LAMBO vs.
NLRC
FACTS:
Petitioners Avelino Lambo and Vicente Belocura were employed as tailors by private respondents J.C.
Tailor Shop and/or Johnny Co on September 10, 1985 and March 3, 1985, respectively.
o They worked from 8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays.
o As in the case of the other 100 employees of private respondents, petitioners were paid on a
piece-work basis, according to the style of suits they made. Regardless of the number of pieces
they finished in a day, they were each given a daily pay of at least P64.00.
On January 17, 1989, petitioners filed a complaint against private respondents for illegal dismissal and
sought recovery of overtime pay, holiday pay, premium pay on holiday and rest day, service incentive
leave pay, separation pay, 13th month pay, and attorneys fees.
LA: guilty of illegal dismissal
NLRC: reversed LA; found petitioners had not been dismissed but merely threatened with a closure of
the business if they insisted on their demand of straight payment of minimum wage.
o According to the NLRC, during a meeting, the employees voted to maintain the company policy
of paying them according to the volume of work finished at the rate of P18.00 per dozen of
tailored clothing materials. Only petitioners allegedly insisted that they be paid the minimum
wage and other benefits. The NLRC held petitioners guilty of abandonment of work and
accordingly dismissed their claims except that for 13th month pay.
ISSUE + RULING
Were they illegally dismissed? YES.
There is no dispute that petitioners were employees of private respondents although they were paid not
on the basis of time spent on the job but according to the quantity and the quality of work produced by
them.
There are two categories of employees paid by results:
1. (PETITIONERS BELONG HERE) Those whose time and performance are supervised by the
employer. (Here, there is an element of control and supervision over the manner as to how the work
is to be performed. A piece-rate worker belongs to this category especially if he performs his work
in the company premises.); and
2. Those whose time and performance areunsupervised. (Here, the employers control is over the
result of the work. Workers on pakyao and takay basis belong to this group.)
o Both classes of workers are paid per unit accomplished. Piece-rate payment is generally
practiced in garment factories where work is done in the company premises, while payment
onpakyao and takay basis is commonly observed in the agricultural industry, such as in sugar
plantations where the work is performed in bulk or in volumes difficult to quantify.
In this case, private respondents exercised control over the work of petitioners. As tailors, petitioners
worked in the company premises from 8:00 a.m. to 7:00 p.m. daily, including Sundays and
holidays. The mere fact that they were paid on a piece-rate basis does not negate their status as
regular employees of private respondents.
o The term wage is broadly defined in Art. 97 of the Labor Code as remuneration or earnings,
capable of being expressed in terms of money whether fixed or ascertained on a time, task,
piece or commission basis. Payment by the piece is just a method of compensation and does
not define the essence of the relations. Nor does the fact that petitioners are not covered by the
SSS affect the employer-employee relationship.
The following factors show that petitioners, although piece-rate workers, were regular employees of
private respondents: (1) within the contemplation of Art. 280 of the Labor Code, their work as tailors
was necessary or desirable in the usual business of private respondents, which is engaged in the
tailoring business; (2) petitioners worked for private respondents throughout the year, their employment
not being dependent on a specific project or season; and, (3) petitioners worked for private respondents
for more than one year.
Employers failed to prove a deliberate and unjustified refusal to resume employment.
o Other than the self-serving declarations in the affidavits of their two employees, private
respondents did not adduce proof of overt acts of petitioners showing their intention to abandon
their work.
Award: reinstatement + backwages limited to 3 years without deductions/qualifications
o LA correctly ordered private respondents to give separation pay. Considerable time has lapsed
since petitioners dismissal, so that reinstatement would now be impractical and hardly in the
best interest of the parties. In lieu of reinstatement, separation pay should be awarded to
petitioners at the rate of one month salary for every year of service, with a fraction of at least six
(6) months of service being considered as one (1) year.
o PLUS overtime pay, holiday pay and 13th month pay
