1. Globe Telecom Inc v. Florendo-Flores, G.R. No.

150092, Sept 27, 2002

 2. Philippine Appliance Corp v. CA, G.R. No. 149434, June 3, 2004

3. National Sugar Refineries Corp v. NLRC

G.R. No. 101761 March 24, 1993
NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.

Facts:
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned
and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo
and Batangas. Private respondent union represents the former supervisors of the NASUREFCO
Batangas Sugar Refinery.
In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-
and-file to department heads. We glean from the records that for about ten years prior to the JE
Program, the members of respondent union were treated in the same manner as rank-and file
employees. As such, they used to be paid overtime, rest day and holiday pay pursuant to the
provisions of Articles 87, 93 and 94 of the Labor Code as amended.
With the implementation of the JE Program, members of respondent union were re-classified under
levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits.
In May 1990, petitioner NASUREFCO recognized herein respondent union, which was organized
pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own unions, as the
bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar
Refinery.
In June 1990, the members of herein respondent union filed a complainant with the executive labor
arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of
the Labor Code.
In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages complained of.
On appeal, in a decision promulgated on July 1991, respondent National Labor Relations
Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of
respondent union are not managerial employees, and, therefore, they are entitled to overtime, rest
day and holiday pay. Respondent NLRC declared that these supervisory employees are merely
exercising recommendatory powers subject to the evaluation, review and final action by their
department heads.
Issue:
W/N the Supervisors are considered Managerial Employees and should no longer receive overtime,
rest day and holiday pay.

Ruling:
Yes
Ratio:
"Art. 82 Coverage. — The provisions of this title shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government employees, managerial employees,
field personnel, members of the family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another, and workers who are paid by results as
determined by the Secretary of Labor in Appropriate regulations.
"As used herein, 'managerial employees' refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department or subdivision
thereof, and to other officers or members of the managerial staff." (Emphasis supplied.)
It is the submission of petitioner that while the members of respondent union, as supervisors, may
not be occupying managerial positions, they are clearly officers or members of the managerial staff
because they meet all the conditions prescribed by law and, hence, they are not entitled to
overtime, rest day.
Quintessentially, with the promotion of the union members, they are no longer entitled to the
benefits which attach and pertain exclusively to their positions. Entitlement to the benefits provided
for by law requires prior compliance with the conditions set forth therein. With the promotion of
the members of respondent union, they occupied positions which no longer met the requirements
imposed by law. Their assumption of these positions removed them from the coverage of the law,
ergo, their exemption therefrom.
As correctly pointed out by petitioner, if the union members really wanted to continue receiving the
benefits which attach to their former positions, there was nothing to prevent them from refusing to
accept their promotions and their corresponding benefits. As the saying goes by, they could not, as a
simple matter of law and fairness, get the best of both worlds at the expense of NASUREFCO.
Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of
management, provided it is done in good faith. In the case at bar, private respondent union has
miserably failed to convince this Court that the petitioner acted implementing the JE Program. There
is no showing that the JE Program was intended to circumvent the law and deprive the members of
respondent union of the benefits they used to receive.

4. G.R. No. 152456 Case Digest

G.R. No. 152456, April 28, 2004
Sevilla Trading Companny, petitioner,
vs AVA Tomas Semana, Sevilla Trading Workers Union-Super, respondents.
Ponente: Puno

Facts:
This is an appeal in the decision of Court of Appeals sustaining the decision of Semana denying the
petitioner's motion for reconsideration.

2 to 3 years prior to 1999, Company engaged in trading business, organized an added base figure in
the computation of the 13th month pay of its employees.

Petitioner claimed that it entrusted the preparation of the payroll to its office staff, including the
computation and payment of the 13th month pay and other benefits. Later, after changing the
payroll officer, they discovered an error of including non-basic and other benefits in the base figure,
petitioner then effected the computation of the 13th month pay, as follows:

Hence the new computation reduced the 13th month pay. The union then contested the new
computation. Parties failed to resolve the issue, so they submitted it to Semana, the Accredited
Voluntary Arbitrator for consideration and resolution.

The Union alleged that petitioner violated the rule prohibiting the elimination or diminution of
employees’ benefits as provided for in Art. 100 of the Labor Code, as amended. They claimed that
paid leaves, like sick leave, vacation leave, paternity leave, union leave, bereavement leave, holiday
pay and other leaves with pay in the CBA should be included in the base figure in the computation of
their 13th-month pay.
On the other hand, petitioner insisted that the computation of the 13th-month pay is based on basic
salary, excluding benefits such as leaves with pay, as per P.D. No. 851, as amended. It maintained
that, in adjusting its computation of the 13th-month pay, it merely rectified the mistake its
personnel committed in the previous years.
A.V.A. Semana decided in favor of the Union. Hence, this appeal.

Issues: (1) revert of the company's computation is without legal basis (2) correcting errors in
computation by companies will not cause grave and irreparable damage to employers.
Ruling:
We uphold the Court of Appeals in ruling that the proper remedy from the adverse decision of the
arbitrator is a petition for review under Rule 43 of the 1997 Rules of Civil Procedure, not a petition
for certiorari under Rule 65. Section 1 of Rule 43

It is elementary that the special civil action of certiorari under Rule 65 is not, and cannot be a
substitute for an appeal, where the latter remedy is available, as it was in this case. Petitioner Sevilla
Trading failed to file an appeal within the fifteen-day reglementary period from its notice of the
adverse decision of A.V.A. Semana. It received a copy of the decision of A.V.A. Semana on December
20, 2000, and should have filed its appeal under Rule 43 of the 1997 Rules of Civil Procedure on or
before January 4, 2001.

Thus, the decision of A.V.A. Semana had become final and executory when petitioner Sevilla Trading
filed its petition for certiorari on February 19, 2001. More particularly, the decision of A.V.A. Semana
became final and executory upon the lapse of the fifteen-day reglementary period to appeal, or on
January 5, 2001. Hence, the Court of Appeals is correct in holding that it no longer had appellate
jurisdiction to alter, or much less, nullify the decision of A.V.A. Semana.

In the light of the clear ruling of this Court, there is, thus no reason for any mistake in the
construction or application of the law. When petitioner Sevilla Trading still included over the years
non-basic benefits of its employees, such as maternity leave pay, cash equivalent of unused vacation
and sick leave, among others in the computation of the 13th-month pay, this may only be construed
as a voluntary act on its part. Putting the blame on the petitioner’s payroll personnel is inexcusable.

A company practice favorable to the employees had indeed been established and the payments
made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement
being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the
employer, by virtue of Sec. 10 of the Rules and Regulations Implementing P.D. No. 851, and Art. 100
of the Labor Code of the Philippines which prohibit the diminution or elimination by the employer of
the employees’ existing benefits.

With regard to the length of time the company practice should have been exercised to constitute
voluntary employer practice which cannot be unilaterally withdrawn by the employer, we hold that
jurisprudence has not laid down any rule requiring a specific minimum number of years.
5. MANILA ELECTRIC COMPANY v. SECRETARY OF LABOR LEONARDO
QUISUMBING, GR No. 127598, 2000-02-22
Facts:
In the Decision promulgated on January 27, 1999, the Court disposed of the case as
follows:
"WHEREFORE, the petition is granted and the orders of public respondent Secretary of
Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent set forth
above. The parties are directed to execute a Collective Bargaining Agreement incorporating
the... terms and conditions contained in the unaffected portions of the Secretary of Labor's
orders of August 19, 1996 and December 28, 1996, and the modifications set forth above.
The retirement fund issue is remanded to the Secretary of Labor for reception of evidence
and... determination of the legal personality of the Meralco retirement fund."
Dissatisfied with the Decision, some alleged members of private respondent union (Union
for brevity) filed a motion for intervention and a motion for reconsideration of the said
Decision. A separate intervention was likewise made by the supervisor's union (FLAMES[2])
of petitioner corporation alleging that it has bona fide legal interest in the outcome of the
case.[3] The Court required the "proper parties" to file a comment to the three motions for
reconsideration but the Solicitor-General asked... that he be excused from filing the
comment because the "petition filed in the instant case was granted" by the Court.[4]
Consequently, petitioner filed its own consolidated comment. An "Appeal Seeking
Immediate Reconsideration" was also filed by the alleged... newly elected president of the
Union.[5] Other subsequent pleadings were filed by the parties and intervenors.
The issues raised in the motions for reconsideration had already been passed upon by the
Court in the January 27, 1999 decision. No new arguments were presented for
consideration of the Court. Nonetheless, certain matters will be considered herein,
particularly those involving... the amount of wages and the retroactivity of the Collective
Bargaining Agreement (CBA) arbitral awards.
Issues:
Petitioner warns that if the wage increase of P2,200.00 per month as ordered by the
Secretary is allowed, it would simply pass the cost covering such increase to the consumers
through an increase in the rate of electricity.
Ruling:
This is a non sequitur. The Court cannot be... threatened with such a misleading argument.
An increase in the prices of electric current needs the approval of the appropriate regulatory
government agency and does not automatically result from a mere increase in the wages of
petitioner's employees. Besides, this argument... presupposes that petitioner is capable of
meeting a wage increase. The All Asia Capital report upon which the Union relies to support
its position regarding the wage issue can not be an accurate basis and conclusive
determinant of the rate of wage increase. Section 45 of Rule
130 Rules of Evidence provides:
"Commercial lists and the like. - Evidence of statements of matters of interest to persons
engaged in an occupation contained in a list, register, periodical, or other published
compilation is admissible as tending to prove the truth of any relevant matter so... stated if
that compilation is published for use by persons engaged in that occupation and is generally
used and relied upon by them therein."
Under the afore-quoted rule, statement of matters contained in a periodical may be admitted
only "if that compilation is published for use by persons engaged in that occupation and is
generally used and relied upon by them therein." As correctly held in our Decision dated
January 27, 1999, the cited report is a mere newspaper account and not even a commercial
list. At most, it is but an analysis or opinion which carries no persuasive weight for purposes
of this case as no sufficient figures to support it were presented. Neither did anybody...
testify to its accuracy. It cannot be said that businessmen generally rely on news items such
as this in their occupation. Besides, no evidence was presented that the publication was
regularly prepared by a person in touch with the market and that it is generally regarded
as... trustworthy and reliable. Absent extrinsic proof of their accuracy, these reports are not
admissible.[6] In the same manner, newspapers containing stock quotations are not
admissible in evidence when the source of the reports is available.[7] With more reason,
mere analyses or projections of such reports cannot be admitted. In particular, the source of
the report in this case can be easily made available considering that the same is necessary
for compliance with certain governmental requirements

6. Metropolitan Bank and Trust Company employees Union-ALU-TUCP v.

NLRC, G.R. No. 102636, Sept 10, 1993
7. Kar Asia, Inc. v. Corona, G.R. No. 154985, Aug 24, 2004
8. G&M Phils., Inc. v. Cruz, G.R. No. 140495, April 15, 2005

9. Chavez vs NLRC, Supreme Packaging Inc, and Alvin Lee

GR No. 146530 January 17, 2005

Facts:

The respondent company, Supreme Packaging Inc., is in the business of manufacturing cartons and
other packaging materials for export and distribution.
The petitioner, Pedro Chavez, was a truck driver (from October 25, 1984) tasked to deliver the
respondent company’s products to its various customers.
The respondent furnished petitioner with a truck that all deliveries were made in accordance with
the routing slips issued by the respondent company indicating the order, time and urgency of
delivery.
On 1992, the petitioner expressed his desire to avail the benefits that a regular employee were
receiving such as overtime pay, nightshift differential pay, and 13th month pay, among others but
nothing was complied.
On February 20, 1995, petitioner filed a complaint for regularization with the Regional Arbitration
Branch No. III of NLRC in San Fernando, Pampanga. Before the case could be heard, respondent
terminated the services of the petitioner.
Hence, the petitioner filed an amended complaint for illegal dismissal, unfair labor practice and non-
payment of overtime pay, nightshift differential, and 13th month pay, among others.
Issue: Whether there exists an employer-employee relationship?

Held:

Yes an employer-employee do exist. The elements to determine the existence of an employment

relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the employer’s power to control the employee’s conduct. The most
important element is the employer’s control of the employee’s conduct, not only as to the result of
the work to be done, but also as to the means and methods to accomplish it. First. Undeniably, it
was the respondents who engaged the services of the petitioner without the intervention of a third
party. Second. Wages are defined as “remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work done or to be done, or for
service rendered or to be rendered. The petitioner is paid on a per trip basis is not significant. This is
merely a method of computing compensation. Third. The respondent’s power to dismiss the
petitioner was inherent in the fact that they engaged the services of the petitioner as truck driver.
They exercised this power by terminating the petitioner’s services albeit in the guise of severance of
contractual relation due allegedly to the latter’s breach of his contractual obligation. Fourth.
Compared to an employee, an independent contractor is one who carries on a distinct and
independent business and undertakes to perform the job, work or service on its own account and
under its own responsibility according to its own manner and method, free from the control and
direction of the principal in all matters connected with the performance of the work except as to the
results thereof. Hence while an independent contractor enjoys independence and freedom from the
control and supervision of his principal. An employee is subject to the employer’s power to control
the means and methods by which the employee’s work is to be performed and accomplished. A
careful review of the records shows that the latter performed his work under the respondents’
supervision and control. The existence of an employer-employee relationship cannot be negated by
expressly repudiating it in a contract and providing therein that the employee is an independent
contractor when the facts clearly show otherwise. Employment status is defined by law and not by
what the parties say it should be.
10. PAL v. Ligan (G.R. No. 146408)
Facts:

Petitioner Philippine Airlines and Synergy Services Corporation as Contractor, entered into
an Agreement whereby Synergy undertook to provide loading and delivery services by
furnishing all the necessary capital, workers, materials, supplies and equipment for the
performance and execution of said work. Herein respondents who appear to have been
assigned to work for petitioner filed complaints before the NLRC for the payment of their
labor standard benefits and regularization of employment status claiming that they are
performing duties directly connected with petitioner’s business. The Labor Arbiter’s decision
found Synergy an independent contractor but was vacated on appeal. The NLRC tribunal
declared Synergy to be a labor-only contractor and was affirmed by the CA. Petitioner
moved for reconsideration but was denied.

Issue:

Whether or not there is labor-only contracting.

Ruling: YES.

For labor-only contracting to exist, Section 5 of D.O. No. 18-02 which requires any of two
elements to be present is, for convenience, re-quoted:

(i) The contractor or subcontractor does not have substantial capital or investment which

relates to the job, work or service to be performed and the employees recruited, supplied or
placed by such contractor or subcontractor are performing activities which are directly
related to the main business of the principal, OR

(ii) The contractor does not exercise the right to control over the performance of the work
of the contractual employee.

Even if only one of the two elements is present then, there is labor-only contracting.

From the records of the case, it is gathered that the work performed by almost all of the
respondents – loading and unloading of baggage and cargo of passengers – is directly
related to the main business of petitioner. And the equipment used by respondents as
station loaders, such as trailers and conveyors, are owned by petitioner.

REPORT THIS AD
Petitioner PAL, and not Synergy, exercises control and supervision over the
respondent workers’ methods of doing the work, as reflected in their
Agreement: (1) Contractor (Synergy) shall require all its workers, employees, suppliers and
visitors to comply with OWNER’S (PAL) rules, regulations, procedures and
directives relative to the safety and security of OWNER’S premises, properties and
operations (2) xxx shall furnish its employees and workers identification cards to be
countersigned by OWNER and uniforms to be approved by OWNER. (3) OWNER may
require CONTRACTOR to dismiss immediately and prohibit entry into OWNER’S
premises of any person employed therein by CONTRACTOR who in OWNER’S opinion is
incompetent or misconducts himself or does not comply with OWNER’S reasonable
instructions xxx
Petitioner in fact admitted that it fixes the work schedule of respondents as their work was
dependent on the frequency of plane arrivals. And as the NLRC found, petitioner’s
managers and supervisors approved respondents’ weekly work assignments and
respondents and other regular PAL employees were all referred to as “station attendants” of
the cargo operation and airfreight services of petitioner.

Respondents having performed tasks which are usually necessary and desirable in the air
transportation business of petitioner, they should be deemed its regular employees and
Synergy as a labor-only contractor.

11. WILHELMINA S. OROZCO v. FIFTH DIVISION OF CA, GR No. 155207, 2008-08-13

Facts:

In March 1990, PDI engaged the services of petitioner to write a weekly column for its Lifestyle
section. She religiously submitted her articles every week, except for a six-month stint in New York
City when she, nonetheless, sent several articles through mail. She received... compensation of
P250.00 - later increased to P300.00 - for every column published.[5]

On November 7, 1992, petitioner's column appeared in the PDI for the last time. Petitioner claims
that her then editor, Ms. Lita T. Logarta,[6] told her that respondent Leticia Jimenez Magsanoc, PDI
Editor in Chief, wanted to stop publishing her column for... no reason at all and advised petitioner to
talk to Magsanoc herself. Petitioner narrates that when she talked to Magsanoc, the latter informed
her that it was PDI Chairperson Eugenia Apostol who had asked to stop publication of her column,
but that in a telephone conversation... with Apostol, the latter said that Magsanoc informed her
(Apostol) that the Lifestyle section already had many columnists.[7]

On the other hand, PDI claims that in June 1991, Magsanoc met with the Lifestyle section editor to
discuss how to improve said section. They agreed to cut down the number of columnists by keeping
only those whose columns were well-written, with regular feedback and following. In... their
judgment, petitioner's column failed to improve, continued to be superficially and poorly written,
and failed to meet the high standards of the newspaper. Hence, they decided to terminate
petitioner's column.[8]

Aggrieved by the newspaper's action, petitioner filed a complaint for illegal dismissal, backwages,
moral and exemplary damages, and other money claims before the NLRC.

On October 29, 1993, Labor Arbiter Arthur Amansec rendered a Decision in favor of petitioner, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered, finding complainant to be an employee of respondent
company; ordering respondent company to reinstate her to her former or equivalent position, with
backwages.

Respondent company is also ordered to pay her 13th month pay and service incentive leave pay.

Other claims are hereby dismissed for lack of merit.

SO ORDERED.[9]

The Labor Arbiter found that:

[R]espondent company exercised full and complete control over the means and method by which
complainant's work - that of a regular columnist - had to be accomplished. This control might not be
found in an instruction, verbal or oral, given to complainant defining the... means and method she
should write her column. Rather, this control is manifested and certained (sic) in respondents'
admitted prerogative to reject any article submitted by complainant for publication.

By virtue of this power, complainant was helplessly constrained to adopt her subjects and style of
writing to suit the editorial taste of her editor. Otherwise, off to the trash can went her articles.

Moreover, this control is already manifested in column title, "Feminist Reflection" allotted
complainant. Under this title, complainant's writing was controlled and limited to a woman's
perspective on matters of feminine interests. That respondent had no control over the subject...
matter written by complainant is strongly belied by this observation. Even the length of
complainant's articles were set by respondents.

Inevitably, respondents would have no control over when or where complainant wrote her articles
as she was a columnist who could produce an article in thirty (3) (sic) months or three (3) days,
depending on her mood or the amount of research required for an article but her... actions were
controlled by her obligation to produce an article a week. If complainant did not have to report for
work eight (8) hours a day, six (6) days a week, it is because her task was mainly mental. Lastly, the
fact that her articles were (sic) published weekly for three

(3) years show that she was respondents' regular employee, not a once-in-a-blue-moon contributor
who was not under any pressure or obligation to produce regular articles and who wrote at his own
whim and leisure.[10]

PDI appealed the Decision to the NLRC. In a Decision dated August 23, 1994, the NLRC Second
Division dismissed the appeal thereby affirming the Labor Arbiter's Decision. The NLRC initially noted
that PDI failed to perfect its appeal, under Article 223 of the Labor Code, due to... non-filing of a
cash or surety bond. The NLRC said that the reason proffered by PDI for not filing the bond - that it
was difficult or impossible to determine the amount of the bond since the Labor Arbiter did not
specify the amount of the judgment award - was not persuasive. It... said that all PDI had to do was
compute based on the amount it was paying petitioner, counting the number of weeks from
November 7, 1992 up to promulgation of the Labor Arbiter's decision.[11]

The NLRC also resolved the appeal on its merits. It found no error in the Labor Arbiter's findings of
fact and law. It sustained the Labor Arbiter's reasoning that respondent PDI exercised control over
petitioner's work.

PDI then filed a Petition for Review[12] before this Court seeking the reversal of the NLRC Decision.
However, in a Resolution[13] dated December 2, 1998, this Court referred the case to the Court of
Appeals, pursuant to our ruling in

St. Martin Funeral Homes v. National Labor Relations Commission.[14]

The CA rendered its assailed Decision on June 11, 2002. It set aside the NLRC Decision and dismissed
petitioner's Complaint. It held that the NLRC misappreciated the facts and rendered a ruling wanting
in substantial evidence. The CA said:

The Court does not agree with public respondent NLRC's conclusion. First, private respondent
admitted that she was and [had] never been considered by petitioner PDI as its employee. Second, it
is not disputed that private respondent had no employment contract with... petitioner PDI. In fact,
her engagement to contribute articles for publication was based on a verbal agreement between
her and the petitioner's Lifestyle Section Editor. Moreover, it was evident that private respondent
was not required to report to the office eight (8) hours a... day. Further, it is not disputed that she
stayed in New York for six (6) months without petitioner's permission as to her leave of absence nor
was she given any disciplinary action for the same. These undisputed facts negate private
respondent's claim that she is an employee of... petitioner.

Moreover, with regards (sic) to the control test, the public respondent NLRC's ruling that the
guidelines given by petitioner PDI for private respondent to follow, e.g. in terms of space allocation
and length of article, is not the form of control envisioned by the guidelines... set by the Supreme
Court. The length of the article is obviously limited so that all the articles to be featured in the paper
can be accommodated. As to the topic of the article to be published, it is but logical that private
respondent should not write morbid topics such as... death because she is contributing to the
lifestyle section. Other than said given limitations, if the same could be considered limitations, the
topics of the articles submitted by private respondent were all her choices. Thus, the petitioner PDI
in deciding to publish private... respondent's articles only controls the result of the work and not the
means by which said articles were written.

As such, the above facts failed to measure up to the control test necessary for an employer-
employee relationship to exist.[15]
Petitioner's Motion for Reconsideration was denied in a Resolution dated September 11, 2002. She
then filed the present Petition for Review.

In a Resolution dated April 29, 2005, the Court, without giving due course to the petition, ordered
the Labor Arbiter to clarify the amount of the award due petitioner and, thereafter, ordered PDI to
post the requisite bond. Upon compliance therewith, the petition would be given... due course.
Labor Arbiter Amansec clarified that the award under the Decision amounted to P15,350.00. Thus,
PDI posted the requisite bond on January 25, 2007.[16]

We shall initially dispose of the procedural issue raised in the Petition.

Petitioner argues that the CA erred in not dismissing outright PDI's Petition for Certiorari for PDI's
failure to post a cash or surety bond in violation of Article 223 of the Labor Code.

This issue was settled by this Court in its Resolution dated April 29, 2005.[17] There, the Court held:

But while the posting of a cash or surety bond is jurisdictional and is a condition sine qua non to the
perfection of an appeal, there is a plethora of jurisprudence recognizing exceptional instances
wherein the Court relaxed the bond requirement as a condition for... posting the appeal.

xxxx

In the case of Taberrah v. NLRC, the Court made note of the fact that the assailed decision of the
Labor Arbiter concerned did not contain a computation of the monetary award due the employees,
a circumstance which is likewise present in this case. In said case, the Court... stated,... As a rule,
compliance with the requirements for the perfection of an appeal within the reglamentary (sic)
period is mandatory and jurisdictional. However, in National Federation of Labor Unions v. Ladrido
as well as in several other cases, this Court relaxed the requirement of... the posting of an appeal
bond within the reglementary period as a condition for perfecting the appeal. This is in line with the
principle that substantial justice is better served by allowing the appeal to be resolved on the merits
rather than dismissing it based on a... technicality.

The judgment of the Labor Arbiter in this case merely stated that petitioner was entitled to
backwages, 13th month pay and service incentive leave pay without however including a
computation of the alleged amounts.

xxxx

In the case of NFLU v. Ladrido III, this Court postulated that "private respondents cannot be
expected to post such appeal bond equivalent to the amount of the monetary award when the
amount thereof was not included in the decision of the labor arbiter." The... computation of the
amount awarded to petitioner not having been clearly stated in the decision of the labor arbiter,
private respondents had no basis for determining the amount of the bond to be posted.

Thus, while the requirements for perfecting an appeal must be strictly followed as they are
considered indispensable interdictions against needless delays and for orderly discharge of judicial
business, the law does admit of exceptions when warranted by the circumstances.

Technicality should not be allowed to stand in the way of equitably and completely resolving the
rights and obligations of the parties. But while this Court may relax the observance of reglementary
periods and technical rules to achieve substantial justice, it is not prepared to... give due course to
this petition and make a pronouncement on the weighty issue obtaining in this case until the law
has been duly complied with and the requisite appeal bond duly paid by private respondents.[18]

Records show that PDI has complied with the Court's directive for the posting of the bond;[19] thus,
that issue has been laid to rest.

We now proceed to rule on the merits of this case.

The main issue we must resolve is whether petitioner is an employee of PDI, and if the answer be in
the affirmative, whether she was illegally dismissed.

We rule for the respondents.

The existence of an employer-employee relationship is essentially a question of fact.[20] Factual

findings of quasi-judicial agencies like the NLRC are generally accorded respect and finality if
supported by substantial evidence.[21]

Considering, however, that the CA's findings are in direct conflict with those of the Labor Arbiter and
NLRC, this Court must now make its own examination and evaluation of the facts of this case.

It is true that petitioner herself admitted that she "was not, and [had] never been considered
respondent's employee because the terms of works were arbitrarily decided upon by the
respondent."[22] However, the employment status of a person is defined and... prescribed by law
and not by what the parties say it should be.[23]

This Court has constantly adhered to the "four-fold test" to determine whether there exists an
employer-employee relationship between parties.[24] The four elements of an employment
relationship are: (a) the selection and engagement of the employee; (b) the... payment of wages; (c)
the power of dismissal; and (d) the employer's power to control the employee's conduct.[25]
Of these four elements, it is the power of control which is the most crucial[26] and most
determinative factor,[27] so important, in fact, that the other elements may even be disregarded.
[28] As this Court has... previously held:... the significant factor in determining the relationship of
the parties is the presence or absence of supervisory authority to control the method and the details
of performance of the service being rendered, and the degree to which the principal may intervene
to exercise such... control.[29]

In other words, the test is whether the employer controls or has reserved the right to control the
employee, not only as to the work done, but also as to the means and methods by which the same is
accomplished.[30]

Petitioner argues that several factors exist to prove that respondents exercised control over her and
her work, namely:

As to the Contents of her Column - The PETITIONER had to insure that the contents of her column
hewed closely to the objectives of its Lifestyle Section and the over-all principles that the newspaper
projects itself to stand for. As admitted, she wanted to write about death... in relation to All Souls
Day but was advised not to.

As to Time Control - The PETITIONER, as a columnist, had to observe the deadlines of the newspaper
for her articles to be published. These deadlines were usually that time period when the Section
Editor has to "close the pages" of the Lifestyle Section where the column in... located. "To close the
pages" means to prepare them for printing and publication.

As a columnist, the PETITIONER's writings had a definite day on which it was going to appear. So she
submitted her articles two days before the designated day on which the column would come out.

This is the usual routine of newspaper work. Deadlines are set to fulfill the newspapers' obligations
to the readers with regard to timeliness and freshness of ideas.

As to Control of Space - The PETITIONER was told to submit only two or three pages of article for the
column, (sic) "Feminist Reflections" per week. To go beyond that, the Lifestyle editor would already
chop off the article and publish the rest for the next week. This shows... that PRIVATE RESPONDENTS
had control over the space that the PETITIONER was assigned to fill.

As to Discipline - Over time, the newspaper readers' eyes are trained or habituated to look for and
read the works of their favorite regular writers and columnists. They are conditioned, based on their
daily purchase of the newspaper, to look for specific spaces in the... newspapers for their favorite
write-ups/or opinions on matters relevant and significant issues aside from not being late or amiss in
the responsibility of timely submission of their articles.
The PETITIONER was disciplined to submit her articles on highly relevant and significant issues on
time by the PRIVATE RESPONDENTS who have a say on whether the topics belong to those
considered as highly relevant and significant, through the Lifestyle Section Editor. The

PETITIONER had to discuss the topics first and submit the articles two days before publication date
to keep her column in the newspaper space regularly as expected or without miss by its readers.[31]

Given this discussion by petitioner, we then ask the question: Is this the form of control that our
labor laws contemplate such as to establish an employer-employee relationship between petitioner
and respondent PDI?

It is not.

Petitioner has misconstrued the "control test," as did the Labor Arbiter and the NLRC.

Not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of
the former. Rules which serve as general guidelines towards the achievement of the mutually
desired result are not indicative of the power of control.[32] Thus, this Court has explained:

It should, however, be obvious that not every form of control that the hiring party reserves to
himself over the conduct of the party hired in relation to the services rendered may be accorded the
effect of establishing an employer-employee relationship between them... in the legal or technical
sense of the term. A line must be drawn somewhere, if the recognized distinction between an
employee and an individual contractor is not to vanish altogether. Realistically, it would be a rare
contract of service that gives untrammelled freedom to the... party hired and eschews any
intervention whatsoever in his performance of the engagement.

Logically, the line should be drawn between rules that merely serve as guidelines towards the
achievement of the mutually desired result without dictating the means or methods to be employed
in attaining it, and those that control or fix the methodology and bind or restrict the... party hired to
the use of such means. The first, which aim only to promote the result, create no employer-
employee relationship unlike the second, which address both the result and the means used to
achieve it. x x x.[33]

The main determinant therefore is whether the rules set by the employer are meant to control not
just the results of the work but also the means and method to be used by the hired party in order to
achieve such results. Thus, in this case, we are to examine the factors... enumerated by petitioner to
see if these are merely guidelines or if they indeed fulfill the requirements of the control test.

Petitioner believes that respondents' acts are meant to control how she executes her work. We do
not agree. A careful examination reveals that the factors enumerated by the petitioner are inherent
conditions in running a newspaper. In other words, the so-called control as to... time, space, and
discipline are dictated by the very nature of the newspaper business itself.
We agree with the observations of the Office of the Solicitor General that:

The Inquirer is the publisher of a newspaper of general circulation which is widely read throughout
the country. As such, public interest dictates that every article appearing in the newspaper should
subscribe to the standards set by the Inquirer, with its thousands... of readers in mind. It is not,
therefore, unusual for the Inquirer to control what would be published in the newspaper. What is
important is the fact that such control pertains only to the end result, i.e., the submitted articles.
The Inquirer has no control over [petitioner] as... to the means or method used by her in the
preparation of her articles. The articles are done by [petitioner] herself without any intervention
from the Inquirer.[34]

Petitioner has not shown that PDI, acting through its editors, dictated how she was to write or
produce her articles each week. Aside from the constraints presented by the space allocation of her
column, there were no restraints on her creativity; petitioner was free to write... her column in the
manner and style she was accustomed to and to use whatever research method she deemed
suitable for her purpose. The apparent limitation that she had to write only on subjects that befitted
the Lifestyle section did not translate to control, but was simply a... logical consequence of the fact
that her column appeared in that section and therefore had to cater to the preference of the
readers of that section.

The perceived constraint on petitioner's column was dictated by her own choice of her column's
perspective. The column title "Feminist Reflections" was of her own choosing, as she herself
admitted, since she had been known as a feminist writer.[35] Thus,... respondent PDI, as well as her
readers, could reasonably expect her columns to speak from such perspective.

Contrary to petitioner's protestations, it does not appear that there was any actual restraint or
limitation on the subject matter - within the Lifestyle section - that she could write about.
Respondent PDI did not dictate how she wrote or what she wrote in her column. Neither... did PDI's
guidelines dictate the kind of research, time, and effort she put into each column. In fact, petitioner
herself said that she received "no comments on her articles...except for her to shorten them to fit
into the box allotted to her column." Therefore, the control that

PDI exercised over petitioner was only as to the finished product of her efforts, i.e., the column
itself, by way of either shortening or outright rejection of the column.

The newspaper's power to approve or reject publication of any specific article she wrote for her
column cannot be the control contemplated in the "control test," as it is but logical that one who
commissions another to do a piece of work should have the right to accept or reject... the product.
The important factor to consider in the "control test" is still the element of control over how the
work itself is done, not just the end result thereof.

In contrast, a regular reporter is not as independent in doing his or her work for the newspaper. We
note the common practice in the newspaper business of assigning its regular reporters to cover
specific subjects, geographical locations, government agencies, or areas of... concern, more
commonly referred to as "beats." A reporter must produce stories within his or her particular beat
and cannot switch to another beat without permission from the editor. In most newspapers also, a
reporter must inform the editor about the story that he or she is... working on for the day. The story
or article must also be submitted to the editor at a specified time. Moreover, the editor can easily
pull out a reporter from one beat and ask him or her to cover another beat, if the need arises.

This is not the case for petitioner. Although petitioner had a weekly deadline to meet, she was not
precluded from submitting her column ahead of time or from submitting columns to be published at
a later time. More importantly, respondents did not dictate upon petitioner the... subject matter of
her columns, but only imposed the general guideline that the article should conform to the
standards of the newspaper and the general tone of the particular section.

Where a person who works for another performs his job more or less at his own pleasure, in the
manner he sees fit, not subject to definite hours or conditions of work, and is compensated
according to the result of his efforts and not the amount thereof, no employer-employee...
relationship exists.[36]

Aside from the control test, this Court has also used the economic reality test. The economic
realities prevailing within the activity or between the parties are examined, taking into consideration
the totality of circumstances surrounding the true nature of the relationship... between the parties.
[37] This is especially appropriate when, as in this case, there is no written agreement or contract on
which to base the relationship. In our jurisdiction, the benchmark of economic reality in analyzing
possible employment relationships... for purposes of applying the Labor Code ought to be the
economic dependence of the worker on his employer.[38]

Petitioner's main occupation is not as a columnist for respondent but as a women's rights advocate
working in various women's organizations.[39] Likewise, she herself admits that she also contributes
articles to other publications.[40]

Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued
employment in respondent's line of business.[41]

The inevitable conclusion is that petitioner was not respondent PDI's employee but an independent
contractor, engaged to do independent work.

There is no inflexible rule to determine if a person is an employee or an independent contractor;

thus, the characterization of the relationship must be made based on the particular circumstances
of each case.[42] There are several factors[43] that may be considered by the courts, but as we
already said, the right to control is the dominant factor in determining whether one is an employee
or an independent contractor.[44]

In our jurisdiction, the Court has held that an independent contractor is one who carries on a
distinct and independent business and undertakes to perform the job, work, or service on one's own
account and under one's own responsibility according to one's own manner and method,... free
from the control and direction of the principal in all matters connected with the performance of the
work except as to the results thereof.[45]

On this point, Sonza v. ABS-CBN Broadcasting Corporation[46] is enlightening. In that case, the Court
found, using the four-fold test, that petitioner, Jose Y. Sonza, was not an employee of ABS-CBN, but
an independent contractor. Sonza was hired by

ABS-CBN due to his "unique skills, talent and celebrity status not possessed by ordinary employees,"
a circumstance that, the Court said, was indicative, though not conclusive, of an independent
contractual relationship. Independent contractors often present themselves to... possess unique
skills, expertise or talent to distinguish them from ordinary employees.[47] The Court also found
that, as to payment of wages, Sonza's talent fees were the result of negotiations between him and
ABS-CBN.[48] As to the... power of dismissal, the Court found that the terms of Sonza's engagement
were dictated by the contract he entered into with ABS-CBN, and the same contract provided that
either party may terminate the contract in case of breach by the other of the terms thereof.[49]
However, the Court held that the foregoing are not determinative of an employer-employee
relationship. Instead, it is still the power of control that is most important.

On the power of control, the Court found that in performing his work, Sonza only needed his skills
and talent - how he delivered his lines, appeared on television, and sounded on radio were outside
ABS-CBN's control.[50] Thus:

We find that ABS-CBN was not involved in the actual performance that produced the finished
product of SONZA's work. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely
reserved the right to modify the program format and airtime schedule "for more... effective
programming." ABS-CBN's sole concern was the quality of the shows and their standing in the
ratings. Clearly, ABS-CBN did not exercise control over the means and methods of performance of
SONZA's work.

SONZA claims that ABS-CBN's power not to broadcast his shows proves ABS-CBN's power over the
means and methods of the performance of his work. Although ABS-CBN did have the option not to
broadcast SONZA's show, ABS-CBN was still obligated to pay SONZA's talent fees... Thus, even... if
ABS-CBN was completely dissatisfied with the means and methods of SONZA's performance of his
work, or even with the quality or product of his work, ABS-CBN could not dismiss or even discipline
SONZA. All that ABS-CBN could do is not to broadcast SONZA's show but ABS-CBN must... still pay his
talent fees in full.

Clearly, ABS-CBN's right not to broadcast SONZA's show, burdened as it was by the obligation to
continue paying in full SONZA's talent fees, did not amount to control over the means and methods
of the performance of SONZA's work. ABS-CBN could not terminate or discipline SONZA... even if the
means and methods of performance of his work - how he delivered his lines and appeared on
television - did not meet ABS-CBN's approval. This proves that ABS-CBN's control was limited only to
the result of SONZA's work, whether to broadcast the final product or not.
In either case, ABS-CBN must still pay SONZA's talent fees in full until the expiry of the Agreement.

In Vaughan, et al. v. Warner, et al., the United States Circuit Court of Appeals ruled that vaudeville
performers were independent contractors although the management reserved the right to delete
objectionable features in their shows. Since the management did not... have control over the
manner of performance of the skills of the artists, it could only control the result of the work by
deleting objectionable features.

SONZA further contends that ABS-CBN exercised control over his work by supplying all equipment
and crew. No doubt, ABS-CBN supplied the equipment, crew and airtime needed to broadcast the
"Mel & Jay" programs. However, the equipment, crew and airtime are not the "tools and...
instrumentalities" SONZA needed to perform his job. What SONZA principally needed were his
talent or skills and the costumes necessary for his appearance. Even though ABS-CBN provided
SONZA with the place of work and the necessary equipment, SONZA was still an independent...
contractor since ABS-CBN did not supervise and control his work. ABS-CBN's sole concern was for
SONZA to display his talent during the airing of the programs.

A radio broadcast specialist who works under minimal supervision is an independent contractor.
SONZA's work as television and radio program host required special skills and talent, which SONZA
admittedly possesses. The records do not show that ABS-CBN exercised any supervision... and
control over how SONZA utilized his skills and talent in his shows.[51]

The instant case presents a parallel to Sonza. Petitioner was engaged as a columnist for her talent,
skill, experience, and her unique viewpoint as a feminist advocate. How she utilized all these in
writing her column was not subject to dictation by respondent. As in

Sonza, respondent PDI was not involved in the actual performance that produced the finished
product. It only reserved the right to shorten petitioner's articles based on the newspaper's capacity
to accommodate the same. This fact, we note, was not unique to petitioner's... column. It is a reality
in the newspaper business that space constraints often dictate the length of articles and columns,
even those that regularly appear therein.

Furthermore, respondent PDI did not supply petitioner with the tools and instrumentalities she
needed to perform her work. Petitioner only needed her talent and skill to come up with a column
every week. As such, she had all the tools she needed to perform her work.

Considering that respondent PDI was not petitioner's employer, it cannot be held guilty of illegal
dismissal.

WHEREFORE, the foregoing premises considered, the Petition is DISMISSED. The Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 50970 are hereby AFFIRMED.

SO ORDERED.
12. DUMPIT-MURILLO VS CA (GR NO. 164652 JUNE 8, 2007)
Dumpit-Murillo vs Court of Appeals
GR No. 164652 June 8, 2007

Facts: On October 2, 1995, under talent contract no. NT95-1805, private respondent Associated
Broadcasting Company (ABC) hired petitioner Thelma Dumpit-Murillo as a newscaster and co-
anchor of Balitang-Balita, an early evening news program. The contract was for a period of 3
months. It renewed under talent contract nos. NT95-1915, NT96-3002, NT98-4984, and NT99-5649.
In addition, petitioner’s services were engaged for the program “Live on Five.” On September 30,
1999, after 4 years of repeated renewals, petitioner’s talent contract expired. Two weeks after the
expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice President for news and
public affairs of ABC, informing the latter that she was still interested in renewing her contract
subject to a salary increase, thereafter, petitioner stopped reporting for work. On November 5, 1999
she wrote Mr. Javier another letter.

Issue: Whether or not the continuous renewal of petitioner’s talent contracts constitute regularity in
the employment status.

Held: Yes. An employer-employee relationship was created when the private respondents started to
merely renew the contracts repeatedly 15 times for 4 consecutive years.

Petitioner was a regular employee under contemplation of law. The practice of having fixed-term
contracts in the industry does not automatically make all talent contracts valid and compliant with
labor law. The assertion that a talent contract exists does not necessarily prevent a regular
employment status.

The elements to determine the existence of an employment relationship are: a.) The selection and
engagement of the employee; b.) The payment of wages; c.) The power of dismissal; and d.) The
employer’s control of the employee’s conduct, not only as to the result of the work to be done, but
also as to the means and methods to accomplish it.

The duties of petitioner as enumerated in her employment contract indicate that ABC had control
over the work or petitioner. Aside from control, ABC also dictated the work assignments and
payment of petitioner’s wages. ABC also had power to dismiss her. All these being present, clearly
there existed an employment relationship between petitioner and ABC.

Concerning regular employment, the law provides for 2 kinds of employees, namely: 1.) Those who
are engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer; and 2.) Those who have rendered at least one year of service, whether
continuous or broken with respect to the activity in which they are employed. In other words,
regular status arises from either the nature of work of the employee or the duration of his
employment.

The primary standard of determining regular employment is the reasonable connection between
the particular activity performed by the employee vis-a-vis the usual trade or business of the
employer. This connection can be determined by considering the nature of the work performed and
its relation to the scheme of the particular business or trade in its entirety. If the employee has been
performing the job for at least a year, even if the performance is not continuous and merely
intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business.

13. ESCASINAS ans SINGCO vs. SHANGRI-LA and DR. PEPITO

G.R. No. 178827

March 4, 2009

FACTS: RNs Escasinas and Singco were engaged by Dr. Pepito to work in her clinic at respondent
Shangri-la’s Mactan Island Resort in Cebu of which she was a retained physician.

Petitioners filed with the NLRC Regional Arbitration Branch No. VII a complaint for regularization,
underpayment of wages, non-payment of holiday pay, night shift differential and 13th month pay
differential against respondents, claiming that they are regular employees of Shangri-la.

Shangri-la claimed, however, that petitioners were not its employees but of respondent doctor
whom it retained via Memorandum of Agreement (MOA) pursuant to Article 157 of the Labor Code,
as amended.

Labor Arbiter Carreon declared petitioners to be regular employees of Shangri-la. The Arbiter thus
ordered Shangri-la to grant them the wages and benefits due them as regular employees from the
time their services were engaged.

The NLRC granted Shangri-la’s and respondent doctor’s appeal and dismissed petitioners’ complaint
for lack of merit, it finding that no employer-employee relationship exists between petitioner and
Shangri-la.

ISSUE: are petitioners regular employees of Shangri-la?

HELD: NO, but of independent contractor Dr. Pepito

Art. 157 does not require the engagement of full-time nurses as regular employees of a company
employing not less than 50 workers

ART. 157. Emergency medical and dental services. – It shall be the duty of every employer to furnish
his employees in any locality with free medical and dental attendance and facilities consisting of:

(a) The services of a full-time registered nurse when the number of employees exceeds fifty (50) but
not more than two hundred (200) except when the employer does not maintain hazardous
workplaces, in which case the services of a graduate first-aider shall be provided for the protection
of the workers, where no registered nurse is available. The Secretary of Labor shall provide by
appropriate regulations the services that shall be required where the number of employees does
not exceed fifty (50) and shall determine by appropriate order hazardous workplaces for purposes of
this Article;

(b) The services of a full-time registered nurse, a part-time physician and dentist, and an emergency
clinic, when the number of employees exceeds two hundred (200) but not more than three hundred
(300); and

(c) The services of a full-time physician, dentist and full-time registered nurse as well as a dental
clinic, and an infirmary or emergency hospital with one bed capacity for every one hundred (100)
employees when the number of employees exceeds three hundred (300).

In cases of hazardous workplaces, no employer shall engage the services of a physician or dentist
who cannot stay in the premises of the establishment for at least two (2) hours, in the case of those
engaged on part-time basis, and not less than eight (8) hours in the case of those employed on full-
time basis. Where the undertaking is nonhazardous in nature, the physician and dentist may be
engaged on retained basis, subject to such regulations as the Secretary of Labor may prescribe to
insure immediate availability of medical and dental treatment and attendance in case of emergency.

Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to
“furnish” its employees with the services of a full-time registered nurse, a part-time physician and
dentist, and an emergency clinic which means that it should provide or make available such medical
and allied services to its employees, not necessarily to hire or employ a service provider. As held in
Philippine Global Communications vs. De Vera:

x x x while it is true that the provision requires employers to engage the services of medical
practitioners in certain establishments depending on the number of their employees, nothing is
there in the law which says that medical practitioners so engaged be actually hired as employees,
adding that the law, as written, only requires the employer “to retain”, not employ, a part-time
physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours.
The term “full-time” in Art. 157 cannot be construed as referring to the type of employment of the
person engaged to provide the services, for Article 157 must not be read alongside Art. 280 in order
to vest employer-employee relationship on the employer and the person so engaged. So De Vera
teaches:

x x x For, we take it that any agreement may provide that one party shall render services for and in
behalf of another, no matter how necessary for the latter’s business, even without being hired as an
employee. This set-up is precisely true in the case of an independent contractorship as well as in an
agency agreement. Indeed, Article 280 of the Labor Code, quoted by the appellate court, is not the
yardstick for determining the existence of an employment relationship. As it is, the provision merely
distinguishes between two (2) kinds of employees, i.e., regular and casual. x x x

The phrase “services of a full-time registered nurse” should thus be taken to refer to the kind of
services that the nurse will render in the company’s premises and to its employees, not the manner
of his engagement.

**

As to whether respondent doctor can be considered a legitimate independent contractor, the

pertinent sections of DOLE Department Order No. 10, series of 1997, illuminate:

Sec. 8. Job contracting. – There is job contracting permissible under the Code if the following
conditions are met:

(1) The contractor carries on an independent business and undertakes the contract work on his own
account under his own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected with the performance of
the work except as to the results thereof; and

(2) The contractor has substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct of his business.

Sec. 9. Labor-only contracting. –

(a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in
labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipment, machineries,
work premises and other materials; and
(2) The workers recruited and placed by such persons are performing activities which are directly
related to the principal business or operations of the employer in which workers are habitually
employed.

(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as
contractor shall be considered merely as an agent or intermediary of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were directly employed by
him.

(c) For cases not falling under this Article, the Secretary of Labor shall determine through
appropriate orders whether or not the contracting out of labor is permissible in the light of the
circumstances of each case and after considering the operating needs of the employer and the rights
of the workers involved. In such case, he may prescribe conditions and restrictions to insure the
protection and welfare of the workers.

The existence of an independent and permissible contractor relationship is generally established by

considering the following determinants: whether the contractor is carrying on an independent
business; the nature and extent of the work; the skill required; the term and duration of the
relationship; the right to assign the performance of a specified piece of work; the control and
supervision of the work to another; the employer’s power with respect to the hiring, firing and
payment of the contractor’s workers; the control of the premises; the duty to supply the premises,
tools, appliances, materials and labor; and the mode, manner and terms of payment.

On the other hand, existence of an employer- employee relationship is established by the

presence of the following determinants:

(1) the selection and engagement of the workers;

(2) power of dismissal;

(3) the payment of wages by whatever means; and

(4) the power to control the worker’s conduct, with the latter assuming primacy in the overall
consideration.

Against the above-listed determinants, the Court holds that respondent doctor is a legitimate
independent contractor. That Shangri-la provides the clinic premises and medical supplies for use
of its employees and guests does not necessarily prove that respondent doctor lacks substantial
capital and investment. Besides, the maintenance of a clinic and provision of medical services to its
employees is required under Art. 157, which are not directly related to Shangri-la’s principal
business – operation of hotels and restaurants.
As to payment of wages, respondent doctor is the one who underwrites the following: salaries, SSS
contributions and other benefits of the staff; group life, group personal accident insurance and
life/death insurance, as well as value added taxes and withholding taxes. It is unlikely that
respondent doctor would report petitioners as workers, pay their SSS premium as well as their
wages if they were not indeed her employees

With respect to the supervision and control of the nurses and clinic staff, it is not disputed that a
document, “Clinic Policies and Employee Manual” claimed to have been prepared by respondent
doctor exists, to which petitioners gave their conformity and in which they acknowledged their co-
terminus employment status. It is thus presumed that said document, and not the employee
manual being followed by Shangri-la’s regular workers, governs how they perform their respective
tasks and responsibilities.

In fine, as Shangri-la does not control how the work should be performed by petitioners, it is not
petitioners’ employer.

14. CIR V NLRC GR No. 74965, November 3, 1994

Facts: On January 12, 1984, the CIR demanded payment from private respondent Maritime
Company of the Philippines of deficiency common carrier’s tax, fixed tax, 6% commercial broker’s
tax, documentary stamp tax, income tax and withholding tax totaling P17,284,882.45. The
assessment became final and executory, and with private respondent’s failure to pay the tax
liabilities, the CIR issued warrants of distraint of personal property and levy of real property which
were duly served on January 23, 1985. On April 16, 1985, a “receipt of goods, articles and things”
was executed covering, among others, 6 barges as proof of constructive distraint of property but the
same was not signed by any representative of private respondent because of the refusal of the
persons actually in possession of the barges.

It appeared that 4 of the barges constructively distrained were also levied upon by a deputy sheriff
of Manila on July 20, 1985 and sold at public auction to satisfy a judgment for unpaid wages and
other benefits of employees of private respondent.

Issue: Who has a preferential lien over the barges, the Government or the company’s employees?

Held: The court held that it is the government which has preferential lien over the barges under
Articles 2241 and 2247 of the Civil Code. Accordingly, the preferential lien of employees for unpaid
wages under Article 110 of the Labor Code applies only to bankruptcy cases where the employer is
under liquidation due to bankruptcy.
The NIRC provides for the collection of delinquent taxes by any of the following remedies: a)
distraint of personal property or levy of real property of the delinquent taxpayer; b) civil or criminal
action.

The court upheld the validity of distraint of the barges against the levy on execution and the claim of
the Government predicated on a tax lien is superior to the claim of a private litigant predicated on a
judgment. The tax lien attaches not only from the service of the warrant of distraint of personal
property but from the time the tax became due and payable. Besides, the distraint on the subject
properties of Maritime Company of the Philippines as well as the notice of their seizure were made
by petitioner, through the CIR, a long before the writ of execution was issued by RTC-Manila, Branch
31. There is no question then that at the time the writ of execution was issued, the two (2) barges,
MCP-1 and MCP-4, were no longer properties of the Maritime Company of the Philippines. The
power of the court in execution of judgment extends only to properties unquestionably belonging to
the judgment debtor. Execution sales affect the rights of the judgment debtor only, and the
purchaser in auction sale requires only such rights as the judgment debtor had tat the time of the
sale. It is also well settled that the sheriff is not authorized to attach or levy on property not
belonging to the judgment debtor.
15. Hautea v. NLRC, G.R. No.96149, Feb 6, 1994