labor law

Reso: Tongko vs Manulife (GR No. 167622 January 25, 2011)

Tongko vs Manufacturer’s Life Insurance Co.
GR No. 167622 January 25, 2011

Issue: Whether or not petitioner as insurance agent is an employee of respondent company.

Held: No. Based on the evidence on record, the petitioner’s occupation was to sell Manulife’s insurance policies and products from 1977 until the termination of the career agent’s agreement. The evidence also shows that through the years, Manulife permitted him to exercise guiding authority over other agents who operate under their own agency agreements with Manulife and whose commissions he shared. Under this scheme — an agreement that pervades the insurance industry — petitioner in effect became a “lead agent” and his own commissions increased as they included his share in the commissions of the other agents; he also receive greater reimbursement for expenses and was allowed to use Manulife’s facilities. His designation also changed from unit manager to branch manager and then to regional sales manager, to reflect the increase in the number of agents he recruited and guided, as well as the increase in the area where these agents operated.

In our June 29, 2010 resolution, we noted that there are built in elements of control specific to an insurance agency, which do not amount to the elements of control that characterizes an employment relationship governed by the labor code. The insurance code provides definite parameters in the way an agent negotiates for the sale of the company’s insurance products, his collection activities and his delivery of the insurance contract or policy. In addition, the civil code defines an agent as a person who binds himself to do something in behalf of another, with the consent or authority of the latter. Article 1887 of the civil code also provides that in the execution of the agency, the agent shall act in accordance with the instructions of the principal.


Dumpit-Murillo vs CA (GR No. 164652 June 8, 2007)

Dumpit-Murillo vs Court of Appeals
GR No. 164652 June 8, 2007

Facts: On October 2, 1995, under talent contract no. NT95-1805, private respondent Associated Broadcasting Company (ABC) hired petitioner Thelma Dumpit-Murillo as a newscaster and co-anchor of Balitang-Balita, an early evening news program. The contract was for a period of 3 months. It renewed under talent contract nos. NT95-1915, NT96-3002, NT98-4984, and NT99-5649. In addition, petitioner’s services were engaged for the program “Live on Five.” On September 30, 1999, after 4 years of repeated renewals, petitioner’s talent contract expired. Two weeks after the expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice President for news and public affairs of ABC, informing the latter that she was still interested in renewing her contract subject to a salary increase, thereafter, petitioner stopped reporting for work. On November 5, 1999 she wrote Mr. Javier another letter.

Issue: Whether or not the continuous renewal of petitioner’s talent contracts constitute regularity in the employment status.

Held: Yes. An employer-employee relationship was created when the private respondents started to merely renew the contracts repeatedly 15 times for 4 consecutive years.

Petitioner was a regular employee under contemplation of law. The practice of having fixed-term contracts in the industry does not automatically make all talent contracts valid and compliant with labor law. The assertion that a talent contract exists does not necessarily prevent a regular employment status.

The elements to determine the existence of an employment relationship are: a.) The selection and engagement of the employee; b.) The payment of wages; c.) The power of dismissal; and d.) 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 it.

The duties of petitioner as enumerated in her employment contract indicate that ABC had control over the work or petitioner. Aside from control, ABC also dictated the work assignments and payment of petitioner’s wages. ABC also had power to dismiss her. All these being present, clearly there existed an employment relationship between petitioner and ABC. 

Concerning regular employment, the law provides for 2 kinds of employees, namely: 1.) Those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and 2.) Those who have rendered at least one year of service, whether continuous or broken with respect to the activity in which they are employed. In other words, regular status arises from either the nature of work of the employee or the duration of his employment.

The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee vis-a-vis the usual trade or business of the employer. This connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. If the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. 

Insular Life vs NLRC (GR No. 119930 March 12, 1998)

Insular Life Assurance Co. Ltd. vs National Labor Relations Commission (Delos Reyes)
GR No. 119930 March 12, 1998

Facts: On August 21, 1992 petitioner entered into an agency contract with respondent Pantaleon Delos Reyes authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which he would be paid compensation in the form of commitment. The contract was prepared by petitioner in its entirety and Delos Reyes merely signed his confirmity thereto. It contained the stipulation that no employer-employee relationship shall be created between the parties and that the agent shall be free to exercise his own judgement as to time, place and means of soliciting insurance. Delos Reyes however was prohibited by petitioner from working for any other life insurance company, and violation of this stipulation was sufficient ground for termination of the contract. Aside from soliciting insurance for the petitioner, private respondent was required to submit to the former all completed applications for insurance within 90 consecutive days, deliver policies, receive and collect initial premiums and balances of first year premiums, renewal premiums, deposits on applications and payments on policy loans. Private respondent was also bound to turn over to the company immediately any and all sums of money collected by him. In a written communication by petitioner to respondent Delos Reyes, the latter was urged to register with the Social Security System (SSS) as a self-employed individual as provided under PD 1636. On March 1, 1993, petitioner and private respondent entered into another contract where the latter was appointed as acting, unit manager under its office — the Cebu DSO vs Private respondent concurrently as agent and acting unit manager until he was notified by petitioner on November 18, 1993 that his services were terminated effective December 18, 1993. On November 7, 1994 he filed a complaint before the labor arbiter on the ground that he was illegally dismissed and that he was not paid his salaries and separation pay.

Issue: Whether or not there is an employer-employee relationship between the parties to entitle jurisdiction of the case before the labor arbiter.

Held: Yes. It is axiomatic that existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the employee is an independent contractor when the terms of the agreement clearly shows otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. In determining the status of the management contract, the “four-fold test” on employment earlier mentioned has to be applied.

Unlike Basiao, herein respondent Delos Reyes was appointed acting unit manager, not agency manager. There is no evidence that to implement his obligations under the management contract, Delos Reyes had organized an office. Petitioner in fact has admitted that it provided Delos Reyes a place and a table at its office where he reported for and worked whenever he was not out in the field. Placed under petitioner’s Cebu District Service Office, the unit was given a name by petitioner – Delos Reyes and Associates — and assigned code no. 11753 and recruitment no. 109398. Under the managership contract, Delos Reyes was obliged to work exclusively for petitioner in life insurance solicitation and was imposed premium production quotas. Of course, the acting unit manager could not underwrite other lines of insurance because his permanent certificate of authority was for life insurance only and for no other. He was proscribed from accepting a managerial or supervisory position. In any other office including the government without the written consent of petitioner. Delos Reyes could only be promoted to permanent unit manager if he met certain requirements and his promotion was recommended by the petitioner’s district manager and regional manager and approved by its division manager. As acting unit manager, Delos Reyes performed functions beyond mere solicitation of insurance business for petitioner. As found by the NLRC, he exercised administrative functions which were necessary and beneficial to the business of insular life.

Exclusivity of service, control of assignment and removal of agents under private respondent’s unit, collection of premiums, furnishing company facilities and materials as well as capital described as unit development fund are but hallmarks of the management system in which herein private respondent worked. This obtaining, there is no escaping the conclusion that private respondent Pantaleon Delos Reyes was an employee of herein petitioner.

Lepanto vs Lepanto Capataz Union (G.R. No. 157086 February 18, 2013)

Lepanto Consolidated Mining Company vs Lepanto Capataz Union
G.R. No. 157086 February 18, 2013

Facts: As a domestic corporation authorized to engage in large-scale mining, Lepanto operated several mining claims in Mankayan, Benguet. On May 27, 1998, respondent Lepanto Capataz Union (Union), a labor organization duly registered with DOLE, filed a petition for consent election with the Industrial Relations Division of the Cordillera Regional Office (CAR) of DOLE, thereby proposing to represent 139 capatazes of Lepanto. In due course, Lepanto opposed the petition, contending that the Union was in reality seeking a certification election, not a consent election, and would be thereby competing with the Lepanto Employees Union (LEU), the current collective bargaining agent. Lepanto pointed out that the capatazes were already members of LEU, the exclusive representative of all rank-and-file employees of its Mine Division.

Issues: Whether or not the filing of a motion for reconsideration on the decision by the DOLE Secretary is a condition precedent in a petition for certiorari.

Whether or not respondent LCU may form a separate union.

Held: Yes. To start with,  the requirement of the timely filing of a motion for reconsideration as a precondition to the filing of a petition for certiorari accords with the principle of exhausting administrative remedies as a means to afford every opportunity to the respondent agency to resolve the matter and correct itself if need be.

And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St. Martin’s Funeral Home v. National Labor Relations Commission, where the Court has pronounced that the special civil action of certiorari is the appropriate remedy from the decision of the National Labor Relations Commission (NLRC) in view of the lack of any appellate remedy provided by the Labor Code to a party aggrieved by the decision of the NLRC. Accordingly, any decision, resolution or ruling of the DOLE Secretary from which the Labor Code affords no remedy to the aggrieved party may be reviewed through a petition for certiorari initiated only in the CA in deference to the principle of the hierarchy of courts.

Yet, it is also significant to note that National Federation of Labor v. Laguesma also reaffirmed the dictum issued in St. Martin’s Funeral Homes v. National Labor Relations Commission to the effect that “the remedy of the aggrieved party is to timely file a motion for reconsideration as a precondition for any further or subsequent remedy, and then seasonably avail of the special civil action of certiorari under Rule 65.

Yes. Capatazes or foremen are not rank-andfile employees because they are an extension of the management, and as such they may influence the rank-and-file workers under them to engage in slowdowns or similar activities detrimental to the policies, interests or business objectives of the employers.

The word capataz is defined in Webster’s Third International Dictionary, 1986 as “a boss”, “foreman” and “an overseer”. The employer did not dispute during the hearing that the capatazes indeed take charge of the implementation of the job orders by supervising and instructing the miners, mackers and other rank-and-file workers under them, assess and evaluate their performance, make regular reports and recommends (sic) new systems and procedure of work, as well as guidelines for the discipline of employees. As testified to by petitioner’s president, the capatazes are neither rank-and-file nor supervisory and, more or less, fall in the middle of their rank. In this respect, we can see that indeed the capatazes differ from the rank-and-file and can by themselves constitute a separate bargaining unit.

De Jesus vs Aquino (G.R. No. 164662 February 18, 2013)

De Jesus vs Aquino
G.R. No. 164662 February 18, 2013

Facts: On February 20, 2002, petitioner Ma. Lourdes De Jesus (De Jesus for brevity) filed with the Labor Arbiter a complaint for illegal dismissal against private respondents Supersonic Services Inc., (Supersonic for brevity), Pakistan Airlines, Gil Puyat, Jr. and Divina Abad Santos praying for the payment of separation pay, full backwages, moral and exemplary damages, etc. As Sales Promotion Officer, De Jesus was fully authorized to solicit clients and receive payments for and in its behalf, and as such, she occupied a highly confidential and financially sensitive position in the company; De Jesus was able to solicit several ticket purchases for Pakistan International Airlines (PIA) routed from Manila to various destinations abroad and received all payments for the PIA tickets in its behalf. Two memorandum were issued to De Jesus reminding her of her collectibles and her obligation to remit it to Supersonic. Despite the demands, De Jesus still failed to comply causing Supersonic to file a criminal case for Estafa which was countered by the petitioner by filing an illegal dismissal case.

Issues: Whether or not the dismissal of De Jesus is valid.

Whether or not Supersonic complied with the two notice rule required by law.

Held: Yes. Article 282 of the Labor Code enumerates the causes by which the employer may validly terminate the employment of the employee, viz:

Article 282.Termination by employer. – An employer may terminate an employment for any of the following causes:

  1. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
  2. Gross and habitual neglect by the employee of his duties;
  3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
  4. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
  5. Other causes analogous to the foregoing.

The CA observed that De Jesus had not disputed her failure to remit and account for some of her collections, for, in fact, she herself had expressly admitted her failure to do so through her letters dated April 5, 2001 and May 15, 2001 sent to Supersonic’s general manager. Thereby, the CA concluded, she defrauded her employer or willfully violated the trust reposed in her by Supersonic. In that regard, the CA rightly observed that proof beyond reasonable doubt of her violation of the trust was not required, for it was sufficient that the employer had “reasonable grounds to believe that the employee concerned is responsible for the misconduct as to be unworthy of the trust and confidence demanded by [her] position.”

No. A careful consideration of the records persuades us to affirm the decision of the CA holding that Supersonic had not complied with the two-written notice rule.

It ought to be without dispute that the betrayal of the trust the employer reposed in De Jesus was the essence of the offense for which she was to be validly penalized with the supreme penalty of dismissal. Nevertheless, she was still entitled to due process in order to effectively safeguard her security of tenure. The law affording to her due process as an employee imposed on Supersonic as the employer the obligation to send to her two written notices before finally dismissing her. This requirement of two written notices is enunciated in Article 277of the Labor Code, as amended, which relevantly states:

Article 277. Miscellaneous provisions.–xxx x x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off.
x x x x

and in Section 2 and Section 7, Rule I, Book VI of the Implementing Rules of the Labor Code. The first written notice would inform her of the particular acts or omissions for which her dismissal was being sought. The second written notice would notify her of the employer’s decision to dismiss her.  But the second written notice must not be made until after she was given a reasonable period after receiving the first written notice within which to answer the charge, and after she was given the ample opportunity to be heard and to defend herself with the assistance of her representative, if she so desired. The requirement was mandatory.

Legend Hotel vs Realuyo (G.R. No. 153511 July 18, 2012)

Legend Hotel (Manila) vs Realuyo AKA Roa
G.R. No. 153511 July 18, 2012

Facts: Respondent averred that he had worked as a pianist at the Legend Hotel’s Tanglaw Restaurant from September 1992 with an initial rate of P400.00/night that was given to him after each night’s performance; that his rate had increased to P750.00/night; and that during his employment, he could not choose the time of performance, which had been fixed from 7:00 pm to 10:00 pm for three to six times/week. He added that the Legend Hotel’s restaurant manager had required him to conform with the venue’s motif; that he had been subjected to the rules on employees’ representation checks and chits, a privilege granted to other employees; that on July 9, 1999, the management had notified him that as a cost-cutting measure his services as a pianist would no longer be required effective July 30, 1999; that he disputed the excuse, insisting that Legend Hotel had been lucratively operating as of the filing of his complaint; and that the loss of his employment made him bring his complaint.

Issues: 1. Whether or not petition for certiorari to the CA is proper.
2. Whether or not there is ER-EE relationship.

3. Whether or not retrenchment as a ground for respondent’s dismissal is valid.

Held: YES. There is no longer any doubt that a petition for certiorari brought to assail the decision of the NLRC may raise factual issues, and the CA may then review the decision of the NLRC and pass upon such factual issues in the process.8 The power of the CA to review factual issues in the exercise of its original jurisdiction to issue writs of certiorari is based on Section 9 of Batas Pambansa Blg. 129, which pertinently provides that the CA “shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings.”

YES. Petitioner actually wielded the power of selection at the time it entered into the service contract dated September 1, 1992 with respondent. This is true, notwithstanding petitioner’s insistence that respondent had only offered his services to provide live music at petitioner’s Tanglaw Restaurant, and despite petitioner’s position that what had really transpired was a negotiation of his rate and time of availability. The power of selection was firmly evidenced by, among others, the express written recommendation dated January 12, 1998 by Christine Velazco, petitioner’s restaurant manager, for the increase of his remuneration.

Respondent’s remuneration, albeit denominated as talent fees, was still considered as included in the term wage in the sense and context of the Labor Code, regardless of how petitioner chose to designate the remuneration. Anent this, Article 97(f) of the Labor Code clearly states:

xxx wage paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee.

That respondent worked for less than eight hours/day was of no consequence and did not detract from the CA’s finding on the existence of the employer-employee relationship. In providing that the “normal hours of work of any employee shall not exceed eight (8) hours a day,” Article 83 of the Labor Code only set a maximum of number of hours as “normal hours of work” but did not prohibit work of less than eight hours.

The power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship. This is the so-called control test, and is premised on whether the person for whom the services are performed reserves the right to control both the end achieved and the manner and means used to achieve that end.

A review of the records shows, however, that respondent performed his work as a pianist under petitioner’s supervision and control. Specifically, petitioner’s control of both the end achieved and the manner and means used to achieve that end was demonstrated by the following, to wit: a. He could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm, three to six times a week; b. He could not choose the place of his performance; c. The restaurant’s manager required him at certain times to perform only Tagalog songs or music, or to wear barong Tagalog to conform to the Filipiniana motif; and d. He was subjected to the rules on employees’ representation check and chits, a privilege granted to other employees. Relevantly, it is worth remembering that the employer need not actually supervise the performance of duties by the employee, for it sufficed that the employer has the right to wield that power.

NO. Retrenchment is one of the authorized causes for the dismissal of employees recognized by the Labor Code. It is a management prerogative resorted to by employers to avoid or to minimize business losses. On this matter, Article 283 of the Labor Code.

The Court has laid down the following standards that an employer should meet to justify retrenchment and to foil abuse, namely: (a) The expected losses should be substantial and not merely de minimis in extent; (b) The substantial losses apprehended must be reasonably imminent; (c) The retrenchment must be reasonably necessary and likely to effectively prevent the expected losses; and (d) The alleged losses, if already incurred, and the expected imminent losses sought to be forestalled must be proved by sufficient and convincing evidence.

Anent the last standard of sufficient and convincing evidence, it ought to be pointed out that a less exacting standard of proof would render too easy the abuse of retrenchment as a ground for termination of services of employees.

In termination cases, the burden of proving that the dismissal was for a valid or authorized cause rests upon the employer. Here, petitioner did not submit evidence of the losses to its business operations and the economic havoc it would thereby imminently sustain. It only claimed that respondent’s termination was due to its “present business/financial condition.” This bare statement fell short of the norm to show a valid retrenchment. Hence, we hold that there was no valid cause for the retrenchment of respondent.