BROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILIPPINES v.

ZAMORA

BROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILIPPINES v. ZAMORA

G.R. No. L-48645 January 7, 1987
Ponente: J. Guiterrez

FACTS:

BLUM filed a complaint with the now defunct Court of Industrial Relations, charging San
Miguel Corporation, and the following officers: Enrique Camahort, Federico Ofiate
Feliciano Arceo, Melencio Eugenia Jr., Ernesto Villanueva, Antonio Bocaling and
Godofredo Cueto of unfair labor practice as set forth in Section 4 (a), sub-sections (1)
and (4) of Republic Act No. 875 and of Legal dismissal. It was alleged that respondents
ordered the individual complainants to disaffiliate from the complainant union; and that
management dismissed the individual complainants when they insisted on their union
membership.

On their part, respondents moved for the dismissal of the complaint on the grounds
that the complainants are not and have never been employees of respondent company
but employees of the independent contractor; that respondent company has never had
control over the means and methods followed by the independent contractor who
enjoyed full authority to hire and control said employees; and that the individual
complainants are barred by estoppel from asserting that they are employees of
respondent company.

ISSUE:
The question of whether an employer-employee relationship exists

HELD:

In determining the existence of an employer-employee relationship, the elements that

are generally considered are the following:

(a) the selection and engagement of the employee;

(b) the payment of wages;

(c) the power of dismissal; and

(d) the employer's power to control the employee with respect to the means and
methods by which the work is to be accomplished. It. is the called "control test" that is
the most important element.

The existence of an independent contractor relationship is generally established by the

following criteria: "whether or not the contractor is carrying on an independent
business; the nature and extent of the work; the skill required; the term and duration of
the relationship; the right to assign the performance of a specified piece of work; the
control and supervision of the work to another; the employer's power with respect to
the hiring, firing and payment of the contractor's workers; the control of the premises;
the duty to supply the premises tools, appliances, materials and labor; and the mode,
manner and terms of payment"

The records fail to show that a large commercial outfit, such as the San Miguel
Corporation, entered into mere oral agreements of employment or labor contracting
where the same would involve considerable expenses and dealings with a large number
of workers over a long period of time. Despite respondent company's allegations not an
iota of evidence was offered to prove the same or its particulars. Such failure makes
respondent SMC's stand subject to serious doubts.

G.R. No. L-43825 May 9, 1988

CONTINENTAL MARBLE CORP. and FELIPE DAVID vs. NATIONAL LABOR RELATIONS
COMMISSION (NLRC); ARBITRATOR JOSE T. COLLADO and RODITO NASAYAO

FACTS:
private respondent Rodito Nasayao claimed that sometime in May 1974, he was appointed plant
manager of the petitioner corporation, with an alleged compensation of P3,000.00, a month, or
25% of the monthly net income of the company, whichever is greater, and when the company
failed to pay his salary for the months of May, June, and July 1974, Rodito Nasayao filed a
complaint with the National Labor Relations Commission, Branch IV, for the recovery of said
unpaid varies.

petitioners denied that Rodito Nasayao was employed in the company as plant manager with a
fixed monthly salary of P3,000.00. They claimed that the undertaking agreed upon by the parties
was a joint venture, a sort of partnership, wherein Rodito Nasayao was to keep the machinery in
good working condition and, in return, he would get the contracts from end-users for the
installation of marble products, in which the company would not interfere. In addition, private
respondent Nasayao was to receive an amount equivalent to 25% of the net profits that the
petitioner corporation would realize, should there be any. Petitioners alleged that since there had
been no profits during said period, private respondent was not entitled to any amount.

The case was submitted for voluntary arbitration and the parties selected the herein respondent
Jose T. Collado as voluntary arbitrator. In the course of the proceedings, however, the herein
petitioners challenged the arbitrators capacity to try and decide the case fairly and judiciously
and asked him to desist from further hearing the case. But, the respondent arbitrator refused. In
due time, or on 29 December 1975, he rendered judgment in favor of the complainant, ordering
the herein petitioners to pay Rodito Nasayao the amount of P9,000.00, within 10 days from
notice.

petitioners appealed to the National Labor Relations Commission on grounds that the labor
arbiter gravely abused his discretion in persisting to hear and decide the case notwithstanding
petitioners request for him to desist therefrom: and that the appealed decision is not supported
by evidence.

Rodito Nasayao filed a motion to dismiss the appeal on the ground that the decision of the
voluntary arbitrator is final, unappealable, and immediately executory

respondent Commission, in a resolution dated 7 May 1976, dismissed the appeal on the ground
that the decision appealed from is final, unappealable and immediately executory, and ordered
the herein petitioners to comply with the decision of the voluntary arbitrator within 10 days from
receipt of the resolution.

Court issued a temporary restraining order, restraining herein respondents from enforcing and/or
carrying out the questioned decision and resolution.

ISSUE:
Voluntary Arbitration award, generally final. Exceptions.

HELD:
A voluntary arbitrator by the nature of her fucntions acts in quasi-judicial capacity. There is no
reason why herdecisions involving interpretation of law should be beyond this Courts review.
Administrative officials are presumed to act in accordance with law and yet we do hesitate to
pass upon their work where a question of law is involved or where a showing of abuse of
authority or discretion in their official acts is properly raised in petitions for certiorari.

While the Court has accorded great respect for, and finality to, findings of fact of a voluntary
arbitrator and administrative agencies which have acquired expertise in their respective fields,
like the Labor Department and the National Labor Relations Commission, their findings of fact
and the conclusions drawn therefrom have to be supported by substantial evidence. ln that instant
case, the finding of the voluntary arbitrator that Rodito Nasayao was an employee of the
petitioner corporation is not supported by the evidence or by the law.

The decisions of the voluntary arbitrators must be given the highest respect and as a general rule
must be accorded a certain measure of finality. This is especially true where the arbitrator chosen
by the parties enjoys first rate credentials. It is not correct however, that this respect precludes the
exercise of judicial review over their decisions.

In spite of statutory provisions making final the decisions of certain administrative agencies, the
SC may take cognizance of petitions questioning these decisions where want of jurisdiction,
grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous
interpretation of the law are brought to its attention.

Sevilla vs. Court of Appeals G..R. No. L-41182-3

April 16, 1988

Employer-Employee Relationship

Facts:

The petitioners invoke the provisions on human relations of the Civil Code in this appeal by
certiorari.

Mrs. Segundina Noguera, party of the first part; the Tourist World Service, Inc., represented by
Mr. Eliseo Canilao as party of the second part, and hereinafter referred to as appellants, the
Tourist World Service, Inc. leased the premises belonging to the party of the first part at Mabini
St., Manila for the former-s use as a branch office. In the said contract the party of the third part
held herself solidarily liable with the party of the part for the prompt payment of the monthly
rental agreed on. When the branch office was opened, the same was run by the herein appellant
Una 0. Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the
efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the
Tourist World Service, Inc.
On November 24, 1961 the Tourist World Service, Inc. appears to have been informed that Lina
Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch
office was anyhow losing, the Tourist World Service considered closing down its office.

On June 17,1963, appellant Lina Sevilla refiled her case against the herein appellees and after the
issues were joined, the reinstated counterclaim of Segundina Noguera and the new complaint of
appellant Lina Sevilla were jointly heard following which the court ordered both cases dismiss
for lack of merit.

In her appeal, Lina Sevilla claims that a joint bussiness venture was entered into by and between
her and appellee TWS with offices at the Ermita branch office and that she was not an employee
of the TWS to the end that her relationship with TWS was one of a joint business venture
appellant made declarations.

Issue:

Whether or not the padlocking of the premises by the Tourist World Service, Inc. without the
knowledge and consent of the appellant Lina Sevilla entitled the latter to the relief of damages
prayed for and whether or not the evidence for the said appellant supports the contention that the
appellee Tourist World Service, Inc. unilaterally and without the consent of the appellant
disconnected the telephone lines of the Ermita branch office of the appellee Tourist World
Service, Inc.?

Held:

The trial court held for the private respondent on the premise that the private respondent, Tourist
World Service, Inc., being the true lessee, it was within its prerogative to terminate the lease and
padlock the premises. It likewise found the petitioner, Lina Sevilla, to be a mere employee of
said Tourist World Service, Inc. and as such, she was bound by the acts of her employer. The
respondent Court of Appeal rendered an affirmance.

In this jurisdiction, there has been no uniform test to determine the evidence of an employer-
employee relation. In general, we have relied on the so-called right of control test, "where the
person for whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end." Subsequently, however, we have
considered, in addition to the standard of right-of control, the existing economic conditions
prevailing between the parties, like the inclusion of the employee in the payrolls, in determining
the existence of an employer-employee relationship.

the Decision promulgated on January 23, 1975 as well as the Resolution issued on July 31, 1975,
by the respondent Court of Appeals is hereby REVERSED and SET ASIDE. The private
respondent, Tourist World Service, Inc., and Eliseo Canilao, are ORDERED jointly and severally
to indemnify the petitioner, Lina Sevilla, the sum of 25,00.00 as and for moral damages, the sum
of P10,000.00, as and for exemplary damages, and the sum of P5,000.00, as and for nominal
and/or temperate damages.

Encyclopaedia Britannica, Inc vs. NLRC, G.R. No. 87098, November 4,

1996; 264 SCRA 1
Posted by Pius Morados on November 10, 2011

(Labor Standards Inexistence of employer-employee relationship)

Facts: Private respondent was a sales division manager of private petitioner and was in charge of
selling the latters products through sales representatives. As compensation, private respondent
receive commissions from the products sold by his agents. After resigning from office to pursue
his private business, he filed a complaint against the petitioner, claiming for non-payment of
separation pay and other benefits.

Petitioner alleged that complainant was not its employee but an independent dealer authorized to
promote and sell its products and in return, received commissions therefrom. Petitioner did not
have any salary and his income from petitioner was dependent on the volume of sales
accomplished. He had his own office, financed the business expense, and maintained his own
workforce. Thus petitioner argued that it had no control and supervision over the complainant as
to the manner and means he conducted his business operations.

The Labor Arbiter ruled that complainant was an employee of the petitioner company. Petioner
had control over the complainant since the latter was required to make periodic reports of his
sales activities to the company.

Issue: Whether or not there exists an employer-employee relationship.

Held: No. Control of employees conduct is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship. Under
this, an employer-employee relationship exists where the person for whom the services are
performed reserves the right to control not only the end to be achieved, but also the manner and
means to be used in reaching that end.

The fact that petitioner issued memoranda to private respondent and to other division sales
managers did not prove that petitioner had actual control over them. The different memoranda
were merely guidelines on company policies which the sales managers follow and impose on
their respective agents.

Dy Keh Beng v. International Labor

G.R. No. L-32245 May 25, 1979

DY KEH BENG, petitioner,

vs.
INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL.,
respondents.

Facts:

A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket factory,
for discriminatory acts within the meaning of Section 4(a), sub-paragraph (1) and (4). Republic
Act No. 875, by dismissing on September 28 and 29, 1960, respectively, Carlos N. Solano and
Ricardo Tudla for their union activities.

After preliminary investigation was conducted, a case was filed in the Court of Industrial
Relations for in behalf of the International Labor and Marine Union of the Philippines and two of
its members, Solano and Tudla In his answer, Dy Keh Beng contended that he did not know
Tudla and that Solano was not his employee because the latter came to the establishment only
when there was work which he did on pakiaw basis, each piece of work being done under a
separate contract. Moreover, Dy Keh Beng countered with a special defense of simple extortion
committed by the head of the labor union, Bienvenido Onayan.
According to Dy Keh Beng, however, Solano was not his employee for the following reasons:

(1) Solano never stayed long enought at Dy's establishment;

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

Issue:

Whether there existed an employee-employer relation between petitioner Dy Keh Beng and the
respondents Solano and Tudla.

Ruling:

The Hearing Examiner prepared a report which was subsequently adopted in toto by the Court of
Industrial Relations. An employee-employer relationship was found to have existed between Dy
Keh Beng and complainants Tudla and Solano, although Solano was admitted to have worked on
piece basis. According to the Hearing Examiner, the evidence for the complainant Union tended
to show that Solano and Tudla became employees of Dy Keh Beng from May 2, 1953 and July
15, 1955, respectively, and that except in the event of illness, their work with the establishment
was continuous although their services were compensated on piece basis. Evidence likewise
showed that at times the establishment had eight (8) workers and never less than five (5);
including the complainants, and that complainants used to receive P5.00 a day. Sometimes less.

The award of backwages granted by the Court of Industrial Relations is herein modified to an
award of backwages for three years without qualification and deduction at the respective rates of
compensation the employees concerned were receiving at the time of dismissal. The execution of
this award is entrusted to the National Labor Relations Commission. Costs against petitioner.

Francisco v NLRC (Labor Standards)

GR No. 170087 August 31, 2006

FACTS:
Angelina Francisco was hired by Kasei Corporation during the incorporation stage. She was designated as
accountant and corporate secretary and was assigned to handle all the accounting needs of the company.
She was also designated as Liason Officer to the City of Manila to secure permits for the operation of
the company.

In 1996, she was designated as Acting Manager. She was assigned to handle recruitment of all employees and
perform management administration functions. In 2001, she was replaced by Liza Fuentes as Manager. Kasei
Corporation reduced her salary to P2,500 per month which was until September. She asked for her salary but
was informed that she was no longer connected to the company. She did not anymore report to work since
she was not paid for her salary. She filed an action for constructive dismissal with the Labor Arbiter.
Kasei Corporation however averred in its defense that:
- Petitioner had no daily time record and she came to the office any time she wanted. The company never
interfered with her work except that from time to time, the management would ask her opinion on matters
relating to her profession.
- petitioner was not among the employees reported to the BIR, as well as a list of payees subject to expanded
withholding tax which included petitioner. SSS records were also submitted showing that petitioner's latest
employer was Seiji Corporation

DECISION OF LOWER COURTS:

*Labor arbiter: Francisco was illegally dismissed.

*NLRC: affirmed LA.
*CA: reversed NLRC.
*CA (motion for reconsideration): denied.
Hence, the present petition.

ISSUE/S:
(1) WON there was an employer-employee relationship between petitioner and private respondent
Kasei Corporation; and if in the affirmative,

(2) WON petitioner was illegally dismissed.

HELD:
(1) YES.

The court held that in this jurisdiction, there has been no uniform test to determine the existence 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 performed reserves a right to control not only the end to be achieved but also the means to be
used in reaching such end. In addition to the standard of right-of-control, the existing ECONOMIC
CONDITIONS PREVAILING BETWEEN THE PARTIES, like the inclusion of the employee in the payrolls, can
help in determining the existence of an employer-employee relationship.

The better approach would therefore be to adopt a two-tiered test involving:

*CONTROL TEST - YES
*ECONOMIC CONDITIONS -YES

(1) the putative employers POWER TO CONTROL the employee with respect to the means and methods by
which the work is to be accomplished; and

(2) the underlying ECONOMIC REALITIES of the activity or relationship.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she
was under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. It is
therefore apparent that petitioner is economically dependent on respondent corporation for her continued
employment in the latters line of business.
Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent
corporation because she had served the company for six years before her dismissal, receiving check vouchers
indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and
Social Security contributions from August 1, 1999 to December 18, 2000
In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic 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 in determining the existence of an employer-employee
relationship based on an analysis of 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 which the services performed are an integral part of the employers business;
(2) the extent of the workers investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer;
(4) the workers opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent
enterprise;
(6) the permanency and duration of the relationship between the worker and the employer; and
(7) the degree of dependency of the worker upon the employer for his continued employment in that line of
business.

The proper standard of economic dependence is whether the worker is dependent on the alleged employer
for his continued employment in that line of business.

(2) YES, she was illegally dismissed. A diminution of pay is prejudicial to the employee and amounts to
constructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of work
resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a
demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to an employee

RATIO:
In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex, race
or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employees
and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater
number of employees. This would enable employees to avail of the benefits accorded to them by law, in line
with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and
reaffirming it as a primary social economic force in furtherance of social justice and national development.