Paulino Ungos III

Lawyer | Law Professor | Author

Tag: decision

  • 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.

  • 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.

  • 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.

  • Teachers Must Display Exemplary Behavior

    “[T]eachers must adhere to the exacting standards of morality and decency. There is no dichotomy of morality. A teacher, both in his official and personal conduct, must display exemplary behavior. He must freely and willingly accept restrictions on his conduct that might be viewed irksome by ordinary citizens. In other words, the personal behavior of teachers, in and outside the classroom, must be beyond reproach.“

    The foregoing principles were applied by the Supreme Court in the case of Santos v. Hagonoy Institute1G.R. No. 115795, March 6, 1998, the facts of which are as follows:

    Jose, a married man, was employed as a teacher by the Hagonoy Institute,
    Inc. Likewise working as a teacher in the same school was Arlene, also married.

    In the course of their employment, the couple fell in love. Thereafter, rumors regarding the couple’s relationship spread, especially among the faculty members and school officials.

    Concerned about the rumors, Hagonoy Institute advised Arlene to take a leave of absence which she ignored, as she continued to report for work. Consequently, she was barred from reporting for work and was not allowed to enter the school premises, thereby effectively dismissing her from her employment. Meanwhile, Hagonoy Institute set up a committee to investigate the veracity of the rumors. After two weeks of inquiry, the committee rendered its report confirming the illicit relationship between Jose and Arlene. Thus, Jose was dismissed from his employment.

    Unable to accept such verdict, Jose filed a complaint for illegal dismissal.

    Can the relationship between Jose and Arlene be considered as immorality to constitute just cause for dismissal?

    The Supreme Court ruled that the illicit relationship between Jose and Arlene
    is immoral, a serious offense, and therefore, a valid cause for his dismissal.

    The Court stated that teachers are important to society in that they are given substitute and special parental authority under our laws. Thus, teachers must adhere to the exacting standards of morality and decency. There is no dichotomy of morality. A teacher, both in his official and personal conduct, must display exemplary behavior. He must freely and willingly accept restrictions on his conduct that might be viewed irksome by ordinary citizens. In other words, the personal behavior of teachers, in and outside the classroom, must be beyond reproach. Consequently, when a teacher engages in extra-marital relationship, especially when the parties are both married, such behavior amounts to immorality, justifying his termination from employment.

    In the present case, the Court found that the gravity and seriousness of Jose’s offense stemmed from his being a married man and at the same time a teacher. Jose served as an example to his pupils, especially during their formative years2Chiang Kai Shek School v. Court of Appeals, 172 SCRA 389 (1989) and stands in loco parentis to them.3Bagayo v. Marave, 86 SCRA 389 (1978) However, his act of having an extra-marital affair was an affront to the sanctity of marriage, which is a basic institution of society. As Jose’s extra-marital affair with Arlene was established, the Supreme Court ruled that his dismissal from employment was justified.

    Further reading:

    • Santos, Jr. v. National Labor Relations Commission, G.R. No. 115795, March 6, 1998.