(
im$osed b( aw against recruitment agencies
and foreign em$o(ers is meant to assure the
aggrieved wor!er of immediate and su<cient
$a(ment of what is due him%M
(3) As for the monetar( caims# the
Su$reme Court cited Section 4D of -%A% .o%
6DA3# which $rovides thatF The iabiit( of the
$rinci$aGem$o(er and the
recruitmentG$acement agenc( for an( and a
caims under this section sha be 8oint and
severa% This $rovision sha be incor$orated in
the contract for overseas em$o(ment and sha
be a condition $recedent for its a$$rova% The
$erformance bond to be ,ed b( the
recruitmentG$acement agenc(# as $rovided b(
aw# sha be answerabe for a mone( caims or
damages that ma( be awarded to the wor!ers%
)f the recruitmentG$acement agenc( is a
8uridica being# the cor$orate o<cers and
directors and $artners as the case ma( be#
sha themseves be 8oint( and soidari( iabe
with the cor$oration or $artnershi$ for the
aforesaid caims and damages%
Such iabiities sha continue during the
entire $eriod or duration of the em$o(ment
contract and sha not be a@ected b( an(
substitution# amendment or modi,cation made
oca( or in a foreign countr( of the said
contract%
B5
)n case of termination of overseas
em$o(ment without 8ust# vaid or authori'ed
cause as de,ned b( aw or contract# the wor!er
sha be entited to the fu reimbursement of
his $acement fee with interest at tweve
$ercent (43V) $er annum# $us his saaries for
the une>$ired $ortion of the em$o(ment
contract or for three (3) months for ever( (ear
of the une>$ired term# whichever is ess%
As such# /acerna is entited to the fu
reimbursement of her $acement fee with
interest ate 43V $er annum# $us saaries for
the une>$ired $ortion of her em$o(ment
contract# or for 3 months for ever( (ear of the
une>$ired term# whichever is ess% "ut the
award for mora and e>em$ar( damages
cannot be credited in as much as /acerna faied
to $rove that A)+S and Pro>( are guit( of bad
faith%
Co%'Eo2 C. S.- vs. NLRC '20 ED&.3'$/#
PCI,C'2K
Q G%-% .2% 4EB3BC 2ctober D3# 3DDBR
F'13s*
Cora'on Sim ($etitioner) ,ed a case for
iega dismissa with the /abor Arbiter# aeging
that she was initia( em$o(ed b( Hquitabe
PC)0"an! (res$ondent) in 455D as )taian
-emittance +ar!eting Consutant to the
Fran!furt -e$resentative 2<ce% Hventua(#
she was $romoted to +anager $osition# unti
Se$tember 4555# when she received a etter
from -emegio &avid 00 the Senior 2<cer#
Huro$ean Jead of PC)"an!# and +anaging
&irector of PC)"0 Huro$e 00 informing her that
she was being dismissed due to oss of trust
and con,dence based on aeged
mismanagement and misa$$ro$riation of
funds%
Iss&#*
=hether or not the /abor Arbiter has
8urisdiction over the case%
SC R&/.29*
The rue is that the Court is bound b(
the ,ndings of facts of the /abor Arbiter or the
./-C# uness it is shown that grave abuse of
discretion or ac! or e>cess of 8urisdiction has
been committed b( said quasi08udicia bodies%
The Court wi not deviate from said doctrine
without an( cear showing that the ,ndings of
the /abor Arbiter# as a<rmed b( the ./-C# are
bereft of su<cient substantiation%
The Court notes $a$abe error in the
/abor Arbiter1s dis$osition of the case# which
was a<rmed b( the ./-C# with regard to the
issue on 8urisdiction% )t was wrong for the /abor
Arbiter to rue that Labor reations s(stem in
the Phii$$ines has no e>tra0territoria
8urisdiction%
Artice 34B of the /abor Code $rovides
for the 8urisdiction of the /abor Arbiter and the
.ationa /abor -eations Commission# vi=%F
A-T% 34B% *urisdiction of
/abor Arbiters and the
Commission% U (a) H>ce$t as
otherwise $rovided under this
Code the /abor Arbiters sha
have origina and e>cusive
8urisdiction to hear and decide#
within thirt( (3D) caendar da(s
after the submission of the case
b( the $arties for decision
without e>tension# even in the
absence of stenogra$hic notes#
the foowing cases invoving a
wor!ers# whether agricutura or
non0agricuturaF (4) Unfair abor
$ractice cases? (3) Termination
dis$utes? (3) )f accom$anied
with a caim for reinstatement#
those cases that wor!ers ma( ,e
invoving wage# rates of $a(#
hours of wor! and other terms
and conditions of em$o(ment?
(A) Caims for actua# mora#
e>em$ar( and other forms of
damages arising from the
em$o(er0em$o(ee reations? (E)
Cases arising from an( vioation
of Artice 3CA of this Code#
incuding questions invoving the
egait( of stri!es and oc!outs?
and (C) H>ce$t caims for
Hm$o(ees Com$ensation# Socia
Securit(# +edicare and maternit(
bene,ts# a other caims# arising
from em$o(er0em$o(ee
reations# incuding those of
$ersons in domestic or househod
service# invoving an amount of
e>ceeding ,ve thousand $esos
(PE#DDD%DD) regardess of
whether accom$anied with a
caim for reinstatement%
(b) The commission sha have
e>cusive a$$eate 8urisdiction
over a cases decided b( /abor
Arbiters%
+oreover# Section 4D of -e$ubic Act
(-%A%) .o% 6DA3# or the +igrant =or!ers and
2verseas Fii$inos Act of 455E# $rovidesF
SHCT)2. 4D% Mone, Claims* Z
.otwithstanding an( $rovision of
aw to the contrar(# the /abor
Arbiters of the .ationa /abor
-eations Commission (./-C)
sha have the origina and
e>cusive 8urisdiction to hear and
decide# within ninet( (5D)
caendar da(s after the ,ing of
the com$aint# the caims arising
out of an em$o(er0em$o(ee
reationshi$ or b( virtue of an(
aw or contract invoving Fii$ino
wor!ers for overseas de$o(ment
incuding caims for actua#
mora# e>em$ar( and other
forms of damages%
Aso# Section C3 of the 2mnibus -ues
and -eguations )m$ementing -%A% .o% 6DA3
$rovides that the /abor Arbiters of the ./-C
sha have the origina and e>cusive 8urisdiction
to hear and decide a caims arising out of
em$o(er0em$o(ee reationshi$ or b( virtue of
an( aw or contract invoving Fii$ino wor!ers
for overseas de$o(ment incuding caims for
actua# mora# e>em$ar( and other forms of
damages# sub8ect to the rues and $rocedures
of the ./-C%
Under these $rovisions# it is cear that
abor arbiters have origina and e>cusive
8urisdiction over caims arising from em$o(er0
em$o(ee reations# incuding termination
dis$utes invoving a wor!ers# among whom
are overseas Fii$ino wor!ers% )n 2!ilippine
6D
National Ban0 v* Cabansa"# the Court
$ronouncedF > > > 8!et!er emplo,ed locall, or
overseas, all 6ilipino #or0ers en<o, t!e
protective mantle o+ 2!ilippine labor and social
le"islation, contract stipulations to t!e contrar,
not#it!standin"* This $ronouncement is in
!ee$ing with the basic $ubic $oic( of the State
to a@ord $rotection to abor# $romote fu
em$o(ment# ensure equa wor! o$$ortunities
regardess of se># race or creed# and reguate
the reations between wor!ers and em$o(ers%
For the State assures the basic rights of a
wor!ers to sef0organi'ation# coective
bargaining# securit( of tenure# and 8ust and
humane conditions of wor! QArtice 3 of the
/abor Code of the Phii$$ines? %ee also Section
46# Artice )) and Section 3# Artice 9)))# 456B
ConstitutionR% This ruing is i!ewise rendered
im$erative b( Artice 4B of the Civi Code which
states that aws Lwhich have for their ob8ect
$ubic order# $ubic $oic( and good customs
sha not be rendered ine@ective b( aws or
8udgments $romugated# or b( determination or
conventions agreed u$on in a foreign countr(%M
C'4.' S4.55.29 S#%v.1#s, I21. vs. R#(2'/0o
C4&'
QG%-% .o% 4C345E A$ri D6# 3DD6R
F'13s*
Private res$ondent -e(nado Chua was
hired b( the $etitioner shi$$ing com$an(#
"ahia Shi$$ing Services# )nc%# as a restaurant
waiter on board a u>ur( cruise shi$ iner +GS
"ac! =atch $ursuant to a Phii$$ine 2verseas
Hm$o(ment Administration (P2HA) a$$roved
em$o(ment contract dated 2ctober 5# 455C
for a $eriod of nine (5) months from 2ctober
46# 455C to *u( 4B# 455B% 2n 2ctober 46# 455C#
the $rivate res$ondent eft +ania for
Jeathrow# Hngand to board the said sea vesse
where he wi be assigned to wor!%
2n Februar( 4E# 455B# the $rivate
res$ondent re$orted for his wor!ing station one
and one0haf hours ate% 2n Februar( 4B# 455B#
the master of the vesse served to the $rivate
res$ondent an o<cia warning0termination form
$ertaining to the said incident% 2n +arch 6#
455B# the vesse1s master# shi$ ca$tain Thor
Feten conducted an inquisitoria hearing to
investigate the said incident% Thereafter# on
+arch 5# 455B# $rivate res$ondent was
dismissed from the service on the strength of
an unsigned and undated notice of dismissa%
An aeged record or minutes of the said
investigation was attached to the said dismissa
notice%
2n +arch 3A# 455B# the $rivate
res$ondent ,ed a com$aint for iega
dismissa and other monetar( caims# which
case was assigned to /abor Arbiter +anue +%
+anansaa%
Iss&#s*
4% =hether or not res$ondent is entited to
overtime $a( which was incor$orated in
his award for the une>$ired $ortion of
the contract des$ite the fact that he did
not render overtime wor!? and
3% =hether or not it is $ro$er for the ./-C
to award mone( caims des$ite the fact
that the ./-C decision# and a<rmed b(
the Court of A$$eas# did not state
cear( the facts and the evidence u$on
which such concusions are based%
SC R&/.29*
)t being setted that the dismissa of
res$ondent was iega# it foows that the atter
is entited to $a(ment of his saar( for the
une>$ired $ortion of his contract# as $rovided
under -e$ubic Act (-%A%) .o% 6DA3# considering
that his em$o(ment was $re0terminated on
+arch 5# 455B or four months $rior to the
e>$iration of his em$o(ment contract on *u(
4B# 455B%
Jowever# the /A imited the award to an
amount equivaent to res$ondent1s saar( for
three months% The ./-C a<rmed said award
but deducted therefrom his saar( for one da(
as $enat( for the tardiness incurred% The CA
a<rmed the one0da( saar( deduction im$osed
b( the ./-C but removed the three months 0
saar( ca$ im$osed b( the /A% )n e@ect# as this
$articuar monetar( award now stands# it is to
be com$uted based on the saar( of res$ondent
covering the $eriod +arch 5# 455B to *u( 4B#
455B# ess his saar( for one da(%
Petitioner questions the CA for ifting the
three0month saar( ca$# $ointing out that the
/A and ./-C decisions which im$osed the ca$
can no onger be atered as said decisions were
not questioned b( res$ondent%
)ndeed# a $art( who has faied to a$$ea
from a 8udgment is deemed to have acquiesced
to it and can no onger obtain from the
a$$eate court an( a<rmative reief other that
what was aread( granted under said 8udgment%
Jowever# when strict adherence to such
technica rue wi im$air a substantive right#
such as that of an iega( dismissed em$o(ee
to monetar( com$ensation as $rovided b( aw#
then equit( dictates that the Court set aside
the rue to $ave the wa( for a fu and 8ust
ad8udication of the case%
The Court has consistent( a$$ied the
foregoing e>ce$tion to the genera rue% )t does
so (et again in the $resent case%
Section 4D of -%A% .o% 6DA3# entites an
overseas wor!er who has been iega(
dismissed to 7his saaries for the une>$ired
$ortion of the em$o(ment contract or for three
(3) months for ever( (ear of the une>$ired
term# whichever is ess%7
The CA correct( a$$ied the
inter$retation of the Court in Marsaman
Mannin" ."enc,, Inc* v* National Labor
Relations Commission that the second o$tion
which im$oses a three months b saar( ca$
a$$ies on( when the term of the overseas
contract is ,>ed at one (ear or onger?
otherwise# the ,rst o$tion a$$ies in that the
overseas wor!er sha be entited $a(ment of
a his saaries for the entire une>$ired $eriod of
his contract%
)n %0ippers 2aci3c, Inc* v* Mira#wherein
the overseas contract invoved was on( for si>
months# the Court hed that it is the ,rst o$tion
$rovided under Section 4D of -%A% .o% 6DA3
which is a$$icabe in that the overseas wor!er
who was iega( dismissed is entited to
$a(ment of a his saaries covering the entire
une>$ired $eriod of his contract% The CA
committed no error in adhering to the
$revaiing inter$retation of Section 4D of -%A%
.o% 6DA3%
Fina(# the Court comes to the ast issue
on whether in the com$utation of the foregoing
award# res$ondent1s 7guaranteed overtime7
64
$a( amounting to USP45B%DD $er month shoud
be incuded as $art of his saar(% Petitioner
contends that there is no factua or ega basis
for the incusion of said amount because# after
res$ondent1s re$atriation# he coud not have
rendered an( overtime wor!%
This time# $etitioner1s contention is we0
ta!en%
The Court had occasion to rue on a
simiar issue in %tolt$Nielsen Marine %ervices
(2!ils*), Inc* v* National Labor Relations
Commission#

where the ./-C was questioned
for awarding to an iega( dismissed overseas
wor!er ,>ed overtime $a( equivaent to the
une>$ired $ortion of the atter1s contract% )n
resoving the question# the Court# citing
Ca"ampan v* National Labor Relations
Commission#

hed that athough an overseas
em$o(ment contract ma( guarantee the right
to overtime $a(# entitement to such bene,t
must ,rst be estabished# otherwise the same
cannot be aowed%
Jence# it being im$robabe that
res$ondent rendered overtime wor! during the
une>$ired term of his contract# the incusion of
his 7guaranteed overtime7 $a( into his month(
saar( as basis in the com$utation of his
saaries for the entire une>$ired $eriod of his
contract has no factua or ega basis and the
same shoud have been disaowed%
+'%1.'2o L. +'s'291'( vs. T%'2s,G/o$'/
+'%.3.-# A9#21(, I21. '20 V#232o%
N'v.9'3.o2, I21.
QG% -% .o% 4B36DD 2ctober 4B# 3DD6R
F'13s*
2n Se$tember 3# 3DD3# +arciano
+asangca( was hired b( :entnor (a foreign
com$an( based in /iberia and engaged in
maritime commerce)# through its manning
agent# Trans0Goba (a cor$oration organi'ed
and e>isting under Phii$$ine aws)# as an oier
on +GT Hastern *ewe# an oi tan!er% Jis
em$o(ment was to run for a $eriod of seven
(B) months% Je was to receive# inter aia# a
basic month( saar( of USPAAE%DD% =hie on
board +GT Hastern *ewe# +arciano +asangca(
noticed a Lreddish discooration of his urine
u$on micturation (urination)% +asangca( was
brought to the Fu8airah Jos$ita# Fu8airah#
United Arab Hmirates# because of ower
abdomina $ain and eft oin $ain of ten (4D)
da(s duration with di<cut( in urinating% Je
was advised surger( but o$ted to be
re$atriated bac! to the Phii$$ines% 2n
re$atriation# he was con,ned at +a!ati +edica
Center on 2ctober 6# 3DD3 where he underwent
HS=/# eft% 2n &ecember 4B033# 3DD3# he was
con,ned at .ationa Tidne( )nstitute and he
underwent right ureteroithotom(
&r% dea Cru' $ronounced +asangca( ,t
to resume wor! as a his aborator(
e>aminations showed norma resuts%
According(# on 3D *anuar( 3DD3# Trans0GobaIs
designated $h(sician# &r% "arrientos of the
Associated +edica W Cinica Services# )nc%#
decared +asangca( ,t to go bac! to wor! after
a reguar medica e>amination and $egged the
disabiit( $eriod of the atter to be from 3
2ctober 3DD3 unti 3 Februar( 3DD3%
Trans0Goba# in behaf of :entnor# $aid
+asangca( his fu 43D da(s Sic! /eave $a( of
.inet( Five Thousand Five Jundred Si>t( Four
and E3G4DD (P5E#ECA%E3) Pesos re$resenting
2ne Thousand Seven Jundred Sevent( .ine
&oars and CDG4DD (USP4#BB5%CD) U%S% &oars#
as we as a his medica and hos$ita
e>$enses# $rofessiona fees of his attending
$h(sicians# the tota amount of which reached
2ne Jundred Sevent( Four Thousand Sevent(
Five and 4DG4DD (P4BA#DBE%4D) Pesos%
+asangca( was as!ed to re$ort bac! to
the o<ce of Trans0Goba for de$o(ment ine0
u$% Je was aso as!ed to undergo medica
e>amination in view of his im$ending
de$o(ment% Je was informed b( the Port
Ca$tain that he can no onger be de$o(ed due
to negative re$orts about him coming from its
$rinci$a# :entnor%
+ore than si> months ater# armed with
a +edica Certi,cate issued b( one &r% Hfren -%
:icado (&r% :icado)# a cardioogist# +asangca(
instituted a com$aint against Trans0Goba and
:entnor# incuding Trans0GobaIs President#
+ichae Hstanie# before the .ationa /abor
-eations Commission (./-C) for the $a(ment
of disabiit( bene,t# damages and attorne(Is
fees%
&r% :icado 8usti,ed the ,nding of
)m$ediment Grade ))) (B6%3CV) in this wiseF
+asangca( is now un,t to resume wor! as
seaman in an( ca$acit(% Jis iness is
considered wor! aggravated% Je needs reguar
monitoring of his rena function for
deterioration and $ossibe recurrence of !idne(
stones% Jis right !idne( is non0functioning and
his eft !idne( has im$aired function% ThereIs
a i!eihood that he woud need dia(sis in the
future% Je cannot and a gainfu em$o(ment
given his medica bac!ground%
+asangca( is caiming that his disabiit(
was contracted during the term of his Contract
of Hm$o(ment # therefore caiming bene,t
under Section 3D(b)# $aragra$h E of the
Phii$$ine 2verseas Hm$o(ment
Administration (P2HA) -evised Standard Terms
and Conditions Governing the Hm$o(ment of
Fii$ino Seafarers on "oard 2cean0Going
:esses# as amended b( +emorandum Circuar
.o% EE# Series of 455C# which is deemed
integrated in ever( contract of em$o(ment of
Fii$ino seafarers on ocean0going vesses%
Trans0Goba# :entnor# and Hstanie#
countered that +asangca( had fu( recovered
and was $ronounced ,t for em$o(ment# his
caim for disabiit( bene,ts has no basisM ?the
right to com$ensation for disabiit( arises on(
when it is shown that the seafarer is disabed
on account of an iness or in8ur( su@ered whie
in the em$o( of his em$o(erM%
4E A$ri 3DDA# /abor Arbiter &ais( G%
Cauton0"arceona found +asangca(Is
com$aint meritorious and ordered Trans0
Goba# :entnor# and Hstanie to $a( +asangca(
the amount of Thirt( .ine Thousand 2ne
Jundred Hight( U%S% &oars (USP35#46D%DD)
re$resenting the atterIs disabiit( bene,t at
)m$ediment Grade ))) (B6%3CV)% /abor arbiter
o$ined that the com$ensabiit( of an aiment
does not de$end on whether or not the in8ur(
or disease was $re0e>isting at the time of
em$o(ment# but rather# if the in8ur( or disease
was reated to or was aggravated b(
+asangca(Is wor!% The abor arbiter gave
great weight to the medica o$inion of &r%
:icado rather than that of Trans0GobaIs
designated $h(sicians considering that
63
Lres$ondentsI accredited doctorsI o$inion has
(sic) more than meets the e(e and shoud not
be ta!en at face vaue% For most often than not#
the( are $a$ab( sef0serving and bias (sic) in
favor of the em$o(er and certain( cannot be
considered inde$endent%M
Trans0Goba and :entnor ,ed an
origina action for certiorari before the Court of
A$$eas im$uting grave abuse of discretion
amounting to ac! or e>cess of 8urisdiction on
the ./-C for a<rming the decision of the abor
arbiter%
2n 4D Februar( 3DDC# the a$$eate
court granted the $etition for certiorari of
Trans0Goba and :entnor% )t nui,ed and set
aside the chaenged -esoutions of the ./-C
for having been issued in grave abuse of
discretion amounting to ac! or e>cess of
8urisdiction# considering that the caimant was
aread( fu (sic) $aid the bene,ts to which he
was awfu( entited to%
The Court of A$$eas reasoned in its
decision that# the /abor Arbiter# the ./-C
arbitrari( set aside the fact that +asangca(
was $recuded from an( entitement to
disabiit( bene,ts after he was aread( fu(
recovered and decared to be ,t for
em$o(ment b( the com$an(0designated
$h(sician% The right to com$ensation for
disabiit( arises on( when the seafarer has
been disabed on account of his iness or in8ur(
that he su@ered whie in the em$o( of his
em$o(er? otherwise# gross in8ustice woud
resut to the $etitioners%
The ./-C coud not sim$( swee$ awa(
the o$inions of &r% "arrientos and &r% Agustin#
as we s that of &r% dea Cru'# b( generai'ing
that com$an(0designated or com$an(0referred
$h(sicians were often biased in favor of the
com$an( and that their o$inions were sef0
serving without s$eci,ca( indicating how their
s$eci,c ,ndings were biased and wh( such
o$inions were sef0serving% The generai'ation
was# at the ver( east# most unfair to &r%
Agustin and &r% dea Cru'# s$eciaists in uroog(
that covered the aiment of +asangca(% The
arbitrariness and ca$riciousness became even
more batant in the face of the fact that such
com$an(0designated or com$an(0referred
$h(sicians had themseves $ersona( attended
to# e>amined and treated +asangca( in a
$rofessiona ca$acit(% Thereb(# their ,ndings
and concusions were far from s$ecuation and
con8ecture%
Iss&#*
=hether or not +arciano +asangca( can
ega( demand and caim disabiit( bene,ts
from Trans0 Goba and :entnor for an iness
that became a$$arent during his contract of
em$o(ment with the shi$$ing com$an(%
SC R&/.29*
As set forth in Sec% 3D(b) of the P2HA
Standard Hm$o(ment Contract# the em$o(er0
vesse ownerG$rinci$a sha be iabe for
disabiit( bene,ts to the seafarer on( in case
the atter was decared disabed b( the
com$an( designated $h(sician in view of a
wor!0reated iness or in8ur( that he su@ered
onboard the vesse% Since $etitioner0seafarer
was decared F)T T2 =2-T b( the com$an(
designated $h(sician# cear( then he is not
entited to disabiit( bene,ts under the P2HA
Standard Hm$o(ment Contract%M As with a
other !inds of wor!er# the terms and conditions
of a seafarerIs em$o(ment is governed b( the
$rovisions of the contract he signs at the time
he is hired%
Considering that +asangca( was em$o(ed on
3 Se$tember 3DD3# it is the 3DDD P2HA
Amended Standard Terms and Conditions
Governing the Hm$o(ment of Fii$ino Seafarers
on "oard 2cean0Going :esses that is
considered a$$ended in his contract of
em$o(ment and is controing for $ur$oses of
resoving the issue at hand and not the 455C
P2HA -evised Amended Standard Terms and
Conditions Governing the Hm$o(ment of
Fii$ino Seafarers on "oard 2cean0Going
:esses as auded to b( +asangca(%
Under Sec% 3D(b)# $aragra$h C# of the
3DDD P2HA Amended Standard Terms and
Conditions Governing the Hm$o(ment of
Fii$ino Seafarers on "oard 2cean0Going
:esses# vi'F
SHCT)2. 3D% C2+PH.SAT)2. A.& "H.HF)TS
Seafarer # to be entited to
com$ensation and bene,ts under said
$rovision# it is not su<cient to estabish that
the seafarerIs iness or in8ur( has rendered him
$ermanent( or $artia( disabed# but it must
aso be shown that there is a causa connection
between the seafarerIs iness or in8ur( and the
wor! for which he had been contracted for%
+asangca( must $rove that he is
su@ering from $ermanent tota or $artia
disabiit( due to a wor!0reated iness occurring
during the term of his contract% Proof that he
not on( acquired or contracted his iness
during the term of his em$o(ment contract is
cear( not enough? must aso $resent evidence
that such in,rmit( was wor!0reated# or at the
ver( east aggravated b( the conditions of the
wor! for which he was contracted for% There is
no substantiation that the $rogression of his
aiment was brought about arge( b( the
conditions of his 8ob as an oier% Jis medica
histor( andGor records $rior to his de$o(ment
as an oier in +GT Hastern *ewe were neither
$resented nor auded to in order to
demonstrate that the wor!ing conditions on
board said vesse increased the ris! of
contracting rena faiure# chronic or otherwise%
)t is# therefore# high( im$robabe that
+asangca(Is chronic rena faiure deveo$ed in
8ust a monthIs time# the ength of time he was
on board +GT Hastern *ewe before the
s(m$toms became
+oreover# chronic rena faiure# is
neither isted as a disabiit( under Sec% 33 of
the 3DDD P2HA Amended Standard Terms and
Conditions Governing the Hm$o(ment of
Fii$ino Seafarers on "oard 2cean0Going
:esses? nor an occu$ationa disease under Sec%
330A thereof# which $rovides for the schedue of
disabiit( or im$ediment for in8uries su@ered
and diseases incuding occu$ationa diseases or
iness%
The on( simiarit( between the two
cases# Cr(sta Shi$$ing and the $resent
$etition# is the fact that the seafarers in both
have the same $ersona $h(sician# &r% Hfren -%
:icado# a cardioogist# who decared them
$ermanent( disabed to return to wor!% The
factua circumstances of the Cr(sta Shi$$ing
case are $oes a$art from that attendant to the
case at bar% The seafarer in said case had been
63
em$o(ed as a Chief +ate of an ocean0going
vesse when he com$ained of coughing and
hoarseness and was ater diagnosed with
th(roid cancer%
The com$an(0designated $h(sician and
seafarerIs $h(sician were both in agreement
that the seafarer had been rendered disabed
b( his iness? the( on( di@ered in their
assessments of the degree and the im$ediment
grade of such disabiit( in accordance with the
schedue of disabiit( or im$ediment for in8uries
su@ered and diseases incuding occu$ationa
diseases or iness contracted under Sec% 33 of
the 455C P2HA -evised Standard Terms and
Conditions Governing the Hm$o(ment of
Fii$ino Seafarers on "oard 2cean0Going
:esses%
)n contrast# Trans0Goba and :entnor
are contesting the right of +asangca( to caim
disabiit( bene,ts as the com$an(0designated
$h(sicians have certi,ed the atter ,t to return
to wor!# not to mention the fact that he was not
su@ering from a wor!0reated andGor wor!0
aggravated iness%
A tod# e>ce$t for the bare assertion
that he is no onger ,t to wor! due to the iness
that became manifest during his contract of
em$o(ment with Trans0Goba and :entnor#
+asangca( ma!es no aegation# much ess
$resents no $roof# that the iness was caused
or aggravated b( his em$o(ment%
The evidence on record is tota( bare of
essentia facts on how he contracted or
deveo$ed such disease and on how and wh(
his wor!ing conditions increased the ris! of
contracting the same% Consequent(# the abor
arbiter and the ./-C had no basis at a to rue
that +asangca( is deserving of other disabiit(
bene,ts es$oused b( Sec% 3D(b)# $aragra$h C
of the 3DDD P2HA Amended Standard Terms
and Conditions other than that aread(
e>tended to him b( Trans0Goba and :entnor%
=JH-HF2-H# $remises considered# the instant
$etition is &H.)H& for ac! of merit% The
assaied &ecision dated 4D Februar( 3DDC and
-esoution dated 3D +a( 3DDC both of the
Court of A$$eas in CA0G%-% SP .o% 54353 are
hereb( AFF)-+H&% Costs against $etitioner
+arciano /% +asangca(%
+'9s'(s'( +'%.3.-# Co%5., #3 '/. vs. J'.-#
+. V#/'sD&#E
Q G%-% .o% 4B56D3 .ovember 4A# 3DD6R
FACTS*
*aime +% :easque' (res$ondent) was
hired b( +agsa(sa( +aritime
Cor$oration($etitioner) as second coo! for its
foreign $rinci$a# co0$etitioner 2&F *e ASA%
The $arties had a considerab( ong
em$o(ment histor( covered b( about ten (4D)
em$o(ment contracts wherein :easque'
engaged res$ondentIs services on board
vesses owned b( 2&F *e ASA%
2n *u( 36# 3DD3# on board the vesse
+GT "ow Favour# *aime +% :easque' su@ered
high fever and was unabe to wor!% "( the
fourth da(# his bod( tem$erature reached
AD%5cC% Jis e>tremities were swoen and he
coud not wa!% Je aso had edema in the
abdomina area% -es$ondent was brought to a
hos$ita in Singa$ore where he was con,ned
from August 43 to 2ctober 43# 3DD3%
Thereafter# he was re$atriated to the
Phii$$ines%
)t is from this $oint onwards that the
aegations of the $arties di@er% *aime +%
:easque' aeged that u$on his re$atriation# he
was not con,ned to St% /u!eIs +edica Center
as he e>$ected% Je caimed that he was
com$eed to see! medica treatment from an
inde$endent doctor% 2n .ovember 43# 3DD3#
he consuted a certain &r% Hfren :icado (&r%
:icado) who diagnosed him to be su@ering
from sta$h(ococca bacteremia# muti$e
metastatic abcesses# $eura e@usion and
h($ertension and decared his disabiit( as
)m$ediment Grade 4 (43DV)% &r% :icado
further concuded that res$ondent was Lun,t to
resume wor! as seaman in an( ca$acit(%M
-es$ondent ,ed a caim for disabiit(
bene,ts# iness aowanceG reimbursement of
medica e>$enses# damages and attorne(Is
fees but $etitioners refused to $a(%
Petitioners# on the other hand#
maintained that u$on res$ondentIs re$atriation
on 2ctober 43# 3DD3# he was immediate(
referred to a com$an( designated $h(sician for
further medica care and treatment? that the
initia im$ression was S(stemic Sta$h(ococca
)nfections? -esoving? that he was under the
care of said $h(sician for three (3) months
during which he underwent e>tensive
medications and treatment? that he was
admitted and con,ned at St% /u!eIs +edica
Center from 2ctober 43# 3DD3 to .ovember
44# 3DD3? that $rogress re$orts on his recover(
have been issued? that b( *anuar( E# 3DDA#
res$ondent was decared as Lceared to wor!
resum$tion as seafarerM? and that $etitioners
were the ones who shoudered res$ondentIs
hos$itai'ation e>$enses%
2n +arch 35# 3DDE# the /abor Arbiter
rendered a decision in favor of *aime +%
:easque'# ordering +agsa(sa( +aritime
Cor$oration andGor Conrado .% &ea Cru' and
2&F *e ASA to $a( com$ainant *aime +%
:easque' the amount of S)9TN T=2
TJ2USA.& T=2 JU.&-H& S)9TN US &2//A-S
(USPC3#3CD%DD) or its equivaent in Phii$$ine
Peso at the $revaiing rate of e>change at the
time of actua $a(ment re$resenting his
disabiit( bene,ts and sic!ness aowance and
4DV of the tota monetar( award b( wa( of
attorne(Is fees%
+agsa(sa( +aritime Cor$oration andGor
Conrado .% &ea Cru' and 2&F *e ASA ,ed an
a$$ea with the ./-C# aeging serious errors in
the factua ,ndings of the /abor Arbiter%
./-C made the foowing ,ndingsF
"( wa( of a contrar( medica ,nding#
assai the diagnosis arrived at b( the com$an(
designated $h(sician# &r% .ataio G% Aegre ))%
As noted# the ,ndings of &r% Hfren :icado#
com$ainantIs $rivate $h(sician# and those of
&r% Aegre# bear consistenc( with each other
save for his h($ertensive condition% Above a
these# com$ainantIs credibiit( su@ered a
serious setbac! when he decared that he was
seen b( &r% Aegre on( twice and that there
was no treatment given to him since
re$atriation (-ecords# $$% 66065)% -ecords beie
such assertion% Co$ies of the medica re$orts
accom$ished b( the com$an( accredited
$h(sician woud show that he was e>amined
and treated b( the atter for no ess than eight
(6) times (-ecords# $$% 436043E)%
6A
ISSUE*
=hether or not it is the com$an(
designated $h(sician or a $rivate $h(sician
who shoud determine the disabiit(
grading or ,tness of a seafarer%
SC RULING*
As geaned therefrom# com$ainant
was $aced under the care and su$ervision of
&r% Aegre for about ninet( (5D) da(s# his
admission at St% /u!eIs +edica Center being on
43 2ctober 3DD3 and with his discharge being
had on( on 44 .ovember 3DD3%
./-C rendered a decision reversing that
of the /abor Arbiter and dismissed
res$ondentIs com$aint for ac! of merit% Under
the P2HA Standard Hm$o(ment Contract
(Artice 44E5# Civi Code of the Phii$$ines)%
Court of A$$eas rendered the herein
chaenged &ecision setting aside the decision
of the ./-C and reinstating that of the abor
arbiter% That the com$an(0designated
$h(sician did decare that $etitioner is ,t to sea
dut( shoud not $re8udice $etitionerIs caim for
disabiit( bene,ts% )n the ,rst instance# it is
we to note that there is doubt and question as
to the accurac( of the decaration of the &r%
AegreIs Lceared to wor! resum$tion as
seafarer%M Such certi,cation shoud not be
ta!en as the on( $rimar( consideration#
es$ecia( when there is contra ,nding b(
another doctor giving doubt to the ,ndings of
the com$an(0designated $h(sician%
As hed in the case of =aem +aritime
Services# )nc% vs% ./-C# Lo$inions of $etitionerIs
doctor to this e@ect shoud not be given
evidentiar( weight as the( are $a$ab( sef0
serving and biased in favor of $etitioners# and
certain( coud not be considered
inde$endent%M
Petitioner having substantia(
estabished that he coud not abe to $erform
the same wor! as he used to before his
re$atriation# and was found both b( his
inde$endent $h(sician and Geneages Jos$ita
in Singa$ore su@ering from severe
h($ertension as we as other diagnosed
inesses which were contracted as a resut of
his e>$osure to the ris!s invoved in the
$erformance of his 8ob# we ,nd the ./-C to
have acted in grave abuse of discretion in
reversing and setting aside the decision of the
/abor Arbiter awarding disabiit( caims to
$etitioner%
The P2HA Contract is cear in its
$rovisions when it $rovided who shoud
determine the disabiit( grading or ,tness to
wor! of seafarers% The P2HA contract
recogni'es on( the disabiit( grading $rovided
b( the com$an(0designated $h(sicians%
Section 3D "%3 of the P2HA contract $rovidesF
U$on sign0o@ from the vesse for
medica treatment# the seafarer is entited to
sic!ness aowance equivaent to his basic
wage unti he is decared ,t to wor! or the
degree of $ermanent disabiit( has been
assessed b( the com$an(0designated $h(sician
but in no case sha e>ceed one hundred twent(
(43D) da(s%
For this $ur$ose the seafarer sha
submit himsef to a $ost0em$o(ment medica
e>amination b( a com$an( designated
$h(sician within three wor!ing da(s u$on his
return e>ce$t when he is $h(sica(
inca$acitated to do so# in which case# a written
notice to the agenc( within the same $eriod is
deemed as com$iance% Faiure of the seafarer
to com$( with the mandator( re$orting
requirement sha resort in his forfeiture of the
right to caim the above bene,ts%
+oreover# Section 3D (")# no% 3#
$aragra$h 3 of the P2HA Contract $rovidesF
Jowever# if after the re$atriation the seafarer
sti requires medica attention arising from said
in8ur( or iness# he sha be so $rovided at cost
to the em$o(er unti such time he is decared
,t or the degree of his disabiit( has been
estabished b( the com$an(0designated
$h(sician%
These $rovisions cear( iustrate that
res$ondentIs disabiit( can on( be assessed b(
the com$an(0designated $h(sician% )f the
com$an(0designated $h(sician decares him ,t
to wor!# then the seaman is bound b( such
decaration%
Further# it shoud be noted that the caim for
sic!ness and $ermanent disabiit( bene,ts
arose from the sti$uations in the standard
format contract of em$o(ment $ursuant to a
circuar of the P2HA% Such circuar was
intended for a $arties invoved in the
em$o(ment of Fii$ino seamen on board an(
ocean0going vesse%QCR The P2HA Contract# of
which the $arties are both signatories# is the
aw between them and as such# its $rovisions
bind both of them%QBR Thus# the $arties are
both bound b( the $rovisions of the P2HA
Contract which decares that the degree of
disabiit( or ,tness to wor! of a seafarer shoud
be assessed b( the com$an(0designated
$h(sician%
)n German +arine Agencies v% ./-C# Q6R
the Court e>$icit( aid that it is the com$an(0
designated $h(sician who shoud determine the
degree of disabiit( of the seaman or his ,tness
to wor!# thusF )n order to caim disabiit(
bene,ts under the Standard Hm$o(ment
Contract# it is the Lcom$an(0designatedM
$h(sician who must $rocaim that the seaman
su@ered a $ermanent disabiit(# whether tota
or $artia# due to either in8ur( or iness# during
the term of the atterIs em$o(ment% )t is a
cardina rue in the inter$retation of contracts
that if the terms of a contract are cear and
eave no doubt u$on the intention of the
contracting $arties# the itera meaning of its
sti$uation sha contro% There is no ambiguit(
in the wording of the Standard Hm$o(ment
Contract U the on( quai,cation $rescribed for
the $h(sician entrusted with the tas! of
assessing the seamanIs disabiit( is that he be
Lcom$an(0designated%
Again# in "en8amin /% Sarocam v%
)nterorient +aritime Hnt%# )nc%# and &emaco
United /td# Q5R the Court rued that the o$inion
of the com$an(0designated $h(sician shoud be
u$hed over that of the doctors a$$ointed b(
the seafarer considering that the basis of the
,ndings of the seafarerIs doctor are the
medica ,ndings of the com$an( $h(sician%
Undoubted(# 8uris$rudence is re$ete
with $ronouncements that it is the com$an(0
designated $h(sicianIs ,ndings which shoud
form the basis of an( disabiit( caim of the
seafarer% )n this $articuar case# res$ondent
refused to acce$t the assessment made b( the
com$an(0designated $h(sician that he is ,t to
6E
wor!%
Under the Standard Terms and
Conditions Governing the Hm$o(ment of
Fii$ino Seafarers 2n0"oard 2cean0Going :esse
or the P2HA Contract issued $ursuant to &2/H
&e$artment 2rder .o% A and P2HA
+emorandum Circuar .o% 5# both Series of
3DDD# res$ondent coud not disregard the
,ndings of the com$an(0designated $h(sician%
Section 3D0"# $aragra$h 3 of the P2HA Contract
$rovides%
)t is be(ond cavi that it is the com$an(0
designated $h(sician who is entrusted with the
tas! of assessing the seamanIs disabiit(% "ut
under the aforecited $rovision# when the
seamanIs $rivate $h(sician disagrees with the
assessment of the com$an(0designated
$h(sician# as here# a third doctorIs o$inion ma(
be avaied of in determining his disabiit(% This
however was not resorted to b( the $arties% As
such# the credibiit( of the ,ndings of their
res$ective doctors was $ro$er( evauated b(
the ./-C%
The Court has a$$ied the /abor Code
conce$t of $ermanent tota disabiit( to the
case of seafarers% )n a catena of cases#Q4DR the
Court decared that disabiit( shoud not be
understood more on its medica signi,cance
but on the oss of earning ca$acit(% Permanent
tota disabiit( means disabement of an
em$o(ee to earn wages in the same !ind of
wor!# or wor! of simiar nature that he was
trained for or accustomed to $erform# or an(
!ind of wor! which a $erson of his mentait(
and attainment coud do% )n addition# the Court
in GS)S v% Cadi'Q44R and )8ares v% CAQ43R hed
that $ermanent disabiit( is the inabiit( of a
wor!er to $erform his 8ob for more than 43D
da(s# regardess of whether or not he oses the
use of an( $art of his bod(%
The com$an(0designated $h(sician
ceared res$ondent for wor! resum$tion u$on
,nding that his infection has subsided after
successfu medication% =e agree with the ./-C
that the doctor more quai,ed to assess the
disabiit( grade of the res$ondent seaman is
the doctor who reguar( monitored and treated
him% The com$an(0designated $h(sician
$ossessed $ersona !nowedge of the actua
condition of res$ondent% Since the com$an(0
designated $h(sician in this case deemed the
res$ondent as ,t to wor!# then such decaration
shoud be given credence# considering the
amount of time and e@ort the com$an( doctor
gave to monitoring and treating res$ondentIs
condition% )t is undis$uted that the
recommendation of &r% :icado was based on a
singe medica re$ort which outined the
aeged ,ndings and medica histor( of
res$ondent des$ite the fact that &r% :icado
treated or e>amined res$ondent on( once%
2n the other hand# the com$an(0
designated $h(sician outined the $rogress of
res$ondentIs successfu treatment over a
$eriod of severa months in severa re$orts# as
can be geaned from the record% As between
the ,ndings of the com$an(0designated
$h(sician (&r% Aegre) and the $h(sician
a$$ointed b( res$ondent (&r% :icado)# the
former deserves to be given greater evidentiar(
weight%
A tod# the Court ,nds and so rues that
the CA committed reversibe error in ignoring
the medica assessment of the com$an(0
designated $h(sician that res$ondent was
ceared for wor! resum$tion as a seafarer and
granting res$ondentIs caim for disabiit( on the
basis of a singe medica e>amination re$ort of
res$ondentIs a$$ointed $h(sician contrar( to
the cear# unambiguous $rovisions regarding
disabiit( bene,t caims contained in the P2HA
Contract between the $arties%
=JH-HF2-H# the instant $etition is G-A.TH&%
The assaied decision of the Court of A$$eas in
CA0G%-% SP .o% 5BD56 is -H:H-SH& and SHT
AS)&H% The decision of the ./-C# 3nd &ivision#
is hereb( -H).STATH&% S2 2-&H-H&%
A23o2.o +. S#%%'2o vs. G'//'23 +'%.3.-#
S#%v.1#s, I21. '20 +'%/o> N'v.9'3.o2 Co.,
I21.
QG- .o% 4CBC4A +arch 3A# 3DD5R
F'13s F
Saior Antonio Serrano entered into a
430month overseas em$o(ment contract with
res$ondents Gaant +aritime Services# )nc% and
+arow .avigation Co%# /td%# initia( signing u$
for the $osition of Chief 2<cer% Saior Serrano#
however# was $ersuaded to submit to a
LdowngradedM contract as Second 2<cer# on
the assurance of eventua $romotion to Chief
2<cer b( the end of the foowing month%
Javing wandered around res$ondentsI shi$ for
more than two months without being granted
an( $romotion whatsoever# Lhe refused to sta(
on as Second 2<cer and was re$atriated bac!
to the Phii$$ines#M with sti nine (5) months
and twent(0 three (33) da(s eft unserved%
Saior Serrano afterwards ,ed a com$aint with
the /abor Arbiter# charging res$ondents with
constructive dismissa and demanding that he
be $aid the saar( as corres$onds to the
remaining term of his contract% The Arbiter
rued for him# concuding that there was iega
dismissa? however# Saior Serrano was on(
awarded with saar( equivaent to 3 months%
The Arbiter reied on Section 4D# $arag% E of
-%A% 6DA3 (the +igrant =or!ers and 2verseas
Fii$ino Act of 455E)# which $uts forth thatZ
L)n case of termination of overseas
em$o(ment without 8ust# vaid or authori'ed
cause as de,ned b( aw or contract# the
wor!ers sha be entited to the fu
reimbursement of his $acement fee with
interest of tweve $ercent (43V) $er annum#
$us his saaries for the une>$ired $ortion of his
em$o(ment contract or +or t!ree (') mont!s
+or ever, ,ear o+ t!e une/pired term,
#!ic!ever is lessD%
Gritt(# our man now condemns the
$rovision as unconstitutiona# waiing how it
Lim$airs the terms of their contract# de$rives
them of equa $rotection and denies them due
$rocess%M
SC R&/.29*
Though it sco@ed at the argument that
the aw undu( im$airs their contractZenacted
in 455E# the aw is thus deemed read into the
agreement forged between the $arties in 4556
Z the Court# with straitaced hesitation#
decared the assaied cause Lfor three (3)
months for every year of the unexpired
term !hichever is less" &21o2s3.3&3.o2'/#
in that it did den( wor!ers in simiar situations
6C
($articuar( 2F=s) the right to equa $rotection
and due $rocess%
L^the sub8ect cause creates a sub0
a(er of discrimination among 2F=sSS ^those
who are iega( dismissed with ess than one
(ear eft in their contracts sha be entited to
their saaries for the entire une>$ired $ortion
thereof# whie those who are iega( dismissed
with one (ear or more remaining in their
contracts sha be covered b( the sub8ect
cause# and their monetar( bene,ts imited to
their saaries for three months on(%M
Further magnif(ing the causeIs
incom$atibiit( with the right to equa
$rotection of aws is the fact that it de$rives
overseas wor!ers of a bene,t granted without
e>ce$tion to domestic wor!ers (the right to
recover in cases of iega dismissa the saar(
for the entire une>$ired $ortion of the
contract)# with the government not being abe
to $rove an( com$eing state interest
warranting such damaging discrimination% As a
matter of fact# before the awIs enactment#
both domestic and overseas wor!ers en8o(ed
the same right%
L%%%the sub8ect cause contains a sus$ect
cassi,cation in that# in the com$utation of the
monetar( bene,ts of ,>ed0term em$o(ees
who are iega( discharged# it im$oses a 30
month ca$ on the caim of 2F=s with an
une>$ired $ortion of one (ear or more in their
contracts# but none on the caims of other
2F=s or oca wor!ers with ,>ed0term
em$o(ment% The sub8ect cause singes out
one cassi,cation of 2F=s and burdens it with a
$ecuiar disadvantage%M
"ravo# saior%
C#1-#2 S#%v.1# EH5o%3#% '20 P%o-o3.o2
I21., vs S5o&s#s C&'%#s-', GR Nos.
)6276,7 7 )6!26,, '5%./ 7, 200
FACTSF
2n *anuar( C# 455B# *asmin Cuaresma (*asmin)
was de$o(ed b( "ecmen Service H>$orter and
Promotion# )nc% ("ecmen) to serve as assistant
nurse in A0"ir! Jos$ita in the Tingdom of
Saudi Arabia (TSA)# for a contract duration of
three (ears# with a corres$onding saar( of
USP3AB%DD $er month% 2ver a (ear ater# she
died aeged( of $oisoning% *essie Fa8ardo# a co0
wor!er of *asmin# narrated that on *une 34#
4556# *asmin was found dead b( a femae
ceaner (ing on the Koor inside her dormitor(
room with her mouth foaming and smeing of
$oison%
"ased on the $oice re$ort and the medica
re$ort of the e>amining $h(sician of the A0"ir!
Jos$ita# who conducted an auto$s( of *asminIs
bod(# the i!e( cause of her death was
$oisoning%
*asminIs bod( was re$atriated to +ania on
Se$tember 3# 4556% The foowing da(# the Cit(
Jeath 2<cer of Cabanatuan Cit( conducted an
auto$s( and the resuting medica re$ort
indicated that *asmin died under vioent
circumstances# and not $oisoning as origina(
found b( the TSA e>amining $h(sician% The
to>icoog( re$ort of the .")# however# tested
negative for non0voatie# metaic $oison and
insecticides%
Sim$icio and +ia Cuaresma (the Cuaresmas)#
*asminIs $arents and her surviving heirs#
received from the 2verseas =or!ers =efare
Administration (2==A) the foowing amountsF
PED#DDD%DD for death bene,ts? PED#DDD%DD for
oss of ife? P3D#DDD%DD for funera e>$enses?
and P4D#DDD%DD for medica reimbursement%
2n .ovember 33# 4555# the Cuaresmas ,ed a
com$aint against "ecmen and its $rinci$a in
the TSA# -a8ab W Sisiah Com$an( (-a8ab)#
caiming death and insurance bene,ts# as we
as mora and e>em$ar( damages for *asminIs
death# *asminIs death was wor!0reated# having
occurred at the em$o(erIs $remises? that
under *asminIs contract with "ecmen# she is
entited to Liqama insuranceM coverage? that
*asmin is entited to com$ensator( damages in
the amount of USP4D3#BAD%DD# which is the
sum tota of her month( saar( of USP3AB%DD
$er month under her em$o(ment contract#
muti$ied b( 3E (ears (or the remaining (ears
of her $roductive ife had death not su$ervened
at age 3E# assuming that she ived and woud
have retired at age CD)%
)n their $osition $a$er# "ecmen and -a8ab insist
that *asmin committed suicide# citing a $rior
unsuccessfu suicide attem$t sometime in
+arch or A$ri 4556 and re(ing on the medica
re$ort of the e>amining $h(sician of the A0"ir!
Jos$ita% The( i!ewise den( iabiit( because
the Cuaresmas aread( recovered death and
other bene,ts totaing P43D#DDD%DD from the
2==A% The( insist that the Cuaresmas are not
entited to Liqama insuranceM because this
refers to the LissuanceM U not insurance U of
iqama# or residenc(Gwor! $ermit required in the
TSA% 2n the issue of mora and e>em$ar(
damages# the( caim that the Cuaresmas are
not entited to the same because the( have not
acted with fraud# nor have the( been in bad
faith in handing *asminIs case%
=hie the case was $ending# "ecmen ,ed a
manifestation and motion for substitution
aeging that -a8ab terminated their agenc(
reationshi$ and had a$$ointed =hite Facon
Services# )nc% (=hite Facon) as its new
recruitment agent in the Phii$$ines% Thus#
=hite Facon was im$eaded as res$ondent as
we# and it ado$ted and reiterated "ecmenIs
arguments in the $osition $a$er it subsequent(
,ed%
)SSUHSF
(4%) whether the Cuaresmas are entited to
monetar( caims# b( wa( of bene,ts and
damages# for the death of their daughter
*asmin%
(3) whether or not *asminIs death be
considered as wor!0connected and thus
com$ensabe even whie she was not on dut(?
JH/&F
Artice 45 of the Civi Code $rovides that ever(
$erson must# in the e>ercise of his rights and in
the $erformance of his duties# act with 8ustice#
give ever(one his due# and observe honest(
6B
and good faith% Artice 34 of the Code states
that an( $erson who wifu( causes oss or
in8ur( to another in a manner that is contrar( to
moras# good customs or $ubic $oic( sha
com$ensate the atter for the damage% And#
ast(# Artice 3A requires that in a contractua#
$ro$ert( or other reations# when one of the
$arties is at a disadvantage on account of his
mora de$endence# ignorance# indigence#
menta wea!ness# tender age or other
handica$# the courts must be vigiant for his
$rotection%
Cear(# -a8ab# "ecmen and =hite FaconIs acts
and omissions are against $ubic $oic(
because the( undermine and subvert the
interest and genera wefare of our 2F=s
abroad# who are entited to fu $rotection
under the aw% The( set an awfu e>am$e of
how foreign em$o(ers and recruitment
agencies shoud treat and act with res$ect to
their distressed em$o(ees and wor!ers abroad%
Their shabb( and caous treatment of *asminIs
case? their uncaring attitude? their un8usti,ed
faiure and refusa to assist in the
determination of the true circumstances
surrounding her m(sterious death# and instead
,nding satisfaction in the unreasonabe
insistence that she committed suicide 8ust so
the( can convenient( avoid $ecuniar( iabiit(?
$acing their own cor$orate interests above of
the wefare of their em$o(eeIs U a these are
contrar( to moras# good customs and $ubic
$oic(# and constitute ta!ing advantage of the
$oor em$o(ee and her fami(Is ignorance#
he$essness# indigence and ac! of $ower and
resources to see! the truth and obtain 8ustice
for the death of a oved one%
Giving in handi( to the idea that *asmin
committed suicide# and adamant( insisting on
it 8ust to $rotect -a8ab and "ecmenIs materia
interest U des$ite evidence to the contrar( U is
against the mora aw and runs contrar( to the
good custom of not denouncing oneIs
feowmen for aeged grave wrongdoings that
undermine their good name and honor%
=hether em$o(ed oca( or overseas# a
Fii$ino wor!ers en8o( the $rotective mante of
Phii$$ine abor and socia egisation# contract
sti$uations to the contrar( notwithstanding%
This $ronouncement is in !ee$ing with the
basic $ubic $oic( of the State to a@ord
$rotection to abor# $romote fu em$o(ment#
ensure equa wor! o$$ortunities regardess of
se># race or creed# and reguate the reations
between wor!ers and em$o(ers% This ruing is
i!ewise rendered im$erative b( Artice 4B of
the Civi Code which states that aws which
have for their ob8ect $ubic order# $ubic $oic(
and good customs sha not be rendered
ine@ective b( aws or 8udgments $romugated#
or b( determinations or conventions agreed
u$on in a foreign countr(%
The reations between ca$ita and abor are so
im$ressed with $ubic interest#and neither sha
act o$$ressive( against the other# or im$air
the interest or convenience of the $ubic% )n
case of doubt# a abor egisation and a abor
contracts sha be construed in favor of the
safet( and decent iving for the aborer%
The grant of mora damages to the em$o(ee
b( reason of misconduct on the $art of the
em$o(er is sanctioned b( Artice 3345 (4D) of
the Civi Code# which aows recover( of such
damages in actions referred to in Artice 34%
Thus# in view of the foregoing# the Court hods
that the Cuaresmas are entited to mora
damages# which "ecmen and =hite Facon are
8oint( and soidari( iabe to $a(# together with
e>em$ar( damages for wanton and o$$ressive
behavior# and b( wa( of e>am$e for the $ubic
good%
2n the second issueF
=hie the Lem$o(erIs $remisesM ma( be
de,ned ver( broad( not on( to incude
$remises owned b( it# but aso $remises it
eases# hires# su$$ies or uses# we are not
$re$ared to rue that the dormitor( wherein
*asmin sta(ed shoud constitute em$o(erIs
$remises as woud aow a ,nding that death or
in8ur( therein is considered to have been
incurred or sustained in the course of or arose
out of her em$o(ment% There are certain(
e>ce$tions# but the( do not a$$ear to a$$(
here% +oreover# a com$ete determination
woud have to de$end on the unique
circumstances obtaining and the overa factua
environment of the case# which are here
ac!ing%
=JH-HF2-H# -a8ab W Sisiah Com$an(# =hite
Facon Services# )nc%# "ecmen Service H>$orter
and Promotion# )nc%# and their cor$orate
directors and o<cers are found 8oint( and
soidari( iabe and 2-&H-H& to indemnif( the
heirs of *asmin Cuaresma# s$ouses Sim$icio
and +ia Cuaresma# the foowing amountsF (4)
T=2 +)//)2. F):H JU.&-H& TJ2USA.&
PHS2S (P3#EDD#DDD%DD) as mora damages? (3)
T=2 +)//)2. F):H JU.&-H& TJ2USA.&
PHS2S (P3#EDD#DDD%DD) as e>em$ar( damages?
(3)Attorne(Is fees equivaent to ten $ercent
(4DV) of the tota monetar( award%
P#o5/# o: 34# P4./.55.2#s vs. L'%%(
SL'&%oA Do-.29o
QG- .o% 464ABE A$ri DB# 3DD5
FACTS*
/arr( 7/auro7 &omingo was accused of
the crime of iega recruitment for recruiting
andGor $acing severa wor!ers under oca or
overseas em$o(ment des$ite being a non0
icensee or non0hoder of authorit( from the
&e$artment of /abor and Hm$o(ment% This
o@ense invoved economic sabotage# as it was
committed in arge scae%
)nformations for 33 counts of Hstafa
were aso ,ed# a of which were simiar(
worded but var(ing with res$ect to the name of
each com$ainant and the amount which each
$ur$orted( gave to a$$eant%
2f the 33 com$ainants# on( ,ve
testi,ed% 2ne com$ainant ater recanted his
testimon(% The substance of their res$ective
testimonies state that &omingo deceived the
com$ainants b( assuring them of em$o(ment
abroad $rovided that the( submit certain
documents and $a( the required $acement fee
and that com$ainants $aid a$$eant the
66
amount he as!ed on account of a$$eantIs
re$resentations which turned out to be fase%
"( *oint &ecision dated 2ctober 45#
3DDA# the tria court found a$$eant guit(
be(ond reasonabe doubt of )ega -ecruitment
(/arge Scae) and of 3 counts of Hstafa
The a$$eate court a<rmed the tria
courtIs decision hoding that the
straightforward and consistent testimonies of
the com$aining witnesses su<cient(
su$$orted the tria courtIs concusion that
a$$eant undertoo! recruitment activities
beginning Se$tember u$ to &ecember 4555 in
+aoos# "uacan without the icense therefor#
and faied to de$o( those he recruited%
As for the estafa cases# the a$$eate
court hed that the eements constituting the
crime were su<cient( estabished%
Jence# the $resent a$$ea%
SC RULING*
The a$$ea is bereft of merit%
The term 7recruitment and $acement7 is
de,ned under Artice 43(b) of the /abor Code of
the Phii$$ines as foowsF
(b) 7-ecruitment and $acement7 refers to an(
act of canvassing# enisting# contracting#
trans$orting# utii'ing# hiring# or $rocuring
wor!ers# and incudes referras# contract
services# $romising or advertising for
em$o(ment# oca( or abroad# whether for
$ro,t or not% Provided# That an( $erson or
entit( which# in an( manner# o@ers or $romises
for a fee em$o(ment to two or more $ersons
sha be deemed engaged in recruitment and
$acement% (Hm$hasis su$$ied)
2n the other hand# Artice 36# $aragra$h (a) of
the /abor Code# as amended# under which the
accused stands charged# $rovidesF
Art% 36% )ega -ecruitment% 0 (a) An(
recruitment activities# incuding the $rohibited
$ractices enumerated under Artice 3A of this
Code# to be underta!en b( non0icensees or
non0hoders of authorit( sha be deemed iega
and $unishabe under Artice 35 of this Code%
The +inistr( of /abor and Hm$o(ment or an(
aw enforcement o<cer ma( initiate com$aints
under this Artice%
(b) )ega recruitment when committed b( a
s(ndicate or in arge scae sha be considered
an o@ense invoving economic sabotage and
sha be $enai'ed in accordance with Artice 35
hereof%
)ega recruitment is deemed committed b( a
s(ndicate if carried out b( a grou$ of three (3)
or more $ersons cons$iring andGor
confederating with one another in carr(ing out
an( unawfu or iega transaction# enter$rise or
scheme de,ned under the ,rst $aragra$h
hereof% )ega recruitment is deemed
committed in arge scae if committed against
three (3) or more $ersons individua( or as a
grou$% (Hm$hasis su$$ied)
From the foregoing $rovisions# it is cear that
an( recruitment activities to be underta!en b(
non0icensee or non0hoder of authorit( sha be
deemed iega and $unishabe under Artice 35
of the /abor Code of the Phii$$ines% )ega
recruitment is deemed committed in arge scae
if committed against three (3) or more $ersons
individua( or as a grou$%
To $rove iega recruitment in arge scae# the
$rosecution must $rove three essentia
eements# to witF (4) the $erson charged
undertoo! a recruitment activit( under Artice
43(b) or an( $rohibited $ractice under Artice
3A of the /abor Code? (3) heGshe did not have
the icense or the authorit( to awfu( engage
in the recruitment and $acement of wor!ers?
and (3) heGshe committed the $rohibited
$ractice against three or more $ersons
individua( or as a grou$%B
The Court ,nds that the $rosecution ab(
discharged its onus of $roving the guit be(ond
reasonabe doubt of a$$eant of the crimes
charged%
That no recei$t or document in which a$$eant
ac!nowedged recei$t of mone( for the
$romised 8obs was adduced in evidence does
not free him of iabiit(% For even if at the time
a$$eant was $romising em$o(ment no cash
was given to him# he is sti considered as
having been engaged in recruitment activities#
since Artice 43(b) of the /abor Code states that
the act of recruitment ma( be for $ro,t or not%
)t su<ces that a$$eant $romised or o@ered
em$o(ment for a fee to the com$aining
witnesses to warrant his conviction for iega
recruitment%
That one of the origina com$aining witnesses#
Cabigao# ater recanted# via an a<davit and his
testimon( in o$en court# does not necessari(
cance an earier decaration% /i!e an( other
testimon(# the same is sub8ect to the test of
credibiit( and shoud be received with
caution%6 For a testimon( soemn( given in
court shoud not be set aside ight(# east of a
b( a mere a<davit e>ecuted after the a$se of
considerabe time% )n the case at bar# the
A<davit of -ecantation was e>ecuted three
(ears after the com$aint was ,ed% )t is thus
not unreasonabe to consider his retraction an
afterthought to den( its $robative vaue%
AT A// H:H.TS# the Court ,nds that the
$rosecution evidence consisting of the
testimonies of the four com$ainants# whose
credibiit( has not been im$aired# has not been
overcome%
=JH-HF2-H# the $etition is &H.)H&%
ATCI Ov#%s#'s Co%5. #3. '/., vs E14.2
GR No. )7655), O13. )), 20)0
Fo%#.92 /'>; $&%0#2 o: 5%oo:; 5%o1#ss&'/
5%#s&-53.o2. As to $etitionersI contentions
that Phii$$ine abor aws on $robationar(
em$o(ment are not a$$icabe since it was
e>$ress( $rovided in res$ondentIs
em$o(ment contract# which she vountari(
entered into# that the terms of her engagement
sha be governed b( $revaiing Tuwaiti Civi
Service /aws and -eguations as in fact P2HA
-ues accord res$ect to such rues# customs
and $ractices of the host countr(# the same
was not substantiated% )ndeed# a contract
free( entered into is considered the aw
between the $arties who can estabish
sti$uations# causes# terms and conditions as
the( ma( deem convenient# incuding the aws
which the( wish to govern their res$ective
obigations# as ong as the( are not contrar( to
aw# moras# good customs# $ubic order or
$ubic $oic(% )t is hornboo! $rinci$e# however#
that the $art( invo!ing the a$$ication of a
foreign aw has the burden of $roving the aw#
under the doctrine of $rocessua $resum$tion
which# in this case# $etitioners faied to
65
discharge% The CourtIs ruing in H&)0
Sta@buiders )ntI%# v% ./-C iuminatesF
)n the $resent case# the em$o(ment contract
signed b( Gran s$eci,ca( states that Saudi
/abor /aws wi govern matters not $rovided for
in the contract (e%g% s$eci,c causes for
termination# termination $rocedures# etc%)%
"eing the aw intended b( the $arties (e> oci
intentiones) to a$$( to the contract# Saudi
/abor /aws shoud govern a matters reating
to the termination of the em$o(ment of Gran%
)n internationa aw# the $art( who wants to
have a foreign aw a$$ied to a dis$ute or case
has the burden of $roving the foreign aw% The
foreign aw is treated as a question of fact to be
$ro$er( $eaded and $roved as the 8udge or
abor arbiter cannot ta!e 8udicia notice of a
foreign aw% Je is $resumed to !now on(
domestic or forum aw%
Unfortunate( for $etitioner# it did not $rove the
$ertinent Saudi aws on the matter? thus# the
)nternationa /aw doctrine of $resumed0identit(
a$$roach or $rocessua $resum$tion comes
into $a(% =here a foreign aw is not $eaded or#
even if $eaded# is not $roved# the $resum$tion
is that foreign aw is the same as ours% Thus#
we a$$( Phii$$ine abor aws in determining
the issues $resented before us% (em$hasis and
underscoring su$$ied)
Fo%#.92 /'>; 2o 8&0.1.'/ 2o3.1# o: :o%#.92
/'>. The Phii$$ines does not ta!e 8udicia
notice of foreign aws# hence# the( must not
on( be aeged? the( must be $roven% To $rove
a foreign aw# the $art( invo!ing it must
$resent a co$( thereof and com$( with
Sections 3A and 3E of -ue 433 of the -evised
-ues of Court which readsF
SHC% 3A% Proof of o<cia record% Z The record of
$ubic documents referred to in $aragra$h (a)
of Section 45# when admissibe for an(
$ur$ose# ma( be evidenced b( an o<cia
$ubication thereof or b( a co$( attested b( the
o<cer having the ega custod( of the record#
or b( his de$ut(# and accom$anied# if the
record is not !e$t in the Phii$$ines# with a
certi,cate that such o<cer has the custod(% )f
the o<ce in which the record is !e$t is in a
foreign countr(# the certi,cate ma( be made b(
a secretar( of the embass( or egation# consu
genera# consu# vice consu# or consuar agent
or b( an( o<cer in the foreign service of the
Phii$$ines stationed in the foreign countr( in
which the record is !e$t# and authenticated b(
the sea of his o<ce% (em$hasis su$$ied)
SHC% 3E% =hat attestation of co$( must state%
Z =henever a co$( of a document or record is
attested for the $ur$ose of the evidence# the
attestation must state# in substance# that the
co$( is a correct co$( of the origina# or a
s$eci,c $art thereof# as the case ma( be% The
attestation must be under the o<cia sea of
the attesting o<cer# if there be an(# or if he be
the cer! of a court having a sea# under the
sea of such court%
To $rove the Tuwaiti aw# $etitioners submitted
the foowingF +2A between res$ondent and
the +inistr(# as re$resented b( ATC)# which
$rovides that the em$o(ee is sub8ect to a
$robationar( $eriod of one (4) (ear and that
the host countr(Is Civi Service /aws and
-eguations a$$(? a transated co$( (Arabic to
Hngish) of the termination etter to res$ondent
stating that she did not $ass the $robation
terms# without s$ecif(ing the grounds therefor#
and a transated co$( of the certi,cate of
termination# both of which documents were
certi,ed b( +r% +usta$ha Aawi# Jead of the
&e$artment of Foreign A@airs02<ce of
Consuar A@airs )nsamic Certi,cation and
Transation Unit? and res$ondentIs etter of
reconsideration to the +inistr(# wherein she
noted that in her ,rst eight (6) months of
em$o(ment# she was given a rating of
LH>ceentM abeit it changed due to changes in
her shift of wor! schedue%
These documents# whether ta!en sing( or as a
whoe# do not su<cient( $rove that res$ondent
was vaid( terminated as a $robationar(
em$o(ee under Tuwaiti civi service aws%
)nstead of submitting a co$( of the $ertinent
Tuwaiti abor aws du( authenticated and
transated b( Hmbass( o<cias thereat# as
required under the -ues# what $etitioners
submitted were mere certi,cations attesting
on( to the correctness of the transations of
the +2A and the termination etter which does
not $rove at a that Tuwaiti civi service aws
di@er from Phii$$ine aws and that under such
Tuwaiti aws# res$ondent was vaid(
terminated% Thus the sub8ect certi,cations
readF
> > > >
This is to certif( that the herein attached
transationGs from Arabic to HngishGTagaog and
or vice versa wasGwere $resented to this 2<ce
for review and certi,cation and the same
wasGwere found to be in order% This 2<ce#
however# assumes no res$onsibiit( as to the
contents of the documentGs%
This certi,cation is being issued u$on request
of the interested $art( for whatever ega
$ur$ose it ma( serve% (em$hasis su$$ied)
5D