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DOLE Secretary Ruben D. Torres issued Department Order No. 16 Series of 1991 temporarily
suspending the recruitment by private employment agencies of ƠFilipino domestic helpers going
to Hong Kongơ. 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.
(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.
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. Ɯ 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 Gazatte, unless it is otherwise provided;
Article 5 of the Labor Code to wit:
Art. 5. Rules and Regulations. Ɯ 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. Ɯ (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. Ɯ 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. c 56$ -. #
Cuambot was an overseas worker who was deployed to Saudi Arabia to work as a car body
builder 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
attorneyƞs fees. Petitioner, in defense, presented copies of 7 payslips issued in favor of Cuambot. Cuambot
countered that his signatures in the payslips 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.
1. whether or not the respondentƞs signatures are mere forgeries
2. whether respondent executed the resignation letter
After examination of the evidence on record, the petition must fail.
The petitionerƞs 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 payslips 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
Ơafford protection to labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations between workers and employers,ơ
and to Ơassure 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 formerƞs 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 ƛ
which will show that overtime, differentials, service incentive leave, and other claims of workers
have been paid ƛ 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 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. c 5672" 8
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FACTS &:& &' ABS-CBN signed an Agreement with the Mel and Jay Management and Development
Corporation (MJMDC). Referred to as ƠAGENTơ, MJMDC agreed to provide Jay Sonzaƞs 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 formerƞs 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 SONZAƞs monthly talent fees through his account at PCIBank. ABS-CBN later
opened a new account with the same bank where ABS-CBN deposited SONZAƞs talent fees and
other payments due him under the Agreement.
Whether or not there existed an employee-employer relationship between Sonza and ABS-CBN.
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 employerƞs 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
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.
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
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 ƛ the less control the hirer exercises, the more likely
the worker is considered an independent contractor.
First, Sonzaƞs 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 SONZAƞs work.
Sonza also claims that ABS CBNƞs power not to broadcast his show tells of its power over the
methods and means of his work. The argument fails because althought ABS CBN had this right under the agreement, it could not even dismiss nor discipline Sonza because it still had to
continue paying him. This shows that ABS CBNƞs control extended only to the result of Sonzaƞs
Next, Sonza claims that ABS CBN exercise control by providing him with all the equipment and
crew. However, these are not the Ơtools and instrumentalitiesơ SONZA needed to perform his
job. What SONZA principally needed were his talent or skills and the costumes necessary for his
SONZA urges us to rule that he was ABS-CBNƞs 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
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
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
Ơlabor-onlyơ 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 SONZAƞs 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 employeremployee 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
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. c 6
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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,
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.
Whether or not Limjoco was an independent contractor or an employee of Encyclopedia
In 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 employeeƞs conduct. Of the above, control
of employeeƞs conduct is commonly regarded as the most crucial and determinative factor of
the 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 dealerƞs performance. Even though
petitioner had fixed the prices of the products for reason of uniformity and that Limjoco cannot
alter 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 of
the Farmerƞs Rural Bank. Had he been an employee of the petioner, he could not be employed
elsewhere and he would be required to devote full time for...
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- Fall '17
- Law, petitioner, employer-employee relationship