people vs. quebral, 68 phil. 564 defined.

It is, therefore,
FACTS: The accused was incumbent upon the prosecution
charged with illegal practice of to prove that negative fact, and
medicine because he had failure to prove it is a ground for
diagnosed, treated and acquittal.
prescribed for certain diseases In the instant case, however, the
suffered by certain patients from decision rendered by the lower
whom he received monetary court makes mention of Exhibit
compensation, without having F-2 as showing that the accused
previously obtained the proper is not a registered physician.
certificate of registration from That document is signed by Jose
the Board of Medical Examiners, Ma. Delgado, chairman of the
as provided in Section 770 of Board of Medical Examiners,
the Administrative Code. wherein it is stated, in part, that
He appealed, and, in this court, "there is nothing in the records
he reiterates his contention that of this Board to show that Mr.
it is incumbent upon the Fernando C. Quebral is a
prosecution to prove that he registered physician." This
practiced medicine without the document is admissible as
proper certificate, and that there evidence of its contents, under
being no evidence to that effect, one of the exceptions to the
he should be acquitted. hearsay rule, regarding official
ISSUE: WON it is incumbent written statements. "The
upon the prosecution to prove certificate of a custodian that he
that negative fact, and, failure has diligently searched for a
proving it results in acquittal. document or an entry of a
HELD: Yes. Section 770 of the specified tenor and has been
Administrative Code provides unable to find it ought to be
that "no person shall practice usually as satisfactory for
medicine in the Philippine evidencing its non-existence in
Islands without having his office as his testimony on
previously obtained the proper the stand to this effect would
certificate of registration issued be." (3 Wigmore on Evidence, p.
by the Board of Medical 561.) Furthermore, Exhibit H-3 is
Examiners . . .." This provision also mentioned in the decision
clearly includes the want of of the lower court, which is a
certificate as an essential letter of the accused to the
element of the offense charged. President of the Philippines,
The negative fact is not quoting approvingly an article
separable from the offense as published in the Philippine
Herald, wherein it is said that administering anaesthesia.
Fernando Quebral is not a holder Pursuant to its findings, the NBI
of a doctor of medicine degree. recommended that Dr. Domingo
These Exhibits, F-2 and H-3, are Antonio and Dr. Erlinda Balatbat-
sufficient evidence to show that Reyes be charged for Homicide
the accused has been practicing through Reckless Imprudence
medicine without the required before the Office of the City
certificate of registration issued Prosecutor.
by the Board of Medical ISSUE: WON a physician-patient
Examiners. relationship was created
Judgment is affirmed, with costs between the victim and Drs.
against appellant. Antonio and Reyes.
HELD: Yes. A word on medical
GARCIA-RUEDA VS. PASCASIO, malpractice or negligence
G.R. NO. 118141, SEPTEMBER 5, cases.
1997 In its simplest terms, the type of
FACTS: Florencio V. Rueda, lawsuit which has been called
husband of petitioner Leonila medical malpractice or, more
Garcia-Rueda, underwent appropriately, medical
surgical operation at the UST negligence, is that type of claim
hospital for the removal of a which a victim has available to
stone blocking his ureter. He him or her to redress a wrong
was attended by Dr. Domingo committed by a medical
Antonio, Jr. who was the professional which has caused
surgeon, while Dr. Erlinda bodily harm.
Balatbat-Reyes was the In order to successfully pursue
anaesthesiologist. Six hours such a claim, a patient must
after the surgery, however, prove that a health care
Florencio died of complications provider, in most cases a
of unknown cause, according to physician, either failed to do
officials of the UST Hospital. something which a reasonably
Not satisfied with the findings of prudent health care provider
the hospital, petitioner would have done, or that he or
requested the National Bureau she did something that a
of Investigation (NBI) to conduct reasonably prudent provider
an autopsy on her husbands would not have done; and that
body. Consequently, the NBI that failure or action caused
ruled that Florencios death was injury to the patient.
due to lack of care by the Hence, there are four elements
attending physician in involved in medical negligence
cases: duty, breach, injury and the charge of res ipsa loquitur to
proximate causation. the plaintiff, have been applied
Evidently, when the victim in actions against
employed the services of Dr. anaesthesiologists to hold the
Antonio and Dr. Reyes, a defendant liable for the death or
physician-patient relationship injury of a patient under
was created. In accepting the excessive or improper
case, Dr. Antonio and Dr. Reyes anaesthesia. Essentially, it
in effect represented that, requires two-pronged evidence:
having the needed training and evidence as to the recognized
skill possessed by physicians standards of the medical
and surgeons practicing in the community in the particular kind
same field, they will employ of case, and a showing that the
such training, care and skill in physician in question
the treatment of their patients. negligently departed from this
They have a duty to use at least standard in his treatment.
the same level of care that any Another element in medical
other reasonably competent negligence cases is causation
doctor would use to treat a which is divided into two
condition under the same inquiries: whether the doctors
circumstances. The breach of actions in fact caused the harm
these professional duties of skill to the patient and whether
and care, or their improper these were the proximate cause
performance, by a physician of the patients injury. Indeed
surgeon whereby the patient is here, a causal connection is
injured in body or in health, discernible from the occurrence
constitutes actionable of the victims death after the
malpractice. Consequently, in negligent act of the
the event that any injury results anaesthesiologist in
to the patient from want of due administering the anesthesia, a
care or skill during the fact which, if confirmed, should
operation, the surgeons may be warrant the filing of the
held answerable in damages for appropriate criminal case. To be
negligence. sure, the allegation of
(Additional) negligence is not entirely
Moreover, in malpractice or baseless. Moreover, the NBI
negligence cases involving the deduced that the attending
administration of anaesthesia, surgeons did not conduct the
the necessity of expert necessary interview of the
testimony and the availability of patient prior to the operation. It
appears that the cause of the contended that chiropractic has
death of the victim could have nothing to do with medicine and
been averted had the proper that the practice of that
drug been applied to cope with profession can therefore not be
the symptoms of malignant regarded as practice of
hyperthermia. Also, we cannot medicine
ignore the fact that an antidote Issue: Whether or not Buenviaje
was readily available to is guilty of violating the medical
counteract whatever deleterious act
effect the anaesthesia might Held: Yes. The court held that
produce. Why these assuming without conceding
precautionary measures were that chiropractic does not fall
disregarded must be sufficiently within the term "practice of
explained. medicine" in its ordinary
The Court dismissed the acceptation, the statutory
petition. definition contained in section
acts: Defendant Buenviaje is 770 of the Administrative Code
accused of the violation of the clearly includes the
Medical Act. The defendant, manipulations employed in
without certificate from the chiropractic. Furthermore, the
Board of Medical Examiners subjects in which an
authorizing her to practice examination is required by
medicine in the Philippines, section 778 of the
treated and manipulated the Administrative Code, as
head and body of Regino Noble amended by Act No. 3111,
in order to cure him of ailments relate to matters of which a
from which he pretended to thorough knowledge seems
suffer. The treatment consisted necessary for the proper
in a `thrust' by means of the diagnosis of diseases of the
application of the hand to the human body and it is within the
spinal column and for such police power of the State to
treatment received and require that persons who devote
collected from said Noble the themselves to the curing of
sum of P1. Buenviaje also human ills should possess such
advertised herself as a `doctor knowledge.
of chiropractic,' said Defendant also is held guilty of
advertisement appearing upon the unauthorized use of the title
her business cards and in the "doctor", as it necessarily
newspaper with the abbreviation follows that a person holding
`Dra.' to her name. Defendant himself out as a doctor of
chiropractic in legal effect When a person is charged with
represents himself as a doctor of practicing medicine without a
medicine. license it is necessary to
People v Cole 113 N.E. 790 (NY examine the acts of the
1916) legislature to ascertain whether
Facts: Mr. Willis Vernon Cole, a the practices complained of are
Christian Scientist, was charged in violation of the statute law.
with the crime of practicing The Public Health Law of the
medicine without lawful state of New York states that
authorization and registration, "No Person shall practice
and the alleged unlawful medicine, unless registered and
practice of medicine occurred on legally authorized prior to
January 1911. At first he was September first, 1891, or unless
discharged by the jury, but licensed by the regents and
another trial with the same registered under article 8 of
court resulted in a verdict of chapters 661 of the laws of
guilty. The said verdict was 1893 and acts amendatory
appealed to the Appellate thereto, or unless licensed by
Division. the regents and registered as
Practicing medicine when required by this article. * * *"
unaccompanied by acts that are (Public Health Law, Section 161)
in themselves evil, vicious and "The practice of medicine is
criminal, is not a crime at defined as follows: A person
common law. Practicing practices medicine within the
medicine is not malum in se. It meaning of this article, except
is important in the interest of as herein stated, who holds
public health and public welfare himself out as being able to
that a person holding himself diagnose, treat, operate or
out as a physician or healer of prescribe for any human
diseases, should have the disease, pain, injury, deformity
education, training, skill and or physical condition, and who
knowledge adequate for such shall either offer or undertake,
purposes. Statutes designed to by any means or method, to
protect public health and diagnose, treat, operate or
general welfare by regulating prescribe for any human
the practice of medicine, in disease, pain, injury, deformity,
some part or all of the territory or physical condition." (Public
constituting this state, have Health Law, Section 160)
been enacted from time to time The statute also provides: "This
since 1760. article shall not be construed to
affect * * * the practice of the treatment costs $2 for the first
religious tenets of any church * treatment, and $1 for all
* *." (Public Health Law, Section subsequent treatments.
173.) During the treatment, Mr. Cole
Their Constitution provides: will raise his hands up to her
"The free exercise and face and remained in perfect
enjoyment of religious silence for 15-20 minutes. After
profession and worship, without such prayer, Mr. Cole told her
discrimination or preference, that will do for the day's
shall forever be allowed in this treatment and she was asked to
state to all mankind; * * * but come back on another day.
the liberty of conscience hereby She went back and told Mr. Cole
secured shall not be so that she have a pain in her
construed as to excuse acts of back, there was a porous plaster
licentiousness, or justify on her back at that time, she
practices inconsistent with the was asked by Mr. Cole to
peace or safety of this state." remove her plaster and have
(Constitution of the State of New more faith and understanding,
York, article 1, section 3.) also she must have courage;
The defendant was never that she should remove the
registered or licensed as a glasses. Mr. Cole even told her
practitioner of medicine. He is a that he can cure locomotor
member of the Christian Science ataxia thru prayer and having
church and a recognized faith in God.
practitioner within the rules of Mr. Cole says that patients that
that church. For about seven have given up by physicians
years he maintained an office in always turn to Christian Science
the city of New York. for help.
The witness testified that she She returned again and brought
seek help from Mr. Cole because her little girl with her who has a
she have read about him in the cold and also wears glasses,
newspaper, she said that she same treatment was made by
asked him to see if he could Mr. Cole.
cure her eyes, she was wearing The defendant during the
glasses for ten years. interviews stated to the witness
She also admitted that she was that she had as much power to
told that Mr. Cole does not give heal disease as he had, and
medicine and he treats through could do so as well if she would
prayers. Such treatment study the Bible and rely upon its
requires faith in God. The promises and offer the prayer of
understanding and faith. She alleged healing of moral, mental
understood him when he and physical diseases by prayer
asserted that he could cure was practiced by Christian
disease as saying that he could Scientists in New York for more
bring about the cure by means than twenty years.
of prayer to Almighty God. He Issue: WON faith healing is an
said to her that all diseases are unlawful practice of medicine
alike to a Christian Scientist. Held: No. It appears from the
He further testified that at the statute that we have quoted
first interview "I told her I could that a person practices medicine
not cure her, that I had no more when he "holds himself out as
power to cure her than any one being able to diagnose, treat,
else, that God was the only operate or prescribe for any
power, and the only healer. * * * human disease, pain, injury,
I told her that she could cure deformity or physical condition,
herself just as much as I could if and who shall either offer or
she would study and purify her undertake, by any means or
life and her thoughts and method, to diagnose, treat,
cleanse from her consciousness operate, or prescribe for any
fear and in harmony and false human disease, pain, injury,
thoughts. I told her that by deformity or physical condition."
studying and gaining an The language of the statute is
understanding that she could very general. It bears evidence
apply the principle and law of in itself that the words were
Christian Science as well as chosen for the express purpose
anyone else, as well as I could. * of prohibiting, except upon
* * I told her that I was nothing registration and authorization of
and that she was nothing, it was the practitioner, as by the
God." statute provided, every means
He testified that he was and method that could
practicing Christian Science as thereafter be used or claimed to
laid down by the church. He be used to relieve or cure
denied that he was practicing disease and infirmity by any
medicine. person individually, or as a
It was conceded on the trial that representative of a school,
Christian Science is a religion religious body or other
based upon the Scriptures and organization.
founded by Mary Baker Eddy in It does not appear that the
1866 and that the church has defendant attempted to
about a million members. The diagnose the diseases which the
investigator stated to him that person claims to be practicing
she had. There was no laying on the religious tenets of any
of hands, manipulation, church, particularly where
massage, or outward compensation is taken therefor
ceremonial. His direction to her and the practice is apart from a
to remove her glasses and take church edifice or the sanctity of
off a porous plaster which she the home of the applicant, the
asserted she had upon her back question whether such person is
were, as also asserted by him, within the exception should be
simply to bring about complete left to a jury as a question of
reliance by her upon the power fact.
and willingness of God to heal Judgment reversed, and a new
her diseases. trial was ordered to leave the
The exception in the statute is jury to decide WON such
not confined to worship or belief practice is just to cover a
but includes the practice of business undertaking.
religious tenets. If it was the IT IS INDEPENDENT FROM
intention of the legislature to OTHER CRIMES COMMITTED
relieve members of the Christian WITH IT
Science and other churches G.R. Nos. 78813-14 November
from the provisions of sections 8, 1993
160 and 161 of the Public Health PEOPLE vs. HATANI
Law to the extent of permitting SUMMARY: This is an appeal
them within the rules, from the RTC convicting
regulations and tenets of a appellant in two criminal cases.
church to maintain an office and In the first case, the Court found
there offer prayer for the the accused Farhad Hatani y
healing of the diseases of those Abolhassan, guilty of illegal
that might come to such church practice of medicine in violation
members for treatment, and the of R.A. 2382 otherwise known as
defendant has in good faith the Medical Act of 1959 (Secs. 8,
acted in accordance therewith, 10) penalized by Section 28
he is not guilty of the crime thereof. This Court further
alleged in the indictment. recommends that after service
Still, the court reiterated that A of his sentence the accused be
person should not be allowed to deported as undesirable alien.
assume to practice the tenets of In the second case, the Court
the Christian Science or any found the accused guilty of the
church as a shield to cover a crime of rape punishable under
business undertaking. When a Article 335 of the Revised Penal
Code and hereby sentenced said her on the chest and forced her
accused to suffer life to lie down. He pressed a pillow
imprisonment or reclusion on her face and injected her
perpetua; and to indemnify the again, causing her to fall asleep.
complainant, Precila Borja, in When Precila awoke the second
the sum of fifty thousand pesos time, she found appellant in bed
(P50,000.00) and to pay costs. with her. He was naked and
FACTS: Agustina Borjas 16-year fondling her private parts. The
old daughter, Precila, had high pain all over her body lingered.
fever and loose bowel When Precila touched her
movement. Upon learning that private parts, she saw blood
Precila was sick, Marita stains on her hand. She tried to
Fontreras introduced Agustina to stand up but she was too weak.
her husband, appellant herein, Appellant gave her another
whom she said was a medical injection rendering her
doctor. Appellant and Marita unconscious.
went to the Borja residence, The following morning, Agustina
where he examined Precila. It went to fetch Precila. Upon
was appellant's diagnosis that reaching the Fontreras'
Precila was a drug addict and residence, she went straight to
required further observation and the bedroom, where, to her
treatment. Appellant offered to great dismay, she found Precila
attend to Precila at his house and appellant both asleep and
and again, Agustina agreed in naked. She hurriedly dressed up
the belief that her daughter was Precila and brought her home.
a drug addict. When Precila woke up, she
In the evening of the same day, noticed she was already home
Precila was fetched by appellant and her mother was crying.
and Marita and was brought to Precila remained dizzy, with
appellant's house. Again, Precila throbbing pains all over her
was given an injection which body. When talked to, she was
caused her to sleep. When she incoherent.
awoke, she realized that she That evening, Precila's oldest
was naked and her entire body sister, Josefina, a nurse by
was in pain. Appellant was profession, came home and saw
seated on the bed and was Precila looking very weak. Her
fondling her private parts. mother, who was crying
Shocked, Precila called for her narrated what she had
mother and tried to get up. witnessed that morning. She
Appellant, however, punched also told Josefina that appellant
was in the other bedroom, the Medico-Legal Report.
treating another sister, Wilma Acting on the complaint filed
whom he also diagnosed as a before the Constabulary Anti-
drug addict. Josefina Narcotics Unit (CANU), a
immediately proceeded to the surveillance of appellant's
bedroom and saw appellant residence was conducted.
about to inject Wilma. Subsequently, a search warrant
Josefina saw the open bag of was secured from Judge Jose P.
appellant, which contained Castro of the RTC. Armed with
empty capsules of dalmane and the warrant, CANU agents
empty vials of valium. She raided appellant's residence.
inquired on the need of the After the preliminary
injection and appellant replied investigation, separate
that a second shot of plain informations for rape and
distilled water was required to violation of R.A. No. 2382 were
cure Wilma of her drug filed. Appellant pleaded not
addiction. Josefina told appellant guilty to both crimes.
to stop but he persisted. Only ISSUE: WON the crime of illegal
upon threat that she would call practice of medicine and rape
the police did appellant stop. should be filed separately
Appellant and his wife then left HELD: Yes. The RTC rendered
the Borja residence. two separate decisions and
The following day, Agustina and convicted the appellant of both
Josefina brought Precila and crimes. In finding appellant
Wilma to the Philippine guilty of illegal purchase of
Constabulary Headquarters medicine, considerable weight
where Josefina and Wilma gave was given to the prosecution's
their statements. Precila was exhibits.
physically examined by a The Professional Regulation
doctor, whose medical report Commission certified that
stated that Precila's hymen and appellant is not among the list
"deep, healing lacerations" and of registered physicians nor
that "subject is in non-virgin among those with special permit
state physically". Several needle to practice medicine in a limited
puncture marks were also found scope.
on Precila's arms and buttocks. Appellant failed to refute the
A physical examination was Handwriting Identification
likewise done on Wilma, which Report released by the PC Crime
showed that she too had a Laboratory showing that the
needle puncture, as shown in signature of Dr. Jesus D. Yap
prescribing medicine belonged PEOPLE vs. HATANI
to him. The pictures also taken SUMMARY: This is an appeal
during the raid undeniably from the RTC convicting
reveal several medical appellant in two criminal cases.
equipment used by practicing Our focus for this digest is the
physicians. first case wherein the Court
The evidence is overwhelming found the accused Farhad
that appellant actually treated Hatani y Abolhassan, guilty of
and diagnosed Precila and illegal practice of medicine in
Wilma Borja. The positive violation of R.A. 2382 otherwise
testimony of Agustina, Precila, known as the Medical Act of
Wilma and Josefina Borja; the 1959 (Secs. 8, 10) penalized by
medico-legal reports which Section 28 thereof. This Court
attest to the needle marks; the further recommends that after
Handwriting Identification service of his sentence the
Report; the photographs accused be deported as
showing assorted drugs and undesirable alien.
medical equipment in FACTS: The information charged
appellant's room; and the appellant with illegal practice of
chemistry reports prove that medicine, in violation of R.A. No.
appellant was engaged in the 2382, otherwise known as the
practice of medicine. And as to Medical Act of 1959, committed
his allegation that there was no as follows:
proof of payment, the law That on or about the 6th day of
specifically punishes said act July, 1979, in Quezon City,
whether or not done for a fee. Philippines the above named
Notwithstanding the RTCs accused, knowing fully well that
finding that there was no direct he has not satisfactorily passed
evidence of rape, it concluded the corresponding Board
that circumstantial evidence Examination, neither is he a
indicate that rape was holder of a valid Certificate of
consummated by appellant. Registration duly issued by the
Therefore, the appealed Board of Medical Examiners, as
decision was affirmed in toto by in fact he does not even appear
the Supreme Court. to have taken or completed the
course leading to a medical
ILLEGAL PRACTICE EXPLAINED degree, did, then and there,
IN COURT DECISIONS willfully, unlawfully and
G.R. Nos. 78813-14 November feloniously for compensation,
8, 1993 fee and salary, paid to him
directly, physically examined Appellant, however, punched
Priscila Borja Y Loquero and her on the chest and forced her
Wilma Borja Y Loquero, to lie down. He pressed a pillow
diagnosed, treated and on her face and injected her
administer injections on the again, causing her to fall asleep.
same victims in Violation of When Precila awoke the second
Section 10, in relation to Section time, she found appellant in bed
28, Republic Act No. 2382. with her. He was naked and
Agustina Borjas 16-year old fondling her private parts. The
daughter, Precila, had high fever pain all over her body lingered.
and loose bowel movement. When Precila touched her
Upon learning that Precila was private parts, she saw blood
sick, Marita Fontreras introduced stains on her hand. She tried to
Agustina to her husband, stand up but she was too weak.
appellant herein, whom she said Appellant gave her another
was a medical doctor. Appellant injection rendering her
and Marita went to the Borja unconscious.
residence, where he examined The following morning, Agustina
Precila. It was appellant's went to fetch Precila. Upon
diagnosis that Precila was a reaching the Fontreras'
drug addict and required further residence, she went straight to
observation and treatment. the bedroom, where, to her
Appellant offered to attend to great dismay, she found Precila
Precila at his house and again, and appellant both asleep and
Agustina agreed in the belief naked. She hurriedly dressed up
that her daughter was a drug Precila and brought her home.
addict. When Precila woke up, she
In the evening of the same day, noticed she was already home
Precila was fetched by appellant and her mother was crying.
and Marita and was brought to Precila remained dizzy, with
appellant's house. Again, Precila throbbing pains all over her
was given an injection which body. When talked to, she was
caused her to sleep. When she incoherent.
awoke, she realized that she That evening, Precila's oldest
was naked and her entire body sister, Josefina, a nurse by
was in pain. Appellant was profession, came home and saw
seated on the bed and was Precila looking very weak. Her
fondling her private parts. mother, who was crying
Shocked, Precila called for her narrated what she had
mother and tried to get up. witnessed that morning. She
also told Josefina that appellant needle puncture, as shown in
was in the other bedroom, the Medico-Legal Report.
treating another sister, Wilma Acting on the complaint filed
whom he also diagnosed as a before the Constabulary Anti-
drug addict. Josefina Narcotics Unit (CANU), a
immediately proceeded to the surveillance of appellant's
bedroom and saw appellant residence was conducted.
about to inject Wilma. Subsequently, a search warrant
Josefina saw the open bag of was secured from Judge Jose P.
appellant, which contained Castro of the RTC. Armed with
empty capsules of dalmane and the warrant, CANU agents
empty vials of valium. She raided appellant's residence.
inquired on the need of the After the preliminary
injection and appellant replied investigation, separate
that a second shot of plain informations for rape and
distilled water was required to violation of R.A. No. 2382 were
cure Wilma of her drug filed. Appellant pleaded not
addiction. Josefina told appellant guilty to both crimes.
to stop but he persisted. Only ISSUE: WON the accused is
upon threat that she would call liable for illegal practice of
the police did appellant stop. medicine
Appellant and his wife then left HELD: Yes. The Supreme Court
the Borja residence. affirmed the appealed decision
The following day, Agustina and in toto. In finding appellant
Josefina brought Precila and guilty of illegal purchase of
Wilma to the Philippine medicine, considerable weight
Constabulary Headquarters was given to the prosecution's
where Josefina and Wilma gave exhibits.
their statements. Precila was The Professional Regulation
physically examined by a Commission certified that
doctor, whose medical report appellant is not among the list
stated that Precila's hymen and of registered physicians nor
"deep, healing lacerations" and among those with special permit
that "subject is in non-virgin to practice medicine in a limited
state physically". Several needle scope.
puncture marks were also found Appellant failed to refute the
on Precila's arms and buttocks. Handwriting Identification
A physical examination was Report released by the PC Crime
likewise done on Wilma, which Laboratory showing that the
showed that she too had a signature of Dr. Jesus D. Yap
prescribing medicine belonged showing assorted drugs and
to him. The pictures also taken medical equipment in
during the raid undeniably appellant's room; and the
reveal several medical chemistry reports prove that
equipment used by practicing appellant was engaged in the
physicians. practice of medicine. And as to
With respect to the accuseds his allegation that there was no
conviction of illegal practice of proof of payment, the law
medicine, appellant presented specifically punishes said act
inconsistent claims. On one whether or not done for a fee.
hand, he claims that the drugs
and other paraphernalia were DUTIES OF PHYSICIANS TO
planted by the raiding team; THEIR PATIENTS
while on the other hand, he G.R. No. 86890 January 21, 1994
claims that these were seized CARILLO v. PEOPLE
without any warrant. SUMMARY: Petitioner Dr. Leandro
If indeed the evidence were all Carillo, an anesthetist, seeks
planted, how can appellant review of the Decision of the CA
explain his handwriting on the which affirmed his conviction by
prescription pads in the name of the RTC of the crime of simple
Dr. Jesus Yap? A perusal of the negligence resulting in
photographs showing accused homicide, for the death of his
during the raid, fails to indicate thirteen (13) year old patient
any protestation by him. In fact, Catherine Acosta.
the other photographs do not Petitioner and his co-accused,
bear any sign of disorder, in the surgeon Dr. Emilio Madrid,
contrast to appellant's were convicted by the RTC and
testimony that his room was was affirmed by the CA.
made into a mess during the However, only Carillo appealed.
raid. FACTS: The deceased, Catherine
The evidence is overwhelming Acosta, a 13 year old girl,
that appellant actually treated daughter of spouses Domingo
and diagnosed Precila and and Yolanda Acosta, complained
Wilma Borja. The positive to her father of pains in the
testimony of Agustina, Precila, lower part of her abdomen.
Wilma and Josefina Borja; the According to Dr. Emilio Madrid,
medico-legal reports which his findings might be
attest to the needle marks; the appendicitis.
Handwriting Identification The child was brought to the
Report; the photographs Baclaran General Hospital
wherein the child was scheduled It has also been established that
for operation at 5:00 o'clock in the deceased was not weighed
the afternoon. The operation before the administration of
took place at 5:45 p.m. because anesthesia on her.
Dr. Madrid arrived only at that The operation was finished at
time. When brought inside the 7:00 o'clock in the evening and
operating room, the child was when the child was brought out
feeling very well and they did from the operating room, she
not subject the child to ECG was observed to be shivering
(electrocardiogram) and X-ray. (nanginginig); her heart beat
The appellant Dr. Emilio Madrid, was not normal; she was asleep
a surgeon, operated on and did not wake up; she was
Catherine. He was assisted by pale; and as if she had difficulty
appellant, Dr. Leandro Carillo, an in breathing and Dr. Emilio
anesthesiologist. During the Madrid suggested that she
operation, while Yolanda, placed under oxygen tank; that
Catherine's mother, was staying oxygen was administered to the
outside the operating room, she child when she was already in
"noticed something very the room.
unfamiliar." The three nurses Witness Yolanda Acosta further
who assisted in the operation testified that shortly before the
were going in and out of the child was transferred from the
operating room, they were not operating room to her room, she
carrying anything, but in going (witness) was requested by the
out of the operating room, they anesthesiologist to go home and
were already holding something. get a blanket. When Catherine
At around 6:30 p.m., Dr. Emilio remained unconscious until
Madrid went outside the noontime the next day, a
operating room and Yolanda neurologist examined her and
Acosta was allowed to enter the she was diagnosed as
first door. The appendicitis was comatose. Three (3) days later,
shown to them by Dr. Madrid, Catherine died without regaining
because according to him, they consciousness.
might be wondering because he The CA held that Catherine had
was going to install drainage suffered from an overdose of, or
near the operating portion of an adverse reaction to,
the child. When asked, the anesthesia, particularly the
doctor told them the child was arbitrary administration of
already out of danger but the Nubain, a pain killer, without
operation was not yet finished. benefit of prior weighing of the
patient's body mass, which of the CA adequately support
weight determines the dosage the conclusion that petitioner
of Nubain which can safely be Dr. Carillo was, along with Dr.
given to a patient. The CA held Madrid, guilty of simple
that this condition triggered off negligence which resulted in
a heart attack as a post- homicide
operative complication, HELD: YES. The Court observed
depriving Catherine's brain of that when the patient was
oxygen, leading to the brain's wheeled out of the operating
hemorrhage. The CA identified room after completion of
such cardiac arrest as the surgery, she manifested signs of
immediate cause of Catherine's medical instability (i.e.,
death. shivering, paleness, irregular
The CA found criminal breathing and weak heart beat).
negligence on the part of She was not brought to a
petitioner Dr. Carillo and his co- properly equipped recovery
accused Dr. Madrid, holding that room, or intensive care until
both had failed to observe the which the hospital lacked.
required standard of diligence in The conduct of Dr. Madrid and of
the examination of Catherine the petitioner constituted
prior to the actual inadequate care of their patient
administration of anesthesia; in view of her vulnerable
that it was "a bit rash" on the condition. Both doctors failed to
part of the accused Dr. Carillo appreciate the serious condition
"to have administered Nubain of their patient whose adverse
without first weighing physical signs were quite
Catherine"; and that it was an manifest right after surgery. And
act of negligence on the part of after reviving her heartbeat,
both doctors when, (a) they both doctors failed to monitor
failed to monitor Catherine's their patient closely or extend
heartbeat after the operation further medical care to her; such
and (b) they left the hospital conduct was especially
immediately after reviving necessary in view of the
Catherine's heartbeat, depriving inadequate, post-operative
the latter of immediate and facilities of the hospital.
expert medical assistance when While Dr. Madrid and a
she suffered a heart attack cardiologist were containing the
approximately fifteen (15) to patient's convulsions, and after
thirty (30) minutes later. the latter had diagnosed that
ISSUE: WON the findings of fact infection had reached the
patient's head, these two (2) benefits that may depend upon
apparently after consultation, his professional skill and care.
decided to call-in the petitioner. As the sole tribunal to adjudge
There is here a strong the physician's failure to fulfill
implication that the patient's his obligation to his patient is, in
post-operative condition must most cases, his own conscience,
have been considered by the violation of this rule on his part
two (2) doctors as in some way is "discreditable and
related to the anesthetic inexcusable".
treatment she had received Nubain was an experimental
from the petitioner either during drug for anesthesia and post-
or after the surgical procedure. operative pain and the medical
Once summoned, petitioner literature required that a patient
anesthesiologist could not be be weighed first before it is
readily found. When he finally administered and warned that
appeared at 10:30 in the there was no (or inadequate)
evening, he was evidently in a experience relating to the
bad temper, commenting administration thereof to a
critically on the dextrose bottles patient less that eighteen (18)
before ordering their removal. ears of age. Yet, the doctor's
This circumstance indicated he order sheet did not contain this
was not disposed to attend to precaution but instead directed
this unexpected call, in violation a reader to apply the drug only
of the canons of his profession when warranted by the
that as a physician, he should circumstances.
serve the interest of his patient We note further that the
"with the greatest of solicitude, surgeon Dr. Madrid was forty-
giving them always his best five minutes late in arriving at
talent and skill." Indeed, when the operating theater.
petitioner finally saw his patient, Considering that delay in
he offered the unprofessional treatment of appendicitis
bluster to the parents of increases the morbidity of the
Catherine that he would resign if patient, Dr. Madrid's conduct
the patient will not regain can only be explained by a pre-
consciousness. The canons of operative diagnosis on his part
medical ethics require a that the condition of
physician to "attend to his appendicitis was not yet
patients faithfully and attended by complications (i.e.,
conscientiously." He should a ruptured appendix and
secure for them all possible peritonitis).
As early as in People v. Vistan, circumstances, to be specially
the Court defined simple within the knowledge or control
negligence, penalized under of the accused. In the instant
what is now Article 365 of the case, the Court is bound to
Revised Penal Code, as "a mere observe that the events which
lack of prevision in a situation occurred during the surgical
where either the threatened procedure (including whether or
harm is not immediate or the not Nubain had in fact been
danger not openly visible." Put administered as an anesthesia
in a slightly different way, the immediately before or during
gravamen of the offense of the surgery) were peculiarly
simple negligence is the failure within the knowledge and
to exercise the diligence control of Dr. Carillo and Dr.
necessitated or called for the Madrid. It was, therefore,
situation which was not incumbent upon the two (2)
immediately life-destructive but accused to overturn the prima
which culminated, in the present facie case which the prosecution
case, in the death of a human had established, by reciting the
being three (3) days later. Such measures which they had
failure to exercise the necessary actually taken to prevent or to
degree of care and diligence is a counter the obviously serious
negative ingredient of the condition of Catherine Acosta
offense charged. The rule in which was evident right after
such cases is that while the surgery. This they failed or
prosecution must prove the refused to do so.
negative ingredient of the Still another circumstance of
offense, it needs only to present which account must be taken is
the best evidence procurable that both petitioner and Dr.
under the circumstances, in Madrid failed to inform the
order to shift the burden of parents of their minor patient of
disproving or countering the the nature of her illness, or to
proof of the negative ingredient explain to them either during
to the accused, provided that the surgery (if feasible) or at
such initial evidence establishes any time after the surgery, the
at least on a prima facie basis events which comprised the
the guilt of the accused. This dramatic deterioration of her
rule is particularly applicable condition immediately after
where the negative ingredient of surgery as compared with her
the offense is of such a nature pre-surgery condition.
or character as, under the By way of resume, in the case at
bar, we consider that the chain AFFIRMED.
of circumstances above noted, PEOPLE VS. ANUNCIACION VDA.
namely: (1) the failure of DE GOLEZ ; G.R. NO. L-14160 ;
petitioner and Dr. Madrid to JUNE 30, 1960 FACTS: Although
appreciate the serious post- unlicensed to practice medicine,
surgery condition of their Anunciacion De Golez (accused)
patient and to monitor her diagnosed, prescribed, and
condition and provide close treated Susana Tam, who had
patient care to her; (2) the been suffering with bodily
summons of petitioner by Dr. ailment. As a consequence,
Madrid and the cardiologist after Susana Tam died. The provincial
the patient's heart attack on the fiscal filed an information in the
very evening that the surgery CFI charging the accused of
was completed; (3) the low level homicide through reckless
of care and diligence exhibited imprudence, however he
by petitioner in failing to correct pleaded not guilty. When the
Dr. Madrid's prescription of case was called for trial, the
Nubain for post-operative pain; assistant fiscal made a
(4) the extraordinary failure or manifestation that the accused
refusal of petitioner and Dr. had also been charged with the
Madrid to inform the parents of crime of illegal practice of
Catherine Acosta of her true medicine before another sala of
condition after surgery, in the same court. In view of this
disregard of the requirements of manifestation, the trial court
the Code of Medical Ethics; and dismissed the information for
(5) the failure of petitioner and being fatally defective, without
Dr. Madrid to prove that they prejudice to the filing of the
had in fact exercised the proper information against the
necessary and appropriate accused. The grounds given for
degree of care and diligence to dismissal were: Under Par. (a),
prevent the sudden decline in Sec. 2 of Rule 113 of the Rules
the condition of Catherine of Court, the facts charged do
Acosta and her death three (3) not constitute the offense of
days later, leads the Court to homicide thru reckless
the conclusion, with moral imprudence because illegal
certainty, that petitioner and Dr. practice of medicine is malicious
Madrid were guilty of simple per se, and when the accused
negligence resulting in practiced medicine without
homicide. academical preparation and
The Decision of the CA is hereby without a license to do so, then
she is per se committing a granted, and so a person may
criminal act for which the be convicted thereof
criminal intent is presumed. irrespective of his intention and
Although the crime of homicide in spite of having acted in good
thru reckless imprudence can be faith and without malice. As
committed by a duly licensed defined by Section 2678 of the
physician when in the practice Revised Administrative Code
of his profession he fails to (the law then in force), the
exercise due care and diligence offense consists in the mere act
from which the criminal act of practicing medicine in
arises, this crime cannot be violation of the Medical Law,
imputed to a person who has no even if no injury to another,
authority to practice this much less death, results from
profession, which act is such malpractice. When,
malicious per se. The crime therefore, the patient dies, the
described in Art. 365 of the RPC illegal practitioner should be
results from the performance of equally responsible for the
a lawful act which was done death of his patient, an offense
without exercising the care and independent of and distinct from
diligence that is required by the the illegal practice of medicine.
circumstances, and not from the The allegations in the
performance of an unlawful act information in the case that the
which is the subject of the De Golez acted with reckless
information in this case because negligence in diagnosing,
a quack doctor who practices prescribing, and treating Susana
medicine does so against the Tam, knowing that she did not
law, and, therefore, his act is possess the necessary technical
necessarily malicious and knowledge or skill to do so, thus
criminal. The provincial fiscal causing her death, sufficiently
appealed to the Court and urges charge the crime of homicide
that the court below erred in through reckless imprudence
dismissing the information. since ordinary diligence
ISSUE:Whether or not the lower counsels one not to tamper with
court erred in dismissing the human life by trying to treat a
information. HELD: Yes. The sick man when he knows that he
Court held that the dismissal is does not have the special skill,
erroneous because the crime of knowledge, and competence to
illegal practice of medicine is a attempt such treatment and
statutory offense wherein cure, and may consequently
criminal intent is taken for reasonably foresee harm or
injury to the latter. However, in Order No. 76 dated August 28,
view of the error of the lower 1989 by postponing to January
court in dismissing the 1, 1990 the effectivity of the
information, the Court cannot sanctions and penalties for
sustain the appeal because it violations of the law, provided in
would place the accused in Sections 6 and 12 of the
double jeopardy. The present Generics Act and Sections 4 and
information being valid and 7 of the Administrative Order.
sufficient in form and substance Petitioners' Arguments: 1. The
to sustain a conviction, the petitioners' main argument
dismissal thereof by the court against paragraphs (a) and (b),
after the accused had pleaded Section 6 of the law, is the
not guilty to the charge and alleged unequal treatment of
without his consent constitutes government physicians,
jeopardy as to bar further dentists, and veterinarians, on
proceedings upon the case. The one hand, and those in private
appeal is, therefore, dismissed, practice on the other hand, in
with costs de oficio. the manner of prescribing
--------------------------------------------- generic drugs, for, while the
--------------------------------------------- former are allegedly required to
-------------------- SANTIAGO A DEL use only generic terminology in
ROSARIO, ET. AL., VS. their prescriptions, the latter
HONORABLE ALFREDO may write the brand name of
BENGZON ; G.R. NO. 88265 ; the drug in parenthesis below
DECEMBER 21, 1989 FACTS: This the generic name. The favored
case is a class suit filed by treatment of private doctors,
officers of the Philippine Medical dentists and veterinarians under
Association, the national the law is allegedly a specie of
organization of medical doctors invalid class legislation. 2.
in the Philippines, wherein they Petitioners also concede that the
asked the Court to declare some requirement for doctors,
provisions of the Generics Act of dentists, and veterinarians to
1988 (Rep. Act No. 6675), and of use the generic terminology in
the implementing Administrative writing their prescriptions,
Order No. 62 issued thereto as followed by the brand name in
unconstitutional. Republic Act parenthesis is good. However,
No. 6675 took effect on March they complain that under
30, 1989. Section 7, Phase 3 of paragraph (d) of the law, the
Administrative Order No. 62 was salesgirl at the drugstore
amended by Administrative counter is authorized to
"substitute the prescribed and intent of paragraphs (a) and
medicine with another medicine (b), Section 6 of the Generics
belonging to the same generic Act. it may be observed that
group." Since doctors are not while paragraph (a) refers to "all
allowed to instruct the druggist government health agencies,
not to substitute the and their personnel as well as
prescription, or to "Dispense other government agencies"
only as Prescribed". They argue (not necessarily physicians,
that the act of prescribing the dentists and veterinarians),
correct medicine for the patient paragraph (b) refers to "all
becomes the act of the salesgirl medical, dental and veterinary
at the drugstore counter, no practitioners, including private
longer the act of the physician, practitioners." 2. Petitioners
dentist, or veterinarian. 3. It have distorted the clear
mpairs the obligation of contract provisions of the law and the
between a physician and his implementing administrative
patient. 4. Petitioners have also order. Neither paragraph (d) of
assailed Section 12, paragraphs Section 6 of the Generics Act,
b, c and d, of the Generics Act nor Section 4 of Administrative
prescribing graduated penalties Order No. 62, gives the salesgirl
(ranging from a reprimand to a and/or druggist the discretion to
fine of not less that P10,000 and substitute the doctor's
the suspension of the prescription. The salesgirl at the
physician's license to practice drugstore counter, merely
his profession for 1 year or informs the customer, but does
longer, at the discretion of the not determine (for she is
court) for violations of its incompetent to do so) all the
provisions. Petitioners' alleged other drug products or brands
that these penalties violate the that have the same generic
constitutional guarantee against name, and their corresponding
excessive fines and cruel and prices. That information she
degrading punishment. ISSUE: may obtain from the list of drug
Whether or not RA No. 6675 is products determined by the
unconstitutional. HELD: No. The Bureau of Food and Drugs to
Court dismissed the petition for have the same generic name, or
lack of merit. (Ruling as per which are the chemical,
Petitioners' Arguments) 1. biological, and therapeutic
Petitioners' main argument equivalent of the generic drug.
proceeds from a misreading and All drugstores or drug outlets
misinterpretation of the letter are required by the law to post
such list in a conspicuous place benefit the impoverished (and
in their premises for the often sickly) majority of the
information of the customers, population in a still developing
for the choice of whether to buy country like ours, not the
the expensive brand name drug, affluent and generally healthy
or the less expensive generic, minority. 3. There is no merit in
should be exercised by the the petitioners' theory that the
customer alone. The Court has Generics Act impairs the
been unable to find any obligation of contract between a
constitutional infirmity in the physician and his patient, for no
Generics Act. It, on the contrary, contract ever results from a
implements the constitutional consultation between patient
mandate for the State "to and physician. A doctor may
protect and promote the right to take in or refuse a patient, just
health of the people" and "to as the patient may take or
make essential goods, health refuse the doctor's advice or
and other social services prescription. As aptly observed
available to all the people at by the public respondent, no
affordable cost" (Section 15, Art. doctor has ever filed an action
II and Section 11, Art. XIII, 1987 for breach of contract against a
Constitution). The prohibition patient who refused to take
against the use by doctors of prescribed medication, undergo
"no substitution" and/or words surgery, or follow a
of similar import in their recommended course treatment
prescription, is a valid regulation by his doctor. In any event, no
to prevent the circumvention of private contract between doctor
the law. It secures to the patient and patient may be allowed to
the right to choose between the override the power of the State
brand name and its generic to enact laws that are
equivalent since his doctor is reasonably necessary to secure
allowed to write both the the health, safety, good order,
generic and the brand name in comfort, or general welfare of
his prescription form. If a doctor the community. This power can
is allowed to prescribe a brand- neither be abdicated nor
name drug with "no bargained away. 4. It has no
substitution," the patient's merit. Penal sanctions are
option to buy a lower-priced, but indispensable if the law is to be
equally effective, generic obeyed. They are the "teeth" of
equivalent would thereby be the law. Without them, the law
curtailed. The law aims to would be toothless, not worth
the paper it is printed on, for group to have control of UDMC
physicians, dentists and for it will result in culpable
veterinarians may freely ignore violation of Section 7, Article XII
its prescriptions and of the 1987 Constitution which
prohibitions. The penalty of provides that no private lands
suspension or cancellation of shall be transferred or conveyed
the physician's license is neither except to individuals or
cruel, inhuman, or degrading. It corporations qualified to acquire
is no different from the penalty or hold land of the public
of suspension or disbarment domain, meaning corporations
that the Court inflicts on lawyers at least sixty per centum of
and judges who misbehave or whose capital is owned by
violate the laws and the Codes Filipino citizens (Sec. 2, Article
of Professional and Judicial XII, 1987 Constitution); and
Conduct. 3. in allowing the Japanese
FACTS: United Doctors Medical investors to own more than 40%
Center (UDMC) defaulted in of the capital stock of UDMC
paying its loan obligation of (which operates a nursing and
approximately P55 million to the midwifery school) in violation of
Development Bank of the Section 4 (2) Article XIV of the
Philippines (DBP) in 1988. To 1987 Constitution which
stave off the threatened provides that educational
foreclosure, UDMC, through its institutions ... shall be owned
principal officers persuaded the solely by citizens of the
Yamadas and Enatsu (Japanese Philippines or corporations or
doctors) to invest fresh capital associations at least sixty per
in UDMC. The wife of Tomotada centum of the capital of which is
Enatsu, Edita Enatsu, is a owned by such citizens.
Filipina. They invested ISSUE: WON petitioners
approximately P57 million in contention is tenable.
UDMC. HELD: No. The Court find no
Sixto Crisostomo, one of the merit in the petition. That the
original stockholder of UDMC, P57 million investment of the
filed the petition for certiorari Japanese group in UDMC
and prohibition with a prayer for violates the constitutional
preliminary injunction alleging provisions restricting the
that the SEC en banc abused its transfer or conveyance of
discretion: private lands (Art. XIII, Sec. 7,
xxx 1987 Constitution) and the
2. in allowing the Japanese ownership of educational
institutions (Art. XVI, Sec. 14[a], not amount to engaging
1987 Constitution), to citizens of (illegally,) in the practice of
the Philippines or corporations medicine, or, nursing. If it were
at least 60% of the capital of otherwise, the petitioner's
which is owned by Filipino stockholding in UDMC would
citizens is unmeritorious. While also be illegal.
82% of UDMC's capital stock is
indeed subscribed by the Aliviado v. P&G ; GR160506 ;
Japanese group, only 30% June 6, 2011
(equivalent to 171,721 shares or FACTS: On March 9, 2010, the
P17,172.00) is owned by the Court rendered a Decision
Japanese citizens, namely, the holding: (a) that Promm-Gem,
Yamada spouses and Tomotada Inc. (Promm-Gem) is a
Enatsu. 52% is owned by Edita legitimate independent
Enatsu, who is a Filipino. contractor; (b) that Sales and
Accordingly, in its application for Promotions Services (SAPS) is a
approval/registration of the labor-only contractor
foreign equity investments of consequently its employees are
these investors, UDMC declared considered employees of Procter
that 70% of its capital stock is & Gamble Phils., Inc. (P&G); (c)
owned by Filipino citizens, that Promm-Gem is guilty of
including Edita Enatsu. That illegal dismissal; (d) that
application was approved by the SAPS/P&G is likewise guilty of
Central Bank on August 3, 1988. illegal dismissal; (e) that
The investments in UDMC of petitioners are entitled to
Doctors Yamada and Enatsu do reinstatement; and (f) that the
not violate the Constitutional dismissed employees of
prohibition against foreigners SAPS/P&G are entitled to moral
practising a profession in the damages and attorneys fees
Philippines (Section 14, Article there being bad faith in their
XII, 1987 Constitution) for they dismissal. P&G filed a Motion for
do not practice their profession Reconsideration, an Opposition,
(medicine) in the Philippines, and Supplemental Opposition.
neither have they applied for a On the other hand, petitioners
license to do so. They only own filed a Motion for Partial
shares of stock in a corporation Reconsideration and
that operates a hospital. No law Comment/Opposition (to P&G's
limits the sale of hospital shares motion for reconsideration).The
of stock to doctors only. The Court denied all these Motions.
ownership of such shares does Entry of Judgment was made on
July 27, 2010. Before parties comment. In gist, they reminded
received the notice, P&G filed a the Court of the Entry of
Motion for Leave to File Motion Judgment made on July 27, 2010
to Refer the Case to the and argued that the motions
Supreme Court En Banc with filed by P&G are frivolous and
Second Motion for dilatory.
Reconsideration and Motion for ISSUE: (1) W/N SAPS is a labor-
Clarification and a Motion to only contractor. (2) W/N the
Refer the Case to the Supreme Court erred in finding that SAPS
Court En Banc with Second has no substantial capital. (3)
Motion for Reconsideration and W/N the awards of moral
Motion for Clarification. On damages and attorney's fees
October 4, 2010, P&G filed a are proper.
Motion for Leave to Admit the HELD: (1) YES, the Court
Attached Supplement to the correctly determined that SAPS
Motion to Refer the Case to the is a labor-only contractor. There
Supreme Court En Banc with is no basis for P&G's claim that
Second Motion for the Court erred in not applying
Reconsideration and Motion for the four-fold test, particularly
Clarification as well as a the control test in determining
Supplement to the Motion to whether SAPS is a legitimate
Refer the Case to the Supreme independent contractor or a
Court En Banc with Second labor-only contractor. Article 106
Motion for Reconsideration and defines labor-only contracting,
Motion for Clarification. viz: There is labor-only
Thereafter, P&G filed a contracting where the person
Manifestation and Motion supplying workers to an
praying that its pleadings be employer does not have
resolved as they were filed substantial capital or investment
before it received notice of the in the form of tools, equipment,
entry of judgment. In a machineries, work premises,
Resolution, the Court resolved to among others, and the workers
note the aforesaid pleadings recruited and placed by such
and at the same time to require person are performing activities
the petitioners to file their which are directly related to the
comment thereto. The Court principal business of such
reiterated its directive for employer. In such cases, the
petitioners to file their comment person or intermediary shall be
. Petitioners filed a Very Urgent considered merely as an agent
Manifestation in lieu of their of the employer who shall be
responsible to the workers in the the two elements is present. It
same manner and extent as if was established that SAPS has
the latter were directly no substantial capitalization and
employed by him. On the same it was performing
vein, Rule VIII-A, Book III of the merchandising and promotional
Omnibus Rules Implementing activities which are directly
the Labor Code, as amended by related to P&G's business. Since
Department Order No. 18-02, SAPS met one of the
pertinently provides: Section 5. requirements, it was enough
Prohibition against labor-only basis to hold that it is a labor-
contracting. Labor only only contractor. Consequently,
contracting is hereby declared P&G (its principal) is considered
prohibited. For this purpose, the employer of its employees.
labor-only contracting shall refer This is pursuant to the ruling in
to an arrangement where the Aklan v. San Miguel Corporation:
contractor or subcontractor finding that a contractor is a
merely recruits, supplies or labor-only contractor, as
places workers to perform a job, opposed to permissible job
work or service for a principal, contracting, is equivalent to
and ANY of the following declaring that there is an
elements are present: employer-employee relationship
i)The contractor or between the principal and the
subcontractor does not have employees of the supposed
substantial capital or investment contractor, and the labor-only
which relates to the job, work or contractor is considered as a
service to be performed and the mere agent of the principal, the
employees recruited, supplied real employer.
or placed by such contractor or (2) NO, the Court did not err in
subcontractor are performing finding that SAPS has no
activities which are directly substantial capital. In Vinoya v.
related to the main business of National Labor Relations
the principal; OR Commission, the Court held that
ii) [T]he contractor does not with the current economic
exercise the right to control over atmosphere in the country, the
the performance of the work of paid-in capitalization of PMCI
the contractual employee. amounting to P75,000.00 cannot
Therefore, the control test is be considered as substantial
merely one of the factors to capital and, as such, PMCI
consider. As stated, labor-only cannot qualify as an
contracting exists when any of independent contractor.
Applying the same rationale, it the principal employer. The
is clear that SAPS having a paid- principal employer therefore
in capital of only P31,250 has no becomes solidarily liable with
substantial capital. SAPS' lack of the labor-only contractor for all
substantial capital is underlined the rightful claims of the
by the records which show that employees. P&G's assertions
its payroll for its merchandisers that it was held responsible for
alone for one month would 10 employees despite their
already total P44,561.00. It has having no record of having been
6-month contracts with P&G. Yet assigned by SAPS to P&G and
SAPS failed to show that it could that petitioners could not be
complete the 6-month contracts reinstated because there are no
using its own capital and available positions for them in
investment. Its capital is not the existing plantilla of P&G are
even sufficient for one month's belatedly raised.
payroll. SAPS failed to show that ADDITIONAL CONCEPTS: (1)
its paid-in capital of P31,250.00 Once a judgment has become
is sufficient for the period final and executory, it may no
required for it to generate longer be modified in any
needed revenue to sustain its respect, even if the modification
operations independently. is meant to correct an erroneous
Substantial capital refers to conclusion of fact or law, and
capitalization used in the regardless of whether the
performance or completion of modification is attempted to be
the job, work or service made by the court rendering it
contracted out. In the present or by the highest court of the
case, SAPS failed to show land. Exception: (1) the
substantial capital. correction of clerical errors, (2)
(3) YES, the awards of moral the so-called nunc pro tunc
damages and attorney's fees entries which cause no prejudice
are proper. It must be to any party, and (3) void
emphasized that in labor-only judgments. The object of a
contracting, the labor-only judgment nunc pro tunc is not
contractor is considered merely the rendering of a new
an agent of the principal judgment and the
employer. The principal ascertainment and
employer is responsible to the determination of new rights, but
employees of the labor-only is one placing in proper form on
contractor as if such employees the record, the judgment that
had been directly employed by had been previously rendered,
to make it speak the truth, so as work or service is to be
to make it show what the performed or completed within
judicial action really was, not to or outside the premises of the
correct judicial errors, such as to principal. This conditions must
render a judgment which the concur: - The contractor or
court ought to have rendered, in subcontractor carries on a
place of the one it did distinct and independent
erroneously render, nor to business and undertakes to
supply nonaction by the court, perform the job, work or service
however erroneous the on its own account and under its
judgment may have been. A own responsibility according to
nunc pro tunc entry in practice its own manner and method,
is an entry made now of and free from the control and
something which was actually direction of the principal in all
previously done, to have effect matters connected with the
as of the former date. Its office performance of the work except
is not to supply omitted action as to the results thereof; - The
by the court, but to supply an contractor or subcontractor has
omission in the record of action substantial capital or investment
really had, but omitted through ; - The agreement between the
inadvertence or mistake. principal and contractor or
(2) A second motion for subcontractor assures the
reconsideration is a prohibited contractual employees
pleading pursuant to Section 2, entitlement to all labor and
Rule 52 of the Rules of Court. occupational safety and health
--------------------------------------------- standards, free exercise of the
--------------------------------------------- right to self-organization,
-------------------- security of tenure, and social
Almeda v. Asahi ; GR 177785 ; and welfare benefits
Sept 3, 2008 (2) Labor-only contracting - a
CONCEPTS: (1) Job contracting prohibited act, an arrangement
or subcontracting - an in which the contractor or
arrangement where a principal subcontractor merely recruits,
agrees to put out or farm out to supplies or places workers to
a contractor or subcontractor perform a job, work or service
the performance or completion for a principal. Its elements are:
of a specific job, work or service - The contractor or
within a definite or subcontractor does not have
predetermined period, substantial capital or investment
regardless of whether such job, to actually perform the job, work
or service under its own account the employment of petitioners.
and responsibility; - The Believing that SSASI was a
employees recruited, supplied labor-only contractor, and
or placed by such contractor or having continuously worked as
subcontractor are performing glass cutters and quality
activities which are directly controllers for the respondent
related to the main business of functions which are directly
the principal. related to its main line of
(3) In labor-only contracting, the business as glass manufacturer
statutes create an employer- for 3-11 years, petitioners
employee relationship for a asserted that they should be
comprehensive purpose: to considered regular employees of
prevent circumvention of labor the respondent. Respondent, on
laws. The contractor is the other hand, refuted
considered as merely the agent petitioners allegations that they
of the principal employer and were its regular employees.
the latter is responsible to the Instead, respondent claimed
employees of the labor-only that petitioners were employees
contractor as if such employees of SSASI and were merely
are directly employed by the assigned by SSASI to work for
principal employer. respondent to perform
FACTS: Petitioners Randy intermittent services pursuant
Almeda, Edwin Audencial, Nolie to an Accreditation Agreement.
Ramirez, Ernesto Calicagan and Respondent likewise denied
Reynaldo Calicagan filed a exercising control over
complaint for illegal dismissal petitioners and asserted that
against respondent Asahi Glass such was wielded by SSASI.
Philippines, Inc. (Asahi) and SSASI averred that it was the
SSASI. They alleged that one who hired petitioners and
respondent (domestic assigned them to work for
corporation engaged in the respondent on occasions that
business of glass the latters workforce could not
manufacturing) and SSASI meet the demands of its
(labor-only contractor) entered customers. Eventually, however,
into a service contract where respondent ceased to give job
the latter provide the former orders to SSASI, constraining
with the necessary manpower the latter to terminate
for its operations. When Asahi petitioners employment. The
terminated its service contract Labor Arbiter dismissed the
with SSASI, it in turn, terminated complaint for lack of merit.
However, NLRC reversed Labor unconvinced by respondents
Arbiters decision and gave argument that petitioners were
more evidentiary weight to performing jobs that were not
petitioners testimonies, directly related to respondents
declaring that SSASI was main line of business.
engaged in labor-only Petitioners supplemented the
contracting since it did not have regular workforce when the
substantial capital and latter could not comply with the
investment in the form of tools, markets demand; necessarily,
equipment and machineries. CA therefore, petitioners performed
reversed NLRCs decision and the same functions as the
found that there was a regular workforce. The crucial
legitimate job contracting element of control over
between respondent and SSASI. petitioners also rested in
ISSUE: (1) W/N petitioners were respondent. Petitioners worked
employees of Asahi. (2) W/N at the respondents premises,
petitioners were illegally followed the work schedule
dismissed. prepared by respondent, and
HELD: (1) YES. The Court held were required to observe all
that petitioners were employees rules and regulations pertaining
of Asahi, as SSASI is a labor-only to the quality of job
contractor; hence, it is performance, regularity of job
considered as the agent of output, and the manner and
respondent. Note: The Court method of accomplishing the
would only be able to deem jobs.
petitioners as employees of (2) YES, petitioners were
respondent if it is established illegally dismissed. Respondent,
that SSASI was a labor-only as petitioners employer, has
contractor, and not a legitimate the burden of proving that the
job contractor or subcontractor. dismissal was for a cause
An important element of allowed under the law, and that
legitimate job contracting is that they were afforded procedural
the contractor has substantial due process. However,
capital or investment, which respondent failed to discharge
respondent failed to prove. this burden with substantial
Theres lack of evidence to show evidence as it noticeably
that SSASI possessed narrowed its defense to the
substantial capital or investment denial of any employer-
when its contractual relations employee relationship between
began. Also, the Court is it and petitioners. The sole
reason given for the dismissal of respondent. Also, Polyfoam and
petitioners by SSASI was the Cheng alleged that NLRC has no
termination of its service jurisdiction over the case
contract with respondent. But because of the absence of
since SSASI was a labor-only employer-employee relationship.
contractor, and petitioners were The Labor Arbiter found
to be deemed the employees of respondent to have been
respondent, then the said illegally dismissed from
reason would not constitute a employment. It further held that
just or authorized cause for petitioners are solidarily liable to
petitioners dismissal. It would respondent, considering that
then appear that petitioners Gramaje (the contractor) was
were summarily dismissed not enrolled as private
based on the afore-cited reason, employment agency and that
without compliance with the respondent performed a job
procedural due process for directly related to the main
notice and hearing. business of Polyfoam. NLRC
--------------------------------------------- modified the LA decision by
--------------------------------------------- exonerating Polyfoam from
-------------------- liability for respondents, and
Polyfoam v. Concepcion ; GR found Gramaje to be an
172349 ; June 13, 2012 independent contractor who
FACTS: It started when contracted the packaging aspect
Respondent Edgardo of the finished foam products of
Concepcion discovered that his Polyfoam. CA, on the other
time card was not in the rack hand, agreed with the LAs
and when he protested to his conclusion that Gramaje is not a
supervisor, the latter allegedly legitimate job contractor but
told him that the management only a labor-only contractor.
decided to dismiss him due to ISSUE: (1) W/N Gramaje is an
an infraction of a company rule. independent job contractor. (2)
Natividad Cheng, the companys W/N an employer-employee
manager, refused to face him. relationship exists between
And so, Concepcion filed a Polyfoam and respondent. (3)
Complaint for illegal dismissal W/N respondent was illegally
against Polyfoam and Cheng. dismissed from employment.
Thereafter, Precilla Gramaje HELD: (1) NO. The Court held
(also a petitioner) filed a Motion that Gramaje is a Labor-only
for Intervention claiming to be contractor pursuant to Art. 106
the real employer of of the Labor Code. First,
Gramaje has no substantial suddenly taken off the rack. His
capital or investment. The supervisor informed him that
presumption is that a contractor Polyfoams management decided
is a labor-only contractor unless to dismiss him due to infraction
he overcomes the burden of of company rule. Polyfoam did
proving that it has substantial not offer any explanation of
capital, investment, tools, and such dismissal. It, instead,
the like. Second, Gramaje did explained that respondents real
not carry on an independent employer is Gramaje. Gramaje,
business or undertake the on the other hand, denied the
performance of its service claim of illegal dismissal. She
contract according to its own shifted the blame on respondent
manner and method, free from claiming that the latter in fact
the control and supervision of its abandoned his work. And yet,
principal (Polyfoam), its respondents actions clearly
apparent role having been negate the intention to abandon
merely to recruit persons to his work. Petitioners failed to
work for Polyfoam. show any valid or authorized
(2) YES, an employer-employee cause under the Labor Code
relationship exists between which allowed it to terminate
respondent and Polyfoam. the services of respondent.
Finding that a contractor is a Neither was it shown that
labor-only contractor is respondent was given ample
equivalent to declaring that opportunity to contest the
there is an employer-employee legality of his dismissal. No
relationship between the notice of termination was given
principal and the employees of to him. Clearly, respondent was
the supposed contractor, and not afforded due process.
the labor-only contractor is CONCEPTS: (1) The test of
considered as a mere agent of independent contractorship is
the principal, the real employer. whether one claiming to be an
In this case, Polyfoam is the independent contractor has
principal employer and Gramaje contracted to do the work
is the labor-only contractor. according to his own methods
Polyfoam and Gramaje are, and without being subject to the
therefore, solidarily liable for the control of the employer, except
rightful claims of respondent. only as to the results of the
(3) YES, respondent was illegally work.
dismissed from employment. (2) Criteria in determining the
Respondents time card was existence of an independent and
permissible contractor Service Insurance System (GSIS)
relationship: [W]hether or not at the contract rate of P3,000.00
the contractor is carrying on an per guard per month. During the
independent business; the effectivity of the contract, LSWA
nature and extent of the work; requested the GSIS for an
the skill required; the term and upward adjustment of the
duration of the relationship; the contract rate which was
right to assign the performance subsequently approved
of a specified piece of work; the pursuant to RA 6727 known as
control and supervision of the the Wage Rationalization Act. In
work to another; the employers 1993, GSIS terminated the
power with respect to the hiring, Security Service Contract with
firing and payment of the LSWA. Complainants then filed
contractors workers; the control separate complaints against
of the premises; the duty to LSWA for underpayment of
supply the premises, tools, wages and non-payment of
appliances, materials, and labor; labor standard benefits from
and the mode, manner and 1991 to 1993.
terms of payment. LSWA alleged that complainants
were estopped from claiming
GSIS v NLRC and Lanting that they were underpaid
Summary: GSIS and Lanting because they were informed
Security and Watchman Agency that the pay and benefits given
was held jointly and severally to them were based on the
liable for the payment of contract rate of P103.00 per
complainants' salary eight hours of work or about
differentials as the joint and P3,100.00 per month. GSIS
several liability of the employer alleged that the Third-Party
or principal was enacted to Complaint states no cause of
ensure compliance with the action against it; that LSWA
provisions of the Labor Code obligated itself in the Security
particularly on statutory Service Contract to be solely
minimum wage. liable for the enforcement of
Facts: Tomas Lanting, doing and compliance with all existing
business under the name labor laws, rules and regulations
Lanting Security and Watchman and that GSIS fully paid the
Agency (LSWA) entered into a services of the security guards
Security Service Contract to as agreed upon in the Security
provide security guards to the Service Contract.
properties of the Government Labor Arbiter rendered a
Decision in favor of ART. 107 Indirect employer. The
complainants. NLRC upheld the provisions of the immediately
ruling of the Labor Arbiter. CA preceding Article shall likewise
held the GSIS jointly and apply to any person,
severally liable with LSWA for partnership, association or
complainants' money claims corporation which, not being an
pursuant to Articles 106 and 107 employer, contracts with an
of the Labor Code. independent contractor for the
Issue: Whether or not petitioner performance of any work, task,
GSIS and respondent Lanting job or project.
Security and Watchman Agency GSIS cannot evade liability by
should be held jointly and claiming that it had fully paid
severally liable for the payment complainants' salaries by
of complainants' salary incorporating in the Security
differentials. Service Contract the salary rate
Held: Yes. Articles 106 and 107 increases mandated.
of the Labor Code provide: The joint and several liability of
ART. 106. Contractor or the employer or principal was
subcontractor. Whenever an enacted to ensure compliance
employer enters into contract with the provisions of the Code,
with another person for the principally those on statutory
performance of the formers minimum wage. The contractor
work, the employees of the or subcontractor is made liable
contractor and of the latters by virtue of his or her status as
subcontractor, if any, shall be a direct employer, and the
paid in accordance with the principal as the indirect
provisions of this Code. employer of the contractors
In the event that the contractor employees. This liability
or subcontractor fails to pay the facilitates, if not guarantees,
wage of his employees in payment of the workers
accordance with this Code, the compensation, thus, giving the
employer shall be jointly and workers ample protection as
severally liable with his mandated by the 1987
contractor or subcontractor to Constitution. This is not unduly
such employees to the extent of burdensome to the employer.
the work performed under the Should the indirect employer be
contract, in the same manner constrained to pay the workers,
and extent that he is liable to it can recover whatever amount
employees directly employed by it had paid in accordance with
him the terms of the service contract
between itself and the Employees Union branded the
contractor. suspension of operations of the
Joint and solidary liability is F & B Department as arbitrary,
simply meant to assure discriminatory and constitutive
aggrieved workers of immediate of union-busting, so they filed a
and sufficient payment of what notice of strike with the DOLEs
is due them. This is in line with National Conciliation and
the policy of the State to protect Mediation Board (NCMB). An
and alleviate the plight of the Agreement was forged whereby
working class. WHEREFORE, the a special separation
petition is DENIED. benefit/retirement package for
WACK WACK GOLF & COUNTRY interested Wack Wack
CLUB, petitioner, vs. NATIONAL employees. One of the agreed
LABOR RELATIONS terms and condition states that
COMMISSION, All qualified employees who
Summary: Respondents were may have been separated from
held to have no cause of action the service under the above
against the petitioner for illegal package shall be considered
dismissal and damages since under a priority basis for
they availed the special employment by concessionaires
separation package. and/or contractors.
Consequently, BSMI was ruled to In 1997, Wack Wack entered
be an independent contractor as into a Management Contract
it satisfied the requisites of an with Business Staffing and
independent contractor and it Management, Inc. (BSMI), a
exercised control over the corporation engaged in the
employees. business as Management
Facts: In 1996, a fire destroyed a Service Consultant undertaking
large portion of the main and managing for a fee projects
clubhouse of the Wack Wack which are specialized and
Golf and Country Club (Wack technical in character. Pursuant
Wack), including its kitchen to the Agreement, the retired
which prompted it to suspend employees of Wack Wack by
the operations of the Food and reason of their experience were
Beverage (F & B) Department given priority by BSMI in hiring.
one (1) month thereafter. BSMI then undertook an
Notices to 54 employees (out of organizational analysis and
a complement of 85 employees manpower evaluation to
in the department) were also determine its efficacy, and to
sent out. The Wack Wack Golf streamline its operations. In the
course of its assessment, BSMI a petition for certiorari with the
saw that the positions of Court of Appeals which it
Respondents Cagasan and subsequently dismissed on the
Dominguez were redundant, ground that the petitioner
thus they were terminated. With therein failed to attach an
respect to Baluyot, he applied Affidavit of Service.
for the position of Chief Porter. Issue: (1) Whether or not
The position, however, was respondents Dominguez and
among those recommended to Cagasan should be reinstated to
be abolished by the BSMI, so he their positions
was offered the position of (2) Whether or not respondent
Caddie Master Aide. Baluyot BSMI is an independent
decided not to accept the contractor
position prompting BSMI to Held: (1) No. Respondents had
abolish the said position and no cause of action against the
Baluyot was dismissed from the petitioner for illegal dismissal
service. and damages. Respondents
Thereafter, the three employees availed the special separation
filed their respective complaints package offered by the
with the National Labor petitioner. This special
Relations Commission (NLRC) for separation package was thought
illegal dismissal and damages of and agreed by the two parties
against Wack Wack and BSMI. (Wack Wack and the Union) after
Labor Arbiter found that the a series of discussions and
dismissal of Dominguez and negotiations to avert any labor
Cagasan was for a valid and unrest due to the closure of
authorized cause, and dismissed Wack Wack. When the
their complaints. The Labor respondents voluntarily signed
Arbiter however, found that the their quitclaims and accepted
dismissal of Baluyot as Chief the separation package offered
Porter was unjustified and can by the petitioner, they,
not be considered redundant in thenceforth, already ceased to
the case at bar. NLRC rendered be employees of the petitioner.
its Decision ordering Wack Wack It is only where there is clear
to reinstate Dominguez and proof that the waiver was
Cagasan to their positions as wangled from an unsuspecting
they held that BSMI is a or gullible person, or the terms
contractor who merely supplies of settlement are
workers to respondent Wack unconscionable on its face, that
Wack. Wack Wack and BMSI filed the law will step in to annul the
questionable transaction. There supervision of the work to
being no employer-employee another; the employers power
relationship between the with respect to the hiring, firing,
petitioner and respondents and payment of the contractors
Cagasan and Dominguez, the workers; the control of the
latter have no cause of action premises; the duty to supply
for illegal dismissal and premises, tools, appliances,
damages against the petitioner. materials and labor; and the
(2) Yes. The ruling of the NLRC is mode, manner and terms of
wrong. An independent payment.
contractor is one who There is indubitable evidence
undertakes job contracting, i.e., showing that BSMI is an
a person who: (a) carries on an independent contractor,
independent business and engaged in the management of
undertakes the contract work on projects, business operations,
his own account under his own functions, jobs and other kinds
responsibility according to his of business ventures, and has
own manner and method, free sufficient capital and resources
from the control and direction of to undertake its principal
his employer or principal in all business. It had provided
matters connected with the management services to various
performance of the work except industrial and commercial
as to the results thereof; and (b) business establishments. As a
has substantial capital or legitimate job contractor, there
investment in the form of tools, can be no doubt as to the
equipments, machineries, work existence of an employer-
premises and other materials employee relationship between
which are necessary in the the contractor and the workers.
conduct of the business. The right to hire and fire is
Jurisprudence enumerates another element of the
several factors which may be employer-employee relationship
considered in determining which actually existed between
whether or not the contractor is the respondents and BSMI, and
carrying on an independent not with Wack Wack.
business; the nature and extent MANILA MEMORIAL PARK
of the work; the skill required; CEMETERY, INC. v. EZARD D.
the term and duration of the LLUZ
relationship; the right to assign Summary: An employer-
the performance of specified employee relationship exists
pieces of work; the control and between Manila Memorial and
respondent employees as Ward for their reinstatement and
Trading does not have payment of back wages.
substantial capital to be an The Labor Arbiter dismissed the
independent contractor nor is it complaint for failing to prove the
duly registered as a contractor existence of an employer-
with DOLE. employee relationship. NLRC
Facts: Petitioner Manila reversed the Labor Arbiter's
Memorial Park Cemetery, Inc. findings. The NLRC ruled that
(Manila Memorial) entered into a Ward Trading was a labor-only
Contract of Services with contractor and an agent of
respondent Ward Trading and Manila Memorial. The CA
Services (Ward Trading). The affirmed the ruling of the NLRC
Contract of Services provided and found the existence of an
that Ward Trading, as an employer-employee relationship
independent contractor, will between Manila Memorial and
render interment and respondents.
exhumation services and other Issue: Whether or not an
related work to Manila Memorial employer-employee relationship
in order to supplement exists between Manila Memorial
operations at Manila Memorial and respondents for the latter to
Park, Paranaque City. Among be entitled to their claim for
those assigned by Ward Trading wages and other benefits
to perform services at the Held: Yes. Article 106 of the
Manila Memorial Park were Labor Code states:
respondents Lluz, Corral, Art. 106. Contractor or
Fugaban, Balisi, Fabon, subcontractor. Whenever an
Aplicador, Curioso, Espares, and employer enters into a contract
Farinas. In 2007, respondents with another person for the
filed a Complaint for performance of the former's
regularization and Collective work, the employees of the
Bargaining Agreement benefits contractor and of the latter's
against Manila Memorial. Manila subcontractor, if any, shall be
Memorial refused the request paid in accordance with the
since respondents were provisions of this Code.
employed by Ward Trading, an In the event that the contractor
independent labor contractor. or subcontractor fails to pay the
Subsequently, respondents were wages of his employees in
dismissed by Manila Memorial. accordance with this Code, the
Thus, respondents amended the employer shall be jointly and
complaint to include the prayer severally liable with his
contractor or subcontractor to Service implies that respondent
such employees to the extent of MMPCI would sell subject
the work performed under the equipment to Ward at some
contract, in the same manner future time, the former failed to
and extent that he is liable to present any contract of sale as
employees directly employed by proof that, indeed, it actually
him. sold said equipment to Ward.
Labor-only contracting exists A perusal of the Service
when the contractor or Contract would also reveal that
subcontractor merely recruits, respondent Ward is still subject
supplies or places workers to to petitioner's control as it
perform a job, work or service specifically provides that
for a principal and any of the although Ward shall be in
following elements are present: charge of the supervision over
1) The contractor or individual respondents, the
subcontractor does not have exercise of its supervisory
substantial capital or investment function is heavily dependent
which relates to the job, work or upon the needs of petitioner
service to be performed and the Memorial Park. The contract
employees recruited, supplied further provides that petitioner
or placed by such contractor or has the option to take over the
subcontractor are performing functions of Ward's personnel if
activities which are directly it finds any part or aspect of the
related to the main business of work or service provided to be
the principal; or unsatisfactory.
2) The contractor does not Petitioner as well failed to
exercise the right to control the present any proof that Ward is
performance of the work of the duly registered as a contractor
contractual employee. with the Department of Labor
In the present case, Ward and Employment. Section 11 of
Trading does not have Department Order No. 18-02
substantial capital or investment mandates registration of
in the form of tools, equipment, contractors or subcontractors
machinery, work premises and with the DOLE. Failure to
other materials since it is Manila register shall give rise to the
Memorial which owns the presumption that the contractor
equipment used in the is engaged in labor-only
performance of work needed for contracting.
interment and exhumation In this case, Manila Memorial
services. While the Contract of failed to adduce evidence to
prove that Ward Trading had any contract are as follows:
substantial capital, investment B. Terms of Payment
or assets to perform the work FIRST PARTY [FPIC] shall pay the
contracted for. Thus, the SECOND PARTY [DGMS] a
presumption that Ward Trading contract price for services
is a labor-only contractor stands. rendered based on individual
Consequently, Manila Memorial timesheets prepared and
is deemed the employer of submitted by the SECOND
respondents. As regular PARTY....
employees of Manila Memorial, xxx
respondents are entitled to their C. Other Terms and Conditions
claims for wages and other SECOND PARTY shall undertake
benefits as awarded by the FIRST PARTYs projects only if
NLRC and affirmed by the CA. covered by an approved Project
FPIC v Calimbas GR 179256 July Contract (Appendix-B) which the
10, 2013 FIRST PARTY will issue to the
Facts: Private respondent First SECOND PARTY when the need
Philippine Industrial Corporation arises. The Project Contract shall
(FPIC) is a corporation engaged indicate the scope of work to be
in the transportation of done, duration and the
petroleum products by pipeline. manpower required to
On the other hand, Raquel undertake the work. The
Calimbas and Luisa Mahilom composition of the workers to be
were engaged by De Gusman assigned to a specific
Manpower Services (DGMS) to undertaking shall be agreed
perform secretarial and clerical upon between the FIRST PARTY
jobs for FPIC. DGMS is engaged and the SECOND PARTY;
in the business of supplying SECOND PARTY shall assign to
manpower. FIRST PARTY competent
FPIC entered into a Contract of personnel to do what is required
Special Services with DGMS, in accordance with the Project
wherein the latter agreed to Contract. FIRST PARTY shall
undertake some aspects of have the right to request for
building and grounds replacement of an assigned
maintenance at FPIC's premises, personnel who is observed to be
offices and facilities, as well as non-productive or unsafe, and if
to provide clerical and other confirmed by its own
utility services as may required investigation and findings,
from time to time by FPIC. The SECOND PARTY shall replace
important portions of the said such personnel;
SECOND PARTY shall provide the petitioners that their services to
maintenance equipment and the company would no longer be
tools necessary to complete needed by July 31, 2001 as a
assigned works. Parties hereto result of the "Pace-Setting"
shall agree on the equipment, Study conducted by an outside
tools and supplies to be consultant. Accordingly, on July
provided by SECOND PARTY 9, 2001, Priscilla de Leon,
prior to the start of assigned Treasurer of DGMS, formally
work; notified both the petitioners that
SECOND PARTY shall be liable their respective work
for loss and/or damage to assignments in FPIC were no
SECOND PARTYs property, longer available to them
found caused by willful act or effective July 31, 2001, citing
negligence of SECOND PARTYs the termination of the Project
personnel; and Contract with FPIC as the main
There shall be no employer- reason thereof. On August 3,
employee relationship between 2001, petitioners Calimbas and
the FIRST PARTY, on the one Mahilom signed quitclaims,
hand, and the SECOND PARTY, releasing and discharging DGMS
and the person who the from whatever claims that they
SECOND PARTY may assign to might have against it by virtue
perform the services called for, of their past employment, upon
on the other.... receipt of the sums of
xxx P17,343.10 and P23,459.14,
Pursuant to the said Contract, respectively.
petitioner Raquel Calimbas and Despite having executed the
Luisa Mahilom were engaged by said quitclaims, the petitioners
the DGMS to render services to still filed a Complaint against
FPIC. Thereat, petitioner FPIC for illegal dismissal and for
Calimbas was assigned as a the collection of monetary
department secretary at the benefits, damages and
Technical Services Department attorneys fees, alleging that
beginning June 3, 1996, while they were regular employees of
petitioner Mahilom served as a FPIC after serving almost five (5)
clerk at the Money Movement years, and that they were
Section of the Finance Division dismissed without cause.
starting February 13, 1996. Postition of the Petitioners: They
On June 21, 2001, FPIC, through claimed that they were regular
its Human Resources Manager, employees of FPIC for having
Lorna Young, informed the served the same for almost five
years. Also, claimed that they LA's Decision: holding that
were illegally dismissed when respondents were regular
they were relieved from their employees of petitioner, and
work assignments without valid that they were illegally
and serious resons therefor. dismissed when their
The petitioners averred that employment was terminated
DGMS did not have substantial without just or authorized cause.
capital or investment by way of The fallo reads:
tools, equipment, machines, WHEREFORE, premises
work places and other materials. considered, let the judgment be,
They claimed that they only as it is hereby rendered,
used office equipment and declaring complainants
materials owned by FPIC at its dismissal illegal, and ordering
offices in Ortigas Center, Pasig the respondent, as follows:
City. DGMS never exercised 1) To reinstate complainants to
control over them in all matters their former positions without
related to the performance of loss of seniority rights and other
their work. In fact, DGMS never privileges;
maintained any representative 2) To pay complainants, Raquel
at the FPICs office to supervise M. Calimbas the amount of
or oversee their work. They P131,555.19; and Luisa P.
insisted that their direct Mahilom, the amount of
superiors, who were managerial P115,403.14 representing their
employees of FPIC, had control full backwages, from the time
over them since the latter made their salaries were withheld from
sure that they always complied them up to the date of their
with the policies of FPIC. actual reinstatement;
Position of Respondents: FPIC 3) To pay the complainants the
insisted that the complaint amount equivalent to ten (10%)
should be dismissed because percent of the total judgment
there were no employer- award, as and for attorneys
employee relationship between fees.
them. FPIC claimed that the The amount received by
petitioners were never been complainants, Raquel M.
their employees. FPIC insisted Calimbas in the amount of
that their true employer was P17,343.10, and Luisa P.
DGMS considering that the Mahilom, the amount of
petitioners were hired by DGMS P23,459.14 under the quitclaims
and assigned them to FPIC to that they signed must be
render such services. deducted from the awards
herein made. accordance with this Code, the
NLRC's Decision: dismissed the employer shall be jointly and
appeal of FPIC and upheld LA's severally liable with his
decision. contractor or subcontractor to
MR w/ NLRC: NLRC found that such employees to the extent of
FPIC is free from any liability the work performed under the
because DGMS was the contract, in the same manner
employer of the petitioners. and extent that he is liable to
Another MR w/ NLRC: affirmed employees directly employed by
the latest decision. him.
CA's Decision: NLRC's The Secretary of Labor may, by
resolutions were reversed and appropriate regulations, restrict
set aside. and reinstating the or prohibit the contracting-out of
LA's Resolution, in favor of the labor to protect the rights of
laborers. workers established under the
Issues: (1) WON respondents are Code. In so prohibiting or
employees of FPIC; and restricting, he may make
(2) WON respondents were appropriate distinctions
lawfully dismissed from their between labor-only contracting
employment and job-contracting as well as
Held: (1) Yes. the court found differentiations within these
that DGMS is under a "labor- types of contracting and
only" contractor. Which makes determine who among the
them a mere agent and the parties involved shall be
court reiterated that the considered the employer for
employer of the herein laborers purposes of this Code, to
is FPIC. prevent any violation or
Article 106. Contractor or circumvention of any provision
subcontractor. Whenever an of this Code.
employer enters into a contract There is "labor-only" contracting
with another person for the where the person supplying
performance of the formers workers to an employer does
work, the employees of the not have substantial capital or
contractor and of the latters investment in the form of tools,
subcontractor, if any, shall be equipment, machineries, work
paid in accordance with the premises, among others, and
provisions of this Code. the workers recruited and
In the event that the contractor placed by such person are
or subcontractor fails to pay the performing activities which are
wages of his employees in directly related to the principal
business of such employer. In supply workers to an employer
such cases, the person or shall be deemed to be engaged
intermediary shall be considered in labor-only contracting where
merely as an agent of the such person:
employer who shall be (1)
responsible to the workers in the Does not have substantial
same manner and extent as if capital or investment in the
the latter were directly form of tools, equipment,
employed by him. machineries, work premises and
In the same manner, Sections 8 other materials; and
and 9 of DOLE Department (2)
Order No. 10, Series of 1997, The workers recruited and
state: placed by such persons are
Sec. 8. Job contracting. There performing activities which are
is job contracting permissible directly related to the principal
under the Code if the following or operations of the employer in
conditions are met: which workers are habitually
(1) employed.
The contractor carries on an (b)
independent business and Labor-only contracting as
undertakes the contract work on defined herein is hereby
his own account under his own prohibited and the person acting
responsibility according to his as contractor shall be
own manner and method, free considered merely as an agent
from the control and direction of or intermediary of the employer
his employer or principal in all who shall be responsible to the
matters connected with the workers in the same manner
performance of the work except and extent as if the latter were
as to the results thereof; and directly employed by him.
(2) (c)
The contractor has substantial For cases not falling under this
capital or investment in the Article, the Secretary of Labor
form of tools, equipment, shall determine through
machineries, work premises, appropriate orders whether or
and other materials which are not the contracting out of labor
necessary in the conduct of his is permissible in the light of the
business. circumstances of each case and
Sec. 9. Labor-only contracting. after considering the operating
(a) needs of the employer and the
Any person who undertakes to rights of the workers involved. In
such case, he may prescribe day.
conditions and restrictions to On 1 June, 1988, Hyatt Baguio's
insure the protection and General Manager wrote the
welfare of the workers. President of Vallum advising that
(2) No. FPIC failed to show any effective 1 july 1988, the
valid or just cause under the contract of security services
Labor Code on which it may would be terminated.
justify the termination of Vallum informed Mr. Maulbecker,
services of respondents. Also, on 22 June 1988, that it was
apart from notifying that their agreeable to the termination of
services had already been the contract.
terminated, petitioner failed to On 30 June 1988, private
comply with the rudimentary respondents, who were security
requirement of notifying guards provided by Vallum to
respondents regarding the acts Hyatt Baguio, were informed by
or omissions which led to the Vallum's Personnel Officer that
termination of their services as the contract between the two
well as giving them an ample (2) had already expired. Private
opportunity to contest the respondents were directed to
legality of their dismissal. report to Vallum's head office at
Having failed to establish Sucat Road, in Muntinlupa,
compliance with the Metropolitan Manila, not later
requirements of termination of than 15 July 1988 for re-
employment under the Labor assignment. They were also told
Code, respondents dismissal is that failure to report at Sucat
tainted with illegality. would be taken to mean that
Vallum v NLRC GR nos 97320-27 they were no longer interested
July 30, 1993 in being re-assigned to some
Facts: On 1 September 1986, other client of Vallum.
petitioner Baguio Leisure None of the private respondents
Corporation (Hyatt Terraces reported at Sucat for re-
Baguio) ("Hyatt Baguio") and assignment. Instead, between
petitioner Vallum Security July and September 1988,
Services ("Vallum") entered into private respondents filed several
a contract for security services complaints against petitioners in
under the terms of which Vallum the National Labor Relations
agreed to protect the properties Commission's Office ("NLRC") in
and premises of Hyatt Baguio by Baguio City for illegal dismissal
providing fifty (50) security and unfair labor practices; for
guards, on a 24-hour basis, a violation of labor standards
relating to underpayment of power of dismissal; and 4. the
wages, premium holiday and power to control the employees'
restday pay, uniform allowances conduct.
and meal allowances. They In respect of the selection and
prayed for reinstatement with engagement of the employees,
full backwages. The several the records here show that
cases were consolidated private respondents filled up
together. Hyatt employment application
Labor Arbiter: rendered a forms and submitted the
decision dismissing the executed forms directly to the
complaints. He found Vallum to Security Department of Hyatt
be an independent contractor Baguio. In respect of the mode
and, consequently declined to or manner of payment of wages,
hold Hyatt Baguio liable for private respondents submitted
dismissal of private in evidence four hundred
respondents. NLRC: reveresed twenty-three (423) pay slips
and set aside the resolution of (Exhibits "A" for complainants-
the LA. adding that respondent private respondents), which
Hyatt Terraces Baguio to bore Hyatt Baguio's logo.
reinstate the complainant from Turning to the matter of location
their former positions with full of the power of dismissal, we
backwages limited to 1 year. note that the contract provided
Issue: WON the security guards that upon loss of confidence on
are employees of Hyatt Baguio. the part of Hyatt Baguio vis-a-
Held: Yes. The court found that vis any security guard furnished
there is an employer-employee by Vallum, such security guard
relationship between the "may be changed immediately
laborers and Hyatt Baguio. upon the request to [Vallum] by
In determining whether a given [Hyatt Baguio]."
set of circumstances constitute Notwithstanding the terms of
or exhibit an employer- the formal contract between
employee relationship, the petitioners, the NLRC found that,
accepted rule is that the in operative fact, it was Hyatt
elements or circumstances Baguio's Chief Security Officer
relating to the following matters who exercised the power of
shall be examined and enforcing disciplinary measures
considered: over the security guards.
1. the selection and Coming then to the location of
engagement of the employee;. the power of control over the
2. the payment of wages; 3. the activities of the security guards,
the following factors lead us to employer shall be deemed to be
the conclusion that power was engaged in labor-only
effectively located in Hyatt contracting where such person:
Baguio rather than in Vallum: (1) Does not have substantial
(a) the assignments of particular capital or investment in the
security guards was subject to form of tools, equipment,
the approval of Hyatt Baguio's machineries, work premises and
Chief Security Officer; other materials; and
(b) promotions of the security (2) The workers recruited and
guards from casual to regular placed by such person are
employees were approved or performing activities which are
ratified by the Chief Security directly related to the principal
Officer of Hyatt Baguio; business or operations of the
(c) Hyatt Baguio's Chief Security employer in which workers are
Officer decided who among the habitually employed.
various security guards should (b) Labor-only contracting as
be an duty or on call, as well as defined herein is hereby
who, in cases of disciplinary prohibited and the person acting
matters, should be suspended as contractor shall be
or dismissed; considered merely as an agent
(d) the petitioners themselves or intermediary of the employer
admitted that Hyatt Baguio, who shall be responsible to the
through its Chief Security workers in the same manner
Officer, awarded citations to and extent as if the latter were
individual security guards for directly employed by him.
meritorious services. xxx xxx xxx
We find no basis for overturning Sec. 8. Job contracting. There
the conclusions reached by the is job contracting permissible
NLRC that Vallum, in the specific under the Code if the following
circumstances of this case, was conditions are met:
not an independent contractor (1) The contractor carries on an
but was, rather, a "labor-only" independent business and
contracor. Section 9 of Rule VII undertakes the contract work on
of Book III entitled "Conditions of his own account under his own
Employment" of the Omnibus responsibility according his own
Rules Implementing the Labor manner and method, free from
Code provides as follows: the control and direction of his
Sec. 9. Labor-only contracting. employer or principal in all
(a) Any person who undertakes matters connected with the
to supply workers to an performance of the work except
as to results thereof; and issued a Letter dated August 30,
(2) The contractor has 2001 terminating the
substantial capital or investment Agreement effective October 1,
in the form of tools, equipment, 2001.
machineries, work premises, Despite the termination of the
and other materials which are Agreement, however,
necessary in the conduct of his petitioners continued to secure
business. the premises of their assigned
In the case at bar, we noted that office. They were allegedly
Vallum did not have a branch directed to remain at their post
office in Baguio City and that by representatives of
Hyatt Baguio provided Vallum respondent. In support of their
with offices at Hyatt's own contention, petitioners provided
premises and allowed Vallum to the Labor Arbiter with copies of
use its Security Department in petitioner Locsins pay slips for
the processing of applications. the period of January to
WHEREFORE, premises September 2002.
considered, the Petition for Then, on September 30, 2002,
Certiorari is hereby DISMISSED petitioners services were
for lack of merit. Costs against terminated.
petitioners. Thus, petitioners filed a
Locsin v PLDT GR 185251 Oct. 2, complaint before the Labor
2009 Arbiter for illegal dismissal and
Facts: On November 1, 1990, recovery of money claims such
respondent Philippine Long as overtime pay, holiday pay,
Distance Telephone Company premium pay for holiday and
(PLDT) and the Security and rest day, service incentive leave
Safety Corporation of the pay, Emergency Cost of Living
Philippines (SSCP) entered into a Allowance, and moral and
Security Services Agreement3 exemplary damages against
(Agreement) whereby SSCP PLDT.
would provide armed security LA's Decision: Found PLDT liable
guards to PLDT to be assigned for illegal dismissal. It was
to its various offices. explained in the Decision that
Pursuant to such agreement, petitioners were found to be
petitioners Raul Locsin and employees of PLDT and not of
Eddie Tomaquin, among other SSCP. Such conclusion was
security guards, were posted at arrived at with the factual
a PLDT office. finding that petitioners
On August 30, 2001, respondent continued to serve as guards of
PLDTs offices. As such no employer-employee
employees, petitioners were relationship between the parties
entitled to substantive and from the time of petitioners first
procedural due process before assignment to respondent by
termination of employment. The SSCP in 1988 until the alleged
Labor Arbiter held that termination of the Agreement
respondent failed to observe between respondent and SSCP.
such due process requirements. In fact, this was the conclusion
Awarding Raul Locsin and Eddie that was reached by this Court
Tomaquin, P127,500 each as in Abella v. Philippine Long
Separation Pay, and P240, Distance Telephone Company,7
954.67 each as Backwages. where we ruled that petitioners
Total of P736, 909.34 therein, including herein
NLRC: affirmed LA's Decision petitioners, cannot be
CA: applied the four-fold test to considered as employees of
determine the existence of an PLDT. It bears pointing out that
employer-employee relationship petitioners were among those
but did not find such declared to be employees of
relationship. It determined that their respective security
SSCP was not a labor-only agencies and not of PLDT.
contractor and was an The only issue in this case is
independent contractor having whether petitioners became
substantial capital to operate employees of respondent after
and conduct its own business. the Agreement between SSCP
CA granted the appeal of PLDT. and respondent was terminated.
Issues: (1) WON complainants' This must be answered in the
extended services to the affirmative.
respondent for one year from Notably, respondent does not
the effectivity of the termination deny the fact that petitioners
of the contract from the agency remained in the premises of
SSPC constitutes an employer- their offices even after the
employee relationship between Agreement was terminated. And
respondent and the it is this fact that must be
complainant. explained.
(2) WON complainants are To recapitulate, the CA, in
illegally dismissed rendering a decision in favor of
Held. (1) Yes. An Employer- respondent, found that: (1)
Employee Relationship Existed petitioners failed to prove that
Between the Parties. SSCP was a labor-only
It is beyond cavil that there was contractor; and (2) petitioners
are employees of SSCP and not their post until September 30,
of PLDT. 2002. While respondent denies
In arriving at such conclusions, the alleged circumstances
the CA relied on the provisions stated by petitioners, that they
of the Agreement, wherein SSCP were told to remain at their post
undertook to supply PLDT with by respondents Security
the required security guards, Department and that they were
while furnishing PLDT with a informed by SSCP Operations
performance bond in the Officer Eduardo Juliano that their
amount of PhP 707,000. salaries would be coursed
Moreover, the CA gave weight to through SSCP as per
the provision in the Agreement arrangement with PLDT, it does
that SSCP warranted that it not state why they were not
"carry on an independent made to vacate their posts.
business and has substantial Respondent said that it did not
capital or investment in the know why petitioners remained
form of equipment, work at their posts.
premises, and other materials (2) Yes. Evidently, respondent
which are necessary in the having the power of control over
conduct of its business." petitioners must be considered
Further, in determining that no as petitioners employerfrom
employer-employee relationship the termination of the
existed between the parties, the Agreement onwardsas this
CA quoted the express provision was the only time that any
of the Agreement, stating that evidence of control was
no employer-employee exhibited by respondent over
relationship existed between the petitioners and in light of our
parties herein. The CA ruling in Abella.12 Thus, as aptly
disregarded the pay slips of declared by the NLRC,
Locsin considering that they petitioners were entitled to the
were in fact issued by SSCP and rights and benefits of employees
not by PLDT. of respondent, including due
From the foregoing explanation process requirements in the
of the CA, the fact remains that termination of their services.
petitioners remained at their Both the Labor Arbiter and NLRC
post after the termination of the found that respondent did not
Agreement. Notably, in its observe such due process
Comment dated March 10, requirements. Having failed to
2009,8 respondent never denied do so, respondent is guilty of
that petitioners remained at illegal dismissal.
WHEREFORE, we SET ASIDE the over the business and continued
CAs May 6, 2008 Decision and to provide manpower services to
November 4, 2008 Resolution in Petron. Petitioners were among
CA-G.R. SP No. 97398. We those recruited by Romualdo D.
hereby REINSTATE the Labor Gindang Contractor and RDG to
Arbiters Decision dated work in the premises of the said
February 13, 2004 and the bulk plant, together with the
NLRCs Resolutions dated other employees that were hired
October 28, 2005 and August by RDG.
28, 2006. On June 1, 2000, Petron and
Alilin v Petron GR 177592 June RDG entered into a Contract for
9, 2014 Services. for the period from
Note: A contractor is presumed June 1, 2000 to May 31, 2002,
to be a labor-only contractor, whereby RDG undertook to
unless it proves that it has the provide Petron with janitorial,
substantial capital, investment, maintenance, tanker receiving,
tools and the like. However, packaging and other utility
where the principal is the one services in its Mandaue Bulk
claiming that the contractor is a Plant. This contract was
legitimate contractor, the extended on July 31, 2002 and
burden of proving the supposed further extended until
status of the contractor rests on September 30, 2002. Upon
the principal. expiration thereof, no further
Facts: Petron is a domestic renewal of the service contract
corporation engaged in the oil was done.
business. It owns several bulk Petitioners filed complaints
plants in the country for against Petron and RDG
receiving, storing and contending that they were
distributing its petroleum illegally dismissed, praying for
products. money claims.
In 1968, Romualdo D. Gindang LA: ruled that petitioners are
Contractor, which was owned regular employees of Petron. It
and operated by Romualdo D. found that their jobs were
Gindang (Romualdo), started directly related to Petrons
recruiting laborers for fielding to business operations; they
Petrons Mandaue Bulk Plant. worked under the supervision of
When Romualdo died in1989, Petrons foreman and
his son Romeo D. Gindang supervisor; and they were using
(Romeo), through Romeo D. Petrons tools and equipment in
Gindang Services(RDG), took the performance of their works.
The Labor Arbiter also found discussed below, that the works
that Petron merely utilized RDG performed by petitioners were
in its attempt to hide the directly related to Petrons
existence of employee-employer business, another factor which
relationship between it and negates Petrons claim that RDG
petitioners and avoid liability is an independent contractor.
under labor laws. And there Petrons power of control over
being no showing that petitioners exists in this case.
petitioners dismissal was for "[A] finding that a contractor is
just or authorized cause, the a labor-only contractor is
Labor Arbiter declared them to equivalent to declaring that
have been illegally dismissed. there is an employer-employee
Awarding the petitioners in total relationship between the
of P 1M. principal and the employees of
NLRC and MR: Dismissed for lack the supposed contractor." In this
of merit case, the employer employee
CA: found no employer- relationship between Petron and
employee relationship between petitioners becomes all the
the parties. Due to the cases more apparent due to the
that doesnt show that presence of the power of control
petitioners were directly hired, on the part of the former over
selected or employed by Petron. the latter.
Also, RDG is responsible for In sum, the Court finds that RDG
paying the petitioners' wages. is a labor-only contractor. As
CA ruled that CA is an such, it is considered merely as
independent labor contractor an agent of Petron.
with sufficient capitalization and Consequently, the employer-
investment. employee relationship which the
Issue: Wether RDG is an Court finds to exist in this case
independent labor contractor or is between petitioners as
or a labor-only contractor. employees and Petron as their
Held: Court ruled that RDG is a employer. Petron therefore,
labor-only contractor, reinstating being the principal employer
the labor arbiter's decision. and RDG, being the labor-only
Petron failed to discharge the contractor, are solidarily liable
burden of proving that RDG is a for petitioners' illegal dismissal
legitimate contractor. Hence, and monetary claims.
the presumption that RDG is a PAL v. LIGAN
labor-only contractor stands. SUMMARY: Respondents were
The Court also finds, as will be consequently declared as
petitioners regular employees are still in the actual employ of
who are entitled to the salaries, petitioner.
allowances, and other Respondents disclose that
employment benefits under the respondents have all been
pertinent Collective Bargaining terminated in the guise of
Agreement. Herein, petitioner retrenchment. Joining such
prays for a reconsideration while account, petitioner reveals that
respondents for clarification 13 out of the 25 respondents
and/or reconsideration of the filed an illegal dismissal case,
Decision. which is pending before the CA.
FACTS: Petitioners are Respondents add that the CA
maintaining its position that held the illegal dismissal case in
respondents were employed by abeyance until after this Court
Synergy, and to reinstate rules on the present case.
respondents as regular Petitioner also urges the Court
employees is iniquitous since it to examine the cases of
would be compelled to employ respondents Roque Pilapil and
personnel more than what its Benedicto Auxtero. Pilapil was
operations require. It adds that later terminated for submitting
the Court should declare that falsified academic credentials.
reinstatement is no longer an Pilapils complaint for illegal
appropriate relief in view of the dismissal was dismissed by the
long period of time that had labor arbiter, whose decision
elapsed. was reinstated with modification
For their part, respondents, by the CA. On Pilapils appeal,
deducing from the Decision that this Court declared the case
their termination was found to terminated when Pilapil failed to
be illegal, posit that the portion file his intended petition. With
of the Decision ordering this, petitioner claims that it
petitioner to accept them should already complied with the
also mean to reinstate them judgment awarding separation
with backwages. Respondents pay representing financial
additionally pray for the award assistance to Pilapil during the
to them of attorneys fees, albeit pendency of the present case.
they admit that they failed to Petitioner also informs the Court
raise it as an issue. that Auxtero already satisfied
Both parties point out that the the judgment rendered in the
Courts Decision presupposes or amount of P1.3 Million, and that
was based on the erroneous Auxtero had waived
assumption that respondents reinstatement.
ISSUE: (1) WON the cases of dismissal of respondents
Pilapil and Auxtero should affect because the matter of just or
the courts decision authorized cause is beyond the
(2) WON the courts decision on issues of the case. That is why
the regular status of the Court did not order
respondents should be deemed reinstatement for such relief
to be without prejudice to the presupposes a finding of illegal
resolution of the issue of illegal dismissal in the proper case
dismissal in the proper case which, as the parties now
(3) WON award of attorneys fees manifest, pends before the
be granted to respondents, appellate court.
albeit they admit that they Petitioner, for the first time,
failed to raise it as an issue. revealed the matter of
HELD: (1) YES. The Court finds termination and the allegation
that a modification of the of financial woes in its MR
Decision is in order, the claims before the CA not by way of
with respect to Pilapil and defense to a charge of illegal
Auxtero having been deemed dismissal but to manifest that
extinguished even before the supervening events have
promulgation of the Decision. rendered it impossible for
That Pilapil was a regular petitioner to comply with the
employee yields to the final order to accept respondents as
finding of a valid dismissal in the regular employees.
supervening case involving his The Courts finding that
own misconduct, while Auxteros respondents are regular
attempt at forum-shopping employees of petitioner neither
should not be countenanced. frustrates nor preempts the CA
(2) YES. While this Courts proceedings in resolving the
Decision ruled on the regular issue of retrenchment as an
status of respondents, it must authorized cause for
be deemed to be without termination. If an authorized
prejudice to the resolution of the cause for dismissal is later found
issue of illegal dismissal in the to exist, petitioner would still
proper case. The subject of the have to pay respondents their
Decision was respondents corresponding benefits and
complaints for regularization salary differential up to June 30,
and under-/non-payment of 1998. Otherwise, if there is a
benefits. The Court did not and finding of illegal dismissal, an
could not take cognizance of the order for reinstatement with full
validity of the eventual backwages does not conflict
with the Courts declaration of rank, up to June 30, 1998,
the regular employee status of without prejudice to the
respondents. resolution of the illegal dismissal
(3) NO. As to the belated plea of case.
respondents for attorneys fees, There being no data from which
suffice it to state that parties this Court may determine the
who have not appealed cannot monetary liabilities of petitioner,
obtain from the appellate court the case is REMANDED to the
any affirmative reliefs other Labor Arbiter solely for that
than those granted, if any, in purpose.
the decision of the lower AKLAN v. SAN MIGUEL
tribunal. Since respondents did SUMMARY: The dichotomy
not file a motion for between impermissible labor-
reconsideration of the appellate only contracting and legitimate
courts decision, much less job contracting was discussed in
appeal therefrom, they can this labor case.
advance only such arguments FACTS: Respondent BMA
as may be necessary to defeat Philasia, Inc. (BMA) is a
petitioners claims or to uphold domestic corporation engaged
the appealed decision, and in the business of transporting
cannot ask for a modification of and hauling of cargoes, goods,
the judgment in their favor in and commodities of all kinds
order to obtain other positive with Arlene Eusebio as its
reliefs. President.
WHEREFORE, the Decision is Petitioners, numbering forty-
MODIFIED. seven (47) in all, are the former
Dispositive portion: Petitioner is employees of respondent BMA
ORDERED to recognize at respondent San Miguel
respondents as its regular Corporations (SMC) warehouse.
employees in their same or Subsequently, a number of
substantially equivalent petitioners went to DOLE District
positions, and pay the wages Office to file a complaint against
and benefits due them as BMA and Eusebio for
regular employees plus salary underpayment of wages and
differential corresponding to the non-payment of premium pay
difference between the wages for rest day, 13th month pay,
and benefits given them and and service incentive leave pay.
those granted to petitioners Thereafter, Petitioner Elmer
other regular employees of the Caboteja was charged with
same or substantially equivalent insubordination and disrespect
to superior, failure to properly illegal dismissal. All the
perform his job assignment, and complaints for illegal dismissal
unauthorized change of were consolidated.
schedule. He was directed to Petitioners alleged that they
submit his written explanation were illegally dismissed after
within forty-eight (48) hours. His filing a complaint for
job was then terminated for the underpayment of wages and
offenses he committed. He then non-payment of benefits before
filed a complaint for illegal the DOLE; they were terminated
dismissal against BMA. after staging a peaceful picket
On various dates thereafter, to protest the non-payment of
BMA agreed to a settlement with their claims. According to them,
some of the complainants in the BMA is a labor-only contractor
case for underpayment of and SMC was their true
wages. 11 of the present employer. The manner and
petitioners executed quitclaims means by which they performed
and releases in favor of BMA their work were controlled by
and Eusebio in the presence of SMC through its Sales Logistic
DOLE district officers. BMA Coordinator who was overseeing
refused to settle the claim of their performance everyday.
other complainants. Private respondents BMA and
Thereafter, petitioners Joan Eusebio countered that
Erico Dumalagan and Ronaldo petitioners Caboteja,
Salvador were also terminated Dumalagan, and Salvador were
for failure to perform their job validly and justly dismissed.
responsibilities. They also filed They were among the eleven
complaints for illegal dismissal who already signed quitclaims
against BMA. and releases before the DOLE
Petitioners held a picket at the district office after receiving an
warehouse premises to protest amount in settlement of their
BMAs refusal to pay the claim claims. As for the rest of
for underpayment of the rest of petitioners (36 complainants),
the workers. This picket there was no illegal dismissal to
disrupted the business speak of. Said employees
operations of private simultaneously did not go back
respondents, prompting BMA to to work for no apparent reason
terminate their services. on October 18, 2001.
Subsequently, petitioners filed Private respondent SMC
separate complaints against maintained that it had no
BMA, Eusebio, and SMC for employer-employee relationship
with petitioners who were hired explanations unacceptable,
and supervised exclusively by respondents dismissed them.
BMA pursuant to a warehousing Hence, they are not entitled to
and delivery agreement in separation pay.
consideration of a fixed monthly As regards the other
fee. complainants, there is no
Labor Arbiter and NLRC Ruling showing that they were illegally
Labor Arbiter Veneranda C. dismissed from their jobs by
Guerrero found respondent BMA BMA. They have not given
liable for illegal dismissal and details on to whom they
ordered the reinstatement of reported for work, who barred
petitioners. She ruled that the them from entering the
evidence presented duly respondents premises and from
established that BMA was a working, in so many words how
legitimate independent they were told that they were
contractor and the actual already dismissed. The only
employer of petitioners. Its evident fact is that they just
failure, however, to comply with stopped reporting for work
the registration and reportorial beginning October 18, 2001
requirements of the DOLE without informing BMA why
rendered SMC, its principal, there were doing so.
directly liable to the claims of CAs Ruling
petitioners. Thus, BMA and SMC Petitioners filed a Rule 65
were found jointly and severally petition with the CA. The CA
liable for the payment of denied the petition, affirming in
petitioners backwages and full the NLRCs decision. In ruling
money claims. against petitioners, the CA
Respondents appealed the found that the NLRC committed
decision of the Labor Arbiter to no reversible error or grave
the NLRC. The NLRC reversed abuse of discretion in ruling that
the Labor Arbiter disposition and petitioners were not illegally
ruled that there was no illegal dismissed but actually refused
dismissal. The NLRC found that to report back to work after
petitioners Caboteja, staging a surprise stoppage that
Dumalagan, and Salvador were paralyzed respondent BMAs
separated from their jobs for business operations at the Pasig
just and valid causes. They were warehouse.
given the opportunity to explain ISSUE: (1) WON the CA
their sides. They were asked to committed a serious legal error
explain and finding their in not ruling that respondent
San Miguel Corporation and subsequent complaint for illegal
respondent Arlene Eusebio are dismissal, despite the fact that
all solidarily liable for petitioners the said complaint was not yet
money claims. in existence at the time the
(2) WON the CA committed a quitclaims were executed.
serious legal error in refusing to HELD: (1) NO. The Court
hold that respondent SMC was affirmed the CAs observation
petitioners real employer that respondent BMA is the true
despite the fact that respondent employer of petitioners who
BMA was not duly registered should be held directly liable for
with the DOLE and caused the their claims.
workers to perform tasks A finding that a contractor is a
directly related to the business labor-only contractor, as
of SMC and under the latters opposed to permissible job
supervision. contracting, is equivalent to
(3) WON the CA committed a declaring that there is an
legal error and acted with grave employer-employee relationship
abuse of discretion in holding between the principal and the
that petitioners Elmer Caboteja, employees of the supposed
Joan Erico Dumalagan, and contractor, and the labor-only
Ronaldo Salvador were not contractor is considered as a
illegally dismissed from their mere agent of the principal, the
jobs, despite a previous ruling of real employer.
the Labor Arbiter to the Both the Labor Arbiter and the
contrary. NLRC found that the
(4) WON the CA seriously employment contracts of
committed an error of law in petitioners duly prove that an
holding that the rest of the employer-employee relationship
petitioners abandoned their jobs existed between petitioners and
and were not dismissed BMA. In its ruling, the NLRC
therefrom, contrary to the considered the following
findings of the Labor Arbiter who elements to determine the
heard the case. existence of an employer-
(5) The CA committed a serious employee relationship: (1) the
legal error in ruling that the selection and engagement of
quitclaims executed by eleven the workers; (2) power of
(11) of the petitioners, in dismissal; (3) the payment of
relation to their claims for wages by whatever means; and
underpayment of wages before (4) the power to control the
the DOLE, also barred their workers conduct. All four
elements were found by the staged a picket. The CA
NLRC to be vested in BMA. This observed under the factual
NLRC finding was affirmed by circumstances, it clearly
the CA. appears that petitioners refused
(2) NO. The Court ruled that the to report back to their work in
employer-employee relationship order to force their employer
between BMA and petitioners is BMA to give in to their
not tarnished by the absence of immediate demand for the
registration with DOLE as an salary differentials and unpaid
independent job contractor on benefits subject of their
the part of BMA. The absence of complaint with the DOLE.
registration only gives rise to Hence, BMA cannot be held
the presumption that the liable for illegal dismissal.
contractor is engaged in labor- Their claim of having been
only contracting, a presumption prevented from entering the
that respondent BMA ably work premises was not given
refuted. due weight for no particulars
(3) NO. The Court affirmed the was even alleged by them in
CA when it ruled that illegal their report back to their jobs,
dismissal was absent. who prevented their entry to the
The records fully disclose that company premises and details
petitioners Caboteja, as to what steps they took to
Dumalagan, and Salvador were bring the matter to the attention
separated from their jobs for of DOLE District Office wherein
just and valid causes. Caboteja their complaint for labor
was cited for violation of standards violation was already
company rules and regulations pending.
and disrespectful conduct. (5) NO. The Court ruled that
Dumalagan and Salvador were unless there is a showing that
investigated for failure to the employee signed
perform duties and involuntarily or under duress,
responsibilities. After their quitclaims and releases are
explanations were found upheld by this Court as the law
unacceptable, they were between the parties. If the
accordingly dismissed. agreement was voluntarily
(4) NO. The Court ruled that it entered into by the employee,
was shown in the records that with full understanding of what
petitioners simply stopped he was doing, and represents a
reporting for work starting reasonable settlement of the
October 18, 2001 when they claims of the employee, it is
binding on the parties and may day, 13th month pay and
not be later disowned simply service incentive leave pay
because of a change of mind. against Garden of Memories
Thus, the quitclaims effectively before the DOLE.
barred petitioners from Upon motion of Garden of
questioning their dismissal. Memories, Requio was
WHEREFORE, the petition is impleaded as respondent on the
DENIED and the assailed alleged ground that she was its
Decision of the CA is AFFIRMED. service contractor and the
Garden of Memoirs v NLRC employer of Cruz.
SUMMARY: This is a petition for In her position paper, Cruz
review under Rule 45 of the averred that she worked as a
Rules of Court seeking utility worker of Garden of
nullification of the CAs decision Memories and was in charge,
in finding that petitioner Garden among others, of the cleaning
of Memories Memorial Park and and maintenance of the ground
Life Plan, Inc. was the employer facilities of the memorial park.
of respondent Hilaria Cruz, and Sometime in February 1998, she
that Garden of Memories and had a misunderstanding with a
petitioner Paulina Requio, were co-worker. When the
jointly and severally liable for misunderstanding came to the
the money claims of Cruz. knowledge of Requio, the latter
FACTS: Petitioner Garden of instructed them to go home and
Memories is engaged in the not to return anymore. After
business of operating a three (3) days, Cruz reported for
memorial park situated at work but she was told that she
Calsadang Bago, Pateros, Metro- had been replaced by another
Manila and selling memorial worker. She immediately
Plan and services. Respondent reported the matter of her
Cruz, on the other hand, worked replacement to the personnel
at the Garden of Memories manager of Garden of Memories
Memorial Park as a utility worker and manifested her protest.
from August 1991 until her Cruz argued that as a regular
termination in February 1998. employee of the Garden of
Cruz filed a complaint for illegal Memories, she could not be
dismissal, underpayment of terminated without just or valid
wages, non-inclusion in the cause. Also, her dismissal was
Social Security Services, and violative of due process as she
non-payment of legal/special was not afforded the
holiday, premium pay for rest opportunity to explain her side
before her employment was dismissal of Cruz illegal
terminated. reasoning out that there could
In its Answer, Garden of be no abandonment of work on
Memories claimed that Requio her part since Garden of
was a service contractor who Memories and Requio failed to
carried an independent business prove that there was a
and undertook the contract of deliberate and unjustified
work on her own account, under refusal on the part of the
her own responsibility and employee to go back to work
according to her own manner and resume her employment.
and method, except as to the Garden of Memories moved for
results thereof. a reconsideration of the NLRC
In her defense, Requio prayed decision but it was denied for
for the dismissal of the lack of merit.
complaint stating that Cruz was Consequently, Garden of
not dismissed from her Memories and Requio filed
employment but that she before the CA a petition for
abandoned her work. certiorari under Rule 65 of the
The LA ruled that Requio was Rules of Court. The CA
not an independent contractor dismissed the petition and
but a labor-only contractor and affirmed the NLRC decision.
that her defense that Cruz The petitioners claim that there
abandoned her work was was a service contract between
negated by the filing of the Garden of Memories and Requio
present case. The LA declared for the latter to provide
both Garden of Memories and maintenance work for the
Requio, jointly and severally, former and that the power of
liable for the monetary claims of control, the most important
Cruz. element in determining the
Garden of Memories and Requio presence of such a relationship
appealed the decision to the was missing. Furthermore,
NLRC. The NLRC affirmed the Garden of Memories alleges that
ruling of the LA, stating that it did not participate in the
Requio had no substantial selection or dismissal of
capital or investments in the Requios employees.
form of tools, equipment, ISSUE: (1) WON petitioner
machineries, and work Requio is not a legitimate
premises, among others, for her contractor but is only a labor-
to qualify as an independent only contractor
contractor. It declared the (2) WON respondent Cruz is a
regular employee of Garden of and extent that he is liable to
Memories employees directly employed by
(3) WON respondent Cruz was him.
illegally dismissed The Secretary of Labor may, by
HELD: (1) YES. In the present appropriate regulations, restrict
case, the LA, the NLRC, and the or prohibit the contracting out of
CA are one in declaring that labor to protect the rights of
petitioner Requio was not a workers established under this
legitimate contractor. Echoing Code. In so prohibiting or
the decision of the LA and the restricting, he may make
NLRC, the CA reasoned out that appropriate distinctions
Requio was not a licensed between labor-only contracting
contractor and had no and job contracting as well as
substantial capital or investment differentiations within these
in the form of tool, equipment types of contracting and
and work premises, among determine who among the
others. parties involved shall be
Section 106 of the Labor Code considered the employer for
on contracting and purposes of this Code, to
subcontracting provides: prevent any violation or
Article 106. Contractor or circumvention of any provision
subcontractor. - Whenever, an of this Code.
employer enters into a contract There is labor-only contracting
with another person for the where the person supplying
performance of the formers workers to an employer does
work, the employees of the not have substantial capital or
contractor and of the latters investment in the form of tools,
subcontractor shall be paid in equipment, machineries, work
accordance with the provisions premises, among others, and
of this Code. the workers recruited and
In the event that the contractor placed by such persons are
or subcontractor fails to pay the performing activities which are
wages of his employees in directly related to the principal
accordance with this Code, the business of such employer. In
employer shall be jointly and such cases, the person or
severally liable with his intermediary shall be considered
contractor or subcontractor to merely as an agent of the
such employees to the extent of employer who shall be
the work performed under the responsible to the workers in the
contract, in the same manner same manner and extent as if
the latter were directly performing activities which are
employed by him. directly related to the principal
In the same vein, Sections 8 and business or operations of the
9, DOLE Department Order No. employer in which workers are
10, Series of 1997, state that: habitually employed.
Sec. 8. Job contracting. There is (b) Labor-only contracting as
job contracting permissible defined herein is hereby
under the Code if the following prohibited and the person acting
conditions are met: as contractor shall be
(1) The contractor carries on an considered merely as an agent
independent business and or intermediary of the employer
undertakes the contract work on who shall be responsible to the
his own account under his own workers in the same manner
responsibility according to his and extent as if the latter were
own manner and method, free directly employed by him.
from the control and direction of (c) For cases not falling under
his employer or principal in all this Article, the Secretary of
matters connected with the Labor shall determine through
performance of the work except appropriate orders whether or
as to the results thereof; and not the contracting out of labor
(2) The contractor has is permissible in the light of the
substantial capital or investment circumstances of each case and
in the form of tools, equipment, after considering the operating
machineries, work premises, needs of the employer and the
and other materials which are rights of the workers involved. In
necessary in the conduct of his such case, he may prescribe
business. conditions and restrictions to
Sec. 9. Labor-only contracting. insure the protection and
(a) Any person who undertakes welfare of the workers.
to supply workers to an On the matter of labor-only
employer shall be deemed to be contracting, Section 5 of Rule
engaged in labor-only VIII-A of the Omnibus Rules
contracting where such person: Implementing the Labor Code,
(1) Does not have substantial provides:
capital or investment in the Section 5. Prohibition against
form of tools, equipment, labor-only contracting. Labor-
machineries, work premises and only contracting is hereby
other materials; and declared prohibited. For this
(2) The workers recruited and purpose, labor-only contracting
placed by such persons are shall refer to an arrangement
where the contractor or supply premises, tools,
subcontractor merely recruits, appliances, materials and labor;
supplies or places workers to and the mode, manner and
perform a job, work or service terms of payment.
for a principal, and any of the On the other hand, there is
following elements are present: labor-only contracting where: (a)
i) The contractor or the person supplying workers to
subcontractor does not have an employer does not have
substantial capital or investment substantial capital or investment
which relates to the job, work or in the form of tools, equipment,
service to be performed and the machineries, work premises,
employees recruited, supplied among others; and (b) the
or placed by such contractor or workers recruited and placed by
subcontractor are performing such person are performing
activities related to the main activities which are directly
business of the principal, or related to the principal business
ii) The contractor does not of the employer.
exercise the right to control over Another determinant factor that
the performance of the work of classifies petitioner Requio as a
the contractual employee. labor-only contractor was her
Xxxx failure to exercise the right to
Thus, in determining the control the performance of the
existence of an independent work of Cruz. This can be
contractor relationship, several gleaned from the Service
factors may be considered, such Contract Agreement between
as, but not necessarily confined Garden of Memories and Requio,
to, whether or not the to wit:
contractor is carrying on an xxxx
independent business; the NOW THEREFORE, premises
nature and extent of the work; considered, the parties hereto
the skill required; the term and have hereunto agreed on the
duration of the relationship; the following terms and conditions:
right to assign the performance 1. That the Contractor shall
of specified pieces of work; the undertake the maintenance of
control and supervision of the the above-mentioned works in
work to another; the employers strict compliance with and
power with respect to the hiring, subject to all the requirements
firing and payment of the and standards of GMMPLPI.
contractors workers; the control xxxx
of the premises; the duty to The requirement of the law in
determining the existence of authorized causes.
independent contractorship is (3) YES. The Court agrees with
that the contractor should the findings of the tribunals
undertake the work on his own below that respondent Cruz did
account, under his own not abandon her work but was
responsibility, according to his illegally dismissed.
own manner and method, free As the employer, Garden of
from the control and direction of Memories has the burden of
the employer except as to the proof to show the employee's
results thereof. In this case, deliberate and unjustified
however, the Service Contract refusal to resume his
Agreement clearly indicates that employment without any
Requio has no discretion to intention of returning. For
determine the means and abandonment to exist, two
manner by which the work is factors must be present: (1) the
performed. Rather, the work failure to report for work or
should be in strict compliance absence without valid or
with, and subject to, all justifiable reason; and (2) a
requirements and standards of clear intention to sever
Garden of Memories. employer-employee relationship,
Under these circumstances, with the second element as the
there is no doubt that Requio is more determinative factor being
engaged in labor-only manifested by some overt acts.
contracting, and is considered It has been said that
merely an agent of Garden of abandonment of position cannot
Memories. As such, the workers be lightly inferred, much less
she supplies should be legally presumed from certain
considered as employees of equivocal acts. Mere absence is
Garden of Memories. not sufficient.
(2) YES. The Court observed that On the contrary, her reporting to
Cruz was hired as a utility the personnel manager that she
worker tasked to clean, sweep had been replaced and the
and water the lawn of the immediate filing of the
memorial park. She performed complaint before the DOLE
activities which were necessary demonstrated a desire on her
or desirable to its principal trade part to continue her
or business. Thus, she was a employment with Garden of
regular employee of Garden of Memories. As correctly pointed
Memories and cannot be out by the CA, the filing of the
dismissed except for just and case for illegal dismissal
negated the allegation of to petitioners Rockwell Thermal
abandonment. Plant.
WHEREFORE, the petition is However, on September 20,
DENIED. The Decision of the CA 1989, the aforesaid 49
is AFFIRMED employees (complainants)
lodged a Complaint for illegal
MIESCOR v. NLRC, G.R. No. deduction, underpayment, non-
145402, March 14, 2008 payment of overtime pay, legal
Summary: An indirect employer holiday pay, premium pay for
(as defined by Article 107) can holiday and rest day and night
only be held solidarily liable with differentials against the private
the independent contractor or respondents before the Labor
subcontractor (as provided Arbiter. The latter found
under Article 109) in the event petitioner jointly and severally
that the latter fails to pay the liable with private respondents
wages of its employees (as in the (1) judgement award on
described in Article 106). underpayment and (2) non-
Facts: Petitioner Meralco payment of overtime pay.
Industrial Engineering Services However, it found the judgment
Corporation (MIESCOR), a award on the payment of
company; and private separation pay as sole liability of
respondents Ofelia P. Landrito private respondents.
General Services (OPLGS), a firm NLRC rendered a decision
engaged in providing services holding petitioner as jointly and
such as janitorial services and severally liable with private
maintenance work to its clients, respondents in the judgment
and Ofelia P. Landrito, its award on underpayment and on
Proprietor and General Manager the non-payment of overtime
executed a contract on pay, its directive being that the
November 7, 1984 whereby the Arbiter should now satisfy said
latter would supply the labor-standards award, as well
petitioner janitorial services, as that of the separation pay,
which include labor, materials, exclusively through the surety
tools and equipment, as well as bond posted by private
supervision of its assigned respondents.
employees, at petitioners The Court of Appeals (CA)
Rockwell Thermal Plant in rendered the assailed Decision
Makati City. Pursuant thereto, on 24 April 2000, modifying the
private respondents assigned Decision of the NLRC dated 30
their 49 employees as janitors January 1996 and holding the
petitioner solidarily liable with employer, contracts with an
the private respondents for the independent contractor for the
satisfaction of the laborers performance of any work, task,
separation pay. job or project. To ensure that
Issue: Whether or not the CA the contractors employees are
erred when it ruled that the paid their appropriate wages,
petitioner was jointly and Article 106 of the Labor Code, as
solidarily liable with the private amended, provides:
respondents as regards the ART. 106. CONTRACTOR OR
payment of separation pay. SUBCONTRACTOR. x x x.
Held: Yes. The appellate court In the event that the contractor
used as basis Article 109 of the or subcontractor fails to pay the
Labor Code, as amended, in wages of his employees in
holding the petitioner solidarily accordance with this Code, the
liable with the private employer shall be jointly and
respondents for the payment of severally liable with his
separation pay: contractor or subcontractor to
ART. 109. Solidary Liability. - The such employees to the extent of
provisions of existing laws to the the work performed under the
contrary notwithstanding, every contract, in the same manner
employer or indirect employer and extent that he is liable to
shall be held responsible with employees directly employed by
his contractor or subcontractor him. [Emphasis supplied].
for any violation of any provision Taken together, an indirect
of this Code. For purposes of employer (as defined by Article
determining the extent of their 107) can only be held solidarily
civil liability under this Chapter, liable with the independent
they shall be considered as contractor or subcontractor (as
direct employers. [Emphasis provided under Article 109) in
supplied]. the event that the latter fails to
However, the afore-quoted pay the wages of its employees
provision must be read in (as described in Article 106).
conjunction with Articles 106 Hence, while it is true that the
and 107 of the Labor Code, as petitioner was the indirect
amended. employer of the complainants, it
Article 107 of the Labor Code, as cannot be held liable in the
amended, defines an indirect same way as the employer in
employer as any person, every respect. The petitioner
partnership, association or may be considered an indirect
corporation which, not being an employer only for purposes of
unpaid wages. with the independent contractor
WHEREFORE, premises or subcontractor for the
considered, the instant Petition backwages and separation pay
is hereby GRANTED. The of the latters employees is
Decision and Resolution of the when there is proof that the
Court of Appeals dated 24 April principal conspired with the
2000 and 27 September 2000, independent contractor or
respectively, in CA-G.R. SP No. subcontractor in the illegal
50806, are hereby REVERSED dismissal of the employees.
AND SET ASIDE. The Decision ---
dated 30 January 1996 of the Manila Electric Co. v. Benamira,
National Labor Relations G.R. No. 145271, July 14, 2005
Commission in NLRC NCR CA No. Summary: When MERALCO
001737-91 (NLRC NCR Case No. contracted for security services
00-09-04432-89) is hereby with ASDAI as the security
REINSTATED. No costs. agency that hired individual
Concepts: 1. Law of the Case respondents to work as guards
The opinion delivered on a for it, MERALCO became an
former appeal. It is a term indirect employer of individual
applied to an established rule respondents pursuant to Article
that when an appellate court 107 of the Labor Code, thus,
passes on a question and making it liable as to the
remands the case to the lower monetary claims of the
court for further proceedings, individual respondents.
the question there settled Facts: The individual
becomes the law of the case respondents are licensed
upon subsequent appeal. It security guards formerly
means that whatever is once employed by People's Security,
irrevocably established as the Inc. (PSI) and deployed as such
controlling legal rule or decision at MERALCO's head office. On
between the same parties in the November 30, 1990, the
same case continues to be the security service agreement
law of the case, whether correct between PSI and MERALCO was
on general principles or not, so terminated.
long as the facts on which such Immediately thereafter, fifty-six
decision was predicated of PSI's security guards,
continue to be the facts of the including eight individual
case before the court. respondents, filed a complaint
2. The only instance when the for unpaid monetary benefits
principal can also be held liable against PSI and MERALCO.
Meanwhile, the security service services per their respective
agreement between respondent security service agreement.
Armed Security & Detective Labor Arbiter Pablo C. Espiritu,
Agency, Inc., (ASDAI) and Jr. rendered a Decision holding
MERALCO took effect on ASDAI and MERALCO jointly and
December 1, 1990. solidarily liable to the monetary
Subsequently, the individual claims of individual
respondents were absorbed by respondents. NLRC affirmed in
ASDAI and retained at toto the decision of the Labor
MERALCO's head office. Arbiter. Court of Appeals (CA)
On June 29, 1992, Labor Arbiter modified the decision of the
Manuel P. Asuncion rendered a NLRC by declaring MERALCO as
decision in favor of the former the direct employer of the
PSI security guards, including individual respondents.
the individual respondents. Issue: 1. Whether or not ASDAI
Less than a month later, or on is a labor-only contractor since,
July 21, 1992, the individual as MERALCO insisted, they have
respondents filed another their own equipment,
complaint for unpaid monetary machineries and work premises
benefits, this time against ASDAI which are necessary in the
and MERALCO. conduct of their business and
ASDAI denied in general terms the duties performed by the
any liability for the claims of the security guards are not
individual respondents, claiming necessary in the conduct of
that there is nothing due them MERALCOs principal business.
in connection with their 2. Whether or not MERALCO, as
services. principal, becomes jointly and
On the other hand, MERALCO severally liable for the individual
denied liability on the ground of respondents wages, under
lack of employer-employee Article 106 and 109 of the Labor
relationship with individual Code.
respondents. It averred that the Held: 1. No, ASDAI are not
individual respondents are the "labor-only" contractors. There
employees of the security is "labor only" contract when the
agencies it contracted for person acting as contractor is
security services; and that it has considered merely as an agent
no existing liability for the or intermediary of the principal
individual respondents' claims who is responsible to the
since said security agencies workers in the same manner
have been fully paid for their and to the same extent as if
they had been directly individual respondents to work
employed by him. On the other as guards for it, MERALCO
hand, "job (independent) became an indirect employer of
contracting" is present if the individual respondents pursuant
following conditions are met: (a) to Article 107 of the Labor Code,
the contractor carries on an which reads:
independent business and ART. 107. Indirect employer.
undertakes the contract work on The provisions of the
his own account under his own immediately preceding Article
responsibility according to his shall likewise apply to any
own manner and method, free person, partnership, association
from the control and direction of or corporation which, not being
his employer or principal in all an employer, contracts with an
matters connected with the independent contractor for the
performance of the work except performance of any work, task,
to the result thereof; and (b) the job or project.
contractor has substantial When ASDAI as contractor failed
capital or investments in the to pay the individual
form of tools, equipment, respondents, MERALCO as
machineries, work premises and principal becomes jointly and
other materials which are severally liable for the individual
necessary in the conduct of his respondents' wages, under
business. Given the above Articles 106 and 109 of the
distinction and the provisions of Labor Code, which provide:
the security service agreements ART. 106. Contractor or
entered into by petitioner with subcontractor.Whenever an
ASDAI, the Court is convinced employer enters into a contract
that ASDAI was engaged in job with another person for the
contracting. performance of the former['s]
2. Yes. The fact that there is no work, the employees of the
actual and direct employer- contractor and of the latter[`s]
employee relationship between subcontractor, if any, shall be
MERALCO and the individual paid in accordance with the
respondents does not exonerate provisions of this Code.
MERALCO from liability as to the In the event that the contractor
monetary claims of the or subcontractor fails to pay the
individual respondents. When wages of his employees in
MERALCO contracted for accordance with this Code, the
security services with ASDAI as employer shall be jointly and
the security agency that hired severally liable with his
contractor or subcontractor to respondents' monetary claims
such employees to the extent of for underpayment of actual
the work performed under the regular hours and overtime
contract, in the same manner hours rendered, and premium
and extent that he is liable to pay for holiday and rest day, as
employees directly employed by well as attorney's fees, shall be
him. xxx without prejudice to MERALCO's
ART. 109. Solidary liability.The right of reimbursement from
provisions of existing laws to the ASDAI.
contrary notwithstanding, every Concepts: It is a settled rule that
employer or indirect employer in the exercise of the Supreme
shall be held responsible with Court's power of review, the
his contractor or subcontractor Court is not a trier of facts and
for any violation of any provision does not normally undertake the
of this Code. For purpose of re-examination of the evidence
determining the extent of their presented by the contending
civil liability under this Chapter, parties during the trial of the
they shall be considered as case considering that the
direct employers. findings of facts of the CA are
ASDAI is held liable by virtue of conclusive and binding on the
its status as direct employer, Court. However, jurisprudence
while MERALCO is deemed the has recognized several
indirect employer of the exceptions in which factual
individual respondents for the issues may be resolved by this
purpose of paying their wages in Court, to wit:
the event of failure of ASDAI to (1) when the findings are
pay them. grounded entirely on
WHEREFORE, the present speculation, surmises or
petition is GRANTED. The conjectures; (2) when the
assailed Decision, dated inference made is manifestly
September 27, 2000, of the CA mistaken, absurd or impossible;
is REVERSED and SET ASIDE. (3) when there is grave abuse of
The Decision of the Labor discretion; (4) when the
Arbiter dated January 3, 1994 judgment is based on a
and the Resolution of the NLRC misapprehension of facts; (5)
dated April 10, 1995 are when the findings of facts are
AFFIRMED with the conflicting; (6) when in making
MODIFICATION that the joint and its findings the Court of Appeals
solidary liability of ASDAI and went beyond the issues of the
MERALCO to pay individual case, or its findings are contrary
to the admissions of both the Facts: Diamond Farms, Inc. (DFI)
appellant and the appellee; (7) owns an 800-hectare banana
when the findings are contrary plantation in Davao. Pursuant to
to the trial court; (8) when the Comprehensive Agrarian Reform
findings are conclusions without Law (CARL), the plantation
citation of specific evidence on became subject to compulsory
which they are based; (9) when acquisition and distribution. It
the facts set forth in the petition was granted by the Department
as well as in the petitioner's of Agrarian Reform (DAR) a
main and reply briefs are not deferment privilege to continue
disputed by the respondent; operations. DFI then closed
(10) when the findings of fact some areas of operations and
are premised on the supposed laid off employees which
absence of evidence and resulted to a petition to the DAR
contradicted by the evidence on to cancel the deferment
record; and (11) when the Court privilege. The DAR approved the
of Appeals manifestly petition and recalled the
overlooked certain relevant deferment privilege resulting in
facts not disputed by the the plantations automatic
parties, which, if properly compulsory acquisition and
considered, would justify a distribution under the CARL.
different conclusion. The awarded plantation was
--- turned over to qualified agrarian
Diamond Farms v. Southern reform beneficiaries ("ARBs")
Phils. Fed., G.R. No. 173254, under the CARL. These ARBs are
January 13, 2016 the same farmers who were
Summary: Since respondent- working in the original
contractors (1) does not have plantation. They subsequently
substantial capital or investment organized themselves into a
in the form of tools, equipment, multi-purpose cooperative
machineries, work premises and named "DARBMUPCO," which is
other materials; and (2) the one of the respondents in this
workers recruited and placed by case.
such person are performing From the start, DARBMUPCO was
activities which are directly hampered by lack of manpower
related to the principal business to undertake the agricultural
or operations of the employer in operation under the BPPA
which workers are habitually because some of its members
employed, the Court ruled that were not willing to work. Hence,
they are labor-only contractors. to assist DARBMUPCO in
meeting its production attorneys fees against DFI,
obligations under the BPPA, DFI DARBMUPCO and the
engaged the services of the respondent-contractors before
respondent-contractors, who in the National Labor Relations
turn recruited the respondent- Commission ("NLRC") in Davao
workers. City. DARBMUPCO averred that it
The engagement of the is not the employer of
respondent-workers started a respondent-workers; neither is
series of labor disputes among DFI. It asserted that the money
DARBMUPCO, DFI and the claims should be directed
respondent-contractors. against the true employerthe
On February 10, 1997, respondent-contractors.
respondent Southern Philippines The CA agreed with the ruling of
Federation of Labor ("SPFL")a the SOLE that DFI is the
legitimate labor organization statutory employer of the
with a local chapter in the respondent-workers. It also
awarded plantationfiled a ruled that DFI is the true
petition for certification election employer of the respondent-
in the Office of the Med-Arbiter workers because the
in Davao City. SPFL filed the respondent-contractors are not
petition on behalf of some 400 independent contractors.
workers (the respondent- DFI is now in Court by way of
workers in this petition) "jointly Petition for Review on Certiorari
employed by DFI and praying that DARBMUPCO be
DARBMUPCO" working in the declared the true employer of
awarded plantation. the respondent-workers.
DARBMUPCO and DFI denied DARBMUPCO filed a Comment
that they are the employers of maintaining that under the
the respondent-workers. They control test, DFI is the true
claimed, instead, that the employer of the respondent-
respondent-workers are the workers.
employees of the respondent- Respondent-contractors filed a
contractors. Verified Explanation and
Meanwhile, on June 20, 1997 Memorandum asserting that
and September 15, 1997, SPFL, they were labor-only
together with more than 300 contractors; hence, they are
workers, filed a case for merely agents of the true
underpayment of wages, non- employer of the respondent-
payment of 13th month pay and workers.
service incentive leave pay and Issue: The issue before this
Court is who among DFI, independent contractors. To
DARBMUPCO and the support its argument that
respondent-contractors is the respondent-contractors are the
employer of the respondent- employers of respondent-
workers. workers, and not merely labor-
Held: The Court denied DFIs only contractors, DFI should
petition. It held that DFI is the have presented proof showing
principal or employer of the that respondent-contractors
respondent-workers. carry on an independent
Job contracting shall be deemed business and have sufficient
as labor-only contracting, an capitalization. The record,
arrangement prohibited by law, however, is bereft of showing of
if a person who undertakes to even an attempt on the part of
supply workers to an employer: DFI to substantiate its
(1) Does not have substantial argument.
capital or investment in the Further, respondent-contractors
form of tools, equipment, admit, and even insist that they
machineries, work premises and are engaged in labor-only
other materials; and contracting. As said by Court,
(2) The workers recruited and respondent-contractors made
placed by such person are the admissions and declarations
performing activities which are on two occasions: first was in
directly related to the principal their Formal Appearance of
business or operations of the Counsel and Motion for
employer in which workers are Exclusion of Individual Party-
habitually employed. Respondents filed before the LA;
As a general rule, a contractor is and second was in their Verified
presumed to be a labor-only Explanation and Memorandum
contractor, unless such filed before this Court.
contractor overcomes the A finding that a contractor is a
burden of proving that it has the labor-only contractor is
substantial capital, investment, equivalent to a declaration that
tools and the like. there is an employer-employee
Based on the conditions for relationship between the
permissible job contracting, the principal, and the workers of the
Court ruled that respondent- labor-only contractor; the labor-
contractors are labor-only only contractor is deemed only
contractors. as the agent of the principal.
There is no evidence showing Thus, in this case, respondent-
that respondent-contractors are contractors are the labor-only
contractors and either DFI or DENIED for lack of merit. The
DARBMUPCO is their principal. March 31, 2006 Decision and
The Court held that DFI is the the May 30, 2006 Resolution of
principal. the Court of Appeals in C.A.-G.R.
Under Article 106 of the Labor SP Nos. 53806, 61607 and
Code, a principal or employer 59958 are hereby AFFIRMED.
refers to the person who enters Concepts: 1. Contracting or
into an agreement with a job subcontracting - an
contractor, either for the arrangement whereby a
performance of a specified work principal (or employer) agrees
or for the supply of manpower. to put out or farm out with a
In this regard, the Court quoted contractor or subcontractor the
with approval the findings of the performance or completion of a
CA, to wit: specific job, work or service
The records show that it is DFI within a definite or
which hired the individual predetermined period,
[respondent-contractors] who in regardless of whether such job,
turn hired their own men to work or service is to be
work in the 689.88 hectares performed or completed within
land of DARBMUPCO as well as or outside the premises of the
in the managed area of the principal. It involves a trilateral
plantation. DFI admits [that] relationship among the principal
these [respondent-contractors] or employer, the contractor or
worked under the direction and subcontractor, and the workers
supervision of the DFI managers engaged by the contractor or
and personnel. DFI paid the subcontractor.
[respondent-contractors] for the 2. There is "labor-only"
services rendered in the contracting where the person
plantation and the [respondent- supplying workers to an
contractors] in turn pay their employer does not have
workers after they [respondent- substantial capital or investment
contractors] received payment in the form of tools, equipment,
from DFI. xxx DARBMUPCO did machineries, work premises,
not have anything to do with the among others, and the workers
hiring, supervision and payment recruited and placed by such
of the wages of the workers- person are performing activities
respondents thru the which are directly related to the
contractors-respondents. xxx87 principal business of such
(Emphasis supplied.) employer. In such cases, the
WHEREFORE, the petition is person or intermediary shall be
considered merely as an agent performing activities which are
of the employer who shall be directly related to the principal
responsible to the workers in the business or operations of the
same manner and extent as if employer in which workers are
the latter were directly habitually employed.
employed by him. 5. As a general rule, a
3. Job contracting is permissible contractor is presumed to be a
under the Code if the following labor-only contractor, unless
conditions are met: such contractor overcomes the
(a) The contractor carries on an burden of proving that it has the
independent business and substantial capital, investment,
undertakes the contract work on tools and the like.
his own account under his own 6. In labor-only contracting, it is
responsibility according to his the law which creates an
own manner and method, free employer-employee relationship
from the control and direction of between the principal and the
his employer or principal in all workers of the labor-only
matters connected with the contractor.
performance of the work except
as to the results thereof; and Robina Farms v Villa (OT Pay)
(b) The contractor has April 18, 2016
substantial capital or investment FACTS: Petitioner Robina Farms
in the form of tools, equipment, employed Elizabeth Villa as
machineries, work premises, sales clerk from 1981. in the
and other materials which are later part of 2001, the petitioner
necessary in the conduct of his was informed that she can avail
business. the company's special
4. Job contracting shall be retirement program.
deemed as labor-only On March 2, 2002, she has
contracting, an arrangement received a memo from Lily
prohibited by law, if a person Ngochua to explain her failure to
who undertakes to supply issue invoices for unhatched
workers to an employer: eggs in the months of January to
(1) Does not have substantial February 2002. She explained
capital or investment in the that the invoices were not
form of tools, equipment, delivered on time because the
machineries, work premises and delivery receipts were delayed
other materials; and and overlooked. Despite of her
(2) The workers recruited and explanatons she had been
placed by such person are suspended for 10 days from
March 8, 2002 until March 19, dismissed
2002. (2) WON Villa is entitled to
Upon reporting back to work, Overtime Pay
she had been advised to cease Held: (1) Yes, the court ruled
working because her application that Villa was illegally dismissed
for retirement had already been because ordinarily, after an
approved. Though subsequently, employee served her
she was informed that the suspension, she should be
application had been admitted back to work and
disapproved because the continue to receive
financial assistance of 86%/year compensation for her services.
of service was only offered to In the case at bar, it is clear that
employees working in she was not admitted
operations department and not immediately after her
in admin and sales, and she was suspension. She was also
advised to tender her prevented to enter the
resignation with a request of petitioner's premises by
financial assistance of 1/2 per confiscating her ID and
year of service. She manifested informing her that a new
her intention to return to work employee has already replaced
but the petitioner had her.
confiscated her gate pass to (2) No, the NLRC's reliance on
prevent her from entering the the daily time records (DTRs)
company premises and she was showing that Villa had stayed in
told that she had been replaced the company's premises beyond
by another employee. eight hours
The Labor Arbiter ruled that Villa was misplaced. The DTRs did
was not dismissed from not substantially prove the
employment but they ordered actual performance of overtime
Villa's reinstatement but the work. The petitioner correctly
claims for backwages and points out that any employee
overtime pay was not could render overtime work only
appreciated. when there was a prior
NLRC ruled that she was illegally authorization therefor by the
dismissed. Granting her management. Without the prior
Backwages, Service Incentive authorization, therefore, Villa
Leave Pay, and overtime pay. could not validly claim having
The overtime pay amounting to performed work beyond the
3,445.00. normal hours of work. Moreover,
Issue: (1) WON Villa was illegally Section 4( c ), Rule I, Book III of
the Omnibus Rules retirement pay could be
Implementing the Labor Code released. As petitioner's
relevantly states as follows: request to first go over the
Section 4. Principles in computation of his retirement
determining hours worked. - The pay was denied, he signed the
following general principles shall Quitclaim on which he wrote
govern in determining whether "U.P." (under protest) after his
the time spent by an employee signature, indicating his protest
is considered hours worked for to the amount of P75,277.45
purposes of this Rule: which he received, computed by
(a) XX X. the company at 15 days per
(b) xx x. year of service.
(c) If the work performed was Petitioner soon after filed a
necessary, or it benefited the complaint before the Labor
employer, or the employee Arbiter, alleging that the
could not abandon his work at company erred in its
the end of his normal working computation since under
hours because he had no Republic Act No. 7641,
replacement, all time spent for otherwise known as the
such work shall be considered Retirement Pay Law, his
as hours worked, if the work was retirement pay should have
with the knowledge of his been computed at 22.5 days per
employer or immediate year of service to include the
supervisor. (bold emphasis cash equivalent of the 5-day
supplied) service incentive leave (SIL) and
(d) xx x. 1/12 of the 13th month pay
which the company did not.
Serrano vs. Severino Santos, The company maintained,
G.R. No. 187698; August 9, 2010 however, that the Quitclaim
(Art. 82) signed by petitioner barred his
Facts: Petitioner Serrano was claim and, in any event, its
hired as bus conductor by computation was correct since
respondent Severino Transit on petitioner was not entitled to
September 28, 1992. After 14 the 5-day SIL and pro-rated 13th
years of service, petitioner month pay for, as a bus
applied for optional retirement. conductor, he was paid on
from the company whose commission basis.
representative advised him that Labor Arbiter Cresencio Ramos,
he must first sign the already Jr. ruled in favor of petitioner,
prepared Quitclaim before his awarding him P116,135.45 as
retirement pay differential, and appealed to the Court of
10% of the total monetary Appeals. The appellate court
award as attorney's fees. This is affirmed the NLRC's ruling.
because under Labor Advisory Petitioner's motion for
on Retirement Pay Law, a reconsideration was again
covered employee who retires denied, hence, the present
pursuant to RA 7641 shall be petition for review on certiorari
entitled to retirement pay Issue: WON the petitioner is
equivalent to at least one-half excluded from the coverage of
(1/12) month salary for every the laws on 13th month pay and
year of service (one-half month SIL pay, hence, the 1/12 of the
salary means fifteen (15) days 13th month pay and the 5-day
plus one-twelfth (1/12) of the SIL should not be factored in the
13th month pay and the cash computation of his retirement
equivalent of not more than five pay.
(5) days service incentive Held: No. It bears emphasis that
leaves" unless the parties under P.D. 851 or the SIL Law,
provide for broader inclusions), the exclusion from its coverage
a fraction of at least six (6) of workers who are paid on a
months being considered as one purely commission basis is only
whole year with respect to field personnel.
The National Labor Relations According to Article 82 of the
Commission (NLRC) to which Labor Code, "field personnel"
respondents appealed reversed shall refer to non-agricultural
the Labor Arbiter's ruling and employees who regularly
dismissed petitioner's perform their duties away from
complaint. Citing R & E the principal place of business
Transport, Inc. v. Latag, the or branch office of the employer
NLRC held that since petitioner and whose actual hours of work
was paid on purely commission in the field cannot be
basis, he was excluded from the determined with reasonable
coverage of the laws on 13th certainty.
month pay and SIL pay, hence, This definition is further
the 1/12 of the 13th month pay elaborated in the Bureau of
and the 5-day SIL should not be Working Conditions (BWC),
factored in the computation of Advisory Opinion to Philippine
his retirement pay. Technical-Clerical Commercial
Petitioner's motion for Employees Association which
reconsideration having been states that: If required to be at
denied by Resolution, he specific places at specific times,
employees including drivers Held: No. By the Agreement's
cannot be said to be field express terms, Tongko served as
personnel despite the fact that an "insurance agent" for
they are performing work away Manulife, not as an employee. To
from the principal office of the be sure, the Agreement's legal
employee. characterization of the nature of
the relationship cannot be
Tongko vs. Manufacturers Life, conclusive and binding on the
G.R. No. 167622; June 29, 2010 courts; as the dissent clearly
Facts: A Motion for stated, the characterization of
Reconsideration was filed by the juridical relationship the
respondent Manulife to set aside Agreement embodied is a
Court's Decision of November 7, matter of law that is for the
2008. In the assailed decision, courts to determine. At the
the Court found that an same time, though, the
employer-employee relationship characterization the parties
existed between Manulife and gave to their relationship in the
petitioner Gregorio Tongko and Agreement cannot simply be
ordered Manulife to pay Tongko brushed aside because it
backwages and separation pay embodies their intent at the
for illegal dismissal. time they entered the
Manulife claimed that "the Agreement, and they were
November 7[, 2008] Decision governed by this understanding
ignores the findings of the CA on throughout their relationship. At
the three elements of the four- the very least, the provision on
fold test other than the "control" the absence of employer-
test, reverses well-settled employee relationship between
doctrines of law on employer- the parties can be an aid in
employee relationships, and considering the Agreement and
grossly misapplies the "control its implementation, and in
test," by selecting, without appreciating the other evidence
basis, a few items of evidence to on record.
the exclusion of more material Also, the provisions of the
evidence to support its Insurance Code cannot be
conclusion that there is disregarded as this Code
"control." expressly envisions a principal-
Issue: WON an employer- agent relationship between the
employee relationship exists insurance company and the
between petitioner and insurance agent in the sale of
respondent? insurance to the public. For this
reason, we can take judicial only refers to Tongko's
notice that as a matter of additional functions. While a
Insurance Code-based business rough deduction can be made,
practice, an agency relationship the answer will not be fully
prevails in the insurance supported by the substantial
industry for the purpose of evidence needed.
selling insurance. Significantly,
evidence shows that Tongko's Calamba Medical vs. NLRC, G.R.
role as an insurance agent No. 176484; November 25, 2008
never changed during his Facts: The Calamba Medical
relationship with Manulife. Center (petitioner), a privately-
Evidence indicates that Tongko owned hospital, engaged the
consistently clung to the view services of medical doctors-
that he was an independent spouses Ronaldo Lanzanas (Dr.
agent selling Manulife insurance Lanzanas) and Merceditha
products since he invariably Lanzanas (Dr. Merceditha) in
declared himself a business or March 1992 and August 1995,
self-employed person in his respectively, as part of its team
income tax returns. This of resident physicians. The work
consistency with, and action schedules of the members of
made pursuant to the the team of resident physicians
Agreement were pieces of were fixed by petitioner's
evidence that were never medical director Dr. Raul
mentioned nor considered in our Desipeda (Dr. Desipeda). On
Decision of November 7, 2008. March 7, 1998, Dr. Meluz
Also, the mere presentation of Trinidad (Dr. Trinidad), also a
codes or of rules and resident physician at the
regulations, however, is not per hospital, inadvertently
se indicative of labor law control overheard a telephone
as the law and jurisprudence conversation of respondent Dr.
teach us. Lanzanas with a fellow
Given this anemic state of the employee, Diosdado Miscala,
evidence, particularly on the through an extension telephone
requisite confluence of the line. Apparently, Dr. Lanzanas
factors determinative of the and Miscala were discussing the
existence of employer-employee low "census" or admission of
relationship, the Court cannot patients to the hospital.
conclusively find that the Dr. Desipeda whose attention
relationship exists in the present was called to the above-said
case, even if such relationship telephone conversation issued
to Dr. Lanzanas a Memorandum ruling. However, upon a
of March 7, 1998, giving Dr. subsequent motion for
Lazanas 24 hours to explain why reconsideration filed by
no disciplinary action should be respondents, it reinstated the
taken against him. Pending NLRC decision in an Amended
investigation of the case, he was Decision.
placed under 30-day preventive Issue: WON there exists an
suspension upon receipt thereof. employer-employee relationship
Dr. Merceditha was also not between petitioner and the
given any work schedule. spouses-respondents.
On March 20, 1998, Dr. Held: Yes. Under the "control
Lanzanas filed a complaint for test," an employment
illegal suspension before the relationship exists between a
National Labor Relations physician and a hospital if the
Commission (NLRC)-Regional hospital controls both the means
Arbitration Board (RAB) IV. Dr. and the details of the process by
Merceditha subsequently filed a which the physician is to
complaint for illegal dismissal. accomplish his task. In the case
By Decision of March 23, 1999, at bar, first, private respondents
Labor Arbiter Antonio R. Macam maintained specific work-
dismissed the spouses' schedules, as determined by
complaints for want of petitioner through its medical
jurisdiction upon a finding that director, which consisted of 24-
there was no employer- hour shifts totaling forty-eight
employee relationship between hours each week and which
the parties, the fourth requisite were strictly to be observed
or the "control test" in the under pain of administrative
determination of an sanctions. Second, Without the
employment bond being absent. approval or consent of petitioner
On appeal, the NLRC, by or its medical director, no
Decision of May 3, 2002, operations can be undertaken in
reversed the Labor Arbiter's those areas. For control test to
findings. Petitioner's motion for apply, it is not essential for the
reconsideration having been employer to actually supervise
denied, it brought the case to the performance of duties of the
the Court of Appeals on employee, it being enough that
certiorari. The appellate court, it has the right to wield the
by June 30, 2004 Decision,[22] power. Third, petitioner itself
initially granted petitioner's provided incontrovertible proof
petition and set aside the NLRC of the employment status of
respondents, namely, the denominated as "Contract of
identification cards it issued Agency for Project Director
them, the payslips and BIR W-2 which provided, among others,
(now 2316) Forms which reflect that she would directly report to
their status as employees, and Babiano. On March 31, 2008,
the classification as "salary" of Concepcion executed a similar
their remuneration. Moreover, it contract anew with CPI in which
enrolled respondents in the SSS she would receive a monthly
and Medicare (Philhealth) subsidy of P50,000.00, 0.5%
program. Lastly, under Section commission, and cash
15, Rule X of Book III of the incentives as per company
Implementing Rules of the Labor policy. Notably, it was stipulated
Code, an employer-employee in both contracts that no
relationship exists between the employer-employee relationship
resident physicians and the exists between Concepcion and
training hospitals, unless there CPI.
is a training agreement between After receiving reports that
them, and the training program Babiano provided a competitor
is duly accredited or approved with information regarding CPFs
by the appropriate government marketing strategies, spread
agency. In respondents' case, false information regarding CPI
they were not undergoing any and its projects, recruited CPI's
specialization training. personnel to join the competitor,
and for being absent without
Century Properties vs. Babiano, official leave (AWOL) for five (5)
G.R. No. 220978; July 5, 2016 days, CPI sent Babiano a Notice
Facts: On October 2, 2002, to Explain on February 23, 2009
Edwin J. Babiano was hired by directing him to explain why he
Century Properties, Inc. (CPI) as should not be charged with
Director of Sales, and was disloyalty, conflict of interest,
eventually appointed as Vice and breach of trust and
President for Sales effective confidence for his actuations.
September 1, 2007. During the On February 25, 2009, Babiano
same period, Emma B. tendered his resignation and
Concepcion was initially hired as revealed that he had been
Sales Agent by CPI and was accepted as Vice President of
eventually promoted as Project First Global BYO Development
Director on September 1, Corporation (First Global), a
2007As such, she signed an competitor of CPI. On the other
employment agreement, hand, Concepcion resigned as
CPFs Project Director through a based on case law, the presence
letter dated February 23, 2009, of the following elements evince
effective immediately. the existence of an employer-
On the other hand, Concepcion employee relationship: (a) the
resigned as CPFs Project power to hire, i.e., the selection
Director through a letter[22] and engagement of the
dated February 23, 2009, employee; (b) the payment of
effective immediately. For its wages; (c) the power of
part, CPI maintained[25] that dismissal; and (d) the
Babiano is merely its agent employer's power to control the
tasked with selling its projects. employee's conduct, or the so
On Concepcion's money claims, called "control test." Under this
CPI asserted that the NLRC had test, an employer-employee
no jurisdiction to hear the same relationship exists where the
because there was no employer- person for whom the services
employee relations between are performed reserves the right
them, and thus, she should have to control not only the end
litigated the same in an ordinary achieved, but also the manner
civil action. The Labor Arbiter and means to be used in
(LA) ruled in CPI's favor. NLRC reaching that end.
reversed and set aside the LA Guided by these parameters,
ruling. CA affirmed the NLRC the Court finds that Concepcion
ruling with modification was an employee of CPI
increasing the award of unpaid considering that: (a) CPI
commissions to Babiano and continuously hired and
Concepcion. The CA echoed the promoted Concepcion from
NLRC's finding that there exists October 2002 until her
an employer-employee resignation on February 23,
relationship between 2009, thus, showing that CPI
Concepcion and CPI, because exercised the power of selection
the latter exercised control over and engagement over her
the performance of her duties as person and that she performed
Project Director which is functions that were necessary
indicative of an employer- and desirable to the business of
employee relationship. CPI; (b) the monthly "subsidy"
Issue: WON CPI has employer- and cash incentives that
employee relationship with Concepcion was receiving from
Concepcion. CPI are actually remuneration in
Held: Yes. Anent the nature of the concept of wages as it was
Concepcion's engagement, regularly given to her on a
monthly basis without any the conduct of recruitment
qualification, save for the activities, training sessions, and
"complete submission of skills development of Sales
documents on what is a sale Directors - she did not exercise
policy"; (c) CPI had the power to independent discretion thereon,
discipline or even dismiss but was still subject to the direct
Concepcion as her engagement supervision of CPI, acting
contract with CPI expressly through Babiano.
conferred upon the latter "the Besides, while the employment
right to discontinue [her] service agreement of Concepcion was
anytime during the period of denominated as a "Contract of
engagement should [she] fail to Agency for Project Director," it
meet the performance should be stressed that the
standards," among others, and existence of employer-employee
that CPI actually exercised such relations could not be negated
power to dismiss when it by the mere expedient of
accepted and approved repudiating it in a contract. In
Concepcion's resignation letter; the case of Insular Life
and most importantly, (d) as Assurance Co., Ltd. v. NLRC, it
aptly pointed out by the CA, CPI was ruled that one's
possessed the power of control employment status is defined
over Concepcion because in the and prescribed by law, and not
performance of her duties as by what the parties say it should
Project Director - particularly in be.