NCD | DJED

Manila Electric Co. v. Quisumbing

MANILA ELECTRIC COMPANY, petitioner,
vs.
Hon. SECRETARY OF LABOR LEONARDO QUISUMBING and MERALCO EMPLOYEES
and WORKERS ASSOCIATION (MEWA),
respondents.
G.R. No. 127598
February 22, 2000

DOCTRINE:
➢ Hiring of workers is within the employer’s inherent freedom to regulate
and is a valid exercise of its management prerogative subject only to
special laws and agreements on the matter and fair standards of
justice.
➢ Contracting out of services is an exercise of business judgement or
management prerogative.
➢ Rules on retroactivity of the CBA
1. A CBA negotiated within six months following the expiration of
the last CBA shall retroact to the date following such date
2. Except, if agreed thereafter, the date of effectivity depend on the
agreements of the parties
3. On CBA granted by arbitral awards, the Labor Secretary’s
determination of the retroactivity date as part of its
discretionary power.

FACTS:
In a court decision promulgated January 1999, the Court disposed a case
granting the petition and orders of the respondent Secretary of Labor,
directing the parties to execute a Collective Bargaining Agreement (CBA).
 NCD | DJED

Dissatisfied with the decision, members of the respondent Union and the
petitioner’s supervisor’s union each filed separate interventions. The issues
raise, according to the court were already passed upon by the Court in its
January 1999 decision, however, matters pertaining to the amount of wages
and retroactivity of the CBA arbitral awards were considered.

The petitioner argues that a wage increase of P2,200.00/month as ordered by

the Secretary would burden consumers through an increase in rate electricity
to meet the wage increase. Holding All Asia Capital report as its basis.

As to the retroactivity of the CBA awards, petitioner claims that the award
should retroact only from the time the secretary of labor rendered the award.
On the other hand, the respondent Union argues that retroactivity should start
from such time granted by the Secretary of Labor.

ISSUES:
● Amount of Wages
● Retroactivity of CBA Arbitral Awards

RULING:
The Court clarified that it cannot be threatened with the petitioner’s
misleading argument that an increase in wage would result in an increase in
the rate of electricity. The price increase in electricity requires the approval
of the appropriate regulatory government agency. The Court notes further
that such arguments presuppose that the petitioners are capable of meeting
a wage increase.

The Court ruled that for a P2,000.00 increase for the two-year period, however,
the court notes that it does not enumerate the factors for wage determination
because collective bargaining disputes especially those affecting the
national interest and public service requires due consideration and proper
 NCD | DJED

balancing of interest of the parties, ending that, matters of salary increase

are part of management prerogative.

Stated in the January 1999 decision, the CBA shall be effective for a period of
two (2) years from December 28, 1996, to December 27, 1999. The Court notes
however, that labor laws are silent as to when an arbitral award in a labor
dispute where the labor secretary assumed jurisdiction by virtue of article
263 (g) of the labor code shall retroact.

Further, the court elucidates that a CBA negotiated within six months after the
expiration of the existing CBA retroacts to the day immediately following such
date, and if agreed thereafter, the date of effectivity depends on the
agreement of parties.

Noting that labor laws are silent as to CBA awards by intervention of the
government, the Court rules that the CBA arbitral awards granted after six
months from the last CBA shall:
(a) retroact to such time agreed upon by the employer and employees or
union
(b) absent such agreement, retroactivity shall retroact to the first day after
the six month period following the expiration of the last day of CBA
(c) in the absence of a CBA, the Secretary’s determination of the date of
retroactivity as part of his discretionary powers over arbitral awards shall
control. Holding that the Secretary’s determination is part of his discretionary
over arbitral awards.
 NCD | DJED

Agabon v. NLRC
JENNY M. AGABON and VIRGILIO C. AGABON, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME
IMPROVEMENTS, INC. and VICENTE
ANGELES,
respondents.
G.R. No. 158693
November 17, 2004

DOCTRINE:
The dismissal of an employee must be for just or authorized cause and after
due process.

FACTS:
Private respondent Riviera Home Improvements, Inc. is engaged in the
business of selling and installing ornamental and construction materials. It
employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board
and cornice installers on January 2, 1992 until February 23, 1999 when they
were dismissed for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money
claims and they assert that they were dismissed because the private
respondent refused to give them assignments unless they agreed to work on
a "pakyaw" basis when they reported for duty on February 23, 1999.

Private respondents, on the other hand, maintained that petitioners were not
dismissed but had abandoned their work. Petitioners did not report for work
because they had subcontracted to perform installation work for another
company.
 NCD | DJED

LA RULING:
The Labor Arbiter rendered a decision declaring the dismissals illegal and
ordered private respondents to pay the monetary claims.

NLRC RULING:
NLRC reversed the Labor Arbiter because it found that the petitioners had
abandoned their work, and were not entitled to backwages and separation
pay. The other money claims awarded by the Labor Arbiter were also denied
for lack of evidence.

CA RULING:
Petitioners filed a petition for certiorari before the CA. The Court of Appeals in
turn ruled that the dismissal of the petitioners was not illegal because they
had abandoned their employment but ordered the payment of money
claims.

ISSUE:
Whether the petitioners were illegally dismissed.

RULING:
NO. To dismiss an employee, the law requires not only the existence of a just
and valid cause but also enjoins the employer to give the employee the
opportunity to be heard and to defend himself.

Article 282 of the LABOR CODE enumerates the just causes for termination by
the employer:
a) serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or the latter's representative in
connection with the employee's work;
b) gross and habitual neglect by the employee of his duties;
 NCD | DJED

c) fraud or willful breach by the employee of the trust reposed in him by

his employer or his duly authorized representative;
d) commission of a crime or offense by the
e) employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and
f) other causes analogous to the foregoing.

Abandonment is the deliberate and unjustified refusal of an employee to

resume his employment. It is a form of neglect of duty, hence, a just cause
for termination of employment by the employer.

The Court provides the elements for a valid finding of abandonment:

a) The failure to report for work or absence without valid or justifiable
reason; and
b) a clear intention to sever employer-employee relationship

Having ruled that the termination was for a just and valid cause, the court
proceeded to explain the procedure on terminating an employee in causes
under Art. 282:
(a) Written notice to the employee specifying the ground for termination
(b) A hearing opportunity for the employee to explain his side
(c) Written notice of termination served on the employee indicating upon
due consideration of circumstances, that grounds were established to
justify his termination.

Private respondent, however, did not follow the notice requirements. Thus, it
should be held liable for non-compliance with the procedural requirements of
due process. Where the employer had a valid reason to dismiss an
employee but did not follow the due process requirement, the dismissal
may be upheld but the employer will be penalized to pay an indemnity to
the employee.
 NCD | DJED

The Supreme Court DENIED the petition, but ORDERED to pay each of the
petitioners the amount of P30,000 as nominal damages for non-compliance
with the statutory due process.
 NCD | DJED

Abbott v. Alcaraz
ABBOTT LABORATORIES et. al, Petitioners,
vs.
PEARLIE ANN F. ALCARAZ, Respondent.
G.R. No. 192571
July 23, 2013

FACTS:
On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott) caused
the publication in a major broadsheet newspaper of its need for a Medical
and Regulatory Affairs Manager. On December 7, 2004, Abbott formally
offered Alcaraz the above mentioned position which was an item under the
company’s Hospira Affiliate Local Surveillance Unit (ALSU) department. On
December 7, 2004, Abbott formally offered Alcaraz the above mentioned
position which was an item under the company’s Hospira Affiliate Local
Surveillance Unit (ALSU) department

On February 12, 2005, Alcaraz signed an employment contract which stated,

inter alia, that she was to be placed on probation for a period of six (6)
months.

On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott’s

Human Resources (HR) Director, sent Alcaraz an e-mail which contained an
explanation of the procedure for evaluating the performance of probationary
employees and further indicated that Abbott had only one evaluation system
for all of its employees. Alcaraz was also given copies of Abbott’s Code of
Conduct and Probationary Performance Standards and Evaluation (PPSE) and
Performance Excellence Orientation Modules (Performance Modules).

On May 23, 2005, a letter has been personally handed to Alcaraz stating that
her services had been terminated effective May 19, 2005. The letter contains:
 NCD | DJED

a) did not manage her time effectively;

b) failed to gain the trust of her staff and to build an effective rapport with
them;
c) failed to train her staff effectively;
d) was not able to obtain the knowledge and ability to make sound
judgments on case processing and article review which were necessary
for the proper performance of her duties.

Alcaraz filed a complaint for illegal dismissal.

Probationary employee - a probationary employee is one who is on trial by

an employer during which the employer determines whether or not said
employee is qualified for permanent employment. The maximum duration for
probationary employment is six (6) months, unless it is covered by an
apprenticeship agreement stipulating a longer period.

ISSUE:
Whether or not Alcaraz was validly terminated from her employment;

RULING:
NO. A probationary employee also enjoys the security of tenure. However,
under the Article 295 of LABOR CODE, the probationary employee may also
be terminated for failure to qualify as a regular employee in accordance
with the reasonable standards made known by the employer to the
employee at the time of the engagement.

An employee who has been engaged on probationary basis may be

terminated for any of the following:
a) Just cause
b) Authorize cause
 NCD | DJED

c) When he fails to qualify as a regular employee in accordance with

reasonable standards prescribed by the employer.

According to the Supreme Court, it cannot be doubted that Alcaraz was well-
aware that her regularization would depend on her ability and capacity to
fulfill the requirements of her position as Regulatory Affairs Manager and that
her failure to perform such would give Abbott a valid cause to terminate her
probationary employment and her consequent dismissal must stand.

In this case, it is apparent that Abbott failed to follow the above-stated

procedure in evaluating Alcaraz. The fact that it violated its own company
procedure renders the termination of Alcaraz’s employment procedurally
infirm, warranting the payment of nominal damages. An employer who
terminates an employee for a valid cause but does so through invalid
procedure is liable to pay the latter nominal damages.

SC granted the petition.

 NCD | DJED

Yrasuegui v. PAL
ARMANDO G. YRASUEGUI, petitioner,
vs.
PHILIPPINE AIRLINES, INC,,
respondent.
G.R. No. 168081
October 17, 2008

DOCTRINE:
➢ Continuing qualification
- Failure of employee to comply with a continuing qualification, dismissible
under Art. 282 (e) (LC).
➢ Bona fide Occupational Qualification (BFOQ)
- If an employer can show that sex, religion, or national origin is an actual
qualification for performing the job, employment may be limited.
➢ Separation pays on social justice or equity
- Separation pay is granted to legally dismissed employee if the dismissal
was not for:
(1) Serious misconduct
(2) Does not reflect on the moral character of the employee

FACTS:
The petitioner was a former international flight steward of PAL, 5’8 with a large
body frame. The proper weight for a man of his height and body structure is
from 148 to 166 pounds, the ideal weight being 166 pounds as mandated by
the Cabin and Crew Administration Manual of PAL.

The weight problem of the petitioner dates back to 1984 and PAL advised him
to address his weight concerns.. On April 26, 1989, petitioner weighed 209
pounds and was removed from flight duty effective May 6, 1989 to July 3, 1989.
 NCD | DJED

On February 25, 1989, petitioner underwent a weight check where he

discovered that he gained instead of losing weight. Petitioner made a
commitment to reduce weight in a letter addressed to his manager.
Unfortunately, the petitioner failed to report for weight checks in line with his
commitment. On April 1990, the petitioner was formally warned that a
repeated refusal to report for weight check would be dealt accordingly.

On November 1992, PAL finally served the petitioner a notice of administrative

charge for violation of company standards on weight requirements. He also
claimed that PAL discriminated against him because “the company has not
been fair in treating cabin crew members who are similarly situated”.

On June 1993, petitioner was formally informed by PAL that due to his inability
to attain his ideal weight which spanned a period covering a total of almost 5
years, his services were considered terminated “effective immediately”.
Petitioner filed a complaint for illegal dismissal against PAL.

ISSUES:
● Whether or not the petitioner’s obesity can be ground for dismissal
under paragraph (e) of Art 282 of the LABOR CODE
● Whether or not that petitioner’s dismissal for obesity can be predicated
on the “Bona Fide Occupational Qualification (BFOQ) Defense
● Whether or not the petitioner was unduly discriminated

RULING:
On the first issue
The Supreme Court ruled that the obesity of petitioner is a ground for
dismissal under Article 282 (e) of the LABOR CODE. As reiterated by the Court
on CA’s ruling, the failure to meet the employer’s qualifying standards is in
fact a ground that does not fall under grounds of paragraph (a) to (d) and is
 NCD | DJED

therefore one that falls under Article 282 (e) of the Labor Code - “other causes
analogous to the foregoing”.

The Court found that the petitioner was able to reduce his weight from
1984-1992 given the proper attitude, determination, and self-discipline.
Petitioner has only himself to blame as he chose to ignore the suggestion of
the company to avail the assistance of the company physician and the
repeated failure to report for his weight checks.

On the second issue

According to the Supreme Court, employment in particular jobs may not be
limited to persons of a particular sex, religion, or national origin unless the
employer can show that the same is an actual qualification for performing
the job. Therefore, the dismissal of petitioner can be predicated on the bona
fide occupational qualification defense.

The Court also ruled that BFOQ is valid “provided it reflects an inherent
quality reasonably necessary for satisfactory job performance”. That the
PAL as an air transportation business is committed to safely transport of its
passenger. Thus, the primary objective of PAL in the imposition weight
standards for cabin crew is flight safety.

On the third issue

The Supreme Court ruled that the petitioner failed to substantiate his claim
that he was discriminated against by PAL. The petitioner has the burden of
evidence to prove his allegation with particularity.

The Supreme Court finally held that the petitioner is entitled to separation
pay which is granted to a legally dismissed employee as an act of social
justice or based on equity. It is required that the dismissal:
(1) Was not for serious misconduct
 NCD | DJED

(2) Does not reflect on the moral character of the employee

 NCD | DJED

Duncan v. Glaxo
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON,
petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC.,
respondent.
G.R. No. 162994
September 17, 2004

DOCTRINE:
While our laws endeavor to give life to the constitutional policy on social
justice and the protection of labor, it does not mean that every labor dispute
will be decided in favor of the workers.

➢ Policy prohibiting personal relations with employees of competing

companies in consideration of conflict of interest; valid exercise of
management prerogative.
➢ Constructive dismissal
- Quitting, involuntary resignation resorted to when continued
employment becomes impossible, unreasonable, or unlikely.

FACTS:
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome
Philippines, Inc. (Glaxo) as medical representative.

Tecson signed a contract of employment which stipulates, among others,

that he agrees to study and abide by existing company rules; to disclose to
management any existing or future relationship by consanguinity or affinity
with co-employees or employees of competing drug companies and should
management find that such relationship poses a possible conflict of interest,
to resign from the company.
 NCD | DJED

Tecson entered into a romantic relationship with Bettsy, an employee of Astra

Pharmaceuticals (Astra), a competitor of Glaxo. Tecson married Bettsy in
September 1998.

Tecson’s superiors informed him that his marriage to Bettsy gave rise to a
conflict of interest. The parties failed to resolve the issue at the grievance
machinery level, they submitted the matter for voluntary arbitration.

ISSUE:
Whether Glaxo’s policy against its employees marrying employees from
competitor companies is valid, and such policy violates the equal protection
clause of the Constitution.

RULING:
1. Validity of the Glaxo’s policy
NO. The Court ruled that it is a valid exercise of management prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information from
competitors, especially so that it and Astra are rival companies in the highly
competitive pharmaceutical industry.

Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures. That
Glaxo possesses the right to protect its economic interests cannot be denied.
No less than the Constitution recognizes the right of enterprises to adopt and
enforce such a policy to protect its right to reasonable returns on investments
and to expansion and growth.

2. Violation of equal protection clause of the Constitution

 NCD | DJED

NO. The challenged company policy does not violate the equal protection
clause of the Constitution as petitioners erroneously suggest. It is a settled
principle that the commands of the equal protection clause are addressed
only to the state or those acting under color of its authority. The equal
protection clause erects no shield against merely private conduct, however,
discriminatory or wrongful.

The Supreme Court DENIED the petition.

 NCD | DJED

Brotherhood v. SMC
BROTHERHOOD UNITY MOVEMENT OF THE PHILIPPINES et al., petitioners,
vs.
HON. RONALDO B. ZAMORA et al.,
respondents.
G.R. No. L-48645
January 7, 1987

DOCTRINE:
In determining the existence of an employer-employee relationship, the
elements that are generally considered are the following:
a) The selection and engagement of the employee;
b) The payment of wages
c) The power of dismissal
d) The employer's power to control the employee with respect to the
means and methods by which the work is to be accomplished.
The last requisite is the most important element, it is called the “Control test”.

FACTS:
On July 11, 1969 the Brotherhood Labor Unity Movement (BLUM) filed a
complaint before the Court of Industrial Relations charging San Miguel
Corporation of unfair labor practice. It was alleged that the respondents
ordered complainants to disaffiliate from their union; and that management
dismissed the individual complainants when they insisted on their union
membership.

Respondents moved for the dismissal of the complaint on the grounds that
the complainants are not and have never been employees of responded
company but employees of an independent contractor.
 NCD | DJED

However, the record shows that the petitioners are workers of the San Miguel
Parola Glass Factory as “kargador” and “pahinante” averaging about 7 years
at the time of their termination.

Petitioners were also paid every 10 days on a piece rate basis according to
the number of cartons and wooden shells they were able to load, unload, and
pile.

ISSUE:
Whether or not an employer-employee relationship exists between the
petitioners members of BLUM and San Miguel Corporation

RULING:
The Supreme Court ruled that in determining the existence of
employer-employee relationship, the following elements must be present:
(a) selection and engagement of the employee
(b) the payment of wages
(c) the power of dismissal
(d) the employer’s power to control the employee with respect to the means
and method by which the work is to be accomplished. It is called the “control
test” or the most important element.

Based on the criteria, the Court held that it indicates the existence of an
employer-employee relationship between the two parties. The fact that the
petitioners continuously worked for an average of 7 years, there is justification
that they were engaged to perform activities necessary in the usual business
or trade of the respondent.

Therefore, the Supreme Court GRANTED the petition.

 NCD | DJED

Continental Marble v. NLRC

CONTINENTAL MARBLE CORP. and FELIPE DAVID, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION et al.,
respondents.
G.R. No. L-43825
May 9, 1988

FACTS:
Private respondent Rodito Nasayao claimed that sometime in May 1974, he was
appointed plant manager of the petitioner corporation with an alleged
compensation of P3,000 a month or 25% of the monthly net income of the
company.

The private respondent alleged that the company failed to pay his salary for the
months of May, June, and July 1974. However, the petitioner denied that Rodito
Nasayao was employed in the company as it was agreed upon by the parties
that it was a sort of partnership wherein he was to keep the machinery in good
working condition.

ISSUE:
Whether or not the private respondent was employed as plant manager of
Continental Marble Corporation.

RULING:
The Court ruled that there is nothing which would support the claim of Rodito
Nasayao that he was an employee of the petitioner corporation. The court finds
that he was not included in the company payroll, nor in the list of company
employees furnished the SSS.
 NCD | DJED

In determining the existence of employer-employee relationship, the

following elements must be present: “Four Fold Test”
(a) the selection and engagement of the employee
(b) the payment of wages
(c) the power of dismissal
(d) the employer’s power to control the employee with respect to the means and
method by which the work is to be accomplished. It is called the “control test” or
the most important element.

In the absence of the power to control the employee, there was no

employer-employee relationship between the parties.
 NCD | DJED

Paguio v. NLRC
PAGUIO TRANSPORT CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and WILFREDO MELCHOR,
respondents.
G.R. No. 119500
August 28, 1998

DOCTRINE:
➢ “Boundary system” used in taxi and jeepney operations presupposes
an employer-employee relation.
➢ The employer must prove just or authorized cause and due process to
justify the dismissal of an employee.
➢ Back wages and reinstatement are necessary consequences of illegal
dismissal.

FACTS:
Complainant Wilfredo Melchor was hired by Paguio Transport Corporation as
a taxi driver under the boundary system. He was engaged to drive the taxi unit
assigned to him on a 24-hour schedule per trip every 2 days. He has a
boundary for P650.

On November 1993, complainant allegedly met a vehicular accident in Quirino

Ave near the PNR station when he accidently bumped a car. Thereafter, he
submitted a report to the office of the respondents and was advised to stop
working and have rest. After several days, he was informed that his service
was no longer needed. Melchor filed a complaint for illegal dismissal.

On the other hand, the respondent maintained that complainant was not
illegally dismissed there being no employer-employee relationship between
 NCD | DJED

them and that he had no control over the number of hours that the
complainant had to work and the routes he had to take.

ISSUE:
Whether or not there is an employer-employee relationship between the
parties.

RULING:
No. The argument of the petitioner did not convince the Court.

According to the Supreme Court, the relationship of taxi owners and drivers is
the same as that jeepney owners and drivers under the “boundary system” to
which employer-employee relationship was deemed to exist. Applying the
same doctrine in the case of jeepney operators and drivers, the former
exercise supervision and control over the latter. In this case, the Court ruled
that private respondents were employees because they had been engaged
to perform activities which were usually necessary or desirable in the usual
trade or business of the employer.
 NCD | DJED

Insular v. NLRC
INSULAR LIFE ASSURANCE CO., LTD., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO,
respondents.
G.R. No. 84484
November 15, 1989

FACTS:
On 1968, Insular Life Insurancr Company and Melecio Basiao entered into a
contract. Stipulated in their contract that:
- Basiao was authorized to solicit within the Philippines applications for
insurance policies and annulties in accordance with the existing rules and
regulations of the company.
- He would receive compensation in the form of commissions
- That the agent shall be free to exercise his own judgement as to time, place,
and means of soliciting insurance. And nothing contained therefore be
construed to create a relationship of employee and employer.
- The company may terminate the contract without any previous notice to
the agent.

4 (1972) years later, the parties entered into an agency manager’s contract
but in May 1979 the company terminated the same. Basiao sued the
company in civil action and sought to recover the commissions.

The respondents disputed that Basiao was not the Company’s employee but
an independent contractor.

ISSUE:
Whether or not Basiao become the company’s employee by virtue of the
contract invoked by him.
 NCD | DJED

RULING:
No. The Court ruled that not every form of control over the conduct of the
party hired in relation to the services rendered may be accorded the effect of
establishing employer-employee relationship. It only merely serves as
guidelines towards the means or methods of the work and it aims only to
promote the result.

The Court, therefore, rules that under the contract invoked by him, Basiao was
not an employee of the petitioner, but a commission agent, an independent
contractor whose claim for unpaid commissions should have been litigated in
an ordinary civil action.
 NCD | DJED

Manila Golf v. Intermediate

MANILA GOLF & COUNTRY CLUB, INC., petitioner,
vs.
INTERMEDIATE APPELLATE COURT and FERMIN LLAMAR,
respondents.
G.R. No. 64948
September 27, 1994

FACTS:
In three separate proceedings, all initiated by or on behalf of herein private
respondent and his fellow caddies. That which gave rise to the present
petition for review was originally filed with the Social Security Commission
(SSC) via petition of seventeen (17) persons who styled themselves "Caddies
of Manila Golf and Country Club-PTCCEA" for coverage and availment of
benefits under the Social Security Act as amended, "PTCCEA" being the
acronym of a labor organization, the "Philippine Technical, Clerical,
Commercial Employees Association," with which the petitioners claimed to be
affiliated.

In the case before the SSC, the respondent Club filed answer praying for the
dismissal of the petition, alleging in substance that the petitioners, caddies by
occupation, were allowed into the Club premises to render services as such to
the individual members and guests playing the Club's golf course and who
themselves paid for such services; that as such caddies, the petitioners were
not subject to the direction and control of the Club as regards the manner in
which they performed their work; and hence, they were not the Club's
employees.

Petitioner Fermin Llamar admitted that caddy works on his own in

accordance with the rules and regulations. While respondent club
promulgates rules and regulations on the assignment, deportment and
 NCD | DJED

conduct of caddies the same are designed to impose personal discipline

among the caddies but not to direct or conduct their actual work. In fact, a
golf player is at liberty to choose a caddy of his preference regardless of the
respondent club's group rotation system and has the discretion on whether or
not to pay a caddy.

This lends credence to respondent's assertion that the caddies are never their
employees in the absence of two elements, namely, (1) payment of wages
and (2) control or supervision over them.

ISSUE:
Whether or not persons rendering caddying services for members of golf
clubs and their guests in said clubs' courses or premises are the employees of
such clubs.

RULING:
The Court does not agree that said facts necessarily or logically point to such
a relationship, and to the exclusion of any form of arrangements, other than
of employment, that would make the respondent's services available to the
members and guests of the petitioner.

Petitioner has no means of compelling the presence of a caddy. A caddy is

not required to exercise his occupation in the premises of the petitioner. He
may work with any other golf club or he may seek employment as a caddy or
otherwise with any entity or individual without restriction by petitioner.

Petitioner has no was of compelling the presence of the caddies as they are
not required to render a definite number of hours of work on a single day.
Even the group rotation of caddies is not absolute because a player is at
liberty to choose a caddy of his preference regardless of the caddy's order in
the rotation.
 NCD | DJED

Based on the record, the Court declared Fermin Llamar is not an employee of
petitioner Manila Golf and Country Club and that petitioner is under no
obligation to report him for compulsory coverage to the Social Security
System.
 NCD | DJED

Dy Keh Beng v. International Labor

DY KEH BENG, petitioner,
vs.
INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, et al.,
respondents.
G.R. No. L-32245
May 25, 1979

FACTS:
A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of
a basket factory, for discriminatory acts by dismissing on September 28 and
29, 1960, respectively, Carlos N. Solano and Ricardo Tudla for their union
activities. a case was filed in the Court of Industrial Relations for in behalf of
the

International Labor and Marine Union of the Philippines and two of its
members, Solano and Tudla In his answer, Dy Keh Beng contended that he did
not know Tudla and that Solano was not his employee because the latter
came to the establishment only when there was work which he did on pakiaw
basis, each piece of work being done under a separate contract.

Complainant’s contention:
Solano and Tudla became employees of Dy Keh Beng from May 2, 1953 and
July 15, 1955 respectively, and that except in the event of illness, their work with
the establishment was continuous although their services were compensated
on piece basis. Evidence likewise showed that at times the establishment had
eight (8) workers and never less than five (5); including the complainants,
and that complainants used to receive P5.00 a day.

Dy Keh Beng’s contention:

(1) Solano never stayed long enough at Dy's establishment;
 NCD | DJED

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

(3) order given him by Dy;
(4) When there were no orders needing his services there was nothing for him
to do;
(5) When orders came to the shop that his regular workers could not fill it was
then that Dy went to his
address in Caloocan and fetched him for these orders; and
(6) Solano's work with Dy's establishment was not continuous.

ISSUE:
Whether or not there existed an employee employer relation between
petitioner Dy Keh Beng and the respondents Solano and Tudla.

RULING:
Yes. The Supreme Court upheld the control test, an employer-employee
relationship exists "where the person for whom the services are performed
reserves a right to control not only the end to be achieved but also the
means to be used in reaching such end”.

The Court in considering the findings of the Hearing Examiner, the

establishment of Dy Keh Beng is "engaged in the manufacture of baskets
known as kaing, it is natural to expect that those working under Dy would
have to observe, among others, Dy's requirements of size and quality of the
kaing. Some control would necessarily be exercised by Dy as the making of
the kaing would be subject to Dy's specifications. Since the work on the
baskets is done at Dy's establishments, it can be inferred that the proprietor
Dy could easily exercise control on the men he employed.
 NCD | DJED

Domasig v. NLRC
EDDIE DOMASIG, petitioner,
vs.
NLRC and CATA GARMENTS CORPORATION,
respondents.
G.R. No. 118101
September 16, 1996

DOCTRINE:
➢ Administrative and quasi-judicial proceedings, substantial evidence is
sufficient as a basis for judgment on the existence of
employer-employee relationship.
➢ Any competent and relevant evidence to prove the relationship may be
admitted.
➢ Substantial evidence has been defined to be such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion,
➢ In a business establishment, an identification card (ID) is usually
provided not only as a security measure but mainly to identify the
holder thereof as a bona fide employee of the firm that issues it.

FACTS:
The complaint was instituted by Eddie Domasig against respondent Cata
Garments Corporation, a company engaged in garments business and its
owner/manager Otto Ong and Catalina Co for illegal dismissal, unpaid
commission and other monetary claims. Complainant alleged that he started
working with the respondent on July 6, 1986 as Salesman when the company
was still named Cato Garments Corporation.

On August 29, 1992, he was dismissed when the respondent learned that he
was being pirated by a rival corporation which he refused. Prior to his
dismissal, the complainant alleged that he was receiving a salary of P1,500.00
 NCD | DJED

a month plus commission. On September 3, 1992 he filed the instant

complaint.

Respondent denied complainant's claim that he is a regular employee

contending that he is a mere commission agent who receives a commission
of P5.00 per piece of article sold at regular price and P2.50 per piece sold in
bargain price; that in addition to commission, complainant received a fixed
allowance of P1,500.00 a month; that he had no regular time schedule;

LA RULING
The Labor Arbiter held that the complainant was illegally dismissed.

ISSUE:
Whether or not an employer-employee relationship exists.

RULING:
Yes. The Court ruled that on a business establishment, an identification card
is usually provided not only as a security measure but mainly to identify the
holder thereof as a bona fide employee of the firm that issues it.

Together with the cash vouchers covering petitioner's salaries for the months
stated therein, the Court agreed with the labor arbiter that these matters
constitute substantial evidence adequate to support a conclusion that
petitioner was indeed an employee of private respondent.

Having been in the employ of private respondents continuously for more than
one year, under the law, petitioner is considered a regular employee.
 NCD | DJED

Villamaria v. CA
OSCAR VILLAMARIA JR., petitioner,
vs.
COURT OF APPEALS and JERRY V. BUSTAMANTE,
respondents.
G.R. No. 165881
April 19, 2006

DOCTRINE:
➢ Article 217 of the Labor Code provides the jurisdiction of the Labor
Arbiter:
1. Unfair Labor practices cases;
2. Termination disputes;
3. claim for reinstatement, those cases that workers may file
involving wage, rates of pay, hours of work, and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations;
5. Cases arising from violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and
6. All other claims, arising from employer-employee relationship,
➢ The employer has the burden of proving that the dismissal of an
employee is for a just cause. The failure of the employer to discharge
this burden means that the dismissal is not justified and that the
employee is entitled to reinstatement and back wages.
➢ Boundary-Hulog system creates juridical dual relationship:
1. Employer-Employee
2. Vendor-Vendee
 NCD | DJED

FACTS:
Petitioner Oscar Villamaria, Jr. was the owner of Villamaria Motors, engaged in
assembling passenger jeepneys with a public utility franchise to operate
along the Baclaran-Sucat route. By 1995, Villamaria stopped assembling
jeepneys and retained only nine, four of which he operated by employing
drivers on a "boundary basis."

Respondent Bustamante who drove the jeepney with Plate No. PVU-660.
Bustamante remitted P450.00 a day to Villamaria as boundary and kept the
residue of his daily earnings as compensation for driving the vehicle. In
August 1997, Villamaria verbally agreed to sell the jeepney to Bustamante
under the "boundary-hulog scheme," where Bustamante would remit to
Villarama P550.00 a day for a period of four years; Bustamante would then
become the owner of the vehicle and continue to drive the same under
Villamaria’s franchise. It was also agreed that Bustamante would make a
downpayment of P10,000.00.

Villamaria executed a contract entitled "Kasunduan ng Bilihan ng Sasakyan

sa Pamamagitan ng Boundary-Hulog" over the passenger jeepney with
Plate No. PVU-660. The parties agreed that if Bustamante failed to pay the
boundary-hulog for three days, Villamaria Motors would hold on to the vehicle
until Bustamante paid his arrears, including a penalty of P50.00 a day; in case
Bustamante failed to remit the daily boundary-hulog for a period of one week,
the Kasunduan would cease to have legal effect and Bustamante would have
to return the vehicle to Villamaria Motors.

Under the Kasunduan:

- Bustamante was prohibited from driving the vehicle without prior
authority from Villamaria Motors.
- Bustamante was authorized to operate the vehicle to transport
passengers only and not for other purposes.
 NCD | DJED

- Bustamante is required to display an identification card in front of the

windshield of the vehicle;
- Bustamante was not allowed to wear slippers, short pants or
undershirts while driving.
- He was required to be polite and respectful towards the passengers.
- He was also obliged to notify Villamaria Motors in case the vehicle was
leased for two or more days and was required to attend any meetings
which may be called from time to time.

In 1999, Bustamante and other drivers who also had the same arrangement
with Villamaria Motors failed to pay their respective boundary-hulog. This
prompted Villamaria to serve a "Paalala," reminding them that under the
Kasunduan, failure to pay the daily boundary-hulog for one week, would
mean their respective jeepneys would be returned to him without any
complaints.

On July 24, 2000, Villamaria took back the jeepney driven by Bustamante and
barred the latter from driving the vehicle. Bustamante filed a Complaint for
Illegal Dismissal against Villamaria.

On the other hand, Villamaria argued that Bustamante was not illegally
dismissed since the Kasunduan executed on August 7, 1997 transformed the
employer-employee relationship into that of vendor-vendee.

ISSUE:
Whether or not the relationship between the parties was transformed into
vendor-vendee

RULING:
No. The Supreme Court affirmed the decision of CA that under the
boundary-hulog scheme incorporated in the Kasunduan, a dual juridical
 NCD | DJED

relationship was created between petitioner and respondent: that of

employer-employee and vendor- vendee. The Kasunduan did not
extinguish the employer-employee relationship of the parties extant before
the execution of said deed.

The Court ruled that the management of the business is still in the hands of
the owner/operator, who, being the holder of the certificate of public
convenience, must see to it that the driver follows the route prescribed by the
franchising and regulatory authority, and the rules promulgated with regard
to the business operations.

Furthermore, the Court ruled that:

- The existence of an employment relation is not dependent on how the
worker is paid but on the presence or absence of control over the
means and method of the work;
- The amount earned in excess of the "boundary-hulog" is equivalent to
wages;
- That the power of dismissal was not mentioned in the Kasunduan did
not mean that private respondent never exercised such power,
- Requiring petitioner to drive the unit for commercial use, or to wear an
identification card, or to wear a decent attire, or to park the vehicle in
Villamaria Motors garage, or to inform Villamaria Motors about the
fact that the unit would be going out to the province for two days of
more, or to drive the unit carefully, etc. necessarily related to control
over the means by which the petitioner was to go about his work;

All the elements of the four-fold test are present. The SC DENIED the petition.
 NCD | DJED

Makati Haberdashery v. NLRC

MAKATI HABERDASHERY, INC et al., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION et al.,
respondents.
G.R. No. 83380-81
November 15, 1989

FACTS:
Private respondents herein have been working for petitioner Makati
Haberdashery, Inc. as tailors, seamstress, sewers, basters, and platsadoras.
They are paid on a piece-rate basis except Maria Angeles and Leonila
Serafina who are paid on a monthly basis. They are given a daily allowance of
three (P 3.00) pesos provided they report for work before 9:30 a.m. everyday.
Private respondents are required to work from or before 9:30 a.m. up to 6:00 or
7:00 p.m. from Monday to Saturday and during peak periods even on Sundays
and holidays.

The Sandigan ng Manggagawang Pilipino, a labor organization of the

respondent workers, filed a complaint for: (a) underpayment of the basic
wage; (b) underpayment of living allowance; (c) non-payment of overtime
work; (d) non-payment of holiday pay; (e) non-payment of service incentive
pay; (f) 13th month pay; and (g) benefits provided for under Wage Orders
Nos. 1, 2, 3, 4 and 5.

During the pendency of the case, private respondent Dioscoro Pelobello left
with Salvador Rivera, a salesman of petitioner Haberdashery, an open
package which was discovered to contain a "jusi" barong tagalog. When
confronted, Pelobello replied that the same was ordered by respondent
Casimiro Zapata for his customer. Zapata allegedly admitted that he copied
the design of petitioner Haberdashery.
 NCD | DJED

A memorandum was issued to each of them to explain on or before February

4, 1985 why no action should be taken against them for accepting a job order
which is prejudicial and in direct competition with the business of the
company. Both respondents allegedly did not submit their explanation and
did not report for work. Hence, they were dismissed by petitioners.
Thereafter, they filed a complaint for illegal dismissal.

LA RULING:
The Labor Arbiter rendered a decision finding respondents guilty of illegal
dismissal.

NLRC RULING:
The NLRC affirmed the decision of LA.

ISSUE:
1. Whether an employer-employee relationship exists between petitioner
Haberdashery and respondents workers.
2. Whether or not Pelobello and Zapata were illegally dismissed

RULING:
Yes. The Court reiterates that the test of employer-employee is four fold:
1. The selection and engagement of the employee
2. The payment of wages
3. The power of dismissal
4. The power to control the employee’s conduct (Control test, the most
important element).

The power of control, being the most important requisite is present. With that,
the Court found that when a customer enters into a contract with the
haberdashery, the latter directs an employee who may be a tailor, pattern
 NCD | DJED

maker, sewer, or “plantsadora” to take the customer’s measurement, which

the Court held that supervision is manifested in all these aspects.
Furthermore, the presence of control is evident from the memorandum
issued by Assistant manager addressed to Topper’s Makati tailors which
contains new procedures that must be followed:
- To follow instructions and orders from the undersigned Roger
Valderama, Ruben Delos Reyes and Ofel Bautista.
- Before accepting the job orders, tailors must check the materials, job
orders, due dates and other things to maximize the efficiency of our
production.
- Effective immediately all job orders must be finished one day before the
due date.
- Alteration-Before accepting alteration person attending on customs
(sic) must ask first or must advise the tailors regarding the due dates so
that we can eliminate what we call 'Bitin'.
- Fighting inside the shop is strictly prohibited. Any tailor violating this
memorandum will be subject to disciplinary action.

From this memorandum alone, it is evident that petitioner has reserved the
right to control its employees not only as to the result but also the means
and methods by which the same are to be accomplished.

On the other issue, the Court ruled that respondents Pelobello and Zapata
violated the employer’s rules and had committed transgression for the
copied barong tagalog. They failed to comply with the memorandum issued
to each of them, and went AWOL (absence without official leave). Under the
circumstances, it is evident that there is no illegal dismissal of said
employees.
 NCD | DJED

Caurdanetaan v. Laguesma
CAURDANETAAN PIECE WORKERS
UNION et al., petitioners,
vs.
UNDERSECRETARY BIENVENIDO E.
LAGUESMA and CORFARM GRAINS,
INC.,
respondents.
G.R. No. 83380-81
November 15, 1989

FACTS:
“Petitioner union has ninety-two (92) members who worked as ‘cargador’ at
the warehouse and rice mills of private respondent referring to Respondent
Corfarm at Umingan, Pangasinan since 1982. As cargadores, they loaded,
unloaded and piled sacks of palay from the warehouse to the cargo trucks
and those brought by cargo trucks for delivery to different places.

They were paid by private respondents on a piece rate basis. When private
respondent denied some benefits to these cargadores, the latter organized
petitioner union. Upon learning of its formation, private respondent barred its
members from working with them and replaced them with non-members of
the union sometime in the middle of 1992.

On July 9, 1992, petitioner filed a petition for certification election before the
Regional Office No. I of the Department of Labor and Employment,

Certification Election - means the process of determining through secret

ballot the sole and exclusive bargaining representative of the employees in
an appropriate bargaining unit, for purposes of collective bargaining.
 NCD | DJED

While the case is pending, petitioner also filed a complaint for illegal
dismissal, unfair labor practice, refund of illegal deductions, payment of wage
differentials, damages, legal interest etc. against private respondent. The
Labor Arbiter then issued an order granting the petition for certification
election which was earlier filed.

Public respondent Laguesma issued a resolution denying the appeal filed by

private respondent granting the petition for certification election due to lack
of employer-employee relationship.

The complainants maintained that they are laborers of the respondents

receiving P45.00 per day’s work of 8 hours.

ISSUE:
1. Whether or not an employer-employee relationship exists between the
parties
2. Whether or not respondent Laguesma acted with grave abuse of
discretion in ordering the dismissal of the petition for certification
election

RULING:
The Supreme Court ruled in favor of the petitioners. Using the “four fold test”
to determine the existence of an employer-employee relationship:
1. The power to hire
2. The payment of wages
3. The power to dismiss
4. The power to control
The Court found the presence of em-rel, based on the evidence adduced by
the petitioners. It is undeniable that petitioner’s members worked as
cargadores for private respondent. They loaded, unloaded and piled sacks of
palay from the warehouses to the cargo trucks and from the cargo trucks to
 NCD | DJED

the buyers. This work is directly related, necessary and vital to the operations
of Corfarm.

Respondent did not contradict petitioner’s allegation that it paid wages

directly to these workers without the intervention of any third-party
independent contractor. It also wielded the power of dismissal over
petitioners; Clearly, the workers are not independent contractors.

Applying Article 280 of the Labor Code, we hold that the CPWU members were
regular employees of private respondents. Their tasks were essential in the
usual business of private respondent.

Moreover, the Court ruled that in the absence of a legal impediment, the
holding of a certification election is the most democratic method of
determining the employees’ choice of their bargaining representative. It is
the best means to settle controversies and disputes involving union
representation.

Wherefore, both petitions are GRANTED by the SC.

 NCD | DJED

Orlando Farms v. NLRC

ORLANDO FARMS GROWERS ASSOCIATION/GLICERIO AÑOVER, petitioner
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION et al.,
respondents.
G.R. No. 1290176
November 25, 1998

DOCTRINE:
An employer-employee relationship can be deduced from the existence of
the following elements:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal;and
(4) the power to control the employee's conduct.

FACTS:
Petitioner Orlando Farms Growers Association is an association of landowners
engaged in the production of export quality bananas located in Kinamayan,
Sto. Tomas, Davao del Norte, established for the sole purpose of dealing
collectively with Stanfilco on matters concerning technical services, canal
maintenance, irrigation and pest control. Respondents, on the other hand,
were hired as farm workers by several member-landowners but; nonetheless,
were made to perform functions as packers and harvesters in the
plantation of petitioner association.

Respondents were dismissed from 1993-1994. Several complaints were filed

against the petitioner for illegal dismissal.

LA RULING
The Labor Arbiter rendered a decision declaring the dismissal illegal.
 NCD | DJED

NLRC RULING
The NLRC affirmed the decision of LA. Petitioner then filed the instant petition
for certiorari.

The petitioner alleged that the respondents were not its employees, but of the
individual landowners and it could have never exercised the power of control
over them.

ISSUE:
Whether or not there is an employer-employee relationship between the
parties

RULING:
The Court reiterated that in the determination of the existence of
employer-employee relationship, the following elements must be present:
1. The manner of selection and engagement
2. The payment of wages
3. The presence or absence of the power of dismissal
4. The presence or absence of the power of control, being the most
important

The following circumstances which support the existence of

employer-employee relations cannot be denied based on several circulars
and memoranda being issued by the association concerning:
- Absences without formal request
- Loitering in the work area
- Disciplinary measures with every worker must comply
- The employees were issued identification cards
 NCD | DJED

Invoking the ruling in the case of Domasig v. NLRC, identification cards are
not only as a security measure but mainly to identify the holder as a bona
fide employee of the firm.

The SC DISMISSED the petition.

 NCD | DJED

Maraguinot v. VIVA
ALEJANDRO MARAGUINOT, JR. and PAULINO ENERO, petitioners
vs.
NATIONAL LABOR RELATIONS COMMISSION et al.,
respondents.
G.R. No. 120969
January 22, 1998

DOCTRINE:
➢ A project employee or a member of a work pool may acquire the status
of a regular employee when the following concur:
a) There is a continuous rehiring of project employees even after
cessation of a project;
b) The tasks performed by the alleged "project employee" are vital,
necessary and indispensable to the usual business or trade of the
employer.
➢ To be a job contractor, associate producers must have tools,
equipment, machinery, work premises, and other materials necessary
to make motion pictures.

FACTS:
Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by
private respondents on 18 July 1989 as part of the filming crew with a salary of
P375.00 per week. About four months later, he was designated Assistant
Electrician with a weekly salary of P400.00, which was increased to P450.00. In
June 1991, he was promoted to the rank of Electrician with a weekly salary of
P475.00, which was increased to P539.00

Petitioner Paulino Enero, on his part, claims that private respondents

employed him in June 1990 as a member of the shooting crew with a weekly
 NCD | DJED

salary of P375.00, which was increased to P425.00 in May 1991, then to P475.00
on 21 December 1991.

Petitioners' tasks consisted of loading, unloading and arranging movie

equipment in the shooting area as instructed by the cameraman, returning
the equipment to Viva Films' warehouse, assisting in the "fixing" of the lighting
system, and performing other tasks that the cameraman and/or director may
assign.

Sometime in May 1992, petitioners sought the assistance of their supervisors,

Mrs. Alejandria Cesario, to facilitate their request that private respondents
adjust their salary in accordance with the minimum wage law. Thereafter, Mrs.
Cesario informed petitioners that Mr. Vic del Rosario would agree to increase
their salary only if they signed a blank employment contract but the
petitioners refused. Private respondents forced Enero to go on leave then
refused to take him back when he reported for work, while Maraguinot was
dropped from the company payroll. The petitioners were asked again to sign
the blank employment contract but they still refused. Thus, private
respondents terminated his services.

Petitioners filed a complaint for illegal dismissal before the LA.

Private respondents contention:

They contract persons called "producers" also referred to as "Associate
Producers” to "produce" or make movies for private respondents; and contend
that petitioners are project employees of the association producers who, in
turn, act as independent contractors. As such, there is no
employer-employee relationship between petitioners and private
respondents.
 NCD | DJED

LA RULING
The LA ruled in favor of the petitioners. In their decision, the complainants are
employees of the respondents and the producer cannot be considered as
independent contractor but as labor-only contractor. Petitioners were illegally
dismissed.

NLRC RULING
The NLRC reversed the ruling of the LA.

ISSUE:
● Whether or not an employer-employee relationship exists between the
parties.
● Whether or not the petitioners were illegally dismissed.

RULING:
On the first issue:
Using the four fold test: 1) The selection and engagement of the employee; 2)
The payment of wages; 3) The power of dismissal; 4) the employer's power to
control of the employee's conduct, the most important element is the
employer's control of the employee's conduct, not only as to the result of the
work to be done but also as to the means and methods to accomplish the
same.

The Court ruled that the four elements are present in this case. VIVA's
control is evident in its mandate that the end result must be a "quality film
acceptable to the company." The means and methods to accomplish the
result are likewise controlled by VIVA, the movie project must be finished
within schedule without exceeding the budget, and additional expenses must
be justified; certain scenes are subject to change to suit the taste of the
company; and the Supervising Producer, the "eyes and ears" of VIVA and del
 NCD | DJED

Rosario, intervenes in the movie-making process by assisting the associate

producer in solving problems encountered in making the film.

Element of selection is also present. It is evident in the appointment slips that

were issued to all crew members which states that during the term of the
appointment, they shall comply with the duties and responsibilities of their
position and to observe rules and regulations promulgated by their superiors.

The Court found that private respondents expressly admitted that petitioners
were part of a work pool; and, while petitioners were initially hired possibly as
project employees, they had attained the status of regular employees in view
of VIVA's conduct.

A project employee or a member of a work pool may acquire the status of a

regular employee when the following concur:
1) There is a continuous rehiring of project employees even after cessation of
a project
2) The tasks performed by the alleged "project employee" are vital, necessary
and indispensable to the usual business or trade of the employer.

The Court explained:

A work pool may exist although the workers in the pool do not receive salaries
and are free to seek other employment during temporary breaks in the
business, provided that the worker shall be available when called to report of
a project. Although primarily applicable to regular seasonal workers, this
set-up can likewise be applied to project workers insofar as the effect of
temporary cessation of work is concerned. This is beneficial to both the
employer and employee for it prevents the unjust situation of "coddling labor
at the expense of capital" and at the same time enables the workers to attain
the status of regular employees. The Court's ruling here is meant precisely to
 NCD | DJED

give life to the constitutional policy of strengthening the labor sector, but, we
stress, not at the expense of management.

On the second issue:

The petitioners, having gained the status of regular employee; the Court ruled
that their dismissal was unwarranted and was not a valid cause under the
Labor Code.

WHEREFORE, the Supreme Court GRANTED the petition.

 NCD | DJED

Sonza v. ABS
JOSE Y. SONZA, petitioner
vs.
ABS-CBN BROADCASTING CORPORATION,
respondent.
G.R. No. 138051
June 10, 2004

DOCTRINE:
➢ The existence of an employer-employee relationship is a question of
fact. Appellate courts accord the factual findings of the Labor Arbiter
and the NLRC not only respect but also finality when supported by
substantial evidence. Substantial evidence means such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.
➢ Independent contractors often present themselves to possess unique
skills, expertise or talent to distinguish them from ordinary employees.
➢ A radio broadcast specialist who works under minimal supervision is an
independent contractor.
➢ In a labor-only contract, there are three parties involved: (1) the
"labor-only" contractor; (2) the employee who is ostensibly under the
employ of the "labor-only" contractor; and (3) the principal who is
deemed the real employer. Under this scheme, the "labor-only"
contractor is the agent of the principal.

FACTS:
The respondent ABS-CBN BROADCASTING CORPORATION (ABS-CBN) signed an
agreement with the Mel and Jay and Development Corporation (MJMDC). The
former was represented by its corporate officers while the latter was
represented by Sonza as President and General Manager. Under the
 NCD | DJED

agreement, MJMDC agreed to provide Sonza’s services exclusively to

ABS-CBN as talent for radio and television.

ABS-CBN agreed to pay for SONZA’s services a monthly talent fee of ₱310,000
for the first year and ₱317,000 for the second and third year of the Agreement.
ABS-CBN would pay the talent fees on the 10th and 25th days of the month.

Two years later, petitioner Sonza irrevocably resigned in view of recent events
concerning his programs and career and served a notice of rescission of the
said agreement. Thereafter, the petitioner filed a complaint before the DOLE
that the ABS-CBN did not pay his salaries, separation pay, service incentive
leave pay, 13th month pay, signing bonus, travel allowance and amounts due
under the Employees Stock Option Plan ("ESOP").

ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee

relationship existed between the parties.

LA RULING
The LA dismissed the petition due to lack of jurisdiction.

CA and NLRC RULING

The CA affirmed the decision of the NLRC’s finding that no
employer-employee relationship existed between SONZA and ABS-CBN.

ISSUE:
Whether or not an employer-employee relationship exists between SONZA
and ABS-CBN.
 NCD | DJED

RULING:
NO. There is no case law stating that a radio and television program host is an
employee of the broadcast station. The Supreme Court ruled that ABS-CBN
engaged SONZA’s services to co-host its television and radio programs
because of SONZA’s peculiar skills, talent and celebrity status.

Element of selection:
Independent contractors often present themselves to possess unique skills,
expertise or talent to distinguish them from ordinary employees. The Court
stressed that the specific selection and hiring of SONZA, because of his unique
skills, talent and celebrity status not possessed by ordinary employees, is a
circumstance indicative of an independent contractual relationship. If
SONZA did not possess such unique skills, talent and celebrity status, ABS-
CBN would not have entered into the Agreement with SONZA but would have
hired him through its personnel department just like any other employee.

Element of compensation:
The Court ruled that the talent fees and benefits paid to SONZA were the result
of negotiations that led to the Agreement. SONZA’s talent fees, amounting to
₱317,000 monthly in the second and third year, are so huge and out of the
ordinary that they indicate more an independent contractual relationship
rather than an employer-employee relationship. SONZA acting alone
possessed enough bargaining power to demand and receive such huge
talent fees for his services.

Element of dismissal:
The Court found that for violation of any provision of the Agreement, either
party may terminate their relationship. ABS-CBN could not retrench SONZA
because ABS-CBN remained obligated to pay SONZA’s talent fees during the
life of the Agreement. This circumstance indicates an independent
contractual relationship between SONZA and ABS-CBN.
 NCD | DJED

Element of control:
The Court in applying the control test, found that SONZA is not an employee
but an independent contractor. The Court explained that ABS-CBN did not
assign any other work to SONZA. To perform his work, SONZA only needed his
skills and talent. How SONZA delivered his lines, appeared on television, and
sounded on radio were outside ABS-CBN’s control. SONZA did not have to
render eight hours of work per day. ABS-CBN could not dictate the contents
of SONZA’s script. The clear implication is that SONZA had a free hand on
what to say or discuss in his shows provided he did not attack ABS-CBN or its
interests.

Thus the Court held that ABS-CBN was not involved in the actual performance
that produced the finished product of SONZA’s work nor exercise control over
the means and methods of performance of SONZA’s work.

WHEREFORE, the Supreme Court DENIED the petition.

 NCD | DJED

Orozco v. CA
WILHELMINA S. OROZCO, petitioner
vs.
THE FIFTH DIVISION OF THE HONORABLE COURT OF APPEALS, PHILIPPINE DAILY
INQUIRER, and LETICIA
JIMENEZ MAGSANOC,
respondents.
G.R. No. 155207
August 13, 2008

DOCTRINE:
➢ The existence of an employer-employee relationship is essentially a
question of fact. Factual findings of quasi-judicial agencies like the
NLRC are generally accorded respect and finality if supported by
substantial evidence.
➢ Control test is whether the employer controls or has reserved the right
to control the employee, not only as to the work done, but also as to the
means and methods by which the same is accomplished.
➢ Rules which serve as general guidelines towards the achievement of
the mutually desired result are not indicative of the power of control.

FACTS:
The Philippine Daily Inquirer (PDI) engaged the services of the petitioner to
write a weekly column for its Lifestyle section. She religiously submitted her
articles every week, and received compensation of P250.00 later increased to
P300.00 for every column published. Petitioner claims that her then editor, Ms.
Lita T. Logarta, told her that respondent Leticia Jimenez Magsanoc, PDI Editor
in Chief, wanted to stop publishing her column for no reason at all and
advised the petitioner to talk to Magsanoc herself.
 NCD | DJED

PDI Chairperson Eugenia Apostol who had asked to stop publication of her
column, but that in a telephone conversation with Apostol, the latter said that
Magsanoc informed her (Apostol) that the Lifestyle section already had many
columnists.

In the company's judgment, petitioner’s column failed to improve, continued

to be superficially and poorly written, and failed to meet the high standards of
the newspaper. Hence, they decided to terminate the petitioner's column. The
petitioner filed a complaint for illegal dismissal before the NLRC.

LA RULING
The LA ruled in favor of the petitioner.

NLRC RULING
The NLRC affirmed the decision of the LA.

CA RULING
The CA reversed the decision of the NLRC and dismissed the complaint.

ISSUE:
Whether or not the petitioner was an employee of the PDI.

RULING:
NO.
The petitioner’s arguments:
● The PETITIONER had to ensure that the contents of her column hewed
closely to the objectives of its Lifestyle Section and the over-all
principles that the newspaper projects itself to stand for.
● The PETITIONER, as a columnist, had to observe the deadlines of the
newspaper for her articles to be published.
 NCD | DJED

● PETITIONER’s writings had a definite day on which it was going to

appear.
● PETITIONER was disciplined to submit her articles on highly relevant and
significant issues on time by the PRIVATE RESPONDENTS.
● PETITIONER had to discuss the topics first and submit the articles two
days before publication date to keep her column in the newspaper.

The Supreme Court ruled that these are not the form of control test that our
labor law contemplates to establish employer-employee relationship. The
Court stressed that not all rules imposed by the hiring party on the hired party
indicate that the latter is an employee of the former. Rules which serve as
general guidelines towards the achievement of the mutually desired result
are not indicative of the power of control.

Furthermore, the Court found that there is no element of control that is

present in this case. Petitioner has not shown that PDI, acting through its
editors, dictated how she was to write or produce her articles each week.
Aside from the constraints presented by the space allocation of her column,
there were no restraints on her creativity; petitioner was free to write her
column in the manner and style she was accustomed to and to use
whatever research method she deemed suitable for her purpose. The
important factor to consider in the "control test" is still the element of control
over how the work itself is done, not just the end result thereof.

The Court used the same doctrine in the case of “Sonza v. ABS-CBN”
Petitioner was engaged as a columnist for her talent, skill, experience, and
her unique viewpoint as a feminist advocate. Thus, the Court declared that
the petitioner was not an employee of the PDI but an independent contractor.

The Supreme Court DISMISSED the petition.

 NCD | DJED

Begino v. ABS
NELSON V. BEGINO et al., petitioners
vs.
ABS-CBN CORPORATION et al.,
respondents.
G.R. No. 199166
April 20, 2015

DOCTRINE:
➢ Article 295 of the Labor Code contemplates four kinds of employees:
a) Regular employees - those who have been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer;
b) Project employees - those whose employment has been fixed for
a specific project or undertaking, the completion or termination of
which has been determined at the time of the engagement of the
employee;
c) Seasonal employees - those who work or perform services which
are seasonal in nature, and the employment is for the duration of
the season;
d) Casual employees - those who are not regular, project, or
seasonal employees.
➢ Jurisprudence has added that of contractual or fixed term employee
which, if not for the fixed term, would fall under the category of regular
employment in view of the nature of the employee’s engagement,
which is to perform activity usually necessary or desirable in the
employer’s business.
 NCD | DJED

FACTS:
Respondent ABS-CBN Corporation is a television and radio broadcasting
corporation which, for its Regional Network Group in Naga City, employed
respondent Amalia Villafuerte as Manager. Through Villafuerte, ABS-CBN
engaged the services of petitioners Nelson Begino and Gener Del Valle
sometime in 1996 as Cameramen/Editors for TV Broadcasting. Petitioners Ma.
Cristina Sumayao and Monina Avila-Llorin were likewise similarly engaged as
reporters. Their services are engaged through Talent Contracts which are
regularly renewed over the years.

Petitioners were tasked with coverage of news items for subsequent daily
airings in respondents’ TV Patrol Bicol Program. Their talent contract provides
the following:
a) Talent’s creation and performance of work in accordance with the
ABS-CBN’s professional standards and compliance with its policies and
guidelines covering intellectual property creators, industry codes as
well as the rules and regulations of the Kapisanan ng mga
Broadcasters sa Pilipinas (KBP) and other regulatory agencies;
b) Talent’s non-engagement in similar work for a person or entity directly
or indirectly in competition with or adverse to the interests of ABS-CBN
and non-promotion of any product or service without prior written
consent;
c) The results-oriented nature of the talent’s work which did not require
them to observe normal or fixed working hours.

Claiming that the petitioners were employees of ABS-CBN, the former filed
against the respondents.

Petitioners contention:
They performed functions necessary and desirable in ABS-CBN's business.
Mandated to wear company IDs and provided all the equipment they needed,
 NCD | DJED

petitioners averred that they worked under the direct control and supervision
of Villafuerte and, at the end of each day, were informed about the news to be
covered the following day, the routes they were to take and, whenever the
subject of their news coverage is quite distant, even the start of their workday.

Respondent’s contention:
Petitioners were hired as talents, to act as reporters and/or cameramen for TV
Patrol Bicol for designated periods and rates. Fully aware that they were not
considered or to consider themselves as employees of a particular
production or film outfit, petitioners were supposedly engaged on the basis of
the skills, knowledge or expertise they already possessed. That the petitioners
were inevitably subjected to some degree of control, the same was allegedly
limited to the imposition of general guidelines on conduct and performance.

LA RULING
Petitioners were regular employees of the respondent.

CA RULING
CA reversed the findings of the LA and NLRC.

ISSUE:
Whether or not an employer-employee relationship exists between the
parties.

RULING:
The Court applied the four-fold test:
a) The selection and engagement of the employee
b) The payment of wages
c) The power of dismissal
 NCD | DJED

d) The employer's power to control the employee on the means and

methods by which the work is accomplished.

The Court ruled that the petitioners are regular employees of ABS-CBN. As
cameramen/editors and reporters, petitioners were undoubtedly performing
functions necessary and essential to ABS-CBN’s business of broadcasting
television and radio content. It matters little that petitioners’ services were
engaged for specified periods for TV Patrol Bicol and that they were paid
according to the budget allocated therefor.

Petitioners were also continuously re-hired by respondents over the years. To

the mind of the Court, respondents’ repeated hiring of petitioners for its
long-running news program positively indicates that the latter were
ABS-CBN’s regular employees.

If the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the
repeated or continuing performance as sufficient evidence of the necessity, if
not indispensability of that activity in the business.

The element of control are also present in this case. Petitioners’ Talent
Contracts tellingly provided that ABS-CBN retained “all creative,
administrative, financial and legal control” of the program to which they were
assigned. They are also required to “to attend and participate in all
promotional or merchandising campaigns, activities or events for the
Program, as well as to perform their functions “at such locations and
Performance/Exhibition Schedules” it provided or, subject to prior notice, as it
chose determine, modify or change.

WHEREFORE, the SC REVERSED the decision of CA.

 NCD | DJED

Francisco v. NLRC
ANGELINA FRANCISCO, petitioner
vs.
NATIONAL LABOR RELATIONS COMMISSION et al.,
respondents.
G.R. No. 170087
August 31, 2006

DOCTRINE:
➢ in addition to the standard of right-of-control like the inclusion of the
employee in the payrolls, to give a clearer picture in determining the
existence of an employer-employee relationship based on an analysis
of the totality of economic circumstances of the worker.
➢ The determination of the relationship between employer and employee
depends upon the circumstances of the whole economic activity:
➢ Economic reality test:
a) the extent to which the services performed are an integral part of
the employer’s business;
b) the extent of the worker’s investment in equipment and facilities;
c) the nature and degree of control exercised by the employer;
d) the worker’s opportunity for profit and loss;
e) the amount of initiative, skill, judgment or foresight required for
the success of the claimed independent enterprise;
f) the permanency and duration of the relationship between the
worker and the employer;
g) the degree of dependency of the worker upon the employer for
his continued employment in that line of business.
➢ A corporation who registers its workers with the SSS is proof that the
latter were the former’s employees. The coverage of Social Security Law
is predicated on the existence of an employer-employee relationship.
 NCD | DJED

FACTS:
The petitioner was hired by Kasei Corporation during its incorporation stage.
She was designated as Accountant and Corporate Secretary and was
assigned to handle all the accounting needs of the company. She was also
designated as Liaison Officer to the City of Makati to secure business permits,
construction permits and other licenses for the initial operation of the
company.

In 1996, petitioner was designated Acting Manager. As Acting Manager,

petitioner was assigned to handle recruitment of all employees and perform
management administration functions; represent the company in all dealings
with government agencies, especially with the Bureau of Internal Revenue
(BIR), Social Security System (SSS) and in the city government of Makati; and
to administer all other matters pertaining to the operation of Kasei
Restaurant.

For five years, the petitioner performed the duties of Acting Manager. In
January 2001, petitioner was replaced by Liza R. Fuentes as Manager.
Petitioner alleged that she was required to sign a prepared resolution for her
replacement but she was assured that she would still be connected with
Kasei Corporation. Thereafter, Kasei Corporation reduced her salary by
P2,500.00. In October 2001, she was informed that she is no longer connected
with the company.

Actual dismissal - when the employment was terminated due to just and
authorize cause.
Constructive dismissal - refer to a situation where an employee resigned
due to the unbearable working conditions set by the employer, making it
impossible for the employee to continue with the employment.
 NCD | DJED

Respondents contention:
Private respondents averred that petitioner is not an employee of Kasei
Corporation. They alleged that petitioner was hired in 1995 as one of its
technical consultants on accounting matters and act concurrently as
Corporate Secretary. As technical consultant, petitioner performed her work
at her own discretion without control and supervision of Kasei Corporation.

LA RULING
The LA rendered a decision finding that the petitioner was illegally dismissed.

NLRC RULING
The NLRC affirmed the decision of the LA.

ISSUES:
● Whether or not an employer-employee relationship exists.
● Whether or not the petitioner was illegally dismissed.

RULING:
YES. The Court in applying the “control test” has no doubt that the petitioner
is an employee of Kasei Corporation and under the direct control and
supervision of the latter. The petitioner reported for work regularly and served
in various capacities as Accountant, Liaison Officer, Technical Consultant,
Acting Manager and Corporate Secretary, with substantially the same job
functions, that is, rendering accounting and tax services to the company and
performing functions necessary and desirable for the proper operation of the
corporation such as securing business permits and other licenses over an
indefinite period of engagement.

The Supreme Court also applied the “economic reality test”. The petitioner
had served the company for six years before her dismissal, receiving check
 NCD | DJED

vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses

and allowances, as well as deductions and Social Security contributions.
Petitioner’s membership in the SSS as manifested by a copy of the SSS
specimen signature card which was signed by the President of Kasei
Corporation and the inclusion of her name in the on-line inquiry system of the
SSS evinces the existence of an employer-employee relationship between
petitioner and respondent corporation.

Having ruled that the petitioner is an employee of Kasei Corporation, the

Court further declared that the corporation constructively dismissed the
petitioner when it reduced her salary. This amounts to an illegal termination of
employment, where the petitioner is entitled to full backwages.

WHEREFORE, the SC GRANTED the petition.

 NCD | DJED

Negros v. Teng
NEGROS SLASHER, INC et al., petitioners
vs.
ALVIN L. TENG, respondent.
G.R. No. 187122
February 22, 2012

DOCTRINE:
➢ Infractions committed by an employee should merit only the
corresponding penalty demanded by the circumstance. The penalty
must be commensurate with the act, conduct or omission imputed to
the employee and must be imposed in connection with the disciplinary
authority of the employer.

FACTS:
Respondent Alvin Teng is a professional basketball player who started his
career as such in the Philippine Basketball Association and then later on
played in the Metropolitan Basketball Association (MBA). Teng signed a
3-year contract with the Laguna Lakers. But before the expiration of the said
contract, the Lakers traded Teng to petitioner Negros Slashers with the latter
assuming the obligations of Laguna Lakers including a monthly salary.

On game number 4 of the MBA Championship, Teng had a below-par playing

performance which impelled the coaching staff to pull him out of the game.
In game 5, Teng called-in sick and did not play. Thereafter, the petitioner
wrote a letter requiring him to explain in writing why no disciplinary action
should be taken against him. He was also informed that a formal
investigation would be conducted but did not push through because Teng
was absent.
 NCD | DJED

On March 16 2001, the management came up with a decision informing of his

termination from the team. As a result of this, Teng filed a complaint for illegal
dismissal.

LA RULING
The LA rendered a decision finding Teng’s dismissal illegal.

NLRC RULING
The NLRC set aside the decision of the LA.

CA RULING
The CA set aside the decision of the NLRC.

ISSUE:
Whether or not Teng was illegally dismissed.

RULING:
The Supreme Court found that the penalty of dismissal against Teng was too
harsh. While missing a team game is a punishable offense, the Court affirmed
the Labor Arbiter that such an attitude of an employee does not justify the
extreme penalty of dismissal from service. Petitioners could have opted to
impose a fine or suspension on Teng for his unacceptable conduct. Other
forms of disciplinary action could also have been taken after the incident
to impart on the team that such misconduct will not be tolerated.

WHEREFORE, the SC DENIED the petition.

 NCD | DJED

Bernarte v. PBA
JOSE MEL BERNARTE, petitioner.
vs.
PHILIPPINE BASKETBALL ASSOCIATION (PBA) et al.,
respondents.
G.R. No. 192084
September 14, 2011

DOCTRINE:
➢ Not every form of control that a party reserves to himself over the
conduct of the other party in relation to the services being rendered
may be accorded the effect of establishing an employer-employee
relationship.
➢ Two interpretation of rules and their effects:
○ Rules that merely serve as guidelines towards the achievement of
the mutually desired result without dictating the means or
methods to be employed in attaining it
■ Aim only to promote the result
■ Create NO employer-employee relationship
○ Rules that control or fix the methodology and bind or restrict the
party hired to the use of such means
■ Addresses both the result and the means used to achieve it

FACTS:
Complainant Jose Bernarte was hired by PBA as a referee by signing
contracts on a year-to-year basis, which also underwent changes. Bernarte
then received a letter advising him that his contract would not be renewed
citing his unsatisfactory performance on and off the court. He felt that the
dismissal was caused by his refusal to fix a game.
 NCD | DJED

Respondents aver that complainant entered into two contracts of retainer

with the PBA. Complainant was not illegally dismissed because he was not an
employee of the PBA. His respective contract of retainer was simply not
renewed.

ISSUE:
Whether or not petitioner Bernarte is an employee of respondent PBA.

RULING:
NO. SC held that petitioner is only an independent contractor.

The stipulations in the retainer contract of petitioner hardly demonstrate

control over the means and methods by which petitioner performs his work
as a referee officiating a PBA basketball game. On the contrary, they merely
serve as rules of conduct or guidelines in order to maintain the integrity of the
professional basketball league.

Not every form of control that a party reserves to himself over the conduct of
the other party in relation to the services being rendered may be accorded
the effect of establishing an employer-employee relationship.

SC affirmed that once in the playing court, the referees exercise their own
independent judgment, based on the rules of the game, as to when and how
a call or decision is to be made. The referees decide whether an infraction
was committed, and the PBA cannot overrule them once the decision is made
on the playing court.

Moreover, petitioner is an independent contractor which is required to report

for work only when PBA games are scheduled or three times a week. In
addition, there are no deductions for contributions to the Social Security
 NCD | DJED

System, Philhealth or Pag-Ibig, which are the usual deductions from

employees’ salaries.

Lastly, the fact that PBA repeatedly hired petitioner does not by itself prove
that petitioner is an employee of the former. The continuous rehiring by PBA of
petitioner simply signifies the renewal of the contract between PBA and
petitioner.

WHEREFORE, the petition is DENIED.

 NCD | DJED

Ditiangkin v. Lazada
DITIANGKIN, petitioner,
vs.
LAZADA E-SERVICES PHILIPPINES, INC., respondent.
G.R. No. 246892
September 21, 2022

DOCTRINES:
➢ One's employment is a property right which cannot be revoked without
due process.
➢ In labor contracts, the nature of employment of a worker is prescribed
by law, regardless of what the contract and the parties present it to be.
(Article 1700 of the Civil Code)
➢ Four classifications of employment (Article 295 of the Labor Code)
○ Regular employees - those who have been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer;
○ Project employees - those whose employment has been fixed for
a specific project or undertaking, the completion or termination of
which has been determined at the time of the engagement of the
employee;
○ Seasonal employees - those who work or perform services which
are seasonal in nature, and the employment is for the duration of
the season;
○ Casual employees - those who are not regular, project, or
seasonal employees.
➢ Fixed-term employment - an arrangement wherein an employee is
hired for a specific period. Fixed-term employments are recognized by
law for projects with pre-determined completion or generally in a work
where a fixed term is essential and natural appurtenance.
➢ Four-fold test and economic dependence test
 NCD | DJED

➢ Two types of contractors

○ Legitimate job contractors - governed by Article 106 of the Labor
Code
■ Conditions for Permissible Contracting or Subcontracting
Arrangements (Section 8 of DOLE Department Order No.
174-2017)
■ Governed by trilateral relationships: principal -> contractor
-> worker
○ Independent contractors - individuals who possess unique skills
and talents which set them apart from ordinary employees and
whose means and methods of work are free from the control of
the employer
■ Governed by bilateral relationships: principal ->
independent contractor

FACTS:
Petitioners Christian Ditiangkin, Hendrix Molines, Harvey Juanio, Joselito Verde,
and Brian Cubacub (collectively, riders) were hired as riders by respondent
Lazada E-Services Philippines, Inc, (Lazada). Each of them signed an
Independent Contractor Agreement (Contract) which states that they will be
paid the service fee of P1,200 a day; that they are engaged for a period of one
year; and that the riders will use their privately-owned motorcycles in their
trips.

The riders were then told by a dispatcher that they have been removed from
their usual routes and will no longer be given any schedules. They learned
that their routes were already given to other employees. The riders claimed
that they are regular employees of Lazada given that the means and
methods by which they carry out their work is subject to the discretion and
control of Lazada.
 NCD | DJED

On the other hand, Lazada maintained that the riders are not regular
employees but independent contractors, and that delivery is merely an
ancillary activity and not its main line of business.

ISSUE:
Whether or not petitioners are regular employees of respondent Lazada.

RULING:
YES. SC held that petitioners are regular employees and not independent
contractors.

The petitioners satisfy both the four-fold and economic dependence tests.
First, petitioners are directly employed by respondent Lazada as evidenced by
the Contracts they signed. Second, as indicated in the Contract, petitioners
receive their salaries from respondent Lazada. Petitioners are paid by
respondent Lazada the amount of P1,200.00 for each day of service. Third,
respondent Lazada has the power to dismiss petitioners. In their contract,
respondents can immediately terminate the agreement if there is a breach of
material provisions of the Contract. Lastly, respondent Lazada has control
over the means and methods of the performance of petitioners' work, which is
explicit in their agreement.

Moreover, respondent Lazada requires the accomplishment of a route sheet,

and imposes on petitioners a fine of P500 if an item is lot on top of its actual
value. Petitioners were also required to submit trip tickets and incident reports
to respondent. The circumstances of the whole economic activity between
the parties also confirm the existence of employer-employee relationship, as
the petitioners are economically dependent on respondents for their
continued employment for their livelihood.

WHEREFORE, the petition is GRANTED.