Professional Documents
Culture Documents
cralawred
(O)GAs talent fees, a+ountin, to P1#$,""" +onthl% in the second and third %ear,
are so hu,e and out of the ordinar% that the% indicate +ore an independent
contractual relationship rather than an e+plo%er&e+plo%ee relationship.A:(&C:)
a,reed to pa% (O)GA such hu,e talent fees precisel% because of (O)GAs uni8ue
skills, talent and celebrit% status not possessed b% ordinar% e+plo%ees. Obviousl%,
(O)GA actin, alone possessed enou,h bar,ainin, power to de+and and receive
such hu,e talent fees for his services.The power to bar,ain talent fees wa% above
the salar% scales of ordinar% e+plo%ees is a circu+stance indicative, but not
conclusive, of an independent contractual relationship.
The pa%+ent of talent fees directl% to (O)GA and not to 636DC does not ne,ate
the status of (O)GA as an independent contractor. The parties e>pressl% a,reed on
such +ode of pa%+ent.Ender the A,ree+ent, 636DC is the A'B)T of (O)GA, to
who+ 636DC would have to turn over an% talent fee accruin, under the
A,ree+ent.
C.Po,er of Dismissal
-or violation of an% provision of the A,ree+ent, either part% +a%ter+inate their
relationship.(O)GA failed to show that A:(&C:) could ter+inate his services on
,rounds other than breach of contract, such as retrench+ent to prevent losses as
provided under labor laws.
1
cralawred
Durin, the life of the A,ree+ent, A:(&C:) a,reed to pa% (O)GAs talent fees as
lon, as A'B)T and 3a% (on<a shall faithfull% and co+pletel% perfor+ each condition
of this A,ree+ent.
4
Bven if it suffered severe business losses, A:(&C:) could not
retrench (O)GA because A:(&C:) re+ained obli,ated to pa% (O)GAs talent fees
durin, the life of the A,ree+ent.This circu+stance indicates an independent
contractual relationship between (O)GA and A:(&C:).
(O)GA ad+its that even after A:(&C:) ceased broastin, his pro,ra+s, A:(&C:)
still paid hi+ his talent fees.Plainl%, A:(&C:) adhered to its undertakin, in the
A,ree+ent to continue pa%in, (O)GAs talent fees durin, the re+ainin, life of the
A,ree+ent even if A:(&C:) cancelled (O)GAs pro,ra+s throu,h no fault of
(O)GA.
5
cralawred
(O)GA assails the .abor Arbiters interpretation of his rescission of the A,ree+ent
as an ad+ission that he is not an e+plo%ee of A:(&C:).The .abor Arbiter stated
that if it were true that co+plainant was reall% an e+plo%ee, he would +erel%
resi,n, instead. (O)GA did actuall% resi,n fro+ A:(&C:) but he also, as president
of 636DC, rescinded the A,ree+ent.(O)GAs letter clearl% bears this
out.
2
9owever, the +anner b% which (O)GA ter+inated his relationship with A:(&
C:) is i++aterial.Ahether (O)GA rescinded the A,ree+ent or resi,ned fro+ work
does not deter+ine his status as e+plo%ee or independent contractor.
D.Po,er of Control
(ince there is no local precedent on whether a radio and television pro,ra+ host is
an e+plo%ee or an independent contractor, we refer to forei,n case law in anal%<in,
the present case. The Enited (tates Court of Appeals, -irst Circuit, recentl% held
in Alberty-Vlez v. Corporacin De uerto !ico ara "a Difusin blica
#$%!&
$
that a television pro,ra+ host is an independent contractor. Ae 8uote
the followin, findin,s of the E.(. court@chanroblesvirtua#awlibrar%
(everal factors favor classif%in, Albert% as an independent contractor.F59st, %
t.4.>5s51& %0t9.ss 5s % s<544.' 31s5t51& 9.@u595&g t%4.&t %&' t9%5&5&g &1t
%>%54%74. 1&*t;.*?17. > > > 4n this re,ard, Albert% possesses a +asters de,ree in
public co++unications and =ournalis+7 is trained in dance, sin,in,, and +odelin,7
tau,ht with the dra+a depart+ent at the Eniversit% of Puerto Rico7 and acted in
several theater and television productions prior to her affiliation with Desde 6i
Pueblo.S.01&', A47.9t8 391>5'.' t;. t114s %&' 5&st9u2.&t%45t5.s &.0.ss%98
:19 ;.9 t1 3.9:192.(pecificall%, she provided, or obtained sponsors to provide, the
costu+es, =ewelr%, and other i+a,e&related supplies and services necessar% for her
appearance.Albert% disputes that this factor favors independent contractor status
because A4PR provided the e8uip+ent necessar% to tape the show.Albert%s
ar,u+ent is +isplaced.The e8uip+ent necessar% for Albert% to conduct 'er -ob as
host of Desde 6i Pueblo related to her appearance on the show.Others provided
e8uip+ent for fil+in, and producin, the show, but these were not the pri+ar% tools
that Albert% used to perfor+ her particular function.4f we accepted this ar,u+ent,
independent contractors could never work on collaborative pro=ects because other
individuals often provide the e8uip+ent re8uired for different aspects of the
collaboration. > > >
T;59', +I!R 01u4' &1t %ss5g& A47.9t8 619< 5& %''5t51& t1 :5425&g #.s'. M5
!u.741.Albert%s contracts with A4PR specificall% provided that A4PR hired her
professional services as 9ostess for the Pro,ra+ Desde 6i Pueblo.There is no
evidence that A4PR assi,ned Albert% tasks in addition to work related to these
tapin,s.> > >
*
/&mp'asis supplied0cralawlibrar%
Appl%in, the 01&t914 t.st to the present case, we find that (O)GA is not an
e+plo%ee but an independent contractor.The control test is the 21st
52319t%&t test our courts appl% in distin,uishin, an e+plo%ee fro+ an independent
contractor.
!
This test is based on the e>tent of control the hirer e>ercises over a
worker.The ,reater the supervision and control the hirer e>ercises, the +ore likel%
the worker is dee+ed an e+plo%ee. The converse holds true as well the less control
the hirer e>ercises, the +ore likel% the worker is considered an independent
contractor.
1"
cralawred
irst, (O)GA contends that A:(&C:) e>ercised control over the +eans and
+ethods of his work.
(O)GAs ar,u+ent is +isplaced.A:(&C:) en,a,ed (O)GAs services specificall% to
co&host the 6el H 3a% pro,ra+s. A:(&C:) did not assi,n an% other work to
(O)GA.To perfor+ his work, (O)GA onl% needed his skills and talent. 9ow (O)GA
delivered his lines, appeared on television, and sounded on radio were outside A:(&
C:)s control.(O)GA did not have to render ei,ht hours of work per da%.The
A,ree+ent re8uired (O)GA to attend onl% rehearsals and tapin,s of the shows, as
well as pre& and post&production staff +eetin,s.
1#
A:(&C:) could not dictate the
contents of (O)GAs script.9owever, the A,ree+ent prohibited (O)GA fro+
critici<in, in his shows A:(&C:) or its interests.
1
The clear i+plication is that
(O)GA had a free hand on what to sa% or discuss in his shows provided he did not
attack A:(&C:) or its interests.
Ae find that A:(&C:) was not involved in the actual perfor+ance that produced the
finished product of (O)GAs work.
11
A:(&C:) did not instruct (O)GA how to
perfor+ his =ob.A:(&C:) +erel% reserved the ri,ht to +odif% the pro,ra+ for+at
and airti+e schedule for +ore effective pro,ra++in,.
14
A:(&C:)s sole concern was
the 8ualit% of the shows and their standin, in the ratin,s.Clearl%, A:(&C:) did not
e>ercise control over the +eans and +ethods of perfor+ance of (O)GAs work.
(O)GA clai+s that A:(&C:)s power not to broast his shows proves A:(&C:)s
power over the +eans and +ethods of the perfor+ance of his work.Althou,h A:(&
C:) did have the option not to broast (O)GAs show, A:(&C:) was still obli,ated to
pa% (O)GAs talent fees...Thus, even if A:(&C:) was co+pletel% dissatisfied with
the +eans and +ethods of (O)GAs perfor+ance of his work, or even with the
8ualit% or product of his work, A:(&C:) could not dis+iss or even discipline
(O)GA.All that A:(&C:) could do is not to broast (O)GAs show but A:(&C:) +ust
still pa% his talent fees in full.
15
cralawred
Clearl%, A:(&C:)s ri,ht not to broast (O)GAs show, burdened as it was b% the
obli,ation to continue pa%in, in full (O)GAs talent fees, did not a+ount to control
over the +eans and +ethods of the perfor+ance of (O)GAs work.A:(&C:) could
not ter+inate or discipline (O)GA even if the +eans and +ethods of perfor+ance
of his work & how he delivered his lines and appeared on television & did not +eet
A:(&C:)s approval.This proves that A:(&C:)s control was li+ited onl% to the result
of (O)GAs work, whether to broast the final product or not.4n either case, A:(&C:)
+ust still pa% (O)GAs talent fees in full until the e>pir% of the A,ree+ent.
4n Vau'han, et al. v. $arner, et al.,
12
the Enited (tates Circuit Court of Appeals
ruled that vaudeville perfor+ers were independent contractors althou,h the
+ana,e+ent reserved the ri,ht to delete ob=ectionable features in their shows.
(ince the +ana,e+ent did not have control over the +anner of perfor+ance of the
skills of the artists, it could onl% control the result of the work b% deletin,
ob=ectionable features.
1$
cralawred
(O)GA further contends that A:(&C:) e>ercised control over his work b% suppl%in,
all e8uip+ent and crew.)o doubt, A:(&C:) supplied the e8uip+ent, crew and
airti+e needed to broast the 6el H 3a% pro,ra+s.9owever, the e8uip+ent, crew and
airti+e are not the tools and instru+entalities (O)GA needed to perfor+ his =ob.
Ahat (O)GA principall% needed were his talent or skills and the costu+es necessar%
for his appearance.
1*
Bven thou,h A:(&C:) provided (O)GA with the place of work
and the necessar% e8uip+ent, (O)GA was still an independent contractor since
A:(&C:) did not supervise and control hiswork. A:(&C:)s sole concern was for
(O)GA to displa% his talent durin, the airin, of the pro,ra+s.
1!
cralawred
A radio broast specialist who works under +ini+al supervision is an independent
contractor.
4"
(O)GAs work as television and radio pro,ra+ host re8uired special
skills and talent, which (O)GA ad+ittedl% possesses.The records do not show that
A:(&C:) e>ercised an% supervision and control over how (O)GA utili<ed his skills
and talent in his shows.
Se#ond, (O)GA ur,es us to rule that he was A:(&C:)s e+plo%ee because A:(&C:)
sub=ected hi+ to its rules and standards of perfor+ance. (O)GA clai+s that this
indicates A:(&C:)s control not onl% JoverK his +anner of work but also the 8ualit%
of his work.
The A,ree+ent stipulates that (O)GA shall abide with the rules and standards of
perfor+ance01>.95&g t%4.&ts
4#
of A:(&C:). The A,ree+ent does not re8uire
(O)GA to co+pl% with the rules and standards of perfor+ance prescribed for
e+plo%ees of A:(&C:).The code of conduct i+posed on (O)GA under the
A,ree+ent refers to the Television and Radio Code of the 5apisanan n, +,a
:roaster sa Pilipinas /5:P0, which has been adopted b% the CO6PA)F /A:(&C:)0 as
its Code of Bthics.
4
The 5:P code applies to broasters, not to e+plo%ees of radio
and television stations.:roasters are not necessaril% e+plo%ees of radio and
television stations.Clearl%, the rules and standards of perfor+ance referred to in the
A,ree+ent are those applicable to talents and not to e+plo%ees of A:(&C:).
4n an% event, not all rules i+posed b% the hirin, part% on the hired part% indicate
that the latter is an e+plo%ee of the for+er.
41
4n this case, (O)GA failed to show
that these rules controlled his perfor+ance. Ae find that these ,eneral rules are
+erel% gu5'.45&.s towards the achieve+ent of the +utuall% desired result, which
are top&ratin, television and radio pro,ra+s that co+pl% with standards of the
industr%.Ae have ruled that@chanroblesvirtua#awlibrar%
-urther, not ever% for+ of control that a part% reserves to hi+self over the conduct
of the other part% in relation to the services bein, rendered +a% be accorded the
effect of establishin, an e+plo%er&e+plo%ee relationship. The facts of this case fall
s8uarel% with the case of 4nsular .ife Assurance Co., .td. v. ).RC. 4n said case, we
held that@
.o,icall%, the line should be drawn between rules that +erel% serve as ,uidelines
towards the achieve+ent of the +utuall% desired result without dictatin, the +eans
or +ethods to be e+plo%ed in attainin, it, and those that control or fi> the
+ethodolo,% and bind or restrict the part% hired to the use of such +eans. The first,
which ai+ onl% to pro+ote the result, create no e+plo%er&e+plo%ee relationship
unlike the second, which address both the result and the +eans used to achieve
it.
44
cralawred
The Vau'han case also held that one could still be an independent contractor
althou,h the hirer reserved certain supervision to insure the attain+ent of the
desired result.The hirer, however, +ust not deprive the one hired fro+ perfor+in,
his services accordin, to his own initiative.
45
cralawred
Lastl(, (O)GA insists that the e>clusivit% clause in the A,ree+ent is the +ost
e>tre+e for+ of control which A:(&C:) e>ercised over hi+.
This ar,u+ent is futile.:ein, an e>clusive talent does not b% itself +ean that (O)GA
is an e+plo%ee of A:(&C:). Bven an independent contractor can validl% provide his
services e>clusivel% to the hirin, part%. 4n the broast industr%, e>clusivit% is not
necessaril% the sa+e as control.
The hirin, of e>clusive talents is a widespread and accepted practice in the
entertain+ent industr%.
42
This practice is not desi,ned to control the +eans and
+ethods of work of the talent, but si+pl% to protect the invest+ent of the broast
station.The broast station nor+all% spends substantial a+ounts of +one%, ti+e and
effort in buildin, up its talents as well as the pro,ra+s the% appear in and thus
e>pects that said talents re+ain e>clusive with the station for a co++ensurate
period of ti+e.
4$
)or+all%, a +uch hi,her fee is paid to talents who a,ree to work
e>clusivel% for a particular radio or television station.4n short, the hu,e talent fees
partiall% co+pensates for e>clusivit%, as in the present case.
./.DC as Agent of S0N1A
(O)GA protests the .abor Arbiters findin, that he is a talent of 636DC, which
contracted out his services to A:(&C:). The .abor Arbiter ruled that as a talent of
636DC, (O)GA is not an e+plo%ee of A:(&C:).(O)GA insists that 636DC is a
labor&onl% contractor and A:(&C:) is his e+plo%er.
4n a labor&onl% contract, there are three parties involved@/#0 the labor&onl%
contractor7 /0 the e+plo%ee who is ostensibl% under the e+plo% of the labor&onl%
contractor7 and /10 the principal who is dee+ed the real e+plo%er.Ender this
sche+e, t;. 4%719*1&48 01&t9%0t19 5s t;. %g.&t 1: t;. 395&053%4.The law +akes
the principal responsible to the e+plo%ees of the labor&onl% contractor as if the
principal itself directl% hired or e+plo%ed the e+plo%ees.
4*
These circu+stances are
not present in this case.
There are essentiall% onl% two parties involved under the A,ree+ent, na+el%,
(O)GA and A:(&C:). 636DC +erel% acted as (O)GAs a,ent.The A,ree+ent
e>pressl% states that 636DC acted as the A'B)T of (O)GA. The records do not
show that 636DC acted as A:(&C:)s a,ent.636DC, which stands for 6el and 3a%
6ana,e+ent and Develop+ent Corporation, is a corporation or,ani<ed and owned
b% (O)GA and T4A)'CO.The President and 'eneral 6ana,er of 636DC is (O)GA
hi+self.4t is absurd to hold that 636DC, which is owned, controlled, headed and
+ana,ed b% (O)GA, acted as a,ent of A:(&C:) in enterin, into the A,ree+ent
with (O)GA, who hi+self is represented b% 636DC.That would +ake 636DC the
a,ent of both A:(&C:) and (O)GA.
As (O)GA ad+its, 636DC is a +ana,e+ent co+pan% devoted .A04us5>.48 to
+ana,in, the careers of (O)GA and his broast partner, T4A)'CO.636DC is not
en,a,ed in an% other business, not even =ob contractin,.636DC does not have an%
other function apart fro+ actin, as a,ent of (O)GA or T4A)'CO to pro+ote their
careers in the broast and television industr%.
4!
cralawred
Poli#( %nstru#tion No. 23
(O)GA ar,ues that Polic% 4nstruction )o. 4" issued b% then 6inister of .abor :las
Ople on * 3anuar% #!$! finall% settled the status of workers in the broast
industr%.Ender this polic%, the t%pes of e+plo%ees in the broast industr% are the
station and pro,ra+ e+plo%ees.
Polic% 4nstruction )o. 4" is a +ere e>ecutive issuance which does not have the force
and effect of law.There is no le,al presu+ption that Polic% 4nstruction )o. 4"
deter+ines (O)GAs status.A +ere e>ecutive issuance cannot e>clude independent
contractors fro+ the class of service providers to the broast industr%.The
classification of workers in the broast industr% into onl% two ,roups under Polic%
4nstruction )o. 4" is not bindin, on this Court, especiall% when the classification has
no basis either in law or in fact.
Affidavits of A*S-C*Ns +itnesses
(O)GA also faults the .abor Arbiter for ad+ittin, the affidavits of (ocorro Didanes
and Rolando Cru< without ,ivin, his counsel the opportunit% to cross&e>a+ine these
witnesses.(O)GA brands these witnesses as inco+petent to attest on the prevailin,
practice in the radio and television industr%.(O)GA views the affidavits of these
witnesses as +isleadin, and irrelevant.
Ahile (O)GA failed to cross&e>a+ine A:(&C:)s witnesses, he was never prevented
fro+ den%in, or refutin, the alle,ations in the affidavits.The .abor Arbiter has the
discretion whether to conduct a for+al /trial&t%pe0 hearin, after the sub+ission of
the position papers of the parties, thus@chanroblesvirtua#awlibrar%
(ection 1.(ub+ission of Position PapersC6e+orandu+
> > >
These verified position papers shall cover onl% those clai+s and causes of action
raised in the co+plaint e>cludin, those that +a% have been a+icabl% settled, and
shall be acco+panied b% all supportin, docu+ents includin, the affidavits of their
respective witnesses which shall take the place of the latters direct testi+on%.> > >
(ection 4.Deter+ination of )ecessit% of 9earin,. 4++ediatel% after the sub+ission
of the parties of their position papersC+e+orandu+, the .abor Arbiter shall +otu
propio deter+ine whether there is need for a for+al trial or hearin,.At this sta,e,
he +a%, at his discretion and for the purpose of +akin, such deter+ination, ask
clarificator% 8uestions to further elicit facts or infor+ation, includin, but not li+ited
to the subpoena of relevant docu+entar% evidence, if an% fro+ an% part% or
witness.
5"
cralawred
The .abor Arbiter can decide a case based solel% on the position papers and the
supportin, docu+ents without a for+al trial.
5#
The holdin, of a for+al hearin, or
trial is so+ethin, that the parties cannot de+and as a +atter of ri,ht.
5
4f the .abor
Arbiter is confident that he can rel% on the docu+ents before hi+, he cannot be
faulted for not conductin, a for+al trial, unless under the particular circu+stances
of the case, the docu+ents alone are insufficient.The proceedin,s before a .abor
Arbiter are non&liti,ious in nature.(ub=ect to the re8uire+ents of due process, the
technicalities of law and the rules obtainin, in the courts of law do not strictl% appl%
in proceedin,s before a .abor Arbiter.
"alents as %ndependent Contra#tors
A:(&C:) clai+s that there e>ists a prevailin, practice in the broast and
entertain+ent industries to treat talents like (O)GA as independent contractors.
(O)GA ar,ues that if such practice e>ists, it is void for violatin, the ri,ht of labor to
securit% of tenure.
The ri,ht of labor to securit% of tenure as ,uaranteed in the Constitution
51
arises
onl% if there is an e+plo%er&e+plo%ee relationship under labor laws.)ot ever%
perfor+ance of services for a fee creates an e+plo%er&e+plo%ee relationship.To hold
that ever% person who renders services to another for a fee is an e+plo%ee & to ,ive
+eanin, to the securit% of tenure clause & will lead to absurd results.
4ndividuals with special skills, e>pertise or talent en=o% the freedo+ to offer their
services as independent contractors.The ri,ht to life and livelihood ,uarantees this
freedo+ to contract as independent contractors.The ri,ht of labor to securit% of
tenure cannot operate to deprive an individual, possessed with special skills,
e>pertise and talent, of his ri,ht to contract as an independent contractor.An
individual like an artist or talent has a ri,ht to render his services without an% one
controllin, the +eans and +ethods b% which he perfor+s his art or craft.This Court
will not interpret the ri,ht of labor to securit% of tenure to co+pel artists and talents
to render their services onl% as e+plo%ees.4f radio and television pro,ra+ hosts can
render their services onl% as e+plo%ees, the station owners and +ana,ers can
dictate to the radio and television hosts what the% sa% in their shows.This is not
conducive to freedo+ of the press.
Different "a4 "reatment of "alents and *roasters
The )ational 4nternal Revenue Code/)4RC0
54
in relation to Republic Act )o.
$$#2,
55
as a+ended b% Republic Act )o. *4#,
52
treats talents, television and radio
broasters differentl%. Ender the )4RC, these professionals are sub=ect to the #";
value&added ta> /DAT0 on services the% render.B>e+pted fro+ the DAT are those
under an e+plo%er&e+plo%ee relationship.
5$
This different ta> treat+ent accorded to
talents and broasters bolters our conclusion that the% are independent contractors,
provided all the basic ele+ents of a contractual relationship are present as in this
case.
Nature of S0N1As Claims
(O)GA seeks the recover% of alle,edl% unpaid talent fees, #1
th
+onth pa%,
separation pa%, service incentive leave, si,nin, bonus, travel allowance, and
a+ounts due under the B+plo%ee (tock Option Plan. Ae a,ree with the findin,s of
the .abor Arbiter and the Court of Appeals that (O)GAs clai+s are %44 7%s.' 1&
t;. M%8 1BB/ Ag9..2.&t %&' st10< 13t51& 34%&, %&' &1t 1& t;. L%719
C1'.. Clearl%, the present case does not call for an application of the .abor Code
provisions but an interpretation and i+ple+entation of the 6a% #!!4 A,ree+ent. 4n
effect, (O)GAs cause of action is for breach of contract which is intrinsicall% a civil
dispute co,ni<able b% the re,ular courts.
5*
cralawred
+"EREFORE, we DB)F the petition.The assailed Decision of the Court of Appeals
dated 2 6arch #!!! in CA&'.R. (P )o. 4!#!" is A--4R6BD.Costs a,ainst petitioner.
SO OR#ERE#.
[G.R. N1. 1B2,,8 : F.79u%98 1,, 2012]
BITO) -A=IER C#ANILO !. -A=IERD, !ETITIONER, =S. FL) ACE
COR!ORATIONE FLOR#EL)N CASTILLO, RES!ON#ENTS.
# E C I S I O N
MEN#O$A, J.:
This is a petition under Rule 45 of the Rules of Civil Procedure assailin, the 6arch
#*, "#" Decision
J#K
of the Court of Appeals /CA0 and its 3une $, "#" Resolution,
JK
in CA&'.R. (P )o. #"!!$5, which reversed the 6a% *, ""! Decision
J1K
of the
)ational .abor Relations Co++ission /NLRC0 in the case entitled *ito( /avier v. l(
A#e5lordel(n Castillo,
J4K
holdin, that petitioner :ito% 3avier //avier0 was ille,all%
dis+issed fro+ e+plo%+ent and orderin, -l% Ace Corporation /-l% Ace0 to pa%
backwa,es and separation pa% in lieu of reinstate+ent.cralaw
A&t.0.'.&t F%0ts
On 6a% 1, ""*, 3avier filed a co+plaint before the ).RC for underpa%+ent of
salaries and other labor standard benefits. 9e alle,ed that he was an e+plo%ee of
-l% Ace since (epte+ber ""$, perfor+in, various tasks at the respondentMs
warehouse such as cleanin, and arran,in, the canned ite+s before their deliver% to
certain locations, e>cept in instances when he would be ordered to acco+pan% the
co+pan%Ms deliver% vehicles, as pa'inante7 that he reported for work fro+ 6onda%
to (aturda% fro+ $@"" oMclock in the +ornin, to 5@"" oMclock in the afternoon7 that
durin, his e+plo%+ent, he was not issued an identification card and pa%slips b% the
co+pan%7 that on 6a% 2, ""*, he reported for work but he was no lon,er allowed
to enter the co+pan% pre+ises b% the securit% ,uard upon the instruction of Ruben
On, /.r. 0ng0, his superior7
J5K
that after several +inutes of be,,in, to the ,uard to
allow hi+ to enter, he saw On, who+ he approached and asked wh% he was bein,
barred fro+ enterin, the pre+ises7 that On, replied b% sa%in,, N"anungin mo ana6
mo7O
J2K
that he then went ho+e and discussed the +atter with his fa+il%7 that he
discovered that On, had been courtin, his dau,hter Annal%n after the two +et at a
fiesta celebration in 6alabon Cit%7 that Annal%n tried to talk to On, and convince
hi+ to spare her father fro+ trouble but he refused to accede7 that thereafter,
3avier was ter+inated fro+ his e+plo%+ent without notice7 and that he was
neither ,iven the opportunit% to refute the causeCs of his dis+issal fro+ work.
To support his alle,ations, 3avier presented an affidavit of one :en,ie Dalen<uela
who alle,ed that 3avier was a stevedore or pa'inante of -l% Ace fro+ (epte+ber
""$ to 3anuar% ""*. The said affidavit was subscribed before the .abor Arbiter
/LA0.
J$K
-or its part, -l% Ace averred that it was en,a,ed in the business of i+portation and
sales of ,roceries. (o+eti+e in Dece+ber ""$, 3avier was contracted b% its
e+plo%ee, 6r. On,, as e>tra helper on a pa6(a, basis at an a,reed rate of P1"".""
per trip, which was later increased to P15."" in 3anuar% ""*. 6r. On, contracted
3avier rou,hl% 5 to 2 ti+es onl% in a +onth whenever the vehicle of its contracted
hauler, 6il+ar 9aulin, (ervices, was not available. On April 1", ""*, -l% Ace no
lon,er needed the services of 3avier. Den%in, that he was their e+plo%ee, -l% Ace
insisted that there was no ille,al dis+issal.
J*K
-l% Ace sub+itted a cop% of its
a,ree+ent with 6il+ar 9aulin, (ervices and copies of acknowled,+ent receipts
evidencin, pa%+ent to 3avier for his contracted services bearin, the words, Ndail%
+anpower /pa6(a,5pie#e rate pa(0O and the latterMs si,naturesCinitials.
Ru45&g 1: t;. L%719 A975t.9
On )ove+ber *, ""*, the .A dis+issed the co+plaint for lack of +erit on the
,round that 3avier failed to present proof that he was a re,ular e+plo%ee of -l%
Ace. 9e wrote@
Co+plainant has no e+plo%ee 4D showin, his e+plo%+ent with the Respondent nor
an% docu+ent showin, that he received the benefits accorded to re,ular e+plo%ees
of the Respondents. 9is contention that Respondent failed to ,ive hi+ said 4D and
pa%slips i+plies that indeed he was not a re,ular e+plo%ee of -l% Ace considerin,
that co+plainant was a helper and that Respondent co+pan% has contracted a
re,ular truckin, for the deliver% of its products.
Respondent -l% Ace is not en,a,ed in truckin, business but in the i+portation and
sales of ,roceries. (ince there is a re,ular hauler to deliver its products, we ,ive
credence to RespondentsM clai+ that co+plainant was contracted on NpakiaoO basis.
As to the clai+ for underpa%+ent of salaries, the pa%roll presented b% the
Respondents showin, salaries of workers on NpakiaoO basis has evidentiar% wei,ht
because althou,h the si,nature of the co+plainant appearin, thereon are not
unifor+, the% appeared to be his true si,nature.
> > > >
9ence, as co+plainant received the ri,htful salar% as shown b% the above described
pa%rolls, Respondents are not liable for salar% differentials.
J!K
Ru45&g 1: t;. NLRC
On appeal with the ).RC, 3avier was favored. 4t ruled that the .A skirted the
ar,u+ent of 3avier and i++ediatel% concluded that he was not a re,ular e+plo%ee
si+pl% because he failed to present proof. 4t was of the view that a pa6(a,&basis
arran,e+ent did not preclude the e>istence of e+plo%er&e+plo%ee relationship.
NPa%+ent b% result > > > is a +ethod of co+pensation and does not define the
essence of the relation. 4t is a +ere +ethod of co+putin, co+pensation, not a basis
for deter+inin, the e>istence or absence of an e+plo%er&e+plo%ee relationship.
J#"K
O
The ).RC further averred that it did not follow that a worker was a =ob contractor
and not an e+plo%ee, =ust because the work he was doin, was not directl% related
to the e+plo%erMs trade or business or the work +a% be considered as Ne>traO helper
as in this case7 and that the relationship of an e+plo%er and an e+plo%ee was
deter+ined b% law and the sa+e would prevail whatever the parties +a% call it. 4n
this case, the ).RC held that substantial evidence was sufficient basis for =ud,+ent
on the e>istence of the e+plo%er&e+plo%ee relationship. 3avier was a re,ular
e+plo%ee of -l% Ace because there was reasonable connection between the
particular activit% perfor+ed b% the e+plo%ee /as a 7pa'inante80 in relation to the
usual business or trade of the e+plo%er /i+portation, sales and deliver% of
,roceries0. 9e +a% not be considered as an independent contractor because he
could not e>ercise an% =ud,+ent in the deliver% of co+pan% products. 9e was onl%
en,a,ed as a Nhelper.O
-indin, 3avier to be a re,ular e+plo%ee, the ).RC ruled that he was entitled to a
securit% of tenure. -or failin, to present proof of a valid cause for his ter+ination,
-l% Ace was found to be liable for ille,al dis+issal of 3avier who was likewise entitled
to backwa,es and separation pa% in lieu of reinstate+ent. The ).RC thus ordered@
+"EREFORE, pre+ises considered, co+plainantMs appeal is partiall% 'RA)TBD. The
assailed Decision of the labor arbiter is DACATBD and a new one is hereb% entered
holdin, respondent -.F ACB CORPORAT4O) ,uilt% of ille,al dis+issal and non&
pa%+ent of #1th +onth pa%. Conse8uentl%, it is hereb% ordered to pa% co+plainant
DA)4.O N:ito%O 3AD4BR the followin,@
#. :ackwa,es &P45,$$".*1
. (eparation pa%, in lieu of reinstate+ent & *,45".""
3. Enpaid #1th +onth pa% /proportionate0 & 5,211.11
TOTA. & P5!,*54.#2
All other clai+s are dis+issed for lack of +erit.
SO OR#ERE#.
J##K
Ru45&g 1: t;. C1u9t 1: A33.%4s
On 6arch #*, "#", the CA annulled the ).RC findin,s that 3avier was indeed a
for+er e+plo%ee of -l% Ace and reinstated the dis+issal of 3avierMs co+plaint as
ordered b% the .A. The CA e>ercised its authorit% to +ake its own factual
deter+ination anent the issue of the e>istence of an e+plo%er&e+plo%ee
relationship between the parties. Accordin, to the CA@
> > >
4n an ille,al dis+issal case the onus probandi rests on the e+plo%er to prove that
its dis+issal was for a valid cause. 9owever, before a case for ille,al dis+issal can
prosper, an e+plo%er&e+plo%ee relationship +ust first be established. > > > it is
incu+bent upon private respondent to prove the e+plo%ee&e+plo%er relationship b%
substantial evidence.
> > >
4t is incu+bent upon private respondent to prove, b% substantial evidence, that he
is an e+plo%ee of petitioners, but he failed to dischar,e his burden. The non&
issuance of a co+pan%&issued identification card to private respondent supports
petitionersM contention that private respondent was not its e+plo%ee.
J#K
The CA likewise added that 3avierMs failure to present salar% vouchers, pa%slips, or
other pieces of evidence to bolster his contention, pointed to the inescapable
conclusion that he was not an e+plo%ee of -l% Ace. -urther, it found that 3avierMs
work was not necessar% and desirable to the business or trade of the co+pan%, as it
was onl% when there were scheduled deliveries, which a re,ular haulin, service
could not deliver, that -l% Ace would contract the services of 3avier as an e>tra
helper. .astl%, the CA declared that the facts alle,ed b% 3avier did not pass the
Ncontrol test.O
9e contracted work outside the co+pan% pre+ises7 he was not re8uired to observe
definite hours of work7 he was not re8uired to report dail%7 and he was free to
accept other work elsewhere as there was no e>clusivit% of his contracted service to
the co+pan%, the sa+e bein, co&ter+inous with the trip onl%.
J#1K
(ince no
substantial evidence was presented to establish an e+plo%er&e+plo%ee relationship,
the case for ille,al dis+issal could not prosper.
The petitioners +oved for reconsideration, but to no avail.
9ence, this appeal anchored on the followin, ,rounds@
I.
+"ET"ER T"E "ONORABLE CO(RT OF A!!EALS ERRE# IN "OL#ING T"AT
T"E !ETITIONER +AS NOT A REG(LAR EM!LO)EE OF FL) ACE.
II.
+"ET"ER T"E "ONORABLE CO(RT OF A!!EALS ERRE# IN "OL#ING T"AT
T"E !ETITIONER IS NOT ENTITLE# TO "IS MONETAR) CLAIMS.
J#4K
The petitioner contends that other than its bare alle,ations and self&servin,
affidavits of the other e+plo%ees, -l% Ace has nothin, to substantiate its clai+ that
3avier was en,a,ed on apa6(a, basis. Assu+in, that 3avier was indeed hired on
a pa6(a, basis, it does not preclude his re,ular e+plo%+ent with the co+pan%.
Bven the acknowled,+ent receipts bearin, his si,nature and the confir+in, receipt
of his salaries will not show the true nature of his e+plo%+ent as the% do not reflect
the necessar% details of the co++issioned task. :esides, 3avierMs tasks
as pa'inante are related, necessar% and desirable to the line of business b% -l% Ace
which is en,a,ed in the i+portation and sale of ,rocer% ite+s. NOn da%s when there
were no scheduled deliveries, he worked in petitionersM warehouse, arran,in, and
cleanin, the stored cans for deliver% to clients.O
J#5K
6ore i+portantl%, 3avier was
sub=ect to the control and supervision of the co+pan%, as he was +ade to report to
the office fro+ 6onda% to (aturda%, fro+ $@"" oMclock in the +ornin, until 5@""
oMclock in the afternoon. The list of deliverable ,oods, to,ether with the
correspondin, clients and their respective purchases and addresses, would
necessaril% have been prepared b% -l% Ace. Clearl%, he was sub=ected to co+pliance
with co+pan% rules and re,ulations as re,ards workin, hours, deliver% schedule and
output, and his other duties in the warehouse.
J#2K
The petitioner chiefl% relied on C'ave9 v. NLRC$
J#$K
where the Court ruled that
pa%+ent to a worker on a per trip basis is not si,nificant because Nthis is +erel% a
+ethod of co+putin, co+pensation and not a basis for deter+inin, the e>istence of
e+plo%er&e+plo%ee relationship.O 3avier likewise invokes the rule that, Nin
controversies between a laborer and his +aster, > > > doubts reasonabl% arisin,
fro+ the evidence should be resolved in the for+erMs favour. The polic% is reflected
is no less than the Constitution, .abor Code and Civil Code.O
J#*K
Clai+in, to be an e+plo%ee of -l% Ace, petitioner asserts that he was ille,all%
dis+issed b% the latterMs failure to observe substantive and procedural due process.
(ince his dis+issal was not based on an% of the causes reco,ni<ed b% law, and was
i+ple+ented without notice, 3avier is entitled to separation pa% and backwa,es.
4n its Co++ent,
J#!K
-l% Ace insists that there was no substantial evidence to prove
e+plo%er&e+plo%ee relationship. 9avin, a service contract with 6il+ar 9aulin,
(ervices for the purpose of transportin, and deliverin, co+pan% products to
custo+ers, -l% Ace contracted 3avier as an e>tra helper or pa'inante on a +ere Nper
trip basis.O 3avier, who was actuall% a loiterer in the area, onl% acco+panied and
assisted the co+pan% driver when 6il+ar could not deliver or when the e>i,enc% of
e>tra deliveries arises for rou,hl% five to si> ti+es a +onth. :efore +akin, a
deliver%, -l% Ace would turn over to the driver and 3avier the deliver% vehicle with its
loaded co+pan% products. Aith the vehicle and products in their custod%, the driver
and 3avier Nwould leave the co+pan% pre+ises usin, their own +eans, +ethod,
best =ud,+ent and discretion on how to deliver, ti+e to deliver, where and JwhenK
to start, and +anner of deliverin, the products.O
J"K
-l% Ace dis+isses 3avierMs clai+s of e+plo%+ent as baseless assertions. Aside fro+
his bare alle,ations, he presented nothin, to substantiate his status as an
e+plo%ee. N4t is a basic rule of evidence that each part% +ust prove his affir+ative
alle,ation. 4f he clai+s a ri,ht ,ranted b% law, he +ust prove his clai+ b%
co+petent evidence, rel%in, on the stren,th of his own evidence and not upon the
weakness of his opponent.O
J#K
4nvokin, the case of Lope9 v. *odega Cit(,
JK
-l% Ace
insists that in an ille,al dis+issal case, the burden of proof is upon the co+plainant
who clai+s to be an e+plo%ee. 4t is essential that an e+plo%er&e+plo%ee
relationship be proved b% substantial evidence. Thus, it cites@
4n an ille,al dis+issal case, the onus probandi rests on the e+plo%er to prove that
its dis+issal of an e+plo%ee was for a valid cause. 9owever, before a case for ille,al
dis+issal can prosper, an e+plo%er&e+plo%ee relationship +ust first be established.
-l% Ace points out that 3avier +erel% offers factual assertions that he was an
e+plo%ee of -l% Ace, Nwhich are unfortunatel% not supported b% proof, docu+entar%
or otherwise.O
J1K
3avier si+pl% assu+ed that he was an e+plo%ee of -l% Ace, absent
an% co+petent or relevant evidence to support it. N9e perfor+ed his contracted
work outside the pre+ises of the respondent7 he was not even re8uired to report to
work at re,ular hours7 he was not +ade to re,ister his ti+e in and ti+e out ever%
ti+e he was contracted to work7 he was not sub=ected to an% disciplinar% sanction
i+posed to other e+plo%ees for co+pan% violations7 he was not issued a co+pan%
4.D.7 he was not accorded the sa+e benefits ,iven to other e+plo%ees7 he was not
re,istered with the (ocial (ecurit% (%ste+ /SSS0 as petitionerMs e+plo%ee7 and, he
was free to leave, accept and en,a,e in other +eans of livelihood as there is no
e>clusivit% of his contracted services with the petitioner, his services bein, co&
ter+inus with the trip onl%. All these lead to the conclusion that petitioner is not an
e+plo%ee of the respondents.O
J4K
6oreover, -l% Ace clai+s that it had Nno ri,ht to control the result, +eans, +anner
and +ethods b% which 3avier would perfor+ his work or b% which the sa+e is to be
acco+plished.O
J5K
4n other words, 3avier and the co+pan% driver were ,iven a free
hand as to how the% would perfor+ their contracted services and neither were the%
sub=ected to definite hours or condition of work.
-l% Ace likewise clai+s that 3avierMs function as a pa'inante was not directl% related
or necessar% to its principal business of i+portation and sales of ,roceries. Bven
without 3avier, the business could operate its usual course as it did not involve the
business of inland transportation. .astl%, the acknowled,+ent receipts bearin,
3avierMs si,nature and words Npa6iao rate,O referrin, to his earned salaries on a per
trip basis, have evidentiar% wei,ht that the .A correctl% considered in arrivin, at the
conclusion that 3avier was not an e+plo%ee of the co+pan%.
The Court affir+s the assailed CA decision.
4t +ust be noted that the issue of 3avierMs alle,ed ille,al dis+issal is anchored on
the e>istence of an e+plo%er&e+plo%ee relationship between hi+ and -l% Ace. This
is essentiall% a 8uestion of fact. 'enerall%, the Court does not review errors that
raise factual 8uestions. 9owever, when there is conflict a+on, the factual findin,s
of the antecedent decidin, bodies like the .A, the ).RC and the CA, Nit is proper, in
the e>ercise of Our e8uit% =urisdiction, to review and re&evaluate the factual issues
and to look into the records of the case and re&e>a+ine the 8uestioned findin,s.O
J2K
4n dealin, with factual issues in labor cases, Nsubstantial evidence Q that a+ount of
relevant evidence which a reasonable +ind +i,ht accept as ade8uate to =ustif% a
conclusion Q is sufficient.O
J$K
As the records bear out, the .A and the CA found 3avierMs clai+ of e+plo%+ent with
-l% Ace as wantin, and deficient. The Court is constrained to a,ree. Althou,h
(ection #", Rule D44 of the )ew Rules of Procedure of the ).RC
J*K
allows a
rela>ation of the rules of procedure and evidence in labor cases, this rule of
liberalit% does not +ean a co+plete dispensation of proof. .abor officials are
en=oined to use reasonable +eans to ascertain the facts speedil% and ob=ectivel%
with little re,ard to technicalities or for+alities but nowhere in the rules are the%
provided a license to co+pletel% discount evidence, or the lack of it. The 8uantu+ of
proof re8uired, however, +ust still be satisfied. 9ence, Nwhen confronted with
conflictin, versions on factual +atters, it is for the+ in the e>ercise of discretion to
deter+ine which part% deserves credence on the basis of evidence received, sub=ect
onl% to the re8uire+ent that their decision +ust be supported b% substantial
evidence.O
J!K
Accordin,l%, the petitioner needs to show b% substantial evidence that
he was indeed an e+plo%ee of the co+pan% a,ainst which he clai+s ille,al
dis+issal.
B>pectedl%, opposin, parties would stand poles apart and proffer alle,ations as
different as chalk and cheese. 4t is, therefore, incu+bent upon the Court to
deter+ine whether the part% on who+ the burden to prove lies was able to hurdle
the sa+e. N)o particular for+ of evidence is re8uired to prove the e>istence of such
e+plo%er&e+plo%ee relationship. An% co+petent and relevant evidence to prove the
relationship +a% be ad+itted. 9ence, while no particular for+ of evidence is
re8uired, a findin, that such relationship e>ists +ust still rest on so+e substantial
evidence. 6oreover, the substantialit% of the evidence depends on its 8uantitative as
well as its :ualitativeaspects.O
J1"K
Althou,h substantial evidence is not a function of
8uantit% but rather of 8ualit%, the > > > circu+stances of the instant case de+and
that so+ethin, +ore should have been proffered. 9ad there been other proofs of
e+plo%+ent, such as > > > inclusion in petitionerMs pa%roll, or a clear e>ercise of
control, the Court would have affir+ed the findin, of e+plo%er&e+plo%ee
relationship.O
J1#K
4n su+, the rule of thu+b re+ains@ the onus probandi falls on petitioner to establish
or substantiate such clai+ b% the re8uisite 8uantu+ of evidence.
J1K
NAhoever
clai+s entitle+ent to the benefits provided b% law should establish his or her ri,ht
thereto > > >.O
J11K
(adl%, 3avier failed to adduce substantial evidence as basis for the
,rant of relief.
4n this case, the .A and the CA both concluded that 3avier failed to establish his
e+plo%+ent with -l% Ace. :% wa% of evidence on this point, all that 3avier presented
were his self&servin, state+ents purportedl% showin, his activities as an e+plo%ee
of -l% Ace. Clearl%, 3avier failed to pass the substantialit% re8uire+ent to support
his clai+. 9ence, the Court sees no reason to depart fro+ the findin,s of the CA.
Ahile 3avier re+ains fir+ in his position that as an e+plo%ed stevedore of -l% Ace,
he was +ade to work in the co+pan% pre+ises durin, weekda%s arran,in, and
cleanin, ,rocer% ite+s for deliver% to clients, no other proof was sub+itted to fortif%
his clai+. The lone affidavit e>ecuted b% one :en,ie Dalen<uela was unsuccessful in
stren,thenin, 3avierMs cause. 4n said docu+ent, all Dalen<uela attested to was that
he would fre8uentl% see 3avier at the workplace where the latter was also hired as
stevedore.
J14K
Certainl%, in ,au,in, the evidence presented b% 3avier, the Court
cannot i,nore the inescapable conclusion that his +ere presence at the workplace
falls short in provin, e+plo%+ent therein. The supportin, affidavit could have, to an
e>tent, bolstered 3avierMs clai+ of bein, tasked to clean ,rocer% ite+s when there
were no scheduled deliver% trips, but no infor+ation was offered in this sub=ect
si+pl% because the witness had no personal knowled,e of 3avierMs e+plo%+ent
status in the co+pan%. Deril%, the Court cannot accept 3avierMs state+ents, hook,
line and sinker.
The Court is of the considerable view that on 3avier lies the burden to pass the well&
settled tests to deter+ine the e>istence of an e+plo%er&e+plo%ee relationship, vi9@
/#0 the selection and en,a,e+ent of the e+plo%ee7 /0 the pa%+ent of wa,es7 /10
the power of dis+issal7 and /40 the power to control the e+plo%eeMs conduct. Of
these ele+ents, the +ost i+portant criterion is whether the e+plo%er controls or
has reserved the ri,ht to control the e+plo%ee not onl% as to the result of the work
but also as to the +eans and +ethods b% which the result is to be acco+plished.
J15K
4n this case, 3avier was not able to persuade the Court that the above ele+ents
e>ist in his case. 9e could not sub+it co+petent proof that -l% Ace en,a,ed his
services as a re,ular e+plo%ee7 that -l% Ace paid his wa,es as an e+plo%ee, or that
-l% Ace could dictate what his conduct should be while at work. 4n other words,
3avierMs alle,ations did not establish that his relationship with -l% Ace had the
attributes of an e+plo%er&e+plo%ee relationship on the basis of the above&
+entioned four&fold test. Aorse, 3avier was not able to refute -l% AceMs assertion
that it had an a,ree+ent with a haulin, co+pan% to undertake the deliver% of its
,oods. 4t was also bafflin, to reali<e that 3avier did not dispute -l% AceMs denial of
his servicesM e>clusivit% to the co+pan%. 4n short, all that 3avier laid down were bare
alle,ations without corroborative proof.
-l% Ace does not dispute havin, contracted 3avier and paid hi+ on a Nper tripO rate
as a stevedore, albeit on a pa6(a, basis. The Court cannot fail to note that -l% Ace
presented docu+entar% proof that 3avier was indeed paid on a pa6(a, basis per the
acknowled,+ent receipts ad+itted as co+petent evidence b% the .A. Enfortunatel%
for 3avier, his +ere denial of the si,natures affi>ed therein cannot auto+aticall%
swa% us to i,nore the docu+ents because Nfor,er% cannot be presu+ed and +ust
be proved b% clear, positive and convincin, evidence and the burden of proof lies on
the part% alle,in, for,er%.O
J12K
Considerin, the above findin,s, the Court does not see the necessit% to resolve the
second issue presented.
One final note. The CourtMs decision does not contradict the settled rule that
Npa%+ent b% the piece is =ust a +ethod of co+pensation and does not define the
essence of the relation.O
J1$K
Pa%+ent on a piece&rate basis does not ne,ate re,ular
e+plo%+ent. NThe ter+ Rwa,eM is broadl% defined in Article !$ of the .abor Code as
re+uneration or earnin,s, capable of bein, e>pressed in ter+s of +one% whether
fi>ed or ascertained on a ti+e, task, piece or co++ission basis. Pa%+ent b% the
piece is =ust a +ethod of co+pensation and does not define the essence of the
relations. )or does the fact that the petitioner is not covered b% the ((( affect the
e+plo%er&e+plo%ee relationship. 9owever, in deter+inin, whether the relationship
is that of e+plo%er and e+plo%ee or one of an independent contractor, each case
+ust be deter+ined on its own facts and all the features of the relationship are to
be considered.O
J1*K
Enfortunatel% for 3avier, the attendant facts and circu+stances of
the instant case do not provide the Court with sufficient reason to uphold his
clai+ed status as e+plo%ee of -l% Ace.
Ahile the Constitution is co++itted to the polic% of social =ustice and the protection
of the workin, class, it should not be supposed that ever% labor dispute will be
auto+aticall% decided in favor of labor. 6ana,e+ent also has its ri,hts which are
entitled to respect and enforce+ent in the interest of si+ple fair pla%. Out of its
concern for the less privile,ed in life, the Court has inclined, +ore often than not,
toward the worker and upheld his cause in his conflicts with the e+plo%er. (uch
favoritis+, however, has not blinded the Court to the rule that =ustice is in ever%
case for the deservin,, to be dispensed in the li,ht of the established facts and the
applicable law and doctrine.
J1!K
cralaw
+"EREFORE, the petition is #ENIE#. The 6arch #*, "#" Decision of the Court of
Appeals and its 3une $, "#" Resolution, in CA&'.R. (P )o. #"!!$5, are
hereb% AFFIRME#.
SO OR#ERE#.
[G.R. NO. 18,2,1 : O0t17.9 2, 200B]
RA(L G. LOCSIN %&' E##IE B. TOMAF(IN, Petitioners, v. !"ILI!!INE LONG
#ISTANCE TELE!"ONE COM!AN), Respondent.
# E C I S I O N
=ELASCO, -R., J.:
The Case
This Petition for Review on Certiorari under Rule 45 seeks the reversal of the 6a% 2,
""* Decision
#
and )ove+ber 4, ""* Resolution
holdin,
that for the purpose of apportionin, responsibilit% in +edical ne,li,ence cases, an
e+plo%er&e+plo%ee relationship 5& .::.0t .A5sts between hospitals and their
attendin, and visitin, ph%sicians7 se#ond, P(4?s act of publicl% displa%in, in the
lobb% of the 6edical Cit% the na+es and speciali<ations of its accredited ph%sicians,
includin, Dr. A+pil, estopped it fro+ den%in, the e>istence of an e+plo%er&
e+plo%ee relationship between the+ under the '10t95&. 1: 1st.&s574. %g.&08 19
%g.&08 78 .st133.4H and t'ird, P(4?s failure to supervise Dr. A+pil and its resident
ph%sicians and nurses and to take an active step in order to re+ed% their ne,li,ence
rendered it directl% liable under the '10t95&. 1: 019319%t. &.g45g.&0..
4n its +otion for reconsideration, P(4 contends that the Court erred in findin, it
liable under Article #*" of the Civil Code, there bein, no e+plo%er&e+plo%ee
relationship between it and its consultant, Dr. A+pil. P(4 stressed that the Court?s
Decision in Ramos holdin, that San e+plo%er&e+plo%ee relationship 5& .::.0t e>ists
between hospitals and their attendin, and visitin, ph%sicians for the purpose of
apportionin, responsibilit%S had been reversed in a subse8uent Resolution.
1
-urther,
P(4 ar,ues that t;. '10t95&. 1: 1st.&s574. %g.&08 19 %g.&08 78
.st133.4 cannot appl% because spouses A,ana failed to establish one re8uisite of
the doctrine, i.e., that )atividad relied on the representation of the hospital in
en,a,in, the services of Dr. A+pil. And lastl%, P(4 +aintains that the '10t95&. 1:
019319%t. &.g45g.&0. is +isplaced because the pro>i+ate cause of )atividad?s
in=ur% was Dr. A+pil?s ne,li,ence.
The +otion lacks +erit.
As earlier +entioned, the -irst Division, in its assailed Decision, ruled that an
e+plo%er&e+plo%ee relationship I5& .::.0tI e>ists between the 6edical Cit% and Dr.
A+pil. Conse8uentl%, both are =ointl% and severall% liable to the A,anas. This rulin,
proceeds fro+ the followin, ratiocination in Ramos@
Ae now discuss the responsibilit% of the hospital in this particular incident. The
uni8ue practice /a+on, private hospitals0 of fillin, up specialist staff with attendin,
and visitin, Sconsultants,S who are alle,edl% not hospital e+plo%ees, presents
proble+s in apportionin, responsibilit% for ne,li,ence in +edical +alpractice
cases."16.>.9, t;. '5::50u4t8 5s 1&48 219. %33%9.&t t;%& 9.%4.
4n the first place, ;1s35t%4s .A.905s. s5g&5:50%&t 01&t914 5& t;. ;595&g %&' :595&g
1: 01&su4t%&ts %&' 5& t;. 01&'u0t 1: t;.59 619< 65t;5& t;. ;1s35t%4
39.25s.s. Doctors who appl% for SconsultantS slots, visitin, or attendin,, are
re8uired to sub+it proof of co+pletion of residenc%, their educational 8ualifications7
,enerall%, evidence of accreditation b% the appropriate board /diplo+ate0, evidence
of fellowship in +ost cases, and references. These re8uire+ents are carefull%
scrutini<ed b% +e+bers of the hospital ad+inistration or b% a review co++ittee set
up b% the hospital who either accept or re=ect the application. This is particularl%
true with respondent hospital.
A:t.9 % 3;8s505%& 5s %00.3t.', .5t;.9 %s % >5s5t5&g 19 %tt.&'5&g 01&su4t%&t,
;. 5s &192%448 9.@u59.' t1 %tt.&' 045&501*3%t;141g50%4 01&:.9.&0.s, 01&'u0t
7.'s5'. 91u&'s :19 04.9<s, 5&t.9&s %&' 9.s5'.&ts, 21'.9%t. g9%&' 91u&'s
%&' 3%t5.&t %u'5ts %&' 3.9:192 1t;.9 t%s<s %&' 9.s31&s57545t5.s, :19 t;.
395>54.g. 1: 7.5&g %74. t1 2%5&t%5& % 045&50 5& t;. ;1s35t%4, %&'E19 :19 t;.
395>54.g. 1: %'25tt5&g 3%t5.&ts 5&t1 t;. ;1s35t%4. 4n addition to these, t;.
3;8s505%&Js 3.9:192%&0. %s % s3.05%45st 5s g.&.9%448 .>%4u%t.' 78 % 3..9
9.>5.6 01225tt.. 1& t;. 7%s5s 1: 219t%45t8 %&' 21975'5t8 st%t5st50s, %&'
:..'7%0< :912 3%t5.&ts, &u9s.s, 5&t.9&s %&' 9.s5'.&ts. A 01&su4t%&t 9.25ss
5& ;5s 'ut5.s, 19 % 01&su4t%&t 6;1 9.gu4%948 :%44s s;19t 1: t;. 25&52u2
st%&'%9's %00.3t%74. t1 t;. ;1s35t%4 19 5ts 3..9 9.>5.6 01225tt.., 5s
&192%448 3145t.48 t.925&%t.'.
4n other words, private hospitals hire, fire and e>ercise real control over their
attendin, and visitin, SconsultantS staff. Ahile I01&su4t%&tsI %9. &1t, t.0;&50%448
.23418..s, % 315&t 6;50; 9.s31&'.&t ;1s35t%4 %ss.9ts 5& '.&85&g %44
9.s31&s57545t8 :19 t;. 3%t5.&tJs 01&'5t51&, t;. 01&t914 .A.905s.', t;. ;595&g,
%&' t;. 95g;t t1 t.925&%t. 01&su4t%&ts %44 :u4:544 t;. 52319t%&t ;%442%9<s 1:
%& .23418.9*.23418.. 9.4%t51&s;53, 65t; t;. .A0.3t51& 1: t;. 3%82.&t 1:
6%g.s. I& %ss.ss5&g 6;.t;.9 su0; % 9.4%t51&s;53 5& :%0t .A5sts, t;. 01&t914
t.st 5s '.t.925&5&g. A0019'5&g48, 1& t;. 7%s5s 1: t;. :19.g15&g, 6. 9u4. t;%t
:19 t;. 3u931s. 1: %4410%t5&g 9.s31&s57545t8 5& 2.'50%4 &.g45g.&0. 0%s.s, %&
.23418.9*.23418.. 9.4%t51&s;53 5& .::.0t .A5sts 7.t6..& ;1s35t%4s %&'
t;.59 %tt.&'5&g %&' >5s5t5&g 3;8s505%&s. This bein, the case, the 8uestion now
arises as to whether or not respondent hospital is solidaril% liable with respondent
doctors for petitioner?s condition.
The basis for holdin, an e+plo%er solidaril% responsible for the ne,li,ence of its
e+plo%ee is found in Article #*" of the Civil Code which considers a person
accountable not onl% for his own acts but also for those of others based on the
for+er?s responsibilit% under a relationship of partia ptetas.
Clearl%, in Ramos, the Court considered the peculiar relationship between a hospital
and its consultants on the bases of certain factors. One such factor is the Scontrol
testS wherein the hospital e>ercises control in the hirin, and firin, of consultants,
like Dr. A+pil, and in the conduct of their work.
Actuall%, contrar% to P(4?s contention, the Court did not reverse its rulin, in Ramos.
Ahat it clarified was that the De .os (antos 6edical Clinic did not e>ercise control
over its consultant, hence, there is no e+plo%er&e+plo%ee relationship between
the+. Thus, despite the ,rantin, of the said hospital?s +otion for reconsideration,
the doctrine in Ramos sta%s, i.e., for the purpose of allocatin, responsibilit% in
+edical ne,li,ence cases, an e+plo%er&e+plo%ee relationship e>ists between
hospitals and their consultants.
4n the instant cases, P(4 +erel% offered a g.&.9%4 '.&5%4 of responsibilit%,
+aintainin, that consultants, like Dr. A+pil, are Sindependent contractors,S not
e+plo%ees of the hospital. Bven assu+in, that Dr. A+pil is not an e+plo%ee of
6edical Cit%, but an independent contractor, still the said hospital is liable to the
A,anas.
4n Nograles$ et al. v. Capitol .edi#al Center$ et al.,
4
throu,h 6r. 3ustice Antonio T.
Carpio, the Court held@
The 8uestion now is whether C6C is auto+aticall% e>e+pt fro+ liabilit% considerin,
that Dr. Bstrada is an independent contractor&ph%sician.
4n ,eneral, a hospital is not liable for the ne,li,ence of an independent contractor&
ph%sician. There is, however, an e>ception to this principle. The hospital +a% be
liable if the ph%sician is the SostensibleS a,ent of the hospital. //ones v. P'ilpott,
$" -. (upp. ##" J#!**K0 This e>ception is also known as the Sdoctrine of apparent
authorit%.S /(o+eti+es referred to as the apparent or ostensible a,enc% theor%.
J<ing v. .it#'ell, 1# A.D.1
rd
!5*, *#! ).F. (.d #2! /""20K.
> > >
The doctrine of apparent authorit% essentiall% involves two factors to deter+ine the
liabilit% of an independent contractor&ph%sician.
The first factor focuses on the hospital?s +anifestations and is so+eti+es described
as an in8uir% whether the hospital acted in a +anner which would lead a reasonable
person to conclude that the individual who was alle,ed to be ne,li,ent was an
e+plo%ee or a,ent of the hospital. /Diggs v. Novant ;ealt'$ %n#., 2* (.B.d *5#
/""20 citin, ;(lton v. <oont9$ #1* ).C. App. 2! /"""0. I& t;5s 9.g%9', t;.
;1s35t%4 &..' &1t 2%<. .A39.ss 9.39.s.&t%t51&s t1 t;. 3%t5.&t t;%t t;.
t9.%t5&g 3;8s505%& 5s %& .23418.. 1: t;. ;1s35t%4H 9%t;.9 % 9.39.s.&t%t51&
2%8 7. g.&.9%4 %&' 52345.'. /%d.0
The doctrine of apparent authorit% is a specie of the doctrine of estoppel. Article
#41# of the Civil Code provides that SJtKhrou,h estoppel, an ad+ission or
representation is rendered conclusive upon the person +akin, it, and cannot be
denied or disproved as a,ainst the person rel%in, thereon.S Bstoppel rests on this
rule@ SAhether a part% has, b% his own declaration, act, or o+ission, intentionall%
and deliberatel% led another to believe a particular thin, true, and to act upon such
belief, he cannot, in an% liti,ation arisin, out of such declaration, act or o+ission, be
per+itted to falsif% it. /De Castro v. !inete, #1$ Phil. 451 J#!2!K, citin, (ec. 1, par.
A, Rule #1# of the Rules of Court. (ee also <ing v. .it#'ell, 1# A.D.1
rd
!5*, *#!
).F.(.d #2! J""2K0.
> > >
The second factor focuses on the patient?s reliance. 4t is so+eti+es characteri<ed as
an in8uir% on whether the plaintiff acted in reliance upon the conduct of the hospital
or its %g.&t, consistent with ordinar% care and prudence. /Diggs v. Novant ;ealt'$
%n#.0
P(4 ar,ues that the '10t95&. 1: %33%9.&t %ut;195t8 cannot appl% to these cases
because spouses A,ana failed to establish proof of their reliance on the
representation of 6edical Cit% that Dr. A+pil is its e+plo%ee.
The ar,u+ent lacks +erit.
Att%. A,ana cate,oricall% testified that one of the reasons wh% he chose Dr. A+pil
was that ;. <&.6 ;52 t1 7. % st%:: 2.27.9 1: M.'50%4 C5t8, % 39125&.&t %&'
<&16& ;1s35t%4.
I Aill %ou tell us what transpired in %our visit to Dr. A+pilPcralawred
A Aell, 4 saw Dr. A+pil at the 6edical Cit%, I <&16 ;52 t1 7. % st%:: 2.27.9
t;.9., and 4 told hi+ about the case of +% wife and he asked +e to brin, +% wife
over so she could be e>a+ined. Prior to that, 4 have known Dr. A+pil, first, he was
sta%in, in front of our house, he was a nei,hbor, second, +% dau,hter was his
student in the Eniversit% of the Bast (chool of 6edicine at Ra+on 6a,sa%sa%7 and
when +% dau,hter opted to establish a hospital or a clinic, Dr. A+pil was one of our
consultants on how to establish that hospital. And fro+ there, 4 have known that he
was a specialist when it co+es to that illness.
Att%. A,caoili
On that particular occasion, April , #!*4, what was %our reason for choosin, to
contact Dr. A+pil in connection with %our wife?s illnessPcralawred
A -irst, before that, 4 have known hi+ to be a specialist on that part of the bod% as
a sur,eon7 s.01&', I ;%>. <&16& ;52 t1 7. % st%:: 2.27.9 1: t;. M.'50%4
C5t8 6;50; 5s % 39125&.&t %&' <&16& ;1s35t%4. And third, because he is a
nei,hbor, 4 e>pect +ore than the usual +edical service to be ,iven to us, than his
ordinar% patients.
5
Clearl%, P(4 is estopped fro+ passin, the bla+e solel% to Dr. A+pil. 4ts act of
displa%in, his na+e and those of the other ph%sicians in the public director% at the
lobb% of the hospital a+ounts to holdin, out to the public that it offers 8ualit%
+edical service throu,h the listed ph%sicians. This =ustifies Att%. A,ana?s belief that
Dr. A+pil was a +e+ber of the hospital?s staff.It 2ust 7. st9.ss.' t;%t u&'.9
t;. '10t95&. 1: %33%9.&t %ut;195t8, t;. @u.st51& 5& .>.98 0%s. 5s 6;.t;.9
t;. 395&053%4 ;%s 78 ;5s >14u&t%98 %0t 34%0.' t;. %g.&t 5& su0; % s5tu%t51&
t;%t % 3.9s1& 1: 19'5&%98 39u'.&0., 01&>.9s%&t 65t; 7us5&.ss us%g.s %&'
t;. &%tu9. 1: t;. 3%9t50u4%9 7us5&.ss, 5s ?ust5:5.' 5& 39.su25&g t;%t su0;
%g.&t ;%s %ut;195t8 t1 3.9:192 t;. 3%9t50u4%9 %0t 5& @u.st51&.
2
4n these cases,
the circu+stances %ield a positive answer to the 8uestion.
The challen,ed Decision also anchors its rulin, on the '10t95&. 1: 019319%t.
9.s31&s57545t8.
$
The dut% of providin, 8ualit% +edical service is no lon,er the sole
prero,ative and responsibilit% of the ph%sician. This is because the +odern hospital
now tends to or,ani<e a ;5g;48*391:.ss51&%4 2.'50%4 st%:: whose co+petence
and perfor+ance need also to be +onitored b% the hospital co++ensurate with its
inherent responsibilit% to provide 8ualit% +edical care.
*
Su0; 9.s31&s57545t8
5&04u'.s t;. 3913.9 su3.9>5s51& 1: t;. 2.27.9s 1: 5ts 2.'50%4 st%::.
A0019'5&g48, t;. ;1s35t%4 ;%s t;. 'ut8 t1 2%<. % 9.%s1&%74. .::19t t1
21&5t19 %&' 1>.9s.. t;. t9.%t2.&t 39.s0957.' %&' %'25&5st.9.' 78 t;.
3;8s505%&s 39%0t505&g 5& 5ts 39.25s.s.
Enfortunatel%, P(4 had been re+iss in its dut%. 4t did not conduct an 522.'5%t.
5&>.st5g%t51& on the reported +issin, ,au<es to the ,reat pre=udice and a,on% of
its patient. Dr. 3ocson, a +e+ber of P(4?s +edical staff, who testified on whether
the hospital conducted an investi,ation, was evasive, thus@
F +. g1 7%0< t1 t;. 13.9%t5>. t.0;&5@u., t;5s 6%s s5g&.' 78 #9.
!u9ug%&%&, 6%s t;5s su725tt.' t1 t;. ;1s35t%4K09%4%69.'
A Fes, sir, this was sub+itted to the hospital with the record of the patient.
I Aas the hospital i++ediatel% infor+ed about the +issin, spon,esPcralawred
A That is the dut% of the sur,eon, sir.
I As a witness to an untoward incident in the operatin, roo+, was it not %our
obli,ation, Dr., to also report to the hospital because %ou are under the control and
direction of the hospitalPcralawred
A The hospital alread% had the record of the two O( +issin,, sir.
I 4f %ou place %ourself in the position of the hospital, how will %ou recover.
A Fou do not answer +% 8uestion with another 8uestion.
I Did the hospital do an%thin, about the +issin, ,au<esPcralawred
A The hospital left it up to the sur,eon who was doin, the operation, sir.
I Did the hospital investi,ate the sur,eon who did the operationPcralawred
A 4 a+ not in the position to answer that, sir.
I Fou never did hear the hospital investi,atin, the doctors involved in this case
of those +issin, spon,es, or did %ou hear so+ethin,Pcralawred
> > > > > >
A 4 think we alread% +ade a report b% =ust sa%in, that two spon,es were
+issin,, it is up to the hospital to +ake the +ove.
Att%. A,ana
Precisel%, 4 a+ askin, %ou if the hospital did a +ove, if the hospital did a +ove.
A 4 cannot answer that.
Court
:% that answer, would %ou +ean to tell the Court that %ou were aware if there was
such a +ove done b% the hospitalPcralawred
A 4 cannot answer that, %our honor, because 4 did not have an% +ore follow&up of
the case that happened until now.
!
The above testi+on% obviousl% shows Dr. 3ocson?s 4%0< 1: 01&0.9& :19 t;.
3%t5.&ts. Su0; 01&'u0t 5s 9.:4.0t5>. 1: t;. ;1s35t%4Js 2%&&.9 1: su3.9>5s51&.
N1t 1&48 '5' !SI 79.%0; 5ts 'ut8 t1 1>.9s.. 19 su3.9>5s. %44 3.9s1&s 6;1
39%0t50. 2.'505&. 65t;5& 5ts 6%44s, 5t %4s1 :%54.' t1 t%<. %& %0t5>. st.3 5&
:5A5&g t;. &.g45g.&0. 01225tt.'. This renders P(4, not onl% vicariousl% liable for
the ne,li,ence of Dr. A+pil under Article #*" of the Civil Code, but also '59.0t48
45%74. for its own ne,li,ence under Article #$2.
6oreover, there is +erit in the trial court?s findin, that the failure of P(4 to conduct
an investi,ation S.st%745s;.' !SIJs 3%9t 5& t;. '%9< 01&s359%08 1: s54.&0. %&'
01&0.%42.&t %71ut t;. g%uL.s.S The followin, testi+on% of Att%. A,ana supports
such findin,s, thus@
I Fou said %ou relied on the pro+ise of Dr. A+pil and despite the pro+ise %ou
were not able to obtain the said record. Did %ou ,o back to the record custodianPcralawred
A I '5' &1t 7.0%us. I 6%s t%4<5&g t1 #9. A2354. ". 39125s.' 2..
F A:t.9 81u9 t%4< t1 #9. A2354, 81u 6.&t t1 t;. 9.019' 0ust1'5%&K
A I 6.&t t1 t;. 9.019' 0ust1'5%& t1 g.t t;. 045&50%4 9.019' 1: 28 65:., %&'
I 6%s g5>.& % 319t51& 1: t;. 9.019's 01&s5st5&g 1: t;. :5&'5&gs, %21&g
t;.2, t;. .&t95.s 1: t;. '%t.s, 7ut &1t t;. 13.9%t5&g 3910.'u9. %&'
13.9%t5>. 9.319t.
#"
4n su+, we find no +erit in the +otion for reconsideration.
+"EREFORE, we #EN) P(4?s +otion for reconsideration 65t; :5&%45t8.
SO OR#ERE#.
[G.R. NO. 1,B,77 : M%8 3, 2006]
C"ARLITO !EMNARAN#A, Petitioner, v. BAGANGA !L)+OO# COR!ORATION
%&' "(#SON C"(A,Respondents.
# E C I S I O N
!ANGANIBAN, C.J.:
6ana,erial e+plo%ees and +e+bers of the +ana,erial staff are e>e+pted fro+ the
provisions of the .abor Code on labor standards. (ince petitioner belon,s to this
class of e+plo%ees, he is not entitled to overti+e pa% and pre+iu+ pa% for workin,
on rest da%s.
The Case
:efore us is a Petition for Review
#
under Rule 45 of the Rules of Court, assailin, the
3anuar% $, ""1
and the 2
-ebruar% "" Resolution
1
of the Court of Appeals in CA&'.R. (P )o. 5$251. The !
6a% ""# Decision of the Court of Appeals affir+ed the 4 October #!!! Order of the
(ecretar% of .abor in O(&.(&"4&4&"!$&*". The 2 -ebruar% "" Resolution
denied the +otion for reconsideration.
T;. F%0ts
B>&:ataan Deterans (ecurit% A,enc%, 4nc. /B:D(A40 is in the business of providin,
securit% services while private respondents are B:D(A4?s e+plo%ees assi,ned to the
)ational Power Corporation at A+buklao 9%dro Blectric Plant, :okod, :en,uet
/A+buklao Plant0.
On " -ebruar% #!!2, private respondents led b% Ale>ander Pon, /Pon,0 instituted
a co+plaint
4
for underpa%+ent of wa,es a,ainst B:D(A4 before the Re,ional Office
of the Depart+ent of .abor and B+plo%+ent /DO.B0.
On $ 6arch #!!2, the Re,ional Office conducted a co+plaint inspection at the
A+buklao Plant where the followin, violations were noted@ /#0 non&presentation of
records7 /0 non&pa%+ent of holida% pa%7 /10 non&pa%+ent of rest da% pre+iu+7
/40 underpa%+ent of ni,ht shift differential pa%7 /50 non&pa%+ent of service
incentive leave7 /20 underpa%+ent of #1
th
+onth pa%7 /$0 no re,istration7 /*0 no
annual +edical report7 /!0 no annual work accidental report7 /#"0 no safet%
co++ittee7 and /##0 no trained first aider.
5
On the sa+e date, the Re,ional Office
issued a notice of hearin,
2
re8uirin, B:D(A4 and private respondents to attend the
hearin, on 6arch #!!2. Other hearin,s were set for * 6a% #!!2, $ 6a% #!!2
and #" 3une #!!2.
On #! Au,ust #!!2, the Director of the Re,ional Office /Re,ional Director0 issued an
Order, the dispositive portion of which reads@
+"EREFORE, pre+ises considered, respondent EP*BATAAN =ETERANS
SEC(RIT) AGENC) is hereb% OR#ERE# to pa% the co+puted deficiencies owin,
to the affected e+plo%ees in the total a+ount of SE=EN "(N#RE# SIPT) T"REE
T"O(SAN# NINE "(N#RE# NINET) SE=EN !ESOS %&' 8,E!ESOS within ten
/#"0 calendar da%s upon receipt hereof. Otherwise, a Arit of B>ecution shall be
issued to enforce co+pliance of this Order.
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#5. R4C5F DOR4A 12,1*".*5
#2. 'BO-RBF 64)O 12,1*".*5
#$. OR.A)DO RJ4.K.A(B 12,1*".*5
#*. (46P.4CO TB..O 12,1*".*5
#!. )OCB(, 6.'. 12,1*".*5
". A.B3O, R.D. 12,1*".*5
#. DJ4K)TA), P.C. 12,1*".*5
TOTA. P $21,!!$.*5
> > >
SO OR#ERE#.
$
B:D(A4 filed a +otion for reconsideration
*
and alle,ed that the Re,ional Director
does not have =urisdiction over the sub=ect +atter of the case because the +one%
clai+ of each private respondent e>ceeded P5,""". B:D(A4 pointed out that the
Re,ional Director should have endorsed the case to the .abor Arbiter.
4n a supple+ental +otion for reconsideration,
!
B:D(A4 8uestioned the Re,ional
Director?s basis for the co+putation of the deficiencies due to each private
respondent.
4n an Order
#"
dated #2 3anuar% #!!$, the Re,ional Director denied B:D(A4?s +otion
for reconsideration and supple+ental +otion for reconsideration. The Re,ional
Director stated that, pursuant to Republic Act )o. $$1" /RA $$1"0,
##
the li+itations
under Articles #!
#
and #$/20
#1
of the .abor Code no lon,er appl% to the (ecretar%
of .abor?s visitorial and enforce+ent powers under Article #*/b0.
#4
The (ecretar% of
.abor or his dul% authori<ed representatives are now e+powered to hear and
decide, in a su++ar% proceedin,, an% +atter involvin, the recover% of an% a+ount
of wa,es and other +onetar% clai+s arisin, out of e+plo%er&e+plo%ee relations at
the ti+e of the inspection.
B:D(A4 appealed to the (ecretar% of .abor.
T;. Ru45&g 1: t;. S.09.t%98 1: L%719
4n an Order
#5
dated 4 October #!!!, the (ecretar% of .abor affir+ed with
+odification the Re,ional Director?s #! Au,ust #!!2 Order. The (ecretar% of .abor
ordered that the P#,""" received b% private respondents Ro+eo Ale=o, Aton,
Cenon, 3r., 'eofre% 6ino, Dennis Bpi, and Rick% Doria be deducted fro+ their
respective clai+s. The (ecretar% of .abor ruled that, pursuant to RA $$1", the
Court?s decision in the Servando
#2
case is no lon,er controllin, insofar as the
restrictive effect of Article #! on the visitorial and enforce+ent power of the
(ecretar% of .abor is concerned.
The (ecretar% of .abor also stated that there was no denial of due process because
B:D(A4 was accorded several opportunities to present its side but B:D(A4 failed to
present an% evidence to controvert the findin,s of the Re,ional Director. 6oreover,
the (ecretar% of .abor doubted the veracit% and authenticit% of B:D(A4?s
docu+entar% evidence. The (ecretar% of .abor noted that these docu+ents were
not presented at the initial sta,e of the hearin, and that the pa%roll docu+ents did
not indicate the periods covered b% B:D(A4?s alle,ed pa%+ents.
BD:(A4 filed a +otion for reconsideration which was denied b% the (ecretar% of
.abor in his 1 3anuar% """ Order.
#$
B:D(A4 filed a petition for #ertiorari before the Court of Appeals.
T;. Ru45&g 1: t;. C1u9t 1: A33.%4s
4n its ! 6a% ""# Decision, the Court of Appeals dis+issed the petition and
affir+ed the (ecretar% of .abor?s decision. The Court of Appeals adopted the
(ecretar% of .abor?s rulin, that RA $$1" repealed the =urisdictional li+itation
i+posed b% Article #! on Article #* of the .abor Code. The Court of Appeals also
a,reed with the (ecretar% of .abor?s findin, that B:D(A4 was accorded due process.
The Court of Appeals also denied B:D(A4?s +otion for reconsideration in its 2
-ebruar% "" Resolution.
9ence, this petition.
T;. Issu.s
This case raises the followin, issues@
#. Ahether the (ecretar% of .abor or his dul% authori<ed representatives ac8uired
=urisdiction over B:D(A47 andcralawlibrar%
. Ahether the (ecretar% of .abor or his dul% authori<ed representatives have
=urisdiction over the +one% clai+s of private respondents which e>ceed P5,""".
T;. Ru45&g 1: t;. C1u9t
The petition has no +erit.
8n the !e'ional Director6s Jurisdiction over *9V:A%
B:D(A4 clai+s that the Re,ional Director did not ac8uire =urisdiction over B:D(A4
because he failed to co+pl% with (ection ##, Rule #4 of the #!!$ Rules of Civil
Procedure.
#*
B:D(A4 points out that the notice of hearin, was served at the
A+buklao Plant, not at B:D(A4?s +ain office in 6akati, and that it was addressed to
.eonardo Castro, 3r., B:D(A4?s Dice&President.
The Rules on the Disposition of .abor (tandards Cases in the Re,ional
Offices
#!
/rules0 specificall% state that notices and copies of orders shall be served
on the parties or their dul% authori<ed representatives at their last known address
or, if the% are represented b% counsel, throu,h the latter.
"
The rules shall be
liberall% construed
#
and onl% in the absence of an% applicable provision will the
Rules of Court appl% in a suppletor% character.
4n this case, B:D(A4 does not den% havin, received the notices of hearin,. 4n fact,
on ! 6arch and #1 3une #!!2, Danilo :ur,os and Bdwina 6anao, detach+ent
co++ander and bookkeeper of B:D(A4, respectivel%, appeared before the Re,ional
Director. The% clai+ed that the 6arch #!!2 notice of hearin, was received late
and +anifested that the notices should be sent to the 6anila office. Thereafter, the
notices of hearin, were sent to the 6anila office. The% were also infor+ed of
B:D(A4?s violations and were asked to present the e+plo%+ent records of the
private respondents for verification. The% were, +oreover, asked to sub+it, within
#" da%s, proof of co+pliance or their position paper. The Re,ional Director validl%
ac8uired =urisdiction over B:D(A4. B:D(A4 can no lon,er 8uestion the =urisdiction of
the Re,ional Director after receivin, the notices of hearin, and after appearin,
before the Re,ional Director.
8n the !e'ional Director6s Jurisdiction over the /oney Claims
B:D(A4 +aintains that under Articles #! and #$/20 of the .abor Code, the .abor
Arbiter, not the Re,ional Director, has e>clusive and ori,inal =urisdiction over the
case because the individual +onetar% clai+ of private respondents e>ceeds P5,""".
B:D(A4 also ar,ues that the case falls under the e>ception clause in Article #*/b0
of the .abor Code. B:D(A4 asserts that the Re,ional Director should have certified
the case to the Arbitration :ranch of the )ational .abor Relations Co++ission
/).RC0 for a full&blown hearin, on the +erits.
4n Allied %nvestigation *ureau$ %n#. v. Se#. of Labor, we ruled that@
Ahile it is true that under Articles #! and #$ of the .abor Code, the .abor Arbiter
has =urisdiction to hear and decide cases where the a,,re,ate +one% clai+s of each
e+plo%ee e>ceeds P5,"""."", said provisions of law do not conte+plate nor cover
the visitorial and enforce+ent powers of the (ecretar% of .abor or his dul%
authori<ed representatives.
Rather, said powers are defined and set forth in Article #* of the .abor Code /as
a+ended b% R.A. )o. $$1"0 thus@
Art. #* Disitorial and enforce+ent power. & & & > > >
/b0 Not,it'standing t'e provisions of Arti#leEsF >G@ and G>H of t'is Code to t'e
#ontrar($ and in #ases ,'ere t'e relations'ip of emplo(er-emplo(ee still e4ists$ t'e
Se#retar( of Labor and &mplo(ment or 'is dul( aut'ori9ed representatives s'all
'ave t'e po,er to issue #omplian#e orders to give effe#t to Et'e labor standards
provisions of t'is Code and ot'erF labor legislation based on t'e findings of labor
emplo(ment and enfor#ement offi#ers or industrial safet( engineers made in t'e
#ourse of inspe#tion.The (ecretar% or his dul% authori<ed representatives shall issue
writs of e>ecution to the appropriate authorit% for the enforce+ent of their orders,
e>cept in cases where the e+plo%er contests the findin,s of the labor e+plo%+ent
and enforce+ent officer and raises issues supported b% docu+entar% proofs which
were not considered in the course of inspection.
> > >
The afore8uoted provision e>plicitl% e>cludes fro+ its covera,e Articles #! and #$
of the .abor Code b% the phrase S/)0otwithstandin, the provisions of Articles #!
and #$of this Code to the contrar% > > >S thereb% retainin, and further
stren,thenin, the power of the (ecretar% of .abor or his dul% authori<ed
representatives to issue co+pliance orders to ,ive effect to the labor standards
provisions of said Code and other labor le,islation based on the findin,s of labor
e+plo%+ent and enforce+ent officer or industrial safet% en,ineer +ade in the
course of inspection.
1
/4talics in the ori,inal0
This was further affir+ed in our rulin, in Cirineo *o,ling Pla9a$ %n#. v.
Sensing$
4
where we sustained the =urisdiction of the DO.B Re,ional Director and
held that St;. >5s5t195%4 %&' .&:190.2.&t 316.9s 1: t;. #OLE R.g51&%4
#59.0t19 t1 19'.9 %&' .&:190. 012345%&0. 65t; 4%719 st%&'%9' 4%6s 0%& 7.
.A.905s.' .>.& 6;.9. t;. 5&'5>5'u%4 04%52 .A0..'s !,,000.S
9owever, if the labor standards case is covered b% the e>ception clause in Article
#*/b0 of the .abor Code, then the Re,ional Director will have to endorse the case
to the appropriate Arbitration :ranch of the ).RC. 4n order to divest the Re,ional
Director or his representatives of =urisdiction, the followin, ele+ents +ust be
present@ /a0 that the e+plo%er contests the findin,s of the labor re,ulations officer
and raises issues thereon7 /b0 that in order to resolve such issues, there is a need
to e>a+ine evidentiar% +atters7 and /c0 that such +atters are not verifiable in the
nor+al course of inspection.
5
The rules also provide that the e+plo%er shall raise
such ob=ections durin, the hearin, of the case or at an% ti+e after receipt of the
notice of inspection results.
2
4n this case, the Re,ional Director validl% assu+ed =urisdiction over the +one%
clai+s of private respondents even if the clai+s e>ceeded P5,""" because such
=urisdiction was e>ercised in accordance with Article #*/b0 of the .abor Code and
the case does not fall under the e>ception clause.
The Court notes that B:D(A4 did not contest the findin,s of the labor re,ulations
officer durin, the hearin, or after receipt of the notice of inspection results. 4t was
onl% in its supple+ental +otion for reconsideration before the Re,ional Director that
B:D(A4 8uestioned the findin,s of the labor re,ulations officer and presented
docu+entar% evidence to controvert the clai+s of private respondents. :ut even if
this was the case, the Re,ional Director and the (ecretar% of .abor still looked into
and considered B:D(A4?s docu+entar% evidence and found that such did not
warrant the reversal of the Re,ional Director?s order. The (ecretar% of .abor also
doubted the veracit% and authenticit% of B:D(A4?s docu+entar% evidence. 6oreover,
the pieces of evidence presented b% B:D(A4 were verifiable in the nor+al course of
inspection because all e+plo%+ent records of the e+plo%ees should be kept and
+aintained in or about the pre+ises of the workplace, which in this case is in
A+buklao Plant, the establish+ent where private respondents were re,ularl%
assi,ned.
$
+"EREFORE, we #EN) the petition. Ae AFFIRM the ! 6a% ""# Decision and
the 2 -ebruar% "" Resolution of the Court of Appeals in CA&'.R. (P )o. 5$251.
SO OR#ERE#.
G.R. N1. 18,,67 : O0t17.9 20, 2010
ARSENIO $. LOCSIN, Petitioner, v. NISSAN LEASE !"ILS. INC. %&' L(IS
BANSON, Respondents.cralaw
# E C I S I O N
BRION, J.;
Throu,h a petition for review on certiorari,
#
cra#aw petitioner Arsenio G. .ocsin /.ocsin0
seeks the reversal of the Decision