Philippine Telegraph and Telephone Company v.
NLRC and De Guzman Article 130 involves the right against particular kinds of night work
J. Regalado, Second Division; May 23, 1997
Facts:
Grace De Guzman was hired by the Philippine Telegraph and
Telephone Company (PT&T) as a reliever. On September 1991, De
Guzman was asked to join PT&T as a probationary employee covering
150 days. In the job application form that was furnished her to be filed
up for the purpose, she indicated in the portion for civil status therein
that she was single although she had contracted marriage on May 26,
1991. PT&T then discovered that De Guzman represented herself to
be single in their previous reliever agreements on June 1991. They
then asked De Guzman to explain the discrepancy and reminded her
that it was against the company policy to accept married women. De
Guzman argued that she was not aware that PT&T does not accept
married women applicants. PT&T was not convinced by her reasoning,
and therefore dismissed her from the company. De Guzman then filed
a complaint for illegal dismissal.
LA ruled that De Guzman was illegal dismissed because she already
attained the status of a regular employee. It furthered that she was
discriminated upon by merely being married. NLRC modified the LA
decision, ruling that De Guzman should be suspended for 3 months in
view of the dishonest nature of her acts which should not be
condoned, but ordered her reinstatement since she had been subject
to unjust and unlawful discrimination.
Issue:
W/N De Guzman should be suspended because of the dishonest acts
she committed despite being subjected to unjust discrimination
Ruling:
YES. PT&T’s policy of not accepting or considering as disqualified from
work any woman worker who contracts marriage runs afoul of the
test of, and the right against, discrimination, afforded all women
workers by our labor laws and by no less than the Constitution.
Contrary to PT&T’s assertion that it dismissed De Guzman from
employment on account of her dishonesty, the record discloses
clearly that her ties with the company were dissolved principally
because of the company's policy that married women are not
qualified for employment, and not merely because of her supposed
acts of dishonesty. Verily, De Guzman’s act of concealing the true
nature of her status from PT&T could not be properly characterized
as willful or in bad faith as she was moved to act the way she did
mainly because she wanted to retain a permanent job in a stable
company. In other words, she was practically forced by that very same
illegal company policy into misrepresenting her civil status for fear of
being disqualified from work. While loss of confidence is a just cause
for termination of employment, it should not be simulated. It must
rest on an actual breach of duty committed by the employee and not
on the employer's caprices. Furthermore, it should never be used as
a subterfuge for causes which are improper, illegal, or unjustified.
As she had undeniably committed an act of dishonesty in concealing
her status, albeit under the compulsion of an unlawful imposition of
petitioner, the three-month suspension imposed by respondent NLRC
must be upheld to obviate the impression or inference that such act
should be condoned. It would be unfair to the employer if she were
to return to its fold without any sanction whatsoever for her act which
was not totally justified. Thus, her entitlement to back wages, which
shall be computed from the time her compensation was withheld up
to the time of her actual reinstatement, shall be reduced by deducting
therefrom the amount corresponding to her three months
suspension.
while Article 132 ensures the right of women to be provided with
facilities and standards which the Secretary of Labor may establish to
ensure their health and safety. For purposes of labor and social
legislation, a woman working in a nightclub, cocktail lounge, massage
clinic, bar or other similar establishments shall be considered as an
employee under Article 138. Article 135, on the other hand,
recognizes a woman' s right against discrimination with respect to
terms and conditions of employment on account simply of sex. Finally,
and this brings us to the issue at hand, Article 136 explicitly prohibits
discrimination merely by reason of the marriage of a female
employee.
Apex Mining v. NLRC and Candido
J. Gancayco, First Division; April 22, 1991
Facts:
Candido was employed by Apex Mining for laundry services at is staff
house in Davao del Norte. In the beginning, she was paid on a piece
rate basis. However, on January 17, 1982, she was paid P250/month,
which was ultimately increased to P575/month. On December 1987
when she was working, she slipped and hit her back on a stone. As a
result of the accident she was not able to continue with her work. She
was permitted to go on leave for medication. Her supervisor offered
her the amount of P2,000 which was eventually increased to P5,000
to persuade her to quit her job, but she refused the offer and
preferred to return to work. Apex Mining did not allow her to return
to work and dismissed her on February 4, 1988.
She then sought for the assistance with DOLE. LA then ordered Apex
Mining to pay Candido salary differentials, emergency living
allowances, 13th month pay differentials, and separation pays. NLRC
affirmed the LA. Apex argued that Candido should not be awarded
with such because she is not a regular employee, but a mere
househelper.
Issue:
W/N Candido is a househelper or a regular employee Apex Mining
Ruling:
A regular employee. Rule XIII, Sec. 1(b), Book 3 of the labor code
provides that the term 'househelper' as used herein is synonymous to
the term 'domestic servant' and shall refer to any person, whether
male or female, who renders services in and about the employer's
home and which services are usually necessary or desirable for the
maintenance and enjoyment thereof, and ministers exclusively to the
personal comfort and enjoyment of the employer's family. Such
definition covers family drivers, domestic servants, laundry women,
yayas, gardeners, houseboys and other similar househelps. The
definition cannot be interpreted to include househelp or laundry
women working in staffhouses of a company who attends to the
needs of the company's guest and other persons availing of said
facilities. By the same token, it cannot be considered to extend to the
driver, houseboy, or gardener exclusively working in the company,
the staffhouses and its premises. They may not be considered as
within the meaning of a "househelper" or "domestic servant" as
above-defined by law. They are employees of the company or
employer in the business concerned entitled to the privileges of a
regular employee.
Manila Hotel Corp. & Manila Hotel Intl. Ltd. v.
NLRC and Diosana, Santos
J. Pardo, First Division; October 13, 2000
Facts:
Santos is an overseas worker at Oman employed as a printer at the
Mazoon Printing Press in May 1988. On June 1988, while he was
working in Mazoon Printing Press, he was directly hired by the Palace
Hotel at Beijing, China also a printer but with higher salary and
increased benefits. He then expressed his intent to work in The Palace
Hotel, and resigned at Mazoon on the pretense that he will go to back
to the Philippines to work with their piggery and poultry business. He
then proceeded to Beijing to work at The Palace Hotel and signed an
amended employment agreement with the Vice President for
Operations and Development of Manila Hotel signing “noted” at the
bottom thereof. He then started working on November 5, 1988. From
June 8 to June 29, 1989, Santos was in the Philippines on vacation
leave. He returned to China to work on July 17, 1989. On August 10,
1989, the Palace Hotel informed Santos by letter that his employment
at the Palace Hotel print shop would be terminated due to business
reverses brought about by the political upheaval in China (Tiannamen
Square incidents). Thus, on September 5, 1989, the Palace Hotel
terminated the employment of respondent Santos and paid all
benefits due him, including his plane fare back to the Philippines.
Santos demanded full compensation pursuant to his contract of
employment. In reply, the hotel stated that its print shop was still not
operational and with a low business outlook, as retrenchment in
various departments of the hotel was going on which is a normal
management practice to control costs. Santos then filed a case for
illegal dismissal. LA ruled in favor of Santos and ordered the
companies to pay him for his unearned salaries, moral damages,
exemplary damages, and attorney’s fees. Petitioners appealed,
stating that it is the POEA and not the NLRC which has proper
jurisdiction of the case. NLRC granted the appeal, and declared void
the proceedings. Santos argued that he is not an “overseas contract
worker”, thus the POEA does not have jurisdiction over his case. NLRC
granted Santos’s argument, and ordered LA Tumanon, later on LA De
Vera, to decide on whether Santos was illegal dismissed or retrenched.
LA ruled that Santos was illegal dismissed.
Issue:
W/N jurisdiction was properly vested in the NLRC
Ruling:
NO. The NLRC was a seriously inconvenient forum. The main aspects
of the case transpired in two foreign jurisdictions and the case
involves purely foreign elements. The only link that the Philippines
has with the case is that respondent Santos is a Filipino citizen. The
Palace Hotel and MHICL are foreign corporations. Under the rule of
forum non conveniens, a Philippine court or agency may assume
jurisdiction over the case if it chooses to do so provided : (1) that the
Philippine court is one to which the parties may conveniently resort
to; (2) that the Philippine court is in a position to make an intelligent
decision as to the law and the facts; and (3) that the Philippine court
has or is likely to have power to enforce its decision. The conditions
are unavailing in the case at bar. From the time of recruitment, to
employment to dismissal occurred outside the Philippines. The
inconvenience is compounded by the fact that the proper defendants,
the Palace Hotel and MHICL are not nationals of the Philippines.
Neither are they "doing business in the Philippines." Likewise, the
main witnesses, Mr. Shmidt and Mr. Henk are non-residents of the
Philippines.
Even if we assume two things: (1) that the NLRC had jurisdiction over
the case, and (2) that MHICL was liable for Santos' retrenchment, still
MHC, as a separate and distinct juridical entity cannot be held liable.
True, MHC is an incorporator of MHICL and owns 50% of its capital
stock. However, this is not enough to pierce the veil of corporate
fiction between MHICL and MHC.
There was no existing employer-employee relationship between
Santos and MHICL. In determining the existence of an employer-
employee relationship, the following elements are considered: (1) the
selection and engagement of the employee; "(2) the payment of
wages; "(3) the power to dismiss; and "(4) the power to control
employee's conduct." MHICL did not have and did not exercise any of
the aforementioned powers. It did not select respondent Santos as an
employee for the Palace Hotel. He was referred to the Palace Hotel
by his friend, Nestor Buenio. MHICL did not engage respondent
Santos to work. The terms of employment were negotiated and
finalized through correspondence between respondent Santos, Mr.
Schmidt and Mr. Henk, who were officers and representatives of the
Palace Hotel and not MHICL. Neither did respondent Santos adduce
any proof that MHICL had the power to control his conduct. Finally, it
was the Palace Hotel, through Mr. Schmidt not MHCL that terminated
the contract with Santos.
When one "notes" a contract, one is not expressing his agreement or
approval, as a party would. The term "noted" means that the person
so noting has merely taken cognizance of the existence of an act or
declaration, without exercising a judicious deliberation or rendering
a decision on the matter.
Sps. Jo v. NLRC and Mejila
J. Quisumbing, Second Division; February 2, 2000
Facts:
Mejila worked as a barber on a per piece rate basis at Dina’s Barber
Shop. Sps. Jo acquired the Barber Shop from its previous owner, Dina
Tan, thru a sale. They changed the name to Windfield Barber Shop,
and absorbed all the employees. The barbers got 2/3 of the fee paid
for every haircut, while Sps. Jo would get 1/3. Mejila was then
appointed as the caretaker, and his duties were (1) to report to the
owners of the barbershop whenever the airconditioning units
malfunctioned and/or whenever water or electric power supply was
interrupted; (2) to call the laundry woman to wash dirty linen; (3) to
recommend applicants for interview and hiring; (4) to attend to other
needs of the shop. Because of this, he was given 1/3 of the net income
of the shop. The building where the barber shop was situated was
then demolished, so Sps. Jo rented space across, and resumed its
operations under Cesar’s Palace Barbershop and Massage Clinic. Here,
Mejila continued to be the caretaker and barber but with a fixed
monthly honorarium as caretaker, to wit: from February 1986 to 1990
— P700; from February 1990 to March 1991 — P800; and from July
1992 — P1,300. Mejila then encountered a fight with his co-barber,
which resulted to the summoning of Sps. Jo and Mejila for a
conference. During the mediation between Mejila’s co-worker and
Mejila, Mejila demanded payment of separation pay,
notwithstanding the assurance that Mejila was not driven out as a
caretaker-barber. They set another conference, but Mejila did not
appear. He continued to work but left on January 2, 1993 and was
already working on January 8 at another barbershop.
Mejila filed a complaint for illegal dismissal with a prayer for
separation pay, other monetary benefits, attorney’s fees, and
damages, and it did not seek reinstatement as a positive relief. LA
found that Mejila was not illegally dismissed, but he voluntarily left
the job. It still ordered Sps. Jo to pay Mejila his 13th month pay and
attorney’s fees. NLRC ruled that Mejila was illegally dismissed, and
ordered Mejila’s reinstatement for failure of the Sps. Jo to observe
due process.
In the finding of the LA and NLRC of an employer-employee
relationship, Sps. Jo argued that Mejila was their partner in trade
whose compensation was based on a sharing arrangement per
haircut or shaving job done. They argue that private respondent's task
as caretaker could be considered an employment because the chores
are very minimal.
Issue:
W/N Mejila was illegally dismissed or abandoned his employment
voluntarily
Ruling:
Abandoned his employment voluntarily. To constitute abandonment,
there must be concurrence of the intention to abandon and some
overt acts from which it may be inferred that the employee concerned
has no more interest in working. First, private respondent even
bragged to his coworkers his plan to quit his job at Cesar's Palace
Barbershop and Massage Clinic as borne out by the affidavit executed
by his former co-workers. Second, he surrendered the shop's keys and
took away all his things from the shop. Third, he did not report to the
shop anymore without giving any valid and justifiable reason for his
absence. Fourth, he immediately sought a regular employment in
another barbershop, despite previous assurance that he could remain
in petitioners' employ. Fifth, he led a complaint for illegal dismissal
without praying for reinstatement. Moreover, public respondent's
assertion that the institution of the complaint for illegal dismissal
manifests private respondent's lack of intention to abandon his job is
untenable. The rule that abandonment of work is inconsistent with
the ling of a complaint for illegal dismissal is not applicable in this case.
Such rule applies where the complainant seeks reinstatement as a
relief.
The following facts indubitably reveal that petitioners controlled
private respondent's work performance, in that: (1) private
respondent had to inform petitioners of the things needed in the
shop; (2). he could only recommend the hiring of barbers and
masseuses, with petitioners having the final decision; (3) he had to be
at the shop at 9:00 a.m. and could leave only at 9:00 p.m. because he
was the one who opened and closed it, being the one entrusted with
the key. 7 These duties were complied with by private respondent
upon instructions of petitioners. Moreover, such task was far from
being negligible as claimed by petitioners. On the contrary, it was
crucial to the business operation of petitioners as shown in the
preceding discussion. Hence, there was enough basis to declare
private respondent an employee of petitioners.
Canlubang Security Agency v. NLRC, Canlubang Automotive
Resource Corp., and Bartolay et al.
J. Grino-Aquino, First Division; December 8, 1992
Facts:
CARCO had a security service contract with CSA. This contractual
relation continued until February 14, 1985 when CARCO notified CSA
that in view of recent developments and performance of the security
personnel detailed with CARCO, they decided to engage the services
of another agency.
The security guards, headed by Bartolay, filed for illegal dismissal
against CSA and CARCO. Barolay et al then filed a Motion to Dismiss
the case as regards to CSA believing that CSA was not their employer,
but CARCO. LA granting this Motion by Bartolay et al. NLRC reversed
the LA decision, and ruled that CSA was an indispensable party and
should be impleaded.
During trial, LA found Bartolay et al’s dismissal to be illegal but only
held CSA liable and dismissed the complaint with regard to CARCO for
lack of employer-employee relationship. NLRC dismissed the
complaint as to both CSA and CARCO. On appeal, NLRC reversed itself
and reinstated the LA decision, holding only CSA liable.
Issue:
W/N am employe-employee relationship exists between CSA and
Bartolay et al
Ruling:
YES. The right-of-control test, i.e. "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 as end"
belonging to petitioner CSA by express stipulation of its contract with
CARCO, is determinative of the existence of employer-employee
relationship between CSA and its guards. The alleged
Quitclaim/Waiver is patently invalid being premised on a wrong
conviction or belief. As pointed out above, the existence of an
employer-employee relationship, as a condition for the availment of
provisions of the Labor Code, is determined by evidence and
jurisprudence and the task of determining the same is judicial in
character.
The contract for security service provided, among other terms, as
follows: "(1) Firearms and other ammunitions needed by the guards
for effectively securing CARCO's premises shall be provided by CSA;
(2) Replacement of security guards shall be reposed on CSA; (3)
Discipline of the guards as well as their dismissal shall be within the
regulation of the agency or CSA; (4) The guards are employees of the
agency and n o t that of the client company; (5) All wages, benefits,
and increments due under existing laws to the guards shall be the sole
and exclusive responsibility of CSA; (6) The agency shall hold CARCO
'free from any liability, cause or causes of action, case, claim, which
may be filed by security guards employed by the agency which
matters involve the provisions of wage act or laws or where such
claim involve the question of employment as said guards are in no
sense personnel or employees of the client company.
Insular Life Assurance Co v. NLRC and Basiao
J. Narvasa, First Division; November 15, 1989
Facts:
Basiao and Insular Life Assurance entered into a contract, providing
(1) Baciao to solicit within the Philippines applications for insurance
policies and annuities in accordance with the existing rules and
regulations of the Company; (2) he would receive compensation, in
the form of commissions as provided in the Schedule of Commissions
of the contract to constitute a part of the consideration; and (3) the
"rules in the Company’s Rate Book and its Agent's Manual, as well as
all its circulars and those which may from time to time be
promulgated by it were made part of said contract. The contract also
contained that: The Agent shall be free to exercise his own judgment
as to time, place and means of soliciting insurance; the Agent is
prohibited from giving, directly or indirectly, rebates in any form, or
from making any misrepresentation or over-selling; and the Company
may terminate the contract at will, without any previous notice to the
Agent. Either party may terminate this contract by giving to the other
notice in writing to that effect.
Four years later in April 1972, the parties entered into another
contract - an Agency Manager's Contract — and to implement his end
of it Basiao organized an agency or office to which he gave the name
M. Basiao and Associates, while concurrently fulfilling his
commitments under the first contract with the Company. In May,
1979, the Company terminated the Agency Manager's Contract. The
civil action filed by Basiao caused the Company to terminate their
agreement on the first contract and stop payment of his commissions
starting April 1, 1980.
Basiao filed with the Ministry of Labor a complaint against the
Company without contesting the termination of the first contract,
seeking to recover commissions allegedly unpaid, plus attorney's fees.
The Company disputed the Ministry of Labor’s jurisdiction since
Basiao was not an employee of the Company, but merely an
independent contractor, and that the Company had no obligation for
unpaid commissions under their contract. LA ruled in favor of Basiao,
as an employer-employee relationship exists. NLRC affirmed.
The Company's thesis is drawn from the terms of the contract which,
either expressly or by necessary implication, made Basiao the master
of his own time and selling methods, left to his judgment the time,
place and means of soliciting insurance, set no accomplishment
quotas and compensated him on the basis of results obtained. He was
not bound to observe any schedule of working hours or report to any
regular station; he could seek and work on his prospects anywhere
and at anytime he chose to, and was free to adopt the selling methods
he deemed most effective. Pursuing the argument, the Basiao draws
attention to the provisions obliging him to "observe and conform to
all rules and regulations which the Company may from time to time
prescribe" as well as to the fact that the Company prescribed the
qualifications of applicants for insurance, processed their applications
and determined the amounts of insurance cover to be issued as
indicative of the control, which made Basiao, in legal contemplation,
an employee of the Company.
Issue:
W/N Basiao is a employee of Insular Life Assurance Company or an
independent contractor
Ruling:
An independent contractor. No showing has been made that any
such rules or regulations were in fact promulgated, much less that any
rules existed or were issued which effectively controlled or restricted
his choice of methods - or the methods themselves of selling
insurance. Absent such showing, the Court will not speculate that any
exceptions or qualifications were imposed on the express provision of
the contract leaving Basiao free to exercise his own judgment as to
the time, place and means of soliciting insurance.
In Investment Planning Corporation of the Philippines v. Social
Security System a case almost on all fours with the present one, held
that there was no employer-employee relationship between a
commission agent and an investment company, but that the former
was an independent contractor where said agent and others similarly
placed were: (a) paid compensation in the form of commissions based
on percentages of their sales, any balance of commissions earned
being payable to their legal representatives in the event of death or
registration; (b) required to put up performance bonds; (c) subject to
a set of rules and regulations governing the performance of their
duties under the agreement with the company and termination of
their services for certain causes; (d) not required to report for work
at any time, nor to devote their time exclusively to working for the
company nor to submit a record of their activities, and who, finally,
shouldered their own selling and transportation expenses.
Not every form of control that the hiring party reserves to himself
over the conduct of the party hired in relation to the services
rendered may be accorded the effect of establishing an employer-
employee relationship between them in the legal or technical sense
of the term. A line must be drawn somewhere. Logically, the line
should be drawn between rules that merely serve as guidelines
towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and
those that control or fix the methodology and bind or restrict the
party hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee relationship unlike
the second, which address both the result and the means used to
achieve it. The distinction acquires particular relevance in the case of
an enterprise affected with public interest, as is the business of
insurance, and is on that account subject to regulation by the State
with respect, not only to the relations between insurer and insured
but also to the internal affairs of the insurance company.
Mariveles Shipyard Corp v. CA, and Regondola et al
J. Quisumbing, Second Division; November 11, 2013
Facts:
Mariveles Shipyard entered into a contract with Longest Force
Investigation Security Agency to render security services at its
premises. Regondola et al were deployed by Longest Force as security
guards of Mariveles Shipyard. Soon, Mariveles Shipyard found the
services being rendered by the assigned guards unsatisfactory and
inadequate, causing it to terminate its contract with Longest Force on
April 1995. Longest Force, in turn, terminated the employment of the
security guards it had deployed at petitioner's shipyard. Regondola et
al then filed a case for illegal dismissal and underpayment of wages
pursuant to the PNPSOSIA-PADPAO rates, non-payment of overtime
pay, premium pay for holiday and rest day, service incentive leave pay,
13th month pay and attorney's fees against both Long Force and
Mariveles Shipyard, seeking reinstatement and full backwages
without loss of seniority rights.
Longest Force admitted in its cross-claim against Mariveles its liability
as to the non-payment of the alleged wage differential in the total
amount of P2,618,025 but passed on the liability to petitioner alleging
that the service fee paid by the latter to it was way below the
PNPSOSIA and PADPAO rate, thus, "contrary to the mandatory and
prohibitive laws because the right to proper compensation and
benefits provided under the existing labor laws cannot be waived nor
compromised. Mariveles denied any liability on account of the alleged
illegal dismissal, stressing that no employer-employee relationship
existed between it and the security guards. It further pointed out that
it would be the height of injustice to make it liable again for monetary
claims which it had already paid. They had also been religiously and
promptly paying the bills for the security services sent by Longest
Force and that these are in accordance with the statutory minimum
wage.
LA ruled in favor of Regondola et al, ordering both companies to be
solidarily liable for the all money claims due to Regondola et al. NLRC
affirmed LA. CA dismissed the petition for failure to submit a CNFS
and copies of relevant documents.
Issue:
W/N Mariveles should be held solidarily liable with Longest Force for
the payment of wage differentials and overtime pay
Ruling:
YES. When Mariveles contracted for security services with Longest
Force as the security agency that hired private respondents to work
as guards for the shipyard corporation, petitioner became an indirect
employer of private respondents. Following Article 106, when the
agency as contractor failed to pay the guards, the corporation as
principal becomes jointly and severally liable for the guards' wages.
This is mandated by the Labor Code to ensure compliance with its
provisions, including payment of statutory minimum wage. The
security agency is held liable by virtue of its status as direct employer,
while the corporation is deemed the indirect employer of the guards
for the purpose of paying their wages in the event of failure of the
agency to pay them. This statutory scheme gives the workers the
ample protection consonant with labor and social justice provisions
of the 1987 Constitution. Petitioner cannot evade its liability by
claiming that it had religiously paid the compensation of guards as
stipulated under the contract with the security agency. Labor
standards are enacted by the legislature to alleviate the plight of
workers whose wages barely meet the spiraling costs of their basic
needs. Labor laws are considered written in every contract.
Stipulations in violation thereof are considered null. Similarly,
legislated wage increases are deemed amendments to the contract.
Thus, employers cannot hide behind their contracts in order to evade
their (or their contractors' or subcontractors') liability for
noncompliance with the statutory minimum wage.
The solidary liability of petitioner with that of Longest Force does not
preclude the application of the Civil Code provision on the right of
reimbursement from his co-debtor by the one who paid. The security
agency may not seek exculpation by claiming that the principal's
payments to it were inadequate for the guards' lawful compensation.
As an employer, the security agency is charged with knowledge of
labor laws; and the adequacy of the compensation that it demands
for contractual services is its principal concern and not any other's.
Art. 106 CONTRACTOR OR SUBCONTRACTOR. – Whenever an
employer enters into a contract with another person for the
performance of the former's work, the employees of the contractor
and of the latter's subcontractor, if any, shall be paid in accordance
with the provisions of this Code. In the event that the contractor or
subcontractor fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and severally liable with
his contractor or subcontractor to such employees to the extent of
the work performed under the contract, in the same manner and
extent that he is liable to employees directly employed by him.
Art. 107 INDIRECT EMPLOYER. — The provisions of the immediately
preceding Article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts
with an independent contractor for the performance of any work,
task, job or project.
Zialcita v. PAL
(RO4-3-3398-76; FEBRUARY 20, 1977)
Facts:
Zialcita is a stewardess of PAL. She was fired from work because she
had gotten married. PAL argued and cited its policy that stewardesses
must be single. The policy also states that subsequent marriage of a
stewardess shall automatically terminate employment. Zialcita
anchored on Article 136 of the Labor Code. PAL sought refuge from
Article 132.
Article 132. Facilities for women. The Secretary of Labor and
Employment shall establish standards that will ensure the safety and
health of women employees. In appropriate cases, he shall, by
regulations, require any employer to: To determine appropriate
minimum age and other standards for retirement or termination in
special occupations such as those of flight attendants and the like.
Article 136. Stipulation against marriage. It shall be unlawful for an
employer to require as a condition of employment or continuation of
employment that a woman employee shall not get married, or to
stipulate expressly or tacitly that upon getting married, a woman
employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman
employee merely by reason of her marriage."
Issue:
W/N Zialcita's termination was proper
Ruling:
NO, the termination was improper. First of all, during the time Zialcita
was terminated, no regulation had yet been issued by the Secretary
of Labor to implement Article 132. Second, even assuming that the
Secretary of Labor had already issued such a regulation and to the
effect that stewardesses should remain single, such would be in
violation of Article 136 of the Labor Code. Article 136's protection of
women is broader and more powerful than the regulation provided
under Article 132.
Lopez Sugar Corp v. Franco, et al
J. Callejo, Sr., Second Division; May 16, 2005
Facts:
Franco et al were supervisory employees of the Lopez Sugar
Corporation. By 1994, they decided to form a labor union called Lopez
Sugar Corporation Supervisor's Association. DOLE issued a Certificate
of Registration in their favor. Out of the 108 members, 105 had
agreed to authorize the check-off of union dues against their salaries
even before any Collective Bargaining Agreement (CBA) had been
executed by the union and management. They then submitted their
proposals to the CBA. The corporation's president issued a
Memorandum to the vice-president and department heads for the
adoption of a special retirement program for supervisory and middle
level managers. He emphasized that the management shall have the
final say on who would be covered, and that the program would be
irrevocable once approved. Franco et al received their respective
separation pays and executed their respective Release Waiver and
Quitclaim after receiving their clearances from the Corporation.
On August 31, 1995, the management wrote the union that its
proposals for a CBA had been referred to its counsel. Thereafter, the
Franco et al filed separate complaints against the corporation with
the NLRC for illegal dismissal, unfair labor practice, reinstatement and
damages.
They claimed that they were made to understand that their
employment was terminated on the ground of redundancy; however,
they were not informed of the criteria, guidelines or standard in the
implementation of the special retirement program. They also alleged
that their inclusion in the said program was resorted to in order to
intimidate the union and its members from pursuing their objective
of institutionalizing a collective bargaining mechanism for supervisory
employees in the company, thus, aborting the birth of a labor
organization capable of bargaining with the management on the
terms and conditions of employment. They also only signed their
respective Release Waiver and Quitclaim because their employer had
driven them to the wall, and found themselves in no position to resist,
as they were no longer employed.
The Corporation maintained that the termination of the employment
of the complainants was in response to the challenges brought about
by the General Agreement on Tariff and Trade (GATT), the AFTA and
other international trade agreements, which greatly affected the local
sugar industry. Thus, their termination on the ground of redundancy
were legitimate exercises to adopt measures to cut cost and to
maintain its profitability and competitiveness.
LA ruled in favor of the Corporation as Franco et al already received
their separation pay and other monetary benefits from the
Corporation, and thereafter, voluntarily executed their respective
Deeds of Release Waiver and Quitclaim. NLRC reversed, stating that
there was no factual and legal basis for the termination of the
employment of the private respondents based on retrenchment or
redundancy, and that the Deeds of Release Waiver and Quitclaim
executed by the complainants were ineffective. CA affirmed the NLRC.
Issue:
W/N Franco et al were illegally dismissed or validly dismissed because
of redundancy
Ruling:
Illegally dismissed. Petitioner illegally dismissed the private
respondents from their employment by including them in its special
retirement program, thus, debilitating the union, rendering it pliant
by decapacitating its leadership. As such, the so-called "downsizing"
of the Cane Marketing Department and SMSD based on the SGV Study
Report was a farce — capricious and arbitrary. The downsizing of
personnel was not among the foregoing recommendations, and yet
this was what the petitioner did, through its special retirement
program, by including private respondents Franco and Pabalan,
thereby terminating their employment. It is too much of a
coincidence that the two private respondents were active members
of the union.
The employer must comply with the following requisites to ensure the
validity of the implementation of a redundancy program: (1) a written
notice served on both the employees and the Department of Labor
and Employment at least one month prior to the intended date of
retrenchment; (2) payment of separation pay equivalent to at least
one month pay or at least one month pay for every year of service,
whichever is higher; (3) good faith in abolishing the redundant
positions; and (4) fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly abolished.
Redundancy exists when the service capability of the work force is in
excess of what is reasonably needed to meet the demands on the
enterprise. A redundant position is one rendered superfluous by any
number of factors, such as over-hiring of workers, decreased volume
of business, dropping of a particular product line previously
manufactured by the company or phasing out of a service activity
priorly undertaken by the business. Under these conditions, the
employer has no legal obligation to keep in its payroll more
employees than are necessary for the operation of its business. It is
imperative for the employer to have fair and reasonable criteria in
implementing its redundancy program, such as but not limited to (a)
preferred status; (b) efficiency; and (c) seniority.
Philippine National Bank v. Philippine National Bank Employees
Association and CIR
J. Barredo, En Banc; July 30, 1982
Facts:
PNB and PEMA has a CBA which provided for the creation of
Committee on Personnel Affairs to take charge of screening and
deliberating on the promotion of employees covered. PNB allegedly
failed to comply with their commitment to organize such committee,
causing PEMA to commence strikes. On January 28, 1965, the IRC
ordered that the Committee on Personnel Affairs is hereby created to
start functioning on February 1, 1965, in return for this concession, an
injunction against future strikes or lockouts shall be issued by the
Court to last for a period of six months but which shall terminate even
before that period should all disputes of the parties be already resolve.
PEMA appealed from this decision to the IRC en banc raising two
causes of action. First: that since September 1957, PNB already
approved the revision for the computation of overtime pay
retroactive to July 1954. Since such grant, PEMA have always
considered such to be a part of their salaries and/or fringe benefits.
However, in 1963 PNB withdrew the said benefits without just cause
and in spite of repeated demands refused, and still refuses to
reinstate the same up to the present. Second: After the promulgation
of the Decision in National Waterworks and Sewerage Authority vs.
NAWASA Consolidated Unions, PEMA has repeatedly requested PNB
that the cost of living allowance and longevity pay be taken into
account in the computation of overtime pay, effective as of the grant
of said benefits on January 1, 1958 in accordance with the
aforementioned ruling. Until now PNB has not taken any concrete
steps toward the payment of the differential overtime and nighttime
pays arising from the cost of living allowance and longevity pay.
PNB argued that the case was not within the IRC’s jurisdiction because
the causes of action raised by PEME (1) were not disputes existing
between the parties, (2) the same are mere money claims and
therefore not within the IRC’s jurisdiction, and (3) that the parties
have not so stipulated under the collective bargaining agreement
between them, or the same is premature as the pertinent collective
bargaining agreement has not yet expired.
IRC en banc denied PNB’s argument, and ruled that it has jurisdiction
because the presidential certification has not limited specific areas of
the labor dispute embraced within the said certification. It speaks of
the existence of a labor dispute between the parties and of a strike
declared by the PEMA, for which the IRC has been requested to take
immediate steps in the exercise of its powers under the law. The
settlement of the first cause of action due to its mootness further
strengthens the view that the second cause of action is indeed an
existing dispute between the parties. Both causes of action involve
overtime questions. Both stem from dates well beyond and before
the presidential certification of the present proceedings.
The IRC ordered PNB to pay overtime and nighttime rates to its
employees from January 28, 1962 and such overtime compensation
shall be based on the sum total of the employee's basic salary or wage
plus cost of living allowance and longevity pay under the following
schedule: (a.) Overtime services rendered shall be paid at the rate of
time and one-third, but overtime work performed between 6:00 P .M.
and 6:00 A.M. shall be paid at the rate of 150% or 50% beyond the
regular rate; (b.) The rate for work performed in the night shift, or
during the period from 6:00 P .M. to 6:00 A.M. shall be compensated
at the rate of 150% or 60% beyond the regular rate, provided the work
performed involved a definite night shift and not merely a
continuation by way of overtime of the regular and established hours
of PNB.
Issue:
W/N the cost of living allowance and longevity pay be taken into
account in the computation of overtime pay
Ruling:
NO. As far as longevity pay is concerned, it is beyond question that
the same cannot be included in the computation of overtime pay for
the very simple reason that the contrary is expressly stipulated in the
collective bargaining agreement and, as should be the case, it is
settled that the terms and conditions of a collective bargaining
agreement constitute the law between the parties. The contention of
PEMA that the express provision in the collective bargaining
agreement that "this benefit (longevity pay) shall not form part of the
basic salaries of the officers so affected" cannot imply the same idea
insofar as the computation of the overtime pay is concerned defies
the rules of logic and mathematics. If the basic pay cannot be deemed
increased, how could the overtime pay be based on any increased
amount at all?

There is nothing in the agreement that could justify the possibility

that cost-of-living allowance should be added to the regular wage in
computing overtime pay.

Doctrinally, We hold that, in the absence of any specific provision

on the matter in a collective bargaining agreement, what are
decisive in determining the basis for the computation of overtime
pay are two very germane considerations, namely, (1) whether or
not the additional pay is for extra work done or service rendered
and (2) whether or not the same is intended to be permanent and
regular, not contingent nor temporary and given only to remedy a
situation which can change any time. Overtime pay is for extra effort
beyond that contemplated in the employment contract, hence
when additional pay is given for any other purpose, it is illogical to
include the same in the basis for the computation of overtime pay.
This holding supersedes NAWASA, which only delved on the issue
on whether or not "in computing the daily wage, the additional
compensation for Sunday should be included”.

The cost-of-living allowance began to be granted in 1958 and the

longevity pay in 1981. In other words, they were granted by PNB upon
realizing the difficult plight of its labor force in the face of the unusual
inflationary situation in the economy of the country, which, however
acute, was nevertheless expected to improve. There was thus evident
an inherently contingent character in said allowances. They were not
intended to be regular, much less permanent additional part of the
compensation of the employees and workers. Much less were they
dependent on extra or special work done or service rendered by the
corresponding recipient. Rather, they were based on the needs of
their families as the conditions of the economy warranted. So also
with the longevity pay; manifestly, this was not based on the daily or
monthly amount of work done or service rendered — it was more of
a gratuity for their loyalty, or their having been in the bank's
employment for consideration periods of time.

Overtime work is actually the lengthening of hours developed to the

interests of the employer and the requirements of his enterprise. It
follows that the wage or salary to be received must likewise be
increased, and more than that, a special additional amount must be
added to serve either as encouragement or inducement or to make
up for the things he loses which We have a ready referred to. And on
this score, it must always be borne in mind that wage is indisputably
intended as payment for work done or services rendered. In order to
meet the effects of uncertain economic conditions affecting adversely
the living conditions of wage earners, employers, whenever the
financial conditions of the enterprise permit, grant them what has
been called as cost-of-living allowance. In other words, instead of
leaving the workers to assume the risks of or drift by themselves
amidst the cross-currents of country-wide economic dislocation,
employers try their best to help them tide over the hardships and
difficulties of the situation. Sometimes, such allowances are
voluntarily agreed upon in collective bargaining agreements.