67. Meralco vs.

Benamira Indirect Employer Labor Only Agency FACTS: Rogelio Benamira et al are security guards who worked for Peoples Security, Inc. ( PSI). PSI was the security agency contracted by MERALCO. The contract between PSI and MERALCO expired. MERALCO subsequently contracted Armed Security & Detective Agency, Inc. (ASDAI) as its new security agency. ASDAI absorbed Benamira et al upon MERALCOs advice. After two years, the contract between ASDAI and MERALCO expired. MERALCO subsequently contracted AFSISI. Advance Forces Security & Investigation Services, Inc (AFSISI) did not schedule any work for Benamira et al. It was interpreted as a constructive dismissal. Benamira sued MERALCO, ASDAI, and AFSISI. The Labor Arbiter ruled that ASDAI should reinstate Benamira et al and that MERALCO is solidarily liable. No liability for AFSISI. NLRC affirmed LA. The CA reversed the lower courts. The CA ruled that the employer is actually MERALCO. ISSUE: Whether or not MERALCO is the employer of the fired security guards. HELD: No. Under the contract between ASDAI and MERALCO, it can be seen that ASDAI is indeed the employer of the guards. Applying the 4 Fold Test: ASDAI employed the guards when it absorbed them from PSI. ASDAI provided the salaries of the guards (MERALCO merely pays ASDAI for providing the guards). ASDAI has control over the guards because they are being inspected (MERALCO has the right to conduct its own inspection as per contract with ASDAI only). ASDAI has the power to terminate the guards, as when they did not provide any tours or schedules to them. Further, the services offered by the guards is not necessary to the principal business of MERALCO which is to provide electricity. AFSISI is not the employer of the guards as well (as claimed by the guards) because AFSISI never absorbed them nor was there any evidence showing otherwise. These security agencies are not Labor Only agencies (unlike HR agencies) because they have their own equipments, machineries and in general they carry their own business.

68. Broadway Motors Inc. vs. NLRC FACTS: By virtue of a written undated "Work Contract," private respondent Vicente Apolinario, sometime in March 1967, began work as an auto painter in the premises of petitioner Broadway Motors, Inc.. The contract was signed by Vicente Apolinario as "Contractor"and Mr. Johnny L. Chieng, Parts and Service Operations Manager of petitioner Corporation. Apolinario worked as an auto painter for a period of 18 years, until 23 January 1985 when he was barred from entering the premises of the petitioner Corporation, and his alleged involvement in a fist-fight with the shop superintendent of Broadway Motors the day before. Apolinario commenced an action for illegal dismissal with the NLRC. Petitioner Corporation contends that Apolinario was not its own employee but, rather, an independent contractor who conducted his own separate business under the trade name of "VM Automotive Repair Service" and had his own "Contract Workers." ISSUE:W/N Apolinario is an independent contractor. HELD:No. The evidence of record reveals that the alleged "Contract Work" carried out by Apolinario and his "Contract Workers," excepting overtime work, was performed during regular working hours 6 days in a week, which circumstance must have made it virtually impossible for them to carry on any additional and independent auto painting business outside the premises of Broadway Motors. Finally, Apolinario and his men were engaged in the performance of a line of work automobile painting which was directly related to, if not an integral part altogether of the regular business operations of petitioner Corporation i.e., that of an automotive repair shop. We conclude that while there is present in the relationship between petitioner Corporation and private respondent some factors suggestive of an owner- independent contractor relationship (e.g., the manner of payment of compensation to Apolinario and his "Contract Workers"), many other factors are present which demonstrate that that relationship is properly characterized as one of employer-employee. We conclude, further, that the same factors indicate the existence of a "labor-only" contracting arrangement between petitioner Corporation on the one hand as owner, and upon the other hand, Apolinario as "labor-only" contractor and his "Contract Workers." Thus, an employer-employee relationship must be held to have existed between petitioner Corporation and private respondent, whether considered as a result of the contractual arrangements between them or as a result of the operation of the Labor Code (at least from 1974 onwards) and its Implementing Rules.

69. RUBBERWORLD PHILS. INC. vs. NLRC FACTS: Petitioner Rubberworld (Phils.), Inc. ( Rubberworld), a corporation established in 1965, was engaged in manufacturing footwear, bags and garments. Aquilino Magsalin, et al.were employed as dispatcher, warehouseman, issue monitor, foreman, jacks cementer and outer sole attacher, respectively. On August 26, 1994, Rubberworld filed with the Department of Labor and Employment a notice of temporary shutdown of operations to take effect on September 26, 1994. Before the effectivity date, however, Rubberworld was forced to prematurely shutdown its operations. Private respondents filed with the NLRC a complaint[2] against petitioner for illegal dismissal and nonpayment of separation pay. Rubberworld filed with the Securities and Exchange Commission (SEC) a petition for declaration of suspension of payments with a proposed rehabilitation plan.[3] SEC issued the following order: "xxx all actions for claims against Rubberworld Philippines, Inc. pending before any court, tribunal, office, board, body, Commission or sheriff are hereby deemed SUSPENDED. "Consequently, all pending incidents for preliminary injunctions, writ or attachments, foreclosures and the like are hereby rendered moot and academic. Petitioner submitted to the labor arbiter a motion to suspend the proceedings invoking the SEC order. The labor arbiter did not act on the motion and ordered the parties to submit their respective position papers. The labor arbiter rendered a decision in favor of the private respondents. Petitioners appeal to NLRC was denied. ISSUE: W/N the DOLE, the Labor Arbiter and the NLRC may legally act on the claims of respondents despite the order of the Securities and Exchange Commission suspending all actions against a company under rehabilitation by a management committee created by the Securities and Exchange Commission. HELD:NO. Presidential Decree No. 902-A is clear that "all actions for claims against corporations, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly." The law did not make any exception in favor of labor claims. "The justification for the automatic stay of all pending actions for claims is to enable the management committee or the rehabilitation receiver to effectively exercise its/his powers free from any judicial or extra judicial interference that might unduly hinder or prevent the 'rescue' of the debtor company. To allow such other actions to continue would only add to the burden of the management committee or rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the corporation instead of being directed toward its restructuring and rehabilitation." [9] Thus, the labor case would defeat the purpose of an automatic stay. To rule otherwise would open the floodgates to numerous claims and would defeat the rescue efforts of the management committee. This finds ratiocination in that the power to hear and decide labor disputes is deemed suspended when the Securities and Exchange Commission puts the corporation under rehabilitation.

70.Development Bank of the Philippines vs. Secretary of Labor FACTS: Petitioner Development Bank of the Philippines seeks the nullification of an order issued by the Undersecretary of Labor and Employment, directing the petitioner to deliver the properties of Riverside Mills Corporation (RMC) which it had in its possession to the Ministry (now Department) of Labor and Employment (MOLE) for proper disposition . Respondents filed a complaint for illegal dismissal, unfair labor practice, illegal deductions from salaries and violation of the minimum wage law against RMC. A decision was rendered by Director Severo M. Pucan of the NCR, MOLE, ordering RMC to pay private respondents backwages and separation benefits. A corresponding writ of execution was issued directing the sheriff to collect the amount of P1,256,678.76 from RMC and, in case of failure to collect, to execute the writ by selling the goods and chattel of RMC not exempt from execution or, in case of insufficiency thereof, the real or immovable properties of RMC. It appears that petitioner had instituted extra-judicial foreclosure proceedings as early as 1983 on the properties and other assets of RMC as a result of the latter's failure to meet its obligations on the loans it secured from petitioner.Therefore writ of execution was returned unserved and unsatisfied. Private respondents argued by stating that pursuant to Article 110 of the Labor Code, they enjoy first preference over the mortgaged properties of RMC for the satisfaction of the judgment rendered in their favor notwithstanding the foreclosure of the same by petitioner as mortgage creditor Petitioner contends that Article 110 of the Labor Code finds no application in the case at bar for the following reasons: (1) The properties sought to be delivered have ceased to belong to RMC in view of the fact that petitioner had foreclosed on the mortgage, and the properties have been sold and delivered to third parties; (2) The requisite condition for the application of Article 110 of the Labor Code is not present since no bankruptcy or insolvency proceedings over RMC properties and assets have been undertaken. ISSUE: W/N private respondents still enjoyed a preferential lien for the payment of their backwages and separation benefits over the properties of RMC which were foreclosed by petitioner. HELD: NO. The Court laid down the ruling that Article 110 of the Labor Code, which cannot be viewed in isolation of, and must always be reckoned with the provisions of the Civil Code on concurrence and preference of credits, may not be invoked by employees or workers of RMC like private respondents herein, in the absence of a formal declaration of bankruptcy or a judicial liquidation order of RMC. It appears on record, that petitioner had extra-judicially foreclosed the subject properties from RMC as early as 1983 and purchased the same at public auction, and that RMC had failed to exercise its right to redeem. Thus, when the issued order which directed the delivery of these properties to the MOLE, RMC had ceased to be the absolute owner thereof, the order was directed against properties which no longer belonged to the judgment debtor RMC.

71.Boliano et al vs. Padoliana Facts: Petitioners A.N. Bolinao, Jr., et al. were all former employees of Sabena Mining Corporation(SMC). In 1982 and 1983 they were laid off without being recalled. Petitioners filed a formal complaint for collection of unpaid salaries, unused accrued vacation and sick leave benefits, 13th month pay and separation pay before the NLRC against SMC and Development Bank of the Philippines. On May,1984, a compromise agreement was entered into by the parties, wherein petitioners were to be paid on a staggered basis the collective amount of P385,583.95. The company faithfully complied with the scheduled payments only up to March, 1985 because it ceased operations effective April 1, 1985. With this development, petitioners moved for the issuance of a writ of execution. The Labor Arbiter issued a writ of execution against the company to collect the balance of P311,580.14 On June 27, 1985 Deputy Sheriff garnished the remaining amount of P150,279.64 in the savings account of the company at the DBP). However, the same amount was previously garnished by two creditors of the company; namely, Bank of America and Phelps Dodge (Phils.), Inc. Bank of America garnished the amount in April, 1982 while Phelps Dodge garnished the amount in June, 1984. The respondent court(RTC Manila) issued an order denying the motion to intervene and dismissing the third party claim, declaring that the garnishment made by its Deputy Sheriff in favor of respondent Phelps Dodge, Phils., Inc. superior to the rights of petitioners. Petitioners contend that under Article 110 and its implementing rules; and regulations of the Labor Code, the claims of the laborers for unpaid wages and other monetary benefits due them for services rendered prior to bankruptcy enjoy first preference in the satisfaction of credits against a bankrupt company. The respondent maintains that the rights of preference and first lien of petitioners, as former employees of SMC, under aforesaid law and rules, are operative only in an insolvency court and in a bankrupt case.

ISSUE: W/N petitioners enjoy preferential right or claim over the funds of Sabena Mining Corporation as provided for under the provisions of Article 110 of the New Labor Code HELD:NO. It is quite clear from the provisions of Article 110 of the Labor Code and Section 10, Rule VIII, Book H of the Revised Rules and Regulations Implementing the Labor Code, that a declaration of bankruptcy or a judicial liquidation must be present before the worker's preference may be enforced. Thus, it was held that Article 110 of the Labor Code and its implementing rule cannot be invoked absent a formal declaration of bankruptcy or a liquidation order In the case at bar, there was no showing of any insolvency proceeding or declaration of bankruptcy or judicial liquidation that was being filed by Sabena Mining Corporation. It is only an extra-judicial foreclosure that was being enunciated as when DBP extra-judicially foreclosed the assets of Sabena Mining Corporation.

72. V.L. Enterprises vs. CA Facts: After an inspection was conducted, the Regional Director ordered VL to pay the 21 employees claims, amounting to P822,978.00. It then appealed the Order. The Secretary of Labor affirmed and deemed the appealed order to have become final and executory. The DOLE Regional Director (NCR) issued an Alias Writ of Execution. On the basis thereof, the Sheriff issued a Notice of Sale on Execution of Real Properties. VL filed a Petition for Certiorari with CA, seeking to annul the RDs order, the Alias writ of execution and the notice of sale. CA dismissed the petition for certiorari. Instead of appealing said Court of Appeals Resolution via a Petition for Review on Certiorari, VL filed a Petition for Annulment of Judgment, Writ of Execution and Notice of Sale, with TRO. Petitioners ground for annulment of the three Issuances is the alleged lack of jurisdiction on the part of the DOLE Regional Director in awarding amounts which exceeded P5,000.00. Issues:Whether or not Regional Director have jurisdiction to award amount exceeding P5,000.

Held:Yes. The respondent Secretary held that the jurisdictional limitation imposed by Article 129 on his visitorial and enforcement power under Article 128 (b) of the Labor Code, as amended, has been repealed by Republic Act No. 7730. Article 128(b) -- "[n]otwithstanding the provisions of Article 129 and 217 of the Labor Code to the contrary"Republic Act No. 7730 amended Article 128(b) to its present wording so as to free it from the jurisdictional limitations found in Articles 129 and 217. Thus, as it is now worded, the authority under Article 128 may be exercised by DOLE regardless of the monetary value involved, unlike in Article 129 where the authority is only for claims not exceeding P5,000.00 per claimant.