SUPREME COURT FIRST DIVISION NATIONAL LABOR

UNION, Petitioner, -versus- G.R. No. L-7945 March 23, 1956

BENEDICTO
DINGLASAN,
Respondent.
x--------------------------------------------------x D E C I S I O N
PADILLA, J.: The Petitioner seeks a Review and the Setting
Aside of a Resolution En Banc of the Court of Industrial
Relations adopted on 23 June 1954 which held that there
exists no employer-employee relationship between the
respondent and the driver complainants represented by the
Petitioner and for that reason the Court of Industrial
Relations dismissed the complaint filed by the acting
prosecutor of the Court. The Resolution En Banc complained
of reversed an Order of an Associate Judge of the Court
which declared that there was such relationship of
employer-employee between the respondent and the
complainants represented by the Petitioner. The last
mentioned Order of 16 February 1954 was just interlocutory
but it was set aside by the Resolution of 23 June 1954. The
National Labor Union in representation of the complainants
appealed from said Resolution dismissing its complaint
charging the respondent with the commission of unfair labor
practices. In the Resolution complained of there are no
findings of facts. It merely states that The Court, En Banc,
finds that the said motion for reconsideration is well-taken
and, therefore, it hereby reconsider the Order of February
16, 1954, and thereby declares that there is no employeremployee
relation
between
respondent,
Benedicto
Dinglasan, and the driver-complainants in his case. As a
consequence, the motion to dismiss the complaint dated
October 31, 1953, filed by the Acting Prosecutor of the
Court, is hereby granted. (Annex D.) This Resolution was
adopted upon a motion for reconsideration of the previous
Order of 16 February 1954. As there are no findings of fact
in the Resolution those set forth in the previous Order must
have been relied upon by the Court. They are as follows: (a)

Respondent Dinglasan is the owner and operator of TPU

jeepneys plying between Espaa-Quiapo-Pier and vice
versa. (b) Petitioners are drivers who had verbal contracts
with respondent for the use of the latters jeepneys upon
payment of P7.50 for 10 hours use, otherwise known as the
boundary system. (c) Said drivers did not receive salaries
or wages from Mr. Dinglasan; their days earnings being the
excess over the P7.50 that they paid for the use of the
jeepneys. In the event that they did not earn more,
respondent did not have to pay them anything; (d) Mr.
Dinglasans supervision over the drivers consisted in
inspection of the jeepneys that they took out when they
passed his gasoline station for water, checking the route
prescribed by the Public Service Commission, or whether
any driver was driving recklessly and washing and changing
the tires of jeepneys. (Annex C.) The main question to
determine is whether there exists a relationship of
employer-employee between the drivers of the jeeps and
the owner thereof. The findings contained in the first Order
are not disputed by both parties except the last to which the
respondent took exception. But in the Resolution setting
aside the Order of 16 February 1954 the Court of Industrial
Relations En Banc did not state that such finding is not
supported by evidence. It merely declares that there is no
employer-employee relation between respondent, Benedicto
Dinglasan, and the driver-complainants in this case. If the
findings to which the respondent took exception is
unsupported by the evidence, a pronouncement to that
effect would have been made by the Court En Banc. In the
absence of such pronouncement we are not at liberty to
ignore or disregard said finding. The findings of the Court of
Industrial Relations with respect to question of fact, if
supported by substantial evidence on the record shall be
conclusive.[1] Taking into consideration the findings of fact
made by the Court of Industrial Relations we find it difficult

to uphold the conclusion of the Court set forth in its

Resolution of 23 June 1954. The drivers did not invest a
single centavo in the business and the respondent is the
exclusive owner of the jeeps. The management of the
business is in the respondents hands. For even if the drivers
of the jeeps take material possession of the jeeps, still the
respondent as owner thereof and holder of a certificate of
public convenience is entitled to exercise, as he does and
under the law he must, supervision over the drivers by
seeing to it that they follow the route prescribed by the
Public Service Commission and the rules and regulations
promulgated by it as regards their operation. And when they
pass by the gasoline station of the respondent checking by
his employees on the water tank, oil and tire pressure is
done. The only features that would make the relationship of
lessor and lessee between the respondent and the drivers,
members of the union, as contended by the respondent, are
the fact that he does not pay them any fixed wage but their
compensation is the excess of the total amount of fares
earned or collected by them over and above the amount of
P7.50 which they agreed to pay to the respondent, the
owner of the jeeps, and the fact that the gasoline burned by
the jeeps is for the account of the drivers. These two
features are not, however, sufficient to withdraw the
relationship between them from that of employer-employee,
because the estimated earnings for fares must be over and
above the amount they agreed to pay to the respondent for
a ten-hour shift or ten-hour a day operation of the jeeps. Not
having any interest in the business because they did not
invest anything in the acquisition of the jeeps and did not
participate in the management thereof, their service as
drivers of the jeeps being their only contribution to the
business, the relationship of lessor and lessee cannot be
sustained.[2] In the lease of chattels the lessor loses
complete control over the chattel leased although the lessee

cannot make bad use thereof, for he would be responsible

for damages to the lessor should he do so. In this case there
is a supervision and a sort of control that the owner of the
jeeps exercises over the drivers. It is an attempt by
ingenious scheme to withdraw the relationship between the
owner of the jeeps and the drivers thereof from the
operation of the labor laws enacted to promote industrial
peace. As to the point that the National Labor Union is not
the real party in interest to bring the complaint, suffice it to
say that representative includes a legitimate labor
organization or any officer or agent of such organization,
whether or not employed by the employer or employees
whom he represents.[3] And whenever it is charged by an
offended party or his representative that any person has
engaged or is engaging in any unfair labor practice, the
Court of Industrial Relations must investigate such charge.
[4] Therefore, the objection to the institution of the charge
for unfair labor practice by the National Labor Union is not
well taken. The Order of 23 June 1904 is reversed and set
aside and the case remanded to the Court of Industrial
Relations for such further proceedings as may be required
by law, with costs against the respondent. Paras, C.J.,
Bengzon, Reyes, Bautista Angelo, Labrador, Concepcion,
Reyes, and Endencia, JJ., concur. [1] Section 6, Republic Act
No. 875. [2] In the matter of the Park Floral Company, etc.,
19 NLRB 403; Radley et al. vs. Commonwealth, 161 SW (2d)
417; Jones vs. Goodson et al., 121 Fed. Rep. (2d) 176;
Mitchel vs. Gibbson et al., 172 Fed. Rep. (2d) 970. [3]
Section 6, Republic Act No. 875. [4] Section 5 (b), Republic
Act No. 875.
Dy Keh Beng vs. Intl Labor
FACTS:
A charge of unfair labor practice was fi led against
Dy Keh Beng, a proprietor of a basket factory,

bydismissing Solano and Tudla for their union activities. Dy Keh Beng
contended that he did not know Tudla and Solano was not
his employee because the lattercame to the establishment
only when there was work which he did on pakiaw basis.Dy
Keh Beng countered with a special defense of
simple extortion committed by the head of the
laborunion.
ISSUE:
W/N there existed an employee-employer relation between petitioner
and respondents
HELD:
Yes. Evidence showed that the work of Solano and
Tudla was continuous except in the event of illness,
although their services were compensated on piece basis.
The control test calls for the existence of the right to control
the manner of doing the work, not the actual exercise of
the right considering that Dy Keh Beng is engage din the
manufacture of baskets known as kaing, those working
under Dy would be subject to Dys specifications such as
the size and quality of the kaing. And since the
laborers are done at Dys establishments, it could
beinferred that Dy could easily exercise control upon them.
As to the contention that Solano was not an employee
because he worked on piece basis, the court ruled that it
should be determined that if indeed payment by piece is just
a method of compensation and does not define the essence
of the relation. Payment cannot be construed by piece
where work is done in such establishment so as to put
the worker completely at liberty to turn him out and take it
another at pleasure Justice Perfecto also contended that
pakyaw system is a labor contract between employers and
employees between capitalists and laborers. Wherefore, the
award of back wages is modifi ed to an award of
back wages for 3 years at the rated of compensation
the employees were receiving at the time of dismissal.
Feati University v. Bautista

G.R. No.L-21278

December 27, 1966

Lessons Applicable: Applicability to certain specific persons

Professors in national interest
Laws Applicable:
FACTS:

January 14, 1963: the President of Feati University

Faculty Club (PAFLU) wrote a letter to Mrs. Victoria L.
Araneta, President of Feati University informing her
that it registered as a labor union.

January 22, 1963:

demands

in

PAFLU sent a letter with 26

relation

to

their

employment

and

requesting an answer within 10 days from receipt

thereof.

Araneta answered the letters, requesting that she be

given at least 30 days to study thoroughly the
different phases of the demands. Meanwhile counsel
for Feati, wrote a letter to the President of PAFLU
demanding

proof

of

its

majority

status

and

designation as a bargaining representative

February 1, 1963: the President of PAFLU rejected

the extension of time and filed a notice of strike with
the Bureau of Labor due to Featis refusal to bargain
collectively.

Conciliation Division of the Bureau of Labor made

bond of P50,000 (increased from P1,000), ordering

efforts to conciliate them but failed.

CIR Judge Jose S. Bautista to desist and refrain from

February 18, 1963: PAFLU declared a strike and

further proceeding

established picket lines in the premises of Feati

resulting in the disruption of classes in the University.

certification, Judge Bautista set the case for hearing

March 21, 1963: the President of the Philippines

Feati, thru counsel filed a motion to dismiss

certified to the Court of Industrial Relations (CIR) the

the case upon the ground that the CIR has no

dispute between Feati and PAFLU pursuant to the

jurisdiction over the case, because:

provisions of Section 10 of Republic Act No. 875.

1.

3 cases were filed with the CIR

the Industrial Peace Act is NOT applicable to the University,

it being an educational institution, nor to the members of

41-IPA PAFLUs petition to declare in

contempt of court since Feati refused to accept them

the Faculty Club, they being independent contractors

2.

the presidential certification is violative of Section 10 of the

back to work in violation of the return-to-work order

Industrial Peace Act, as the University is not an industrial

of March 30, 1963 and has employed professors

establishment and there was no industrial dispute which

and/or instructors to take their places

could be certified to the CIR

1183-MC

PAFLUs

petition

for

Judge Bautista denied the motion to dismiss and

certification election praying that it be certified as

ordered the strikers to return immediately to work

the sole and exclusive bargaining representative

and the University to take them back under the last

Later withdrawn since the Case

terms and conditions existing before the dispute

41-IPA had already been certified by the President to

the CIR and has absorbed the issues herein

arose

Without the motion for reconsideration having been

V-30 PAFLUs complaint for

acted upon by the CIR en banc, Judge Bautista set

of

the

the case for hearing on the merits for May 8, 1963

administrative officials of the Feati reiterating Case

but was cancelled upon Featis petition for certiorari

41-IPA

alleging that Judge Jose S. Bautista acted without, or

May 10, 1963: Feati filed before the SC a petition

in excess of, jurisdiction, or with grave abuse of

for certiorari and prohibition with writ of preliminary

discretion, in taking cognizance of, and in issuing the

indirect

March 23, 1963: On the strength of the presidential

contempt

court

filed

against

injunction which was issued upon the Feati's filing a

questioned orders in, CIR Cases Nos. 41-IPA 1183-MC

Act itself specifically enumerated those who are not included

and V-30

in the term "employer" and educational institutions are not

Feati claims that it is not an employer within

included;

hence,

they

can

be

included

in

the

term

the contemplation of R.A. 875, because it is not an

"employer". However, those educational institutions that are

industrial establishment

not

Feati also claims that it is only a lessee of the

services of its professors and/or instructors pursuant

for

profit

are

not

within

the

purview

ofRepublic Act No. 875.

Feati realizes profits and parts of such earning is distributed

to a contract of services entered into between them

because the University does not exercise control over

operated

as dividends to private stockholders or individuals

It embraces not only those who are usually and ordinarily

their work

considered employees, but also those who have ceased as

employees as a consequence of a labor dispute.

ISSUES: W/N Feati can be considered an employer and

PAFLU as an employee to be covered by R.A. 875 and have

of another; who performs services for another; who

right to unionize

works for salary or wages

HELD:

YES.

petition

for certiorari and

prohibition

with

preliminary injunction in Case G.R. No. L-21278 is dismissed

employee must be one who is engaged in the service

embrace stenographers and bookkeepers

Teachers are not included

Section 2(c) of R.A. 875:

The term employer include any person acting in the interest

of an employer, directly or indirectly, but shall not include

any labor organization (otherwise than when acting as an

Congress did not intend to give a complete definition of

complementary
employer

to

what

is

commonly

understood

prescribes the courses or subjects that professors teach,

professors'

work

is

characterized

by

regularity

and

continuity for a fixed duration

o

"employer", but rather that such definition should be

Feati controls the work of the members of its faculty

and when and where to teach

employer) or any one acting in the capacity or agent of

such labororganization.

"workers" limited to those performing physical labor

professors are compensated for their services by wages and

salaries, rather than by profits

as

professors and/or instructors cannot substitute others to do

their work without the consent of the university

professors can be laid off if their work is found not

satisfactory

Moreover,

are

threatens a major industry of 18,000 students which

considered independent contractors, still they would

affects the national interest), and this Court will not

be covered by Rep. Act No. 875

interfere in, much less curtail, the exercise of that

if

university

professors

professors, instructors or teachers of private

prerogative. The jurisdiction of the CIR in a certified

educational institutions who teach to earn a living

case is exclusive. The parties involved in the case

are entitled to the protection of our labor laws and

may appeal to the Supreme Court from the order or

one such law is RepublicAct No. 875.

orders thus issued by the CIR.

even

The term "labor dispute" includes any controversy

concerning

terms,

tenure

or

concerning

conditions

Court of Industrial Relations to issue an order "fixing

the association or

the terms of employment." This clause is broad

representation of persons in negotiating, fixing,

enough to authorize the Court to order the strikers to

maintaining, changing, or seeking to arrange terms

return to work and the employer to readmit them

or conditions of employment regardless of whether

the

Section 10 of Republic Act No. 875 empowers the

of

employment,

or

disputants

stand

in

proximate

relation

of

The return-to-work order cannot be considered as an

impairment of the contract entered into with the

employer and employees.

replacements. Besides, labor contracts must yield to

To certify a labor dispute to the CIR is the prerogative

the common good and such contracts are subject to

of the President under the law (Because the strike

the

declared by the members of the minority union

bargaining, strikes and similar subjects

special

laws

on labor unions,

collective