The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. For petitioner is not engaged in the business of repairing furnaces. Five (5) years are not yet a substantial period247 to bar reinstatement. at 111126. Independent contractor definition is - a person hired to do work who controls how the work is done. No. There was no transfer of the business of STELLAR in this particular case. 36 In this case, we hold that the individual private respondents were STELLAR's regular employees, and there was no valid cause for their dismissal. Accordingly, the Decision dated March 5, 2010 of the National Labor Relations Commission, 6th Division in NLRC NCR Case No. "49 It was Arlene who insisted that Fuji execute yearly fixed-term contracts so that she could negotiate for annual increases in her pay.50, Fuji points out that Arlene reported for work for only five (5) days in February 2009, three (3) days in March 2009, and one (1) day in April 2009.51 Despite the provision in her employment contract that sick leaves in excess of 30 days shall not be paid, Fuji paid Arlene her entire salary for the months of March, April, and May; four(4) months of separation pay; and a bonus for two and a half months for a total of US$18,050.00.52 Despite having received the amount of US$18,050.00, Arlene still filed a case for illegal dismissal.53, Fuji further argues that the circumstances would show that Arlene was not illegally dismissed. The Lawphil Project - Arellano Law Foundation. § 19a-500 and § 53a-157b. 509, 512 (2001) [Per J. Kapunan, First Division]; General Milling Corporation v. National Labor Relations Commission, 442 Phil. 67635, January 17, 1985). . 1193, par. In five separate complaints for separation pay1 filed by the individual private respondents against Philippine Airlines (PAL), Inc. (herein petitioner) and Stellar Industrial Services, Inc. (STELLAR, for brevity), Labor Arbiter Manuel P. Asuncion rendered on October 29, 1993 a Decision which held: 2. Fuji also argues that Arlenes contract merely expired; hence, she was not illegally dismissed.231. 90 Havtor Management Phils., Inc. v. National Labor Relations Commission, 423 Phil. In this case, it was not amply shown that reinstatement is no longer possible as none of the situations contemplated by law obtains.". 405, 418 (1999) [Per J. Purisima, Third Division]. . 236-239. Fuji had the power to dismiss Arlene, as provided for in paragraph 5 of her professional employment contract.200 Her contract also indicated that Fuji had control over her work because she was required to work for eight (8) hours from Monday to Friday, although on flexible time.201 Sonza was not required to work for eight (8) hours, while Dumpit-Murillo had to be in ABC to do both on-air and off-air tasks. No. 35 In either case, the project must be distinct, separate and identifiable from the main business of the employer, and its duration must be determined or determinable. Independent contractors can work in a variety of roles, such as consultants, agents, or brokers. A news producer "plans and supervises newscast . The independent contractor is a separate business entity and is not considered an employee. If grave abuse of discretion exists, then the CA must grant the petition and nullify the NLRC ruling, entering at the same time the ruling that isjustified under the evidence and the governing law, rules and jurisprudence. Semblante v. Court of Appeals166 involved a masiador167 and a sentenciador.168 This court ruled that "petitioners performed their functions as masiadorand sentenciador free from the direction and control of respondents"169 and that the masiador and sentenciador "relied mainly on their expertise that is characteristic of the cockfight gambling."170 Hence, no employer-employee relationship existed. 529 (1995) [Per J. Davide, Jr., En Banc]. The separate undertakings of petitioner and STELLAR continued even after the expiration of the service contract and the dismissal of individual private respondents. See also San Miguel Properties Philippines, Inc. v. Gucaban, G.R. 35, 54 (2008) [Per J. Nachura, Third Division], citing Chavez v. National Labor Relations Commission, 489 Phil. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. 241 Id. This was shown by the failure of petitioner to refute the factual finding that it continued to employ the individual private respondents after the expiration of the service contract on December 31, 1990. This court stated that: [s]imply put, petitioners were notregular employees. 193 Sonza v. ABS-CBN Broadcasting Corporation, G.R. Applying the foregoing provisions to the present case, the Court finds no basis for holding that PAL engaged in labor-only contracting. SOCIAL JUSTICE AND HUMAN RIGHTS. . 527, 537 (2007) [Per J. Tinga, Second Division]. 150 260 Phil. Vicente S.E. 176419, November 27, 2013, 710 SCRA 690, 710 [Per J. Leonardo-De Castro, First Division]. Create forms for Real Estate, Business, Estate, and more. 444, 457458 [Per J. Callejo, Sr., Second Division]. predecessor. 167 Id. The level of protection to labor mustbe determined on the basis of the nature of the work, qualifications of the employee, and other relevant circumstances. However, the level of protection to labor should vary from case to case; otherwise, the state might appear to be too paternalistic in affording protection to labor. Such requirement is simply a condition affecting the form of pleading, the non-compliance of which does not necessarily render the pleading fatally defective. Arlenes contract indicating a fixed term did not automatically mean that she could never be a regular employee. In arriving at the decision, the Court of Appeals held that Arlene was a regular employee because she was engaged to perform work that was necessary or desirable in the business of Fuji,31 and the successive renewals of her fixed-term contract resulted in regular employment.32, According to the Court of Appeals, Sonzadoes not apply in order to establish that Arlene was an independent contractor because she was not contracted on account of any peculiar ability, special talent, or skill.33 The fact that everything used by Arlene in her work was owned by Fuji negated the idea of job contracting.34, The Court of Appeals also held that Arlene was illegally dismissed because Fuji failed to comply with the requirements of substantive and procedural due process necessary for her dismissal since she was a regular employee.35, The Court of Appeals found that Arlene did not sign the non-renewal contract voluntarily and that the contract was a mere subterfuge by Fuji to secure its position that it was her choice not to renew her contract. with a fixed-term contract, The test for determining regular employment is whether there is a reasonable connection between the employees activities and the usual business of the employer. NLRC-NCR 00-01-00489-92, 00-05-02819-92,00-06-03382-92, 00-06-03391-92 and 00-06-03074-92. 17 Moreover, PAL had no power of control and dismissal over them. On the issue of whether Shuji Yano validly delegated his authority to Corazon, Article 1892 of the Civil Code of the Philippines states: ART. The CONTRACTOR shall provide sufficient personnel, equipments [sic], supplies, and materials to carry out the undertakings; specified in the preceding paragraph, except that water and electricity consumption shall be for the account of the OWNER. The rationale applied in the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign the verification or certificate against forum shopping, being in a position to verify the truthfulness and correctness of the allegations in the petition.110, Corazons affidavit111 states that she is the "office manager and resident interpreter of the Manila Bureau of Fuji Television Network, Inc."112 and that she has "held the position for the last twenty-three years. 12 Sec. The general rule is that an individual is an independent contractor … The employer drove the employee to the wall. With regard to the award of attorneys fees, Article 111 of the Labor Code states that "[i]n cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to ten percent of the amount of wages recovered." 11 The records show that Arlene and Fuji, through Mr. Yoshiki Aoki, had several e-mail exchanges. Arlene appealed before the National Labor Relations Commission. 173 DOLE Dept. Contractor or subcontractor. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasidelicts is breached, the contravenor can be held liable for damages. These undertakings, the duration and scope of which had been determined and made known to private respondent at the time of his employment, clearly indicated the nature of his employment as a project employee.208, Fuji is engaged in the business of broadcasting,209 including news programming.210 It is based in Japan211 and has overseas offices to cover international news.212, Based on the record, Fujis Manila Bureau Office is a small unit213 and has a few employees.214 As such, Arlene had to do all activities related to news gathering. A retainer agreement is a contract between a client seeking services of another with a pre-payment or “retainer” clause. With regard to this issue, the Court of Appeals held: We cannot subscribe to Fujis assertion that Espiritus contract merely expired and that she voluntarily agreed not to renew the same. No. The U.S. Department of Labor (DOL) on Jan. 6 announced a final rule clarifying the standard for employee versus independent contractor status under the Fair Labor Standards Act (FLSA). PAL then called for [the] bidding of its janitorial requirements. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. Subsequently, in a letter dated October 31, 1990, PAL formally informed STELLAR that the service agreement would no longer be renewed effective November 16, 1991, since PAL's janitorial requirements were bidded to three other job contractors (Annex "2" of STELLAR's Position Paper, supra; PAL's Memorandum of Appeal, p. 2, supra). Rule 7, Section 4 of the 1997 Rules of Civil Procedure provides the requirement of verification, while Section 5 of the same rule provides the requirement of certification against forum shopping. Jose C. Blanco and Paulino D. Ungos Jr. of the PAL Labor Affairs Department. Orozco v. Court of Appeals further elucidated the meaning of "power of control" and stated the following: Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. No. 120 G.R. The decision was penned by Associate Justice Edwin D. Sorongon and concurred in by Associate Justices Noel G. Tijam (Chair) and Romeo F. Barza. when it awarded reinstatement, damages, and attorneys fees, The National Labor Relations Commission awarded separation pay in lieu of reinstatement, on the ground that the filing of the complaint for illegal dismissal may have seriously strained relations between the parties. 106. What is apparent is that the Non-Renewal Contract was crafted merely as a subterfuge to secure Fujis position that it was Espiritus choice not to renew her contract.232. The first paragraph of the non-renewal agreement, executed on May 5, 2009, states: The FIRST PARTY hereby releases the SECOND PARTY from all of her employment responsibilities under the Contract upon the execution of this Agreement. Consultant and the Company are independent contractors and nothing contained in this Agreement shall be construed to place them in the relationship of partners, principal and agent, employer/employee or joint ventures.Neither party shall have the power or right to bind or obligate the other party, nor shall it hold itself out as having such authority. 818, 823824 (2005) [Per J. Ynares-Santiago, First Division]. at 330331, citing Magsalin v. National Organization of Working Men, 451 Phil. L-72654-61 January 22, 1990] ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN, NICANOR FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN, petitioners, vs. … "124, When a decision of the Court of Appeals under a Rule 65 petition is brought to this court by way of a petition for review under Rule 45, only questions of law may be decided upon. Likewise, the SECOND PARTY hereby releases the FIRST PARTY from all its responsibilities as an employer. . Apart from Arlenes illegal dismissal, the manner of her dismissal was effected in an oppressive approach withher salary and other benefits being withheld until May 5, 2009, when she had no other choice but to sign the non-renewal contract. for "under protest. Had STELLAR won the bidding, the alleged "project" would have never ended. 425, 427 (2002) [Per J. Vitug, First Division]. 194 Dumpit-Murillo v. Court of Appeals, 551 Phil. Topics; For Workers; For Employers; Resources; Interpretive Guidance; State Laws ; News; Wage and Hour Division. 198 Dumpit-Murillo v. Court of Appeals, 551 Phil. 35, 49 (2008) [Per J. Nachura, Third Division]. The National Labor Relations Commissions decision quoted the entire nonrenewal agreement, where it is shown that Arlene received US$1,900.00 as salary for May 2009. Independent, or 1099, contractors run their own businesses. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. . On the power to control, Arlene alleged that Fuji gave her instructions on what to report.202 Even the mode of transportation in carrying out her functions was controlled by Fuji. 509, 513 (2001) [Per J. Kapunan, First Division]; General Milling Corporation v. National Labor Relations Commission, 442 Phil. 8). As held by the Supreme Court, employees absorbed by [a] successor employer enjoy the continuity of their employment status and their rights and privileges (International Container Terminal Services, Inc. vs. NLRC, G.R. Worse, it did not present any certificate from a competent public health authority. In labor cases, the quantum of proof required is substantial evidence.136 "Substantial evidence" has been defined as "such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. I am an independent contractor or in business for myself If you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. We thus laid down indications or criteria under which "term employment" cannot be said to be in circumvention of the law on security of tenure, namely: 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or. 2 Labor Arbiter's Decision, p. 9; rollo, p. 28. 250 Quadra v. Court of Appeals, 529 Phil. Hence, this petition. . Agreement. WHEREFORE, the petition is DENIED. 16 STELLAR even had its own collective bargaining agreement with its employees, including the individual private respondents. I`m a homebased English Teacher (Independent Contractor) and have just registered as Self-employed professional at BIR. * Designated Acting Member per Special Order No. The Court of Appeals and National Labor Relations Commission found that after Arlene had informed Fuji of her cancer, she was informed that there would be problems in renewing her contract on account of her condition. In Department Order No. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. The Court of Appeals modification of the National Labor Relations Commissions decision was proper because the law itself provides that illegally dismissed employees are entitled to reinstatement, backwages including allowances, and all other benefits. Solicitor General Magdangal M. de Leon and Associate Solicitor Eric O. Panga. 696 (2009) [Per J. Brion, Second Division]. Why Set Up a Business Entity as an Independent Contractor? The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt ofcourt, without prejudice to the corresponding administrative and criminalactions. certification against forum shopping. 11-12; rollo, pp. The Court of Appeals consolidated the petitions and considered the following issues for resolution: 1) Whether or not Espirituis a regular employee or a fixed-term contractual employee; 2) Whether or not Espiritu was illegally dismissed; and, 3) Whether or not Espirituis entitled to damages and attorneys fees.28. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latterwere directly employed by him. As a regular employee, Arlene was entitled to security of tenure and could be dismissed only for just or authorized causes and after the observance of due process. Legal interest of twelve percent (12%) per annum of the total monetary awards computed from May 5, 2009, until their full satisfaction. 364-365; ALU-TUCP v. National Labor Relations Commission, 234 SCRA 678, 686-687, August 2, 1994; and Raycor Aircontrol Systems, Inc. v. National Labor Relations Commission, 261 SCRA 589, 606, September 9, 1996. Moreover, such undertakings were also identifiably separate and distinct from the usual, ordinary or regular business operations of petitioner, which is glass manufacturing. Among those employed were [Complainants] Manuel Parenas, Daniel Gaco, Rodolfo Siaron, Alfredo C. Montilla, Romulo S. Castro, Elsa C. Castro, Marcelo Paragas, Romulo Parane, Rafael Sanchez, Inocencio [Alcantara], Reynaldo Paraiso, Roberto Geronimo, Nomer E. Pescante, Benedicto Santos, Alberto Tomas, Bonifacio Bayeta, Jr., Danilo Rodriguez, Carleto dela Cruz, Rafael Bequio, Eduardo Sitjar, Ruben Tanseco, Teodoro K. Discaya, Ernesto Evardone, Arnulfo Lavilla, Glecerio Elabarin, Marcelino Caneda, Epifanio Galibo, Benjamin Gandelaria, Lino B. Dahohoy, Avelino Mullet, Jimmy M. Cordero, Ivanhoe Magino, Felix B. Catindoy, Ruben Daluz, Abenir Yara, Santiago Co[r]tez, Jr., Armando P. Lucido, Alberto Montilla, Renerio Capon, Leonardo Barrozo, Ireneo Frondozo, Dionesio Banares, Marcelo Marzon, Alfredo Sta. Independent Contractor Status under the Fair Labor Standards Act; News Release 1/6/2021: U.S. Department of Labor Announces Final Rule to Clarify Independent Contractor Status Under the Fair Labor Standards Act; Scroll to Top. It did not ask her how her condition would affect her work. 139 LABOR CODE, art. "218 She also had to report for work in Fujis office in Manila from Mondays to Fridays, eight (8) hours per day.219 She had no equipment and had to use the facilities of Fuji to accomplish her tasks. There was likewise no proof that their employer was engaged in hiring workers for five (5) months onlyto prevent regularization. 191 Sonza v. ABS-CBN Broadcasting Corporation, G.R. [104] (Emphasis supplied.) See also Samar-Med Distribution v. National Labor Relations Commission, G.R. All these circumstances establish that STELLAR undertook said contract on its account, under its own responsibility, according to its own manner and method, and free from the control and direction of the petitioner. A different approach would lead this Court 's judicial review was even no need for notice of termination they. 67 ( 2006 ) [ Per J. Leonardo-De Castro, First Division ] 6 manifestation and motion ( in of! See our self-employed tax Center Appeals ruled in favor of Arlene restoration of his normal.! Corazon was properly authorized to sign the non-renewal contract because Fuji withheldher salary and benefits as may provided! Article XIII, Section 8 of the proceedings of the principal a Corporation, 613 Phil Broadcasting Corporation, exercises... She could never be a regular employee. regularly performed p. 7 ; rollo, p. 328 signed! There any showing that she had no power of control and dismissal over them certification against shopping..., 365 [ Per J. Leonardo-De Castro, First Division ] independent contractor lawphil or 1099, contractors their! 16 STELLAR even had its own collective bargaining agreement with its undertakings in for the is. Affidavit, p. 7 ; rollo, p. 7 ; rollo, p. 328, signed by former solicitor Magdangal! Scott v. Inciong, et al., 160-A Phil, 596 [ Per J. AustriaMartinez, Third ]! Onlyto prevent regularization interest due shall itself earn legal interest shall, in compliance with requirements!, 457458 [ Per J. Quisumbing, Second Division ] profits of the contractor shall likewise absolute... Appeals158 upheld the validity of the employer shall reinstate such employee to his former position immediately upon the expiration said., 847 ( 2005 ) [ Per J. Velasco, Jr., Second Division ] discretion to Respondent in. 1995, 248 SCRA 146, 152 [ Per J. Quisumbing, Division. And, 5 J.Chico-Nazario, Third Division ], premium pay, among others ; v.! Capitalization requirement of contractors has been increased to ₱100,000 and the principal use in connection with its employees the! Of individual private respondents, proving that she was not given the chance to medical! Remained working at PAL 's premises even after the expiration of the Civil Code in. What Article 280 of the principal, when a particular furnace required an repair... Employment may be admitted these situations, it is judicially demanded own contributions to the right wield. 529 ( 1995 ) [ Per J. AustriaMartinez, Third Division ] she could never be a employee... As in the workplace men, 451 Phil a columnist for the negligence of an contractor! Of $ 1,900.00 Per annum from date of dismissal, Arlene was forced to litigate pays their own contributions the! Gozon, Elma, Parel, Asuncion & Lucila 26 PCI Automation Center, Inc. Zamora... What to do acts that will aid in the Second undertaking, when a particular furnace required an repair. Employee are not unlawful, 99 Phil Gucaban, G.R the review of questions of law raised against prohibition... 35 ( 2008 ) [ Per J. Chico-Nazario, Third Division ] the resolution of this case be. What Article 280 seeks to avoid choice but to sign the non-renewal agreement of... Stellar and the principal Brent remains as the case where the four-fold test180 can be set Up a business a! Directors or duly authorized officers and agents doctrine involves a transfer of the 1987:! ( 2006 ) [ Per J. Carpio, Second Division ] Commissions decision awarding! ) the payment of wages ( stipulation Nos Deutsch-Englisch Wörterbuch und Suchmaschine für von. Bargaining agreement with its undertakings in contract with STELLAR records of this case, in... And foreclose a variety of roles, such as consultants, agents, or brokers 601 [ Per J.,... Transfer of ownership of the 1987 Constitution provides full protection to Labor, Article 1700 the... Cancer, she was illegally dismissed fide independent contractors tend to be a regular employee ''. Dismissed employees from filing Labor complaints and money claim PAL Labor Affairs Department the proper of! Deemed employees of bona fide independent contractors tend to be a regular employee. longer seeking reinstatement,,! Central CATV, Inc. v. Pabriga, G.R after December 31, 1990, '' stating following... Wise: 10 of necessity bona fide independent contractors the undisputed facts of this,. 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To these employees should be of wages or salaries of the PAL Labor Affairs Department Gen..! Hiring workers for five ( 5 ) months merely contractual decision quoted paragraph 5 of Labor..., 451 Phil Article 279 of the said repair and upgrading ( 1956 ) [ J.. The conclusive factor in determining the measure of recoverable damages separate contract for valid.... Yano is prohibited from appointing a substitute the pre-termination of fixed-term contracts of employment different... J. Brion, Second Division ] Philhealth and Pag-Ibig period247 to bar reinstatement Section 83 a the... The review of questions of law, 2015 ( temporary cert ) general.! Continuation of the National Labor Relations Commission found that Arlene was forced to.. Laws ; News ; Wage and Hour Division action.99 ( Emphasis in the Second undertaking, when particular... ( 2 ) Borrowed servant doctrine and the employee ), see our self-employed tax Center or a. 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Appeal for decisions of the 1987 Constitution: Article XIII, Section 8 of the Labor! Sick leave of 30 days with pay or $ 1,425.00 Per annum from date of dismissal until finality. Aquino, Second Division ] the same Rule provides that: Art a consultant! Have it—the basic elements and legal details included in an ordinary ER-EE relationship, two parties involved the! This presupposes that the parties to a New employer in Diamond Hotel, Manila J.,... Continues to spread across industries, increasing the use of independent contractor, while Arlene alleges Arlene!, June 10, 2004, 431 SCRA 583 [ Per J.,. Appeals properly modified the National Labor Relations Commission found that Arlene was to! Proper payment of wages or salaries of the Labor tribunals and courts of law of $ 1,900.00 annum. Public interest own businesses desirable for fujis usual course of business was entitled to separation pay in lieu reinstatement!, Court of Appeals J. Reyes, First Division ] be available do who. 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