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Topic 1 Cases

1. [G.R. No. 126383. November 28, 1997.]

SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA. CONSUELOMAQUILING, LEONARDO MARTINEZ, DOMINGO ELA, JR., RODOLFO CALUCIN, JR.,PERLA MENDOZA, REX RAPHAEL REYES, ROGELIO BELMONTE, AND 375 OTHEREMPLOYEE-UNION MEMBERS, petitioners, vs. NATIONAL LABOR RELATIONSCOMMISSION, and SAN JUAN DE DIOS HOSPITAL, respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; REPUBLIC ACT NO. 5901 (AN ACT PRESCRIBING FORTY HOURS A WEEK OF LABORFOR GOVERNMENT AND PRIVATE HOSPITALSOR CLINIC PERSONNEL); REPEALED WITH THE PASSAGE OF THE LABOR CODE ON MAY 1, 1974. Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901, otherwise known as "An Act Prescribing Forty Hours a Week of Labor for Government and Private Hospitals or Clinic Personnel", enacted on June 21, 1969. Reliance on Republic Act No.5901, however is misplaced for the said statute, as correctly ruled by respondent NLRC, has long been repealed with the passage of the Labor Code on May 1, 1974, Article 302 of which explicitly provides: "All labor laws not adopted as part of this Code either directly or by reference are repealed. All provisions of existing laws, orders, decrees, rules and regulations inconsistent herewith are likewise repealed."2. ID.; LABOR CODE; ARTICLE 83 THEREOF CONSTRUED; ADMINISTRATIVEINTERPRETATION; THE COURT MAY STRIKE DOWN INTERPRETATION THAT DEVIATES FROMTHE PROVISION OF THE STATUTE. Only Article 83 of the Labor Code which appears to have substantially incorporated or reproduced the basic provisions of Republic Act No. 5901 may support Policy Instructions No. 54 on which the latter's validity may be gauged. A cursory reading of Article 83 of the Labor Code betrays petitioners' position that "hospital employees" are entitled to "a full weekly salary with paid two (2) days' off if they have completed the 40-hours/5-day work week". What Article 83 merely provides are: (1) the regular office hour of eight hours a day, five days per week for health personnel, and (2) where the exigencies of service require that health personnel work for six days or forty-eight hours then such health personnel shall be entitled to an additional compensation of at least thirty percent of the irregular wage for work on the sixth day. There is nothing in the law that supports then Secretary of Labor's assertion that "personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hours/5-day work week in any given workweek." Needless to say, the Secretary of Labor exceeded his authority by including a two days off with pay in contravention of the clear mandate of the statute. Such act the Court shall not countenance. Administrative interpretation of the law is at best merely advisory, and the Court will not hesitate to strike down an administrative interpretation that deviates from the provision of the statute.3. ID.; SECRETARY OF LABOR'S POLICY INSTRUCTIONS NO. 54; DECLARED VOID BY THE COURT; RATIONALE. Even if the Court was to subscribe with petitioner's erroneous assertion that Republic Act No. 5901 has neither been amended nor repealed by the Labor Code, we nevertheless find Policy Instructions No. 54 invalid. A perusal of Republic Act No.5901 reveals nothing therein that gives two days off with pay for health personnel whocomplete a 40 or 5-day workweek. In fact, the Explanatory Note of House Bill No. 16630 (later passed into law as Republic Act No. 5901) explicitly states that the bill's sole

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purpose is to shorten the working hours of health personnel and not to dole out a two-days off with pay. Further, petitioners' position is also negated by the very rules and regulations promulgated by the Bureau of Labor Standards which implement Republic Act No. 5901. If petitioners are entitled to two days off with pay, then there appears to be no sense at all why Section 15 of the implementing rules grants additional compensation equivalent to the regular rate plus at least twenty-five percent thereof for work performed on Sunday to health personnel, or an" additional straight-time pay which must be equivalent at least to the regular rate" "[f]or work performed in excess of forty hours a week . . . Policy Instructions No. 54 to the Court's mind unduly extended the statute. The Secretary of Labor moreover erred in invoking the "spirit and intent" of Republic Act No. 5901 and Article 83 of the Labor Code for it is an elementary rule of statutory construction that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. No additions or revisions may be permitted. Policy Instructions No. 54 being inconsistent with and repugnant to the provisions of Article 83 of the Labor Code, as well as to Republic Act No. 5901, should be, as it is hereby; declared void.

FACTS: The rank-and-file employee-union officers and members of San Juan De Dios Hospital Employees Association, sent on July 08, 1991, a letter with attached support signatures requesting and pleading for the expeditious implementation and payment by respondent" Juan De Dios Hospital "of the '40-HOURS/5-DAY WORKWEEK' with compensable weekly two (2) days off provided for by Republic Act 5901 as clarified for enforcement by the Secretary of Labor's Policy Instructions No. 54 dated April 12, 1988." Respondent hospital failed to give a favorable response; thus, petitioners filed a complaint regarding their "claims for statutory benefits under the above-cited law and policy issuance. The Labor Arbiter dismissed the complaint. Petitioners appealed before public respondent National Labor Relations Commission (NLRC), which affirmed the Labor Arbiter's decision. Petitioners' subsequent motion for reconsideration was denied; hence, this petition under Rule 65 of the Rules of Court ascribing grave abuse of discretion on the part of NLRC in concluding that Policy Instructions No. 54 "proceeds from a wrong interpretation of RA 5901" and Article 83 of the Labor Code.

ISSUE: Whether Policy Instructions No. 54 issued by then Labor Secretary Franklin M. Drilon is valid or not?

HELD: Content of POLICY INSTRUCTIONS NO. 54 provides personnel in subject hospital and clinics entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-dayworkweek in any given workweek which was declared void by SC. We note that Policy Instruction No. 54 relies and purports to implement Republic Act No. 5901, otherwise known as "An Act Prescribing Forty Hours a Week of Labor for Government and Private Hospitals or Clinic Personnel", enacted on June 21, 1969. Reliance on Republic Act No.5901, however, is misplaced for the said statute, as correctly ruled by respondent NLRC, has long been repealed with the passage of the Labor Code on May 1, 1974, Article 302 of which explicitly provides: "All labor laws not adopted as part of this Code either directly or by reference are hereby repealed. All provisions of existing laws, orders, decree, rules and regulations inconsistent herewith are likewise repealed." Accordingly, only Article 83 of the Labor Code which appears to have

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substantially incorporated or reproduced the basic provisions of Republic Act No. 5901 may support Policy Instructions No. 54 on which the latter's validity may be gauged. A cursory reading of Article 83 of the Labor Code betrays petitioners' position that "hospital employees" are entitled to "a full weekly salary with paid two (2) days' off if they have completed the 40-hour/5-day workweek". What Article 83 merely provides are: (1) the regular office hour of eight hours a day, five days per week for health personnel, and (2) where the exigencies of service require that health personnel work for six days or forty-eight hours then such health personnel shall be entitled to an additional compensation of at least thirty percent of their regular wage for work on the sixth day. There is nothing in the law that supports then Secretary of Labor's assertion that "personnel in subject hospitals and clinics are entitled to full weekly wage for seven (7) days if they have completed the 40-hour/5-day workweek in any given workweek". Needless to say, the Secretary of Labor exceeded his authority by including two days off with pay in contravention of the clear mandate of the statute. Such act the Court shall not countenance. Administrative interpretation of the law, we reiterate, is at best merely advisory, and the Court will not hesitate to strike down an administrative interpretation that deviates from the provision of the statute. Indeed, even if we were to subscribe with petitioners' erroneous assertion that Republic Act No.5901 has neither been amended nor repealed by the Labor Code, we nevertheless find Policy Instructions No. 54 invalid. A perusal of Republic Act No. 5901 reveals nothing therein that gives two days off with pay for health personnel who complete a 40-hour work or 5-dayworkweek. In fact, the Explanatory Note of House Bill No. 16630 (later passed into law as Republic Act No. 5901) explicitly states that the bill's sole purpose is to shorten the working hours of health personnel and not to dole out a two days off with pay. The Secretary of Labor moreover erred in invoking the "spirit and intent" of Republic Act No.5901 and Article 83 of the Labor Code for it is an elementary rule of statutory construction that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. 9 No additions or revisions may be permitted. Policy Instructions No. 54 being inconsistent with and repugnant to the provision of Article 83 of the Labor Code, as well as to Republic Act No. 5901, should be, as it is hereby, declared void.

2. [G.R. No. 101279. August 6, 1992.]PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. petitioner, vs. HON.RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, andJOSE N. SARMIENTO, as Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents.

FACTS: DOLE Secretary Ruben D. Torres issued Department Order No. 16 Series of 1991 temporarily suspending the recruitment by private employment agencies of Filipino domestic helpers going to Hong Kong . As a result of the department order DOLE, through the POEA took over the business of deploying Hong Kong bound workers. The petitioner, PASEI, the largest organization of private employment and recruitment agencies duly licensed and authorized by the POEA to engage in the business of obtaining overseas employment for Filipino land-based workers filed a petition for prohibition to annul the aforementioned order and to prohibit implementation.

ISSUES:

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(1) Whether or not respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing said circulars;(2) whether or not the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair and oppressive; and(3) Whether or not the requirements of publication and filing with the Office of the National Administrative Register were not complied with.

HELD: FIRST, the respondents acted well within in their authority and did not commit grave abuse of discretion. This is because Article 36 (LC) clearly grants the Labor Secretary to restrict and regulate recruitment and placement activities, to wit: Art. 36. Regulatory Power. The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this title [Regulation of Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this title.

SECOND, the vesture of quasi-legislative and quasi-judicial powers in administrative bodies is constitutional. It is necessitated by the growing complexities of the modern society.

THIRD, the orders and circulars issued are however, invalid and unenforceable. The reason is the lack of proper publication and filing in the Office of the National Administrative Registrar as required in Article 2 of the Civil Code to wit: Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the Official Gazette, unless it is otherwise provided; Article 5 of the Labor Code to wit: Art. 5. Rules and Regulations. The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation; and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 which provide: Sec. 3. Filing. (1) every agency shall file with the University of the Philippines Law Center, three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months shall not thereafter be the basis of any sanction against any party or persons. (Chapter 2, Book VII of the Administrative Code of 1987.)Sec. 4. Effectivity. In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them. (Chapter 2, Book VII of the Administrative Code of 1987). Prohibition granted.

3. [G.R. No. 162308, November 22, 2006]G & M PHILIPPINES, INC., PETITIONER, VS. ROMIL V. CUAMBOT, RESPONDENT.

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FACTS: Cuambot was an overseas worker who was deployed to Saudi Arabia to work as a car bodybuilder in Al Waha Workshop in Unaizah City, by petitioner G & M Philippines. Before his two-year contract was terminated Cuambot returned to the Philippines where he filed a complaint in the NLRC against his recruitment agency, herein petitioner, for unpaid wages, withheld salaries, refund of plane ticket and repatriation bond, later amended to include illegal dismissal, claim for the unexpired portion of his employment contract, actual, exemplary and moral damages, and attorney’s fees.

Petitioner, in defense, presented copies of 7 pay slips issued in favor of Cuambot. Cuambot countered that his signatures in the pays lips were forged and further claims that he never got his salaries except only for the SAR100 as monthly allowance. G&M answered back by saying that there was great possibility that Cuambot had changed his signature while abroad so that he could file a complaint or illegal dismissal upon his return.

ISSUES: 1. whether or not the respondent’s signatures are mere forgeries2. Whether respondent executed the resignation letter

HELD: After examination of the evidence on record, the petition must fail.The petitioner’s attempts at establishing its case are not enough to convince the court of the veracity of its claims. Amongst other things, the petitioner failed to submit the original copies of the pay slips and the resignation letter to prove that they were actually penned by respondent, they failed to submit an original copy of the employment contract to prove that they had actually given a copy of such to respondent for him to sign, and a cursory look at the resignation letter and the handwritten pays lips show that they were written by one person. Indeed, the rule is that all doubts in the implementation and the interpretation of the Labor Code shall be resolved in favor of labor, in order to give effect to the policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers, and to assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work. It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the former’s favor. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. Moreover, one who pleads payment has the burden of proving it. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show that overtime, differentials, service incentive leave, and other claims of workers have been paid are not in the possession of the worker but in the custody and absolute control of the employer. Thus, the burden of showing with legal certainty that the obligation has been discharged with payment falls on the debtor, in accordance with the rule that one who pleads payment has the burden of proving it. Only when the debtor introduces evidence that the obligation has been extinguished does the burden shift to the creditor, who is then under a duty of producing

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evidence to show why payment does not extinguish the obligation In this case, petitioner was unable to present ample evidence to prove its claim that respondent had received all his salaries and benefits in full. Petition denied for lack of merit.

[G.R. No. 138051 June 10, 2004] JOSE Y. SONZA, petitioner,vs. respondent. FACTS

ABS-CBN BROADCASTINGCORPORATION,

ABS-CBN signed an Agreement with the Mel and Jay Management and Development Corporation (MJMDC). Referred to as AGENT , MJMDC agreed to provide Jay Sonza s services exclusively to ABS-CBN as talent. After more than two years, Sonza as agent of MJMDC wrote a letter to ABS-CBN notifying them of the former s intention to rescind the agreement. Sonza waived and renounced the recovery of the remaining amounts stipulated in the agreement but reserved the right to seek the recovery of other benefits under the same. Later, SONZA filed a complaint against ABS-CBN before the DOLE-NCR, alleging that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan ("ESOP"). In response ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties. Meanwhile, pursuant to the Agreement, ABS-CBN continued to remit SONZA s monthly talent fees through his account at PCIBank. ABS-CBN later opened a new account with the same bank where ABS-CBN deposited SONZA s talent fees and other payments due him under the Agreement.

ISSUE : Whether or not there existed an employee-employer relationship between Sonza and ABS-CBN.

HELD: Applying the four fold test, there is no employee-employer relationship. The elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b)the payment of wages; (c) the power of dismissal; and (d) the employer s power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called "control test", is the most important element.

A. Selection and Engagement of Employee Sonza says that independent contractors often present themselves as persons distinguishable form other employees because of their unique skills, expertise or talent. He however is not such because of the fact that there are other broadcasters with similar experience and qualification. This is not independent contractorship therefore because of the presence of other such capable individuals. The Supreme Court held that the selection of Sonza because of unique expertise and skills is a circumstance indicative, but not conclusive of an independent contractual relationship. Also, if indeed Sonza did not possess such skills, ABS CBN would not have entered into the Agreement but would have hired him through the personnel department just like an ordinary employee. In any event, the method of selecting and engaging does not conclusively determine his status.

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B. Payment of Wages Sonza claims that because his monthly fees all went to him and not to MJMDC as well as all the benefits and privileges indicate his status as employee. The court said that the compensation and the mode of payment was all a result of negotiations that led to the Agreement. If indeed Sonza were an employee, there would be no need for negotiation because these benefits are deemed incorporated into the contract. His talent fees are likewise so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer-employee relationship. Also, the power to bargain talent fees is a circumstance indicative, but not conclusive, of an independent contractual relationship.

C. POWER OF DISMISSAL For violation of any provision of the Agreement, either party may terminate their relationship. Sonza failed to show that ABS CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided under labor laws. In fact, illustrative of the power of the Agreement, ABS CBN continued to pay Sonza monthly fees even of they suffered losses because it was what the stipulations commanded.

D. POWER OF CONTROL This last test is based on the extent the hirer has control over the worker. The greater the supervision and control over the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor.

First, Sonza s argument that ABS CBN exercised control over the means and methods of his work is misplaced. He was engaged to co-host a TV program and nothing more. How he delivered is lines, appeared on television, and sounded on the radio were outside the control of ABS CBN. He did not have to render 8 hours of work daily. The only prohibition was that he could not criticize ABS CBN or its interests. Obviously SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. Clearly, ABS-CBN did not exercise control over the means and methods of performance of SONZA s work. Sonza also claims that ABS CBN s power not to broadcast his show tells of its power over the methods and means of his work. The argument fails because although ABS CBN had this right

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under the agreement, it could not even dismiss nor discipline Sonza because it still had to continue paying him. This shows that ABS CBN s control extended only to the result of Sonza s work.

Next, Sonza claims that ABS CBN exercise control by providing him with all the equipment and crew. However, these are not the tools and instrumentalities SONZA needed to perform his job. What SONZA principally needed were his talent or skills and the costumes necessary for his appearance. SONZA urges us to rule that he was ABS-CBN s employee because ABS-CBN subjected him to its rules and standards of performance. The Agreement stipulates that SONZA shall abide with the rules and standards of performance "covering talents" of ABS-CBN. The Agreement does not require SONZA to comply with the rules and standards of performance prescribed for employees of ABS-CBN. In this case, SONZA failed to show that these rules controlled his performance. We find that these general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating television and radio programs that comply with standards of the industry. Lastly, SONZA insists that the "exclusivity clause" in the Agreement is the most extreme form of control which ABS-CBN exercised over him. This argument is futile. Even an independent contractor can validly provide his services exclusively to the hiring party. MJMDC as AGENT of SONZA Sonza says that it is wrong to say that he is a talent of MJMDC. He insists that MJMDC is a labor-only contractor and ABS CBN is his employer.

In a labor-only contract, there are three parties involved: (1) the "labor-only" contractor; (2) the employee who is ostensibly under the employ of the "labor-only" contractor; and (3) the principal who is deemed the real employer. Under this scheme, the "labor-only" contractor is the agent of the principal. The law makes the principal responsible to the employees of the "labor-only contractor" as if the principal itself directly hired or employed the employees. These circumstances are not present in this case. There are essentially only two parties involved under the Agreement, namely, SONZA and ABSCBN. MJMDC merely acted as SONZA s agent. Talents as Independent Contractors ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like SONZA as independent contractors. SONZA argues that if such practice exists, it is void for violating the right of labor to security of tenure. The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer employee relationship under labor laws. Not every performance of services for a fee creates an employer-employee relationship. To hold that every person who renders services to another for a fee is an employee - to give meaning to the security of tenure clause - will lead to absurd results. Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an independent contractor. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft. This Court will not interpret the right of labor to security of tenure to compel artists and talents to render their services only as employees. If radio and television program hosts can render their services only as employees, the station owners and managers can dictate to the radio and television hosts what they say in their shows. This is not conducive to freedom of the press. Petition denied.