LABOR LAW-CASES

1. Calalang vs. Williams G.R. No. 47800 December 2, 1940

Facts:
Maximo Calalang in his capacity as a private citizen and a taxpayer of Manila filed a
petition for a writ of prohibition against the respondents.
It is alleged in the petition that the National Traffic Commission, in its resolution of July
17, 1940, resolved to recommend to the Director of the Public Works and to the Secretary of
Public Works and Communications that animal-drawn vehicles be prohibited from passing
along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street from 7:30
Am to 12:30 pm and from 1:30 pm to 530 pm; and along Rizal Avenue extending from the
railroad crossing at Antipolo Street to Echague Street from 7 am to 11pm for a period of one year
from the date of the opening of the Colgante Bridge to traffic.
The Chairman of the National Traffic Commission on July 18, 1940 recommended to the
Director of Public Works with the approval of the Secretary of Public Works the adoption of the
measure proposed in the resolution aforementioned in pursuance of the provisions of the
Commonwealth Act No. 548 which authorizes said Director with the approval from the
Secretary of the Public Works and Communication to promulgate rules and regulations to
regulate and control the use of and traffic on national roads.
On August 2, 1940, the Director recommended to the Secretary the approval of the
recommendations made by the Chairman of the National Traffic Commission with
modifications. The Secretary of Public Works approved the recommendations on August 10,
1940.
The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused
to be enforced the rules and regulation. As a consequence, all animal-drawn vehicles are not
allowed to pass and pick up passengers in the places above mentioned to the detriment not only
of their owners but of the riding public as well.

Issue:
1. Whether the rules and regulations promulgated by the respondents
pursuant to the provisions of Commonwealth Act NO. 548 constitute
an unlawful inference with legitimate business or trade and abridged
the right to personal liberty and freedom of locomotion?

2. Whether the rules and regulations complained of infringe upon the

constitutional precept regarding the promotion of social justice to
insure the well-being and economic security of all the people?

Held:
1. No. The promulgation of the Act aims to promote safe transit upon and avoid
obstructions on national roads in the interest and convenience of the public. In
enacting said law, the National Assembly was prompted by considerations of
public convenience and welfare. It was inspired by the desire to relieve
congestion of traffic, which is a menace to the public safety. Public welfare lies
at the bottom of the promulgation of the said law and the state in
 order to promote the general welfare may interfere with personal
liberty, with property, and with business and occupations. Persons and
property may be subject to all kinds of restraints and burdens in order to secure
the general comfort, health, and prosperity of the State. To this fundamental
aims of the government, the rights of the individual are subordinated. Liberty is
a blessing which should not be made to prevail over authority because society
will fall into anarchy. Neither should authority be made to prevail over liberty
because then the individual will fall into slavery. The paradox lies in the fact
that the apparent curtailment of liberty is precisely the very means of
insuring its preserving.

2. No. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability
of all the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures legally justifiable,
or extra-constitutionally, through the exercise of powers underlying the existence
of all governments on the time-honored principles of salus populi est
suprema lex.

Social justice must be founded on the recognition of the necessity of

interdependence among divers and diverse units of a society and of the
protection that should be equally and evenly extended to all groups as a
combined force in our social and economic life, consistent with the fundamental
and paramount objective of the state of promoting health, comfort and quiet of
all persons, and of bringing about “the greatest good to the greatest number.”

THE PETITION IS DENIED WITH COSTS AGAINST THE PETITIONER.

2. Gelos vs Court of Appeals. G.R. No. 86186. May 8, 1992

Topic: Definition of Agricultural Tenancy

Facts:

The Private Respondent owned the subject land of 25,000 square meters in Laguna. The Landowner then
entered in to a contract with the petitioner and employed him to be laborer on the land with the wage
of 5.00 peso a day.

The Petitioner first went the Court of Agrarian Relation and then went to Ministry of Agrarian reform and
asked the court to fix the agricultural lease rental of the land and his request was granted.

The private respondent then filed a complaint of illegal detainer against the petitioner that was that was
dismissed by the Ministry of Agrarian reform for the existence of Tenancy relations between the parties.
The Private respondents appealed to the office of the President alleging that there was no tenancy
relation between the parties.
The RTC rendered dismissed the complaint and assailed that there was a tenancy relation between the
parties. The Court of Appeals reversed the decision of the RTC.

Issue:
Is there a Tenancy relation between the parties?

Held:
No, it was clear that the petitioner were not intended to be tenant but a mere employee of the private
respondent as showed in the contract. The petitioner was paid for specific kind of work. The court
stressed many cases that:

"Tenancy is not a purely factual relationship dependent on what the alleged tenant does
upon the land. It is also a legal relationship. The intent of the parties, the understanding
when the farmer is installed, and as in this case, their written agreements, provided these
are complied with and are not contrary to law, are even more important."

It should also be considered that a tenant is defined under Section 5(a) R.A 1199 as a person who
himself and with the aid available from within his immediate farm household cultivates the land
belonging to or possessed by another, with the latter's consent, for purposes of production, sharing the
produce with the landholder under the share tenancy system, or paying to the landholder a price-certain
or ascertainable in produce or in money or both, under the leasehold tenancy system.

Therefore the court laid down the requisites for the tenancy relationship to exist:

1) The parties are the landowner and the tenant;

2) The subject is agricultural land;
3) There is consent;
4) The purpose is agricultural production;
5) There is personal cultivation; and
6) There is sharing of harvest or payment of rental.

Absence of this clearly does not qualify someone to be a tenant. It is clear that it is not a tenancy
relationship that exists between the parties, what they have is employee-employer relationship.

3. Dy Keh Beng vs. Int’l Labor and Maritime Union

FACTS:
A charge of unfair labor practice was filed against Dy Keh Beng, a proprietor of a basket factory,
by dismissing 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 latter came 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
labor union.
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 engaged in the manufacture of baskets known as “kaing”, those working under Dy would
be subject to Dy’s specifications such as the size and quality of the “kaing”. And since the laborers are
done at Dy’s establishments, it could be inferred 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 backwages is modified to an award of backwages for 3 years at the
rated of compensation the employees were receiving at the time of dismissal.

4. DY KEH BENG vs. INTERNATIONAL LABOR and MARINE UNION OF THE

PHILIPPINES, ET AL. G.R. No. L-32245 May 25, 1979 Employer-employee
Relationship, Unfair labor practice, Control test. O C T O B E R 2 5 , 2 0 1 7

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

An employee-employer relationship was found to have existed between Dy

Keh Beng and complainants Tudla and Solano, although Solano was admitted
to have worked on piece basis.
According to Dy Keh Beng, however, Solano was not his employee for the
following reasons:

(1) Solano never stayed long enought at Dy’s establishment;

(2) Solano had to leave as soon as he was through with the

(3) order given him by Dy;

(4) When there were no orders needing his services there was nothing for
him to do;
(5) When orders came to the shop that his regular workers could not fill it
was then that Dy went to his address in Caloocan and fetched him for these
orders; and

(6) Solano’s work with Dy’s establishment was not continuous.

According to petitioner, these facts show that respondents Solano and Tudla
are only piece workers, not employees under Republic Act 875, where an
employee is referred to as

“shall include any employee and shag not be limited to the employee of a
particular employer unless the Act explicitly states otherwise and shall
include any individual whose work has ceased as a consequence of, or in
connection with any current labor dispute or because of any unfair labor
practice and who has not obtained any other substantially equivalent and
regular employment.”

While an employer

“includes any person acting in the interest of an employer, directly or

indirectly but shall not include any labor organization (otherwise than when
acting as an employer) or anyone acting in the capacity of officer or agent of
such labor organization.”

ISSUE:

Whether there existed an employee employer relation between petitioner Dy

Keh Beng and the respondents Solano and Tudla .

RULING:

Petitioner really anchors his contention of the non-existence of employee-

employer relationship on the control test.

While this Court upholds the control test under which an employer-employee
relationship exists “where the person for whom the services are performed
reserves a right to control not only the end to be achieved but also the
means to be used in reaching such end, ” it finds no merit with petitioner’s
arguments as stated above. It should be borne in mind that the control test
calls merely for the existence of the right to control the manner of doing the
work, not the actual exercise of the right.
Considering the finding by the Hearing Examiner that the establishment of
Dy Keh Beng is “engaged in the manufacture of baskets known as kaing, it is
natural to expect that those working under Dy would have to observe,
among others, Dy’s requirements of size and quality of the kaing. Some
control would necessarily be exercised by Dy as the making of the kaing
would be subject to Dy’s specifications. Parenthetically, since the work on the
baskets is done at Dy’s establishments, it can be inferred that the proprietor
Dy could easily exercise control on the men he employed.

As to the contention that Solano was not an employee because he worked on

piece basis, this Court agrees with the Hearing Examiner that circumstances
must be construed to determine indeed if payment by the piece is just a
method of compensation and does not define the essence of the relation.
Units of time … and units of work are in establishments like respondent (sic)
just yardsticks whereby to determine rate of compensation, to be applied
whenever agreed upon.
We cannot construe payment by the piece where work is done in such an
establishment so as to put the worker completely at liberty to turn him out
and take in another at pleasure

5. CORPORAL SR. VS. NLRC. 341 SCRA 658. G.R. No. 129315. October 2, 2000

Facts: 5 male barbers and 2 female manicurists (Petitioners) worked at New Look Barbershop,
a sole proprietorship owned and managed by Vicente Lao which in 1982 was taken over by Lao
Enteng Co., Inc., (respondent corporation) a corporation formed by Vicente Lao’s children. The
petitioners were allowed to work there until April 1985 when they were told that the barbershop
building was sold and their services are no longer needed.

Petitioners filed with the Arbitration branch of NLRC a complaint for illegal dismissal, illegal
deduction, separation pay, non-payment of 13th month pay and salary differential. Also they seek
for refund of P1.00 collected from each of them daily as salary of the barbershop’s sweeper.

Respondent Corporation alleged that petitioners were Joint Venture (JV) partners receiving 50%
commission (Petitioners admitted in receiving 50-60%), therefore no employer-employee
relationship existed. And assuming arguendo that employer-employee relationship existed,
petitioners were not entitled to separation pay since cessation of the business was due to
serious business losses. Also, they allege that the barbershop had always been a JV
partnership with the operation and management left entirely to petitioners and that the former
had no control over the latter who could freely come and go as they wish. Lastly, they allege that
some of the petitioners were allowed to register in SSS only as an act of accommodation.

The Labor Arbiter dismissed the complaint and found that there was a JV and no employer-
employee relationship. Also that the business was closed due to serious business losses or
financial reverses and the law does not compel the establishment to pay separation pay to
whoever were its employees. On appeal, NLRC affirmed the decision but held that petitioners
were considered independent contractors and not employees. The MR was also denied by
NLRC, hence, this petition on certiorari.

Issue: WON there was an employer-employee relationship.

Held: YES. Petitioners are employees of Respondent Corporation and shall be

accorded the benefits given in Art. 283 of the Labor Code granting separation pay
equivalent to 1 month pay for every year of service and also to 13 th month pay. The
other claims of petitioners are found to be without basis.
 No documentary evidence of the existence of JV other than the self-serving affidavit of
the company president.
 The power of control in the 4-fold test (employer-employee relationship) refers to the
EXISTENCE and NOT THE EXERCISE of such power – the following elements must be
present for an employer-employee relationship to exist: (1) the selection and
engagement of the workers; (2) power of dismissal; (3) the payment of wages by
whatever means; and (4) the power to control the worker's conduct, with the latter
assuming primacy in the overall consideration.

The records show that Vicente Lao engaged the petitioners to work for the barbershop
and retained them after it was taken over by the respondent corporation who
continuously paid their wages. Also, the fact that the petitioners worked in the
barbershop owned and operated by respondents, and that they were required to report
daily, observing definite hours of work, they were not free to accept employment
elsewhere and devoted their full time working in the barbershop proves the existence of
the power of control.

 The petitioners are not independent contractors. – An independent contractor is one who
undertakes "job contracting", i.e., a person who (a) carries on an independent business
and undertakes the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of the work except
as to the results thereof, and (b) has substantial capital or investment in the form of
tools, equipment, machineries, work premises, and other materials which are necessary
in the conduct of the business. Petitioners have neither of the above since the tools used
such as scissors; razors, nail cutters, polishes, etc. cannot be considered “substantial
capital or investment”.

 While it is no longer true that membership to SSS is predicated on the existence of an

employee-employer relationship since the policy is now to encourage even the self-
employed dressmakers, manicurists and jeepney drivers to become SSS members, we
could not agree with private respondents that petitioners were registered with the Social
Security System as their employees only as an accommodation. As we have earlier
mentioned private respondent showed no proof to their claim that petitioners were the
ones who solely paid all SSS contributions. It is unlikely that respondents would report
certain persons as their workers, pay their SSS premium as well as their wages if it were
not true that they were indeed their employee.
6. Maraguinot v. NLRC

FACTS:
Petitioner maintains that he was employed by respondents as part of the filming crew.
He was later promoted as an electrician. Petitioners’ tasks contained of loading movie
equipment in the shoothing area. Petitioners sought the assistance of their supervisor, Cesario,
to facilitate their request that respondents adjust their salary in accordance with the minimum
wage law. Mrs. Cesario informed petitioners that del Rosario would agree to increase their
salary only if they signed a blank employment contract. As petitioner refused to sign,
respondents forced Enero (the other petitioner who worked as a crew member) to go on leave.
However, when he reported to work, respondent refused to take him back. Maraguinot was
dropped from the company payroll but when he returned, he was again asked to sign a blank
employment contract, and when he still refused, respondent’s terminated his services.
Petitioners thus sued for illegal dismissal.
Private respondents assert that they contract persons called producers to produce or
make movies for private respondents and contend that petitioners are project employees of the
associate producers, who act as independent contractors. Thus, there is no ER-EE relationship.
However, petitioners cited that their performance of activities is necessary in the usual
trade or business of respondents and their work in continuous.

ISSUE: W/N ER-EE relationship exists

HELD: Yes.

With regards to VIVA’s contention that it does not make movies but merely distributes
motion pictures, there is no sufficient proof to prove this contention.
In respect to respondents’ allegation that petitioners are project employees, it is a
settled rule that the contracting out of labor is allowed only in case of job contracting. However,
assuming that the associate producers are job contactors, they must then be engaged in the
business of making motion pictures. Associate producers must have tools necessary to make
motion pictures. However, the associate producers in this case have none of these. The movie-
making equipment are supplied to the producers and owned by VIVA. Thus, it is clear that the
associate producer merely leases the equipment from VIVA.
In addition, the associate producers of VIVA cannot be considered labor-only contractors
as they did not supply, recruit nor hire the workers. It was Cesario, the Shooting Supervisor of
VIVA, who recruited crew members. Thus, the relationship between VIVA and its producers or
associate producers seems to be that of agency.
With regards to the issue of illegal dismissal, petitioners assert that they were regular
employees who were illegally dismissed. Petitioners in this case had already attained the status
of regular employees in view of VIVA’s conduct. Thus, petitioners are entitled to back wages.
A project employee or a member of a work pool may acquire the status of a regular
employee when:
a. there is a continuous rehiring of project employees even after a cessation of project
b. the tasks performed by the alleged project employee are vital and necessary to the
business of employer
The tasks of petitioners in loading movie equipment and returning it to VIVA’s
warehouse and fixing the lighting system were vital, necessary and indispensable to the usual
business or trade of the employer.
 Wherefore, petition is granted.

ALEJANDRO MARAGUINOT v. NLRC, GR No. 120969, 1998-01-22

Facts:

Petitioner Alejandro Maraguinot, Jr.

Paulino Enero... sought the assistance of their supervisor, Mrs. Alejandria

Cesario, to facilitate their request that private respondents adjust their
salary in accordance with the minimum wage law.

Mrs. Cesario informed petitioners that Mr. Vic... del Rosario would agree to
increase their salary only if they signed a blank employment contract. As
petitioners refused to sign, private respondents forced Enero to go on leave...
then refused to take him back when he reported for work
Meanwhile,... Maraguinot was... dropped from the company payroll... private
respondents terminated his services... found... the Labor Arbiter... that
complainants were illegally dismissed.

The NLRC, in reversing the Labor Arbiter, then concluded that these
circumstances, taken together, indicated that complainant... s... were
"project employees."... petitioners filed the instant petition, claiming that the
NLRC committed grave abuse of discretion amounting to lack or excess of
jurisdiction in: (1)... finding that petitioners were project employees; (2) ruling
that petitioners were not illegally dismissed; and (3) reversing the decision of
the Labor Arbiter.

To support their claim that they were regular (and not project) employees of
private respondents, petitioners cited their performance of activities that
were necessary or desirable in the usual trade or business of private
respondents and added that their work was continuous,... i.e., after one
project was completed they were assigned to another project.

The OSG likewise rejects petitioners' contention that since they were hired
not for one project, but for a series of projects, they should be deemed
regular employees.

the OSG asserts that what matters is that there... was a time-frame for each
movie project made known to petitioners at the time of their hiring.

Issues:

whether an employer-employee relationship existed between petitioners and

private respondents or any one of private respondents... whether petitioners
were illegally dismissed

Ruling:
The relationship between VIVA and its producers or associate producers
seems to be that of agency,... as the latter make movies on behalf of VIVA,
whose business is to "make" movies. As such, the employment relationship
between petitioners and... producers is actually one between petitioners and
VIVA, with the latter being the direct employer.

The employer-employee relationship between petitioners and VIVA can

further be established by the "control test." While four elements are usually
considered in determining the existence of an employment relationship,
namely: (a) the selection and engagement of the employee; (b)... the payment
of wages; (c) the power of dismissal; and (d) the employer's power to control
the employee's conduct, the most important element is the employer's
control of the employee's conduct, not only as to the result of the work to be
done but also as to the means and methods... to accomplish the same

These four elements are present here. In their position paper submitted to
the Labor Arbiter, private respondents narrated the following circumstances:

In the instant case, the evidence on record shows that petitioner Enero was
employed for a total of two (2) years and engaged in at least eighteen (18)
projects, while petitioner Maraguinot was employed for some three (3) years
and worked on at least twenty-three (23)... projects.

Moreover, as petitioners' tasks involved, among other chores, the loading,

unloading and arranging of movie equipment in the shooting area as
instructed by the cameramen, returning the equipment to the Viva Films'
warehouse, and... assisting in the "fixing" of the lighting system, it may not
be gainsaid that these tasks were vital, necessary and indispensable to the
usual business or trade of the employer.

Lest it be misunderstood, this ruling does not mean that simply because an...
employee is a project or work pool employee even outside the construction
industry, he is deemed, ipso jure, a regular employee. All that we hold today
is that once a project or work pool employee has been: (1) continuously, as
opposed to intermittently, re-hired by the same... employer for the same
tasks or nature of tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the employer, then the
employee must be deemed a regular employee, pursuant to Article 280 of the
Labor Code and jurisprudence.

In closing then, as petitioners had already gained the status of regular

employees, their dismissal was unwarranted... the instant petition is
GRANTED

7. JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATION. G.R. No. 138051

June 10, 2004
Facts: In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and
Development Corporation (MJMDC). ABS-CBN was represented by its corporate officers while
MJMDC was represented by Sonza, as President and general manager, and Tiangco as its EVP
and treasurer. Referred to in the agreement as agent, MJMDC agreed to provide Sonza’s
services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay
Sonza a monthly talent fee of P310, 000 for the first year and P317, 000 for the second and
third year.

On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the
recent events concerning his program and career. After the said letter, Sonza filed with the
Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his
salaries, separation pay, service incentive pay,13th month pay, signing bonus, travel allowance
and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN contended that no
employee-employer relationship existed between the parties. However, ABS-CBN continued to
remit Sonza’s monthly talent fees but opened another account for the same purpose.

The Labor Arbiter dismissed the complaint and found that there is no employee-employer
relationship. NLRC affirmed the decision of the Labor Arbiter. CA also affirmed the decision of
NLRC.

Issue: Whether or not there was employer-employee relationship between the parties.

Ruling: Case law has consistently held that the elements of an employee-employer relationship
are selection and engagement of the employee, the payment of wages, the power of dismissal
and the employer’s power to control the employee on the means and methods by which the
work is accomplished. The last element, the so-called "control test", is the most important
element.

Sonza’s services to co-host its television and radio programs are because of his peculiar
talents, skills and celebrity status. Independent contractors often present themselves to possess
unique skills, expertise or talent to distinguish them from ordinary employees. The specific
selection and hiring of SONZA, because of his unique skills, talent and celebrity status not
possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an
independent contractual relationship. All the talent fees and benefits paid to SONZA were the
result of negotiations that led to the Agreement. For violation of any provision of the Agreement,
either party may terminate their relationship. Applying the control test to the present case, we
find that SONZA is not an employee but an independent contractor.

The control test is the most important test our courts apply in distinguishing an employee from
an independent contractor. This test is based on the extent of control the hirer exercises over a
worker. The greater the supervision and control the hirer exercises, the more likely the worker is
deemed an employee. The converse holds true as well – the less control the hirer exercises, the
more likely the worker is considered an independent contractor. To perform his work, SONZA
only needed his skills and talent. How SONZA delivered his lines, appeared on television, and
sounded on radio were outside ABS-CBN’s control. ABS-CBN did not instruct SONZA how to
perform his job. ABS-CBN merely reserved the right to modify the program format and airtime
schedule "for more effective programming." ABS-CBN’s sole concern was the quality of the
shows and their standing in the ratings.

Clearly, ABS-CBN did not exercise control over the means and methods of performance of
Sonza’s work. A radio broadcast specialist who works under minimal supervision is an
independent contractor. Sonza’s work as television and radio program host required special
skills and talent, which SONZA admittedly possesses.

ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment
industries to treat talents like Sonza as independent contractors. The right of labor to security of
tenure as guaranteed in the Constitution arises only if there is an employer-employee
relationship under labor laws. Individuals with special skills, expertise or talent enjoy the
freedom to offer their services as independent contractors. The right to life and livelihood
guarantees this freedom to contract as independent contractors. The right of labor to security of
tenure cannot operate to deprive an individual, possessed with special skills, expertise and
talent, of his right to contract as an independent contractor.

8. ABS-CBN BROADCASTING CORPORATION vs. MARLYN NAZARENO et al. G.R. No.

164156. September 26, 2006

Facts: Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the

broadcasting business and owns a network of television and radio stations, whose operations
revolve around the broadcast, transmission, and relay of telecommunication signals. It sells and
deals in or otherwise utilizes the airtime it generates from its radio and television operations. It
has a franchise as a broadcasting company, and was likewise issued a license and authority to
operate by the National Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production

assistants (PAs) on different dates. They were assigned at the news and public affairs, for
various radio programs in the Cebu Broadcasting Station. On December 19, 1996, petitioner
and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement
(CBA) to be effective during the period from December 11, 1996 to December 11, 1999.
However, since petitioner refused to recognize PAs as part of the bargaining unit, respondents
were not included to the CBA.

On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment
Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick
Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC. The
Labor Arbiter rendered judgment in favor of the respondents, and declared that they were
regular employees of petitioner as such, they were awarded monetary benefits. NLRC affirmed
the decision of the Labor Arbiter. Petitioner filed a motion for reconsideration but CA dismissed
it.

Issue: Whether or not the respondents were considered regular employees of ABS-CBN.

Ruling: The respondents are regular employees of ABS-CBN. It was held that where a person
has rendered at least one year of service, regardless of the nature of the activity performed, or
where the work is continuous or intermittent, the employment is considered regular as long as
the activity exists, the reason being that a customary appointment is not indispensable before
one may be formally declared as having attained regular status.

In Universal Robina Corporation v. Catapang, the Court states that the primary standard,
therefore, of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the
employer. The test is whether the former is usually necessary or desirable in the usual business
or trade of the employer. The connection can be determined by considering the nature of work
performed and its relation to the scheme of the particular business or trade in its entirety. Also, if
the employee has been performing the job for at least a year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular, but only with respect to such activity
and while such activity exists.

Additionally, respondents cannot be considered as project or program employees because no

evidence was presented to show that the duration and scope of the project were determined or
specified at the time of their engagement. In the case at bar, however, the employer-employee
relationship between petitioner and respondents has been proven. In the selection and
engagement of respondents, no peculiar or unique skill, talent or celebrity status was required
from them because they were merely hired through petitioner’s personnel department just like
any ordinary employee. Respondents did not have the power to bargain for huge talent fees, a
circumstance negating independent contractual relationship. Respondents are highly dependent
on the petitioner for continued work. The degree of control and supervision exercised by
petitioner over respondents through its supervisors negates the allegation that respondents are
independent contractors.

The presumption is that when the work done is an integral part of the regular business of the
employer and when the worker, relative to the employer, does not furnish an independent
business or professional service, such work is a regular employment of such employee and not
an independent contractor. As regular employees, respondents are entitled to the benefits
granted to all other regular employees of petitioner under the CBA . Besides, only talent-artists
were excluded from the CBA and not production assistants who are regular employees of the
respondents. Moreover, under Article 1702 of the New Civil Code: “In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of
the laborer.”

9. WPP Marketing Communications, Inc., et al. vs. Jocelyn M. Galera. GR No. 169207;
March 25, 2010
Jocelyn M. Galera vs. WPP Marketing Communications, Inc., et al.
GR No. 169239; March 25, 2010

Facts:

Petitioner Jocelyn M. Galera is an American citizen, who was hired by respondent John
Steedman, Chairman of WPP Worldwide and Chief Executive Officer of Mindshare, Co., a
corporation based in Hong Kong, China, to work in the Philippines for private respondent WPP
Marketing Communications, Inc. (WPP), a corporation registered and operating under the laws
of Philippines. Under the employment contract, Galera would commence employment on
September 1, 1999, with the position of Managing Director of Mindshare Philippines. Thus,
without obtaining an alien employment permit, Galera commenced her employment with WPP
Philippines on the said date. It was only after four months from the time she commenced
employment that private respondent WPP filed before the Bureau of Immigration an application
for petitioner Galera to receive a working visa. In the application, she was designated as Vice-
President of WPP. Petitioner alleged that she was constrained to sign the application in order that
she could remain in the Philippines and retain her employment.

On December 14, 2000, private respondent Galera was verbally informed by Steedman that her
employment had been terminated. She received her termination letter the following day. Her
termination prompted Galera to commence a complaint for illegal dismissal before the labor
arbiter. The labor arbiter found WPP, Steedman, Webster, and Lansang liable for illegal dismissal
and damages. Furthermore the labor arbiter stated that Galera was not only illegally dismissed
but was also not accorded due process, saying that Galera was not given an opportunity by WPP
to defend herself and explain her side. Thus, WPP did not observe both substantive and
procedural due process in terminating Galera’s employment. The labor arbiter ordered WPP to
reinstate Galera and to pay her backwages, transportation and housing benefits, and moral and
exemplary damages, among others.

On appeal, the NLRC reversed the labor arbiter’s ruling. The NLRC ruled that Galera was
WPP’s Vice-President, and therefore, a corporate officer at the time she was removed by the
Board of Directors on 14 December 2000. The NLRC ruled that the labor arbiter had no
jurisdiction over the case because being a corporate officer, a case arising from her termination is
considered as an intra-corporate dispute, which was cognizable by the Securities and Exchange
Commission under P.D. 902-A (but now by the Regional Trial Courts designated as Commercial
Courts by the Supreme Court pursuant to Section 5.2 of RA No.8799).

The Court of Appeals reversed the NLRC. It ruled that Galera’s appointment by the Board of
Directors of the WPP as Vice President for Media had no legal effect as WPP’s by-laws provided
for only one Vice-President, which at that time was occupied. Furthermore, WPP’s by-laws did
not include a managing director as among its corporate officers. The Court of Appeals ordered
WPP to pay Galera backwages and separation pay, as well as housing benefits, moral and
exemplary damages, and attorney’s fees, among others.

The case was subsequently elevated to the Supreme Court.

Issues:

1. Is Galera an employee or a corporate officer of WPP?

2. Did the labor arbiter have jurisdiction over the case?
3. Was Galera illegally dismissed?
4. Is Galera entitled to collect the award of backwages and damages even if she did not have an
alien employment permit when she commenced her employment in the Philippines?

Ruling (First Issue):

Galera is an employee of WPP. She is not a corporate officer of WPP. An examination of WPP’s
by-laws resulted in a finding that Galera’s appointment as a corporate officer (Vice-President
with the operational title of Managing Director of Mindshare) during a special meeting of WPP’s
Board of Directors is an appointment to a non-existent corporate office. WPP’s by-laws provided
for only one Vice-President. At the time of Galera’s appointment on December 31, 1999, WPP
already had one Vice-President in the person of Webster. Galera cannot be said to be a director of
WPP also because all five directorship positions provided in the by-laws are already occupied.

The appellate court further justified that Galera was an employee and not a corporate officer by
subjecting WPP and Galera’s relationship to the four-fold test: (a) the selection and engagement
of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s
power to control the employee with respect to the means and methods by which the work is to be
accomplished. The appellate court found that Sections 1 and 4 of the employment contract
mandate where and how often she is to perform her work; Sections 3, 5, 6 and 7 show that wages
she receives are completely controlled by WPP; and Sections 10 and 11 clearly state that she is
subject to the regular disciplinary procedures of WPP.

(Second Issue):

The Labor Arbiter had jurisdiction over the illegal dismissal complaint filed by Galera. Galera
being an employee, the Labor Arbiter and the NLRC had jurisdiction over her illegal dismissal
complaint. Article 217 of the Labor Code vests the Labor Arbiter with the jurisdiction to hear and
decide, among others termination disputes, involving workers, whether agricultural or non-
agricultural.
(Third Issue):

Yes, WPP’s dismissal of Galera lacked both substantive and procedural due process.

WPP failed to prove any just or authorized cause for Galera’s dismissal. WPP was unable to
substantiate the allegations of Steedman’s December 15, 2000 letter to Galera, (questioning her
leadership and competence). Galera, on the other hand, presented documentary evidence in the
form of congratulatory letters, including one from Steedman, which contents are diametrically
opposed to the December 15, 2000 letter. Also, the law requires that the employer must furnish
the worker sought to be dismissed with two written notices before termination of employment
can be legally effected: (1) notice which apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the subsequent notice which informs the employee of
the employer’s decision to dismiss him. Failure to comply with the requirements taints the
dismissal with illegality. WPP’s acts clearly show that Galera’s dismissal did not comply with the
two-notice rule.

(Fourth Issue):

No, Galera could not claim the employees benefits she is entitled under Philippine Labor Laws.
The law and the rules are consistent in stating that the employment permit must be acquired prior
to employment. Article 40 of the Labor Code states: "Any alien seeking admission to the
Philippines for employment purposes and any domestic or foreign employer who desires to
engage an alien for employment in the Philippines shall obtain an employment permit from the
Department of Labor. Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations
provides, among others, that if an alien enters the country under a non-working visa and wishes
to be employed thereafter, he may only be allowed to be employed upon presentation of a duly
approved employment permit.

Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the
violation of the Philippine labor laws requiring aliens to secure work permits before their
employment. We hold that the status quo must prevail in the present case and we leave the parties
where they are. This ruling, however, does not bar Galera from seeking relief from other
jurisdictions.

10. TELEVISION v. ROBERTO C. SERVAÑA, GR No. 167648, 2008-01-28

Facts:

Television and Production Exponents, Inc. (TAPE)... is... engaged in the

production of television programs, such as the long-running variety program, "Eat
Bulaga!".

Respondent Roberto C. Servaña had served as a security guard for TAPE from

1987 until he... was terminated on

Respondent filed a complaint for illegal dismissal and nonpayment of benefits

against TAPE. He alleged that he was first connected with Agro-Commercial
Security Agency but was later on absorbed by TAPE as a regular company guard.
He was detailed... in Quezon

City where "Eat Bulaga!" regularly staged its productions.

On 2000, respondent received a memorandum informing him of his impending

dismissal on account of TAPE's decision to contract the services of a
professional security agency.

He further contended that his dismissal was undertaken without due process
and violative of... existing labor laws, aggravated by nonpayment of separation
pay.

TAPE countered that the labor arbiter had no jurisdiction over the case in the
absence of an employer-employee relationship between the parties.

TAPE averred that respondent was an independent contractor falling under the
talent group category and was working under a special arrangement which is
recognized in the industry.

Labor Arbiter... respondent to be a regular employee of TAPE.

The Labor Arbiter relied on the nature of the work of respondent, which is
securing and maintaining order in the studio, as necessary and desirable in the
usual... business activity of TAPE.

On appeal... reversed the Labor Arbiter and considered respondent a mere

program employee
Respondent filed a motion for reconsideration but it was denied

Reversing the decision of the NLRC, the Court of Appeals found respondent to be
a regular employee.

TAPE filed the instant petition for review

TAPE proffers the following arguments: that... it never hired respondent, instead
it was the latter who offered his services as a talent to TAPE; that the
Memorandum dated

2000 served on respondent was for the discontinuance of the contract for
security services and not a termination letter; and that the talent fees... given to
respondent were the pre-agreed consideration for the services rendered and
should not be construed as wages. Anent the element of control, TAPE insists
that it had no control over respondent in that he was free to employ means and
methods by which he is to control and... manage the live audiences, as well as
the safety of TAPE's stars and guests.

Issues:

whether an employer-employee relationship exists between TAPE and...

respondent.

Ruling:

Respondent was first connected with Agro-Commercial Security Agency, which

assigned him to assist TAPE in its live productions. When the security agency's
contract with RPN-9 expired... respondent was absorbed by TAPE or, in the
latter's... language, "retained as talent."

Clearly, respondent was hired by TAPE. Respondent presented his identification

card... to prove that he is indeed an employee of TAPE. It has been in held that in
a business establishment, an... identification card is usually provided not just as
a security measure but to mainly identify the holder thereof as a bona fide
employee of the firm who issues it

It is... beyond dispute that respondent received a fixed amount as monthly

compensation for the services he rendered to TAPE.

The Memorandum informing respondent of the discontinuance of his service

proves that TAPE had the power to dismiss respondent.

Control is manifested

He was required to report daily and observe definite work hours.

In sum, we find no reversible error committed by the Court of Appeals in its

assailed decision

Televisions and Production Exponents, Inc. (TAPE, Inc.) vs. Roberto Servaña
G.R. No. 167648 January 28, 2008
Doctrine: There is an employer-employee relationship when the person for whom the services
are performed reserves the right to control not only the end achieved but also the manner and
means used to achieve that end.

FACTS: TAPE is a domestic corporation engaged in the production of television programs while
Antonio Tuviera serves as its president. Roberto Servaña served as security guard for TAPE
from 1987 until his services were termitated on 3 March 2000. Servaña filed a complaint for
illegal dismissal agianst TAPE.He alleged that he was first connected with Agro-Commercial
Security Agency but was later on absorbed by TAPE as a regular company guard. His services
were terminated on account of TAPE’s decision to contract the services of a professional
security agency. Tape, on the other hand, alleged that Servaña was an independent contractor
falling under the talent group category and was working under a special arrangement. It alleged
that it was agreed that Servaña would render his services unitil such time that the company
shall have engaged the services of a professional security agency.

ISSUE: Whether or not there is an Employer-Employee relationship between TAPE and

Servaña?

LA RULING: Yes. The Labor Arbiter ruled that Servaña was a regular employee of Tape on
account of the nature of the work of Servaña, which is securing and maintaining order in the
studio, as necessary and desirable in the usual business of TAPE. However, the Labor Aribter
ruled the termination valid on the ground of redundancy.
NLRC RULING: No. The NLRC reversed the ruling of the Labor Arbiter on the ground security
services may not be deemed necessary and desirable in the usual business of TAPE.
CA RULING: Yes. The CA ruled that that Servaña was a regular employee considering the
nature and length of his service.

SC RULING:
Yes. Jurisprudence is abound with cases that recite the factors to be considered in determining
the existence of employer-employee relationship, namely: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's
power to control the employee with respect to the means and method by which the work is to be
accomplished.

Servaña was hired by TAPE when the latter absorbed him upon the expiration of his security
agency contract with RPN-9. The monthly salary received by Servaña is considered wages
despite being designated as talent fees by TAPE. The Memorandum informing Servaña of
discontinuance of his services also proves that TAPE had the power to dismiss him. Control is
also manifested in the bundy cards submitted by Servaña. He was required to report daily and
observe definite work hours. He is also considered a regular employee by reason of his 5 year
continuous service regardless of whether or not respondent had been performing work that is
necessary or desirable to the usual business of TAPE. Thus being a regular employee, his
services may not be terminated except for a just or authorized cause. TAPE is liable for illegal
dismissal for it failure to comply the 1month requirement for termination of services as required
by law. However, with respect to the liability of petitioner Tuviera, president of TAPE, absent any
showing that he acted with malice or bad faith in terminating respondent, he cannot be held
solidarily liable with TAPE.