Labor Cases Finals Reviewer.docx

LABOR CASES: FINALS PERIOD

CONTINENTAL STEEL MANUFACTURING VS MONTANO FACTS: Hortillano, an employee of petitioner Continental Steel, filed a claim for Paternity Leave, Bereavement Leave and Death and Accident Insurance for dependent, pursuant to the CBA. The claim was for Hortillano’s unborn child who died. Hortillano’s wife had a premature delivery while she was on her 38th week of pregnancy. The female fetus died during the labor. The company granted Hortillano’s claim for paternity leave but denied his claims for bereavement leave and death benefits. Hortillano claimed that the provision in CBS did not specifically state that the dependent should have first been born alive or must have acquired juridical personality. Petitioner argued that the said provision of CBA did not contemplate death of an unborn child or a fetus without legal personality. They also claimed that there are two elements for the entitlement of the benefit: 1) death; and 2) status of legitimate dependent. None which existed in Hortillano’s case. They further contend that the only one with civil personality could die, based on Art 40-42 of Civil Code. Hence, according to petitioner, the unborn child never died. Labor Arbiter Montana argued that the fetus had the right to be supported by the parents from the very moment he/she was conceived. Petitioner appealed to CA but CA affirmed Labor Arbiter’s decision. Hence, this petition. ISSUE: W/N only one with juridical personality can die. HELD: No. The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil Code for the legal definition of death is misplaced. Article 40 provides that a conceived child acquires personality only when it is born, and Article 41 defines when a child is considered born. Article 42 plainly states that civil personality is extinguished by death. The issue of civil personality is irrelevant in this case. Arts 40-42 do not provide at all definition of death. Life is not synonymous to civil personality. One need not acquire civil personality first before s/he could die. The Constitution in fact recognizes the life of the unborn from conception. ISSUE2: W/N a fetus can be considered as a dependent.

HELD: Yes. Even an unborn child is a dependent of its parents. The fetus would have not reached 38-39 weeks without depending upon its mother.

UNITED KIMBERLY KIMBERLY CLARK

CLARK

UNION

VS

FACTS: United Kimberly-Clark Employees Union (UKCEU), a local chapter affiliate of the Philippine Transport General Workers’ Organization (PTGWO), is the certified collective bargaining agent of all rank-andfile employees of the San Pedro milling plant of Kimberly-Clark Philippines, Inc. (KCPI), a multinational corporation engaged in the manufacture of bathroom and facial tissues, paper napkins, feminine care products, disposable diapers and absorbent cotton. In 1980, KCPI and the UKCEU executed a CBA which essentially states that the Company agrees to employ, regardless of sex, the immediate member of the family of an employee provided qualified, upon the employee’s resignation, retirement, disability or death. The phrase “immediate member of the family of an employee” referred to the employee’s legitimate children and in default thereof to the employee’s collateral relative within the third civil degree. The recommendee of the retired/resigned employee shall, if qualified, be hired on probationary status. But the KCPI did not set any other qualifying standards for the recommendees of retired, resigned, deceased or disabled employees and agreed to hire such recommendees who were high school graduates as an act of liberality and generosity. The provision remained unchanged. November 7, 1995, KCPI issued Guidelines on the Hiring of Replacements of Retired/Resigned Employees. The Guidelines require, among others, that: (a) such recommendees must be at least 18 years of age but not more than 30 years old at the time of the hiring, and (b) have completed, after graduating from high school, at least a two-year technical/vocational course or a third year level of college education During the negotiation for the new 1997 CBA, UKCEU proposed the amendment of Article XX, Section 1 (concerning the recommendation of relatives as replacement of former employees) of the CBA. After the negotiation, KCPI and UKCEU executed a CBA to cover the period from July 1, 1997 to June 30, 1999. The educational qualifications contained in the Guidelines were not incorporated in the CBA. CBA was retained 1

without any modification. KCPI continued to hire employees pursuant to the CBA up to 1998. In the second half of 1998, KCPI started to suspend the implementation of the CBA. This was partly due to the depressed economic conditions then prevailing in the Philippines, and in compliance with the freeze hiring policy of its Asia-Pacific headquarters. It refused to hire, as regular employees, 80 recommendees of retiring employees. KCPI and UKCEU failed to settle the matter through the existing grievance machinery. April 23, 1999, the parties filed before the National Conciliation and Mediation Board (NCMB), a Submission Agreement referring to arbitration the issue of whether KCPI violated the CBA. Meantime, in August 1999, KCPI and UKCEU executed a new CBA. Article XX, Section 1 was incorporated in the new CBA, governing the relation of the parties up to June 30, 2002. UKCEU averred in its pleadings that the “qualification in terms of education,” that is, admitting recommendees who were at least high school graduates, had been an established practice of KCPI since 1980 so that KCPI could not just unilaterally revoke such practice without its (UKCEU) consent and approval, and that while KCPI had the discretion to raise the educational qualification of its applicants for employment, this did not apply to recommendees due to the manner by which Article XX, Section 1 was implemented in the past. Thus, in refusing to hire the 80 recommendees as regular employees, KCPI violated its CBA with the union, equivalent to breach of contract and unfair labor practice. KCPI maintained that pursuant to its management prerogative, it had the right to determine hiring standards under Article XX, Section 1 of the CBA without the consent or approval of UKCEU. It argued that like applicants for regular positions, recommendees of retiring employees must also be college graduates, in accordance with its Guidelines. March 19, 2001, the Voluntary Arbitrator (VA) issued a Resolution favoring UKCEU. And held that the company cannot suspend implementation of Section 1, Article XX of the existing CBA unilaterally by upgrading the educational qualifications of “applicants-replacements” than are required previously; and that since the CBA is the law between the parties, KCPI could not just unilaterally change or suspend the implementation of the existing employment requirements, even in the light of the business situation then prevailing in the Philippines.

KCPI questioned the decision of the VA via petition for review before the CA. CA partially set aside the Resolution of the VA and ruled that KCPI may validly exercise its management prerogative and impose the requirement on recommendees. Only UKCEU moved for a partial reconsideration of CA Decision. CA denied the MR. hence this instant petition. ISSUE: WON the CA erred in ruling that, under Article XX, Section 1 of the CBA, respondent is required to hire only those recommendees of retired/resigned, deceased or disabled members of petitioner who had completed at least a two-year technical/vocational course or a thirdyear level of college education. RULING: The court ruled against the petitioner. An arbitrator is confined to the interpretation and application of the collective bargaining agreement. He does not sit to dispense his own brand of industrial justice: his award is legitimate only in so far as it draws its essence from the CBA. A CBA is more than a contract. It covers the whole employment relationship and prescribes the rights and duties of the parties. It is a system of industrial selfgovernment with the grievance machinery at the very heart of the system. The parties solve their problems by molding a system of private law for all the problems which may arise and to provide for their solution in a way which will generally accord with the variant needs and desires of the parties. If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. But, if, in a CBA, the parties stipulate that the hirees must be presumed of employment qualification standards but fail to state such qualification standards in said CBA, the VA may resort to evidence extrinsic of the CBA to determine the full agreement intended by the parties. Gaps may be left to be filled in by reference to the practices of the industry, and the step which is equally a part of the CBA although not expressed in it. In order to ascertain the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. VA may also consider and rely upon negotiating and contractual history of the parties, evidence of past practices interpreting ambiguous provisions. The VA has to examine such practices to determine the scope of their agreement, as where the provision of the CBA has been loosely formulated. CBA must be construed liberally 2

rather than narrowly and technically and the Court must place a practical and realistic construction upon it. In the present case, the parties are in agreement that, on its face, Article XX, Section 1 of their 1997 CBA does not contain any provision relative to the employment qualification standards of recommendees of retired/resigned, deceased or disabled employees of respondent who are members of petitioner. However, in determining the employment qualification standards for said recommendees, the VA should have relied on the Guidelines issued by respondent. By executing the 1997 CBA, in its present form, petitioner is bound by the terms and conditions therein set forth. The VA, however, ignored the plain language of the 1997 CBA of the parties, as well as the Guidelines issued by respondent. He capriciously based his resolution on the respondent’s practice of hiring. The Court has recognized the undoubted right of the employer to regulate, according to his own discretion and best judgment, all aspects of employment, including but not limited to, work assignments and supervision, working methods and regulations, time, place and manner of work, processes to be followed, and hiring, supervision, transfer, discipline, lay off, dismissal and recall of workers. But the exercise of this right is not absolute. Management prerogative must be exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws, valid agreements such as the individual contract of employment and the CBA, and general principles of justice and fair play. In this case, the Court finds that respondent acted in accord with the CBA and the Guidelines, which, by agreement of the parties, may be implemented by respondent.

HOLY CROSS OF DAVAO COLLEGE VS HOLY CROSS OF DAVAO FACULTY UNION-KAMAPI (book page 497: no digest)

(SMTFM) was the certified collective bargaining representative of all regular rank and file employees of private respondent Top Form Manufacturing Philippines, Inc  On February 27, 1990, A the collective bargaining negotiation was held.  The parties agreed to discuss unresolved economic issues. According to the minutes of the meeting, Article VII of the collective bargaining agreement was discussed.

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In the minutes of the meeting, across the board wage increase was tackled but it was not stated anymore in the CBA since the union dropped such proposals relying to the undertakings made by the officials of the company

 As expected, the union requested the implementation of said wage orders. However, they demanded that the increase be on an across-the-board basis. 

Private respondent refused to accede to that demand. Instead, it implemented a scheme of increases purportedly to avoid wage distortion, thus the issue of this case

Issues: (1) whether or not private respondent committed an unfair labor practice in its refusal to grant across-theboard wage increases in implementing Wage Orders Nos. 01 and 02, which was stated in the minutes of the meeting on their discussions on February 27, 1990?\ (2) whether or not an employer committed an unfair labor practice by bargaining in bad faith and discriminating against its employees? (3) whether or not there was a significant wage distortion of the wage structure in private respondent as a result of the manner by which said wage orders were implemented? Held:

SAMAHAN NG MANGGAGAWA NG TOP FORM VS NLRC Facts:  Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of the Philippines

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No. Since the across-the-board wage increase is not part of the CBA a. The petitioner’s main point that the Minutes of the collective bargaining negotiation meeting forms part of the entire agreement is pointless, it 3

could only be demandable in law if incorporated in the CBA, but in this case it was not. b. The Minutes only reflects the proceedings and discussions undertaken in the process of bargaining for worker benefits in the same way that the minutes of court proceedings show what transpired therein. c. If indeed private respondent promised to continue with the practice of granting across-theboard salary increases ordered by the government, such promise could only be demandable in law if incorporated in the CBA. d. Moreover, petitioner union had the right and the opportunity to insist on the foreseeable fulfillment of the private respondent's promise by demanding its incorporation in the CBA but they did not. i. Because the proposal was never embodied in the CBA, the promise has remained just that, a promise, the implementation of which cannot be validly demanded under the law. 2

No. With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. This is not a case where private respondent exhibited an indifferent attitude towards collective bargaining because the negotiations were not the unilateral activity of petitioner union. The CBA is proof enough that private respondent exerted "reasonable effort at good faith bargaining." a. Moreover, private respondent may not be considered in bad faith since As earlier said, petitioner union had, under the law, the right and the opportunity to insist on the foreseeable fulfillment of the private respondent's promise by demanding its incorporation in the CBA. Because the proposal was never embodied in the CBA, the promise has remained just that, a promise, the implementation of which cannot be validly demanded under the law. b.

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Since it is a question of fact, the NLRC has the jurisdiction. As such, the factual findings of the NLRC are generally accorded not only respect but also finality provided that its decisions are supported by substantial evidence and devoid of any taint of unfairness or arbitrariness. a. the NLRC Decision in this case which was penned by the dissenter in that case, Presiding Commissioner Edna Bonto-Perez, unanimously ruled that no wage distortions marred private respondents implementation of the wage orders. i. On the issue of wage distortion, there was a meaningful implementation of Wage Orders Nos. 01 and 02. This debunks the claim that there was wage distortion as could be shown by the itemized wages implementation quoted above. It should be noted that the itemization has not been successfully traversed by the appellants ii. the petitioners contention on the issue of wage distortion and the resulting allegation of discrimination against the private respondents employees are anchored on its dubious position that private respondents promise to grant an across-the-board increase in governmentmandated salary benefits reflected in the Minutes of the negotiation is an enforceable part of the CBA.

Disposition: The Supreme Court denied the petition and affirmed the decision of the NLRC

SUNDOWNER DEVT CORP VS DRILON FACTS: Hotel Mabuhay leased the premises belonging to Syjuco. However, due to non-payment of rentals, a case for ejectment was filed and Hotel Mabuhay offered to amicably settle by surrendering the premises and to sell its assets and property to any interested party, to which Syjuco acceded. HELD: The absorption of the employees of Hotel Mabuhay may not be imposed on Sundowner, who has no liability whatsoever to the employees of Hotel Mabuhay and its responsibility if at all, is only to consider them for re-employment in the operation of the business in the same premises. There can be no implied acceptance of the employees of Hotel Mabuhay by petitioner as it is 4

expressly provided in the agreement that petitioner has no commitment or duty to absorb them. The rule is that unless expressly assumed. labor contracts such as employment contracts and CBAs are not enforceable against a transferee of an enterprise, labor contracts being IN PERSONAM, thus, binding only between the parties. A labor contract merely creates an action in personam and does not create an real right which should be respected by third parties. This conclusion draws its force from the right of an employer to select his employees and to decide when to engage them as protected under our Constitution and the same can only be restricted by law through the exercise of police power. As a general rule, there is no law requiring a bona fide purchaser of assets of an on-going concern to absorb in its employ the employees of the latter. However, although the purchaser is not legally bound to absorb in its employ the employees of the seller, the parties are liable to the employees if the transaction between is clothed with bad faith.

SANYO PHILS UNION VS CANIZARES FACTS: PSSLU had an existing CBA with Sanyo. The CBA contained a union security clause. PSSLU wrote Sanyo that the private respondents/employees were notified that their membership with PSSLU were cancelled for anti-union, activities, economic sabotage, threats, coercion and intimidation, disloyalty and for joining another union called KAMAO. In accordance with the security clause of the CBA, Sanyo dismissed the employees. The dismissed employees filed a complaint with the NLRC for illegal dismissal. Named respondent were PSSLU and Sanyo. PSSLU filed a motion to dismiss the complaint alleging that the Labor Arbiter was without jurisdiction over the case, relying on Article 217 (c) of the Labor Code which provides that cases arising from the interpretation or implementation of the CBA shall be disposed of by the labor arbiter by referring the same to the grievance machinery and voluntary arbitration. Nevertheless, the Labor Arbiter assumed jurisdiction. Public respondent through the Sol Gen, argued that the case at bar does not involve an "interpretation or implementation" of a collective bargaining agreement or "interpretation or enforcement" of company policies but involves a "termination." Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up in the

CBA or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter. ISSUE: Whether or not the Labor Arbiter has jurisdiction over the case. HELD: We hold that the Labor Arbiter and not the Grievance Machinery provided for in the CBA has the jurisdiction to hear and decide the case. While it appears that the dismissal of the private respondents was made upon the recommendation of PSSLU pursuant to the union security clause provided in the CBA, We are of the opinion that these facts do not come within the phrase "grievances arising from the interpretation or implementation of (their) Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies," the jurisdiction of which pertains to the Grievance Machinery or thereafter, to a voluntary arbitrator or panel of voluntary arbitrators. No grievance between them exists which could be brought to a grievance machinery. The problem or dispute in the present case is between the union and the company on the one hand and some union and non-union members who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot be expected to be impartial against the dismissed employees. Due process demands that the dismissed workers grievances be ventilated before an impartial body. Since there has already been an actual termination, the matter falls within the jurisdiction of the Labor Arbiter.

MANEJA VS NLRC Facts: Maneja worked for Manila Midtown Hotel as a telephone operator. She was also a member of the Union (NUWHRAIN) with a CBA. A fellow telephone operator named Lelong received a Request for Long Distance Call (RLDC) and a deposit from a guest named Hiota Ieda. The call was unanswered and the P500 deposit was forwarded to the cashier. Ieda made a second call and second P500 deposit but the call was also unanswered. Loleng passed on the RLDC to Maneja for follow up. Maneja monitored the call. A hotel cashier after inquired about the P1000 deposit made by Ieda. After a search, Loleng found the first deposit in the guest folio and the second in the folder for cancelled calls.

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Finding that the second call was stamped with the wrong date, Maneja changed it from Feb. 15 to Feb 13, 1990. Loleng then delivered the RLDC and money to the cashier. The chief telephone operator issued a memorandum directing Maneja and Loleng to explain the incident and recommended they be subject to disciplinary action for forging falsifying official documents and culpable carelessness for failure to follow specific instruction or established procedure. Maneja was served with a notice of dismissal, and wrote instead “under protest”. Petitioner filed for illegal dismissal before the labor arbiter, who held that petitioner was illegally dismissed, however he held that the complaint was on its face within the juridical ambit of the grievance procedure under the CBA and if unresolved one for proper voluntary arbitration. The Hotel appealed on the ground of lack of jurisdiction as the case should have been filed with the proper grievance procedure or voluntary arbitration. The NLRC affirmed the decision. Petitioner’s MR was denied, hence this petition for certiorari arise. Issues: 1. WON the LA had jurisdiction over the illegal dismissal case. 2. Was there illegal dismissal? Held: 1. Termination cases fall under the original and exclusive jurisdiction of the Labor Arbiter as contemplated in LC 217, but it should be read in conjunction with LC 261 which grants to voluntary arbitrators original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation of CBA or of enforcement of personnel policies. In the Sanyo case, the Sol. Gen. argued that a distinction should be made between interpreting the CBA and enforcing personnel policies and a termination case. Dismissal does not involve CBA or personnel policy. Where the dispute is just in interpretation, they could resort to the grievance mechanism, but when there was actual termination, it was already cognizable by the Labor Arbiter. In this case, there has been an actual termination. The LA does have jurisdiction under LC 217, otherwise an employee who was on AWOL or committed offenses would no longer be able to file illegal dismissal cases because the discharge would be premised on the interpretation enforcement of company policies. The

Hotel also voluntarily submitted to the jurisdiction of the tribunal. 2. Yes. Given the factual circumstances there was no dishonesty. The money was all eventually found and the date was a correction, not falsification. There was also no hearing, merely a request for written explanation.

SIME DARBY VS MAGSALIN Facts: On 13 June 1989, petitioner Sime Darby and private respondent Sime Darby Employees Association (SDEA) executed a Collective Bargaining Agreement (CBA) providing, among others, that: Article X, Section 1. A performance bonus shall be granted, the amount of which [is] to be determined by the Company depending on the return of [sic] capital investment as reflected in the annual financial statement. On 27 July 1989, private respondent SDEA filed with the National Conciliation and Mediation Board (NCMB) an urgent request for preventive conciliation between private respondent and petitioner, for the reason that petitioner failed to grant the performance bonus corresponding to the fiscal year 1988-1989, on the ground that the workers' performance during said period did not justify the award of such bonus. On 1 August 1989, the parties were called to a conciliation meeting and in such meeting, both parties agreed to submit their dispute to voluntary arbitration. On 17 August 1989, the Voluntary Arbitrator issued an award which declared respondent union entitled to a performance bonus equivalent to 75% of the monthly basic pay of its members. Issues: (1.) whether or not the Voluntary Arbitrator acted with grave abuse of discretion or without or in excess of jurisdiction in passing upon both the question of whether or not a performance bonus is to be granted by petitioner Sime Darby to the private respondents and the further question of the amount thereof. (2.) whether or not the award by the Arbitrator of a performance bonus amounting to seventy five percent (75%) of the basic monthly salary of members of private respondent union itself 6

constituted a grave abuse of discretion or an act without or in excess of jurisdiction.

Sime Darby's employees by referring in his award to "the total labor cost incurred by the Company".

I. It is thus essential to stress that the Voluntary Arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The Arbitrator, as already indicated, viewed his authority as embracing not merely the determination of the abstract question of whether or not a performance bonus was to be granted but also, in the affirmative case, the amount thereof. Without doubt, the Sime Darby Employees Association is entitled to performance bonus. This conclusion arises from an analysis of the imperative terms of the CBA provision on production bonus.

COCA COLA BOTTLERS PHILS ETC VS COCA COLA (JULY 28, 2005)

II. The award by the Arbitrator of a performance bonus amounting to seventy five percent (75%) of the basic monthly salary of members of private respondent union itself does not constitute a grave abuse of discretion or an act without or in excess of jurisdiction. The award of a Voluntary Arbitrator is final and executory after ten (10) calendar days from receipt of the award by the parties. The Labor Code and its Implementing Rules thus clearly reflect the important public policy of encouraging recourse to voluntary arbitration and of shortening the arbitration process by rendering the arbitral award nonappealable to the NLRC.

1. Christmas Bonus

Held:

The CBA provision refers to the return on investment of the company (ROI). Among those factors would be the cost of production, the quality of the products, the cost of money, the debt-equity ratio, the cost of sales, the level of taxes due and payable, the gross revenues realized, and so forth. The Voluntary Arbitrator explicitly considered the net earnings of petitioner Sime Darby in 1988 (P 100,000,000.00) and in the first semester of 1989 (P 95,377,507.00) as well as the increase in the company's retained earnings from P 265,729,826.00 in 1988 to P 324, 370,372.00 as of 30 June 1989. Thus, the Arbitrator impliedly or indirectly took into account the return on stockholders' investment realized for the fiscal year 19881989. It should also be noted that the relevant CBA provision does not specify a minimum rate of return on investment (ROI) which must be realized before any particular amount of bonus may or should be declared by the company. The Voluntary Arbitrator also took into account, again in an indirect manner, the performance of

FACTS In January 1989, the Coca-Cola Bottlers Philippines, Inc. Sales Force Union-PTGWO (UNION) filed a Notice of Strike with the National Conciliation and Mediation Board raising certain issues for conciliation. As a result of said dispute, the UNION staged a strike. Subsequently, the Board succeeded in making the parties agree to a voluntary settlement of the case via a Memorandum of Agreement signed by them on February 9, 1989. Among others, the petitioner and the respondent agreed, as follows:

The Company shall grant to all those covered by the Bargaining Unit represented by the Union an amount equivalent to fifty (50%) percent of their average commission for the last six (6) months. The union hereby acknowledges that the granting of a Christmas bonus is purely a Management prerogative and as such, in determining the amount thereof the same is solely a discretion of Management. The parties however agree that henceforth whenever Management exercises this prerogative, the same shall include the average commission for the last six (6) months prior to the grant. Since then, the management granted to each covered employee every December of the year a certain percentage of his basic pay and an amount equivalent to fifty (50%) percent of his average commission for the last six months prior to the grant. However, in December 1999, the respondent granted a fixed amount of P4,000.00 only, eliminating thereby the said 50% employee’s average commission for the last six months for members of the union. Thus, claiming the same as violation of the MOA, the union submitted its grievance to the respondent. No settlement was reached, hence, the case was then referred to a Panel of Voluntary Arbitrators. The Union asseverates that the grant of the additional 50% of the average commission has become a practice since 1989 and has ripened into a contractual obligation. On the other hand, the respondent company countered that in 1999 it suffered its worst financial performance in its history; that its sales volume was twenty percent (20%) 7

behind plan and ten percent (10%) below the sales in 1998, as a result, it suffered an abnormal loss of Two Billion Five Hundred Million Pesos (P2,500,000,000.00); that faced with tremendous losses, the management decided not to grant bonuses to its employees in 1999; that through Memorandum 99010 dated December 14, 1999, its President, Mr. Peter Baker explained to the employees the company’s financial situation and the decision not to grant bonuses; that in the same memo however, the company granted a special ex gratia payment of Four Thousand Pesos (P4,000.00) to all its permanent employees. After hearing and the submission of evidence and position papers, the Arbitration Panel composed of Apron Mangabat and Noel Sanchez, as chairman and member, respectively, denied petitioner’s claim and declared that the P4,000.00 given as ex gratia is not a bonus, while Arnel Dolendo, another member dissented. A copy of this Decision dated 21 January 2001 was received by petitioner’s counsel on 20 February 2001. It was only signed by the Chairman of the Panel, Mr. Apron Mangabat, and one of its members, Atty. Noel Sanchez and not by Atty. Arnel Dolendo. Petitioners claim that because “the Panel’s decision without such dissenting and separate opinion attached thereto makes the decision incomplete and prematurely issued.” On 12 March 2001, petitioner filed a motion for reconsideration of the 21 January 2001 Decision.On 30 May 2001, the Panel denied petitioner’s motion for reconsideration. A copy of the Order of denial was received by petitioner on 09 July 2001. By virtue thereof, petitioner filed a Petition for Review before the Court of Appeals on 24 July 2001. The Court of Appeals ruled that the the P4,000.00 “special ex gratia” payment is a Christmas bonus, hence, petitioner’s members are entitled to the additional 50% average commission but dismissed the petition on the ground that petitioner’s motion for reconsideration dated 12 March 2001 of the Decision of the Panel that was originally received on 20 February 2001 was filed out of time; hence, the said Decision already became final and executory after ten (10) calendar days from receipt of the copy of the Decision by the parties pursuant to Article 262-A of the Labor Code. ISSUE Whether or not the Court of Appeals committed a reversible error when it dismissed the petition on mere

technicality contrary to settled jurisprudence, after favorably ruling on the merits in favor of petitioner. HELD The resolution of the present controversy hinges for the most part on the correct disposition of petitioner’s argument that the Panel’s Decision sans the dissenting opinion of one of its members was irregularly issued; hence, did not toll the running of the prescriptive period within which to file a motion for reconsideration. To sustain petitioner’s argument would mean that the subject Decision could still be reviewed by the Court of Appeals. A contrary resolution would stamp the subject decision with finality rendering it impervious to review pursuant to the doctrine of finality of judgments. Rule VII, Section 1 of the “Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings” provides the key. Therein, what constitutes the voluntary arbitrator’s decision is defined with precision, to wit: Section 1. Decision Award. -- The final arbitral disposition of issue/s submitted to voluntary arbitration is the Decision. The disposition may take the form of a dismissal of a claim or grant of specific remedy, either by way of prohibition of particular acts or specific performance of particular acts. In the latter case the decision is called an Award. In herein case, the Decision of the Panel was in the form of a dismissal of petitioner’s complaint. Naturally, this dismissal was contained in the main decision and not in the dissenting opinion. Thus, under Section 6, Rule VII of the same guidelines implementing Article 262-A of the Labor Code, this Decision, as a matter of course, would become final and executory after ten (10) calendar days from receipt of copies of the decision by the parties even without receipt of the dissenting opinion unless, in the meantime, a motion for reconsideration or a petition for review to the Court of Appeals under Rule 43 of the Rules of Court is filed within the same 10-day period. As correctly pointed out by the Court of Appeals, a dissenting opinion is not binding on the parties as it is a mere expression of the individual view of the dissenting member from the conclusion held by the majority of the Court, following our ruling in Garcia v. Perez as reiterated in National Union of Workers in Hotels, Restaurants and Allied Industries v. NLRC. Prescinding from the foregoing, the Court of Appeals correctly dismissed the petition before it as it no longer had any appellate jurisdiction to alter or nullify the

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decision of the Panel. The Panel’s Decision had become final and executory, hence, unchallengeable.

ALCATEL VS RELOS FACTS: Complainant Rene R. Relos field a complaint for illegal dismissal with monetary claims against defendant Alcatel Philippines. Previously, complainant was repeatedly rehired in various capacities (estimator/draftsman, civil works inspector, civil engineer, etc.) for several projects of defendant from January 1988 to December 1993 (with different periods, from 1 to 11 months). On 31 December 1995, complainant’s last contract terminated. In March 1997, he instituted the labor case claiming that he was illegally dismissed as he was a regular employee. “Alcatel argues that respondent was a project employee because he worked on distinct projects with the terms of engagement and the specific project made known to him at the time of the engagement. Alcatel clarifies that [complainant’s] employment was coterminous with the project for which he was hired and, therefore, [complainant] was not illegally dismissed but was validly dismissed upon the expiration of the term of his project employment. Alcatel explains that its business relies mainly on the projects it enters into and thus, it is constrained to hire project employees to meet the demands of specific projects. “On the other hand, [complainant] insists that he is a regular employee because he was assigned by Alcatel on its various projects since 4 January 1988 performing functions desirable or necessary to Alcatel’s business. [Complainant] adds that his employment contracts were renewed successively by Alcatel for seven years. [Complainant] contends that, even assuming that he was a project employee, he became a regular employee because he was re-hired every termination of his employment contract and he performed functions necessary to Alcatel’s business. [Complainant] also claims that he was illegally dismissed because he was dismissed during the existence of the project.” HELD: Defendant was not liable; complainant was a project employee.“The principal test for determining whether a particular employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee is engaged for the project. ‘Project’ may refer

to a particular job or undertaking that is within the regular or usual business of the employer, but which is distinct and separate and identifiable as such from the undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. The complainant was a project employee. “The specific projects for which respondent was hired and the periods of employment were specified in his employment contracts. The services he rendered, the duration and scope of each employment are clear indications that respondent was hired as a project employee. While complainant was continuously rehired by Alcatel and he “performed tasks that were clearly vital, necessary and indispensable to the usual business or trade of Alcatel, respondent was not continuously rehired by Alcatel after the cessation of every project. Records show that respondent was hired by Alcatel from 1988 to 1995 for three projects, namely the PLDT X-5 project, the PLDT X-4 IOT project and the PLDT 1342 project. On 30 April 1988, upon the expiration of respondent’s contract for the PLDT X-4 IOT project, Alcatel did not rehire respondent until 1 February 1991, or after a lapse of 33 months, for the PLDT 1342 project. Alcatel’s continuous rehiring of respondent in various capacities from February 1991 to December 1995 was done entirely within the framework of one and the same project ― the PLDT 1342 project. This did not make [complainant] a regular employee of Alcatel as respondent was not continuously rehired after the cessation of a project. [Complainant] remained a project employee of Alcatel working on the PLDT 1342 project. “The employment of a project employee ends on the date specified in the employment contract. Therefore, respondent was not illegally dismissed but his employment terminated upon the expiration of his employment contract…” (Emphasis supplied.) Best Legal Practices: Stipulate clearly the paramaters for project or fixed-period employment – In order to avoid doubts on the status of an employee, the employment contract should clearly stipulate the terms and conditions for the project employment. In particular, the project should be clearly specified. Refrain from continuous rehiring of the same project employee – While project employment is valid, a continuous rehiring of the same project employee who performs work that is vital, necessary and indispensable to the usual business or trade of the employer, may result 9

in the latter becoming a regular employee by operation of law.

BRENT VS ZAMORA FACTS: Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc. at a yearly compensation of P20,000.00. The contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the same terms and conditions, including the expiry date, as those contained in the original contract of July 18, 1971. On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration of the definite period of employment." Although protesting the announced termination stating that his services were necessary and desirable in the usual business of his employer, and his employment lasted for 5 years - therefore he had acquired the status of regular employee - Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for the period May 16, to July 17, 1976 as full payment of contract." The Regional Director considered Brent School's report as an application for clearance to terminate employment (not a report of termination), and accepting the recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority rights and with full back wages. ISSUE: Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or employment for a term. RULING: Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement. The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet been

promulgated. At that time, the validity of term employment was impliedly recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Prior, thereto, it was the Code of Commerce (Article 302) which governed employment without a fixed period, and also implicitly acknowledged the propriety of employment with a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and became effective on August 30,1950, itself deals with obligations with a period. No prohibition against term-or fixed-period employment is contained in any of its articles or is otherwise deducible therefrom. It is plain then that when the employment contract was signed between Brent School and Alegre, it was perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly recognized as valid by this Court. The status of legitimacy continued to be enjoyed by fixedperiod employment contracts under the Labor Code (PD 442), which went into effect on November 1, 1974. The Code contained explicit references to fixed period employment, or employment with a fixed or definite period. Nevertheless, obscuration of the principle of licitness of term employment began to take place at about this time. Article 320 originally stated that the "termination of employment of probationary employees and those employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may prescribe." Article 321 prescribed the just causes for which an employer could terminate "an employment without a definite period." And Article 319 undertook to define "employment without a fixed period" in the following manner: …where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment were amended by Presidential Decree No. 850, effective December 16, 1975.

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Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the reference to persons "employed with a fixed period," and was renumbered (becoming Article 271).

services effective. In any case, such clearance should properly have been given, not denied.

As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to which the lack of a fixed period would be an anomaly, but would also appear to restrict, without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of employer's using it as a means to prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the head.

PUREFOODS CORP VS NLRC (DEC 12, 1997)

Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of employment as still good rule—a rule reaffirmed in the recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher being served by her school a notice of termination following the expiration of the last of three successive fixed-term employment contracts, the Court held: Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was probationary, contractual in nature, and one with a definitive period. At the expiration of the period stipulated in the contract, her appointment was deemed terminated and the letter informing her of the non-renewal of her contract is not a condition sine qua non before Reyes may be deemed to have ceased in the employ of petitioner UST. The notice is a mere reminder that Reyes' contract of employment was due to expire and that the contract would no longer be renewed. It is not a letter of termination. Paraphrasing Escudero, respondent Alegre's employment was terminated upon the expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The advance written advice given the Department of Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a letter of termination, nor an application for clearance to terminate which needed the approval of the Department of Labor to make the termination of his

FACTS: The private respondents were hired by petitioner Pure Foods to work for a fixed period of five months at its tuna cannery plant in General Santos City. After the expiration of their respective contracts of employment, their services were terminated. They forthwith executed a "Release and Quitclaim" stating that they had no claim whatsoever against the petitioner. Private respondents then filed before the NLRC-SubRAB a complaint for illegal dismissal against the petitioner. The Labor Arbiter dismissed the complaint on the ground that the private respondents were mere contractual workers, and not regular employees; hence, they could not avail of the law on security of tenure. The termination of their services by reason of the expiration of their contracts of employment was, therefore, justified. The private respondents appealed the decision to the NLRC which affirmed the LA’s decision. However, on private respondents' motion for reconsideration, the NLRC rendered another decision holding that the private respondent and their co-complainants were regular employees. It declared that the contract of employment for five months was a "clandestine scheme employed by the petitioner to stifle private respondents' right to security of tenure" and should therefore be struck down and disregarded for being contrary to law, public policy, and morals. Hence, their dismissal on account of the expiration of their respective contracts was illegal. Its motion for reconsideration having been denied, the petitioner came to this Court contending that respondent NLRC committed grave abuse of discretion amounting to lack of jurisdiction in reversing the decision of the Labor Arbiter. ISSUE: Whether or not private respondents are regular employees of petitioner company or mere contractual employees. HELD: The SC held that the petition devoid of merit. Under Art. 280, there are two kinds of regular employees are (1) those who are engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous 11

or broken, with respect to the activity in which they are employed. In the instant case, the private respondents' activities consisted in the receiving, skinning, loining, packing, and casing-up of tuna fish which were then exported by the petitioner. Indisputably, they were performing activities which were necessary and desirable in petitioner's business or trade. Contrary to petitioner's submission, the private respondents could not be regarded as having been hired for a specific project or undertaking. The term "specific project or undertaking" under Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or such type of work which is not done on a daily basis but only for a specific duration of time or until completion; the services employed are then necessary and desirable in the employer's usual business only for the period of time it takes to complete the project. The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that performed by those whose contracts had expired negates petitioner's contention that those workers were hired for a specific project or undertaking only. Although, this Court has upheld the legality of fixed-term employment, none of the criteria had been met in the present case. It could not be supposed that private respondents and all other so-called "casual" workers of the petitioner KNOWINGLY and VOLUNTARILY agreed to the 5-month employment contract. Cannery workers are never on equal terms with their employers. Almost always, they agree to any terms of an employment contract just to get employed considering that it is difficult to find work given their ordinary qualifications. Their freedom to contract is empty and hollow because theirs is the freedom to starve if they refuse to work as casual or contractual workers. Indeed, to the unemployed, security of tenure has no value. It could not then be said that petitioner and private respondents "dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. The petitioner does not deny or rebut private respondents' averments (1) that the main bulk of its workforce consisted of its so-called "casual" employees; (2) that as of July 1991, "casual" workers numbered 1,835; and regular employee, 263; (3) that the company hired "casual" every month for the duration of five months, after which their services were terminated and they were replaced by other "casual" employees on the same fivemonth duration; and (4) that these "casual" employees

were actually doing work that were necessary and desirable in petitioner's usual business. This scheme of the petitioner was apparently designed to prevent the private respondents and the other "casual" employees from attaining the status of a regular employee. It was a clear circumvention of the employees' right to security of tenure and to other benefits like minimum wage, cost-ofliving allowance, sick leave, holiday pay, and 13th month pay. Indeed, the petitioner succeeded in evading the application of labor laws. Also, it saved itself from the trouble or burden of establishing a just cause for terminating employees by the simple expedient of refusing to renew the employment contracts. The five-month period specified in private respondents' employment contracts having been imposed precisely to circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or disregarded as contrary to public policy or morals. To uphold the contractual arrangement between the petitioner and the private respondents would, in effect, permit the former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating the employees' security of tenure in their jobs.

BUISER ET AL VS HON VICENTE LEOGARDO JR AND GENERAL TELEPHONE DIRECTORY FACTS: Petitioners Iluminada Buiser, Ma. Cecilia Rilloacuña, and Ma. Mercedes Intengan all entered into an eighteen-month probationary employment contract with private respondent General Telephone Directory Company (GTPD), as sales representatives charged with soliciting advertisements to include in the telephone directories. All petitioners were terminated after the provisionary period (May 1981), on the ground of failing to meet their sales quotas that were set by respondent company. In response to their termination, petitioners filed before the NCR Ministry of Labor of and Employment a complaint for illegal dismissal with claims for backwages. However, the petition was denied in a decision by the Regional Director and the same was affirmed by herein respondent Deputy Minister of Labor Vicente Leogardo, ruling that (a) they have not attained regular status; (b) the stipulated probationary period was valid; and (c), that the termination was valid because they have not reached their required sales quotas set by the GTPD.

12

Petitioners filed before the Supreme Court a petition for certiorari, contending that respondent Deputy Minister Leogardo committed grave abuse of discretion in rendering the decision in favor of the private respondent and that as provided for by the Labor Code, probationary period cannot exceed 6 months, therefore the probationary period of GTPD was illegal.



On March 3, 2005, Alcaraz received an e-mail from the HR Director explaining the procedure for evaluating the performance of probationary employees and further indicated that Abbott had only one evaluation system for all of its employees. Alcaraz was also given copies of Abbott’s Code of Conduct and Probationary Performance Standards and Evaluation and Performance Excellence Orientation Modules which she had to apply in line with her task of evaluating the Hospira ALSU staff.



On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action on the staff’s performance evaluation as their probationary periods were about to end. This Alcaraz eventually submitted.

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On May 16, 2005, Alcaraz was called to a meeting with her immediate supervisor and the former HR Director where she was informed that she failed to meet the regularization standards for the position of Regulatory Affairs Manager. Thereafter she was asked to tender her resignation, else they be forced to terminate her services.



She filed a case of illegal dismissal against Abott and its officers.

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Labor Arbiter dismissed her complaint for lack of merit.

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NLRC reversed and set aside the LA’s ruling and ordered Abott to reinstate and pay Alcaraz moral and exemplary damages.



CA affirmed NLRC decision.

ISSUE: Whether or not the stipulated eighteen month probationary period is violative of the Labor Code. HELD: The Supreme Court rejects the petitioner’s contentions. While the Labor Code, specifically Article 282, provides that probationary periods cannot exceed 6 months, it still allows the both employer and employee to stipulate the terms of the employment, provided that they can come into agreement. Given that both petitioner and private respondent came into agreement (by signing and agreeing) that the 18 month probationary period is the law between them, petitioners cannot impugn this by invoking the provision of the Labor Code in their favor. Additionally, the grounds for their dismissal were just, because it was proven in the records that they did in fact failed to meet their sales quotas set by private respondent GTPD in the employment contract. Hence, petition is dismissed for lack of merit.

ABBOT VS ALCARAZ FACTS: 

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

On June 27, 2004, Abbott Laboratories, Philippines published in major broadsheet that it is in need of Medical and Regulatory Affairs Manager stating therein the responsibilities and qualifications of said position. On December 7, 2004, Abbott formally offered Alcaraz the abovementioned position which was an item under the company’s Hospira Affiliate Local Surveillance Unit (ALSU) department. On February 12, 2005, Alcaraz signed an employment contract which stated, inter alia, that she was to be placed on probation for a period of six (6) months beginning February 15, 2005 to August 14, 2005. She underwent pre-employment orientation where she was briefed on her duties and responsibilities.

ISSUE(S): (1) Whether or not Alcaraz was sufficiently informed of the reasonable standards to qualify her as a regular employee; and (2) Whether or not Alcaraz was validly terminated from her employment. HELD: (1) Yes, Alcaraz was sufficiently informed of the reasonable standards. The employer is made to comply with two (2) requirements when dealing with a probationary employee: first, the employer must communicate the regularization standards to the probationary employee; and second, the employer must make such communication at the time of the probationary employee’s engagement. 13

If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee. A punctilious (detailed) examination of the records reveals that Abbott had indeed complied with the abovestated requirements. This conclusion is largely impelled by the fact that Abbott clearly conveyed to Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to, during the time of her engagement, and the incipient stages of her employment. (2) A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with the reasonable standards made known by the employer to the employee at the time of the engagement. A different procedure is applied when terminating a probationary employee; the usual two-notice rule does not govern. Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that "if the termination is brought about by the failure of an employee to meet the standards of the employer in case of probationary employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the effective date of termination." As the records show, Alcaraz's dismissal was effected through a letter dated May 19, 2005 which she received on May 23, 2005 and again on May 27, 2005. Stated therein were the reasons for her termination, i.e., that after proper evaluation, Abbott determined that she failed to meet the reasonable standards for her regularization considering her lack of time and people management and decision-making skills, which are necessary in the performance of her functions as Regulatory Affairs Manager. Undeniably, this written notice sufficiently meets the criteria set forth above, thereby legitimizing the cause and manner of Alcaraz’s dismissal as a probationary employee under the parameters set by the Labor Code.

MARAGUINOT VS NLRC Facts: Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part of the filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate their request that their salary be adjusted in accordance with the minimum wage law. On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would agree to their request only if they sign a blank employment contract. Petitioners refused to sign such document. After which, the Mr. Enero was forced to go on leave on the same month and refused to take him back when he reported for work. Mr. Maraguinot on the other hand was dropped from the payroll but was returned days after. He was again asked to sign a blank employment contract but when he refused, he was terminated. Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The private respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA PRODUCTIONS, INC. and that it was primarily engaged in the distribution & exhibition of movies- but not then making of movies; (b) That they hire contractors called “producers” who act as independent contractors as that of Vic Del Rosario; and (c) As such, there is no employee-employer relation between petitioners and private respondents. The Labor Arbiter held that the complainants are employees of the private respondents. That the producers are not independent contractor but should be considered as labor-only contractors and as such act as mere agent of the real employer. Thus, the said employees are illegally dismissed. The private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter declaring that the complainants were project employees due to the ff. reasons: (a) Complainants were hired for specific movie projects and their employment was co-terminus with each movie project; (b)The work is dependent on the availability of projects. As a result, the total working hours logged extremely varied; (c) The extremely irregular working days and hours of complainants work explains the lump sum payment for their service; and (d) The respondents alleged that the complainants are not prohibited from working with other movie companies whenever they are not working for the independent movie producers engaged by the respondents. 14

A motion for reconsideration was filed by the complainants but was denied by NLRC. In effect, they filed an instant petition claiming that NLRC committed a grave abuse of discretion in: (a) Finding that petitioners were project employees; (b) Ruling that petitioners were not illegally dismissed; and (c) Reversing the decision of the Labor Arbiter. In the instant case, the petitioners allege that the NLRC acted in total disregard of evidence material or decisive of the controversy. Issues: (a) W/N there exist an employee- employer relationship between the petitioners and the private respondents. (b) W/N the private respondents are engaged in the business of making movies.

method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof. The said producer has a fix time frame and budget to make the movies. b. The contractor should have substantial capital and materials necessary to conduct his business. The said producer, Del Rosario, does not have his own tools, equipment, machinery, work premises and other materials to make motion pictures. Such materials were provided by VIVA. It can be said that the producers are labor-only contractors. Under Article 106 of the Labor Code (reworded) where the contractor does not have the requisites as that of the job contractors.

(c) W/N the producer is a job contractor.

SOSITO VS AGUINALDO DEVT

Held: There exist an employee- employer relationship between the petitioners and the private respondents because of the ff. reasons that nowhere in the appointment slip does it appear that it was the producer who hired the crew members. Moreover, it was VIVA’s corporate name appearing on heading of the slip. It can likewise be said that it was VIVA who paid for the petitioners’ salaries.

Facts: Petitioner Manuel Sosito filed for an indefinite leave from the company on January 16, 1976. Months later, the company underwent a retrenchment program but offered separation pay to those who had been in the active service as of June 30, 1976 and had tendered their resignation not later than July 31, 1976. Petitioner, to avail of the benefits, submitted his resignation. The company denied him the benefits.

Respondents also admit that the petitioners were part of a work pool wherein they attained the status of regular employees because of the ff. requisites: (a) There is a continuous rehiring of project employees even after cessation of a project; (b) The tasks performed by the alleged “project employees” are vital, necessary and indispensable to the usual business or trade of the employer; and (c) However, the length of time which the employees are continually re-hired is not controlling but merely serves as a badge of regular employment. Since the producer and the crew members are employees of VIVA and that these employees’ works deal with the making of movies. It can be said that VIVA is engaged of making movies and not on the mere distribution of such. The producer is not a job contractor because of the ff. reasons: (Sec. Rule VII, Book III of the Omnibus Rules Implementing the Labor Code.)

Issue: Whether or not petitioner was entitled to the benefits? Held: The Court held that the petitioner was not qualified to avail of the benefits because at the time he submitted his resignation, he was not in the active service, having been on voluntary indefinite leave. The petitioner cannot just do as he please to the detriment of the company. The Court expressed that labor disputes aren’t necessarily immediately tipped in favor of labor. The Management also has its own rights, which must also be afforded the same protection as that of labor. The Court held “that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.”

TIU VS PLATINUM DEVT (none)

a. A contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and 15