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[G.R. No. 101279. August 6, 1992.]PHILIPPINE ASSOCIATION OF SERVICE
EXPORTERS, INC. petitioner, vs. HON.RUBEN D. TORRES, as Secretary of the
Department of Labor & Employment, andJOSE N. SARMIENTO, as
Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.
FACTS:
DOLE Secretary Ruben D. Torres issued Department Order No. 16
Series of 1991 temporarily suspending the recruitment by private
employment agencies of
a result of the department order DOLE, through the POEA took over the
business of deploying Hong Kong bound workers.
The petitioner, PASEI, the largest organization of private
employment and recruitment agencies duly licensed and authorized by the
POEA to engage in the business of obtaining overseas employment for
Filipino land-based workers filed a petition for prohibition to annul the
aforementioned order and to prohibit implementation.
ISSUES:
(1) Whether or not respondents acted with grave abuse of
discretion and/or in excess of their rule-making authority in issuing said
circulars;
(2) whether or not the assailed DOLE and POEA circulars are
contrary to the Constitution, are unreasonable, unfair and oppressive; and
(3) Whether or not the requirements of publication and filing with
the Office of the National Administrative Register were not complied with.
HELD
FIRST, the respondents acted well within in their authority and did
not commit grave abuse of discretion. This is because Article 36 (LC) clearly
grants the Labor Secretary to restrict and regulate recruitment and
Labor shall have the power to restrict and regulate the recruitment and
placement activities of all agencies within the coverage of this title
[Regulation of Recruitment and Placement Activities] and is hereby
authorized to issue orders and promulgate rules and regulations to carry out
the objectives and implement the provisions of this title.
SECOND, the vesture of quasi-legislative and quasi-judicial powers
in administrative bodies is constitutional. It is necessitated by the growing
complexities of the modern society. THIRD, the orders and circulars issued
are however, invalid and unenforceable. The reason is the lack of proper
publication and filing in the Office of the National Administrative Registrar as
required in Article 2 of the Civil Code to wit: Art. 2. Laws shall take effect
after fifteen (15) days following the completion of their publication in the
Official Gazette, unless it is otherwise provided; Article 5 of the Labor Code
government agencies charged with the administration and enforcement of
this Code or any of its parts shall promulgate the necessary implementing
rules and regulations. Such rules and regulations shall become effective
fifteen (15) days after announcement of their adoption in newspapers of
general circulation; and Sections 3(1) and 4, Chapter 2, Book VII of the
Administrative Code of 1987 which provide:
the Philippines Law Center, three (3) certified copies of every rule adopted by
it. Rules in force on the dateof effectivity of this Code which are not filed
within three (3) months shall not thereafter be the basis of any sanction
against any party or persons. (Chapter 2, Book VII of the Administrative Code
ddition to other rule-making requirements
provided by law not inconsistent with this Book, each rule shall become
effective fifteen (15) days from the date of filing as above provided unless a
different date is fixed by law, or specified in the rule in cases of imminent
danger to public health, safety and welfare, the existence of which must be
expressed in a statement accompanying the rule. The agency shall take
appropriate measures to make emergency rules known to persons who may
be affected by them. (Chapter 2, Book VII of the Administrative Code of
1987). Prohibition granted.

DY KEH BENG,
petitioner, vs.
INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL.,
respondents.
G.R. No. L-32245 May 25, 1979
FACTS: Petitioner, Dy Keh Beng, proprietor of basket factory, was charged
with ULP for discriminatory acts defined under Sec 4(a), subparagraph (1 &
4), R.A. No. 875 by dismissing on September 28-29, 1960, respectively, Carlos
N. Solano and Ricardo Tudla for their union activities.
After PI was conducted, a case was filed in the CIR for in behalf of
the ILMUP and two of its members, Solano and Tudla. Dy Keh Beng
contended that he did not know Tudla and that Solano was not his employee
because the latter came to the establishment only when there was work
which he did on pakiaw basis. According to Dy Keh Beng, Solano was not his
employee for the following reasons:
(1) Solano never stayed long enough at Dys establishment;
(2) Solano had to leave as soon as he was through with the order
given him by Dy;
(3) When there were no orders needing his services there was
nothing for him to do;
(4) 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
(5) 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 ulp 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.
Petitioner also contends that the private respondents "did not meet the
control test in the fight of the ... definition of the terms employer and
employee, because there was no evidence to show that petitioner had the
right to direct the manner and method of respondent's work. He points to
the case of Madrigal Shipping Co., Inc. v. Nieves Baens del Rosario, et al. ,L-
13130, October 31, 1959, where the Court ruled that:
The test ... of the existence of employee and employer
relationship is whether there is an understanding betweenthe
parties that one is to render personal services to or for the benefit
of the other and recognition by them of theright of one to order
and control the other in the performance of the work and to
direct the manner and method of its performance.
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The CIR found that there existed an employee-employer relationship
between Dy Keh Beng and complainants Tudla andSolano, although Solano
was admitted to have worked on piece basis.
Hence, this petition for certiorari.
ISSUE: Whether or not an employee employer relation existed between
petitioner Dy Keh Beng and the respondents Solano and Tudla.
HELD: The SC also noted the decision of Justice Paras in the case of Sunrise
Coconut Products Co. Vs. CIR (83 Phil 518, 523)thatjudicial notice of the fact
that the so-called "pakyaw" system mentioned in this case as generally
practiced in our country, is, in fact, a labor contract -between employers and
employees, between capitalists and laborers.
With regard to the control test the SC said that 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.
The petition was dismissed. The Court affirmed the decision of the CIR.

Sevilla vs. CA
FACTS: A contract by and between Noguera and Tourist World Service (TWS),
represented by Canilao, wherein TWS leased the premises belonging to
Noguera as branch office of TWS. When the branch office was opened, it was
run by appellant Sevilla payable to TWS by any airline for any fare brought in
on the efforts of Mrs. Sevilla, 4% was to go to Sevilla and 3% was to be
withheld by the TWS. Later, TWS was informed that Sevilla was connected
with rival firm, and since the branch office was losing, TWS considered
closing down its office. On January 3, 1962, the contract with appellee for the
use of the branch office premises was terminated and while the effectivity
thereof was January 31, 1962, the appellees no longer used it. Because of
this, Canilao, the secretary of TWS, went over to the branch offi ce, and
finding the premises locked, he padlocked the premises. When neither
appellant Sevilla nor any of his employees could enter, a complaint was filed
by the appellants against the appellees. TWS insisted that Sevilla was a mere
employee, being the branch manager of its branch office and that she had
no say on the lease executed with the private respondent, Noguera.
ISSUE: W/N ER-EE relationship exists between Sevilla and TWS
HELD: The records show that petitioner, Sevilla, was not subject to control by
the private respondent TWS. In the first place, under the contract of lease,
she had bound herself in solidum as and for rental payments, an
arrangement that would belie claims of a master-servant relationship. That
does not make her an employee of TWS, since a true employee cannot be
made to part with his own money in pursuance of his employers business, or
otherwise, assume any liability thereof. In the second place, when the branch
office was opened, the same was run by the appellant Sevilla payable to TWS
by any airline for any fare brought in on the effort of Sevilla. Thus, it cannot
be said that Sevilla was under the control of TWS. Sevilla in pursuing the
business, relied on her own capabilities. It is further admitted that Sevilla was
not in the companys payroll. For her efforts, she retained 4% in commissions
from airline bookings, the remaining 3% going to TWS. Unlike an employee,
who earns a fixed salary, she earned compensation in fluctuating amount
depending on her booking successes. The fact that Sevilla had been
designated branch manager does not make her a TWS employee. It
appears that Sevilla is a bona fide travel agent herself, and she acquired an
interest in the business entrusted to her. She also had assumed personal
obligation for the operation thereof, holding herself solidary liable for the
payment of rentals. Wherefore, TWS and Canilao are jointly and severally
liable to indemnify the petitioner, Sevilla.
Jardine Davis Inc. vs. CA

Facts: Petitioner PURE FOODS CORPORATION decided to install two
generators in its food processing plant in San Roque, Marikina City to recover
from losses due to the series of power failures. Consequently, bidding for the
supply and installation of the generators was held. Several suppliers and
dealers were invited to attend a pre-bidding conference to discuss the
conditions, propose scheme and specifications that would best suit the needs
of PUREFOODS. Out of the eight (8) prospective bidders who attended the
pre-bidding conference, only three (3) bidders, namely, respondent FAR EAST
MILLS SUPPLY CORPORATION (hereafter FEMSCO. FEMSCO started the
PUREFOODS project and bought the necessary materials. However,
PUREFOODS unilaterally canceled the award because significant factors were
uncovered which dictates the cancellation and warrant a total review and re-
bid of the said project. Consequently, FEMSCO protested the cancellation of
the award and sought a meeting with PUREFOODS. However, on 26 March
1993, before the matter could be resolved, PUREFOODS already awarded the
project and entered into a contract with JARDINE NELL, a division of Jardine
Davies, Inc. which incidentally was not one of the bidders. FEMSCO sued
PUREFOODS for reneging on its contract and JARDINE for its unwarranted
interference and inducement.
Issues: Whether or not there existed a perfected contract between
PUREFOODS and FEMSCO.
And granting there existed a perfected contract, whether there is any
showing that JARDINE induced or connived with PUREFOODS to violate the
latter's contract with FEMSCO.

Held: The Supreme Court held that there was no issue as regards the subject
matter of the contract and the cause of the obligation. The controversy lies in
the consent whether there was an acceptance of the offer, and if so, if it
was communicated, thereby perfecting the contract. Since petitioner
PUREFOODS started the process of entering into the contract by conducting
bidding, Art. 1326 of the Civil Code, which provides that advertisements for
bidders are simply invitations to make proposals applies. The Supreme Court
also re-stated the distinguishment between a condition imposed on the
perfection of a contract and a condition imposed merely on the performance
of an obligation. While failure to comply with the first condition results in the
failure of a contract, failure to comply with the second merely gives the other
party options and/or remedies to protect his interests.

G.R. No. 117495, May 29, 1997
(272 SCRA 793; 1997)
Nelly Acta Martinez, petitioner,
vs NLRC, etc. respondents.
Ponente: Bellosillo
Facts: Raul Martinez was an operator of two taxicab units under business
name PAMATX and another two units under business name TIGERTX. Private
respondents worked for him as drivers. When Martinez died, he left behind
his mother, Nelly Martinez as his sole heir.
July 1992, the drivers lodged complaint against Raul and Nelly before the
labor arbiter for violation of PD 851 and illegal dismissal. They alleged that
they have been regular drivers of Raul earning 400 a day, not once during
their employment that they received 13th month pay. When Nelly assumed
the management of the units, she informed the drivers that she will sell the
units for she can't manage it, but later did not proceed with her plan and
assigned the units to other drivers instead.

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Nelly traversed that the 13th month pay was personal to Raul and therefore
didn't survive the death of Raul. Nelly contend too that the drivers were not
entitled of the benefits of PD 851 because paid on purely boundary basis
which are not covered by PD 851, the relationship was not employer-
employee but that od lessee-lessor.
On 30 August 1993 the Labor Arbiter dismissed the complaint on the
following grounds: (a) private respondents' claims being personal were
extinguished upon the death of Raul Martinez; (b) petitioner was a mere
housewife who did not possess the required competence to manage the
business; and, (c) private respondents were not entitled to 13th month
pay because the existence of employer-employee relationship was doubtful
on account of the boundary system adopted by the parties.
However, respondent National Labor Relations Commission viewed the case
differently. According to NLRC, (a) private respondents were regular drivers
because payment of wages, which is one of the essential requisites for the
existence of employment relation, may either be fixed, on commission,
boundary, piece-rate or task basis; (b) the management of the business
passed on to petitioner who even replaced private respondents with a new
set of drivers; and, (c) the claims of private respondents survived the death
of Raul Martinez considering that the business did not cease operation
outright but continued presumably, in the absence of proof of sale, up to the
moment.
On 28 January 1994 respondent NLRC thus set aside the appealed decision,
and as alternative to reinstatement, ordered petitioner to grant respondents
separation pay equivalent to one (1) month salary for every year of service a
fraction of six (6) months being considered as one (1) whole year. On 30
September 1994 the motion for reconsideration was denied. Hence, this
recourse of petitioner.

ISSUE:

Ruling: The claim for 13th month pay pertains to the personal obligation of
Raul Martinez which did not survive his death. The rule is settled that unless
expressly assumed, labor contracts are not enforceable against the
transferee of an enterprise. In the present case, petitioner does not only
disavow that she continued the operation of the business of her son but also
disputes the existence of labor contracts between her son and private
respondents.
The reason for the rule is that labor contracts are in personam, and that
claims for backwages earned from the former employer cannot be filed
against the new owners of an enterprise. Nor is the new operator of a
business liable for claims for retirement pay of employees. Thus the claim of
private respondents should have been filed instead in the intestate
proceedings involving the estate of Raul Martinez in accordance with Sec. 5,
Rule 86, of the Rules of Court.

In National Labor Union v. Dinglasan,[9] this Court ruled that the relationship
between jeepney owners/operators on one hand and jeepney drivers on the
other under the boundary system is that of employer-employee and not of
lessor-lessee.

In the present case, however, private respondents simply assumed the
continuance of an employer-employee relationship between them and
petitioner, when she took over the operation of the business after the
death of her son Raul Martinez, without any supporting evidence.
Consequently, we cannot sustain for lack of basis the factual finding of
respondent NLRC on the existence of employer-employee relationship
between petitioner and private respondents. Clearly, such finding emanates
from grave abuse of discretion. With this conclusion, consideration of the
issue on illegal dismissal becomes futile and irrelevant.
WHEREFORE, the petition is GRANTED. The Decision of respondent National
Labor Relations Commission dated 28 January 1994 ordering petitioner Nelly
Acta Martinez to grant respondents separation pay as well as its Order of 30
September 1994 denying reconsideration is SET ASIDE. The Decision of the
Labor Arbiter dated 30 August 1993 dismissing the complaint is REINSTATED.

ISABELO DOCE, petitioner, vs. WORKMEN'S COMPENSATION COMMISSION
and DADO JADAO, respondents.
G.R. No. L-9417 | 1958-12-22 FULLTEXT
D E C I S I O N
BAUTISTA ANGELO, J.:

Dado Jadao filed with the Workmen's Compensation Commission a claim for
compensation against Isabelo Doce for injuries he suffered in an accident
that occurred on June 11, 1953 in the City of Manila while working as a
conductor of a bus belonging to the latter under a boundary system. Doce
interposed the defense that there was no employer-employee relationship
between him and Jadao and hence the Commission has no jurisdiction to act
on the claim.

The claim was assigned to a referee for hearing who, after receiving the
evidence, rendered decision holding that a conductor who works under the
boundary system in the operation of the bus of another is considered an
employee of the latter within the meaning of the law and as such Doce is
responsible to pay to Jadao the compensation prescribed in the Workmen's
Compensation Act. Consequently, the referee ordered Doce to pay Jadao a
compensation of P757.43, plus the cost of the medical and surgical expenses
incurred by the latter, and to pay the Commission the amount of P8.00 as
fees in accordance with the law. This decision was affirmed by the
Commission on July 2, 1955. Doce interposed the present petition for
review.

The facts as found by the Commission are: Dado Jadao was a conductor of
Bus No. 9 of the B-Twelve Liner owned and operated by Isabelo Doce who
was paid under the boundary system. His average daily earnings as
conductor was P4.00, working five days a week. On June 11, 1953, while
acting as such conductor, Jadao was pinned by two buses on Quezon
Boulevard, Manila, suffering injuries on the right leg, head and left ear. He
was treated in the North General Hospital and in the National Orthopedic
Hospital, and as a result he suffered temporary total disability from June 11,
1953 to May 10, 1954 and a partial loss of the use of his right leg.

It was also proven that under the boundary system adopted by petitioner
and respondent, the driver and conductor of the bus gave to the owner a
fixed amount out of the daily earnings derived from its operation. In this
case, the conductor and the driver used to give to respondent P15.00 daily.
The owner supplied the gasoline at the beginning but its cost is later
reimbursed out of the earnings of the day. After deducting the cost of the
gasoline and the rental of P15.00, the remainder is divided between the
conductor and the driver.

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The issue to be determined is whether the employer-employee relationship
existed between the owner of the bus and the conductor considering that
the latter worked under a boundary system as explained above and is not
paid directly by the former.

This case falls squarely within our ruling in National Labor Union vs.
Dinglasan, 52 Off. Gaz., No. 4,1933, wherein this Court held that a driver of a
jeep who operates the same under the boundary system is considered an
employee within the meaning of the law and as such the case comes under
the jurisdiction of the Court of Industrial Relations. In that case, Benedicto
Dinglasan was the owner and operator of TPU jeepneys which were driven by
petitioners under verbal contracts that they will pay P7.50 for 10 hours use
under the so- called "boundary system." The drivers did not receive salaries
or wages from the owner. Their day's earnings were the excess over the
P7.50 they paid for the use of the jeepneys. In the event that they did not
earn more, the owner did not have to pay them anything. In holding that the
employer-employee relationship existed between the owner of the jeepneys
and the drivers even if the latter worked under the boundary system, this
Court said:

"The only features that would make the relationship of lessor and lessee
between the respondent, owner of the jeeps, and the drivers, members of
the petitioner union, are the fact that he does not pay them any fixed wage
but their compensation is the excess of the total amount of fares earned or
collected by them over and above the amount of P7.50 which they agreed to
pay to the respondent, and the fact that the gasoline burned by the jeeps is
for the account of the drivers. These two features are not, however,
sufficient to withdraw the relationship between them from that of employer-
employee, because the estimated earnings for fares must be over and above
the amount they agreed to pay to the respondent for a ten-hour shift or ten-
hour a day operation of the jeeps. Not having any interest in the business
because they did not invest anything in the acquisition of the jeeps and did
not participate in the management thereof, their service as drivers of the
jeeps being their only contribution to the business, the relationship of lessor
and lessee cannot be sustained."

The contention of petitioner that the relation that existed between him and
the respondent is only one of lessor and lessee cannot therefore be
sustained.

Wherefore, the decision appealed from is affirmed, with costs against
petitioner.

Paras, C.J., Bengzon, Padilla, Labrador, Concepcion, Reyes, J.B.L. and
Endencia, JJ., concur.

Corporal vs NLRC ( GR 129315; 10/2/2000)
FULLTEXT
This special civil action for certiorari seeks the review of the Resolution dated
October 17, 1996 of public respondent National Labor Relations Commission
(First Division),[1] in NLRC NCR Case No. 00-04-03163-95, and the Resolution
dated March 5, 1997 denying the motion for reconsideration. The aforecited
October 17th Resolution affirmed the Decision dated September 28, 1996 of
Labor Arbiter Potenciano S. Caizares dismissing the petitioners' complaint
for illegal dismissal and declaring that petitioners are not regular employees
of private respondent Lao Enteng Company, Inc..
The records of the case show that the five male petitioners, namely, Osias I.
Corporal, Sr., Pedro Tolentino, Manuel Caparas, Elpidio Lacap, and Simplicio
Pedelos worked as barbers, while the two female petitioners, Teresita Flores
and Patricia Nas worked as manicurists in New Look Barber Shop located at
651 P. Paterno Street, Quiapo, Manila owned by private respondent Lao
Enteng Co. Inc.. Petitioner Nas alleged that she also worked as watcher and
marketer of private respondent.
Petitioners claim that at the start of their employment with the New Look
Barber Shop, it was a single proprietorship owned and managed by Mr.
Vicente Lao. In or about January 1982, the children of Vicente Lao organized
a corporation which was registered with the Securities and Exchange
Commission as Lao Enteng Co. Inc. with Trinidad Ong as President of the said
corporation. Upon its incorporation, the respondent company took over the
assets, equipment, and properties of the New Look Barber Shop and
continued the business. All the petitioners were allowed to continue working
with the new company until April 15, 1995 when respondent Trinidad Ong
informed them that the building wherein the New Look Barber Shop was
located had been sold and that their services were no longer needed.[2]
On April 28, 1995, petitioners filed with the Arbitration Branch of the NLRC, a
complaint for illegal dismissal, illegal deduction, separation pay, non-
payment of 13th month pay, and salary differentials. Only petitioner Nas
asked for payment of salary differentials as she alleged that she was paid a
daily wage of P25.00 throughout her period of employment. The petitioners
also sought the refund of the P1.00 that the respondent company collected
from each of them daily as salary of the sweeper of the barber shop.
Private respondent in its position paper averred that the petitioners were
joint venture partners and were receiving fifty percent commission of the
amount charged to customers. Thus, there was no employer-employee
relationship between them and petitioners. And assuming arguendo, that
there was an employer-employee relationship, still petitioners are not
entitled to separation pay because the cessation of operati ons of the barber
shop was due to serious business losses.
Respondent Trinidad Lao Ong, President of respondent Lao Enteng Co. Inc.,
specifically stated in her affidavit dated September 06, 1995 that Lao Enteng
Company, Inc. did not take over the management of the New Look Barber
Shop, that after the death Lao Enteng petitioner were verbally informed time
and again that the partnership may fold up anytime because nobody in the
family had the time to be at the barber shop to look after their interest; that
New Look Barber Shop had always been a joint venture partnership and the
operation and management of the barber shop was left entirely to
petitioners; that her father's contribution to the joint venture included the
place of business, payment for utilities including electricity, water, etc. while
petitioners as industrial partners, supplied the labor; and that the barber
shop was allowed to remain open up to April 1995 by the children because
they wanted to give the partners a chance at making it work. Eventually, they
were forced to close the barber shop because they continued to lose money
while petitioners earned from it. Trinidad also added that private
respondents had no control over petitioners who were free to come and go
as they wished. Admittedly too by petitioners they received fifty percent to
sixty percent of the gross paid by customers. Trinidad explained that some of
the petitioners were allowed to register with the Social Security System as
employees of Lao Enteng Company, Inc. only as an act of accommodation. All
the SSS contributions were made by petitioners. Moreover, Osias Corporal,
Elpidio Lacap and Teresita Flores were not among those registered with the
Social Security System. Lastly, Trinidad avers that without any employee-
employer relationship petitioners claim for 13th month pay and separation
pay have no basis in fact and in law.[3]
In a Decision dated September 28, 1995, Labor Arbiter Potenciano S.
Caizares, Jr. ordered the dismissal of the complaint on the basis of his
findings that the complainants and the respondents were engaged in a joint
venture and that there existed no employer-employee relation between
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them. The Labor Arbiter also found that the barber shop was closed due to
serious business losses or financial reverses and consequently declared that
the law does not compel the establishment to pay separation pay to whoever
were its employees.[4]
On appeal, NLRC affirmed the said findings of the Labor Arbiter and
dismissed the complaint for want of merit, ratiocinating thus:
Indeed, complainants failed to show the existence of employer-employee
relationship under the fourway test established by the Supreme Court. It is a
common practice in the Barber Shop industry that barbers supply their own
scissors and razors and they split their earnings with the owner of the barber
shop. The only capital of the owner is the place of work whereas the barbers
provide the skill and expertise in servicing customers. The only control
exercised by the owner of the barber shop is to ascertain the number of
customers serviced by the barber in order to determine the sharing of
profits. The barbers maybe characterized as independent contractors
because they are under the control of the barber shop owner only with
respect to the result of the work, but not with respect to the details or
manner of performance. The barbers are engaged in an independent calling
requiring special skills available to the public at large.[5]
Its motion for reconsideration denied in the Resolution[6] dated March 5,
1997, petitioners filed the instant petition assigning that the NLRC
committed grave abuse of discretion in:
I. ARBITRARILY DISREGARDING SUBSTANTIAL EVIDENCE PROVING THAT
PETITIONERS WERE EMPLOYEES OF RESPONDENT COMPANY IN RULING
THAT PETITIONERS WERE INDEPENDENT CONTRACTORS.
II. NOT HOLDING THAT PETITIONERS WERE ILLEGALLY DISMISSED AND IN
NOT AWARDING THEIR MONEY CLAIMS.[7]
Petitioners principally argue that public respondent NLRC gravely erred in
declaring that the petitioners were independent contractors. They contend
that they were employees of the respondent company and cannot be
considered as independent contractors because they did not carry on an
independent business. They did not cut hair, manicure, and do their work in
their own manner and method. They insist they were not free from the
control and direction of private respondents in all matters, and their services
were engaged by the respondent company to attend to its customers in its
barber shop. Petitioners also stated that, individually or collectively, they do
not have substantial capital nor investments in tools, equipments, work
premises and other materials necessary in the conduct of the barber shop.
What the barbers owned were merely combs, scissors, and razors, while the
manicurists owned only nail cutters, nail polishes, nippers and cuticle
removers. By no standard can these be considered "substantial capital"
necessary to operate a barbers shop.
Finally, petitioners fault the NLRC for arbitrarily disregarding substantial
evidence on record showing that petitioners Pedro Tolentino, Manuel
Caparas, Simplicio Pedelos, and Patricia Nas were registered with the Social
Security System as regular employees of the respondent company. The SSS
employment records in common show that the employer's ID No. of Vicente
Lao/Barber and Pawn Shop was 03-0606200-1 and that of the respondent
company was 03-8740074-7. All the foregoing entries in the SSS employment
records were painstakingly detailed by the petitioners in their position paper
and in their memorandum appeal but were arbitrarily ignored first by the
Labor Arbiter and then by the respondent NLRC which did not even mention
said employment records in its questioned decision.
We found petition is impressed with merit.
In our view, this case is an exception to the general rule that findings of facts
of the NLRC are to be accorded respect and finality on appeal. We have long
settled that this Court will not uphold erroneous conclusions unsupported by
substantial evidence.[8] We must also stress that where the findings of the
NLRC contradict those of the labor arbiter, the Court, in the exercise of its
equity jurisdiction, may look into the records of the case and reexamine the
questioned findings.[9]
The issues raised by petitioners boil down to whether or not an employer-
employee relationship existed between petitioners and private respondent
Lao Enteng Company, Inc. The Labor Arbiter has concluded that the
petitioners and respondent company were engaged in a joint venture. The
NLRC concluded that the petitioners were independent contractors.
The Labor Arbiter's findings that the parties were engaged in a joint venture
is unsupported by any documentary evidence. It should be noted that aside
from the self-serving affidavit of Trinidad Lao Ong, there were no other
evidentiary documents, nor written partnership agreements presented. We
have ruled that even the sharing of proceeds for every job of petitioners in
the barber shop does not mean they were not employees of the respondent
company.[10]
Petitioner aver that NLRC was wrong when it concluded that petitioners were
independent contractors simply because they supplied their own working
implements, shared in the earnings of the barber shop with the owner and
chose the manner of performing their work. They stressed that as far as the
result of their work was concerned the barber shop owner controlled them.
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.[11]
Juxtaposing this provision vis- -vis the facts of this case, we are convinced
that petitioners are not "independent contractors". They did not carry on an
independent business. Neither did they undertake cutting hair and
manicuring nails, on their own as their responsibility, and in their own
manner and method. The services of the petitioners were engaged by the
respondent company to attend to the needs of its customers in its barber
shop. More importantly, the petitioners, individually or collectively, did not
have a substantial capital or investment in the form of tools, equipment,
work premises and other materials which are necessary in the conduct of the
business of the respondent company. What the petitioners owned were only
combs, scissors, razors, nail cutters, nail polishes, the nippers - nothing else.
By no standard can these be considered substantial capital necessary to
operate a barber shop. From the records, it can be gleaned that peti tioners
were not given work assignments in any place other than at the work
premises of the New Look Barber Shop owned by the respondent company.
Also, petitioners were required to observe rules and regulations of the
respondent company pertaining, among other things, observance of daily
attendance, job performance, and regularity of job output. The nature of
work performed by were clearly directly related to private respondent's
business of operating barber shops. Respondent company did not dispute
that it owned and operated three (3) barber shops. Hence, petitioners were
not independent contractors.
Did an employee-employer relationship exist between petitioners and
private respondent? 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. Records of the case show that
the late Vicente Lao engaged the services of the petitioners to work as
barbers and manicurists in the New Look Barber Shop, then a single
proprietorship owned by him; that in January 1982, his children organized a
corporation which they registered with the Securities and Exchange
Commission as Lao Enteng Company, Inc.; that upon its incorporation, it took
over the assets, equipment, and properties of the New Look Barber Shop and
continued the business; that the respondent company retained the services
of all the petitioners and continuously paid their wages. Clearly, all three
elements exist in petitioners' and private respondent's working
arrangements.

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Private respondent claims it had no control over petitioners. The power to
control refers to the existence of the power and not necessarily to the actual
exercise thereof, nor is it essential for the employer to actually supervise the
performance of duties of the employee. It is enough that the employer has
the right to wield that power.[12] As to the "control test", the following facts
indubitably reveal that respondent company wielded control over the work
performance of petitioners, in that: (1) they worked in the barber shop
owned and operated by the respondents; (2) they were required to report
daily and observe definite hours of work; (3) they were not free to accept
other employment elsewhere but devoted their full time working in the New
Look Barber Shop for all the fifteen (15) years they have worked until April
15, 1995; (4) that some have worked with respondents as early as in the
1960's; (5) that petitioner Patricia Nas was instructed by the respondents to
watch the other six (6) petitioners in their daily task. Certainly, respondent
company was clothed with the power to dismiss any or all of them for just
and valid cause. Petitioners were unarguably performing work necessary and
desirable in the business of the respondent company.
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 employees.[13]
Finally, we agree with the labor arbiter that there was sufficient evidence
that the barber shop was closed due to serious business losses and
respondent company closed its barber shop because the building where the
barber shop was located was sold. An employer may adopt policies or
changes or adjustments in its operations to insure profit to itself or protect
investment of its stockholders. In the exercise of such management
prerogative, the employer may merge or consolidate its business with
another, or sell or dispose all or substantially all of its assets and properties
which may bring about the dismissal or termination of its employees in the
process.[14]
Prescinding from the above, we hold that the seven petitioners are
employees of the private respondent company; as such, they are to be
accorded the benefits provided under the Labor Code, specifically Article 283
which mandates the grant of separation pay in case of closure or cessation of
employer's business which is equivalent to one (1) month pay for every year
of service.[15] Likewise, they are entitled to the protection of minimum wage
statutes. Hence, the separation pay due them may be computed on the basis
of the minimum wage prevailing at the time their services were terminated
by the respondent company. The same is true with respect to the 13th
month pay. The Revised Guidelines on the Implementation of the 13th
Month Pay Law states that all rank and file employees are now entitled to a
13th month pay regardless of the amount of basic salary that they receive in
a month. Such employees are entitled to the benefit regardless of their
designation or employment status, and irrespective of the method by which
their wages are paid, provided that they have worked for at least one (1)
month during a calendar year and so all the seven (7) petitioners who were
not paid their 13th month pay must be paid accordingly.[16]
Anent the other claims of the petitioners, such as the P10,000.00 as penalty
for non-compliance with procedural process; P10,000.00 as moral damages;
refund of P1.00 per day paid to the sweeper; salary differentials for
petitioner Nas; attorney's fees), we find them without basis.
IN VIEW WHEREOF, the petition is GRANTED. The public respondent's
Decision dated October 17, 1996 and Resolution dated March 05, 1997 are
SET ASIDE. Private respondents are hereby ordered to pay, severally and
jointly, the seven (7) petitioners their (1) 13th month pay and (2) separation
pay equivalent to one month pay for every year of service, to be computed at
the then prevailing minimum wage at the time of their actual termination
which was April 15, 1995.
Costs against private respondents.
SO ORDERED. Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ.,
concur.

CITIZENS LEAGUE OF FREEWORKERS AND/OR BALBINO EPIS, NICOLAS
ROJO, ET AL., petitioners, vs. HON. MACAPANTON ABBAS, Judge of the
Court of First Instance of Davao and TEOFILO GERONIMO and EMERITA
MENDEZ, respondents.
FULLTEXT
G.R. No. L-21212 | 1966-09-23
D E C I S I O N
DIZON, J.:
Petition for certiorari with a prayer for the issuance of a writ of preliminary
injunction filed by the Citizens' League of Freeworkers, a legitimate labor
organization, - hereinafter referred to as the Union - and its members against
the spouses Teofilo Geronimo and Emerita Mendez, and the Hon.
Macapanton Abbas, as judge of the Court of First Instance of Davao. Its
purpose is to set aside the writ of preliminary injunction issued by the latter
in Civil Case No. 3966 and restrain him from proceeding with the case, on the
ground that the controversy involves a labor dispute and is, therefore, within
the exclusive jurisdiction of the Court of Industrial Relations.
It appears that on March 11, 1963, respondents-spouses, owners and
operators of auto-calesas in Davao City, filed a complaint with the Court of
First Instance of Davao (Civil Case No. 3966) to restrain the Union and its
members, who were drivers of the spouses in said business, from interfering
with its operation, from committing certain acts complained of in connection
therewith, and to recover damages. The complaint alleged that the
defendants named therein used to lease the auto calesas of the spouses on a
daily rental basis; that, unable to get the spouses to recognize said
defendants as employees instead of lessees and to bargain with it on that
basis, the Union declared a strike on February 20, 1963 and since then had
paralyzed plaintiffs' business operations through threats, intimidation and
violence. The complaint also prayed for the issuance of a writ of preliminary
injunction ex-parte restraining defendants therein from committing said acts
of violence and intimidation during the pendency of the case.
On March 11, 1963 the respondent judge granted the writ prayed for, while
deferring action on petitioners' motion to dissolve said writ to March 20 of
the same year.
Meanwhile, on March 12, 1963, petitioners filed a complaint for unfair labor
practice against the respondents-spouses with the Court of Industrial
Relations on the ground, among others, of the latter's refusal to bargain with
them.
On March 18, 1963, petitioners filed a motion to declare the writ of
preliminary injunction void on the ground that the same had expired by
virtue of Section 9 (d) of Republic Act 875. In his order of March 21, 1963,
however, the respondent judge denied said motion on the ground that there
was no employer-employee relationship between respondents-spouses and
the individual petitioners herein and that, consequently, the Rules of Court
and not Republic Act No. 875 applied to the matter of injunction. Thereupon
the petition under consideration was filed.
In the case of Isabelo Doce vs. Workmen's Compensation Commission et al.
(104 Phil., 946), upon a similar if not an altogether identical set of facts, We
held:
"This case falls squarely within our ruling in National Labor Union vs.
Dinglasan, 98 Phil., 649; 52 Off. Gaz., No. 4, 1933, wherein this Court held
that a driver of a jeep who operates the same under the boundary system is
considered an employee within the meaning of the law and as such the case
comes under the jurisdiction of the Court of Industrial Relations. In that case,
Benedicto Dinglasan was the owner and operator of TPU jeepneys which
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were driven by petitioner under verbal contracts that they will pay P7.50 for
10 hours use under the so-called 'boundary system.' The drivers did not
receive salaries or wages from the owner. Their day's earnings were the
excess over the P7.50 they paid for the use of the jeepneys. In the event that
they did not earn more, the owner did not have to pay them anything. In
holding that the employer-employee relationship existed between the owner
of the jeepneys and the drivers even if the latter worked under the boundary
system, this Court said:

'The only features that would make the relationship of lessor and lessee
between the respondents owner of the jeeps, and the drivers, members of
the petitioner union, are the fact that he does not pay them any fixed wage
but their compensation is the excess of the total amount of fares earned or
collected by them over and above the amount of P7.50 which they agreed to
pay to the respondent, and the fact that the gasoline burned by the jeeps is
for the account of the drivers. These two features are not, however,
sufficient to withdraw the relationship, between them from that of
employer-employee, because the estimated earnings for fares must be over
and above the amount they agreed to pay to the respondent for a ten-hour
shift or ten-hour a day operation of the jeeps. Not having any interest in the
business because they did not invest anything in the acquisition of the jeeps
and did not participate in the management thereof, their service as drivers of
the jeeps being their only contribution to the business, the relationship of
lessor and lessee cannot be sustained.'"
Even assuming, arguendo, that the respondent court had jurisdiction to issue
the abovementioned writ of preliminary injunction in Civil Case No. 3966 at
the time it was issued, We are of the opinion, and so hold, that it erred in
denying petitioners' motion to set aside said writ upon expiration of the
period of thirty days from its issuance, upon the wrong ground that there
was no labor dispute between the parties and that, therefore, the provisions
of Republic Act No. 875 did not apply to the case. As stated heretofore, there
was a labor dispute between the parties from the beginning.
Moreover, upon the filing of the unfair labor practice case on March 12,
1963, the Court of Industrial Relations acquired complete jurisdiction over
the labor dispute and the least that could be done in Civil Case No. 3966 is
either to dismiss it or suspend proceedings therein until the final resolution
of the former.
WHEREFORE, judgment is hereby rendered setting aside the writ of
preliminary injunction issued by the respondent judge in Civil Case No. 3966
of the Court of First Instance of Davao, with costs.]

San Miguel Brewery UNION v. Ople (53515; 2/8/89)
FACTS: In 1979, SMC implemented its Complementary Distribution System
(CDS) whereby wholesalers can directly get beer products from any SMC
offices. The SMB Union assailed this program because it violates the
Collective Bargaining Agreement (CBA) particularly the established scheme
whereby route salesmen have been given specific territories to sell beer
products. The CDS scheme would then lower the take home pay of the route
salesmen. SMB Union then sued SMC for unfair labor practices.

ISSUE: Whether or not the CDS is a violation of the CBA.

HELD: No. The SC ruled that the CDS is an exercise of management
prerogatives whereby the management can implement schemes to optimize
their profit. Further, the CDS provides for a compensation clause as well for
salesmen. San Miguel Corporations offer to compensate the members of its
sales force who will be adversely affected by the implementation of the CDS
by paying them a so-called back adjustment commission to make up for
the commissions they might lose as a result of the CDS proves the companys
good faith and lack of intention to bust their union.

FULLTEXT
G.R. No. L-53515 February 8, 1989
SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), petitioner,
vs.
HON. BLAS F. OPLE, as Minister of Labor and SAN MIGUEL
CORPORATION, respondents.
Lorenzo F. Miravite for petitioner.
Isidro D. Amoroso for New San Miguel Corp. Sales Force Union.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

D E C I S I O N
GRIO-AQUINO, J.:
This is a petition for review of the Order dated February 28, 1980 of the
Minister of Labor in Labor Case No. AJML-069-79, approving the private
respondents marketing scheme, known as the Complementary Distribution
System (CDS) and dismissing the petitioner labor unions complaint for
unfair labor practice.
On April 17, 1978, a collective bargaining agreement (effective on May 1,
1978 until January 31, 1981) was entered into by petitioner San Miguel
Corporation Sales Force Union (PTGWO), and the private respondent, San
Miguel Corporation, Section 1, of Article IV of which provided as follows:
Art. IV, Section 1. Employees within the appropriate bargaining unit shall be
entitled to a basic monthly compensation plus commission based on their
respective sales.
In September 1979, the company introduced a marketing scheme known as
the Complementary Distribution System (CDS) whereby its beer products
were offered for sale directly to wholesalers through San Miguels sales
offices.
The labor union (herein petitioner) filed a complaint for unfair labor practice
in the Ministry of Labor, with a notice of strike on the ground that the CDS
was contrary to the existing marketing scheme whereby the Route Salesmen
were assigned specific territories within which to sell their stocks of beer,
and wholesalers had to buy beer products from them, not from the
company. It was alleged that the new marketing scheme violates Section 1,
Article IV of the collective bargaining agreement because the introduction of
the CDS would reduce the take-home pay of the salesmen and their truck
helpers for the company would be unfairly competing with them.
The complaint filed by the petitioner against the respondent company raised
two issues: (1) whether the CDS violates the collective bargaining agreement,
and (2) whether it is an indirect way of busting the union.
In its order of February 28, 1980, the Minister of Labor found:
We see nothing in the record as to suggest that the unilateral action of the
employer in inaugurating the new sales scheme was designed to discourage
union organization or diminish its influence, but rather it is undisputable that
the establishment of such scheme was part of its overall plan to improve
efficiency and economy and at the same time gain profit to the highest.
While it may be admitted that the introduction of new sales plan somewhat
disturbed the present set-up, the change however was too insignificant as to
convince this Office to interpret that the innovation interfered with the
workers right to self-organization.
Petitioners conjecture that the new plan will sow dissatisfaction from its
ranks is already a prejudgment of the plans viability and effectiveness. It is
like saying that the plan will not work out to the workers *benefit+ and
therefore management must adopt a new system of marketing. But what the
petitioner failed to consider is the fact that corollary to the adoption of the
assailed marketing technique is the effort of the company to compensate
whatever loss the workers may suffer because of the new plan over and
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above than what has been provided in the collective bargaining agreement.
To us, this is one indication that the action of the management is devoid of
any anti-union hues.
The dispositive part of the Ministers Order reads:
WHEREFORE, premises considered, the notice of strike filed by the
petitioner, San Miguel Brewery Sales Force Union-PTGWO is hereby
dismissed. Management however is hereby ordered to pay an additional
three (3) months back adjustment commissions over and above the adjusted
commission under the complementary distribution system.
The petition has no merit.
Public respondent was correct in holding that the CDS is a valid exercise of
management prerogatives:
Except as limited by special laws, an employer is free to regulate, according
to his own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place and manner of work,
tools to be used, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay-off of workers and
the discipline, dismissal and recall of work. (NLU vs. Insular La Yebana Co.,
2 SCRA 924; Republic Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V.
Hernandez, Labor Relations Law, 1985 Ed., p. 44.)
Every business enterprise endeavors to increase its profits. In the process, it
may adopt or devise means designed towards that goal. In Abbott
Laboratories vs. NLRC, 154 SCRA 713, We ruled:
Even as the law is solicitous of the welfare of the employees, it must also
protect the right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied.
So long as a companys management prerogatives are exercised in good faith
for the advancement of the employers interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws or
under valid agreements, this Court will uphold them (LVN Pictures Workers
vs. LVN, 35 SCRA 147; Phil. American Embroideries vs. Embroidery and
Garment Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18 SCRA 110).
San Miguel Corporations offer to compensate the members of its sales force
who will be adversely affected by the implementation of the CDS by paying
them a so-called back adjustment commission to make up for the
commissions they might lose as a result of the CDS proves the companys
good faith and lack of intention to bust their union.
WHEREFORE, the petition for certiorari is dismissed for lack of merit.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

Intl school alliance v. Quisumbing (128845; 6/1/2000)
Facts:
The ISM, under Presidential Decree 732, is a domestic educational institution
established primarily for dependents of foreign diplomatic personnel and
other temporary residents.
The local-hires union of the ISM were crying foul over the disparity in wages
that they got compared to that of their foreign teaching counterparts.
These questions are asked to qualify a teacher into a local or foreign hire.
a.....What is one's domicile?
b.....Where is one's home economy?
c.....To which country does one owe economic allegiance?
d.....Was the individual hired abroad specifically to work in the School and
was the School responsible for bringing that individual to the Philippines?
Should any answer point to Philippines, the person is a local hire. The School
grants foreign-hires certain benefits to the foreign hires such as housing,
transportation, and 25% more pay than locals under the theory of (a) the
"dislocation factor" and (b) limited tenure. The first was grounded on leaving
his home country, the second was on the lack of tenure when he returns
home.
The negotiations between the school and the union caused a deadlock
between the parties.
The DOLE resolved in favor of the school, while Dole Secretary Quisimbing
denied the unions mfr.
He said, The Union cannot also invoke the equal protection clause to justify
its claim of parity. It is an established principle of constitutional law that the
guarantee of equal protection of the laws is not violated by legislation or
private covenants based on reasonable classification. A classification is
reasonable if it is based on substantial distinctions and apply to all members
of the same class. Verily, there is a substantial distinction between foreign
hires and local hires, the former enjoying only a limited tenure, having no
amenities of their own in the Philippines and have to be given a good
compensation package in order to attract them to join the teaching faculty of
the School.
The union appealed to the Supreme Court.
The petitioner called the hiring system discriminatory and racist.
The school alleged that some local hires were in fact of foreign origin. They
were paid localsalaries.

Issue:
Whether or not the hiring system is violative of the equal protection clause

Held: Yes, Petition granted

Ratio:
Public policy abhors discrimination. The Article on Social Justice and Human
Rights exhorts Congress to "give highest priority to the enactment of
measures that protect and enhance the right of all people to human
dignity
The very broad Article 19 of the Civil Code requires every person, "in the
exercise of his rights and in the performance of his duties, [to] act with
justice, give everyone his due, and observe honesty and good faith."
International law prohibits discrimination, such as the Universal Declaration
of Human Rights and the International Covenant on Economic, Social, and
Cultural Rights. The latter promises Fair wages and equal remuneration for
work of equal value without distinction of any kind.
In the workplace, where the relations between capital and labor are often
skewed in favor of capital, inequality and discrimination by the employer are
all the more reprehensible.
The Constitution also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code provides that the State shall
"ensure equal work opportunities regardless of sex, race or creed. Article 248
declares it an unfair labor practice for an employer to discriminate in regard
to wages in order to encourage or discourage membership in any labor
organization.
In this jurisdiction, there is the term equal pay for equal work, pertaining to
persons being paid with equal salaries and have similar skills and similar
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conditions. There was no evidence here that foreign-hires perform 25% more
efficiently or effectively than the local-hires.
The State, therefore, has the right and duty to regulate the relations
between labor and capital. These relations are not merely contractual but
are so impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common good.[
For the same reason, the "dislocation factor" and the foreign-hires' limited
tenure also cannot serve as valid bases for the distinction in salary rates. The
dislocation factor and limited tenure affecting foreign-hires are adequately
compensated by certain benefits accorded them which are not enjoyed by
local-hires, such as housing, transportation, shipping costs, taxes and home
leave travel allowances.
In this case, we find the point-of-hire classification employed by respondent
School to justify the distinction in the salary rates of foreign-hires and local
hires to be an invalid classification. There is no reasonable distinction
between the services rendered by foreign-hires and local-hires.
Obiter:
However, foreign-hires do not belong to the same bargaining unit as the
local-hires. It does not appear that foreign-hires have indicated their
intention to be grouped together with local-hires for purposes of collective
bargaining. The collective bargaining history in the School also shows that
these groups were always treated separately. The housing and other benefits
accorded foreign hires were not given to local hires, thereby such admixture
will nbot assure any group the power to exercise bargaining rights.
The factors in determining the appropriate collective bargaining unit are (1)
the will of the employees (Globe Doctrine); (2) affinity and unity of the
employees' interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4) similarity
of employment status.

AKELCO v. NLRC
G.R. 121439 Date January 25, 2000
Petitioners AKLAN ELECTRIC COOPERATIVE INCORPORATED

NLRC, RODOLFO M. RETISO and 165 OTHERS, Respondents


Summary
Workers did not want to transfer to Kalibo Aklan to work. They defied Gen
managers resolution and still worked in main office. No salaries from that
time pursuant to no work, no pay.

Facts
("These are consolidated cases/claims for nonpayment of salaries and wages,
13th month pay, ECOLA and other fringe benefits as rice, medical and
clothing allowances, submitted by complainant Rodolfo M. Retiso and 163
others, Lyn E. Banilla and Wilson B. Sallador against respondents AKELCO,
Atty. Leovigildo Mationg in his capacity as General Manager; ManuelCalizo,
in his capacity as Acting Board President, Board of Directors, AKELCO.)

Prior to the temporary transfer of the office of AKELCO from Lezo Aklan
to Amon Theater, Kalibo, Aklan, complainants were continuously
performing their task and were duly paid of their salaries at their main
office at Lezo
January 22, 1992: A resolution of the Board of Directors of AKELCO
allowed the temporary transfer holding of office at Amon Theater,
Kalibo, Aklan per information by their Project Supervisor, Atty.
Leovigildo Mationg, that their head office is closed and that it is
dangerous to hold office there.
Despite the resolution, a majority of the employees including herein
complainants continued to report for work at Lezo Aklan and were paid
of their salaries.
February 11, 1992: An unnumbered resolution was passed by the Board
of AKELCO withdrawing the temporary designation of office at Kalibo,
Aklan, and that the daily operations must be held again at the main
office of Lezo
Respondents who were reporting at the Lezo office from January 1992
up to May 1992 were duly paid of their salaries, while in the meantime
some of the employees through the instigation of Mationg continued to
remain and work at Kalibo, Aklan;
That from June 1992 up to March 18, 1993, complainants who
continuously reported for work at Lezo, Aklan in compliance with the
aforementioned resolution were not paid their salaries
The justification of the non-payment of salaries are as follows

Respondents voluntarily abandoned their respective work/job
assignments, without any justifiable reason and without notifying
the management
They defied the lawful orders and other issuances by the General
Manager and the Board of Directors of the AKELCO.
They were requested to report to work at the Kalibo office but
despite these lawful orders of the General Manager, the
complainants did not follow and willfully and maliciously defied
said orders and issuance
That they engaged in " . . . slowdown mass leaves, sit downs,
attempts to damage, destroy or sabotage plant equipment and
facilities of the Aklan Electric Cooperative, Inc.
Akelco denies the claims of these complainants under the
principle of "no work no pay" which is legally justified; That these
complainants have "mass leave" from their customary work on
June 1992 up to March 18, 1993
LA dismissed complaint of the workers. NLRC reversed and said
that they are entitled to pay

Issue
WON NLRC committed Grave Abuse of Discretion (GAD) amounting to excess
or want of jurisdiction when it reversed the findings of the Labor Arbiter that
respondents they are NOT covered by the "no work, no pay "principle and
are entitled to the claim for unpaid wages from June 16, 1992 to March 18,
1993.

Ruling


We find cogent reason, as shown by the petitioner and the Solicitor General,
not to affirm the factual findings of public respondent NLRC.

We do not agree with the finding that private respondents had rendered
services from June 16, 1992 to March 18, 1993 so as to entitle them to
payment of wages. Public respondent based its conclusion on the following:
(a) the letter dated April 7, 1993 of Pedrito L. Leyson, Office Manager of
AKELCO addressed to AKELCO's General Manager, Atty. Leovigildo T.
Mationg, requesting for the payment of private respondents' unpaid wages
from June 16, 1992 to March 18, 1993; (b) the memorandum of said Atty.
Mationg dated 14 April 1993, in answer to the letter request of Pedrito
Leyson where Atty. Mationg made an assurance that he will recommend
such request; (c) the private respondents' own computation of their unpaid
wages. We find that the foregoing does not constitute substantial evidence
to support the conclusion that private respondents are entitled to the
payment of wages from June 16, 1992 to March 18, 1993. Substantial
evidence is that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion.14 [Rule 133, Section 5 of the
Revised Rules of Court.] These evidences relied upon by public respondent
did not establish the fact that private respondents actually rendered services
in the Kalibo office during the stated period.


"The employer as owner of the business, also has inherent rights, among
which are the right to select the persons to be hired and discharge them for
just and valid cause; to promulgate and enforce reasonable employment
rules and regulations and to modify, amend or revoke the same; to designate
the work as well as the employee or employees to perform it; to transfer or
promote employees; to schedule, direct, curtail or control company
operations; to introduce or install new or improved labor or money savings
methods, facilities or devices; to create, merge, divide, reclassify and abolish
departments or positions in the company and to sell or close the business.

x x x

Finally, we hold that public respondent erred in merely relying on the
computations of compensable services submitted by private respondents.
There must be competent proof such as time cards or office records to show
that they actually rendered compensable service during the stated period to
entitle them to wages. It has been established that the petitioner's business
office was transferred to Kalibo and all its equipments, records and facilities
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were transferred thereat and that it conducted its official business in Kalibo
during the period in question. It was incumbent upon private respondents to
prove that they indeed rendered services for petitioner, which they failed to
do. It is a basic rule in evidence that each party must prove his affirmative
allegation. Since the burden of evidence lies with the party who asserts the
affirmative allegation, the plaintiff or complainant has to prove his
affirmative allegations in the complaint and the defendant or the respondent
has to prove the affirmative allegation in his affirmative defenses and
counterclaim.25 [Jimenez vs. NLRC, 256 SCRA 84.]

WHEREFORE, in view of the foregoing, the petition for CERTIORARI is
GRANTED. Consequently the decision of public respondent NLRC dated April
20, 1995 and the Resolution dated July 28, 1995 in NLRC Case No. V-0143-94
are hereby REVERSED and SET ASIDE for having been rendered with grave
abuse of discretion amounting to lack or excess of jurisdiction. Private
respondents complaint for payment of unpaid wages before the Labor
Arbiter is DISMISSED.

BERNARDINO V. NAVARRO, Petitioner,versus P.V. PAJARILLO LINER,
INC.,Respondent.
G.R. No. 164681 | 2009-04-24
FULLTEXT
AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul the Decision[1] dated November 28, 2003
and the Resolution[2] dated July 19, 2004 of the Court of Appeals in CA- G.R.
SP No. 67666.

P.V. Pajarillo Liner Inc. (respondent), a corporation engaged in the business
of land transportation, employed Bernardino V. Navarro (petitioner) as a bus
driver on April 20, 1995. Sometime in March 1996, petitioner, while on duty,
was apprehended for picking up passengers in a non-loading zone (illegal
terminal) along Ayala Avenue, Makati. His driver's license was confiscated by
a Metro Manila Development Authority (MMDA) enforcer and a
corresponding traffic violation receipt (TVR) was issued to him, which was
valid as a temporary driver's license for seven days from date of
apprehension. Before the expiration of the TVR, petitioner allegedly gave the
same to respondent's Operations Manager Arnel Hegina[3] (Hegina) and
requested the latter to redeem his license from the MMDA. Respondent was
not able to redeem the license from the MMDA but merely secured a two-
month extension for the validity of the TVR. Sometime in May 1996,
petitioner was again apprehended along Shoemart, Makati by highway
patrol
operatives who demanded petitioner's driver's license. The record does not
specify the violation. When petitioner presented his TVR, the operatives
ordered him to drive the bus directly to the garage. After the incident,
petitioner was not able to work for respondent again.[4]

On March 14, 1997, petitioner filed with the Labor Arbiter (LA), a complaint
for illegal dismissal with damages against respondent, alleging that he was
dismissed from the service on May 19, 1996; that as a bus driver, he worked
for five days a week and from six in the morning up to eleven in the evening
with a gross fare receipts average of P6,500.00; that from the amount of
P6,500.00, he was entitled to a 9% commission and P50.00 incentive; that in
cases of apprehension of respondent's driver due to violations involving
illegal terminal or being "out of line," respondent was in charge of getting the
driver's license from the MMDA; that when he was apprehended in March
1996 for illegal terminal, he gave the TVR to Hegina and requested the latter
to redeem the license from the MMDA; that petitioner's license was not
redeemed and respondent secured only two extensions of the TVR's validity
for two months; that when he was again apprehended in May 1996 and upon
arrival at the respondent's garage, he gave the extended TVR to Hegina and
requested the latter to redeem his license from the MMDA; that Hegina
informed him that his license would be redeemed the following day, but
when petitioner tried to get his license from Hegina, the latter told him that
he failed to get it because of heavy workload; that petitioner was asked to
come back after one week with the assurance that his license would already
be available, but no license was released; that he was constantly following up
his license with respondent's office but was only given promises that his
license was due for release; that respondent's refusal to redeem his license
constituted constructive dismissal because he was deprived of his source of
livelihood, as he was not able to perform his work as a bus driver without his
license.

In its position paper, respondent claimed that petitioner abandoned his job
as shown by the former's letter dated July 28, 1996 addressed to petitioner
requiring the latter to explain why he should not be dismissed for neglecting
his duty through prolonged absence; that after petitioner submitted his reply
to respondent's letter, nothing was heard from him until he filed his
complaint with the LA; that it was petitioner's obligation to redeem the
driver's license; that petitioner's inaction to get back his license showed his
lack of interest in resuming his job; and that respondent could not give back
petitioner's work without his driver's license.

Petitioner filed his reply, arguing that in his August 8, 1996 letter to
respondent's letter dated July 28, 1996, he had already brought to its
attention that it should redeem his license for having been caught for illegal
terminal, to wit:

Bilang tugon sa sulat ninyo ay ikinalulungkot kong sabihin sa inyo na hindi
ako nagpabaya sa aking tungkulin bilang driver bagkus ay nasa management
ang pagkukulang at ito'y tungkol sa hindi pagtubos ng aking TVR na nahuli sa
Ayala ng illegal terminal na dapat ay sagutin ng ating kumpanya. Nagpabalik
balik ako sa ating opisina dahil gusto kong makuha ang original license ko
pero ang nangyari puro extension at hanggang sa tuluyan ng nawala dahil
nadukutan ako. At isa pa, nagpaalam ako kay Arnel na hindi muna ako
makakalabas hangga't hindi pa nalulutas and problema ko.[5] (Emphasis
supplied) that there was no response received from respondent; that it was
only in its position paper filed with the LA that respondent raised the matter
of not condoning or encouraging the act of using illegal terminal, and that it
could not be held liable for petitioner's unlawful act. Petitioner added that it
could not be denied that petitioner requested respondent to redeem his
license, since the TVR was in
respondent's possession.

In the Rejoinder, respondent argued that the TVR was submitted by
petitioner when he was given an extension permit, and it was for record
purposes as it was only a xerox copy.

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On September 10, 1998, the LA rendered a decision[6] in favor of herein
petitioner, the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered ordering respondents to reinstate
complainant to his former position with full backwages which as of August
31, 1998 had already amounted to P175,500.00 and incentives in the amount
of P35,100.00.[7]

In finding that petitioner was constructively dismissed, the LA said that
respondent's claim of petitioner's negligence in the performance of his duties
as a driver due to his alleged prolonged absences had been well explained by
petitioner; that said absences could never be attributed to petitioner's fault,
since he could not perform his usual duties as a driver without his license;
that he was not remiss in following up the release of his license from
respondent, which did not do its job.

The LA did not sustain respondent's claim that it was not the latter's policy to
redeem the license of its drivers who were caught for illegal terminal, as
respondent did not deny petitioner's allegation that he submitted the TVR to
Hegina and that the office of respondent worked for the renewal of the
period of its validity pending the release of petitioner's license; and
respondent's policy of redeeming driver's license was further established by
the affidavit of Marcelino Ibaez, one of respondent's drivers and the
Chairman of the Board of the Kilusang Manggagawa sa PVP Liner. The LA
then concluded that respondent's failure to redeem petitioner's license
deprived him of the source of his livelihood without just and valid cause.

Respondent filed its appeal with the NLRC. The NLRC rendered its decision[8]
dated August 17, 2000, the dispositive portion of which reads:

WHEREFORE, the appealed decision is MODIFIED in that respondent is
ordered to reinstate complainant to his former position as bus driver without
backwages.[9]

On the question of who should redeem petitioner's driver's license, the NLRC
ruled that petitioner as the holder of the license should be the one to
redeem the same; that considering petitioner's allegation in his position
paper, that he gave the TVR to Hegina and requested the latter to redeem his
license, it was clear that petitioner was merely requesting him to redeem his
license, which did not connote any obligation on Hegina's part; that as
respondent failed to heed such request, it was incumbent upon petitioner to
redeem his license, as it was necessary in the pursuit of his occupation as a
bus driver. The NLRC did not believe petitioner's claim that he submitted the
original TVR to respondent, because he could not have driven with only a
photocopy of said document.

On the issue of constructive dismissal, the NLRC found that the evidence
showed that respondent sent a notice to petitioner requiring him to explain
his prolonged absences, to which petitioner submitted an explanation that
he could not report for work, as his license was with the authorities and was
waiting to be redeemed by respondent; and that no action was taken by the
latter on the matter. Thus, the NLRC agreed with the LA that there was
constructive dismissal; and petitioner should be reinstated upon
presentation of his driver's license, but without backwages considering that
he was equally at fault, as he did not bother to take proper steps to redeem
his license.

Petitioner's motion for reconsideration was denied in a Resolution[10] dated
September 29, 2000.

Petitioner filed a petition for certiorari with the CA. Respondent filed its
Comment and petitioner his Reply thereto.

On November 28, 2003, the CA rendered herein assailed decision dismissing
the petition for lack of merit.

The CA found that while an award of backwages presupposes a finding of
illegal dismissal, not every case of illegal dismissal deserves an award of
backwages, citing Manila Electric Co. v. National Labor Relations
Commission,[11] Cathedral School of Technology v. National Labor Relations
Commission, [12] and Durabuilt Recapping and Plant Company v. National
Labor Relations Commission.[13] The CA further held that petitioner was the
holder of the confiscated driver's license; thus, it was his duty to redeem his
license; that while respondent previously took care of retrieving a
confiscated driver's license, it was only a matter of accommodation, as there
is no law or regulation making it an obligation of the employer to undertake
retrieval of its erring driver's license; that when respondent failed to heed
petitioner's request to redeem his license, a personal privilege and non-
transferable, petitioner should have personally redeemed the same, which
he did not; thus, he was not entitled to backwages.

Petitioner's motion for reconsideration was denied in the assailed Resolution
dated July 19, 2004.

Hence, herein petition on the following grounds:

(1) the decision is inconsistent with the settled doctrine that doubts arising
from the evidence must be resolved in favor of the employee;[14]

(2) the findings of the Court of Appeals that petitioner should be the one
who should redeem his driver's license are grounded on speculations,
surmises or conjectures;[15] and

(3) petitioner is entitled to reinstatement with full backwages considering
that he was illegally dismissed from the service. [16]

The petition lacks merit.

For a correct perspective in the resolution of the present petition, it must be
stressed that the finding of the LA that petitioner was constructively
dismissed by respondent is already a settled issue. Respondent did not
appeal from the finding that it constructively dismissed petitioner.

Thus, the Court is constrained to limit itself to the determination of whether
petitioner is entitled to backwages; that is, whether the CA was correct in
upholding the NLRC's finding that petitioner is not entitled to backwages, as
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he was equally at fault for not bothering to take proper steps to redeem his
license.

The LA found that it was the obligation of respondent to redeem petitioner's
driver's license and, therefore, petitioner was constructively dismissed by
respondent. While affirming the constructive dismissal committed by
respondent, the NLRC and the CA, however, held that petitioner as the
holder of the license should be the one to redeem the same, as this was
necessary in the pursuit of his occupation as a bus driver.

Petitioner was using the extended TVR when he was again caught sometime
in May 1996 by highway patrol operatives and was ordered to drive directly
to the garage.

Petitioner claimed that he gave the extended TVR to respondent for the
latter to redeem the same. However, such claim was belied by petitioner's
letter-reply dated August 8, 1996 to respondent's letter dated July 28, 1996,
asking him to explain his prolonged absence. Petitioner wrote that the
extended TVR was stolen from him. Such admission shows that the extended
TVR had been in petitioner's possession in May 1996 until it was stolen from
him, the date of which petitioner did not specify, wittingly or unwittingly.
There is no showing that petitioner ever reported the loss of the extended
TVR to respondent before he was asked to explain his prolonged absence in
July 1996; or that he reported the loss to the MMDA. Thus, how could
petitioner expect respondent to redeem his driver's license when the
extended TVR was not in respondent's possession? Respondent could not be
reasonably expected to redeem petitioner's driver's license while he, as
owner of the license, did not take the proper steps to report the loss of the
TVR to respondent or to the MMDA to get back his license. These
circumstances show that petitioner was not at all faultless, as his violation
caused the confiscation of his license.

Consequently, the Court agrees with the NLRC's conclusion that petitioner is
not entitled to backwages.

He never bothered to redeem his license at the soonest possible time when
there was no showing that he was unlawfully prevented by respondent from
doing so. Thus, petitioner should not be paid for the time he was not
working. The Court has held that where the failure of employees to work was
not due to the employer's fault, the burden of economic loss suffered by the
employees should not be shifted to the employer. Each party must bear his
own loss.[17] It would be unfair to allow petitioner to recover something he
has not earned and could not have earned, since he could not discharge his
work as a driver without his driver's license. Respondent should be exempted
from the burden of paying backwages.

The age-old rule governing the relation between labor and capital, or
management and employee, of a "fair day's wage for a fair day's labor"
remains as the basic factor in determining employees' wages. If there is no
work performed by the employee, there can be no wage or pay -- unless, of
course, the laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed,[18] or otherwise illegally prevented
from working,[19] a situation which we find is not present in the instant
case.

WHEREFORE, the petition for review is DENIED. The Decision dated
November 28, 2003 and the Resolution dated July 19, 2004 of the Court of
Appeals are AFFIRMED.