Labor 1 Case Doctrine

LABOR 1: CASE DOCTRINES 1st SEM AY 2009-2010
Atty. Dante Miguel Cadiz

ART 1-42
Labor standards refers to the minimum requirements prescribed by existing laws, rules and regulations relating to
Batong Buhay v
wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational,
Dela Serna
safety and health standards.[4] Labor standards cases are governed by Article 128(b) of the Labor Code.
Social justice ceases to be an effective instrument for the "equalization of the social and economic forces" by the
State when it is used to shield wrongdoing. 29 While it is true that compassion and human consideration should
guide the disposition of cases involving termination of employment since it affects one's source or means of
livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer
to retain the services of an employee who has been shown to be a gross liability to the employer. It should be
Jamer v NLRC
made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent
economic inequality between labor and management. The intent is to balance the scale of justice; to put the two
parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the
interests of management but never should the scale be so tilted if the result is an injustice to the employer, Justicia
remini regarda est (Justice is to be denied to none).
Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly
IS Alliance of Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is,
Educators v of course, beside the point. The point is that employees should be given equal pay for work of equal value. That is
Quisumbing a principle long honored in this jurisdiction. That is a principle that rests on fundamental notions of justice. That
is the principle we uphold today.
Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and
social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the
basic public policy of the State to afford protection to labor, promote full employment, ensure equal work
Becmen Services v
opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. This
Sps Cuaresma
ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws which have for their
object public order, public policy and good customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a foreign country.
When conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier
influence of the latter should be counter-balanced by sympathy and compassion the law must accord the
Marcopper Mining v
underprivileged worker. Any doubt concerning the rights of labor should be resolved in its favor pursuant to the
NLRC
social justice policy. The purpose of E.O. No. 178 is to improve the lot of the workers covered by the said statute.
We are bound to ensure its fruition
In the interpretation of an employer’s retrenchment program providing for separation benefits, all doubts should
PNCC v NLRC
be construed in favor of the underprivileged worker.
The consistent rule is that if doubts exist between the evidence presented by the employer and the employee, the
Asuncion v NLRC scales of justice must be tilted in favor of the latter. The employer must affirmatively show rationally adequate
evidence that the dismissal was for a justifiable cause.
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,
SMB v Ople
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.
It is basic to the point of being elementary that nomenclatures assigned to a contract shall be disregarded if it is
apparent that the attendant circumstances do not support their use or designation. The same is true with greater
force concerning contracts of employment, imbued as they are with public interest. Although respondents were
initially hired as part-time employees for one year, thereafter the over-all circumstances with respect to duties
PAL v Pascua et al
assigned to them, number of hours they were permitted to work including over-time, and the extension of
employment beyond two years can only lead to one conclusion: that they should be declared full-time employees.
Thus, not without sufficient and substantial reasons, the claim of management prerogative by petitioner ought to
be struck down for being contrary to law and policy, fair play and good faith.
In Juco v. NLRC, we clarified that employees of government-owned and controlled corporations with special
charters are covered under the Civil Service. On the other hand, employees of government-owned and controlled
corporations under the Corporation Code are governed by the provisions of the Labor Code.
Postigo v PTSI (Phil
The PTSI belongs to the latter category and, therefore, covered by Rep. Act No. 7641 which is an amendment to
Tubercolosis Society
the Labor Code. The accommodation under Rep. Act No. 1820 extending GSIS coverage to PTSI employees did
Inc)
not take away from petitioners the beneficial coverage afforded by Rep. Act No. 7641. Hence, the retirement pay
payable under Article 287 of the Labor Code as amended by Rep. Act No. 7641 should be considered apart from
the retirement benefit claimable by the petitioners under the social security law or, as in this case, the GSIS law.
BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 1

Unconstitutionality of the 3-month rule: The Court concludes that the subject clause contains a suspect
classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally
Serrano v Gallant
discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in
Maritime Service
their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject
clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.
While we recognize that petitioner was a registered member of the Associated Marine Officers and Seamen's
Union of the Philippines which had a CBA with respondent Elite Shipping A.S. providing for a probationary
De La Cruz v
period of employment, the CBA cannot override the provisions of the POEA Standard Employment Contract.
Maersk
The law is read into, and forms part of, contracts. And provisions in a contract are valid only if they are not
contrary to law, morals, good customs, public order or public policy.
2 element of illegal recruitment: (a) offender has no valid license or authority required by law to enable them to
lawfully engage in the recruitment and placement of workers and (b) offender undertakles either any activity when
PPL v Alvarez the meaning of recruitment and placement defined under Art. 13b or any prohibited practice under Art. 34. Large-
scale illegal recruitment exists when illegal recruitment, as defined by the 2 elements above-quoted, is committed
against 3 or more individuals (PPL v Diaz). Since the case involved 4 victims it is large-scale illegal recruitment.
The absence of receipts to evidence payment to an indictee in a criminal case for illegal recruitment does not
warrant an acquittal of the accussed, and it is not necessarily fatal to the prosecution’s cause. As long as the
prosecution is able to establish through credible testimonial evidence that the accused has involved himself in an
PPL v Saley act of illegal recruitment, a conviction for the offense can very well be justified. Article 38 also provides that
recruitment includes the act of referral or “the act of passing long or forwarding of an applicant for employment
to a selected employer, placement officer or bureau.” Thus, even the act of referral can also be considered as
recruitment.
Article 38 (b) of the Labor Code, as amended by PD No. 2018 provides that illegal recruitment shall be
considered an offense involving economic sabotage if any of the following qualifying circumstances exists: First,
when illegal recruitment is committed by a syndicate. For purposes of the law, a syndicate exists when three or
PPl v Navarra
more persons conspire or confederate with one another in carrying out any unlawful or illegal transaction,
enterprise or scheme. Second, there is economic sabotage when illegal recruitment is committed in a large scale, as
when it is committed against three or more persons individually or as a group.
Neither can we warrant the ruling of the NLRC that herein private respondent I.T. may only be considered as an
agent of Samir, its foreign principal, and that private respondent I.T. should not be expected to have access to the
employment records of its said foreign principal, thereby justifying the latter's non-presentation of the needed
documents before the POEA Adjudication Office, and the absolution of I.T. from any liability to petitioner. In so
Sevilla v ruling, respondent NLRC disregarded the rule regarding the solidary liability of the local employment agency with
International Corp its foreign principal in overseas employment contracts. Private employment agencies are held jointly and severally
liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment.
This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to
assure the aggrieved worker of immediate and sufficient payment of what is due him. This is in line with the
policy of the State to protect and alleviate the plight of the working class.
Article 40 of the Labor Code which requires employment permit refers to non-resident aliens. The employment
permit is required for entry into the country for employment purposes and is issued after determination of the
Almodiel v NLRC non-availability of a person in the Philippines who is competent, able and willing at the time of application to
perform the services for which the alien is desired. Since Ang Tan Chai is a resident alien, he does not fall within
the ambit of the provision.
OSM, as manning agent, is jointly and severally liable with its principal, Philippine Carrier Shipping Agency
Services Co. (PCSLC), for private respondent Guerrero’s claim. This conclusion is in accordance with Section 1 of
Rule II of POEA Rules and Regulations. Joint and solidary liability is meant to assure aggrieved workers of
immediate and sufficient payment of what is due them.
The fact that OSM and PCSLC have already terminated their agency agreement does not relieve the former of its
OSM Shipping v liability to the employees it hired. According to Catan v. National Labor Relations Commission , “this must be so,
NLRC because the obligations covenanted in the [manning] agreement between the local agent and its foreign principal
are not coterminus with the term of such agreement so that if either or both of the parties decide to end the
agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all
end, but the same extends up to and until the expiration of the, employment contracts of the employees recruited
and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose
for which the law governing the employment of workers for foreign jobs abroad was enacted.”
ART 57-111
Prior approval by the DOLE of the proposed apprenticeship program is a condition sine qua non before an
Nieto v NLRC
apprenticeship agreement can be validly entered into.
The clause “within the scope of their assigned tasks” for purposes of raising the presumption of liability of an
Filamer v IAC employer, includes any act done by an employee, in furtherance of the interests of the employer or for the
account of the employer, at the time of the infliction of the injury or damage.
Handicapped workers can be regular workers. Art. 280 of the Labor Code provides that an employment shall be
deemed regular where the employee has been engaged to perform activities which are usually necessary or
Bernardo v NLRC
desirable in the usual business and trade of the employer. An employee, who has rendered at least one year of
service, whether continuous or broken, shall be considered as regular employee.
"Managerial employees" refers to those whose primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof, and to other officers or members of the
Mcleod v NLRC managerial staff. Article 82, Title I, Book Three of the Labor Code, on Working Conditions and Rest Periods,
provides: The provisions of this title shall apply to employees in all establishments and undertakings whether for
profit or not, but not to xxx managerial employees xxx.
Article 82 of the LC provides that a “Field personnel” shall refer to non-agricultural employees who regularly
perform their duties away from the principal place of business or branch office of the employer and whose actual
Duterte v hours of work in the field cannot be determined with reasonable certainty. To determine whether or not one is a
Kingswood field employee, it is necessary to ascertain if the actual hours of work in the field can be determined with
reasonable certainty by the employer (i.e. required to be at specific places, specific times) and his performance are
constantly supervised by the employer.
Aside from the four-fold (control) test, which the courts usually apply in determining the existence of the ER-EE
relationship, there is also the two-tiered (economic dependence) test. Two-tiered (economic dependence) test
involves (a) the putative employer’s power to control the employee with respect to the means and methods by
which work is to be accomplished; and (b) the underlying economic realities of the activity or relationship.
Thus, the determination of the relationship between employer and employee depends upon the circumstances of
Francisco v NLRC the whole economic activity, such as: (1) the extent to which the services performed are an integral part of the
employer’s business; (2) the extent of the worker’s investment in equipment and facilities; (3) the nature and
degree of control exercised by the employer; (4) the worker’s opportunity for profit and loss; (5) the amount of
initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the
permanency and duration of the relationship between the worker and the employer; and (7) the degree of
dependency of the worker upon the employer for his continued employment in that line of business.
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the four-fold
test, namely: (1) the manner of selection and engagement; (2) the payment of wages; (3) the presence or absence
of the power of dismissal; and (4) the presence or absence of the power of control. Of these four, the last one is
the most important. The so-called "control test" is commonly regarded as the most crucial and determinative
Lopez v Bodega indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-
City employee relationship exists where the person for whom the services are performed reserves the right to control
not only the end achieved, but also the manner and means to be used in reaching that end.
In this case, EER was not established. The relationship between Lopez (lady-keeper) and Yap (owner of Bodega)
was based on a concessionaire agreement. Since Yap terminated her within the terms of the agreement, in the
absence of EER, Bodega cannot be made liable for illegal dismissal.
As a general rule, the right to transfer or reassign an employee is recognized as an employer's exclusive right and
the prerogative of management
Settled is the rule in this regard that an employer, except when cited by special laws, has the right to regulate,
according to his own discretion and judgment, all aspects of employment, which includes, among others, hiring,
work assignments, place and manner of work, working regulations and transfer of employees in accordance with his
Abott v NLRC operational demands and requirements.
By the very nature of his employment, a drug salesman or medical representative is expected to travel. He should
anticipate reassignment according to the demands of their business. It would be a poor drug corporation which
cannot even assign its representatives or detail men to new markets calling for opening or expansion or to areas
where the need for pushing its products is great. More so if such reassignments are part of the employment
contract.
There was an illegal reduction of work hours when Linton implemented a compressed workweek by reducing
from six to three the number of working days with the employees working on a rotation basis.In the case at bar,
the reduction of work hours was not justified considering that the alleged loss of P3,645,422.00 in 1997 is
insubstantial compared to Linton’s total asset of P1,065,948,601.76. Also, while Linton suffered from losses for
1997-1998, there remained enough earnings to sufficiently sustain its operations. Management has the prerogative
to come up with measures to ensure profitability or loss minimization. However, such privilege is not absolute.
Linton v Hellera
Management prerogative must be exercised in good faith and with due regard to the rights of labor.
For retrenchment to be justified, any claim of actual or potential business losses must satisfy the following
standards: (1) the losses incurred are substantial and not de minimis; (2) the losses are actual or reasonably
imminent; (3) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected
losses; and (4) the alleged losses, if already incurred, or the expected imminent losses sought to be forestalled, are
proven by sufficient and convincing evidence.

Aribitrator committed GAD when it failed to take into consideration the admission of the Union in its position
paper that they were already paid their holiday pay and ignoring the company's use of 360-divisor when in fact,
Leyte IV v the minimun allowable divisor is 263 (-102 for all weekends of the year) and they clearly had a divisor way beyond
LEYECO the minimum. The Union's argument that the CBA explicitly requires that holiday pay be actually reflected in the
pay slip will not prosper against the REAL fact that these benefits have been paid. It would be unjust to demand
more from the company when they have in essence complied.
From Article 92 of the Labor Code, as amended by Presidential Decree 850, and Article 82 of the same Code, it is
clear that monthly paid employees are not excluded from the benefits of holiday pay. However, the implementing
rules on holiday pay promulgated by the then Secretary of Labor excludes monthly paid employees from the said
benefits by inserting, under Rule IV, Book Ill of the implementing rules, Section 2, which provides that:
“employees who are uniformly paid by the month, irrespective of the number of working days therein, with a
salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the
month whether worked or not.” SC HELD: such construction is so erroneous and the same must be declared as
null and void. So long, as the regulations relate solely to carrying into effect the provisions of the law, they are
valid. Where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, the
mandate of the Act must prevail and must be followed.
IBAA v Inciong Echoed the 4 fold test to determine EER (selection and engagement, control, power to dismiss and payment of
wages), and that "control" is the most important.
An Independent Contractor, defined. An IC is one who carries on a distinct and independent business and
undertakes to perform the job, work, or service on its own account and under its responsibility according to its
own manner and method, free from control and direction of the principal in all matters connected with
performance of the work except as to the results thereof. In this case, evidence showed that the employee
performed his work as a painter under the supervision and control of the cinema owner (TAN), thus EER exist.
WIth EER existing, issue of illegal dismissal can be entertained. Lagrama was illegally dismissed, no just cause or
due process in the manner of dismissal. Employer failed to establish abandonment (no failure to report to work
with just cause and no clear intent to sever EER).
2 types of piece rate worker: supervised (where EER exists) and unsupervised (no EER exists). In this case,
Tan v Lagrama
Lagrama was the former.
Any issue regarding the compulsory coverage of the SSS is well within the exclusive domain of the petitioner SSC
(Social Security Commission). It is important to note, though, that the mandatory coverage under the SSS Law is
premised on the existence of an employer-employee relationship except in cases of compulsory coverage of the
self-employed. But the question on the existence of an employer-employee relationship for the purpose of
determining the coverage of the Social Security System is explicitly excluded from the jurisdiction of the NLRC
and falls within the jurisdiction of the SSC.
Republic v Asia Pro As previously pointed out by this Court, an employee-employer relationship actually exists between the
respondent cooperative and its owners-members. The four elements in the four-fold test for the existence of an
employment relationship have been complied with. The respondent cooperative must not be allowed to deny its
employment relationship with its owners-members by invoking the questionable Service Contracts provision,
when in actuality, it does exist. The existence of an employer-employee relationship cannot be negated by
expressly repudiating it in a contract, when the terms and surrounding circumstances show otherwise. The
employment status of a person is defined and prescribed by law and not by what the parties say it should be.
There is a lien in favor of the employees as provided under Article 110 of the Labor Code. The phrase in Art 110
of the Labor Code that "any provision of law to the contrary notwithstanding" indicates that such preference
shall prevail despite the order set forth in Articles 2241 to 2245 of the Civil Code. No exceptions were provided
under the said article. In Article 110 of the Labor Code as amended, the unpaid wages and other monetary claims
of workers should be paid in full before the claims of the Government and other creditors. Thus not even tax
claims could have preference over the workers' claim
Petitioner contends that the claim for termination pay should not be enforced against AMEX properties
PNB v Cruz mortgaged to petitioner PNB because Article 110 of the Labor Code refers only to "wages due them for services
rendered during the period prior to bankruptcy or liquidation.” This contention is bereft of merit. The respondent
Commission noted that "AMEX failed to adduce convincing evidence to prove that the financial reverses were
indeed serious. Termination pay is reasonably regarded as forming part of the remuneration or other money
benefits accruing to employees or workers by reason of their having previously rendered services. Hence,
separation pay must be considered as part of remuneration for services rendered or to be rendered. Article 110 of
the Labor Code, as amended, now provides that the workers' preference covers not only unpaid wages but also
other monetary claims. In this case, SC held that payment of termination pay is deemed proper.

• In case of retrenchment to prevent losses, Article 283 of the Labor Code imposes on the employer an obligation
to grant the affected employees separation pay equivalent to 1 month pay or at least ½-month pay for every year
of service, whichever is higher. The rationale for this is that it is the employer’s obligation to pay an illegally
dismissed employee the salary and benefits he would have received if he had not stopped working; and the same
holds true in the case of retrenched employees.
• What exactly do you mean by “pay”? “Pay” – or “wage”, under Article 97(f) is defined as “the remuneration or
earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a
time, task, piece, or commission basis, payable by an employer to an employee under a contract of employment
for work done or to be done, or for services and includes the fair and reasonable value, as determined by the
Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee.”
Millares v NRLC •The term “customarily furnished” is founded on long-established and constant practice connoting regularity. The
receipt of allowance ipso facto does not characterize it as regular, because the nature of the grant is worth
considering. In this case, when the conditions for availment ceased to exist, the allowance reached the cutoff
point.
• With regard to the term “facilities,” Section 5 of the Implementing Rules of the Labor Code defines it as
“including articles or services for the benefit of the employee or his family but excluding tools of the trade or
articles or service primarily for the benefit of the employer or necessary to the conduct of his business.”
• The Staff Manager’s allowance may fall under “lodging” but the transportation and Bislig allowances are not
embraced in “facilities” since they are granted for PICOP’s benefit and convenience, i.e. to insure that petitioners
render quality performance. Also, such allowances were not subjected to withholding tax.
• In determining whether a privilege is a facility, the criterion is not so much its kind, but its purpose. SC HELD:
such allowance did not form part of salary.
Gaa contends that her salary cannot be garnished due to Article 1708 of the civil code (The Laborer’s wage shall not
be subject to execution or attachment except for debts incurred in food, shelter, clothing, and medical attendance.) The SC held that
Gaa is not an ordinary rank and file employee, but a building administrator responsible for planning, directing,
Gaa v CA controlling and coordinating the activities of El Grande Hotel. A such, she receives SALARIES, and not WAGES.
Wages as distinguished salary applies to the compensation for manual labor, skilled, or unskilled, paid at the stated
times and measured by the day, week, month, or season while salary denotes a higher degree of employment or a
superior grade of services and implies a position of office.
FACT: a few weeks after the salary increase for the year 2001 became effective, TSPIC’s Human Resources
Department notified 24 employees, that due to an error in the automated payroll system, they were overpaid and
the overpayment would be deducted from their salaries in a staggered basis, starting February 2001. TSPIC
explained that the correction of the erroneous computation was based on the crediting provision of Sec. 1, Art. X
of the CBA
ISSUE: Whether or not the acts of the management in making deductions from the salaries of the affected
employees constituted diminution of pay.
TSPIC maintains that charging the overpayments made to the 16 respondents through staggered deductions from
their salaries does not constitute diminution of benefits.
SC RULED IN FAVOR OF TSPIC Corp.

• Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the
TSPIC v TSPIC employees. There is diminution of benefits when it is shown that: (1) the grant or benefit is founded on a policy
Employee Union or has ripened into a practice over a long period; (2) the practice is consistent and deliberate; (3) the practice is not
due to error in the construction or application of a doubtful or difficult question of law; and (4) the diminution or
discontinuance is done unilaterally by the employer.
• As correctly pointed out by TSPIC, the overpayment of its employees was a result of an error. This error was
immediately rectified by TSPIC upon its discovery. We have ruled before that an erroneously granted benefit may
be withdrawn without violating the prohibition against non-diminution of benefits. No vested right accrued to
individual respondents when TSPIC corrected its error by crediting the salary increase for the year 2001 against
the salary increase granted under WO No. 8, all in accordance with the CBA.
The CBA contained that “the salary/wage increase for the year 2001 shall be deemed inclusive of the mandated
minimum wage increases under future wage orders that may be issued after Wage Order No. 7. The parties have
unequivocally agreed to substitute the benefits granted under the CBA with those granted under wage orders, the
agreement must prevail and be given full effect. Union cannot claim both benefit of the wage order, on top of the
CBA; crediting provision of the CBA will prevail.
Teaching overloads cannot be included as basis for the computation of the 13th month pay. Overload pay may not
Letran v NLRC be considered as part of the teacher’s basic salary because it is being paid for extra work in excess of the regular
teaching load.
For the computation of the 13th Month Pay, the computation of Honda which excluded the 31 strike days was
held invalid. The CBA did not state whether the bonus would be based on the basic salary or on the compensation
Honda V Samahan
actually received. Thus, the ambiguity was resolved in favor of the employees. The Pro rata computation for the
13th month pay can only be applied in cases of resignation.

Phil Duplicators v Whether or not a bonus forms part of wages depends on the conditions for its payment. If it is paid only if
NLRC profits are realized or a certain amount of productivity is achieved then it cannot be considered part of wages.
On the question of whether a yearly lump sum pay is a bonus or a benefit was held to be a bonus in this case. The
distribution being merely discretionary, the year end lump sum pay may properly be considered as a year-end
bonus or incentive. The amounts paid to petitioner varied and was always dependent upon the firm's financial
Protacio v
condition. A bonus is an act of liberality of the giver. It is something given in addition to what is ordinarily
Mananghaya
received by the recipient. The granting of bonus is a management prerogative which cannot be forced upon the
employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside
from the employee's basic salary or wages.
The granting of bonus is a management prerogative , it is something given in addition to what is ordinarily
received by or strictly due the recipient. Thus a bonus is not demandable and enforceable except when it is made
American Wire and
part of the wage, salary or compensation of the employee. For a bonus to be enforceable, it must have been: 1.
Cable Rate
Promised by the employer and expressly agreed upon by the parties. 2. It must have a fixed amount 3. It must have
Employee Union v
been a long and regular practice of the employer. In this case, the benefits in question were never subject of an
American Wire
express agreement between the parties. They were never incorporated in the CBA. Further, there was no proof
that these entitlements were the long and regular practice of the company.
In this case, petitioners were held to be the employees of BCC and not of FEBTC. Respondent BCC need not
prove that it made investments in the form of tools, equipment and machineries because it has established that it
Neri v NLRC has sufficient capitalization. Both the Labor Arbiter and the NLRC determined that BCC had a capital stock of 1
Million. BCC is therefore a highly capitalized venture and cannot be deemed as engaged in "labor only"
contracting. Also, by applying the 4-fold test, it appears that BCC is the employer of petitioners.
PMCI is a labor only contractor. It does not have substantial capitalization. Although it has P1,000,000 authorized
capital stock, only P75,000 was actually paid in, as compared to the case of NERI vs NLRC wherein BCC had 1
Vinoya v NLRC
Million fully subscribed capital stock. Further, PMCI did not carry an independent business nor did it undertake
the performance of its contract according to its own manner and method.
INTERSERVE is not a legitimate job contractor. Although it has an authorized capital stock amounting to
P2,000,000, only P625,000 thereof was paid up. The Court does not set an absolute figure for what it considers
substantial capital for an independent job contractor, but it measures the same against the type of work which the
CCBPI v Aguito contractor is obligated to perform for the principal. However, this is impossible to determine in this case since the
contract between petitioner and INTERSERVE does not even specify the work that needs to be performed by the
latter's employees. Thus, the Court, cannot, under such ambiguous circumstance, make a reasonable determination
if INTERSERVE had substantial capital or investment.
HELPMATE is a legitimate job contractor. A person is engaged in legitimate job contracting if the following
conditions concur: 1. The contractor or subcontractor carries on a distinct and independent business and
undertakes to perform a job or service on its own account and according to its own manner and method, and free
from the control and direction of the principal in all matters connected with the performance of the work except
as to the result thereof. 2. The contractor or subcontractor has substantial capital or investment. 3. The agreement
Sasan v NLRC
between the principal and contractor assures the contractual employees entitlement to all labor and accupational
safety and health standards, security of tenure and, social and welfare benefits. HELPMATE is a legitimate job
contractor as evidenced by the DOLE Certificate of Registration. Having been issued by a public officer, this
certification carries with it the presumption that it was issued in the regular performance of official duty. In the
absence of proof, petitioner's bare assertions cannot prevail over this presumption.
Jay Sonza was an independent contractor. EER does not exist. Thus jurisdiction over this case belongs to the
regular courts. MJMD is not a labor only contractor nor a legitimate job contractor because Sonza failed to show
Sonza v ABS-CBN
that MJMD is engaged in any other business. It merely acts to promote Mel and Jay's carrers. Thus what is more
tenable is that MJMD is only an agent of Sonza.
Petitioner was a regular employee. The law provides for 2 kinds of regular employees namely: 1. Those who are
engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer. 2. Those who have rendered at least 1 year of service, whether continuous or broken, with respect to
Murillo v CA the activity in which they are employed. ***Thus regular status arises either from the nature of work of the
employee or the duration of his employment. With respect to "fixed-term employment", the same will not be
considered valid where it is apparent that periods have been imposed to preclude acquisition of tenurial security
by the employee.
There is EER in this case between petitioner which is a privately owned hospital and doctor- spouses Lanzanas.
EER is not severed by the sharing of some hospital fees. This merely mirrors an additional form of compensation
or incentive similar to what commission-based employees receive as contemplated in Article 97(f) of the labor
code. Further, petitioner hospital enrolled respondents in the SSS and Medicare. It bears noting that the
Calamba Medical
mandatory coverage under the SSS Law is premised on the existence of EER except in cases of compulsary
Center v NLRC
coverage of the self employed. Furthermore, EER exists between the resident physicians and the training
hospitals unless there is a training agreement between them and the training program is duly accredited by the
appropriate gov't agency. In this case, respondents were not undergoing any specialization training. They were
considered non-training general practitioners assigned at the emergency rooms and ward sections.

Under Articles 106, 107 and 109 of the Labor Code, the joint and several liability of the contractor and the
principal is mandated to assure compliance of the provisions therein including the statutory minimum wage. The
contractor is made liable by virtue of his status as direct employer. On the other hand, the principal, is made the
Jaguar v Sales indirect employer of the contractor's employees for purposes of paying the employees their wages should the
contractor be unable to pay them. This joint and several liability facilitates, if not guarantees, payment of the
workers' performance of any work, task, job or project, thus giving the workers ample protection as mandated by
the 1987 Constitution.
In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to
ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with
SMC v Maerc
the job contractor only for the payment of the employees' wages whenever the contractor fails to pay the same.
Other than that, the principal employer is not responsible for any claim made by the employees.
There are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary.
In its ordinary concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal
services the former has rendered to the latter. The basis of this compensation is the fact of the attorney's
employment by and his agreement with the client.
In its extraordinary concept, attorney's fees are deemed indemnity for damages ordered by the court to be paid by
the losing party in a litigation. The instances in which these may be awarded are those enumerated in Article 2208
Ortiz v SMC of the Civil Code, specifically paragraph 7 thereof, which pertains to actions for recovery of wages, and is payable
not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional
compensation or as part thereof. Article 111 of the Labor Code, as amended, contemplates the extraordinary
concept of attorney's fees.
Article 111 is an exception to the declared policy of strict construction in the awarding of attorney's fees.
Although express findings of fact and law are still necessary to prove the merit of the award, there need not be
any showing that the employer acted maliciously or in bad faith when it withheld the wages.
In the first Rubberworld case, the Court upheld the applicability of PD 902-A to labor cases pursuant to Section
5(d) and Section 6(c) thereof, with the following pronouncements:
“It is plain from the foregoing provisions of the law that "upon the appointment [by the SEC] of a management
committee or a rehabilitation receiver," all actions for claims against the corporation pending before any court,
tribunal or board shall ipso jure be suspended. The justification for the automatic stay of all pending actions for
claims "is to enable the management committee or the rehabilitation receiver to effectively exercise its/his powers
Lingkod ng free from any judicial or extra-judicial interference that might unduly hinder or prevent the rescue of the debtor
Manggagawa v company. To allow such other actions to continue would only add to the burden of the management committee or
Rubberworld rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the
corporation instead of being directed toward its restructuring and rehabilitation."
The law is clear: upon the creation of a management committee or the appointment of a rehabilitation receiver, all
claims for actions shall be suspended accordingly." No exception in favor of labor claims is mentioned in the law.
Since the law makes no distinction or exemptions, neither should this Court.
True, the NLRC has the power to hear and decide labor disputes, but such authority is deemed suspended when
PD 902-A is put into effect by the Securities and Exchange Commission.
NLRC cannot validly set it off against the wages and other benefits due petitioner. Article 113 of the Labor Code
allows such a deduction from the wages of the employees by the employer, only in three instances, to wit:
ART. 113. Wage Deduction. — No employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:
Apodaca v NLRC (a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the
employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to checkoff has been recognized by the
employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor.
The employer may not deduct its so-called "share" from the salaries of its guards without the latter's express
Commando v consent and if such deductions are not allowed by law. This is notwithstanding any previous agreement or
NLRC understanding between them. Any such agreement or contract is void ab initio being contrary to law and public
policy.

The NWPC, not the RTWPB, has the power to "prescribe the rules and guidelines" for the determination of
minimum wage and productivity measures. While the RTWPB has the power to issue wage orders under Article
122 (b) of the Labor Code, such orders are subject to the guidelines prescribed by the NWPC.
However, the NWPC has the power not only to prescribe guidelines to govern wage orders, but also to issue
exemptions therefrom, as the said rule provides that "[w]henever a wage order provides for exemption,
applications thereto shall be filed with the appropriate Board which shall process the same, subject to guidelines
Nasipit v NWPC issued by the Commission. Significantly, the NWPC authorized the RTWPB to issue exemptions from wage
orders, but subject to its review and approval.
Article 122 (e) of the Labor Code cannot be construed to enable the RTWPB to decide applications for
exemption on the basis of its own guidelines which were not reviewed an approved by the NWPC, for the simple
reason that a statutory grant of "powers should not be extended by implication beyond what may be necessary for
their just and reasonable execution. Official powers cannot be merely assumed by administrative officers, nor can
they be created by the courts in the exercise of their judicial functions.
The legislators provide for the creation of Regional Tripartite Boards composed of representatives from the
government, the workers and the employers to determine the appropriate wage rates per region to ensure that all
sides are heard.
For the same reason, Article 123 of the Labor Code also provides that in the performance of their wage-
determining functions, the Regional Board shall conduct public hearings and consultations, giving notices to
Cagayan v Secretary
interested parties. Moreover, it mandates that the Wage Order shall take effect only after publication in a
newspaper of general circulation in the region. It is a fundamental rule, borne out of a sense of fairness, that the
public is first notified of a law or wage order-before it can be held liable for violation thereof.
Here: RO2-02-A is invalid for lack of public consultations and hearings and non-publication in a newspaper of
general circulation, in violation of Article 123 of the Labor Code.
R.A. No. 6727, the Wage Rationalization Act, explicitly defines wage distortion as:
a situation where an increase in prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length
of service, or other logical bases of differentiation.
PI Manufacturing v
Otherwise stated, wage distortion means the disappearance or virtual disappearance of pay differentials between
PI Manufacturing
lower and higher positions in an enterprise because of compliance with a wage order.
Supervisor's Union
The re-establishment of a significant gap or differential between regular employees and casual employees by
operation of the CBA was more than substantial compliance with the requirements of the several Wage Orders
(and of Article 124 of the Labor Code).
That this re-establishment of a significant differential was the result of collective bargaining negotiations, rather
than of a special grievance procedure, is not a legal basis for ignoring it.
Wage Distortion
* a situation where an increase in prescribed wage rates results in the elimination or severe contradiction of
intentional quantitative differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length
of service, or other logical bases of differentiation.
* such distortion can so exist when, as a result of an increase in the prescribed wage rate, an "elimination or severe
Metrobank v NLRC contraction of intentional quantitative differences in wage or salary rates" would occur "between and among
employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases of differentiation."
In mandating an adjustment, the law did not require that there be an elimination or total abrogation of
quantitative wage or salary differences; a severe contraction thereof is enough.
FORMULA for wage adjustment

(Minimum Wage/Actual Salary)x % Prescribed Increase = Distortion Adjustment

Wage distortion presupposes a classification of positions and ranking of these positions at various levels. One
visualizes a hierarchy of positions with corresponding ranks basically in terms of wages and other emoluments.
Where a significant change occurs at the lowest level of positions in terms of basic wage without a corresponding
change in the other level in the hierarchy of positions, negating as a result thereof the distinction between one
level of position from the next higher level, and resulting in a parity between the lowest level and the next higher
level or rank, between new entrants and old hires, there exists a wage distortion.
The concept of a wage distortion assumes an existing grouping or classification of employees which establishes
distinctions among such employees on some relevant or legitimate basis. This classification is reflected in a
differing wage rate for each of the existing classes of employees.
Wage distortion involves four elements:

Prubankers v
1. An existing hierarchy of positions with corresponding salary rates
Prubankers
2. A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a
Association
higher one
3. The elimination of the distinction between the two levels
4. The existence of the distortion in the same region of the country
It is the hierarchy of positions and the disparity of their corresponding wages and other emoluments that are
sought to be preserved by the concept of wage distortion.
Put differently, a wage distortion arises when a wage order engenders wage parity between employees in different
rungs of the organizational ladder of the same establishment. It bears emphasis that wage distortion involves a
parity in the salary rates of different pay classes which, as a result, eliminates the distinction between the different
ranks in the same region.
The difference in wages between employees in the same pay scale in different regions is not the mischief sought to
be banished by the law.
In the particular instance of "distortions of the wage structure within an establishment" resulting from "the
application of any prescribed wage increase by virtue of a law or wage order," Section 3 of Republic Act No. 6727
prescribes a specific, detailed and comprehensive procedure for the correction thereof, thereby implicitly excluding
strikes or lockouts or other concerted activities as modes of settlement of the issue.
The provision states that —. . . the employer and the union shall negotiate to correct the distort-ions. Any dispute
arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining
agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in
writing, such dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10)
calendar days from the time said dispute was referred to voluntary arbitration.
In cases where there are no collective agreements or recognized labor unions, the employers and workers shall
endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National
IBM v NLRC
Conciliation and Mediation Board and, if it remains unresolved after ten (10) calendar days of conciliation, shall
be referred to the appropriate branch of the National Labor Relations Commission (NLRC). It shall be mandatory
for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) calendar days from the
time said dispute is submitted for compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any
increase in prescribed wage rates pursuant to the provisions of law or Wage Order.
The legislative intent is that solution of the problem of wage distortions shall be sought by voluntary negotiation
or arbitration, and not by strikes, lockouts, or other concerted activities of the employees or management.
Wage distortions must be first settled voluntarily by the parties and eventually by compulsory arbitration.
"Any issue involving wage distortion shall not be a ground for a strike/lockout.”

o The TEST to determine the existence of independent contractorship is whether one claiming to be an
independent contractor has contracted to do the work according to his own methods and without being subject to
the control of the employer, except only as to the results of the work
o In LOC, the statute creates an EER for a comprehensive purpose – to prevent a circumvention of labor laws
o The language of a contract is not determinative of the parties’ relationship – it is the totality of the
facts and surrounding circumstances of the case
• Where it is shown that the worker’s daily time records were signed by the principal and control of the premises in which they
worked was by the principal, these tends to disprove the independence of the contractor who engaged the services of the workers
• Contractor’s workers had been working alongside regular employees of the principal, performing identical jobs under the same
supervisors ~ another idicium of the existence of LOC
o 2 kinds of regular employees:
• Those engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer
SMC v Aballa • Those who have rendered at least 1 year of service, whether continuous or broken
o Workers who were engaged in janitorial and messengerial tasks fall under the category of regular employees who have rendered at
least one year of service and are entitled to differential pay and benefits extended to other regular employees
o Retrenchment – where a particular department under a corporate group of companies was closed allegedly due
to serious business reverses (not tantamount to closure); Requisites:
• Losses expected should be substantial and not merely de minimis in extent
• Substantial losses apprehended must be reasonably imminent such as can be perceived objectively and in good faith by the employer
• Retrenchment must be reasonably necessary and likely to effectively prevent the expected losses
• Alleged losses, if already incurred, and the expected imminent losses sought to be forestalled, must be proved by sufficient and
convincing evidence
o Where the dismissal is based on an authorized cause under Art. 283 of the Labor Code but the employer failed
to comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the
employer’s exercise of his management prerogative, as opposed to dismissal based on a just cause under Art. 282
o Applying the 4-fold test, Coca-Cola lacked effective control over medical doctor Dr. Dean Climaco
o The ‘Comprehensive Medical Plan’ merely provided guidelines to ensure that the end result was achieved, but
did not control the means and methods by which respondent performed his assigned tasks
Coca Cola v Dr.
o The schedule of work and the requirement to be on call for emergency cases do not amount to such control,
Climaco
but are necessary incidents to the Retainership Agreement
o Petitioner did not wield the sole power of dismissal or termination
o Since there is no EER, the termination of the Retainership Agreement does not amount to illegal dismissal
o Job contracting is permissible only if the following conditions are met:
• The contractor 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
• The contractor has substantial capital or investment in the form of tools, equipment, machineries, work
Lakas v Burlingame
premises, and other materials which are necessary in the conduct of the business
o In labor-only contracting, the law creates an EER to prevent a circumvention of labor laws
• Contractor is considered merely an agent of the principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees had been directly employed by the principal
employer
o Preferential right of workers and employees under Art. 110 of the Labor Code may be invoked only during
bankruptcy or liquidation proceedings (with formal declaration of B or L)
o Power or court in the execution of its judgment extends only to properties unquestionably belonging to
judgment debtor
o Preference of credit points out solely on the order in which creditors would e paid from the properties of a
DBP v Sec of Labor
debtor inventoried and appraised during bankruptcy, insolvency, or liquidation proceedings
• Does not exist in any effective way prior to, and apart from, the institution of these proceedings, for it is only then that the legal
provisions on concurrence and preference of credits begin to apply
o Unlike a lien, which creates, in favor of the preferred creditor, a charge or proprietary interest upon any
particular property of the debtor
o The existence of an EER cannot be made the subject of an agreement
• Hence, the fact that the manpower supply agreement between Livi and CMC had specifically designated the former as petitioner’s
employer, will not erase either party’s obligation as an employer, if EER actually exists
Tabas v CMC o The LOC is considered merely an agent of the employer, liability therefore must be shouldered by either one or
shared by both
o A temporary or casual employee becomes regular after service of 1 year, unless he has been contracted for a
specific project

o Serrano was hired by Isetann as a ‘security checker’ to apprehend shoplifters and prevent pilferage of
merchandise, he later became the head of the Security Checker Section
o Sometime in 1991, as a cost-cutting measure, the entire security section was phased out, hence a complaint for
illegal dismissal
o There was no illegal dismissal since it was made in the exercise of Isetann’s management prerogative (dismissal
was based on redundancy; authorized cause)
Serrano v NLRC,
o Court will not interfere with the exercise of such prerogative (legitimate business decision)
ISETANN
o Where the dismissal of one employee is in fact for a just and valid cause and is so proven to be but he is not
accorded his right to due process, such as when he was not furnished the twin requirements of notice and
opportunity to be heard, the dismissal shall be upheld but the employer must be sanctioned for non-compliance
with the requirements of, or for failure to observe, due process
• Lack of notice only makes termination ineffectual, hence the employer is liable for backwages from the time of dismissal until such
time as when the dismissal becomes valid and notice is met
o The joint and several liability of the contractor and the principal is mandated by the Labor Code to assure
compliance of the provisions therein including the statutory minimum wage
• Contractor ~ direct employer
• Principal ~ indirect employer
Eagle Services v
o Solidary liability does not preclude the right of reimbursement from the co-debtor by the one who paid
NLRC
o Wage orders are labor standard legislations enacted to alleviate the plight of the workers whose wages barely
meet the spiraling costs of their basic needs
• Requires the amendment of the contract as to the consideration
o It is not tantamount to impairment of contracts since it is enacted pursuant to the police power of the State
ART 112-155
• Apply DO 18-02, meet requirement, apply 4-fold test, determine EER, then determine LOC/Indep Contractor.
Merchandisers can be contracted out provided that 3rd party is a legal independent contractor; case echoed
decision in the case of VINOYA v NLRC---the expanded requisites to determine LOC/Indep Contractor. • D.L.
Admark is a legitimate independent job contractor as evidenced by: [1] the SEC registration certificate of D.L.
Admark states that it is a firm engaged in promotional, advertising, marketing and merchandising activities; [2]
The service contract between CMC and D.L. Admark clearly provides that the agreement is for the supply of sales
promoting merchandising services rather than one of manpower placement; [3] D.L. Admark was actually engaged
in several activities, such as advertising, publication, promotions, marketing and merchandising. It had several
merchandising contracts with companies like Purefoods, Corona Supply, Nabisco Biscuits, and Licron. It was
likewise engaged in the publication business as evidenced by it magazine the "Phenomenon;" and [4] It had its
own capital assets to carry out its promotion business. It then had current assets amounting to P6 million and is
Escario vs NLRC, therefore a highly capitalized venture. It had an authorized capital stock of P500,000.00. It owned several motor
June 8, 2000 vehicles and other tools, materials and equipment to service its clients. It paid rentals of P30,020 for the office
space it occupied.
• Applying the four-fold test(selection and engagement of services, payment of wages, power of dismissal, power
of control), it also shows that D.L. Admark is indeed the employer of the petitioners. As regards the first element,
petitioners themselves admitted that D.L. Admark was the one who hired them. As to the second element, D.L.
Admark was able to present sufficient evidence i.e. payrolls, SSS contribution forms, that they are indeed the ones
paying the petitioners’ wages. As to the third element, petitioners again admitted that D.L. Admark was the one
that terminated them. As to the last element, petitioners presented the memoranda prepared by CMC’s
promotions manager. It allegedly shows that petitioners are under the control of CMC. However, a closer scrutiny
of the document will reveal that nothing therein would remotely suggest that CMC was supervising and
controlling the work of the petitioners. The memoranda was addressed to the store owners or “regular”
merchandisers of CMC, not to the petitioners.

Burden of proof to establishment payment of claims is upon the EMPLOYER. Non-production of
evidence, gives a presumption that evidence is detrimental/adverse to their cause or interest.The
Company illegally dismissed De Guzman and failed to sustain its contention that he abandoned his
work.
• To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without
valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second
element as the more determinative factor and being manifested by some overt acts. Mere absence is not sufficient.
The burden of proof is on the employer to show an unequivocal intent on the part of the employee to
discontinue employment. In this case, the company failed to discharge this burden.
• Under Article 286 of the Labor Code, the bona fide suspension of the operation of a business or undertaking
for a period not exceeding six months shall not terminate employment. Consequently, when the bona fide
suspension of the operation of a business or undertaking exceeds six months, then the employment of the
employee shall be deemed terminated. By the same token and applying said rule by analogy, if the employee was
forced to remain without work or assignment for a period exceeding six months, then he is in effect constructively
dismissed.
• Moreover, as correctly observed by the CA, “[t]he last two communications (Memoranda dated September 26,
1995 and October 11, 1995) sent to petitioner can hardly be considered as a subsequent notice of termination.”
This shows that the dismissal of petitioner was procedurally defective.
De Guzman is entitled to the money claims as the Company failed to prove payment
• The NLRC and the CA have been remiss in not ruling on this issue even if petitioner consistently raised the
same in his pleadings as an employee’s entitlement to labor standard benefits is a separate and distinct concept
from payment of separation pay arising from illegal dismissal, and is governed by different provisions of the
De Guzman vs Labor Code.
NLRC, 540 SCRA • It is settled that once the employee has set out with particularity in his complaint, position paper, affidavits and
21 other documents the labor standard benefits he is entitled to, and which he alleged that the employer failed to pay
him, it becomes the employer’s burden to prove that it has paid these money claims. One who pleads payment has
the burden of proving it, and even where the employees must allege nonpayment, the general rule is that the
burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment.
• The Labor Arbiter’s denial of De Guzman’s money claims “for failure to state the particulars to substantiate the
same” is therefore erroneous. It is the company which has the burden of proof to show, by substantial evidence,
the payment of DE Guzman’s money claims. The company miserably failed to discharge this burden by
presenting, as its sole evidence, the collective bargaining agreement (CBA) between the Union and the company.
The Labor Arbiter took “judicial notice of the fact that a CBA cannot be recognized and registered unless the
provisions thereof comply with the labor standards.” Even if this is true, however, the same simply proves that
De Guzman is entitled to what are provided under the CBA. It does not prove by substantial evidence that
petitioner was indeed paid what was provided therein
• In its Reply before the Labor Arbiter, respondent company “reserve[d] the right to discuss [petitioner’s claims
for unpaid overtime pay, premium pay for holiday and rest day, service incentive leave pay] in their rejoinder as
said money claims will have to be check[ed] and re-check[ed] on respondent[‘s] records.” It even stated a warning
that “[s]hould however it be found that complainant is lying and thus committed perjury, respondents likewise
reserve the right to file any action in the proper court against him.” Private respondents, however, did not present
the pertinent employee records to prove payment of petitioner’s monetary claims. By choosing not to fully and
completely disclose information and present the necessary documents to prove payment of labor standard
benefits due to petitioner, private respondents failed to discharge the burden of proof. It is a rule that failure of
employers to submit the necessary documents which as employers are in their possession, in spite of orders to do
so, gives rise to the presumption that their presentation is prejudicial to its cause. This rule equally applies to the
instant case where respondent company undertook to present the necessary documents but failed to do the same.

You cannot be terminated on account of pregnancy (Art 137 par2)
• First, the reference to the case of FIlflex Industrial and Manufacturing Co. was wrong since it involves ‘chronic
asthmatic bronchitis’, which is intermittent as opposed to pregnancy, which is a continuing condition
• It is undisputed that respondent was pregnant and was suffering from urinary tract infection, and that her
absences were due to such facts
• In this jurisdiction tardiness and absenteeism, like abandonment, are recognized forms of neglect of duties, the
existence of which justify the dismissal of the erring employee. Respondent’s rule penalizing with discharge any
employee who has incurred six (6) or more absences without permission or subsequent justification is admittedly
within the purview of the foregoing standard.
• However, while it is not disputed that complainant incurred absences exceeding six (6) days as she actually failed
to report for work from August 15-18, 23-26, 29-31, September 1-3, 5-10, 12-17, 21-24, 26-30, and October 1-3,
1994, her being pregnant at the time these absences were incurred is not questioned and is even admitted by
respondent.
• It thus puzzles us why respondent asserts complainant failed to explain satisfactorily her absences on August 15-
18, 29-31, September 1-3 and 5-10, 1994, yet reconsidered the rest of her absences for being covered with "rest-in-
Del Monte vs quarters" (RIQ) advice from its hospital personnel when this advice was unquestionably issued in consideration of
Velasco, March 6, the physiological and emotional changes complainant, a conceiving mother, naturally developed.
2007 • Petitioner’s contention that the cause for the dismissal was gross and habitual neglect unrelated to her state of
pregnancy is unpersuasive.
• Art. 137. Prohibited acts. – It shall be unlawful for any employer:
(1) To deny any woman employee the benefits provided for in this Chapter or to discharge any woman
employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code;
(2) To discharge such woman on account of her pregnancy, while on leave or in confinement due to her
pregnancy; or
(3) To discharge or refuse the admission of such woman upon returning to her work for fear that she may again
be pregnant.
• The Court finds no cogent reason to disturb the findings of the NLRC and the CA that the respondent was able
to subsequently justify her absences in accordance with company rules and policy; that the respondent was
pregnant at the time she incurred the absences; that this fact of pregnancy and its related illnesses had been duly
proven through substantial evidence; that the respondent attempted to file leaves of absence but the petitioner’s
supervisor refused to receive them; that she could not have filed prior leaves due to her continuing condition; and
that the petitioner, in the last analysis, dismissed the respondent on account of her pregnancy, a prohibited act.
• A staffhouse housekeeper is a regular employees and enjoys all rights granted by the LC. As a regular employee,
she enjoys the "dismissal only for just cause". Rule XIII, Section l(b), Book 3 of the Labor Code
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.
• The definition contemplates such househelper or domestic servant who is employed in the employer's home to
minister exclusively to the personal comfort and enjoyment of the employer's family. It cannot be interpreted to
Apex Mining vs
include househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the
NLRC, April 22,
needs of the company's guest and other persons availing of said facilities. By the same token, it cannot be
1997
considered to extend to then driver, houseboy, or gardener exclusively working in the company, the staffhouses
and its premises.
• The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer.
While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home
or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former
instance they are actually serving the family while in the latter case, whether it is a corporation or a single
proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being
rendered in the staffhouses or within the premises of the business of the employer.

YES. DE GUZMAN WAS ILLEGALLY DISMISSED
• In the case at bar, 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.
• The record discloses clearly that her ties with the company were dissolved principally because of the PT&T’s
policy that married women are not qualified for employment in PT & T, as can be seen from the memo of her
supervisor which stated, “you're fully aware that the company is not accepting married women employee (sic), as it
was verbally instructed to you."
• The 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
PTT vs NLRC, May
misrepresenting her civil status for fear of being disqualified from work.
31, 1997
• 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.
• Article 136, Labor Code provides: Stipulation against marriage. — It shall be unlawful for an employer to require
as a condition of employment or continuation of employment that a woman 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 marriage.
• There are exceptions to the stipulation against marriage – “bona fide occupational qualification: A requirement
of that nature would be valid provided it reflects an inherent quality reasonably necessary for satisfactory job
performance. Thus, in one case, a no-marriage rule applicable to both male and female flight attendants, was
regarded as unlawful since the restriction was not related to the job performance of the flight attendants.
* A cross claim by the independent contractor within the nature or a money claim (reimbursement) is within the
ambit or a regular civil action which should be heard and decided by the regular courts even if the issue sprang
from a labor issue. Neither the petitioner’s contention nor the SSS's contention is correct.
*Lapanday Agricultural Development Corporation v. Court of Appeals is the controlling case. In that case, the
security agency filed a complaint before the Regional Trial Court (RTC) against the principal or client Lapanday
for the upward adjustment of the contract rate in accordance with Wage Order Nos. 5 and 6. The RTC has
jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no
employer-employee relationship exists between the parties and no issue is involved which may be resolved by
reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial
Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but
seeks payment of a sum of money and damages on account of petitioner's alleged breach of its obligation under
their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs
to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the
Urbanes vs Hon.
labor code was only for the determination of the solidary liability of the petitioner to the respondent where no
Sec., February 19,
employer-employee relation exists.
2003
*In the case at bar, even if petitioner filed the complaint on his and also on behalf of the security guards, the
relief sought has to do with the enforcement of the contract between him and the SSS which was deemed
amended by virtue of Wage Order No. NCR-03. The controversy subject of the case at bar is thus a civil dispute,
the proper forum for the resolution of which is the civil courts.
*Petitioner has no proper cause of action. Applying Article 1217 of the NCC, the liability of the SSS to
reimburse petitioner arises only if and when petitioner pays his employee-security guards "the increases"
mandated by Wage Order No. NCR-03. The records do not show that petitioner has paid the mandated increases
to the security guards. The security guards in fact have filed a complaint with the NLRC against petitioner relative
to, among other things, underpayment of wages.
*While the resolution of the issue involves the application of labor laws, reference to the labor code was only for
the determination of the solidary liability of the petitioner to the respondent where no employer-employee
relation exists. The controversy subject of the case at bar is thus a civil dispute, the proper forum for the
resolution of which is the civil courts.

* Issue within Art 128 does not involve the 5K ceiling . Under the foregoing provisions of Articles 129 and 217
of the Labor Code, as amended, the Regional Director is empowered, through summary proceeding and after due
notice, to hear and decide cases involving recovery of wages and other monetary claims and benefits, including
legal interest, provided the following requisites are present, 5 to wit:
1) the claim is presented by an employee or person employed in domestic or household service, or househelper;
2) the claim arises from employer-employee relations;
3) the claimant does not seek reinstatement; and
4) the aggregate money claim of each employee or househelper does not exceed P5,000.00 (Art. 129, Labor Code,
as amended by R.A. 6715).
* In the absence of any of the requisites above enumerated, it is the Labor Arbiter who shall have exclusive
original jurisdiction over claims arising from employer-employee relations, except claims for employees'
compensation, social security, medicare and maternity benefits, all these pursuant to Article 217 of the Labor
Aboitiz vs dela Code, particularly paragraph six (6) thereof.
Serna, April 25, * In the case at bar, it is noted that in the Order dated 13 October 1988 of the Regional Director, the latter found
1990 each of the seven hundred seventeen (717) complainants entitled to a uniform amount of P1,884.00. All the other
requisites for the exercise of the power of the Regional Director under Article 129 of the Labor Code, as
amended by R.A. 6715, are present. It follows that the respondent Regional Director properly took cognizance of
the claims, subject of this petition.
* To the petitioner's contention that it was denied due process of law as it was not afforded time and opportunity
to present its evidence, the records show that on several occasions despite due notice, petitioner failed to either
appear at the scheduled hearings, or to present its employees' payrolls and vouchers for wages and salaries,
particularly, those covering the period from 16 February 1982 to 31 December 1985. Therefore, petitioner was not
denied due process of law.
* Petitioner also raised the issue that the complaint should have been dismissed outright, considering that there
was a compromise agreement between petitioners and respondent. But in the light of the regional Director’s
finding that the said compromise agreement was entered into by only one employee (Elizardo Manuel) in his
personal capacity.

YES, the DOLE in the exercise of its visitorial and enforcement power somehow has to make a determination of
the existence of an employer-employee relationship. Such prerogatival determination, however, cannot be
coextensive with the visitorial and enforcement power itself.
• The provision is quite explicit that the visitorial and enforcement power of the DOLE comes into play only “in
cases when the relationship of employer-employee still exists.” It also underscores the avowed objective
underlying the grant of power to the DOLE which is “to give effect to the labor standard provision of this Code
and other labor legislation.” Of course, a person’s entitlement to labor standard benefits under the labor laws
presupposes the existence of employer-employee relationship in the first place.
• The clause “in cases where the relationship of employer-employee still exists” signifies that the employer-
employee relationship must have existed even before the emergence of the controversy. Necessarily, the DOLE’s
power does not apply in two instances, namely: (a) where the employer-employee relationship has ceased; and (b)
where no such relationship has ever existed.
• It has been established that there has been no employer-employee relationship between respondents and
petitioner. Their contractual relationship was governed by the concessionaire agreement embodied in the 1992
letter. Thus, petitioner was not dismissed by respondents. Instead, as shown by the letter of Yap to her dated
February 15, 1995, their contractual relationship was terminated by reason of respondents' termination of the
subject concessionaire agreement, which was in accordance with the provisions of the agreement in case of
violation of its terms and conditions.
• In the first situation, the claim has to be referred to the NLRC because it is the NLRC which has jurisdiction in
view of the termination of the employer-employee relationship. The same procedure has to be followed in the
second situation since it is the NLRC that has jurisdiction in view of the absence of employer-employee
relationship between the evidentiary parties from the start.
• In the second situation especially, the existence of an employer-employee relationship is a matter which is not
easily determinable from an ordinary inspection, necessarily so, because the elements of such a relationship are
not verifiable from a mere ocular examination. The intricacies and implications of an employer-employee
People's relationship demand that the level of scrutiny should be far above the cursory and the mechanical. While
Broadcasting vs The documents, particularly documents found in the employer’s office are the primary source materials, what may
Sec., May 8, 2009 prove decisive are factors related to the history of the employer’s business operations, its current state as well as
accepted contemporary practices in the industry. More often than not, the question of employer-employee
relationship becomes a battle of evidence, the determination of which should be comprehensive and intensive
and therefore best left to the specialized quasi-judicial body that is the NLRC.
• It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to make
a determination of the existence of an employer-employee relationship. Such prerogatival determination,
however, cannot be coextensive with the visitorial and enforcement power itself. Indeed, such determination is
merely preliminary, incidental and collateral to the DOLE’s primary function of enforcing labor standards
provisions. The determination of the existence of employer-employee relationship is still primarily lodged with
the NLRC. This is the meaning of the clause “in cases where the relationship of employer-employee still exists” in
Art. 128 (b).
• Thus, before the DOLE may exercise its powers under Article 128, two important questions must be resolved:
(1) Does the employer-employee relationship still exist, or alternatively, was there ever an employer-employee
relationship to speak of; and (2) Are there violations of the Labor Code or of any labor law?
• The existence of an employer-employee relationship is a statutory prerequisite to and a limitation on the power
of the Secretary of Labor, one which the legislative branch is entitled to impose. The rationale underlying this
limitation is to eliminate the prospect of competing conclusions of the Secretary of Labor and the NLRC, on a
matter fraught with questions of fact and law, which is best resolved by the quasi-judicial body, which is the
NRLC, rather than an administrative official of the executive branch of the government. If the Secretary of
Labor proceeds to exercise his visitorial and enforcement powers absent the first requisite, as the dissent proposes,
his office confers jurisdiction on itself which it cannot otherwise acquire.
• A mere assertion of absence of employer-employee relationship does not deprive the DOLE of jurisdiction
over the claim under Article 128 of the Labor Code. At least a prima facie showing of such absence of
relationship, as in this case, is needed to preclude the DOLE from the exercise of its power.
• Aside from lack of jurisdiction, there is another cogent reason to to set aside the Regional Director’s 27
February 2004 Order. A careful study of the case reveals that the said Order, which found respondent as an
employee of petitioner and directed the payment of respondent’s money claims, is not supported by substantial
evidence, and was even made in disregard of the evidence on record.

Are Stipulations Against Marriage (Art 136) like the no-couple policy of Star Paper not a legal basis to terminate
PRs. Case cited the US doctrines of disparate treatment and disparate impact; test of reasonableness and the
BFOQ-bonafide occupational qualification.
<YES>
• The 1987 Constitution states our policy towards the protection of labor under the following provisions, viz.:
Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.
Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth.
• Art. 136 of the Labor Code states: 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.
• The company argues that the rule does not require the woman employee to resign. The employee spouses have
Star Paper vs the right to choose who between them should resign. Further, they are free to marry persons other than co-
Simbol, April 12, employees. Hence, it is not the marital status of the employee, per se, that is being discriminated. It is only
2006 intended to carry out its no-employment-for-relatives-within-the-third-degree-policy which is within the ambit of
the prerogatives of management.
• The policy is unreasonable compared to the cases of Duncan and PT&T. A requirement that a woman
employee must remain unmarried could be justified as a "bona fide occupational qualification," or BFOQ, where
the particular requirements of the job would justify the same, but not on the ground of a general principle, such
as the desirability of spreading work in the workplace. A requirement of that nature would be valid provided it
reflects an inherent quality reasonably necessary for satisfactory job performance.
• It is significant to note that in the case at bar, respondents were hired after they were found fit for the job, but
were asked to resign when they married a co-employee. Petitioners failed to show how the marriage of Simbol,
then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be
detrimental to its business operations. Neither did petitioners explain how this detriment will happen in the case of
Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a
helper in the cutter-machine. The policy is premised on the mere fear that employees married to each other will be
less efficient. If we uphold the questioned rule without valid justification, the employer can create policies based
on an unproven presumption of a perceived danger at the expense of an employee’s right to security of tenure.
• The contention of petitioners that Estrella was pressured to resign because she got impregnated by a married
man and she could not stand being looked upon or talked about as immoral43 is incredulous. If she really wanted
to avoid embarrassment and humiliation, she would not have gone back to work at all. Nor would she have filed a
suit for illegal dismissal and pleaded for reinstatement. We have held that in voluntary resignation, the employee is
compelled by personal reason(s) to dissociate himself from employment. It is done with the intention of
relinquishing an office, accompanied by the act of abandonment. 44 Thus, it is illogical for Estrella to resign and
then file a complaint for illegal dismissal. Given the lack of sufficient evidence on the part of petitioners that the
resignation was voluntary, Estrella’s dismissal is declared illegal.

CASE of discrimination. No discrimination if there is valid classification as in between supervisors and rank and
file. SOL assumed jurisdiction because the case was of national interest, since the prolong lock-out of the workers
will result to impairment of public utilities, MWSS and NAPOCOR. NO.
On the first issue, it is apparent from the reasoning of the Sec that he did consider the evidence adduced by LMG,
as follows:
“The respective income of the three divisions is shown in Annex B to the Company's Supplemental Comment.
The Organic Division posted an income of P369,754,000 in 1995. The Inorganic Division realized an income of
P261,288,000 in the same period. The tail ender is the Pinamucan Bulk Carriers Division with annual income of
P11,803,000 for the same period. Total Company income for the period was P642,845,000.
It is a sound business practice that a Company's income from all sources are collated to determine its true
financial condition. Regardless of whether one division or another losses or gains in its yearly operation is not
material in reckoning a Company's financial status. In fact, the loss in one is usually offset by the gains in the
others. It is not a good business practice to isolate the employees or workers of one division, which incurred an
operating loss for a particular period. That will create demoralization among its ranks, which will ultimately affect
productivity. The eventual loser will be the company.
So, even if We believe the position of the company that its Inorganic Division lost last year and during the early
months of this year, it would not be a good argument to deny them of any salary increase. When the Company
made the offer of P135 per day for the three year period, it was presumed to have studied its financial condition
properly, taking into consideration its past performance and projected income. In fact, the Company realized a net
LMG Chemical vs income of P10,806,678 for 1995 in all its operations, which could be one factor why it offered the wage increase
Sec., 356 SCRA 577 package of P135 per day for the Union members.”
• Further, LMG granted a P4,500/month raise to its supervisory employees during the pendency of the
negotiations of the CBA. If it could grant such raise to the supervisors, then there is no valid reason why it should
deny the same to the Union.
On the second issue, since the Sec had assumed jurisdiction over this case because it is impressed with national
interest. As noted by the Secretary, "the petitioner corporation (LMG) was then supplying the sulfate requirements
of MWSS as well as the sulfuric acid of NAPOCOR, and consequently, the continuation of the strike would
seriously affect the water supply of Metro Manila and the power supply of the Luzon Grid." Such authority of the
Secretary to assume jurisdiction carries with it the power to determine the retroactivity of the parties' CBA.
It is well settled in our jurisprudence that the authority of the Secretary of Labor to assume jurisdiction over a
labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest includes
and extends to all questions and controversies arising therefrom. The power is plenary and discretionary in nature
to enable him to effectively and efficiently dispose of the primary dispute.
Finally, to deprive respondent Secretary of such power and discretion would run counter to the well-established
rule that all doubts in the interpretation of labor laws should be resolved in favor of labor. In upholding the
assailed orders of respondent Secretary, this Court is only giving meaning to this rule. Indeed, the Court should
help labor authorities in providing workers immediate benefits, without being hampered by arbitration or litigation
processes that prove to be not only nerve-wracking but financially burdensome in the long run.

YES, THE REGIONAL DIRECTOR HAS JURISDICTION OVER THE MONEY CLAIMS
• In Allied Investigation Bureau, Inc. v. Sec. of Labor, we ruled that: “While it is true that under Articles 129 and
217 of the Labor Code, the Labor Arbiter has jurisdiction to hear and decide cases where the aggregate money
claims of each employee exceeds P5,000.00, said provisions of law do not contemplate nor cover the visitorial and
enforcement powers of the Secretary of Labor or his duly authorized representatives.”
• This was further affirmed in our ruling in Cirineo Bowling Plaza, Inc. v. Sensing, where we sustained the
jurisdiction of the DOLE Regional Director and held that “the visitorial and enforcement powers of the DOLE
Regional Director to order and enforce compliance with labor standard laws can be exercised even where the
individual claim exceeds P5,000.”
Ex-Bataan vs Sec.,
• However, if the labor standards case is covered by the exception clause in Article 128(b) of the Labor Code,
November 20, 2007
then the Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC. In
order to divest the Regional Director or his representatives of jurisdiction, the following elements must be
present: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon; (b)
that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are
not verifiable in the normal course of inspection. The rules also provide that the employer shall raise such
objections during the hearing of the case or at any time after receipt of the notice of inspection results.
• In this case, the Regional Director validly assumed jurisdiction over the money claims of private respondents
even if the claims exceeded P5,000 because such jurisdiction was exercised in accordance with Article 128(b) of
the Labor Code and the case does not fall under the exception clause.
Art 128 case intially pending in DOLE, not a bar to subsequent case of union busting because the COA only
arised when the union officers were laid off which occurred after the earlier labor case has already been filed. NO
forum shopping, the cases involved different COA and basically different parties. Petition denied, orders of CA
and Labor Secretary upheld
• NOTE: This case is weird because the decision of the SC did NOT contain any explanation on the “pakyaw”
status of the Union. I just assumed they upheld the decision of the CA using the CA’s and the Labor Secretary’s
rationalization –the focus of the ponencia is on the wrong mode of appeal AND the union busting case
• The Secretary held that respondents are regular employees of the petitioner based on the parameters set by law
in the determination of employer-employee relationship and are, therefore, entitled to said monetary benefits. He
further held that petitioner is engaged in the trucking business; hence, respondents as truck drivers perform
activities which are usually necessary and desirable to the said business. Lastly, the DOLE Region VI Office should
not have merely relied on the pro-forma affidavits of the respondents and based the inspection results on
company records
• The CA held that respondents' employment status cannot be based solely on their pro-forma affidavits
Iloilo vs CA, manifesting that they are “pakyaw” employees considering that they abandoned the same in a subsequent Joint
November 28, 2007 Affidavit. Moreover, the CA held that respondents worked under the petitioner's control and supervision.
Assuming respondents are piece-rate employees, such will not exculpate the petitioner from complying with labor
standards based on the Rules Implementing the Labor Code and existing jurisprudence.
No. The Union is not guilty of forum shopping

• On the CORP’s claim that the Union is guilty of forum shopping because after the filing of this case for labor
inspection, six of its officers/members subsequently filed the Union Busting case against the same petitioner in
view of their dismissal from work, we hold that there is no forum shopping In
• This case, said officers/members of the respondents merely pursued the subsequent case of Union Busting,
among others, in view of their dismissal from work. Said cause of action is independent from the labor inspection
case which respondents filed with the DOLE way ahead of the Union Busting case. No less than the law provides
for these respective remedies
Note: The SC also held that recourse to Rule 65 (certiorari) is the wrong mode of appeal if appeal under Rule 45
(ordinary appeal) is still available. No circumstances obtain in this case to grant an exemption.

Case of Valid Classification. GSK had a reasonable ground to make such non-competing clause in order
to protect their trade secrets. • Respondent has the right to guard its trade secrets, manufacturing,
formula etc.
o This prohibition is reasonable under the circumstances because relationships of that nature might compromise
the interests of the company
• It is clear from the contract and the notebook that the prohibition does not call for an absolute prohibition from
having relationships. What they only avoid is the conflict of interest that may arise from such relationship.
Duncan vs Glaxo,
September 17, 2004 There was no constructive dismissal.
• Constructive dismissal is defined as quitting, involuntary resignation resorted to when continued employment
becomes impossible, unreasonable or unlikely, when there is a diminution of rank or diminution of pay, or when a
clear discrimination, insensibility or disdain by employer.
• He record shows that he was not demoted and it was a management prerogative which the management has a
right to transfer its employees in accordance with its operational demands and requirements
• Plus there is a need to transfer him for his wife, Bettsy holds a sensitive position as branch manager which could
result in conflict of interest for the company. The place or sphere of their jobs in Albay is also a factor.
Wage differentials as a result of a voluntary increase by the company to create a more competitive pay
scale, does not result to wage distortion, and thus does not warrant correction.
• the four elements of wage distortion, to wit: (1.) An existing hierarchy of positions with corresponding salary
rates; (2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary
rate of a higher one; (3) The elimination of the distinction between the two levels; and (4) The existence of the
distortion in the same region of the country.
• Normally, a company has a wage structure or method of determining the wages of its employees. In a problem
dealing with "wage distortion," the basic assumption is that there exists a grouping or classification of employees
that establishes distinctions among them on some relevant or legitimate bases
• Thus the employees of private respondent have been "historically" classified into levels, i.e. I to V, and not on
the basis of their length of service. Put differently, the entry of new employees to the company ipso facto places
them under any of the levels mentioned in the new salary scale which private respondent adopted retroactive to
April 1, 1993.
• Petitioner cannot make a contrary classification of private respondent’s employees without encroaching upon
recognized management prerogative of formulating a wage structure, in this case, one based on level.
• It is thus clear that there is no hierarchy of positions between the newly hired and regular employees of Bankard,
hence, the first element of wage distortion is wanting.
• While seniority may be a factor in determining the wages of employees, it cannot be made the sole basis in cases
where the nature of their work differs.
Bankard Employees
• Moreover, for purposes of determining the existence of wage distortion, employees cannot create their own
Union Feb 17, 2004
independent classification and use it as a basis to demand an across-the-board increase in salary.
• Apart from the findings of fact of the NLRC and the Court of Appeals that some of the elements of wage
distortion are absent, petitioner cannot legally obligate Bankard to correct the alleged "wage distortion" as the
increase in the wages and salaries of the newly-hired was not due to a prescribed law or wage order.
• If the compulsory mandate under Article 124 to correct "wage distortion" is applied to voluntary and unilateral
increases by the employer in fixing hiring rates which is inherently a business judgment prerogative, then the hands
of the employer would be completely tied even in cases where an increase in wages of a particular group is
justified due to a re-evaluation of the high productivity of a particular group, or as in the present case, the need to
increase the competitiveness of Bankard’s hiring rate.
• An employer would be discouraged from adjusting the salary rates of a particular group of employees for fear
that it would result to a demand by all employees for a similar increase, especially if the financial conditions of the
business cannot address an across-the-board increase.
• Bankard’s right to increase its hiring rate, to establish minimum salaries for specific jobs, and to adjust the rates
of employees affected thereby is embodied under Section 2, Article V (Salary and Cost of Living Allowance) of
the parties’ Collective Bargaining Agreement (CBA)
• In fine, absent any indication that the voluntary increase of salary rates by an employer was done arbitrarily and
illegally for the purpose of circumventing the laws or was devoid of any legitimate purpose other than to
discriminate against the regular employees, this Court will not step in to interfere with this management
prerogative. Employees are of course not precluded from negotiating with its employer and lobby for wage

ART 156-182
NOTE that this reiterate the DOCTRINE OF THE RUBBERWORLD CASE:

• The relevant law dealing with the suspension of actions for claims against corporation is P.D. No. 902-A. Section
6(c) states that: “… That upon appointment of a management committee, the rehabilitation receiver, board or
body, pursuant to this Decree, all actions for claims against corporations, partnerships or associations under
management or receivership pending before any court, tribunal, board or body shall be suspended accordingly.”
• The term “claim” refers to “debts or demands of a pecuniary nature.” It means “the assertion of a right to have
Philippines Airlines money paid.”
v Zamora • The reason for suspending actions for claims against the corporation is not really to enable the management
(Feb 6, 2007) committee or the rehabilitation receiver to substitute the defendant in any pending action but to effectively
exercise its/his powers free from any judicial or extrajudicial interference that might unduly hinder or prevent the
“rescue” of the debtor company. To allow such other action to continue would only add to the burden of the
management committee or rehabilitation receiver, whose time, effort and resources would be wasted in defending
claims against the corporation instead of being directed toward its restructuring and rehabilitation.
• The appellate court’s directive that the monetary claims of Zamora must be presented to the PAL Rehabilitation
Receiver is erroneous for there has been no declaration of bankruptcy or judicial liquidation. Thus, rules on
preference of credits do not apply.
• It is conceded that MIESCOR is the indirect employer of the workers and under Art. 109, it is liable with the
contractor “for any violation of any provision of this Code.” However, such provision must be read in
conjunction with Arts. 106 and 107. Art. 107 states that an indirect employer is someone who contracts with an
independent contractor for the performance of any work, task, job, or project. Art. 106 states that if the
contractor fails to pay the wages of his workers, the [indirect] employer is solidarily liable to the workers to the
extent of work performed under the contract. (In simple terms: Construe 109, in conjunction with 106 and 107.)
• (As to UNPAID WAGE CLAIMS) The provisions taken together, it means that an indirect employer
(MIESCOR) can only be held solidarily liable with the contractor (OPLGS) in the event that the latter fails to pay
the wages of its employees. While it is true that MIESCOR was the indirect employer of the workers, it cannot be
Meralco v NLRC held liable in the same way as the employer in every respect –[BUT] only for purposes of unpaid wages.
(Mar 14, 2008) • (As to SEPARATION PAY CLAIMS) There is no question that OPLGS is an independent job contractor and
as such, he is the true employer of the workers and that it has the sole power to dismiss the workers. Therefore, it
should be the one solely liable for the separation pay of the workers. The only instance when the principal can
also be held liable with the contractor for separation pay is when there is proof that the principal conspired with
the contractor in the illegal dismissal of the employees. In this case, there is no proof, not even an allegation, that
there was such conspiracy between MIESCOR and OPLGS in the illegal dismissal of the workers.
• The general rule is that the principal and contractor are solidarily liable. NOTE HOWEVER, that in this
case: OPLGS [the CONTRACTOR] have already received from MIESCOR [the PRINCIPAL] the correct
amount of wages and benefits, but failed to turn them over to the workers, thus OPLGS should now solely bear
the liability for the underpayment of wages and non-payment of overtime pay.
• A non-involvement clause is not necessarily void for being in restraint of trade as long as there are reasonable
Tiu vs. Platinum limitations as to time, trade and place.
Plans Phils., Inc • In this case, the prohibition to work in any pre-need business, 2 years from termination of employment were
(Feb 28, 2007 ) reasonable limitation as to time and trade.
• The non-impairment clause is not contrary to public welfare and is necessary to afford a fair and reasonable
protection to respondent’s trade secrets and highly competitive marketing environment.
* There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable
compensation paid to a lawyer by his client for the legal services rendered to the latter. On the other hand, in its
extraordinary concept, attorney's fees may be awarded by the court as indemnity for damages to be paid by the
losing party to the prevailing party, such that, in any of the cases provided by law where such award can be made,
e.g., those authorized in Article 2208 of the Civil Code, the amount is payable not to the lawyer but to the client,
unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.
* Here, we apply the ordinary concept of attorney’s fees, or the compensation that Atty. Go is entitled to
Masmud vs. NLRC receive for representing Evangelina, in substitution of her husband, before the labor tribunals and before
and Atty. Go the court.
(Feb 13, 2008 ) * Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that
clients may be protected from unjust charges. The reasonableness of the value is a factual determination.

and Atty. Go
(Feb 13, 2008 )
* A lawyer is as much entitled to judicial protection against injustice or imposition of fraud on the part
of his client as the client is against abuse on the part of his counsel. The duty of the court is not alone to
ensure that a lawyer acts in a proper and lawful manner, but also to see that a lawyer is paid his just fees.
With his capital consisting of his brains and with his skill acquired at tremendous cost not only in money but in
expenditure of time and energy, he is entitled to the protection of any judicial tribunal against any attempt on the
part of his client to escape payment of his just compensation. It would be ironic if after putting forth the best
in him to secure justice for his client, he himself would not get his due.
1. Article 279 of the Labor Code mandates that an employee's full backwages shall be inclusive of allowances and
other benefits or their monetary equivalent. However, a salary increase cannot be interpreted as either an
allowance or a benefit. Allowances and benefits are granted to the employee apart or separate from, and in
addition to the wage or salary. In contrast, salary increases are amounts which are added to the employee's salary
as an increment thereto for varied reasons deemed appropriate by the employer. Salary increases are not deemed
separate grants themselves but once granted, they are deemed part of the employee's salary.
Equitable Banking 2. The distinction between backwages and separation pay is elementary -- separation pay is granted when
Corp vs. Sadac reinstatement is no longer advisable because of strained relations between the employee and the employer while
backwages represent compensation that should have been earned but were not collected because of unjust
dismissal.
3. An unqualified award of backwages means that an employee is paid at the wage rate at the time of his dismissal,
inclusive of regular allowances that the employee had been receiving, such as the emergency living allowances
(ECOLA) and the 13th month pay mandated under the law.
4. The distinction between "salary" and "wage" appears to be merely semantics. Both words generally refer to one
and the same meaning, that is, a reward or recompense for services performed.
Pacific Consultants
An employer-employee relationship exists where the person for whom the services are performed reserves the
International Asia,
right to control not only the end to be achieved but also the means to be used in reaching such end.
Inc. vs. Schonfeld
* While it is true that the provision requires employers to engage the services of medical practitioners in certain
establishments depending on the number of their employees, nothing is there in the law which says that medical
practitioners so engaged be actually hired as employees. The lawonly requires the employer "to retain", not employ,
Escasinas vs.
a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours.
Shangri-La Mactan's
* The term "full-time" in Art. 157 cannot be construed as referring to the type of employment of the person
Island Resort
engaged to provide the services, for Article 157 must not be read alongside Art. 280, which merely distinguishes
between regular and casual employees.
* The phrase "services of a full-time registered nurse" should thus be taken to refer to the kind of services that
the nurse will render in the company’s premises and to its employees, not the manner of his engagement.
Section 5(2) of RA 6728 allows a tuition fee increase only under the condition that at least 70% of the increase
shall be disbursed as salaries, wages, allowances, and other benefits for teaching and non-teaching personnel. The
St. Joseph's College payment of other costs of operation, together with the improvement of the school's infrastructure shall be taken
vs. SAMAHAN only from the remaining 30%.
·* Sec 5, par (2), of RA 6728 provides that salaries, wages, allowances and other benefits of teaching and non-
teaching personnel are to be charged against the seventy percent (70%) incremental tuition fee increase. SSS,
Medicare and Pag-Ibig fall under the category of "other benefits," hence, may very well be charged against the
seventy percent (70%) incremental tuition fee increase which after all is for the benefit of petitioners' teaching and
Cebu Institute of
non-teaching personnel.
Medicine v CIM
* The law speaks of payment of "salaries, wages, allowances and other benefits." There is no specific prohibition
Union
against charging the employer's share to the incremental tuition fee increase. Hence, it cannot properly be said that
the SSS, Medicare and Pag-Ibig premiums could be charged against the seventy percent (70%) incremental tuition
fee increase but the employer's share of the contribution should be deducted from the remaining thirty percent
(30%) or elsewhere
· Subject holiday pay is provided for in the Labor Code (Presidential Decree No. 442, as amended), which reads:
o Art. 94. Right to holiday pay — (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b)
The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate; ... "
· And in the Implementing Rules and Regulations, Rule IV, Book III, which reads:
o SEC. 8. Holiday pay of certain employees. — (a) Private school teachers, including faculty members of
colleges and universities, may not be paid for the regular holidays during semestral vacations. They
shall, however, be paid for the regular holidays during Christmas vacations. ...
Jose Rizal College v
· Under the foregoing provisions, apparently, the petitioner, although a non-profit institution is under obligation to
NLRC
give pay even on unworked regular holidays to hourly paid faculty members subject to the terms and conditions
provided for therein.

NLRC
· The Court, however, believe that the aforementioned implementing rule is not justified by the provisions of the
law which after all is silent with respect to faculty members paid by the hour who because of their teaching
contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a
fortuitous event or a national need calls for the declaration of special holidays).
o Regular holidays specified as such by law are known to both school and faculty members as no
class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in
their minds when they entered into the teaching contracts.
* Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that “(t)he provisions of this Code
shall be applicable only to Muslims x x x.” However, there should be no distinction between Muslims and non-
Muslims as regards payment of benefits for Muslim holidays. The Court of Appeals did not err in sustaining
Undersecretary Español who stated:
·* Assuming arguendo that the respondent’s position is correct, then by the same token, Muslims throughout the
Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. We must
remind the respondent-appellant that wages and other emoluments granted by law to the working man are
determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker’s faith or
SMC v CA
religion.
* At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that “x x x nothing herein shall be
construed to operate to the prejudice of a non-Muslim.”
* In addition, the 1999 Handbook on Workers’ Statutory Benefits, approved by then DOLE Secretary Bienvenido E.
Laguesma on 14 December 1999 categorically stated: Considering that all private corporations, offices, agencies,
and entities or establishments operating within the designated Muslim provinces and cities are required to observe
Muslim holidays, both Muslim and Christians working within the Muslim areas may not report for work
on the days designated by law as Muslim holidays.
ART 183-210
* There exists an employer-employee relationship between Feati and the faculty club. The contention of FEATI
that it cannot come into the purview of RA 875 because it is an educational institution cannot be sustained. The
wording of RA 875 with regard to the definitions of employers and employees are not exclusive as shown by the
use of the word includes ie. The term employer include any person acting in the interest of an employer, directly
or indirectly, but shall not include any labor organization (otherwise than when acting as an employer) or any one
acting in the capacity or agent of such labor organization.
* There is also no parallel between FEATI and the cases of UST, University of San Agustin and The Boy Scouts
of the Philippines which FEATI cited. The key difference is that the previously mentioned institutions did not fall
into the jurisdiction of the CIR because they were not operated for profit. FEATI on the other hand declares
Feati University v dividends to its stockholders.
Bautista
* They also claim that the members of the faculty cannot be considered employees as they are independent
contractors. This contention must fail as the National Labor Relations Act of the US from which RA 875 was
patterned allows independent contractors to be considered employees. Also, it cannot be said that the teachers are
independent contractors for a university controls the work of the members of its faculty; that a university
prescribes the courses or subjects that professors teach, and when and where to teach; that the professors' work is
characterized by regularity and continuity for a fixed duration; that professors are compensated for their services
by wages and salaries, rather than by profits; that the professors and/or instructors cannot substitute others to do
their work without the consent of the university; and that the professors can be laid off if their work is found not
satisfactory. All these indicate that the university has control over their work; and professors are, therefore,
employees and not independent contractors.
*It is important to note that the credibility provisions in Wage Orders Nos. 5 and 6 are grounded in an important
public policy. That public policy may be seen to be the encouragement of employers to grant wage and allowance
increases to their employers higher than the minimum rates of increases prescribed by statute or administrative
regulation. To obliterate the creditability provisions in the Wage Orders through interpretation or otherwise, and
Apex Mining, Inc. to compel employers simply to add on legislated increases in salaries or allowances without regard to what is
vs. NLRC already being paid, would be to penalize employers who grant their workers more than the statutorily prescribed
minimum rates of increases.
*Petitioner Apex having lawfully credited the P2.00 increase in basic salary towards compliance of the increase in
ECOLA prescribed by Wage Orders Nos. 5 and 6, it follows the respondent Sandigan’s claim to a differential in
ECOLA lacks basis in fact and in law.

*Any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or
eliminated by the employer. The principle of non-dimunition of benefits is founded on the Consti mandate to
“protect the rights of workers and promote their welfare,” and “to afford labor full protection.”
*In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely, voluntarily and
consistently granting full benefits to its employees regardless of the length of service rendered. True,
Arco Metal
there were only a total of 7 employees who benefitted from such practice, but it was an established practice
Products vs.
nonetheless. Thus, it cannot be unilaterally withdrawn.
Samahan ng
*Jurisprudence has not laid down any rule specifying a minimum number of years within which a company
Manggagawa sa
practice must be exercised in order to constitute voluntary company practice. Thus, it can be 6 years, 3 years of
Arco Metal
even as short as 2 years.
*If petitioner wants to prove that it merely erred in giving full employees, it could have easily presented other
proofs, such as the names of other employees who did not fully serve for 1 year and thus were given prorated
benefits. This could have easily bolstered petitioner’s theory of mistake/error, but sadly, no evidence to that effect
was presented.
* NAWASA is a GOCC performing proprietary functions, and as such comes within the coverage of CA No. 444.
Pursuant to said Act, it is not obliged to pay an additional sum of 25% to its laborers for work done on Sundays
and legal holidays. But, because of the CBA it entered with respondent union, it is bound to pay said additional
compensation.
* Notwithstanding their job titles (i.e. Secretary of the Board, private secretary of the General Manager, Public
Relations Officer and many other Chiefs of divisions or sections and others are supervisors and overseers),
employees who have little freedom of action and whose main function is merely to carry out the company’s
orders, plans and policies, are not managerial employees and hence are covered by CA No. 444.
*The CIR has jurisdiction to adjudicate overtime pay where there was employer-employee relationship existing
between the parties at the time the dispute arose.
*Those occupying positions in the General Auditing Office (GAO) and Bureau of Public Works who are assigned
to NAWASA cannot be regarded as employees of the latter on matters relating to compensation. They are
employees of the national government and are not covered by the eight-hour labor law. Furthermore, in the
NAWASA vs. computation of their daily wages, reference should be made to Section 254 of the Revised Administrative Code
NAWASA instead of dividing monthly salary by the actual number of working hours (or days) in the month.
Consolidated
*The method used by the NAWASA in offsetting the overtime with the undertime and at the same time charging
Unions
said undertime to the accrued leave is unfair.
*Differential pay for Sundays is part of the legal wage. Hence, it was correctly included in computing the weekly
wages of those employees and laborers who worked 7 days a week and were regularly receiving 25% salary
differential for a period of 3 months prior to the implementation of RA 1880. This is so even if petitioner is a
public utility in view of the contractual obligation it has assumed on the matter.
*The laborers must be compensated for nighttime work as of the date the same was rendered.
*The rates of minimum pay fixed in a CIR case are applicable not only to those who were already in the service as
of the date of the decision but also to those who were employed subsequent to said date.
*All the laborers, whether of the sewerage division or not assigned to work in and outside the sewerage chambers
and suffering unusual distress because of the nature of their work (mabaho, madumi :( ) are entitled to the extra
compensation (distress pay).
*There is no valid reason to disturb the finding of the CIR that the work of the personnel in the construction,
sewerage, maintenance, machineries and shops of the petitioner is not continuous as to require staggering.

• Basically, a Motion praying that an order be issued directing the NLRC to execute the final and executory
decision of the CIR (August 1971) and that the decision of the NLRC (March 1976) which in effect reconsidered
the 1971 decision of the CIR be set aside for being a nullity.
• Aforesaid void decision of the NLRC, which was a flagrant refusal to perform its ministerial duty of enforcing
and implementing a final and executory judgment for backwages, cannot conceivably replace the valid and
Air Manila, Inc. vs. subsisting judgment of the CIR as affirmed by this Court. No appeal lies therefrom and the motion for
CIR enforcement of judgment was properly filed directly with this Court as a matter of urgent justice and equity. As
was stressed in De Luna vs. Kayanan, the settled rule is that once a judgment has become final and executory, the
prevailing party is entitled as a matter of right to a writ of execution and issuance thereof is the court’s ministerial
duty, compellable by mandamus.
• Simply put, once a decision becomes final, it is binding on all inferior courts and hence beyond their power and
authority to alter or modify.
o Regular professors and teachers are entitled to ECOLA during the semestarl breaks, their ‘absence’ from
work not being of their own will’
 The evident intention of the law is to grant ECOLA upon payment of the basic wages (No pay, No
ECOLA)
 Although they may be considered to be on leave, the semestral break could not be used effectively for
teacher’s own purposes for the nature of a teacher’s job imposes upon him further duties which must be done
during the said period of time
〈 Learning is a never ending process
〈 Teachers and professors must keep abreast of developments all the time
 It would be unfair for the private respondent to consider these teachers as employees on leave without
pay to suit its purposes and, yet, in the meantime, continue availing of their services as they prepare for the
University of next semester or complete all of the semester’s requirements
Pangasinan Faculty o Semestral brakes may be considered as ‘hours worked’ under the Rules implementing the Labor Code
Union vs. University  The legal principle of ‘No work, No ECOLA’ must necessarily give way to the purpose of the law to
of Pangasinan augment the income of employees to enable them to cope with the harsh living conditions brought about by
inflation; and to protect employees and their wages against the ravages brought by these conditions
 Significantly, it is the commitment of the State to protect labor and to provide means by which the
difficulties faced by a working force may best be alleviated
o The general statements in the ‘whereas clause’ cannot prevail over specific statements in the law itself
 True, the whereas clause of PD 451 provide for salary and or wage increase and other benefits,
however, the same do not delineate the source of such funds and it is only in Sec. 3 which provides for the
limitations wherein the intention of the framers of the law is clearly outlined
o The 60% incremental proceeds from tuition fee increases are to be devoted entirely to salary increases of
school personnel
o Benefits mandated by law and the CBA between the university and its personnel may be charged to the
12% return on investment within the 40% incremental proceeds of tuition fee increase
o Factual findings of the NLRC that regular teachers were paid for extra loads was binding on the SC
o An employer is not exempt from complying with the obligation to give 13th month pay to its employees as
prescribed in PD 851 on the ground that under its CBA its employees are entitled to mid-year and end-of-year
bonus where its operations are profitable
o A year-end bonus is contractual in nature, which the 13th month pay is an obligation created by law
 A bonus is a fringe benefit while the 13th month pay is a wage supplement
Marcopper vs. Hon.
 Bonus is created by contract, only when there are profits, while 13th month pay is created by law and
Blas Ople
absolute and mandatory on the part of the employer
o Under PD 581 the employer may not diminish supplements or other benefits being enjoyed by employees
when PD 158 and its implementing regulations were issued
o The Ministry of Labor has jurisdiction to resolve issues involving the interpretation of CBAs and cases
involving the applicability of PD 851 granting 13th month pay to laborers and employees

o The prescribed cooling-off period and the 7-day strike ban after submission of report or strike vote are
mandatory
 When the law says ‘the labor union may strike’ should the dispute ‘remain unsettled until the lapse of
the requisite number of days (cooling-off period) from the mandatory filing of the notice’, the unmistakable
implication is that the union may not strike before the lapse of the cooling-off period
 Similarly, the mandatory character of the 7-day strike ban after the report on the strike-vote is manifest
in the provision that ‘in every case’, the union shall furnish the MOLE with the results of the voting ‘at least
7 days before the intended strike, subject to the prescribed cooling-off period’
o Said provisions are reasonable and valid restrictions on the right to strike ~ essential to attain the legitimate
National Federation
policy objectives embodied in the law (valid exercise of police power)
of Sugar Workers
o Settlement of a criminal liability is valid when the law itself authorizes it
vs. Orejera
 A dispute on the payment of the 13th month pay can be the proper subject of the voluntary settlement
and conciliation
 Moreover, refusal to give the 13th month pay cannot be said to be clearly a criminal act
o Employers already paying the equivalent of the 13th moth pay to their employees, such as Christmas
bonuses, are under no legal obligation to pay an additional 13th month pay prescribed under PD 851
o Pragmatic considerations also weigh heavily in favor of crediting both voluntary and contractual bonuses
for the purpose of determining liability for the 13th month pay
o To the employer who had acceded and is already bound to give bonuses to his employees, the additional
burden of a 13th month pay would amount to a penalty for his munificence or liberality
o The law wants to prevent is the imposition of a "double burden" upon the employer who is already paying
the equivalent of a 13th month pay.
 The law exempts from the payment of the 13th month pay employers who are already giving its
equivalent.
 Otherwise the goal of uniformly providing employees with additional income will not be met.
 Another inequity will result; while most employees will be paid thirteen (13) months salary, some, by
virtue of P.D. No. 851, will be receiving salary for fourteen (14) months
o The imposition of a "double burden" does not obtain in the present case even if UST pays both the 13th
month pay and the Christmas gift of P2,000.00 or P1,000.00.
 The Christmas gift is part of the lump sum of P35M, which the school has obliged itself to pay the
faculty members in full settlement of their share in the increase of tuition fees pursuant to P.D. No. 451.
 It is not a bonus, incentive or additional income. Neither is the giving of the Christmas gift an act of
liberality on the part of the university. The Christmas gift was partial payment, according to a schedule
agreed upon by UST and the faculty union, of the university's outstanding obligation to the faculty
UST Faculty Union
members for their share in the increase in tuition fees under P.D. No. 451.
vs. NLRC
 Once the university has fully paid the P35M to the faculty members within the time frame and in the
forms specified in the agreement, its obligation to pay a Christmas gift of P2,000.00 or P1,000.00, as part of
the P35M compromise package, ceases. UST would then have to comply only with P.D. No. 851 as amended
by Memorandum Order No. 28 by paying the 13th month pay
o The Christmas gift cannot therefore be compared to the "Christmas bonus," "milling bonus," and
"amelioration bonus" in National Federation of Sugar Workers (NFSW), the "year-end productivity bonus" in
Dole, and the "Christmas bonus" in Brokenshire which were actually forms of incentives and additional
income for the employees. Neither is it in the same category as the fixed "transportation allowance" ruled as a
form of bonus equivalent to the 13th month pay
o To recapitulate, under P.D. No. 851, as amended by Memorandum Order No. 28, and the March 25, 1985
agreement, UST has to pay its faculty members both the 13th month pay and the Christmas gift of P2,000.00 or
P1,000.00 for the years 1986 and 1987. Payment of the Christmas gift provided in the March 25, 1985 agreement
cannot be credited as partial compliance with P.D. No. 851, as amended. Consequently, we find that the NLRC
gravely abused its discretion when it affirmed the dismissal of the union's complaint.
A collective bargaining agreement (CBA) is a contractual obligation which is distinct from an obligation imposed
by law. The terms and conditions of a CBA constitute the law between the parties. Beneficiaries thereof are
Meycauayan College therefor, by right, entitled to the fulfillment of the obligation prescribed therein. A refusal to complay with the
v Drilon provisions of CBA would constitute unfair labor practice.

SSS AND GSIS CASES
Facts constituting ER-EE relationship (control test) are the same facts that would determine whether they fall
under the compulsory coverage of SSS.
Where private respondent (Phil. Guards Protectio Unit) has 39 guards, there is an ER-EE relationship between it
and its guards, so as to bring the latter under the compulsory coverage of the SSS law, under the following
circumstances: (1) when no establishment is found requiring the services of a guard, the latter serves as "extra
guard" and is utilized by the agency as a substitute for guards sick or on vacation; (2) when the agency finds a
SSS v CA
client requiring the services of a guard, the contract is entered into by ad between the agency owner and the client;
(3) the owner collect from client the fees for services of the guard, the owner paying for the guard's services and
retaining a part thereof as "commission"; (4) the owner continues to receive the commissio so long as the
watchman is assigned to guard the premises of client; (5) the agency owner furnishes the firearms and
ammunition, but the watchman buys his uniform; (6) if the client is dissatisfied with the guard's services, as when
he is always late, the agency may change the guard if the client so desires, or impose disciplinary fine upon him.
The pilots are not under the orders of the boat-owners as regards their employment. They go out to sea not upon
direction of the boat-owners, but upon their own volition as to when, how long and where to go fishing. Much
less do the boat-owners in anyway control the crew members with whom the former have no relationship
Pajarillo v CA whatsoever. (Sir says: owner of vessel & pilot are in ajoint venture and not ER-EE)
The fact that the respondent Union does not pay the jeepney drivers fixed wages (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) and that the
gasoline burned by jeeps is for the account of the drivers, does not suffice to say that the relationship between the
Union and jeepney drivers is not one of ER-EE. Because aside from these facts, all elements of control test to
NLU v Dinglasan determine ER-EE are present is this case.

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LABOR 1: CASE DOCTRINES 1st SEM AY 2009-2010

Atty. Dante Miguel Cadiz

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 1

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 3

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 4

SC RULED IN FAVOR OF TSPIC Corp.

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 5

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 6

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 7

FORMULA for wage adjustment

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 8

Wage distortion involves four elements:

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 9

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 10

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 11

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 12

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 13

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 14

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 15

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 16

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 17

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 18

No. The Union is not guilty of forum shopping

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 19

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 20

NOTE that this reiterate the DOCTRINE OF THE RUBBERWORLD CASE:

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 21

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 22

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 23

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 24

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 25

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 26

BOLONG, DIÑO, LINA, LIPANA, MORAL, OCAMPO, PEREZ, SIAN, VIRTUDEZ 27

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