1. Halaguena vs.

PAL  Not every controversy or money claim by an employee

against the employer or vice-versa is within the exclusive
FACTS
jurisdiction of the labor arbiter. Actions between employees
 Petitioners were employed as female flight attendants of and employer where the employer-employee relationship is
respondent Philippine Airlines (PAL) on different dates prior merely incidental and the cause of action precedes from a
to November 22, 1996. They are members of the Flight different source of obligation is within the exclusive
Attendants and Stewards Association of the Philippines jurisdiction of the regular court. Here, the employer-
(FASAP), a labor organization certified as the sole and employee relationship between the parties is merely
exclusive certified as the sole and exclusive bargaining incidental and the cause of action ultimately arose from
representative of the flight attendants, flight stewards and different sources of obligation, i.e., the Constitution and
pursers of respondent. CEDAW.
 The CBA provides that Subject to the grooming standards  Thus, where the principal relief sought is to be resolved not
provisions of this Agreement, compulsory retirement shall be by reference to the Labor Code or other labor relations
fifty-five (55) for females and sixty (60) for males statute or a collective bargaining agreement but by the
 petitioners and several female cabin crews manifested that general civil law, the jurisdiction over the dispute belongs to
the aforementioned CBA provision on compulsory retirement the regular courts of justice and not to the labor arbiter and
is discriminatory, and demanded for an equal treatment with the NLRC. 
their male counterparts.   If We divest the regular courts of jurisdiction over the case,
then which tribunal or forum shall determine the
ISSUE constitutionality or legality of the assailed CBA provision?
This Court holds that the grievance machinery and voluntary
Whether the RTC has jurisdiction over the petitioners' action
arbitrators do not have the power to determine and settle the
challenging the legality or constitutionality of the provisions on the
issues at hand. They have no jurisdiction and competence to
compulsory retirement age contained in the CBA between
decide constitutional issues relative to the questioned
respondent PAL and FASAP.
compulsory retirement age. Their exercise of jurisdiction is
HELD futile, as it is like vesting power to someone who cannot
wield it.
 RTC has jurisdicition  Saura vs. Saura, Jr. -  But as expedient as this policy may
 The subject of litigation is incapable of pecuniary estimation, be, it should not deprive the courts of justice of their
exclusively cognizable by the RTC, pursuant to Section 19 power to decide ordinary cases in accordance with the
(1) of Batas Pambansa Blg. 129, as amended. Being an general laws that do not require any particular expertise
ordinary civil action, the same is beyond the jurisdiction of or training to interpret and apply. Otherwise, the
labor tribunals. creeping take-over by the administrative agencies of the
 The said issue cannot be resolved solely by applying the judicial power vested in the courts would render the
Labor Code. Rather, it requires the application of the judiciary virtually impotent in the discharge of the duties
Constitution, labor statutes, law on contracts and the assigned to it by the Constitution.
CEDAW
 2. Brotherhood Labor Unity vs. Zamora to the capatazes or group leaders who then give orders to
the workers as to where, when and what to load, unload,
FACTS pile, pallet or clean.
 BLUM filed a complaint charging San Miguel Corporation for
unfair labor practice and for Legal dismissal. It was alleged  Work in the glass factory was neither regular nor continuous,
depending wholly on the volume of bottles manufactured to
that respondents ordered the individual complainants to
be loaded and unloaded, as well as the business activity of
disaffiliate from the complainant union; and that the company. Work did not necessarily mean a full eight (8)
management dismissed the individual complainants when hour day for the petitioners. However, work,at times,
they insisted on their union membership. exceeded the eight (8) hour day and necessitated work on
 Respondents moved for the dismissal of the complaint on Sundays and holidays. For this, they were neither paid
the grounds that the complainants are not and have never overtime nor compensation for work on Sundays and
been employees of respondent company but employees of holidays.
the independent contractor; that respondent company has
never had control over the means and methods followed by  Petitioners were paid every ten (10) days on a piece rate
the independent contractor who enjoyed full authority to hire basis, that is, according to the number of cartons and
and control said employees; and that the individual wooden shells they were able to load, unload, or pile.
complainants are barred by estoppel from asserting that they  The petitioners worked exclusive at the SMC plant, never
are employees of respondent company. having been assigned to other companies or departments of
 Unrebutted evidence and testimony on record establish that SMC plant, even when the volume of work was at its
the petitioners are workers who have been employed at the minimum. When any of the glass furnaces suffered a
San Miguel Parola Glass Factory since 1961, averaging breakdown, making a shutdown necessary, the petitioners
about seven (7) years of service at the time of their work was temporarily suspended. Thereafter, the petitioners
termination. They worked as "cargadores" or "pahinante" at would return to work at the glass plant.
the SMC Plant loading, unloading, piling or palleting empty  Sometime in January, 1969, the petitioner workers —
bottles and woosen shells to and from company trucks and numbering one hundred and forty (140) organized and
warehouses. At times, they accompanied the company affiliated themselves with the petitioner union and engaged
trucks on their delivery routes. in union activities. Believing themselves entitled to overtime
 The petitioners first reported for work to Superintendent-in- and holiday pay, the petitioners pressed management, airing
Charge Camahort.  They were issued gate passes signed by other grievances such as being paid below the minimum
Camahort and were provided by the respondent company wage law, inhuman treatment, being forced to borrow at
with the tools, equipment and paraphernalia used in the usurious rates of interest and to buy raffle tickets, coerced by
loading, unloading, piling and hauling operation. withholding their salaries, and salary deductions made
without their consent. However, their gripes and grievances
 Job orders emanated from Camahort. The orders are then were not heeded by the respondents.
transmitted to an assistant-officer-in-charge. In turn, the  San Miguel refused to bargain with the petitioner union
assistant informs the warehousemen and checkers alleging that the workers are not their employees.
regarding the same. The latter, thereafter, relays said orders
ISSUE contracting where the same would involve considerable
expenses and dealings with a large number of workers over
W/N an EER exists a long period of time
HELD  Even under the assumption that a contract of employment
had indeed been executed between respondent SMC and
 YES the alleged labor contractor, respondent's case will,
 In determining the existence of an employer-employee nevertheless, fail.
relationship, the elements that are generally considered are
the following:  Job contracting. — There is job contracting permissible
o (a) the selection and engagement of the employee; under the Code if the following conditions are met:
o (b) the payment of wages;
o (c) the power of dismissal; and o (1) The contractor carries on an independent
o (d) the employer's power to control the employee business and undertakes the contract work on his
with respect to the means and methods by which the own account under his own responsibility according
work is to be accomplished. It. is the called "control to his own manner and method, free from the control
test" that is the most important element and direction of his employer or principal in all
matters connected with the performance of the work
 Applying the above criteria, the evidence strongly indicates
except as to the results thereof; and
the existence of an employer-employee relationship between
petitioner workers and respondent San Miguel Corporation. 
o (2) The contractor has substantial capital or
 The existence of an independent contractor relationship is
investment in the form of tools, equipment,
generally established by the following criteria: "whether or machineries, work premises, and other materials
not the contractor is carrying on an independent business; which are necessary in the conduct of his business.
the nature and extent of the work; the skill required; the term
and duration of the relationship; the right to assign the
 We find that Guaranteed and Reliable Labor contractors
performance of a specified piece of work; the control and
have neither substantial capital nor investment to qualify as
supervision of the work to another; the employer's power
an independent contractor under the law. The premises,
with respect to the hiring, firing and payment of the
tools, equipment and paraphernalia used by the petitioners
contractor's workers; the control of the premises; the duty to
in their jobs are admittedly all supplied by respondent
supply the premises tools, appliances, materials and labor;
company. It is only the manpower or labor force which the
and the mode, manner and terms of payment", none of
alleged contractors supply, suggesting the existence of a
which exist in this case
"labor only" contracting scheme prohibited by law
 Highly unusual and suspect is the absence of a written
 The payment of the workers' wages is a critical factor in
contract to specify the performance of a specified piece of
determining the actuality of an employer-employee
work, the nature and extent of the work and the term and
relationship whether between respondent company and
duration of the relationship. The records fail to show that a
petitioners or between the alleged independent contractor
large commercial outfit, such as the San Miguel Corporation,
and petitioners. It is important to emphasize that in a truly
entered into mere oral agreements of employment or labor
 independent contractor-contractee relationship, the fees are  Section 1 of their CBA specifically provides that "temporary,
paid directly to the manpower agency in lump sum without probationary, or contract employees and workers are
indicating or implying that the basis of such lump sum is the excluded from the bargaining unit and, therefore, outside the
salary per worker multiplied by the number of workers scope of this Agreement."
assigned to the company.
 The alleged independent contractors in the case at bar were  Union advised SanMig that some Lipercon and D'Rite
paid a lump sum representing only the salaries the workers workers had signed up for union membership and sought the
were entitled to, arrived at by adding the salaries of each regularization of their employment with SMC. The Union
worker which depend on the volume of work they. had alleged that this group of employees, while appearing to be
accomplished individually. contractual workers supposedly independent contractors,
 The petitioners were dismissed allegedly because of the have been continuously working for SanMig for a period
shutdown of the glass manufacturing plant. Respondent ranging from six (6) months to fifteen (15) years and that
company would have us believe that this was a case of their work is neither casual nor seasonal as they are
performing work or activities necessary or desirable in the
retrenchment due to the closure or cessation of operations of
usual business or trade of SanMig. Thus, it was contended
the establishment or undertaking. But such is not the case that there exists a "labor-only" contracting situation.
here. The respondent's shutdown was merely temporary,
one of its furnaces needing repair. Operations continued
 On the ground that it had failed to receive any favorable
after such repairs, but the petitioners had already been
response from SanMig, the Union filed a notice of strike for
refused entry to the premises and dismissed from
unfair labor practice, CBA violations, and union busting, and
respondent's service. New workers manned their positions.
then again for unfair labor practice
 A series of pickets were staged by Lipercon and D'Rite
3. SMC EU vs. Bersamira
workers in various SMC plants and offices.
FACTS  SanMig filed a TRO in court to enjoin the union from their
picketing. This was granted.
 SanMig entered into contracts for merchandising services  Anchored on grave abuse of discretion, petitioners are now
with Lipercon and D'Rite. These companies are independent before us seeking nullification of the challenged Writ, and in
contractors duly licensed by the Department of Labor and the meantime went on strike due to some of the workers
Employment (DOLE). from Lipercon and D’Rite being laid off.
 In said contracts, it was expressly understood and agreed
that the workers employed by the contractors were to be ISSUE
paid by the latter and that none of them were to be deemed
W/N respondent Court correctly assumed jurisdiction over the
employees or agents of SanMig.
present controversy and properly issued the Writ of Preliminary
 Petitioner San Miguel Corporation Employees Union-
Injunction
PTWGO (the Union, for brevity) is the duly authorized
representative of the monthly paid rank-and-file employees HELD
of SanMig with whom the latter executed a Collective
Bargaining Agreement (CBA)  YES.
 A "labor dispute" as defined in Article 212 (1) of the Labor 4. Capitol Medical Center vs. Meris
Code includes "any controversy or matter concerning terms
FACTS
and conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining,  Capitol Medical Center, Inc. (Capitol) hired Dr. Cesar Meris
changing, or arranging the terms and conditions of (Dr. Meris), one of its stockholders, as in charge of its
employment, regardless of whether the disputants stand in Industrial Service Unit (ISU) at a monthly salary of
the proximate relation of employer and employee." ₱10,270.00.
 While it is SanMig's submission that no employer-employee  Dr. Meris performed dual functions of providing medical
relationship exists between itself, on the one hand, and the services to Capitol’s more than 500 employees and health
contractual workers of Lipercon and D'Rite on the other, a workers as well as to employees and workers of companies
labor dispute can nevertheless exist "regardless of whether having retainer contracts with it
the disputants stand in the proximate relationship of  Dr. Meris received from Capitol’s president and chairman of
employer and employee". Put differently, and as defined by the board, Dr. Thelma Navarette-Clemente (Dr. Clemente), a
law, the existence of a labor dispute is not negative by the notice advising him of the management’s decision to close or
fact that the plaintiffs and defendants do not stand in the abolish the ISU and the consequent termination of his
proximate relation of employer and employee. services as Chief thereof. This was done in light of the
 That a labor dispute, as defined by the law, does exist herein almost extinct demand for direct medical services after
is evident. At bottom, what the Union seeks is to regularize considering the existing trend of industrial companies
the status of the employees contracted by Lipercon and allocating their health care requirements to HMOs
D'Rite in effect, that they be absorbed into the working unit of  Dr. Meris, doubting the reason behind the management’s
SanMig. Terms, tenure and conditions of their employment decision to close the ISU and believing that the ISU was not
and the arrangement of those terms are thus involved in fact abolished as it continued to operate, sought his
bringing the matter within the purview of a labor dispute. reinstatement but it was unheeded.
 As the case is indisputably linked with a labor dispute,  LA – abolition of the ISU was valid and lawful
jurisdiction belongs to the labor tribunals. As explicitly
 NLRC modified LA decision as well as setting aside Dr.
provided for in Article 217 of the Labor Code, prior to its
Meris’ retirement benefits because he did not retire
amendment by R.A. No. 6715 on 21 March 1989, since the
 CA – ISU was not in fact abolished, its operation and
suit below was instituted on 6 March 1989, Labor Arbiters
management having changed from Dr. Meris to Dr.
have original and exclusive jurisdiction to hear and decide
Clemente. Dr. Meris illegally dismissed for failure to follow
the following cases involving all workers including "1. unfair
procedural and substantive due process
labor practice cases; 2. those that workers may file involving
wages, hours of work and other terms and conditions of ISSUE
employment; ... and 5. cases arising from any violation of
Article 265 of this Code, including questions involving the W/N Dr. Meris was illegally dismissed
legality of striker and lockouts. ..." Article 217 lays down the
HELD
plain command of the law.
 YES
 Employers are also accorded rights and privileges to assure  Clearly then, the right to close an establishment or
their self-determination and independence and reasonable undertaking may be justified on grounds other than business
return of capital. This mass of privileges comprises the so- losses but it cannot be an unbridled prerogative to suit the
called management prerogatives. Although they may be whims of the employer.
broad and unlimited in scope, the State has the right to  In the case at bar, Capitol failed to sufficiently prove its good
determine whether an employer’s privilege is exercised in a faith in closing the ISU.
manner that complies with the legal requirements and does  From the letter of Dr. Clemente to Dr. Meris, it is gathered
not offend the protected rights of labor. One of the rights that the abolition of the ISU was due to the "almost extinct
accorded an employer is the right to close an establishment demand for
or undertaking. direct medical service by the private and semi-government
 The right to close the operation of an establishment or corporations in providing health care for their employees;
undertaking is explicitly recognized under the Labor Code as  The records of the case, however, fail to impress that there
one of the authorized causes in terminating employment of was indeed extinct demand for the medical services
workers, the only limitation being that the closure must not rendered by the ISU. The ISU’s Annual Report for the fiscal
be for the purpose of circumventing the provisions on years 1986 to 1991, submitted by Dr. Meris to Dr. Clemente,
termination of employment embodied in the Labor Code. and uncontroverted by Capitol, shows otherwise. In fact,
 “ART. 283. Closure of establishment and reduction of the number of client companies increased.
personnel. – The employer may also terminate the  The termination of the services of Dr. Meris not having
employment of any employee due to the installation of labor been premised on a just or authorized cause, he is
saving devices, redundancy, retrenchment to prevent losses entitled to either reinstatement or separation pay if
or the closing or cessation of operation of the reinstatement is no longer viable, and to backwages.
establishment or undertaking unless the closing is for  Reinstatement, however, is not feasible in case of a strained
the purpose of circumventing the provisions of this employer-employee relationship or when the work or position
Title…” formerly held by the dismissed employee no longer exists,
 And the phrase "closures or cessation x x x not due to as in the instant case. Dr. Meris is thus entitled to payment
serious business losses or financial reverses" recognizes the of separation pay at the rate of one (1) month salary for
right of the employer to close or cease his business every year of his employment, with a fraction of at least six
operations or undertaking even if he is not suffering from (6) months being considered as one(1) year,48 and full
serious business losses or financial reverses, as long as he backwages from the time of his dismissal from April 30, 1992
pays his employees their termination pay in the amount until the expiration of his term as Chief of ISU or his
corresponding to their length of service. mandatory retirement, whichever comes first.
 As long as the company’s exercise of the same is in good
faith to advance its interest and not for the purpose of 5. Javier vs. FlyAce Corp
defeating or circumventing the rights of employees
under the law or a valid agreement, such exercise will be FACTS
upheld.  Javier filed a complaint before the NLRC for underpayment
of salaries and other labor standard benefits. He alleged that
 he was an employee of Fly Ace since September 2007,  LA dismissed the complaint for lack of merit on the ground
performing various tasks at the respondent’s warehouse that Javier failed to present proof that he was a regular
such as cleaning and arranging the canned items before employee of Fly Ace.
their delivery to certain locations, except in instances when  NLRC ruled in favor of Javier
he would be ordered to accompany the company’s delivery  CA reversed
vehicles, as pahinante; that he reported for work from
Monday to Saturday from 7:00 o’clock in the morning to 5:00 ISSUE
o’clock in the afternoon; that during his employment, he was
W/N Javier was an employee who was illegally dismissed
not issued an identification card and payslips by the
company; that on May 6, 2008, he reported for work but he HELD
was no longer allowed to enter the company premises by the
security guard upon the instruction of Ruben Ong (Mr. Ong),  No
his superior; that after several minutes of begging to the  In an illegal dismissal case, the onus probandi rests on the
guard to allow him to enter, he saw Ong whom he employer to prove that its dismissal of an employee was for
approached and asked why he was being barred from a valid cause. However, before a case for illegal dismissal
entering the premises; that Ong replied by saying, "Tanungin can prosper, an employer-employee relationship must first
mo anak mo;"  that he then went home and discussed the be established.
matter with his family; that he discovered that Ong had been  ly Ace points out that Javier merely offers factual assertions
courting his daughter Annalyn after the two met at a fiesta that he was an employee of Fly Ace, "which are
celebration in Malabon City; that Annalyn tried to talk to Ong unfortunately not supported by proof, documentary or
and convince him to spare her father from trouble but he otherwise."
refused to accede; that thereafter, Javier was terminated  It must be noted that the issue of Javier’s alleged illegal
from his employment without notice; and that he was neither dismissal is anchored on the existence of an employer-
given the opportunity to refute the cause/s of his dismissal employee relationship between him and Fly Ace. This is
from work. essentially a question of fact. Generally, the Court does not
 To support his allegations, Javier presented an affidavit of review errors that raise factual questions. However, when
one Bengie Valenzuela who alleged that Javier was a there is conflict among the factual findings of the antecedent
stevedore or pahinante of Fly Ace  deciding bodies like the LA, the NLRC and the CA, "it is
 Fly Ace averred that it was engaged in the business of proper, in the exercise of Our equity jurisdiction, to review
importation and sales of groceries. Sometime in December and re-evaluate the factual issues and to look into the
2007, Javier was contracted by its employee, Mr. Ong, as records of the case and re-examine the questioned findings."
extra helper on a pakyaw basis. Mr. Ong contracted Javier  As the records bear out, the LA and the CA found Javier’s
roughly 5 to 6 times only in a month whenever the vehicle of claim of employment with Fly Ace as wanting and deficient.
its contracted hauler, Milmar Hauling Services, was not The Court is constrained to agree. Although Section 10, Rule
available. VII of the New Rules of Procedure of the NLRC28 allows a
relaxation of the rules of procedure and evidence in labor
 cases, this rule of liberality does not mean a complete by respondents Romualdo and Andy and was told to leave
dispensation of proof. the garage for he is already fired. He was even threatened
 In sum, the rule of thumb remains: the onus probandi falls on with physical harm should he ever be seen in the company’s
petitioner to establish or substantiate such claim by the premises again. Despite the warning, Tenazas reported for
requisite quantum of evidence. "Whoever claims entitlement work on the following day but was told that he can no longer
to the benefits provided by law should establish his or her drive any of the company’s units as he is already fired.
right thereto x x x." Sadly, Javier failed to adduce substantial  Francisco, on the other hand, averred that his dismissal was
evidence as basis for the grant of relief. brought about by the company’s unfounded suspicion that
 In this case, the LA and the CA both concluded that Javier he was organizing a labor union. He was instantaneously
failed to establish his employment with Fly Ace. By way of terminated, without the benefit of procedural due process
evidence on this point, all that Javier presented were his  Endraca, for his part, alleged that his dismissal was
self-serving statements purportedly showing his activities as instigated by an occasion when he fell short of the required
an employee of Fly Ace. Clearly, Javier failed to pass the boundary for his taxi unit.
substantiality requirement to support his claim. Hence, the  For their part, the respondents admitted that Tenazas and
Court sees no reason to depart from the findings of the CA. Endraca were employees of the company, the former being
 One final note. The Court’s decision does not contradict the a regular driver and the latter a spare driver. The
settled rule that "payment by the piece is just a method of respondents, however, denied that Francisco was an
compensation and does not define the essence of the employee of the company or that he was able to drive one of
relation." Payment on a piece-rate basis does not negate the company’s units at any point in time.
regular employment. "The term ‘wage’ is broadly defined in  The respondents further alleged that Tenazas was never
Article 97 of the Labor Code as remuneration or earnings, terminated by the company.
capable of being expressed in terms of money whether fixed  As regards Endraca, the respondents alleged that they hired
or ascertained on a time, task, piece or commission basis. him as a spare driver in February 2001. They allow him to
Payment by the piece is just a method of compensation and drive a taxi unit whenever their regular driver will not be able
does not define the essence of the relations.  to report for work. July 2003, however, Endraca stopped
reporting for work without informing the company of his
6. Tenazas, Francisco, and Endraca vs. R.Villegas Taxi reason.
Transport  LA – no illegal dismissal; no separation pay
 NLRC reversed
FACTS
 CA affirmed NLRC, but found that Francisco was not an
 Petitioners filed a complaint for illegal dismissal against employee of the company. It also deleted the award for
respondents separation pay and ordered reinstatement of the other 2.
 Tenazas alleged that the taxi assigned to him was sidewept
ISSUE
by another vehicle, causing a dent on the left fender near the
driver seat HELD
 The cost of repair for the damage was estimated at ₱500.00.
Upon reporting the incident to the company, he was scolded
 In reviewing the decision of the NLRC, the CA found that no reinstatement. Where reinstatement is no longer viable as an
substantial evidence was presented to support the option, separation pay equivalent to one (1) month salary for
conclusion that Francisco was an employee of the every year of service should be awarded as an alternative.
respondents and accordingly modified the NLRC decision. The payment of separation pay is in addition to payment of
 It stressed that with the respondents’ denial of employer- backwages.
employee relationship, it behooved Francisco to present  This doctrine of strained relations, however, should not be
substantial evidence to prove that he is an employee before used recklessly or applied loosely43 nor be based on
any question on the legality of his supposed dismissal impression alone. "It bears to stress that reinstatement is the
becomes appropriate for discussion. Francisco, however, did rule and, for the exception of strained relations to apply, it
not offer evidence to substantiate his claim of employment should be proved that it is likely that if reinstated, an
with the respondents.  atmosphere of antipathy and antagonism would be
 It is an oft-repeated rule that in labor cases, as in other generated as to adversely affect the efficiency and
administrative and quasi-judicial proceedings, "the quantum productivity of the employee concerned."
of proof necessary is substantial evidence, or such amount
of relevant evidence which a reasonable mind might accept 7. Alilem Cooperative vs Bandiola
as adequate to justify a conclusion." [SUBSTANTIAL
FACTS
EVIDENCE]
 In this case, however, Francisco failed to present any proof  Respondent was employed by petitioner as bookkeeper.
substantial enough to establish his relationship with the  . Petitioner's Board of Directors (the Board) received a letter
respondents. He failed to present documentary evidence like from a certain Napoleon Gao-ay (Napoleon) reporting the
attendance logbook, payroll, SSS record or any personnel alleged immoral conduct and unbecoming behavior of
file that could somehow depict his status as an employee. respondent by having an illicit relationship with Napoleon
 The CA’s order of reinstatement of Tenazas and Endraca, sister, Thelma G. Palma (Thelma). This prompted the Board
instead of the payment of separation pay, is also well in to conduct a preliminary investigation.
accordance with prevailing jurisprudence.  During the preliminary investigation, the Board received
 [A]n illegally dismissed employee is entitled to two reliefs: evidence of respondent alleged extramarital affair.
backwages and reinstatement. The two reliefs provided are  Respondent, on the other hand, denied the accusation
separate and distinct. In instances where reinstatement is no against him. He, instead, claimed that the accusation was a
longer feasible because of strained relations between the result of the insecurity felt by some members of the
employee and the employer, separation pay is granted. In cooperative and of the Board because of his growing
effect, an illegally dismissed employee is entitled to either popularity owing to his exemplary record as an
reinstatement, if viable, or separation pay if reinstatement is employee.Thelma executed an affidavit likewise denying the
no longer viable, and backwages. allegations of extra-marital affair.
 The normal consequences of respondents’ illegal dismissal,  In its Summary Investigation Report, the Ad Hoc Committee
then, are reinstatement without loss of seniority rights, and of petitioner concluded that respondent was involved in an
payment of backwages computed from the time extra-marital affair with Thelma. On July 10, 1997, the
compensation was withheld up to the date of actual Chairman of the Board sent a letterto respondent informing
 him of the existence of a prima facie case against him for  The existence of the Personnel Policy containing provisions
"illicit marital affair, an act that brings discredit to the on the grounds for termination of employees was not
cooperative organization and a cause for termination per questioned by respondent. In his position paper, respondent
AMPC (Alilem Multi-Purpose Cooperative) Personnel Policy.  only assailed the effectivity of the policy, as for him as it was
 Terminate his services as bookkeeper of petitioner, without amended on the same date as the letter-complaints against
any compensation or benefit except the unpaid balance of him. In other words, he claimed that the policy was amended
his regular salary for services actually rendered. in order to include therein the ground for his termination to
 Aggrieved, respondent filed a Complaint for Illegal Dismissal make sure that he is removed from his position.
against petitioner before the LA. Dismissed complaint for  Contrary to respondent claim, with the amendment of the
lack of merit. Personnel Policy, petitioner did not create a new ground for
 NLRC set aside the LA decision. The NLRC found petitioner the termination of employment to make sure that respondent
Personnel Policy to be of questionable existence and validity is removed from his position. The ground under the old
because it was unnumbered. It held that even assuming that policy is similar to that provided for in the new policy.
respondent had an extra-marital affair with a married  To be sure, an employer is free to regulate all aspects of
woman, the latter is not his fellow worker in petitioner employment.It may make reasonable rules and regulations
business establishment.It, thus, concluded that respondent for the government of its employees which become part of
dismissal was not founded on any of the just causes for the contract of employment provided they are made known
termination of employment under Article 282 of the Labor to the employee.In the event of a violation, an employee may
Code, as amended. be validly terminated from employment on the ground that an
employer cannot rationally be expected to retain the
employment of a person whose lack of morals, respect and
ISSUE loyalty to his employer, regard for his employer rules and
W/N respondent was illegally dismissed application of the dignity and responsibility, has so plainly
and completely been bared.
HELD  The employer evidence consists of sworn statements of
either relatives or friends of Thelma and respondent. They
 NO.
either had direct personal knowledge of the illicit relationship
 It is undisputed that respondent was dismissed from or revealed circumstances indicating the existence of such
employment for engaging in extramarital affairs, a ground for relationship.
termination of employment stated in petitioner Personnel
 There is also no reason to doubt the statement of Melanie
Policy. This basis of termination was made known to
Gao-ay, the wife of Napoleon, who witnessed the
respondent as early as the first communication made by
embarrassing "encounter", to borrow the term she used,
petitioner.
between [respondent] and Thelma in her own boarding
 When the LA was called upon to decide the illegal dismissal house.
case, it ruled in favor of petitioner and upheld the basis of  While respondent act of engaging in extra--marital affairs
such dismissal which is the cited Personnel Policy
may be considered personal to him and does not directly
affect the performance of his assigned task as bookkeeper,
 aside from the fact that the act was specifically provided for   The parties executed an employment contract denominated
by petitioner Personnel Policy as one of the grounds for as a "Contract of Employment for a Fixed Period," stipulating
termination of employment, said act raised concerns to that the contract shall be for a period of one year
petitioner as the Board received numerous complaints and  According to INNODATA, petitioners’ employment already
petitions from the cooperative members themselves asking ceased due to the end of their contract.
for the removal of respondent because of his immoral  Petitioners filed a complaint. Petitioners claimed that they
conduct. should be considered regular employees since their
 The next question is whether procedural due process was positions as formatters were necessary and desirable to the
observed in the termination of respondent services. "Before usual business of INNODATA as an encoding, conversion
the services of an employee can be validly terminated, the and data processing company.
employer must furnish him two written notices: (a) a written  On the other hand, respondents explained that INNODATA
notice served on the employee specifying the ground or was engaged in the business of data processing,
grounds for termination, and giving the employee reasonable typesetting, indexing, and abstracting for its foreign clients.
opportunity to explain his side; and (b) a written notice of The bulk of the work was data processing, which involved
termination served on the employee indicating that upon due data encoding. Data encoding, or the typing of data into the
consideration of all the circumstances, grounds have been computer, included pre-encoding, encoding 1 and 2, editing,
established to justify his termination." proofreading, and scanning. Almost half of the employees of
 In this case, respondent was adequately afforded the INNODATA did data encoding work, while the other half
opportunity to defend himself and explain the accusation monitored quality control. Due to the wide range of services
against him. Upon receipt of the complaint, petitioner rendered to its clients, INNODATA was constrained to hire
conducted a preliminary investigation and even created an new employees for a fixed period of not more than one year.
Ad Hoc Committee to investigate the matter Respondents asserted that petitioners were not illegally
dismissed, for their employment was terminated due to the
8. Price vs. Innodata expiration of their terms of employment.
 LA – complaint for illegal dismissal meritorious
FACTS
 NLRC reversed. Not regular, but fixed term employees.
 (INNODATA) was a domestic corporation engaged in the
ISSUE
data encoding and data conversion business. It employed
encoders, indexers, formatters, programmers, Whether petitioners were hired by INNODATA under valid fixed-term
quality/quantity staff, and others, to maintain its business employment contracts.
and accomplish the job orders of its clients.
 Respondent Leo Rabang was its Human Resources and HELD
Development (HRAD) Manager, while respondent Jane
 There were no valid fixed-term contracts and petitioners
Navarette was its Project Manager. INNODATA had since
were regular employees of the INNODATA who could not be
ceased operations due to business losses in June 2002.
dismissed except for just or authorized cause.
 The employment status of a person is defined and and/or the intended end users thereof. Undeniably, the work
prescribed by law and not by what the parties say it should performed by petitioners was necessary or desirable in the
be. business or trade of INNODATA.
 Equally important to consider is that a contract of  However, it is also true that while certain forms of
employment is impressed with public interest such that labor employment require the performance of usual or desirable
contracts must yield to the common good. functions and exceed one year, these do not necessarily
  Thus, provisions of applicable statutes are deemed written result in regular employment under Article 280 of the Labor
into the contract, and the parties are not at liberty to insulate Code.
themselves and their relationships from the impact of labor  The decisive determinant in term employment is the day
laws and regulations by simply contracting with each other. certain agreed upon by the parties for the commencement
 Art. 280. Regular and Casual Employment. The provisions of and termination of their employment relationship, a day
written agreement to the contrary notwithstanding and certain being understood to be that which must necessarily
regardless of the oral agreement of the parties, an come, although it may not be known when. Seasonal
employment shall be deemed to be regular where the employment and employment for a particular project are
employee has been engaged to perform activities which are instances of employment in which a period, where not
usually necessary or desirable in the usual business or trade expressly set down, is necessarily implied
of the employer, except where the employment has been  Respondents maintain that the contracts of employment
fixed for a specific project or undertaking the completion or entered into by petitioners with INNDOATA were valid fixed-
termination of which has been determined at the time of term employment contracts which were automatically
engagement of the employee or where the work or services terminated at the expiry of the period stipulated therein. THE
to be performed is seasonal in nature and employment is for COURT DISAGREES.
the duration of the season.  While this Court has recognized the validity of fixed-term
 An employment shall be deemed to be casual if it is not employment contracts, it has consistently held that this is the
covered by the preceding paragraph. Provided, That, any exception rather than the general rule. More importantly, a
employee who has rendered at least one year of service, fixed-term employment is valid only under certain
whether such service is continuous or broken, shall be circumstances. In Brent, the very same case invoked by
considered a regular employee with respect to the activity in respondents, the Court identified several circumstances
which he is employed and his employment shall continue wherein a fixed-term is an essential and natural
while such activity exists. appurtenance:
 Undoubtedly, petitioners belong to the first type of regular o overseas employment contracts
employees. o appointments to the positions of dean, assistant
 In the case at bar, petitioners were employed by INNODATA dean, college secretary, principal, and other
on 17 February 1999 as formatters. The primary business of administrative offices in educational institutions
INNODATA is data encoding, and the formatting of the data
entered into the computers is an essential part of the  After considering petitioners’ contracts in their entirety, as
process of data encoding. Formatting organizes the data well as the circumstances surrounding petitioners’
encoded, making it easier to understand for the clients employment at INNODATA, the Court is convinced that the
 terms fixed therein were meant only to circumvent monetary equivalent computed from the time his
petitioners’ right to security of tenure and are, therefore, compensation was withheld from him up to the time of his
invalid. actual reinstatement.
 By virtue of the foregoing, an illegally dismissed employee is
 The contracts of employment submitted by respondents are entitled to reinstatement without loss of seniority rights and
highly suspect for not only being ambiguous, but also for other privileges, with full back wages computed from the
appearing to be tampered with. time of dismissal up to the time of actual reinstatement.
 Considering that reinstatement is no longer possible on the
 Petitioners alleged that their employment contracts with ground that INNODATA had ceased its operations in June
INNODATA became effective 16 February 1999, and the first 2002 due to business losses, the proper award is separation
day they reported for work was on 17 February 1999. pay equivalent to one month pay for every year of service, to
However, respondents asserted before the Labor Arbiter that be computed from the commencement of their employment
petitioners’ employment contracts were effective only on 6 up to the closure of INNODATA.
September 1999.
 Obviously, respondents wanted to make it appear that 9. BPI vs. BPIEU-MM
petitioners worked for INNODATA for a period of less than
one year. The only reason the Court can discern from such a FACTS
move on respondents’ part is so that they can preclude
 BPIEU-MM a legitimate labor organization and the sole and
petitioners from acquiring regular status based on their
exclusive bargaining representative of all the regular rank-
employment for one year.
and-file employees of petitioner BPI in Metro Manila and
 Under Section 3, Article XVI of the Constitution, it is the
petitioner BPI have an existing Collective Bargaining
policy of the State to assure the workers of security of tenure
Agreement (CBA
and free them from the bondage of uncertainty of tenure
 The CBA provides for loan benefits and relatively low
woven by some employers into their contracts of
interest rates.
employment. This was exactly the purpose of the legislators
 Thereafter, petitioner issued a "no negative data bank
in drafting Article 280 of the Labor Code – to prevent the
policy" for the implementation/availment of the manpower
circumvention by unscrupulous employers of the employee’s
loans which the respondent objected to, thus, resulting into
right to be secure in his tenure by indiscriminately and
labor-management dialogues. Unsatisfied with the result of
completely ruling out all written and oral agreements
those dialogues, respondent brought the matter to the
inconsistent with the concept of regular employment.
grievance machinery and afterwards, the issue, not having
 ART. 279. Security of Tenure. – In cases of regular
been resolved, the parties raised it to the Voluntary
employment, the employer shall not terminate the services of
Arbitrator.
an employee except for a just cause or when authorized by
 Voluntary Arbitrator found merit in the respondent's cause
this Title. An employee who is unjustly dismissed from work
 CA affirmed
shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, ISSUE
inclusive of allowances, and to his other benefits or their
W/N the no NDB policy violates the CBA construed in favor of the safety and decent living of the
laborer
HELD

 NO. 10. Philippine Journalists vs. JEU

 A CBA refers to the negotiated contract between a legitimate FACTS
labor organization and the employer concerning wages,
hours of work and all other terms and conditions of  Complainant Judith Pulido alleged that she was hired by
employment in a bargaining unit, including mandatory respondent as proofreader
provisions for grievances and arbitration machineries. As in  as union president, she sent two letters to President Gloria
all other contracts, there must be clear indications that the Arroyo, regarding their complaint of mismanagement being
parties reached a meeting of the minds. Therefore, the terms committed by PIJ executive
and conditions of a CBA constitute the law between the   that respondents took offense and started harassments to
parties. complainant union president
 The CBA in this case contains no provision on the "no   complainant received a letter from respondent Fundador
negative data bank policy" as a prerequisite in the Soriano, International Edition managing editor, regarding
entitlement of the benefits it set forth for the employees. In complainant’s attendance record
fact, a close reading of the CBA would show that the terms  complainant received another memo from Mr. Soriano, for
and conditions contained therein relative to the availment of not wearing her company ID and tardiness
the loans are plain and clear, thus, all they need is the  Complainant added that in her thirteen (13) years with the
proper implementation in order to reach their objective. The company and after so many changes in its management and
CA was, therefore, correct when it ruled that, although it can executives, she had never done anything that will cause
be said that petitioner is authorized to issue rules and them to issue a memorandum against her or her work
regulations pertinent to the availment and administration of attitude, more so, reasons to terminate her services; that she
the loans under the CBA, the additional rules and got dismissed because she was the Union President who
regulations, however, must not impose new conditions which was very active in defending and pursuing the rights of her
are not contemplated in the CBA and should be within the union members, and in fighting against the abuses of
realm of reasonableness. respondent Corporate Officers
 The "no negative data bank policy" is a new condition which  The second complainant Michael L. Alfante alleged that he
is never contemplated in the CBA and at some points, started to work with respondents as computer technician
unreasonable to the employees because it provides that  he was handed his notice of dismissal on the ground of "poor
before an employee or his/her spouse can avail of the loan performance"; and that complainant was dismissed
benefits under the CBA, the said employee or his/her spouse  Complainant Alfante submitted that he was dismissed
must not be listed in the negative data bank, or if previously without just cause.
listed therein, must obtain a clearance at least one year or  In its petition for review, petitioner maintained that under
six months as the case may be, prior to a loan application. Section 4, Article XIII of the CBA, funeral and bereavement
 Article 1702 of the New Civil Code provides that, in case of
doubt, all labor legislation and all labor contracts shall be
 aid should be granted upon the death of a legal dependent that a dependent shall be the following, namely: (a) the legal
of a regular employee spouse entitled by law to receive support from the member;
(b) the legitimate, legitimated, or legally adopted, and
ISSUE illegitimate child who is unmarried, not gainfully employed
whether or not petitioner’s denial of respondents’ claims for funeral and has not reached 21 of age, or, if over 21 years of age, is
and bereavement aid granted under Section 4, Article XIII of their congenitally or while still a minor has been permanently
CBA constituted a diminution of benefits in violation of Article 100 of incapacitated and incapable of self-support, physically or
the Labor Code. mentally; and (c) the parent who is receiving regular support
from the members
HELD  Secondly, Section 4(f) of R.A. No. 7875, as amended by
R.A. No. 9241,25 enumerates who are the legal dependents
 A collective bargaining agreement (or CBA) refers to the
 It is clear from these statutory definitions of dependent that
negotiated contract between a legitimate labor organization
the civil status of the employee as either married or single is
and the employer concerning wages, hours of work and all
not the controlling consideration in order that a person may
other terms and conditions of employment in a bargaining
qualify as the employee’s legal dependent. What is rather
unit. As in all contracts, the parties in a CBA may establish
decidedly controlling is the fact that the spouse, child, or
such stipulations, clauses, terms and conditions as they may
parent is actually dependent for support upon the employee
deem convenient provided these are not contrary to law,
 Considering that existing laws always form part of any
morals, good customs, public order or public policy. Thus,
contract, and are deemed incorporated in each and every
where the CBA is clear and unambiguous, it becomes the
contract,28 the definition of legal dependents under the
law between the parties and compliance therewith is
aforecited social legislations applies herein in the absence of
mandated by the express policy of the law.
a contrary or different definition mutually intended and
 Here, a conflict has arisen regarding the interpretation of the
adopted by the parties in the CBA. Accordingly, the
term legal dependent in connection with the grant of funeral
concurrence of a legitimate spouse does not disqualify a
and bereavement aid to a regular employee under Section 4,
child or a parent of the employee from being a legal
Article XIII of the CBA
dependent provided substantial evidence is adduced to
 Petitioner insists that notwithstanding the silence of the CBA,
prove the actual dependency of the child or parent on the
the term legal dependent should follow the definition of it
support of the employee.
under Republic Act (R.A.) No. 8282 (Social Security Law), so
 In this regard, the differentiation among the legal dependents
that in the case of a married regular employee, his or her
is significant only in the event the CBA has prescribed a
legal dependents include only his or her spouse and
hierarchy among them for the granting of a benefit; hence,
children, and in the case of a single regular employee, his or
the use of the terms primary beneficiaries and secondary
her legal dependents include only his or her parents and
beneficiaries for that purpose. But considering that Section
siblings, 18 years old and below
4, Article XIII of the CBA has not included that differentiation,
 Social legislations contemporaneous with the execution of
petitioner had no basis to deny the claim for funeral and
the CBA have given a meaning to the term legal dependent.
bereavement aid of Alfante for the death of his parent whose
First of all, Section 8(e) of the Social Security Law provides
 death and fact of legal dependency on him could be contract and practice, its entitlement to the payment of
substantially proved. service charges from the entries specified in its audit reports
 Pursuant to Article 100 of the Labor Code, petitioner as the  NLRC reversed the LA’s decision and considered the
employer could not reduce, diminish, discontinue or specified entries/transactions as "service chargeable."
eliminate any benefit and supplement being enjoyed by or  CA – affirmed LA decision but made PPHI pay the union
granted to its employees. This prohibition against the P80k.
diminution of benefits is founded on the constitutional
mandate to protect the rights of workers and to promote their ISSUE
welfare and to afford labor full protection. HELD

11. National Union Workers in Hotel Restaurants and Allied  Affirm CA ruling
Industries vs. Philippine Plaza Chapter  A collective bargaining agreement  is a contract executed at
the request of either the employer or the employees’
FACTS exclusive bargaining representative with respect to wages,
 The Union is the collective bargaining agent of the rank-and- hours of work and all other terms and conditions of
file employees of respondent Philippine Plaza Holdings, Inc. employment, including proposals for adjusting any
(PPHI). grievances or questions under such agreement
 As a contract and the governing law between the parties, the
 They executed a CBA. The CBA provided, among others, for
general rules of statutory construction apply in the
the collection, by the PPHI, of a ten percent (10%) service
interpretation of its provisions. Thus, if the terms of the CBA
charge on the saleof food, beverage, transportation, laundry
are plain, clear and leave no doubt on the intention of the
and rooms
contracting parties, the literal meaning of its stipulations, as
 The distributable amount will beshared equally by all HOTEL
they appear on the face of the contract, shall prevail.
employees, including managerial employees but excluding
 No service charges were due from the specified
expatriates
entries/transactions; they either fall within the CBA-excepted
  Union’s Service Charge Committee informed the Union
"Negotiated Contracts" and "Special Rates" or did not
President of uncollected service charges for the last quarter
involve "a sale of food, beverage, etc."
of 1998
 PPHI admitted liability for ₱80,063.88 out of the
₱2,952,467.61 that the Union claimed as uncollected service  The Union anchors its claim for services charges on
Sections 68 and 69 of the CBA, in relation with Article96 of
charges.
the Labor Code. Section 68 states that the sale of food,
 It filed more audit reports all detailing uncollected service beverage, transportation, laundry and rooms are subject to
charges in the millions. service charge at the rate often percent (10%). Excepted
 Failed to reach an agreement. Union filed before the LA a from the coverage of the 10% service charge are the so-
complaint for non-payment of specified service charges called "negotiated contracts" and "special rates."
 The LA dismissed the Union’s complaint for lack of merit.
The LA declared that the Union failed to show, by law,
  Following the wordings of Section 68 of the CBA, three  For purposes of this provision, eligible dependents are the
requisites must be present for the provisions on service covered employees’ natural parents, legal spouse and
charges to operate: legitimate or legally adopted or step children who are
unmarried, unemployed who have not attained twenty-one
o (1) the transaction from which service charge is (21) years of age and wholly dependent upon the employee
sought to be collected is a sale; for support.
 This provision applies only in cases of actual confinement in
o (2) the sale transaction covers food, beverage, the hospital for at least six (6) hours.
transportation, laundry and rooms; and  When the CBA expired, they executed another incorporating
the same provisions on dependents’ hospitalization
o (3) the sale does not result from negotiated contracts insurance benefits but in the increased amount of
and/or at special rates. ₱50,000.00. 
 On separate occasions, three members of MMPSEU filed
 Cards Revenue" and "Maxi Media Barter" to be negotiated claims for reimbursement of hospitalization expenses of their
contracts or contracts under special rates, and the entries dependents.
"Business Promotions" and "Gift Certificates" as contracts  MMPC paid only a portion of their hospitalization insurance
that did not involve a sale of food, beverage, etc. The CA claims, not the full amount.
also found no factual and evidentiary basis to support the  Claiming that under the CBA, they are entitled to hospital
Union’s claim for service charges on the entries "Guaranteed benefits which should not be reduced by the amounts paid
No show" and "F & B Revenue." by MEDICard and by Prosper, Calida, Oabel and Martin
 The PPHI did not violate Article 96 of the Labor Code when asked for reimbursement from MMPC. However, MMPC
they refused the Union’s claim for service charges on the denied the claims contending that double insurance would
specified entries/transactions result if the said employees would receive from the company
the full amount of hospitalization expenses despite having
12. MMPSEU vs Mitsubishi Motors already received payment of portions thereof from other
health insurance providers.
FACTS
 This prompted the MMPSEU President to write the MMPC
 The parties’ CBA provides for the hospitalization insurance President demanding full payment of the hospitalization
benefits for the covered dependents benefits.
 Each employee shall pay one hundred pesos (₱100.00) per  MMPSEU alleged that there is nothing in the CBA which
month through salary deduction as his share in the payment prohibits an employee from obtaining other insurance or
of the insurance premium for the above coverage with the declares that medical expenses can be reimbursed only
balance of the premium to be paid by the COMPANY. upon presentation of original official receipts. It stressed that
 The hospitalization expenses must be covered by actual the hospitalization benefits should be computed based on
hospital and doctor’s bills and any amount in excess of the the formula indicated in the CBA without deducting the
above mentioned level of benefits will be for the account of benefits derived from other insurance providers.
the employee.
  Voluntary Arbitrator – MMPC liable to reimburse the amount liable to pay medical expenses actually shouldered by the
of hospitalization expenses paid by other health care employees’ dependents.
companies  It is well to note at this point that the CBA constitutes a
 CA – reversed. It ruled that despite the lack of a provision contract between the parties and as such, it should be
which bars recovery in case of payment by other insurers, strictly construed for the purpose of limiting the amount of
the wordings of the subject provision of the CBA showed that the employer’s liability. The terms of the subject provision
the parties intended to make MMPC liable only for expenses are clear and provide no room for any other interpretation.
actually incurred by an employee’s qualified dependent. As there is no ambiguity, the terms must be taken in their
plain, ordinary and popular sense.
ISSUE

W/N the CA erred when it reversed the decision of the Voluntary  MMPSEU insists that MMPC is also liable for the amounts
Arbitrator covered under other insurance policies; otherwise, MMPC
will unjustly profit from the premiums the employees
HELD contribute through monthly salary deductions.

 NO  This contention is unmeritorious.

 The Voluntary Arbitrator based his ruling on the opinion of
Atty. Funk that the employees may recover benefits from
 To constitute unjust enrichment, it must be shown that a
different insurance providers without regard to the amount of party was unjustly enriched in the sense that the term
benefits paid by each. According to him, this view is unjustly could mean illegally or unlawfully
consistent with the theory of the collateral source rule.
 Under this rule, if an injured person receives compensation  The CBA has provided for MMPC’s limited liability which
for his injuries from a source wholly independent of the extends only up to the amount to be paid to the hospital
tortfeasor, the payment should not be deducted from the and doctor by the employees’ dependents, excluding
damages which he would otherwise collect from the those paid by other insurers.
tortfeasor.
 The collateral source rule is ‘predicated on the theory that a 13.
tortfeasor has no interest in, and therefore no right to benefit
from monies received by the injured person from sources
unconnected with the defendant’.
 Thus, it finds no application to cases involving no-fault
insurances under which the insured is indemnified for losses
by insurance companies, regardless of who was at fault in
the incident generating the losses.
 We agree with the CA. The condition that payment should be
direct to the hospital and doctor implies that MMPC is only