ECAL VS.

NLRC being subject to the control of the employer, except

only as to the results of the work.
- Illegal dismissal for petitioners with Hi-Line
- In legitimate labor contracting, the law creates an
- Conditions for job contracting: (1) contractor employer-employee relationship for a limited
carries on an independent business & undertakes purpose, i.e., to ensure that the employees are paid
contract work on his own account under his own their wages. The principal employer becomes
responsibility according to his own manner and jointly and severally liable with the job contractor,
method, free from control and direction of his only for the payment of the employees’ wages
employer or principal in all matters connected with whenever the contractor fails to pay the same.
the performance of the work except as to the Other than that, the principal employer is not
results thereof, and (2) The contractor has responsible for any claim made by the employees.
substantial capital or investment in the form of - In labor-only contracting, the statute creates an
tools, equipments, machineries, work premises,
employer-employee relationship for
and other materials which are necessary in the
a comprehensive purpose: to prevent a
conduct of his business
circumvention of labor laws. The contractor
- Labor only contracting: (1) Does not have is considered merely an agent of the principal
substantial capital or investment in the form of employer and the latter is responsible to the
tools, equipments, machineries, work premises and employees of the labor-only contractor as if such
other materials; and (2) workers recruited and employees had been directly employed by the
placed by such person are performing activities principal employer.
which are directly related to the principal business - The language of a contract is not, however,
or operations of the employer in which workers are
determinative of the parties’ relationship; rather it is
habitually employed
the totality of the facts and surrounding
- Labor-only contracting = prohibited; person acting circumstances of the case. A party cannot dictate,
as contractor shall be considered merely as an by the mere expedient of a unilateral declaration in
agent or intermediary of the employer who shall be a contract, whether as labor-only contractor or job
responsible to the workers in the same manner and contractor, it being crucial that its character be
extent as if the latter were directly employed by him measured in terms of and determined by the criteria
- Ecal is a labor-only contractor who was a former set by statute
employee of the company - Sunflower does not have
- A finding that Isagani Ecal is a "labor-only" substantial capitalization or investment; the lot,
contractor is equivalent to a finding that an building, machineries and all other working tools
employer-employee relationship exists between the utilized by respondents in carrying out their tasks
company and Ecal including the latter's "contract were owned and provided by SMC
workers" herein petitioners, the relationship being - existence of an employer-employee relationship
such as provided by the law itself between SMC and Aballa
NERI V NLRC BAGUIO V NLRC
- Petitioners were hired by BCC (corporation for - Lupo + GMC, construction of annex building in
specific services to clientele), assigned to FEBTC; GMC plant, petitioners are laborers; Lupo
they filed petition for recognition as FEBTC regular terminated their services
employees - SC upholds the solidary liability of GMC and LUPO
- BCC is an independent contractor. One is not for the latter's liabilities in favor of employees whom
required to possess both a) substantial capital and he had earlier employed and dismissed. Recovery,
b) investment in the form of tools, equipment, however, should not be based on Article 106 of the
machinery, work premises, among others, to be Labor Code. This provision treats specifically of
considered a job contractor. Possession of either "labor-only" contracting, which is not the set-up
attribute is sufficient for the purposes of complying between GMC and LUPO.
with one of the conditions for the establishment of - Since the construction of an annex building inside
permissible job contracting.
the company plant has no relation whatsoever with
SMC V ABALLA the employer's business of flour and feeds
manufacturing, "labor-only" contracting does not
- SMC & Sunflower Cooperative = had contract of exist. Article 106 is thus inapplicable.
service, renewable until terminated; respondents - GMC qualifies as an "indirect employer." As an
rendered services to SMC and filed petition for indirect employer, and for purposes of determining
recognition as SMC EEs the extent of its civil liability, GMC is deemed a
- The test to determine the existence of independent "direct employee" of his contractor's employees
contractorship is whether one claiming to be an pursuant to the last sentence of Article 109 of the
independent contractor has contracted to do the Labor Code. As a consequence, GMC cannot
work according to his own methods and without escape its joint and solidary liability to petitioners.

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- Further, Article 108 of the Labor Code requires the merely provides the personnel to work for the
posting of a bond to answer for wages that a principal employer.
contractor fails to pay - As Prime is a labor-only contractor, the workers it
supplied to the petitioner should be considered
PCI-AC V. NLRC
employees of the petitioner.
- PCIB – agent; PCI-AC – principal employer; PRIME
– labor-only contractor
- PCIB – computer project, had agreement with PCI- WACK-WACK V. NLRC
AC; PCI-AC is to run the computer system, PCIB
- Fire destroyed Wack-Wack clubhouse; employee
agreed with PCI-AC to provide encoders; PCIB had
suspension; Union went to strike; had an
contract with PRIME for manpower
agreement for special separation benefit privilege
- Santelices was hired by Prime then after 6yrs was
(given priority basis for employment by contractors
terminated
or Club upon resumption of operations)
- The External Job Contract between Prime and
- Wack-Wack & BSMI agreement = provide
PCIB must be read in conjunction with the
management services. 3 former EEs were among
Computer Services Agreement between PCIB and
hired. Wack Wack also had several other
the petitioner.
contractors.
- Hence, although the parties in the External Job
- The 3 former EEs were then dismissed by BSMI.
Contract are only Prime and PCIB, the legal
- BSMI is not a labor-only contractor
consequences of such contract must also be made
- An independent contractor is one who undertakes
to apply to the petitioner. Under the circumstances,
job contracting a person who: (a) carries on an
PCIB merely acted as a conduit between the
independent business and undertakes the contract
petitioner and Prime. The project was under the
work on his own account under his own
management and supervision of the petitioner and
responsibility according to his own manner and
it was the petitioner which exercised control over
method, free from the control and direction of his
the persons working on the project.
employer or principal in all matters connected with
- Under the law, any person (hereinafter referred to
the performance of the work except as to the
as the "principal employer") who enters into an
results thereof; and (b) has substantial capital or
agreement with a job contractor, either for the
investment in the form of tools, equipments,
performance of a specified work or for the supply of
machineries, work premises and other materials
manpower, assumes responsibility over the
which are necessary in the conduct of the business.
employees of the latter.18 However, for the purpose
- In determining the existence of an independent
of determining the extent of the principal employer's
contractor relationship, several factors may be
liability, the law makes a distinction between
considered, such as, but not necessarily confined
legitimate job contracting and labor-only
to, whether or not the contractor is carrying on an
contracting.
independent business; the nature and extent of the
- In the event that the contractor or subcontractor
work; the skill required; the term and duration of the
fails to pay the wages of his employees in
relationship; the right to assign the performance of
accordance with this Code, the employer shall be
specified pieces of work; the control and
jointly and severally liable with his contractor or
supervision of the work to another; the employer’s
subcontractor to such employees to the extent of
power with respect to the hiring, firing, and payment
the work performed under the contract, in the same
of the contractor’s workers; the control of the
manner and extent that he is liable to employees
premises; the duty to supply premises, tools,
directly employed by him.
appliances, materials and labor; and the mode,
- Considering the terms of the External Job Contract
manner and terms of payment.
executed by Prime and PCIB, it cannot be doubted
- In accordance with its own recruitment policies, the
that Prime is a labor-only contractor. Under the
respondents were made to sign applications for
contract, Prime merely acted as a placement
employment, accepting the condition that they were
agency providing manpower to the petitioner
hired by BSMI as probationary employees only.
through PCIB. The service rendered by Prime in
Unfortunately, BSMI was impelled to terminate the
favor of the petitioner was not the performance of a
services of the respondents on the ground of
specific job, but the supply of qualified personnel to
redundancy. This right to hire and fire is another
work as data encoders and computer attendants in
element of the employer-employee
connection with the petitioner's project.
relationship45 which actually existed between the
- In short, the legitimate job contractor provides
respondents and BSMI, and not with Wack Wack.
services while the labor-only contractor provides
only manpower. The legitimate job contractor
undertakes to perform a specific job for the
principal employer while the labor-only contractor

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 - The authority of the sheriff is limited to money or
properties belonging to RMC.
DBP v. HON. SEC. OF LABOR

- What Art. 110 establishes is a preference of credit

in favor of employees. This simply means that
during bankruptcy, insolvency or liquidation
proceedings involving the existing properties of the
FILSYN V NLRC employer, the employees have the advantage of
- FILSYN, domestic corp. for polyester fiber, having their unpaid wages satisfied ahead of
contracted DE LIMA for janitorial services. Loterte certain claimed which may be proved therein.
was deployed at FILSYN, working there for about - Art. 110 did not sweep away the overriding
10 yrs. preference accorded under the scheme of the Civil
- DE LIMA is an independent job contractor, Code to tax claims of the government or any
therefore no direct employer-employee relationship subdivision thereof which constitutes a lien upon
exists between FILSYN and Loterte properties of the insolvent.
- Under the Labor Code, two (2) elements must exist DBP V. NLRC
for a finding of labor-only contracting: (a) the
person supplying workers to an employer does not - The right to preference given to workers under Art.
have substantial capital or investment in the form of 110 cannot exist in any effective way prior to the
tools, equipment, machineries, work premises, time of its presentation in distribution proceedings.
among others, and (b) the workers recruited and It will find application when, in proceedings like
placed by such persons are performing activities insolvency, such unpaid wages shall be paid in full
directly related to the principal business of before the “claims of the Government and other
such employer. creditors” may be paid.
- DE LIMA is a going concern duly registered with - But, for an orderly settlement of a debtor’s assets,
substantial capitalization of P1,600,000.00, all creditors must be convened, their claims
P400,000.00 of which is actually subscribed. ascertained and thereafter the preferences
Hence, it cannot be considered as engaged in determined in the course of judicial proceedings
labor-only contracting being a highly capitalized which have for their object the subjection of the
venture. property of the debtor to the payment of his debt.
- Moreover, while the janitorial services performed by
Felipe Loterte pursuant to the agreement between
FILSYN and DE LIMA may be considered directly
related to the principal business of FILSYN which is
the manufacture of polyester fiber, nevertheless,
they are not necessary in its operation. On the
contrary, they are merely incidental thereto, as
opposed to being integral, without which production
and company sales will not suffer.
DBP v. MINISTER OF LABOR

- Samahan filed complaint against RMC for non-

payment of PD 1713’s daily wage increase &
ECOLA. RMC was to pay. DBP instituted
extrajudicial foreclosure on properties as a result of
RMC’s failure to meet obligations on RMC’s loan
from DBP.
- Because of its impact on the entire system of credit,
Art. 110 of LC cannot be viewed in isolation of, &
must always be reckoned with the provisions of the
Civil Code on concurrence & preference of credits,
thus it may not be invoked by employees of RMC in
the absence of a formal declaration of bankruptcy
or judicial liquidation order. Hence, the disputed
garnishment of the money paid by Rosario Mills to
DBP corresponding to the partial installment of the
sales price of the foreclosed properties is not
justified.

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 CASTOR-GARUPA V ECC

- For the increased risk theory to apply in

compensation cases, the claimant must adduce
reasonable proof between his work and the cause
of the disease, or that the risk of contracting the
disease was increased by the claimant’s working
conditions. Strict rules of evidence are not
applicable in claims for compensation. The degree
of proof required under PD 626 is merely
substantial evidence.
- Presidential Decree No. 626, as amended, is said
DE JESUS V ECC
to have abandoned the presumption of
- Ester = telephone operator at PNR, developed lung compensability and the theory of aggravation
cancer, died prevalent under the Workmen’s Compensation
- Since the ailments of the deceased, as found by Act.  Despite such abandonment, however, the
her attending physician, manifested themselves in present law has not ceased to be an employees’
1978 or beyond January 1, 1975, the law governing compensation law or a social legislation
the petitioner's claim is the New Labor Code
LAZO V ECC
- for the sickness and the resulting disability or death
to be compensable, the sickness must be the result - Security guard = rendered overtime, asked
of an occupational disease listed under Annex "A" permission from superior to bring home sack of
of the Rules with the conditions set therein rice, on his way home, he suffered injuries
satisfied; otherwise, proof must be shown that the - 'where an employee, after working hours,
risk of contracting the disease is increased by the attempted to ride on the platform of a service truck
working conditions of the company near his place of work, and, while
- We regret to note, however, that the allegations thus attempting, slipped and fell to the ground and
have not been substantiated by the petitioner. was run over by the truck, resulting in his death, the
While this court has always maintained that the accident may be said to have arisen out of or in the
strict rules of evidence are not applicable in claims course of employment, for which reason his death
for compensation, the basic rule that a mere is compensable
allegation is not evidence should not be - There is no evidence on record that petitioner
disregarded. The petitioner has failed to prove by deviated from his usual, regular homeward route or
competent evidence that the risk of contracting said that interruptions occurred in the journey.
diseases were indeed increased by the working - There is no reason, in principle, why employees
conditions concomitant with the deceased's should not be protected for a reasonable period of
employment time prior to or after working hours and for a
ORATE V CA reasonable distance before reaching or after
leaving the employer's premises
- In workmen's compensation cases, the governing
DE GUIA V ECC
law is determined by the date when the claimant
contracted the disease. An injury or illness which - Storekeeper who was eventually promoted to
intervened prior to January 1, 1975, the effectivity supervising revenue enforcement officer; visual
date of P.D. No. 626, shall be governed by the impairment
provisions of the Workmen's Compensation Act, - The Supreme Court held that De Guia's "diabetic
while those contracted on or after January 1, 1975 retinopathy" is a complication linked with his
shall be governed by the Labor Code, as amended diabetic condition, from which he was suffering for
by P.D. No. 626. Corollarily, where the claim for twenty-five (25) years. Petitioner’s eye condition
compensation benefit was filed after the effectivity was not contracted by reason of his employment
of P.D. No. 626 without any showing as to when the but came about as a complication of an underlying
disease intervened, the presumption is that the disease. Neither can it be said, therefore, that the
disease was contracted after the effectivity of P.D. risk of contracting the eye ailment was increased by
No. 626. his working conditions for irrespective of those
- For breast carcinoma and resulting disability to be conditions, the complication could have set in.
compensable, the claimant must prove, by
substantial evidence, either of two things: (a) that RARO V ECC
the sickness was the result of an occupational - The law, as it now stands requires the claimant to
disease listed under Annex "A" of the Rules on
prove a positive thing – the illness was caused by
Employees' Compensation; or (b) if the sickness is
employment and the risk of contracting the disease
not so listed, that the risk of contracting the disease
is increased by the working conditions. To say that
was increased by the claimant's working conditions.
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 since the proof is not available, therefore, the trust use there. Other exceptions undoubtedly are
fund has the obligation to pay is contrary to the equally justified, dependent on their own peculiar
legal requirement that proof must be adduced. The circumstances.
existence of otherwise non-existent proof cannot be - That part of the road where Pablo was killed is in
presumed. very close proximity to the employer's premises. It
- The new law discarded, among others, the is an "access area" "so clearly related to the
concepts of "presumption of compensability" and employee's premises as to be fairly treated as a
"aggravation" and substituted a system based on part of the employer's premises." That portion of
social security principles. The present system is the road bears "so intimate a relation" to the
also administered by social insurance agencies company's premises. It is the chief means of
under the Employees' Compensation Commission. entering the IDEGO premises, either for the public
or for its employees. The IDEGO uses it, if
IDECO V WCC
extensively in pursuit of its business. It has rights of
- Man assaulted about 20 meters away from main passage over the road, either legal, if by virtue of
IDECO gate easement, or contractual, if by reason of lease.
- The general rule in workmen's compensation law Pablo was using the road as a means of access to
known as the "going & coming rule," simply stated, his work solely because he was an employee.
is that "in the absence of special circumstances, an o For this reason, the IDEGO was under obligation
employee injured in, going to, or coming from his to keep the place safe for its employees. Safe,
place of work is excluded from the benefits of that is, against dangers that the employees
workmen's compensation acts." might encounter therein, one of these dangers
- This rule, however, admits of four well-recognized being assault by third persons. Having failed to
exceptions, to wit: (1) where the employee is take the proper security measures over the said
proceeding to or from his work on the premises of area which it controls, the IDEGO is liable for the
his employer; (2) where the employee is about to injuries suffered by Pablo resulting in his death
enter or about to leave the premises of his BELARMINO V ECC
employer by way of the exclusive or customary
means of ingress and egress; (3) where the - 8-month pregnant wife who slipped and fell on the
employee is charged, while on his way to or from classroom floor, forced birth and died from post-
his place of employment or at his home, or during birth complications
his employment, with some duty or special errand - The illness, septicemia post partum, which resulted
connected with his employment; and (4) where the in the death of Oania Belarmino, is admittedly not
employer, as an incident of the employment, listed as an occupational disease in her particular
provides the means of transportation to and from line of work as a classroom teacher. However, as
the place of employment pointed out in the petition, her death from that
- These states find something sacred about the ailment is compensable because an employment
employment premises and define "premises" very accident and the conditions of her employment
broadly, not only to include premises owned by the contributed to its development.
employer, but also premises leased, hired, supplied - Her fall on the classroom floor brought about her
or used by him, even private alleyways merely premature delivery which caused the development
used by the employer. Adjacent private premises of post partum septicemia which resulted in death.
are protected by many states, and a few protect the Her fall therefore was the proximate or responsible
employee even on adjacent public sidewalks and cause that set in motion an unbroken chain of
streets. Where a city or any employer owns or events, leading to her demise.
controls an island, all its streets are protected
HINOGUIN V ECC
premises.
- Off-premises injuries to or from work, in both liberal - Hinoguin + companions = soldiers; received verbal
and narrow states, are compensable (1) if the permission from Capt. For a trip, was told to bring
employee is on the way to or from work in a vehicle their issued firearms because it was a critical place;
owned or supplied by the employer, whether in a said it was for important matters but in reality it was
public (e.g., the employer's street car) or private a personal matter; on way back to base, companion
conveyance; (2) if the employee is subject to call at accidentally fired his gun & Hinoguin
all hours or at the moment of injury; (3) if the - Amended (Implementing) Rules, Rule III, Section 1
employee is travelling for the employer, i.e., (a) reads (a) For the injury and the resulting
travelling workers; (4) if the employer pays for the disability or death to be compensable, the injury
employee's time from the moment he leaves his must be the result of an employment accident
home to his return home; (5) if the employee is on satisfying all of the following grounds: (1) The
his way to do further work at home, even though on employee must have been injured at the place work
a fixed salary; (6) where the employee is required requires him to be; (2) The employee must have
to bring his automobile to his place of business for been performing his official functions; and (3) If the

5
 injury is sustained elsewhere, the employee must hour duty doctrine should not be sweepingly
have been executing an order for the employer applied to all acts and circumstances causing the
- The concept of a “work place” referred to in Ground death of a police officer but only to those which,
1, for instance, cannot always be literally applied to although not on official line of duty, are nonetheless
a soldier on active duty status. In the instant case, basically police service in character.
Aritao was not, of course, Carranglan. But the
soldiers had permission from their Commanding
Officer to proceed to Aritao, and it appears to us
that a place which soldiers have secured lawful
permission to be at cannot be very different, legally
speaking, from a place where they are required to
go by their commanding officer. They were not on
vacation leave. VALERIANO V ECC
- It may be noted in this connection that a soldier on
- Firetruck driver; he & friend’s jeepney had a head-
active duty status is really on 24 hours a day official
on collision with another vehicle (nighttime);
duty status and is subject to military discipline and
Valeriano was severely injured.
military law 24 hours a day. He is subject to call
- Disability benefitts are granted an employee who
and to the orders of his superior officers at all
sustains an injury or contracts a sickness resulting
times, 7 days a week, except, of course, when he is
in temporary total, permanent total, or permanent
on vacation leave status (which Sgt. Hinoguin was
partial, disability. For the injury and the resulting
not). Indeed, it appears to us that a soldier should
disability to be compensable, they must have
be presumed to be on official duty unless he is
necessarily resulted from an accident arising out of
shown to have clearly and unequivocally put aside
and in the course of employment.
that status or condition temporarily by, e.g., going
- The injury and the resulting disability sustained by
on an approved vacation leave.
reason of employment are compensable regardless
GSIS V CA of the place where the injured occurred, if it can be
proven that at the time of the injury, the employee
- PNP police in Vigan = driving tricycle & ferrying was acting within the purview of his or her
passengers when SPO4 confronted him regarding employment and performing an act reasonably
his tour of duty; verbal argument, eventual death of necessary or incidental thereto.
SPO2 - Petitioner Valeriano was not able to demonstrate
- Taking together existing jurisprudence and the solidly how his job as a firetruck driver was related
pertinent guidelines of the ECC with respect to to the injuries he had suffered. That he sustained
claims for death benefits, namely: (a) that the the injuries after pursuing a purely personal and
employee must be at the place where his work social function is clear from the records of the case.
requires him to be; (b) that the employee must have His injuries were not acquired at his work place; nor
been performing his official functions; and (c) that if were they sustained while he was performing an
the injury is sustained elsewhere, the employee act within the scope of his employment or in pursuit
must have been executing an order for the of an order of his superior.
employer, it is not difficult to understand then why - Following the rationalization in GSIS, the 24- hour-
SPO2 Alegre’s widow should be denied the claims duty doctrine cannot be applied to petitioner's case,
otherwise due her. because he was neither at his assigned work place
- The matter SPO2 Alegre was attending to at the nor in pursuit of the orders of his superiors when he
time he met his death, that of ferrying passengers met an accident.
for a fee, was intrinsically private and unofficial in - The policy is to extend the applicability of
nature proceeding as it did from no particular Presidential Decree No. 626 to as many qualified
directive or permission of his superior officer. employees as possible, but this must be balanced
- That he may be called upon at any time to render by the equally vital interest of denying undeserving
police work as he is considered to be on a round- claims for compensation.
the-clock duty and was not on an approved
vacation leave will not change the conclusion
arrived at considering that he was not placed in a
situation where he was required to exercise his
authority and duty as a policeman.
- At any rate, the 24-hour duty doctrine, as applied to
policemen and soldiers, serves more as an after-
the-fact validation of their acts to place them within
the scope of the guidelines rather than a blanket
license to benefit them in all situations that may
give rise to their deaths. In other words, the 24-