5. lopez vs mwss

428 SUPREMECOURTREPORTSANNOTATED

Lopezvs.MetropolitanWaterworksandSewerageSystem

G.R.No.154472.June30,2005.*

ALEXANDERR.LOPEZ,HERMINIOD.PEA,SALVADORT.ABUEL, GEORGE F. CABRERA, JOEL M. CARREON,DAMASO M. CERVANTEX, JR., RICARDO V. CUEVAS,ROBERTO S. DAGDAG, IRENEO V. DURAY, OMER S.ESPIRIDION, MANOLO V. FORONDA, RONITO R. FRIAS,ANGEL C. GARCIA, VICTORINO A. ILAGAN, DENNIS S.LEGADOS, MIGUEL J. LOPEZ, EMMANUEL R. MERILLO,EDGAR E. NATARTE, MAMERTO S. NEPOMUCENO,MARVIN R. PADURA, ROMEO C. RAMILO, ALBERTO R.RAMOS, JR., RONALDO A. SARMIENTO, ARMANDO S.SIONGCO, JOSE TEODY P. VELASCO, RICO P.VILLANUEVA, SAMUEL L. ZAPATERO, EDGARDO D.AGUDO, ROBERTO A. ARAA, BENJAMIN ASUNCION,JULIAN C. BACOD, EDWIN N. BORROMEO, ALBERTO T.BULAONG, DANIEL CADAOM, ROBERTO S. CAYETANO,ALFREDOC.CLAVIO,EDGARDOA.DABUET,NEILDAVID,ALEXANDER B. ESTORES, NOEL GUILLEN, RODOLFOMAGNO, REY MANLEGRO, ROMEO V. MORALES,ROSAURO NADORA, EUGENIO M. ORITO, RONILO P.PAREDES, ADGARDO R. PINEDA, CARLITO SAMARTINO,ARTUROC.SARAOS, JR., JOHNELL.TORRIBIO,ANTONIOA. VERGARA, JIMMY C. UNGSON, NOEL D. AMOYO,VIRGILIO L. AZARCON, RICARDO M. BROTONEL,EMERALDOC.CABAYA,JULIEG.CHAN,LUISC.CLAVIO,LUIST.CANIZO,ERNESTOF.DAVID,EDGARB.DEVERA,REYNALDOA.DUMLAO,ARTUROR.DYCHITAN,ROMANS. FAJARDO, BERNARDINO B. MACALDO, ROMEO D.MANASIS,JR.,MARIOR.MANGALINDAN,VICTORIANOC.MARTINEZ,LEONARDOD.MIRALLES,ROGELIOE.PACER,ROSENDOL. PANGILINAN,NOLIH. POLINAG,DIOSDADOM.PUNZALAN,REYNALDOC.GATPO,CIRILOM.SANTOS,RAMON A. ZAMBRANA, PIO L. ASTORGA, ROLANDO G.CAGALIN

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*ENBANC.

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GAN, ANGELITO A. CAUDAL, FRANCISCO S. DELOSSANTOS, CARLOS E. LOMIBAO, ROMEO S.MALABANAN,LIBERATO B. MANGENTE, JULIAN M. MARTINEZ,BERNARDO S.MEDINA,MELVIN R.MENDEZ, ALBERT C.MIRADOR, RENEE S. OCAMPO, DAVID J. PASCUA,AMORSOLO M. PILARTA, ROLANDO C. REYES, GAVINOSAN GABRIEL, JR., PERCON F. SISON, PLARIDEL L.TANGLAO, RUBEN R. TAEDO, JR., RENATO G. TARUC,RONALDOD.C.VENTURA,ANGELL.VERTUCIO,ERWINT.VIDAD, WILLIAM M. AGANAON, ALEX P. MANABAT,FRANCISCOALMONTE,RODRIGOC.ANTONIO,DOUGLASR. AQUINO, REMEGIO R. ATIENZA, ABRAHAM C.BALICANTE, MELENCIOM. BAGNGUIS, JR., GERARDO T.BULAONG, MELITANTE I. CASTRO, MEDARDO S.CATACUTAN,VIRGILIOT.CATUBIG,JOSES.CHIONG,NELT. COLOBONG, FELIPE C. COLLADO, RANDY T.CORTIGUERRA, ANTONIO D. DELA CRUZ, JESUS C.DINGLE,EDGARDON.GARCIA,CELSOZ.GOLFO,NONITOV.FERNANDEZ,LARRYHIDALGO,FRANCISCOB.JAO,JR.,CARLOS P. LAGLIVA, RICO L. LARRACAS, PEDRO V.ABARIDES, RUDY S. AGUINALDO, REGINALD F.ALCANTARA, SERAFIN ALCANTAR, JR., FELIX H.ALEJANDRO, MIGUEL ALTONAGA, JOSE T. AGUILAR,PEDRO AGUILAR, JR., NOEL A. ALIPIO, WILLIAM A.ALMAZAR, REYNALDO S.D. ALVAREZ, FLORIZEL M.AMBROCIO, JOSEA.ASPE,ROBERTOJ.ARCEO,ERNESTOV. ARUTA, MILLARDO DL. ATENCIO, ERNESTO G.AVELINO, WENCESLAO C. BABEJAS, ARNOLD F.BALINGIT,HEBERTF.BARCELON,MARLOND.BORROZO,FLORENTINOBAS,JR.,LEARNEDA.BAUTISTA,ARMANN.BORROMEO,CARLITOF.BARTOLO,CARLOSM.CABERTO,ARTUROS.CAJUCOM,DIEGOCALDERON,JR.,WILLIAMA.CAMPOS,JORGECANONIGO,JR.,ANGELITOM.CAPARAC,EMMANUEL L. CAPIT, LAURO S. CASTRO, TOMEO B.CASTALONE, VERZNEV S. CATUBIG, ARMANDO

CERVANTES, CALIXTO P. COLADA, JR., JONATHAN P.CORONEL,JOE

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NOELP.CRUZ,FRANCISCOCRUZ,JR.,MARIANOB.CRUZ,JR.,JOSEJ.DALUMPINES,SANITOS.DEJESUS,JOSEG.DELEON, CRISANTO DE LOS REYES, EMMANUEL C. DEVERA, RODOLFO DE VERA, JR., HERMAN C. DE VILLAR,IKES.DELFIN,PEDROE.DESIPEDA,ERAOA.DIONISIO,ALFREDOL.DUGAYO,REYNALDOV.DURAY,EUGENIOC.ELEAZAR, RAFAEL U. ENCINA, ORLANDO C. ESCOLAR,ALLANP.ESPINA,LAUROS.ESPINA,ISRAELF.FALLURIN,ORIEL A. FESTEJO, EDGARDO V. FIGUEROA, RALPHFLORES, FERDINAND B. FUGGAN, NOEL Z. GABOT,EDUARDOM.GALANG,VICENTED.GALLARDO,FRESCOB. GALO, ROSAURO G. GAMBOA, MARIO S. GABRIEL,ROBERTO C. GAPASIN III, ROMUALDO GAPASIN, JR.,DANILO C. GARCIA, RESTITUTO S. GARCIA, NOEL B.GATDULA,BENJIE S.GERONIMO,ARTUROR.GLORIOSO,ISIDRO S. GOMED, JR., MEDEL P. GREGORIO, REY T.HECHANOVA, VONREQUITO HERBUELA, CELSO F.IGNACIO, JR., CHARLIE S. IGNACIO, ILDEFONSO F.ILDEFONSO,GAUDENICOM. INTAL, RIZALITOM. INTAL,RENATOHERRERO,BIENVENIDOL. JAO, JR.,FERDINANDP. LAGMAN, RENEIL M. LAREZA, ALMARIO M. LAXA,ARTHUR G. LEVISTE, ESTEBAN T. LEGARTO, RAMON G.LIWANAG, ELISEO A. LU, RAYMUNDO LUSTICA, JR.,FERNANDO D. MABANTA, NESTOR F. MAGALLANES,EDWIN A. MAGPAYO, MICHAEL I. MAGRIA, ARIEL M.MALAPAD, RAMON O. MAMUCOD, FERDINAND P.MANINGAS,RONALDD.R.MANUEL,ROLANDOF.MAPUE,CHITO C. MARCO, ERNESTO S. MARCHAN, JOSEPH B.MARIANO,FRANCISJ.MARIMON,JOHNL.MARTEJA,JOSEE.MASE,JR.,BERNARDOS.MEDINA,JOEREYB.MERIDOR,SUSANOS.MIRANDA,EDGARDOC.MONTOYA,MARLONB. MORADA, ROMEO R. DEL MUNDO, REYNALDO C.NAREDO, EDGARDO R. NEPOMUCENO, RODEL S.NEPOMUCENO, ROMMEL NIYO, ROMULO P. OLARTE,GEORGE N. OLAVERE, EDUARDO ONG, MARIO S.

PAGSANJAN,RENALDC.PALAD,

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GAUDENCIO G. PEDROCHE, RONALDO DELA CRUZPEREA, EDILBERTO C. PIGUL, ERNESTO PINGUL,AGNESIO D. QUEBRAL, JAMES M. QUINTO, RICARDO R.RAMOS,GENEROSOREGALADO,JR.,EDUARDOL.REYES,RAMON C. REYES, LARRY S. RECAMADAS, ANTONIO B.REDONDO, FEDERICO M. RIVERA, ROBERTO I.ROCOMORA, FERNANDO P. RODRIGUEZ, HERNANDO S.RODRIGUEZ, ROMMEL D. ROXAS, CHRISTOPHER R.RUSTIA, ARNULFO T. JAMISON, MARIO G. SAN PEDRO,ELMER B. SANTOS, LEONARDO SEBASTIAN, JR.,CARMENCITOM.SEXON,JOSESTA.ANASIERRA,LLOYDZ. SINADJAN, RAMON S. SISIO, RAMIRO M. SOLIS,MANUEL C. SUAREZ, BENJAMIN TALAVERA, JR., OSCARU. TAN, RICARDO S. TAN, AUGUSTUS V. TANDOC,ROBERTO L. TAEDO, ERNESTO R. TIBAY, CHARLIE P.TICSAY, REY DE VERE TIONGCO, VIVENCIO B.TOLENTINO, OSMUNDO S. TORRES, HILARIO L. VALDEZ,LEONARDO C. VALDEZ, PASTOR M. VALENCIA, EFRENVELASCO, EDMUNDO D. VICTA, FERDINANDVILLANUEVA, JOSE C. VILLANUEVA, JOSE ROMMELVILLAMOR, OLIVER P. VILLANUEVA, VICTOR P.ZAFARALLA,HORACIOL.ZAPATERO,COENEC.ZAPITER,THE HEIRS OF ESTEBAN BALDOZA, RUBEN GALANG,FAUSTO S. CRUZ, REYNALDO BORJA, CRISANTOCAGALINGAN and ADRIANO VICTORIA, petitioners, vs.METROPOLITAN WATERWORKS AND SEWERAGESYSTEM,respondents.

LaborLawCourtiscommittedtothepolicyofprotectingtherightsoftheworkersandpromotetheirwelfareandhasalwaysbeenquicktorisetodefense in therightsof laborProtection to laborextends toallof laborlocal and overseas, organized and unorganized in the public and privatesectors.TheCourt has invariably affirmed that it will not hesitate to tiltthe scales of justice to the labor class for no less than the Constitutiondictates that theState . . . shallprotect the rightsofworkers andpromotetheirwelfare. It is committed to this policy and has always been quick to

risetodefenseintherightsoflabor,asinthiscase.Protectiontolabor,it

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has been said, extends to all of laborlocal and overseas, organized andunorganized, in the public and private sectors. Besides, there is no reasonnot to apply this principle in favor of workers in the government. Thegovernment, including governmentowned and controlled corporations, asemployers, should set the example in upholding the rights and interests oftheworkingclass.

Same Employeremployee Relationship Fourfold Test to Determinethe Existence of Employeremployee Relationship Control test is themostimportantelement.Forpurposesofdeterminingtheexistenceofemployeremployee relationship, the Court has consistently adhered to the fourfoldtest,namely:(1)whethertheallegedemployerhasthepowerofselectionandengagementofanemployee(2)whetherhehascontroloftheemployeewithrespecttothemeansandmethodsbywhichworkistobeaccomplished(3)whetherhehasthepowertodismissand(4)whethertheemployeewaspaidwages.Ofthefour,thecontroltestisthemostimportantelement.

SameSameSameTheemployment statusofaperson isdefinedandprescribed by law and not by what the parties say it should be.MWSSmakesan issueoutof theproviso in theAgreement that specificallydeniesthe existence of employeremployee relationship between it and petitioners.It is axiomatic that the existence of an employeremployee relationshipcannotbenegatedbyexpresslyrepudiatingitinanagreementandprovidingthereinthattheemployeeisnotanMWSSemployeewhenthetermsoftheagreement and the surrounding circumstances show otherwise. Theemploymentstatusofaperson isdefinedandprescribedby lawandnotbywhatthepartiessayitshouldbe.

Same Same Same It is not essential for the employer to actuallysupervise the performance of duties of the employee, it is enough that theformerhasarighttowieldthepower.Thecontroltestmerelycallsfortheexistence of the right to control, and not the exercise thereof. It is notessentialfortheemployertoactuallysupervisetheperformanceofdutiesofthe employee, it is enough that the former has a right towield the power.While petitioners were contractcollectors of MWSS, they were under thelatters direction as towhere and how to perform their collection andwereeven subject to disciplinarymeasures. Trainings were in fact conducted toensurethatpetitionersareconversantoftheproceduresoftheMWSS.

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Same Same Same The primary standard of determining regularemployment is the reasonable connection between the particular activityperformedby theemployee inrelation to theusualbusinessor tradeof theemployer.Petitioners are indeed regular employees of the MWSS. Theprimary standard of determining regular employment is the reasonableconnection between the particular activity performed by the employee inrelation to theusualbusinessor tradeof the employer.The connection canbe determined by considering the nature of the work performed and itsrelation to the scheme of the particular business or trade in its entirety.Likewise, the repeated and continuing need for the performance of the jobhasbeendeemedsufficientevidenceof thenecessity, ifnot indispensabilityoftheactivitytothebusiness.

PETITIONforreviewoncertiorariofadecisionoftheCourtofAppeals.

ThefactsarestatedintheopinionoftheCourt.FlorencioC.Lameyraforpetitioners.AnabellaS.AltunaforrespondentMWSS.

TINGA,J.:

Takenotfromthemouthoflaborthebreadithasearned.ThomasJefferson

Theconstitutionalprotection to labor,auniformfeatureof the lastthree Constitutions including the present one, is outstanding in itsuniquenessandasamandateforjudicialactivism.

This petition asks for the review of the Court of AppealsDecision

1

inC.A.G.R.SPNO.55263entitledAlexanderR.Lopez,et al. v. Metropolitan Waterworks and Sewerage System, whichaffirmedintototheCivilServiceCommissions

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1Promulgatedon26July2002by theSpecialThirdDivision,PennedbyJusticeJosefina GuevaraSalonga, JJ. Bernardo P. Abesamis and Amelita G. Tolentino,concurringRollo,pp.5972.

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Resolutions2

denying petitioners claim for severance, retirementandterminalleavepay.

By virtue of an Agreement,3

petitioners were engaged by theMetropolitan Waterworks and Sewerage System (MWSS) ascollectorscontractors,whereintheformeragreedtocollectfromtheconcessionaires ofMWSS, charges, fees, assessments of rents forwater,sewerand/orplumbingserviceswhichtheMWSSbillsfromtimetotime.

4

In 1997, MWSS entered into a Concession Agreement withManila Water Service, Inc. and BenpressLyonnaise, wherein thecollection of bills was transferred to said private concessionaires,effectively terminating the contracts of service between petitionersandMWSS. Regular employees of theMWSS, except those whohadretiredoroptedtoremainwiththelatter,wereabsorbedbytheconcessionaires.Regular employees of theMWSSwere paid theirretirement benefits, but not petitioners. Instead, they were refusedsaid benefits,MWSS relying on a resolution

5

of the Civil ServiceCommission(CSC)thatcontractcollectorsoftheMWSSarenotitsemployees and therefore not entitled to the benefits due regulargovernmentemployees.

Petitioners filed a complaint with the CSC. In its Resolutiondated 1 July 1999,

6

the CSC denied their claims, stating thatpetitionerswere engaged byMWSS through a contract of service,which explicitly provides that a bill collectorcontractor is not anMWSS employee.

7

Relying on Part V of CSC MemorandumCircular No. 38, Series of 1993, the CSC stated that contractservices/job orders are not considered government services, whichdonothavetobesubmittedtothe

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2ResolutionNo. 991384 dated 1 July 1999 andResolutionNo. 992074 dated 17September1999id.,atpp.118146.

3Id.,atpp.248265.4Art.IoftheAgreement,id.,atp.249.5CSCResolutionNo.981668,26June1996,id.,atpp.291294.6ResolutionNo.991384,id.,atpp.118141.7Id.,atpp.134135.

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CSC for approval, unlike contractual and plantilla appointments.8

Moreover, it found that petitionerswere unable to show that theyhave contractual appointments duly attested by the CSC.

9

Inaddition, the CSC stated that petitioners, not being permanentemployees ofMWSSand not included in the list submitted to theconcessionaire, are not entitled to severance pay.

10

Petitionersclaimsforretirementbenefitsandterminalleavepaywerelikewisedenied.

PetitionerssoughtreconsiderationoftheCSCResolution,whichwashoweverdeniedbytheCSCon17September1999.

11

Accordingto the CSC, petitioners failed to present any proof that theirappointmentswere contractual appointments submitted to theCSCforitsapproval.

12

TheCSCheld,thus:

WHEREFORE,themotionforReconsiderationofAlexanderLopez,etal.is hereby denied.Accordingly,CSCResolutionNo. 991384 dated July 1,1999 stands.However, this is notwithout prejudice towhatever rights andbenefitstheymayhaveundertheNewLaborCodeandotherlaws,ifany.

13

Aggrieved,petitioners filed apetition for reviewunderRule43oftheRulesofCourtwiththeCourtofAppeals.

14

InitsDecision, theCourtofAppealsnarroweddowntheissuespresentedbypetitionersasfollows:WhetherornottheCSCerredinfindingthatpetitionersarenotcontractualemployeesofthegovernmentand,hence,arenotentitledtoretirementandseparationbenefits.

15

Affirming and generally reiterating the ruling of the CSC, theCourtofAppealsheldthattheAgreemententeredintoby

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8Id.,atpp.135136.9Id.,atp.136.10Id.,atp.138.11CSCResolutionNo.992074,id.,atpp.143146.12Id.,atp.145.13Id.,atp.146.14Id.,atpp.74114.15Id.,atp.65.

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petitioners andMWSSwas clear andunambiguous, and shouldbereadandinterpretedaccordingtoitsliteralsense.

16

Hence,asperthetermsoftheagreement,petitionerswerenotMWSSemployees.TheCourt of Appeals held that no other evidence was adduced bypetitioners to substantiate their claim that their papers wereforwardedtotheCSCforattestationandapproval.

17

Itaddedthatinanyevent,asearlyas26June1996,theCSCspecificallystatedthatcontract collectors are not MWSS employees and therefore notentitledtoseverancepay.

18

The Court of Appeals held that petitioners are not similarlysituated as the petitioner in the case of Chua v. Civil ServiceCommission

19

since the contractual appointment was submitted toand approved by the CSC, while the former were not.

20

Further,petitionersdonothavecreditableserviceforpurposesofretirement,since their services were not supported by duly approvedappointments.

21

Lastly, the Court of Appeals held that petitionerswere exempt from compulsory membership in the GSIS. Havingmade no monthly contributions remitted to the said office,petitioners are not entitled to the separation and/or retirementbenefitsthattheyareclaiming.

22

Petitioners now assert that the Court of Appeals rendered adecisionnotinaccordwithlawandapplicablejurisprudence,basedon misapprehension of facts, and/or contrary to the evidence onrecord.

23

Petitionersallegethatwhiletheirhiringwasmadetoappeartobeon contractual basis, the contracts evidencing such hiring weresubmittedtoandapprovedbytheCSC.Later

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16Id.,atp.67.17Id.,atpp.6667.18CitingCSCResolutionNo.981668,id.,atp.69.19G.R.No.88979,7February1992,206SCRA65.20Id.,atp.70.21AsperMemorandumCircular04,Seriesof1994.22Rollo,p.71.23Id.,atp.10.

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contracts, however, do not appear to have been submitted to theCSCforapproval.Tosupportitsclaim,petitionerspresentedtwo(2)sampleagreements,

24

bothstampedapprovedandsignedbyCSCRegionalDirectors.Whilestyledasindividualcontracts/agreements,petitioners insist that thesamewereactually treatedby theMWSSasappointmentpapers.

25

Petitioners claim that theywere employees of theMWSS, andthat the latter exercised control over them. They cite asmanifestations of control the training requirements, the mandatedprocedures to be followed in making collections, MWSS closemonitoring of their performance, as well as the latters power totransfercollectorsfromonebranchtoanother.

26

Moreover,theyaddthatwiththenatureandextentoftheirworkattheMWSS,theyservedascollectorsofMWSSonly.

27

Theystressthattheyhaveneverprovidedcollectionservicestocustomersasanindependent business. In fact, they applied individually and werehired byMWSS one by one.

28

Theywere providedwith uniformsand identification cards, and received basic pay termed ascommissionsfromwhichMWSSdeductedwithholdingtax.

29

ThecommissionsweredeterminedorcomputedbyMWSSandpaidtothecollectorsbypayrolleveryfifteenth(15th)andlastdayofeverymonth.Inadditiontothecommission,collectorsweregiven,amongothers,performance,midyearandanniversarybonuses,hazardpay,thirteenth (13th) month pay, traveling allowance, cash gift, mealallowanceandproductivitypay.

30

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24Agreementdated2May1983inthenameofEdgardoN.Garcia,id.,atpp.248258Agreementdated24August1979inthenameofEdilbertoC.Pingul,id.,atpp.264271.

25Id.,atp.14.26Id.,atpp.1516,39.27Id.,atp.34A.28Id.,atp.34.29Id.,atpp.1617.30Percertificationofonebranchmanagerdated20June1996,id.,atp.18.

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Petitioners claim that bill collectors were historically regarded asemployees of National Waterworks and Sewerage Authority(NAWASA), the forerunner of MWSS.

31

They cite the case ofNational Waterworks and Sewerage Authority v. NWSAConsolidatedLaborUnions,etal.,

32

wherein thisCourtsupposedlydeclared the bill collectors ofNAWASAas its employees and thecommissions receivedbysaidcollectorsassalary.

33

Likewise, theyclaimthatbyMWSSownacts,petitionerswereitsemployees.Tosupportthiscontention,theypointtotheidentificationcards(I.D.s)andcertificationsofemployment issuedbyMWSSin their favor.

34

Therewere also Records ofAppointment,which referred to thecontractcollectors as employees with corresponding servicerecords.

35

Inviewoftheciteddocuments,petitionersassertthatMWSSisestoppedfromdenyingtheiremploymentwiththeagency.

36

Shouldtherebedoubtastotheirstatusasemployees,petitionersinvoketheruleof liberalconstruction in favorof labor,and theconstitutionalpolicyofprotectiontolabor.

37

To further strengthen their case, petitioners refer to CSCResolution922008dated8December1992,whichstatesinpart:

. . . .Thefact that theywerebeinghireddirectlyandpaidoncommissionbasisbyMWSSitselfisindicativethattheyaregovernmentemployeesandshouldbeentitledtotheincentiveawards.

WHEREFORE, foregoing premises considered, the Commissionresolves to rule that the ContractualCollectors of the MetropolitanWaterworksandSewerageSystem(MWSS)areentitledtoloyaltyawards.

38

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31Id.,atp.18.32128Phil.22521SCRA203(1967).33Rollo,p.40.34Id.,atpp.1617.35Id.,atp.288.36Id.,atp.42.37Id.,atp.43.38Id.,atp.304.

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The same resolution was made the basis of the MWSS

memorandum declaring contractcollectors government employeesor personnel entitled to salary increases pursuant to the SalaryStandardizationLawI&II.

39

Thus,petitionersclaimthatbyMWSSandCSCsownactsanddeclarations,theyweremadetobelievethattheywereemployeesofMWSSandassuchweregovernmentemployees.

40

PetitionersinvokethecaseofChuav.CivilServiceCommission,et al.

41

wherein Chua, a coterminus employee of the NationalIrrigationAdministration,soughttorecoverearlyretirementbenefitsbutwasdeniedthesame.ThisCourt,havingobservedthatChuawashired and rehired in four (4) successive projects during a span offifteen (15)years,wasdeemeda regularemployee forpurposesofretirementpay.Petitionersarguethatinthesamemanner,inviewoftheir considerable length of service toMWSS, they are entitled totheirclaimedbenefits.

42

Inadditiontotheretirement/separation/terminalleavepayprayedfor, petitioners claim moral damages for the alleged seriousdisturbance they suffered as a result of the denial of their claims.Theyalsoprayfortheawardofattorneysfees.

43

For itspart, theMWSSavers that theCourtofAppealsdidnoterr in sustaining the resolutions of the CSC denying petitionersclaim for entitlement to severance, retirement and terminal leavepay.

MWSSdenies the existence of employeremployee relationshipbetween itself and petitioners. Citing CSCMemorandum CircularNo. 38 Series of 1993, MWSS avers that it has the authority tocontracttheservicesofanotherwhoisconsidered

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39Id.,atp.232.40Id.,atp.46.41Supranote19.42Rollo,pp.5255.43Id.,atp.55.

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notitsemployee.44

Withrespecttothematterofpaymentofwages,MWSSstatesthatthecommissiongiventopetitionersdoesnotfallwithin the definition of compensation as provided in PresidentialDegreeNo.1146(P.D.1146),

45

orinthedefinitionofthetermunder

theRevisedAdministrativeCodeeither.46

ItaddsthattheissuanceofI.D.s.,certificatesofrecognitionandloyalty awards as well as the grounds for termination of theAgreementcouldhardlybeconsideredascontrolasthesamehadnorelationtothemeansandmethodstobeemployedbypetitionersincollectingpaymentsforMWSS.

47

Asforthetrainingandorientationundergonebypetitioners,MWSSclaimsthatitisbutlogicalforanyentity which has contracted the services of another to orient thelatter before actual performance of the service, more so if theentitys function is impressed with public service. The fact thatcollectorsweregivenaregular timefor remittanceshould likewisenotbe considered as a formof control.MWSSstates thatnoneoftheserequirementsinvadesthecollectorsprerogativetoadopttheirownmethod/strategyinthematterofcollection.

48

Onthegrantofthirteenth(13th)monthpayandotherbenefitstopetitioners,MWSSclaimsthattheseweremereactsofbenevolenceandgenerosity.

49

Pertinently, therefore, the issue toberesolvediswhetherornotpetitioners were employees of the MWSS and, consequently,entitledtothebenefitstheyclaim.

Wefindforthepetitioners.

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44Id.,atp.578.45RevisedGovernmentServiceInsuranceActof1977.Sec.2(i)thereofprovides:

Compensationthe basic pay or salary received by an employee, pursuant to hisemployment appointments excluding per diems, bonuses, overtime pay andallowances.

46Sec.4,Chapter1(Title1),BookIV,ExecutiveOrderNo.292.47Rollo,p.580.48Id.,atp.580.49Id.,atp.582.

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TheCourthasinvariablyaffirmedthatitwillnothesitatetotiltthescalesof justice to the laborclass forno less than theConstitutiondictates that theState . . . shall protect the rights ofworkers andpromote their welfare.

50

It is committed to this policy and hasalwaysbeenquicktorisetodefenseintherightsoflabor,asinthis

case.51

Protectiontolabor,ithasbeensaid,extendstoalloflaborlocalandoverseas,organizedandunorganized, in thepublicandprivatesectors.

52

Besides, there is no reason not to apply this principle infavor of workers in the government. The government, includinggovernmentowned and controlled corporations, as employers,should set the example inupholding the rights and interestsof theworkingclass.

TheMWSS is a government owned and controlled corporationwithitsowncharter,RepublicActNo.6234.

53

Assuch,itiscoveredby the civil service

54

and falls under the jurisdiction of the CivilServiceCommission.

55

CSCMemorandumCircularNo.38,Seriesof1993,categoricallymade the distinction between contract of services/job orders andcontractual and plantilla appointment, declaring that servicesrenderedundercontractsofservicesandjob

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50 Bataan Shipyard and Engineering Corporation v. National Labor RelationsCommission,336Phil.193,205269SCRA199,210(1997)Sec.18,ArticleII,1987CONSTITUTION.

51HolidayInnManilav.NationalLaborRelationsCommission,G.R.No.109114,14September1993,226SCRA417,423.

52 BERNAS, THE 1987 CONSTITUTION OF THE REPUBLIC OF THEPHILIPPINES,ACOMMENTARY,(2003),p.1194,citingIIRECORD614,693,748749Sec.3,ArticleXIII,1987CONSTITUTION.

53 An Act Creating the Metropolitan Waterworks and Sewerage System andDissolvingtheNationalWaterworksandSewerageAuthorityandforOtherPurposes.

54Sec.2(1),ArticleIX,1987Constitution.55Corsigav.Defensor,439Phil.875,883391SCRA267,273(2002).

442



orders are nongovernment services which do not have to besubmitted to the CSC for approval. This was followed by CSCMemorandum Circular No. 4, Series of 1994, which allowed thecrediting of services for purposes of retirement only for suchservices supported by duly approved appointments. Subsequently,the CSC issued other resolutions applying the abovementionedcirculars, stating that while some functions may have been

(a)

(b)

contractedoutbyagovernmentagency, thepersonscontractedarenotentitledtothebenefitsduetoregulargovernmentemployees.

56

Forpurposesofdeterminingtheexistenceofemployeremployeerelationship,theCourthasconsistentlyadheredtothefourfoldtest,namely:(1)whethertheallegedemployerhasthepowerofselectionandengagementofanemployee (2)whetherhehascontrolof theemployeewithrespecttothemeansandmethodsbywhichworkistobeaccomplished(3)whetherhehasthepowertodismissand(4)whethertheemployeewaspaidwages.

57

Ofthefour,thecontroltestisthemostimportantelement.

AreviewofthecircumstancessurroundingthecaserevealsthatpetitionersareemployeesofMWSS.DespitetheobviousattemptofMWSS to categorize petitioners as mere service providers, notemployees, by entering into contracts for services, its actuationsshowthattheyareitsemployees,pureandsimple.MWSSwieldedits power of selection when it contracted with the individualpetitioners,undertakingseparatecontractsoragreements.Thesamegoes true for thepower to dismiss.Although termed as causes forterminationoftheAgreement, a reviewof the sameshows that thegrounds indicated therein can similarly be grounds for terminationofemployment.

_______________

56Rollo,pp.136137.57Tanv.Lagrama,436Phil.191,201387SCRA393,399(2002).

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Under the Agreement, MWSS may terminate it if the CollectorContractordoesorfailstodoanyofthefollowing:

ArticleVIIDuration,TerminationandPenalClauses.....

Fails tocollect at leasteightypercent (80%)ofbills issuedwithinthree (3)months fromcommencementof thisAgreementorninetypercent (90%) within six (6) months after effectivity of thisAgreementErases, alters, or changes any figure on the bills or remittancereceipt for purposes of defrauding either the concessioner or theMWSS. In case of termination of his services for any irregularity,

(c)

(d)

(e)

(a)

(b)

(c)

(d)

(e)

thereshallbenoprejudiceagainstanycriminalactionforwhichhemaybeliable

Isdiscourteous,dishonest,arrogantorhisconduct is inimial [sic]tothegoodnameorimageoftheMWSSFails to remit collections dailyor to returnuncollectedbillsdailyand

FailstocomplywithanyoftheundertakingsasprovidedforinthisAgreement, and theManual of Proceduresmentioned inArticle IIhereof.

58

(EmphasisSupplied)

On the other hand, theLaborCode enumerates the just causes forterminationofemployment,thus:

Art. 282. Termination by Employer.An employer may terminate anemploymentforanyofthefollowingcauses:

Seriousmisconductorwillfuldisobedienceby theemployeeof thelawful orders of his employer or representative in connectionwithhisworkGrossandhabitualneglectbytheemployeeofhisduties

FraudorwillfulbreachbytheemployeeofthetrustreposedinhimbyhisemployerordulyauthorizedrepresentativeCommission of a crime or offense by the employee against thepersonofhisemployerorany immediatememberofhis familyorhisdulyauthorizedrepresentativeand

_______________

58Rollo,pp.255256.

444



Othercausesanalogoustotheforegoing.

Obviously,failuretocollectthepaymentsofcustomersorremitthecollectionsconstitutesneglectofduty.Makingerasures,alterationsorchangingoffigures in thefeesorcollectionreceiptsamounts tofraud.Lackofcourtesy,dishonestyandarrogancearepracticallythesameasmisconduct.

On the issue of remuneration, MWSS claims that thecompensation received by petitioners does not fall under the

definitionofwagesasprovidedinSection2(i)ofP.D.1146,59

whichisthebasicpayorsalaryreceivedbyanemployee,pursuanttohisemploymentappointments,excludingperdiems, bonuses, overtimepay and allowances thus petitioners are not its employees. Thisassertion, however, simply begs the question. The provision is asimple statement ofmeaning, operatingon theapriori premiseorpresumptionthat therecipient isalreadyclassifiedasanemployee,anddoesnotlaydownanybasisorstandardfordeterminingwhoareemployeesandwhoarenot.

On theother hand, relevant and appropriate is thedefinitionofwages in the Labor Code, namely, that it is the remuneration,however designated, for work done or to be done, or for servicesrendered or to be rendered.

60

The commissions due petitionerswerebasedonthebillscollectedasperthescheduleindicatedintheAgreement.

61

Significantly, MWSS granted petitioners benefitsusually given to employees, towit: COLA,meal, emergency, andtravelingallowances,hazardpay,cashgift, andotherbonuses.

62

Inan unabashed bid to claim credit for itself, MWSS professes thatthese additional benefits were its acts of benevolence andgenerosity.

63

Wearenotimpressed.

_______________

59Seenote45.60Art.97(f),LaborCode.61Rollo,pp.252253.62Id.,atp.263.63Id.,atp.582.

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Petitioners rendered services toMWSS for which they were paidandgivensimilarbenefitsduetheotheremployeesofMWSS.It ishard to imagine that MWSS was simply moved by the spirit ofbenevolence and generosity when it granted liberal benefits topetitioners. More so since MWSS is a government owned andcontrolled corporation created for the proper operation andmaintenance of waterworks system to insure an uninterrupted andadequatesupplyanddistributionofpotablewater fordomesticandother purposes and the proper operation and maintenance ofseweragesystems.

64

Itsmainfunctionistoprovidebasicservicesto

the public. The disposition of MWSS income is limited to thepaymentof itscontractualandstatutoryobligations,expansionanddevelopment,andfortheenhancementofitsefficientoperation.

65

Itwasnot inaposition todistributehardearned incomeof theStatemerely to give expression to its supposed altruistic impulse, or todisburse funds not otherwise authorized by law or its charter. IfMWSS was impelled by some force to give the benefits topetitioners, it must have been the force of good business sense.Obviously, the additional benefits were granted with the samemotivationasgoodmanagersanywhereelsehavetofosteragoodworkingrelationshipwiththebillcollectorsandincentivizethemtoraisethehighleveloftheirperformanceevenhigher.

Now the aspect of control. MWSS makes an issue out of theproviso in theAgreement that specifically denies the existence ofemployeremployee relationship between it and petitioners. It isaxiomatic that the existence of an employeremployee relationshipcannotbenegatedbyexpressly repudiating it in an agreement andproviding therein that theemployee isnotanMWSSemployee

66

whenthetermsoftheagreementandthesurroundingcircumstancesshowotherwise.Theemploy

_______________

64Section1,RepublicActNo.6234.65Section13,id.66Rollo,p.134.

446



mentstatusofapersonisdefinedandprescribedbylawandnotbywhatthepartiessayitshouldbe.

67

Inaddition, thecontrol testmerelycallsfor theexistenceof theright tocontrol, andnot theexercise thereof. It isnot essential fortheemployertoactuallysupervisetheperformanceofdutiesoftheemployee, it is enough that the former has a right to wield thepower.

68

WhilepetitionerswerecontractcollectorsofMWSS, theywere under the latters direction as to where and how to performtheir collection and were even subject to disciplinary measures.Trainings were in fact conducted to ensure that petitioners areconversantoftheproceduresoftheMWSS.

ContrarytoMWSSassertionthatpetitionerswerefreetoadopt(their) own method/strategy in the matter of collection,

69

the

Agreementclearlyprovidedthattheprocedureand/ormannerofthecollection of bills to be followed shall be in accordance with theprovisionsof theManualofProcedures.Art.VI of theAgreementstates:

Art.IIProcedureofCollection

Theprocedure and/ormannerof the collectionofbills tobe followed shallbe in accordancewith Provisions of theManual of Procedures adopted onNovember 1, 1968, which is made an integral part of this Agreement asAnnexA.

70

Other manifestations of control are evident from the records. Thepower to transfer or reassign employees is a managementprerogativeexclusivelyenjoyedbyemployers.Inthis

_______________

67InsularLifeAssuranceCo.Ltd. v.NationalLaborRelationsCommission, 350Phil. 919, 926 287 SCRA476, 483 (1998), citing Industrial TimberCorporation v.NationalLaborRelationsCommission,169SCRA341.

68 MAM Realty Development Corporation v. National Labor RelationsCommission,314Phil.838,842244SCRA797,800801(1995).

69Rollo,p.580.70Id.,atp.249.

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case,MWSShadfreereignoverthetransferofbillcollectorsfromonebranchtoanother.

71

MWSSalsomonitored theperformanceofthepetitionersanddeterminedtheirefficiencyratings.

72

MWSS contends that petitioners were free to engage in otheroccupations and were not limited by theAgreement. Suffice it tosay, however, that the control measures installed byMWSSwererestrictive enough to limit or even render illusory the otheremployment options of petitioners as their tasks took up most oftheirtime,theybeingrequiredtoreportandremittoMWSSalmosttwice daily. Interestingly in that regard, under the Agreementpetitionerswereallowedtorenderovertimework,andweregivenadditionalincentivecommission forworkso renderedas longasthe same was authorized.

73

Verily, the need to secure MWSSauthorization before petitioners can render overtimework debunksits claim that theywereallowed toworkasandwhen theyplease.

All these indicate that MWSS controlled the working hours ofpetitioners.

Furthermore,petitionersdidnothavetheirownofficesnortheirownsuppliesandequipment.MWSSprovides themwithcompanystationeries, office space and equipment.

74

Likewise, MWSScomporteditselfastheemployerofpetitioners,providingthemwithI.D.s. and certifications which declared them as employees ofMWSS.

75

It also deducted and remitted petitioners withholdingtaxesandMedicarecontributions.

76

PresagingandlendingprecedentallifttothepresentadjudicationistherecentrulinginManilaWaterCompany,Inc.v.Pea.

77

Inthatcase,ManilaWaterCompany(ManilaWater),

_______________

71Id.,atp.302.72Id.,atpp.268275.73Id.,atp.254.74Id.,atp.264.75Id.,atpp.203206.76Id.,atp.288.77G.R.No.158255,8July2004,434SCRA53.

448



a concessionaire ofMWSS, individually hired someof the formerMWSS bill collectors to perform collection services for three (3)months. Subsequently, the bill collectors formed a corporation,AssociationCollectorsGroup,Inc.(ACGI)whichwascontractedbyManila Water to collect charges. Later, Manila Water asked thecollectors to transfer to a newly formed corporation, First ClassicCourier Services. Manila Water later terminated its contract withACGI, as a result of which collectors who opted to remain withACGIbecameunemployed.Thesebill collectors filed a complaintfor illegal dismissal and money claims against Manila Water,claiming that they were its employees since all the methods andproceduresof their collectionwerecontrolledby the latter.On theother hand, Manila Water contended that the bill collectors wereemployeesofAGCI,anindependentcontractor.

78

TheCourtruledthatthebillcollectorswereregularemployeesofManilaWater,debunkingthelattersclaimthattheyworkedforanindependentcontractorcorporation,thus:

First, ACGI does not have substantial capitalization or investment in theformof tools,equipment,machineries,workpremises,andothermaterials,to qualify as an independent contractor.While it has an authorized capitalstockofP1,000,000.00,onlyP62,500.00isactuallypaidin,whichcannotbeconsidered substantial capitalization. The 121 collectors subscribed to fourshareseachandpaidonlytheamountofP625.00inordertocomplywiththeincorporationrequirements.Further,privaterespondentsreporteddailytothebranch office of the petitioner because ACGI has no office or workpremises. In fact, the corporate address of ACGI was the residence of itspresident,Mr.HerminioD.Pea.Moreover,indealingwiththeconsumers,private respondents used the receipts and identification cards issued bypetitioner.

Second, the work of the private respondents was directly related to theprincipal business or operation of the petitioner. Being in the business ofproviding water to the consumers in the East Zone, the collection of thechargesthereforbyprivaterespondents

_______________

78Id.,atpp.5556.

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for the petitioner can only be categorized as clearly related to, and in thepursuitofthelattersbusiness.

Lastly,ACGIdidnotcarryonan independentbusinessorundertake theperformanceofitsservicecontractaccordingtoitsownmannerandmethod,free from the control and supervision of its principal, petitioner. Prior toprivate respondents alleged employment with ACGI, they were alreadyworking for petitioner, subject to its rules and regulations in regard to themanner and method of performing their tasks. This form of control andsupervision never changed although they were already under the seemingemployofACGI.Petitionerissuedmemorandaregardingthebillingmethodsanddistributionofbookstothecollectorsitrequiredprivaterespondentstoreport daily and to remit their collections on the same day to the branchofficeor todeposit themwithBankof thePhilippine Islands itmonitoredstrictly their attendance as when a collector cannot perform his dailycollection, hemust notify petitioner or the branch office in themorning ofthe day that hewill be absent and although itwasACGIwhich ultimatelydisciplined private respondents, the penalty to be imposedwas dictated bypetitionerasshowninthelettersitsenttoACGIspecifyingthepenaltiestobemetedontheerringprivaterespondents.TheseareindicationsthatACGI

was not left alone in the supervision and control of its alleged employees.Consequently, it can be concluded that ACGI was not an independentcontractorsinceitdidnotcarryadistinctbusinessfreefromthecontrolandsupervisionofpetitioner.

79

Even under the fourfold test, the bill collectors proved to beemployeesofManilaWater.Thus,theCourtheldthat:

Eventhefourfoldtestwillshowthatpetitioneristheemployerofprivaterespondents. The elements to determine the existence of an employmentrelationship are: (a) the selection and engagement of the employee (b) thepaymentofwages(c)thepowerofdismissaland(d)theemployerspowerto control the employees conduct. The most important element is theemployerscontroloftheemployeesconduct,notonlyastotheresultoftheworktobedone,butalsoastothemeansandmethodstoaccomplishit.

_______________

79Id.,atpp.6061.

450



We agree with the Labor Arbiter that in the three stages of privaterespondents serviceswith the petitioner, i.e., (1) fromAugust 1, 1997 toAugust 31, 1997 (2) fromSeptember 1, 1997 toNovember 30, 1997 and(3)fromDecember1,1997toFebruary8,1999,thelatterexercisedcontrolandsupervisionovertheformersconduct.

Petitioner contends that the employment of private respondents fromAugust 1, 1997 to August 30, 1997 was only temporary and done toaccommodate their request to be absorbed since petitioner was stillundergoingatransitionperiod.Itwasonlywhenitsbusinessbecamesettledthat petitioner employed private respondents for a fixed term of threemonths.

Although petitioner was not obliged to absorb the private respondents,by engaging their services, paying theirwages in the form of commission,subjecting them to its rules and imposing punishment in case of breachthereof,andcontrollingnotonly theendresultbut themannerofachievingthesameaswell,anemploymentrelationshipexistedbetweenthem.

Notably, private respondents performed activities whichwere necessaryor desirable to its principal trade or business. Thus, they were regularemployees of petitioner, regardless ofwhether the engagementwasmerelyanaccommodationoftheirrequest....

80

(ItalicsOurs)

Infine,theCourtfoundthatthesocalledindependentcontractordidnothavesubstantialcapitalizationorinvestmentintheformoftools,equipment,machineries,workpremisesandothermaterialtoqualifyas an independent contractor. Moreover, respondents thereinreporteddailytotheManilaWaterbranchofficeanddealtwiththeconsumersthroughreceiptsandI.D.s.issuedbythelatter.Likewise,their work was directly related to and in the pursuit of ManilaWatersprincipalbusiness.More importantly, theCourtnoted thatACGI did not carry a distinct business free from the control andsupervisionofManilaWater.

_______________

80Id.,atp.62.

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The similaritybetween this case and the instantpetitioncannotbedenied.Forone, therespondents insaidcasearepetitioners inthiscase.

81

Second, theworksetupwasessentiallythesame.Whilethebill collectors were individually hired, or eventually engagedthroughACGI,theywereunderthedirectcontrolandsupervisionofthe concessionaire, much like the arrangement between hereinpetitioners and MWSS. Third, they performed the same vitalfunctionofcollectioninbothcases.Fourth,theyworkedexclusivelyfor their employers.Hence, thebill collectors in theManilaWatercaseweredeclaredemployeesofManilaWaterdespitetheexistenceof a sham labor contractor. In the present case, petitioners weredirectlyandindividuallyhiredbyMWSS,thelatternotresortingtotheintermediarylaborcontractorartifice,butamereascrapofpaperimpudently declaring the bill collectors to be not employees ofMWSS.With greater reason, therefore, should the actuality of theemployeremployeerelationshipbetweenMWSSandpetitionersberecognized.

TheCSC,aswellastheCourtofAppeals,makesmuchofCSCMemorandumCircularNo.38,Seriesof1993,whichdistinguishesbetween contract of services/job services and contractualappointment.TheCircularprovides:

Contract of Services and Job Orders are different from Contractualappointment and Plantilla appointment of casual employees, respectively,whicharerequiredtobesubmittedtoCSCforapproval.

1.

2.

3.

4.

5.

Contracts of Services and JobOrders refer to employment described asfollows:

_______________

81Privaterespondentsinthecaseareallpetitionersinthepresentpetition,towit:HerminioD.Pena,EstebanB.Baldoza,JorgeD.Canonigo,Jr.,IkeS.Delfin,RizalinoM. Intal, Rey T.Manlegro, John L.Marteja,Marlon B.Morada, Allan D. Espina,EduardoOng,AgnesioD.Quebral,EdmundoB.Victa,VictorC.Zafaralla,EdilbertoC.Pingul,andFedericoM.Rivera.

452



The contract covers lump sum work or services such asjanitorial, security or consultancy services where noemployeremployeerelationshipexistThe job order covers piece ofwork or intermittent job ofshortdurationnotexceedingsixmonthsonadailybasisThecontractofservicesandjobordersarenotcoveredbyCivilServiceLaw,RulesandRegulations[sic]butcoveredbyCOArulesThe employees involved in the contracts or job orders donotenjoy thebenefitsenjoinedbygovernmentemployees,suchasPERA,COLAandRATA.Astheservicesrenderedundercontractsofservicesandjobordersarenotconsideredgovernmentservices,theydonothave tobe submitted to theCivilServiceCommission forapproval.

82

Clinging to its tenuous denial of petitioners employee status, theCSC avers that contractual employees are those with contractualappointmentsubmittedtoandattestedbytheCSC,unlikepetitionerswhofailedtoshowthattheirappointmentsweredulyattestedbytheCSC. The Court recognizes the authority of the CSC inpromulgatingcircularsandmemorandaconcerningthecivilservicesectorinlinewithitsfunctionasthecentralpersonnelagencyoftheGovernment.

83

Nevertheless, it cannot turn a blind eye to a ratherhaphazard application and interpretation by the CSC of its ownissuance,suchasinthiscase.

A careful review of the abovequoted circular shows that therelationshipdefinedbytheAgreementcannotfallwithinthepurview

of contract of services or job orders. Payments made byMWSSsubscribersarethelifebloodofthecompany.Viewedinthatcontextthework rendered by the petitioners is essential to the companyssurvivalandgrowth.Alongsideitspublicservicethrust,theMWSSisan incomegeneratingentityfor theGovernment. It reliesfor themostpartonthe

_______________

82QuotedinCSCResolutionNo.991384,Rollo,pp.135136.83Sec.3,ArticleIX,1987Constitution.

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bill collections in order to sustain its operations. The task ofcollecting payments for the water supplied by the MWSS to itsconsumers does not deserve to be compared with mere janitorial,security or even consultancy work. It is not intermittent andseasonal, but rather continuous and increasing by reason of itsindisputable essentiality. To lump petitioners with the runofthemillserviceprovidersistoignorethevitalroletheyperformfortheMWSS.Rightly so, as clearly indicated in the circular, employeesinvolved in the contracts or job orders do not enjoy the benefitsenjoyed by the petitioners which are the same benefits given togovernmentemployees.

Petitioners are indeed regular employees of the MWSS. Theprimary standard of determining regular employment is thereasonableconnectionbetweentheparticularactivityperformedbythe employee in relation to the usual business or trade of theemployer. The connection can be determined by considering thenatureof theworkperformedand its relation to the schemeof theparticularbusinessortradeinitsentirety.Likewise,therepeatedandcontinuing need for the performance of the job has been deemedsufficient evidence of the necessity, if not indispensability of theactivitytothebusiness.

84

Someofthepetitionershadrenderedmorethan two decades of service to the MWSS. The continuous andrepeated rehiring of these bill collectors indicate the necessity anddesirabilityoftheirservices,aswellastheimportanceoftheroleofbillcollectorsintheMWSS.

We agree with the CSC when it stated that the authority ofgovernmentagenciestocontractservicesisanauthorityrecognizedundercivilservicerules.

85

However,saidauthoritycannotbeusedto

circumvent the lawsanddepriveemployeesof suchagencies fromreceivingwhatisduethem.

_______________

84DeLeonv.NationalLaborRelationsCommission,G.R.No.70705, 21August1989,176SCRA615,621.

85Rollo,p.140.

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TheCSCgoesfurthertosaythatpetitionerswereunabletopresentproof that their appointments were contractual in nature andsubmitted to theCSC for its approval, and that submission to andapprovaloftheCSCareimportantastheseshowthattheirserviceshad been credited as government service.

86

The point is of nomoment. Petitioners were able to attach only two of suchAgreementswhichborethestampofapprovalbytheCSCandtheseare simply inadequate to prove that the other agreements weresimilarly approved. Even petitioners admit that subsequently suchAgreementswereno longer submitted to theCSC for its approval.Still, the failure to submit the documents for approval of theCSCcannot militate against the existence of employeremployeerelationshipbetweenpetitionersandMWSS.MWSScannotraiseitsowninactiontobuttressitsadverseposition.

MWSScommitteditselftopayseveranceandterminalleavepaytoitsregularemployees.

87

Theguidelines88

thereofstatesthatregularemployees who have rendered at least a year of service and noteligibleforretirementareentitledtoseverancepayequivalenttoone(1)monthbasicpay forevery fullyearofservice.

89

Inviewof theCourts finding that petitioners were employees of MWSS, thecorresponding severance pay, in accordance with the guidelines,should be given to them. Terminal leave pay are likewise duepetitioners,providedtheymeettherequirementstherefor.

However, petitioners in this case cannot avail of retirementbenefitsfromtheGSIS.Whentheirserviceswereengagedby

_______________

86Id.,atp.145.87CSCResolutionNo.991384,quotingtheConcessionAgreements,id.,atp.119.88GuidelinesinthePaymentoftheMandatorySeverancePayPursuanttoArticle

6.1oftheConcessionAgreementissuedbyMWSSon31July1997,id.,atp.401.89GuidelinesinthePaymentoftheMandatorySeverancePayPursuanttoArticle

6.1oftheConcessionAgreementissuedbyMWSSon31July1997,id.,atp.402.

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VOL.462,JUNE30,2005 455


MWSS, they were not reported as its employees and hence nodeductions were made against them for purpose of the GSIScontributions. It would be unjust to grant petitioners retirementbenefits when there was no remittance of the employees or theemployersshareofcontributions.

ThecaseofChua v.Civil ServiceCommission90

relieduponbypetitionersisnotinpoint.TherewasnoquestionthatChuawasanemployee, specifically a contractual/project employee of theNational IrrigationAdministration (NIA).TheCSCsdenialofherrequest for early retirement benefits was based on the CSCsconclusionthatcontractualemployeesarenotcoveredbytheEarlyRetirementLaw.

91

ThisCourtheldthatcoterminusemployeeswhohaverenderedyearsofcontinuousservicesuchasChuawhowascontinuously hired and rehired for four (4) successive times in aspanoffifteen(15)yearsshouldbeincludedinthecoverageoftheEarlyRetirementLawaslongastheycomplywithCSCregulationspromulgated for such purpose.Underlying this grant of retirementbenefits to Chua is the finding that her work with the NIA wasrecognized and accreditedby theCSCas government service, thatshepaidherGSIScontributionsthroughoutherservice,andthefactthatsheappliedforthebenefitwithintheprescribedperiod.

92

The differences between Chua and petitioners are readilyapparent. The ruling inChua concerns claims based on the EarlyRetirementLaw.Ontheotherhand,thiscaseinvolvesbillcollectorswhowerehiredbyvirtueofindividualagreements,andwhoarenowclaiming payment of retirement, separation and terminal leavebenefits. Petitioners services, admittedly, were notcredited/recognized by theCSC.Likewise, the parties still disputethenatureoftheirrelationshipwhenpetitionersmadetheclaimforthebenefits,unlikeinthecaseofChuawheretherewasnoquestionastoherstatus

_______________

90G.R.No.88979,7February1992,206SCRA65.91RepublicActNo.6683.

92Supranote85.

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as an employeeof theNIA.Moreover, unlikeChua, petitioners inthiscasedidnotgiveanycontributionforGSIScoverage,especiallysince retirement benefits come from the monthly contributions ofGSISmembers.

Petitioners claim for damages and attorneys fees are similarlyuntenable.MWSScannotbemadeliableformoraldamagesfortheserious moral disturbance

93

petitioners allegedly suffered as aresultof thedenialof therequestedbenefitsbecauseitwasmerelyfollowingtheearlierresolution

94

of theCSC.MWSSadherence tothe position of the CSC is but logical. It is after all, the centralpersonnel agencyof thegovernment, and its resolutionat the timewasvalidandbindingonMWSS.

WHEREFORE, the petition is GRANTED IN PART. TheDecision of the Court of Appeals in C.A.G.R. SP No. 55263, aswell as the Civil Service Commissions Resolutions Nos. 991384and 992074, are hereby REVERSED and SETASIDE.MWSS isordered to pay terminal leave pay and separation pay and/orseverance pay to each of herein petitioners on the basis ofremunerations/commissions, allowances and bonuses each wereactuallyreceivingatthetimeofterminationoftheiremploymentascontractcollectorsofMWSS.LetthecaseberemandedtotheCivilServiceCommission for the computation of the above awards andtheappropriatedisposition in accordancewith thepronouncementsinthisDecision.

Nopronouncementastocosts.SOORDERED.

Davide,Jr.(C.J.),Puno,Panganiban,Quisumbing,YnaresSantiago, SandovalGutierrez, Carpio, AustriaMartinez, Corona,CarpioMorales, Callejo, Sr., Azcuna,ChicoNazario andGarcia,JJ.,concur.

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93Rollo,p.55.94CSCResolutionNo.981668,Supranote5.

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CapitolMedicalCenter,Inc.vs.Trajano

Petitiongrantedinpart.

Note.The control test assumes primacy in the overallconsideration of the nature of the employment whether regular orotherwise. (Paguio vs.National LaborRelationsCommission, 403SCRA190[2003])

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5. lopez vs mwss

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