Tabas vs. California Manufacturing Co., Inc.

169 SCRA 497

Facts: Petitioners filed a petition in the NLRC for reinstatement and payment of various benefits against California Manufacturing Company. The respondent company then denied the existence of an employer-employee relationship between the company and the petitioners. Pursuant to a manpower supply agreement, it appears that the petitioners prior their involvement with California Manufacturing Company were employees of Livi Manpower service, an independent contractor, which assigned them to work as promotional merchandisers. The agreement provides that: California has no control or supervisions whatsoever over Livi's workers with respect to how they accomplish their work or perform Californias obligation It was further expressly stipulated that the assignment of workers to California shall be on a seasonal and contractual basis; that cost of living allowance and the 10 legal holidays will be charged directly to [California] at cost ; and that payroll for the preceding week shall be delivered by Livi at California's premises. Issue: Whether principal employer is liable.

Held: Yes. The existence of an employer-employee relation cannot be made the subject of an agreement. Based on Article 106, labor-only contractor is considered merely as an agent of the employer, and the liability must be shouldered by either one or shared by both. There is no doubt that in the case at bar, Livi performs manpower services, meaning to say, it contracts out labor in favor of clients. We hold that it is one notwithstanding its vehement claims to the contrary, and notwithstanding the provision of the contract that it is an independent contractor. The nature of ones business is not determined by self-serving appellations one attaches thereto but by the tests provided by statute and prevailing case law. The bare fact that Livi maintains a separate line of business does not extinguish the equal fact that it has provided California with workers to pursue the latters own business. In this connection, we do not agree that the petitioners had been made to perform activities which are not directly related to the general business of manufacturing, Californias purported principal operation activity. Livi, as a placement agency, had simply supplied California with the manpower necessary to carry out its (Californias) merchandising activities, using its (Californias) premises and equipment.

BRENT SCHOOL vs. ZAMORA 181 SCRA 702

Facts: Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc. at a yearly compensation of P20,000.00. The contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the same terms and conditions, including the expiry date, as those contained in the original contract of July 18, 1971.

On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration of the definite period of employment." Although protesting the announced termination stating that his services were necessary and desirable in the usual business of his employer, and his employment lasted for 5 years - therefore he had acquired the status of regular employee - Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for the period May 16, to July 17, 1976 as full payment of contract."

The Regional Director considered Brent School's report as an application for clearance to terminate employment (not a report of termination), and accepting the recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority rights and with full back wages. Issue: Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or employment for a term.

Held: Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement.

The employment contract between Brent School and Alegre was executed on July 18, 1971, at

a time when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated. At that time, the validity of term employment was impliedly recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Prior, thereto, it was the Code of Commerce (Article 302) which governed employment without a fixed period, and also implicitly acknowledged the propriety of employment with a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and became effective on August 30,1950, itself deals with obligations with a period. No prohibition against term-or fixed-period employment is contained in any of its articles or is otherwise deducible therefrom.

It is plain then that when the employment contract was signed between Brent School and Alegre, it was perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly recognized as valid by this Court.

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code (PD 442), which went into effect on November 1, 1974. The Code contained explicit references to fixed period employment, or employment with a fixed or definite period. Nevertheless, obscuration of the principle of licitness of term employment began to take place at about this time.

Article 320 originally stated that the "termination of employment of probationary employees and those employed WITH A FIXED PERIOD shall be subject to such regulations as the Secretary of Labor may prescribe." Article 321 prescribed the just causes for which an employer could terminate "an employment without a definite period." And Article 319 undertook to define "employment without a fixed period" in the following manner: where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment were amended by Presidential Decree No. 850, effective December 16, 1975.

PEOPLE V SAGAYAGA 423 SCRA 468 Facts: The appellant was charged with large scale illegal recruitment. Sometime in October 1997, Elmer Janer went to the office of Alvis Placement Service Corporation to apply for overseas employment as factory worker in Taiwan. Appellant Leticia Sagayaga, after personally receiving Elmers application, required him to submit the necessary documents. Appellant further asked Elmer to pay seventy-five thousand pesos (P75,000.00) as placement fee. Elmer paid the said fee to appellant in three (3) installments. All the payments were made inside Alvis Placement Agency. Elmer also had his medical examination at the Angeles Medical Clinic, the result of which confirmed that he was fit to work. Thereafter, he was told to wait for the arrival of the employer. After seven (7) months, no employer arrived. Tired of waiting, Elmer demanded that he be refunded of his money (Id.). Despite appellants promises to pay, Elmer was not refunded of his money. Elmer asked appellant for a promissory note, which appellant executed, promising to pay Elmer seventy-five thousand (P75,000.00) on May 6, 1998 (pp. 10 and 11, TSN, September 7, 1999). In said promissory note, appellant designated herself as the assistant general manager of the placement agency. When appellant failed to refund the amount to Elmer on the date stated in the promissory note, the latter went to the Philippine Overseas Employment Administration (POEA) and filed a sworn complaint against appellant. Elmer Ramos and Eric Farol filed their complaint based on basically similar facts. The appellant avers that she is not criminally liable for the crime charged because the prosecution failed to prove that she had a direct or actual control, management or direction of the business and recruitment activities of the Alvis Placement Services Corporation (APSC). She asserts that she had no knowledge of the recruitment activities of APSC and had no participation whatsoever in its operation. In dealing with the private complainants, she was merely performing routinary office work as a mere employee. Her participation as an employee of APSC with respect to the employment application of Elmer Ramos for Taiwan was to receive his placement fee of P20,000.00. ISSUE: Whether the accused-appellant was a top ranking officer of said corporation, with authority to participate directly in the control, management or direction of its business affairs.

HELD: YES. Appellant, as shown by the records of the POEA, was both the APSC VicePresident-Treasurer and the Assistant General Manager. She was a high corporate officer who had direct participation in the management, administration, direction and control of the business of the corporation. Under Section 6 (m) of Rep. Act No. 8042, illegal recruitment may be committed by any person, whether a non-licensee, non-holder of authority, licensee or holder of authority, thus: (m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the workers fault. Under the last paragraph of the said section, those criminally liable are the principals, accomplices and accessories. In case of a juridical person, the officers having control, management or direction of the business shall be criminally liable. Accused has expressly admitted in the course of her testimony that she was at the time the Treasurer of their recruitment agency. As such she was in charge of the management and control of the financial affairs and resources of the corporation. She was in charge of collecting all its receivables, safely keeping them, and disbursing them. The appellant is guilty of illegal recruitment as a principal by direct participation, having dealt directly with the private complainants. The appellants bare denial of her involvement in the management, administration, control and operation of APSC cannot prevail over her judicial admissions, the positive testimonies of the private complainants and the documentary evidence adduced by the prosecution. Section 6 of Rep. Act No. 8042 provides that illegal recruitment shall be considered an offense involving economic sabotage if committed in large scale, viz, committed against three (3) or more persons individually or as a group, the imposable penalty for which is life imprisonment and a fine of not less than P500,000.00 nor more than P1,000,000.00. In this case, there are three private complainants, namely, Elmer Janer, Eric Farol and Elmer Ramos. The trial court, thus, correctly convicted the appellant of large scale illegal recruitment and sentenced her to suffer life imprisonment.