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    Leonardo V CA

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    Justine
    This document summarizes a court case between former employees of BALTEL (a telephone company) and DIGITEL (a management company contracted by BALTEL). The employees sued both companies for unpaid wages after BALTEL ceased operations. The court ruled that DIGITEL was not BALTEL's successor and that no employer-employee relationship existed between DIGITEL and the plaintiffs. Specifically, DIGITEL's role was to manage BALTEL under contract but it did not purchase BALTEL's assets or franchise and was not directly involved in hiring or firing the employees. Therefore, DIGITEL could not be held liable for the employees' unpaid wages.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Leonardo V CA

    Uploaded by

    Justine
    56 views1 page
    This document summarizes a court case between former employees of BALTEL (a telephone company) and DIGITEL (a management company contracted by BALTEL). The employees sued both companies for unpaid wages after BALTEL ceased operations. The court ruled that DIGITEL was not BALTEL's successor and that no employer-employee relationship existed between DIGITEL and the plaintiffs. Specifically, DIGITEL's role was to manage BALTEL under contract but it did not purchase BALTEL's assets or franchise and was not directly involved in hiring or firing the employees. Therefore, DIGITEL could not be held liable for the employees' unpaid wages.

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    Labor Law 1

    Original Title

    Leonardo v CA

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    This document summarizes a court case between former employees of BALTEL (a telephone company) and DIGITEL (a management company contracted by BALTEL). The employees sued both companies for unpaid wages after BALTEL ceased operations. The court ruled that DIGITEL was not BALTEL's successor and that no employer-employee relationship existed between DIGITEL and the plaintiffs. Specifically, DIGITEL's role was to manage BALTEL under contract but it did not purchase BALTEL's assets or franchise and was not directly involved in hiring or firing the employees. Therefore, DIGITEL could not be held liable for the employees' unpaid wages.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    56 views1 page

    Leonardo V CA

    Uploaded by

    Justine
    This document summarizes a court case between former employees of BALTEL (a telephone company) and DIGITEL (a management company contracted by BALTEL). The employees sued both companies for unpaid wages after BALTEL ceased operations. The court ruled that DIGITEL was not BALTEL's successor and that no employer-employee relationship existed between DIGITEL and the plaintiffs. Specifically, DIGITEL's role was to manage BALTEL under contract but it did not purchase BALTEL's assets or franchise and was not directly involved in hiring or firing the employees. Therefore, DIGITEL could not be held liable for the employees' unpaid wages.

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    © All Rights Reserved
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    EMELITA LEONARDO, CONRADO BARGAMENTO, EMELITA NUÑEZ, RODOLFO GRABAN, and ROBERTO

    GRABAN, Petitioners,
    vs.
    COURT OF APPEALS and DIGITAL TELECOMMUNICATIONS PHILIPPINES, INC., Respondents.

    Facts: BALTEL holds the franchise from the Municipality of Balagtas, Bulacan to operate a telephone service in the
    municipality. BALTEL also has authority from the National Telecommunications Commission (NTC) to operate in the
    municipality.

    BALTEL hired Emelita Leonardo, Conrado Bargamento, Emelita Nuñez, Rodolfo Graban, and Roberto Graban
    ("petitioners") for various positions in the company. On 22 April 1991, BALTEL and DIGITEL entered into a management
    contract, in which DIGITEL was to provide personnel, consultancy and technical expertise in the management,
    administration, and operation of BALTEL’s telephone service.

    1994, BALTEL informed the NTC that it would cease to operate effective 28 February 1994 because it was no longer in a
    financial position to continue its operations. On 17 February 1994, BALTEL assigned to DIGITEL its buildings and other
    improvements as partial payment of BALTEL’s obligation to DIGITEL.

    On 28 February 1994, petitioners’ employment ceased. They executed separate, undated and similarly worded quitclaims
    acknowledging receipt of various amounts representing their claims from BALTEL. In their quitclaims, petitioners absolved
    and released BALTEL from all monetary claims that arose out of their employer-employee relationship with the company.
    Petitioners also acknowledged that BALTEL closed its operations due to serious business losses.

    Petitioners filed a complaint against BALTEL and Domingo De Asis for recovery of salary differential and attorney’s fees.
    Petitioners later filed a supplemental complaint to include illegal dismissal as additional cause of action and to implead
    DIGITEL as additional respondent. DIGITEL denied having any liability on the ground that it was not petitioners’ employer.

    Issues:

    1. Whether DIGITEL is the successor-in-interest of BALTEL; and

    2. Whether an employer-employee relationship exists between petitioners and DIGITEL.

    Ruling: DIGITEL is not BALTEL’s Successor-in-Interest

    The management contract gives DIGITEL the option to buy BALTEL’s franchise. However, the records do not show that
    DIGITEL exercised the option. Petitioners failed to show that DIGITEL eventually purchased BALTEL’s franchise and
    telephone system. When BALTEL eventually discontinued its operations, Estela de Asis informed the NTC of the cessation
    of its operations.

    There is No Employer-Employee Relationship Between DIGITEL and Petitioners: To determine the existence of an
    employer-employee relationship, the Court has to resolve who has the power to select the employees, who pays for their
    wages, who has the power to dismiss them, and who exercises control in the methods and the results by which the work
    is accomplished. The most important element of an employer-employee relationship is the control test. Under the control
    test, there is an employer-employee relationship when the person for whom the services are performed reserves the right
    to control not only the end achieved but also the manner and means used to achieve that end.

    In this case, DIGITEL undoubtedly has the power of control. However, DIGITEL’s exercise of the power of control
    necessarily flows from the exercise of its responsibilities under the management contract which includes providing for
    personnel, consultancy and technical expertise in the management, administration, and operation of the telephone system.
    Thus, the control test has no application in this case.

    The Court notes that DIGITEL did not hire petitioners. BALTEL had already employed petitioners when BALTEL entered
    into the management contract with DIGITEL. DIGITEL has no power to dismiss BALTEL’s employees. When DIGITEL
    wanted to dismiss Roberto Graban for habitual tardiness, BALTEL did not approve DIGITEL’s recommendation. In the end,
    Roberto Graban was just suspended from work.

    In sum, no employer-employee relationship exists between petitioners and DIGITEL. Hence, DIGITEL is not solidarily liable
    with BALTEL and Domingo de Asis to petitioners.

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