Control

1. Control • The main issue of whether an agency or an employment relationship exists depends on the incidents of the relationship. The Labor Code concept of “control” has to be compared and distinguished with the “control” that must necessarily exist in a principal-agent relationship. The principal cannot but also have his or her say in directing the course of the principal-agent relationship, especially in cases where the company-representative relationship in the insurance industry is an agency. • Tongko v. Manufacturers Life Insurance (GR 167622, June 29, 2010 & January 25, 2011)

2. Control • Guidelines indicative of labor law “control,”, should not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means or methods to be employed in attaining the result, or of fixing the methodology and of binding or restricting the party hired to the use of these means. • Tongko v. Manufacturers Life Insurance (GR 167622, June 29, 2010 & January 25, 2011)

3. Dual Juridical Relationship • Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created between petitioner and respondent: that of employer-employee and vendor-vendee. The Kasunduan did not extinguish the employer-employee relationship of the parties extant before the execution of said deed. • Villamaria v. CA, April 19, 2006

4. Officer vs. Employee • Conformably with Section 25, a position must be expressly mentioned in the By-Laws in order to be considered as a corporate office. Thus, the creation of an office pursuant to or under a By-Law enabling provision is not enough to make a position a corporate office. • The criteria for distinguishing between corporate officers who may be ousted from office at will, on one hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand, do not depend on the nature of the services performed, but on the manner of creation of the office. • Matling Industrial v. Coros, October 13, 2010

5. Talents • Drivers/cameramen are NOT “talents” • They are employees, and should be considered regular employees • Fulache v. ABS-CBN, January 21, 2010

6. Job Contracting • A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur: • (a) The contractor carries on a distinct and independent business and undertakes the contract work on his 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 his work except as to the results thereof; • (b) The contractor has substantial capital or investment; and • (c) The agreement between the principal and the contractor or subcontractor assures the contractual employees' entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social welfare benefits. • Babas v. Lorenzo Shipping, December 15, 2010 (citing Vinoya)

7. Job Contracting • A contractor’s Certificate of Registration is not sufficient proof that it is an independent contractor. A Certificate of Registration issued by the Department of Labor and Employment is not conclusive evidence of such status. • The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from arising. • Babas v. Lorenzo Shipping, December 15, 2010 (citing San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito Remada, Alilgilan Multi-Purpose Coop (AMPCO), and Merlyn N. Policarpio)

8. Possession by contractor of substantial capital NOT ENOUGH • Mere compliance with substantial capital requirement will not suffice for a contractor to be considered a legitimate contractor. If the workers supplied by the contractor work alongside the principal’s regular employees who are performing identical work, such is an indicium of labor-only contracting. • It is the totality of the facts and the surrounding circumstances of the case which is determinative of the parties’ relationship. Several factors may be considered, such as, whether the contractor was 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 specified pieces of work; the control and supervision of the workers the power of the employer with respect to the hiring, firing and payment of the workers of the contractor; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms ofpayment. • Coca-Cola Bottlers v. Agito, February 13, 2009

9. In a certification election case, the DOLE issued an Order stating that the company’s casual workers had attained regular status. The employer claimed that the reckoning point in determining who among its casual employees are entitled to regularization should be the date when the Petition for Certification Election was filed. Is the contention correct? • No. A casual employee becomes regular with respect to the activity in which he is employed one year after he is employed, the reckoning date for determining his regularization is his hiring date. While the issue of regularization came about only when the petition for certification election was filed, the concerned employees attained regular status by operation of law. Further, the grant of the benefit of regularization should not be limited to the employees who questioned their status before the labor tribunal/court and asserted their rights; it should also extend to those similarly situated. • Kimberly-Clark v. Secretary of Labor, November 23, 2007

10. Are probationary employees entitled to security of tenure? • Yes. Even probationary employees who do not enjoy permanent status are still entitled to the constitutional protection of security of tenure. Their employment may only be terminated for a valid and just cause or for failing to qualify as a regular employee in accordance with the reasonable standards made known to him by the employer at the time of engagement and after being accorded due process. • Espina v. CA, March 28, 2007

11. Project Employment • “Project” could refer to one or the other of at least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. • The term “project” could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times. • Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular employee’s engagement. • Leyte Geothermal Power Progressive Employees Union v. PNOC, March 30, 2011

12. Project Employment • The second paragraph of Art. 280 demarcates as “casual” employees, all other employees who do not fall under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those “casual” employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken. • The proviso is applicable only to the employees who are deemed “casuals” but not to the “project” employees nor the regular employees treated in paragraph one of Art. 280. • Leyte Geothermal Power Progressive Employees Union v. PNOC, March 30, 2011

13. Termination of Project Employees • Completion of the work or project automatically terminates the employment. • Prior or advance notice of termination is not part of procedural due process if the termination is brought about by the completion of the contract or phase thereof for which the employee was engaged. • There is no violation of any requirement of procedural due process by failing to give the project employees advance notice of their termination; thus, there is no basis for the payment of nominal damages (Agabon). • DM Consunji v. Gobres, August 8, 2010

14. Probationary & Fixed-Term Contracts for Teachers • In a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, Article 281 should assume primacy and the fixed-period character of the contract must give way. • The fixed-term character of employment essentially refers to the period agreed upon between the employer and the employee; employment exists only for the duration of the term and ends on its own when the term expires. In a sense, employment on probationary status also refers to a period because of the technical meaning “probation” carries in Philippine labor law – a maximum period of six months, or in the academe, a period of three years for those engaged in teaching jobs. Their similarity ends there, however, because of the overriding meaning that being “on probation” connotes, i.e., a process of testing and observing the character or abilities of a person who is new to a role or job. • the probationary period can only last for a specific maximum period and under reasonable, well-laid and properly communicated standards. Otherwise stated, within the period of the probation, any employer move based on the probationary standards and affecting the continuity of the employment must strictly conform to the probationary rules. • Mercado v. AMA Computer College, April 13, 2010

15. Which among the following will not merit a double pay, i.e. 200% of the regular salary? • (a) Work on New Year’s Day; • (b) Work on Maundy Thursday; • (c) Work on Rizal Day; • (d) Work on Ninoy Aquino Day; • (e) Work on Eidul Adha.

16. The Regional Wage Board of Region II issued a Wage Order granting all employees in the private sector throughout the region an across-the-board increase of P15.00 daily. Is this Wage Order valid? • The Wage Order is VALID insofar as the mandated increase applies to employees earning the prevailing minimum wage rate at the time of the passage of the Wage Order and VOID with respect to its application to employees receiving more than the prevailing minimum wage rate at the time of the passage of the Wage Order. Pursuant to its authority, the Regional Wage Boards may issue wage orders which set the daily minimum wage rates. In the present case, the Regional Wage Board did not determine or fix the minimum wage rate. It did not set a wage level nor a range to which a wage adjustment or increase shall be added. Instead, it granted an across-the-board wage increase of P15.00 to all employees in the region. In doing so, the Regional Wage Board exceeded its authority by extending the coverage of the Wage Order to wage earners receiving more than the prevailing minimum wage rate, without a denominated salary ceiling. The Wage Order granted additional benefits not contemplated by R.A. No. 6727. • Metropolitan Bank and Trust Company v. NWPC, February 6, 2007

17. Under the Sexual Harrassment Act, does the definition of “sexual harassment” require a categorical demand or request for sexual favor? • No. It is true that the provision calls for a “demand, request or requirement of a sexual favor.” But it is not necessary that the demand, request or requirement of a sexual favor be articulated in a categorical oral or written statement. It may be discerned, with equal certitude, from the acts of the offender. Holding and squeezing the victim’s shoulders, running his fingers across her neck and tickling her ear, having inappropriate conversations with her, giving her money allegedly for school expenses with a promise of future privileges, and making statements with unmistakable sexual overtones – all these acts of the respondent resound with deafening clarity the unspoken request for a sexual favor. • Likewise, it is not essential that the demand, request or requirement be made as a condition for continued employment or for promotion to a higher position. It is enough that the respondent’s acts result in creating an intimidating, hostile or offensive environment for the employee. • Domingo v. Rayala, February 18, 2008

18. A retired employee claims retirement differential from her employer. She demanded payment of the retirement differential through a letter that was sent to the employer. When the employer refused to give the benefit, the employee filed a case with the NLRC. The employer claimed that the action has prescribed since three years had lapsed from the time the cause of action accrued, i.e., when the retirement plan was amended. Is the employer’s contention correct? • No. While it is true that the three year prescription period is counted from the time the cause of action accrued, the said period is interrupted by a claim filed at the proper judicial or quasi-judicial forum, an extra-judicial demand on the employer or the employer’s acknowledgment of its debt or obligation. In this case, the employee’s demand letter interrupted the running of the three-year prescriptive period. The period started to run again when the employer made its written reply categorically denying the demand. At the time the case was filed with the NLRC, the three-year period had not yet lapsed. • (Rivera v. United Laboratories, April 22, 2009)

19. What is the distinction between disability claims under the Labor Code and under the Social Security Law? • Claims under the Labor Code for compensation and under the Social Security Law for benefits are not the same as to their nature and purpose. On the one hand, the pertinent provisions of the Labor Code govern compensability of work-related disabilities or when there is loss of income due to work-connected or work-aggravated injury or illness. On the other hand, the benefits under the Social Security Law are intended to provide insurance or protection against the hazards or risks of disability, sickness, old age or death, inter alia, irrespective of whether they arose from or in the course of the employment. And unlike under the Social Security Law, a disability is total and permanent under the Labor Code if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days regardless of whether he loses the use of any of his body parts. • (Ortega v. Social Security Commission, June 25, 2008)

20. In the CBA covering the Manila Jockey Club Employees Labor Union, the parties agreed to a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday. The CBA further provided that all work performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered as overtime and paid as such. Subsequently, the company issued an inter-office memorandum declaring that the hours of work shall be from 1:00 p.m. to 8:00 p.m. when horse races are held, i.e., every Tuesday and Thursday. The memorandum, however, maintained the 9:00 a.m. to 5:00 p.m. schedule for non-race days. The Union claimed that this violated the prohibition against non-diminution of wages and benefits since the employees were precluded from rendering their usual overtime work from 5:00 p.m. to 9:00 p.m.. Is the Union correct?

21. No. There is no diminution. The CBA still recognized the prerogative of the company to change the work schedule. The CBA does not guarantee overtime work for all the employees but merely provides that all work performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered as overtime and paid as such. The company was not obliged to allow all its employees to render overtime work everyday for the whole year, but only those employees whose services were needed after their regular working hours and only upon the instructions of management. The overtime pay was not given to each employee consistently, deliberately and unconditionally, but as a compensation for additional services rendered. Thus, overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code on prohibition against elimination or diminution of benefits. • (Manila Jockey Club Employees Labor Union v. Manila Jockey Club, March 7, 2007)

22. Money claims of seafarers • Article 291 is the law governing the prescription of money claims of seafarers, a class of overseas contract workers. This law prevails over Section 28 of the Standard Employment Contract for Seafarers which provides for claims to be brought only within one year from the date of the seafarer’s return to the point of hire. • Section 28 of the Standard Employment Contract for Seafarers, insofar as it limits the prescriptive period within which the seafarers may file their money claims, is null and void. The applicable provision is Article 291 of the Labor Code, it being more favorable to the seafarers and more in accord with the State’s declared policy to afford full protection to labor. • The prescriptive period in the present case is thus three years from the time the cause of action accrues. • Southeastern Shipping v. Navarra, June 22, 2010

23. Withholding of Wages • Management prerogative refers “to the right of an employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of work.” Although management prerogative refers to “the right to regulate all aspects of employment,” it cannot be understood to include the right to temporarily withhold salary/wages without the consent of the employee. To sanction such an interpretation would be contrary to Article 116 of the Labor Code. • SHS Perforated Materials v. Diaz, October 13, 2010

24. May an employee invoke the remedies available under the writ of habeas data where an employer decides to transfer her workplace on the basis of copies of an anonymous letter posted therein ─ imputing to her disloyalty to the company and calling for her to leave, which imputation it investigated but fails to inform her of the details thereof? • The habeas data rule, in general, is designed to protect by means of judicial complaint the image, privacy, honor, information, and freedom of information of an individual. It is meant to provide a forum to enforce one’s right to the truth and to informational privacy, thus safeguarding the constitutional guarantees of a person’s right to life, liberty and security against abuse in this age of information technology. • The writs of amparo and habeas data will NOT issue to protect purely property or commercial concerns nor when the grounds invoked in support of the petitions therefor are vague or doubtful. Employment constitutes a property right under the context of the due process clause of the Constitution. It is evident that respondent’s reservations on the real reasons for her transfer  a legitimate concern respecting the terms and conditions of one’s employment  are what prompted her to adopt the extraordinary remedy of habeas data. Jurisdiction over such concerns is inarguably lodged by law with the NLRC and the Labor Arbiters. • There is no showing from the facts presented that petitioners committed any unjustifiable or unlawful violation of respondent’s right to privacyvis-a-vis the right to life, liberty or security. • Manila Electric Company v. Gopez Lim, October 5, 2010

25. Retirement • Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former. • A retirement plan giving the employer the option to retire its employees below the ages provided by law must be assented to and accepted by the latter, otherwise, its adhesive imposition will amount to a deprivation of property without due process of law. • Cercado v. Uniprom, October 13, 2010

26. SIL • Employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field personnel. • Serrano v. Severino Santos Transit, August 9, 2010

27. Does the Secretary of Labor have jurisdiction to determine the existence of employer-employee relationship in the exercise of the visitorial and enforcement powers under Article 128? • No. Article 128’s grant of visitorial and enforcement powers is for the purpose of determining violations of, and enforcing, the Labor Code and any labor law, wage order, or rules and regulations. If there is no employer-employee relationship in the first place, the duty of the employer to adhere to labor standards with respect to the non-employees is questionable. The Secretary’s power under Art. 128 does not apply in two instances: (a) where the employer-employee relationship has ceased; and (b) where no such relationship has ever existed. If there is a prima facie showing of the absence of employer-employee relationship, the Secretary is precluded from exercising the visitorial and enforcement powers. • (People’s Broadcasting v. Secretary, May 8, 2009)

28. VA decision subject to MR • The VA’s decision may still be reconsidered on the basis of a motion for reconsideration seasonably filed within 10 days from receipt thereof. The seasonable filing of a motion for reconsideration is a mandatory requirement to forestall the finality of such decision. • The absence of a categorical language in Article 262-A does not preclude the filing of a motion for reconsideration of the VA’s decision within the 10-day period. • Albert Teng Fish Trading v. Pahagac, November 17, 2010

29. Labor Arbiter & Voluntary Arbitrator • Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination disputes. On the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdictionover grievances arising from the interpretation or enforcement of company policies. • As a general rule then, termination disputes should be brought before a labor arbiter, except when the parties, under Art. 262, unmistakably express that they agree to submit the same to voluntary arbitration. • Negros Metal v. Lamayo, August 25, 2010

30. VA decision subject to MR • By disallowing reconsideration of the VA’s decision, Section 7, Rule XIX of DO 40-03 and Section 7 of the 2005 Procedural Guidelines went directly against the legislative intent behind Article 262-A of the Labor Code. These rules deny the VA the chance to correct himself and compel the courts of justice to prematurely intervene with the action of an administrative agency entrusted with the adjudication of controversies coming under its special knowledge, training and specific field of expertise. • In this era of clogged court dockets, the need for specialized administrative agencies with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or intricate questions of facts, subject to judicial review, is indispensable. • Albert Teng Fish Trading v. Pahagac, November 17, 2010