[G.R. No.87098.November 4,1996]ENCYCLOPEDIA BRITANNICA (PHILIPPINES), INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER TEODORICO L. DOGELIO and BENJAMIN LIM JOCO, respondents.

FACTS

Benjamin Limjoco was a Sales Division manager of petitioner Encyclopedia Britannica. He received commissions from the products sold by his agents, while office expenses are deducted from his commissions. Later, Limjoco resigned to pursue his private business. He then filed a complaint against petitioner with DOLE for non-payment of separation pay and other benefits, as well as illegal deduction from his sales commissions. Limjoco claimed that he was hired by the petitioner, was assigned in the sales department and was earning an average of P40,000.00 monthly as commissions; that he was under the supervision of the officials of the petitioner who issued to him and other personnel, memoranda, guidelines on company policies, instructions, etc. Petitioner, on its part, alleged that Limjoco was not its employee but an independent dealer authorized to promote and sell its products and in return, received commissions therefrom.

ISSUEWhether or not Limjoco was an independent contractor or an employee of Encyclopedia Britannica?HELDIn determining the existence of an employer-employee relationship, the following elements must be present: 1. selection and engagement of the employee; 2. payment of wages; 3. power of dismissal; and 4. the power to control the employees conduct. Of the above, control of employees conduct is commonly regarded as the most crucial and determinative factor ofthe presence or absence of an employer-employee relationship. The fact that petitioner issued memoranda to private respondent and other sales managers did not prove that petitioner had control over them. The memoranda were mere guidelines on company policies which sales managers follow and further require on their sales agents. The issuance of memoranda to Limjoco and other sales managers was only done to appraise them and their respective agents of the company policies and procedures. Limjoco was free to conduct and promote their sales operations. The occasional reports to the petitioner from Limjoco were required in order to update the company of its dealers performance. Even though petitioner had fixed the prices of the products for reason of uniformity and that Limjoco cannotalter them, he, nevertheless, had the free rein in the means and methods in selling them. He was free to conduct his work and he was free to engage in other means of livelihood. At the time he was a dealer for the petitioner, Limjoco was also a director and later the president ofthe Farmers Rural Bank. Had he been an employee of the petitioner, he could not be employed elsewhere and he would be required to devote full time for petitioner .Petition Granted.

[G.R. No. 157214. June 7, 2005] PHILIPPINE GLOBAL COMMUNICATIONS, INC., petitioner, vs. RICARDO DE VERA, espondent.FACTSDe Vera and petitioner company entered into a contract where respondent was to attend to the medical needs of petitioners employees while being paid a retainer fee of P4,000 per month. Later, De Vera was informed y petitioner that the retainership will be discontinued. Respondentfiled a case for illegal dismissal.ISSUEWhether or not de Vera is an employee of PhilComm or an independent contractor.HELDApplying the four fold test, de Vera is not an employee. There are several indicators apart from the fact that the power to terminate the arrangement lay on both parties:fromthetimehestartedtoworkwithpetitioner,heneverwasincludedinits payroll; was never deducted any contribution for remittance to the Social Security System(SSS);hewassubjectedbypetitionertotheten(10%)percentwithholdingtaxforhis professional fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an employer-employee relationship;therecordsarerepletewithevidenceshowingthatrespondenthadtobillpetitioner for his monthly professional fees. It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary. Finally, the element of control is absent. Petition granted

[G.R.No.84484November15,1989]INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO, respondents.FACTSSince 1968, respondent Basiao has been an agent for petitioner company, and is authorized to solicit within the Philippines applications for insurance policies and annuities in accordance with the existing rules and regulations of the company. In return, he would receive compensation, in the form of commissions. Some four years later, in April 1972, the parties entered into another contract an Agency Manager's Contract and to implement his end of it Basiao organized an agency or office to which he gave the name M. Basiao and Associates, while concurrently fulfilling his commitments under the first contract withthe Company.In May, 1979, theCompany terminated the Agency Manager's Contract. After vainly seeking a reconsideration, Basiao sued the Company in a civil action and this, he was later to claim, prompted the latter to terminate also his engagementunder the first contract and to stop payment of his commissions starting April 1, 1980. Basiao thereafter filed with the then Ministry of Labor a complaint against the Company and its president. The complaint sought to recover commissions allegedly unpaid thereunder, plus attorney's fees. The respondents disputed the Ministry's jurisdiction over Basiao's claim, asserting that he was not the Company's employee, but an independent contractor.ISSUEWhether or not there exist an employer-employee relationship between Basiao and Insular LifeHELDThe SC ruled in favor of Insular Life. Not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee relationship between them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish altogether .Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. The distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the business of insurance, and is on that accountsubject to regulation by the State with respect, not only to the relations between insurer and insured but also to the internal affairs of the insurance company. Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may notrun afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employer-employee relationship between him and the company. The respondents limit themselves to pointing out that Basiao's contract with the Company bound him to observe and conform to such rules and regulations as the latter might from time to time prescribe. No showing has been made that any such rules or regulations were in factpromulgated, much less that any rules existed or were issued which effectively controlled or restricted his choice of methods or the methods themselves of selling insurance. Absentsuch showing, the Court will not speculate that any exceptions or qualifications were imposed on the express provision of the contract leaving Basiao "... free to exercise his own judgment as to the time, place and means of soliciting insurance."The Court, therefore, rules that under the contract invoked by him, Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. NLRC Decision set aside

[G.R. No.170087August 31,2006]ANGELINA FRANCISCO, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,KASEI CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA,IRENE BALLESTEROS, TRINIDAD LIZA and RAMON ESCUETA, Respondents.FACTSSometime in 1995, petitioner was hired by Kasei Corporation during its incorporation stage. She was designated as Accountant and Corporate Secretary and was assigned to handle all the accounting needs of the company. She was also designated as Liaison Officer to the City ofMakati to secure business permits, construction permits and other licenses for the initial operation of the company. In 1996, petitioner was designated Acting Manager. As Acting Manager, petitioner was assigned to handle recruitment of all employees and perform management administration functions; represent the company in all dealings with government agencies, especially with the Bureau ofInternal Revenue (BIR), Social Security System (SSS) and in the city government of Makati; and to administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei Corporation. For five years, petitioner performed the duties of Acting Manager. As of December 31, 2000 her salary was P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation. In January 2001, petitioner was replaced by Liza R. Fuentes as Manager. Petitioner alleged thatshe was required to sign a prepared resolution for her replacement but she was assured thatshe would still be connected with Kasei Corporation. Timoteo Acedo, the designated Treasurer, convened a meeting of all employees of Kasei Corporation and announced that nothing had changed and that petitioner was still connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters. Thereafter, Kasei Corporation reduced her salary by P2,500.00 a month beginning January up to September 2001 for a total reduction of P22,500.00 as of September 2001. Petitioner was not paid her mid-year bonus allegedly because the company was not earning well. On October 2001, petitioner did not receive her salary from the company. She made repeated follow-ups with the company cashier but she was advised that the company was not earning well. On October 15, 2001, petitioner asked for her salary from Acedo and the rest of the officers butshe was informed that she is no longer connected with the company. Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal before the labor arbiter.ISSUEWhether or not there was an employer-employee relationship between petitioner and private respondent Kasei Corporation.HELDThe SC held that there has been no uniform test to determine the existence of an employer-employee relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard ofright-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship.However, in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker. There are instances when, aside from the employers power to control the employee with respect to the means and methods by which the work is to be accomplished, economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual, whether as employee, independentcontractor, corporate officer or some other capacity.The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employers power to control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on; and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latters employment.Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an integral part of the employers business; (2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill,judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in thatline of business.The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business. In the United States ,the touchstone of economic reality in analyzing possible employment relationships for purposes of the Federal Labor Standards Act is dependency. By analogy, the benchmark of economic reality in analyzing possible employment relationships for purposes of the Labor Code ought to be the economic dependence of the worker on his employer.By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. She reported for work regularly and served in various capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially the same job functions, that is, rendering accounting and tax services to the company and performing functions necessary and desirable for the proper operation of the corporation such as securing business permits and other licenses over an indefinite period of engagement.Based on the foregoing, there can be no other conclusion that petitioner is an employee ofrespondent Kasei Corporation. She was selected and engaged by the company for compensation, and is economically dependent upon respondent for her continued employmentin that line of business. Her main job function involved accounting and tax services rendered to respondent corporation on a regular basis over an indefinite period of engagement. Respondentcorporation hired and engaged petitioner for compensation, with the power to dismiss her for cause. More importantly, respondent corporation had the power to control petitioner with the means and methods by which the work is to be accomplished.The corporation constructively dismissed petitioner when it reduced her salary by P2,500 a month from January to September 2001. This amounts to an illegal termination of employment, where the petitioner is entitled to full back wages. Since the position of petitioner as accountantis one of trust and confidence, and under the principle of strained relations, petitioner is further entitled to separation pay, in lieu of reinstatement.Petition is granted.

Sevilla vs. CAFACTS:A contract by and between Noguera and Tourist World Service (TWS), represented by Canilao, wherein TWS leased the premises belonging to Noguera as branch office of TWS. When the branch office was opened, it was run by appellant Sevilla payable to TWS by any airline for any fare brought in on the efforts of Mrs. Sevilla, 4% was togo to Sevilla and 3% was to be withheld by the TWS.Later, TWS was informed that Sevilla was connected with rival firm, and since the branch office was losing,TWS considered closing down its office.On January 3, 1962, the contract with appellee for the use of the branch office premises was terminated and while the effectivity thereof was January 31, 1962, the appellees no longer used it. Because of this, Canilao, the secretary of TWS, went over to the branch office, and finding the premises locked, he padlocked the premises. When neither appellant Sevilla nor any of his employees could enter, a complaint was filed by the appellants against the appellees.TWS insisted that Sevilla was a mere employee, being the branch manager of its branch office and thatshe had no say on the lease executed with the private respondent, Noguera.ISSUE:W/N ER-EE relationship exists between Sevilla and TWSHELD:The records show that petitioner, Sevilla, was not subject to control by the private respondent TWS. In the first place, under the contract of lease, she had bound herself in solidum as and for rental payments, an arrangement that would belie claims of a master-servant relationship. That does not make her an employee of TWS, since a true employee cannot be made to part with his own money in pursuance of his employers business, or otherwise, assume any liability thereof.In the second place, when the branch office was opened, the same was run by the appellant Sevilla payable to TWS by any airline for any fare brought in on the effort of Sevilla. Thus, it cannot be said that Sevilla was under the control of TWS. Sevilla in pursuing the business, relied on her own capabilities.It is further admitted that Sevilla was not in the companys payroll. For her efforts, she retained 4% in commissions from airline bookings, the remaining 3% going to TWS. Unlike an employee, who earns a fixed salary, she earned compensation in fluctuating amount depending on her booking successes.The fact that Sevilla had been designated branch manager does not make her a TWS employee. It appears that Sevilla is a bona fide travel agent herself, and she acquired an interest in the business entrusted to her.She also had assumed personal obligation for the operation thereof, holding herself solidary liable for the payment of rentals.Wherefore, TWS and Canilao are jointly and severally liable to indemnify the petitioner, Sevilla.

Brotherhood Unity (BLUM) vs. ZamoraFACTSBLUM filed a complaint charging San Miguel and some officers of unfair labor practice and illegal dismissal. Respondents moved for dismissal alleging that complainants are not their employees but of the independent contractor.Petitioners are workers employed at San Miguel, loading and piling empty bottles and shells. They first reported for work to the superintendent wherein the latter issues gate passes and they were provided with tools by the company.The warehousemen and checkers relays the orders to the group leaders who give orders to the workers. Work in the factory was neither regular nor continuous. It did not necessarily mean full 8 hours and they were neither paid overtime nor compensation for work on Sundays and holidays. Petitioners were paid every 10 days on a piece-rate basis according to the number of cartons they were able to load.

ISSUE:W/N ER-EE relationship exists between workers and San MiguelHELD:Yes. The existence of an independent contractor is established by the ff.criteria:1. whether or not contractor is carrying on an independent business2. nature and extent of work3. skill required4. term and duration of the relationship5. right to assign the performance of a specified piece of work6. control and supervision of the work to another7. employers power of hiring, firing and payment of workers8. control of premises9. duty to supply the tools10. mode of paymentJob contracting is permissible under the ff.conditions: 1) the contractor carries an independent business with his own contract under his own responsibility according to his own method; 2) the contractor has substantial capital in the form of tools, equipment and other materials.In the case at bar, the contractors have neither substantial capital nor investment. The tools are supplied by the company.The power of SMC to recommend penalties or dismissal of the piece workers is the strongest indication that the company has right to control as direct employer.As to the change of unfair labor practice because of SMCs refusal to bargain with petitioners, it is clear that the company had an existing collective bargaining with IBM union which is the recognized union at the respondents company.Thus, the petitioners cannot merely form a union and demand bargaining because there is a recognized bargaining representative of all employees at the company.

OPULENCIA ICE PLANT AND STORAGE AND/OR DR. MELCHOR OPULENCIA, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), LABOR ARBITER NUMERIANO VILLENA AND MANUEL P. ESITA, respondents.(G.R. No. L-98368 December 15, 1993)

Facts:

MANUEL P. ESITA was for twenty (20) years a compressor operator of Tiongson Ice Plant in San Pablo City. In 1980 he was hired as compressor operator-mechanic for the ice plants of petitioner Dr. Melchor Opulencia located in Tanauan, Batangas, and Calamba, Laguna. Initially assigned at the ice plant in Tanauan, Esita would work from seven o'clock in the morning to five o'clock in the afternoon receiving a daily wage of P35.00.

In 1986, Esita was transferred to the ice plant in Calamba, which was then undergoing overhauling, taking the place of compressor operator Lorenzo Eseta, who was relieved because he was already old and weak. For less than a month, Esita helped in the construction-remodeling of Dr. Opulencia's house.

In February 1989, for demanding the correct amount of wages due him, Esita was dismissed from service. Consequently, he filed with Sub-Regional Arbitration in San Pablo City, a complaint for illegal dismissal, underpayment, non-payment for overtime, legal holiday, premium for holiday and rest day, 13th month, separation/retirement pay and allowances against petitioners.

Petitioners deny that Esita is an employee. They claim that Esita could not have been employed in 1980 because the Tanauan ice plant was not in operation due to low voltage of electricity and that Esita was merely a helper/peon of one of the contractors they had engaged to do major repairs and renovation of the Tanauan ice plant in 1986. Petitioners further allege that when they had the Calamba ice plant repaired and expanded, Esita likewise rendered services in a similar capacity, and thus admitting that he worked as a helper/peon in the repair or remodeling of Dr. Opulencia's residence in Tanauan.

In December 1989, Labor Arbiter Villena rendered a decision 1 finding the existence of an employer-employee relationship between petitioners and Esita and accordingly directed them to pay him separation pay, underpayment of wages, allowances, 13th month, holiday, premium for holiday, and rest day pays. Almost a year after, NLRC affirmed the decision of Labor Arbiter Villena but reduced the monetary award as it was not proven that Esita worked every day including rest days and on the days before the legal holidays. In March 1991, petitioners' motion for reconsideration was denied.

Issue:

W/N there was an employee-employer relationship between Opulencia and Esita.

Ruling:

Yes. No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a written instrument.

On the claim that Esita's construction work could not ripen into a regular employment in the ice plant because the construction work was only temporary and unrelated to the ice-making business, needless to say, the one month spent by Esita in construction is insignificant compared to his nine-year service as compressor operator in determining the status of his employment as such, and considering further that it was Dr. Opulencia who requested Esita to work in the construction of his house.

In allowing Esita to stay in the premises of the ice plant and permitting him to cultivate crops to augment his income, there is no doubt that petitioners should be commended; however, in view of the existence of an employer-employee relationship as found by public respondents, we cannot treat humanitarian reasons as justification for emasculating or taking away the rights and privileges of employees granted by law. Benevolence, it is said, does not operate as a license to circumvent labor laws. If petitioners were genuinely altruistic in extending to their employees privileges that are not even required by law, then there is no reason why they should not be required to give their employees what they are entitled to receive.

Moreover, as found by public respondents, Esita was enjoying the same privileges granted to the other employees of petitioners, so that in thus treating Esita, he cannot be considered any less than a legitimate employee of petitioners.

ZAMUDIO VS. NLRCGR NO. 76723March 25, 1990(Employee-Employer Relationship)Facts:

Petitioners rendered services essential for the cultivation of respondents farm. While the services were not continuous in the sense that they were not rendered everyday throughout the year, as is the nature of farm work, petitioners had never stopped working for respondent from year to year from the time he hired them to the time he dismissed.

Issue:

Are the petitioners considered as employees?

Ruling:

The nature of their employment, i.e. Pakyao basis, does not make petitioner independent contractors. Pakyao workers are considered employees as long as the employer exercises control over the means by which such workers are to perform their work inside private respondents farm, the latter necessarily exercised control over the performed by petitioners.

The seasonal nature of petitioners work does not detract from the conclusion that employer employee relationship exits. Seasonal workers whose work is not merely for the duration of the season, but who are rehired every working season are considered regular employees. The circumstances that petitioners do not apears in respondents payroll does not destroy the employer employee relationship between them. Omission of petitioners in the payroll was not within their control, they had no hand in the preparation of the payroll. This circumstance, even if true, cannot be taken against petitioners.

FEATI UNIVERSITY, petitioner,vs.HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondents.Facts:The private respondent wrote a letter to president of petitioner informing her of the organization of the Faculty Club into a registered labor union. President of the Faculty Club sent another letter containing twenty-six demands that have connection with the employment of the members of the Faculty Club by the University, and requesting an answer within ten days from receipt thereof. The President of the University answered the two letters, requesting that she be given at least thirty days to study thoroughly the different phases of the demands.Meanwhile counsel for the University, to whom the demands were referred, wrote a letter to the President of the Faculty Club demanding proof of its majority status and designation as a bargaining representative. President of the Faculty Club filed a notice of strike with the Bureau of Labor alleging as reason therefore the refusal of the University to bargain collectively. The parties were called to conferences but efforts to conciliate them failed.Members of the Faculty Club declared a strike and established picket lines in the premises of the University, resulting in the disruption of classes in the University. President of the Philippines certified to the Court of Industrial Relations the dispute between the management of the University and the Faculty Club pursuant to the provisions of Section 10 of Republic Act No. 875.The Judge endeavored to reconcile the part and it was agreed upon that the striking faculty members would return to work and the University would readmit them under a status quo arrangement. On that very same day, however, the University, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no jurisdiction over the case, because (1) the Industrial Peace Act is not applicable to the University, it being an educational institution, nor to the members of the Faculty Club, they being independent contractors; and (2) the presidential certification is violative of Section 10 of the Industrial Peace Act, as the University is not an industrial establishment and there was no industrial dispute which could be certified to the CIR.The respondent judge denied the motion to dismiss. The University filed a motion for reconsideration by the CIRen banc, without the motion for reconsideration having been acted upon by the CIRen banc, respondent Judge set the case for hearing but the University moved the cancellation of the said hearing upon the ground that the courten bancshould first hear the motion for reconsideration and resolve the issues raised therein before the case is heard on the merits but denied.Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of court certain parties, alleging that the University refused to accept back to work the returning strikers, in violation of the return-to-work order.The University filed its opposition to the petition for contempt by way of special defense that there was still the motion for reconsideration which had not yet been acted upon by the CIRen banc. Hence, this petition.Issue:Whether or not FEATI is an employer within the purview of the Industrial Peace Act.Held:The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term employer include any person acting in the interest of an employer, directly or indirectly, but shall not include any labor organization (otherwise than when acting as an employer) or any one acting in the capacity or agent of such labor organization.In this case, the University is operated for profit hence included in the term of employer. Professors and instructors, who are under contract to teach particular courses and are paid for their services, are employees under the Industrial Peace Act.Professors and instructors are not independent contractors. university controls the work of the members of its faculty; that a university prescribes the courses or subjects that professors teach, and when and where to teach; that the professors work is characterized by regularity and continuity for a fixed duration; that professors are compensated for their services by wages and salaries, rather than by profits; that the professors and/or instructors cannot substitute others to do their work without the consent of the university; and that the professors can be laid off if their work is found not satisfactory. All these indicate that the university has control over their work; and professors are, therefore, employees and not independent contractors.

Case Digest on Jardin v. NLRC, G.R. No. 119268, February 23, 2000- Labor LawQ: Union M is an affiliate of Federation U. A bitter disagreement ensued between the Federation U and the Union Mculminating in the latters declaration of general autonomy from the former. The federation asked the company to stop the remittance of Union Ms share in the education funds. The federation called a meeting placing Union M under trusteeship and appointing an administrator. Officers of Union M received letters from the administrator requiring them to explain why they should not be removed from their office and expelled from union membership. The officers were expelled from the federation. The federation then advised the company of the expulsion of the 30 union officers and demanded their separation pursuant to the Union Security Clause in the CBA. The Federation filed a notice of strike with the NCMB to compel the company to effect the immediate termination of the expelled union officers. Under the pressure of a strike, the company terminated the 30 union officers from employment. Union M filed a notice of strike on the grounds of discrimination; interference; mass dismissal of union officers and shop stewards; threats, coercion and intimidation; and union busting. Members of Union M prayed for the suspension of the effects of their termination. Secretary Drilon dismissed the petition stating it was a intra-union matter. Later, 78 union shop stewards were placed under preventive suspension. The union members staged a walk-out and officially declared a strike that afternoon. The strike was attended by violence. Was the dismissal of the union officers illegal?A: Yes. The charges against respondent company proceeded mainly from the termination of the union officers upon the demand of the federation pursuant to the union security clause. Although the union security clause may be validly enforced, such must comply with due process. In this case, the union officers were expelled for allegedly committing acts of disloyalty to the federation. The company did not inquire into the cause of the expulsion and merely relied upon the federations allegations. The issue is not a purely intra-union matter as it was later on converted into a termination dispute when the company dismissed the petitioners from work without the benefit of a separate notice and hearing. As to the act of disaffiliation by the local union; it is settled that a local union has the right to disaffiliate from its mother union in the absence of specific provisions in the federations constitution prohibiting such. There was no such provision in federation ULGWPs constitution.Q: In the above case, was the strike illegal?A: No. As to the legality of the strike; it was based on the termination dispute and petitioners believed in good faith that in dismissing them, the company was guilty of ULP. The no-strike, no lockout provision in the CBA can only be invoked when the strike is economic. As to the violence, both parties agreed that the violence was not attributed to the striking employees alone as the company itself hired men to pacify the strikers. Such violence cannot be a ground for declaring the strike illegal.

Maraguinot v.NLRCFACTS:Petitioner maintains that he was employed by respondents as part of the filming crew. He was later promoted as an electrician. Petitioners tasks contained of loading movie equipment in the shoothing area. Petitioners sought the assistance of their supervisor, Cesario, to facilitate their request that respondents adjust their salary in accordance with the minimum wage law. Mrs. Cesario informed petitioners that del Rosario would agree to increase their salary only if they signed a blank employment contract. As petitioner refused to sign, respondents forced Enero (the other petitioner who worked as a crew member) to go on leave. However, when he reported to work, respondent refused to take him back. Maraguinot was dropped from the company payroll but when he returned, he was again asked to sign a blank employment contract, and when he still refused, respondents terminated his services. Petitioners thus sued for illegal dismissal.

Private respondents assert that they contract persons called producers to produce or make movies for private respondents and contend that petitioners are project employees of the associate producers, who act as independent contractors. Thus, there is no ER-EE relationship.However, petitioners cited that their performance of activities is necessary in the usual trade or business of respondents and their work in continuous.

ISSUE:

W/N ER-EE relationship exists

HELD:

Yes. With regards to VIVAs contention that it does not make movies but merely distributes motion pictures, there is no sufficient proof to prove this contention. In respect to respondents allegation that petitioners are project employees, it is a settled rule that the contracting out of labor is allowed only in case of job contracting. However, assuming that the associate producers are job contactors, they must then be engaged in the business of making motion pictures. Associate producers must have tools necessary to make motion pictures. However, the associate producers in this case have none of these. The movie-making equipment are supplied to the producers and owned by VIVA. Thus, it is clear that the associate producer merely leases the equipment from VIVA.

In addition, the associate producers of VIVA cannot be considered labor-only contractors as they did not supply, recruit nor hire the workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew members. Thus, the relationship between VIVA and its producers or associate producers seems to be that of agency.

With regards to the issue of illegal dismissal, petitioners assert that they were regular employees who were illegally dismissed. Petitioners in this case had already attained the status of regular employees in view of VIVAs conduct. Thus, petitioners are entitled to back wages.

A project employee or a member of a work pool may acquire the status of a regular employee when:

a. there is a continuous rehiring of project employees even after a cessation of projectb. the tasks performed by the alleged project employee are vital and necessary to the business of employerc. The tasks of petitioners in loading movie equipment and returning it to VIVAs warehouse and fixing the lighting system were vital, necessary and indispensable to the usual business or trade of the employer. Wherefore, petition is granted.