Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2014-07

  • Prove That An Employer-Employee Relationship Exists

    If you find yourself in a situation where the other party denies having an employer-employee relationship with you, make sure that you prove the following:

    • it had the power to select you to be an employee;
    • it paid your wages;
    • it had the power to dismiss you; and
    • it exercised control of the methods and results by which the your work is accomplished.

    In one case, the Supreme Court did not grant the claims of the complainants because they were not able to prove the existence of the mentioned elements. It said:


    “It must be recalled that when Belleza was the canteen concessionaire from 1993 to 1996, herein petitioners Daisog and Dimalanta were and continuously working thereat. When Catalan took over the management thereof in May 1997 they also continued their employment thereat.

    “However, when private respondent Ma. Theresa Ayuson took over the canteen management on April 29, 1999, she offered to Daisog and Dimalanta to continue working under her new management but the latter refused and they did not accept the separation pay being offered to them.

    “Based on the foregoing factual backdrop, it could be deduced that petitioners Daisog and Dimalanta’s employers if at all were Belleza and Catalan and not herein private respondent Ma. Theresa Ayuson.

    “However, Belleza and Catalan could not be held liable since they were not impleaded to the complaint. Neither was there evidence which directly established that petitioners Daisog and Dimalanta were employees of private respondent Cainta Coliseum which is managed by co-private respondent Ken K.C. Yu. Likewise, the record is bereft of any evidence which showed that private respondents Cainta Coliseum and/or Ken K.C. Yu and Maria Theresa Ayuson were the one who hired petitioners Daisog and Dimalanta; neither did it prove that private respondents have the power to control the conduct of petitioners. As also found out by public respondent which read:


    “‘Contrary to the allegation of complainants, the alleged payrolls do not bear the name of respondent Kenneth Yu, their alleged employer. Respondents denied that there was a signature of Kenneth Yu on the supposed payrolls. What is established in the records is that complainants are employees of canteen concessionaires operating in the respondent coliseum.’ x x x

    x x x

    “Admittedly petitioners Daisog and Dimalanta miserably failed to show by convincing evidence that there exists an employer-employee relationship between them and private respondents.”

    (Emphasis, mine.)

    Further reading:

    • Carmelita V. Dimalanta and Arturo C. Daisog v. Caita Coliseum, Inc. Ken K.C. Yu, Owner/President/General Manager, and Maria Theresa Ayuson as responsible officers, and National Labor Relations Commission, G.R. No. 161058, July 30, 2014.

  • Not Every Form of Control is Indicative of Employer-Employee Relationship

    If a real estate agent’s performance is subject to company rules, regulations, code of ethics, and periodic evaluation, does this mean that it has passed the control test for determining the existence of employer-employee relationship?

    The Supreme Court in a case said no. “Not every form of control is indicative of employer-employee relationship. A person who performs work for another and is subjected to its rules, regulations, and code of ethics does not necessarily become an employee.”

    In this case, it was found that the said rules, regulations, code of ethics, and periodic evaluation were found to not involve any control over the means and methods by which the real estate agent was to perform his job. In other words, the real estate company’s acts of:

    • Fixing prices;
    • Imposing requirements on prospective buyers;
    • Laying down the terms and conditions of the sale, including the mode of payment, which the independent contractors must follow;
    • Allocating inventories among its independent contractors;
    • Determining who has priority in selling the same;
    • Granting commission or allowance based on predetermined criteria; and
    • Regularly monitoring the result of their marketing and sales efforts

    do not pertain to the means and methods of how the said real estate agent was to perform and accomplish his task of soliciting sales. Neither do they dictate upon him the details of how he would solicit sales or the manner as to how he would transact business with prospective clients.

    Furthermore, it was likewise found that the said agent did not even cite specific rules, regulations or codes of ethics that supposedly imposed control on his means and methods of soliciting sales and dealing with prospective clients. Except for soliciting sales, the real estate company did not assign other tasks to him. He had full control over the means and methods of accomplishing his tasks as he can “solicit sales at any time and by any manner which deem appropriate and necessary.” He performed his tasks on his own account free from the control and direction of real estate company in all matters connected therewith, except as to the results thereof.

    The Court in declaring the absence of employer-employee relationship between them concluded: “As long as the level of control does not interfere with the means and methods of accomplishing the assigned tasks, the rules imposed by the hiring party on the hired party do not amount to the labor law concept of control that is indicative of employer-employee relationship.”

    Further reading:

    • Royale Homes Marketing Corporation v. Fidel P. Alcantara, G.R. No. 195190, July 28, 2014.

  • Do Your Employees Know Your Company Policies?

    The employer hired 2 sales ladies, who were assigned to a particular branch office. One day, the employer discovered that proceeds from the sales for two particular days were missing in the said branch. Upon investigation, it was found that the loss of the money was a result of an inside job. The employer then required the said employees to explain in writing why they should not be dismissed for having violated a company policy of prohibiting sales proceeds to be kept in the cash register. The employees submitted their written explanations, where they both denied the existence, and the knowledge of the existence, of such company policy. Despite this, they were dismissed. Thus, they filed a case for Illegal Dismissal against their employer.

    The Supreme Court in this case ruled in favor of the employees. It said that the employer must show by substantial evidence:

    “1) the existence of the subject company policy;

    “2) the dismissed employee must have been properly informed of said policy;

    “3) actions or omissions on the part of the dismissed employee manifesting deliberate refusal or wilful disregard of said company policy; and

    “4) such actions or omissions have occurred repeatedly.”

    With regard to the first and second points, although the employer claimed that the said company policy has existed for some time via a memorandum, the Court found that there was nothing in the record to indicate that the employees were informed of it. According to the Court, the employer could have easily produced a copy of the said memorandum bearing the signatures of the employees to show that, indeed, they have been notified of the existence of said company rule and that they have received, read, and understood the same. It could likewise have simply called some of its employees to testify on the rule’s existence, dissemination, and strict implementation. However, the record also show that it did not do so.

    Since the employer was not able to show a clear, valid, and legal cause for the employment termination, the Court thus declared the employees as illegally dismissed.

    Thoughts:

    A few weeks ago, I mentioned a case similar to this one in that the employee also argued that he did not know that there was a parking policy in his company (See Have You Read Your Employee Code of Conduct?). In other words, both employees assert that they didn’t know that there was a certain company policy that governed their actions.

    Note, however, the distinctions. In this present case, the employees would not have known of the existence of the specific company policy, simply because it was not properly disseminated to them. In the earlier case, the company policy on parking was clearly written down on the tickets that the employee used. This is why the Court did not accept the employee’s defense of lack of knowledge of the same.

    Further reading:

    • FLP Enterprises Inc.-Francesco Shoes/Emilio Francisco B. Pajaro v. Ma. Joeralyn D. Dela Cruz and Vilma Malunes, G.R. No. 198093, July 28, 2014.

  • Mere Reliance on a Causality Presumption

    A seafarer was hired as an assistant butcher on a certain cruise ship. On 22 August 2005, he entered into a 12-month contract of employment with the respondent incorporating the Standard Terms and Conditions the Employment of Filipino Seafarers on Board Ocean-Going Vessels (Standard Employment Contract) as prescribed by the Philippine Overseas Employment Administration (POEA). Having passed the medical exam and having been declared fit for work, he boarded the said ship on 26 August 2005.

    During his employment, he was confined in a hospital sometime in December 2005 after suffering a month of rectal bleeding and lower abdominal pain. Soon he was medically repatriated, and upon arrival in the Philippines on 24 December 2005, he was immediately confined in a hospital, where he was found to be suffering from stage IV colon cancer. After months of confinement and treatment for his illness, he passed away.

    His widow thereafter filed a Complaint with the National Labor Relations Commission (NLRC) for death benefits, and the case went up to the Supreme Court.

    The Court denied her claims. The basis for the denial was the absence of showing that the cause of his death was one of those covered by the POEA Standard Employment Contract, and that the said cause was not work-related. It found that the Standard Employment Contract (under Section 32-A) lists down certain types of illnesses as compensable, but colon cancer is not one of them. And although there exists a disputable presumption of compensability (under Section 20 B (4)) for illnesses not listed therein, the Court ruled that it should be read in relation to said Section 32-A.

    In other words, she cannot simply rely on the disputable presumption provision mentioned in Standard Employment Contract, as she still has to substantiate her claim in order to be entitled to disability compensation.

    The widow, in this case, did not present any proof of a causal connection or at least a work relation between the employment of her husband and his colon cancer. Neither did she mention the risks that could have caused or, at the very least, contributed to the disease her husband had contracted.

    Because of these findings, the claim was not granted.

    Take away:

    “Claimants in compensation proceedings must show credible information that there is probably a relation between the illness and the work. Probability, and not mere possibility, is required; otherwise, the resulting conclusion would proceed from deficient proofs.”

    Further reading:

    • Joraina Dragon Talosig v. United Philippine Lines, Inc., et al., G.R. No. 198388, July 28, 2014.

  • Have You Read Your Employee Code of Conduct?

    You should.

    This could make or break your working relationship with your employer.

    Case in point: an employee was dismissed for having violated the company rules on parking privileges. A parking issue…imagine that.

    The employee worked as a Wellness Center Assistant of a hospital. Said hospital provided free/discounted parking perks for its patients via special parking tickets, while Wellness Center Assistants claimed these tickets on behalf of the patients.

    What this employee did was that he used the parking privileges, not for the benefit of the patients, but for himself. Anyway, the employer found out about this. After an investigation, it dismissed the said employee.

    One of the employee’s defenses was that he did not know that the parking privileges were just for the patients. He even claims: “[A]ll that he knew was that, to be able to get a discount on their expensive parking, he needed to get a validation… Without hesitation, [the hospital] always provided him with it. Because of this, he thought that it was alright to get a validation even if he was an employee of the hospital.”

    The Court did not accept such defense. In ruling for the validity of the dismissal:

    1. It noticed that the parking tickets clearly stated that the privilege was only limited to the patients of the hospital. The employee was reasonably expected to have read those terms and conditions, considering the fact that he used them several times.
    2. Even if he was not able to read those terms, this only exposed his inefficiency with regard to his work.
    3. And since the records also showed that the employer already afforded him consideration for his several infractions (there were at least 4), this should have prompted him to be more careful in his actions.

    Thoughts:

    So employees, what can we gather from this?

    You guessed it. Read and understand your employee code of conduct.

    1. We are all expected to know the rules. Claims that we are unaware of them will be considered as unbelievable.
    2. Well, you can still mention this as your defense. But if this case would serve as an example, then you’ll just be painting an image of your inefficiency. Inefficiency, of course, is not acceptable to any employer, especially if you are in its employ for the last several years.
    3. As employees, we are expected to be aware the rights and privileges of our employer’s customers/clients. Needless to state, we are not to use them for our own gain.

    Further reading:

    • St. Luke’s Medical Center v. Daniel Quebral and St. Luke’s Medical Center Employees’ Association – Alliance Of Filipino Workers (SLMCEA-AFW), G.R. No. 193324, July 23, 2014.

  • Consider the Context of the Quitclaim

    The employee, a university faculty member, filed a case against his employer for illegal dismissal. The Labor Arbiter decided in his favor and awarded reinstatement, full backwages, damages, and attorney’s fees. The employer could not reinstate the employee, but it still appealed this decision to the National Labor Relations Commission (NLRC). Later on, however, the employee executed a quitclaim in favor of the employer.

    Could the employee be estopped now from pursuing his claims for accrued wages under the ruling?

    Is your answer a yes? …Not so fast, though.

    In this case, what happened was that the employee received his retirement pay from the employer when the appeal was still pending. Now, although the NLRC initially affirmed (with modification) the decision of the Labor Arbiter, it reversed the same when it resolved a motion for reconsideration. In other words, NLRC held that the employee’s execution of the receipt and quitclaim respecting his benefits under the retirement plan estopped him from pursuing other claims arising from his employer-employee relationship with the University.

    The Supreme Court rendered a decision in favor of the employee. It ruled that the execution of the quitclaim was not a settlement of the employee’s claim for accrued salaries. The Court said:

    “We agree with the petitioner.


    “The text of the receipt and quitclaim was clear and straightforward, and it was to the effect that the sum received by the petitioner represented ‘full payment of benefits … pursuant to the Employee’s retirement plan.’ As such, both the NLRC and the CA should have easily seen that the quitclaim related only to the settlement of the retirement benefits, which benefits could not be confused with the reliefs related to the complaint for illegal dismissal.

    “Worthy to stress is that retirement is of a different species from the reliefs awarded to an illegally dismissed employee. Retirement is a form of reward for an employee’s loyalty and service to the employer, and is intended to help the employee enjoy the remaining years of his life, and to lessen the burden of worrying about his financial support or upkeep. In contrast, the reliefs awarded to an illegally dismissed employee are in recognition of the continuing employer-employee relationship that has been severed by the employer without just or authorized cause, or without compliance with due process.”

    Further reading:

    • Crisanto F. Castro, Jr. v. Ateneo De Naga University, Fr. Joel Tabora and Mr. Edwin Bernal, G.R. No. 175293, July 23, 2014.

  • Sleep Deprivation and Leukemia

    An employee was assigned at a pharmacy as a security guard. Years later, he was diagnosed with Acute Myelogenous Leukemia, and less than a year thereafter, he passed away.

    The Social Security Commission (SSC) granted the Social Security System (SSS) Temporary Total Disability (TTD) benefits, Permanent Partial Disability (PPD) benefits, and Death with Funeral Benefits to his beneficiaries. It, however, denied the claim for Employment Compensation (EC) death benefits on the ground that “there is no causal relationship between Acute Myelogenous Leukemia to [his] job as a security guard.”

    His widow appealed the SSC decision, and her case went all the way to the Supreme Court. She basically argued that employment of her husband regularly required him to take either straight 12 or 24 hours of duty, with only a 24-hour rest period on the last day of each month. He was thus constantly sleep-deprived and his immune system became weak. Eventually, he succumbed to leukemia. She concluded that the risk of contracting acute myelogenous leukemia was increased by her husband’s work or working conditions.

    The Court did not agree. In justifying the denial of her petition, it adopted, among others, the findings of the Court of Appeals.

    Under the law, for the sickness and the resulting disability or death to be compensable, the sickness must be the result of a listed occupational disease. Otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions.

    Leukemia is considered as an occupational disease if the nature of employment involved exposure to X-rays, ionizing particles of radium or other radioactive substances or other forms of radiant energy, or it is contracted by operating room personnel due to exposure to anesthetics.

    In this case, other than the widow’s allegation that her husband suffered sleep deprivation due to his work schedule and which then weakened his immune system, she has not provided proof that, as a security guard, her husband was exposed to cancer-causing chemicals in the place/s where he was assigned.

    Record shows that she has only presented a copy of a medical abstract and of her husband’s daily time records in an attempt to prove that his employment increased his chances of contracting leukemia.

    However, the Court did not find anything in the documents that would help them infer or conclude that indeed, her husband’s risk of contracting leukemia increased by reason of his work conditions.

    Further reading:

    • Rosemarie Esmarialino v. Employees’ Compensation Commission, Social Security System (SSS) and Jimenez Protective and Security Agency, G.R. No. 192352. July 23, 2014.

  • 3 Things a Time Record Should Have

    The employer in this case was defending against a claim for unpaid wages. It argued that the wages of the employees have been paid, but also mentioned that the daily time records of the said employees got lost because they were stolen.

    The Supreme Court, however, saw this as a lame excuse. Even if this angle was set aside, the Court said that “it would nonetheless be difficult if not impossible to validate and reconcile (the employer’s) documentary evidence and unilateral claims of payment, if the official payroll and daily time records are not taken into account.” It thus ruled in favor of the employees.

    Thoughts:

    There was one part of the decision that I also found significant. It was that part where the Court stated:

    “What ‘daily time records’ petitioners refer to in this Petition pertain to the supposed attendance record of several of the respondents, which however do not contain the latter’s respective signatures and those of their superiors. They appear to be incomplete as well; indeed, some are barely readable. They can hardly be considered proof sufficient enough for this Court to consider.”

    If you’re an employer, and if you want to learn from this case, then your time record should at least have the following, among others: 

    • signatures – not only of the employees, but also of their superiors;
    • complete information – the dates, times, number of hours, and other pieces of information that show an employee’s attendance in the office for work; and
    • readability – in order for anyone to make sense of the information contained therein.

    Further reading:

    • Rose Hana Angeles, etc., et al. v. Ferdinand M. Bucad, et al. G.R. No. 196249. July 21, 2014.

  • Leaving Your Post and Serious Misconduct or Willful Disobedience

    An employee asked permission to leave the office so that she could pay her due car loan amortization and avoid incurring a penalty for late payment. Even though her employer refused, she still left the office to pursue her errand. Her employment was terminated as a result.

    Here, the Supreme Court took her side because the employer failed to establish that her act was sufficient to justify the dismissal. There was a further finding that the employer failed to observe due process in the said dismissal.

    In this case, the employer argued that she defied the orders disallowing her from leaving the office early. It then concluded that her act constituted serious misconduct and willful breach of the trust reposed in her. The Court, however, did not agree:

    • The employee left for good reason. Due to the urgency of the situation, her act of leaving the office to pay her loan could not have been a serious misconduct on her part.
    • Her leaving the office was found to be a mere isolated act. Thus, it can hardly be be considered as willful defiance.
    • Although the employer alleged that she disrespected or manifested unpleasant behavior upon learning of the disapproval, the same was uncorroborated. Thus, it was not able to show that the breach of trust reposed upon her was willful or done intentionally, knowingly and purposely, without justifiable excuse.

    Thoughts:

    The case was silent on the nature of the work activities during that day. Had it been a day so busy that all hands should be on deck, the result, I reckon, would have been different.

    Also, had the unpleasant behavior been sufficiently proved, then the case would have had a different outcome.

    Finally, what if, on top of the earlier factors, the twin notice requirements were met?

    In other words, the case did not provide that all instances of employees leaving their posts would merit a favorable decision. Certain circumstances could be present, and they could add a significant dynamic in (or against) the employees’ favor in the case.

    Further reading:

    • Micah Motor, Inc, Florentino Querol and John Hernandez v. Janneth B. Tenorio, G.R. No. 190774, July 9, 2014.