Labstan Kisses.docx

Brotherhood Labor Unity Movement of the Phil. v. Zamora

Facts: The petitioners are workers who have been employed at the San Miguel Parola Glass Factory as “pahinantes” or “kargadors” for almost seven years. They worked exclusively at the SMC plant, never having been assigned to other companies or departments of San Miguel Corp, even when the volume of work was at its minimum. Their work was neither regular nor continuous, depending on the volume of bottles to be loaded and unloaded, as well as the business activity of the company. However, work exceeded the eight-hour day and sometimes, necessitated work on Sundays and holidays. -for this, they were neither paid overtime nor compensation. Sometime in 1969, the workers organized and affiliated themselves with Brotherhood Labor Unity Movement (BLUM). They wanted to be paid to overtime and holiday pay. They pressed the SMC management to hear their grievances. BLUM filed a notice of strike with the Bureau of Labor Relations in connection with the dismissal of some of its members. San Miguel refused to bargain with the union alleging that the workers are not their employees but the employees of an independent labor contracting firm, Guaranteed Labor Contractor. The workers were then dismissed from their jobs and denied entrance to the glass factory despite their regularly reporting for work. A complaint was filed for illegal dismissal and unfair labor practices.

Issue: Whether or not there was employer-employee (ER-EE)relationship between the workers and San Miguel Corp.

Held: YES. In determining if there is an existence of the (ER-EE) relationship, the four-fold test was used by the Supreme Court. These are: ·

The selection and engagement of the employee

·

Payment of wages

·

Power of dismissal

· Control Test- the employer’s power to control the employee with respect to the means and methods by which work is to be accomplished In the case, the records fail to show that San Miguel entered into mere oral agreements of employment with the workers. Considering the length of time that the petitioners have worked 1|Page

with the company, there is justification to conclude that they were engaged to perform activities necessary in the usual business or trade. Despite past shutdowns of the glass plant, the workers promptly returned to their jobs. The term of the petitioner’s employment appears indefinite and the continuity and habituality of the petitioner’s work bolsters the claim of an employee status. As for the payment of the workers’ wages, the contention that the independent contractors were paid a lump sum representing only the salaries the workers where entitled to have no merit. The amount paid by San Miguel to the contracting firm is no business expense or capital outlay of the latter. What the contractor receives is a percentage from the total earnings of all the workers plus an additional amount from the earnings of each individual worker. The power of dismissal by the employer was evident when the petitioners had already been refused entry to the premises. It is apparent that the closure of the warehouse was a ploy to get rid of the petitioners, who were then agitating the company for reforms and benefits. The inter-office memoranda submitted in evidence prove the company’s control over the workers. That San Miguel has the power to recommend penalties or dismissal is the strongest indication of the company’s right of control over the workers as direct employer.

*SC ordered San Miguel to reinstate the petitioners with 3 years backwages.

Domasig v NLRC (96)

It has long been established that in administrative and quasi-judicial proceedings, substantial evidence is sufficient as a basis for judgment on the existence of employer-employee relationship. No particular form of evidence is required to prove the existence of such.

EDDIE DOMASIG, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), CATA GARMENTS CORPORATION and/or OTTO ONG and CATALINA CO, respondents. DECISION PADILLA, J.:

This petition for certiorari under Rule 65 of the Rules of Court seeks to nullify and set aside the Resolution[1] of respondent National Labor Relations Commission (NLRC) rendered on 20 September 1994 remanding the records of the case to the arbitration branch of origin for further proceedings.

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The antecedent facts as narrated by public respondent in the assailed resolution are as follows:

The complaint was instituted by Eddie Domasig against respondents Cata Garments Corporation, a company engaged in garments business and its owner/manager Otto Ong and Catalina Co for illegal dismissal, unpaid commission and other monetary claim[s]. Complainant alleged that he started working with the respondent on July 6, 1986 as Salesman when the company was still named Cato Garments Corporation; that three (3) years ago, because of a complaint against respondent by its workers, it changed its name to Cata Garments Corporation; and that on August 29, 1992, he was dismissed when respondent learned that he was being pirated by a rival corporation which offer he refused. Prior to his dismissal, complainant alleged that he was receiving a salary of P1,500.00 a month plus commission. On September 3, 1992 he filed the instant complaint.

Respondent denied complainants claim that he is a regular employee contending that he is a mere commission agent who receives a commission of P5.00 per piece of article sold at regular price and P2.50 per piece sold in [sic] bargain price; that in addition to commission, complainant received a fixed allowance of P1,500.00 a month; that he had no regular time schedule; and that the company come [sic] into existence only on September 17, 1991. In support of its claim that complainant is a commission agent, respondent submitted as Annexes B and B-1 the List of Sales Collections, Computation of Commission due, expenses incurred, cash advances received for the month of January and March 1992 (Rollo pp. 22-27). Respondent further contends that complainant failed to turn over to the respondent his collection from two (2) buyers as per affidavit executed by these buyers (Rollo pp. 28-29) and for which, according to respondent it initiated criminal proceedings against the complainant.

The Labor Arbiter held that complainant was illegally dismissed and entitled to reinstatement and backwages as well as underpayment of salary; 13th month pay; service incentive leave and legal holiday. The Arbiter also awarded complainant his claim for unpaid commission in the amount of P143,955.00.[2]

Private respondents appealed the decision of the labor arbiter to public respondent. As aforesaid, the NLRC resolved to remand the case to the labor arbiter for further proceeding. It declared as follows:

We find the decision of the Labor Arbiter not supported by evidence on record. The issue of whether or not complainant was a commission agent was not fully resolved in the assailed 3|Page

decision. It appears that the Labor Arbiter failed to appreciate the evidences submitted by respondent as Annexes B and B-1 (Rollo pp. 22-27) in support of its allegation as regard[s] the nature of complainants employment. Neither is there a showing that the parties were required to adduce further evidence to support their respective claim. The resolution of the nature of complainants employment is vital to the case at bar considering that it would be determinative to his entitlement of monetary benefits. The same is similarly true as regard the claim [sic] for unpaid commission. The amount being claim [sic] for unpaid commission as big as it is requires substantial proof to establish the entitlement of the complainant to the same. We take note of the respondents claim that while they admit that complainant has an unpaid commission due him, the same is only for his additional sale of 4,027 pieces at regular price and 1,047 pieces at bargain price for a total sum of (P20,135.00 + 2,655.00) or P22,820.00 as appearing in the list of Sales and unpaid commission (Annex C and C-1' Appeal, Rollo pp. 100-102). Said amount according to respondent is being withheld by them pending the accounting of money collected by complainant from his two (2) buyers which was not remitted to them. Considering the conflicting version of the parties regarding the issues on hand, it was incumbent on the Labor Arbiter to conduct further proceedings thereon. The ends of justice would better be served if both parties are given the opportunity to ventilate further their positions.[3]

In their comment on the petition at bar, private respondents agree with the finding of the NLRC that the nature of petitioners employment with private respondents is vital to the case as it will determine the monetary benefits to which he is entitled. They further aver that the evidence presented upon which the labor arbiter based her decision is insufficient, so that the NLRC did not commit grave abuse of discretion in remanding the case to the arbitration branch of origin for further proceedings.

The comment of the Solicitor General is substantially the same as that of private respondents, i.e., there is no sufficient evidence to prove employer-employee relationship between the parties. Furthermore, he avers that the order of the NLRC to the labor arbiter for further proceedings does not automatically translate to a protracted trial on the merits for such can be faithfully complied with through the submission of additional documents or pleadings only.

The only issue to be resolved in this petition is whether or not the NLRC gravely abused its discretion in vacating and setting aside the decision of the labor arbiter and remanding the case to the arbitration branch of origin for further proceedings.

In essence, respondent NLRC was not convinced that the evidence presented by the petitioner, consisting of the identification card issued to him by private respondent corporation and the cash vouchers reflecting his monthly salaries covering the months stated therein, settled the issue of employer-employee relationship between private respondents and petitioner. 4|Page

It has long been established that in administrative and quasi-judicial proceedings, substantial evidence is sufficient as a basis for judgment on the existence of employer-employee relationship. No particular form of evidence is required to prove the existence of such employeremployee relationship. Any competent and relevant evidence to prove the relationship may be admitted.[4]

Substantial evidence has been defined to be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, and its absence is not shown by stressing that there is contrary evidence on record, direct or circumstantial, for the appellate court cannot substitute its own judgment or criterion for that of the trial court in determining wherein lies the weight of evidence or what evidence is entitled to belief.[5]

In a business establishment, an identification card is usually provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it. Together with the cash vouchers covering petitioners salaries for the months stated therein, we agree with the labor arbiter that these matters constitute substantial evidence adequate to support a conclusion that petitioner was indeed an employee of private respondent.

Section 4, Rule V of the Rules of Procedure of the National Labor Relations Commission provides thus:

Section 4. Determination of Necessity of Hearing. Immediately after the submission of the parties of their position papers/memoranda, the Labor Arbiter shall motu propio determine whether there is need for a formal trial or hearing. At this stage, he may, at his discretion and for the purpose of making such determination, ask clarificatory questions to further elicit facts or information, including but not limited to the subpoena of relevant documentary evidence, if any, from any party or witness.

It is clear from the law that it is the arbiters who are authorized to determine whether or not there is a necessity for conducting formal hearings in cases brought before them for adjudication. Such determination is entitled to great respect in the absence of arbitrariness.[6]

In the case at bar, we do not believe that the labor arbiter acted arbitrarily. Contrary to the finding of the NLRC, her decision at least on the existence of an employer-employee relationship between private respondents and petitioner, is supported by substantial evidence on record. 5|Page

The list of sales collection including computation of commissions due, expenses incurred and cash advances received (Exhibits B and B-1) which, according to public respondent, the labor arbiter failed to appreciate in support of private respondents allegation as regards the nature of petitioners employment as a commission agent, cannot overcome the evidence of the ID card and salary vouchers presented by petitioner which private respondents have not denied. The list presented by private respondents would even support petitioners allegation that, aside from a monthly salary of P1,500.00, he also received commissions for his work as a salesman of private respondents.

Having been in the employ of private respondents continuously for more than one year, under the law, petitioner is considered a regular employee. Proof beyond reasonable doubt is not required as a basis for judgment on the legality of an employers dismissal of an employee, nor even preponderance of evidence for that matter, substantial evidence being sufficient.[7] Petitioners contention that private respondents terminated his employment due to their suspicion that he was being enticed by another firm to work for it was not refuted by private respondents. The labor arbiters conclusion that petitioners dismissal is therefore illegal, is not necessarily arbitrary or erroneous. It is entitled to great weight and respect.

It was error and grave abuse of discretion for the NLRC to remand the case for further proceedings to determine whether or not petitioner was private respondents employee. This would only prolong the final disposition of the complaint. It is stressed that, in labor cases, simplification of procedures, without regard to technicalities and without sacrificing the fundamental requisites of due process, is mandated to ensure the speedy administration of justice.[8]

After all, Article 218 of the Labor Code grants the Commission and the labor arbiter broad powers, including issuance of subpoena, requiring the attendance and testimony of witnesses or the production of such documentary evidence as may be material to a just determination of the matter under investigation.

Additionally, the National Labor Relations Commission and the labor arbiter have authority under the Labor Code to decide a case based on the position papers and documents submitted without resorting to the technical rules of evidence.[9]

However, in view of the need for further and correct computation of the petitioners commissions in the light of the exhibits presented and the dismissal of the criminal cases filed against 6|Page

petitioner, the labor arbiter is required to undertake a new computation of the commissions to which petitioner may be entitled, within thirty (30) days from submission by the parties of all necessary documents.

WHEREFORE, the resolutions of the public respondent dated 20 September 1994 and 9 November 1994 are SET ASIDE. The decision of the labor arbiter dated 19 May 1993 is REINSTATED and AFFIRMED subject to the modification above-stated as regards a recomputation by the labor arbiter of the commissions to which petitioner maybe actually entitled.

SO ORDERED.

Bellosillo, Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.

GREAT PACIFIC LIFE ASSURANCE CORPORATION vs. HONORATO JUDICO and NLRC [G.R. No. 73887 December 21, 1989]

Q. Are insurance agents considered as regular employees?

Facts:

1. On June 09, 1976, Great Pacific Life Assurance Corporation (Grepalife, for brevity) entered into an agreement of agency with Honorato Judico to become a debit agent to the industrial life agency.

Debit agent-an insurance agent selling/servicing industrial life plans and policy holders.

Industrial life plans-are those whose premiums are payable either daily, weekly or monthly and which are collectible b the debit agents at the home or any place designated by the policy holder.

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2. As a debit agent, Judico had definite work assignments including but not limited to collections of premiums from policy holders and selling insurance to prospective clients.

3. Judico was initially paid P200.00 as allowance for thirteen (13) weeks regardless of production and later a certain percentage denominated as “sales reserve” of his total collections but not lesser than P200.00.

3. In September 1981, he was promoted to the position of Zone Supervisor and paid additional (supervisor’s) allowance fixed at P110,00 per week. However, two months thereafter, he was reverted to his former position as debit agent, but, for unknown reasons, not paid so-called weekly sales reserve of at least P200.00. Finally, on June 28, 1982, he was dismissed by way of termination of his agency contract.

4. Contentions of the petitioner.

a. Judico’s compensation was not based on any fixed number of hours but was based on actual production.

b. Judico’s compensation, in the form of commissions and bonuses, cannot be construed as salary, but as a subsidy or way of assistance for transportation and meal expenses of a new debit agent during the initial period of his training which was fixed for thirteen (13) weeks.

4. Contentions of the respondent.

a. adopted by SC in its ruling.

6. Ruling of the Labor Arbiter (LA) – In favor of Grepalife

a. The LA dismissed the complaint on the ground that no employer-employee relationship exist.

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7. Ruling of the NLRC - In favor of Honorato Judico

a. It ruled that Judico is a regular employee as defined under Article 281 of the Labor Code.

¬¬¬¬¬¬¬Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

9. Not convinced, the matter was elevated to the Supreme Court.

Issue: Whether or not: (1) the debit agent is considered as regular employee; and (2) the dismissal was valid.

Ruling of the Supreme Court:

Salaried employees vs. Registered representatives

1. In Investment Planning Corp. vs. SSS, 21 SCRA 294, an insurance agent may have two classes of agents who sell its insurance policies.

a. Salaried employees – who keep definite hours and work under the control and supervision of the company.

b. Registered representatives – who works on a commission basis.

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•

These agents are not required to report for work anytime;

• They do not have to devote their time exclusively to or work exclusively for the company since the time and effort they spend in their work depend entirely upon their own will and initiative; •

They are not required to account for their time nor submit a report of their activities;

•

They shoulder their own selling and transportation expenses; and

•

They are paid their commission based on a certain percentage of their sales.

Element of control

2. The test is whether the “employer” controls or has reserved the right to control the “employee” not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished.

3. In this case, the element of control is evident.

•

The element of control by the petitioner on Judico was very much present.

• The record shows that petitioner Judico received a definite minimum amount per week as his wage known as "sales reserve" wherein the failure to maintain the same would bring him back to a beginner's employment with a fixed weekly wage of P 200.00 for thirteen weeks regardless of production. • He was assigned a definite place in the office to work on when he is not in the field; and in addition to his canvassing work he was burdened with the job of collection. • In both cases he was required to make regular report to the company regarding these duties, and for which an anemic performance would mean a dismissal. • Conversely faithful and productive service earned him a promotion to Zone Supervisor with additional supervisor's allowance, a definite amount of P110.00 aside from the regular P 200.00 weekly "allowance". • Furthermore, his contract of services with petitioner is not for a piece of work nor for a definite period.

Ordinary commission insurance agent in brief.

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4. An ordinary commission agent works at his own volition or at his own leisure without fear of dismissal from the company and short of committing acts detrimental to the business interest of the company or against the latter, whether he produces or not is of no moment as his salary is based on his production, his anemic performance or even dead result does not become a ground for dismissal.

DISPOSITIVE PORTION

1. The appealed decision of AFFIRMED in toto

Citizen’s League of Free Workers et.al. vs Abbas et.al. GR No. 21212, September 23, 1966 Doctrine: There is an employer-employee relationship between theoperator of an auto- alesa !is-"-!is the #ri!ers thereof.

FACTS:

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Respondents-spouses, owners and operators of auto-calesas filed acomplaint with the CFI of Davao to restrain the Union and its members, who were drivers of the spouses in said business, from interfering with its operationand to recover damages. They alleged that the defendants (petitioners herein) used to lease theauto-calesas of the spouses on a daily rental basis; that, unable to get thespouses to recognize said defendants as employees instead of lessees and to bargain with it on that basis, the Union declared a strike and since then hadparalyzed plaintiffs' business operations through threats, intimidation and violence. The complaint also prayed for the issuance of a writ of preliminaryinjunction ex-parte which was granted by the respondent judge.

Meanwhile, petitioners filed a complaint for unfair labor practice againstthe respondents-spouses with the CIR for failure of the latter's refusal to bargain with them. They also filed a motion to declare the writ of preliminaryinjunction void, however, the respondent judge denied said motion on theground that there was no employer-employee relationship betweenrespondents-spouses and the individual petitioners herein and that,consequently, the Rules of Court and not Republic Act No. 875 applied to thematter of injunction. ISSUE: Whether there exists an employer-employee relationship between theoperator of the auto-calesa vis-à-vis the drivers thereof; hence, the respondent judge in the civil case has no jurisdiction to issue the writ of preliminaryinjunction. HELD: The Supreme court ruled in the AFFIRMATIVE.

In one case 1 the Court held that a driver of a jeep who operates the sameunder the boundary system is considered an employee within the meaning ofthe law and as such the case comes under the jurisdiction of the CIR. It washeld that: "The only features that would make the relationship of lessor andlessee between the respondent, owner of the jeeps, and the drivers,members of the petitioner union, are the fact that he does not pay themany fixed wage but their compensation is the excess of the total amount of fares earned or collected by them over and above the amount of P7.50which they agreed to pay to the respondent, and the fact that the gasolineburned by the jeeps is for the account of the drivers. 12 | P a g e

These two featuresare not, however, sufficient to withdraw the relationship, between them from that of employer-employee, because the estimated earnings for faresmust be over and above the amount they agreed to pay to the respondent for a ten-hour shift or ten-hour a day operation of the jeeps. Not having anyinterest in the business because they did not invest anything in theacquisition of the jeeps and did not participate in the management thereof,their service as drivers of the jeeps being their only contribution to thebusiness, the relationship of lessor and lessee cannot be sustained." There was a labor dispute between the parties from the beginning.Moreover, upon the filing of the unfair labor practice case, the Court ofIndustrial Relations acquired complete jurisdiction over the labor dispute andthe least that could be done in Civil Case is either to dismiss it or suspendproceedings therein until the final resolution of the former. Judgment is rendered setting aside the writ of preliminary injunction.

256 Phil. 1182

GANCAYCO, J.:

Is there an employer-employee relationship between a security agency and its security guards? Is the so-called "floating status" of a security guard lawful and could such prolonged status amount to illegal dismissal? These are the issues raised in this petition for certiorari and prohibition with preliminary injunction questioning the prohibition resolution dated January 29, 1988 of public respondent National Labor Relations Commission (NLRC) affirming the decision of public respondent labor arbiter Bienvenido V. Hermogenes dated March 19, 1987 finding private respondents to have been illegally dismissed and ordering petitioner to pay them separation pay of one-half (1/2) month salary for every year of service, 13th month pay for the year 1986 and the money value of their respective service incentive leave amounting to fifteen (15) days salary each with allowances. The petition also assails the resolution of the respondent NLRC dated April 18, 1988 denying the motion for reconsideration filed by petitioner.

Private respondents, numbering forty-six (46) in all, worked as security guards and/or janitors under individual contracts with petitioner. They were assigned to firms and offices where petitioner had contracts providing security and janitorial services. Their service period and last rates of salary are stated in the decision of the labor arbiter.[1] Their individual contracts of employment provide, among others, as follows:

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"3.d. That the security guard, agrees to temporary suspension of his employment completely to include such changes in his employment status with the Agency, in case of termination of contract between the Agency and its Client, or reduction in force of same;" In the early part of 1986, petitioner's service contracts with various corporations and government agencies to which private respondents were previously assigned had been terminated generally due to the sequestration of the said offices by the Presidential Commission on Good Government. Accordingly, many of the private respondents were placed on "floating status" on September 16, 1986. A number of them had been put on that status even earlier. "Floating status" means an indefinite period of time when private respondents do not receive any salary or financial benefit provided by law. A number of them later obtained employment in other security agencies.

On account of the uncertainty of their employment with the petitioner, on July 25, 1986, private respondents filed a complaint for illegal dismissal in the Arbitration Branch of the Department of Labor and Employment against petitioner. They sought the payment of their respective separation pay, 13th month pay for 1986 and service incentive leave pay. After due proceedings where the parties were required to submit their position papers and stipulation of facts, the respondent labor arbiter ruled in favor of the private respondents whose decision as aboverelated was affirmed by the NLRC.

Hence, the herein petition alleging that the petitioner was denied due process of law by the NLRC and it committed a grave abuse of discretion in considering private respondents as employees of petitioner, in ruling that the "floating status" of private respondents amounted to an illegal dismissal, and in causing the execution of the judgment pending a complete and full adjudication of the issues.

Forthwith, the allegation of denial of due process is without basis. Petitioner was afforded the opportunity to file its position paper. It even entered into a stipulation of facts with private respondent.

As to the issue of employer-employee relationship, an examination of the records shows that private respondents are regular employees of petitioner. Their individual length of service ranges from four (4) to more than ten (10) years. In accordance with the stipulation of facts, it appears that private respondents worked with petitioner as security guards/janitors. Their employment contracts provide, among others:

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"1. That the AGENCY hereby undertakes to look for, procure, and/or furnish the services of the SECURITY GUARD, with any individual, business establishment, residential houses or any entity whatsoever, and the SECURITY GUARD agrees to supply his services, assignments, position and undertaking, subject to the following conditions: a) That the SECURITY GUARD upon acceptance of his position or undertaking for employment, shall observe, follow and obey all rules, regulations, code of conduct required by the AGENCY and any of its contracted client, in accordance with the provisions of RA 5487 and its implementing Rules and Regulations;

b) That the AGENCY shall pay the monthly SECURITY GUARD a monthly salary of P/day payable on the 5th and 20th of the month;

c) That the AGENCY shall have the exclusive right to withdraw or re-assign the SECURITY GUARD;

d) That the SECURITY GUARD, agrees to temporary suspension of his employment completely to include such changes in his employment status with the AGENCY, in case of termination of contract between the AGENCY and its client, or reduction in force same;

e) That the AGENCY may terminate or dismiss the SECURITY GUARD, if, after proper and due investigation it is shown that the SECURITY GUARD has violated any rule, regulation, code of conduct and discipline, imposed by the AGENCY;

f) That the terms and conditions pertinent to service and discipline embodied in the Agreement executed between the AGENCY and any person, establishment, or entity with whom the SECURITY GUARD is going to serve or is assigned shall be considered part of this Agreement and therefore binding on SECURITY GUARD."[2]

It was petitioner who determined how much private respondents received as their monthly salary, overtime/night differential pay, mid-year and Christmas bonus and 13th month pay, uniforms and meal allowances and other benefits mandated by law. Private respondents were reported by the petitioner as its employees for purposes of social security coverage. Petitioner remitted their withholding taxes to the Bureau of Internal Revenue and made monthly contributions to the PagIbig fund for their benefit. It was petitioner who determined and decided on the assignments, promotions and salary increases of private respondents, their working hours, the firearms to be issued to them and janitorial devices and tools to be used. Likewise, it was petitioner who 15 | P a g e

imposed the appropriate disciplinary measures on private respondents by way of reprimand, suspension and dismissal.

In determining the existence of an employee-employer relationship, the following elements are generally considered:

1) the selection and engagement of the employees; 2) payment of wages; 3) the power of dismissal; and 4) the power to control the employees' conduct.[3] It is clear, therefore, that private respondents are petitioner's regular employees who enjoy security of tenure and who cannot be dismissed except for cause.[4]

As to the alleged illegal dismissal of private respondents, the records show that they filed their complaint against petitioner on July 25, 1986. At the time they filed their complaint, most of them were still on the job or on assignments and it was only in September 1986 when most of them were placed on "floating status."

Obviously, the filing of the complaint was premature. Apparently, this issue was not raised at all and so it is deemed waived. Thus, when the labor arbiter rendered his decision, he considered those who have been out of work or "floating status" for a period exceeding six (6) months to have been terminated from the service without just cause thus entitling them to the corresponding benefits for such separation. We agree.

Under Article 286 of the Labor Code it is provided as follows:

"ART. 286. When employment not deemed terminated. - The bonafide suspension of the operation of a business or undertaking for a period not exceeding six months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one month from the resumption of operations of his employer or from his relief from the military or civic duty." From the foregoing it is clear that when the bonafide suspension of the operation of a business or undertaking exceeds six (6) months then the employment of the employee shall be deemed 16 | P a g e

terminated. By the same token and applying the said rule by analogy to security guards, if they remained without work or assignment, that is in "floating status" for a period exceeding six (6) months, then they are in effect constructively dismissed.

The labor arbiter disagreed with the representations of petitioner that the private respondents who accepted assignments in other security agencies without previously resigning should be considered to have been dismissed with just cause. In the stipulation of facts, the parties admitted that the disciplinary rules promulgated by petitioner for its employees provide that acceptance by an employee of other employment without first resigning from the agency is a cause for dismissal.

In this case, it appears that twenty-seven (27) of the private respondents violated this rule by accepting employment in other security agencies without previously resigning from employment with petitioner. No doubt, this is a just cause for termination of their services and as such they are not entitled to any separation pay.[5]

As regards the other seventeen (17) private respondents, they admittedly remained in "floating status" for more then six (6) months. Such a "floating status" is not unusual for security guards employed in security agencies as their assignments primarily depend on the contracts entered into by the agency with third parties. Such a stipulated status is, therefore, lawful.

The "floating status" of such an employee should last only for a reasonable time. In this case, respondent labor arbiter correctly held that when the "floating status" of said employees lasts for more than six (6) months, they may be considered to have been illegally dismissed from the service. Thus, they are entitled to the corresponding benefits for their separation.

WHEREFORE, the petition is GRANTED insofar as the twenty-seven (27) private respondents are concerned who have accepted employment elsewhere. The questioned resolutions of the NLRC dated January 29, 1988 and April 18, 1988 are hereby modified as to said twenty-seven (27) private respondents in that their complaint is hereby dismissed for lack of merit. The questioned resolutions are hereby affirmed in all other respects as to the other private respondents. No pronouncement as to costs.

SO ORDERED.

Reynaldo Bautista vs. Hon. Amado Inciong G.R. No. L-52824, March 16, 1988 17 | P a g e

FACTS:

Petitioner was employed by Associated Labor Unions(ALU) as organizer. Bautista went on leave and when he went back to work, he was informed that he was already terminated. The Director ruled in favor of Bautista. The Deputy Minister of Labor, however, set aside the order of the Director finding that his membership coverage with the SSS which shows that respondent ALU is the one paying the employer’s share in the premiums is not conclusive proof that respondent is the petitioner’s employer because such payments were performed by the respondent as a favor for all those who were performing full time union activities with it to entitle them to SSS benefits. He then ruled that there was no emplore-employee relationship between ALU and Bautista by the fact that ALU is not an entity for profit but a duly registered labor union whose sole purpose is the representation of its bonafide organization units.

ISSUE:

Whether or not there can be employer-employee relationship between a labor union and its member.

HELD:

Yes, the mere fact that the respondent is a labor union does not mean that it cannot be considered an employer of the persons who work for it.

Moreover, the four elements in determining the existence of an employer-employee relationship was present in the case at bar. The Regional Director correctly found that the petitioner was an employee of the respondent union as reflected in the latter’s individual payroll sheets and shown by the petitioner’s membership with the Social Security System (SSS) and the respondent union’s share of remittances in the petitioner’s favor. Bautista was selected and hired by the union. ALU had the power to dismiss him as indeed it dismissed him. And definitely, the Union tightly controlled the work of Bautista as one of its organizers.

G.R. No. L-53515

February 8, 1989

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SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO), petitioner, vs. HON. BLAS F. OPLE, as Minister of Labor and SAN MIGUEL CORPORATION, respondents.

Lorenzo F. Miravite for petitioner.

Isidro D. Amoroso for New San Miguel Corp. Sales Force Union.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

GRIÑO-AQUINO, J.:

This is a petition for review of the Order dated February 28, 1980 of the Minister of Labor in Labor Case No. AJML-069-79, approving the private respondent's marketing scheme, known as the "Complementary Distribution System" (CDS) and dismissing the petitioner labor union's complaint for unfair labor practice.

On April 17, 1978, a collective bargaining agreement (effective on May 1, 1978 until January 31, 1981) was entered into by petitioner San Miguel Corporation Sales Force Union (PTGWO), and the private respondent, San Miguel Corporation, Section 1, of Article IV of which provided as follows:

Art. IV, Section 1. Employees within the appropriate bargaining unit shall be entitled to a basic monthly compensation plus commission based on their respective sales. (p. 6, Annex A; p. 113, Rollo.)

In September 1979, the company introduced a marketing scheme known as the "Complementary Distribution System" (CDS) whereby its beer products were offered for sale directly to wholesalers through San Miguel's sales offices.

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The labor union (herein petitioner) filed a complaint for unfair labor practice in the Ministry of Labor, with a notice of strike on the ground that the CDS was contrary to the existing marketing scheme whereby the Route Salesmen were assigned specific territories within which to sell their stocks of beer, and wholesalers had to buy beer products from them, not from the company. It was alleged that the new marketing scheme violates Section 1, Article IV of the collective bargaining agreement because the introduction of the CDS would reduce the take-home pay of the salesmen and their truck helpers for the company would be unfairly competing with them.

The complaint filed by the petitioner against the respondent company raised two issues: (1) whether the CDS violates the collective bargaining agreement, and (2) whether it is an indirect way of busting the union.

In its order of February 28, 1980, the Minister of Labor found:

... We see nothing in the record as to suggest that the unilateral action of the employer in inaugurating the new sales scheme was designed to discourage union organization or diminish its influence, but rather it is undisputable that the establishment of such scheme was part of its overall plan to improve efficiency and economy and at the same time gain profit to the highest. While it may be admitted that the introduction of new sales plan somewhat disturbed the present set-up, the change however was too insignificant as to convince this Office to interpret that the innovation interferred with the worker's right to self-organization.

Petitioner's conjecture that the new plan will sow dissatisfaction from its ranks is already a prejudgment of the plan's viability and effectiveness. It is like saying that the plan will not work out to the workers' [benefit] and therefore management must adopt a new system of marketing. But what the petitioner failed to consider is the fact that corollary to the adoption of the assailed marketing technique is the effort of the company to compensate whatever loss the workers may suffer because of the new plan over and above than what has been provided in the collective bargaining agreement. To us, this is one indication that the action of the management is devoid of any anti-union hues. (pp. 24-25, Rollo.)

The dispositive part of the Minister's Order reads:

WHEREFORE, premises considered, the notice of strike filed by the petitioner, San Miguel Brewery Sales Force Union-PTGWO is hereby dismissed. Management however is hereby ordered to pay an additional three (3) months back adjustment commissions over and above the adjusted commission under the complementary distribution system. (p. 26, Rollo.) 20 | P a g e

The petition has no merit.

Public respondent was correct in holding that the CDS is a valid exercise of management prerogatives:

Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of work. ... (NLU vs. Insular La Yebana Co., 2 SCRA 924; Republic Savings Bank vs. CIR 21 SCRA 226, 235.) (Perfecto V. Hernandez, Labor Relations Law, 1985 Ed., p. 44.) (Emphasis ours.)

Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means designed towards that goal. In Abbott Laboratories vs. NLRC, 154 SCRA 713, We ruled:

... Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.

So long as a company's management prerogatives are 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 or under valid agreements, this Court will uphold them (LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18 SCRA 110). San Miguel Corporation's offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS by paying them a so-called "back adjustment commission" to make up for the commissions they might lose as a result of the CDS proves the company's good faith and lack of intention to bust their union.

WHEREFORE, the petition for certiorari is dismissed for lack of merit.

SO ORDERED.

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National Sugar Refineries Corp v. NLRC Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

G.R. No. 101761 March 24, 1993

NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.

Facts:

Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery.

In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. We glean from the records that for about ten years prior to the JE Program, the members of respondent union were treated in the same manner as rank-and file employees. As such, they used to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended.

With the implementation of the JE Program, members of respondent union were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits.

In May 1990, petitioner NASUREFCO recognized herein respondent union, which was organized pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own unions, as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery.

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In June 1990, the members of herein respondent union filed a complainant with the executive labor arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code.

In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages complained of.

On appeal, in a decision promulgated on July 1991, respondent National Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent union are not managerial employees, and, therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the evaluation, review and final action by their department heads.

Issue:

W/N the Supervisors are considered Managerial Employees and should no longer receive overtime, rest day and holiday pay.

Ruling:

Yes

Ratio:

"Art. 82 Coverage. — The provisions of this title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in Appropriate regulations.

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"As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff." (Emphasis supplied.)

It is the submission of petitioner that while the members of respondent union, as supervisors, may not be occupying managerial positions, they are clearly officers or members of the managerial staff because they meet all the conditions prescribed by law and, hence, they are not entitled to overtime, rest day.

Quintessentially, with the promotion of the union members, they are no longer entitled to the benefits which attach and pertain exclusively to their positions. Entitlement to the benefits provided for by law requires prior compliance with the conditions set forth therein. With the promotion of the members of respondent union, they occupied positions which no longer met the requirements imposed by law. Their assumption of these positions removed them from the coverage of the law, ergo, their exemption therefrom.

As correctly pointed out by petitioner, if the union members really wanted to continue receiving the benefits which attach to their former positions, there was nothing to prevent them from refusing to accept their promotions and their corresponding benefits. As the saying goes by, they could not, as a simple matter of law and fairness, get the best of both worlds at the expense of NASUREFCO.

Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management, provided it is done in good faith. In the case at bar, private respondent union has miserably failed to convince this Court that the petitioner acted implementing the JE Program. There is no showing that the JE Program was intended to circumvent the law and deprive the members of respondent union of the benefits they used to receive.

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Union of Filipino Employees v. Vivar Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

Union of Filipino Employees vs Vivar G..R. No. 79255 January 20, 1992

Excluded Employees: Field Personnel

Facts:

This labor dispute stems from the exclusion of sales personnel from the holiday pay award and the change of the divisor in the computation of benefits from 251 to 261 days.

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National Labor Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights and obligations respecting claims of its monthly paid employees for holiday pay in the light of the Court's decision in Chartered Bank Employees Association v. Ople (138 SCRA 273 [1985]).

Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator.

Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical representatives (hereinafter referred to as sales personnel) from the award of the holiday pay, and (3) deduction from the holiday pay award of overpayment for overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor. (Rollo, pp. 138-145)

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Petitioner UFE answered that the award should be made effective from the date of effectivity of the Labor Code, that their sales personnel are not field personnel and are therefore entitled to holiday pay, and that the use of 251 as divisor is an established employee benefit which cannot be diminished.

Issue:

W/N the respondent's sales personnel are not field personnel under Article 82 of the Labor Code?

Held:

The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on sales target; (2) good collection performance; (3) proper compliance with good market hygiene; (4) good merchandising work; (5) minimal market returns; and (6) proper truck maintenance. (Rollo, p. 190).

The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from October 23, 1984, the date of promulgation of the IBAA case.

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed from October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby AFFIRMED.

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San Miguel Brewer, Inc. vs. Democratic Labor Organization, et al.GR No. L-18353July 31. 1963EN BANC | Bautista, J. Prologue (Principle) : The Eight-Hour Labor Law only applies to employees who are paid on a monthly or daily basis.Employees who are paid on a piece-work basis are EXCLUDED. FACTS:Respondent Democratic Labor Assoc. filed a manifestation claiming for the following against petitioner SMB: overtime pay,night-shift differential pay, attorney’s fees. Separation pay, and sick and vacation leave compensation.- Judge Bautista ruled that those working outside the company’s premises are entitled to overtime compensation, hence, theEight-Hour Labor Law applies to them.- Petitioner filed for an M.R. before the CIR. It was deniedHENCE THE PETITIONIssue: Whether the Eight-Hour Labor Law applies to respondent workers. Held: NoRatio Decidendi: The Eight-Hour Labor Law only applies to an employee who is paid on a monthly or daily basis. This lawhas no application to employees paid on a piece-work basis. CIR is wrong to apply the law to the piece-work employees.According to a ruling by DOLE on Dec. 9, 1957, field sales personnel receiving monthly salaries (such as the respondents inthis case) are not subject to the Eight-Hour Labor Law (although they are paid on a monthly basis, their commission shall beconsidered as payment for extra time he renders in excess of 8 hours).Additional Issue: Are the claimants who are watchmen and security guards entitled to extra pay for work done on Sundaysand Holidays?COURT: They are entitled to such pay as per Comm. Act No. 444. They shall be entitled to + 25% of their regular salary.PETITION: GRANTED: Decision of the CIR, SET ASIDE.

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