Important VELASCO cases on the power of control;

Navarette vs. Manila Intl Frieght Forwarders, G.R. No. 200580, 11 Feb
2015. -- Where all the four tests are not present, or where not exercised by a
single entity, the determinative factor for establishing empoyer-employee
relationship is the control test.
Raul Locsin et. al. vs PLDT, G.R. No. 185251, 02 October 2009. -- Locsin and
Tomaquin were security guards of SSCP, a security agency, who were assigned to
PLDT as principal. When the security service agreement between PLDT and SSCP
ended, Locsin and Tomaquin were allowed to continue working for one more year;
their wages were still however paid by SSCP. Thereafter, they were eventually
terminated, for which reason, Locsin and Tomaquin filed this illegal termination case
plus monetary claims.
Issue: Whether or not; complainants extended services to the respondent
for one (1) year from October 1, 2001, the effectivity of the termination of the
contract of complainants agency SSCP, up to September 30, 2002, without a
renewed contract, constitutes an employer-employee relationship between
respondent and the complainants.
SC Decision: Locsin and Tomaquin are employees of PLDT. While respondent
and SSCP no longer had any legal relationship with the termination of the
Agreement, petitioners remained at their post securing the premises of respondent
while receiving their salaries, allegedly from SSCP. Clearly, such a situation makes
no sense, and the denials proffered by respondent do not shed any light to the
situation. It is but reasonable to conclude that, with the behest and, presumably,
directive of respondent, petitioners continued with their services. Evidently, such
are indicia of control that respondent exercised over petitioners. With the
conclusion that respondent directed petitioners to remain at their posts and
continue with their duties, it is clear that respondent exercised the power of control
over them; thus, the existence of an employer-employee relationship.
Important VELASCO CASE on Jurisdiction to determine ER-EE relationship:
Peoples Broadcasting Service [Bombo Radio Phils. Inc.] vs.
Secretary of Labor, G.R. No. 179652, March 6, 2012 In the Exercise of the
DOLEs visitorial and enforcement power, the Secretary of Labor or the latters
authorized representative shall have the power to determine the existence of an
employer-employee relationship to the exclusion of the NLRC.
Example: insurance agents; two cases:
Insurance agents are not employees of the insurance companies, in the
absence of evidence that rules or regulations were promulgated or issued which
effectively controlled or restricted the agents choice of methods or the methods
themselves of selling insurance. (Insular Life Assurance Co., Ltd., vs. NLRC
and Melecio Basiao, G.R. 84484, 15 November 1989, 179 SCRA 459).
But this is not to say that ALL insurance agents are NOT employees of the
insurance company. As the Supreme Court clarified in the case of Tongko vs.
Manufacturers' Life Insurance Company (Phils.) Inc. (G.R. No. 167622, 29
June 2010, En Banc; VELASCO PONENTE), the Insular Life ruling above was
tempered with the qualification that had there been evidence that the company

promulgated rules or regulations that effectively controlled or restricted an

insurance agent's choice of methods or the methods themselves in selling
insurance, an employer-employee relationship would have existed. In other words,
the Court in Insular in no way definitively held that insurance agents are not
employees of insurance companies, but rather made the same on a case-to-case
basis.
IMPORTANT VELASCO CASE on Fixed-term employees:
Fonterra Brands Phils. Vs. Largado and Estrellado, G.R. No. 205300, 18
March 2015 -- Whether or not fixed-term employees who were repeatedly hired by
a contractor, but had resigned and transferred to another contractor to work with
the same principal, may claim regular employment status and illegal dismissal?
Answer: NO. Not regular ees. As correctly held by the Labor Arbiter and the
NLRC, the termination of respondents employment with Zytron was brought about
by the cessation of their contracts with the latter. We give credence to the Labor
Arbiters conclusion that respondents were the ones who refused to renew their
contracts with Zytron, and the NLRCs finding that they themselves acquiesced to
their transfer to A.C. Sicat.
By refusing to renew their contracts with Zytron, respondents effectively
resigned from the latter. Resignation is the voluntary act of employees who are
compelled by personal reasons to dissociate themselves from their employment,
done with the intention of relinquishing an office, accompanied by the act of
abandonment.
Here, it is obvious that respondents were no longer interested in continuing
their employment with Zytron. Their voluntary refusal to renew their contracts was
brought about by their desire to continue their assignment in Fonterra which could
not happen in view of the conclusion of Zytrons contract with Fonterra. Hence, to
be able to continue with their assignment, they applied for work with A.C. Sicat
with the hope that they will be able to continue rendering services as TMRs at
Fonterra since A.C. Sicat is Fonterras new manpower supplier.

2014-2015 CASES:
4.1 IMPORTANT: Issue: Must there be an attendance of at least 20% of the total
membership in the appropriate bargaining unit during the organizational meeting;
otherwise, ground for cancellation on account of fraud or misrepresentation?
Takata (Philippines) vs. Bureau of Labor Relations and Samahang Lakas
Manggagawa Ng Takata (Salamat), G.R. No. 196276, 04 June 2014.
Answer: NO! For fraud and misrepresentation to be grounds for
cancellation of union registration under Art. 239 of the Labor Code, the
nature of the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members. There is
nothing in the Labor Code that requires presence of at least 20% of the total
membership in the appropriate bargaining unit during the organizational meeting.
What is required for registration of a union as a legitimate labor organization is that
there must be at members totaling at least twenty percent of all of the employees
in the appropriate bargaining unit at the time of the application.

4.2 Question: Is a registered union required to submit financial statements

and/or keep membership representing 20% of the appropriate bargaining unit
throughout its lifetime, or risk cancellation of its registration?
Answer: NO. The constitutionally guaranteed freedom of association and
right of workers to self-organization outweighs respondents noncompliance with
the statutory requirements to maintain its status as a legitimate labor organization.
There is nothing essentially mysterious or irregular about the fact that only
127 members ratified the unions constitution and by-laws when 128 signed the
attendance sheet. It cannot be assumed that all those who attended approved of
the constitution and by-laws. Any member had the right to hold out and refrain
from ratifying those documents or to simply ignore the process. AT ANY RATE, THE
LABOR CODE AND ITS IMPLEMENTING RULES DO NOT REQUIRE THAT THE NUMBER
OF MEMBERS APPEARING ON THE DOCUMENTS IN QUESTION SHOULD
COMPLETELY DOVETAIL. For as long as the documents and signatures are shown to
be genuine and regular and the constitution and by-laws democratically ratified, the
union is deemed to have complied with registration requirements. (The Heritage
Hotel Manila, acting through its owner, Grand Plaza Hotel, Corp. vs.
National Union of Workers in the Hotel, Restaurant and Allied IndustriesHeritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), G.R. No.
178296, 12 January 2011.)
See also similar case of Mariwasa Siam Ceramics vs. Secretary of Labor
et al., GR No. 183317, 21 Dec 2009., where a substantial number of members
allegedly recanted their membership in the union and this was made a ground for
cancellation of union registration. We cannot give full credence to these affidavits
which were executed under suspicious circumstances, and which contain allegations
unsupported by evidence. At best, these affidavits are self-serving. They possess no
probative value. Nevertheless, even assuming the veracity of said affidavits, the
legitimacy of the respondent Union as a labor organization must be affirmed. While
it is true that withdrawal of support may be considered as resignation from the
union, THE FACT REMAINS THAT AT THE TIME OF THE UNIONS APPLICATION FOR
REGISTRATION, THE AFFIANTS WERE MEMBERS OF THE UNION AND COMPRISED
MORE THAN THE REQUIRED 20% MEMBERSHIP FOR PURPOSES OF REGISTRATION
AS A UNION. ART. 234 MERELY REQUIRES A MINIMUM OF 20% MEMBERSHIP
DURING APPLICATION FOR UNION REGISTRATION. IT DOES NOT MANDATE THAT A
UNION MUST MAINTAIN THE 20% MINIMUM MEMBERSHIP REQUIREMENT ALL
THROUGHOUT ITS EXISTENCE.
V.I.P. 2014 ULP CASE NOT ASKED IN 2015 BAR: WHERE THE EMPLOYER
HAS
ORCHESTRATED
ACTIVITIES
TO
SUBVERT
CERTIFICATION
ELECTIONS. (T & H Shopfitters Corporation/ Gin Queen Corporation et. al. vs. T &
H Shopfitters Corporation/Gin Queen Workers Union, et. al., G.R. No. 191714, 26
February 2014, J. Mendoza).
The various questioned acts of petitioners show interference in the right to
self-organization by the employees, namely: 1) sponsoring a field trip to Zambales
for its employees, to the exclusion of union members, before the scheduled
certification election; 2) the active campaign by the sales officer of petitioners
against the union prevailing as a bargaining agent during the field trip; 3) escorting
its employees after the field trip to the polling center; 4) the continuous hiring of
subcontractors performing respondents functions; 5) assigning union members to

the Cabangan site to work as grass cutters; and 6) the enforcement of work on a
rotational basis for union members.
Indubitably, the various acts of petitioners, taken together, reasonably
support an inference that, indeed, such were all orchestrated to restrict
respondents free exercise of their right to self-organization. The Court is of the
considered view that petitioners undisputed actions prior and immediately before
the scheduled certification election, while seemingly innocuous, unduly meddled in
the affairs of its employees in selecting their exclusive bargaining representative.