36575265 Labor Case Digests

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University of San Carlos - College of Law

Labor Standards

Midterm CaseDigestsAtty. Jefferson M. Marquez

Compiled by: Ma. Cecelia Timbal LlB-2 Rm 402


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University of San Carlos College of Law Labor Standards Midterm CaseDigests

ContentsContents ..................................................................................................................... 2

PASEI vs Torres (1992) G.R. 101279 ............................................................................. 2

San Juan de Dios Hospital vs NLRC (1997) G.R. 126383 ............................................... 3

ABS-CBN vs Nazareno (2006) G.R. 164156 .................................................................. 9

Francisco vs NLRC (2006) 500 SCRA 690 .................................................................. 11

Nogales et al., vs Capitol Medical Center (2006) G.R. 142625 ....................................12

Coca-Cola Bottlers Phils., vs Dr. Climaco (2007) G.R. 146881 .................................... 13

Calamba Medical Center vs NLRC (2008) G.R. 176484 ............................................... 13

Ollendorff vs Abrahamson (1918) G.R. 13228 ............................................................ 14

Del Castillo vs Richmond (1924) G.R. L-21127 ........................................................... 15Philippine Telegraph & Telephone Co vs NLRC (1997) G.R. 118978 .............................16

Star Paper Corp., vs Simbol (2006) G.R. 164774 ........................................................ 16

Rivera vs Solidbank (2006) G.R. 163269 .................................................................... 17

Employers Confederation of the Phils vs NWPC (1991) 201 SCRA 759 .......................20

Mabeza vs NLRC () 271 SCRA 670 .............................................................................. 21

Joy Brothers Inc., vs NWPC (1997) 273 SCRA 622 ...................................................... 22

Millares et al., vs NLRC () 305 SCRA 501 .................................................................... 24

International School Alliance of Educators vs Quisumbing (2000) 333 SCRA 13 .........25Bankard Employees Union vs NLRC (2004) G.R. 140689 ............................................ 26

EJR Crafts Corp., vs CA (2006) ................................................................................... 28

Sapio vs Undaloc Construction (2008) G.R. 155034 ................................................... 33

Hon. Secretary of Labor vs Panay Veterans Security and Investigation Agency (2008)G.R. 167708 .............................................................................................................. 34

Peoples Broadcasting vs Secretary of DOLE (2009) G.R. 179652 .............................. 35

Phil Hoteliers Inc., vs National Union of Workers in Hotel Restaurant & Allied Industries

Dusit Hotel Nikko Chapter (2009) G.R. 181972 ........................................................ 36Gaa vs Court of Appeals (1985) 140 SCRA 304 .......................................................... 38

Nestle Phils Inc., vs NLRC (1991) 193 SCRA 504 ........................................................ 39

Five J Taxi vs NLRC (1992) 235 SCRA 556 ................................................................... 40

Manila Electric Co vs Sec of Labor (1999) G.R. 127598 .............................................. 41

2 M a . C e c e l i a T i m b a l L l B 2R m 4 0 2


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Philippine Veterans Bank vs NLRC (1999) G.R. 130439 .............................................. 41

Philippine Appliance Corp., vs Court of Appeals (2004) G.R. 149434 ..........................42

Special Steel Products vs Villareal (2004) G.R. 143304 .............................................. 43

Agabon vs NLRC (2004) G.R. 158693 ......................................................................... 44

American Wire & Cable Daily Rated Employees vs American Wire (2005) G.R. 155059................................................................................................................................. 44

Honda Philippines Inc., vs Samahang Manggagawa sa Honda (2005) G.R. 145561 ....45

Producers Bank vs NLRC () 335 SCRA 506 ................................................................. 45

Jardin vs NLRC (2000) G.R. 119268 ............................................................................ 46

Manila Jockey Club Employees Labor Union vs Manila Jockey Club (2007) G.R. 167601................................................................................................................................. 47

San Miguel Corp., vs Layoc Jr. Et al., (2007) G.R. 149640 ........................................... 47

San Miguel Corp vs Pontillas (2008) G.R. 155178 ....................................................... 47Arco Metal Products Co. Inc., et al., vs Samahan ng mga Manggagawa sa Arco Metal NAFLU (2008) G.R. 170734 ........................................................................................ 48

Genesis Transport Service et al., vs UMM Genesis Transport (2010) G.R. 182114 .......48

Congson vs NLRC (1995) 243 SCRA 260 .................................................................... 49

North Davao Mining vs NLRC (1996) 254 SCRA 721 ................................................... 51

Sime Darby Pilipinas Inc., vs NLRC (1998) 289 SCRA 86 .............................................53

Philippine Airlines vs NLRC (1999) 302 SCRA 582 ...................................................... 54

Linton Commercial Co., vs Hellera (2007) G.R. 163147 .............................................. 55Bisig Manggagawa sa Tryco vs NLRC (2008) G.R. 151309 .......................................... 56

Union Filipro Employees vs Vivar (1992) 205 SCRA 203 ............................................. 57

National Sugar Refinery Corp vs NLRC (1993) 220 SCRA 452 .....................................58

Salazar vs NLRC (1996) 256 SCRA 273 ...................................................................... 60

Labor Congress of the Philippines vs NLRC (1998) G.R. 123938 ................................. 61

Mercidar Fishing Corp., vs NLRC (1998) G.R. 112574 ................................................. 62

San Miguel Corp., vs Court of Appeals (2002) G.R. 146775 ........................................ 62

Tan vs Lagarama (2002) G.R. 151228 ........................................................................ 63

Lambo vs NLRC (1999) 317 SCRA 420 ....................................................................... 63

R&E Transport vs Latag (2004) G.R. 155214 .............................................................. 63

Asian Transmission vs Court of Appeals (2004) 425 SCRA 478 ................................... 64

Autobus Transport System vs Bautista (2005) G.R. 156364 ....................................... 65



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San Miguel Corp., vs Del Rosario (2005) G.R. 168194 ................................................ 66

Penaranda vs Baganga Plywood Corp (2006) G.R. 159577 ......................................... 67

House of Sara Lee vs Rey (2006) G.R. 149013 ........................................................... 68

Leyte IV Electric Cooperative Inc., vs LEYECO IV Employees Union ALU (2007) G.R.

157775 ...................................................................................................................... 69San Miguel Corp., et al., vs Layoc, Jr., et al., (2007) G.R. 149640 ............................... 70

Bahia Shipping Services Inc., vs Chua (2008) G.R. 162195 ........................................ 71

PNCC Skyway Traffic Management & Security Division Workers Organization vs PNCCSkyway Corp., (2010) G.R. 171231 ............................................................................ 71

Pantranco North Express vs NLRC (1996) 259 SCRA 161 ............................................ 72

R&E Transport vs Latag (2004) G.R. 155214 .............................................................. 73

Gerlach vs Reuters Ltd., Phils., (2005) G.R. 148542 ................................................... 73

Honda Phils., Inc., vs Samahan ng Malayang Manggagawa sa Honda (2005) G.R.145561 ...................................................................................................................... 75

Jaculbe vs Siliman University (2007) G.R. 156934 ...................................................... 75

Intercontinental Broadcasting Corp., vs Amarilla (2006) G.R. 162775 ........................ 76

Reyes vs NLRC (2007) G.R. 160233 ........................................................................... 78

Philippine Airlines Inc. vs Phil. Airlines Employees Association (2008) G.R. 142399 ....79

Arco Metal Products Co. Inc., et al., vs Samahan ng mga Manggagawa sa Arco Metal NAFLU (2008) G.R. 170734 ........................................................................................ 80

Universal Sugar Milling Corp., vs Caballeda (2009) G.R. 156644 ................................ 80T/Sgt. Larkins vs NLRC (1995) G.R. 92432 ................................................................. 81

UERM Memorial Medical Center vs NLRC (1997) G.R. 1104419 .................................. 83

Philtranco Services vs NLRC (1998) G.R. 124100 ....................................................... 84

St. Martin Funeral Homes vs NLRC (1998) G.R. 130866 ............................................. 84

Ludo & Luym Corp., vs Saornido (2003) G.R. 140690 ................................................. 85

Hanjin Engineering and Construction Co. Ltd. vs Court of Appeals (2006) G.R. 165910................................................................................................................................. 86

Phil. Journalistic Inc., vs NLRC (2006) G.R. 166421 ..................................................... 87

Balagtas Multi-Purpose Coop vs Court of Appeals (2006) G.R. 159268 .......................88

St. Martin Funeral Homes vs NLRC (2006) G.R. 142351 ............................................. 88

DOLE Phils. vs Esteva (2006) G.R. 161115 ................................................................. 89

Intercontinental Broadcasting Corp., vs Panganiban (2007) G.R. 151407 ...................89



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Far East Agricultural Supply vs Lebatigue (2007) G.R. 162813 ................................... 91

Letran Calamba Faculty & Employees Association vs NLRC (2008) G.R. 156225 .... .. ..91

Metro Transit Organization vs Piglas NFWU-KMU et al., (2008) G.R. 175460 ...............91



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PASEI vs Torres (1992) G.R. 101279

Facts:

PASIE is the largest national organization of private employment and recruitmentagencies duly licensed and authorized by the POEA, to engage in the business ofobtaining overseas employment for Filipino land-based workers, including domestichelpers.

On June 1991, as a result of published stories regarding the abuses suffered by Filipinohousemaids employed in Hong Kong, DOLE Secretary Ruben Torres issued Department



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Order No. 16, Series of 1991, temporarily suspending the recruitment by privateemployment agencies of "Filipino domestic helpers going to Hong Kong". The DOLEitself, through the POEA took over the business of deploying such Hong Kong-boundworkers.

Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30,Series of 1991, providing GUIDELINES on the Government processing and deployment ofFilipino domestic helpers to Hong Kong and the accreditation of Hong Kong recruitmentagencies intending to hire Filipino domestic helpers.

Pursuant to the previous issuances, the POEA Administrator also issued MemorandumCircular No. 37, Series of 1991, on the processing of employment contracts of domesticworkers for Hong Kong.

Issues:

1. WON respondents acted with grave abuse of discretion and/or in excess of their

rule-making authority in issuing said circulars?2. WON that the assailed DOLE and POEA circulars are contrary to the Constitution,

are unreasonable, unfair and oppressive?

Held:They are in accordance but legally invalid, defective and unenforceable for lack ofpower publication and filing in the Office of the National Administrative Register asrequired in Art 2 of CC, Art 5 of the Labor Code and Sec 3(1) and 4, Chap 2, Book VII ofthe Administrative Code of 1987.

1. Article 36 of the Labor Code grants the Labor Secretary the power to restrict andregulate recruitment and placement activities. On the other hand, the scope of

the regulatory authority of the POEA, which was created by Executive Order No.797 on May 1, 1982 to take over the functions of the Overseas EmploymentDevelopment Board, the National Seamen Board, and the overseas employmentfunctions of the Bureau of Employment Services, is broad and far-ranging asprovided by Articles 15, 17 and 20 of the Labor Code.

2. The vesture of quasi-legislative and quasi-judicial powers in administrative bodiesis not unconstitutional, unreasonable and oppressive. It has been necessitated by"the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal).More and more administrative bodies are necessary to help in the regulation ofsociety's ramified activities. It is noteworthy that the assailed circulars do not

prohibit the petitioner from engaging in the recruitment and deployment ofFilipino landbased workers for overseas employment. The power to "restrict andregulate conferred by Article 36 of the Labor Code involves a grant of policepower. The questioned circulars are therefore a valid exercise of the police poweras delegated to the executive branch of Government.



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San Juan de Dios Hospital vs NLRC (1997) G.R. 126383

Facts:

Petitioners, rank-and-file employees and members of San Juan de Dios HospitalEmployees Association sent a 4 page letter requesting and pleading for the expeditiousimplementation and payment by the respondent Hospital of the 40 HOURS/5-DAYWORKWEEK with compensable weekly two (2) days off provided for by Republic Act5901 as clarified for enforcement by the Secretary of Labors Policy Instructions No. 54dated April 12, 1988. Respondent hospital failed to give a favourable response; thus,petitioners filed a complaint regarding their claims for statutory benefits under theabove-cited law and policy issuance. The Labor Arbiter dismissed the complaint whichwas also confirmed by NLRC, hence the petition under Rule 65 of the Rules of Court.

Issue: WON Policy Instructions No. 54 issued by then Labor Secretary Franklin Drilon isvalid?

Held: It is invalid.

The Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901,otherwise known as An Act Prescribing Forty Hours A Week Of Labor For Governmentand Private Hospitals Or Clinic Personnel, but reliance to this RA is misplaced since ithas long been repealed with the passage of the Labor Code. Accordingly, only Article 83of the Labor Code which appears to have substantially incorporated or reproduced thebasic provisions of Republic Act No. 5901 may support Policy Instructions No. 54 onwhich the latters validity may be gauged.

What Article 83 merely provides are: (1) the regular office hour of eight hours a day,five days per week for health personnel, and (2) where the exigencies of service requirethat health personnel work for six days or forty-eight hours then such health personnelshall be entitled to an additional compensation of at least thirty percent of their regularwage for work on the sixth day. There is nothing in the law that supports then Secretaryof Labors assertion that personnel in subject hospitals and clinics are entitled to a fullweekly wage for seven (7) days if they have completed the 40-hour/5-day workweek inany given workweek.

Further, petitioners' position is also negated by the very rules and regulationspromulgated by the Bureau of Labor Standards which implement Republic Act No. 5901.Pertinent portions of the implementing rules provided in Sections 1,7, and 15 of the saidAct.

If petitioners are entitled to two days off with pay, then there appears to be no sense atall why Section 15 of the implementing rules grants additional compensation equivalentto the regular rate plus at least twenty-five percent thereof for work performed onSunday to health personnel, or an additional straight-time pay which must beequivalent at least to the regular rate [f]or work performed in excess of forty hours aweek xxx. Policy Instructions No. 54 to our mind unduly extended the statute. TheSecretary of Labor moreover erred in invoking the spirit and intent of Republic Act No.



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5901 and Article 83 of the Labor Code for it is an elementary rule of statutoryconstruction that when the language of the law is clear and unequivocal, the law mustbe taken to mean exactly what it says.

Letran Calamba Faculty and Employees Association vs NLRC (1997) G.R.

156225

Facts:

The Letran Calamba Faculty and Employees Association (petitioner) filed a complaintagainst Colegio de San Juan de Letran, Calamba, Inc. (respondent) for collection ofvarious monetary claims due its members. The Labor Arbiter (LA) handling theconsolidated cases, denied and dismissed the respective complaints.

Issue: WON the pay of the faculty members for teaching overloads should be includedas basis in the computation of their 13th month pay?

Held: Teaching overload may not be considered part of basic salary.

Under the Rules and Regulations Implementing PD 851, the following compensations aredeemed not part of the basic salary: a) cost-of-living allowances granted pursuant to PD525 and Letter of Instruction No. 174; b) profit sharing payments; c) all allowances andmonetary benefits which are not considered or integrated as part of the regular basicsalary of the employee at the time of the promulgation of the Decree on Dec 16, 1975.

Under a later set of Supplementary Rules and Regulations Implementing PD 851 issued

by the then Labor Secretary Blas Ople, overtime pay, earnings and other remunerationsare excluded as part of the basic salary and in the computation of the 13th-month pay.

The all-embracing phrase "earnings and other remunerations" which are deemed notpart of the basic salary includes within its meaning payments for sick, vacation, ormaternity leaves, premium for works performed on rest days and special holidays, payfor regular holidays and night differentials. As such they are deemed not part of thebasic salary and shall not be considered in the computation of the 13th-month pay.

As provided for by Art 87 of the Labor Code, it is clear that overtime pay is an additionalcompensation other than and added to the regular wage or basic salary, for reason of

which such is categorically excluded from the definition of basic salary under theSupplementary Rules and Regulations Implementing PD 851.

In the same manner that payment for overtime work and work performed during specialholidays is considered as additional compensation apart and distinct from anemployee's regular wage or basic salary, an overload pay, owing to its very nature and



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definition, may not be considered as part of a teacher's regular or basic salary, becauseit is being paid for additional work performed in excess of the regular teaching load.

Asuncion vs NLRC (2001) G.R. 129329

Facts:

On Aug 1993, Asuncion was employed as an accountant/bookkeeper by the respondent(Mabini Medical Clinic). After the inspection conducted in the respondents companypremises for a violation of the lbor standards for non-coverage, on Aug 1994, privaterespondent, Medical Director Wifrido Juco issued a memorandum to petitioner chargingher with chronic absenteeism, habitual tardiness, loitering and wasting of companytime, getting salary of an absent employee without acknowledging or signing for it, anddisobedience and insubordination for continued refusal of signing memos given to her.Petitioner was then required to explain within 2 days why she will not be terminated.

Three days later, petitioner submitted her response to the memo but was also dismissedon ground of disobedience of lawful orders and failure to submit her reply in 2 days. This

prompted petitioner to file for a case of illegal termination which was judged by theLabor Arbiter to be true.

Issue: WON NLRC erred in finding that the petitioner was dismissed by the privaterespondent for a just or authorized cause?

Held: Petitioner has been illegally terminated; she is necessarily entitled toreinstatement to her former previous position without loss of seniority and the paymentof backwages.

It bears stressing that a workers employment is property in the constitutional sense.He cannot be deprived of his work without due process. In order for the dismissal to be

valid, not only must it be based on just cause supported by clear and convincingevidence, the employee must also be given an opportunity to be heard and defendhimself. It is the employer who has the burden of proving that the dismissal was with

just or authorized cause. The failure of the employer to discharge this burden meansthat the dismissal is not justified and that the employee is entitled to reinstatement andback wages.



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In the case at bar, both the handwritten listing and computer print-outs being unsigned,the authenticity thereof is highly suspect and devoid of any rational probative valueespecially in the light of the existence of the official record book of the petitionersalleged absences and tardiness in the possession of the employer company. In thememorandum charging petitioner and notice of termination, private respondents

referred to the record book as its basis for petitioners alleged absenteeism andtardiness. Interestingly, however, the record book was never presented in evidence.Private respondents had possession thereof and the opportunity to present thesame. Thus, private respondents unexplained and unjustified non-presentation of therecord book, which is the best evidence in its possession and control of the chargesagainst the petitioner, casts serious doubts on the factual basis of the charges ofabsenteeism and tardiness. Private respondents claimed that they sent several noticesto the petitioner warning her of her absences, however, petitioner refused to receive thesame. The Court, likewise, takes note of the fact that the two-day period given topetitioner to explain and answer the charges against her was most unreasonable,considering that she was charged with several offenses and infractions (35 absences, 23

half-days and 108 tardiness), some of which were allegedly committed almost a yearbefore, not to mention the fact that the charges levelled against her lacked particularity.

The law mandates that every opportunity and assistance must be accorded to theemployee by the management to enable him to prepare adequately for his defense. InRuffy v. NLRC, the Court held that what would qualify as sufficient or ampleopportunity, as required by law, would be every kind of assistance that managementmust accord to the employee to enable him to prepare adequately for his defense.



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Singer Sewing Machine vs NLRC () 193 SCRA 271

Facts:

Singer Machine Collectors Union-Baguio filed a petition for direct certification as the soleand exclusive bargaining agent of all collectors of Singer Sewing Machine. The companyopposed the petition mainly because the union members are not employees butindependent contractors as evidenced by the collection agency agreement which theysigned.

Med-Arbiter ruled that there exists an employee-employer relationship and granted thecertification election which was affirmed by Sec. Drilon. The company files the presentpetition on the determination of the relationship. The union insist that the provisions ofthe Collection Agreement belie the companys position that the union members are

independent contractors.

Issue: WON there exists an employer-employee relationship between the parties.

Held: Respondents are not employees of the company.

The present case calls for the application of the control test, which if not satisfied, wouldlead to the conclusion that no employee-employer relationship exists. If the unionmembers are not employees, no right to organize for the purpose of bargaining or as abargaining agent cannot be recognized.

The following elements are generally considered in the determination of therelationship: the selection and engagement of the employee, payment of wages, powerof dismissal and the power to control the employees conduct which is the mostimportant element.



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The nature of the relationship between a company and its collecting agents depends onthe circumstances of each particular relationship. Not all collecting agents areemployees and neither are all collecting agents independent contractors. Theagreement confirms the status of the collecting agents as independent contractor. Therequirement that collection agents utilize only receipt forms and report forms issued by

the company and that reports shall be submitted at least once a week is not necessarilyan indication of control over the means by which the job collection is to be performed.Even if report requirements are to be called control measures, any control is only withrespect to the end result of the collection since the requirements regulate the things tobe done after the performance of the collection job or the rendition of service.

The plain language of the agreement reveals that the designation as collection agentdoes not create an employment relationship and that the applicant is to be consideredat all times as an independent contractor.

The court finds that since private respondents are not employees of the company, they

are not entitled to the constitutional right to form or join a labor organization for thepurposes of collective bargaining. There is no constitutional and legal basis for theirunion to be granted their petition for direct certification.

Manila Golf & Country Club, Inc., vs IAC and Fermin Llamar (1994) G.R. 64948

Facts:

Respondents were caddies and employees of Manila Golf & Country Club who originallyfiled a petition with the Social Security Commission (SSC) for coverage and availment ofbenefits under the Social Security Act. They alleged that although the petitioners wereemployees of the Manila Golf and Country Club, a domestic corporation, the latter hadnot registered them as such with the SSS.

In the case before the SSC, the respondent Club alleged that the petitioners, caddies byoccupation, were allowed into the Club premises to render services as such to theindividual members and guests playing the Club's golf course and who themselves paidfor such services; that as such caddies, the petitioners were not subject to the directionand control of the Club as regards the manner in which they performed their work; and

hence, they were not the Club's employees.

Issue: WON there exist an employer-employee relationship between the cadies and theGolf Club?

Held: No existence of employer-employee relationship.



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In the very nature of things, caddies must submit to some supervision of their conductwhile enjoying the privilege of pursuing their occupation within the premises andgrounds of whatever club they do their work in. For all that is made to appear, theywork for the club to which they attach themselves on sufferance but, on the other hand,also without having to observe any working hours, free to leave anytime they please, to

stay away for as long they like. It is not pretended that if found remiss in the observanceof said rules, any discipline may be meted them beyond barring them from the premiseswhich, it may be supposed, the Club may do in any case even absent any breach of therules, and without violating any right to work on their part. All these considerationsclash frontally with the concept of employment.

The IAC would point to the fact that the Club suggests the rate of fees payable by theplayers to the caddies as still another indication of the latter's status as employees. Itseems to the Court, however, that the intendment of such fact is to the contrary,showing that the Club has not the measure of control over the incidents of the caddies'work and compensation that an employer would possess. Court agree that the grouprotation system so-called, is less a measure of employer control than an assurance thatthe work is fairly distributed, a caddy who is absent when his turn number is calledsimply losing his turn to serve and being assigned instead the last number for the day.

Moreover, as pointed out by petitioner which was never refuted that: has no means ofcompelling the presence of a caddy. A caddy is not required to exercise his occupationin the premises of petitioner. He may work with any other golf club or he may seekemployment a caddy or otherwise with any entity or individual without restriction bypetitioner.

Encyclopaedia Britannica (Phil) Inc., vs NLRC (1996) G.R. 87098

Facts:

Private respondent Benjamin Limjoco was a Sales Division Manager of petitionerEncyclopaedia Britannica and was in charge of selling petitioners products throughsome sales representatives. As compensation, private respondent receivedcommissions from the products sold by his agents. He was also allowed to usepetitioners name, goodwill and logo. It was, however, agreed upon that office expenseswould be deducted from private respondents commissions. Petitioner would also beinformed about appointments, promotions, and transfers of employees in privaterespondents district.



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On June 1974, Limjoco resigned from office to pursue his private business. He then fileda complaint against petitioner Encyclopaedia Britannica with DOLE, claiming for non-payment of separation pay and other benefits, and also illegal deduction from his salescommissions.

Petitioner alleged that Limjoco was not its employee but an independent dealerauthorized to promote and sell its products and in return, received commissions therefrom. Limjoco did not have any salary and his income from the company was dependenton the volume of sales accomplished. He also had his own separate office, financed thebusiness expenses, and maintained his own workforce. The salaries of his secretary,utility man, and sales representatives were chargeable to his commissions. Thus,petitioner argued that it had no control and supervision over the complainant as to themanner and means he conducted his business operations, moreover, the latter did noteven report to the office of the petitioner and did not observe fixed office hours

Issue: WON there exist an employer-employee relationship and necessarily entitlesLimjoco of his claims?

Held: Private respondent was merely an agent or an independent dealer of thepetitioner.

In ascertaining whether the relationship is that of employer-employee or one ofindependent contractor, each case must be determined by its own facts and all featuresof the relationship are to be considered.

Respondent was free to conduct his work and he was free to engage in other means oflivelihood. At the time he was connected with the petitioner company, privaterespondent was also a director and later the president of the Farmers Rural Bank. Hadhe been an employee of the company, he could not be employed elsewhere and hewould be required to devote full time for petitioner. If private respondent was indeed anemployee, it was rather unusual for him to wait for more than a year from his separationfrom work before he decided to file his claims. As he pointed out in his resignationletter, Limjoco was aware of conflict with other interests which xxx have increasinglyrequired my personal attention. At the very least, it would indicate that petitioner hasno effective control over the personal activities of Limjoco, who as admitted by thelatter had other conflict of interest requiring his personal attention.

As pointed out the element of control is absent; where a person who works for anotherdoes so more or less at his own pleasure and is not subject to definite hours orconditions of work, and in turn is compensated according to the result of his efforts and

not the amount thereof.

Carungcong vs NLRC, Sun Life Assurance Co. of Canada (1997) G.R. 118086



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Facts:

Susan Carungcong began as an agent of Sun Life in 1974, she signed an AgentsAgreement and was designated to solicit applications for insurance and annuityservices. The contract set out in detail the terms and conditions particularly thoseconcerning the commissions payable to her under which her relationship with thecompany would be governed. Five years later, said contract was superseded by 2 newagreements: first, is the "Career Agent's (or Unit Manager's) Agreement," dealt withsuch matters as the agent's commissions, his obligations, limitations on his authority,and termination of the agreement by death, or by written notice "with or withoutcause." It declared that the "Agent shall be an independent contractor and none of theterms of agreement shall be construed as creating an employer-employee relationship;second, was titled, "MANAGER'S Supplementary Agreement." Making explicit referenceto the first agreement "which became effective on the 1st day of July, 1979" saidsecond contract explicitly described as a "further agreement" contained provisionsregarding remuneration (overriding commissions in accordance with a fixed schedule),limitation of authority, and termination of the agreement inter alia by written notice"without cause."

Subsequently, Carungcong and Sun Life executed another Agreement - by which theformer was named New Business Manager with the function generally "to manage aNew Business Office established by her and to obtain applications for life insurancepolicies and other products offered by or distributed through Sun Life and to performsuch other duties in connection therewith as Sun Life may require from time to time."

This latest Agreement stressed that the "New Business Manager in performance of hisduties defined herein, shall be considered an independent contractor and not . . anemployee of Sun Life," and that "under no circumstance shall the New BusinessManager and/or his employees be considered employees of Sun Life."

After receiving reports of anomalies in relation thereto from unit managers and agentsby the companys VP, the Manager of Sun Life's Internal Audit Department, commencedan inquiry into the special fund availments of Carungcong and other New BusinessManagers which later prompted the petitioners termination. She then institutedproceedings for vindication in the Arbitration Branch of the National Labor RelationsCommission where she succeeded in obtaining a favorable judgment finding that thereexisted an employer-employee relationship between her and Sun Life; ruled that shehad been illegally dismissed, thus entitled to reinstatement without loss of seniorityrights and other benefits.

Issue: WON there existed an employer-employee relationship between Caruncong andSunlife?

Held: Carungcong was an independent contractor and not an employee of Sun Life.



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The contracts she had willingly and knowingly signed with Sun Life repeatedly andclearly provided that said agreements were terminable by either party by written noticewith or without cause.

Noteworthy is that this last agreement, it was emphasized, like the "Career Agent's (orUnit Manager's) Agreement" first signed by her, that in the performance of her dutiesdefined herein. Carungcong would be considered an independent contractor and not . .an employee of Sun Life," and that "(u)nder no circumstance shall the New BusinessManager and/or his employees be considered employees of Sun Life."

Ramos vs Court of Appeals () 380 SCRA 467

Facts:

Petitioner Erlinda Ramos was advised to undergo an operation for the removal ofher stone in the gall bladder. She was referred to Dr. Hosaka, a surgeon, who agreedto do the operation. The operation was scheduled on June 17, 1985 in the De losSantos Medical Center. Erlinda was admitted to the medical center the day beforethe operation. On the following day, she was ready for operation as early as 7:30am. Around 9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted to pullout his wife from the operating room. Dr. Hosaka finally arrived at 12:10 pm morethan 3 hours of the scheduled operation.

Dr. Guiterres tried to intubate Erlinda. The nail beds of Erlinda were bluishdiscoloration in her left hand. At 3 pm, Erlinda was being wheeled to the Intensive

care Unit and stayed there for a month. Since the ill-fated operation, Erlindaremained in comatose condition until she died.

The family of Ramos sued them for damages.

Issue: WON there was an employee-employer relationship that existed between theMedical Center and Drs. Hosaka and Guiterrez.

Held: No employer-employee between the doctors and hospital.

Private Hospitals hire, fire and exercise real control over their attending and visitingconsultant staff. While consultants are not technically employees, the controlexercised, the hiring and the right to terminate consultants fulfill the hallmarks of an

employer-employee relationship with the exception of payment of wages. Thecontrol test is determining.

In applying the four fold test, DLSMC cannot be considered an employer of therespondent doctors. It has been consistently held that in determining whether anemployer-employee relationship exists between the parties, the following elementsmust be present: (1) selection and engagement of services; (2) payment of wages;



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(3) the power to hire and fire; and (4) the power to control not only the end to beachieved, but the means to be used in reaching such an end.

The hospital does not hire consultants but it accredits and grants him the privilegeof maintaining a clinic and/or admitting patients. It is the patient who pays theconsultants. The hospital cannot dismiss the consultant but he may lose his

privileges granted by the hospital. The hospitals obligation is limited to providingthe patient with the preferred room accommodation and other things that willensure that the doctors orders are carried out.

The court finds that there is no employer-employee relationship between thedoctors and the hospital.

Sonza vs ABS-CBN (2004) G.R. 138051

Facts:

In May 1994, ABS-CBN signed an agreement with Mel & Jay Management andDevelopment Corp for a radio and television program. ABS-CBN agreed to pay forSONZAs services a monthly talent fee of P310,000 for the first year and P317,000 forthe second and third year of the Agreement. ABS-CBN would pay the talent fees on the10th and 25th days of the month.

On April 1996, Sonza wrote a letter to ABS-CBN President Eugenio Lopez III about arecent event concerning his programs and career, and that the said violation of thecompany has breached the agreement, thus, the notice of rescission of Agreement wassent.

At the end of the same month, Sonza filed a complaint against ABS-CBN before theDOLE for non-payment of salaries, separation pay, service incentive leave pay, 13thmonth pay, signing bonus, travel allowance and amounts due under the EmployeesStock Option Plan (ESOP) which was opposed by ABS-CBN on the ground there was noemployer-employee relationship existed between the parties.

Issue: WON Sonza was an employee or independent contractor?

Held: There was no employer-employee relationship that existed, but that of anindependent contractor.

Case law has consistently held that the elements of an employer-employee relationshipare:



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(a) The selection and engagement of the employee - ABS-CBN engaged SONZAsservices to co-host its television and radio programs because of SONZAs peculiarskills, talent and celebrity status. 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, but not conclusive, of an

independent contractual relationship.(b) The payment of wages - ABS-CBN directly paid SONZA his monthly talent fees

with no part of his fees going to MJMDC. All the talent fees and benefits paid toSONZA were the result of negotiations that led to the Agreement. If SONZA wereABS-CBNs employee, there would be no need for the parties to stipulate onbenefits such as "SSS, Medicare, x x x and 13th month pay" which the lawautomatically incorporates into every employer-employee contract.

(c) The power of dismissal - For violation of any provision of the Agreement, eitherparty may terminate their relationship. During the life of the Agreement, ABS-CBNagreed to pay SONZAs talent fees as long as "AGENT and Jay Sonza shall faithfully

and completely perform each condition of this Agreement." Even if it sufferedsevere business losses, ABS-CBN could not retrench SONZA because ABS-CBNremained obligated to pay SONZAs talent fees during the life of the Agreement.

(d) The employers power to control the employee on the means and methodsby which the work is accomplished - The control test is the most importanttest. This test is based on the extent of control the hirer exercises over a worker.

The greater the supervision and control the hirer exercises, the more likely theworker is deemed an employee. The converse holds true as well the less controlthe hirer exercises, the more likely the worker is considered an independentcontractor.

First, ABS-CBN engaged SONZAs services specifically to co-host the "Mel & Jay"programs. 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, appearedon television, and sounded on radio were outside ABS-CBNs control. SONZA did nothave to render eight hours of work per day. The Agreement required SONZA toattend only rehearsals and tapings of the shows, as well as pre- and post-productionstaff meetings. ABS-CBN could not dictate the contents of SONZAs script. However,the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or itsinterests. The clear implication is that SONZA had a free hand on what to say ordiscuss in his shows provided he did not attack ABS-CBN or its interests.

Second, The Agreement stipulates that SONZA shall abide with the rules andstandards of performance "covering talents" of ABS-CBN. The Agreement doesnot require SONZA to comply with the rules and standards of performanceprescribed for employees of ABS-CBN. The code of conduct imposed on SONZAunder the Agreement refers to the "Television and Radio Code of the Kapisanan ngmga Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY (ABS-



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CBN) as its Code of Ethics." The KBP code applies to broadcasters, not to employeesof radio and television stations. Broadcasters are not necessarily employees of radioand television stations. Clearly, the rules and standards of performance referred toin the Agreement are those applicable to talents and not to employees of ABS-CBN.

Lastly, being an exclusive talent does not by itself mean that SONZA is an employeeof ABS-CBN. Even an independent contractor can validly provide his servicesexclusively to the hiring party. In the broadcast industry, exclusivity is notnecessarily the same as control. The hiring of exclusive talents is a widespread andaccepted practice in the entertainment industry. This practice is not designed tocontrol the means and methods of work of the talent, but simply to protect theinvestment of the broadcast station. The broadcast station normally spendssubstantial amounts of money, time and effort "in building up its talents as well asthe programs they appear in and thus expects that said talents remain exclusivewith the station for a commensurate period of time." Normally, a much higher fee ispaid to talents who agree to work exclusively for a particular radio or televisionstation. In short, the huge talent fees partially compensates for exclusivity.

Lazaro vs Social Security Commission (2004) G.R. 138254

Facts:

Rosalina Laudato filed a petition before the SSC for social security coverage andremittance of unpaid monthly social security contributions against her three (3)employers. Among them was Angelito Lazaro, proprietor of Royal Star, which is engaged



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in the business of selling home appliances. Laudato alleged that despite heremployment as sales supervisor of the sales agents for Royal Star from April of 1979 toMarch of 1986, Lazaro had failed during the said period, to report her to the SSC forcompulsory coverage or remit Laudatos social security contributions.

Lazaro denied that Laudato was a sales supervisor of Royal Star, averring instead thatshe was a mere sales agent whom he paid purely on commission basis. Lazaroalso maintained that Laudato was not subjected to definite hours and conditions ofwork. As such, she could not be deemed an employee of Royal Star.

Issue: WON Laudato is considered employee of Royal Star Marketing?

Held: Laudato is an employee of Royal Star and as such is entitled to the coverage ofSocial Security Law.

It is an accepted doctrine that for the purposes of coverage under the Social SecurityAct, the determination of employer-employee relationship warrants the application of

the control test, that is, whether the employer controls or has reserved the right tocontrol the employee, not only as to the result of the work done, but also as to themeans and methods by which the same is accomplished.

The fact that Laudato was paid by way of commission does not preclude theestablishment of an employer-employee relationship. In Grepalife v. Judico, the Courtupheld the existence of an employer-employee relationship between the insurancecompany and its agents, despite the fact that the compensation that the agents oncommission received was not paid by the company but by the investor or the personinsured. The relevant factor remains, as stated earlier, whether the "employer" controlsor has reserved the right to control the "employee" not only as to the result of the workto be done but also as to the means and methods by which the same is to beaccomplished. It should also be emphasized that the SSC, also as upheld by the Courtof Appeals, found that Laudato was a sales supervisor and not a mere agent. As such,Laudato oversaw and supervised the sales agents of the company, and thus was subjectto the control of management as to how she implements its policies and its end results.

The finding of the SSC that Laudato was anemployee of Royal Star is supported by substantial evidence. The SSC examined thecash vouchers issued by Royal Star to Laudato, calling cards of Royal Star denominatingLaudato as a Sales Supervisor of the company, and Certificates of Appreciation issuedby Royal Star to Laudato in recognition of her unselfish and loyal efforts in promotingthe company.

A piece of documentary evidence appreciated by the SSC is Memorandum dated 3 May1980 of Teresita Lazaro, General Manager of Royal Star, directing that no commissionswere to be given on all main office sales from walk-in customers and enjoiningsalesmen and sales supervisors to observe this new policy. The Memorandum evincesthe fact that Royal Star exercised control over its sales supervisors or agents such asLaudato as to the means and methods through which these personnel performed theirwork.



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ABS-CBN vs Nazareno (2006) G.R. 164156

Facts:

ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, and Lerasan asproduction assistants (PAs) on different dates. They were assigned at the news andpublic affairs, for various radio programs in the Cebu Broadcasting Station, with amonthly compensation of P4,000. They were issued ABS-CBN employees identificationcards and were required to work for a minimum of eight hours a day, including Sundaysand holidays. They were made to: a) Prepare, arrange airing of commercialbroadcasting based on the daily operations log and digicart of respondent ABS-CBN; b)Coordinate, arrange personalities for air interviews; c) Coordinate, prepare schedule ofreporters for scheduled news reporting and lead-in or incoming reports; d) Facilitate,

prepare and arrange airtime schedule for public service announcement and complaints;e) Assist, anchor program interview, etc; and f) Record, log clerical reports, man basedcontrol radio.

Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective BargainingAgreement (CBA) to be effective during the period from Dec 11, 1996 to Dec 11, 1999.However, since petitioner refused to recognize PAs as part of the bargaining unit,respondents were not included to the CBA.

Due to a memorandum assigning PAs to non-drama programs, and that the DYAB studiooperations would be handled by the studio technician. There was a revision of theschedule and assignments and that respondent Gerzon was assigned as the full-time PAof the TV News Department reporting directly to Leo Lastimosa.

On Oct 12, 2000, respondents filed a Complaint for Recognition of Regular EmploymentStatus, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service IncentivePay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before theNLRC.

Issue: WON the respondents are regular employees?

Held: Respondents are considered regular employees of ABS-CBN and are entitled tothe benefits granted to all regular employees.

Where a person has rendered at least one year of service, regardless of the nature of

the activity performed, or where the work is continuous or intermittent, the employmentis considered regular as long as the activity exists. The reason being that a customaryappointment is not indispensable before one may be formally declared as havingattained regular status. Article 280 of the Labor Code provides:

REGULAR AND CASUAL EMPLOYMENT.The provisions of written agreement to thecontrary notwithstanding and regardless of the oral agreement of the parties, anemployment shall be deemed to be regular where the employee has been engaged toperform activities which are usually necessary or desirable in the usual business or



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trade of the employer except where the employment has been fixed for a specificproject or undertaking the completion or termination of which has been determined atthe time of the engagement of the employee or where the work or services to beperformed is seasonal in nature and the employment is for the duration of the season.

Any employee who has rendered at least one year of service, whether continuous or

intermittent, is deemed regular with respect to the activity performed and while suchactivity actually exists. The fact that respondents received pre-agreed talent feesinstead of salaries, that they did not observe the required office hours, and that theywere permitted to join other productions during their free time are not conclusive of thenature of their employment. They are regular employees who perform several differentduties under the control and direction of ABS-CBN executives and supervisors.

There are two kinds of regular employees under the law: (1) those engaged toperform activities which are necessary or desirable in the usual business or trade ofthe employer; and (2) those casual employees who have rendered at least one yearof service, whether continuous or broken, with respect to the activities in which theyare employed.

What determines whether a certain employment is regular or otherwise is the characterof the activities performed in relation to the particular trade or business taking intoaccount all the circumstances, and in some cases the length of time of its performanceand its continued existence.

The employer-employee relationship between petitioner and respondents has beenproven by the ff:

First. In the selection and engagement of respondents, no peculiar or unique skill,talent or celebrity status was required from them because they were merelyhired through petitioners personnel department just like any ordinary employee.

Second. The so-called talent fees of respondents correspond to wages given asa result of an employer-employee relationship. Respondents did not have thepower to bargain for huge talent fees, a circumstance negating independentcontractual relationship.Third. Petitioner could always discharge respondents should it find their workunsatisfactory, and respondents are highly dependent on the petitioner forcontinued work.Fourth. The degree of control and supervision exercised by petitioner overrespondents through its supervisors negates the allegation that respondents areindependent contractors.

The presumption is that when the work done is an integral part of the regularbusiness of the employer and when the worker, relative to the employer, doesnot furnish an independent business or professional service, such work is aregular employment of such employee and not an independent contractor.



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Francisco vs NLRC (2006) 500 SCRA 690

Facts:

Petitoner was hired by Kasei Corporation during the incorporation stage. She wasdesignated as accountant and corporate secretary and was assigned to handle all theaccounting needs of the company. She was also designated as Liason Officer to the Cityof Manila to secure permits for the operation of the company.

In 1996, Petitioner was designated as Acting Manager. She was assigned to handlerecruitment of all employees and perform management administration functions. In

2001, she was replaced by Liza Fuentes as Manager. Kasei Corporation reduced hersalary to P2,500 per month which was until September. She asked for her salary but wasinformed that she was no longer connected to the company. She did not anymorereport to work since she was not paid for her salary. She filed an action for constructivedismissal with the Labor Arbiter.

The Labor Arbiter found that the petitioner was illegally dismissed. NLRC affirmed thedecision while CA reversed it.

Issue: WON there was an employer-employee relationship.

Held: Petitioner is an employee of Kasei Corporation.

The court held that in this jurisdiction, there has been no uniform test to determine theexistence of an employer-employee relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are performedreserves a right to control not only the end to be achieved but also the means to beused in reaching such end. In addition to the standard of right-of-control, the existingeconomic conditions prevailing between the parties, like the inclusion of the employee



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in the payrolls, can help in determining the existence of an employer-employeerelationship.

The better approach would therefore be to adopt a two-tiered test involving: (1) theputative employers power to control the employee with respect to the means andmethods by which the work is to be accomplished; and (2) the underlying economicrealities of the activity or relationship.

In Sevilla v. Court of Appeals, the court observed the need to consider the existingeconomic conditions prevailing between the parties, in addition to the standard of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture indetermining the existence of an employer-employee relationship based on an analysisof the totality of economic circumstances of the worker.

Thus, the determination of the relationship between employer and employee depends

upon the circumstances of the whole economic activity, such as: (1) the extent to whichthe services performed are an integral part of the employers business; (2) the extent ofthe workers investment in equipment and facilities; (3) the nature and degree of controlexercised by the employer; (4) the workers opportunity for profit and loss; (5) theamount of initiative, skill, judgment or foresight required for the success of the claimedindependent enterprise; (6) the permanency and duration of the relationship betweenthe worker and the employer; and (7) the degree of dependency of the worker upon theemployer for his continued employment in that line of business. The proper standard ofeconomic dependence is whether the worker is dependent on the alleged employer forhis continued employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of KaseiCorporation because she was under the direct control and supervision of Seiji Kamura,the corporations Technical Consultant. It is therefore apparent that petitioner iseconomically dependent on respondent corporation for her continued employment inthe latters line of business.

There can be no other conclusion that petitioner is an employee of respondent KaseiCorporation. She was selected and engaged by the company for compensation, and iseconomically dependent upon respondent for her continued employment in that line ofbusiness. Her main job function involved accounting and tax services rendered toRespondent Corporation on a regular basis over an indefinite period of engagement.Respondent Corporation hired and engaged petitioner for compensation, with the power

to dismiss her for cause. More importantly, Respondent Corporation had the power tocontrol petitioner with the means and methods by which the work is to beaccomplished.



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Nogales et al., vs Capitol Medical Center (2006) G.R. 142625

Facts:Corazon was under the exclusive care of Dr Oscar Estrada beginning the fourth monthof her pregnancy. While on her last trimester of pregnancy, Dr Estrada noted anincrease of her blood pressure and development of leg edema indicating preeclampsiawhich is a dangerous complication of pregnancy.Around midnight of 25 May 1976, Corazon started to experience mild labor painsprompting Spouses Nogales to see Dr. Estrada at his home. After examining Corazon, Dr.Estrada advised her immediate admission to the Capitol Medical Center. Eventually,Corazon died after giving birth to the child, which prompted the petitioners to file acomplaint for damages against CMC, Dr. Estrada and other physicians and a certainnurse for Corazons death. Petitioners mainly contended that defendant physicians andCMC personnel were negligent in the treatment and management of Corazon's



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"For a hospital to be liable under the doctrine of apparent authority, a plaintiff mustshow that: (1) the hospital, or its agent, acted in a manner that would lead areasonable person to conclude that the individual who was alleged to be negligent wasan employee or agent of the hospital; (2) where the acts of the agent create theappearance of authority, the plaintiff must also prove that the hospital had knowledgeof and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct ofthe hospital or its agent, consistent with ordinary care and prudence."

The element of "holding out" on the part of the hospital does not require anexpress representation by the hospital that the person alleged to be negligent isan employee. Rather, the element is satisfied if the hospital holds itself out as aprovider of emergency room care without informing the patient that the care isprovided by independent contractors.

The doctrine of apparent authority essentially involves two factors to determine theliability of an independent-contractor physician.

The first factor focuses on the hospital's manifestations and is sometimesdescribed as an inquiry whether the hospital acted in a manner which would lead areasonable person to conclude that the individual who was alleged to be negligent wasan employee or agent of the hospital. In this regard, the hospital need not makeexpress representations to the patient that the treating physician is an

employee of the hospital; rather a representation may be general and implied.

In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff.Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leadingthe Spouses Nogales to believe that Dr. Estrada was an employee or agent of CMC. CMCcannot now repudiate such authority.

The second factor focuses on the patient's reliance. It is sometimes characterizedas an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospitalor its agent, consistent with ordinary care and prudence.

The records show that the Spouses Nogales relied upon a perceived employmentrelationship with CMC in accepting Dr. Estrada's services. Rogelio testified that he andhis wife specifically chose Dr. Estrada to handle Corazon's delivery not only because oftheir friend's recommendation, but more importantly because of Dr. Estrada's"connection with a reputable hospital, the [CMC]." In other words, Dr. Estrada'srelationship with CMC played a significant role in the Spouses Nogales' decision inaccepting Dr. Estrada's services as the obstetrician-gynecologist for Corazon's delivery.Moreover, as earlier stated, there is no showing that before and during Corazon'sconfinement at CMC, the Spouses Nogales knew or should have known that Dr. Estrada

was not an employee of CMC.

Even simple negligence is not subject to blanket release in favor of establishments likehospitals but may only mitigate liability depending on the circumstances. When aperson needing urgent medical attention rushes to a hospital, he cannot bargain onequal footing with the hospital on the terms of admission and operation. Such a personis literally at the mercy of the hospital. There can be no clearer example of a contract of



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adhesion than one arising from such a dire situation. Thus, the release forms of CMCcannot relieve CMC from liability for the negligent medical treatment of Corazon.

Coca-Cola Bottlers Phils., vs Dr. Climaco (2007) G.R. 146881

Facts:Dr. Dean Climaco is a medical doctor who was hired by petitioner Coca-Cola BottlersPhils., Inc. by virtue of a Retainer Agreement for a period of 1 year with a monthly salaryof Three Thousand Eight Hundred (P3,800.00).

The Retainer Agreement, which began on January 1, 1988, was renewed annually. Thelast one expired on December 31, 1993. Despite the non-renewal of the RetainerAgreement, respondent continued to perform his functions as company doctor to Coca-Cola until he received a letter from petitioner company concluding their retainershipagreement effective 30 days from receipt thereof.

Petitioner was already making inquiries regarding his status with the company. First, hewrote a letter addressed to Dr. Willie Sy, the Acting President and Chairperson of theCommittee on Membership, Philippine College of Occupational Medicine. In response,Dr. Sy wrote a letter to the Personnel Officer of Coca-Cola Bottlers Phils., Bacolod City,stating that respondent should be considered as a regular part-time physician, havingserved the company continuously for four (4) years. He likewise stated that respondentmust receive all the benefits and privileges of an employee under Article 157 (b) of theLabor Code.

Issue: WON there exists an employer-employee relationship between Coca-Cola and Dr.Climaco?

Held: No employer-employee relationship exists between the parties.

The Court, in determining the existence of an employer-employee relationship, hasinvariably adhered to the four-fold test: (1) the selection and engagement of theemployee; (2) the payment of wages; (3) the power of dismissal; and (4)the power tocontrol the employees conduct, or the so-called "control test," considered tobe the most important element.

The Labor Arbiter and the NLRC correctly found that Coca-Cola lacked the power ofcontrol over the performance by respondent of his duties. The Labor Arbiter reasonedthat the Comprehensive Medical Plan, which contains the respondents objectives,duties and obligations, does not tell respondent "how to conduct his physicalexamination, how to immunize, or how to diagnose and treat his patients, employees of

Coca-Cola, in each case."The Comprehensive Medical Plan, provided guidelines merely to ensure that the endresult was achieved, but did not control the means and methods by which respondentperformed his assigned tasks. It is precisely because the company lacks the power ofcontrol that the contract provides that respondent shall be directly responsible to theemployee concerned and their dependents for any injury, harm or damage causedthrough professional negligence, incompetence or other valid causes of action.



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Complainant does not dispute the fact that outside of the two (2) hours that he isrequired to be at respondent companys premises, he is not at all further required to justsit around in the premises and wait for an emergency to occur so as to enable him fromusing such hours for his own benefit and advantage. In fact, complainant maintains hisown private clinic attending to his private practice in the city, where he services hispatients, bills them accordingly -- and if it is an employee of respondent company who is

attended to by him for special treatment that needs hospitalization or operation, this issubject to a special billing. More often than not, an employee is required to stay in theemployers workplace or proximately close thereto that he cannot utilize his timeeffectively and gainfully for his own purpose.

Calamba Medical Center vs NLRC (2008) G.R. 176484

Facts:

Calamba Medical Center, engaged the services of medical doctors-spouses Dr.Ronaldo and Dr. Merceditha Lanzanas as part of its team of resident physicians.Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were

paid a monthly "retainer" of P4,800.00 each. Also resident physicians were also given apercentage share out of fees charged for out-patient treatments, operating roomassistance and discharge billings, in addition to their fixed monthly retainer.

The work schedules of the members of the team of resident physicians were fixed bypetitioner's medical director Dr. Desipeda, and they were issued ID, enrolled in the SSSand withheld tax from them.

After an incident where Dr. Trinidad overheard a phone conversation between Dr.Ronaldo and a fellow employee Diosdado Miscala, the former was given a preventivesuspension and his wife Dr. Merceditha was not given any schedule after sending theMemorandum. On March 1998, Dr. Ronaldo filed a complaint for illegal suspension andDr. Merceditha for illegal dismissal.

Issue: WON there exists an employer-employee relationship between petitioner and thespouses-respondents?

Held: Drs. Lanzanasare declared employee by the petitioner hospital.

Under the "control test," an employment relationship exists between a physician anda hospital if the hospital controls both the means and the details of the process bywhich the physician is to accomplish his task.

That petitioner exercised control over respondents gains light from the undisputed factthat in the emergency room, the operating room, or any department or ward for thatmatter, respondents' work is monitored through its nursing supervisors, charge nursesand orderlies. Without the approval or consent of petitioner or its medical director, nooperations can be undertaken in those areas. For control test to apply, it is not essentialfor the employer to actually supervise the performance of duties of the employee, itbeing enough that it has the right to wield the power.



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With respect to respondents' sharing in some hospital fees, this scheme does not severthe employment tie between them and petitioner as this merely mirrors additional formor another form of compensation or incentive similar to what commission-basedemployees receive as contemplated in Article 97 (f) of the Labor Code.

Moreover, respondents were made subject to petitioner-hospital's Code of Ethics, theprovisions of which cover administrative and disciplinary measures on negligence ofduties, personnel conduct and behavior, and offenses against persons, property and thehospital's interest.

More importantly, petitioner itself provided incontrovertible proof of the employmentstatus of respondents, namely, the identification cards it issued them, the payslips andBIR W-2 (now 2316) Forms which reflect their status as employees, and theclassification as "salary" of their remuneration. Moreover, it enrolled respondents in theSSS and Medicare (Philhealth) program. It bears noting at this juncture that mandatorycoverage under the SSS Law is premised on the existence of an employer-employeerelationship, except in cases of compulsory coverage of the self-employed.



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Ollendorff vs Abrahamson (1918) G.R. 13228Facts:

An agreement was entered into by Ollendorff and Abrahamson whereby theformeragreed to employ Abrahamson and the latter bound himself to work for him for a periodof 2yrs with a salary of P50 per week. Included in the agreement is a prohibition ofAbrahamson from engaging in a similar or competitive business to anywhere within thePhilippine Islands for a period of five years. The duties performed by the defendant were



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such to make it necessary for him to be generally knowledgeable of Ollendorffsbusiness, moreover, he had been engaged in similar work for several years even beforehis employment of the plaintiffs embroidery business.After some months from his departure for the US, Abrahamson returned to Manila and isnow a manager of the Philippine Underwear Co. This corporation, unlike Ollendorffs,does not maintain a factory in Phil. Islands but send material and embroidery designs

from New York to its local representative here who employs Filipino needle workers toembroider the designs and make up the garments in their homes. The only differencebetween plaintiff's business and that of the firm by which the defendant is employed, isthe method of doing the finishing work -- the manufacture of the embroidered materialinto finished garments. Plaintiff commenced an action to prevent by injunction, anyfurther breach of that part of defendant's contract of employment by which he agreedthat he would not "enter into or engage himself directly or indirectly . . . in a similar orcompetitive business to that of (plaintiff) anywhere within the Philippine Islands for aperiod of five years . . ." from the date of the agreement.Issue: WON the part of the agreement restraining the defendant from engaging intosimilar business of the plaintiff is void?

Held:The contract was not void as constituting an unreasonable restraint of trade.The rule in this jurisdiction is that the obligations created by contracts have the force of

law between the contracting parties and must be enforce in accordance with their tenor.(Civil Code, art 1091.) The only limitation upon the freedom of contractual agreement isthat the pacts established shall not be contrary to "law, morals or public order." (CivilCode, Art. 1255.)

Following the rule in Mitchel vs. Reynolds, Court adopt the modern rule that the validityof restraints upon trade or employment is to be determined by the intrinsincreasonableness of restriction in each case, rather than by any fixed rule, and that suchrestrictions may be upheld when not contrary to afford a fair and reasonable protectionto the party in whose favor it is imposed.

Examining the contract here in question from this stand point, it does not seem so withrespect to an employee whose duties are such as of necessity to give him an insightinto the general scope and details of his employers business. A business enterprise mayand often does depend for its success upon the owner's relations with other dealers, hisskill in establishing favorable connections, his methods of buying and selling -- amultitude of details, none vital if considered alone, but which in the aggregateconstitute the sum total of the advantages which the result of the experience orindividual aptitude and ability of the man or men by whom the business has been builtup. Failure or success may depend upon the possession of these intangible but allimportant assets, and it is natural that their possessor should seek to keep them fromfalling into the hands of his competitors. It is with this object in view that such

restrictions as that now under consideration are written into contracts of employment.Their purpose is the protection of the employer, and if they do not go beyond what isreasonably necessary to effectuate this purpose they should be upheld.

Del Castillo vs Richmond (1924) G.R. L-21127



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Facts:

Shannon Richmond and Alfonso del Castillo entered into a Contract of RenderingServices, whereby del Castillo agrees to enter the employ of Richmond as a pharmacistwith a monthly remuneration of P125 each month.

Paragraph 3 of the said contract read as follows:3. That in consideration of the fact that the said Alfonso del Castillo has just graduated asa pharmacist and up to the present time has not been employed in the capacity of apharmacist and in consideration of this employment and the monthly salary mentionedin this contract, the said Alfonso del Castillo also agrees not to open, nor own nor haveany interest directly or indirectly in any other drugstore either in his own name or inthe name of another; nor have any connection with or be employed by any otherdrugstore situated within a radius of our miles from the district of Legaspi, municipalityand Province of Albay, while the said Shannon Richmond or his heirs may own or haveopen a drugstore, or have an interest in any other one within the limits of the districtsof Legaspi, Albay, and Daraga of the municipality of Albay, Province of Albay.

The plaintiff alleges that the provisions and conditions contained in the third paragraphof said contract constitute an illegal and unreasonable restriction upon his liberty to

contract, are contrary to public policy, and are unnecessary in order to constitute a justand reasonable protection to the defendant; and asked that the same be declared nulland void and of no effect.

Issue: WON the provisions and conditions contained in the 3rd paragraph of saidcontract constitute an illegal and unreasonable restriction upon plaintiffs liberty tocontract?

Held: The contract the annulment of which is sought by the plaintiff is neitheroppressive to him, nor unreasonably necessary to protect the defendant's business, norprejudicial to the public interest.

The law concerning contracts which tend to restrain business or trade has gone througha long series of changes from time to time with the changing conditions of trade andcommerce. With trifling exceptions, said changes have been a continuous developmentof a general rule. Later, the rule became well established that if the restraint waslimited to "a certain time" and within "a certain place," such contracts were valid andnot "against the benefit of the state." Later cases, and we think the rule is now wellestablished, have held that a contract in restraint of trade is valid providing there is alimitation upon either time or place. A contract, however, which restrains a man fromentering into a business or trade without either a limitation as to time or place, will beheld invalid.

If the contract is reasonably necessary to protect the interest of the parties, it will beupheld. (Ollendorff vs. Abrahamson, 38 Phil., 585.)

In that case we held that a contract by which an employee agrees to refrain for a givenlength of time, after the expiration of the term of his employment, from engaging in abusiness, competitive with that of his employer, is not void as being in restraint of tradeif the restraint imposed is not greater than that which is necessary to afford areasonable protection. In all cases like the present, the question is whether, under theparticular circumstances of the case and the nature of the particular contract involvedin it, the contract is, or is not, unreasonable



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Philippine Telegraph & Telephone Co vs NLRC (1997) G.R. 118978

Facts:

Seeking relief through the extraordinary writ ofcertiorari, petitioner Philippine Telegraphand Telephone Company (hereafter, PT&T) invokes the alleged concealment of civilstatus and defalcation of company funds as grounds to terminate the services of anemployee. That employee, herein private respondent Grace de Guzman, contrarilyargues that what really motivated PT&T to terminate her services was her havingcontracted marriage during her employment, which is prohibited by petitioner in itscompany policies. She thus claims that she was discriminated against in gross violationof law, such a proscription by an employer being outlawed by Article 136 of the LaborCode.

Issue: WON the policy of not accepting or considering as disqualified from work anywoman worker who contracts marriage is valid?

Held: Petitioners policy of not accepting or considering as disqualified from work anywoman worker who contracts marriage runs afoul of the test of, and the right against,

discrimination, afforded all women workers by our labor laws and by no less than theConstitution.

The Constitution, cognizant of the disparity in rights between men and women in almostall phases of social and political life, provides a gamut of protective provisions.Acknowledged as paramount in the due process scheme is the constitutional guaranteeof protection to labor and security of tenure. Thus, an employer is required, as acondition sine qua non prior to severance of the employment ties of an individual underhis employ, to convincingly establish, through substantial evidence, the existence of avalid and just cause in dispensing with the services of such employee, ones labor beingregarded as constitutionally protected property. The government, to repeat, abhors anystipulation or policy in the nature of that adopted by petitioner PT&T. The Labor Code

states, in no uncertain terms, as follows:ART. 136. Stipulation against marriage. - It shall be unlawful for an employer torequire as a condition of employment or continuation of employment that a womanshall not get married, or to stipulate expressly or tacitly that upon getting married, awoman employee shall be deemed resigned or separated, or to actually dismiss,discharge, discriminate or otherwise prejudice a woman employee merely by reason ofmarriage.

In the case at bar, it can easily be seen from the memorandum sent to privaterespondent by the branch supervisor of the company, with the reminder, that yourefully aware that the company is not accepting married women employee (sic), as it was

verbally instructed to you. Again, in the termination notice sent to her by the samebranch supervisor, private respondent was made to understand that her severance fromthe service was not only by reason of her concealment of her married status but, overand on top of that, was her violation of the companys policy against marriage (andeven told you that married women employees are not applicable [sic] or accepted in ourcompany.



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Petitioners policy is not only in derogation of the provisions of Article 136 of the LaborCode on the right of a woman to be free from any kind of stipulation against marriage inconnection with her employment, but it likewise assaults good morals and public policy,tending as it does to deprive a woman of the freedom to choose her status, a privilegethat by all accounts inheres in the individual as an intangible and inalienable

right. Hence, while it is true that the parties to a contract may establish anyagreements, terms, and conditions that they may deem convenient, the same shouldnot be contrary to law, morals, good customs, public order, or public policy. Carried toits logical consequences, it may even be said that petitioners policy against legitimatemarital bonds would encourage illicit or common-law relations and subvert thesacrament of marriage.

Duncan Asso. Of Detailman-PTGWO vs Glaxo Wellcome Phils., (2004) G.R.

162994

Facts:

Petitioner Pedro Tecson was hired by respondent Glaxo as medical representative, afterTecson had undergone training and orientation. Thereafter, Tecson signed a contract ofemployment which stipulates, among others, that he agrees to study and abide byexisting 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. The Employee Code of Conduct of Glaxosimilarly provides that an employee is expected to inform management of any existingor future relationship by consanguinity or affinity with co-employees or employees of

competing drug companies.

Tecson was initially assigned to market Glaxos products in the Camarines Sur-Camarines Norte sales area. Subsequently, Tecson entered into a romantic relationshipwith Bettsy, an employee of Astra, a competitor of Glaxo. She was Astras BranchCoordinator in Albay and supervised the district managers and medical representativesof her company and prepared marketing strategies for Astra in that area. The twomarried even with the several reminders given by the District Manager to Tecson. In

January 1999, Tecsons superiors informed him that his marriage to Bettsy gave rise to aconflict of interest. Tecsons superiors reminded him that he and Bettsy

Documents

36575265 Labor Case Digests