ARELLANO UNIVERSITY SCHOOL OF LAW

Taft Avenue Corner Menlo St. Pasay City, Philippines

S/Y 2016-2017, 2ND Semester

LABOR REVIEW

Atty. Nieves V. De Castro

April 06, 2017

CASE COMPILATION

Collaboration Project Labor Review Class

(Thursday; 6-9PM; RH 103),
2n d
Semester of S/Y 2016-2017

This is a copy of JULIE ANNE PRINCESS A. CIAR

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1. Calalang vs. Williams 70 Phil 728 law to delegate a power to determine some fact or state of things upon which the law makes, or
intends to make, its own action depend. To deny this would be to stop the wheels of government.
Facts: The National Traffic Commission issued a resolution dated July 17, 1940 recommending to There are many things upon which wise and useful legislation must depend which cannot be
the Director of Public Works and the Secretary of Public Works that animal-drawn vehicles be known to the law-making power, and, must, therefore, be a subject of inquiry and determination
prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to outside of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.)
Dasmarinas Street, from 7:30am to 12:30pm and from 1:30pm to 5:30pm; and along Rizal Avenue
extending from the railroad crossing at Antipolo Street to Eschague Street from 7:00am to Said Act, by virtue of which the rules and regulations complained of were promulgated, aims
11:00pm from a period of 1 year from the date of the opening of the Colgante Bridge to traffic. to promote safe transit upon and avoid obstructions on national roads, in the interest and
The Chairman of the Traffic Commission adopted the measure proposed as well as the Mayor of convenience of the public. In enacting said law, therefore, the National Assembly was prompted by
Manila and the Acting Chief of Police of Manila upon receipt of indorsement issued by the considerations of public convenience and welfare. It was inspired by a desire to relieve congestion
Secretary of Public Works and Communications of traffic. which is, to say the least, a menace to public safety. Public welfare, then, lies at the
Due to such events, Maximo Calalang, as private citizen, questioned the constitutionality of bottom of the enactment of said law, and the state in order to promote the general welfare may
Commonwealth Act No. 548 which granted the Director of Public Works, with the approval of the interfere with personal liberty, with property, and with business and occupations. Persons and
Secretary of Public Works and Communications, the authority to promulgate rules and regulations property may be subjected to all kinds of restraints and burdens, in order to secure the general
for the regulation and control of the traffic on national roads on the ground that such is an undue comfort, health, and prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To this
delegation of legislative power and that the rules issued pursuant to such delegation constituted fundamental aim of our Government the rights of the individual are subordinated. Liberty is a
an unlawful interference with legitimate businesses or trade, abridge the right to personal liberty blessing without which life is a misery, but liberty should not be made to prevail over authority
and freedom of locomotion and infringe upon the constitutional precept regarding the promotion because then society will fall into anarchy. Neither should authority be made to prevail over liberty
of social justice to insure the well-being and economic security of the people. because then the individual will fall into slavery. The citizen should achieve the required balance of
liberty and authority in his mind through education and personal discipline, so that there may be
Issue: Whether or not the Commonwealth Act No. 548 is unconstitutional on the ground that it established the resultant equilibrium, which means peace and order and happiness for all. The
delegates legislative power upon the Director of Public Works and Secretary of Public Works and moment greater authority is conferred upon the government, logically so much is withdrawn from
Communication. the residuum of liberty which resides in the people. The paradox lies in the fact that the apparent
curtailment of liberty is precisely the very means of insuring its preservation.
Held: No, the provisions of the law do not confer legislative power upon the Director of Public
Works and the Secretary of Public Works and Communications. The promotion of social justice is to be achieved not through a mistaken sympathy towards
The authority therein conferred upon them and under which they promulgated the rules and any given group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy,"
regulations now complained of is not to determine what public policy demands but merely to carry but the humanization of laws and the equalization of social and economic forces by the State so
out the legislative policy laid down by the National Assembly in said Act, to wit, "to promote safe that justice in its rational and objectively secular conception may at least be approximated. Social
transit upon and avoid obstructions on, roads and streets designated as national roads by acts of justice means the promotion of the welfare of all the people, the adoption by the Government of
the National Assembly or by executive orders of the President of the Philippines" and to close them measures calculated to insure economic stability of all the competent elements of society, through
temporarily to any or all classes of traffic "whenever the condition of the road or the traffic makes the maintenance of a proper economic and social equilibrium in the interrelations of the members
such action necessary or advisable in the public convenience and interest." The delegated power, of the community, constitutionally, through the adoption of measures legally justifiable, or extra-
if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment constitutionally, through the exercise of powers underlying the existence of all governments on the
of the facts and circumstances upon which the application of said law is to be predicated. To time-honored principle of saluspopuliest suprema lex.
promulgate rules and regulations on the use of national roads and to determine when and how Social justice, therefore, must be founded on the recognition of the necessity of
long a national road should be closed to traffic, in view of the condition of the road or the traffic interdependence among divers and diverse units of a society and of the protection that should be
thereon and the requirements of public convenience and interest, is an administrative function equally and evenly extended to all groups as a combined force in our social and economic life,
which cannot be directly discharged by the National Assembly. It must depend on the discretion of consistent with the fundamental and paramount objective of the state of promoting the health,
some other government official to whom is confided the duty of determining whether the proper comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest
occasion exists for executing the law. But it cannot be said that the exercise of such discretion is number."
the making of the law. As was said in Locke‘s Appeal (72 Pa. 491): "To assert that a law is less
than a law, because it is made to depend on a future event or act, is to rob the Legislature of the 2. PASEI v. Drilon; GR No. 81958; June 30, 1988
power to act wisely for the public welfare whenever a law is passed relating to a state of affairs Topic: Basic Principles and Concepts
not yet developed, or to things future and impossible to fully know." The proper distinction the
court said was this: "The Legislature cannot delegate its power to make the law; but it can make a Facts: PASEI is a firm engaged principally in the recruitment of Filipino workers, male and

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female, for overseas placement. It questions the validity and constitutionality of Department Order committing prohibited and illegal acts.
No. 1, Series of 1988, of the Department of Labor and Employment, in the character of
"GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO On petition forcertiorari, the CA annulled the NLRC decision and reinstated that of the LA.
DOMESTIC AND HOUSEHOLD WORKERS‖. Specifically, the measure is assailed for ―discrimination Aggrieved, CASI, the Union and the Union officers and members elevated the matter to the Court.
against males or females‖ that it "does not apply to all Filipino workers but only to domestic
helpers and females with similar skills;" During the pendency of the cases, the affected Union members (who were ordered reinstated)
filed with the LA a motion for reinstatement pending appeal and the computation of their
Issue: Whether Department Order No. 1 series of 1988issued by the Secretary of Labor & backwages. But the LA awarded separation pay and other benefits. On appeal, the NLRC denied
Employment is constitutional and a valid exercise of police power? the Union members claim for separation pay, accrued wages and other benefits.When elevated to
the CA, the appellate court held that reinstatement pending appeal applies only to illegal dismissal
Held:Department Order No. 1 series of 1998 is constitutional and a valid exercise of police power. cases under Article 223 of the Labor Code and not to cases under Article 263. Hence, the petition
by the Union and its officers and members in G.R. No. 179220.
The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order to The Court agreed with the CA on the illegality of the strike as well as the termination of the Union
promote the general welfare." As defined, it consists of (1) an imposition of restraint upon liberty officers, but disagreed with the CA insofar as it affirmed the reinstatement of the Union members.
or property, (2) in order to foster the common good. It is not capable of an exact definition but The Court, instead, sustained the dismissal not only of the Union officers but also the Union
has been, purposely, veiled in general terms to underscore its all-comprehensive embrace. members who, during the illegal strike, committed prohibited acts by threatening, coercing, and
intimidating non-striking employees, officers, suppliers and customers; obstructing the free ingress
The petitioner has shown no satisfactory reason why the contested measure should be nullified. to and egress from the company premises; and resisting and defying the implementation of the
There is no question that Department Order No. 1 applies only to "female contract workers," but it writ of preliminary injunction issued against the strikers.
does not thereby make an undue discrimination between the sexes. It is well-settled that "equality
before the law" under the Constitution does not import a perfect identity of rights among all men The Court further held that the terminated Union members, who were ordered reinstated by the
and women. It admits of classifications, provided that (1) such classifications rest on substantial LA, should have been immediately reinstated due to the immediate executory nature of the
distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing reinstatement aspect of the LA decision. In view, however, of CASIs failure to reinstate the
conditions; and (4) they apply equally to all members of the same class. dismissed employees, the Court ordered CASI to pay the terminated Union members their accrued
backwages from the date of the LA decision until the eventual reversal by the NLRC of the order of
The Court is satisfied that the requisites of classification were properly established in the said reinstatement. In addition to the accrued backwages, the Court awarded separation pay as a form
Department Order. of financial assistance to the Union members equivalent to one-half month salary for every year of
service to the company up to the date of their termination.

3. C. Alcantara& Sons vs CA, et al.; GR No. 155109; September 29, 2010 ISSUE:
Topic: Basic Principles and Concepts
1.) Whether the petitioner is liable to pay the accrued wages of the dismissed employees?
FACTS: 2.) Whether or not the Court erred in awarding separation pay to the dismissed union officers and
The negotiation between CASI and the Union on the economic provisions of the CBA ended in a employees?
deadlock prompting the Union to stage a strike but the strike was later declared by the LA to be
illegal in violation of the CBAs no strike-no lockout provision.Consequently, the Union officers were
HELD:
deemed to have forfeited their employment with the company and made them liable for actual
Yes, CASI is liable to pay the striking Union members their accrued wages for four months and
damages plus interest and attorney‘s fees, while the Union members were ordered to be reinstated
nine days, which is the period from the notice of the LAs order of reinstatement until the reversal
without backwages there being no proof that they actually committed illegal acts during the strike.
thereof by the NLRC.
Notwithstanding the provision of the Labor Code mandating that the reinstatement aspect of the
decision be immediately executory, the LA refused to reinstate the dismissed Union members. On Article 264 (a) of the Labor Code provides for the liabilities of the Union officers and members
November 8, 1999, the NLRC affirmed the LA decision insofar as it declared the strike illegal and participating in illegal strikes and/or committing illegal acts. Thus, the said provision sanctions the
ordered the Union officers dismissed from employment and liable for damages but modified the dismissal of a Union officer who knowingly participates in an illegal strike or who knowingly
same by considering the Union members to have been validly dismissed from employment for participates in the commission of illegal acts during a lawful strike. In this case, the Union officers
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were in clear breach of the above provision of law when they knowingly participated in the illegal
strike. The motion for partial consideration by the petitioner is partly granted. The decision of the Court is
partly reconsidered.
As to the Union members, the same provision of law provides that a member is liable when he
knowingly participates in the commission of illegal acts during a strike. We find no reason to
reverse the conclusion of the Court that CASI presented substantial evidence to show that the 4. Case digest: St. Mary’s Academy of Dipolog City vs. Teresita Palcaio, et al.;
striking Union members committed the following prohibited acts: (a) They threatened, coerced, GR No. 16491308; September 2010
and intimidated non-striking employees, officers, suppliers and customers;(b) They obstructed the
free ingress to and egress from the company premises; and (c) They resisted and defied the Facts:
implementation of the writ of preliminary injunction issued against the strikers.
In the 1990s, petitioner hired respondents Calibod, Laguio Santander, Saile Padilla, Andalahao,
The commission of the above prohibited acts by the striking Union members warrants their Decipulo and Montederamos, as teachers and respondents Palacio as guidance counselor. In
dismissal from employment. accordance to DECS Memorandum No. 10, S. 1998 pursuant to RA 7836, the Petitioner informed
the respondents that they cannot be re-accepted for the school year 2000-2001 for not having
Records show that the LA found the strike illegal and sustained the dismissal of the Union officers, passed the LET (Licensure Examinations for Teachers), nor can they continue with their teaching
but ordered the reinstatement of the striking Union members for lack of evidence showing that profession.
they committed illegal acts during the illegal strike. This decision, however, was later reversed by
They filed a complaint contesting that their termination is highly irregular and premature. They
the NLRC.Pursuant to Article 223of the Labor Code and well-established jurisprudence, the
averred their right to security of tenure despite the requirements set by the PRC for they had
decision of the LA reinstating a dismissed or separated employee, insofar as the reinstatement
special permits to teach and the civil service eligibility required under the law. In addition to this,
aspect is concerned, shall immediately be executory, pending appeal. The employee shall either be
the deadline for teachers to register under the Memorandum was set to 19 September 2000, but
admitted back to work under the same terms and conditions prevailing prior to his dismissal or
the petitioner decided to terminate them as early as 31 March 2000. Lastly, the acceptance of the
separation, or, at the option of the employee, merely reinstated in the payroll. It is obligatory on
Petitioner of other teachers who do not also possess the required eligibility under the
the part of the employer to reinstate and pay the wages of the dismissed employee during the
Memorandum showed evident bad faith.
period of appeal until reversal by the higher court.If the employer fails to exercise the option of re-
admitting the employee to work or to reinstate him in the payroll, the employer must pay the Below are the decisions of the LA, NLRC and the CA:
employeessalaries during the period between the LAs order of reinstatement pending appeal and
the resolution of the higher court overturning that of the LA. LA: adjudged the petitioner guilty of illegal dismissal. Thus, petitioner was ordered to reinstate the
respondents or to pay them separation pat at the rate of ½ month wage for every year of service,
2.) Separation pay may be given as a form of financial assistance when a worker is dismissed in plus limited backwages.
cases such as the installation of labor-saving devices, redundancy, retrenchment to prevent losses,
NLRC: upheld LA‘s decision, stating that the grounds relied upon by the petitioner to dismiss the
closing or cessation of operation of the establishment, or in case the employee was found to have
respondents are not among those enumerated by the Labor Code and that the respondents are
been suffering from a disease such that his continued employment is prohibited by law.It is a
regular employees, who cannot be removed without just cause.
statutory right defined as the amount that an employee receives at the time of his severance from
the service and is designed to provide the employee with the wherewithal during the period that CA: upheld both the decisions of the LA and NLRC. It further held that the Petitioner should have
he is looking for another employment. It is oriented towards the immediate future transitional adopted a contingency plan if in case the respondents still have not complied with the
period that the dismissed employee must undergo before locating a replacement job.As a general aforementioned requirements when the deadline had arrived. The CA also observed that the
rule, when just causes for terminating the services of an employee exist, the employee is not petitioner‘s ulterior motive for the termination may have been the result of a confrontation
entitled to separation pay because lawbreakers should not benefit from their illegal acts.The rule, between the principal and the respondents. However, as regards to Padilla, Palacio, Andalahao and
however, is subject to exceptions. Decipulo, the CA found them to be merely probationary; therefore there is no illegal dismissal to
speak of.
Other relevant Info:
Issues:
In the case at bar, not only did the Court declare the strike illegal, rather, it also found the Union
officers to have knowingly participated in the illegal strike. Worse, the Union members committed 1. Whether or not the dismissal of the respondents were premature because it was effected prior
prohibited acts during the strike. Thus, the awards of separation pay as a form of financial to the deadline set by the PRC to acquire their license.
assistance is deleted.

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2. Whether or not the respondents are entitled to backwages from March to 19 September 2000, ―Labor standards refer to the minimum requirements prescribed by existing laws, rules, and
because it is only on such date that they were already dismissible for cause. regulations relating to wages, hours of work, cost of living allowance and other monetary and
welfare benefits, including occupational, safety, and health standards (Section 7, Rule 1, Rules on
Held: the Disposition of Labor Standards Cases in the Regional Office dated September 16, 1987)‖
1. YES. The SC agrees with the decision of the LA a, NLRC and the CA. It is incumbent upon the Under the present rules, a Regional Director exercises both visitorial and enforcement power over
Court to afford full protection to labor. The law provided a specific timeframe within which the labor standards cases, and is therefore empowered to adjudicate money claims, provided there
respondents could comply, petitioner has no right to deny them of this privilege accorded to them still exists an employer-employee relationship, and the findings of the regional office is not
by law. In so far as Palacio, Calibod, Laguio0, Santander and Montederamos are condcerned, contested by the employer concerned. We believe that even in the absence of EO No. 111,
being dismissed on March 2000 was premature. However, Saile is not qualified to take the LET, Regional Directors already had enforcement powers over money claims, effective under PD No.
therefore, there is no prematurity to speak of on her end. Petitioner‘s intention and desire not to 850, issued on December 16, 1975, which transferred labor standards cases from the arbitration
put the students‘ education and school operation in jeopardy is neither a decisive consideration for system to the enforcement system.
respondent‘s termination prior to the deadline set by law. The prejudice that respondents‘
retention would cause to the school‘s operation is only trivial. 2. The Regional Director correctly applied the award with respect to those employees who signed
the complaint, as well as those who did not sign the complaint, but were still connected with the
2. NO. The respondents are entitled to limited backwages computed from 31 March 2000 to hospital at the time the complaint was filed. The jurisdiction for the award to this group of
September 2000 in favor of Palacio, Calibod, Laguio, Santander and Montederamos. The Petitioner employees who were not signatories to the complaint is that the visitorial and enforcement powers
cannot possibly presume that respondents could not timely comply with the requirements set by given to the Secretary of Labor is relevant to, and exercisable over establishments, not over
law. individual members/employees, because what is sought to be achieved by its exercise is the
5. Maternity Children’s Hospital vs. Sec. of Labor, GR No. 78909, June 30, 1989 observance of, and or compliance by such firm/establishment with the labor standards regulations.
However, there is no legal justification for the award in favor of those employees who were no
Topic:Regional Director/ Sec. of Labor extent of powers of Labor Standard Cases longer connected with the hospital at the time the complaint was filed. Article 129 of the Labor
Code in aid of the enforcement power of the Regional Director is not applicable where the
Facts: Petitioner is a semi-governmental hospital in Cagayan De Oro and employing forty-one (41) employee seeking to be paid is separated from service. His claim is purely money claim that has to
employees. Aside from salary and living allowances, the employees are given food, but the amount be subject of arbitration proceedings and therefore within the original and exclusive jurisdiction of
of which is deducted from their respective salaries. On May 3, 1986, ten (10) employees filed a the Labor Arbiter.
complaint with the Regional Director of Labor and Employment, Region 10, for underpayment of
their salaries and ECOLAS. Consequently, the Regional Director directed two of his labor standard 6. Philippine Airlines Inc. vs. Alberto Santos Jr. et. al. G.R. No. 77875, February 1993
and welfare officers to investigate and ascertain the truth of the allegations in the complaint.
Based on the report and recommendation, the Regional Director issued an order dated August 4, TOPIC: Grievances; Preventive Suspension
1986, directing payment of P723,888.58, to all the petitioner‘s employees. The Secretary of Labor FACTS: Individual respondents are all Port Stewards of Catering Sub-Department, Passenger
likewise affirmed the Decision and dismissed the Motion for Reconsideration of the petitioner. In a Services Department of petitioner. On various occasions, several deductions were made from their
petition for Certiorari, petitioner questioned the jurisdiction of the Regional Director and the all- salary. The deductions represented losses of inventoried items charged to them for mishandling of
embracing applicability of the award involving salary differentials and ECOLAS, in that it covers not company properties . . . which respondents resented. As there was no action taken on said
only the hospital employees who are signatories to the complaint, but also those who were no representation, private respondents filed a formal grievance on November 4, 1984 pursuant to the
longer in the service of the hospital at the time the complaint was filed. grievance machinery Step 1 of the Collective Bargaining Agreement between petitioner and the
Issues: union. The topics which the union wanted to be discussed in the said grievance were the
illegal/questionable salary deductions and inventory of bonded goods and merchandise being done
1. WON the Regional Director had jurisdiction over the case; by catering service personnel which they believed should not be their duty.
2. WON the Regional Director erred in extending the award to all hospital employees

Held:
Mr. Abad resolved the grievance by denying the petition of individual respondents and adopted the
1. Yes. The Regional Director has a jurisdiction in this labor standard case. This is Labor Standard position that inventory of bonded goods is part of their duty as catering service personnel, and as
case, and is governed by Article 128 (b) of the Labor Code, as amended by E.O. No. 111. for the salary deductions for losses, he rationalized:

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 1. It was only proper that employees are charged for the amount due to 2. It impinges on the equal protection clause, for it treats OFWS differently from local Fil
mishandling of company property which resulted to losses. However, loss may be workers by putting a cap on the amount of lump sum salary to which OFWS are entitled in case of
cost price 1/10 selling price. illegal dismissal, while setting no limit to the same monetary award for local workers when their
dismissal is declared illegal;
Going over the explanation, Mr. Abad found the same unsatisfactory. Thus, a penalty of
suspension ranging from 7 days to 30 days were (sic) imposed depending on the number of 3. The disparate treatment is not reasonable as there is no substantial distinction between
infractions committed. the two groups; and that it defeats Section 18, Article II of the Constitution which guarantees the
protection of the rights and welfare of all Filipino workers, whether deployed locally or overseas.
Private respondents appealed the decision of the labor arbiter to respondent commission which
rendered the aforequoted decision setting aside the labor arbiter's order of dismissal. Petitioner's
ISSUE: WON petitioner is entitled to all his salaries for the unexpired portion of his
motion for reconsideration having been denied, it interposed the present petition.
contract and not just the 3 months of the unexpired portion.
ISSUE: Whether or not public respondent NLRC acted with grave abuse of discretion amounting
to lack of jurisdiction in rendering the aforementioned decision. SC: YES!
RULING:
1. The subject clause has a discriminatory intent against, and an invidious impact on, OFWS at
Petitioner submits that since the grievance machinery was established for both labor and three levels:
management as a vehicle to thresh out whatever problems may arise in the course of their
relationship, every employee is duty bound to present the matter before management and give the First, OFWS with the employment contracts of less than one year vis-à-vis OFWS with employment
latter an opportunity to impose whatever corrective measure is possible. Under normal contracts of one year or more;
circumstances, an employee should not preempt the resolution of his grievance; rather, he has the
duty to observe the status quo. Second, among OFWS with employment contracts of more than one year; and
As respondent NLRC has pointed out, Abad's failure to act on the matter may have been due to
petitioner's inadvertence, but it is clearly too much of an injustice if the employees be made to Third, OFWS vis-à-vis local workers with fixed-period employment.
bear the dire effects thereof. Much as the latter were willing to discuss their grievance with their
employer, the latter closed the door to this possibility by not assigning someone else to look into  the illegally dismissed OFW with employment contract of less than one year will be paid all his
the matter during Abad's absence. Thus, private respondents should not be faulted for believing salaried for the unexpired portion thereof; while the OFW with employment contract of at least
that the effects of the CBA in their favor had already stepped into the controversy one year or more will only be awarded whichever is less between three months‘ salary for every
year of the unexpired term or the salary for the unexpired portion thereof.
7. SERRANO v GALLANT MARITIME SERVICES, et al., GR No. 167614, March 24, 2009
On the Second, the subject clause creates a sub-layer of discrimination among OFWS whose
BASIC PRINCIPLES AND CONCEPT contract periods are more than 1 year: those who are illegally dismissed with less than 1 year left
in their contracts shall be entitled to their salaries for the entire unexpired portion thereof, while
FACTS: Antonio Serrano worked as Second Officer for respondent recruitment agency and its those who are illegally dismissed with on eyear or more remaining in their contracts shall be
foreign principal, Marlow Navigation with a fixed term of 12 months. At the time of his repatriation, covered by the subject clause, and their monetary benefits limited to their salaries for three
he had served only 2 months and 7 days of his contract, leaving an expired portion of 9 months months only.
and 23 days. Petitioner‘s dismissal was declared illegal and he was awarded, under the prevailing
rule, US$ 8,770.00 representing the salary for 3 months of the unexpired portion of the contract in On the third, prior to RA 8042, OFWS and local workers with the fixed-term employment who were
accordance with the provisions RA 8042. Petitioner claims that he is entitled to all his salaries for illegally discharged were treated alike in terms of the computation of their money claims; they
the unexpired portion of his contract and not just the 3 months of the unexpired portion. were uniformly entitled to their salaries for the unexpired portion of their contracts. But with the
enactment of RA 8042, illegally dismissed OFWS with an unexpired portion of 1 year or more in
He further questioned the constitutionality of the said clause of Sec 10, that: their employment contract have since been differently treated in that their money claims are
subject to 3 month cap, whereas no such limitation is imposed on local workers with fixed term
1. It unduly impairs the freedom of OFWS to negotiate in their employment contracts a employment.
determinate employment period and a fixed salary package.
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2. There being a suspect classification involving a vulnerable sector protected by the Constitution,  More of an administrative board than a part of the integrated judicial system
the Court, after subjecting the classification to a strict judicial scrutiny, has determined that there  Function is more active, affirmative, dynamic
is no compelling state interest that the subject clause may possibly serve. In fine, the government
has failed to discharge its burden of proving of the existence of a compelling state interest that  Exercises judicial / quasi-judicial functions in the determination of disputes between
would justify the perpetuation of the discrimination against OFWS under the subject clause. Thus, employers and employees
the subject clause is violative of the right of petitioner and other OFWS to equal protection.  Has jurisdiction over the entire PH re: matters concerning employer-employee, landlord-
tenant/farm-laborer relations
8. ANG TIBAY and NATIONAL WORKERS’ BROTHERHOOD v. COURT OF INDUSTRIAL  Can take cognizance of industrial or agricultural dispute causing or likely to cause a strike
RELATIONS and NATIONAL LABOR UNION, INC. or lockout provided that
Topic: The cardinal primary requirements of due process in administrative proceedings;  The number of employees involved exceeds 30
Characterization of the CIR  Such dispute is submitted to the Court by the Labor Sec. or by any / both of the parties
to the controversy and certified by Labor Sec. as proper to be dealt with by the court
Decision on motion for reconsideration and on motion for new trial
 Investigates and studies all pertinent facts related to the industry concerned when
Facts directed by the PH President
An MfR was filed by the Solicitor-General on behalf of respondent CIR. National Labor Union on  There is a mingling of executive and judicial functions, a departure from the rigid doctrine
the other hand prays for the remanding of the case to CIR for a new trial. Ang Tibay filed an of the separation of governmental powers
opposition for both the motion for reconsideration of CIR and the motion for a new trial by the In Goseco v. CIR, the Court said that CA 103 requires CIR to ―act according to justice and equity
National Labor Union (NLU). and substantial merits of the case, without regard to technicalities or legal forms and shall not be
bound by any technicalities or legal forms and shall not be bound by any technical rules of legal
Toribio Teodoro owns and operates Ang Tibay, a leather company which supplies the Philippine evidence but may inform its mind in such manner as it may deem just and equitable.‖
Army. NLU avers that employer Toribio Teodoro (of the National Workers‘ Brotherhood [NWB] of
Ang Tibay) made a false claim that there was a shortage of leather soles in Ang Tibay, making it HOWEVER, this does NOT mean that CIR can entirely ignore or disregard the fundamental and
necessary for him to lay off workers. NLU alleges that such claim was unsupported by the Bureau essential requirements of due process in trials and investigations of an administrative character.
of Customs records and the accounts of native dealers of leather. Such was just a scheme adopted Cardinal primary requirements of due process in administrative proceedings
to discharge all the members of the NLU from work. Hence, they say that Teodoro was guilty of
unfair labor practice for discriminating against NLU and unjustly favoring NWB. 1. Right to a hearing, including the right to present one‘s own case and submit
evidence in support thereof
As regards the exhibits attached to this case, NLU says that these are so inaccessible to the
2. Tribunal must consider the evidence presented
respondents that even with the exercise of due diligence they could not be expected to have
obtained them and offered as evidence in the CIR. In addition, the attached documents and 3. Decision must have something to support itself
exhibits are of such far-reaching importance and effect that their admission would necessarily 4. Evidence must be substantial
mean the modification and reversal of the judgment rendered herein. 1. It must be relevant as a reasonable mind might accept it as adequate to
Resolution and Disposition support a conclusion
2. The rules of evidence shall not be controlling so that the mere admission
The court observed that, except as to the alleged agreement between the Ang Tibay and the of matter which would be deemed incompetent in judicial proceedings would not
NWB, the record is barren and does not satisfy the thirst for a factual basis upon which to invalidate the administrative order
predicate a conclusion of law [see Primary cardinal requirements below]. Therefore, in the interest
3. Mere uncorroborated hearsay or rumor does NOT constitute substantial
of justice, a new trial should commence giving the movant the opportunity to present new
evidence
evidence.
5. Decision must be rendered on the evidence presented at the hearing, or at least
MfR denied. Motion for new trial granted. Case remanded to CIR. contained in the record and disclosed to the parties affected

Characterization of CIR 1. On boards of inquiry

1. They may be appointed for the purpose of investigating and
 Special court whose functions are stated in CA No. 103 determining the facts in any given case

6
 2. Their report and decision are only advisory evidenced by a copy of the pay voucher bearing petitioners signature. Petitioners accusation that
3. CIR may refer any industrial or agricultural dispute to a board of he was no longer allowed to enter the training site was further belied by the fact that he was able
inquiry, fiscal, justice of the peace, any public official but such delegation to claim his 13th month pay thereat on 9 December 2000, supported by a copy of the pay voucher
shall not affect the exercise of the Court itself or any of its powers signed by petitioner.
6. CIR or any of its judges must act on its or his own independent consideration of
On 26 July 2002, the Labor Arbiter rendered a Decision, in favor of the petitioner
the law and facts of the controversy, and not simply accept the views of a subordinate in
declaring illegal his separation from employment. The Labor Arbiter, however, did not order
arriving at the decision
petitioner‘s reinstatement for the same was no longer practical, and only directed private
7. CIR should render its decision in such a manner that the parties can know the respondent to pay petitioner backwages.
issues involved and the reasons for the decisions rendered.
Both parties questioned the Labor Arbiters Decision before the NLRC.
9. FEDERICO M. LEDESMA, JR., v. NATIONAL LABOR RELATIONS COMMISSION; G.R.
No. 174585; October 19, 2007 Issue: Whether or not the petitioner was illegally dismissed.
Topic: Social Justice
Held: NO. Petition DENIED.
There may be cases where the circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the result is an injustice to the employer. Petitioner failed to establish the fact of his dismissal. The NLRC did not give credence to
petitioners allegation that he was banned by the private respondent from entering the workplace,
Facts: On 4 December 1998, petitioner was employed as a bus/service driver by the private opining that had it been true that petitioner was no longer allowed to enter the training site when
respondent on probationary basis, as evidenced by his appointment. As such, he was required to he reported for work thereat on 2 December 2000, it is quite a wonder he was able to do so the
report at private respondent‘s training site in Dasmariñas, Cavite, under the direct supervision of very next day, on 3 December 2000, to claim his salary.
its site administrator, Pablo Manolo de Leon (de Leon).
While this Court is not unmindful of the rule that in cases of illegal dismissal, the employer
On 11 November 2000, petitioner filed a complaint against de Leon for allegedly abusing bears the burden of proof to prove that the termination was for a valid or authorized cause in the
his authority as site administrator by using the private respondent‘s vehicles and other facilities for case at bar, however, the facts and the evidence did not establish a prima facie case that the
personal ends. On 27 November 2000, de Leon filed a written report against the petitioner petitioner was dismissed from employment. Before the private respondent must bear the burden
addressed to private respondents Vice-President for Administration, Ricky Ty (Ty), citing his of proving that the dismissal was legal, petitioner must first establish by substantial evidence the
suspected drug use. fact of his dismissal from service. Logically, if there is no dismissal, then there can be no question
as to the legality or illegality thereof.
In view of de Leon‘s report, private respondents Human Resource Manager served a copy
of a Notice to petitioner requiring him to explain within 24 hours why no disciplinary action should It is true that the Constitution affords full protection to labor, and that in light of this
be imposed on him for allegedly violating Code of Conduct. Constitutional mandate, we must be vigilant in striking down any attempt of the management to
exploit or oppress the working class. However, it does not mean that we are bound to uphold the
On 3 December 2000, petitioner filed a complaint for illegal dismissal against private working class in every labor dispute brought before this Court for our resolution.
respondent before the Labor Arbiter. The law in protecting the rights of the employees, authorizes neither oppression nor self-
destruction of the employer. It should be made clear that when the law tilts the scales of justice in
For its part, private respondent countered that petitioner was never dismissed from favor of labor, it is in recognition of the inherent economic inequality between labor and
employment but merely served a Notice to Explain why no disciplinary action should be filed management. The intent is to balance the scales of justice; to put the two parties on relatively
against him in view of his superiors report that he was suspected of using illegal drugs. Instead of equal positions. There may be cases where the circumstances warrant favoring labor over the
filing an answer to the said notice, however, petitioner prematurely lodged a complaint for illegal interests of management but never should the scale be so tilted if the result is an injustice to the
dismissal against private respondent before the Labor Arbiter. employer. Justitia nemini neganda est -- justice is to be denied to none.

Private respondent likewise denied petitioners allegations that it banned the latter from 10. CRISTOBAL VS EMPLOYEES COMPENSATION COMMISSION
entering private respondents premises. Rather, it was petitioner who failed or refused to report to G.R. No. L-49280 April 30, 1980
work after he was made to explain his alleged drug use. Indeed, on 3 December 2000, petitioner FACTS: The deceased, Fortunato S. Cristobal was employed as Supervising Information Officer 11
was able to claim at the training site his salary for the period of 16-30 November 2000, as of the National Science Development Board (NSDB for short) based in Bicutan, Taguig, Rizal. On
7
April 8, 1976, he developed loose bowel movement which later worsened and his excrement was us to ignore the above provision of law and the policy of the State of giving maximum
marked with fresh blood. Self-administered medications were made but symptoms persisted until aid and protection to labor as We have stated earlier in the main decision. As the agents
April 22, 1976 when he was brought to the Hospital of Infant Jesus and was there treated by Dr. charged by the law to implement the social justice guarantee secured by both the 1935 and 1973
Willie Lagdameo, who diagnosed his illness as rectal malignancy. Despite earnest medical efforts, Constitutions, respondents should adopt a more liberal attitude in deciding claims for
he succumbed to his illness on May 27, 1977 compensation especially when there is some basis in the facts for inferring a work-
connection. This should not be confused with the presumption of compensability and theory of
The petitioner herein, as the decedent's widow and beneficiary, filed with the Government aggravation under the Workmen's Compensation Act. While these doctrines may have been
Service Insurance System (GSIS for short), a claim for income (death) benefits under Presidential abandoned under the new Labor Code (the constitutionality of such abrogation may still be
Decree No. 626, as amended. The petitioner appealed to the ECC, which affirmed the decision of challenged), it is significant that the liberality of the law, in general, still subsists. All these factual
the GSIS. and legal grounds' were considered in relation to each other constituting substantial evidence
clearly convincing Us to resolve that rectal cancer is compensable.
Hence, this petition.
11. Ymbong vs. ABS-CBN G.R. No. 184885, 07 March 2012
ISSUE: Whether or not the illness of the deceased, rectal cancer, is compensable. Topic: Declaration of Basic Policy (Art. 3, Labor Code) – Management Prerogative

HELD: YES! Facts:Ernesto Ymbong started working with ABS-CBN in 1993 at its regional station in Cebu as a
television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended
to radio when ABS-CBN Cebu launched its AM station DYAB in 1995 where he worked as drama
The deceased died of rectal cancer on May 27, 1977. Concededly, the exact cause or etiology of
and voice talent, spinner, scriptwriter and public affairs program anchor.
this disease is still unknown. Even respondent ECC's own medical officer, Dr. Mercia C. Abrenica,
certified that "the cause of rectal carzinoma as of any other malignancies is still unknown" (p. 9,
In 1996, ABS-CBN head office in Manila issued an HR Policy No. HR-ER-016 regarding
ECC rec.). Its cause and development are insidious, imperceptible to the naked eye, and defies
Employees seeking public office. The pertinent portion reads:
expert analysis. Therefore, whether or not the disease rectal cancer was caused or the risk of
contracting the same was increased by the decedent's working conditions remains uncertain. This
uncertainty, of course, cannot eliminate the probability that the ailment was work connected as it 1. Any employee who intends to run for any public office position, must file
had been established that the deceased was exposed to unhygienic "Forking conditions, various his/her letter of resignation, at least thirty (30) days prior to the official
chemicals and intense heat which are generally considered as predisposing factors of cancer. At filing of the certificate of candidacy either for national or local election.
this point, there is need to reiterate that when the deceased started working in 1964, he was free xxxx
from any kind of disease. 3. Further, any employee who intends to join a political group/party or even with
no political affiliation but who intends to openly and aggressively
campaign for a candidate or group of candidates (e.g. publicly
To establish compensability of the claim under the said theory, the claimant must show proof of speaking/endorsing candidate, recruiting campaign workers, etc.) must
work-connection. Impliedly, the degree of proof required is merely substantial evidence, which file a request for leave of absence subject to managements approval. For
means "such relevant evidence as a reasonable mind might accept as adequate to support a this particular reason, the employee should file the leave request at least
conclusion" (Ang Tibay vs. The Court of Industrial Relations and National Labor Union, Inc., 69 thirty (30) days prior to the start of the planned leave period.
Phil. 635) or clear and convincing evidence. In this connection, it must be pointed out that the
strict rules of evidence are not applicable in claims for compensation.
Prior to the 1998 election, Dante Luzon, assistant manager, issued a Memorandum dated March
Apparently, what the law merely requires is a reasonable work-connection and not a direct causal 25, 1998, reiterating the policy with the following tenor:
relation. This kind of interpretation gives meaning and substance to the liberal and compassionate
spirit of the law as embodied in Article 4 of the new Labor Code which states that "all doubts in Please be informed that per company policy, any employee/talent who wants to
the implementation and interpretation of the provisions of this Code, including its implementing run for any position in the coming election will have to file a leave of absence the
rules and regulations shall be resolved in favor of labor. " moment he/she files his/her certificate of candidacy.

In urging that the disease rectal cancer is not compensable since its nature or cause is unknown The services rendered by the concerned employee/talent to this company will
and petitioner was not able to show proof of direct causal relation, respondents would instruct then be temporarily suspended for the entire campaign/election period.

8
Luzon, however, admitted that upon double-checking of the exact text of the policy and
subsequent confirmation with the ABS-CBN Head Office, he saw that the policy actually
required suspension for those who intend to campaign for a political party or candidate On appeal, ABS-CBN insisted that Ymbong‘s contract is one between a self-employed contractor
and resignation for those who will actually run in the elections. and the hiring party which is a standard practice in the broadcasting industry. As for the
pronouncement that the company policy has already been superseded by the March 25,
1998 Memorandum issued by Luzon, the latter already clarified that it was the very policy he
According to Luzon, Ymbong approached him and said that he would leave radio for a couple of sought to enforce. ABS-CBN further contended that Ymbong‘s reinstatement is legally and
months because he will campaign for the administration ticket. It was only after the elections that physically impossible as the talent position he vacated no longer exists. Neither is there basis for
they found out that Ymbong actually ran for public office himself at the eleventh hour. Ymbong, on the award of back wages since he was not earning a monthly salary but paid talent fees on a per
the other hand, claims that in accordance with the March 25, 1998 Memorandum, he informed production/per script basis.
Luzon through a letter that he would take a few months leave of absence from March 8, 1998 to
May 18, 1998 since he was running for councilor of Lapu-Lapu City. The NLRC affirmed the LA‘s finding of illegal dismissal. It ruled that the March 25, 1998
Memorandum merely states that an employee who seeks any elected position in the government
Ymbong lost in the elections and tried to come back to ABS-CBN. Luzon informed them that they will only merit the temporary suspension of his services. It held that under the principle of social
cannot work there anymore because of company policy. This was stressed even in subsequent justice, the March 25, 1998 Memorandum shall prevail and ABS-CBN is estopped from enforcing
meetings and they were told that the company was not allowing any exceptions. ABS-CBN, the September 14, 1998 memorandum issued to Ymbong stating that his services had been
however, agreed out of pure liberality to give them a chance to wind up their participation in the automatically terminated when he ran for an elective position.
radio drama, Nagbabagang Langit, since it was rating well and to avoid an abrupt ending.
The CA reversed the NLRC and declared Ymbong resigned from employment and not to have been
But since the winding up took too long, Luzon sent Ymbong a memorandum reminding him that illegally dismissed. While it ruled that Ymbong is an employee of ABS-CBN, the subject company
his employment has already ended when he ran for the 1998 elections and it has been decided policy is the controlling guideline and therefore, Ymbong should be considered resigned from ABS-
that all his participation in the drama shows are immediately terminated. Ymbong in contrast CBN. While Luzon has policy-making power as assistant radio manager, he had no authority to
contended that after the expiration of his leave of absence, he reported back to work as a regular issue a memorandum that had the effect of repealing or superseding a subsisting policy.
talent and in fact continued to receive his salary. When he received the said memorandum from
Luzon, he filed an illegal dismissal case. Issues: (1) Whether or not the HR Policy is a valid limitation on Ymbong‘s Constitutional right to
suffrage, as an exercise of management prerogative.
He argued that the ground cited by ABS-CBN for his dismissal was not among those enumerated in
the Labor Code, as amended. And even granting without admitting the existence of the company (2) Whether or not Ymbong, by seeking an elective post, is deemed to have resigned and
policy supposed to have been violated, Ymbong averred that it was necessary that the company not dismissed by ABS-CBN.
policy meet certain requirements before willful disobedience of the policy may constitute a just Held: (1) YES. So long as a companys management prerogatives are exercised in good faith for
cause for termination. Ymbong further argued that the company policy violates his constitutional the advancement of the employers interest and not for the purpose of defeating or circumventing
right to suffrage. the rights of the employees under special laws or under valid agreements, this Court will uphold
ABS-CBN prayed for the dismissal of the complaints arguing that there is no employer-employee them.
relationship between the company and Ymbong. ABS-CBN contended that he is not an employee In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is
but a talent as evidenced by his talent contract. However, notwithstanding his status, ABS-CBN well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from
has a standing policy on persons connected with the company whenever they will run for public any appearance of impartiality so that the confidence of the viewing and listening public in it will
office. not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it must
also protect the right of an employer to exercise what are clearly management prerogatives. The
free will of management to conduct its own business affairs to achieve its purpose cannot be
The Labor Arbiter decided in favor of Ymbong, finding that there exists an employer-employee denied.
relationship considering the stipulations in the talent contract. According to the Labor Arbiter, the
appointment letter/talent contract imposed conditions in the performance of his work, specifically
on attendance and punctuality, which effectively placed him under the control of ABS-CBN. The (2) YES. As Policy No. HR-ER-016 is the subsisting company policy and not Luzons March 25, 1998
Labor Arbiter likewise ruled that although the subject company policy is reasonable and not Memorandum, Ymbong is deemed resigned when he ran for councilor.
contrary to law, the same was not made known to Ymbong and in fact was superseded by another
one embodied in the Memorandum issued by Luzon. Thus, there is no valid or authorized cause in The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has
terminating Ymbong from his employment. policy-making powers in relation to his principal task of administering the networks radio station in
9
the Cebu region, the exercise of such power should be in accord with the general rules and She supervised the district managers and medical representatives of her company and prepared
regulations imposed by the ABS-CBN Head Office to its employees. Clearly, the March 25, marketing strategies for Astra in that area.
1998 Memorandum issued by Luzon which only requires employees to go on leave if they intend to
run for any elective position is in absolute contradiction with Policy No. HR-ER-016 issued by the Even before they got married, Tecson received several reminders from his District Manager
ABS-CBN Head Office in Manila which requires the resignation, not only the filing of a leave of regarding the conflict of interest which his relationship with Bettsy might engender. Still, love
absence, of any employee who intends to run for public office. Having been issued beyond the prevailed, and Tecson married Bettsy in September 1998.
scope of his authority, the March 25, 1998 Memorandum is therefore void and did not supersede
Policy No.HR-ER-016.
In January 1999, Tecson‘s superiors informed him that his marriage to Bettsy gave rise to a
Ymbongs overt act of running for councilor of Lapu-Lapu City is tantamount to resignation
conflict of interest. Tecson‘s superiors reminded him that he and Bettsy should decide which one
on his part. He was separated from ABS-CBN not because he was dismissed but because he
of them would resign from their jobs, although they told him that they wanted to retain him as
resigned. Since there was no termination to speak of, the requirement of due process in dismissal
much as possible because he was performing his job well.
cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to explain why
he did not tender his resignation before he ran for public office as mandated by the subject
company policy Tecson requested for time to comply with the company policy against entering into a relationship
with an employee of a competitor company. He explained that Astra, Bettsys employer, was
planning to merge with Zeneca, another drug company; and Bettsy was planning to avail of the
redundancy package to be offered by Astra. With Bettsy‘s separation from her company, the
12. DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON,
potential conflict of interest would be eliminated. At the same time, they would be able to avail of
petitioners, vs.GLAXO WELLCOME PHILIPPINES, INC. respondent.
the attractive redundancy package from Astra.

Topic: GEN. PROVISIONS: MANAGEMENT RIGHTS

In August 1999, Tecson again requested for more time resolve the problem. In September 1999,
Tecson applied for a transfer in Glaxos milk division, thinking that since Astra did not have a milk
FACTS: Petitioner Pedro A. Tecson (Tecson) was hired by respondent GlaxoWellcome Philippines, division, the potential conflict of interest would be eliminated. His application was denied in view of
Inc. (Glaxo) as medical representative on October 24, 1995, after Tecson had undergone training Glaxos least-movement-possible policy.
and orientation.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales
Thereafter, Tecson signed a contract of employment which stipulates, among others, that he area. Tecson asked Glaxo to reconsider its decision, but his request was denied.
agrees to study and abide by existing company rules; to disclose to management any existing or
future relationship by consanguinity or affinity with co-employees or employees of competing drug
ISSUE Whether or not Glaxo‘s policy on relationships between its employees and persons
companies and should management find that such relationship poses a possible conflict of interest,
employed with competitor companies and Glaxo‘s right to transfer Tecson to another sales territory
to resign from the company.
are valid exercise of management prerogative.

The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform
HELD: The prohibition against personal or marital relationships with employees of competitor
management of any existing or future relationship by consanguinity or affinity with co-employees
companies upon Glaxo‘s employees is reasonable under the circumstances because relationships of
or employees of competing drug companies. If management perceives a conflict of interest or a
that nature might compromise the interests of the company. In laying down the assailed company
potential conflict between such relationship and the employee‘s employment with the company,
policy, Glaxo only aims to protect its interests against the possibility that a competitor company
the management and the employee will explore the possibility of a transfer to another department
will gain access to its secrets and procedures.
in a non-counterchecking position or preparation for employment outside the company after six
months.
That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the
Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its
Tecson was initially assigned to market Glaxo‘s products in the Camarines Sur-CamarinesNorte
right to reasonable returns on investments and to expansion and growth. Indeed, while our laws
sales area.
endeavor to give life to the constitutional policy on social justice and the protection of labor, it
does not mean that every labor dispute will be decided in favor of the workers. The law also
Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra recognizes that management has rights which are also entitled to respect and enforcement in the
Pharmaceuticals (Astra), a competitor of Glaxo. Bettsy was Astra‘s Branch Coordinator in Albay. interest of fair play.

10
The policy being questioned is not a policy against marriage. An employee of the company remains Facts:Petitioner is a former Supervising Personnel Specialist of the CSC Regional Office No. IV and
free to marry anyone of his or her choosing. The policy is not aimed at restricting a personal also the Officer-in-Charge of the Public Assistance and Liaison Division (PALD) under the
prerogative that belongs only to the individual. However, an employee‘s personal decision does not "MamamayanMuna Hindi Mamaya Na" program of the CSC.
detract the employer from exercising management prerogatives to ensure maximum profit and
business success. On January 3, 2007 at around 2:30 p.m., an unsigned letter-complaint addressed to respondent
CSC Chairperson Karina Constantino-David which was marked "Confidential" and sent through a
courier service (LBC) from a certain "Alan San Pascual" of BagongSilang, Caloocan City, was
The Court finds no merit in petitioner‘s contention that Tecson was constructively dismissed when
received by the Integrated Records Management Office (IRMO) at the CSC Central Office.
he was transferred from the CamarinesNorte-Camarines Sur sales area to the Butuan City-Surigao
Following office practice in which documents marked "Confidential" are left unopened and instead
City-Agusan del Sur sales area, and when he was excluded from attending the company‘s seminar
sent to the addressee, the aforesaid letter was given directly to Chairperson David, which includes
on new products which were directly competing with similar products manufactured by Astra.
the following imputation:
Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when
continued employment becomes impossible, unreasonable, or unlikely; when there is a demotion ―I have known that a person have been lawyered by one of your attorny in the region 4
in rank or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer office. He is the chief of the Mamamayanmunahindimamayana division. He have been
becomes unbearable to the employee. None of these conditions are present in the instant case. helping many who have pending cases in the Csc. The justice in our govt system will not
The record does not show that Tecson was demoted or unduly discriminated upon by reason of be served if this will continue. Please investigate this anomaly because our perception of
such transfer. As found by the appellate court, Glaxo properly exercised its management your clean and good office is being tainted.
prerogative in reassigning Tecson to the Butuan City sales area:
Concerned Govt employee‖
By the very nature of his employment, a drug salesman or medical representative is expected to Chairperson David immediately formed a team of four personnel with background in information
travel. He should anticipate reassignment according to the demands of their business. It would be technology (IT), and issued a memo directing them to conduct an investigation and specifically "to
a poor drug corporation which cannot even assign its representatives or detail men to new back up all the files in the computers found in the MamamayanMuna (PALD) and Legal divisions."
markets calling for opening or expansion or to areas where the need for pushing its products is After some briefing, the team proceeded at once to the CSC-ROIV office at Panay Avenue, Quezon
great. More so if such reassignments are part of the employment contract. City. Upon their arrival thereat around 5:30 p.m., the team informed the officials of the CSC-ROIV,
respondents Director IV Lydia Castillo (Director Castillo) and Director III Engelbert Unite (Director
As noted earlier, the challenged policy has been implemented by Glaxo impartially and Unite) of Chairperson David‘s directive.
disinterestedly for a long period of time. In the case at bar, the record shows that Glaxo gave
Tecson several chances to eliminate the conflict of interest brought about by his relationship with The backing-up of all files in the hard disk of computers at the PALD and Legal Services Division
Bettsy. When their relationship was still in its initial stage, Tecson‘s supervisors at Glaxo constantly (LSD) was witnessed by several employees, together with Directors Castillo and Unite who closely
reminded him about its effects on his employment with the company and on the company‘s monitored said activity.
interests. After Tecson married Bettsy, Glaxo gave him time to resolve the conflict by either
Evaluating the subject documents obtained from petitioner‘s personal files, Chairperson David
resigning from the company or asking his wife to resign from Astra. Glaxo even expressed its
made the following observations, including the ff:―x xxThe number of pleadings so prepared
desire to retain Tecson in its employ because of his satisfactory performance and suggested that
further demonstrates that such person is not merely engaged in an isolated practice but pursues it
he ask Bettsy to resign from her company instead. Glaxo likewise acceded to his repeated requests
with seeming regularity. It would also be the height of naivete or credulity, and certainly against
for more time to resolve the conflict of interest. When the problem could not be resolved after
common human experience, to believe that the person concerned had engaged in this customary
several years of waiting, Glaxo was constrained to reassign Tecson to a sales area different from
practice without any consideration, and in fact, one of the retrieved files (item 13 above) appears
that handled by his wife for Astra. Notably, the Court did not terminate Tecson from employment
to insinuate the collection of fees. That these draft pleadings were obtained from the computer
but only reassigned him to another area where his home province, Agusan del Sur, was included.
assigned to Pollo invariably raises the presumption that he was the one responsible or had a hand
In effecting Tecson‘s transfer, Glaxo even considered the welfare of Tecson‘s family. Clearly, the
in their drafting or preparation since the computer of origin was within his direct control and
foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo.
disposition.‖

13. Pollo vs. David et al.; G.R. No. 181881; 18 October 2011 Issue:

Topic: General Provisions W/N the employee Pollohad a reasonable expectation of privacy as enshrined in the Constitution
over his personal files found on his work computer

Held:
11
In this inquiry, the relevant surrounding circumstances to consider include "(1) the employee‘s FACTS: Petitioner Mansion Printing engaged the services of respondent Bitara as a helper
relationship to the item seized; (2) whether the item was in the immediate control of the employee (kargador). Respondent was later promoted as the company‘s sole driver tasked to pick-up raw
when it was seized; and (3) whether the employee took actions to maintain his privacy in the materials for the printing business, collect account receivables and deliver the products to the
item." These factors are relevant to both the subjective and objective prongs of the clients within the delivery schedules. They closely monitored the attendance of respondent
reasonableness inquiry, and we consider the two questions together. Thus, where the employee because the timely delivery of the products to the clients is one of the foremost considerations
used a password on his computer, did not share his office with co-workers and kept the same material to the operation of the business. They noted his habitual tardiness and absenteeism.
locked, he had a legitimate expectation of privacy and any search of that space and items located Thus, petitioners issued a Memo requiring respondent to submit a written explanation why no
therein must comply with the Fourth Amendment. administrative sanction should be imposed on him for his habitual tardiness. Despite respondent‘s
undertaking to report on time, however, he continued to disregard attendance policies.
We answer the first in the negative. Petitioner failed to prove that he had an actual (subjective) Subsequently, his services were terminated for gross negligent of duties. Respondent filed a
expectation of privacy either in his office or government-issued computer which contained his complaint for illegal dismissal. LA and NLRC dismissed the complaint. CA ruled illegal dismissal
personal files. Petitioner did not allege that he had a separate enclosed office which he did not against Petitioners.
share with anyone, or that his office was always locked and not open to other employees or
visitors. Neither did he allege that he used passwords or adopted any means to prevent other ISSUE: WON Bitara is grossly negligent of his duties to warrant the dismissal of the complaint.
employees from accessing his computer files. On the contrary, he submits that being in the public
assistance office of the CSC-ROIV, he normally would have visitors in his office like friends, HELD: Yes. In Valiao, the Court defined gross negligence as ―want of care in the performance of
associates and even unknown people, whom he even allowed to use his computer which to him one‘s duties‖ and habitual neglect as ―repeated failure to perform one‘s duties for a period of time,
seemed a trivial request. He described his office as "full of people, his friends, unknown people" depending upon the circumstances.‖ These are not overly technical terms, which, in the first place,
and that in the past 22 years he had been discharging his functions at the PALD, he is "personally are expressly sanctioned by the Labor Code of the Philippines, to wit: ―ART. 282. Termination by
assisting incoming clients, receiving documents, drafting cases on appeals, in charge of employer. - An employer may terminate an employment for any of the following causes: xxx
accomplishment report, MamamayanMuna Program, Public Sector Unionism, Correction of name, (b) Gross and habitual neglect by the employee of his duties. xxx‖
accreditation of service, and hardly had anytime for himself alone, that in fact he stays in the
office as a paying customer." Under this scenario, it can hardly be deduced that petitioner had Clearly, even in the absence of a written company rule defining gross and habitual neglect
such expectation of privacy that society would recognize as reasonable. of duties, respondent‘s omissions qualify as such warranting his dismissal from the service. The
Moreover, even assuming arguendo, in the absence of allegation or proof of the aforementioned Court cannot simply tolerate injustice to employers if only to protect the welfare of undeserving
factual circumstances, that petitioner had at least a subjective expectation of privacy in his employees. Needless to say, so irresponsible an employee does not deserve a place in the
computer as he claims, such is negated by the presence of policy regulating the use of office workplace, and it is within the management‘s prerogative to terminate his employment. Even as
computers, as in Simons. the law is solicitous of the welfare of employees, it must also protect the rights of an employer to
exercise what are clearly management prerogatives. As long as the company‘s exercise of those
x xxxThe CSC in this case had implemented a policy that put its employees on notice that they rights and prerogative is in good faith to advance its interest and not for the purpose of defeating
have no expectation of privacy in anything they create, store, send or receive on the office or circumventing the rights of employees under the laws or valid agreements, such exercise will be
computers, and that the CSC may monitor the use of the computer resources using both upheld
automated or human means. This implies that on-the-spot inspections may be done to ensure that
the computer resources were used only for such legitimate business purposes. 15. Smart Communications vs Astorga (2007)

x xxxAs to the second point of inquiry on the reasonableness of the search conducted on FACTS:
petitioner‘s computer, we answer in the affirmative.
Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated
The search of petitioner‘s computer files was conducted in connection with investigation of (SMART) on May 8, 1997 as District Sales Manager of the Corporate Sales Marketing Group/ Fixed
work-related misconduct prompted by an anonymous letter-complaint addressed to Chairperson Services Division (CSMG/FSD).As District Sales Manager, Astorga enjoyed additional benefits,
David regarding anomalies in the CSC-ROIV where the head of the MamamayanMuna Hindi namely, annual performance incentive equivalent to 30% of her annual gross salary, a group life
Mamaya Na division is supposedly "lawyering" for individuals with pending cases in the CSC and hospitalization insurance coverage, and a car plan in the amount of P455,000.00.On May 18,
1998, SMART sent a letter to Astorga demanding that she pay the current market value of the
14. Mansion Printing Center vs Bitana, Jr. G.R. No. 168120, January 25, 2012 Honda Civic Sedan which was given to her under the company‘s car plan program, or to surrender
the same to the company for proper disposition.
TOPIC: Gross and Habitual Neglect of Duty (ART. 282 (B))

12
 Astorga, however, failed and refused to do either, thus prompting SMART to file a suit for replevin closing or cessation of operation of the establishment or undertaking unless the closing is for the
with the Regional Trial Court of Makati (RTC) on August 10, 1998.In February 1998, SMART purpose of circumventing the provisions of this Title, by serving a written notice on the workers
launched an organizational realignment to achieve more efficient operations. This was made and the Ministry of Labor and Employment at least one (1) month before the intended date thereof
known to the employees on February 27, 1998.Part of the reorganization was the outsourcing of x x x. The RTC rightfully assumed jurisdiction over the suit and
the marketing and sales force. Thus, SMART entered into a joint venture agreement with NTT of
Japan, and formed SMART-NTT Multimedia, Incorporated (SNMI). Since SNMI was formed to do acted well within its discretion in denying Astorga‘s motion to dismiss. SMART‘s demand for
the sales and marketing work, SMART abolished the CSMG/FSD, Astorga‘s division. payment of the market value of the car or, in the alternative, the surrender of the car, is not a
labor, but a civil, dispute. It involves the relationship of debtor and credit or rather than employee-
SNMI agreed to absorb the CSMG personnel who would be recommended by SMART.SMART then employer relations. As such, the dispute falls within the jurisdiction of the regular courts. Replevin
conducted a performance evaluation of CSMG personnel and those who garnered the highest is a possessory action, the gist of which is the right of possession in the plaintiff. The primary relief
ratings were favorably recommended to SNMI. Astorga landed last in the performance evaluation, sought therein is the return of the property in specie wrongfully detained by another person. It is
thus, she was not recommended by SMART. SMART offered her a supervisory position in the an ordinary statutory proceeding to adjudicate rights to the title or possession of personal
Customer Care Dept but she refused the offer. On March 3, 1998, SMART issued a memorandum property. The question of whether or not a party has the right of possession over the property
advising Astorga of the termination of her employment on ground of redundancy, effective April 3, involved and if so, whether or not the adverse party has wrongfully taken and detained said
1998. Astorga received it on March 16, 1998.The termination of her employment prompted property as to require its return to plaintiff, is outside the pale of competence of a labor tribunal
Astorga to file a Complaint for illegal dismissal, non-payment of salaries and other benefits with and beyond the field of specialization of Labor Arbiters
prayer for moral and exemplary damages against SMART. She claimed that abolishing CSMG and,
consequently, terminating her employment was illegal for it violated her right to security of tenure. 16. STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA
ISSUE: G.R. No. 164774 April 12, 2006
Whether the dismissal of Astorga be valid or illegal.
Whether or not the RTC has no jurisdiction over the complaint for recovery of a car which Astorga
acquired as part of her employee benefit. Petitioner Star Paper Corporation (the company) is a corporation engaged in trading
principally of paper products. Josephine Ongsitco is its Manager of the Personnel and
HELD: Administration Department while Sebastian Chua is its Managing Director.
Astorga is declared validly dismissed.Astorga was terminated due to redundancy, which is one of Respondents Simbol, Comia and Estrella were all regular employees of the company.
the authorized causes for the dismissal of an employee.
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an
Redundancy in an employer‘s personnel force necessarily or even ordinarily refers to duplication of employee of the company, whom he married on June 27, 1998. Prior to the marriage, Ongsitco
work. The characterization of an advised the couple that should they decide to get married, one of them should resign pursuant to
employee‘s services as superfluous or no longer necessary and, therefore, properly terminable, is a company policy promulgated in 1995, viz.:
an exercise of business judgment on the part of the employer. An employer is not precluded from 1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to
adopting a new policy conducive to a more economical and effective management even if it is not [the] 3rd degree of relationship, already employed by the company.
experiencing economic reverses. Neither does the law require that the employer should suffer
financial losses before he can terminate the services of the employee on the ground of 2. In case of two of our employees (both singles [ sic], one male and another female)
redundancy. But while tilting the scales of justice in favor of workers, the fundamental law also developed a friendly relationship during the course of their employment and then decided
guarantees the right of the employer to reasonable returns for his investment. In this light, we to get married, one of them should resign to preserve the policy stated above.
must acknowledge the prerogative of the employer to adopt such measures as will promote
greater efficiency, reduce overhead costs and enhance prospects of economic gains, albeit always Simbol resigned on June 20, 1998 pursuant to the company policy.
within the framework of existing laws. However, SMART failed to comply with the mandated one Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee,
(1) month notice prior to termination. The record is clear that Astorga received the notice of whom she married on June 1, 2000. Ongsitco likewise reminded them that pursuant to company
termination only on March 16, 1998 or less than a month prior to its effectively on April 3, 1998. policy, one must resign should they decide to get married. Comia resigned on June 30, 2000.
Likewise, the Department of Labo rand Employment was notified of the redundancy program only
on March 6, 1998.Article 283 of the Labor Code clearly provides: Art.283. Closure of establishment Estrella was hired on July 29, 1994. She met LuisitoZuñiga (Zuñiga), also a co-worker. Petitioners
and reduction of personnel. The employer may also terminate the employment of any employee stated that Zuñiga, a married man, got Estrella pregnant. The company allegedly could have
due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the terminated her services due to immorality but she opted to resign on December 21, 1999.
13
The respondents each signed a Release and Confirmation Agreement. They stated therein that company (no-spouse employment policies), and those banning all immediate family members,
they have no money and property accountabilities in the company and that they release the latter including spouses, from working in the same company (anti-nepotism employment policies).
of any claim or demand of whatever nature.

Respondents offer a different version of their dismissal. Respondents later filed a complaint for
unfair labor practice, constructive dismissal, separation pay and attorney‘s fees. They averred that The protection given to labor in our jurisdiction is vast and extensive that we cannot
the aforementioned company policy is illegal and contravenes Article 136 of the Labor Code. They prudently draw inferences from the legislature‘s silence 41 that married persons are not protected
also contended that they were dismissed due to their union membership. under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for
failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that
ISSUE the questioned policy is an invalid exercise of management prerogative

Whether the policy of the employer banning spouses from working in the same company violates 17. ARMANDO G. YRASEGUI v. PHILIPPINE AIRLINES, INC. (PAL); G.R. No. 168081;
the rights of the employee under the Constitution and the Labor Code or is a valid exercise of October 17, 2008
management prerogative.

HELD Topic: Article 3, Labor Code-Declaration of Basic Policy

The 1987 Constitution states our policy towards the protection of labor under the following Facts:
provisions, viz.:
Petitioner was an international flight steward of PAL. Standing at five feet and eight inches (5‘8"),
Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect with a large body frame, he continues to surpass themaximum ideal weight standardof 166 pounds
the rights of workers and promote their welfare. as mandated by the Cabin and Crew Administration Manual of PAL. Since 1984, PAL was reminding
and helping him to reach the desired weight goal but was unsuccessful. On November 13, 1992,
PAL finally served Petitioner a Notice of Administrative Charge for violation of company standards
Art. 136. It shall be unlawful for an employer to require as a condition of employment or on weight requirements and his avoidance of the required weight checks for his job. On December
continuation of employment that a woman employee shall not get married, or to stipulate 7, 1992, Petitioner did not deny being overweight but stated that his violation, if any, had already
expressly or tacitly that upon getting married a woman employee shall be deemed resigned or been condoned by PAL since "no action has been taken by the company" regarding his case "since
separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman 1988." He also claimed that PAL discriminated against him because "the company has not been
employee merely by reason of her marriage. fair in treating the cabin crew members who are similarly situated."After hearing on the matter,
Petitioner was formally informed by PAL that due to his inability to attain his ideal weight, despite
Respondents submit that their dismissal violates the above provision. Petitioners allege that its of the company‘s utmost leniency which spanned a period covering a total of almost five (5) years,
policy "may appear to be contrary to Article 136 of the Labor Code" but it assumes a new meaning his services were considered terminated effective immediately.
if read together with the first paragraph of the rule. The rule does not require the woman
employee to resign. The employee spouses have the right to choose who between them should His motion for reconsideration having been denied, Petitioner filed a complaint for illegal dismissal
resign. Further, they are free to marry persons other than co-employees. Hence, it is not the against PAL. The LA ruled in favor of Petitioner, stating that although the weight standards were
marital status of the employee, per se, that is being discriminated. It is only intended to carry out reasonable,the dismissal was illegal since the weight was not a deterrent for the performance of
its no-employment-for-relatives-within-the-third-degree-policy which is within the ambit of the his job/duties.The judgment was the reinstatement of the Petitioner, subject to backwages. The
prerogatives of management. NLRC affirmed the LA‘s decision. However, the CA reversed the decision of the NLRC, stating that
the weight standards of PAL are meant to be a continuing qualification for an employee‘s position,
It is true that the policy of petitioners prohibiting close relatives from working in the same
and the failure to adhere to the weight standards is an analogous cause for the dismissal of an
company takes the nature of an anti-nepotism employment policy. Companies adopt these policies
employee under Art. 282(e) of the Labor Code in relation to Article 282(a).Hence, this petition for
to prevent the hiring of unqualified persons based on their status as a relative, rather than upon
review on certiorari.
their ability.These policies focus upon the potential employment problems arising from the
perception of favoritism exhibited towards relatives.
Issues:
With more women entering the workforce, employers are also enacting employment policies
specifically prohibiting spouses from working for the same company. We note that two types of 1. Whether or not the CA gravely erred in holding that Petitioner‘s obesity can be a ground
employment policies involve spouses: policies banning only spouses from working in the same for dismissal under paragraph (e) of Article 282 of the Labor Code of the Philippines;

14
 2. Whether or not the CA gravely erred in holding that Petitioner‘s dismissal for obesity can Art. 223 of the LC states that in any event, ―the decision of the LA reinstating a dismissed
be predicated on the ―Bona Fide Occupational Qualification (BFOQ) defense‖; or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be
3. Whether or not the CA gravely erred in holding that Petitioner was not unduly executory, even pending appeal. The employee shall either be admitted back to work under the
discriminated against when he was dismissed while other overweight cabin attendants same terms and conditions prevailing prior to his dismissal or separation or, at the option of the
were either given flying duties or promoted; and employer, merely reinstated in the payroll…‖ There is evidence that PAL opted to physically
4. Whether or not the CA gravely erred when it brushed aside Petitioner‘s claims for reinstate him to a substantially equivalent position in accordance with the order of the LA.Be that
reinstatement and wages allegedly for being moot and academic. as it may, the SC granted the Petitioner separation pay equivalent to one-half (1/2) month‘s pay
for every year of service, which includes include regular allowances which he might have been
Held: receiving

1. No. 18. Manila Pavillionvs Henry Delada; G.R. No. 189947; January 25, 2012
By its nature, the qualifying standards of PAL are norms that apply prior to and after an Topic:Declaration of Basic Policy
employee is hired. Under this perspective, as highlighted in paragraph (e) of Article
282 of the LC, the employee can be dismissed simply because he no longer "qualifies" Facts:
for his job, irrespective of whether or not the failure to qualify was willful, voluntary or Delada was the Union President of the Manila Pavilion Supervisors Association at Manila Pavillion
intentional. Also, in the case at bar, the evidence on record militates against Petitioner‘s Hotel (MPH) originally assigned as Head Waiter of Rotisserie then reassigned him as Head Waiter
claims that his obesity is a disease since he was able to reduce his weight from 1984 to of Seasons Coffee Shop but respondent declined the inter-outlet transfer and instead asked for a
1992. grievance meeting on the matter, pursuant to their Collective Bargaining Agreement (CBA). He
also requested his retention as Head Waiter of Rotisserie while the grievance procedure was
2. No. ongoing.
Employment in particular jobs may not be limited to persons of a particular sex, religion,
or national origin unless the employer can show that sex, religion, or national origin is an The Management denied the request and he kept on reporting to Rotisserie.
actual qualification for performing the job. The qualification is called a BFOQ. In Star
Paper Corporation v. Simbol, the SC held that in order to justify a BFOQ, the employer MPH sent him several memoranda requiring him to explain in writing why he should not be
must prove that (1) the employment qualification is reasonably related to the essential penalized for the following offenses gross insubordination etc. Delada persistently rebuffed orders
operation of the job involved; and (2) that there is factual basis for believing that all or for him to report to his new assignment.
substantially all persons meeting the qualification would be unable to properly perform the
duties of the job. While respondent‘s Complaint is pending MPH citing security and safety reasons, placed
respondent on a 30-day preventive suspension. Thereafter found Delada guilty imposing the
A common carrier, from the nature of its business and for reasons of public policy, is penalty of 90-day suspension.
bound to observe extraordinary diligence for the safety of the passengers it transports. It
is bound to carry its passengers safely as far as human care and foresight can provide, Issue:
using the utmost diligence of very cautious persons, with due regard for all the Whether or not MPH retained the authority to continue with the administrative case against Delada
circumstances. Thus, the weight standards of PAL is very logical. for insubordination and willful disobedience of the transfer order.

3. No. Held:
Yes, the Supreme Court ruled that petitioner Manila Pavilion Hotel had the authority to continue
There is nothing on the records which could support the finding of discriminatory with the administrative proceedings for insubordination and willful disobedience against Delada
treatment. Substantial proof must be shown as to how and why they are similarly situated and to impose on him the penalty of suspension. Consequently, petitioner is not liable to pay back
and the differential treatment Petitioner got from PAL despite the similarity of his situation wages and other benefits for the period corresponding to the penalty of 90-day suspension.
with other employees. To make his claim more believable, Petitioner invokes the equal
protection clause guaranty of the Constitution. However, in the absence of governmental First, it must be pointed out that the basis of the 30-day preventive suspension imposed on Delada
interference, the liberties guaranteed by the Constitution cannot be invoked. Private was different from that of the 90-day penalty of suspension. The 30-day preventive suspension
actions, no matter how egregious, cannot violate the equal protection guarantee. was imposed by MPH on the assertion that Delada might sabotage hotel operations if preventive
suspension would not be imposed on him. On the other hand,the penalty of 90-day suspension
4. No.

15
was imposed on respondent as a form of disciplinary action. It was the outcome of the petitioners "withheld the necessary financial and logistic support such as spare parts, and repair
administrative proceedings conducted against him. and maintenance of the transferred buses until only two units remained in running condition." This
left respondents virtually jobless.
Preventive suspension is a disciplinary measure resorted to by the employer pending investigation
of an alleged malfeasance or misfeasance committed by an employee. The employer temporarily 20. PRODUCERS BANK OF THE PHILIPPINESvs.NATIONAL LABOR RELATIONS
bars the employee from working if his continued employment poses a serious and imminent threat COMMISSION and PRODUCERS BANK EMPLOYEES ASSOCIATION
to the life or property of the employer or of his co-workers.
The penalty of suspension refers to the disciplinary action imposed on the employee after an Facts:
official investigation or administrative hearing is conducted. The employer exercises its right to Private respondentEmployees Association filed a complaint with the Arbitration Branch, NLRC,
discipline erring employees pursuant to company rules and regulations. Thus, a finding of validity charging petitionerProducers Bank of the Philippines with diminution of benefits, non-compliance
of the penalty of 90-day suspension will not embrace the issue of the validity of the 30-day with Wage Order No. 6, non-payment of holiday pay and prayed for damages.
preventive suspension. In any event, petitioner no longer assails the ruling of the CA on the
illegality of the 30-day preventive suspension Labor Arbiter de Castro found respondent Employees Association‘s claims to be unmeritorious and
dismissed its complaint. However, the NLRC granted all of private respondent's claims, except for
19.) Prince Transport, Inc. vs. Garcia, et al. G.R. No. 167291, January 12, 2011 damages.
Topic: Rights of Employees/workers
Facts: Petitioner Bank filed a Motion for Partial Reconsideration, which was denied by the NLRC in a
Respondents were employees of herein petitioner company. The latter is engaged in the Resolution. Hence, Petitioner Bank filed a special civil action for Certiorari with prayer for
business of transporting of passengers by land. The controversy begun when the company preliminary injunction and/or restraining order.The High Court granted petitioner's prayer for TRO.
reduced the commissions of the respondents, this led the latter to hold meetings to discuss the
protection of their interests as employees. The company learned about this meetings and As to the bonuses, respondent Employees Association declared in its position papers filed with the
suspected that his employees were about to form a union. They made known to its employees his NLRC that –
objection in the formation of a union. Later on, the employees requested for a cash advance and 1. Producers Bank of the Philippines, a banking institution, has been providing several
the company denied it but allowed some to the employees. benefits to its employees since 1971 when it started its operation. Among the benefits it
had been regularly giving is a mid-year bonus equivalent to an employee‘s one-month
Because of this the respondents formed a union, the company then transferred the basic pay and a Christmas bonus equivalent to an employee‘s one whole month salary
members of the union and its sympathizers to one of its sub-companies Lubas Transport Inc. The (basic pay plus allowance);
respondents then filed a complaint in the LA against the company.
2. When P.D. 851, the law granting a 13thmonth pay, took effect, the basic pay previously
The LA dismissed the same. Respondents appealed to the NLRC, and the latter partially being given as part of the Christmas bonus was applied as compliance to it (P.D. 851), the
granted that same. The company appealed to the CA and the latter dismissed said petition. allowances remained as Christmas bonus;

Issue: Whether or not the company is guilty of ULP in transferring its employees who formed a 3. From 1981 up to 1983, the bank continued giving one month basic pay as mid-year
Union and its sympathizers to its sub-company Lubas. bonus, one month basic pay as 13thmonth pay but the Christmas bonus was no longer
based on the allowance but on the basic pay of the employees which is higher;

Held: The respondents‘ transfer of work assignments to Lubas was designed by petitioners as a 4. In the early part of 1984, the bank was placed under conservatorship but it still provided
subterfuge to foil the former‘s right to organize themselves into a union. Under Article 248 (a) and the traditional mid-year bonus;
(e) of the Labor Code, an employer is guilty of unfair labor practice if it interferes with, restrains or
coerces its employees in the exercise of their right to self-organization or if it discriminates in 5. By virtue of an alleged Monetary Board Resolution No. 1566, bank only gave a one-half
regard to wages, hours of work and other terms and conditions of employment in order to (1/2) month basic pay as compliance of the 13thmonth pay and none for the Christmas
encourage or discourage membership in any labor organization. bonus.

ISSUES:
Indeed, evidence of petitioners' unfair labor practice is shown by the established fact that,
1.Whether the grant of the subject mid-year and Christmas bonuses had ripened into a vested
after respondents' transfer to Lubas, petitioners left them high and dry insofar as the operations of
right.
Lubas was concerned. The Court finds no error in the findings and conclusion of the CA that
16
 xxxa bonus is an amount given ex gratia to an employee by an employer on
2. Whether petitioner Bank was justified in crediting the mid-year bonus and Christmas bonus account of success in business or realization of profits. How then can an
as part of the 13th month pay. employer be made liable to pay additional benefits in the nature of bonuses to its
employees when it has been operating on considerable net losses for a given
RULING: period of time?
BONUS
1.No. The contention of the Union that the granting of bonuses to the employees had ripened into Records bear out that petitioner Manilabank was already in dire financial straits
a company practice that may not be adjusted to the prevailing financial condition of the Bank has xxx the Central Bank found that Manila bank had been suffering financial losses.
no legal and moral bases. Its fiscal condition having declined, the Bank may not be forced to xxx it was placed under receivership and ordered to close operation. In 1988, it
distribute bonuses which it can no longer afford to pay and, in effect, be penalized for its past was ordered liquidated.
generosity to its employees.
xxx Clearly, there was no success in business or realization of profits to speak of
Also, the decrease in the mid-year and year-end bonuses do not constitute as a diminution of the that would warrant the conferment of additional benefits sought by private
employees' salaries, for bonuses are not part of labor standards in the same class as respondents. No company should be compelled to act liberally and confer
salaries, cost of living allowances, holiday pay, and leave benefits, which are provided by upon its employees additional benefits over and above those mandated
the Labor Code. by law when it is plagued by economic difficulties and financial losses.
No act of enlightened generosity and self-interest can be exacted from near
A bonus is an amount granted and paid to an employee for his industry and loyalty empty, if not empty coffers.
which contributed to the success of the employer's business and made possible the
realization of profits. It is an act of generosity granted by an enlightened employer to spur the 13TH MONTH PAY
employee to greater efforts for the success of the business and realization of bigger profits. The
granting of a bonus is a management prerogative, something given in addition to what is 2. Yes. PD 851 requires all employers to pay their employees receiving a basic salary of not
ordinarily received by or strictly due the recipient. Thus, a bonus is not a demandable and more than P 1,000 a month, regardless of the nature of the employment, a 13th month pay, not
enforceable obligation, except when it is made part of the wage, salary or later than December 24 of every year. However, employers already paying their employees a
compensation of the employee. 13th month pay or its equivalent are not covered by the law. Under the Revised Guidelines
on the Implementation of the 13th-Month Pay Law, the term "equivalent" shall be construed to
However, an employer cannot be forced to distribute bonuses which it can no longer afford to pay. include Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not
To hold otherwise would be to penalize the employer for his past generosity. Thus, in Traders less than 1/12 of the basic salary. The intention of the law was to grant some relief - not to all
Royal Bank v. NLRC, we held that - workers - but only to those not actually paid a 13th month salary or what amounts to it, by
whatever name called. It was not envisioned that a double burden would be imposed on the
It is clear x xx that the petitioner may not be obliged to pay bonuses to its employer already paying his employees a 13th month pay or its equivalent whether out of pure
employees. The matter of giving them bonuses over and above their generosity or on the basis of a binding agreement
lawful salaries and allowances is entirely dependent on the profits, if
any, realized by the Bank from its operations during the past year. 21. PAL VS NLRC and AIDA QUIJANO; GR NO. 123294; October 20, 2010

This doctrine was reiterated in the more recent case of Manila Banking Corporation v. NLRC TOPIC: Declaration of Public Policy – Rights of employees/workers
wherein the Court made the following pronouncements – FACTS:
By definition, a "bonus" is a gratuity or act of liberality of the giver which Private respondent Quijano rose from the ranks starting as accounting clerk in December
the recipient has no right to demand as a matter of right. It is something 1967 until she became Manager-Agents Services Accounting Division (ASAD) in September 1984.
given in addition to what is ordinarily received by or strictly due the recipient. The ASAD, the specific unit in PAL charged with the processing, verification, reconciliation, and
granting of a bonus is basically a management prerogative which cannot be validation of all claims for commission filed by agents worldwide, is under the direct supervision
forced upon the employer who may not be obliged to assume the onerous burden and control of the Vice President-Comptroller, and within the scope of the audit program of the
of granting bonuses or other benefits aside from the employee's basic salaries or Vice President-Internal Audit & Control. On May 5, 1989, an investigating committee chaired by
wages, especially so if it is incapable of doing so. Leslie W. Espino (Espino Committee) formally charged Quijano as Manager-ASAD in connection
with the processing and payment of commission claims to Goldair Pty. Ltd. (Goldair) wherein PAL

17
overpaid commissions to the latter amounting to several million Australian dollars during the period error of judgment. To be serious within the meaning and intendment of the law, the misconduct
1984-1987. must be of such grave and aggravated character and not merely trivial or unimportant. However
serious such misconduct, it must, nevertheless, be in connection with the employees work to
Pending further investigation, the Espino Committee placed Quijano under preventive constitute just cause for his separation. The act complained of must be related to the performance
suspension and at the same time required her to submit her answer to the charges. As directed, of the employees duties such as would show him to be unfit to continue working for the employer.
Quijano submitted her answer; she claims that she relied heavily on Senior Accounts Analyst Ms. On the other hand, moral turpitude has been defined as everything which is done contrary to
Curammeng‘s judgment competence to perform her work, particularly the completeness of the justice, modesty, or good morals; an act of baseness, vileness or depravity in the private and
documents check. She argues that if she were to do the completeness check herself, there would social duties which a man owes his fellowmen, or to society in general, contrary to justice,
be no need for the analyst. Thereafter, the Board resolved the case against her stating that: honesty, modesty, or good morals.
―Quijano did not see to it that the completeness check was actually being performed by Ms.
Curammeng. This lapse in control, contributed materially to the double, multiple and fictitious In the case at bar, the transgressions imputed to private respondent have never been
reporting of tickets, and double claims for commissions perpetrated by Goldair. Ms. Quijano was firmly established as deliberate and willful acts clearly directed at making petitioner lose millions of
certainly not expected to personally do and perform the completeness check herself. But as pesos. At the very most, they can only be characterized as unintentional, albeit major, lapses in
manager, it was clearly incumbent upon her to see to it that this completeness check was being professional judgment. Likewise, the same cannot be described as morally reprehensible actions.
done by her subordinates competently and efficiently. Yet, Ms. Quijano even failed to adopt ways Thus, private respondent may be granted separation pay on the ground of equity which this Court
and means of keeping herself sufficiently informed of the activities of her staff members so as to had defined as justice outside law, being ethical rather than jural and belonging to the sphere of
prevent or at least discover at an early stage the fraud being perpetrated on a massive scale by morals than of law. It is grounded on the precepts of conscience and not on any sanction of
Goldair against her company.‖ positive law, for equity finds no room for application where there is law.

Her motion for reconsideration having been denied by the Board in a Resolution, Quijano However, we do not agree with the NLRC that private respondents separation pay should be
filed a case against PAL for illegal suspension and illegal dismissal. The Labor Arbiter dismissed her awarded in accordance with PALs Special Retirement & Separation Program. Quijano was not
complaint. On appeal before the NLRC, the NLRC held in her favor directing PAL thru its separated from petitioners employ due to mandatory or optional retirement but, rather, by
responsible officials, to pay Quijano her separation pay in accordance with its Special Retirement & termination of employment for a just cause. Thus, any retirement pay provided by PALs Special
Separation Program. Hence, this petition. Retirement & Separation Program dated February 15, 1988 or, in the absence or legal inadequacy
thereof, by Article 287 of the Labor Codedoes not operate nor can be made to operate for the
ISSUE: Whether the award of separation pay to Quijano is justified despite having been lawfully benefit of private respondent
terminated for a just cause

HELD: Yes. The language of Article 279 of the Labor Code is pregnant with the implication that a
legally dismissed employee is not entitled to separation pay, to wit: 22. LEPANTO CERAMICS, INC. VS. LEPANTO CERAMICS EMPLOYEES ASSOCIATION,
G.R. NO. 180866; MARCH 2, 2010
An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full back wages, inclusive of Facts:
allowances, and to his other benefits or their monetary equivalent computed from the Respondent Lepanto Ceramics Employees Association (respondent Association) is a legitimate
time his compensation was withheld from him up to the time of his actual reinstatement. labor organization duly registered with the Department of Labor and Employment. It is the sole
and exclusive bargaining agent in the establishment of petitioner. In December 1998, petitioner
However, in exceptional cases, this Court has granted separation pay to a legally gave a P3, 000.00 bonuses to its employees, members of the respondent Association.
dismissed employee as an act of social justice or based on equity. In both instances, it is required Subsequently, in September 1999, petitioner and respondent Association entered into a Collective
that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral Bargaining Agreement (CBA) which provides for, among others, the grant of a Christmas gift
character of the employee or would involve moral turpitude. Under the present jurisprudential package/bonus to the members of the respondent Association.
framework, the grant of separation pay as a matter of equity to a validly dismissed employee is
not contingent on whether the ground for dismissal is expressly under Article 282(a) but whether The Christmas bonus was one of the enumerated existing benefits, practice of traditional rights
the ground relied upon is akin to serious misconduct or involves willful or wrongful intent on the which shall remain in full force and effect. In the succeeding years, 1999, 2000 and 2001, the
part of the employee. bonus was not in cash. Instead, petitioner gave each of the members of respondent Association
Tile Redemption Certificates equivalent to P3, 000.00.The bonus for the year 2002 is the root of
Serious misconduct as a valid cause for the dismissal of an employee is defined simply as
the present dispute. Petitioner gave a year-end cash benefit of Six Hundred Pesos (P600.00) and
improper or wrong conduct. It is a transgression of some established and definite rule of action, a
offered a cash advance to interested employees equivalent to one (1) month salary payable in one
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere
year. The respondent Association objected to the P600.00 cash benefit and argued that this was in
18
violation of the CBA it executed with the petitioner. The parties failed to amicably settle the All given, business losses are a feeble ground for petitioner to repudiate its obligation under the
dispute. The respondent Association filed a Notice of Strike with the National Conciliation Mediation CBA. The rule is settled that any benefit and supplement being enjoyed by the employees cannot
Board. The efforts to conciliate failed. be reduced, diminished, discontinued or eliminated by the employer. The principle of non-
diminution of benefits is founded on the constitutional mandate to protect the rights of workers
The case was then referred to the Voluntary Arbitrator for resolution where the Complaint and to promote their welfare and to afford labor full protection. Hence, absent any proof that
was docketed as Case No. LAG-PM-12-095-02.The Voluntary Arbitrator rendered a Decision petitioners consent was vitiated by fraud, mistake or duress, it is presumed that it entered into the
declaring that petitioner is bound to grant each of its workers a Christmas bonus of P3, 000.00 for CBA voluntarily and had full knowledge of the contents thereof and was aware of its commitments
the reason that the bonus was given prior to the effectivity of the CBA between the parties and under the contract
that the financial losses of the company is not a sufficient reason to exempt it from granting the
same. It stressed that the CBA is a binding contract and constitutes the law between the parties.
The Voluntary Arbitrator further expounded that since the employees had already been given 23. PLDT VS TEVES; GR NO. 143511
P600.00 cash bonus, the same should be deducted from the claimed amount of P3, 000.00, thus FACTS:
leaving a balance of P2, 400.00. Petitioner elevated the case to the Court of Appeals which
affirmed toto the decision of the Voluntary Arbitrator. Petitioner terminated respondent through an Inter-Office Memorandum dated on account
of his three (3) unauthorized leaves of absence committed within three (3) years in violation of
Issue: WON the petitioner is obliged to give the members of the respondent Association a petitioners rules and regulations.
Christmas bonus.
Respondent filed a Complaint for illegal dismissal. Labor Arbiter (LA) Benigno C. Villarente, Jr.
Held: rendered his Decision declaring that the dismissal of complainant LEGAL. Respondent interposed
No. By definition, a bonus is a gratuity or act of liberality of the giver. It is something given in an appeal with the NLRC. NLRC rendered its Decision reversing the LAs Decision. Petitioner's
addition to what is ordinarily received by or strictly due the recipient. A bonus is granted and paid motion for reconsideration was denied by the NLRC. Petitioner filed a Petition for Certiorari with
to an employee for his industry and loyalty which contributed to the success of the employer's prayer for the issuance of a temporary restraining order and/or injunction assailing the Decisin and
business and made possible the realization of profits. A bonus is also granted by an enlightened Resolution of NLRC. CA rendered its assailed Decision, which affirmed and reiterated the NLRC
employer to spur the employee to greater efforts for the success of the business and realization of decision.
bigger profits. Generally, a bonus is not a demandable and enforceable obligation. For a bonus to
be enforceable, it must have been promised by the employer and expressly agreed upon by the The CA found that (1) petitioner complied with the two-notice requirement which was essential to
parties. Given that the bonus in this case is integrated in the CBA, the same partakes the nature of respondent's right to due process; (2) respondent was given a notice to explain in writing why no
a demandable obligation. Verily, by virtue of its incorporation in the CBA, the Christmas bonus due disciplinary action should be meted on him for his unauthorized absences from February 11 to 19,
to respondent Association has become more than just an act of generosity on the part of the 1992; and (3) when respondents explanation proved unacceptable to petitioner, respondent was
petitioner but a contractual obligation it has undertaken. sent another notice informing him of his termination by reason of three unauthorized absences
within a three-year period, a conduct which was circumscribed in petitioner's rules and regulations.
A CBA refers to a negotiated contract between a legitimate labor organization and the employer, Notwithstanding compliance with the requirement of due process, the CA affirmed the illegality of
concerning wages, hours of work and all other terms and conditions of employment in a respondent's dismissal finding that respondent's comportment cannot be characterized as grave so
bargaining unit. As in all other contracts, the parties to a CBA may establish such stipulations, as to constitute grave misconduct; that his first two leaves of absence were satisfactorily justified;
clauses, terms and conditions as they may deem convenient, provided these are not contrary to and that he should not have been suspended from service by reason of such absences. However,
law, morals, good customs, public order or public policy. It is a familiar and fundamental doctrine the CA found that respondents failure to report for work on February 11 to 19, 1992 appeared to
in labor law that the CBA is the law between the parties and they are obliged to comply with its be the only unauthorized and unjustified leave of absence during his 11 years of stay with
provisions. This principle stands strong and true in the case at bar. A reading of the provision of petitioner, and it did not merit the harsh penalty of dismissal.
the CBA reveals that the same provides for the giving of a Christmas gift package/bonus without
qualification. Terse and clear, the said provision did not state that the Christmas package shall be Petitioner filed a motion for reconsideration, but was denied by the CA.
made to depend on the petitioner's financial standing. The records are also bereft of any showing
that the petitioner made it clear during CBA negotiations that the bonus was dependent on any
condition. Indeed, if the petitioner and respondent Association intended that the P3,000.00 bonus ISSUE:Whether or not respondent was illegally dismissed?
would be dependent on the company's earnings, such intention should have been expressed in the
CBA. HELD:
LABORLAW

19
 rights of the employees under special laws or under valid agreements, this Court will uphold them.
Even assuming that respondent's absenteeism constitutes willful disobedience, such offense does San Miguel Corporation's offer to compensate the members of its sales force who will be adversely
not warrant respondent's dismissal. Not every case of insubordination or willful disobedience by an affected by the implementation of the CDS by paying them a so-called "back adjustment
employee reasonably deserves the penalty of dismissal. There must be a reasonable commission" to make up for the commissions they might lose as a result of the CDS proves the
proportionality between the offense and the penalty. company's good faith and lack of intention to bust their union.

While management has the prerogative to discipline its employees and to impose appropriate
penalties on erring workers, pursuant to company rules and regulations, however, such 25. SOSITO vs. AGUINALDO DEVT CORP.
management prerogatives must be exercised in good faith for the advancement of the employers
interest and not for the purpose of defeating or circumventing the rights of the employees under Topic: Declaration of Basic Policy
special laws and valid agreements. The Court is wont to reiterate that while an employer has its Facts:Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging
own interest to protect, and pursuant thereto, it may terminate an employee for a just cause, such company, and was in charge of logging importation, with a monthly salary of P675.00, when he
prerogative to dismiss or lay off an employee must be exercised without abuse of discretion. Its went on indefinite leave with the consent of the company on January 16, 1976.
implementation should be tempered with compassion and understanding. The employer should
bear in mind that, in the execution of said prerogative, what is at stake is not only the employees On July 20, 1976, the private respondent, through its president, announced a retrenchment
position, but his very livelihood, his very breadbasket. program and offered separation pay to employees in the active service as of June 30, 1976, who
would tender their resignations not later than July 31, 1976
Dismissal is the ultimate penalty that can be meted to an employee. Even where a worker has
committed an infraction, a penalty less punitive may suffice, whatever missteps maybe committed The petitioner decided to accept this offer and so submitted his resignation on July 29, 1976, "to
by labor ought not to be visited with a consequence so severe. This is not only the laws concern avail himself of the gratuity benefits" promised.
for the workingman. There is, in addition, his or her family to consider. Unemployment brings
However, his resignation was not acted upon and he was never given the separation pay he
untold hardships and sorrows upon those dependent on the wage-earner
expected. The petitioner complained to the Department of Labor, where he was sustained by the
labor arbiter.
24. SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO) v. HON. BLAS OPLE; GR
5315, February 8, 1989
The company was ordered to pay Sosito the sum of P 4,387.50, representing his salary for six and
TOPIC: Management prerogatives; proof of good faith a half months. On appeal to the National Labor Relations Commission, this decision was reversed
and it was held that the petitioner was not covered by the retrenchment program.
FACTS: San Miguel Corporation introduced a marketing scheme known as the ―Complementary
Issue: WON the court erred in ruling in favor of the company.
Distribution System‖ (CDS) whereby its beer products were offered for sale directly to wholesalers
through San Miguel‘s sales offices. Held: NO.While the Constitution is committed to the policy of social justice and the protection of
Labor Union filed a complaint for unfair labor practice on the ground that CDS violates Sec 1 Art IV the working class, it should not be supposed that every labor dispute will be automatically decided
of CBA which states that, ―Employees… shall be entitled to a basic monthly compensation plus in favor of labor. Management also has its own rights which, as such, are entitled to respect and
commission based on their respective sales.‖ The union claims that implementation of the new enforcement in the interest of simple fair play. Out of its concern for those with less privileges in
scheme would -reduce the take-home pay of the salesmen. life, this Court has inclined more often than not toward the worker and upheld his cause in his
SMC positioned that they have an offer to compensate members who will be adversely affected by conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is
paying them a ―back-adjustment commission‖ to make up for the commissions they might lose. in every case for the deserving, to be dispensed in the light of the established f acts and the
applicable law and doctrine.
ISSUE: WON the CDS violates the collective bargaining agreement and whether it is an indirect
way of busting the union. We note that under the law then in force the private respondent could have validly reduced
its work force because of its financial reverses without the obligation to grant separation pay. This
HELD: NO. CDS is a valid exercise of management prerogatives. Every business enterprise was permitted under the original Article 272(a), of the Labor Code, which was in force at the time.
endeavors to increase its profits. In the process, it may adopt or devise means designed towards To its credit, however, the company voluntarily offered gratuities to those who would agree to be
that goal. So long as a company's management prerogatives are exercised in good faith for the phased out pursuant to the terms and conditions of its retrenchment program, in recognition of
advancement of the employer's interest and not for the purpose of defeating or circumventing the their loyalty and to tide them over their own financial difficulties. The Court feels that such

20
compassionate measure deserves commendation and support but at the same time rules that it b. Actual field work begins after 8:00 a.m., when the sales personnel follow their
should be available only to those who are qualified therefor. We hold that the petitioner is not one field itinerary, and ends immediately before 4:00 or 4:30 p.m. when they report
of them back to their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m.
comprises their hours of work in the field, the extent or scope and result of which
are subject to their individual capacity and industry and which "cannot be
26. Union of Filipro Employees v. Vivar, Jr., G.R. No. 79255, January 20, 1992 determined with reasonable certainty."
i. This is the reason why effective supervision over field work of salesmen
Facts: and medical representatives, truck drivers and merchandisers is
Filipro (Now Nestle) filed a case for declaratory relief with the NLRC respecting the claims of its practically a physical impossibility. Consequently, they are excluded from
monthly paid employees (Union of Filipro, or UFE) for holiday pay and the inclusion of its sales the ten holidays with pay award.
personnel in the benefit of Holiday Pay. 2) The respondent arbitrator's order to change the divisor from 251 to 261 days would result
in a lower daily rate which is violative of the prohibition on non-diminution of benefits
Both parties, Filipro and UFE agreed to refer the case to Voluntary Arbitration. found in Article 100 of the Labor Code.
a. To maintain the same daily rate if the divisor is adjusted to 261 days, then the
The voluntary arbitrator ruled that the sales personnel are unsupervised and are thus field dividend, which represents the employee's annual salary, should correspondingly
personnel who are not entitled to holiday pay. The voluntary arbiter also ruled that that the other be increased to incorporate the holiday pay.
employees entitled to holiday pay should reimburse the overpayment of holiday pay and changed i. To illustrate, if prior to the grant of holiday pay, the employee's annual
the divisor from 251 to 261. Lastly, the voluntary arbitrator held that the reckoning point for the salary is P25,100, then dividing such figure by 251 days, his daily rate is
payment of the holiday pay was from the effectivity of the Labor Code. P100.00 After the payment of 10 days' holiday pay, his annual salary
already includes holiday pay and totals P26,100 (P25,100 + 1,000).
UFE appealed, stating that there are supervisors for the sales personnel. Furthermore, UFE argued ii. Dividing this by 261 days, the daily rate is still P100.00. There is thus no
that the employees should not be required to reimburse the alleged overpayment of holiday pay merit in respondent Nestle's claim of overpayment of overtime and night
since there is no change in the salary even if the divisor is increased to 261. differential pay and sick and vacation leave benefits, the computation of
which are all based on the daily rate, since the daily rate is still the same
Filipro on the other hand appealed the effectivity of the holiday pay to retroact to the effectivity of before and after the grant of holiday pay.
the Labor Code. Filipro alleges that it should be from the pronouncement of the SC in the case of b. Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to
Chartered Bank Employees v. Ople or in 1985, and not 1974. its use of 251 days as divisor must fail in light of the Labor Code mandate that
"all doubts in the implementation and interpretation of this Code, including its
Issue/Held: implementing rules and regulations, shall be resolved in favor of labor." (Article
4).
1) WoN the sales personnel are entitled to holiday pay? NO i. Moreover, prior to September 1, 1980, when the company was on a 6-
2) WoN the employees should reimburse overpayment of holiday pay? NO day working schedule, the divisor used by the company was 303,
3) WoN the reckoning point of the holiday pay is in 1985? YES indicating that the 10 holidays were likewise not paid.
When Filipro shifted to a 5-day working schedule on September 1, 1980, it had the chance
Ratio: to rectify its error, if ever there was one but did not do so. It is now too late to allege payment by
mistake.
1) The requirement for the salesmen and other similarly situated employees to report for
work at the office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is not within the realm of 27. INSULAR HOTEL EMPLOYEES UNION V. WATERFRONT HOTEL DAVAO (2010)
work in the field as defined in the Code but an exercise of purely management
prerogative of providing administrative control over such personnel. Facts:
a. This does not in any manner provide a reasonable level of determination on the
actual field work of the employees which can be reasonably ascertained. The - Nov 2000: the Hotel sent DOLE a Notice of Suspension of Operations for 6 months due to severe
theoretical analysis that salesmen and other similarly-situated workers regularly and serious business losses. - During the suspension, Rojas, Pres. of Davao insular Hotel Free
report for work at 8:00 a.m. and return to their home station at 4:00 or 4:30 Employees Union (DIHFEU-NFL) the recognized labor org in the Hotel, sent the Hotel several
p.m., creating the assumption that their field work is supervised, is surface letters asking it to reconsider its decision. The Union members wanted to keep their jobs and to
projection. help the Hotel, so it suggested several ideas in its Manifesto to solve the high cost on payroll, such

21
as: downsize manpower structure to 100 rank-and-file EEs, a new pay scale, etc. - DIHFEU-NFL - The case was remanded to the NCMB. The Hotel reiterated to the NCMB that the individual union
signed a MOA where the Hotel agreed to re-open the hotel. The retained EEs individually members have no standing. The Hotel did not appear before the NCMB to select a new AVA. The
signed a ―reconfirmation of Employment.‖ In June 2001, the Hotel resumed its business new AVA decided in favor of Cullo, declaring the MOA invalid.
operations.
- The Hotel appealed to the CA, questioning among others the jurisdiction of the NCMB. The CA
- Aug 2002: Darius Joves and Debbie Planas, local officers of the National Federation of Labor ruled in favor of the Hotel, declaring the MOA VALID and ENFORCEABLE.
(NFL), filed a Notice of Mediation before the NCMB, stating that the Union involved was "DARIUS
JOVES/DEBBIE PLANAS ET. AL, National Federation of Labor." The issue was the diminution of Issues:
wages and benefits through unlawful MOA. In support of his authority to file the complaint, Joves, 1. Did CA err in finding that the AVA has no jurisdiction over the case because the notice of
assisted by Atty. Cullo, presented several SPAs which were, undated and unnotarized. - Petitioner mediation does not mention the name of the local union but only the affiliate federation -- NO.
and respondent signed a Submission Agreement, where the union stated was "INSULAR HOTEL 2. Do the individual members of the Union have the requisite standing to question the MOA before
EMPLOYEES UNION-NFL." the NCMB? -- NO.
3. If the individual members of the Union have no authority to file the case, does the federation to
- The Hotel filed with the NCMB a Manifestation with Motion for a Second Preliminary Conference, which the local union is affiliated have the standing to do so? -- NO.
alleging that the persons who filed the complaint in the name of the Insular Hotel Employees 4. (moot issue) W/N IHEU-NFL is a non-entity as DIHEU-NFL is the only recognized bargaining unit
Union-NFL have no authority to represent the Union. -- YES, but Hotel is estopped from questioning the same as it did not raise the said issue in the
proceedings before the NCMB and the Voluntary Arbitrators.
- Cullo confirmed that the case was filed not by the IHEU-NFL but by the NFL. When asked to
present his authority from NFL, Cullo admitted that the case was filed by individual employees Ratio: 1. In the Notice of Mediation filed before the NCMB, it stated that the union involved was
named in the SPAs. "DARIUS JOVES/DEBBIE PLANAS ET. AL., National Federation of Labor." In the Submission
Agreement, however, it stated that the union involved was "INSULAR HOTEL EMPLOYEES UNION-
- The Hotel argued that the persons who signed the complaint were not the authorized NFL." Cullo clarified in subsequent documents captioned as "National Federation of Labor and 79
representatives of the Union indicated in the Submission Agreement nor were they parties to the Individual Employees, Union Members, Complainants" that the individual complainants are not
MOA. It filed a Motion to Withdraw, which Cullo then filed an Opposition to where the same was representing the union, but filing the complaint through their appointed attorneys-in-fact. - While it
captioned: NATIONAL FEDERATION OF LABOR And 79 Individual Employees, Union Members, is undisputed that a submission agreement was signed by respondent and "IHEU-NFL," then
Complainants, -versus- Waterfront Insular Hotel Davao, Respondent. Cullo reiterated that the represented by Joves and Cullo, this Court finds that there are two circumstances which affect its
complainants were not representing IHEU-NFL. validity: first, the Notice of Mediation was filed by a party who had no authority to do so; second,
- The Accredited Voluntary Arbitrator (AVA) denied the Motion to Withdraw. that the Hotel had persistently questioned the authority of Joves, Cullo and the individual members
- The Hotel submitted its MR and stressed that the Submission Agreement was void because the of the Union to file the complaint before the NCMB. - Procedurally, the first step to submit a case
Union did not consent thereto. for mediation is to file a notice of preventive mediation with the NCMB. It is only after this step
- Cullo filed a Comment/Opposition to the Hotel's MR. Again, Cullo admitted that the case was not that a submission agreement may be entered into by the parties concerned. Section 3, Rule IV of
initiated by the IHEU-NFL, saying that the individual complainants are not representing the union the NCMB Manual of Procedure provides who may file a notice of preventive mediation, to wit: Any
but filing the complaint through their appointed attorneys-in-fact to assert their individual rights as certified or duly recognized bargaining representative may file a notice
workers who are entitled to the benefits granted by law and stipulated in the collective bargaining …
agreement. There is no mention there of Insular Hotel Employees Union, but only National or request for preventive mediation... In the absence of a certified or duly recognized bargaining
Federation of Labor (NFL). The local union was not included as party-complainant considering that representative, any legitimate labor organization in the establishment may file a notice, request
it was a party to the assailed MOA. preventive mediation or declare a strike, but only on grounds of unfair labor practice. - It is clear
- The AVA denied the MR. He, however, ruled that the Hotel was correct when it objected to NFL that only a certified or duly recognized bargaining agent may file a notice or request for preventive
as proper party-complainant, as the proper one is INSULAR HOTEL EMPLOYEES UNION-NFL. In mediation. It is curious that even Cullo himself admitted that the case was filed not by the Union
the submission agreement, the party complainant written is INSULAR HOTEL EMPLOYEES UNION- but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain
NFL and not the NATIONAL FEDERATION OF LABOR and 79 other members. However, since the the notice filed before it. - Even though the Hotel signed a Submission Agreement, it had
NFL is the mother federation of the local union, and signatory to the existing CBA, it can represent immediately manifested its desire to withdraw from the proceedings after it became apparent that
the union. the Union had no part in the complaint. Only 4 days had lapsed after the signing of the Submission
- Cullo, in subsequent documents, started using the caption "Insular Hotel Employees Union-NFL, Agreement when the Hotel called the attention of the AVA that the persons who filed the instant
Complainant." complaint in the name of Insular Hotel Employees Union-NFL had no authority to represent the
Union. The Hotel cannot be estopped in raising the jurisdictional issue, because it is basic that the

22
issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost ISSUE: Whether or not there was an alteration of the employment contract as this is proscribed
by waiver or by estoppel. by the Labor Code.

2. Petitioners have not been duly authorized to represent the union. In HELD: No. Article 34 paragraph (i) of the Labor Code reads:
Atlas Farms v. NLRC
: x x x Pursuant to Art 260, the parties to a CBA shall name or designate their respective Prohibited Practices. — It shall be unlawful for any individual, entity, licensee, or holder of
representatives to the grievance machinery and if the grievance is unsettled in that level, it shall authority:
automatically be referred to the voluntary arbitrators designated in advance by parties to a CBA. -
The CBA recognizes that DIHFEU-NFL is the exclusive bargaining representative of all permanent x xxx
employees. The inclusion of the word "NFL" after the name of the local union merely stresses that
the local union is NFL's affiliate. It does not, however, mean that the local union cannot stand on (i) To substitute or alter employment contracts approved and verified by the Department of Labor
its own. The local union owes its creation and continued existence to the will of its members and from the time of actual signing thereof by the parties up to and including the period of expiration
not to the federation to which it belongs. of the same without the approval of the Department of Labor.
3.Coastal Subic Bay Terminal v. DOLE
A careful examination of the records shows that there is in fact no alteration made in the
: x x x A local union does not owe its existence to the federation with which it is affiliated. It is a
Crew Agreement or in the Exit Pass. As the original data appear, the figures US$800.00 fall under
separate and distinct voluntary association owing its creation to the will of its members. Mere
the column salary, while the word "inclusive" is indicated under the column overtime rate. With the
affiliation does not divest the local union of its own personality, neither does it give the mother
supposed alterations, the figures US$560.00 were handwritten above the figures US$800.00 while
federation the license to act independently of the local union. It only gives rise to a contract of
the figures US$240.00 were also written above the word "inclusive".
agency, where the former acts in representation of the latter. Hence, local unions are considered
principals while the federation is deemed to be merely their agent. x x x - The NFL had no As clearly explained by respondent NLRC, the correction was made only to specify the
authority to file the complaint in behalf of the individual employees. salary and the overtime pay to which petitioner is entitled under the contract. It was a mere
4. In its Memorandum, the Hotel contends that IHEU-NFL is a non-entity. While DOLE states that breakdown of the total amount into US$560.00 as basic wage and US$240.00 as overtime pay.
"IHEU-NFL" is not a registered labor organization, the Hotel is estopped from questioning the same Otherwise stated, with or without the amendments the total emolument that petitioner would
as it did not raise the said issue in the proceedings before the NCMB and the Voluntary Arbitrators. receive under the agreement as approved by the POEA is US$800.00 monthly with wage
The main theory posed by the Hotel was W/N the individual employees had the authority to file differentials or overtime pay included.
the complaint notwithstanding the apparent non-participation of the union. It never put in issue
the fact that DIHFEU-NFL was not the same as IHEU-NFL. Dispositive: CA AFFIRMED. It is axiomatic that laws should be given a reasonable interpretation, not one which
defeats the very purpose for which they were passed. This Court has in many cases involving the
28 Norberto Soriano, VS Offshore Shipping And Manning Corporation, Knut Knutsen construction of statutes always cautioned against narrowly interpreting a statute as to defeat the
O.A.S., And National Labor Relations Commission (Second Division); G.R. No. 78409; purpose of the legislator and stressed that it is of the essence of judicial duty to construe statutes
September 14, 1989 so as to avoid such a deplorable result (of injustice or absurdity) and that therefore "a literal
interpretation is to be rejected if it would be unjust or lead to absurd results.
TOPIC: Construction in favor of labor ( Article 4, Labor Code)
Under similar circumstances, this Court ruled that as a general proposition, exceptions
FACTS: Soriano was hired by respondent as a third marine engineer. He alleged that his salary on from the coverage of a statute are strictly construed. But such construction nevertheless must be
their agreement was US$800.00. His term of employment was extended with the promise of the at all times reasonable, sensible and fair. Hence, to rule out from the exemption amendments set
employer that he will be promoted to second marine engineer. He signed off with the employer forth, although they did not materially change the terms and conditions of the original letter of
because the promise to promote was not fulfilled and for the unilateral decision to reduce credit, was held to be unreasonable and unjust, and not in accord with the declared purpose of the
petitioner's basic salary from US$800.00 to US$560.00. Margin Law.
He complained with the POEA. However, it ruled against him because the total monthly The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection of both
emolument is US$800.00 INCLUSIVE of fixed overtime as shown and proved in the Wage Scale parties. In the instant case, the alleged amendment served to clarify what was agreed upon by the
submitted to the Accreditation Department of its Office which would therefore not entitle petitioner parties and approved by the Department of Labor. To rule otherwise would go beyond the bounds
to any salary differential; thus, although there were alterations, it was made in conformity with the of reason and justice
Wage Scale duly approved by the POEA, there is no truth to the substitution of the contract. NLRC
affirmed the decision on appeal.

23
29. THE HONGKONG AND SHANGHAI BANKING CORPORATION VS. NLRC The arbiter declared the termination illegal and ordered petitioner bank to reinstate private
G.R. NO. 116542 July 30, 1996 respondent to his former position without loss of seniority rights and with backwages.On appeal,
the respondent Commission sustained the arbiters findings.
FACTS: Complainant is a regular rank and file employee of Hongkong and Shanghai Banking Corp.
Ltd. He started working with the said bank in July 1986 as a clerk until his dismissal on February ISSUE: Whether the NLRC committed grave abuse of discretion in ruling that private respondents
1993. act of making a false statement did not constitute such dishonesty as would warrant his
termination from service.
It appears that on February 1993, complainant called the bank to inform the latter that he had an
upset stomach and would not be able to report for work. His superior, however, requested him to HELD: While the act of employee makes any form of dishonesty is a serious offense calling for
report for work because the department he was then in was undermanned but complainant termination, such general statement must however be understood in the context of the
insisted that it was impossible for him to report for work, hence, he was allowed to go on sick enumeration of offenses, all of which are directly related to the function of the petitioner as a
leave on that day. banking institution. It is unarguable that private respondents false information concerning his
whereabouts on February 3, 1993 is not a fraud, nor a false entry in the books of the bank;
Later on that day, the bank called complainant at his given Tel. No. in order to obtain vital neither is it a failure to turn over clients funds, or theft or use of company assets, or anything
information from him, but the bank was informed by the answering party at the phone number analogous as to constitute a serious offense meriting the extreme penalty of dismissal.
given by complainant that complainant had left early that morning.
To be lawful, the cause for termination must be a serious and grave malfeasance to justify
When complainant reported for work the following day, he was asked by his superior to explain the deprivation of a means of livelihood. This is merely in keeping with the spirit of our
why he was not at his residence when he was on sick leave because of an upset stomach. Constitution and laws which lean over backwards in favor of the working class, and mandate that
every doubt must be resolved in their favor
Complainant explained that he indeed suffered from an upset stomach and that he even consulted
Dr. Arthur Logos of the same day and the reason why he could not be reached by telephone was
30. Colgate Palmolive Philippines Inc. vs Ople (GR No. 76381; June 30, 1988)
because he had not been staying at his given residence for over a week.
Topic: Construction in favor of labor
The bank called up Dr. Logos to verify the truth of complainants statement but the doctor denied
that he examined or attended to complainant. For this reason, the bank directed complainant to Facts: On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor
explain his acts of dishonesty because allegedly he was not honest in telling the bank that he had Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain,
an upset stomach, and that he consulted Dr. Logos on that day. dismissal of union officers/members; and coercing employees to retract their membership with the
union and restraining non-union members from joining the union.
In his written statement, complainant insisted that he had diarrhea on February 3, 1993 and After efforts at amicable settlement proved unavailing, the Office of the MOLE, upon
attached a certification from his aunt where he stayed from the evening of February 2, 1993 and petition of petitioner assumed jurisdiction over the dispute pursuant to Article 264 (g) of the Labor
the whole day of February 3, 1993 as well as a certification from his uncle named Andre R. Lozano Code.
attesting to the conversation between complainant and Melvin Morales regarding the whereabouts
of complainant on that day. Complainant further admitted that his statement about his not staying On August 9,1985, respondent Minister rendered a decision which:
at his house for one week and his consulting a doctor was incorrect, but that the said statement
was not given with malicious intention or deceit or meant to commit fraud against the bank, its (a) found no merit in the Union's Complaint for unfair labor practice allegedly committed
operations, customers and employees. The said statement according to him was impulsive reaction by petitioner as regards the alleged refusal of petitioner to negotiate with the Union, and the
as a result of his emotional stress he had been going through because of his marital problems. He secret distribution of survey sheets allegedly intended to discourage unionism,
pleaded for leniency such that instead of termination, he be given a lighter penalty. (b) found the three salesmen, PeregrinoSayson, Salvador Reynante& Cornelio Mejia "not
without fault" and that "the company has grounds to dismiss above named salesmen"
However, the bank came out with a memorandum from the Vice-President, Human Resources
Department terminating his services pursuant to Article 13, Section VI of the Collective Bargaining and at the same time respondent Minister directly certified the respondent Union as the
Agreement between the union of the rank and file employees of the bank and the company and collective bargaining agent for the sales force in petitioner company and ordered the reinstatement
the banks Code of Conduct. of the three salesmen to the company on the ground that the employees were first offenders.

24
 promulgated on May 25, 2004,13 thereby effectively confirming the validityof the petitioner‘s
dismissal.
Isssue: Whether or not respondent Minister committed a grave abuse of discretion when he
directly certified the Union solely on the basis of the latter's self-serving assertion that it enjoys the ISSUE: Whether or not CA erred in the appreciation of theevidence surrounding petitioner‘s
support of the majority of the sales force in petitioner's company? termination from employment.

Held: We find the petition meritorious.

Held: Yes. The requirements under the law, specifically Secs. 2, 5, and 6 of Rule V, Book V, of The cited grounds are at best doubtful under the proven surrounding circumstances, and
the Rules Implementing the Labor Code are all calculated to ensure that the certified bargaining should have beeninterpreted in the petitioner‘s favor pursuant to Article 4 of the Labor Code.
representative is the true choice of the employees against all contenders. The Constitutional
mandate that the State shall "assure the rights of the workers to self-organization, collective The timing of the filing of charges was, as the petitioner pointed out, unusual. Indeed, if
bargaining, security of tenure and just and humane conditions of work," should be achieved under theproposal to solicit commissions had transpired in December, the charges were quite late
a system of law such as the aforementioned provisions of the pertinent statutes. When an whenthey came in May. Interestingly, it was in April 1996 that the petitioner questioned the
overzealous official by-passes the law on the pretext of retaining a laudable objective, the soundnessof respondent Quiogue‘s decision to award the fabrication and installation of six (6)
intendment or purpose of the law will lose its meaning as the law itself is disregarded. When units of fire escape to Samarita Enterprises without observing company procedure of requiring at
respondent Minister directly certified the Union, he in fact disregarded this procedure and its legal least threequotations from suppliers and contractors. The petitioner reprimanded air-con
requirements. There was therefore failure to determine with legal certainty whether the Union maintenanceman Balais sometime in the first week of May 1996 for unnecessary overtime work
indeed enjoyed majority representation. and the twohad a verbal altercation, an incident that the petitioner reported to Quiogue. On May
9, 1996,petitioner also had an altercation with Niguidula, the company‘s Purchasing Manager,
whoverbally assaulted, slandered, and challenged him to a fight, another incident which he
likewise reported to Quiogue and to the Makati Police. All these strangely coincided with the time
31. De Castro vs. Liberty Broadcasting; G.R. No. 165153; September 23, 2008 thecharges were filed. The respondents never successfully accounted for the coincidences.
TOPIC: Preliminary Title I. General Provisions (Chapter 1 Articles 1-6 LC) B. Construction in All these considerations, to our mind, render the cited causes for the petitioner‘s dismissal
favor of labor (Article 4 LC) tenuous as the evidence supporting these grounds come from highly suspectsources: they come
FACTS: The petitioner commenced his employment with respondent Liberty Broadcasting either from people who harbor resentment against the petitioner;those whose positions have
Network, Inc. as Building Administrator on August 7, 1995. On May 16, 1996, the respondent inherent conflict points with that of the petitioner; or frompeople with business dealings with the
company sent a notice to the petitioner requiring him to explain withinforty-eight (48) hours why company.
he should not be made liable for violation of the CompanyCode of Conduct for acts constituting The evidentiary situation, at the very least, brings to the fore the dictum we stated in Prangan v.
serious misconduct, fraud and willful breach of thetrust reposed in him as a managerial employee. NLRC and in Nicario v. NLRC that "if doubts exist between the evidencepresented by the employer
In his answer, the petitioner denied the allegations against him. A hearing thereafter was and the employee, the scales of justice must be tilted in favorof the latter. It is a time-honored
scheduled per his request. Meanwhile, criminal cases forestafa and qualified theft had been filed rule in controversies between a laborer and his master, doubts reasonably arising from the
against him. Due to this, the petitioner opted not to attend the scheduled hearing. evidence, or in the interpretation of agreements andwriting should be resolved in the former‘s
favor."
On May 31, 1996, the respondent company issued a Notice of Dismissal to the petitioner
based on eight grounds relating to his charge. The petitioner filed a complaint for illegal dismissal
against the respondents with the National Labor Relations Commission (NLRC) Arbitration Branch 32. MANOLO A. PEFLOR, Petitioner, v. OUTDOOR CLOTHING MANUFACTURING
in the National Capital Region. At the arbitration, he denied committing the offenses charged. CORPORATION, NATHANIEL T. SYFU, President, MEDYLENE M. DEMOGENA, Finance
Manager, and PAUL U. LEE, Chairman, Respondents; G.R. No. 177114: January 21,
The Labor Arbiterrendered a Decision in the petitioner‘s favor, holding the respondent 2010
company liable for illegal dismissal. disbelieved the affidavits of Niguidula, Balais, Pacaldo,
Samarita, and Aying in view of the circumstancesprior to their execution.On appeal, the NLRC FACTS: Peflor was hired on September 2, 1999 as probationary Human Resource Department
reversed the Labor Arbiter‘s decision. (HRD) Manager of respondent Outdoor Clothing Manufacturing Corporation. Peflor claimed that his
relationship with Outdoor Clothing went well during the first few months of his employment. His
The NLRC turned down the motion for reconsideration that the respondent company woes began when the company's Vice President for Operations, Edgar Lee (Lee), left the company
subsequently filed. The respondent company thus elevated the case to the CA via a petition for after a big fight between Lee and Chief Corporate Officer Nathaniel Syfu (Syfu). Because of his
certiorari under Rule 65 of the Rules of Court. The CA granted the petition inits Decision
25
close association with Lee, Peflor claimed that he was among those who bore Syfus ire. hostile working environment. On the other hand, if the resignation letter was submitted after the
appointment of Buenaobra, then factual basis exists indicating that Peflor had been constructively
When Outdoor Clothing began undertaking its alleged downsizing program due to negative dismissed as his resignation was a response to the unacceptable appointment of another person to
business returns, Peflor alleged that his department had been singled out. Peflors two staff a position he still occupied.
members were dismissed on the pretext of retrenchment. He worked as a one-man department,
carrying out all clerical, administrative and liaison work; he personally went to various government The question of when Peflor submitted his resignation letter arises because this letter undisputably
offices to process the company's papers. made was undated. Several reasons arising directly from these pieces of evidence lead us to
conclude that Peflor did indeed submit his resignation letter on March, 15, 2000, i.e., on the same
When an Outdoor Clothing employee, Lynn Padilla (Padilla), suffered injuries in a bombing day that it was submitted.
incident, the company required Peflor to attend to her hospitalization needs; he had to work First, we regard the Syfu memorandum of March 1, 2000 and the memorandum of Buenaobra of
outside office premises to undertake this task. As he was acting on the company's orders, Peflor March 3, 2000 accepting the position of HRD Head to be highly suspect. In our view, these
considered himself to be on official business, but was surprised when the company deducted six memoranda, while dated, do not constitute conclusive evidence of their dates of preparation and
days salary corresponding to the time he assisted Padilla. communication. Surprisingly, Peflor was never informed about these memoranda when they
directly concerned him, particularly the turnover of responsibilities to Buenaobra if indeed Peflor
After Peflor returned from his field work on March 13, 2000, his officemates informed him that had resigned on March 1, 2000 and a smooth turnover to Buenaobra was intended.
while he was away, Syfu had appointed Nathaniel Buenaobra (Buenaobra) as the new HRD
Second,we find it surprising that these pieces of evidence pointing to a March 1, 2000 resignation
Manager. Peflor was surprised by the news; he also felt betrayed and discouraged. He tried to talk
specifically, Syfus March 1, 2000 memorandum to Buenaobra about Penaflors resignation and
to Syfu to clarify the matter, but was unable to do so. Peflor claimed that under these
Buenaobra's own acknowledgment and acceptance were only presented to the NLRC on appeal,
circumstances, he had no option but to resign. He submitted a letter to Syfu declaring his
not before the labor arbiter. The matter was not even mentioned in the company's position paper
irrevocable resignation from his employment with Outdoor Clothing effective at the close of office
filed with the labor arbiter.
hours on March 15, 2000.
Third, the circumstances and other evidence surrounding Peflor's resignation support his claim that
Peflor then filed a complaint for illegal dismissal with the labor arbiter, claiming that he had been he was practically compelled to resign from the company.
constructively dismissed. He included in his complaint a prayer for reinstatement and payment of Other than its bare claim that it was facing severe financial problems, Outdoor Clothing never
backwages, illegally deducted salaries, damages, attorneys fees, and other monetary claims. presented any evidence to prove both the reasons for its alleged downsizing and the fact of such
downsizing. No evidence was ever offered to rebut Peflor's claim that his staff members were
The labor arbiter found that Peflor had been illegally dismissed. The NLRC apparently found dismissed to make his life as HRD Head difficult. To be sure, Peflor's participation in the
Outdoor Clothings submitted memoranda sufficient to overturn the labor arbiters decision. It termination of his staff members employment cannot be used against him, as the termination of
characterized Peflor's resignation as a response, not to the allegedly degrading and hostile employment was a management decision that Peflor, at his level, could not have effectively
treatment that he was subjected to by Syfu, but to Outdoor Clothings downward financial spiral. contested without putting his own job on the line.
Peflor anchored his certiorari petition with the CA on the claim that the NLRC decision was tainted
with grave abuse of discretion but the CA affirmed the NLRC decision. Upon denial of his motion The first is the settled rule that in employee termination disputes, the employer bears the burden
for reconsideration, Penaflor filed the present petition for review. of proving that the employees dismissal was for just and valid cause. That Peflor did indeed file a
letter of resignation does not help the company's case as, other than the fact of resignation, the
ISSUE: Whether or not petitioner was constructively dismissed. company must still prove that the employee voluntarily resigned. There can be no valid resignation
where the act was made under compulsion or under circumstances approximating compulsion,
HELD: Yes. CA Decision reversed and set aside such as when an employees act of handing in his resignation was a reaction to circumstances
leaving him no alternative but to resign.In sum, the evidence does not support the existence of
There can be no valid resignation where the act was made under compulsion or under voluntariness in Peflors resignation.
circumstances approximating compulsion, such as when an employee's act of handing in his
resignation was a reaction to circumstances leaving him no alternative but to resign 33. FEM’S ELEGANCE LODGING HOUSE VS THE HONORABLE LEO N.P. MURILLO
Petitioner filed a Motion to Dismiss for failure of private respondents to file their position
A critical fact necessary in resolving this issue is whether Peflor filed his letter of resignation before paper within the agreed period and also filed a Motion to Expunge private respondents‘ position
or after the appointment of Buenaobra as the new/concurrent HRD manager. If the resignation paper from the records of the case.
letter was submitted before Syfus appointment of Buenaobra as new HRD manager, little support
exists for Peflors allegation that he had been forced to resign due to the prevailing abusive and

26
 The Labor Arbiter denied the motions filled by petitioners. He held that the fifteen-day Held: Yes. From the foregoing facts of record, it is clear that Marcelino N. Villavert died of acute
delay in filing the position paper was not unreasonable considering that the substantive rights of hemorrhagic pancreatitis which was directly caused or at least aggravated by the duties he
litigants should not be sacrificed by technicality. He cited Art. 4 of the Labor Code, which provides performed as coder verifier, computer operator and clerk typist of the Philippine Constabulary.
that all doubts in the interpretation thereof shall be resolved in favor of labor. He said that even There is no evidence at all that Marcelino N. Villavert had a "bout of alcoholic intoxication" shortly
under Sec. 15, Rule 5 of the Revised Rules of Court, a delay in the filing of a position paper is not before he died. Neither is there a showing that he used drugs.
a ground for a Motion to Dismiss under the principle of exclusion unius est excludio alterius.
It should be noted that Article 4 of the Labor Code of the Philippines, as amended, provides that
Issue: Whether or not the Labor Arbiter‘s acceptance of the position paper beyond the "All doubts in the implementation and interpretation of this Code, including its implementing rules
reglementary period constitutes grave abuse of discretion. and regulations shall be resolved in favor of labor."

Held: No, it is not constitutive of grave abuse of discretion. It is a well-settled rule that technical 35.Jimenez vs EEC; G.R. no. 58176; March 23, 1984
rules of procedure are not binding in labor cases, for procedural lapses may be disregarded in the
interest of substantial justice, particularly where labor matter are concerned. Petitioner is the widow of the late Alfredo Jimenez, who joined the government service in June,
1969 as a constable in the Philippine Constabulary. Sometime in April, 1976, he and his wife
The failure to submit a position paper on time is not one of the ground for the dismissal of boarded a bus from Tuguegarao, Cagayan, to Anulung, Cagayan. While on their way, Sgt.
a complaint in labor cases. It cannot therefore be invoked by petitioners to declare private Jimenez, who was seated on the left side of the bus, fell down from the bus because of the
respondents as non-suited. This stances is in accord with Art.4 of the Labor Code, which resolves sudden stop of the vehicle. As a result, he was confined at the Cagayan Provincial Hospital for
all doubts in the interpretation of the law and its implementing rules and regulations shall be about one (1) week, and thereafter, released. He was again confined for further treatment from
construed in favor of labor. Needless to state, our jurisprudence is rich with decisions adhering to November 7, 1978 to May 16, 1979 at the AFP Medical Center in Quezon City.
the State‘s basic policy of extending protection to labor where conflicting interests between labor
and management exist. On November 7, 1978, the deceased was again confined at the Cagayan Provincial Hospital and
then transferred to the AFP V. Luna Medical Center at Quezon City for further treatment. He
complained of off-and-on back pains, associated with occasional cough and also the swelling of the
right forearm. The doctors found a mass growth on his right forearm, which grew to the size of 3
34. Villa Vert vs. ECC and GSIS; GR No. L-48605; December 14, 1981 by 2 inches, hard and associated with pain, which the doctors diagnosed as "aortic aneurysm,
Topic: Construction in Favor of Labor medrastinal tumor"

Facts: Marcelino was employed as a Code Verifier in the Philippine Constabulary. Her mother filed His condition improved somewhat after treatment and he was released on May 16, 1979. He was
a claim for income benefits for the death of her son under P.D. No. 626. The said claim was advised to have complete rest and to continue medication. He was then given light duty inside the
denied. barracks of their company.Unfortunately, his ailment continued and became more serious.

He performed his duties not only as code verifier but also handled administrative functions, On May 12, 1980, he died in his house at Anulung, Cagayan, at about 9:00 o‘clock in the evening.
computer operation and typing jobs due to shortage of civilian personnel. Although he was He was barely 35 years old at the time of his death.The cause of death, as found by the doctors, is
complaining of chest pain and headache, after a whole day of strenuous activities, Marcelino was "bronchogenic carcinoma" which is a malignant tumor of the lungs.
still required to render overtime service until late in the evening of the same day, typing
voluminous classified communications, computing allowances and preparing checks for the salary On June 6, 1980, an administrative hearing was conducted before the PC Regional Board. It was
of Philippine Constabulary and Integrated National Police personnel throughout the country for their official findings that the subject enlisted man "died in line of duty" ; that the deceased was a
distribution. He went home late at night and due to fatigue, he went to bed as soon as he arrived PC member of the 111th PC Company at Tuguegarao, Cagayan; that he died due to "bronchogenic
without taking his meal. Shortly thereafter, Marcelino was noticed by his mother, gasping for CA" ; and that he "died not as a result of his misconduct and did not violate any provisions of the
breath, perspiring profusely, and mumbling incoherent words. The petitioner tried to wake him up Articles of War" (ECC rec., Proceedings of the PC Regional Board, June 6, 1980).
and after all efforts to bring him to his senses proved futile, she rushed Marcelino to the UE
Ramon Magsaysay Memorial Hospital where he was pronounced dead. The Board recommended "that all benefits due to or become due subject EP be paid and settled to
his legal heirs"
Government Service Insurance System and the Employees' Compensation Commission denied the
claim for compensation. Nevertheless, petitioner filed a claim for death benefits under PD No. 626, as amended with the
respondent GSIS. Said claim was denied by the GSIS on the ground that her husband‘s death is
Issue: WON Marcelino must be awarded compensation given the doubt in the cause of the not compensable "for the reason that the injury/sickness that caused his death is not due to the
subject disease?

27
circumstances of the employment or in the performance of the duties and responsibilities of said of evidence are not applicable. A reasonable work-connection is all that is required or that the risk
employment" of contracting the disease is increased by the working conditions."c

Issue: Whether or not the death of the deceased was entitled with the benefits under PD no. 36. Philippine Association of Service Exporters, Inc. v. Torres; G.R. No. 101279; August 6, 1992
626?
Topic: Rules and Regulations; Rule Making Authority/Rule Making Power to Promulgate
Held: Yes. To establish compensability under the said theory, the claimant must show proof of Implementing Rules and Regulations
work-connection. Impliedly, the degree of proof required is merely substantial evidence, which
means ‗such relevant evidence to support a decision‘ (Ang Tibay v. The Court of Industrial Facts: Philippine Association of Service Exporters (PASEI, for short), is the largest national
Relations and National Labor Union, Inc., 69 Phil. 635) or clear and convincing evidence. In this organization of private employment and recruitment agencies duly licensed and authorized by the
connection, it must be pointed out that the strict rules of evidence are not applicable in claims for POEA, to engaged in the business of obtaining overseas employment for Filipino landbased
compensation. Respondents however insist on evidence which would establish direct causal workers, including domestic helpers.
relation between the disease rectal cancer and the employment of the deceased. Such a strict
requirement which even medical experts cannot support considering the uncertainty of the nature On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino
of the disease would negate the principle of the liberality in the matter of evidence, Apparently, housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order
what the law merely requires is a reasonable work-connection and not a direct causal relation. This No. 16, Series of 1991, temporarily suspending the recruitment by private employment agencies of
kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the "Filipino domestic helpers going to Hong Kong‖.
law as embodied in Article 4 of the new Labor Code which states that ‗all doubts in the
implementation of the provisions of this Code, including its implementing rules and regulations Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30,
shall be resolved in favor of labor. Series of 1991, dated July 10, 1991, providing GUIDELINES on the Government processing and
As the agents charged by the law to implement the social justice guarantee secured by both 1935 deployment of Filipino domestic helpers to Hong Kong and the accreditation of Hong Kong
and 1973 Constitutions, respondents should adopt a more liberal attitude in deciding claims for recruitment agencies intending to hire Filipino domestic helpers.
compensation especially when there is some basis in the facts inferring a work-connection. This
should not be confused with the presumption of compensability and theory of aggravation under On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37,
the Workmen‘s Compensation Act. While these doctrines may have been abandoned under the Series of 1991, on the processing of employment contracts of domestic workers for Hong Kong. All
New Labor Code (the constitutionality of such abrogation may still be challenged, it is significant Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit under the new scheme
that the liberality of the law, in general, still subsists. which requires prior accreditation which the POEA.

The sweeping conclusion of the respondent Employees Compensation Commission to the effect On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the
that the cause of the bronchogenic carcinoma of the deceased was due to his being a smoker and aforementioned DOLE and POEA circulars and to prohibit their implementation.
not in any manner connected with his work as a soldier, is not in accordance with medical
authorities nor with the facts on record. No certitude can arise from a position of uncertainty. Issue: Whether or not the respondents acted with grave abuse of discretion and/or in excess of
their rule-making authority in issuing said circulars?
WE are dealing with possibilities and medical authorities have given credence to the stand of the
petitioner that her husband developed bronchogenic carcinoma while working as a soldier with the Held: No. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and
Philippine Constabulary. The records show that when the deceased enlisted with the Philippine regulate recruitment and placement activities. On the other hand, the scope of the regulatory
Constabulary in 1969, he was found to be physically and mentally healthy. A soldier‘s life is a hard authority of the POEA, which was created by Executive Order No. 797 on May 1, 1982 to take over
one. As a soldier assigned to field duty, exposure to the elements, dust and dirt, fatigue and lack the functions of the Overseas Employment Development Board, the National Seamen Board, and
of sleep and rest is a common occurrence. Exposure to chemicals while handling ammunition and the overseas employment functions of the Bureau of Employment Services, is broad and far-
firearms cannot be discounted. WE take note also of the fact that he became the security of one ranging.
Dr. Emilio Cordero of Anulung, Cagayan, and he always accompanied the doctor wherever the
latter went (p. 26, rec.). Such assignment invariably involved irregular working hours, exposure to The assailed circulars do not prohibit the petitioner from engaging in the recruitment and
different working conditions, and body fatigue, not to mention psychological stress and other deployment of Filipino land based workers for overseas employment. A careful reading of the
similar factors which influenced the evolution of his ailment. We held in the case of San Valentin challenged administrative issuances discloses that the same fall within the "administrative and
v. Employees Compensation Commission (118 SCRA 160) that: "In compensation cases. strict rules policing powers expressly or by necessary implication conferred" upon the respondents.

28
 Nevertheless, they are legally invalid, defective and unenforceable for lack of power expanding the statutory requirements or to embrace matters not covered by the statute. Rules
publication and filing in the Office of the National Administrative Register as required in Article 2 of that subvert the statute cannot be sanctioned.
the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the
Administrative Code of 1987. The administrative circulars in question may not be enforced and The rule or regulation should be within the scope of the statutory authority granted by the
implemented. legislature to the administrative agency. In case of discrepancy between the basic law and a rule
or regulation issued to implement said law, the basic law prevails because said rule or regulation
37. SHELL PHILIPPINES v. CENTRAL BANK; 162 SCRA 628 cannot go beyond the terms and provisions of the basic law

Topic: Rules and Regulations (Art. 5 LC); Rule Making Authority/R.ule Making Power to Considering the foregoing, the Court ruled that the trial court was correct in declaring that
promulgate Implementing Rules and Regulations "Monetary Board Resolution No. 47 is void insofar as it imposes the tax mentioned in Republic Act
No. 6125 on the export seria residue of (plaintiff) the aggregate annual F.O.B., value of which
Facts: On May 1, 1970, Congress approved the Act imposing a stabilization tax on consignments reached five million United States dollars in 1971 effective on January 1, 1972." The said
abroad (RA 6125). Section 1 of the statute, in part, provided that: "Any export products the resolution runs counter to the provisions of R.A. 6125 which provides that "(A)ny export product
aggregate annual F.O.B. value of which shall exceed five million United States dollars in any one the aggregate annual F.O.B. value of which shall exceed five million United States dollars in any
calendar year during the effectivity of this Act shall likewise be subject to the rates of tax in force one calendar year during the effectivity of this Act shall likewise be subject to the rates of tax in
during the fiscal years following its reaching the said aggregate value." force during the fiscal year following its reaching the said aggregate value.

In August, 1970, the Central Bank, through its Circular No. 309 provided that: ―The 38.INSULAR BANK OF ASIA AND AMERICA EMPLOYEES’ UNION (IBAA-EU)
vs.
HON.
stabilization tax shall begin to apply on January 1st following the calendar year during which such AMADO G. INCIONG, and IBAA G.R. No. L-52415; October 23, 1984
export products shall have reached the aggregate F.O.B. value of more than US $5 million, and the
applicable tax rates shall be the rates prescribed in Schedule (b) of Section 1 of Republic Act No. FACTS: The Department of Labor promulgated the rules and regulations for the implementation of
6125 for the fiscal year following the reaching of the said aggregate value. holidays with pay. The controversial section thereof reads: ―Sec. 2. Status of employees paid by
the month. — Employees who are uniformly paid by the month, irrespective of the number of
During 1971, appellee Shell exported seria residues, a by-product of petroleum refining, to working days therein, with a salary of not less than the statutory or established minimum wage
an extent reaching $5 million. On January 7, 1972, the Monetary Board issued its Resolution No. shall be presumed to be paid for all days in the month whether worked or not. For this purpose,
47 "subjecting petroleum pitch and other petroleum residues" to the stabilization tax effective the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365
January 1, 1972. Under the Central Bank Circular No. 309, implemented by Resolution No. 47, days divided by twelve‖
appellee had to pay the stabilization tax beginning January 1, 1972, which it did under protest. On
a later date, appellee filed suit against the Central Bank before the Court of First Instance of Later, Policy Instruction No. 9 was issued by the then Secretary of Labor interpreting the above-
Manila, praying that Resolution No. 47 be declared null and void, and that Central Bank be ordered quoted rule, pertinent portions of which read:
to refund the stabilization tax it paid during the first semester of 1972. Its position was that, ―xxx xxxxxx
pursuant to the provisions of RA 6125, it had to pay the stabilization tax only from July 1, 1972. The ten (10) paid legal holidays law, to start with, is intended to benefit
principally daily employees. In the case of monthly, only those whose
The lower court sustained appellee. Central Bank has appealed from the judgment. monthly salary did not yet include payment for the ten (10) paid legal
Issue: Whether or not Monetary Board‘s Resolution No. 47 runs counter to the provisions of RA holidays are entitled to the benefit.‖
6125.
Respondent IBAA by reason of the ruling laid down by the aforecited rule implementing Article 94
Held: Yes.While it is true that under the same law the Central Bank was given the authority to of the Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to all its
promulgate rules and regulations to implement the statutory provision in question, the SC employees.
reiterated the principle that this authority is limited only to carrying into effect what the law being
implemented provides. ISSUE: Does holiday pay not apply to monthly-paid employees?

Administrative regulations adopted under legislative authority by a particular department HELD: No, holiday pay also applies to monthly-paid employees
must be in harmony with the provisions of the law, and should be for the sole purpose of carrying
into effect its general provisions. By such regulations, of course, the law itself cannot be extended. Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by the
The rule-making power must be confined to details for regulating the mode or proceeding to carry then Secretary of Labor are null and void since in the guise of clarifying the Labor Code‘s
into effect the law as it has been enacted. The power cannot be extended to amending or provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion.
29
 The diplomatic immunity of private respondent was sufficiently established by the letter of
The provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and the Department of Foreign Affairs, recognizing and confirming the immunity of UNRFNRE in
explicit – it provides for both the coverage of and exclusion from the benefits. In Policy Instruction accordance with the 1946 Convention on Privileges and Immunities of the United Nations where
No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is the Philippine Government was a party. The issue whether an international organization is entitled
principally intended for daily paid employees, when the law clearly states that every worker shall to diplomatic immunity is a "political question" and such determination by the executive branch is
be paid their regular holiday pay conclusive on the courts and quasi-judicial agencies (The Holy See v. Hon. Eriberto U. Rosario, Jr.,
G.R. No. 101949, Dec. 1, 1994; International Catholic Migration Commission v. Calleja, supra).
39. Lasco vs. UN Revolving Fund for Natural Resources Exploration Our courts can only assume jurisdiction over private respondent if it expressly waived its
immunity, which is not so in the case at bench (Convention on the Privileges and Immunities of
Facts: Petitioners were dismissed from their employment with private respondent, the United the Specialized Agencies of the United Nations, Art. III, Sec. 4).
Nations Revolving Fund for Natural Resources Exploration, which is a special fund and subsidiary
organ of the United Nations. The UNRFNRE is involved in a joint project of the Philippine 40. Republic v. CA; GR No. 87676; December, 20, 1989
Government and the United Nations for exploration work in Dinagat Island.
Later on, petitioners filed their complaints for illegal dismissal with the NLRC. In a Motion to Topic: Applicability and Non-Applicability of the Labor Code
Dismiss, the private respondent alleged that the Labor Arbiter had no jurisdiction over its person
as it enjoys diplomatic immunity pursuant to the 1946 Convention on the Privileges and Facts: The employee union of the National Parks Development Committee (NPDC) staged a strike
Immunities of the United Nations. The Labor Arbiter dismissed the case and the NLRC affirmed at the Rizal Park, Fort Santiago, and PookniMariangMakiling at Los Baños, Laguna, alleging unfair
said dismissal. labor practices by NPDC.

Issue:Whether or not the Labor Arbiter had jurisdiction to hear and decide their case for illegal NPDC filed in the RTC a complaint against the union to declare the strike illegal and to restrain it
dismissal. on the grounds that the strikers, being government employees, have no right to strike although
they may form a union. RTC dismissed on the ground of lack of jurisdiction, it held that the case
Held:No, the Labor Arbiter does not have jurisdiction over the case A the UNRFNRE enjoys properly falls under the jurisdiction of DOLE. CA affirmed the decision of the RTC.
diplomatic immunity.
As a matter of state policy as expressed in the Constitution, the Philippine Government Issue: Whether the labor dispute between NPDC and its employees is covered by the Labor Code
adopts the generally accepted principles of international law (1987 Constitution, Art. II, Sec. 2). and hence cognizable by the DOLE?
Being a member of the United Nations and a party to the Convention on the Privileges and
Immunities of the Specialized Agencies of the United Nations, the Philippine Government adheres Held:No, the labor dispute between NPDC and its employees is not covered by the Labor Code
to the doctrine of immunity granted to the United Nations and its specialized agencies. Both and hence not cognizable by DOLE.
treaties have the force and effect of law.
We recognize the growth of international organizations dedicated to specific universal In Jesus P. Perlas, Jr. vs. People of the Philippines, G.R. Nos. 84637-39, August 2, 1989, we ruled
endeavors, such as health, agriculture, science and technology and environment. It is not that the NPDC is an agency of the government, not a government-owned or controlled
surprising that their existence has evolved into the concept of international immunities. The reason corporation, hence, the Sandiganbayan had jurisdiction over its acting director who committed
behind the grant of privileges and immunities to international organizations, its officials and estafa. We held thus: "The National Parks Development Committee was created originally as an
functionaries is to secure them legal and practical independence in fulfilling their duties (Jenks, Executive Committee on January 14, 1963, for the development of the Quezon Memorial, Luneta
International Immunities 17 [1961]). and other national parks (Executive Order No. 30). It was later designated as the National Parks
Immunity is necessary to assure unimpeded performance of their functions. The purpose is Development Committee (NPDC) on February 7, 1974 (E.O. No. 69). Despite an attempt to
"to shield the affairs of international organizations, in accordance with international practice, from transfer it to the Bureau of Forest Development, Department of Natural Resources, on December
political pressure or control by the host country to the prejudice of member States of the 1, 1975 (Letter of Implementation No. 39, issued pursuant to PD No. 830, dated November 27,
organization, and to ensure the unhampered performance of their functions" (International 1975), the NPDC has remained under the Office of the President (E.O. No. 709, dated July 27,
Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]). 1981). Since NPDC is a government agency, its employees are covered by civil service rules and
In the International Catholic Migration Commission case, we held that there is no conflict regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec.
between the constitutional duty of the State to protect the rights of workers and to promote their 14, Executive Order No. 180). While NPDC employees are allowed under the 1987 Constitution to
welfare, and the grant of immunity to international organizations. Clauses on jurisdictional organize and join unions of their choice, there is as yet no law permitting them to strike. In case of
immunity are now standard in the charters of the international organizations to guarantee the a labor dispute between the employees and the government, Section 15 of Executive Order No.
smooth discharge of their functions. 180 dated June 1, 1987 provides that the Public Sector Labor-Management Council, not the

30
Department of Labor and Employment, shall hear the dispute. Clearly, the Court of Appeals and with the Civil Service Commission a complaint for illegal dismissal, with preliminary mandatory
the lower court erred in holding that the labor dispute between the NPDC and the members of the injunction. On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the
NPDSA is cognizable by the Department of Labor and Employment. ground that the Civil Service Commission has no jurisdiction over the case. The CSC issued an
order dismissing the complaint for lack of jurisdiction. It ratiocinated that NHC is a government
corporation without an original charter but organized/created under the Corporation Code. On May
41. PNOC-Energy Dev. Corp. vs NLRC; GR No. 100947; May 31, 1993 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled that petitioner was illegally
dismissed from his employment by respondent as there was evidence in the record that the
Topic: Applicability and Non-Applicability of the Labor Code
criminal case against him was purely fabricated, prompting the trial court to dismiss the charges
against him. Hence, he concluded that the dismissal was illegal as it was devoid of basis, legal or
Manuel Pineda was an employee of the Philippine Oil Co.-Energy Development Corp. (PNOC-
factual.NHC appealed the aforesaid decision before the NLRC which, in turn, reversed the same.
EDC).He was hired as clerk.On January 26, 1989, Pineda decided to run for councilor of the
Hence, the instant petition.
Municipality of Kanaga, Leyte in the local elections scheduled in January, 1988, and filed the
corresponding certificate of candidacy for the position.
ISSUE: The primordial issue that confronts us is whether or not public respondent committed
His employment with the PNOC-EDC was questioned because under Section 66 of Election Code it
grave abuse of discretion in holding that petitioner is not governed by the Labor Code.
provides that:

Sec.66. Candidates holding appointive office or position. – Any person holding a public HELD: YES.Considering the fact that the NHA had been incorporated under Act 1459, the former
appointive office or position, including active members of the Armed Forces of the Philippines, and corporation law, it is but correct to say that it is a government-owned or controlled corporation
officers and employees in the government-owned or controlled corporations, shall be considered whose employees are subject to the provisions of the Labor Code. This observation is reiterated in
ipso facto resigned from his office upon the filing of his certificate of candidacy. the recent case of Trade Union of the Philippines and Allied Services (TUPAS) v. National Housing
Corporation, where we held that the NHA is now within the jurisdiction of the Department of
PNOC-EDC terminated his employment pursuant to Section 66 of the Election Code and Pineda Labor and Employment, it being a government-owned and/or controlled corporation without an
filed a complaint for illegal dismissal. The Labor Arbiter ruled in favor of Pineda and was affirmed original charter. Furthermore, we also held that the workers or employees of the NHC (now NHA)
by the NLRC upon appeal hence this petition for certiorari. undoubtedly have the right to form unions or employee's organization and that there is no
impediment to the holding of a certification election among them as they are covered by the Labor
Issue: Whether Section 66 of the Election Code is applicable to all employees of the government- Code.
owned or controlled corporations. Thus, the NLRC erred in dismissing petitioner's complaint for lack of jurisdiction because the rule
Held: Yes, the court held that Section 66 of the Omnibus Election Code applies to officers and now is that the Civil Service now covers only government-owned or controlled corporations with
employees in the government-owned or controlled corporations, those organized under the original charters. Having been incorporated under the Corporation Law, its relations with its
general laws on incorporation although not having an original or legislative charter, and also those personnel are governed by the Labor Code and come under the jurisdiction of the National Labor
who do not fall under the Civil Service Law but under the Labor Code. Therefore,Section 66 of the Relations Commission.
Election Code is applicable to all employees of the government-owned or controlled corporations.
Section 66 constitutes just cause for termination of employment in addition to those set forth in 43.People vs. Panis; 142 SCRA 664; G.R. Nos. L-58674-77; July 11, 1990
the Labor Code. Topic: Recruitment and Placement
42. BENJAMIN C. JUCO vs. NATIONAL LABOR RELATIONS COMMISSION and NATIONAL FACTS: Serapio Abug was charged with illegal recruitment. His defense was that the informations
HOUSING CORPORATION G.R. No. 98107 August 18, 1997 filed against him did not constitute an offense because in each of the four informations filed
against him, each denote that he was only recruiting one person whereas the statute requires
HERMOSISIMA, JR., J.: two or more persons

FACTS: Petitioner Benjamin C. Juco was hired as a project engineer of respondent National ISSUE: Determination of the proper interpretation of Art 13(b) of PD 442/ Labor Code:
Housing Corporation (NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was
separated from the service for having been implicated in a crime of theft and/or malversation of b) ‗Recruitment and placement' refers to any act of canvassing, enlisting, contracting, transporting,
public funds. Juco then filed a complaint for Illegal Dismissal against National Housing Corporation hiring, or procuring workers, and includes referrals, contract services, promising or advertising for
with the Department of Labor. The Labor Arbiter dismissed the complaint on the ground of lack of employment, locally or abroad, whether for profit or not: Provided, That any person or entity
jurisdiction. On appeal, the NLRC reversed the LA. Thereafter, respondent NHC appealed before which, in any manner, offers or promises for a fee employment to two or more persons shall be
the SC which reinstated the LA‘s dismissal of the complaint. On January 6, 1989, petitioner filed deemed engaged in recruitment and placement.

31
HELD: The specification of two or more persons is not to create a condition prior to filing but 45. ROMERO v PEOPLE
rather it states a presumption that the individual is engaged in recruitment in consideration of a
fee, however the number of persons is not an essential ingredient to the act of recruitment or Topic: ELEMENTS OF SIMPLE ILLEGAL RECRUITMENT
placement, and it will still qualify even if only one person has been involved In 2000, ROMULO went to ROMERO's stall to inquire about securing a job overseas. ROMERO
informed him that as soon as he could give her US$3,600.00, his papers would be immediately
44.Hellenic Phil. Shipping Inc. vs. Siete G.R. No. 84082 March 13, 1991 processed.

TOPIC: Wenphil Doctrine does not apply. ROMERO contacted one JonneyErezMokra who instructed ROMULO to attend a briefing at his
ILLEGAL DISMISSAL: Dismissal is NOT justified; DueProcess not observed. (Jonney's) house in Pampanga.

FACTS: Capt. Epifanio Siete was employed as Master of M/V Houda G by Sultan Shipping Co., Romulo was then able to leave for Israel and was able to secure a job there. However, after two
Ltd., sometime later, Capt. Wilfredo Lim boarded the vessel and advised Siete that he had a and a half months, he was caught by Israel's immigration police, detained, and then deported.
complaint for illegal dismissal.
 Meanwhile, one Arturo Siapno, ROMERO's nephew, suffered the same fate as Romulo‘s.
Petitioner alleged in its answer that Siete had been dismissed because of his failure to comply with
the instruction of Sultan Shipping to erase the timber load Arturo then checked with the DOLE whether ROMEROet. al. had any license or authority to recruit
line on the vessel and for his negligence in the discharge of the cargo at Tripoli that endangered employees for overseas employment. Finding that ROMERO and the others were not authorized to
the vessel and stevedores. recruit for overseas employment, Arturo and Romulo filed a complaint before the NBI.
 Consequently, an Information was filed against ROMERO and JonneyErezMokra for the crime of
POEA: Dismissed the complaint, holding that there was valid cause for Siete‘s removal. Illegal Recruitment.
Siete appealed to the NLRC contending that he was dismissed without even being informed of the
charges against him or given an opportunity to refute them. RTC found ROMULO guilty.

NLRC:Reversed the POEA holding that thedismissal violated due process and that the On appeal, the CA affirmed in toto the RTC decision.
documents submitted by the petitioner were hearsay, self-serving, and not verified.
 Hence, this petition before the SC.
Hellenic argues that whatever defects might have tainted the EE‘s dismissal were subsequently
cured when the charges against him were specified and sufficiently discussed in the ISSUE # 1: What are the elements of illegal dismissal?
position papers submitted by the parties to the POEA.
Article 13 (b) of the same Code defines, ―recruitment and placement‖ as: ―any act of canvassing,
Issue:Whether or not due process was observed by the ER. enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for profit or
HELD: NO not: Provided, that any person or entity which, in any manner, offers or promises for a fee,
employment to two or more persons shall be deemed engaged in recruitment and placement.‖ XXX
The law requires that the investigation be conducted before the dismissal, not after. That omission
cannot be corrected by the investigation later conducted by the POEA. As the Solicitor General The crime of illegal recruitment is committed when two elements concur, namely: (1) the offender
correctly maintained, thedue process requirement in the dismissal process is different from the due has no valid license or authority required by law to enable one to lawfully engage in recruitment
process requirement in the POEA proceeding. Both requirements must be separately observed. and placement of workers; and (2) he undertakes either any activity within the meaning of
While it is true that in Wenphil Corp. vs. NLRC and Rubberworld (Phils.) vs. NLRC, ―recruitment and placement‖ defined under Article 13 (b), or any prohibited practices enumerated
the lack of due process before the dismissal of the employee was deemed corrected by the under Article 34 of the Labor Code. XXX
subsequent administrative proceedings where the dismissed employee was given a chance to be
heard, those cases involved dismissals that were later proved to be for a valid cause. The doctrine Under the first element, a non-licensee or non-holder of authority is any person, corporation or
in those cases is not applicable to the case at bar because our findings here is that the dismissal entity which has not been issued a valid license or authority to engage in recruitment and
was not justified. placement by the Secretary of Labor, or whose license or authority has been suspended, revoked
or cancelled by the POEA or the Secretary. XXX

32
 Accused-appellant Darwin through fraudulent representation to Macaria Toledo to the
ISSUE # 2: Whether accommodation extended by ROMERO falls within the purview of effect that she has the authority to recruit workers and employees for abroad and can facilitate the
Art. 13 (b) of the Labor Code necessary papers in correction thereof recruit and promise a job abroad to Macaria Toledo without
first securing the necessary license and permit from POEA. Toledo paid Php 150,000 as evidenced
SC: YES! by the receipt that it was for airfare and U.S.A.

XXX Petitioner insists that the CA was wrong in affirming the factual findings of the trial court. Appellant Darwin assured tToledo tht she can leave within one week. Accuse-appellant
According to her, the accommodation extended by the petitioner to the private respondents is far claimed that she did not promise any employment in the U.S. to Toledo.
from the referral as contemplated in Article 13 (b) of the Labor Code. Nevertheless, the Issue: Whether or not the accuse-appellant Darwin is guilty of illegal recruitment?
testimonies of the private respondents clearly establish the fact that petitioner's conduct falls
within the term recruitment as defined by law. As testified by Romulo Padlan, petitioner convinced Held: No, accused-appellant never gave the victim the impression that she can send her abroad
him and Arturo Siapno to give her US$3,600.00 for the processing of their papers. Thus, it is for work.
apparent that petitioner was able to convince the private respondents to apply for work in Israel
after parting with their money in exchange for the services she would render. XXX 47.EDGARDO M. PANGANIBAN v.TARA TRADING SHIPMANAGEMENT INC. AND
SHINLINE SDN BHD; G.R. No. 187032; October 18, 2010

ISSUE # 3: Whether the absence of receipt that a certain amount of money was paid Topic: Employees‘ Compensation;Migrant Workers and Overseas Filipinos Act of 1995 as Amended
to ROMERO was fatal by RA10022

While it is true that labor contracts are impressed with public interest and the provisions of the
SC: NO!
POEA SEC must be construed logically and liberally in favor of Filipino seamen in the pursuit of
their employment on board ocean-going vessels, still the rule is that justice is in every case for the
XXX As to petitioner‘s contention that the testimony of Arturo Siapno that the latter paid a certain
deserving, to be dispensed with in the light of established facts, the applicable law, and existing
amount of money to the former must not be given any credence due to the absence of any receipt
jurisprudence.
or any other documentary evidence proving such, the same is without any merit. In People v.
Alvarez, 387 SCRA 448 (2002), this Court ruled that in illegal recruitment cases, the failure to Facts: On November 2005, petitioner was hired by respondent Tara Trading Shipmanagement,
present receipts for money that was paid in connection with the recruitment process will not affect Inc.(Tara),in behalf of its foreign principal, respondent Shinline SDN BHD(Shinline)to work as an
the strength of the evidence presented by the prosecution as long as the payment can be proved Oiler on board MV Thailine 5 with a monthly salary of US$409.00.
through clear and convincing testimonies of credible witnesses
Sometime in April 2006, petitioner began exhibiting signs of mental instability. He was
repatriated on May 24, 2006 for further medical evaluation and management.
46. DARWIN vs CA

Topic:> Illegal Recruitment: Elements Petitioner was referred by respondents to the Metropolitan Medical Center where he
(a) The person charged with crime must have undertaken recruitment activities was diagnosed to be suffering from brief psychotic disorder.
(b) The said person does not have a license or authority to do so.
Despite his supposed total and permanent disability and despite repeated demands for
> To prove that the accused was engaged in recruitment activities as to commit the crime of payment of disability compensation, respondents allegedly failed and refused to comply with their
illegal recruitment, it must be shown that the accused gave the victim the impression that she had contractual obligations.
the power of ability to send the latter abroad for work as such that the latter was convinced to
part with her money in order to be so employed. Hence, petitioner filed a Complaint against respondents praying for the payment of
Recruitment and Placement (Article 13 of the Labor Code) --- Any act of canvasing, enlisting, US$60,000.00 as total and permanent disability benefits, reimbursement of medical and hospital
contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contract expenses, moral and exemplary damages, and attorneys fees equivalent to 10% of total claims.
services, promising or advertising for employment locally.
Respondents, on the other hand, maintained that petitioner requested for an early
Facts: This is a petition for Review of the CA which affirmed in to the judgment of the RTC repatriation and arrived at the point of hire on May 24, 2006; that while on board the vessel, he
convicting accused-appellant Imeld Darwin for simple illegal recruitment. Under Article 38 and confided to a co-worker, Henry Santos, that his eating and sleeping disorders were due to some
Article 39 in relation to Article 13 (b) and (C) of the Labor Code. family problems; that Capt. Zhao, the master of the vessel, even asked him if he wanted to see a
33
doctor; that he initially declined; that on May 22, 2006, petitioner approached Capt. Zhao and FACTS:Complainants are husband and wife, residents of Baguio City. They made a living earning
requested for a vacation and early repatriation; that the said request was granted; that upon an average of P20,000.00 a month by selling fish and vegetables in a rented stall in said City, at
arrival, petitioner was subjected to a thorough psychiatric evaluation; and that after a series of least until March 24, 1998 when they closed shop for reasons of attending to the demands of the
check-ups, it was concluded that his illness did not appear to be work-related. Respondents promised jobs for them in Japan. Both categorically identified Jane Am-amlao (or Jean Am-amlaw),
argued that petitioner was not entitled to full and permanent disability benefits under the their co-vendor in Baguio City Market, as the person who approached them and assured them that
Philippine Overseas Employment Administration Standard Employment Contract(POEA she knew a legal recruiter, an ex-POEA employee, who had the capacity to send them both
SEC)because there was no declaration from the company-designated physician that he was abroad. Jane Am-amlaw (or Am-amlaw for brevity) recruited complainants and personally
permanently and totally disabled and that the claim for damages was without basis as no bad faith accompanied them on March 24, 1998 to meet the person she earlier referred to, or Aida de Leon
can be attributed to them. (or Alma de Leon), in the latters apartment at No. 7280 J. Victor St., Pio del Pilar, Makati.

Complainants likewise categorically identified Aida de Leon (de leon for brevity) as the
The LA ruled in favor of the petitioner while the NLRC affirmed the decision of the LA.
person who arranged a meeting in her apartment on March 24, 1998 between complainants and
The CA reversed the decision of the NLRC.
appellant Angel Mateo (Mateo for brevity) whom de Leon introduced as their contact person for
Japan-bound workers. In said meeting, Mateo represented himself as having the capacity to send
Issue: Whether or not his psychotic disorder was caused by the nature of his work as oiler of the
people abroad and showed complainants various documents to convince them of his legitimate
company-owned vessel.
recruitment operations. Convinced that Mateo had indeed the capacity to facilitate their
Held: NO. Petition DENIED. employment as an office worker and as a cook or mechanic in Japan, complainants, on that same
day, handed Mateo P15,000.00 which Mateo required them to pay for their processing fees. This
Working conditions cannot be accepted to have caused or at least increased the risk of was to be the first of a series of sums of money to be extracted from complainants.
contracting the disease – in this case, brief psychotic disorder- in the absence of substantial
evidence. The evidence must be real and substantial, and not merely apparent. In sum, Complainants likewise positively identified appellant Vicenta Vicky Lapis (Lapis for brevity)
petitioner failed to establish by substantial evidence that his brief psychotic disorder in Court as the person introduced to them by Mateo as his wife on April 29, 1998 at Maxs
was caused by the nature of his work as oiler of the company-owned vessel. In fact, he Restaurant in Makati when Lapis required complainants to pay P49,240.00 for their plane tickets
failed to elaborate on the nature of his job as oiler of respondent company. The Court, therefore, and travel taxes.
has difficulty in finding any link between his position as oiler and his illness. Petitioner points out
that his ―brief psychotic disorder‖ which was caused by a family problem is work-related simply Both appellants updated complainant as to the status of their paper and reiterated their
because had it been a land-based employment, petitioner would have easily gone home and promise that complainants would soon be leaving for Japan, then collected from complainants
attended to the needs of his family. This is not the ―work-related‖ instance contemplated by the unreceipted amount of P20,000.00. Complainants met again with Lapis, who was again with
provisions of the employment contract in order to be entitled to the benefits. Otherwise, every Mateo, on May 19, 1998 at the Sampaguita Travel Agency. Mateo extracted P45,000.00 from
seaman would automatically be entitled to compensation because the nature of his work is not complainants and deposited it under his name. On that occasion, Perpetua wanted to ask from the
land-based. Sampaguita Travel Agencys employees where to pay the P45,000.00 but failed to do so because
Lapis took her attention away from asking while Mateo asked Melchor to hand over to him said
A seaman is a contractual and not a regular employee. Thus, in claims of seamen for sum.
compensation and disability benefits, the Court cannot just disregard the provisions of the POEA
Standard Employment Contract (POEA SEC). In order to claim disability benefits under the POEA The prosecution presented documentary evidence, such as varied unofficial receipts all
SEC, it is the ‗company-designated‘ physician who must proclaim that the seaman suffered a bearing the signature of the appellants. The trial court held that the evidence for the prosecution
permanent disability, due to either injury or illness, during the term of the latter‘s employment. In sufficiently established the criminal liability of appellants for the crimes charged. Hence, this
this case, the findings of respondents‘ designated physician that petitioner has been suffering from appeal.
brief psychotic disorder and that it is not work-related must be respected. While it is true that
labor contracts are impressed with public interest and the provisions of the POEA SEC must be ISSUE:Whether or not the court a quo gravely erred in finding accused-appellants guilty beyond
construed logically and liberally in favor of Filipino seamen in the pursuit of their employment on reasonable doubt of illegal recruitment committed by a syndicate
board ocean-going vessels, the rule is that justice is, in every case, only for the deserving; it is to
HELD:YES. Illegal recruitment is committed when these two elements concur: (1) the offenders
be dispensed with in the light of established facts, the applicable law, and existing jurisprudence.
have no valid license or authority required by law to enable them to lawfully engage in the
48. PEOPLE VS. LAPIS; G.R. Nos. 145734-35. October 15, 2002 recruitment and placement of workers, and (2) the offenders undertake any activity within the
meaning of recruitment andplacement defined in Article 13(b) or any prohibited practices
enumerated in Article 34 of the Labor Code.
34
 enterprise and a concurrence in their resolve to commit it. To establish conspiracy, it is not
In the simplest terms, illegal recruitment is committed by persons who, without authority essential that there be actual proof that all the conspirators took a direct part in every act. It is
from the government, give the impression that they have the power to send workers abroad for sufficient that they acted in concert pursuant to the same objective.
employment purposes. Under Article 13(b), recruitment and placement refers to any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers[;] and
includes referrals, contract services, promising or advertising for employment, locally or abroad, 49. People vs. Logan, G.R. No. 135030-33, 20 July 2001
whether for profit or not. In the simplest terms, illegal recruitment is committed by persons who, Topic: Illegal Recruitment vs. Estafa
without authority from the government, give the impression that they have the power to send
workers abroad for employment purposes. Facts:Mercy Logan was charged and convicted of three counts of estafa under Art. 315 of the
Revised Penal Code and illegal recruitment in large scale as penalized under Art(s). 38 and 39, as
Where appellants made misrepresentations concerning their purported power and authority amended by P.D. 2018, of the Labor Code (P.D. 442).
to recruit for overseas employment, and in the process, collected from complainants various
amounts in the guise of placement fees, the former clearly committed acts constitutive of illegal The three (3) private complainants met with the appellant on separate occasions in her office in
recruitment.[18] In fact, this Court held that illegal recruiters need not even expressly represent Quezon City to apply for overseas employment.On the said occasions, she promised them
themselves to the victims as persons who have the ability to send workers abroad. It is enough employment either as construction workers or piggery helpers in Japan for a fee. Despite
that these recruiters give the impression that they have the ability to enlist workers for job subsequent payment of her required fees, she failed to secure for the rivate complainants any
placement abroad in order to induce the latter to tender payment of fees. overseas employment. Clearly, the appellant was engaged in large scale recruitment and
placement activities which were illegal for the reason that she had no license nor authority from
the Secretary of Labor and Employment.
It is also important to determine whether illegal recruitment committed by appellants can be
qualified as a syndicated illegal recruitment or an offense involving economic sabotage. In her appeal, Logan essentially claims that she did not represent herself as a job recruiter to the
private complainants. According to her, the private complainants were the ones who went to her
Section 6 of RA 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of office in Cubao, Quezon City and pleaded with her to help them find jobs abroad. While she
1995, provides that illegal recruitment shall be considered an offense involving economic sabotage admitted having received money from the private complainants, the appellant turned the same
when it is committed by a syndicate or carried out by a group of three or more persons conspiring over to Gloria de Leon who actually recruited them for overseas employment; and that Gloria de
and confederating with one another. Leon reneged on her promise to the private complainants. Hence, they implicated her in these
cases inasmuch as their transactions with Gloria de Leon took place in her office.
In several cases, illegal recruitment has been deemed committed by a syndicate if carried out
by a group of three or more persons conspiring and/or confederating with each other in carrying Issue: Whether or not the accused can be convicted of both illegal recruitment under the Labor
out any unlawful or illegal transaction, enterprise or scheme defined under Article 38(b) of the Code and estafa under the RPC for the same act.
Labor Code.[20]
Held: YES.
In this case, it cannot be denied that all four (4) accused -- Jane Am-amlaw, Aida de Leon,
Angel Mateo and Vicenta Medina Lapis participated in a network of deception. Verily, the active It is well-settled that a person who has committed illegal recruitment may be charged and
involvement of each in the various phases of the recruitment scam formed part of a series of convicted separately of the crime of illegal recruitment under the Labor Code and estafa under
machinations. Their scheme was to lure complainants to Manila and to divest them of their hard- paragraph 2(a) of Article 315 of the Revised Penal Code.[29] The reason for the rule is that the
earned money on the pretext of guaranteed employment abroad. The prosecution evidence shows crime of illegal recruitment is malum prohibitum where the criminal intent of the accused is not
that complainants were convinced by Jane Am-amlaw to go to Manila to meet someone who could necessary for conviction, while the crime of estafa is malum in se where the criminal intent of the
find employment for them abroad. Upon reaching the city, they were introduced to Aida de Leon accused is necessary for conviction. In other words, a person convicted under the Labor Code may
and Angel Mateo; Mateo claimed to have the contacts, the resources and the capacity to employ also be convicted of offenses punishable by other laws.
them overseas. After that initial meeting, complainants made several payments to him, supposedly
The essential elements of the crime of illegal recruitment in large scale which is punishable with
for the processing requirements of their deployment to Japan.Later on, they met Vicenta Medina
life imprisonment and a fine of One Hundred Thousand Pesos (P100,000.00) under Article 39(a) of
Lapis who volunteered her assistance in the processing of their employment papers and assured
the Labor Code, as amended, are as follows: 1) the accused engages in the recruitment and
them that Mateo could easily send them abroad.
placement of workers, as defined under Article 13(b) or in any prohibited activities under Article 34
Even assuming that the individual acts of the accused were not necessarily indispensable to of the Labor Code; 2) the accused has not complied with the guidelines issued by the Secretary of
the commission of the offense, conspiracy would have still been present. Their actions, when Labor and Employment, particularly with respect to the securing of a license or an authority to
viewed in relation to one another, showed a unity of purpose towards a common criminal
35
recruit and deploy workers, whether locally or overseas; and 3) the accused commits the same Accused Chua used the same modus operandi on the other private complainants. After requiring
against three (3) or more persons, individually or as a group. each complainant to pay a placement fee of P15,000.00 each, to secure NBI clearances and to
undergo medical examinations, she would go in hiding.
The elements of the modes of committing estafa are: a) that there must be a false pretense,
fraudulent act or fraudulent means; b) that such false pretense, fraudulent act or fraudulent
means must be made or executed prior to or simultaneously with the commission of the fraud; c) In time, complainants inquired from the Philippine Overseas Employment Agency (POEA) about
that the offended party must have relied on the false pretense, fraudulent act or fraudulent accused Chuas activities. The POEA issued a certification that accused Chua was not licensed to
means, i.e., he was induced to part with his money or property because of the false pretense, recruit persons/workers for overseas employment.
fraudulent act or fraudulent means; and, d) that as a result thereof, the offended party suffered
damages. ISSUE: Whether or not the approval of accused‘s application for a service contractor‘s authority
on April 13, 1993 should be given a retroactive effect as to make all her previous recruitment
The acts of the appellant of deliberately misrepresenting herself to the private complainants as activities valid.
having the necessary authority or license to recruit applicants for overseas employment so that she
could as she did collect money from them allegedly for processing fees and travel documents only HELD:No. It is the issuance of the license which makes the holder thereof authorized to perform
to renege on her promise to get them overseas employment and for failure to return the money recruitment activities. The law specifically provides that every license shall be valid for at least two
she collected from the private complainants, despite several demands, clearly amount to estafa (2) years from the date of issuance unless sooner cancelled or revoked by the Secretary
punishable under Article 315, paragraph 2(a), of the Revised Penal Code.

50. PEOPLE OF THE PHILIPPINES vs. ALICIA A. CHUA 51. Millares vs. NLRC; 385 SCRA 306; July 29, 2002
Topic: ILLEGAL RECRUITMENT
Topic: Simple Illegal Recruitment
Accused Alicia Chua has appealed from the decision of the Regional Trial Court, Manila, Branch V Facts:Petitioner Douglas Millares was employed by private respondent ESSO International
finding her guilty beyond reasonable doubt of illegal recruitment committed in large scale and Shipping Company LTD. (Esso International, for brevity) through its local manning agency, private
sentencing her to life imprisonment and a fine of P100,000.00, and eight (8) counts of estafa respondent Trans-Global Maritime Agency, Inc. (Trans-Global, for brevity) on November 16, 1968
sentencing her to various penalties therefor. as a machinist. In 1975, he was promoted as Chief Engineer which position he occupied until he
opted to retire in 1989. He was then receiving a monthly salary of US $1,939.00.
In September 1992, accused Chua received a facsimile message from Harmony Electronics
On June 13, 1989, petitioner Millares applied for a leave of absence. The President of private
Company in Taiwan. The message was written in Chinese characters except for the names of To-
respondent Trans-Global, approved the request for leave of absence. Petitioner Millares wrote
ong Zenon Tumenlaco and Tercenio Domingo Fornaliza. Harmony asked her to call up To-ong and
Exxon International Co., (now Esso International) informing of his intention to avail of the optional
Tercenio and tell them that they were needed in Taiwan. Accused Chua contacted To-ong and told
retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had
him the message.
already rendered more than twenty (20) years of continuous serviceRespondent Esso International
denied petitioner Millares' request for optional retirement on the following grounds, to wit: (1) he
In October 1992, To-ong and Tercenio went to the office of accused Chua, and the latter told was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide for
them that she could send them to Taiwan upon payment of a placement fee of P15,000.00 each. retirement before the age of sixty (60) years; and (3) he did not comply with the requirement for
She also asked them to secure NBI clearances and medical certificates. On October 29, 1992, claiming benefits under the CEIP, i.e., to submit a written advice to the company of his intention to
Tercenio, together with private complainant Lonito Baluis, went back to the office of accused Chua terminate his employment within thirty (30) days from his last disembarkation date.
and submitted the requirements. Tercenio and Lonito Baluis paid P15,000.00 each for which they
were issued a receipt bearing the name Man Tai Trading and General Services with accused Chuas Petitioner Millares requested for an extension of his leave of absence. Trans-global wrote petitioner
signature. Millares advising him that respondent Esso International "has corrected the deficiency in its
manpower requirement specifically in the Chief Engineer rank by promoting a First Assistant
Accused Chua assured Tercenio and Lonito Baluis that they would be able to leave for Taiwan Engineer to this position as a result of (his) previous leave of absence x x x. The adjustment in
soon. Three months passed, but they were not deployed. Tercenio became apprehensive and told said rank was required in order to meet manpower schedules as a result of (his) inability."
accused Chua that he would withdraw his application and ask for refund of the placement fee.
Esso International advised petitioner Millares that in view of his absence without leave, which is
Accused Chua repeatedly promised that she would give back the money to him, but she never did.
equivalent to abandonment of his position, he had been dropped from the roster of crew
After a few more months, Tercenio could not anymore locate accused Chua.
members. On the other hand, petitioner Lagda was employed by private respondent Esso
International as wiper/oiler. He was promoted as Chief Engineer in 1980, a position he continued
36
to occupy until his last COE expired. He was then receiving a monthly salary of US$1,939.00. With respect to the benefits under the Consecutive Enlistment Incentive Plan (CEIP), we hold that
Lagda applied for a leave of absence. Trans-Global approved petitioner Lagda's leave of absence the petitioners are still entitled to receive 100% of the total amount credited to him under the
and advised him to report for re-assignment on a certain date. CEIP. Considering that we have declared that petitioners are contractual employees, their
compensation and benefits are covered by the contracts they signed and the CEIP is part and
Lagda wrote a letter to Esso International, through Trans-Global informing of his intention to avail parcel of the contract.
of the optional early retirement plan in view of his twenty (20) years continuous service in the
complaint. Trans-global denied petitioner Lagda's request for availment of the optional early Since petitioners' termination of employment under the CEIP do not fall under Section III-A
retirement scheme on the same grounds upon which petitioner Millares request was denied. He (Retirement, Death and Disability) or Section III-B (Voluntary Termination), nor could they be they
requested for an extension of his leave of absence and the same was approved. However, Esso be considered under the second paragraph of Section III-C, as earlier discussed; it follows that
International advised petitioner Lagda that in view of his "unavailability for contractual sea their termination falls under the first paragraph of Section III-C for which they are entitled to
service," he had been dropped from the roster of crew members. 100% of the total amount credited to their accounts. The private respondents can not now renege
on their commitment under the CEIP to reward deserving and loyal employees as the petitioners in
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee this case.
benefits against private respondents Esso International and Trans-Global, before the POEA.
52. MILLARES vs. NLRC July 29, 2002 385 SCRA 306
Issue:W/N illegal dismissal was present and petitioners are entitled to payment of employee
benefits TOPIC: Simple Illegal Recruitment (Dates- material in this case)
Held: Considering all the arguments presented by the private respondents, the Intervenor FAME
and the OSG, we agree that there is a need to reconsider our position with respect to the status of FACTS: Petitioner Douglas Millares was employed by private respondent ESSO Esso International
seafarers which we considered as regular employees under Article 280 of the Labor Code. We, through Trans-Global, as a machinist. He was promoted to Chief Engineer.
therefore, partially grant the second motion for reconsideration. Millares applied for a leave of absence for the period July 9 to August 7, 1989 and was approved
by Trans-Global. On June 21, 1989, petitioner Millares wrote (now Esso International through
In Brent School Inc. v. Zamora, the Supreme Court stated that Article 280 of the Labor Code does Michael J. Estaniel, informing him of his intention to avail of the optional retirement plan
not apply to overseas employment. considering that he had already rendered more than 20 years of continuous service. Petitioner
Millares request for optional retirement was denied.
Again, in Pablo Coyoca v. NLRC, the Court also held that a seafarer is not a regular employee and On August 1989 Millares requested for an extension of his leave of absence and the crewing
is not entitled to separation pay. His employment is governed by the POEA Standard Employment manager then wrote to Millares advising him that respondent ESSO "has corrected the deficiency
Contract for Filipino Seamen. in its manpower requirement specifically in the Chief Engineer rank by promoting a First Assistant
Engineer to this position as a result of (his) previous leave of absence which expired last August 8,
From the foregoing cases, it is clear that seafarers are considered contractual employees. They
1989. The adjustment in said rank was required in order to meet manpower schedules as a result
can not be considered as regular employees under Article 280 of the Labor Code. Their
of (his) inability."
employment is governed by the contracts they sign everytime they are rehired and their
employment is terminated when the contract expires. Their employment is contractually fixed for a
On September 26, 1989, ESSO advised Millares that in view of his absence without leave, which is
certain period of time. They fall under the exception of Article 280 whose employment has been
equivalent to abandonment of his position, he had been dropped from the roster of crew members
fixed for a specific project or undertaking the completion or termination of which has been
effective September 1, 1989.
determined at the time of engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season. We need
On the other hand. Lagda was employed by ESSO as wiper in June 1969, promoted as Chief
not depart from the rulings of the Court in the two aforementioned cases which indeed constitute
engineer in 1980 until his last COE expired on April 10, 1989. On May 1989, Lagda applied for a
stare decisis with respect to the employment status of seafarers.
leave of absence which was approved by Trans-global and advised him to report for re-assignment
From all the foregoing, we hereby state that petitioners are not considered regular or permanent on July 21, 1989.
employees under Article 280 of the Labor Code. Petitioners' employment have automatically
ceased upon the expiration of their contracts of enlistment (COE). Since there was no dismissal to On June 26, 1989 Lagda wrote to ESSO through Trans-global oresident informing him of his
speak of, it follows that petitioners are not entitled to reinstatement or payment of separation pay intention to avail of the optional retirement plan in vies of his 20 years of service. It was denied by
or backwages, as provided by law. Trans-global on the same grounds as with Millares. He requested to extend his leave of absence
and was approved but later informed by ESSO that in view of his "unavailability for contractual sea
Other relevant info: service" he had been droppped from the roster of crew memebers effective September 1, 1989.

37
On October 5, 1989, Millares and Lagda filed a complaint-affidavit before POEA for illegal dismissal petitioners were unavailable or had abandoned their work when they failed to report back for
and non-payment of employee benefits against ESSO and Trans-global. POEA dismissed the assignment as they were still questioning the denial of private respondents of their desire to avail
complaint for lack of merit, which was affirmed by NLRC. of the optional early retirement policy, which they believed in good faith to exist. Neither can we
consider petitioners guilty of poor performance or misconduct since they were recipients of Merit
Issues: (1) are the petitioners regular or contractual employees? (2) assuming that they are Pay Awards for their exemplary performances in the company.
regular employees, were they dismissed without just cause? (3) does provision of POEA standard
contract for sea farers on board foreign vessels preclude the attainment by seamen of the status
of regular employees? (4) does the decision to contravene international maritime las, allegedly 53. Gu-Miro vs. Adorable, G.R. No. 160952, August 20, 2004; 437 SCRA 162
part of the land? Topic: Labor Law – Seafarers are not considered regular employees
Held: No. (1) Petitioners contends that they performed activities which are usually necessary to
the usual business or trade of the company and the fact that they served for 20 years already is an Facts: Petitioner services as radio officer on board respondent‘s different vessels were terminated
express acknowledgment that they are regular employees by the private respondents. due to the installation of labor saving devices which made his services redundant. Petitioner
Respondents invoke that under the POEA rules and regulation governing overseas employment argued that aside from the incentive bonus and additional allowances that he is entitled, he should
seafarers are not regular employees based on international maritime practice. While intervenor be considered as a regular employee of respondent company, having been employed onboard the
FAME avers that our decision of not reconsidered will have negative consequence of the manning latter‘s different vessels for the span of 10 years and thus, entitled to back wages and separation
industry in the Philippines. pay.

It is clear that seafarers are considered contractual employees. They cannot be considered as Issue: WON seafarers are considered regular employees.
regular employees under Article 280 of the Labor Code. Their employment is governed by the
Held: No. Petitioner cannot be considered as a regular employee notwithstanding that the work he
contracts they sign every time they are rehired and their employment is terminated when the
performs is necessary and desirable in the business of the respondent company. The exigencies of
contract expires. Their employment is contractually fixed for a certain period of time. They fall
the work of seafarers necessitates that they be employed on a contractual basis. Thus, even with
under the exception of Article 280 whose employment has been fixed for a specific project or
the continued re-hiring by respondent company of petitioner to serve as radio officer onboard the
undertaking the completion or termination of which has been determined at the time of
former‘s different vessels, this should be interpreted not as a basis for regularization but rather a
engagement of the employee or where the work or services to be performed is seasonal in nature
series of contract renewals.
and the employment is for the duration of the season.19 We need not depart from the rulings of
the Court in the two aforementioned cases which indeed constitute stare decisis with respect to 54. ROBERTO RAVAGO, petitioner, vs. ESSO EASTERN MARINE, LTD. and TRANS-
the employment status of seafarers. GLOBAL MARITIME AGENCY, INC., respondents. G.R. No. 158324 March 14, 2005

We hereby state that petitioners are not considered regular or permanent employees under Article The Esso Eastern Marine Ltd. (EEM), now the Petroleum Shipping Ltd., is a foreign company based
280 of the Labor Code. Petitioners' employment have automatically ceased upon the expiration of in Singapore and engaged in maritime commerce. It is represented in the Philippines by its
their contracts of enlistment (COE). Since there was no dismissal to speak of, it follows that manning agent and co-respondent Trans-Global Maritime Agency, Inc. (Trans-Global), a
petitioners are not entitled to reinstatement or payment of separation pay or backwages, as corporation organized under the Philippine laws.
provided by law.
Ravago worked with Esso vessels until August 22, 1992, a period spanning more than 22 years.
With respect to the benefits under the Consecutive Enlistment Incentive Plan (CEIP), we hold that On August 24, 1992, or shortly after completing his latest contract with EIS, Ravago was granted a
the petitioners are still entitled to receive 100% of the total amount credited to him under the vacation leave with pay from August 23, 1992 until October 28, 1992. Preparatory to his
CEIP. Considering that we have declared that petitioners are contractual employees, their embarkation under a new contract, he was ordered to report, on September 28, 1992, for a
compensation and benefits are covered by the contracts they signed and the CEIP is part and Medical Pre-Employment Examination.
parcel of the contract.
On the night of October 12, 1992, a stray bullet hit Ravago on the left leg while he was waiting for
In our March 14, 2000 Decision, we, however, found that petitioners Millares and Lagda were not a bus ride in Cubao, Quezon City. He fractured his left proximal tibia and was hospitalized at the
guilty of "abandonment" or "unavailability for contractual sea service," as we have stated: Philippine Orthopedic Hospital. Ravagos wife, Lolita, informed Trans-Global and EIS of the incident
The absence of petitioners was justified by the fact that they secured the approval of private on October 13, 1992 for purposes of availing medical benefits. As a result of his injury, Ravagos
respondents to take a leave of absence after the termination of their last contracts of enlistment. doctor opined that he would not be able to cope with the job of a seaman and suggested that he
Subsequently, petitioners sought for extensions of their respective leaves of absence. Granting be given a desk job. Ravagos left leg had become apparently shorter, making him walk with a
arguendo that their subsequent requests for extensions were not approved, it cannot be said that

38
limp. For this reason, the company physician, Dr. Virginia G. Manzo, found him to have lost his his consent, or where it satisfactorily appears that the employer and employee dealt with each
dexterity, making him unfit to work once again as a seaman. other on more or less equal terms with no moral dominance whatever being exercised by the
former over the latter. Unless, thus, limited in its purview, the law would be made to apply to
Ravago filed a complaintfor illegal dismissal with prayer for reinstatement, backwages, damages purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary,
and attorneys fees against Trans-Global and EIS with the Philippine Overseas Employment unjust in its effects and apt to lead to absurd and unintended consequences
Administration Adjudication Office.
he Court made the same ruling in Coyoca v. National Labor Relations Commission and declared
In their Answer dated April 14, 1993, respondents denied that Ravago was dismissed without that a seafarer, not being a regular employee, is not entitled to separation or termination pay
notice and just cause. Rather, his services were no longer engaged in view of the disability he
suffered which rendered him unfit to work as a seafarer. 55. OSM SHIPPING PHILS., INC. v. NLRC and FERMIN F. GUERRERO; G.R. No. 138193;
March 5, 2003
ISSUE
Whether or not the Court of Appeals blatantly disregarded the constitutional mandate on Topic: Illegal Recruitment; Unilateral decisions to alter the use of vessel from overseas service to
protection to Filipino overseas workers, and countencanced unwarranted discrimination when it coastwise shipping will not affect the validity of a perfected employment contract; Jointly and
ruled that petitioner cannot be a regular employee. severally liable with its principal for employee‘s claim; Manning agency, jointly and severallt liable
with its principal for employee‘s claim
HELD
In Brent School, Inc. v. Zamora, the Court ruled that seamen and overseas contract workers are Facts: Private Respondent Guerrero was hired by OSM for and in behalf of its principal, Phil
not covered by the term regular employment as defined in Article 280 of the Labor Code. The Carrier Shipping Agency Services Co. (PC-SLC) to board its vessel MN Princess Hoa as a Master
Court said in that case: Mariner for a contract period of ten (10) months. Under the said contract, his basic monthly salary
The question immediately provoked ... is whether or not a voluntary agreement on a fixed term or is US$1,070.00, US$220.00 allowance, US$321.00 fixed overtime, US$89 vacation leave pay per
period would be valid where the employee has been engaged to perform activities which are month for . . . 44 hours of work per week. Guerrero alleged that from the start of his work with
usually necessary or desirable in the usual business or trade of the employer. The definition seems MN Princess Hoa, he was not paid any compensation at all and was forced to disembark the vessel
non sequitur. From the premise that the duties of an employee entail activities which are usually sometime in January 1995 because he cannot even buy his basic personal necessities. For almost
necessary or desirable in the usual business or trade of the employer the conclusion does not seven (7) months, despite the services he rendered, no compensation or remuneration was ever
necessarily follow that the employer and employee should be forbidden to stipulate any period of paid to him. Hence, this case for illegal dismissal, non-payment of salaries, overtime pay and
time for the performance of those activities. There is nothing essentially contradictory between a vacation pay. OSM, for its part, alleged that the initial plan of the ship-owner was to use the vessel
definite period of an employment contract and the nature of the employees duties set down in that in the overseas trade, particularly the East Asian Growth Area, but changed its plans on the use of
contract as being usually necessary or desirable in the usual business or trade of the employer. the vessel to coastwise trade, thus, the crewmembers hired never left the Philippines.
The concept of the employees duties as being usually necessary or desirable in the usual business
or trade of the employer is not synonymous with or identical to employment with a fixed term. The LA rendered a Decision in favor of Guerrero, which held that there was a constructive
Logically, the decisive determinant in term employment should not be the activities that the dismissal of private respondent. It also dismissed petitioner's contention that there was a novation
employee is called upon to perform, but the day certain agreed upon by the parties for the of the employment contract. Petitioner and its principal, Philippine Carrier Shipping Agency
commencement and termination of their employment relationship, a day certain being understood Services, Co. (PC-SASCO), were ordered to jointly and severally pay Guerrero his unpaid salaries
to be that which must necessarily come, although it may not be known when. Seasonal and allowances, accrued fixed overtime pay, vacation leave pay and termination pay. On appeal,
employment, and employment for a particular project are merely instances of employment in the NLRC affirmed the LA's Decision. Afterwards, the CA dismissed the OSM‘s petition. Hence, this
which a period, were not expressly set down, is necessarily implied. Petition.
Accordingly, and since the entire purpose behind the development of legislation culminating in the
present Article 280 of the Labor Code clearly appears to have been, as already observed, to Issue:Whether or not the NLRC commit grave abuse of discretion in ruling in favor of Guerrero
prevent circumvention of the employees right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements conflicting with the Held:No. On behalf of its principal, PC-SASCO, petitioner does not deny hiring Guerrero as master
concept of regular employment as defined therein should be construed to refer to the substantive mariner. However, it argues that since he was not deployed overseas, his employment contract
evil that the Code itself has singled out: agreements entered into precisely to circumvent security became ineffective, because its object was allegedly absent. Based on the perfected contract,
of tenure. It should have no application to instances where a fixed period of employment was Guerrero complied with his obligations thereunder and rendered his services on board the vessel.
agreed upon knowingly and voluntarily by the parties, without any force, duress or improper Contrary to OSM's contention, the contract had an object, which was the rendition of service by
pressure being brought to bear upon the employee and absent any other circumstances vitiating private respondent on board the vessel. The non-deployment of the ship overseas did not affect
the validity of the perfected employment contract. Petitioner, as manning agent, is jointly and
39
severally liable with its principal, PC-SASCO, for private respondent's claim. This conclusion is in The power to suspend or cancel any license or authority to recruit employees for overseas
accordance with Section 1 of Rule II of the POEA Rules and Regulations. Joint and solidary employment is vested upon the Secretary of Labor and Employment. Article 35 of the Labor Code,
liability is meant to assure aggrieved workers of immediate and sufficient payment of what is due as amended, which provides:
them. The fact that Petitioner and its principal have already terminated their agency agreement
does not relieve the former of its liability. Art. 5. Suspension and/or Cancellation of License or Authority — The Minister of Labor
shall have the power to suspend or cancel any license or authority to recruit employees
for overseas employment for violation of rules and regulations issued by the Ministry of
56. Trans Action Overseas Corporation vs. Secretary of Labor; G.R. No.109583; Labor, the Overseas Employment Development Board, and the National Seamen Board, or
September 5, 1997 for violation of the provisions of this and other applicable laws, General Orders and Letters
Topic: Simple Illegal Recruitment of Instructions.

Facts: Trans Action Overseas Corporation (Trans Action), a private fee-charging employment In the case of Eastern Assurance and Surety Corp. v. Secretary of Labor, it was held that:
agency, scoured Iloilo City for possible recruits for alleged job vacancies in Hongkong. Private
respondents sought employment as domestic helpers through petitioner's employees. The The penalties of suspension and cancellation of license or authority are prescribed for violations of
applicants paid placement fees ranging from P1,000.00 to P14,000.00, but petitioner failed to the above quoted provisions, among others. And the Secretary of Labor has the power under
deploy them. Their demands for refund proved unavailing; thus, they were constrained to Section 35 of the law to apply these sanctions, as well as the authority, conferred by Section 36,
institute complaints against petitioner for violation of Articles 32 and 34(a) 1 of the Labor Code, as not only to "restrict and regulate the recruitment and placement activities of all agencies," but also
amended. to "promulgate rules and regulations to carry out the objectives and implement the provisions"
governing said activities. Pursuant to this rule-making power thus granted, the Secretary of Labor
Trans Action denied having received the amounts allegedly collected from respondents, and gave the POEA, 6 "on its own initiative or upon filing of a complaint or report or upon request for
averred that Aragon, whose only duty was to pre-screen and interview applicants, and the spouses investigation by any aggrieved person, . . (authority to) conduct the necessary proceedings for the
Domincil were not authorized to collect fees from the applicants. Accordingly, it cannot be held suspension or cancellation of the license or authority of any agency or entity" for certain
liable for the money claimed by respondents. Petitioner maintains that it even warned enumerated offenses including —
respondents not to give any money to unauthorized individuals.
1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or
On April 5, 1991, then Labor Undersecretary rendered the assailed decision ordering Trans Action services, or any fee or bond in excess of what is prescribed by the Administration, and
to pay, jointly and severally, claims of private respondents. Trans Action was held is liable for 2) any other violation of pertinent provisions of the Labor Code and other relevant laws,
twenty eight (28) counts of violation of Article 32 and five (5) counts of Article 34 (a) with a rules and regulations.
corresponding suspension in the aggregate period of sixty six (66) months. Considering however,
that under the schedule of penalties, any suspension amounting to a period of 12 months merits The Administrator was also given the power to "order the dismissal of the case of the suspension
the imposition of the penalty of cancellation, the license of Trans Action to participate in the of the license or authority of the respondent agency or contractor or recommend to the Minister
overseas placement and recruitment of workers was ordered cancelled. the cancellation thereof."

Trans Action filed its Motion for Temporary Lifting of Order of Cancellation. Finding the motion to This power conferred upon the Secretary of Labor and Employment was echoed in People v. Diaz,
be well taken, the Undersecretary provisionally lifted the cancellation of Trans Action‘s license viz.: A non-licensee or non-holder of authority means any person, corporation or entity which has
pending resolution of its Motion for Reconsideration. However, Trans Action‘s motion for not been issued a valid license or authority to engage in recruitment and placement by the
reconsideration was eventually denied for lack of merit and the order revoking its license was Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the
reinstated. POEA or the Secretary.

Issue: Whether or not the Secretary of Labor and Employment has jurisdiction to cancel or revoke 57. Catan vs. NLRC, G.R. No. 77279, April 15, 1988
the license of a private fee-charging employment agency Topic: Illegal Recruitment

Held: Yes, the Secretary of Labor and Employment has jurisdiction to cancel or revoke the license Petitioner, a duly licensed recruitment agency, as agent of Ali and Fahd Shabokshi Group,
of a private fee-charging employment agency. a Saudi Arabian firm, recruited private respondent to work in Saudi Arabia as a steelman.

40
 The term of the contract was for one year, from May 15,1981 to May 14, 1982. However, Respondent Virgilio then filed a complaint for illegal termination against petitioner agency and
the contract provided for its automatic renewal: ZAMEL with the POEA.

FIFTH: The validity of this Contract is for ONE YEAR commencing from the date the The Workers' Assistance and Adjudication Office of the POEA issued a decision in favor of the
SECOND PARTY assumes hill port. This Contract is renewable automatically if neither of the Virgilio and against the agency and ZAMEL, ordering the latter to pay, jointly and severally, to
PARTIES notifies the other PARTY of his wishes to terminate the Contract by at least ONE MONTH Virgilio the amounts representing the: (1) salaries corresponding to the unexpired portion of
prior to the expiration of the contractual period. [Petition, pp. 6-7; Rollo, pp. 7-8]. complainant's contract; (2) unpaid balance of complainant's vacation pay; (3) reimbursement of
salary deductions for return travel fund; and (4) 10% of the claimed amounts, as and for
The contract was automatically renewed when private respondent was not repatriated by attorney's fees.
his Saudi employer but instead was assigned to work as a crusher plant operator. On March 30, Petitioner aganecy then filed thru its counsel a motion for reconsideration which was treated as an
1983, while he was working as a crusher plant operator, private respondent's right ankle was appeal to the NLRC by the POEA. Petitioner agency alleged that the POEA erred in holding it
crushed under the machine he was operating. solidarity liable for ZAMEL's violation of respondent Virgilio‘s service agreement even if it was not a
party to the agreement.
On May 15, 1983, after the expiration of the renewed term, private respondent returned
to the Philippines. His ankle was operated on at the Sta. Mesa Heights Medical Center for which he In a resolution, the NLRC affirmed the POEA decision, holding that, as a duly licensed private
incurred expenses. On September 9, 1983, he returned to Saudi Arabia to resume his work. On employment agency, petitioner is jointly and severally liable with its foreign principal ZAMEL for all
May 15,1984, he was repatriated. claims and liabilities which may arise in connection with the implementation of the employment
contract or service.
Upon his return, he had his ankle treated for which he incurred further expenses. The
petitioner contends that their agency agreement were already severed at the time the injury The NLRC denied for lack of merit petitioner's motion for reconsideration. Hence, petitioner filed
occurred. the present petition captioned as "Petition for Review".

The filing of a "Petition for Review" under Rule 45 of the Rules of Court is not the proper means by
Issue:Whether or not the petitioner is still liable to the respondent for the injury he suffered. which NLRC decisions are appealed to the Supreme Court. It is only through a petition for
certiorari under Rule 65 that NLRC decisions may be reviewed and nullified on the
Held: Even if indeed petitioner and the Saudi principal had already severed their agency grounds of lack of jurisdiction or grave abuse of discretion amounting to lack or excess
agreement at the time private respondent was injured, petitioner may still be sued for a violation of jurisdiction. Nevertheless, in the interest of justice, the High Court opted to treat the instant
of the employment contract because no notice of the agency agreement's termination was given petition as if it were a petition for certiorari. Thus, after the filing of respondents' comments,
to the private respondent: petitioner agency‘s joint reply thereto, and respondents' rejoinders, the Court resolved to consider
the issues joined and the case submitted for decision.
Art 1921. If the agency has been entrusted for the purpose of contra with specified
persons, its revocation shall not prejudice the latter if they were not given notice thereof. [Civil ISSUES: Whether petitioner as a private employment agency may be held jointly and severally
Code].WHEREFORE, in view of the foregoing, the petition is DISMISSED for lack of merit, with liable with the foreign-based employer for any claim which may arise in connection with the
costs against petitioner. implementation of the employment contracts of the employees recruited and deployed abroad;

Whether sufficient evidence was presented by petitioner to establish the termination of private
58. ROYAL CROWN INTERNATIONALE vs. NATIONAL LABOR RELATIONS COMMISSI0N
respondent's employment for just and valid cause.
and VIRGILIO P. NACIONALES G.R. No. 78085 October 16, 1989
RULING:
FACTS: Petitioner Royal Crown Internationale, a duly licensed private employment agency,
recruited and deployed respondent Virgilio P. Nacionales for employment with ZAMEL as an 1. Yes, petitioner agency had voluntarily assumed solidary liability under the various contractual
architectural draftsman in Saudi Arabia. A service agreement was executed by private respondent undertakings it submitted to the Bureau of Employment Services. In applying for its license to
and ZAMEL. operate a private employment agency for overseas recruitment and placement, petitioner was
required to submit, among others, a document or verified undertaking whereby it assumed all
On February 13, 1984, ZAMEL terminated the employment of respondent Virgilio on the ground responsibilities for the proper use of its license and the implementation of the contracts of
that his performance was below par. For three successive days thereafter, he was detained at his employment with the workers it recruited and deployed for overseas employment. It was also
quarters and was not allowed to report to work until his exit papers were ready. Thereafter, he required to file with the Bureau a formal appointment or agency contract executed by the foreign-
was made to board a plane bound for the Philippines. based employer in its favor to recruit and hire personnel for the former, which contained a
41
provision empowering it to sue and be sued jointly and solidarily with the foreign principal for any HELD:YES. Illegal recruitment is specifically defined in Art. 38 of the Code thus -
of the violations of the recruitment agreement and the contracts of employment. Petitioner was
required as well to post such cash and surety bonds as determined by the Secretary of Labor to (a) Any recruitment activities, including the prohibited practices enumerated under Article
guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be
and conditions of employment as appropriate. deemed illegal and punishable under Article 39 of this Code x x x x

These contractual undertakings constitute the legal basis for holding petitioner, and other private (b) Illegal recruitment when committed by a syndicate or in large scale shall be
employment or recruitment agencies, liable jointly and severally with its principal, the foreign- considered an offense involving economic sabotage and shall be penalized in accordance
based employer, for all claims filed by recruited workers which may arise in connection with the with Article 39 hereof.
implementation of the service agreements or employment contracts. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three
2. No, thebasic principle in termination cases is that the burden of proof rests upon the (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful
employer to show that the dismissal is for just and valid cause, and failure to do so or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal
would necessarily mean that the dismissal was not justified and, therefore, was illegal. recruitment is deemed committed in large scale if committed against three (3) or more persons
Further, where the termination cases involve a Filipino worker recruited and deployed for overseas individually or as a group.
employment, the burden naturally devolves upon both the foreign-based employer and the In this case, all the five (5) complaining witnesses met each other for the first time at the
employment agency or recruitment entity which recruited the worker, for the latter is not only the house of Loreta Castaneda. They were not in any way acquainted with one another prior to that
agent of the former, but is also solidarily liable with its foreign principal for any claims or liabilities meeting save for Danilo de los Reyes and his brother-in-law Belarmino Torregrosa. They all came
arising from the dismissal of the worker. from different places, yet, they were all united in pointing to the Calonzo as the person who
In the case at bar, petitioner had indeed failed to discharge the burden of proving that private enticed them to apply for employment abroad. Of course, Calonzo could not explain what
respondent was terminated from employment for just and valid cause. Except for its allegation motivated the complaining witnesses to file these cases against him. The most that Calonzo could
that private respondent was caught on his way out of the office compound without permission, do on the witness stand was to deny all the charges against him. Alas, his denial is at most lame
petitioner had failed to allege and to prove with particularity its charges against private and cannot prevail over the positive assertions of the complaining witnesses. In People v.
respondent. The letter allegedly written by the Actg. Project Architect and the counter-affidavit of Villafuerte we ruled -
petitoner's General Manager merely stated that the grounds for the employee's dismissal were his x x x The absence of evidence as to an improper motive actuating the principal witnesses
unsatisfactory performance and various acts of dishonesty, insubordination and misconduct. But of the prosecution strongly tends to sustain no improper motive existed and their
the particular acts which would indicate private respondent's incompetence or constitute the above testimony is worthy of full faith and credit. Accused-appellant's denial cannot prevail over
infractions were neither specified nor described therein the positive assertions of complainants who had no motive to testify falsely against her
59. PEOPLE VS REYDANTECALONZO; GR NO. 115150-55; September 27, 1996 except to tell the truth.
TOPIC: ILLEGAL RECRUITMENT

FACTS: In February 1992, Danilo de los Reyes and his brother-in-law Belarmino Torregrosa met Illegal recruitment in large scale is committed when a person "(a) undertakes any
Reydante Calonzo. Calonzo told Danilo and Belarmino that he can help them find work in Italy if recruitment activity defined under Article 13(b) or any prohibited practice enumerated under
they can pay him P120, 000.00 as processing fee. Although both Danilo and Belarmino were able Article 34 of the Labor Code; (b) does not have a license or authority to lawfully engage in the
to pay the processing fee that Calonzo asked for, the latter was not able to send them to Italy. recruitment and placement of workers; and (c) commits the same against three or more persons,
Meanwhile, the three other complainants, Bernardo Miranda, Elmer Clamor and Hazel de Paula, individually or as a group." The testimony of complainants evidently showed that Calonzo was
were also lured by Calonzo‘s assurances that they would be sent to Italy after giving Calonzo a engaged in recruitment activities in large scale. Firstly, he deluded complainants into believing that
total of P120,000.00 for the processing of their application for work in Italy. But same with Danilo jobs awaited them in Italy by distinctly impressing upon them that he had the facility to send them
and Belarmino, they were only brought to Bangkok. When Danilo and Reydante tried to verify from for work abroad. He even showed them his passport to lend credence to his claim. To top it all, he
the POEA whether Calonzo is licensed or authorized to recruit, they found out that Calonzo was brought them to Bangkok and not to Italy. Neither did he have any arrangements in Bangkok for
not. Thus, they charged Calonzo with Illegal Recruitment. the transfer of his recruits to Italy. Secondly, POEA likewise certified that neither Calonzo nor R. A.
On his defense, Calonzo admits being engaged in the consultancy business through his C. Business Agency was licensed to recruit workers for employment abroad. Appellant admitted
R. A. C. Business Agency but denies any involvement in recruitment activities. this fact himself. Thirdly, appellant recruited five (5) workers thus making the crime illegal
recruitment in large scale constituting economic sabotage.
ISSUE: Whether or not Calonzo committed illegal recruitment

42
As regards the conviction of Calonzo for estafa on five (5) counts we ruled in People v. Turda, that court held that the warrant is null and void, because it must identify specifically the things to be
recruitment of persons for overseas employment without the necessary recruiting permit or seized.
authority from the POEA constitutes illegal recruitment; however, where some other crimes or 61. PEOPLE VS S. ANGELES; GR NO. 132376
felonies are committed in the process, conviction under the Labor Code does not preclude
punishment under other statutes. In People v. Romero, we said that the elements of estafa were: FACTS: Maria Tolosa Sardeña was working in Saudi Arabia when she received a call from her
(a) that the accused defrauded another by abuse of confidence or by means of deceit, and (b) that sister, Priscilla Agoncillo, who was in Paris, France. Priscilla advised Maria to return to the
damage or prejudice capable of pecuniary estimation is caused to the offended party or third Philippines and await the arrival of her friend, accused-appellant Samina Angeles, who will assist in
person. In the case before us, we are convinced that Calonzo defrauded complainants through processing her travel and employment documents to Paris, France. Heeding her sister‘s advice,
deceit. They were obviously misled into believing that he could provide them employment in Italy. Maria immediately returned to the Philippines.
As a result, the five (5) complainants who desperately wanted to augment their income and
improve their lot parted with their hard-earned money Marceliano Tolosa who at that time was in the Philippines likewise received instruction from his
60. SALAZAR VS ACHACOSO AND MARQUEZ, G.R. NO. 81510, MARCH 14, 1990 sister Priscilla to meet accused-appellant who will also assist in the processing of his documents for
Paris, France.
Facts: Rosalie Tesoro of Pasay City in a sworn statement filed with the POEA, charged petitioner
with illegal recruitment. Public respondent Atty. Ferdinand Marquez sent petitioner a telegram Although Samina did not deceive complainants into believing that she could find employment for
directing him to appear to the POEA regarding the complaint against him. On the same day, after them abroad, nonetheless, she made them believe that she was processing their travel documents
knowing that petitioner had no license to operate a recruitment agency, public respondent and parted with their money believing also that it would be used to pay plane tickets, hotel
Administrator Tomas Achacoso issued a Closure and Seizure Order No. 1205 to petitioner. It stated accommodations and other travel requirements.
that there will a seizure of the documents and paraphernalia being used or intended to be used as
the means of committing illegal recruitment, it having verified that petitioner has— (1) No valid ISSUE: Whether or not Angeles is guilty with four (4) counts of estafa and one (1) count of illegal
license or authority from the Department of Labor and Employment to recruit and deploy workers recruitment.
for overseas employment; (2) Committed/are committing acts prohibited under Article 34 of the
New Labor Code in relation to Article 38 of the same code. A team was then tasked to implement HELD: Accused-appellant posits that the prosecution did not present a single evidence to prove
the said Order. The group, accompanied by media men and Mandaluyong policemen, went to that she promised or offered any of the complainants‘ jobs abroad. Illegal recruitment is
petitioner‘s residence. They served the order to a certain Mrs. For a Salazar, who let them in. The committed when two (2) elements concur: 1) that the offender has no valid license or authority
team confiscated assorted costumes. Petitioner filed with POEA a letter requesting for the return of required by law to enable one to lawfully engage in recruitment and placement of workers; 2) that
the seized properties, because she was not given prior notice and hearing. The said Order violated the offender undertakes either any activity within the meaning of recruitment and placement
due process. She also alleged that it violated sec 2 of the Bill of Rights, and the properties were define under Article 13 (b), or any prohibited practices enumerated under Article 34.
confiscated against her will and were done with unreasonable force and intimidation. Article 13 (b), of the Labor Code provides, thus:
"Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting,
Issue: WON the Philippine Overseas Employment Administration (or the Secretary of Labor) can utilizing, hiring or procuring workers, and includes referrals, contract services, promising or
validly issue warrants of search and seizure (or arrest) under Article 38 of the Labor Code advertising for employment, locally or abroad, whether for profit or not: Provided, That any person
or entity which, in any manner, offers or promises for a fee, employment to two or more persons
Held: No. Under the new Constitution, ―. . . no search warrant or warrant of arrest shall issue shall be deemed engaged in recruitment and placement.
except upon probable cause to be determined personally by the judge after examination under
oath or affirmation of the complainant and the witnesses he may produce, and particularly To prove illegal recruitment, it must be shown that the accused-appellant gave complainants the
describing the place to be searched and the persons or things to be seized‖. Mayors and distinct impression that he had the power or ability to send complainants abroad for work such
prosecuting officers cannot issue warrants of seizure or arrest. The Closure and Seizure Order was that the latter were convinced to part with their money in order to be employed. To be engaged in
based on Article 38 of the Labor Code. The Supreme Court held, ―We reiterate that the Secretary the practice of recruitment and placement, it is plain that there must at least be a promise or offer
of Labor, not being a judge, may no longer issue search or arrest warrants. Hence, the authorities of an employment from the person posing as a recruiter whether locally or abroad.
must go through the judicial process. To that extent, we declare Article 38, paragraph (c), of the
Labor Code, unconstitutional and of no force and effect… The power of the President to order the Clearly, Samina Angeles defrauded complainants by falsely pretending to possess the power and
arrest of aliens for deportation is, obviously, exceptional. It (the power to order arrests) cannot be capacity to process their travel documents.
made to extend to other cases, like the one at bar. Under the Constitution, it is the sole domain of
the courts.‖ Furthermore, the search and seizure order was in the nature of a general warrant. The

43
Article 315 of the Revised Penal Code imposes the penalty of prison correctional in its maximum
period to prison mayor in its minimum period, if the amount of the fraud is over P 12,000.00 but
does not exceed P 22,000.00; if the amount exceeds P 22,000.00, the penalty shall be imposed in 63. PEOPLE vs. AVENDANO Topic: Illegal recruitment
its maximum period, adding one year for each additional P 10,000.00. However, the total penalty
which may be imposed shall not exceed twenty years. Facts: Six (6) separate information for Illegal Recruitment of some 38 workers were filled against
appellant Abelardo Avendaño y Crespo.
62. People vs Goce; G.R. No. 113161, August 29, 1995
Abelardo C. Avedaño is the Treasurer of MCBRAJ Agro-Industrial Development Company
Topic: Illegal Recruitment
(MAINDECO). The company is not licensed nor authorized to recruit workers for overseas
Facts: On January 1988, an information for illegal recruitment committed by a syndicate nd in employment.
large scale, punishable under Articles 38 and 39 of the labor code as amended by PD 2018, filed
against Dan and Loma Goce and Nelly Agustin in the RTC of Manila, alleging that in or about AVEDANO CONTENTION: the accused tried to show that MAINDECO, which was engaged in the
during the period comprised between May 1986 and June 25, 1987, both dates inclusive in the City construction business, was duly registered with the Securities and Exchange Commission:
of Manila, the accused conspired and represent themselves to have the capacity to recruit Filipino  that MAINDECO was invited by the government of Papua, New Guinea to a joint venture tuna
workers for employment abroad. industry, for which reason, it sold stocks to private individuals with the promise that they would be
sent to Papua, New Guinea should the joint venture materialize.
January 1987, a warrant of arrest was issued against the 3 accused bot none of them was  He denied having talked to the complainants regarding jobs in Papua, New Guinea, claiming
arrested. Hence, on February 1989, the RTC ordered the case archived but issued a standing that the officials who talked to them were the President, Vice-President and Manager and his duty
warrant os arrest against the accused. was only to issue receipts to the complainants upon payment of their shares in the corporation.
that the joint venture with Papua, New Guinea did not materialize because the President had
Thereafter, knowing the whereabouts of the accused, Rogelio Salado requested for a copy
already disappeared.
of the warrant of arrest and eventually Nelly Agustin was apprehended by the Paranaque Police.
that he joined MAINDECO because of the offer made to him by the Vice-President to go to
Agustin's counsel filed a motion to revive the case and requested to set a hearing for purpose of
Papua, New Guinea.
due process and for accused to immediately have her day in court. On the arraignment, Agustin
pleaded not guilty and the trial went on with four complainants testified for the prosecution and
receipts of the processing fees they paid. COMPLAINANTS CONTENTION: Among the 6 complaints which were consolidated, it appears,
among others, that:
Agustin for the defense asserted that Goce couple were licensed recruiters but denied her  the receipts issued by the accused to the complaints show that the payments made by them
participation in the recruitment and denied knowledge of the receipts as well. were in the form of trust deposit for one unit of share in the company.
the receipts were subsequently surrendered to the company in exchange of certificates of
On November 1993, trial court rendered judgment finding that Agustin as a principal in common share in MCARM Agro-Industrial Development Corporation, making the complainants
the crime of illegal recruitment in large scale with sentence of life imprisonment and pay stockholders of the corporation.
P100,000.00. one Henry Camba refused to surrender his receipt in exchange for a certificate of common share
as he was insisting that the money he paid be returned to him.
 while some of the complainants paid P5,500.00, the receipts issued to them reflected only the
Issues: Agustin appealed with the following arguments: (1) her act of introducing the amount of P4,500.00 as the balance of P1,000.00 was allegedly for the processing of their
complainants to the couple does not fall within the meaning of illegal recruitment and placement passport and physical examination.
under Article 13 in relation to Article 34 of the labor code; (2) there is no proof of conspiracy and  Some of the complainants underwent physical examination and made to attend orientation
(3) there is no proof that appellant offered/promised overseas employment to the complainants. seminars while waiting for their departure to Papua, New Guinea. The complainants finally got
tired of waiting for the promised employment abroad and filed their complaints against the
accused.
Ruling: The testimonial evidence shows that Agustin indeed further committed acts constitutive of
illegal recruitment because, the complainants had a previous interview with Agustin (as employee TRIAL COURT rendered decision convicting Avendano. Hence, this appeal before the SC.
of the Goce couple) about fees and papers to submit that may constitute as referral. Agustin
collected the payments of the complainants as well as their passports, training fees, medical tests ISSUE: Whether Avendano is guilty of the crime of illegal recruitment
and other expenses. On the issue of proof, the court held that the receipts exhibited by the
claimants are clear enough to prove the payments and transaction made. SC: YES!
44
 (c) Any person who is neither a licensee nor a holder of authority under this Title found
The appeal has no merit. violating any provision thereof or its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment of not less than four years nor more
The trial court correctly fount Avendaño to have conspired with his co-accused Carmelito Soriano, than eight years or a fine of not less than P20,000 nor more than P100,000 or both such
Jr., Manuel Calanog and Renato M. Soriano, to illegally recruit some 38 persons for overseas imprisonment and fine, at the discretion of the court;
employment, charging and collecting a fee of P5,500.00 from each job applicant although they
(the accused) did not have the required license and authority from the Department of Labor to (d) If the offender is a corporation, partnership, association or entity, the penalty shall be
engage in recruiting workers for overseas employment. They defrauded the job applicants of the imposed upon the officer or officers of the corporation, partnership, association or entity
"fees" (P5,500.00) which the latter paid for the false hope of obtaining employment in Papua, New responsible for violation; and if such officer is an alien, he shall, in addition to the penalties
Guinea, which was never realized. Appellant's pretext that the fee of P5,500.00 paid by each job herein prescribed, be deported without further proceedings; (Emphasis supplied)
applicant was not a placement fee but payment for a share of stock in MAINDECO, supposedly a
prerequisite for the deployment of the "stockholder" in Papua, New Guinea, must be rejected for In Crim. Case Nos. 6113-MN and 6114-MN where Avendaño acted in conspiracy with his co-
the simple reason that those who purchased the "shares" did not intend to invest, but to obtain a accused to fleece three (3) job applicants in each case of their placement fees for non-existent
job placement, in Papua, New Guinea. They were not investors but job seekers. Further proof that overseas jobs, and in Crim, Case No. 6125-MN where they victimized five (5) persons, the crimes
they were being swindled is that those who paid P5,500.00 each received a receipt for only committed were illegal recruitment by a syndicate (Art. 38 Labor Code). When illegal recruitment is
P4,500.00 from the appellant who informed them that the unreceipted amount of P1,000.00 was committed by a syndicate or in large scale, it becomes an offense involving economic sabotage
to pay for their medical examination and the processing of their passports, although no passports (Art. 38, Labor Code) and shall be penalized with life imprisonment and a fine of P100,000 (Art.
were ever issued to them. XXX 39, par. [a], Labor Code ).

Appellant and his co-accused committed Illegal Recruitment on a Large Scale as defined and In Crim. Case No. 6131-MN where only two persons were defrauded, and in Crim. Case Nos. 6143-
penalized in Articles 38(b) and 39(a) of the Labor Code, because they had victimized more than MN and 6148-MN where there was only one victim in each case, the crimes committed were
three (3) job applications — thirty eight (38) in fact. simple illegal recruitment penalized in par. (c), Art. 39.

Art. 38. Illegal Recruitment. — (a) Any recruitment activities, including the prohibited WHEREFORE, as the trial court did not commit any reversible error in finding Avendaño guilty of
practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or large scale illegal recruitment in Criminal Cases Nos. 6113, 6114 and 6125, and of simple illegal
non-holders of authority shall be deemed illegal and punishable under Article 39 of this recruitment in Criminal Case Nos. 6131, 6143 and 6148, and as the penalties imposed are in
Code. This Ministry of Labor and Employment or any law enforcement officers may initiate accordance with the law, the appealed decision is hereby AFFIRMED in toto.
complainants under this Article.
64. People v. Bodozo, 215 SCRA 33, G.R. No. 96621, October 21, 1992
(b) Illegal recruitment when committed be a syndicate or in large scale shall be considered
an offense involving economic sabotage and shall be penalized in accordance with Article
Facts:The spouses Bodozo were found guilty of illegal recruitment by the RTC Manila.
39 hereof.
It appears that the spouses recruited and collected sums of money for which they issued receipts
for possible employment in Singapore and Saudi Arabia.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or confederating with one another in carrying out any
The spouses appealed the decision alleging that they merely aided in the recruitment and were not
unlawful or illegal transaction, enterprise or scheme defined under the first paragraph
the recruiters themselves. The spouses alleged that there are true and licensed recruiters that they
hereof. Illegal recruitment is deemed committed in large scale if committed against (3) or
worked for such as Belen Hernandez, a manager of Mcgleo International Management and Service
more persons individually or as a group."
Contractor a duly registered and licensed recruiter, and Jing Evangelista of Ultragen, Inc.
Art. 39. Penalties. — (a) The penalty of life imprisonment an a fine of One Hundred Issue/Held:WoN the spouses Bodozo are guilty of qualified illegal recruitment? YES
Thousand Pesos (P100,000) shall be imposed if illegal recruitment constitutes economic
sabotage as defined herein: Ratio:
xxx xxx xxx 1) The crime of illegal recruitment is defined under Article 38 (a) in relation to Article 13 (b)
and 34, and penalized under Article 39 of the Labor Code as amended by PD 1920 and PD

45
2018. other hand, accused-appellant Joey Bodozo claimed that he, too, was forced to
a. Art. 38. Illegal Recruitment. — (a) Any recruitment activities, including the issue and sign Exhibits L and E at Kalaw Street, Ermita, Manila because private
prohibited practices enumerated under Article 34 of this Code, to be undertaken complainants Angelino Obiacoro and Domingo Obiacoro would kill him.
by the non-licensees or non-holders of authority shall be deemed illegal and i. Such allegations are self-serving.
punishable under Article 39 of this Code. The Ministry of Labor and Employment ii. No evidence of force was represented by accused-appellant Nimfa
or any law enforcement officer may initiate complaints under this Article. Bodozo to bolster her claim that she was forced except to state that she
(Emphasis supplied.) was afraid of private complainants' anger.
b. Under Article 13 (b) Recruitment and Placement is defined as: h. Lastly , under Article 38 of the Labor Code, as amended, the crime of illegal
i. Any act of canvassing, enlisting, contracting transporting, utilizing, hiring recruitment is qualified when the same is committed against three (3) or more
or procuring workers and includes referrals, contract services, promising persons, individually or as a group.
or advertising for employment, locally or abroad, whether for profit or i. Accused-appellant having committed the crime of illegal recruitment
not. Provided that any person or entity which, in any manner, offers or against Prudencio Renon, Fernando Gagtan, Angelino Obiacoro and
promises for a fee employment to two or more persons shall be deemed Ludovico Gagtan, the penalty of life imprisonment and the fine of
engaged in recruitment and placement. (Emphasis supplied.) P100,000.00 (Article 39 (a) Labor Code of the Philippines as amended)
c. It should be noted that any of the acts mentioned in Article 13 (b) can lawfully be was correctly imposed by the trial court.
undertaken only by the licensees or holders of authority to engage in the
recruitment and placement workers. 65. PEOPLE VS. TAN TIONG MENG, GR NOS. 120835-40, APRIL 10, 1997
i. The crime of illegal recruitment has two elements:
1. The offender is a non-license or non-holder of authority to
FACTS: Six(6) complainants went to Borja‘s house to meet accused, Tan Tiong Meng, allegedly a
lawfully engage in the recruitment or placement of workers; and
job recruiter . Accused promised to complainants that they could get jobs as factory worker in
2. That the offender undertakes either any recruitment activities
Taiwan with a monthly salary of P20K. Accused required them to submit their passports, bio-data
defined under Article 13 (b), or any prohibited practices
and their high school diploma as well as to pay P15K each for placement and processing fees.
enumerated under Article 34 of the Labor Code.
Accused kept on promising to complainants that they would be able to leave, but the promises
d. In this case at bar, it is undisputed that accused-appellants Joey Bodozo and
were never fulfilled. When complainants knew that accused was not a licensed or authorized
Nimfa Bodozo are neither licensed not authorized to recruit workers for overseas
overseas recruiter, they filed for complaints for illegal recruitment and estafa against accused.
employment as shown by the certification issued by the Philippine Overseas
Employment Administration (POEA).
e. Accused-appellants not only asked private complainants to fill up application Accused contend that he merely acted as a collector of money for the principal recruiter Borja who
forms but also to submit to them their NBI clearances, passports and medical made the representations that he(accused) could give the applicants jobs in Taiwan.
certificates.
i. In addition thereto, accused-appellants collected payment for processing ISSUE: WON accused is guilty of the offense of illegal recruitment in large scale and 6 counts of
fee and other sundry expenses from private complainants, all estafa.
f. Accused-appellants point to a certain as the persons who were responsible for
the recruitment of private complainants. If such allegations were true, why did HELD: YES. Circumstances belie the version of accused: (1) Mascardo(one of the complainants)
accused-appellants not present any one of them as witness to corroborate their testified that accused could no longer return the money because he had already sent it to his
claim? brother-in-law in Taiwan; (2) all the receipts issued to complainants were signed by accused; (3)
i. For reasons only known to them, they chose to suppress such testimony Accused admitted that he and his wife are respondents in about 70 cases of estafa and illegal
as evidence and instead risked the adverse inference and legal recruitment; (4) complainants pointed to Tan and not Borja as the one who had represented to
presumption that "evidence wilfully suppressed would be adverse if them that he could give them jobs in Taiwan.
produced.‖
ii. Besides, if it was Belen Hernandez and Jing Evangelista who were the The accused‘ acts of accepting placement fees from job applicants and representing to said
recruiters, why did accused-appellants issue the receipts acknowledging applicants that he could get them jobs in Taiwan constitute recruitment and placement under the
payments made by private complainants? Labor Code and is deemed illegal and punishable under Art. 39 of the Labor Code.
g. Accused-appellants Nimfa Bodozo alleged that she was forced to issue and sign
receipts marked as Exhibits J and N because private complainants Prudencio
The offense committed against the 6 complainants is illegal recruitment in large scale. Accused is
Renon and Fernando Gagtan were mad and refused to leave the house. On the
also guilty of 6 separate crimes of estafa. A person convicted for illegal recruitment under the
46
Labor Code can be convicted for violation of the RPC provisions on estafa provided the elements of prision correccional as minimum, to six (6) years, five (5) months and eleven (11) days
are present: (1) the accused defrauded another by abuse of confidence or by means of deceit; and of prision mayor as maximum for each count of estafa, and pay each complainant the amount of
(2) damage or prejudice capable of pecuniary estimation is caused to the offended party or third P40,000.00 as civil indemnity.
person
Accused appealed to the Court of Appeals which rendered an adverse decision. Hence this present
66. People vs. Bautista G.R. No. 113547 February 9, 1995 case before the Supreme Court.

Topic: Illegal Recruitment; Estafa Issue: The issue boils down to whether or not reasonable doubt exists to warrant the acquittal of
appellant Anita Bautista.
Sometime in August 1991, accused Anita Bautista approached Romeo Paguio at the latter's
restaurant at 565 Padre Faura St., Manila, and offered job openings abroad. At that time, Paguio Held: No. The Labor Code defines recruitment and placement as referring to "any act of
had relatives who were interested to work abroad. Accused, who also operated a restaurant canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes
nearby at Padre Faura, informed Paguio that she knew somebody who could facilitate immediate referrals, contract services, promising or advertising for employment, locally or abroad, whether
employment in Taiwan for Paguio's relatives. Accused Anita Bautista introduced Rosa Abrero to for profit or not: Provided that any person or entity which, in any manner, offers or promises for a
Paguio. Abrero informed him that the applicants could leave for Taiwan within a period of one- fee employment to two or more persons shall be deemed engaged in recruitment and
month from the payment of placement fees. They informed Paguio that the placement fee was placement." 8
P40,000.00 for each person. Paguio contacted his relatives, complainants Remigio Fortes and
Dominador Costales who were his brothers-in-law, and Anastacio Amor, a cousin, who lost no time It is settled that the essential elements of the crime of illegal recruitment in large scale are:
raising the needed money and gave the same to Paguio. The three were to work as factory (1) the accused engages in the recruitment and placement of workers, as defined under Article 13
workers and were to be paid $850.00 monthly salary each. Paguio gave Rosa Abrero P20,000.00, (b) or in any prohibited activities under Article 34 of the Labor Code; (2) accused has not complied
which would be used in following up the papers of the complainants; later he gave accused with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to
P40,000.00 and P60,000.00 in separate amounts, totalling P100,000.00, as the remaining balance. the securing of a license or an authority to recruit and deploy workers, either locally or overseas;
Abrero and accused Bautista promised Paguio and complainants that the latter could leave for and (3) accused commits the same against three (3) or more persons, individually or a group. 9
Taiwan before September 25, 1991. As September 25, 1991 approached, accused Bautista
informed Paguio and complainants that there was a delay in the latter's departure because their
For her exculpation, appellant denied she recruited complainants for employment abroad. She
tickets and visas had not yet been released. Accused re-scheduled the complainants' departure to
claimed Romeo Paguio was the one who approached her and asked for someone who could help
October 10, 1991. Came October 10, 1991, and complainants were still not able to leave. Paguio
his relatives work abroad. She thus introduced Rosa Abrero, a regular customer at her restaurant,
then required accused Bautista to sign the "Acknowledgment Receipt," dated October 11, 1991, in
to Paguio. In turn, Paguio introduced Abrero to complainants in their subsequent meeting. Further,
which accused admitted having received the sum of P100,000.00 from Paguio, representing
appellant testified she was present during the recruitment of complainants since their meeting with
payment of plane tickets, visas and other travel documents (Exhibit A). Paguio asked accused to
Abrero was held at her restaurant. Appellant likewise stressed she did not receive the amount of
return complainants' money; accused, however, promised that complainants could leave for
P100,000.00, as stated in the Acknowledgment Receipt, dated October 11, 1991, but merely
Taiwan before Christmas. From POEA, Paguio secured a certification, dated January 9, 1992
acknowledged that said sum was received by Rosa Abrero from Romeo Paguio.
attesting that Annie Bautista and Rosa Abrero are not licensed or authorized to recruit workers for
overseas employment (Exhibit B). Complainants Fortes, Amor and Costales, as well as Paguio,
gave their written statements at the Office of the Assistant Chief Directorial Staff for Intelligence of Appellant's active participation in the recruitment process of complainants belies her claim of
the WPDC, complaining about their being victims of illegal recruitment by Rosa Abrero and Annie innocence. Complainants' recruitment was initiated by appellant during her initial meeting with
Bautista (Exhibits C, D, E and F). Romeo Paguio. She gave the impression to Romeo Paguio and the complainants that her cohort,
Rosa Abrero, could send workers for employment abroad. She introduced Rosa Abrero to Romeo
Paguio. Both women assured the departure of complainants to Taiwan within one month from
Four (4) separate Informations 1 were filed before the Regional Trial Court of Manila (Branch XLI)
payment of the placement fee of P40,000.00 per person. They even claimed that complainants
against accused ANITA BAUTISTA y LATOJA, charging her with the crimes of Illegal Recruitment
would work as factory workers for a monthly salary of $850.00 per person. Moreover, it was
In Large Scale 2 and Estafa. 3
appellant who informed Romeo Paguio that complainants' scheduled trip to Taiwan would be on
October 10, 1991, instead of the original departure date of September 25, 1991, due to some
The court rule against the accused, rulingguilty as charged. In the illegal recruitment case, she problems on their visas and travel documents.
was meted the penalty of life imprisonment and ordered to pay P 100,000.00 as fine. In the estafa
cases, she was sentenced from two (2) years, eight (8) months and twenty one (21) days

47
Her close association with Rosa Abrero is further strengthened by the Acknowledgment Receipt, Considering the foregoing, the appellant court correctly imposed the indeterminate penalty of four
dated October 11, 1991, which was prepared by Romeo Paguio for the protection of complainants. (4) years and two (2) months of prision correccional, as minimum, to nine (9) years of prision
Said receipt shows that appellant collected the P100,000.00 for and in behalf of Rosa Abrero, and mayor, as maximum.
bolsters Romeo Paguio's allegation that he gave P20,000.00 to Rosa Abrero, while the rest was
received by appellant. It is uncontroverted that appellant and Rosa Abrero are not authorized or WHEREFORE, premises considered, the decision of the Court of Appeals, finding appellant ANITA
licensed to engage in recruitment activities. 10 Despite the absence of such license or authority, BAUTISTA guilty beyond reasonable doubt of the crimes of Illegal Recruitment in Large
appellant participated in the recruitment of complainants. Since there are at least three (3) victims Scale (Criminal Case Nos. 92-102377) and Estafa (Criminal Case Nos. 92-102378, 92-102379, 92-
in this case, appellant is correctly held criminally liable for illegal recruitment in large scale. 11 102380) is AFFIRMED. No Costs.

As to the appellant's culpability under the Revised Penal Code, specifically Article 315 thereof,
inasmuch as her conviction for offenses under the Labor Code does not avert punishment for 67. PEOPLE OF THE PHILIPPINES vs. NELIA CORONACION y NOQUE and EDUARDO
offenses punishable by other laws. 12 AQUINO y AQUINO G.R. No. 97845 September 29, 1994

The elements of estafa are as follows: (1) that the accused defrauded another (a) by abuse of FACTS: Nelia Coronacion, Eduardo Aquino, and June Mendez were charged with the crime of
confidence, or (b) by means of deceit; and (2) that damage or prejudice capable of pecuniary illegal recruitment in large scale and by a syndicate.
estimation is caused by the offended party or third party.
The said accused representing themselves to have the capacity to contract, enlist, and
In the case at bench, it is crystal clear that complainants were deceived by appellant and Rosa transport Filipino workers for employment abroad, for a fee, recruit and promise employment/job
Abrero into believing that there were, indeed, jobs waiting for them in Taiwan. The assurances placement in Saudi Arabia to the complainants, without securing the required license or authority.
given by these two (2) women made complainants part with whatever resources they have, in
exchange for what they thought was a promising job abroad. Thus, they sold their carabaos,
The trial court found the accused guilty as charged. After promulgation of judgment, both
mortgaged or sold their parcels of land and even contracted loans to raise the much needed
accused appealed.
money, the P40,000.00 placement fee, required of them by accused and Rosa Abrero.

ISSUE: Whether the crime of illegal recruitment in large scale was committed by the accused.
The penalty for estafa depends on the amount defrauded. Article 315 of the Revised Penal Code
provides: "the penalty of prision correccional in its maximum period to prision mayor in its
minimum period (or imprisonment ranging from 4 years, 2 months and 1 day to 8 years), if the HELD: The crime of illegal recruitment in large scale is committed when a person (a) undertakes
amount of the fraud is over P12,000.00 but does not exceed P22,000.00 pesos, and if such any recruitment activity defined under Article 13(b) or any prohibited practice enumerated under
amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in Article 34 of the Labor Code; (b) does not have a license or authority to lawfully engage in the
its maximum period (6 years, 8 months and 21 days to 8 years), adding one year for each recruitment and placement of workers; and (c) commits the same against three or more persons,
additional P10,000.00 pesos; but the total penalty which may be imposed shall not exceed twenty individually or as a group.
years. In such case, and in connection with the accessory penalties which may be imposed and for
the purpose of other provisions of this Code, the penalty shall be termed prision In the case at bench, the presence of the second and third elements is not disputed. The
mayor or reclusion temporal, as the case may be. appellants are neither licensees or holders of any authority from POEA to engage in recruitment
and placement activities as evidenced by a certification of the said agency dated September 8,
The amount defrauded in such estafa case (Criminal Case Nos. 92-102378, 92-102379, 92- 1987. It was likewise established that the private complainants were unaware of the appellants'
102380) is P 40,000.00. As prescribed in Article 315, supra, the penalty should be imposed in lack of authority when they transacted business with them. It was only later, upon inquiry at
the maximum period (6 years, 8 months and 21 days to 8 years) plus one (1) year, there being POEA, that they discovered the appellants' lack of authority. Finally, the number of private
only one (1) P10,000.00 in excess of P22,000.00. Applying the Indeterminate Sentence Law, the complainants, certainly more than three, is beyond dispute.
maximum penalty should be taken from the aforesaid period, while the minimum term of the
indeterminate penalty shall be within the range of the penalty next lower in degree, that is — Now, we resolve whether the first element of the offense of illegal recruitment, i.e., that
prision correccional in its minimum and medium periods which has a duration of 6 months, 1 day the appellants undertook any of the recruitment activities defined under Article 13(b) of the Labor
to 4 year and 2 months. Code, as amended, or any of the prohibited activities defined under Article 34 of the same Code,
was successfully established by the prosecution.

48
To satisfy the first element, the prosecution presented the testimonies of the complainants clearly TOPIC: Book One – Pre-Employment
pointing to the appellants as two of the three persons who promised them employment abroad
and who collected and received varying amounts from them. II. ILLEGAL RECRUITMENT (Art. 38-39 LC; R.A. 8042 Migrant Workers and Overseas
Filipinos Act of 1995 as amended by R.A. 10022)
68. People vs Comia (GR No. 109761; September 1, 1994) F. Liabilities
(iii) Pre-Termination of Conduct of Migrant Workers and Money Claims
Topic: Illegal Recruitment Considered a Crime Involving Economic Sabotage (Large Scale)
FACTS: Petitioner Douglas Millares and Rogelio were employed by private respondent ESSO
Facts: For falsely representing herself to have the capacity and power to contract, enlist, and International Shipping Company LTD. (Esso International, for brevity) through its local manning
recruit workers for employment abroad, Carmelita Puertollano Comia was charged with illegal agency, private respondent Trans-Global Maritime Agency, Inc. (Trans-Global, for brevity) on
recruitment in large scale under paragraphs (a) and (b) of Article 38, in relation to paragraph (a) November 1968 and June 1969, respectively.
of Article 39, of the Labor Code. After trial on the merits, the court promulgated on 4 February
1993 its decision finding the accused guilty beyond reasonable doubt of the offense charged and On separate occasions, the petitioners wrote to Michael J. Estaniel, President of private
sentencing her to suffer the penalty of life imprisonment and to pay a fine of P100,000.00. respondent Trans-Global, requesting for the approval of their request for leave of absence, which
were subsequently approved.
Issue: Whether or not the trial court erred in convicting the accused-appellant Comia for illegal
recruitment despite the failure of the prosecution to prove her guilt beyond reasonable doubt? Also, each of them filed their intentions to avail of the optional retirement plan under the
Consecutive Enlistment Incentive Plan (CEIP) considering that they had already rendered more
Held: No. There is illegal recruitment in large scale when a person (a) undertakes any than twenty (20) years of continuous service. Both petitioners‘ request for optional retirement
recruitment activity defined under Article 13(b) or any prohibited practice enumerated under were denied: (1) employed on a contractual basis; (2) contract of enlistment (COE) did not provide
Article 34 of the Labor Code; (b) does not have a license or authority to lawfully engage in the for retirement before the age of sixty (60) years; and (3) did not comply with the requirement for
recruitment and placement of workers; and (c) commits the same against three or more persons, claiming benefits under the CEIP, i.e., to submit a written advice to the company of his intention to
individually or as a group. terminate his employment within thirty (30) days from his last disembarkation date.
In this case, the presence of the second and third elements is beyond dispute. That the And on September 1989, petitioners were informed that they were dropped from the
accused is not authorized by the Philippine Overseas Employment Administration (POEA) to roster of crew members effective September 1, 1989, due to ―abandonment‖ and "unavailability
engage in the recruitment and placement of workers is evidenced by a certification of the said for contractual sea service".
agency dated 1 October 1991. In fact, to abbreviate the proceedings, the parties duly stipulated
on the due issuance, authenticity, and truth of the said certification.There are no less than four On October 5, 1989, petitioners Millares and Lagda filed a complaint-affidavit for illegal
complainants who patiently endured the rigors of trial to denounce the accused and expose her dismissal and non-payment of employee benefits against private respondents Esso International
illegal recruitment activities. and TransGlobal, before the POEA.

Proffered to satisfy the first element of the crime were the testimonies of the The petitioners claimed that they performed activities which are usually necessary or
complainants pointing to the accused as the person who promised them employment abroad and desirable in the usual business or trade of private respondents, hence, they should be considered
who collected and received various amounts from them. as regular employees pursuant to Article 280, Par. 1 of the Labor Code. Also, petitioners have
rendered over twenty (20) years of service; and that they were recipients of Merit Pay which is an
Moreover, this matter essentially involves the credibility of the complainants, the best express acknowledgment by the private respondents that petitioners are regular and not just
judge of which is the trial court. It has long been settled that when the issue is one of credibility of contractual employees.
witnesses, appellate courts will generally not disturb the findings of the trial court, considering that
the latter is in a better position to decide the question, having heard the witnesses themselves and The private respondents, on the other hand, contend that Art. 280 is not applicable as
observed their deportment and manner of testifying during the trial, unless it plainly overlooked what applies is the POEA Rules and Regulations Governing Overseas Employment; a dismissed
certain facts of substance and value that, if considered, might affect the result of the case. 19Since seafarer is not entitled to back wages and reinstatement, that being not allowed under the POEA
the trial court found the positive declarations of the complainants more credible than the sole rules and the Migrant Workers Act; and, (g) petitioners are not entitled to claim the total amount
testimony of the accused denying the transactions, there must be a well-founded reason in order credited to their account under the CEIP.
to deny great weight to its evaluation of the complainant's testimonies. The accused has failed to
provide that reason. ISSUES: I. Are petitioners regular or contractual employees whose Employments are terminated
every time their contracts of Employment expire?
69. Millares vs. NLRC; G.R. No. 110524; July 29, 2002

49
 II. Assuming that petitioners are regular employees, were they dismissed without just respondents of their desire to avail of the optional early retirement policy, which
cause so as to be entitled to reinstatement and back wages, including payment of 100% of their they believed in good faith to exist.‖
total credited contributions to the consecutive Enlistment incentive plan (CEIP)?
With no ground for disqualifying the petitioners, the private respondents cannot now renege on
HELD: I. Seafarers are considered contractual employees. They cannot be considered as regular their commitment under the CEIP to reward deserving and loyal employees as the petitioners in
employees under Article 280 of the Labor Code. Their employment is governed by the contracts this case.
they sign every time they are rehired and their employment is terminated when the contract
expires. Their employment is contractually fixed for a certain period of time. They fall under the 70. PENTAGON INTERNATIONAL SHIPPING, INC vs. WILLIAM B. ADELANTAR; [G.R.
exception of Article 280 whose employment has been fixed for a specific project or undertaking No. 157373. July 27, 2004]
the completion or termination of which has been determined at the time of engagement of the On August 16, 1997, respondent William B. Adelantar was hired by Dubai Ports Authority of Jebel
employee or where the work or services to be performed is seasonal in nature and the Ali under an employment contract (first contract) which provided for an unlimited period of
employment is for the duration of the season. employment with a monthly salary of five thousand five hundred dirhams (Dhs 5,500).
In this jurisdiction and as clearly stated in the Coyoca case, Filipino seamen are governed On September 3, 1997, Adelantar and petitioner Pentagon International Shipping, Inc.
by the Rules and Regulations of the POEA. The Standard Employment Contract governing the (Pentagon), for and in behalf of Dubai Ports Authority of Jebel Ali, entered into a Philippine
employment of All Filipino seamen, particularly in Part I, Sec. C specifically provides that the Overseas Employment Administration (POEA) standard employment contract (second contract),
contract of seamen shall be for a fixed period. And in no case should the contract of seamen be this time providing for a 12-month period with basic monthly salary of US$380.00 and fixed
longer than 12 months. overtime pay of US$152.00.
Petitioners make much of the fact that they have been continually re-hired or their Upon completion of his probationary period on April 5, 1998, Adelantars basic salary was
contracts renewed before the contracts expired, making them contractual employees. Undeniably, increased to five thousand eight hundred ninety dirhams (Dhs 5,890), while his overtime pay was
the circumstance of continuous re-hiring is dictated by practical considerations that experienced increased to two thousand three hundred fifty-six dirhams (Dhs 2,356) effective April 1, 1998.
crew members are more preferred. Petitioners were only given priority or preference because of
their experience and qualifications but this does not detract the fact that herein petitioners are On June 11, 1998, however, the management barred Adelantar from entering the port due to
contractual employees. They cannot be considered regular employees. a previous dispute with his superior. He was asked to hand in his health and employment card. On
the same date, he received a letter from his employer, stating that he was being terminated for
Petitioners' employment has automatically ceased upon the expiration of their contracts of assaulting his superior officer, although he was promised employment in another company.
enlistment (COE). Since there was no dismissal to speak of, it follows that petitioners are not
entitled to reinstatement or payment of separation pay or back wages, as provided by law. Adelantar was eventually repatriated after nine (9) months and seven (7) days of service.
After almost a year of waiting with no work forthcoming, Adelantar filed a complaint for illegal
II. With respect to the benefits under the Consecutive Enlistment Incentive Plan (CEIP), dismissal with money claim against Pentagon International Shipping, Inc. with the NLRC, docketed
we hold that petitioners are still entitled to receive 100% of the total amount credited to him as NLRC NCR OFW (M) 99-05-0693.
under the CEIP despite declaring petitioners contractual employees.
The Labor Arbiter found that the dismissal of Adelantar was illegal. Consequently, he ordered
The CEIP was formulated to entice seamen to stay long in the company. And to reward Pentagon to pay Adelantar the amount of Dhs 24,738.00 representing the latters three (3) months
those who remained loyal, if eligible. Such right to the benefits is vested upon them upon their basic salary inclusive of overtime pay. All other claims were denied for lack of merit. [3]
eligibility to the program.
Adelantar appealed to the NLRC arguing that the Labor Arbiter erred in granting backwages
In a March 14, 2000 Decision, the Court, however, found that petitioners Millares and of only three (3) months and in not granting attorneys fees, moral and exemplary damages and
Lagda were not guilty of "abandonment" or "unavailability for contractual sea service," The Court reinstatement.
stated:
The NLRC affirmed the Labor Arbiters decision and held that under Section 10 of R.A. 8042,
―The absence of petitioners was justified by the fact that they secured the otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, an illegally
approval of private respondents to take a leave of absence after the termination dismissed contract worker is entitled to the salaries corresponding to the unexpired portion of his
of their last contracts of enlistment. Subsequently, petitioners sought for contract, or for three (3) months for every year of the unexpired term, whichever is less. Thus, the
extensions of their respective leaves of absence. Granting arguendo that their NLRC awarded backwages to Adelantar equivalent to three (3) months of his basic salary, but
subsequent requests for extensions were not approved, it cannot be said that exclusive of overtime pay.[4]
petitioners were unavailable or had abandoned their work when they failed to
Aggrieved, Adelantar filed a petition for certiorari with the Court of Appeals.
report back for assignment as they were still questioning the denial of private
50
 On September 26, 2002, the Court of Appeals rendered judgment modifying the amounts Proceeding from the premise that the first contract, providing for an unlimited period of
awarded by the Labor Arbiter and the NLRC. The Court of Appeals awarded full backwages to employment, is the applicable contract rather than the POEA-sanctioned second contract, the
respondent computed from the time of the dismissal up to the finality of the decision. It ruled that Court of Appeals concluded that Section 10 of R.A. No. 8042 is not applicable because there will be
Section 10 of R.A. No 8042 is not applicable in this case because said provision only contemplates no basis by which to determine the number of years within which the grant of salaries will be
a fixed period of employment. Moreover, Article 279 of the Labor Code should apply and not based.[7] Stated differently, Section 10 of R.A. No. 8042, or The Migrant Workers and
Section 10 of R.A. No. 8042, considering that Adelantars first contract provided for an unlimited Overseas Filipinos Act of 1995, is not applicable in this case because said provision only
period of employment. contemplates a fixed period of employment while the first contract provides for an unlimited period
of employment. Section 10 of R.A. No. 8042 provides:
Issues:Pentagon International Shipping, Inc. filed the instant petition for review on certiorari
raising the following arguments:
In case of termination of overseas employment without just, valid or authorized cause as defined
ITHE COURT OF APPEALS ERRED IN (a) COMPLETELY IGNORING AND REFUSING TO FOLLOW THE by law or contract, the worker shall be entitled to the full reimbursement of his placement fee with
RULING OF THE SUPREME COURT IN THE LANDMARK CASE OF MILLARES, et al. vs. NLRC, et al., G.R. interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his
NO. 110524, JULY 29, 2002 AND (b) IN APPLYING PRIMARILY ARTICLES 279 AND 280 OF THE LABOR employment contract or for three (3) months for every year of the unexpired term, whichever is
CODE INSTEAD OF THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995 (R.A. 8042) AND less. (Italics ours)
(c) POEA RULES AND REGULATIONS IN DETERMINING THE LIABILITY OF PETITIONER AND THE
EMPLOYMENT STATUS OF RESPONDENT.
In this respect, the Court of Appeals applied Article 279 of the Labor Code [8] using principles
IITHE COURT OF APPEALS ERRED IN RULING THAT THE CONTRACT EXECUTED EXCLUSIVELY of statutory construction to supplement the omission in R.A. No. 8042 regarding the unlimited
BETWEEN RESPONDENT ADELANTAR AND DUBAI PORTS AUTHORITY UNDER FOREIGN LABOR LAWS period of employment. It ratiocinated that the Labor Code and R.A. No. 8042 are statutes in pari
WITHOUT THE APPROVAL OF POEA AND PARTICIPATION OF PENTAGON IS THE VALID AND BINDING materia.
CONTRACT CONTRARY TO THE PRINCIPLE OF FORUM NON CONVENIENS AND LEX LOCI
CONTRACTUS. The issue, therefore, is whether the Court of Appeals properly used as basis Article 279 of the
Labor Code in its award for backwages to Adelantar.
IIITHE COURT OF APPEALS ERRED WHEN IT GRANTED THE AWARD OF ATTORNEYS FEES EVEN
WHEN THERE WAS NO BASIS THEREFOR AND OVER AND BEYOND WHAT WAS CONSISTENTLY AND As early as the case of Coyoca v. NLRC,[9] we held that Filipino seamen are governed by the
ORIGINALLY PRAYED FOR BY THE RESPONDENT.[5] Rules and Regulations of the POEA. The Standard Employment Contract governing the
Employment of All Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly in Part
I, Sec. C specifically provides that the contract of seamen shall be for a fixed period. In no case
Held:The petition is meritorious. should the contract of seamen be longer than 12 months. It reads:
The August 16, 1997 contract, i.e., the first contract, provided for an unspecified period of
employment with Adelantar, as Tug Master, receiving a monthly salary, after his probationary Section C. Duration of Contract.
period, of Dhs 5,890.00. This figure in Dirhams was used by the Labor Arbiter in computing the
award equivalent to three months salary or the amount of Dhs 24,738.00 inclusive of fixed The period of employment shall be for a fixed period but in no case to exceed 12 months and shall
overtime. This was also used by the NLRC when it affirmed the award equivalent to three months, be stated in the Crew contract. Any extension of the Contract period shall be subject to the mutual
albeit, excluding the fixed overtime. consent of the parties.
The Court of Appeals likewise used the salary stated in Adelantars first contract in adjudging
Pentagons liability but it did not limit the award to three months only. In interpreting the above Under the circumstances, the Court of Appeals erred in resolving the issue of backwages
provision, the Court of Appeals, citing Marsaman Manning Agency, Inc. v. NLRC,[6] held: based on the first contract which provided for an unlimited period of employment as this violated
the explicit provision of the Rules and Regulations of the POEA. While we recognize that Adelantar
executed a contract with Dubai Ports Authority of Ali Jebel and might even have applied said
x x x. A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an
contract in his overseas station, this contract was not sanctioned by the POEA. We agree with the
illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of
NLRC when it observed thus:
his employment contract or three (3) months salary for every year of the unexpired term,
whichever is less, comes into play only when the employment contract concerned has a term of at
least one (1) year or more. This is evident from the words for every year of the unexpired term It should be stressed that whatever status of employment or increased benefits that the
which follows the words salaries x x x for three months. x x x. complainant may have gained while under the employ of Dubai Ports Authority, the undisputed
fact remains that prior to his deployment, he agreed to be hired under a 12-month POEA contract,
the duration of which is the basis for the determination of the extent of the respondents liability. [10]
51
 The Court of Appeals erred when it adjudged the first contract as the basis for Pentagons report sent on the said date. Furthermore, Skipper also claimed that on Jan. 22, 1999, Aprosta, De
liability instead of the second contract, which is in conformity with the POEAs Standard Gracia, and Doza arrived in the master‘s cabin and demanded immediate repatriation because they
Employment Contract. As such, there would have been no need to resort to statutory construction were not satisfied with the ship. De Gracia et al. threatened that they may go crazy any moment
where the rules and jurisprudence are clear. and demanded for all outstanding payments due to them. The incident is evidenced by a telex of
Cosmoship pf MV Wisdom to Skipper but had conflicting dates.
Besides, in Millares v. NLRC,[11] we held that:
De Gracia claims that Skipper failed to remit their respective allotments, compelling them
. . . [I]t is clear that seafarers are considered contractual employees. They can not be considered to vent their grievances with the Romanian Seafarers Union. On Jan. 28, 1999, the Filipino
as regular employees under Article 280 of the Labor Code. Their employment is governed by the seafarers were unceremoniously discharged and repatriated. Upon arrival in the Philippines, they
contracts they sign every time they are rehired and their employment is terminated when the filed a complaint for illegal dismissal with the Labor Arbiter.
contract expires. Their employment is contractually fixed for a certain period of time. They fall
The Labor Arbiter dismissed the seafarers‘ complaint as the seafarers‘ demand for
under the exception of Article 280 whose employment has been fixed for a specific project or
immediate repatriation due to dissatisfaction with the ship is considered as voluntary pre-
undertaking the completion or termination of which has been determined at the time of
termination of employment. Such act was deemed akin to resignation under Art. 285 of the Labor
engagement of the employee or where the work or services to be performed is seasonal in nature
Code. The Labor Arbiter gave credence to the telex of the master‘s report that the seafarers
and the employment is for the duration of the season.
indeed demanded immediate repatriation.

Moreover, it is an accepted maritime industry practice that employment of seafarers are for a fixed The NLRC agreed with the Labor Arbiter‘s decision, the Court of Appeals, however
period only. Constrained by the nature of their employment which is quite peculiar and unique in reversed the decision. The CA deemed the telex message as a self-serving document that does not
itself, it is for the mutual interest of both the seafarer and the employer why the employment satisfy the requirement of substantial evidence, or that amount of relevant evidence which a
status must be contractual only or for a certain period of time. Seafarers spend most of their time reasonable mind might accept as adequate to justify the conclusion that the respondents indeed
at sea and understandably, they can not stay for a long and an indefinite period of time at sea. voluntarily demanded their immediate repatriation.
Limited access to shore society during the employment will have an adverse impact on the
seafarer. The national, cultural and lingual diversity among the crew during the COE is a reality Issue: Whether or not the seafarers‘ demand for immediate repatriation can be considered an
that necessitates the limitation of its period. act of voluntary resignation.

Held: For a worker‘s dismissal to be considered valid, it must comply with both procedural and
Therefore, Adelantar, a seafarer, is not a regular employee as defined in Article 280 of the substantive due process. The legality of the manner of dismissal constitutes procedural due
Labor Code. Hence, he is not entitled to full backwages and separation pay in lieu of reinstatement process, while the legality of the act constitutes substantive due process.
as provided in Article 279 of the Labor Code. As we held in Millares, Adelantar is a contractual
employee whose rights and obligations are governed primarily by Rules and Regulations of the Procedural due process in dismissal cases consist of twin requirements of notice and
POEA and, more importantly, by R.A. 8042, or the Migrant Workers and Overseas Filipinos hearing. The employer must furnish the employee with the two written notices before the
Act of 1995. termination of employment can be effected: (1) the first notice apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the second notice informs
We find, however, that the Court of Appeals correctly awarded ten percent (10%) of the the employee of the employer‘s decision to dismiss him. Before the issuance of the second notice,
monetary award in Adelantars favor as attorneysfees, as he was forced to litigate and hence the requirement of a hearing must be complied with by giving the worker an opportunity to be
incurred expenses to protect his rights and interest. Petition is partly GRANTED and the decision of heard. It is not necessary that an actual hearing be conducted. Substantive due process, on the
the Court of Appeals in CA-G.R. SP No. 62839 is REVERSED and SET ASIDE. Petitioner Pentagon other hand, requires that dismissal by the employer be made under a just or authorized cause
International Shipping, Inc. is ORDERED to pay private respondent William B. Adelantar the under Art. 282 to 284 of the Labor Code.
amount equivalent to the unexpired portion of the September 3, 1997 POEA Standard Contract of
Employment plus ten percent (10%) of the award as attorneys fees. In this case, there was no written notice furnished to De Gracia et al., regarding the cause
of their dismissal. Cosmoship furnished a written notice to Skipper, the local manning agency,
71. SKIPPER UNITED PACIFIC VS DOZA claiming that De Gracia, et al., were repatriated because the latter voluntarily pre-terminated their
Facts: Petitioner deployed De Gracia, Lata and Aprosta to work on board the vessel of MV contracts. This telex was given credibility and weight by the Labor Arbiter and the NLRC in
Wisdom Star. On Dec. 3, 1998, Skipper alleges that De Gracia smelling strongly of alcohol, went to deciding that there was pre-termination of the employment contract akin to ―resignation‖ and no
the cabin of Gabriel Oleszek, MV Wisdom Stars‘ Master. Skipper claimed that he was ride and illegal dismissal. However, as correctly ruled by the CA, the telex message is a ―boased and self-
shouted noisily to the master. De Gracia left the master‘s cabin after a few minutes and was heard serving document that does not satisfy the requirement of substantial evidence‖. If indeed, De
shouting very loudly somewhere down the corridors. The incident was evidenced by the Captain‘s
52
Gracia, et al., voluntarily pre-terminated their contracts, then, they should have submitted their including the entire proceedings held for that purpose. An order of execution which varies the
written resignations. tenor of the judgment or exceeds the terms thereof is a nullity.

Art. 285 of the Labor Code recognizes termination by the employee of the employment While labor laws should be construed liberally in favor of labor, we must be able to balance this
contract by ―serving written notice on the employer at least one month in advance‖. Given the with the equally important right of petitioner to due process. Because the 1997 Decision of Labor
provision, the law contemplates the requirement of a written resignation. In the absence of a Arbiter Ramos was not appealed, it became final and executory and was therefore removed from
written resignation, it is safe to presume that the employer terminated the seafarers. In addition, his jurisdiction. Modifying the tenor of the judgment via a motion impleading petitioner and filed
the telex message relied upon by the Labor Arbiter and the NLRC bore conflicting dates of 22 only in 2002 runs contrary to settled jurisprudence, rendering such action a nullity.
January 1998 and 22 of January 1999, giving doubt to the veracity and authenticity of the
document. In 22 January 1998, De Gracia, et al., were not even employed yet by the foreign Other relevant Info: Petitioner has a fresh period of 15 days within which to file this petition, in
principal. accordance with
the Neypes rule. Starting from the date she received the Resolution denying her
Motion for Reconsideration, she had a ―fresh period‖ of 15 days within which to appeal to this
72. Gagui vs. Dejero and Permejo; GR No. 196036; October 23, 2013 Court. Henceforth, this ―fresh period rule‖ shall also apply to Rule 40 governing appeals from the
Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the
Topic: Liabilities of the Local Employment Agency and the Employer (Joint and Several Liability) Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial agencies to
Right to Due Process the Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme Court.
Doctrine of Immutability of Judgment
Fresh Period Rule 73.ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF PUBLIC
HEALTH-KUWAITvs. MA. JOSEFA ECHIN, G.R. No. 178551 October 11, 2010
Facts: Respondents filed separate Complaints for illegal dismissal, nonpayment of salaries and
overtime pay, refund of transportation expenses, damages, and attorney‘s fees against PRO FACTS:Respondent Echin was hired by petitioner ATCI in behalf of its principal co-petitioner,
Agency Manila, Inc., and Abdul Rahman Al Mahwes. The LA rendered a Decision ordering Pro Ministry of Public Health of Kuwait, for the position of medical technologist under a two-year
Agency Manila, Inc., and Abdul Rahman Al Mahwes to jointly and severally pay complainants. contract with a monthly salary of US$1,200.00.Within a year, Respondent was terminated for not
When the writ was returned unsatisfied, an Alias Writ of Execution was issued, but was also passing the probationary period which was under the Memorandum of Agreement. Ministry denied
returned unsatisfied. A 2nd Alias Writ of Execution was issued, which resulted in the garnishment respondent‗s request and she returned to the Philippines shouldering her own fair. Respondent
of petitioner‘s bank deposit. Respondents sought the issuance of a third alias writ of execution, filed with the National Labor Relations Commission (NLRC) a complaint against ATCI for illegal
resulting in the levying of two parcels of lot owned by Gagui. dismissal. Labor Arbiter rendered judgment in favor of respondent and ordered ATCI to pay
Issue: WON Gagui may be held jointly and severally liable with PRO Agency Manila, Inc. in her$3,600.00, her salary for the three months unexpired portion of the contract.
accordance with Section 10 of R.A. 8042, despite not having been impleaded in the Complaint and
ATCI appealed Labor Arbiter‗s decision, however, NLRC affirmed the latter‗s decision and denied
named in the Decision?

Held: No. ―R.A. 8042 is a police power measure intended to regulate the recruitment and petitioner ATCI‗s motion for reconsideration. Petitioner appealed to the Court Appeals contending
deployment of OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by that their principal being a foreign government agency is immune from suit, and as such, immunity
numerous OFWs seeking to work abroad.‖ The liability of corporate directors and officers is not extended to them.
automatic. To make them jointly and solidarily liable with their company, there must be a finding
Appellate Court affirmed NLRC‗s decision. It noted that under the law, a private
that they were remiss in directing the affairs of that company, such as sponsoring or tolerating the
conduct of illegal activities. employmentagency shall assume all responsibilities for the implementation of the contract of
employment of an overseas worker; hence, it can be sued jointly and severally with the foreign
There was no finding of neglect on the part of the petitioner in directing the affairs of the agency. principal for any violation of the recruitment agreement or contract of employment. Petitioner‗s
In fact, respondents made no mention of any instance when petitioner allegedly failed to manage motion for reconsideration was denied; hence, this present petition.
the agency in accordance with law, thereby contributing to their illegal dismissal. By holding her
liable despite not being ordained as such by the decision, both the CA and NLRC violated the Issue:Whether or not petitioners be held liable considering that the contract specifically stipulates
doctrine on immutability of judgments. The execution must conform with that which is ordained or that respondent‗s employmentshall be governed by the Civil Service Law and Regulations of
decreed in the dispositive portion of the decision. Once a decision or order becomes final and Kuwait.
executory, it is removed from the power or jurisdiction of the court which rendered it to further
alter or amend it. It thereby becomes immutable and unalterable and any amendment or alteration Ruling:Court denied the petition. According to RA 8042: The obligations covenanted in the
which substantially affects a final and executory judgment is null and void for lack of jurisdiction, recruitment agreement entered into by and between the local agent and its foreign principal are
53
not coterminous with the term of such agreement so that if either or both of the parties decide to
end the agreement, the responsibilities of such parties towards the contracted employees under Sec. 10. Money Claims. - x x x In case of termination of overseas employment without
the agreement do not at all end, but the same extends up to and until the expiration of the just, valid or authorized cause as defined by law or contract, the workers shall be entitled to
employment contracts of the employees recruited and employed pursuant to the said recruitment the full reimbursement of his placement fee with interest of twelve percent (12%) per annum,
agreement. In international law, the party who wants to have a foreign law applied to a dispute or plus his salaries for the unexpired portion of his employment contract or for three (3)
case has the burden of proving the foreign law. Where a foreign law is not pleaded or, even if months for every year of the unexpired term, whichever is less.
pleaded, is not proved, the presumption is that foreign law is the same as ours. Thus, we apply
The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court
Philippine labor laws in determining the issues presented before us.
of Appeals (CA), reiterating the constitutional challenge against the subject clause. The CA
74. Serrano v. Gallant; G.R. No. 167614; March 24,2009 affirmed the NLRC ruling on the reduction of the applicable salary rate, but skirted the
constitutional issue raised by herein petitioner Serrano.
Topic: Pre-Termination of Contract of Migrant Workers and Money Claims (Sec. 10 of RA 8042 as
amended by Sec. 7 of RA 10022) The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal
is not disputed. Likewise not disputed is the salary differential of US$45.00 awarded to petitioner
Facts: Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and in all three fora.
Marlow Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as
Chief Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 Applying the subject clause, the NLRC and the CA computed the lump-sum salary of
days paid vacation leave per month. petitioner at the monthly rate of US$1,400.00 covering the period of three months out of the
unexpired portion of nine months and 23 days of his employment contract or a total of
On March 19, 1998, the date of his departure, Serrano was constrained to accept a US$4,200.00.
downgraded employment contract for the position of Second Officer with a monthly salary of
US$1,000 upon the assurance and representation of respondents that he would be Chief Officer by Impugning the constitutionality of the subject clause, petitioner contends that, in addition
the end of April 1998. to the US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or a
total of US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his
Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, employment contract, computed at the monthly rate of US$2,590.00.31
Serrano refused to stay on as second Officer and was repatriated to the Philippines on May 26,
1998, serving only two (2) months and seven (7) days of his contract, leaving an unexpired For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph
portion of nine (9) months and twenty-three (23) days. of Section 10, Republic Act (R.A.) No. 8042, violates the OFWs‘ constitutional rights in that it
impairs the terms of their contract, deprives them of equal protection and denies them due
Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive process.
dismissal and for payment of his money claims in the total amount of US$26,442.73 (based on the
computation of $2590/month from June 1998 to February 199, $413.90 for March 1998, and Respondents contend that the constitutional issue should not be entertained, for this was
$1640 for March 1999) as well as moral and exemplary damages. belatedly interposed by petitioner in his appeal before the CA, and not at the earliest opportunity,
which was when he filed an appeal before the NLRC.40
The LA declared the petitioner's dismissal illegal and awarded him US$8,770, representing
his salaray for three (3) months of the unexpired portion of the aforesaid contract of employment, The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15,
plus $45 for salary differential and for attorney's fees equivalent to 10% of the total amount; 1995, its provisions could not have impaired petitioner‘s 1998 employment contract. Rather, R.A.
however, no compensation for damages as prayed was awarded. No. 8042 having preceded petitioner‘s contract, the provisions thereof are deemed part of the
minimum terms of petitioner‘s employment, especially on the matter of money claims, as this was
On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, not stipulated upon by the parties.
representing three (3) months salary at $1400/month, plus 445 salary differential and 10% for
attorney's fees. This decision was based on the provision of RA 8042, which was made into law on Issue: Whether or not Section 10 (par 5) of RA 8042 is unconstitutional?
July 15, 1995.
Held: It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the unexpired portions thereof, were treated alike in terms of the computation of their monetary
constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042, which reads:
54
benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of computation: re-embarkation but he was not able to board; and that petitioner was entitled to his salaries for
their basic salaries multiplied by the entire unexpired portion of their employment contracts. the unexpired portion of his contract for a period of nine months (US$12,870.00), P100,000 for
moral damages, and P50,000 for exemplary damages with 10% of the same for Attys fees.
The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of
computation of the money claims of illegally dismissed OFWs based on their employment periods, Respondents sought recourse from the NLRC which modified the award of salaries from
in the process singling out one category whose contracts have an unexpired portion of one year or that corresponding to nine months to only three months (US$4,290.00) pursuant to Section 10
more and subjecting them to the peculiar disadvantage of having their monetary awards limited to R.A. No. 8042.Respondents and petitioner both filed a Motion for Partial Reconsideration. NLRC
their salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while affirmed the finding of Illegal Dismissal and Bad Faith on the part of respondent. However, the
sparing the other category from such prejudice, simply because the latter‘s unexpired contracts fall NLRC reversed its earlier Decision, holding that "there can be no choice to grant only 3 months
short of one year. salary for every year of the unexpired term because there is no full year of unexpired term which
this can be applied."
Prior to R.A. No. 8042, a uniform system of computation of the monetary awards of
illegally dismissed OFWs was in place. This uniform system was applicable even to local workers Respondents filed an MR, which the NLRC denied. Undaunted, respondents filed a petition
with fixed-term employment. for certiorari under Rule 65 before the CA.The CA affirmed the findings and ruling of the LA and
the NLRC. However, the CA ruled that the NLRC erred in sustaining the LAs interpretation of
The subject clause does not state or imply any definitive governmental purpose; and it is Section 10 of R.A. No. 8042. The CA relied on the clause "or for three months for every year of the
for that precise reason that the clause violates not just petitioner‘s right to equal protection, but unexpired term, whichever is less" provided in the 5th paragraph of Section 10 of R.A. No. 8042.
also her right to substantive due process under Section 1, Article III of the Constitution. The
subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired Both parties filed their respective MRs which the CA denied. Thus, this petition.
period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence
prior to the enactment of R.A. No. 8042. Issues:
[1] Whether Section 10 of R.A. 8042, to the extent that it affords an illegally dismissed migrant
The Court GRANTS the Petition. The subject clause ―or for three months for every year of worker the lesser benefit of "salaries for [the] unexpired portion of his employment contract for
the unexpired term, whichever is less‖ in the 5th paragraph of Section 10 of Republic Act No. 8042 three (3) months for every year of the unexpired term, whichever is less" is constitutional;
is DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005
Resolution of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his [2] Assuming that it is, whether the CA gravely erred in granting petitioner only three (3) months
salaries for the entire unexpired portion of his employment contract consisting of nine months and back wages when his unexpired term of 9 months is far short of the "every year of the unexpired
23 days computed at the rate of US$1,400.00 per month. term" threshold.

Held: The petition is impressed with merit.

75. YAP v. THENAMARIS; G.R. No. 179532; May 30, 2011
Topic: Pre-Termination of Contract of Migrant Workers and Money claims The SC declared that the clause "or for three months for every year of the unexpired
term, whichever is less" is unconstitutional for being violative of the rights of (OFWs) to equal
Facts:Petitioner was employed as an electrician of the vessel, M/T SEASCOUT by Intermare protection. Moreover, the subject clause does not state any definitive governmental purpose.
Maritime Agencies, Inc. in behalf of its principal, Vulture Shipping Limited. The contract was for 12 Hence, it also violates petitioner's right to substantive due process.
months. On 23 August 2001,Yap boarded M/T SEASCOUT and commenced his job as electrician.
However, on or about 08 November 2001, the vessel was sold.Yap received his seniority bonus, Generally, an unconstitutional act is not a law. An exception to this is the doctrine of
vacation bonus, extra bonus along with the scrapping bonus. However, he insisted that he was operative fact applied when a declaration of unconstitutionality will impose an undue burden on
entitled to the payment of the unexpired portion of his contract since he was illegally dismissed those who have relied on the invalid law. This case should not be included in the exception. It was
from employment. He alleged that he opted for immediate transfer but none was made. not the fault of petitioner that he lost his job due to an act of illegal dismissal committed by
respondents.
Respondents contended that Yap was not illegally dismissed. They further alleged that
Yap‘s contract was validly terminated due to the sale of the vessel and no arrangement was made Also, the Court does not subscribe to respondents‘ postulation that the tanker allowance
for Yaps transfer to Thenamaris‘ other vessels.Thus, Yap brought the issue before the Labor of US$130.00 should not be included in the computation of the lump-sum salary. First, fair play,
Arbiter (LA) which ruled that petitioner was illegally dismissed; that respondents acted in bad faith justice, and due process dictate that this Court cannot now, for the first time on appeal, pass upon
when they assured petitioner of this question. Second, the allowance was encapsulated in the basic salary clause.

55
76. SAMEER OVERSEAS PLACEMENT AGENCY, INC. vs. JOY C. CABILES; G.R. No. 170139; any law that supports such exercise. The Constitution cannot be trumped by any other law. All
August 5, 2014 laws must be read in light of the Constitution. Any law that is inconsistent with it is a nullity.

FACTS: Thus, when a law or a provision of law is null because it is inconsistent with the Constitution, the
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency. nullity cannot be cured by reincorporation or reenactment of the same or a similar law or
provision. A law or provision of law that was already declared unconstitutional remains as such
Respondent Joy Cabiles was hired thus signed a one-year employment contract for a monthly unless circumstances have so changed as to warrant a reverse conclusion.
salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June
26, 1997. She alleged that in her employment contract, she agreed to work as quality control for The Court observed that the reinstated clause, this time as provided in Republic
one year. In Taiwan, she was asked to work as a cutter. Act. No. 10022, violates the constitutional rights to equal protection and due process.96
Petitioner as well as the Solicitor General have failed to show any compelling change in the
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy, without circumstances that would warrant us to revisit the precedent.
prior notice, that she was terminated and that ―she should immediately report to their office to get The Court declared, once again, the clause, ―or for three (3) months for every year of the
her salary and passport.‖ She was asked to ―prepare for immediate repatriation.‖ Joy claims that unexpired term, whichever is less‖ in Section 7 of Republic Act No. 10022 amending Section 10 of
she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.15 According Republic Act No. 8042 is declared unconstitutional and, therefore, null and void.
to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila.
77. General Milling Corp. vs. Torres
On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against petitioner
and Wacoal. LA dismissed the complaint. NLRC reversed LA‘s decision. CA affirmed the ruling of Facts:On December 27, 1989, Earl Timothy Cone, a United States citizen was hired by General
the National Labor Relations Commission finding respondent illegally dismissed and awarding her Milling Corp. (GMC) as consultant and assistant coach of GMC‘s basketball team.
three months‘ worth of salary, the reimbursement of the cost of her repatriation, and attorney‘s
fees On February 9, 1990, GMC requested renewal of petitioner Cone‘s alien employment
permit, and likewise requested that it be allowed to employ Cone as full-fledged coach. The DOLE
ISSUE: Was Cabiles entitled to the unexpired portion of her salary due to illegal dismissal? Regional Director granted this request on February 15, 1990 and his Alien Employment Permit was
issued on February 18, 1990/
HELD:Yes. The Court held that the award of the three-month equivalent of respondent‘s
salary should be increased to the amount equivalent to the unexpired term of the employment Basketball Coaches Association of the Philippines (BCAP) appealed to the issuance of the
contract. alien employment permit to the Secretary of Labor on the ground that there was no showing that
there is no person in the Philippines who is competent, able and willing to perform the services
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court ruled that required nor that the hiring of Cone would redound to the national interest. The Secretary of Labor
the clause ―or for three (3) months for every year of the unexpired term, whichever is less‖ is ruled in favor of BCAP and cancelled the alien employment permit.
unconstitutional for violating the equal protection clause and substantive due process.
Issue:Whether or not the Secretary of Labor had a lawful ground to cancel the alien employment
A statute or provision which was declared unconstitutional is not a law. It ―confers no rights; it permit.
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not
been passed at all.‖ Held:Yes, the Secretary of Labor had lawful ground to cancel based on Article 40 of the Labor
Code.
The Court said that they are aware that the clause ―or for three (3) months for every year of the The Department of Labor is the agency vested with jurisdiction to determine the question
unexpired term, whichever is less‖ was reinstated in Republic Act No. of availability of local workers. The constitutional validity of legal provisions granting such
8042 upon promulgation of Republic Act No. 10022 in 2010. jurisdiction and authority and requiring proof of non-availability of local nationals able to carry out
the duties of the position involved, cannot be seriously questioned.
Ruling on the constitutional issue Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking admission to the
In the hierarchy of laws, the Constitution is supreme. No branch or office of the government may Philippines for employment purposes and any domestic or foreign employer who desires to
exercise its powers in any manner inconsistent with the Constitution, regardless of the existence of engage an alien for employment in the Philippines shall obtain an employment permit from
the Department of Labor.

56
 The employment permit may be issued to a non-resident alien or to the applicant employer claimed that their names did not appear in the list of employees (Master List) prior to their
after a determination of the non-availability of a person in the Philippines who is competent, engagement as apprentices.
able and willing at the time of application to perform the services for which the alien is
desired. Issue: Whether the CA erred in affirming the ruling of the Labor Arbiter that the complainants
For an enterprise registered in preferred areas of investments, said employment permit may were already regular employees of the Company even prior to their engagement as apprentices by
be issued upon recommendation of the government agency charged with the supervision of the Company?
said registered enterprise.
Held:The CA committed no reversible error in nullifying the NLRC decision and in affirming the
Petitioners apparently suggest that the Secretary of Labor is not authorized to take into labor arbiter's ruling, as it applies to Costales, Almoite, Sebolino and Sagun. Specifically, the CA
account the question of whether or not employment of an alien applicant would "redound to the correctly ruled that the four were illegally dismissed because (1) they were already employees
national interest" because Article 40 does not explicitly refer to such assessment. This argument when they were required to undergo apprenticeship and (2) apprenticeship agreements were
(which seems impliedly to concede that the relationship of basketball coaching and the national invalid.
interest is tenuous and unreal) is not persuasive. In the first place, the second paragraph of Article
40 says: "[t]he employment permit may be issued to a non-resident alien or to the applicant Based on company operations at the time material to the case, Costales, Almoite, Sebolino and
employer after a determination of the non-availability of a person in the Philippines who is Sagun were already rendering service to the company as employees before they were made to
competent, able and willing at the time of application to perform the services for which the alien is undergo apprenticeship. The company itself recognized the respondents' status through relevant
desired." The permissive language employed in the Labor Code indicates that the authority operational records — in the case of Costales and Almoite, the CPS monthly report for December
granted involves the exercise of discretion on the part of the issuing authority. In the second 2003 which the NLRC relied upon and, for Sebolino and Sagun, the production and work schedule
place, Article 12 of the Labor Code sets forth a statement of objectives that the Secretary of Labor for March 7 to 12, 2005 cited by the CA.
should, and indeed must, take into account in exercising his authority and jurisdiction granted by
the Labor Code, The fact that Costales, Almoite, Sebolino and Sagun were alreadyrendering service to the company
Art. 12. Statement of Objectives. –– It is the policy of the State:
when they were made to undergo apprenticeship (as established by the evidence) renders the
a) To promote and maintain a state of full employment through improved manpower training,
apprenticeship agreements irrelevant as far as the four are concerned. This reality is highlighted
allocation and utilization;
by the CA finding that the respondents occupied positions such as machine operator, scaleman
x xx x xx x xx
c) To facilitate a free choice of available employment by persons seeking work in conformity with and extruder operator — tasks that are usually necessary and desirable in Atlanta's usual business
the national interest; or trade as manufacturer of plastic building materials. These tasks and their nature characterized
d) To facilitate and regulate the movement of workers in conformity with the national interest; the four as regular employees under Article 280 of the Labor Code. Thus, when they were
e) To regulate the employment of aliens, including the establishment of a registration and/or work dismissed without just or authorized cause, without notice, and without the opportunity to be
permit system; heard, their dismissal was illegal under the law.
79. Professional Video, Inc. vs TESDA; GR No. 155504; June 26, 2009
78. Atlanta Industries v. Sebolino; GR No. 187320; January, 26, 2011 Topic: Training and Employment of Special Workers
Topic: Apprenticeship
Facts: In the months of February and March 2005, complainants Sebolino, Costales, Almoite and
TESDA entered into a negotiated contract with Professional Video Inc. (PROV1) for
Sagun filed several complaints for illegal dismissal, regularization,underpayment, nonpayment of
an order of security-printed certification and/or PVC cards to be issued to trainees
wages and other money claims, as well as claims for moral and exemplary damages and attorney's
who passed the certification TESDA Pre-Qualification Bids Committee PROV1 signed and executed
fees against the petitioners.
their Contract Agreement Project: PVD ID Card amountingtoP39,475,00. Both parties executed an
Addendum to the contract agreement. TESDA paid 30% of the total cost of the materials 30 days
The complainants alleged that they had attained regular status as they were allowed to work with
after the receipt and acceptance of the contracted supplies with the balance payable within 30
Atlanta for more than six (6) months from the start of a purported apprenticeship agreement
days. Despite the two demand letters sent by POV1, TESDA failed to pay their balance
between them and the company. They claimed that they were illegally dismissed when the
P35,735,500. Thisprompted PROVI to file writ of preliminary attachment/garnishment against
apprenticeship agreement expired.
TESDA. RTC favored the garnishment and ordered the manager of the Land Bank of the
In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to
Philippines to produce TESDA‘s bank statement. CA set aside the RTC‘s orders after finding out the
their money claims because they were engaged as apprentices under a government-approved
following:
apprenticeship program. The company offered to hire them as regular employees in the event
A)TESDA‘s funds are public in nature and therefore exempt from garnishment.
vacancies for regular positions occur in the section of the plant where they had trained. They also
B) TESDA‘s purchase of the PVC cards was necessary from garnishment

57
Issue:
1.) May TESDA be sued because it has effectively waived its immunity when it entered into a Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of
contract with Professional Video, Inc. for a commercial purpose? pro-rated 13th month pay for the year 1997. The Labor Arbiter dismissed the complaint for illegal
2.)Are TESDA‘s funds exempt from attachment of garnishment? dismissal, which the NLRC affirmed.

Held: Upon denial of Palad‘s motion for reconsideration, Palad filed a special civil action for certiorari
1.)No, the fact that a non-corporate government entity performs a function proprietary in with the Court of Appeals. The CA set aside the NLRC and LA‘s decision on the ground that the
nature does not necessarily result in its being suable. If said non-governmental apprenticeship agreement which Palad signed was not valid and binding because it was executed
function is undertaken as an incident to its governmental function, there is no waiver more than two months before the TESDA approved petitioner‘s apprenticeship program. The Court
thereby of the sovereign immunity from suit extended to such government entity. of Appeals cited Nitto Enterprises v. National Labor Relations Commission, where it was held that
TESDA sells the PVC cards to its trainees for a fee does not characterize the prior approval by the DOLE of the proposed apprenticeship program is a condition sine qua
transaction as industrial or business; the sale, expressly authorized by the TESDA non before an apprenticeship agreement can be validly entered into.
Act cannotbe considered separately from TESDA‘sgeneralgovernmental
functions, as they are undertaken in the discharge of these functions. TESDA is not ISSUE: WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT
engaged in business, and there is nothing in the records to show that its purchase of PRIVATE RESPONDENT WAS NOT AN APPRENTICE.
the PVC cards from PROVI is for a business purpose. While TESDA admits that it
will charge the trainees with a fee for the PVC cards, it claims that this fee is only to HELD:NO.Registration and Approval by the TESDA of Apprenticeship Program Required
recover their costs and is not intended for profit. Before Hiring of Apprentices
The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship
2.)Yes, TESDA‘s funds are public incharacter, hence exempt from attachment or agreement with an employer.One of the objectives of Title II (Training and Employment of Special
garnishment. Workers) of the Labor Code is to establish apprenticeship standards for the protection of
Even assuming that TESDA entered into a proprietary contract with PROVI and apprentices.
thereby gave its implied consent to be sued, TESDA‘s funds are still public in nature
and, thus, cannot be the valid subject of a writ of garnishment or attachment. Under In Nitto Enterprises v. National Labor Relations Commission, the Court cited Article 61 of the Labor
Section 33 of the TESDA Act, the TESDA budget for the implementation of the Act Code and held that an apprenticeship program should first be approved by the DOLE before an
shall be included in the annual General Appropriation Act; hence, TESDA funds, apprentice may be hired, otherwise the person hired will be considered a regular employee. The
being sourced from the Treasury, are moneys belonging to the government, or any of its Court held:
departments, in the hands of public officials.
In the case at bench, the apprenticeship agreement between petitioner and private respondent
80. CENTURY CANNING CORPORATION vs.COURT OF APPEALS and GLORIA C. PALAD; was executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of
G.R. No. 152894, August 17, 2007 "care maker/molder." On the same date, an apprenticeship program was prepared by petitioner
and submitted to the Department of Labor and Employment. However, the apprenticeship
FACTS:On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the
"fish cleaner" at petitioner‘s tuna and sardines factory. Palad signed on 17 July 1997 an Department of Labor and Employment, the apprenticeship agreement was enforced the day it was
apprenticeship agreement with petitioner. Palad received an apprentice allowance of P138.75 signed.
daily. On 25 July 1997, petitioner submitted its apprenticeship program for approval to the
Technical Education and Skills Development Authority (TESDA) of the Department of Labor and Based on the evidence before us, petitioner did not comply with the requirements of the law. It is
Employment (DOLE). On 26 September 1997, the TESDA approved petitioner‘s apprenticeship mandated that apprenticeship agreements entered into by the employer and
program. apprentice shall be entered only in accordance with the apprenticeship program duly
approved by the Minister of Labor and Employment.
According to petitioner, a performance evaluation was conducted on 15 November 1997, where
petitioner gave Palad a rating of N.I. or "needs improvement" since she scored only 27.75% based Prior approval by the Department of Labor and Employment of the proposed
on a 100% performance indicator. Furthermore, according to the performance evaluation, Palad apprenticeship program is, therefore, a condition sine qua non before an
incurred numerous tardiness and absences. As a consequence, petitioner issued a termination apprenticeship agreement can be validly entered into.
notice dated 22 November 1997 to Palad, informing her of her termination effective at the close of
business hours of 28 November 1997.

58
Clearly, the apprenticeship agreement was enforced even before the TESDA approved petitioner‘s Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian
apprenticeship program. Thus, the apprenticeship agreement is void because it lacked prior was valid. First, private respondent who was hired as an apprentice violated the terms
approval from the TESDA. of their agreement when he acted with gross negligence resulting in the injury not
only to himself but also to his fellow worker. Second, private respondent had shown
Since Palad is not considered an apprentice because the apprenticeship agreement was enforced that "he does not have the proper attitude in employment particularly the handling of
before the TESDA‘s approval of petitioner‘s apprenticeship program, Palad is deemed a regular machines without authority and proper training. 6
employee performing the job of a "fish cleaner." Clearly, the job of a "fish cleaner" is necessary in
petitioner‘s business as a tuna and sardines factory. Under Article 280 of the Labor Code, an National Labor Relations Commission issued an order reversing the decision of the Labor Arbiter,
employment is deemed regular where the employee has been engaged to perform activities which the dispositive portion of which reads:
are usually necessary or desirable in the usual business or trade of the employer.
The NLRC declared that private respondent was a regular employee of petitioner by ruling
81. NITTO ENTERPRISESvs.NLRC and ROBERTO CAPILI; G.R. No. 114337 September
thus:
29, 1995

As correctly pointed out by the complainant, we cannot understand how an apprenticeship

Topic: Apprenticeship agreements
agreement filed with the Department of Labor only on June 7, 1990 could be validly used
by the Labor Arbiter as basis to conclude that the complainant was hired by respondent as
Facts: Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum a plain "apprentice" on May 28, 1990. Clearly, therefore, the complainant was
products, hired Roberto Capili sometime in May 1990 as an apprentice machinist, molder and core respondent's regular employee under Article 280 of the Labor Code, as early as May
maker as evidenced by an apprenticeship agreement 2 for a period of six (6) months from May 28, 28,1990, who thus enjoyed the security of tenure guaranteed in Section 3, Article XIII of
1990 to November 28, 1990 with a daily wage rate of P66.75 which was 75% of the applicable our 1987 Constitution.
minimum wage.
The complainant being for illegal dismissal (among others) it then behooves upon
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he respondent, pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al. (G.R.
was working on, accidentally hit and injured the leg of an office secretary who was treated at a No. 90349, March 5, 1993, 3rd Div., Feliciano, J.) to prove that the dismissal of
nearby hospital. complainant was for a valid cause. Absent such proof, we cannot but rule that the
complainant was illegally dismissed. 8
Later that same day, after office hours, private respondent entered a workshop within the office
premises which was not his work station. There, he operated one of the power press machines On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private
without authority and in the process injured his left thumb. Petitioner spent the amount of respondent's representative was present.
P1,023.04 to cover the medication of private respondent.
On April 22, 1994, a Writ of Execution was issued, which reads:
The following day, Roberto Capili was asked to resign in a letter 3
NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for the Writ, you are hereby commanded to proceed to the premises of [petitioner]
and in consideration of the sum of P1,912.79. 4 Nitto Enterprises and Jovy Foster located at No. l 74 Araneta Avenue, Portero,
Malabon, Metro Manila or at any other places where their properties are located
Three days after, or on August 6, 1990, private respondent formally filed before the NLRC and effect the reinstatement of herein [private respondent] to his work last
Arbitration Branch, National Capital Region a complaint for illegal dismissal and payment of other performed or at the option of the respondent by payroll reinstatement.
monetary benefits.
You are also to collect the amount of P122,690.85 representing his backwages as
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private called for in the dispositive portion, and turn over such amount to this Office for
respondent as valid and dismissing the money claim for lack of merit. proper disposition.

Petitioner filed a motion for reconsideration but the same was denied.

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 Hence, the instant petition — for certiorari. Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government
Issues: agencies" and "to establish apprenticeship standards for the protection of apprentices." To
I translate such objectives into existence, prior approval of the DOLE to any apprenticeship program
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION has to be secured as a condition sine qua non before any such apprenticeship agreement can be
IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE. fully enforced. The role of the DOLE in apprenticeship programs and agreements cannot be
II debased.
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION
IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A Hence, since the apprenticeship agreement between petitioner and private respondent has no
VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATE RESPONDENT. force and effect in the absence of a valid apprenticeship program duly approved by the DOLE,
private respondent's assertion that he was hired not as an apprentice but as a delivery boy
Held: ("kargador" or "pahinante") deserves credence. He should rightly be considered as a regular
employee of petitioner as defined by Article 280 of the Labor Code:
No. The law is clear on this matter. Article 61 of the Labor Code provides:
Art. 280. Regular and Casual Employment. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
Contents of apprenticeship agreement. — Apprenticeship agreements, including the main
employment shall be deemed to be regular where the employee has been engaged to
rates of apprentices, shall conform to the rules issued by the Minister of Labor and
perform activities which are usually necessary or desirable in the usual business or trade of
Employment. The period of apprenticeship shall not exceed six months. Apprenticeship
the employer, except where the employment has been fixed for a specific project or
agreements providing for wage rates below the legal minimum wage, which in no case shall
undertaking the completion or termination of which has been determined at the time of the
start below 75% per cent of the applicable minimum wage, may be entered into only in
engagement of the employee or where the work or services to be performed is seasonal in
accordance with apprenticeship program duly approved by the Minister of Labor and
nature and the employment is for the duration of the season.
Employment. The Ministry shall develop standard model programs of apprenticeship.
(emphasis supplied)
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of service,
In the case at bench, the apprenticeship agreement between petitioner and private respondent
whether such service is continuous or broken, shall be considered a regular employee with
was executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade of
respect to the activity in which he is employed and his employment shall continue while
"care maker/molder." On the same date, an apprenticeship program was prepared by petitioner
such activity exists. (Emphasis supplied)
and submitted to the Department of Labor and Employment. However, the apprenticeship
Agreement was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was enforced the day it was and pursuant to the constitutional mandate to "protect the rights of workers and promote
signed. their welfare." 9

Based on the evidence before us, petitioner did not comply with the requirements of the law. It is Petitioner further argues that, there is a valid cause for the dismissal of private respondent.
mandated that apprenticeship agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program duly approved by the Minister of There is an abundance of cases wherein the Court ruled that the twin requirements of due
Labor and Employment. process, substantive and procedural, must be complied with, before valid dismissal
exists. 10 Without which, the dismissal becomes void.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship
program is, therefore, a condition sine quo non before an apprenticeship agreement can be validly The twin requirements of notice and hearing constitute the essential elements of due process. This
entered into. simply means that the employer shall afford the worker ample opportunity to be heard and to
defend himself with the assistance of his representative, if he so desires.
The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give rise Ample opportunity connotes every kind of assistance that management must accord the employee
to an employer-apprentice relationship. to enable him to prepare adequately for his defense including legal representation. 11

60
 12
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: petitioner did not comply with the requirements of the law. It is mandated that apprenticeship
agreements entered into by the employer and apprentice shall be entered only in accordance with
The law requires that the employer must furnish the worker sought to be dismissed with two the apprenticeship program duly approved by the Minister of Labor and Employment. Prior
(2) written notices before termination of employee can be legally effected: (1) notice which approval by the Department of Labor and Employment of the proposed apprenticeship program is,
apprises the employee of the particular acts or omissions for which his dismissal is sought; therefore, a condition sine qua non before an apprenticeship agreement can be validly entered
and (2) the subsequent notice which informs the employee of the employer's decision to into.
dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing
the Labor Code as amended). Failure to comply with the requirements taints the dismissal Same; Same; Where the apprenticeship agreement has no force and effect, the worker hired as
with illegality. This procedure is mandatory, in the absence of which, any judgment reached apprentice should be considered as a regular employee.—Hence, since the apprenticeship
by management is void and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National agreement between petitioner and private respondent has no force and effect in the absence of a
Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365 [1990]). valid apprenticeship program duly approved by the DOLE, private respondent‘s assertion that he
was hired not as an apprentice but as a delivery boy (―kargador‖ or ―pahinante‖) deserves
credence. He should rightly be considered as a regular employee of petitioner as defined by Article
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days
280 of the Labor Code.
after he was made to sign a Quitclaim, a clear indication that such resignation was not voluntary
and deliberate.
Same; Dismissals; Due Process; The twin requirements of due process, substantive and
Private respondent averred that he was actually employed by petitioner as a delivery boy procedural, must be complied with before valid dismissal exists, otherwise the dismissal becomes
("kargador" or "pahinante"). void.—There is an abundance of cases wherein the Court ruled that the twin requirements of due
process, substantive and procedural, must be complied with, before valid dismissal exists. Without
He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation which, the dismissal becomes void. The twin requirements of notice and hearing constitute the
letter and quitclaim without explaining to him the contents thereof. Petitioner made it clear to him essential elements of due process. This simply means that the employer shall afford the worker
that anyway, he did not have a choice. 13 ample opportunity to be heard and to defend himself with the assistance of his representative, if
he so desires. Ample opportunity connotes every kind of assistance that management must accord
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the the employee to enable him to prepare adequately for his defense including legal representation.
latter's alleged resignation and subsequent execution of a Quitclaim and Release. A judicious [Nitto Enterprises vs. National Labor Relations Commission, 248 SCRA 654(1995)].
examination of both events belies any spontaneity on private respondent's part.

WHEREFORE, finding no abuse of discretion committed by public respondent National Labor 82.Marites Bernardo vs. National Labor Relations Commissions
Relations Commission, the appealed decision is hereby AFFIRMED. G.R. No. 122917, July 3, 1999
TOPIC: Art.78 & 80 of the Labor Code and the Magna Carta for Disabled Persons.
SO ORDERED. FACTS: Petitioners numbering 43 are deaf–mutes who were hired on various periods from 1988
to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called ‗Employment Contract for Handicapped Workers.
Other Info: (Doctrine) Subsequently, they are dismissed.

Labor Law; Apprenticeship Agreements; Prior approval by the Department of Labor and Petitioners maintain that they should be considered regular employees, because their task as
Employment of the proposed apprenticeship program is a condition sine qua non before an money sorters and counters was necessary and desirable to the business of respondent
apprenticeship agreement can be validly entered into.—In the case at bench, the apprenticeship bank. They further allege that their contracts served merely to preclude the application of Article
agreement between petitioner and private respondent was executed on May 28, 1990 allegedly 280 and to bar them from becoming regular employees.
employing the latter as an apprentice in the trade of ―care maker/molder.‖ On the same date, an
apprenticeship program was prepared by petitioner and submitted to the Department of Labor and Private respondent, on the other hand, submits that petitioners were hired only as ―special
Employment. However, the apprenticeship Agreement was filed only on June 7, 1990. workers and should not in any way be considered as part of the regular complement of the Bank.‖
Notwithstanding the absence of approval by the Department of Labor and Employment, the Rather, they were ―special‖ workers under Article 80 of the Labor Code.
apprenticeship agreement was enforced the day it was signed. Based on the evidence before us,

61
ISSUE: Whether or not petitioners have become regular employees. (c) the power of dismissal; and
(d) the employer‘s power to control the employee with respect to the means and methods by
RULING: YES Hence, their dismissal from employment was illegal. The stipulations in the which the work is to be accomplished. It is the so-called ―control test‖ that is the most important
employment contracts indubitably conform with Article 80, however, the application of Article 280 element.
of the Labor Code is justified because of the advent of RA No. 7277 (the Magna Carta for Disabled
Persons) which mandates that a qualified disabled employee should be given the same terms and Applying the above criteria, the evidence strongly indicates the existence of an employer-employee
conditions of employment as a qualified able-bodied person (compensation, privileges, benefits, relationship between petitioner workers and respondent San Miguel Corporation. The respondent
fringe benefits, incentives or allowances) 27 of the petitioners are considered regular employees asserts that the petitioners are employees of the Guaranteed Labor Contractor, an independent
by provision of law regardless of any agreement between the parties as embodied in article280 in labor contracting firm.
relation to article 281 of the Labor Code. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. Hence, the employment is considered The facts and evidence on record negate respondent SMC's claim.
regular, but only with respect to such activity, and while such activity exist. Without a doubt, the
task of counting and sorting bills is necessary and desirable to the business of respondent bank. XXX Uncontroverted is the fact that for an average of seven (7) years, each of the petitioners had
When the bank renewed the contract after the lapse of the six-month probationary period, the worked continuously and exclusively for the respondent company's shipping and warehousing
employees thereby became regular employees. No employer is allowed to determine indefinitely department. Considering the length of time that the petitioners have worked with the respondent
the fitness of its employees. Those who have worked for only 6 months and employments were company, there is justification to conclude that they were engaged to perform activities necessary
not renewed are not considered regular employee. or desirable in the usual business or trade of the respondent, and the petitioners are, therefore
regular employees (Phil. Fishing Boat Officers and Engineers Union v. Court of Industrial Relations,
83. BROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILS v ZAMORA 112 SCRA 159 and RJL Martinez Fishing Corporation v. National Labor Relations Commission, 127
SCRA 454).
HOURS OF WORK | EMPLOYEE EMPLOYER RELATIONSHIP
XXX The payment of the workers' wages is a critical factor in determining the actuality of an
Petitioner-Members of BROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILS are employed as employer-employee relationship whether between respondent company and petitioners or
―pahinantes‖ or ―kargadors‖ at the San Miguel Parola Glass Factory for almost seven years. They between the alleged independent contractor and petitioners. It is important to emphasize that in a
work exclusively at the SMC plant and their work is neither regular nor continuous, but depends truly independent contractor-contractee relationship, the fees are paid directly to the manpower
on the volume of the bottles to be loaded and unloaded. agency in lump sum without indicating or implying that the basis of such lump sum is the salary
per worker multiplied by the number of workers assigned to the company. This is the rule in Social
Said members‘ work exceeded 8 hours per day and sometimes, they likewise work on Sundays and Security System v. Court of Appeals (39 SCRA 629, 635).
holidays, without overtime or holiday pay.
The alleged independent contractors in the case at bar were paid a lump sum representing only
Members thru BROTHERHOODthen pressed SAN MIGUEL to hear their grievances regarding the salaries the workers were entitled to, arrived at by adding the salaries of each worker which
overtime and holiday pays. However, San Miguel refused to bargain with the union alleging that depend on the volume of work they. had accomplished individually. XXX The amount paid by
the workers are not their employees but employees of an independent labor contracting firm, respondent company to the alleged independent contractor considers no business expenses or
Guaranteed Labor Contractor. capital outlay of the latter. Nor is the profit or gain of the alleged contractor in the conduct of its
business provided for as an amount over and above the workers' wages. Instead, the alleged
Hence, a complaint for illegal dismissal and unfair labor practices was filed against SAN MIGUEL contractor receives a percentage from the total earnings of all the workers plus an additional
amount corresponding to a percentage of the earnings of each individual worker, which, perhaps,
ISSUE: Whether members of BROTHERHOOD are employees of SAN MIGUEL so as to accounts for the petitioners' charge of unauthorized deductions from their salaries by the
warrant overtime and holiday pays to them respondents.

SC: YES! XXX Firmly establishing respondent SMC's role as employer is the control exercised by it over the
petitioners that is, control in the means and methods/manner by which petitioners are to go about
In determining the existence of an employer-employee relationship, the elements that are their work, as well as in disciplinary measures imposed by it.
generally considered are the following:
(a) the selection and engagement of the employee; Because of the nature of the petitioners' work as cargadores or pahinantes, supervision as to the
(b) the payment of wages; means and manner of performing the same is practically nil. For, how many ways are there to load
62
and unload bottles and wooden shells? The mere concern of both respondent SMC and the alleged payments made by the personnel shall be forfeited in favour of the company. On appeal, the NLRC
contractor is that the job of having the bottles and wooden shells brought to and from the reversed the Labor Arbiter‘s decisions.
warehouse be done. More evident and pronounced is respondent company's right to control in the
discipline of petitioners. Documentary evidence presented by the petitioners establish respondent Issue: Whether or not Margallo is entitled to the reimbursement of her payments made for the
SMC's right to impose disciplinary measures for violations or infractions of its rules and regulations car loan, contrary to the agreement entered into by the parties?
as well as its right to recommend transfers and dismissals of the piece workers. The inter-office HELD: Yes, generally speaking, contracts are respected as the law between the contracting
memoranda submitted in evidence prove the company's control over the petitioners. That parties. The contracting parties may establish such stipulations, clauses, terms and
respondent SMC has the power to recommend penalties or dismissal of the piece workers, even as conditions as they may deem convenient provided they are not contract to law, morals,
to AbnerBungay who is alleged by SMC to be a representative of the alleged labor contractor, is good customs, public order or public policy. The provisions of the contract on the car loan
the strongest indication of respondent company's right of control over the petitioners as direct is contrary to the fundamental principles of justice and fairness. The principle against
employer. There is no evidence to show that the alleged labor contractor had such right of control unjust enrichment obliges Granteq and Gonzales to refund to Margallo the car loan
or much less had been there to supervise or deal with the petitioners. payments she made.

XXX The petitioners were dismissed allegedly because of the shutdown of the glass manufacturing 85. Sandigan Savings and Loan Bank, Inc. v. NLRC, 254 SCRA 126, G.R. No. 112877;
plant. Respondent company would have us believe that this was a case of retrenchment due to the February 26, 1996
closure or cessation of operations of the establishment or undertaking. But such is not the case
Topic :Labor Standard; Employer-Employee Relationship; Elements; Right of Control Test
here. The respondent's shutdown was merely temporary, one of its furnaces needing repair.
Operations continued after such repairs, but the petitioners had already been refused entry to the
premises and dismissed from respondent's service. New workers manned their positions. It is
Where the person for whom the services are performed reserves a right to control not only the
apparent that the closure of respondent's warehouse was merely a ploy to get rid of the
end to be achieved but also the means by which such end is reached, the relationship is deemed
petitioners, who were then agitating the respondent company for benefits, reforms and collective
to exist. Stated differently, it is the power of control which is the most determinative factor. It is
bargaining as a union. There is no showing that petitioners had been remiss in their obligations
deemed to be such an important factor that the other requisites may even be disregarded.
and inefficient in their jobs to warrant their separation.

84. GRANTEQ INDUSTRIAL vs MARGALLO Facts :Private respondent Anita M. Javier (hereinafter referred to as Javier) worked as a realty
sales agent of the petitioner Sandigan Realty Development Corporation (hereinafter called the
Facts: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court affirming the Sandigan Realty) from November 2, 1982 (or November 9, 1982)4 to November 30, 1986. Their
decision of the NLRC. The NLRC effectively reversed the decision of the Labor Arbiter. agreement was that Javier would receive a 5% commission for every sale, or if no sale was made,
Granteq is a domestic corporation engaged in the business of selling welding rods. she would receive a monthly allowance of P500,00.
Gonzales is the President/ Owner of Granteq. It employed Margallo as sales engineer beginning
August 3, 1999. Subsequently, that is, on 1 December 1986, Javier was hired as a marketing collector of
petitioner Sandigan Savings and Loan Bank (hereinafter called the Sandigan Bank) by Angel
Margallo claimed that she availed of the company‘s car loan program offered to her by the Andan, the President of both the Sandigan Bank and Sandigan Realty. Javier's monthly salary and
company. She paid downpayment on a brand new Toyota Corolla amounting to Php 201,000 out allowance were initially in the amount of P788.00 and P585.00, respectively. These were adjusted
of her own pocket. The monthly amortization will be evenly shared by her and the company. thereafter (the latest adjustment having been made on 1 July 1989), to P1,840.00 per month as
salary and to P510.00 as monthly allowance, per "Notice of Salary Adjustment." 5
Margallo received a letter from the management to explain why she should not be
sanctioned for her moonlighting activity. She explained that what she did was that she only
followed the orders of her boss. The VP- administration asked her just to resign and promised that Meanwhile, respondent Javier continued to be a realty sales agent of Sandigan Realty oh
if she did, she would still be paid her commissions and other benefits as well as reimbursed her car the side, and while she still received the 5% commission on her sales, she no longer enjoyed the
loan payments. Relying on this promise, she tendered her irrevocable resignation. Margallo alleged P500,00 monthly allowance.
that the promises of Granteq to her were never fulfilled. This prompted her to file a complaint with
the Labor Arbiter. On 20 April 1990, Javier was advised by Angel Andan not to report for work anymore.
This in effect was a notice of dismissal.
The Labor Arbiter found that Margallo had no right to the reimbursement of her car loan
payment under her car loan agreement with Granteq which provides that in case of resignation, all

63
 The advice of her termination notwithstanding, Javier reported for work at the bank on as distinguished from an employment relationship where the person rendering service is under the
the next working day or on 23 April 1990. Though she signed the attendance sheet, she left when control of the hirer with respect to the details and manner of performance.
she could not find her table.
As we hold that private respondent was not a regular employee of the Sandigan Realty and that
On 18 May 1990, Javier filed a complaint against petitioners and Angel Andan with the she could not, therefore, be entitled to backwages and separation pay, we will necessarily have to
NLRC Regional Arbitration Branch No. III at San Fernando, Pampanga, for illegal dismissal, seeking limit our treatment of the alleged errors committed by the NLRC in the computation of the
reinstatement and payment of backwages and moral and exemplary damages. monetary award to that adjudged against the petitioner Sandigan Bank.

On 6 October 1992, the labor arbiter rendered judgment in private respondent's favour. Private respondent Anita Javier, by virtue of her employment status, is, under the law entitled to
security of tenure, which means that she has the right to continue in employment until the same is
On appeal, the NLRC affirmed the decision of the Labor Arbiter in its Resolution, dated 24 terminated under conditions required by law. Article 279 of the Labor Code, as amended, clearly
September 1993, but, deleting the award of damages and attorney's fees, but provided for provides that:
monetary award of backwages and separation pay.
Security of Tenure. - In cases of regular employment, the employer shall not terminate
Issue: Whether or not the private respondent was a regular employee of the petitioner Sandigan the services of an employee except for a just cause or when authorized by the Title. An
Realty, entitled to backwages and separation pay because of her alleged illegal separation employee who is unjustly dismissed from work shall be entitled to reinstatement without
therefrom. loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.
Held: NO. Petition is GRANTED.

There being a finding of illegal dismissal of private respondent Anita Javier, her reinstatement
In determining the existence of an employer-employee relationship, the following elements are
should follow as a matter of course, unless it be shown that the same is no longer possible, in
generally considered: (1) the selection and engagement of the employee; (2) the payment of
which case, payment of separation pay will be ordered, in lieu thereof. In this case, we do not
wages; (3) the power of dismissal; and (4) the employer‘s power to control the employee with
find any such showing or basis to preclude private respondent's reinstatement.
respect to the means and methods by which the work is to be accomplished. This Court has
generally relied on the so-called ―right of control test‖ in making such a determination. Where the
person for whom the services are performed reserves a right to control not only the end to be In effect, the petitioner bank is liable to private respondent only for backwages, inclusive of
achieved but also the means by which such end is reached, the relationship is deemed to exist. allowances, and other benefits or their monetary equivalent computed from the time her
Stated differently, it is the power of control which is the most determinative factor. It is deemed to compensation was withheld from her up to the time of her actual reinstatement, at the rate of her
be such an important factor that the other requisites may even be disregarded. latest monthly salary and allowance which was in the total amount of P2,350,00 as shown by
Javier's latest "Notice of Salary Adjustment". However, earnings derived elsewhere by Javier from
the date of dismissal up to the date of reinstatement, if there be any, should be deducted from
Viewed in the light of the foregoing criteria, the features of the relationship between Javier and
said backwages.
the Sandigan Realty, as may be gleaned from the facts described herein below by the Office of the
Solicitor General, readily negate the existence of an employer-employee relationship between
them, the element of control being noticeably absent.
86. SMART COMMUNICATION VS. ASTORGA G.R. No. 148132 January 28, 2008
As it appears that Sandigan Realty had no control over the conduct of Javier as a realty sales
FACTS: Regina M. Astorga (Astorga) was employed by respondent Smart Communications,
agent since its only concern or interest was in the result of her work and not in how it was
Incorporated (SMART) on May 8, 1997 as District Sales Manager of the Corporate Sales Marketing
achieved, there cannot now be any doubt that Javier was not an employee, much less a regular
Group/ Fixed Services Division (CSMG/FSD).As District Sales Manager, Astorga enjoyed additional
employee of the Sandigan Realty. Hence, she cannot be entitled to the right to security of tenure
benefits, namely, annual performance incentive equivalent to 30% of her annual gross salary, a
nor to backwages and separation pay as a consequence of her separation therefrom.
group life and hospitalization insurance coverage, and a car plan in the amount of P455,000.00.On
May 18, 1998, SMART sent a letter to Astorga demanding that she pay the current market value of
Evidently, the legal relation of Javier to the Sandigan Realty can be that of an independent the Honda Civic Sedan which
contractor, where the control of the contracting party is only with respect to the result of the work, was given to her under the company‘s car plan program, or to surrender the same to the company
for proper disposition.
64
 labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of
Astorga, however, failed and refused to do either, thus prompting SMART to file a suit for operation of the establishment or undertaking unless the closing is for the purpose of
replevin with the Regional Trial Court of Makati (RTC) on August 10, 1998.In February 1998, circumventing the provisions of this Title, by serving a written notice on the workers and the
SMART launched an organizational realignment to achieve more efficient operations. This was Ministry of Labor and Employment at least one (1) month before the intended date thereof x x x.
made known to the employees on February 27, 1998.Part of the reorganization was the The RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in
outsourcing of the marketing and sales force. Thus, SMART entered into a joint venture agreement denying Astorga‘s motion to dismiss. SMART‘s demand for payment of the market value of the
with NTT of Japan, and formed SMART-NTT Multimedia, Incorporated (SNMI). Since SNMI was caror, in the alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the
formed to do the sales and marketing work, SMART abolished the CSMG/FSD, Astorga‘s division. relationship of debtor and creditor rather than employee-employer relations. As such, the dispute
falls within the jurisdiction of the regular courts.
SNMI agreed to absorb the CSMG personnel who would be recommended by
SMART.SMART then conducted a performance evaluation of CSMG personnel and those who Replevin is a possessory action, the gist of which is the right of possession in the plaintiff.
garnered the highest ratings were favorably recommended to SNMI. Astorga landed last in the The primary relief sought therein is the return of the property in specie wrongfully detained
performance evaluation, thus, she was not recommended by SMART. SMART offered her a by another person. It is an ordinary statutory proceeding to adjudicate rights to the title
supervisory position in the Customer Care Dept but she refused the offer. On March 3, or possession of personal property. The question of whether or not a party has the right of
1998, SMART issued a memorandum advising Astorga of the termination of her employment possession over the property involved and if so, whether or not the adverse party has wrongfully
on ground of redundancy, effective April 3, 1998. Astorga received it on March 16, 1998.The taken and detained said property as to require its return to plaintiff, is outside the pale of
termination of her employment prompted Astorga to file a Complaint for illegal dismissal, non- competence of a labor tribunal and beyond the field of specialization of Labor Arbiters.
payment of salaries and other benefits with prayer for moral and exemplary damages against
SMART. She claimed that abolishing CSMG and, consequently, terminating her employment was 87. Angelina Francisco vs. NLRC, Kasei Corp., etc. G.R. No. 170087, 31 August 2006
illegal for it violated her right to security of tenure. Topic: Employer-employee Relationship – two-tiered test

ISSUE: Whether the dismissal of Astorga illegal. Facts:In 1995, petitioner was hired by Kasei Corporation during its incorporation stage. She was
designated as Accountant and Corporate Secretary. Although she was designated as Corporate
HELD: NO. Astorga is declared validly dismissed. Astorga was terminated due to redundancy, Secretary, she was not entrusted with the corporate documents; neither did she attend any board
which is one of the authorized causes for the dismissal of an employee. meeting nor required to do so. She never prepared any legal document and never represented the
company as its Corporate Secretary. However, on some occasions, she was prevailed upon to sign
Redundancy in an employer‘s personnel force necessarily or even ordinarily refers to documentation for the company.
duplication of work. The characterization of an employee‘s services as superfluous or no longer
necessary and, therefore, properly terminable, is an exercise of business judgment on the part of In 1996, petitioner was designated Acting Manager. As Acting Manager, petitioner was assigned to
the employer. An employer is not precluded from adopting a new policy conducive to a more handle recruitment of all employees and perform management administration functions. For five
economical and effective management even if it is not experiencing economic reverses. Neither years, petitioner performed the duties of Acting Manager. As of December 31, 2000 her salary was
does the law require that the employer should suffer financial losses before he can terminate the P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation.
services of the employee on the ground of redundancy.
In January 2001, petitioner was replaced as Manager. Petitioner alleged that she was required to
But while tilting the scales of justice in favor of workers, the fundamental law also
sign a prepared resolution for her replacement but she was assured that she would still be
guarantees the right of the employer to reasonable returns for his investment. In this light, we
connected with Kasei Corporation. However, Kasai reduced her salary by P2,500.00 a month
must acknowledge the prerogative of the employer to adopt such measures as will promote
beginning January up to September 2001. She was not paid her mid-year bonus allegedly because
greater efficiency, reduce overhead costs and enhance prospects of economic gains, albeit always
the company was not earning well. On October 2001, petitioner did not receive her salary from the
within the framework of existing laws. However, SMART failed to comply with the mandated one
company.
(1) month notice prior to termination.

The record is clear that Astorga received the notice of termination only on March 16, 1998 On October 15, 2001, petitioner asked for her salary from Acedo and the rest of the officers but
or less than a month prior to its effectively on April 3, 1998. Likewise, the Department of Labor she was informed that she is no longer connected with the company. Since she was no longer paid
and Employment was notified of the redundancy program only on March 6, 1998.Article 283 of the her salary, petitioner did not report for work and filed an action for constructive dismissal before
Labor Code clearly provides: Art.283. Closure of establishment and reduction of personnel. The the labor arbiter.
employer may also terminate the employment of any employee due to the installation of

65
Private respondents averred that petitioner is not an employee of Kasei Corporation. They alleged permanency and duration of the relationship between the worker and the employer; and (7) the
that petitioner was as one of its technical consultants on accounting matters and act concurrently degree of dependency of the worker upon the employer for his continued employment in that line
as Corporate Secretary. As such, petitioner performed her work at her own discretion without of business.
control and supervision of Kasei Corporation. She had no daily time record and she came to the
office any time she wanted and the company never interfered with her work. The proper standard of economic dependence is whether the worker is dependent on the alleged
employer for his continued employment in that line of business
The Labor Arbiter found that petitioner was illegally dismissed and ordered her reinstatement and By applying the control test, there is no doubt that petitioner is an employee of Kasei
payment of backwages. The NLRC affirmed the decision with modification on the computation of Corporation because she was under the direct control and supervision of Seiji Kamura, the
backwages, damages and attorney‘s fees. corporations Technical Consultant. She reported for work regularly and served in various
capacities. Under the broader economic reality test, the petitioner can likewise be said to be an
On appeal, the Court of Appeals reversed the NLRC decision and dismissed the complaint of the employee of respondent corporation because she had served the company for six years before her
petitioner. dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month pay,
bonuses and allowances, as well as deductions and Social Security contributions from August 1,
Issue: Whether or not there was an employer-employee relationship between petitioner and 1999 to December 18, 2000. It is therefore apparent that petitioner is economically dependent on
private respondent Kasei Corporation and as such, petitioner was constructively dismissed from respondent corporation for her continued employment in the latters line of business.
her employment.
Note: On the issue of constructive dismissal
Held: YES
The corporation constructively dismissed petitioner when it reduced her salary by P2,500 a month from
Generally, courts have relied on the so-called right of control test where the person for whom the January to September 2001. This amounts to an illegal termination of employment, where the petitioner
services are performed reserves a right to control not only the end to be achieved but also the is entitled to full backwages. Since the position of petitioner as accountant is one of trust and
means to be used in reaching such end. In addition to the standard of right-of-control, the existing confidence, and under the principle of strained relations, petitioner is further entitled to separation pay,
economic conditions prevailing between the parties, like the inclusion of the employee in the in lieu of reinstatement.
payrolls, can help in determining the existence of an employer-employee relationship.
A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. Constructive
However, in certain cases the control test is not sufficient to give a complete picture of the dismissal is an involuntary resignation resulting in cessation of work resorted to when continued
relationship between the parties, owing to the complexity of such a relationship where several employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a
positions have been held by the worker. diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to an employee.
The better approach would therefore be to adopt a two-tiered test involving: (1) the putative
employers power to control the employee with respect to the means and methods by which the 88. ABS-CBN BROADCASTING CORPORATION vs. MARLYN NAZARENO, MERLOU
work is to be accomplished; and (2) the underlying economic realities of the activity or GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN
relationship. Topic: EMPLOYER-EMPLOYEE RELATIONSHIP
In Sevilla v. Court of Appeals,[21] we observed the need to consider the existing economic
FACTS:Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting
conditions prevailing between the parties, in addition to the standard of right-of-control like the
business and owns a network of television and radio stations, whose operations revolve around
inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of
the broadcast, transmission, and relay of telecommunication signals. It sells and deals in or
an employer-employee relationship based on an analysis of the totality of economic circumstances
otherwise utilizes the airtime it generates from its radio and television operations. It has a
of the worker.
franchise as a broadcasting company, and was likewise issued a license and authority to operate
by the National Telecommunications Commission.
Thus, the determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity,[22] such as: (1) the extent to which the services
performed are an integral part of the employers business; (2) the extent of the workers Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production
investment in equipment and facilities; (3) the nature and degree of control exercised by the assistants (PAs) on different dates. They were assigned at the news and public affairs, for various
employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill, radio programs in the Cebu Broadcasting Station, with a monthly compensation of P4,000. They
judgment or foresight required for the success of the claimed independent enterprise; (6) the were issued ABS-CBN employee‘s identification cards and were required to work for a minimum of

66
eight hours a day, including Sundays and holidays. They were made to perform the following tasks Second. The so-called talent fees of respondents correspond to wages given as a result of an
and duties: employer-employee relationship. Respondents did not have the power to bargain for huge talent
fees, a circumstance negating independent contractual relationship.
a) Prepare, arrange airing of commercial broadcasting based on the daily operations log and
digicart of respondent ABS-CBN; Third. Petitioner could always discharge respondents should it find their work unsatisfactory, and
b) Coordinate, arrange personalities for air interviews; respondents are highly dependent on the petitioner for continued work.
c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or
incoming reports; Fourth. The degree of control and supervision exercised by petitioner over respondents through its
d) Facilitate, prepare and arrange airtime schedule for public service announcement and supervisors negates the allegation that respondents are independent contractors.
complaints;
e) Assist, anchor program interview, etc; and
Petitioners are considered regular employees of petitioner corporation. It follows then that
f) Record, log clerical reports, man based control radio.
respondents are entitled to the benefits provided for in the existing CBA between petitioner and its
rank-and-file employees. As regular employees, respondents are entitled to the benefits granted to
The PAs were under the control and supervision of Assistant Station Manager Dante J. Luzon, and all other regular employees of petitioner under the CBA.
News Manager Leo Lastimosa.
Where a person has rendered at least one year of service, regardless of the nature of the activity
On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a performed, or where the work is continuous or intermittent, the employment is considered regular
Collective Bargaining Agreement (CBA) to be effective during the period from December 11, 1996 as long as the activity exists, the reason being that a customary appointment is not indispensable
to December 11, 1999. However, since petitioner refused to recognize PAs as part of the before one may be formally declared as having attained regular status. Article 280 of the Labor
bargaining unit, respondents were not included to the CBA. Code provides:

On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing the PAs that ART. 280. REGULAR AND CASUAL EMPLOYMENT.The provisions of
effective August 1, 2000, they would be assigned to non-drama programs, and that the DYAB written agreement to the contrary notwithstanding and regardless of the oral
studio operations would be handled by the studio technician. agreement of the parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which are usually necessary
Respondent Gerzon was assigned as the full-time PA of the TV News Department reporting directly or desirable in the usual business or trade of the employer except where the
to Leo Lastimosa. employment has been fixed for a specific project or undertaking the completion
or termination of which has been determined at the time of the engagement of
On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment the employee or where the work or services to be performed is seasonal in
Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick nature and the employment is for the duration of the season.
Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC.
In Universal Robina Corporation v. Catapang, the Court reiterated the test in determining whether
ISSUE:Whether or not the respondents are considered regular employees of petitioner and there one is a regular employee:
exist an employer-employee relationship between them.
The primary standard, therefore, of determining regular employment is the
HELD: reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade of the employer. The
Employer-employee relationship between petitioner and respondents has been proven.
connection can be determined by considering the nature of work performed and its
relation to the scheme of the particular business or trade in its entirety. Also, if the
First. In the selection and engagement of respondents, no peculiar or unique skill, talent or employee has been performing the job for at least a year, even if the performance is not
celebrity status was required from them because they were merely hired through petitioner‘s continuous and merely intermittent, the law deems repeated and continuing need for its
personnel department just like any ordinary employee. performance as sufficient evidence of the necessity if not indispensability of that activity
to the business. Hence, the employment is considered regular, but only with respect to
such activity and while such activity exists.
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As elaborated by this Court in Magsalin v. National Organization of Working Men: relation to the particular trade or business taking into account all the circumstances, and in some
cases the length of time of its performance and its continued existence. It is obvious that one year
Even while the language of law might have been more definitive, the clarity of after they were employed by petitioner, respondents became regular employees by operation of
its spirit and intent, i.e., to ensure a regular workers security of tenure, however, can law.
hardly be doubted. In determining whether an employment should be considered regular
or non-regular, the applicable test is the reasonable connection between the particular In this case, it is undisputed that respondents had continuously performed the same activities for
activity performed by the employee in relation to the usual business or trade of the an average of five years. Their assigned tasks are necessary or desirable in the usual business or
employer. The standard, supplied by the law itself, is whether the work undertaken is trade of the petitioner. The persisting need for their services is sufficient evidence of the necessity
necessary or desirable in the usual business or trade of the employer, a fact that can be and indispensability of such services to petitioners business or trade. While length of time may not
assessed by looking into the nature of the services rendered and its relation to the be a sole controlling test for project employment, it can be a strong factor to determine whether
general scheme under which the business or trade is pursued in the usual course. It is the employee was hired for a specific undertaking or in fact tasked to perform functions which are
distinguished from a specific undertaking that is divorced from the normal activities vital, necessary and indispensable to the usual trade or business of the employer.
required in carrying on the particular business or trade. But, although the work to be
performed is only for a specific project or seasonal, where a person thus engaged has 89. Danilo Tabas, et al. vs. CMC, G.R. No. 80680; January 26, 1989
been performing the job for at least one year, even if the performance is not continuous
or is merely intermittent, the law deems the repeated and continuing need for its Topic: Hours of Work (Arts. 82-90 LC)
performance as being sufficient to indicate the necessity or desirability of that activity to Facts:It appears that the petitioners were, prior to their stint with California, employees of Livi
the business or trade of the employer. The employment of such person is also then Manpower Services, Inc. (Livi), which subsequently assigned them to work as "promotional
deemed to be regular with respect to such activity and while such activity exists. merchandisers" for the former firm pursuant to a manpower supply agreement. Among other
things, the agreement provided that California "has no control or supervisions whatsoever over
Not considered as regular employees are project employees, the completion or termination of [Livi's] workers with respect to how they accomplish their work or perform [Californias]
which is more or less determinable at the time of employment, such as those employed in obligation"; the Livi "is an independent contractor and nothing herein contained shall be construed
connection with a particular construction project, and seasonal employees whose employment by as creating between [California] and [Livi] . . . the relationship of principal[-]agent or employer[-
its nature is only desirable for a limited period of time. Even then, any employee who has rendered ]employee'; that "it is hereby agreed that it is the sole responsibility of [Livi] to comply with all
at least one year of service, whether continuous or intermittent, is deemed regular with respect to existing as well as future laws, rules and regulations pertinent to employment of labor" and that
the activity performed and while such activity actually exists. "[California] is free and harmless from any liability arising from such laws or from any accident
that may befall workers and employees of [Livi] while in the performance of their duties for
It is of no moment that petitioner hired respondents as talents. The fact that respondents received [California].
pre-agreed talent fees instead of salaries, that they did not observe the required office hours, and
that they were permitted to join other productions during their free time are not conclusive of the It was further expressly stipulated that the assignment of workers to California shall be on a
nature of their employment. Respondents cannot be considered talents because they are not "seasonal and contractual basis"; that "[c]ost of living allowance and the 10 legal holidays will be
actors or actresses or radio specialists or mere clerks or utility employees. They are regular charged directly to [California] at cost "; and that "[p]ayroll for the preceeding [sic] week [shall]
employees who perform several different duties under the control and direction of ABS-CBN be delivered by [Livi] at [California's] premises."
executives and supervisors. The petitioners were then made to sign employment contracts with durations of six months, upon
the expiration of which they signed new agreements with the same period, and so on. Unlike
There are two kinds of regular employees under the law: (1) those engaged to perform activities regular California employees, who received not less than P2,823.00 a month in addition to a host
which are necessary or desirable in the usual business or trade of the employer; and (2) those of fringe benefits and bonuses, they received P38.56 plus P15.00 in allowance daily.
casual employees who have rendered at least one year of service, whether continuous or
broken, with respect to the activities in which they are employed. The petitioners now allege that they had become regular California employees and demand, as a
consequence whereof, similar benefits. They likewise claim that pending further proceedings
The law overrides such conditions which are prejudicial to the interest of the worker whose weak below, they were notified by California that they would not be rehired. As a result, they filed an
bargaining situation necessitates the succor of the State. What determines whether a certain amended complaint charging California with illegal dismissal.
employment is regular or otherwise is not the will or word of the employer, to which the worker Issue:W/N Livi is an independent contractor as opposed to a labor-only contractor
oftentimes acquiesces, much less the procedure of hiring the employee or the manner of paying
the salary or the actual time spent at work. It is the character of the activities performed in

68
Held:YES. This Court has consistently ruled that the determination of whether or not there is an employees-of-California-and had acquired a secure tenure. Hence, they cannot be separated
employer-employee relation depends upon four standards: (1) the manner of selection and without due process of law.
engagement of the putative employee; (2) the mode of payment of wages; (3) the presence or
absence of a power of dismissal; and (4) the presence or absence of a power to control the California should be warned that retrenchment of workers, unless clearly warranted, has serious
putative employee's conduct. Of the four, the right-of-control test has been held to be the decisive consequences not only on the State's initiatives to maintain a stable employment record for the
factor. country, but more so, on the workingman himself, amid an environment that is desperately scarce
in jobs. And, the National Labor Relations Commission should have known better than to fall for
On the other hand, we have likewise held, based on Article 106 of the Labor Code, x x x that such unwarranted excuses and nebulous claims.
notwithstanding the absence of a direct employer-employee relationship between the employer in
whose favor work had been contracted out by a "labor-only" contractor, and the employees, the 90. LOLITA LOPEZ VS. BODEGA CITY G.R. 155731 September 03, 2007
former has the responsibility, together with the "labor-only" contractor, for any valid labor claims,
by operation of law. The reason, so we held, is that the "labor-only" contractor is considered TOPIC: Working Conditions and Rest Period
"merely an agent of the employer," and liability must be shouldered by either one or shared by
both. FACTS: Petitioner Lopez was the lady keeper of Bodega City tasked with manning its ladies
comfort room. Petitioner was made to explain why the concessionaire agreement between her and
There is no doubt that in the case at bar, Livi performs "manpower services", meaning to say, it respondents should not be terminated or suspended in view of an incident that happened on
contracts out labor in favor of clients. We hold that it is one notwithstanding its vehement claims February 3, 1995, wherein petitioner was seen to have acted in a hostile manner against a lady
to the contrary, and notwithstanding the provision of the contract that it is "an independent customer of Bodega City who informed the management that she saw petitioner sleeping while on
contractor." The nature of one's business is not determined by self-serving appellations one duty. Subsequently, respondents decided to terminate the services of petitioner.
attaches thereto but by the tests provided by statute and prevailing case law. The bare fact that Petitioner filed a complaint for illegal dismissal against respondents contending that she was
Livi maintains a separate line of business does not extinguish the equal fact that it has provided dismissed from her employment without cause and due process. In their answer, respondents
California with workers to pursue the latter's own business. In this connection, we do not agree contended that no employer-employee relationship ever existed between them and petitioner; that
that the petitioners had been made to perform activities 'which are not directly related to the the latter‘s services rendered within the premises of Bodega City was by virtue of a concessionaire
general business of manufacturing," California's purported "principal operation activity." The agreement she entered into with respondents.
petitioner's had been charged with "merchandizing [sic] promotion or sale of the products of
[California] in the different sales outlets in Metro Manila including task and occational [sic] price ISSUE: WON petitioner is an employee of respondents.
tagging," an activity that is doubtless, an integral part of the manufacturing business. It is not,
then, as if Livi had served as its (California's) promotions or sales arm or agent, or otherwise, HELD: Yes.Petitioners contention that she was an employee of respondents because she was
rendered a piece of work it (California) could not have itself done; Livi, as a placement agency, subject to their control does not hold water. The concessionaire agreement merely stated that
had simply supplied it with the manpower necessary to carry out its (California's) merchandising petitioner shall maintain the cleanliness of the ladies comfort room and observe courtesy
activities, using its (California's) premises and equipment. guidelines that would help her obtain the results they wanted to achieve. There is nothing in the
Neither Livi nor California can therefore escape liability, that is, assuming one exists. agreement which specifies the methods by which petitioner should achieve these
results. Respondents did not indicate the manner in which she should go about in maintaining the
In the case at bar, Livi is admittedly an "independent contractor providing temporary services of cleanliness of the ladies comfort room. Neither did respondents determine the means and methods
manpower to its client." When it thus provided California with manpower, it supplied California by which petitioner could ensure the satisfaction of respondent company‘s customers. In other
with personnel, as if such personnel had been directly hired by California. Hence, Article 106 of the words, petitioner was given a free hand as to how she would perform her job as a lady keeper.
Code applies.
Moreover, petitioner was not subjected to definite hours or conditions of work. The fact that she
The Court need not therefore consider whether it is Livi or California which exercises control over was expected to maintain the cleanliness of respondent company‘s ladies comfort room during
the petitioner vis-a-vis the four barometers referred to earlier, since by fiction of law, either or Bodega Citys operating hours does not indicate that her performance of her job was subject to the
both shoulder responsibility. control of respondents as to make her an employee of the latter. Instead, the requirement that
she had to render her services while Bodega City was open for business was dictated simply by the
Other relevant info:
very nature of her undertaking, which was to give assistance to the users of the ladies comfort
The records show that the petitioners bad been given an initial six-month contract, renewed for room.
another six months. Accordingly, under Article 281 of the Code, they had become regular
91. Victory Liner v. Race | Chico-Nazario, J.

69
Topic: Injured bus driver illegally dismissed; Prescription: 4 years from the accrual of the cause of o If reckoning period is counted from when the written demand was made by Race,
action the 4-year prescriptive period would be indeterminate, contrary to the spirit of
the law.
FACTS:  In illegal dismissal cases, the employee concerned is given a period of four years from
 Pablo M. Race was employed by Victory Liner, Inc. as a bus driver for the Alaiminos, the time of his dismissal within which to institute a complaint.
Pangasinan – Cubao, Quezon City evening route. o Art. 1146 [CC]Actions based upon an injury to the rights of the plaintiff
 24 August 1994: Race‘s bus figured in an accident, wherein Race suffered a fractured leg, must be brought within four years.
for which he was confined in the hospital until 10 October 1994. o Employment is a ―property right‖—within the protection of a constitutional
 10 November 1994: Race was confined again for further treatment for another month. guarantee of dues process of law.
 Victory Liner shouldered all of Race‘s medical expenses for both instances. o Therefore, when one is arbitrarily and unjustly deprived of his job or means of
 January 1998: Race reported for work, but was informed that he was considered livelihood, the action instituted to contest the legality of one‘s dismissal from
resigned, and was offered consideration of P50,000.00, which he rejected. employment constitutes, an action predicated "upon an injury to the rights of the
 Before Christmas 1998: Victory Liner reiterated that he was regarded as resigned, this plaintiff."
 The four-year prescriptive period shall commence to run only upon the accrual of a
time, offering him P100,000.00, which he again rejected.
 30 June 1999: Race sent a letter to Victory Liner demanding employment-related money cause of action of the worker—the time the employment of the worker was
claims; no response from Victory Liner. unjustly terminated.
 Race was not unjustly terminated on 10 November 1994
 1 September 1999: Race filed a complaint before the Labor Arbiter for:
o At that time, still confined for further treatment of his fractured left leg.
o Unfair labor practice;
o Illegal dismissal; o He must be considered as merely on sick leave
 Neither could be deemed as illegally dismissed from work upon his release in December
o Underpayment of wages;
1994 up to December 1997.
o Nonpayment of overtime and holiday premium, service incentive leave pay,
vacation and sick leave benefits, 13th month pay; o Race still reported for work to the petitioner and was granted sick and disability
leave by Victory Liner for that period.
o Excessive deduction of withholding tax and SSS premium; and
o Moral and exemplary damages and attorney‘s fees.  Race must be considered as unjustly terminated in January 1998 since this was the first
 LABOR ARBITER: Dismissed; stating that the prescriptive period for filing a case for illegal time he was informed by the Victory Liner that he was deemed resigned from his work.
 Consequently, Race‘s filing of complaint for illegal dismissal on 1 September 1999 was
dismissal had elapsed—considered dismissed on 24 November 1994.
 NLRC: Reversed Labor Arbiter; cause of action accrued in January 1998, when Race well within the four-year prescriptive period.
reported for work but was rejected; Also stated that Victory Liner failed to accord Race  It must also be noted that from 10 November 1994 up to December 1997, Victory Liner
due process in terminating his employment. never formally informed the respondent of the fact of his dismissal
 Moveover, Race did not abandon his work for lack of the 2 factors that constitute
abandonment:
ISSUE/HELD: o Failure to report for work or absence without valid or justifiable reason; and
o A clear intention to sever employer-employee relationship.
[1] WoN the cause of action for illegal dismissal had prescribed.—NO. Cause of action  Similarly, the employer-employee relationship between the petitioner and respondent
accrued January 1998. cannot be deemed to have been extinguished on 10 November 1994,.
o Race reported for work to the petitioner after his release from the hospital in
[2] WoN Race was illegally dismissed, thus entitled to reinstatement with full back
December 1994.
wages and other benefits.—YES. But separation pay in lieu of reinstatement.
o He was also granted a 120-day sick leave and disability leave
RATIO: o And also availed himself of the services of the Victory Liner‘s physician on two
occasions after his release
[1] Prescription o Victory Liner failed to establish the fact that Race ceased to be its employee on
10 November 1994, except for its flimsy reason that the sick leave, disability
 Victory Liner insists that Race already abandoned his work and ceased to be its employee leave and physician consultations were given to the respondent as mere
since November 1994. accommodations for a former employee.
o Among other arguments, under the 4-fold test of employer-employee
relationship: Victory claimed that it no longer paid Race wages nor exercised
control over him since November 1994.
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[2.a.] Illegal dismissal Proceeding from the unambiguous terms of the above quoted memorandum, the Labor
Arbiter observed that the reduction of the divisor to 303 was for the sole purpose of increasing the
 The Labor Code mandates that before an employer may legally dismiss an employee employees' overtime pay and was not meant to replace the use of 314 as the divisor in the
from the service, the requirement of substantial and procedural due process must be computation of the daily rate for salary-related benefits.
complied with. Private respondent admits that, prior to 18 August 1986, petitioner used a divisor of 314 in
 Substantial due process—the grounds for termination of employment must be based on arriving at the daily wage rate of monthly-salaried employees. Private respondent also concedes
just or authorized causes. that the divisor was changed to 303 for purposes of computing overtime pay only. Such change
o Although abandonment of work is within the scope of the just causes for was made known to the employees through its Memorandum.
termination (under gross and habitual neglect by the emlployee of his duties), the On appeal, the NLRC made a complete reversal of the ruling by the Labor Arbiter.
court found that there was not abandonment on the part of Race.
 The records also failed to show that the said charges were proven and that respondent Issue:Whether or not there was underpayment of holiday pay.
was duly informed and heard with regard to the accusations.
 And as Victory Liner is the employer, it is its burdened to prove just cause for terminating Held:No, there was no underpayment of holiday pay.
the employment of respondent with clear and convincing evidence, and that Victory Liner Article 94 of the Labor Code provides that every worker shall be paid his regular daily wage
failed to discharge this burden, we hold that respondent was dismissed without just cause during regular holidays and that the employer may require an employee to work on any holiday
by the petitioner. but such employee shall be paid a compensation equivalent to twice his regular rate.
In Union of Filipro Employees vs Vivar, Jr., the Court held that the divisor assumes an
[2.b.] Reinstatement important role in determining whether or not holiday pay is already included in the monthly paid
employee‘s salary and in the computation of his daily rate.
 Race was willing to be hired as a dispatcher or conductor, and was no longer Since it is a question of fact, the inter-office Memorandum provides for a divisor of 303 days
requesting to be reinstated as a driver since he cannot drive anymore due to his leg in computing overtime pay. The clear import of this document is that from the 365 days in a year,
injury. Producers Bank deduct 52 rest days which gives a total of 313 days. If 313 days is the number of
 Even assuming that Race was willing, reinstatement would still be unwarranted. working days of the employees then, then the employees are not being paid the corresponding
o Since Victory Liner is a common carrier, and is obliged to exercise extra-ordinary holiday pay when the bank used 303 days as its divisor.
diligence in transporting its passengers, it would be a violation of this diligence to However, upon review, the Supreme Court agrees with the finding of the Labor Arbiter that
reinstate an incapacitated driver. the reduction of the divisor to 303 was done for the sole purpose of increasing the employees‘
o An employer may not be compelled to continue to employ such persons overtime pay, and was not meant to exclude holiday pay from the monthly salary of petitioner‘s
whose continuance in the service will patently be inimical to his employees. In fact, it was expressly stated in the inter-office memorandum - also referred to by
interests. private respondent in its pleadings - that the divisor of 314 will still be used in the computation for
Therefore, in lieu of reinstatement, payment to respondent of separation pay equivalent to one cash conversion and in the determination of the daily rate. Thus, based on the records of this case
month pay for every year of service and the parties' own admissions, the Court holds that petitioner has complied with the
requirements of Article 94 of the Labor Code.
115. Producers Bank vs NLRC
Facts:On March 31, 1989, Labor Arbiter Nieves V. de Castro found Producers Bank Employees 92. BIENVENIDO D. GOMA, VS.PAMPLONA PLANTATION INCORPORATED
Association‘s claims to be unmeritorious and dismissed its complaint of diminution of benefits, non-
FACTS Petitioner commenced the instant suit by filing a complaint for illegal dismissal,
compliance with Wage Order No. 6 and non-payment of holiday pay against the Producers Bank.
underpayment of wages, non-payment of premium pay for holiday and rest day, five (5) days
The Labor Arbiter found that the divisor used by petitioner in arriving at the employees'
incentive leave pay, damages and attorney‘s fees, against the respondent. The case was filed with
daily rate for the purpose of computing salary-related benefits is 314. However, the divisor was
the Sub-Regional Arbitration Branch No. VII of Dumaguete City. Petitioner claimed that he worked
reduced to 303 by virtue of an inter-office memorandum issued on 13 August 1986, to wit –
as a carpenter at the Hacienda Pamplona since 1995; that he worked from 7:30 a.m. to 12:00
To increase the rate of overtime pay for rank and filers, we are pleased to inform that
noon and from 1:00 p.m. to 5:00 p.m. daily with a salary rate of P90.00 a day paid weekly; and
effective August 18, 1986, the acting Conservator approved the use of 303 days as divisor
that he worked continuously until 1997 when he was not given any work assignment. On a claim
in the computation of Overtime pay. The present Policy of 314 days as divisor used in the
that he was a regular employee, petitioner alleged to have been illegally dismissed when the
computation for cash conversion and determination of daily rate, among others, still
respondent refused without just cause to give him work assignment. Thus, he prayed for
remain, Saturdays, therefore, are still considered paid rest days.
backwages, salary differential, service incentive leave pay, damages and attorney‘s fees. 

On the
Corollarily, the Acting Conservator also approved the increase of meal allowance from
P25.00 to P30.00 for a minimum of four (4) hours of work for Saturdays. other hand, respondent denied having hired the petitioner as its regular employee. It instead

71
argued that petitioner was hired by a certain Antoy Cañaveral, the manager of the hacienda at the
time it was owned by Mr. Bower and leased by Manuel Gonzales, a jai-alai pelotari known as It further appears that on Jan. 3, 1962, the contract with the appellees for the use of the Branch
―Ybarra.‖ Respondent added that it was not obliged to absorb the employees of the former owner. Office premises was terminated and while the effectivity thereof was Jan. 31, 1962, the appellees
no longer used it. Because of this, and to comply with the mandate of the TWS, Corporate
ISSUE Whether or not petitioner is a regular employee. Secretary Gabino Canilao went over to the branch office, and, finding the premises locked, and,
HELD: Article 280 of the Labor Code provides that there are two kinds of REGULAR EMPLOYEES, being unable to contact Ms. Sevilla, he padlocked the premises on June 4, 1962 to protect the
namely: interests of the Tourist World Service. When neither the appellant Lina Sevilla nor any of her
employees could enter the locked premises, a complaint wall filed by them with a prayer for the
 Regular employees by nature of work – Those who are engaged to perform activities issuance of mandatory preliminary injunction.
which are usually necessary or desirable in the usual business or trade of the employer
(regardless of length of service); and The RTC dismissed the Petitioners‘ case. In the appeal, Ms. Sevilla claims that she was not an
employee of the TWS, to the end that her relationship with TWS was one of a joint business
venture. Both the RTC and CA found the Petitioner, Lina Sevilla, to be a mere employee (branch
• Regular employees by years of service – Those who have rendered at least one year of manager) of said TWS.
service, whether continuous or broken, with respect to the activity in which they are
employed (regardless of nature of work). Issue: Whether or not the CA gravely erred when it ruled that Ms. Sevilla is an employee of TWS

Held: Yes. The records will show that the Ms. Sevilla was not subject to control by TWS, either as
If the law has been performing the job for at least a year, even if the performance is not
to the result of the enterprise or as to the means used in connection therewith. Also, she was not
continuous or merely intermittent, the law deems the repeated and continuing need for its
in the company‘s payroll and, unlike an employee who earns a fixed salary, she retains a four-
performance as sufficient evidence of the necessity, if not indispensability, of that activity to the
percent (4%) commission from airline bookings. It is the SC's considered opinion, that when the
business.
petitioner, Lina Sevilla, agreed to man the private respondent, TWS's Ermita office, she must have
Petitioner was engaged to perform carpentry work. His services were needed for a period of 2 done so pursuant to a contract of agency. The SC ruled that for its unwarranted revocation of the
years until such time that respondent decided not to give him work assignment anymore. Owing to contract of agency, the TWS, should be sentenced to pay moral damages for breaches of contract.
his length of service, petitioner became a regular employee, by operation of law.
94. Grand Asian Shipping Lines, Inc. vs. Wilfredo Galvez; G.R. No. 178184; January 29,2014
The principal test used to determine whether employees are PROJECT EMPLOYEES as Topic: Normal Hours of Work
distinguished from REGULAR EMPLOYEES, is whether or not the employees were assigned to carry
out a specific project or undertaking, the duration or scope of which was specified at the time the Facts: Sometime in January 2000, one of the vessel‘s Oilers, Richard Abis,reported to GASLI‘s
employees were engaged for that project. In this case, apart from the respondent‘s bare allegation Office and Crewing Manager, Elsa Montegrico, an alleged illegal activity being committed by
that petitioner was a project employee, it had not shown that petitioner was informed that he respondents aboard the vessel. Abis revealed that after about four to five voyages a week, a
would be assigned to a specific project or undertaking. Neither was it established that he was substantial volume of fuel oil is unconsumed and stored in the vessel‘s fuel tanks. However, Gruta
informed of the duration and scope of such project or undertaking at the time of his engagement. would misdeclare it as consumed fuel in the Engineer‘s Voyage Reports. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at nighttime. Respondents would then divide
93. DR. CARLOS L. SEVILLA and LINA O. SEVILLA v. CA, TOURIST WORLD SERVICE, among themselves the proceeds of the sale. Abis added that he was hesitant at first to report
INC. (TWS), ELISEO S. CANILAO, and SEGUNDINA NOGUERA; G.R. No. L-41182-3; April respondents‘ illegal activities for fear for his life
16, 1988
An investigation on the alleged pilferage was conducted.
Topic: Compensable hours worked; Employer-employee relationship, test to determine its
existence; Obligations and contracts, agency construed, cannot be revoked at will A formal complaint for qualified theft was filed against respondents.

Facts: On the strength of a contract by and between Mrs. Noguera, the TWS, represented by Mr. Meanwhile, GASLI placed respondents under preventive suspension. After conducting
Eliseo Canilao, and the latter leased the premises belonging to the former as a branch office. administrative hearings, petitioners decided to terminate respondents from employment.
When the branch office was opened, it was managed by Ms. Lina Sevilla. Eventually, the TWS has Respondents (except Sales) were thus served with notices informing them of their termination for
been informed that Ms. Sevilla was connected with a rival firm, the Philippine Travel Bureau. Since serious misconduct, willful breach of trust, and commission of a crime or offense against their
the branch office was losing, the TWS considered closing down its office. employer.

72
 overstatement of fuel consumption as revealed in the Engineer‘s Voyage Reports. The report of
It appears that several other employees and crewmembers of GASLI‘s two other vessels were Jade Sea Land Inspection Services only declares the actual usage and amount of fuel consumed
likewise suspended and terminated from employment. Nine seafarers of M/T Deborah Uno were for a particular voyage. There are no other sufficient evidence to show that respondents
charged and terminated for insubordination, defying orders and refusal to take responsibility of participated in the commission of a serious misconduct or an offense against their employer.
cargo products/fuel. For vessel M/T Coral Song, two crewmembers were dismissed for serious act
of sabotage and grave insubordination. As for the second ground for respondents‘ termination, which is loss of trust and confidence,
distinction should be made between managerial and rank and file employees. "[W]ith respect to
Respondents and the other dismissed crewmembers of M/T Deborah Uno and M/T Coral Song rank-and- file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof
(complainants) filed with the NLRC separate complaints for illegal suspension and dismissal, of involvement in the alleged events x x x [while for] managerial employees, the mere existence of
underpayment/non-payment of salaries/wages, overtime pay, premium pay for holiday and rest a basis for believing that such employee has breached the trust of his employer would suffice for
day, holiday pay, service incentive leave pay, hazard pay, tax refunds and indemnities for damages his dismissal.‖
and attorney‘s fees against petitioners.
Galvez, as the ship captain, is considered a managerial employee since his duties involve the
Issue:Is there a valid dismissal by the employer? governance, care and management of the vessel. Gruta, as chief engineer, is also a managerial
employee for he is tasked to take complete charge of the technical operations of the vessel. As
Held:Yes, Galvez and Gruta were validly dismissed on the ground of loss of trust and confidence; captain and as chief engineer, Galvez and Gruta perform functions vested with authority to
there were no valid grounds for the dismissal of Arguelles, Batayola, Fresnillo, Noble, Dominico, execute management policies and thereby hold positions of responsibility over the activities in the
Nilmao and Austral. vessel. Indeed, their position requires the full trust and confidence of their employer for they are
entrusted with the custody, handling and care of company property and exercise authority over it.
In termination disputes, the burden of proving that the dismissal is for a just or valid cause rests
on the employers. Failure on their part to discharge such burden will render the dismissal illegal. Thus, the Court found that there is some basis for the loss of confidence reposed on Galvez and
As specified in the termination notice, respondents were dismissed on the grounds of (i) serious Gruta. The certification issued by De la Rama stated that there is an overstatement of fuel
misconduct, particularly in engaging in pilferage while navigating at sea, (ii) willful breach of the consumption. Notably, while respondents made self-serving allegations that the computation made
trust reposed by the company, and (iii) commission of a crime or offense against their employer. therein is erroneous, they never questioned the competence of De la Rama to make such
Petitioners claim that based on the sworn statement of Abis, joint affidavit of Bernabe and De la certification. Neither did they question the authenticity and validity of the certification. Thus, the
Rama, letter of petitioner Francisco requesting assistance from the CIDG, formal complaint sheet, fact that there was an overstatement of fuel consumption and that there was loss of a
complaint and supplementary complaint affidavit of Montegrico, CIDG‘s letter referring considerable amount of diesel fuel oil remained unrefuted. Their failure to account for this loss of
respondents‘ case to the Office of the City Prosecutor of Manila, resolution of the City Prosecutor company property betrays the trust reposed and expected of them. They had violated petitioners‘
finding a prima facie case of qualified theft, and the Information for qualified theft, there is a trust and for which their dismissal is justified on the ground of breach of confidence.
reasonable ground to believe that respondents were responsible for the pilferage of diesel fuel oil
at M/T Dorothy Uno, which renders them unworthy of the trust and confidence reposed on them. As for Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral, proof of involvement in
the loss of the vessel‘s fuel as well as their participation in the alleged theft is required for they are
After examination of the evidence presented, however, the Court found that petitioners failed to ordinary rank and file employees. No substantial evidence exists in the records that would
substantiate adequately the charges of pilferage against respondents. "[T]he quantum of proof establish their participation in the offense charged. This renders their dismissal illegal, thus,
which the employer must discharge is substantial evidence. x x x Substantial evidence is that entitling them to reinstatement plus full backwages, inclusive of allowances and other benefits,
amount of relevant evidence as a reasonable mind might accept as adequate to support a computed from the time of their dismissal up to the time of actual reinstatement.
conclusion, even if other minds, equally reasonable, might conceivably opine otherwise."
Doctrine:The employer has broader discretion in dismissing managerial employees on the ground
Here, the mere filing of a formal charge, to our mind, does not automatically make the dismissal of loss of trust and confidence than those occupying ordinary ranks. While plain accusations are
valid. Evidence submitted to support the charge should be evaluated to see if the degree of proof not sufficient to justify the dismissal of rank and file employees, the mere existence of a basis for
is met to justify respondents‘ termination. The affidavit executed by Montegrico simply contained believing that managerial employees have breached the trust reposed on them by their employer
the accusations of Abis that respondents committed pilferage, which allegations remain would suffice to justify their dismissal.
uncorroborated. "Unsubstantiated suspicions, accusations, and conclusions of employers do not
provide for legal justification for dismissing employees." The other bits of evidence were also 95. Brotherhood Labor Unity Movement of the Philippines, et al., vs. Zamora, G.R. No.
inadequate to support the charge of pilferage. The findings made by GASLI‘s port captain and 48645, January 7, 1987
internal auditor and the resulting certification executed by De la Rama merely showed an

73
Topic: Employer-employee relationship
Facts: Acting on a certification of the President, the Court of Industrial Relations (CIR) conducted a
The records disclose that on July 11, 1969, BLUM filed a complaint with the now defunct hearing on the controversy then existing between petitioner and respondent unions which the
Court of Industrial Relations, charging San Miguel Corporation, and the following officers: Enrique latter embodied in a "Manifesto", namely: implementation of the 40-Hour Week Law (Republic Act
Camahort, Federico Ofiate Feliciano Arceo, Melencio Eugenia Jr., Ernesto Villanueva, Antonio No. 1880); alleged violations of the collective bargaining agreement dated December 28, 1956
Bocaling and Godofredo Cueto of unfair labor practice as set forth in Section 4 (a), sub-sections concerning "distress pay" ; minimum wage of P5.25; promotional appointments and filling of
(1) and (4) of Republic Act No. 875 and of Legal dismissal. It was alleged that respondents vacancies of newly created positions; additional compensation for night work; wage increases to
ordered the individual complainants to disaffiliate from the complainant union; and that some laborers and employees; and strike duration pay. In addition, respondent unions raised the
management dismissed the individual complainants when they insisted on their union membership. issue of whether the 25% additional compensation for Sunday work should be included in
computing the daily wage and whether, in determining the daily wage of a monthly salaried
On their part, respondents moved for the dismissal of the complaint on the grounds that employee, the salary should be divided by 30 days.
the complainants are not and have never been employees of respondent company but employees
of the independent contractor; that respondent company has never had control over the means Respondent court rendered its decision stating that NAWASA is an agency not performing
and methods followed by the independent contractor who enjoyed full authority to hire and control governmental functions and, therefore, is liable to pay additional compensation for work on
said employees; and that the individual complainants are barred by estoppel from asserting that Sundays and legal holidays conformably to the Eight-Hour Labor Law, even if said days should be
they are employees of respondent company. within the staggered five-work days.

Its motion for reconsideration having been denied, NAWASA filed a petition for review raising
Issue: Whether or not there exist employer-employee relationship.
merely questions of law.
Held: Because of the nature of the petitioners' work as cargadores or pahinantes, supervision as ISSUES:
to the means and manner of performing the same is practically nil. For, how many ways are there 1. Whether NAWASA is performing governmental functions and, therefore, essentially a
to load and unload bottles and wooden shells? The mere concern of both respondent SMC and the service agency of the government;
alleged contractor is that the job of having the bottles and wooden shells brought to and from the
warehouse be done. More evident and pronounced is respondent company's right to control in the 2. Whether NAWASA is a public utility and therefore, exempted from paying additional
discipline of petitioners. Documentary evidence presented by the petitioners establish respondent compensation for work on Sundays and legal holidays;
SMC's right to impose disciplinary measures for violations or infractions of its rules and regulations
as well as its right to recommend transfers and dismissals of the piece workers. The inter-office 3. Whether the intervenors are "managerial employees" within the meaning of Republic Act
memoranda submitted in evidence prove the company's control over the petitioners. That 2377 and, therefore, not entitled to the benefits of Commonwealth Act No. 444, as
respondent SMC has the power to recommend penalties or dismissal of the piece workers, even as amended;
to Abner Bungay who is alleged by SMC to be a representative of the alleged labor contractor, is
the strongest indication of respondent company's right of control over the petitioners as direct 4. In determining whether one has worked in excess of eight hours, whether the undertime
employer. There is no evidence to show that the alleged labor contractor had such right of control for that day should be set-off;
or much less had been there to supervise or deal with the petitioners.
5. In computing the daily wage, whether the additional compensation for Sunday work
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The San Miguel Corporation should be included;
is hereby ordered to REINSTATE petitioners, with three (3) years backwages. However, where
reinstatement is no longer possible, the respondent SMC is ordered to pay the petitioners 6. What is the correct method to determine the equivalent daily wage of a monthly-salaried
separation pay equivalent to one (1) month pay for every year of service employee, especially in a firm which is a public utility?

96. NATIONAL WATERWORKS & SEWERAGE AUTHORITY vs. NWSA CONSOLIDATED RULING:
UNIONS, ET AL. G.R. No. L-18938 August 31, 1964 1. No, NAWASA is not an agency performing governmental functions. Rather, it performs
proprietary functions, and as such comes within the coverage of CA No. 444.
FACTS: Petitioner NAWASA is a government-owned and controlled corporation created under R.A.
No. 1383, while respondent NWSA Consolidated Unions are various labor organizations composed It is not a municipal corporation and was not created for purposes of local government but "for the
of laborers and employees of the NAWASA. The other respondents are intervenors purpose of consolidating and centralizing all waterworks, sewerage and drainage systems in the

74
Philippines under one control and direction and general supervision. The NAWASA, therefore, The chiefs of divisions and sections are given ready policies to execute and standard practices to
though a public corporation, is not a municipal corporation, because it is not an agency of the observe for their execution. Hence, it concludes, they have little freedom of action, as their main
State to regulate or administer the local affairs of the town, city, or district which is incorporated. function is merely to carry out the company‘s orders, plans and policies. They are required to
observe working hours and record their time work and are not free to come and go to their offices,
Moreover, the NAWASA, by its charter, has personality and power separate and distinct from the nor move about at their own discretion. They do not, therefore, come within the category of
government. It is an independent agency of the government although it is placed, for "managerial employees" within the meaning of the law.
administrative purposes, under the Department of Public Works and Communications. It has
continuous succession under its corporate name and may sue and be sued in court. It has 4. No. The proper method should be to deduct the undertime from the accrued leave but pay the
corporate powers to be exercised by its board of directors; it has its own assets and liabilities; and employee the overtime to which he is entitled. This method also obviates the irregular schedule
it may charge rates for its services. that would result if the overtime should be set off against the undertime for that would place the
schedule for working hours dependent on the employee.
2. Yes, petitioner NAWASA is a public utility because its primary function is to construct, maintain
and operate water reservoirs and waterworks for the purpose of supplying water to the 5. For purposes of computing overtime compensation a regular wage includes all payments which
inhabitants, as well as to consolidate and centralize all water supplies and drainage systems in the the parties have agreed shall be received during the work week, including piece- work wages,
Philippines. Petitioner is exempt from paying additional compensation for work on Sundays and differential payments for working at undesirable times, such as at night or on Sundays and
legal holidays conformably to Section 4 of CA No. 444 which provides that the prohibition holidays, and the cost of board and lodging customarily furnished the employee. The "regular rate"
regarding employment on Sundays and holidays unless an additional sum of 25% of the of pay also ordinarily includes incentives bonus or profit-sharing payments made in addition to the
employee‘s regular remuneration is paid shall not apply to public utilities such as those supplying normal basic pay, and that the higher rate for night, Sunday and holiday work is just as much a
gas, electricity, power, water or providing means of transportation or communication. regular rate as the lower rate for daytime work. The higher rate is merely an inducement to accept
employment at times which are not as desirable from a workman‘s standpoint.
In the case at bar, there is a collective bargaining agreement entered into between the NAWASA
and respondent unions it was agreed that all existing benefits enjoyed by the employees and Therefore, differential pay shall be included in computing the weekly wages of those employees
laborers prior to its effectivity shall remain in force and shall form part of the agreement, among and laborers who worked seven days a week and were continuously receiving 25% Sunday
which certainly is the 25% additional compensation for work on Sundays and legal holidays. It differential for a period of three months immediately preceding the implementation of Republic Act
may, therefore, be said that while under CA No. 444 a public utility is not required to pay 1880.
additional compensation to its employees and workers for work done on Sundays and legal
holidays, there is, however, no prohibition for it to pay such additional compensation if it 6. The correct computation shall be (a) the monthly salary divided by the actual number of
voluntarily agrees to do so. The NAWASA committed itself to pay this additional compensation. It working hours in a month or (b) the regular monthly compensation divided by the number of
must pay not because of compulsion of law but because of contractual obligation. working days in a month.

3. The term ‗managerial employee in the Act shall mean either (a) any person whose primary duty However, insofar as the employees of the General Auditing Office and of the Bureau of Public
consists of the management of the establishment in which he is employed or of a customarily Works assigned to work in the NAWASA are concerned, as they are government employees and
recognized department or subdivision thereof, or (b) any officer or member of the managerial should be governed by Section 254 of the Revised Administrative Code. This section provides that
staff. in making payment for part of a month, the amount to be paid for each day shall be determined
by dividing the monthly pay into as many parts as there are days in the particular month.
One of the distinguishing characteristics by which a managerial employee may be known as
expressed in the explanatory note of Republic Act No. 2377 is that he is not subject to the rigid
observance of regular office hours. The true worth of his service does not depend so much on the 97. SAN MIGUEL BREWERY VS DEMOCRATIC LABOR UNION; GR NO. L-18353
time he spends in office but more on the results he accomplishes. In fact, he is free to go out of July 31, 1963
office anytime. TOPIC: Normal Hours of Work
The intervenors herein are holding position of responsibility. One of them is the Secretary of the FACTS: Respondent Democratic Labor Association filed complaint against the San Miguel Brewery,
Board of Directors, private secretary of the general manager and public relations officer, and many Inc. embodying 12 demands for the betterment of the conditions of employment of its members.
chiefs of divisions or sections and others are supervisors and overseers. Respondent court found The union manifested its desire to confine its claim to its demands for overtime, night-shift
that their primary duties do not bear any direct relation with the management of the NAWASA, nor differential pay, and attorney's fees, although it was allowed to present evidence on service
do they participate in the formulation of its policies nor in the hiring and firing of its employees.

75
rendered during Sundays and holidays, or on its claim for additional separation pay and sick and The Court is, therefore, of the opinion that the industrial court erred in holding that the
vacation leave compensation. Eight-Hour Labor Law applies to the employees composing the outside service force and in
ordering that they be paid the corresponding additional compensation.
After the case had been submitted for decision, Presiding Judge Jose S. Bautista rendered
decision expressing his disposition with regard to the points embodied in the complaint on which OTHER RELEVANT INFO:
evidence was presented. With regard to overtime compensation, Judge Bautista held that the
provisions of the Eight-Hour Labor Law apply to the employees concerned for those working in the As to the claim for pay for Sundays and holidays for service performed by some claimants who
field or engaged in the sale of the company's products outside its premises and consequently they were watchmen or security guards, it is contended that these employees are not entitled to extra
should be paid the extra compensation accorded them by said law in addition to the monthly pay for work done during these days because they are paid on a monthly basis and are given one
salary and commission earned by them, regardless of the meal allowance given to employees who day off which may take the place of the work they may perform either on Sunday or any holiday.
work up to late at night. The Court disagree with this claim because it runs counter to law. Section 4 of Commonwealth Act
Its motion for reconsideration having been denied by the industrial court en banc, which No. 444 expressly provides that no person, firm or corporation may compel an employee or laborer
affirmed the decision of the court a quo with few exceptions, the San Miguel Brewery, Inc. to work during Sundays and legal holidays unless he is paid an additional sum of 25% of his
interposed the present petition for review. regular compensation. This proviso is mandatory, regardless of the nature of compensation. The
only exception is with regard to public utilities who perform some public service.
ISSUE: Whether the Eight-Hour Labor Law applies to respondent workers who are working in the
field or engaged in the sale of the company's products outside its premises 98. ARICA VS NLRC, 170 SCRA 776

HELD: NO.The Eight-Hour Labor Law only has application where an employee or laborer is paid Facts: Petitioners Teofilo Arica et al filed a complaint against Standard Fruits Corporation
on a monthly or daily basis, or is paid a monthly or daily compensation, in which case, if he is (STANFILCO) Philippines for allegedly not paying the workers for their assembly time which takes
made to work beyond the requisite period of 8 hours, he should be paid the additional place every work day from 5:30am to 6am.
compensation prescribed by law. This law has no application when the employee or laborer is paid
on a piece-work, "pakiao", or commission basis, regardless of the time employed. The philosophy The assembly time consists of the following activities:
behind this exemption is that his earnings in the form of commission based on the gross receipts 1. Roll call of the workers;
of the day. His participation depends upon his industry so that the more hours he employs in the 2. Getting their assignments from the foreman;
work the greater are his gross returns and the higher his commission. This philosophy is better 3. Filling out the Laborer‘s Daily Accomplishment Report;
explained in Jewel Tea Co. v. Williams, as follows: 4. Getting tools and equipments from the stockroom;
The reasons for excluding an outside salesman are fairly apparent. Such salesman, to a 4. Going to the field to work.
greater extent, works individually. There are no restrictions respecting the time he shall
work and he can earn as much or as little, within the range of his ability, as his ambition They contended that these activities are necessarily for private respondent‘s benefit. The private respondent averred
dictates. In lieu of overtime he ordinarily receives commissions as extra compensation. He that the thirty-minute assembly time has been a long time company practice, thus, not considered
works away from his employer's place of business, is not subject to the personal as waiting time. The LA dismissed the complaint. The LA agreed that the the thirty-minute
supervision of his employer, and his employer has no way of knowing the number of assembly time long practiced cannot be considered waiting time or work time and, therefore,
hours he works per day. not compensable. The NLRC upheld the decision of the LA for the same reason.

In this case, true it is that the employees concerned are paid a fixed salary for their Issue: WON the 30-minute activity of the petitioners before the scheduled working time is
month of service, such as Benjamin Sevilla, a salesman, P215; Mariano Ruedas, a truck driver, compensable under the Labor Code.
P155; Alberto Alpaza and Alejandro Empleo, truck helpers, P125 each, and sometimes they work in
excess of the required 8-hour period of work, but for their extra work they are paid a commission Held: No. The thirty minute assembly time long practiced and institutionalized by mutual consent
which is in lieu of the extra compensation to which they are entitled. The record shows that these of the parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be
employees during the period of their employment were paid sales commission ranging from P30, considered as ‗waiting time‘ within the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing
P40, sometimes P60, P70, to sometimes P90, P100 and P109 a month depending on the volume of the Labor Code.
their sales and their rate of commission per case. And so, insofar is the extra work they perform,
they can be considered as employees paid on piece work, "pakiao", or commission basis. The thirty (30)-minute assembly is a deeply-rooted, routinary practice of the employees, and the
proceedings attendant thereto are not infected with complexities as to deprive the workers the
time to attend to other personal pursuits. In short, they are not subject to the absolute control of

76
the company during this period; otherwise, their failure to report in the assembly time would
justify the company to impose disciplinary measures. ISSUES:
(a) Whether or not petitioner‘s members are entitled to ECOLA during the semestral break from
Furthermore, their houses are situated right on the area where the farms are located, such that November 7 to December 5, 1981 of the 1981-1982 school year.
after the roll call, which does not necessarily require the personal presence, they can go back to
their houses to attend to some chores. In short, they are not subject to the absolute control of the (b) Whether or not 60% of the incremental proceeds of increased tuition fees shall be devoted
company during this period. exclusively to salary increase

99. UNIVERSITY OF PANGASINAN FACULTY UNION VS UNIVERISTY OF PANGASINAN; (c) Whether or not alleged payment of salaries for extra loads on September 21, 1981 was proven
GR NO. L-63122 by substantial evidence

FACTS: On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed a HELD: It is beyond dispute that the petitioner‘s members are full-time employees receiving their
complaint against the private respondent with the Arbitration Branch of the NLRC, Dagupan monthly salaries irrespective of the number of working days or teaching hours in a month.
District Office, Dagupan City. The complainant seeks: (a) the payment of Emergency Cost of Living However, they find themselves in a most peculiar situation whereby they are forced to go on leave
Allowances (ECOLA) for November 7 to December 5, 1981, a semestral break; (b) salary increases during semestral break. These semestral breaks are in nature of work interruptions beyond the
from the sixty (60%) percent of the incremental proceeds of increased tuition fees; and (c) employees‘ control. The duration of the semestral break varies from year to year dependent on a
payment of salaries for suspended extra loads. variety of circumstances affecting at times only the private respondent but at other times all
educational institutions in the country. As such, these breaks cannot be considered as absences
The petitioner‘s members are full-time professors, instructors, and teachers of respondent within the meaning of the law which deductions may be made from monthly allowances. The ―No
University. The teachers in the college level teach for normal duration of ten (10) months a school work, no pay‖ principles does not apply in the instant case. The petitioner‘s members received
year, divided into two (2) semesters of five (5) months each, excluding the two (2) months their regular salaries during this period. It is clear from the aforequoted provision of law that it
summer vacation. These teachers are paid salaries on the regular basis. contemplates a ―no work‖ situation where the employees voluntarily absent themselves.
Petitioners, in the case at bar, certainly do not, ad voluntatem, absent themselves during
In November and December of 1981, the petitioner‘s members were fully paid their regular semestral break. Rather, they are constrained to take mandatory leave from work. For this they
monthly salaries. However, from November 7 to December 5, during the semestral break. They cannot be faulted nor can they be begrudged that which is due them under the law. To a certain
were not paid their ECOLA. The private respondent claims that the teachers are not entitled extent, the private respondent san specify dates when no class would be held. Surely, it as not the
thereto because the semestral break is not an integral part of the school year and there being no intention of the framers of the la to allow employers to withhold employee benefits by the simple
actual service rendered by the teachers during said period, the principle of :No work, no pay‖ expedient of unilaterally imposing ―no work‖ days and consequently avoiding compliance with the
applies. mandate of the law for those days.

During the same school year (1981-1982), the private respondent as authorized by the Ministry of This Court is not guilty of usurpation of legislative functions as claimed by the respondents. We
Education and Culture to collect as it did not collect, from its students a fifteen (15%) percent expressed the opinion in the University of the East case that benefits mandates by law and
increase of tuition fees. Petitioner‘s members demanded a salary increase effective the first collective bargaining may be charged to the 12% return on investment within 40% incremental
semester of said school year to be taken from the sixty (60%) percent incremental proceeds of the proceeds of tuition increase. As admitted by the respondent, we were merely made this statement
increased tuition fees. Private respondent refused, compelling the petitioner to include said as a suggestion in answer to the respondent‘s query as to where then, under the law, can such
demand in the complaint filed in the case at bar. While the complaint was pending in the benefits be charged. We were merely interpreting the meaning of the law within the confines of its
arbitration branch, the private respondent granted an across-the-board salary increase of 5.86%. provisions. The la provides that 60% should go to wage increases and 40% to institutional
Nonetheless, the petitioner is still pursuing full distribution of the 60% of the incremental proceeds developments, student assistance, extension services, and return on investments (ROI). Under the
as mandatory by the Presidential Decree No. 451. law, the last item ROI has flexibility sufficient to accommodate other purposes of the law and the
needs of the university. ROI is not set aside for any one purpose of the university such as profits
Aside from their regular loads, some petitioner‘s members were given extra loads to handle during or returns on investments. The amount may be used to comply with other duties and obligations
the same 1981-1982 school year. Some of them had extra loads to teach on September 21, 1981, imposed by law which the university exercising managerial prerogatives finds cannot under
but they were unable to teach as classes in all level throughout the country were suspended, present circumstances, be funded by other revenue sources. It may be applied to any other
although said days was proclaimed by the President of the Philippines as a working holiday. Those collateral purpose of the university or invested elsewhere. Hence, the framers of the law intended
with extra loads to teach on said day claimed they were not paid their salaries for those loads, but this portion of the increases in tuition fees to be general fund to cover up for the university‘s
the private respondent claim otherwise. miscellaneous expenses and, precisely, for this reason, it was not so delimited. Besides, ROI is a

77
return of profit over and above the profits it may had prior to the tuition increase. The earning commissioners has reversed the earlier decision. Stating that, the public respondent declared that
capacities of private educational institutions are not dependent on the increases in tuition fees the new work schedule deprived the employees of the benefits of a time-honored company
allowed by P.D. 451. Accommodation of the allowances required by law requires wise and prudent practice of providing its employees a 30-minute paid lunch break resulting in an unjust diminution
management of all the university resources together with the incremental proceeds of tuition of company privileges prohibited by Art. 100 of the Labor Code, as amended.
increases. Cognizance should be taken of the fact that the private respondent had, before P.D.
451, managed to grant all allowances required by law. It cannot now claim that it could not afford Issue: Is the act of management in revising the work schedule of its employees and discarding
the same, considering that additional funds are even granted them by the law in question. We find their paid lunch break constitutive of unfair labor practice?
no compelling reason, therefore, to deviate from our previous ruling in the University of the East Ruling: The Office of the Solicitor General filed in a lieu of comment a manifestation and motion
case even as we take the second hard look at the decision requested by the private respondent. recommending that the petitioner be granted, alleging that the 14 August 1992 memorandum
This case as decided in 1982 when PDs 1614, 1634, 1678 and 1713 which are also the various which contained the new work schedule was not discriminatory of the union members nor did it
Presidential Decrees on ECOLA were already in force. PD 451 was interpreted in the light of those constitute unfair labor practice on the part of petitioner.
subsequent legislations which bear upon but don not modify nor amend, the same. We need not
go beyond the ruling in the University of the East case. We agree, hence, we sustain petitioner. The right to fix the work schedules of the
employees rests principally on their employer. In the instant case petitioner, as the employer, cites
Finally, disposing of the respondent‘s charge of petitioner‘s lack of legal capacity to sue, suffice it as reason for the adjustment the efficient conduct of its business operations and its improved
to say that this question can no longer be raised initially on appeal or certiorari. It is quite belated production.
for the private respondent to question the personality of the petitioner after it had dealt with it as
a party in the proceedings below. Furthermore, it as not disputed that the petitioner is a duly The case before us does not pertain to any controversy involving discrimination of
registered labor organization grants it the rights of a legitimate labor organization and recognition employees but only the issue of whether the change of work schedule, which management deems
by the respondent university is not necessary for it to institute this action in behalf of its members necessary to increase production, constitutes unfair labor practice. As shown by the records, the
to protect their interest and obtain relief from grievances. The issues raised by the petitioner do change effected by management with regard to working time is made to apply to all factory
not involve pure money claims but are more intricately intertwined with conditions of employment employees engaged in the same line of work whether or not they are members of private
respondent union. Hence, it cannot be said that the new scheme adopted by management
100. Sime Darby Pilipinas, Inc. vs NLRC; G.R. No. 119205, April 15, 1998 prejudices the right of private respondent to self-organization.
TOPIC: Meal Periods
Facts: Sime Darby is engaged in the manufacture of automotive tires, tubes and other rubber
products. Private respondent is an association of the monthly salaried employees of the Sime Management is free to regulate, according to its own discretion and judgment, all aspects
Darby factory workers in Marikina. Prior to the controversy, all employees of Sime Darby worked of employment, including hiring, work assignments, working methods, time, place and manner of
from 7:45am to 3:45pm with a 30-minute paid "on call" lunch break. work, processes to be followed, supervision of workers, working regulations, transfer of
On August 14, 1992, the company issued a memorandum to all factory employees employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.
advising all its monthly salaried employees in Marikina Tire plant except those in the warehouse Further, management retains the prerogative, whenever exigencies of the service so require, to
and Quality Assurance Dept., of a change in work schedules. (M-F, 7:45am-4:45pm and Sat change the working hours of its employees. So long as such prerogative is exercised in good faith
7:45am-11:45am) with coffee break of 10 minutes between 9:30am-10:30am and 2:30pm-3:30pm for the advancement of the employer's interest and not for the purpose of defeating or
and lunch break between 12nn-1pm (M-F). circumventing the rights of the employees under special laws or under valid agreements, this
Court will uphold such exercise
Because of this memorandum, the association filed a complaint in behalf of its members a
complaint with labor Arbiter for unfair labor practice, discrimination and evasion of liability.
101. Pan American World Airways System vs. Pan American Employees Association
However, the labor arbiter dismissed the complaint on the grounds that the elimination of the 30
minute paid lunch break constituted a valid exercise of management prerogative and that the new Topic: Meal period
work schedule did not have the effect of diminishing the benefits for the work did not exceed 8
hours. FACTS: The employees of PAN American World Airways System allege that the company does not
provide them of a one-hour break period. The employees were asked to wait in case of any
Labor arbiter added that it would be unjust if they continue to be paid during their lunch emergencies while having their break or they will be reprimanded. Thus, the petition of the
break even if they are no longer on call or required to work during the break. employees to ask the court for a proper compensation from the employers. The employees allege
that the said one-hour break actually constitutes working overtime.
The association appealed to the NLRC but NLRC has affirmed the labor arbiter's decision
and dismissed the appeal. However, in the motion for reconsideration, NLRC having two new
ISSUE: Does the said period constitute as a break time or meal break?
78
HELD: NO. Where during the so-called meal period, the" laborers are required to stand by for employer, is not counted as working time only where the work is broken or is not
emergency work, or where said meal hour is not one of complete rest, such period is considered continuous.
overtime a. The determination as to whether work is continuous or not is mainly one of fact
which We shall not review as long as the same is supported by evidence.
102. National Development Company v. CIR, G.R. No. L-15422, November 30, 1962 i. Indeed, it has been said that no general rule can be laid down is to what
constitutes compensable work, rather the question is one of fact
Facts:National Development Company (NDC) hires workers from National Textile Workers Union depending upon particular circumstances, to be determined by the
(NTWU). NDC has four (4) shifts, one (1) shift from 8am-4pm, and three (3) shifts from 6am-2pm. controverted in cases. (31 Am. Jurisdiction Sec. 626 pp. 878.)
NDC credits workers for eight (8) hours for each shift but only pays six (6) hours worth of pay if b. In this case, the CIR's finding that work in the petitioner company was
they let a worker extend work up to the next shift. continuous and did not permit employees and laborers to rest completely is not
without basis in evidence and following our earlier rulings, shall not disturb the
The NTWU filed a case with the CIR for payment of overtime pay and the inclusion of the meal same.
time as compensable time since the work is continuous and the workers cannot rest while in the i. While it may be correct to say that it is well-high impossible for an
two (2) shifts. employee to work while he is eating, yet under Section 1 of Com. Act No.
444 such a time for eating can be segregated or deducted from his work,
The CIR decided in favor of NTWU and ordered payment of the meal time to be included as if the same is continuous and the employee can leave his working place
overtime pay. rest completely.
ii. The time cards show that the work was continuous and without
NDC appealed to the SC. NDC alleged that the workers have enough free time and thus there interruption.
should be no additional compensation. Furthermore, it alleged that the CIR does not have iii. From these facts, the CIR correctly concluded that work in petitioner
jurisdiction over claims for overtime compensation. company was continuous and therefore the mealtime breaks should be
counted as working time for purposes of overtime compensation.
Issue/Held: 1. Petitioner gives an eight-hour credit to its employees who work
a single shift say from 6 a.m. to 2 p.m. Why cannot it credit
1) WoN the CIR has jurisdiction? YES them sixteen hours should they work in two shifts?
2) WoN the meal time should be compensable? YES 3) There is no decision by the CIR en bancfrom which petitioner can appeal to the SC.
3) WoN the appeal by the NDC to the SC is proper? NO a. As already indicated above, the records show that petitioner's motion for
reconsideration of the order of March 19, 1959 was dismissed by the CIR en
Ratio: banc because of petitioner's failure to serve a copy of the same on the union.
1) For the CIR to have such jurisdiction the following requisites must be complied with i. Section 15 of the rules of the CIR, in relation to Section 1 of
a. There must exist between the parties an employer-employee relationship or the Commonwealth Act No. 103, states:
claimant must seek his reinstatement; and ii. The movant shall file the motion (for reconsideration), in six copies
b. The controversy must relate to a case certified by the President to the CIR as one within five (5) days from the date on which he receives notice of the
involving national interest, or must arise either under the Eight-Hour Labor Law, order or decision, object of the motion for reconsideration, the same to
or under the Minimum Wage Law. be verified under oath with respect to the correctness of the allegations
i. In default of any of these circumstances, the claim becomes a mere of fact, and serving a copy thereof personally or by registered mail, on
money claim that comes under the jurisdiction of the regular courts. the adverse party. The latter may file an answer, in six (6) copies, duly
ii. Here, petitioner does not deny the existence of an employer-employee verified under oath. (Emphasis ours.)
relationship between it and the members of the union. b. The provision in Commonwealth Act No. 103 authorizing the presentation of a
iii. Neither is there any question that the claim is based on the Eight-Hour motion for reconsideration of a decision or order of the judge to the CIR, en
Labor Law (Com. Act No. 444, as amended). banc and not direct appeal therefore to the SC, is also in accord with the principal
1. We therefore rule in favor of the jurisdiction of the CIR over the of exhaustion of administrative remedies before resort can be made to the SC
present claim. Court.
2) It will be noted that, under the law, the idle time that an employee may spend for resting Petitioner's motion for reconsideration having been dismissed for its failure to serve a copy of the
and during which he may leave the spot or place of work though not the premises of his same on the union, there is no decision of the CIR en banc that petitioner can bring to the SC for
review.

79
 electricity, power, water, or providing means of transportation or communication.
103. MERCURY DRUG VS. DAYAO, GR NO. L-30452, SEPTEMBER 30, 1982
In this case, the petitioner does not fall on exemptions. On the second issue, their 25% additional
The respondents filed a petition against the petitioner praying: 1) payment of their unpaid back compensation for work done on Sundays and Legal Holidays were not included in their respective
wages for work done on Sundays and legal holidays plus 25c/c additional compensation from date monthly salaries. The petitioner contention was not supported by substantial evidence.
of their employment up to June 30, 1962; 2) payment of extra compensation on work done at
night; 3) reinstatement of Januario Referente and Oscar Echalar to their former positions with The last issue, the Mercury Drug Co., Inc., maintains a chain of drugstores that are open every
back salaries; and, as against the respondent union, for its disestablishment and the refund of all day of the week and, for some stores, up to very late at night because of the nature of the
monies it had collected from petitioners. pharmaceutical retail business. The respondents knew that they had to work Sundays and holidays
and at night, not as exceptions to the rule but as part of the regular course of employment.
The respondent court rendered its decision that: Presented with contracts setting their compensation on an annual basis with an express waiver of
extra compensation for work on Sundays and holidays, the workers did not have much choice. T
1. The claim of the petitioners for payment of back wages correspoding to the first four hours
work rendered on every other Sunday and first four hours on legal holidays should be denied for he private respondents were at a disadvantage insofar as the contractual relationship was
lack of merit; concerned. Workers in our country do not have the luxury or freedom of declining job openings or
filing resignations even when some terms and conditions of employment are not only onerous and
2. Respondent Mercury Drug Company, Inc. is hereby ordered to pay the sixty- nine (69) inequitous but illegal.
petitioners: (a) An additional sum equivalent to 25% of their respective basic or regular salaries for
services rendered on Sundays and legal holidays during the period from March 20, 1961 up to It is precisely because of this situation that the framers of the Constitution embodied the
June 30, 1962; and (b) Another additional sum or premium equivalent to 25% of their respective provisions on social justice (Section 6, Article 11) and protection to labor (Section 9, Article I I) in
basic or regular salaries for nighttime services rendered from March 20, 1961 up to June 30, 1962; the Declaration of Principles And State Policies.
and
104. Emirate Security And Maintenance Systems, Inc. And Roberto A. Yan, Vs.Glenda
3. Petitioners' petition to convert them to monthly employees should be, as it is hereby, denied for M. Menese; G.R. No. 182848; October 5, 2011
lack of merit. Not satisfied with the decision, the respondents filed a motion for its reconsideration.
The motion for reconsideration, was however, denied by the Court en banc. TOPIC: Overtime work; Overtime pay; coverage/ exception

ISSUES: FACTS: Glenda Menese was payroll and billing clerk of Emirate Security and Maintenance Systems,
Inc. (agency). She filed a constructive dismissal by the agency when she was asked to be
a.Whether or not private respondent is entitled to claims for 25% additional compensation transferred to another assignment to accommodate Claro into her position. She also alleged that
performing work during Sunday and legal holidays. She claimed that she was never given overtime pay when she has continued working even during
the one-hour meal break. She filed it with the Labor arbiter which ordered her to be reinstated in
b.Whether or not the 25% compensation had already been included in the private respondents the same position. Overtime was also awarded although no evidence was presented. However,
monthly salaries. NLRC reversed the decision. On appeal to the CA, it was again reversed and affirmed the LA ruling.
SC also affirmed that there was indeed an illegal dismissal as there was bad faith on the side of
c.Whether or not the contracts of employment were null and void was not put in issue, hence, the the management to force Menese to be transferred to a different position which will result in a
respondent court pursuant to the Rules of Court should have refrained from ruling that such diminution of rank and pay.
contracts of employment were null and void. ISSUE: Whether or not Menese is entitled to overtime pay.
HELD: HELD: No.

The Supreme Court dismissed the petition. On the first issue, based on Sec. 4 CA No. 444, No While the labor arbiter declared that Menese‘s claim for overtime pay is unrebutted and,
person, firm or corporation, business establishment or place of center of labor shall compel an indeed, nowhere in the petitioners‘ position paper did they controvert Menese‘s claim, we hold that
employee or laborer to work during Sundays and legal holidays unless he is paid an additional sum the claim must still be substantiated. In Global Incorporated v. Commissioner Atienza, a claim for
of at least twenty-five per centum of his regular remuneration: PROVIDED, HOWEVER, That this overtime pay will not be granted for want of factual and legal basis. In this respect, the records
prohibition shall not apply to public utilities performing some public service such as supplying gas, indicate that the labor arbiter granted Menese‘s claim for holiday pay, rest day and premium pay
on the basis of payrolls. There is no such proof in support of Menese‘s claim for overtime pay
80
other than her contention that she worked from 8:00 a.m. up to 5:00 p.m. She presented no questioned benefits should be considered in the light of the meaning of a managerial employee
evidence to show that she was working during the entire one hour meal break. We thus find the and of the officers or members of the managerial staff, as contemplated under Article 82 of the
NLRC‘s deletion of the overtime pay award in order. Code and Section 2, Rule I Book III of the implementing rules. In other words, for purposes of
forming and joining unions, certification elections, collective bargaining, and so forth, the union
members are supervisory employees. In terms of working conditions and rest periods and
105. NATIONAL SUGAR REFINERIES CORPORATION VS. NLRC entitlement to the questioned benefits, however, they are officers or members of the managerial
G.R. NO. 101761 March 24, 1993 staff, hence they are not entitled thereto.

FACTS: Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is 106. Loon vs Power Master Inc. (GR No. 189404; December 11, 2013)
fully owned and controlled by the Government, operates three (3) sugar refineries, refinery was
privatized on April 11, 1992 pursuant to Proclamation No. 50. 1 Private respondent union Topic: Overtime Work- Overtime pay; Coverage/Exception
represents the former supervisors of the NASUREFCO Batangas Sugar Refinery.
Facts: Respondents Power Master, Inc. and Tri-C General Services employed and assigned the
petitioners as janitors and leadsmen in various Philippine Long Distance Telephone Company
Petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-
(PLDT) offices in Metro Manila area. Subsequently, the petitioners filed a complaint for money
and-file to department heads. The JE Program was designed to rationalized the duties and
claims against Power Master, Inc., Tri-C General Services and their officers, the spouses Homer
functions of all positions, reestablish levels of responsibility, and recognize both wage and
and Carina Alumisin (collectively, the respondents). The petitioners alleged in their complaint that
operational structures. Jobs were ranked according to effort, responsibility, training and working
they were not paid minimum wages, overtime, holiday, premium, service incentive leave, and
conditions and relative worth of the job. As a result, all positions were re-evaluated, and all
thirteenth month pays. They further averred that the respondents made them sign blank payroll
employees including the members of respondent union were granted salary adjustments and
sheets. On June 11, 2001, the petitioners amended their complaint and included illegal dismissal
increases in benefits commensurate to their actual duties and functions.
as their cause of action. They claimed that the respondents relieved them from service in
retaliation for the filing of their original complaint.
We glean from the records that for about ten years prior to the JE Program, the members
of respondent union were treated in the same manner as rank-and file employees. As such, they The LA awarded the petitioners salary differential, service incentive leave, and
used to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles 87, 93 thirteenth month pays. In awarding these claims, the LA stated that the burden of proving the
and 94 of the Labor Code as amended. With the implementation of the JE Program, there are payment of these money claims rests with the employer. However, the LA denied the petitioners‘
adjustments that were made. claims for backwages, overtime, holiday, and premium pays. The LA observed that the
petitioners failed to show that they rendered overtime work and worked on holidays and rest days
Two years after the implementation of the JE Program, specifically the members of herein without compensation. The LA further concluded that the petitioners cannot be declared to have
respondent union filed a complainant with the executive labor arbiter for non-payment of been dismissed from employment because they did not show any notice of termination of
overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code. employment. They were also not barred from entering the respondents‘ premises.

The Labor Arbiter ordered the company to pay overtime pay, rest day, and holiday pay.
NLRC affirmed the decision of the Labor Arbiter. Issue: Whether or not the petitioners are entitled to salary differential, overtime, holiday,
premium, service incentive leave, and thirteenth month pays?
ISSUE: Whether the members of respondent union are entitled to overtime, rest day and holiday Held: Yes, they are entitled to salary differential, holiday, service incentive leaves and thirteenth
pay month pays, but they are not entitled to overtime and premium pays. As in illegal dismissal cases,
the general rule is that the burden rests on the defendant to prove payment rather than on the
HELD: It is not disputed that the members of respondent union are supervisory employees, as plaintiff to prove non-payment of these money claims. The rationale for this rule is that the
defined employees, as defined under Article 212(m), Book V of the Labor Code on Labor Relations. pertinent personnel files, payrolls, records, remittances and other similar documents – which will
show that differentials, service incentive leave and other claims of workers have been paid – are
It is the submission of petitioner that while the members of respondent union, as not in the possession of the worker but are in the custody and control of the employer. However,
supervisors, may not be occupying managerial positions, they are clearly officers or members of the CA was correct in its finding that the petitioners failed to provide sufficient factual basis for the
the managerial staff because they meet all the conditions prescribed by law and, hence, they are award of overtime, and premium pays for holidays and rest days. The burden of proving
not entitled to overtime, rest day and supervisory employees under Article 212 (m) should be entitlement to overtime pay and premium pay for holidays and rest days‘ rests on the employee
made to apply only to the provisions on Labor Relations, while the right of said employees to the because these are not incurred in the normal course of business. In the present case, the
81
petitioners failed to adduce any evidence that would show that they actually rendered service in Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first as a probationary sales
excess of the regular eight working hours a day, and that they in fact worked on holidays and rest agent, and later on as a marketing specialist. He was tasked with soliciting sales for the company,
days. with the corresponding duties of accepting call-ins, referrals, and making client calls and cold calls.
Cold calls refer to the practice of prospecting for clients through the telephone directory. Cityland,
believing that the same is an effective and cost-efficient method of finding clients, requires all its
107. Cagampan vs. NLRC; G.R. Nos. 85122-24; March 22, 1991 marketing specialists to make cold calls. The number of cold calls depends on the sales generated
TOPIC: Labor Standards by each: more sales mean less cold calls. Likewise, in order to assess cold calls made by the sales
staff, as well as to determine the results thereof, Cityland requires the submission of daily progress
I. Working Conditions and Rest Period A. Hours of Work (Art. 82-90 LC) reports on the same.
vii. Overtime Work a. Overtime pay; coverage/exception
FACTS: On October 22, 1991, Cityland issued a written reprimand to petitioner for his failure to submit
cold call reports for September 10, October 1 and 10, 1991. This notwithstanding, petitioner again
On April 17 and 18, 1985, petitioners, all seamen, entered into separate contracts of failed to submit cold call reports for September 2, 5, 8, 10, 11, 12, 15, 17, 18, 19, 20, 22, and 28,
employment with the Golden Light Ocean Transport, Ltd., through its local agency, private as well as for October 6, 8, 9, 10, 12, 13 and 14, 1992. Petitioner was required to explain his
respondent ACE MARITIME AGENCIES, INC. inaction, with a warning that further non-compliance would result in his termination from the
company. In a reply dated October 18, 1992, petitioner claimed that the same was an honest
After being deployed and discharged, petitioners collectively and/or individually filed
omission brought about by his concentration on other aspects of his job. Cityland found said
complaints for non-payment of overtime pay, vacation pay and terminal pay against private
excuse inadequate and, on November 9, 1992, suspended him for three days, with a similar
respondent.
warning.
On August 5, 1987, the Philippine Overseas Employment Administration (POEA) rendered
a Decision dismissing petitioners' claim for terminal pay but granted their prayer for leave pay and Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit cold call
overtime pay. Private respondent appealed from the POEA's decision to the NLRC, where the NLRC reports for February 5, 6, 8, 10 and 12, 1993. He was verbally reminded to submit the same and
reversed the POEA‘s decision. was even given up to February 17, 1993 to do so. Instead of complying with said directive,
petitioner, on February 16, 1993, wrote a note, "TO HELL WITH COLD CALLS! WHO CARES?" and
Hence, this appeal from the decision and resolution of the respondent NLRC. exhibited the same to his co-employees. To worsen matters, he left the same lying on his desk
where everyone could see it.
ISSUE:

Whether or not petitioners should be entitled to overtime pay? On February 23, 1993, petitioner received a memorandum requiring him to explain why Cityland
should not make good its previous warning for his failure to submit cold call reports, as well as for
HELD: issuing the written statement aforementioned. On February 24, 1993, he sent a letter-reply
alleging that his failure to submit cold call reports should trot be deemed as gross insubordination.
No. In the case of National Shipyards and Steel Corporation v. CIR, ―Seamen are required He denied any knowledge of the damaging statement, "TO HELL WITH COLD CALLS!"
to stay on board their vessels by the very nature of their duties, and it is for this reason that, in
addition to their regular compensation, they are given free living quarters and subsistence Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon him on
allowances when required to be on board. It could not have been the purpose of our law to February 26, 1993. Aggrieved by such dismissal, petitioner filed a complaint against Cityland for
require their employers to pay them overtime even when they are not actually working; otherwise, illegal dismissal, illegal deduction, underpayment, overtime and rest day pay, damages and
every sailor on board a vessel would be entitled to overtime for sixteen hours each day, even if he attorney's fees. The labor arbiter dismissed the petition for lack of merit. On appeal, the same was
spent all those hours resting or sleeping in his bunk, after his regular tour of duty. The correct affirmed by the NLRC; hence the present recourse.
criterion in determining whether or not sailors are entitled to overtime pay is not, therefore,
whether they were on board and can not leave ship beyond the regular eight working hours a day, Issue: W/N NLRC gravely abused its discretion in not finding that petitioner was illegally
but whether they actually rendered service in excess of said number of hours.‖ dismissed?

108. ROMEO LAGATIC, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, Held: The petition lacks merit.
CITYLAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, JESUS GO, GRACE
LIUSON, and ANDREW LIUSON, respondents G.R. No. 121004 January 28, 1998 To constitute a valid dismissal from employment, two requisites must be met, namely: (1) the
Topic: RIGHT TO PRESCRIBE RULES employee must be afforded due process, and (2) the dismissal must be for a valid cause.
Facts:
82
 emphasized is that in addition to regular wage, there must be paid an additional 25% of that
Employers may, thus, make reasonable rules and regulations for the government of their regular wage to constitute overtime rate. Parties were thus allowed to agree on what shall be
employees, and when employees, with knowledge of an established rule, enter the service, the mutually considered regular pay from or upon which a 25% shall be based and added to makeup
rule becomes a part of the contract of employment. It is also generally recognized that company overtime compensation.
policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally
valid and binding on the parties and must be complied with. Corollarily, an employee may be
validly dismissed for violation of a reasonable company rule or regulation adopted for the conduct 110. Pampanga Sugar Development Co. Inc. vs. CIR and Sugar Workers Association;
of the company business. An employer cannot rationally be expected to retain the employment of GR No. L-39387; June 29, 1982
a person whose . . . lack of regard for his employer's rules . . . has so plainly and completely been Topic: Coverage of Overtime Pay
bared." 5 Petitioner's continued infraction of company policy requiring cold call reports, as
evidenced by the 28 instances of non-submission of aforesaid reports, justifies his dismissal. Validity of Quitclaims

With the finding that petitioner's dismissal was for a just and valid cause, his claims for moral and Facts: The workers' affiliates of respondent Union staged a strike against petitioner company. After
exemplary damages, as well as attorney's fees, must fail. six years, the said Court issued an order directing petitioner company to reinstate the members of
Resolution is AFFIRMED and this petition is hereby DISMISSED for lack of merit. Costs against respondent union. Some 88 union members were thus reinstated by petitioner. However,
petitioner. petitioner discriminated against the reemployed workers with respect to wage rates, off-season
pay, cost of living allowance, milling bonus and Christmas bonus by depriving them of aforesaid
109. PNB VS. PNB EMPLOYEES ASSOCIATION benefits or by granting to some members benefits lesser than those given to members of the
Pasudeco Workers Union, another labor group in the service of petitioner. By reason of such,
Facts: PNB and PNB Employees Association had a dispute regarding the proper computation of respondent filed with the CIR a complaint for unfair labor practice against petitioner.
the overtime pay. PEMA wanted the cost of living allowance and longevity pay to be included in
the computation. PNB disagreed and the 2 parties later went before the CIR to resolve the dispute. CIR handed down a decision adjudging herein petitioner guilty of unfair labor practice acts. RES
Union filed with the CIR a motion for computation of final judgment and a petition for attorney's
The CIR decided in favor of PEMA and held that PNB should compute the overtime pay of lien. CIR, acting on the aforesaid motions of respondent Union, issued its order approving and
its employees on the basis of the sum total of the employee‘s basic salary or wage plus cost of granting to respondent's counsel, attorney's fees equivalent to 20% of the total amount of final
living allowance and longevity pay. The CIR relied on the ruling in NAWASA vs. NAWASA judgment or whatever recovery or settlement is made and directing its Examining Division to
Consolidated Unions, which held that ― for purposes of computing overtime compensation, regular compute the wage and fringe benefits differentials due the 28 individual workers who did not
wage includes all payments which the parties have agreed shall be received during the work week, waive or quitclaim their rights established by the decision.
including differentiated payments for working at undesirable times, such as at night and the board
and lodging customarily furnished to the employee.‖

Issue: Whether or not the cost of living allowance and longevity pay should be included in the Issue: WON the CIR erred in awarding attorney's fees and ordering the computation for the
computation of overtime pay. payment of wages since the employees already signed a quitclaim?

Held: No. Overtime pay is for extra effort beyond that contemplated in the employment Held: No. The petitioner did not contest the allegations contained in the respondent's petition for
contract; additional pay given for any other purpose cannot be included in the basis for the attorney's lien before the trial court. This constitutes an implied admission thereof.
computation of overtime pay. Absent a specific provision in the CBA, the bases for the computation
The allegations of petitioner to the effect that by reason of the quitclaims there is nothing upon
of overtime pay are 2 computations namely: (1) whether or not the additional pay is for extra
which the attorney's lien attaches, is not valid. This Court finds the quitclaims not valid.
work done or service rendered; (2) whether or not the same is intended to be permanent and
regular, not contingent nor temporary as a given only to remedy a situation which can change any Firstly, said quitclaims were secured by petitioner after it lost its case in the lower court when the
time. latter promulgated its decision on the case.
Longevity pay cannot be included in the computation for the very simple reason that the Secondly, while rights may be waived, the same must not be contrary to law, public order, public
contrary is expressly stipulated in the CBA, which constitutes the law between the parties. As policy, morals or good customs or prejudicial to a third person with a right recognized by law. It
regards to cost of living allowance, there is nothing in Commonwealth Act 444 that could jutify exempts the petitioner from any legal liability. They obligated the workers concerned to forego
PEMA‘s posture that it should be added to the regular wage in computing overtime pay. C.A. 444 their benefits, while at the same time, exempted the petitioner from any liability that it may
prescribes that overtime work shall be paid ―at the same rate as their regular wages or salary, plus choose to reject. This runs counter to Article 22 of the New Civil Code which provides that no one
at least 25% additional‖. The law did not define what is a regular wage or salary. What the law shall be unjustly enriched at the expense of another.
83
Thirdly, the alleged quitclaim agreements are contrary to public policy. up to the finality of this judgment; Service Incentive Leave pay, and 13th month pay, computed as
in No.1 hereof. CA affirmed.
Once a civil action is filed in court, the cause of action may not be the subject of compromise
unless the same is by leave of the court concerned. Otherwise, this will render the entire judicial
system irrelevant to the prejudice of the national interest. This is more so when the court has Issue: WON private respondents are entitled to separation pay, 13th month pay and service
already rendered its decision on the issues submitted. incentive leave pay.

The quitclaim agreements taken together with the petitioner's petition for certiorari of the trial Held: Yes. The employee is granted separation pay: Under Arts. 283 and 284 of the Labor Code,
court's decision clearly and unmistakably shows the bad faith of the petitioner and its outright separation pay is authorized only in cases of dismissals due to any of these reasons: (a)
refusal to comply with its legal obligations. In the case at bar, petitioner acted with evident bad installation of labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the
faith and malice. Petitioner secured the 53 quitclaim agreements individually with the 53 sugar employer's business; and (e) when the employee is suffering from a disease and his continued
workers without the intervention of respondent's lawyer who was representing them before the employment is prohibited by law or is prejudicial to his health and to the health of his
lower court. This subterfuge is tantamount to a sabotage of the interest of respondent association. coemployees.
Needless to say, the means employed by petitioner in dealing with the workers individually,
instead of collectively through respondent and its counsel, violates good morals as they undermine As a measure of social justice in those cases where the employee is validly dismissed for causes
the unity of respondent union and fuels industrial disputes, contrary to the declared policy in the other than serious misconduct or those reflecting on his moral character, but only when he was
Industrial Peace Act. illegally dismissed

In respect of the 53 quitclaims, these are not compromise agreements between the petitioner and Under Sec. 4(b), Rule I, Book VI of the Implementing Rules to Implement the Labor Code that
respondent union. They are separate documents of renunciation of individual rights. Compromise provides for the payment of separation pay to an employee entitled to reinstatement but the
involves the mutual renunciation of rights by both parties on a parity basis. The quitclaims, establishment where he is to be reinstated has closed or has ceased operations or his present
however, bind the workers to renounce their rights while the petitioner not only does not renounce position no longer exists at the time of reinstatement for reasons not attributable to the
anything but also acquires exemption from any legal liability in connection therewith. employer. The common denominator of the instances where payment of separation pay is
warranted is that the employee was dismissed by the employer.
111.JPL MARKETING PROMOTIONS,v. CA Gr no: 151966 July 8, 2005
In the instant case, there was no dismissal to speak of. Private respondents were simply not
JPL is a domestic corporation engaged in the business of recruitment and placement of workers, dismissed at all, whether legally or illegally. What they received from JPL was not a notice of
while private respondents Noel Gonzales, Ramon Abesa III and Faustino Aninipot were employed termination of employment, but a memo informing them of the termination of CMC‘s contract with
by JPL as merchandisers on separate dates and assigned at different establishments in Naga City JPL. More importantly, they were advised that they were to be reassigned. At that time, there was
and Daet, Camarines Norte as attendants to the display of California Marketing Corporation, one of no severance of employment to speak of. Furthermore, Art. 286 of the Labor Code allows the bona
JPL clients. fide suspension of the operation of a business or undertaking for a period not exceeding six 6
On 13 Aug ‗96: JPL notified private respondents that CMC would stop its direct merchandising months, wherein an employee/employees are placed on the socalled ―floating status.‖ When that
activity in the Bicol Region, Isabela, and Cagayan Valley effective 15 August 1996. They were ―floating status‖ of an employee lasts for more than six months, he may be considered to have
advised to wait for further notice as they would be transferred to other clients. However, on 17 been illegally dismissed from the service. Thus, he is entitled to the corresponding benefits for his
October 1996, private respondents Abesa and Gonzales filed before the NLRC complaints for illegal separation, and this would apply to suspension either of the entire business or of a specific
dismissal, praying for separation pay, 13th month pay, service incentive leave pay and payment component thereof.As clearly borne out by the records of this case, private respondents sought
for moral damages. Aninipot filed a similar case thereafter. Labor Arbiter Rivera dismissed employment from other establishments even before the expiration of the six (6)month period
complaints for lack of merit. The Labor Arbiter said that Gonzales and Abesa applied with another provided by law. As they admitted in their comment, all three of them applied for and were
store before the 6month period given by law to JPL to provide private respondents a new employed by another establishment after they received the notice from JPL.JPL did not terminate
assignment. Thus, they may be considered to have unilaterally severed their relation with JPL, and their employment; they themselves severed their relations with JPL. Thus, they are not entitled to
cannot charge JPL with illegal dismissal. Labor Arbiter said that it was their obligation to wait until separation pay. The Court is not inclined in this case to award separation pay even on the ground
they were reassigned by JPL, and if after six months they were not reassigned, they can file an of compassionate justice.
action for separation pay but not for illegal dismissal. The claims for 13th month pay and service
incentive leave pay was also denied since private respondents were paid way above the applicable The Court of Appeals relied on the cases wherein the Court awarded separation pay to legally
minimum wage during their employment. NLRC affirmed LA but ordered Separation pay, based on dismissed employees on the grounds of equity and social consideration. Said cases involved
their last salary rate and counted from the first day of their employment with the respondent JPL employees who were actually dismissed by their employers, whether for cause or not. Clearly, the
principle applies only when the employee is dismissed by the employer, which is not the

84
 the NLRC and dismissed the petitioner's claim for lack of merit basing its decision on the provisions
of Book III of the Integrated Rules and Policy Instruction No. 9. Hence, this petition.
Nonetheless, JPL cannot escape the payment of 13th month pay and service incentive leave pay to
private respondents. Said benefits are mandated by law and should be given to employees as a Issue: Whether or not the respondent Secretary of Labor abused his discretion in denying the
matter of right. They were not given their 13th month pay and service incentive leave pay while claim of petitioners.
they were under the employ of JPL. Instead, JPL provided salaries which were over and above the
minimum wage. The Court rules that the difference between the minimum wage and the actual Held: Yes.Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9, are
salary received by private respondents cannot be deemed as their 13th month pay and service contrary to the provisions of the Labor Code and, therefore, invalid. Since the private respondent
incentive leave pay as such difference is not equivalent to or of the same import as the said premises its action on the invalidated rule and policy instruction, it is clear that the employees
benefits contemplated by law belonging to the petitioner association are entitled to the payment of ten (10) legal holidays under
Articles 82 and 94 of the Labor Code, aside from their monthly salary. They are not among those
112. IBAAEU v. Inciong; G.R. No. L-52415; October 23, 1984 excluded by law from the benefits of such holiday pay.

Topic: Right of Holiday Pay While it is true that the respondent Minister has the authority in the performance of his
duty to promulgate rules and regulations to implement, construe and clarify the Labor Code, such
Facts: On June 20, 1975, the petitioner filed a complaint against the respondent bank for the power is limited by provisions of the statute sought to be implemented, construed or clarified. An
payment of holiday pay before the then Department of Labor, NLRC in Manila. Conciliation having administrative interpretation which diminishes the benefits of labor more than what the statute
failed, the case was certified for arbitration and later on a decision was rendered by the Labor delimits or withholds is obviously ultra vires. Any slight doubts must be resolved in favor of the
Arbiter granting petitioner‘s complaint. Respondent bank complied by paying the holiday pay to workers. This is in keeping with the constitutional mandate of promoting social justice and
and including January 1976. On December 1975, PD 850was promulgated amending the provisions affording protection to labor
of the Labor Code with the controversial section stating that monthly paid employees receiving
uniform monthly pay is presumed to be already paid the ―10 paid legal holidays‖. Policy instruction 114 UNION OF FILIPRO EMPLOYEES (UFE) vs. BENIGNO VIVAR, JR., NATIONAL LABOR
9 was issued thereafter interpreting the said rule. Respondents bank stopped the payment by RELATIONS COMMISSION and NESTLÉ PHILIPPINES, INC. (formerly FILIPRO, INC.);
reason of the promulgated PD 850 and Policy Instruction 9. G.R. No. 79255; January 20, 1992

Issue: Whether or not monthly paid employees are excluded from the benefit of holiday pay. FACTS: On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the
NLRC a petition for claims of its monthly paid employees for holiday pay.
Held: No. It is elementary in the rules of statutory construction that when the language of the
law is clear and unequivocal the law must be taken to mean exactly what it says. In the case at Abitrator Vivar: Filipro to pay its monthly paid employees holiday pay pursuant to Art 94 of Labor
bar, the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear Code, subject to exclusions and limitations in Art 82.
and explicit- it provides for both the coverage of and exclusion from the benefits. In Policy
Instruction 9, the then Secretary of Labor categorically state that the benefit is principally intended
Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2)
for daily paid employees, when the law clearly states that every worker shall be paid their regular
the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical
holiday pay. While it is true that the contemporaneous construction placed upon a statue by
representatives (hereinafter referred to as sales personnel) from the award of the holiday pay, and
executive officers whose duty is to enforce it should be given great weight by the courts, still if
(3) deduction from the holiday pay award of overpayment for overtime, night differential, vacation
such construction is so erroneous, the same must be declared as null and void.
and sick leave benefits due to the use of 251 divisor.
113. CHARTERED BANK EMPLOYEES ASSOCIATION v. OPLE; GR. No. L-44717; 28 August 1985
Petitioner UFE answered that the award should be made effective from the date of effectivity of
the Labor Code, that their sales personnel are not field personnel and are therefore entitled to
Topic: Right to Holiday Pay
holiday pay, and that the use of 251 as divisor is an established employee benefit which cannot be
diminished.
Facts: On May 20, 1975, the Chartered Bank Employees Association instituted a complaint with
the Department of Labor against private respondent Chartered Bank, for the payment of ten (10)
Arbitrator Vivar: On January 14, 1986, the respondent arbitrator issued an order declaring that the
unworked legal holidays, as well as for premium and overtime differentials for worked legal
effectivity of the holiday pay award shall retroact to November 1, 1974, the date of effectivity of
holidays from November 1, 1974. Both the arbitrator and the National Labor Relations Commission
the Labor Code. He adjudged, however, that the company‘s sales personnel are field personnel
(NLRC) ruled in favor of the petitioners. On appeal, the Minister of Labor set aside the decision of
and, as such, are not entitled to holiday pay. He likewise ruled that with the grant of 10 days‘
85
holiday pay, the divisor should be changed from 251 to 261 and ordered the reimbursement of 10 holidays and the employees should reimburse the amounts overpaid by Filipro due to the use of
overpayment for overtime, night differential, vacation and sick leave pay due to the use of 251 251 days‘ divisor.
days as divisor.
The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10)
ISSUES: legal holidays from the total number of calendar days in a year. If the employees are already paid
1. Are Nestle‘s sales personnel entitled to holiday pay? for all non-working days, the divisor should be 365 and not 251.
2. Concomitant with the award of holiday pay, should the divisor be changed from 251 to
261 days, and did the previous use of 251 as divisor result in overpayment for overtime, In the petitioner‘s case, its computation of daily ratio since September 1, 1980, is as follows:
night differential, vacation and sick leave pay?
monthly rate x 12 months / 251 days
HELD:
The use of 251 days‘ divisor by respondent Filipro indicates that holiday pay is not yet included in
1. Sales personnel are not entitled to holiday pay. the employee‘s salary, otherwise the divisor should have been 261.
Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel
as ―non-agricultural employees who regularly perform their duties away from the principal place of It must be stressed that the daily rate, assuming there are no intervening salary increases, is a
business or branch office of the employer and whose actual hours of work in the field cannot be constant figure for the purpose of computing overtime and night differential pay and commutation
determined with reasonable certainty.‖ of sick and vacation leave credits. Necessarily, the daily rate should also be the same basis for
computing the 10 unpaid holidays.
The law requires that the actual hours of work in the field be reasonably ascertained. The
company has no way of determining whether or not these sales personnel, even if they report to The respondent arbitrator‘s order to change the divisor from 251 to 261 days would result in a
the office before 8:00 a.m. prior to field work and come back at 4:30 p.m, really spend the hours lower daily rate which is violative of the prohibition on non-diminution of benefits found in Article
in between in actual field work. 100 of the Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then
the dividend, which represents the employee‘s annual salary, should correspondingly be increased
Moreover, the requirement that ―actual hours of work in the field cannot be determined with to incorporate the holiday pay.
reasonable certainty‖ must be read in conjunction with Rule IV, Book III of the Implementing
Rules which provides: To illustrate, if prior to the grant of holiday pay, the employee‘s annual salary is P25,100, then
dividing such figure by 251 days, his daily rate is P100.00 After the payment of 10 days‘ holiday
Rule IV Holidays with Pay pay, his annual salary already includes holiday pay and totals P26,100 (P25,100 + 1,000). Dividing
this by 261 days, the daily rate is still P100.00. There is thus no merit in respondent Nestle‘s claim
Sec. 1. Coverage — This rule shall apply to all employees except: of overpayment of overtime and night differential pay and sick and vacation leave benefits, the
xxx xxx xxx computation of which are all based on the daily rate, since the daily rate is still the same before
(e) Field personnel and other employees whose time and performance is and after the grant of holiday pay.
unsupervised by the employer . . . (Emphasis supplied)
SC Decision:
Hence, in deciding whether or not an employee‘s actual working hours in the field can be
determined with reasonable certainty, query must be made as to whether or not such employee‘s The Court thereby resolves that the grant of holiday pay be effective, not from the date of
time and performance is constantly supervised by the employer. promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but
from October 23, 1984, the date of promulgation of the IBAA case (Insular Bank of Asia and
2. The divisor in computing the award of holiday pay should still be 251 days. America Employees‘ Union (IBAAEU) v. Inciong, where the court declared that Sec 2, Rule IV,
While in that case the issue was whether or not salesmen were entitled to overtime pay, the same Book III of IRR which excluded monthly paid employees from holiday pay benefits, are null and
rationale for their exclusion as field personnel from holiday pay benefits also applies. void).

The petitioner union also assails the respondent arbitrator‘s ruling that, concomitant with the WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
award of holiday pay, the divisor should be changed from 251 to 261 days to include the additional computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed

86
from October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby days identified as with great historical and cultural significance. Independence Day (June 12),
AFFIRMED. Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day
(November 30) and Rizal Day (December 30) were declared national holidays to afford
116. Asian Transmission Corp. v. CA; GR No. 144664; March 16, 2004 Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people,
Topic: Right to holiday pay promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day
traditionally reserved to celebrate the contributions of the working class to the development of
Facts:The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. the nation, while the religious holidays designated in Executive Order No. 203 allow the
Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that worker to celebrate his faith with his family.
employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,]  In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and
apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which interpretation of its provisions, including its implementing rules and regulations, shall be
is also a legal holiday]. The bulletin reads: resolved in favor of labor. For the working man's welfare should be the primordial and
"On the correct payment of holiday compensation on April 9, 1993 which paramount consideration. Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to
apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular Implement the Labor Code provides that "Nothing in the law or the rules shall justify an
holidays falling on the same day, this Department is of the view that the employer in withdrawing or reducing any benefits, supplements or payments for unworked
covered employees are entitled to at least two hundred percent (200%) of regular holidays as provided in existing individual or collective agreement or employer practice
their basic wage even if said holiday is unworked. The first 100% represents or policy."
the payment of holiday pay on April 9, 1993 as Good Friday and the second
100% is the payment of holiday pay for the same date as Araw ng
Kagitingan. 117. San Miguel Corp. vs CA; GR No. 146775; January 10, 2002
Topic: Right to Holiday Pay
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday
and Araw ng Kagitingan. Facts: Upon a routine inspection done by the Department of Labor and Employment in the
premises of San Miguel Corporation in Iligan City, it was discovered that there was underpayment
Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily by SMC of regular Muslim Holiday pay to its employees. SMC received the inspection result which
paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian later on contested such thus DOLE conducted summary hearings. Both DOLE Regional Office and
Transmission Labor Union (BATLU) protested. National Office ruled against SMC ordering the latter to consider Muslim Holidays as regular
holidays and to pay its Muslim and non-Muslim employees holiday pay.
Issue: Whether the daily-paid employees are entitled to be paid for two regular holidays? Thus, this appeal.
Issue: Whether or not the Muslim holiday pay is applicable to employees regardless of faith or
Held: The Court ruled in the positive. Art. 94 of the Labor Code, as amended, affords a worker the religion
enjoyment of ten paid regular holidays. The provision is mandatory, regardless of whether an
employee is paid on a monthly or daily basis. Holiday pay is a statutory benefit demandable under Held: Yes.Although Article 3 of Presidential Decree 1083 (Code of Muslim Personal Laws) provides
the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two that the provisions of the code shall be applicable only to Muslims, on which the petitioner based
holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a its defense, the same article provides further that nothing in the code shall be construed to the
worker is entitled to receive. The language of the law is clear and unequivocal, the law must be prejudice of non-Muslims. The Supreme Court stated that there should be no distinction between
taken to mean exactly what is says. In any event, the Labor Code provides that all doubts in the Muslims and non-Muslims as regards the payment of benefits for Muslim Holidays. The Court,
implementation and interpretation of its provisions, including its implementing rules and quoting the Court of Appeals, ―assuming that the SMC is correct, then Muslims throughout the
regulations, shall be resolved in favor of labor. Philippines are also not entitled to holiday pays on Christian holidays declared by law. We must
remind (SMC) that wages and other emoluments granted by law are determined not on the basis
Other relevant Information: of the worker‘s faith or religion‖, finds against the petitioner, and dismissed the petition

 Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the 118. VIVIAN Y. IMBUIDOvs.NATIONAL LABOR RELATIONS COMMISSION,
State shall afford protection to labor. Its purpose is not merely "to prevent diminution of the INTERNATIONAL INFORMATION SERVICES, INC. and GABRIEL LIBRANDO;
monthly income of the workers on account of work interruptions. In other words, although the G.R. No. 114734, March 31, 2000
worker is forced to take a rest, he earns what he should earn, that is, his holiday pay." It is
also intended to enable the worker to participate in the national celebrations held during the
87
FACTS:Petitioner was employed as a data encoder by private respondent International HELD:No. Petitioner is a project employee, however, she attained the status of a regular
Information Services, Inc., a domestic corporation engaged in the business of data encoding and employee.
keypunching, from August 26, 1988 until October 18, 1991 when her services were terminated. The principal test for determining whether an employee is a project employee or a regular
From August 26, 1988 until October 18, 1991, petitioner entered into thirteen (13) separate employee is whether the project employee was assigned to carry out a specific project or
employment contracts with private respondent, each contract lasting only far a period of three (3) undertaking, the duration and scope of which were specified at the time the employee was
months. engaged for that project. A project employee is one whose employment has been fixed for a
In September 1991, petitioner and twelve (12) other, employees of private respondent allegedly specific project or undertaking, the completion or termination of which has been determined at the
agreed to the filing of a petition for certification election involving the rank-and-file employees of time of the engagement of the employee or where the work or service to be performed is seasonal
private respondent.Thus, on October 8, 1991, Lakas Manggagawa sa Pilipinas (LAKAS) filed a in nature and the employment is for the duration of the season.
petition for certification election with the Bureau of Labor Relations (BLR), docketed as NCR-OD-M- However, even as we concur with the NLRC's findings that petitioner is a project employee, we
9110-128. have reached a different conclusion. In the recent case of Maraguinot, Jr. vs. NLRC, we held that
"[a] project employee or a member of a work pool may acquire the status of a regular employee
Subsequently, on October 18, 1991, petitioner received a termination letter from Edna Kasilag, when the following concur:
Administrative Officer of private respondent, allegedly "due to low volume of work." 1) There is a continuous rehiring of project employees even after [the] cessation
of a project; and
In her position paper dated August 3, 1992 and filed before labor arbiter Raul T. Aquino, petitioner 2) The tasks performed by the alleged "project employee" are vital, necessary
alleged that her employment was terminated not due to the alleged low volume of work but and indispensable to the usual business or trade of the employer.
because she "signed a petition for certification election among the rank and file employees of
respondents," thus charging private respondent with committing unfair labor practices. Petitioner The evidence on record reveals that petitioner was employed by private respondent as a data
further complained of non-payment of service incentive leave benefits and underpayment of 13th encoder, performing activities which are usually necessary or desirable in the usual business or
month pay. trade of her employer, continuously for a period of more than three (3) years, from August 26,
1988 to October 18, 1991 and contracted for a total of thirteen (13) successive projects. We have
On the other hand, private respondent, in its position paper filed on July 16, 1992, maintained that previously ruled that "[h]owever, the length of time during which the employee was continuously
it had valid reasons to terminate petitioner's employment and disclaimed any knowledge of the re-hired is not controlling, but merely serves as a badge of regular employment." Based on the
existence or formation of a union among its rank-and-file employees at the time petitioner's foregoing, we conclude that petitioner has attained the status of a regular employee of private
services were terminated. respondent.
The Labor Arbiter ruled in favor of Imbuido and ruled that volume of work is not among the just
causes provided by law. In his decision, the labor arbiter found petitioner to be a regular On the issue of service incentive leave pay, the SC agreed with the LA that petitioner is entitled.
employee, ruling that "[e]ven if herein complainant [petitioner herein] had been obstensively (sic)
hired for a fixed period or for a specific undertaking, she should be considered as [a] regular Having already worked for more than three (3) years at the time of her unwarranted dismissal,
employee of the respondents in conformity with the provisions ( sic) laid down under Article 280 of petitioner is undoubtedly entitled to service incentive leave benefits, computed from 1989 until the
the Labor Code," after finding that ". . . [i]t is crystal clear that herein complainant [petitioner date of her actual reinstatement. As we ruled in the recent case of Fernandez vs. NLRC, "[s]ince a
herein] performed a job which are (sic) usually necessary or desirable in the usual business of service incentive leave is clearly demandable after one year of service - whether continuous or
respondent [s]." The labor arbiter further denounced ". . . the purpose behind the series of broken - or its equivalent period, and it is one of the "benefits" which would have accrued if an
contracts which respondents required complainant to execute as a condition of employment was to employee was not otherwise illegally dismissed, it is fair and legal that its computation should be
evade the true intent and spirit of the labor laws for the workingmen . . . ." up to the date of reinstatement as provided under Section [Article] 279 of the Labor Code, as
NLRC reversed. amended, which reads:

he NLRC held that ". . . the complainant [petitioner herein], while hired as a regular worker, is Art. 279. Security of Tenure. - An employee who is unjustly dismissed from work shall be entitled
statutorily guaranteed, in her tenurial security, only up to the time the specific project for which to reinstatement without loss of seniority rights and other privileges and to his full backwages,
she was hired is completed." Hence, the NLRC concluded that "[w]ith the specific project "at RCBC inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
014" admittedly completed, the complainant [petitioner herein] has therefore no valid basis in time his compensation is withheld from him up to the time of his actual reinstatement." (emphasis
charging illegal dismissal for her concomittant (sic) dislocation." supplied).

ISSUE: Whether petitioner was a regular employee. 119. BALTAZAR vs. SAN MIGUEL BREWERY, INC.

88
Appeal taken by San Miguel Brewery, Inc. to reverse the decision of the Court of First Instance of sick leave benefits under defendant-appellant's health, welfare and retirement plan may be
Manila in Civil Case No. 32478 ordering it to pay appellee Nicanor M. Baltazar the total amount of enjoyed only if and when the sickness is certified to by the company physician — a requirement
P1,680.00 representing his separation pay of one (1) month and the money value — at the rate of which was admittedly not complied with, and (2) said benefits are "non-commutative and may not
P240.00 monthly — of six months accumulated sick leave he was entitled to. therefore be commuted to cash".lawphi1.nêt

It appears that Baltazar was appointed salesman-in-charge of appellant's Dagupan warehouse on Held: The trial court found that appellee's absence for forty-eight successive days was without
October 1, 1955 with a basic monthly pay of P240.00, P5.00 per diem and a commission of P.075 permission or authority of his superiors and, as a result, ruled that it was sufficient cause for his
per case sold. dismissal in accordance with the rules and regulations of his employer. This must be deemed final,
because Baltazar did not appeal.
On October 9, 1956 sixteen regular workers at appellant's Dagupan warehouse went on a strike.
For the purpose of relieving the tension prevailing at the place — because it was alleged that the It is settled in this jurisdiction that one not employed for a definite period is not entitled to one-
unfair treatment dispensed to the employees by Baltazar was the cause of the strike — Baltazar month notice or to one-month salary in lieu thereof if his dismissal was for cause (Republic Act No.
was recalled to appellant's Manila office on October 13 of the same year upon recommendation of 1052; Marcaida vs. Philippine Education Company, 53 O.G. No. 23, p. 8559). In the Marcaida case
its sales supervisor and industrial relations officer, who found out, after a personal investigation, this Court, speaking through the now Chief Justice Roberto Concepcion, said the following:
that the employees' grievance was well founded. The day following Baltazar's recall to Manila the
strikers returned to work voluntarily. Republic Act No. 1052 makes reference to termination of employment, instead of dismissal,
precisely to exclude employees separated from the service for causes attributable to their own
When Baltazar reported at appellant's main office in Manila on October 15, 1956, the latter's sales fault.
supervisor informed him that he was not to return to Dagupan anymore. Thereafter, he reported
for work at the main office aforesaid from October 16, 1956 until November 2 of the same year, Again, Republic Act No. 1052 is limited in its operation, to cases of employment without definite
apparently without being given any specific work or assignment. From November 3, 1956 up to period. When the employment is for a fixed duration, the employer may terminate it even
December 19 of the same year, or a period of more than one and one-half months, he absented before the expiration of the stipulated period, should there be a substantial breach of his
himself from work without prior authority from his superiors and without advising them or anybody obligations by the employee; (Articles 1169, 1191 and 1198, Civil Code of the Philippines;
else of the reason for his prolonged absence. For this reason, pursuant firstly, to existing rules and Pabalan vs. Velez, 22 Phil. 29; Gonzales vs. Haberer 47 Phil. 380; Hodges vs. Granada, 59 Phil.
regulations considering ten unexcused or unauthorized absences within a calendar year as 429; De la Cruz vs. Legaspi, 51 Off. Gaz. 6212) in which event the latter is not entitled to
sufficient ground for an outright dismissal from employment, and secondly, the provisions of advance notice or separation pay. It would, patently, be absurd to grant a right thereto to an
appellant's health, welfare and retirement plan requiring that sick leave, to be considered employee guilty of the same breach of obligation, when the employment is without a definite
authorized or excusable, must be certified to by the company physician, appellant, by a letter period, as if he were entitled to greater protection than employees engaged for a fixed
dated December 31, 1956, informed Baltazar that he was dismissed for cause effective November duration, .... It is doubtful whether Congress could validly require the employer to give the
30 of the same year. separation pay in question if the employment were terminated due to the fault of the
employee. Indeed, the imposition of said obligation, under such conditions, would expose
Four months later, or more specifically on May 2, 1957, Baltazar commenced the present action. Republic Act No. 1052 to the charge that it would constitute an unreasonable restraint upon the
After trial upon the issues arising from the parties' pleadings, the trial court ruled that Baltazar's liberty of the employer, and a deprivation of his property without due process of law.
dismissal was justified, and, as a consequence, dismissed his complaint. For insufficiency of
evidence, the court also dismissed appellant's counterclaim. But despite the dismissal of Baltazar's We rule therefore that appellee is not entitled to one month separation pay.
complaint and the finding that his dismissal from employment was for cause, the trial court
ordered appellant to pay him one month separation pay, plus the cash value of six months
In connection with the question of whether or not appellee is entitled to the cash value of six
accumulated sick leave.
months accumulated sick leave, it appears that while under the last paragraph of Article 5 of
appellant's Rules and Regulations of the Health, Welfare and Retirement Plan (Exhibit, 3), unused
Issue: I. The trial court erred in requiring the defendant appellant to pay separation pay after sick leave may be accumulated up to a maximum of six months, the same is not commutable or
having found and declared as an established fact that the dismissal of plaintiff-appellee was fully payable in cash upon the employee's option.
justified.
In our view, the only meaning and import of said rule and regulation is that if an employee does
II. The trial court erred in awarding plaintiff-appellee the money equivalent of an "accumulated not choose to enjoy his yearly sick leave of thirty days, he may accumulate such sick leave up to a
sick leave of six (6) months as terminal leave" despite its express findings to the effect that (1)
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maximum of six months and enjoy this six months sick leave at the end of the sixth year but may
not commute it to cash.
121. AUTO BUS TRANSPORT VS BAUTISTA
WHEREFORE, the appealed decision is hereby reversed, without special pronouncement as to
SERVICE INCENTIVE LEAVE | USAGE CONVERSION TO CASH
costs. It is so ordered.
Driver-conductor BAUTISTA was the cause of an accident which resulted to damage to the bus
120.Leiden Fernandez et al. vs. National Labor Relations Commission owned by AUTO BUS TRANSPORT, the employer. As a result, certain amount of money was
G.R. No. 105892, January 28, 1998 demanded from him for the repair of the bus and upon non-payment, he was dismissed by the
TOPIC: Illegal Dismissal and Payment of Backwages company.

FACTS: Petitioners, who are employees of private respondent Agencia Cebuana-H. Lhuillier and/or Bautista complained for illegal dismissal with money claims for nonpayment of 13th month pay and
Margueritte Lhuillier, filed a complaint before Dept. of Labor for illegal dismissal and payment of service incentive leave pay against Autobus.
backwages when the latter denied them their demand to increase their salaries and subsequently
terminated their employment. AUTO BUS TRANSPORT CONTENTION:
 Bautista‘s employment was replete with offenses involving reckless imprudence, gross
Labor Arbiter favored petitioners but NLRC vacated the labor arbiter‘s order. MR denied. Hence, negligence, and dishonesty supported with copies of letters, memos, irregularity reports,
this petition. warrants of arrest;
 In the exercise of management prerogative, Bautista was terminated only after providing
In her opinion, SG recommended that the labor arbiter‘s decision be reinstated substantially, that for an opportunity to explain
the award of service incentive leave be limited to three years. This is based on Article 291 of the
Labor Code which provides: The Labor Arbiter dismissed the complaint BUT awarded 13thmonth pay and service incentive leave
―ART. 291. Money Claims. — All money claims arising from employer-employee relations accruing pay to BAUTISTA.
during the effectivity of this Code shall be filed within three (3) years from the time the cause of
action accrued; otherwise they shall be forever barred. On appeal, the NLRC deleted the award of 13th month pay.

SC ruled that the petitioners, except Lim and Canonigo, were illegally dismissed so it had to rule On petition for certiorari, the CA affirmed the NLRC decision.Hence, this petition before the SC.
now on the money claims.
ISSUE: Whether or not respondent is entitled to service incentive leave pay.
ISSUE: Whether or not the claim of service incentive leaves may be limited to a certain number of
SC: YES!
years.

RULING: NO. XXX A careful perusal of said provisions of law will result in the conclusion that the grant of service
incentive leave has been delimited by the Implementing Rules and
Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that ―every Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section
employee who has rendered at least one year of service shall be entitled to a yearly service 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to
incentive leave of five days with pay.‖ employees classified as ―field personnel.‖ The phrase ―other employees whose performance is
unsupervised by the employer‖must not be understood as a separate classification of employees to
To limit the award to three years is to unduly restrict such right. The law does not prohibit its
which service incentive leave shall not be granted. Rather, it serves as an amplification of the
commutation.
interpretation of the definition of field personnel under the Labor Code as those ―whose actual
SG‘s recommendation is contrary to the ruling of the Court in Bustamante et al. vs. NLRC et al. hours of work in the field cannot be determined with reasonable certainty.‖ The same is true with
lifting the three-year restriction on the amount of backwages and other allowances that may be respect to the phrase ―those whoare engaged on task or contract basis, purely commission
awarded an illegally dismissed employee, thus: ―Therefore, in accordance with R.A. No. 6715, basis.‖Said phrase should be related with ―field personnel,‖ applying the rule on ejusdem generis
petitioners are entitled to their full backwages, inclusive of allowances and other benefits or their that general and unlimited terms are restrained and limited by the particular terms that they
monetary equivalent, from the time their actual compensation was withheld from them up to the follow. Hence, employees engaged on task or contract basis or paid on purely commission basis
time of their actual reinstatement.‖ are not automatically exempted from thegrant of service incentive leave, unless, they fall under

90
the classification of field personnel. XXX The clear olicy of the Labor Code is o grant servicceincentives leave pay to workers in all
establishments, ubject to a few exceptions. Section 2 Rule V, Book III of the implementing Rules and
Petitioner‘s contention that respondent is not entitled to the grant of service incentive leave just Regulations provides that ―every employee who has rendered at least one year of service shall be
because he was paid on purely commission basis is misplaced. What must be ascertained in order entitled to a yearly service incentive leave of five (5) days with pay‖.
to resolve the issue of propriety of the grant of service incentive leave to respondent is whether or
Service incentive leave is a right which accrues to every employee who has served ―within 12
not he is a field personnel. According to Article 82 of the Labor Code, ―field personnel‖ shall refer months, whether continuous or broken reckoned from the date the employee started working, including
to nonagricultural employees who regularly perform their duties away from the principal place of authorized absences and paid regular holidays unless the working days in the establishment as a matter
business or branch office of the employer and whose actual hours of work in the field cannot be of practice or policy, or that provided in the employment contract, is less than 12 months, in which case,
determined with reasonable certainty. This definition is further elaborated in the Bureau of said period shall be considered one year.
Working Conditions (BWC), Advisory Opinion toPhilippine TechnicalClericalCommercial Employees
Associationwhich states that: As a general rule, [field personnel] are thosewhose performance of It is also commutable to its money equivalent if not used or exhausted at the end of each year.
their job/service is not supervised by the employer or his representative, the workplace being
This is a petition for review on certiorari seeking to reverse and set aside the issuance of the
away from the principal office and whose hours and days of work cannot be determined with
CA.
reasonable certainty;hence, they are paid specific amount for rendering specific service or
performing specific work. If required to be at specific places at specific times,employees including Petitioner Mansion Printing Center is a single proprietorship registered under the name if its
drivers cannot be said to be field personneldespite the fact that they are performing work away president and co-petitioner Clement Cheng. Sometime in August 1998, petitioners engaged the services
from theprincipal office of the employee. XXX of respondent as a helper (kargador). Respondent was later promoted as the company‘s sole driver.

At this point, it is necessary to stress that the definition of a ―field personnel‖ is not merely Respondent Bitara was dismissed/terminated by the petitioners for his habitual tardiness.
Respondent filed a complaint for illegal dismissal on April 22, 2000 against the petitioners before the
concerned with the location where the employee regularly performs his duties but also with the
labor arbiter. He prayed for his reinstatement and for the payment of full backwages, legal holiday pay,
fact that the employee‘s performance is unsupervised by the employer. As discussed above, field
service incentive leave pay, damages and attorney‘s fees.
personnel are those who regularly perform their duties away from the principalplace of business of
the employer and whose actual hours of work in the field cannot be determined with reasonable FACTS: On December 21, 2000, the labor arbiter dismissed the complaint for lack of merit. The
certainty. Thus,in order to conclude whether an employee is a field employee, it isalso necessary NLRC, on appeal, affirmed en toto the findings of the Labor Arbiter.
to ascertain if actual hours of work in the field canbe determined with reasonable certainty by the
employer. In sodoing, an inquiry must be made as to whether or not theemployee‘s time and The CA, on appeal, reversed the decisions of the Labor Arbiter and the NLRC and ruled
performance are constantly supervised bythe employer. XXX that the employee shall be entitled to the 5-day Service Incentive Leave Pay for every year of
service from the commencement of his employment in August 1988 up to its termination on April
As observed by the Labor Arbiter and concurred in by the Court of Appeals: It is of judicial notice 1, 2000.
that along the routes that are plied by these bus companies, there are its inspectors assigned at
ISSUE: Whether or not the CA correctly found that the Commission acted without and/ or in
strategic places who board the bus and inspect the passengers, the punched tickets, and the
excess of jurisdiction and with grave abuse of discretion amounting to lack or excess of jurisdiction
conductor‘s reports. There is also the mandatory once-a-week car barn or shop day, where the bus
among others in affirming the denial of the respondent‘s claim for non-payment of service
is regularly checked as to its mechanical, electrical, and hydraulic aspects, whether or not there
incentive leave pay?
are problems thereon as reported by the driver and/or conductor. They too, must be at specific
place as [sic] specified time, as they generally observe prompt departure and arrival from their HELD: Yes, the CA is correct in finding that the commission acted with grave abuse of discretion
point of origin to their point of destination. In each and every depot, there is always the in denying respondent‘s right to service incentive leave pay in the absence of proof or evidence
Dispatcher whose function is precisely to see to it that the bus and its crew leave the premises at that the petitioner had already paid the respondent or had already used the service incentive leave
specific times and arrive at the estimated proper time. These, are present in the case at bar. The when he incurred numerous absences.
driver, the complainant herein, was therefore under constant supervision while in the performance
of this work. He cannot be considered a field personnel. We agree in the abovedisquisition. 123. Mayon Hotel & Restaurant v. Adana, 458 SCRA 609, G.R. No. 157634 May 16, 2005
Therefore, as correctly concluded by the appellate court, respondent is not a field personnel but a
regular employee who performs tasks usually necessary and desirable to the usual trade of Topic : How Service charge is distributed
petitioner‘s business. Accordingly, respondent is entitled to the grant of service incentive leave.
Facts: Petitioner Mayon Hotel & Restaurant is a single proprietor business registered in the name
122. MANSION PRINTING CENTER vs BITARA; G.R. No. 168120 of petitioner Pacita O. Po,6 whose mother, petitioner Josefa Po Lam, manages the
establishment.7 The hotel and restaurant employed about sixteen (16) employees.
Service Incentives Leaves
91
 On various dates of April and May 1997, the 16 employees filed complaints for determined out of the gross receipt of an enterprise. Profits are realized after expenses are
underpayment of wages and other money claims against petitioners, for illegal dismissal, deducted from the gross income.
underpayment of wages, nonpayment of holiday and rest day pay; service incentive leave pay Others:
(SILP),nightshift differential pay, nonpayment of COLA and separation pay plus damages.
 Serious business losses are not a defense to payment of labor standard benefits.
On July 14, 2000, Executive Labor rendered a Joint Decision in favor of the employees.  Serious business losses do not excuse the employer from complying with the clearance or
The Labor Arbiter awarded substantially all of respondents' money claims, and held that report required under Art. 283 of the Labor Code and its implementing rules before
respondents Loveres, Macandog and Llarena were entitled to separation pay, while respondents terminating the employment of its workers; The requirement of law mandating the giving
Guades, Nicerio and Alamares were entitled to their retirement pay. The Labor Arbiter also held of notices was intended not only to enable the employees to look for another employment
that based on the evidence presented, Josefa Po Lam is the owner/proprietor of Mayon Hotel & and therefore ease the impact of the loss of their jobs and the corresponding income, but
Restaurant and the proper respondent in these cases. more importantly, to give the Department of Labor and Employment (DOLE) the
opportunity to ascertain the verity of the alleged authorized cause of termination.
Petitioners claim that the cost of the food and snacks provided to respondents as facilities  Cost of Facilities; Meals and Snacks; Before an employer may deduct the value of facilities
should have been included in reckoning the payment of respondents' wages. They state that from the employee‘s wages, it must first satisfy the following—(a) proof that such facilities
although on the surface respondents appeared to receive minimal wages, petitioners had granted are customarily furnished by the trade, (b) the provision of deductible facilities is
respondents other benefits which are considered part and parcel of their wages and are allowed voluntarily accepted in writing by the employee, and, (c) the facilities are charged at fair
under existing laws. They claim that these benefits make up for whatever inadequacies there may and reasonable value—the law is clear that mere availment is not sufficient to allow
be in compensation. Specifically, they invoked Sections 5 and 6, Rule VII-A, which allow the deductions from employees‘ wages.
deduction of facilities provided by the employer through an appropriate Facility Evaluation Order  While it is true that other forms of damages under the Civil Code may be awarded to
issued by the Regional Director of the DOLE. Petitioners also aver that they give five (5) illegally dismissed employees, any award of moral damages by the Labor Arbiter cannot
percent of the gross income each month as incentives. As proof of compliance of payment be based on the Labor Code but should be grounded on the Civil Code.
of minimum wages, petitioners submitted the Notice of Inspection Results issued in 1995 and 1997
124. GAA VS. CA; G.R. No. L-44169; December 3, 1985
by the DOLE Regional Office.
FACTS: Respondent Europhil Industries Corporation was formerly one of the tenants in Trinity
On appeal to the NLRC, the decision of the Labor Arbiter was reversed, and all the
Building at T.M. Kalaw Street, Manila, while petitioner Gaa was then the building administrator. On
complaints were dismissed.
December 12, 1973, Europhil commenced an action in CFI Manila for damages against petitioner for
having perpetrated certain acts that Europhil considered a trespass upon its rights, namely,
Respondents filed a motion for reconsideration with the NLRC and when this was denied, cutting of its electricity, and removing its name from the building directory and gate passes of its
they filed a petition for certiorari with the CA which rendered the now assailed decision. officials and employees",
Issue: Whether or not the five (5) percent of the gross income of the establishment can be On June 28, 1974, said court rendered judgment in favor of respondent Europhil, ordering petitioner to
considered as part of the respondents' wages. pay the former the sum of P10,000.00 as actual damages, P5,000.00 as moral damages, P5,000.00 as
exemplary damages and to pay the costs. The said decision having become final and executory, a writ of garnishment
Held: NO. Petition is DENIED. was issued pursuant to which DeputySheriff Roxas on August 1, 1975 served a Notice of Garnishment upon El
Grande Hotel, where petitioner was then employed, garnishing her "salary, commission and/or
While complainants, who were employed in the hotel, receive[d] various amounts as profit remuneration."
share, the same cannot be considered as part of their wages in determining their claims for
violation of labor standard benefits. Although called profit share[,] such is in the nature of share Petitioner then filed with the CIF of Manila a motion to lift said garnishment on the ground that her salaries,
from service charges charged by the hotel. This is more explained by [respondents] when they commission and or remuneration" are exempted from execution under Article 1708 of the New Civil Code. Said motion
testified that what they received are not fixed amounts and the same are paid not on a monthly. was denied by the lower Court.CA dismissed the petition holding that petitioner is not a mere laborer as
Also, [petitioners] failed to submit evidence that the amounts received by [respondents] as profit contemplated under Article 1708 as the term laborer does not apply to one who holds a managerial
share are to be considered part of their wages and had been agreed by them prior to their or supervisory position like that of petitioner, but only to those laborers occupying the lower strata.
employment. Further, how can the amounts receive[d] by [respondents] be considered as profit
share when the same [are] based on the gross receipt of the hotel[?] No profit can as yet be ISSUE:Whether or not the Petitioner is covered by Article 1708 of the New Civil Code.

92
RULING: NO. Petitioner is not covered by Article 1708 since she does not fall within the criteria of For reasons of delay on the delivery of imported materials from Furukawa Corporation, the
laborer. Camarin project was not completed on the scheduled date of completion. From May 21, 1997-
December 1999, private respondents received the wage of P145.00. At this time, the minimum
Article 1708 of the Civil Code provides: ―The laborer's wage shall not be subject to execution or prescribed rate for Manila was P198.00. In January to February 28, the three received the wage
attachment, except for debts incurred for food, shelter, clothing and medical attendance." of P165.00. The existing rate at that time was P213.00.

It is beyond dispute that petitioner is not an ordinary or rank and file laborer but a responsibly Faced with economic problems, Lagon was constrained to cut down the overtime work of its
place employee, of El Grande Hotel, responsible for planning, directing, controlling, and workers. Thus, when requested by private respondents to work overtime, Lagon refused and told
coordinating the activities of all housekeeping personnel so as to ensure the cleanliness, private respondents that if they insist, they would have to go home at their own expense and that
maintenance and orderliness of all guestrooms, function rooms, public areas, and the surroundings they would not be given anymore time nor allowed to stay in the quarters. This prompted private
of the hotel. Considering the importance of petitioner's function in El Grande Hotel, it is undeniable respondents to leave their work and went home to Cebu. On March 3, 2000, private respondents
that petitioner is occupying a position equivalent to that of a managerial or supervisory position. We do not filed a complaint for illegal dismissal, non-payment of wages, holiday pay, 13th month pay for
think that the legislature intended the exemption in Article 1708 of the New Civil Code to operate in favor of 1997 and 1998 and service incentive leave pay as well as damages and attorney‘s fees.
any but those who are laboring men or women in the sense that their work is manual.
In their answers, petitioners admit employment of private respondents but claimed that the latter
Persons belonging to this class usually look to the reward of a day's labor for immediate or present support, and such
were only project employees and that since their primary place of work in Manila, the complaint
persons are more in need of the exemption than any others. Petitioner is definitely not within that class
should have been filed there and not in Cebu.

125. SLL International Cables Specialist et al., G.R. No. 172161, 2 March 2011
The Labor Arbiter ruled that his office has jurisdiction over the case because the "workplace," as
defined in the said rule, included the place where the employee was supposed to report back after
Topic: Wages – Facilities vs. Supplements a temporary detail, assignment or travel, which in this case was Cebu. As to the status of their
employment, the LA opined that private respondents were regular employees because they were
Facts:Private respondents Roldan Lopez (Lopez) Danilo Cañete (Cañete), and Edgardo Zuñiga repeatedly hired by petitioners and they performed activities which were usual, necessary and
(Zuñiga) respectively, were hired by petitioner Lagon as apprentice or trainee cable/lineman. The desirable in the business or trade of the employer.
three were paid the full minimum wage and other benefits but since they were only trainees, they
did not report for work regularly but came in as substitutes to the regular workers or in With regard to the underpayment of wages, the LA found that private respondents were
undertakings that needed extra workers to expedite completion of work. After their training, underpaid. It ruled that the free board and lodging, electricity, water, and food enjoyed by them
Zuñiga, Cañete and Lopez were engaged as project employees by the petitioners in their Islacom could not be included in the computation of their wages because these were given without their
project in Bohol for the period of March 15, 1997 to December 1997. Upon completion of the written consent. The LA, however, found that petitioners were not liable for illegal dismissal since
project, their employment are terminated. Private respondents received the amount of P145.00, the private respondents‘ act of going home as an act of indifference when petitioners decided to
the minimum prescribed daily wage for Region VII. prohibit overtime work.

In March 1998, Zuñiga and Cañete were engaged again by Lagon as project employees for its The NLRC and CA affirmed the decision of the LA.
PLDT Antipolo, Rizal project, which ended sometime in late September 1998. In 1998, the private
respondents re-applied in the Racitelcom project of Lagon in Bulacan. Zuñiga and Cañete were re-
Issue: Whether or not the value of the facilities that the private respondents enjoyed should be
employed. Lopez was also hired for the said specific project. Again, after the completion of the
included in the computation of the "wages" received by them.
project, their services are terminated. For this project, Zuñiga and Cañete received only the wage
of P145.00 daily. The minimum prescribed wage for Rizal at that time was P160.00.
Held: No.
On May 21, 1999, private respondents for the 4th time worked with Lagon‘s project in Camarin,
Caloocan City with Furukawa Corporation as the general contractor. Their contract would expire on As a general rule, on payment of wages, a party who alleges payment as a defense has the
February 28, 2000, the period of completion of the project. For this, private respondents received burden of proving it.Specifically with respect to labor cases, the burden of proving payment of
the wage of P145.00. monetary claims rests on the employer, the rationale being that the pertinent personnel files,
payrolls, records, remittances and other similar documents — which will show that overtime,

93
differentials, service incentive leave and other claims of workers have been paid — are not in the 126. NORMA MABEZA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
possession of the worker but in the custody and absolute control of the employer. PETER NG/HOTEL SUPREME, respondents.
Topic: WAGES
In this case, petitioners, aside from bare allegations that private respondents received wages
higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to FACTS:Norma Mabeza was an employee hired by Hotel Supreme in Baguio City. In 1991, an
support their defense of payment. inspection was made by the Department of Labor and Employment (DOLE) at Hotel Supreme and
the DOLE inspectors discovered several violations by the hotel management.
On whether the value of the facilities should be included in the computation of the "wages"
received by private respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an Petitioner Norma Mabeza contends that around the first week of May, 1991, she and her co-
employer may provide subsidized meals and snacks to his employees provided that the subsidy employees at the Hotel Supreme in Baguio City were asked by the hotel's management to sign an
shall not be less that 30% of the fair and reasonable value of such facilities. In such cases, the affidavit attesting to the latter's compliance with minimum wage and other labor standard
employer may deduct from the wages of the employees not more than 70% of the value of the provisions of law. The affidavit was drawn by management for the sole purpose of refuting
meals and snacks enjoyed by the latter, provided that such deduction is with the written findings of the Labor Inspector of DOLE apparently adverse to the private respondent.
authorization of the employees concerned.
Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to swear to the
Moreover, before the value of facilities can be deducted from the employees‘ wages, the following veracity and contents of the affidavit as instructed by management. After she refused to proceed
requisites must all be attendant: first, proof must be shown that such facilities are customarily to the City Prosecutor's Office - the affidavit was submitted to the Cordillera Regional Office of
furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted DOLE - petitioner avers that she was ordered by the hotel management to turn over the keys to
in writing by the employee; and finally, facilities must be charged at reasonable value. Mere her living quarters and to remove her belongings from the hotel premises. According to her,
availment is not sufficient to allow deductions from employees‘ wages. respondent strongly chided her for refusing to proceed to the City Prosecutor's Office to attest to
the affidavit. She thereafter reluctantly filed a leave of absence from her job which was denied by
management. When she attempted to return to work on May 10, 1991, the hotel's cashier,
SLL failed to present any company policy or guideline showing that provisions for meals and
Margarita Choy, informed her that she should not report to work and, instead, continue with her
lodging were part of the employee‘s salaries. It also failed to provide proof of the employees‘
unofficial leave of absence. Consequently, on May 13, 1991, three days after her attempt to return
written authorization, much less show how they arrived at their valuations. At any rate, it is not
to work, petitioner filed a complaint for illegal dismissal before the Arbitration Branch of the
even clear whether private respondents actually enjoyed said facilities.
National Labor Relations Commission - CAR Baguio City. In addition to her complaint for illegal
dismissal, she alleged underpayment of wages, non-payment of holiday pay, service incentive
The Court, at this point, makes a distinction between "facilities" and "supplements." It is of the leave pay, 13th month pay, night differential and other benefits.
view that the food and lodging, or the electricity and water allegedly consumed by private
respondents in this case were not facilities but supplements. In the case of Atok-Big Wedge Assn.
Responding to the allegations made in support of petitioner's complaint for illegal dismissal, private
v. Atok-Big Wedge Co.,22 the two terms were distinguished from one another in this wise:
respondent Peter Ng alleged before Labor Arbiter Pati that petitioner "surreptitiously left (her job)
without notice to the management" and that she actually abandoned her work. He maintained that
"Supplements," therefore, constitute extra remuneration or special privileges or benefits given to there was no basis for the money claims for underpayment and other benefits as these were paid
or received by the laborers over and above their ordinary earnings or wages. "Facilities," on the in the form of facilities to petitioner and the hotel's other employees.
other hand, are items of expense necessary for the laborer's and his family's existence and
subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when
ISSUE: Whether or not claims for underpayment and other benefits were paid in the form of
furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer
facilities.
would spend and pay for them just the same.

HELD: The labor arbiter's evaluation of the money claims in this case incredibly ignores existing
In short, the benefit or privilege given to the employee which constitutes an extra remuneration
law and jurisprudence on the matter. Its blatant one-sidedness simply raises the suspicion that
above and over his basic or ordinary earning or wage is supplement; and when said benefit or
something more than the facts, the law and jurisprudence may have influenced the decision at the
privilege is part of the laborers' basic wages, it is a facility. The distinction lies not so much in the
level of the Arbiter.
kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is
given.23 In the case at bench, the items provided were given freely by SLL for the purpose of
maintaining the efficiency and health of its workers while they were working at their respective Labor Arbiter accepted hook, line and sinker the private respondent's bare claim that the reason
projects the monetary benefits received by petitioner between 1981 to 1987 were less than minimum wage
94
was because petitioner did not factor in the meals, lodging, electric consumption and water she Petitioner Atok-Big Wedge Mining Co., Inc., prays that the resolution of the Court of Industrial
received during the period in her computations. Granting that meals and lodging were provided Relations sitting en banc, reconsidering an order of the Presiding Judge thereof, be set aside, or,
and indeed constituted facilities, such facilities could not be deducted without the employer else, that "the reopening of this case for introduction of additional evidence" be ordered.
complying first with certain legal requirements. Without satisfying these requirements, the
employer simply cannot deduct the value from the employee's wages. First, proof must be shown Petitioner contends "that the Court of Industrial Relations siting in banc committed a grave abuse
that such facilities are customarily furnished by the trade. Second, the provision of deductible of discretion:
facilities must be voluntarily accepted in writing by the employee. Finally, facilities must be (2) "In finding that the Christmas bonus for the year 1951 had been declared due and payable by
charged at fair and reasonable value. the board of directors of your petitioner and that the amount of P61,227.63 had been set aside for
this purpose;"
These requirements were not met in the instant case. Private respondent "failed to present any
company policy or guideline to show that the meal and lodging . . . (are) part of the salary;" he Issue:W/N the decision of the CIR in finding the Christmas bonus due and payable by the board
failed to provide proof of the employee's written authorization; and, he failed to show how he of directors of petitioner is proper
arrived at the valuations.
Held:YES. The foregoing facts fall squarely within the purview of the rule laid down in Philippine
Education Co. vs. Court of Industrial Relations and Union of Philippine Employees (92 Phil., 381),
Curiously, in the case at bench, the only valuations relied upon by the labor arbiter in his decision in which it was held:
were figures furnished by the private respondent's own accountant, without corroborative
evidence. On the pretext that records prior to the July 16, 1990 earthquake were lost or As heretofore stated the payment of bonus is not from the legal point of view a
destroyed, respondent failed to produce payroll records, receipts and other relevant documents, contractual and enforceable obligation. But the petitioner is not sued before a court of
where he could have, as has been pointed out in the Solicitor General's manifestation, "secured justice. It is before the Court of Industrial Relations. And according to the law of its
certified copies thereof from the nearest regional office of the Department of Labor, the SSS or the creation it may make an award for the purpose of settling and preventing further
BIR." disputes. And taking into consideration the facts and circumstances of the case that
bonuses had been given to the employees at lease in three previous years; that the
More significantly, the food and lodging, or the electricity and water consumed by the petitioner amount of P90,706.36 has been set aside for payment as bonus to its employees and
were not facilities but supplements. A benefit or privilege granted to an employee for the laborers and the reason for withholding the payment thereof was the strike stages by the
convenience of the employer is not a facility. The criterion in making a distinction between the two employees and laborers for more favorable working conditions which was declared legal
not so much lies in the kind (food, lodging) but the purpose. Considering, therefore, that hotel by the respondent court, justice and equity demand that bonus already set aside for its
workers are required to work different shifts and are expected to be available at various odd employees and laborers be paid to them. The award would still be within the ambit of the
hours, their ready availability is a necessary matter in the operations of a small hotel, such as the respondent court's power and function which is so detrimental to both labor and
private respondent's hotel. management and to the public wealth. Whether this petition be deemed and appeal by
certiorari under Rule 44 or one of certiorari under Rule 67, it is clear that the respondent
It is therefore evident that petitioner is entitled to the payment of the deficiency in her wages court had under and pursuant to the law of its creation the power and authority to make
equivalent to the full wage applicable from May 13, 1988 up to the date of her illegal dismissal. the award complained of.

The payment of Christmas bonus is more justifiable in the case at bar than in the Philippine
Additionally, petitioner is entitled to payment of service incentive leave pay, emergency cost of Education case in which said bonus was given for three (3) consecutive years, for petitioner herein
living allowance, night differential pay, and 13th month pay for the periods alleged by the had paid it for five (5) consecutive years, and regarded the amount of the Christmas bonus for
petitioner as the private respondent has never been able to adduce proof that petitioner was paid 1951 as "current liability", or "part of the cost of production," which was not done by the Philippine
the aforestated benefits. Education Co. These circumstances become more significant when we consider that a former
superintendent of petitioner herein, one by the name of Canon, had told its laborers, in 1950, "that
127. Atok Big Wedge Asso. vs. Atok Wedge Mining; G.R. No. L-7349; July 19, 1955 the Christmas bonus in the next year would be increased," thus indicating, not only that said
bonus would be paid in 1951, but, also, that it would be "increased." Although the order of the
Topic: Wages (Arts. 97-129 LC) Presiding Judge, reversed by the Court in banc, questions the competence of Canon to promise
said payment, the presumption is that he had been duly authorized to act as he did, in the
Facts:The industrial dispute which was elevated to our Court in banc, is about the petition filed by
absence of satisfactory proof to the contrary, and such proof is lacking. What is more, instead of
the Atok-Big Wedge Mutual Benefit Association, praying that petitioner company be ordered to pay
being disauthorized by petitioner's board of directors, the manner in which its accounts were kept,
its laborers and employees the Christmas bonus for 1951 and every year thereafter.
particularly the inclusion of the amount of the bonus in "the cost of productions," and the
95
treatment thereof as "current liability," confirms said promise or amounts to a ratification and the FACTS: A case was filed against CIT by, Panfilo Canete, et al., teachers of CIT, for non-payment
implementation thereof. In this respect the situation is analogous to that which obtained in H. E. of: a) cost of living allowances (COLA) under Pres. Dec. Nos. 525, 1123, 1614, 1678 and 1713, b)
Heacock Co. vs. National Labor Union (50 Off. Gaz., 4233, 4234-4237), in which a promise of the thirteenth (13th) month pay differentials and c) service incentive leave. CIT maintained that it had
President and General Manager of the Company was one of the factors which led to the decision paid the allowances mandated by various decrees but the same had been integrated in the
favorable to the payment of bonus to the employee concerned. teacher's hourly rate. It alleged that the payment of COLA by way of salary increases is in line with
Pres. Dec. No. 451. It also claimed in its position paper that it had paid thirteenth month pay to its
128. STATES MARINE CORP. VS. CEBU SEAMEN’S ASSC.G.R. No. L-12444 February 28, 1963 employees and that it was exempt from the payment of service incentive leave to its teachers who
were employed on contract basis. Minister of Labor and Employment issued the assailed Order
TOPIC: Wages and held that the basic hourly rate designated in the Teachers' Program is regarded as the basic
hourly rate of teachers exclusive of the COLA, and that COLA should not be taken from the 60%
FACTS: On September 12, 1952, the respondent union filed with the Court of Industrial Relations incremental proceeds of the approved increase in tuition fee.
(CIR), a petition against the States Marine Corporation, later amended on May 4, 1953, by
including as party respondent, the petitioner Royal Line, Inc. The Union alleged that that after the
Minimum Wage Law had taken effect, the petitioners required their employees on board their In a nutshell, the present controversy was precipitated by the claims of some school personnel for
vessels, to pay the sum of P.40 for every meal, while the masters and officers were not required to allowances and other benefits and the refusal of the private schools concerned to pay said
pay their meals. allowances and benefits on the ground that said items should be deemed included in the salary
increases they had paid out of the 60% portion of the proceeds from tuition fee increases provided
The petitioners‘ shipping companies, answering, averred that in enacting Rep. Act No. 602 for in section 3 (a) of Pres. Decree No. 451.
(Minimum Wage Law), the Congress had in mind that the amount of P.40 per meal, furnished to
employees should be deducted from the daily wages. Petitioner assails the aforesaid Order in this Special Civil Action of certiorari with Preliminary
Injunction and/or Restraining Order. The Court issued a Temporary Restraining Order on
ISSUE: WON meals are deductable from wages. December 7, 1981 against the enforcement of the questioned Order of the Minister of Labor and
Employment.
HELD: No. It is argued that the food or meals given to the deck officers, marine engineers and ISSUE: Whether or not allowances and other fringe benefits of employees may be charged
unlicensed crew members in question, were mere ―facilities‖ which should be deducted from against the 60% portion of the incremental proceeds provided for in sec. 3(a) of Pres. Dec. No.
wages, and not ―supplements‖ which, according to said section 19, should not be deducted from 451.
such wages, because it is provided therein: ―Nothing in this Act shall deprive an employee of the
right to such fair wage … or in reducing supplements furnished on the date of enactment.‖ In the RESOLUTION:This Court has consistently held, beginning with the University of the East case,
case of Atok-Big Wedge Assn. v. Atok-Big Wedge Co., L-7349, July 19, 1955; 51 O.G. 3432, the that if the schools have no resources other than those derived from tuition fee increases,
two terms are defined as follows — allowances and benefits should be charged against the proceeds of tuition fee increases which the
law allows for return on investments under section 3(a) of Pres. Dec. No. 451, therefore, not
―Supplements‖, therefore, constitute extra remuneration or special privileges or benefits given to against the 60% portion allocated for increases in salaries and wages.
or received by the laborers over and above their ordinary earnings or wages. ―Facilities‖, on the
other hand, are items of expense necessary for the laborer‘s and his family‘s existence and In University of Pangasinan Faculty Union v. University of Pangasinan, supra:
subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when
... The sixty (60%) percent incremental proceeds from the tuition increase are to be devoted
furnished by the employer are deductible there from, since if they are not so furnished, the laborer
entirely to wage or salary increases which means increases in basic salary. The law cannot be
would spend and pay for them just the same.
construed to include allowances which are benefits over and above the basic salaries of the
employees. To charge such benefits to the 60% incremental proceeds would be to reduce the
Facilities may be charged to or deducted from wages. Supplements, on the other hand, may not
increase in basic salary provided by law, an increase intended also to help the teachers and other
be so charged. Thus, when meals are freely given to crew members of a vessel while they were on
workers tide themselves and their families over these difficult economic times.
the high seas, not as part of their wages but as a necessary matter in the maintenance of the
health and efficiency of the crew personnel during the voyage, the deductions made there from for While coming to the aid of the private school system by simplifying the procedure for increasing
the meals should be returned to them, and the operator of the coastwise vessels affected should tuition fees, the Decree imposes as a condition for the approval of any such increase in fees, the
continue giving the same benefit. allocation of 60% of the incremental proceeds thereof, to increases in salaries or wages of school
personnel. This condition makes for a quid pro quo of the approval of any tuition fee hike by a
129. Cebu Institute of Technology vs Ople
school, thereby assuring the school personnel concerned, of a share in its proceeds. The condition

96
having been imposed to attain one of the main objectives of the Decree, which is to help the of months it effected a retrenchment program until it totally closed its business. On April 18, 1983,
school personnel cope with the increasing costs of living, the same cannot be interpreted in a FFW, a legitimate labor organization, filed with the Ministry of Labor and Employment, Bataan
sense that would diminish the benefit granted said personnel. Provincial Office, Bataan Export Processing Zone, Mariveles, Bataan, a complaint against petitioner
for illegal suspension, violation of the CBA and non-payment of the 14th month pay.
130. TRADERS ROYAL BANK, vs. NATIONAL LABOR RELATIONS COMMISSION &
TRADERS ROYAL BANK EMPLOYEES UNION G.R. No. 88168 August 30, 1990 After the hearing, the Executive LA rendered a Decision ordering Kamaya to pay the 14 th month
FACTS Respondent union filed a letter-complaint against petitioner TRB for the diminution of pay for 1982 of all its rank and file employees, plus the monetary equivalent of the benefits
benefits being enjoyed by the employees since time immemorial, e.g. mid-year bonus, from 2 mentioned in Section 6 of Article XII and Sections I and 2 of Article XII of the then existing CBA.
months gross pay to 2 months basic and year-end bonus from 3 months gross to only 2 months. The NLRC affirmed the same Decision. Kamaya now seeks to reverse the decision of the NLRC,
arguing that the latter tribunal committed grave abuse of discretion when it adopted the LA‘s
Petitioner insisted that it had paid the employees holiday pay. The practice of giving them bonuses decision saying that the 14th month pay cannot be withdrawn without violating Article 100 of the
at year‘s end, would depend on how profitable the operation of the bank had been. Labor Code.

NLRC found TRB guilty of diminution of benefits due to the private respondents and ordered it to Issue: Whether or not the NLRC gravely erred when it affirmed the LA‘s Decision ordering the
pay the said employees‘ claims for differentials in their holiday, mid-year, and year-end bonuses. Kamaya to pay 14th month pay
ISSUE Whether or not bonuses are part of labor standards.
Held: Yes.
HELD No. A bonus is a ―gratuity or act of liberality of the giver which the recipient has no right to
demand as a matter of right‖. It is something given in addition to what is ordinarily received by or It is patently obvious that Article 100 of the LC is clearly without applicability. The date of
strictly due the recipient. The granting of a bonus is basically a management prerogative which effectivity of the Labor Code is May 1, 1974. In the case at bar, petitioner extended its 14 th month
cannot be forced upon the employer ―who may not be obliged to assume the onerous burden of pay beginning 1979 until 1981. What is demanded is payment of the 14th month pay for 1982.
granting bonuses or other benefits aside from the employee‘s basic salaries or wages‖. Moreover, there is no law that mandates the payment of the 14th month pay. Also contractually,
as gleaned from the CBA between management and the union, there is no stipulation as to such
It is clear from the above-cited rulings that the petitioner may not be obliged to pay bonuses to its extra remuneration. Evidently, this omission is an acknowledgment that such benefit is entirely
employees. The matter of giving them bonuses over and above their lawful salaries and contilagent or dependent on the profitability of the company's operations. Having lost its catering
allowances is entirely dependent on the profits, if any, realized by the Bank from its operations business derived from Libyan students, Kamaya Hotel should not be penalized for its previous
during the past year liberality. An employer may not be obliged to assume a "double burden" of paying the 13th month
pay in addition to bonuses or other benefits aside from the employee's basic salaries or wages.

131. KAMAYA POINT HOTEL v. NLRC, FEDERATION OF FREE WORKERS (FFW), AND
132. ECOP vs. NWPC; G.R. No. 96169; September 24, 1991
MEMIA QUIAMBAO; G.R. No. 75289; August 31, 1989
Topic: Wages
Topic: Wages; Provision regarding diminution of benefits not applicable; Payment of the 14 th
Facts: On October 15, 1990, the Regional Board of the National Capital Region issued Wage Order
month pay not mandated by law
No. NCR-01, increasing the minimum wage by P17.00 daily in the National Capital Region. The
Trade Union Congress of the Philippines (TUCP) and the Personnel Management Association of the
Facts:
Philippines (PMAP) moved for reconsideration. ECOP opposed.
Private Respondent Quiambao, with thirty (30) others who are members FFW, were employed by
On October 23, 1990, the Board issued Wage Order No. NCR01-A, amending Wage Order No.NCR-
Kamaya as hotel crew. On the basis of the profitability of the company's business operations,
01. Said Order provides that all workers and employees in the private sector in the National
management granted a fourteenth (14th) month pay to its employees. In January 1982, operations
Capital Region already receiving wages above the statutory minimum wage rates up to one
ceased to give way to the hotel's conversion into a training center for Libyan scholars. However,
hundred and twenty-five pesos (P125.00) per day shall also receive an increase of seventeen
due to technical and financing problems, the Libyans pre-terminated the program on July 7, 1982,
pesos (P17.00) per day.
leaving petitioner without any business, aside from the fact that it was not paid for the use of the
hotel premises and in addition had to undertake repairs of the premises damaged by the Libyan
ECOP appealed to the NWPC contending that the board's grant of an "across-the-board" wage
students. All in all, Kamaya allegedly suffered losses amounting to P2,000,000. Although Kamaya
increase to workers already being paid more than existing minimum wage rates (up to P125.00 a
reopened the hotel premises to the public, it was not able to pick-up its lost patronage. In a couple
97
day) as an alleged excess of authority. ECOP further alleged that under the Republic Act No.
6727, the boards may only prescribe "minimum wages," not determine "salary ceilings." ECOP Held: No.
The absence of such signatures does not necessarily lead to the conclusion that the
likewise claims that Republic Act No. 6727 is meant to promote collective bargaining as the payment of wages was not received especially if it appears that the payslips for the same period
primary mode of settling wages, and in its opinion, the boards can not preempt collective bear the signatures of the respondents plus a certification that they received the full compensation
bargaining agreements by establishing ceilings. for the services rendered.
There is no hard-and-fast rule requiring that the employee‘s signature in the payroll is the only
On November 6, 1990, the Commission promulgated an Order, dismissing the appeal for lack of acceptable proof of payment. By implication, the respondents, in signing the payslips with their
merit. On November 14, 1990, the Commission denied ECOP‘s motion for reconsideration. Hence, acknowledgement of full compensation, unqualifiedly admitted the receipt thereof
this petition.
134. G & M (Phils.), Inc. vs. EPIFANIO CRUZ, G.R. No. 140495. April 15, 2005
Issue:Whether Wage Order No. NCR-01-A providing for new wage rates, as well as authorizing
various Regional Tripartite Wages and Productivity Boards to prescribe minimum wage rates for all Topic:The well-entrenched rule, especially in labor cases, is that findings of fact of quasi-
workers in the various regions, and for a National Wages and Productivity Commission to review, judicial bodies, like the National Labor Relations Commission (NLRC), are accorded with
among other functions, wage levels determined by the boards is valid. respect, even finality, if supported by substantial evidence. Particularly when passed upon
and upheld by the Court of Appeals, they are binding and conclusive upon the Supreme
Court and will not normally be disturbed.
Held:Yes, Wage Order No. NCR-01-A is valid. The Supreme Court held that Republic Act No. 6727
was intended to rationalize wages, first, by providing for full-time boards to police wages round-
FACTS: Petitioner G & M (Phils.), Inc. recruited respondent Cruz as trailer driver for its
the-clock, and second, by giving the boards enough powers to achieve this objective. The
foreign principal, Salim Al Yami Est., for a period of two years, and with a stipulated monthly
Congress meant the boards to be creative in resolving the annual question of wages without labor
salary of US$625. Respondent Cruz alleged that when he arrived in the Kingdom of Saudi Arabia,
and management knocking on the legislature's door at every turn.
he was made to sign an employment contract in blank and his salary was reduced to SR604.00.
Seven months into employment, his employer deported him. According to respondent, the cause
If Republic No. 6727 intended the boards alone to set floor wages, the Act would have no need for
for his dismissal was his complaint for sub-human working conditions, non-payment of wages and
a board but an accountant to keep track of the latest consumer price index, or better, would have
overtime pay, salary deduction and change of employer. Hence, he filed with the Labor Arbiter an
Congress done it as the need arises, as the legislature, prior to the Act, has done so for years.
Affidavit/Complaint against petitioner for illegal dismissal, underpayment and non-payment of
The fact of the matter is that the Act sought a "thinking" group of men and women bound by
wages, and refund of transportation expenses. Respondent Cruz claims that he was only paid in an
statutory standards.
amount equivalent to five months salary and he did not receive his salary for the last two months.
Respondent submitted a copy of his pay slip showing the amount of SR604.00 as his basic salary.
The Court is not convinced that the Regional Board of the National Capital Region, in decreeing an
across-the-board hike, performed an unlawful act of legislation. It is true that wage-firing, like
Petitioner contends that respondent Cruz abandoned his job when he joined an illegal strike and
rate-fixing, constitutes an act Congress; it is also true, however, that Congress may delegate the
refused to report for work, constituting a breach of his employment contract and a valid cause for
power to fix rates provided that, as in all delegations cases, Congress leaves sufficient standards.
termination of employment. Petitioner also claims that the pay slip submitted by respondent is
As this Court has indicated, it is impressed that the above-quoted standards are sufficient, and in
inadmissible because the original copy was not presented and that its existence, due execution,
the light of the floor-wage method's failure, the Court believes that the Commission correctly
genuineness and authenticity were not established.
upheld the Regional Board of the National Capital Region

133. Kar Asia, Inc et al. vs. Corona, G.R. No. 154985, August 24, 2004 The Labor Arbiter found merit in petitioner‘s claim that respondent abandoned his job, but
Topic: Wages nevertheless granted respondent‘s claim for underpayment of wages and two months unpaid
salary.
Facts:Labor Arbiter rendered a decision in favor of petitioners and NLRC affirmed the former‘s
decision. CA, upon respondent‘s petition, reversed NLRC‘s decision and stated that the payroll as On appeal to the NLRC, the same was dismissed for lack of merit. G & M (Phils.) Inc., and Salim Al
―evidence of payment does not meet the ‗substantial evidence‘ test. The same does not bear the Yami Est., was ordered jointly and severally liable to pay complainant Cruz the salary differentials
signatures of the respondent company‘s employees acknowledging receipt of the same amount‖. for five months and unpaid salaries for two months.
Hence, this petition.
Petitioner filed a special civil action for certiorari in the Court of Appeals, docketed as CA-G.R. SP
Issue: Whether or not the signatures of employees in the payroll are the only required proof of No. 49729, but it was dismissed for lack of merit. Hence, this petition for review on certiorari
payment of wages (COLA). under Rule 45 of the Rules of Court.

98
ISSUES: Whether or not there is evidence on record to support the findings of the Labor to deliver the respondent company‘s products from its factory in Mariveles, Bataan, to its various
Arbiter, the NLRC and the CA that respondent is entitled to the payment of salary differential and customers, mostly in Metro Manila. Initially, the petitioner was paid the sum of P350.00 per trip.
unpaid wages. This was later adjusted to P480.00 per trip and, at the time of his alleged dismissal, the petitioner
was receiving P900.00 per trip.
RULING: Factual findings of labor officials, who are deemed to have acquired
expertise in matters within their respective jurisdiction, are generally accorded not only Sometime in 1992, the petitioner expressed to respondent Alvin Lee, respondent
respect but even finality, and bind the Court when supported by substantial evidence. company‘s plant manager, his desire to avail himself of the benefits that the regular employees
It is not the Supreme Court‘s (SC) function to assess and evaluate the evidence all over again, were receiving such as overtime pay, nightshift differential pay, and 13th month pay, among
particularly where the findings of both the Arbiter and the Court of Appeals concur. others. Although he promised to extend these benefits to the petitioner, respondent Lee failed to
actually do so. On February 20, 1995, the petitioner filed a complaint for regularization. Before the
Nevertheless, even if the SC delves into the issues posed by petitioner, there is still no reason to case could be heard, respondent company terminated the services of the petitioner. Consequently,
grant the petition. It was the finding of the CA that it is the burden of petitioner to prove that the on May 25, 1995, the petitioner filed an amended complaint against the respondents for illegal
salaries paid by its foreign principal complied with the contractual stipulations of their agency- dismissal, unfair labor practice and non-payment of overtime pay, nightshift differential pay, 13th
worker agreement. Since petitioner failed to discharge such burden, then it was correct for the month pay, among others.
NLRC to rely on respondent‘s claim of underpayment. The respondents, for their part, denied the existence of an employer-employee
relationship between the respondent company and the petitioner. They averred that the petitioner
The rule is that the burden of proving payment of monetary claims rests on the was an independent contractor as evidenced by the contract of service which he and the
employer, in this case, herein petitioner, it being the employment agency or recruitment entity, respondent company entered into. This contract of service was dated December 12, 1984. It was
and agent of the foreign principal, Salim Al Yami Est., which recruited respondent. Thus, it was subsequently renewed twice, on July 10, 1989 and September 28, 1992. Except for the rates to be
stated in the Jimenez vs. NLRC that: paid to the petitioner, the terms of the contracts were substantially the same. The relationship of
the respondent company and the petitioner was allegedly governed by this contract of service.
As a general rule, one who pleads payment has the burden of proving it.
Even where the plaintiff must allege non-payment, the general rule is The respondents, likewise, maintained that they did not dismiss the petitioner. Rather, the
that the burden rests on the defendant to prove payment, rather than severance of his contractual relation with the respondent company was due to his violation of the
on the plaintiff to prove non-payment. The debtor has the burden of terms and conditions of their contract. The petitioner allegedly failed to observe the minimum
showing with legal certainty that the obligation has been discharged by degree of diligence in the proper maintenance of the truck he was using, thereby exposing
payment. respondent company to unnecessary significant expenses of overhauling the said truck.

Petitioner merely denied respondent‘s claim of underpayment. It did not present any controverting
evidence to prove full payment. Hence, the findings of the Labor Arbiter, the NLRC and the CA that
ISSUE: Whether the element of ―payment of wages‖ to determine the existence of employer-
respondent Cruz was not fully paid of his wages stand.
employee relationship is present in this case
With regard to the admissibility of the pay slips, both the Labor Arbiter and the NLRC found that it HELD: YES.The elements to determine the existence of an employment relationship are: (1) the
was admissible as evidence. As a general rule, the Court is not duty-bound to delve into selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal;
the accuracy of the NLRC’s factual findings in the absence of a clear showing that and (4) the employers power to control the employees conduct. All the four elements are present
these were arbitrary and bereft of any rational basis. In the present case, petitioner failed in this case.
to demonstrate any arbitrariness or lack of rational basis on the part of the NLRC.
Wages are defined as remuneration or earnings, however designated, capable of being
Article 221 of the Labor Code provides that proceedings before the NLRC are not expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission
covered by the technical rules of evidence and procedure. The probative value of the copy basis, or other method of calculating the same, which is payable by an employer to an employee
of the pay slips is aptly justified by the NLRC. under a written or unwritten contract of employment for work done or to be done, or for service
rendered or to be rendered. That the petitioner was paid on a per trip basis is not significant. This
135. CHAVEZ VS NLRC; GR NO. 146530; January 17, 2005 TOPIC: Wages is merely a method of computing compensation and not a basis for determining the existence or
absence of employer-employee relationship. One may be paid on the basis of results or time
FACTS: The respondent company, Supreme Packaging, Inc., is in the business of manufacturing
expended on the work, and may or may not acquire an employment status, depending on whether
cartons and other packaging materials for export and distribution. It engaged the services of the
the elements of an employer-employee relationship are present or not. In this case, it cannot be
petitioner, Pedro Chavez, as truck driver on October 25, 1984. As such, the petitioner was tasked
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gainsaid that the petitioner received compensation from the respondent company for the services Trucking and ordered the latter to pay P84, 387.05 in unpaid commissions. Jimenez argues that
that he rendered to the latter. the NLRC erred in finding that the Juanatas were not paid their commissions in full.

Moreover, under the Rules Implementing the Labor Code, every employer is required to Issue:1.WON Fredelito Juanatas is an employee of JJ‘s Trucking?
pay his employees by means of payroll. The payroll should show, among other things, the 2. WON the private respondents were not paid their commissions in full
employees rate of pay, deductions made, and the amount actually paid to the employee.
Interestingly, the respondents did not present the payroll to support their claim that the petitioner
was not their employee, raising speculations whether this omission proves that its presentation Held:1. No. Fredelito is not an employee because his case does not fall under the four fold test:
would be adverse to their case. a. selection and engagement of employee
OTHER RELEVANT INFO: Of the four elements of the employer-employee relationship, the b. payment of wages
control test is the most important. Compared to an employee, an independent contractor is one c. power of dismissal
who carries on a distinct and independent business and undertakes to perform the job, work, or d. power of control
service on its own account and under its own responsibility according to its own manner and The power of control over the conduct of the employee is lacking. Fredelito was not subject to the
method, free from the control and direction of the principal in all matters connected with the power of control and dismissal by the petitioner but of his father.
performance of the work except as to the results thereof. Hence, while an independent contractor
enjoys independence and freedom from the control and supervision of his principal, an employee 2. Yes. The right of respondent Pedro Juanatas to be paid a commission equivalent to 17%, later
is subject to the employer‘s power to control the means and methods by which the employees increased to 20% of the gross income is not disputed by the petitioners.
work is to be performed and accomplished. P r i v a t e r e s p o nd e n t s a d m i t r e c e i p t o f p a r t i a l p a y m e n t b u t t h e p e t i t io n e r s s t i l l
h a v e t o p r e se n t p r o o f o f f u l l p a y m e n t . I n t h e c a s e t h e petitioners have the burden of
Although the respondents denied that they exercised control over the manner and methods by proving such full payment but the petitioners failed to do so. T h e p e t i t i o ne r s m e r e l y
which the petitioner accomplished his work, a careful review of the records shows that the latter s u b m i t t e d a n o t e b o o k s h o w i ng t h e a l l e g e d v al e s o f p r i v a t e r e s p o nd e n t s f o r t h e
performed his work as truck driver under the respondent‘s supervision and control y e a r 1 9 9 0 t h e s a m e i s inadmissible and cannot be given probative value considering that it is
not properly accomplished is undated and unsigned and is thus uncertain as to its origin and
136. JIMENEZ VS NLRC, 225 SCRA 84 authenticity.

Facts:Pedro and Fredelito Juanatas, father and son, filed a claim for unpaid wages/commissions,
separation pay and damages against JJs Trucking and/or Dr. Bernardo Jimenez. They alleged that 137. VILLAR VS NLRC; GR NO. 130935
they were hired by Bernardo Jimenez as driver/mechanic and helper, respectively, in his trucking
firm, JJs Trucking. They were assigned to a ten-wheeler truck to haul soft drinks of Coca-Cola FACTS: Sometime in March 1994 petitioners, who were members of the Federation of Free
Bottling Company and paid on commission basis. That for the years 1988 and 1989 they received Workers Union, filed before the Department of Labor a petition for certification election among the
only a partial commission of P84, 000.00 from JJs Trucking‘s total gross income of almost P1, rank-and-file employees of HI-TECH. The petition was granted and a certification election was
000,000.00 for the said two years. Consequently, with their commission for that period being conducted inside the company premises on 31 July 1994. However, petitioners lost in the election
computed at 20% of said income, there was an unpaid balance to them of P106,211.86; that until as the HI-TECH employees voted for "No Union."
March 1990 when their services were illegally terminated, they were further entitled to
P15,050.309 which, excluding the partial payment of P7,000.00, added up to a grand total of On 1 August 1994 and the succeeding days thereafter, petitioners failed to report for work. They
P114, 261.86 due and payable to them; and that Jimenez‘ refusal to pay their foretasted alleged that they were barred from entering the premises of HI-TECH; hence, they immediately
commission was a ploy to unjustly terminate them. filed before the Labor Arbiter separate complaints for illegal dismissal and labor standards claims
against HI-TECH, Herman T. Go, owner, and Carmen Belano, general manager.
On his part, Jimenez contend that Fredelito Juanatas was not an employee of the firm but was
merely a helper of his father Pedro; that all commissions for 1988 and 1989, as well as those up to Petitioners claimed that they were summarily dismissed from employment by the management of
March, 1990, were duly paid; and that the truck driven by Pedro Juanatas was sold in 1991 and, HI-TECH in retaliation for organizing a labor union in the work premises as well as in filing the
therefore, private respondents were not illegally dismissed. petition for certification election before the Department of Labor. They further averred that they
were paid daily wages ranging from P81.00 to P145.00 which were below the minimum fixed by
The labor arbiter ordered the payment of the P15,050 but dismissed the complaint of Fredelito. On law and that they were required to work six (6) days a week from 8 oclock in the morning to 7
appeal, the NLRC modified the labor arbiter‘s ruling and declared Fredelito as an employee of JJs oclock in the evening without being paid for the overtime. Neither were they paid their service
incentive leave pay and 13th month pay.

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Petitioners originally numbered twenty-three (23) but fifteen (15) of them desisted in the course of understandable and should not be taken against petitioners. Yielding to the company offer would
the proceedings thus leaving only the eight (8) petitioners who pursued their cause to the end. deprive them of back wages to which they are entitled thus effectively negating their cause.

On the other hand, HI-TECH denied having dismissed petitioners. It contended that petitioners We conclude that petitioners did not abandon their jobs but were illegally dismissed therefore by
were probably stung by their defeat in the certification election such that they refused to work private respondent. As a consequence, they are entitled to reinstatement with full back wages,
thereafter; that the HI-TECH management called their attention concerning their unauthorized undiminished by earnings elsewhere, to be computed from their illegal dismissal to their actual
absences without leave but petitioners continued with their leave en masse with the sole intention reinstatement.
of crippling the company operations; and, that petitioners could return to their jobs at HI-TECH
any time at their discretion. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and
other similar documents which will show that overtime, differentials, service incentive leave and
other claims of workers have been paid are not in the possession of the worker but in the custody
ISSUES: (a) Whether petitioners deliberately and unjustifiably abandoned their employment, or and absolute control of the employer. Thus, in choosing not to present evidence to prove that it
were illegally dismissed by the management of HI-TECH; had paid all the monetary claims of petitioners, HI-TECH failed once again to discharge the onus
probandi. Consequently, we have no choice but to award those claims to petitioners.
(b) Whether petitioners are entitled to back wages and other monetary benefits.
Finally, we note that the handwritten letters and affidavits executed by Arturo Manimtim and
HELD: It is well-settled that factual findings of quasi-judicial agencies such as the NLRC are Exequiel Manimtim partake of the nature of quitclaims. Nevertheless, a deed of release or
generally accorded not only respect but, at times, even finality. However, the rule is not absolute quitclaim cannot bar employees from demanding benefits to which they are legally entitled, or stop
and admits of certain well-recognized exceptions. Thus, when the findings of fact of the NLRC are them from contesting the legality of their dismissal. The acceptance of these benefits does not
not supported by substantial evidence, capricious or arbitrary, and directly at variance with those amount to an estoppel.[13] However, it is but just that the amounts received by Arturo and Exequiel
of the Labor Arbiter, this Court may make an independent evaluation of the facts of the case. Manimtim as consideration for the quitclaims be deducted from their respective monetary awards.

We find sufficient cause to deviate from the findings of the NLRC. It is clear from the records that
sometime in August 1994, immediately after petitioners supposedly "refused to work" having lost 138. Traders Royal Bank vs NLRC, 189 SCRA 274; G. R. No. 88168, August 30, 1990
earlier in the certification election, several complaints for illegal dismissal against HI-TECH were
filed by petitioners. These are sufficient proofs that they were never guilty of leaving their jobs. TOPIC: bonus, diminution of benefits
The concept of abandonment of work is inconsistent with the immediate filing of complaints for Facts: Respondent union filed a letter-complaint against petitioner TRB for the diminution of
illegal dismissal. An employee who took steps to protest his layoff could not by any logic be said to benefits being enjoyed by the employees since time immemorial, e.g. mid-year bonus, from 2
have abandoned his work. months gross pay to 2 months basic and year-end bonus from 3 months gross to only 2 months.

Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. Petitioner insisted that it had paid the employees holiday pay. The practice of giving them
To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever bonuses at year‘s end, would depend on how profitable the operation of the bank had been.
the employer-employee relationship.[7] Mere absence of the employee is not sufficient. The burden
NLRC found TRB guilty of diminution of benefits due to the private respondents and
of proof to show a deliberate and unjustified refusal of an employee to resume his employment
ordered it to pay the said employees‘ claims for differentials in their holiday, mid-year, and year-
without any intention of returning rests on the employer.
end bonuses.
Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. Issue: Whether or not bonuses are part of labor standards.
To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever
the employer-employee relationship. Mere absence of the employee is not sufficient. The burden Held: No. A bonus is a ―gratuity or act of liberality of the giver which the recipient has no right to
of proof to show a deliberate and unjustified refusal of an employee to resume his employment demand as a matter of right‖. It is something given in addition to what is ordinarily received by or
without any intention of returning rests on the employer. strictly due the recipient. The granting of a bonus is basically a management prerogative which
cannot be forced upon the employer ―who may not be obliged to assume the onerous burden of
HI-TECH next avers that it had expressed willingness to reinstate petitioners to their former granting bonuses or other benefits aside from the employee‘s basic salaries or wages‖.
positions in the company, but the latter adamantly refused. Suffice it to say that such refusal is

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139. MARCOS v NLRC and service incentive leave pay on the ground of equity from the start of employment up until the
Topic: Bonus finality of the NLRC decision.

FACTS: Petitioners herein have served respondent Insular for more than 20 years in multiples of JPL appealed this decision stating that there was no illegal dismissal thus not entitling the former
five (20-30 years). They were terminated due to redundancy and thus were given special employees to separation pay and other benefits.
redundancy benefits. But theywere denied their service awardswhich was set apart from the
redundancy fund. They were made to sign a quitclaim, which they complied, but they still Issue/Held:
submitted a letter of protest. They inquired from the DOLE-LS on the validity of the denial of
their service awards, to which DOLE decided in their favour. The service awardswere part of 1) WoN the three (3) former employees are entitled to separation pay due to illegal
the Employee‘s Manual and were thereforecompany policies. The award was earned on the dismissal? NO
anniversary date. Even if the employees were separated from service before the anniversary date, 2) WoN the former employees are entitled to SIL and 13th month pay? YES
they were still entitled to the material benefits of the award. However, respondent still refused to 3) WoN the payment may be reckoned from the first day of employment for the SIL? NO
pay this. On its 80thanniversary, the company approved an anniversary equivalent of one-month
salary to its employees. The petitioners alleged that they were entitled to this.The LA ruled Ratio:
in petitioners‘ favour, but NLRC reversed this,upholding the validity of the quitclaim they signed
voluntarily. 1) In the instant case, there was no dismissal to speak of.
a. Private respondents were simply not dismissed at all, whether legally or illegally.
ISSUE: WON the promised bonus may be enforced by the employees against the employer b. What they received from JPL was not a notice of termination of employment, but
a memo informing them of the termination of CMC‘s contract with JPL.
HELD: YES! The bonus is not a gift or gratuity, but is paid for some services or consideration and i. More importantly, they were advised that they were to be reassigned. At
is in addition to what would ordinarily be given. The term ―bonus‖ as used in employment that time, there was no severance of employment to speak of.
contracts, also conveys an idea of something which is gratuitous, or which may be claimed to be c. Furthermore, Art. 286 of the Labor Code allows the bona fide suspension of the
gratuitous, over and above the prescribed wage which the employer agrees to pay. operation of a business or undertaking for a period not exceeding six (6) months,
wherein an employee/employees are placed on the so-called "floating status."
i. When that "floating status" of an employee lasts for more than six
The weight of authority in American jurisprudence, with which we are persuaded to agree, is that months, he may be considered to have been illegally dismissed from the
after the acceptance of a promise by an employer to pay the bonus, the same cannot be service.
withdrawn, but may be enforced by the employee. However, in the case at bar, equity demands ii. If it exceeds the period. he is entitled to the corresponding benefits for
that the performance and anniversary bonuses should be prorated to the number of months that his separation, and this would apply to suspension either of the entire
petitioners actually served respondent company in the year 1990. This observation should be business or of a specific component thereof.
taken into account in the computation of the amounts to be awarded to petitioners d. As clearly borne out by the records of this case, private respondents sought
employment from other establishments even before the expiration of the six (6)-
month period provided by law.
i. Thus, they are not entitled to separation pay.
140. JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, 2006
e. The Court is not inclined in this case to award separation pay even on the ground
of compassionate justice.
Facts: JPL employed the services of Gonzalez, Abesa, and Aninipot as merchandisers and assigned
i. The Court of Appeals relied on the caseswherein the Court awarded
them to a client (CMC). Sometime thereafter, the three (3) were informed that the contract with
separation pay to legally dismissed employees on the grounds of equity
CMC would be terminated and that they were to be reassigned to another client within six (6)
and social consideration.
months.
ii. Said cases involved employees who were actually dismissed by their
employers, whether for cause or not.
Prior to the expiration of the said six (6) months, Gonzalez, Abesa and Aninipot already sought
iii. In Agabon v. National Labor Relations Commission the SC ruled that an
employment elsewhere. The three former JPL employees also filed a case for illegal dismissal with
employer is liable to pay indemnity in the form of nominal damages to a
the NLRC, including claims for separation pay and service incentive leave pay.
dismissed employee if, in effecting such dismissal, the employer failed to
comply with the requirements of due process.
The Labor Arbiter dismissed the case for lack of merit, which was affirmed by the NLRC. On appeal
to the CA, the CA affirmed the dismissal of the case but awarded Separation Pay, 13 th month pay,
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 2) Admittedly, private respondents were not given their 13th month pay and service Section 7. The COMPANY agrees to continue the practice of granting, in its discretion,
incentive leave pay while they were under the employ of JPL. financial assistance to covered employees in December of each year, of not less than 100% of
a. Instead, JPL provided salaries which were over and above the minimum wage. basic pay.
b. The Court rules that the difference between the minimum wage and the actual This CBA is effective until year 2000. In the latter part of 1998, the parties started re-
salary received by private respondents cannot be deemed as their 13th month negotiations for the fourth and fifth years of their CBA. When the talks between the parties
pay and service incentive leave pay as such difference is not equivalent to or of bogged down, respondent union filed a Notice of Strike on the ground of bargaining deadlock.
the same import as the said benefits contemplated by law. Thereafter, Honda filed a Notice of Lockout. [To cut the story short, Secretary assumed
3) While computation for the 13th month pay should properly begin from the first day of jurisdiction; second notice of strike; Sec. again assumed jurisdiction]
employment, the service incentive leave pay should start a year after commencement of The management of Honda subsequently issued a memorandumannouncing its new computation
service, for it is only then that the employee is entitled to said benefit. of the 13th and 14th month pay to be granted to all its employees whereby the thirty-one (31)-day
a. On the other hand, the computation for both benefits should only be up to 15 long strike shall be considered unworked days for purposes of computing said benefits. As per the
August 1996, or the last day that private respondents worked for JPL. company‘s new formula, the amount equivalent to 1/12 of the employees‘ basic salary shall be
b. To extend the period to the date of finality of the NLRC resolution would negate deducted from these bonuses, with a commitment however that in the event that the strike is
the absence of illegal dismissal, or to be more precise, the want of dismissal in declared legal, Honda shall pay the amount deducted.
this case. Respondent union opposed the pro-rated computation of the bonuses in a letter. Honda
i. Besides, it would be unfair to require JPL to pay private respondents the sought the opinion of the Bureau of Working Conditions (BWC) on the issue. BWC agreed with the
said benefits beyond 15 August 1996 when they did not render any pro-rata payment of the 13th month pay as proposed by Honda.
service to JPL beyond that date. The matter was brought before the Grievance Machinery in accordance with the parties‘
ii. These benefits are given by law on the basis of the service actually existing CBA but when the issue remained unresolved, it was submitted for voluntary arbitration,
rendered by the employee, and in the particular case of the service the latter invalidated Honda‘s computation. Motion for Partial Reconsideration by Honda denied.
incentive leave, is granted as a motivation for the employee to stay CA dismissed for lack of merit. Hence, this petition for review.
longer with the employer.
iii. There is no cause for granting said incentive to one who has already ISSUE: WON the pro-rated computation of the 13th month pay and the other bonuses in question
terminated his relationship with the employer. is valid and lawful.
c. The law in protecting the rights of the employees authorizes neither oppression
nor self-destruction of the employer. HELD: The petition lacks merit.
i. It should be made clear that when the law tilts the scale of justice in A collective bargaining agreement refers to the negotiated contract between a legitimate labor
favor of labor, it is but recognition of the inherent economic inequality organization and the employer concerning wages, hours of work and all other terms and conditions
between labor and management. of employment in a bargaining unit.8 As in all contracts, the parties in a CBA may establish such
ii. The intent is to balance the scale of justice; to put the two parties on stipulations, clauses, terms and conditions as they may deem convenient provided these are not
relatively equal positions. contrary to law, morals, good customs, public order or public policy.9 Thus, where the CBA is
There may be cases where the circumstances warrant favoring labor over the interests of clear and unambiguous, it becomes the law between the parties and compliance
management but never should the scale be so tilted if the result is an injustice to the employer. therewith is mandated by the express policy of the law.10
Justitia nemini neganda est (Justice is to be denied to none) In some instances, however, the provisions of a CBA may become contentious, as in this case.
We agree with the findings of the arbitrator that the assailed CBA provisions are far from being
unequivocal. A cursory reading of the provisions will show that they did not state categorically
141. HONDA PHILS., INC. vs. SAMAHAN NG MALAYANG MANGGAGAWA SA HONDA whether the computation of the 13th month pay, 14th month pay and the financial assistance
would be based on one full month‘s basic salary of the employees, or pro-rated based on the
FACTS: the case stems from the Collective Bargaining Agreement (CBA) forged between petitioner compensation actually received. The arbitrator thus properly resolved the ambiguity in favor
Honda and respondent union Samahan ng Malayang Manggagawa sa Honda (respondent union) of labor as mandated by Article 1702 of the Civil Code.11 The Court of Appeals affirmed the
which contained the following provisions: arbitrator‘s finding and added that the computation of the 13th month pay should be based on
Section 3. 13th Month Pay the length of service and not on the actual wage earned by the worker.
The COMPANY shall maintain the present practice in the implementation [of] the 13th month pay.
Section 6. 14th Month Pay Under the Revised Guidelines on the Implementation of the 13th month pay issued on November
The COMPANY shall grant a 14th Month Pay, computed on the same basis as computation of 13th 16, 1987, the salary ceiling of P1,000.00 under P.D. No. 851 was removed. It further provided
Month Pay. that the minimum 13th month pay required by law shall not be less than one-twelfth

103
(1/12) of the total basic salary earned by an employee within a calendar year. The including non-basic pay or other benefits in the base figure used in the computation of the 13th-
guidelines pertinently provides: month pay of its employees. It cited the Rules and Regulations Implementing P.D. No. 851 (13th-
Month Pay Law), effective December 22, 1975, Sec. 2(b) which stated that:
The ―basic salary‖ of an employee for the purpose of computing the 13th month pay
shall include all remunerations or earnings paid by his employer for services "Basic salary" shall include all remunerations or earnings paid by an employer to an
rendered but does not include allowances and monetary benefits which are not employee for services rendered but may not include cost-of-living allowances granted
considered or integrated as part of the regular or basic salary, such as the cash pursuant to P.D. No. 525 or Letter of Instruction No. 174, profit-sharing payments, and all
equivalent of unused vacation and sick leave credits, overtime premium, night allowances and monetary benefits which are not considered or integrated as part of the
differential and holiday pay, and cost-of-living allowances. regular or basic salary of the employee at the time of the promulgation of the Decree on
December 16, 1975.

For employees receiving regular wage, we have interpreted ―basic salary‖ to mean, not the Hence, the new computation reduced the employees‘ thirteenth month pay. Sevilla
amount actually received by an employee, but 1/12 of their standard monthly wage multiplied by Trading Workers Union – SUPER (Union, for short), a duly organized and registered union, through
their length of service within a given calendar year. the Grievance Machinery in their Collective Bargaining Agreement, contested the new computation
and reduction of their thirteenth month pay. The parties failed to resolve the issue. The parties
The revised guidelines also provided for a pro-ration of this benefit only in cases of resignation or submitted the issue of "whether or not the exclusion of leaves and other related benefits in the
separation from work. As the rules state, under these circumstances, an employee is entitled to a computation of 13th-month pay is valid" to respondent Accredited Voluntary Arbitrator Tomas E.
pay in proportion to the length of time he worked during the year, reckoned from the time he Semana (A.V.A. Semana, for short) of the National Conciliation and Mediation Board, for
started working during the calendar year. consideration and resolution. The Union alleged that petitioner violated the rule prohibiting the
elimination or diminution of employees‘ benefits as provided for in Art. 100 of the Labor Code, as
Considering the foregoing, the computation of the 13th month pay should be based on the length amended. Sevilla Trading insisted that the computation of the 13th-month pay is based on basic
of service and not on the actual wage earned by the worker. In the present case, there being no salary, excluding benefits such as leaves with pay, as per P.D. No. 851, as amended. It maintained
gap in the service of the workers during the calendar year in question, the that, in adjusting its computation of the 13th-month pay, it merely rectified the mistake its
computation of the 13th month pay should not be pro-rated but should be given in full. personnel committed in the previous years. The Voluntary Arbitrator decided in favor of the Union.
The memorandum dated November 22, 1999 which Honda issued shows that it was the first time Sevilla then filed an appeal to the supreme court.
a pro-rating scheme was to be implemented in the company. That a full month payment of ISSUE: Whether or not there was mistake or error in the computation of the thirteenth month
the 13th month pay is the established practice at Honda is further bolstered by the affidavits pay.
executed by Feliteo Bautista and Edgardo Cruzada. Both attested that when they were absent
from work due to motorcycle accidents, and after they have exhausted all their leave credits and HELD: No.
were no longer receiving their monthly salary from Honda, they still received the full amount of
their 13th month, 14th month and financial assistance pay. Petitioner‘s submission of financial statements every year requires the services of a
certified public accountant to audit its finances. It is quite impossible to suggest that they have
This, we rule likewise constitutes voluntary employer practice which cannot be discovered the alleged error in the payroll only in 1999. This implies that in previous years it does
unilaterally withdrawn by the employer without violating Art. 100 of the Labor Code. not know its cost of labor and operations. This is merely basic cost accounting. Also, petitioner
failed to adduce any other relevant evidence to support its contention. Aside from its bare claim of
142. Sevilla Trading Company, Vs A.V.A. Tomas E. Semana, Sevilla Trading Workers mistake or error in the computation of the thirteenth month pay, petitioner merely appended to its
Union–Super; G.R. No. 152456; April 28, 2004. petition a copy of the 1997-2002 Collective Bargaining Agreement and an alleged "corrected"
computation of the thirteenth month pay. There was no explanation whatsoever why its inclusion
TOPIC: 13TH month pay (P.D. 851) of non-basic benefits in the base figure in the computation of their 13th-month pay in the prior
years was made by mistake, despite the clarity of statute and jurisprudence at that time.
FACTS:For two to three years prior to 1999, Sevilla Trading Company (Sevilla Trading), a
domestic corporation engaged in trading business, organized and existing under Philippine laws, There is, thus no reason for any mistake in the construction or application of the law.
added to the base figure, in its computation of the 13th-month pay of its employees, the amount When petitioner Sevilla Trading still included over the years non-basic benefits of its employees,
of other benefits received by the employees which are beyond the basic pay. It entrusted the such as maternity leave pay, cash equivalent of unused vacation and sick leave, among others in
preparation of the payroll to its office staff, including the computation and payment of the 13th- the computation of the 13th-month pay, this may only be construed as a voluntary act on its part.
month pay and other benefits. When it changed its person in charge of the payroll in the process Putting the blame on the petitioner‘s payroll personnel is inexcusable.
of computerizing its payroll, and after audit was conducted, it allegedly discovered the error of
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 A company practice favorable to the employees had indeed been established and the of Agreement wherein respondent agreed to re-open the hotel subject to certain concessions
payments made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and offered by DIHFEU-NFL in its Manifesto.
supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or
eliminated by the employer, by virtue of Sec. 10 of the Rules and Regulations Implementing P.D. The retained employees individually signed a Reconfirmation of Employment which
No. 851, and Art. 100 of the Labor Code of the Philippines which prohibit the diminution or embodied the new terms and conditions of their continued employment. Each employee was
elimination by the employer of the employees‘ existing benefits. [Tiangco vs. Leogardo, Jr., 122 assisted by Rojas who also signed the document.
SCRA 267 (1983)]
Local officers of the National Federation of Labor (NFL), filed a Notice of Mediation [ before the
In the case at bar, petitioner Sevilla Trading kept the practice of including non-basic National Conciliation and Mediation Board, Region XI, Davao City. In said Notice, it was stated that
benefits such as paid leaves for unused sick leave and vacation leave in the computation of their the Union involved was DARIUS JOVES/DEBBIE PLANAS ET. AL, National Federation of Labor. The
13th-month pay for at least two (2) years. This, we rule likewise constitutes voluntary employer issue raised in said Notice was the Diminution of wages and other benefits through unlawful
practice which cannot be unilaterally withdrawn by the employer without violating Art. 100 of the Memorandum of Agreement.
Labor Code:

Art. 100. Prohibition against elimination or diminution of benefits. – Nothing in this Book Cullo denied any existence of an intra-union dispute among the members of the union.
shall be construed to eliminate or in any way diminish supplements, or other employee Cullo, however, confirmed that the case was filed not by the IHEU-NFL but by the NFL. When
benefits being enjoyed at the time of promulgation of this Code. asked to present his authority from NFL, Cullo admitted that the case was, in fact, filed by
individual employees named in the SPAs. The hearing officer directed both parties to elevate the
aforementioned issues to AVA Olvida.
143. INSULAR HOTEL EMPLOYEES UNION-NFL vs, WATERFRONT INSULAR HOTEL
DAVAO G.R. Nos. 174040-41 September 22, 2010 Respondent again raised its objections, specifically arguing that the persons who signed
the complaint were not the authorized representatives of the Union indicated in the Submission
FACTS: Respondent Waterfront Insular Hotel Davao sent the Department of Labor and Agreement nor were they parties to the MOA. AVA Olvida directed respondent to file a formal
Employment (DOLE), Region XI, Davao City, a Notice of Suspension of Operations notifying the motion to withdraw its submission to voluntary arbitration.
same that it will suspend its operations for a period of six months due to severe and serious
business losses. In said notice, respondent assured the DOLE that if the company could not AVA Olvida issued a Resolution denying respondent's Motion to Withdraw. Respondent
resume its operations within the six-month period, the company would pay the affected employees filed a Motion for Reconsideration where it stressed that the Submission Agreement was void
all the benefits legally due to them. because the Union did not consent thereto. Respondent pointed out that the Union had not issued
any resolution duly authorizing the individual employees or NFL to file the notice of mediation with
During the period of the suspension, Domy R. Rojas, the President of Davao Insular Hotel Free the NCMB. Cullo filed a Motion for Inhibition against AVA Olvida.
Employees Union (DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent
respondent a number of letters asking management to reconsider its decision. Cullo assailed the Decision in so far as it did not categorically order respondent to pay the
covered workers their differentials in wages reckoned from the effectivity of the MOA up to the
Rojas intimated that the members of the Union were determined to keep their jobs and actual reinstatement of the reduced wages and benefits. Respondent, for its part, questioned
that they believed they too had to help respondent among others the jurisdiction of the NCMB. Respondent maintained that the MOA it had entered
into with the officers of the Union was valid. Both cases were consolidated by the CA.
In another letter, Rojas reiterated the Union's desire to help respondent and set forth
their proposals. The CA rendered a Decision ruling in favor of respondent.

In a handwritten letter, Rojas once again appealed to respondent for it to consider their Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, denied by the
proposals and to re-open the hotel. In said letter, Rojas stated that manpower for fixed manning CA.
shall be one hundred rank-and-file Union members instead of the one hundred forty-five originally
proposed. ISSUE: Whether Cullo is correct that the CA must have erred in concluding that Article 100 of the
Labor Code applies only to benefits already enjoyed at the time of the promulgation of the Labor
After series of negotiations, respondent and DIHFEU-NFL, represented by its President, Code.
Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino C. Bation, Jr., signed a Memorandum
HELD: Article 100 of the Labor Code provides:
105
 PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in 144. Davao Integrated Ports Stevedoring Services vs. Abarquez (GR No. 102132; March 19, 1993)
this Book shall be construed to eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time of the promulgation of this Topic: Prohibition Against Elimination or Diminution of Benefits
Code. Facts: Petitioner Davao Integrated Port Stevedoring Services (petitioner-company) and private
respondent ATU-TUCP (Union), the exclusive collective bargaining agent of the rank and file
On this note, Apex Mining Company, Inc. v. NLRC is instructive, to wit: workers of petitioner-company, entered into a collective bargaining agreement (CBA) on October
16, 1985 which, under Sections 1 and 3, Article VIII thereof, provide for sick leave with pay
Clearly, the prohibition against elimination or diminution of benefits set out in benefits each year to its employees who have rendered at least one (1) year of service with the
Article 100 of the Labor Code is specifically concerned with benefits already company. Upon its renewal on April 15, 1989, the provisions for sick leave with pay benefits were
enjoyed at the time of the promulgation of the Labor Code. Article 100 does not, in reproduced under Sections 1 and 3, Article VIII of the new CBA, but the coverage of the said
other words, purport to apply to situations arising after the promulgation date of benefits was expanded to include the "present Regular Extra Labor Pool as of the signing of this
the Labor Code x x x.[66] Agreement." Section 3, Article VIII, as revised.
Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with During the effectivity of the CBA of October 16, 1985 until three (3) months after its
respondent that the same does not prohibit a union from offering and agreeing to reduce wages renewal on April 15, 1989, or until July 1989 (a total of three (3) years and nine (9) months), all
and benefits of the employees. In Rivera v. Espiritu, this Court ruled that the right to free collective the field workers of petitioner who are members of the regular labor pool and the present regular
bargaining, after all, includes the right to suspend it, thus: extra labor pool who had rendered at least 750 hours up to 1,500 hours were extended sick leave
with pay benefits. Any unenjoyed portion thereof at the end of the current year was converted to
A CBA is a contract executed upon request of either the employer or the exclusive cash and paid at the end of the said one-year period pursuant to Sections 1 and 3, Article VIII of
bargaining representative incorporating the agreement reached after negotiations the CBA. The number of days of their sick leave per year depends on the number of hours of
with respect to wages, hours of work and all other terms and conditions of service per calendar year in accordance with the schedule provided in Section 3, Article VIII of the
employment, including proposals for adjusting any grievances or questions arising CBA.
under such agreement. The primary purpose of a CBA is the stabilization of labor-
management relations in order to create a climate of a sound and stable The commutation of the unenjoyed portion of the sick leave with pay benefits of the
industrial peace. In construing a CBA, the courts must be practical and realistic intermittent workers or its conversion to cash was, however, discontinued or withdrawn when
and give due consideration to the context in which it is negotiated and the petitioner-company under a new assistant manager, Mr. Benjamin Marzo (who replaced Mr. Cecilio
purpose which it is intended to serve. Beltran, Jr. upon the latter's resignation in June 1989), stopped the payment of its cash equivalent
on the ground that they are not entitled to the said benefits under Sections 1 and 3 of the 1989
The assailed PAL-PALEA agreement was the result of voluntary collective CBA.
bargaining negotiations undertaken in the light of the severe financial situation
Issue: Whether or not only the regular workers whose work are not intermittent are entitled to
faced by the employer, with the peculiar and unique intention of not merely
the benefit of conversion to cash of the unenjoyed portion of sick leave?
promoting industrial peace at PAL, but preventing the latters closure. We find no
conflict between said agreement and Article 253-A of the Labor Code. Article 253- Held: No. It is not disputed that both classes of workers are entitled to sick leave with pay
A has a two-fold purpose. One is to promote industrial stability and predictability. benefits provided they comply with the conditions set forth under Section 1 in relation to the last
Inasmuch as the agreement sought to promote industrial peace at PAL during its paragraph of Section 3, to wit: (1) the employee-applicant must be regular or must have rendered
rehabilitation, said agreement satisfies the first purpose of Article 253-A. The at least one year of service with the company; and (2) the application must be accompanied by a
other is to assign specific timetables wherein negotiations become a matter of certification from a company-designated physician.
right and requirement. Nothing in Article 253-A, prohibits the parties from
waiving or suspending the mandatory timetables and agreeing on the remedies to Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and
enforce the same. vacation leave benefits, among others, are by their nature, intended to be replacements for
regular income which otherwise would not be earned because an employee is not working during
In the instant case, it was PALEA, as the exclusive bargaining agent of PALs ground employees, the period of said leaves. They are non-contributory in nature, in the sense that the employees
that voluntarily entered into the CBA with PAL. It was also PALEA that voluntarily opted for the 10- contribute nothing to the operation of the benefits. By their nature, upon agreement of the parties,
year suspension of the CBA. Either case was the unions exercise of its right to collective they are intended to alleviate the economic condition of the workers.
bargaining. The right to free collective bargaining, after all, includes the right to suspend it
Whatever doubt there may have been early on was clearly obliterated when petitioner-
company recognized the said privilege and paid its intermittent workers the cash equivalent of the
106
unenjoyed portion of their sick leave with pay benefits during the lifetime of the CBA of October HELD: Yes. Article 110 as amended by RA No. 6715 provides – ―Worker preference in case of
16, 1985 until three (3) months from its renewal on April 15, 1989. Well-settled is it that the said bankruptcy. — In the event of bankruptcy or liquidation of an employer's business, his workers
privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company shall enjoy first preference as regards their unpaid wages and other monetary claims, any
may not unilaterally withdraw, or diminish such benefits. It is a fact that petitioner-company had, provision of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be
on several instances in the past, granted and paid the cash equivalent of the unenjoyed portion of paid in full before the claims of the Government and other creditors may be paid.
the sick leave benefits of some intermittent workers. Under the circumstances, these may be
deemed to have ripened into company practice or policy which cannot be peremptorily withdrawn. Section 10, Rule III, Book III of the Omnibus Rules Implementing the Labor Code as
amended by Section 1 of the Rules and Regulations Implementing RA 6715 provides: ―Sec. 10.
Payment of wages and other monetary claims in case of bankruptcy. — In case of bankruptcy or
145. DBP vs. NLRC; G.R. Nos. 82763-64; March 19, 1990 liquidation of the employer's business, the unpaid wages and other monetary claims of the
employees shall be given first preference and shall be paid in full before the claims of government
TOPIC: Labor Standards II. Wages (Arts. 97-129 LC) O. Worker Preference in case of Bankruptcy and other creditors may be paid.‖
(Art.110 LC)
Article 110 of the Labor Code, in determining the reach of its terms, cannot be
FACTS: The complainants were former employees of Lirag Textile Mills, Inc. (LIRAG, for short). viewed in isolation. Rather, Article 110 must be read in relation to the provisions of the Civil Code
LIRAG was a mortgage debtor of DBP. concerning the classification, concurrence and preference of credits, which provisions find
Around September 1981, LIRAG started terminating the services of its employees on the particular application in insolvency proceedings where the claims of all creditors, preferred or non-
ground of retrenchment. LIRAG has since ceased operations presumably due to financial reverses. preferred, may be adjudicated in a binding manner.

On 1 March 1982, Labor Alliance for National Development (LAND), on behalf of 180 The right to preference given to workers under Article 110 of the Labor Code cannot exist in any
dismissed members, filed a Complaint against LIRAG seeking separation pay, 13th month pay, effective way prior to the time of its presentation in distribution proceedings. It will find application
gratuity pay, sick leave and vacation leave pay and emergency allowance. when, in proceedings such as insolvency, such unpaid wages shall be paid in full before the
"claims of the Government and other creditors" may be paid. But, for an orderly settlement of a
In a Decision, dated 30 July 1982, Labor Arbiter Apolinar L. Sevilla ordered LIRAG to pay debtor's assets, all creditors must be convened, their claims ascertained and inventoried, and
the individual complainants. The NLRC (Third Division) affirmed the same on 28 March 1982. That thereafter the preferences determined in the course of judicial proceedings which have for their
judgment became final and executory. object the subjection of the property of the debtor to the payment of his debts or other lawful
obligations.
On 15 April 1983, a Writ of Execution was issued. On the same day, DBP extrajudicially
foreclosed the mortgaged properties for failure of LIRAG to pay its mortgage obligation. On 7 146. Boliano et al vs. Padoliana
December 1984, LAND filed a "Motion for Writ of Execution and Garnishment" of the proceeds of Petitioners A.N. Bolinao, Jr., et al. were all former employees of Sabena Mining Corporation(SMC).
the foreclosure sale. On 12 February 1986, and over the opposition of DBP, Labor Arbiter Sevilla In1982 and 1983 they were laid off without being recalled. Petitioners filed a formal complaint for
granted the Writ of Garnishment and directed DBP to remit to the NLRC the sum of P6,292,380.00 collection of unpaid salaries, unused accrued vacation and sick leave benefits, 13th month pay and
out of the proceeds of the foreclosed properties of LIRAG sold at public auction in order to satisfy separation pay beforethe NLRC against SMC and Development Bank of the Philippines.On
the judgment previously rendered. May,1984, a compromise agreement was entered into by the parties, wherein petitioners were to
be paidon a staggered basis the collective amount of P385,583.95. The company faithfully
DBP contends the NLRC has no jurisdiction over it since it was not a party to the case and
complied with thescheduled payments only up to March, 1985 because it ceased operations
that it was deprived of its property without due process of law. In the meantime, on 3 February
effective April 1, 1985. With thisdevelopment, petitioners moved for the issuance of a writ of
1987, by virtue of Proclamation Nos. 50 and 50-A, the Asset Privatization Trust (APT) became the
execution.The Labor Arbiter issued a writ of execution against the company to collect the balance
transferee of the DBP foreclosed assets of LIRAG.
of P311,580.14 OnJune 27, 1985 Deputy Sheriff garnished the remaining amount of P150,279.64
It appears that on 21 December 1987, a partial Compromise Agreement was entered into in the savings account of thecompany at the DBP). However, the same amount was previously
between APT and LAND (Litex Chapter) whereby APT paid the complainants-employees, ex gratia. garnished by two creditors of the company;namely, Bank of America and Phelps Dodge (Phils.),
Inc. Bank of America garnished the amount in April, 1982while Phelps Dodge garnished the
On 25 March 1988, the NLRC (First Division) affirmed the appealed Order and dismissed amount in June, 1984.The respondent court(RTC Manila) issued an order denying the motion to
the DBP appeal. intervene and dismissing the thirdparty claim, declaring that the garnishment made by its Deputy
Sheriff in favor of respondent Phelps Dodge,Phils., Inc. superior to the rights of
ISSUE: Whether or not the NLRC gravely abused its discretion in affirming the Order of the Labor
petitioners.Petitioners contend that under Article 110 and its implementing rules; and regulations
Arbiter granting the Writ of Garnishment out of the proceeds of LIRAG's properties foreclosed by
of the Labor Code, theclaims of the laborers for unpaid wages and other monetary benefits due
DBP to satisfy the judgment in these cases.
107
them for services rendered prior tobankruptcy enjoy first preference in the satisfaction of credits The CA disregarded the petitioner‘s charge of abandonment against the respondent for
against a bankrupt company. The respondent maintains that the rights of preference and first lien their failure to show that there was deliberate and unjustified refusal on the part of the respondent
of petitioners, as former employees of SMC, underaforesaid law and rules, are operative only in an to resume his employment. The CA also ruled that the respondents filing of a complaint for illegal
insolvency court and in a bankrupt case. dismissal manifested his desire to return to his job, thus negating the petitioner‘s charge of
abandonment.
ISSUE:W/N petitioners enjoy preferential right or claim over the funds of Sabena Mining
Corporation asprovided for under the provisions of Article 110 of the New Labor Code Issue: Whether or not the respondent act constitutes abandonment.

HELD:NO. It is quite clear from the provisions of Article 110 of the Labor Code and Section 10, Held: In a dismissal situation, the burden of proof lies with the employer to show that the
Rule VIII, Book H of the Revised Rules and Regulations Implementing the Labor Code, that a dismissal was for a just cause. In the present case, the petitioners claim that there was no illegal
declaration of bankruptcy or a judicial liquidation must be present before the worker's preference dismissal, since the respondent abandoned his job. The petitioners point out that the respondent
may be enforced. Thus, it was held that Article 110 of the Labor Code and its implementing rule freely quit his work as a driver when he was suspected of forging vehicle parts receipts.
cannot be invoked absent a formal declaration of bankruptcy or a liquidation order. In the case at Abandonment of work, or the deliberate and unjustified refusal of an employee to resume his
bar, there was no showing of any insolvency proceeding or declaration of bankruptcy or judicial employment, is a just cause for the termination of employment under paragraph (b) of Article 282
liquidation that was being filed by Sabena Mining Corporation. It is only an extra-judicial of the Labor Code, since it constitutes neglect of duty. Abandonment is a matter of intention that
foreclosure that was being enunciated as when DBP extra-judicially foreclosed the assets of cannot be lightly presumed from equivocal acts. To constitute abandonment, two elements must
Sabena Mining Corporation. concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a
clear intent, manifested through overt acts, to sever the employer-employee relationship. The
employer bears the burden of showing a deliberate and unjustified refusal by the employee to
147. CRC AGRICULTURAL TRADING VS NLRC resume his employment without any intention of returning.
Facts: The respondent alleged that the petitioners employed him as a driver sometime in In the present case, the petitioners did not adduce any proof to show that the respondent clearly
1985. The respondent worked for the petitioners until he met an accident in 1989, after which the and unequivocally intended to abandon his job or to sever the employer-employee
petitioners no longer allowed him to work. After six years, or in February 1995, the petitioners relationship. Moreover, the respondents filing of the complaint for illegal dismissal on June 22,
again hired the respondent as a driver. Sometime in March 2003, the petitioners ordered 2004 strongly speaks against the petitioners charge of abandonment; it is illogical for an employee
respondent to have the alternator of one of its vehicles repaired. The respondent brought the to abandon his employment and, thereafter, file a complaint for illegal dismissal.
vehicle to a repair shop and subsequently gave the petitioners two receipts issued by the repair
shop. The latter suspected that the receipts were falsified and stopped talking to him and giving 148. Coca-Cola Bottlers vs. dela Cruz, et. al.; GR No. 184977; December 7, 2009
him work assignments. The petitioners, however, still paid him P700.00 and P500.00 on April 15 Topic: Job Contracting and Labor Only Contracting
and 30, 2004, respectively, but no longer gave him any salary after that. As a result, the D.O. No. 18-A, series of 2011
respondent and his family moved out of the petitioner‘s compound and relocated to a nearby Labor Only Contractors are Not Necessary Parties
place. The respondent claimed that the petitioners paid him a daily wage of P175.00, but did not
give him service incentive leave, holiday pay, rest day pay, and overtime pay. He also alleged that Facts: Respondents filed two separate complaints4 for regularization with money claims against
the petitioners did not send him a notice of termination. The petitioner‘s claimed that the Coca-Cola Bottlers Philippines, Inc.
respondent was a seasonal driver; his work was irregular and was not fixed. The petitioners paid
the respondentP175.00 daily, but under a no work no pay basis They are route helpers assigned to work in the petitioner‘s trucks. They go from the Coca- Cola
sales offices or plants to customer outlets; they were hired either directly by the petitioner or by its
The Labor Arbiter, in his decision of April 15, 2005, ruled in the respondents favor contractors, but they do not enjoy the full remuneration, benefits and privileges granted to the
declaring that he had been illegally dismissed. The labor arbiter held that as a regular employee, petitioner‘s regular sales force.
the respondents services could only be terminated after the observance of due process. The labor
arbiter likewise disregarded the petitioner‘s charge of abandonment against the respondent. Issues: WON the contractors were excluded as necessary parties?
WON the contractors were engaged in labor-only contracting?
The NLRC ruled that the respondent was not illegally dismissed and deleted the labor Held:
arbiter‘s award of backwages and attorney‘s fees. The NLRC reasoned out that it was respondent
1. No. In this trilateral relationship, the principal controls the contractor and his employees
himself who decided to move his family out of the petitioner‘s lot; hence, no illegal dismissal
with respect to the ultimate results or output of the contract; the contractor, on the other
occurred. Moreover, the respondent could not claim wages for the days he did not work, as he
hand, controls his employees with respect, not only to the results to be obtained, but with
was employed by the petitioners under a no work no pay scheme.
respect to the means and manner of achieving this result. This trilateral relationship under
a legitimate job contracting is different from the relationship in a labor-only contracting
108
 situation because in the latter, the contractor simply becomes an agent of the principal; provided the muscle work that sale and distribution required and were thus necessarily
either directly or through the agent, the principal then controls the results as well as the under the company‘s control and supervision in doing these tasks.
means and manner of achieving the desired results. There is "labor-only" contracting
where the person supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises, among others, Still another way of putting it is that the contractors were not independently selling and
and the workers recruited and placed by such persons are performing activities which are distributing company products, using their own equipment, means and methods of selling
directly related to the principal business of such employer. and distribution; they only supplied the manpower that helped the company in the
handing of products for sale and distribution. In the context of D.O. 18-02, the contracting
In such cases, the person or intermediary shall be considered merely as an agent of the for sale and distribution as an independent and self-contained operation is a legitimate
employer who shall be responsible to the workers in the same manner and extent as if the contract, but the pure supply of manpower with the task of assisting in sales and
alter were directly employed by him. distribution controlled by a principal falls within prohibited labor-only contracting.

If, as so argued by petitioner company, only those whose work are directly involved in the
2. Yes. Labor-only contracting is hereby declared prohibited x x x labor-only contracting shall
production of softdrinks may be held performing functions necessary and desirable in its
refer to an arrangement where the contractor or subcontractor merely recruits, supplies or
usual business or trade, there would have been no need for it to even maintain regular
places workers to perform a job, work or service for a principal, and any of the following
truck sales route helpers.
elements are present:
i) The contractor or subcontractor does not have sufficient capital or investment
Peerless and Excellent were mere suppliers of labor who had no sufficient capitalization
which relates to the job, work or service to be performed and the employees
and equipment to undertake sales and distribution of softdrinks as independent activities
recruited, supplied or placed by such contractor or subcontractor are performing
separate from the manufacture of softdrinks, and who had no control and supervision
activities which are directly related to the main business of the principal; or
over the contracted personnel. They are therefore labor-only contractors. Consequently,
ii) The contractor does not exercise the right to control over the performance of the
the contracted personnel, engaged in component functions in the main business of the
work of the contractual-employee.
company under the latter‘s supervision and control, cannot but be regular company
The "right to control" refers to the prerogative of a party to determine, not only the end
employees.
result sought to be achieved, but also the means and manner to be used to achieve this
end.
149.Babas Vs. Lorenzo Shipping Corp.Gr no: 186091 Dec. 15, 2010.

The legitimate job contractor must have the capitalization and equipment to undertake FACTS:Respondent Lorenzo Shipping Corporation (LSC) is a duly organized domestic corporation
the sale and distribution of the manufacturer‘s products, and must do it on its own using engaged in the shipping industry; it owns several equipments necessary for its business. LSC
its own means and selling methods. The contract between the principal and the contractor entered into a General Equipment Maintenance Repair and Management Services
is not the final word on how the contracted workers relate to the principal and the Agreement(Agreement) with Best Manpower Services, Inc. (BMSI).Simultaneous with the
purported contractor; the relationships must be tested on the basis of how they actually execution of the Agreement, LSC leased its equipment, tools, and tractors to BMSI. The period of
operate. Both the Peerless and the Excellent contracts show that their obligation was lease was coterminous with the Agreement.BMSI then hired petitioners on various dates to work at
solely to provide the company with "the services of contractual employees," and nothing LSC as checkers, welders, utility men, clerks, forklift operators, motor pool and machine shop
more. These contracted services were for the handling and delivery of the company‘s workers, technicians, trailer drivers, and mechanics.Six years later, or on May 1, 2003, LSC entered
products and allied services. Following D.O. 18-02 and the contracts that spoke purely of into another contract with BMSI, this time, a service contract. Petitioners filed with the Labor
the supply of labor, the CA concluded that Peerless and Excellent were labor-only Arbiter a complaint for regularization against LSC and BMSI. LSC terminated the
contractors unless they could prove that they had the required capitalization and the right Agreement,consequently, petitioners lost their employment. BMSI asserted that it is an
of control over their contracted workers. independent contractor.It averred that it was willing to regularize petitioners; however, some of
them lacked the requisite qualifications for the job.BMSI was willing to reassign petitioners who
The CA concluded that other than the petitioner‘s bare allegation, there is no indication in were willing to accept reassignment.LSC, on the other hand, averred that petitioners were
the records that Peerless and Excellent had substantial capital, tools or investment used employees of BMSI and were assigned to LSC by virtue of the Agreement.BMSI is an independent
directly in providing the contracted services to the petitioner. Thus, in the handling and job contractor with substantial capital or investment in the form of tools, equipment, and
delivery of company products, the contracted personnel used company trucks and machinery necessary in the conduct of its business. The Agreement between LSC and BMSI
equipment in an operation where company sales personnel primarily handled sales and constituted legitimate job contracting.Thus, petitioners were employees of BMSI and not of LSC.
distribution, merely utilizing the contracted personnel as sales route helpers. They only After due proceedings, the LA rendered a decision dismissing petitioners complaint. The NLRC
109
reversed the LA The CA in turn reversed the NLRC. petitioners were entitled to security of tenure and could only be dismissed for just or authorized
causes and after they had been accorded due process. Petitioners lost their employment when LSC
ISSUE: Whether or not petitioners are employees of LSC. terminated its Agreement with BMSI.However, the termination of LSCs Agreement With BMSI
cannot be considered a just or an authorized cause for petitioners dismissal
HELD:
Yes. Labor-only contracting, a prohibited act, is an arrangement where the contractor or
subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a 150. Alilin v. Patron Corporation; G.R. No. 177592; June 9, 2014
principal. In labor-only contracting, the following elements are present:(a) the contractor or
subcontractor does not have substantial capital or investment to actually perform the job, work, or Topic: Job Contracting and Labor Only Contracting; Solidary liability
service under its own account and responsibility;and (b) the employees recruited, supplied, or
placed by such contractor or subcontractor perform activities which are directly related to the main Facts: Petron is a domestic corporation engaged in the oil business. In 1968, Romualdo D.
business of the principal. On the other hand, permissible job contracting or subcontracting refers Gindang Contractor, owned and operated by Romuldo D. Gindang, started recruiting laborers for
to an arrangement whereby a principal agrees to put out or farm out with the contractor or finding to Petron‘s Mandaue Bulk Plant. When Romualdo died in 1989, his son Romeo, through
subcontractor the performance or completion of a specific job, work, or service within a definite or Romeo D. Gindang Services (RDG), took over and continued to provide manpower services to
predetermined period, regardless of whether such job, work, or service is to be performed or Petron.
completed within or outside the premises of the principal.
Petron and RDG entered into a Contract for Services from June 1, 2000 to May 31, 2002,
A person is considered engaged in legitimate job contracting or subcontracting if the following to provide Petron with janitorial, maintenance, tanker receiving, packaging and other utility
conditions concur: (a) The contractorcarries on a distinct and independent business and services. This was extended until Sept. 30, 2002. Upon expiration, no renewal was done and
undertakes the contract work on his account under his own responsibility according to his own workers were dismissed. Petitioners filed an illegal dismissal complaint against Petron alleging that
manner and method, free from the control and direction of his employer or principal in all matters they were barred from continuing their services on Oct. 16, 2002. Petitioners claim that although it
connected with the performance of his work except as to the results thereof; (b) The was RDG who hired them and paid their salaries, RDG is a labor-only contractor, acting as agent of
contractorhas substantial capital or investment; and (c) The agreement between the principal and Petron, their true employer. Claiming to be regular employees, petitioners asserted that their
the contractoror subcontractor assures the contractual employees' entitlement to all laborand dismissal allegedly in view of the expiration of the service contract between Petron and RDG is
occupational safety and health standards, free exercise of the right to self-organization, security of illegal.
tenure, and social welfare benefits.
RDG denied liability over petitioners‘ claim of illegal dismissal while also corroborating
Given the above standards, BMSI is engaged in labor-only contracting. First, petitioners worked at petitioners‘ claim that they are regular employees of Patron. Petron, on the other hand, maintained
LSCs premises, and nowhere else. Other than the provisions of the Agreement, there was no that RDG is an independent contractor and the real employer of the petitioners. It was RDG, which
showing that it was BMSI which established petitioners working procedure and methods, which hired and selected petitioners, paid their salaries and wages, and directly supervised their work.
supervised petitioners in their work, or which evaluated the same. There was absolute lack of
evidence that BMSI exercised control over them or their work, except for the fact that petitioners Both Labor Arbiter and NLRC ruled that petitioners are Petron‘s regular employees. CA
were hired by BMSI. Second, LSC was unable to present proof that BMSI had substantial however ruled otherwise stating that there is no employer-employee relationship, and that RDG is
capital.The record before us is bereft of any proof pertaining to the contractors capitalization, nor in fact an independent labor contractor with sufficient capitalization and investment. The Motion
to its investment in tools, equipment, or implements actually used in the performance or for Reconsideration by Petitioners was dismissed, hence this petition.
completion of the job, work, or service that it was contracted to render.What is clear was that the
equipment used by BMSI were owned by, and merely rented from, LSC.Third, petitioners Issues:
performed activities which were directly related to the main business of LSC. The work of 1. Whether or not RDG is a labor-only contractor?
petitioners as checkers, welders, utility men, drivers, and mechanics could only be characterized as 2. Whether or not Petron is liable for the petitioners‘ dismissal?
part of, or at least clearly related to, and in the pursuit of, LSCs business. Logically, when
petitioners were assigned by BMSI to LSC, BMSI acted merely as a labor-only contractor. Lastly, as Held:
found by the NLRC, BMSI had no other client except for LSC, and neither BMSI nor LSC refuted 1. YES. The contractor is always presumed to be a labor-only contractor, unless such
this finding, thereby bolstering the NLRC finding that BMSI is a labor-only contractor. contractor overcomes the burden of proving otherwise. However, where the principal is the one
claiming that the contractor is legitimate, said principal (Petron) has the burden of proving so. In
Indubitably, BMSI can only be classified as a labor-only contractor. Consequently, the workers that this case, the presumption that RDG is a labor-only contractor stands, due to the failure of Petron
BMSI supplied to LSC became regular employees of the latter. Having gained regular status,

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to discharge the burden of proving otherwise. The Court also found that the works performed contractor, and the "labor only" contractor is considered as a mere agent of the principal, the real
were directly related to Petron‘s business negating further Petron‘s claim that RDG is independent. employer. The former becomes solidarily liable for all the rightful claims of the employees. The
petitioner therefore, being the principal employer and Lancer, being the labor-only contractor, are
2. YES. ―A finding that a contractor is ‗labor-only‘ contractor is equivalent that there is an solidarily liable for respondents unpaid money claims
employer-employee relationship between the principal and the employees of the supposed
contractor.‖ In this case, the employer-employee relationship becomes all the more apparent due 152 Temic Automotive Phils.vs. Temic Automotive Phils, Inc. Employees Union-FFW;
to the presence of the power of control on the part of Petron over RDG. Petron, therefore, being G.R. No. 186965; 23 December 2009
the principal employer and RDG, being the labor-only contractor, are solidarity liable for the
petitioners‘ illegal dismissal and monetary claims FACTS: Respondent Temic Automotive Philippines, Inc. Employees Union-FFW (union) is the
exclusive bargaining agent of the petitioner's rank-and-file employees.
151. SUPERIOR PACKAGING CORPORATION vs. BALAGSA et al.; G.R. No. 178909;
October 10, 2012 The petitioner, engaged in the manufacture of electronic brake systems and comfort body
electronics for automotive vehicles, contracts out some of the work in the warehouse department
Topic: Job Contracting and Labor-Only Contracting to three independent service providers or forwarders, These forwarders also have their own
employees who hold the positions of clerk, material handler, system encoder and general clerk.
Facts: The petitioner engaged the services of Lancer to provide reliever services to its business, The regular employees of the petitioner and those of the forwarders share the same work area
which involves the manufacture and sale of commercial and industrial corrugated boxes. Pursuant and use the same equipment, tools and computers all belonging to the petitioner.
to a complaint filed by the respondents against the petitioner and its President, Cesar Luz
(Luz), for under payment of wages, non-payment of premium pay for worked rest, overtime pay
This outsourcing arrangement gave rise to a union grievance on the issue of the scope and
and non-payment of salary, the Department of Labor and Employment (DOLE) conducted an
coverage of the collective bargaining unit, contending contracting out services is the same as the
inspection of the petitioner‘s premises and found several violations. Petitioner and Luz were
workplace activities undertaken by regular company rank-and-file employees covered by the
ordered, among others, to pay respondents their total claims in the amount of P 840,463 and
bargaining unit who work under company control. The union demanded that the forwarders'
38/100. They filed a motion for reconsideration on the ground that respondents are not its
employees be absorbed into the petitioner's regular employee force and be given positions within
employees but of Lancer and that they pay Lancer in lump sum for the services rendered.
the bargaining unit. The petitioner, on the other hand, on the premise that the contracting
arrangement with the forwarders is a valid exercise of its management prerogative, posited that
DOLE ruled that the petitioner failed to support its claim that the respondents are not its
the union's position is a violation of its management prerogative to determine who to hire and
employees, and even assuming that they were employed by Lancer, the petitioner still cannot
what to contract out, and that the regular rank-and-file employees and their forwarders‘
escape liability as Section 13 of the Department Order No.10, Series of 1997, makes a principal,
employees serving as its clerks, material handlers, system encoders and general clerks do not have
jointly and severally liabl with the contractor to contractual employees to the extent of the work
the same functions as regular company employees.
performed when the contractor fails to pay its employees‘ wages. The CA affirmed the Secretary of
DOLE‘s orders, with the modification in that Luz was absolved of any personal liability under the
award. The issue was submitted to voluntary arbitration and later, to the jurisdiction of the Court of
Appeals, to which both decided that the regular employees should be considered regular
The petitioner filed a partial motion for reconsideration insofar as the finding of solidary employees of the company.
liability with Lancer is concerned but it was denied by the CA. Hence, this petition.
ISSUE: Is the contracting out arrangement valid
Issue: Whether petitioner may be held solidarily liable with Lancer Staffing & Services Network,
Inc. for respondents‘ unpaid money claims. HELD:Yes, the arrangement is valid.

Held: It was the consistent conclusion of the DOLE and the CA that Lancer was not an In Meralco v. Quisumbing, the SC joined the universal recognition of outsourcing as a legitimate
independent contractor but was engaged in "labor-only contracting"; hence, the petitioner was activity and held that a company can determine in its best judgment whether it should contract out
considered an indirect employer of respondents and liable to the latter for their unpaid money a part of its work for as long as the employer is motivated by good faith; the contracting is not for
claims.. purposes of circumventing the law; and does not involve or be the result of malicious or arbitrary
action. In this case, the petitioner's declared objective for the arrangement is to achieve greater
A finding that a contractor is a "labor-only" contractor is equivalent to declaring that there economy and efficiency in its operations – a universally accepted business objective and standard
is an employer-employee relationship between the principal and the employees of the supposed
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that the union has never questioned, thus negating the presence of bad faith. Also, no evidence regardless of whether such activity is peripheral or core in nature. However, in order for such
was presented to show abuses and anything detrimental to the status of the regular employees. outsourcing to be valid, it must be made to an independent contractor because the current labor
rules expressly prohibit labor-only contracting.
The contract of the forwarding arrangement in the case at bar complies with the requirements of
the Labor Code and its IRR. The company controls its employees in the means, method and results In the instant case, the financial statements of Promm-Gem show that Promm-Gem has substantial
of their work, in the same manner that the forwarder controls its own employees in the means, investment which relates to the work to be performed. These factors negate the existence of the element
manner and results of their work. Complications and confusion result because the company at the specified in Section 5(i) of DOLE Department Order No. 18-02.
same time controls the forwarder in the results of the latter‘s work, without controlling however
the means and manner of the forwarder employees‘ work. The records also show that Promm-Gem supplied its complainant-workers with the relevant materials,
necessary for them to perform their work. Promm-Gem also issued uniforms to them. It is also relevant to
More importantly, it should be noted that that the forwarding agreements were already in place mention that Promm-Gem already considered the complainants working under it as its regular, not merely
when the current CBA was signed. In this sense, the union accepted the forwarding arrangement, contractual or project, employees. This circumstance negates the existence of element (ii) as stated in
albeit implicitly, when it signed the CBA with the company. Thereby, the union agreed, again Section 5 of DOLE Department Order No. 18-02, which speaks of contractual employees. This, furthermore,
implicitly by its silence and acceptance, that jobs related to the contracted forwarding activities are negates on the part of Promm-Gem bad faith and intent to circumvent labor laws which factors have often
not regular company activities and are not to be undertaken by regular employees falling within been tipping points that lead the Court to strike down the employment practice or agreement concerned as
the scope of the bargaining unit but by the forwarders‘ employees. contrary to public policy, morals, good customs or public order.

153. Aliviadoet. Al. vs Procter & Gamble, and PrommGemm Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. It is a
legitimate independent contractor.
Facts: P&G is principally engaged in the manufacture and production of different consumer and
health products, which it sells on a wholesale basis to various supermarkets and distributors. To On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in capital of
enhance consumer awareness and acceptance of the products, P&G entered into contracts with only P31,250.00. There is no other evidence presented to show how much its working capital and assets
Promm-Gem and SAPS for the promotion and merchandising of its products. are.Furthermore, there is no showing of substantial investment in tools, equipment or other assets. It is clear
Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early that SAPS having a paid-in capital of only P31,250 - has no substantial capital. SAPS lack of substantial capital
as 1982 or as late as June 1991, to either May 5, 1992 or March 11, 1993. They individually signed is underlined by the records which show that its payroll for its merchandisers alone for one month would
employment contracts with either Promm-Gem or SAPS for periods of more or less 5 months at a already total P44,561.00. It had 6-month contracts with P&G. Yet SAPS failed to show that it could complete
time. They were assigned at different outlets, supermarkets and stores where they handled all the the 6-month contracts using its own capital and investment. Its capital is not even sufficient for one months
products of P&G. They received their wages from Promm-Gem or SAPS. SAPS and Promm-Gem payroll. SAPS failed to show that its paid-in capital of P31,250.00 is sufficient for the period required for it to
imposed disciplinary measures on erring merchandisers for reasons such as habitual absenteeism, generate its needed revenue to sustain its operations independently. Substantial capital refers to
dishonesty or changing day-off without prior notice. capitalization used in the performance or completion of the job, work or service contracted out. In the
In December 1991, petitioners filed a complaint against P&G for regularization, service present case, SAPS has failed to show substantial capital.
incentive leave pay and other benefits with damages. The complaint was later amended to include
the matter of their subsequent dismissal. Furthermore, the petitioners have been charged with the merchandising and promotion of the
The Labor Arbiter ruled that there was no employer-employee relationship and the same products of P&G, an activity that has already been considered by the Court as doubtlessly directly related to
was affirmed by the NLRC and the CA. the manufacturing business, which is the principal business of P&G. Considering that SAPS has no substantial
capital or investment and the workers it recruited are performing activities which are directly related to the
Issues: (1) Whether or not P&G was the employer of the petitioners, and (2) Whether or not they principal business of P&G, the former is engaged in labor-only contracting.
were illegally dismissed.
Where labor-only contracting exists, the Labor Code itself establishes an employer-employee
Held: relationship between the employer and the employees of the labor-only contractor.The statute establishes
(1) Yes, P&G was the employer of the petitioners who were recruited and supplied by SAP this relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is
only. Those petitioners dismissed by Promm-Gem are not. considered merely an agent of the principal employer and the latter is responsible to the employees of the
labor-only contractor as if such employees had been directly employed by the principal employer.
Article 106 of the Labor Code, and Secs. 3 and 5 of Rule VIII-A, Book III of the Omnibus
Rules Implementing the Labor Code clearly allows contracting arrangements for the performance
of specific jobs, works or services. It is management prerogative to farm out any of its activities,
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 Consequently, the petitioners who worked and dismissed by Promm-Gem are considered aspect of due process as the acts complained of neither constitute serious misconduct nor breach of
employees of Promm-Gem and not P&G, and the petitioners recruited and supplied by SAP are trust.Hence, the dismissal is illegal.
considered as the employees of P&G.
With regard to the petitioners placed with P&G by SAPS, they were given no written notice of
dismissal. The records show that upon receipt by SAPS of P&Gs letter terminating their Merchandising
Services Contact effective March 11, 1993, they in turn verbally informed the concerned petitioners not to
(2)Dismissals by both P&G and Prom-Gemm are illegal. In the instant case, the termination letters report for work anymore.
given by Promm-Gem to its employees uniformly specified the cause of dismissal as grave misconduct and
breach of trust. Parenthetically, unlike Promm-Gem which dismissed its employees for grave misconduct and breach
of trust due to disloyalty, SAPS dismissed its employees upon the initiation of P&G. It is evident that SAPS
Misconduct has been defined as improper or wrong conduct; the transgression of some established does not carry on its own business because the termination of its contract with P&G automatically meant for
and definite rule of action, a forbidden act, a dereliction of duty, unlawful in character implying wrongful it also the termination of its employees services. It is obvious from its act that SAPS had no other clients and
intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated had no intention of seeking other clients in order to further its merchandising business. From all indications
character and not merely trivial and unimportant. To be a just cause for dismissal, such misconduct (a) must SAPS, existed to cater solely to the need of P&G for the supply of employees in the latters merchandising
be serious; (b) must relate to the performance of the employees duties; and (c) must show that the concerns only.
employee has become unfit to continue working for the employer.
In termination cases, the burden of proof rests upon the employer to show that the dismissal is for
In other words, in order to constitute serious misconduct which will warrant the dismissal of an just and valid cause. In the instant case, P&G failed to discharge the burden of proving the legality and
employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct validity of the dismissals of those petitioners who are considered its employees. Hence, the dismissals
complained of has violated some established rules or policies. It is equally important and required that the necessarily were not justified and are therefore illegal.
act or conduct must have been performed with wrongful intent. In the instant case, petitioners-employees of
Promm-Gem may have committed an error of judgment in claiming to be employees of P&G, but it cannot 154. Garden of Memories Park & Life Plan v. NLRC; GR No. 160278; February 8, 2012
be said that they were motivated by any wrongful intent in doing so. As such, we find them guilty of only
simple misconduct for assailing the integrity of Promm-Gem as a legitimate and independent promotion Topic: Job Contracting and Labor-Only Contracting
firm. A misconduct which is not serious or grave, as that existing in the instant case, cannot be a valid basis
for dismissing an employee. Facts: Respondent Cruz worked at the Garden of Memories as a utility worker from August 1991
until her termination in February 1998. Cruz filed a complaint for illegal dismissal and money
Meanwhile, loss of trust and confidence, as a ground for dismissal, must be based on the willful claims against Petitioner before DOLE. Requiño was also impleaded as respondent on the ground
breach of the trust reposed in the employee by his employer. Ordinary breach will not suffice. A breach of that she was the service contractor and employer of Cruz.
trust is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Garden of Memories denied liability for the claims of Cruz and asserted that she was not its
employee but that of Requiño, its independent service contractor, who maintained the park for a
Loss of trust and confidence, as a cause for termination of employment, is premised on the fact that contract price.Garden of Memories claimedthat Requiño was a service contractor who carried an
the employee concerned holds a position of responsibility or of trust and confidence. As such, he must be independent business andundertook the contract of work on her own account, under her own
invested with confidence on delicate matters, such as custody, handling or care and protection of the responsibility andaccording to her own manner and method, except as to the results thereof.
property and assets of the employer. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and must show that the employee is unfit to continue to work for the The LA ruled thatRequiño was not an independent contractor but a labor-only contractor and that
employer.In the instant case, the petitioners-employees of Promm-Gem have not been shown to be her defense that Cruz abandoned herwork was negated by the filing of the present case. The LA
occupying positions of responsibility or of trust and confidence. Neither is there any evidence to show that declared both Garden of Memories and Requiño, jointly and severally, liable for the monetary
they are unfit to continue to work as merchandisers for Promm-Gem. There is no valid cause for the claims ofCruz. NRLC affirmed the ruling of the LA. CA also affirmed the NLRC decision.
dismissal of petitioners-employees of Promm-Gem.
Issue:Whether Requiño is a job contractor or labor-only contractor?
While Promm-Gem had complied with the procedural aspect of due process in terminating the
employment of petitioners-employees, i.e., giving two notices and in between such notices, an opportunity Held: Petitioner Requiño was not a legitimate job contractor. The LA, the NLRC, and the CA are
for the employees to answer and rebut the charges against them, it failed to comply with the substantive one in declaring thatpetitioner Requiño was not a legitimate contractor. Echoing the decision of the

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LAand the NLRC, the CA reasoned out that Requiño was not a licensed contractor andhad no
substantial capital or investment in the form of tool, equipment and workpremises, among others. Held:
Yes. Where an entity is declared to be a labor-only contractor, the employees supplied by said
There is labor-only contracting where: (a) the personsupplying workers to an employer does not contractor to the principal employer become regular employees of the latter. Having gained
have substantial capital or investment inthe form of tools, equipment, machineries, work premises, regular status, the employees are entitled to security of tenure and can only be dismissed for just
among others; and (b) theworkers recruited and placed by such person are performing activities or authorized cause and without observing procedural due process is illegal. Considering that Porta
which aredirectly related to the principal business of the employer. Coeli is an entity separate and distinct from Norkis Trading, the respondents‘ employment with
Norkis Trading was necessarily severed by the change in work assignment.
Both the capitalization requirement and the power of control on thepart of Requiño are wanting.

Moreover, Garden of Memories failed to adduceevidence purporting to show that Requiño had 156. RAMY GALLEGO vs.BAYER PHILIPPINES, INC., DANPIN GUILLERMO, PRODUCT
sufficient capitalization. Neither did itshow that she invested in the form of tools, equipment, IMAGE MARKETING, INC., and EDGARDO BERGONIA G.R. No. 179807 July 31, 2009
machineries, work premisesand other materials which are necessary in the completion of the
service contract. FACTS: Ramy Gallego (petitioner) was contracted in April 1992 by Bayer Philippines, Inc.
(BAYER) as crop protection technician to promote and market BAYER products. Under the
Under these circumstances, there is no doubt that Requiño is engaged inlabor-only contracting, supervision of Aristeo Filipino, BAYER sales representative for Panay Island, petitioner made farm
and is considered merely an agent of Garden of Memories. Assuch, the workers she supplies visits to different municipalities in Panay Island to convince farmers to buy BAYER products.
should be considered as employees of Garden ofMemories. Consequently, the latter, as principal
employer, is responsible to theemployees of the labor-only contractor as if such employees have In 1996, petitioner‘s employment with BAYER came to a halt, prompting him to seek employment
been directlyemployed by it. with another company. BAYER eventually reemployed petitioner, however, in 1997 through
Product Image and Marketing Services, Inc. (PRODUCT IMAGE) of which respondent Edgardo
Bergonia (Bergonia) was the President and General Manager, performing the same task as that of
155. Norkis Trading Corp. vs Buenavista et al.; GR No. 182018; October 10, 2012 crop protection technician – promoting BAYER products to farmers and dealers in Panay Island –
solely for the benefit of BAYER.
Topic: Job Contracting and Labor-Only Contracting
Facts: By petitioner‘s claim, in October, 2001, he was directed by Pet Pascual, the newly assigned BAYER
The respondents were hired and worked by/for Norkis Trading as skilled workers assigned in the sales representative, to submit a resignation letter, but he refused; and that in January, 2002, he
operation of industrial and welding machines owned and used by Norkis Trading for its business, was summoned by his immediate supervisors including respondent Danpin Guillermo (Guillermo),
they were not treated as regular employees by Norkis Trading. Instead, they were regarded by BAYER District Sales Manager for Panay, and was ordered to quit his employment which called for
Norkis Trading as members of PASAKA, a cooperative, and which was deemed an independent him to return all pieces of service equipment issued to him, but that again he refused.
contractor that merely deployed the respondents to render services for Norkis Trading. The Still by petitioner‘s claim, he continued performing his duties and receiving compensation until the
respondents, believing that they were regular employees of Norkis Trading, filed on June 9, 1999 end of January, 2002; that on April 7, 2002, he received a memorandum that his area of
with the DOLE a complaint against Norkis Trading and PASAKA for labor-only contracting and non- responsibility would be transferred to Luzon, of which memorandum he sought reconsideration but
payment of minimum wage and overtime pay. The filing of the complaint for labor-only contracting to no avail; and that Guillermo and Bergonia spread rumors that reached the dealers in Antique to
allegedly led to the suspension of the respondents‘ membership with PASAKA. On October the effect that he was not anymore connected with BAYER and any transaction with him would no
13,1999, the respondents were to report back to work but they were informed by PASAKA that longer be honored as of April 30, 2002.
they would be transferred to Norkis‘ Tradings‘ sister company, Porta Coeli Industrial Corporation
(Porta Coeli). Respondents BAYER and Guillermo denied the existence of an employer-employee relationship
between BAYER and petitioner, explaining that petitioner‘s work at BAYER was simply occasioned
The respondents opposed the transfer as it would allegedly result in a change of employers, from by the Contract of Promotional Services that BAYER had executed with PRODUCT IMAGE whereby
Norkis Trading to Porta Coeli. The respondents also believed that the transfer would result in a PRODUCT IMAGE was to promote and market BAYER products on its (PRODUCT IMAGE) own
demotion since from being skilled workers in Norkis Trading, they would be reduced to being utility account and in its own manner and method. They added that as an independent contractor,
workers. These circumstances made the respondents amend their complaint for illegal suspension, PRODUCT IMAGE retained the exclusive power of control over petitioner as it assigned full-time
to include the charges of unfair labor practice, illegal dismissal, damages and attorney‘s fees. supervisors to exercise control and supervision over its employees assigned at BAYER.

Issue:
Whether the respondents were illegally dismissed by Norkis Trading.
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Respondents PRODUCT IMAGE and Bergonia, on the other hand, admitted that petitioner was
hired as an employee of PRODUCT IMAGE on April 7, 1997 on a contractual basis to promote and Respecting the issue of illegal dismissal, the Court appreciates no evidence that petitioner was
market BAYER products pursuant to the Contract of Promotional Services forged between it and dismissed.
BAYER. They alleged that petitioner was a field worker who had no fixed hours and worked under While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is
minimal supervision, his performance being gauged only by his accomplishment reports duly for a valid or authorized cause, the employee must first establish by substantial evidence the fact
certified to by BAYER acting as his de facto supervisor;that petitioner was originally assigned to of dismissal.
Iloilo but later transferred to Antique; that petitioner was not dismissed, but went on official leave
from January 23 to 31, 2002, and stopped reporting for work thereafter. 157. Coca-cola Bottlers vs. Agito; GR No. 179546; 13 February 2009

FACTS:This is a petition for review on certiorari filed by the petitioner GMA Network Inc assailing
ISSUE:whether PRODUCT IMAGE is a labor-only contactor and BAYER should be deemed the decision of the CA. The Court of Appeals, in its assailed Decision, declared that respondents
petitioner‘s principal employer; and whether petitioner was illegally dismissed from his Alan M. Agito S. Oca III, Ernesto G. Alariao, Jr., Alfonso Paa, Jr., Dempster P. Ong, Urriquia T.
employment. Arvin, Gil H. Francisco, and Edwin M. Golez were regular employees of petitioner Coca-Cola
Bottlers Phils., Inc; and that Interserve Management & Manpower Resources, Inc. (Interserve) was
HELD: No. (on both issues) a labor-only contractor, whose presence. Respondents filed before the NLRC two complaints
against petitioner, Interserve, Peerless Integrated Services, Inc., Better Builders, Inc., and
Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees Excellent Partners, Inc. for reinstatement with backwages, regularization, nonpayment of 13th
to farm out with a contractor or subcontractor the performance of a specific job, work, or service month pay, and damages. Respondents alleged in their position paper that they were salesmen
within a definite or predetermined period, regardless of whether such job, work or, service is to be assigned at the Lagro Sales Office of petitioner. They had been in the employ of petitioner for
performed or completed within or outside the premises of the principal. Under this arrangement, years, but were not regularized. Their employment was terminated without just cause and due
the following conditions must be met: (a) the contractor carries on a distinct and independent process.
business and undertakes the contract work on his account under his own responsibility according Petitioner Coca Cola Bottlers filed its Position Paper where it averred that respondents were
to his own manner and method, free from the control and direction of his employer or principal in
all matters connected with the performance of his work except as to the results thereof; (b) the employees of Interserve who were tasked to perform contracted services in accordance with the
contractor has substantial capital or investment; and (c) the agreement between the principal and provisions of the Contract executed between petitioner and Interserve. Said Contract between
contractor or subcontractor assures the contractual employees‘ entitlement to all labor and petitioner and Interserve, constituted legitimate job contracting, given that the latter was a bona
occupational safety and health standards, free exercise of the right to self-organization, security of fide independent contractor with substantial capital or investment in the form of tools, equipment,
tenure, and social welfare benefits. and machinery necessary in the conduct of its business. petitioner asserted that respondents were
employees of Interserve, since it was the latter which hired them, paid their wages, and
In distinguishing between permissible job contracting and prohibited labor-only contracting,the supervised their work, as proven by: (1) respondents‘ Personal Data Files in the records of; (2)
totality of the facts and the surrounding circumstances of the case are to be considered,each case respondents‘ Contract of Temporary Employment with Interserve;and (3) the
to be determined by its own facts, and all the features of the relationship assessed.
payroll records of Interserve. Labor Arbiter found that respondents were employees of Interserve
The DOLE certificate having been issued by a public officer, it carries with it the presumption that and not of petitioner. NLRC affirmed labor Arbiter‘s decision and pronounced that no employer-
it was issued in the regular performance of official duty.Petitioner‘s bare assertions fail to rebut employee relationship existed between petitioner and respondents. respondents. It reiterated the
this presumption. Further, since the DOLE is the agency primarily responsible for regulating the findings of the Labor Arbiter that Interserve was an independent contractor as evidenced by its
business of independent job contractors, the Court can presume, in the absence of evidence to the substantial assets and registration with the DOLE.
contrary, that it had thoroughly evaluated the requirements submitted by PRODUCT IMAGE before
CA ruled that Interserve was a labor-only contractor, with insufficient capital and investments for
issuing the Certificate of Registration.
the services which it was contracted to perform.
If at all, the only control measure retained by BAYER over petitioner was to act as his de facto Issue: WON the Interserve is a legitimate job contractor
supervisor in certifying to the veracity of the accomplishment reports he submitted to PRODUCT
IMAGE. This is by no means the kind of control that establishes an employer-employee relationship HELD:No. Interserve was engaged in prohibited labor-only contracting. Hence, Coca Cola
as it pertains only to the results and not the manner and method of doing the work. It would be a Bottlers shall be deemed the true employer of respondents.
rare contract of service that gives untrammelled freedom to the party hired and eschews any
A legitimate job contract, wherein an employer enters into a contract with a job contractor for the
intervention whatsoever in his performance of the engagement.
performance of the former‘s work, is permitted by law. Thus, the employer-employee relationship
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between the job contractor and his employees is maintained. In legitimate job contracting, the law type of work which the contractor is obligated to perform for the principal. However, this is
creates an employer-employee relationship between the employer and the contractor‘s employees rendered impossible in this case since the Contract between petitioner and Interserve does not
only for a limited purpose, i.e., to ensure that the employees are paid their wages. The employer even specify the work or the project that needs to be performed or completed by the latter‘s
becomes jointly and severally liable with the job contractor only for the payment of the employees‘ employees, and uses the dubious phrase "tasks and activities that are considered contractible
wages whenever the contractor fails to pay the same. Other than that, the employer is not under existing laws and regulations." Even in its pleadings, petitioner carefully sidesteps identifying
responsible for any claim made by the contractor‘s employees. or describing the exact nature of the services that Interserve was obligated to render to petitioner.
The importance of identifying with particularity the work or task which
On the other hand, labor-only contracting is an arrangement wherein the contractor merely acts as
an agent in recruiting and supplying the principal employer with workers for the purpose of Interserve was supposed to accomplish for petitioner becomes even more evident, considering
circumventing labor law provisions setting down the rights of employees. It is not condoned by that the Articles of Incorporation of Interserve states that its primary purpose is to operate,
law. A finding by the appropriate authorities that a contractor is a "labor-only" contractor conduct, and maintain the business of janitorial and allied services. But respondents were hired as
establishes an employer-employee relationship between the principal employer and the salesmen and leadman for petitioner. The Court cannot, under such ambiguous circumstances,
contractor‘s employees and the former becomes solidarily liable for all the rightful claims of the make a reasonable determination if Interserve had substantial capital or investment to undertake
employees.Section 5 of the Rules Implementing Articles 106-109 of the Labor Code, as amended, the job it was contracting with petitioner. It is thus evident that Interserve falls under the
provides the guidelines in determining whether labor-only contracting exists: definition labor-only" contractor, under Article 106 of the Labor

Section 5.Prohibition against labor-only contracting. Labor-only contracting is hereby declared Code. Interserve did not have substantial capital or investment in the form of tools, equipment,
prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the machineries, and work premises; and respondents, its supposed employees, performed work
contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work or which was directly related to the principal business of petitioner. It is also apparent that Interserve
service for a principal, and any of the following elements are [is] present: is a labor-only contractor under Section 5(ii of the Rules Implementing

i) The contractor or subcontractor does not have substantial capital or investment which relates to Articles 106-109 of the Labor Code, as amended, since it did not exercise the right to control the
the job, work, or service to be performed and the employees recruited, supplied or placed by such performance
contractor or subcontractor are performing activities which are directly related to the main
business of the principal; or ii) The contractor does not exercise the right to control the of the work of respondents
performance of the work of the contractual employee. 158.Zialcita et al. vs. PAL OP R04-3-3398 76, Feb. 20, 1997
TOPIC: Article 136 is not intended to apply only to women employed in ordinary
occupations, or it should have categorically expressed so. The sweeping intendment of the law, be
The law clearly establishes an employer-employee relationship between the principal employer and it on special or ordinary occupations, is reflected in the whole text and supported by Article 135
the contractor‘s employee upon a finding that the contractor is engaged in "labor-only" that speaks of non-discrimination on the employment of women
contracting. Article 106 of the Labor Code categorically states: "There is ‗labor-only‘ contracting
where the person supplying workers to an employee does not have substantial capital of FACTS: Complainant Zialcita, an international flight stewardess of PAL, was discharged from the
investment in the form of tools, equipment, machineries, work premises, among others, and the service on account of her marriage. In separating Zialcita, PAL invoked its policy which stated that
workers recruited and placed by such persons are performing activities which are directly related flight attendants must be single, and shall be
to the principal business of such employer." Thus, performing activities directly related to the automatically separated from employment in the event they subsequently get married. They
principal business of the employer is only one of the two indicators that "labor-only" contracting claimed that this policy was in accordance with Article 132 of the Labor Code. On the other hand,
exists; the other is lack of substantial capital or investment. The Court finds that both indicators Zialcita questioned her termination on account of her marriage, invoking Article 136 of the same
exist in the case at bar. law.
The work of respondents, constituting distribution and sale of Coca-Cola products, is clearly
indispensable to the principal business of petitioner. The repeated re-hiring of some of the ISSUE: Whether or not Zialcita was validly terminated on account of her marriage.
respondents supports this finding. The Court clarifies that although Interserve has an authorized
capital stock amounting toP2,000,000.00,only P625,000.00 thereof was paid up as of 31 December RULING: NO. When Presidential Decree No. 148, otherwise known as the Women and Child Labor
2001. The Court does not set an absolute figure forwhat it considers substantial capital for an Law, was promulgated in 13 March 1973, PAL‘s policy had met its doom. However, since no one
independent job contractor, but it measures the same against the challenged its validity, the said policy was able to obtain a momentary reprieve. Section
8 of PD148 is exactly the same
provision reproduced verbatim in Article 136 of the Labor Code, which was promulgated on 1 May
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1974 and took effect six months later. Although Article 132 enjoins the Secretary of Labor to Verily, private respondent‘s act of concealing the true nature of her status from PT&T could not be
establish standards that will ensure the safety and health of women employees and in appropriate properly characterized as willful or in bad faith as she was moved to act the way she did mainly
cases shall by regulation require employers to determine appropriate minimum standards for because she wanted to retain a permanent job in a stable company. In other words, she was
termination in special occupations, such as those of flight attendants, it is logical to presume that, practically forced by that very same illegal company policy into misrepresenting her civil status for
in the absence of said standards or regulations which are yet to be established, the policy of PAL fear of being disqualified from work. While loss of confidence is a just cause for termination of
against marriage is patently illegal. employment, it should not be simulated. It must rest on an actual breach of duty committed by
the employee and not on the employer‘s caprices. Furthermore, it should never be used as a
159. PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY (PTT) v NLRC subterfuge for causes which are improper, illegal, or unjustified. XXX

Private respondent, it must be observed, had gained regular status at the time of her dismissal.
WORKING CONDITION FOR SPECIAL GROUP OF EMPLOYEES
When she was served her walking papers on January 29, 1992, she was about to complete the
probationary period of 150 days as she was contracted as a probationary employee on September
PTT Company Policy  not to accept married women for employment 2, 1991. That her dismissal would be effected just when her probationary period was winding
down clearly raises the plausible conclusion that it was done in order to prevent her from earning
Grace de Guzman, a probationary employee of PTT, represented that she was single although she security of tenure. On the other hand, her earlier stints with the company as reliever were
was already married on her job application. undoubtedly those of a regular employee, even if the same were for fixed periods, as she
performed activities which were essential or necessary in the usual trade and business of PT&T.
The management later found out her real status and as such, she was made to explain the The primary standard of determining regular employment is the reasonable connection between
discrepancy on the said application. However, themanagement found her explanation the activity performed by the employee in relation to the business or trade of the employer. XXX
unsatisfactory. As a result, she was subsequently dismissed from work.
Petitioner‘s policy is not only in derogation of the provisions of Article 136 of the Labor Code on
Grace then filed a case for illegal dismissal against PTT with the Regional Arbitration Board of the the right of a woman to be free from any kind of stipulation against marriage in connection with
NLRC. According to the Labor Arbiter, Grace, who is already a regular employee by then, was her employment, but it likewise assaults good morals and public policy, tending as it does to
illegally dismissed by PTT. Further, the Labor Arbiter ruled that Grace was apparently discriminated deprive a woman of the freedom to choose her status, a privilege that by all accounts inheres in
against on account of her having contracted marriage in violation of company rules. the individual as an intangible and inalienable right. Hence, while it is true that the parties to a
contract may establish any agreements, terms, and conditions that they may deem convenient, the
On appeal, the NLRC affirmed the Labor Arbiter. Hence, this petition before the SC. same should not be contrary to law, morals, good customs, public order, or public policy. Carried
to its logical consequences, it may even be said that petitioner‘s policy against legitimate marital
PTT CONTENTION: that the dismissal was not because Grace was married but because of her bonds would encourage illicit or common-law relations and subvert the sacrament of marriage
concealment of the fact that she was married.
160. COCA-COLA vs Agito; 529 scra 445
ISSUE: Whether or not the prohibition against hiring married female employees should
be countenanced > Power of Control- An employer is a labor only contractor where it does not exercise the right to
control the performance of the work of its employees (Sec 5 (ii) of the Rules Implementing Articles
SC: NO! 106-109 of the Labor Code.)

XXX Article 136 of the Labor Code explicitly prohibits discrimination merely by reason of the > The power to recommend penalties or dismiss workers is the strongest indication of a
marriage of a female employee. XXX company‘s right of control as direct employer.

In the case at bar, petitioner‘s policy of not accepting or considering as disqualified from work any > An Independent job contractor who is answerable to the principal only for the results of a
woman worker who contracts marriage runs afoul of the test of, and the right against, certain work, job, or service need not guarantee to said principal the daily attendance of the
discrimination, afforded all women workers by our labor laws and by no less than the Constitution. workers assigned to the latter.
Contrary to petitioner‘s assertion that it dismissed private respondent from employment on FACTS:
account of her dishonesty, the record discloses clearly that her ties with the company were
dissolved principally because of the company‘s policy that married women are not qualified for This is a petition for Review on Certiorari udner Rule 45 of the Rules of Court assailing the
employment in PT&T, and not merely because of her supposed acts of dishonesty. XXX decision of the CA in reversing the resolution rendered by the NLRC.

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 Respondents Agito and seven (7) others filed before the NLRC two complaints against – In the last minute, the 3 other girls decided not to join the group anymore.
petitioner Coca Cola, Interserve (the contractors); Peenless Integrated Services Inc., for – The clerk-typist still decided to join since she thought that the two are her
reinstatement with backwages, regularization, non-payment of the 13th month pay and damages. colleagues and had nothing in mind that would in any manner prompt her to
refuse a simple and cordial invitation.
Respondent‘s alleged they were salesmen assigned at the Lagro Sales Office of petitioner. – The 3 gentlemen were drinking while eating and even offered the lady a few
They had been in the employ of petitioners for years, but were not regularized. Their employment drinks.
was terminated on April 8, 2002 without just cause and due process. – When they were finished, the gentlemen decided to bring her home.
Petitioner averred that the respondents were employers of Interserve who were tasked to – While on their way home, the clerk-typist found out that instead of driving her to
perform contracted services. her home, the gentlemen were taking her to a motel.

The petitioner sought the Labor Arbiter to dismiss the respondent‘s complaint against it on The letter prompted Mr. Leopoldo Prieto, President of Golden Donuts, Inc., to call petitioner to a
the ground that the Labor Arbiter did not acquire jurisdiction over the same in the absence of an meeting on August 4, 1989. Petitioner was then required to explain the letter against him. It
employer. Employee relationship between petitioner and the respondents. appears that petitioner agreed to tender his resignation. Private respondent moved swiftly to
separate petitioner. Thus, private respondent approved petitioner's application for leave of
The Labor Arbiter dismissed he complaint on the ground that Interserve was registered
absence with pay from August 5-28, 1989. It also issued an inter-office memorandum, dated
with DOLE as an independent job contractor.
August 4, 1989, advising "all concerned" that petitioner was no longer connected with the
On appeal to the Commission, the latter affirmed the Labor Arbiter‘s decision and company effective August 5, 1989. 1 Two (2) days later, or on August 7, 1989, Mr. Prieto sent a
pronounced that no-employer-employee relationship existed between petitioners and respondents. letter to petitioner confirming their agreement that petitioner would be officially separated from
the private respondent. In the interim, petitioner had a change of mind. In a letter dated August
CA reversed the Commission‘s resolution and declared that Interserve was only a labor 16, 1989, petitioner sought reconsideration of the management's decision to terminate him.
only contractor with insufficient capital and investments for the services which it was contracted to
perform and would be hardpressed to meet the daily demands of daily softdrinks deliveries of For his failure to tender his resignation, petitioner was dismissed by private respondent on August
petitioner in the Lagro Area. 23, 1989. Feeling aggrieved, petitioner filed an illegal dismissal case against private respondent.
ISSUE: Whether or not the findings of CA in declaring that Interserve was labor only contracting
contrary to the findings of the Commission and as such petitioner is liable as the direct employer In a decision dated January 23, 1991, Labor Arbiter Salimar V. Nambi held that due process was
of the respondents? not observed in the dismissal of petitioner and there was no valid cause for dismissal.

HELD: Yes, the CA was correct because Interserve does not have the substantial capital relative Private respondent appealed to the National Labor Relations Commission. On July 16, 1992, public
to the nature of services contracted and control exercised by the petitioner over the means and respondent reversed the decision of the labor arbiter.
method.

161. Villarama vs. National Labor Relations Commission, 236 SCRA 280, Issue: Whether or not there was valid cause to terminate petitioner.
G.R. No. 106341 September 2, 1994
Held: YES. Petition DENIED.
Topic: Working Conditions for Special Group of Employees
Petitioner claims that his alleged immoral act was unsubstantiated, hence, he could not be
Sexual harassment abounds in all sick societies. It is reprehensible enough but more so when dismissed. We hold otherwise. The records show that petitioner was confronted with the charge
inflicted by those with moral ascendancy over their victims. We rule that it is a valid cause for against him. Initially, he voluntarily agreed to be separated from the company. He took a leave of
separation from service. absence preparatory to this separation. This agreement was confirmed by the letter to him by Mr.
Prieto dated August 7, 1989. A few days after, petitioner reneged on the agreement. He refused to
Facts: Petitioner Villarama, a materials manager, was charged with sexual harassment by Divina be terminated on the ground that the seriousness of his offense would not warrant his separation
Gonzaga, a clerk-typist on probation assigned in his department. The humiliating experience from service. So he alleged in his letter to Mr. Prieto dated August 16, 1989. But even in this
compelled her to resign from work. Her letter-resignation stated that: letter, petitioner admitted his "error" vis-a-vis Miss Gonzaga. As a manager, petitioner should know
the evidentiary value of his admissions. Needless to stress, he cannot complain there was no valid
– Mr. Villarama and Mr. de Jesus invited all the GIRLS of the Materials Department cause for his separation.
for a dinner.
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 Moreover, loss of trust and confidence is a good ground for dismissing a managerial HELD:YES. On not strictly applying RA 7877- Republic Act No. 7877 was not yet in effect at the
employee. It can be proved by substantial evidence which is present in the case at bench. time of the occurrence of the act complained of. It was still being deliberated upon
in Congress when petitioner‘s case was decided by the Labor Arbiter. As a rule, laws shall have no
As a managerial employee, petitioner is bound by a more exacting work ethics. He failed retroactive effect unless otherwise provided, or except in a criminal case when their application will
to live up to this higher standard of responsibility when he succumbed to his moral perversity. And favor the accused. Hence, the Labor Arbiter have to rely on the MEC report and the common
when such moral perversity is perpetrated against his subordinate, he provides justifiable ground connotation of sexual harassment as it is generally understood by the public. Faced with the same
for his dismissal for lack of trust and confidence. It is the right, nay, the duty of every employer to predicament, the NLRC had to agree with the Labor Arbiter. In so doing, the NLRC did
protect its employees from over sexed superiors. not commit any abuse of discretion in affirming the decision of the Labor Arbiter.

On the Villarama afterthought-it was both fitting and appropriate since it singularly
162 LIBRES VS. NLRC; G.R. No. 123737; May 28, 1999 addressed the issue of a managerial employee committing sexual harassment on a subordinate.
The disparity in the periods of filing the complaints in the two (2) cases did not in any way reduce
FACTS:Petitioner Carlos G. Libres, an electrical engineer, was holding a managerial position with this case into insignificance. On the contrary, it even invited the attention of the Court to focus on
National Steel Corporation (NSC) as Assistant Manager. He was then asked to comment regarding sexual harassment as a just and valid cause for termination. Whereas petitioner Libres was only
the charge of sexual harrassment filed against him by the VP's secretary Capiral. This was included meted a 30-day suspension by the NLRC, Villarama, in the other case was penalized with
with a waiver of his right tobe heard once he didn't comment. termination. As a managerial employee, petitioner is bound by more exacting work ethics. He
failed to live up to his higher standard of responsibility when he succumbed to his moral
On 14 August 1993 petitioner submitted his written explanation denying the accusation perversity. And when such moral perversity is perpetrated against his subordinate, he provides a
against him and offering to submit himself for clarificatory interrogation. The Management justifiable ground for his dismissal for lack of trust and confidence.
Evaluation Committee said that "touching a female subordinate's hand and shoulder, caressing her
nape and telling other people that Capiral was the one who hugged and kissed or that she ―It is the the duty of every employer to protect his employees from oversexed
responded to the sexual advances are unauthorized acts that damaged her honor." They superiors.‖ Public respondent therefore is correct in its observation that the Labor Arbiter was in
suspended Libres for 30 days without pay. fact lenient in his application of the law and jurisprudence for which petitioner must be grateful
for.
He filed charges against the corporation in the Labor Arbiter, but the latter held that the
company acted with due process and that his punishment was only mild. As pointed out by the Solicitor General, it could be expected since Libres was Capiral‘s
Moreover, he assailed the NLRC decision as without basis due to the massaging of her shoulders immediate superior. Fear of retaliation and backlash, not to forget the social humiliation and
never ―discriminated against her continued employment,‖ ―impaired her rights and privileges under embarrassment that victims of this human frailty usually suffer, are all realities that Capiral had to
the Labor Code,‖ or ―created a hostile, intimidating or offensive environment.‖ contend with. Moreover, the delay did not detract from the truth derived from the facts.
Petitioner Libres never questioned the veracity of Capiral‘s allegations. In fact his narration even
He claimed that he wasn't guaranteed due process because he wasn't given the right be corroborated the latter‘s assertion in several material points. He only raised issue on the
heard. This was due to his demand for personal confrontation not being recognized by the MEC. complaint‘s protracted filing.

In the Supreme Court, petitioner assailed the failure of the NLRC to strictly apply RA No. On the question of due process- Requirements were sufficiently complied with. Due
7877 or the law against sexual harassment to the instant case. Moreover, petitioner also contends process as a constitutional precept does not always and in all situations require a trial type
that public respondent‘s reliance on Villarama v. NLRC and Golden Donuts was misplaced. He proceeding. Due process is satisfied when a person is notified of the charge against him and given
draws attention to victim Divina Gonzaga‘s immediate filing of her letter of resignation in an opportunity to explain or defend himself. The essence of due process is simply to be heard, or
the Villarama case as opposed to the one year delay of Capiral in filing her complaint against him. as applied to administrative proceedings, an opportunity to explain one‘s side, or an opportunity to
He now surmises that the filing of the case against him was merely an afterthought and seek a reconsideration of the action or ruling complained of.
not borne out of a valid complaint, hence, the Villarama case should have no bearing on the
instant case. It is undeniable that petitioner was given a Notice of Investigation informing him of the
charge of sexual harassment as well as advising him to submit a written explanation regarding the
ISSUE:Whether or not Libres was accorded due process when MEC denied his request for matter; that he submitted his written explanation to his superior. The VP further allowed him to air
personal confrontation his grievance in a private session He was given more than adequate opportunity to explain his side
and air his grievances.

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Personal confrontation was not necessary. It is held in Homeowners v NLRC that litigants may be In this case, it is the President of the Philippines, as the proper disciplining authority, who would
heard through pleadings, written explanations, position papers, memoranda or oral arguments. determine whether there is a valid cause for the removal of Rayala as NLRC Chairman. This power,
however, is qualified by the phrase "for cause as provided by law." Thus, when the President
163. Domingo vs. Rayala G.R. No. 155831, 18 February 2008 found that Rayala was indeed guilty of disgraceful and immoral conduct, the Chief Executive did
Topic: Special Group of Employees not have unfettered discretion to impose a penalty other than the penalty provided by law for such
offense. As cited above, the imposable penalty for the first offense of either the administrative
Facts: Ma. Lourdes T. Domingo (Domingo), then Stenographic Reporter III at the NLRC, filed a offense of sexual harassment or for disgraceful and immoral conduct is suspension of six (6)
Complaint for sexual harassment against NLRC Chairman Rayala before Secretary Bienvenido months and one (1) day to one (1) year. Accordingly, it was error for the Office of the President to
Laguesma of the Department of Labor and Employment (DOLE). impose upon Rayala the penalty of dismissal from the service, a penalty which can only be
imposed upon commission of a second offense.
Upon receipt of the Complaint, the DOLE Secretary referred the Complaint to the OP, Rayala being
a presidential appointee. The OP, through then Executive Secretary Ronaldo Zamora, ordered Even if the OP properly considered the fact that Rayala took advantage of his high government
Secretary Laguesma to investigate the allegations in the Complaint and create a committee for position, it still could not validly dismiss him from the service. Under the Revised Uniform Rules on
such purpose. Administrative Cases in the Civil Service,56 taking undue advantage of a subordinate may be
considered as an aggravating circumstance57 and where only aggravating and no mitigating
The Committee heard the parties and received their respective evidence. On March 2, 2000, the circumstances are present, the maximum penalty shall be imposed.58Hence, the maximum penalty
Committee submitted its report and recommendation to Secretary Laguesma. It found Rayala that can be imposed on Rayala is suspension for one (1) year.
guilty of the offense charged and recommended the imposition of the minimum penalty of
suspension for 6 months and 1 day. The OP concurred with the decision of the Committee, but 164. REMINGTON INDUSTRIAL SALES CORPORATION vs. ERLINDA CASTANEDA
found that as the NLRC Chairman – to whom stricter standards must apply being the highest Topic: EMPLOYMENT OF HOUSEHELPERS/HOMEWORKERS
official of the NLRC – had shown an attitude, a frame of mind, a disgraceful conduct, which
renders him unfit to remain in the service, and ordered his dismissal from service.
FACTS: Erlinda Castaneda instituted a complaint for illegal dismissal, underpayment of wages,
non-payment of overtime services, non-payment of SIL pay and non-payment of 13th month pay
On appeal, the CA affirmed the findings of the OP and the dismissal was proper. The CA pointed against Remington Industrial Sales Corp. before the NLRC-NCR.
out that Rayala was dismissed for disgraceful and immoral conduct in violation of RA 6713,
the Code of Conduct and Ethical Standards for Public Officials and Employees. However, upon
Erlinda alleged that she started working in 1983 as company cook for Remington, a corporation
Rayala‘s Motion for Reconsideration, the CA reversed its earlier decision and imposed the penalty
engaged in the trading business and that she continuously worked with Remington until she was
of suspension for a maximum of 1 year, in lieu of dismissal since AO250 expressly imposed such
unceremoniously prevented from reporting for work when Remington transferred to a new site.
penalty.

Remington denied that it dismissed Erlinda illegally. It posited that Erlinda was a domestic helper,
Issue: Whether or not the Office of the President can validly dismiss Rayala on the ground of
not a regular employee; Erlinda worked as a cook and this job had nothing to do with Remington‘s
commission of sexual harassment.
business of trading in construction or hardware materials, steel plates and wire rope products.

Held: NO. Under AO 250, the penalty for the first offense is suspension for six (6) months and one
In a Decision, the LA dismissed the complaint and ruled that the respondent was a domestic helper
(1) day to one (1) year, while the penalty for the second offense is dismissal. On the other hand,
under the personal service of Antonio Tan (the Managing Director), finding that her work as a cook
Section 22(o), Rule XVI of the Omnibus Rules Implementing Book V of the Administrative Code of
was not usually necessary and desirable in the ordinary course of trade and business of the
1987 and Section 52 A(15) of the Revised Uniform Rules on Administrative Cases in the Civil
petitioner corporation, and that the latter did not exercise control over her functions. On the issue
Service both provide that the first offense of disgraceful and immoral conduct is punishable by
of illegal dismissal, the labor arbiter found that it was the respondent who refused to go with the
suspension of six (6) months and one (1) day to one (1) year. A second offense is punishable by
family of Antonio Tan when the corporation transferred office and, therefore, respondent could not
dismissal.
have been illegally dismissed.

Under the Labor Code, the Chairman of the NLRC shall hold office during good behavior until he
ISSUE: Is Castaneda a regular employee or a domestic servant?
or she reaches the age of sixty-five, unless sooner removed for cause as provided by law or
becomes incapacitated to discharge the duties of the office.
HELD: She is a REGULAR EMPLOYEE

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In Apex Mining Company, Inc. v. NLRC, this Court held that a househelper in the staff houses of right of CONTROL over her functions, which is the PRIMARY indicator of the existence of an
an industrial company was a regular employee of the said firm. employer-employee relationship

165. Voyeur Visage Studio Inc. vs. CA; G.R. No. 144939; March 18, 2005
Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms ―househelper‖ or
―domestic servant‖ are defined as follows: Topic: Probationary Employment

―The term ‗househelper‘ as used herein is synonymous to the term ‗domestic servant‘ and shall Facts: On 15 November 1991, petitioner Voyeur Visage Studio, Inc. hired respondent Anna
refer to any person, whether male or female, who renders services in and about the employer‘s Melissa del Mundo (Melissa, for short) on a 6-month probationary basis. As agreed, Melissa worked
home and which services are usually necessary or desirable for the maintenance and enjoyment as a Production and Planning Coordinator/Receptionist and was assigned at petitioner‘s studio
thereof, and ministers exclusively to the personal comfort and enjoyment of the employer‘s located in Greenhills, San Juan, Metro Manila. On 28 February 1992, while Melissa was at work,
family.‖ Kodak Philippines, Inc. made a delivery of Kodak papers at petitioner‘s studio in Greenhills, which
delivery was received by Melissa. The delivered items were to be later transferred to petitioner‘s
laboratory at Esteban Abada St., Loyola Heights, Quezon City.
The foregoing definition clearly contemplates such househelper or domestic servant who is
employed in the employer‘s home to minister exclusively to the personal comfort and enjoyment of After the transfer, however, petitioner discovered that the delivery was short by two (2) boxes of
the employer‘s family. Such definition covers family drivers, domestic servants, laundry women, Kodak papers worth six thousand pesos (P6,000.00). Petitioner then asked Melissa for an
yayas, gardeners, houseboys and similar househelpers. explanation but the latter could not account for the shortage. She insisted, however, that at the
time of delivery, the delivered items and the delivery receipt therefor tallied, hence, there was no
The criterion is the personal comfort and enjoyment of the family of the employer in the home of shortage.
said employer. While it may be true that the nature of the work of a househelper, domestic
servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the Evidently dissatisfied with Melissa‘s explanation, petitioner made her responsible for the shortage
difference in their circumstances is that in the former instance they are actually serving the family and deducted from her salary the sum of P250.00 per week until such time that she shall have
while in the latter case, whether it is a corporation or a single proprietorship engaged in business fully paid the amount of P6,000.00. Petitioner made it appear in its payroll that the deductions
or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses were for a salary loan, although Melissa had no such loan. Nonetheless, Melissa conformed to such
or within the premises of the business of the employer. In such instance, they are employees of arrangement.
the company or employer in the business concerned entitled to the privileges of a regular On 31 August 1992, or after about nine (9) months since she was hired on a probationary basis,
employee. Melissa received from petitioner a memorandum bearing date 11 August 1992, informing her of
petitioner‘s decision to terminate her employment.
Petitioner contends that it is only when the househelper or domestic servant is assigned to certain
aspects of the business of the employer that such househelper or domestic servant may be The following day, Melissa, through counsel, addressed a letter to petitioner protesting her
considered as such an employee. The Court finds no merit in making any such distinction. The dismissal, therein alleging that the dismissal was illegal because at the time it was effected, she
mere fact that the househelper or domestic servant is working within the premises of the business was then already a regular employee.
of the employer and in relation to or in connection with its business, as in its staffhouses for its
Issue: W/N Melissa was a regular employee after about nine (9) months of probationary
guest or even for its officers and employees, warrants the conclusion that such househelper or
employment
domestic servant is and should be considered as a regular employee of the employer and NOT as
a mere family househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3 Held: YES. In arguing that Melissa is not its regular employee, petitioner quoted from Bernardo
of the Labor Code, as amended. vs. NLRC, wherein this Court allegedly wrote:

In the case at bar, the petitioner itself admits in its position paper that respondent worked at the Only employees who worked for at least one year, even if the performance is not
company premises and her duty was to cook and prepare its employees‘ lunch and merienda. continuos (sic) and merely intermittent is considered regular.
Clearly, the situs, as well as the nature of respondent‘s work as a cook, who caters not only to the We have carefully perused the text of Bernardo and nowhere may be found therein the quoted
needs of Mr. Tan and his family but also to that of the petitioner‘s employees, makes her fall statement ascribed to this Court. Nor can the import of such a statement be even implied from
squarely within the definition of a regular employee under the doctrine enunciated in the Apex what we said in the same case.
Mining case. That she works within company premises, and that she does not cater exclusively to
the personal comfort of Mr. Tan and his family, is reflective of the existence of the petitioner‘s

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We thus take this occasion to sternly warn counsel for the petitioner to be more precise in quoting TOPIC: Kinds of Employment
decisions and other issuances of this Court and to remind him that a repetition thereof will be dealt
with more severely. FACTS: Petitioner Florencio M. de la Cruz, Jr. was hired by private respondent Shemberg as senior
sales manager. Shemberg was engaged in the business of manufacturing, trading, distributing and
In any event, petitioner‘s reliance on Bernardo is even misplaced. For there, we in fact said, partly importing various consumer products. The position of senior sales manager was then newly
quoting from the earlier case of Cuenco vs. NLRC: created in line with Shembergs objective of product positioning in the consumer market. Its duties
Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making included, among others, the supervision and control of the sales force of the company. The senior
permanent casuals of our lowly employees by the simple expedient of extending to them sales manager was also vested with some discretion to decide on matters within the scope of his
probationary appointments, ad infinitum. The contract signed by petitioners is akin to a functions, including the appointment of district sales representatives and the reshuffling of
probationary employment, during which the bank determined the employees‘ fitness for salesmen to achieve sales targets.
the job. When the bank renewed the contract after the lapse of the six-month
probationary period, the employees thereby became regular employees. No employer is However, petitioner was informed of the management‘s decision to terminate his
allowed to determine indefinitely the fitness of its employees. services. Petitioner asked Llanto for the reason but the latter merely informed him that it had
something to do with the drop in the companys sales. Petitioner then requested a meeting but was
Being a regular employee, Melissa enjoys the protection of the Labor Code on security of tenure told that the decision of the management was final. Hence, petitioner filed a complaint for illegal
and termination of employment only upon compliance with the legal requisites for a valid dismissal.
dismissal, which requisites embrace both substantive and procedural aspects, as pointed out
Colegio de San Juan de Letran-Calamba vs. Villas: Respondents answered that petitioner dismissal was premised on the following: xxx (4) the
unauthorized reimbursement of the plane tickets of his wife and child. In short, petitioner was
Under the Labor Code, there are twin requirements to justify a valid dismissal from employment: terminated for his failure to meet the required company standards and for loss of trust and
(a) the dismissal must be for any of the causes provided in Article 282 of the Labor Code confidence.
(substantive aspect) and (b) the employee must be given an opportunity to be heard and to
defend himself (procedural aspect), non-compliance with which renders the dismissal illegal and ISSUE: WON De la Cruz was illegally dismissed.
entitles the employee concerned to "reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits, or their HELD: No. Petitioner was holding a managerial position in which he was tasked to perform key
monetary equivalent computed from the time his compensation was withheld from him up to the functions in accordance with an exacting work ethic. His position required the full trust and
time of his actual reinstatement". confidence of his employer. While petitioner could exercise some discretion, this obviously did not
cover acts for his own personal benefit. As found by the court a quo, he committed a transgression
Here, Melissa‘s dismissal was not based on any of the just or authorized causes enumerated in the
that betrayed the trust and confidence of his employer ― reimbursing his family‘s personal travel
Labor Code. Clearly, [Melissa] was not dismissed for cause. The alleged infractions committed by
expenses out of company funds. His act amounted to fraud or deceit which led to the loss of trust
[Melissa] being relied upon by [petitioner] as grounds for her dismissal, save perhaps for the
and confidence of his employer. Petitioner vigorously contends that he was not a probationary
incomplete delivered items incident which was not even proved to be her fault and which she
employee since Shemberg failed to disclose to him the reasonable standards for qualifying as a
already paid for, were mere afterthoughts, designed to cover-up what is otherwise an illegal
regular employee. There is no dispute that petitioner, as a probationary employee, enjoyed only
termination.
temporary employment status. In general terms, this meant that he was terminable anytime,
Likewise, there was non-observance by the petitioner of the twin notice requirement under Article permanent employment not having been attained in the meantime. The employer could well
282 of the Labor Code. decide he no longer needed the probationary employee‘s services or his performance fell short of
expectations, etc. As long as the termination was made before the expiration of the six-month
In the present case, there merely was a single notice sent to Melissa - the memorandum dated 11 probationary period, the employer was well within his rights to sever the employer-employee
August 1992 informing her that she was thereby terminated from work effective 30 August 1992. relationship. A contrary interpretation would defect the clear meaning of the term probationary. In
There was no notice apprising her of the particular acts or omissions for which her dismissal was this case, respondent Shemberg had good reason to terminate petitioner‘s employment and that
sought. was his dishonesty.
With the reality that Melissa‘s dismissal was effected without complying with both the substantive 167. Cals Poultry Supply Corp. vs Roco
and procedural aspects of a lawful dismissal, we entertain no doubt at all that petitioner‘s
termination of her employment is illegal CALS POULTRY SUPPLY CORPORATION and DANILO YAP, petitioners, vs. ALFREDO ROCO and
CANDELARIA ROCO, respondents.
166. DELA CRUZ, JR. VS. NLRC G.R. 145417 December 11, 2003
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CA reversed NLRC, NLRC affirmed LA. Supreme Court: in favor of CALS (petitioner)

LA- dismissed the case of respondent for illegal dismissal. 1.WON Alfredo was illegally dismissed. NO

CA- ruled in favor or respondents •Alfredo was not able to establish convincingly that he was dismissed. No notice of termination
was given to him by CALS.
Facts:
•private respondent‘s failure to work was due to the misunderstanding between the petitioner‘s
•Petitioner - CALS Poultry Supply Corporation is engaged in the business of selling dressed chicken management and private respondent. As correctly observed by the Labor Arbiter, private
and other related products and managed by Danilo Yap. respondent must have construed the October 28 incident as his dismissal so that he opted not to
•Respondent/s: Alfredo Roco- was hired as driver and Edna Roco(sister) as helper in the dressing work for many days thereafter and instead filed a complaint for illegal dismissal. On the other
room of CALS both hired on March 15, 1984. Candelaria Roco, another sister, was hired on March hand, petitioner interpreted private respondent‘s failure to report for work as an intentional
16, 1984 as helper, also at its chicken dressing plant on a probationary basis. abandonment. However, there was no intent to dismiss private respondent since the petitioner is
willing to reinstate him. Nor was there an intent to abandon on the part of private respondent
•Mach 5, 1996- Alfredo and Candeleria filed a complaint for illegal dismissal against CALS and D. since he immediately filed a complaint for illegal dismissal soon after the October 28 incident. It
Yap. They allege that they were illegally dismissed on Jan 20, 1996 and November 5, 1996. They would be illogical for private respondent to abandon his work and then immediately file an action
both claimed to be underpaid. seeking his reinstatement xxx. Under these circumstances, it is but fair that each party must bear
his own loss, thus placing the parties on equal footing.
•Edna also filed a complaint for illegal dismissal- she allege that that on June 26, 1996, she was
reassigned to the task of washing dirty sacks and for this reason, in addition to her being 2.WON CANDELRIA’s termination of employment is within the probationary period of
transferred from night shift to day time duties, which she considered as management act of her employment. YES
harassment, she did not report for work.
•Her employment was in a probationary basis.
•Alfredo- claimed that he was dismissed for refusing to accept the 30000 php offered to him by
the lawyer of CALS, in exchange for his executing a letter of voluntary resignation. •She was hired on May 16, 1995 and her services were terminated on November 15, 1995 due to
poor work performance. She did not measure up to the work standards on the dressing of
•Candelaria Roco- averred that she was terminated without cause from her job as helper after chicken. The Labor Arbiter sustained CALS in terminating her employment. The NLRC affirmed
serving more than six (6) months as probationary employee. the Labor Arbiter‘s ruling.

•Labor Arbiter in favor of petitioner- •She did not meet the required standards by the National Meat Inspection Commission. (dressing
plants with Double ―AA‖ Rating to which CALS‘ employee were brief and with regard to)
oAlfredo Roco‘s case- Ruling: dismissed the complaint for Illegal dismissal for lack of merit.
Ground: he applied for leave of absence and was granted. He never returned for work. A notice to •We agree with CALS‘ contention as upheld by both the Labor Arbiter and the NLRC that
inquire was sent to him if he still has intention of resuming his work. He did not respond. he was Candelaria‘s services was terminated within and not beyond the 6-month probationary period.
not dismissed; it was he who unilaterally severed his relation with his employer.
•The computation of the 6-month probationary period is reckoned from the date of appointment
oCandelaria‘s case- Ruling: upheld CALS‘ decision not to continue with her probationary up to the same calendar date of the 6th month following.
employment having been found her unsuited for the work for which her services were engaged.
She was hired on May 16, 1995 and her services were terminated on November 15, 1995.

oEdna Roco‘s case- according to the Labor Arbiter, began absenting herself on June 25, 1996. 168. DUSIT HOTEL NIKKO, Petitioner, vs. RENATO M. GATBONTON, Respondent.
She was sent a memo on July 1, 1996 requiring her to report for work immediately, but she did G.R. No. 161654 May 5, 2006
not respond.
FACTS On November 21, 1998, respondent Renato M. Gatbonton was hired as Chief Steward in
NLRC affirmed LA- in favor of CALS petitioner Dusit Hotel Nikko‘s Food and Beverage Department. He signed a three-month
probationary employment contract until February 21, 1999, with a monthly salary of P25,000. At
Court of Appeals: in favor of respondents. Alfredo and Candelaria to be reinstated etc. Except for the start of his employment, the standards by which he would be assessed to qualify for regular
EDNA she abandoned her work employment were explained to him.
CA: Alfredo and Candelaria was illegally dismissed.
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The hotel alleged that at the end of the probation period, Ingo Rauber, Director of its Food and In the absence of any evaluation or valid extension, we cannot conclude that respondent failed to
Beverage Department, observed that Gatbonton failed to meet the qualification standards for Chief meet the standards of performance set by the hotel for a chief steward. At the expiration of the
Steward, and Rauber recommended a two-month extension of Gatbonton‘s probationary period, or three-month period, Gatbonton had become a regular employee. It is an elementary rule in the
until April 22, 1999. At the end of the 4th month, on March 24, 1999, Rauber informed Gatbonton law on labor relations that a probationary employee engaged to work beyond the probationary
that the latter had poor ratings on staff supervision, productivity, quantity of work, and overall period of six months, as provided under Article 281 of the Labor Code, or for any length of time
efficiency and did not qualify as Chief Steward. Gatbonton requested another month or until April set forth by the employer (in this case, three months), shall be considered a regular employee.
22, 1999 to improve his performance, to which Rauber agreed but allegedly refused to sign the This is clear in the last sentence of Article 281. Any circumvention of this provision would put to
Performance Evaluation Form. Neither did he sign the Memorandum on the extension. naught the State‘s avowed protection for labor.

On March 31, 1999, a notice of termination of probationary employment effective April 9, 1999, on Since respondent was not dismissed for a just or authorized cause, his dismissal was illegal, and
the above alleged grounds was served on Gatbonton. On April 12, 1999, he filed a complaint for he is entitled to reinstatement without loss of seniority rights, and other privileges as well as to full
illegal dismissal and non-payment of wages, with prayers for reinstatement, full backwages, and backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed
damages, including attorney‘s fees. from the time his compensation was withheld from him up to the time of his actual reinstatement.

ISSUE Whether or not respondent was a regular employee at the time of his dismissal. 169. SAN MIGUEL CORPORATION (SMC) v. CAROLINE C. DEL ROSARIO; G.R. Nos. 168194 &
168603; December 13, 2005
HELD The SC held that as Article 281 clearly states, a probationary employee can be legally Topic: Probationary Employment
terminated either: (1) for a just cause; or (2) when the employee fails to qualify as a regular
employee in accordance with the reasonable standards made known to him by the employer at the Facts:Respondent was employed by SMC as key account specialist. On March 9, 2001, SMC
start of the employment. Nonetheless, the power of the employer to terminate an employee on informed Respondent that her probationary employment will be severed at the close of the
probation is not without limitations. First, this power must be exercised in accordance with the business hours of March 12, 2001 and was refused entry to petitioner‘s premises a day after. On
specific requirements of the contract. Second, the dissatisfaction on the part of the employer must June 24, 2002, Respondent filed a complaint against SMC for illegal dismissal and
be real and in good faith, not feigned so as to circumvent the contract or the law; and third, there underpayment/non-payment of monetary benefits. Respondent alleged that SMC feigned an
must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving excess in manpower because after her dismissal, it hired new recruits and re-employed two of her
just or valid cause for dismissing an employee rests on the employer. batch mates. On the other hand, SMC claimed that Respondent was a probationary employee
whose services were terminated as a result of the excess manpower that could no longer be
Here, the petitioner did not present proof that the respondent was evaluated from November 21, accommodated by the company. Respondent was allegedly employed on April 17, 20009 as a
1998 to February 21, 1999, nor that his probationary employment was validly extended. The temporary reliever of a certain Patrick Senen, an account specialist, who met an accident.
petitioner alleged that at the end of the respondent‘s three-month probationary employment,
Rauber recommended that the period be extended for two months since respondent Gatbonton On June 16, 2003, the LA rendered a Decision declaring Respondent a regular employee and
was not yet ready for regular employment. The petitioner presented a Personnel Action Form holding that she was illegally dismissed as there was no authorized cause to terminate her
containing the recommendation. We observed, however, that this document was prepared on employment. The NLRC later modified the LA‘s Decision holding that Respondent is a regular
March 31, 1999, the end of the 4th month of the respondent‘s employment. In fact, the employee whose termination from employment was valid but ineffectual for petitioner‘s failure to
recommended action was termination of probationary employment effective April 9, 1999, and not comply with the 30-day notice to the employee and the DOLE. The CA affirmed the NLRC‘s
extension of probation period. Upon appeal to the NLRC, the petitioner presented another Decision.
Personnel Action Form prepared on March 2, 1999, showing that the respondent‘s probationary
employment was extended for two months effective February 23, 1999. Issues:

1. Whether or not Respondent is a regular employee of SMC;

The Personnel Action Form dated March 2, 1999, contained the following remarks: ―subject to 2. Whether or not Respondent was illegally dismissed; and
undergo extension of probation for two (2) months as per attached memo.‖ Yet, we find this 3. If so, whether or not respondent is entitled to any monetary benefit
document inconclusive. First, the action form did not contain the results of the respondent‘s
evaluation. Without the evaluation, the action form had no basis. Second, the action form spoke Held:
of an attached memo which the petitioner identified as Rauber‘s Memorandum, recommending the
extension of the respondent‘s probation period for two months. Again, the supposed 1. Yes.
Memorandum was not presented. Third, the action form did not bear the respondent‘s signature. In termination cases, the best proof that SMC should have presented to prove the
probationary status of Respondent is her employment contract. None, having been
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 presented, the continuous employment of respondent as an account specialist for almost employee if he has completed 17 months of service and a performance rating of at least 3.0. The
eleven (11) months means that she was not just a temporary reliever. And while it is true respondent filed a motion for reconsideration but the NLRC denied the same. On appeal, the CA
that by way of exception, the period of probationary employment may exceed six (6) reversed the decision of the NLRC. Hence, this petition.
months when the parties so agree, such as when the same is established by company
policy, or when it is required by the nature of the work, none of these exceptional Issue: Whether or not respondent was still a contractual employee of the company.
circumstance were proven in the present case. Hence, respondent whose employment
exceeded six months is undoubtedly a regular employee of petitioner. Held: No, Fadriquela was already a regular employee. Article 280 of the Labor Code of the
Philippines was emplaced in our statute books to prevent the circumvention by unscrupulous
2. Yes. employers of the employee‘s right to be secure in his tenure by indiscriminately and completely
The SMC failed to effect a fair and reasonable criterion in dismissing respondent. The ruling out all written and oral agreements inconsistent with the concept of regular employment
criteria in implementing a redundancy are: (a) less preferred status, e.g. temporary defined therein. The language of the law manifests the intent to protect the tenurial interest of
employee; (b) efficiency; and (c) seniority. In dismissing respondent, petitioner averred the worker who may be denied the rights and benefits due a regular employee because of lopsided
that in choosing the employee to be retained and to be placed in the limited available agreements with the economically powerful employer who can maneuver to keep an employee on
positions, it had to give priority to the regular employees, over petitioner who is only a a casual or temporary status for as long as it is convenient to it. In tandem with Article 281 of the
probationary employee. Labor Code, Article 280 was designed to put an end to the pernicious practice of making
permanent casuals of our lowly employees by the simple expedient of extending to them
3. Yes. temporary or probationary appointments, ad infinitum.
Art. 279 of the LC, provides that ―an employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other privileges and The two kinds of regular employees under the law are (1) those engaged to perform activities
to his full backwages, inclusive of allowances, and to his other benefits or their monetary which are necessary or desirable in the usual business or trade of the employer; and (2) those
equivalent computed from the time his compensation was withheld from him up to the casual employees who have rendered at least one year of service, whether continuous or broken,
time of his actual reinstatement.‖ with respect to the activities in which they are employed. The primary standard to determine a
regular employment is the reasonable connection between the particular activity performed by the
employee in relation to the business or trade of the employer. The test is whether the former is
170. Philips Semiconductors Phils, Inc. vs. Fadriquela; G. R. No. 141717; April 14, 2004 usually necessary or desirable in the usual business or trade of the employer. If the employee has
Topic: Kinds of Employment been performing the job for at least one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its performance as sufficient
Facts: Philips Semiconductors is a domestic corporation engaged in the production and assembly evidence of the necessity, if not indispensability of that activity to the business of the employer.
of semiconductors such as power devices, RF modules, CATV modules, RF and metal transistors Hence, the employment is also considered regular, but only with respect to such activity and while
and glass diods. It caters to domestic and foreign corporations that manufacture computers, such activity exists. The law does not provide the qualification that the employee must first be
telecommunications equipment and cars. Aside from contractual employees, the petitioner issued a regular appointment or must be declared as such before he can acquire a regular
employed 1,029 regular workers. The employees were subjected to periodic performance appraisal employee status.
based on output, quality, attendance and work attitude. One was required to obtain a
performance rating of at least 3.0 for the period covered by the performance appraisal to maintain In this case, the original contract of employment had been extended or renewed four times, to the
good standing as an employee. same position, with the same chores. Such a continuing need for the services of the respondent is
sufficient evidence of the necessity and indispensability of her services to the petitioner‘s business.
Eloisa Fadriquela, during her 5 consecutive contracts, got the following ratings: 3.15, 3.8, 3.4, and By operation of law, then, the respondent had attained the regular status of her employment with
2.8. The reason for her failed mark on the last contract was her absences. She was then asked to the petitioner, and is thus entitled to security of tenure as provided for in Article 279 of the Labor
explain such absences but she failed to do the same. Subsequently, respondent‘s supervisor Code.
recommended that her employment be terminated due to habitual absenteeism. Thus, her
contract of employment was no longer renewed. Respondent then filed a complaint for illegal The limited period specified in petitioner‘s employment contract having been imposed precisely to
dismissal. On the other hand, petitioner contends that respondent was not dismissed; her contract circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or
merely expired. disregarded as contrary to public policy or morals. To uphold the contractual arrangement would,
in effect, permit the former to avoid hiring permanent or regular employees by simply hiring them
The Labor Arbiter and the NLRC based their decision on the CBA between the petitioner and the on a temporary or casual basis, thereby violating the employee‘s security of tenure in their jobs.
labor union which provides that a contractual employee would only be considered a regular

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Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers qualification that the employee must first be issued a regular appointment or must first be formally
of security of tenure and free them from the bondage of uncertainty of tenure woven by some declared as such before he can acquire a regular employee statues. Obviously, where the law does
employers into their contracts of employment. The guarantee is an act of social justice. When a not distinguish, no distinction should be drawn.
person has no property, his job may possibly be his only possession or means of livelihood and
those of his dependents. When a person loses his job, his dependents suffer as well. The worker Under the above circumstances, the private respondents may not terminate the services
should therefore be protected and insulated against any arbitrary deprivation of his job. of petitioners except for just cause or when authorized under the Labor Code. This Court has held
that it is not difficult to see that to uphold, in all cases, the contractual arrangement between the
171. Conti vs. NLRC, G.R. No. 119253, April 10, 1997
employer and employee would in effect to be to permit employers to avoid the necessity of hiring
Topic: Regular Employees
regular or permanent employees indefinitely, by hiring them on a temporary or casual status, thus
denying them security of tenure in this jobs.
In this petition for certiorari under Rule 65 of the Rules of Court, petitioners Amor Conti
and Leopoldo Cruz seek to annul 1) the decision, dated 24 November 1994, of the National Labor
WHEREFORE, based on the foregoing, the decision of public respondent National Labor Relations
Relations Commission (NLRC) in NLRC-NCR-CA-007367-94 (NCR 00-02-00834-93) entitled "Amor
Commission in NLRC-NCR-CA No. 007367-94 (NCR 00-02-00834-93) dated 24 November 1994 is
Conti and Leopoldo Cruz v. Corfarm Holdings Corporation, et. al", setting aside the labor arbiter's
hereby SET ASIDE and the decision of Labor Arbiter Facundo L. Leda, dated 20 June 1994, finding
decision, dated 20 June 1994, declaring that herein petitioners were illegally dismissed from
petitioners to have been illegally dismissed, is REINSTATED with the modification that full
employment, and, 2) the resolution, dated 26 January 1995, denying petitioners' motion for
backwages, to be computed from the date of dismissal up to the time of their actual
reconsideration of said NLRC decision.
reinstatement, without any deductions, be awarded to petitioners

Private respondent Corfarm Holdings Corporation (Corfarm, for brevity) is a duly organized
domestic corporation that operates and manages the Manila Electric Company (MERALCO)
Commissary for the benefit of MERALCO employees. Private respondents Carlito J. Rabang and 172. BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE vs. RONALDO ZAMORA, the
Presidential Assistant for Legal Affairs, Office of the President, and DOROTEO R. ALEGRE G.R. No. L-48494 February
Cipriano Q. Barayang are the President and Vice President, respectively, of said corporation. 5, 1990

Petitioner Amor Conti was employed by respondent Corfarm as cashier on 2 February 1991. FACTS: The root of the controversy at bar is an employment contract in virtue of which Doroteo
Petitioner Leopoldo Cruz was employed by the same respondent corporation as a warehouseman R. Alegre was engaged as athletic director by Brent School, Inc. at a yearly compensation of
on 16 May 1991. Both Amor Conti and Leopoldo Cruz were subsequently promoted to the positions P20,000.00. The contract fixed a specific term for its existence, five years, i.e., from July 18, 1971,
of Head of Commissary and Store Supervisor, respectively. In their respective employment the date of execution of the agreement, to July 17, 1976. Subsequent subsidiary agreements
contracts with Corfarm, it was stipulated that their employment shall be coterminous with the dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the same terms and
effectivity of the contract executed by and between Corfarm and MERALCO for the management of conditions, including the expiry date, as those contained in the original contract of July 18, 1971.
the latter's commissary (hereinafter referred to as the "management contract").
Three months before the expiration of the stipulated period, respondent Alegre was given a copy
On 31 December 1992, said management contract between Corfarm and MERALCO expired. of the report filed by Brent School with the Department of Labor advising of the termination of his
However, Corfarm continued to operate the MERALCO commissary despite the non-renewal of said services effective on July 16, 1976. The stated ground for the termination was completion of
contract. contract, expiration of the definite period of employment. Respondent Alegre accepted the amount
of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for
the period May 16-July 17, 1976 as full payment of contract."
On 13 January 1993, petitioners received a memorandum, dated 12 January 1993, from private
respondents terminating their services effective on said date.
At the investigation conducted by a Labor Conciliator of said report of termination of his services,
Alegre protested the announced termination of his employment. He argued that although his
Issue: Whether or not the employees were illegally dismissed. contract did stipulate that the same would terminate on July 17, 1976, since his services were
necessary and desirable in the usual business of his employer, and his employment had lasted for
Held:This Court has held that if the employee has been performing the job for at least one (1) five years, he had acquired the status of a regular employee and could not be removed except for
year, even if the performance is not continuous but intermittent, the law deems the repeated and valid cause. The Regional Director considered Brent School's report as an application for clearance
continuing need for its performance as sufficient evidence of the necessity if not indispensability of to terminate employment, and accepting the recommendation of the Labor Conciliator, refused to
that activity to the business of his employer. Hence, the employment is also considered regular, give such clearance and instead required the reinstatement of Alegre, as a permanent employee,
but only with respect to such activity, and while such activity exists. The law does not provide the to his former position without loss of seniority rights and with full back wages. The Director
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pronounced the ground relied upon by the petitioner school in terminating the services of the contract as being "usually necessary or desirable in the usual business or trade of the employer."
complainant Alegre as not sanctioned by P.D. 442 and prohibited by Circular No. 8, series of 1969, The concept of the employee's duties as being "usually necessary or desirable in the usual
of the Bureau of Private Schools. business or trade of the employer" is not synonymous with or identical to employment with a fixed
term. Logically, the decisive determinant in term employment should not be the activities
Brent School filed a motion for reconsideration. The Regional Director denied the motion and that the employee is called upon to perform, but the day certain agreed upon by the
forwarded the case to the Secretary of Labor for review. 8 The latter sustained the Regional parties for the commencement and termination of their employment relationship, a
Director. Brent appealed to the Office of the President. Again it was rebuffed. That Office day certain being understood to be "that which must necessarily come, although it
dismissed its appeal for lack of merit and affirmed the Labor Secretary's decision, ruling that may not be known when."
Alegre was a permanent employee who could not be dismissed except for just cause, and
expiration of the employment contract was not one of the just causes provided in the Labor Code Accordingly, and since the entire purpose behind the development of legislation culminating in
for termination of services. the present Article 280 of the Labor Code clearly appears to have been, as already observed, to
prevent circumvention of the employee's right to be secure in his tenure, the clause in said article
ISSUE: Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed indiscriminately and completely ruling out all written or oral agreements conflicting with the
period employment" or employment for a term. concept of regular employment as defined therein should be construed to refer to the substantive
evil that the Code itself has singled out: agreements entered into precisely to circumvent security
RULING: The employment contract between Brent School and Alegre was executed on July 18, of tenure. It should have no application to instances where a fixed period of employment
1971, at a time when the Labor Code (P.D. 442) had not yet been promulgated. The Code come was agreed upon knowingly and voluntarily by the parties, without any force, duress
into effect years after the perfection of the employment contract, and rights and obligations or improper pressure being brought to bear upon the employee and absent any other
thereunder had arisen and been mutually observed and enforced. circumstances vitiating his consent, or where it satisfactorily appears that the
employer and employee dealt with each other on more or less equal terms with no
At that time, before the advent of the Labor Code, there was no doubt whatever about the validity moral dominance whatever being exercised by the former over the latter. Unless thus
of term employment. It was impliedly but nonetheless clearly recognized by the Termination Pay limited in its purview, the law would be made to apply to purposes other than those explicitly
Law, R.A. 1052, as amended by R.A. 1787. It is plain then that when the employment contract stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead
was signed between Brent School and Alegre on July 18, 1971, it was perfectly legitimate for them to absurd and unintended consequences.
to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly
recognized as valid by this Court, for instance, in Biboso v. Victorias Milling Co., Inc., and J. Walter In the case at bar, respondent Alegre's employment was terminated upon the expiration of his last
Thompson Co. (Phil.) v. NLRC, the following pronouncement was made: contract with Brent School on July 16, 1976 without the necessity of any notice. Alegre's contract
of employment with Brent School having lawfully terminated with and by reason of the expiration
What is decisive is that petitioners (teachers) were well aware at the time that of the agreed term of period thereof, therefore, he is not entitled to reinstatement
their tenure was for a limited duration. Upon its termination, both parties to the
employment relationship were free to renew it or to let it lapse. 173. GMA NETWORK INC. VS PABRIGA; GR NO. 176419; November 27, 2013
TOPIC: PROJECT EMPLOYMENT
The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Private respondents were engaged by petitioner for the latter‘s operations in the Technical
Labor Code (Presidential Decree No. 442), which went into effect on November 1, 1974. The Code Operations Center, as Transmitter/VTR men, as Maintenance staff and as Cameramen. On July 19,
contained explicit references to fixed period employment, or employment with a fixed or definite 1999 due to the miserable working conditions, private respondents were forced to file a complaint
period. Nevertheless, obscuration of the principle of licitness of term employment began to take against petitioner before the NLRC. Private respondents were summoned to the office of
place at about this time petitioner‘s Area Manager, Mrs. Susan Aliño, and they were made to explain why they filed the
complaint. The next day, private respondents were barred from entering and reporting for work
The question as to whether or not a voluntary agreement on a fixed term or period would be valid without any notice stating the reasons therefor. Several letters were made by the private
where the employee "has been engaged to perform activities which are usually necessary or respondents requesting for their return to work but the same was totally ignored. Hence, they filed
desirable in the usual business or trade of the employer." The definition seems a non sequitur. an amended complaint raising the following additional issues of 1) Unfair Labor Practice; 2) Illegal
From the premise — that the duties of an employee entail "activities which are usually necessary dismissal; and 3) Damages and Attorney‘s fees. An amicable settlement between the parties was
or desirable in the usual business or trade of the employer the" — conclusion does not necessarily set but the same proved to be futile. The Labor Arbiter dismissed the complaint of respondents for
follow that the employer and employee should be forbidden to stipulate any period of time for the illegal dismissal and unfair labor practice, but held petitioner liable for 13th month pay. All other
performance of those activities. There is nothing essentially contradictory between a definite claims were dismissed for failure to substantiate the same.
period of an employment contract and the nature of the employee's duties set down in that

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 The NLRC reversed the Decision of the Labor Arbiter, and held that a) All complainants are clearly within the regular or usual business of the employer company and are not identifiably
are regular employees with respect to the particular activity to which they were assigned, until it distinct or separate from the other undertakings of the company. There is no denying that the
ceased to exist. As such, they are entitled to payment of separation pay computed at one (1) manning of the operations center to air commercials, acting as transmitter/VTR men, maintaining
month salary for every year of service; b) They are not entitled to overtime pay and holiday pay; the equipment, and acting as cameramen are not undertakings separate or distinct from the
and c) They are entitled to 13th month pay, night shift differential and service incentive leave pay. business of a broadcasting company.
When petitioner elevated the case to the CA via a Petition for Certiorari, the same was denied for
lack of merit. Hence, this present petition for review. In affirming the Decision of the NLRC, the Court of Appeals furthermore noted that if
respondents were indeed project employees, petitioner should have reported the completion of its
ISSUE: Whether or not the employees are projectemployees
projects and the dismissal of respondents in its finished projects:
HELD: NO.The terms regular employment and project employment are taken from Article 280 of
the Labor Code, which also speaks of casual and seasonal employment: There is another reason why we should rule in favor of private respondents.
Nowhere in the records is there any showing that petitioner reported the completion of its
ARTICLE 280.Regular and casual employment. – The provisions of written agreement to projects and the dismissal of private respondents in its finished projects to the nearest
the contrary notwithstanding and regardless of the oral agreement of the parties, an Public Employment Office as per Policy Instruction No. 2015 of the Department of Labor
employment shall be deemed to be regular where the employee has been engaged to and Employment [DOLE]. Jurisprudence abounds with the consistent rule that the failure
perform activities which are usually necessary or desirable in the usual business or trade of an employer to report to the nearest Public Employment Office the termination of its
of the employer, except where the employment has been fixed for a specific project or workers‘ services everytime a project or a phase thereof is completed indicates that said
undertaking the completion or termination of which has been determined at the time of workers are not project employees.
the engagement of the employee or where the work or services to be performed is
seasonal in nature and employment is for the duration of the season.
The Court of Appeals also ruled that even if it is assumed that respondents are project
An employment shall be deemed to be casual if it is not covered by the preceding employees, they would nevertheless have attained regular employment status because of their
paragraph: Provided, That, any employee who has rendered at least one year of service, continuous rehiring:
whether such service is continuous or broken, shall be considered a regular employee with
Be that as it may, a project employee may also attain the status of a regular employee if
respect to the activity in which he is employed and his employment shall continue while
there is a continuous rehiring of project employees after the stoppage of a project; and the
such activity actually exist.
activities performed are usual [and] customary to the business or trade of the employer. The
Pursuant to the above-quoted Article 280 of the Labor Code, employees performing Supreme Court ruled that a project employee or a member of a work pool may acquire the status
activities which are usually necessary or desirable in the employer‘s usual business or trade can of a regular employee when the following concur: 1) There is a continuous rehiring of project
either be regular, project or seasonal employees, while, as a general rule, those performing employees even after cessation of a project; and 2) The tasks performed by the alleged project
activities not usually necessary or desirable in the employer‘s usual business or trade are casual employee are vital, necessary and indispensable to the usual business or trade of the employer.
employees. It is evidently important to become clear about the meaning and scope of the term
The circumstances set forth by law and the jurisprudence is present in this case. In fine, even if
"project" in the present context. The "project" for the carrying out of which "project employees"
private respondents are to be considered as project employees, they attained regular employment
are hired would ordinarily have some relationship to the usual business of the employer.
status, just the same.
Exceptionally, the "project" undertaking might not have an ordinary or normal relationship to the
usual business of the employer. In this latter case, the determination of the scope and parameters
of the "project" becomes fairly easy. It is unusual (but still conceivable) for a company to
undertake a project which has absolutely no relationship to the usual business of the company. 174. LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION ALU-TUCP VS.
PNOC EDC,G.R. NO. 170351, MARCH 30 2011
The term "project" could also refer to, secondly, a particular job or undertaking that is not
within the regular business of the corporation. Such a job or undertaking must also be identifiably Facts:Respondent is a GOCC while petitioner is a legitimate labor organization. Among
separate and distinct from the ordinary or regular business operations of the employer. The job or respondent‘s geothermal projects is the Leyte Geothermal Power Project located at the Greater
undertaking also begins and ends at determined or determinable times. Tongonan Geothermal Reservation in Leyte. Thus, the respondent hired and employed hundreds
of employees on a contractual basis, whereby, their employment was only good up to the
In the case at bar, as discussed in the statement of facts, respondents were assigned to completion or termination of the project and would automatically expire upon the completion of
the following tasks: 1) Manning of Technical Operations Center; 2) Acting as Transmitter/VTR such project.
men; 3) Acting as Maintenance staff; and 4) Acting as Cameramen. These jobs and undertakings
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Majority of the employees hired by respondent in its Leyte Geothermal Power Projects had become Union‘s own admission, both parties had executed the contracts freely and voluntarily without
members of petitioner. In view of that circumstance, the petitioner demands from the respondent force, duress or acts tending to vitiate the worker[s‘] consent.
for recognition of it as the collective bargaining agent of said employees and for a CBA negotiation
with it. However, the respondent did not heed such demands of the petitioner. Sometime in 1998 Thus, we see no reason not to honor and give effect to the terms and conditions stipulated
when the project was about to be completed, the respondent proceeded to serve Notices of therein.
Termination of Employment upon the employees who are members of the petitioner.
The litmus test to determine whether an individual is a project employee lies in setting a fixed
On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the respondent on period of employment involving a specific undertaking which completion or termination has been
the ground of purported commission by the latter of unfair labor practice for ―refusal to bargain determined at the time of the particular employee‘s engagement
collectively, union busting and mass termination.‖ On the same day, the petitioner declared a
strike and staged such strike. 175. MARAGUINOT VS NLRC; GR NO. 120969

FACTS: Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part
Secretary of Labor intervened and ordered all workers to return to work. However, petitioner did of the filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate
not abide. their request that their salary be adjusted in accordance with the minimum wage law.
NLRC: ruled that the employees are PROJECT EMPLOYEES, and the strike as ILLEGAL
Petitioner Union contends that its officers and members performed activities that were usually On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would agree to
necessary and desirable to respondent‘s usual business. their request only if they sign a blank employment contract. Petitioners refused to sign such
document. After which, the Mr. Enero was forced to go on leave on the same month and refused
Issue: WON they are project employees to take him back when he reported for work. Mr. Maraguinot on the other hand was dropped from
the payroll but was returned days after. He was again asked to sign a blank employment contract
Held: They are PROJECT EMPLOYEES but when he refused, he was terminated.
Article 280 of the Labor Code contemplates four (4) kinds of employees: Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The private
(a) regular employees or those who have been ―engaged to perform activities which are usually respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA PRODUCTIONS,
necessary or desirable in the usual business or trade of the employer‖; INC. and that it was primarily engaged in the distribution & exhibition of movies- but not then
(b) project employees or those ―whose employment has been fixed for a specific project or making of movies; (b) That they hire contractors called ―producers‖ who act as independent
undertaking[,] the completion or termination of which has been determined at the time of the contractors as that of Vic Del Rosario; and (c) As such, there is no employee-employer relation
engagement of the employee‖; between petitioners and private respondents.
(c) seasonal employees or those who work or perform services which are seasonal in nature, and
the employment is for the duration of the season; and The Labor Arbiter held that the complainants are employees of the private respondents. That the
(d) casual employees or those who are not regular, project, or seasonal employees. producers are not independent contractor but should be considered as labor-only contractors and
as such act as mere agent of the real employer. Thus, the said employees are illegally dismissed.
Jurisprudence has added a fifth kind— a fixed-term employee.
By entering into such a contract, an employee is deemed to understand that his employment is The private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter
coterminous with the project. He may not expect to be employed continuously beyond the declaring that the complainants were project employees due to the ff. reasons: (a) Complainants
completion of the project. It is of judicial notice that project employees engaged for manual were hired for specific movie projects and their employment was co-terminus with each movie
services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. project; (b)The work is dependent on the availability of projects. As a result, the total working
However, this fact alone is not a valid reason for bestowing special treatment on them or for hours logged extremely varied; (c) The extremely irregular working days and hours of
invalidating a contract of employment. Project employment contracts are not lopsided agreements complainants work explains the lump sum payment for their service; and (d) The respondents
in favor of only one party thereto. The employer‘s interest is equally important as that of the alleged that the complainants are not prohibited from working with other movie companies
employee[s‘] for theirs is the interest that propels economic activity. While it may be true that it is whenever they are not working for the independent movie producers engaged by the respondents.
the employer who drafts project employment contracts with its business interest as overriding
consideration, such contracts do not, of necessity, prejudice the employee. Neither is the A motion for reconsideration was filed by the complainants but was denied by NLRC. In effect,
employee left helpless by a prejudicial employment contract. After all, under the law, the interest they filed an instant petition claiming that NLRC committed a grave abuse of discretion in: (a)
of the worker is paramount. Finding that petitioners were project employees; (b) Ruling that petitioners were not illegally
dismissed; and (c) Reversing the decision of the Labor Arbiter.
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 176. Equipment Technical Services vs CA; GR 157680, October 8, 2008
In the instant case, the petitioners allege that the NLRC acted in total disregard of evidence
material or decisive of the controversy. TOPIC: DO 19 series of 1993 and Policy Instruction No. 20

Facts: ETS is primarily engaged in the business of sub-contracting plumbing woks of on-going
ISSUES: building construction. Among its clients was Uniwide. On various occasions involving different
projects, ETS hired the services of private respondents as pipe fitters, plumbers or threaders.
(a) Whether or not there exist an employee- employer relationship between the petitioners and
the private respondents. ETS experienced financial difficulties when its client, Uniwide, failed to pay the forner for
the plumbing work being done at Uniwide's Coastal Mall. As a result, ETS was only able to pay its
(b) Whether or not the private respondents are engaged in the business of making movies. employees 13th months pay equivalent to two weeks' salary. Due to non-payment of the balance of
the employees 13th month pay, they filed a complaint before the NLRC against ETS. A complaint
(c) Whether or not the producer is a job contractor. for illegal dismissal and payment of money claims were later on filed against ETS when they were
refused work in another ETS project (Richville Project) on the ground that they refused to sign
HELD: individual employement conracts with ETS.
There exist an employee- employer relationship between the petitioners and the private
respondents because of the ff. reasons that nowhere in the appointment slip does it appear that it The dismissed employees raised that they were regular employees of ETS. ETS, however
was the producer who hired the crew members. Moreover, it was VIVA‘s corporate name counters such claim and said that the dismissed employees were only contractual/project
appearing on heading of the slip. It can likewise be said that it was VIVA who paid for the employees engaged for different projects of the company and that they were not illegally
petitioners‘ salaries. dismissed as they were hired on a per project basis.

The LA held that the dismissed employees were regular employees of ETS and not only
Respondents also admit that the petitioners were part of a work pool wherein they attained the
contractual or project-based employees and that there was illegal dismissal. The NLRC reversed
status of regular employees because of the ff. requisites: (a) There is a continuous rehiring of
the decision of the LA and that there was no illegal dismissal.
project employees even after cessation of a project; (b) The tasks performed by the alleged
―project employees‖ are vital, necessary and indispensable to the usual business or trade of the Issue: Are the respondent's regular employees of ETS?
employer; and (c) However, the length of time which the employees are continually re-hired is not
controlling but merely serves as a badge of regular employment. Held: The principal test for determining whether an employee is properly characterized as
―project employee,‖ as distinguished from ―regular employee,‖ is whether or not ―the project
Since the producer and the crew members are employees of VIVA and that these employees‘ employee‖ was assigned to carry out ―a specific project or undertaking,‖ the duration and scope of
works deal with the making of movies. It can be said that VIVA is engaged of making movies and which were specified at the time the employees were engaged for that project. And as Article 280
not on the mere distribution of such. of the Labor Code, defining a regular employee vis-à-vis a project employee, would have it:

The producer is not a job contractor because of the ff. reasons: (Sec. Rule VII, Book III of the Art. 280. Regular and casual employment. – The provisions of written
Omnibus Rules Implementing the Labor Code.) agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
a. A contractor carries on an independent business and undertakes the contract work on his own has been engaged to perform activities which are usually necessary or desirable
account under his own responsibility according to his own manner and method, free from the in the usual business or trade of the employer, except where the employment has
control and direction of his employer or principal in all matters connected with the performance of been fixed for a specific project or undertaking the completion or termination of
the work except as to the results thereof. The said producer has a fix time frame and budget to which has been determined at the time of the engagement of the employee x x x.
make the movies.
It bears to stress at the outset that ETS admits hiring or employing private respondents to
b. The contractor should have substantial capital and materials necessary to conduct his business. perform plumbing works for various projects. Given this postulate, regular employment may
The said producer, Del Rosario, does not have his own tools, equipment, machinery, work reasonably be presumed and it behooves ETS to prove otherwise, that is, that the employment in
premises and other materials to make motion pictures. Such materials were provided by VIVA. question was contractual in nature ending upon the expiration of the term fixed in the contract or
for a specific project or undertaking. But the categorical finding of the CA, confirmatory for the
It can be said that the producers are labor-only contractors. Under Article 106 of the Labor Code most part of that of the labor arbiter, is that not a single written contract of employment fixing the
(reworded) where the contractor does not have the requisites as that of the job contractors. terms of employment for the duration of the Uniwide project, or any other project, was submitted
130
by ETS despite the latter‘s allegations that private respondents were merely contractual Thereafter, Bughaw filed a complaint for illegal dismissal against TII and its President, Emmanuel
employees. Records of payroll and other pertinent documents, such as job contracts secured by Ong, before the Labor Arbiter. He argues that He had been working for the respondent for 15
ETS showing that private respondents were hired for specific projects, were also not submitted by years and he was very conscientious with his job. He was suspended for 30 days on the
ETS. unfounded allegation of his co-worker that he used illegal drugs within company premises. When
he reported back to work after the expiration of his suspension, he was no longer allowed by
Moreover, if private respondents were indeed employed as project employees, petitioners respondent to enter the work premises and was told not to report back to work. LA Rendered a
should have had submitted a report of termination every time their employment was terminated Decision in favor of Bughaw based on the ff:
owing to the completion of each plumbing project. As correctly held by the CA in its Amended
(1) TII failed to present substantial evidence to establish the charge leveled against the
Decision, citing Tomas Lao Construction v. NLRC, ETS‘ failure to report the employment
Bughaw. Apart from Loberanes's statements on petitioner's alleged illegal drug use, no
termination and file the necessary papers after every project completion tends to support the claim
other corroborating proof was offered by respondent to justify petitioner's dismissal.
of private respondents about their not being project employees. Under Policy Instruction No. 20,
Series of 1977, the report must be made to the nearest public office employment. (2)TII failed to comply with due process when it immediately suspended petitioner and
eventually dismissed him from employment. Bughaw‘s immediate suspension was not
Private respondents may have initially been hired for specific projects or undertaking of justified since no evidence was submitted by the TII to establish that Bughaw‘s continued
petitioner ETS and, hence, may be classified as project employees. Their repeated rehiring to employment pending investigation poses a serious and imminent threat to respondent's
perform tasks necessary to the usual trade or business of ETS changed the legal situation life or property or to the life or property of petitioner's co-workers.
altogether, for in the later instance, their continuous rehiring took them out from the scope of
workers coterminus with specific projects and had made them regular employees. (3)The notices of hearing sent by TII to Bughaw were not duly received by the latter.

Parenthetically, petitioners‘ assertion that there can be no illegal dismissal of project The NLRC: Affirmed the Labor Arbiter's Decision. On appeal to CA itReversed the Decisions of
employees inasmuch as they are not entitled to security of tenure is inaccurate. The the Labor Arbiter and NLRC on the grounds of patent misappreciation of evidence and
constitutionally-protected right of labor to security of tenure covers both regular and project misapplication of law. CA found that Bughaw was afforded the opportunity to explain and defend
workers.Their termination must be for lawful cause and must be done in a way which affords them himself from the accusations against him when TTI gave him notices of hearing. The essence of
proper notice and hearing. due process in administrative proceedings is simply an opportunity to explain one's side or to seek
reconsideration of the action or ruling complained of. Due process is not violated where one is
Decision of the Labor Arbiter was affirmed and ordered ETS to reinstate respondents to given the opportunity to be heard but he chooses not to explain his side
their former positions, without loss of rank and seniority rights with backwages from the date of
dismissal until reinstated. ISSUE: WON use of prohibited drugs is a ground for termination of employment

177. BUGHAW v TREASURE ISLAND INDUSTRIAL CORPORATION HELD: YES.Misconduct is improper or wrong conduct, the transgression of some established and
Topic: Just Causes definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not merely an error in judgment, and for the misconduct to be serious within
FACTS: Eduardo Bughaw (Bughaw) was employed as production worker by Treasure Island the meaning of the Act must be of such a grave and aggravated character and not merely trivial or
Industrial (TII), respondent. Erlito Loberanes (Loberanes), an employee of TII was caught in unimportant; The Supreme Court has taken judicial notice of scientific findings that drug abuse can
flagrante delicto by the police officers while in possession of shabu. In the course of police damage the mental faculties of the user—it is beyond question therefore that any employee under
investigation, Loberanes admitted the commission of the crime and implicated petitioner, Bughaw, the influence of drugs cannot possibly continue doing his duties without posing a serious threat to
by stating that part of the money used for buying the illegal drugswas given by Bughaw, and the the lives and property of his co-workers and even his employer.—The charge of drug abuse inside
illegal drugs purchased were for their consumption for the rest of the month. TII sent a memo to the company‘s premises and during working hours against petitioner constitutes serious
Bughaw. The memo contains the ff: (1) notice of the 30-day preventive suspension (2) An misconduct, which is one of the just causes for termination. Misconduct is improper or wrong
instruction requiring him to explain within 120 hours why no disciplinary action should be imposed conduct. It is the transgression of some established and definite rule of action, a forbidden act, a
against him for his alleged involvement in illegal drug activities. (3) An instruction requiring him to dereliction of duty, willful in character, and implies wrongful intent and not merely an error in
appear at the office of respondent's legal counsel for the hearing on the matter. Bughaw failed to judgment. The misconduct to be serious within the meaning of the Act must be of such a grave
appear before the TII's legal counsel on the scheduled hearing date. TII sent a second letter to and aggravated character and not merely trivial or unimportant. Such misconduct, however
petitioner directing him to attend another administrative hearing but petitioner once again failed to serious, must nevertheless, in connection with the work of the employee, constitute just cause for
show up. In a third letteraddressed to Bughaw, TII terminated the latter's employment for using his separation. This Court took judicial notice of scientific findings that drug abuse can damage the
illegal drugs within company premises during working hours, and for refusal to attend the mental faculties of the user. It is beyond question therefore that any employee under the influence
administrative hearing and submit written explanation on the charges hurled against him. of drugs cannot possibly continue doing his duties without posing a serious threat to the lives and
131
property of his co-workers and even his employer. 1. In the case at bench, the voluntary contribution by the locker
personnel amongst themselves to a mutual fund for their own
178. Villamor Golf Club v. Pehid, G.R. No. 166152, October 4, 2005 personal benefit in times of need is not in any way connected
with the work of the locker boys and the complainant.
Facts: Pehid was employed by Villamor Golf Club (VGC) as an attendant in the locker room. Pehid 2. If ever there was misappropriation or loss of the said mutual
was soon promoted as supervisor-in-charge of the locker room personnel. fund, the Pehid will not and cannot be in any way "tend or
cause to prejudice the club."
The locker room personel had an agreement among themselves without the knowledge of VGC, to 3. Such mutual fund is a separate transaction among the
pool in their tips into a common fund to be used by any locker personnel in time of need; they employees and is not in any way connected with the employee‘s
each contributed P100.00 a daily. work.
c. Under the afore-quoted VGC rule, the dishonesty of an employee to be a valid
Apparently, the tips pooled amounting to P17,990. Several of the locker personnel charged Pehid cause for dismissal must relate to or involve the misappropriation or malversation
with misappropriating the fund and alleged that he was the custodian thereof. of the club funds, or cause or tend to cause prejudice to VGC.
i. The substantial evidence on record indicates that the P17,990.00, did not
VGC conducted an investigation and required Pehid to show cause why no disciplinary action belong to VGC but to the forced savings of its locker room personnel.
should be taken against him since VGC alleged that Pehid violated a company policy of ii. Even the VGC management did not know about the mutual fund or
misappropriating VGC funds. sanctioned its existence.
1. Hence, the claim that the VGC‘s interest was prejudiced has no
Pehid was subsequently dismissed. Pehid filed a case for illegal dismissal with the NLRC. factual basis.
d. Company policies and regulations are, unless shown to be grossly oppressive or
The Labor Arbiter ruled in favor of Pehid and ordered separation pay in lieu of reinstatement. On contrary to law, generally valid and binding and must be complied with by the
appeal, the NLRC reversed the Labor Arbiter. On petition for review with the CA, the CA reinstated parties unless finally revised or amended, unilaterally or preferably through
the Labor Arbiter‘s decision. negotiation.
i. However, while an employee may be validly dismissed for violation of a
VGC appealed to the SC alleging that the act of Pehid caused damage to VGC and constituted reasonable rule or regulation adopted for the conduct of the company‘s
violation of its internal rules for dishonesty and constituted gross misconduct and loss of business, an act allegedly in breach thereof must clearly and convincingly
confidence. fall within the express intendment of such order.
e. Neither may the petitioners rely on Article 282 of the Labor Code. As the CA
Issue/Held: succinctly ruled:
i. Clearly, based on the grounds of termination provided under Article 282
1) WoN Pehid was illegally dismissed? YES of the Labor Code and the VGC Rules and Regulations, the common
denominator thereof to constitute gross misconduct as a ground for a
Ratio: valid termination of the employee, is that – it is committed in connection
with the latter‘s work or employment.
1) The company policy allegedly violated is as follows: ii. In the instant case, as previously pointed out, the alleged petitioner‘s
a. Paragraph IV-E(a) and (d) of the VGC Rules and Regulation cited by the misappropriation or malversation was committed, assuming it to be true,
petitioners reads: E. Dishonesty against the common funds of the Locker Room personnel, which did not
i. The following shall constitute violation of this section belong nor sanctioned by respondent VGC.
1. a) Misappropriation or malversation of Club funds f. "Serious misconduct" as a valid cause for the dismissal of an employee is defined
2. d) All other acts of dishonesty which cause or tend to cause as improper or wrong conduct; the transgression of some established and definite
prejudice to Villamor Golf Club.19 rule of action, a forbidden act, a dereliction of duty, willful in character, and
b. The funds alleged to have been embezzled by the Pehid, belonged to the implies wrongful intent and not mere error in judgment.
personnel of respondent VGC and not to respondent VGC. i. To be serious within the meaning and intendment of the law, the
i. In fact, the latter had not sanctioned the purpose upon which the said misconduct must be of such grave and aggravated character and not
funds were established. merely trivial or unimportant.

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 1. However serious such misconduct, it must, appellate court erred in dismissing outright petitioners‘ special civil action for certiorari solely on
nevertheless, be in connection with the employee‘s work to that ground.
constitute just cause for his separation.
2. The act complained of must be related to the performance of
the employee‘s duties such as would show him to be unfit to 180. Acesite Corporation, Holiday Inn, Johann Angerbauer And Phil Kennedy, Vs.
continue working for the employer. National Labor Relations Commission; G.R. No. 152308; January 26, 2005.

TOPIC: Termination by employer; Just Causes; Serious Misconduct (requisites)

179. MICRO SALES OPERATION NETWORK VS. NLRC, GR NO. 155279, OCTOBER 11, 2011 FACTS: Leo A. Gonzales was the Chief of Security of Holiday Inn operated by Acesite Corporation
(Acesite) took over the. He took multiple leaves he was entitled for the year. After exhausting all
FACTS:Micro Sales Operation Network is a domestic corporation engaged in local transportation of his entitled leaves, he filed for another leave however it was not approved. He was ordered to
goods by land. Willy Bendol was the company‘s operations manager at the time of the controversy. report back to work via telegram. He did not report to work in the day he was supposed to.
Private respondents Larry Hermosa, Leonardo de Castro, and Ramil Basinillo were employed by the Acesite sent a telegram that he was on an unauthorized leave and to provide for a written
company as driver, warehouseman, and helper, respectively. explanation. He was ordered to report on the following day. Gonzales‘ father sent a telegram that
his son cannot report to work because he was suffering severe stomachache. A medical certificate
The three were dismissed by the company: Hermoso for failing to surrender the ignition key of the was attached. Several exchanges of communication were made between Gonzales and the
company‘s vehicle, De Castro for firing a gun during the blessing of the company‘s warehouse, Manager of holiday inn. On this exchanges, the Manager asked for Gonzales to report back to
Basinillo for not wearing the employee ID. work. When Gonzales went back to work, he was barred from entering the premises because he
was terminated based on willful disobedience by the employee of the lawful orders of his employer
Thus, on February 10, 1999, Hermosa, de Castro, and Basinillo collectively filed a complaint for or representative in connection with his work (not reporting back to work despite several orders by
illegal dismissal. The Labor Arbiter found that respondents were, indeed, illegally dismissed. management).
On appeal, the NLRC affirmed the Labor Arbiter‘s decision.
Undaunted, Micro Sales filed with the Court of Appeals a special civil action for certiorari. However, Gonzales filed for an illegal dismissal with reinstatement. Case was dismissed by Labor
the appellate court dismissed the petition for being defective in form. Arbiter for lack of merit holding that Gonzales was dismissed for just cause and was not denied of
due process. NLRC reversed the decision. The CA affirmed the NLRC decision.
It found that only the company signed the verification and certification on non-forum shopping.
Willy Bendol did not sign the same. Thus, the appellate court ruled, his failure to sign the ISSUE: Whether or not Gonzales was terminated on just cause of willful disobedience.
verification and certification on non-forum shopping is a ground for the dismissal of the petition.
HELD: No.
ISSUE: Is a defect in form (failure to sign the verification and certification on non-forum Willful disobedience entails the concurrence of at least two (2) requisites: the employee‘s
shopping) a ground for the dismissal of the petition? assailed conduct has been willful or intentional, the willfulness being characterized by a "wrongful
and perverse attitude;" and the order violated must have been reasonable, lawful, made known to
RULING: No.Bendol is clearly a mere nominal party in the case. the employee and must pertain to the duties which he had been engaged to discharge.

The requirement regarding verification of a pleading is not jurisdictional. Such requirement is In Gonzales‘ case, his assailed conduct has not been shown to have been characterized by
simply a condition affecting the form of the pleading, non-compliance with which does not a perverse attitude, hence, the first requisite is wanting. His receipt of the telegram disapproving
necessarily render the pleading fatally defective. his application for emergency leave starting April 30, 1998 has not been shown. And it cannot be
said that he disobeyed the May 5, 1998 telegram since he received it only on May 7, 1998. On the
In the instant case, the petitioners are the company and its operations manager, Willy Bendol. The contrary, that he immediately hied back to Manila upon receipt thereof negates a perverse attit
latter was impleaded simply because he was a co-respondent in the illegal dismissal complaint. He
has no interest in this case separate and distinct from the company, which was the direct employer
of private respondents. 181. NORMAN YABUT VS. MANILA ELECTRIC COMPANY G.R. NO. 190436 July 16, 2012
Any award of reinstatement, backwages, and attorney‘s fees in favor of private respondents will be
enforced against the company as the real party in interest in an illegal dismissal case. FACTS: The petitioner had worked with Meralco from February 1989 until his dismissal from
Petitioner Bendol is clearly a mere nominal party in the case. His failure to sign the verification employment on February 2004. At the time of said dismissal, he was assigned at the Meralco
and certification on non-forum shopping is not a ground for the dismissal of the petition. The Malabon Branch Office as a Branch Field Representative tasked, among other things, to conduct
surveys on service applications, test electric meters, investigate consumer-applicants' records of
133
Violations of Contract and perform such other duties and functions as may be required by his HELD: The dismissal of the petitioner was founded on just causes under Article 282 of the Labor
superior. Code of the Philippines.

However, Meralco's Inspection Office issued a memorandum addressed to Meralco's The petitioner's violation of the company rules was evident. While he denies any
Investigation-Legal Office, informing it of an illegal service connection at the petitioner's residence. involvement in the installation of the shunting wires which Meralco discovered, it is significant that
The Inspection Office claimed discovering shunting wires installed on the meter, registered under said SIN 708668501 is registered under his name, and its meter base is situated within the
petitioner Yabut's name. These wires allegedly allowed power transmission to the petitioner's premises of his property. Said meter registered electric consumption during the time his electric
residence despite the fact that Meralco had earlier disconnected his electrical service due to his service was officially disconnected by Meralco. It was the petitioner and his family who could have
failure to pay his electric bills. benefited from the illegal connection, being the residents of the area covered by the service. His
claim that he failed to know or even notice the shunted wires fails to persuade as we consider the
Given this report, Meralco's Head of Investigation-Litigation Office issued to the petitioner meter located in the front of his house, the nature of his work as branch field representative, his
a notice. long-time employment with Meralco and his familiarity with illegal connections of this kind.

Yabut denied knowing the person who installed the discovered shunting wires. While he The logical conclusion that may be deduced from these attending circumstances is that
did not always go home to their house in Bulacan as there were times when he stayed in his the petitioner was a party, or at the very least, one who agreed to the installation of the shunted
sister's residence in Malabon, the petitioner confirmed that he was regularly in his Bulacan house. wires, and who also benefited from the illegal connection at the expense of his employer-
His residence had electricity even prior to the full settlement of his outstanding bills through a company. In sustaining the CA's findings, we consider the rule that in administrative and quasi-
connection made to the line of his neighbor Jojo Clemente. judicial proceedings, as in proceedings before the NLRC which had original jurisdiction over the
complaint for illegal dismissal, the quantum of proof necessary is substantial evidence or such
relevant evidence as a reasonable mind may accept as adequate to support a conclusion.
In view of these findings, respondent Meralco, through its Senior Assistant Vice President
for Human Resources Administration R. A. Sapitula, issued a notice of dismissaladdressed to the
petitioner. The notice cites violation of Section 7, paragraph 3 of Meralco's Company Code on To reiterate, Article 282 (a) provides that an employer may terminate an employment
Employee Discipline and Article 282 (a), (c), (d) and (e) of the Labor Code of the Philippines as because of an employee's serious misconduct, a cause that was present in this case in view of the
bases for the dismissal. petitioner's violation of his employer's code of conduct. Misconduct is defined as the ―transgression
of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment.‖ For serious misconduct to
Aggrieved by the decision of the management, Yabut filed with the National Labor
justify dismissal, the following requisites must be present: (a) it must be serious; (b) it must relate
Relations Commission (NLRC) a complaintfor illegal dismissal and money claims against Meralco
to the performance of the employee's duties; and (c) it must show that the employee has become
and Lopez.
unfit to continue working for the employer.

The Labor Arbiter declared that petitioner was illegally dismissed from service, hence,
The dismissal is also justified as the act imputed upon the petitioner qualifies as ―fraud or
entitled to reinstatement plus back wages and attorney‘s fees. Unsatisfied, the respondents
willful breach by the employee of the trust reposed in him by his employer or duly authorized
appealed from the decision of the labor arbiter to the NLRC.
representative‖ under Article 282 (c) of the Labor Code. While the petitioner contests this ground
by denying that his position is one of trust and confidence, it is undisputed that at the time of his
NLRC rendered its Resolution dismissing the herein respondents' appeal for lack of merit. dismissal, he was holding a supervisory position after he rose from the ranks since commencement
This prompted the respondents to file a petition for certiorari with the CA. CA rendered the now of his employment with Meralco. As a supervisor with duty and power that included testing of
assailed Decision reversing the rulings of the NLRC. In finding the petitioner's dismissal lawful, the service meters and investigation of violations of contract of customers, his position can be treated
appellate court attributed unto Yabut authorship of the meter tampering and illegal use of as one of trust and confidence, requiring a high degree of honesty as compared with ordinary
electricity – acts which it regarded as serious misconduct. rank-and-file employees.

ISSUE: Whether the petitioner was correct in asserting that he was dismissed from employment In this case, the acts complained of were clearly work-related because they related to
without a valid cause, and that due process prior to his termination was not observed by the matters the petitioner handled as branch field representative. Taking into account the results of its
respondents. investigations, Meralco cannot be expected to trust Yabut to properly perform his functions and to
meet the demands of his job. His dishonesty, involvement in theft and tampering of electric meters

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clearly prejudice respondent Meralco, since he failed to perform the duties which he was expected A perusal of petitioner hospitals CCTV Monitoring Guidelines, disseminated to all in-house
to perform. security personnel, reveals that that there is no categorical provision requiring an in-house security
personnel to observe a rotation sequence procedure in focusing the cameras so that the security
Considering the foregoing, this Court agrees that there were just causes for the monitoring would cover as many areas as possible.
petitioner's dismissal. We emphasize that dismissal of a dishonest employee is to the best interest
Under Article 282 (b) of the Labor Code, an employer may terminate an employee for gross and
not only of the management but also of labor. As a measure of self-protection against acts inimical
habitual neglect of duties. Neglect of duty, to be a ground for dismissal, must be both gross and
to its interest, a company has the right to dismiss its erring employees. An employer cannot be
habitual. Gross negligence connotes want of care in the performance of one‘s duties. Habitual
compelled to continue employing an employee guilty of acts inimical to the employer‘s interest,
neglect implies repeated failure to perform one‘s duties for a period of time, depending upon the
justifying loss of confidence in him.
circumstances. A single or isolated act of negligence does not constitute a just cause for the
dismissal of the employee. Under the prevailing circumstances, respondent exercised his best
182. St. Luke’s Medical Center, Inc. and Robert Kuan vs. Estrelito Nazario (GR No. judgment in monitoring the CCTV cameras so as to ensure the security within the hospital
152166; October 20, 2010) Topic: Gross/Habitual Neglect of Duties (Requisites) premises. Verily, assuming arguendo that respondent was negligent, although this Court finds
otherwise, the lapse or inaction could only be regarded as a single or isolated act of negligence
Facts: On June 23, 1995, St. Lukes Medical Center, Inc. (petitioner hospital), located at Quezon that cannot be categorized as habitual and, hence, not a just cause for his dismissal.
City, employed respondent as In-House Security Guard. In August 1996, Nimaya Electro
Corporation installed a closed-circuit television (CCTV) system in the premises of petitioner hospital 183. Uniwide Sales Warehouse vs. NLRC; G.R. No. 154503; February 29, 2008
to enhance its security measures and conducted an orientation seminar for the in-house security
TOPIC:Labor Standards
personnel on the proper way of monitoring video cameras, subject to certain guidelines.
IV. Termination by Employer (Art. 282 now Art. 297)
In the evening of December 30, 1996, Justin Tibon, a foreigner from Majuro, Marshall
ii. Gross/Habitual Neglect of Duties (Requisites)
Island, then attending to his 3-year-old daughter, Andanie De Brum, who was admitted since
December 20, 1996 at room 257, cardiovascular unit of petitioner hospital, reported to the FACTS: Amalia P. Kawada (private respondent) started sometime in 1981 as a saleslady in
management of petitioner hospital about the loss of his mint green traveling bag, which was Uniwide, and eventually becoming a Full Assistant Store Manager 1995.
placed inside the cabinet, containing, among others, two (2) Continental Airlines tickets, two (2)
passports, and some clothes. Acting on the complaint of Tibon, the Security Department of On March 15, 1998, Uniwide, through Store Manager Apduhan, issued a Memorandum
petitioner hospital conducted an investigation. When the tapes of video camera recorder (VCR) no. addressed to the private respondent summarizing the various reported incidents signifying
3 covering the subject period were reviewed, it was shown that the cameras failed to record any unsatisfactory performance on the latter's part. Uniwide asked private respondent for concrete
incident of theft at room 257. plans on how she can effectively perform her job. In a letter dated March 23, 1998, private
respondent answered all the allegations contained in the March 15, 1998 Memorandum in the
Respondent explained that on the subject dates, he was the only personnel on duty as negative.
nobody wanted to assist him. Because of this, he decided to focus the cameras on the Old and
New Maternity Units, as these two units have high incidence of crime. Unsatisfied, on June 30, 1998, Apduhan sent another Memorandum seeking from the
private respondent an explanation regarding the incidents reported by Uniwide employees and
Finding the written explanation of respondent to be unsatisfactory, petitioner hospital, security personnel for alleged irregularities committed by the private respondent. In a letter dated
through Calixton, served on respondent a copy of the Notice of Termination, dated January 24, July 9, 1998, private respondent answered the allegations made against her.
1997, dismissing him on the ground of gross negligence/inefficiency under Section 1, Rule VII of
its Code of Discipline. Sometime on July 1998, private respondent sought medical help from the company
physician due to dizziness. The company physician thereafter advised her to take a 5 days sick
Issue: Whether or not respondent was validly dismissed on the ground of gross negligence in the leave. Unfortunately, the certificate of fitness to work issued by company physician to respondent
performance of his duty? contained the wrong surname; Menia, instead of Kawada.
Held: No. Article 282 (b) of the Labor Code provides that an employer may terminate an Private respondent claims that Apduhan shouted at her on two occasion due to the
employment for gross and habitual neglect by the employee of his duties. An employer can erroneous certificate. This caused her hypertension to recur and eventually caused her to collapse.
terminate the services of an employee only for valid and just causes which must be supported by Private respondent's head hit the edge of the table before she fell down.
clear and convincing evidence. The employer has the burden of proving that the dismissal was
indeed for a valid and just cause. On August 2, 1998, Apduhan issued a Memorandum, received on the same day by
Edgardo Kawada, the husband of private respondent, advising the latter of a hearing scheduled on

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August 12, 1998 and warning her that failure to appear shall constitute as waiver and the case status and based on the evaluation made by the City Personnel Selection and Promotion Board
shall be submitted for decision based on available papers and evidence. On August 3, 1998, (PSPB) created pursuant to Republic Act No. 7160.[3] The Civil Service Commission (CSC) approved
private respondent filed a case for illegal dismissal, and opted not to attend the scheduled hearing. the appointments.

She was then terminated ―on the grounds of violations of Company Rules, Abandonment When Mayor Jose Miranda reassumed his post on March 5, 1998 after his suspension, he
of Work and loss of trust and confidence.‖ considered the composition of the PSPB irregular since the majority party, to which he belongs,
was not properly represented.[4] He then formed a three-man special performance audit team
The Labor Arbiter dismissed the complaint for lack of merit. On appeal to the NLRC, it composed of Roberto C. Bayaua, Antonio AL. Martinez and Antonio L. Santos, to conduct a
ruled in favor of private respondent, reversing the LA. Finally, on appeal, the CA affirmed in toto personnel evaluation audit of those who were previously screened by the PSPB and those on
the decision of the NLRC. probation. After conducting the evaluation, the audit team submitted to him a report dated June 8,
1998 stating that the respondents were found wanting in (their) performance.
ISSUE: Whether or not the Court of Appeals seriously erred in sustaining the NLRC's finding that
private respondent was constructively dismissed. On June 10, 1998, or three months after Mayor Miranda reassumed his post, he issued an
order terminating respondents services effective June 15, 1998 because they performed poorly
HELD: Yes. The test of constructive dismissal is whether a reasonable person in the employee's
during the probationary period.
position would have felt compelled to give up his position under the circumstances.
Respondents appealed to the CSC, contending that being employees on probation, [5] they can
Private respondent claims that from the months of February to June 1998, she had been be dismissed from the service on the ground of poor performance only after their probationary
subjected to constant harassment, ridicule and inhumane treatment by Apduhan, with the hope period of six months, not after three (3) months. They also denied that an evaluation on their
that the latter can get the private respondent to resign. However, Private respondent's bare performance was conducted, hence, their dismissal from the service violated their right to due
allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be process.
given credence. Clearly, the memoranda are not forms of harassment, but petitioners' compliance
with the requirements of due process. On October 19, 1998, the CSC issued Resolution No. 982717 reversing the order of Mayor
Miranda and ordering that respondents be reinstated to their former positions with payment of
On the private respondent‘s termination, the Court agrees with the findings of the LA that backwages, thus:
the termination of private respondent was grounded on the existence of just cause under Article
282 (c) of the Labor Code or willful breach by the employee of the trust reposed on him by his
Granting that the complainant-employees (now respondents) indeed rated poorly, the question
employer or a duly authorized representative.
that remains is whether they can be terminated from the service on that ground.
In Caoile v. National Labor Relations Commission, the Court distinguished the treatment of
managerial employees from that of rank-and-file personnel, insofar as the application of the loss of x x x, at the time of their termination the complainants have not finished the six (6) months
trust and confidence is concerned. probationary period. x x x, they may be terminated even before the expiration of the probationary
period pursuant to Section 26, par. 1, Chapter 5, Book V, Title I-A of the Revised Administrative
The Court held: ―Thus, with respect to rank-and-file personnel, loss of trust and Code of 1987. Said Section provides:
confidence as ground for valid dismissal requires proof of involvement in the alleged events in
question, and that mere uncorroborated assertions and accusations by the employer will not be
sufficient. But, as regards a managerial employee, mere existence of a basis for believing that All such persons (appointees who meet all the requirements of the position) must serve
such employee has breached the trust of his employer would suffice for his dismissal. Hence, in a probationary period of six months following their original appointment and shall undergo a
the case of managerial employees, proof beyond reasonable doubt is not required, it being thorough character investigation in order to acquire a permanent civil service status. A
sufficient that there is some basis for such loss of confidence, such as when the employer has probationer may be dropped from the service for unsatisfactory conduct or for want of
reasonable ground to believe that the employee concerned is responsible for the purported capacity anytime before the expiration of the probationary period: Provided, that such
misconduct, and the nature of his participation therein renders him unworthy of trust and action is appealable to the Commission.
confidence demanded by his position.‖
It is, however, clear from the foregoing quoted provision that an employee on probation status
184. Miranda vs. Carreon may be terminated only for unsatisfactory conduct or want of capacity. In this case, the
services of the complainants were terminated on the ground of poor performance x x
Facts:In the early part of 1988, Vice Mayor Amelita Navarro, while serving as Acting Mayor of the
x. Although poor performance may come near the concept of want of capacity, the
City of Santiago because of the suspension of Mayor Jose Miranda, appointed the above-named
latter, as held by this Commission, implies opportunity on the part of the head of office
respondents to various positions in the city government. Their appointments were with permanent
to observe the performance and demeanor of the employee concerned (Charito Pandes,
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CSC Resolution No. 965592). At this point, considering that Mayor Jose Miranda office, the action may be continued and maintained by or against his successor if, within thirty (30)
reassumed his post only on March 5, 1998 after serving his suspension, it is quite days after the successor takes office or such time as may be granted by the Court, it is
improbable that he can already gauge the performance of the complainants through satisfactorily shown by any party that there is substantial need for continuing or maintaining it and
the mere lapse of three months considering that the date of the letter of termination is the successor adopts or continues or threatens to adopt or continue the action of his predecessor.
June 10, 1998 and its effectivity date June 15, 1998.[6] (emphasis supplied)
It is clear from the above Rule that when petitioner ceased to be mayor of Santiago City, the
Meanwhile, the COMELEC disqualified Mayor Jose Miranda as a mayoralty candidate in the action may be continued and maintained by his successor, Mayor Amelita Navarro, if there is
1998 May elections. His son Joel G. Miranda, herein petitioner, substituted for him and was substantial need to do so.
proclaimed Mayor of Santiago City. He then filed a motion for reconsideration of the CSC
Resolution No. 982717 (in favor of respondents) but it was denied in the CSC Resolution No. Mayor Navarro, however, found no substantial need to continue and maintain the action of
990557 dated March 3, 1999. her predecessor in light of the CSC Resolution declaring that respondents services were illegally
terminated by former Mayor Jose Miranda. In fact, she filed with the Court of Appeals aMotion to
Petitioner then filed with the Court of Appeals a petition for review on certiorari, docketed as Withdraw the Motion for Reconsideration (lodged by petitioner). She likewise reinstated all the
CA-G.R. SP No. 36997. On May 21, 1999, the Court of Appeals rendered a Decision affirming in respondents to their respective positions and approved the payment of their salaries.
toto the CSC Resolution No. 982717. Forthwith, petitioner filed a motion for reconsideration, but
before it could be resolved by the Court of Appeals, several events supervened.This Court, in G.R. Petitioner insists though that as a taxpayer, he is a real party-in-interest and, therefore,
No. 136351, Joel G. Miranda vs. Antonio M. Abaya and the COMELEC, set aside the proclamation should continue and maintain this suit. Such contention is misplaced. Section 2, Rule 3 of the same
of petitioner as Mayor of Santiago City for lack of a certificate of candidacy and declared Vice Rules provides:
Mayor Amelita Navarro as City Mayor by operation of law.[7]
Section 2. Parties in interest. - A real party in interest is the party who stands to be benefited
On December 20, 1999, Mayor Navarro filed with the Court of Appeals a Motion to Withdraw or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless
the Motion for Reconsideration (previously submitted by former Mayor Joel G. Miranda). otherwise authorized by law or these Rules, every action must be prosecuted or defended in
On June 5, 2000, the Court of Appeals denied petitioners motion for reconsideration of its the name of the real party in interest. (emphasis supplied)
Decision.
Even as a taxpayer, petitioner does not stand to be benefited or injured by the judgment of
On June 11, 2000, the Court of Appeals granted Mayor Navarros Motion to Withdraw the the suit. Not every action filed by a taxpayer can qualify to challenge the legality of official acts
Motion for Reconsideration. In effect, the CSC Resolution reinstating respondents to their positions done by the government.[8] It bears stressing that a taxpayers suit refers to a case where the act
stays. complained of directly involves the illegal disbursement of public funds from
taxation.[9] The issue in this case is whether respondents services were illegally
Issue:
terminated. Clearly, it does not involve the illegal disbursement of public funds, hence,
WON CA erred in affirming the CSC Resolution declaring that the termination of respondents petitioners action cannot be considered a taxpayers suit.
services is illegal and ordering their reinstatement to their former positions with payment of
At any rate, to put to rest the controversy at hand, we shall resolve the issue of whether
backwages.
respondents services were illegally terminated by former Mayor Jose Miranda.
Held:In their comment, respondents claim that since petitioner ceased to be Mayor of Santiago
The 1987 Constitution provides that no officer or employee of the civil service shall be
City, he has no legal personality to file the instant petition and, therefore, the same should be
removed or suspended except for cause provided by law.[10] Under the Revised Administrative
dismissed. They insist that they were not actually evaluated on their performance. But assuming
Code of 1987, a government officer or employee may be removed from the service on two (2)
there was indeed such an evaluation, it should have been done by their immediate supervisors,
grounds: (1) unsatisfactory conduct and (2) want of capacity. While the Code does not define and
not by those appointed by former Mayor Jose Miranda.
delineate the concepts of these two grounds, however, the Civil Service Law (Presidential Decree
In his reply, petitioner contends that as a taxpayer, he has a legal interest in the case at bar, No. 807, as amended) provides specific grounds for dismissing a government officer or employee
hence, can lawfully file this petition. from the service. Among these grounds are inefficiency and incompetence in the performance of
official duties. In the case at bar, respondents were dismissed on the ground of poor
Section 17, Rule 3 of the 1997 Rules of Civil Procedure, as amended, provides: performance. Poor performance falls within the concept of inefficiency and incompetence in the
performance of official duties which, as earlier mentioned, are grounds for dismissing a
Sec. 17. Death or separation of a party who is a public officer. When a public officer is a party in government official or employee from the service.
an action in his official capacity and during its pendency dies, resigns or otherwise ceases to hold

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 But inefficiency or incompetence can only be determined after the passage of sufficient time, In fine, we hold that petitioner, not being a real party in interest, has no legal personality to
hence, the probationary period of six (6) months for the respondents. Indeed, to be able to gauge file this petition. Besides, his motion for reconsideration was validly withdrawn by the incumbent
whether a subordinate is inefficient or incompetent requires enough time on the part of his Mayor. Even assuming he is a real party in interest, we see no reason to disturb the findings of
immediate superior within which to observe his performance. This condition, however, was not both the CSC and the Court of Appeals. The reinstatement of respondents who, unfortunately,
observed in this case. As aptly stated by the CSC, it is quite improbable that Mayor Jose Miranda were victims of political bickerings, is in order.
could finally determine the performance of respondents for only the first three months of the
probationary period. WHEREFORE, the petition is DENIED. The assailed Decision dated May 21, 1999 of the
Court of Appeals in CA-G.R. SP No. 36997 is AFFIRMED.
Not only that, we find merit in respondents claim that they were denied due process. They
cited Item 2.2 (b), Section VI of the Omnibus Guidelines on Appointments and Other Personnel Treble costs against petitioner.
Actions (CSC Memorandum Circular No. 38, Series of 1993, as amended by CSC Memorandum 185.CRC AGRICULTURAL TRADING VS NLRC
Circular No. 12, Series of 1994) which provides:
Facts: The respondent alleged that the petitioners employed him as a driver sometime in
2.2. Unsatisfactory or Poor Performance 1985. The respondent worked for the petitioners until he met an accident in 1989, after which the
petitioners no longer allowed him to work. After six years, or in February 1995, the petitioners
again hired the respondent as a driver. Sometime in March 2003, the petitioners ordered
b. An official or employee who, for one evaluation period, is rated poor in performance,
respondent to have the alternator of one of its vehicles repaired. The respondent brought the
may be dropped from the rolls after due notice. Due notice shall mean that the
vehicle to a repair shop and subsequently gave the petitioners two receipts issued by the repair
officer or employee is informed in writing of the status of his performance
shop. The latter suspected that the receipts were falsified and stopped talking to him and giving
not later than the fourth month of that rating period with sufficient
him work assignments. The petitioners, however, still paid him P700.00 and P500.00 on April 15
warning that failure to improve his performance within the remaining
and 30, 2004, respectively, but no longer gave him any salary after that. As a result, the
period of the semester shall warrant his separation from the service. Such
respondent and his family moved out of the petitioner‘s compound and relocated to a nearby
notice shall also contain sufficient information which shall enable the employee to
place. The respondent claimed that the petitioners paid him a daily wage of P175.00, but did not
prepare an explanation.[11] (emphasis supplied)
give him service incentive leave, holiday pay, rest day pay, and overtime pay. He also alleged that
the petitioners did not send him a notice of termination.The petitioner‘s claimed that the
Respondents vehemently assert that they were never notified in writing regarding the status respondent was a seasonal driver; his work was irregular and was not fixed. The petitioners paid
of their performance, neither were they warned that they will be dismissed from the service should the respondentP175.00 daily, but under a no work no pay basis
they fail to improve their performance. Significantly, petitioner did not refute respondents
assertion. The records show that what respondents received was only the termination order from The Labor Arbiter, in his decision of April 15, 2005, ruled in the respondents favor
Mayor Jose Miranda. Obviously, respondents right to due process was violated. declaring that he had been illegally dismissed. The labor arbiter held that as a regular employee,
the respondents services could only be terminated after the observance of due process. The labor
Moreover, respondents contend that the only reason behind their arbitrary dismissal was arbiter likewise disregarded the petitioner‘s charge of abandonment against the respondent.
Mayor Jose Mirandas perception that they were not loyal to him, being appointees of then Acting
Mayor Navarro. This contention appears to be true considering that all those who were accepted The NLRC ruled that the respondent was not illegally dismissed and deleted the labor
and screened by the PSPB during the incumbency of Acting Mayor Navarro were rated to have arbiter‘s award of backwages and attorney‘s fees. The NLRC reasoned out that it was respondent
performed poorly by an audit team whose three members were personally picked by Mayor Jose himself who decided to move his family out of the petitioner‘s lot; hence, no illegal dismissal
Miranda. occurred. Moreover, the respondent could not claim wages for the days he did not work, as he
was employed by the petitioners under a no work no pay scheme.
The Constitution has envisioned the civil service to be a career service based on merit and
rewards system that will truly be accountable and responsive to the people and deserving of their The CA disregarded the petitioner‘s charge of abandonment against the respondent for
trust and support.[12] These noble objectives will be frustrated if the tenure of its members is their failure to show that there was deliberate and unjustified refusal on the part of the respondent
subject to the whim of partisan politics. A civil servant who lives in ceaseless fear of being to resume his employment. The CA also ruled that the respondents filing of a complaint for illegal
capriciously removed from office every time a new political figure assumes power will strive to do dismissal manifested his desire to return to his job, thus negating the petitioner‘s charge of
anything that pleases the latter. In this way, he will hardly develop efficiency, accountability and a abandonment.
sense of loyalty to the public service. Such a climate will only breed opportunistic, inefficient and
irresponsible civil servants to the detriment of the public. This should not be countenanced. Issue: Whether or not the respondent act constitutes abandonment.

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Held: In a dismissal situation, the burden of proof lies with the employer to show that the suggested that teller Descartin fill the shortage with a loan from her family. Teller Descartin replied
dismissal was for a just cause. In the present case, the petitioners claim that there was no illegal that her family did not have the money, she instead borrowed the amount from her in-laws. Thus,
dismissal, since the respondent abandoned his job. The petitioners point out that the respondent at 5:21 p.m., teller Descartin posted the unsigned withdrawal slip for the amount of P36,000.00
freely quit his work as a driver when he was suspected of forging vehicle parts receipts. against the joint account of her parents-in-law. As the amount exceeded the floor limit for tellers
Abandonment of work, or the deliberate and unjustified refusal of an employee to resume his which would require the approval of a superior officer, either Enriquez or Sia approved the
employment, is a just cause for the termination of employment under paragraph (b) of Article 282 transaction at 5:22 p.m. as reflected on the account records. Teller Descartin thereafter left the
of the Labor Code, since it constitutes neglect of duty. Abandonment is a matter of intention that bank to secure the signature of her mother-in-law Remedios and returned at past 7:00 p.m. with
cannot be lightly presumed from equivocal acts. To constitute abandonment, two elements must the signed withdrawal slip.
concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a
clear intent, manifested through overt acts, to sever the employer-employee relationship. The Petitioners received show-cause memos directing them to explain in writing why they should not
employer bears the burden of showing a deliberate and unjustified refusal by the employee to be sanctioned for conflict of interest and breach of trust. Petitioners were dismissed from
resume his employment without any intention of returning. employment on grounds of breach of trust and confidence and dishonesty.

In the present case, the petitioners did not adduce any proof to show that the respondent Issue: WON PETITIONERS WERE VALIDLY TERMINATED FROM EMPLOYMENT?
clearly and unequivocally intended to abandon his job or to sever the employer-employee Held: Yes. Loss of trust and confidence is a valid ground for termination of employment. Hence,
relationship. Moreover, the respondents filing of the complaint for illegal dismissal on June 22, the basic requisite for dismissal on the ground of loss of confidence is that the employee
2004 strongly speaks against the petitioners charge of abandonment; it is illogical for an employee concerned holds a position of trust and confidence or is routinely charged with the care and
to abandon his employment and, thereafter, file a complaint for illegal dismissal. custody of the employers money or property. Moreover, the breach must be related to the
186. Enriquez vs. BPI; GR No. 172812; February 12, 2008 performance of the employees function. Also, it must be shown that the employee is a managerial
Topic: Requisites of Willful Breach of Trust employee, since the term trust and confidence is restricted to said class of employees. In
Employer‘s Right reviewing this petition, we have fully taken into account the foregoing considerations.

The independent audit conducted by the auditing division of BPI notably supports her claim that
Facts: Enriquez and Sia were the branch manager and assistant branch manager, respectively, of the wrongdoing was concealed by petitioners from respondent bank. Moreover, a review of the
the BPI-Bacolod Singcang Branch. Enriquez was first employed by respondent bank thereof for 32 tellers transaction summary of teller Descartin reinforces the conclusion that the shortage in her
years at the time of her termination, whereas Sia had been in respondent banks employ for a total pico box was due to a temporary borrowing, the cover-up of which was sanctioned by petitioners.
of 29 years at the time of his dismissal.
BPIs policy on tellers shortages is unambiguous. It requires that all shortages be declared properly
and booked accordingly on the same day they are incurred. Furthermore, the same must be
Their branch experienced a heavy volume of transactions owing to the fact that it was the last reported by the branch head to the designated bank officers and departments not later than the
banking day of the year. When banking hours came to a close, teller Geraldine Descartin second banking day from the date of booking. Failure of petitioners to report the cash shortage of
(Descartin) purportedly discovered that she had a cash shortage of P36,000.00 and informed Sia teller Descartin, even if done in good faith, nonetheless resulted in their abetting the dishonesty
about it. Sia, in turn, informed Enriquez of the problem and was directed to review the days committed by the latter. Even assuming the version of petitioners as the truth, the fact remains
transactions to trace its cause. Descartin claimed that the discrepancy was due to an innocent that they willfully decided against reporting the shortage that occurred.
oversight and recalled that the unaccounted shortage was due to the failure of her mother-in-law, As a result, in either situation, petitioners acts have caused respondents to have a legitimate
Remedios Descartin (Remedios), to sign the withdrawal slip when the latter withdrew P36,000.00 reason to lose the trust reposed in them as senior managerial employees. Their participation in the
earlier that day. Descartin was permitted to leave the bank to look for Remedios so that the latter cover-up of the misconduct of teller Descartin makes them unworthy of the trust and confidence
could sign the withdrawal slip. At around 7:00 p.m., she returned to the bank with the signed demanded by their positions.
withdrawal slip and debited the amount from the clients account. Thus, petitioners aver, the
transaction was regularized before the end of the day. The power to dismiss an employee is a recognized prerogative that is inherent in the employers
right to freely manage and regulate his business. To compel respondent bank to keep petitioners
in its employ after the latter have betrayed the confidence given to them would be unjust to
Respondent, however, have a different version of what transpired on 27 December 2002. respondent bank. Their manifest condonation and even concealment of an offense prejudicial to
According to them, teller Descartin‘s shortage, was incurred because she had temporarily their employers interest committed by a subordinate under their supervision reflect a regrettable
borrowed the money that week to pay her financial obligations but intended to return the same on lack of loyalty which they should have reinforced, instead of betrayed.
the first week of January. Teller Fregil reported the matter to Sia and Enriquez, both of whom
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While the Constitution is committed to the policy of social justice and the protection of the working The high court ruled in affirmative that the records of the case are rife with proof that the
class, it should not be supposed that every labor dispute will be automatically decided in favor of supervisors committed acts which are inimical to the interests and stability, not only of
labor. Management also has its own rights which, as such, are entitled to respect and enforcement management, but of the company itself.1avThey did so, through deceitful means and methods.
in the interest of simple fair play. Out of its concern for those with less privileges in life, this Court The detailed account of what transpired between August 12 to 16, 2002 by Asuncion, Calderon,
has inclined more often than not toward the worker and upheld his cause in his conflicts with the the witnesses and the supervisors themselves were not only substantial proof of the grave
employer. infraction committed by them but indubitable proof of their anomalous acts.

Such favoritism, however, has not blinded us to the rule that justice is in every case for the Indeed, by obtaining an altered police report and medical certificate, petitioners deliberately
deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. attempted to cover up the fact that Sales was under the influence of liquor at the time the
accident took place. In so doing, they committed acts inimical to respondent‘s interests. They thus
187Dela Cruz Vs. Coca Cola Bottlers Phil., Inc. Gr no: 180465 July 31, 2009 committed a work-related willfull breach of the trust and confidence reposed in them.

Facts: On August 12, 2000, Raymund Sales (Sales), a salesman of Coca-Cola Bottlers Phils., Inc.
(respondent), figured in a motor vehicle accident while driving respondent‘s motor vehicle which 188. Sanden Aircon Philippines v. Rosales; G.R. No. 169260; March 23, 2011
he was then not authorized to use. Topic: Fraud/ Willful Breach of Trust

Sales was hospitalized in Lorma Medical Center in San Fernando, La Union where he was observed Facts: Sanden employed Loressa P. Rosales (Loressa) as Management Information System (MIS)
to have been under the influence of liquor at the time of the accident. The August 12, 2000 police Department Secretary. On December 26, 1996, she was promoted as Data Custodian and
blotter of the incident indeed indicates that Sales was under the influence of liquor. Coordinator. Loressas functions and authority include opening, editing and copying files in Sandens
After an initial investigation, respondent issued separate memoranda to its Sales Supervisor John computers. She was also charged with the duty of creating back-up copies of all files under her
F. Espina (Espina), and herein petitioners Sales Delivery Supervisor Raul M. Lacuata (Lacuata) and custody.For this purpose, she can request all computer users at a particular time to log out or exit
Sales Supervisor Eric David C. dela Cruz (dela Cruz) requiring them to explain why no disciplinary from the system.
action should be taken against them for violation of the Employees‘ Code of Disciplinary Rules and
Regulations vis-à-vis Article 282 of the Labor Code in connection with their production of the On May 16, 1997, Sanden discovered that the marketing delivery receipt transactions
August 15, 2000 police report and August 14, 2000 medical certificate which did not indicate full computer files were missing. The Internal Auditing Department, through its Audit Officer, Ernesto
details of the accident, and the use of the name of the General Manager in producing such reports. M. Bayubay (Ernesto), immediately sent a memorandum dated May 17, 1997 to Garrick L. Ang
(Garrick), the MIS Manager, requesting that a technical investigation be conducted. The
Further investigation conducted by respondent showed that Espina and petitioners conspired to investigation found that Loressa is the probable culprit, causing Atty. Reynaldo B. Destura (Atty.
have an "altered report" prepared to make it appear that Sales was not under the influence of Reynaldo), the Personnel and Administrative Services Manager to send a letter Loressa charging
liquor at the time of the accident. her with data sabotage and absences without leave (AWOL). On July 17, 1997, the husband of
Espina and petitioners were thereupon dismissed from employment, drawing them to file separate Loressa received a Notice of Disciplinary Action from Sanden notifying Loressa that management is
complaints for illegal suspension and dismissal against respondent. terminating Loressas employment effective upon receipt of the said communication. The reason
cited by Sanden was the loss of trust on her capability to continue as its Coordinator and Data
The Labor Arbiter dismissed Espina‘s complaint for lack of merit. De la Cruz was found to have Custodian.
been illegally dismissed, hence, his reinstatement, as well as payment to him of back wages, 13th
month pay, attorney‘s fees, and moral damages. On September 9, 1997, Loressa filed a complaint for illegal dismissal with a prayer for the
Respecting Lacuata, the Labor Arbiter found him to be at fault in "d[oing] nothing to stop Espina payment of 13thmonth pay, attorneys fees and other benefits. The Labor Arbiter ruled for Loressa,
from obtaining false police and medical reports," hence, respondent was justified in losing trust which the NLRC affirmed, but reversed later upon reconsideration. The CA affirmed the first
and confidence in him. Nevertheless, respondent was ordered to grant him back wages, 13th decision of the NLRC.
month pay, and separation pay.12
Issue: Whether or not Sanden legally terminated Loressas employment on the ground of willful
On appeal by respondent, the National Labor Relations Commission (NLRC) affirmed the Labor
breach of trust and confidence as Coordinator and Data Custodian?
Arbiter‘s decision but deleted the award of moral damages in favor of dela Cruz
Issue: whether or not in considering the alleged breach of confidence, if any there be, willful Held: NO. Article 282(c) of the Labor Code prescribes two separate and distinct grounds for
breach of confidence? termination of employment, namely: (1) fraud or (2) willful breach by the employee of the trust
Held: reposed in him by his employer or duly authorized representative. Settled is the rule that under
Article 282(c), the breach of trust must be willful. Ordinary breach will not suffice. "A breach is

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willful if it is done intentionally and knowingly without any justifiable excuse, as distinguished from pay and moral and exemplary damages before the Labor Arbiter.
an act done carelessly, thoughtlessly or inadvertently." In his Position Paper, the petitioner averred that in his 12 years of service with the company, he
was never subjected to any disciplinary action.
The first requisite for dismissal on the ground of loss of trust and confidence is that the employee
concerned must be holding a position of trust and confidence. In this case, Loressa, who had GTBI maintained that it had justifiable reason to lose trust in and dismiss the petitioner for
immediate access to Sandens confidential files, papers and documents, held a position of trust and having committed a dishonest act punishable under the company‘s Code of Conduct and Discipline
confidence as Coordinator and Data Custodian of the MIS Department. with termination from employment. The LA found the petitioner to have been illegally dismissed
and conferred great weight to his length of service for 12 years with GTBI and his unblemished
The second requisite is that there must be an act that would justify the loss of trust and record and held that such considerations render dismissal a disproportionate and harsh penalty to
confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a the mistake he committed.
willful breach of trust and founded on clearly established facts. The basis for the dismissal must be
clearly and convincingly established but proof beyond reasonable doubt is not necessary. Sandens The NLRC reversed the decision of the LA after GTBI submitted records of infractions
evidence against Loressa fails to meet this standard. committed by the petitioner before the incident in issue.On appeal, the CA upheld the NLRC‘s
conclusion. Hence, this appeal.
During the Administrative Investigation conducted by Sanden, there was no evidence presented to
prove that Loressa indeed committed "data sabotage."The Minutes of the Discussion with respect Issue: Whether or not the CA erred in upholding the evidence belatedly submitted by GTBI and in
to the May 16, 1997 data only made mention that "Bobots theory is that it was zapped, meaning ruling that the petitioner committed serious misconduct despite the absence of a wrongful intent in
permanently deleted."It is therefore a mere theory with no apparent factual basis, testimonial or the transgression that led to his dismissal.
documentary evidence, that would establish the guilt of Loressa for the charges of "data
sabotage." Held: The decision of the Court of Appeals was sustained.

On the other hand, Loressa was able to provide documentary evidence to show that Sandens The analogous factual findings of the CA and the NLRC conform to the foregoing
computer system was experiencing some problems even before May 16, 1997. guidelines. The punching of time card is undoubtedly work related. It signifies and records the
commencement of one‘s work for the day. It is from that moment that an employee dons the cape
Petition is DENIED. of duties and responsibilities attached to his position in the workplace. It is the reckoning point of
the employers corresponding obligation to him to pay his salary and provide his occupational and
189. ALVAREZ v. GOLDEN TRI BLOC, INC.; G.R. No. 202158; September 25, 2013 welfare protection or benefits. Any form of dishonesty with respect to time cards is thus no trivial
Topic: Just Causes: Fraud/ Wilfull Breach of Trust/ Totality Rule matter especially when it is carried out by a supervisory employee like the petitioner.

Facts:Petitioner was an Outlet Supervisor and was assigned to 3 Dunkin Donuts outlets located at The transgression imputed to the petitioner was likewise attended with willfulness. It must
San Roque, Cogeo and Super 8, Masinag, all in Antipolo City. be noted that the petitioner misled the labor tribunals in claiming that during his entire 12-year
The petitioner reported for duty at around 12:30 in the afternoon at Dunkin Donuts, Super 8, stint with GTBI, he was never meted with any disciplinary action. Records, however, disprove such
Masinag branch. Since his timecard was at the San Roque branch, he telephoned Chastine Kaye claim. Additional evidence were submitted by GTBI before the NLRC on appeal and as correctly
Sambo, shift leader, and requested her to "punch-in" his time card to reflect that he is already on ruled by the CA, the same may be allowed as the rules of evidence prevailing in courts of law or
duty. She obliged. Roland Salindog, the petitioner‘s senior officer called the Super 8, Masinag equity are not controlling in labor proceedings.
branch and verified that he has indeed reported for work.
The totality of infractions or the number of violations committed during the period of
The following day, however, the petitioner was informed by Sambo that both of them are employment shall be considered in determining the penalty to be imposed upon an erring
suspended and that he had to prepare an incident report regarding his time card.In his incident employee. The offenses committed by petitioner should not be taken singly and separately. Fitness
report he owned up to his fault and stated that he should have instead recorded the time of his for continued employment cannot be compartmentalized into tight little cubicles of aspects of
arrival by writing on the time card and that he should have brought it with him. He apologized and character, conduct and ability separate and independent of each other. While it may be true that
promised that a similar incident will not happen again. After the dialogue, petitioner was placed on petitioner was penalized for his previous infractions, this does not and should not mean that his
preventive suspension for 30 days without pay and thereafter terminated his employment on the employment record would be wiped clean of his infractions. After all, the record of an employee is
ground of loss of trust. a relevant consideration in determining the penalty that should be meted out since an employee's
past misconduct and present behavior must be taken together in determining the proper
Petitioner filed a complaint for illegal dismissal with claims for sick leave pay, separation imposable penalty. Despite the sanctions imposed upon petitioner, he continued to commit

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misconduct and exhibit undesirable behavior onboard. Indeed, the employer cannot be compelled acquired expertise because their jurisdiction is confined to specific matters, like the NLRC, are
to retain a misbehaving employee, or one who is guilty of acts inimical to its interests. It has the generally accorded not only respect but even finality and are binding upon the Court.
right to dismiss such an employee if only as a measure of self-protection.
Thus, petitioner's contention that both Skillpower, Inc., and Lippercon Services, Inc., should be
190 Magnolia Dairy Products Corp vs. NLRC AND JENNY CALIBO; G.R. No. 114952; Jan. considered the employer of private respondent because they have sufficient investments in the
29, 1996 form of tools, equipment, and machineries deserves scant consideration in view of the findings of
the Labor Arbiter and the NLRC.
FACTS:Petitioner, a division of San Miguel Corporation (SMC), entered into a contract of service
with Skillpower, Inc., a duly organized corporation engaged in the business of offering and 191. Nippon Housing Phil. Inc. vs Leynes
providing manpower services to the public. On June 11, 1983, Skillpower, Inc., assigned private
respondent Jenny A. Calibo to petitioner's Tetra Paster Division. Facts:NHPI hired Maiah Angela Leynes on March 26, 2001 for the position of Property Manager
for the Bay Gardens Condominium Project of the Bay Gardens Condominium Corporation, NHPI‘s
When petitioner's contract with Skillpower, Inc., expired, private respondent applied with first and only building and maintenance client.
Lippercon Services, Inc., also a corporation engaged in providing manpower services. In July 1987,
Lippercon Services, Inc., assigned her to petitioner's Tetra Paster Division as a cleaning aide. In On February 6, 2002, Leynes had a misunderstanding with Engr. HonestoCantuba, the Building
December 1987, she was terminated from service due to petitioner's installation of automated Engineer. This led to the former sending a letter to NHPI‘s Human Resources Department to
machines. apprise Engr. Cantuba of his supposed insubordination and disrespectful conduct. The NHPI‘s Vice
President attributed the incident as simple personal differences.
On July 11, 1989, private respondent instituted a complaint for illegal dismissal against petitioner.
In answer thereto, petitioner averred that it has no employer-employee relationship with private Disappointed with the foregoing management decision, Leynes submitted to Tadashi Ota,
respondent and that the dismissal was prompted by the installation of labor saving devices — an NHPI‘s President, a letter dated 12 February 2002, asking for an emergency leave of absence for
authorized cause for dismissal under the Labor Code. the supposed purpose of coordinating with her lawyer regarding her resignation letter. While NHPI
offered the Property Manager position to Engr. Carlos Jose on 13 February 2002 as a consequence
The Labor Arbiter ruled that a perusal of petitioner's contracts of service with Skillpower, Inc., and Leynes‘ signification of her intention to resign, it also appears that Leynes sent another letter to
Lippercon Services, Inc. reveals that the workers supplied by the two manpower corporations Reyes by telefax on the same day, expressing her intention to return to work on 15 February 2002
perform usual, regular and necessary services for petitioner's production of goods. and to call off her planned resignation upon the advice of her lawyer.Having subsequently reported
back for work and resumed performance of her assigned functions, Leynes was constrained to
In agreement with the Labor Arbiter‘s finding, the NLRC stated that – send out a 20 February 2002 written protest regarding the verbal information she supposedly
received from Reyes that a substitute has already been hired for her position.On 22 February
As borne by the evidence on record, respondents Skillpower and Lipercon were merely 2002, Leynes was further served by petitioner Yasuhiro Kawata and Noboyushi Hisada, NHPI‘s
agents of the respondent Magnolia and that the latter was the real employer. Senior Manager and Janitorial Manager, with a letter and memorandum from Reyes, relieving her
Consequently, the respondent Magnolia was responsible to the employee of the labor- from her position and directing her to report to NHPI‘s main office while she was on floating
only contract as if such employee had been directly employed by the employer. Thus, status.
where "labor only" contracting exists, as in the case at bar, the status itself implies or
establishes an employer-employee relationship between the employer and the employees Aggrieved, Leynes lost no time in filing against NHPI and its above-named officers the 22
of the "labor-only" contractor. The law in effect holds both the employer and the "labor February 2002 complaint for illegal dismissal, unpaid salaries, benefits, damages and attorney‘s
only" contractor responsible to the latter's employees for the more effective safeguarding fees docketed before the arbitral level of the National Labor Relations Commission (NLRC) as
of the employees' rights under the Labor Code. NLRC-NCR South Sector Case No. 30-02-01119-02. Against Leynes‘ claim that her being relieved
from her position without just cause and replacement by one Carlos Jose amounted to an illegal
ISSUE: Does employer-employee relationship exist between petitioner and private respondent? dismissal from employment, NHPI and its officers asserted that the management‘s exercise of the
prerogative to put an employee on floating status for a period not exceeding six months was
HELD: Yes. The existence of an employer-employee relationship is factual in nature and we give justified in view of her threatened resignation from her position and BGCC‘s request for her
due deference to the NLRC's findings in the absence of a clear showing of arbitrariness in its replacement. During the pendency of the case, however, Reyes eventually served the Department
appreciation of the evidence. Its findings in this case are fully supported by substantial evidence of Labor and Employment (DOLE) and Leynes with the 8 August 2002 notice terminating her
on record. Findings of fact of administrative agencies and quasi-judicial bodies which have services effective 22 August 2002, on the ground of redundancy or lack of a posting
commensurate to her position at the Project. Leynes was offered by NHPI the sum of P28,188.16
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representing her unpaid wages, proportionate 13th month pay, tax refund and service incentive Private respondents announced the adoption of an early retirement program as a cost-cutting
leave pay (SILP). measure considering that their business operations suffered major setbacks over the years. The
program was voluntary andcould be availed of only by employees with at least eight (8) years of
The Labor Arbiter ruled in favor of Leynes, but was reversed by the NLRC for lack of merit. service. The program was amended to reduce theminimum requirement of eight (8) years of
The CA reversed the NLRC decision. service to only five (5) years.

Issue: Whether or not the dismissal of Leynes on the ground of redundancy was valid. The response to the program was nil. There were only a few takers.To avert further losses, private
respondents were constrained to look into thecompanies' organizational set-up in order to
Held: Yes, her dismissal on the ground of redundancy was valid. streamline operations. Consequently, theearly retirement program was converted into a special
redundancy program intendedto reduce the work force to an optimum number so as to make
NHPI was acting well within its prerogatives when it eventually terminated Leynes‘ services on the operations more viable.
ground of redundancy. One of the recognized authorized causes for the termination of
employment, redundancy exists when the service capability of the workforce is in excess of what is The two companies sent letters to sixty-six (66) employees informing them that their respective
reasonably needed to meet the demands of the business enterprise. A redundant position is one positions had been declaredredundant. The notices likewise stated that their services would be
rendered superfluous by any number of factors, such as overhiring of workers, decreased volume terminatedeffective thirty (30) days from receipt thereof. Separation benefits, including
of business, dropping of a particular product line previously manufactured by the company or theconversion of all earned leave credits and other benefits due under existing CBAswere
phasing out of service activity priorly undertaken by the business. It has been held that the thereafter paid to those affected. A notice of strike was filed by the petitioners whichaccused
exercise of business judgment to characterize an employee‘s service as no longer necessary or private respondents, among others, of unfair labor practice, violation of CBAand discrimination.
sustainable is not subject to discretionary review where, as here, it is exercised there is no
showing of violation of the law or arbitrariness or malice on the part of the employer. An employer Issue:Whether the termination of the 66 employees under the special redundancy program is
has no legal obligation to keep more employees than are necessary for the operation of its valid?
business.
Held:The termination of the sixty-six employees wasvalid. It was done in accordance with
Considering that Leynes was terminated from service upon an authorized cause, we find Article 283 of the Labor Code. The basis for this was the companies' study tostreamline operations
that the CA likewise erred in faulting NHPI for supposedly failing to notify said employee of the so as to make them more viable. Positions which overlappedeach other, or which are in excess of
particular act or omission leveled against her and the ground/s for which she was dismissed from the requirements of the service, were declaredredundant.
employment. Where dismissal, however, is for an authorized cause like redundancy, the employer
is, instead, required to serve a written notice of termination on the worker concerned and the Article 283 provides:
DOLE, at least one month from the intended date thereof. Here, NHPI specifically made Leynes‘ Art. 283. Closure of establishment and reduction of personnel. —
termination from service effective 22 August 2002, but only informed said employee of the same The employer may also terminate the employment of any employee due to the installation
on 8 August 2002 and filed with the DOLE the required Establishment Termination Report only on of labor-saving devises, redundancy, retrenchment to prevent losses or the closing or
16 August 2002. For its failure to comply strictly with the 30-day minimum requirement for said cessation of operation of the establishment or undertakingunless the closing is for the
notice and effectively violating Leynes‘ right to due process, NHPI should be held liable to pay purpose of circumventing in the provisions of thistitle, by serving a written notice on the
nominal damages in the sum of P50,000.00. The penalty should understandably be stiffer because workers and the Department of Laborand Employment at least one (1) month before the
the dismissal process was initiated by the employer's exercise of its management prerogative. intended date thereof. In caseof retrenchment to prevent losses of operations of
establishment or undertakingnot due to serious business losses or financial reverses, the
192. Maya Farms Employees Organization v. NLRC; GR No. 106256; December 28, 1994 one (1) month pay orat least one-half (½) pay for every year of service, whichever is
Topic: Redundancy (Requisites) higher. Afraction of at least six (6) months shall be considered one (1) whole year.
Facts:Private respondents Maya Farms, Inc. and Maya Realty and LivestockCorporation belong to
the Liberty Mills group of companies whose undertakingsinclude the operation of a meat The SC agrees with the findings of the public respondent on the issue of termination to wit:
processing plant which produces ham, bacon, coldcuts, sausages and other meat and poultry
products. ―We sustain the companies' prerogative to adopt the allegedredundancy/retrenchment
program to minimize if not, to avert losses in the conduct of its operations. This has been
Petitioners, on the other hand, are the exclusive bargaining agents of the employees of Maya recognized in a line of cases. (WiltshireFile Co. vs. NLRC, G.R. No. L-82249, February 7, 1991).
Farms, Inc. and the Maya Realty and Livestock Corporation. However, thecompanies' decision on this matter is not absolute. The basis for such an actionmust
be far from being whimsical and the same must be proved by substantialevidence. In addition, the

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implementation of such a decision or policy must be in accordance with existing laws, rules and in an employer‘s personnel force necessarily or even ordinarily refers to duplication of work. That
procedure and provisions of theCBA between the parties, if there be any. Short of any of these no other person was holding the same position that private respondent held prior to termination of
conditions,management policy to pursue and terminate its employees allegedly to avertlosses, his services does not show that his position had not become redundant. Indeed, in any well-
must fail. organized business enterprise, it would be surprising to find duplication of work and two (2) or
more people doing the work of one person. We believe that redundancy, for purposes of the Labor
In subject case, the 66 complaining employees were separated from services as a result of the Code, exists where the services of an employee are in excess of what is reasonably demanded by
decision of management to limit its operations andstreamline positions and personnel the actual requirements of the enterprise. Succinctly put, a position is redundant where it is
requirements. superfluous, and superfluity of a position or positions may be the outcome of a number of factors,
such as overhiring of workers, decreased volume of business, or dropping of a particular product
A close examination of the positions retained by management show thatsaid positions such as egg line or service activity previously manufactured or undertaken by the enterprise. The
sorter, debonner were but the minimal positionsrequired to sustain the limited characterization of an employees‘ services as superfluous or no longer necessary and, therefore,
functions/operations of the meat processingdepartment. In the absence of any evidence to prove properly terminable, is an exercise of business judgment on the part of the employer. The wisdom
bad faith on the part ofmanagement in arriving at such decision, which records on hand failed to and soundness of such characterization or decision is not subject to discretionary review provided,
showin instant case, the rationality of the act of management in this regard must besustained.‖ of course, that a violation of law or arbitrary or malicious action is not shown. While it is true that
the ―characterization of an employee‘s services as superfluous or no longer necessary and,
193. Smart Communications Inc vs Astorga; GR No. 148132; January 28, 2008 therefore, properly terminable, is an exercise of business judgment on the part of the employer,‖
Topic: Redundancy the exercise of such judgment, however, must not be in violation of the law, and must not be
arbitrary or malicious. The Court has always stressed that a company cannot simply declare
Facts:Regina M. Astorga was employed by respondent Smart Communications, Incorporated redundancy without basis. To exhibit its good faith and that there was a fair and reasonable
(SMART) on May 8, 1997 as District Sales Manager of the Corporate Sales Marketing Group/ Fixed criteria in ascertaining redundant positions, a company claiming to be over manned must produce
Services Division (CSMG/FSD). As District Sales Manager, Astorga enjoyed additional benefits, adequate proof of the same
namely, annual performance incentive equivalent to 30% of her annual gross salary, a group life
and hospitalization insurance coverage, and a car plan in the amount of P455,000.00. 194. VIRGILIO G. ANABEvs.ASIAN CONSTRUCTION (ASIAKONSTRUKT), ZENAIDA P.
ANGELES AND N.O. GARCIA; G.R. No. 183233, December 23, 2009
In February 1998, SMART launched an organizational realignment to achieve more efficient
operations. Part of the reorganization was the outsourcing of the marketing and sales force. Thus, FACTS: Virgilio G. Anabe (petitioner) was hired by respondent Asian Construction (Asiakonstrukt)
SMART entered into a joint venture agreement with NTT of Japan, and formed SMART-NTT as radio technician/operator on April 15, 1993. By notice dated September 8, 1999, he was
Multimedia, Incorporated (SNMI). Since SNMI was formed to do the sales and marketing work, advised that his services would be, as he was in fact, terminated effective October 8, 1999 on the
SMART abolished the CSMG/FSD, Astorga‘s division. ground of retrenchment. Petitioner thus filed on February 10, 2000 a complaintfor illegal dismissal
and illegal deduction and payment of overtime pay, premium pay, holiday pay, service incentive
leave pay, and 13th month pay.
To soften the blow of the realignment, SNMI agreed to absorb the CSMG personnel who would be
recommended by SMART. SMART then conducted a performance evaluation of CSMG personnel
Asiakonstrukt, attributing petitioner‘s retrenchment to sudden business reversal in the construction
and those who garnered the highest ratings were favorably recommended to SNMI. Astorga
industry, averred, however, that petitioner‘s money claims have been offset against his
landed last in the performance evaluation, thus, she was not recommended by SMART. SMART,
outstanding accountabilities.
nonetheless, offered her a supervisory position in the Customer Care Department, but she refused
the offer because the position carried lower salary rank and rate.
The Labor Arbiter ruled that petitioner was not validly dismissed because Asiakonstrukt failed to
submit financial statements to prove losses.
Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. But on March 3,
1998, SMART issued a memorandum advising Astorga of the termination of her employment on On appeal, the National Labor Relations Commission (NLRC), taking into consideration the certified
ground of redundancy, effective April 3, 1998. true copies of the Audited Financial Statements from 1998 to 2000 submitted by Asiakonstrukt,
partly granted the appeal by Resolution of March 10, 2004. It modified the Labor Arbiter‘s Decision
Issue: Whether the termination of Astorga‘s employment constitutes illegal dismissal. by holding that petitioner was not illegally dismissed.

Held: No. The nature of redundancy as an authorized cause for dismissal is explained in the Petitioner‘s motion for reconsideration having been denied by Resolution of April 2, 2008, he filed
leading case of Wiltshire File Co., Inc. v. National Labor Relations Commission, viz: ―redundancy the present petition, maintaining that he was illegally dismissed as Asiakonstrukt failed to prove

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that it was suffering business losses to warrant a valid retrenchment of its employees; and under the law, for the period 1998-2000 and 2003-2005, thereby lending credence to petitioner‘s
Asiakonstrukt belatedly submitted financial statements were not shown to be newly found theory that the financial statements submitted on appeal may have been fabricated. Indeed,
evidence and unavailable during the proceedings before the Labor Arbiter to thus cast doubts as to Asiakonstrukt could have easily submitted its audited financial statements during the pendency of
their veracity. the proceedings at the labor arbiter‘s level, especially considering that it was in late 2001 that the
case was decided.
ISSUE: Whether Asiakonstrukt proved that it was suffering business losses to warrant a valid
retrenchment? For failure then of Asiakonstrukt to clearly and satisfactorily substantiate its financial lossesthe
dismissal of petitioner on account of retrenchment is unjustified
HELD: NO.
195. Lambert pawn brokers vs Binamira
Retrenchment is the termination of employment initiated by the employer through no fault of and
without prejudice to the employees, it is resorted to during periods of business recession, Petitioner Lambert Lim (Lim) is a Malaysian national operating various businesses in
industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage Cebu and Bohol one of which is Lambert Pawnbrokers and Jewelry Corporation. Lim is married to
of materials, conversion of the plant for a new production program or the introduction of new Rhodora Binamira, daughter of Atty. Boler Binamira, Sr., (Atty. Binamira), who is also the counsel
methods or more efficient machinery or of automation. It is a management prerogative resorted and father-in-law of respondent Helen Binamira (Helen). Lambert Pawnbrokers and Jewelry
to, to avoid or minimize business losses,8 and is recognized by Article 283 of the Labor Code. Corporation Tagbilaran Branch hired Helen as an appraiser in July 1995 and designated her as
Vault Custodian.
To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is On September 14, 1998, Helen received a letter[5] from Lim terminating her employment effective
reasonably necessary and likely to prevent business losses which, if already incurred, are not that same day. Lim cited business losses necessitating retrenchment as the reason for the
merely de minimis, but substantial, serious, and real, or only if expected, are reasonably imminent termination.
as perceived objectively and in good faith by the employer; (2) the employer serves written notice
both to the employee/s concerned and the Department of Labor and Employment at least a month Helen thus filed a case for illegal dismissal against petitioners
before the intended date of retrenchment; (3) the employer pays the retrenched employee
separation pay in an amount prescribed by the Code; (4) the employer exercises its prerogative to HELD: To effect a valid retrenchment, the following elements must be present: (1) the
retrench in good faith; and (5) the employer uses fair and reasonable criteria in ascertaining who retrenchment is reasonably necessary and likely to prevent business losses which, if already
would be retrenched or retained. incurred, are not merely de minimis, but substantial, serious and real, or only if expected, are
reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer
The losses must be supported by sufficient and convincing evidence, the normal method of serves written notice both to the employee/s concerned and the DOLE at least one month before
discharging which is the submission of financial statements duly audited by independent external the intended date of retrenchment; (3) the employer pays the retrenched employee separation
auditors. pay in an amount prescribed by the Code; (4) the employer exercises its prerogative to retrench in
good faith; and (5) the employer uses fair and reasonable criteria in ascertaining who would be
In the present case, Asiakonstrukt failed to submit its audited financial statements within the two retrenched or retained.
years that the case was pending before the Labor Arbiter. It submitted them only after it received
Illegal dismissal; relief available to employee. An illegally dismissed employee is entitled to
the adverse judgment of the Labor Arbiter.
reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive
of allowances, and to her other benefits or their monetary equivalent, computed from the time the
Indubitably, the NLRC is not precluded from receiving evidence on appeal as technical rules of
compensation was withheld up to the time of actual reinstatement. Where reinstatement is no
evidence are not binding in labor cases. There is, however, a caveat to this policy. The delay in the
longer feasible, separation pay equivalent to at least one month salary or one month salary for
submission of evidence should be clearly explained and should adequately prove the employer‘s
every year of service, whichever is higher, a fraction of at least six months being considered as
allegation of the cause for termination. In the present case, Asiakonstrukt proffered no explanation
one whole year, should be awarded to respondent. An award for moral and exemplary damages
behind the belated submission. And the financial statementsit submitted covered the period 1998-
cannot be justified unless the employer had acted in bad faith. The award of moral and exemplary
2000. Further, note that the audited financial statement covering the period 1998-2000 was
damages cannot be justified solely upon the premise that the employer dismissed his employee
prepared in April 2001, which begs the question of how the management knew at such date of the
without authorized cause and due process.
company‘s huge losses to justify petitioner‘s retrenchment in 1999.
196.Ruben L. Andrada et al. vs. National Labor Relations Commission
Furthermore, from the certification issued by the Securities and Exchange Commission (SEC), it
G.R. No. 173231, December 28, 2007
would appear that Asiakonstrukt failed to submit its financial statements to the SEC, as required
TOPIC: Illegal Dismissal; Valid Retrenchment
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FACTS: The petitioners in this case, whose names appear in the title, are employees of Subic It held that a company‘s prerogative is not absolute. It cannot exercise its prerogative in a cruel,
legend Resorts and Casino, Inc. who were hired on various dates from 1995 up to 1997 working as repressive, or despotic manner. In the case of Ariola vs. Philex Mining Corporation, the following
architects, draftsmen, operators, engineers, and surveyors in the Project Development Division on are requirements of a valid retrenchment:
various projects. Herein respondents Mr. Hwa Puay and Ms. Flordeliza Maria Reyes Rayel are
impleaded in this case in their official capacities as officers of said resort and casino. 1. It is undertaken to prevent losses, which are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent as perceived objectively and in good
On January 6, 1998, Subic Legend Resorts and Casino, Inc. decided to retrench and faith by the employer
terminate the employment of some thirty four (34) employees including herein petitioners sending
notice of such action to the Department of Labor and Employment. Legend has undertaken this 2. The employer serves written notice both to the employees and the DOLE at least one month
action on the strength of the updated status report of its Project Development Division, as follows: prior to the intended date of retrenchment

1. shelving of the condotel project until economic conditions in the Philippines improve. 3. The employer pays the retrenched employees separation pay equivalent to one month pay
2. completion of the temporary casino in Cubi by Mid-February 1998 or at least ½ month pay for every year of service, whichever is highter.
3. subcontracting the super structure work of Grand Legend to a third party The court further added that the employer must use fair and reasonable criteria in ascertaining
4. completion of the rectification work at the Legenda hotel who would be dismissed and retained among the employees and that the retrenchment must be
5. completion of the temporary casino in Cubi undertaken in good faith.
6. abolition of the Personnel and Administrative department of the Project Development
division and transfer of its function back to Legend‘s Human Resource Department. Supreme Court held that in the instant case, Legend glaringly failed to show its financial
For the same reasons, Legend sent to the 34 employees the notices of retrenchment and offering conditions prior to and at the time it enforced its retrenchment program. Furthermore, it failed to
them retrenchment options. After they have chosen their options they signed a quitclaim reserving submit audited financial statements regarding its alleged financial losses. Thus, the retrenchment
the right to sue should their separation benefits not be settled by January 30, 2008. was illegal.
On that same day, Labor and Employment Center of Subic Bay Metropolitan Authority advertised On the issue of redundancy, Supreme Court held that Legend failed to establish it as such. It
that Legend International Resorts, Inc. was in need of employees for the positions which were further explains that retrenchment and redundancy are two different concepts. The difference of
very much similar to those vacated by the petitioners. which were clearly elaborated in the case of Sebuguero vs. NLRC. To simply put it, redundancy
according to the Supreme Court exists when the number of employees is in excess of what is
On March 3, 1998, fourteen (14) of the 34 retrenched employees filed before the Regional reasonably necessary to operate the business.
Arbitration Branch of the NLRC in San Fernando, Pampanga a complaint for illegal dismissal based
on the advertisement made by the Subic Bay Metropolitan Authority saying that Legend have Thus, the Supreme Court finally held, that the basis for retrenchment was not established by
created positions similar to those which they have vacated. Legend however, invoked management substantial evidence and it also ruled that Legend failed to establish by the same quantum of proof
prerogatives. the fact of redundancy; hence the petitioners‘ termination from employment was illegal.
The Labor Arbiter decided that the petitioners were illegally dismissed on the ground of 197. COMPOSITE ENTERPRISES INC v CAPAROSO
insufficiency of documents showing that legend had suffered actual losses or that there were RETRENCHMENT (REQUISITES)
redundancy of positions as occupied by the petitioners. Legend then appealed the decision to the
National Labor Relations which reversed the decision. Petitioner is engaged in the distribution and/or supply of confectioneries to various retail
establishments within the Philippines.
Herein petitioners appealed the NLRC decision to the Court of Appeals. The latter however Emilio Caparoso and Joeve P. Quindipan(respondents) were employed as its deliverymen until they
sustained the CA‘s ruling and held that the employees were validly terminated from employment were terminated on October 8, 1999.
due to redundancy and not retrenchment. Aggrieved with the CA‘s decision, the above petitioners
appealed to the Supreme Court. Respondents filed a complaint for illegal dismissal against petitioner with the National Labor
Relations Commission (NLRC).
ISSUE: Whether or not the complainants were illegally dismissed. Corollary, was there a valid
retrenchment. Labor Arbiter Napoleon M. Menese (Labor Arbiter)rendered a Decision in favor of the respondents
ordering COMPOSITE ENTERPRISES CORPORATION to immediately reinstate complainants to their
RULING: YES, there was illegal dismissal. NO, there was no valid retrenchment. respective former position without loss of seniority rights and other privileges, with full backwages
from the date of dismissal up to the actual date of reinstatement.

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Petitioner filed its Appeal with the NLRC. It also filed a Manifestation with Motion manifesting that
it cannot reinstate respondents to their former positions since their previous positions were no Respondent MY San informed its employees and union that they intend to sell the company to
longer available. Accordingly, petitioner moved that it be allowed to pay respondents separation respondent Monde and that MY San will terminate their employment and payment of their
pay in lieu of reinstatement. separation pay will be in accordance with the law. In connection with this event, the union and MY
San agreed that a list of MY San employees will be submitted to respondent Monde purposes of
Upon adverse judgment, petitioner filed a Petition for Certiorari with the CA which dismissed the rehiring if said employee applies and qualifies, subject to such criteria as the new corporation may
same. Hence, the present petition. impose. Respondent Monde then commenced its operations. All the former employees of
 Petitioner anchored its petition on the ground that the NLRC gravely abused its discretion respondent M.Y. San who were terminated upon its closure and who applied and qualified for
in affirming the Order of the Labor Arbiter which directed petitioner to pay respondents' probationary employment, including petitioners herein, started working for respondent Monde on a
accrued salaries. Petitioner insists that the NLRC should have ordered the payment of contractual basis for a period of six months. Subsequently, petitioners were terminated on various
separation pay since respondents' reinstatement to their former positions was physically dates.
impossible due to petitioner's implementation of a retrenchment program.
Thus, petitioners filed a complaint for illegal dismissal and underpayment, damages and attorney‘s
ISSUE: Whether there was indeed a retrenchment program so as to warrant the fees and litigation cost with the NLRC- RAB.
payment of separation pay in lieu of reinstatement
Petitioners alleged that respondent My San stopped its operations, but three days after, resumed
SC: NO! its operation with the same top management running the business; the union officers, in exchange
for being re-hired, acceded to bust the union; and the sale of respondent M.Y. San to respondent
XXX As regards retrenchment, it is a management prerogative consistently recognized and Monde was merely a ploy to circumvent the provisions of the Labor Code.
affirmed by this Court. It is, however, subject to faithful compliance with the substantive and
procedural requirements laid down by law and jurisprudence. For retrenchment to be considered Respondent M.Y. San insisted that its employer-employee relationship with petitioners had ceased
valid, the following substantial requirements must be met: (a) the losses expected should be to exist, thus, the complaint for illegal dismissal against it could no longer prosper. It further
substantial and not merely de minimis in extent; (b) the substantial losses apprehended must be contended that the power to hire and fire employees is now lodged in the new business owner,
reasonably imminent such as can be perceived objectively and in good faith by the employer; (c) respondent Monde.
the retrenchment must be reasonably necessary and likely to effectively prevent the expected
losses; and (d) the alleged losses, if already incurred, and the expected imminent losses sought to On the other hand, respondent Monde alleged that petitioners had no cause of action against it.
be forestalled, must be proved by sufficient and convincing evidence. Monde claimed that the respective supervisors of Monde conducted an evaluation of the
performance of all its probationary employees, including herein complainants, to determine their
In the discharge of these requirements, it is the employer who has the onus, this being in
fitness to qualify as regular employees therein. The probationary employees of Monde who passed
the nature of an affirmative defense. In other words, it is not enough for a company to merely
the performance appraisal and who qualified as regular employees thereof were accordingly
declare that it has implemented a retrenchment program. It must produce adequate proof that
appointed as such. Out of the one hundred sixteen (116) probationary employees engaged by
such is the actual situation to justify the retrenchment of employees. Normally, the condition of
respondent Monde, a total of seventy-four employees qualified for regular employment. For those
business losses is shown by audited financial documents like yearly balance sheets, profit and loss
who did not qualify for regular employment, including herein complainants, respondent Monde
statements and annual income tax returns. The financial statements must be prepared and signed
gave complainants the remainder of their probationary period within which to prove their
by independent auditors, failing which these can be assailed as self-serving documents.
qualification for regular employment therewith. Notwithstanding the opportunity given to herein
In this case, petitioner sought to justify the payment of separation pay instead of complainants to improve their performance to qualify for regular employment with Monde,
reinstatement on the basis of its implementation of a retrenchment program for serious and complainants either: (a) resigned from their employment with Monde; (b) refused to report for
persistent financial difficulties. However, petitioner only submitted as evidence the notice of its work on 02 May 2001 and on the days following; or (c) failed to qualify for regular employment at
intention to implement a retrenchment program, which it sent to the Department of Labor and the expiration of the period of their probationary employment.
Employment on July 25, 2000. It did not submit its financial statements duly audited by an
independent external auditor. Its failure to do so seriously casts doubt on its claim of losses and ISSUE Whether or not petitioners were illegally dismissed.
insistence on the payment of separation pay.
HELD The SC held that petitioners were validly dismissed. Petitioners were validly separated from
The Court finds that the NLRC did not commit any grave abuse of discretion in issuing the Order
respondent MY San.
dated June 28, 2002, affirming the Order of the Labor Arbiter dated June 14, 2001.

198. Espina vs. CA; GR No. 164582; March 28, 2007

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Work is a necessity that has economic significance deserving legal protection. The provisions on Procedural due process requires that the employee be given two written notices before he is
social justice and protection to labor in the Constitution dictate so. However, employers are also terminated, consisting of a notice which apprises the employee of the particular acts/omissions for
accorded rights and privileges to assure their self-determination and independence and reasonable which the dismissal is sought and the subsequent notice which informs the employee of the
return of capital. This mass of privileges comprises the so-called management prerogatives. One employer‘s decision to dismiss him.
of the rights accorded an employer is the right to close an establishment or undertaking. Just as
no law forces anyone to go into business, no law can compel anybody to continue the same. The In the case at bar, petitioners were notified of the standards they have to meet to qualify as
right to close the operations of an establishment or undertaking is explicitly recognized under the regular employees of respondent Monde when the latter apprised them, at the start of their
Labor Code as one of the authorized causes in terminating employment of workers, the only employment.
limitation being that the closure must not be for the purpose of circumventing the provisions on
terminations of employment embodied in article 283 of the Labor Code. Some of the petitioners in this case voluntarily resigned (Barnuevo, Reyes, Ollorsa, and Cerbito),
some were validly dismissed because of Absence Without Leave (Espina, Aquino, Bandino, Petalio,
Under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of Jr., Ebreo, B. Paz, Deocareza and L. Paz), while some others were terminated because they failed
business operations, namely: to qualify as regular employees in accordance with the terms and conditions of their probationary
(1) service of a written notice to the employees and to the DOLE at least one (1) month before employment with respondent Monde (Celis, Fernandez, Rodriguez, Punzalan, Lourdes Alfonso Q.,
the intended date thereof; Panlilio, Arceo, Pascual, Bajo, Blanco, Abela, Fajanilag, and Wong).
(2) the cessation must be bona fide in character; and
(3) payment to the employees of termination pay amounting to at least one half (1/2) month pay It must be noted that petitioners were terminated prior to the expiration of their probationary
for every year of service, or one (1) month pay, whichever is higher. contracts. As probationary employees, they enjoyed only temporary employment status. In
general terms, this meant that they were terminable anytime, permanent employment not having
The records reveal that private respondent M.Y. San complied with the aforecited requirements. been attained in the meantime. The employer could well decide if he no longer needed the
M.Y. San employees were adequately informed of the intended business closure and a written probationary‘s service or his performance fell short of expectations, as a probationary employee is
notice to the Regional Director of DOLE was filed by respondent M.Y. San, informing the DOLE that one who, for a given period of time, is under observation and evaluation to determine whether or
M.Y. San will be closed effective 31 January 2001. not he is qualified for permanent employment. During the probationary period, the employer is
given the opportunity to observe the skill, competence and attitude of the employee to determine
The ultimate test of the validity of closure or cessation of establishment or undertaking is that it if he has the qualification to meet the reasonable standards for permanent employment. The
must be bona fide in character. And the burden of proving such falls upon the employer. length of time is immaterial in determining the correlative rights of both the employer and the
employee in dealing with each other during said period. Thus, as long as the termination was
Respondent M.Y. San in good faith complied with the requirements for closure; sold and conveyed made before the expiration of the six-month probationary period, the employer was well within his
all its assets to respondent Monde for valuable consideration; and there were no previous labor rights to sever the employer-employee relationship. A contrary interpretation would defeat the
problems. It has been ruled that an employer may adopt policies or changes or adjustments in clear meaning of the term ―probationary.‖
the operations to insure profit to itself or protect the investments of its stockholders, and in the
exercise of such management prerogative, the employer may merge or consolidate its business Terminating employment is one of respondent Monde‘s prerogatives. As an employer, respondent
with another, or sell or dispose all or substantially all of its assets and properties which may bring Monde has the right to regulate, according to its discretion and best judgment, including work
about the dismissal or termination of its employees in the process. assignment, working methods, processes to be followed, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers.
Petitioners were also validly dismissed by respondent Monde. Management has the prerogative to discipline its employees and to impose appropriate penalties
on erring workers pursuant to company rules and regulations.
There is no dispute that petitioners were probationary employees as stated in their individual
contracts of employment with respondent Monde. While petitioners were only probationary This Court has upheld a company‘s management prerogatives so long as they are exercised in
employees who do not enjoy permanent status, nonetheless, they were still entitled to the good faith for the advancement of the employer‘s interest and not for the purpose of defeating or
constitutional protection of security of tenure. As may be gleaned in article 281 of the Labor Code, circumventing the rights of the employees under special laws and valid agreements.
their employment may only be terminated for a valid and just cause or for failing to qualify as a
regular employee in accordance with the reasonable standards made known to him by the The law imposes many obligations on the employer such as providing just compensation to
employer at the time of engagement and after being accorded due process. workers, observance of the procedural requirements of notice and hearing in the termination of
employment. On the other hand, the law recognizes the right of the employer to expect from its
workers not only good performance, adequate work and diligence, but also good conduct and

148
loyalty. The employer may not be compelled to continue to employ such persons whose The Labor Arbiter rendered a decision in favour of the complainants. On appeal,
continuance in the service will patently be inimical to his interest. respondent NLRC affirmed the decision in toto.

Thus, respondent Monde exercised in good faith its management prerogative as there is no Issue: Whether or not a company which is forced by huge business losses to close its business,
dispute that petitioners had been habitually absent, neglectful of their work, and rendered legally required to pay separation benefits to its employees at the time of its closure in an amount
unsatisfactory service, to the damage and prejudice of the company. equivalent to the separation pay paid to those who were separated when the company was still a
going concern?
The decision of the NLRC was affirmed.
Held: NO. Art. 283 of the Labor Code does not obligate an employer to pay separation
199. North Davao Mining Corporation vs. NLRC, 254 SCRA 721,
benefits when the closure is due to losses. In the case before us, the basis for the claim of the
G.R. No. 112546, March 13, 1996
additional separation benefit of 17.5 days is alleged discrimination, i.e., unequal treatment of
employees, which is proscribed as an unfair labor practice by Art. 248 (e) of said Code.
Topic: Closure of business operations not due to serious business losses
Art. 283 of the Labor Code does not obligate an employer to pay separation benefits when the Under the facts and circumstances of the present case, the grant of a lesser amount of separation
closure is due to losses. pay to private respondent was done, not by reason of discrimination, but rather, out of sheer
financial bankruptcy—a fact that is not controlled by management prerogatives. Stated differently,
Facts:Respondent Wilfredo Guillema is one among several employees of North Davao who were the total cessation of operation due to mind-boggling losses was a supervening fact that prevented
separated by reason of the company's closure on May 31, 1992, and who were the complainants in the company from continuing to grant the more generous amount of separation pay. The fact that
the cases before the respondent labor arbiter. North Davao at the point of its forced closure voluntarily paid any separation benefits at all—
although not required by law—and 12.5 days‘ worth at that, should have elicited admiration
On May 31, 1992, petitioner North Davao completely ceased operations due to serious instead of condemnation. But to require it to continue being generous when it is no longer in a
business reverses. From 1988 until its closure in 1992, North Davao suffered net losses averaging position to do so would certainly be unduly oppressive, unfair and most revolting to the
three billion pesos (P3,000,000,000.00) per year, for each of the five years prior to its closure. All conscience.
told, as of December 31, 1991, or five months prior to its closure, its total liabilities had exceeded 200. AGABON VS. NLRC; G.R. No. 158693; November 17, 2004
its assets by 20,392 billion pesos, as shown by its financial statements audited by the Commission
on Audit. When it ceased operations, its remaining employees were separated and given the FACTS: Virgilio and Jenny Agabon worked for respondent Riviera Home Improvements, Inc. as
equivalent of 12.5 days' pay for every year of service, computed on their basic monthly pay, in gypsum and cornice installers from January 1992 until Feb 1999. Their employment was
addition to the commutation to cash of their unused vacation and sick leaves. terminated when they were dismissed for allegedly abandoning their work. Petitioners Agabon
then filed a case of illegal dismissal. The LA ruled in favor of the spouses and ordered Riviera to
However, it appears that, during the life of the petitioner corporation, from the beginning pay them their money claims. The NLRC reversed the LA, finding that the Agabons were indeed
of its operations in 1981 until its closure in 1992, it had been giving separation pay equivalent to guilty of abandonment. The CA modified the LA by ruling that there was abandonment but
thirty (30) days' pay for every year of service. Moreover, inasmuch as the region where North ordering Riviera to pay the Agabons‘ money claims.
Davao operated was plagued by insurgency and other peace and order problems, the employees
had to collect their salaries at a bank in Tagum, Davao del Norte, some 58 kilometers from their The arguments of both parties are as follows:
workplace and about 2 1/2 hours' travel time by public transportation; this arrangement lasted The Agabons claim, among others that Riviera violated the requirements of notice and hearing
from 1981 up to 1990. when the latter did not send written letters of termination to their addresses.
Riviera admitted to not sending the Agabons letters of termination to their last known addresses
Subsequently, a complaint was filed with respondent Labor Arbiter by respondent Wilfredo because the same would be futile, as the Agabons do not reside there anymore. However, it also
Guillema and 271 other separated employees for: (1) additional separation pay of 17.5 days for claims that the Agabons abandoned their work. More than once, they subcontracted installation
every year of service; (2) back wages equivalent to two days a month; (3) transportation works for other companies. They already were warned of termination if the same act was
allowance; (4) hazard pay; (5) housing allowance; (6) food allowance; (7) post-employment repeated, still, they disregarded the warning.
medical clearance; and (8) future medical allowance, all of which amounted to P58,022,878.31 as
computed by private respondent. ISSUES
1. Whether the Agabons were illegally dismissed
2. Whether Riviera violated the requirements of notice and hearing

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3. Is the violation of the procedural requirements of notice and hearing for termination of civil, criminal and administrative proceedings; statutory due process is that found in the
employees a violation of the Constitutional due process? Labor Code and its Implementing Rules and protects the individual from being unjustly
4. What are the consequences of violating the procedural requirements of termination? terminated without just or authorized cause after notice and hearing.

RULING: The two are similar in that they both have two aspects: substantive due process and
Valid dismissal but violation of statutory due process = payment of nominal damages procedural due process. However, they differ in that under the Labor Code, the first one
(P30,000) & balance of 13th month pay, etc. refers to the valid and authorized causes of employment termination, while the second one
refers to the manner of dismissal. A denial of statutory due process is not the same as a denial
1. No. There was just cause for their dismissal, i.e., abandonment. Art. 282 specifies the grounds of Constitutional due process for reasons enunciated in Serrano v. NLRC.
for just dismissal, to wit:
a. Serious misconduct or willful disobedience of the lawful orders of the employer or his duly 4. The dismissal is valid, but Riviera should pay nominal damages to the Agabons in vindication
authorized representative in connection with the employee‘s work of the latter for violating their right to notice and hearing. The penalty is in the nature of a
b. Gross and habitual neglect of the by the employee of his duties (includes penalty or indemnification, the amount dependent on the facts of each case, including the
abandonment) nature of gravity of offense of the employer.
c. Fraud or willful breach of the trust reposed by the employer or his duly authorized
representative to the employee In this case, the Serrano doctrine was re-examined.
d. Commission of a crime or offense by the employee against the person of the employer or First, in the Serrano case, the dismissal was upheld, but it was held to be ineffectual (without
any member of his immediate family or his duly authorized representative legal effect). Hence, Serrano was still entitled to the payment of his backwages from the time
e. Any other causes analogous to the foregoing. of dismissal until the promulgation of the court of the existence of an authorized cause.
Further, he was entitled to his separation pay as mandated under Art. 283. The ruling is unfair
To establish abandonment, two elements must be present: to employers and has the danger of the following consequences:
a. The unjustified failure of the employee to report for work a. The encouragement of filing frivolous suits even by notorious employees who were justly
b. A clear intention to sever e-e relationship, manifested by overt acts dismissed but were deprived of statutory due process; they are rewarded by invoking due
process
Here, the Agabons were frequently absent from work for having performed installation work for b. It would create absurd situations where there is just or authorized cause but a procedural
another company, despite prior warning given by Riviera. This clearly establishes an intention infirmity invalidates the termination, ie an employee who became a criminal and
to sever the e-e relationship between them, and which constitutes abandonment. threatened his co-workers‘ lives, who fled and could not be faound
c. It could discourage investments that would generate employment in the economy
2. Yes. While the employer has the right to expect good performance, diligence, good conduct Second, the payment of backwages is unjustified as only illegal termination gives the
and loyalty from its employees, it also has the duty to provide just compensation to his employee the right to be paid full backwages. When the dismissal is valid or upheld, the
employees and to observe the procedural requirements of notice and hearing in the employee has no right to backwages.
termination of his employees.
Procedure of termination (Omnibus Rules Implementing the Labor Code): Dismissals based on just causes: acts or omissions attributable to the employee; no right
a. A written notice to the employee specifying the grounds for termination and giving the to claim backwages or to pay separation pay (separation pay is subject to exception, ie if
employee reasonable opportunity to be heard termination is not based on serious misconduct or a conduct reflecting the moral depravity of a
b. A hearing where the employee is given the opportunity to respond to the charges against person, separation pay may be granted by reason of social justice)
him and present evidence or rebut the evidence presented against him (if he so requests)
c. A written notice of termination indicating that grounds have been established to justify his Dismissals based on authorized causes: involve grounds provided under the Labor Code;
termination upon due consideration of all circumstances employee (and DOLE) is entitled the payment of separation pay (redundancy and installation of
labor-saving devices: 1 month pay or 1 month/yr of service, whichever is higher; retrenchment
In this case, Riviera failed to notify the Agabons of their termination to their last known and closure or cessation of business: 1 month pay or ½ month per year of service, whichever is
addresses. Hence, they violated the procedural requirement laid down by the law in the higher)
termination of employees.
Illegal termination: employee is entitled to the payment of full backwages as well as
3. No. Constitutional due process is that provided under the Constitution, which involves the reinstatement without loss of seniority rights and other privileges, inclusive of allowances and
protection of the individual against governmental oppression and the assurance of his rights In

150
other monetary claims from the time compensation was withheld until reinstatement; if During the course of her employment, Alcaraz noticed that some of the staff had disciplinary
reinstatement is not possible, separation pay shall be given. problems. Thus, she would reprimand them for their unprofessional behavior such as non-
observance of the dress code, moonlighting, and disrespect of Abbott officers. However, Alcaraz‘s
201. Abbott Laboratories Phil. vs. NLRC Alcaraz, G.R. No. 192571, 23 July 2013 method of management was considered by her immediate supervisor, Kelly Walsh, to be "too
Topic: Due Process – Hearing, Opportunity to be heard strict."

Abbott Laboratories, Philippines (Abbott) caused the publication in a major broadsheet newspaper On April 2005 while on a meeting with the HR Director Terrible, she accidentally saw a printed
of its need for a Medical and Regulatory Affairs Manager (Regulatory Affairs Manager) who would: copy of an e-mail sent by Walsh to some staff members which essentially contained queries
(a) be responsible for drug safety surveillance operations, staffing, and budget; (b) lead the regarding the former‘s job performance. Alcaraz asked if Walsh‘s action was the normal process of
development and implementation of standard operating procedures/policies for drug safety evaluation. Terrible said that it was not.
surveillance and vigilance; and (c) act as the primary interface with internal and external On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible where she was
customers regarding safety operations and queries. Alcaraz - who was then a Regulatory Affairs informed that she failed to meet the regularization standards for the position of Regulatory Affairs
and Information Manager at Aventis Pasteur Philippines, Incorporated (another pharmaceutical Manager. Thereafter, Walsh and Terrible requested Alcaraz to tender her resignation, else they be
company like Abbott) – showed interest and submitted her application. forced to terminate her services. She was also told that, regardless of her choice, she should no
longer report for work and was asked to surrender her office identification cards. She requested to
On December 7, 2004, Abbott formally offered the employment to Alcaraz, under a probationary be given one week to decide on the same, but to no avail.
basis of employment and was accepted by Alcaraz on the same day which was confirmed through
electronic mail (e-mail) by Abbott‘s recruitment officer Teresita C. Bernardo (Bernardo), confirming On May 23, 2005, Walsh and Terrible personally handed Alcaraz a letter stating that her services
the same. Bernardo, on the same email attached Abbott‘s organizational chart and a job had been terminated effective May 19, 2005.21 The letter detailed the reasons for Alcaraz‘s
description of Alcazar‘s work. termination – particularly, that Alcaraz: (a) did not manage her time effectively; (b) failed to gain
the trust of her staff and to build an effective rapport with them; (c) failed to train her staff
Alcaraz signed the employment contract on February 12, 2005 which stated that she was to be effectively; and (d) was not able to obtain the knowledge and ability to make sound judgments on
placed on probation for a period of six (6) months beginning February 15, 2005 to August 14, case processing and article review which were necessary for the proper performance of her duties.
2005. Alcaraz felt that she was unjustly terminated from her employment and thus, filed a complaint for
illegal dismissal and damages against Abbott and its officers.
During her pre-employment briefing, Alcaraz was informed of her duties and responsibilities. On
March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott‘s Human Resources (HR) She claimed that she should have already been considered as a regular and not a probationary
Director, sent Alcaraz an e-mail which contained an explanation of the procedure for evaluating employee given Abbott‘s failure to inform her of the reasonable standards for her regularization
the performance of probationary employees and further indicated that Abbott had only one upon her engagement as required under Article 295 of the Labor Code. In this relation, she
evaluation system for all of its employees. Alcaraz was also given copies of Abbott‘s Code of contended that while her employment contract stated that she was to be engaged on a
Conduct and Probationary Performance Standards and Evaluation (PPSE) and Performance probationary status, the same did not indicate the standards on which her regularization would be
Excellence Orientation Modules (Performance Modules) which she had to apply in line with her based. She further averred that the individual petitioners maliciously connived to illegally dismiss
tasks. her when: (a) they threatened her with termination; (b) she was ordered not to enter company
premises even if she was still an employee thereof; and (c) they publicly announced that she
Abbott‘s PPSE procedure mandates that the job performance of a probationary employee should already resigned in order to humiliate her.
be formally reviewed and discussed with the employee at least twice: first on the third month and
second on the fifth month from the date of employment. The necessary Performance The Labor Arbiter dismissed the case for lack of merit. The LA rejected Alcaraz‘s argument that she
Improvement Plan should also be made during the third-month review in case of a gap between was not informed of the reasonable standards to qualify as a regular employee considering her
the employee‘s performance and the standards set. These performance standards should be admissions that she was briefed by Almazar on her work during her pre-employment orientation
discussed in detail with the employee within the first two (2) weeks on the job. It was equally meeting and that she received copies of Abbott‘s Code of Conduct and Performance Modules which
required that a signed copy of the PPSE form must be submitted to Abbott‘s Human Resources were used for evaluating all types of Abbott employees.31 As Alcaraz was unable to meet the
Department (HRD) and shall serve as documentation of the employee‘s performance during standards set by Abbott as per her performance evaluation, the LA ruled that the termination of
his/her probationary period. This shall form the basis for recommending the confirmation or her probationary employment was justified.
termination of the probationary employment.

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On appeal, the NLRC reversed the LA‘s decision and ruled that there was no evidence showing that standards of the employer in case of probationary employment, it shall be sufficient that a written
Alcaraz had been apprised of her probationary status and the requirements which she should have notice is served the employee, within a reasonable time from the effective date of termination."
complied with in order to be a regular employee. It held that Alcaraz‘s receipt of her job When Alcaraz was informed of her termination by the written notice dated May 19, 2005, it
description and Abbott‘s Code of Conduct and Performance Modules was not equivalent to her sufficiently meets the criteria set forth above, thereby legitimizing the cause and manner of
being actually informed of the performance standards upon which she should have been evaluated Alcaraz‘s dismissal as a probationary employee under the parameters set by the Labor Code.
on. It further observed that Abbott did not comply with its own standard operating procedure in
evaluating probationary employees. The NLRC was also not convinced that Alcaraz was terminated Nonetheless, despite the existence of a sufficient ground to terminate Alcaraz‘s employment and
for a valid cause given that petitioners‘ allegation of Alcaraz‘s "poor performance" remained Abbott‘s compliance with the Labor Code termination procedure, it is readily apparent that Abbott
unsubstantiated. breached its contractual obligation to Alcaraz when it failed to abide by its own procedure in
evaluating the performance of a probationary employee. While it is Abbott‘s management
The CA affirmed the NLRC decision.
prerogative to promulgate its own company rules and even subsequently amend them, this right
Issue: (1) Whether or not Alcaraz is a probationary employee and her failure to comply with the equally demands that when it does create its own policies and thereafter notify its employee of the
standards of her employment is a valid ground for dismissal. same, it accords upon itself the obligation to faithfully implement them.

Held: (1) YES. In this light, while there lies due cause to terminate Alcaraz‘s probationary employment for her
A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of failure to meet the standards required for her regularization, and while it must be further pointed
probationary employment, aside from just or authorized causes of termination, an additional out that Abbott had satisfied its statutory duty to serve a written notice of termination, the fact
ground is provided under Article 295 of the Labor Code, i.e., the probationary employee may also that it violated its own company procedure renders the termination of Alcaraz‘s employment
be terminated for failure to qualify as a regular employee in accordance with the reasonable procedurally infirm, warranting the payment of nominal damages.
standards made known by the employer to the employee at the time of the engagement. Corollary 202. KING OF KINGS TRANSPORT, INC., CLAIRE DELA FUENTE, and MELISSA LIM vs.
thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if SANTIAGO O. MAMAC
the employer fails to inform the probationary employee of the reasonable standards upon which
the regularization would be based on at the time of the engagement, then the said employee shall Topic: Due Process
be deemed a regular employee.
FACTS: Respondent Santiago Mamac was hired as a bus conductor of Don Mariano Transit
Corporation (DMTC). Later on, respondent together with other employees were transferred to King
In other words, the employer is made to comply with two (2) requirements when dealing with a
of Kings Transport, Inc. (KKTI). The employees organized a union and elected Respondent Mamac
probationary employee: first, the employer must communicate the regularization standards to the
as the President of Kaisahan ng mga Kawani sa Kings of Kings (KKKK). On October 28, 2001, KKTI
probationary employee; and second, the employer must make such communication at the time of
noted an irregularity in the Conductor‘s Trip Report and discovered that respondent declared
the probationary employee‘s engagement. If the employer fails to comply with either, the
several sold tickets as returned tickets causing KKTI to lose an income of P890.00. When
employee is deemed as a regular and not a probationary employee. Keeping with these rules, an
confronted, respondent made a written letter and explained that the windshield of their assigned
employer is deemed to have made known the standards that would qualify a probationary
bus was smashed thus forcing them to cut short the trip in order to report it to the police. As a
employee to be a regular employee when it has exerted reasonable efforts to apprise the
result he got confused in making the trip report. Respondent received a termination letter from
employee of what he is expected to do or accomplish during the trial period of probation.
KKTI. It stated that the irregularity in the Conductor‘s Trip Report was an act of fraud against the
company. KKTI also cited respondent Mamac‘s past offenses as basis for his dismissal. Thus,
Examination of the records reveals that Abbott had indeed complied with the above-stated Respondent filed a complaint for illegal dismissal, union busting, illegal deductions, non-payment
requirements. This conclusion is largely impelled by the fact that Abbott clearly conveyed to of 12th month pay, service incentive leave and separation pay. In its answer, petitioner alleged
Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to, during the time of that respondent was legally dismissed and that respondent had violated the trust and confidence
her engagement, and the incipient stages of her employment. Alcaraz was well-aware that her given by KKTI. The Labor Arbiter dismissed the case for lack of merit. When appealed to the
regularization would depend on her ability and capacity to fulfill the requirements of her position NLRC, it modified the ruling and ordered petitioner to pay respondent P10,000 for failure to
as Regulatory Affairs Manager and that her failure to perform such would give Abbott a valid cause comply with due process prior to termination. Respondent filed a petition for certiorari to the CA.
to terminate her probationary employment. The appellate Court affirmed the holding of the NLRC that there was just cause for the dismissal of
respondent Mamac but failed to comply with the re5uired procedural due process prior to the
A different procedure is applied when terminating a probationary employee; the usual two-notice termination of respondent. Petitioner appealed the case to the Supreme Court.
rule does not govern.65 Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code
states that "if the termination is brought about by the x x x failure of an employee to meet the
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ISSUE:Whether or not verbal appraisal of the charges against the employee a breach of the Issue:―What are the legal implications of a situation where an employee is dismissed for cause
procedural due process. but such dismissal was effected without the employer‘s compliance with the notice requirement
under the Labor Code?‖
Held:Yes. Verbal appraisal of charges against the employee will not suffice.
Held: At this point, we note that there are divergent implications of a dismissal for just cause
In terminating the services of an employee, the following must be considered: under Article 282, on one hand, and a dismissal for authorized cause under Article 283, on the
1. First written notice indicating the charges or grounds for termination against the employee other.
and a directive that the employee is given the opportunity to submit their written explanation A dismissal for just cause under Article 282 implies that the employee concerned has committed,
within a reasonable period. or is guilty of, some violation against the employer, i.e. the employee has committed some serious
2. Hearing or Conference to give the employee the opportunity to be heard, present evidences misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected his
and rebut evidence presented against him. duties. Thus, it can be said that the employee himself initiated the dismissal process.
3. Written notice of termination indicating that all circumstances related to the charge against
the employee were considered and the grounds for his dismissal. On another breath, a dismissal for an authorized cause under Article 283 does not necessarily
imply delinquency or culpability on the part of the employee. Instead, the dismissal process is
First, respondent was not issued a written notice charging him of committing an infraction. The initiated by the employer‘s exercise of his management prerogative, i.e. when the employer opts
law is clear on the matter. A verbal appraisal of the charges against an employee does not comply to install labor saving devices, when he decides to cease business operations or when, as in this
with the first notice requirement. In Pepsi Cola Bottling Co. v. NLRC, the Court held that case, he undertakes to implement a retrenchment program.
consultations or conferences are not a substitute for the actual observance of notice and hearing.
Also, in Loadstar Shipping Co., Inc. v. Mesano, the Court, sanctioning the employer for The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for
disregarding the due process requirements, held that the employee‘s written explanation did not authorized cause under Article 283 is further reinforced by the fact that in the first, payment of
excuse the fact that there was a complete absence of the first notice. Second, even assuming that separation pay, as a rule, is not required, while in the second, the law requires payment of
petitioner KKTI was able to furnish respondent an irregularity Report notifying him of his offense, separation pay.9
such would not comply with the requirements of the law. We observe from the irregularity reports
against respondent for his other offenses that such contained merely a general description of the For these reasons, there ought to be a difference in treatment when the ground for dismissal is
charges against him. The reports did not even state a company rule or policy that the employee one of the just causes under Article 282, and when based on one of the authorized causes under
had allegedly violated. Likewise, there is no mention of any of the grounds for termination of Article 283.
employment under Art. 282 of the Labor Code. Thus, KKTI‘s ―standard‖ charge sheet is not Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282
sufficient notice to the employee. Third, no hearing was conducted. Regardless of respondent‘s but the employer failed to comply with the notice requirement, the sanction to be imposed upon
written explanation, a hearing was still necessary in order for him to clarify and present evidence him should be tempered because the dismissal process was, in effect, initiated by an act imputable
in support of his defense. Moreover, respondent made the letter merely to explain the to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the
circumstances relating to the irregularity in his October 28, 2001 Conductor‘s Trip Report. He was employer failed to comply with the notice requirement, the sanction should be stiffer because the
unaware that a dismissal proceeding was already being effected. Thus, he was surprised to receive dismissal process was initiated by the employer‘s exercise of his management prerogative.
the November 26, 2001 termination letter indicating as grounds, not only his October 28, 2001
infraction, but also his previous infractions. The records before us reveal that, indeed, JAKA was suffering from serious business losses at the
time it terminated respondents‘ employment.
203. Jaka Foods Processing Corp. vs. Pacot; G.R. No. 151378; 28 March 2005
The Statement of Income and Deficit of the respondent-appellant corporation to prove its alleged
Facts: Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel losses was prepared by an independent auditor, SGV & Co. It convincingly showed that the
Lescano and Jonathan Cagabcab were earlier hired by petitioner JAKA Foods Processing respondent-appellant corporation was in dire financial straits, which the complainants-appellees
Corporation (JAKA, for short) until the latter terminated their employment on August 29, 1997 failed to dispute. The losses incurred by the respondent-appellant corporation are clearly
because the corporation was "in dire financial straits". It is not disputed, however, that the substantial and sufficiently proven with clear and satisfactory evidence. Losses incurred were
termination was effected without JAKA complying with the requirement under Article 283 of the adequately shown with respondent-appellant‘s audited financial statement. Having established the
Labor Code regarding the service of a written notice upon the employees and the Department of loss incurred by the respondent-appellant corporation, it necessarily necessarily (sic) follows that
Labor and Employment at least one (1) month before the intended date of termination. the ground in support of retrenchment existed at the time the complainants-appellees were
terminated.

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It is, therefore, established that there was ground for respondents‘ dismissal, i.e., retrenchment, The Court held that under the terms of the decision under execution, no essential change is made
which is one of the authorized causes enumerated under Article 283 of the Labor Code. Likewise, it by a re-computation as this step is a necessary consequence that flows from the nature of the
is established that JAKA failed to comply with the notice requirement under the same Article. illegality of dismissal declared in that decision. A re-computation (or an original computation, if no
Considering the factual circumstances in the instant case and the above ratiocination, we, previous computation has been made) is a part of the law – specifically, Article 279 of the Labor
therefore, deem it proper to fix the indemnity at P50,000.00. Code and the established jurisprudence on this provision – that is read into the decision. By the
nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as
Other relevant info: expressed under Article 279 of the Labor Code. The re-computation of the consequences of illegal
This, certainly, is not a case of first impression. In the very recent case of Agabon vs. NLRC,8 we dismissal upon execution of the decision does not constitute an alteration or amendment of the
had the opportunity to resolve a similar question. Therein, we found that the employees final decision being implemented. The illegal dismissal ruling stands; only the computation of the
committed a grave offense, i.e., abandonment, which is a form of a neglect of duty which, in turn, monetary consequences of this dismissal is affected and this is not a violation of the principle of
is one of the just causes enumerated under Article 282 of the Labor Code. In said case, we upheld immutability of final judgments
the validity of the dismissal despite non-compliance with the notice requirement of the Labor Code. 205. Leopard Security and Investigation Agency vs Quitory
However, we required the employer to pay the dismissed employees the amount of P30,000.00, G.R. No. 186344 : February 20, 2013
representing nominal damages for non-compliance with statutory due process. The difference LEOPARD SECURITY AND INVESTIGATION AGENCY, Petitioner, v. TOMAS QUITOY,
between Agabon and the instant case is that in the former, the dismissal was based on a just RAUL SABANG and DIEGO MORALES, Respondents.
cause under Article 282 of the Labor Code while in the present case, respondents were dismissed
due to retrenchment, which is one of the authorized causes under Article 283 of the same Code. Alongside Numeriano Ondong, respondents Tomas Quitoy, Raul Sabang and Diego Morales were
204. SESSION DELIGHTS ICE CREAM VS. CA G.R. No. 172149 August 02, 2010 hired as security guards by petitioner Leopard Security and Investigation Agency (LSIA) which
TOPIC: Relief for Illegal Dismissal maintained its office at BCC House, 537 Shaw Boulevard, Mandaluyong City.All being residents of
Cebu City, respondents were assigned by LSIA to the different branches of its only client in said
FACTS: A complaint for illegal dismissal was filed against petitioner Session Delights by private locality, Union Bank of the Philippines (Union Bank). On 1 April 2005, it appears that Union Bank
respondent Adonis Armenio M. Flora. The labor arbiter decided against petitioner, finding that it served a notice to LSIA, terminating the partiessecurity service contract effective at the end of
had illegally dismissed the private respondent. Based on such finding, it awarded private business hours of 30 April 2005. Thru its representative, Rogelio Morales, LSIA informed
respondent backwages, separation pay in lieu of reinstatement, indemnity, and attorney‘s fees. respondents on 29 April 2005 of the termination of its contract with Union Bank which had decided
to change its security provider. Upon Moralesinstruction, respondents went to the Union Bank
The CA affirmed with modification the NLRC decision by deleting the awards for a proportionate Cebu Business Park Branch on 30 April 2005, for the turnover of their service firearms to Arnel
13th month pay and for indemnity. In January 2004, and in the course of the execution of the Cortes, Union Bank Chief Security Officer.
above final judgment, a pre-execution conference was held, with the contending parties in On 3 May 2005, respondents and Ondong filed a complaint for illegal dismissal, unpaid 13th month
attendance. In said conference an updated computation of the monetary awards in the total pay and service incentive leave pay (SILP), moral and exemplary damages as well as attorney fees
amount of P235,986.00, which included additional backwages and separation pay and a against LSIA, its President, Jose Poe III, Union Bank, its Regional Service and Operations Officer,
proportionate amount of the 13th month pay due to private respondent Flora, was made and was Catherine Cheung, HerbertHojas, Protectors Services, Inc. (PSI) and Capt. Gerardo Jaro. With the
approved by the Labor Arbiter about three (3) months after. The petitioner objected to the re- complaint already docketed as RAB Case No. 07-05-0979-2005 before the Regional Arbitration
computation and appealed the labor arbiter‘s order to the NLRC but the same was denied. The CA, Branch No. VII of the National Labor Relations Commission (NLRC) in Cebu City, it appears that
however, partially granted the petition by deleting the awarded proportionate 13th month pay. LSIA sent on 10 May 2005 a notice requiring respondents to report for work to its Mandaluyong
City office. In an Order dated 6 June 2005, Cheung and Hojas were later dropped as parties-
Issue: Whether or not the updated computation was proper. respondents from the case upon motion of respondents. In view of Ondong execution of a
quitclaim, on the other hand, his complaint was likewise dismissed with prejudice, resulting in the
Held: Yes. The updated computation was proper. The issue in the case at bar is not the exclusion of PSI and Jaro as parties-respondents from the case.
correctness of the awards, the finality of the CA‘s judgment, nor the petitioner‘s failure to appeal.
Rather, it is the propriety of the computation of the awards made, whether this violated the
principle of immutability of final judgments.
In support of their complaint, respondents averred that they were hired and assigned by LSIA to
In concrete terms, the question is whether a re-computation in the course of execution, of the the different Cebu City branches of Union Bank which directly paid their salaries and whose branch
labor arbiter‘s original computation of the awards made pegged as of the time the decision was managers exercised direct control and supervision over them. Required to work from 7:30 a.m. to
rendered and confirmed with modification by a final CA decision, is legally proper. 9:00 p.m. daily, respondents claimed that they took orders and instructions from Union Bank

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branch managers since LSIA had no administrative personnel in Cebu City. Respondents further a party who did not appeal cannot assign such errors as are designed to have the judgment
asserted that, after introducing himself as a representative of LSIA on 29 April 2005, Morales modified.
belatedly informed them that their services would be terminated at the end of the office hours on
the same business day. Directed by Morales to report to Union Bank Cebu Business Park Branch Having correctly ruled out illegal dismissal of respondents, the CA reversibly erred, however, when
the next day, respondents maintained that they surrendered their service firearms to Cortes who it sustained the NLRC award of separation pay on the ground that the partiesrelationship had
told them that Union Bank would be engaging the services of another security agency effective the already been strained. For one, liability for the payment of separation pay is a legal consequence
next working day. Not even reimbursed their firearm bond nor told that Union Bank had no of illegal dismissal where reinstatement is no longer viable or feasible. Under Article 279 of the
monetary obligation to them, respondents claimed they were constrained to file their complaint Labor Code, an illegally dismissedemployee is entitled to the twin reliefs of full backwages and
and to pray that the former be held jointly and severally liable with LSIA for their claims. reinstatement without loss of seniority rights. Aside from the instances provided under Articles 283
and 284of the Labor Code, separation pay is, however, granted when reinstatement is no longer
XXX feasible because of strained relations between the employer and the employee.In cases of illegal
dismissal, the accepted doctrine is that separation pay is available in lieu of reinstatement when
On appeal, the foregoing decision was modified by the Fourth Division of the NLRC, applying the the latter recourse is no longer practical or in the best interest of the parties.
principle that security agencies like LSIA are allowed to put security guards on temporary off-detail
or floating status for a period not exceeding six months, the NLRC discounted the factual and legal As a relief granted in lieu of reinstatement, however, it consequently goes without saying that an
bases for the illegal dismissal determined by the Labor Arbiter as well as the backwages awarded award of separation pay is inconsistent with a finding that there was no illegal dismissal. Standing
in favor of respondents. Finding that the filing of the complaint on 3 May 2005 was premature, the alone, the doctrine of strained relations will not justify an award of separation pay, a relief granted
NLRC took note of the fact that respondents did not even protest against the report to work order in instances where the common denominator is the fact that the employee was dismissed by the
issued by LSIA. Even then, the NLRC upheld the Labor Arbiter award of separation pay on the employer. Even in cases of illegal dismissal, the doctrine of strained relations is not applied
theory that reinstatement was no longer viable. Belatedly submitting documents to prove its indiscriminately as to bar reinstatement, especially when the employee has not indicated an
payment of SILP, LSIA filed a motion for reconsideration of the foregoing decision which was, aversion to returning to work or does not occupy a position of trust and confidence in or has no
however, denied for lack of merit in the NLRC 23 July 2007 Resolution. say in the operation of the employer business. Although litigation may also engender a certain
degree of hostility, it has likewise been ruled that the understandable strain in the partiesrelations
HELD: The petition is impressed with merit. would not necessarily rule out reinstatement which would, otherwise, become the rule rather than
Applying Article 286 of the Labor Code of the Philippines by analogy, this Court has repeatedly the exception in illegal dismissal cases.
recognized that security guards may be temporarily sidelined by their security agency as their Absent illegal dismissal on the part of LSIA and abandonment of employment on the part of
assignments primarily depend on the contracts entered into by the latter with third parties. respondents, we find that the latter reinstatement without backwages is, instead, in order. In
Temporary "off-detail" or "floating status" is the period of time when security guards are in addition to respondent alternative prayer therefor in their position paper, reinstatement is justified
between assignments or when they are made to wait after being relieved from a previous post by LSIA directive for them to report for work at its Mandaluyong City office as early of 10 May
until they are transferred to a new one. It takes place when, as here, the security agency clients 2005. As for the error ascribed the CA for failing to correct the NLRC disregard of the evidence
decide not to renew their contracts with the agency, resulting in a situation where the available showing LSIA payment of respondentsSILP, suffice it to say that the NLRC is not precluded from
posts under its existing contracts are less than the number of guards in its roster. For as long as receiving evidence, even for the first time on appeal, because technical rules of procedure are not
such temporary inactivity does not continue for a period exceeding six months, it has been ruled binding in labor cases.Considering that labor officials are, in fact, encouraged to use all reasonable
that placing an employee on temporary "off-detail" or "floating status" is not equivalent to means to ascertain the facts speedily and objectively, with little resort to technicalities of law or
dismissal. procedure, LSIA correctly faults the CA for likewise brushing aside the evidence of SILP payments
In the case at bench, respondents were informed on 29 April 2005 that they were going to be it submitted during the appeal stage before the NLRC.
relieved from duty as a consequence of the 30 April 2005 expiration of the security service 206 PHILIPPINE JOURNALISTS, INC. vs. MICHAEL MOSQUEDA; G.R. No. 141430. May 7, 2004
contract between Union Bank and LSIA. While respondents lost no time in immediately filing their
complaint on 3 May 2005, the record equally shows that they were directed by LSIA to report for FACTS: After the 1986 EDSA revolution, Philippine Journalists, Inc. (PJI), petitioner, was
work at its Mandaluyong City office on 10 May 2005 or a mere ten days from the time the former sequestered by the Presidential Commission on Good Government (PCGG). [3] By virtue of the writs
were effectively sidelined. Considering that a security guard is only considered illegally dismissed of sequestration issued by the Sandiganbayan, PJI was placed under the management of PCGG,
from service when he is sidelined from duty for a period exceeding six months, we find that the CA through its nominees to the Board of Directors.
correctly upheld the NLRC ruling that respondents were not illegally dismissed by LSIA.
Parenthetically, said ruling is binding on respondents who did not appeal either the decision However, Rosario Olivares, who owns 20% or 1,000 common shares, attempted to regain
rendered by the NLRC or the CA in line with the entrenched procedural rule in this jurisdiction that control of the PJI management. As a consequence, the Olivares group and the PCGG group held

155
separate stockholders meetings, where each group elected its own members to the Board of 207. PHILIPPINE NATIONAL BANK (PNB) v. RAMON BRIGIDO L. VELASCO; G.R. No.
Directors. During that stockholders meeting, the Olivares group passed Resolution No. 92-2 166096; September 11, 2008
designating Michael Mosqueda, respondent, as Chairman of a Task Force, along with five (5) other Topic: Preventive Suspension
members.
Facts: An administrative charge was filed against Respondent by its employer, PNB, which alleged
Abraham J. Buenaluz, Officer-in-charge of PJIs Administrative Services Division, issued a that: (1) he transacted a no-book withdrawal against his Dollar Savings Account No. 010-714698-9
memoradum to respondent and the other members of the Task Force charging them with serious at PNB Ligao, Albay; (2) he failed to present any letter of introduction as required under General
misconduct prejudicial to the interest of the company and/or present management; willful breach Circular 3-72/92; (3) the irregular inter-branch withdrawal was aggravated by the failure of Escolta
of trust and confidence; conflict of interest; and disloyalty under the PJI Personnel Handbook and Branch to post/enter the withdrawal into the computer upon receipt of the TEC advice, resulting in
directing them to submit their written explanation within 24 hours from notice. Respondent the overstatement of the account balance by US$15,000.00; and (4) since he was presumed to be
submitted his explanation the next day, while the other members of the Task Force submitted fully aware that neither the deposit nor withdrawal of the US$15,000.00 was reflected on the
their joint explanation. passbook, he was able to appropriate the amount for his personal benefit, free of interest, to the
damage and prejudice of PNB. Eventually, after withholding all his benefits, Respondent was
Meanwhile, in a Memorandum dated February 8, 1992, petitioners new management placed under preventive suspension. Although Respondent was exonerated of the charges of
placed respondent and other members of the Task Force under preventive suspension pending the dishonesty and conduct prejudicial to the best interest of service, he was found guilty of grave
investigation of the formal charges against them. Petitioners new management served upon misconduct, mitigated by length of service and absence of actual loss to PNB. Thus, he was meted
respondent and the other members of the Task Force the notices of the formal investigation. the penalty of forced resignation with benefits.
However, prior to the investigation, the Journal Employees Union (Union), for and in behalf of
respondent and other members, filed with the Labor Arbiter a complaint for illegal suspension, On December 22, 1997, he filed a Complaint against PNB for illegal suspension, illegal dismissal,
unfair labor practice, and damages against petitioner. and damages before the NLRC. The LA ruled in favor of PNB, dismissing the complaint for want of
merit, which was affirmed by the NLRC. These rulings were reversed by the CA.
Subsequently, petitioner conducted clarificatory hearings, but respondent and the other
employees concerned failed to appear despite notice. Nonetheless, petitioners investigating Issues:
panelgave the employees an opportunity to present their evidence but still they failed to do so. 1. Whether or not the CA erred and gravely abused its discretion in finding that Respondent
Petitioner terminated the services of respondent and the other members of the Task Force. This has been illegally dismissed by PNB; and
prompted the union to file, on March 25, 1992, with the Labor Arbiter an amended complaint for 2. Whether or not the CA erred and gravely abused its discretion in directing PNB to pay
illegal dismissal, unfair labor practices and damages. Labor Arbiter rendered a decision in favor of Respondent separation pay and backwages
respondent and the other five employees NLRC affirmed said decision but deleted the award of
back wages. CA reinstated the Arbiters award of backwages. Held: 1. Yes. It is settled that in order for misconduct to be serious in accordance with Art. 282
of the LC, "it must be of such grave and aggravated character and not merely trivial or
ISSUE: WHETHER OR NOT THE AWARD OF BACKWAGES TO RESPONDENT IS PROPER? unimportant." As amplified by jurisprudence, the misconduct must (1) be serious; (2) relate to the
performance of the employee‘s duties; and (3) show that the employee has become unfit to
COURT’S RULING: continue working for the employer. Velasco violated bank rules when he transacted a "no-book"
Yes. Employee who is found to be illegally dismissed is entitled to backwages. withdrawal by his failure to present his passbook to the PNB Ligao, Albay Branch on June 30,
Under Art. 279 of the Labor Code, an employee who is unjustly dismissed is entitled to 1995. Velasco did not only violate bank rules and regulations. What compounds his offense was
reinstatement, without loss of seniority rights and other privileges, and to the payment of his his unusual silence. He never informed PNB about the huge overstatement of US$15,000.00 in his
full backwages, inclusive of allowances, and other benefits or their monetary equivalent, account. He updated his passbook on October 6, 1995 by depositing US$12.78.
computed from the time his compensation was withheld from him (which, as a rule, is from the
time of his illegal dismissal) up to the time of his actual reinstatement. 2.Yes. The CA erred in directing PNB to pay Velasco separation pay and backwages. PNB
has no other liability to Velasco, except his unpaid wages from May 27, 1996 to July 31,
Similarly, under R.A. 6715, employees who are illegally dismissed are entitled to full 1996. He is not entitled to separation and backwages because he was not illegally
backwages, inclusive of allowances and other benefits or their monetary equivalent, computed dismissed
from the time their actual compensation was withheld from them up to the time of their actual
reinstatement. If reinstatement is no longer possible, the backwages shall be computed from the 208. Mandapat vs. Add Force Personnel Services Inc.; G.R. No. 180285; July 6, 2010
time of their illegal termination up to the finality of the decision. Topic: Preventive Suspension

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Ma. Socorro Mandapat (Mandapat) was hired by Add Force Personnel Services, Inc. (Add Force) as Department Order No. 9, Series of 1997). No preventive suspension shall last longer than 30 days
Sales and Marketing Manager to negotiate and consummate contracts with clients who wanted to and the employer shall thereafter reinstate the worker in his former or in a substantially equivalent
avail of Add Force‘s services. position or the employer may extend the period of suspension provided that during the period of
extension, he pays the wages and other benefits due to the worker (Section 9, Rule XXIII, Book V,
According to Add Force, during her 5-month stint as Sales and Marketing Manager, Mandapat Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9, Series of
failed to close a single deal, issued several proposals to clients which were grossly 1997). When preventive suspension exceeds the maximum period allowed without reinstating the
disadvantageous to Add Force or disregarded the client‘s budget ceiling, sent out several employee either by actual or payroll reinstatement or when preventive suspension is for an
communications to clients containing erroneous data and computations, consistently failed to indefinite period, only then will constructive dismissal set in.
submit her reports, and submitted fictitious daily activity reports and reimbursement slips. Hence,
a show-cause notice was given by Add Force to Mandapat, directing her to explain why she should While no period was mentioned in the show-cause memorandum, the inclusion of the phrase
not be disciplined for gross and habitual neglect of duties and willful breach of trust. The notice ―during the course of investigation‖ would lead to a reasonable and logical presumption that said
also placed her on preventive suspension during the course of the investigation. suspension in fact had a duration which could very well be not more than 30 days as mandated by
law. And, as the CA correctly observed, the suspension was rendered moot by Mandapat‘s
Mandapat gave Add Force her response to the show-cause memorandum along with her resignation tendered a day after the suspension was made effective.
resignation letter supposedly in protest of the preventive suspension. Subsequently, she filed a
complaint with the labor arbiter, claiming she was constructively dismissed when she was placed The preventive suspension was also necessary to protect Add Force‘s assets and operations
on preventive suspension, her access to the internet cut-off, and then pressured by Add Force to pending investigation of Mandapat. As Sales Manager, Mandapat had the power to enter into
resign in exchange for separation pay. She denied that she was negligent, and faulted the Chief contracts that would bind Add Force, regardless of whether these contracts would prove to be
Executive Officer for his indecisiveness and the lack of support staff for the sales department. She beneficial or prejudicial to its interest. The cutting-off of Mandapat‘s internet access was not
claimed that her preventive suspension was illegal for being indefinite, since its duration was not harassment but a consequence of the investigation against her and was intended to prevent her
stated in the show-cause memorandum. She argued that she did not pose any danger to the lives from having further access to the company‘s network-based documents and forms. Add Force‘s
of Add Force‘s officers or its properties to warrant the preventive suspension. acts were just measures to protect itself while the investigation was ongoing.

Add Force insisted that Mandapat resigned and was not dismissed, explaining that Mandapat was There was no coercion employed on Mandapat to resign. Mere allegations of threat or force do not
placed on preventive suspension because of the risk she posed on its property and business. Add constitute evidence to support a finding of forced resignation. In order for intimidation to vitiate
Force added that Mandapat‘s preventive suspension for 1 day can hardly be considered indefinite, consent, the following requisites must concur: (1) the intimidation caused the consent to be given;
given that she immediately resigned 1 day after the suspension. (2)the threatened act is unjust or unlawful; (3) the threat is real or serious, there being evident
disproportion between the evil and the resistance which all men can offer, leading to the choice of
The Labor Arbiter found that the charges of gross and habitual neglect and loss of trust and doing the act which is forced on the person to do as the lesser evil; and (4) it produces a well-
confidence were not substantiated, and declared Mandapat to have been constructively dismissed. grounded fear from the fact that the person from whom it comes has the necessary means or
The National Labor Relations Commission (NLRC) affirmed the labor arbiter‘s finding of ability to inflict the threatened injury to his person or property. None of these requisites was
constructive dismissal. Add Force brought the case to the Court of Appeals (CA) which reversed proven by Mandapat. No demand was made on her to resign. At most, she was merely given the
the decisions of the NLRC and the labor arbiter. The CA sustained the preventive suspension as a option to either resign or face disciplinary investigation, which Add Force had every right to
valid exercise of management prerogative pending investigation for a perceived violation of conduct in light of her numerous infractions. There was nothing irregular in providing an option to
company rules. The CA ruled that Mandapat chose to resign from her job and her resignation her. Ultimately, the final decision on whether to resign or face disciplinary action rested on her
mooted the issue of preventive suspension. Hence, this petition. alone.

Issue: Whether or not Mandapat was constructively dismissed. 209 DIAMOND TAXI and/or BRYAN ONG vs FELIPE LLAMAS, JR.
G.R. No. 190724 March 12, 2014
Held: No, Mandapat resigned and was not constrictively dismissed. Constructive dismissal exists TOPIC: CONSTRUCTIVE DISMISSAL
when an act of clear discrimination, insensibility or disdain by an employer has become so FACTS: Llamas worked as a taxi driver for petitioner Diamond Taxi, owned and operated by
unbearable to the employee leaving him with no option but to forego his continued employment. petitioner Bryan Ong. On July 18, 2005, Llamas filed before the Labor Arbiter (LA) a complaint for
illegal dismissal against the petitioners.
Preventive suspension may be legally imposed on employee whose alleged violation is the subject
of an investigation. The purpose of the suspension is to prevent harm or injury to the company as In their position paper, the petitioners denied dismissing Llamas. They claimed that
well (Section 8, Rule XXIII, Book V, Omnibus Rules Implementing the Labor Code, as amended by Llamas had been absent without official leave for several days. They also pointed out that Llamas

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committed several traffic violations in the years 2000-2005 and that they had issued him several insubordination but failed to specify the act of insubordination. Hence, they both filed for illegal
memoranda for acts of insubordination and refusal to heed management instructions. They argued constructive dismissal with claims fo backwages and separation pay. It was only after the filing of
that these acts – traffic violations, insubordination and refusal to heed management instructions – the case that San Joaquin received a memorandum from Ang dated August 30, 1999, placing the
constitute grounds for the termination of Llamas‘ employment. former under preventive suspension and ordering him to explain in writing, within three days, why
no disciplinary action should be imposed against him for his refusal to obey the August 28, 1999
Llamas failed to seasonably file his position paper. However, in his complaint, Llamas instructions to transfer the monobloc chairs. Eventually, they received memorandum terminating
alleged that he had a misunderstanding with Aljuver Ong, Bryan‘s brother and operations manager their employment.
of Diamond Taxi. When he reported for work the next day, Bryan refused to give him the key to The Labor Arbiter decided against the respondents stating that they were guilty of
his assigned taxi cab unless he would sign a prepared resignation letter. He did not sign the abandonment of work and that their accusation of constructive dismissal was false. The NLRC
resignation letter. He reported for work again the following day, but Bryan insisted that he sign the declared that there was no constructive dismissal. It held that respondents failed to prove that
resignation letter prior to the release of the key to his assigned taxi cab. Thus, he filed the illegal they were constructively dismissed; nor do the facts of the case sufficiently show that they were
dismissal complaint. constructively dismissed from employment.
The Labor Arbiter dismissed Llamas‘ complaint for lack of merit and declared that there ISSUE: WHETHER OR NOT THE TEARING OF THE EMPLOYEE‘S TIME CARD CAN BE CONSIDERED
was no constructive dismissal and instead Llamas left his job and had been absent for several days AS AN OUTRIGHT TERMINATION OF THE EMPLOYMENT RELATIONSHIP?
without leave. NLRC dismissed for non-perfection Llamas‘ motion for reconsideration treated as an COURT‘S RULING:
appeal. CA reversed and set aside the assailed NLRC resolution.
Yes. The employer‘s act of tearing to pieces the employee‘s time card may be considered
ISSUE: WHETHER OR NOT THERE IS CONSTRUCTIVE DISMISSAL WHEN THE OPERATIONS an outright – not only symbolic – termination of the parties‘ employment relationship.
MANAGER REFUSED TO GIVE THE EMPLOYEE THE KEY TO HIS TAXI?
Constructive dismissal exists where there is cessation of work because continued
COURT’S RULING: employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in
Yes, Llamas was constructively dismissed. Constructive dismissal exists when there is rank and a diminution in pay. It is a dismissal in disguise or an act amounting to dismissal but
cessation of work because continued employment is rendered impossible, unreasonable or made to appear as if it were not. The test of constructive dismissal is whether a reasonable person
unlikely. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but in the employee‘s position would have felt compelled to give up his position under the
made to appear as if it were not. In constructive dismissal cases, the employer is, concededly, circumstances.
charged with the burden of proving that its conduct and action were for valid and legitimate The CA is correct in its pronouncement that respondents were constructively dismissed
grounds. The petitioners' persistent refusal to give Llamas the key to his assigned taxi cab, on the from work. Moreover, by destroying respondents‘ time cards, Ang discontinued and severed his
condition that he should first sign the resignation letter, rendered, without doubt, his continued relationship with respondents. The purpose of a time record is to show an employee‘s attendance
employment impossible, unreasonable and unlikely; it, thus, constituted constructive dismissal. in office for work and to be paid accordingly, taking into account the policy of "no work, no pay". A
daily time record is primarily intended to prevent damage or loss to the employer, which could
210 VICENTE ANG vs. CEFERINO SAN JOAQUIN, JR., AND DIOSDADO FERNANDEZ; G.R. result in instances where it pays an employee for no work done;it is a mandatory requirement for
No. 185549; August 7, 2013 TOPIC: CONSTRUCTIVE DISMISSAL inclusion in the payroll, and in the absence of an employment agreement, it constitutes evidence
Ceferino San Joquin and Diosdado Fernandez were regular employees of Virose Furniture of employment. Thus, when Ang tore the respondents‘ time cards to pieces, he virtually removed
and Glass Supply. During the hearng for 41 criminal cases filed against the owner of Virose, them from Virose‘s payroll and erased all vestiges of respondents‘ employment; respondents were
Vicente Ang for his failure to remit his employees SSS contributions, the two testified against him. effectively dismissed from work. The act may be considered an outright – not only symbolic –
After the said hearing, Ang began to treat respondents with hostility and antagonism. After an termination of the parties‘ employment relationship; the "last straw that finally broke the camel‘s
incident between San Joaquin and Rosa, Ang‘s wife, after the former refused to help the latter in back", as respondents put it in their Position Paper.
her restaurant. San Joaquin returned to the store only to find out that Ang had torn hid DTR to
pieces while the DTR of Fernandez was torn to pieces immediately after the hearing in which he
respondets testified. On the same day, Fernandez reported for work and received a memorandum -end-
of even date issued by Ang informing him that he was placed on a one-week suspension for

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