LABOR RELATIONS

CASE DIGESTS SET 1General Principles(Art 211)1. MAXIMO CALALANG vs. A. D. WILLIAMS, ET AL., G.R. No. 47800. December 2, 1940

FACTS:

The National Traffic Commission, in its resolution of 17 July 1940, resolved to recommend to the Director of Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic. The Chairman of the National Traffic Commission, on 18 July 1940, recommended to the Director of Public Works the adoption of the measure proposed in the resolution, in pursuance of the provisions of Commonwealth Act 548, which authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads.On 2 August 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications, recommended to the latter the approval of the recommendation made by the Chairman of the National Traffic Commission, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street. On 10 August 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as indicated, for a period of 1 year from the date of the opening of the Colgante Bridge to traffic. The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations thus adopted.Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before the Supreme court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.

ISSUES:

1) Whether the rules and regulations promulgated by the Director of Public Works infringe upon the constitutional precept regarding the promotion of social justice to insure the well-being and economic security of all the people?

2) Whether or not there is undue delegation of legislative power?

RULING:

1) The promotion of social justice is to be achieved not through a mistaken sympathy towards any given group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number."

2) There is no undue delegation of legislative power. Commonwealth Act 548 does not confer legislative powers to the Director of Public Works. The authority conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines and to close them temporarily to any or all classes of traffic whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest.

The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated.

To promulgate rules and regulations on the use of national roads and to determine when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly.

It must depend on the discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the making of the law.

2. BENJAMIN VICTORIANO vs. ELIZALDE ROPE WORKERS UNION, ET. AL.

G.R. No. L-25246, 12 September 1974

FACTS:Victoriano, an Iglesia ni Cristo member, has been an employee of the Elizalde Rope Factory since 1958. He was also a member of the EPWU. Under the CBA between ERF and EPWU, a close shop agreement is being enforced which means that employment in the factory relies on the membership in the EPWU; that in order to retain employment in the said factory one must be a member of the said Union. In 1962, Victoriano tendered his resignation from EPWU claiming that as per RA 3350 he is an exemption to the close shop agreement by virtue of his being a member of the INC because apparently in the INC, one is forbidden from being a member of any labor union. It was only in 1974 that his resignation from the Union was acted upon by EPWU which notified ERF about it. ERF then moved to terminate Victoriano due to his non-membership from the EPWU. EPWU and ERF reiterated that he is not exempt from the close shop agreement because RA 3350 is unconstitutional and that said law violates the EPWUs and ERFs legal/contractual rights.

ISSUE: Whether or not RA 3350 is unconstitutional.

HELD: The right to religion prevails over contractual or legal rights. As such, an INC member may refuse to join a labor union and despite the fact that there is a close shop agreement in the factory where he was employed, his employment could not be validly terminated for his non-membership in the majority therein. Further, the right to join a union includes the right not to join a union. The law is not unconstitutional. It recognizes both the rights of unions and employers to enforce terms of contracts and at the same time it recognizes the workers right to join or not to join union. But the RA recognizes as well the primacy of a constitutional right over a contractual right.3. PHILIPPINE BLOOMING MILLS EMPLOYMENT ORGANIZATION, ET AL. vs. PHILIPPINE BLOOMING MILLS CO., INC. and CIRG.R. No. L-31195 June 5, 19735. PAL vs. NLRC

G.R. No. 85985 August 13, 1993

FACTS:

The Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. Subsequently, some of the employees were subjected to disciplinary measures for alleged violation of revised code.Philippine Airlines Employees Association (PALEA) filed a complaint before the (NLRC) for "ULP with arbitrary implementation of PAL's Code of Discipline without notice and prior discussion with Union by Management." PALEA contended that PAL was guilty of ULP because the copies of the Code had been circulated in limited numbers; that being penal in nature the Code must conform with the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees.PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescribe rules and regulations regarding employees' conduct in carrying out their duties and functions.Labor Arbiter: dismissed the complaint and ruled that no ULP had been committed and no bad faith in adopting the Code.NLRC: found no evidence of ULP and affirmed the dismissal of the complaint.Issue: Whether or not the formulation of a Code of Discipline among employees is a shared responsibility of the employer and the employees.

Held:

YES. The Court upheld the unions right, and ruled that, the management should see to it that its employees are at least properly informed of its decisions or modes of action, because the implementation of the provisions may result in the deprivation of an employees means of livelihood which is a property right.And the CBA may not be interpreted as cession of employees right to participate in the deliberation of matters which may affects their rights and the formulation of a code of discipline.

4. EASTERN SHIPPING LINES, INC, ET AL. vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), ET AL.G.R. No. 76633 October 18, 19885. PHILIPPINE AIRLINES, INC. (PAL) vs. NATIONAL LABOR RELATIONS COMMISSION, ET. AL.G.R. No. 85985 August 13, 19936. INVESTMENT PLANNING CORPORATION OF THE PHILIPPINES vs. SOCIAL SECURITY SYSTEMG. .R. No. L-19124 November 18, 19677. INSULAR LIFE ASSURANCE CO., LTD.

vs. NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAOG.R. No. 84484 November 15, 19898. LVN PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild (FFW) and COURT OF INDUSTRIAL RELATIONSG.R. No. L-12582 January 28, 1961

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SAMPAGUITA PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild (FFW) and COURT OF INDUSTRIAL RELATIONS

G.R. No. L-12598 January 28, 1961

FACTS:

LVN Pictures, Inc., Sampaguita Pictures, Inc., and Premiere Productions, Inc. are corporations engaged in the making of motion pictures and in the processing and distribution thereof. Said companies employ musicians for the purpose of making music recordings for title music, background music, musical numbers, finale music and other incidental music, without which a motion picture is incomplete.

In its petition in the lower court, the Philippine Musicians Guild (FFW), averred that it is a duly registered legitimate labor organization; that ninety-five (95%) percent of all the musicians playing for the musical recordings of said companies are members of the Guild; and that the same has no knowledge of the existence of any other legitimate labor organization representing musicians in said companies. Premised upon such allegations, the Guild prayed that it be certified as the sole and exclusive bargaining agency for all musicians working in the aforementioned companies.

In their respective answers to the complaint of the Guild, the petitioners denied that they have any musicians as employees, and alleged that the musical numbers in the filing of the companies are furnished by independent contractors. The lower court, however, rejected this pretense and sustained the theory of the Guild, with the result already adverted to. A reconsideration of the order complained of having been denied by the Court en banc, LVN Pictures, inc., and Sampaguita Pictures, Inc., filed these petitions for review for certiorari.

ISSUE:

WON the musicians in question are employees of the film companies.

HELD:

YES. The scope of the term 'employee' must be understood with reference to the purposes of R.A. Act 875 and the facts involved in the economic relationship. Where all the conditions of relation require protection, protection ought to be given. In other words, to determine whether a person who performs work for another is the latter's employee or an independent contractor, the National Labor Relations relies on 'the right to control' test. Under the control test relied to by the NLRC, an employer-employee relationship exist where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to be used in reaching the end.

As a normal and usual course of procedure employed by the companies when a picture is to be made, after the selection of the musical director for the film by the producer, a price is agreed upon verbally between the producer and musical director for the cost of furnishing such musical background. The musical director may compose his own music specially written for or adapted to the picture. He engages his own men and pays the corresponding compensation of the musicians under him. When the music is ready for recording, the musicians are summoned through 'call slips' in the name of the film company, which show the name of the musician, his musical instrument, and the date, time and place where he will be picked up by the truck of the film company. The film company provides the studio for the use of the musicians for the recordings. The musicians are also provided transportation to and from the studio by the company. Similarly, the company furnishes them meals at dinner time. During the recording sessions, the motion picture director, who is an employee of the company, supervises the recording of the musicians and tells what to do in every detail. He solely directs the performance of the musicians before the camera as director, he supervises the performance of all the action, including the musicians who appear in the scenes so that in the actual performance to be shown on the screen, the musical director's intervention has stopped. And even in the recording sessions and during the actual shooting of a scene, the technicians, soundmen and other employees of the company assist in the operation. Hence, the work of the musicians is an integral part of the entire motion picture since they not only furnish the music but are also called upon to appear in the finished picture.

The Court affirmed the ruling of the CIR due to the fact that the three (3) film companies did not question the union's majority. As the musical directors have no such control over the musicians involved in the present case. Said musical directors control neither the music to be played, nor the musicians playing it. The film companies summon the musicians to work, through the musical directors. The film companies, through the musical directors, fix the date, the time and the place of work. The aforementioned control over the "means to be used" in reading the desired end is possessed and exercised by the film companies over the musicians in the cases.9. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY vs. NATIONAL LABOR RELATIONS COMMISSION and MARILYN ABUCAY

G.R. No. 80609 August 23, 1988

FACTS:Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by two complainants of having demanded and received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval of their applications for telephone installation. Investigated and heard, she was found guilty as charged and accordingly separated from the service. She went to the Ministry of Labor and Employment claiming she had been illegally removed. After consideration of the evidence and arguments of the parties, the company was sustained and the complaint was dismissed for lack of merit.

Upon appeal, the National Labor Relations Board upheld the said decision in toto and dismissed the appeals. The private respondent took no further action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, questioned the affirmance of the ruling regarding the one month pay for every year of service as financial assistance award as having been made with grave abuse of discretion.

ISSUE:

Was the financial assistance to an Abucay who had been dismissed for cause as found by the public respondent legal.

HELD:

NO. The challenged resolution was affirmed AFFIRMED in toto except for the grant of separation pay in the form of financial assistance, which was disallowed.

There should be no question that where it comes to such valid but not iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for some time with the company. The award to the employee of separation pay would be sustainable under the social justice policy even if the separation is for cause.

But where the cause of the separation is more serious than mere inefficiency, the generosity of the law must be more discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. This is no longer mere incompetence but clear dishonesty.

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.10. JOSE Y. SONZA vs. ABS-CBN BROADCASTING CORPORATION

G.R. No. 138051 June 10, 2004FACTS:

In May 1994, ABS-CBN signed an agreement with Mel & Jay Management and Development Corp for a radio and television program. ABS-CBN agreed to pay for SONZAs services a monthly talent fee of P310,000 for the first year and P317,000 for the second and third year of the Agreement. ABS-CBN would pay the talent fees on the 10th and 25th days of the month.

On April 1996, Sonza wrote a letter to ABS-CBN President Eugenio Lopez III about a recent event concerning his programs and career, and that the said violation of the company has breached the agreement, thus, the notice of rescission of Agreement was sent.

At the end of the same month, Sonza filed a complaint against ABS-CBN before the DOLE for non-payment of salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP) which was opposed by ABS-CBN on the ground there was no employer-employee relationship existed between the parties.

ISSUE:

WON Sonza was an employee or independent contractor?

HELD:

There was no employer-employee relationship that existed, but that of an independent contractor.

Case law has consistently held that the elements of an employer-employee relationship are:

(a) The selection and engagement of the employee - ABS-CBN engaged SONZAs services to co-host its television and radio programs because of SONZAs peculiar skills, talent and celebrity status. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship.

(b) The payment of wages - ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA were ABS-CBNs employee, there would be no need for the parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th month pay" which the law automatically incorporates into every employer-employee contract.

(c) The power of dismissal - For violation of any provision of the Agreement, either party may terminate their relationship. During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent fees as long as "AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement." Even if it suffered severe business losses, ABS-CBN could not retrench SONZA because ABS-CBN remained obligated to pay SONZAs talent fees during the life of the Agreement.

(d) The employers power to control the employee on the means and methods by which the work is accomplished - The control test is the most important test. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor.

First, ABS-CBN engaged SONZAs services specifically to co-host the "Mel & Jay" programs. ABS-CBN did not assign any other work to SONZA. To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. SONZA did not have to render eight hours of work per day. The Agreement required SONZA to attend only rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-CBN could not dictate the contents of SONZAs script. However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests. The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests.

Second, 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 of ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the "Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY (ABS-CBN) as its Code of Ethics." The KBP code applies to broadcasters, not to employees of radio and television stations. Broadcasters are not necessarily employees of radio and television stations. Clearly, the rules and standards of performance referred to in the Agreement are those applicable to talents and not to employees of ABS-CBN.

Lastly, being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort "in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time." Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity.

11. ELDO J. CARIO, ET AL. vs. AGRICULTURAL CREDIT AND COOPERATIVE FINANCING ADMINISTRATION (ACCFA), ET. Al.G.R. No. L-19808 - September 29, 1966

FACTS:

Cario and the other petitioners-appellants were appointed permanent employees of the ACCFA who were originally assigned to the Special Operations Service unit. Their duties consisted of conducting investigations of charges of irregularities in any branch of the ACCFA and appearing as witnesses in court. In 1958, the petitioners were advised that their items in the budget were abolished by the Board of Governors. Consequently, their services were terminated.

Upon learning of their separation from service, petitioners wrote the ACCFA Board of Governors underscoring their civil service eligibility, efficiency and permanence of their positions, and have requested reinstatement. They also wrote the CSC but it referred the matter to the Board. Thereafter, they wrote Major Federico Salcedo of the PCAPE complaining against their separation and prayed for presidential intervention. Major Salcedo on behalf of the Office of the President of the Philippines answered that no action could be taken on their cases "in view of the policy of retrenchment enunciated by the ACCFA Board of Governors." , Finally, they turned to the court but it dismissed the petition ruling that they have not exhausted all remedies.ISSUE:

WON the petitioner-appellants were validly dismissed.

HELD:

NO. Petitioners' dismissal was patently illegal. No necessity there was to resort first to administrative remedies. Acceptance of one-month separation pay and terminal leave pay would not amount to estoppel. The reason is plain. Employer and employee, obviously, do not stand on the same footing. The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of job, he had to face the harsh necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners did not relent on their claim. They pressed it. They are deemed not to have waived any of their rights.12. BROTHERHOOD LABOR UNITY MOVEMENT vs HON. RONALDO ZAMORA, ET AL.G.R. No. L-48645 January 7, 1987

FACTS:

Petitioners-members of Brotherhood Labor Unit Movement of the Philippines (BLUM), worked as cargadores or pahinante since 1961 at the SMC Plant. Sometime in January 1969, the petitioner workers numbering 140 organized themselves and engaged in union activities.

Believing that they are entitled to overtime and holiday pay, the petitioners aired their gripes and grievances but it was not heeded by the respondents. One of the union member was dismissed from work. Hence, the petitioners filed a complaint of unfair labor practice against respondent SMC on the ground of illegal dismissal.

On the other hand, SMC argued that the complainant are not or have never been their employees but they are the employees of the Guaranteed Labor Contractor, an independent labor contracting firm

Labor Arbiter Nestor Lim rendered a decision in favor of the complainants which was affirmed by the NLRC

On appeal, the Secretary set aside the NLRC ruling stressing the absence of an employer-employee relationship

ISSUE:

Whether an employer-employee relationship exists between petitioners and respondent San Miguel Corporation

HELD:

YES. In determining the existence of an employer-employee relationship, the elements that are generally considered are the following:

(a) the selection and engagement of the employee;

(b) the payment of wages;

(c) the power of dismissal; and

(d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It is the called "control test" that is the most important element

In the CAB, petitioners worked continuously and exclusively for an average of 7 years for the company. Considering the length of time that the petitioners have worked, there is justification to conclude that they were engaged to perform activities necessary or desirable in the usual business of trade of the respondent. Hence, petitioners are considered regular employees.

Even assuming that there is a contract of employment executed between SMC and the said labor contractor, the court ruled that Guaranteed and Reliable Labor contractors have neither substantial capital nor investment to qualify as an independent contractor under the law. The premises, tools and equipments used by the petitioners in their jobs are all supplied by the respondent SMC. It is only the manpower or labor force which the alleged contractors supply, suggesting the existence of a "labor only" contracting scheme prohibited by law

It is important to emphasize that that in a truly independent contractor-contractee relationship, the fees are paid directly to the manpower agency in lump sum without indicating or implying that the basis of such lump sum is the salary per worker multiplied by the number of workers assigned to the company.

In the CAB, the alleged independent contractors were paid a lump sum representing only the salaries the workers were entitled to, arrived at by adding the salaries of each worker which depend on the volume of work they had accomplished individually. Therefore, there is no independent contractor-contractee relationship.

WHEREFORE, PETITION IS GRANTED.

13. DY KEH BENG vs. INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES, ET AL.

G.R. No. L-32245 May 25, 1979

FACTS:

A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket factory, for discriminatory acts by dismissing Carlos N. Solano and Ricardo Tudla for their union activities. After preliminary investigation was conducted, a case was filed in the Court of Industrial Relations for in behalf of the International Labor and Marine Union of the Philippines.Dy Keh Beng contended that he did not know Tudla and that Solano was not his employee because the latter came to the establishment only when there was work which did on pakiaw basis, and worked on piece basis.

The hearing examiner found that Solano and that Tudla became employees of DY KEH BENG from may 1953 and July 1955, respectively, and that both worked with establishment continuously although compensated on piece basis. This report was adopted in toto by the court of industrial relations. The CIR found DY KEH BENG guilty of unfair labor practice and was affirmed by the court en banc.

ISSUE:

WON there exists an employee employer relation between petitioner Dy Keh Beng and the respondents Solano and Tudla.

HELD:

YES. An employee-employer relationship was found to have existed between Dy Keh Beng and complainants Tudla and Solano, although Solano was admitted to have worked on piece basis.

The test of the existence of employee and employer relationship is whether there is an understanding between the parties that one is to render personal services to or for the benefit of the other and recognition by them of the right of one to order and control the other in the performance of the work and to direct the manner and method of its performance. It should be borne in mind that the control test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right.

Parenthetically, since the work on the baskets is done at Dy's establishments, it can be inferred that the proprietor Dy could easily exercise control on the men he employed. Circumstances must be construed to determine indeed if payment by the piece is just a method of compensation and does not define the essence of the relation.7 | LABOR RELATIONS Digested Cases | Venessa Barbiran, Year 3 | UPang